The investment objective of Bull & Bear U.S. and Overseas Fund is to seek to
obtain the highest possible total return on its assets from long term growth of
capital and from income principally through a portfolio of securities of U.S.
and overseas issuers. There is no limitation on the percentage or amount of the
Fund's assets which may be invested for growth of capital or income, and at any
time the investment emphasis may be placed solely or primarily on growth of
capital or solely or primarily on income. The Fund provides a means for you to
participate in investment opportunities around the world. There is no assurance
that the Fund will achieve its investment objective.
-------------------------------------------------------------
NEWSPAPER LISTING. Shares of the Fund are sold at the net asset value per share
which is shown daily in the mutual fund section of newspapers under the "Bull &
Bear Group" heading.
-------------------------------------------------------------
This prospectus contains information you should know about the Fund before
you invest. Please keep it for future reference. The Fund's Statement of
Additional Information, dated May 1, 1998, has been filed with the Securities
and Exchange Commission ("SEC") and is incorporated by reference in this
prospectus. It is available at no charge by calling 1-800-847-4200. The SEC
maintains a Web site (http://www.sec.gov) that contains the Fund's Statement of
Additional Information, material incorporated by reference, and other
information regarding registrants that file electronically with the SEC, as does
the Fund. Fund shares are not bank deposits or obligations of, or guaranteed or
endorsed by any bank or any affiliate of any bank, and are not Federally insured
by, obligations of or otherwise supported by the U.S. Government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board or any other agency.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
1
<PAGE>
EXPENSE TABLES. The tables and example below are designed to help you understand
the various costs and expenses that you will bear directly or indirectly as an
investor in the Fund. A $2 monthly account fee is charged if your average
monthly balance is less than $500, unless you are in the Bull & Bear Automatic
Investment Program (see "How to Purchase Shares").
SHAREHOLDER TRANSACTION EXPENSES ANNUAL FUND OPERATING EXPENSES
Sales Load Imposed on (as a percentage of average net assets)
Purchases..................... NONE
Sales Load Imposed on Management Fees.......... 1.00%
Reinvested Dividends.......... NONE
Deferred Sales Load......... NONE 12b-1 Fees............... 1.00%
Redemption Fee within Other Expenses .......... 1.28%
30 days of purchase........... 1.00% -----
Redemption Fee after Total Fund
30 days of purchase............ NONE Operating Expenses....... 3.28%
Exchange Fees............... NONE
EXAMPLE
You would pay the following expenses 1 year 3 years 5 years 10 years
on a $1,000 investment, assuming a 5% ------ ------- ------- --------
annual return and a redemption at the
end of each time period.............. $33 $101 $171 $358
The example set forth above assumes reinvestment of all dividends and
distributions and assumes a 5% annual rate of return as required by the SEC.
THE EXAMPLE IS AN ILLUSTRATION ONLY AND SHOULD NOT BE CONSIDERED AN
INDICATION OF PAST OR FUTURE RETURNS AND EXPENSES. Actual returns and expenses
may be greater or less than those shown. The percentages given for Annual Fund
Operating Expenses are based on the Fund's operating expenses and average daily
net assets during its fiscal year ended December 31, 1997. Long term
shareholders may pay more than the economic equivalent of the maximum front-end
sales charge permitted by the National Association of Securities Dealers, Inc.'s
("NASD") rules regarding investment companies. "Other Expenses" includes amounts
paid to the Fund's Custodian and Transfer Agent and reimbursed to the Investment
Manager and Distributor for administrative and shareholder services.
FINANCIAL HIGHLIGHTS are presented below for a share of capital stock
outstanding throughout each of the ten years ended December 31, 1997. The
information is supplemental to the Fund's financial statements and report
thereon of Tait, Weller & Baker, independent accountants, appearing in the
December 31, 1997 Annual Report to Shareholders and incorporated by reference in
the Statement of Additional Information. On February 26, 1992, the Fund adopted
its current name and investment objective. Previously, it was known as Bull &
Bear Overseas Fund Ltd. and sought to obtain the highest possible total return
on its assets from long term growth of capital and from income principally
through a diversified portfolio of marketable securities of non-U.S. companies.
YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
PER SHARE DATA1
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period.. $7.91 $8.36 $7.08 $8.71 $7.59 $8.37 $7.62 $8.46 $8.03 $7.46
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Income from investment operations:
Net investment income (loss)......... (0.05) (0.24) (0.23) (0.13) (0.20) 0.04 0.07 (0.01) (0.10) 0 .03
Net realized and unrealized gain(loss)
investments......................... 0.46 0.68 2.00 (1.01) 2.22 (0.25) 1.64 (0.72) 0.99 0.56
--- --- --- --- --- --- --- --- --- ---
Total from investment operations..... 0.41 0.44 1.77 (1.14) 2.02 (0.21) 1.71 (0.73) 0.89 0.59
---- ---- ---- ------ ---- ------ ---- ------ ---- ----
Less distributions:
Distributions from net
investment income................... -- -- -- -- -- -- -- -- (0.02) (0.02)
Distributions from net realized gains (0.97) (0.89) (0.49) (0.49) (0.90) (0.57) (0.96) (0.11) (0.44) --
Net asset value at end of period........ $7.35 $7.91 $8.36 $7.08 $8.71 $7.59 $8.37 $7.62 $8.46 $8.03
===== ===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN............................ 5.64% 5.34% 25.11 (13.12)% 26.71% 2.57% 22.55% (8.61)% 11.10% 8.00%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period
(000's omitted)......................... $8,446 $9,836 $9,808 $8,454 $12,250 $9,229 $1,275 $1,158 $1,149 $1,250
Ratio of expenses to average
net assets(a)(b)........................ 3.28% 3.20% 3.55% 3.53% 3.55% 3.56% 3.56% 3.50% 3.50% 3.02%
Ratio of net investment income (loss) to
net assets(c).......................... (0.63)% (2.74)% (2.85)% (1.65)% (2.36)% 0.51% 0.90% (0.09)% (1.29)% .44%
Portfolio turnover rate................. 205% 255% 214% 212% 182% 175% 208% 270% 178% 140%
Average commission per share............ $0.0418 $0.0536
</TABLE>
1 Per share net investment income (loss) and net realized and unrealized gain
(loss) on investments have been computed using the average number of shares
outstanding. These computations had no effect on net asset value per share. The
selected per share data has been restated to reflect the 100% stock dividend
effective February 24, 1992. (a) Ratios before the Investment Manager's
reimbursement of expenses were 3.84%, 3.59%, 3.69%, 4.09%, 13.35%, 11.98%,
14.36%, and 10.13%, for the years ended December 31, 1995, 1994, 1993, 1992,
1991, 1990, 1989, and 1988, respectively. (b) Ratio after the reduction of
custodian fees under a custodian agreement was 3.22% and 3.49% for 1997 and
1995, respectively. Prior to 1995, such reductions were reflected in the expense
ratios. There were no custodian fee credits for 1996. (c) Ratios prior to
reimbursement by the Investment Manager were (3.14)%, (1.71)%, (2.50)%, (0.02)%,
(8.89)%, (8.57)%, (12.15)%, and (6.67)%, for the years ended December 31, 1995,
1994, 1993, 1992, 1991, 1990, 1989, and 1988, respectively.
