PILGRIM GROWTH OPPORTUNITIES FUND
DEFS14A, 2000-07-13
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                            SCHEDULE 14A INFORMATION
                Proxy Statement Pursuant to Section 14(a) of the
                         Securities Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ]  Preliminary Proxy Statement           [ ]  Confidential, For Use of the
[X]  Definitive Proxy Statement                 Commission Only (as permitted
[ ]  Definitive Additional Materials            by Rule 14a-6(e)(2))
[ ]  Soliciting Material Pursuant to
     Rule 14a-11(c) or Rule 14a-12

                        PILGRIM GROWTH OPPORTUNITIES FUND
                       PILGRIM SMALLCAP OPPORTUNITIES FUND
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                (Name of Registrant as Specified In Its Charter)

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    (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X]  No fee required.
[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1)   Title of each class of securities to which transaction applies:

--------------------------------------------------------------------------------
2)   Aggregate number of securities to which transaction applies:

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3)   Per unit price or other underlying value of transaction  computed  pursuant
     to Exchange  Act Rule 0-11 (set forth the amount on which the filing fee is
     calculated and state how it was determined):

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4)   Proposed maximum aggregate value of transaction:

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5)   Total fee paid:

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[ ] Fee paid previously with preliminary materials:

[ ] Check box if any part of the fee is offset as provided  by  Exchange  Act
    Rule  0-11(a)(2)  and identify the filing for which the  offsetting fee was
    paid  previously.  Identify the previous filing by  registration  statement
    number, or the form or schedule and the date of its filing.

    1)   Amount previously paid:
                                ------------------------------------------
    2)   Form, Schedule or Registration Statement No.:
                                                      --------------------
    3)   Filing Party:
                      ----------------------------------------------------
    4)   Date Filed:
                    ------------------------------------------------------
<PAGE>
                        PILGRIM GROWTH OPPORTUNITIES FUND
                       PILGRIM SMALLCAP OPPORTUNITIES FUND
                  (each a "Fund" and collectively, the "Funds")

                       40 North Central Avenue, Suite 1200
                             Phoenix, Arizona 85004
                                 (800) 992-0180

                                  July 12, 2000


Dear Shareholder:

     A Special Meeting (the "Meeting") of Shareholders of the Funds will be held
at 40 North Central  Avenue,  Suite 1200,  Phoenix,  Arizona 85004 on August 25,
2000 at 8:30 a.m.,  local time. We hope that you can attend the Special  Meeting
in  person;  however,  we urge  you in any  event  to take  the time to read the
attached Proxy Statement and to vote your shares by completing and returning the
enclosed proxy in the envelope provided at your earliest convenience.

     At the  Meeting,  you will be asked to  consider  and vote on,  among other
things, the following matters:

     *    Approval of an amendment to the  advisory  contract  between each Fund
          and Pilgrim Investments,  Inc. ("Pilgrim Investments") which increases
          the  contractual  advisory  fee  payable to Pilgrim  Investments  (the
          "Amendment").  Pilgrim  Investments  has made a commitment to building
          and sustaining a high quality growth asset  management  team to manage
          the Funds. A fee increase is sought to support this  commitment in the
          face of  escalating  personnel  and other costs in managing the Funds;
          and

     *    Approval  of new  advisory  contracts  to reflect the  acquisition  of
          ReliaStar  Financial  Corp.,  the indirect  parent  company of Pilgrim
          Investments,  by ING Groep N.V., a global financial institution active
          in the fields of  insurance,  banking  and asset  management,  with no
          change in the advisory fees payable to Pilgrim Investments as a result
          of the change in control.  Shareholders are being asked to approve the
          new advisory  contracts to take effect after the  acquisition  so that
          management  of  each  Fund  can  continue   uninterrupted   after  the
          transaction,    because   the   current   agreements   may   terminate
          automatically as a result of the transaction.

     After careful consideration, the Board of Trustees of the Funds unanimously
approved each of the proposals and recommends that  shareholders vote "FOR" each
proposal.

     YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. TO AVOID
THE ADDED COST OF FOLLOW-UP SOLICITATIONS AND POSSIBLE ADJOURNMENTS, PLEASE TAKE
A FEW MINUTES TO READ THE PROXY  STATEMENT  AND CAST YOUR VOTE.  IT IS IMPORTANT
THAT YOUR VOTE BE RECEIVED BY NO LATER THAN AUGUST 24, 2000.

     The Funds are  using  Shareholder  Communications  Corporation  ("SCC"),  a
professional  proxy  solicitation  firm,  to assist  shareholders  in the voting
process.  As the date of the Meeting  approaches,  if we have not already  heard
from you, you may receive a telephone  call from SCC  reminding  you to exercise
your right to vote.

     We appreciate  your  participation  and prompt  response in this matter and
thank you for your continued support.

                                        Sincerely,


                                        /s/ Robert W. Stallings

                                        ROBERT W. STALLINGS
                                        Chief Executive Officer and President
<PAGE>
                        PILGRIM GROWTH OPPORTUNITIES FUND
                       PILGRIM SMALLCAP OPPORTUNITIES FUND
                  (each a "Fund" and collectively, the "Funds")

                       40 North Central Avenue, Suite 1200
                             Phoenix, Arizona 85004
                                 (800) 992-0180

     NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 25, 2000


To the Shareholders:

     A Special Meeting (the "Meeting") of Shareholders of the Funds will be held
on August 25, 2000 at 8:30 a.m.,  local time, at 40 North Central Avenue,  Suite
1200, Phoenix, Arizona 85004 for the following purposes:

     1.   To elect eleven  Trustees to serve until their  successors are elected
          and qualified;

     2.   To approve an amendment to the advisory contract between each Fund and
          Pilgrim Investments,  Inc. ("Pilgrim Investments") which increases the
          contractual   advisory  fee  payable  to  Pilgrim   Investments   (the
          "Amendment"). Pilgrim Investments has sought a fee increase to attempt
          to continue to provide high quality investment  management services in
          the face of escalating costs in managing the Funds;

     3.   To approve the following new advisory  contracts between the Funds and
          Pilgrim  Investments to reflect the acquisition of ReliaStar Financial
          Corp.,  the indirect  parent  company of Pilgrim  Investments,  by ING
          Groep  N.V.,  with no change in the  advisory  fee  payable to Pilgrim
          Investments  as a result of the change in  control.  Shareholders  are
          being asked to approve the new advisory contracts to take effect after
          the   acquisition  so  that  management  of  each  Fund  can  continue
          uninterrupted  after the transaction,  because the current  agreements
          may terminate automatically as a result of the transaction:

          3a.  An  Investment  Management  Agreement,  assuming  Proposal  2  is
               approved by shareholders; and

          3b.  An Investment  Management  Agreement,  assuming Proposal 2 is not
               approved by shareholders;

     4.   To ratify the appointment of PricewaterhouseCoopers LLP as independent
          auditors  for the Funds for the fiscal year ending  December 31, 2000;
          and

     5.   To  transact  such other  business  as may  properly  come  before the
          Special Meeting of Shareholders or any adjournments thereof.

     Shareholders  of  record  at the  close of  business  on June 26,  2000 are
entitled to notice of, and to vote at, the Meeting.  Your attention is called to
the accompanying  Proxy Statement.  Regardless of whether you plan to attend the
Meeting,  PLEASE  COMPLETE,  SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY CARD so
that a quorum  will be present and a maximum  number of shares may be voted.  If
you are present at the Meeting,  you may change your vote,  if desired,  at that
time.


                                        By Order of the Board of Trustees,


                                        /s/ James M. Hennessy

                                        JAMES M. HENNESSY, Secretary

Dated: July 12, 2000
<PAGE>
                        PILGRIM GROWTH OPPORTUNITIES FUND
                       PILGRIM SMALLCAP OPPORTUNITIES FUND
                  (each a "Fund" and collectively, the "Funds")

                                 PROXY STATEMENT

          SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 25, 2000

     A Special Meeting (the "Meeting") of Shareholders of the Funds will be held
on August 25, 2000 at 8:30 a.m.,  local time, at 40 North Central Avenue,  Suite
1200, Phoenix, Arizona 85004 for the following purposes:

     1.   To elect eleven  Trustees to serve until their  successors are elected
          and qualified;

     2.   To approve an amendment to the advisory contract between each Fund and
          Pilgrim Investments,  Inc. ("Pilgrim Investments") which increases the
          contractual  advisory  fee  payable  to Pilgrim  Investments.  Pilgrim
          Investments  has  sought a fee  increase  to attempt  to  continue  to
          provide high  quality  investment  management  services in the face of
          escalating costs in managing the Funds;

     3.   To approve the following new advisory  contracts between the Funds and
          Pilgrim  Investments to reflect the acquisition of ReliaStar Financial
          Corp.   ("ReliaStar"),   the  indirect   parent   company  of  Pilgrim
          Investments,  by ING Groep N.V.,  with no change in the fee payable to
          Pilgrim Investments as a result of the change in control. Shareholders
          are being asked to approve the new  advisory  contracts to take effect
          after the  acquisition  so that  management  of each Fund can continue
          uninterrupted  after the transaction,  because the current  agreements
          may terminate automatically as a result of the transaction:

          3a.  An  Investment  Management  Agreement,  assuming  Proposal  2  is
               approved by shareholders; and

          3b.  An Investment  Management  Agreement,  assuming Proposal 2 is not
               approved by shareholders;

     4.   To ratify the appointment of PricewaterhouseCoopers LLP as independent
          auditors  for the Funds for the fiscal year ending  December 31, 2000;
          and

     5.   To  transact  such other  business  as may  properly  come  before the
          Special Meeting of Shareholders or any adjournments.

     This is a combined proxy  statement for Pilgrim Growth  Opportunities  Fund
("Growth Opportunities Fund") and Pilgrim SmallCap Opportunities Fund ("SmallCap
Opportunities  Fund").  Each Fund is a registered  investment  company under the
Investment Company Act of 1940, as amended ("1940 Act").

SOLICITATION OF PROXIES

     Solicitation  of  proxies is being made  primarily  by the  mailing of this
Notice  and Proxy  Statement  with its  enclosures  on or about  July 12,  2000.
Shareholders  of the Funds whose shares are held by  nominees,  such as brokers,
can vote their proxies by contacting  their respective  nominee.  In addition to
the  solicitation  of proxies by mail,  officers of the Funds and  employees  of
Pilgrim  Investments and its affiliates,  without additional  compensation,  may
solicit  proxies  in  person  or by  telephone,  telegraph,  facsimile,  or oral
communication.  The Funds have retained Shareholder  Communications  Corporation
("SCC"),  a professional  proxy  solicitation firm, to assist with any necessary
solicitation of proxies. As the Meeting date approaches, certain shareholders of
the Funds may receive a telephone call from SCC asking the shareholder to vote.

     A shareholder  may revoke the  accompanying  proxy at any time prior to its
use by filing with his/her respective Fund a written revocation or duly executed
proxy bearing a later date. In addition, any shareholder who attends the Meeting
in  person  may vote by  ballot  at the  Meeting,  thereby  canceling  any proxy
previously  given.  The  persons  named in the  accompanying  proxy will vote as
directed by the proxy, but in the absence of voting directions in any proxy that
is signed and returned,  they intend to vote "FOR" each of the proposals and may
vote in their  discretion  with  respect to other  matters  not now known to the
Board of the Funds that may be presented at the Meeting.
<PAGE>
     For information on voting rights and  adjournments  of the Meeting,  please
see "GENERAL INFORMATION" below.

REPORTS TO SHAREHOLDERS

     Each Fund will furnish, without charge, a copy of the Annual Report and the
most recent Semi-Annual Report regarding that Fund on request. Requests for such
reports should be directed to Pilgrim  Investments  at 40 North Central  Avenue,
Suite 1200, Phoenix, Arizona 85004 or at (800) 992-0180.

                                 PROPOSAL NO. 1
                              ELECTION OF TRUSTEES

     The Board of Trustees of each Fund has nominated  eleven  individuals  (the
"Nominees") for election to the Board of each Fund. Shareholders are being asked
to elect  the  Nominees  to serve as  Trustees,  each to serve  until his or her
successor  is duly  elected  and  qualified.  Pertinent  information  about each
Nominee is set forth below.  Each Nominee has consented to serve as a Trustee if
elected.  All of the  Nominees  are  currently  Trustees of both Funds.  Mark L.
Lipson,  currently a Trustee of both Funds,  is not  standing  for election as a
Trustee of the Funds.

     The Nominees are being nominated to provide uniformity across the Boards of
Directors/Trustees of all of the Pilgrim Funds. In evaluating the Nominees,  the
Trustees took into account their  background  and  experience,  including  their
familiarity  with the issues relating to these types of funds and investments as
well as their  careers in business,  finance,  marketing  and other  areas.  The
Trustees also  considered  the experience of each of the Nominees as trustees or
directors of certain of the funds in the Pilgrim group of funds.

INFORMATION REGARDING NOMINEES

     Below are the names, ages,  business  experience during the past five years
and other directorships of the Nominees. An asterisk (*) has been placed next to
the name of each Nominee who would constitute an "interested person," as defined
in the 1940 Act by virtue of that person's  affiliation with either of the Funds
or Pilgrim Investments or any of its affiliates.  The address of each Nominee is
40 North Central Avenue, Suite 1200, Phoenix, Arizona 85004.

<TABLE>
<CAPTION>
                        POSITION(S) TO BE
                            HELD WITH
    NAME AND AGE            THE FUNDS                      PRINCIPAL OCCUPATION DURING PAST 5 YEARS
    ------------            ---------                      ----------------------------------------
<S>                          <C>            <C>
Al Burton                    Trustee        President of Al Burton  Productions  for more than the last five
(Age 72)                                    years. Mr. Burton is also a Director,  Trustee or Advisory Board
                                            Member of each of the funds managed by Pilgrim Investments.

