<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 25, 1998
1933 Act File No. 33-15867
1940 Act File No. 811-4273
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 16 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 16 /X/
(Check appropriate box or boxes)
BERGER OMNI INVESTMENT TRUST
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(Exact Name of Registrant as Specified in Charter)
210 University Boulevard, Suite 900, Denver, Colorado 80206
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (303) 329-0200
---------------------------
Gerard M. Lavin, 210 University Boulevard, Suite 900, Denver, CO 80206
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(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 (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/X/ on January 28, 1999, 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: Shares of Beneficial Interest of
-----------------------------------------
The Berger Small Cap Value Fund - Institutional Shares
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<PAGE>
EXPLANATORY NOTE
This amendment to the Registration Statement of Berger Omni Investment
Trust contains the following:
One Prospectus for the Berger Small Cap Value Fund -- Institutional Shares
One Statement of Additional Information for the Berger Small Cap Value Fund --
Institutional Shares
One Part C
This amendment does not contain a Prospectus or Statement of Additional
Information for, nor affect any Prospectus or Statement of Additional
Information covering, the Berger Small Cap Value Fund -- Investor Shares.
<PAGE>
January 28, 1999
THE BERGER FUNDS
Prospectus
[WEST FORK PHOTO]
BERGER SMALL CAP
VALUE FUND ~ INSTITUTIONAL SHARES
The Securities and Exchange or determined whether this
Commission has not approved or prospectus is accurate or complete.
disapproved any shares offered in Anyone who tells you otherwise is
this prospectus as an investment, committing a crime.
<PAGE>
i
BERGER SMALL CAP VALUE FUND
INSTITUTIONAL SHARES
CONTENTS
This prospectus offers the class of shares designated as Institutional Shares
of the Berger Small Cap Value Fund. These shares are designed for pension and
profit-sharing plans, employee benefit trusts, endowments, foundations and
corporations, as well as high net worth individuals and financial
intermediaries, who are willing to maintain a minimum account balance of
$250,000.
<TABLE>
<S> <C>
BERGER SMALL CAP VALUE FUND -- INSTITUTIONAL SHARES............. 1
The Fund's Goal................................................. 1
Principal Investment Strategies................................. 1
Principal Risks................................................. 1
The Fund's Past Performance..................................... 2
Fund Expenses................................................... 3
INVESTMENT TECHNIQUES, SECURITIES AND THE ASSOCIATED RISKS...... 4
BUYING SHARES................................................... 7
SELLING (REDEEMING) SHARES...................................... 8
Exchanging Shares............................................... 9
Signature Guarantees/Special Documentation...................... 10
Your Share Price................................................ 10
Other Information About Your Account............................ 11
Distributions and Taxes......................................... 13
Tax-Sheltered Retirement Plans.................................. 14
MANAGEMENT AND INVESTMENT ADVICE................................ 14
Investment Manager.............................................. 14
Special Fund Structure.......................................... 15
FINANCIAL HIGHLIGHTS............................................ 16
</TABLE>
<PAGE>
1
BERGER SMALL CAP VALUE FUND
INSTITUTIONAL SHARES
THE FUND'S GOAL
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.
PRINCIPAL INVESTMENT STRATEGIES
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. In addition
to common stocks, the Fund may invest in other securities with equity features,
such as convertible securities, preferred stocks, warrants and rights. The
balance of the Fund may be invested in larger companies, government securities
or other short-term investments.
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 and foreign securities.
<PAGE>
2
BERGER SMALL CAP VALUE FUND
INSTITUTIONAL SHARES
See "Investment Techniques, Securities and the Associated Risks" later in
this prospectus for more information on risks.
THE FUND'S PAST PERFORMANCE
The information below shows the Fund's annual return for the ten-year period
through December 31, 1998. 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
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
89 26.43%
90 -21.92%
91 24.97%
92 19.61%
93 16.27%
94 6.70%
95 26.06%
96 25.60%
97 36.93%
98
</TABLE>
<TABLE>
<S> <C> <C>
Best
quarter: XX/XX/XX XX%
Worst
quarter: XX/XX/XX XX%
</TABLE>
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Russell 2000. While the
Fund does not seek to match the returns of the Russell 2000, this index is a
good indicator of small company stock market performance. You may not invest in
the Russell 2000 and unlike the Fund, it does not incur fees or charges.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C>
The Fund XX% XX% XX%
Russell 2000 XX% XX% XX%
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</TABLE>
<PAGE>
3
BERGER SMALL CAP VALUE FUND
INSTITUTIONAL SHARES
FUND EXPENSES
As a shareholder in the Fund, you do not pay any sales charges, redemption or
exchange fees.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES (DEDUCTED DIRECTLY FROM THE FUND)
<S> <C>
Management fee .90%
Other expenses .29%
Total Annual Fund Operating Expenses 1.19%
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</TABLE>
UNDERSTANDING EXPENSES
Annual Fund operating expenses are paid by the Fund. As a result, you pay for
them indirectly because they reduce the Fund's return. Fund expenses include
management fees and administrative costs such as shareholder recordkeeping and
reports, custodian and pricing services and registration fees.
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:
EXAMPLE COSTS
<TABLE>
<CAPTION>
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
<S> <C> <C> <C> <C>
Berger Small Cap Value Fund
Institutional Shares $ 121 $ 378 $ 654 $ 1,443
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</TABLE>
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the FDIC or any other government agency. The Fund is not a
complete investment program, but may to serve to diversify other types of
investments in your portfolio. There is no guarantee that the Fund will meet its
investment goal, and although you have the potential to make money, you could
also lose money by investing in the Fund.
<PAGE>
4
BERGER SMALL CAP VALUE FUND
INSTITUTIONAL SHARES
INVESTMENT TECHNIQUES, SECURITIES AND THE ASSOCIATED RISKS
BEFORE YOU INVEST...
in the Fund, 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.
The following glossary will help you further understand the risks the Fund
takes by investing in certain securities and investment techniques used by the
Fund. You may get more detailed information about the risks of investing in the
Fund in the Statement of Additional Information (SAI), including a discussion of
debt security ratings in Appendix A to the SAI.
BELOW INVESTMENT GRADE BONDS have ratings of BB (STANDARD & POOR'S) or Ba
(MOODY'S) or below. Bonds rated below investment grade are subject to greater
credit risk than investment grade bonds. Also called "high-yield bonds" or "junk
bonds." CREDIT, INTEREST RATE AND MARKET RISK
BORROWING refers to a loan of money from a bank or other financial
institution undertaken by the Fund for temporary or emergency reasons only. The
Fund will not borrow more than 5% of its total assets. LEVERAGE RISK
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. The Fund will not invest more than 5% of its total
assets in these securities. MARKET, LIQUIDITY AND INFORMATION RISKS
CONVERTIBLE SECURITIES(1) are debt or equity securities which may be
converted on specified terms into stock of the issuer. MARKET, INTEREST RATE AND
CREDIT RISKS
CORRELATION RISK occurs when the 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 contact may default or become unable to pay its obligations when due.
CURRENCY RISK happens when the Fund buys or sells a security denominated in
foreign currency. Foreign currencies "float" in value against the U.S. dollar.
Adverse changes in foreign currency value can cause investment losses when its
investments are converted to U.S. dollars.
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. The Fund is a diversified fund.
<PAGE>
5
BERGER SMALL CAP VALUE FUND
INSTITUTIONAL SHARES
FOREIGN SECURITIES are issued by companies located outside of the United
States. The 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. MARKET, CURRENCY, TRANSACTION,
LIQUIDITY, INFORMATION AND POLITICAL RISKS
HEDGING RISK comes into play when the Fund uses a security whose value is
based on an underlying security or index to "offset" its 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 SECURITIES are securities which by their nature cannot be sold
readily. The Fund will not invest more than 10% of its net assets in these
securities. MARKET, LIQUIDITY AND TRANSACTION RISKS
INFORMATION RISK means that information about a security or issuer might not
be available, complete, accurate or comparable.
INTEREST RATE RISK is the change in interest rates that 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.
INVESTMENT GRADE BONDS are rated BBB (STANDARD & POOR'S) or Baa (MOODY'S) or
above. INTEREST RATE, MARKET AND CREDIT RISKS
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. The 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.
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(2) 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.
<PAGE>
6
BERGER SMALL CAP VALUE FUND
INSTITUTIONAL SHARES
Options on securities indexes are similar, but settle in cash. The Fund will not
use more than 5% of its net assets for premiums to buy options. HEDGING, CREDIT,
CORRELATION AND LEVERAGE RISKS
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.
SECTOR FOCUS occurs when a significant portion of the Fund's assets are
invested in a relatively small number of related industries. The Fund will not
concentrate more than 25% of its total assets in any one industry. Sector focus
may increase both market and liquidity risk.(+) MARKET AND LIQUIDITY RISKS
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 the Fund appears under the heading "Principal
Investment Strategies." In general, the smaller the company, the greater its
risks.(+) MARKET, LIQUIDITY AND INFORMATION RISKS
SPECIAL SITUATIONS are companies about to undergo a structural, financial or
management change which may significantly affect the value of their
securities.(+) MARKET AND INFORMATION RISKS
TEMPORARY DEFENSIVE MEASURES may be taken when the 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. OPPORTUNITY RISK
TRANSACTION RISK means that the 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(2) 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. The Fund writes call options only if it already
owns the security (if it is "covered"). The Fund may only write call options up
to 10% of its net assets. OPPORTUNITY, CREDIT AND LEVERAGE RISKS
- ------------------------
1. The Fund has no minimum quality standards for convertible securities,
although it will not invest in defaulted securities. It also will not invest
20% or more of its assets in convertible securities rated below investment
grade or in unrated convertible securities that the advisor considers to be
below investment grade.
2. The Fund may use options only for hedging. Not more than 5% of the Fund's
net assets may be used for premiums for options, although the Fund may have
more at risk under these contracts than the premium. However, the 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.
+ The security or technique is emphasized by the Fund.
<PAGE>
7
BERGER SMALL CAP VALUE FUND
INSTITUTIONAL SHARES
BUYING SHARES
SEND NEW ACCOUNT APPLICATIONS TO
The Berger Funds
P.O. Box 419958
Kansas City, MO 64141-6958
OR FOR OVERNIGHT, CERTIFIED OR REGISTERED MAIL ONLY
The Berger Funds
330 West 9th Street, 1st Floor
Kansas City, MO 64105
<TABLE>
<S> <C>
Minimums:
Initial investment $ 250,000
Subsequent investments $ 1,000
Automatic investment
plan $ 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 WIRE OR ELECTRONIC FUNDS TRANSFER
Payment may be made from your bank to DST Systems, Inc.
