<PAGE>
As filed with the Securities and Exchange Commission on January 28,2000
1933 Act File No. 2-25383
1940 Act File No. 811-1383
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
/ / Pre-Effective Amendment No.
/X/ Post-Effective Amendment No. 49
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
/X/ Amendment No. 37
(Check appropriate box or boxes)
BERGER ONE HUNDRED AND ONE FUND, INC
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
210 University Boulevard, Suite 900, Denver, Colorado 80206
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (303) 329-0200
----------------------------
Jack R. Thompson, 210 University Boulevard, Suite 900, Denver, CO 80206
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after this
post-effective amendment becomes effective.
It is proposed that this filing will become effective: (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b)
/ / on January 31, 1999, pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
Title of Securities Being Registered: Capital Stock
-------------------------------------------
<PAGE>
EXPLANATORY NOTE
The purpose of this Post-Effective Amendment No. 49 is to amend the Registration
Statement of the Berger One Hundred and One Fund, Inc. (the "Corporation") and
to extend the effective date of the Corporation's Post-Effective Amendment
No. 48 (filed on November 30, 1999) so that both Post-Effective Amendments are
effective January 31, 2000 pursuant to a request for accelerated approval of
this filing.
<PAGE>
BERGER FUNDS PROSPECTUS
January 31, 2000
BERGER INFORMATION TECHNOLOGY FUND ~ INVESTOR SHARES
BERGER NEW GENERATION FUND ~ INVESTOR SHARES
BERGER SELECT FUND
BERGER SMALL COMPANY GROWTH FUND ~ INVESTOR SHARES
BERGER SMALL CAP VALUE FUND ~ INVESTOR SHARES
BERGER MID CAP GROWTH FUND
BERGER MID CAP VALUE FUND
BERGER GROWTH FUND
BERGER/BIAM INTERNATIONAL FUND
BERGER GROWTH AND INCOME FUND
BERGER BALANCED FUND
The Securities and Exchange Commission has not approved or disapproved
any shares offered in this prospectus, or determined whether this
prospectus is accurate or complete. Anyone who tells you otherwise is
committing a crime. Like all mutual funds, an investment in the Berger
Funds is not a bank deposit and is not insured or guaranteed by the
FDIC or any other government agency. There is no guarantee that the
Funds will meet their investment goals, and although you have the
potential to make money, you could also lose money in the Funds.
<PAGE>
BERGER FUNDS, BERGER NEW GENERATION FUND, BERGER SMALL COMPANY GROWTH FUND,
BERGER SMALL CAP VALUE FUND, BERGER/BIAM INTERNATIONAL FUND, BERGER GROWTH AND
INCOME FUND, BERGER BALANCED FUND and THE BERGER MOUNTAIN LOGO are registered
trademarks of Berger LLC; BERGER INFORMATION TECHNOLOGY FUND, BERGER SELECT
FUND, BERGER MID CAP GROWTH FUND, BERGER MID CAP VALUE FUND and BERGER GROWTH
FUND are trademarks of Berger LLC; and other marks referred to herein are the
trademarks or registered trademarks of the respective owners thereof.
<PAGE>
CONTENTS
BERGER FUNDS-Registered Trademark- are a no-load family of mutual funds. A
mutual fund pools money from shareholders and invests in a portfolio of
securities. Each of the following sections introduces a Fund, its goal(s),
principal investment strategies and principal risks. They also contain expense
and performance information.
<TABLE>
<CAPTION>
<S> <C>
2 BERGER INFORMATION TECHNOLOGY FUND-TM- ~ INVESTOR SHARES
4 BERGER NEW GENERATION FUND-Registered Trademark- ~ INVESTOR SHARES
6 BERGER SELECT FUND-TM-
8 BERGER SMALL COMPANY GROWTH FUND-Registered Trademark- ~ INVESTOR SHARES
10 BERGER SMALL CAP VALUE FUND-Registered Trademark- ~ INVESTOR SHARES
12 BERGER MID CAP GROWTH FUND-TM-
14 BERGER MID CAP VALUE FUND-TM-
16 BERGER GROWTH FUND-TM-
18 BERGER/BIAM INTERNATIONAL FUND-Registered Trademark-
20 BERGER GROWTH AND INCOME FUND-Registered Trademark-
22 BERGER BALANCED FUND-Registered Trademark-
<CAPTION>
<S> <C>
24 INVESTMENT TECHNIQUES, SECURITIES AND ASSOCIATED RISKS
24 Risk and Investment Table
26 Risk and Investment Glossary
28 BUYING SHARES
29 SELLING (REDEEMING) SHARES
30 Exchanging Shares
30 Signature Guarantees/Special Documentation
31 Your Share Price
31 Other Information About Your Account
32 Distributions and Taxes
33 Tax-Sheltered Retirement Plans
34 ORGANIZATION OF THE BERGER FUNDS FAMILY
34 Investment Managers
36 12b-1 Arrangements
36 Special Fund Structures
37 FINANCIAL HIGHLIGHTS FOR THE BERGER FUNDS FAMILY
37 Berger Information Technology Fund ~ Investor Shares
39 Berger New Generation Fund ~ Investor Shares
39 Berger Select Fund
40 Berger Small Company Growth Fund ~ Investor Shares
40 Berger Small Cap Value Fund ~ Investor Shares
42 Berger Mid Cap Growth Fund
42 Berger Mid Cap Value Fund
43 Berger Growth Fund
43 Berger/BIAM International Fund
45 Berger Growth and Income Fund
45 Berger Balanced Fund
</TABLE>
<PAGE>
2
---------------------
BERGER INFORMATION
TECHNOLOGY FUND ~
INVESTOR SHARES -------------------------------------------------
- Ticker Symbol: BINVX
- --------------------------------------------------------------------------------
[GRAPHIC] THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES -
The Fund aims for capital appreciation. In pursuing its goal, the Fund invests
at least 80% of its assets in common stocks of companies in the information
technology group of industries, such as software, hardware, computer consulting
services, communications and Internet services and products. The Fund's
investment manager analyzes trends in information technology spending and
demand, then identifies companies it believes are best positioned to benefit
from those trends. The Fund generally invests the remainder of its assets in
information technology-related companies whose stock price the investment
manager believes is undervalued relative to their assets, earnings, cash flow or
business franchise.
The Fund's investment manager generally looks for companies:
- - That dominate their industries or a particular market segment
- - That have or are developing products or services that represent significant
technological advancements or improvements
- - That have strong fundamentals, strong management and strong product
positioning.
The Fund primarily invests in common stocks. The Fund is free to invest in
companies of any size market capitalization. The Fund's investment manager will
generally sell a security when it no longer meets the manager's investment
criteria or when it has met the manager's expectations for appreciation.
[GRAPHIC] PRINCIPAL RISKS - You may be interested in the Fund if you are
comfortable with above-average risk and intend to make a long-term investment
commitment. Like all managed funds, there is a risk that the investment
manager's strategy for managing the Fund may not achieve the desired results. In
addition, the price of common stock moves up and down in response to corporate
earnings and developments, economic and market conditions and unanticipated
events. As a result, the price of the Fund's investments may go down and you
could lose money on your investment.
Given the Fund's concentration in industries that are rapidly changing, its
share price may fluctuate more than that of funds invested in more stable
industries. Companies in the information technology industries may have narrow
product lines and their products and services are often subject to intense
competition and rapid obsolescence.
Because the Fund's investments are focused in the information technology sector,
the Fund is more susceptible to adverse events and market pressures impacting
the industries included in that sector.
See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.
[GRAPHIC] THE FUND'S PAST PERFORMANCE - The information below shows the Fund's
performance since it began operations through December 31, 1999. These returns
include reinvestment of all dividends and capital gains distributions and
reflect Fund expenses. As with all mutual funds, past performance does not
guarantee future results.
Year-by-year returns show how the Fund's performance has varied by illustrating
the differences for each full calendar year since the Fund began.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31(1)
[CHART]
<TABLE>
<CAPTION>
'98 '99
<S> <C>
62.72% 161.40%
<CAPTION>
<S> <C> <C>
BEST QUARTER: 12/31/99 97.35%
WORST QUARTER: 9/30/98 -9.95%
</TABLE>
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Wilshire 5000 Index
(Wilshire 5000). While the Fund does not seek to match the returns of the
Wilshire 5000, this index is a good indicator of general stock market
performance. You may not invest in the Wilshire 5000 and unlike the Fund, it
does not incur fees or charges.
<PAGE>
3
------------------
BERGER INFORMATION
TECHNOLOGY FUND ~
INVESTOR SHARES
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1999(1)
<TABLE>
<CAPTION>
LIFE OF THE FUND
1 YEAR (APRIL 8, 1997)
- -----------------------------------------------------
<S> <C> <C>
The Fund 161.40% 88.81%
Wilshire 5000 23.56% 27.99%
</TABLE>
(1) Returns for periods before July 2, 1999 do not include the .25% 12b-1 fee
which has been paid by the Investor Shares class since the inception of the
class in connection with the Fund's reorganization on that date. This would have
reduced the Fund's return.
[GRAPHIC] FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales
loads, but you do bear indirectly Annual Fund Operating Expenses, which vary
from year to year.
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES %
- ---------------------------------------------------------------
Redemption Fee (as a percentage of amount redeemed
or exchanged if shares are held less than 6 months) 1%
- ---------------------------------------------------------------
Exchange Fee* None
- ---------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)
- ---------------------------------------------------------------
Management fee(1) .85%
- ---------------------------------------------------------------
Distribution (12b-1) fee .25%
- ---------------------------------------------------------------
Other expenses(2) .86%
- ---------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.96%
- ---------------------------------------------------------------
</TABLE>
* The 1% redemption fee referenced in the table will be imposed on shares
exchanged if held less than 6 months, since an exchange is treated as a
redemption followed by a purchase.
(1) Effective October 1, 1999, the investment advisory fee charged to the Fund
was reduced to the following rates of average daily net assets; 0.85% of the
first $500 million; 0.80% of the next $500 million and 0.75% in excess of $1
billion. The amount shown reflects the restated advisory fees.
(2) "Other expenses" are based on estimated expenses of the Investor Shares
class and include transfer agency fees, shareholder report expenses,
registration fees and custodian fees. Effective October 1, 1999, Berger LLC
eliminated the administrative fee charged to the Fund. The fee amount shown
reflects the restated expenses.
UNDERSTANDING EXPENSES - Annual Fund operating expenses are paid by the Fund. As
a result, they reduce the Fund's return. Fund expenses include management fees,
12b-1 fees and administrative costs such as shareholder recordkeeping and
reports, custodian and pricing services and registration fees.
EXAMPLE COSTS
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
<TABLE>
<CAPTION>
YEARS $
- ----------------------------------------------------
<S> <C>
One 199
- ----------------------------------------------------
Three 615
- ----------------------------------------------------
Five 1,057
- ----------------------------------------------------
Ten 2,285
- ----------------------------------------------------
</TABLE>
<PAGE>
4
---------------------
BERGER NEW
GENERATION FUND ~
INVESTOR SHARES -------------------------------------------------
- Ticker Symbol: BENGX
- --------------------------------------------------------------------------------
[GRAPHIC] THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES - The Fund aims
for capital appreciation. In pursuing that goal, the Fund primarily invests in
the common stocks of companies with potential for significant earnings growth.
The Fund focuses on leading-edge companies with new ideas, technologies or
methods of doing business. Its investment manager seeks companies it believes
have the potential to change the direction or dynamics of the industries in
which they operate or significantly influence the way businesses or consumers
conduct their affairs.
The Fund's investment manager generally looks for companies:
- - In business sectors characterized by rapid change, regardless of the
company's size
- - With favorable long-term growth potential due to their new or innovative
products or services
- - With management and financial strength to fulfill their vision and grow their
business.
The Fund invests in common stocks, both domestic and foreign, and other
securities with equity features, such as convertible securities and preferred
stocks. Due to the Fund's focus on companies with the characteristics described
above, the Fund generally is weighted toward small market capitalization
companies, although it is free to invest in companies with larger market
capitalizations as well. The Fund's investment manager will generally sell a
security when it no longer meets the manager's investment criteria or when it
has met the manager's expectations for appreciation. The Fund's investment
manager may actively trade the portfolio in pursuit of the Fund's goal.
[GRAPHIC] PRINCIPAL RISKS - You may be interested in the Fund if you are
comfortable with above-average risk and intend to make a long-term investment
commitment. Like all managed funds, there is a risk that the investment
manager's strategy for managing the Fund may not achieve the desired results. In
addition, the price of common stock moves up and down in response to corporate
earnings and developments, economic and market conditions and anticipated
events. As a result, the price of the Fund's investments may go down and you
could lose money on your investment.
Given the Fund's weighting toward small companies in rapidly changing
industries, its share price may fluctuate more than that of funds invested in
larger companies or more stable industries. Small companies may pose greater
risk due to narrow product lines, limited financial resources, less depth in
management or a limited trading market for their stocks. In addition, products
and services in rapidly changing industries may be subject to intense
competition and rapid obsolescence and may require regulatory approvals prior to
their use. The Fund's investments are often focused in a small number of
business sectors. In addition, the Fund's active trading will cause the Fund to
have an increased portfolio turnover rate. Higher turnover rates may result in
higher brokerage costs to the Fund and in higher net taxable gains for you as an
investor.
See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.
[GRAPHIC] THE FUND'S PAST PERFORMANCE - The information below shows the Fund's
performance since it began operations through December 31, 1999. These returns
include reinvestment of all dividends and capital gains distributions and
reflect Fund expenses. As with all mutual funds, past performance does not
guarantee future results.
Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year since the Fund began.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
[CHART]
<TABLE>
<CAPTION>
'97 '98 '99
<S> <C> <C>
24.22% 23.00% 144.20%
<CAPTION>
<S> <C> <C>
BEST QUARTER: 12/31/99 52.95%
WORST QUARTER: 9/30/98 -18.43%
</TABLE>
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Standard & Poor's 500
Index (S&P 500). While the Fund does not seek to match the returns of the S&P
500, this index is a good indicator of general stock market performance. You may
not invest in the S&P 500 and unlike the Fund, it does not incur fees or
charges.
<PAGE>
5
------------------
BERGER
NEW GENERATION ~
INVESTOR SHARES
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
LIFE OF THE FUND
1 YEAR (MARCH 29, 1996)
- --------------------------------------------------------------------------------
<S> <C> <C>
The Fund 144.20% 47.50%
- --------------------------------------------------------------------------------
S&P 500 21.03% 26.52%
- --------------------------------------------------------------------------------
</TABLE>
[GRAPHIC] FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales
loads, redemption or exchange fees, but you do bear indirectly Annual Fund
Operating Expenses, which vary from year to year.
<TABLE>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- --------------------------------------------------------------------------------
<S> <C>
Management fee(1) .85
- --------------------------------------------------------------------------------
Distribution (12b-1) fee .25
- --------------------------------------------------------------------------------
Other expenses(2) .38
- --------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.48
- --------------------------------------------------------------------------------
</TABLE>
(1) Effective October 1, 1999, the investment advisory fee charged to the Fund
was reduced to the following rates of average daily net assets; 0.85% of the
first $500 million; 0.80% of the next $500 million and 0.75% in excess of $1
billion. The amount shown reflects the restated advisory fees.
(2) Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown reflects the restated expenses.
UNDERSTANDING EXPENSES - Annual Fund operating expenses are paid by the Fund. As
a result, they reduce the Fund's return. Fund expenses include management fees,
12b-1 fees and administrative costs such as shareholder recordkeeping and
reports, custodian and pricing services and registration fees.
EXAMPLE COSTS
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
<TABLE>
<CAPTION>
YEARS $
- --------------------------------------------------------------------------------
<S> <C>
One 151
- --------------------------------------------------------------------------------
Three 468
- --------------------------------------------------------------------------------
Five 808
- --------------------------------------------------------------------------------
Ten 1,768
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
6
---------------------
BERGER
SELECT FUND
-------------------------------------------------
- Ticker Symbol: BESLX
- --------------------------------------------------------------------------------
[GRAPHIC] THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES - The Fund aims
for capital appreciation. In pursuing that goal, the Fund primarily invests in
the common stocks of companies with superior potential for strong earnings
growth.
This nondiversified Fund normally invests in a core portfolio of 20-30 common
stocks selected by the Fund's three co-portfolio managers. The stock selection
focuses on companies of any size whose growth potential is not yet fully
reflected in the company's stock price.
The Fund's investment manager generally looks for companies with:
- - Solid fundamental growth opportunities and that are market share leaders in
their industries or have the potential to develop a large market for their
products and services
- - Strong, capable management teams with clearly defined strategies for revenue
and earnings growth
- - A catalyst for positive earnings developments such as evolving product
cycles, special situations or changing economic conditions.
The Fund's investment manager will generally sell a security when it no longer
meets the manager's investment criteria or when it has met the manager's
expectations for appreciation. The Fund's investment manager may actively trade
the portfolio in pursuit of the Fund's goal. Due to this and the Fund's
relatively small number of holdings, the annual portfolio turnover rate may be
higher than other mutual funds.
[GRAPHIC] PRINCIPAL RISKS - You may be interested in the Fund if you are
comfortable with above-average risk and intend to make a long-term investment
commitment. Like all managed funds, there is a risk that the investment
manager's strategy for managing the Fund may not achieve the desired results. In
addition, the price of common stock moves up and down in response to corporate
earnings and developments, economic and market conditions and anticipated
events. As a result, the price of the Fund's investments may go down and you
could lose money on your investment.
The Fund's share price may fluctuate more than the market in general and most
equity funds due to its ability as a nondiversified fund to take larger
positions in a smaller number of companies. As a result, the gains or losses on
a single stock will have a greater impact on the Fund's share price. The Fund's
investments are often focused in a small number of business sectors. In
addition, the Fund's active trading will cause the Fund to have an increased
portfolio turnover rate. Higher turnover rates may result in higher brokerage
costs to the Fund and in higher net taxable gains for you as an investor.
See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.
[GRAPHIC] THE FUND'S PAST PERFORMANCE - The information below shows the
Fund's performance since it began operations through December 31, 1999. These
returns include reinvestment of all dividends and capital gains distributions
and reflects Fund expenses. As with all mutual funds, past performance does
not guarantee future results.
Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year since the Fund began.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
[CHART]
<TABLE>
<CAPTION>
'98 '99
<S> <C> <C>
72.26% 81.68%
<CAPTION>
<S> <C> <C>
BEST QUARTER: 12/31/99 54.19%
WORST QUARTER: 9/30/98 -6.75%
</TABLE>
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Standard & Poor's 500
Index (S&P 500). While the Fund does not seek to match the returns of the S&P
500, this index is a good indicator of general stock market performance. You may
not invest in the S&P 500 and unlike the Fund, it does not incur fees or
charges.
<PAGE>
7
------------------
BERGER
SELECT FUND
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
LIFE OF THE FUND
1 YEAR (DECEMBER 31, 1997)
- -----------------------------------------------------------------
<S> <C> <C>
The Fund 81.68% 76.90%
- -----------------------------------------------------------------
S&P 500 21.03% 24.76%
- -----------------------------------------------------------------
</TABLE>
[GRAPHIC] FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales
loads, redemption or exchange fees, but you do bear indirectly Annual Fund
Operating Expenses, which vary from year to year.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- --------------------------------------------------------------------------------
<S> <C>
Management fee(1) .75%
- --------------------------------------------------------------------------------
Distribution (12b-1) fee .25%
- --------------------------------------------------------------------------------
Other expenses(2) .28%
- --------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.28%
- --------------------------------------------------------------------------------
</TABLE>
(1) Effective October 1, 1999, the investment advisory fee charged to the Fund
was reduced to the following rates of average daily net assets; 0.75% of the
first $500 million; 0.70% of the next $500 million and 0.65% in excess of $1
billion. The amount shown reflects the restated advisory fees.
(2) Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown reflects the restated expenses.
UNDERSTANDING EXPENSES - Annual Fund operating expenses are paid by the Fund. As
a result, they reduce the Fund's return. Fund expenses include management fees,
12b-1 fees and administrative costs such as shareholder recordkeeping and
reports, custodian and pricing services and registration fees.
EXAMPLE COSTS
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
<TABLE>
<CAPTION>
YEARS $
- -------------------------------------------------------------------------------
<S> <C>
One 130
- -------------------------------------------------------------------------------
Three 406
- -------------------------------------------------------------------------------
Five 702
- -------------------------------------------------------------------------------
Ten 1,545
- -------------------------------------------------------------------------------
</TABLE>
<PAGE>
8
---------------------
BERGER SMALL COMPANY
GROWTH FUND ~
INVESTOR SHARES -------------------------------------------------
- Ticker Symbol: BESCK
- --------------------------------------------------------------------------------
[GRAPHIC] THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES - The Fund aims
for capital appreciation. In pursuing that goal, the Fund primarily invests in
the common stocks of small companies with the potential for rapid earnings
growth.
The Fund's stock selection focuses on companies that either occupy a dominant
position in an emerging industry or have a growing market share in a larger,
fragmented industry.
The Fund's investment manager generally looks for companies with:
- - A proprietary technology, product or service that may enable the company to
be a market share leader
- - Strong entrepreneurial management with clearly defined strategies for growth
- - Relatively strong balance sheets.
Under normal circumstances, the Fund invests at least 65% of its assets in
equity securities of companies whose market capitalization, at the time of
initial purchase, is less than the 12-month average of the maximum market
capitalization for companies included in the Russell 2000 Index (Russell 2000).
This average is updated monthly. The Fund's investment manager will generally
sell a security when it no longer meets the manager's investment criteria or
when it has met the manager's expectations for appreciation. The Fund's
investment manager may actively trade the portfolio in pursuit of the Fund's
goal.
[GRAPHIC] PRINCIPAL RISKS - You may be interested in the Fund if you are
comfortable with above-average risk and intend to make a long-term investment
commitment. Like all managed funds, there is a risk that the investment
manager's strategy for managing the Fund may not achieve the desired results. In
addition, the price of common stock moves up and down in response to corporate
earnings and developments, economic and market conditions and anticipated
events. As a result, the price of the Fund's investments may go down and you
could lose money on your investment.
The Fund's share price may fluctuate more than that of funds primarily invested
in stocks of mid-sized and large companies. Small company securities may
underperform as compared to the securities of larger companies. They may also
pose greater risk due to narrow product lines, limited financial resources, less
depth in management or a limited trading market for their stocks. The Fund's
investments are often focused in a small number of business sectors. In
addition, the Fund's active trading will cause the fund to have an increased
portfolio turnover rate. Higher turnover rates may result in higher brokerage
costs to the fund and in higher net taxable gains for you as an investor.
See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.
[GRAPHIC] THE FUND'S PAST PERFORMANCE - The information below shows the Fund's
performance since it began operations through December 31, 1999. These returns
include reinvestment of all dividends and capital gains distributions and
reflect Fund expenses. As with all mutual funds, past performance does not
guarantee future results.
Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year since the Fund began.
[GRAPHIC] YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
[CHART]
<TABLE>
<CAPTION>
'94 '95 '96 '97 '98 '99
<S> <C> <C> <C> <C> <C> <C>
13.73% 33.80% 16.77% 16.16% 3.17% 104.39%
<CAPTION>
<S> <C> <C>
BEST QUARTER: 12/31/99 58.97%
WORST QUARTER: 9/30/98 -29.22%
</TABLE>
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Russell 2000. While the
Fund does not seek to match the returns of the Russell 2000, this index is a
good indicator of small company stock market performance. You may not invest in
the Russell 2000 and unlike the Fund, it does not incur fees or charges.
<PAGE>
9
---------------
BERGER
SMALL COMPANY
GROWTH FUND ~
INVESTOR SHARES
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
LIFE OF THE FUND
1 YEAR 5 YEARS (DECEMBER 30, 1993)
- ----------------------------------------------------------
<S> <C> <C> <C>
The Fund 104.39% 30.79% 27.78%
- ----------------------------------------------------------
Russell 2000 21.26% 16.69% 13.38%
- ----------------------------------------------------------
</TABLE>
[GRAPHIC] FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales
loads, redemption or exchange fees, but you do bear indirectly Annual Fund
Operating Expenses, which vary from year to year.
<TABLE>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- -------------------------------------------------------------------------------
<S> <C>
Management fee(1) .84
- -------------------------------------------------------------------------------
Distribution (12b-1) fee .25
- -------------------------------------------------------------------------------
Other expenses(2) .44
- -------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.53
- -------------------------------------------------------------------------------
</TABLE>
(1) Effective October 1, 1999, the investment advisory fee charged to the Fund
was reduced to the following rates of average daily net assets; 0.85% of the
first $500 million; 0.80% of the next $500 million and 0.75% in excess of $1
billion. The amount shown reflects the restated advisory fees.
(2) Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown reflects the restated expenses.
UNDERSTANDING EXPENSES - Annual Fund operating expenses are paid by the Fund. As
a result, they reduce the Fund's return. Fund expenses include management fees,
12b-1 fees and administrative costs such as shareholder recordkeeping and
reports, custodian and pricing services and registration fees.
EXAMPLE COSTS
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
<TABLE>
<CAPTION>
YEARS $
- -------------------------------------------------------------------------------
<S> <C>
One 156
- -------------------------------------------------------------------------------
Three 483
- -------------------------------------------------------------------------------
Five 834
- -------------------------------------------------------------------------------
Ten 1,824
- -------------------------------------------------------------------------------
</TABLE>
<PAGE>
10
---------------------
BERGER SMALL CAP
VALUE FUND ~
INVESTOR SHARES -------------------------------------------------
- Ticker Symbol: BSCVX
- --------------------------------------------------------------------------------
[GRAPHIC]
THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES The Fund aims for capital
appreciation. In pursuing that goal, the Fund primarily invests in the common
stocks of small companies whose stock prices are believed to be undervalued.
The Fund's securities selection focuses on companies that are out of favor with
markets or have not yet been discovered by the broader investment community.
The Fund's investment manager generally looks for companies with:
- - A low price relative to their assets, earnings, cash flow or business
franchise
- - Products and services that give them a competitive advantage
- - Quality balance sheets and strong management.
The investment manager's philosophy is to weigh a security's downside risk
before considering its upside potential, which may help provide an element of
capital preservation. Under normal circumstances, the Fund invests at least 65%
of its assets in equity securities of small companies whose market
capitalization, at the time of initial purchase, is less than the 12-month
average of the maximum market capitalization for companies included in the
Russell 2000 Index (Russell 2000). This average is updated monthly. The Fund's
investment manager will generally sell a security when it no longer meets the
manager's investment criteria or when it has met the manager's expectations for
appreciation.
[GRAPHIC] PRINCIPAL RISKS - You may be interested in the Fund if you are
comfortable with above-average risk and intend to make a long-term investment
commitment. Like all managed funds, there is a risk that the investment
manager's strategy for managing the Fund may not achieve the desired results. In
addition, the price of common stock moves up and down in response to corporate
earnings and developments, economic and market conditions and anticipated
events. As a result, the price of the Fund's investments may go down and you
could lose money on your investment.
The Fund's share price may fluctuate more than that of funds primarily invested
in stocks of mid-sized and large companies. Small company securities may
underperform as compared to the securities of larger companies. They may also
pose greater risk due to narrow product lines, limited financial resources, less
depth in management or a limited trading market for their stocks. The Fund's
investments are often focused in a small number of business sectors. In
addition, the Fund may invest in certain securities with unique risks, such as
special situations.
See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.
[GRAPHIC] THE FUND'S PAST PERFORMANCE - The information below shows the Fund's
performance for the ten-year period through December 31, 1999. These returns
include reinvestment of all dividends and capital gains distributions and
reflect Fund expenses. As with all mutual funds, past performance does not
guarantee future results.
Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year for the past ten years.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31(1)
[GRAPH]
<TABLE>
<CAPTION>
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-21.92% 24.97% 19.61% 16.27% 6.70% 26.06% 25.60 36.51% 1.43% 14.31%
</TABLE>
<TABLE>
<S> <C> <C>
BEST QUARTER: 6/30/99 22.00%
WORST QUARTER: 9/30/90 -17.29%
</TABLE>
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Russell 2000. While the
Fund does not seek to match the returns of the Russell 2000, this index is a
good indicator of small company stock market performance. You may not invest in
the Russell 2000 and unlike the Fund, it does not incur fees or charges.
<PAGE>
11
-------------------
BERGER SMALL CAP
VALUE FUND -
INVESTOR SHARES
INVESTOR SHARES
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1999(1)
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
The Fund 14.31% 20.17% 13.76%
- --------------------------------------------------------------------------------
Russell 2000 21.26% 16.69% 13.40%
- --------------------------------------------------------------------------------
</TABLE>
(1) Returns for periods before February 14, 1997, do not include the .25% 12b-1
fee which has been paid by the Investor Shares class since the Fund adopted
share classes on that date. This would have reduced the Fund's return.
[GRAPHIC] FUND EXPENSES - As a shareholder in the Fund, you do not pay any
sales loads, redemption or exchange fees, but you do bear indirectly Annual
Fund Operating Expenses, which vary from year to year.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- -------------------------------------------------------------------------------
<S> <C>
Management fee(1) .85
- -------------------------------------------------------------------------------
Distribution (12b-1) fee .25
Other expenses(2) .21
- -------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.31
- -------------------------------------------------------------------------------
</TABLE>
(1) Effective October 1, 1999, the investment advisory fee charged to the Fund
was reduced to the following rates of average daily net assets; 0.85% of the
first $500 million; 0.80% of the next $500 million and 0.75% in excess of $1
billion. The amount shown reflects the restated advisory fees.
(2) Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown reflects the restated expenses.
UNDERSTANDING EXPENSES - Annual Fund operating expenses are paid by the Fund. As
a result, they reduce the Fund's return. Fund expenses include management fees,
12b-1 fees and administrative costs such as shareholder recordkeeping and
reports, custodian and pricing services and registration fees.
EXAMPLE COSTS
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
<TABLE>
<CAPTION>
YEARS $
- -------------------------------------------------------------------------------
<S> <C>
One 133
- -------------------------------------------------------------------------------
Three 415
- -------------------------------------------------------------------------------
Five 718
- -------------------------------------------------------------------------------
Ten 1,579
- -------------------------------------------------------------------------------
</TABLE>
<PAGE>
12
---------------------
BERGER
MID CAP GROWTH
FUND -------------------------------------------------
- Ticker Symbol: BEMGX
- --------------------------------------------------------------------------------
[GRAPHIC] THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES - The Fund aims
for capital appreciation. In pursuing that goal, the Fund primarily invests in
the common stocks of mid-sized companies with the potential for strong earnings
growth.
Stock selection focuses on companies that commit their resources to innovative
products or services for unique, changing or rapidly growing markets.
The Fund's investment manager generally looks for companies with:
- - Strong revenue and earnings growth fundamentals and dominant market share in
their industry or business sector
- - Strong management teams with established organizational structures
- - Solid balance sheets and the ability to efficiently finance their growth
through sufficient resources and access to capital
Under normal circumstances, the Fund invests at least 65% of its assets in
equity securities of companies whose market capitalization falls, at the time of
initial purchase, within a range of $1 billion to the 12-month average of the
maximum market capitalization for companies included in the Standard & Poor's
Mid Cap 400 Index (S&P 400). This average is updated monthly. The Fund's
investment manager will generally sell a security when it no longer meets the
manager's investment criteria or when it has met the manager's expectations for
appreciation. The Fund's investment manager may actively trade the portfolio in
pursuit of the Fund's goal.
[GRAPHIC] PRINCIPAL RISKS - You may be interested in the Fund if you are
comfortable with above-average risk and intend to make a long-term investment
commitment. Like all managed funds, there is a risk that the investment
manager's strategy for managing the Fund may not achieve the desired results. In
addition, the price of common stock moves up and down in response to corporate
earnings and developments, economic and market conditions and anticipated
events. As a result, the price of the Fund's investments may go down and you
could lose money on your investment.
The Fund's share price may fluctuate more than that of funds primarily invested
in stocks of large companies. Mid-sized companies may pose greater risk due to
narrow product lines, limited financial resources, less depth in management or a
limited trading market for their stocks. The Fund's investments are often
focused in a small number of business sectors. In addition, the Fund's active
trading will cause the Fund to have an increased portfolio turnover rate. Higher
turnover rates may result in higher brokerage costs to the Fund and in higher
net taxable gains for you as an investor.
See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.
[GRAPHIC] THE FUND'S PAST PERFORMANCE - The information below shows the
Fund's performance since it began operations through December 31, 1999. These
returns include reinvestment of all dividends and capital gains distributions
and reflects Fund expenses. As with all mutual funds, past performance does
not guarantee future results.
Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year since the Fund began.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
[GRAPH]
<TABLE>
<CAPTION>
'98 '99
<S> <C>
54.38% 151.46%
<CAPTION>
<S> <C> <C>
BEST QUARTER: 12/31/99 75.17%
WORST QUARTER: 9/30/98 -17.76%
</TABLE>
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the S&P 400. While the Fund
does not seek to match the returns of the S&P 400, this index is a good
indicator of general stock market performance for mid-sized companies. You may
not invest in the S&P 400 and unlike the Fund, it does not incur fees or
charges.
<PAGE>
13
---------------
BERGER
MID CAP GROWTH
FUND
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
LIFE OF THE FUND
1 YEAR (DECEMBER 31, 1997)
- ------------------------------------------------------------
<S> <C> <C>
The Fund 151.46% 97.03%
- ------------------------------------------------------------
S&P 400 14.72% 16.90%
- ------------------------------------------------------------
</TABLE>
[GRAPHIC] FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales
loads, redemption or exchange fees, but you do bear indirectly Annual Fund
Operating Expenses, which vary from year to year.
<TABLE>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- -------------------------------------------------------------------------------
<S> <C>
Management fee(1) .75
- -------------------------------------------------------------------------------
Distribution (12b-1) fee .25
- -------------------------------------------------------------------------------
Other expenses(2) .77
- -------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.77
- -------------------------------------------------------------------------------
</TABLE>
(1) Effective October 1, 1999, the investment advisory fee charged to the Fund
was reduced to the following rates of average daily net assets; 0.75% of the
first $500 million; 0.70% of the next $500 million and 0.65% in excess of $1
billion. The amount shown reflects the restated advisory fees.
(2) Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown reflects the restated expenses.
UNDERSTANDING EXPENSES - Annual Fund operating expenses are paid by the Fund. As
a result, they reduce the Fund's return. Fund expenses include management fees,
12b-1 fees and administrative costs such as shareholder recordkeeping and
reports, custodian and pricing services and registration fees.
EXAMPLE COSTS
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
<TABLE>
<CAPTION>
YEARS $
- -------------------------------------------------------------------------------
<S> <C>
One 180
- -------------------------------------------------------------------------------
Three 557
- -------------------------------------------------------------------------------
Five 959
- -------------------------------------------------------------------------------
Ten 2,084
- -------------------------------------------------------------------------------
</TABLE>
<PAGE>
14
---------------------
BERGER
MID CAP
VALUE FUND -------------------------------------------------
- Ticker Symbol: BEMVX
- --------------------------------------------------------------------------------
[GRAPHIC] THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES - The Fund aims
for capital appreciation. In pursuing that goal, the Fund primarily invests in
the common stocks of mid-sized companies whose stock prices are believed to be
undervalued.
Investment selection focuses on companies that have fallen out of favor with the
market or are temporarily misunderstood by the investment community. To a lesser
degree, the Fund also invests in companies that demonstrate special situations
or turnarounds, meaning companies that have experienced significant business
problems but are believed to have favorable prospects for recovery.
The Fund's investment manager generally looks for companies with:
- - a low price relative to their assets, earnings, cash flow or business
franchise
- - Products and services that give them a competitive advantage
- - Quality balance sheets and strong management.
The investment manager's philosophy is to weigh a security's downside risk
before considering its upside potential, which may help provide an element of
capital preservation. Under normal circumstances, the Fund invests at least 65%
of its assets in equity securities of mid-sized companies whose market
capitalization falls, at the time of initial purchase, within a range of $1
billion to the 12-month average of the maximum market capitalization for
companies included in the Standard & Poor's Mid Cap 400 Index (S&P 400). This
average is updated monthly. The Fund's investment manager will generally sell a
security when it no longer meets the manager's investment criteria or when it
has met the manager's expectations for appreciation. The Fund's investment
manager may actively trade the portfolio in pursuit of the Fund's goal.
[GRAPHIC] PRINCIPAL RISKS - You may be interested in the Fund if you are
comfortable with above-average risk and intend to make a long-term investment
commitment. Like all managed funds, there is a risk that the investment
manager's strategy for managing the Fund may not achieve the desired results. In
addition, the price of common stock moves up and down in response to corporate
earnings and developments, economic and market conditions and anticipated
events. As a result, the price of the Fund's investments may go down and you
could lose money on your investment.
The Fund's share price may fluctuate more than that of funds primarily invested
in large companies. Mid-sized companies may pose greater risk due to narrow
product lines, limited financial resources, less depth in management or a
limited trading market for their stocks. The Fund's investments are often
focused in a small number of business sectors. In addition, the Fund may invest
in certain securities with unique risks, such as special situations. The Fund's
active trading will cause the Fund to have an increased portfolio turnover rate.
Higher turnover rates may result in higher brokerage costs to the Fund and in
higher net taxable gains for you as an investor.
See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.
[GRAPHIC] THE FUND'S PAST PERFORMANCE - The information below shows the Fund's
performance since it began operations through December 31, 1999. These returns
include reinvestment of all dividends and capital gains distributions and
reflect Fund expenses. As with all mutual funds, past performance does not
guarantee future results.
Total return shows you the Fund's performance for the one full calendar year
since the Fund began.
TOTAL RETURN FROM DECEMBER 31, 1998
THROUGH DECEMBER 31, 1999
[CHART]
<TABLE>
<CAPTION>
'99
<S><C>
21.56%
<CAPTION>
<S> <C> <C>
BEST QUARTER: 6/30/99 20.79%
WORST QUARTER: 9/30/99 -9.72%
</TABLE>
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the S&P 400. While the Fund
does not seek to match the returns of the S&P 400, this index is a good
indicator of general stock market performance for mid-sized companies. You may
not invest in the S&P 400 and unlike the Fund, it does not incur fees or
charges.
<PAGE>
15
--------------
BERGER
MID CAP
VALUE FUND
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
LIFE OF THE FUND
1 YEAR (AUGUST 12, 1998)
- ---------------------------------------------------------
<S> <C> <C>
The Fund 21.56% 26.77%
- ---------------------------------------------------------
S&P 400 14.72% 21.40%
- ---------------------------------------------------------
</TABLE>
[GRAPHIC] FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales
loads, redemption or exchange fees, but you do bear indirectly Annual Fund
Operating Expenses, which vary from year to year.
<TABLE>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- -------------------------------------------------------------------------------
<S> <C>
Management fee(1) .75
- -------------------------------------------------------------------------------
Distribution (12b-1) fee .25
- -------------------------------------------------------------------------------
Other expenses(2) .61
- -------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.61
- -------------------------------------------------------------------------------
</TABLE>
(1) Effective October 1, 1999, the investment advisory fee charged to the Fund
was reduced to the following rates of average daily net assets; 0.75% of the
first $500 million; 0.70% of the next $500 million and 0.65% in excess of $1
billion. The amount shown reflects the restated advisory fees.
(2) Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown reflects the restated expenses.
UNDERSTANDING EXPENSES - Annual Fund operating expenses are paid by the Fund.
As a result, they reduce the Fund's return. Fund expenses include management
fees, 12b-1 fees and administrative costs such as shareholder recordkeeping
and reports, custodian and pricing services and registration fees.
EXAMPLE COSTS
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
<TABLE>
<CAPTION>
YEARS $
- -------------------------------------------------------------------------------
<S> <C>
One 164
- -------------------------------------------------------------------------------
Three 508
- -------------------------------------------------------------------------------
Five 876
- -------------------------------------------------------------------------------
Ten 1,911
- -------------------------------------------------------------------------------
</TABLE>
<PAGE>
16
---------------------
BERGER
GROWTH
FUND -------------------------------------------------
- Ticker Symbol: BEONX
- --------------------------------------------------------------------------------
[icon: profile of head with mountain peak in background]
THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES - The Fund aims for
long-term capital appreciation. In pursuing that goal, the Fund primarily
invests in the common stocks of established companies with the potential for
growth.
Stock selection by the Fund's investment manager focuses on companies believed
to have strong growth potential regardless of the company's size.
The Fund's investment manager generally looks for companies with:
- - Opportunities for rapid revenue and earnings growth
- - Large market potential for their products and services
- - Strong, capable management teams that have the vision necessary to increase
their market share in growing industries.
The Fund's investment manager will generally sell a security when it no longer
meets the manager's investment criteria or when it has met the manager's
expectations for appreciation. The Fund's investment manager may actively trade
the portfolio in pursuit of the Fund's goal.
[icon - left facing profile of head with lightning bolt; right facing profile of
head with sunshine]
PRINCIPAL RISKS - You may be interested in the Fund if you are comfortable with
the risks of equity investing and intend to make a long-term investment
commitment. Like all managed funds, there is a risk that the investment
manager's strategy for managing the Fund may not achieve the desired results. In
addition, the price of common stock moves up and down in response to corporate
earnings and developments, economic and market conditions and anticipated
events. As a result, the price of the Fund's investments may go down and you
could lose money on your investment.
The Fund's investments may focus in a small number of business sectors. In
addition, the Fund's active trading will cause the Fund to have an increased
portfolio turnover rate. Higher turnover rates may result in higher brokerage
costs to the Fund and in higher net taxable gains for you as an investor.
See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.
[icon - profile of head with scrolled paper in background]
THE FUND'S PAST PERFORMANCE - The information below shows the Fund's
performance since it began operations through December 31, 1999. These
returns include reinvestment of all dividends and capital gain distributions
and reflect Fund expenses. As with all mutual funds, past performance does
not guarantee future results.
Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year for the past ten
years(1).
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
[GRAPH]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
-5.59% 88.81% 8.53% 21.20% -6.66% 21.34% 13.73% 13.57% 16.23% 52.28%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
BEST QUARTER: 12/31/99 42.88%
WORST QUARTER: 9/30/90 -20.60%
</TABLE>
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Standard & Poor's 500
Index (S&P 500). While the Fund does not seek to match the returns of the S&P
500, this index is a good indicator of general stock market performance. You may
not invest in the S&P 500 and unlike the Fund, it does not incur fees or
charges.
<PAGE>
17
-----------
BERGER
GROWTH FUND
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS LIFE OF THE FUND
(SEPTEMBER 30, 1974)
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
The Fund 52.28% 22.64% 19.76% 16.35%
S&P 500 21.03% 28.54% 18.19% 17.48%
</TABLE>
[icon - two coins]
FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales loads,
redemption or exchange fees, but you do bear indirectly Annual Fund Operating
Expenses, which vary from year to year.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- ----------------------------------------------------------------
<S> <C>
Management fee(1) .70
Distribution (12b-1) fee .25
Other expenses(2) .35
TOTAL ANNUAL FUND OPERATING EXPENSES 1.30
</TABLE>
1. Effective October 1, 1999, the investment advisory fee charged to the Fund
was reduced to the following rates of average daily net assets; 0.75% of the
first $500 million; 0.70% of the next $500 million and 0.65% in excess of $1
billion. The amount shown reflects the restated advisory fees.
2. Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown reflects the restated expenses.
UNDERSTANDING EXPENSES - Annual Fund operating expenses are paid by the Fund. As
a result, they reduce the Fund's return. Fund expenses include management fees,
12b-1 fees and administrative costs such as shareholder recordkeeping and
reports, custodian and pricing services and registration fees.
EXAMPLE COSTS
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
<TABLE>
<CAPTION>
YEARS $
- -----------------------------------------------------------
<S> <C>
One 132
Three 412
Five 713
Ten 1,568
</TABLE>
<PAGE>
18
---------------------
BERGER/BIAM
INTERNATIONAL
FUND -------------------------------------------------
- Ticker Symbol: BBINX
- --------------------------------------------------------------------------------
Ticker Symbol: BBINX
[icon - profile of head with mountain peak in background]
THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES - The Fund aims for
long-term capital appreciation. In pursuing that goal, the Fund primarily
invests in a portfolio consisting of common stocks of well-established foreign
companies.
The portfolio's investment manager first identifies economic and business themes
that it believes provide a favorable framework for selecting stocks. Using
fundamental analysis, the investment manager then selects individual companies
best positioned to take advantage of opportunities presented by these themes.
The portfolio's investment manager generally looks for companies with:
- - Securities that are fundamentally undervalued relative to their long-term
prospective earnings growth rates, their historic valuation levels and their
competitors
- - Business operations predominantly in well-regulated and more stable foreign
markets
- - Substantial size and liquidity, strong balance sheets, proven management and
diversified earnings.
The Fund invests all of its assets in the Berger/BIAM International Portfolio
(Portfolio), which has the same goals and policies as the Fund. The Portfolio
invests primarily in common stocks with 65% of its total assets in securities of
companies located in at least five different countries outside the United
States. Recently, the Portfolio has been weighted toward countries in Western
Europe, Australia and the Far East. However, it may also invest in other foreign
countries, including developing countries. A majority of the Portfolio's assets
are invested in mid-sized to large capitalization companies. The Portfolio's
investment manager will generally sell a security when it no longer meets the
manager's investment criteria or when it has met the manager's expectations for
appreciation.
See "Organization of the Berger Funds Family--Special Fund
Structures--Master/Feeder" later in this prospectus for more information on
the Fund's investment in the Portfolio.
[icon - left facing profile of head with lightning bolt; right facing profile of
head with sunshine]
PRINCIPAL RISKS - You may be interested in the Fund if you are comfortable with
the risks of international investing and intend to make a long-term investment
commitment. Like all managed funds, there is a risk that the investment
manager's strategy for managing the Fund may not achieve the desired results. In
addition, the price of common stock moves up and down in response to corporate
earnings and developments, economic and market conditions and anticipated
events. As a result, the price of the Fund's investments may go down and you
could lose money on your investment. There are additional risks with investing
in foreign countries, especially in developing countries--specifically,
economic, currency, information, political and transaction risks. As a result of
these additional risks, the Fund may be more volatile than a domestic stock
fund. In addition, foreign stocks may not move in concert with the U.S. markets.
The Fund's investments are often focused in a small number of business sectors.
In addition, the Fund may invest in certain securities with unique risks, such
as forward foreign currency contracts.
See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.
[icon - profile of head with scrolled paper in background]
THE FUND'S PAST PERFORMANCE - The information below shows the Fund's performance
since it began operations(1) through December 31, 1999. These returns include
reinvestment of all dividends and capital gains and reflect Fund expenses. As
with all mutual funds, past performance does not guarantee future results.
Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year for the past ten
years.(1)
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31(1)
[GRAPH]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
-4.11% 13.18% 10.21% 36.38% -7.80% 18.78% 18.51% 2.90% 14.92% 30.90%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
BEST QUARTER: 12/31/99 20.54%
WORST QUARTER: 9/30/98 -16.79%
</TABLE>
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Morgan Stanley Capital
International Europe, Australasia and the Far East Index (EAFE Index). While the
Fund does not seek to match the returns of the EAFE Index, this index is a good
indicator of foreign stock markets. You may not invest in the EAFE Index and
unlike the Fund, it does not incur fees or charges.
<PAGE>
19
-------------
BERGER/BIAM
INTERNATIONAL
FUND
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1999(1)
<TABLE>
<CAPTION>
LIFE OF THE FUND
1 YEAR 5 YEARS 10 YEARS (JULY 31, 1989)
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Fund 30.90% 16.86% 12.60% 14.21%
EAFE Index 27.30% 13.15% 7.33% 7.48%
</TABLE>
1. Predecessor Performance: performance figures covering periods prior to
October 11, 1996, include the performance of a pool of assets advised by the
Portfolio's investment manager for periods before the Portfolio began
operations. This performance has been adjusted to reflect the increased expenses
expected in operating the Fund, net of fee waivers. The asset pool was not
registered with the SEC and was not subject to the investment restrictions
imposed on mutual funds. If the pool had been registered, its performance might
have been adversely affected.
[icon - two coins]
FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales loads,
redemption or exchange fees, but you do bear indirectly Annual Fund Operating
Expenses, which vary from year to year.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES(1)
(deducted directly from the Fund) %
- --------------------------------------------------------------
<S> <C>
Management fee .90
Distribution (12b-1) fee .25
Other expenses .62
TOTAL ANNUAL FUND OPERATING EXPENSES 1 .77
FEE WAIVER(2) (.01)
NET EXPENSES 1.76
</TABLE>
1. Annual fund operating expenses consist of the Fund's expenses plus the Fund's
share of the expenses of the Portfolio.
2. Under a written contract, the Portfolio's investment advisor waives its fee
to the extent that, at any time during the life of the Portfolio, the
Portfolio's annual operating expenses exceed 1.00%. The contract may not be
terminated or amended except by a vote of the Portfolio's Board of Trustees.
UNDERSTANDING EXPENSES - Annual Fund operating expenses are borne by the Fund.
As a result, they reduce the Fund's return. Fund expenses include the Fund's
share of the Portfolio's expenses, 12b-1 fees, an administrative fee and
registration fees.
EXAMPLE COSTS
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
<TABLE>
<CAPTION>
YEARS $
- ----------------------------------------------------------------
<S> <C>
One 179
Three 554
Five 954
Ten 2,073
</TABLE>
<PAGE>
20
---------------------
BERGER
GROWTH AND
INCOME FUND -------------------------------------------------
- Ticker Symbol: BEOOX
- --------------------------------------------------------------------------------
[icon - profile of head with mountain peak in background]
THE FUND'S GOALS AND PRINCIPAL INVESTMENT STRATEGIES - The Fund aims for capital
appreciation and has a secondary goal of investing in securities that produce
current income for the portfolio. In pursuing these goals, the Fund primarily
invests in the securities of well-established, growing companies. The Fund's
secondary goal may be changed at any time without a shareholder vote.
Security selection focuses on the common stocks, convertible securities and
preferred stocks of companies that have demonstrated a pattern of growth and
stability and are also expected to provide current income.
The Fund's investment manager generally looks for companies with:
- - Opportunities for good revenue and earnings growth
- - Strong market positions for their products and services
- - Strong, seasoned management teams with well-established and clearly defined
strategies.
Common stock of companies with mid-sized to large market capitalizations usually
constitutes a majority of the Fund's investments. The Fund primarily invests in
income producing securities to provide a level of protection from price
volatility that may not be present when income is not a consideration. The Fund
may invest up to 20% of its assets in convertible securities rated below
investment grade (BB or lower by S&P, Ba or lower by Moody's). The Fund's
investment manager will generally sell a security when it no longer meets the
manager's investment criteria or when it has met the manager's expectations for
appreciation. The Fund's investment manager may actively trade the portfolio in
pursuit of the Fund's goal.
[icon - left facing profile of head with lightning bolt; right facing profile of
head with sunshine]
PRINCIPAL RISKS - You may be interested in the Fund if you are comfortable with
the risks of equity and fixed-income investing and intend to make a long-term
investment commitment. Like all managed funds, there is a risk that the
investment manager's strategy for managing the Fund may not achieve the desired
results. In addition, the price of common stock moves up and down in response to
corporate earnings and developments, interest rate movements, economic and
market conditions and anticipated events. As a result, the price of the Fund's
investments may go down and you could lose money on your investment.