Paul S. Doherty              Trustee        President  of Doherty,  Wallace,  Pillsbury  and  Murphy,  P.C.,
(Age 66)                                    Attorneys.  Formerly a Director of Tambrands,  Inc. (1993-1998).
                                            Mr.  Doherty is also a Director  or Trustee of each of the funds
                                            managed by Pilgrim Investments.

Robert B. Goode              Trustee        Retired.  Mr.  Goode  was  formerly  Chairman,  American  Direct
(Age 69)                                    Business Insurance Agency, Inc. (1996 - 2000). Mr. Goode is also
                                            a Director  or  Trustee of each of the funds  managed by Pilgrim
                                            Investments.

Alan L. Gosule               Trustee        Partner and Chairman of the Tax Department of Clifford,  Chance,
(Age 59)                                    Rogers & Wells (since  1991).  Mr.  Gosule is a Director of F.L.
                                            Putnam Investment  Management Co., Inc., Simpson Housing Limited
                                            Partnership,  Home Properties of New York,  Inc., CORE Cap, Inc.
                                            and Colonnade Partners. Mr. Gosule is also a Director or Trustee
                                            of each of the funds managed by Pilgrim Investments.
</TABLE>
                                        2
<PAGE>
<TABLE>
<CAPTION>
                        POSITION(S) TO BE
                            HELD WITH
    NAME AND AGE            THE FUNDS                      PRINCIPAL OCCUPATION DURING PAST 5 YEARS
    ------------            ---------                      ----------------------------------------
<S>                          <C>            <C>
Walter H. May                Trustee        Retired.  Mr. May was formerly Managing Director and Director of
(Age 63)                                    Marketing for Piper Jaffray,  Inc. Mr. May is also a Director or
                                            Trustee of each of the funds managed by Pilgrim Investments.

Jock Patton                  Trustee        Private  Investor.   Director  of  Hypercom  Corporation  (since
(Age 54)                                    January  1999),  and JDA Software  Group,  Inc.  (since  January
                                            1999).  Mr.  Patton is also a Director  of Buick of  Scottsdale,
                                            Inc.,   National  Airlines,   Inc.,  BG  Associates,   Inc.,  BK
                                            Entertainment,  Inc., Arizona Rotorcraft,  Inc. and Director and
                                            Chief Executive  Officer of Rainbow  Multimedia  Group, Inc. Mr.
                                            Patton was  formerly  Director  of Stuart  Entertainment,  Inc.,
                                            Director  of  Artisoft,  Inc.  (August  1994-July  1998);  and a
                                            President  and  Co-owner of  StockVal,  Inc.  (April 1993 - June
                                            1997).  Mr. Patton is also a Director,  Trustee,  or a member of
                                            the  Advisory  Board of each of the  funds  managed  by  Pilgrim
                                            Investments.

David W.C. Putnam            Trustee        President, Clerk and Director of F.L. Putnam Securities Company,
(Age 60)                                    Inc. and its affiliates  (since 1978). Mr. Putnam is Director of
                                            Anchor  Investment  Management  Corporation  and  President  and
                                            Trustee   of   Anchor   Capital   Accumulation   Trust,   Anchor
                                            International Bond Trust, Anchor Gold and Currency Trust, Anchor
                                            Resources  and  Commodities  Trust and Anchor  Strategic  Assets
                                            Trust.  Mr.  Putnam was formerly  Director of Trust Realty Corp.
                                            and Bow  Ridge  Mining  Co.  Mr.  Putnam is also a  Director  or
                                            Trustee of each of the funds managed by Pilgrim Investments.

John R. Smith                Trustee        President of New England  Fiduciary  Company  (since 1991).  Mr.
(Age 76)                                    Smith  is  Chairman  of  Massachusetts   Educational   Financing
                                            Authority (since 1987),  Vice Chairman of  Massachusetts  Health
                                            and Education  Authority (since 1979) and  Vice-Chairman of MHI,
                                            Inc.  (Massachusetts  Non-Profit Energy  Purchasers  Consortium)
                                            (since 1996). Mr. Smith is also a Director or Trustee of each of
                                            the funds managed by Pilgrim Investments.

* Robert W. Stallings        Trustee        Chairman,  Chief  Executive  Officer  and  President  of Pilgrim
(Age 51)                                    Group, Inc.  ("Pilgrim Group") (since December 1994);  Chairman,
                                            Pilgrim  Investments  and  Pilgrim  Securities,  Inc.  ("Pilgrim
                                            Securities")   (since  December   1994);   President  and  Chief
                                            Executive  Officer  of Pilgrim  Funding,  Inc.  (since  November
                                            1999);  and  President  and Chief  Executive  Officer of Pilgrim
                                            Capital  Corporation  (since October 1999) and its  predecessors
                                            (since August 1991). Mr. Stallings is also a Director,  Trustee,
                                            or a member of the Advisory Board of each of the Pilgrim Funds.

*John G. Turner              Trustee/       Chairman  and Chief  Executive  Officer of  ReliaStar  Financial
(Age 60)                     Chairman       Corp. and ReliaStar Life Insurance Co. (since 1993); Chairman of
                                            ReliaStar  Life  Insurance  Company  of New York  (since  1995);
                                            Chairman of Northern Life Insurance  Company  (since 1992).  Mr.
                                            Turner was formerly Director of Northstar Investment  Management
                                            Corporation  and its  affiliates  (1993 - 1999) and President of
                                            ReliaStar  Financial  Corp.  and  ReliaStar  Life  Insurance Co.
                                            (1989-1991).  Mr.  Turner is also  Chairman of each of the funds
                                            managed by Pilgrim Investments.
</TABLE>
                                        3
<PAGE>
<TABLE>
<CAPTION>
                        POSITION(S) TO BE
                            HELD WITH
    NAME AND AGE            THE FUNDS                      PRINCIPAL OCCUPATION DURING PAST 5 YEARS
    ------------            ---------                      ----------------------------------------
<S>                          <C>            <C>
David Wallace                Trustee        Chairman  of  FECO  Engineered  Systems,  Inc.  Mr.  Wallace  is
(Age 76)                                    President  and  Trustee  of  the  Robert  R.  Young  Foundation,
                                            Governor of the New York Hospital,  Trustee of Greenwit Hospital
                                            and Director of UMC  Electronics and Zurn  Industries,  Inc. Mr.
                                            Wallace was formerly Chairman of Lone Star Industries and Putnam
                                            Trust  Company,  Chairman  and Chief  Executive  Officer of Todd
                                            Shipyards,  Bangor Punta Corporation,  and National Securities &
                                            Research Corporation.  Mr. Wallace is also a Director or Trustee
                                            of each of the funds managed by Pilgrim Investments.
</TABLE>
----------
* An "interested person" as defined in Section 2(a)(19) of the 1940 Act.

     During  the  most  recent  fiscal  year,   the  Board  of  Pilgrim   Growth
Opportunities  Fund  held  five  meetings  and the  Board  of  Pilgrim  SmallCap
Opportunities Fund held six meetings. Each Trustee attended at least 75% of such
meetings during the period in which such Trustee served as a Trustee.

COMMITTEES

     The Board of Trustees of each Fund has an Audit Committee whose function is
to meet with the  independent  auditors  for the Fund to review the scope of the
Fund's audit, the Fund's financial  statements and interim accounting  controls,
and to meet with management  concerning these matters,  among other things.  The
Committee for each Fund currently consists of the following  Trustees:  David W.
Wallace, Paul S. Doherty,  Robert B. Goode and John R. Smith. Mary A. Baldwin is
an Advisory  Board Member of this  committee.  Prior to November  16, 1999,  the
Committees consisted of David W. Wallace,  Paul S. Doherty,  Alan Gosule, Walter
H. May and John R. Smith.  During the year ended  December 31, 1999,  each Audit
Committee met one time. Each member of each Audit Committee  attended all of the
meetings during the period in which he or she was a member of the Committee.

     The Board of Trustees of each Fund has a Valuation Committee whose function
is to review the  determination of the value of securities held by the Funds for
which market quotations are not available. The Committee for each Fund currently
consists of the following Trustees:  Jock Patton, Al Burton, Alan Gosule, Walter
H. May and  David  W.C.  Putnam.  Prior to  November  16,  1999,  the  Valuation
Committee  consisted of Paul Doherty and Robert Goode.  The Valuation  Committee
did not meet during the fiscal year ended December 31, 1999.

     The Board of Trustees of each Fund has an  Executive  Committee  to act for
the full Board if  necessary  in the event that Board  action is needed  between
regularly  scheduled  Board  meetings.  The  Committee  for each Fund  currently
consists of the following Trustees:  Robert W. Stallings, John G. Turner, Walter
H. May and Jock Patton. The Executive Committee was created on January 27, 2000,
and therefore did not meet during the fiscal year ended December 31, 1999.

     The Board of  Trustees  of each  Fund has a  Nominating  Committee  for the
purpose of considering  candidates to fill Independent  Trustee vacancies on the
Board. The Nominating Committee of each Fund currently consists of the following
Trustees: Walter H. May, Al Burton, Paul S. Doherty and Robert B. Goode. Mary A.
Baldwin is an Advisory Board Member of this committee.  The Nominating Committee
was created on  November  16, 1999 and did not meet during the fiscal year ended
December 31, 1999.  Neither Fund  currently has a policy  regarding  whether the
Nominating  Committee will consider nominees  recommended by shareholders of the
Fund.

     The Boards of Trustees of the Funds  currently  do not have a  Compensation
Committee.

                                        4
<PAGE>
REMUNERATION OF TRUSTEES AND OFFICERS

     Each Fund currently pays each Trustee who is not an "interested  person" of
Pilgrim  Investments  a pro rata share,  as  described  below,  of (i) an annual
retainer of $20,000;  (ii) $5,000 per quarterly  Board  meeting;  (iii) $500 per
committee  meeting;  (iv)  $500  per  special  or  telephonic  meeting;  and (v)
out-of-pocket  expenses.  The pro rata  share  paid by each Fund is based on the
Fund's  average net assets as a percentage  of the average net assets of all the
funds managed by Pilgrim  Investments  for which the Trustees serve in common as
Directors or Trustees or as Advisory  Board Members,  if applicable.  Certain of
the   funds   had   different   compensation   schedules   in   place   for  the
Directors/Trustees during portions of 1999.

     The  following  table  sets  forth  the  compensation  paid  to each of the
Trustees of each Fund for the fiscal year ended December 31, 1999.  Trustees who
are  interested  persons of the Funds do not receive any  compensation  from the
Funds. In the column headed "Total Compensation From Funds and Fund Complex Paid
to Trustees," the number in parentheses  indicates the total number of boards in
the Pilgrim Fund complex on which the Trustee served during that year.

<TABLE>
<CAPTION>
                              AGGREGATE COMPENSATION    AGGREGATE COMPENSATION   TOTAL COMPENSATION FROM
                                   FROM GROWTH               FROM SMALLCAP        FUNDS AND FUND COMPLEX
NAME OF PERSON, POSITION        OPPORTUNITIES FUND        OPPORTUNITIES FUND         PAID TO TRUSTEES
------------------------        ------------------        ------------------         ----------------
<S>                                   <C>                       <C>                  <C>
Al Burton (1)                                                                           $ 45,875
  Trustee                             $   385                   $   385              (15 companies)
Paul S. Doherty                                                                         $ 27,125
  Trustee                             $ 1,493                   $ 1,491              (15 companies)
Robert B. Goode                                                                         $ 26,625
  Trustee                             $ 1,455                   $ 1,453              (15 companies)
Alan L. Gosule                                                                          $ 25,125
  Trustee                             $ 1,346                   $ 1,346              (15 companies)
Mark S. Jordahl (2) (3)                                                                 $      0
  Trustee                             $     0                   $     0               (6 companies)
Mark L. Lipson (2)                                                                      $      0
  Trustee                             $     0                   $     0              (15 companies)
Walter H. May                                                                           $ 27,125
  Trustee                             $ 1,493                   $ 1,491              (15 companies)
Jock Patton (1)                                                                         $ 45,875
  Trustee                             $   385                   $   385              (15 companies)
David W.C. Putnam                                                                       $ 24,375
  Trustee                             $ 1,321                   $ 1,353              (15 companies)
John R. Smith                                                                           $ 27,125
  Trustee                             $ 1,493                   $ 1,491              (15 companies)
Robert W. Stallings (1) (2)                                                             $      0
  Trustee                             $     0                   $     0              (15 companies)
John G. Turner (2)                                                                      $      0
  Trustee                             $     0                   $     0              (15 companies)
David W. Wallace                                                                        $ 24,875
  Trustee                             $ 1,359                   $ 1,392              (15 companies)
</TABLE>

----------
(1)  Messrs.  Burton,  Patton and  Stallings  were elected as Trustees of Growth
     Opportunities Fund and SmallCap Opportunities Fund on November 16, 1999.
(2)  "Interested  person,"  as defined  in the 1940 Act of Pilgrim  Investments,
     because of affiliation with Pilgrim Investments.
(3)  Mr. Jordahl resigned as a Trustee effective November 16, 1999.


                                        5
<PAGE>
VOTE REQUIRED

     Shareholders of each Fund must separately  approve the election of Nominees
for that Fund. For each Fund, the  affirmative  vote of a majority of the shares
of that Fund voting at the  Meeting is required to approve the  election of each
Nominee for that Fund.

         THE BOARD OF TRUSTEES OF EACH FUND, INCLUDING A MAJORITY OF THE
          INDEPENDENT TRUSTEES, RECOMMENDS THAT YOU VOTE "FOR" EACH OF
                       THE NOMINEES UNDER PROPOSAL NO. 1.

