[insert design]
Bull & Bear U.S. and Overseas Fund
Prospectus dated May 1, 1999
Bull & Bear U.S. and Overseas Fund seeks 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 assurance that the Fund will achieve its investment objective.
NEWSPAPER LISTING. Shares of the Fund are sold at the
net asset value per share 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.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
CONTENTS
INVESTMENT OBJECTIVE AND STRATEGY.............................................2
MAIN RISKS ..................................................................2
PAST PERFORMANCE..............................................................3
FEES AND EXPENSES OF THE FUND.................................................3
PORTFOLIO MANAGEMENT..........................................................4
DISTRIBUTION AND SHAREHOLDER SERVICES.........................................4
FINANCIAL HIGHLIGHTS..........................................................4
PURCHASING SHARES.............................................................5
REDEEMING SHARES..............................................................6
ACCOUNT AND TRANSACTION POLICIES..............................................7
DISTRIBUTIONS AND TAXES.......................................................7
FOR MORE INFORMATION.................................................Back Cover
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INVESTMENT OBJECTIVE AND STRATEGY
Bull & Bear U.S. and Overseas Fund seeks 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 substantially all of its assets in equity securities of issuers
located in foreign countries with developed and/or emerging markets. The Fund
may invest a portion of its assets in debt securities and in a combination of
countries which include the U.S. and foreign markets. Generally, the Fund pays
dividends annually to its shareholders.
The Fund seeks to invest in equity securities of companies with optimal
combinations of growth in earnings and other fundamental factors, while also
offering reasonable valuations in terms of price/ earnings, price/cash flow,
price/sales and similar ratios. The Fund may sell an investment when the value
or growth potential of the investment appears limited or exceeded by other
investment opportunities, when the issuer's investment no longer appears to meet
the Fund's investment objective, or when the Fund must meet redemptions.
The Fund may invest in companies which have small, medium or large
capitalizations. The Fund may borrow money to purchase securities and engage in
short selling, where risk of loss is potentially unlimited. Additionally, the
Fund may invest in special situations such as liquidations and reorganizations.
The Fund may also lend portfolio securities to other parties. The Fund may
invest in options, warrants, financial futures, and forward contracts, for which
there is no assurance of success.
The Fund may from time to time take defensive positions such as investing some
or all of its assets in cash, cash equivalents, money market securities,
short-term bonds, repurchase agreements, and convertible bonds. When the Fund
takes a defensive position, the Fund may not achieve its investment objective
over the short term.
MAIN RISKS
Market. The primary market risks associated with investing in the Fund are those
related to fluctuations in the value of the Fund's portfolio. A risk of
investing in stocks is that their value will go up and down reflecting stock
market movements and you could lose money. However, you also have the potential
to make money. Also, investing in stocks involves a greater risk of loss of
income than bonds because stocks need not pay dividends.
Foreign Investment. The Fund can be exposed to the unique risks of foreign
investing. Political turmoil and economic instability in the countries in which
the Fund invests could adversely affect the value of your investment. Also, if
the value of any foreign currency in which the Fund's investments are
denominated declines relative to the U.S. dollar, the value and total return of
your investment in the Fund may decline as well. Foreign investments,
particularly investments in emerging markets, carry added risks due to
inadequate or inaccurate financial information about companies, potential
political disturbances, and fluctuations in currency exchange rates.
Non-Diversification. The Fund is non-diversified which means that more than 5%
of the Fund's assets may be invested in the securities of one issuer. As a
result, the Fund may hold a smaller number of issuers than if it were
diversified. If this situation occurs, investing in the Fund could involve more
risk than investing in a Fund that holds a broader range of securities because
changes in the financial condition of a single issuer could cause greater
fluctuation in the Fund's total return.
Illiquid Securities. The Fund may invest up to 15% of its assets in illiquid
securities. Potential risks from investing in illiquid securities are that
illiquid securities can be more difficult to value than more widely traded
securities and the prices realized from the sales of illiquid securities may be
less than if such securities were more widely traded.
Lending. The Fund may lend portfolio securities to borrowers for a fee.
Securities may only be lent if the Fund receives collateral equal to the market
value of the assets lent. Some risk is involved if the borrowers suffer
financial problems and are unable to return the assets lent.