Information relating to outstanding debt during the fiscal periods shown below:
2
<PAGE>
TABLE OF CONTENTS
Expense Tables.......................2 Distributions and Taxes..............11
Financial Highlights.................2 Determination of Net Asset Value.....12
General..............................3 Investment Manager...................12
The Fund's Investment Program........3 Distribution of Shares...............13
Risk Factors.........................3 Performance Information..............13
How to Purchase Shares...............6 Distribution of Shares...............13
Shareholder Services.................8 Capital Stock........................13
How to Redeem Shares................10 Custodian and Transfer Agent.........14
GENERAL
WHO SHOULD INVEST. The Fund is for long term investors who wish to invest in a
professionally managed portfolio of securities of U.S. and foreign issuers
without having to become involved with the research, detailed bookkeeping, and
operational procedures normally associated with direct investment in such
securities. The Fund is not intended for investors who wish to speculate on
short term swings in U.S. and foreign securities markets. The value of the
Fund's portfolio securities will fluctuate based on global market conditions as
well as those of individual economies and markets. Consistent with a long term
investment approach, you should be able to maintain your investment in the Fund
during periods of adverse market conditions, and you should not rely on an
investment in the Fund for your short term financial needs.
GLOBAL INVESTING. At various times since the end of World War II, many foreign
economies have grown faster than the United States' economy, and the return on
investments in these countries has often exceeded the return on similar
investments in the United States. Moreover, there has normally been a wide and
largely unrelated variation in performance among global equity and fixed income
markets over this period. Although there can be no assurance that these
conditions will continue in the future or that the Fund's Investment Manager
will be able to identify and acquire investments in the faster growing economies
or markets, the Investment Manager believes that investment in the securities of
U.S. and foreign issuers offers potential for significant total return. The
Fund's investment program has been developed in light of these beliefs to
provide an opportunity for you to participate in a professionally managed,
global portfolio of securities.
THE FUND'S INVESTMENT PROGRAM
INVESTMENT OBJECTIVE AND POLICIES. The Fund's investment objective, which may
not be changed without shareholder approval, is to seek to obtain the highest
possible total return on its assets from long term growth of capital and from
income principally through a portfolio of securities of U.S. and overseas
issuers. The Fund may invest in any type of security including common stocks,
convertible securities, preferred stocks, bonds, notes and other debt securities
(including Eurodollar securities), warrants, obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities, or by foreign
governments and their political subdivi sions, money market instruments such as
bankers' acceptances, commercial paper, short term corporate debt securities,
and repurchase agreements. The Fund may also engage in options, futures, and
forward currency transactions.
Factors considered by the Investment Manager in evaluating and selecting
securities include economic and socio-political considerations, the values of
individual securities relative to other investment alternatives, relative
currency values and trends, trends in the determinants of corporate profits, and
management capabilities and practices. Investments may be made for growth of
capital or for income or any combination thereof for the purpose of achieving a
higher overall total return.
The Fund may invest in companies based in (or governments of or within)
Europe, the Far East, Australia, the United States, Canada, South and Central
America, and such other areas and countries as the Investment Manager may
determine. Under normal market conditions, the Fund's assets will be invested in
at least three
3
<PAGE>
different countries, including the United States. For this purpose, an
investment is considered made in a country where the issuer of the security has
substantial activities and interests, taking into account such factors as
location of its assets, personnel, sales and earnings, principal corporate
office, principal trading market for its securities, and place of organization.
There are no limitations on the relative amounts of the Fund's assets that may
be invested in any one country.
FIXED INCOME INVESTING. When seeking income, the Fund will normally invest in
investment grade fixed income securities of varying maturities, depending on the
Investment Manager's evaluation of market patterns and trends. The Fund may
invest up to 35% of its total assets in fixed income securities rated below
investment grade, although it has no current intention of investing more than 5%
of its total assets in such securities during the coming year. The Fund may also
invest without limit in unrated securities if they offer, in the Investment
Manager's opinion, the opportunity for a high overall return by reason of their
yield, discount at purchase or potential for capital appreciation without undue
risk. For temporary defensive purposes the Fund may invest all or a portion of
its assets in high grade fixed income securities.
Investment grade securities are those rated in the top four categories by a
nationally recognized statistical rating organization such as Standard & Poor's
Ratings Group or Moody's Investors Service, Inc., ("Moody's") or, if unrated,
are determined by the Investment Manager to be of comparable quality. Moody's
considers securities in the fourth highest category to have speculative
characteristics. Securities rated below investment grade and many unrated
securities may be considered predominantly speculative and subject to greater
market fluctuations and risks of loss of income and principal than higher rated
fixed income securities. The market value of fixed income securities usually is
affected by changes in the level of interest rates. An increase in interest
rates tends to reduce the market value of such investments, and a decline in
interest rates tends to increase their value. In addition, fixed income
securities with longer maturities, which tend to produce higher yields, are
subject to potentially greater capital appreciation and depreciation than
obligations with shorter maturities. Fluctuations in the market value of fixed
income securities subsequent to their acquisition do not affect cash income from
such securities but are reflected in the Fund's net asset value.
OVERSEAS INVESTMENTS, MARKETS, AND RISK FACTORS. You should understand and
consider carefully the sub stantial risks involved in foreign investing.
Investing in foreign securities, which are generally denominated in foreign
currencies, and utilization of forward contracts on foreign currencies involves
certain considerations comprising both risk and opportunity not typically
associated with investing in U.S. securities. These considerations include:
fluctuations in currency exchange rates; restrictions on foreign investment and
repa triation of capital; costs of converting foreign currency into U.S.
dollars; greater price volatility and trading illiquidity; less public
information on issuers of securities; difficulty in enforcing legal rights
outside of the United States; lack of uniform accounting, auditing and financial
reporting standards; the possible imposition of foreign taxes, exchange controls
and currency restrictions; and the possible greater political, economic and
social instability of developing as well as developed countries including
without limitation, nationalization, expropriation of assets, and war. These
risks are often heightened for investments in developing countries and emerging
markets or when the Fund's investments are concentrated in a small number of
countries. In addition, because transactional and custodial expenses for foreign
securities are generally higher than for domestic securities, the expense ratio
of the Fund can be expected to be higher than that of investment companies
investing exclusively in domestic securities. Securities may be purchased by the
Fund on U.S. and foreign stock exchanges or in the over-the-counter market.
Foreign stock markets are generally not as developed or efficient as those in
the United States. In most foreign markets volume and liquidity are less than in
the United States and, at times, volatility of price can be greater than in the
United States. Commissions on some foreign stock exchanges are higher than the
typically negotiated commissions on U.S. exchanges. There is generally less
government supervision and regulation of foreign stock exchanges, brokers and
companies than in the United States. If the Fund invests in countries in which
settlement of transactions is subject to delay, the Fund's ability to purchase
and sell portfolio securities at the time it desires may be hampered. Delays in
settlement practices in foreign countries may also affect the Fund's liquidity,
making it more difficult to meet redemption requests, or requiring the Fund to
maintain a greater portion of its assets in money market instruments in order to
meet such requests. Some of the securities in which the Fund invests may not be
widely traded, and the Fund's position in such securities may be substantial in
relation to the market for such securities. Accordingly, it may be difficult for
the Fund to dispose of such securities at prevailing market prices in order to
meet redemption requests.