To the extent the Fund invests in fixed-income securities it takes on different
risks, including movements in interest rates and default on payment of principal
or interest. In addition, the Fund may invest in convertible securities rated
below investment grade. These issuers are less financially secure, and are more
likely to be hurt by interest rate movements. When dividend yields and interest
rates are low, the Fund's income distributions to you may be reduced or
eliminated. In addition, the Fund's active trading will cause the Fund to have
an increased portfolio turnover rate. Higher turnover rates may result in higher
brokerage costs to the Fund and in higher net taxable gains for you as an
investor.
See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.
[icon - profile of head with scrolled paper in background]
THE FUND'S PAST PERFORMANCE - The information below shows the Fund's
performance since it began operations through December 31, 1999. These
returns include reinvestment of all dividends and capital gains distributions
and reflect Fund expenses. As with all mutual funds, past performance does
not guarantee future results.
Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year for the past ten years.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
[GRAPH]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
-7.99% 60.97% 4.82% 23.57% -9.07% 23.92% 15.61% 22.70% 22.49% 61.32%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
BEST QUARTER: 12/31/99 40.64%
WORST QUARTER: 9/30/90 -17.76%
</TABLE>
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Standard & Poor's 500
Index (S&P 500). While the Fund does not seek to match the returns of the S&P
500, this index is a good indicator of general stock market performance. You may
not invest in the S&P 500 and unlike the Fund, it does not incur fees or
charges.
<PAGE>
21
-----------
BERGER
GROWTH AND
INCOME FUND
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
LIFE OF THE FUND
1 YEAR 5 YEARS 10 YEARS (SEPTEMBER 30, 1974)
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
The Fund 61.32% 28.28% 19.74% 15.99%
S&P 500 21.03% 28.54% 18.19% 17.48%
</TABLE>
[icon - two coins]
FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales loads,
redemption or exchange fees, but you do bear indirectly Annual Fund Operating
Expenses, which vary from year to year.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- -----------------------------------------------------------------
<S> <C>
Management fee(1) .75
Distribution (12b-1) fee .25
Other expenses(2) .34
TOTAL ANNUAL FUND OPERATING EXPENSES 1.34
</TABLE>
1. Effective October 1, 1999, the investment advisory fee charged to the Fund
was reduced to the following rates of average daily net assets; 0.75% of the
first $500 million; 0.70% of the next $500 million and 0.65% in excess of $1
billion. The amount shown reflects the restated advisory fees.
2. Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown reflects the restated expenses.
UNDERSTANDING EXPENSES - Annual Fund operating expenses are paid by the Fund. As
a result, they reduce the Fund's return. Fund expenses include management fees,
12b-1 fees and administrative costs such as share holder recordkeeping and
reports, custodian and pricing services and registration fees.
EXAMPLE COSTS
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
<TABLE>
<CAPTION>
YEARS $
- -----------------------------------------------------------------
<S> <C>
One 136
Three 425
Five 734
Ten 1,613
</TABLE>
<PAGE>
22
---------------------
BERGER
BALANCED
FUND -------------------------------------------------
- Ticker Symbol: BEBAX
- --------------------------------------------------------------------------------
Ticker Symbol: BEBAX
[icon - profile of head with mountain peak in background]
THE FUND'S GOALS AND PRINCIPAL INVESTMENT STRATEGIES - The Fund aims for capital
appreciation and current income. In pursuing these goals, the Fund primarily
invests in a diversified group of domestic equity and fixed-income securities.
The allocation between equity and fixed-income securities is based upon the
investment manager's assessment of available investment opportunities and
relevant market, economic and financial factors.
The Fund's investment manager generally looks for companies with:
- - Reasonably priced equity securities with strong, consistent and predictable
earnings growth rates
- - Strong, seasoned management teams and competitive products or services
- - Well-capitalized balance sheets.
The Fund's equity investments consist primarily of common stocks of companies
with mid-sized to large market capitalizations. The Fund's fixed-income
investments are a variety of income-producing securities, such as short- to
long-term corporate and government debt securities, convertible securities,
preferred stocks and mortgage-backed securities. The investment manager believes
its investment style emphasizing equity securities offers shareholders the
opportunity for capital appreciation along with a reasonable level of capital
preservation. Normally, equity securities are expected to range from 45% to 65%
of the Fund's total assets. However, it is the Fund's policy to invest at least
25% of its total assets in fixed-income senior securities and at least 25% in
equity securities. The Fund may invest up to 20% of its assets in convertible
securities rated below investment grade (BB or lower by S&P, Ba or lower by
Moody's).
The Fund's investment manager will generally sell a security when it no longer
meets the manager's investment criteria or when it has met the manager's
expectations for appreciation. The Fund's investment manager may actively trade
the equity portion of the portfolio in pursuit of the Fund's goal. When this
occurs, the annual portfolio turnover rate may be higher than other comparable
funds.
[icon - left facing profile of head with lightning bolt; right facing profile of
head with sunshine]
PRINCIPAL RISKS - You may be interested in the Fund if you are comfortable with
the risks of equity and fixed-income investing and intend to make a long-term
investment commitment. Like all managed funds, there is a risk that the
investment manager's strategy for managing the Fund may not achieve the desired
results. In addition, the price of common stock moves up and down in response to
corporate earnings and developments, interest rate movements, economic and
market conditions and anticipated events. As a result, the price of the Fund's
investments may go down and you could lose money on your investment. The Fund
may be riskier than other balanced funds that invest more heavily in
fixed-income securities. In addition, the Fund may invest in certain securities
with unique risks, such as small company securities and mortgage-backed
securities.
To the extent the Fund invests in fixed-income securities it takes on different
risks, including movements in interest rates and default on payment of principal
or interest. In addition, the Fund may invest in convertible securities rated
below investment grade. These issuers are less financially secure, and are more
likely to be hurt by interest rate movements. When interest rates are low, the
Fund's income distributions to you may be reduced or eliminated. In addition,
the Fund's active trading will cause the Fund to have an increased portfolio
turnover rate. Higher turnover rates may result in higher brokerage costs to the
Fund and in higher net taxable gains for you as an investor.
See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.
[icon - profile of head with scrolled paper in background]
THE FUND'S PAST PERFORMANCE - The information below shows the Fund's performance
since it began operations through December 31, 1999. These returns include
reinvestment of all dividends and capital gains distributions and reflect Fund
expenses. As with all mutual funds, past performance does not guarantee future
results.
Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year since the Fund began.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
[GRAPH]
<TABLE>
<S> <C>
'98 '99
34.38% 44.58%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
BEST QUARTER: 12/31/99 22.59%
WORST QUARTER: 9/30/98 -4.86%
</TABLE>
<PAGE>
23
--------
BERGER
BALANCED
FUND
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Standard & Poor's 500
Index (S&P 500). While the Fund does not seek to match the returns of the S&P
500, this index is a good indicator of general stock market performance. You may
not invest in the S&P 500 and unlike the Fund, it does not incur fees or
charges.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
LIFE OF THE FUND
1 YEAR (SEPTEMBER 30, 1997)
- ------------------------------------------------------
<S> <C> <C>
The Fund 44.58% 54.96%(1)
S&P 500 21.03% 23.27%
</TABLE>
1. Includes returns for the last quarter of 1997, which reflect a higher than
normal level of trading activity undertaken to pursue equity opportunities
available as the advisor was beginning to implement the Fund's long-term
approach to equity management.
[icon - two coins]
FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales loads,
redemption or exchange fees, but you do bear indirectly Annual Fund Operating
Expenses, which vary from year to year.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- ------------------------------------------------------
<S> <C>
Management fee(1) .70
Distribution (12b-1) fee .25
Other expenses(2) .27
TOTAL ANNUAL FUND OPERATING EXPENSES 1.22
</TABLE>
1. Effective October 1, 1999, the investment advisory fee charged to the Fund
was reduced to the following rates of average daily net assets; 0.70% of the
first $1 billion and 0.65% in excess of $1 billion. The amount shown reflects
the restated advisory fees.
2. Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown reflects the restated expenses.
UNDERSTANDING EXPENSES - Annual Fund operating expenses are paid by the Fund. As
a result, they reduce the Fund's return. Fund expenses include management fees,
12b-1 fees and administrative costs such as shareholder recordkeeping and
reports, custodian and pricing services and registration fees.
EXAMPLE COSTS
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
<TABLE>
<CAPTION>
YEARS $
- ----------------------------------------------------------------
<S> <C>
One 124
Three 387
Five 670
Ten 1,477
</TABLE>
<PAGE>
24
<TABLE>
<CAPTION>
INVESTMENT TECHNIQUES, SECURITIES AND ASSOCIATED RISKS
RISK AND INVESTMENT TABLE
BERGER BERGER
BERGER BERGER SMALL SMALL BERGER BERGER
INFORMATION NEW BERGER COMPANY CAP MID CAP MID CAP BERGER
TECHNOLOGY GENERATION SELECT GROWTH VALUE GROWTH VALUE GROWTH
FUND FUND FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
DIVERSIFICATION * * N* * * * * *
- -----------------------------------------------------------
SMALL AND MID-SIZED COMPANY SECURITIES Y [Y] Y [Y] [Y] [Y] [Y] Y
Market, liquidity and information risk
FOREIGN SECURITIES Y Y Y Y Y Y Y Y
Market, currency, transaction, liquidity, information
and political risk
SECTOR FOCUS [Y] [Y] [Y] [Y] [Y] [Y] [Y] [Y]
Market and liquidity risk
CONVERTIBLE SECURITIES(1) Y Y Y Y Y Y Y Y
Market, interest rate, prepayment and credit risk
INVESTMENT GRADE BONDS (NONCONVERTIBLE) Y Y Y Y Y Y Y Y
Interest rate, market, call and credit risk
COMPANIES WITH LIMITED OPERATING HISTORIES Y Y Y Y 5A* Y Y 5A*
Market, liquidity and information risk
ILLIQUID AND RESTRICTED SECURITIES(2) 15 15 15 15 10* 15 15 15
Market, liquidity and transaction risk
SPECIAL SITUATIONS Y Y Y Y [Y] Y [Y] Y
Market and information risk
INITIAL PUBLIC OFFERINGS (IPOS) Y(3) Y(3) Y(3) Y Y Y(3) Y Y
Market, liquidity and information risk
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES(4) N N N N N N N N
Interest rate, prepayment, extension, market
and credit risk
TEMPORARY DEFENSIVE MEASURES N Y Y Y Y Y Y Y
Opportunity risk
LENDING PORTFOLIO SECURITIES 33 1/3A 33 1/3A 33 1/3A 33 1/3A N* 33 1/3A 33 1/3A N*
Credit risk
BORROWING 25A* 25A* 25A* 25A* 5A* 25A* 25A* 5A*
Leverage risk
- -------------------------------------------------------------------------------------------------------------------------------
HEDGING STRATEGIES
- -------------------------------------------------------------------------------------------------------------------------------
FINANCIAL FUTURES(5) 5 5 5 5 N* 5 5 5
Hedging, correlation, opportunity and leverage risk
FORWARD FOREIGN CURRENCY CONTRACTS(5) Y Y Y Y N* Y Y Y
Hedging, credit, correlation, opportunity and
leverage risk
OPTIONS(5) (EXCHANGE-TRADED AND OVER-THE-COUNTER) 5 5 5 5 5 5 5 5
Hedging, credit, correlation and leverage risk
WRITING (SELLING) COVERED CALL OPTIONS(5) 25A 25A 25A 25A 10 25A 25A 25A
(EXCHANGE-TRADED AND
OVER-THE-COUNTER) Opportunity, credit and leverage risk
<CAPTION>
BERGER
BERGER/BIAM GROWTH AND BERGER
INTERNATIONAL INCOME BALANCED
FUND FUND FUND
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
DIVERSIFICATION * * *
- -----------------------------------------------------------
SMALL AND MID-SIZED COMPANY SECURITIES Y Y Y
Market, liquidity and information risk
FOREIGN SECURITIES [Y] Y Y
Market, currency, transaction, liquidity, information
and political risk
SECTOR FOCUS [Y] Y Y
Market and liquidity risk
CONVERTIBLE SECURITIES(1) Y [Y] [Y]
Market, interest rate, prepayment and credit risk
INVESTMENT GRADE BONDS (NONCONVERTIBLE) Y Y [Y]
Interest rate, market call and credit risk
COMPANIES WITH LIMITED OPERATING HISTORIES Y 5A* Y
Market, liquidity and information risk
ILLIQUID AND RESTRICTED SECURITIES(2) 15 15 15
Market, liquidity and transaction risk
SPECIAL SITUATIONS Y Y Y
Market and information risk
INITIAL PUBLIC OFFERINGS (IPOS) Y Y Y(3)
Market, liquidity and information risk
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES(4) N N [Y]
Interest rate, prepayment, extension, market
and credit risk
TEMPORARY DEFENSIVE MEASURES N Y Y
Opportunity risk
LENDING PORTFOLIO SECURITIES 33 1/3A N* 33 1/3A
Credit risk
BORROWING 25A* 5A* 25A*
Leverage risk
- -------------------------------------------------------------------------------------------
HEDGING STRATEGIES
- -------------------------------------------------------------------------------------------
FINANCIAL FUTURES(5) N 5 5
Hedging, correlation, opportunity and leverage risk
FORWARD FOREIGN CURRENCY CONTRACTS(5) [Y] Y Y
Hedging, credit, correlation, opportunity and
leverage risk
OPTIONS(5) (EXCHANGE-TRADED AND OVER-THE-COUNTER) N 5 5
Hedging, credit, correlation and leverage risk
WRITING (SELLING) COVERED CALL OPTIONS(5) N 25A 25A
(EXCHANGE-TRADED AND
OVER-THE-COUNTER) Opportunity, credit and leverage risk
</TABLE>
<PAGE>
25
BEFORE YOU INVEST... in any of the Berger Funds, make sure you understand the
risks involved. All investments involve risk. Generally, the greater the
risk, the greater the potential for return. The reverse is also generally
true, the lower the risk, the lower the potential for return.
LIKE ALL MUTUAL FUNDS, AN INVESTMENT IN THE BERGER FUNDS IS NOT A BANK DEPOSIT
AND IS NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY. THE
FUNDS ARE NOT A COMPLETE INVESTMENT PROGRAM, BUT MAY SERVE TO DIVERSIFY OTHER
TYPES OF INVESTMENTS IN YOUR PORTFOLIO. THERE IS NO GUARANTEE THAT THE FUNDS
WILL MEET THEIR INVESTMENT GOALS, AND ALTHOUGH YOU HAVE THE POTENTIAL TO MAKE
MONEY, YOU COULD ALSO LOSE MONEY BY INVESTING IN THE FUNDS.
The table on the opposite page will help you further understand the risks the
Funds take by investing in certain securities and the investment techniques used
by the Berger Funds. A glossary follows this page. You may get more detailed
information about the risks of investing in the Berger Funds in the Statement of
Additional Information (SAI), including a discussion of debt security ratings in
Appendix A to the SAI.
KEY TO TABLE
Follow down the columns under the name of the Fund in which you are interested.
The boxes will tell you:
[Y] Yes, the security or technique is permitted by a Fund and is emphasized
by a Fund.
Y Yes, the security or technique is permitted by a Fund.
N No, the security or technique is not permitted by a Fund.
* The restriction is fundamental to a Fund. (Fundamental restrictions
cannot be changed without a shareholder vote.)
5A Use of a security or technique is permitted, but subject to a
restriction of up to 5% of total assets.
10A Use of a security or technique is permitted, but subject to a
restriction of up to 10% of total assets.
25A Use of a security or technique is permitted, but subject to a
restriction of up to 25% of total assets.
33 1/3A Use of a security or technique is permitted, but subject to a
restriction of up to 331U3% of total assets.
5 Use of a security or technique is permitted, but subject to a
restriction of up to 5% of net assets.
10 Use of a security or technique is permitted, but subject to a
restriction of up to 10% of net assets.
15 Use of a security or technique is permitted, but subject to a
restriction of up to 15% of net assets.
NOTES TO TABLE
1. The Funds have no minimum quality standards for convertible securities,
although they will not invest in defaulted securities. They also will not invest
20% or more of their assets in convertible securities rated below investment
grade or in unrated convertible securities that the advisor considers to be
below investment grade.
2. The Berger Small Cap Value Fund may invest in illiquid securities, but not
restricted securities.
3. IPOs constituted a significant portion of the Fund's performance during the
last fiscal year. However, there can be no assurance that IPOs will continue to
have such a significant impact, if the quality or number of available IPOs
diminishes or if the Fund grows in size and IPOs become an insignificant part of
the Fund's total portfolio.
4. The Berger Balanced Fund may invest only in mortgage-backed securities that
are issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, or in privately issued mortgage-backed or asset-backed
securities that are rated AA/Aa (S&P/Moody's) or above.
5. The Funds may use futures, forwards and options only for hedging. Not more
than 5% of a Fund's net assets may be used for initial margins for futures and
premiums for options, although a Fund may have more at risk under these
contracts than the initial margin or premium. However, a Fund's aggregate
obligations under these contracts may not exceed the total market value of the
assets being hedged, such as some or all of the value of the Fund's equity
securities.
<PAGE>
26
RISK AND INVESTMENT GLOSSARY
- --------------------------------------------------------------------------------
BORROWING refers to a loan of money from a bank or other financial institution
undertaken by a Fund for temporary or emergency reasons only.
CALL RISK is the possibility that an issuer may redeem or "call" a fixed-income
security before maturity at a price below its current market price. An increased
likelihood of a call may reduce the security's price.
COMMON STOCK is a share of ownership (equity) interest in a company.
COMPANIES WITH LIMITED OPERATING HISTORIES are securities issued by companies
that have been in continuous operation for less than three years. Sometimes
called "unseasoned" issuers.
CONVERTIBLE SECURITIES are debt or equity securities which may be converted on
specified terms into stock of the issuer.
CORRELATION RISK occurs when a Fund "hedges" ~ uses one investment to offset the
Fund's position in another. If the two investments do not behave in relation to
one another the way Fund managers expect them to, then unexpected results may
occur.
CREDIT RISK means that the issuer of a security or the counterparty to an
investment contract may default or become unable to pay its obligations when
due.
CURRENCY RISK happens when a Fund buys or sells a security denominated in
foreign currency. Foreign currencies "float" in value against the U.S. dollar.
Adverse changes in foreign currency values can cause investment losses when a
Fund's investments are converted to U.S. dollars.
EXTENSION RISK is the risk that, as interest rates rise, borrowers are less
likely to refinance their mortgages or other
debts. As a result, the principal on mortgage-backed or asset-backed
securities may be paid later than expected, which could cause the value of the
securities to go down.
DIVERSIFICATION means a diversified fund may not, with respect to at least 75%
of its assets, invest more than 5% in the securities of one company. A
nondiversified fund may be more volatile than a diversified fund because it
invests more of its assets in a smaller number of companies and the gains or
losses on a single stock will therefore have a greater impact on the Fund's
share price. All of the Berger Funds are diversified funds, except the Berger
Select Fund.
FINANCIAL FUTURES are exchange-traded contracts on securities, securities
indexes or foreign currencies that obligate the holder to take or make future
delivery of a specified quantity of those underlying securities or currencies on
a predetermined future date at a predetermined price.
FOREIGN SECURITIES are issued by companies located outside of the United States.
A Fund considers a company to be located outside the United States if the
principal securities trading market for its equity securities is located outside
the U.S. or it is organized under the laws of, and has a principal office in, a
country other than the U.S.
FORWARD FOREIGN CURRENCY CONTRACTS are privately negotiated contracts committing
the holder to purchase or sell a specified quantity of a foreign currency on a
predetermined future date at a predetermined price.
HEDGING RISK comes into play when a Fund uses a security whose value is based on
an underlying security or index to "offset" the Fund's position in another
security or currency. The objective of hedging is to offset potential losses in
one security with gains in the hedge. But a hedge can eliminate or reduce gains
as well as offset losses. (Also see "Correlation risk.")
ILLIQUID AND RESTRICTED SECURITIES are securities which, by rules of their
issue or by their nature, cannot be sold readily. These do not include liquid
Rule 144A securities.
INFORMATION RISK means that information about a security or issuer might not
be available, complete, accurate or comparable.
INITIAL PUBLIC OFFERING (IPO) is the sale of a company's securities to the
public for the first time. IPO companies can be small and have limited operating
histories. The price of IPO securities can be highly unstable due to prevailing
market psychology and the small number of shares available. In addition, the
quality and number of IPOs available for purchase may diminish in the future,
and their contribution to Fund performance may be less significant as a Fund
grows in size.
INTEREST RATE RISK is the risk that changes in interest rates will adversely
affect the value of an investor's securities. When interest rates rise, the
value of fixed-income securities will generally fall. Conversely, a drop in
interest rates will generally cause an increase in the value of fixed-income
securities. Longer-term securities are subject to greater interest rate risk.
<PAGE>
27
INVESTMENT GRADE BONDS are rated BBB (Standard & Poor's) or Baa (Moody's) or
above. Bonds rated below investment grade are subject to greater credit risk
than investment grade bonds.
LENDING PORTFOLIO SECURITIES to qualified financial institutions is undertaken
in order to earn income. The Funds lend securities only on a fully
collateralized basis.
LEVERAGE RISK occurs in some securities or techniques that tend to magnify the
effect of small changes in an index or a market. This can result in a loss that
exceeds the amount that was invested in the contract.
LIQUIDITY RISK occurs when investments cannot be sold readily. A Fund may have
to accept a less-than-desirable price to complete the sale of an illiquid
security or may not be able to sell it at all.
MARKET CAPITALIZATION is the total current market value of a company's
outstanding common stock.
MARKET RISK exists in all mutual funds and means the risk that the prices of
securities in a market, a sector, or an industry will fluctuate, and that such
movements might reduce an investment's value.
MORTGAGE-BACKED SECURITIES are securities that represent interests in "pools" of
mortgages or that are backed by mortgages where the interest and principal
payments on the mortgages are "passed-through" to the security holder.
Mortgage-backed securities may be issued or guaranteed by the U.S. Government.
They may also be privately issued and backed by U.S. Government guaranteed
securities or by private arrangements to make them more secure. ASSET-BACKED
SECURITIES are similar, except backed by assets such as car loans or credit card
receivables rather than mortgages.
OPPORTUNITY RISK means missing out on an investment opportunity because the
assets necessary to take advantage of it are committed to less advantageous
investments or strategies.
OPTIONS are contracts giving the holder the right but not the obligation to
purchase or sell a security on or before a predetermined future date at a fixed
price. Options on securities indexes are similar, but settle in cash.
POLITICAL RISK comes into play with investments, particularly foreign
investments, which may be adversely affected by nationalization, taxation, war,
government instability or other economic or political actions or factors.
PREPAYMENT RISK is the risk that, as interest rates fall, borrowers are more
likely to refinance their debts. As a result, the principal on certain
fixed-income securities may be paid earlier than expected, which could cause
investment losses and cause prepaid amounts to have to be reinvested at a
relatively lower interest rate.
SECTOR FOCUS occurs when a significant portion of a Fund's assets are invested
in a relatively small number of related industries. The Funds will not
concentrate more than 25% of their total assets in any one industry. Sector
focus may increase both market and liquidity risk.
SMALL AND MID-SIZED COMPANY SECURITIES are securities issued by small or
mid-sized companies, as measured by their market capitalization. The market
capitalization range targeted by each of the Funds investing primarily in small
or mid-sized companies varies by Fund and appears in the description for those
Funds under the heading "The Fund's Goal and Principal Investment Strategies."
In general, the smaller the company, the greater its risks.
SPECIAL SITUATIONS are companies about to undergo a structural, financial or
management change which may significantly affect the value of their securities.
TEMPORARY DEFENSIVE MEASURES may be taken when a Fund's investment manager
believes they are warranted due to market conditions. When this happens, the
Fund may increase its investment in government securities and other short-term
securities without regard to the Fund's investment restrictions, policies or
normal investment emphasis.
TRANSACTION RISK means that a Fund may be delayed or unable to settle a
transaction or that commissions and settlement expenses may be higher than
usual.
WRITING (SELLING) COVERED CALL OPTIONS is the selling of a contract to another
party which gives them the right but not the obligation to buy a particular
security from you. A Fund will write call options only if it already owns the
security (if it is "covered").
<PAGE>
28
BUYING
SHARES
- - MINIMUM INITIAL INVESTMENTS: - MINIMUM SUBSEQUENT INVESTMENTS:
- --------------------------------------------------------------------------------
- - Regular investment $ 2,000 - Regular investment $ 50
- Regular automatic investment $ 50
- - Low Minimum Investment Plan $ 100 - Low Minimum Investment Plan
(required monthly automatic
investments) $ 100
SEND NEW ACCOUNT OR FOR OVERNIGHT, CERTIFIED
APPLICATIONS TO: OR REGISTERED MAIL ONLY
Berger Funds Berger Funds
P.O. Box 219958 330 West 9th Street, 1st Floor
Kansas City, MO 64121-9958 Kansas City, MO 64105
BY MAIL
[GRAPHIC]
Read this prospectus.
Fill out the application if you are opening a new account.
Make out a check to BERGER FUNDS for the amount you want to invest.
Send the application and check to the Berger Funds in the envelope provided.
To add to an existing account, be sure to include your account number on your
check and mail it to the appropriate address above.
BY TELEPHONE
[GRAPHIC]
If you already have a Berger Funds account, you may purchase additional shares
by telephone order.
You must pay for them within three business days by wire, electronic funds
transfer or overnight delivery of a check.
Call (800) 551-5849 for current wire or electronic funds transfer
instructions.
BY ONLINE ACCESS
[GRAPHIC]
If you have established a Berger Funds account with electronic funds transfer
privileges you may purchase additional shares via online access.
You will find us online at bergerfunds.com.
BY SYSTEMATIC INVESTMENT PLAN
[GRAPHIC]
To automatically purchase more shares on a regular basis for a regular minimum
or Low Minimum Investment Plan account, fill out the Systematic Investment Plan
section of the application. Investments are transferred automatically from your
bank account.
The Low Minimum Investment Plan is designed for investors who would like to
begin a regular investment program but are reluctant to commit to higher lump
sum initial investments. In order to qualify for the Low Minimum Investment
Plan, an investor must commit to automatic monthly investments totaling no less
than $100 per month per account. Automatic monthly investments must be made
until the value of each account opened under the Plan is at least $2,000 or the
account will be assessed an annual charge.
- --------------------------------------------------------------------------------
All shareholders are automatically granted telephone and online transaction
privileges unless they decline them explicitly in writing, either on the account
application or by writing to the Berger Funds at the address above.
You may give up some level of security by choosing to buy and sell shares by
telephone or online rather than by mail.
- --------------------------------------------------------------------------------
IMPORTANT NOTES ABOUT PAYING FOR YOUR SHARES
Your check must be made payable to BERGER FUNDS.
You may NOT purchase shares by cash, credit card, third-party checks or checks
drawn on foreign banks.
Telephone and online purchase orders may not exceed $100,000 on the date the
order is placed. Shares previously bought by telephone or online access are
included in calculating account size only if payment has been received for
those shares.
Orders not paid for on time will be canceled and shares will be redeemed from
your account to compensate for any decline in price of the shares canceled.
The Funds reserve the right to reject any order and to waive or reduce
minimums, or increase minimums following notice.
<PAGE>
29
-----------
SELLING
(REDEEMING)
SHARES
By mail
[GRAPHIC]
Send a written request indicating your account number and the dollar amount or
number of shares you are redeeming to the appropriate address shown under
"Buying Shares."
Your request must be signed by each registered shareholder, with the
signature(s) appearing exactly as they do on your account registration.
By telephone
[GRAPHIC]
Call (800) 551-5849.
By online access
[GRAPHIC]
You will find us online at bergerfunds.com.
By systematic withdrawal plan
[GRAPHIC]
Shares may be redeemed automatically ($50 minimum) monthly, quarterly,
semi-annually or annually.
A systematic withdrawal plan may be established if you own shares in a Fund
worth at least $5,000.
Call (800) 551-5849 for more information and forms.
- --------------------------------------------------------------------------------
For limitations on telephone and online redemptions see "Signature
Guarantees / Special Documentation" below.
Telephone and online redemptions are not available for shares held in
retirement accounts sponsored by the Funds.
- --------------------------------------------------------------------------------
IMPORTANT NOTES
ABOUT PAYMENT
FOR YOUR
REDEEMED SHARES
IN TIMES OF EXTREME ECONOMIC OR MARKET CONDITIONS, TRANSACTIONS BY TELEPHONE
OR ONLINE MAY BE DIFFICULT.
Generally, payment for your redeemed shares will be sent to you within three
business days after receipt of your redemption request in good order.
You may receive payment for redeemed shares via wire or electronic funds
transfer. You may elect these services on the account application or send to the
Berger Funds a written request providing your bank information with your
signature guaranteed. (See "Signature Guarantees / Special Documentation"
below.)
Wire and electronic funds transfers are subject to a $1,000 minimum and $100,000
maximum.
You will be charged $10 if you request a wire transfer. There is no charge for
an electronic funds transfer.
A wire transfer will be sent the next business day after receipt of your order,
and an electronic funds transfer will be sent the second business day after
receipt of your order.
Proceeds from the redemption of shares purchased by check may be delayed until
full payment for the shares has been received and cleared, which may take up to
15 days from the purchase date.
The Berger Information Technology Fund will deduct a 1% redemption fee from your
redemption proceeds if you redeem shares of that Fund held less than 6 months.
This fee is intended to discourage investors from short-term trading of Fund
shares and to offset the cost to the Fund of excess brokerage and other costs
incurred as a result of such trading. This fee will not be charged to retirement
plan accounts or in the case of redemptions resulting from the death of the
shareholder.
<PAGE>
30
---------------------
INFORMATION ABOUT
YOUR ACCOUNT
- --------------------------------------------------------------------------------
EXCHANGING Shares of the Funds described in this prospectus may be exchanged
SHARES for shares of any other Berger Fund or for shares in the Cash
Account Trust Portfolios (the CAT Portfolios). The CAT Portfolios
are three separately managed, unaffiliated money market funds: the
Money Market Portfolio, the Government Securities Portfolio and
the Tax-Exempt Portfolio.
The exchange privilege with the CAT Portfolios does not constitute
an offering or recommendation of the shares of these portfolios by
the Berger Funds or Berger LLC. Berger LLC is compensated for
administrative services it performs with respect to the CAT
Portfolios.
When exchanging shares:
- Each account must be registered identically -- have the same
signatures and addresses.
- Each Fund or CAT Portfolio must be legally eligible for sale in
your state of residence.
- You may exchange out of each of the Berger Funds up to four
times per calendar year. At this time, there is no limit on the
number of exchanges permitted out of the CAT Portfolios.
- You may exchange by telephone, online access or mail.
- You are responsible for obtaining and reading the prospectus for
the Fund or CAT Portfolio into which you are exchanging.
- An exchange out of a Berger Fund results in the sale of that
Fund's shares and the purchase of another, normally resulting in a
taxable event for you.
- Exchanges into any new Fund or CAT Portfolio are subject to that
Fund's or Portfolio's initial and subsequent investment minimums.
- The Berger Information Technology Fund will deduct a 1%
redemption fee from the amount you exchange if you exchange shares
of that Fund held less than 6 months. This fee is intended to
discourage investors from short-term trading of Fund shares and to
offset the cost to the Fund of excess brokerage and other costs
incurred as a result of such trading. This fee will not be charged
to retirement plan accounts.
The Funds may terminate or modify the exchange privilege in the
future.
- --------------------------------------------------------------------------------
SIGNATURE The Funds use Signature Guarantees to protect you and the Funds
GUARANTEES/ from possible fraudulent requests for redeemed shares. Your
SPECIAL redemption request must be in writing and accompanied by a
DOCUMENTATION Signature Guarantee if:
- Your request exceeds $100,000.
- You request that payment be made to a name other than the one on
your account registration.
- You request that payment be mailed to an address which has been
changed within 30 days of your redemption request or to an address
other than the one of record.
- You change or add information relating to your designated bank.
Berger Funds reserve the right to require Signature Guarantees
under other certain circumstances.
You can get a Signature Guarantee from most broker-dealers,
national or state banks, credit unions, federal savings and loan
associations or other eligible institutions. YOU CANNOT OBTAIN A
SIGNATURE GUARANTEE FROM A NOTARY PUBLIC.
Make sure the Signature Guarantee appears:
- Together with the signature(s) of all registered owner(s) of the
redeemed shares on the written redemption request.
- On any share certificates you hold for the redeemed shares or on
a separate statement of assignment (stock power) which may be
obtained from a bank or broker.
Additional documents are required for redemptions by corporations,
executors, administrators, trustees and guardians. For
instructions, call (800) 551-5849 or write to the Berger Funds,
P.O. Box 219958, Kansas City, MO 64121-9958.
<PAGE>
31
- --------------------------------------------------------------------------------
YOUR The price at which you buy, sell or exchange Fund shares is the
SHARE share price or net asset value (NAV). The share price for each
PRICE Fund is determined by adding the value of that Fund's investments,
cash and other assets, deducting liabilities, and then dividing
that value by the total number of that Fund's shares outstanding.
For Funds offering more than one class of shares, share price is
calculated separately for each class.
Each Fund's share price is calculated at the close of the regular
trading session of the New York Stock Exchange (normally 4:00 p.m.
New York time) each day that the Exchange is open. Share price is
not calculated on the days that the Exchange is closed.
FOR A PURCHASE, REDEMPTION OR EXCHANGE OF FUND SHARES, YOUR PRICE
IS THE SHARE PRICE NEXT CALCULATED AFTER YOUR REQUEST IS RECEIVED
IN GOOD ORDER AND ACCEPTED BY THE FUND, ITS AUTHORIZED AGENT OR
DESIGNEE. TO RECEIVE A SPECIFIC DAY'S PRICE, YOUR REQUEST MUST BE
RECEIVED BEFORE THE CLOSE OF THE NEW YORK STOCK EXCHANGE ON THAT
DAY.
When the Funds calculate their share price, they value the
securities they hold at market value. Sometimes market quotes for
some securities are not available or are not representative of
market value. Examples would be when events occur that materially
affect the value of a security at a time when the security is not
trading or when the securities are illiquid. In that case,
securities may be valued in good faith at fair value, using
consistently applied procedures decided on by the trustees or
directors. Money market instruments maturing within 60 days are
valued at amortized cost, which approximates market value. Assets
and liabilities expressed in foreign currencies are converted into
U.S. dollars at the prevailing market rates quoted by one or more
banks or dealers shortly before the close of the Exchange.
A Fund's foreign securities may trade on days that the Exchange is
closed and the Fund's daily share price is not calculated. As a
result, the Fund's daily share price may be affected and you will
not be able to purchase or redeem shares.
- --------------------------------------------------------------------------------
OTHER SECURITY CONSIDERATIONS
INFORMATION You may give up some level of security by choosing to buy or sell
ABOUT YOUR shares by telephone or online, rather than by mail. The Funds use
ACCOUNT procedures designed to give reasonable assurance that telephone
and online instructions are genuine, including recording the
transactions, testing the identity of the shareholder placing the
order and sending prompt written confirmation of transactions to
the shareholder of record. The Funds, and their service providers,
are not liable for acting upon instructions communicated by
telephone or online that they believe to be genuine if these
procedures are followed.
CONFIRMATION OF YOUR PURCHASES AND REDEMPTIONS
After any transaction, you will receive written confirmation
including the share price and the dollar amount and number of
shares bought or redeemed. Exception: Shares purchased under
Systematic Investment Plans or redeemed under Systematic
Withdrawal Plans will be confirmed quarterly. Partial shares
will be calculated to three decimal places.
SHAREHOLDER REPORTS
To reduce expenses, a Fund may mail only one copy of most
financial reports, prospectuses and proxies to your household,
even if you have more than one account in the Fund. Call (800)
551-5849 if you need additional copies of financial reports or
prospectuses.
SHARE CERTIFICATES
To assist in minimizing administrative costs, share certificates
will not be issued. Records of share ownership are maintained by
the Fund's transfer agent in book entry form. If you are selling
shares previously issued in certificate form, you need to include
the certificate along with your redemption or exchange request. If
you have lost your certificate, please call us at (800) 551-5849.
PURCHASES THROUGH BROKER-DEALERS
You may buy Fund shares through certain broker-dealers or other
financial organizations, but these organizations may charge you a
fee or may have different minimums for first-time or additional
investments which are not applicable if you buy shares directly
from the Funds.
THIRD PARTY ADMINISTRATORS
Certain brokerage firms and other companies may provide
administrative services (such as sub-transfer agency,
recordkeeping or shareholder communications services) to investors
purchasing shares of the Funds through those companies. A Fund's
advisor or a Fund (if approved by its directors or trustees) may
pay
<PAGE>
32
- --------------------------------------------------------------------------------
fees to these companies for their services. These companies may
also be appointed as agents for or authorized by the Funds to
accept on their behalf purchase and redemption requests that are
received in good order. Subject to Fund approval, certain of these
companies may be authorized to designate other entities to accept
purchase and redemption orders on behalf of the Funds.
DATE-RELATED INFORMATION
Mutual funds and businesses around the world could be adversely
affected if computers do not properly process date-related
information. The Funds' advisors are addressing these issues for
their computers and are getting reasonable assurances from the
Funds' other major service providers that they too are addressing
these issues to preserve smooth functioning of the Funds' trading,
pricing, shareholder account, custodial and other operations.
There can be no assurances, however, that all problems will be
avoided.
These computer problems could also adversely affect the Funds'
investments. Improperly functioning computers may disrupt
securities markets generally or result in overall economic
uncertainty. Individual companies may also be adversely affected
by the cost of fixing their computers, which could be substantial.
The Funds' investment managers consider these issues when
evaluating investments for the Funds.
REDEMPTIONS IN-KIND
Each Fund intends to redeem its shares only for cash, although in
order to protect the interest of remaining shareholders, it
retains the right to redeem its shares in-kind under unusual
circumstances. In-kind payment means payment will be made to you
in portfolio securities rather than cash. If this occurs, you will
incur transaction costs if you sell the securities for cash. You
may have difficulty selling the securities and recovering the
amount of your redemption if the securities are illiquid.
ACCOUNT MINIMUMS
The Funds will charge all shareholder accounts with a balance of
less than $2,000 an annual fee of $10 unless the shareholder
account is making automatic monthly investments. This charge is
designed to help offset the proportionately higher costs of
maintaining small accounts.
This charge will apply to accounts that have been over $2,000 at
some point in time only if the balance has dropped below this
amount because shares were redeemed, not because the share value
declined.
Shares in accounts that do not meet the minimum balance
requirement applicable to them as described below may also be
subject to involuntary redemption by the Funds.
REDEMPTIONS BY THE FUNDS OF CERTAIN ACCOUNTS
To reduce their expenses, all Funds other than the Berger Growth
Fund may involuntarily redeem the shares in your account if your
balance drops below $2,000 -- but only if it drops below this
amount because you have redeemed shares, not because the share
value has declined. You will be given 60 days' notice before a
Fund undertakes any involuntary redemption. During that time, you
may buy more shares to bring your account above the minimum.
Existing shareholders of the following Funds have lower minimum
balance requirements and must maintain these minimum balances to
avoid involuntary redemption:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
IF YOUR SHARES WERE YOUR MINIMUM IF YOUR SHARES WERE YOUR MINIMUM
FUND PURCHASED BEFORE... ACCOUNT BALANCE IS PURCHASED BEFORE... ACCOUNT BALANCE IS
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Berger Growth and Income Fund January 26, 1996 $250 November 28, 1996 $500
----------------------------------------------------------------------------------------------------------------------
Berger Small Company Growth Fund January 26, 1996 $250 November 28, 1996 $500
----------------------------------------------------------------------------------------------------------------------
Berger New Generation Fund November 28, 1996 $1,000
----------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
DISTRIBUTIONS DISTRIBUTIONS OF INCOME AND GAINS
AND TAXES Unless you tell us that you want to receive your distributions in
cash, they will be reinvested automatically in Fund shares. The
Funds generally make two different kinds of distributions:
- Capital gains from the sale of portfolio securities held by a
fund. Each Fund will distribute any net realized capital gains
annually, normally in December.
<PAGE>
33
- Net investment income from interest or dividends received on
securities held by a fund. The Funds will distribute their
investment income as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
DISTRIBUTIONS OF
FUND NET INVESTMENT INCOME
--------------------------------------------------------------------------------
<S> <C>
Berger Growth and Income Fund QUARTERLY
(normally in March, June,
September and December)
--------------------------------------------------------------------------------
Berger Balanced Fund QUARTERLY
(normally in March, June,
September and December)
--------------------------------------------------------------------------------
All other Berger Funds ANNUALLY
(normally in December)
--------------------------------------------------------------------------------
</TABLE>
YOUR TAXES
You generally will owe tax on amounts distributed to you by the
Funds in any non-retirement account whether you reinvest them in
additional shares or receive them in cash. Distributions of gains
from the sale of assets held by a Fund for more than one year
generally are taxable to you at the applicable long-term capital
gains rate, regardless of how long you have owned your Fund
shares. Distributions from other sources generally are taxed as
ordinary income.
Distributions made by the Funds to you will normally be capital
gains. A portion of those gains may be net short-term capital
gains, which are taxed as ordinary income. The Berger Growth and
Income Fund and the Berger Balanced Fund normally will also
distribute net investment income, which is taxed as ordinary
income. The other Berger Funds generally will not distribute net
investment income, although any net investment income that is
generated as a by-product of managing their portfolios will be
distributed to you.
If you redeem Fund shares that have appreciated in value, you will
have a taxable gain upon redemption. Exchanges are treated as a
redemption and purchase for tax purposes. Therefore, you will also
have a taxable gain if you exchange shares that have appreciated
in value.
ADDITIONAL TAX INFORMATION
You should consult your own tax advisor about your particular
situation. For more information about other tax matters, including
backup withholding for certain taxpayers and other tax aspects of
redemptions, see the SAI.
- --------------------------------------------------------------------------------
TAX-SHELTERED The Funds offer several tax-qualified retirement plans for
RETIREMENT individuals, businesses and nonprofit organizations. For
PLANS information about establishing an IRA, Roth IRA, profit-sharing or
money purchase pension plan, 403(b) Custodial Account, SEP-IRA,
SIMPLE IRA account or other retirement plans, please call (800)
551-5849 or write to the Berger Funds, P.O. Box 219958, Kansas
City, MO 64121-9958. Trustees for existing 401(k) or other plans
interested in using Fund shares as an investment or investment
alternative in their plans are invited to call the Funds at
(800) 259-2820.
<PAGE>
34
---------------------
ORGANIZATION
OF THE BERGER
FUNDS FAMILY
- --------------------------------------------------------------------------------
INVESTMENT The following companies provide investment management and
MANAGERS administrative services to the Funds. The advisory fees paid to
them for the most recent fiscal year are shown in the following
table as a percentage of each Fund's average daily net assets.
Effective October 1, 1999, the advisory fee for certain Funds was
reduced and the administrative fee charged to these Funds was
eliminated. These fee reductions are reflected earlier in this
prospectus in the expense information for each Fund.
BERGER LLC (210 University Blvd., Suite 900, Denver, CO 80206)
serves as investment advisor, sub-advisor, administrator or
sub-administrator to mutual funds and institutional investors.
Berger LLC has been in the investment advisory business for 25
years. When acting as investment advisor, Berger LLC is
responsible for managing the investment operations of the Funds.
Berger LLC also provides administrative services to the Funds.
BBOI WORLDWIDE LLC (210 University Blvd., Suite 700, Denver, CO
80206) was formed in 1996 as a joint venture between Berger LLC
and Bank of Ireland Asset Management (U.S.) Limited (BIAM). As
investment advisor, BBOI oversees, evaluates and monitors the
investment advisory services provided by BIAM as sub-advisor.
BBOI also provides administrative services to the Berger/BIAM
International Fund.
Berger LLC and BIAM entered into an agreement to dissolve BBOI
Worldwide. The dissolution of BBOI will have no effect on the
investment advisory services provided to the Fund or on the
fees borne by the Fund for advisory services. Contingent upon
shareholder approval, when BBOI Worldwide is dissolved, Berger
LLC will become the Fund's advisor and BIAM will continue to be
responsible for day-to-day management of the Fund's portfolio as
sub-advisor. If approved by shareholders, these advisory changes
are expected to take place in the first half of this year.
BANK OF IRELAND ASSET MANAGEMENT (U.S.) LIMITED (BIAM) (20
Horseneck Lane, Greenwich, CT 06830 [representative office];
26 Fitzwilliam Place, Dublin 2, Ireland [main office]) serves as
investment advisor or sub-advisor to pension and profit-sharing
plans and other institutional investors and mutual funds. Bank
of Ireland's investment management group was founded in 1966. As
sub-advisor, BIAM provides day-to-day management of the
investment operations of the Berger/BIAM International Portfolio.
PERKINS, WOLF, MCDONNELL & COMPANY (PWM) (53 West Jackson
Boulevard, Suite 722, Chicago, IL 60604) served as investment
advisor to the Berger Small Cap Value Fund (then known as The Omni
Investment Fund) from 1987 to February 1997, when PWM became the
sub-advisor to the Fund. As sub-advisor, PWM provides
day-to-day management of the investment operations of the Berger
Small Cap Value Fund and the Berger Mid Cap Value Fund.
BAY ISLE FINANCIAL CORPORATION (Bay Isle) (160 Sansome Street,
17th Floor, San Francisco, CA 94104) has been in the investment
advisory business since 1987. Bay Isle served as investment
advisor to the Berger Information Technology Fund (then known as
the InformationTech 100-Registered Trademark- Fund) from its
inception in April 1997 until July 1999, when Bay Isle became
sub-advisor to the Fund. As sub-advisor, Bay Isle provides
day-to-day management of the Fund's investment operations.
<PAGE>
35
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
FUND ADVISORY FEE THE FUND'S INVESTMENT MANAGER
PAID BY FUND
----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BERGER INFORMATION 0.90% paid to WILLIAM F. K. SCHAFF, co-founder, co-owner and Chief Investment Officer
TECHNOLOGY FUND Berger LLC(1) of Bay Isle, has been the investment manager for the Berger Information
Technology Fund since its inception in April 1997. Mr. Schaff has been
managing accounts of Bay Isle clients since 1987.
----------------------------------------------------------------------------------------------------------------
BERGER NEW GENERATION 0.90% paid to MARK S. SUNDERHUSE, Senior Vice President of Berger LLC, is the
FUND Berger LLC investment manager of the Berger New Generation Fund. Mr. Sunderhuse
joined Berger LLC in January 1998 and assumed management of the Fund in
January 1999. Mr. Sunderhuse has more than eleven years of experience in
the investment management industry.
----------------------------------------------------------------------------------------------------------------
BERGER SELECT FUND 0.75% paid to TINO R. SELLITTO (see Berger Growth Fund), AMY K. SELNER (see Berger
Berger LLC Small Company Growth Fund) and MARK S. SUNDERHUSE (see Berger New
Generation Fund) assumed co-management of the Berger Select Fund in
May 1999.
----------------------------------------------------------------------------------------------------------------
BERGER SMALL COMPANY 0.90% paid to AMY K. SELNER, Vice President of Berger LLC, is the investment manager
GROWTH FUND Berger LLC of the Berger Small Company Growth Fund. Ms. Selner joined Berger LLC as
a senior technology analyst in April 1996 and assumed management of the
Fund in November 1998. Ms. Selner has more than eight years of
experience in the investment industry.
----------------------------------------------------------------------------------------------------------------
BERGER SMALL CAP 0.90% paid to ROBERT H. PERKINS has been the investment manager for the Berger Small
VALUE FUND Berger LLC Cap Value Fund since its inception in October 1987. Mr. Perkins has been
an investment manager since 1970 and serves as President and a director
of Perkins, Wolf, McDonnell & Company. THOMAS M. PERKINS has been an
investment manager since 1974 and joined PWM as a portfolio manager in
1998. Thomas Perkins assumed co-management of the Fund in January 1999.
----------------------------------------------------------------------------------------------------------------
BERGER MID CAP GROWTH 0.75% paid to AMY K. SELNER assumed management of the Fund at its inception in
FUND Berger LLC December 1997.
----------------------------------------------------------------------------------------------------------------
BERGER MID CAP VALUE 0.75% paid to THOMAS M. PERKINS AND ROBERT H. PERKINS have served as co-investment
FUND Berger LLC managers of the Berger Mid Cap Value Fund since its inception in August
1998.
----------------------------------------------------------------------------------------------------------------
BERGER GROWTH FUND 0.75% paid to TINO R. SELLITTO, Vice President of Berger LLC, is the investment
Berger LLC manager of the Berger Growth Fund. Mr. Sellitto joined Berger as a
senior equity analyst in January 1998 and assumed co-management of the
Fund in May 1999 and sole management of the Fund in January 2000.
Mr. Sellitto has more than five years of experience in the investment
industry.
----------------------------------------------------------------------------------------------------------------
BERGER/BIAM 0.90% paid to BIAM, using a team approach, has been the investment manager for the
INTERNATIONAL FUND BBOI Worldwide Portfolio, in which the Fund is invested, since its inception in 1996.
LLC(1) BIAM is the sub-advisor to the Portfolio and is part of Bank of
Ireland's asset management group, established in 1966. Most of the team
of investment professionals have been with the group for at least ten
years.
----------------------------------------------------------------------------------------------------------------
BERGER GROWTH AND 0.75% paid to TINO R. SELLITTO assumed management of the Fund in November 1998.
INCOME FUND Berger LLC
----------------------------------------------------------------------------------------------------------------
BERGER BALANCED FUND 0.70% paid to TINO R. SELLITTO (see Berger Growth Fund), AMY K. SELNER (see Berger
Berger LLC Small Company Growth Fund, and MARK S. SUNDERHUSE (See Berger New
Generation Fund), are interim co-investment managers of the Berger
Balanced Fund, assuming management of the Fund in January 2000.
----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) After waivers, advisory fees paid were: Berger Information Technology Fund
.43%; and Berger/BIAM International Fund .89% for the fiscal year ended
September 30, 1999.
<PAGE>
36
- --------------------------------------------------------------------------------
PORTFOLIO TURNOVER
Portfolio changes are made whenever the Fund's investment manager
believes that the Fund's goal could be better achieved by
investment in another security, regardless of portfolio turnover.
At times, portfolio turnover for a Fund may exceed 100% per year.
A turnover rate of 100% means the securities owned by a Fund were
replaced once during the year. Higher turnover rates may result in
higher brokerage costs to the Funds and in higher net taxable
gains for you as an investor. Each Fund's portfolio turnover rate
can be found under the heading "Financial Highlights for the
Berger Funds Family."