Interest Rates. The Fund's bond investments are affected by interest rates. When
interest rates rise, the prices of bonds typically fall in proportion to their
duration. Duration, expressed in years, is based on the estimated payback
period, or "duration," of a bond and is the most widely used gauge of
sensitivity to interest rate change.
Portfolio Management. The portfolio manager's skill in choosing appropriate
investments for the Fund will determine in large part whether the Fund achieves
its investment objectives.
Active Trading. The Fund expects to trade securities actively. This strategy
could increase transaction costs, reduce performance and may result in taxable
distributions.
2
<PAGE>
Year 2000. The Fund could be adversely affected if computer systems used by CEF
Advisers, Inc. (formerly Bull & Bear Advisers, Inc.) and the Fund's other
service providers do not properly process and calculate date-related information
on and after January 1, 2000. CEF Advisers, Inc. is working to avoid these
problems and to obtain assurances from other service providers that they are
taking similar steps. There could be a negative impact on the Fund. While the
Fund cannot, at this time, predict the degree of impact, it is possible that
foreign markets will be less prepared than U.S. markets.
PAST PERFORMANCE
The bar chart provides some indication of the risks of investing in the Fund by
showing changes in the Fund's performance from year to year. The table compares
the Fund's average annual returns for the 1, 5 and 10 year periods with those of
the Morgan Stanley Capital International ("MSCI") World Index, an index that is
unmanaged and fully invested in common stocks. Both the bar chart and the table
assume reinvestment of dividends and distributions. As with all mutual funds,
past performance is not necessarily an indication of future performance.
YEAR-BY-YEAR TOTAL RETURN AS OF 12/31 EACH YEAR
[GRAPHIC OMITTED]
1989: 11.10, 1990: (8.61), 1991: 22.55, 1992: 2.57, 1993: 26.71,
1994: (13.12), 1995: 25.11, 1996: 5.34, 1997: 5.64, 1998: 1.18
Best Quarter:
10/98-12/98
18.99%
Worst Quarter:
7/98-9/98
(24.43)%
Average annual total return for the periods ended 12/31/98
1 Year 5 Years 10 Years
------ ------- --------
Bull & Bear U.S. and Overseas Fund 1.18% 4.12% 6.94%
MSCI World Index 24.34% 15.68% 10.66%
FEES AND EXPENSES OF THE FUND
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the following tables. Shareholder fees are paid out of
your account. Annual Fund operating expenses are paid out of Fund assets, so
their effect is included in the share price.
Shareholder fees
(fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price).......................................NONE
Maximum Deferred Sales Charge (Load)........................................NONE
Maximum Sales Charge (Load) Imposed on Reinvested Dividends.................NONE
Redemption Fee within 30 days of purchase..................................1.00%
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<PAGE>
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)( as % of average daily net assets)
Management fees ..........................................................1.00%
Distribution and Service (12b-1) fees ....................................0.25%*
Other expenses ...........................................................1.33%
Total Annual Fund Operating Expenses .....................................2.58%
*Reflects a contractual Distribution fee waiver that will continue through
May 1, 2000. Without such waiver, Distribution and service fee and Total annual
fund operating expenses would have been 1.00% and 3.33%, respectively.
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds:
<TABLE>
<S>
The example assumes that you invest $10,000 in the Fund for One Three Five Ten
the time periods indicated and then redeem all of your Year Years Years Years
shares at the end of those periods. The Example also assumes <C> <C> <C> <C>
that your investment has a 5% return each year and that the
Fund's operating expenses remain the same, except for the
first year periods. Although your actual costs may be higher
or lower, based on these assumptions your costs would
be**.............................................................. $ 261 $ 955 $ 1,672 $ 3,571
=============================================
<FN>
*Year one fees are based on contractual Distribution fee.
</FN>
</TABLE>
PORTFOLIO MANAGEMENT
CEF Advisers, Inc. is the investment manager of the Fund, providing day-to-day
advice regarding portfolio transactions and is located at 11 Hanover Square, New
York, New York 10005. 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. As a member of the Investment Policy Committee, he helps
establish general investment guidelines. He has served as portfolio manager of
the Fund since May 1, 1998.
