<PAGE> 1
CAPSTONE JAPAN FUND
Seeking long-term capital appreciation and current income through
investments in Japanese securities.
FEBRUARY 26, 1999
PROSPECTUS
THE SECURITIES AND EXCHANGE COMMISSION DOES NOT APPROVE OR
DISAPPROVE THE INFORMATION IN THIS PROSPECTUS, AND DOES NOT
DETERMINE WHETHER THIS INFORMATION IS ACCURATE OR COMPLETE.
IT IS A CRIMINAL OFFENSE TO STATE OTHERWISE.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Fund.................................................... 3
Fee Table................................................... 6
Management.................................................. 7
Buying and Selling Fund Shares.............................. 8
Dividends, Distributions and Taxes.......................... 12
Financial Highlights........................................ 14
How to Get More Information................................. 15
</TABLE>
2
<PAGE> 3
THE FUND
THE FUND'S INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES
The Fund seeks to provide long-term capital appreciation and current
income. It invests primarily in securities listed on the Tokyo Stock Exchange or
other recognized Japanese trading markets and in securities of issuers that are
organized under the laws of Japan, that have at least 50% of their assets in
Japan or that derive at least 50% of their earnings or profits from goods
produced or sold, investments made, or services performed in Japan (Japanese
Issuers). The Fund may also invest in debt securities of Japanese Issuers, or
that are payable in yen or whose interest rate is linked to changes in a
recognized index of Japanese market performance to the performance of the
Japanese market or economy. In addition to buying these securities directly, the
Fund may invest in sponsored and unsponsored American Depository Receipts (ADRs)
related to these securities. (See "Principal Risks.") Under normal market
conditions, at least 65% of the Fund's total assets will be invested in the
foregoing securities. The Fund's debt securities must be rated at least BBB by
Standard & Poor's Corporation (S&P) or Baa by Moody's Investors Service or
deemed of comparable quality by the investment adviser. If these securities are
downgraded, the adviser has the discretion to hold or sell them.
The Adviser selects investments in issuers that it believes will benefit
from changes in the Japanese economy or will respond well in global markets.
Issuers are also evaluated in terms of fundamental factors such as ratios of
price to earnings and price to cash flow, book value and dividend yield. Similar
factors will be used to determine when a security held by the Fund should be
considered for sale.
The Fund also has authority to invest in U.S. securities, including money
market instruments (such as U.S. Treasury bills, repurchase agreements,
commercial paper and bankers' acceptances) and other debt securities such as
U.S. Government securities and corporate debt obligations. It may invest in
certificates of deposit of domestic and foreign branches of U.S. banks. For
temporary defensive purposes, during periods of unusual market conditions when
the Adviser believes the Fund's principal investments might be significantly
adversely affected, the Fund may invest in these instruments without limit,
which can prevent the Fund from pursuing its investment objective during those
periods and cause the Fund to lose benefits when the market begins to improve.
The Fund may also use futures and options to hedge its portfolio, and it may
hedge its foreign securities purchases with forward foreign currency exchange
contracts. The Fund has authority to lend its portfolio securities. These loans
will be fully collateralized at all times.
The Fund's most recent annual/semiannual report contains information on
the Fund's recent investment strategies, as discussed above, and securities
holdings. (See back cover.)
PRINCIPAL RISKS
Investments in stocks of any type involve risk because stock prices have
no guaranteed value. Stock prices may fluctuate -- at times dramatically -- in
response to various factors, including market conditions, political and other
events, and developments affecting the particular issuer or its industry or
geographic segment. Despite these risks, stocks have historically tended to
outperform other types of securities over the longer term.
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Investments in fixed income securities also entail risk. The values of
these securities will tend to fluctuate inversely with changes in interest
rates. Changes in the financial strength of the issuer, or its creditworthiness,
can also affect the value of the securities it issues.
Investing in securities of Japanese Issuers involve certain risks that are
different from investments in U.S. issuers. The Japanese economy has experienced
an economic slowdown in recent years and there can be no assurance about whether
and when it will recover. Moreover, attempts to restructure certain aspects of
the economy, although designed to help, are uncertain in their effects.
Investments in foreign securities involve higher costs. There are also risks due
to differences in securities markets in other countries, in tax policies, in the
level of regulation and in accounting standards, as well as from fluctuations in
currency values. Further, there is often more limited information about foreign
issuers, and there is the possibility of negative governmental actions, and of
political and social unrest.