- --------------------------------------------------------------------------------
12b-1 The Funds are "no-load" funds, meaning that you pay no sales
ARRANGEMENTS charge or commissions when you buy or sell Fund shares. However,
each Fund has adopted a 12b-1 plan permitting it to pay a fee in
connection with distribution of its shares. Berger LLC is entitled
to be paid a fee under each plan of 0.25% of each Fund's average
daily net assets. Because this fee is paid on an ongoing basis,
this may result in the cost of your investment increasing and over
time may cost you more than other types of sales charges. The fee
may be used for such things as marketing and promotion,
compensation to dealers and others who provide distribution and
administrative services, and shareholder support services (such as
routine requests for information).
- --------------------------------------------------------------------------------
SPECIAL FUND MULTI-CLASS
STRUCTURES The Berger Information Technology Fund, the Berger New Generation
Fund, the Berger Small Company Growth Fund and the Berger Small
Cap Value Fund each currently has two classes of shares. The
Investor Shares offered in this prospectus are available to the
general public. The other class of shares, Institutional Shares,
are offered through a separate prospectus and are designed for
investors who maintain a minimum account balance of $250,000. Each
class of shares has its own expenses so that share price,
performance and distributions will differ between classes. The
12b-1 plans adopted by these Funds apply only to the Investor
Shares. For more information on Institutional Shares, please call
(800) 259-2820.
MASTER/FEEDER
The Berger/BIAM International Fund is organized as a "feeder" fund
in a "master/feeder" structure. This means that the Fund's assets
are all invested in a larger "master" portfolio of securities, the
Berger/BIAM International Portfolio, which has investment goals
and policies identical to those of the Fund. The other feeders
investing in the Portfolio are the International Equity Fund and
the Berger/BIAM International CORE Fund, each of which has a
minimum balance requirement of $1,000,000 and its own expenses so
that share price, performance and distributions will differ among
feeders. For more information on these feeders, please call (800)
259-2820.
The Fund may withdraw its investment in the Portfolio at any time,
if the Trustees determine that it is in the best interests of the
Fund to do so. In that event, the Fund might transfer to another
master fund or hire its own investment advisor. A withdrawal could
result in the Fund receiving an in-kind distribution of portfolio
securities from the Portfolio. In that case, the Fund could incur
brokerage, tax or other charges if it converted the securities to
cash. In addition, an in-kind distribution could adversely affect
the liquidity of the Fund.
For more information on multi-class and master/feeder fund
structures, see the SAI.
<PAGE>
37
--------------------
FINANCIAL HIGHLIGHTS
FOR THE BERGER FUNDS
FAMILY
- --------------------------------------------------------------------------------
The financial highlights will help you understand each Fund's financial
performance for the periods indicated. Certain information reflects financial
results for a single Fund share. Total return shows how much your investment in
the Fund increased or decreased during each period, assuming you reinvested all
dividends and distributions. Except as otherwise noted, PricewaterhouseCoopers
LLP, independent accountants, audited this information. Their report is included
in the Funds' annual report, which is available without charge upon request.
- --------------------------------------------------------------------------------
BERGER INFORMATION TECHNOLOGY FUND ~ INVESTOR SHARES
For a Share Outstanding Throughout the Period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM JULY 2, 1999(1)
TO SEPTEMBER 30, 1999
- ---------------------------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period $53.47
From investment operations
Net investment income (loss) (0.00)(5)
Net realized and unrealized gains (losses) on investments
and foreign currency transactions 3.99
Total from investment operations 3.99
Net asset value, end of period $57.46
Total Return(2) 7.46%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $4,811
Net expense ratio to average net assets(3) 1.83%(4)
Ratio of net income (loss) to average net assets (1.58)%(4)
Gross expense ratio to average net assets 2.16%(4)
Portfolio turnover rate(2) 31%
</TABLE>
1. Commencement of investment operations for Investor Shares.
2. Not annualized.
3. Net expenses represent gross expenses reduced by fees waived and/or
reimbursed by the Advisor.
4. Annualized.
5. Amount represents less than $0.01 per share.
<PAGE>
38
- --------------------
FINANCIAL HIGHLIGHTS
FOR THE BERGER
FUNDS FAMILY
- --------------------------------------------------------------------------------
BERGER INFORMATION TECHNOLOGY FUND
SUPPLEMENTAL FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Period
- --------------------------------------------------------------------------------
The following financial highlights are for the Fund for periods ending
February 28, 1998 and 1999, and for the period from March 1, 1999 to July 1,
1999, prior to the Fund's reorganization. Prior to the Fund's reorganization
on July 2, 1999, the Fund was known as the InformationTech 100 -Registered
Trademark- Fund. At the time of the reorganization, the Fund adopted share
classes and first began offering the Investor Shares. Therefore, the 0.25%
12b-1 fee paid by the Investor Shares is not reflected in the data on the
table. Unless otherwise noted, this information was audited by the Fund's
prior independent accountants. Their report appears in the 1999 Annual Report
to Shareholders of the InformationTech 100-Registered Trademark- Fund and
is available from the Fund without charge upon request. The information for
the period March 1, 1999 to July 1, 1999 is unaudited.
<TABLE>
<CAPTION>
PERIOD FROM
MARCH 1, 1999 PERIOD FROM
TO JULY 1, 1999 YEAR ENDED APRIL 8, 1997(1)
(UNAUDITED) FEBRUARY 28, 1999 TO FEBRUARY 28, 1998
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $44.36 $30.15 $20.00
From investment operations
Net investment income (loss) (0.19) (0.31) (0.10)
Net realized and unrealized gains (losses) on
investments and foreign currency transactions 10.02 14.52 10.25
Total from investment operations 9.83 14.21 10.15
Less dividends and distributions
Distributions (from capital gains) (0.72) -- --
Total dividends and distributions (0.72) -- --
Net asset value, end of period $53.47 $44.36 $30.15
Total Return(2) 20.54% 47.13% 50.75%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $18,101 $12,446 $2,674
Net expense ratio to average net assets(3) 1.48%(4) 1.50% 1.50%(4)
Ratio of net income (loss) to average net assets (1.22)%(4) (1.19)% (1.01)%(4)
Gross expense ratio to average net assets 2.03%(4) 2.67% 12.17%(4)
Portfolio turnover rate(2) 11% 35% 33%
</TABLE>
1. Commencement of investment operations for the Fund.
2. Not annualized
3. Net expenses represent gross expenses reduced by fees waived and/or
reimbursed by the Advisor.
4. Annualized.
<PAGE>
39
--------------------
FINANCIAL HIGHLIGHTS
FOR THE BERGER
FUNDS FAMILY
- --------------------------------------------------------------------------------
BERGER NEW GENERATION FUND ~ INVESTOR SHARES
For a Share Outstanding Throughout the Period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM MARCH 29,
YEARS ENDED SEPTEMBER 30, 1996(1) TO SEPTEMBER 30,
1999 1998 1997 1996
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $12.66 $14.72 $11.82 $10.00
From investment operations
Net investment income (loss) (0.00)(6) -- (0.13) 0.56
Net realized and unrealized gains (losses) on investments
and foreign currency transactions 13.61 (2.06) 3.64 1.26
Total from investment operations 13.61 (2.06) 3.51 1.82
Less dividends and distributions
Dividends (from net investment income) -- -- (0.61) --
Distributions (from capital gains) (0.50) -- -- --
Total dividends and distributions (0.50) -- (0.61) --
Net asset value, end of period $25.77 $12.66 $14.72 $11.82
Total Return(2) 110.82% (13.99)% 31.53% 18.20%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $330,938 $113,693 $190,164 $116,912
Net expense ratio to average net assets(3) 1.54% 1.72% 1.89% 1.90%(4)
Ratio of net income (loss) to average net assets (1.29)% (1.37)% (1.51)% 12.35%(4)
Gross expense ratio to average net assets 1.54% 1.72% 1.89% 2.09%(4)
Portfolio turnover rate(2) 168% 243% 184% 474%(5)
</TABLE>
1. Commencement of investment operations for Investor Shares.
2. Not annualized.
3. Net expenses represent gross expenses reduced by fees waived and/or
reimbursed by the Advisor.
4. Annualized.
5. Portfolio turnover was greater than anticipated during this period due to
active trading undertaken in response to market conditions at a time when the
Fund's assets were still relatively small and before the Fund was fully
invested.
6. Amount represents less than $0.01 per share.
- --------------------------------------------------------------------------------
BERGER SELECT FUND
For a Share Outstanding Throughout the Period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED DECEMBER 31, 1997(1)
SEPTEMBER 30, 1999 TO SEPTEMBER 30, 1998
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $13.26 $10.00
From investment operations
Net investment income (loss) 0.01 0.07
Net realized and unrealized gains (losses) on investments
and foreign currency transactions 6.80 3.19
Total from investment operations 6.81 3.26
Less dividends and distributions
Dividends (from net investment income) (0.05) --
Dividends (in excess of net investment income) (0.01) --
Distributions (from capital gains) (0.84) --
Total dividends and distributions (0.90)
Net asset value, end of period $19.17 $13.26
Total Return(2) 53.06% 32.60%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $101,352 $41,571
Net expense ratio to average net assets(3) 1.29% 1.48%(5)
Ratio of net income (loss) to average net assets 0.27% 1.13%(5)
Gross expense ratio to average net assets 1.29% 1.48%(5)
Portfolio turnover rate(2) 696% 1486%(4)
</TABLE>
1. Commencement of investment operations.
2. Not annualized.
3. Net expenses represent gross expenses reduced by fees waived and/or
reimbursed by the Advisor.
4. Portfolio turnover was greater than expected during this period due to active
trading undertaken in response to market conditions at a time when the Fund's
assets were still relatively small and before the Fund was fully invested.
5. Annualized.
<PAGE>
40
- --------------------
FINANCIAL HIGHLIGHTS
FOR THE BERGER
FUNDS FAMILY
- -----------------------------------------------------------------------
BERGER SMALL COMPANY GROWTH FUND ~ INVESTOR SHARES
For a Share Outstanding Throughout the Period
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $3.61 $5.33 $4.74 $3.61 $2.74
From investment operations
Net investment income (loss) (0.00)(1) -- (0.05) (0.03) (0.02)
Net realized and unrealized gains (losses) on
investments and foreign currency transactions 1.95 (1.24) 0.84 1.16 0.89
Total from investment operations 1.95 (1.24) 0.79 1.13 0.87
Less dividends and distributions
Dividends (from net investment income) -- -- -- -- (0.00)(1)
Distributions (from capital gains) (0.70) (0.48) (0.20) -- --
Total dividends and distributions (0.70) (0.48) (0.20) -- --
Net asset value, end of period $4.86 $3.61 $5.33 $4.74 $3.61
Total Return 62.78% (24.70)% 17.68% 31.30% 31.90%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $675,637 $561,741 $902,685 $871,467 $522,667
Net expense ratio to average net assets(2) 1.60% 1.48% 1.67% 1.68% 1.89%
Ratio of net income (loss) to average net assets (1.21)% (1.01)% (1.09)% (0.97)% (0.74)%
Gross expense ratio to average net assets 1.60% 1.59% 1.67% 1.68% 1.89%
Portfolio turnover rate 128% 97% 111% 91% 109%
</TABLE>
1. Amount represents less than $0.01 per share.
2. Net expenses represent gross expenses reduced by fees waived and/or
reimbursed by the Advisor.
- --------------------------------------------------------------------------------
BERGER SMALL CAP VALUE FUND ~ INVESTOR SHARES
For a Share Outstanding Throughout the Period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM
YEARS ENDED SEPTEMBER 30, FEBRUARY 14, 1997(1)
1999 1998 TO SEPTEMBER 30, 1997
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $17.58 $22.28 $17.24
From investment operations
Net investment income (loss) (0.02) 0.42 0.03
Net realized and unrealized gains (losses) on investments
and foreign currency transactions 4.26 (2.58) 5.01
Total from investment operations 4.24 (2.16) 5.04
Less dividends and distributions
Dividends (from net investment income) (0.07) (0.17) --
Distributions (from capital gains) (0.81) (2.37) --
Total dividends and distributions (0.88) (2.54) --
Net asset value, end of period $20.94 $17.58 $22.28
Total Return(2) 24.69% (10.98)% 29.23%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $374,063 $108,465 $55,211
Net expense ratio to average net assets(3) 1.37% 1.56% 1.66%(4)
Ratio of net income (loss) to average net assets 1.36% 0.87% 0.60%(4)
Gross expense ratio to average net assets 1.37% 1.56% 1.66%(4)
Portfolio turnover rate(2) 66% 69% 81%
</TABLE>
1. Commencement of investment operations for Investor Shares.
2. Not annualized.
3. Net expenses represent gross expenses reduced by fees waived and/or
reimbursed by the Advisor.
4. Annualized.
<PAGE>
41
--------------------
FINANCIAL HIGHLIGHTS
FOR THE BERGER
FUNDS FAMILY
- --------------------------------------------------------------------------------
The following supplemental financial highlights are for the Berger Small Cap
Value Fund for periods before February 14, 1997, when the Fund first adopted
share classes and began offering the Investor Shares. Therefore, the 0.25% 12b-1
fee paid by the Investor Shares is not reflected in the data on the table.
Except for information for the period January 1, 1997, through February 14,
1997, the information in the table was audited by the Fund's prior independent
accountants. The information for the period January 1, 1997, through February
14, 1997, is unaudited.
- --------------------------------------------------------------------------------
BERGER SMALL CAP VALUE FUND
SUPPLEMENTAL FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM
JANUARY 1,
1997 TO
FEBRUARY 14,
1997(2) YEARS ENDED DECEMBER 31,
(UNAUDITED) 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987(1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Data:(3)
Net asset value, beginning
of period $16.48 $14.57 $12.75 $13.99 $13.39 $11.39 $9.23 $12.19 $11.21 $10.06 $11.33
From investment operations
Net investment income
(loss) (0.02) 0.12 0.09 (0.01) 0.03 0.09 0.14 0.28 0.23 0.24 0.21
Net realized and
unrealized gains
(losses) on
investments 0.78 3.62 3.23 0.91 2.14 2.14 2.16 (2.95) 2.71 1.77 (0.29)
Total from investment
operations 0.76 3.74 3.32 0.90 2.17 2.23 2.30 (2.67) 2.94 2.01 (0.08)
Less dividends and
distributions
Dividends (from net
Investment income) 0.00 (0.11) (0.09) 0.00 (0.03) (0.10) (0.14) (0.29) (0.22) (0.24) (0.20)
Distributions (from
capital gains) 0.00 (1.72) (1.41) (2.14) (1.54) (0.13) 0.00 0.00 (1.74) (0.62) (0.99)
Total dividends and
distributions 0.00 (1.83) (1.50) (2.14) (1.57) (0.23) (0.14) (0.29) (1.96) (0.86) (1.19)
Net asset value, end of
period $17.24 $16.48 $14.57 $12.75 $13.99 $13.39 $11.39 $9.23 $12.19 $11.21 $10.06
Total Return(4) 4.61% 25.58% 26.07% 6.74% 16.25% 19.59% 25.01% (21.94)% 26.44% 20.09% (0.68)%
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $38,622 $36,041 $31,833 $18,270 $16,309 $14,007 $11,940 $9,839 $13,576 $9,976 $6,748
Ratio of net income (loss)
to average net assets (0.87)%(5) 0.69% 0.64% (0.04)% 0.18% 0.73% 1.24% 2.34% 1.85% 2.33% 1.87%(5)
Gross expenses to average
net assets 2.04%(5) 1.48% 1.64% 1.43% 1.31% 1.41% 1.52% 1.84% 1.78% 1.44% 1.69%(5)
Portfolio turnover rate 27% 69% 90% 125% 108% 105% 130% 146% 118% 103% 189%
</TABLE>
1. Covers the period from February 1, 1987 to December 31, 1987. Effective
October 20, 1987, the Fund became publicly registered under the Investment
Company Act of 1940. Prior thereto, its shares were not publicly offered.
2. Commencement of Investor Shares class.
3. All per share amounts prior to December 31, 1994 have been adjusted for a 10
for 1 share split which occurred September 30, 1994.
4. Not annualized for periods of less than one full year.
5. Annualized.
<PAGE>
42
- --------------------
FINANCIAL HIGHLIGHTS
FOR THE BERGER
FUNDS FAMILY
- --------------------------------------------------------------------------------
BERGER MID CAP GROWTH FUND
For a Share Outstanding Throughout the Period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED DECEMBER 31,1997(1)
SEPTEMBER 30,1999 TO SEPTEMBER 30, 1998
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.93 $10.00
From investment operations --
Net investment income (loss) (0.00)(5)
Net realized and unrealized gains (losses) on investments
and foreign currency transactions 11.10 0.93
Total from investment operations 11.10 0.93
Less dividends and distributions
Distributions (from capital gains) (0.21) --
Total dividends and distributions (0.21) --
Net asset value, end of period $21.82 $10.93
Total Return(2) 102.76% 9.30%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $25,550 $4,283
Net expense ratio to average net assets(3) 1.78% 2.00%(4)
Ratio of net income (loss) to average net assets (1.03)% (0.82)%(4)
Gross expense ratio to average net assets 1.78% 2.46(4)
Portfolio turnover rate(2) 178% 262%
</TABLE>
1. Commencement of investment operations.
2. Not annualized.
3. Net expenses represent gross expenses reduced by fees waived and/or
reimbursed by the Advisor.
4. Annualized.
5. Amount represents less than $0.01 per share.
- --------------------------------------------------------------------------------
BERGER MID CAP VALUE FUND
For a Share Outstanding Throughout the Period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED AUGUST 12, 1998(1)
SEPTEMBER 30, 1999 TO SEPTEMBER 30, 1998
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $9.33 $10.00
From investment operations
Net investment income (loss) 0.07 0.03
Net realized and unrealized gains (losses) on investments
and foreign currency transactions 2.83 (0.70)
Total from investment operations 2.90 (0.67)
Less dividends and distributions
Dividends (from net investment income) (0.06) --
Total dividends and distributions (0.06) --
Net asset value, end of period $12.17 $9.33
Total Return(2) 31.12% (6.70)%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $22,918 $19,710
Net expense ratio to average net assets(3) 1.62% 1.68%(4)
Ratio of net income (loss) to average net assets 0.54% 2.30%(4)
Gross expense ratio to average net assets 1.62% 1.68%(4)
Portfolio turnover rate(2) 154% 25%
</TABLE>
1. Commencement of investment operations.
2. Not annualized.
3. Net expenses represent gross expenses reduced by fees waived and/or
reimbursed by the Advisor.
4. Annualized.
<PAGE>
43
--------------------
FINANCIAL HIGHLIGHTS
FOR THE BERGER
FUNDS FAMILY
- --------------------------------------------------------------------------------
BERGER GROWTH FUND
For a Share Outstanding Throughout the Period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
1999 1998 1997(1) 1996(1) 1995(1)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.99 $21.51 $19.64 $18.89 $15.96
From investment operations
Net investment income (loss) (0.00)(2) -- (0.09) (0.08) (0.04)
Net realized and unrealized gains (losses) on
investments and foreign currency transactions 4.55 (2.57) 4.73 1.76 2.97
Total from investment operations 4.55 (2.57) 4.64 1.68 2.93
Less dividends and distributions
Distributions (from capital gains) (0.98) (6.95) (2.77) (0.93) --
Total dividends and distributions (0.98) (6.95) (2.77) (0.93) --
Net asset value, end of period $15.56 $11.99 $21.51 $19.64 $18.89
Total Return 38.96% (16.08)% 26.50% 9.36% 18.36%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $1,333,794 $1,286,828 $1,889,048 $2,012,706 $2,205,678
Net expense ratio to average net assets(3) 1.36% 1.38% 1.41% 1.42% 1.49%
Ratio of net income (loss) to average net assets (0.38)% (0.38)% (0.40)% (0.43)% (0.28)%
Gross expense ratio to average net assets 1.36% 1.38% 1.41% 1.42% 1.49%
Portfolio turnover rate 274% 280% 200% 122% 114%
</TABLE>
1. Per share calculations for the period were based on average shares
outstanding.
2. Amount represents less than $0.01 per share.
3. Net expenses represent gross expenses reduced by fees waived and/or
reimbursed by the Advisor.
- --------------------------------------------------------------------------------
BERGER/BIAM INTERNATIONAL FUND
For a Share Outstanding Throughout the Period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM
YEARS ENDED NOVEMBER 7, 1996(1)
1999 SEPTEMBER 30, 1998 TO SEPTEMBER 30, 1997
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $10.06 $11.46 $10.00
From investment operations
Net investment income (loss) (0.07) 0.50(2) 0.05
Net realized and unrealized gains (losses) on
investments and foreign currency transactions 3.01 (1.46)(2) 1.41
Total from investment operations 2.94 (0.96) 1.46
Less dividends and distributions
Dividends (from net investment income) (0.47) (0.06) --
Distributions (in excess of capital gains) (0.02) (0.38) --
Total dividends and distributions (0.49) (0.44) --
Net asset value, end of period $12.51 $10.06 $11.46
Total Return(3) 29.64% (8.46)% 14.60%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $23,014 $16,515 $18,673
Net expense ratio to average net assets(4,5) 1.76% 1.80% 1.90%(6)
Ratio of net income (loss) to average net assets (0.01)% 2.20% 0.61%(6)
Gross expense ratio to average net assets(5) 1.77% 1.83% 1.99%(6)
Portfolio turnover rate(3,7) 16% 17% 17%
</TABLE>
1. Commencement of investment operations.
2. Restated.
3. Not annualized.
4. Net expenses represent gross expenses reduced by fees waived and/or
reimbursed by the Portfolio's Advisor.
5. Reflects the Fund's expenses plus the Fund's pro rata share of the
Portfolio's expenses.
6. Annualized.
7. Represents the portfolio turnover rate of the Portfolio. All of the
investable assets of the Fund are invested in the Portfolio.
<PAGE>
44
- --------------------
FINANCIAL HIGHLIGHTS
FOR THE BERGER
FUNDS FAMILY
- --------------------------------------------------------------------------------
The following table is based on the historical financial statements of the pool
of assets that was, in a practical sense, the predecessor to the Portfolio in
which the Berger/BIAM International Fund is invested. The total return, expense
ratios and per share data on the table have been adjusted to reflect the
increase in Fund operating expenses that was expected to occur when the pool's
assets were transferred to the Portfolio over the pool's actual operating
expenses for each period shown.
The table covers the period from the beginning of the pool through October 11,
1996, when the pool's assets were transferred to the Portfolio. The pool was not
registered with the SEC and was not subject to the investment restrictions
imposed on mutual funds. If the pool had been registered, the pool's financial
results might have been adversely affected.
- --------------------------------------------------------------------------------
INTERNATIONAL EQUITY POOL
ADJUSTED SELECTED DATA (UNAUDITED)
For a Share Outstanding Throughout the Period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
JANUARY 1, JULY 31,
1996 TO 1989(1) TO
OCTOBER 11 YEARS ENDED DECEMBER 31, DECEMBER 31,
1996(2) 1995 1994 1993 1992 1991 1990 1989
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Data:(3)
Net asset value, beginning of
period $8.94 $7.52 $8.16 $5.98 $5.43 $4.80 $5.00 $4.11
From investment operations
Net investment income (loss) 0.11 0.12 0.06 0.10 0.08 0.08 0.06 0.02
Net realized and unrealized
gain (loss) on
investments 0.95 1.30 (0.70) 2.08 0.47 0.55 (0.26) 0.87
Total from investment operations 1.06 1.42 (0.64) 2.18 0.55 0.63 (0.20) 0.89
Net asset value, end of period $10.00 $8.94 $7.52 $8.16 $5.98 $5.43 $4.80 $5.00
Total Return(3) 11.91% 18.78% (7.80)% 36.38% 10.21% 13.18% (4.11)% 21.80%
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $4,482 $5,662 $6,215 $5,495 $3,016 $2,364 $1,201 $916
Net expense ratio to average net
assets(3,4) 1.78%(5) 1.78% 1.78% 1.78% 1.78% 1.78% 1.78% 1.78%(5)
Ratio of net income (loss) to
average net assets(3) 1.11%(5) 1.03% 0.42% 0.92% 0.78% 1.26% 0.79% (0.47)%(5)
Gross expense ratio to
average net assets(3) 1.83%(5) 1.83% 1.83% 1.83% 1.83% 1.83% 1.83% 1.83%(5)
Portfolio turnover rate 30% 34% 62% 41% 36% 27% 31% 413%
</TABLE>
1. Commencement of operations of the pool.
2. Commencement of operations of the Portfolio in which the Fund is invested.
3. Adjusted to reflect the increase in expenses expected in operating the Fund,
including the Fund's pro rata share of the Portfolio's expenses, net of fee
waivers. Additionally, total return is not annualized for periods of less than
one full year.
4. Net expenses represent gross expenses less fees that would have been waived
by the Advisor of the Portfolio if the fee waiver in effect for the Portfolio
had been in effect for the pool.
5. Annualized.
<PAGE>
45
- --------------------------------------------------------------------------------
BERGER GROWTH AND INCOME FUND
For a Share Outstanding Throughout the Period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.60 $16.72 $14.06 $12.89 $11.48
From investment operations
Net investment income (loss) (0.00)(3) 0.04 0.14 0.20 0.16
Net realized and unrealized gains (losses) on
investments and foreign currency transactions 4.53 (0.30) 4.28 1.17 1.43
Total from investment operations 4.53 (0.26) 4.42 1.37 1.59
Less dividends and distributions
Dividends (from net investment income) (0.03) (0.13) (0.20) (0.18)
Dividends (in excess of net investment income) (0.01) (0.01) -- -- --
Distributions (from capital gains) (2.80) (2.82) (1.63) -- --
Total dividends and distributions (2.81) (2.86) (1.76) (0.20) (0.18)
Net asset value, end of period $15.32 $13.60 $16.72 $14.06 $12.89
Total Return 38.67% (1.60)% 34.56% 10.66% 14.05%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $379,356 $301,330 $357,023 $315,538 $354,396
Net expense ratio to average net assets(1) 1.35% 1.44% 1.51% 1.56% 1.64%
Ratio of net income (loss) to average net assets (0.22)% 0.25% 0.87% 1.39% 1.33%
Gross expense ratio to average net assets 1.35% 1.44% 1.51% 1.56% 1.64%
Portfolio turnover rate 173% 417%(2) 173% 112% 85%
</TABLE>
1. Net expenses represent gross expenses reduced by fees waived and/or
reimbursed by the Advisor.
2. Portfolio turnover was greater than anticipated during this period due to
higher than normal trading activity undertaken in response to market conditions
that existed at that time.
3. Amount represents less than $0.01 per share.
- --------------------------------------------------------------------------------
BERGER BALANCED FUND
For a Share Outstanding Throughout the Period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
1999 1998(1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $13.28 $10.00
From investment operations
Net investment income 0.23 0.22
Net realized and unrealized gains on investments
and foreign currency transactions 4.69 5.17
Total from investment operations 4.92 5.39
Less dividends and distributions
Dividends (from net investment income) (0.23) (0.21)
Distributions (from capital gains) (1.35) (1.90)
Total dividends and distributions (1.58) (2.11)
Net asset value, end of period $16.62 $13.28
Total Return 39.41% 56.77%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $122,766 $30,721
Net expense ratio to average net assets(2) 1.23% 1.50%
Ratio of net income to average net assets 1.63% 1.81%
Gross expense ratio to average net assets 1.23% 1.57%
Portfolio turnover rate 227% 658%(3)
</TABLE>
1. The Fund had no financial highlights for the one day of operations during
the period ended September 30, 1997.
2. Net expenses represent gross expenses reduced by fees waived and/or
reimbursed by the Advisor.
3. Portfolio turnover was greater than expected during this period due to higher
than normal trading activity undertaken in response to market conditions at a
time when the Fund's assets were still relatively small and before the Fund was
fully invested.
<PAGE>
[LOGO]
Berger-Registered Trademark-
FOR MORE INFORMATION:
Additional information about the Fund's investments is available in the Funds'
semi-annual and annual reports to shareholders. The Fund's annual report
contains a discussion of the market conditions and investment strategies that
affected the Funds' performance over the past year.
You may wish to read the Statement of Additional Information (SAI) for more
information on the Funds and the securities they invest in. The SAI is
incorporated into this prospectus by reference, which means that it is
considered to be part of the prospectus.
You can get free copies of the annual and semi-annual reports and the SAI,
request other information or get answers to your questions about the Funds by
writing or calling the Funds at:
Berger Funds P.O. Box 219958 Kansas City, MO 64121-9958
(800) 333-1001
bergerfunds.com
Text-only versions of Fund documents can be viewed online or downloaded from the
EDGAR database on the SEC's web site at sec.gov.
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington DC. For information on the operation of the Public Reference Room,
call (202) 942-8090. Copies of documents may also be obtained, after paying a
duplicating fee, by sending your request to the following e-mail address:
[email protected], or by writing to the SEC's Public Reference Section,
Washington, DC 20549-6009.
INVESTMENT COMPANY ACT FILE NUMBERS:
<TABLE>
<S> <C> <C> <C>
Berger Investment Portfolio Trust 811-8046 Berger Omni Investment Trust 811-4273
- - Berger Information Technology - Berger Small Cap Value Fund -
Fund - Investor Shares Investor Shares
- - Berger New Generation Fund - Berger Growth Fund, Inc. 811-1382
Investor Shares - Berger Growth Fund
- - Berger Select Fund Berger/BIAM Worldwide Funds Trust 811-07669
- - Berger Small Company Growth Fund - - Berger/BIAM International Fund
Investor Shares Berger Growth and Income Fund, Inc. 811-1383
- - Berger Mid Cap Growth Fund - Berger Growth and Income Fund
- - Berger Mid Cap Value Fund
- - Berger Balanced Fund
</TABLE>
COMPROS
<PAGE>
BERGER INFORMATION TECHNOLOGY FUND - INVESTOR SHARES
A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST
BERGER NEW GENERATION FUND - INVESTOR SHARES
A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST
BERGER SELECT FUND
A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST
BERGER SMALL COMPANY GROWTH FUND - INVESTOR SHARES
A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST
BERGER SMALL CAP VALUE FUND - INVESTOR SHARES
A SERIES OF BERGER OMNI INVESTMENT TRUST
BERGER MID CAP GROWTH FUND
A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST
BERGER MID CAP VALUE FUND
A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST
BERGER GROWTH FUND
BERGER/BIAM INTERNATIONAL FUND
A SERIES OF BERGER/BIAM WORLDWIDE FUNDS TRUST
BERGER GROWTH AND INCOME FUND
BERGER BALANCED FUND
A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST
STATEMENT OF ADDITIONAL INFORMATION
SHAREHOLDER SERVICES: 1-800-551-5849
This Statement of Additional Information ("SAI") is not a
prospectus. It relates to the Prospectus for the Berger Funds listed above (the
"Funds"), dated January 31, 2000, as it may be amended or supplemented from time
to time, which may be obtained by writing the Funds at P.O. Box 5005, Denver,
Colorado 80217, or calling 1-800-333-1001.
The Funds are all "no-load" mutual funds, meaning that a buyer
pays no commissions or sales loads when buying or redeeming shares of the Funds,
although each Fund pays certain costs of distributing its shares. See "Section
5. Expenses of the Funds -- 12b-1 Plans" below. This SAI describes each of these
Funds which have many features in common, but may have different investment
objectives and different investment emphases.
The following financial statements of the Funds are
incorporated herein by reference:
The audited financial statements of each of the Funds for the
fiscal year or period ended September 30, 1999, from the Funds' 1999 Annual
report to Shareholders, dated September 30, 1999.
Copies of the Annual Report are available, without charge,
upon request, by calling 1-800-333-1001.
DATED JANUARY 31, 2000
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
&
CROSS-REFERENCES TO PROSPECTUS
- ------------------------------------------------------------------------------------------------------------------------
SECTION PAGE CROSS-REFERENCES TO
NO. RELATED DISCLOSURES
IN PROSPECTUS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Introduction 1 Table of Contents
- ------------------------------------------------------------------------------------------------------------------------
1. Investment Strategies and Risks of the Funds. 1 Berger Funds; Investment Techniques,
Securities and the Associated Risks
- ------------------------------------------------------------------------------------------------------------------------
2. Investment Restrictions 16 Berger Funds; Investment Techniques,
Securities and the Associated Risks
- ------------------------------------------------------------------------------------------------------------------------
3. Management of the Funds 22 Organization of the Berger Funds Family
- ------------------------------------------------------------------------------------------------------------------------
4. Investment Advisors and Sub-Advisors 27 Organization of the Berger Funds Family
- ------------------------------------------------------------------------------------------------------------------------
5. Expenses of the Funds 33 Berger Funds; Organization of the Berger Funds
Family; Financial Highlights for the Berger
Funds Family
- ------------------------------------------------------------------------------------------------------------------------
6. Brokerage Policy 40 Organization of the Berger Funds Family
- ------------------------------------------------------------------------------------------------------------------------
7. How to Purchase and Redeem Shares in the Funds 44 Buying Shares; Selling (Redeeming) Shares
- ------------------------------------------------------------------------------------------------------------------------
8. How the Net Asset Value is Determined 45 Your Share Price
- ------------------------------------------------------------------------------------------------------------------------
9. Income Dividends, Capital Gains Distributions and Tax 45 Distributions and Taxes
Treatment
- ------------------------------------------------------------------------------------------------------------------------
10. Suspension of Redemption Rights 47 Other Information About Your Account
- ------------------------------------------------------------------------------------------------------------------------
11. Tax-Sheltered Retirement Plans 47 Tax-Sheltered Retirement Plans
- ------------------------------------------------------------------------------------------------------------------------
12. Exchange Privilege and Systematic Withdrawal 49 Exchanging Shares
Plan
- ------------------------------------------------------------------------------------------------------------------------
13. Performance Information 50 Financial Highlights for the Berger Funds
Family
- ------------------------------------------------------------------------------------------------------------------------
14. Additional Information 53 Organization of the Berger Funds Family;
Special Fund Structures
- ------------------------------------------------------------------------------------------------------------------------
Financial Information 59 Financial Highlights
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
-i-
<PAGE>
INTRODUCTION
The Funds described in this SAI are all mutual funds, or
open-end, management investment companies. All of the Funds are diversified
funds, except the Berger Select Fund. See below under "Non-Diversification" in
Section 1 for further information concerning the Berger Select Fund. Although
each Fund is offering only its own shares and is not participating in the sale
of the shares of the other Funds, it is possible that a Fund might become liable
for any misstatement, inaccuracy or incomplete disclosure in the Prospectus or
SAI concerning the other Funds.
1. INVESTMENT STRATEGIES AND RISKS OF THE FUNDS
The Prospectus describes the investment objective of each of
the Funds and the principal investment policies and strategies used to achieve
that objective. It also describes the principal risks of investing in each Fund.
This section contains supplemental information concerning the
types of securities and other instruments in which the Funds may invest, the
investment policies and portfolio strategies that the Funds may utilize and
certain risks attendant to those investments, policies and strategies. For the
Berger/BIAM International Fund, the term "Fund" in this Section 1 should be read
to mean the Berger/BIAM International Portfolio (the "Portfolio"), in which all
the investable assets of the Fund are invested.
COMMON AND PREFERRED STOCKS. Stocks represent shares of
ownership in a company. Generally, preferred stock has a specified dividend and
ranks after bonds and before common stocks in its claim on income for dividend
payments and on assets should the company be liquidated. After other claims are
satisfied, common stockholders participate in company profits on a pro-rata
basis. Profits may be paid out in dividends or reinvested in the company to help
it grow. Increases and decreases in earnings are usually reflected in a
company's stock price, so common stocks generally have the greatest appreciation
and depreciation potential of all corporate securities. While most preferred
stocks pay dividends, any of the Funds may purchase preferred stock where the
issuer has omitted, or is in danger of omitting, payment of its dividends. Such
investments would be made primarily for their capital appreciation potential.
All investments in stocks are subject to market risk, meaning that their prices
may move up and down with the general stock market, and that such movements
might reduce their value.
DEBT SECURITIES. Debt securities (such as bonds or debentures)
are fixed-income securities which bear interest and are issued by corporations
or governments. The issuer has a contractual obligation to pay interest at a
stated rate on specific dates and to repay principal on a specific maturity
date. In addition to market risk, debt securities are generally subject to two
other kinds of risk: credit risk and interest rate risk. Credit risk refers to
the ability of the issuer to meet interest or principal payments as they come
due. The lower the rating given a security by a rating service (such as Moody's
Investor Service ("Moody's") and Standard & Poor's ("S&P")), the greater the
credit risk the rating service perceives with respect to that security. None of
the Funds will purchase any nonconvertible securities rated below investment
grade (Ba or lower by Moody's, BB or lower by S&P). In cases where the ratings
assigned by more than one rating agency differ, the Funds will consider the
security as rated in the higher category. If nonconvertible securities purchased
by a Fund are downgraded to below investment grade following purchase, the
directors or trustees of the Fund, in consultation with the Fund's advisor or
sub-advisor, will determine what action, if any, is appropriate in light of all
relevant circumstances. For a further discussion of debt security ratings, see
Appendix A to this SAI.
Interest rate risk refers to the fact that the value of
fixed-income securities (like debt securities) generally fluctuates in response
to changes in interest rates. A decrease in interest rates will generally result
in an increase in the price of fixed-income securities held by a Fund.
Conversely, during periods of rising interest rates, the value of fixed-income
securities held by a Fund will generally decline. Longer-term securities are
generally more sensitive to interest rate changes and are more volatile than
shorter-term securities, but they generally offer higher yields to compensate
investors for the associated risks.
Certain debt securities can also present prepayment risk. For
example, a security may contain redemption and call provisions. If an issuer
exercises these provisions when interest rates are declining, the Fund could
sustain investment losses as well as have to reinvest the proceeds from the
security at lower interest rates, resulting in a decreased return for the Fund.
-1-
<PAGE>
CONVERTIBLE SECURITIES. The Funds may also purchase debt or
equity securities which are convertible into common stock when the Fund's
advisor or sub-advisor believes they offer the potential for a higher total
return than nonconvertible securities. While fixed-income securities generally
have a priority claim on a corporation's assets over that of common stock, some
of the convertible securities which the Funds may hold are high-yield/high-risk
securities that are subject to special risks, including the risk of default in
interest or principal payments which could result in a loss of income to the
Fund or a decline in the market value of the securities. Convertible securities
often display a degree of market price volatility that is comparable to common
stocks. The credit risk associated with convertible securities generally is
reflected by their ratings by organizations such as Moody's or S&P or a similar
determination of creditworthiness by the Fund's advisor or sub-advisor. The
Funds have no pre-established minimum quality standards for convertible
securities and may invest in convertible securities of any quality, including
lower rated or unrated securities. However, the Funds will not invest in any
security in default at the time of purchase, and each of the Funds will invest
less than 20% of the market value of its assets at the time of purchase in
convertible securities rated below investment grade. If convertible securities
purchased by a Fund are downgraded following purchase, or if other circumstances
cause 20% or more of a Fund's assets to be invested in convertible securities
rated below investment grade, the directors or trustees of the Fund, in
consultation with the Fund's advisor or sub-advisor, will determine what action,
if any, is appropriate in light of all relevant circumstances. For a further
discussion of debt security ratings, see Appendix A to this SAI. Convertible
securities will be included in the 25% of total assets the Berger Balanced Fund
will keep in fixed-income senior securities. However, only that portion of their
value attributable to their fixed-income characteristics will be used in
calculating the 25%.
ZEROS/STRIPS. Each of the Funds, except the Berger New
Generation Fund, the Berger Small Company Growth Fund, the Berger Small Cap
Value Fund and the Berger/BIAM International Fund, may invest in zero coupon
bonds or in "strips." Zero coupon bonds do not make regular interest payments;
rather, they are sold at a discount from face value. Principal and accreted
discount (representing interest accrued but not paid) are paid at maturity.
"Strips" are debt securities that are stripped of their interest coupon after
the securities are issued, but otherwise are comparable to zero coupon bonds.
The market values of "strips" and zero coupon bonds generally fluctuate in
response to changes in interest rates to a greater degree than do
interest-paying securities of comparable term and quality.
SECURITIES OF SMALLER COMPANIES. Each of the Funds may invest
in securities of companies with small or mid-sized market capitalizations.
Market capitalization is defined as total current market value of a company's
outstanding common stock. Investments in companies with smaller market
capitalizations may involve greater risks and price volatility (that is, more
abrupt or erratic price movements) than investments in larger, more mature
companies since smaller companies may be at an earlier stage of development and
may have limited product lines, reduced market liquidity for their shares,
limited financial resources or less depth in management than larger or more
established companies. Smaller companies also may be less significant factors
within their industries and may have difficulty withstanding competition from
larger companies. While smaller companies may be subject to these additional
risks, they may also realize more substantial growth than larger or more
established companies.
SECURITIES OF COMPANIES WITH LIMITED OPERATING HISTORIES. Each
of the Funds may invest in securities of companies with limited operating
histories. The Funds consider these to be securities of companies with a record
of less than three years' continuous operation, even including the operations of
any predecessors and parents. (These are sometimes referred to as "unseasoned
issuers.") These companies by their nature have only a limited operating history
which can be used for evaluating the company's growth prospects. As a result,
investment decisions for these securities may place a greater emphasis on
current or planned product lines and the reputation and experience of the
company's management and less emphasis on fundamental valuation factors than
would be the case for more mature companies. In addition, many of these
companies may also be small companies and involve the risks and price volatility
associated with smaller companies.
INITIAL PUBLIC OFFERINGS. The Funds may invest in a company's
securities at the time the company first offers securities to the public, that
is, at the time of the company's initial public offering or IPO. Although
companies can be any age or size at the time of their IPOs, they are often
smaller and have a limited operating history, which involve a greater potential
for the value of their securities to be impaired following the IPO. See
"Securities of Smaller Companies" and "Securities of Companies with Limited
Operating Histories" above.
Investors in IPOs can be adversely affected by substantial
dilution in the value of their shares, by sales of additional shares and by
concentration of control in existing management and principal shareholders. In
addition, all of the factors that affect stock market performance may have a
greater impact on the shares of IPO companies.
-2-
<PAGE>
The price of a company's securities may be highly unstable at
the time of its IPO and for a period thereafter due to market psychology
prevailing at the time of the IPO, the absence of a prior public market, the
small number of shares available and limited availability of investor
information. As a result of this or other factors, a Fund's advisor or
sub-advisor might decide to sell an IPO security more quickly than it would
otherwise, which may result in a significant gain or loss and greater
transaction costs to the Fund. Any gains from shares held for 12 months or less
will be treated as short-term gains, taxable as ordinary income to the Fund's
shareholders. In addition, IPO securities may be subject to varying patterns of
trading volume and may, at times, be difficult to sell without an unfavorable
impact on prevailing prices.
The effect of an IPO investment can have a magnified impact on
a Fund's performance when the Fund's asset base is small. Consequently, IPOs may
constitute a significant portion of a Fund's returns particularly when the Fund
is small. Since the number of securities issued in an IPO is limited, it is
likely that IPO securities will represent a smaller component of a Fund's assets
as it increases in size, and therefore have a more limited effect on the Fund's
performance.
There can be no assurance that IPOs will continue to be
available for any of the Funds to purchase. The number or quality of IPOs
available for purchase by a Fund may vary, decrease or entirely disappear. In
some cases, a Fund may not be able to purchase IPOs at the offering price, but
may have to purchase the shares in the aftermarket at a price greatly exceeding
the offering price, making it more difficult for the Fund to realize a profit.
The advisor's or sub-advisor's IPO trade allocation procedures
govern which Funds and other advised accounts participate in the allocation of
any IPO. See the heading "Trade Allocations" under Section 4 below. Under the
IPO allocation procedures of Berger LLC, a Fund generally will not participate
in an IPO if the securities available for allocation to the Fund are
insignificant relative to the Fund's net assets. As a result, any Fund or
account whose assets are very large (such as the Berger Growth Fund) is not
likely to participate in the allocation of many IPOs.
FOREIGN SECURITIES. Each Fund may invest in foreign
securities, which may be traded in foreign markets and denominated in foreign
currency. The Funds' investments may also include American Depositary Receipts
(ADRs), European Depositary Receipts (EDRs) which are similar to ADRs, in bearer
form, designed for use in the European securities markets, and in Global
Depositary Receipts (GDRs).
Investments in foreign securities involve some risks that are
different from the risks of investing in securities of U.S. issuers, such as the
risk of adverse political, social, diplomatic and economic developments and,
with respect to certain countries, the possibility of expropriation, taxes
imposed by foreign countries or limitations on the removal of monies or other
assets of the Funds. Moreover, the economies of individual foreign countries
will vary in comparison to the U.S. economy in such respects as growth of gross
domestic product, rate of inflation, capital reinvestment, resources,
self-sufficiency and balance of payments position. Securities of some foreign
companies, particularly those in developing countries, are less liquid and more
volatile than securities of comparable domestic companies. A developing country
generally is considered to be in the initial stages of its industrialization
cycle. Investing in the securities of developing countries may involve exposure
to economic structures that are less diverse and mature, and to political
systems that can be expected to have less stability than developed countries.
There also may be less publicly available information about
foreign issuers and securities than domestic issuers and securities, and foreign
issuers generally are not subject to accounting, auditing and financial
reporting standards, requirements and practices comparable to those applicable
to domestic issuers. Also, there is generally less government supervision and
regulation of exchanges, brokers, financial institutions and issuers in foreign
countries than there is in the U.S. Foreign financial markets typically have
substantially less volume than U.S. markets. Foreign markets also have different
clearance and settlement procedures and, in certain markets, delays or other
factors could make it difficult to effect transactions, potentially causing a
Fund to experience losses or miss investment opportunities.
Costs associated with transactions in foreign securities are
generally higher than with transactions in U.S. securities. A Fund will incur
greater costs in maintaining assets in foreign jurisdictions and in buying and
selling foreign securities generally, resulting in part from converting foreign
currencies into U.S. dollars. In addition, a Fund might have greater difficulty
taking appropriate legal action with respect to foreign investments in non-U.S.
courts than with respect to domestic issuers in U.S. courts, which may heighten
the risk of possible losses through the holding of securities by custodians and
securities depositories in foreign countries.
-3-
<PAGE>
For any Fund invested in securities denominated or quoted in
currencies other than the U.S. dollar, changes in foreign currency exchange
rates will affect the value of the investments in its portfolio and the
unrealized appreciation or depreciation of investments insofar as U.S. investors
are concerned. If the foreign currency in which a security is denominated
appreciates against the U.S. dollar, the dollar value of the security will
increase. Conversely, a decline in the exchange rate of the foreign currency
against the U.S. dollar would adversely affect the dollar value of the foreign
securities. Foreign currency exchange rates are determined by forces of supply
and demand on the foreign exchange markets, which are in turn affected by the
international balance of payments and other economic and financial conditions,
government intervention, speculation and other factors.
PASSIVE FOREIGN INVESTMENT COMPANIES (PFICs). The Funds may
purchase the securities of certain companies considered Passive Foreign
Investment Companies (PFICs) under U.S. tax laws. For certain types of PFICs, in
addition to bearing their proportionate share of a Fund's expenses (management
fees and operating expenses), shareholders will also indirectly bear similar
expenses of such PFIC. PFIC investments also may be subject to less favorable
U.S. tax treatment, as discussed in Section 9 below.
ILLIQUID AND RESTRICTED SECURITIES. Each of the Funds (except
the Berger Small Cap Value Fund) is authorized to invest in securities which are
illiquid or not readily marketable because they are subject to restrictions on
their resale ("restricted securities") or because, based upon their nature or
the market for such securities, no ready market is available. The Berger Small
Cap Value Fund is authorized to invest in illiquid securities, but not in
restricted securities. However, none of the Funds will purchase any such
security, the purchase of which would cause the Fund to invest more than 15%
(10% in the case of the Berger Small Cap Value Fund) of its net assets, measured
at the time of purchase, in illiquid securities. Investments in illiquid
securities involve certain risks to the extent that a Fund may be unable to
dispose of such a security at the time desired or at a reasonable price or, in
some cases, may be unable to dispose of it at all. In addition, in order to
resell a restricted security, a Fund might have to incur the potentially
substantial expense and delay associated with effecting registration. If
securities become illiquid following purchase or other circumstances cause more
than 15% (10% in the case of the Berger Small Cap Value Fund) of a Fund's net
assets to be invested in illiquid securities, the directors or trustees of that
Fund, in consultation with the Fund's advisor, will determine what action, if
any, is appropriate in light of all relevant circumstances.
Repurchase agreements maturing in more than seven days will be
considered as illiquid for purposes of this restriction. Pursuant to guidelines
established by the directors or trustees, a Fund's advisor or sub-advisor will
determine whether securities eligible for resale to qualified institutional
buyers pursuant to SEC Rule 144A under the Securities Act of 1933 should be
treated as illiquid investments considering, among other things, the following
factors: (1) the frequency of trades and quotes for the security; (2) the number
of dealers willing to purchase or sell the security and the number of other
potential purchasers; (3) dealer undertakings to make a market in the security;
and (4) the nature of the security and the marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers, and the
mechanics of the transfer). The liquidity of a Fund's investments in Rule 144A
securities could be impaired if qualified institutional buyers become
uninterested in purchasing these securities.
REPURCHASE AGREEMENTS. Each Fund may invest in repurchase
agreements with various financial organizations, including commercial banks,
registered broker-dealers and registered government securities dealers. A
repurchase agreement is an agreement under which a Fund acquires a debt security
(generally a debt security issued or guaranteed by the U.S. government or an
agency thereof, a banker's acceptance or a certificate of deposit) from a
commercial bank, broker or dealer, subject to resale to the seller at an agreed
upon price and date (normally, the next business day). A repurchase agreement
may be considered a loan collateralized by securities. The resale price reflects
an agreed upon interest rate effective for the period the instrument is held by
a Fund and is unrelated to the interest rate on the underlying instrument. In
these transactions, the securities acquired by a Fund (including accrued
interest earned thereon) must have a total value equal to or in excess of the
value of the repurchase agreement and are held by the Fund's custodian bank
until repurchased. In addition, the directors or trustees will establish
guidelines and standards for review by the investment advisor of the
creditworthiness of any bank, broker or dealer party to a repurchase agreement
with a Fund. None of the Funds will enter into a repurchase agreement maturing
in more than seven days if as a result more than 15% of the Fund's net assets
would be invested in such repurchase agreements and other illiquid securities.
These transactions must be fully collateralized at all times
by debt securities (generally a security issued or guaranteed by the U.S.
Government or an agency thereof, a banker's acceptance or a certificate of
deposit), but involve certain risks, such as credit risk to the Fund if the
other party defaults on its obligation and the Fund is delayed or prevented from
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liquidating the collateral. For example, if the other party to the agreement
defaults on its obligation to repurchase the underlying security at a time when
the value of the security has declined, a Fund may incur a loss upon disposition
of the security. If the other party to the agreement becomes insolvent and
subject to liquidation or reorganization under the Bankruptcy Code or other
laws, a court may determine that the underlying security is collateral for a
loan by a Fund not within the control of the Fund and therefore the realization
by the Fund on such collateral may automatically be stayed and delayed. Further,
it is possible that a Fund may not be able to substantiate its interest in the
underlying security and may be deemed an unsecured creditor of the other party
to the agreement. The Funds expect that these risks can be controlled through
careful monitoring procedures.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. Each Fund may
purchase and sell securities on a when-issued or delayed delivery basis.
