<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 30, 1999
1933 Act File No. 2-25384
1940 Act File No. 811-1382
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. 61
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
/X/ Amendment No.40
(Check appropriate box or boxes)
THE ONE HUNDRED 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>
BERGER FUNDS PROSPECTUS
[Cover design]
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 Like all mutual
this prospectus, or funds, an investment
determined whether in the Berger Funds --------------------------------------
this prospectus is is not a bank There is no have the potential
accurate or deposit and is not guarantee that the to make money, you
complete. Anyone insured or Funds will meet could also lose
who tells you guaranteed by the their investment money in the
otherwise is FDIC or any other goals, and although Funds.
committing a crime. government agency. you
- --------------------------------------------------------------------------------
Page 1
<PAGE>
[inside front cover]
THE BERGER FUNDS, BERGER NEW GENERATION FUND, BERGER SMALL COMPANY GROWTH FUND,
BERGER SMALL CAP VALUE FUND, BERGER GROWTH 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 and BERGER MID CAP VALUE FUND are
trademarks of Berger LLC; and other marks referred to herein are the trademarks
or registered trademarks of the respective owners thereof.
Page 2
<PAGE>
Contents
THE 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.
BERGER INFORMATION TECHNOLOGY FUND-TM- - INVESTOR SHARES PAGE
BERGER NEW GENERATION FUND-Registered Trademark- - INVESTOR SHARES PAGE
BERGER SELECT FUND-TM- PAGE
BERGER SMALL COMPANY GROWTH FUND-Registered Trademark- - INVESTOR SHARES PAGE
BERGER SMALL CAP VALUE FUND-Registered Trademark- - INVESTOR SHARES PAGE
BERGER MID CAP GROWTH FUND-TM- PAGE
BERGER MID CAP VALUE FUND-TM- PAGE
BERGER GROWTH FUND-Registered Trademark- PAGE
BERGER/BIAM INTERNATIONAL FUND-Registered Trademark- PAGE
BERGER GROWTH AND INCOME FUND-Registered Trademark- PAGE
BERGER BALANCED FUND-Registered Trademark- PAGE
INVESTMENT TECHNIQUES, SECURITIES AND ASSOCIATED RISKS
Risk and Investment Table PAGE
Risk and Investment Glossary PAGE
BUYING SHARES PAGE
SELLING (REDEEMING) SHARES PAGE
Exchanging Shares PAGE
Signature Guarantees/Special Documentation PAGE
Your Share Price PAGE
Other Information About Your Account PAGE
Distributions and Taxes PAGE
Tax-Sheltered Retirement Plans PAGE
ORGANIZATION OF THE BERGER FUNDS FAMILY
Investment Managers PAGE
12b-1 Arrangements PAGE
Special Fund Structures PAGE
FINANCIAL HIGHLIGHTS FOR THE BERGER FUNDS FAMILY
Berger Information Technology Fund PAGE
Berger New Generation Fund - Investor Shares PAGE
Berger Select Fund PAGE
Berger Small Company Growth Fund - Investor Shares PAGE
Berger Small Cap Value Fund - Investor Shares PAGE
Berger Mid Cap Growth Fund PAGE
Berger Mid Cap Value Fund PAGE
Berger Growth Fund PAGE
Berger/BIAM International Fund PAGE
Berger Growth and Income Fund PAGE
Berger Balanced Fund PAGE
Page 1
<PAGE>
BERGER INFORMATION TECHNOLOGY FUND
INVESTOR SHARES
Ticker Symbol: BINFX
[icon - profile of head with mountain peak in background]
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.
[icon - left facing profile of head with lightening bolt; right facing profile
of head with sunshine]
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.
Page 1
<PAGE>
[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 TOTAL RETURN AS OF DECEMBER 31(1)
[INSERT GRAPH]
Best quarter: ________ _____
Worst quarter: ________ _____
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 an 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.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
1 Year Life of the Fund
(April 8, 1997)
<S> <C> <C>
The Fund
Wilshire 5000
</TABLE>
1. Fund returns are from periods prior to the adoption of share classes in
connection with the Fund's reorganization on July 2, 1999, and therefore do
not include the 0.25% 12b-1 fee which has been paid by the Investor Shares
since the inception of the class on that date.
Page 2
<PAGE>
[icon - two coins]
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 1%
Redemption Fee (as a percentage of amount redeemed or exchanged None
if shares held less than 6 months)
Exchange Fee*
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(3)(4) 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 as if those fees had been in effect during the previous
fiscal year.
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 is restated as if the administrative fee change had been in effect
during the previous fiscal year.
3. 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, 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 may not be
terminated or amended except by a vote of the Fund's Board of Trustees.
4. Based on estimates for the first full year of operations of the class.
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 $203
Three $627
Five $1,078
Ten $2,327
</TABLE>
Page 3
<PAGE>
BERGER NEW GENERATION FUND
INVESTOR SHARES
Ticker Symbol: BENGX
[icon - profile of head with mountain peak in background]
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.
[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 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.
Page 4
<PAGE>
[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
[INSERT GRAPH]
Best quarter: ________ _____%
Worst quarter: ________ _____%
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>
1 Year Life of the Fund
(March 29, 1996)
<S> <C> <C>
The Fund
S&P 500
</TABLE>
Page 5
<PAGE>
[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>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)
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 as if those fees had been in effect during the previous
fiscal year.
2. Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown is restated as if the
administrative fee change had been in effect during the previous fiscal
year.
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
<PAGE>
BERGER SELECT FUND
Ticker Symbol: BESLX
[icon - profile of head with mountain peak in background] 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 four 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.
[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 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 resources,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.
Page 7
<PAGE>
[icon - profile of head with scrolled paper in background]
THE FUND'S PAST PERFORMANCE
The information below shows the Fund's performance return since it began
operations through December 31, 1999. This return includes the 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 TOTAL RETURN AS OF DECEMBER 31, 1999
[INSERT GRAPH]
Best quarter: _______ ______
Worst quarter: _______ ______
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 RETURN AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
1 Year Life of the Fund
(December 31, 1997)
<S> <C> <C>
The Fund
S&P 500
</TABLE>
[icon-two[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>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)
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 as if those fees had been in effect during the previous
fiscal year.
2. Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown is restated as if the
administrative fee change had been in effect during the previous fiscal
year.
Page 8
<PAGE>
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 1768
</TABLE>
Page 9
<PAGE>
BERGER SMALL COMPANY GROWTH FUND
INVESTOR SHARES
Ticker Symbol: BESCX
[icon - profile of head with mountain peak in background]
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.
[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 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. Occasionally, 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.
Page 10
<PAGE>
[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(1)
[INSERT GRAPH]
Best quarter: ________ _______
Worst quarter: _______ _______
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.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1999(1)
<TABLE>
<CAPTION>
1 Year 5 Years Life of the Fund
(December 30, 1993)
<S> <C> <C> <C>
The Fund
Russell 2000
</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>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)
Management fee(1) .84%
Distribution (12b-1) fee .25%
Other expenses(2) .44%
----
TOTAL ANNUAL FUND OPERATING EXPENSES(1) 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 as if those fees had been in effect during the previous
fiscal year.
2. Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown is restated as if the
administrative fee change had been in effect during the previous fiscal
year.
Page 11
<PAGE>
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 162
Three 502
Five 866
Ten 1,889
</TABLE>
Page 12
<PAGE>
BERGER SMALL CAP VALUE FUND
INVESTOR SHARES
Ticker Symbol: BSCVX
[icon - profile of head with mountain peak in background]
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.
[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 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. Occasionally, 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.
Page 13
<PAGE>
[icon - profile of head with scrolled paper in background]
THE FUND'S PAST PERFORMANCE
The information below shows the Fund's annual return 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)
[INSERT GRAPH]
Best quarter: _______ ______
Worst quarter: _______ ______%
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.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1999(1)
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
<S> <C> <C> <C>
The Fund
Russell 2000
</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.
[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>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)
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 as if those fees had been in effect during the previous
fiscal year.
2. Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown is restated as if the
administrative fee change had been in effect during the previous fiscal
year.
Page 14
<PAGE>
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 159
Three 493
Five 850
Ten 1,856
</TABLE>
Page 15
<PAGE>
BERGER MID CAP GROWTH FUND
Ticker Symbol: BEMGX
[icon - profile of head with mountain peak in background]
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.
[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 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.
Page 16
<PAGE>
[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. This return includes the 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 TOTAL RETURN AS OF DECEMBER 31
[insert graph]
Best quarter: ________ _____
Worst quarter: _______ ______%
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.
AVERAGE ANNUAL RETURN AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
1 Year Life of the Fund
(December 31, 1997)
<S> <C> <C>
The Fund
S&P 400
</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>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)
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 as if those fees had been in effect during the previous
fiscal year.
2. Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown is restated as if the
administrative fee change had been in effect during the previous fiscal
year.
Page 17
<PAGE>
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 203
Three 627
Five 1,078
Ten 2,327
</TABLE>
Page 18
<PAGE>
BERGER MID CAP VALUE FUND
Ticker Symbol: BEMVX
[icon - profile of head with mountain peak in background]
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.
[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 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. 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.
Page 19
<PAGE>
[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. This return includes the reinvestment of all
dividends and capital gains distributions and reflects Fund expenses. As with
all mutual funds, past performance does not guarantee future results.
TOTAL RETURN FROM DECEMBER 31, 1998 THROUGH DECEMBER 31, 1999
[insert graph]
Best quarter: ________ _____
Worst quarter: _______ ______%
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.
AVERAGE ANNUAL RETURN AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
1 Year Life of the Fund
(August 12, 1998)
<S> <C> <C>
The Fund
S&P 400
</TABLE>
Page 20
<PAGE>
[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>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)
Management fee(1) .75%
Distribution (12b-1) fee .25%
Other expenses(2) .61%
----
TOTAL ANNUAL FUND OPERATING EXPENSES(1) 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 as if those fees had been in effect during the previous
fiscal year.
2. Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown is restated as if the
administrative fee change had been in effect during the previous fiscal
year.
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 21
<PAGE>
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 strong earnings growth.
Stock selection by the Fund's co-portfolio managers focuses on companies
believed to have good earnings growth potential regardless of the company's
size.