                                 PROPOSAL NO. 2
            APPROVAL OF AMENDMENT TO INVESTMENT MANAGEMENT AGREEMENTS

     Shareholders  of each Fund are being asked to approve an  Amendment  to the
Investment  Management  Agreement  ("Amendment")  between  each Fund and Pilgrim
Investments which will increase the advisory fee payable to Pilgrim Investments.
On April 27,  2000,  a majority of each Fund's  Board of  Trustees,  including a
majority of the Independent  Trustees,  approved the Amendment.  As discussed in
more detail below, the Proposal would increase the fees as follows:

                     FUND                   CURRENT FEE(1)   PROPOSED FEE(1)
                     ----                   --------------   ---------------
     Pilgrim Growth Opportunities Fund          0.75%             0.95%
     Pilgrim SmallCap Opportunities Fund        0.75%             1.00%

----------
(1)  As a percentage of the Fund's average daily net assets.

     The proposed  Amendment is attached as Appendix A to this proxy  statement.
The terms of the Investment Management Agreements,  other than the fee, will not
be changed by the proposed  Amendment.  Further information about the Investment
Management  Agreements,  the termination and renewal procedures and the services
provided  by Pilgrim  Investments  can be found under  "Terms of the  Investment
Management Agreements."

     Shareholders  of each Fund are being  asked to approve the  Amendment.  Set
forth  below is a  description  of the  changes in the fee  schedule  that would
result if the Amendment is approved.

REASONS FOR AMENDMENT OF THE INVESTMENT MANAGEMENT AGREEMENTS

     An increase in advisory fee is proposed because of the expenses  associated
with building and  sustaining a strong  growth asset  management  team.  Pilgrim
Investments is committed to bringing high quality asset  management  services to
Growth  Opportunities Fund, SmallCap  Opportunities Fund, and other growth funds
in the Pilgrim group of funds. Towards this end, Pilgrim Investments has built a
growth asset  management team around Mary Lisanti,  Executive Vice President and
Chief Investment Officer - Equities, who is primarily responsible for management
of SmallCap  Opportunities Fund and is co-manager of Growth  Opportunities Fund.
Ms. Lisanti has been with Pilgrim  Investments or its affiliates since May 1998.
The investment  professionals  involved in the management of these Funds are the
persons  listed below,  and the year they began with Pilgrim  Investments or its
affiliates is listed below:

                                        6
<PAGE>
           NAME             CORPORATE OR JOB TITLE        DATE OF HIRE
           ----             ----------------------        ------------
     Mary Lisanti           Executive Vice President      May 26, 1998
     Jeffrey Bernstein      Senior Vice President         June 1, 1998
     Joan Stack             Vice President                June 1, 1998
     Peter McNally          Assistant Vice President      August 3, 1998
     Allison Adler          Assistant Vice President      April 12, 1999
     Bob Harris             Junior Analyst                August 5, 1998
     John Campos            Junior Analyst                January 27, 1997
     Jeff Ferro             Junior Analyst                February 7, 2000
     Bernadette Cruz        Assistant                     February 28, 2000
     Brent Shelton          Assistant                     February 7, 2000

     During  the  time  that Ms.  Lisanti  has been  primarily  responsible  for
managing or co-managing Growth  Opportunities and SmallCap  Opportunities Funds,
these Funds have enjoyed strong returns, as shown below:*

<TABLE>
<CAPTION>
                              SINCE BEGINNING OF                                                  PERFORMANCE
                                 MANAGEMENT BY                                                      RANKING
                                CURRENT GROWTH                                        1/01/00       1/01/00
                                 TEAM THROUGH      YEAR ENDED      PERFORMANCE        THROUGH       THROUGH
               FUND             12/31/99 (1)(2)   12/31/99 (2)   RANKING 1999 (3)   6/30/00 (2)   6/30/00 (3)
               ----                 -------       ------------   ----------------   -----------   -----------
<S>                                  <C>            <C>              <C>               <C>          <C>
GROWTH OPPORTUNITIES FUND            69.48%          82.14%          31/1149           -5.03%       889/1476
S&P 500 Index                        22.71%          21.04%              N/A           -0.42%            N/A
SMALLCAP OPPORTUNITIES FUND          73.08%         132.73%            7/757            1.60%        371/862
Russell 2000 Index                    8.25%          21.26%              N/A            3.05%            N/A
</TABLE>

----------
(1)  July 1998 for  SmallCap  Opportunities  Fund,  and  August  1998 for Growth
     Opportunities Fund.
(2)  Performance  figures are for Class A shares of each Fund,  net of operating
     expenses,  including sales load, and assuming reinvestment of all dividends
     and distributions.
(3)  Performance  of  Class A  shares  of  multiclass  funds  (net of  operating
     expenses,  excluding sales load, and assuming reinvestment of all dividends
     and distributions) from the Lipper universe of Funds.

     While these  returns,  particularly  those  earned in 1999,  likely are not
sustainable,  Pilgrim  Investments  has  committed to providing the resources it
believes are necessary to maintain a high quality growth asset  management team.
This  commitment  requires  sufficient  resources  to pay for the  costs of high
caliber personnel such as those mentioned above and for other resources.

     In light of this commitment,  Pilgrim Investments' expenses have increased,
and further  expenses are  anticipated in the future,  as described  below.  The
compensation paid to investment management,  compliance, and other personnel who
provide services to Pilgrim  Investments on behalf of the Funds has increased as
a result of competition with other firms. In particular,  compensation  expenses
for  experienced  investment  personnel  have  increased  substantially  and are
expected  to  increase  more  in the  foreseeable  future.  Pilgrim  Investments
believes that this increase in advisory fees will, over the longer term,  better
enable it to continue to provide high-quality management services to each Fund.

     Pilgrim  Investments  further  reported  to the Board  that it  intends  to
enhance its research  capabilities for both Funds, which will require hiring new
personnel. For example, Pilgrim Investments wishes to begin researching a larger
universe of companies for the SmallCap Opportunities Fund.

----------
*    Past performance may have been the result of investing in certain unusually
     "hot"  industries,  IPOs or other  factors  that may or may not continue to
     exist.  There is no assurance  that these methods will continue to have the
     same impact on future  returns.  The Funds have  benefited  from  unusually
     favorable market  conditions;  it is probable that the performance will not
     be repeated in the future.

                                        7
<PAGE>
     Pilgrim   Investments  also  faces  other  escalating   expenses.   Pilgrim
Investments  does not  currently  maintain  an office in New York City.  Pilgrim
Investments  has informed the Funds'  Boards that the presence of a new New York
office is important to provide  appropriate  access to  management  of portfolio
companies,  who typically make New York a regular stop to talk to the investment
management  community.  Pilgrim  Investments  informed the Boards that expansion
would be costly,  as rental space in New York demands a premium rate and it also
would be necessary to build an  administrative  infrastructure  in New York.  In
addition,  Pilgrim  Investments  intends to invest in new trading facilities for
the New York  office,  which will provide  Pilgrim  Investments  with  increased
analytical  capabilities.  The increase in advisory fees for the Funds is sought
to support  Pilgrim  Investments'  commitment to building and  sustaining a high
quality  growth  asset  management  team.  The  Board of  Trustees  of each Fund
believes  that the  increases  in  advisory  fees are in the best  interests  of
shareholders.

EFFECT OF THE PROPOSED FEES

     As stated  above,  the  proposed  amendment  to the  Investment  Management
Agreements would increase each Fund's current  investment  advisory fee of 0.75%
per year (as a percentage of each Fund's  average daily net assets) to 0.95% for
Growth  Opportunities  Fund and to 1.00% for SmallCap  Opportunities  Fund.  Set
forth  below is a table  showing  the dollar  amount of the  advisory  fees paid
during the fiscal year ended December 31, 1999 under the  Investment  Management
Agreements  and the  dollar  amount of fees that  would have been paid under the
Amendment.  The table also shows the  differences  (expressed as a percentage of
existing fees) between the amounts that would have been paid under the Amendment
and the amounts actually paid under the Investment Management  Agreements.  Also
set forth  below are  comparative  fee  tables  showing  the  amount of fees and
expenses  paid by the Funds as a percentage  of average  daily net assets during
the fiscal  year ended  December  31,  1999 and the amount of fees and  expenses
shareholders  would have paid if the  Amendment  had been in effect for the year
ended December 31, 1999.

                DOLLAR AMOUNT OF INVESTMENT MANAGEMENT FEES PAID
                         (year ended December 31, 1999)

                                                                  PERCENTAGE
                 FUND               EXISTING FEE   PROPOSED FEE   DIFFERENCE
                 ----               ------------   ------------   ----------
     Growth Opportunities Fund       $1,865,457     $2,362,912      26.67%
     SmallCap Opportunities Fund     $1,915,854     $2,554,472      33.33%

GROWTH OPPORTUNITIES FUND

<TABLE>
<CAPTION>
                                       CLASS A                                         CLASS B
                      --------------------------------------------   --------------------------------------------
                       CURRENT ANNUAL FUND   PROPOSED ANNUAL FUND    CURRENT ANNUAL FUND    PROPOSED ANNUAL FUND
                      OPERATING EXPENSES(1)  OPERATING EXPENSES(1)   OPERATING EXPENSES(1)  OPERATING EXPENSES(1)
                      ---------------------  ---------------------   ---------------------  ---------------------
<S>                           <C>                    <C>                     <C>                    <C>
MANAGEMENT FEE                0.75%                  0.95%                   0.75%                  0.95%
12B-1 FEE                     0.30%                  0.30%                   1.00%                  1.00%
OTHER EXPENSES                0.34%                  0.34%                   0.35%                  0.35%
OPERATING EXPENSES            1.39%                  1.59%                   2.10%                  2.30%

                                       CLASS C                                          CLASS I
                      --------------------------------------------   --------------------------------------------
                       CURRENT ANNUAL FUND   PROPOSED ANNUAL FUND     CURRENT ANNUAL FUND   PROPOSED ANNUAL FUND
                      OPERATING EXPENSES(1)  OPERATING EXPENSES(1)   OPERATING EXPENSES(1)  OPERATING EXPENSES(1)
                      ---------------------  ---------------------   ---------------------  ---------------------
MANAGEMENT FEE                0.75%                  0.95%                   0.75%                  0.95%
12B-1 FEE                     1.00%                  1.00%                    N/A                    N/A
OTHER EXPENSES                0.35%                  0.35%                   0.25%                  0.25%
OPERATING EXPENSES            2.10%                  2.30%                   1.00%                  1.20%
</TABLE>

                                        8
<PAGE>
<TABLE>
<CAPTION>
                                       CLASS Q                                          CLASS T
                      --------------------------------------------   --------------------------------------------
                       CURRENT ANNUAL FUND   PROPOSED ANNUAL FUND    CURRENT ANNUAL FUND    PROPOSED ANNUAL FUND
                      OPERATING EXPENSES(1)  OPERATING EXPENSES(1)   OPERATING EXPENSES(1)  OPERATING EXPENSES(1)
                      ---------------------  ---------------------   ---------------------  ---------------------
<S>                           <C>                    <C>                    <C>                    <C>
MANAGEMENT FEE                0.75%                  0.95%                  0.75%                  0.95%
12B-1 FEE                     0.25%                  0.25%                  0.95%                  0.95%
OTHER EXPENSES                0.34%                  0.34%                  0.33%                  0.33%
OPERATING EXPENSES            1.34%                  1.54%                  2.03%                  2.23%
</TABLE>

----------
(1)  The  calculations  in the fee tables are based on the Fund's  expenses as a
     percentage of net assets.

EXAMPLES

     The  following  examples  help compare the costs of investing in the Growth
Opportunities  Fund under the Investment  Management  Agreement and after giving
effect to the fee increase in the proposed Amendment.

                  CURRENT FEE RATE                    PROPOSED FEE RATE
          ---------------------------------   ---------------------------------
          1 YEAR  3 YEARS  5 YEARS  10 YEARS  1 YEAR  3 YEARS  5 YEARS  10 YEARS
          ------   ------   ------   ------   ------   ------   ------   ------
CLASS A   $  709   $  990   $1,292   $2,148   $  727   $1,048   $1,391   $2,356
CLASS B   $  713   $  958   $1,329   $2,250   $  733   $1,018   $1,430   $2,458
CLASS C   $  313   $  658   $1,129   $2,431   $  333   $  718   $1,230   $2,636
CLASS I   $  102   $  318   $  552   $1,225   $  122   $  381   $  660   $1,455
CLASS Q   $  136   $  425   $  734   $1,613   $  157   $  486   $  839   $1,835
CLASS T   $  606   $  837   $1,093   $2,194   $  626   $  897   $1,195   $2,403

     The hypothetical examples assume that all dividends and other distributions
are  reinvested at net asset value,  that the  percentage  amounts  listed under
Other  Expenses above remain the same in the years shown and shares are redeemed
at the end of each period.  The assumption in the hypothetical  examples of a 5%
annual  return  is  required  by  regulation  of  the  Securities  and  Exchange
Commission;  the assumed 5% annual  return is not a prediction  of, and does not
represent, the projected or actual performance of the Fund's Shares.