Generally, the Fund pays the investment manager a management fee based on the
average daily net assets of the Fund, at the annual rate of 1% on the first $10
million and declining thereafter as a percentage of average daily net assets.
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, 1998, investment management fees paid by the Fund represented
approximately 1.00% of average daily net assets.
DISTRIBUTION AND SHAREHOLDER SERVICES
Investor Service Center, Inc. is the distributor of the Fund and services
shareholder accounts. The Fund has adopted a plan under Rule 12b-1 and pays the
distributor a distribution or 12b-1 fee in an amount of one percent per annum of
the Fund's average daily net assets as compensation for distribution and service
activities. These fees are paid out of the Fund's assets on an ongoing-basis.
Over time these fees will increase the cost of your investment and may cost you
more than paying other types of sales charges. For the period from May 1, 1999
through May 1, 2000, the distributor of the Fund agrees to waive the
distribution fee of 0.75% per annum of the Fund's average daily net assets
payable to it by the Fund pursuant to the plan.
FINANCIAL HIGHLIGHTS
This table describes the Fund's performance for the past five years. The fiscal
year end is December 31. Certain information reflects financial results for a
single Fund share. Total return shows how much your investment in the Fund would
have increased (or decreased) during each period, assuming you had reinvested
all dividends and distributions. The figures for the periods shown were audited
by Tait, Weller & Baker, the Fund's independent accountants, whose report, along
with the Fund's financial statements, are included in the Annual Report, which
is available upon request.
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<TABLE>
<CAPTION>
Years Ended December 31,
1998 1997 1996 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
PER SHARE DATA(1)
Net asset value at beginning of period.............................. $7.35 $7.91 $8.36 $7.08 $8.71
----- ----- ----- ----- -----
Net investment income (loss)..................................... (.10) (0.05) (0.24) (0.23) (0.13)
Net realized and unrealized gain (loss) on investments........... .18 0.46 0.68 2.00 (1.01)
--- ---- ---- ---- ------
Total from investment operations................................. .08 0.41 0.44 1.77 (1.14)
--- ---- ---- ---- ------
Distributions from net realized gains............................ (.26) (0.97) (0.89) (0.49) (0.49)
Net asset value at end of period.................................... $7.17 $7.35 $7.91 $8.36 $7.08
===== ===== ===== ===== =====
TOTAL RETURN........................................................ 1.18% 5.64% 5.34% 25.11% (13.12)%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted)......................... $7,340 $8,446 $9,836 $9,808 $8,454
Ratio of expenses to average net assets(a)(b)....................... 3.33% 3.28% 3.20% 3.55% 3.53%
Ratio of net investment income (loss) to average net assets(c)...... (1.38)% (0.63)% (2.74)% (2.85)% (1.65)%
Portfolio turnover rate............................................. 69% 205% 255% 214% 212%
<FN>
1 Per share net investment 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. (a) Expense ratio
prior to reimbursement by the investment manager was 3.84% and 3.59% for the
years ended December 31, 1995 and 1994. (b) Expense ratio after the custodian
fee credits was 3.22% and 3.49% for 1997 and 1995. Prior to 1995, such
reductions were reflected in the expense ratios. There were no custodian fee
credits for 1998 and 1996. (c) Ratio prior to reimbursement by the investment
manager was (3.14)% and (1.71)% for the years ended December 31, 1995 and 1994.
</FN>
</TABLE>
PURCHASING SHARES
Your price for Fund shares is the Fund's next calculation, after the order is
placed, of net asset value (NAV) per share which is determined as of the close
of regular trading on the New York Stock Exchange (currently, 4 p.m. eastern
time) each day the exchange is open. The Fund's shares will not be priced on the
days on which the exchange is closed for trading. The Fund's investments are
valued based on market value, or where market quotations are not readily
available, based on fair value as determined in good faith by the Fund's board.
OPENING YOUR ACCOUNT.
By check. Complete and sign the Account Application that accompanies this
prospectus and mail it, along with your check made payable to Bull & Bear U.S.
and Overseas Fund, to Investor Service Center, Box 419789, Kansas City, MO
64141-6789 (see Minimum Investments below).