The Fund's investment manager generally looks for companies with:
- - Potential for strong revenue and earnings growth and a large market for
their products and services
- - Reasonably priced securities with strong, consistent and predictable
earnings growth rates
- - Strong, capable management teams with clearly defined strategies.
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.
Page 22
<PAGE>
[icon - profile of head with scrolled paper in background]
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 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.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
[INSERT GRAPH]
Best quarter: _______ ______
Worst quarter: _______ _______
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>
1 Year 5 Years 10 Years Life of the Fund
(September 30, 1974)
<S> <C> <C> <C> <C>
The Fund
S&P 500
</TABLE>
Page 23
<PAGE>
[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>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)
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 as if those fees had been in effect during the previous
fiscal year.
2. Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown is restated as if the
administrative fee change had been in effect during the previous fiscal
year.
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 24
<PAGE>
BERGER/BIAM INTERNATIONAL FUND
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.
Page 25
<PAGE>
[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 since the Fund
began.(1)
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31(1)
[INSERT GRAPH]
Best quarter: ________ _____%
Worst quarter: ________ _____%
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.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1999(1)
<TABLE>
<CAPTION>
1 Year 5 Years Life of the Fund
(July 31, 1989)
<S> <C> <C> <C>
The Fund
EAFE Index
</TABLE>
1. 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.
Page 26
<PAGE>
[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>
<S> <C>
ANNUAL FUND OPERATING EXPENSES(1)
(deducted directly from the Fund)
Management fee .90 %
Distribution (12b-1) fee .25 %
Other expenses .68 %
-----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.83 %
FEE WAIVER(2) (.03)%
------
NET EXPENSES 1.80 %
</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 183
Three 566
Five 975
Ten 2,116
</TABLE>
Page 27
<PAGE>
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 earnings
growth and stability and are also expected to provide current income.
The Fund's investment manager generally looks for companies with:
- - The opportunity for good revenue and earnings growth
- - Large market potential for their products and services
- - Strong, capable management teams with 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 rates 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.
Page 28
<PAGE>
[icon - profile of head with scrolled paper in background]
THE FUND'S PAST PERFORMANCE
The information below shows the Fund's annual return for the ten-year period
sdthrough 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
[INSERT GRAPH]
Best quarter: _______ ______
Worst quarter: _______ _______
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>
1 Year 5 Years 10 Years Life of the Fund
(September 30, 1974)
<S> <C> <C> <C> <C>
The Fund
S&P 500
</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>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)
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 as if those fees had been in effect during the previous
fiscal year.
2. Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown is restated as if the
administrative fee change had been in effect during the previous fiscal
year.
Page 29
<PAGE>
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 147
Three 456
Five 787
Ten 1,724
</TABLE>
Page 30
<PAGE>
BERGER BALANCED FUND
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.
Page 31
<PAGE>
[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.
Total return shows you the Fund's performance for the one full calendar year
since it began.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
[insert graph]
Best quarter: ________ _____%
Worst quarter: ________ _____
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>
1 Year Life of the Fund
(September 30, 1997)
<S> <C> <C>
The Fund
S&P 500
</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>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)
Management fee(1) .70 %
Distribution (12b-1) fee .25 %
Other expenses(2) .22 %
-----
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 as if those fees had
been in effect during the previous fiscal year.
2. Effective October 1, 1999, Berger LLC eliminated the administrative fee
charged to the Fund. The fee amount shown is restated as if the
administrative fee change had been in effect during the previous fiscal
year.
Page 32
<PAGE>
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 153
Three 474
Five 818
Ten 1,791
</TABLE>
Page 33
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT TECHNIQUES, SECURITIES AND ASSOCIATED RISKS
- ------------------------------------------------------------------------------------------------------------------------------------
RISK AND INVESTMENT TABLE BERGER BERGER BERGER BERGER BERGER
INFORMATION NEW SELECT FUND SMALL SMALL CAP
TECHNOLOGY GENERATION COMPANY VALUE FUND
FUND FUND GROWTH FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DIVERSIFICATION u u Nu u u
- ------------------------------------------------------------------------------------------------------------------------------------
SMALL AND MID-SIZED COMPANY SECURITIES Y [Y] Y [Y] [Y]
MARKET, LIQUIDITY AND INFORMATION RISK
- ------------------------------------------------------------------------------------------------------------------------------------
FOREIGN SECURITIES Y Y Y Y Y
MARKET, CURRENCY, TRANSACTION, LIQUIDITY, INFORMATION
AND POLITICAL RISK
- ------------------------------------------------------------------------------------------------------------------------------------
SECTOR FOCUS [Y] [Y] [Y] [Y] [Y]
MARKET AND LIQUIDITY RISK
- ------------------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE SECURITIES(1) Y Y Y Y Y
MARKET, INTEREST RATE , PREPAYMENT AND CREDIT RISK
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE BONDS (NONCONVERTIBLE) Y Y Y Y Y
INTEREST RATE, PREPAYMENT, MARKET AND CREDIT RISK
- ------------------------------------------------------------------------------------------------------------------------------------
COMPANIES WITH LIMITED OPERATING HISTORIES Y Y Y Y 5A u
MARKET, LIQUIDITY AND INFORMATION RISK
- ------------------------------------------------------------------------------------------------------------------------------------
ILLIQUID AND RESTRICTED SECURITIES(2) 15 15 15 15 10 u
MARKET, LIQUIDITY AND TRANSACTION RISK
- ------------------------------------------------------------------------------------------------------------------------------------
SPECIAL SITUATIONS Y Y Y Y [Y]
MARKET AND INFORMATION RISK
- ------------------------------------------------------------------------------------------------------------------------------------
INITIAL PUBLIC OFFERINGS (IPOS) Y Y(3) Y(3) Y Y
MARKET, LIQUIDITY AND INFORMATION RISK
- ------------------------------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES(4) N N N N N
INTEREST RATE, PREPAYMENT, EXTENSION, MARKET AND
CREDIT RISK
- ------------------------------------------------------------------------------------------------------------------------------------
TEMPORARY DEFENSIVE MEASURES N Y Y Y Y
OPPORTUNITY RISK
- ------------------------------------------------------------------------------------------------------------------------------------
LENDING PORTFOLIO SECURITIES 331/3A 33 1/3A 33 1/3A 33 1/3A Nu
CREDIT RISK
- ------------------------------------------------------------------------------------------------------------------------------------
BORROWING 25Au 25Au 25Au 25Au 5Au
LEVERAGE RISK
- ------------------------------------------------------------------------------------------------------------------------------------
HEDGING STRATEGIES
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL FUTURES(5) 5 5 5 5 Nu
HEDGING, CORRELATION, OPPORTUNITY AND LEVERAGE RISK
- ------------------------------------------------------------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS(5)HEDGING, CREDIT,
CORRELATION, OPPORTUNITY AND LEVERAGE RISK Y Y Y Y Nu
- ------------------------------------------------------------------------------------------------------------------------------------
OPTIONS(5) 5 5 5 5 5
(EXCHANGE-TRADED AND OVER-THE-COUNTER)
HEDGING, CREDIT, CORRELATION AND LEVERAGE RISK
- ------------------------------------------------------------------------------------------------------------------------------------
WRITING (SELLING) COVERED CALL OPTIONS(5) 25A 25A 25A 25A 10
(EXCHANGE-TRADED AND OVER-THE-COUNTER)
OPPORTUNITY, CREDIT AND LEVERAGE RISK
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT TECHNIQUES, SECURITIES AND ASSOCIATED RISKS
- ------------------------------------------------------------------------------------------------------------------------------------
RISK AND INVESTMENT TABLE BERGER MID BERGER MID BERGER BERGER/BIAM BERGER BERGER
CAP GROWTH CAP VALUE GROWTH FUND INTERNATIONAL GROWTH AND BALANCED
FUND FUND FUND INCOME FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
DIVERSIFICATION u u u u u u
- ------------------------------------------------------------------------------------------------------------------------------------
SMALL AND MID-SIZED COMPANY SECURITIES [Y] [Y] Y Y Y Y
MARKET, LIQUIDITY AND INFORMATION RISK
- ------------------------------------------------------------------------------------------------------------------------------------
FOREIGN SECURITIES Y Y Y [Y] Y Y
MARKET, CURRENCY, TRANSACTION, LIQUIDITY, INFORMATION
AND POLITICAL RISK
- ------------------------------------------------------------------------------------------------------------------------------------
SECTOR FOCUS [Y] [Y] [Y] [Y] Y Y
MARKET AND LIQUIDITY RISK
- ------------------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE SECURITIES(1) Y Y Y Y [Y] [Y]
MARKET, INTEREST RATE , PREPAYMENT AND CREDIT RISK
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE BONDS (NONCONVERTIBLE) Y Y Y Y Y [Y]
INTEREST RATE, PREPAYMENT, MARKET AND CREDIT RISK
- ------------------------------------------------------------------------------------------------------------------------------------
COMPANIES WITH LIMITED OPERATING HISTORIES Y Y 5A u Y 5 Au Y
MARKET, LIQUIDITY AND INFORMATION RISK
- ------------------------------------------------------------------------------------------------------------------------------------
ILLIQUID AND RESTRICTED SECURITIES(2) 15 15 15 15 15 15
MARKET, LIQUIDITY AND TRANSACTION RISK
- ------------------------------------------------------------------------------------------------------------------------------------
SPECIAL SITUATIONS Y [Y] Y Y Y Y
MARKET AND INFORMATION RISK
- ------------------------------------------------------------------------------------------------------------------------------------
INITIAL PUBLIC OFFERINGS (IPOS) Y(3) Y Y Y Y Y(3)
MARKET, LIQUIDITY AND INFORMATION RISK
- ------------------------------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES(4) N N N N N [Y]
INTEREST RATE, PREPAYMENT, EXTENSION, MARKET AND
CREDIT RISK
- ------------------------------------------------------------------------------------------------------------------------------------
TEMPORARY DEFENSIVE MEASURES Y Y Y N Y Y
OPPORTUNITY RISK
- ------------------------------------------------------------------------------------------------------------------------------------
LENDING PORTFOLIO SECURITIES 33 1/3A 33 1/3A Nu 33 1/3A Nu 33 1/3
CREDIT RISK
- ------------------------------------------------------------------------------------------------------------------------------------
BORROWING 25Au 25Au 5Au 25Au 5Au 25Au
LEVERAGE RISK
- ------------------------------------------------------------------------------------------------------------------------------------
HEDGING STRATEGIES
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL FUTURES(5) 5 5 5 N 5 5
HEDGING, CORRELATION, OPPORTUNITY AND LEVERAGE RISK
- ------------------------------------------------------------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS(5)HEDGING, CREDIT,
CORRELATION, OPPORTUNITY AND LEVERAGE RISK Y Y Y [Y] Y Y
- ------------------------------------------------------------------------------------------------------------------------------------
OPTIONS(5) 5 5 5 N 5 5
(EXCHANGE-TRADED AND OVER-THE-COUNTER)
HEDGING, CREDIT, CORRELATION AND LEVERAGE RISK
- ------------------------------------------------------------------------------------------------------------------------------------
WRITING (SELLING) COVERED CALL OPTIONS(5) 25A 25A 25A N 25A 25A
(EXCHANGE-TRADED AND OVER-THE-COUNTER)
OPPORTUNITY, CREDIT AND LEVERAGE RISK
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 34
<PAGE>
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.
u 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 33 1/3% 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 of 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 35
<PAGE>
- --------------------------------------------------------------------------------
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.