Investments in the equity and fixed income markets of developing countries
involve exposure to economic structures that are generally less diverse and
mature than in the United States and other developed countries,
4
<PAGE>
and to political systems which may be less stable. A developing country can be
considered to be a country which is in the initial stages of its
industrialization cycle. In the past, markets of developing countries, also
known as "emerging markets", have been more volatile than the markets of
developed countries; however, such markets
5
<PAGE>
often have provided higher rates of return to investors, and these
characteristics can be expected to continue in the future. Because there is no
limit on the amount of the Fund's assets which may be invested in companies in,
or governments of, developing countries, an investment in the Fund may be
subject to risks greater than those of investment companies which invest solely
or primarily in the United States and other developed countries.
Since investment in foreign securities usually involves foreign currencies and
since the Fund may temporarily hold funds in bank deposits in foreign currencies
in order to facilitate portfolio transactions, the value of the assets of the
Fund as measured in U.S. dollars may be affected favorably or unfavorably by
changes in foreign currency exchange rates and exchange control regulations. For
example, if the value of the U.S. dollar decreases relative to a foreign
currency in which a Fund investment is denominated or which is temporarily held
by the Fund to facilitate portfolio transactions, the value of such Fund assets
(and thus the Fund's net asset value per share) will increase (all else being
equal). Conversely, an increase in the value of the U.S. dollar relative to such
a foreign currency will result in a decline in the value of such Fund assets
(and its net asset value per share). The Fund may incur additional costs in
connection with conversions of currencies and securities into U.S. dollars. The
Fund will conduct its foreign currency transactions either on a spot (i.e.,
cash) basis, or through entering into forward contracts. The Fund generally will
not enter into a forward currency contract with a term of greater than one year.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with U.S.
banks or dealers involving securities in which the Fund is authorized to invest.
A repurchase agreement is an instrument under which the Fund purchases
securities from a bank or dealer and simultaneously commits to resell the
securities to the bank or dealer at an agreed upon date and price reflecting a
market rate of interest. The Fund's custodian maintains custody of the
underlying securities until their repurchase; thus the obligation of the bank or
dealer to pay the repurchase price is, in effect, secured by such securities.
The Fund's risk is limited to the ability of the seller to pay the agreed upon
amount on the repurchase date; if the seller defaults, the security constitutes
collateral for the seller's obligation to pay. If, however, the seller defaults
and the value of the collateral declines, the Fund may incur loss and expense in
selling the collateral. To attempt to limit the risk in engaging in repurchase
agreements, the Fund enters into repurchase agreements only with banks and
dealers believed by the Investment Manager to present minimum credit risks in
accordance with guidelines established by the Board of Directors. The Fund will
not enter into a repurchase agreement with a maturity of more than seven days
if, as a result, more than 15% of its net assets would then be invested in such
agreements and other illiquid securities.
HEDGING AND INCOME STRATEGIES. The Fund may purchase call options on securities
that the Investment Manager intends to include in the Fund's portfolio in order
to fix the cost of a future purchase or to attempt to enhance return by, for
example, participating in an anticipated price increase of a security. The Fund
may purchase put options to hedge against a decline in the market value of
securities held in the Fund's portfolio or to attempt to enhance return. The
Fund may write (sell) covered put and call options on securities in which it is
authorized to invest. The Fund may purchase and write covered straddles,
purchase and write put and call options on stock and bond indexes, and take
positions in options on foreign currencies to hedge against the risk of foreign
exchange rate fluctuations on foreign securities the Fund holds in its portfolio
or that it intends to purchase. The Fund may purchase and sell futures contracts
on interest rates, stock and bond indexes and foreign currencies, and may
purchase put and call options and write covered put and call options on such
futures contracts.
The Fund may enter into forward currency contracts to set the rate at which
currency exchanges will be made for specific contemplated transactions. The Fund
might also enter into forward currency contracts in amounts approximating the
value of one or more portfolio positions to fix the U.S. dollar value of those
positions. For example, when the Investment Manager believes that the currency
of a particular foreign country may suffer a substantial decline against the
U.S. dollar, it may enter into a forward contract to sell, for a fixed amount of
dollars, the amount of foreign currency approximating the value of some or all
of the Fund's portfolio securities denominated in such foreign currency. The
Fund has no specific limitation on the percentage of assets it may commit to
foreign currency exchange contracts, except that it will not enter into a
forward contract if the amount of assets set aside to cover the contract would
impede portfolio management or its ability to meet redemption requests.
Strategies with options, financial futures, and forward contracts may be
limited by market conditions, regulatory limits and tax considerations, and the
Fund might not employ any of the strategies described above. There can be no
assurance that any strategy used will be successful. The loss from investing in
futures transactions is potentially unlimited. Options and futures may fail as
hedging techniques in cases where price
6
<PAGE>
movements of the securities underlying the options and futures do not follow the
price movements of the portfolio securities subject to the hedge. Gains and
losses on investments in options and futures depend on the ability of the
Investment Manager to predict correctly the direction of stock prices, interest
rates, and other economic factors. In addition, the Fund will likely be unable
to control losses by closing its position where a liquid secondary market does
not exist and there is no assurance that a liquid secondary market for hedging
instruments will always exist. It also may be necessary to defer closing out
hedged positions to avoid adverse tax consequences. The correlation between
hedging instruments and the securities or sectors being hedged also may be
imperfect. The percentage of the Fund's assets segregated to cover its
obligations under options, futures, or forward contracts could impede effective
portfolio management or the ability to meet redemption or other current
obligations. To the extent that the Fund enters into futures contracts, options
on futures contracts and options on foreign currencies traded on a Commodity
Futures Trading Commission ("CFTC") regulated exchange, in each case that is not
for bona fide hedging purposes (as defined by the CFTC), the aggregate initial
margin and premiums required to establish these positions (excluding the amount
by which options are "in-the-money") may not exceed 5% of the liquidation value
of the Fund's portfolio, after taking into account unrealized profits and
unrealized losses on any contracts to which the Fund is a party.
PORTFOLIO TURNOVER. Given the Fund's investment objective, the portfolio
turnover rate will not be a limiting factor when the Investment Manager deems
changes in the portfolio appropriate, and the Fund's investment strategy
therefore includes the possibility of short term transactions. The Fund's
portfolio turnover rate will vary from year to year. It was 214%, 255% and 205%
in 1995, 1996 and 1997, respectively. Higher turnover may increase Fund
brokerage costs and taxes payable by shareholders. (See "Distributions and
Taxes" and "Allocation of Brokerage" in the Statement of Additional
Information.)
LENDING. Pursuant to an agency arrangement with an affiliate of its Custodian,
the Fund may lend portfolio securities or other assets through such affiliate
for a fee to other parties. The Fund's agreement requires that the loans be
continuously secured by cash, securities issued or guaranteed by the U. S.