However, none of the Funds currently intends to purchase or sell securities on a
when-issued or delayed delivery basis, if as a result more than 5% of its total
assets taken at market value at the time of purchase would be invested in such
securities. When-issued or delayed delivery transactions arise when securities
(normally, obligations of issuers eligible for investment by a Fund) are
purchased or sold by the Fund with payment and delivery taking place in the
future in order to secure what is considered to be an advantageous price or
yield. However, the yield available on a comparable security when delivery takes
place may vary from the yield on the security at the time that the when-issued
or delayed delivery transaction was entered into. Any failure to consummate a
when-issued or delayed delivery transaction may result in a Fund missing the
opportunity of obtaining a price or yield considered to be advantageous.
When-issued and delayed delivery transactions may generally be expected to
settle within one month from the date the transactions are entered into, but in
no event later than 90 days. However, no payment or delivery is made by a Fund
until it receives delivery or payment from the other party to the transaction.
When a Fund purchases securities on a when-issued basis, it
will maintain in a segregated account with its custodian cash, U.S. government
securities or other liquid assets having an aggregate value equal to the amount
of such purchase commitments, until payment is made. If necessary, additional
assets will be placed in the account daily so that the value of the account will
equal or exceed the amount of the Fund's purchase commitments.
LENDING OF PORTFOLIO SECURITIES. Each of the Funds, except the
Berger Small Cap Value Fund, the Berger Growth Fund and the Berger Growth and
Income Fund, may lend their securities to qualified institutional investors
(such as brokers, dealers or other financial organizations) who need to borrow
securities in order to complete certain transactions, such as covering short
sales, avoiding failures to deliver securities or completing arbitrage
operations. Loans of securities by a Fund will be collateralized by cash,
letters of credit, or securities issued or guaranteed by the U.S. Government or
its agencies. The collateral will equal at least 100% of the current market
value of the loaned securities, marked-to-market on a daily basis. By lending
its securities, a Fund will be attempting to generate income through the receipt
of interest on the loan which, in turn, can be invested in additional securities
to pursue the Fund's investment objective. Any gain or loss in the market price
of the securities loaned that might occur during the term of the loan would be
for the account of the Fund.
Each Fund permitted to lend its portfolio securities may lend
to qualified brokers, dealers, banks or other financial institutions, so long as
the terms, the structure and the aggregate amount of such loans are not
inconsistent with the Investment Company Act of 1940, or the Rules and
Regulations or interpretations of the Securities and Exchange Commission (the
"Commission") thereunder, which currently require that (a) the borrower pledge
and maintain with the Fund collateral consisting of cash, an irrevocable letter
of credit or securities issued or guaranteed by the United States government
having a value at all times not less than 100% of the value of the securities
loaned, (b) the borrower add to such collateral whenever the price of the
securities loaned rises (i.e., the borrower "marks to the market" on a daily
basis), (c) the loan be made subject to termination by the Fund at any time and
(d) the Fund receives reasonable interest on the loan, which interest may
include the Fund's investing cash collateral in interest bearing short-term
investments, and (e) the Fund receives all dividends and distributions on the
loaned securities and any increase in the market value of the loaned securities.
A Fund lending securities bears risk of loss in the event that
the other party to a securities lending transaction defaults on its obligations
and the Fund is delayed in or prevented from exercising its rights to dispose of
the collateral, including the risk of a possible decline in the value of the
collateral securities during the period in which the Fund seeks to assert these
rights, the risk of incurring expenses associated with asserting these rights
and the risk of losing all or a part of the income from the transaction. None of
the Funds will lend its portfolio securities if, as a result, the aggregate
value of such loans would exceed 33-1/3% of the value of the Fund's total assets
(including the value of the collateral received to secure the loan). Loan
arrangements made by a Fund will comply with all other applicable regulatory
requirements, including the rules of the New York Stock Exchange, which rules
presently require the borrower, after notice, to redeliver the securities within
the
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normal settlement time of three business days. All relevant facts and
circumstances, including creditworthiness of the broker, dealer or institution,
will be considered in making decisions with respect to the lending of
securities, subject to review by the Fund's trustees.
Although voting rights with respect to loaned securities pass
to the borrower, lending Funds retain the right to recall a security (or
terminate a loan) for the purpose of exercising the security's voting rights.
Efforts to recall loaned securities in time to exercise voting rights may be
unsuccessful, especially for foreign securities or thinly traded securities. In
addition, it is expected that loaned securities will be recalled for voting only
when the items being voted on are, in the judgment of the lending Fund's
advisor, either material to the economic value of the security or threaten to
materially impact the issuing company's corporate governance policies or
structure.
SHORT SALES. Each Fund (other than the Berger Small Cap Value
Fund and the Berger/BIAM International Fund) currently is only permitted to
engage in short sales if, at the time of the short sale, the Fund owns or has
the right to acquire an equivalent kind and amount of the security being sold
short at no additional cost (i.e., short sales "against the box"). The Berger
Small Cap Value Fund and the Berger/BIAM International Fund are not permitted to
engage in short sales at all.
In a short sale, the seller does not immediately deliver the
securities sold and is said to have a short position in those securities until
delivery occurs. To make delivery to the purchaser, the executing broker borrows
the securities being sold short on behalf of the seller. While the short
position is maintained, the seller collateralizes its obligation to deliver the
securities sold short in an amount equal to the proceeds of the short sale plus
an additional margin amount established by the Board of Governors of the Federal
Reserve. If a Fund engages in a short sale, the collateral account will be
maintained by the Fund's custodian. While the short sale is open, the Fund will
maintain in a segregated custodial account an amount of securities convertible
into or exchangeable for such equivalent securities at no additional cost. These
securities would constitute the Fund's long position.
In the past, a Fund could have made a short sale, as described
above, when it wanted to sell a security it owned at a current attractive price,
but also wished to defer recognition of gain or loss for Federal income tax
purposes and for purposes of satisfying certain tests applicable to regulated
investment companies under the Internal Revenue Code. However, federal tax
legislation has since eliminated the ability to defer recognition of gain or
loss in short sales against the box and accordingly, it is not anticipated that
any of the Funds will be engaging in these transactions unless there are further
legislative changes.
SPECIAL SITUATIONS. Each Fund may also invest in "special
situations." Special situations are companies that have recently experienced or
are anticipated to experience a significant change in structure, management,
products or services which may significantly affect the value of their
securities. Examples of special situations are companies being reorganized or
merged, companies emerging from bankruptcy, companies introducing unusual new
products or which enjoy particular tax advantages. Other examples are companies
experiencing changes in senior management, extraordinary corporate events,
significant changes in cost or capital structure or which are believed to be
probable takeover candidates. The opportunity to invest in special situations,
however, is limited and depends in part on the market's assessment of these
companies and their circumstances. By its nature, a "special situation" company
involves to some degree a break with the company's past experience. This creates
greater uncertainty and potential risk of loss than if the company were
operating according to long-established patterns. In addition, stocks of
companies in special situations may decline or not appreciate as expected if an
anticipated change or development does not occur or is not assessed by the
market as favorably as expected.
HEDGING TRANSACTIONS. Each Fund is authorized to make limited
use of certain types of futures, forwards and/or options, but only for the
purpose of hedging, that is, protecting against market risk due to market
movements that may adversely affect the value of a Fund's securities or the
price of securities that a Fund is considering purchasing. The utilization of
futures, forwards and options is also subject to policies and procedures which
may be established by the directors or trustees from time to time. In addition,
none of the Funds is required to hedge. Decisions regarding hedging are subject
to the advisor's or sub-advisor's judgment of the cost of the hedge, its
potential effectiveness and other factors the advisor or sub-advisor considers
pertinent.
A hedging transaction may partially protect a Fund from a
decline in the value of a particular security or its portfolio generally,
although hedging may also limit a Fund's opportunity to profit from favorable
price movements, and the cost of the transaction will reduce the potential
return on the security or the portfolio. Use of these instruments by a Fund
involves the potential for a loss that may exceed the amount of initial margin
the Fund would be permitted to commit to the contracts
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under its investment limitation, or in the case of a call option written by the
Fund, may exceed the premium received for the option. However, a Fund is
permitted to use such instruments for hedging purposes only, and only if the
aggregate amount of its obligations under these contracts does not exceed the
total market value of the assets the Fund is attempting to hedge, such as a
portion or all of its exposure to equity securities or its holding in a specific
foreign currency. To help ensure that the Fund will be able to meet its
obligations under its futures and forward contracts and its obligations under
options written by that Fund, the Fund will be required to maintain liquid
assets in a segregated account with its custodian bank or to set aside portfolio
securities to "cover" its position in these contracts.
The principal risks of a Fund utilizing futures transactions,
forward contracts and options are: (a) losses resulting from market movements
not anticipated by the Fund; (b) possible imperfect correlation between
movements in the prices of futures, forwards and options and movements in the
prices of the securities or currencies hedged or used to cover such positions;
(c) lack of assurance that a liquid secondary market will exist for any
particular futures or options at any particular time, and possible
exchange-imposed price fluctuation limits, either of which may make it difficult
or impossible to close a position when so desired; (d) lack of assurance that
the counterparty to a forward contract would be willing to negotiate an offset
or termination of the contract when so desired; and (e) the need for additional
information and skills beyond those required for the management of a portfolio
of traditional securities. In addition, when the Fund enters into an
over-the-counter contract with a counterparty, the Fund will assume counterparty
credit risk, that is, the risk that the counterparty will fail to perform its
obligations, in which case the Fund could be worse off than if the contract had
not been entered into.
Following is additional information concerning the futures,
forwards and options which the Berger New Generation Fund, the Berger Select
Fund, the Berger Small Company Growth Fund, the Berger Mid Cap Growth Fund, the
Berger Mid Cap Value Fund, the Berger Growth Fund, the Berger Growth and Income
Fund and the Berger Balanced Fund may utilize, provided that no more than 5% of
the Fund's net assets at the time the contract is entered into may be used for
initial margins for financial futures transactions and premiums paid for the
purchase of options. In addition, those Funds may only write call options that
are covered and only up to 25% of the Fund's total assets.
Currently, the Berger/BIAM International Fund is authorized to
utilize only forward contracts for hedging purposes and is not permitted to
utilize futures or options. Consequently, the following additional information
should be read as applicable to that Fund only to the extent it discusses
forwards. If the trustees ever authorize that Fund to utilize futures or
options, such investments would be permitted solely for hedging purposes, and
the Fund would not be permitted to invest more than 5% of its net assets at the
time of purchase in initial margins for financial futures transactions and
premiums for options. In addition, the Fund's advisor or sub-advisor may be
required to obtain bank regulatory approval before that Fund engages in futures
and options transactions.
Currently, the Berger Small Cap Value Fund is authorized to
utilize only options for hedging purposes and is not permitted to utilize
futures or forwards. Consequently, the following additional information should
be read as applicable to that Fund only to the extent it discusses options. If
the trustees ever authorize that Fund to utilize futures or forwards, such
investments would be permitted solely for hedging purposes, and the Fund would
not be permitted to invest more than 5% of its net assets at the time of
purchase in initial margins for financial futures transactions and premiums for
options.
FUTURES CONTRACTS. Financial futures contracts are
exchange-traded contracts on financial instruments (such as securities and
foreign currencies) and securities indices that obligate the holder to take or
make delivery of a specified quantity of the underlying financial instrument, or
the cash value of an index, at a future date. Although futures contracts by
their terms call for the delivery or acquisition of the underlying instruments
or a cash payment based on the mark-to-market value of the underlying
instruments, in most cases the contractual obligation will be offset before the
delivery date by buying (in the case of an obligation to sell) or selling (in
the case of an obligation to buy) an identical futures contract. Such a
transaction cancels the original obligation to make or take delivery of the
instruments.
Certain Funds may enter into contracts for the purchase or
sale for future delivery of financial instruments, such as securities and
foreign currencies, or contracts based on financial indices including indices of
U.S. Government securities, foreign government securities or equity securities.
U.S. futures contracts are traded on exchanges which have been designated
"contract markets" by the Commodity Futures Trading Commission ("CFTC") and must
be executed through a futures commission merchant (an "FCM"), or brokerage firm,
which is a member of the relevant contract market. Through their clearing
corporations, the exchanges guarantee performance of the contracts as between
the clearing members of the exchange.
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Both the buyer and seller are required to deposit "initial
margin" for the benefit of the FCM when a futures contract is entered into.
Initial margin deposits are equal to a percentage of the contract's value, as
set by the exchange on which the contract is traded, and may be maintained in
cash or other liquid assets. If the value of either party's position declines,
that party will be required to make additional "variation margin" payments to
the other party to settle the change in value on a daily basis. Initial and
variation margin payments are similar to good faith deposits or performance
bonds or party-to-party payments resulting from daily changes in the value of
the contract, unlike margin extended by a securities broker, and would be
released or credited to the Funds upon termination of the futures contract,
assuming all contractual obligations have been satisfied. Unlike margin extended
by a securities broker, initial and variation margin payments do not constitute
purchasing securities on margin for purposes of a Fund's investment limitations.
A Fund will incur brokerage fees when it buys or sells futures contracts.
In the event of the bankruptcy of the FCM that holds margin on
behalf of a Fund, the Fund may be entitled to return of margin owed to the Fund
only in proportion to the amount received by the FCM's other customers. A Fund
will attempt to minimize this risk by careful monitoring of the creditworthiness
of the FCMs with which the Fund does business and by depositing margin payments
in a segregated account with the Fund's custodian for the benefit of the FCM
when practical or otherwise required by law.
Where applicable, each Fund intends to comply with guidelines
of eligibility for exclusion from the definition of the term "commodity pool
operator" with the CFTC and the National Futures Association, which regulate
trading in the futures markets. Accordingly, a Fund will not enter into any
futures contract or option on a futures contract if, as a result, the aggregate
initial margin and premiums required to establish such positions would exceed 5%
of the Fund's net assets.
Although a Fund will hold cash and liquid assets in a
segregated account with a mark-to-market value sufficient to cover the Fund's
open futures obligations, the segregated assets will be available to the Fund
immediately upon closing out the futures position.
The acquisition or sale of a futures contract may occur, for
example, when a Fund is considering purchasing or holds equity securities and
seeks to protect itself from fluctuations in prices without buying or selling
those securities. For example, if prices were expected to decrease, the Fund
might sell equity index futures contracts, thereby hoping to offset a potential
decline in the value of equity securities in the portfolio by a corresponding
increase in the value of the futures contract position held by the Fund and
thereby preventing the Fund's net asset value from declining as much as it
otherwise would have. A Fund also could protect against potential price declines
by selling portfolio securities and investing in money market instruments.
However, the use of futures contracts as a hedging technique allows a Fund to
maintain a defensive position without having to sell portfolio securities.
Similarly, when prices of equity securities are expected to
increase, futures contracts may be bought to attempt to hedge against the
possibility of having to buy equity securities at higher prices. This technique
is sometimes known as an anticipatory hedge. Since the fluctuations in the value
of futures contracts should be similar to those of equity securities, a Fund
could take advantage of the potential rise in the value of equity securities
without buying them until the market has stabilized. At that time, the futures
contracts could be liquidated and the Fund could buy equity securities on the
cash market.
The ordinary spreads between prices in the cash and futures
markets, due to differences in the nature of those markets, are subject to
distortions. First, all participants in the futures market are subject to
initial margin and variation margin requirements. Rather than meeting additional
variation margin requirements, investors may close out futures contracts through
offsetting transactions which could distort the normal price relationship
between the cash and futures markets. Second, the liquidity of the futures
market depends on participants entering into offsetting transactions rather than
making or taking delivery. To the extent participants decide to make or take
delivery, liquidity in the futures market could be reduced and prices in the
futures market distorted. Third, from the point of view of speculators, the
margin deposit requirements in the futures market are less than margin
requirements in the securities market. Therefore, increased participation by
speculators in the futures market may cause temporary price distortions. Due to
the possibility of the foregoing distortions, a correct forecast of general
price trends by a Fund still may not result in a successful use of futures.
Futures contracts entail additional risks. Although a Fund
will only utilize futures contracts when it believes that use of such contracts
will benefit the Fund, if the Fund's investment judgment is incorrect, the
Fund's overall performance could be worse than if the Fund had not entered into
futures contracts. For example, if the Fund has hedged against the effects of a
possible decrease in prices of securities held in the Fund's portfolio and
prices increase instead, the Fund will lose
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part or all of the benefit of the increased value of these securities because of
offsetting losses in the Fund's futures positions. In addition, if the Fund has
insufficient cash, it may have to sell securities from its portfolio to meet
daily variation margin requirements. Those sales may be, but will not
necessarily be, at increased prices which reflect the rising market and may
occur at a time when the sales are disadvantageous to the Fund. Although the
buyer of an option cannot lose more than the amount of the premium plus related
transaction costs, a buyer or seller of futures contracts could lose amounts
substantially in excess of any initial margin deposits made, due to the
potential for adverse price movements resulting in additional variation margin
being required by such positions. However, each Fund utilizing futures contracts
intends to monitor its investments closely and will attempt to close its
positions when the risk of loss to the Fund becomes unacceptably high.
The prices of futures contracts depend primarily on the value
of their underlying instruments. Because there are a limited number of types of
futures contracts, it is possible that the standardized futures contracts
available to a Fund will not match exactly the Fund's current or potential
investments. A Fund may buy and sell futures contracts based on underlying
instruments with different characteristics from the securities in which it
typically invests -- for example, by hedging investments in portfolio securities
with a futures contract based on a broad index of securities -- which involves a
risk that the futures position will not correlate precisely with the performance
of the Fund's investments.
Futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments closely correlate
with a Fund's investments. Futures prices are affected by such factors as
current and anticipated short-term interest rates, changes in volatility of the
underlying instruments and the time remaining until expiration of the contract.
Those factors may affect securities prices differently from futures prices.
Imperfect correlations between a Fund's investments and its futures positions
may also result from differing levels of demand in the futures markets and the
securities markets, from structural differences in how futures and securities
are traded, and from imposition of daily price fluctuation limits for futures
contracts. A Fund may buy or sell futures contracts with a value less than or
equal to the securities it wishes to hedge or is considering purchasing. If
price changes in a Fund's futures positions are poorly correlated with its other
investments, its futures positions may fail to produce desired gains or result
in losses that are not offset by the gains in the Fund's other investments.
Because futures contracts are generally settled within a day
from the date they are closed out, compared with a longer settlement period for
most types of securities, the futures markets can provide superior liquidity to
the securities markets. Nevertheless, there is no assurance a liquid secondary
market will exist for any particular futures contract at any particular time. In
addition, futures exchanges may establish daily price fluctuation limits for
futures contracts and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days when the
price fluctuation limit is reached, it may be impossible for a Fund to enter
into new positions or close out existing positions. If the secondary market for
a futures contract is not liquid because of price fluctuation limits or
otherwise, a Fund may not be able to promptly liquidate unfavorable futures
positions and potentially could be required to continue to hold a futures
position until the delivery date, regardless of changes in its value. As a
result, a Fund's access to other assets held to cover its futures positions also
could be impaired.
OPTIONS ON FUTURES CONTRACTS. Certain Funds may buy and write
options on futures contracts for hedging purposes. An option on a futures
contract gives a Fund the right (but not the obligation) to buy or sell a
futures contract at a specified price on or before a specified date. The
purchase of a call option on a futures contract is similar in some respects to
the purchase of a call option on an individual security. Depending on the
pricing of the option compared to either the price of the futures contract upon
which it is based or the price of the underlying instrument, ownership of the
option may or may not be less risky than ownership of the futures contract or
the underlying instrument. As with the purchase of futures contracts, a Fund may
buy a call option on a futures contract to hedge against a market advance, and a
Fund might buy a put option on a futures contract to hedge against a market
decline.
The writing of a call option on a futures contract constitutes
a partial hedge against declining prices of the security or foreign currency
which is deliverable under, or of the index comprising, the futures contract. If
the futures price at the expiration of the call option is below the exercise
price, a Fund will retain the full amount of the option premium which provides a
partial hedge against any decline that may have occurred in the Fund's portfolio
holdings. If a call option a Fund has written is exercised, the Fund will incur
a loss which will be reduced by the amount of the premium it received. Depending
on the degree of correlation between change in the value of its portfolio
securities and changes in the value of the futures positions, a Fund's losses
from existing options on futures may to some extent be reduced or increased by
changes in the value of portfolio securities.
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The purchase of a put option on a futures contract is similar
in some respects to the purchase of protective put options on portfolio
securities. For example, a Fund may buy a put option on a futures contract to
hedge the Fund's portfolio against the risk of falling prices.
The amount of risk a Fund assumes when it buys an option on a
futures contract is the premium paid for the option plus related transaction
costs. In addition to the correlation risks discussed above, the purchase of an
option also entails the risk that changes in the value of the underlying futures
contract will not be fully reflected in the value of the options bought.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. A forward
contract is a privately negotiated agreement between two parties in which one
party is obligated to deliver a stated amount of a stated asset at a specified
time in the future and the other party is obligated to pay a specified invoice
amount for the assets at the time of delivery. The Funds authorized to utilize
forward contracts currently intend that they will only use forward contracts or
commitments for hedging purposes and will only use forward foreign currency
exchange contracts, although a Fund may enter into additional forms of forward
contracts or commitments in the future if they become available and advisable in
light of the Funds' objectives and investment policies. Forward contracts
generally are negotiated in an interbank market conducted directly between
traders (usually large commercial banks) and their customers. Unlike futures
contracts, which are standardized exchange-traded contracts, forward contracts
can be specifically drawn to meet the needs of the parties that enter into them.
The parties to a forward contract may agree to offset or terminate the contract
before its maturity, or may hold the contract to maturity and complete the
contemplated exchange.
The following discussion summarizes the relevant Funds'
principal uses of forward foreign currency exchange contracts ("forward currency
contracts"). A Fund may enter into forward currency contracts with stated
contract values of up to the value of the Fund's assets. A forward currency
contract is an obligation to buy or sell an amount of a specified currency for
an agreed price (which may be in U.S. dollars or a foreign currency) on a
specified date. A Fund will exchange foreign currencies for U.S. dollars and for
other foreign currencies in the normal course of business and may buy and sell
currencies through forward currency contracts in order to fix a price (in terms
of a specified currency) for securities it has agreed to buy or sell
("transaction hedge"). A Fund also may hedge some or all of its investments
denominated in foreign currency against a decline in the value of that currency
(or a proxy currency whose price movements are expected to have a high degree of
correlation with the currency being hedged) relative to the U.S. dollar by
entering into forward currency contracts to sell an amount of that currency
approximating the value of some or all of its portfolio securities denominated
in that currency ("position hedge") or by participating in futures contracts (or
options on such futures) with respect to the currency. A Fund also may enter
into a forward currency contract with respect to a currency where the Fund is
considering the purchase or sale of investments denominated in that currency but
has not yet selected the specific investments ("anticipatory hedge").
These types of hedging minimize the effect of currency
appreciation as well as depreciation, but do not eliminate fluctuations in the
underlying U.S. dollar equivalent value of the proceeds of or rates of return on
a Fund's foreign currency denominated portfolio securities. The matching of the
increase in value of a forward contract and the decline in the U.S. dollar
equivalent value of the foreign currency denominated asset that is the subject
of the hedge generally will not be precise. Shifting a Fund's currency exposure
from one foreign currency to another limits that Fund's opportunity to profit
from increases in the value of the original currency and involves a risk of
increased losses to such Fund if its investment manager's projection of future
exchange rates is inaccurate. Unforeseen changes in currency prices may result
in poorer overall performance for a Fund than if it had not entered into such
contracts.
A Fund will cover outstanding forward currency contracts by
maintaining liquid portfolio securities denominated in the currency underlying
the forward contract or the currency being hedged. To the extent that a Fund is
not able to cover its forward currency positions with underlying portfolio
securities, the Funds' custodian will segregate cash or liquid assets having a
value equal to the aggregate amount of such Fund's commitments under forward
contracts entered into. If the value of the securities used to cover a position
or the value of segregated assets declines, the Fund must find alternative cover
or segregate additional cash or liquid assets on a daily basis so that the value
of the covered and segregated assets will be equal to the amount of a Fund's
commitments with respect to such contracts.
While forward contracts are not currently regulated by the
CFTC, the CFTC may in the future assert authority to regulate forward contracts.
In such event, the Funds' ability to utilize forward contracts may be
restricted. A Fund may not always be able to enter into forward contracts at
attractive prices and may be limited in its ability to use these contracts to
hedge Fund assets. In addition, when a Fund enters into a privately negotiated
forward contract with a counterparty, the Fund assumes counterparty credit risk,
that is, the risk that the counterparty will fail to perform its obligations, in
which case the Fund
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could be worse off than if the contract had not been entered into. Unlike many
exchange-traded futures contracts and options on futures, there are no daily
price fluctuation limits with respect to forward contracts and other negotiated
or over-the-counter instruments, and with respect to those contracts, adverse
market movements could therefore continue to an unlimited extent over a period
of time. However, each Fund utilizing forward contracts intends to monitor its
investments closely and will attempt to renegotiate or close its positions when
the risk of loss to the Fund becomes unacceptably high.
OPTIONS ON SECURITIES AND SECURITIES INDICES. Certain Funds
may buy or sell put or call options and write covered call options on securities
that are traded on United States or foreign securities exchanges or
over-the-counter. Buying an option involves the risk that, during the option
period, the price of the underlying security will not increase (in the case of a
call) to above the exercise price, or will not decrease (in the case of a put)
to below the exercise price, in which case the option will expire without being
exercised and the holder would lose the amount of the premium. Writing a call
option involves the risk of an increase in the market value of the underlying
security, in which case the option could be exercised and the underlying
security would then be sold by a Fund to the option holder at a lower price than
its current market value and the Fund's potential for capital appreciation on
the security would be limited to the exercise price. Moreover, when a Fund
writes a call option on a securities index, the Fund bears the risk of loss
resulting from imperfect correlation between movements in the price of the index
and the price of the securities set aside to cover such position. Although they
entitle the holder to buy equity securities, call options to purchase equity
securities do not entitle the holder to dividends or voting rights with respect
to the underlying securities, nor do they represent any rights in the assets of
the issuer of those securities.
A call option written by a Fund is "covered" if the Fund owns
the underlying security covered by the call or has an absolute and immediate
right to acquire that security without additional cash consideration (or for
additional cash consideration held in a segregated account by its custodian)
upon conversion or exchange of other securities held in its portfolio. A call
option is also deemed to be covered if a Fund holds a call on the same security
and in the same principal amount as the call written and the exercise price of
the call held (i) is equal to or less than the exercise price of the call
written or (ii) is greater than the exercise price of the call written if the
difference is maintained by the Fund in liquid assets in a segregated account
with its custodian.
The writer of a call option may have no control when the
underlying securities must be sold. Whether or not an option expires
unexercised, the writer retains the amount of the premium. This amount, of
course, may, in the case of a covered call option, be offset by a decline in the
market value of the underlying security during the option period.
The writer of an exchange-traded call option that wishes to
terminate its obligation may effect a "closing purchase transaction." This is
accomplished by buying an option of the same series as the option previously
written. The effect of the purchase is that the writer's position will be
cancelled by the clearing corporation. If a Fund desires to sell a particular
security from the Fund's portfolio on which the Fund has written a call option,
the Fund will effect a closing transaction prior to or concurrent with the sale
of the security. However, a writer may not effect a closing purchase transaction
after being notified of the exercise of an option. An investor who is the holder
of an exchange-traded option may liquidate its position by effecting a "closing
sale transaction." This is accomplished by selling an option of the same series
as the option previously bought. There is no guarantee that either a closing
purchase or a closing sale transaction can be effected.
A Fund will realize a profit from a closing transaction if the
price of the purchase transaction is less than the premium received from writing
the option or the price received from a sale transaction is more than the
premium paid to buy the option; the Fund will realize a loss from a closing
transaction if the price of the purchase transaction is more than the premium
received from writing the option or the price received from a sale transaction
is less than the premium paid to buy the option. Because increases in the market
price of a call option will generally reflect increases in the market price of
the underlying security, any loss resulting from the repurchase of a call option
is likely to be offset in whole or in part by appreciation of the underlying
security owned by the Fund.
An option position may be closed out only where there exists a
secondary market for an option of the same series. If a secondary market does
not exist, it might not be possible to effect closing transactions in particular
options with the result that a Fund would have to exercise the options in order
to realize any profit. If a Fund is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or the Fund delivers the underlying security
upon exercise. Reasons for the absence of a liquid secondary market may include
the following: (i) there may be insufficient trading interest in certain
options, (ii) restrictions may be imposed by a national securities exchange on
which the option is traded ("Exchange") on opening or closing transactions or
both, (iii) trading halts, suspensions or other restrictions may be imposed with
respect to particular classes or series of options or underlying securities,
(iv) unusual or unforeseen circumstances may interrupt normal operations on an
Exchange, (v) the facilities of an Exchange or of the
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Options Clearing Corporation ("OCC") may not at all times be adequate to handle
current trading volume, or (vi) one or more Exchanges could, for economic or
other reasons, decide or be compelled at some future date to discontinue the
trading of options (or a particular class or series of options), in which event
the secondary market on that Exchange (or in that class or series of options)
would cease to exist, although outstanding options on that Exchange that had
been issued by the OCC as a result of trades on that Exchange would continue to
be exercisable in accordance with their terms.
In addition, when a Fund enters into an over-the-counter
option contract with a counterparty, the Fund assumes counterparty credit risk,
that is, the risk that the counterparty will fail to perform its obligations, in
which case the Fund could be worse off than if the contract had not been entered
into.
An option on a securities index is similar to an option on a
security except that, rather than the right to take or make delivery of a
security at a specified price, an option on a securities index gives the holder
the right to receive, on exercise of the option, an amount of cash if the
closing level of the securities index on which the option is based is greater
than, in the case of a call, or less than, in the case of a put, the exercise
price of the option.
A Fund may buy call options on securities or securities
indices to hedge against an increase in the price of a security or securities
that the Fund may buy in the future. The premium paid for the call option plus
any transaction costs will reduce the benefit, if any, realized by a Fund upon
exercise of the option, and, unless the price of the underlying security or
index rises sufficiently, the option may expire and become worthless to the
Fund. A Fund may buy put options to hedge against a decline in the value of a
security or its portfolio. The premium paid for the put option plus any
transaction costs will reduce the benefit, if any, realized by a Fund upon
exercise of the option, and, unless the price of the underlying security or
index declines sufficiently, the option may expire and become worthless to the
Fund.
An example of a hedging transaction using an index option
would be if a Fund were to purchase a put on a stock index, in order to protect
the Fund against a decline in the value of all securities held by it to the
extent that the stock index moves in a similar pattern to the prices of the
securities held. While the correlation between stock indices and price movements
of the stocks in which the Funds will generally invest may be imperfect, the
Funds utilizing put options expect, nonetheless, that the use of put options
that relate to such indices will, in certain circumstances, protect against
declines in values of specific portfolio securities or the Fund's portfolio
generally. Although the purchase of a put option may partially protect a Fund
from a decline in the value of a particular security or its portfolio generally,
the cost of a put will reduce the potential return on the security or the
portfolio.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The Berger
Balanced Fund may invest in certain mortgage-backed and asset-backed securities.
Mortgage-backed securities are securities that directly or indirectly represent
a participation in, or are secured by and payable from, mortgage loans secured
by real property. Asset-backed securities are similar, except that they are
backed by assets other than mortgages, such as motor vehicle installment sales
contracts, installment loan contracts, leases of various types of real and
personal property and receivables from revolving credit agreements (credit
cards).
The primary risk of any mortgage-backed or asset-backed
security is the uncertainty of the timing of cash flows from the assets
underlying the securities. See the subheading "Special Risks of Mortgage-Backed
Securities" below for more information about prepayment and extension risks.
Also, see the subheading "Asset-Backed Securities" below for more information
about asset-backed securities.
There are currently three basic types of mortgage-backed
securities: (i) those issued or guaranteed by the United States Government or
one of its agencies or instrumentalities, such as the Government National
Mortgage Association (GNMA), the Federal National Mortgage Association (FNMA)
and the Federal Home Loan Mortgage Corporation (FHLMC); (ii) those issued by
private issuers that represent an interest in or are collateralized by
mortgage-backed securities issued or guaranteed by the United States Government
or one of its agencies or instrumentalities; and (iii) those issued by private
issuers that represent an interest in or are collateralized by whole mortgage
loans or mortgage-backed securities without a government guarantee but usually
having some form of private credit enhancement.
U.S. GOVERNMENT MORTGAGE-BACKED SECURITIES. The Fund may
invest in mortgage-backed securities issued or guaranteed by GNMA, FNMA and
FHLMC. GNMA certificates are backed by the "full faith and credit" of the United
States. FNMA and FHLMC certificates are not backed by the full faith and credit
of the United States, but the issuing agency or instrumentality has the right to
borrow, to meet its obligations, from an existing line of credit with the U.S.
Treasury. The U.S. Treasury has no legal obligation to provide such line of
credit and may choose not to do so. Each of GNMA, FNMA and
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FHLMC guarantee timely distribution of interest to certificate holders. GNMA and
FNMA also guarantee timely distribution of scheduled principal payments. FHLMC
generally guarantees only the ultimate collection of principal of the underlying
mortgage loans.
COLLATERALIZED MORTGAGE OBLIGATIONS AND MULTICLASS
PASS-THROUGH SECURITIES. The Berger Balanced Fund may also invest in
collateralized mortgage obligations (CMOs). CMOs are debt obligations
collateralized by mortgage loans or mortgage pass-through securities. Typically,
CMOs are collateralized by GNMA, FNMA or FHLMC certificates, but also may be
collateralized by whole loans or private mortgage pass-through securities (such
collateral is referred to in this section as Mortgage Assets). Multiclass
pass-through securities are equity interests in a trust composed of Mortgage
Assets. Payments of principal of and interest on the Mortgage Assets, and any
reinvestment income thereon, provide the funds to pay debt service on the CMOs
or make scheduled distributions on the multiclass pass-through securities. CMOs
may be issued by agencies or instrumentalities of the U. S. Government, or by
private originators of, or investors in, mortgage loans, including savings and
loan associations, mortgage banks, commercial banks, investment banks and
special purpose subsidiaries of the foregoing. The Fund may invest in CMOs
issued by private entities only if the CMOs are rated at least investment grade
(at least BBB by S&P or Baa by Moody's) or, if unrated, are determined to be of
comparable quality.
In a CMO, a series of bonds or certificates is issued in
multiple classes. Each class of CMOs, often referred to as a "tranche," is
issued at a specific fixed or floating coupon rate and has a stated maturity or
final distribution date. Interest is paid or accrues on all classes of the CMOs
on a monthly, quarterly or semiannual basis. Certain CMOs may have variable or
floating interest rates. The principal of and interest on the Mortgage Assets
may be allocated among the several classes of a CMO series in a number of
different ways.
Generally, the purpose of the allocation of the cash flow of a
CMO to the various classes is to obtain a more predictable cash flow to the
individual tranches than exists with the underlying collateral of the CMO. As a
general rule, the more predictable the cash flow is on a CMO tranche, the lower
the anticipated yield will be on that tranche at the time of issuance relative
to prevailing market yields on mortgage-backed securities. As part of the
process of creating more predictable cash flows on most of the tranches in a
series of CMOs, one or more tranches generally must be created that absorb most
of the volatility in the cash flows on the underlying mortgage loans. The yields
on these tranches may be higher than prevailing market yields on mortgage-backed
securities with similar maturities. As a result of the uncertainty of the cash
flows of these tranches, the market prices of and yield on these tranches
generally are more volatile.
The Fund also may invest in parallel pay CMOs and Planned
Amortization Class CMOs (PAC Bonds). Parallel pay CMOs are structured to provide
payments of principal on each payment date to more than one class. These
simultaneous payments are taken into account in calculating the stated maturity
date or final distribution date of each class, which, as with other CMO
structures, must be retired by its stated maturity date or final distribution
date but may be retired earlier. PAC Bonds generally require payments of a
specified amount of principal on each payment date. PAC Bonds always are
parallel pay CMOs with the required principal payment on such securities having
the highest priority after interest has been paid to all classes.
The Fund may not invest in "stripped" mortgage-backed
securities (interest-only securities (IOs) or principal-only securities (POs))
or in mortgage-backed securities known as "inverse floaters."
ADJUSTABLE RATE MORTGAGES. The Berger Balanced Fund may also
invest in adjustable rate mortgage securities (ARMs), which are pass-through
mortgage securities collateralized by mortgages with adjustable rather than
fixed rates. ARMs, like fixed rate mortgages, have a specified maturity date,
and the principal amount of the mortgage is repaid over the life of the
mortgage. Unlike fixed rate mortgages, the interest rate on ARMs is adjusted at
regular intervals based on a specified, published interest rate "index" such as
a Treasury rate index. The new rate is determined by adding a specific interest
amount, the "margin," to the interest rate of the index. Investment in ARM
securities allows the Fund to participate in changing interest rate levels
through regular adjustments in the coupons of the underlying mortgages,
resulting in more variable current income and lower price volatility than
longer-term fixed rate mortgage securities. ARM securities are a less effective
means of locking in long-term rates than fixed rate mortgages since the income
from adjustable rate mortgages will increase during periods of rising interest
rates and decline during periods of falling rates.
PRIVATE MORTGAGE PASS-THROUGH SECURITIES. Private mortgage
pass-through securities are structured similarly to the GNMA, FNMA and FHLMC
mortgage pass-through securities and are issued by originators of and investors
in mortgage loans, including depository institutions, mortgage banks, investment
banks and special purpose subsidiaries of the foregoing. These securities
usually are backed by a pool of conventional fixed rate or adjustable rate
mortgage loans. Since private
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mortgage pass-through securities typically are not guaranteed by an entity
having the credit status of GNMA, FNMA and FHLMC, these securities generally are
structured with one or more types of credit enhancement to make them more
secure, which may be through guarantees, insurance policies or letters of credit
obtained by the issuer or sponsor from third parties, through various means of
structuring the transaction or through a combination of those approaches. The
Fund may invest in private mortgage pass-through securities only if they are
rated AA/Aa (S&P/Moody's) or above.
SPECIAL RISKS OF MORTGAGE-BACKED SECURITIES. Mortgage-backed
securities have certain different characteristics than traditional debt
securities. As a result of the risks associated with these securities, the Fund
could realize a loss by investing in them, regardless of their rating or their
credit enhancement features.
Among the major differences between mortgage-backed securities
and traditional debt securities are that on mortgage-backed securities, interest
and principal payments are made more frequently, usually monthly, and principal
may be prepaid at any time because the underlying mortgage loans or other assets
generally may be prepaid at any time, usually without penalty. Changes in the
rate of prepayments will generally affect the yield to maturity of the security.
Moreover, when the holder of the security attempts to reinvest prepayments of
principal and interest, it may receive a rate of interest which is higher or
lower than the rate on the mortgage-backed securities originally held. To the
extent that mortgage-backed securities are purchased at a premium, mortgage
foreclosures and principal prepayments may result in a loss to the extent of the
premium paid. If such securities are bought at a discount, both scheduled
payments of principal and unscheduled prepayments will increase current and
total returns and will accelerate the recognition of income which, when
distributed to shareholders, will be taxable as ordinary income.
Mortgage-backed securities, like all fixed-income securities,
generally decrease in value as a result of increases in interest rates. In
addition, although generally the value of fixed-income securities increases
during periods of falling interest rates and decreases during periods of rising
interest rates, as a result of prepayments and other factors, this is not always
the case with respect to mortgage-backed securities.
Although the extent of prepayments on a pool of mortgage loans
depends on various economic and other factors, as a general rule, prepayments on
fixed rate mortgage loans will increase during a period of falling interest
rates and decrease during a period of rising interest rates. Accordingly, during
a period of declining rates, the Fund is likely to have greater amounts to
reinvest as a result of prepayments and is likely to have to reinvest those
amounts at lower interest rates than during a period of rising interest rates.
Mortgage-backed securities generally decrease in value as a result of increases
in interest rates and may benefit less than other fixed-income securities from
declining interest rates because of the risk of prepayment.
The Fund may invest in mortgage derivative securities, such as
CMOs, the average life of which is determined using mathematical models that
incorporate prepayment assumptions and other factors that involve estimates of
future economic and market conditions. These estimates may vary from actual
future results, particularly during periods of extreme market volatility. In
addition, under certain market conditions, the average weighted life of mortgage
derivative securities may not accurately reflect the price volatility of such
securities. For example, in periods of supply and demand imbalances in the
market for such securities and/or in periods of sharp interest rate movements,
the prices of mortgage derivative securities may fluctuate to a greater extent
than would be expected from interest rate movements alone.
The Fund's investments in mortgage derivative securities also
subject the Fund to extension risk. Extension risk is the possibility that
rising interest rates may cause prepayments to occur at a slower than expected
rate. This particular risk may effectively change a security which was
considered short or intermediate-term at the time of purchase into a long-term
security. Long-term securities generally fluctuate more widely in response to
changes in interest rates than short or intermediate-term securities.
In addition, CMOs and other mortgage-backed securities issued
by private entities are not U.S. government securities and are not guaranteed by
any government agency, although the pool of securities underlying a privately
issued mortgage-backed security may be subject to a guarantee. Therefore, if the
collateral securing a privately issued mortgage-backed security held by the
Fund, in addition to any third party credit support or guarantees, is
insufficient to make payment, the Fund could sustain a loss on its investment in
that security. However, as stated above, the Fund will invest in CMOs and other
mortgage-backed securities issued by private entities only if they are rated
AA/Aa (S&P/Moody's) or above.
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ASSET-BACKED SECURITIES. The Berger Balanced Fund may also
invest in asset-backed securities. Asset-backed securities are securities that
represent direct or indirect participation in, or are secured by and payable
from, assets other than mortgage-backed assets, such as motor vehicle
installment sales contracts, installment loan contracts, leases of various types
of real and personal property and receivables from revolving credit agreements
(credit cards). Asset-backed securities have yield characteristics similar to
those of mortgage-backed securities and are subject to many of the same risks.
See the subheading "Special Risks of Mortgage-Backed Securities" above for a
discussion of those risks. In addition, asset-backed securities involve certain
risks that are not posed by mortgage-backed securities, since asset-backed
securities do not usually contain the complete benefit of a security interest in
the related collateral. For example, credit card receivables generally are
unsecured and the debtors are entitled to the protection of a number of state
and federal consumer credit laws, including the bankruptcy laws, some of which
may reduce the ability to obtain full payment. In the case of automobile
receivables, due to various legal and economic factors, proceeds for repossessed
collateral may not always be sufficient to support payments on these securities.
New instruments and variations of existing mortgage-backed
securities and asset-backed securities continue to be developed. The Fund may
invest in any such instruments or variations as may be developed, to the extent
consistent with its investment objective and policies and applicable legal
requirements.
TEMPORARY DEFENSIVE MEASURES. Each of the Funds (except the
Berger/BIAM International Fund) may increase its investment in government
securities, and other short-term, interest-bearing securities without regard to
the Fund's otherwise applicable percentage limits, policies or its normal
investment emphasis, when its advisor or sub-advisor believes market conditions
warrant a temporary defensive position. Taking larger positions in such
short-term investments may serve as a means of preserving capital in unfavorable
market conditions. When in a defensive position, a Fund could miss the
opportunity to participate in any stock or bond market advances that occur
during those periods, which the Fund might have been able to participate in if
it had remained more fully invested.
NON-DIVERSIFICATION. The Berger Select Fund is classified as a
"non-diversified" Fund under the Investment Company Act of 1940, which means
that the Fund is not limited by that Act in the proportion of its assets that it
may invest in the securities of a single issuer. The Fund's net asset value may
be more volatile than that of a more-widely diversified fund because the Fund
invests more of its assets in a smaller number of issuers. Consequently, the
Fund may be more vulnerable to any single economic, political or regulatory
occurrence, and the gains or losses on a single stock will have a greater impact
on the Fund's net asset value.
However, the Fund intends to conduct its operations so as to
qualify to be taxed as a "regulated investment company" under the Internal
Revenue Code, which will generally relieve the Fund of any liability for federal
income tax to the extent its earnings are distributed to shareholders. See
Section 9--Income Dividends, Capital Gains Distributions and Tax Treatment
below. To qualify as a regulated investment company, among other requirements,
the Fund will limit its investments so that, at the close of each quarter of the
taxable year, (i) not more than 25% of the market value of the Fund's total
assets will be invested in securities of a single issuer, and (ii) with respect
to 50% of the market value of its total assets, not more than 5% of the market
value of its total assets will be invested in the securities of a single issuer
and the Fund will not own more than 10% of the outstanding voting securities of
a single issuer. These limitations do not apply to U.S. government securities.
PORTFOLIO TURNOVER. The portfolio turnover rates of each of
the Funds are shown in the Financial Highlights tables included in the
Prospectus. The annual portfolio turnover rates of some of the Funds at times
have exceeded 100%. A 100% annual turnover rate results, for example, if the
equivalent of all of the securities in the Fund's portfolio are replaced in a
period of one year. The Funds anticipate that their portfolio turnover rates in
future years may exceed 100%, and investment changes will be made whenever
management deems them appropriate even if this results in a higher portfolio
turnover rate. In addition, portfolio turnover for all the Funds may increase as
a result of large amounts of purchases and redemptions of shares of the Funds
due to economic, market or other factors that are not within the control of
management.
Higher portfolio turnover will necessarily result in
correspondingly higher brokerage costs for the Funds. The existence of a high
portfolio turnover rate has no direct relationship to the tax liability of a
Fund, although sales of certain stocks will lead to realization of gains, and,
possibly, increased taxable distributions to shareholders. The Funds' brokerage
policy is discussed further below under Section 6--Brokerage Policy, and
additional information concerning income taxes is located under Section
9--Income Dividends, Capital Gains Distributions and Tax Treatment.
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The variation in the portfolio turnover rate for the Berger
Select Fund's two most recently completed fiscal years is due to the increased
size of the Fund and a portfolio manager change.
2. INVESTMENT RESTRICTIONS
As indicated in the Prospectus, the investment objective of
each of the Funds is as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
FUND INVESTMENT OBJECTIVE
------------------------------------------------------------------------------------
<S> <C>
Berger Information Technology Fund Capital appreciation
------------------------------------------------------------------------------------
Berger New Generation Fund Capital appreciation
------------------------------------------------------------------------------------
Berger Select Fund Capital appreciation
------------------------------------------------------------------------------------
Berger Small Company Growth Fund Capital appreciation
------------------------------------------------------------------------------------
Berger Small Cap Value Fund Capital appreciation
------------------------------------------------------------------------------------
Berger Mid Cap Growth Fund Capital appreciation
------------------------------------------------------------------------------------
Berger Mid Cap Value Fund Capital appreciation
------------------------------------------------------------------------------------
Berger Growth Fund Long-term capital appreciation
------------------------------------------------------------------------------------
Berger/BIAM International Fund Long-term capital appreciation
------------------------------------------------------------------------------------
Primary investment objective:
Capital appreciation
Berger Growth and Income Fund Secondary investment objective:
Investing in securities that produce
current income for the portfolio
------------------------------------------------------------------------------------
Berger Balanced Fund Capital appreciation and current income
------------------------------------------------------------------------------------
</TABLE>
The investment objective of the Berger Information Technology
Fund, the Berger New Generation Fund, the Berger Select Fund, the Berger Small
Company Growth Fund, the Berger Small Cap Value Fund, the Berger Mid Cap Growth
Fund, the Berger Mid Cap Value Fund, the Berger Growth Fund, the Berger/BIAM
International Fund and the Berger Balanced Fund, and the primary investment
objective of the Berger Growth and Income Fund, are considered fundamental,
meaning that they cannot be changed without a shareholders' vote. The secondary
investment objective of the Berger Growth and Income Fund is not considered
fundamental, and therefore may be changed in the future by action of the
directors without shareholder vote. However, the Berger Growth and Income Fund
will not change its secondary investment objective without giving its
shareholders such notice as may be required by law. If the Berger Growth and
Income Fund changes its secondary
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investment objective, shareholders should consider whether the Fund remains an
appropriate investment in light of their then current financial position and
needs. There can be no assurance that any of the Funds' investment objectives
will be realized.
Each Fund has also adopted certain investment policies,
strategies, guidelines and procedures in pursuing its objective. These may be
changed without a shareholder vote. The principal policies and strategies used
by the Funds are described in the Prospectus.
In addition, each Fund has adopted certain fundamental and
non-fundamental restrictions on its investments and other activities, which are
listed below. Fundamental restrictions may not be changed without the approval
of (i) 67% or more of the voting securities of the Fund present at a meeting of
shareholders thereof if the holders of more than 50% of the outstanding voting
securities are present or represented by proxy, or (ii) more than 50% of the
outstanding voting securities of the Fund. Non-fundamental restrictions may be
changed in the future by action of the directors or trustees without shareholder
vote.
BERGER INFORMATION TECHNOLOGY FUND, BERGER NEW GENERATION FUND, BERGER SELECT
FUND, BERGER SMALL COMPANY GROWTH FUND-REGISTERED TRADEMARK-, BERGER MID CAP
GROWTH FUND, THE BERGER MID CAP VALUE FUND AND BERGER BALANCED FUND
Except as noted, the following fundamental restrictions apply
to each of the Berger New Generation Fund, the Berger Select Fund, the Berger
Small Company Growth Fund, the Berger Mid Cap Growth Fund, the Berger Mid Cap
Value Fund and the Berger Balanced Fund. The Fund may not:
1. (Does not apply to the Berger Select Fund) With respect to
75% of the Fund's total assets, purchase the securities of any one issuer
(except U.S. government securities) if immediately after and as a result of such
purchase (a) the value of the holdings of the Fund in the securities of such
issuer exceeds 5% of the value of the Fund's total assets or (b) the Fund owns
more than 10% of the outstanding voting securities of such issuer.
2. Invest in any one industry (other than U.S. government
securities) 25% or more (more than 25%, in the case of the Berger Small Company
Growth Fund) of the value of its total assets at the time of such investment.
3. Borrow money, except from banks for temporary or emergency
purposes in amounts not to exceed 25% of the Fund's total assets (including the
amount borrowed) taken at market value, nor pledge, mortgage or hypothecate its
assets, except to secure permitted indebtedness and then only if such pledging,
mortgaging or hypothecating does not exceed 25% of the Fund's total assets taken
at market value. When borrowings exceed 5% of the Fund's total assets, the Fund
will not purchase portfolio securities.
4. Act as a securities underwriter (except to the extent the
Fund may be deemed an underwriter under the Securities Act of 1933 in disposing
of a security), issue senior securities (except to the extent permitted under
the Investment Company Act of 1940), invest in real estate (although it may
purchase shares of a real estate investment trust), or invest in commodities or
commodity contracts except financial futures transactions, futures contracts on
securities and securities indices and options on such futures, forward foreign
currency exchange contracts, forward commitments or securities index put or call
options.
5. Make loans, except that the Fund may enter into repurchase
agreements and may lend portfolio securities in accordance with the Fund's
investment policies. The Fund does not, for this purpose, consider the purchase
of all or a portion of an issue of publicly distributed bonds, bank loan
participation agreements, bank certificates of deposit, bankers' acceptances,
debentures or other securities, whether or not the purchase is made upon the
original issuance of the securities, to be the making of a loan.
