FIRST EAGLE TRUST, 485APOS, 1998-12-31

FIRST EAGLE TRUST
485APOS, 1998-12-31

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 31, 1998
REGISTRATION NO. 033-10675 AND 811-04935
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 17 [x]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x]
AMENDMENT NO. 20 [x]
------------------------
FIRST EAGLE TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
------------------------
1345 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10105
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(212) 698-3000
------------------------
ROBERT BRUNO
ARNHOLD AND S. BLEICHROEDER, INC.
1345 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10105
(NAME AND ADDRESS OF AGENT FOR SERVICE)
------------------------
COPY TO:
PAUL S. SCHREIBER, ESQ.
SHEARMAN & STERLING
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
------------------------
It is proposed that this filing will become effective (check appropriate
box):
[ ] immediately upon filing pursuant to paragraph (b);
[ ] on (date) pursuant to paragraph (b);
[ ] 60 days after filing pursuant to paragraph (a)(i);
[x] on (March 1, 1999) pursuant to paragraph (a)(i);
[ ] 75 days after filing pursuant to paragraph (a)(ii);
[ ] on (date) pursuant to paragraph (a)(ii) of Rule 485.

If appropriate, check the following box:

[ ] this post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
------------------------

PURSUANT TO RULE 24F-2 UNDER THE INVESTMENT COMPANY ACT OF 1940, REGISTRANT
HAS PREVIOUSLY REGISTERED AN INDEFINITE NUMBER OF SHARES OF ITS COMMON STOCK,
PAR VALUE $.01 PER SHARE. THE REGISTRANT LAST FILED A RULE 24F-2 NOTICE ON
JANUARY __, 1999.

================================================================================

PROSPECTUS
March 1, 1999

FIRST EAGLE TRUST

"THE FIRST EAGLE FUNDS"

FIRST EAGLE FUND OF AMERICA

FIRST EAGLE INTERNATIONAL FUND

------------------------

[LOGO]

------------------------

LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SEC PASSED ON THE
ACCURACY OF THIS PROSPECTUS. IT IS A CRIMINAL OFFENSE TO
CLAIM OTHERWISE.

Welcome to First Eagle Funds (the Funds), managed by Arnhold and S.
Bleichroeder Advisers, Inc., (the Adviser), a wholly owned subsidiary of Arnhold
and S. Bleichroeder, Inc. When you read this prospectus you will learn more
about our Funds: the domestic equity First Eagle Fund of America and the
international equity First Eagle International Fund.

Each Fund offers three classes of shares: a no-load class Y, a level-load
class C, and a front-end load class A. The difference between the share classes
goes beyond sales charges. The charges and fees you pay for all three classes
affect the returns of your investment.

Our no-load class Y shares may be purchased by investors who choose to
make their own investment decisions or use an investment professional whom
they choose to compensate directly for advice. This class has no sales
charges or distribution fees, but does have service fees.

Our level-load class C shares may be purchased by investors who seek
professional guidance and choose to pay for that advice as part of their
investment cost. It has both service and distribution fees. This class has
a contingent deferred sales charge that you pay if you sell any of your
shares within one year of purchase.

Our front-end load class A shares may be purchased by investors who
seek professional guidance and choose to pay for that advice as part of
their investment cost. This class has an up-front sales charge as well as
service and distribution fees.

Over the years, we have always pursued superior investment opportunities
for our clients. Our goal in managing the First Eagle Funds is to provide our
fellow investors with quality long-term returns. But these returns do not come
easily. We put all of our energy into serving investors who desire long-term
growth instead of those who desire a quick gain. Essentially, we believe that
the results of our investment style will encourage you to keep investing with us
through the years.

Our philosophy is quite simple. We base our investment decisions on a few
basic principles:

THE BEST WAY TO MANAGE RISK IS COMPANY BY COMPANY. Investing in
fundamentally sound companies should reduce investment risks and should
lead to the potential for superior returns.

VALUATION IS ONLY HALF OF THE STORY. We look for companies that we
perceive to be undervalued and that have the potential to grow in the
future.

THINK LIKE BUSINESS OWNERS. Instead of concentrating on the earnings
(price to earnings ratio) of a company, we scrutinize the whole company and
examine its cash flow as though we were actually buying the business.

These simple guiding principles have led to the past success of our Funds
and the past success of our shareholders. Nothing is possible, though, without
tireless research. Our company continues research long after we make our initial
investment. We continually search for the best opportunities and select what we
believe to be the most promising stocks.

When you invest in any fund, it is important for you to know how the fund
makes its investments. At First Eagle Funds, we believe that every company has
its own story. So instead of focusing only on the trends of an industry as a
whole, we look at each and every company and try to learn its individual story.
That's what bottom-up stock picking is all about. We believe that this style is
the most effective way to invest both your and our money. And we ask you to
remember that the best investment is one that is made for the long-term.

Before you invest in a mutual fund, you need to know that all mutual funds
have common attributes:

Shares of the mutual fund can rise or fall in value.

You could make money or lose money.

There is no guarantee that a fund will achieve its investment
objective.

This prospectus tells you about our Funds. We urge you to read it very
carefully before you decide to invest and ask that you keep it for future
reference.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Funds................................................................ 3
About First Eagle Fund of America................................... 3
Objective and Approach......................................... 3
Related Risks.................................................. 4
The Fund's Performance......................................... 4
The Fund's Fees and Expenses................................... 5
About First Eagle International Fund................................ 7
Objective and Approach......................................... 7
Related Risks.................................................. 7
The Fund's Performance......................................... 8
The Fund's Fees and Expenses................................... 9
Our Management Team...................................................... 11
The Adviser......................................................... 11
The Portfolio Managers.............................................. 11
Distribution and Shareholder Services Expenses...................... 12
About Your Investment.................................................... 12
Choosing a Share Class.............................................. 12
Purchasing No-load Class Y Shares.............................. 13
Purchasing Level-load Class C Shares........................... 13
Purchasing Front-end Load Class A Shares....................... 14
How to Purchase Shares.............................................. 15
Where to Send Your Application...................................... 15
Our Automatic Investment Plan....................................... 16
How Fund Share Prices Are Calculated................................ 16
Once You Become a Shareholder............................................ 16
Exchanging Your Shares.............................................. 16
Selling Your Shares................................................. 17
Receiving Dividends and Distributions............................... 19
Information on Dividends, Distributions and Taxes........................ 19
General Information................................................. 19
Federal Taxes....................................................... 20
Additional Information.............................................. 20
Financial Highlights..................................................... 21
Useful Shareholder Information (Back Cover).............................. 23
</TABLE>

THE FUNDS

Let us tell you about the Funds.

ABOUT FIRST EAGLE FUND OF AMERICA -- OUR DOMESTIC EQUITY FUND

OBJECTIVE AND APPROACH

The investment objective of First Eagle Fund of America is capital
appreciation. To achieve its objective, the Fund primarily invests in U.S.
equities. At least 65% of the assets are U.S. equity securities, including
common stocks, preferred stocks, convertible securities and warrants. The Fund
may invest to a lesser extent in debt and foreign equity securities. Although no
change is anticipated, the Fund's investment objective can be changed without
shareholder approval. If ever a change is made, it will be done in the best
interest of our shareholders.

The Adviser uses a bottom-up, event-driven approach to choose stocks that
it believes are undervalued and should perform well. The approach looks at
companies from the perspective of total enterprise value, as if buying the whole
company.

[SIDEBAR: In a bottom-up approach, companies and securities are researched
and chosen individually.]

[SIDEBAR: In an event-driven approach, the Adviser looks for companies that
appear to be undervalued in relation to their potential value in light of
positive corporate changes. Signals of corporate change can be management
changes, large share repurchases, potential acquisitions or mergers. If changes
are successful, these companies should realize a rise in the stock price.]

Investing in stocks is actually owning part of a business. The Adviser uses
this principle of ownership to guide the selection of stocks for the Fund. The
Adviser invests in the securities of companies that it believes are undervalued
relative to their overall financial and managerial strength. By careful
selection, the Adviser believes that the Fund may have less exposure to loss.

RELATED RISKS

Investing in First Eagle Fund of America involves various risks.

NON-DIVERSIFICATION RISK

First Eagle Fund of America is a non-diversified mutual fund. As such, an
investment in First Eagle Fund of America may expose your money to greater risks
than if you invest in a diversified fund. Because the Fund may invest in a
limited number of companies and industries, gains or losses in a particular
security may have a greater impact on its share price.

MARKET RISK

In general, a fund's share price moves up and down over the short term in
reaction to stock market movements. This means that an investor could lose money
over short periods, and perhaps over longer periods during extended market
downturns.

EVENT-DRIVEN STYLE RISK

The event-driven investment style used by the Fund carries the additional
risk that the event anticipated occurs later than expected, does not occur at
all, or does not have the desired effect on the market price of the securities.

DEBT SECURITIES RISK

First Eagle Fund of America may invest to a lesser extent in debt
securities. Investing in debt securities involves other risks, including
interest rate and credit risks. Interest rate risk is the risk that rise in
interest rates will cause the value of debt securities to go down. Credit rate
risk is the risk that issuers of debt securities will not be able to make
principal and interest payments.

THE FUND'S PERFORMANCE

Many factors affect a fund's performance. The following bar chart
illustrates the potential risks and rewards of investing in the no-load class Y
shares of First Eagle Fund of America. It shows changes in the Fund's
performance from year to year for the last ten years.

CALENDAR YEAR TOTAL RETURNS CHART

FIRST EAGLE FUND OF AMERICA

<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
----- ------ ----- ----- ----- ----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class Y
Shares 26.65% (17.59)% 20.92% 24.31% 23.85% (2.60)% 36.40% 29.34% 29.46%
</TABLE>

For the periods presented in the bar chart above, here is some additional
return information.

<TABLE>
<S> <C> <C>
Best Quarter............................. 14.55% Fourth Quarter 1992
Worst Quarter............................ (13.48)% Third Quarter 1998
Year-to-Date Return...................... As of December 31, 1998
</TABLE>

The following table illustrates how the Fund's average annual returns for
different calendar periods compare to the return of the Standard & Poor's 500
Stock Index and the Russell Mid Cap Value Index. The figures in the table assume
that you sold your shares at the end of each period.

AVERAGE ANNUAL TOTAL RETURN COMPARISONS TABLE

AS OF DECEMBER 31, 1998

<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION*
------ ------- -------- ----------------
<S> <C> <C> <C> <C>
First Eagle Fund of America
-- Class Y shares..........
Standard & Poor's 500 Stock
Index.......................
Russell Mid Cap Value Index...
</TABLE>
- ------------
* Class Y shares commenced operations in April 1987. Class Y is the only class
shown because neither class C nor class A has been offering shares for more
than one year, as of March 1, 1999.

[SIDEBAR: The Standard & Poor's 500 Stock Index is a widely recognized
unmanaged index of the stocks of 500 U.S. companies. The Russell Mid Cap Value
Index is an unmanaged index consisting of approximately 600 companies as of
9/30/98, with an average capitalization of $3.2 billion.]

Both the bar chart and table assume reinvestment of dividends and
distributions. As with all mutual funds, past performance is not an indication
of future performance.

THE FUND'S FEES AND EXPENSES

The following table describes the fees and expenses you may pay if you buy
and hold shares of First Eagle Fund of America.

Shareholder fees are paid directly from your investment. Operating expenses are
paid from First Eagle Fund of America's assets and are paid by shareholders
indirectly. The expenses in the table below are based on figures from the fiscal
year ended on October 31, 1998.

<TABLE>
<CAPTION>
CLASS Y CLASS C CLASS A
------- ------- -------
<S> <C> <C> <C>
SHAREHOLDER FEES
Maximum Sales Charge (Load) on Purchases........ None None 5.00%
Maximum Deferred Sales Charge (Load)............ None 1.25% None
Redemption Fee.................................. None None None
Exchange Fee.................................... None None None

ANNUAL OPERATING EXPENSES
Management Fees................................. 1.00% 1.00% 1.00%
Distribution (12b-1) Fees....................... None 0.75% 0.25%
Service Fees.................................... 0.25% 0.25% 0.25%
Other Expenses.................................. 0.25%* 0.25%* 0.25%*
----- ----- -----
Total Annual Operating Expenses................. 1.50% 2.25% 1.75%
----- ----- -----
----- ----- -----
</TABLE>

- ------------

* Other expenses are allocated on a pro rata basis. The numbers shown are based
on the expense experience of class Y for fiscal 1998, which was the only class
in existence for the entire year.

EXAMPLE

This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. This hypothetical example
shows what your expenses would be if you invested $10,000 over the time periods
indicated. We assume that you reinvest all distributions, that the average
annual return is 5%, and that operating expenses remain the same. The example
does not represent First Eagle Fund of America's actual past or future expenses
and returns.

You would pay the following expenses if you sold your shares at the end of
the following periods:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class Y shares......................... $153 $ 474 $ 818 $1,791
Class C shares......................... $353 $ 703 $1,205 $2,585
Class A shares......................... $669 $1,024 $1,401 $2,459
</TABLE>

Since only class C shares have a one year contingent deferred sales charge,
you would pay the following expenses if you did not sell your class C shares at
the end of the following periods:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class C shares......................... $228 $ 703 $1,205 $2,585
</TABLE>

ABOUT FIRST EAGLE INTERNATIONAL FUND -- OUR INTERNATIONAL EQUITY FUND

OBJECTIVE AND APPROACH

The investment objective of First Eagle International Fund is capital
appreciation. To achieve its objective, the Fund invests at least 65% of its
assets in securities issued by foreign companies from at least three different
countries. Although no change is anticipated, the Fund's investment objective
can be changed without shareholder approval. If ever a change is made, it will
be done in the best interest of our shareholders.

The Adviser uses a bottom-up approach to stock selection. Through research
and visitation, we seek to find sound companies and investment opportunities
wherever they exist, regardless of national boundaries. Consideration is given
to companies with a wide range of market capitalizations. We seek to find value
before the marketplace recognizes it by applying a venture capitalist approach
to valuation.

[SIDEBAR: In a bottom-up approach, securities are researched and chosen
individually.]

Investing in stocks is actually owning part of a business. The Adviser uses
this principle of ownership to guide the selection of stocks for the Fund. The
Adviser invests in securities that it believes are undervalued relative to the
issuing company's overall financial and managerial strength. By careful
selection, the Adviser believes that the Fund may have less exposure to loss.

First Eagle International Fund may invest to a lesser extent in currency
forwards and futures to manage the risks of local currency fluctuations.

RELATED RISKS

Investing in First Eagle International Fund involves various risks.

FOREIGN EQUITY SECURITIES RISKS

Investing in foreign equity securities involves special risks including
currency exchange rate fluctuation, revaluation of currencies, and different
financial disclosure practices. In addition, foreign markets are generally less
developed than the United States market. Share price volatility may be greater
due to political, economic, or market instability. These risks are more severe
for emerging market countries.

NON-DIVERSIFICATION RISK

First Eagle International Fund is a non-diversified mutual fund. As such,
an investment in First Eagle International Fund may expose your money to greater
risks than if you invest in a diversified fund. Because the Fund may invest in a
limited number of companies and industries, gains or losses in a particular
security may have a greater impact on its share price.

MARKET RISK

DEBT SECURITIES RISK

First Eagle International Fund may invest to a lesser extent in debt
securities. Investing in debt securities involves other risks including interest
rate and credit risks. Interest rate risk is the risk that a rise in interest
rates will cause the value of debt securities to go down. Credit risk is the
risk that issuers of debt securities will not be able to make principal and
interest payments.

CURRENCY FORWARDS AND FUTURES RISK

First Eagle International Fund may invest to a lesser extent in currency
forwards and futures to manage the risks of local currency fluctuations. The
Fund generally uses these contracts to fix the U.S. dollar value of a security
that it has agreed to buy or sell. The contracts are also used to hedge the U.S.
dollar value of foreign securities already owned, particularly if the Fund
expects a decline in the value of the foreign currency. The success of these
strategies depends upon the Adviser's ability to predict future exchange rate
differences between foreign currencies and the U.S. dollar.

THE FUND'S PERFORMANCE

Many factors affect a fund's performance. The following bar chart
illustrates the potential risks and rewards of investing in no-load Class Y
shares of First Eagle International Fund only. It shows changes in the Fund's
performance from year to year since its inception.

CALENDAR YEAR TOTAL RETURNS CHART

FIRST EAGLE INTERNATIONAL FUND

<TABLE>
<CAPTION>
1994 1995 1996 1997 1998
----- ----- ----- ---- ----
<S> <C> <C> <C> <C> <C>
CLASS Y SHARES...................... (1.04)% 11.63% 15.92% 9.26%
</TABLE>

For the periods presented in the bar chart above, here is some additional
return information.

<TABLE>
<S> <C> <C>
Best Quarter............................. 22.72% First Quarter 1998
Worst Quarter............................ (20.81)% Third Quarter 1998
Year-to-Date Return...................... As of December 31, 1998
</TABLE>

The following table illustrates how the Fund's average annual returns for
different calendar periods compare to the return of the Morgan Stanley Capital
International (MSCI) EAFE Index and the MSCI World Ex-USA. The figures in the
table assume that you sold your shares at the end of each period.

AVERAGE ANNUAL TOTAL RETURN COMPARISONS TABLE

AS OF DECEMBER 31, 1998

<TABLE>
<CAPTION>
1 YEAR SINCE INCEPTION*
------ ----------------
<S> <C> <C>
First Eagle International Fund -- Class Y shares...
MSCI EAFE Index....................................
MSCI World Ex-USA..................................
</TABLE>

- ------------

* Class Y shares commenced operations in April 1994. Class Y is the only class
shown because neither class C nor class A has been offering shares for more
than one year, as of March 1, 1999.

[SIDEBAR: The MSCI EAFE Index is a widely followed unmanaged group of stocks
from 20 international markets. The MSCI World Ex-USA is a widely followed
unmanaged group of stocks from 21 international markets.]

Both the bar chart and table assume reinvestment of dividends and
distributions. As with all mutual funds, past performance is not an indication
of future performance.

THE FUND'S FEES AND EXPENSES

The following table describes the fees and expenses you may pay if you buy
and hold shares of First Eagle International Fund. Shareholder fees are paid
directly from your investment. Operating expenses are paid from First Eagle
International Fund's assets and are

paid by shareholders indirectly. The expenses in the table below are based on
figures from the fiscal year ended on October 31, 1998.

<TABLE>
<CAPTION>
CLASS Y CLASS C CLASS A
------- ------- -------
<S> <C> <C> <C>
SHAREHOLDER FEES
Maximum Sales Charge (Load) on Purchases........ None None 5.00%
Maximum Deferred Sales Charge (Load)............ None 1.25% None
Redemption Fee (as a % of amount redeemed within
30 days of purchase).......................... 2.00% 2.00% 2.00%
Exchange Fee.................................... None None None

ANNUAL OPERATING EXPENSES
Management Fees................................. 1.00% 1.00% 1.00%
Distribution (12b-1) Fees....................... None 0.75% 0.25%
Service Fees.................................... 0.25% 0.25% 0.25%
Other Expenses.................................. 1.17%* 1.17%* 1.17%*
----- ----- -----
Total Annual Operating Expenses................. 2.42% 3.17% 2.67%
----- ----- -----
----- ----- -----
</TABLE>

- ------------

* Other expenses are allocated on a pro rata basis. The numbers shown are based
on the expense experience of class Y for fiscal 1998, which was the only class
in existence for the entire year.

EXAMPLE

This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. The hypothetical example
shows what your expenses would be if you invested $10,000 over the time periods
indicated. We assume that you reinvest all distributions, that the average
annual return is 5%, and that operating expenses remain the same. The example
does not represent First Eagle International Fund's actual past or future
expenses and returns.

You would pay the following expenses if you sold your shares at the end of
the following periods:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class Y shares......................... $245 $ 755 $1,291 $2,756
Class C shares......................... $445 $ 977 $1,659 $3,476
Class A shares......................... $707 $1,288 $1,844 $3,353
</TABLE>

Since only class C shares have a one year contingent deferred sales charge,
you would pay the following expenses if you did not sell your class C shares at
the end of the following periods:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class C shares......................... $320 $ 977 $1,659 $3,476
</TABLE>

OUR MANAGEMENT TEAM

THE ADVISER

The Adviser of First Eagle Funds is Arnhold and S. Bleichroeder Advisers,
Inc., a wholly owned subsidiary of Arnhold and S. Bleichroeder, Inc. (ASB). ASB
is the successor firm to two German banking houses -- Gebr. Arnhold founded in
Dresden in 1864 and S. Bleichroeder founded in Berlin in 1803. The firm moved to
New York City in 1937 and conducts its activities under the current name of
Arnhold and S. Bleichroeder, Inc. ASB has used its experience and worldwide
contacts to provide asset management, global securities research and trading,
and investment banking services to institutional clients throughout the world.
As of December 31, 1998, ASB and the Adviser had approximately $ billion in
assets under management.

