THE BERGER SMALL CAP VALUE FUND
FORMERLY KNOWN AS
THE OMNI INVESTMENT FUND
DECEMBER 31, 1996
ANNUAL REPORT
TABLE OF CONTENTS
<TABLE>
<S> <C>
Portfolio Manager's Letter 2
Report of Independent Auditors 5
Portfolio of Investments 6
Statement of Assets and Liabilities 8
Statement of Operations 9
Statement of Changes in Net Assets 9
Financial Highlights 10
Notes to Financial Statements 11
</TABLE>
the omni
investment fund
portfolio manager's letter
The Omni Investment Fund
Dear Shareholder:
The Omni Investment Fund (whose name is proposed to be changed to the Berger
Small Cap Value Fund on February 14, 1997, as explained in Note 6 of the
Financial Statements) turned in a strong performance in 1996. In a year led,
primarily, by gains among large cap stocks, the Fund's small cap value stocks
delivered a total return of 25.6%, which was nearly equal to the large cap
stock-dominated Dow Jones Industrial Average's return of 26%. The Fund's 1996
return was significantly higher than the 16.5% total return registered by
the Russell 2000, a stock index which is widely regarded in the industry
as the premier measure of small cap stocks. The Fund's average annual total
return for the five-year period ended December 31, 1996 was 18.6%; since
inception (October 21, 1987, the date of its public offering), the Fund's
average annual total return through December 31, 1996 was 14.4%.*
We were very pleased to receive two high industry rankings for the Fund's
past performance. The Fund received an -A' rating from The Wall Street
Journal for its one-year, three-year and five-year performance for these
periods ended December 31, 1996.** Additionally, the well-known fund
evaluator, Morningstar, gave the Fund a 4 star rating for its one-year
performance, its highest rating-5 stars-for the Fund's three-year and
five-year performance, and 3 stars for its ten-year performance for these
periods ended December 31, 1996.***
Identifying Value Stocks
The Fund's investment objective is capital appreciation. We seek to achieve
this objective by using a -value style' investment process, which focuses
on the common stocks of, primarily, small cap companies (market
capitalization of less than $1 billion at the time of initial purchase) we
believe to be undervalued relative to their assets, earnings, cash flow or
business franchise. The potential rewards of this investment style are
well-illustrated by the performance of stocks in an industry sector we
invested in only recently--equipment manufacturers for the semiconductor
industry.
Stocks of many of these companies were once considered to be growth stocks;
they were selling at 20-25 times earnings and everyone wanted to own them.
Wall Street analysts followed them very closely. But, then, the fundamentals
of the industry changed and the high-flyers nose dived. Stock prices
plummeted 60-70% and, not surprisingly, analysts were no longer interested.
That's when they became value stocks and we began to take note. The more we
investigated the underlying value of some of these companies, the more
convinced we were that they had the financial strength to weather what were
likely to be short-term problems. We bought six semiconductor equipment
manufacturers in the fourth quarter 1996, including Tencor Instruments and
Teradyne. By year-end, these stocks registered gains of 30-50%-enough to
account for about one-fifth (4-5 percentage points) of the Fund's total
return for 1996.
It's important to realize, of course, that most value stocks don't turn
around this fast or this dramatically. I expect the stocks I select for the
Fund's portfolio to fully develop to their potential within about 24 months.
Fund Winners in 1996
The Fund's 1996 performance also benefited from developments in two other
industries-natural gas and financial. Performance of Fund holdings in the
natural gas area was bolstered by the firming of natural gas prices. In
the financial area, companies continue to consolidate. Three of our
financial stocks-American Reinsurance, California Federal and Walden
Bancorp-were bought out at attractive prices. Finally, I have to say that
Fund performance was helped by the fact that there were no disasters or
major surprises in 1996.