     THE FOREGOING EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

SMALLCAP OPPORTUNITIES FUND

<TABLE>
<CAPTION>
                                       CLASS A                                         CLASS B
                      --------------------------------------------   --------------------------------------------
                       CURRENT ANNUAL FUND   PROPOSED ANNUAL FUND     CURRENT ANNUAL FUND   PROPOSED ANNUAL FUND
                      OPERATING EXPENSES(1)  OPERATING EXPENSES(1)   OPERATING EXPENSES(1)  OPERATING EXPENSES(1)
                      ---------------------  ---------------------   ---------------------  ---------------------
<S>                           <C>                    <C>                     <C>                    <C>
MANAGEMENT FEE                0.75%                  1.00%                   0.75%                  1.00%
12B-1 FEE                     0.30%                  0.30%                   1.00%                  1.00%
OTHER EXPENSES                0.38%                  0.38%                   0.40%                  0.40%
OPERATING EXPENSES            1.43%                  1.68%                   2.15%                  2.40%

                                       CLASS C                                         CLASS I
                      --------------------------------------------   --------------------------------------------
                       CURRENT ANNUAL FUND   PROPOSED ANNUAL FUND     CURRENT ANNUAL FUND   PROPOSED ANNUAL FUND
                      OPERATING EXPENSES(1)  OPERATING EXPENSES(1)   OPERATING EXPENSES(1)  OPERATING EXPENSES(1)
                      ---------------------  ---------------------   ---------------------  ---------------------
MANAGEMENT FEE                0.75%                  1.00%                   0.75%                  1.00%
12B-1 FEE                     1.00%                  1.00%                    N/A                    N/A
OTHER EXPENSES                0.43%                  0.43%                   0.38%                  0.38%
OPERATING EXPENSES            2.18%                  2.43%                   1.13%                  1.38%
</TABLE>

                                        9
<PAGE>
<TABLE>
<CAPTION>
                                       CLASS Q                                         CLASS T
                      --------------------------------------------   --------------------------------------------
                       CURRENT ANNUAL FUND    PROPOSED ANNUAL FUND    CURRENT ANNUAL FUND   PROPOSED ANNUAL FUND
                      OPERATING EXPENSES(1)   OPERATING EXPENSES(1)  OPERATING EXPENSES(1)  OPERATING EXPENSES(1)
                      ---------------------  ---------------------   ---------------------  ---------------------
<S>                           <C>                    <C>                     <C>                    <C>
MANAGEMENT FEE                0.75%                  1.00%                   0.75%                  1.00%
12B-1 FEE                     0.25%                  0.25%                   0.95%                  0.95%
OTHER EXPENSES                0.38%                  0.38%                   0.36%                  0.36%
OPERATING EXPENSES            1.38%                  1.63%                   2.06%                  2.31%
</TABLE>

----------
(1)  The  calculations  in the fee tables are based on the Fund's  expenses as a
     percentage of net assets.

EXAMPLES

     The following  examples help compare the costs of investing in the SmallCap
Opportunities  Fund under the Investment  Management  Agreement and after giving
effect to the fee increase in the proposed Amendment.

                  CURRENT FEE RATE                    PROPOSED FEE RATE
          ---------------------------------   ---------------------------------
          1 YEAR  3 YEARS  5 YEARS  10 YEARS  1 YEAR  3 YEARS  5 YEARS  10 YEARS
          ------   ------   ------   ------   ------   ------   ------   ------
CLASS A   $  712   $1,001   $1,312   $2,190   $  736   $1,074   $1,435   $2,448
CLASS B   $  718   $  973   $1,354   $2,300   $  743   $1,048   $1,480   $2,558
CLASS C   $  321   $  682   $1,169   $2,513   $  346   $  758   $1,296   $2,766
CLASS I   $  115   $  359   $  622   $1,375   $  141   $  437   $  755   $1,657
CLASS Q   $  141   $  437   $  755   $1,657   $  166   $  514   $  887   $1,933
CLASS T   $  609   $  846   $1,108   $2,228   $  634   $  921   $1,235   $2,488

     The hypothetical examples assume that all dividends and other distributions
are  reinvested at net asset value,  that the  percentage  amounts  listed under
Other  Expenses above remain the same in the years shown and shares are redeemed
at the end of each period.  The assumption in the hypothetical  examples of a 5%
annual  return  is  required  by  regulation  of  the  Securities  and  Exchange
Commission;  the assumed 5% annual  return is not a prediction  of, and does not
represent, the projected or actual performance of the Fund's Shares.

     THE FOREGOING EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

TERMS OF THE INVESTMENT MANAGEMENT AGREEMENTS

     The  Investment  Management  Agreements  were last  approved by each Fund's
Board of Trustees,  including a majority of the Trustees who were not parties to
the  Investment  Management  Agreements  or  interested  persons of such parties
("Independent  Trustees") at a meeting held on April 27, 2000. The  shareholders
for each Fund last approved the Investment Management Agreements with respect to
those Funds on June 2, 1995.

     The terms of the Investment Management Agreements, other than those related
to the amount of the fee, will not be changed by the proposed Amendment.

     SERVICES PROVIDED.  Each Investment  Management  Agreement requires Pilgrim
Investments  to provide,  subject to the  supervision  of the Board of Trustees,
investment advice and investment  services to the Fund and to furnish advice and
recommendations with respect to investment of the Fund's assets and the purchase
or  sale  of  its  portfolio  securities.   Pilgrim  Investments  also  provides
investment research and analysis.

     LIABILITY OF THE ADVISER. The Investment Management Agreements provide that
Pilgrim  Investments  is not  subject to  liability  to the Funds for any act or
omission  in the course of, or  connected  with,  rendering  services  under the
Investment  Management Agreement,  except by reason of willful misfeasance,  bad
faith,  gross  negligence or reckless  disregard of its  obligations  and duties
under the Investment Management Agreements.

                                       10
<PAGE>
     TERMINATION.   The   Investment   Management   Agreements   will  terminate
automatically  in the event of  assignment.  In addition,  each Agreement may be
terminated by Pilgrim  Investments  upon not more than sixty days' nor less than
thirty  days'  written  notice to the  Fund,  and by the Fund upon the vote of a
majority of the Fund's Board of Trustees or a majority of the outstanding voting
shares of the Fund,  upon not more than sixty days' nor less than  thirty  days'
written notice to Pilgrim Investments.

INFORMATION ABOUT PILGRIM INVESTMENTS

     Organized  in  December  1994,  Pilgrim  Investments  is  registered  as an
investment adviser with the Securities and Exchange  Commission.  As of February
29, 2000,  Pilgrim  Investments  managed over $16.6  billion in assets.  Pilgrim
Investments is an indirect  wholly-owned  subsidiary of ReliaStar.  On April 30,
2000,  ReliaStar  entered  into an  agreement  to be  acquired by ING Groep N.V.
Through its  subsidiaries,  ReliaStar offers  individuals and institutions  life
insurance and  annuities,  employee  benefits  products and  services,  life and
health reinsurance,  retirement plans, mutual funds, bank products, and personal
finance education.

     Prior to April 30, 2000, Pilgrim Advisors, Inc. ("Pilgrim Advisors") served
as investment adviser to the Funds. On April 30, 2000, Pilgrim Advisors, also an
indirect wholly-owned subsidiary of ReliaStar,  merged with Pilgrim Investments,
and Pilgrim Investments is the surviving  corporation from that merger.  Pilgrim
Investments'  principal address is 40 North Central Avenue, Suite 1200, Phoenix,
Arizona 85004.

     Appendix B to this proxy statement contains a list of registered investment
companies  for  which  Pilgrim  Investments  acts  as  investment  adviser  with
investment  objectives and policies similar to those of the Funds, a list of the
directors  and  principal  executive  officers  of  Pilgrim   Investments,   and
information  regarding  fees  that  have  been  paid  by the  Funds  to  Pilgrim
Investments and certain of its affiliates  during each Fund's most recent fiscal
year.

     From time to time,  Pilgrim  Investments  receives  brokerage  and research
services from brokers that execute  securities  transactions  for certain of the
Funds.  The commission paid by a Fund to a broker that provides such services to
Pilgrim Investments may be greater than the commission would be if the Fund used
a broker  that  does not  provide  the same  level  of  brokerage  and  research
services.  Additionally,  Pilgrim  Investments may use such services for clients
other than the  specific  Fund or Funds from which the related  commissions  are
derived.

BOARD OF TRUSTEES' ANALYSIS AND RECOMMENDATION

     In determining  whether or not it was  appropriate to approve the Amendment
and to recommend approvals to shareholders, the Board of Trustees for each Fund,
including the  Independent  Trustees,  considered  various matters and materials
provided by Pilgrim  Investments,  including  the factors  described  above.  In
addition to the factors mentioned above, the Independent Trustees considered (1)
the nature,  quality and scope of the services  provided to each Fund by Pilgrim
Investments,  including  each Fund's  performance  and its favorable  historical
rankings against comparable funds; (2) Pilgrim  Investments' current expenses as
well as  anticipated  expenses  in  managing  the Funds;  (3)  expenses  Pilgrim
Investments  has spent and will continue to incur building and sustaining a high
quality growth asset  management  team,  including  expenses of maintaining  and
enhancing its ability to retain and attract high caliber personnel to serve each
Fund;  (4)  the  complexity  of  research  and  investment  activities;  (5) the
performance  of Pilgrim  Investments  in meeting other  obligations to the Funds
under  the   Administrative   Services   Agreement,   including  its  oversight,
administrative,  and  compliance  monitoring  services;  (6) the  effect  of the
proposed investment advisory fee increase on the expense ratio of each Fund; (7)
comparative  data to comparable funds as to investment  performance,  investment
advisory  fees,  and expense  ratios;  and (8) the  estimated  profitability  of
Pilgrim Investments under the Investment  Management  Agreements,  especially in
light of increasing costs, and the effect on estimated  profitability  under the
increased investment advisory fee.

     After   reviewing  and   analyzing   the  materials   provided  by  Pilgrim
Investments,  the Board of Trustees of each Fund concluded that the compensation
to be paid to  Pilgrim  Investments  under the  proposed  Amendment  is fair and
reasonable.  The Boards  believe  that  approving  the  Amendment is in the best
interests of the Funds and their shareholders.  Accordingly, after consideration

                                       11
<PAGE>
of the above  factors,  and such other  factors and  information  it  considered
relevant, the Boards of Trustees unanimously approved the Amendment and voted to
recommend their approval by the Funds' shareholders.

     If the Amendment is approved by each Fund's  shareholders,  the  Investment
Management   Agreements  will  continue  from  year  to  year,   unless  earlier
terminated,  provided that such continuance is specifically approved (i) by each
Fund's Board of Trustees or by the vote of a majority of the outstanding  voting
securities of each Fund,  and, in either case, (ii) by a majority of each Fund's
Independent  Trustees.  In the event that  shareholders of a Fund do not approve
the Amendment,  Pilgrim  Investments  would continue to serve as adviser to that
Fund under the Investment Management Agreement, and the Trustees of the Fund may
consider other  possible  courses of action to accomplish the purposes for which
the  Proposal  has  been  made,  subject,  as  required,   to  approval  by  the
shareholders of the Fund.

VOTE REQUIRED

     Shareholders of each Fund must separately approve the applicable  Amendment
with respect to that Fund.  Approval of this Proposal No. 2 by a Fund requires a
"Majority Vote." For purposes of this requirement,  a "Majority Vote" shall mean
a "majority of the outstanding  voting securities" of the Fund as defined in the
1940 Act, as amended, I.E., (i) 67% or more of the shares of the Fund present at
the Meeting if more than 50% of the  outstanding  shares of the Fund are present
or represented by proxy, or (ii) more than 50% of the outstanding  shares of the
Fund.

   THE BOARD OF TRUSTEES OF EACH FUND, INCLUDING A MAJORITY OF THE INDEPENDENT
          TRUSTEES, RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL NO. 2.

                                 PROPOSAL NO. 3
         APPROVAL OF NEW INVESTMENT MANAGEMENT AGREEMENTS TO TAKE EFFECT
            UPON COMPLETION OF THE PROPOSED ACQUISITION OF RELIASTAR
                        FINANCIAL CORP. BY ING GROEP N.V.

     3a.  APPROVAL  OF NEW  INVESTMENT  MANAGEMENT  AGREEMENTS  IF PROPOSAL 2 IS
          APPROVED BY SHAREHOLDERS

     3b.  APPROVAL OF NEW INVESTMENT  MANAGEMENT AGREEMENTS IF PROPOSAL 2 IS NOT
          APPROVED BY SHAREHOLDERS

     On April 30, 2000, ReliaStar Financial Corp.  ("ReliaStar") entered into an
agreement (the  "Transaction")  to be acquired by ING Groep N.V.  ("ING").  As a
result of this  potential  change in  ownership,  shareholders  of the Funds are
being  asked  to  approve  new  Investment   Management   Agreements  (the  "New
Agreements")  between  the Funds and  Pilgrim  Investments.  APPROVAL OF THE NEW
AGREEMENTS  IS  SOUGHT  SO  THAT  THE  MANAGEMENT  OF  EACH  FUND  CAN  CONTINUE
UNINTERRUPTED   AFTER  THE  TRANSACTION,   BECAUSE  THE  INVESTMENT   MANAGEMENT
AGREEMENTS IN EFFECT AT THE TIME OF THE TRANSACTION  (THE "CURRENT  AGREEMENTS")
MAY TERMINATE AUTOMATICALLY AS A RESULT OF THE TRANSACTION.

     Shareholders  are  being  asked  to  vote  on two  versions  of the  Funds'
Investment  Management  Agreements because it is unknown whether Proposal 2 will
be approved by shareholders.  In Proposal 3a,  shareholders are asked to approve
Investment  Management  Agreements  as  amended  by the  Amendment  proposed  in
Proposal 2 of this Proxy  Statement.  In Proposal 3b,  shareholders are asked to
approve  Investment  Management  Agreements  which do not include the  Amendment
proposed in Proposal 2. IF THE  SHAREHOLDERS OF A FUND APPROVE  PROPOSAL 2, ONLY
PROPOSAL 3A WILL BE VOTED UPON AT THE MEETING.  IF THE SHAREHOLDERS OF A FUND DO
NOT APPROVE PROPOSAL 2, ONLY PROPOSAL 3B WILL BE VOTED UPON AT THE MEETING.

     The Board of Trustees of each Fund recommends that  shareholders vote "FOR"
both Proposal 3a and 3b.