ADRs are dollar-denominated depository receipts that, typically, are
issued by a United States bank or trust company and represent the deposit with
that bank or trust company of a security of a foreign issuer. ADRs are publicly
traded on exchanges or over-the-counter in the United States. Although ADRs
provide a convenient means to invest in non-U.S. securities, these investments
involve risks generally similar to investment directly in foreign securities.
ADRs may, or may not, be sponsored by the issuer. There are certain risks and
costs associated with investments in unsponsored ADR programs. Because the
issuer is not involved in establishing the program (such programs are often
initiated by broker-dealers), the underlying agreement for payment and service
is between the depository and the shareholders. Expenses related to the
issuance, cancellation and transfer of the ADRs, as well as costs of custody and
dividend payment services may be passed in whole or in part through to
shareholders. The availability of regular reports regarding the issuer is also
less certain.
The Fund's hedging activities, although they are designed to help offset
negative movements in the markets for the Fund's investments, will not always be
successful. Moreover, they can also cause the Fund to lose money or fail to get
the benefit of a gain. Among other things, these negative effects can occur if
the market moves in a direction that the Fund's investment adviser does not
expect or if the Fund cannot close out its position in a hedging instrument.
The Fund's investments will fluctuate in price. This means that Fund share
prices will go up and down, and you can lose money. From time to time, the
Fund's performance may be better or worse than funds with similar investment
policies. Its performance is also likely to differ from that of funds that use
different strategies for selecting stocks. Because the Fund normally invests
primarily in securities of Japanese Issuers, it should be viewed as a vehicle
for diversification and not as a balanced investment program.
PAST PERFORMANCE
The following two tables illustrate the Fund's past performance. The first
table provides some indication of the risks of an investment in the Fund by
showing how the Fund's returns have varied from year to year. The second shows
how the Fund has performed on a cumulative basis since its inception, beginning
with its first full calendar year, in comparison to the TOPIX Index which is a
broad measure of performance of the Japanese securities market. Each table
assumes
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that dividends and distributions paid by the Fund have been reinvested at net
asset value in additional Fund shares. You should remember that past performance
does not necessarily indicate how the Fund will perform in the future.
[GRAPH]
<TABLE>
<CAPTION>
Year-by-year total return
as of 12/31 each year (%)
- ------------------------- -----
<S> <C>
1990 ......................................... (37.01)
1991 ......................................... .29
1992 ......................................... (28.88)
1993 ......................................... 25.31
1994 ......................................... 24.27
1995 ......................................... (3.21)
1996 ......................................... (16.10)
1997 ......................................... (24.25)
1998 ......................................... 6.68
</TABLE>
Best Quarter Q4 '98 +25.32%
Worst Quarter: Q1 '90 -29.90%
AVERAGE ANNUAL TOTAL RETURN AS OF 12/31/98
<TABLE>
<CAPTION>
INCEPTION
1 YEAR 5 YEARS (7/10/89)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fund 6.68% (4.07)% (6.90)%
TOPIX (7.50)% (5.46)% (8.40)%
</TABLE>
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FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses you will pay if you invest in
the Fund. As you can see, the Fund has no fees that are charged directly to
shareholders. Shareholders do, however, bear indirectly a portion of the Fund's
annual operating expenses.
FEE TABLE
<TABLE>
<S> <C>
SHAREHOLDER FEES (fee paid directly from your investment)
Maximum front-end sales charge None
Maximum deferred sales charge None
Maximum sales charge on reinvested dividends and None
distributions
Redemption fee None
Exchange fee None
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted
from Fund assets)
Investment Advisory Fees* 0.75%
Distribution (12b-1) Fees** 0.25%
Other Expenses*** 5.32%
Total Annual Fund Operating Expenses* 6.32%
</TABLE>
* During the Fund's fiscal year ended October 31, 1998, the Adviser waived
its entire advisory fee so that this expense to the Fund was actually
0.00%. The Fund's actual Total Annual Fund Operating Expenses for the same
period were 2.50% due to reimbursements by the Adviser.
** The Fund has adopted a Rule 12b-1 Plan that permits it to pay up to 0.25%
of its average net assets each year for distribution costs. These fees are
an ongoing charge to the Fund and therefore are an indirect expense to
you. Over time these fees may cost you more than other types of sales
charge.
*** "Other expenses" include such expenses as custody, transfer agent, legal,
accounting and registration fees.