Government, its agencies or instrumentalities, or any combination of cash and
such securities, as collateral equal at all times to at least the market value
of the assets lent. Loans of portfolio securities may not exceed one-third of
the Fund's total assets. There are risks to the Fund of delay in receiving
additional collateral and risks of delay in recovery of, and failure to recover,
the assets lent should the borrower fail financially or otherwise violate the
terms of the lending agreement. Loans will be made only to borrowers deemed to
be creditworthy. Any loan made by the Fund will provide that it may be
terminated by either party upon reasonable notice to the other party.
OTHER INFORMATION. The Fund is "non-diversified," as defined in the Investment
Company Act of 1940, as amended ("1940 Act"), but intends to continue to qualify
as a regulated investment company ("RIC") under the Internal Revenue Code of
1986, as amended (the "Code") for Federal income tax purposes. This means, in
general, that more than 5% of the Fund's total assets may be invested in the
securities of one issuer (including a foreign government), but only if at the
close of each quarter of the Fund's taxable year, the aggregate amount of such
holdings does not exceed 50% of the value of its total assets and no more than
25% of the value of its total assets is invested in the securities of a single
issuer. To the extent that the Fund's portfolio at times may include the
securities of a smaller number of issuers than if it were diversified (as
defined in the 1940 Act), the Fund will at such times be subject to greater risk
with respect to its portfolio securities than an investment company that invests
in a broader range of securities in that changes in the financial condition or
market assessment of a single issuer may cause greater fluctuation in the Fund's
total return and the price of Fund shares. The Fund may borrow money from a bank
for temporary or emergency purposes or by engaging in reverse repurchase
agreements provided that borrowings do not exceed one-third of the current value
of the Fund's assets taken at market value, less liabilities other than
borrowings. The Fund will not purchase securities for investment while bank
borrowing equaling 5% or more of its total assets is outstanding. In addition to
the Fund's fundamental investment objective, the Fund has adopted certain
fundamental investment restrictions which may not be changed without shareholder
approval. These other fundamental restrictions are set forth in the Statement of
Additional Information. All other investment policies described herein, unless
otherwise stated, are not fundamental and may be changed by the Fund's Board of
Directors without shareholder action.
HOW TO PURCHASE SHARES
The Fund's shares are sold on a continuing basis at net asset value (see
"Determination of Net Asset Value"). The minimum initial investment is $1,000
for regular and Uniform Gifts/Transfers to Minors Act custody accounts, $1,000
for traditional deductible individual retirement accounts ("IRAs"), Roth IRAs,
simplified employee pension plan IRAs ("SEP-IRAs"), savings incentive match plan
for employees IRAs ("SIMPLE IRAs"), rollover IRAs,
7
<PAGE>
403(b) plan accounts, and $500 for Education IRAs. The minimum subsequent
investment is $100. The initial investment minimums are waived if a shareholder
elects to invest $100 or more each month in the Fund through the Bull & Bear
Automatic Investment Program (see "Additional Investments" below). The Fund in
its discretion may waive or lower the investment minimums.
INITIAL INVESTMENT. The Account Application that accompanies this prospectus
should be completed, signed and, with a check or other negotiable bank draft
drawn to the order of U.S. and Overseas Fund, mailed to Investor Service Center,
Box 419789, Kansas City, MO 64141-6789. Initial investments also may be made by
having your bank wire money, as set forth below, in order to avoid mail delays.
ADDITIONAL INVESTMENTS. Additional investments may be made conveniently at any
time by any one or more of the following methods:
o BULL & BEAR AUTOMATIC INVESTMENT PROGRAM. With the Bull & Bear Automatic
Investment Program, you can establish a convenient and affordable long term
investment program through one or more of the Plans explained below. Each Plan
is designed to facilitate an automatic monthly investment of $100 or more into
your Fund account.
The BULL & BEAR BANK TRANSFER PLAN lets you purchase Fund shares on a
certain day each month by transferring electronically a specified
dollar amount from your regular checking account, NOW account, or
bank money market deposit account.
In the BULL & BEAR SALARY INVESTING PLAN, part or all of your salary
may be invested electronically in Fund shares on each pay date,
depending upon your employer's direct deposit program.
The BULL & BEAR GOVERNMENT DIRECT DEPOSIT PLAN allows you to deposit
automatically part or all of certain U.S. Government payments into
your Fund account. Eligible U.S. Government payments include Social
Security, pension benefits, military or retirement benefits, salary,
veteran's benefits and most other recurring payments.
For more information concerning these Plans, or to request the necessary
authorization form(s), please call Investor Service Center, 1-800-847-4200. You
may modify or terminate the Bank Transfer Plan at any time by written notice
received at least 10 days prior to the scheduled investment date. To modify or
terminate the Salary Investing Plan or Government Direct Deposit Plan, you
should contact, respectively, your employer or the appropriate U.S. Government
agency. The Fund reserves the right to redeem any account if participation in
the Program is terminated and the account's value is less than $1,000. The
Program and the Plans do not assure a profit or protect against loss in a
declining market, and you should consider your ability to make purchases when
prices are low.
o CHECK. Mail a check or other negotiable bank draft ($100 minimum), drawn to
the order of U.S. and Overseas Fund, together with a Bull & Bear FastDeposit
form to Investor Service Center, Box 419789, Kansas City, MO 64141-6789. If
you do not use that form, please send a letter indicating the Fund and account
number to which the subsequent investment is to be credited, and name(s) of
the registered owner(s).
o ELECTRONIC FUNDS TRANSFER (EFT). With EFT, you may purchase additional Fund
shares quickly and simply, just by calling Investor Service Center,
1-800-847-4200. We will contact the bank you designate on your Account
Application or Authorization Form to arrange for the EFT, which is done
through the Automated Clearing House system, to your Fund account. For
requests received by 4 p.m., eastern time, the investment will be credited to
your Fund account ordinarily within two business days. There is a $100 minimum
for each EFT investment. Your designated bank must be an Automated Clearing
House member and any subsequent changes in bank account information must be
submitted in writing with a voided check.
o FEDERAL FUNDS WIRE. You may wire money, by following the procedures set forth
below, to receive that day's net asset value per share.
INVESTING BY WIRE. For an initial investment by wire, you must first telephone
Investor Service Center, 1-800-847-4200, to give the name(s) under which the
account is to be registered, tax identification number, the name
of the bank sending the wire, and to be assigned a Bull & Bear U.S. and Overseas
Fund account number. Youmay then purchase shares by requesting your bank to
transmit immediately available funds ("Federal funds") by
wire to: United Missouri Bank NA, ABA #10-10-00695; for Account 98-7052-724-3;
U.S. and Overseas Fund. Your
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account number and name(s) must be specified in the wire as they are to appear
on the account registration. You should then enter your account number on your
completed Account Application and promptly forward it to Investor Service
Center, Box 419789, Kansas City, MO 64141-6789. This service is not available on
days when the Federal Reserve wire system is closed. Subsequent investments by
wire may be made at any time without having to call Investor Service Center by
simply following the same wiring procedures.
SHAREHOLDER ACCOUNTS. When you invest in the Fund, your account will be credited
with all full and fractional shares (to three decimal places), together with any
dividends and other distributions that are paid in additional shares (see
"Distributions and Taxes"). For joint tenant accounts, any account owner has the
authority to act on the account without notice to the other account owners.
