SUPPLEMENT TO GAM FUNDS, INC PROSPECTUS DATED APRIL 30, 1999
* Please note:
INVESTMENTS IN THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, UBS AG OR ANY OF ITS AFFILIATES AND ARE NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER GOVERNMENT AGENCY. INVESTMENTS IN THE FUNDS INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINICPAL.
* Please note, that as of July 28, 1999, GAM Global and GAM International Funds
received Board approval to change a non-fundamental investment restriction which
will allow the Funds to engage in short selling. The Prospectus1, at pages 2 and
6, should read as follows:
GAM Global Fund and GAM International Fund
Investment Strategy
GAM Global and GAM International Funds may from time to time engage in short
selling of securities. Short selling is an investment technique wherein the Fund
sells a security it does not own anticipating a decline in the market value of
the security. To complete the transaction, the Fund must borrow the security to
make delivery to the buyer. The Fund is obligated to replace the security
borrowed by purchasing it subsequently at the market price at the time of
replacement. The price at such time may be more or less than the price at which
the security was sold by the Fund, which would result in a loss or gain. Short
sales by the Fund involve risk. If the Fund incorrectly predicts that the price
of the borrowed security will decline, the Fund will have to replace the
securities with securities of a greater value than the amount received from the
sale. As a result, losses from short sales differ from losses that could be
incurred from a purchase of a security, because losses from short sales may be
unlimited, whereas losses from purchases can equal only the total amount
invested. The Fund may also make short sales "against the box" wherein the Fund
enters into a short sale of a security it owns.
The frequency of short sales will vary substantially under different market
conditions, and no specified portion of Fund assets as a matter of practice will
be committed to short sales. However, no securities will be sold short if, after
effect is given to any such short sale, the total market value of all securities
sold short would exceed 20% of the value of the Fund's net assets.
* Please note, that as of October 26, 1999, the shareholders of the GAM Pacific
Basin Fund approved a proposal to permit the Fund to change a fundamental policy
of non-concentration to concentration. Thus, the following language is added to
the Prospectus at pages 10 and 11:
GAM Pacific Basin Fund
Investment Strategy
More than 25% of the value of the total assets of GAM Pacific Basin will
ordinarily be invested in the financial services sector, which sector includes
banking, financial services, insurance and real estate. The Fund has a
fundamental policy of concentrating at least 25% of its assets in the financial
services sector.
{The contrary reference to a policy of non-concentration should be ignored}.
Principal Risks
Since the Fund will concentrate its investments in the financial services
sector, it may be subject to greater share price fluctuations than a
non-concentrated fund. Because the Fund invests primarily in one sector, there
is the risk that the Fund will perform poorly during a downturn in that sector.
Also, changes in government policies and regulation, interest rates, currency
exchange rates, and other factors affecting the financial markets may affect
businesses in the finance sector more significantly.
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1 Additional information regarding the risks and considerations relative to
short selling may be found in the Statement of Additional Information, which you
may request free of charge.
<PAGE>
Who May Want to Invest?
The Fund may only be appropriate if you can tolerate concentrated investments in
a single market sector. The Fund should be considered a vehicle for
diversification and should not be considered a balanced investment program by
itself.
* Please note, that as of July 20, 1999, Jean-Philippe Cremers has taken over
the management of GAM Global and GAM International Funds. The Prospectus, at
page 30, should read as follows:
II. Management of the Funds
INDIVIDUALS PRIMARILY RESPONSIBLE FOR DAY-TO-DAY MANAGEMENT OF THE FUNDS:
GAM GLOBAL AND GAM INTERNATIONAL FUNDS
Jean-Philippe Cremers, Investment Director, joined GAM as an analyst for the
International Team in April, 1992. He has been an Investment Director with the
International Team since 1997 and is responsible for a number of GAM's other
global and international funds. Prior to joining GAM, Mr. Cremers analyzed the
Japanese and US stock markets at the Tokyo Investment Information Centre in Hong
Kong. Mr. Cremers is based in London.
*Please note the change of control regarding an investment adviser to the Funds.
The following language is added to the Prospectus at page 30:
INVESTMENT ADVISERS
Global Asset Management Limited ("GAML"), the ultimate shareholder of GAM
International Management Ltd. ("GAM"), the investment advisor to the Funds, is
wholly owned by UBS AG ("UBS"), a Swiss banking corporation. UBS, with
headquarters in Basel, Switzerland, is an internationally diversified
organization with operations in many aspects of the financial services industry.
UBS was formed by the merger of Union Bank of Switzerland and Swiss Bank
Corporation in June 1998.
*Please note the change of control regarding the distributor and principal
underwriter of the Funds' shares. The following language is added following the
first sentence of the first paragraph at page 31:
GAM is an indirect wholly owned subsidiary of GAML. GAML is wholly owned by UBS.
The information contained in this Supplement supersedes any contrary information
contained in the Fund's Prospectus. Please be sure to retain this Supplement
with your Prospectus.
Supplement dated: December 17, 1999.