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EXAMPLE
The following example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds. The
example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment returns 5% each year, and that the
Fund's operating expenses remain at a constant percentage. Because these
assumptions may vary from your actual experience, your actual return and
expenses may be different.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------
<S> <C> <C> <C>
$628 $1,859 $3,056 $5,918
</TABLE>
Because the Adviser has agreed to waive its fees to the extent the Fund's
normal operating expenses exceed 2.5% for the fiscal year ending October 31,
1999, expenses for the one year period ending October 31, 1999 on a $10,000
investment, assuming full waiver of the Adviser's fee and making the same
assumptions used in the foregoing table, would be $555.
MANAGEMENT
THE ADVISER
The Fund's investment adviser is FCA Corp. FCA is a fee-based financial
planning and investment counseling firm located at 5847 San Felipe, Suite 850,
Houston, Texas 77057. FCA (and predecessors) have been in business since 1975.
FCA acts as investment adviser to Capstone New Zealand Fund, as well as to
several entities focusing on real estate-related investments.
FCA manages the Fund's portfolio investments and places orders for Fund
transactions. For its services, it receives advisory fees from the Fund which
are based on the Fund's net assets. For its fiscal year ended October 31, 1998,
the Fund paid FCA fees equal to 0.00% of the Fund's average net assets pursuant
to a voluntary waiver of management fees by the Adviser. Without this waiver,
fees would have totaled $16,611.
PORTFOLIO MANAGER
Robert W. Scharar, President of FCA, has served as the Fund's portfolio
manager since 1997. Mr. Scharar co-founded the predecessor to FCA, and formed
FCA in 1983. He received a AA from Polk Community College, a BSBA in Accounting
from the University of Florida, an MBA and JD from Northeastern University, and
a LLM in Taxation from Boston University Law School. He is a member of the
Florida and Massachusetts Bars and is a member of the Florida Institute of
Certified Public Accountants. He has been an accounting professor at Bentley and
Nichols Colleges, was an officer of United States Trust Company (Boston), and
was a tax specialist at Coopers & Lybrand. Mr. Scharar is a contributing author
to the Clark Boardman Callaghan's publication, "Estate and Person Financial
Planning." His directorships include the American Association of Attorney-CPA's,
First Commonwealth Mortgage Trust, United Investors Realty Trust and
Southwestern Property Trust.
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<PAGE> 8
BUYING AND SELLING FUND SHARES
Share Price: The purchase and redemption price of Fund shares is
the Fund's net asset value (NAV) per share determined
after your order is received. NAV is generally
calculated as of the close of regular trading on the
New York Stock Exchange, generally 4:00 p.m. Eastern
time, and reflects the Fund's aggregate assets less
its liabilities. The Fund's exchange-traded
investments are valued at their market value at that
time in their primary market (certain derivatives are
priced at 4:15 Eastern time). If market value
quotations are not readily available for an
investment, the investment will be valued at fair
value as determined in good faith by the Fund's Board
of Directors. Prices for debt securities may be
obtained from pricing services, except that
short-term debt securities are valued at amortized
cost. Assets or liabilities denominated in foreign
currencies are translated into U.S. dollars at the
prevailing market rates at 17:00 Greenwich Mean Time
on each day NAV is calculated. NAV is not calculated,
and the Fund will not sell or redeem its shares, on
days the New York Stock Exchange is closed, although
foreign exchanges may be open on those days. Thus,
the value of the Fund's shares may change on days
when shareholders may not be able to purchase or
redeem shares. Further, NAV may be calculated on
certain days on which foreign exchanges on which the
Fund's portfolio securities are primarily traded are
closed for holidays or other reasons.
Minimum Investment: The minimum initial investment in the Fund is $200,
except that there is no minimum for continuous
investment plans. There is no minimum for subsequent
investments. (For telephone purchases, see below.)
Share Certificates: The Fund will not issue share certificates unless you
make a written request to the Transfer Agent. (The
Transfer Agent's address is provided below.)
Telephone Transactions: In your Investment Application, you may authorize the
Fund to accept redemption and exchange orders by
phone. You will be liable for any fraudulent order as
long as the Fund has taken reasonable steps to assure
that the order was proper. Also note that during
unusual market conditions, you may experience delays
in placing telephone orders. (See "Purchasing Fund
Shares" and "Redeeming Fund Shares.")
Frequent Transactions: The Fund reserves the right to limit additional
purchase and exchange transactions by any investor
who makes frequent purchases, redemptions or
exchanges that the Adviser believes might harm the
Fund. In general, more than one transaction per month
may be viewed as excessive.