In applying the industry concentration investment restriction
(no. 2 above), each Fund uses the industry groups used in the Data Monitor
Portfolio Monitoring System of William O'Neil & Co. Incorporated. Further, in
implementing that restriction, the Berger Small Company Growth Fund intends not
to invest in any one industry 25% or more of the value of its total assets at
the time of such investment.
The trustees have adopted additional non-fundamental
investment restrictions for the Berger Information Technology Fund, the Berger
New Generation Fund, the Berger Select Fund, the Berger Small Company Growth
Fund, the Berger Mid Cap Growth Fund, the Berger Mid Cap Value Fund and the
Berger Balanced Fund. These limitations may be changed by the trustees without a
shareholder vote. The non-fundamental investment restrictions include the
following:
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1. The Fund may not purchase securities on margin from a
broker or dealer, except that the Fund may obtain such short-term credits as may
be necessary for the clearance of transactions, and may not make short sales of
securities, except that the Fund may make short sales if, at the time of the
short sale, the Fund owns or has the right to acquire an equivalent kind and
amount of the security being sold short at no additional cost (i.e., short sales
"against the box"). This limitation shall not prohibit or restrict the Fund from
entering into futures, forwards and options contracts or from making margin
payments and other deposits in connection therewith.
2. The Fund may not purchase the securities of any other
investment company, except by purchase in the open market involving no
commission or profit to a sponsor or dealer (other than the customary broker's
commission).
3. The Fund may not invest in companies for the purposes of
exercising control of management.
4. The Fund may not purchase any security, including any
repurchase agreement maturing in more than seven days, which is not readily
marketable, if more than 15% of the net assets of the Fund, taken at market
value at the time of purchase would be invested in such securities.
5. Only for the purpose of hedging, the Fund may purchase and
sell financial futures, forward foreign currency exchange contracts and put and
call options, but no more than 5% of the Fund's net assets at the time of
purchase may be invested in initial margins for financial futures transactions
and premiums for options. The Fund may only write call options that are covered
and only up to 25% of the Fund's total assets.
6. The Fund may not purchase or sell securities on a
when-issued or delayed delivery basis, if as a result more than 5% of its total
assets taken at market value at the time of purchase would be invested in such
securities.
BERGER SMALL CAP VALUE FUND
The following fundamental restrictions apply to the Berger
Small Cap Value Fund. The Fund may not:
1. Issue senior securities as defined in the Investment
Company Act of 1940.
2. Invest in companies for the purpose of acquiring control or
management thereof.
3. Invest or hold securities of any issuer if the officers and
trustees of the Fund and its advisor own individually more than one-half (1/2)
of 1% of the securities of such issuer or together own more than 5% of the
securities of such issuer.
4. Invest in other investment companies, except in connection
with a plan of merger, consolidation, reorganization or acquisition of assets,
or in the open market involving no commission or profit to a sponsor or dealer
(other than a customary broker's commission).
5. Participate on a joint or joint and several basis in any
trading account in securities.
6. Purchase securities of any company with a record of less
than three (3) years continuous operation (including that of predecessors) if
such purchase would cause the cost of the Fund's investments in all such
companies to exceed 5% of the Fund's total assets.
7. Invest in securities (except those of the U.S. government
or its agencies) of any issuer if immediately thereafter the Fund would then own
more than 10% of that issuer's voting securities.
8. Loan cash or portfolio securities, except in connection
with the acquisition of debt securities which the Fund's investment policies and
restrictions permit it to purchase.
9. Borrow money in excess of 5% of the value of its assets
and, then, only as a temporary measure for extraordinary or emergency purposes.
10. Pledge, mortgage or hypothecate any of its assets to
secure a debt.
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11. Purchase or sell real estate or any other interests in
real estate (including real estate limited partnership interests).
12. Purchase securities on margin or sell short.
13. Invest in commodities or commodity contracts.
14. Act as an underwriter of securities of other issuers or
invest in portfolio securities which the Fund might not be free to sell to the
public without registration of such securities under the Securities Act of 1933
("Restricted Securities").
15. Invest more than 10% of the value of its net assets in
illiquid securities, including Restricted Securities, securities which are not
readily marketable, repurchase agreements maturing in more than seven (7) days,
written over-the-counter ("OTC") options and securities used as cover for
written OTC options.
16. Invest in oil, gas or mineral leases.
17. Invest more than 5% of the value of its net assets in
warrants or more than 2% of its net assets in warrants that are not listed on
the New York Stock Exchange, the American Stock Exchange, or the NASDAQ National
Market System.
18. Invest more than 25% of the value of its assets, at the
time of purchase, in securities of companies principally engaged in a particular
industry, although the Fund may as a temporary defensive measure invest up to
100% of its total assets in obligations issued or guaranteed by the U.S.
government or its agencies.
19. With respect to 75% of the Fund's total assets, purchase
the securities of any one issuer (except U.S. government securities) if
immediately after and as a result of such purchase (a) the value of the holdings
of the Fund in the securities of such issuer exceeds 5% of the value of the
Fund's total assets or (b) the Fund owns more than 10% of the outstanding voting
securities of such issuer.
In applying the Fund's industry concentration restriction
(number (18) above), the Fund uses the industry groups used in the Data Monitor
Portfolio Monitoring System of William O'Neil & Co. Incorporated.
The trustees have adopted additional non-fundamental
investment restrictions for the Berger Small Cap Value Fund. These limitations
may be changed by the trustees without a shareholder vote. The non-fundamental
investment restrictions include the following:
1. Only for the purpose of hedging, the Fund may purchase and
sell put and call options, but no more than 5% of the Fund's net assets at the
time of purchase may be invested in premiums for options. The Fund may only
write call options that are covered and only up to 10% of the Fund's net assets.
2. The Fund may not purchase or sell securities on a
when-issued or delayed delivery basis, if as a result more than 5% of its total
assets taken at market value at the time of purchase would be invested in such
securities.
Investment restrictions that involve a maximum percentage of
securities or assets will not be considered to be violated unless an excess over
the percentage occurs immediately after, and is caused by, an acquisition or
encumbrance of securities or assets of the Berger Small Cap Value Fund.
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BERGER GROWTH FUND-REGISTERED TRADEMARK- AND BERGER GROWTH AND INCOME FUND
The following fundamental restrictions apply to each of the
Berger Growth Fund and the Berger Growth and Income Fund. The Fund may not:
1. Purchase the securities of any one issuer (except U.S.
Government securities) if immediately after and as a result of such purchase (a)
the value of the holdings of the Fund in the securities of such issuer exceeds
5% of the value of the Fund's total assets or (b) the Fund owns more than 10% of
the outstanding voting securities or of any class of securities of such issuer.
2. Purchase securities of any company with a record of less
than three years' continuous operation (including that of predecessors) if such
purchase would cause the Fund's investments in all such companies taken at cost
to exceed 5% of the value of the Fund's total assets.
3. Invest in any one industry more than 25% of the value of
its total assets at the time of such investment.
4. Make loans, except that the Fund may enter into repurchase
agreements in accordance with the Fund's investment policies. The Fund does not,
for this purpose, consider the purchase of all or a portion of an issue of
publicly distributed bonds, bank loan participation agreements, bank
certificates of deposit, bankers' acceptances, debentures or other securities,
whether or not the purchase is made upon the original issuance of the
securities, to be the making of a loan.
5. Borrow in excess of 5% of the value of its total assets, or
pledge, mortgage, or hypothecate its assets taken at market value to an extent
greater than 10% of the Fund's total assets taken at cost (and no borrowing may
be undertaken except from banks as a temporary measure for extraordinary or
emergency purposes). This limitation shall not prohibit or restrict short sales
or deposits of assets to margin or guarantee positions in futures, options or
forward contracts, or the segregation of assets in connection with any of such
transactions.
6. Purchase or retain the securities of any issuer if those
officers and directors of the Fund or its investment advisor owning individually
more than 1/2 of 1% of the securities of such issuer together own more than 5%
of the securities of such issuer.
7. Purchase the securities of any other investment company,
except by purchase in the open market involving no commission or profit to a
sponsor or dealer (other than the customary broker's commission).
8. Act as a securities underwriter (except to the extent the
Fund may be deemed an underwriter under the Securities Act of 1933 in disposing
of a security) or invest in real estate (although it may purchase shares of a
real estate investment trust), or invest in commodities or commodity contracts
except, only for the purpose of hedging, (i) financial futures transactions,
including futures contracts on securities, securities indices and foreign
currencies, and options on any such futures, (ii) forward foreign currency
exchange contracts and other forward commitments and (iii) securities index put
or call options.
9. Participate on a joint or joint and several basis in any
securities trading account.
10. Invest in companies for the purposes of exercising control
of management.
In applying the industry concentration investment restriction
(no. 3 above), the Funds use the industry groups used in the Data Monitor
Portfolio Monitoring System of William O'Neil & Co. Incorporated. Further, in
implementing that restriction, each Fund intends not to invest in any one
industry 25% or more of the value of its total assets at the time of such
investment.
The directors have adopted additional non-fundamental
investment restrictions for the Berger Growth Fund and the Berger Growth and
Income Fund. These limitations may be changed by the directors without a
shareholder vote. The non-fundamental investment restrictions include the
following:
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<PAGE>
1. Only for the purpose of hedging, the Fund may purchase and
sell financial futures, forward foreign currency exchange contracts and put and
call options, but no more than 5% of the Fund's net assets at the time of
purchase may be invested in initial margins for financial futures transactions
and premiums for options. The Fund may only write call options that are covered
and only up to 25% of the Fund's total assets.
2. The Fund may not purchase or sell securities on a
when-issued or delayed delivery basis, if as a result more than 5% of its total
assets taken at market value at the time of purchase would be invested in such
securities.
3. The Fund may not purchase any security, including any
repurchase agreement maturing in more than seven days, which is not readily
marketable, if more than 15% of the net assets of the Fund, taken at market
value at the time of purchase would be invested in such securities.
4. The Fund may not purchase securities on margin from a
broker or dealer, except that the Fund may obtain such short-term credits as may
be necessary for the clearance of transactions, and may not make short sales of
securities, except that the Fund may make short sales if, at the time of the
short sale, the Fund owns or has the right to acquire an equivalent kind and
amount of the security being sold short at no additional cost (i.e., short sales
"against the box"). This limitation shall not prohibit or restrict the Fund from
entering into futures, forwards and options contracts or from making margin
payments and other deposits in connection therewith.
BERGER/BIAM INTERNATIONAL FUND
The Fund has adopted the investment policy that it may,
notwithstanding any other fundamental or non-fundamental investment policy or
restriction, invest all of its investable assets in the securities of another
open-end investment company or series thereof with substantially the same
investment objective, policies and limitations as the Fund. This arrangement is
commonly referred to as a master/feeder.
All other fundamental and non-fundamental investment policies
and restrictions of the Berger/BIAM International Fund and the Berger/BIAM
International Portfolio (the "Portfolio") are identical. Therefore, although the
following investment restrictions refer to the Portfolio, they apply equally to
the Fund.
The Portfolio has adopted certain fundamental restrictions on
its investments and other activities, and none of these restrictions may be
changed without the approval of (i) 67% or more of the voting securities of the
Portfolio present at a meeting of shareholders thereof if the holders of more
than 50% of the outstanding voting securities are present or represented by
proxy, or (ii) more than 50% of the outstanding voting securities of the
Portfolio. Whenever the Fund is requested to vote on a change in the investment
restrictions of the Portfolio, the Fund will hold a meeting of its shareholders
and will cast its votes as instructed by the shareholders.
The following fundamental restrictions apply to the Portfolio.
The Portfolio may not:
1. With respect to 75% of the Portfolio's total assets,
purchase the securities of any one issuer (except U.S. government securities) if
immediately after and as a result of such purchase (a) the value of the holdings
of the Portfolio in the securities of such issuer exceeds 5% of the value of the
Portfolio's total assets or (b) the Portfolio owns more than 10% of the
outstanding voting securities of such issuer.
2. Invest in any one industry (other than U.S. government
securities) 25% or more of the value of its total assets at the time of such
investment.
3. Borrow money, except from banks for temporary or emergency
purposes in amounts not to exceed 25% of the Portfolio's total assets (including
the amount borrowed) taken at market value, nor pledge, mortgage or hypothecate
its assets, except to secure permitted indebtedness and then only if such
pledging, mortgaging or hypothecating does not exceed 25% of the Portfolio's
total assets taken at market value. When borrowings exceed 5% of the Portfolio's
total assets, the Portfolio will not purchase portfolio securities.
4. Act as a securities underwriter (except to the extent the
Portfolio may be deemed an underwriter under the Securities Act of 1933 in
disposing of a security), issue senior securities (except to the extent
permitted under the Investment Company Act of 1940), invest in real estate
(although it may purchase shares of a real estate investment trust),
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<PAGE>
or invest in commodities or commodity contracts except financial futures
transactions, futures contracts on securities and securities indices and options
on such futures, forward foreign currency exchange contracts, forward
commitments or securities index put or call options.
5. Make loans, except that the Portfolio may enter into
repurchase agreements and may lend portfolio securities in accordance with the
Portfolio's investment policies. The Portfolio does not, for this purpose,
consider the purchase of all or a portion of an issue of publicly distributed
bonds, bank loan participation agreements, bank certificates of deposit,
bankers' acceptances, debentures or other securities, whether or not the
purchase is made upon the original issuance of the securities, to be the making
of a loan.
In applying the industry concentration investment restriction
(no. 2 above), the Portfolio uses the industry groups designated by the
Financial Times World Index Service.
The trustees have adopted additional non-fundamental
investment restrictions for the Portfolio. These limitations may be changed by
the trustees without a shareholder vote. The non-fundamental investment
restrictions include the following:
1. With respect to 100% of the Portfolio's total assets, the
Portfolio may not purchase the securities of any one issuer (except U.S.
government securities) if immediately after and as a result of such purchase (a)
the value of the holdings of the Portfolio in the securities of such issuer
exceeds 5% of the value of the Portfolio's total assets or (b) the Portfolio
owns more than 10% of the outstanding voting securities of such issuer.
2. The Portfolio may not purchase securities on margin from a
broker or dealer, except that the Portfolio may obtain such short-term credits
as may be necessary for the clearance of transactions, and may not make short
sales of securities. This limitation shall not prohibit or restrict the
Portfolio from entering into futures, forwards and options contracts or from
making margin payments and other deposits in connection therewith.
3. The Portfolio may not purchase the securities of any other
investment company, except by purchase in the open market involving no
commission or profit to a sponsor or dealer (other than the customary broker's
commission).
4. The Portfolio may not invest in companies for the purposes
of exercising control of management.
5. The Portfolio may not purchase any security, including any
repurchase agreement maturing in more than seven days, which is not readily
marketable, if more than 15% of the net assets of the Portfolio, taken at market
value at the time of purchase would be invested in such securities.
6. The Portfolio may not enter into any futures, forwards or
options, except that only for the purpose of hedging, the Portfolio may enter
into forward foreign currency exchange contracts with stated contract values of
up to the value of the Portfolio's assets.
7. The Portfolio may not purchase or sell securities on a
when-issued or delayed delivery basis, if as a result more than 5% of its net
assets taken at market value at the time of purchase would be invested in such
securities.
3. MANAGEMENT OF THE FUNDS
Each Fund is supervised by a board of directors or trustees
who are responsible for major decisions about the Funds' policies and overall
Fund oversight. Each Fund's board hires the companies that run day-to-day Fund
operations, such as the investment advisor, administrator, transfer agent and
custodian.
The directors or trustees and executive officers of each of
the Funds are listed below, together with information which includes their
principal occupations during the past five years and other principal business
affiliations.
MICHAEL OWEN, 114 A Gallatin Dr., Bozeman, MT 59718, DOB: 1937.
Self-employed as a financial and management consultant, and in real
estate development. From 1993 to June 1999, Dean, and from 1989 to
1993, a member of the Finance faculty, of the College of Business,
Montana State University. Formerly (1976-1989), Chairman and Chief
Executive Officer of Royal Gold, Inc. (mining). Chairman of the Board
of Berger Growth Fund and Berger
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<PAGE>
Growth and Income Fund. Chairman of the Trustees of Berger Investment
Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM
Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and
Berger Omni Investment Trust.
* JACK R. THOMPSON, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1949. President and a director since May 1999 (Executive Vice
President from February 1999 to May 1999) of Berger Growth Fund and
Berger Growth and Income Fund. President and a trustee since May 1999
(Executive Vice President from February 1999 to May 1999) of Berger
Investment Portfolio Trust, Berger Institutional Products Trust,
Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios
Trust and Berger Omni Investment Trust. President and Director since
June, 1999 (Executive Vice President from February 1999 to June 1999)
of Berger LLC. Audit Committee Member of the Public Employees'
Retirement Association of Colorado (pension plan) since November 1997.
Self-employed as a consultant from July 1995 through February 1999.
Director of Wasatch Advisors (investment management) from February
1997 to February 1999. Director of Janus Capital Corporation
(investment management) from June 1984 through June 1995, and
Executive Vice President of the Corporation from April 1989 through
June 1995. Treasurer of Janus Capital Corporation from November 1983
through October 1989. Trustee of the Janus Investment Funds from
December 1990 through June 1995, and Senior Vice President of the
Trust from May 1993 through June 1995. President and a director of
Janus Service Corporation (transfer agent) from January 1987 through
June 1995. President and a director of Fillmore Agency, Inc.
(advertising agency), from January 1990 through June 1995. Executive
Vice President and a director of Janus Capital International, Ltd.
(investment advisor) from September 1994 through June 1995. President
and a director of Janus Distributors, Inc. (broker/dealer), from May
1991 through June 1995. Director of IDEX Management, Inc. (investment
management), from January 1985 through June 1995. Trustee and Senior
Vice President of the of the Janus Aspen Funds from May 1993 through
June 1995.
DENNIS E. BALDWIN, 3481 South Race Street, Englewood, CO 80110, DOB: 1928.
President, Baldwin Financial Counseling. Formerly (1978-1990), Vice
President and Denver Office Manager of Merrill Lynch Capital Markets.
Director of Berger Growth Fund and Berger Growth and Income Fund.
Trustee of Berger Investment Portfolio Trust, Berger Institutional
Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM
Worldwide Portfolios Trust and Berger Omni Investment Trust.
LOUIS R. BINDNER, 1075 South Fox, Denver, CO 80223, DOB: 1925. President,
Climate Engineering, Inc. (building environmental systems). Director
of Berger Growth Fund and Berger Growth and Income Fund. Trustee of
Berger Investment Portfolio Trust, Berger Institutional Products
Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide
Portfolios Trust and Berger Omni Investment Trust.
KATHERINE A. CATTANACH, 672 South Gaylord, Denver, CO 80209, DOB: 1945.
Managing Principal, Sovereign Financial Services, Inc. (investment
consulting firm). Formerly (1981-1988), Executive Vice President,
Captiva Corporation, Denver, Colorado (private investment management
firm). Ph.D. in Finance (Arizona State University); Chartered
Financial Analyst (CFA). Director of Berger Growth Fund and Berger
Growth and Income Fund. Trustee of Berger Investment Portfolio Trust,
Berger Institutional Products Trust, Berger/BIAM Worldwide Funds
Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni
Investment Trust.
* DENIS CURRAN, 20 Horseneck Lane, Greenwich, CT 06830, DOB: 1947. President
and a director since December 1994, and Senior Vice President and a
director from September 1991 to December 1994, of Bank of Ireland
Asset Management (U.S.) Limited (investment advisory firm). Member of
the Board of Managers and Chief Executive Officer on the Management
Committee of BBOI Worldwide LLC since November 1996. Trustee of
Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios
Trust since November 1996.
PAUL R. KNAPP, 33 North LaSalle Street, Suite 1900, Chicago, IL 60602, DOB:
1945. Since 1991, Chairman, President, Chief Executive Officer and a
director of Catalyst Institute (international public policy research
organization focused primarily on financial markets and institutions).
Since September 1997, President, Chief Executive Officer and a
director of DST Catalyst, Inc. (international financial markets
consulting, software and computer services company), an 81% owned
subsidiary of DST Systems, Inc. Director (since February 1998) and a
Vice President (February 1998 - November 1998) of West Side
Investments, Inc. (investments), a wholly-owned subsidiary of DST
Systems, Inc. Previously (1991 - September 1997), Chairman, President,
Chief Executive Officer and a director of Catalyst Consulting
(international financial institutions business consulting firm). Prior
thereto (1988-1991), President, Chief
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Executive Officer and a director of Kessler Asher Group (brokerage,
clearing and trading firm). Director of Berger Growth Fund and Berger
Growth and Income Fund. Trustee of Berger Investment Portfolio Trust,
Berger Institutional Products Trust, Berger/BIAM Worldwide Funds
Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni
Investment Trust.
HARRY T. LEWIS, JR., 370 17th Street, Suite 3560, Denver, CO 80202, DOB:
1933. Self-employed as a private investor. Formerly (1981-1988),
Senior Vice President, Rocky Mountain Region, of Dain Bosworth
Incorporated and member of that firm's Management Committee. Director
of J.D. Edwards & Co. (computer software company) since 1995. Director
of Berger Growth Fund and Berger Growth and Income Fund. Trustee of
Berger Investment Portfolio Trust, Berger Institutional Products
Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide
Portfolios Trust and Berger Omni Investment Trust.
WILLIAM SINCLAIRE, 3049 S. Perry Park Road, Sedalia, CO 80135, DOB: 1928.
President, Santa Clara LLC (privately owned agriculture company).
Director of Berger Growth Fund and Berger Growth and Income Fund.
Trustee of Berger Investment Portfolio Trust, Berger Institutional
Products Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM
Worldwide Portfolios Trust and Berger Omni Investment Trust.
* ANTHONY (TINO) R. SELLITTO III, 210 University Boulevard, Suite 900,
Denver, CO 80206, DOB: 1964. Vice President and portfolio manager
since January 2000 of the Berger Growth Fund and the Berger IPT-
Growth Fund (co-portfolio manager May 1999 to January 2000), and Vice
President and co-portfolio manager of the Berger Select Fund since May
1999. Vice President and portfolio manager of the Berger Growth and
Income Fund and the Berger IPT - Growth and Income Fund since November
1998. Interim co-portfolio manager since January 2000 of the Berger
Balanced Fund. Vice President (since September 1998) and senior equity
analyst (January 1998 to September 1998) with Berger LLC. Formerly,
Vice President and Assistant Portfolio Manager at Crestone Capital
Management, Inc. (August 1995 to January 1998), Portfolio Manager at
Hawaiian Trust Company (September 1994 to August 1995) and Account
Executive at W.W. Grainger Inc. (distributor of industrial equipment)
(October 1991 to September 1994).
* AMY K. SELNER, 210 University Boulevard, Suite 900, Denver, CO 80206, DOB:
1968. Vice President and portfolio manager of the Berger Mid Cap
Growth Fund since its inception in December 1997. Vice President and
portfolio manager of the Berger Small Company Growth Fund and the
Berger IPT - Small Company Growth Fund since November 1998. Vice
President and co-portfolio manager since May 1999 of the Berger Select
Fund. Interim co-portfolio manager since January 2000 of the Berger
Balanced Fund. Vice President (since December 1997) and senior
research analyst (April 1996 through December 1997) with Berger LLC.
Formerly, Assistant Portfolio Manager and Research Analyst with
INVESCO Trust Company from March 1991 through March 1996.
* MARK S. SUNDERHUSE, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1961. Vice President (since February 1999) and portfolio manager
(since January 1999) of the Berger New Generation Fund. Vice President
and co-portfolio manager since May 1999 of the Berger Select Fund.
Interim co-portfolio manager since January 2000 of the Berger Balanced
Fund. Senior Vice President (since January 1998) and portfolio manager
(since January 1999) with Berger LLC. Formerly, Senior Vice President
and Assistant Portfolio Manager with Crestone Capital Management, Inc.
(from January 1991 through January 1998); Investment Officer with
United Bank of Denver (from April 1989 through January 1991); and
officer and registered representative with Boettcher & Company, Inc.
(investment banking) (from May 1985 through April 1989).
* JANICE M. TEAGUE, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1954. Vice President and Secretary (since November 1998) and
Assistant Secretary (October 1996 to November 1998) of the Berger
Funds. Vice President (since October 1997), Secretary (since November
1998) and Assistant Secretary (October 1996 through November 1998)
with Berger LLC. Vice President and Secretary with Berger Distributors
LLC, since August 1998. Formerly, self-employed as a business
consultant from June 1995 through September 1996, Secretary of the
Janus Funds from January 1990 to May 1995 and Assistant Secretary of
Janus Capital Corporation from October 1989 to May 1995.
* DAVID J. SCHULTZ, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1950. Vice President and Treasurer (since November 1998) and
Assistant Treasurer (September 1996 to November 1998) of the Berger
Funds. Vice President (since February 1997) and Controller (since
August 1994) with Berger LLC. Chief Financial Officer and
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<PAGE>
Treasurer (since May 1996), Assistant Secretary (since August 1998)
and Secretary (May 1996 to August 1998) with Berger Distributors LLC.
Formerly, Partner with Smith, Brock & Gwinn (accounting firm) from
January 1984 to August 1994.
* BRIAN S. FERRIE, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1958. Vice President of the Berger Funds since November 1998.
Vice President (since February 1997) and Chief Compliance Officer
(since August 1994) with Berger LLC. Chief Compliance Officer with
Berger Distributors LLC, since May 1996. Formerly, Compliance Officer
with United Services Advisor, Inc., from January 1988 to July 1994,
and Director of Internal Audit of United Services Funds from January
1987 to July 1994.
* JOHN PAGANELLI, 210 University Boulevard, Suite 900, Denver, CO 80206, DOB:
1967. Assistant Treasurer of the Berger Funds since November 1998.
Vice President (since November 1998) and Manager of Accounting
(January 1997 through November 1998) with Berger LLC. Formerly,
Manager of Accounting (December 1994 through October 1996) and Senior
Accountant (November 1991 through December 1994) with Palmeri Fund
Administrators, Inc.
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* Interested person (as defined in the Investment Company Act of 1940) of one or
more of the Funds and/or of the Funds' advisors or sub-advisors.
The directors or trustees of the Funds have adopted a
director/trustee retirement age of 75 years.
DIRECTOR/TRUSTEE COMPENSATION
The officers of the Funds received no compensation from the
Funds during the fiscal year ended September 30, 1999. However, directors and
trustees of the Funds who are not "interested persons" of the Funds or their
advisors or sub-advisors are compensated for their services according to a fee
schedule, allocated among the Funds. Neither the officers of the Funds nor the
directors or trustees receive any form of pension or retirement benefit
compensation from the Funds.
The following table sets forth information regarding
compensation paid or accrued during the fiscal year ended September 30, 1999,
for each director or trustee of the Funds:
-25-
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
NAME AND POSITION AGGREGATE COMPENSATION FROM
WITH BERGER FUNDS
- -------------------------------------------------------------------------------------------
BERGER BERGER BERGER BERGER BERGER BERGER
INFORMATION NEW SELECT SMALL SMALL MID CAP
TECHNOLOGY GENERATION FUND COMPANY CAP GROWTH
FUND(1) FUND GROWTH VALUE FUND
FUND FUND
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dennis E. $ 49 $2,441 $1,340 $8,432 $3,075 $147
Baldwin(4)
- -------------------------------------------------------------------------------------------
Louis R. $ 49 $2,441 $1,340 $8,432 $5,747 $147
Bindner(4)
- -------------------------------------------------------------------------------------------
Katherine A. $ 49 $2,441 $1,340 $8,432 $5,747 $147
Cattanach(4)
- -------------------------------------------------------------------------------------------
Denis Curran(6) $ 0 N/A N/A N/A N/A N/A
- -------------------------------------------------------------------------------------------
Paul R. Knapp(4) $ 49 $2,415 $1,323 $8,342 $5,682 $145
- -------------------------------------------------------------------------------------------
Harry T. Lewis(4) $ 49 $2,441 $1,340 $8,432 $5,747 $147
- -------------------------------------------------------------------------------------------
Michael Owen(4) $ 60 $2,955 $1,621 $10,206 $6,955 $178
- -------------------------------------------------------------------------------------------
William $ 49 $2,441 $1,340 $8,432 $5,747 $147
Sinclaire(4)
- -------------------------------------------------------------------------------------------
Jack R. Thompson $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
(4),(5),(6),(7)
- -------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------
NAME AND POSITION AGGREGATE COMPENSATION FROM
WITH BERGER FUNDS
- -------------------------------------------------------------------------------------------
BERGER BERGER BERGER/ BERGER BERGER ALL
MID CAP GROWTH BIAM GROWTH BALANCED BERGER
VALUE FUND INTERNATIONAL AND FUND FUNDS(3)
FUND FUND(2) INCOME
FUND
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dennis E. $319 $19,673 $2,966 $7,639 $1,175 $47,600
Baldwin(4)
- -------------------------------------------------------------------------------------------
Louis R. $319 $19,673 $2,966 $4,968 $1,175 $47,600
Bindner(4)
- -------------------------------------------------------------------------------------------
Katherine A. $319 $19,673 $2,966 $4,968 $1,175 $47,600
Cattanach(4)
- -------------------------------------------------------------------------------------------
Denis Curran(6) N/A N/A $ 0 N/A N/A $ 0
- -------------------------------------------------------------------------------------------
Paul R. Knapp(4) $316 $19,454 $2,931 $4,908 $1,158 $47,000
- -------------------------------------------------------------------------------------------
Harry T. Lewis(4) $319 $19,673 $2,966 $4,968 $1,175 $47,600
- -------------------------------------------------------------------------------------------
Michael Owen(4) $386 $23,812 $3,590 $6,012 $1,421 $57,600
- -------------------------------------------------------------------------------------------
William $319 $19,673 $2,966 $4,968 $1,175 $47,600
Sinclaire(4)
- -------------------------------------------------------------------------------------------
Jack R. Thompson $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
(4),(5),(6),(7)
- -------------------------------------------------------------------------------------------
</TABLE>
-26-
<PAGE>
NOTES TO TABLE
(1) The Fund was not added as an operating series of the Trust until July 1999.
Figures are from the period of the reorganization to September 30, 1999.
(2) Comprised of the portion of the trustee compensation paid by Berger/BIAM
Worldwide Portfolios to its trustees and allocated to the Fund.
(3) Includes the Berger Growth Fund, the Berger Growth and Income Fund, the
Berger Investment Portfolio Trust (including the Berger Small Company Growth
Fund, the Berger New Generation Fund, the Berger Balanced Fund, the Berger
Select Fund, the Berger Mid Cap Value Fund, the Berger Mid Cap Growth Fund and
the Berger Information Technology Fund), the Berger Institutional Products Trust
(four series), the Berger/BIAM Worldwide Funds Trust (three series, including
the Berger/BIAM International Fund), the Berger/BIAM Worldwide Portfolios Trust
(one series) and the Berger Omni Investment Trust (including the Berger Small
Cap Value Fund). Aggregate compensation figures do not include first-year
estimates for any Fund in existence for less than one year. Of the aggregate
amounts shown for each director/trustee, the following amounts were deferred
under applicable deferred compensation plans: Dennis E. Baldwin $24,316; Louis
R. Bindner $15,333; Katherine A. Cattanach $47,393; Michael Owen $6,651; William
Sinclaire $40,423.
(4) Director of Berger Growth Fund and Berger Growth and Income Fund and trustee
of Berger Investment Portfolio Trust, Berger Institutional Products Trust,
Berger/BIAM Worldwide Portfolios Trust, Berger/BIAM Worldwide Funds Trust and
Berger Omni Investment Trust.
(5) Interested person of Berger LLC.
(6) Interested person of BBOI Worldwide LLC. Trustee of Berger/BIAM Worldwide
Funds Trust and Berger/BIAM Worldwide Portfolios Trust.
(7) President of Berger Growth Fund, Berger Growth and Income Fund, Berger
Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM
Worldwide Portfolios Trust, Berger/BIAM Worldwide Funds Trust and Berger Omni
Investment Trust.
Directors or trustees may elect to defer receipt of all or a
portion of their fees pursuant to a fee deferral plan adopted by each of the
Funds. Under the plan, deferred fees are credited to an account and adjusted
thereafter to reflect the investment experience of whichever of the Berger Funds
(or approved money market funds) is designated by the director or trustee for
this purpose. Pursuant to an SEC exemptive order, the Funds are permitted to
purchase shares of the designated funds in order to offset their obligation to
the directors/trustees participating in the plan. Purchases made pursuant to the
plan are excepted from any otherwise applicable investment restriction limiting
the purchase of securities of any other investment company. A Fund's obligation
to make payments of deferred fees under the plan is a general obligation of the
Fund.
As of January 4, 2000, the officers and directors/trustees of
the Funds as a group owned of record or beneficially an aggregate of
less than 1% of the outstanding shares of each of the Funds.
4. INVESTMENT ADVISORS AND SUB-ADVISORS
BERGER LLC - INVESTMENT ADVISOR
Berger LLC ("Berger LLC"), 210 University Boulevard, Suite
900, Denver, CO 80206, is the investment advisor to all the Berger Funds except
the Berger/BIAM International Fund. Berger LLC is responsible for managing the
investment operations of these Funds and the composition of their investment
portfolios. Berger LLC also acts as each Funds' administrator and is responsible
for such functions as monitoring compliance with all applicable federal and
state laws.
Berger LLC has been in the investment advisory business for
25 years. It serves as investment advisor or sub-advisor to mutual funds and
institutional investors and had assets under management of approximately $6.1
billion as of December 31, 1999. Berger LLC is a subsidiary of Stilwell
Management Inc. ("Stilwell"), which owns more than 80% of Berger LLC, and is an
indirect subsidiary of Stilwell Financial, Inc. ("Stilwell Financial"), which in
turn is a wholly owned subsidiary of Kansas City Southern Industries, Inc.
("KCSI"). KCSI is a publicly traded holding company with principal operations in
rail transportation, through its subsidiary The Kansas City Southern Railway
Company, and financial asset management businesses. Stilwell also owns
approximately 32% of the outstanding shares of DST Systems, Inc. ("DST"), a
publicly traded information and transaction processing company which acts as the
Funds' sub-transfer agent. DST, in turn, owns 100% of DST Securities, a
registered broker-dealer, which executes portfolio trades for the Funds.
KCSI announced its intention to separate the transportation
and financial services segments through a proposed dividend of the stock of
Stilwell Financial. On July 12, 1999, KCSI announced that the Internal Revenue
Service issued a favorable tax ruling permitting KCSI to separate its financial
services segment from its transportation segment. Completion of this separation
is expected to occur in the year 2000.
-27-
<PAGE>
BBOI WORLDWIDE LLC - INVESTMENT ADVISOR
BBOI Worldwide LLC ("BBOI Worldwide"), 210 University
Boulevard, Denver, CO 80206, is the investment advisor to the Berger/BIAM
International Portfolio (the "Portfolio"), in which all the investable assets of
the Berger/BIAM International Fund are invested. BBOI Worldwide oversees,
evaluates and monitors the investment advisory services provided to the
Portfolio by the Portfolio's sub-advisor and is responsible for furnishing
general business management and administrative services to the Portfolio.
BBOI Worldwide is a Delaware limited liability company formed
in 1996. BBOI Worldwide is a joint venture between Berger LLC and Bank of
Ireland Asset Management (U.S.) Limited ("BIAM"), the sub-advisor to the
Portfolio, which have both been in the investment advisory business for many
years.
Berger LLC and BIAM each own a 50% membership interest in BBOI
Worldwide and each have an equal number of representatives on BBOI Worldwide's
Board of Managers. Berger LLC's role in the joint venture is to provide
administrative services, and BIAM's role is to provide international and global
investment management expertise. Agreement of representatives of both Berger LLC
and BIAM is required for all significant management decisions.
On January 19, 2000, Berger LLC and BIAM entered into an
agreement to dissolve BBOI Worldwide. The dissolution of BBOI will have no
effect on the investment advisory services provided to the Fund or on the fees
borne by the Fund for advisory services. Contingent upon shareholder approval,
when BBOI Worldwide is dissolved, Berger LLC will become the Fund's advisor and
BIAM will continue to be responsible for day-to-day management of the Fund's
portfolio as sub-advisor. If approved by shareholders, these advisory changes
are expected to take place in the first half of this year.
BANK OF IRELAND ASSET MANAGEMENT (U.S.) LIMITED - SUB-ADVISOR
As permitted in its Investment Advisory Agreement with the
Berger/BIAM International Portfolio, BBOI Worldwide has delegated day-to-day
investment management responsibility for the Portfolio to BIAM. As sub-advisor,
BIAM manages the investments in the Portfolio and determines what securities and
other investments will be purchased, retained, sold or loaned, consistent with
the investment objective and policies established by the trustees. BIAM's main
offices are at 26 Fitzwilliam Place, Dublin 2, Ireland. BIAM maintains a
representative office at 20 Horseneck Lane, Greenwich, CT 06830. BIAM is an
indirect wholly-owned subsidiary of Bank of Ireland, a publicly traded,
diversified financial services group with business operations worldwide. Bank of
Ireland provides investment management services through a network of related
companies, including BIAM which serves primarily institutional clients in the
United States and Canada. Bank of Ireland and its affiliates managed assets for
clients worldwide in excess of $42.9 billion as of September 30, 1999.
Bank of Ireland or its affiliates may have deposit, loan or
other commercial or investment banking relationships with the issuers of
securities which may be purchased by the Portfolio, including outstanding loans
to such issuers which could be repaid in whole or in part with the proceeds of
securities purchased by the Portfolio. Federal law prohibits BIAM, in making
investment decisions, from using material non-public information in its
possession or in the possession of any of its affiliates. In addition, in making
investment decisions for the Portfolio, BIAM will not take into consideration
whether an issuer of securities proposed for purchase or sale by the Portfolio
is a customer of Bank of Ireland or its affiliates.
PERKINS, WOLF, MCDONNELL & COMPANY - SUB-ADVISOR
Perkins, Wolf, McDonnell & Company ("PWM"), 53 West Jackson
Boulevard, Suite 818, Chicago, Illinois 60604, has been engaged as the
investment sub-advisor for the Berger Small Cap Value Fund and the Berger Mid
Cap Value Fund. PWM was organized in 1980 under the name Mac-Per-Wolf Co. to
operate as a securities broker-dealer. In September 1983, it changed its name to
Perkins, Wolf, McDonnell & Company. PWM is a member of the National Association
of Securities Dealers, Inc. (the "NASD") and, in 1984, became registered as an
investment advisor with the SEC.
PWM was the investment advisor of the Berger Small Cap Value
Fund from the date the Fund commenced operations in 1985 to February 1997. PWM
became the investment sub-advisor to the Fund on February 14, 1997, following
shareholder approval of a new Sub-Advisory Agreement between Berger LLC as
advisor and PWM as sub-advisor. PWM has been the investment sub-adviser to the
Berger Mid Cap Value Fund since it commenced operations in August 1998.
-28-
<PAGE>
Thomas M. Perkins and Robert H. Perkins, as co-investment
managers, are responsible for the day-to-day investment management of the Berger
Small Cap Value Fund and the Berger Mid Cap Value Fund. Robert Perkins has been
an investment manager since 1970 and serves as President and a director of PWM.
Thomas Perkins has been an investment manager since 1974 and joined PWM as a
portfolio manager in 1998. Robert Perkins owns 49% of PWM. Robert Perkins and
Thomas Perkins are brothers. Gregory E. Wolf owns 20% of PWM and serves as its
Treasurer and a director.
BAY ISLE FINANCIAL CORPORATION - SUB-ADVISOR
Bay Isle Financial Corporation ("Bay Isle"), 160 Sansome
Street, 17th Floor, San Francisco, CA 94104, is the investment sub-advisor for
the Berger Information Technology Fund. Bay Isle has been in the investment
advisory business since 1986. Bay Isle serves as investment advisor or
sub-advisor to mutual funds, institutional investors and individual separate
accounts.
Bay Isle served as investment advisor to the Berger
Information Technology Fund (originally known as the InformationTech
100-Registered Trademark- Fund) from its inception in April 1997 until July
1999, when the InformationTech 100-Registered Trademark- Fund was reorganized
into the Information Technology Fund with shareholder approval. At that time,
Bay Isle became the investment sub-advisor to the Fund under a Sub-Advisory
Agreement between Berger LLC as advisor and Bay Isle as sub-advisor. As
sub-advisor, Bay Isle provides day-to-day management of the Fund's investment
operations.
William F. K. Schaff is primarily responsible for the
day-to-day investment decisions for the Berger Information Technology Fund. Mr.
Schaff is a co-founder and controlling person of Bay Isle and serves as its
Chief Investment Officer and a director. Mr. Schaff has been managing accounts
of Bay Isle clients since 1987. Gary G. Pollock is also a co-founder and
controlling person of Bay Isle and serves as its President and a director.
In addition to its other activities, Bay Isle maintains the
INFORMATIONWEEK-Registered Trademark- 100 Index, an unmanaged index of the
stocks of 100 companies in the information technology industries.
INFORMATIONWEEK-Registered Trademark- is a registered trademark of CMP Media,
which is not affiliated with Bay Isle or the Fund. Mr. Schaff also writes
articles on investments for INFORMATIONWEEK magazine, a publication of CMP Media
covering information technology-related topics. CMP Media compensates Bay Isle
for managing the Index and for Mr. Schaff's articles.
INVESTMENT ADVISORY AGREEMENTS
Under the Investment Advisory Agreements between each Fund and
its advisor, the advisor is generally responsible for furnishing continuous
advice and making investment decisions as to the acquisition, holding or
disposition of securities or other assets which each Fund may own or contemplate
acquiring from time to time. Each Investment Advisory Agreement provides that
the investment advisor shall not be liable for any error of judgment or mistake
of law or for any loss arising out of any investment or for any act or omission
taken with respect to the Fund, except for willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties thereunder and except to the extent
otherwise provided by law.
Under each Investment Advisory Agreement in effect, the
advisor is compensated for its services by the payment of a fee at an annual
rate, calculated as a percentage of the average daily net assets of the Fund.
The following schedule reflects the advisory fees charged to
the Funds for the fiscal year ended September 30, 1999:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
FUND ADVISOR INVESTMENT ADVISORY FEE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Berger Information Technology Fund Berger LLC(1) 0.90%(1)
- --------------------------------------------------------------------------------------------------------
Berger New Generation Fund Berger LLC 0.90%(2)
- --------------------------------------------------------------------------------------------------------
Berger Select Fund Berger LLC 0.75%
- --------------------------------------------------------------------------------------------------------
Berger Small Company Growth Fund Berger LLC 0.90%(3)
- --------------------------------------------------------------------------------------------------------
-29-
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
FUND ADVISOR INVESTMENT ADVISORY FEE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Berger Small Cap Value Fund Berger LLC (4) 0.90% (4)
- --------------------------------------------------------------------------------------------------------
Berger Mid Cap Growth Fund Berger LLC 0.75% (2)
- --------------------------------------------------------------------------------------------------------
Berger Mid Cap Value Fund Berger LLC (4) 0.75% (4)
- --------------------------------------------------------------------------------------------------------
Berger Growth Fund Berger LLC 0.75% (3)
- --------------------------------------------------------------------------------------------------------
Berger/BIAM International Fund (6) BBOI Worldwide LLC (5) 0.90% (5)
- --------------------------------------------------------------------------------------------------------
Berger Growth and Income Fund Berger LLC 0.75% (3)
- --------------------------------------------------------------------------------------------------------
Berger Balanced Fund Berger LLC 0.70% (2)
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Fund is sub-advised by Bay Isle. See text preceding and following table.
Under a written contract, the Fund's investment advisor waives its fee or
reimburses the Fund for expenses to the extent that, at any time during the
life of the Fund, the annual operating expenses for the Investor Shares
class of the Fund in any fiscal year, including the investment advisory fee
and the 12b-1 fee, but excluding brokerage commissions, interest, taxes and
extraordinary expenses, exceed 2.00% of the Fund's average daily net assets
attributable to the Investor Shares for that fiscal year. The contract also
provides that the advisor will waive an additional amount of its fees or
reimburse an additional amount of expenses to the extent necessary to keep
its fee waiver and reimbursement for the Investor Shares class
proportionate to its fee waiver and reimbursement for the Fund's other
outstanding share class. The contract may not be terminated or amended
except by a vote of the Fund's Board of Trustees. The investment advisory
fee is allocated among the Investor Shares and the other class of the Fund
on the basis of net assets attributable to each such class.
(2) Under a written contract, the Fund's investment advisor waives its fee to
the extent that, at any time during the life of the Fund, the Fund's annual
operating expenses (or, if applicable, for the Investor Shares class of the
Fund) in any fiscal year, including the investment advisory fee and the
12b-1 fee, but excluding brokerage commissions, interest, taxes and
extraordinary expenses, exceed 1.90% in the case of the Investor Shares
class of the Berger New Generation Fund, 2.00% in the case of the Berger
Mid Cap Growth Fund, and 1.50% in the case of the Berger Balanced Fund, of
the average daily net assets of the Fund (or applicable class) for that
fiscal year. The advisor's contract with the Berger Mid Cap Growth Fund and
the Berger Balanced Fund may not be terminated or amended except by a vote
of the Fund's Board of Trustees. The agreement with the Berger New
Generation Fund may be terminated by the advisor upon 90 days' prior
written notice to the Fund. For the Berger New Generation Fund, the
investment advisory fee is allocated among the Investor Shares and the
other class of the Fund on the basis of net assets attributable to each
such class.
(3) Under a written agreement, the Fund's investment advisor waives its fee to
the extent that the annual operating expenses for the Investor Shares class
of the Fund in any fiscal year, including the investment advisory fee, but
excluding the 12b-1 fee, brokerage commissions, interest, taxes and
extraordinary expenses, exceed 2-1/2% of the first $30,000,000 of average
daily net assets, plus 2% of the next $70,000,000, plus 1-1/2% of the
balance of the average daily net assets of the Fund attributable to the
Investor Shares for that fiscal year. The agreement may be terminated by
the advisor upon 90 days' prior written notice to the Fund. The investment
advisory fee is allocated among the Investor Shares and the other class of
the Fund on the basis of net assets attributable to each such class.
(4) Fund is sub-advised by PWM. See text preceding and following table. For the
Berger Small Cap Value Fund, the investment advisory fee is allocated among
the Investor Shares and the other class of the Fund on the basis of net
assets attributable to each such class.
(5) The Berger/BIAM International Fund bears its pro rata portion of the fee
paid by the Berger/BIAM International Portfolio to BBOI Worldwide as the
advisor. The Portfolio is sub-advised by BIAM. See text preceding and
following table. Under a written contract, the Portfolio's investment
advisor waives its investment advisory fee to the extent that, at any time
during the life of the Portfolio, the Portfolio's annual operating expenses
in any fiscal year, including the investment advisory fee and custodian
fees, but excluding brokerage commissions, interest, taxes and
extraordinary expenses, exceed 1.00% of the Portfolio's average daily net
assets for that fiscal year. The contract may not be terminated or amended
except by a vote of the Portfolio's Board of Trustees. Any such reduction
in the advisory fee paid by the Portfolio will also reduce the pro rata
share of the advisory fee borne indirectly by the Berger/BIAM International
Fund.
Effective October 1, 1999, the investment advisory fee charged to the Funds was
reduced according to the following schedule:
<TABLE>
<CAPTION>
Fund Average Daily Net Assets Annual Rate
<S> <C> <C>
Berger Select Fund First $500 million .75%
Berger Mid Cap Growth Fund Next $500 million .70%
Berger Mid Cap Value Fund Over $1 billion .65%
Berger Growth Fund
Berger Growth and Income Fund
-----------------------------------------------------------------------------------------------
Berger Information Technology Fund First $500 million .85%
Berger New Generation Fund Next $500 million .80%
Berger Small Company Growth Fund Over $1 billion .75%
Berger Small Cap Value Fund
-30-
<PAGE>
<CAPTION>
Fund Average Daily Net Assets Annual Rate
-----------------------------------------------------------------------------------------------
<S> <C> <C>
Berger Balanced Fund First $1 billion .70%
Over $1 billion .65%
</TABLE>
Each Fund's current Investment Advisory Agreement will
continue in effect until the last day of April 2000 or 2001, and thereafter from
year to year if such continuation is specifically approved at least annually by
the directors or trustees or by vote of a majority of the outstanding shares of
the Fund and in either case by vote of a majority of the directors or trustees
who are not "interested persons" (as that term is defined in the 1940 Act) of
the Fund or the advisor. Each Agreement is subject to termination by the Fund or
the advisor on 60 days' written notice, and terminates automatically in the
event of its assignment.
Under the Sub-Advisory Agreement between the advisors and the
sub-advisors for the Berger/BIAM International Portfolio, the Berger Small Cap
Value Fund, the Berger Mid Cap Value Fund and the Berger Information Technology
Fund, the sub-advisor is responsible for day-to-day investment management. The
sub-advisor manages the investments and determines what securities and other
investments will be acquired, held or disposed of, consistent with the
investment objective and policies established by the trustees. Each Sub-Advisory
Agreement provides that the sub-advisor shall not be liable for any error of
judgment or mistake of law or for any loss arising out of any investment or for
any act or omission taken with respect to the Fund, except for willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of reckless disregard of its obligations and duties thereunder and
except to the extent otherwise provided by law.
No fees are paid directly to the sub-advisors by the Funds.
PWM, as the sub-advisor of the Berger Small Cap Value Fund, receives from the
advisor a fee at the annual rate of 0.425% of the first $500 million of average
daily net assets of the Fund, 0.40% of the next $500 million, and 0.375% of any
amount in excess of $1 billion. As the sub-advisor of the Berger Mid Cap Value
Fund, PWM receives from the advisor a fee at the annual rate of 0.75% of the
first $50 million of average daily net assets of the Fund, 0.375% of the next
$50 million and 0.20% of any amount in excess of $100 million, subject to a
minimum of $400,000 per year for the first 2-1/2 years. BIAM, as the sub-advisor
of the Berger/BIAM International Portfolio, receives from the advisor a fee at
the annual rate of 0.45% of the average daily net assets of the Portfolio.
During certain periods, BIAM may voluntarily waive all or a portion of its fee
under the Sub-Advisory Agreement, which will not affect the fee paid by the
Portfolio to the advisor. Bay Isle, as the sub-advisor of the Berger Information
Technology Fund, receives from the advisor a fee at the annual rate of 0.45% of
the average daily net assets of the Fund.
The Sub-Advisory Agreements will continue in effect until
April 2000 or 2001, and thereafter from year to year if such continuation is
specifically approved at least annually by the trustees or by vote of a majority
of the outstanding shares of the Fund and in either case by vote of a majority
of the trustees of the Fund who are not "interested persons" (as that term is
defined in the Investment Company Act of 1940) of the Fund or the advisor or the
sub-advisor. The Sub-Advisory Agreements are subject to termination by the Fund
or the sub-advisor on 60 days' written notice, and terminate automatically in
the event of their assignment and in the event of termination of the related
Investment Advisory Agreement.