A Well-Diversified Portfolio
We enter 1997 with a well-diversified portfolio. Capital Goods, Thrifts and
Semiconductors constitute the largest percentage of portfolio emphasis at
15%, 16% and 15% respectively, followed by Consumer (11%), Natural Resources
(11%), Banks (10%), Insurance (6%), Communications (4%), Closed-End Mutual
Funds (4%), and Real Estate (2%). The Fund's 5% cash position at year-end
reflects our belief in staying fully invested and in the ability of
undervalued securities to hold up better than the general market in case
of a major downturn.
1997 Outlook-A Year of Opportunity
We see great opportunity for small cap value stocks in 1997 for several
reasons. First, large company stocks, which dominated market performance in
1995 and 1996, may now be fully valued. This is largely attributable to a
remarkable run-up of nearly 70% in the compound total return for the S&P 500
over this two-year period and to an anticipated 1997 economic scenario of
higher corporate profits (4-6%) and slightly higher long-term interest rates
around 7%.
Another reason we are optimistic about small cap value stocks in 1997 is the
fact that small cap company market performance lagged large company
performance in 1996. As a result, small company stock prices, unlike those
of large company stocks, may not yet be fully valued.
What about value versus growth stocks in the small cap area? Here, too, we
see reason for optimism. According to the accompanying chart, which shows the
relative performance of small cap value stocks versus small cap growth
stocks, the price-earnings ratio of value stocks is at a level not seen
since 1982. While there can be no guarantee that history will repeat itself,
from the second quarter of 1983 to the third quarter of 1986, small cap
value stocks rose 44% and growth stocks gained only 13%.
We continue to believe that our area of specialty-small cap value
companies-is largely neglected and that their stock prices are well below
inherent value. This was certainly the case for semiconductor equipment
manufacturers in 1996. At the time we purchased them, these formerly
high-flying companies had retreated from their lofty price levels and had
virtually no following in the investment community. But, they had strong
financials. To us, there is greater potential reward to be had, at much
less risk, by investing in stocks that have had the market "exuberance"
wrung out of them and that have the strong financials necessary to recover
from temporary setbacks and move ahead.
Thank you for your confidence and your investment in the Fund.
Sincerely,
Robert H. Perkins
Portfolio Manager
*Performance figures are based on historical results and are not intended
to be indicative of 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 that their original cost.
**The Wall Street Journal proprietary ratings reflect historical performance
(average annual total returns) through 12/31/96. The Fund was rated among
134 funds in the Wall Street Journal's capital appreciation category.
the percentage of such funds included in each rating category are as follows:
A=top 20%; B=next 20%; C=middle 20%; D=next 20%; E=bottom 20%.
***Morningstar's proprietary ratings reflect historical risk-adjusted
performance through 12/31/96. The ratings are subject to change every
month. Ratings are calculated from the Fund's one-, three-, five- and ten-
year average annual total returns in excess of 90-day Treasury bill returns,
with appropriate fee adjustments and a risk factor that reflects fund
performance below 90-day T-bill returns. If was rated among 2,959; 1,826;
1,058 and 598 funds in Morningstar's equity category for the one-, three-,
five- and ten-year periods respectively. 10% of the funds in an investement
category receive 5 stars, the next 22.5% receive 4 stars and the next
35% earn 3 stars.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTEMENT IN OMNI
INVESTMENT FUND VS. RUSSELL 2000 AND COST OF LIVING INDEX
(DESCRIPTION OF OMNI INVESTEMMENT FUND PERFORMANCE CHART)
The following table reflects data presented in a line chart at this point
in the Annual Report to Shareholders. The chart compares the value of
shares invested in Omni Investment Fund to the Russell 2000 Index and the
Cost of Living Index. The chart is based on an initial investment of
$10,000 on October 21, 1987 with all dividends and capital gains
reinvested. Also included is a smaller chart reflecting the Omni Investment
Fund's Average annual Total Return as of December 31, 1996 for 1 year--
25.6%, 5 years--18.6% amd 10 years--14.4%.