Investor Service Center in its sole discretion and for its protection may, but
is not obligated to, require the written consent of all account owners of a
joint tenant account prior to acting upon the instructions of any account owner.
Stock certificates will be issued only for full shares when requested in
writing. In order to facilitate redemptions and exchanges and provide
safekeeping, we recommend that you do not request certificates. You will receive
transaction confirmations upon purchasing or selling shares, and quarterly
statements. Shares of the Fund may also be purchased through certain
broker-dealers and other financial intermediaries that have entered into selling
agreements or related arrangements. Investors may be charged a fee by such
broker or financial intermediary if they effect transactions through such
entity. The Fund or the Distributor may, from time to time, make payments to
broker/dealers or other financial intermediaries for certain services to the
Fund and/or their shareholders, including sub-administration, sub-transfer
agency and shareholder servicing.
WHEN ORDERS ARE EFFECTIVE. The purchase price for Fund shares is the net asset
value of such shares next determined after receipt of a purchase order in proper
form. All purchases are accepted subject to collection at full face value in
Federal funds. Checks must be drawn in U.S. dollars on a U.S. bank. No third
party checks will be accepted and the Fund reserves the right to reject any
order for any reason. Accounts are charged $30 by the Transfer Agent for
submitting checks for investment which are not honored by the investor's bank.
SHAREHOLDER SERVICES
You may modify or terminate your participation in any of the Fund's special
plans or services at any time. Shares or cash should not be withdrawn from any
tax-advantaged retirement plan described below, however, without consulting a
tax adviser concerning possible adverse tax consequences. Additional information
regarding any of the following services is available from Investor Service
Center, 1-800-847-4200.
ELECTRONIC FUNDS TRANSFER (EFT). You automatically have the privilege of linking
your bank account designated on your Account Application or Authorization Form
and your Fund account through Bull & Bear's EFT service. With EFT, you use the
Automated Clearing House system to electronically transfer money quickly and
safely between your bank and Fund accounts. EFT may be used for purchasing and
redeeming Fund shares, direct deposit of dividends and other distributions into
your bank account, the Automatic Investment Program, the Systematic Withdrawal
Plan, and systematic IRA distributions. You may decline this privilege by
checking the indicated box on the Account Application. Any subsequent changes in
bank account information must be submitted in writing (and the Transfer Agent
may require the signature to be guaranteed), with a voided check.
DIVIDEND SWEEP PRIVILEGE. You may elect to have automatically invested either
all dividends or all dividends and other distributions paid by the Fund in any
other Bull & Bear Fund. Shares of the other Bull & Bear Fund will be purchased
at the current net asset value calculated on the payment date. For more
information concerning this privilege and the other Bull & Bear Funds, or to
request a Dividend Sweep Authorization Form, please call Investor Service
Center, 1-800-847-4200. You may cancel this privilege by mailing written
notification to Investor Service Center, Box 419789, Kansas City, MO 64141-6789.
To select a new Bull & Bear Fund after cancellation, you must submit a new
Authorization Form. Enrollment in or cancellation of this privilege is generally
effective three business days following receipt. This privilege is available
only for existing accounts and may not be used to open new accounts.
SYSTEMATIC WITHDRAWAL PLAN. If you own Fund shares with a value of at least
$20,000 you may elect an automatic monthly or quarterly withdrawal of cash from
your Fund account in fixed or variable amounts, subject to a minimum amount of
$100. Under the Systematic Withdrawal Plan, all dividends and other
distributions, if any, are reinvested in the Fund.
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ASSIGNMENT. Fund shares may be transferred to another owner. Instructions are
available from Investor Service Center, 1-800-847-4200.
EXCHANGE PRIVILEGE. You may exchange at least $500 worth of Fund shares for
shares of any Bull & Bear Fund listed below (provided the registration is
exactly the same, the shares may be sold in your state of residence, and the
exchange may otherwise legally be made).
To exchange shares, please call Investor Service Center toll-free at
1-800-847-4200 between 9 a.m. and 5 p.m., eastern time, on any Fund business day
and provide the following information: account registration information
including address, account number and taxpayer identification number;
percentage, number, or dollar value of shares to be redeemed; name and, if
different, the account number of the Bull & Bear Fund to be purchased; and your
identity and telephone number. The other Bull & Bear Funds are:
o BULL & BEAR DOLLAR RESERVES is a high quality money market fund investing in
U.S. Government securities. Income is generally free from most state and local
income taxes. Free unlimited check writing ($250 minimum per check). Pays
monthly dividends.
o BULL & BEAR GOLD INVESTORS seeks long term capital appreciation in investments
with the potential to provide a hedge against inflation and preserve the
purchasing power of the dollar.
o BULL & BEAR SPECIAL EQUITIES FUND invests aggressively for maximum capital
appreciation.
Exchange requests received between 9 a.m. and 4 p.m., eastern time, on any
business day of the Fund will be effected at the net asset values of the Fund
and the other Bull & Bear Fund as determined at the close of that business day.
Exchange requests received between 4 p.m. and 5 p.m., eastern time, on any
business day of the Fund will be effected at the net asset values of the Fund
and the other Bull & Bear Fund as determined at the close of the next Fund
business day. The Fund is designed as a long term investment, and short term
trading is discouraged. Accordingly, if shares of the Fund held for 30 days or
less are redeemed or exchanged, the Fund will deduct a redemption fee equal to
one percent of the net asset value of shares redeemed or exchanged. The fee will
be retained by the Fund and used to offset the transaction costs that short term
trading imposes on the Fund and its shareholders. If an account contains shares
with different holding periods (i.e. some shares held 30 days or less, some
shares held 31 days or more), the shares with the longest holding period will be
redeemed first to determine if the Fund's redemption fee applies. If you are
unable to reach Investor Service Center at the above telephone number you may,
in emergencies, call 1-212-363-1100 or communicate by fax to 1-212- 363-1103.
Exchanges may be difficult or impossible to implement during periods of rapid
changes in economic or market conditions. Exchange privileges may be terminated
or modified by the Fund without notice. For tax purposes, an exchange is treated
as a redemption and purchase of shares. A free prospectus containing more
complete information including charges, expenses and performance, on any of the
Funds listed above is available from Investor Service Center, 1-800-847-4200.
The other Fund's prospectus should be read carefully before exchanging shares.
You may give exchange instructions to Investor Service Center by telephone
without further documentation. If you have requested share certificates, this
procedure may be utilized only if, prior to giving telephone instructions, you
deliver the certificates to the Transfer Agent for deposit into your account.
o BULL & BEAR SECURITIES (DISCOUNT BROKERAGE ACCOUNT) TRANSFERS. If you have an
account at Bull & Bear Securities, Inc., an affiliate of the Investment
Manager and a wholly owned subsidiary of Bull & Bear Group, Inc. offering
discount brokerage services, you may access your investment in any Bull & Bear
Fund to pay for securities purchased in your brokerage account and have
proceeds of securities sold in your brokerage account used to purchase shares
of any Bull & Bear Fund. You may request a Discount Brokerage Account
Application from Bull & Bear Securities, Inc. by calling toll-free at
1-800-262-5800.