OTHER ARRANGEMENTS BETWEEN BERGER LLC AND PWM
Berger LLC and PWM entered into an Agreement, dated November
18, 1996, as amended January 27, 1997, April 8, 1998 and November 17, 1999 (the
"November 18 Agreement"), under which, among other things, PWM agreed that, so
long as Berger LLC acts as the advisor to the Berger Small Cap Value Fund, and
PWM provides sub-advisory or other services in connection with the Fund, PWM
will not manage or provide advisory services to any registered investment
company that is in direct competition with the Fund. PWM has agreed to the same
restriction with respect to the Berger Mid Cap Value Fund.
The November 18 Agreement also provides that if the
Sub-Advisory Agreement for the Berger Small Cap Value Fund is terminated before
February 14, 2005 (other than for cause), and provided Berger LLC remains as the
Fund's Advisor, Berger LLC and PWM will enter into a consulting agreement for
PWM to provide consulting services to Berger LLC with respect to the Fund,
subject to any requisite approvals under the Investment Company Act of 1940.
Under the Consulting Agreement, PWM would provide training and assistance to
Berger LLC analysts and marketing support appropriate to the Fund and would be
paid a fee at an annual rate of 0.10% of the first $100 million of average daily
net assets of the Fund, 0.05% of the next $100 million and 0.02% on any part in
excess of $200 million. No part of the consulting fee would be borne by the
Fund.
OTHER ARRANGEMENTS BETWEEN BERGER LLC AND BAY ISLE
-31-
<PAGE>
Berger LLC and Bay Isle have formed a joint venture to provide
asset management services to certain private accounts. In connection with the
formation of that joint venture, Berger LLC purchased from Bay Isle owners
William F. K. Schaff and Gary G. Pollock the right that, if either Mr. Schaff or
Mr. Pollock ever desires to sell any of his Bay Isle shares in the future, they
will together first offer to sell shares to Berger LLC aggregating at least 80%
of the total outstanding shares of Bay Isle at an agreed price. If Berger LLC
elects to purchase the Bay Isle shares offered, the parties have agreed to use
their best efforts to have 5-year employment agreements entered into between Bay
Isle and Messrs. Schaff and Pollock. Consummation of any such purchase of Bay
Isle shares by Berger LLC would be subject to a number of conditions, including
any required approval by Fund shareholders under the Investment Company Act of
1940. Bay Isle and Messrs. Schaff and Pollock are also compensated by Berger LLC
for providing administrative or consulting services relating to their joint
venture private account business.
TRADE ALLOCATIONS
While investment decisions for the Funds are made
independently by the advisor or sub-advisor, the same investment decision may be
made for a Fund and one or more accounts advised by the advisor or sub-advisor.
In this circumstance, should purchase and sell orders of the same class of
security be in effect on the same day, the orders for such transactions may be
combined by the advisor or sub-advisor in order to seek the best combination of
net price and execution for each. Client orders partially filled will, as a
general matter, be allocated pro rata in proportion to each client's original
order, although exceptions may be made to avoid, among other things, odd lots
and de minimis allocations. Execution prices for a combined order will be
averaged so that each participating client receives the average price paid or
received. While in some cases, this policy might adversely affect the price paid
or received by a Fund or other participating accounts, or the size of the
position obtained or liquidated, the advisor or sub-advisor will aggregate
orders if it believes that coordination of orders and the ability to participate
in volume transactions will result in the best overall combination of net price
and execution.
RESTRICTIONS ON PERSONAL TRADING
Berger LLC permits its directors, officers and employees to
purchase and sell securities for their own accounts in accordance with a policy
regarding personal investing in Berger LLC's Code of Ethics. The policy requires
all covered persons to conduct their personal securities transactions in a
manner which does not operate adversely to the interests of the Fund or Berger
LLC's other advisory clients. Directors and officers of Berger LLC, investment
personnel and other designated persons deemed to have access to current trading
information ("access persons") are required to pre-clear all transactions in
securities not otherwise exempt under the policy. Requests for authority to
trade will be denied pre-clearance when, among other reasons, the proposed
personal transaction would be contrary to the provisions of the policy or would
be deemed to adversely affect any transaction then known to be under
consideration for or currently being effected on behalf of any client account,
including the Funds.
In addition to the pre-clearance requirements described above,
the policy subjects directors and officers of Berger LLC, investment personnel
and other access persons to various trading restrictions and reporting
obligations. All reportable transactions are reviewed for compliance with the
policy. The policy is administered by Berger LLC and the provisions of the
policy are subject to interpretation by and exceptions authorized by its board
of directors.
PWM has adopted a Code of Ethics which is substantially
similar to the Code adopted by Berger LLC. BBOI Worldwide has also adopted a
Code of Ethics substantially similar to the Code adopted by Berger LLC covering
all board members, officers, employees and other access persons (as defined
below) of BBOI Worldwide who are not also covered by an approved Code of Ethics
of an affiliated person who is an investment advisor ("covered persons"). At
present, there are no persons who would be covered by BBOI Worldwide's Code of
Ethics who are not also covered by the Code of Ethics of Berger LLC or BIAM,
which are both investment advisors affiliated with BBOI Worldwide.
BIAM has adopted a Code of Ethics which restricts its
officers, employees and other staff from personal trading in specified
circumstances, including among others prohibiting participation in initial
public offerings, prohibiting dealing in a security for the seven days before
and after any trade in that security on behalf of clients, prohibiting trading
in a security while an order is pending for any client on that same security,
and requiring profits from short-term trading in securities (purchase and sale
within a 60-day period) to be forfeited. In addition, staff of BIAM must report
all of their personal holdings in securities annually and must disclose their
holdings in any private company if an investment in that same company is being
considered for clients. Staff of BIAM are required to pre-clear all transactions
in securities not otherwise exempt under the Code of Ethics and must instruct
their broker to provide BIAM with duplicate confirmations of all such personal
trades.
-32-
<PAGE>
Bay Isle permits its officers, directors, employees and
consultants to purchase and sell securities for their own accounts and accounts
of related persons in accordance with provisions governing personal securities
trading in Bay Isle's code of ethics and related internal policies. Employees
must wait 3 days between the time a new recommendation or opinion change is made
and the time the employee may trade in those securities in their own or related
accounts, or alternatively may ask that their transaction be added to a "block"
trade that will be made for a group of clients. Any employee trade not included
in a "block" trade made must be pre-cleared if the trade exceeds certain
specified volume limits. Volume limits are set with the intent of requiring
prior approval of any trade that could potentially cause changes in the market
price of the security in question. In addition, no employee may sell (or buy)
any security which he or she has bought (or sold) within the past 5 trading days
unless a loss is realized on closing the position. No employee, officer or
director of Bay Isle may acquire any security in an initial public offering or
in a private placement without prior written approval from Bay Isle's President.
Any Bay Isle employee who is an "access person" of the Fund will also be subject
to the provisions of Berger LLC's Code of Ethics, if those provisions are more
restrictive than the provisions of Bay Isle's own code. Each employee must
acknowledge quarterly that they are in compliance with the Bay Isle code of
ethics and related policies.
5. EXPENSES OF THE FUNDS
ALL FUNDS EXCEPT THE BERGER/BIAM INTERNATIONAL FUND
In addition to paying an investment advisory fee to its
advisor, each Fund (other than the Berger/BIAM International Fund) pays all of
its expenses not assumed by its advisor, including, but not limited to,
custodian and transfer agent fees, legal and accounting expenses, administrative
and record keeping expenses, interest charges, federal and state taxes, costs of
share certificates, expenses of shareholders' meetings, compensation of
directors or trustees who are not interested persons of Berger LLC, expenses of
printing and distributing reports to shareholders and federal and state
administrative agencies, and all expenses incurred in connection with the
execution of its portfolio transactions, including brokerage commissions on
purchases and sales of portfolio securities, which are considered a cost of
securities of each Fund. Each Fund also pays all expenses incurred in complying
with all federal and state laws and the laws of any foreign country applicable
to the issue, offer or sale of shares of the Fund, including, but not limited
to, all costs involved in preparing and printing prospectuses for shareholders
of the Fund.
Under a separate Administrative Services Agreement with
respect to each of such Funds, Berger LLC performs certain administrative and
recordkeeping services not otherwise performed by the Fund's custodian and
recordkeeper, including the preparation of financial statements and reports to
be filed with the Securities and Exchange Commission and state regulatory
authorities. For the fiscal year ended September 30, 1999, each Fund paid Berger
LLC a fee, before any waivers, at an annual rate of 0.01% of its average daily
net assets for such services. Effective October 1, 1999, Berger LLC eliminated
the 0.01% administrative fee charged to the Funds. The administrative services
fees may be changed by the directors or trustees without shareholder approval.
In addition, Effective October 1, 1999, the investment advisory fee charged to
certain funds was reduced. The advisory fee reductions are reflected earlier
under Investment Advisory Agreements.
The following tables show the total dollar amounts of advisory
fees and administrative services fees paid by each of such Funds for the periods
indicated and the amount of such fees waived on account of excess expenses under
applicable expense limitations. Except where noted, these amounts were paid to
Berger LLC.
BERGER INFORMATION TECHNOLOGY FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Advisory Fee
Fiscal Year Investment Administrative Waiver and Expense TOTAL
Ended(1) Advisory Fee(2) Service Fee(3) Reimbursement(4)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sept. 30, 1999 $ 97,000 $ 11,000 $ (47,000) $ 61,000
- --------------------------------------------------------------------------------------------------------------------
Feb. 28, 1999 $ 68,000 $ 30,000 $ (84,000) $ 14,000
- --------------------------------------------------------------------------------------------------------------------
Feb. 28, 1998(5) $ 8,000 $ 27,000 $ (35,000) $ 0
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund's fiscal year changed from February 28 to September 30 as part of a
reorganization effective July 1999.
(2) Under the advisory agreement in effect prior to the reorganization
referenced in note (1), the Fund's predecessor paid an advisory fee at an annual
rate of 0.95% of its average daily net assets to Bay Isle. As part of the
reorganization, the investment advisory fee of 0.90% payable to Berger LLC came
into effect.
-33-
<PAGE>
Effective October 1, 1999, the investment advisory fee charged to the Fund was
reduced to 0.85% of the first $500 million of average net assets; 0.80% on the
next $500 million of average net assets; and 0.75% of average net assets
exceeding $1 billion.
(3) Under the administrative service agreement in effect prior to the
reorganization referenced in note (1), the Fund's predecessor paid to a third
party administrator an administrative services fee at the annual rate of 0.20%
of average net assets, subject to a $30,000 annual minimum. As part of the
reorganization, the administrative service fee of 0.01% payable to Berger LLC
came into effect. Effective October 1, 1999, Berger LLC eliminated the 0.01%
administrative fee charged to the Funds.
(4) Prior to the reorganization referenced in note (1), the Fund's prior advisor
had voluntarily agreed to reduce its fees and/or pay expenses of the Fund to
ensure that the Fund's expenses did not exceed 1.50%. During 1998, in addition
to waiving its entire advisory fee and reimbursing the Fund for the entire
administrative service fee, the Fund's prior advisor reimbursed the Fund for
$59,000 of additional expenses in order to meet the applicable expense
limitation. As part of the reorganization, the current expense limitation
arrangements came into effect with Berger LLC, which are described in note (2)
to the table appearing above under the heading "Investment Advisory Agreements."
(5) The Fund was the accounting survivor in the reorganization referenced in
note (1). Accordingly, this covers the period April 8, 1997 (commencement of
operations of the predecessor) to February 28, 1998, of the Fund's predecessor.
BERGER NEW GENERATION FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Fiscal Year Ended Investment Administrative Advisory Fee TOTAL
September 30, Advisory Fee Service Fee Waiver
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1999 $1,714,000 $19,000 $ 0 $1,733,000
- --------------------------------------------------------------------------------------------------------------------
1998 $1,229,000 $14,000 $ 0 $1,243,000
- --------------------------------------------------------------------------------------------------------------------
1997 $ 962,000 $20,000 $ 0 $ 982,000
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
BERGER SELECT FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Fiscal Year Ended Investment Administrative Advisory Fee TOTAL
September 30, Advisory Fee Service Fee Waiver
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1999 $740,000 $10,000 $ 0 $750,000
- --------------------------------------------------------------------------------------------------------------------
1998* $143,000 $2,000 $ 0 $145,000
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
* Covers period from December 31, 1997 (commencement of operations) through the
end of the Fund's first fiscal year on September 30, 1998.
BERGER SMALL COMPANY GROWTH FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Fiscal Year Ended Investment Administrative Advisory Fee
September 30, Advisory Fee Service Fee Waiver TOTAL
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1999 $5,582,000 $ 62,000 $ 0 $5,644,000
- --------------------------------------------------------------------------------------------------------------------
1998 $6,984,000 $ 78,000 $ 0 $7,062,000
- --------------------------------------------------------------------------------------------------------------------
1997 $6,831,000 $ 78,000 $ 0 $6,909,000
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
BERGER SMALL CAP VALUE FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Fiscal Year Ended Investment Administrative Advisory Fee TOTAL
September 30, Advisory Fee Service Fee Waiver
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1999 $3,996,000 $44,000 $ 0 $4,040,000
- --------------------------------------------------------------------------------------------------------------------
1998 $1,515,000 $17,000 $ 0 $1,532,000
- --------------------------------------------------------------------------------------------------------------------
1997*^ $ 418,000 $ 4,000 $ 0 $ 422,000
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
* On February 14, 1997, new fee arrangements came into effect for the Fund with
shareholder approval, at which time Berger LLC became the Fund's advisor and
administrator and PWM, the Fund's former investment advisor, became the Fund's
sub-advisor.
-34-
<PAGE>
^ Under the Investment Advisory Agreement in effect for the Fund until February
14, 1997, the Fund paid an advisory fee to PWM at an annual rate of 1.00% of the
Fund's average daily net assets. The Fund's fiscal year end was changed from
December 31 to September 30 during 1997. Accordingly, the amounts shown for 1997
cover the period January 1, 1997, through September 30, 1997.
BERGER MID CAP GROWTH FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Fiscal Year Ended Investment Administrative Advisory Fee TOTAL
September 30, Advisory Fee Service Fee Waiver
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1999 $88,000 $1,000 $ 0 $89,000
- --------------------------------------------------------------------------------------------------------------------
1998* $20,000 $ 0 $(12,000) $ 8,000
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
* Covers period from December 31, 1997 (commencement of operations) through the
end of the Fund's first fiscal year on September 30, 1998.
BERGER MID CAP VALUE FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Fiscal Year Ended Investment Administrative Advisory Fee TOTAL
September 30, Advisory Fee Service Fee Waiver
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1999 $176,000 $2,000 $ 0 $178,000
- --------------------------------------------------------------------------------------------------------------------
1998* $20,000 $ 0 $ 0 $20,000
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
* Covers period from August 12, 1998 (commencement of operations) through the
end of the Fund's first fiscal year on September 30, 1998.
BERGER GROWTH FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Fiscal Year Ended Investment Administrative Advisory Fee TOTAL
September 30, Advisory Fee Service Fee Waiver
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1999 $10,835,000 $144,000 $ 0 $10,979,000
- --------------------------------------------------------------------------------------------------------------------
1998 $12,939,000 $173,000 $ 0 $13,112,000
- --------------------------------------------------------------------------------------------------------------------
1997 $14,424,000 $192,000 $ 0 $14,616,000
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
BERGER GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Fiscal Year Ended Investment Administrative Advisory Fee TOTAL
September 30, Advisory Fee Service Fee Waiver
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1999 $2,740,000 $37,000 $ 0 $2,777,000
- --------------------------------------------------------------------------------------------------------------------
1998 $2,539,000 $ 34,000 $ 0 $2,573,000
- --------------------------------------------------------------------------------------------------------------------
1997 $2,442,000 $ 32,000 $ 0 $2,474,000
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
BERGER BALANCED FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Fiscal Year Ended Investment Administrative Advisory Fee TOTAL
September 30, Advisory Fee Service Fee Waiver
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1999 $616,000 $ 9,000 $ 0 $625,000
- --------------------------------------------------------------------------------------------------------------------
1998 $168,000 $ 2,000 $(16,000) $154,000
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
-35-
<PAGE>
Each of the Funds has appointed Investors Fiduciary Trust
Company ("IFTC"), 801 Pennsylvania, Kansas City, MO 64105, as its recordkeeping
and pricing agent. In addition, IFTC also serves as the Funds' custodian,
transfer agent and dividend disbursing agent. IFTC has engaged DST Systems, Inc.
("DST"), P.O. Box 219958, Kansas City, MO 64121, as sub-agent to provide
transfer agency and dividend disbursing services for the Funds. Approximately
32% of the outstanding shares of DST are owned by Stilwell.
As recordkeeping and pricing agent, IFTC calculates the daily
net asset value of each Fund and performs certain accounting and recordkeeping
functions required by the Funds. The Funds pay IFTC a monthly base fee plus an
asset-based fee. IFTC is also reimbursed for certain out-of-pocket expenses.
IFTC, as custodian, and its subcustodians have custody and
provide for the safekeeping of the Funds' securities and cash, and receive and
remit the income thereon as directed by the management of the Funds. The
custodian and subcustodians do not perform any managerial or policy-making
functions for the Funds. For its services as custodian, IFTC receives an
asset-based fee plus certain transaction fees and out-of-pocket expenses.
As transfer agent and dividend disbursing agent, IFTC (through
DST, as sub-agent) maintains all shareholder accounts of record; assists in
mailing all reports, proxies and other information to the Funds' shareholders;
calculates the amount of, and delivers to the Funds' shareholders, proceeds
representing all dividends and distributions; and performs other related
services. For these services, IFTC receives a fee from the Funds at an annual
rate of $14.00 per open Fund shareholder account, subject to preset volume
discounts, plus certain transaction fees and fees for closed accounts, and is
reimbursed for out-of-pocket expenses, which fees in turn are passed through to
DST as sub-agent.
All of IFTC's fees are subject to reduction pursuant to an
agreed formula for certain earnings credits on the cash balances of the Funds.
Earnings credits received by each Fund can be found on the Fund's Statement of
Operations in the Annual Report incorporated by reference into this Statement of
Additional Information.
BERGER/BIAM INTERNATIONAL FUND
The Berger/BIAM International Fund is allocated and bears
indirectly its pro rata share of the aggregate annual operating expenses of the
Berger/BIAM International Portfolio, since all of the investable assets of the
Fund are invested in the Portfolio.
Expenses of the Portfolio include, among others, its pro rata
share of the expenses of Berger/BIAM Worldwide Portfolios Trust, of which the
Portfolio is a series, such as: expenses of registering the Trust with
securities authorities; the compensation of its independent trustees; expenses
of preparing reports to investors and to governmental offices and commissions;
expenses of meetings of investors and trustees of the Trust; legal fees; and
insurance premiums of the Trust. Expenses of the Portfolio also include, among
others, the fees payable to the advisor under the Investment Advisory Agreement;
expenses connected with the execution of portfolio transactions, including
brokerage commissions on purchases and sales of portfolio securities (which are
considered a cost of securities of the Portfolio); custodian fees; auditors'
fees; interest and taxes imposed on the Portfolio; transfer agent, recordkeeping
and pricing agent fees; and such other non-recurring and extraordinary items as
may arise from time to time.
Expenses of the Berger/BIAM International Fund include, among
others, its pro rata share of the expenses of the Berger/BIAM Worldwide Funds
Trust, of which the Fund is a series, such as: expenses of registering the Trust
with securities authorities; expenses of meetings of the shareholders of the
Trust; and legal fees. Expenses of the Fund also include, among others,
registration and filing fees incurred in registering shares of the Fund with
securities authorities; 12b-1 fees; taxes imposed on the Fund; the fee payable
to the Advisor under the Administrative Services Agreement; and such other
non-recurring and extraordinary items as may arise from time to time.
SERVICE ARRANGEMENTS FOR THE FUND. Under an Administrative
Services Agreement with the Berger/BIAM International Fund, BBOI Worldwide
serves as the administrator of the Fund. In this capacity, it is responsible for
administering and managing all aspects of the Fund's day-to-day operations,
subject to the oversight of the trustees of the Fund. BBOI Worldwide is
responsible, at its expense, for furnishing (or procuring other parties to
furnish) all administrative services reasonably necessary for the operation of
the Fund, including recordkeeping and pricing services, custodian services,
transfer agency and dividend disbursing services, tax and audit services,
insurance, printing and mailing to shareholders of prospectuses and other
required communications, and certain other administrative and recordkeeping
services, such as coordinating matters
-36-
<PAGE>
relating to the operations of the Fund, monitoring the Fund's status as a
"regulated investment company" under the Internal Revenue Code, coordinating
registration of sufficient Fund shares under federal and state securities laws,
arranging for and supervising the preparation of registration statements, tax
returns, proxy materials, financial statements and reports for filing with
regulatory authorities and distribution to shareholders of the Fund. Under the
Administrative Services Agreement, the Fund pays BBOI Worldwide a fee at an
annual rate equal to the lesser of (i) 0.45% of its average daily net assets, or
(ii) BBOI Worldwide's annual cost to provide or procure these services
(including the fees of any services providers whose services are procured by
BBOI Worldwide), plus an additional 0.02% of the Fund's average daily net
assets. The trustees of the Fund regularly review amounts paid to and
expenditures incurred by BBOI Worldwide pursuant to the Administrative Services
Agreement. In addition, in the event that BBOI Worldwide's duties under the
Administrative Services Agreement are delegated to another party, BBOI Worldwide
may take into account, in calculating the cost of such services, only the costs
incurred by such other party in discharging the delegated duties.
Under a Sub-Administration Agreement between BBOI Worldwide
and Berger LLC, Berger LLC has been delegated the responsibility to perform
certain of the administrative and recordkeeping services required under the
Administrative Services Agreement and to procure, at BBOI Worldwide's expense,
third parties to provide the services not provided by Berger LLC. Under the
Sub-Administration Agreement, Berger LLC is paid a fee by BBOI Worldwide of
0.25% of the Fund's average daily net assets for its services. During certain
periods, Berger LLC may voluntarily waive all or a portion of its fee from BBOI
Worldwide, which will not affect the fee paid by the Fund to BBOI Worldwide
under the Administrative Services Agreement.
IFTC has been appointed to provide recordkeeping and pricing
services to the Fund, including calculating the daily net asset value of the
Fund, and to perform certain accounting and recordkeeping functions that it
requires. In addition, IFTC has been appointed to serve as the Fund's custodian,
transfer agent and dividend disbursing agent. IFTC has engaged DST as
sub-transfer agent to provide transfer agency and dividend disbursing services
for the Funds. The fees of Berger LLC, IFTC and DST are all paid by BBOI
Worldwide. Approximately 32% of the outstanding shares of DST are owned by
Stilwell.
SERVICE ARRANGEMENTS FOR THE PORTFOLIO. Under the Investment
Advisory Agreement between BBOI Worldwide and the Berger/BIAM International
Portfolio, in addition to providing investment advisory services, BBOI Worldwide
is responsible for providing or arranging for all managerial and administrative
services necessary for the operations of the Portfolio. BBOI Worldwide is
responsible for providing certain of these services at its own expense, such as
compliance monitoring and preparing investor communications, which have been
delegated to Berger LLC as part of the Sub-Administration Agreement discussed
above. Other services are procured from third party service providers at the
Portfolio's own expense, such as custody, recordkeeping and pricing services.
The Portfolio has appointed IFTC as recordkeeping and pricing
agent to calculate the daily net asset value of the Portfolio and to perform
certain accounting and recordkeeping functions required by the Portfolio. In
addition, the Portfolio has appointed IFTC as its custodian and transfer agent.
IFTC has engaged State Street Bank and Trust Company ("State Street"), P.O. Box
351, Boston, MA 02101, as sub-custodian for the Portfolio. For custodian,
recordkeeping and pricing services, the Portfolio pays fees directly to IFTC
based on a percentage of its net assets, subject to certain minimums, and
reimburses IFTC for certain out-of-pocket expenses.
The following table shows the total dollar amounts of advisory
fees paid by the Portfolio to BBOI Worldwide for the periods indicated and the
amount of such fees waived on account of excess expenses under applicable
expense limitations. The investment advisory fee is paid by the Portfolio and is
borne indirectly pro rata by the Fund and the other mutual funds invested in the
Portfolio.
BERGER/BIAM INTERNATIONAL PORTFOLIO
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Fiscal Year Ended Investment Advisory Fee TOTAL
September 30, Advisory Fee Waiver
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1999 $2,010,000 $(17,000) $1,993,000
- ---------------------------------------------------------------------------------------------------------------------
1998 $1,531,000 $(61,000) $1,470,000
- ---------------------------------------------------------------------------------------------------------------------
1997* $ 560,000 $(61,000) $ 499,000
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
-37-
<PAGE>
* Covers period from October 11, 1996 (commencement of investment
operations of the Portfolio) through the end of the Portfolio's first
fiscal year on September 30, 1997.
In addition, the Fund paid BBOI Worldwide the following
amounts for its services under the Administrative Services Agreement.
BERGER/BIAM INTERNATIONAL FUND
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Fiscal Year Ended September 30, Administrative Service Fee
- -------------------------------------------------------------------------------------
<S> <C>
1999 $ 87,000
- -------------------------------------------------------------------------------------
1998 $ 85,000
- -------------------------------------------------------------------------------------
1997* $ 63,000
- -------------------------------------------------------------------------------------
</TABLE>
* Covers period from November 7, 1996 (commencement of investment
operations of the Fund) through the end of the Fund's first fiscal year
on September 30, 1997.
As noted above with respect to the other Berger Funds, all of
IFTC's fees are subject to reduction pursuant to an agreed formula for certain
earnings credits on the cash balances maintained with it as custodian. Earnings
credits received by the Portfolio can be found on the Portfolio's Statement of
Operations in the Annual Report incorporated by reference into this Statement of
Additional Information.
12b-1 PLANS
Each of the Funds has adopted a 12b-1 plan (the "Plan") pursuant to
Rule 12b-1 under the Investment Company Act of 1940, which provides for the
payment to Berger LLC of a 12b-1 fee of 0.25% per annum of the Fund's average
daily net assets to finance activities primarily intended to result in the sale
of Fund shares. The Plans are intended to benefit the Funds by attracting new
assets into the Funds and thereby affording potential cost reductions due to
economies of scale.
The expenses paid by Berger LLC may include, but are not limited to:
- -- payments made to, and costs incurred by, a Fund's principal underwriter
in connection with the distribution of Fund shares, including payments
made to and expenses of officers and registered representatives of the
Distributor;
- -- payments made to and expenses of other persons (including employees of
Berger LLC) who are engaged in, or provide support services in
connection with, the distribution of Fund shares, such as answering
routine telephone inquiries and processing shareholder requests for
information;
- -- compensation (including incentive compensation and/or continuing
compensation based on the amount of customer assets maintained in a
Fund) paid to securities dealers, financial institutions and other
organizations which render distribution and administrative services in
connection with the distribution of Fund shares, including services to
holders of Fund shares and prospective investors;
- -- costs related to the formulation and implementation of marketing and
promotional activities, including direct mail promotions and
television, radio, newspaper, magazine and other mass media
advertising;
- -- costs of printing and distributing prospectuses and reports to
prospective shareholders of Fund shares;
- -- costs involved in preparing, printing and distributing sales literature
for Fund shares;
- -- costs involved in obtaining whatever information, analyses and reports
with respect to market and promotional activities on behalf of a Fund
relating to Fund shares that Berger LLC deems advisable;
- -- and such other costs relating to Fund shares as the Fund may from time
to time reasonably deem necessary or appropriate in order to finance
activities primarily intended to result in the sale of Fund shares.
Such 12b-1 fee payments are to be made by each Fund to
Berger LLC with respect to each fiscal year of the Fund without regard to the
actual distribution expenses incurred by Berger LLC in such year; that is, if
the distribution
-38-
<PAGE>
expenditures incurred by Berger LLC are less than the total of such payments in
such year, the difference is not to be reimbursed to the Fund by Berger LLC, and
if the distribution expenditures incurred by Berger LLC are more than the total
of such payments, the excess is not to be reimbursed to Berger LLC by the Fund.
From time to time a Fund may engage in activities which
jointly promote the sale of Fund shares and other funds that are or may in the
future be advised or administered by Berger LLC, which costs are not readily
identifiable as related to any one fund. In such cases, a Fund's 12b-1 fees may
be used to finance the joint promotion of the shares of that Fund, along with
the shares of the other fund. Berger LLC allocates the cost of such joint
promotional activity among the funds involved on the basis of their respective
net assets, unless otherwise directed by the directors or trustees.
The current 12b-1 Plans will continue in effect until the
end of April 2000, and from year to year thereafter if approved at least
annually by each Fund's directors or trustees and those directors or trustees
who are not interested persons of the Fund and have no direct or indirect
financial interest in the operation of the Plan or any related agreements by
votes cast in person at a meeting called for such purpose. The Plans may not be
amended to increase materially the amount to be spent on distribution of Fund
shares without shareholder approval.
Following are the payments made to Berger LLC pursuant to
the Plans for the fiscal year ended September 30, 1999:
<TABLE>
<CAPTION>
----------------------------------------------------------------------
FUND 12b-1 PAYMENTS
----------------------------------------------------------------------
<S> <C>
Berger Information Technology Fund(1)(2) $2,000 (1)
----------------------------------------------------------------------
Berger New Generation Fund(2) $ 476,000
----------------------------------------------------------------------
Berger Select Fund $ 247,000
----------------------------------------------------------------------
Berger Small Company Growth Fund(2) $1,551,000
----------------------------------------------------------------------
Berger Small Cap Value Fund(2) $ 545,000
----------------------------------------------------------------------
Berger Mid Cap Growth Fund $ 29,000
----------------------------------------------------------------------
Berger Mid Cap Value Fund $ 59,000
----------------------------------------------------------------------
Berger Growth Fund $3,612,000
----------------------------------------------------------------------
Berger/BIAM International Fund $ 50,000
----------------------------------------------------------------------
Berger Growth and Income Fund $ 913,000
----------------------------------------------------------------------
Berger Balanced Fund $ 220,000
----------------------------------------------------------------------
</TABLE>
(1) The Fund did not start offering the Investor Shares class of shares
bearing a 12b-1 fee until July 1999.
(2) The Berger Information Technology Fund, the Berger New Generation
Fund, the Berger Small Company Growth Fund and the Berger Small Cap
Value Fund have adopted a 12b-1 Plan only with respect to the Investor
Shares class of shares, which is the class of shares of those Funds
covered by this SAI.
OTHER EXPENSE INFORMATION
The directors or trustees of each of the Funds have
authorized portfolio transactions to be placed on an agency basis through DST
Securities, Inc. ("DSTS"), a wholly-owned broker-dealer subsidiary of DST. When
transactions are effected through DSTS, the commission received by DSTS is
credited against, and thereby reduces, certain operating expenses that the Fund
would otherwise be obligated to pay. No portion of the commission is retained by
DSTS. See Section 6--Brokerage Policy for further information concerning the
expenses reduced as a result of these arrangements. DSTS may be considered an
affiliate of Berger LLC due to the ownership interest of Stilwell in both DST
and Berger LLC.
The Funds and/or their advisors have entered into
arrangements with certain brokerage firms and other companies(such as
recordkeepers and administrators) to provide administrative services (such as
sub-transfer agency, recordkeeping, shareholder communications, sub-accounting
and/or other services) to investors purchasing shares of the Funds through those
firms or companies. A Fund's advisor or a Fund (if approved by its directors or
trustees) may pay fees to these companies for their services. These companies
may also be appointed as agents for or authorized by the Funds to accept on
-39-
<PAGE>
their behalf purchase and redemption requests that are received in good order.
Subject to Fund approval, certain of these companies may be authorized to
designate other entities to accept purchase and redemption orders on behalf of
the Funds.
The Fund's advisor may also enter into arrangements with
organizations that solicit clients for the advisor, which may include clients
who purchase shares of the Funds. While the specific terms of each arrangement
may differ, generally, the fee paid by the advisor under such arrangements is
based on the value of the referred client's assets managed by the advisor.
None of the fees paid to such organizations will be borne by the Funds.
DISTRIBUTOR
The distributor (principal underwriter) of each Fund's
shares is Berger Distributors LLC (the "Distributor"), 210 University Boulevard,
Suite 900, Denver, CO 80206. The Distributor may be reimbursed by Berger LLC for
its costs in distributing the Funds' shares.
6. BROKERAGE POLICY
Although each Fund retains full control over its own
investment policies, under the terms of its Investment Advisory Agreement, the
advisor is directed to place the portfolio transactions of the Fund. Where
applicable, the advisor may delegate placement of brokerage to a Fund's
sub-advisor. A report on the placement of brokerage business is given to the
directors or trustees of each Fund every quarter, indicating the brokers with
whom Fund portfolio business was placed and the basis for such placement. The
brokerage commissions paid by the Funds during the past three fiscal years were
as follows:
BROKERAGE COMMISSIONS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
FOR THE YEAR/PERIOD ENDED SEPTEMBER 30,
------------------------------------------------------------------
1999 1998 1997
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BERGER INFORMATION TECHNOLOGY FUND $ 4,000(1) $10,000(1) $6,000(1)
- --------------------------------------------------------------------------------------------------------------------
BERGER NEW GENERATION FUND $349,000 $340,000 $165,000
- --------------------------------------------------------------------------------------------------------------------
BERGER SELECT FUND $972,000 $536,000(2) N/A
- --------------------------------------------------------------------------------------------------------------------
BERGER SMALL COMPANY GROWTH FUND $807,000 $890,000 $1,044,000
- --------------------------------------------------------------------------------------------------------------------
BERGER SMALL CAP VALUE FUND $1,870,000 $567,000 $306,000(3)
- --------------------------------------------------------------------------------------------------------------------
BERGER MID CAP GROWTH FUND $ 27,000 $ 15,000(2) N/A
- --------------------------------------------------------------------------------------------------------------------
BERGER MID CAP VALUE FUND $ 129,000 $ 33,000(4) N/A
- --------------------------------------------------------------------------------------------------------------------
BERGER GROWTH FUND $6,010,000 $9,258,000 $6,671,000
- --------------------------------------------------------------------------------------------------------------------
BERGER/BIAM INTERNATIONAL FUND (5) $155,000 $225,000 $234,000(5)
- --------------------------------------------------------------------------------------------------------------------
BERGER GROWTH AND INCOME FUND $805,000 $2,397,000 $1,124,000
- --------------------------------------------------------------------------------------------------------------------
BERGER BALANCED FUND $291,000 $207,000 N/A
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund's fiscal year changed from February 28 to September 30 as part of a
reorganization effective July 1999. Accordingly, the brokerage commissions shown
for 1997 were paid by the Fund's predecessor during the period April 8, 1997
(commencement of operations of the predecessor) to February 28, 1998, and the
brokerage commissions shown for 1998 were paid by the Fund's predecessor during
its fiscal year ended February 28, 1999. Brokerage commissions shown for 1999
were paid by the Fund for the period from March 1, 1999 through September 30,
1999.
(2) Covers period from December 31, 1997 (commencement of operations) through
the end of the Fund's first fiscal year on September 30, 1998.
-40-
<PAGE>
(3) The Fund's fiscal year end was changed from December 31 to September 30
during 1997. Accordingly, the brokerage commissions shown for 1997 cover the
period January 1, 1997, through September 30, 1997.
(4) Covers period from August 12, 1998 (commencement of operations) through the
end of the Fund's first fiscal year on September 30, 1998.
(5) These are brokerage commissions paid by the Portfolio in which all the
Fund's investable assets are invested. Commissions paid by the Portfolio are
borne indirectly pro rata by the Fund and the other mutual funds invested in the
Portfolio. The brokerage commissions shown for 1997 cover the period November 7,
1996 (commencement of Fund investment operations) through the end of the
Portfolio's first fiscal year on September 30, 1997.
The Investment Advisory Agreement each Fund has with its
advisor authorizes and directs the advisor to place portfolio transactions for
the Fund only with brokers and dealers who render satisfactory service in the
execution of orders at the most favorable prices and at reasonable commission
rates. Where applicable, the Sub-Advisory Agreement for each sub-advised Fund
similarly directs the sub-advisor. However, each Agreement specifically
authorizes the advisor or sub-advisor to place such transactions with a broker
with whom it has negotiated a commission that is in excess of the commission
another broker or dealer would have charged for effecting that transaction if
the advisor or sub-advisor determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker viewed in terms of either that particular
transaction or the overall responsibilities of the advisor or sub-advisor.
Accordingly, the advisor or sub-advisor does not have an obligation to seek the
lowest available commission.
In accordance with this provision of the Agreement,
portfolio brokerage business of each Fund may be placed with brokers who provide
useful brokerage and research services to the advisor or, where applicable, the
sub-advisor. The Fund's advisor or sub-advisor may consider the value of
research provided as a factor in the choice of brokers. "Research" includes
computerized on-line stock quotation systems and related data feeds from stock
exchanges, computerized trade order entry, execution and confirmation systems,
fundamental and technical analysis data and software, computerized stock market
and business news services, economic research, account performance data and
computer hardware used for the receipt of electronic research services and
broker and other third-party equity research, such as publications or writings
which furnish advice as to the value of securities and advisability of
investing, and analyses and reports concerning issuers, industries, securities,
market trends, and portfolio strategies. Research may be provided orally, in
print, or electronically. These include a service used by the independent
directors or trustees of the Funds in reviewing the Investment Advisory
Agreements.
In some cases, a product or services termed "research" may
serve other functions unrelated to the making of investment decisions. When a
product has such a mixed use, the advisor or sub-advisor will make a good faith
allocation of the cost of the product according to the use made of it. The
portion of the product that assists the advisor or sub-advisor in the investment
decision-making process may be paid for with a Fund's commission dollars. The
advisor or sub-advisor pays for the portion of the product that is not
"research" with its own funds. Accordingly, the decision whether and how to
allocate the costs of such a product presents a conflict of interest for the
advisor or sub-advisor.
The Funds' advisors and sub-advisors do not enter into
formal agreements with any brokers regarding the placement of securities
transactions because of any such brokerage or research services that they
provide. An advisor or sub-advisor may, however, make arrangements with and
maintain internal procedures for allocating transactions to brokers who provide
such services to encourage them to provide services expected to be useful to the
advisor's or sub-advisor's clients, including the Funds. Brokers may suggest a
level of business they would like to receive in return for the brokerage and
research they provide. The advisor or sub-advisor then determines whether to
continue receiving the research and brokerage provided and the approximate
amount of commissions it is willing to pay to continue the brokerage and
research arrangement with each broker. The actual amount of commissions a broker
may receive may be more or less than a broker's suggested allocations, depending
on the advisor's or sub-advisor's level of business, market conditions and other
relevant factors. Even under these arrangements, however, the placement of all
Fund transactions, must be consistent with the Funds' brokerage placement and
execution policies, and must be directed to a broker who renders satisfactory
service in the execution of orders at the most favorable prices and at
reasonable commission rates.
During the fiscal year ended September 30, 1999, of the
brokerage commissions paid by the Funds, the following amounts were paid to
brokers who provided to the Funds selected brokerage or research services
prepared by the broker or subscribed or paid for by the broker on behalf of the
Funds:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
FUND AMOUNT OF TRANSACTIONS AMOUNT OF COMMISSIONS
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
-41-
<PAGE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
FUND AMOUNT OF TRANSACTIONS AMOUNT OF COMMISSIONS
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Berger Information Technology Fund $298,000(1) $ 2,000 (1)
-------------------------------------------------------------------------------------------------------------------
Berger New Generation Fund $ 22,354,000 $ 34,000
-------------------------------------------------------------------------------------------------------------------
Berger Select Fund $ 122,151,000 $ 133,000
-------------------------------------------------------------------------------------------------------------------
Berger Small Company Growth Fund $ 39,444,000 $ 98,000
-------------------------------------------------------------------------------------------------------------------
Berger Small Cap Value Fund $33,733,000 $ 98,000
-------------------------------------------------------------------------------------------------------------------
Berger Mid Cap Growth Fund $ 6,002,000 $ 11,000
-------------------------------------------------------------------------------------------------------------------
Berger Mid Cap Value Fund $ 33,336,000 $ 78,000
-------------------------------------------------------------------------------------------------------------------
Berger Growth Fund $713,737,000 $ 912,000
-------------------------------------------------------------------------------------------------------------------
Berger/BIAM International Fund $ 0 $ 0
-------------------------------------------------------------------------------------------------------------------
Berger Growth and Income Fund $126,947,000 $ 155,000
-------------------------------------------------------------------------------------------------------------------
Berger Balanced Fund $73,542,000 $ 95,000
-------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund's fiscal year changed from February 28 to September 30 as part of a
reorganization effective July 1999. Accordingly, the amounts shown cover the
period from March 1, 1999 through September 30, 1999.
These brokerage and research services received from brokers
are often helpful to the advisor or sub-advisor in performing its investment
advisory responsibilities to the Funds, and the availability of such services
from brokers does not reduce the responsibility of the advisor's or
sub-advisor's advisory personnel to analyze and evaluate the securities in which
the Funds invest. The brokerage and research services obtained as a result of
the Funds' brokerage business also will be useful to the advisor or sub-advisor
in making investment decisions for its other advisory accounts, and, conversely,
information obtained by reason of placement of brokerage business of such other
accounts may be used by the advisor or sub-advisor in rendering investment
advice to the Funds. Although such brokerage and research services may be deemed
to be of value to the advisor or sub-advisor, they are not expected to decrease
the expenses that the advisor or sub-advisor would otherwise incur in performing
its investment advisory services for the Funds nor will the advisory fees that
are received by the advisor or sub-advisor from the Funds be reduced as a result
of the availability of such brokerage and research services from brokers.
The directors or trustees of each of the Funds have
authorized portfolio transactions to be placed on an agency basis through DSTS,
a wholly-owned broker-dealer subsidiary of DST. When transactions are effected
through DSTS, the commission received by DSTS is credited against, and thereby
reduces, certain operating expenses that the Fund would otherwise be obligated
to pay. No portion of the commission is retained by DSTS. DSTS may be considered
an affiliate of Berger LLC due to the ownership interest of Stilwell in both DST
and Berger LLC.
Included in the brokerage commissions paid by the Funds
during the last three fiscal years, as stated in the preceding Brokerage
Commissions table, are the following amounts paid to DSTS, which served to
reduce each Fund's out-of-pocket expenses as follows:
DSTS COMMISSIONS AND RELATED EXPENSE REDUCTIONS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
DSTS Reduction DSTS Reduction DSTS Reduction
Commissions in Expenses Commissions in Expenses Commissions in Expenses
Paid FYE Paid FYE Paid FYE
FYE 9/30/99 9/30/99(1) FYE 9/30/98 9/30/98(1) FYE 9/30/97 9/30/97(1)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Berger Information Technology $ 0(2) $ 0 $ 0(2) $ 0 $ 0(2) $ 0
Fund
- -----------------------------------------------------------------------------------------------------------------------
Berger New Generation Fund $6,000(3) $4,500 $2,000 $1,500 $ 0 $ 0
- -----------------------------------------------------------------------------------------------------------------------
Berger Select Fund $61,000(4) $46,000 $9,000(5) $7,000(5) N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
Berger Small Company Growth $ 6,000(6) $ 4,500 $ 0 $ 0 $42,000 $31,000
Fund
- -----------------------------------------------------------------------------------------------------------------------
-42-
<PAGE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
DSTS Reduction DSTS Reduction DSTS Reduction
Commissions in Expenses Commissions in Expenses Commissions in Expenses
Paid FYE Paid FYE Paid FYE
FYE 9/30/99 9/30/99(1) FYE 9/30/98 9/30/98(1) FYE 9/30/97 9/30/97(1)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Berger Small Cap Value Fund $ 0 $ 0 $ 0 $ 0 $10,000 $7,000
- -----------------------------------------------------------------------------------------------------------------------
Berger Mid Cap Growth Fund $ 0 $ 0 $ 0(7) $ 0(7) N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
Berger Mid Cap Value Fund $ 0 $ 0 $ 0(8) $ 0(8) N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
Berger Growth Fund $399,000(9) $299,000 $390,000 $293,000 $527,000 $396,000
- -----------------------------------------------------------------------------------------------------------------------
Berger/BIAM International Fund $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
- -----------------------------------------------------------------------------------------------------------------------
Berger Growth and Income Fund $32,000(10) $ 24,000 $ 28,000 $ 21,000 $35,000 $26,000
- -----------------------------------------------------------------------------------------------------------------------
Berger Balanced Fund $ 1,500(11) $ 1,000 $ 0 $ 0 N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) No portion of the commission is retained by DSTS. Difference between
commissions paid through DSTS and reduction in expenses constitute commissions
paid to an unaffiliated clearing broker.
(2) The Fund's fiscal year changed from February 28 to September 30 as part of a
reorganization effective July 2, 1999. Accordingly, the amounts shown for FYE
9/30/97 were paid by the Fund's predecessor during the period April 8, 1997
(commencement of operations of the predecessor) to February 28, 1998, and the
amounts shown for FYE 9/30/98 were paid by the Fund's predecessor during its
fiscal year ended February 28, 1999. Amounts shown for FYE 9/30/99 cover the
period for March 1, 1999 to September 30, 1999.
(3) Constitutes 2% of the aggregate brokerage commissions paid by the Berger New
Generation Fund and less than 1% of the aggregate dollar amount of transactions
placed by the Berger New Generation Fund.
(4) Constitutes 6% of the aggregate brokerage commissions paid by the Berger
Select Fund and less than 1% of the aggregate dollar amount of transactions
placed by the Berger Select Fund.
(5) Covers the period from December 31, 1997 (commencement of operations)
through September 30, 1998.
(6) Constitutes 1% of the aggregate brokerage commissions paid by Berger Small
Company Growth Fund and less than 1% of the aggregate dollar amount of
transaction placed by Berger Small Company Growth Fund.
(7) Covers the period from December 31, 1997 (commencement of operations)
through September 30, 1998.
(8) Covers the period from August 12, 1998 (commencement of operations) through
September 30, 1998.
(9) Constitutes 7% of the aggregate brokerage commissions paid by the Berger
Growth Fund and less than 1% of the aggregate dollar amount of transactions
placed by the Berger Growth Fund.
(10) Constitutes 4% of the aggregate brokerage commissions paid by the Berger
Growth and Income Fund and less than 1% of the aggregate dollar amount of
transactions placed by the Berger Growth and Income Fund.
(11) Constitutes less than 1% of the aggregate brokerage commissions paid by the
Berger Balanced Fund and less than 1% of the aggregate dollar amount of
transactions placed by Berger Balanced Fund.
Under the Investment Advisory Agreement in effect until
February 14, 1997, for the Berger Small Cap Value Fund, the Fund's then advisor
was permitted to place the Fund's brokerage with affiliated brokers, subject to
adhering to certain procedures adopted by the trustees and subject to obtaining
prompt execution of orders at the most favorable net price. Of the brokerage
commissions shown on the Brokerage Commissions table above for periods prior to
February 14, 1997, $138,000 was paid by the Fund to PWM, then the Fund's
advisor, now the Fund's sub-advisor, which is also a registered broker-dealer.
On February 14, 1997, new arrangements for the Berger Small
Cap Value Fund came into effect with shareholder approval and since that time,
the trustees have not authorized the Fund's brokerage to be placed with any
broker or dealer affiliated with the advisor or sub-advisor, except through DSTS
under the circumstances described above.
Each Fund's advisor or sub-advisor places securities orders
with a limited number of major institutional brokerage firms chosen for the
reliability and quality of execution; commission rates; quality of research
coverage of major U.S. companies, the U.S. economy and the securities markets;
promptness; back office capabilities; capital strength and financial stability;
prior performance in serving the advisor and its clients; and knowledge of other
buyers and sellers. The advisor or sub-advisor selects the broker for each order
based on the factors above, as well as the size, difficulty and other
characteristics of the order. The directors or trustees of the Funds have also
authorized sales of shares of the Funds by a broker-dealer and the
recommendations of a broker-dealer to its customers that they purchase Fund
shares to be considered as factors in the selection of broker-dealers to execute
portfolio transactions for the Funds. In addition, the advisor or sub-advisor
may also consider payments made by brokers to a Fund or to other persons on
behalf of a Fund for services provided to the Fund for which it would otherwise
be obligated to pay, such as transfer agency fees. In placing portfolio business
with any such broker or dealer, the advisor will seek the best execution of each
transaction.
-43-
<PAGE>
During the fiscal year ended September 30, 1999, Berger
Growth and Income Fund, Berger Balanced Fund and Berger Mid Cap Value Fund
acquired securities of the Funds' regular broker dealers. As of September 30,
1999, these Funds owned the following securities of its regular broker-dealers
with the following values:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
FUND BROKER/DEALER VALUE SECURITY
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Berger Growth and Income Fund Morgan Stanley Dean Witter & Co. $ 4,272,081 Common Stock
The Goldman Sachs Group, Inc. 2,555,900 Common Stock
-----------------------------------------------------------------------------------------------------------
Berger Balanced Fund Morgan Stanley Dean Witter & Co. 981,062 Common Stock
Merrill Lynch & Co. 1,985,580 Bonds
Bear Stearns 1,036,305 Bonds
-----------------------------------------------------------------------------------------------------------
Berger Mid Cap Value Fund Merrill Lynch & Co. 147,812 Common Stock
-----------------------------------------------------------------------------------------------------------
</TABLE>
7. HOW TO PURCHASE AND REDEEM SHARES IN THE FUNDS
<TABLE>
<S> <C>
MINIMUM INITIAL INVESTMENTS:
Regular investment $2,000
Low Minimum Investment Plan $ 100
MINIMUM SUBSEQUENT INVESTMENTS:
Regular investment $ 50
Regular automatic investment $ 50
Low Minimum Investment Plan
(required monthly automatic investments) $ 100
</TABLE>
To purchase shares in any of the Funds, simply complete the
application form enclosed with the Prospectus. Then mail it with a check payable
to "Berger Funds" to the following address:
Berger Funds
P.O. Box 219958
Kansas City, MO 64121
If a shareholder is adding to an existing account, shares may
also be purchased by placing an order by telephone call to the Funds at
1-800-551-5849 or via on-line access, and remitting payment to DST Systems, Inc.
Payment for shares ordered on-line must be made by electronic funds transfer. In
order to make sure that payment for telephone purchases is received on time,
shareholders are encouraged to remit payment by electronic funds transfer.
Shareholders may also remit payment for telephone purchases by wire or by
overnight delivery.
In addition, Fund shares may be purchased through certain
broker-dealers that have established mutual fund programs and certain other
organizations connected with pension and retirement plans. These broker-dealers
and other organizations may charge investors a transaction or other fee for
their services, may require different minimum initial and subsequent investments
than the Funds and may impose other charges or restrictions different from those
applicable to shareholders who invest in the Funds directly. Fees charged by
these organizations will have the effect of reducing a shareholder's total
return on an investment in Fund shares. No such charge will apply to an investor
who purchases Fund shares directly from a Fund as described above.
Procedures for purchasing, selling (redeeming) and exchanging
Fund shares by telephone and on-line are described in the Prospectus. The Funds
may terminate or modify those procedures and related requirements at any time,
although shareholders of the Funds will be given notice of any termination or
material modification. Berger LLC may, at its own risk, waive certain of those
procedures and related requirements.