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PURCHASING FUND SHARES
You may use any of the following methods to purchase Fund shares.
Through Authorized Dealers - You may place your order through any
dealer authorized to take orders for the Fund. If the order is
transmitted to the Fund by 4:00 p.m. Central time, it will be
priced at the NAV per share determined on that day. Otherwise,
later orders will receive the NAV per share next determined. It is
the dealer's responsibility to transmit orders timely.
Through the Distributor - You may place orders directly with the
Fund's distributor by mailing a completed Investment Application
with a check or other negotiable bank draft (payable to Capstone
Japan Fund) to the Transfer Agent.
The Transfer Agent's address is:
Capstone Japan Fund
c/o First Data Investor Services Group, Inc.
P.O. Box 61503
211 South Gulph Road
King of Prussia, Pennsylvania 19406-3101
(Remember to make your check for at least any applicable minimum
noted above.)
INVESTING BY WIRE
You may purchase shares by wire if you have an account with a commercial
bank that is a member of the Federal Reserve System. You should be aware that
your bank may charge a fee for this service.
For an initial investment by wire, you must first call 1-800-845-2340 to
be assigned a Fund account number. Ask your bank to wire the amount of your
investment to:
United Missouri Bank KC NA, ABA #10-10-00695
For: First Data Investor Services Group, Inc.
Account #98-7037-0719;
Further credit Capstone Japan Fund
Note that the wire must include: your name and address, your Fund account
number, and your social security or tax identification number. You must follow
up your wire with a completed Investment Application. This application is
contained in the Fund's prospectus. Mail the application to the Transfer Agent's
address (see above, under "Distributor").
For a subsequent investment by wire, ask your bank to wire funds to the
United Missouri Bank address noted above. The wire must include your name and
your Fund account number.
TELEPHONE INVESTMENT
After you have opened your account, you may make additional investments by
telephone if you completed the "Telephone Purchase Authorization" section of
your Investment Application.
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You may place a telephone order by calling the Transfer Agent at
1-800-845-2340.
The minimum for a telephone purchase is $1000, and the maximum is five
times the NAV of your Fund shares on the day before your telephone order. (You
may not include the value of shares for which you have been issued
certificates.) Your order will be priced at the NAV next determined after your
call. Payment for your order must be received within 3 business days. Mail your
payment to the Transfer Agent's address (see "Distributor," above). If your
payment is not received within 3 business days, you will be liable for any
losses caused by your purchase.
PRE-AUTHORIZED INVESTMENT
You may arrange to make regular monthly investments of at least $25
through automatic deductions from your checking account by completing the
Pre-Authorized Payment section of the Investment Application.
REDEEMING FUND SHARES
You may redeem your Fund shares at any time by writing to the Transfer
Agent's address. The Fund does not charge any fee for redemptions. If you
request the redemption proceeds to be sent to your address of record, you
generally will not need a signature guarantee. A signature guarantee will be
required if:
o you were issued certificates for the shares you are redeeming;
o you want the proceeds to be mailed to a different address or to be
paid to someone other than the record owner;
o you want to transfer ownership of the shares.
Signature guarantee: A signature guarantee can be provided by most banks,
broker-dealers and savings associations, as well as by some credit unions.
Any certificates for shares you are redeeming must accompany your
redemption request. You will generally receive a check for your redemption
amount within a week.
EXPEDITED REDEMPTION
Through an authorized dealer: You may request a redemption through any
broker-dealer authorized to take orders for the Fund. The broker-dealer will
place the redemption order by telephone or telegraph directly with the Fund's
distributor and your share price will be based on the NAV next determined after
the distributor receives the order. The distributor does not charge for this
service, but the broker-dealer may charge a fee. You will generally receive your
proceeds within a week.
Telephone redemption: You may order a redemption by calling the Transfer
Agent at 1-800-845-2340 if:
o your redemption will be at least $1,000;
o no share certificates were issued for the shares you are redeeming;
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o your Investment Application authorized expedited telephone
redemption and designated a bank or broker-dealer to receive the
proceeds.
The proceeds will be mailed or wired to the designated bank or
broker-dealer on the next business day after your redemption order is received.
There is no fee charged by the Fund for this service, although a fee may be
imposed in the future. The Fund may also decide to modify or not to offer this
service. In this case, the Fund will attempt to provide reasonable prior notice
to shareholders.