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 Afloat" in value against the U.S. dollar.
Adverse changes in foreign currency value 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.
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.
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 include illiquid 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 36
<PAGE>
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 for 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 mortgages or other debts. As a result, the principal
on mortgage-backed, asset-backed or certain other 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 "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 37
<PAGE>
BUYING SHARES
[SIDEBAR BOX]
SEND NEW ACCOUNT APPLICATIONS TO
Berger Funds
P.O. Box 219958
Kansas City, MO 64121-9958
OR FOR OVERNIGHT, CERTIFIED OR REGISTERED MAIL ONLY
Berger Funds
330 West 9th Street, 1st Floor
Kansas City, MO 64105
<TABLE>
<S> <C>
[SIDEBAR TABLE]
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>
BY MAIL
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 a 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
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.
Page 38
<PAGE>
BY ONLINE ACCESS
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
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 a $10 charge each
December.
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 ten times the value of
an account 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, reduce or
increase minimums following notice.
Page 39
<PAGE>
SELLING (REDEEMING) SHARES
BY MAIL
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
Call (800) 551-5849.
BY ONLINE ACCESS
You will find us online at bergerfunds.com.
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.
BY SYSTEMATIC WITHDRAWAL PLAN
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.
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.
Page 40
<PAGE>
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.
INFORMATION ABOUT YOUR ACCOUNT
EXCHANGING SHARES
Shares of the Funds described in this prospectus may be exchanged 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.
Page 41
<PAGE>
- - 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 GUARANTEES / SPECIAL DOCUMENTATION
The Funds use Signature Guarantees to protect you and the Funds from possible
fraudulent requests for redeemed shares. Your redemption request must be in
writing and accompanied by a 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.
The 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 42
<PAGE>
YOUR SHARE PRICE
The price at which you buy, sell or exchange Fund shares is the share price or
net asset value (NAV). The share price for each 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 INFORMATION ABOUT YOUR ACCOUNT
SECURITY CONSIDERATIONS
You may give up some level of security by choosing to buy or sell shares by
telephone or online, rather than by mail. The Funds use 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 Automatic Investment Plans or redeemed under Systematic
Withdrawal Plans will be confirmed quarterly. Partial shares will be calculated
to three decimal places.
Page 43
<PAGE>
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.
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 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.
YEAR 2000 AND EURO READINESS
Mutual funds and businesses around the world could be adversely affected if
computers do not properly process date-related information with respect to the
Year 2000. 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 the Year 2000 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.
Page 44
<PAGE>
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>
- --------------------------------------------------------------------------------
FUND IF YOUR SHARES WERE YOUR MINIMUM ACCOUNT
PURCHASED BEFORE... BALANCE IS
- --------------------------------------------------------------------------------
<S> <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 AND TAXES
DISTRIBUTIONS OF INCOME AND GAINS
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.
- - Net investment income from interest or dividends received on securities
held by a fund. The Funds will distribute their investment income as
follows:
FUND DISTRIBUTIONS OF NET INVESTMENT INCOME
Berger Growth and Income Fund Quarterly
(normally in March, June, September and December)
Berger Balanced Fund Quarterly
(normally in March, June, September and December)
Page 45
<PAGE>
All other Berger Funds Annually
(normally in December)
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 RETIREMENT PLANS
The Funds offer several tax-qualified retirement plans for individuals,
businesses and nonprofit organizations. For 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 46
<PAGE>
ORGANIZATION OF THE BERGER FUNDS FAMILY
INVESTMENT MANAGERS
The following companies provide day-to-day investment management and
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.
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.
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 manages the investments in the Berger/BIAM International
Portfolio.
PERKINS, WOLF, MCDONNELL & COMPANY (PWM) (53 West Jackson Boulevard, Suite 818,
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 manages the Fund's
investment operations.
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(7) 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.
<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
TECHNOLOGY FUND Berger LLC Investment Officer 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 FUND 0.90% paid to MARK S. SUNDERHUSE, Senior Vice President of Berger
Berger LLC LLC, is the 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 ten years
of experience in the investment management industry.
Page 47
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
FUND ADVISORY FEE THE FUND'S INVESTMENT MANAGER
PAID BY FUND
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------
BERGER SELECT FUND 0.75% paid to AMY K. SELNER (see Berger Small Company Growth Fund),
Berger LLC TINO R. SELLITTO (see Berger Growth and Income Fund),
JOHN B. JARES (see Berger Balanced Fund) and MARK S.
SUNDERHUSE (see Berger New Generation Fund) assumed
co-management of the Berger Select Fund in May 1999.
- --------------------------------------------------------------------------------------------------------------
BERGER SMALL 0.90% paid to AMY K. SELNER, Vice President of Berger LLC, is the
COMPANY GROWTH Berger LLC investment manager of the Berger Small Company Growth
FUND 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
seven years of experience in the investment industry.
- --------------------------------------------------------------------------------------------------------------
BERGER SMALL CAP VALUE FUND 0.90% paid to ROBERT H. PERKINS has been the investment manager
Berger LLC for the Berger Small 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 FUND 0.75% paid to AMY K. SELNER assumed management of the Fund at its
Berger LLC(1) inception in December 1997.
- --------------------------------------------------------------------------------------------------------------
BERGER MID CAP VALUE FUND 0.75% paid to THOMAS M. PERKINS AND ROBERT H. PERKINS have served as
Berger LLC co-investment managers of the Berger Mid Cap Value Fund
since its inception in August 1998.
- --------------------------------------------------------------------------------------------------------------
BERGER GROWTH FUND 0.75% paid to TINO R. SELLITTO (see Berger Growth and Income Fund)
Berger LLC and JOHN B. JARES (see Berger Balanced Fund) assumed
co-management of the Berger Growth Fund in May 1999.
- --------------------------------------------------------------------------------------------------------------
BERGER/BIAM INTERNATIONAL 0.90% paid to BIAM, using a team approach, has been the
FUND BBOI Worldwide(1) investment manager for the Portfolio, in which the
Fund is invested, since its inception in 1996.
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 INCOME 0.75% paid to TINO R. SELLITTO, Vice President of Berger, is the
FUND Berger LLC investment manager of the Berger Growth and Income
Fund. Mr. Sellitto joined Berger as a senior equity
analyst in January 1998 and assumed management of the
Fund in November 1998. Mr. Sellitto has four years of
experience in the investment industry. Prior to that
Mr. Sellitto served as an account executive with an
equipment distributor.
Page 48
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
FUND ADVISORY FEE THE FUND'S INVESTMENT MANAGER
PAID BY FUND
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BERGER BALANCED FUND 0.70% paid to JOHN B. JARES, Vice President of Berger LLC, is
Berger LLC(1) the investment manager of the Berger Balanced
Fund. Mr. Jares joined Berger LLC in May 1997. He
assumed co-management of the Fund at its inception
in September 1997 and sole management of the Fund
in May 1999. Mr. Jares has five years of
experience in the investment management industry.
- --------------------------------------------------------------------------------------------------------------
</TABLE>
1. After waivers, advisory fees paid were: Berger Mid Cap Growth Fund: .29%;
Berger/BIAM International Fund: .87%; and Berger Balanced Fund: .63% for
the fiscal year ended September 30, 1998.
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 ARRANGEMENTS
The Funds are "no-load" funds, meaning that you pay no sales 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 STRUCTURES
MULTI-CLASS
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.
Page 49
<PAGE>
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 50
<PAGE>
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 reports are
included in the Funds' annual report, which is available without charge upon
request.
BERGER INFORMATION TECHNOLOGY FUND
For a Share Outstanding Throughout the Periods Presented
The following financial highlights are for the Fund for periods ending February
28, 1998 and 1999, prior to the Fund's reorganization on July 2, 1999. Prior to
the reorganization, 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. 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.
[INSERT TABLE]
For the period April 8, 1997 (commencement of operations) to February 28, 1998.
1. Annualized.
2. Not annualized.
Page 51
<PAGE>
BERGER NEW GENERATION FUND - INVESTOR SHARES
For a Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
Years Ended September 30,
1998 1997 1996(1)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $14.72 $11.82 $10.00
- ------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) -- (0.13) 0.56
- ------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions (2.06) 3.64 1.26
- ------------------------------------------------------------------------------------------------
Total from investment operations (2.06) 3.51 1.82
- ------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) -- (0.61) --
- ------------------------------------------------------------------------------------------------
Distributions (from capital gains) -- 0.00 --
- ------------------------------------------------------------------------------------------------
Total dividends and distributions -- (0.61) --
- ------------------------------------------------------------------------------------------------
Net asset value, end of period $12.66 $14.72 $11.82
- ------------------------------------------------------------------------------------------------
Total Return(2) (13.99)% 31.53% 18.20%
- ------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $113,693 $190,164 $116,912
- ------------------------------------------------------------------------------------------------
Net expense ratio to average net assets(3) 1.72% 1.89% 1.90%(4)
- ------------------------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets (1.37)% (1.51)% 12.35%(4)
- ------------------------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.72% 1.89% 2.09%(4)
- ------------------------------------------------------------------------------------------------
Portfolio turnover rate 243% 184% 474%(5)
- ------------------------------------------------------------------------------------------------
</TABLE>
1. Period from March 29, 1996 (commencement of investment operations) to
September 30, 1996.