By wire. Call toll-free 1-888-503-FUND, 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 U.S. and Overseas Fund account number.
You may 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 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 (see Minimum Investments
below).
<TABLE>
<CAPTION>
Minimum Investments
Account Type Initial Subsequent Account Type Initial Subsequent
- ------------ ------- ---------- ------------ ------- ----------
<S> <C> <C> <C> <C> <C>
Regular account $1,000 $100 SIMPLE IRA $1,000 $100
Uniform Gifts/Transfers $1,000 $100 Rollover IRA $1,000 $100
to Minors Act custody
accounts
Traditional IRA $1,000 $100 403(b) plan $1,000 $100
Roth IRA $1,000 $100 Education IRA $500 N/A
SEP-IRA $1,000 $100 Automatic Investment $100 $100
Program
- ------------------------- -------------- ---------------- ---------------------- ------------------- ------------------------
</TABLE>
Checks must be payable to Bull & Bear U.S. and Overseas Fund in U.S. dollars.
Third party checks cannot be accepted. You may be charged a fee for any check
that does not clear.
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<PAGE>
IRAs and retirement accounts. For more information about the IRAs and retirement
accounts listed above, please call toll-free 1-888-503-FUND.
Automatic Investment Program. With the Automatic Investment Program, you can
establish a convenient and affordable long term investment program through one
or more of the plans explained below. Minimum investments described above are
waived for each plan since they are designed to facilitate an automatic monthly
investment of $100 or more into your Fund account.
.................................... ..........................................
Bank Transfer Plan For making automatic investments from a
designated bank account.
.................................... ..........................................
Salary Investing Plan For making automatic investments
through a payroll deduction.
.................................... ..........................................
Government Direct Deposit Plan For making automatic investments from
your federal employment, Social Secutity
or other regular federal government check.
.................................... ..........................................
The Fund reserves the right to redeem any account if participation in the
program ends and the account's value is less than $1,000 due to redemptions.
For more information, or to request the necessary authorization form, please
call toll-free 1-888-503-FUND. You may modify or terminate the Bank Transfer
Plan at any time by written notice received 10 days prior to the scheduled
investment date. To modify or terminate the Salary Investing Plan or Government
Direct Deposit Plan, you should contact your employer or the appropriate U.S.
Government agency, respectively.
Adding to Your Account.
By check. Complete a Bull & Bear FastDeposit form and mail it, along with your
check, made payable to Bull & Bear U.S. and Overseas Fund, to Investor Service
Center, Box 419789, Kansas City, MO 64141-6789 (see Minimum Investments above).
If you do not use that form, include a letter indicating the account number to
which the subsequent investment is to be credited, and the name of the
registered owner.
By Electronic Funds Transfer (EFT). Call toll-free 1-888-503-FUND. The bank you
designate on your Account Application or Authorization Form will be contacted to
arrange for the EFT, which is done through the Automated Clearing House system,
to your Fund account. Requests received by 4 p.m., eastern time, will ordinarily
be credited to your Fund account on the next business day. 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 (see
Minimum Investments above).
By wire. Subsequent investments by wire may be made at any time without having
to call by simply following the same wiring procedures above (see Minimum
Investments above).
REDEEMING SHARES
Generally, you may redeem by any of the methods explained below. Requests for
redemption should include the following information:
o name of the registered owner(s) of the account
o account number
o Fund name
o amount you want to sell
o name and address or wire information of person to receive proceeds
In some instances, a signature guarantee may be required. Signature guarantees
help prevent against fraud. You can obtain one from most banks or securities
dealers, but not from a notary public. For joint accounts, each signature must
be guaranteed.
Please call us to ensure that your signature guarantee will be processed
correctly.
6
<PAGE>
By mail. Write to Investor Service Center, Box 419789, Kansas City, MO
64141-6789, and request the specific amount to be redeemed. The request must be
signed by the registered owner(s) and additional documentation may be required.
By telephone. Call toll-free 1-888-503-FUND, to expedite redemption of Fund
shares.
By EFT. Call toll-free 1-888-503-FUND and request the specific amount to be
redeemed through EFT. You may redeem as little as $250 worth of shares by
requesting EFT service. EFT proceeds are ordinarily available in your bank
account within two business days.