SYSTEMATIC WITHDRAWAL
You may arrange for periodic withdrawals of $50 or more if you invest at
least $5,000 in the Fund. Under this arrangement, you must elect to have all
your dividends and distributions reinvested in shares of the Fund. Your
withdrawals under this plan may be monthly, quarterly, semi-annual or annual.
Payments under this plan are made by redeeming your Fund shares. The
payments do not represent a yield from the Fund and may be a return of your
capital, thus depleting your investment. Payments under this plan will terminate
when all your shares have been redeemed. The number of payments you receive will
depend on the size of your investment, the amount and frequency of payments, and
the yield and share price of the Fund, which can be expected to fluctuate.
You may terminate your plan at any time by writing to the Transfer Agent.
You continue to have the right to redeem your shares at any time. The cost of
the plan is borne by the Fund and there is no direct charge to you.
REDEMPTION IN KIND
If you place a redemption order for more than $1 million, the Fund
reserves the right to pay the proceeds in portfolio securities of the Fund,
rather than in cash to the extent consistent with applicable legal requirements.
In that case, you will bear any brokerage costs imposed when you sell those
securities.
REDEMPTION SUSPENSIONS OR DELAYS
Although you may normally redeem your shares at any time, redemptions may
not be permitted at times when the New York Stock Exchange is closed for unusual
circumstances, or when the Securities and Exchange Commission allows redemptions
to be suspended.
If you recently purchased the shares by check, the Fund may withhold the
proceeds of your redemption order until it has reasonable assurance that the
purchase check will be collected, which may take up to 15 days from the date of
purchase.
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EXCHANGING FUND SHARES
You may exchange your Fund shares for shares of another Capstone fund at a
price based on their respective NAVs. There is no sales charge or other fee. We
will send you the prospectus of the fund into which you are exchanging and we
urge you to read it. If you have certificates for the shares you are exchanging,
your order cannot be processed until you have endorsed them for transfer and
delivered them to the Transfer Agent.
You may place an exchange order in two ways:
o you may mail your exchange order to the Transfer Agent's address.
o you may place your order by telephone if you authorized telephone
exchanges on your Investment Application. Telephone exchange orders
may be placed from 9:30 a.m. to 4:00 p.m. Eastern time, on any
business day.
Exchanges into a fund can be made only if that fund is eligible for sale
in your state. The Fund may terminate or amend the exchange privilege at any
time with 60 days' notice to shareholders.
Remember that your exchange is a sale of your shares. Tax consequences are
described under "Dividends, Distributions and Taxes."
TAX-DEFERRED RETIREMENT PLANS
Fund shares may be used for virtually all types of tax-deferred retirement
plans, including traditional, Roth and Education IRAs and Simplified Employee
Pension Plans. For more information, call 1-800-262-6631.
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
The Fund expects to pay dividends from its net income and distributions
from its net realized capital gains at least annually, generally in November.
Normally, income dividends and capital gains distributions on your Fund shares
will be paid in additional shares of the Fund, with no sales charge. However, on
your Investment Application, you may elect one of the following other options:
Option 1 To have income dividends paid in cash and capital gains
distributions paid in additional Fund shares.
Option 2 To have both income dividends and capital gains distributions
paid to you in cash.
There is no sales charge or other fee for either option. If you select
Option 1 or Option 2 and the checks sent to you cannot be delivered or remain
uncashed for six months, the aggregate amount of those checks will be invested
in additional Fund shares for your account at the then current NAV, and all your
future dividends and distributions will be paid in Fund shares.
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TAX TREATMENT OF DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS
You will generally be subject to federal income tax each year on dividend
and distribution payments, as well as on any gain realized when you sell
(redeem) or exchange your Fund shares. If you hold Fund shares through a
tax-deferred account (such as a retirement plan), you generally will not owe tax
until you receive a distribution from the account.
The Fund will let you know each year which amounts of your dividend and
distribution payments are to be taxed as ordinary income and which are treated
as long-term capital gain. The tax treatment of these amounts does not depend on
how long you have held your Fund shares or on whether you receive payments in
cash or additional shares.
The tax treatment of any gain or loss you realize when you sell or
exchange Fund shares will depend on how long you held the shares.
You should consult your tax adviser about any special circumstances that
could affect the federal, state and local tax treatment of your Fund
distributions and transactions.
MASSACHUSETTS BUSINESS TRUST
The Fund is a series of Capstone International Series Trust ("Trust"), a
Massachusetts business trust. Because of uncertainty regarding whether
shareholders of a Massachusetts business trust might, under certain
circumstances, be held liable as partners for obligations of the trust, the
Trust's Declaration of Trust specifically provides that the Fund, to the extent
of its assets, will repay any amount assessed against a shareholder by virtue of
being a Fund shareholder.