<TABLE>
<CAPTION>
Total Value
Date Omni Russell Cost of
2000 Living
<S> <C> <C> <C>
10/21/87 $10,000 $10,000 $10,000
12/31/87 9,907 9,266 10,009
12/31/88 11,897 11,584 10,451
12/31/89 15,042 13,468 10,937
12/31/90 11,742 10,845 11,605
12/31/91 14,675 15,838 11,960
12/31/92 17,552 18,754 12,307
12/31/93 20,408 22,294 12,645
12/31/94 21,776 21,888 12,984
12/31/95 27,450 28,115 13,313
12/31/96 34,478 32,752 13,755
</TABLE>
the omni
investment fund
report of independent auditors
The Board of Trustees and Shareholders
The Omni Investment Fund
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of The Omni Investment Fund as of
December 31, 1996, and the related statements of operations for the year
then ended and changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the fiscal
periods since 1989. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits. The financial highlights for the periods ended
December 31, 1988 and 1987 were audited by other auditors whose report
dated February 23, 1989, expressed an unqualified opinion.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
investments owned as of December 31, 1996, by correspondence with the
central depositories and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of The Omni Investment Fund at December 31, 1996, the results of its
operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended and the financial highlights for
each of the fiscal periods since 1989, in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
January 24, 1997
<TABLE>
<CAPTION>
The Omni Investment Fund
Portfolio Of Investments - December 31, 1996
Shares, or
Principal Amount Value
COMMON STOCKS
<S>
<C> <C> <C>
Banks - 9.8%
27,569 First Commerce Corp. $ 1,071,745
(a) 40,200 Imperial Bancorp 964,800
39,500 Walden Bancorp Inc. 1,510,875
Total banks 3,547,420
Capital goods - 15.4%
(a) 70,900 Anangel American
Shipping Holdings 567,200
(a) 91,600 Bucyrus International
Inc. 801,500
(a) 19,000 Eltron International
Inc. 382,375
(a) 52,600 ILC Technology Inc. 683,800
(a)270,000 Kaneb Services Inc. 877,500
80,500 M.C. Shipping Inc. 332,063
99,200 Simpson Industries Inc. 1,080,387
45,000 Walbro Corp. 821,250
Total capital goods 5,546,075
Closed end mutual funds - 4.3%
50,000 Latin American Discovery
Fund 625,000
83,500 Morgan Stanley Asia Pacific
Fund 814,125
9,200 New Germany Fund Inc. 123,050
Total closed end mutual funds 1,562,175
Communications - 3.5%
(a) 58,000 Centennial Cellular Corp. 703,250
(a) 52,000 Jones Intercable Inc. 552,500
Total communications 1,255,750
Consumer goods and services - 11.2%
14,500 Bob Evans Farms, Inc. 195,750
(a) 53,100 Congoleum Corp. 736,763
(a) 49,500 Department 56 Inc. 1,206,562
(a)100,000 Designs Inc. 562,500
(a) 81,000 Lechters Inc. 410,103
50,000 Lillian Vernon Corp. 612,500
(a) 33,500 Perrigo Co. 305,687
Total consumer goods and services 4,029,865
Insurance - 6.0%
24,000 Allied Group 783,000
52,200 Old Republic Int'l Corp.1,396,350
Total insurance 2,179,350
Natural resources -10.9%
(a) 30,000 Chieftain Int'l Inc. 780,000
25,500 Coflexip 669,375
18,000 Pogo Producing Co. 850,500