TAX-ADVANTAGED RETIREMENT PLANS. These plans provide an opportunity to set aside
money for retirement in a tax-advantaged account in which earnings can be
compounded without incurring a tax liability until the money and earnings are
withdrawn. Contributions may be fully or partially deductible for Federal income
tax purposes as noted below. Information on any of these plans is available from
Investor Service Center by calling toll-free at 1-800-847-4200.
The minimum investment to establish a Bull & Bear Education IRA is $500. The
minimum initial investment to establish any other Bull & Bear IRA or retirement
account is $1,000.
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Minimum subsequent investments are $100. The initial minimum investments are
waived if you elect to invest $100 or more each month in the Fund through the
Bull & Bear Automatic Investment Program. There are no set-up fees for any Bull
& Bear IRA or retirement account. Subject to change on 30 days' notice, the plan
custodian charges Bull & Bear IRAs (excluding Bull & Bear Education IRAs) and
retirement accounts a $10 annual fiduciary fee, $10 for each distribution prior
to age 59 1/2, and a $20 plan termination fee; however, the annual fiduciary fee
is waived if your Bull & Bear IRA or retirement account has assets of $10,000 or
more or if you invest regularly through the Bull & Bear Automatic Investment
Program.
HOW TO REDEEM SHARES
Generally, you may redeem by any of the methods explained below. Requests for
redemption should include the following information: your account registration
information including address, account number and taxpayer identification
number; dollar value, number or percentage of shares to be redeemed; how and to
where the proceeds are to be sent; if applicable, the bank's name, address, ABA
routing number, bank account registration and account number, and a contact
person's name and telephone number; and your daytime telephone number.
BY MAIL. You may request that the Fund redeem any amount of shares by submitting
a written request to Investor Service Center, Box 419789, Kansas City, MO
64141-6789, signed by the record owner(s). If the written request is sent to the
Fund, it will be forwarded to the above address. If stock certificates have been
issued for shares being redeemed, they must accompany the written request.
BY TELEPHONE. You may telephone Investor Service Center, 1-800-847-4200 to
expedite redemption of Fund shares if share certificates have not been issued.
You may redeem as little as $250 worth of shares by requesting Bull & Bear's
Electronic Funds Transfer (EFT) service. With EFT, you can redeem Fund shares
quickly and conveniently because Investor Service Center will contact the bank
designated on your Account Application or Authorization Form to arrange for the
electronic transfer of your redemption proceeds (through the Automated Clearing
House system) to your bank account. EFT proceeds are ordinarily available in
your bank account within two business days.
If you are redeeming $1,000 or more worth of shares, you may request that the
proceeds be mailed to your address of record or mailed or wired to your
authorized bank.
Telephone requests received on Fund business days by 4 p.m., eastern time,
will be redeemed from your account that day, and if after, on the next Fund
business day. Any subsequent changes in bank account information must be
submitted in writing, signature guaranteed, with a voided check. If you are
unable to reach Investor Service Center at the above telephone number you may,
in emergencies, call 1-212-363-1100 or communicate by fax to 1-212-363-1103.
Redemptions by telephone may be difficult or impossible to implement during
periods of rapid changes in economic or market conditions.
CHECK WRITING ACCESS. You may exchange a minimum of $500 at any time by
toll-free telephone call into Bull & Bear Dollar Reserves, Bull & Bear's money
market fund, offering free personalized checks, a $250 check writing minimum
(there is no check writing minimum for Bull & Bear Securities Performance
Plus(R) discount brokerage accounts), and no limit on the number of checks that
may be written. A signature card, which should be submitted for the check
writing privilege, and a free Bull & Bear Dollar Reserves prospectus containing
more complete information including yield, charges and expenses is available
from Investor Service Center, 1-800-847- 4200. Please read the prospectus
carefully before exchanging.
REDEMPTION PRICE AND FEES. The redemption price is the net asset value per share
next determined after receipt of the redemption request in proper form. The Fund
is designed as a long term investment, and short term trading is discouraged.
Accordingly, if shares of the Fund held for 30 days or less are redeemed or
exchanged, the Fund will deduct a redemption fee equal to one percent of the net
asset value of shares redeemed or exchanged. The fee will be retained by the
Fund and used to offset the transaction costs that short term trading imposes on
the Fund and its shareholders. If an account contains shares with different
holding periods (i.e. some shares held 30 days or less, some shares held 31 days
or more), the shares with the longest holding period will be redeemed first to
determine if the Fund's redemption fee applies. Shares acquired through the
Dividend Sweep Privilege and the reinvestment of dividends and capital gains or
redeemed under the Systematic Withdrawal Plan are exempt from the redemption
fee. Registered broker/dealers, investment advisers, banks, and insurance
companies may open accounts and redeem shares by telephone or wire and may
impose a charge for handling purchases and redemptions when acting on behalf of
others.
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REDEMPTION PAYMENT. Payment for shares redeemed will ordinarily be made within
seven days after receipt of a redemption request in proper form. The right of
redemption may not be suspended, or date of payment delayed more than seven
days, except for any period (i) when the New York Stock Exchange is closed or
trading thereon is restricted as determined by the SEC; (ii) under emergency
circumstances as determined by the SEC that make it not reasonably practicable
for the Fund to dispose of securities owned by it or fairly to determine the
value of its assets; or (iii) as the SEC may otherwise permit. The mailing of
proceeds on redemption requests involving any shares purchased by personal,
corporate, or government check or EFT transfer is generally subject to a fifteen
business day delay to allow the check or transfer to clear. The fifteen day
clearing period does not affect the trade date on which a purchase or redemption
order is priced, or any dividends and capital gain distributions to which you
may be entitled through the date of redemption. The clearing period does not
apply to purchases made by wire. Due to the relatively higher cost of
maintaining small accounts, the Fund reserves the right, upon 45 days' notice,
to redeem any account, other than IRA and other Bull & Bear prototype retirement
plan accounts, worth less than $500 except if solely from market action, unless
an investment is made to restore the minimum value.
TELEPHONE PRIVILEGES. You automatically have all telephone privileges to, among
other things, authorize purchases, redemptions and exchanges, with EFT or by
other means, unless declined on the Account Application or otherwise in writing.
Neither the Fund nor Investor Service Center shall be liable for any loss or
damage for acting in good faith upon instructions received by telephone and
believed to be genuine. The Fund employs reasonable procedures to confirm that
instructions communicated by telephone are genuine and if it does not, it may be
liable for losses due to unauthorized or fraudulent transactions. These
procedures include requiring personal identification prior to acting upon
telephone instructions, providing written confirmation of such transactions, and
recording telephone conversations. The Fund may modify or terminate any
telephone privileges or shareholder services (except as noted) at any time
without notice.