                                       12
<PAGE>
GENERAL INFORMATION

     ING is a global  financial  institution  active in the fields of insurance,
banking, and asset management.  Headquartered in Amsterdam, it conducts business
in more than 60 countries, and has almost 90,000 employees. ING seeks to provide
a full  range of  integrated  financial  services  to  private,  corporate,  and
institutional clients through a variety of distribution channels. As of December
31, 1999, ING had total assets of approximately  $471.8 billion and assets under
management of  approximately  $330.3 billion.  ING includes,  among its numerous
direct and  indirect  subsidiaries,  Baring  Asset  Management,  Inc. in Boston,
Mass.,  ING Investment  Management  Advisors B.V. in the Hague, the Netherlands,
Furman Selz Capital Management LLC in New York, N.Y., ING Investment  Management
LLC in Atlanta,  Georgia,  Baring  International  Investment  Limited in London,
England and Baring Asset Management  (Asia) Limited in Hong Kong.  Completion of
the Transaction is contingent upon, among other things, approval by the Board of
Directors/Trustees  of the Pilgrim Funds,  and certain Pilgrim Fund  shareholder
and regulatory approvals.

     In the  transaction,  ING will issue to stockholders of ReliaStar $54.00 in
cash for each share of ReliaStar common stock held by them,  subject to possible
adjustments.  On April  30,  2000,  the total  number  of  shares  of  ReliaStar
outstanding was 89,502,477.

     Pilgrim  Investments  is expected to remain  intact after the  Transaction.
Pilgrim Investments does not currently anticipate that there will be any changes
in the  investment  personnel  primarily  responsible  for the management of the
Funds as a result of the  Transaction.  ING's  principal  executive  offices are
located  at  Strawinskylaan  2631,  1077 ZZ  Amsterdam,  P.O.  Box 810,  1000 AV
Amsterdam, the Netherlands.

     The  Transaction  between  ReliaStar  and  ING is  scheduled  to  close  in
September  2000.  As a  result  of this  transaction,  ReliaStar  will  become a
wholly-owned subsidiary of ING America Insurance Holdings, Inc., a subsidiary of
ING. Pilgrim Investments will remain a wholly-owned subsidiary of ReliaStar. The
change in ownership of Pilgrim  Investments  resulting from this transaction may
be deemed under the 1940 Act to be an assignment of the Current  Agreements (or,
if Proposal 2 has been  approved by  shareholders,  an assignment of the Current
Agreements  as amended by the  Amendment  considered in Proposal 2). The Current
Agreements   provide  for  their  automatic   termination  upon  an  assignment.
Accordingly,  the New Agreements  between Pilgrim  Investments and the Funds are
proposed for approval by shareholders of each Fund.

     Pilgrim  Investments and representatives of ING have advised the Funds that
currently no change is expected in the investment  advisory and other  personnel
in connection with the Transaction and that it is currently anticipated the same
persons  responsible  for  management of the Funds under the Current  Agreements
will continue to be responsible  under the New Agreements.  Pilgrim  Investments
does not anticipate that the Transaction will cause any reduction in the quality
of services  now  provided  to the Funds or have any  adverse  effect on Pilgrim
Investments' ability to fulfill its obligations to the Funds.

     The Current Agreements were last approved by each Fund's Board of Trustees,
including  a  majority  of the  Trustees  who were not  parties  to the  Current
Agreements  or  interested  persons of such  parties,  at a Joint Meeting of the
Board of Trustees held on April 27, 2000.  The  shareholders  for each Fund last
approved the Current Agreements with respect to those Funds on June 2, 1995.

     At the June 13, 2000 meeting of the Board of Trustees,  each New  Agreement
was approved unanimously by the Board of Trustees, including all of the Trustees
who are not interested  parties to the New  Agreements or interested  persons of
such parties.

     If a New Agreement is approved by  shareholders  with respect to each Fund,
it will take effect  immediately  after the closing of the Transaction.  The New
Agreement  will  remain in effect for two years  from the date it takes  effect,
and,  unless  earlier  terminated,  will continue from year to year  thereafter,
provided that each such  continuance is approved  annually (i) by the applicable
Fund's Board of Trustees or by the vote of a majority of the outstanding  voting
securities of the particular  Fund,  and, in either case,  (ii) by a majority of
the Fund's  Trustees  who are not parties to the New  Agreement  or  "interested
persons" of any such party (other than as Trustees of the Fund).

                                       13
<PAGE>
     If the  shareholders  of any Fund should fail to approve the New  Agreement
pertaining  to  that  Fund,  the  Transaction  may  not be  consummated.  If the
Transaction is not  consummated,  Pilgrim  Investments will continue to serve as
adviser for all of the Funds under the Current Agreements.

THE TERMS OF THE NEW AGREEMENTS

     PROPOSAL  3A. If Proposal 2 is  approved,  the terms of each New  Agreement
would be the same in all respects as that of each Fund's Current  Agreement,  as
amended by the  Amendment  described  in Proposal 2. As described in Proposal 2,
the advisory fee for Pilgrim SmallCap  Opportunities  Fund would be 1.00% of the
Fund's  average  daily  net  assets  and the  advisory  fee for  Pilgrim  Growth
Opportunities Fund would be 0.95% of the Fund's average daily net assets. In all
other respects the New Agreements would be the same as the Current Agreements. A
form of each Fund's Current Agreement is attached as Appendix C, and the form of
the Amendment to the Investment Management Agreements is attached as Appendix A.

     PROPOSAL  3B. If Proposal 2 is not  approved,  the terms of each Fund's New
Agreement  would be the same in all respects as that of its  respective  Current
Agreement,  except for the dates.  A form of each Fund's  Current  Agreement  is
attached as Appendix C.

     IF THE  SHAREHOLDERS OF A FUND APPROVE PROPOSAL 2, ONLY PROPOSAL 3A WILL BE
VOTED UPON AT THE MEETING. IF THE SHAREHOLDERS OF A FUND DO NOT APPROVE PROPOSAL
2, ONLY PROPOSAL 3B WILL BE VOTED UPON AT THE MEETING.

     TERMS  OF THE NEW  AGREEMENTS  UNDER  BOTH  PROPOSAL  3A AND 3B.  Each  New
Agreement  would  require  Pilgrim  Investments  to  provide,   subject  to  the
supervision of the Board of Trustees,  investment advice and investment services
to the Fund and to furnish advice and recommendations with respect to investment
of the  Fund's  assets and the  purchase  or sale of its  portfolio  securities.
Pilgrim Investments also would provide investment research and analysis.

     Like the Current Agreements,  each New Agreement would provide that Pilgrim
Investments  is not subject to  liability to the Fund for any act or omission in
the course of, or connected with, rendering services under the Agreement, except
by reason of  willful  misfeasance,  bad faith,  gross  negligence  or  reckless
disregard of its obligations and duties under the Agreement.

     Each New Agreement  could be terminated by a Fund without  penalty upon not
more than sixty days' or less than thirty days'  written  notice by the Board of
Trustees,  by a vote of the  holders  of a majority  of the  Fund's  outstanding
shares voting as a single class, or by Pilgrim  Investments.  Each New Agreement
will terminate automatically in the event of its "assignment" (as defined in the
1940 Act).

INFORMATION ABOUT PILGRIM INVESTMENTS

     Organized  in  December  1994,  Pilgrim  Investments  is  registered  as an
investment adviser with the Securities and Exchange  Commission.  As of February
29, 2000,  Pilgrim  Investments  managed over $16.6  billion in assets.  Pilgrim
Investments is an indirect  wholly-owned  subsidiary of ReliaStar.  On April 30,
2000,  ReliaStar  entered  into an  agreement  to be  acquired by ING Group N.V.
Through its  subsidiaries,  ReliaStar offers  individuals and institutions  life
insurance and  annuities,  employee  benefits  products and  services,  life and
health reinsurance,  retirement plans, mutual funds, bank products, and personal
finance education.

     Prior to April 30, 2000, Pilgrim Advisors, Inc. ("Pilgrim Advisors") served
as investment adviser to the Funds. On April 30, 2000, Pilgrim Advisors, also an
indirect wholly-owned subsidiary of ReliaStar,  merged with Pilgrim Investments,
and Pilgrim Investments is the surviving corporation from that merger. Pilgrim's
principal  address is 40 North  Central  Avenue,  Suite 1200,  Phoenix,  Arizona
85004.

     Appendix B to this proxy statement contains a list of registered investment
companies  for  which  Pilgrim  Investments  acts  as  investment  adviser  with
investment  objectives and policies similar to those of the Funds, a list of the
directors  and  principal  executive  officers  of  Pilgrim   Investments,   and
information  regarding  fees  that  have  been  paid  by the  Funds  to  Pilgrim
Investments and certain of its affiliates  during each Fund's most recent fiscal
year.

                                       14
<PAGE>
     From time to time,  Pilgrim  Investments  receives  brokerage  and research
services from brokers that execute  securities  transactions  for certain of the
Funds.  The commission paid by a Fund to a broker that provides such services to
Pilgrim Investments may be greater than the commission would be if the Fund used
a broker  that  does not  provide  the same  level  of  brokerage  and  research
services.  Additionally,  Pilgrim  Investments may use such services for clients
other than the  specific  Fund or Funds from which the related  commissions  are
derived.

EVALUATION BY THE BOARD OF TRUSTEES

     In  determining  whether  or not it was  appropriate  to  approve  the  New
Agreements  and to recommend  approval to  shareholders,  the Board of Trustees,
including the Trustees who are not  interested  persons of Pilgrim  Investments,
considered various materials and representations provided by Pilgrim Investments
and met with a representative  of ING. The Independent  Trustees were advised by
independent legal counsel with respect to these matters.

     Information  considered by the Trustees  included,  among other things, the
following: (1) Pilgrim Investments' representation that it is expected to remain
intact after the Transaction,  and that the same persons  currently  responsible
for  management  of the Funds are expected to continue to manage the Funds after
the Transaction closes; (2) that the senior management personnel responsible for
the management of Pilgrim Investments are expected to continue to be responsible
for the  management  of Pilgrim  Investments;  (3) that the  compensation  to be
received  by Pilgrim  Investments  under the New  Agreements  is the same as the
compensation  paid under the Current  Agreements  (as  amended by the  Amendment
considered in Proposal 2, if applicable);  (4) ING America  Insurance  Holdings,
Inc.'s representation that it will use reasonable best efforts to assure that an
"unfair  burden"  (as  defined in the 1940 Act) is not imposed on the Funds as a
result of the  Transaction;  (5) the  commonality of the terms and provisions of
the New  Agreements and Current  Agreements;  (6) ING's  financial  strength and
commitment to the advisory business; and (7) Pilgrim Investments' representation
that it will keep any existing expense limitation  agreements in effect until at
least October 31, 2001.

     Further,  the Board of Trustees reviewed its determinations  reached at the
meetings of the Board of Trustees of the Funds on April 27, 2000  respecting the
Current Agreements and, with respect to the Current  Agreements,  (1) the nature
and  quality  of  the  services  rendered  by  Pilgrim   Investments  under  the
Agreements;  (2) the fairness of the compensation payable to Pilgrim Investments
under the Agreements;  (3) the results  achieved by Pilgrim  Investments for the
Funds; and (4) the personnel, operations and financial condition, and investment
management capabilities,  methodologies, and performance of Pilgrim Investments.
The Board also  considered  the  services  provided  by Pilgrim  Group,  Inc. as
administrator to the Funds and the fees received by Pilgrim Group, Inc. for such
services.

     Based upon its review,  the Board  determined  that,  by approving  the New
Agreements  in Proposals 3a and 3b, the Funds can best be assured that  services
from Pilgrim Investments will be provided without  interruption.  The Board also
determined  that the New  Agreements  are in the best interests of each Fund and
its shareholders.  Accordingly,  after  consideration of the above factors,  and
such  other  factors  and  information  it  considered  relevant,  each Board of
Trustees unanimously approved the New Agreements and voted to recommend approval
of Proposals 3a and 3b by each Fund's shareholders.

     The  effectiveness  of  Proposal  No.  3a  or  3b  is  conditioned  on  the
consummation of the Transaction.  Accordingly, in the event that the Transaction
is not  consummated,  Pilgrim  Investments  will  continue  to manage  the Funds
pursuant to the Current Agreements. Furthermore, shareholder vote upon Proposals
3a and 3b is conditioned  upon the result of the shareholder  vote on Proposal 2
of this proxy  statement.  If Proposal 2 is approved by  shareholders of a Fund,
only  Proposal 3a (and not  Proposal 3b) shall be voted upon at the meeting with
respect to that Fund. If Proposal 2 is not approved by  shareholders  of a Fund,
only  Proposal 3b (and not  Proposal 3a) shall be voted upon at the meeting with
respect to that Fund.

                                       15
<PAGE>
VOTE REQUIRED

     Shareholders  of each Fund  must  separately  approve  the  applicable  New
Agreement  with respect to that Fund.  Approval of Proposals  No. 3a and 3b by a
Fund requires an affirmative vote of the lesser of (i) 67% or more of the shares
of the Fund's shares present at the Meeting if more than 50% of the  outstanding
shares of the Fund are present or represented by proxy, or (ii) more than 50% of
the outstanding shares of the Fund.

         THE BOARD OF TRUSTEES OF EACH FUND, INCLUDING A MAJORITY OF THE
              INDEPENDENT TRUSTEES, RECOMMENDS THAT YOU VOTE "FOR"
                            PROPOSALS NO. 3A AND 3B.

                                 PROPOSAL NO. 4
          RATIFICATION OF THE SELECTION OF INDEPENDENT PUBLIC AUDITORS

     Shareholders are being asked to ratify the selection of the accounting firm
of  PricewaterhouseCoopers   LLP   ("PricewaterhouseCoopers")   to  act  as  the
independent auditors for the Funds for the fiscal year ending December 31, 2000.

     At a meeting of the Board held on January 27,  2000,  the Board of Trustees
of Pilgrim Growth  Opportunities Fund and Pilgrim SmallCap  Opportunities  Fund,
including a majority of Trustees who are not "interested  persons" as defined in
the 1940 Act, as well as the Trustees  who were members of the Audit  Committee,
selected  PricewaterhouseCoopers  to act as the  independent  auditors  for  the
fiscal year ending December 31, 2000.

     PricewaterhouseCoopers  has served as  independent  auditors  for each Fund
with respect to its financial statements for the fiscal years ended December 31,
1995 through December 31, 1999.