The Adviser is responsible for the continuous supervision and management of
the Funds under the direction of the Board of Trustees. Each Fund pays the
Adviser a monthly fee at the annual rate of 1.00% of its average daily net
assets for its advisory services.

THE PORTFOLIO MANAGERS

Harold J. Levy has been portfolio manager of the First Eagle Fund of
America since its inception in April 1987, and David L. Cohen has been portfolio
manager of the Fund since 1989. Mr. Levy and Mr. Cohen are also the principal
owners of Iridian Asset Management LLC, which they formed in November 1995, and
ASB owns 27.5% of Iridian. Mr. Levy began his career at ASB in 1985, and Mr.
Cohen began his career at ASB in 1989. Currently, they are employed by the
Adviser to serve as portfolio managers for First Eagle Fund of America.

Arthur F. Lerner has been the portfolio manager of First Eagle
International Fund since its inception in April 1994. He is a Senior Vice
President of Arnhold and S. Bleichroeder, Inc. and has been with the firm since
1969.

[SIDEBAR: WHAT YOU SHOULD KNOW: YEAR 2000

Many computer systems were designed using only two digits to designate
years. As such, these systems may not recognize '00' as being the year 2000 and
may read it as 1900. The Funds could be adversely affected if the computer
systems used by the Adviser and its service providers, primarily the Funds'
transfer agent and custodian, do not address this problem before January 1,
2000. The Funds' investment adviser, transfer agent and custodian expect to have
addressed this

problem before then, and do not anticipate that the services they provide to the
Funds will be adversely affected. The Funds' management will continue to monitor
the situation as the year 2000 approaches. However, if the problem has not been
fully addressed, the Funds could be negatively affected. The year 2000 problem
could also have a negative impact on the companies in which the Fund invests,
which could hurt the Funds' investment returns.]

DISTRIBUTION AND SHAREHOLDER SERVICES EXPENSES

Arnhold and S. Bleichroeder, Inc. is the distributor of the Funds. For
providing shareholder services, ASB receives a service fee as compensation.

To pay for the cost of promoting the Funds and servicing your shareholder
account, class A and class C shares of the Funds have adopted a Rule 12b-1 plan
which requires fees to be paid out of the assets of each class. Over time, the
fees will increase your cost of investing and may cost you more than paying
other types of sales charges. Other broker-dealers who sell the Funds' shares
may receive a portion of this fee as compensation for services they provide. The
following table shows the distribution and service fees associated with
investing in each class of shares.

<TABLE>
<CAPTION>
FIRST EAGLE FUND OF AMERICA AND FIRST EAGLE INTERNATIONAL FUND
DISTRIBUTION FEE (12B-1) SERVICE FEE
<S> <C> <C>
Class Y............................. None 0.25%
Class C............................. 0.75% 0.25%
Class A............................. 0.25% 0.25%
</TABLE>

ABOUT YOUR INVESTMENT

Investing well requires a plan. Whether you invest on your own or use the
services of a financial professional, you should create a strategy that will
best meet your financial goals over the longer term.

[TEAM NOTE: THIS SECTION AND THE FOLLOWING SECTION 'ONCE YOU BECOME A
SHAREHOLDER' IS INTENDED TO BE SHADED IN THE DESIGN PHASE TO STAND OUT.]

CHOOSING A SHARE CLASS

First Eagle Funds offers three classes of shares: class Y, C, and A. Each
class has a service fee and class A and C have distribution

(12b-1) fees. Both class C and class A shares have their own sales charges. The
sales charges and other fees you will pay when purchasing shares depends on
which class of shares you choose. Individual investors may choose from any
class. If you do not choose a class when you invest, we automatically issue
class Y shares to you.

Choosing the right share class can be a difficult decision. The differences
among the share classes go beyond sales charges. If you decide to purchase
class Y shares, you may be making your investment decisions on your own or with
the aid of an investment professional. If you seek the advice of a professional
in your purchase of class Y shares, keep in mind that you may have to compensate
that professional yourself. With class C and class A shares, you receive the
advice of your investment professional to guide your investment decisions. The
compensation of these professionals is part of your investment cost. If you
purchase your shares through an investment professional who continues to service
your account, you should also sell them through that professional. We suggest
that you see an investment professional if you need help in making investment
choices.

Shares of the various classes of the Funds may be offered outside the
United States. These shares may be subject to different sales charges.

The following section describes the share classes in greater detail. Please
read it carefully to decide which class is best for you.

PURCHASING CLASS Y SHARES -- IF YOU INVEST ON YOUR OWN OR SEEK PROFESSIONAL
GUIDANCE

You can purchase no-load class Y shares directly from us or through an
investment professional. An investment professional can purchase class Y shares
for you, and you may have to pay a fee to compensate the professional if you
choose to seek advice. Our class Y shares have no sales charges or distribution
fees, but do have an annual 0.25% service fee. We issue your shares at net asset
value after we receive your initial investment and completed application. Class
Y shares are also available through 401(k) plans.

PURCHASING CLASS C SHARES --
IF YOU SEEK PROFESSIONAL GUIDANCE

You can purchase level-load class C shares at net asset value through an
investment professional. The shares carry an annual 0.25% service fee and an
annual 0.75% Rule 12b-1 fee. You do not have to

pay sales charges on class C shares. However, you may pay a contingent deferred
sales charge (CDSC) equal to 1.25% of the original purchase price or the current
market value, whichever is lower, if you sell your shares within the first year
of purchase. Class C shares are also available through 401(k) plans.

PURCHASING CLASS A SHARES --
IF YOU SEEK PROFESSIONAL GUIDANCE

You can purchase front-end load class A shares through an investment
professional at net asset value plus an initial sales charge as shown in the
table below. Class A shares also carry an annual 0.25% service fee and an annual
0.25% Rule 12b-1 fee.

<TABLE>
<CAPTION>
CLASS A SHARES SALES CHARGE AS A % OF DEALER ALLOWANCE AS A
DOLLARS INVESTED OFFERING PRICE NET AMOUNT INVESTED % OF OFFERING PRICE
- ---------------- -------------- ------------------- ---------------------
<S> <C> <C> <C>
Less than
$50,000....... 5.00% 5.26% 4.50%
$50,000 but less
than
$100,000...... 4.50 4.71 4.00
$100,000 but
less than
$250,000...... 3.75 3.90 3.25
$250,000 but
less than
$500,000...... 2.75 2.83 2.50
$500,000 but
less than
$1,000,000.... 1.75 1.78 1.50
$1,000,000 or
more.......... none none none
</TABLE>

Class A shares are also available through 401(k) plans, other qualified
employee benefit plans and broker-dealer wrap programs. These purchases are free
of sales charges. You may also qualify for a quantity discount (the total of
your investments in class A shares of both Funds) on each new purchase of class
A shares. Ask your investment professional to see if you qualify.

You May Be Eligible for a Discount

You can receive a quantity discount without purchasing your shares all at
once. If you intend to purchase a large dollar amount over a 13-month period to
qualify for a discount, you can complete a 'letter of intent' form. Once we
receive the letter, we will give you the

discount and place any purchases you make into escrow until you have purchased
the intended quantity.

If you do not make the required purchase within the 13-month time frame, we
will deduct any sales charges from the escrow shares.

Dealer Reallowance

ASB, the distributor, normally pays broker-dealers 4.50% of the 5.00%
maximum sales charge. At times, ASB reallows broker-dealers the remaining
portion of the sales charge.

HOW TO PURCHASE SHARES

You can make an investment in the Funds on any Business Day. Purchase
orders received in good order are executed at the next calculated net asset
value. Incomplete orders and orders that are not paid for in a timely manner are
returned. Your investments are subject to the minimums described in the table
below.

[SIDEBAR: A Business Day is any day the New York Stock Exchange (NYSE) is
open for trading. The NYSE is closed for trading on New Year's Day, Martin
Luther King Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving and Christmas.]

<TABLE>
<CAPTION>
MINIMUM INVESTMENTS
- ----------------------------------------------------------------------------
INITIAL ADDITIONAL
------- -----------
<S> <C> <C>
Regular accounts................................... $ 2,500 $100
IRAs............................................... $ 500 No minimum
Retirement plans, such as a 401(k)................. $ 500 No minimum
Employees of Arnhold and S. Bleichroeder, Inc...... $ 500 No minimum
New accounts for or referred by current
shareholders..................................... $ 1,000 $100
</TABLE>

WHERE TO SEND YOUR APPLICATION

If you are purchasing class Y shares, send your completed application and
your check or money order to the address listed on the application. If you wish
to purchase your shares and pay for them through a federal funds wire, fax your
application to the Funds' transfer agent at (614) 470-8702 and call our transfer
agent at (800) 451-3623 to place your wire order.

If you are purchasing class A or C shares, give your purchase request and
your check or money order to your investment professional.

OUR AUTOMATIC INVESTMENT PLAN

If you are investing directly with the Funds, additional investments can
also be made using our Automatic Investment Plan, which deducts the amount you
designate directly from your checking or savings account. See the 'Optional
Shareholder Privileges' section on the application or you can call (800)
451-3623 to obtain more information on this service.

HOW FUND SHARE PRICES ARE CALCULATED

Net asset value for each share class is determined 15 minutes after the
close of trading on the NYSE (normally 4:00 p.m. Eastern Time).

[SIDEBAR] Net Asset Value = A Fund's total assets less any liabilities
[div] shares outstanding

For class A shares, the net asset value plus any front-end sales charge
equals the offering price.

First Eagle Funds uses market quotes to price their securities. Foreign
securities are valued based on quotes from their primary trading market and
converted into U.S. dollars. Securities that are otherwise not readily
marketable, are restricted as to resale, or for which market quotations are not
readily available, are valued at fair value under procedures adopted by the
Board of Trustees.

ONCE YOU BECOME A SHAREHOLDER

After you have opened an account with us, you can exchange or sell your
shares to meet your changing investment goals or other needs.

EXCHANGING YOUR SHARES

You can exchange your shares in any class of one Fund for shares of the
same class in the other Fund. Exchanges are made at net asset value for each
class and are free of charge. You can make up to six exchanges in any 12-month
period.

SELLING YOUR SHARES

You can access your investment at any time by selling your shares on any
Business Day.

HOW TO SELL

WRITTEN REQUESTS

To sell your shares, please submit a written request to the Funds' transfer
agent or to your investment professional and sign it exactly as the account is
registered.

New shareholders do not receive share certificates. However, if you already
have a certificate, sign it and return it to the transfer agent. Remember that
there needs to be a signature for every name that appears on the certificate.

In some instances, a signature guarantee may be required. These include:

Redemption payments over $25,000;

Redemption payments sent to addresses different from the one we have on
record; and

Changes in registration.

We reserve the right to change the guarantee requirements from time to
time. A signature guarantee must be from a member of the Signature Guarantee
Medallion Program (generally, a bank, trust company, savings and loan
association or any broker or securities dealer) for each person whose name is on
the account.

If a corporation, partnership, trust, or fiduciary owns the certificate,
written evidence of their authority must be submitted.

TELEPHONE REQUESTS

You can also request to sell your shares by telephone by calling (800)
451-3623 on any Business Day. For security purposes we will ask you to provide
proper identification and to verify account information before we can honor your
telephone request.

We employ reasonable procedures to confirm that all telephone requests are
genuine, but neither the Funds nor the transfer agent are responsible for the
authenticity of these requests. Therefore, you will have to bear any loss due to
telephone requests made in your name. Telephone calls may be recorded for your
protection.

DETERMINING YOUR SELLING PRICE

After we receive your request, we will sell your shares at the next
determined net asset value. If you are selling shares that you have recently
purchased by check or by using the Automatic Investment Plan, we will hold the
proceeds of your sale until your payment clears. This may take up to ten
Business Days.

SALES PROCEEDS

We normally mail proceeds for shares you have sold to the address we have
on record. We mail checks within seven days after we receive your request.

If your sales proceeds exceed $5,000, you can choose to have them deposited
into a bank account through a federal funds wire. You can indicate this option
on your application. Or you can submit a signature guaranteed written request at
a later date. You may, however, have to pay a fee if you use the federal funds
wire feature and you will have to pay a fee if you request overnight delivery of
your sales proceeds. We normally wire payments on the next business day after we
receive your request.

The Funds may suspend payments under certain emergency conditions when
allowed by the SEC.

REDEMPTION FEE -- FIRST EAGLE INTERNATIONAL FUND

First Eagle International Fund is not designed for short-term traders whose
frequent purchases and redemptions can generate substantial purchases and sales
of portfolio investments that can unnecessarily disrupt the Fund's investment
program. Short-term traders often redeem when the market is most turbulent,
thereby forcing the sale of portfolio securities held by the Fund at the worst
possible time as far as long-term investors are concerned. These short-term
transactions affect all shareholders by increasing transaction costs. Because of
this, if you sell First Eagle International Fund shares within one month of
purchase, you will pay a 2% redemption fee. This fee applies to all three share
classes of First Eagle International Fund.

Shares purchased through 401(k) plans are excluded from the redemption
fees.

REDEMPTIONS IN KIND

The Funds normally pay sales proceeds in cash up to $250,000 or 1% of each
Fund's total value, whichever is less. We reserve the right to make higher
redemption payments to you in the form of marketable securities. This is called
a 'redemption in kind.' You will pay any applicable sales charge or other fees
when you sell these securities.

INVOLUNTARY SALE

To reduce expenses, we may sell your shares and close your account if the
value of your account falls below $500. We will give you 60 days' notice before
we sell your shares. This gives you an opportunity to purchase enough shares to
raise your account value to the $500 minimum to avoid closing the account.

RECEIVING DIVIDENDS AND DISTRIBUTIONS

We expect to pay dividends and distribute any net capital gains annually.
Because First Eagle Funds invest primarily in equity securities and with a
long-term outlook, generally there are more capital gains distributions than
investment income dividend distributions.

All dividend and distribution payments are reinvested at the net asset
value of the Fund in which you currently hold shares, unless you elect to
receive distributions in cash. To receive a distribution in cash, simply submit
a written request more than five business days before we make the payment. We
may elect to make distributions more frequently.

INFORMATION ON DIVIDENDS, DISTRIBUTIONS
AND TAXES

Tax issues can be complicated. Please consult your tax adviser about
federal, state, or local tax consequences or with any other tax questions you
may have.

GENERAL INFORMATION

Both dividends and short-term capital gains distributions are taxed as
dividends and are subject to a maximum federal rate of 39.6% for individual
shareholders.

If you sell your shares after holding them for more than 12 months
(long-term capital gain), you are subject to a maximum capital gains tax rate of
20%.

[SIDEBAR: A dividend is a payment of net investment income. A distribution
is the payment of long-term capital gains.]

Dividends and distributions are generally taxable whether they are taken in
cash or reinvested. Any dividends and distributions declared in November or
December and paid in January are taxable as though they were paid on December
31st.

Remember that exchanges of Fund shares are considered sales and any gains
may be taxable.

FEDERAL TAXES

Federal tax laws require us to withhold 31% of ordinary income dividends,
capital gain dividends, and sales proceeds from shareholders who do not furnish
their tax identification numbers on IRS form W-9.

ADDITIONAL INFORMATION

By January 31st of each year, we will send you a statement showing the tax
status of your dividends and distributions for the prior year.

[SIDEBAR: When you sell your shares, your tax basis is the total of your
cash investments plus dividends and distributions that have been reinvested,
less any return of capital.]

There may be tax consequences for shareholders who are nonresident aliens
or foreign entities. Please see the SAI for more information.

No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offer contained herein, and, if given or made, such other information
or representations must not be relied upon as having been authorized by the
Trust, the Adviser or the Distributor. This Prospectus does not constitute an
offer to sell, or a solicitation of any offer to buy, any of the securities of
the Funds in any jurisdiction to any person to whom it is unlawful to make such
offer in such jurisdiction.

FINANCIAL HIGHLIGHTS

The following tables are intended to help you understand the Funds'
financial performance for the past five years. The information has been audited
by KPMG Peat Marwick LLP, whose report concerning these highlights appears in
the Annual Report dated October 31, 1998. This information should be read in
conjunction with the Statement of Additional Information (SAI). Through February
28, 1998, the Funds issued only one class of shares, currently called class Y
shares. Sales of class C shares commenced on March 2, 1998. Remember that past
performance is not an indication of future performance.

FIRST EAGLE FUND OF AMERICA

<TABLE>
<CAPTION>
FOR THE
YEAR MARCH 2,
ENDED THROUGH FOR THE YEARS ENDED OCTOBER 31,
OCTOBER OCTOBER --------------------------------------
31, 1998 31, 1998 1997 1996 1995 1994
-------- -------- ------ ------ ------ ------
SHARE CLASS Y C* Y Y Y Y
- ------------------------------ -------- -------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Year......................... $20.59 $21.07 $17.97 $16.28 $15.45 $16.53
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Loss........ (0.08) (0.16) (0.06) (0.04) (0.04) (0.12)
Net Realized and Unrealized
Gains.................... 3.62 0.52 5.31 4.08 2.87 0.66
------ ------ ------ ------ ------ ------
Total From Investment
Operations............ 3.54 0.36 5.25 4.04 2.83 0.54
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS FROM:
Net Investment Income...... -- -- -- -- -- --
Net Realized Gain.......... (2.60) -- (2.63) (2.35) (2.00) (1.62)
------ ------ ------ ------ ------ ------
Total Distributions.... (2.60) -- (2.63) (2.35) (2.00) (1.62)
------ ------ ------ ------ ------ ------
Net Asset Value, End of
Year......................... $21.53 $21.43 $20.59 $17.97 $16.28 $15.45
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
Total Return**................ 19.2% 1.7%'DD' 31.0% 27.1% 21.6% 3.8%
Net Assets, End of Year....... $391,797 $674,944 $254,438 $163,403 $134,350 $120,516
(Class Y in thousands, Class C
is actual)

RATIOS TO AVERAGE NET ASSETS:
Expenses...................... 1.5 %(1) 2.2%'D'(2) 1.7%(1) 1.8% 1.9% 1.9%
Net Investment Loss........... (0.4)% (1.1)%'D' (0.3)% (0.2)% (0.3)% (0.7)%
Portfolio Turnover Rate....... 83 % 83% 98% 93% 81% 125%
</TABLE>

* Commencement of operations for class C shares.

** Past performance is not predictive of future performance.

'D' Annualized

'DD' Not Annualized

(1) For the year ended October 31, 1998 and for the year ended October 31,
1997, the Fund has earned credits from the custodian, which reduce
service fees incurred. If the credits are taken into consideration, the
ratio of expenses to average net assets would be 1.5% and 1.7%
respectively.

(2) For the year ended October 31, 1998, the Fund has earned credits from the
custodian, which reduce service fees incurred. If the credits are taken
into consideration, the ratio of expenses to average net assets would
be 2.1%'D'.

FIRST EAGLE INTERNATIONAL FUND

<TABLE>
<CAPTION>
FOR THE
MARCH 2, PERIOD FROM
FOR THE 1998** JANUARY 1, FOR THE YEARS ENDED APRIL 4, 1994*
YEAR ENDED THROUGH THROUGH DECEMBER 31, THROUGH
OCTOBER 31, OCTOBER 31, OCTOBER 31, ----------------------------- DECEMBER 31,
1998 1998 1997 1996 1995 1994
----------- ----------- ----------- ------------ ------------ --------------
SHARE CLASS Y C Y Y Y Y
- ----------------------------- ----------- ----------- ----------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Year........................ $16.17 $16.90 $15.04 $13.38 $12.37 $12.50
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income
(loss).................. (0.06) 0.84 (0.12) (0.16) (0.13) (0.02)
Net Realized and
Unrealized.............. 0.95 (1.73) 1.25 2.29 1.57 (0.11)
------ ------ ------ ------ ------ ------
Gains or Losses
Total From Investment
Operations.............. 0.89 (0.89) 1.13 2.13 1.44 (0.13)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS FROM
Net Investment Income..... -- -- -- -- -- --
Net Realized Gain......... (0.97) -- -- (0.47) (0.43) --
------ ------ ------ ------ ------ ------
Total Distributions....... (0.97) -- -- (0.47) (0.43) --
------ ------ ------ ------ ------ ------
Net Asset Value, End of
Year.................... $16.09 $16.01 $16.17 $15.04 $13.38 $12.37
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
Total Return***........... 5.8% (5.3)%'DD' 7.5%'DD' 15.9% 11.6% (1.0)%'DD'
Net Assets, End of Year... $38,222 $307,738 $36,320 $32,105 $22,420 $20,152
(Class Y in thousands,
Class C is actual)

RATIOS TO AVERAGE NET ASSETS
Expenses..................... 2.4 %(1) 2.9%'D'(2) 2.3 %'D'(1) 2.9 % 3.1 % 2.0 %'D'
Net Investment Income
(loss)...................... (0.5)% 7.0%'D' (1.0)%'D'(1) (1.1)% (1.1)% (0.3)%'D'
Portfolio Turnover Rate...... 85 % 85% 54 % 101% 166% 170%
</TABLE>

* Commencement of operations for class Y shares.
** Commencement of operations for class C shares.
*** Past performance is not predictive of future performance.
'D' Annualized
'DD' Not annualized

(1) For the year ended October 31, 1998, and for the period ended October 31,
1997, the Adviser has waived part of its fees. If such fees were not waived,
the net investment loss would have been $(0.08) and $(0.18), respectively
and the expense ratio would have been 2.4%'D' and 2.8%'D', respectively. In
addition, for the year ended October 31, 1997, and for the year ended
October 31, 1998, the Fund earned credits from the custodian, which reduce
service fees incurred. If the credits are taken into consideration, the
ratio of expenses to average net assets would be 2.3% and 2.3%,
respectively.
(2) For the period from March 2, 1998 to October 31, 1998, the Fund earned
credits from the custodian, which reduce service fees incurred. If the
credits are taken into consideration, the ratio of expenses to average net
assets would be 2.8%'D'.