SIGNATURE GUARANTEES. No signature guarantees are required when payment is to be
made to you at your address of record. If the redemption proceeds are to be paid
to a non-shareholder of record, or to an address other than your address of
record, or the shares are to be assigned, the Transfer Agent may require that
your signature be guaranteed by an entity acceptable to the Transfer Agent, such
as a commercial bank or trust company or member firm of a national securities
exchange or of the NASD. A notary public may not guarantee signatures. The
Transfer Agent may require further documentation, and may restrict the mailing
of redemption proceeds to your address of record within 60 days of such address
being changed unless you provide a signature guarantee as described above.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. The Fund pays dividends annually to its shareholders from its net
investment income, if any. The Fund also makes an annual distribution to its
shareholders out of any net realized capital gains, after offsetting any capital
loss carryover, and any net realized gains from foreign currency transactions.
Dividends and other distributions, if any, are declared and payable to
shareholders of record on a date in December of each year. Such distributions
may be paid in January of the following year, in which event they will be deemed
received by the shareholders on the preceding December 31 for tax purposes. The
Fund may also make an additional distribution following the end of its fiscal
year out of any undistributed income and capital gains.
Dividends and other distributions are paid in additional Fund shares or shares
of another Bull & Bear Fund pursuant to the Dividend Sweep Privilege, unless you
elect to receive cash on the Account Application or so elect subsequently by
calling Investor Service Center, 1-800-847-4200. For Federal income tax
purposes, dividends and other distributions are treated in the same manner
whether received in additional shares of the Fund or another Bull & Bear Fund or
in cash. Any election will remain in effect until you notify Investor Service
Center to the contrary.
TAXES. The Fund intends to continue to qualify for treatment as a RIC under the
Code so that it will be relieved of Federal income tax on that part of its
investment company taxable income (generally consisting of net investment
income, net short term capital gains, and net gains from certain foreign
currency transactions) and net capital gain (the excess of net long term capital
gain over net short term capital loss) that is distributed to its shareholders.
Dividends paid by the Fund from its investment company taxable income (whether
paid in cash or in additional shares) generally are taxable to its shareholders,
other than shareholders that are not subject to tax on their
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income, as ordinary income to the extent of the Fund's earnings and profits; a
portion of those dividends may be eligible for the corporate dividends-received
deduction. Distributions by the Fund of its net capital gain (whether paid in
cash or in additional shares) when designated as such by the Fund, are taxable
to its shareholders as long term capital gains, regardless of how long they have
held their Fund shares. The Code provides that an individual generally will be
taxed on his or her net capital gain at a maximum rate of 28% with respect to
capital gain from securities held for more than one year but not more than 18
months and at a maximum rate of 20% with respect to capital gain from securities
held for more than 18 months. The Fund notifies its shareholders following the
end of each calendar year of the amounts of dividends and capital gain
distributions paid (or deemed paid) that year and of any portion of those
dividends that qualifies for the corporate dividends-received deduction.
Any dividend or other distribution paid by the Fund will reduce the net asset
value of Fund shares by the amount of the distribution. Furthermore, such
distribution, although similar in effect to a return of capital, will be subject
to tax.
The Fund is required to withhold 31% of all dividends, capital gain
distributions and redemption proceeds payable to any individuals and certain
other noncorporate shareholders who do not provide the Fund with a correct
taxpayer identification number. Withholding at that rate also is required from
dividends and capital gain distributions payable to such shareholders who are
otherwise subject to backup withholding.
The foregoing is only a summary of some of the important Federal income tax
considerations generally affecting the Fund and its shareholders; see the
Statement of Additional Information for a further discussion. Since other
Federal, state and local tax considerations may apply, you should consult your
tax adviser.
DETERMINATION OF NET ASSET VALUE
The value of a share of the Fund is based on the value of its net assets. The
Fund's net assets are the total of its investments and all other assets minus
any liabilities. The value of one share is determined by dividing the net assets
by the total number of shares outstanding. This is referred to as "net asset
value per share" and is determined as of the close of regular trading on the New
York Stock Exchange (currently, 4 p.m., eastern time, unless weather, equipment
failure or other factors contribute to an earlier closing) each business day of
the Fund. A business day of the Fund is any day on which the New York Stock
Exchange is open for trading. The following are not business days of the Fund:
New Year's Day, Martin Luther King Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Portfolio securities and other assets of the Fund are valued primarily on the
basis of market quotations, if readily available. Foreign securities are valued
on the basis of quotations from a primary market in which they are traded and
are translated from the local currency into U.S. dollars using current exchange
rates. Securities and other assets for which quotations are not readily
available will be valued at fair value as determined in good faith by or under
the direction of the Board of Directors.
INVESTMENT MANAGER
Bull & Bear Advisers, Inc. ("Investment Manager") acts as general manager of
the Fund, being responsible for the various functions assumed by it, including
regularly furnishing advice with respect to portfolio transactions. The
Investment Manager manages the investment and reinvestment of the Fund's assets,
subject to the control and final direction of the Board of Directors. The
Investment Manager is authorized to place portfolio transactions with Bull &
Bear Securities, Inc., an affiliate of the Investment Manager, and may allocate
brokerage transactions by taking into account the sales of shares of the Fund
and other affiliated investment companies. The Investment Manager may also
allocate transactions to broker/dealers that remit a portion of their
commissions as a credit against the Fund's expenses. Thomas B. Winmill,
President and Chief Executive Officer of the Investment Manager and the Fund, is
the Fund's portfolio manager. Mr. Winmill has served as a member of the
Investment Manager's Investment Policy Committee since 1990 and as portfolio
manager of the Fund since May 1, 1998.
For its services, the Investment Manager receives a fee, payable monthly,
based on the average daily net assets of the Fund, at the annual rate of 1% on
the first $10 million, 7/8 of 1% over $10 million up to $30 million, 3/4 of 1%
over $30 million up to $150 million, 5/8 of 1% over $150 million up to $500
million, and 1/2 of 1% over $500 million. From time to time, the Investment
Manager may waive all or part of this fee or reimburse the Fund to improve the
Fund's total return. During the fiscal year ended December 31, 1997, investment
management fees paid by the Fund represented approximately 1.00% of average
daily net assets. The Investment Manager provides certain administrative
services to the Fund at cost. The Investment Manager is a wholly owned
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subsidiary of Bull & Bear Group, Inc. ("Group"). Group, a publicly owned company
whose securities are listed on The Nasdaq Stock Market, is a New York based
manager of mutual funds and discount brokerage services.
Bassett S. Winmill may be deemed a controlling person of Group and, therefore,
may be deemed a controlling person of the Investment Manager.