Call (800) 960-8427 for current wire or electronic funds transfer
instructions.
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) 960-8427 for current wire or electronic funds transfer
instructions.
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 www.bergerfunds.com.
<PAGE>
8
BERGER SMALL CAP VALUE FUND
INSTITUTIONAL SHARES
BY AUTOMATIC INVESTMENT PLAN
To automatically purchase more shares on a regular basis, fill out the
Automatic Investment Plan section of the application.
Investments are transferred automatically from your bank account.
See details on the application.
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. IN TIMES OF EXTREME ECONOMIC OR MARKET
CONDITIONS, TRANSACTIONS BY TELEPHONE OR ONLINE MAY BE DIFFICULT.
IMPORTANT NOTES ABOUT PAYING FOR YOUR SHARES
Your check must be made payable to BERGER FUNDS, or it will not be accepted.
You may NOT purchase shares by cash, credit card, third-party checks or
checks drawn on foreign banks.
Subject to approval by the Fund, you may purchase Fund shares with liquid
securities that the Fund is eligible to purchase. These securities must have a
value that can be readily determined in accordance with the Fund's valuation
policies. You may pay for Fund shares with securities only if it is the
investment manager's intention to retain them in the Fund's portfolio. The Fund
may amend or terminate this practice at any time.
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 Fund reserves the right to reject any order and to waive minimums or
increase minimums following notice.
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.
Include any necessary Signature Guarantees. See "Signature Guarantees /
Special Documentation" below.
<PAGE>
9
BERGER SMALL CAP VALUE FUND
INSTITUTIONAL SHARES
BY TELEPHONE
Call (800) 960-8427.
BY ONLINE ACCESS
You will find us online at www.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 FUND.
BY SYSTEMATIC WITHDRAWAL PLAN
A systematic withdrawal plan may be established if you own shares worth at
least $5,000.
Shares may be redeemed automatically ($50 minimum) monthly, quarterly, semi-
annually or annually.
Call (800) 960-8427 for more information and forms.
IMPORTANT NOTES ABOUT PAYMENT FOR YOUR REDEEMED SHARES
Generally, payment for your redeemed shares will be sent 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.)
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.
EXCHANGING SHARES
Shares of the Fund may be exchanged for shares of any other publicly
available Berger Funds by calling (800) 960-8427. When exchanging shares:
Each account must be registered identically -- have the same signatures and
addresses.
Each fund must be legally eligible for sale in your state of residence.
You may exchange out of the Berger Funds up to four times per calendar year.
<PAGE>
10
BERGER SMALL CAP VALUE FUND
INSTITUTIONAL SHARES
You may exchange by telephone, online access or mail.
You are responsible for obtaining and reading the prospectus for the fund
into which you are exchanging.
Exchanges result in the sale of one fund's shares and the purchase of
another, normally resulting in a taxable event for you.
Exchanges into any new fund are subject to that fund's initial and subsequent
investment minimums.
SIGNATURE GUARANTEES / SPECIAL DOCUMENTATION
The Fund uses Signature Guarantees to protect you and the Fund from possible
fraudulent requests for redeemed shares. Your redemption request must be in
writing and accompanied by a Signature Guarantee if:
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 Fund reserves 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) 960-8427 or
write to The Berger Funds, P.O. Box 419958, Kansas City, MO 64141-6958.
YOUR SHARE PRICE
The price at which you buy, sell or exchange Fund shares is the share price
or net asset value (NAV). The Fund's share price is determined by adding the
value of the
<PAGE>
11
BERGER SMALL CAP VALUE FUND
INSTITUTIONAL SHARES
Fund's investments, cash and other assets, deducting liabilities, and then
dividing that value by the total number of the Fund's shares outstanding. Share
price is calculated separately for each class of Fund shares.
The 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 holidays
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 Fund calculates its share price, it values the securities it holds
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. 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.
The 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 Fund uses 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 Fund, and its 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.
<PAGE>
12
BERGER SMALL CAP VALUE FUND
INSTITUTIONAL SHARES
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.
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.
SHARE CERTIFICATES
You may request and receive share certificates. However, unless specifically
requested, your account will be maintained on a book-entry basis without issuing
share certificates to represent your shares. If you decide to hold share
certificates, you must endorse your certificates and send them back to the Fund
when you sell your shares.
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 Fund.
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 Fund through
those companies. The Fund's advisor or the Fund (if approved by its trustees)
may pay fees to these companies for their services. These companies may also be
appointed as agents for or authorized by the Fund to accept on its 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 Fund.
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. Similar adverse affects could result if computers do not properly
process information based on the conversion to the Euro, the new currency of the
European Union taking effect on January 1, 1999. The Fund's advisor is
addressing these issues for its computers and is getting reasonable assurances
from the Fund's other major service providers that they too are addressing these
issues to preserve smooth functioning of the Fund's 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 Fund's investments.
Improperly functioning computers may disrupt securities markets generally or
result in
<PAGE>
13
BERGER SMALL CAP VALUE FUND
INSTITUTIONAL SHARES
overall economic uncertainty. Individual companies may also be adversely
affected by the cost of fixing their computers, which could be substantial. The
Fund's investment manager considers these issues when evaluating investments for
the Fund.
REDEMPTIONS IN-KIND
The 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.
REDEMPTIONS BY THE FUND OF CERTAIN ACCOUNTS
To reduce its expenses, the Fund may involuntarily redeem the shares in your
account if your balance drops below $250,000 -- 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 the Fund undertakes any
involuntary redemption. During that time, you may buy more shares to bring your
account above the minimum. Shareholders owning shares in an account on or before
the following dates have lower minimum balance requirements for that account and
must maintain these minimum balances to avoid involuntary redemption:
<TABLE>
<S> <C>
February 19, 1998 $100,000
February 14, 1997 $ 500
</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 Fund makes two different
kinds of distributions, capital gains from the sale of portfolio securities and
net investment income from interest or dividends received on securities held by
the Fund. The Fund will distribute any net realized capital gains or investment
income annually, normally in December.
YOUR TAXES
You generally will owe tax on amounts distributed to you by the Fund whether
you reinvest them in additional shares or receive them in cash. Distributions of
gains from the sale of assets held by the 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 Fund 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.
<PAGE>
14
BERGER SMALL CAP VALUE FUND
INSTITUTIONAL SHARES
The Fund generally will not distribute net investment income, although any net
investment income generated as a by-product of managing the Fund's portfolio
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 Fund offers several tax-qualified retirement plans for individuals,
businesses and nonprofit organizations. For information about establishing a
Berger Funds 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) 259-2820 or write to The Berger Funds, P.O. Box 419958, Kansas
City, MO 64141-6958. 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 Fund at (800) 960-8427.
MANAGEMENT AND INVESTMENT ADVICE
INVESTMENT MANAGERS
The following companies provide day-to-day investment management and
administrative services to the Fund.
BERGER ASSOCIATES, INC. (210 University Blvd., Suite 900, Denver, CO 80206)
is the Fund's investment advisor. Berger Associates serves as investment
advisor, sub-advisor, administrator or sub-administrator to mutual funds and
institutional investors. Berger Associates has been in the investment advisory
business for over 20 years. When acting as investment advisor, Berger Associates
is responsible for managing the investment operations. Berger Associates
receives an investment advisory fee at the annual rate of 0.90% of the Fund's
average daily net assets. Berger Associates also provides administrative
services to the Fund.
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.
<PAGE>
15
BERGER SMALL CAP VALUE FUND
INSTITUTIONAL SHARES
Robert H. Perkins has been the investment manager for the Berger Small Cap
Value Fund since the Fund's inception. Mr. 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. Thomas Perkins assumed co-management of the Fund in January 1999.
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 the Fund has exceeded 100% per year and anticipates that
it could exceed 100% in the future. A turnover rate of 100% means the securities
owned by the Fund were replaced once during the year. Higher turnover rates may
result in higher brokerage costs to the Fund and in higher net taxable gains for
you as an investor. The Fund's portfolio turnover rate can be found under the
heading "Financial Highlights."
SPECIAL FUND STRUCTURE
MULTI-CLASS. The Fund currently has two classes of shares. The Institutional
Shares are offered through this prospectus. The Investor Shares are designed for
the general public and are offered through a separate prospectus. Each class of
shares has its own expenses so that share price, performance and distributions
will differ between classes. The 12b-1 plan adopted by the Berger Small Cap
Value Fund applies only to the Investor Shares. For more information on Investor
Shares, please call (800) 259-2820. For more information on the multi-class fund
structure, see the SAI.
<PAGE>
16
BERGER SMALL CAP VALUE FUND
INSTITUTIONAL SHARES
FINANCIAL HIGHLIGHTS
The financial highlights will help you understand the Fund's financial
performance for the periods shown. Certain information reflects financial
results for a single Fund share. Total return shows you how much your investment
in the Fund increased or decreased during each period, assuming you reinvested
all dividends and distributions. PricewaterhouseCoopers LLP, independent
accountants, audited this information. Their report is included in the Fund's
annual report, which is available without charge upon request.