USEFUL SHAREHOLDER INFORMATION

HOW TO OBTAIN OUR SHAREHOLDER REPORTS

We will send you copies of our Annual, Semiannual, and Quarterly Reports on a
regular basis once you become a shareholder. The Annual Report contains a
discussion of the market conditions and investment strategies that significantly
affected the Funds' performance during the last fiscal year. It also contains
audited financial statements by the Trust's independent accountants. These
reports will be sent to you at the address we have on record. You can also
obtain copies of these reports by connecting to our website listed below.

HOW TO OBTAIN OUR STATEMENT OF ADDITIONAL INFORMATION

The Statement of Additional Information (SAI), which is referenced in this
prospectus is available to you without charge. You may visit the SEC's Internet
Website (http://www.sec.gov) to view the SAI and other information. Also, you
can obtain copies of the SAI by sending your request and fee to the SEC's Public
Reference Section, Washington, D.C. 20549-6009. You also may review and copy
information about the Funds, including the SAI, at the SEC's Public Reference
Room in Washington, D.C. To find out more about the public reference room, call
the SEC at 1-800-SEC-0330.

You can also send your request for the SAI or any shareholder reports to the
Funds' transfer agent at the address below.

HOW TO REACH FIRST EAGLE FUNDS

You can send all requests for information or transactions to our transfer agent:

BISYS Fund Services, Inc.
P.O. Box 182497
Columbus, OH 43218-2497

Or you can contact us by telephone at: (800) 451-3623

You can also reach us for any reason by connecting to our website at:
http://www.firsteaglefunds.com

<TABLE>
<S> <C>
DISTRIBUTOR ADVISER
ARNHOLD AND S. BLEICHROEDER, INC. ARNHOLD AND S. BLEICHROEDER
ADVISERS, INC.
1345 Avenue of the Americas 1345 Avenue of the Americas
New York, NY 10105 New York, NY 10105
</TABLE>

Investment Company Act File Number: 811-04935

FIRST EAGLE TRUST
STATEMENT OF ADDITIONAL INFORMATION
DATED MARCH 1, 1999

FIRST EAGLE TRUST (the 'Trust') is a registered investment company, a
'mutual fund,' that offers investors two investment alternatives, First Eagle
Fund of America and First Eagle International Fund.

The Trust's address is 1345 Avenue of the Americas, New York, New York
10105, and its telephone number is (212) 698-3000 or (888) 482-5667.

FIRST EAGLE FUND OF AMERICA is an open-end, non-diversified mutual fund
whose investment objective is to achieve capital appreciation. First Eagle Fund
of America will seek to achieve its objective by investing primarily in domestic
stocks and to a lesser extent in debt and foreign equity securities. Normally at
least 65% of First Eagle Fund of America's assets will be invested in domestic
securities.

FIRST EAGLE INTERNATIONAL FUND is an open-end, non-diversified mutual fund
whose investment objective is to achieve capital appreciation. First Eagle
International Fund will seek to achieve its objective by investing primarily in
foreign stocks and to a lesser extent in debt and domestic equity securities.
Normally at least 65% of First Eagle International Fund's assets will be
invested in foreign securities, in at least three different countries.

Arnhold and S. Bleichroeder Advisers, Inc. (the 'Adviser') invests the
assets of First Eagle Fund of America and First Eagle International Fund
(collectively, the 'Funds' and individually, a 'Fund') in securities of
companies that appear to be undervalued relative to their overall financial and
managerial strength. The Adviser's investment strategy is to invest in
securities with 'intrinsic values' which are not generally recognized by the
market. There can be no assurance that the Funds' objectives will be achieved.

This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Trust's Prospectus, dated March 1, 1999, a copy of
which may be obtained from the Trust's Transfer and Dividend Disbursing Agent,
BISYS Fund Services Inc., by writing to P.O. Box 182497, Columbus, OH
43218-2497, or by telephoning (800) 451-3623.

All documents incorporated by reference herein have been previously filed
with other shareholder reports which are available, without charge, upon request
at (800) 451-3623.

------------------------

<TABLE>
<CAPTION>
CROSS REFERENCE TO
TABLE OF CONTENTS PAGE PAGE IN PROSPECTUS
----------------- ---- ------------------
<S> <C> <C>
Organization and History...................................................... 2
Additional Investment Information............................................. 2
Investment Restrictions....................................................... 11
Trustees, Officers, and Principal Stockholders................................ 13
Adviser....................................................................... 16
Distributor................................................................... 16
Portfolio Transactions and Brokerage.......................................... 17
Net Asset Value............................................................... 19
Stockholder Investment Account................................................ 20
Redemptions................................................................... 20
Tax Treatment of Certain Transactions......................................... 24
Performance Information....................................................... 25
Custodian, Transfer and Dividend Disbursing Agent and Independent Auditors.... 26
First Eagle Fund of America Financial Statements.............................. F-1
First Eagle International Fund Financial Statements........................... F-5
</TABLE>

ORGANIZATION AND HISTORY

First Eagle Fund of America was initially incorporated in Maryland on
December 11, 1986. First Eagle International Fund was initially incorporated in
Maryland on October 7, 1993. The Trust was organized as a business trust under
the laws of the State of Delaware on December 24, 1997. The Trust may have
multiple series and classes of shares. First Eagle Fund of America and First
Eagle International Fund were reorganized and converted into separate Series of
the Trust on February 27, 1998.

ADDITIONAL INVESTMENT INFORMATION

First Eagle Fund of America is an open-end, non-diversified mutual fund
whose investment objective is to achieve capital appreciation. It seeks to
achieve its objective by investing primarily in domestic stocks and to a lesser
extent in debt and foreign equity securities.

First Eagle Fund of America may purchase call and put options and sell
covered call and covered put options on equity or debt securities and on stock
indices, and, solely for bona fide hedging purposes, acquire positions in
futures contracts and related options traded on a commodities exchange or board
of trade. First Eagle Fund of America may under certain circumstances invest in
securities issued by other investment companies. If First Eagle Fund of America
invests in such securities, investors may be subject to duplicate investment
management or distribution fees.

First Eagle International Fund is an open-end, non-diversified mutual fund
whose investment objective is to achieve capital appreciation. It seeks to
achieve its objective by investing primarily in foreign stocks and to a lesser
extent in debt and domestic equity securities.

First Eagle International Fund offers investors access to a geographically
diverse portfolio, professional research and analysis of issuers and worldwide
markets, and the ability to invest in foreign securities without having to make
individual arrangements for brokers, safekeeping of securities and foreign
currency dealings. First Eagle International Fund invests globally wherever the
greatest opportunities exist in a variety of markets, including Europe, Latin
America, the Pacific Basin and to a lesser extent the United States.

The Adviser invests the assets of the Funds in securities of companies that
appear to be undervalued relative to their overall financial and managerial
strength. The Adviser's investment strategy is to invest in securities with
'intrinsic values' which are not generally recognized by the market. As
non-diversified mutual funds, the Funds may have a greater investment
concentration in some securities than a diversified mutual fund. There can be no
assurance that the Funds' objectives will be achieved.

FOREIGN SECURITIES

The Funds may invest in foreign securities issued by companies of any
nation regardless of its level of development. The risks involved in investing
in foreign securities include political or economic instability in the country
of issue, the difficulty of predicting international trade patterns, the
possibility of imposition of exchange controls and the risk of currency
fluctuations. Foreign securities may be subject to greater fluctuations in price
than securities issued by U.S. corporations or issued or guaranteed by the U.S.
government, its instrumentalities or agencies. Additionally, there may be less
publicly available information about a foreign company than about a domestic
company. Foreign companies generally are not subject to uniform accounting,
auditing and financial reporting standards

comparable to those applicable to domestic companies. There is generally less
government regulation of securities exchanges, brokers and listed companies
abroad than in the United States. Settlement of securities traded on foreign
markets often takes longer than on U.S. markets. In some foreign countries,
there is a possibility of expropriation, confiscatory taxation or diplomatic
developments which could affect investments in those countries. To attempt to
limit the risks of investing in foreign securities, the Fund may use hedging
techniques. In the event of a default of any foreign debt obligation, it may be
more difficult to obtain or enforce a judgment against the issuers of those
securities. Foreign currency denominated securities may be affected favorably or
unfavorably by changes in currency rates and in exchange control regulations,
and costs may be incurred in connection with conversions between currencies.
Foreign currency is also subject to similar risks. Foreign securities and
currencies will be held by the Funds custodian, an 'eligible foreign custodian'
or a 'qualified U.S. bank,' as those terms are defined in the Investment Company
Act of 1940 as amended (the 'Investment Company Act') and the rules and
regulations thereunder.

HIGH YIELD SECURITIES

Changes in the economy and interest rates affect high-yield securities.
During an economic downturn or substantial period of rising interest rates,
highly leveraged issuers will likely experience financial stress which would
adversely affect their ability to service their principal and interest payment
obligations, to meet projected business goals and to obtain additional
financing. If the issuer of a bond owned by a Fund defaults, such Fund may incur
additional expenses in seeking recovery of its investment. Additionally, periods
of economic uncertainty and changes can result in increased volatility of market
prices of high yield bonds. Furthermore, the market prices of high yield bonds
structured as zero coupon or pay-in-kind securities are affected to a greater
extent by interest rate changes and are more volatile than securities which pay
interest periodically and in cash. If the Funds invest in zero coupon or
pay-in-kind securities, they will be subject to special tax considerations
related to those securities. The Funds will have to report the interest on those
securities as income even though they receive no interest until the security's
maturity or payment date. Each Fund has no current intention of investing more
than 5% of its net assets in high yield bonds.

OPTIONS TRANSACTIONS

The Adviser believes that certain transactions in options on securities and
on stock indices may be useful in limiting a Fund's investment risk and
augmenting its investment return. The Adviser expects, however, the amount of a
Fund's assets that will be involved in options transactions to be small relative
to that Fund's assets. Accordingly, it is expected that only a relatively small
portion of a Fund's investment return will be attributable to transactions in
options on securities and on stock indices. The Funds may invest in options
transactions involving options on securities and on stock indices that are
traded on U.S. and foreign exchanges or in the over-the-counter markets.

A call option is a contract pursuant to which the purchaser, in return for
a premium paid, has the right to buy the equity or debt security underlying the
option at a specified exercise price at any time during the term of the option.
With respect to a call option on a stock index, the purchaser is entitled to
receive cash if the underlying stock index rises sufficiently above its level at
the time the option was purchased. The writer of the call option, who receives
the premium, has the obligation, upon exercise of the option, to deliver the
underlying equity or debt security against payment of the exercise price. With

respect to a call option on a stock index, the writer has the obligation to
deliver cash if the underlying index rises sufficiently above its level when the
option was purchased.

A put option gives the purchaser, in return for a premium, the right to
sell the underlying equity or debt security at a specified exercise price during
the term of the option. With respect to a put option on a stock index, the
purchaser is entitled to receive cash if the underlying index falls sufficiently
below its level at the time the option was purchased. The writer of the put, who
receives the premium, has the obligation to buy the underlying equity or debt
security upon exercise at the exercise price. With respect to a put option on a
stock index, the writer has the obligation to deliver cash if the underlying
index falls sufficiently below its level when the option was purchased. The
price of an option will reflect, among other things, the relationship of the
exercise price to the market price of the underlying financial instrument or
index, the price volatility of the underlying financial instrument or index, the
remaining term of the option, supply and demand of such options and interest
rates.

One purpose of purchasing call options is to hedge against an increase in
the price of securities that a Fund ultimately intends to buy. Hedge protection
is provided during the life of the call because that Fund, as the holder of the
call, is able to buy the underlying security at the exercise price, and, in the
case of a call on a stock index, is entitled to receive cash if the underlying
index rises sufficiently. However, if the value of a security underlying a call
option or the general market or a market sector does not rise sufficiently when
that Fund has purchased a call option on the underlying instrument, that option
may result in a loss.

Securities and options exchanges have established limitations on the
maximum number of options that an investor or group of investors acting in
concert may write. It is possible that a Fund and other clients of the Adviser
may be considered such a group. Position limits may restrict a Fund's ability to
purchase or sell options on particular securities and on stock indices.

COVERED OPTION WRITING

A Fund may write 'covered' call options on equity or debt securities and on
stock indices in seeking to enhance investment return or to hedge against
declines in the prices of portfolio securities or may write put options to hedge
against increases in the prices of securities which it intends to purchase. A
call option is covered if a Fund holds, on a share-for-share basis, a call on
the same security as the call written where the exercise price of the call held
is equal to or less than the exercise price of the call written, or greater than
the exercise price of the call written if the difference is maintained by that
Fund in cash, Treasury bills or other high grade short-term obligations in a
segregated account with its Custodian.

A put option is 'covered' if a Fund maintains cash, Treasury bills or other
high grade short-term obligations with a value equal to the exercise price in a
segregated account with its Custodian, or holds on a share-for-share basis a put
on the same equity or debt security as the put written where the exercise price
of the put held is equal to or greater than the exercise price of the put
written, or lower than the exercise price of the put written if the difference
is maintained in a segregated account with its Custodian.

One reason for writing options is to attempt to realize, through the
receipt of premiums, a greater return than would be realized on the securities
alone. In the case of a securities call, the writer receives the premium, but
has given up the opportunity for profit from a price increase in the underlying
security above the exercise price during the option period. In the case of a
stock index call, the writer receives

the premium, but is obligated to deliver cash if the underlying index rises
sufficiently during the option period. Conversely, the put option writer has, in
the form of the premium, gained a profit as long as the price of the underlying
security or stock index remains above the exercise price, but has assumed an
obligation to purchase the underlying security at the exercise price from or
deliver cash to the buyer of the put option during the option period.

Another reason for writing options is to hedge against a moderate decline
in the value of securities owned by a Fund in the case of a call option, or a
moderate increase in the value of securities a Fund intends to purchase in the
case of a put option. If a covered option written by a Fund expires unexercised,
that Fund will realize income equal to the amount of the premium it received for
the option.

If an increase occurs in the underlying security or stock index sufficient
to result in the exercise of a call written by a Fund, that Fund may be required
to deliver securities or cash and may thereby forego some or all of the gain
that otherwise may have been realized on the securities underlying the call
option. This 'opportunity cost' may be partially or wholly offset by the premium
received for the covered call written by that Fund.

OPTIONS ON STOCK INDICES

A Fund will write call options on broadly based stock market indices only
if at the time of writing it holds a portfolio of stocks. When a Fund writes a
call option on a broadly based stock market index, that Fund will segregate or
put into escrow with its Custodian any combination of cash, cash equivalents or
'qualified securities' with a market value at the time the option is written of
not less than 100% of the current index value times the multiplier times the
number of contracts. A 'qualified security' is an equity security which is
listed on a securities exchange or on the NASDAQ against which a Fund has not
written a call option and which has not been hedged by the sale of stock index
futures.

Index prices may be distorted if trading in certain stocks included in the
index is interrupted. Trading in the index options also may be interrupted in
certain circumstances, such as if trading were halted in a substantial number of
stocks included in the index. If this occurred, a Fund would not be able to
close out options which it had purchased or written and, if restrictions on
exercise were imposed, might be unable to exercise an option it held, which
could result in substantial losses to that Fund.

If a Fund is assigned an exercise notice on a call it has written, that
Fund would be required to liquidate portfolio securities in order to satisfy the
exercise, unless it has other liquid assets that are sufficient to satisfy the
exercise of the call. When a Fund has written a call, there is also a risk that
the market may decline between the time that Fund has a call exercised against
it, at a price which is fixed as of the closing level of the index on the date
of exercise, and the time it is able to sell securities in its portfolio. As
with stock options, a Fund will not learn that an index option has been
exercised until the day following the exercise date but, unlike a call on stock
where such Fund would be able to deliver the underlying securities in
settlement, such Fund may have to sell part of its securities portfolio in order
to make settlement in cash, and the price of such securities might decline
before they can be sold. For example, even if an index call which a Fund has
written is 'covered' by an index call held by such Fund with the same strike
price, such Fund will bear the risk that the level of the index may decline
between the close of trading on the date the exercise notice is filed with the
Options Clearing Corporation and the close of trading on the date such Fund
exercises the call it holds or the time it sells the call, which in either case
would occur no earlier than the day following the day the exercise notice was
filed.

FUTURES CONTRACTS

An interest rate futures contract is an agreement to purchase or sell an
agreed amount of debt securities at a set price for delivery on a future date.
Similarly, a currency futures contract calls for the purchase or sale of a fixed
amount of a specific currency at a set price for delivery on a future date.
Unlike interest rate and currency futures contracts, a stock index futures
contract does not contemplate the purchase or delivery of the underlying
financial instrument (interest rate and stock index futures contracts are
collectively herein referred to as 'financial futures contracts'). Instead, one
party agrees to deliver to the other an amount of cash equal to a specific
dollar amount times the difference between the value of a specific stock index
at the close of the last trading day of the contract.

A Fund is required initially to deposit in a special custody account or
with the futures commission merchant margin in an amount of cash or U.S.
Treasury bills equal to a percentage of the contract amount. Initial margin in
futures transactions is in the nature of a good faith deposit on the contract
which is returned to such Fund upon termination of the futures contract,
assuming all contractual obligations have been met. Subsequent payments, called
variation margin, to and from the futures commission merchant are made on a
daily basis as the market price of the futures contract fluctuates. This process
is known as 'marking to market.' At any time prior to expiration of the futures
contract, a Fund may elect to close a position by taking an offsetting position
which will terminate that Fund's position in the futures contract. Although
interest rate futures and currency futures contracts (other than those relating
to Eurodollar time deposits) generally provide for delivery and acceptance of
the underlying financial instrument, the Funds expect most financial or currency
futures contracts to be terminated by offsetting transactions.

An option on a financial or currency futures contract gives the purchaser
the right, but not the obligation, to assume a position in a financial or
currency futures contract (a long position if the option is a call and a short
position if the option is a put) at a specified exercise price at any time
during the option exercise period. The writer of the option is required upon
exercise to assume an offsetting futures position (a short position if the
option is a call and a long position if the option is a put).

HEDGING WITH FUTURES CONTRACTS AND RELATED OPTIONS

A Fund may acquire futures and related options for 'bona fide hedging'
within the meaning and intent of the Commodity Exchange Act and Regulations
promulgated thereunder by the Commodity Futures Trading Commission. A Fund may
also acquire futures and related options for other than bona fide hedging
purposes, provided that the aggregate initial margin and premiums required to
establish such positions are in an amount not exceeding 5% of the liquidation
value of that Fund's portfolio after taking into account unrealized profits and
unrealized losses on any such contracts it has entered into. When options are
in-the-money at the time of purchase, the in-the-money amount will be excluded
from the computation of such 5% limitation.

A Fund may purchase an interest rate futures contract as a hedge against an
anticipated decline in interest rates and a resulting increase in the market
price of debt securities it intends to acquire. A Fund may sell an interest rate
futures contract as a hedge against an anticipated increase in interest rates
and a resulting decline in the market price of debt securities it owns. A Fund
may purchase a currency futures contract to hedge against anticipated increases
in the value of currency it intends to acquire for prospective securities
purchases relative to the value of currency it is holding. A Fund may also sell
a currency futures contract in anticipation of a decrease in the value of
currency it is holding or in anticipation of the sale of a portfolio security. A
Fund may purchase a stock index futures contract as a

hedge against an anticipated general market or market sector advance which may
increase the market price of equity securities it intends to buy. A Fund may
sell stock index futures contracts in anticipation of or in a general market or
market sector decline that may adversely affect the market value of its
portfolio of equity securities.

A Fund may use options on financial and currency futures contracts in
connection with its hedging strategies in lieu of purchasing or selling
financial and currency futures contracts. To hedge against a possible decrease
in the value of equity or debt securities or currency held in its portfolio, a
Fund may purchase put options and write call options on stock index, interest
rate or currency futures contracts, respectively. Similarly, in anticipation of
an increase in the prices of equity or debt securities or currency it intends to
purchase, a Fund may purchase call options or write put options on stock index
or interest rate or currency futures contracts, respectively.

RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS

While the Funds use financial and currency futures and related options as
hedging devices, there are risks that the gains or losses in hedging devices
will not be offset by losses or gains in the hedged securities. One risk arises
because of imperfect correlation in the movement of prices of financial and
currency futures contracts and related options and the securities or currency
subject to the hedge. In the case of stock index futures and related options,
the risk of imperfect correlation increases as the composition of a Fund's
portfolio of equity securities diverges from the securities included in the
applicable stock index. In the case of interest rate or currency futures
contracts and related options, the risk of imperfect correlation presents the
possibility that a correct forecast of interest or exchange rate trends by the
Adviser may still not result in a successful hedging transaction. If the price
of a financial or currency futures contract or related option moves more than
the price of the hedged financial instrument, a Fund may experience either a
loss or a gain on the contract which will not be completely offset by movements
in the price of the hedged instrument.

Successful use of financial futures contracts and related options is
subject to the Adviser's ability to predict correctly movements in the direction
of the market. Similarly, successful use of currency futures and related options
depends, in part, on the Adviser's ability to predict changes in exchange rates.
Commodities exchanges and boards of trade have established limitations on the
maximum number of options that an investor or group of investors acting in
concert may write. It is possible that a Fund and other clients of the Adviser
may be considered such a group. Position limits may restrict a Fund's ability to
purchase or sell options on futures contracts.

OVER-THE-COUNTER DERIVATIVE TRANSACTIONS

A Fund may invest in options, futures and swaps and related products which
are often referred to as 'derivatives.' Derivatives may have a return that is
tied to a formula based upon an interest rate, index or other measurement which
may differ from the return of a simple security of the same maturity. A formula
may have a cap or other limitation on the rate of interest to be paid.
Derivatives may have varying degrees of volatility at different times, or under
different market conditions.

A Fund may enter into interest rate, currency and index swaps and the
purchase or sale of related caps, floors and collars. A Fund may enter into
these transactions to preserve a return or spread on a particular investment or
portion of its portfolio, to protect against currency fluctuations or to protect
against any increase in the price of securities it anticipates purchasing at a
later date. Interest rate swaps

involve the exchange by a Fund with another party of their respective
commitments to pay or receive interest, such as an exchange of floating rate
payments for fixed rate payments with respect to a notional amount of principal.
A currency swap is an agreement to exchange cash flows on a notional amount of
two or more currencies based on the relative value differential between them and
an index swap is an agreement to swap cash flows on a notional amount based on
changes in values of the reference indices. Swaps may be used in conjunction
with other derivative instruments to offset interest rate, currency or other
underlying risks. For example, interest rate swaps may be offset with 'caps,'
'floors' or 'collars.' A 'cap' is essentially a call option which places a limit
on the amount of floating rate interest that must be paid on a certain principal
amount. A 'floor' is essentially a put option which places a limit on the
minimum amount that would be paid on a certain principal amount. A 'collar' is
essentially a combination of a long cap and a short floor where the limits are
set at different levels.

A Fund will usually enter into swaps on a net basis; that is, the two
payment streams will be netted out in a cash settlement on the payment date or
dates specified in the instrument, with that Fund receiving or paying, as the
case may be, only the net amount of the two payments. To the extent obligations
created thereby may be deemed to constitute senior securities under the
Investment Company Act, that Fund will maintain required collateral in a
segregated account consisting of U.S. government securities or cash or cash
equivalents.

SPECIAL RISKS OF OVER-THE-COUNTER DERIVATIVE TRANSACTIONS

Over-the-Counter ('OTC') derivative transactions differ from
exchange-traded derivative transactions in several respects. OTC derivatives are
transacted directly with dealers and not with a clearing corporation. Without
the availability of a clearing corporation, OTC derivative pricing is normally
done by reference to information from market makers, which information is
carefully monitored by the Adviser and verified in appropriate cases.

As OTC derivatives are transacted directly with dealers, there is a risk of
nonperformance by the dealer as a result of the insolvency of such dealer or
otherwise. An OTC derivative may only be terminated voluntarily by entering into
a closing transaction with the dealer with whom the Fund originally dealt. Any
such cancellation may require the Fund to pay a premium to that dealer. In those
cases in which a Fund has entered into a covered derivative transaction and
cannot voluntarily terminate the derivative, that Fund will not be able to sell
the underlying security until the derivative expires or is exercised or
different cover is substituted. The Funds intend to enter into OTC derivative
transactions only with dealers which agree to, and which are expected to be
capable of, entering into derivative closing transactions with such Fund. There
is also no assurance that a Fund will be able to liquidate an OTC derivative at
any time prior to expiration.

BORROWING

A Fund may from time to time increase its ownership of securities above the
amounts otherwise possible by borrowing from banks (other than those affiliated
with the Trust or any of its affiliates) and investing the borrowed funds. A
Fund also may borrow from those banks to facilitate the meeting of redemption
requests or for temporary or emergency purposes and may pledge its assets to
secure those borrowings. Any borrowings by a Fund will be made only to the
extent that the value of its assets, less its liabilities other than borrowings,
is equal to at least 300% of all of its borrowings (including reverse repurchase
agreements) computed at the time a loan is made. If the value of that Fund's
assets at any time should fail to meet the 300% asset coverage described above,
that Fund, within three days, is

required to reduce its aggregate borrowings (including reverse repurchase
agreements) to the extent necessary to meet such asset coverage and may have to
sell a portion of its investments at a time when independent investment judgment
would not indicate such action.

ILLIQUID SECURITIES

Each Fund may invest up to 15% of its net assets in securities which are
considered to be illiquid, such as those subject to legal or contractual
restrictions on resale ('Restricted Securities') including securities that
cannot be sold unless registered under the Securities Act of 1933, as amended
(the 'Securities Act'), and securities which are not readily marketable, such as
repurchase agreements maturing in more than seven days. Generally, Restricted
Securities cannot be sold without the expense and time required to register the
securities under the Securities Act. Certain Restricted Securities may be sold
to institutional investors without registration pursuant to rules under the
Securities Act. The institutional trading market is relatively new and provides
liquidity for some Restricted Securities. Restricted Securities for which no
adequate trading market exists may be deemed illiquid securities. The Funds
currently do not invest in real estate which is considered to be an illiquid
investment.

WARRANTS

Each Fund may invest in warrants (in addition to those that have been
acquired in units or attached to other securities) but does not currently intend
to invest more than 5% of the value of its net assets (at the time of
investment) in such warrants. A warrant is an option to purchase a specified
quantity of equity or debt securities at a set price within a specific period of
time.

REPURCHASE AGREEMENTS

A Fund may purchase securities and concurrently enter into 'repurchase
agreements.' A repurchase agreement typically involves a purchase of an
investment contract from a selling financial institution such as a bank or
broker-dealer, which contract is fully secured by government obligations or
other debt securities. The agreement provides that the purchaser will sell the
underlying securities back to the institution at a specified price and at a
fixed time in the future, usually not more than seven days from the date of
purchase. The difference between the purchase price and the resale price
represents the interest earned by the purchase, which is unrelated to the coupon
rate or maturity of the purchased security. In the event of the bankruptcy or
insolvency of the financial institution, the purchaser may be delayed in selling
the collateral underlying the repurchase agreement. Further, the law is
unsettled regarding the rights of the purchaser if the financial institution
which is a party to the repurchase agreement petitions for bankruptcy or
otherwise becomes subject to the U.S. Bankruptcy Code. Each Fund intends to
invest no more than 5% of its net assets in repurchase agreements. Repurchase
agreements of greater than seven days maturity may be deemed to be illiquid.

REVERSE REPURCHASE AGREEMENTS

A reverse repurchase agreement involves the sale of a debt security owned
by a Fund coupled with an agreement by that Fund to repurchase the instrument at
a stated price, date and interest payment. A Fund will use the proceeds of a
reverse repurchase agreement to purchase other debt securities or to enter into
repurchase agreements maturing not later than the expiration of the prior
reverse repurchase

agreement. When a Fund enters into a reverse repurchase agreement, it will have
securities designated to repurchase its securities.

A Fund will enter into a reverse repurchase agreement only when the
interest income to be earned from the investment of the proceeds of the
transaction is greater than the interest expense of the transaction. Under the
Investment Company Act, reverse repurchase agreements will be considered to be
borrowings by a Fund and, therefore, may be subject to the same risks involved
in any borrowing. A Fund may not enter into a reverse repurchase agreement if,
as a result, its current obligations under such agreements would exceed
one-third the value of its net assets computed at the time the reverse
repurchase agreement is entered into. Each Fund does not intend to invest more
than 5% of the value of its net assets in reverse repurchase agreements.

LENDING OF SECURITIES

A Fund may lend its portfolio securities to brokers, dealers and financial
institutions, provided outstanding loans do not exceed in the aggregate
one-third the value of its net assets and provided that such loans are callable
at any time by that Fund and are at all times secured by cash or equivalent
collateral that is equal to at least the market value, determined daily, of the
loaned securities. A Fund, however, may not enter into portfolio lending
arrangements with the Adviser or any of its affiliates absent appropriate
regulatory relief from applicable prohibitions contained in the Investment
Company Act. Each Fund intends to invest no more than 5% of the value of its net
assets to portfolio loans. The advantage of portfolio lending is that a Fund
continues to receive payments in lieu of the interest and dividends of the
loaned securities, while at the same time earning interest either directly from
the borrower or on the collateral, which may be invested in short-term
obligations.

As voting or consent rights which accompany loaned securities pass to the
borrower, a Fund will follow the policy of calling the loan, in whole or in part
as may be appropriate, to permit the exercise of such rights if the matters
involved would have a material effect on its investment in the securities which
are subject to the loan. A Fund will pay reasonable finders', administrative and
custodial fees in connection with a loan of its securities or may share the
interest earned on collateral with the borrower.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES

From time to time, in the ordinary course of business, a Fund may purchase
securities on a when-issued or delayed delivery basis -- i.e., delivery and
payment can take place a month or more after the date of the transaction. The
purchase price, or the interest rate payable on debt securities, is fixed on the
transaction date. The securities so purchased are subject to market fluctuation,
and no interest or dividend accrues to such Fund until delivery and payment take
place. At the time a Fund makes the commitment to purchase securities on a
when-issued or delayed delivery basis, it will record the transaction, designate
liquid securities for completing the transactions and thereafter reflect the
value of such securities in determining its net asset value each day. Each Fund
currently intends to invest no more than 5% of the value of its net assets in
such transactions.

ARBITRAGE TRANSACTIONS

A Fund also may engage in arbitrage transactions involving near
contemporaneous purchase of securities on one market and sale of those
securities on another market to take advantage of pricing differences between
markets. A Fund will incur a gain to the extent that proceeds exceed costs and a
loss to the extent that costs exceed proceeds. The risk of an arbitrage
transaction, therefore, is that such Fund may not be able to sell securities
subject to an arbitrage at prices exceeding the costs of purchasing those
securities. A Fund will attempt to limit that risk by effecting arbitrage
transactions

only when the prices of the securities are confirmed in advance of the trade.
Each Fund currently intends to invest no more than 5% of the value of its net
assets in such transactions.

INVESTMENT RESTRICTIONS

The following investment restrictions are fundamental policies. Fundamental
policies are those which cannot be changed without the approval of the holders
of a majority of a Fund's outstanding voting securities. A 'majority of a Fund's
outstanding voting securities,' when used in this Statement of Additional
Information, means the lesser of (i) 67% of the shares represented at a meeting
at which more than 50% of the outstanding shares are present in person or
represented by a proxy or (ii) more than 50% of the outstanding shares.

Neither First Eagle Fund of America nor First Eagle International Fund may:

1. Change its sub-classification under the Investment Company Act of
1940 from non-diversified to diversified.

2. Issue senior securities, borrow money or pledge its assets, except
that the Fund may borrow money from a bank (and may pledge its assets to
secure such borrowings) directly or through reverse repurchase agreements
for securities purchases, or temporarily to facilitate meeting redemption
requests or for emergency purposes, and by engaging in reverse repurchase
agreements with broker-dealers. The Fund may not, however, borrow money in
an aggregate amount exceeding 33 1/3% of the Fund's net assets. The
purchase or sale of securities on a when-issued or delayed delivery basis
and collateral arrangements with respect to futures contracts are not
deemed to be a pledge of assets; and neither such arrangements nor
investment in over-the-counter derivative transactions or the purchase or
sale of options on futures contracts on an exchange are deemed to be the
issuance of a senior security.

3. Act as underwriter except to the extent that, in connection with
the disposition of portfolio securities, it may be deemed to be an
underwriter under certain federal securities laws.

4. Make loans, except through (i) repurchase agreements (repurchase
agreements with a maturity of longer than 7 days together with illiquid
assets being limited to 15% of the Fund's net assets) and (ii) loans of
portfolio securities.

5. Buy or sell real estate or interests in real estate, except that
the Fund may purchase and sell securities which are secured by real estate,
securities of companies which invest or deal in real estate and publicly
traded securities or real estate investment trusts.

6. Invest more than 25% of its assets in the securities of issuers
engaged in specific industries or industry groups.

7. Buy or sell commodities or commodity contracts except that the Fund
may purchase and sell commodity futures contracts to establish bona fide
hedge transactions.

The following investment restrictions are non-fundamental policies, which
may be changed at the discretion of the Board of Trustees after giving the
shareholders at least 30 days prior notice of the change.

Neither First Eagle Fund of America nor First Eagle International Fund may:

8. With respect to 50% of the value of its total assets, invest more
than 25% of the value of its total assets in the securities of one issuer,
and with respect to the other 50% of the value of its total assets, invest
more than 5% of the value of its total assets in the securities of one
issuer or acquire more than 10% of the outstanding voting securities of a
single issuer. This restriction shall not apply to U.S. Government
securities.

9. Purchase securities of any other investment companies, except (i)
by purchase in the open market involving only customary brokers'
commissions, (ii) in connection with a merger, consolidation,
reorganization or acquisition of assets or (iii) as otherwise permitted by
applicable law.

10. Pledge, mortgage or hypothecate its assets in an amount exceeding
33 1/3% of its total assets.

11. Invest in securities of any issuer if, to the knowledge of the
Fund, any officer, director or trustee of the Fund or the Fund's investment
adviser owns more than 1/2 of 1% of the outstanding securities of such
issuer, and such officers, directors or trustees who own more than 1/2 of
1% of such issuer's securities own in the aggregate more than 5% of the
outstanding securities of such issuer.

12. Purchase securities of any issuer if, as to 75% of the assets of
the Fund at the time of purchase, more than 10% of the voting securities of
such issuer would be held by the Fund.

In connection with offering the shares of First Eagle Fund of America and
First Eagle International Fund (the 'Funds') in Japan, each of the Funds have
agreed to comply with the following additional investment restrictions:

13. The assets of the Fund will not be used for short sales of
securities.

14. Borrowing is prohibited if such will result in an aggregate amount
of borrowing outstanding in excess of 10% of the total assets of the Fund,
but in the case of a merger, amalgamation or the like, this 10% may be
temporarily exceeded.

15. More than 10% of the assets of the Fund must not be invested in
the shares of stock of any one issuer.

16. More than 10% of the total issued and outstanding shares of stock
of any one company will not be acquired. If several funds are managed by
the same management company, the funds as a group will not acquire more
than 15% of the issued and outstanding shares of stock of any one company.

17. More than 10% of the assets of the Fund will not be invested in
other investment fund securities, but this rule does not prevent the Fund
from holding other investment fund securities temporarily as a result of a
merger, amalgamation or the like.

18. More than 10% of the assets of the Fund will not be invested in
shares of stock privately placed, mortgage securities or unlisted shares of
stock, which cannot be readily realized.

19. The assets dominated in yen will be less than 50% of the assets of
the Fund.

20. More than 50% of the assets of the Fund will be those instruments
which are defined as 'securities' under the Securities and Exchange Law of
Japan.

21. Portfolio securities of the Fund may not be purchased from or sold
or loaned to any Trustee of the Fund, the investment adviser of the Fund,
or any affiliate thereof or any of their directors, officers, employees or
major shareholders (meaning a shareholder who holds shares on his own
account, whether in his own or in another's name (as well as a nominee's
name)) unless the transaction is made within the investment restrictions
set forth in the Fund's prospectus and statement of additional information
and either (i) at a price determined by current publicly available
quotations or (ii) at competitive prices or interest rates prevailing from
time to time on internationally recognized securities markets or
internationally recognized money markets.

TRUSTEES, OFFICERS AND PRINCIPAL STOCKHOLDERS

Pertinent information concerning the trustees and officers of the Trust is
set forth below. Some of the Trust's trustees and officers are employees of the
Adviser and its affiliates. At least a majority of the Trust's Board of Trustees
are not 'interested persons' of the Trust as that term is defined in the
Investment Company Act.

<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS(1) THE TRUST DURING PAST 5 YEARS
------------------- ------------- --------------------
<S> <C> <C>
*John P. Arnhold..................... Trustee and Co-President and Director, Arnhold and S.
Co-President Bleichroeder, Inc.; President and Director,
Arnhold and S. Bleichroeder Advisers, Inc.;
Director, Aquila International Fund Ltd., The
Global Beverage Fund Ltd.; President, WorldVest,
Inc.

Candace K. Beinecke ................. Trustee Partner, Hughes Hubbard & Reed; Director, Jacob's
One Battery Park Plaza Pillow Dance Festival, Inc., Historic Preservation
New York, NY 10004 Projects, Inc. and Merce Cunningham Dance
Foundation, Inc.

Edwin J. Ehrlich .................... Trustee President, Ehrlich Capital Management; Director,
2976 Lonni Lane Pension Funds -- ITT Corp.; Advisory Board Member,
Merrick, NY 11566 Emerging World Investors Limited

K. Georg Gabriel .................... Trustee Senior Advisor, Strategic Investment Partners,
2401 Tracy Place, N.W. Inc.; Member, Investment Committee, Eugene and
Washington, D.C. 20008 Agnes Meyer Foundation

Robert J. Gellert ................... Trustee Manager and Director, United Continental
122 East 42nd Street, Corporation; General Partner, Windcrest Partners;
34th Floor Trustee and Treasurer, Music Conservatory of
New York, NY 10168 Westchester

*Michael M. Kellen................... Trustee and Vice Director and Senior Vice President, Arnhold and S.
Chairman of the Board Bleichroeder, Inc.

William M. Kelly .................... Trustee Senior Associate and Manager, Lingold Associates;
40 Wall Street Independent General Partner, ML Venture Partners
Suite 4201 II, L.P.; Trustee New York Foundation; Treasurer
New York, NY 10005 and Trustee, Black Rock Forest Consortium
</TABLE>

(table continued on next page)

(table continued from previous page)

<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS(1) THE TRUST DURING PAST 5 YEARS
------------------- ------------- --------------------
<S> <C> <C>
*Stanford S. Warshawsky.............. Trustee and Chairman Director, Arnhold and S. Bleichroeder Advisers,
of the Board Inc.; Secretary and Director, Arnhold and S.
Bleichroeder, Inc.; Chairman of the Board and
Director, Arnhold and S. Bleichroeder UK Ltd.; and
Director, German-American Chamber of Commerce

Harold J. Levy....................... Co-President Portfolio Manager, Arnhold and S. Bleichroeder
Advisers, Inc.; Principal, Iridian Asset
Management L.L.C.; Senior Vice President until
1996, Arnhold and S. Bleichroeder, Inc.; Director
since 1993, American Buildings Company

David L. Cohen....................... Senior Vice President Portfolio Manager, Arnhold and S. Bleichroeder
Advisers, Inc.; Principal, Iridian Asset
Management L.L.C.; Senior Vice President until
1996, Arnhold and S. Bleichroeder, Inc.

Arthur F. Lerner..................... Senior Vice President Portfolio Manager, Arnhold and S. Bleichroeder
Advisers, Inc.; Senior Vice President, Arnhold and
S. Bleichroeder, Inc.

Robert Miller........................ Treasurer Vice President, Secretary and Treasurer, Arnhold
and S. Bleichroeder Advisers, Inc.; Senior Vice
President, Arnhold and S. Bleichroeder, Inc.; and
Director, Arnhold and S. Bleichroeder UK Ltd.

Robert Bruno......................... Vice President and Vice President, Arnhold and S. Bleichroeder, Inc.;
Secretary prior to 1997, President and Chief Operating
Officer, Coelho Associates LLC; and Senior Vice
President, Schroder Wertheim Investment Services,
Inc.

Martha B. Pierce..................... Vice President Vice President, Arnhold and S. Bleichroeder, Inc.

Tracy LaPointe Saltwick.............. Vice President Senior Vice President, Arnhold and S.
Bleichroeder, Inc.