2. Total return not annualized for periods of less than one full year.
3. Net expenses represent gross expenses reduced by fees waived by the
Advisor.
4. Annualized.
5. Portfolio turnover was greater than anticipated during this period as a
result of portfolio transactions undertaken in response to volatile markets
and the short tax year for its initial period of operations.
Page 52
<PAGE>
BERGER SELECT FUND
For a Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
PERIOD FROM DECEMBER 31, 1997(1)
TO SEPTEMBER 30, 1998
- -----------------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period $10.00
- -----------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.07
- -----------------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions 3.19
- -----------------------------------------------------------------------------------------
Total from investment operations 3.26
- -----------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) --
- -----------------------------------------------------------------------------------------
Distributions (from capital gains) --
- -----------------------------------------------------------------------------------------
Total dividends and distributions --
- -----------------------------------------------------------------------------------------
Net asset value, end of period $13.26
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Total Return(2) 32.60%
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $41,571
- -----------------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets 1.13%(3)
- -----------------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.48%(3)
- -----------------------------------------------------------------------------------------
Portfolio turnover rate 1486%(4)
- -----------------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
2. Total return not annualized for periods of less than one full year.
3. Annualized.
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.
Page 53
<PAGE>
BERGER SMALL COMPANY GROWTH FUND - INVESTOR SHARES
For a Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
Year Ended September 30,
1998 1997 1996 1995 1994(1)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $5.33 $4.74 $3.61 $2.74 $2.50
- -------------------------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) -- (0.05) (0.03) (0.02) --
- -------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains
(losses) on investments and foreign
currency transactions (1.24) 0.84 1.16 0.89 0.24
- -------------------------------------------------------------------------------------------------------------------
Total from investment operations (1.24) 0.79 1.13 0.87 0.24
- -------------------------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) -- -- -- --(2) --
- -------------------------------------------------------------------------------------------------------------------
Distributions (from capital gains) (0.48) (0.20) -- -- --
- -------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (0.48) (0.20) -- -- --
- -------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.61 $5.33 $4.74 $3.61 $2.74
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Total Return(3) (24.70)% 17.68% 31.30% 31.90% 9.60%
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $561,741 $902,685 $871,467 $522,667 $211,852
- -------------------------------------------------------------------------------------------------------------------
Net expense ratio to average net assets(4) 1.48% 1.67% 1.68% 1.89% 2.10%(5)
- -------------------------------------------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets (1.01)% (1.09)% (0.97)% (0.74)% 0.32%(5)
- -------------------------------------------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.59% 1.67% 1.68% 1.89% 2.10%(5)
- -------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 97% 111% 91% 109% 108%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Period from December 30, 1993 (commencement of investment operations) to
September 30, 1994. Other independent accountants audited this information.
2. Dividends from net investment income were less than $0.01 per share.
3. Total return not annualized for periods of less than one full year.
4. Net expenses represent gross expenses reduced by fees waived by the
Advisor.
5. Annualized.
Page 54
<PAGE>
BERGER SMALL CAP VALUE FUND - INVESTOR SHARES
For a Share Outstanding Throughout the Periods Presented
For a Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
Period From
YEAR ENDED February 14, 1997 (1)
SEPTEMBER 30, 1998 To September 30, 1997
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of
period $22.28 $17.24
- ----------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.42 0.03
- ----------------------------------------------------------------------------------------
Net realized and unrealized
gains (losses) on investments
and foreign currency
transactions (2.58) 5.01
- ----------------------------------------------------------------------------------------
Total from investment operations (2.16) 5.04
- ----------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment
income) (0.17) --
- ----------------------------------------------------------------------------------------
Distributions (from capital
gains) (2.37) --
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Total dividends and distributions (2.54) --
- ----------------------------------------------------------------------------------------
Net asset value, end of period $17.58 $22.28
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Total Return(2) (10.98)% 29.23%
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in
thousands) $108,465 $55,211
- ----------------------------------------------------------------------------------------
Ratio of net income (loss) to
average net assets 0.87% 0.60%(3)
- ----------------------------------------------------------------------------------------
Gross expense ratio to average
net assets 1.56% 1.66%(3)
- ----------------------------------------------------------------------------------------
Portfolio turnover rate 69% 81%
- ----------------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations for Investor Shares class.
2. Total return not annualized for periods of less than one full year.
3. Annualized.
Page 55
<PAGE>
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 Periods Presented
<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 56
<PAGE>
BERGER MID CAP GROWTH FUND
For a Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
PERIOD FROM DECEMBER 31,1997(1)
TO SEPTEMBER 30, 1998
- ----------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.00
- ----------------------------------------------------------------------------------
From investment operations
Net investment income (loss) --
- ----------------------------------------------------------------------------------
Net realized and unrealized gains
(losses) on investments and foreign
currency transactions 0.93
- ----------------------------------------------------------------------------------
Total from investment operations 0.93
- ----------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) --
- ----------------------------------------------------------------------------------
Distributions (from capital gains) --
- ----------------------------------------------------------------------------------
Total dividends and distributions --
- ----------------------------------------------------------------------------------
Net asset value, end of period $10.93
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Total Return(2) 9.30%
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $4,283
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Net expense ratio to average net assets(3) 2.00%(4)
- ----------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets (0.82)%(4)
- ----------------------------------------------------------------------------------
Gross expense ratio to average net assets 2.46(4)
- ----------------------------------------------------------------------------------
Portfolio turnover rate 262%
- ----------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
2. Total return not annualized for periods of less than one full year.
3. Net expenses represent gross expenses reduced by fees waived by the
Advisor.
4. Annualized.
Page 57
<PAGE>
BERGER MID CAP VALUE FUND
For a Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
FOR THE PERIOD FROM AUGUST 12, 1998(1)
TO SEPTEMBER 30, 1998
- ----------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.00
- ----------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.03
- ----------------------------------------------------------------------------------
Net realized and unrealized gains
(losses) on investments and foreign
currency transactions
(0.70)
- ----------------------------------------------------------------------------------
Total from investment operations (0.67)
- ----------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) --
- ----------------------------------------------------------------------------------
Distributions (from capital gains) --
- ----------------------------------------------------------------------------------
Total dividends and distributions --
- ----------------------------------------------------------------------------------
Net asset value, end of period $9.33
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Total Return(2) (6.70)%
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ----------------------------------------------------------------------------------
Net assets, end of period (in thousands) $19,710
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets 2.30%(3)
- ----------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.68%(3)
- ----------------------------------------------------------------------------------
Portfolio turnover rate 25%
- ----------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
2. Total return not annualized for periods of less than one full year.
3. Annualized.
Page 58
<PAGE>
BERGER GROWTH FUND
For a Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
Years Ended September 30,
- ----------------------------------------------------------------------
1998 1997(1) 1996(1) 1995(1) 1994(1),(2)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $21.51 $19.64 $18.89 $15.96 $16.54
- ----------------------------------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) -- (0.09) (0.08) (0.04) (0.12)
- ----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions (2.57) 4.73 1.76 2.97 (0.46)
- ----------------------------------------------------------------------------------------------------------------------------
Total from investment operations (2.57) 4.64 1.68 2.93 (0.58)
- ----------------------------------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Distributions (from capital gains) (6.95) (2.77) (0.93) -- --
- ----------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (6.95) (2.77) (0.93) -- --
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.99 $21.51 $19.64 $18.89 $15.96
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Total Return (16.08)% 26.50% 9.36% 18.36% (3.51)%
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,286,828 $1,889,048 $2,012,706 $2,205,678 $2,228,743
- ----------------------------------------------------------------------------------------------------------------------------
Net expense ratio to average net assets(3) 1.38% 1.41% 1.42% 1.49% 1.70%
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets (0.38)% (0.40)% (0.43)% (0.28)% (0.74)%
- ----------------------------------------------------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.38% 1.41% 1.42% 1.49% 1.95%
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 280% 200% 122% 114% 64%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Per share calculations for the period were based on average shares
outstanding.
2. Other independent accountants audited this information.
3. Net expenses represent gross expenses reduced by fees waived by the
Advisor.
Page 59
<PAGE>
BERGER/BIAM INTERNATIONAL FUND
For a Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
YEAR ENDED PERIOD FROM NOVEMBER 7, 1996(1)
SEPTEMBER 30, 1998 TO SEPTEMBER 30, 1997
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 11.46 $ 10.00
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.50(7) 0.05
- ----------------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions (1.46)(7) 1.41
- ----------------------------------------------------------------------------------------------------------
Total from investment operations (0.96) 1.46
- ----------------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) (0.06) --
- ----------------------------------------------------------------------------------------------------------
Distributions (in excess of capital gains) (0.38) --
- ----------------------------------------------------------------------------------------------------------
Total dividends and distributions (0.44) --
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.06 $ 11.46
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Total Return(2) (8.46)% 14.60%
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ----------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $16,515 $18,673
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Net expense ratio to average net assets(3)(4) 1.80% 1.90%(5)
- ----------------------------------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets 2.20% 0.61%(5)
- ----------------------------------------------------------------------------------------------------------
Gross expense ratio to average net assets(4) 1.83% 1.99%(5)
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate (6) 17% 17%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
2. Total return not annualized for periods of less than one full year.
3. Net expenses represent gross expenses reduced by fees waived by the
Advisor.
4. Reflects the Fund's expenses plus the Fund's pro rata share of the
Portfolio's expenses.
5. Annualized.
6. Represents the portfolio turnover rate of the Portfolio. All of the
investable assets of the Fund are invested in the Portfolio.