BERGER SMALL CAP VALUE FUND -- INSTITUTIONAL SHARES
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS PRESENTED
<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED YEARS ENDED DECEMBER 31,
SEPTEMBER 30, SEPTEMBER 30, ------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 22.33 $ 16.48 $ 14.57 $ 12.75 $ 13.99
------- ------- -------- -------- --------
FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.45 0.07 0.12 0.09 (0.01)
Net realized and unrealized gains
(losses) on investments and
foreign currency income (2.55) 5.78 3.62 3.23 0.91
------- ------- -------- -------- --------
Total from investment operations (2.10) 5.85 3.74 3.32 0.90
------- ------- -------- -------- --------
LESS DIVIDENDS AND DISTRIBUTIONS
Dividends (from net investment
income) (0.23) -- (0.11) (0.09) --
Distributions (from capital
gains) (2.37) -- (1.72) (1.41) (2.14)
------- ------- -------- -------- --------
Total dividends and distributions (2.60) -- (1.83) (1.50) (2.14)
------- ------- -------- -------- --------
Net asset value, end of period $ 17.63 $ 22.33 $ 16.48 $ 14.57 $ 12.75
------- ------- -------- -------- --------
------- ------- -------- -------- --------
Total Return(1) (10.65)% 33.50% 25.58% 26.07% 6.74%
------- ------- -------- -------- --------
------- ------- -------- -------- --------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $92,787 $58,450 $ 36,041 $ 31,833 $ 18,270
Ratio of net income (loss) to
average net assets 1.26% 0.63%(2) 0.69% 0.64% (0.04)%
Gross expense ratio to average
net assets 1.19% 1.34%(2) 1.48% 1.64% 1.43%
Portfolio turnover rate 69% 81% 69% 90% 125%
</TABLE>
1. Total return not annualized for periods of less than one full year.
2. Annualized.
<PAGE>
<TABLE>
<C> <S> <C> <C> <C>
FOR MORE
INFORMATION
Additional infor- The SAI is incorpo-
mation about the rated into this
Fund's investments prospectus by refer-
is available in its ence, which means Text-only versions
semi-annual and that it is of all Fund
annual reports to considered to be documents can be
shareholders. The part of the viewed online or
Fund's annual report prospectus. downloaded from the
contains a You can get free SEC's web site at
discussion of the copies of the annual www.sec.gov.
market conditions and semi-annual You can also obtain
and investment reports and the SAI, copies by visiting appropriate fee to
strategies that request other infor- the SEC's Public the SEC's Public
affected its mation or get Reference Room in Reference Section,
performance over the answers to your Washington DC. For Washington, DC
past year. questions about the information on the 20549-6009.
You may wish to read Fund by writing or operation of the Investment Company
the Statement of calling the Fund at: Public Reference Act File Numbers:
Additional Infor- The Berger Funds Room, call Berger Omni
mation (SAI) for P.O. Box 419958 (800) SEC-0330. Investment Trust
[BERGER MOUNTAIN LOGO] more information on Kansas City, MO Copies of documents 811-4273
the Fund and the 64141-6958 may also be obtained Berger Small Cap
Together we can securities it (800) 259-2820 by sending your Value Fund -- Insti-
move mountains-RegisteredTrademark- invests in. www.bergerfunds.com request and the tutional Shares
</TABLE>
<PAGE>
BERGER SMALL CAP VALUE FUND
(A SERIES OF BERGER OMNI INVESTMENT TRUST)
INSTITUTIONAL SHARES
STATEMENT OF ADDITIONAL INFORMATION
SHAREHOLDER SERVICES: 1-800-960-8427
This Statement of Additional Information ("SAI") about the Berger Small Cap
Value Fund (the "Fund") Institutional Shares is not a prospectus. It relates to
the Prospectus describing the Institutional Shares of the Fund, dated January
28, 1999, as it may be amended or supplemented from time to time, which may be
obtained by writing the Fund at P.O. Box 5005, Denver, Colorado 80217, or
calling 1-800-706-0539.
This SAI is about the class of shares of the Fund designated as
Institutional Shares. Institutional Shares are designed for pension and
profit-sharing plans, employee benefit trusts, endowments, foundations and
corporations, as well as high net worth individuals, who are willing to maintain
a minimum account balance of $250,000. Shares of the Fund may be offered
through certain financial intermediaries that may charge their customers
transaction or other fees with respect to the customers' investment in the Fund.
Institutional Shares are also made available for purchase and dividend
reinvestment to all holders of the Fund's shares as of February 14, 1997, when
all the Fund's then outstanding shares were designated as Institutional Shares,
subject to a minimum account balance of $500.
The Fund is a series of Berger Omni Investment Trust, a Massachusetts
business trust (the "Trust"). Prior to February 14, 1997, the Fund and the
Trust were known as The Omni Investment Fund.
The financial statements of the Fund for the fiscal year ended September
30, 1998, and the related Report of Independent Accountants on those statements,
are incorporated into this SAI by reference from the Fund's 1998 Annual Report
to Shareholders dated September 30, 1998. A copy of that Annual Report is
available, without charge, upon request, by calling 1-800-333-1001.
JANUARY 28, 1999
<PAGE>
TABLE OF CONTENTS
&
CROSS-REFERENCES TO PROSPECTUS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SECTION PAGE CROSS-REFERENCES TO
NO. RELATED DISCLOSURES
IN PROSPECTUS
- --------------------------------------------------------------------------------
<S> <C> <C>
Introduction 1 Table of Contents
- --------------------------------------------------------------------------------
1. Portfolio Policies of the Fund 1 Berger Funds;
Investment Techniques,
Securities and the Associated
Risks
- --------------------------------------------------------------------------------
2. Investment Restrictions 8 Berger Funds;
Investment Techniques,
Securities and the Associated
Risks
- --------------------------------------------------------------------------------
3. Management of the Fund 10 Organization of the Berger
Funds Family
- --------------------------------------------------------------------------------
4. Investment Advisor 13 Organization of the Berger
Funds Family
- --------------------------------------------------------------------------------
5. Expenses of the Fund 16 Berger Funds;
Organization of the Berger
Funds Family; Financial
Highlights for the Berger Funds
Family
- --------------------------------------------------------------------------------
6. Brokerage Policy 18 Organization of the Berger
Funds Family
- --------------------------------------------------------------------------------
7. Purchase of Shares in the Fund 20 Buying Shares; Exchanging
Shares
- --------------------------------------------------------------------------------
8. Net Asset Value 21 Your Share Price
- --------------------------------------------------------------------------------
9. Income Dividends, Capital Gains 22 Distributions and Taxes
Distributions and Tax Treatment
- --------------------------------------------------------------------------------
10. Suspension of Redemption Rights 24 Other Information About Your
Account
- --------------------------------------------------------------------------------
11. Tax-Sheltered Retirement Plans 24 N/A
- --------------------------------------------------------------------------------
12. Exchange Privilege 24 Exchanging Shares
- --------------------------------------------------------------------------------
13. Performance Information 25 Financial Highlights for the
Berger Funds Family
- --------------------------------------------------------------------------------
14. Additional Information 26 Organization of the Berger
Funds Family; Special Fund
Structures
- --------------------------------------------------------------------------------
Financial Statements 29 Financial Highlights
- --------------------------------------------------------------------------------
</TABLE>
-i-
<PAGE>
INTRODUCTION
The Berger Small Cap Value Fund (the "Fund") is a mutual fund, or to use a
more technical term, an open-end, management investment company. The Fund is a
diversified fund. The Fund's investment objective is capital appreciation.
1. INVESTMENT STRATEGIES AND RISKS OF THE FUND
The Prospectus discusses the investment objective (goal) of the Fund and
the principal investment strategies employed to achieve that objective. It also
describes the principal risks of investing in the Fund.
This section contains supplemental information concerning the types of
securities and other instruments in which the Fund may invest, the investment
policies and portfolio strategies that the Fund may utilize and certain risks
attendant to those investments, policies and strategies.
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, the Fund 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. The
Fund will not 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 Fund will consider the
security as rated in the higher category. If nonconvertible securities
purchased by the Fund are downgraded to below investment grade following
purchase, the trustees of the Fund, in consultation with the Fund's 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 fluctuate 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 the Fund. Conversely,
during periods of rising interest rates, the value of fixed-income securities
held by the 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.
-1-
<PAGE>
CONVERTIBLE SECURITIES. The Fund may also purchase debt or equity
securities which are convertible into common stock when the 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 Fund 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 sub-advisor. The Fund has 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 Fund will not invest in any security in default at the
time of purchase and the Fund 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 the Fund are
downgraded following purchase, or if other circumstances cause 20% or more of
the Fund's assets to be invested in convertible securities rated below
investment grade, the trustees of the Fund, in consultation with the
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.
SECURITIES OF SMALLER COMPANIES. The Fund 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.
SECTOR FOCUS. A significant portion of the Fund's assets may be invested
in a relatively small number of related industries. However, the Fund will not
concentrate 25% or more of its total assets in any one industry. Sector focus
may increase both market risk (share price volatility) and liquidity risk.
SECURITIES OF COMPANIES WITH LIMITED OPERATING HISTORIES. The Fund may
invest in securities of companies with limited operating histories. The Fund
considers 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.
FOREIGN SECURITIES. The Fund may invest in foreign securities, which may
be traded in foreign markets and denominated in foreign currency. The Fund's
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).
-2-
<PAGE>
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
Fund. 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 the 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. The 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, the Fund might have greater
difficulty taking appropriate legal action with respect to foreign investments
in non-U.S. courts than with respect to domestic issuers in U.S. courts, which
may heighten the risk of possible losses through the holding of securities by
custodians and securities depositories in foreign countries.
When the Fund is 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 Fund 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 the 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 SECURITIES. The Fund is authorized to invest in securities which
are illiquid or not readily marketable because, based upon their nature or the
market for such securities, no ready market is available. However, the Fund
will not purchase any such security, the purchase of which would cause the Fund
to invest more than 10% of its net assets, measured at the time of purchase, in
illiquid securities. Investments in illiquid securities involve certain risks
to the extent that the Fund may be
-3-
<PAGE>
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. If securities
become illiquid following purchase or other circumstances cause more than 10% of
the Fund's net assets to be invested in illiquid securities, the trustees of the
Fund, in consultation with the Fund's sub-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.
REPURCHASE AGREEMENTS. The 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 the 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 the Fund and is unrelated to the interest rate on the underlying
instrument. In these transactions, the securities acquired by the 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 trustees will establish
guidelines and standards for review by the sub-advisor of the creditworthiness
of any bank, broker or dealer party to a repurchase agreement with the Fund.
The Fund will not enter into a repurchase agreement maturing in more than seven
days if as a result more than 10% of the Fund's net assets would be invested in
such repurchase agreements and other illiquid securities.
These transactions must be fully collateralized at all times by debt
securities (generally a security issued or guaranteed by the U.S. Government or
an agency thereof, a banker's acceptance or a certificate of deposit), but
involve certain risks, such as credit risk to the Fund if the other party
defaults on its obligation and the Fund is delayed or prevented from 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, the 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 the 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 the 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 Fund expects that these risks can be controlled through
careful monitoring procedures.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Fund may purchase and
sell securities on a when-issued or delayed delivery basis. However, the Fund
currently does not intend 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,
equity obligations of issuers eligible for investment by the 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 the 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 the
Fund until it receives delivery or payment from the other party to the
transaction.