Cari Levine.......................... Assistant Treasurer Assistant Vice President, Arnhold and S.
Bleichroeder, Inc.
</TABLE>

(table continued on next page)

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<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS(1) THE TRUST DURING PAST 5 YEARS
------------------- ------------- --------------------
<S> <C> <C>
Suzan J. Afifi....................... Assistant Secretary Assistant Vice President, Arnhold and S.
Bleichroeder, Inc. since 1997; prior thereto,
Managing Director, Effectinvest Bank, Vienna,
Austria
</TABLE>
- ------------
* 'Interested' trustee, as defined in the Investment Company Act, by reason of
his affiliation with Arnhold and S. Bleichroeder, Inc. and Arnhold and S.
Bleichroeder Advisers, Inc.

(1) Unless otherwise stated, the address is: Arnhold and S. Bleichroeder, Inc.,
1345 Avenue of the Americas, New York, NY 10105.

The officers conduct and supervise the daily business operations of the
Trust, while the Trustees review such actions and decide on general policy.

Each Fund paid each of its Trustees who are not interested persons an
annual retainer of $6,500 plus $750 per meeting of the Board and certain
out-of-pocket expenses. The following table sets out the compensation received
by each of the Trustees from First Eagle Fund of America and First Eagle
International Fund for its most recently completed fiscal year ended October 31,
1998.

<TABLE>
<CAPTION>
COMPENSATION
--------------------------------------------
FIRST EAGLE FIRST EAGLE
FUND OF INTERNATIONAL
NOMINEE AMERICA FUND TOTAL
- ----------------------------------------------------------- ----------- -------------- -------
<S> <C> <C> <C>
John P. Arnhold*........................................... 0 0 0
Candace K. Beinecke........................................ 5,000 2,750 7,750
Edwin J. Ehrlich........................................... 2,750 6,750 9,500
K. Georg Gabriel........................................... 5,000 6,750 11,750
Robert J. Gellert.......................................... 2,750 6,750 9,500
Michael M. Kellen*......................................... 0 0 0
William M. Kelly........................................... 2,750 6,750 9,500
Stanford S. Warshawsky*.................................... 0 0 0
</TABLE>

Effective December 1, 1998, the Board of Trustees of the Trust approved an
annual retainer for each Trustee of $7,500 plus meeting fees of $750 per Board
meeting and $500 per Committee meeting. The Trust does not pay any compensation
to interested Trustees (indicated above by *) nor does it provide any retirement
or pension benefits for the Trustees.

As of December 31, 1998, the Trustees and officers of First Eagle Fund of
America, as a group, owned beneficially approximately shares or % of the
outstanding common stock of First Eagle Fund of America. The directors and
officers of First Eagle International Fund, as a group, owned approximately
shares or % of the outstanding common stock of First Eagle International
Fund.

As of December 31, 1998, Arnhold and S. Bleichroeder, Inc. Profit Sharing
Plan, 1345 Avenue of the Americas, New York, NY 10105, owned beneficially and of
record approximately [12%] of First Eagle International Fund's outstanding
shares.

Trustees and employees of the Trust, Arnhold and S. Bleichroeder, Inc. and
the Adviser are permitted to engage in personal securities transactions subject
to the restrictions and procedures

contained in the Trust's Code of Ethics, which was approved by the Board of
Trustees of the Trust and by the Board of Directors of the Adviser.

As of December 31, 1998, the following shareholders owned 5% or more of the
Funds securities:

ADVISER

The Adviser, Arnhold and S. Bleichroeder Advisers, Inc., provides
investment advisory services as the investment adviser of First Eagle Fund of
America and First Eagle International Fund. For its services, the Adviser
receives, pursuant to an Investment Advisory Agreement between the Trust and the
Adviser (the 'Advisory Agreement'), an annual advisory fee of 1.0% of the
average daily net assets of each Fund. These fees, described in the Prospectus
under 'Adviser -- Advisory Fees,' are accrued daily and paid monthly. Prior to
February 28, 1998, Fund of America paid the Adviser a fee at the annual rate of
1.25% of average daily net assets. For the fiscal years ended October 31, 1996,
1997 and 1998, First Eagle Fund of America paid the Adviser an advisory fee of
$1,838,840, $2,672,362, and $3,520,419, respectively. Prior to February 28,
1998, First Eagle International Fund paid the Adviser a fee at the annual rate
of 1.50% of average daily net assets. For the year ended December 31, 1996 and
for the fiscal period ended October 31, 1997 and for the fiscal year ended
October 31, 1998, First Eagle International Fund paid the Adviser an advisory
fee of $446,932, $452,626 and $494,580, respectively.

On February 19, 1998, the shareholders, and on February 20, 1998, the Board
of Trustees of the Trust approved an Advisory Agreement between the Trust and
the Adviser effective February 27, 1998.

The Advisory Agreement will continue in effect for a period of more than
two years from the date of execution only so long as such continuance is
specifically approved at least annually in conformity with the Investment
Company Act. The Advisory Agreement provides that the Adviser will not be liable
for any error of judgment or for any loss suffered by the Funds in connection
with the matters to which the Advisory Agreement relates, except a loss
resulting from willful misfeasance, bad faith, gross negligence or reckless
disregard of duty. The Advisory Agreement provides that it will terminate
automatically if assigned, within the meaning of the Investment Company Act, and
that it may be terminated without penalty by either party upon not more than 60
days nor less than 30 days written notice.

DISTRIBUTOR

Arnhold and S. Bleichroeder, Inc. (the 'Distributor'), a registered
broker-dealer, investment adviser and a member of the New York Stock Exchange
and the National Association of Securities Dealers ('NASD'), serves as the
Distributor of the Funds' Class Y, Class C and Class A shares.

The Distributor receives a service fee payable monthly at the annual rate
of 0.25% of the average daily net assets of all Classes of shares of the Funds,
to cover expenses incurred by the Distributor for providing shareholder liaison
services, including assistance with subscriptions, redemptions and other
shareholder questions. The Funds pay the Distributor a Rule 12b-1 fee on Class A
shares at the annual rate of up to 0.25% of the average daily net assets of each
Fund's outstanding Class A shares and a Rule 12b-1 fee on Class C shares at the
annual rate of up to 0.75% of the average daily net assets of each Fund's
outstanding Class C shares. The Distributor also normally retains part of the
initial sales charge as its underwriter's allowance on sales of Class A shares.
Pursuant to the Distribution and Services Agreement, dated February 27, 1998,
the Funds agree to indemnify the Distributor against certain liabilities under
the Securities Act of 1933, as amended.

PORTFOLIO TRANSACTIONS AND BROKERAGE

The Adviser is responsible for decisions to buy and sell securities,
futures and options on securities, on indices and on futures for the Fund, the
selection of brokers, dealers and futures commission merchants to effect those
transactions and the negotiation of brokerage commissions, if any. Broker-
dealers and futures commission merchants may receive brokerage commissions on
Fund portfolio transactions, including options and the purchase and sale of
underlying securities or futures positions upon the exercise of options. Orders
may be directed to any broker or futures commission merchant including, to the
extent and in the manner permitted by applicable law.

The Adviser has employment agreements with Harold J. Levy and David L.
Cohen to serve as portfolio managers for First Eagle Fund of America. Messrs.
Levy and Cohen are also the principal owners of Iridian Asset Management LLC
('Iridian'). The Distributor owns 27.5% of Iridian and pursuant to an operating
agreement with Iridian does not direct or control the management, affairs or
policies of Iridian. Portfolio trades for First Eagle Fund of America are placed
at Iridian and may be executed with similar trades for other clients.

Equity securities traded in the over-the-counter market and bonds,
including convertible bonds, are generally traded on a 'net' basis with dealers
acting as principal for their own accounts without a stated commission, although
the price of the security usually includes a profit to the dealer. In
underwritten offerings, securities are purchased at a fixed price which includes
an amount of compensation to the underwriters, generally referred to as the
underwriter's concession or discount. On occasion, certain money market
instruments and U.S. government agency securities may be purchased directly from
the issuer, in which case no commissions or discounts are paid. Each Fund will
not deal with the Distributor in any transaction in which the Distributor acts
as principal. Thus, it will not deal with the Distributor acting as market
maker, and it will not execute a negotiated trade with the Distributor if
execution involves the Distributor acting as principal with respect to any part
of a Fund's order.

Portfolio securities may not be purchased from any underwriting or selling
group of which the Distributor, during the existence of the group, is a member,
except in accordance with rules of the Securities and Exchange Commission. This
limitation, in the opinion of the Trust, will not significantly affect a Fund's
ability to pursue its present investment objective.

In placing orders for portfolio securities or futures, the Adviser is
required to give primary consideration to obtaining the most favorable price and
efficient execution. Within the framework of this policy, the Adviser will
consider the research and investment services provided by brokers, dealers or
futures commission merchants who effect or are parties to portfolio transactions
of a Fund, the Adviser or the Adviser's other clients. Such research and
investment services are those which brokerage houses customarily provide to
institutional investors and include statistical and economic data and research
reports on particular companies and industries. Such services are used by the
Adviser in connection with all of its investment activities, and some of such
services obtained in connection with the execution of transactions for a Fund
may be used in managing other investment accounts. Conversely, brokers, dealers
or futures commission merchants furnishing such services may be selected for the
execution of transactions of such other accounts, whose aggregate assets are far
larger than either Fund, and the services furnished by such brokers, dealers or
futures commission merchants may be used by the Adviser in providing investment
management for a Fund. Commission rates are established pursuant to negotiations
with the broker, dealer or futures commission merchant based on the quality and
quantity of execution services provided by the executing party in the light of
generally prevailing rates. In addition, the Adviser is authorized to pay higher
commissions on brokerage

transactions for the Fund to brokers other than the Distributor in order to
secure the research and investment services described above, subject to review
by the Board of Trustees from time to time as to the extent and continuation of
this practice. The allocation of orders among brokers and the commission rates
paid are reviewed periodically by the Board of Trustees.

Subject to the above considerations, the Distributor may act as a
securities broker for a Fund. In order for the Distributor to effect any
portfolio transactions for a Fund, the commissions, fees or other remuneration
received by the Distributor must be reasonable and fair compared to the
commissions, fees or other remuneration paid to other brokers in connection with
comparable transactions involving similar securities being purchased or sold on
an Exchange during a comparable period of time. This standard would allow the
Distributor to receive no more than the remuneration which would be expected to
be received by an unaffiliated broker in a commensurate arms-length transaction.
Furthermore, the Board of Trustees, including a majority of the Trustees who are
not 'interested' directors, has adopted procedures which are reasonably designed
to provide that any commissions, fees or other remuneration paid to the
Distributor is consistent with the foregoing standard. Brokerage transactions
with the Distributor also are subject to such fiduciary standards as may be
imposed by applicable law. From time to time a Fund may engage in agency cross
transactions with respect to securities that meet its investment objective and
policies. An agency cross transaction occurs when a broker sells securities from
one client's account to another client's account. Cross transactions are
executed with written permission from a Fund. This authorization permits cross
transactions only between a Fund on one side and clients for which the
Distributor acts as broker, but does not act as investment adviser, on the other
side. The authorization can be terminated at any time by written notice to the
Distributor. The Fund will not engage in cross transactions with investment
advisory clients of the Adviser or the Distributor.

A Fund may from time to time sell or purchase securities to or from
companies or persons who are considered to be affiliated with that Fund solely
because they are investment advisory clients of the Distributor, the Adviser or
Iridian. No consideration other than cash payment against prompt delivery at the
then current market price of the securities will be paid to any person involved
in those transactions. Additionally, all such transactions will be consistent
with procedures adopted by the Board of Trustees.

In accordance with Section 11(a) under the Securities Exchange Act of 1934,
the Distributor may not retain compensation for effecting transactions on a
national securities exchange for a Fund unless that Fund has expressly
authorized the retention of such compensation in a written agreement executed by
a Fund and the Distributor. Each Fund has provided the Distributor with such
authorization. Section 11(a) provides that the Distributor must furnish to each
Fund at least annually a statement disclosing the aggregate compensation
received by the exchange member in effecting such transactions.

For the years ended October 31, 1998, 1997 and 1996, First Eagle Fund of
America paid total brokerage commissions of $745,444, $453,073 and $438,434,
respectively, of which $128,836, $26,580 and $77,996, respectively, were paid to
the Distributor. For the year ended October 31, 1998, brokerage commissions paid
to the Distributor constituted 17% of the total brokerage commissions paid by
First Eagle Fund of America, and represented 17% of the aggregate dollar amount
of its portfolio transactions involving the payment of commissions. Of the total
brokerage commissions paid during the fiscal year ended October 31, 1998,
$601,817 (or 81%) were paid to firms which provided research, statistical or
other services. The Distributor has not separately identified a portion of such
brokerage commissions as applicable to the provision of such research,
statistical or other services.

For the year ended October 31, 1998 and the fiscal period ended October 31,
1997 and for the fiscal year ended December 31, 1996, First Eagle International
Fund paid total brokerage commissions of $142,365, $53,846 and $88,098,
respectively, of which $16,221, $7,709 and $31,964, respectively, were paid to
the Distributor. For the fiscal year ended October 31, 1998, brokerage
commissions paid to the Distributor constituted 11% of the total brokerage
commissions paid by First Eagle International Fund, and represented 14% of the
aggregate dollar amount of its portfolio transactions involving the payment of
commissions. Of the total brokerage commissions paid during the fiscal year
ended October 31, 1998, $126,144 (or 89%) were paid to firms which provided
research, statistical or other services. The Distributor has not separately
identified a portion of such brokerage commissions as applicable to the
provision of such research, statistical or other services.

The portfolio turnover rate is, generally, the percentage computed by
dividing the lesser of portfolio purchases and sales (excluding all securities,
including options, whose maturities or expiration date at acquisition were one
year or less) by the monthly average value of the portfolio. The portfolio
turnover rates for First Eagle Fund of America were 83%, 98% and 81%
respectively, in the fiscal years ended October 31, 1998, 1997 and 1996. The
portfolio turnover rates for First Eagle International Fund were 85%, 54% and
101%, respectively, in the fiscal year ended October 31, 1998, and for the
fiscal period ended October 31, 1997 and the fiscal year ended December 31,
1996. Higher portfolio turnover rates are likely to result in higher brokerage
commissions and higher levels of realized capital gains than lower portfolio
turnover rates.

NET ASSET VALUE

The net asset value per share is the net worth of each Fund (assets,
including securities at market value, minus liabilities) divided by the number
of shares outstanding. Each Fund shall compute the net asset value of its shares
as of 15 minutes after the close of trading on the floor of the New York Stock
Exchange, which is normally 4:00 p.m., New York time, on each day the New York
Stock Exchange is open for business. The net asset value will not be computed on
days on which no orders to purchase, sell or redeem a Fund's shares have been
received or on days on which changes in the value of the Fund's portfolio
securities do not affect net asset value. The net asset value per share will not
be determined on such federal and non-federal holidays as are observed by the
New York Stock Exchange.

Any security for which the primary market is on a U.S. exchange is valued
at the last sale price on such exchange on the day of valuation or, if there was
no sale on such day, the mean between the last bid and asked prices quoted on
such day. Foreign securities are valued on the basis of quotations from the
primary market in which they are traded and translated from the local currency
into U.S. dollars using current exchange rates. NASDAQ National Market System
equity securities are valued at the last sale price or, if there was no sale on
such day, at the mean between the most recently quoted bid and asked prices.
Corporate bonds (other than convertible debt securities) and U.S. Government
securities that are actively traded in the over-the-counter market, including
listed securities for which the primary market is believed to be
over-the-counter, are valued on the basis of valuations provided by a pricing
service which uses information with respect to transactions in bonds, quotations
from bond dealers, market transactions in comparable securities and various
relationships between securities in determining value. Pricing based on market
transactions in comparable securities and various relationships between
securities is known as 'matrix' pricing. Other securities are valued at the mean
between the most recently quoted bid and asked prices. Short-term debt
instruments which mature in less than 60 days are valued at amortized cost,
unless the Board of Trustees determines that such valuation does not represent
fair value. Securities which are otherwise not readily marketable or securities
for which

market quotations are not readily available are valued in good faith at fair
value in accordance with procedures adopted by the Trust's Board of Trustees.
The Board of Trustees may use a pricing service to value the Funds' holdings of
illiquid securities, if any.

STOCKHOLDER INVESTMENT ACCOUNT

Investments in the Funds may be made on each day the New York Stock
Exchange is open for business (a 'Business Day'). Shares are purchased at the
net asset value per share next determined after receipt of an order by or on
behalf of the Funds with complete information and meeting all the requirements
discussed in the Prospectus and this Statement of Additional Information. The
Funds may reject any purchase order for shares. Purchase orders which are not
received in good order or paid for in a timely manner will not be accepted by
the Funds and will be returned. The Trust reserves the right to suspend the sale
of shares of the Funds to the public at any time in response to unusual or
adverse conditions in the securities markets or otherwise.

Orders for the purchase of shares of a Fund will be confirmed at a price
based on the net asset value of that Fund next determined after receipt by the
Distributor, Arnhold and S. Bleichroeder, Inc., of an order accompanied by
payment. However, orders received by dealers or other firms prior to the
determination of net asset value and received by the Distributor prior to the
close of that day will be confirmed at a price based on the net asset value on
that day ('trade day'). Dealers and other financial services firms are obligated
to transmit orders promptly. Collection may take significantly longer for a
check drawn on a foreign bank than for a check drawn on a domestic bank.
Therefore, if an order is accompanied by a check drawn on a foreign bank, funds
must normally be collected before shares will be purchased. Whenever a
transaction takes place in the account, the stockholder will be mailed a
statement showing the transaction and the status of the account. Additionally,
the Transfer Agent will mail each stockholder of record a quarterly statement of
the stockholder's account. Certain financial institutions maintain omnibus
Accounts with the Transfer Agent, and, in such cases, the investor's records are
maintained by that financial institution.

For the convenience of investors, all dividends and distributions of each
Fund are automatically reinvested in full and fractional shares of that Fund at
the net asset value per share at the close of business on the record date. An
investor may direct the Transfer Agent in writing not less than ten full
business days prior to the record date to have subsequent dividends and/or
distributions sent in cash rather than reinvested. In the case of recently
purchased shares for which registration instructions have not been received on
the record date, cash payment will be automatically reinvested. Any stockholder
who receives a cash payment representing a dividend or distribution may reinvest
such dividend or distribution by returning the check or the proceeds to the
Transfer Agent. Such investment will be made at the net asset value per share
next determined after receipt of the check or proceeds by the Transfer Agent.

REDEMPTIONS

Shares of the Funds can be redeemed for cash at the next determined net
asset value. Class C shares redeemed within the first year after purchase are
subject to a contingent deferred sales charge of 1 1/4%. If shares are held in
non-certificate form, a written request for redemption signed by the
stockholder(s) exactly as the account is registered is required unless the
telephone redemption privilege has been established. If certificates are held by
the stockholder(s), the certificates, signed in the name(s) shown on the face of
the certificates, must be returned to be redeemed. The certificates may be
signed either on their reverse side or on a separate stock power. If redemption
is requested by a corporation,

partnership, trust or fiduciary, written evidence of authority acceptable to the
Funds' Transfer Agent must be submitted before such request will be accepted.

The redemption price is the net asset value per share next determined after
the request for redemption is received in good order by the Funds' Transfer
Agent. Shares purchased by check or the Automatic Investment Plan will not be
allowed until the purchase payment has cleared, which may take ten Business
Days. Signature(s) on redemption requests, certificates or stock powers must be
guaranteed by a commercial bank, trust company, credit union, savings
association or qualified broker or dealer that is a member of the Signature
Guarantee Medallion Program. The Funds may change the signature guarantee
requirements from time to time.

Payment instructions may be given to the Funds either on the account
application, Telephone Purchase and Redemption Form or in a letter to the Funds
which is signature guaranteed for all redemptions of $5,000 or more. If you do
not provide payment instructions for the proceeds of a redemption, a check will
be sent to the address of record.

REDEMPTION PAYMENTS

Payment for shares presented for redemption will ordinarily be made by
check within seven days after receipt by the Transfer Agent of the certificate
and/or written request in proper order. Payment may be postponed or the right of
redemption suspended at times (a) when the New York Stock Exchange (the
'Exchange') is closed for other than customary weekends and holidays, (b) when
trading on the Exchange is restricted, (c) when an emergency exists as a result
of which disposal by either Fund of its securities is not reasonably practicable
or it is not reasonably practicable to determine the Funds' net asset value or
(d) during any other period when the Commission, by order, so permits, provided
that applicable rules and regulations of the Commission shall govern as to
whether the conditions prescribed in (b), (c) or (d) exist.