By wire. Call toll-free 1-888-503-FUND and request the specific amount to be
redeemed by wire.
Systematic Withdrawal Plan. If your shares have a value of at least $20,000 you
may elect automatic withdrawals from your Fund account, subject to a minimum
withdrawal of $100. All dividends and distributions are reinvested in the Fund.
ACCOUNT AND TRANSACTION POLICIES
Order execution. Orders to buy and sell shares are executed at the next NAV
calculated after the order has been received in proper form. Orders received on
Fund business days by 4 p.m., eastern time, will be redeemed from your account
that day. Orders received after 4 p.m., eastern time, will be redeemed from your
account on the next Fund business day.
Redemption fee. The Fund is designed as a long term investment, and short term
trading is discouraged. 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 NAV of shares redeemed or exchanged. Redemption fees are paid to
the Fund.
Redemption payment. Payment for shares redeemed will ordinarily be made within
seven days after receipt of the redemption request in proper form.
Accounts with below-minimum balances. If your account balance falls below $500
as a result of selling shares and not because of market action, the Fund
reserves the right, upon 45 days' notice, to close your account or request that
you buy more shares.
Telephone privileges. The Fund accepts telephone orders from all shareholders
and guards against fraud by following reasonable precautions such as requiring
personal identification before carrying out shareholder requests. You could be
responsible for any loss caused by an order which later proves to be fraudulent.
The Fund is not liable as long as the Fund follows reasonable procedures.
Assignment. Fund shares may be transferred to another owner. Instructions are
available from by calling toll-free at 1-888- 503-FUND.
DISTRIBUTIONS AND TAXES
Distributions. The Fund pays its shareholders dividends from any net investment
income, and distributes net capital gains that it has realized, if any. Each of
these distributions, if any, is paid out once a year. Your distributions will be
reinvested in the Fund unless you instruct the Fund otherwise by calling
toll-free 1-888-503-FUND.
Taxes. Generally, you will be taxed when you sell shares, exchange shares and
receive distributions (whether reinvested or taken in cash). Typically, your tax
treatment will be as follows:
Transaction Tax treatment
Income dividends...........................................Ordinary income
Short-term capital gains distributions.....................Ordinary income
Long-term capital gains distributions......................Capital gains
Sales or exchanges of shares held for more than one year...Capital gains or
losses
Sales or exchanges of shares held for one year or less.....Gains are treated as
ordinary income;
losses are subject to
special rules
Because income and capital gains distributions are taxable, you may want to
avoid making a substantial investment in a taxable account when the Fund is
about to declare a distribution. Each January, the Fund issues tax information
on its distributions for the previous year. Any investor for whom the Fund does
not have a valid taxpayer identification number will be subject to backup
withholding for taxes. The tax considerations described in this section do not
apply to tax-deferred accounts or other non-taxable entities. Because everyone's
tax situation is unique, please consult your tax professional about your
investment.
7
<PAGE>
(insert design)
Back Cover
FOR MORE INFORMATION
For investors who want more information on the Fund, the following documents are
available free upon request:
Annual/Semi-annual reports. Contains performance data, lists portfolio holdings
and contains a letter from the fund's manager discussing recent market
conditions, economic trends and fund strategies that significantly affected the
fund's performance during the last fiscal year.
Statement of Additional Information (SAI). Provides a fuller technical and legal
description of the fund's policies, investment restrictions, and business
structure. A current SAI is on file with the Securities and Exchange Commission
(SEC) and is incorporated by reference (is legally considered part of this
prospectus).
To Obtain Information
By telephone, call:
1-888-503-FUND
By mail, write to:
Bull & Bear U.S. and Overseas Fund
Box 419789
Kansas City, MO 64141-6789
By e-mail, write to:
[email protected]
On the Internet, Fund documents
can be viewed online or downloaded from:
SEC http://www.sec.gov
Bull & Bear U.S. and Overseas Fund http://www.mutualfunds.net
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 1-800-SEC-0330) or by sending your request and a
duplicating fee to the SEC's Public Reference Section, Washington, DC
20549-6009. The fund's Investment Company Act file number is 811-4741.
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