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<PAGE>
When the 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.
SPECIAL SITUATIONS. The Fund may also invest in special situations, that
is, in common stocks of companies that have recently experienced or are
anticipated to experience a significant change in structure, management,
products or services. Examples of special situations are companies being
reorganized or merged, companies having unusual new products, or which enjoy
particular tax advantages, or companies that are run by new management or may 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
issuers and their circumstances. In addition, stocks of companies in special
situations may be more volatile, since the market value of these stocks may
decline if an anticipated event or benefit does not materialize.
HEDGING TRANSACTIONS. As described in the Prospectus, the Fund is
authorized to make limited use of certain types of 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 the Fund's securities or the
price of securities that the Fund is considering purchasing. The utilization of
options is also subject to policies and procedures which may be established by
the trustees from time to time. A hedging transaction may partially protect the
Fund from a decline in the value of a particular security or its portfolio
generally, although hedging may also limit the 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. In addition, hedging
transactions do not eliminate fluctuations in the prices of the underlying
securities the Fund owns or intends to acquire.
Use of these instruments by the Fund involves the potential for a loss
that, in the case of a call option written by the Fund, may exceed the premium
received for the option. However, the 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. To help ensure that the Fund will be able to meet its
obligations under options written by the 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 the Fund utilizing options are: (a) losses
resulting from market movements not anticipated by the Fund; (b) possible
imperfect correlation between movements in the prices of options and movements
in the prices of the securities or positions hedged or used to cover such
positions; (c) lack of assurance that a liquid secondary market will exist for
any particular 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; and (d) 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.
The following is additional information concerning the options which the
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 premiums paid for the purchase
of options. In addition, the Fund may only write call options that are covered
and only up to 10% of the Fund's net assets. The following information should
be read in conjunction with the information concerning the Fund's use of options
and the risks of such instruments contained in the Prospectus.
-5-
<PAGE>
OPTIONS ON SECURITIES AND SECURITIES INDICES. The Fund 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 the 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 the 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 the 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 the 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 the Fund desires to sell a particular security from
the Fund's portfolio on which the Fund has written a call option, the Fund will
effect a closing transaction prior to or concurrent with the sale of the
security. However, a writer may not effect a closing purchase transaction after
being notified of the exercise of an option. An investor who is the holder of
an exchange-traded option may liquidate its position by effecting a "closing
sale transaction." This is accomplished by selling an option of the same series
as the option previously bought. There is no guarantee that either a closing
purchase or a closing sale transaction can be effected.
The 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 the Fund would have to exercise the
-6-
<PAGE>
options in order to realize any profit. If the 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 the 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.
The 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 the 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. The 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 the 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 the
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 Fund will generally invest may be imperfect, the Fund expects,
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 the 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.
TEMPORARY DEFENSIVE MEASURES. The 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 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, the Fund could miss the
opportunity to participate in any stock or bond market
-7-
<PAGE>
advances that occur during those periods, which the Fund might have been able to
participate in if it had remained more fully invested.
PORTFOLIO TURNOVER. The portfolio turnover rates of the Fund are shown in
the Financial Highlights table included in the Prospectus. The annual portfolio
turnover rates of the Fund 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 Fund anticipates that its
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 may increase
as a result of large amounts of purchases and redemptions of shares of the Fund
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 Fund. The existence of a high portfolio turnover rate
has no direct relationship to the tax liability of the Fund, although sales of
certain stocks will lead to realization of gains, and, possibly, increased
taxable distributions to shareholders. The Fund's brokerage policy is discussed
further below under Section 6--Brokerage Policy, and additional information
concerning income taxes is located under Section 9--Income Dividends, Capital
Gains Distributions and Tax Treatment.
2. INVESTMENT RESTRICTIONS
The Fund has adopted certain fundamental and non-fundamental restrictions
on its investments and other activities. 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
trustees without shareholder vote.
The following fundamental restrictions apply to the 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-
<PAGE>
(8) Loan cash or portfolio securities, except in connection with the
acquisition of debt securities which the Fund's investment policies and
restrictions permit it to purchase;
(9) Borrow money in excess of 5% of the value of its assets and, then,
only as a temporary measure for extraordinary or emergency purposes;
(10) Pledge, mortgage or hypothecate any of its assets to secure a debt;
(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; or
(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 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.
-9-
<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.
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 Fund.
3. MANAGEMENT OF THE FUND
The Fund is supervised by trustees who are responsible for major decisions
about the Fund's policies and overall Fund oversight. The Fund's board hires
the companies that run day-to-day Fund operations, such as the investment
advisor, administrator, transfer agent and custodian.
The trustees and executive officers of the Fund are listed below, together
with information which includes their principal occupations during the past five
years and other principal business affiliations.
MICHAEL OWEN, 412 Reid Hall, Montana State University, Bozeman, MT 59717,
DOB: 1937. Since 1994, Dean, and from 1989 to 1994, a member of
the Finance faculty, of the College of Business, Montana State
University. Self-employed as a financial and management
consultant, and in real estate development. Formerly (1976-1989),
Chairman and Chief Executive Officer of Royal Gold, Inc. (mining).
Chairman of the Board of Berger 100 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.
* GERARD M. LAVIN, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1942. President and a director of Berger 100 Fund and Berger
Growth and Income Fund, and President and a trustee of Berger
Investment Portfolio Trust and Berger Omni Investment Trust, since
February 1997. President and a trustee of Berger/BIAM Worldwide
Portfolios Trust and Berger/BIAM Worldwide Funds Trust since their
inception in May 1996. President and a trustee of Berger
Institutional Products Trust since its inception in October 1995.
President and a director since April 1995 of Berger Associates, Inc.
Member and Chairman of the Board of Managers and Co-Chief Executive
Officer on the Management Committee of BBOI Worldwide LLC since
November 1996. President and a director of West Side Investments,
Inc. (investments), a wholly-owned subsidiary of DST Systems, Inc.,
since February 1998. Formerly, a Vice President of DST Systems, Inc.
(data processing) from July 1995 to February 1998; President and Chief
Executive Officer of Investors Fiduciary Trust Company (banking) from
February 1992 to March 1995; and Chief Operating Officer of SunAmerica
Asset Management Co. (money management) from January 1990 to February
1992.
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 100 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 M. B. BERGER, 210 University Boulevard, Suite 900, Denver, CO
80206, DOB: 1925. Director and, formerly, President (1974-1994) of
Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger
Investment Portfolio Trust since its inception in August 1993
-10-
<PAGE>
(Chairman of the Trustees through November 1994). Trustee of Berger
Institutional Products Trust since its inception in October 1995.
Trustee of Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide
Portfolios Trust since their inception in May 1996. Trustee of Berger
Omni Investment Trust since February 1997. Chairman (since 1994) and
a Director (since 1973) and, formerly, President (1973-1994) of Berger
Associates.
LOUIS R. BINDNER, 1075 South Fox, Denver, CO 80223, DOB: 1925. President,
Climate Engineering, Inc. (building environmental systems). Director
of Berger 100 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 100 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.
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). Since February
1998, Vice President and a director 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 100 Fund and Berger Growth and Income Fund. Trustee of
Berger Investment Portfolio Trust, Berger Institutional Products
Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide
Portfolios Trust and Berger Omni Investment Trust.
HARRY T. LEWIS, JR., 370 17th Street, Suite 3560, Denver, CO 80202, DOB:
1933. Self-employed as a private investor. Formerly (1981-1988),
Senior Vice President, Rocky Mountain Region, of Dain Bosworth
Incorporated and member of that firm's Management Committee. Director
of J.D. Edwards & Co. (computer software company) since 1995.
Director of Berger 100 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 (cattle company), and private investor.
Director of Berger 100 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.
* JANICE M. TEAGUE, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1954. Vice President and Secretary (since November 1998) and
Assistant Secretary (September 1996 to November 1998) of the Berger
Funds. Vice President (since December 1997) and Assistant Secretary
(September 1996 through December 1997) with Berger Associates.
-11-
<PAGE>
Vice President and Secretary with Berger Distributors, Inc., since
August 1998. Formerly, self-employed as a business consultant from
June 1995 through September 1996, Secretary of the Janus Funds from
January 1990 to May 1995 and Assistant Secretary of Janus Capital
Corporation from October 1989 to May 1995.
* DAVID J. SCHULTZ, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1950. Vice President and Treasurer (since November 1998) and
Assistant Treasurer (September 1996 to November 1998) of the Berger
Funds. Vice President (since February 1997) and Controller (since
August 1994) with Berger Associates. Chief Financial Officer and
Treasurer (since May 1996), Assistant Secretary (since August 1998)
and Secretary (May 1996 to August 1998) with Berger Distributors, Inc.
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 Associates. Chief Compliance Officer
with Berger Distributors, Inc., 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 Associates.
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 the
Fund and of the Fund's advisor or sub-advisor.
The trustees of the Fund have adopted a trustee retirement age of 75 years.
TRUSTEE COMPENSATION
The officers of the Fund received no compensation from the Fund during the
fiscal year ended September 30, 1998. However, trustees of the Fund who are
not "interested persons" of the Fund or its advisor or sub-advisor are
compensated for their services according to a fee schedule, allocated among the
Berger Funds. Neither the officers of the Fund nor the trustees receive any
form of pension or retirement benefit compensation from the Fund.
Set forth below is information regarding compensation paid or accrued
during the fiscal year ended September 30, 1998, for each current trustee of the
Fund as a director or trustee of the Berger Funds.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NAME AND POSITION AGGREGATE AGGREGATE
WITH BERGER FUNDS COMPENSATION FROM COMPENSATION(1)
THE FUND FROM
ALL BERGER FUNDS(2)
- --------------------------------------------------------------------------------
<S> <C> <C>
Dennis E. Baldwin(3) $2,317 $47,000
- --------------------------------------------------------------------------------
William M.B. Berger(3),(4) $0 $0
- --------------------------------------------------------------------------------
-12-
<PAGE>
- --------------------------------------------------------------------------------
Louis R. Bindner(3) $2,296 $46,400
- --------------------------------------------------------------------------------
Katherine A. Cattanach(3) $2,317 $47,000
- --------------------------------------------------------------------------------
Lucy Black Creighton(3),(6) $294 $8,200
- --------------------------------------------------------------------------------
Paul R. Knapp(3) $2,317 $47,000
- --------------------------------------------------------------------------------
Gerard M. Lavin(3),(4),(5) $0 $0
- --------------------------------------------------------------------------------
Harry T. Lewis(3) $2,317 $47,000
- --------------------------------------------------------------------------------
Michael Owen(3) $2,810 $57,000
- --------------------------------------------------------------------------------
William Sinclaire(3) $2,296 $46,400
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
(1) 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.