DISTRIBUTIONS AND TAXES

Each Fund expects to declare an annual dividend of net investment income
and an annual distribution of capital gains, but each Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the 'Internal
Revenue Code'), and in all events in a manner consistent with the provisions of
the Investment Company Act of 1940. Dividends and distributions will be paid in
additional shares based on the net asset value at the close of business on the
record date, or such other date as the Board of Trustees may determine, unless
the stockholder elects in writing not less than five full Business Days prior to
the record date to receive such distributions in cash. The Funds will notify
stockholders annually as to both the dollar amount and the taxable status of
that year's dividends and distributions. Because Class C Shares have 12b-1 fees,
dividends on Class Y Shares will be higher than dividends on Class C Shares.

Each of the Funds will be treated as a separate corporation for purposes of
the Internal Revenue Code (except for purposes of the definitional requirements
for regulated investment companies under Internal Revenue Code Section 851(a).
By paying dividends representing its investment company taxable income within
the time periods specified in the Internal Revenue Code and by meeting certain
other requirements, the Funds intend to qualify as regulated investment
companies under the Internal Revenue Code. Since each Fund will distribute
annually its investment company taxable income, net capital gains, and capital
gain net income, it will not be subject to income or excise taxes otherwise
applicable to undistributed income of a regulated investment company. If a Fund
were to fail to

distribute all its income and gains, it would be subject to income tax and, in
certain circumstances, a 4% excise tax.

Qualification as a regulated investment company requires, among other
things, that (a) at least 90% of the Fund's annual gross income, without offset
for losses from the sale or other disposition of securities, consist of certain
types of qualifying income (the '90% test'); and (b) the Fund diversify its
holdings so that, at the end of each quarter of the taxable year, (i) at least
50% of the market value of the Fund's assets is represented by cash, cash items,
government securities, securities of other regulated investment companies and
other securities limited in respect of any one issuer to an amount not greater
than 5% of the Fund's assets and 10% of the outstanding voting securities of
such issuer, and (ii) not more than 25% of the value of its assets is invested
in the securities of any one issuer (other than government securities and
securities of other regulated investment companies). Qualifying income for
purposes of the 90% test consists of income derived from dividends, interest,
payments with respect to securities loans, gains from the sale or other
disposition of securities, gains on the sale or exchange of foreign currencies
and other income (including gains from options, futures, or forward contracts)
derived from the business of investing in securities or currencies.

Each Fund intends to qualify as a regulated investment company for federal
income tax purposes so long as, in management's view, such qualification is in
the shareholders' interest. Each Fund intends to distribute all of its net
investment income and net capital gains so as to be relieved of corporate
federal taxes. Dividends from net investment income and distributions from net
short-term capital gains are taxable to shareholders as ordinary income. For
noncorporate taxpayers, regardless of how long they have held a Fund's shares,
distributions of gains realized upon the sale of capital assets held more than
12 months are subject to a maximum tax rate of 20% (10% for individuals in the
15% tax bracket). Any loss realized by a shareholder upon the disposition of
Fund shares held for six months or less will be treated as long-term capital
loss to the extent of any amounts treated as distributions of long-term capital
gain held for more than one year during such six-month period.

You should receive by January 31 of each year, a statement showing the tax
status of your distributions for the prior year and the proceeds of your
redemptions (including exchanges), if any. When you sell your shares, their tax
basis is the total of your cash investments plus distributions that have been
reinvested, less any return of capital distributions. To assist you in
determining your tax basis, please keep your year-end account statements with
your other tax records.

Depending on the composition of the Fund's income, all or a portion of the
dividends paid by First Eagle Fund of America from net investment income may
qualify for the dividends received deduction allowable to certain U.S. corporate
shareholders (the 'dividends received deduction'). In general, dividend income
distributed by First Eagle Fund of America to qualifying corporate shareholders
will be eligible for the dividends received deduction only to the extent that
(1) First Eagle Fund of America's income consists of dividends paid by U.S.
corporations; and (2) First Eagle Fund of America would have been entitled to
the dividends received deduction with respect to such dividend income if First
Eagle Fund of America was not a regulated investment company. The dividends
received deduction may be further reduced if First Eagle Fund of America shares
held by qualifying corporate shareholders with respect to such dividends
received are treated as debt financed or are deemed to have been held for less
than 46 days within a period beginning 45 days before and ending 45 days after
the ex-dividend date on common stock. A dividends received deduction for
dividends on preferred stock will be disallowed if the stock is held by First
Eagle Fund of America less than 91 days within a period beginning 90 days before
and ending 90 days after the ex-dividend date on the preferred stock. In
addition, the Code provides other limitations with respect to the ability of a
qualifying corporate

shareholder to claim the dividends received deduction in connection with holding
First Eagle Fund of America shares.

Either Fund, particularly First Eagle International Fund, may qualify for
and may make an election permitted under Section 853 of the Internal Revenue
Code so that shareholders may be eligible to claim a credit or deduction on
their federal income tax returns for, and will be required to treat as part of
the amounts distributed to them, their pro rata portion of qualified taxes paid
or incurred by either Fund to foreign countries (which taxes relate primarily to
investment income). A Fund may make an election under Section 853, provided that
more than 50% of the value of such Fund's total assets at the close of the
taxable year consists of securities in foreign corporations, and such Fund
satisfied the applicable distribution provisions of the Internal Revenue Code
for the taxable year. The foreign tax credit available to shareholders is
subject to certain limitations imposed by the Internal Revenue Code.

Investors who purchase shares shortly before the record date for a
distribution will pay a share price that includes the value of the anticipated
distribution and will be subject to tax on the distribution when it is received
even though with respect to them the distribution represents in effect a return
of a portion of their purchase price. Any loss realized on a sale or exchange of
shares will be disallowed if the shares disposed of are replaced within a period
of 61 days beginning 30 days before the shares are sold or exchanged. If
disallowed, the loss will be reflected in an adjustment to the basis of the
share acquired.

Individuals and certain other non-exempt payees will be subject to a 31%
backup Federal withholding tax on taxable distributions from a Fund, as well as
on the proceeds of redemptions of a Fund, if such Fund is not provided with the
shareholder's correct taxpayer identification number and certification that the
shareholder is not subject to such backup withholding, or if the Internal
Revenue Service notifies a Fund that the shareholder has failed to report proper
interest or dividends. For most individuals, the taxpayer identification number
is the taxpayer's social security number.

A stockholder who is a nonresident alien or foreign entity generally will
not be subject to federal income tax on distributions attributable to long-term
capital gains on any capital gain realized on a redemption of shares, provided
that (i) such gains are not effectively connected with the conduct by the
stockholder of a trade or business in the United States, (ii) in the case of an
individual, the stockholder is not physically present in the United States for
183 days or more during the taxable year and (iii) the stockholder has furnished
an IRS Form W-8 with the required certifications regarding the stockholder's
foreign status under the Internal Revenue Code. Other distributions may be
subject to U.S. tax. In particular, dividend distributions attributable to a
Fund's ordinary income or short-term capital gain which are not effectively
connected with a trade or business in the United States will be subject to a 30%
U.S. withholding tax under the existing provisions of the Internal Revenue Code
applicable to foreign individuals and entities unless a reduced rate of
withholding exemption is provided under an applicable treaty. Non-U.S.
stockholders are urged to consult their own tax advisers concerning the
applicability of U.S. tax.

In addition to the federal income tax consequences described above relating
to an investment in a Fund, there may be other federal, state, local or foreign
tax considerations that depend upon the circumstances of each particular
investor. Prospective shareholders are therefore urged to consult their tax
advisers with respect to the effects of this investment of their specific
situations.

TAX TREATMENT OF CERTAIN TRANSACTIONS

Ordinarily, gains and losses realized from portfolio transactions will be
treated as capital gain or loss. However, all or a portion of the gain or loss
from the disposition of non-U.S. dollar denominated securities (including debt
instruments, certain financial forward, futures and option contracts, and
certain preferred stock) may be treated as ordinary income or loss under Section
988 of the Internal Revenue Code. In addition and absent any election by the
Fund to accrue market discount daily, all or a portion of the gain realized from
the disposition of market discount bonds will be treated as ordinary income
under Section 1276 of the Internal Revenue Code. Finally, all or a portion of
the gain realized from engaging in 'conversion transactions' may be treated as
ordinary income under Section 1258 of the Internal Revenue Code. 'Conversion
transactions' are defined to include certain forward, futures, option and
straddle transactions, transactions marketed or sold to produce capital gains,
or transactions described in Treasury regulations to be issued in the future,
where substantially all of the expected return is attributable to the time value
of the investment. In addition, a 'short against the box' and other constructive
sales of appreciated financial positions will give rise to gain as if there were
an actual sale.

If a Fund enters into combinations of investment positions by virtue of
which its risk of loss from holding an investment position is reduced on account
of one (or more) other positions (i) losses realized on one position may be
deferred to the extent of any unrecognized gain on another position and (ii)
long-term capital gains or short-term capital losses may be recharacterized,
respectively, as short-term gains and long-term losses. The federal income tax
treatment of gains and losses realized from transactions involving options on
stock or securities entered into a Fund will be as follows: Gain or loss from a
closing transaction with respect to options written by such Fund, or gain from
the lapse of any such option, will be treated as short-term capital gain or
loss. Gain or loss from the sale of put and call options that a Fund purchases,
and loss attributable to the lapse of such options, will be treated as capital
gain or loss. Whether, in the case of individual shareholders, distributions of
such gain or loss is subject to the captial gain rate 20% maximum (10% for
individuals in the 15% tax bracket), the ordinary income tax rate (39.6%
maximum) depends upon whether or not the affected option has been held for more
than 12 months. For this purpose, an unexercised option will be deemed to have
been sold on the date it expired. It should be noted, however, that if a put is
acquired at a time when the underlying stock or security is held for less than
one year or the underlying stock or security is acquired while such put is held,
any gain on the subsequent exercise, sale or expiration of the put will
generally be short-term gain.

Any regulated futures contract or listed non-equity option held by a Fund
at the close of its taxable year will be treated as sold for its fair market
value on the last business day of such taxable year. Sixty percent of any gain
or loss with respect to such deemed sales, as well as the gain or loss from the
termination during the taxable year of such Fund's obligation (or rights) with
respect to such contracts by offsetting, by taking or making delivery, by
exercise or being exercised, by assignment or being assigned, by lapse, or
otherwise, will be treated as long-term capital gain or loss and the remaining
forty percent will be treated as short term capital gain or loss. A Fund may
make certain elections that modify the above tax treatment with respect to
regulated futures contracts or listed non-equity options that are part of a
mixed straddle, as defined by the Internal Revenue Code.

A Fund may invest in certain investments that may cause it to realize
income prior to the receipt of cash distributions, including securities bearing
original issue discount. The level of such investments is not expected to affect
the Fund's ability to distribute adequate income to qualify as a regulated
investment company.

Treasury Regulations pursuant to Section 1092 of the International Revenue
Code provides for the coordination of the wash sale rules and the short sale
rules with the straddle rules. Generally, the wash sale rules prevent the
recognition of loss where a position is sold at a loss and a substantially
identical position is acquired within a prescribed period. The short sale rules
generally prevent the use of short sales to convert short-term capital gain to
long-term capital gain and long-term capital loss to short-term capital loss.

Dividends and interest received by the Fund on foreign securities as well
as capital gains realized upon the sale of such securities may give rise to
withholding and other taxes imposed by foreign countries. Tax conventions
between certain countries and the U.S. may reduce or eliminate taxes. Foreign
taxes paid by the Fund will reduce its dividends. If more than 50% of the value
of a Fund's total assets at the end of each quarter of any fiscal year consists
of stock or other securities of foreign corporations, such Fund may elect to
treat certain foreign taxes paid by it, including withholding taxes, as paid by
its shareholders. If a Fund makes this election, the amount of foreign taxes
paid by such Fund will be included in its shareholders' pro rata share of such
Fund's income (in addition to taxable distributions actually received by them),
and the shareholders would be entitled (a) to credit their share of such taxes
against their U.S. federal income taxes (subject to generally applicable
limitations), or (b) if they itemize their deductions, to deduct their share of
such taxes from their gross income.

If a Fund purchases the stock of passive foreign investment companies
('PFICs'), such Fund will be subject to tax under one of three regimes. Under
the default regime, gain on the sale of PFIC stock and certain 'excess
distributions' are treated as ordinary income and subject to an interest charge.
If the PFIC provides certain information and such Fund makes an election, it may
elect to include its pro rata share of the PFIC's capital gains and ordinary
income currently even if not distributed. In taxable years beginning after
December 31, 1997, a Fund may mark to market its PFIC shares if it is eligible
to do so and elects to do so. Any resulting gain will be ordinary income and
losses will be ordinary losses to the extent or prior ordinary income.

The foregoing discussion is intended only as a brief discussion of the
federal income tax consequences of an investment in shares of a Fund and the tax
treatment of certain Fund transactions. Distributions may also be subject to
state, local or foreign taxes. Stockholders are urged to consult their own tax
advisers regarding specific questions as to federal, state, local or foreign
taxes.

PERFORMANCE INFORMATION

Each Fund may advertise its performance in terms of average annual total
return for 1, 5 and 10 year periods, or for such lesser periods as such Fund has
been in existence. Average annual total return is computed by finding the
average annual compounded rates of return over the 1, 5 and 10 year periods that
would equate the initial amount invested to the ending redeemable value,
according to the following formula:

P(1 + T)'pp'n = ERV

<TABLE>
<S> <C> <C>
P = A hypothetical initial payment of $1,000
T = Average annual total return
n = Number of years
ERV = Ending redeemable value of hypothetical $1,000 payment made at the beginning of the 1,
5 or 10 year periods at the end of the 1, 5 or 10 year periods (or fractional portion
thereof)
</TABLE>

The calculation (i) assumes all dividends and distributions by the Fund are
reinvested at net asset value on the reinvestment dates during the period, (ii)
includes all recurring fees that are charged to all shareholder accounts, (iii)
assumes complete redemption at the end of the 1, 5 or 10 year periods to
determine the ending redeemable value, and (iv) does not take into account any
federal or state income taxes that may be payable upon redemption.

Each Fund may also advertise aggregate total return, which represents the
cumulative change in the value of a hypothetical initial investment of $1,000 in
such Fund assuming a constant rate of performance over a stated period of time.
Aggregate total return is computed according to the following formula:

ERV-P
-------
P

<TABLE>
<C> <C> <S>
Where: P = A hypothetical initial payment of $1,000
ERV = Ending redeemable value of hypothetical $1,000 payment made at the beginning of
the 1, 5 or 10 year periods at the end of the 1, 5 or 10 year periods (or
fractional portion thereof)
</TABLE>

CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
AND INDEPENDENT AUDITORS

The Bank of New York serves as Custodian for the Funds' assets. BISYS Fund
Services, Inc. serves as Transfer Agent and dividend disbursing agent. In those
capacities, both The Bank of New York and BISYS Fund Services, Inc. maintain
certain financial and accounting books and records pursuant to agreements with
the Trust.

KPMG Peat Marwick LLP, 757 Third Avenue, New York, NY 10017 serves as the
Trust's independent auditors and in that capacity audits and reports on the
Trust's annual financial statements and financial highlights.

<PAGE>

<PAGE>
FIRST EAGLE FUND OF AMERICA
INVESTMENT PORTFOLIO
October 31, 1998

<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
<C> <S> <C> <C>
- ----------------------------------------------------------------------------
COMMON STOCK (80.33%)
AEROSPACE/DEFENSE (9.01%)
32,800 Alliant Techsystems Inc.* $ 1,069,759 $ 2,296,000
217,200 General Dynamics Corp. 7,628,732 12,855,525
320,000 Gulfstream Aerospace Corp.* 11,194,806 14,160,000
317,500 Loral Space and Communications Ltd.* 4,477,564 6,012,656
------------ ------------
24,370,861 35,324,181
BANKING/FINANCIAL (12.80%)
350,780 BankBoston Corp. 11,549,121 12,913,089
264,300 CIT Group Cl. A 7,679,521 7,218,694
286,500 Finova Group Inc. 7,333,669 13,966,875
109,200 Golden State Bancorp Inc.* 3,026,348 2,095,275
143,900 Greenpoint Financial Corp. 4,738,906 4,721,719
141,700 Household International Inc. 4,830,308 5,180,906
68,700 Mellon Bank Corp. 3,973,128 4,130,588
------------ ------------
43,131,001 50,227,146
BIOTECHNOLOGY (8.04%)
140,100 Amgen Inc.* 6,950,067 11,006,605
237,800 Biogen Inc.* 8,271,111 16,527,100
178,500 Chiron Corp.* 3,562,598 4,016,250
------------ ------------
18,783,776 31,549,955
COMMUNICATIONS (3.43%)
84,000 AirTouch Communications Inc.* 4,220,322 4,704,000
140,200 Comsat Corp. 4,585,879 5,529,138
126,100 General Instrument Corp.* 3,126,888 3,239,194
------------ ------------
11,933,089 13,472,332
CONSUMER PRODUCTS (4.28%)
59,800 CompUSA Inc.* 795,882 829,725
49,600 Fort James Corp.* 1,878,913 1,999,500
204,500 Fortune Brands Inc. 7,160,312 6,761,281
145,800 Tandy Corp. 5,641,525 7,226,213
------------ ------------
15,476,632 16,816,719
DATA SERVICES (12.03%)
137,800 Ceridian Corp.* 4,999,803 7,906,275
361,000 Dun & Bradstreet Corp. 9,783,749 10,243,375
423,200 First Data Corp. 11,445,568 11,214,800
172,600 Galileo International Inc. 6,593,264 6,548,013
338,100 Storage Technology Corp.* 9,085,561 11,305,219
------------ ------------
41,907,945 47,217,682
HEALTH (7.99%)
272,280 Allegiance Corp. 3,371,274 10,125,413
153,700 Perkin-Elmer Corp. 10,133,102 12,958,831
293,200 St. Jude Medical Inc.* 9,276,731 8,282,900
------------ ------------
22,781,107 31,367,144
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-1

<PAGE>

<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
- ----------------------------------------------------------------------------
<C> <S> <C> <C>
INDUSTRIAL PRODUCTS (8.63%)
105,400 Ball Corp. $ 4,467,173 $ 4,446,563
77,100 Cooper Industries Inc. 3,089,751 3,402,038
435,900 Grace (W.R.) & Co. 7,136,577 7,573,763
250,900 Millenium Chemicals Inc. 5,413,336 6,115,688
98,300 Owens-Illinois Inc.* 2,681,914 3,004,294
8,000 Triacq Corp.'D' 10,000 0
85,600 USG Corp. 3,364,523 4,082,050
322,000 U.S. Industries Inc. 7,137,020 5,252,625
------------ ------------
33,300,294 33,877,021
MEDIA/GAMING (10.96%)
10,600 Cablevision Systems Cl. A* 443,461 511,450
275,900 Comcast Corp. Special Cl. A 7,513,328 13,622,563
168,100 International Game Technology 2,852,103 3,792,756
231,950 Liberty Media Group Cl. A* 6,849,284 8,828,597
142,100 MediaOne Group Inc.* 4,425,621 6,012,606
226,600 Tele-Communications Cl. A 5,448,690 9,545,527
38,700 Tele-Communications-TCI Ventures* 647,761 720,782
------------ ------------
28,180,248 43,034,281
MISCELLANEOUS (3.16%)
25,000 Aavid Thermal Technologies Inc.* 54,941 375,000
72,650 Aon Corp. 3,132,640 4,504,300
132,800 US Airways Group Inc.* 8,444,228 7,511,500
------------ ------------
11,631,809 12,390,800
------------ ------------
TOTAL COMMON STOCK 251,496,762 315,277,261
------------ ------------

PREFERRED STOCK (2.09%)
698 Assistive Technology Project Inc.
Ser. A'D' 500,000 500,000
250 Assistive Technology Project Inc.
Ser. C'D' 250,000 250,000
9,648 Assistive Technology Project Inc.
Ser. E'D' 126,013 126,013
241,000 News Corp. Ltd. 5,517,590 5,829,188
59,040 Shape Technology Inc. Ser. A
Conv.'D' 1,000,000 300,000
1,200 Tidewater Holdings Inc. Ser. A
Conv.'D' 1,200,000 1,200,000
------------ ------------
TOTAL PREFERRED STOCK 8,593,603 8,205,201
------------ ------------
WARRANTS (0.00%)
2,291 Assistive Technology 382 382
1,455 Assistive Technology Inc. Pfd. Ser.
E 0 0
------------ ------------
TOTAL WARRANTS 382 382
------------ ------------
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-2

<PAGE>

<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
- ----------------------------------------------------------------------------
<C> <S> <C> <C>
OTHER INVESTMENTS (0.51%)
16.1616 Euro Outlet Malls, L.P.'D' (cost
$1,100,000) $ 1,100,000 $ 2,000,000
------------ ------------
</TABLE>