YEAR 2000 RISKS
Computer users around the world are faced with the dilemma of the Year
2000 issue, which stems from the use of two digits in most computer systems to
designate the year. When the year advances from 1999 to 2000, many computers
will not recognize "00" as the Year 2000. This issue could potentially affect
every aspect of computer-related activity, on an individual and corporate level.
The Funds could be adversely impacted if the computer systems used by the
Adviser and Administrator and other service providers have not been converted to
meet the requirements of the new century. The Funds' Adviser and Administrator
have evaluated their own internal systems and expect them to be fully capable to
handle the change of millennium. The Adviser and Administrator are working with
the providers of the software they use to address the Year 2000 issue, and are
monitoring on an ongoing basis the progress of the Funds' other service
providers to convert their systems to comply with the requirements of Year 2000.
The Adviser and Administrator currently have no reason to believe that these
service providers will not be fully and timely compliant. However, investors
should be aware that there can be no assurance that all systems will be
successfully converted prior to January 1, 2000, in which case it would become
necessary for the Funds to enter into agreements with new service providers or
to make other arrangements.
With respect to securities in which the Fund invests, Year 2000 compliance
is considered as part of the fundamental review of issuers held by the Fund or
being considered for investment, to the extent such information is available.
However, relevant information regarding non-U.S. issuers can be difficult to
obtain.
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FINANCIAL HIGHLIGHTS
The following table sets forth the per share operating performance data
for a share of capital stock outstanding, total return, ratios to average net
assets and other supplemental data for each year indicated.
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
---------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------ ------- ------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net asset value at beginning of period.................... $ 5.21 $ 6.76 $ 6.76 $ 8.03 $ 6.99
------- ------- ------ ------- ------
Income from investment operations:
Net investment loss..................................... (0.07) (0.28) (0.19) (0.21) (0.21)
Net realized and unrealized gain (loss)................. (0.59) (1.27) 0.25 (1.06) 1.25
------- ------- ------ ------- ------
Total from investment operations........................ (0.66) (1.55) 0.06 (1.27) 1.04
Less distributions from:
Net investment income................................... -- -- (0.06) -- --
------- ------- ------ ------- ------
Net asset value at end of period.......................... $ 4.55 $ 5.21 $ 6.76 $ 6.76 $ 8.03
======= ======= ====== ======= ======
TOTAL RETURN(%)(1)........................................ (12.67)% (22.93)% 0.75% (15.82)% 14.88%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (in thousands)................ $ 2,604 $ 1,902 $2,975 $ 2,908 $3,484
Ratio of total expenses to average net assets............. 2.50% 4.55% 3.30% 3.61% 3.25%
Ratio of net investment loss to average net assets........ (1.87)% (3.87)% (2.59)% (2.93)% (2.62)%
Ratio of total expenses to average net assets, before
reimbursements and waivers of expenses.................. 6.32% 5.46% 3.90% 4.21% 3.85%
Ratio of net investment loss to average net assets, before
reimbursements and waivers of expenses.................. (5.69)% (4.78)% (3.19)% (3.53)% (3.22)%
Portfolio turnover rate................................... 35% 73% 47% 27% 57%
</TABLE>
- ---------------
1 Calculated without sales charge. Sales charge eliminated on August 21, 1995.
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HOW TO GET MORE INFORMATION
Further information about the Fund is contained in:
o the Statement of Additional Information (SAI). The SAI contains
more detail about some of the matters discussed in the Prospectus.
The SAI is incorporated into the Prospectus by reference.
o Annual and Semi-Annual Reports about the Fund describe its
performance and list its portfolio securities. They also include a
letter from Fund management describing the Fund's strategies and
discussing market conditions and trends and their implications for
the Fund.
You may obtain free copies of the SAI or reports, or other information
about the Fund or your account, by calling 1-800-262-6631.
You may also get copies of the SAI, reports and other information directly
the Securities and Exchange Commission (SEC) by:
o visiting the SEC's public reference room. (Call 1-800-SEC-0330 for
information.)
o sending a written request, plus a duplicating fee, to the SEC's
Public Reference Section, Washington, D.C. 20549-6009.
o visiting the SEC's website -- http://www.sec.gov.
The Fund's Investment Company Act File Number with the SEC is: 811-4665.
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