(a) 35,000 Seagull Energy Corp. 770,000
50,000 Snyder Oil Corp. 868,750
Total natural resources 3,938,625
Real estate - 1.8%
43,500 Town & Country Trust 636,187
Total real estate 636,187
Semiconductors - 15.4%
(a) 18,500 Atmel Corp. 612,813
(a) 52,800 C.P. Clare Corp. 528,000
(a) 34,700 Electroglas Inc. 559,537
5,200 Intel Corp. 680,878
(a) 15,000 Network Equipment
Technologies 247,500
(a) 45,000 Silicon Valley Group 905,625
(a) 76,000 Telcom Semiconductor Inc. 313,500
(a) 30,000 Tencor Instruments 791,250
(a) 22,000 Teradyne 536,250
(a) 16,000 Ultratech Stepper Inc. 380,000
Total semiconductors 5,555,353
Thrifts - 16.2%
22,000 American Bank of
Connecticut 616,000
(a) 10,000 California Federal
Savings Bank 245,000
(a) 5,600 California Federal
Savings - goodwill 78,400
22,000 Commercial Federal Corp.1,056,000
50,000 First Financial Corp. 1,225,000
(a) 71,000 Mechanics Savings Bank 1,118,250
57,500 Medford Savings Bank 1,480,625
Total thrifts 5,819,275
Total common stocks - 94.5%
(cost: $26,005,789) 34,070,075
SHORT-TERM TREASURY SECURITIES:
$800,000 U.S. Treasury Bills
- 5.16% Due 02/27/97 793,632
100,000 U.S. Treasury Bills
- 5.19% Due 03/06/97 99,103
900,000 U.S. Treasury Bills
- 5.22% Due 03/13/97 891,018
Total short-term treasury securities - 4.9%
(cost: $1,779,915) 1,783,753
Total investments - 99.4% -
(cost: $27,785,704) 35,853,828
Covered call options written - (0.1%)
Intel Corp. $140 expiring 04/18/97
(premiums received: $56,866)
(Contracts 52) (49,400)
Other assets less liabilities - 0.7% 236,221
Net assets - 100% $ 36,040,649
</TABLE>
Notes to Portfolio of Investments:
(a) Non-income producing security.
(b) Based on the cost of investments of $27,785,704 and premiums received
for options written of $56,866 for Federal income tax purposes at December
31, 1996, the aggregate gross unrealized appreciation was $8,754,872,
the aggregate gross unrealized depreciation was $679,282 and the net
unrealized appreciation of investments was $8,075,590.
See accompanying Notes to Financial Statements
<TABLE>
<CAPTION>
THE OMNI INVESTMENT FUND
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
ASSETS
<S> <C>
Investments, at value
(Cost: $27,785,704) $ 35,853,828
Cash 53,008
Receivables for investments sold 379,366
Receivable for capital shares sold 7,662
Dividends receivable 142,033
Interest receivable 207
Total assets 36,436,104
LIABILITIES
Options written, at value
(Premiums received: $56,866) 49,400
Payable for investments purchased 42,316
Payable for capital shares redeemed 12,546
Accrued expenses 10,000
Advisory fees payable 30,537
Dividends payable 250,656
Total liabilities 395,455
Net assets applicable to 2,186,549 shares outstanding,
equivalent to $16.48 per share $ 36,040,649
Net assets consist of:
Shares of beneficial interest,
$.01 par value 21,865
Additional paid-in capital 27,851,143
Undistributed net realized gains 75,831
Unrealized appreciation of investments
and options written 8,075,590
Undistributed net investment income 16,220
Net assets applicable to shares
outstanding $ 36,040,649
</TABLE>
See accompanying Notes to Financial Statements.