(2) Includes the Berger 100 Fund, the Berger Growth and Income Fund, the
Berger Investment Portfolio Trust (five series), the Berger Institutional
Products Trust (four series), the Berger/BIAM Worldwide Portfolios Trust (one
series), the Berger/BIAM Worldwide Funds Trust (three series) and the Berger
Omni Investment Trust (one series). Aggregate compensation figures do not
include first-year estimates for the Berger Mid Cap Value Fund, a series of the
Berger Investment Portfolio Trust which commenced operations in August 1998.
(3) Director of Berger 100 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.
(4) Interested person of the Fund or the Fund's advisor or sub-advisor.
(5) President of Berger 100 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.
(6) Resigned as a director and trustee effective November 1997.
Trustees may elect to defer receipt of all or a portion of their fees
pursuant to a fee deferral plan adopted by certain of the Berger 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 trustee for this purpose. Pursuant to
an SEC exemptive order, those Berger Funds that have adopted the plan are
permitted to purchase shares of the designated funds in order to offset their
obligation to the 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. The
obligation of a Berger Fund to make payments of deferred fees under the plan is
a general obligation of that fund.
As of November 18, 1998, the current officers and trustees of the Fund as
a group owned of record or beneficially less than 1% of the outstanding shares
of the Fund and the Trust.
4. INVESTMENT ADVISOR AND SUB-ADVISOR
INVESTMENT ADVISOR
The investment advisor to the Fund is Berger Associates, Inc. (the
"Advisor" or "Berger Associates"), 210 University Boulevard, Suite 900, Denver,
CO 80206. Berger Associates became the Fund's investment advisor on February
14, 1997, following shareholder approval of a new Investment Advisory Agreement
between the Fund and the Advisor. The Advisor is responsible for managing the
investment operations of the Fund and the composition of its investment
portfolio. The Advisor is permitted to engage a sub-advisor for the Fund. The
Advisor also acts as the Fund's administrator and
-13-
<PAGE>
is responsible for such functions as monitoring the Fund's compliance with
all applicable federal and state laws.
The Advisor has been in the investment advisory business for over 20
years. It serves as investment advisor or sub-advisor to mutual funds and
institutional investors and had assets under management of approximately $3.0
billion as of September 30, 1998. Berger Associates is a wholly-owned
subsidiary of Kansas City Southern Industries, Inc. ("KCSI"). KCSI is a
publicly traded holding company with principal operations in rail
transportation, through its subsidiary The Kansas City Southern Railway Company,
and financial asset management businesses. KCSI also owns approximately 41% of
the outstanding shares of DST Systems, Inc. ("DST"), a publicly traded
information and transaction processing company which acts as the Fund's
sub-transfer agent.
THE SUB-ADVISOR
Perkins, Wolf, McDonnell & Company (the "Sub-Advisor" or "PWM"), 53 West
Jackson Boulevard, Suite 818, Chicago, Illinois 60604, has been engaged as the
Fund's investment sub-advisor. The Sub-Advisor 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. The
Sub-Advisor is a member of the National Association of Securities Dealers, Inc.
(the "NASD") and, in 1984, became registered as an investment adviser with the
SEC.
PWM was the Fund's investment advisor 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 the Advisor and the Sub-Advisor. PWM has also
been the investment sub-advisor 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 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.
INVESTMENT ADVISORY AGREEMENT AND SUB-ADVISORY AGREEMENT
Under the Investment Advisory Agreement between the Advisor and the Fund,
the Advisor is responsible for managing the investment operations of the Fund
and the composition of its investment portfolio. Under the Investment Advisory
Agreement, the Advisor is compensated for its services to the Fund by the
payment of a fee at the annual rate of 0.90% (.90 of 1%) of the average daily
net assets of the Fund. The 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 hereunder and except to the extent
otherwise provided by law.
The Investment Advisory Agreement will continue in effect until April
1999, 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
Sub-Advisor. The 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.
-14-
<PAGE>
Under the Sub-Advisory Agreement between the Advisor and the Sub-Advisor,
the Sub-Advisor is responsible for day-to-day investment management of the Fund.
The Sub-Advisor manages the investments in the Fund 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 of the Fund. The Fund pays no fees directly to the Sub-Advisor. The
Sub-Advisor will receive 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. The
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.
The Sub-Advisory Agreement will continue in effect until April 1999, 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 Agreement is subject to termination by the Fund or the
Sub-Advisor on 60 days' written notice, and terminates automatically in the
event of its assignment and in the event of termination of the Investment
Advisory Agreement.
OTHER ARRANGEMENTS BETWEEN THE ADVISOR AND SUB-ADVISOR
The Advisor and Sub-Advisor 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, the Sub-Advisor agreed that, so
long as Berger Associates acts as the Fund's Advisor and PWM provides
sub-advisory or other services in connection with the Fund, the Sub-Advisor will
not manage or provide advisory services to any registered investment company
that is in direct competition with the Fund.
The November 18 Agreement also provides that at the end of the first five
years under the Sub-Advisory Agreement (or at such earlier time if the
Sub-Advisory Agreement is terminated or not renewed by the trustees other than
for cause), Berger Associates and PWM will enter into a consulting agreement for
PWM to provide consulting services to Berger Associates 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 Associates 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.
TRADE ALLOCATIONS
Investment decisions for the Fund and other accounts advised by the
Advisor are made independently with a view to achieving each of their respective
investment objectives and after consideration of such factors as their current
holdings, availability of cash for investment and the size of their investments
generally. However, certain investments may be appropriate for the Fund and one
or more such accounts. If the Fund and other accounts advised by the Advisor
are contemporaneously engaged in the purchase or sale of the same security, the
orders may be aggregated and/or the transactions averaged as to price and
allocated equitably to the Fund and each participating account. While in some
cases, this policy might adversely affect the price paid or received by the Fund
or other participating accounts, or the size of the position obtained or
liquidated, the Advisor will aggregate
-15-
<PAGE>
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 Associates and PWM each permit their directors, officers,
employees and other access persons (as defined below) ("covered persons") to
purchase and sell securities for their own accounts in accordance with
provisions governing personal investing in their respective firm Codes of
Ethics. The Codes require all covered persons to conduct their personal
securities transactions in a manner which does not operate adversely to the
interests of the Fund or the firms' other advisory clients. Directors and
officers of the firms (including those who also serve as trustees of the Fund),
investment personnel and other designated covered 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 relevant Code.
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 relevant Code 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 Fund.
In addition to the pre-clearance requirements described above, the Codes
subject those covered persons deemed to be access persons to various trading
restrictions and reporting obligations. All reportable transactions are
reviewed for compliance with the relevant Code. Those covered persons also may
be required under certain circumstances to forfeit their profits made from
personal trading. The Codes are administered by the respective firms and the
provisions of the Codes are subject to interpretation by and exceptions
authorized by their respective boards of directors.
5. EXPENSES OF THE FUND
Under the Investment Advisory Agreement, the Fund has agreed to
compensate Berger Associates for its investment advisory services to the Fund by
the payment of a fee at the annual rate of 0.90% (.90 of 1%) of the average
daily net assets of the Fund. The fee is accrued daily and payable monthly.
In addition to paying an investment advisory fee to Berger Associates,
the Fund pays all of its expenses not assumed by Berger Associates, 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 trustees who are not interested persons of Berger
Associates, 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 the Fund. The 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 the
Fund, Berger Associates 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. The
Fund pays Berger Associates a fee at an annual rate of 0.01% (1/100 of 1%) 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 trustees without shareholder
approval.
-16-
<PAGE>
The following table shows the total dollar amounts of advisory fees and
administrative services fees paid by the Fund for the periods indicated.
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 Associates 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.
The Fund 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 Fund's custodian, transfer agent and dividend
disbursing agent. IFTC has engaged DST as sub-agent to provide transfer agency
and dividend disbursing services for the Fund. As noted in the previous
section, approximately 41% of the outstanding shares of DST are owned by KCSI.
As recordkeeping and pricing agent, IFTC calculates the daily net asset
value of the Fund and performs certain accounting and recordkeeping functions
required by the Fund. The Fund pays 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 Fund's securities and cash, and receive and remit the income
thereon as directed by the management of the Fund. The custodian and
subcustodians do not perform any managerial or policy-making functions for the
Fund. For its services as custodian, IFTC receives an asset-based fee plus
certain transaction fees and out-of-pocket expenses. Under the Custodian
Agreement in effect for the Fund until January 1, 1997, PWM, then the Fund's
investment advisor, acted as the Fund's custodian and was not compensated under
that Agreement other than by the reimbursement of its costs in providing such
services.
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 Fund's shareholders; calculates
the amount of, and delivers to the Fund's shareholders, proceeds representing
all dividends and distributions; and performs other related services. For these
services, IFTC receives a fee from the Fund 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 upon
formula for certain earnings credits on the cash balances of the Fund. Earnings
credits received by the Fund are disclosed on the Fund's Statement of Operations
in the Annual Report incorporated by reference into this Statement of Additional
Information.
-17-
<PAGE>
OTHER EXPENSE INFORMATION
The trustees of the Fund 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. DSTS may be considered an
affiliate of Berger Associates due to the ownership interest of KCSI in both
DSTS and Berger Associates.
The Fund and/or its Advisor may enter 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 Fund through those firms or companies. The Fund's
Advisor or the Fund (if approved by its trustees) may pay fees to these
companies for their services. These companies may also be appointed as agents
for or authorized by the Fund to accept on its 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 Fund.
DISTRIBUTOR
The distributor (principal underwriter) of the Fund's shares is Berger
Distributors, Inc. (the "Distributor"), 210 University Blvd., Suite 900, Denver,
CO 80206. The Distributor may be reimbursed by Berger Associates for its costs
in distributing the Fund's Institutional Shares.