7. Restated.
Page 60
<PAGE>
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 Periods Presented
<TABLE>
<CAPTION>
PERIOD FROM YEAR ENDED DECEMBER 31, PERIOD FROM
JANUARY 1, ----------------------- JULY 31,
1996 TO 1989(1) TO
OCTOBER 11, 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 61
<PAGE>
BERGER GROWTH AND INCOME FUND
For a Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
Years Ended September 30,
-------------------------------------------------------------
1998 1997 1996 1995 1994(1)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $16.72 $14.06 $12.89 $11.48 $11.27
- ---------------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.04 0.14 0.20 0.16 0.12
- ---------------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign
currency transactions (0.30) 4.28 1.17 1.43 0.21
- ---------------------------------------------------------------------------------------------------------
Total from investment operations (0.26) 4.42 1.37 1.59 0.33
- ---------------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment
income) (0.03) (0.13) (0.20) (0.18) (0.12)
- ---------------------------------------------------------------------------------------------------------
Dividends (in excess of net
investment income) (0.01) -- -- -- --
- ---------------------------------------------------------------------------------------------------------
Distributions (from capital gains) (2.82) (1.63) -- -- --
- ---------------------------------------------------------------------------------------------------------
Total dividends and distributions (2.86) (1.76) (0.20) (0.18) (0.12)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.60 $16.72 $14.06 $12.89 $11.48
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Total Return (1.60)% 34.56% 10.66% 14.05% 2.91%
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ---------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $301,330 $357,023 $315,538 $354,396 $391,570
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Net expense ratio to average
net assets(2) 1.44% 1.51% 1.56% 1.64% 1.81%
- ---------------------------------------------------------------------------------------------------------
Ratio of net income (loss) to
average net Assets 0.25% 0.87% 1.39% 1.33% 1.19%
- ---------------------------------------------------------------------------------------------------------
Gross expense ratio to
average net assets 1.44% 1.51% 1.56% 1.64% 2.06%
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 417%(3) 173% 112% 85% 23%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
1. Other independent accountants audited this information.
2. Net expenses represent gross expenses reduced by fees waived 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 that existed at that time.
Page 62
<PAGE>
BERGER BALANCED FUND
For a Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30, 1998(1)
- ----------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period $10.00
- ----------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.22
- ----------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions 5.17
- ----------------------------------------------------------------------------------
Total from investment operations 5.39
- ----------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) (0.21)
- ----------------------------------------------------------------------------------
Distributions (from capital gains) (1.90)
- ----------------------------------------------------------------------------------
Total dividends and distributions (2.11)
- ----------------------------------------------------------------------------------
Net asset value, end of period $13.28
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Total Return 56.77%
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $30,721
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Net expense ratio to average net assets(2) 1.50%
- ----------------------------------------------------------------------------------
Ratio of net income (loss) to average net assets 1.81%
- ----------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.57%
- ----------------------------------------------------------------------------------
Portfolio turnover rate 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 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 63
<PAGE>
[BACK COVER]
[LOGO]
BERGER-Registered Trademark-
FOR MORE INFORMATION
Additional information about the Funds' investments is available in the Funds'
semi-annual and annual reports to shareholders. The Funds' 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) 551-5849
bergerfunds.com
Text-only versions of Fund documents can be viewed online or downloaded from 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 (800) SEC-0330. Copies of documents may also be obtained by sending your
request and the appropriate fee to the SEC's Public Reference Section,
Washington, DC 20549-6009.
INVESTMENT COMPANY ACT FILE NUMBERS:
Berger Investment Portfolio Trust 811-8046
Berger Information Technology Fund - Investor Shares
Berger New Generation Fund - Investor Shares
Berger Select Fund
Berger Small Company Growth Fund - Investor Shares
Berger Mid Cap Growth Fund
Berger Mid Cap Value Fund
Berger Balanced Fund
Berger Omni Investment Trust 811-4273
Berger Small Cap Value Fund - Investor Shares
The One Hundred Fund, Inc. 811-1382
Berger Growth Fund
Berger/BIAM Worldwide Funds Trust 811-07669
Berger/BIAM International Fund
Berger One Hundred and One Fund, Inc. 811-1383
Berger Growth and Income Fund
Page 64
<PAGE>
COMPROS
Page 65
<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 _______________, 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:
Financial Statements will be updated by amendment.
Copies of any of these Annual or Semi-Annual Reports are available,
without charge, upon request, by calling 1-800-333-1001.
DATED ________
<PAGE>
TABLE OF CONTENTS
&
CROSS-REFERENCES TO PROSPECTUS
<TABLE>
<CAPTION>
CROSS-REFERENCES TO
PAGE RELATED DISCLOSURES
SECTION NO. IN PROSPECTUS
- --------------------------------------------------------------------------------
<S> <C> <C>
Introduction 1 Table of Contents
- --------------------------------------------------------------------------------
1. Portfolio Policies of the Funds 1 Berger Funds;
Investment Techniques,
Securities and the Associated
Risks
- --------------------------------------------------------------------------------
2. Investment Restrictions 15 Berger Funds;
Investment Techniques,
Securities and the Associated
Risks
- --------------------------------------------------------------------------------
3. Management of the Funds 22 Organization of the Berger
Funds Family
- --------------------------------------------------------------------------------
4. Investment Advisor 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 41 Organization of the Berger
Funds Family
- --------------------------------------------------------------------------------
7. How to Purchase and Redeem Shares 45 Buying Shares; Exchanging
in the Funds Shares
- --------------------------------------------------------------------------------
8. How the Net Asset Value is 45 Your Share Price
Determined
- --------------------------------------------------------------------------------
9. Income Dividends, Capital Gains 46 Distributions and Taxes
Distributions and Tax Treatment
- --------------------------------------------------------------------------------
10. Suspension of Redemption Rights 48 Other Information About Your
Account
- --------------------------------------------------------------------------------
11. Tax-Sheltered Retirement Plans 48 Tax-Sheltered Retirement Plans
- --------------------------------------------------------------------------------
12. Exchange Privilege and Systematic
Withdrawal Plan 52 Exchanging Shares
- --------------------------------------------------------------------------------
13. Performance Information 52 Financial Highlights for the
Berger Funds Family
- --------------------------------------------------------------------------------
14. Additional Information 55 Organization of the Berger
Funds Family; Special Fund
Structures
- --------------------------------------------------------------------------------
Financial Information 61 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.
-2-
<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.
-3-
<PAGE>
The price of a company's securities may be highly unstable at the time
of its IPO and for a period In addition,thereafter due to market psychology
prevailing at the time of price of a company's securities 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
-4-
<PAGE>
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.
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.
-5-
<PAGE>
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 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
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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 assets.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 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
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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 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.
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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.
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 the 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 would 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 would 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
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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 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
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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.
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
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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 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
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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 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
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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 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). Multiclasspass- 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 onmortgage-
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
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<PAGE>
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 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.
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<PAGE>
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.
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
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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 Section9--Income Dividends, Capital
Gains Distributions and Tax Treatment.
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1. 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
- --------------------------------------------------------------------------------
Berger Growth and Income Fund primary investment objective: capital
appreciation 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 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.
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<PAGE>
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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<PAGE>
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.
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<PAGE>
10. Pledge, mortgage or hypothecate any of its assets to secure a
debt.
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.
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:
-21-
<PAGE>
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:
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.
-22-
<PAGE>
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), 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.
-23-
<PAGE>
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 1994 to June 1999, Dean, and from 1989 to
1994, 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 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.
-24-
<PAGE>
* JACK R. THOMPSON, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1949. President and a director since 100May 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). 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 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
-25-
<PAGE>
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.
* JOHN B. JARES, 210 University Boulevard, Suite 900, Denver, CO 80206, DOB:
1966. Vice President and co-portfolio manager since May 1999 of the
Berger Growth Fund, the Berger IPT - 100 Fund and the Berger Select
Fund. Vice President and portfolio manager since May 1999
(co-portfolio manager from the Fund's inception in August 1997 to May
1999) of the Berger Balanced Fund. Vice President (since October
1997) and Portfolio Manager (May 1997 to October 1997) with Berger
LLC. Formerly, Research Analyst (February 1994 to December 1996) and
Co-Lead Portfolio Manager (January 1997 to May 1997) with Founders
Asset Management, Inc., and Research Associate with Lipper Analytical
Services, Inc. from October 1992 to February 1994.
* ANTHONY (TINO) R. SELLITTO III, 210 University Boulevard, Suite 900,
Denver, CO 80206, DOB: 1964. Vice President and co-portfolio manager
since May 1999 of the Berger Growth Fund, the Berger IPT- 100 Fund and
the Berger Select Fund. Vice President and portfolio manager of the
Berger Growth and Income Fund and the Berger IPT - Growth and Income
Fund since November 1998. 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. 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. 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
-26-
<PAGE>
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 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.
________________
* 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, 1998. 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, 1998, for each director or
trustee of the Funds:
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<PAGE>
<TABLE>
<CAPTION>
===========================================================================================
NAME AND AGGREGATE COMPENSATION FROM
POSITION
WITH BERGER
FUNDS
===========================================================================================
BERGER BERGER BERGER BERGER BERGER BERGER
INFORMATION NEW SELECT SMALL SMALL MID CAP
TECHNOLOGY GENERATION FUND(2) COMPANY CAP GROWTH
FUND(1) FUND GROWTH VALUE FUND(2)
FUND FUND
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dennis E. $ 269 $1,852 $266 $10,808 $2,317 $36
Baldwin(6)
- ------------------------------------------------------------------------------------------
Louis R. $ 269 $1,828 $266 $10,663 $2,296 $36
Bindner(6)
- ------------------------------------------------------------------------------------------
Katherine A. $ 269 $1,852 $266 $10,808 $2,317 $36
Cattanach(6)
- ------------------------------------------------------------------------------------------
Lucy Black $ 0 $334 $ 0 $1,982 $294 $ 0
Creighton(6),
(10)
- ------------------------------------------------------------------------------------------
Denis Curran(8) $ 0 N/A N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------
Paul R. Knapp(6) $ 269 $1,852 $266 $10,808 $2,317 $36
- ------------------------------------------------------------------------------------------
Harry T. $ 269 $1,852 $266 $10,808 $2,317 $36
Lewis(6)
- ------------------------------------------------------------------------------------------
Michael Owen(6) $ 326 $2,246 $323 $13,107 $2,810 $44
- ------------------------------------------------------------------------------------------
William $ 269 $1,828 $266 $10,663 $2,296 $36
Sinclaire(6)
- ------------------------------------------------------------------------------------------
Jack R. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Thompson
(6),(7),(8),(9)
===========================================================================================
<CAPTION>
===========================================================================================
NAME AND AGGREGATE COMPENSATION FROM
POSITION
WITH BERGER
FUNDS
===========================================================================================
BERGER BERGER BERGER/ BERGER BERGER ALL
MID CAP 100 BIAM GROWTH BALANCED BERGER
VALUE FUND INTERNATIONAL AND FUND FUNDS(5)
FUND(3) FUND(4) INCOME
FUND
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dennis E. $360 $24,043 $2,378 $4,691 $337 $47,000
Baldwin(6)
- -------------------------------------------------------------------------------------------
Louis R. $360 $23,722 $2,357 $4,629 $334 $46,400
Bindner(6)
- -------------------------------------------------------------------------------------------
Katherine A. $360 $24,043 $2,378 $4,691 $337 $47,00a0
Cattanach(6)
- -------------------------------------------------------------------------------------------
Lucy Black $ 0 $4,380 $277 $848 $41 $8,200
Creighton(6),
(10)
- -------------------------------------------------------------------------------------------
Denis Curran(8) N/A N/A $ 0 N/A N/A $ 0
- -------------------------------------------------------------------------------------------
Paul R. Knapp(6) $360 $24,043 $2,378 $4,691 $337 $47,000
- -------------------------------------------------------------------------------------------
Harry T. $360 $24,043 $2,378 $4,691 $337 $47,000
Lewis(6)
- -------------------------------------------------------------------------------------------
Michael Owen(6) $440 $29,158 $2,884 $5,689 $408 $57,000
- -------------------------------------------------------------------------------------------
William $360 $23,772 $2,357 $4,629 $334 $46,400
Sinclaire(6)
- -------------------------------------------------------------------------------------------
Jack R. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Thompson
(6),(7),(8),(9)
===========================================================================================
</TABLE>
-28-
<PAGE>
NOTES TO TABLE
(1) The Fund was not added as an operating series of the Trust until July
1999. Figures are estimates for the first year of operations of the Fund as a
series of the Trust.