<TABLE>
<CAPTION>
THE OMNI INVESTMENT FUND
STATEMENT OF OPERATIONS
Year ended
December 31, 1996
<S> <C>
Investment income:
Dividends $ 495,456
Interest 209,855
Total investment income 705,311
Expenses:
Investment advisory fees 325,488
Custodian fees 10,934
Transfer agent fees 26,836
Regulatory fees 27,708
Legal fees 25,492
Auditing fees 23,000
Other expenses 41,367
Total expenses 480,825
Net investment income 224,486
Net realized and unrealized gain (loss) on investments:
Net realized gain on sales
of investments 3,595,804
Net realized loss on covered
call options written (153,312)
Net realized gain on
investments 3,442,492
Change in net unrealized appreciation
of investments 3,815,909
Net realized and unrealized gain
on investments 7,258,401
Net increase in net assets
resulting from operations $ 7,482,887
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
Year ended Year ended
December 31, 1996 December 31, 1995
<S> <C> <C>
Operations:
Net investment income $ 224,486 $ 175,346
Net realized gain on
investments 3,442,492 2,781,540
Change in net unrealized appreciation
of investments 3,815,909 3,049,072
Net increase in net assets resulting from
operations 7,482,887 6,005,958
Dividends to shareholders from:
Net investment income (208,266) (175,346)
Net realized gains (3,401,673) (2,804,377)
Net increase from capital share
transactions 335,177 10,536,459
Total increase in net assets 4,208,125 13,562,694
Net assets:
Beginning of year 31,832,524 18,269,830
End of year (including undistributed net investment
income of $16,220 and $0, respectively)
$ 36,040,649 $ 31,832,524
</TABLE>
<TABLE>
<CAPTION>
THE OMNI INVESTMENT FUND
FINANCIAL HIGHLIGHTS
Eleven mos.
Year ended December 31, ended
Dec. 31,
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987(a)
Per share operating peformance (b):
Net asset value at beginning of period
$14.57 $12.75 $13.99 $13.39 $11.39 $9.23 $12.19 $11.21 $10.06 $11.33
Income (loss) from investment operations:
Net investment income (loss)
0.12 0.09 (0.01) 0.03 0.09 0.14 0.28 0.23 0.24 0.21
Net realized and urealized gain (loss) on
investments
3.62 3.23 0.91 2.14 2.14 2.16 (2.95) 2.71 1.77 (0.29)
Total from investment operations
3.74 3.32 0.90 2.17 2.23 2.30 (2.67) 2.94 2.01 (0.08)
Dividends:
Dividends from net investment income
(0.11) (0.09) 0.00 (0.03) (0.10)(0.14) (0.29) (0.22) (0.24) (0.20)
Dividends from net realized gain on
investments
(1.72) (1.41) (2.14) (1.54) (0.13) 0.00 0.00 (1.74 (0.62) (0.99)
Total dividends
(1.83 (1.50) (2.14) (1.57) (0.23)(0.14) (0.29) (1.96) (0.86) (1.19)
Net asset value at end of period
$16.48 $14.57 $12.75 $13.99 $13.39 $11.39 $19.23 $12.19 $11.21 $10.06
Total Return (%):
25.58 26.07 6.74 16.25 19.59 25.01 (21.94) 26.44 20.09 (0.68)
Ratios to average net assets (%):
Expenses
1.48 1.64 1.43 1.31 1.41 1.52 1.84 1.78 1.44 1.69
Net investment income (loss)
0.69 0.64 (0.04) 0.18 0.73 1.24 2.34 1.85 2.33 1.87
Portfolio turnover rate (%)
69 90 125 108 105 130 146 118 103 189
Average commission rate paid per share
$0.1015 - - - - - - - - -
Total net assets
at end of period (in thousands)
$36,041 $18,270 $14,007 $9,839 $9,976
$31,833 $16,309 $11,940 $13,576 $6,748
</TABLE>
Note: (a) Effective October 20, 1987 the Fund became publicly registered
under the Investment Company Act of 1940. Prior thereto, its shares
were not publicly offered.
(b) Prior to December 31, 1994, the per share amounts have been
adjusted for a 10 for 1 share split which occurred September 30, 1994.
(c) Annualized.