     PricewaterhouseCoopers  has  advised  the Funds  that it is an  independent
auditing  firm  and has no  direct  financial  or  material  indirect  financial
interest in the Funds.  PricewaterhouseCoopers  reported to the Board in October
1999  that  certain  PricewaterhouseCoopers  professionals  had  investments  in
certain  Pilgrim  Funds  during a period  in  which  PricewaterhouseCoopers  was
performing  audit  services  for the  funds and  during a period  of the  firm's
engagement to conduct the audit, but that none of those professionals  performed
services for the Pilgrim Funds.  PricewaterhouseCoopers  also informed the Board
that  the   circumstances   that  caused  the  violations  no  longer   existed.
Representatives of PricewaterhouseCoopers  are not expected to be at the Meeting
but have been given the  opportunity  to make a statement if they wish, and will
be   available   telephonically   should  any  matter  arise   requiring   their
participation.

VOTE REQUIRED

     Shareholders of each Fund must separately  ratify the independent  auditors
for that Fund. For each Fund, the  affirmative  vote of a majority of the shares
of that Fund voted at the Meeting is required to approve this Proposal No. 4.

   THE BOARD OF TRUSTEES OF EACH FUND, INCLUDING A MAJORITY OF THE INDEPENDENT
          TRUSTEES, RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL NO. 4.

                               GENERAL INFORMATION

OTHER MATTERS TO COME BEFORE THE MEETING

     Management of the Funds does not know of any matters to be presented at the
Meeting other than those  described in this Proxy  Statement.  If other business
should properly come before the Meeting,  the proxy holders will vote thereon in
accordance with their best judgment.

                                       16
<PAGE>
SECTION 15(F) OF THE INVESTMENT COMPANY ACT

     ING America  Insurance  Holdings,  Inc. and ReliaStar,  the indirect parent
company of Pilgrim Investments, have agreed to use their reasonable best efforts
to assure  compliance  with the  conditions of Section  15(f) of the  Investment
Company Act of 1940.  Section 15(f) provides a non-exclusive  safe harbor for an
investment  adviser or any affiliated  persons  thereof to receive any amount or
benefit in connection with a transaction  that results in a change in control of
or identity of the  investment  adviser to an investment  company as long as two
conditions are met.  First,  no "unfair burden" may be imposed on the investment
company as a result of the transaction relating to the change of control, or any
express or implied terms,  conditions or understandings  applicable  thereto. As
defined in the  Investment  Company Act, the term "unfair  burden"  includes any
arrangement  during the two-year  period after the change in control whereby the
investment  adviser (or  predecessor  or successor  adviser),  or any interested
person of any such adviser, receives or is entitled to receive any compensation,
directly or  indirectly,  from the  investment  company or its security  holders
(other than fees for bona fide investment  advisory or other services),  or from
any  person in  connection  with the  purchase  or sale of  securities  or other
property to, from, or on behalf of the investment  company (other than bona fide
ordinary  compensation  as principal  underwriter  of the  investment  company).
Second,  during  the three  year  period  immediately  following  the  change of
control,  at least 75% of an investment  company's board of trustees must not be
"interested  persons" of the investment  adviser or the  predecessor  investment
adviser within the meaning of the Investment Company Act.

VOTING RIGHTS

     Each share of each class of a Fund is entitled to one vote. Shareholders of
each Fund at the close of business on June 26, 2000 (the "Record  Date") will be
entitled  to be present  and to give  voting  instructions  for the Funds at the
Meeting and any  adjournments  thereof  with respect to their shares owned as of
the Record  Date.  As of the Record  Date,  the Funds had the  following  shares
outstanding:

                   FUND                                  SHARES OUTSTANDING
                   ----                                  ------------------
     Pilgrim Growth Opportunities Fund                     23,411,923.327
     Pilgrim SmallCap Opportunities Fund                   11,294,378.108

     For each Fund,  a  majority  of the  outstanding  shares of the Fund on the
Record  Date,  present  in person or  represented  by proxy,  must be present to
constitute a quorum.

     If a quorum is not  present at the  Meeting,  or if a quorum is present but
sufficient  votes to approve any or all of the Proposals  are not received,  the
persons named as proxies may propose one or more  adjournments of the Meeting to
permit further  solicitation of proxies.  A shareholder vote may be taken on one
or more of the Proposals in this proxy  statement  prior to any  adjournment  if
sufficient votes have been received with respect to a Proposal.  Any adjournment
will require the affirmative  vote of a majority of those shares  represented at
the Meeting in person or by proxy.  The persons  named in the  enclosed  proxies
will vote in favor of such adjournment  those proxies which they are entitled to
vote in favor of any Proposal that has not been  adopted,  will vote against any
adjournments  those  proxies  required to be voted against any Proposal that has
not been adopted, and will not vote any proxies that direct them to abstain from
voting on such Proposals.

     The Funds expect  that,  before the Meeting,  broker-dealer  firms  holding
shares of the Funds in "street  name" for their  customers  will request  voting
instructions from their customers and beneficial  owners. If these  instructions
are not  received  by the  date  specified  in the  broker-dealer  firms'  proxy
solicitation  materials,  the Funds understand that the broker-dealers  that are
members of the New York Stock Exchange may vote on the items to be considered at
the Meeting on behalf of their  customers and  beneficial  owners under rules of
the New York Stock Exchange.

     If a  shareholder  abstains  from voting as to any  matter,  or if a broker
returns a "non-vote" proxy,  indicating a lack of authority to vote on a matter,
then the shares represented by such abstention or non-vote will be considered to
be present at the Meeting for purposes of determining the existence of a quorum.
However, abstentions and broker non-votes will be disregarded in determining the
"votes cast" on an issue. For this reason, with respect to matters requiring the
affirmative vote of a majority of the total shares outstanding, an abstention or
broker non-vote will have the effect of a vote against such matters.

                                       17
<PAGE>
     To the knowledge of the Funds,  as of May 31, 2000,  no current  Trustee of
the  Funds  owned  1% or more of the  outstanding  shares  of any  Fund  and the
officers and  Trustees of the Funds own, as a group,  less than 1% of the shares
of each Fund.

BENEFICIAL OWNERS

     Appendix D to this proxy statement lists the persons that, to the knowledge
of the Funds,  owned  beneficially 5% or more of the  outstanding  shares of any
class of a Fund as of May 31, 2000.

EXPENSES

     Pilgrim  Investments or an affiliate,  or ING, will pay 50% of the expenses
of the Funds in connection with this Notice and Proxy Statement and the Meeting,
including the printing,  mailing,  solicitation  and vote  tabulation  expenses,
legal fees, and out of pocket  expenses.  The remaining 50% of the expenses will
be borne by the Funds.

ADVISER AND PRINCIPAL UNDERWRITER

     Pilgrim  Investments  is located at 40 North  Central  Avenue,  Suite 1200,
Phoenix,  Arizona  85004,  and serves as the  investment  adviser to each of the
Funds. Pilgrim Securities, Inc., whose address is 40 North Central Avenue, Suite
1200, Phoenix, Arizona 85004, is the Distributor for each of the Funds.

EXECUTIVE OFFICERS OF THE FUND

     Officers of the Funds are  elected by the Board and hold office  until they
resign,  are  removed or are  otherwise  disqualified  to serve.  The  principal
executive  officers of each Fund,  together with such person's position with the
Funds and principal occupation for the last five years, are listed on Appendix E
attached hereto.

SHAREHOLDER PROPOSALS

     The Funds are not  required to hold annual  meetings  of  shareholders  and
currently  do not  intend to hold such  meetings  unless  shareholder  action is
required  in  accordance  with  the  1940  Act.  A  shareholder  proposal  to be
considered  for inclusion in the proxy  statement at any  subsequent  meeting of
shareholders  must be submitted a reasonable time before the proxy statement for
that meeting is mailed.  Whether a proposal is submitted in the proxy  statement
will be determined in accordance with applicable federal and state laws.

     PROMPT  EXECUTION  AND  RETURN  OF  THE  ENCLOSED  PROXY  IS  REQUESTED.  A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.


                                        JAMES M. HENNESSY, Secretary

July 12, 2000
40 North Central Avenue
Suite 1200
Phoenix, Arizona 85004
(800) 992-0180

                                       18
<PAGE>
                                                                      APPENDIX A

              FORM OF AMENDMENT TO INVESTMENT MANAGEMENT AGREEMENTS


     The  INVESTMENT  MANAGEMENT  AGREEMENT  made the __ day of _________ by and
between  PILGRIM [NAME OF FUND], a business  trust  organized and existing under
the laws of the Commonwealth of Massachusetts  (hereinafter  called the "Fund"),
and PILGRIM  INVESTMENTS,  INC., a corporation  organized and existing under the
laws of the State of  Delaware  (hereinafter  called the  "Manager"),  is hereby
amended as set forth in this Amendment to the Investment  Management  Agreement,
which is made as of the _____ day of ________, 2000.

                               W I T N E S S E T H

     WHEREAS,  the Fund is an open-end management  investment company registered
under the Investment  Company Act of 1940, as amended (the  "Investment  Company
Act"); and

     WHEREAS,  the Manager is  registered  as an  investment  adviser  under the
Investment  Advisers Act of 1940, as amended,  and is engaged in the business of
supplying investment advice,  investment management and administrative services,
as an independent contractor; and

     WHEREAS,  the Fund and the Manager wish to amend the Investment  Management
Agreement as provided below.

     NOW,  THEREFORE,  in consideration of the covenants and the mutual promises
in the Investment  Management  Agreement,  the parties  hereto,  intending to be
legally bound hereby, mutually agree as follows:

     1. Section 8 of the Investment Management Agreement is amended by replacing
the language thereof with the following paragraph:

          8. For the services  provided and  expenses  assumed  pursuant to this
     Agreement,  the Fund will pay to the Manager as  compensation a fee accrued
     daily and paid  monthly at the annual  rate of [0.95%  for  Pilgrim  Growth
     Opportunities Fund] [1.00% for Pilgrim SmallCap  Opportunities Fund] of the
     Fund's aggregate daily net assets.

     2. This Amendment  shall become  effective as of the date  indicated  above
provided that it has been approved by the  shareholders of the Fund at a meeting
held for that purpose.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Amendment to be
duly  executed and attested by their duly  authorized  officers,  on the day and
year first above written.

                                        PILGRIM [NAME OF FUND]


Attest:                                 By:
       ------------------------------      -------------------------------------

Title:                                  Title:
       ------------------------------      -------------------------------------


                                        PILGRIM INVESTMENTS, INC.


Attest:                                 By:
       ------------------------------      -------------------------------------

Title:                                  Title:
       ------------------------------      -------------------------------------

                                       A-1
<PAGE>
                                                                      APPENDIX B

                 INFORMATION REGARDING PILGRIM INVESTMENTS, INC.

1.     DIRECTOR AND PRINCIPAL EXECUTIVE OFFICERS OF PILGRIM INVESTMENTS, INC.

       Set forth below is the name and  principal  occupation  of the  principal
executive  officer and each director of Pilgrim  Investments,  Inc. The business
address of each such person is 40 North  Central  Avenue,  Suite 1200,  Phoenix,
Arizona 85004.

<TABLE>
<CAPTION>
                               POSITION WITH
      NAME AND AGE          PILGRIM INVESTMENTS             PRINCIPAL OCCUPATION DURING THE LAST FIVE YEARS
      ------------          -------------------             -----------------------------------------------
<S>                        <C>                      <C>
Robert W. Stallings (51)   Chairman of the Board    Chairman,  Chief  Executive  Officer  and  President  of Pilgrim
                           of Directors             Group, Inc.  ("Pilgrim Group") (since December 1994);  Chairman,
                                                    Pilgrim  Investments,  Inc. ("Pilgrim  Investments") and Pilgrim
                                                    Securities,  Inc. ("Pilgrim  Securities") (since December 1994);
                                                    President and Chief Executive  Officer of Pilgrim Funding,  Inc.
                                                    (since  November  1999);   and  President  and  Chief  Executive
                                                    Officer of Pilgrim Capital  Corporation (since October 1999) and
                                                    its  predecessors  (since August 1991).  Mr. Stallings is also a
                                                    Director,  Trustee, or a member of the Advisory Board of each of
                                                    the Pilgrim Funds.

James R. Reis (42)         Director,  Vice          Director,  Vice Chairman (since  December  1994), Executive Vice
                           Chairman,  Executive     President (since April 1995), and Director of Structured Finance
                           Vice  President and      (since April  1998),  Pilgrim  Group  and  Pilgrim  Investments;
                           Director of Senior       Director (since December 1994) and Vice Chairman (since November
                           Lending and Structured   1995),  Pilgrim Securities; Executive Vice  President, Assistant
                           Finance                  Secretary  and Chief Credit Officer of Pilgrim Prime Rate Trust;
                                                    Executive Vice  President and Assistant Secretary of each of the
                                                    other  Pilgrim  Funds.  Presently  serves  or  has  served as an
                                                    officer  or  director  of  other  affiliates  of Pilgrim Capital
                                                    Corporation.