As described in the Prospectus, the Berger Information
Technology Fund will deduct a 1% redemption fee from a shareholder's redemption
proceeds if the shareholder redeems shares of that Fund held less than 6 months.
Because an exchange involves a redemption of shares followed by a purchase, this
redemption fee will also apply to exchanges of Fund shares held less than 6
months. This fee is intended to discourage investors from short-term trading of
Fund shares and to offset the cost to the Fund of excess brokerage and other
costs incurred as a result of such trading. This fee will not be charged
-44-
<PAGE>
to retirement plan accounts (such as 401(k)s and 403(b)s) or in the case of
redemptions resulting from the death of the shareholder. This fee will also not
be charged on the redemption of shares obtained through the reinvestment of
dividends paid on Fund shares. If some but not all of the shares in an account
are redeemed, shares are treated as redeemed in an order determined by and
applied uniformly to all accounts by the Fund's sub-transfer agent.
8. HOW THE NET ASSET VALUE IS DETERMINED
The net asset value of each Fund is determined once daily, at
the close of the regular trading session of the New York Stock Exchange (the
"Exchange") (normally 4:00 p.m., New York time, Monday through Friday) each day
that the Exchange is open. The Exchange is closed and the net asset value of the
Funds is not determined on weekends and on New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day each year. The per share net asset value
of each Fund is determined by dividing the total value of its securities and
other assets, less liabilities, by the total number of shares outstanding.
For those Funds offering classes of shares, net asset value is
calculated by class, and since the Investor Shares and each other class of those
Funds has its own expenses, the per share net asset value of those Funds will
vary by class.
Since the Berger/BIAM International Fund invests all of its
investable assets in the Berger/BIAM International Portfolio, the value of the
Fund's investable assets will be equal to the value of its beneficial interest
in the Portfolio. The value of securities held in the Portfolio are determined
as described below for the Funds.
In determining net asset value for each of the Funds,
securities listed or traded primarily on national exchanges, The Nasdaq Stock
Market and foreign exchanges are valued at the last sale price on such markets,
or, if such a price is lacking for the trading period immediately preceding the
time of determination, such securities are valued at the mean of their current
bid and asked prices. Securities that are traded in the over-the-counter market
are valued at the mean between their current bid and asked prices. The market
value of individual securities held by each Fund will be determined by using
prices provided by pricing services which provide market prices to other mutual
funds or, as needed, by obtaining market quotations from independent
broker/dealers. Short-term money market securities maturing within 60 days are
valued on the amortized cost basis, which approximates market value. All assets
and liabilities initially expressed in terms of non-U.S. dollar currencies are
translated into U.S. dollars at the prevailing market rates as quoted by one or
more banks or dealers shortly before the close of the Exchange. Securities and
assets for which quotations are not readily available or are not representative
of market value may be valued at their fair value determined in good faith
pursuant to consistently applied procedures established by the directors or
trustees. Examples would be when events occur that materially affect the value
of a security at a time when the security is not trading or when the securities
are illiquid.
Generally, trading in foreign securities markets is
substantially completed each day at various times prior to the close of the
Exchange. The values of foreign securities used in computing the net asset value
of the shares of a Fund are determined as of the earlier of such market close or
the closing time of the Exchange. Occasionally, events affecting the value of
such securities may occur between the times at which they are determined and the
close of the Exchange, or when the foreign market on which such securities trade
is closed but the Exchange is open, which will not be reflected in the
computation of net asset value. If during such periods, events occur which
materially affect the value of such securities, the securities may be valued at
their fair value as determined in good faith pursuant to consistently applied
procedures established by the directors or trustees.
A Fund's securities may be listed primarily on foreign
exchanges or over-the-counter dealer markets which may trade on days when the
Exchange is closed (such as a customary U.S. holiday) and on which the Fund's
net asset value is not calculated. As a result, the net asset value of a Fund
may be significantly affected by such trading on days when shareholders cannot
purchase or redeem shares of the Fund.
9. INCOME DIVIDENDS, CAPITAL GAINS
DISTRIBUTIONS AND TAX TREATMENT
This discussion summarizes certain U.S. federal income tax
issues relating to the Funds. As a summary, it is not an exhaustive discussion
of all possible tax ramifications. Accordingly, shareholders are urged to
consult with their tax advisors with respect to their particular tax
consequences.
-45-
<PAGE>
TAX STATUS OF THE FUNDS. If a Fund meets certain investment
and distribution requirements, it will be treated as a "regulated investment
company" (a "RIC") under the Internal Revenue Code and will not be subject to
federal income tax on earnings that it distributes in a timely manner to
shareholders. It also may be subject to an excise tax on undistributed income if
it does not meet certain timing requirements for distributions. Each of the
Funds intends to qualify as a RIC annually and to make timely distributions in
order to avoid income and excise tax liabilities.
TAX ON FUND DISTRIBUTIONS. With certain exceptions provided by
law, the Funds will report annually to the Internal Revenue Service and to each
shareholder information about the tax treatment of the shareholder's
distributions. Dividends paid by a Fund, whether received in cash or reinvested
in additional Fund shares, will be treated as ordinary income to the
shareholders. Distributions of net capital gain, whether received in cash or
reinvested in Fund shares, will be taxable to the shareholders, but the rate of
tax will vary depending upon the Fund's holding periods in the assets whose sale
resulted in the capital gain. Dividends and distributions that are declared in
October, November or December but not distributed until the following January
will be considered to be received by the shareholders on December 31.
In general, net capital gains from assets held by a Fund for
more than 12 months will be subject to a maximum tax rate of 20% and net capital
gains from assets held for 12 months or less will be taxed as ordinary income.
Distributions will be subject to these capital gains rates, regardless of how
long a shareholder has held Fund shares. Assets contributed to a Fund in an
in-kind purchase of Fund shares may generate more gain upon their sale than if
the assets had been purchased by the Fund with cash contributed to the Fund in a
cash purchase of Fund shares.
If a Fund's distributions for a taxable year exceeds its tax
earnings and profits available for distribution, all or a portion of its
distributions may be treated as a return of capital. To the extent a
distribution is treated as a return of capital, a shareholder's basis in his or
her Fund shares will be reduced by that amount.
If a shareholder has elected to receive dividends and/or
capital gain distributions in cash and the U.S. Postal Service is unable to
deliver checks to the shareholder's address of record, or if a shareholder's
checks remain uncashed for six months, the Funds reserve the right to reinvest
the amount distributed in additional Fund shares at the then-current NAV and to
convert the shareholder's distribution option from receiving cash to having all
dividend and other distributions reinvested in additional shares. In addition,
no interest will accrue on amounts represented by uncashed distribution or
redemption checks.
TAX ON REDEMPTIONS OF FUND SHARES. Shareholders may be subject
to tax on the redemption of their Fund shares. In general, redemptions may give
rise to a capital gain or loss, the treatment of which will depend on the
shareholder's holding period in the Fund shares. Tax laws may prevent the
deduction of a loss on the sale of Fund shares if the shareholder reinvests in
the Fund shortly before or after the sale giving rise to the loss. Any loss on
the redemption or other sale or exchange of Fund shares held for six months or
less will be treated as a long-term capital loss to the extent of any long-term
capital gain distribution received on the shares.
INCOME FROM FOREIGN SOURCES. Dividends and interest received
by the Funds on foreign securities may give rise to withholding and other taxes
imposed by foreign countries, although these taxes may be reduced by applicable
tax treaties. Foreign taxes will generally be treated as expenses of the Funds,
unless a Fund has more than 50% of its assets invested in foreign corporate
securities at the end of the Fund's taxable year. In that case, for the Funds
that make an election, shareholders of the Fund may be able to deduct (as an
itemized deduction) or claim a foreign tax credit for their share of foreign
taxes, subject to limitations prescribed in the tax law.
If a Fund invests in a foreign corporation that is a passive
foreign investment company (a "PFIC"), special rules apply that may affect the
tax treatment of gains from the sale of the stock and may cause a Fund to incur
IRS tax and interest charges. However, the Fund may be eligible to elect one of
two alternative tax treatments with respect to PFIC shares which would avoid
these taxes and charges, but also may affect, among other things, the amount and
character of gain or loss and the timing of the recognition of income with
respect to PFIC shares. Accordingly, the amounts, character and timing of income
distributed to shareholders of a Fund holding PFIC shares may differ
substantially as compared to a fund that did not invest in PFIC shares.
INCOME FROM CERTAIN TRANSACTIONS. Some or all of the Funds'
investments may include transactions that are subject to special tax rules.
Transactions involving foreign currencies may give rise to a gain or loss that
could affect a Fund's ability to make ordinary dividend distributions.
Investment in certain financial instruments, such as options, futures contracts
-46-
<PAGE>
and forward contracts, may require annual recognition of unrealized gains and
losses. Transactions that are treated as "straddles" may affect the character
and/or timing of other gains and losses of the Fund. If a Fund enters into a
transaction (such as a "short sale against the box") that reduces the risk of
loss on an appreciated financial position that it already holds, the entry into
the transaction may constitute a constructive sale and require immediate
recognition of gain.
BACKUP WITHHOLDING. In general, if a shareholder is subject to
backup withholding, a Fund will be required to withhold federal income tax at a
rate of 31% from distributions to that shareholder. These payments are
creditable against the shareholder's federal income tax liability.
FOREIGN SHAREHOLDERS. Foreign shareholders of a Fund generally
will be subject to a 30% U.S. withholding tax on dividends paid by a Fund from
ordinary income and short-term capital gain, although the rate may be reduced by
a tax treaty. If a foreign shareholder dies while owning Fund shares, those
shares may be subject to U.S. estate taxes.
TAX STATUS OF THE BERGER/BIAM INTERNATIONAL PORTFOLIO. The
Berger/BIAM International Portfolio, in which the Berger/BIAM International Fund
invests all of its investable assets, has in previous years been classified as a
partnership for U.S. federal income tax purposes, and it intends to retain that
classification. The Berger/BIAM International Fund is treated for various
federal tax purposes as owning an allocable share of the Portfolio's assets and
will be allocated a share of the Portfolio's income, gain and loss.
10. SUSPENSION OF REDEMPTION RIGHTS
The right of redemption may be suspended for any period during
which the New York Stock Exchange is closed or the Securities and Exchange
Commission determines that trading on the Exchange is restricted, or when there
is an emergency as determined by the Securities and Exchange Commission as a
result of which it is not reasonably practicable for a Fund to dispose of
securities owned by it or to determine the value of its net assets, or for such
other period as the Securities and Exchange Commission may by order permit for
the protection of shareholders of a Fund.
Each Fund intends to redeem its shares only for cash, although
it retains the right to redeem its shares in-kind under unusual circumstances,
in order to protect the interests of the remaining shareholders, by the delivery
of securities selected from its assets at its discretion. Each Fund is, however,
governed by Rule 18f-1 under the Investment Company Act of 1940 pursuant to
which the Fund is obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the net assets of the Fund during any 90-day period for any
one shareholder. For purposes of this threshold, each underlying account holder
whose shares are held of record in certain omnibus accounts is treated as one
shareholder. Should redemptions by any shareholder during any 90-day period
exceed such limitation, the Fund will have the option of redeeming the excess in
cash or in-kind. If shares are redeemed in-kind, the redeeming shareholder
generally will incur brokerage costs in converting the assets to cash. The
redeeming shareholder may have difficulty selling the securities and recovering
the amount of the redemption if the securities are illiquid. The method of
valuing securities used to make redemption in-kind will be the same as the
method of valuing portfolio securities described under Section 8.
11. TAX-SHELTERED RETIREMENT PLANS
The Funds offer several tax-qualified retirement plans for
individuals, businesses and non-profit organizations, including a Profit-Sharing
Plan, a Money Purchase Pension Plan, an Individual Retirement Account (IRA), a
Roth IRA and a 403(b) Custodial Account for adoption by employers and
individuals who wish to participate in such Plans. For information on other
types of retirement plans offered by the Funds, please call 1-800-333-1001 or
write to the Funds c/o Berger LLC, P.O. Box 5005, Denver, CO 80217.
PROFIT-SHARING AND MONEY PURCHASE PENSION PLANS
Employers, self-employed individuals and partnerships may make
tax-deductible contributions to the tax-qualified retirement plans offered by
the Funds. All income and capital gains accumulated in the Plans are tax free
until withdrawn. The amounts that are deductible depend upon the type of Plan or
Plans adopted.
If you, as an employer, self-employed person or partnership,
adopt the Profit-Sharing Plan, you may vary the amount of your contributions
from year to year and may elect to make no contribution at all for some years.
If you adopt the Money Purchase Pension Plan, you must commit yourself to make a
contribution each year according to a formula in the Plan
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that is based upon your employees' compensation or your earned income. By
adopting both the Profit-Sharing and the Money Purchase Pension Plan, you can
increase the amount of contributions that you may deduct in any one year.
If you wish to purchase shares of any Fund in conjunction with
one or both of these tax-qualified plans, you may use an Internal Revenue
Service approved prototype Trust Agreement and Retirement Plan available from
the Funds. IFTC serves as trustee of the Plan, for which it charges an annual
trustee's fee for each Fund or Cash Account Trust Money Portfolio (discussed
below) in which the participant's account is invested. Contributions under the
Plans are invested exclusively in shares of the Funds or the Cash Account Trust
Money Market Portfolios, which are then held by the trustee under the terms of
the Plans to create a retirement fund in accordance with the tax code.
Distributions from the Profit-Sharing and Money Purchase
Pension Plans generally may not be made without penalty until the participant
reaches age 59 1/2 and must begin no later than April 1 of the calendar year
following the year in which the participant attains age 70 1/2. A participant
who is not a 5% owner of the employer may postpone such distributions to April 1
of the calendar year following the year of retirement. This exception does not
apply to distributions from an individual retirement account (IRA). Except for
required distributions after age 70 1/2, periodic distributions over more than
10 years and the distribution of any after-tax contributions, distributions are
subject to 20% Federal income tax withholding unless those distributions are
rolled directly to another qualified plan or an IRA. Participants may not be
able to receive distributions immediately upon request because of certain
requirements under federal tax law. Since distributions which do not satisfy
these requirements can result in adverse tax consequences, consultation with an
attorney or tax advisor regarding the Plans is recommended. You should also
consult with your tax advisor regarding state tax law implications of
participation in the Plans.
In order to receive the necessary materials to create a
Profit-Sharing or Money Purchase Pension Plan, please write to the Berger Funds,
c/o Berger LLC, P.O. Box 5005, Denver, Colorado 80217, or call 1-800-333-1001.
Trustees for 401(k) or other existing plans interested in utilizing Fund shares
as an investment or investment alternative in their plans should contact the
Berger Funds at 1-800-333-1001.
INDIVIDUAL RETIREMENT ACCOUNT (IRA)
If you are an individual with compensation or earned income,
whether or not you are actively participating in an existing qualified
retirement plan, you can provide for your own retirement by adopting an IRA.
Under an IRA, you can contribute each year up to the lesser of 100% of your
compensation or $2,000. If you are married and you file a joint return, you and
your spouse together may make contributions totaling up to $4,000 to two IRAs
(with no more than $2,000 being contributed to either account) if your joint
income is $4,000 or more, even if one spouse has no earned income. If neither
you nor your spouse are active participants in an existing qualified retirement
plan, or if your income does not exceed certain amounts, the amounts contributed
to your IRA can be deducted for Federal income tax purposes whether or not your
deductions are itemized. If you or your spouse are covered by an existing
qualified retirement plan, the deductibility of your IRA contributions will be
phased out for federal income tax purposes if your income exceeds specified
amounts, although the income level at which your IRA contributions will no
longer be deductible is higher if only your spouse (but not you) is an active
participant. However, whether your contributions are deductible or not, the
income and capital gains accumulated in your IRA are not taxed until the account
is distributed.
If you wish to create an IRA to invest in shares of any Fund,
you may use the Fund's IRA custodial agreement form which is an adaptation of
the form provided by the Internal Revenue Service. Under the IRA custodial
agreement, IFTC will serve as custodian, for which it will charge an annual
custodian fee for each Fund or Cash Account Trust Money Market Portfolio in
which the IRA is invested.
Distributions from an IRA generally may not be made without
penalty until you reach age 59 1/2 and must begin no later than April 1 of the
calendar year following the year in which you attain age 70 1/2. Since
distributions which do not satisfy these requirements can result in adverse tax
consequences, consultation with an attorney or tax advisor is recommended. You
should also consult with your tax advisor about state taxation of your account.
In order to receive the necessary materials to create an IRA
account, please write to the Berger Funds, c/o Berger LLC, P.O. Box 5005,
Denver, Colorado 80217, or call 1-800-333-1001.
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ROTH IRA
If you are an individual with compensation or earned income,
you may contribute up to the lesser of $2,000 or 100% of your compensation to a
Roth IRA, as long as your income does not exceed a specified income level
($95,000 for single individuals, $150,000 for married individuals filing
jointly). A Roth IRA is similar in many respects to a traditional IRA, as
described above. However, the maximum amount you may contribute to a Roth IRA is
phased out between that income level and a maximum income amount ($110,000 and
$160,000, respectively), and you may not make any contribution at all to a Roth
IRA if your income exceeds the maximum income amount. Also, you can make
contributions to a Roth IRA even after you reach age 70 1/2, and you are not
required to take distributions from a Roth IRA prior to your death.
Contributions to a Roth IRA are not deductible for federal
income tax purposes. However, the income and capital gains accumulated in a Roth
IRA are not taxed while held in the IRA, and distributions can be taken tax-free
if the Roth IRA has been established for a minimum of five years and the
distribution is after age 59-1/2, for a first time home purchase, or upon death
or disability.
An individual with an income of less than $100,000 who is not
married filing separately can roll his or her existing IRA into a Roth IRA.
However, the individual must pay taxes on the fair market value of the existing
IRA on the date of the rollover. Please consult your tax advisor concerning Roth
IRA rollovers.
403(b) CUSTODIAL ACCOUNTS
If you are employed by a public school system or certain
federally tax-exempt private schools, colleges, universities, hospitals,
religious and charitable or other nonprofit organizations, you may establish a
403(b) Custodial Account.
Your employer must participate in the establishment of the account.
If your employer participates, it will automatically deduct
the amount you designate from your gross salary and contribute it to your 403(b)
Custodial Account. The amount which you may contribute annually under a salary
reduction agreement is generally the lesser of $9,500 or your exclusion
allowance, which is based upon a specified formula, and other Internal Revenue
Code limits apply. There is a $50 minimum investment in the 403(b) Custodial
Account. Contributions made to the account reduce the amount of your current
income subject to Federal income tax. Federal income tax is not paid on your
contribution until you begin making withdrawals. In addition, all income and
capital gains accumulated in the account are tax-free until withdrawn.
Withdrawals from your 403(b) Custodial Agreement may begin as
soon as you reach age 59 1/2 and must begin no later than April 1 of the year
following the later of the calendar year in which you attain age 70 1/2 or the
calendar year in which you retire. Except for required distributions after age
70 1/2 and periodic distributions over more than 10 years, distributions are
subject to 20% Federal income tax withholding unless those distributions are
rolled directly to another 403(b) account or annuity or an individual retirement
account (IRA). You may not be able to receive distributions immediately upon
request because of certain notice requirements under federal tax law. Since
distributions which do not satisfy these requirements can result in adverse tax
consequences, consultation with an attorney or tax advisor regarding the 403(b)
Custodial Account is recommended. You should also consult with your tax advisor
about state taxation of your account.
Individuals who wish to purchase shares of a Fund in
conjunction with a 403(b) Custodial Account may use a Custodian Account
Agreement and related forms available from the Funds. IFTC serves as custodian
of the 403(b) Custodial Account, for which it charges an annual custodian fee
for each Fund or Cash Account Trust Money Market Portfolio in which the
participant's account is invested.
In order to receive the necessary materials to create a 403(b)
Custodial Account, please write to the Berger Funds, c/o Berger LLC, P.O. Box
5005, Denver, Colorado 80217, or call 1-800-333-1001.
12. EXCHANGE PRIVILEGE AND SYSTEMATIC WITHDRAWAL PLAN
A shareholder who owns shares of any of the Funds worth at
least $5,000 at the current net asset value may establish a Systematic
Withdrawal account from which a fixed sum will be paid to the shareholder at
regular intervals by the Fund in which the shareholder is invested.
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To establish a Systematic Withdrawal account, the shareholder
deposits Fund shares with the Fund and appoints the Fund as agent to redeem
shares in the shareholder's account in order to make monthly, quarterly,
semi-annual or annual withdrawal payments to the shareholder of a fixed amount.
The minimum withdrawal payment is $50.00. These payments generally will be made
on the 25th day of the month.
Withdrawal payments are not yield or income on the
shareholder's investment, since portions of each payment will normally consist
of a return of the shareholder's investment. Depending on the size of the
disbursements requested and the fluctuation in value of the Fund's portfolio,
redemptions for the purpose of making such disbursements may reduce or even
exhaust the shareholder's account.
The shareholder may vary the amount or frequency of withdrawal
payments, temporarily discontinue them, or change the designated payee or
payee's address, by notifying the Fund. The shareholder may, of course, make
additional deposits of Fund shares in the shareholder's account at any time.
Since redemption of shares to make withdrawal payments is a
taxable event, each investor should consult a tax advisor concerning proper tax
treatment of the redemption.
Any shareholder may exchange any or all of the shareholder's
shares in any of the Funds for shares of any of the other available Berger Funds
or for shares of the Money Market Portfolio, the Government Securities Portfolio
or the Tax-Exempt Portfolio of the Cash Account Trust ("CAT Portfolios"),
separately managed, unaffiliated money market funds, without charge, after
receiving a current prospectus of the other Fund or CAT Portfolio. The exchange
privilege with the CAT Portfolios does not constitute an offering or
recommendation of the shares of any such CAT Portfolio by any of the Funds or
Berger LLC. Berger LLC is compensated for administrative services it performs
with respect to the CAT Portfolios.
Exchanges into or out of the Funds are made at the net asset
value per share next determined after the exchange request is received. Each
exchange represents the sale of shares from one Fund and the purchase of shares
in another, which may produce a gain or loss for income tax purposes. In
addition, exchanges out of the Berger Information Technology Fund will be
subject to a redemption fee of 1% if shares are exchanged within 6 months of
purchase.
An exchange of shares may be made by written request directed
to DST Systems, Inc., via on-line access, or simply by telephoning the Berger
Funds at 1-800-551-5849. This privilege may be terminated or amended by any of
the Funds, and is not available in any state in which the shares of the Fund or
CAT Portfolio being acquired in the exchange are not eligible for sale.
Shareholders automatically have telephone and on-line privileges to authorize
exchanges unless they specifically decline this service in the account
application or in writing.
13. PERFORMANCE INFORMATION
From time to time in advertisements, the Funds may discuss
their performance ratings as published by recognized mutual fund statistical
services, such as Lipper Analytical Services, Inc., CDA Investment Technologies,
Inc., Morningstar, Inc., or Value Line Investment Survey or by publications of
general interest such as THE WALL STREET JOURNAL, INVESTOR'S BUSINESS DAILY,
MONEY, BARRON'S, FINANCIAL WORLD or KIPLINGER'S PERSONAL FINANCE MAGAZINE. In
addition, the Funds may compare their performance to that of recognized
broad-based securities market indices, including the Standard & Poor's 500 Stock
Index, the Dow Jones Industrial Average, the Wilshire 5000 Index, the Russell
2000 Stock Index, the Standard & Poor's 400 Mid-Cap Index, the Standard & Poor's
600 Small Cap Index, Morgan Stanley Capital International EAFE (Europe,
Australasia, Far East) Index, the Dow Jones World Index, the Standard &
Poor's/BARRA Value Index, the Nasdaq Composite Index, the Lehman Brothers
Intermediate Term Government/Corporate Bond Index or the INFORMATIONWEEK 100
Index, or more narrowly-based or blended indices which reflect the market
sectors in which that Fund invests.
The total return of each Fund is calculated for any specified
period of time by assuming the purchase of shares of the Fund at the net asset
value at the beginning of the period. Each dividend or other distribution paid
by the Fund is assumed to have been reinvested at the net asset value on the
reinvestment date. The total number of shares then owned as a result of this
process is valued at the net asset value at the end of the period. The
percentage increase is determined by subtracting the initial value of the
investment from the ending value and dividing the remainder by the initial
value.
Each Fund's total return reflects the Fund's performance over
a stated period of time. An average annual total return reflects the
hypothetical annually compounded return that would have produced the same total
return if the Fund's
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performance had been constant over the entire period. Total return figures are
based on the overall change in value of a hypothetical investment in each Fund.
Because average annual total returns for more than one year tend to smooth out
variations in a Fund's return, investors should recognize that such figures are
not the same as actual year-by-year results.
All performance figures for the Funds are based upon
historical results and do not assure future performance. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Quotations of average annual total return for the Funds will
be expressed in terms of the average annual compounded rate of return of a
hypothetical investment in the Fund over periods of 1, 3, 5 and 10 years, or for
the life of the Fund, if shorter. These are the rates of return that would
equate the initial amount invested to the ending redeemable value. These rates
of return are calculated pursuant to the following formula: P(1 + T) TO THE
POWER OF n = ERV (where P = a hypothetical initial payment of $1,000, T = the
average annual total return, n = the number of years and ERV = the ending
redeemable value of a hypothetical $1,000 payment made at the beginning of the
period). All total return figures reflect the deduction of a proportional share
of Fund expenses on an annual basis, and assume that all dividends and
distributions are reinvested when paid.
PREDECESSOR PERFORMANCE QUOTATIONS
BERGER/BIAM INTERNATIONAL FUND. The Berger/BIAM International
Portfolio (in which all the investable assets of the Berger/BIAM International
Fund are invested) commenced operations upon the transfer to the Portfolio of
assets held in a pooled trust (the "Pool") maintained by Citizens Bank New
Hampshire, for which BIAM had provided day-to-day portfolio management as
sub-advisor since the inception of the Pool. At that time, BIAM's bank holding
company parent indirectly owned a 23.5% interest in the parent of Citizens Bank
New Hampshire. The investment objective, policies, limitations, guidelines and
strategies of the Pool were materially equivalent to those of the Berger/BIAM
International Fund and the Portfolio. Assets from the Pool were transferred on
October 11, 1996, to a separate "feeder" fund investing in the Portfolio which,
in turn, transferred those assets to the Portfolio in exchange for an interest
in the Portfolio. As a result of this transaction, the investment holdings in
the Portfolio were the same as the investment holdings in the portfolio of the
Pool immediately prior to the transfer, except for the seed capital provided by
Berger LLC.
The Pool was not a registered investment company since it was
exempt from registration under the Investment Company Act of 1940 (the "1940
Act"). Since, in a practical sense, the Pool constitutes the "predecessor" of
the Portfolio, the Fund calculates its performance for periods commencing prior
to the transfer of the Pool's assets to the Portfolio by including the Pool's
total return, adjusted at that time to reflect any increase in fees and expenses
applicable in operating the Fund, including the Fund's pro rata share of the
aggregate annual operating expenses, net of fee waivers, of the Portfolio. Those
fees and expenses included 12b-1 fees.
Performance data quoted for the Berger/BIAM International Fund
for periods prior to October 1996 include the performance of the Pool and
include periods before the Fund's and the Portfolio's registration statements
became effective. As noted above, the Pool was not registered under the 1940 Act
and thus was not subject to certain investment restrictions that are imposed on
the Fund and the Portfolio by the 1940 Act. If the Pool had been registered
under the 1940 Act, the Pool's performance might have been adversely affected.
BERGER SMALL CAP VALUE FUND. Shares of the Berger Small Cap
Value Fund had no class designations until February 14, 1997, when all of the
then-existing shares were designated as Institutional Shares and the Fund
commenced offering the Investor Shares covered in this Statement of Additional
Information. Performance data for the Investor Shares include periods prior to
the adoption of class designations on February 14, 1997, and therefore do not
reflect the 0.25% per year 12b-1 fee applicable to the Investor Shares. Total
return of the Investor Shares and other classes of shares of the Fund will be
calculated separately. Because each class of shares is subject to different
expenses, the performance of each class for the same period will differ.
BERGER INFORMATION TECHNOLOGY FUND. The Berger Information
Technology Fund is the accounting survivor and successor of a fund previously
known as the InformationTech 100-Registered Trademark- Fund, which was
reorganized into the Fund effective July 2, 1999. As part of the reorganization,
all of the then-existing shares of the predecessor fund were exchanged for
Institutional Shares of the Fund, and the Fund commenced offering the Investor
Shares covered in this Statement of Additional Information.
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The Fund quotes its historical performance track record for
both of its classes of shares based on its predecessor's only shares outstanding
prior to the reorganization. Accordingly, performance data for the Investor
Shares for periods prior to the date of the reorganization do not reflect the
0.25% per year 12b-1 fee currently borne by the Investor Shares. Total return of
the Investor Shares and other classes of shares of the Fund will be calculated
separately. Because each class of shares is subject to different expenses, the
performance of each class for the same period will differ.
AVERAGE ANNUAL TOTAL RETURNS
The average annual total return for each of the Funds for
various periods ending September 30, 1999, are shown on the following table:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
FUND 1-YEAR 3-YEAR 5-YEAR 10-YEAR LIFE OF FUND
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Berger Information Technology 84.49% N/A N/A N/A 53.03%
Fund - Investor Shares(1) (since 4/8/97)
- -------------------------------------------------------------------------------------------------------------------
Berger New Generation Fund - 110.82% 33.61% N/A N/A 34.35%
Investor Shares (since 3/29/96)
- -------------------------------------------------------------------------------------------------------------------
Berger Select Fund 53.06% N/A N/A N/A 49.85%
(since 12/31/97)
- -------------------------------------------------------------------------------------------------------------------
Berger Small Company Growth Fund 62.78% 12.99% 20.10% N/A 19.15%
- - Investor Shares (since 12/30/93)
- -------------------------------------------------------------------------------------------------------------------
Berger Small Cap Value Fund - 24.69% 18.08% 17.39% 13.15% 14.75%
Investor Shares(2) (since 10/21/87)(3)
- -------------------------------------------------------------------------------------------------------------------
Berger Mid Cap Growth Fund 102.76% N/A N/A N/A 57.57%
(since 12/31/97)
- -------------------------------------------------------------------------------------------------------------------
Berger Mid Cap Value Fund 31.12% N/A N/A N/A 19.34%
(since 8/12/98)
- -------------------------------------------------------------------------------------------------------------------
Berger Growth Fund 38.96% 13.82% 13.80% 15.51% 14.88%
(since 9/30/74)(4)
- -------------------------------------------------------------------------------------------------------------------
Berger/BIAM International Fund(5) 29.64% 11.14% 11.74% 12.68% 12.50%
(since 7/31/89)
- -------------------------------------------------------------------------------------------------------------------
Berger Growth and Income Fund 38.67% 22.45% 18.30% 15.93% 14.58%
(since 9/30/74)(4)
- -------------------------------------------------------------------------------------------------------------------
Berger Balanced Fund 39.41% N/A N/A N/A 47.88%
(since 9/30/97)
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Performance data for the Investor Shares include periods prior to the Fund's
adoption of share classes as part of its reorganization on July 2, 1999, and
therefore, for those periods, do not reflect the 0.25% per year 12b-1 fee which
has been paid by the Investor Shares since the inception of the class on that
date.
(2) Performance data for the Investor Shares include periods prior to the Fund's
adoption of class designations on February 14, 1997, and therefore, for those
periods, do not reflect the 0.25% per year 12b-1 fee applicable to the Investor
Shares, which came into effect on that date.
(3) Covers the period from October 21, 1987 (date of the Fund's first public
offering) through September 30, 1999.
(4) Life of Fund covers the period from September 30, 1974 (immediately prior to
Berger LLC assuming the duties as the investment advisor for those Funds)
through September 30, 1999. Since the 12b-1 fees for the Berger Growth Fund and
the Berger Growth and Income Fund did not take effect until June 19, 1990, the
performance figures on the table do not reflect the deduction of the 12b-1 fees
for the full length of the 10-year and longer periods.
(5) Data for the Berger/BIAM International Fund covering periods prior to
October 11, 1996, reflect the performance of the pool of assets transferred on
that date into the Berger/BIAM International Portfolio in which all of the
Fund's assets are invested, adjusted at that time to reflect any increase in
expenses expected in operating the Fund, including the Fund's pro rata share of
the aggregate annual operating expenses, of the Portfolio net of fee waivers.
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14. ADDITIONAL INFORMATION
FUND ORGANIZATION
BERGER GROWTH FUND AND BERGER GROWTH AND INCOME FUND. The
Berger Growth Fund and Berger Growth and Income Fund are separate corporations
which were incorporated under the laws of the State of Maryland on March 10,
1966, as "The One Hundred Fund, Inc." and "The One Hundred and One Fund, Inc.",
respectively. The names "Berger One Hundred Fund-Registered Trademark-", "Berger
100 Fund-TM-", "Berger One Hundred and One Fund-Registered Trademark-" and
"Berger 101 Fund-Registered Trademark-" were adopted by the respective Funds as
service marks and trade names in November 1989 and were registered as service
marks in December 1991. In 1990, the shareholders of the Berger Growth and
Income Fund approved changing its formal corporate name to "Berger One Hundred
and One Fund, Inc." and the Fund began doing business under the trade name
"Berger Growth and Income Fund, Inc." in January 1996. The name "Berger Growth
and Income Fund-Registered Trademark-" was registered as a service mark in
August 1998. In January 2000, The One Hundred Fund, Inc. and the Berger One
Hundred and One Fund, Inc. formally changed their corporate names to the "Berger
Growth Fund" and the "Berger Growth and Income Fund" respectively and the name
"Berger Growth Fund-TM-" was adopted as a trade name.
Each of the Berger Growth Fund and the Berger Growth and
Income Fund has only one class of securities, its Capital Stock, with a par
value of one cent per share, of which 200,000,000 shares are authorized for
issue by the Berger Growth Fund and 100,000,000 shares are authorized for issue
by the Berger Growth and Income Fund. Shares of the Funds are fully paid and
nonassessable when issued. All shares issued by a Fund participate equally in
dividends and other distributions by the Fund, and in the residual assets of the
Fund in the event of its liquidation.
BERGER SMALL COMPANY GROWTH FUND, BERGER NEW GENERATION FUND,
BERGER BALANCED FUND, BERGER SELECT FUND, BERGER MID CAP GROWTH FUND, BERGER MID
CAP VALUE FUND AND BERGER INFORMATION TECHNOLOGY FUND. The Berger Small Company
Growth Fund is a separate series established on August 23, 1993, under the
Berger Investment Portfolio Trust, a Delaware business trust established under
the Delaware Business Trust Act. The name "Berger Small Company Growth
Fund-Registered Trademark-" was registered as a service mark in September 1995.
The Berger Small Company Growth Fund had no class designations until July 6,
1999, when all of the then-existing shares were designated as Investor Shares,
which are covered in this Statement of Additional Information, and the Fund
commenced offering a separate class known as Institutional Shares covered in a
separate Prospectus and Statement of Additional Information.
The Berger New Generation Fund was the second series created
under the Berger Investment Portfolio Trust, established on December 21, 1995.
The name "Berger New Generation Fund-Registered Trademark-" was registered as a
service mark in December 1996. The Berger Balanced Fund was the third series
created under the Berger Investment Portfolio Trust, established on August 22,
1997. The name "Berger Balanced Fund-Registered Trademark-" was registered as a
service mark in September 1998. The Berger New Generation Fund had no class
designations until July 6, 1999, when all of the then-existing shares were
designated as Investor Shares, which are covered in this Statement of Additional
Information, and the Fund commenced offering a separate class known as
Institutional Shares covered in a separate Prospectus and Statement of
Additional Information.
The Berger Select Fund and the Berger Mid Cap Growth Fund were
the fourth and fifth series created under the Trust, established on November 13,
1997. The Berger Mid Cap Value Fund was the sixth series created under the
Berger Investment Portfolio Trust, established on May 21, 1998.
The Berger Information Technology Fund was the seventh series
created under the Berger Investment Portfolio Trust, established on February 18,
1999. The Fund is the successor to the fund formerly known as the
InformationTech 100-Registered Trademark- Fund. The InformationTech
100-Registered Trademark- Fund commenced operations on April 8, 1997, as a
separate series of the Advisors Series Trust, a Delaware business trust. The
InformationTech 100-Registered Trademark- Fund was then reorganized into the
Fund in a transaction that became effective in July 1999. As part of the
reorganization, all of the then-existing shares of the predecessor fund were
exchanged for Institutional Shares of the Fund, and the Fund commenced offering
the Investor Shares covered in this Statement of Additional Information.
The Trust is authorized to issue an unlimited number of shares
of beneficial interest in series or portfolios. Currently, the Funds named above
are the only series established under the Trust, although others may be added in
the future. The Trust is also authorized to establish multiple classes of shares
representing differing interests in an existing or new series. Shares of the
Funds are fully paid and nonassessable when issued. Each share has a par value
of $.01. All shares issued by
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each Fund participate equally in dividends and other distributions by the Fund,
and in the residual assets of the Fund in the event of its liquidation.
BERGER/BIAM INTERNATIONAL FUND. The Berger/BIAM Worldwide
Funds Trust is a Delaware business trust organized on May 31, 1996. The
Berger/BIAM International Fund was established on May 31, 1996, as a series of
the Trust. The name "Berger/BIAM International Fund-Registered Trademark-" was
registered as a service mark in September 1998. The Trust is authorized to issue
an unlimited number of shares of beneficial interest in series or portfolios.
Currently, the series comprising the Fund is one of three series established
under the Trust, although others may be added in the future. The Trust is also
authorized to establish multiple classes of shares representing differing
interests in an existing or new series. Shares of the Fund are fully paid and
non-assessable when issued. Each share has a par value of $.01. All shares
issued by the Fund participate equally in dividends and other distributions by
the Fund, and in the residual assets of the Fund in the event of its
liquidation.
Berger/BIAM Worldwide Portfolios Trust is also a Delaware
business trust organized on May 31, 1996. The Berger/BIAM International
Portfolio (in which all of the investable assets of the Berger/BIAM
International Fund are invested) was established on May 31, 1996, as a series of
that Trust. Like the Berger/BIAM International Fund, the Portfolio is a
diversified, open-end management investment company. The Portfolio commenced
operations upon the transfer to the Portfolio of assets held in a pooled trust.
See "Performance Information -- Predecessor Performance Data -- Berger/BIAM
International Fund" in Section 13 above for additional information on the asset
transfer. The Berger/BIAM Worldwide Portfolios Trust is authorized to sell
unlimited interests in series or portfolios. Interests may be divided into
classes. Currently, the series comprising the Portfolio is the only series
established under that Trust, although others may be added in the future.
Each investor in the Portfolio, including the Fund, is
entitled to a vote in proportion to the amount of its investment in the
Portfolio. Whenever the Fund is requested to vote as an investor in the
Portfolio on matters pertaining to the Portfolio (other than a vote by the Fund
to continue the operation of the Portfolio upon the withdrawal of another
investor in the Portfolio), the Fund will hold a meeting of its shareholders and
will cast all of its votes as an investor in the Portfolio in the same
proportion as directed by the votes of the Fund's shareholders. Fund
shareholders who do not vote will not affect the votes cast by the Fund at the
meeting of the Portfolio investors. The percentage of the votes representing the
Fund's shareholders who do not vote will be voted by the Fund in the same
proportion as the Fund's shareholders who do, in fact, vote.
BERGER SMALL CAP VALUE FUND. The Berger Small Cap Value Fund
was originally organized in November 1984 as a Delaware corporation. In May
1990, the Fund was reorganized from a Delaware corporation into a Massachusetts
business trust known as The Omni Investment Fund. Pursuant to the Fund's
reorganization, the Fund as a series of the Trust assumed all of the assets and
liabilities of the Fund as a Delaware corporation, and Fund shareholders
received shares of the Massachusetts business trust equal both in number and net
asset value to their shares of the Delaware corporation. All references in this
Statement of Additional Information to the Fund and all financial and other
information about the Fund prior to such reorganization are to the Fund as a
Delaware corporation. All references after such reorganization are to the Fund
as a series of the Trust. On February 14, 1997, the name of the Trust was
changed to Berger Omni Investment Trust and the name of the Fund was changed to
the Berger Small Cap Value Fund. The name "Berger Small Cap Value
Fund-Registered Trademark-" was registered as a service mark in September 1998.
The Trust is authorized to issue an indefinite number of
shares of beneficial interest having a par value of $0.01 per share, which may
be issued in any number of series. Currently, the Fund is the only series
established under the Trust, although others may be added in the future. The
shares of each series of the Trust are permitted to be divided into classes.
Currently, the Fund issues two classes of shares, although others may be added
in the future.
Under the Fund's Declaration of Trust, each trustee will
continue in office until the termination of the Trust or his or her earlier
death, resignation, incapacity, retirement or removal. Vacancies will be filled
by a majority vote of the remaining trustees, subject to the provisions of the
Investment Company Act of 1940. Shareholders have the power to vote for the
election and removal of trustees, to terminate or reorganize the Trust, to amend
the Declaration of Trust, and on any other matters on which a shareholder vote
is required by the Investment Company Act of 1940, the Declaration of Trust, the
Trust's bylaws or the trustees.
DELAWARE BUSINESS TRUST INFORMATION. Under Delaware law,
shareholders of the Funds organized as series of Delaware Business Trusts will
enjoy the same limitations on personal liability as extended to stockholders of
a Delaware corporation. Further, the Trust Instruments of those Trusts provides
that no shareholder shall be personally liable for the debts, liabilities,
obligations and expenses incurred by, contracted for or otherwise existing with
respect to, the Trusts or any particular
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<PAGE>
series (fund) of the Trusts. However, the principles of law governing the
limitations of liability of beneficiaries of a business trust have not been
authoritatively established as to business trusts organized under the laws of
one jurisdiction but operating or owning property in other jurisdictions. In
states that have adopted legislation containing provisions comparable to the
Delaware Business Trust Act, it is believed that the limitation of liability of
beneficial owners provided by Delaware law should be respected. In those
jurisdictions that have not adopted similar legislative provisions, it is
possible that a court might hold that the shareholders of the Trusts are not
entitled to the limitations of liability set forth in Delaware law or the Trust
Instruments and, accordingly, that they may be personally liable for the
obligations of the Trusts.
In order to protect shareholders from such potential
liability, the Trust Instruments require that every written obligation of the
Trusts or any series thereof contain a statement to the effect that such
obligation may only be enforced against the assets of the Trusts or such series.
The Trust Instruments also provides for indemnification from the assets of the
relevant series for all losses and expenses incurred by any shareholder by
reason of being or having been a shareholder, and that the Trusts shall, upon
request, assume the defense of any such claim made against such shareholder for
any act or obligation of the relevant series and satisfy any judgment thereon
from the assets of that series.
As a result, the risk of a shareholder of the Funds in those
Trusts incurring financial loss on account of shareholder liability is limited
to circumstances in which the Fund itself would be unable to meet its
obligations. The Trusts believe that the risk of personal liability to
shareholders of the Fund is therefore remote. The trustees intend to conduct the
operations of the Trusts and the Funds so as to avoid, to the extent possible,
liability of shareholders for liabilities of the Trusts or the Funds.
MASSACHUSETTS BUSINESS TRUST INFORMATION. Under Massachusetts
law, shareholders of the Berger Small Cap Value Fund could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Declaration of Trust of the Berger Omni Investment Trust, of which
the Fund is a series, disclaims shareholder liability for acts or obligations of
the Fund and requires that notice of such disclaimer be given in each agreement,
obligation, or instrument entered into or executed by the Fund or the trustees.
The Declaration of Trust provides for indemnification out of the property of the
Fund for all loss and expense of any shareholder of the Fund held personally
liable for the obligations of the Fund. Accordingly, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Fund would be unable to meet its obligations. The
Trust believes that the risk of personal liability to shareholders of the Fund
is therefore remote. The trustees intend to conduct the operations of the Fund
to avoid, to the extent possible, liability of shareholders for liabilities of
the Fund.
CORPORATE GOVERNANCE AND OTHER INFORMATION PERTAINING TO ALL
FUNDS. None of the Funds is required to hold annual shareholder meetings unless
required by the Investment Company Act of 1940 or other applicable law or unless
called by the directors or trustees. If shareholders owning at least 10% of the
outstanding shares of the Berger Growth Fund, the Berger Growth and Income Fund
or any of the Trusts so request, a special shareholders' meeting of that Fund or
Trust will be held for the purpose of considering the removal of a director or
trustee, as the case may be. Special meetings will be held for other purposes if
the holders of at least 25% of the outstanding shares of any of those Funds or
Trusts so request. Subject to certain limitations, the Funds/Trusts will
facilitate appropriate communications by shareholders desiring to call a special
meeting for the purpose of considering the removal of a director or trustee.
Shareholders of the Funds and, where applicable, the other
series/classes of the same business trust, generally vote separately on matters
relating to those respective series/classes, although they vote together and
with the holders of any other series/classes of the same business trust in the
election of trustees of the trust and on all matters relating to the trust as a
whole. Each full share of each Fund has one vote.
Shares of the Funds have non-cumulative voting rights, which
means that the holders of more than 50% of the shares voting for the election of
directors or trustees can elect 100% of the directors or trustees if they choose
to do so and, in such event, the holders of the remaining less than 50% of the
shares voting for the election of directors or trustees will not be able to
elect any person or persons as directors or trustees.
Shares of the Funds have no preemptive rights. There are no
sinking funds or arrearage provisions which may affect the rights of the Fund
shares. Fund shares have no subscription rights or conversion rights, except
that shareholders of any class of the Berger Small Cap Value Fund and the Berger
Information Technology Fund may convert their shares into shares of any other
class of the Fund in the event and only in the event the shareholder ceases to
be eligible to purchase or hold shares of the original class, or becomes
eligible to purchase shares of a different class, by reason of a change in the
shareholder's
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<PAGE>
status under the conditions of eligibility in effect for such class at that
time. Shares of the Funds may be transferred by endorsement, or other customary
methods, but none of the Funds is bound to recognize any transfer until it is
recorded on its books.
Under governing corporate law, each Fund may enter into a
variety of corporate transactions, such as reorganizations, conversions, mergers
and asset transfers, or may be liquidated. Any such transaction would be subject
to a determination from the directors or trustees that the transaction was in
the best interests of the Fund and its shareholders, and may require obtaining
shareholder approval.
MORE INFORMATION ON SPECIAL FUND STRUCTURES
MULTI-CLASS. All of the Funds are permitted to divide their
shares into classes. However, currently only the Berger Information Technology
Fund, the Berger New Generation Fund, the Berger Small Company Growth Fund and
the Berger Small Cap Value Fund have divided their shares into classes and have
two classes of shares outstanding, the Investor Shares covered by this SAI and
the Institutional Shares offered through a separate Prospectus and SAI. These
Funds implemented their multi-class structure by adopting Rule 18f-3 Plans under
the 1940 Act permitting them to issue shares in classes. The Rule 18f-3 Plans
govern such matters as class features, dividends, voting, allocation of income
and expenses between classes, exchange and trustee monitoring of the Plan. Each
class is subject to such investment minimums and other conditions of eligibility
as are set forth in the relevant prospectus for the class, as it may be amended
from time to time. Institutional Shares are designed for institutional,
individual and other investors willing to maintain a higher minimum account
balance, currently set at $250,000. Information concerning Institutional Shares
is available from the Funds at 1-800-259-2820.
Subject to the relevant Declaration of Trust or Trust
Instrument and any other applicable provisions, the trustees of those Funds have
the authority to create additional classes, or change existing classes, from
time to time, in accordance with Rule 18f-3 under the Act.
MASTER/FEEDER. Unlike other mutual funds that directly acquire
and manage their own portfolios of securities, the Berger/BIAM International
Fund (referred to as a feeder fund) seeks to achieve its investment objective by
investing all of its investable assets in the Berger/BIAM International
Portfolio (referred to as a master fund). This two-tier structure is commonly
known as a master/feeder. The Fund has the same investment objective and
policies as the Portfolio. The Fund will invest only in the Portfolio, and the
Fund's shareholders will therefore acquire only an indirect interest in the
investments of the Portfolio. The master/feeder fund structure is still
relatively new and lacks a substantial history.
In addition to selling a beneficial interest to the Fund, the
Portfolio may sell beneficial interests to other mutual funds or institutional
investors (that is, other feeder funds). Such investors will invest in the
Portfolio on the same terms and conditions and will pay their proportionate
share of the Portfolio's expenses. However, the other investors investing in the
Portfolio are not required to issue their shares at the same public offering
price as the Fund due to potential differences in expense structures.
Accordingly, investors in the Fund should be aware that these differences may
result in differences in returns experienced by investors in the different funds
that invest in the Portfolio. Such differences in returns are common in this
type of mutual fund structure and are also present in other mutual fund
structures. Information concerning other investors in the Portfolio (for
example, other feeder funds) is available from the Fund at 1-800-706-0539.
Currently, there are two other feeder funds that also invest all of their
investable assets in the Portfolio: the International Equity Fund (designed for
eligible trusts or bank trust departments), and the Berger/BIAM International
CORE Fund, both of which have a minimum balance requirement of $1,000,000.
The investment objective of the Fund may not be changed
without the approval of the Fund's shareholders. The investment objective of the
Portfolio may not be changed without the approval of the investors in the
Portfolio, including the Fund. If the objective of the Portfolio changes and the
shareholders of the Fund do not approve a parallel change in the Fund's
investment objective, the trustees of the Trust will consider other
alternatives, including seeking an alternative investment vehicle or directly
retaining the Fund's own investment advisor.
Smaller funds investing in the Portfolio may be materially
affected by the actions of larger funds investing in the Portfolio. For example,
if a larger fund invests or withdraws from the Portfolio, the remaining funds
may experience lower or higher pro rata operating expenses. Lower returns could
possibly result from a large withdrawal. However, this possibility also exists
for traditionally structured funds which have large or institutional investors.
Also, a fund with a greater pro rata ownership in the Portfolio could have
effective voting control over the operations of the Portfolio.
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Whenever the Fund is requested to vote as an investor in the
Portfolio on matters pertaining to the Portfolio (other than a vote by the Fund
to continue the operation of the Portfolio upon the withdrawal of another
investor in the Portfolio), the Fund will hold a meeting of its shareholders and
will cast all of its votes as an investor in the Portfolio in the same
proportion as directed by the votes of the Fund's shareholders. Fund
shareholders who do not vote will not affect the votes cast by the Fund at the
meeting of the Portfolio investors. The percentage of the votes representing the
Fund's shareholders who do not vote will be voted by the Fund in the same
proportion as the Fund's shareholders who do, in fact, vote.
The Fund may withdraw its investment in the Portfolio at any
time, if the trustees of the Trust determine that it is in the best interests of
the Fund to do so. Certain changes in the Portfolio's investment objective,
policies and limitations may require the Fund to withdraw its investment in the
Portfolio. Upon any such withdrawal, the trustees would consider what action
might be taken, including investing the Fund's assets in another pooled
investment entity having the same investment objective and policies as the Fund
or retaining an investment advisor to manage the Fund's assets in accordance
with the investment policies described above with respect to the Portfolio. Any
such withdrawal could result in a distribution in-kind of portfolio securities
(as opposed to a cash distribution) from the Portfolio. If securities are
distributed, the Fund could incur brokerage, tax or other charges in converting
the securities to cash. In addition, a distribution in-kind may adversely affect
the liquidity of the Fund.