Notes to Financial Statements / December 31, 1996
1. Significant accounting policies
The Omni Investment Fund (the -Fund') is a series of the Massachusetts
business trust also known as The Omni Investment Fund (the -Trust'),
registered under the Investment Company Act of 1940 as a diversified,
open-end management investment company. The investment objective of the
Fund is to seek capital appreciation by investing primarily in the common
stocks of companies that the Fund's investment advisor believes are
experiencing, or have the potential to experience, growth in revenues,
earnings or assets or companies that are undervalued relative to their
assets.
Security valuation
Investments are stated at value. Investments in securities traded on a
national securities exchange or reported on the Nasdaq System for which
last sale information is regularly reported are valued at the last reported
sales prices on their primary exchange or the Nasdaq System that day.
Unlisted securities and securities traded on the Nasdaq System for which
last sales prices are not regularly reported but for which over-the-counter
market quotations are readily available are valued at the mean of the last
quoted bid price and the last quoted asked price at the time of valuation,
or if no quoted bid or asked price is reported, on the basis of the mean
of bid and asked prices obtained from a dealer who maintains an active
market in that security. Unlisted debt securities or debt securities having
an inactive market are valued based upon the mean of bid and offered prices
obtained from dealers maintaining an active market in the security.
Securities not having readily available market quotations are valued at fair
value determined in good faith by the Board of Trustees. Other short-term
debt securities with a remaining maturity of more than 60 days are valued
at the mean of the bid and offered price obtained from a dealer which
maintains an active market in that security; and other short-term debt
securities (having a remaining maturity of 60 days or less) are valued at
cost, adjusted for amortization of premiums and accretion of discounts,
which approximates value.
Federal income taxes
The Fund's policy is to comply with the requirements of the Internal Revenue
Code that are applicable to regulated investment companies and, in the
manner provided therein, to distribute all of its taxable income to its
shareholders. Such provisions are being complied with and therefore no
federal income tax provision is required.
Distributions to shareholders
Distributions to shareholders are recorded by the Fund on the ex-dividend
date. Distributions of net investment income and capital gains are
determined in accordance with income tax regulations.
Fund share valuation
Fund shares are sold and redeemed on a continuous basis at net asset value.
On each day the New York Stock Exchange is open for trading, the net asset
value per share is determined (as of 4:00 p.m. New York time) by dividing
the total value of the Fund's investments and other assets, less liabiblites,
by the nubmer of fund shares outstanding.
Other
The Fund records security transactions on the trade date. Dividend income
is recognized on the ex-dividend date and interest income is recognized on
an accrual basis. Discounts on fixed income securities are amortized over
the life of the respective securities. Realized gains and losses from
investment transactions are reported on an identified cost basis.
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results may differ from those estimates.
2. Investments
Purchases and proceeds from sales of investments (excluding short-term
obligations) for the year ended December 31, 1996 were $19,779,745 and
$20,287,521, respectively.
3. Capital share transactions
The following table summarizes the activity in capital shares of the Fund:
<TABLE>
<CAPTION>
Year ended Year ended
December 31, 1996 December 31, 1995
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold 196,908 $3,119,256 677,474 $19,507,691
Shares issued in reinvestment of dividends from net
investment income and net realized gains
203,848 3,359,418 192,870 2,798,929
Total 400,756 6,478,674 870,344 12,306,620
Less shares redeemed 398,665 6,143,497 118,518 1,770,161
Net increase in shares
outstanding 2,091 $3,335,17 751,826 $10,536,459
</TABLE>
4. Investment advisory fees and other transactions with affiliates
The Fund pays advisory fees for investment management and advisory services
under a management agreement with Perkins, Wolf, McDonnell & Co. (PWM) that
provides for fees at an annual rate of 1% of average daily net assets,
payable monthly. During the year ended December 31, 1996, the Fund
incurred advisory fees of $325,488. Portfolio transactions for the Fund
have been executed through PWM, consistent with the Fund's policy of
obtaining the best price and execution. PWM acted as custodian for the
Fund's investments through December 31, 1996. Effective January 1, 1997
Investors Fiduciary Trust Company became the Fund's custodian and transfer
agent. For the year ended December 31, 1996, PWM received commissions of
$306,562 from purchases and sales of the Fund's portfolio investments and
received custodian fees of $10,934. During the year ended December 31,
1996, the Fund paid fees to its unaffiliated trustees of $4,350.