DISTRIBUTION OF SHARES
Pursuant to a Distribution Agreement, Investor Service Center, Inc., 11
Hanover Square, New York, NY 10005 ("Distributor"), acts as the Fund's principal
agent for the sale of its shares. The Investment Manager is an affiliate of the
Distributor. The Fund has also adopted a plan of distribution ("Plan") pursuant
to Rule 12b-1 under the 1940 Act. Pursuant to the Plan, the Fund pays the
Distributor monthly a distribution fee in an amount of three-quarters of one
percent per annum of the Fund's average daily net assets and a service fee in an
amount of one-quarter of one percent per annum of the Fund's average daily net
assets. The service fee portion is intended to cover personal services provided
to Fund shareholders and maintenance of shareholder accounts. The distribution
fee portion is intended to cover all other activities and expenses primarily
intended to result in the sale of the Fund's shares. These fees may be retained
by the Distributor or passed through to brokers, banks and others who provide
services to their customers who are Fund shareholders or to the Distributor. The
Fund will pay the fees to the Distributor until either the Plan is terminated or
not renewed. In that event, the Distributor's expenses in excess of fees
received or accrued through the termination day will be the Distributor's sole
responsibility and not obligations of the Fund. During the period they are in
effect, the Distribution Agreement and Plan obligate the Fund to pay fees to the
Distributor as compensation for its service and distribution activities. If the
Distributor's expenses exceed the fees, the Fund will not be obligated to pay
any additional amount to the Distributor. If the Distributor's expenses are less
than such fees, it may realize a profit. Certain other advertising and sales
materials may be prepared to promote the sale of Fund shares and shares of one
or more other affiliated investment companies. In such cases, the expenses will
be allocated among the Funds involved based on the inquiries resulting from the
materials or other factors deemed appropriate by the Board of Directors. The
costs of personnel and facilities of the Distributor to respond to inquiries by
shareholders and prospective shareholders will also be allocated based on such
relative inquiries or other factors. There is no certainty that the allocation
of any of the foregoing expenses will precisely allocate to the Fund costs
commensurate with the benefits it receives, and it may be that the other
affiliated investment companies and Bull & Bear Securities, Inc. will benefit
therefrom.
PERFORMANCE INFORMATION
Advertisements and other sales literature for the Fund may refer to the Fund's
"average annual total return" and "cumulative total return." All such quotations
are based upon historical earnings and are not intended to indicate future
performance. The investment return on and principal value of an investment in
the Fund will fluctuate, so that an investor's shares when redeemed may be worth
more or less than their original cost. In addition to advertising average annual
total return and cumulative total return, comparative performance information
may be used from time to time in advertising the Fund's shares, including data
from Morningstar, Inc., Lipper Analytical Services, Inc. and other sources.
"Average annual total return" is the average annual compounded rate of return on
a hypothetical $1,000 investment made at the beginning of the advertised period.
In calculating average annual total return, all dividends and other
distributions are assumed to be reinvested. "Cumulative total return" is
calculated by subtracting a hypothetical $1,000 payment to the Fund from the
ending redeemable value of such payment (at the end of the relevant advertised
period), dividing such difference by $1,000 and multiplying the quotient by 100.
In calculating ending redeemable value, all dividends and other distributions
are assumed to be reinvested in additional Fund shares. Although the Fund
imposes a 1% redemption fee on the redemption of shares held for 30 days or
less, all of the periods for which performance is quoted are longer than 30
days, and therefore the 1% fee is not reflected in the performance calculations.
In addition, there is no sales charge upon reinvestment of dividends or other
distributions. Additional information regarding the Fund's performance is
available in its Annual Report to Shareholders, which is available at no charge
upon request to Investor Service Center, 1-800-847-4200.
CAPITAL STOCK
The Fund is a series of Bull & Bear Funds I, Inc. ("Corporation"), a Maryland
corporation organized in 1986. Prior to September 23, 1993, the Corporation
operated under the name Bull & Bear U.S. and Overseas Fund Ltd.
The Corporation is an open-end management investment company and is authorized
to issue up to 1,000,000,000 shares ($.01 par value). The Board of Directors has
designated 250,000,000 shares as shares
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of Bull & Bear U.S. and Overseas Fund. The Corporation's Board of Directors may
establish one or more other series, although it has no current intention of
doing so.
The Fund's stock is freely assignable by way of pledge (as, for example, for
collateral purposes), gift, settlement of an estate and also by an investor to
another investor. Each share has equal dividend, voting, liquidation and
redemption rights with every other share. The shares have no preemptive,
conversion or cumulative voting rights and they are not subject to further call
or assessment.
The Fund's By-Laws provide that there will be no annual meeting of
shareholders in any year except as required by law. In practical effect, this
means that the Fund will not hold an annual meeting of shareholders in years in
which the only matters which would be submitted to shareholders for their
approval are the election of Directors and ratification of the Directors'
selection of accountants, although holders of a majority of the Fund's shares
may call a meeting at any time. There will normally be no meetings of
shareholders for the purpose of electing Directors unless fewer than a majority
of the Directors holding office have been elected by shareholders. Shareholder
meetings will be held in years in which shareholder vote on the Fund's
investment management agreement, plan of distribution, or fundamental investment
objective, policies or restrictions is required by the 1940 Act.
CUSTODIAN AND TRANSFER AGENT
Investors Fiduciary Trust Company, 801 Pennsylvania, Kansas City, MO 64105,
acts as custodian of the Fund's assets, performs certain accounting services for
the Fund, and may appoint one or more subcustodians provided such
subcustodianship is in compliance with the rules and regulations promulgated
under the 1940 Act. The Fund may maintain a portion of its assets in foreign
countries pursuant to such subcustodianships and related foreign depositories.
Utilization by the Fund of such foreign custodial arrangements and depositories
will increase the Fund's expenses.
The Fund's transfer and dividend disbursing agent is DST Systems, Inc., Box
419789, Kansas City, MO 64141-6789. The Distributor provides certain shareholder
administration services to the Fund and is reimbursed its cost by the Fund. The
costs of facilities, personnel and other related expenses are allocated among
the Fund and other affiliated investment companies based on the relative number
of inquiries and other factors. The Fund may also enter into agreements with
brokers, banks and others who may perform on behalf of their customers certain
shareholder services not otherwise provided by the Transfer Agent or the
Distributor.
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[Left Side of Back Cover Page]
U.S. AND
OVERSEAS
FUND
- -----------------------------------------------------
1-800-847-4200
CALL TOLL-FREE FOR FUND PERFORMANCE, TELEPHONE
PURCHASES, EXCHANGES AMONG THE BULL & BEAR
FUNDS, AND TO OBTAIN INFORMATION CONCERNING
YOUR ACCOUNT. OR, ACCESS THE FUND ON THE WEB
AT HTTP://WWW.MUTUALFUNDS.NET
11 HANOVER SQUARE
NEW YORK, NY 10005
Printed on recycled paper.
[Right Side of Back Cover Page]
U.S. AND
OVERSEAS
FUND
- ---------------------------------------------------------
INVESTING WORLDWIDE
FOR THE HIGHEST POSSIBLE
TOTAL RETURN
ELECTRONIC FUNDS TRANSFERS
AUTOMATIC INVESTMENT PROGRAM
RETIREMENT PLANS: TRADITIONAL DEDUCTIBLE IRA,
ROTH IRA, SEP-IRA, SIMPLE IRA, EDUCATION IRA,
AND 403(B)
- ---------------------------------------------------------
PROSPECTUS
MAY 1, 1998
- ---------------------------------------------------------
MINIMUM INITIAL INVESTMENT:
REGULAR ACCOUNTS, $1,000;
TRADITIONAL DEDUCTIBLE IRA, ROTH IRA, SEP-IRA,
SIMPLE IRA, AND 403(B), $1,000
EDUCATION IRA, $500
AUTOMATIC INVESTMENT PROGRAM, $100
MINIMUM SUBSEQUENT INVESTMENTS, $100
BULL
&
BEAR----------------------------------------
PERFORMANCE DRIVEN(R)
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