The trustees of the Berger/BIAM Worldwide Funds Trust and the
Berger/BIAM Worldwide Portfolios Trust are the same individuals. A majority of
the trustees of each of those Trusts who are not "interested persons" (as
defined in the Investment Company Act of 1940) of either Trust have adopted
written procedures reasonably appropriate to deal with potential conflicts of
interest arising from the fact that the same individuals are trustees of both
Trusts, up to and including creating a new board of trustees for one or the
other of the Trusts.
PRINCIPAL SHAREHOLDERS
Insofar as the management of the Funds is aware, as of January
4, 2000, no person owned, beneficially or of record, more than 5% of the
outstanding shares of any of the Funds, except for the following:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
OWNER FUND PERCENTAGE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Charles Schwab & Co. Inc. ("Schwab") Berger Information Technology Fund (Investor Shares) 11.11%
101 Montgomery Street -----------------------------------------------------------------------------
San Francisco, CA 94104 Berger New Generation Fund (Investor Shares) 21.71%
-----------------------------------------------------------------------------
Berger Select Fund 45.81%
-----------------------------------------------------------------------------
Berger Small Company Growth Fund (Investor Shares) 24.80%
-----------------------------------------------------------------------------
Berger Small Cap Value Fund (Investor Shares) 20.14%
-----------------------------------------------------------------------------
Berger Mid Cap Growth Fund 40.23%
-----------------------------------------------------------------------------
Berger Mid Cap Value Fund 45.86%
-----------------------------------------------------------------------------
Berger Growth Fund 20.99%
-----------------------------------------------------------------------------
Berger/BIAM International Fund 25.51%
-----------------------------------------------------------------------------
Berger Growth and Income Fund 27.19%
-----------------------------------------------------------------------------
Berger Balanced Fund 36.83%
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
National Financial Services Berger New Generation Fund (Investor Shares) 13.90%
Corporation ("Fidelity")
200 Liberty St.
One World Financial Center
New York, NY 10281-1003
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<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
-----------------------------------------------------------------------------
Berger Select Fund 12.01%
-----------------------------------------------------------------------------
Berger Small Company Growth Fund (Investor Shares) 7.68%
-----------------------------------------------------------------------------
Berger Small Cap Value Fund (Investor Shares) 28.90%
-----------------------------------------------------------------------------
Berger Mid Cap Growth Fund 17.87%
-----------------------------------------------------------------------------
Berger Growth and Income Fund 5.77%
-----------------------------------------------------------------------------
Berger Balanced Fund 12.65%
- ----------------------------------------------------------------------------------------------------------------------
Donaldson Lufkin & Jenrette Berger Small Cap Value Fund (Investor Shares) 5.19%
("DLJ") -----------------------------------------------------------------------------
SEC Corp Pershing Division Berger Balanced Fund 5.42%
P.O. Box 2052
Jersey City, NJ 07303
- ----------------------------------------------------------------------------------------------------------------------
National Investor Services Corp. Berger Information Technology Fund (Investor Shares) 12.97%
55 Water Street, 32nd Floor -----------------------------------------------------------------------------
New York, NY 10041-3299 Berger New Generation Fund (Investor Shares) 5.32%
-----------------------------------------------------------------------------
Berger Balanced Fund 6.11%
- ----------------------------------------------------------------------------------------------------------------------
Merrill Lynch Berger Small Cap Value (Investor Shares) 6.03%
4800 Deer lake Dr.
Jacksonville, FL 32246-6484
- ----------------------------------------------------------------------------------------------------------------------
Northern Trust Company Berger Small Cap Value (Investor Shares) 6.71%
P.O. Box 92956
Chicago, IL 60675-2956
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Any person owning more than 25% of the oustanding securities
of a Fund may be deemed to control it. Schwab and Fidelity are believed to
hold their shares of the Funds as nominees for the benefit of their client.
In addition, Schwab owned of record 26.08%, and Fidelity owned
of record 8.52% of all the outstanding shares of the Berger Investment Portfolio
Trust, of which the Berger Information Technology Fund, Berger New Generation
Fund, Berger Select Fund, Berger Small Company Growth Fund, Berger Mid Cap
Growth Fund, Berger Mid Cap Value Fund and the Berger Balanced Fund are
outstanding series. Schwab also owned of record 18.65%, Fidelity owned of record
16.88% and DLJ owned of record 10.26% of all the outstanding shares of the
Berger Omni Investment Trust, of which the Berger Small Cap Value Fund -
Investor Shares class is one of two outstanding classes in the only outstanding
series. In addition, Schwab also owned of record 18.37% of the outstanding
shares of the Berger/BIAM Worldwide Funds Trust, of which the Berger/BIAM
International Fund is one of three outstanding series.
As of January 4, 2000, Schwab owned of record 57.28% of the
outstanding shares of the Berger Information Technology Fund, a series of the
Berger Investment Portfolio Trust, when Schwab's record ownership of the Fund's
Trust shares is added together with record ownership of Institutional Shares of
the Fund. In addition, Bay Isle has advised the Trust that, as January 4, 2000,
it had voting discretion over approximately 27.60% of that fund's outstanding
shares in accounts beneficially owned by various Bay Isle advisory clients. Bay
Isle may be deemed to beneficially own those shares as a result of its voting
discretion.
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<PAGE>
DISTRIBUTION
Berger Distributors LLC, as the Funds' Distributor, is the
principal underwriter of all the Funds' shares. The Distributor is a
wholly-owned subsidiary of Berger LLC. The Distributor is a registered
broker-dealer under the Securities Exchange Act of 1934 and is a member of the
National Association of Securities Dealers, Inc. The Distributor acts as the
agent of a Fund in connection with the sale of the Fund's shares in all states
in which the shares are eligible for sale and in which the Distributor is
qualified as a broker-dealer. David J. Schultz, Chief Financial Officer,
Assistant Secretary and Treasurer of the Distributor, is also Vice President and
Treasurer of the Funds. Janice M. Teague, Vice President and Secretary of the
Distributor, is also Vice President and Secretary of the Funds. Brian Ferrie,
Vice President and Chief Compliance Officer of the Distributor, is also Vice
President of the Funds.
Each of the Funds and the Distributor are parties to a
Distribution Agreement that continues through April 2000 or 2001, and thereafter
from year to year if such continuation is specifically approved at least
annually by the directors or trustees or by vote of a majority of the
outstanding shares of the Fund and in either case by vote of a majority of the
directors or trustees who are not "interested persons" (as that term is defined
in the Investment Company Act of 1940) of the Fund or the Distributor. The
Distribution Agreement is subject to termination by the Fund or the Distributor
on 60 days' prior written notice, and terminates automatically in the event of
its assignment. Under the Distribution Agreement, the Distributor continuously
offers shares of the Funds and solicits orders to purchase Fund shares at net
asset value. The Distributor is not compensated for its services under the
Distribution Agreement, but may be reimbursed by Berger LLC for its costs in
distributing Fund shares.
OTHER INFORMATION
The Funds have each filed with the Securities and Exchange
Commission, Washington, D.C., a Registration Statement under the Securities Act
of 1933, as amended, with respect to the securities of the Funds of which this
Statement of Additional Information is a part. If further information is desired
with respect to any of the Funds or such securities, reference is made to the
Registration Statements and the exhibits filed as a part thereof.
Davis, Graham & Stubbs LLP, 370 Seventeenth Street, Denver,
Colorado, acts as counsel to the Funds.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 950 Seventeenth Street, Denver,
Colorado, acted as independent accountants for each of the Funds for the fiscal
year ended September 30, 1999. In that capacity, PricewaterhouseCoopers LLP
audited the financial statements of the Funds referenced below under "Financial
Information" and assisted the Funds in connection with the preparation of their
1998 income tax returns.
PricewaterhouseCoopers LLP has been appointed to act as
independent accountants for the Funds for the fiscal year ended September 30,
2000. In that capacity, PricewaterhouseCoopers LLP will audit the financial
statements of the Funds and assist the Funds in connection with the preparation
of their 1999 income tax returns.
FINANCIAL INFORMATION
A copy of the Annual Report referenced below is enclosed with
this SAI. Additional copies of that Report may be obtained upon request without
charge by calling the Funds at 1-800-333-1001.
YEAR-END FINANCIAL STATEMENTS
The following financial statements for each of the named Funds
are incorporated herein by reference from the Annual Report to Shareholders of
the Berger Funds dated September 30, 1999, in each case along with the Report of
Independent Accountants thereon of PricewaterhouseCoopers LLP, dated November 4,
1999:
FOR THE BERGER INFORMATION TECHNOLOGY FUND, BERGER NEW GENERATION FUND, THE
BERGER SELECT FUND, THE BERGER SMALL COMPANY GROWTH FUND, THE BERGER SMALL CAP
VALUE FUND, THE BERGER MID CAP GROWTH FUND, THE BERGER MID CAP VALUE FUND, THE
BERGER 100 FUND (N/K/A BERGER GROWTH FUND), THE BERGER/BIAM INTERNATIONAL FUND,
THE BERGER GROWTH AND INCOME FUND AND THE BERGER BALANCED FUND:
Schedule of Investments as of September 30, 1999
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<PAGE>
Statement of Assets and Liabilities as of September 30, 1999
Statement of Operations for the Fiscal Year/Period Ended
September 30, 1999
Statement of Changes in Net Assets for each of the periods indicated
Notes to Financial Statements, September 30, 1999
Financial Highlights for each of the periods indicated.
FOR THE BERGER/BIAM INTERNATIONAL PORTFOLIO:
Schedule of Investments as of September 30, 1999
Statement of Assets and Liabilities as of September 30, 1999
Statement of Operations for the Fiscal Year Ended September 30, 1999
Statement of Changes in Net Assets for the Fiscal Years Ended
September 30, 1999 and 1998
Ratios/Supplementary Data for each of the periods indicated
Notes to Financial Statements, September 30, 1999.
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APPENDIX A
HIGH-YIELD/HIGH-RISK SECURITIES
Each of the Funds may invest in convertible securities of any quality,
including unrated securities or securities rated below investment grade (Ba or
lower by Moody's, BB or lower by S&P). However, a Fund will not purchase any
security in default at the time of purchase. None of the Funds will invest more
than 20% of the market value of its assets at the time of purchase in
convertible securities rated below investment grade.
Securities rated below investment grade are subject to greater risk
that adverse changes in the financial condition of their issuers or in general
economic conditions, or an unanticipated rise in interest rates, may impair the
ability of their issuers to make payments of interest and principal or
dividends. The market prices of lower grade securities are generally less
sensitive to interest rate changes than higher-rated investments, but more
sensitive to economic changes or individual corporate developments. Periods of
economic uncertainty and change can be expected to result in volatility of
prices of these securities. Lower rated securities also may have less liquid
markets than higher rated securities, and their liquidity as well as their value
may be adversely affected by poor economic conditions. Adverse publicity and
investor perceptions as well as new or proposed laws may also have a negative
impact on the market for high-yield/high-risk bonds. In the event of an
unanticipated default, a Fund will experience a reduction in its income and
could expect a decline in the market value of the securities affected. The
prices of these securities may be more volatile and the markets for them may be
less liquid than those for higher-rated securities.
Unrated securities, while not necessarily of lower quality than rated
securities, may not have as broad a market. Unrated securities will be included
in a Fund's percentage limits for investments rated below investment grade,
unless the Fund's advisor deems such securities to be the equivalent of
investment grade. If securities purchased by a Fund are downgraded following
purchase, or if other circumstances cause the Fund to exceed its percentage
limits on assets invested in securities rated below investment grade, the
director or trustees of the Fund, in consultation with the Fund's advisor, will
determine what action, if any, is appropriate in light of all relevant
circumstances.
Relying in part on ratings assigned by credit agencies in making
investments will not protect a Fund from the risk that the securities will
decline in value, since credit ratings represent evaluations of the safety of
principal, dividend and/or interest payments, and not the market values of such
securities. Moreover, such ratings may not be changed on a timely basis to
reflect subsequent events.
Although the market for high-yield debt securities has been in
existence for many years and from time to time has experienced economic
downturns, this market has involved a significant increase in the use of
high-yield debt securities to fund highly leverage corporate acquisitions and
restructurings. Past experience may not, therefore, provide an accurate
indication of future performance of the high-yield debt securities market,
particularly during periods of economic recession.
Expenses incurred in recovering an investment in a defaulted security
may adversely affect a Fund's net asset value. Moreover, the reduced liquidity
of the secondary market for such securities may adversely affect the market
price of, and the ability of a Fund to value, particular securities at certain
times, thereby making it difficult to make specific valuation determinations.
CORPORATE BOND RATINGS
The ratings of fixed-income securities by Moody's and Standard & Poor's
are a generally accepted measurement of credit risk. However, they are subject
to certain limitations. Ratings are generally based upon historical events and
do not necessarily reflect the future. In addition, there is a period of time
between the issuance of a rating and the update of the rating, during which time
a published rating may be inaccurate.
KEY TO MOODY'S CORPORATE RATINGS
Aaa-Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa-Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
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protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A-Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa-Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba-Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during good and bad times over the future. Uncertainty of position
characterizes bonds of this class.
B-Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
Caa-Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.
Ca-Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C-Bonds which are rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic
rating classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic category.
KEY TO STANDARD & POOR'S CORPORATE RATINGS
AAA-Debt rated AAA has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.
AA-Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in a small degree.
A-Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.
BBB-Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions, or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
BB, B, CCC, CC AND C-Debt rated BB, B, CCC, CC and C is regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and C the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are out-weighed by the large uncertainties or major risk exposures to adverse
conditions.
C1-The rating C1 is reserved for income bonds on which no interest is
being paid.
D-Debt rated D is in default, and payment of interest and/or repayment
of principal is in arrears.
PLUS (+) OR MINUS (-)-The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.
-62-
<PAGE>
BERGER ONE HUNDRED AND ONE FUND, INC.
PART C. OTHER INFORMATION
Item 23. EXHIBITS
The Exhibit Index following the signature pages below is
incorporated herein by reference.
Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
Item 25. INDEMNIFICATION
Article XXVII, Section 7 of the Fund's Bylaws provides for
indemnification of certain persons acting on behalf of the Fund to the full
extent permitted by the Maryland General Corporation Law and the Investment
Company Act of 1940. In general, directors, officers and employees will be
indemnified against liability and against all expenses of litigation incurred by
them in connection with any claim, action, suit or proceeding (or settlement of
same) in which they become involved by virtue of their Fund office, unless their
conduct is determined to constitute willful misfeasance, bad faith, gross
negligence or reckless disregard of their duties, or unless it has been
determined that they have not acted in good faith in the reasonable belief that
their actions were in or not opposed to the best interests of the Fund or, in
the case of criminal proceedings, unless they had reasonable cause to believe
that their conduct was unlawful. The Fund also may advance money for these
expenses, provided that the director, officer or employee undertakes to repay
the Fund if his conduct is later determined to preclude indemnification. The
Fund has the power to purchase insurance on behalf of its directors, officers,
employees and agents, whether or not it would be permitted or required to
indemnify them for any such liability under the Bylaws or applicable law, and
the Fund has purchased and maintains an insurance policy covering such persons
against certain liabilities incurred in their official capacities.
Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The business of Berger LLC, the investment adviser of the
Fund, is described in the Prospectus under the heading "Organization of the
Berger Funds Family -- Investment Managers" and in the Statement of Additional
Information in Section 4 which are included in this Registration Statement.
Information relating to the business and other connections of the officers and
directors of Berger LLC (current and for the past two years) is listed in
Schedules A and D of Berger LLC's Form ADV as filed with the Securities and
Exchange Commission (File No. 801-9451, dated October 1, 1999), which
information from such schedules is incorporated herein by reference.
C-1
<PAGE>
Item 27. PRINCIPAL UNDERWRITERS
(a) Investment companies for which the Fund's principal
underwriter also acts as principal underwriter, depositor or investment adviser:
Berger Growth Fund, Inc.
Berger Growth and Income Fund, Inc.
Berger Investment Portfolio Trust
- --Berger Information Technology Fund
- --Berger Small Company Growth Fund
- --Berger New Generation Fund
- --Berger Balanced Fund
- --Berger Select Fund
- --Berger Mid Cap Growth Fund
- --Berger Mid Cap Value Fund
Berger Omni Investment Trust
- --Berger Small Cap Value Fund
Berger Institutional Products Trust
- --Berger IPT - Growth Fund
- --Berger IPT - Growth and Income Fund
- --Berger IPT - Small Company Growth Fund
- --Berger/BIAM IPT - International Fund
Berger/BIAM Worldwide Funds Trust
- --Berger/BIAM International Fund
- --International Equity Fund
- --Berger/BIAM International CORE Fund
(b) For Berger Distributors LLC:
<TABLE>
<CAPTION>
- ------------------------- --------------------------------- -------------------------------
Name Positions and Positions and
Offices with Offices with
Underwriter Registrant
- ------------------------- --------------------------------- -------------------------------
<S> <C> <C>
David G. Mertens President, CEO None
- ------------------------- --------------------------------- -------------------------------
David J. Schultz Chief Financial Officer, Vice President and Treasurer
Assistant Secretary and
Treasurer
- ------------------------- --------------------------------- -------------------------------
Brian Ferrie Vice President and Chief Vice President
Compliance Officer
- ------------------------- --------------------------------- -------------------------------
Mark S. Sunderhuse Vice President and Secretary Vice President and Secretary
Janice M. Teague
- ------------------------- --------------------------------- -------------------------------
Sue Vreeland None
Assistant Secretary
- ------------------------- --------------------------------- -------------------------------
</TABLE>
C-2
<PAGE>
The principal business address of each of the persons in the
table above is 210 University Blvd., Suite 900, Denver, CO 80206.
(c) Not applicable.
Item 28. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books and other documents required to be
maintained by Section 31(a) of the 1940 Act and the rules promulgated thereunder
are maintained as follows:
(a) Shareholder records are maintained by the
Registrant's sub-transfer agent, DST Systems, Inc.,
P.O. Box 419958, Kansas City, MO 64141;
(b) Accounting records relating to cash and other money
balances; asset, liability, reserve, capital, income
and expense accounts; portfolio securities; purchases
and sales; and brokerage commissions are maintained
by the Registrant's Recordkeeping and Pricing Agent,
Investors Fiduciary Trust Company ("IFTC"), 801
Pennsylvania, Kansas City, Missouri 64105. Other
records of the Registrant relating to purchases and
sales; the Trust Instrument, minute books and other
trust records; brokerage orders; performance
information and other records are maintained at the
offices of the Registrant at 210 University
Boulevard, Suite 900, Denver, Colorado 80206.
Item 29. MANAGEMENT SERVICES
The Registrant has no management-related service contract
which is not discussed in Parts A and B of this form.
Item 30. UNDERTAKINGS
Not applicable.
C-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant has duly caused this
Amendment to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City and County of Denver, and
State of Colorado, on the 28th day of January 2000.
BERGER ONE HUNDRED AND ONE FUND, INC.
(Registrant)
By /s/ Jack R. Thompson
-----------------------------
Name: Jack R. Thompson
-----------------
Title: President
----------------
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Jack R. Thompson President (Principal January 28, 2000
- ------------------------------- Executive Officer)
Jack R. Thompson and Director
/s/ David J. Schultz Vice President and January 28, 2000
- ------------------------------- Treasurer (Principal
David J. Schultz Financial Officer)
/s/ John Paganelli Assistant Treasurer January 28, 2000
- -------------------------------- (Principal Accounting
John Paganelli Officer)
Dennis E. Baldwin* Director January 28, 2000
- -------------------------------
Dennis E. Baldwin
Louis R. Bindner* Director January 28, 2000
- -------------------------------
Louis R. Bindner
C-4
<PAGE>
Katherine A. Cattanach* Director January 28,2000
- -------------------------------
Katherine A. Cattanach
Paul R. Knapp* Director January 28,2000
- -------------------------------
Paul R. Knapp
Harry T. Lewis, Jr.* Director January 28,2000
- -------------------------------
Harry T. Lewis, Jr.
Michael Owen* Director January 28,2000
- -------------------------------
Michael Owen
William Sinclaire* Director January 28,2000
- -------------------------------
William Sinclaire
*By:/s/ Jack R. Thompson
--------------------
Jack R. Thompson
Attorney-in-fact
C-5
<PAGE>
BERGER ONE HUNDRED AND ONE FUND, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
N-1A EDGAR
Exhibit Exhibit
No. No. Name of Exhibit
- ------------------ ---------------- -----------------------
<S> <C> <C>
(3) Exhibit 23(a)-1 EX-99.B23(a)-1 Articles of Incorporation (10/22/66)
(3) Exhibit 23(a)-2 EX-99.B23(a)-2 Articles of Amendment (10/22/66)
(3) Exhibit 23(a)-3 EX-99.B23(a)-3 Articles of Amendment (6/26/90)
(3) Exhibit 23(a)-4 EX-99.B23(a)-4 Articles Supplementary (7/1/93)
(3) Exhibit 23(b) EX-99.B23(b) Bylaws (as amended through June
20, 1997)
Exhibit 23(c) Not applicable
(3) Exhibit 23(d) EX-99.B23(d) Form of Investment Advisory Agreement
* Exhibit 23(d)-1 EX-99.B23(d)-1 Form of Amendment to Investment
Advisory Agreement
* Exhibit 23(d)-2 EX-99.B23(d)-2 Form of Assignment and Assumption
Agreement for the Assignment and
Assumption of the Investment
Advisory Agreement, Administrative
Services Agreement, and Rule 12b-1
Plan and 18f-3 Plan.
(1) Exhibit 23(e) Form of Distribution Agreement
between the Fund and Berger
Distributors LLC
Exhibit 23(f) Not applicable
(2) Exhibit 23(g) Form of Custody Agreement
(3) Exhibit 23(h)-1 EX-99.B23(h)-1 Form of Amended and Restated
Administrative Services Agreement
* Exhibit 23(h)-1a EX-99.B23(h)-1a Form of Amendment to Restated
Administrative Services Agreement
(3) Exhibit 23(h)-2 EX-99.B23(h)-2 Form of Recordkeeping and Pricing
Agent Agreement
(3) Exhibit 23(h)-3 EX-99.B23(h)-3 Form of Agency Agreement
* Exhibit 23(i) EX-99.B23(j) Consent of PricewaterhouseCoopers
LLP
Exhibit 23(k) Not applicable
Exhibit 23(l) Not applicable
(3) Exhibit 23(m) EX-99.B23(m) Form of Rule 12b-1 Plan,
as amended
(3) Exhibit 23(n) EX-27 Financial Data Schedule
Exhibit 23(o) Not Applicable
</TABLE>
- -----------------------
* File herewith.
Filed previously as indicated below and incorporated herein by reference:
(1) Filed as Exhibit 6 with Post-Effective Amendment No. 46 to Registrant's
Registration Statement on Form N-1A filed December 31, 1997.
C-6
<PAGE>
(2) Filed as Exhibit 8 from Post-Effective Amendment No. 43 to Registrant's
Registration Statement on Form N-1A filed November 27, 1995.
(3) Filed as Exhibit number listed with Post-Effective Amendment No. 46 to
the Registrant's Registration Statement on Form N-1A, filed January 25,
1999.
C-7
<PAGE>
AMENDMENT NO. 1
TO
INVESTMENT ADVISORY AGREEMENT
BERGER GROWTH AND INCOME FUND
This AMENDMENT NO. 1 TO INVESTMENT ADVISORY AGREEMENT (the "Amendment") is
made effective as of the 1st day of October, 1999, between BERGER LLC, a Nevada
limited liability company, and BERGER ONE HUNDRED AND ONE FUND, INC., a Maryland
corporation (the "Fund"), doing business as BERGER GROWTH AND INCOME FUND.
RECITALS
A. Berger Associates, Inc., and the Fund entered into that certain
Investment Advisory Agreement dated October 14, 1994 (the "Agreement"), setting
forth the terms and conditions under which the Fund has appointed Berger
Associates, Inc., as investment advisor for the Fund.
B. Effective September 30, 1999, Berger Associates, Inc., assigned and
transferred all its rights, interests, duties and obligations, including its
rights, interests, duties and obligations under the Agreement, to its
subsidiary, Berger LLC, in an assignment and transfer approved by the directors
of the Fund. Accordingly, all compensation paid hereafter by the Fund for
investment advisory services under the Agreement is to be paid to Berger LLC
rather than to Berger Associates, Inc.
C. Berger LLC and the Fund desire to set forth herein their mutual
agreement to change the compensation paid to Berger LLC under the Agreement.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. REDUCTION IN COMPENSATION. Section 4 of the Agreement is hereby
amended in its entirety to read as follows:
"4. COMPENSATION. The Fund shall pay to Berger LLC for its
services under this Agreement a fee, payable in United States dollars, at
an annual rate of 0.75% of the first $500 million of average daily net
assets of the Fund, 0.70% of the next $500 million of average daily net
assets of the Fund and 0.65% on any part of the average daily net assets
of the Fund in excess of $1 billion. This fee shall be computed and
accrued daily and payable monthly as of the last day of each month during
which or part of which this Agreement is in effect. For the month during
which this Agreement becomes effective and the month during
-1-
<PAGE>
which it terminates, however, there shall be an appropriate proration of
the fee payable for such month based on the number of calendar days of
such month during which this Agreement is effective."
2. NO OTHER CHANGES. No changes to the Agreement are intended by the
parties other than the change reflected in Section 1 of this Amendment, and all
other provisions of the Agreement are hereby confirmed.
3. GOVERNING LAW. This Amendment shall be construed in accordance with
the laws of the State of Colorado (without giving effect to the conflicts of
laws principles thereof) and the Investment Company Act of 1940, as amended. To
the extent that the applicable laws of the State of Colorado conflict with the
applicable provisions of the Investment Company Act of 1940, as amended, the
latter shall control.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Amendment as of the date and year first above written.
BERGER LLC
By: /s/ Jack R. Thompson
---------------------
Jack R. Thompson
President
BERGER ONE HUNDRED AND ONE FUND, INC.
By: /s/ Jack R. Thompson
---------------------
Jack R. Thompson
President
-2-
<PAGE>
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement ("Agreement"), effective as of
September 30, 1999, by and between Berger Associates, Inc., a Delaware
corporation ("Associates"), and Berger LLC, a Nevada limited liability company
("LLC").
RECITALS
WHEREAS, Associates or an affiliate of Associates provides investment
advisory and administrative services to the following investment companies: The
One Hundred Fund, Inc.; Berger One Hundred and One Fund, Inc., d/b/a Berger
Growth and Income Fund; Berger Small Cap Value Fund, a series of Berger Omni
Investment Trust; Berger Mid Cap Value Fund, Berger Small Company Growth Fund,
Berger New Generation Fund, Berger Balanced Fund, Berger Select Fund, Berger Mid
Cap Growth Fund, and Berger Information Technology Fund, each a series of Berger
Investment Portfolio Trust; Berger IPT-100 Fund, Berger IPT-Growth and Income
Fund, Berger IPT-Small Company Growth Fund, and Berger/BIAM IPT-International
Fund, each a series of Berger Institutional Products Trust; Berger/BIAM
International Portfolio, a series of Berger/BIAM Worldwide Portfolios Trust, and
Berger/BIAM International Fund, Berger/BIAM International CORE Fund and
International Equity Fund, each a series of Berger/BIAM Worldwide Funds Trust
(each a "Berger Fund" and collectively, the "Berger Funds"); and
WHEREAS, Associates desires to transfer, convey, assign and deliver to
LLC certain agreements and plans relating to the Berger Funds to which
Associates is a party or under which Associates has rights or obligations, and
LLC desires to accept and assume such rights and obligations, on the terms and
conditions set forth in this Agreement; and
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
ASSIGNMENT AND ASSUMPTION OF
INVESTMENT ADVISORY AGREEMENTS
1.1 Subject to the terms and conditions herein stated, Associates
hereby assigns, transfers, conveys, delegates and delivers to LLC all of
Associates' rights, interests, duties, obligations, burdens, responsibilities
and liabilities, of every kind and nature whatsoever, whenever created or
incurred, under the investment advisory and sub-advisory agreements to which
Associates is a party, as set forth on EXHIBIT A attached hereto and
incorporated herein by reference (the "Assigned Advisory Agreements").
1.2 Subject to the terms and conditions herein stated, LLC hereby
expressly (i) undertakes, assumes and agrees to perform and/or satisfy each and
every one of Associates' obligations, duties, burdens, responsibilities and
liabilities under the Assigned Advisory Agreements, (ii) agrees to be bound by
all of the provisions of the Assigned Advisory Agreements, to the same extent as
if LLC had initially executed and delivered such agreements, and (iii) agrees to
indemnify Associates from and against any liability, loss, or damage arising
under the Assigned Advisory Agreements.
<PAGE>
ARTICLE II
ASSIGNMENT AND ASSUMPTION OF
ADMINISTRATIVE SERVICES AGREEMENTS
2.1 Subject to the terms and conditions herein stated, Associates
hereby assigns, transfers, conveys and delegates to LLC its rights, interests,
duties, obligations, burdens, responsibilities and liabilities, of every kind
and nature whatsoever, whenever created or incurred, under the administrative
services agreements to which Associates is a party, as set forth on EXHIBIT B
attached hereto and incorporated herein by reference (the "Assigned
Administrative Agreements").
2.2 Subject to the terms and conditions herein stated, LLC hereby
expressly (i) undertakes, assumes and agrees to perform and/or satisfy each and
every one of Associates' obligations, duties, burdens, responsibilities and
liabilities under the Assigned Administrative Agreements, (ii) agrees to be
bound by all of the provisions of the Assigned Administrative Agreements, to the
same extent as if LLC had initially executed and delivered such agreements, and
(iii) agrees to indemnify Associates from and against any liability, loss, or
damage arising under the Assigned Administrative Agreements.
ARTICLE III
ASSIGNMENT AND ASSUMPTION OF
FEE WAIVER AGREEMENTS
3.1 Subject to the terms and conditions herein stated, Associates
hereby assigns, transfers, conveys and delegates to LLC its rights, interests,
duties, obligations, burdens, responsibilities and liabilities, of every kind
and nature whatsoever, whenever created or incurred, under the investment
advisory fee waiver agreements to which Associates is a party, as set forth on
EXHIBIT C attached hereto and incorporated herein by reference (the "Assigned
Fee Waiver Agreements").
3.2 Subject to the terms and conditions herein stated, LLC hereby
expressly (i) undertakes, assumes and agrees to perform and/or satisfy each and
every one of Associates' obligations, duties, burdens, responsibilities and
liabilities under the Assigned Fee Waiver Agreements, (ii) agrees to be bound by
all of the provisions of the Assigned Fee Waiver Agreements, to the same extent
as if LLC had initially executed and delivered such agreements, and (iii) agrees
to indemnify Associates from and against any liability, loss, or damage arising
under the Assigned Fee Waiver Agreements.
ARTICLE IV
ASSIGNMENT AND ASSUMPTION OF RULE 12B-1 PLANS AND RULE 18F-3 PLANS
4.1 Subject to the terms and conditions herein stated, Associates
hereby assigns, transfers, conveys and delegates to LLC its rights, interests,
duties, obligations, burdens, responsibilities and liabilities, of every kind
and nature whatsoever, whenever created or incurred, under the separate Rule
12b-1 plans, and the separate Rule 18f-3 plans, adopted by the Berger Funds, as
set forth on EXHIBIT D attached hereto and incorporated herein by reference
-2-
<PAGE>
(the "Assigned Rule 12b-1 Plans" and "Assigned Rule 18f-3 Plans," respectively,
and collectively, the "Assigned Plans").
4.2 Subject to the terms and conditions herein stated, LLC hereby
expressly (i) undertakes, assumes and agrees to perform and/or satisfy each and
every one of Associates' obligations, duties, burdens and responsibilities under
the Assigned Plans, (ii) agrees to be bound by all of the provisions of the
Assigned Plans relating to Associates, and (iii) agrees to indemnify Associates
from and against any liability, loss, or damage arising under the Assigned
Plans.
ARTICLE V
ASSIGNMENT AND ASSUMPTION OF PARTICIPATION AGREEMENTS
5.1 Subject to the terms and conditions herein stated, Associates
hereby assigns, transfers, conveys and delegates to LLC its rights, interests,
duties, obligations, burdens, responsibilities and liabilities, of every kind
and nature whatsoever, whenever created or incurred, under the participation
agreements to which Associates is a party, as set forth on EXHIBIT E attached
hereto and incorporated herein by reference (the "Assigned Participation
Agreements").
5.2 Subject to the terms and conditions herein stated, LLC hereby
expressly (i) undertakes, assumes and agrees to perform and/or satisfy each and
every one of Associates' obligations, duties, burdens, responsibilities and
liabilities under the Assigned Participation Agreements, (ii) agrees to be bound
by all of the provisions of the Assigned Participation Agreements, to the same
extent as if LLC had initially executed and delivered such agreements, and (iii)
agrees to indemnify Associates from and against any liability, loss, or damage
arising under the Assigned Participation Agreements.
ARTICLE VI
ASSIGNMENT AND ASSUMPTION OF REORGANIZATION AGREEMENT
6.1 Subject to the terms and conditions herein stated, Associates
hereby assigns, transfers, conveys and delegates to LLC its rights, interests,
duties, obligations, burdens, responsibilities and liabilities, of every kind
and nature whatsoever, whenever created or incurred, under the separate
Agreement and Plan of Reorganization, dated April 16, 1999, between Advisors
Series Trust with respect to its series InformationTech 100 Fund and Berger
Investment Portfolio Trust with respect to its series Berger Information
Technology Fund (the "Assigned Reorganization Agreement").
6.2 Subject to the terms and conditions herein stated, LLC hereby
expressly (i) undertakes, assumes and agrees to perform and/or satisfy each and
every one of Associates' obligations, duties, burdens, responsibilities and
liabilities under the Assigned Reorganization Agreement, (ii) agrees to be bound
by all of the provisions of the Assigned Reorganization Agreement relating to
Associates, and (iii) agrees to indemnify Associates from and against any
liability, loss, or damage arising under the Assigned Reorganization Agreement.
-3-
<PAGE>
ARTICLE VII
GENERAL PROVISIONS
7.1 CONDITIONS TO ASSIGNMENT AND ASSUMPTION. The assignment by
Associates, and the assumption by LLC, of the Assigned Advisory Agreements, the
Assigned Administrative Services Agreements, the Assigned Fee Waiver Agreements,
the Assigned Plans, the Assigned Participation Agreements and the Assigned
Reorganization Agreement are subject to obtaining such approval of the Board of
Directors or Board of Trustees, as the case may be, of the Berger Funds to which
such agreements relate, as may be required under the Investment Company Act of
1940, by order of the Board of Governors of the Federal Reserve Board, or by any
other applicable law, rule, regulation or order, and to obtaining such consents
as may be required under the provisions of such assigned agreements.
7.2 FURTHER ASSURANCES. Associates and LLC each shall take such action
and execute and deliver to the other party all such instruments and documents as
such other party may reasonably request to carry out the intent and purposes of
this Agreement and the transactions contemplated hereby. In particular,
Associates and LLC acknowledge the purpose of this Agreement is to: assign to
LLC all of the rights, interests, duties, obligations, burdens, responsibilities
and liabilities under the investment advisory and sub-advisory agreements to
which Associates is a party; assign to LLC all of the rights, interests, duties,
obligations, burdens, responsibilities and liabilities under the administrative
services agreements to which Associates is a party; assign to LLC all of the
rights, interests, duties, obligations, burdens, responsibilities and
liabilities under the investment advisory fee waiver agreements to which
Associates is a party; assign to LLC all of Associates' rights, interests,
duties, obligations, burdens, responsibilities and liabilities under the
Assigned Plans; assign to LLC all of the rights, interests, duties, obligations,
burdens, responsibilities and liabilities under the participation agreements to
which Associates is a party; assign to LLC all of the rights, interests, duties,
obligations, burdens, responsibilities and liabilities under the Assigned
Reorganization Agreement; and to assign to LLC, and for LLC to accept and
assume, all of Associates' rights, interests, duties, obligations, burdens,
responsibilities and liabilities as described in Sections 1.2, 2.2, 3.2, 4.2,
5.2 and 6.2 herein, so that if any such agreement, or right, interest, duty,
obligation, burden, responsibility or liability is inadvertently not included
specifically in this Agreement, Associates and LLC agree to take the appropriate
actions needed to transfer any such agreement or right, interest, duty,
obligation, burden, responsibility or liability to LLC and for LLC to assume the
same.
7.3 GOVERNING LAW. The interpretation and construction of this
Agreement, and all matters relating thereto, shall be governed by the laws of
the State of Colorado, without regard to its principles of conflicts of law.
7.4 ASSIGNMENT AND AMENDMENT. This Agreement may not be transferred,
assigned, pledged or hypothecated by any party without the prior written consent
of the other party. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement may not be changed or modified except by a written
amendment hereto signed by all parties affected by such amendment.
7.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed an original and all of
which together shall constitute one and the same agreement.
-4-
<PAGE>
IN WITNESS WHEREOF, each of the parties have executed this Agreement as
of the day and year first set forth above.
BERGER ASSOCIATES, INC. BERGER LLC
By: By:
--------------------------- ------------------------------
Jack R. Thompson Jack R. Thompson
President President
-5-
<PAGE>
EXHIBIT A
ASSIGNED ADVISORY AGREEMENTS
The following are the Assigned Advisory Agreements being assigned by
Associates and assumed by LLC pursuant to Article I of the Agreement:
1. Investment Advisory Agreement, dated October 14, 1994, between
Berger Associates, Inc. and The One Hundred Fund, Inc.;
2. Investment Advisory Agreement, dated October 14, 1994, between
Berger Associates, Inc. and Berger One Hundred and One Fund, Inc.;
3. Investment Advisory Agreement, dated February 14, 1997, between
Berger Associates, Inc. and Berger Omni Investment Trust;
4. Investment Advisory Agreement, dated October 14, 1994, between
Berger Associates, Inc. and Berger Investment Portfolio Trust with respect to
Berger Small Company Growth Fund;
5. Investment Advisory Agreement, dated March 6, 1996, between Berger
Associates, Inc. and Berger Investment Portfolio Trust with respect to Berger
New Generation Fund;
6. Investment Advisory Agreement, dated December 31, 1997, between
Berger Associates, Inc. and Berger Investment Portfolio Trust with respect to
Berger Mid Cap Growth Fund;
7. Investment Advisory Agreement, dated December 31, 1997, between
Berger Associates, Inc. and Berger Investment Portfolio Trust with respect to
Berger Select Fund;
8. Investment Advisory Agreement, dated September 3, 1997, between
Berger Associates, Inc. and Berger Investment Portfolio Trust with respect to
Berger Balanced Fund;
9. Investment Advisory Agreement, dated July 7, 1998, between Berger
Associates, Inc. and Berger Investment Portfolio Trust with respect to Berger
Mid Cap Value Fund;
10. Investment Advisory Agreement, dated July 1, 1999, between Berger
Associates, Inc. and Berger Investment Portfolio Trust with respect to Berger
Information Technology Fund;
11. Investment Advisory Agreement, dated April 16, 1996, between Berger
Associates, Inc. and Berger Institutional Products Trust with respect to Berger
IPT-100 Fund;
12. Investment Advisory Agreement, dated April 16, 1996, between Berger
Associates, Inc. and Berger Institutional Products Trust with respect to Berger
IPT-Growth and Income Fund;
-6-
<PAGE>
13. Investment Advisory Agreement, dated April 16, 1996, between Berger
Associates, Inc. and Berger Institutional Products Trust with respect to Berger
IPT-Small Company Growth Fund;
14. Sub-Advisory Agreement, dated February 14, 1997, between Berger
Associates, Inc. and Perkins, Wolf, McDonnell & Company
15. Sub-Advisory Agreement, dated July 7, 1998, between Berger
Associates, Inc. and Perkins, Wolf, McDonnell & Company
16. Sub-Advisory Agreement, dated July 1, 1999, between Berger
Associates, Inc. and Bay Isle Financial Corporation
-7-
<PAGE>
EXHIBIT B
ASSIGNED ADMINISTRATIVE SERVICES AGREEMENTS
The following are the Assigned Administrative Services Agreements being
assigned by Associates and assumed by LLC pursuant to Article II of the
Agreement:
1. Administrative Services Agreement, dated October 1, 1992, between
Berger Associates, Inc. and The One Hundred Fund, Inc.;
2. Administrative Services Agreement, dated October 1, 1992, between
Berger Associates, Inc. and Berger One Hundred and One Fund, Inc.;
3. Administrative Services Agreement, dated December 22, 1993, between
Berger Associates, Inc. and Berger Investment Portfolio Trust with respect to
Berger Small Company Growth Fund;
4. Administrative Services Agreement, dated March 6, 1996, between
Berger Associates, Inc. and Berger Investment Portfolio Trust with respect to
Berger New Generation Fund;
5. Administrative Services Agreement, dated September 3, 1997, between
Berger Associates, Inc. and Berger Investment Portfolio Trust with respect to
Berger Balanced Fund;
6. Administrative Services Agreement, dated December 31, 1997, between
Berger Associates, Inc. and Berger Investment Portfolio Trust with respect to
Berger Select Fund;
7. Administrative Services Agreement, dated December 31, 1997, between
Berger Associates, Inc. and Berger Investment Portfolio Trust with respect to
Berger Mid Cap Growth Fund;
8. Administrative Services Agreement, dated July 7, 1998, between
Berger Associates, Inc. and Berger Investment Portfolio Trust with respect to
Berger Mid Cap Value Fund;
9. Administrative Services Agreement, dated July 1, 1999, between
Berger Associates, Inc. and Berger Investment Portfolio Trust with respect to
Berger Information Technology Fund;
10. Administrative Services Agreement, dated April 16, 1996, between
Berger Associates, Inc. and Berger Institutional Products Trust with respect to
Berger IPT-100 Fund;
11. Administrative Services Agreement, dated April 16, 1996, between
Berger Associates, Inc. and Berger Institutional Products Trust with respect to
Berger IPT-Growth and Income Fund;
12. Administrative Services Agreement, dated April 16, 1996, between
Berger Associates, Inc. and Berger Institutional Products Trust with respect to
Berger IPT-Small Company Growth Fund;
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<PAGE>
13. Administrative Services Agreement, dated February 14, 1997, between
Berger Associates, Inc. and Berger Omni Investment Trust with respect to its
series, the Berger Small Cap Value Fund;
14. Sub-Administration Agreement, dated October 11, 1996, between
Berger Associates, Inc. and BBOI Worldwide LLC with respect to the series of
Berger/BIAM Worldwide Funds Trust;
15. Sub-Administration Agreement, dated May 1, 1997, between Berger
Associates, Inc. and BBOI Worldwide LLC with respect to the Berger/BIAM
IPT-International Fund, a series of Berger Institutional Products Trust.
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<PAGE>
EXHIBIT C
ASSIGNED FEE WAIVER AGREEMENTS
The following are the Assigned Fee Waiver Agreements being assigned by
Associates and assumed by LLC pursuant to Article III of the Agreement:
1. Letter Agreement, dated April 15, 1999, from Berger Associates, Inc.
to Berger Institutional Products Trust with respect to the Berger IPT-100 Fund,
regarding advisory fee waiver and reimbursement of fund expenses;
2. Letter Agreement, dated April 15, 1999, from Berger Associates, Inc.
to Berger Institutional Products Trust with respect to the Berger IPT-Growth and
Income Fund, regarding advisory fee waiver and reimbursement of fund expenses;
3. Letter Agreement, dated April 15, 1999, from Berger Associates, Inc.
to Berger Institutional Products Trust with respect to the Berger IPT-Small
Company Growth Fund, regarding advisory fee waiver and reimbursement of fund
expenses;
4. Letter Agreement, dated February 18, 1999, from Berger Associates,
Inc. to Berger Investment Portfolio Trust with respect to the Berger Mid Cap
Growth Fund, regarding advisory fee waiver;
5. Letter Agreement, dated February 18, 1999, from Berger Associates,
Inc. to Berger Investment Portfolio Trust with respect to the Berger Balanced
Fund, regarding advisory fee waiver;
6. Letter Agreement, dated April 30, 1996, from Berger Associates, Inc.
to Berger Investment Portfolio Trust with respect to the Berger Small Company
Growth Fund, regarding advisory fee waiver;
7. Letter Agreement, dated March 6, 1996, from Berger Associates, Inc.
to Berger Investment Portfolio Trust with respect to the Berger New Generation
Fund, regarding advisory fee waiver;
8. Letter Agreement, dated April 30, 1996, from Berger Associates, Inc.
to The One Hundred Fund, Inc., regarding advisory fee waiver;
9. Letter Agreement, dated April 30, 1996 from Berger Associates, Inc.
to Berger One Hundred and One Fund, Inc., regarding advisory fee waiver; and
10. Letter Agreement, dated July 1, 1999 from Berger Associates, Inc.
to Berger Investment Portfolio Trust with respect to the Berger Information
Technology Fund, regarding advisory fee waiver and reimbursement of fund
expenses.
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<PAGE>
EXHIBIT D
ASSIGNED RULE 12B-1 PLANS
1. Rule 12b-1 Plan for The One Hundred Fund, Inc., dated October 14,
1994.
2. Rule 12b-1 Plan for Berger One Hundred and One Fund, Inc., dated
October 14, 1994.
3. Amended and Restated Rule 12b-1 Plan for the Investor Shares of the
Berger Small Company Growth Fund, dated July 6, 1999.
4. Amended and Restated Rule 12b-1 Plan for the Investor Shares of the
Berger New Generation Fund, dated July 6, 1999.
5. Rule 12b-1 Plan for Berger Balanced Fund, dated September 3, 1997.
6. Rule 12b-1 Plan for Berger Select Fund, dated December 31, 1997.
7. Rule 12b-1 Plan for Berger Mid Cap Growth Fund, dated December 31,
1997.
8. Rule 12b-1 Plan for Berger Mid Cap Value Fund, dated July 7, 1998.
9. Rule 12b-1 Plan for the Investor Shares of the Berger Small Cap
Value Fund, dated February 14, 1997.
10. Rule 12b-1 Plan for Berger/BIAM International Fund, dated
October 11, 1996.
11. Rule 12b-1 Plan for the Investor Shares of Berger Information
Technology Fund, dated July 1, 1999.
ASSIGNED RULE 18F-3 PLANS
1. Rule 18f-3 Plan for Multiple Classes of Shares of the Berger Small
Cap Value Fund, dated February 14, 1997.
2. Rule 18f-3 Plan for Multiple Classes of Shares of the Berger Small
Company Growth Fund, dated July 6, 1999.
3. Rule 18f-3 Plan for Multiple Classes of Shares of the Berger New
Generation Fund, dated July 6, 1999.
4. Rule 18f-3 Plan for Multiple Classes of Shares of the Berger
Information Technology Fund, dated July 1, 1999.
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<PAGE>
EXHIBIT E
ASSIGNED PARTICIPATION AGREEMENTS
1. Participation Agreement, dated April 15, 1996, between Great
American Reserve Insurance Company, Berger Institutional Products Trust and
Berger Associates, Inc.
2. Participation Agreement, dated December 10, 1996, between Ameritas
Life Insurance Corp., Berger Institutional Products Trust and Berger Associates,
Inc.
3. Participation Agreement, dated May 1, 1998, between Canada Life
Insurance Company of America, Berger Institutional Products Trust and Berger
Associates, Inc.
4. Participation Agreement, dated May 1, 1998, between Canada Life
Insurance Company of New York, Berger Institutional Products Trust and Berger
Associates, Inc.
5. Participation Agreement, dated March 4, 1997, between Prudential
Insurance Company of America, Berger Institutional Products Trust and Berger
Associates, Inc.
6. Participation Agreement, dated May 1, 1997, between Great-West Life
& Annuity Insurance Company, Berger Institutional Products Trust, Berger
Associates, Inc., Berger Distributors, Inc. and Charles Schwab & Co., Inc.
7. Participation Agreement, dated May 1, 1997, between First Great-West
Life & Annuity Insurance Company, Berger Institutional Products Trust, Berger
Associates, Inc., Berger Distributors, Inc. and Charles Schwab & Co., Inc.
<PAGE>
AMENDMENT NO. 1
TO
ADMINISTRATIVE SERVICES AGREEMENT
BERGER GROWTH AND INCOME FUND
This AMENDMENT NO. 1 TO ADMINISTRATIVE SERVICES AGREEMENT (the
"Amendment") is made effective as of the 1st day of October, 1999, between
BERGER LLC, a Nevada limited liability company, and BERGER ONE HUNDRED AND ONE
FUND, INC., a Maryland corporation (the "Fund"), doing business as BERGER GROWTH
AND INCOME FUND.
RECITALS
A. Berger Associates, Inc., and the Fund entered into that certain Amended
and Restated Administrative Services Agreement dated October 1, 1992 (the
"Agreement"), setting forth the terms and conditions under which the Fund has
appointed Berger Associates, Inc., to provide certain administrative services to
the Fund.
B. Effective September 30, 1999, Berger Associates, Inc., assigned and
transferred all its rights, interests, duties and obligations, including its
rights, interests, duties and obligations under the Agreement, to its
subsidiary, Berger LLC, in an assignment and transfer approved by the directors
of the Fund.
C. Berger LLC and the Fund desire to set forth in this Amendment their
mutual agreement that Berger LLC will continue to provide the services required
by the Agreement, but without compensation or payment therefor.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. ELIMINATION OF COMPENSATION. Section 2 of the Agreement is hereby
amended in its entirety to read as follows:
"2. For its services under this Agreement, Berger LLC shall
not be compensated or paid a fee."
2. NO OTHER CHANGES. No changes to the Agreement are intended by the
parties other than the changes reflected in Section 1 of this Amendment, and all
other provisions of the Agreement are hereby confirmed.
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<PAGE>
3. GOVERNING LAW. This Amendment shall be construed in accordance with
the laws of the State of Colorado (without giving effect to the conflicts of
laws principles thereof) and the Investment Company Act of 1940, as amended. To
the extent that the applicable laws of the State of Colorado conflict with the
applicable provisions of the Investment Company Act of 1940, as amended, the
latter shall control.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Amendment as of the date and year first above written.
BERGER LLC
By: /s/ Jack R. Thompson
---------------------
Jack R. Thompson
President
BERGER ONE HUNDRED AND ONE FUND, INC.
By: /s/ Jack R. Thompson
---------------------
Jack R. Thompson
President
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<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form N-1A of our report dated November 4, 1999, relating to the
financial statements and financial highlights which appear in the September 30,
1999 Annual Report to Shareholders of Berger Growth and Income Fund, Inc., which
is also incorporated by reference into the Registration Statement. We also
consent to the references to us under the headings "Financial Highlights for the
Berger Funds Family" and "Independent Accountants" in such Registration
Statement.
/s/ PricewaterhouseCoopers LLP
Denver, Colorado
January 27, 2000