                           President and Chief      President  and Chief  Executive  Officer  (since  August  1996),
Stanley D. Vyner (49)      Executive Officer        Pilgrim  Investments;  Executive  Vice  President of most of the
                                                    Pilgrim  Funds  (since  July  1996).  Formerly  Chief  Executive
                                                    Officer  (November 1993 - December 1995),  HSBC Asset Management
                                                    Americas, Inc.
</TABLE>

2.   INFORMATION   REGARDING  OTHER  INVESTMENT  COMPANIES  ADVISED  BY  PILGRIM
     INVESTMENTS.

     The annual  advisory  fees for other  registered  investment  companies for
which Pilgrim  Investments,  Inc.  serves as investment  adviser with investment
objectives  and  policies  similar to those of the Funds and each  corresponding
Expense Limit, expressed as a percentage of the average daily net assets, are as
follows:

                                       B-1
<PAGE>
<TABLE>
<CAPTION>
           FUND                     ANNUAL INVESTMENT ADVISORY FEE           EXPENSE LIMIT
           ----                     ------------------------------           -------------
<S>                             <C>                                         <C>
Pilgrim LargeCap Growth Fund    0.75% of the first  $500  million of the    Class A -- 1.60%
                                Fund's average net assets, 0.675% of the    Class B -- 2.25%
                                next $500 million of average net assets,    Class C -- 2.25%
                                and 0.65% of the  average  net assets in    Class M -- N/A
                                excess of $1 billion                        Class Q -- 1.25%
                                                                            Class T -- N/A

Pilgrim MidCap Growth Fund      0.75% of the first  $500  million of the    Class A -- 1.60%
                                Fund's average net assets, 0.675% of the    Class B -- 2.25%
                                next $500 million of average net assets,    Class C -- 2.25%
                                and 0.65% of the  average  net assets in    Class M -- N/A
                                excess of $1 billion                        Class Q -- 1.25%
                                                                            Class T -- N/A

Pilgrim SmallCap Growth Fund    1.00% of the Fund's average net assets      Class A -- 1.95%
                                                                            Class B -- 2.60%
                                                                            Class C -- 2.60%
                                                                            Class M -- N/A
                                                                            Class Q -- 1.50%
                                                                            Class T -- N/A

Pilgrim VP Growth               0.75% of the Fund's average net assets      Voluntary expense
Opportunities Portfolio                                                     cap of 0.90%

Pilgrim VP SmallCap             0.75%  of  the  first   $250,000,000  of    Voluntary expense
Opportunities Portfolio         aggregate   average  daily  net  assets;    cap of 0.90%
                                0.70% on the next  $250,000,000  of such
                                assets;  0.65% on the next  $250,000,000
                                of  such  assets;   0.60%  on  the  next
                                $250,000,000  of such assets;  and 0.55%
                                in excess of $1 billion of such assets
</TABLE>

3.   FEES PAID TO PILGRIM INVESTMENTS AND AFFILIATES.

FEES PAID TO PILGRIM INVESTMENTS

     The aggregate  amount of the advisory fee paid by the each of the following
Funds to Pilgrim  Investments  for the fiscal year ended  December 31, 1999 was:
Growth Opportunities Fund -- $1,865,457; and Pilgrim SmallCap Opportunities Fund
-- $1,915,854.

FEES PAID TO PILGRIM GROUP, INC.

     For the fiscal year ended  December  31, 1999,  the Funds paid  shareholder
servicing  fees in the following  amounts to Pilgrim  Group,  Inc.,  which is an
affiliate of Pilgrim  Investments:  Growth  Opportunities Fund -- $248,728;  and
SmallCap Opportunities Fund -- $255,447.

FEES PAID TO PILGRIM SECURITIES, INC.

     For the fiscal year ended  December 31, 1999,  the Funds paid the following
service and distribution fees to Pilgrim Securities, Inc., which is an affiliate
of Pilgrim Investments:  Growth  Opportunities Fund -- $1,066,304;  and SmallCap
Opportunities Fund -- $2,158,255.

                                       B-2
<PAGE>
                                                                      APPENDIX C

                     FORM OF INVESTMENT MANAGEMENT AGREEMENT

                      PILGRIM GROWTH OPPORTUNITIES FUND AND
                       PILGRIM SMALLCAP OPPORTUNITIES FUND

     AGREEMENT  made this ___ day of , by and between  PILGRIM [NAME OF FUND], a
Massachusetts  business  trust,  (the "Fund") and PILGRIM  INVESTMENTS,  INC., a
Delaware business corporation (the "Manager").

     The Fund is an open-end management  investment company registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act").

     The Fund  desires  to retain  the  Manager  to render  investment  advisory
services  to the Fund,  and the  Manager is willing  to render  such  investment
advisory on the terms set forth below.

     The parties agree as follows:

     1. The Fund hereby appoints the Manager to act as investment adviser to the
Fund for the period and on the terms set forth in this  Agreement.  The  Manager
accepts such  appointment and agrees to render the services  described,  for the
compensation provided, in this Agreement.

     2. Subject to the supervision of the Trustees, the Manager shall manage the
investment  operations of the Fund and the composition of the Fund's  portfolio,
including the purchase and retention and disposition of portfolio securities, in
accordance with the Fund's investment  objectives,  policies and restrictions as
stated in the Fund's  Prospectus  and  Statement of Additional  Information  (as
defined below) subject to the following understandings:

          (a) The Manager shall provide  supervision  of the Fund's  investments
and determine from time to time what  investments will be made, held or disposed
of or what  securities  will be purchased  and  retained,  sold or loaned by the
Fund,  and what  portion of the assets will be invested  or held  uninvested  as
cash.

          (b) The Manager shall use its best judgment in the  performance of its
duties under this Agreement.

          (c) The  Manager,  in the  performance  of its duties and  obligations
under this Agreement, shall (i) act in conformity with the Declaration of Trust,
By-Laws,  Prospectus and Statement of Additional  Information of the Fund,  with
the  instructions  and directions of the Trustees and (ii) conform to and comply
with the  requirements  of the Investment  Company Act and all other  applicable
federal and state laws and regulations.

          (d)  (i) The Manager shall determine the securities to be purchased or
sold by the Fund and will place orders  pursuant to its  determinations  with or
through such persons, brokers or dealers to carry out the policy with respect to
brokerage as set forth in the Fund's  Prospectus  and  Statement  of  Additional
Information  or as the Trustees may direct from time to time.  In providing  the
Fund with investment supervision, the Manager will give primary consideration to
securing the most favorable price and efficient execution.  The Manager may also
consider the financial  responsibility,  research and investment information and
other services and research related products  provided by brokers or dealers who
may effect or be a party to any such transactions or other transactions to which
other  clients  of the  Manager  may be a party.  The Fund  recognizes  that the
services and research related products provided by such brokers may be useful to
the Manager in connection with its services to other clients.

               (ii) When the Manager deems the purchase or sale of a security to
be in the best interest of the Fund as well as other  clients,  the Manager,  to
the extent  permitted by  applicable  laws and  regulations,  may  aggregate the
securities to be sold or purchased in order to obtain the most  favorable  price
or  lower  brokerage  commissions  and  efficient  execution.   In  such  event,
allocation  of the  securities  so  purchased  or sold,  as well as the expenses
incurred  in the  transactions,  will be made by the  Manager  in the  manner it
considers to be the most equitable and consistent with its fiduciary obligations
to the Fund and to such other clients.

                                       C-1
<PAGE>
          (e) The Manager shall maintain,  or cause to be maintained,  all books
and  records  required  under  the  Investment  Company  Act to the  extent  not
maintained  by the  custodian  of the  Fund.  The  Manager  shall  render to the
Trustees  such  periodic  and special  reports as the  Trustees  may  reasonably
request.

          (f) The Manager  shall  provide the Fund's  custodian on each business
day information relating to all transactions concerning the Fund's assets.

          (g) The  investment  management  services  of the  Manager to the Fund
under this  Agreement are not to be deemed  exclusive,  and the Manager shall be
free to render similar services to others.

     3. The Fund has  delivered to the Manager  copies of each of the  following
documents and will deliver to it all future amendments and supplements, if any:

          (a) Declaration of Trust,  as amended,  as filed with the Secretary of
the  Commonwealth of Massachusetts  (such  Declaration of Trust, as in effect on
the date hereof and as further  amended from time to time,  is herein called the
"Declaration of Trust");

          (b) By-Laws of the Fund (such By-Laws, as in effect on the date hereof
and as amended from time to time, are herein called the "By-Laws");

          (c) Certified  resolutions of the Trustees authorizing the appointment
of the Manager and approving this Agreement on behalf of the Fund;

          (d) Registration  Statement on Form N-lA under the Investment  Company
Act  and the  Securities  Act of  1933,  as  amended  from  time  to  time  (the
"Registration Statement"),  as filed with the Securities and Exchange Commission
(the  "Commission"),  relating to the Fund and shares of beneficial  interest of
the Fund and all amendments thereto.

          (e)  Notification  of  Registration  of the Fund under the  Investment
Company  Act on Form  N-8A as  filed  with  the  Commission  and all  amendments
thereto;

          (f) Prospectus and Statement of Additional Information included in the
Registration  Statement,  as amended from time to time.  All  references to this
Agreement,  the Prospectus and the Statement of Additional  Information shall be
to such documents as most recently amended or supplemented and in effect.

     4. The Manager shall  authorize and permit any of its  directors,  officers
and employees who may be elected as Trustees or officers of the Fund to serve in
the  capacities  in which they are elected.  All services to be furnished by the
Manager under this Agreement may be furnished  through such directors,  officers
or employees of the Manager.

     5. The Manager  agrees that all records which it maintains for the Fund are
property of the Fund. The Manager will  surrender  promptly to the Fund any such
records upon the Fund's  request.  The Manager  further  agrees to preserve such
records for the periods  prescribed  in Rule 3la-2 of the  Commission  under the
Investment Company Act.

     6. In  connection  with the  services  rendered by the  Manager  under this
Agreement, the Manager will pay all of the following expenses:

          (a) the  salaries  and  expenses of all  personnel of the Fund and the
Manager  required  to perform  the  services  to be  provided  pursuant  to this
Agreement, except the fees of the Trustees who are not affiliated persons of the
Manager, and

          (b) all expenses incurred by the Manager or the Fund in connection the
performance  of the Manager's  responsibilities  hereunder,  other than brokers'
commissions and any issue or transfer taxes chargeable to the Fund in connection
with its securities transactions.

     7. In the event the expenses of the Fund for any fiscal year (including the
fees  payable  to  the  Manager  but  excluding   interest,   taxes,   brokerage
commissions,  distribution fees and litigation and indemnification  expenses and
other  extraordinary  expenses not incurred in the ordinary course of the Fund's
business) exceed the lowest  applicable  annual expense  limitation  established

                                       C-2
<PAGE>
pursuant to the statutes or regulations of any  jurisdictions in which shares of
the Fund are then qualified for offer and sale, the compensation due the Manager
will be reduced by the amount of such excess,  or, if such reduction exceeds the
compensation  payable  to the  Manager,  the  Manager  will pay the Fund,  whose
expenses  exceed such expense  limitation,  the amount of such  reduction  which
exceeds the amount of such compensation.

     8. For the  services  provided and the  expenses  assumed  pursuant to this
Agreement,  the Fund will pay to the Manager as compensation a fee accrued daily
and paid  monthly at the annual  rate of 0.75% of the Fund's  aggregate  average
daily net assets.

     9. The  Manager  may rely on  information  reasonably  believed by it to be
accurate  and  reliable.  Neither  the  Manager  nor  its  officers,  directors,
employees  or agents or  controlling  persons  shall be liable  for any error or
judgment or mistake of law, or for any loss  suffered by the Fund in  connection
with or arising out of the  matters to which this  Agreement  relates,  except a
loss resulting from willful  misfeasance,  bad faith or gross  negligence on the
part of the Manager in the performance of its duties or from reckless  disregard
by it of its obligations and duties under this Agreement.

     10. This Agreement  shall continue in effect for a period of two years from
the date hereof and shall continue  automatically for successive annual periods,
provided that such continuance is specifically approved at least annually by the
affirmative  vote of (i) a majority  of the  Trustees  of the Fund,  who are not
interested  persons  of the Fund,  cast in person  at a meeting  called  for the
purpose of voting on such  approval,  and (ii) a majority of the Trustees of the
Fund or the holders of a majority of the  outstanding  voting  securities of the
Fund;  provided  however,  that this Agreement may be terminated by the Fund, at
any time,  without the payment of any  penalty,  by the majority of the Trustees
acting on behalf of the Fund or by vote of a majority of the outstanding  voting
securities  (as defined in the  Investment  Company Act) of the Fund,  or by the
Manager at any time,  without  the payment of any  penalty,  on not more than 60
days' nor less than 30 days' written notice to the other party.

     11.  This  agreement  shall  terminate  automatically  in the  event of its
assignment;  the term  "assignment"  for this  purpose  shall  have the  meaning
defined in Section 2(a)(4) of the Investment Company Act of 1940.

     12.  Nothing in this  Agreement  shall limit or  restrict  the right of any
director,  officer or employee of the Manager who may also be a Trustee, officer
or  employee  of the Fund to engage in any other  business or to devote his time
and attention in part to the management or other aspect of any business, whether
of a  similar  or  dissimilar  nature,  nor limit or  restrict  the right of the
Manager to engage in any other business or to render services of any kind to any
other person or entity.

     13.  During the term of this  Agreement,  the Fund  agrees to  furnish  the
Manager at its principal office all prospectuses,  proxy statements,  reports to
shareholders,  sales literature,  or other material prepared for distribution to
shareholders  of the Fund or the public,  which refer in any way to the Manager,
prior to use  thereof and not to use such  material  if the  Manager  reasonably
objects  in  writing  within  five  business  days (or such other time as may be
mutually  agreed) after  receipt.  In the event of termination of the Agreement,
the Fund will continue to furnish to the Manager such other information relating
to the business  affairs of the Fund as the Manager at any time, or from time to
time, reasonably requests in order to discharge its obligations hereunder.

     14.  This  Agreement  may be  amended by mutual  agreement,  but only after
authorization  of such amendments by the affirmative  vote of (i) the holders of
the  majority  of the  outstanding  voting  securities  of the  Fund  and (ii) a
majority of the members of the  Trustees who are not  interested  persons of the
Fund or the  Manager,  cast in person at a meeting  called  for the  purpose  of
voting on such approval.

     15.  The  Manager  and the Fund  each  agree  that the  name  "Pilgrim"  is
proprietary  to,  and a  property  right of, the  Manager.  The Fund  agrees and
consents  that (i) it will only use the name  "Pilgrim"  as part of its name and
for no other  purpose,  (ii) it will not  purport  to grant any third  party the
right  to use  the  name  "Pilgrim"  and  (iii)  upon  the  termination  of this
Agreement,  the Fund shall,  upon the request of the  Manager,  cease to use the
name "Pilgrim",  and shall use its best efforts to cause its officers,  Trustees
and  shareholders  to take any and all actions  which the Manager may request to
effect the foregoing.