<TABLE>
<CAPTION>
CONTRACTS
<C> <S> <C> <C>
- ----------------------------------------------------------------------------
CALL OPTIONS (0.49%)
500 Amgen Inc. @ 75 exp. Nov. 1998 251,500 237,500
1,125 Centocor Inc. @ 30 exp. Nov. 1998 1,530,878 1,645,313
------------ ------------
TOTAL CALL OPTIONS 1,782,378 1,882,813
------------ ------------
TOTAL INVESTMENTS $262,973,125 $327,365,657
------------ ------------
------------ ------------
</TABLE>

<TABLE>
<CAPTION>
PRINCIPAL
<C> <S> <C> <C>
- --------------------------------------------------------------------------
SHORT TERM INVESTMENTS (17.38%)
3,200,000 US Treasury Bill due 11/05/98 3,198,261 3,198,005
18,300,000 US Treasury Bill due 11/27/98** 18,236,998 18,243,840
8,000,000 US Treasury Bill due 12/10/98 7,959,462 7,970,586
3,500,000 US Treasury Bill due 12/24/98 3,476,864 3,480,908
1,500,000 US Treasury Bill due 12/31/98 1,489,550 1,490,252
25,400,000 US Treasury Bill due 1/7/99** 25,226,392 25,213,793
5,700,000 US Treasury Bill due 1/14/99 5,656,500 5,653,192
3,000,000 US Treasury Bill due 1/21/99 2,974,215 2,970,665
------------ ------------
TOTAL SHORT TERM INVESTMENTS 68,218,242 68,221,241
------------ ------------
------------ ------------
</TABLE>

<TABLE>
<CAPTION>
CONTRACTS
<C> <S> <C> <C>
- ----------------------------------------------------------------------------
COVERED CALL OPTIONS WRITTEN ( - 1.03%)
1,000 Amgen Inc. @ 80 exp. Nov. 1998 (187,500)
1,900 Biogen Inc. @ 65 exp. Nov. 1998 (1,199,375)
220 Ceridian Corp. @ 60 exp. Nov. 1998 (30,250)
2,172 General Dynamics Corp. @ 47.50 exp.
Nov. 1998 (2,633,550)
------------
TOTAL COVERED CALL OPTIONS WRITTEN
(PREMIUM $1,900,893) (4,050,675)
------------
TOTAL INVESTMENT PORTFOLIO (99.76%) $329,290,474 391,536,223
------------
------------
Other assets in excess of other
liabilities (0.23%) 936,071
------------
NET ASSETS (100.00%) $392,472,294
------------
------------
</TABLE>

* Non-income producing security.
** At October 31, 1998, a portion of this security was segregated to cover
collateral requirements for options.
'D' Restricted security priced at fair value by the Board of Directors.
Represents ownership interest in a security which has not been registered
with the Securities and Exchange Commission under the Securities Act

The accompanying notes are an integral part of these financial statements.
F-3

<PAGE>

<PAGE>
of 1933. Information concerning each restricted security holding on
October 31, 1998 is shown below:

<TABLE>
<CAPTION>
Security Acquisition Date Cost
- --------------------------------------------------------------------------------
<S> <C> <C>
Assistive Technology Project Inc. Ser. A Pfd. Stock 10/3/95 $ 500,000
Assistive Technology Project Inc. Ser. C Pfd. Stock 12/19/96 $ 250,000
Assistive Technology Project Inc. Ser. E Pfd. Stock 10/30/98 $ 126,013
Euro Outlet Malls, L.P. 12/30/94 $1,100,000
Shape Technology Inc. Ser. A Conv. Pfd. Stock 11/29/94 $1,000,000
Tidewater Holdings Inc. Ser. A Conv. Pfd. Stock 7/9/96 $1,200,000
Triacq Corp. Common Stock 7/27/95 $ 10,000
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-4

<PAGE>

<PAGE>
FIRST EAGLE INTERNATIONAL FUND
INVESTMENT PORTFOLIO
October 31, 1998

<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
- ----------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCK (80.70%)
FINLAND (2.64%)
23,400 KCI Konecranes International (building
cranes) $ 428,620 $ 1,017,088
FRANCE (13.17%)
25,000 Alcatel Alsthom ADR*
(telecommunications) 497,328 550,000
9,800 AXA (insurance) 842,944 1,107,504
11,253 Banque Nationale de Paris (banking) 671,818 712,602
10,000 Casino Guichard Perrachon
(supermarkets) 1,021,107 995,141
3,300 Paribas SA (financial services) 302,146 242,527
2,500 Penauille Polyservices (commercial
services) 813,047 584,848
9,600 Rexel SA (electrical equipment) 1,012,942 881,051
----------- -----------
5,161,332 5,073,673
GERMANY (20.20%)
2,500 Allianz AG (insurance) 818,105 858,139
11,000 Daimler Benz AG (automobiles) 954,461 866,743
15,365 Deutsche Bank AG (banking) 1,081,743 964,835
12,000 Deutsche Pfandbrief AG (mortgage bank) 754,679 963,652
7,578 Hannover Rueckversicherungs AG
(insurance) 437,146 876,215
15,000 Kamps AG* (baking) 441,656 681,077
30,400 SKW Trostberg AG (specialty chemicals) 694,400 752,566
24,230 Volkswagen AG (automobiles) 1,232,059 1,821,420
----------- -----------
6,414,249 7,784,647
JAPAN (0.78%)
100,000 Nikko Securities (financial services) 293,247 302,068
ITALY (10.98%)
600,000 Banco Di Napoli SpA (banking) 772,905 686,708
229,000 Unicredito Italiano SpA (insurance) 409,378 1,230,093
42,200 Industrie Natuzzi SpA ADR (leather
furniture) 574,328 767,513
61,000 Instituto Bancario San Paolo (banking) 758,947 897,360
235,000 Ist. Naz. Delle Assicurazioni SpA
(insurance) 640,871 647,658
----------- -----------
3,156,429 4,229,332
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-5

<PAGE>

<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
- ----------------------------------------------------------------------------
<C> <S> <C> <C>
NETHERLANDS (19.31%)
34,496 Aalberts Industries NV (specialty
valves) $ 837,521 $ 825,599
16,200 Benckiser NV (cleaning & washing
agents) 713,204 918,552
30,000 DOC Data NV* (audio & multimedia CDs) 858,679 505,970
29,199 Hunter Douglas NV (window treatments) 967,891 1,047,456
23,425 IHC Caland NV (dredging & offshore
equipment) 942,469 1,059,813
39,425 Koninklijke Ahrend NV (office furniture
& supplies) 875,816 800,025
38,485 Samas-Groep NV (office supplies) 721,401 640,833
8,470 Wolters Kluwer NV (publishing) 492,834 1,641,666
----------- -----------
6,409,815 7,439,914
SWITZERLAND (6.09%)
625 Novartis AG Basel (pharmaceuticals) 1,009,060 1,126,126
2,010 Zuerich Allied AG (insurance) 1,078,679 1,221,556
----------- -----------
2,087,739 2,347,682
UNITED KINGDOM (7.53%)
159,075 J.D. Wetherspoon Plc. (pubs) 314,213 532,825
72,000 Orange Plc.* (telecommunications) 577,925 669,234
100,000 Scottish Power Plc. (power & energy) 973,593 981,409
146,000 WPP Group Plc. (advertising) 631,621 716,430
----------- -----------
2,497,352 2,899,898
----------- -----------
TOTAL COMMON STOCK 26,448,783 31,094,302
----------- -----------
----------- -----------
</TABLE>

<TABLE>
<CAPTION>
MARKET
PRINCIPAL COST VALUE
- --------------------------------------------------------------------------
<C> <S> <C> <C>
SHORT TERM INVESTMENTS (21.61%)
3,500,000 US Treasury Bill due 11/5/98 3,498,098 3,497,819
275,000 US Treasury Bill due 1/7/99 273,091 272,984
500,000 US Treasury Bill due 1/14/99 496,136 495,894
4,100,000 US Treasury Bill due 1/21/99 4,063,127 4,059,910
----------- -----------
8,330,452 8,326,607
----------- -----------
TOTAL INVESTMENT PORTFOLIO $34,779,235 $39,420,909
-----------
-----------
Other liabilities in excess of
other assets (-2.31%) (890,738)
-----------
NET ASSETS (100.00%) $38,530,171
-----------
-----------
* Non-income producing security.
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-6

<PAGE>

<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1998

<TABLE>
<CAPTION>
FIRST EAGLE FIRST EAGLE
FUND OF AMERICA INTERNATIONAL FUND

<S> <C> <C>
ASSETS:
Investments -- Cost $ 262,973,125 $ 26,448,783
Short-term investments -- Cost 68,218,242 8,330,452

Investments, at value 327,365,657 31,094,302
Short-term investments, at value 68,221,241 8,326,607
Cash 469,044 --
Dividends and interest receivable 199,627 109,926
Receivable for Fund shares sold 547,693 12,739
Receivable for investments sold 3,401,425 226,275
Deferred organization expenses -- 12,240
--------------- ------------------
TOTAL ASSETS 400,204,687 39,782,089
--------------- ------------------
LIABILITIES:
Options written, at value** 4,050,675 --
Payable to bank -- 1,077,444
Payable for investments purchased 2,983,194 --
Payable for Fund shares redeemed 122,362 53,972
Management fee payable 303,103 31,312
Accrued operating expenses 273,059 89,190
--------------- ------------------
TOTAL LIABILITIES 7,732,393 1,251,918
--------------- ------------------

NET ASSETS $ 392,472,294 $ 38,530,171
--------------- ------------------
--------------- ------------------

Net Assets were comprised of:
Par value of capital shares (note
6) 182,290 23,953
Capital paid in excess of par value
(note 6) 297,325,283 30,717,301
Net unrealized appreciation of
investments, written options and
foreign currency related
transactions 62,245,749 4,647,432
Accumulated net realized gain on
investments, written options and
foreign currency related
transactions 32,718,972 3,141,485
--------------- ------------------
NET ASSETS $ 392,472,294 $ 38,530,171
--------------- ------------------
--------------- ------------------
SHARES OUTSTANDING
Class Y 18,197,497 2,376,066
Class C 31,502 19,217
NET ASSET VALUE PER SHARE:

Class Y (and redemption price) $21.53 $16.09
Class C* $21.43 $16.01
</TABLE>

* Redemption price is NAV of Class C shares reduced by a 1.25% CDSC if shares
are redeemed within the first year of purchase.

** Premiums received for First Eagle Fund of America was $1,900,893.

The accompanying notes are an integral part of these financial statements.

F-7

<PAGE>

<PAGE>
STATEMENT OF OPERATIONS
October 31, 1998

<TABLE>
<CAPTION>
FIRST EAGLE FIRST EAGLE
FUND OF AMERICA INTERNATIONAL FUND

<S> <C> <C>
INVESTMENT INCOME:
Dividend income $ 2,384,037 $ 656,565
Interest income 1,224,410 232,291
Less: Foreign withholding tax (16,896) (47,840)
--------------- ------------------
TOTAL INVESTMENT INCOME 3,591,551 841,016
--------------- ------------------

EXPENSES:
Management fee (note 2) 3,520,419 494,580
Services fee (note 2) 824,804 108,143
Transfer agent fees 196,519 45,186
Legal fees 109,157 77,483
Custodian fees 55,514 71,485
Registration expenses 76,683 34,687
Audit fees 52,700 55,200
Accounting fees 56,250 72,750
Organizational expenses -- 29,200
Trustee fees 22,500 33,750
Printing expenses 29,673 10,488
Distribution fees (note 2) 2,993 1,396
Miscellaneous expenses 19,873 12,363
--------------- ------------------
TOTAL EXPENSES 4,967,085 1,046,711
Less: Custody earnings credits
(note 3) (38,318) (33,934)
Management fee waiver (note 2) -- (23,504)
--------------- ------------------

NET EXPENSES 4,928,767 989,273
--------------- ------------------

NET INVESTMENT LOSS (1,337,216) (148,257)
--------------- ------------------

NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS, WRITTEN
OPTIONS AND FOREIGN CURRENCY RELATED
TRANSACTIONS:
Net Realized Gain (Loss) from:
Investment transactions 32,670,646 3,819,902
Forward foreign currency
contracts -- (1,275,745)
--------------- ------------------

NET REALIZED GAIN 32,670,646 2,544,157
Change in Net Unrealized Appreciation
of Investments, Written Options and
Foreign Currency Related Transactions:
Beginning of year 48,210,381 4,857,600
End of year 62,245,749 4,647,432
--------------- ------------------

INCREASE/(DECREASE) IN NET UNREALIZED
APPRECIATION 14,035,368 (210,168)
--------------- ------------------

NET GAIN ON INVESTMENTS, WRITTEN
OPTIONS AND FOREIGN CURRENCY RELATED
TRANSACTIONS 46,706,014 2,333,989
--------------- ------------------

INCREASE IN NET ASSETS FROM OPERATIONS $45,368,798 $ 2,185,732
--------------- ------------------
--------------- ------------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-8

<PAGE>

<PAGE>
FIRST EAGLE FUND OF AMERICA
STATEMENT OF CHANGES IN NET ASSETS
For the year ended October 31, 1998

<TABLE>
<CAPTION>
1998 1997

<S> <C> <C>
OPERATIONS:
Net investment loss $ (1,337,216) $ (660,183)
Net realized gain 32,670,646 49,926,578
Increase in net unrealized
appreciation 14,035,368 5,949,601
--------------- ------------------
INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 45,368,798 55,215,996
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- --
Net realized gain (32,159,998) (27,243,648)
--------------- ------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (32,159,998) (27,243,648)
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 154,415,411 59,873,730
Net asset value of shares issued
for reinvestment of capital
gains 27,394,898 24,451,245
Cost of shares redeemed (56,985,140) (21,261,845)
--------------- ------------------
INCREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS 124,825,169 63,063,130
--------------- ------------------
INCREASE IN NET ASSETS 138,033,969 91,035,478
NET ASSETS:
Beginning of year 254,438,325 163,402,847
--------------- ------------------
END OF YEAR $ 392,472,294 $254,438,325
--------------- ------------------
--------------- ------------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-9

<PAGE>

<PAGE>
FIRST EAGLE INTERNATIONAL FUND
STATEMENT OF CHANGES IN NET ASSETS
For the year ended October 31, 1998

<TABLE>
<CAPTION>
1998 1997*

<S> <C> <C>
OPERATIONS:
Net investment loss $ (148,257) $ (260,406)
Net realized gain 2,544,157 3,161,433
Decrease in net unrealized appreciation (210,168) (489,685)
--------------- -------------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 2,185,732 2,411,342
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- --
Net realized gain (2,212,663) --
--------------- -------------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (2,212,663) --
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 26,925,432 4,235,374
Net asset value of shares issued for reinvestment of capital gains 1,785,523 816,027
Cost of shares redeemed (26,474,063) (3,247,813)
--------------- -------------------
INCREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS 2,236,892 1,803,588
--------------- -------------------
INCREASE IN NET ASSETS 2,209,961 4,214,930
NET ASSETS:
Beginning of period 36,320,210 32,105,280
--------------- -------------------
END OF PERIOD $ 38,530,171 $36,320,210
--------------- -------------------
--------------- -------------------
</TABLE>

* For the period from January 1, 1997 to October 31, 1997

The accompanying notes are an integral part of these financial statements.

F-10

<PAGE>

<PAGE>
FIRST EAGLE TRUST
NOTES TO FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION AND ACCOUNTING POLICIES -- First Eagle Fund of America,
Inc. and First Eagle International Fund, Inc., each a Maryland corporation, were
reorganized as separate Series of First Eagle Trust, a Delaware business trust,
(the 'Trust') effective February 28, 1998. The trust is registered under the
Investment Company Act of 1940 as amended (the 'Act') as a non-diversified,
open-end management investment company. The Trust presently consists of two
separate portfolios ('Series'): First Eagle Fund of America (a 'Fund') and First
Eagle International Fund (a 'Fund'). Each Series has distinct investment
objectives and policies. A shareholder's interest is limited to the Series in
which she or he owns shares. Each Series offers Class Y, Class C, and Class A
shares (inception November 19, 1998). All classes of shares have identical
rights to earnings, assets, and voting privileges, except that each class has
its own distribution and/or service plan, and has exclusive voting rights with
respect to matters affecting only that class.

The following is a summary of significant accounting policies:

A. VALUATION OF INVESTMENTS -- Any security for which the primary market is on
an exchange is valued at the last sale price on such exchange on the day of
valuation or, if there was no sale on such day, the mean between the last bid
and asked prices quoted on such day. Equity securities listed on the NASDAQ
National Market System are valued at the last sale price or, if there was no
sale on such day, at the mean between the most recently quoted bid and asked
prices. Corporate bonds (other than convertible debt securities) and US
Government Securities that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, are valued on the basis of valuations provided by a pricing
service which uses information with respect to transactions in bonds, quotations
from bond dealers, market transactions in comparable securities and various
relationships between securities in determining value. Other securities are
valued at the mean between the most recently quoted bid and asked prices. Short-
term debt instruments which mature in less than 60 days are valued at amortized
cost, unless the Board of Trustees determines that such valuation does not
represent fair value. Securities which are otherwise not readily marketable or
securities for which market quotations are not readily available are valued in
good faith at fair value in

F-11

<PAGE>

<PAGE>
accordance with procedures adopted by the Trust's Board of Trustees. A Valuation
Committee of the Board of Trustees has been established to determine the value
of such securities after consultation with the Trust's investment adviser.

B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains or losses
on security transactions are determined based on the specific identification
method. Discounts and premiums on purchases of investments are accreted and
amortized, respectively, as adjustments to interest income and cost of
securities. Dividend income is recorded on the ex-dividend date. Interest income
is recorded on the accrual basis.

OPTIONS: In order to produce incremental earnings or protect against changes in
the value of portfolio securities, a Fund may buy and sell put and call options,
write covered call options on portfolio securities and write cash-secured put
options.

A Fund generally purchases put options or writes covered call options to hedge
against adverse movements in the value of portfolio holdings. A Fund may also
use options for speculative purposes, although it does not employ options for
this purpose at the present time. A Fund will segregate assets to cover its
obligations under option contracts.

Options contracts are valued daily based upon the last sale price on the
principal exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. A Fund will realize a gain or loss upon the expiration
or closing of the option transaction. When an option is exercised, the proceeds
on the sales of a written call option, the purchase cost of a written put
option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.

The risk in writing a call option is that a Fund gives up the opportunity for
profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that a Fund may incur a loss if
the market price of the security decreases and the option is exercised. The risk
of buying an option is that a Fund pays a premium whether or not the option is
exercised. A Fund also has the additional risk of not being able to enter into a
closing transaction if a liquid secondary market does not exist. A Fund may also
write over-the-counter options where the completion of the obligation is
dependent upon the credit standing of the counterparty.

F-12

<PAGE>

<PAGE>
FORWARD CURRENCY CONTRACTS: In connection with purchases and sales of securities
denominated in foreign currencies, a Fund may enter into forward currency
contracts. Additionally, a Fund may enter into such contracts to hedge certain
other foreign currency denominated investments. These contracts are recorded at
market value, and the related realized and unrealized foreign exchange gains and
losses are included in the statement of operations. A Fund will realize a gain
or loss upon the closing or settlement of the forward transaction. Such realized
gains or losses are included in the statement of operations. In the event that
counterparties fail to settle these currency contracts or the related foreign
security trades, a Fund could be exposed to foreign currency fluctuations.

C. FOREIGN CURRENCY TRANSLATION: The market values of securities which are not
traded in United States currency are recorded in the financial statements after
translation to US dollars based on the applicable exchange rates at the end of
the period. The costs of such securities are translated at exchange rates
prevailing when acquired. Related dividends, interest and withholding taxes are
accrued at the rates of exchange prevailing on the respective dates of such
transactions.

The net assets of a Fund are presented at the foreign exchange rates and market
values at the close of the period. A Fund does not isolate that portion of gains
and losses on investments which is due to change in foreign exchange rates from
that which is due to changes in market prices of the equity securities.

D. FEDERAL INCOME TAX STATUS -- It is the Funds' policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to shareholders.
Accordingly, no federal income tax provision is required.

E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment
income, if any, and distribution of net realized gain from investment
transactions, if any, will be made annually. The Funds record dividends and
distributions to its shareholders on the record date.

F. DEFERRED ORGANIZATION EXPENSES -- A total of $146,000 was incurred in
connection with the organization of First Eagle International Fund. The costs
have been deferred and are being amortized by the Fund over the period of
benefit not to exceed 60 months from the date the Fund commenced operations. The
Adviser has agreed that if

F-13

<PAGE>

<PAGE>
any of the initial shares purchased by the Adviser are redeemed during the
amortization period, the redemption proceeds will be reduced by any unamortized
organizational expenses in the same proportion as the number of initial shares
being redeemed bears to the number of shares outstanding at the time of
redemption.

G. ESTIMATES AND ASSUMPTIONS -- Estimates and assumptions are required to be
made regarding assets, liabilities and changes in net assets resulting from
operations when financial statements are prepared. Changes in economic
environment, financial markets and any other parameters used in determining
these estimates could cause results to differ from these amounts.