6. BROKERAGE POLICY
Although the Fund retains full control over its own investment policies,
under the terms of its Investment Advisory Agreement, Berger Associates is
directed to place the portfolio transactions of the Fund. A report on the
placement of brokerage business is given to the trustees of the 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 Fund during
the past three fiscal years were as follows:
BROKERAGE COMMISSIONS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Fiscal Year Fiscal Year Fiscal Year
Ended Ended Ended
September 30, September 30, December 31,
1998 1997(1) 1996
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
BERGER SMALL CAP VALUE FUND $ 567,000 $ 306,000 $ 307,000
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
(1) The Fund's fiscal year end was changed from December 31 to September 30
during 1997. Accordingly, this covers the period from January 1, 1997 through
September 30, 1997.
The Investment Advisory Agreement between the Fund and Berger Associates
authorizes and directs Berger Associates 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. However, the Agreement specifically authorizes Berger Associates 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 Berger
-18-
<PAGE>
Associates 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 Berger Associates.
In accordance with this provision of the Agreement, Berger Associates
places portfolio brokerage business of the Fund with brokers who provide useful
brokerage and research services to Berger Associates. Such services include
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, broker and other
third-party equity research, computerized stock market and business news
services, economic research, account performance data and computer hardware used
for the receipt of electronic research services. Those services included a
service used by the independent trustees of the Fund in reviewing the Investment
Advisory Agreement.
During the fiscal year ended September 30, 1998, of the brokerage
commissions paid by the Fund, the following amounts were paid to brokers who
agreed to provide to the Fund selected research services prepared by the broker
or subscribed or paid for by the broker on behalf of the Fund:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Fund Amount of Amount of Commissions
Transactions
- -------------------------------------------------------------------------------
<S> <C> <C>
Berger Small Cap Value Fund $10,279,000 $31,000
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
The research services received from brokers are often helpful to Berger
Associates in performing its investment advisory responsibilities to the Fund,
but they are not essential, and the availability of such services from brokers
does not reduce the responsibility of Berger Associates' advisory personnel to
analyze and evaluate the securities in which the Fund invests. The research
services obtained as a result of the Fund's brokerage business also will be
useful to Berger Associates 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 Berger Associates in
rendering investment advice to the Fund. Although such research services may be
deemed to be of value to Berger Associates, they are not expected to decrease
the expenses that Berger Associates would otherwise incur in performing its
investment advisory services for the Fund nor will the advisory fees that are
received by Berger Associates from the Fund be reduced as a result of the
availability of such research services from brokers.
Under the Investment Advisory Agreement in effect until February 14, 1997,
the 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 or orders at the most favorable net price. All the
brokerage commissions shown in the Brokerage Commissions table above for the
fiscal year ended December 31, 1996, and $138,000 of the brokerage commissions
shown in the table for the fiscal year ended September 30, 1997 (which
constituted all of the brokerage commissions paid by the Fund for the period
January 1, 1997, to February 14, 1997), were paid to PWM, which is also a
registered broker-dealer. On February 14, 1997, new arrangements for the Berger
Small Cap Value Fund came into effect with shareholder approval and since that
time, the trustees have not authorized the Fund's brokerage to be placed with
any broker or dealer affiliated with the Advisor or Sub-Advisor, except through
DSTS under the circumstances described immediately below.
The trustees of the Fund 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,
-19-
<PAGE>
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 Associates due to the ownership interest of KCSI in both
DSTS and Berger Associates.
Included in the brokerage commissions paid by the Fund during the fiscal
year ended September 30, 1998, as stated in the preceding Brokerage Commissions
table, are the following amounts paid to DSTS, which served to reduce the Fund's
out-of-pocket expenses as follows:
DSTS COMMISSIONS AND RELATED EXPENSE REDUCTIONS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DSTS Reduction DSTS Reduction in
Commissions in Expenses Commissions Expenses FYE
Paid FYE Paid 9/30/97(1)
FYE 9/30/98 9/30/98(1) FYE 9/30/97
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Berger Small Cap Value Fund $ 0 $ 0 $10,000 $7,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</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.
In selecting broker and dealers and in negotiating commissions, the Fund's
Advisor considers a number of factors, including among others: the Advisor's
knowledge of currently available negotiated commission rates or prices of
securities currently available and other current transaction costs; the nature
of the security being traded; the size and type of the transaction; the nature
and character of the markets for the security to be purchased or sold; the
desired timing of the trade; the activity existing and expected in the market
for the particular security; confidentiality; the quality of the execution,
clearance and settlement services; financial stability of the broker or dealer;
the existence of actual or apparent operational problems of any broker or
dealer; and research products or services provided. The trustees of the Fund
have also authorized sales of shares of the Fund 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 Fund. In addition, the Advisor may also consider
payments made by brokers to a Fund or to other persons on behalf of a Fund for
services provided to the Fund for which it would otherwise be obligated to pay,
such as transfer agency fees. In placing portfolio business with any such
broker or dealer, the Advisor of the Fund will seek the best execution of each
transaction.
7. PURCHASE OF SHARES IN THE FUND
Minimum Initial Investment
for Institutional Shares: $250,000.00
Shares in the Fund may be purchased at the relevant net asset value without
a sales charge. The minimum initial investment for Institutional Shares of the
Fund is $250,000. (This requirement is not applicable to shareholder accounts
opened prior to February 14, 1997, which met the initial investment minimum in
effect for the Fund at the time of their initial purchase.) To purchase shares
in the Fund, simply complete the application form enclosed with the Prospectus
and mail it to the Fund in care of DST Systems, Inc., the Fund's transfer agent,
as follows:
Berger Funds
c/o DST Systems, Inc.
P.O. Box 419958
Kansas City, MO 64141
-20-
<PAGE>
Payment for shares purchased may be made by wire, electronic funds transfer
or mail. All purchase orders are effected at the relevant net asset value per
share of the Fund next determined after receipt of the purchase order, completed
application and payment. A purchase order, together with payment in proper
form, received by the Fund, its authorized agent or designee prior to the close
of the New York Stock Exchange (the "Exchange") on a day the Fund is open for
business will be effected at that day's net asset value. An order received
after that time will be effected at the net asset value determined on the next
business day.
Additional investments may be made at any time by mail, telephone
(1-800-960-8427) or online (www.bergerfunds.com) at the relevant net asset value
by calling or writing the Fund and making payment by wire or electronic funds
transfer as outlined above. Unless effected through an Automatic Investment
Plan, subsequent purchases by shareholders must be in the minimum amount of
$1,000.
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 Fund and may impose other charges or restrictions different from those
applicable to shareholders who invest in the Fund 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 the Fund as described above.
Procedures for purchasing, selling (redeeming) and exchanging Fund shares
by telephone and online are described in the Prospectus. The Fund may terminate
or modify those procedures and related requirements at any time, although
shareholders of the Fund will be given notice of any termination or material
modification. Berger Associates may, at its own risk, waive certain of those
procedures and related requirements.
8. NET ASSET VALUE
The net asset value of the Fund is determined once daily, at the close of
the regular trading session of 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 Fund 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 the Institutional Shares is
determined by dividing the Institutional Shares' pro rata portion of the total
value of the Fund's securities and other assets, less the Institutional Shares'
pro rata portion of the Fund's liabilities and the liabilities attributable to
the Institutional Shares, by the total number of Institutional Shares
outstanding.
In determining net asset value, securities listed or traded primarily on
national exchanges, The Nasdaq Stock Market and foreign exchanges are valued at
the last sale price on such markets, or, if such a price is lacking for the
trading period immediately preceding the time of determination, such securities
are valued at the mean of their current bid and asked prices. Securities that
are traded in the over-the-counter market are valued at the mean between their
current bid and asked prices. The market value of individual securities held by
the 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
-21-
<PAGE>
representative of market value may be valued at their fair value determined in
good faith pursuant to consistently applied procedures established by the
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 the
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 trustees.
The 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 the 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 federal income tax issues relating to
the Fund. 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 FUND. If the 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. The Fund
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
Fund 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 the 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 the 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.
If the 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
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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 Fund reserves 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 Fund
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 Fund,
unless the 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 claim a foreign tax
credit for their share of foreign taxes, subject to limitations prescribed in
the tax law.
If the 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 the 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 the 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 Fund's 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 the
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 the 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, the 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 the Fund generally will be
subject to a 30% U.S. withholding tax on dividends paid by the Fund from
ordinary income and short-term capital
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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.
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 the 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 the Fund.
The 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. The 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
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. PLANS AND PROGRAMS
The Fund offers several tax-qualified retirement plans for individuals,
businesses and nonprofit organizations. For information about establishing a
Berger Funds 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 1-800-706-0539 or write to The Berger Funds c/o Berger Associates,
P.O. Box 5005, Denver, CO 80217. 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 Fund at 1-800-960-8427.
The Fund also offers an Automatic Investment Plan (minimum $100 per monthly
or quarterly investment) and a Systematic Withdrawal Plan (for shareholders who
own shares of the Fund worth at least $5,000; minimum of $50 withdrawn monthly,
quarterly, semiannually or annually). Forms for these plans may be obtained by
writing to the Fund, c/o DST Systems, Inc., P.O. Box 419958, Kansas City, MO
64141, or call 1-800-960-8427.
12. EXCHANGE PRIVILEGE
Any shareholder may exchange any or all of the shareholder's shares in the
Fund, subject to stated minimums, for shares of any of the other available
Berger Funds, without charge, after receiving a current prospectus of the other
fund. Exchanges into or out of the Fund 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 federal income tax purposes. An
exchange of shares may be made by written request directed to DST Systems, Inc.,
by telephoning the Fund at 1-800-960-8427 or by contacting the Fund online at
www.bergerfunds.com. This privilege is revocable by the Fund, and is not
available in any state in which the shares of the Berger Fund being acquired in
the exchange are not eligible for sale.
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Shareholders automatically have telephone and online transaction 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 Fund may discuss its performance
ratings as published by recognized mutual fund statistical services, such as
Lipper Analytical Services, Inc., CDA Investment Technologies, Inc., or
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 Fund may compare its performance to that of recognized broad-based
securities market indices, including the Standard & Poor's 500 Stock Index, the
Dow Jones Industrial Average, the Russell 2000 Stock Index, the Standard &
Poor's 600 Small Cap Index, the Nasdaq Composite Index, or more narrowly-based
or blended indices which reflect the market sectors in which the Fund invests.
The total return of the 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.
The 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
the Fund. Because average annual total returns for more than one year tend to
smooth out variations in the Fund's return, investors should recognize that such
figures are not the same as actual year-by-year results.