(2) Covers the period December 31, 1997 (date operations commenced)
through September 30, 1998.
(3) The Berger Mid Cap Value Fund did not commence operations until August
12, 1998. Figures are estimates for the Fund's first year of operations.
(4) Comprised of the portion of the trustee compensation paid by
Berger/BIAM Worldwide Portfolios to its trustees and allocated to the Fund.
(5) 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 and the Berger Mid Cap Growth 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 the Berger Mid Cap Value Fund and the Berger
Information Technology Fund. Of the aggregate amounts shown for each
director/trustee, the following amounts were deferred under applicable deferred
compensation plans: Dennis E. Baldwin $36,100; Louis R. Bindner $3,638;
Katherine A. Cattanach $45,202; Lucy Black Creighton $6,280; Michael Owen
$10,276; William Sinclaire $14,898.
(6) 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.
(7) Interested person of Berger LLC.
(8) Interested person of BBOI Worldwide LLC. Trustee of Berger/BIAM
Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios Trust.
(9) President of Berger Growth Fund, Berger Growth and Income Fund, Berger
Investment Portfolio Trust, Berger/BIAM Worldwide Portfolios Trust, Berger/BIAM
Worldwide Funds Trust and Berger Omni Investment Trust.
(10) Resigned as a director and trustee of the Berger Funds effective
November 1997.
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 14, 1999, the officers and directors/trustees of the
Funds as a group owned of record or beneficially approximately 3.32% of the
Berger Mid Cap Growth Fund, approximately 1.33% of the Berger Select Fund,
approximately 1.30% of the Berger/BIAM International Fund and an aggregate of
less than 1% of the outstanding shares of each of the other 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 $3.4 billion as of
December 31, 1998. 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
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<PAGE>
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. KCSI indirectly (through Stilwell
Financial) 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.
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.
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 $33 billion as of September 30, 1998.
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.
The Glass-Steagall Act prohibits a depository institution and certain
affiliates from underwriting or distributing most securities and from
affiliating with businesses engaged in certain similar activities. BIAM
believes that it may perform the services for the Fund contemplated by the
Sub-Advisory Agreement between BBOI Worldwide and BIAM consistent with the
Glass-Steagall Act and other applicable banking laws and regulations. However,
future changes in either Federal or state statutes and regulations concerning
the permissible activities of banks and their affiliates, as well as future
judicial or administrative decisions or interpretations of present and future
statutes and regulations, might prevent BIAM from continuing to perform those
services for the Fund. If the circumstances described above should change, the
trustees of the Fund and the Portfolio would review the relationships with BIAM
and consider taking all actions appropriate under the circumstances.
PERKINS, WOLF, MCDONNELL & COMPANY - SUB-ADVISOR
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<PAGE>
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.
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 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
INFORMATION WEEK-Registered Trademark- 100 Index, an unmanaged index of the
stocks of 100 companies in the information technology industries.
INFORMATION WEEK-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 INFORMATION WEEK 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.
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<PAGE>
Under the Agreements, the advisor is compensated for its services by
the payment of a fee at the following annual rates, calculated as a percentage
of the average daily net assets of the Fund:
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<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
INVESTMENT
FUND ADVISOR ADVISORY FEE
- --------------------------------------------------------------------------------
<S> <C> <C>
Berger Information Technology Fund Berger LLC(1) 0.90%(2)
- --------------------------------------------------------------------------------
Berger New Generation Fund Berger LLC 0.90%(3)
- --------------------------------------------------------------------------------
Berger Select Fund Berger LLC 0.75%
- --------------------------------------------------------------------------------
Berger Small Company Growth Fund Berger LLC 0.90%(4)
- --------------------------------------------------------------------------------
Berger Small Cap Value Fund Berger LLC (5) 0.90% (5)
- --------------------------------------------------------------------------------
Berger Mid Cap Growth Fund Berger LLC 0.75% (3)
- --------------------------------------------------------------------------------
Berger Mid Cap Value Fund Berger LLC (5) 0.75% (5)
- --------------------------------------------------------------------------------
Berger Growth Fund Berger LLC 0.75% (4)
- --------------------------------------------------------------------------------
Berger/BIAM International Fund (6) BBOI Worldwide (6) 0.90% (6)
- --------------------------------------------------------------------------------
Berger Growth and Income Fund Berger LLC 0.75% (4)
- -------------------------------------------------------------------------------
Berger Balanced Fund Berger LLC 0.70% (3)
- --------------------------------------------------------------------------------
</TABLE>
(1) Fund is sub-advised by Bay Isle. See text preceding and following
table.
(2) 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.
(3) Under a written agreement, the Fund's investment advisor waives its fee
to the extent that 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 agreement 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.
(4) 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.
(5) 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.
(6) 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 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.
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
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<PAGE>
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 0.90% of the first $75 million of average daily net asset
of the Fund, 0.50% of the next $125 million, and 0.20% of any amounts in excess
of $200 million. 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 and April 8, 1998 (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 at the end of the first five
years under the Sub-Advisory Agreement for the Berger Small Cap Value Fund (or
at such earlier time if the Sub-Advisory Agreement is terminated or not renewed
by the trustees other than for cause), 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.
Berger LLC and PWM have also agreed that if the Sub-Advisory Agreement with
PWM pertaining to the Berger Mid Cap Value Fund is terminated or not renewed by
the trustees other than for cause within the first 2-1/2 years of its
effectiveness, Berger LLC and PWM will enter into a consulting agreement for the
remainder of the 2-1/2 year period, under which PWM will provide consulting
services to Berger LLC with respect to the Fund, subject to any requisite
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<PAGE>
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 for those services, Berger LLC
would pay PWM a fee at a rate equal to $400,000 annually less certain agreed
amounts. No part of the consulting fee would be borne by the Fund.
OTHER ARRANGEMENTS BETWEEN BERGER LLC AND BAY ISLE
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.
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<PAGE>
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.
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. Each
Fund pays Berger LLC a fee at an annual rate of 0.01% of its average daily net
assets for such services. These fees are in addition to the investment advisory
fees paid under the Investment Advisory Agreement. The administrative services
fees may be changed by the directors or trustees without shareholder approval.
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.
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<PAGE>
BERGER INFORMATION TECHNOLOGY FUND
<TABLE>
<CAPTION>
Advisory Fee
Fiscal Year Ended Investment Administrative Service Waiver and Expense TOTAL
February 28(1) Advisory Fee(2) Fee(3) Reimbursement(4)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1999 $ 68,000 $ 30,000 $ (84,000) $ 14,000
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 current investment advisory fee of 0.90% payable to Berger
LLC came into effect.
(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 current administrative service fee of 0.01% payable to
Berger LLC came into effect.
(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
September 30, Advisory Fee Service Fee Waiver TOTAL
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998 $1,229,000 $14,000 $ 0 $1,243,000
1997 $ 962,000 $20,000 $ 0 $ 982,000
1996* $ 398,000 $ 4,000 $ (85,000) $ 317,000
</TABLE>
* Covers period from March 29, 1996 (commencement of operations) through the
end of the Fund's first fiscal year on September 30, 1996.
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>
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 TOTAL
September 30, Advisory Fee Service Fee Waiver
- ------------------------- ----------------------- ----------------------- ---------------------- -----------------------
<S> <C> <C> <C> <C>
1998 $6,984,000 $ 78,000 $ 0 $7,062,000
1997 $6,831,000 $ 78,000 $ 0 $6,909,000
1996 $5,902,000 $ 66,000 $ 0 $5,968,000
</TABLE>
-37-
<PAGE>
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>
1998 $1,515,000 $17,000 $ 0 $1,532,000
1997* $ 418,000 $ 4,000 $ 0 $ 422,000
1996 $ 325,000 $ 0 $ 0 $ 325,000
</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.
^ 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 amount shown for 1996
was paid by the Fund during the fiscal year ended December 31, 1996, and 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>
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>
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>
1998 $12,939,000 $173,000 $ 0 $13,112,000
1997 $14,424,000 $192,000 $ 0 $14,616,000
1996 $15,767,000 $ 210,000 $ 0 $15,977,000
</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>
1998 $2,539,000 $ 34,000 $ 0 $2,573,000
1997 $2,442,000 $ 32,000 $ 0 $2,474,000
1996 $2,496,000 $ 33,000 $ 0 $2,529,000
</TABLE>
-38-
<PAGE>
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>
1998 $168,000 $ 2,000 $(16,000) $154,000
</TABLE>
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 31% of the
outstanding shares of DST are owned by KCSI.
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.