                                       C-3
<PAGE>
     16. Any notice or other  communications  required  to be given  pursuant to
this Agreement  shall be deemed to be given if delivered or mailed by registered
mail,  postage  paid,  (1) to the Manager at 40 N. Central  Avenue,  Suite 1200,
Phoenix, Arizona 85004, Attention:  Secretary; or (2) to the Fund, 40 N. Central
Avenue, Suite 1200, Phoenix, Arizona 85004, Attention: Secretary.

     17. This  Agreement  shall be governed by and construed in accordance  with
the laws of the State of Arizona. The terms "interested  person",  "assignment",
and "vote of the majority of the outstanding  securities" shall have the meaning
set forth in the Investment Company Act.

     18. The  Declaration  of Trust,  establishing  the Trust,  a copy of which,
together  with all  amendments  thereto (the  "Declaration"),  is on file in the
office of the Secretary of the Commonwealth of Massachusetts,  provides that the
name  "Pilgrim  [NAME OF FUND]"  refers to the  Trustees  under the  Declaration
collectively as trustees,  but not  individually or personally;  and no Trustee,
shareholder,  officer, employee or agent of the Fund may be held to any personal
liability,  nor may resort be had to their private property for the satisfaction
of any  obligation or claim or otherwise in  connection  with the affairs of the
Fund, but the Fund property only shall be liable.

     IN WITNESS  WHEREOF,  the parties hereto have caused this  instrument to be
executed by their officers designated below as of the day and year first written
above.


                                        PILGRIM [NAME OF FUND]


                                        By:
                                           -------------------------------------


                                        PILGRIM INVESTMENTS, INC.


                                        By:
                                           -------------------------------------

                                       C-4
<PAGE>
                                                                      APPENDIX D

     As of May 31,  2000,  to the  knowledge  of  management,  no  person  owned
beneficially or of record more than 5% of the outstanding shares of any class of
shares of the Funds, except as follows:

<TABLE>
<CAPTION>
                                                                 CLASS AND
                                                                  TYPE OF       PERCENTAGE    PERCENTAGE
       FUND                        ADDRESS                       OWNERSHIP       OF CLASS       OF FUND
       ----                        -------                       ---------       --------       -------
<S>                   <C>                                      <C>               <C>            <C>
Pilgrim Growth        Merrill Lynch Pierce Fenner & Smith         Class A         13.55%         3.82%
Opportunities Fund    For the Sole Benefit of its Customers    Record Holder
                      Attn: Fund Administration
                      4800 Deer Lake Drive East 2nd Floor
                      Jacksonville, FL 32246-6484

Pilgrim Growth        Northern Trust Co Ttee FBO                  Class A          5.15%         1.45%
Opportunities Fund    Reliastar Success Sharing Plan & ESOP    Record Holder
                      22-47317
                      PO Box 92956
                      Chicago, IL 60675-2956

Pilgrim Growth        Merrill Lynch Pierce Fenner & Smith         Class B         32.52%         9.68%
Opportunities Fund    For the Sole Benefit of its Customers    Record Holder
                      Attn: Fund Administration
                      4800 Deer Lake Drive East 2nd Floor
                      Jacksonville, FL 32246-6484

Pilgrim Growth        Merrill Lynch Pierce Fenner & Smith         Class C         34.93%         5.01%
Opportunities Fund    For the Sole Benefit of its Customers    Record Holder
                      Attn: Fund Administration
                      4800 Deer Lake Drive East 2nd Floor
                      Jacksonville, FL 32246-6484

Pilgrim Growth        Reliastar Pension Account                   Class I         81.78%        14.62%
Opportunities Fund    C/o Reliastar Pension Committee          Record Holder
                      20 Washington Avenue South
                      Minneapolis, MN 55401-1900

Pilgrim Growth        Norwest Bank Minnesota NA                   Class I         18.17%         3.25%
Opportunities Fund    FBO Reliastar Pension Plan               Record Holder
                      A/C# 13132700
                      PO Box 1533
                      Minneapolis, MN 55480-1533

Pilgrim SmallCap      Merrill Lynch Pierce Fenner & Smith         Class A         18.13%         4.95%
Opportunities Fund    For the Sole Benefit of its Customers     Share Holder
                      Attn: Fund Administration
                      4800 Deer Lake Drive East 2nd Floor
                      Jacksonville, FL 32246-6484

Pilgrim SmallCap      Merrill Lynch Pierce Fenner & Smith         Class B         27.19%        13.16%
Opportunities Fund    For the Sole Benefit of its Customers     Share Holder
                      Attn: Fund Administration
                      4800 Deer Lake Drive East 2nd Floor
                      Jacksonville, FL 32246-6484

Pilgrim SmallCap      Merrill Lynch Pierce Fenner & Smith         Class C         40.38%         7.96%
Opportunities Fund    For the Sole Benefit of its Customers     Share Holder
                      Attn: Fund Administration
                      4800 Deer Lake Drive East 2nd Floor
                      Jacksonville, FL 32246-6484
</TABLE>

                                       D-1
<PAGE>
<TABLE>
<CAPTION>
                                                                 CLASS AND
                                                                  TYPE OF       PERCENTAGE    PERCENTAGE
       FUND                        ADDRESS                       OWNERSHIP       OF CLASS       OF FUND
       ----                        -------                       ---------       --------       -------
<S>                   <C>                                      <C>               <C>            <C>
Pilgrim SmallCap      Northstar Investment Management Corp        Class I         87.52%          .00%
Opportunities Fund    Attn: Agnes Mullady                       Share Holder
                      300 First Stamford Place
                      Stamford, CT 06902-6765

Pilgrim SmallCap      Northern Trust Co Ttee FBO                  Class Q        100.00%         0.15%
Opportunities Fund    Reliastar Success Sharing Plan & ESOP     Share Holder
                      22-47317
                      PO Box 92956
                      Chicago, IL 60675-2956
</TABLE>

                                       D-2
<PAGE>
                                                                      APPENDIX E

                              OFFICERS OF THE FUNDS

     The following persons currently are principal executive officers of each of
the Funds (unless  otherwise  noted,  the mailing  address of the officers is 40
North Central Avenue, Suite 1200, Phoenix, Arizona 85004):

     Robert W.  Stallings,  President  and  Chief  Executive  Officer.  (Age 51)
     Chairman,  Chief  Executive  Officer and President of Pilgrim  Group,  Inc.
     ("Pilgrim  Group") (since December 1994);  Chairman,  Pilgrim  Investments,
     Inc.  ("Pilgrim  Investments")  and  Pilgrim  Securities,   Inc.  ("Pilgrim
     Securities")  (since December 1994);  President and Chief Executive Officer
     of Pilgrim  Funding,  Inc. (since  November 1999);  and President and Chief
     Executive Officer of Pilgrim Capital  Corporation  (since October 1999) and
     its  predecessors  (since August 1991).  Mr.  Stallings is also a Director,
     Trustee, or a member of the Advisory Board of each of the Pilgrim Funds.

     James R. Reis, Executive Vice President and Assistant  Secretary.  (Age 42)
     Director,  Vice Chairman (since  December  1994),  Executive Vice President
     (since April 1995), and Director of Structured  Finance (since April 1998),
     Pilgrim Group and Pilgrim  Investments;  Director (since December 1994) and
     Vice Chairman  (since November 1995),  Pilgrim  Securities;  Executive Vice
     President,  Assistant  Secretary and Chief Credit  Officer of Pilgrim Prime
     Rate Trust; Executive Vice President and Assistant Secretary of each of the
     Pilgrim Funds.  Presently serves or has served as an officer or director of
     other affiliates of Pilgrim Capital Corporation.

     Stanley D. Vyner,  Executive Vice  President.  (Age 49) President and Chief
     Executive Officer (since August 1996), Pilgrim Investments;  Executive Vice
     President of most of the other  Pilgrim  Funds (since July 1996).  Formerly
     Chief  Executive  Officer  (November  1993  -  December  1995)  HSBC  Asset
     Management Americas, Inc.

     James  M.  Hennessy,  Executive  Vice  President  and  Secretary.  (Age 51)
     Executive  Vice  President  and Secretary  (since  October  1999),  Pilgrim
     Capital Corporation and its predecessors (since April 1998). Executive Vice
     President  (since April 1998) and  Secretary  (since  April 1995),  Pilgrim
     Group, Pilgrim Securities and Pilgrim Investments; Executive Vice President
     and Secretary of each of the Pilgrim Funds. Formerly Senior Vice President,
     Pilgrim Capital  Corporation and its affiliates  (April  1995-April  1998).
     Presently  serves  or  has  served  as an  officer  or  director  of  other
     affiliates of Pilgrim Capital Corporation.

     Michael J. Roland,  Senior Vice President and Principal  Financial Officer.
     (Age 42) Senior Vice President and Chief Financial Officer,  Pilgrim Group,
     Pilgrim  Investments and Pilgrim Securities (since June 1998);  Senior Vice
     President and Principal  Financial Officer of each of the Pilgrim Funds. He
     served in same  capacity  from January 1995 - April 1997.  Formerly,  Chief
     Financial Officer of Endeavor Group (April 1997 to June 1998).

     Robert S. Naka,  Senior Vice  President and Assistant  Secretary.  (Age 37)
     Senior  Vice  President,  Pilgrim  Investments  (since  November  1999) and
     Pilgrim  Group,  Inc.  (since  August  1999).  Senior  Vice  President  and
     Assistant Secretary of each of the Pilgrim Funds.  Formerly Vice President,
     Pilgrim  Investments  (April  1997 - October  1999),  Pilgrim  Group,  Inc.
     (February 1997 - August 1999).  Formerly Assistant Vice President,  Pilgrim
     Group, Inc. (August 1995 - February 1997).

     Robyn L. Ichilov,  Vice President and Treasurer.  (Age 32) Vice  President,
     Pilgrim Investments (since August 1997), Accounting Manager (since November
     1995). Vice President and Treasurer of most of the Pilgrim Funds.

     Mary Lisanti,  Executive  Vice  President and Portfolio  Manager . (Age 43)
     Executive Vice  President and Chief  Investment  Adviser-Equities,  Pilgrim
     Investments  (since November 1999).  Formerly  Executive Vice President and
     Chief  Investment  Officer  -  Equities,  Northstar  Investment  Management
     Corporation (June 1998 - October 1999).

                                       E-1
<PAGE>
                        PILGRIM GROWTH OPPORTUNITIES FUND

                       PILGRIM SMALLCAP OPPORTUNITIES FUND

The  undersigned  hereby  instructs  Robert W.  Stallings  or James M.  Hennessy
(Proxies) to vote the shares held by him at the Special  Meeting of Shareholders
of the Pilgrim Growth Opportunities Fund and Pilgrim SmallCap Opportunities Fund
(collectively,  the "Funds") to be held at 8:30 a.m.,  local time, on August 25,
2000 at 40 North Central Avenue,  Suite 1200, Phoenix,  Arizona 85004 and at any
adjournment  thereof,  in the manner  directed below with respect to the matters
referred to in the Proxy  Statement for the Meeting,  receipt of which is hereby
acknowledged,  and in the Proxies'  discretion,  upon such other  matters as may
properly come before the meeting or any adjournment thereof.

Please vote, sign and date this voting instruction and return it in the enclosed
envelope.

These voting  instructions  will be voted as specified.  IF NO  SPECIFICATION IS
MADE, THIS VOTING INSTRUCTION WILL BE VOTED FOR ALL PROPOSALS.

IN ORDER TO AVOID THE ADDITIONAL  EXPENSE OF FURTHER  SOLICITATION,  WE STRONGLY
URGE YOU TO REVIEW,  COMPLETE AND RETURN YOUR BALLOT AS SOON AS  POSSIBLE.  YOUR
VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.

Please indicate your vote by an "X" in the appropriate box below.

               THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS.

1. To elect eleven Trustees.     For All        Withhold All      For All Except
                                   [ ]               [ ]                [ ]

Nominees:  Al Burton              Walter H. May           Robert W. Stallings
           Paul S. Doherty        Jock Patton             John G. Turner
           Robert B. Goode        David W. C. Putnam      David W. Wallace
           Alan L. Gosule         John R. Smith

        TO  WITHHOLD  AUTHORITY  TO VOTE,  MARK "FOR ALL EXCEPT" AND WRITE THE
        NOMINEE'S NUMBER ON THE LINE BELOW.

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2.   To  approve  an  Amendment  to  the  Investment   Management       For       Against     Abstain
     Agreement  between your Fund and Pilgrim  Investments,  Inc.       [ ]         [ ]         [ ]
     ("Pilgrim Investments").

3a.  To approve a new  Investment  Management  Agreement  between       For       Against     Abstain
     your Fund and Pilgrim  Investments,  assuming Proposal 2 has       [ ]         [ ]         [ ]
     been approved by shareholders.

3b.  To approve a new  Investment  Management  Agreement  between       For       Against     Abstain
     your Fund and Pilgrim  Investments,  assuming Proposal 2 has       [ ]         [ ]         [ ]
     not been approved by shareholders.

4.   To ratify the appointment of  PricewaterhouseCoopers  LLP as       For       Against     Abstain
     independent  auditors  for  your  Fund for the  fiscal  year       [ ]         [ ]         [ ]
     ending December 31, 2000.

5.   To transact such other  business as may properly come before       For       Against     Abstain
     the Meeting of Shareholders or any adjournments thereof            [ ]         [ ]         [ ]
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This  proxy must be signed  exactly as your  name(s)  appears  hereon.  If as an
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add titles as such. Joint owners must each sign.


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Signature                                                    Date


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Signature (if held jointly)                                  Date


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