All performance figures for the Fund are based upon historical results and
do not assure future performance. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
Quotations of average annual total return for the Fund 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 period
since the Fund's registration statement became effective, 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
n
following formula: P(1 + T) = 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.
Shares of the 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 another class of shares. Total return of the
Institutional 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.
For the 1-year, 3-year, 5-year and 10-year periods ended September 30,
1998, and for the period from October 21, 1987 (date of first public offering)
through September 30, 1998, the
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<PAGE>
average annual total returns for the Institutional Shares of the Fund were
(10.65)%, 15.58%, 16.11% and 13.94%, respectively.
14. ADDITIONAL INFORMATION
The 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 (the
"Trust"). 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 SAI 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: The Institutional Shares, to which this SAI
relates, are designed for pension and profit-sharing plans, employee benefit
trusts, endowments, foundations and corporations, as well as high net worth
individuals, who are willing to maintain a minimum account balance of $250,000.
Institutional Shares are also made available for purchase and dividend
reinvestment to all holders of the Fund's shares as of February 14, 1997, when
all the Fund's then outstanding shares were designated as Institutional Shares,
subject to a minimum account balance requirement of $500. A separate class of
shares, Investor Shares, are offered through a separate prospectus and statement
of additional information and are available to the general public, subject to
the Fund's regular minimum investment requirements as specified in that
prospectus (currently $2,000 minimum initial investment).
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. Therefore, no annual or regular meetings of shareholders normally
will be held, unless otherwise required by the Declaration of Trust or the
Investment Company Act of 1940. Subject to the foregoing, 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.
Shareholders are entitled to one vote for each full share held and
fractional votes for fractional shares held on matters submitted to a vote of
shareholders. Shares of the Fund do not have cumulative voting rights, which
means that the holders of more than 50% of the shares voting for the election of
trustees can elect 100% of the trustees if they choose to do so, and in such
event the holders of the remaining shares will not be able to elect any person
as a trustee.
Shares of the Fund are fully paid and non-assessable when issued.
Dividends, distributions and the residual assets of the Fund in the event of
liquidation are distributed to shareholders equally for each outstanding share
of the Fund, subject to any applicable distinctions by class. Shares of the
Fund have no preemptive rights. Fund shares have no subscription rights or
conversion rights, except that shareholders of any class of the 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
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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 Fund may be transferred by endorsement or
stock power as is customary, but the Fund is not required to recognize any
transfer until it is recorded on the books.
Under Massachusetts law, shareholders of the Fund could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Declaration of Trust 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 Fund's 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 possibility that these circumstances would occur is
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.
MORE ON SPECIAL FUND STRUCTURE
The Fund has divided its shares into classes and has two classes of shares
outstanding, the Institutional Shares covered by this SAI and the Investor
Shares offered through a separate prospectus and statement of additional
information. The Fund implemented its multi-class structure by adopting a Rule
18f-3 Plan under the Investment Company Act of 1940 permitting it to issue its
shares in classes. The Fund's Rule 18f-3 Plan governs 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.
Investor Shares are made available to the general public and bear a 0.25% 12b-1
fee. Information concerning Investor Shares is available from the Fund at
1-800-333-1001.
Subject to the Trust's Declaration of Trust and any other applicable
provisions, the trustees of the Trust have the authority to create additional
classes, or change existing classes, from time to time, in accordance with Rule
18f-3 under the Act.
PRINCIPAL SHAREHOLDERS
Insofar as the management of the Fund is aware, as of November 16, 1998, no
person owned, beneficially or of record, more than 5% of the outstanding
Institutional Shares of the Fund, except for the following:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
OWNER PERCENTAGE
- --------------------------------------------------------------------------------
<S> <C>
Donaldson Lufkin & Jenrette Securities 7.05%(1)
Corporation
No Load Mutual Funds, 14th Flr.
P.O. Box 2052
Jersey City, NJ 07303
- --------------------------------------------------------------------------------
Everen Clearing Corporation 6.07%(2)
Wrap Account
111 S. Kilbourne Ave.
Milwaukee, WI 53202
- --------------------------------------------------------------------------------
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<PAGE>
- --------------------------------------------------------------------------------
National Financial Services Corp. ("Fidelity") 7.36%(3)
200 Liberty St.
One World Financial Center
New York, NY 10281
- --------------------------------------------------------------------------------
Charles Schwab & Co., Inc. 11.00%(4)
101 Montgomery Street
San Francisco, CA 94104
- --------------------------------------------------------------------------------
First American Trust Company 5.42%(5)
Managed Omnibus
421 North Main Street
Santa Ana, CA 92701
- --------------------------------------------------------------------------------
</TABLE>
(1) In addition, Donaldson Lufkin & Jenrette holds of record 13.02% of the
Investor Shares class of the Fund, which together with its Institutional Shares,
constitute 10.41% of the Fund's total outstanding shares.
(2) Constitutes 2.65% of the Fund's total outstanding shares.
(3) In addition, Fidelity holds of record 22.56% of the Investor Shares class of
the Fund, which together with its Institutional Shares, constitute 15.93% of the
Fund's total outstanding shares.
(4) In addition, Charles Schwab & Co., Inc., holds of record 29.72% of the
Investor Shares class of the Fund, which together with its Institutional Shares,
constitute 21.55% of the Fund's total outstanding shares.
(5) Constitutes 2.37% of the Fund's total outstanding shares.
DISTRIBUTION
The Distributor is the principal underwriter of the Fund's shares. The
Distributor is a wholly-owned subsidiary of Berger Associates. 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 the Fund in connection with the sale of its 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 Trust. Janice M. Teague, Vice President and Secretary of the
Distributor, is also Vice President and Secretary of the Trust. Brian Ferrie,
Vice President and Chief Compliance Officer of the Distributor, is also Vice
President of the Trust.
The Trust, on behalf of the Fund, and the Distributor are parties to a
Distribution Agreement that continues through April 1999, 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 Trust who are not
"interested persons" (as that term is defined in the Investment Company Act of
1940) of the Trust or the Distributor. The Distribution Agreement is subject to
termination by the Trust 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 the Fund's shares
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 Associates for its costs in distributing Fund shares.
OTHER INFORMATION
The Fund has 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
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<PAGE>
of the Fund of which this SAI is a part. If further information is desired with
respect to the Fund or such securities, reference is made to the Registration
Statement and the exhibits filed as a part thereof.
Davis, Graham & Stubbs LLP, 370 Seventeenth Street, Denver, Colorado, acts
as counsel to the Fund.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 950 Seventeenth Street, Denver, Colorado, acted
as independent accountants for the Fund for the period ended September 30, 1998.
In that capacity, PricewaterhouseCoopers LLP audited the financial statements of
the Fund referenced below under "Financial Information" and assisted the Fund in
connection with the preparation of its 1998 income tax returns.
FINANCIAL INFORMATION
The statement of assets and liabilities, including the schedule of
investments, and the related statements of operations and of changes in net
assets and the financial highlights for the Fund for the fiscal year ended
September 30, 1998, and for the period from January 1, 1997, through September
30, 1997, are incorporated by reference into this SAI from the Annual Report to
Shareholders dated September 30, 1998, for the Fund. The Report of Independent
Accountants, dated October 30, 1998, covering the foregoing statements is also
incorporated by reference into this SAI from the Annual Report to Shareholders
dated September 30, 1998. The 1998 Annual Report for the Fund is enclosed with
this SAI. Additional copies of that Annual Report may be obtained upon request
without charge by calling the Fund at 1-800-333-1001.
The report of the Fund's prior independent auditors covering the Fund's
financial highlights for the fiscal years ended December 31, 1996, 1995 and
1994, is incorporated by reference into this SAI from the Annual Report to
Shareholders for the Fund for the fiscal year ended December 31, 1996. A copy of
that Annual Report may be obtained upon request without charge by calling the
Fund at 1-800-333-1001.
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<PAGE>
APPENDIX A
HIGH-YIELD/HIGH RISK CONVERTIBLE BONDS
The Fund 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, the Fund will not purchase any security
in default at the time of purchase. The Fund will not 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, the 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 the Fund's percentage limits for investments rated below investment grade,
unless the Fund's sub-advisor deems such securities to be the equivalent of
investment grade. If securities purchased by the 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
trustees of the Fund, in consultation with the Fund's sub-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 the 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 the 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 the 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
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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 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
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<PAGE>
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.
-32-
<PAGE>
BERGER OMNI INVESTMENT TRUST
PART C. OTHER INFORMATION
ITEM 23. EXHIBITS
The Exhibit Index following the signature page below is incorporated herein
by reference.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
ITEM 25. INDEMNIFICATION.
Article XII of the Amended and Restated Declaration of Trust of the
Registrant, dated April 19, 1990, provides for indemnification of officers and
trustees of the Trust against liabilities and expenses of litigation incurred by
them in connection with any claim, action, suit or proceeding (or settlement of
the same) in which they become involved by virtue of their 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 Trust. The
Trust also may advance money for these expenses, provided that the trustees or
officers undertake to repay the Trust if it is ultimately determined that they
are not entitled to indemnification. The Trust has the power to purchase
insurance on behalf of its trustees and officers, whether or not it would be
permitted or required to indemnify them for any such liability under the
Declaration of Trust or applicable law, and the Trust has purchased and
maintains an insurance policy covering such persons against certain liabilities
incurred in their official capacities.
ITEM 26. BUSINESS OR OTHER CONNECTIONS OF INVESTMENT ADVISER.
The business of Berger Associates, Inc., the investment adviser of the
Fund, is described in the Prospectus and in Section 4 of the Statement of
Additional Information which are included in this Registration Statement.
Information relating to the business and other connections of the officers and
directors of Berger Associates (current and for the past two years) is listed in
Schedules A and D of Berger Associates' Form ADV as filed with the Securities
and Exchange Commission (File No. 801-9451, dated November 16, 1998), which
information from such schedules is incorporated herein by reference.
The business of Perkins, Wolf, McDonnell & Company ("PWM"), sub-advisor to
the Fund, is also described in the Prospectus and in Section 4 of the Statement
of Additional Information. Information relating to the business and other
connections of the officers and directors of PWM (current and for the past two
years) is listed in Schedule A of PWM's Form ADV (File No. 801-19974), as filed
with the Securities and Exchange Commission on July 28, 1994, and in Schedules D
of PWM's Form ADV, as filed with the Securities and Exchange Commission on March
24, 1986, and April 2, 1990, which information from such schedules is
incorporated herein by reference.