5. Covered call options written
The Fund may write call options on investments held in its portfolio.
Transactions in options written for the year ended December 31, 1996
were as follows:
<TABLE>
<CAPTION>
Number of Premiums
Contracts Received
<S> <C> <C>
Options outstanding at beginning
of year - -
Options written 278 $ 184,337
Options closed (226) (127,471)
Options outstanding at end of
year 52 $ 56,866
</TABLE>
The Fund may write covered call options to protect against market risk
due to market movements that may adversely effect the value of the Fund's
securities.
6. Other Matters
A special meeting of shareholders of the Fund has been scheduled for
February 13, 1997, at which shareholders will consider approval of a number
of actions facilitating the Fund becoming part of the Berger Funds family
of mutual funds, including the following:
(a) election as trustees of the Trust 10 new individuals who also serve as
trustees of other Berger Funds;
(b) approval of a new Investment Advisory Agreement with Berger Associates,
Inc. (-Berger'), pursuant to which the Fund will pay Berger a fee at the
annual rate of 0.90% of the Fund's average daily net assets for its services;
(c) approval of a new Sub-Advisory Agreement between Berger and PWM, pursuant
to which Berger will pay PWM a fee at the annual rate of 0.90% of the first
$75 million of average daily net assets of the Fund, 0.50% of the next $125
million, and 0.20% of any amount in excess of $200 million for sub-advisory
services;
(d) approval of amendments to the Trust's Declaration of Trust to permit
the establishment of multiple classes of shares.
If the foregoing matters are approved by shareholders, the Trust and the
Fund will implement the following additional arrangements: the Trust will
enter into an Administrative Services Agreement with Berger pursuant to
which Berger will be paid a fee at the annual rate of 0.01% of the Fund's
average daily net assets for administrative services, and enter into a
Distribution Agreement with Berger Distributors, Inc. (-BDI'), a
wholly-owned broker-dealer subsidiary of Berger, for BDI to act as the
principal underwriter
of the Fund. BDI will not be entitled to any compensation in connection
with its services under the Distribution Agreement. In addition, the Fund
will implement a multiple class share structure, with the Fund's existing
shares being designated as -Institutional Shares' and a new class of shares
known as -Investor Shares' being established. The Fund's multiple share
structure is set forth in a Rule 18f-3 Plan adopted by the Trustees under
the Investment Company Act of 1940. A Rule 12b-1 Plan for the Investor
Shares of the Fund will also be implemented, pursuant to which Berger
will be paid a fee of 0.25% per annum of the Fund's average daily net assets
attributable to the Investor Shares to finance activities primarily intended
to result in the sale of Investor Shares.
In addition, if the foregoing matters are implemented, the name of the
Fund will be changed to -Berger Small Cap Value Fund' and the name of the
Trust will be changed to -Berger Omni Investment Trust.'
TRUSTEES OF BERGER OMNI INVESTMENT TRUST
Michael Owen, Chairman--Dennis E. Baldwin--William M.B. Berger
Louis R. Bindner, P.E.--Katherine A. Cattanach--Lucy Black Creighton--
Paul R. Knapp--Gerard M. Lavin--Harry T. Lewis, Jr.--William Sinclaire
Officers:
Gerard M. Lavin, President
Kevin R. Fay, Vice President, Secretary and Treasurer
Craig D. Cloyed, Vice President
David J. Schultz, Assistant Treasurer
Susan G. Kohlman, Assistant Treasurer
Janice M. Teague, Assistant Secretary
Investment Advisor:
Berger Associates, Inc.
PO Box 5005
Denver, Colorado 80217
1-303-329-0200 or 1-800-333-1001