-39-
<PAGE>
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 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
31% of the outstanding shares of DST are owned by KCSI, which also owns 100% of
the outstanding shares of Berger LLC.
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.
-40-
<PAGE>
BERGER/BIAM INTERNATIONAL PORTFOLIO
<TABLE>
<CAPTION>
Fiscal Year Ended Investment Advisory Fee TOTAL
September 30, Advisory Fee Waiver
- ------------------------------- ----------------------------- ---------------------------- -----------------------------
<S> <C> <C> <C>
1998 $1,531,000 $(61,000) $1,470,000
1997* $ 560,000 $(61,000) $ 499,000
</TABLE>
* Covers period from October 11, 1996 (commencement of 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>
1998 $ 85,000
1997* $ 63,000
</TABLE>
* Covers period from November 7, 1996 (commencement of 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;
-41-
<PAGE>
- -- 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 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, 1998:
<TABLE>
<CAPTION>
FUND 12B-1 PAYMENTS
- --------------------------------------------------------------------------------
<S> <C>
Berger Information Technology Fund(4) $ 0 (1)
Berger New Generation Fund(4) $ 341,000
Berger Select Fund(2) $ 48,000
Berger Small Company Growth Fund(4) $ 1,026,000(3)
Berger Small Cap Value Fund(4) $ 229,000
Berger Mid Cap Growth Fund(2) $ 7,000
Berger Mid Cap Value Fund(5) $ 7,000
Berger Growth Fund $ 4,313,000
Berger/BIAM International Fund $ 47,000
Berger Growth and Income Fund $ 846,000
Berger Balanced Fund $ 60,000
</TABLE>
(1) The Fund did not start offering the Investor Shares class of shares
bearing a 12b-1 fee until July 1999.
(2) Covers the period from December 31, 1997 (commencement of operations)
through September 30, 1998.
(3) Reflects the partial 12b-1 fee waiver that was in effect from November
17, 1997, through May 29, 1998, when the Fund was closed to new investors.
(4) 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.
(5) Covers the period from August 12, 1998 (commencement of operations)
through September 30, 1998.
OTHER EXPENSE INFORMATION
-42-
<PAGE>
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 KCSI in both DSTS 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
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,
------------------------------------------
1998 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
BERGER INFORMATION TECHNOLOGY FUND $10,000(1) $6,000(1) N/A
BERGER NEW GENERATION FUND $340,000 $165,000 $939,000(2)
BERGER SELECT FUND $536,000(3) N/A N/A
BERGER SMALL COMPANY GROWTH FUND $890,000 $1,044,000 $604,000
BERGER SMALL CAP VALUE FUND $567,000 $306,000(4) $307,000(4)
BERGER MID CAP GROWTH FUND $ 15,000(3) N/A N/A
BERGER MID CAP VALUE FUND $ 33,000(5) N/A N/A
-43-
<PAGE>
<CAPTION>
FOR THE YEAR/PERIOD ENDED SEPTEMBER 30,
------------------------------------------
1998 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
BERGER GROWTH FUND $9,258,000 $6,671,000 $4,691,000
BERGER/BIAM INTERNATIONAL FUND (6) $225,000 $234,000(6) N/A
BERGER GROWTH AND INCOME FUND $2,397,000 $1,124,000 $769,000
BERGER BALANCED FUND $207,000 N/A 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.
(2) Covers period from March 29, 1996 (commencement of operations) through
the end of the Fund's first fiscal year on September 30, 1996. The Fund paid
more brokerage commissions than anticipated during this period as a result of
portfolio transactions undertaken in response to volatile markets and the short
tax year for its initial period of operations.
(3) Covers period from December 31, 1997 (commencement of operations) through
the end of the Fund's first fiscal year on September 30, 1998.
(4) The Fund's fiscal year end was changed from December 31 to September 30
during 1997. Accordingly, the brokerage commissions shown for 1996 were paid by
the Fund during the fiscal year ended December 31, 1996, and the brokerage
commissions shown for 1997 cover the period January 1, 1997, through September
30, 1997.
(5) Covers period from August 12, 1998 (commencement of operations) through the
end of the Fund's first fiscal year on September 30, 1998.
(6) These are brokerage commissions paid by the Portfolio in which all the
Fund's investable assets are invested. Commissions paid 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 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
-44-
<PAGE>
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 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, 1998, 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>
AMOUNT OF
FUND AMOUNT OF TRANSACTIONS COMMISSIONS
- --------------------------------------------------------------------------------
<S> <C> <C>
Berger Information Technology $ 0 (1) $ 0(1)
Fund
Berger New Generation Fund $ 13,883,000 $39,000
Berger Select Fund $ 44,296,000 $87,000
Berger Small Company Growth $ 5,478,000 $19,000
Fund
Berger Small Cap Value Fund $ 10,279,000 $31,000
Berger Mid Cap Growth Fund $ 981,000 $2,000
Berger Mid Cap Value Fund $ 0 $ 0
Berger Growth Fund $869,413,000 $1,222,000
Berger/BIAM International Fund $ 0 $ 0
Berger Growth and Income Fund $178,843,000 $221,000
Berger Balanced Fund $13,873,000 $34,000
</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 fiscal year ended February 28, 1999, of the Fund's predecessor.
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
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<PAGE>
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 KCSI in
both DSTS 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 Commissions in Commissions in Expenses
Paid Expenses Paid Expenses Paid FYE
FYE 9/30/98 FYE FYE 9/30/97 FYE FYE 9/30/96 9/30/96(1)
9/30/98(1) 9/30/97(1)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Berger Information $ 0(2) $ 0 $ 0(2) $ 0 N/A N/A
Technology Fund
Berger New Generation Fund $2,000(3) $1,500 $ 0 $ 0 $ 0 $ 0
Berger Select Fund $9,000(4) $7,000 N/A N/A N/A N/A
Berger Small Company $ 0 $ 0 $42,000 $31,000 $13,000 $10,000
Growth Fund
Berger Small Cap Value Fund $ 0 $ 0 $10,000 $7,000 N/A N/A
Berger Mid Cap Growth Fund $ 0(5) $ 0 N/A N/A N/A N/A
Berger Mid Cap Value Fund $ 0(6) $ 0 N/A N/A N/A N/A
Berger Growth Fund $390,000(7) $293,000 $527,000 $396,000 $278,000 $209,000
Berger/BIAM International $ 0 $ 0 $ 0 $ 0 N/A N/A
Fund
Berger Growth and Income $ 28,000(8) $ 21,000 $35,000 $26,000 $15,000 $11,000
Fund
Berger Balanced Fund $ 0 $ 0 N/A N/A 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 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.
(3) Constitutes less than 1% 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) Covers the period from December 31, 1997 (commencement of operations)
through September 30, 1998. Constitutes 2% 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) Covers the period from August 12, 1998 (commencement of operations) through
September 30, 1998.
(7) Constitutes 4% 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.
(8) Constitutes 1% 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.
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<PAGE>
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, the following amounts were paid by the Fund to PWM, then the
Fund's advisor, now the Fund's sub-advisor, which is also a registered
broker-dealer.
BERGER SMALL CAP VALUE FUND
BROKERAGE COMMISSIONS PAID TO PWM
<TABLE>
<CAPTION>
Fiscal Year Ended Fiscal Year Ended
September 30, 1997(1) December 31, 1996
<S> <C>
$ 138,000 $ 307,000
</TABLE>
(1) The Fund's fiscal year end was changed during 1997. Covers the period
January 1, 1997, through February 14, 1997.
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 advisors and sub-advisors of the
Funds will seek the best execution of each transaction.
During the fiscal year ended September 30, 1998, the Berger Growth and
Income Fund acquired securities of two of the Fund's regular broker-dealers,
Merrill Lynch & Co. and Morgan Stanley Dean Witter & Co. However, as of
September 30, 1998, the Fund did not own any of those securities. Also, during
the fiscal year ended September 30, 1998, the Berger Balanced Fund acquired
securities of Merrill Lynch & Co., one of the Fund's regular broker-dealers. As
of September 30, 1998, the Fund owned Merrill Lynch bonds with an aggregate
value of $1,015,955.
7. HOW TO PURCHASE AND REDEEM SHARES IN THE FUNDS
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
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<PAGE>
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 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
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<PAGE>
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.
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.
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<PAGE>
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 or as capital gains. 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, shareholders of
the Fund may be able to deduct (as an itemized deduction) or, for the Funds that
make an election, 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 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
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 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.
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<PAGE>
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 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 591/2 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
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<PAGE>
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 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 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 591/2 and must begin no later than April 1 of the calendar
year following the year in which you attain age 701/2. 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 Funds, c/o Berger LLC, P.O. Box 5005, Denver, Colorado
80217, or call 1-800-333-1001.
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.
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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 taxable amount of the traditional IRA
account balance. Individuals who complete the rollover in 1998 will be
permitted to spread the tax liability over a four-year period. After 1998, all
taxes on such a rollover will be due in the year in which the rollover is made.
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 701/2 or the calendar
year in which you retire. Except for required distributions after age 701/2 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 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.
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.
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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 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.
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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, 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)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.
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.
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AVERAGE ANNUAL TOTAL RETURNS
The average annual total return for each of the Funds for various
periods ending September 30, 1998 (or date noted), 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 47.13%(2) N/A N/A N/A 52.32%(2)
Fund B Investor Shares(1) (since 4/8/97)
Berger New Generation Fund - (13.99)% N/A N/A N/A 12.27%
Investor Shares (since 3/29/96)
Berger Select Fund N/A N/A N/A N/A 32.60%(3)
(since 12/31/97)
Berger Small Company Growth Fund (24.70)% 5.18% N/A N/A 11.57%
- - Investor Shares (since 12/30/93)
Berger Small Cap Value Fund - (10.98)% 15.35% 15.97% 13.24% 13.88%
Investor Shares(4) (since 10/21/87)(5)
Berger Mid Cap Growth Fund N/A N/A N/A N/A 9.30%(3)
(since 12/31/97)
Berger Mid Cap Value Fund N/A N/A N/A N/A (6.70)%(3)
(since 8/12/98)
Berger Growth Fund (16.08)% 5.09% 5.79% 16.18% 13.97%
(since 9/30/74)(6)
Berger/BIAM International Fund(7) (8.46)% 5.78% 8.12% N/A 10.77%
(since 7/31/89)
Berger Growth and Income Fund (1.60)% 13.58% 11.45% 14.01% 13.68%
(since 9/30/74)(6)
Berger Balanced Fund 56.77% N/A N/A N/A 56.77%
(since 9/30/97)
</TABLE>
(1) The Fund's fiscal year changed from February 28 to September 30 as part of
a reorganization effective July 1999. Accordingly, these figures are for the
periods ended February 28, 1999, the last fiscal year end of the Fund's
predecessor.