C-1
<PAGE>
ITEM 27. PRINCIPAL UNDERWRITER.
(a) Investment companies for which the Fund's principal underwriter also
acts as principal underwriter:
The One Hundred Fund, Inc.
Berger One Hundred and One Fund, Inc.
Berger Investment Portfolio Trust
- --Berger Small Company Growth Fund
- --Berger New Generation Fund
- --Berger Balanced Fund
- --Berger Select Fund
- --Berger Mid Cap Growth Fund
- --Berger Mid Cap Value Fund
Berger Omni Investment Trust
- --Berger Small Cap Value Fund
Berger Institutional Products Trust
- --Berger IPT - 100 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, Inc.:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Name Positions and Positions and
Offices with Offices with
Underwriter Registrant
<S> <C> <C>
- --------------------------------------------------------------------------------
David G. Mertens President, CEO and Director None
- --------------------------------------------------------------------------------
David J. Schultz Chief Financial Officer, Vice President and
Assistant Secretary and Treasurer
Treasurer
- --------------------------------------------------------------------------------
Brian Ferrie Vice President and Chief Vice President
Compliance Officer
- --------------------------------------------------------------------------------
Mark S. Sunderhuse Director None
- --------------------------------------------------------------------------------
Janice M. Teague Vice President and Vice President and
Secretary Secretary
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
C-2
<PAGE>
The principal business address of each of the persons in the table above is
210 University Blvd., Suite 900, Denver, CO 80206.
(c) Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
The accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the rules promulgated thereunder are
maintained as follows:
(a) Shareholder records are maintained by the Registrant's sub-transfer agent,
DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141;
(b) Accounting records relating to cash and other money balances; asset,
liability, reserve, capital, income and expense accounts; portfolio
securities; purchases and sales; and brokerage commissions are maintained
by the Registrant's Recordkeeping and Pricing Agent, Investors Fiduciary
Trust Company ("IFTC"), 801 Pennsylvania, Kansas City, Missouri 64105.
Other records of the Registrant relating to purchases and sales; the
Declaration of Trust; 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.
(c) Certain records relating to day-to-day portfolio management of the Fund are
kept at the offices of Perkins, Wolf, McDonnell & Company, 53 West Jackson
Boulevard, Suite 818, Chicago, Illinois 60604.
ITEM 29. MANAGEMENT SERVICES.
None.
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 25th day of November, 1998.
BERGER OMNI INVESTMENT TRUST
----------------------------
(Registrant)
By Gerard M. Lavin
--------------------------
Name: Gerard M. Lavin
-----------------------
Title: President
----------------------
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
Gerard M. Lavin President (Principal November 25, 1998
- -------------------------- Executive Officer)
Gerard M. Lavin and Trustee
David J. Schultz Vice President and November 25, 1998
- -------------------------- Treasurer (Principal
David J. Schultz Financial Officer)
John Paganelli Assistant Treasurer November 25, 1998
- -------------------------- (Principal Accounting
John Paganelli Officer)
/s/Dennis E. Baldwin* Trustee November 25, 1998
- --------------------------
Dennis E. Baldwin
/s/William M.B. Berger* Trustee November 25, 1998
- --------------------------
William M.B. Berger
C-4
<PAGE>
/s/Louis R. Bindner* Trustee November 25, 1998
- --------------------------
Louis R. Bindner
/s/Katherine A. Cattanach* Trustee November 25, 1998
- --------------------------
Katherine A. Cattanach
/s/Paul R. Knapp* Trustee November 25, 1998
- --------------------------
Paul R. Knapp
/s/Harry T. Lewis, Jr.* Trustee November 25, 1998
- --------------------------
Harry T. Lewis, Jr.
/s/Michael Owen* Trustee November 25, 1998
- --------------------------
Michael Owen
/s/William Sinclaire* Trustee November 25, 1998
- --------------------------
William Sinclaire
Gerard M. Lavin
- --------------------------
*By Gerard M. Lavin
Attorney-in-Fact
C-5
<PAGE>
BERGER OMNI INVESTMENT TRUST
EXHIBIT INDEX
<TABLE>
<CAPTION>
N-1A EDGAR
Exhibit Exhibit
No. No. Name of Exhibit
- ------- ------- ---------------
<S> <C> <C>
(1) Exhibit 23(a)-1 Amended and Restated Declaration of
Trust
(2) Exhibit 23(b) Bylaws
Exhibit 23(c) Not applicable
(3) Exhibit 23(d)-1 Form of Investment Advisory Agreement
between the Trust and Berger Associates,
Inc.
(4) Exhibit 23(d)-2 Form of Sub-Advisory Agreement between
Berger Associates, Inc. and Perkins,
Wolf, McDonnell & Co.
(5) Exhibit 23(e) Form of Distribution Agreement between
the Trust and Berger Distributors, Inc.
Exhibit 23(f) Not applicable
(6) Exhibit 23(g) Form of Custody Agreement between IFTC
and the Trust
(7) Exhibit 23(h)-1 Form of Administrative Services
Agreement for Berger Small Cap Value
Fund
(8) Exhibit 23(h)-2 Form of Recordkeeping and Pricing Agent
Agreement between IFTC and the Trust
(9) Exhibit 23(h)-3 Form of (Transfer) Agency Agreement
between IFTC and the Trust
(10) Exhibit 23(i) Opinion and consent of Counsel
Exhibit 23(j) EX-99.B23(j) Consent of PricewaterhouseCoopers LLP
Exhibit 23(k) Not applicable
(11) Exhibit 23(l) Investment Letters from Initial
Stockholders
(12) Exhibit 23(m) Rule 12b-1 Plan for Berger Small Cap
Value Fund Investor Shares
* Exhibit 23(n)-1 EX-27.1 Financial Data Schedule for the Berger
Small Cap Value Fund - Investor Shares
* Exhibit 23(n)-2 EX-27.2 Financial Data Schedule for the Berger
Small Cap Value Fund - Institutional
Shares
(13) Exhibit 23(o) Rule 18f-3 Plan for the Berger Small Cap
Value Fund
</TABLE>
- ------------------------
* Filed herewith.
Filed previously as indicated below and incorporated herein by reference:
C-6
<PAGE>
(1) Exhibit 1 from Post-Effective Amendment No. 11 to Registrant's
Registration Statement on Form N-1A, filed December 16, 1996.
(2) Exhibit 2 from Post-Effective Amendment No. 11 to Registrant's
Registration Statement on Form N-1A, filed December 16, 1996.
(3) Exhibit 5.1 from Post-Effective Amendment No. 11 to Registrant's
Registration Statement on Form N-1A, filed December 16, 1996.
(4) Exhibit 5.2 from Post-Effective Amendment No. 11 to Registrant's
Registration Statement on Form N-1A, filed December 16, 1996.
(5) Exhibit 6 from Post-Effective Amendment No. 11 to Registrant's
Registration Statement on Form N-1A, filed December 16, 1996.
(6) Exhibit 8 from Post-Effective Amendment No. 11 to Registrant's
Registration Statement on Form N-1A, filed December 16, 1996.
(7) Exhibit 9.2 from Post-Effective Amendment No. 11 to Registrant's
Registration Statement on Form N-1A, filed December 16, 1996.
(8) Exhibit 9.3 from Post-Effective Amendment No. 11 to Registrant's
Registration Statement on Form N-1A, filed December 16, 1996.
(9) Exhibit 9.4 from Post-Effective Amendment No. 11 to Registrant's
Registration Statement on Form N-1A, filed December 16, 1996.
(10) Exhibit 10 from Post-Effective Amendment No. 10 to Registrant's
Registration Statement on Form N-1A, filed April 30, 1996, and
incorporated herein by reference
(11) Exhibit 13 from Post-Effective Amendment No. 10 to Registrant's
Registration Statement on Form N-1A, filed April 30, 1996, and
incorporated herein by reference
(12) Exhibit 15 from Post-Effective Amendment No. 11 to Registrant's
Registration Statement on Form N-1A, filed December 16, 1996.
(13) Exhibit 18 from Post-Effective Amendment No. 11 to Registrant's
Registration Statement on Form N-1A, filed December 16, 1996.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000765924
<NAME> BERGER OMNI INVESTMENT TRUST
<SERIES>
<NUMBER> 012
<NAME> BERGER SMALL CAP VALUE INSTITUTIONAL SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 222733776
<INVESTMENTS-AT-VALUE> 200171897
<RECEIVABLES> 2473709
<ASSETS-OTHER> 439
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 202646045
<PAYABLE-FOR-SECURITIES> 780325
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 613914
<TOTAL-LIABILITIES> 1394239
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 212849779
<SHARES-COMMON-STOCK> 5263458<F1>
<SHARES-COMMON-PRIOR> 2617878<F1>
<ACCUMULATED-NII-CURRENT> 3106054
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 7857852
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (22561879)
<NET-ASSETS> 201251806
<DIVIDEND-INCOME> 3080643
<INTEREST-INCOME> 1018309
<OTHER-INCOME> 0
<EXPENSES-NET> 2335118
<NET-INVESTMENT-INCOME> 1763834
<REALIZED-GAINS-CURRENT> 10298999
<APPREC-INCREASE-CURRENT> (38226428)
<NET-CHANGE-FROM-OPS> (26163595)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 706938<F1>
<DISTRIBUTIONS-OF-GAINS> 6438165<F1>
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3808007<F1>
<NUMBER-OF-SHARES-REDEEMED> 1446163<F1>
<SHARES-REINVESTED> 283736<F1>
<NET-CHANGE-IN-ASSETS> 87591043
<ACCUMULATED-NII-PRIOR> 261863
<ACCUMULATED-GAINS-PRIOR> 13537606
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1515167
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2345047
<AVERAGE-NET-ASSETS> 77000191<F1>
<PER-SHARE-NAV-BEGIN> 22.33<F1>
<PER-SHARE-NII> 0.45<F1>
<PER-SHARE-GAIN-APPREC> (2.55)<F1>
<PER-SHARE-DIVIDEND> 0.23<F1>
<PER-SHARE-DISTRIBUTIONS> 2.37<F1>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.63<F1>
<EXPENSE-RATIO> 1.19<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Institutional Share Class
</FN>
</TABLE>