(2) Covers periods prior to the Fund's adoption of share classes as part of
its reorganization on July 2, 1999, and therefore does 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.
(3) Not annualized.
(4) Performance data for the Investor Shares include periods prior to the
Fund's 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, which
came into effect on that date.
(5) Covers the period from October 21, 1987 (date of the Fund's first public
offering) through September 30, 1998.
(6) 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, 1998. 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.
(7) 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 Growth Fund-Registered Trademark-", "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.
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
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shares issued by 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 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"
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.
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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 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 100 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.
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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 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 New Generation Fund, the
Berger Information Technology 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 1-800-706-0539.
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
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<PAGE>
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.
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.
-61-
<PAGE>
PRINCIPAL SHAREHOLDERS
Insofar as the management of the Funds is aware, as of ______________,
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 New Generation Fund (Investor Shares) 17.50%
101 Montgomery Street -------------------------------------------------------- ---------------------
San Francisco, CA 94104 Berger Select Fund 44.48%
-------------------------------------------------------- ---------------------
Berger Small Company Growth Fund (Investor Shares) 21.53%
-------------------------------------------------------- ---------------------
Berger Small Cap Value Fund (Investor Shares) 29.44%
-------------------------------------------------------- ---------------------
Berger Mid Cap Growth Fund 20.67%
-------------------------------------------------------- ---------------------
Berger Mid Cap Value Fund 47.75%
-------------------------------------------------------- ---------------------
Berger Growth Fund 22.11%
-------------------------------------------------------- ---------------------
Berger/BIAM International Fund 27.66%
-------------------------------------------------------- ---------------------
Berger Growth and Income Fund 26.07%
-------------------------------------------------------- ---------------------
Berger Balanced Fund 28.65%
- ----------------------------------------- -------------------------------------------------------- ---------------------
National Financial Services Corporation Berger New Generation Fund (Investor Shares) 7.76%
("Fidelity") -------------------------------------------------------- ---------------------
82 Devonshire Street, R20A Berger Select Fund 19.23%
Boston, MA 02109 -------------------------------------------------------- ---------------------
Berger Mid Cap Growth Fund 6.52%
-------------------------------------------------------- ---------------------
Berger Small Company Growth Fund (Investor Shares) 7.19%
-------------------------------------------------------- ---------------------
Berger Small Cap Value Fund (Investor Shares) 24.57%
-------------------------------------------------------- ---------------------
Berger/BIAM International Fund 5.07%
-------------------------------------------------------- ---------------------
Berger Balanced Fund 12.88%
- ----------------------------------------- -------------------------------------------------------- ---------------------
Donaldson Lufkin & Jenrette Berger Select Fund 6.41%
("DLJ") -------------------------------------------------------- ---------------------
SEC Corp Pershing Division Berger Small Cap Value Fund (Investor Shares) 13.88%
P.O. Box 2052 -------------------------------------------------------- ---------------------
Jersey City, NJ 07383 Berger Balanced Fund 11.19%
- ----------------------------------------- -------------------------------------------------------- ---------------------
Berger LLC Berger Mid Cap Growth Fund 11.33%
210 University Blvd.
Denver, CO 80206
- ----------------------------------------- -------------------------------------------------------- ---------------------
</TABLE>
In addition, Schwab owned of record 22.49%, and Fidelity owned of
record 7.64%, of all the outstanding shares of the Berger Investment Portfolio
Trust, of which 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 are outstanding series. Schwab also owned of record 21.53%,
Fidelity owned of record 15.21% and DLJ owned of record 10.20%, of all the
outstanding shares of the Berger Omni
-62-
<PAGE>
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 24.08% 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 May 7, 1999, Schwab owned of record 85.67%, and the Du Bain 1991
Trust (Myron Du Bain TTEE, 160 Sansome Street, 17th Floor, San Francisco, CA
94104), owned of record 7.91%, of the outstanding shares of the fund that was
reorganized in July 1999 into the Berger Information Technology Fund, a series
of the Berger Investment Portfolio Trust. In addition, Bay Isle has advised the
Trust that, as of May 7, 1999, it had voting discretion over approximately 8.04%
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. All outstanding shares of the prior fund
were exchanged for Institutional Shares of the Berger Information Technology
Fund in the July 1999 reorganization.
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 except the Berger
Information Technology Fund for the fiscal year ended September 30, 1998. 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 1997 income tax returns.
PricewaterhouseCoopers LLP has been appointed to act as independent
accountants for the Funds, including the Berger Information Technology Fund, for
the fiscal year ended September 30, 1999. In that capacity,
PricewaterhouseCoopers LLP will audit the financial statements of the Funds and
assist the Funds in connection with the preparation of their 1998 income tax
returns.
-63-
<PAGE>
FINANCIAL INFORMATION
Financial Information will be updated by amendment
-64-
<PAGE>
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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<PAGE>
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 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.
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<PAGE>
BERGER 100 FUND
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 THE FUND
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.
ITEM 27. PRINCIPAL UNDERWRITERS
C-1
<PAGE>
(a) Investment companies for which the Fund's principal
underwriter also acts as principal underwriter, depositor or investment adviser:
The One Hundred Fund, Inc.
Berger One Hundred and One Fund, Inc.
Berger Investment Portfolio Trust
- --Berger Small Company Growth Fund
- --Berger Information Technology 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 and None
- ------------------------------------------------------------------------------------------------------------
David J. Schultz Chief Financial Officer, Assistant Vice President and Treasurer
Secretary and Treasurer
- ------------------------------------------------------------------------------------------------------------
Brian Ferrie Vice President and Chief Compliance Vice President
Officer
- ------------------------------------------------------------------------------------------------------------
Janice M. Teague Vice President and Secretary Vice President and Secretary
- ------------------------------------------------------------------------------------------------------------
Sue Vreeland Assistant Secretary None
- ------------------------------------------------------------------------------------------------------------
</TABLE>
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
C-2
<PAGE>
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 29th day of November, 1999.
THE ONE HUNDRED FUND, INC.
--------------------------
(Registrant)
By /s/ Jack R. Thompson
-------------------------------------------
Name: Jack R. Thompson
----------------------------------------
Title: President
--------------------------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Jack R. Thompson, Janice M. Teague and
Lester R. Woodward, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
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.
C-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jack R. Thompson President (Principal November 29, 1999
- ------------------------------------------------ Executive Officer)
Jack R. Thompson and Director
/s/ David J. Schultz Vice President and November 29, 1999
- ------------------------------------------------ Treasurer (Principal
David J. Schultz Financial Officer)
/s/ John Paganelli Assistant Treasurer November 29, 1999
- ------------------------------------------------ (Principal Accounting
John Paganelli Officer)
/s/ Dennis E. Baldwin Director November 29, 1999,
- ------------------------------------------------
Dennis E. Baldwin
/s/ Louis R. Bindner Director November 29, 1999
- ------------------------------------------------
Louis R. Bindner
/s/ Katherine A. Cattanach Director November 29, 1999
- ------------------------------------------------
Katherine A. Cattanach
/s/ Paul R. Knapp Director November 29, 1999
- ------------------------------------------------
Paul R. Knapp
/s/ Harry T. Lewis, Jr. Director November 29, 1999
- ------------------------------------------------
Harry T. Lewis, Jr.
/s/ Michael Owen Director November 29, 1999
- ------------------------------------------------
Michael Owen
/s/ William Sinclaire Director November 29, 1999
- ------------------------------------------------
William Sinclaire
- ----------------
</TABLE>
C-5
<PAGE>
BERGER 100 FUND
EXHIBIT INDEX
<TABLE>
<CAPTION>
N-1A EDGAR
Exhibit Exhibit
No. No. Name of Exhibit
- ------------- ---------- -----------------
<S> <C> <C>
(3) Exhibit 23(a)-1 Articles of Incorporation (3/9/66)
(3) Exhibit 23(a)-2 Articles of Amendment (10/11/66)
(3) Exhibit 23(a)-3 Articles Supplementary (10/24/91)
(3) Exhibit 23(a)-4 Articles Supplementary (7/93)
(3) Exhibit 23(b) Bylaws (as amended through June 20, 1997)
Exhibit 23(c) Not applicable
(3) Exhibit 23(d) Form of Investment Advisory Agreement
(1) Exhibit 23(e) Form of Distribution Agreement between the
Fund and Berger Distributors, Inc.
Exhibit 23(f) Not applicable
(2) Exhibit 23(g) Form of Custody Agreement
(3) Exhibit 23(h)-1 Form of Amended and Restated
Administrative Services Agreement
(3) Exhibit 23(h)-2 Form of Recordkeeping and Pricing Agent
Agreement
(3) Exhibit 23(h)-3 Form of Agency Agreement
Exhibit 23(i) Not applicable
(4) Exhibit 23(j) EX-99.B23(j) Consent of PricewaterhouseCoopers LLP
Exhibit 23(k) Not applicable
Exhibit 23(l) Not applicable
(3) Exhibit 23(m) Form of Rule 12b-1 Plan, as amended
(3) Exhibit 23(n) Financial Data Schedule
Exhibit 23(o) Not Applicable
</TABLE>
- ---------------------
C-6
<PAGE>
Filed previously as indicated below and incorporated herein by reference:
(1) Filed as Exhibit 6 with Post-Effective Amendment No. 58 to Registrant's
Registration Statement on Form N-1A filed December 31, 1997.
(2) Filed as Exhibit 8 with Post-Effective Amendment No. 54 to Registrant's
Registration Statement on Form N-1A filed November 27, 1995.
(3) Filed as Exhibit number listed with Post-Effective Amendment No. 59 to
Registrant's Registration Statement on Form N-1A filed November 25, 1998.
(4) Filed as Exhibit number listed with Post-Effective Amendment No. 60 to
Registrant's Registration Statement on Form N-1A filed January 28, 1999.
C-7