NOTE 2. INVESTMENT ADVISORY AGREEMENT AND SERVICES AGREEMENT -- Arnhold and S.
Bleichroeder Advisers, Inc. (the 'Adviser'), a wholly owned subsidiary of
Arnhold and S. Bleichroeder, Inc. ('ASB'), manages the Trust. For its services,
the Adviser receives, pursuant to an Investment Advisory Agreement between the
Trust and the Adviser (the 'Advisory Agreement') an annual advisory fee of 1.00%
of the average daily net assets of each Fund. On February 19, 1998, the
shareholders and on February 20, 1998, the Board of Trustees approved the
Advisory Agreement between the Trust and the Adviser, effective February 27,
1998. The Advisory Agreement is substantially the same as the prior investment
advisory agreements between First Eagle Fund of America, Inc and between First
Eagle International Fund, Inc. and the Adviser except the new Advisory Agreement
provides for monthly advisory fee payments and reduces the rate of the advisory
fees. Prior to February 28, 1998, First Eagle Fund of America, Inc. paid the
Adviser a fee at the annual rate 1.25% of average daily net assets and First
Eagle International Fund, Inc. paid the Adviser a fee at the annual rate of
1.50% of average daily net assets.

For the period from November 1, 1997 through December 31, 1997 the Adviser
waived part of its fees in the amount of $23,504 for First Eagle International
Fund, Inc.

ASB (the 'Distributor') serves as the distributor of the Trust's Class Y, Class
C, and Class A shares. The Distributor receives an annual services fee at the
annual rate of 0.25% of each portfolio's daily net assets payable monthly,
pursuant to a Distribution and Services Agreement which was approved by the
Board of Trustees, to cover expenses incurred by ASB for providing shareholder
liaison services,

F-14

<PAGE>

<PAGE>
including assistance with subscriptions, redemptions and other shareholder
questions.

Shareholders pay the distributor a contingent deferred sales charge ('CDSC') of
1.25% on Class C shares which applies if redemption occurs within the first year
of purchase. In addition, the Trust also pays a distribution fee (12b-1) with
respect to Class C shares calculated at the annual rate of 0.75% of the average
daily net assets. For the period from March 2, 1998 to October 31, 1998, total
12b-1 fees for Class C shares were as follows:

<TABLE>
<S> <C>
First Eagle Fund of America $2,993
First Eagle International Fund $1,396
</TABLE>

NOTE 3. CUSTODIAN FEES -- The Fund has entered into an expense offset agreement
with its custodian wherein it receives credit toward the reduction of custodian
fees whenever there are uninvested cash balances. As of October 31, 1998 the
portfolio's custodian fees and related offset were as follows:

<TABLE>
<CAPTION>
Custodian Fees Credits Earned
-------------- --------------
<S> <C> <C>
First Eagle Fund of America $ 55,514 $ 38,318
First Eagle International Fund $ 71,485 $ 33,934
</TABLE>

NOTE 4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES -- The aggregate
costs of purchases and proceeds from sales of investments (including maturities,
but excluding short-term investments), during the year ended October 31, 1998
were as follows:

<TABLE>
<CAPTION>
Purchases Sales
------------ ------------
<S> <C> <C>
First Eagle Fund of America $290,243,306 $252,361,314
First Eagle International Fund $ 34,530,936 $ 39,399,694
</TABLE>

For the year ended October 31, 1998 First Eagle Fund of America had the
following written options transactions:

<TABLE>
<CAPTION>
Number of Contracts Premium
------------------- ----------
<S> <C> <C>
Options outstanding at October 31, 1997 0 $ 0
Options written 11,854 $3,011,988
Options exercised 1,512 $ 146,659
Options expired/closed 5,050 $ 964,436
------- ----------
Options outstanding at October 31, 1998 5,292 $1,900,893
------- ----------
------- ----------
</TABLE>

For the year ended October 31, 1998, the First Eagle Fund of America and First
Eagle International Fund paid brokerage commissions on

F-15

<PAGE>

<PAGE>
securities transactions of $745,444 and $142,365 and of which $128,836 and
$16,221 was paid to ASB, respectively.

NOTE 5. FEDERAL INCOME TAXES -- During the year ended October 31, 1998, the
First Eagle Fund of America and First Eagle International Fund realized net
capital gains of $32,718,176 and $3,261,396 respectively. The United States
federal income tax basis of the Funds' investments at October 31, 1998 was
substantially the same as the basis for financial reporting purposes and
accordingly, the aggregate gross unrealized appreciation on investments was
$75,161,520 for the First Eagle Fund of America and $5,903,010 for the First
Eagle International Fund and the aggregate unrealized gross depreciation was
$12,915,771 and $1,261,336 respectively, resulting in net unrealized
appreciation for United States income tax purposes of $62,245,749 and $4,641,679
respectively.

NOTE 6. CAPITAL SHARES -- The Declaration of the Trust authorizes the issuance
of an unlimited number of shares of beneficial interest without par value. The
Trust has established Class Y, Class C, and Class A shares. Each share of a
class represents an identical interest in the portfolio and has the same rights,
except that each class bears certain expenses specifically related to the
distribution of its shares.

At October 31, 1998, total paid-in capital amounted to the following for each
class:

<TABLE>
<CAPTION>
Class Y Class C
------------ --------
<S> <C> <C>
First Eagle Fund of America $298,179,898 $661,283
First Eagle International Fund $ 30,424,053 $345,547
</TABLE>

Transactions in shares of each portfolio were as follows:

<TABLE>
<CAPTION>
Year ended Year ended
October 31, 1998 October 31, 1997
------------------------- -------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
FIRST EAGLE FUND OF AMERICA CLASS Y
Shares sold 7,168,769 $153,754,128 3,081,544 $ 59,873,730
Shares redeemed (2,802,071) (56,985,140) (1,095,568) (21,261,845)
Shares issued on
reinvestment 1,474,429 27,394,898 1,275,745 24,451,245
---------- ------------ ---------- ------------
Net Increase 5,841,127 $124,163,886 3,261,721 $ 63,063,130
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>

F-16

<PAGE>

<TABLE>
<CAPTION>
For the period from March 2, 1998
to October 31, 1998
----------------------------------------------------------------------
Shares Amount
--------------------------------- ---------------------------------
<S> <C> <C>
FIRST EAGLE FUND OF AMERICA CLASS C
Shares sold 31,502 $ 661,283
Shares redeemed -- --
Shares issued on reinvestment -- --
------- -----------
Net Increase 31,502 $ 661,283
------- -----------
------- -----------
</TABLE>

<TABLE>
<CAPTION>
Period from
Year ended January 1, 1997 to
October 31, 1998 October 31, 1997
-------------------------- -----------------------
Shares Amount Shares Amount
---------- ------------ -------- -----------
<S> <C> <C> <C> <C>
FIRST EAGLE INTERNATIONAL FUND CLASS Y
Shares sold 1,473,222 $ 26,579,885 254,815 $ 4,235,374
Shares redeemed (1,460,355) (26,474,063) (197,199) (3,247,813)
Shares issued on
reinvestment 117,160 1,785,523 54,257 816,027
---------- ------------ -------- -----------
Net Increase 130,027 $ 1,891,345 111,873 $ 1,803,588
---------- ------------ -------- -----------
---------- ------------ -------- -----------
</TABLE>

<TABLE>
<CAPTION>
For the period from March 2, 1998
to October 31, 1998
-------------------------------------
Shares Amount
----------------- ----------------
<S> <C> <C>
FIRST EAGLE INTERNATIONAL FUND CLASS C
Shares sold 19,217 $345,547
Shares redeemed -- --
Shares issued on reinvestment -- --
------- ----------------
Net Increase 19,217 $345,547
------- ----------------
------- ----------------
</TABLE>

Of the 18,228,999 shares of common stock outstanding for First Eagle Fund of
America and 2,395,283 shares of common stock outstanding for First Eagle
International Fund at October 31, 1998 ASB owned 26,837 and 9,056 shares and the
ASB Profit Sharing Plan owned 407,660 and 275,742 shares respectively. The
directors and officers of the Trust owned approximately 238,568 shares of First
Eagle Fund of America and 173,638 shares of the First Eagle International Fund
at October 31, 1998.

F-17

<PAGE>

<PAGE>
FINANCIAL HIGHLIGHTS

SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT EACH YEAR

FUND OF AMERICA CLASS Y SHARES

<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31,
-------------------------------------------------------------------------------
1998 1997 1996 1995 1994
----------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 20.59 $17.97 $16.28 $15.45 $16.53
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.08) (0.06) (0.04) (0.04) (0.12)
Net realized and unrealized gain 3.62 5.31 4.08 2.87 0.66
----- ------ ------ ------ ------
Total from investment operations 3.54 5.25 4.04 2.83 0.54
----- ------ ------ ------ ------
LESS DISTRIBUTIONS FROM:
Net investment income -- -- -- -- --
Net realized gain (2.60) (2.63) (2.35) (2.00) (1.62)
----- ------ ------ ------ ------
Total distributions (2.60) (2.63) (2.35) (2.00) (1.62)
----- ------ ------ ------ ------
Net asset value, end of year $ 21.53 $20.59 $17.97 $16.28 $15.45
----- ------ ------ ------ ------
----- ------ ------ ------ ------
Total Return* 19.2% 31.0% 27.1% 21.6% 3.8%
Net assets, end of year 39$1,797,350 $254,438,325 $163,402,847 $134,350,180 $120,515,968
RATIOS TO AVERAGE NET ASSETS:
Expenses(1) 1.5% 1.7% 1.8% 1.9% 1.9%
Net investment loss (0.4)% (0.3)% (0.2)% (0.3)% (0.7)%
Portfolio turnover rate 83% 98% 93% 81% 125%
</TABLE>

* Past performance is not predictive of future performance.

(1) For the year ended October 31, 1998 and for the year ended October 31, 1997,
the Fund has earned credits from the custodian which reduce service fees
incurred. If the credits are taken into consideration, the ratio of expenses
to average net assets would be 1.5% and 1.7%, respectively.

F-18

<PAGE>

<PAGE>
FINANCIAL HIGHLIGHTS

SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT EACH PERIOD:

FUND OF AMERICA CLASS C SHARES

<TABLE>
<CAPTION>
MARCH 2, 1998**
THROUGH
OCTOBER 31, 1998
----------------

<S> <C>
Net asset value, beginning of period $ 21.07
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.16)
Net realized and unrealized gain 0.52
--------
Total from investment operations 0.36
--------
LESS DISTRIBUTIONS FROM:
Net investment income --
Net realized gain --
--------
Total distributions --
--------
Net asset value, end of period $ 21.43
--------
--------
Total Return* 1.7%'D''D'
Net assets, end of period $674,944
RATIOS TO AVERAGE NET ASSETS:
Expenses(1) 2.2%'D'
Net investment loss (1.1)%'D'
Portfolio turnover rate 83%
</TABLE>

* Past performance is not predictive of future performance

** Commencement of investment operations

'D' Annualized

'D''D' Total return not annualized

(1) For the year ended October 31, 1998, the Fund has earned credits from the
custodian which reduce service fees incurred. If the credits are taken into
consideration, the ratio of expenses to average net assets would be 2.2%'D'.

F-19

<PAGE>

<PAGE>
FINANCIAL HIGHLIGHTS

SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT EACH PERIOD:

INTERNATIONAL FUND CLASS Y

<TABLE>
<CAPTION>
FOR THE
PERIOD FROM APRIL 4, 1994 **
FOR THE JANUARY 1, FOR THE THROUGH
YEAR ENDED THROUGH YEAR ENDED DECEMBER 31,
OCTOBER 31, OCTOBER 31, DECEMBER 31, ------------------------
1998 1997 1996 1995 1994
----------- ------------ ------------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 16.17 $15.04 $ 13.38 $12.37 $12.50
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.06) (0.12) (0.16) (0.13) (0.02)
Net realized and unrealized gain 0.95 1.25 2.29 1.57 (0.11)
----------- ----- ------ ------ ------
Total from investment operations 0.89 $ 1.13 2.13 1.44 (0.13)
----------- ----- ------ ------ ------
LESS DISTRIBUTIONS FROM:
Net investment income -- -- -- -- --
Net realized gain (0.97) -- (0.47) (0.43) --
----------- ----- ------ ------ ------
Total distributions (0.97) -- (0.47) (0.43) --
----------- ----- ------ ------ ------
Net asset value, end of year $ 16.09 $16.17 $ 15.04 $13.38 $12.37
----------- ----- ------ ------ ------
----------- ----- ------ ------ ------
Total Return* 5.8% 7.5%'D''D' 15.9% 11.6% (1.0)%'D''D'
Net assets, end of year $38,222,433 $36,320,210 $32,105,280 $22,420,889 $20,152,024
RATIOS TO AVERAGE NET ASSETS:
Expenses(1) 2.4% 2.3%'D' 2.9% 3.1% 2.0%'D'
Net investment loss (0.5)% (1.0)%'D' (1.1)% (1.1)% (0.3)%'D'
Portfolio turnover rate 85% 54% 101% 166% 170%
</TABLE>

* Past performance is not predictive of future performance.

** Commencement of investment operations

'D' Annualized

'D''D' Total return not annualized

(1) For the year ended October 31, 1998 and for the period ended October 31,
1997, the Adviser has waived part of its fee. If such fees were not waived,
the net investment loss would have been $(.08) and $(.18) respectively and
the expense ratio would have been 2.4%'D' and 2.8%'D', respectively.

In addition, for the year ended October 31, 1998 and for the period ended
October 31, 1997 the Fund earned credits from the custodian which reduce
service fees incurred. If the credits are taken into consideration the
expense ratios are 2.3% and 2.3%, respectively.

F-20

<PAGE>

<PAGE>
FINANCIAL HIGHLIGHTS

SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT EACH PERIOD:

INTERNATIONAL FUND CLASS C

<TABLE>
<CAPTION>
MARCH 2, 1998
THROUGH
OCTOBER 31, 1998**
------------------
<S> <C>
Net asset value, beginning of period $ 16.90
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.84
Net realized and unrealized loss (1.73)
--------
Total from investment operations (0.89)
--------
LESS DISTRIBUTIONS FROM:
Net investment income
Net realized gain --
--------
Total distributions --
--------
Net asset value, end of period $ 16.01
--------
--------
Total Return* (5.3)%'D''D'
Net assets, end of period $307,738
RATIOS TO AVERAGE NET ASSETS:
Expenses(1) 2.9%'D'
Net investment income 7.0%'D'
Portfolio turnover rate 85%
</TABLE>

* Past performance is not predictive of future performance.

** Commencement of investment operations

'D' Annualized

'D''D' Total return not annualized

(1) For the period from March 2, 1998 to October 31, 1998 the Fund earned
credits from the custodian which reduce service fees incurred. If the
credits are taken into consideration the ratio of expenses to average net
assets would be 2.8%'D'.

F-21

FIRST EAGLE TRUST
PART C
OTHER INFORMATION
DECEMBER 30, 1998

ITEM 22. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
For First Eagle Fund of America:
<S> <C>
1. Schedule of Investments dated October 31, 1998.
2. Statement of Assets and Liabilities dated October 31, 1998.
3. Statement of Operations for the year ended October 31, 1998.
4. Statement of Changes in Net Assets for the years ended October 31, 1998 and 1997.
5. Financial highlights.
6. Notes to Financial Statements.
7. Independent Auditors' Report -- KPMG Peat Marwick LLP dated December 14, 1998.

<CAPTION>
For First Eagle International Fund:
<S> <C>
1. Schedule of Investments dated October 31, 1998.
2. Statement of Assets and Liabilities dated October 31, 1998.
3. Statement of Operations for the period ended October 31, 1998.
4. Statement of Changes in Net Assets for the year ended October 31, 1998 and the period ended
October 31, 1997.
5. Financial highlights.
6. Notes to Financial Statements.
7. Independent Auditors' Report -- KPMG Peat Marwick LLP dated December 14, 1998.
</TABLE>

ITEM 23. EXHIBITS

<TABLE>
<S> <C>
1. Agreement and Declaration of Trust of the Registrant.*
2. By-laws of the Registrant.*
4. Account Application Form.*
5. Investment Advisory Agreement between the Registrant and Arnhold and S. Bleichroeder Advisers,
Inc.*
6.(a) Distribution and Services Agreement between the Registrant and Arnhold and S. Bleichroeder,
Inc.
(b) Selling Group Agreement.*
8.(a) Custody Agreement between the Registrant and The Bank of New York.*
(b) Fund Accounting Agreement.*
(c) Foreign Custody Manager Agreement between Registrant and The Bank of New York.*
(d) Special Custody Agreement between Registrant, The Bank of New York and Arnhold and S.
Bleichroeder, Inc.**
9. Transfer Agency Agreement.*
11. Consent of Independent Auditors.
13. Subscription Agreement.**
17. Financial Data Schedule.
18. Rule 18f-3 Plan.*
19. Power of Attorney.*
</TABLE>

- ------------
* Previously filed on or about February 27, 1998 with Post-Effective Amendment
No. 16 to the Registration Statement of the Registrant on Form N-1A and
incorporated herein by reference.

** Previously filed and incorporated by reference.

C-1

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

No persons are controlled by or under common control with the Registrant.

ITEM 25. INDEMNIFICATION

The Registrant shall indemnify directors, officers, employees and agents of
the Registrant against judgments, fines, penalties, settlements and expenses to
the fullest extent authorized, and in the manner permitted, by applicable
federal and state law.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

Arnhold and S. Bleichroeder Advisers, Inc. (the 'Adviser') is a wholly
owned subsidiary of Arnhold and S. Bleichroeder, Inc. which has a substantial
amount of assets under management in the form of individual and fund accounts.
Arnhold and S. Bleichroeder, Inc. is a registered broker-dealer and maintains a
substantial involvement in the securities brokerage and underwriting businesses.
The business and other connections of the Adviser's directors and officers are
as follows:

<TABLE>
<CAPTION>
POSITION WITH THE
NAME ADVISER BUSINESS AND OTHER CONNECTIONS
---- ------------------ ------------------------------
<S> <C> <C>
Henry H. Arnhold............... Director Co-Chairman of the Board of Arnhold and S.
Bleichroeder, Inc.; Director, Aquila International
Fund Limited; Trustee, The New School for Social
Research; Director, Conservation International

John P. Arnhold................ President, Chief Co-President and Director, Arnhold and S.
Executive Officer Bleichroeder, Inc.; Director, Aquila International
and Director Fund Limited and The Global Beverage Fund Limited;
President, WorldVest, Inc.; President, Arnhold and
S. Bleichroeder, UK Ltd.; Co-President and Trustee,
First Eagle Trust

Stanford S. Warshawsky......... Director Co-President, Director and Secretary, Arnhold and S.
Bleichroeder, Inc.; Director, German-American
Chamber of Commerce; Chairman of the Board, Arnhold
and S. Bleichroeder, UK Ltd.; Chairman of the Board
and Trustee, First Eagle Trust

Stephen M. Kellen.............. Director Co-Chairman of the Board of Arnhold and S.
Bleichroeder Inc.; Trustee, The Carnegie Society and
WNET/Thirteen; Trustees Council of The National
Gallery of Art

Robert Miller.................. Vice President, Senior Vice President, Arnhold and S. Bleichroeder,
Secretary and Inc.; Director, Arnhold and S. Bleichroeder, UK
Treasurer Ltd.; Treasurer, First Eagle Trust

Gary Lee Fuhrman............... Director Senior Vice President and Director, Arnhold and S.
Bleichroeder, Inc.; Director, Medical Resources,
Inc.
</TABLE>

ITEM 27. PRINCIPAL UNDERWRITER

(a) Arnhold and S. Bleichroeder, Inc. acts as an investment adviser to
First Eagle Fund, N.V., Aquila International Fund Limited, Aetos Corporation,
DEF Associates, N.V., Eagle Select Fund Limited, Eagle World Growth Fund Limited
and The Global Beverage Fund Limited.

C-2

(b) The positions and offices of the Distributor's directors and officers
who serve the Registrant are as follows:

<TABLE>
<CAPTION>
NAME AND BUSINESS
ADDRESS* POSITION AND OFFICES WITH UNDERWRITER POSITION AND OFFICES WITH REGISTRANT
----------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Stanford S. Warshawsky............ Co-President, Director and Secretary Chairman of the Board and Trustee
John P. Arnhold................... Co-President and Director Co-President and Trustee
Michael M. Kellen................. Senior Vice President and Director Vice Chairman of the Board and Trustee
Arthur F. Lerner.................. Senior Vice President Senior Vice President
Tracy LaPointe Saltwick........... Senior Vice President Vice President
Robert Miller..................... Senior Vice President Treasurer
Robert Bruno...................... Vice President Vice President and Secretary
Martha B. Pierce.................. Vice President Vice President
Cari Levine....................... Assistant Vice President Assistant Treasurer
Suzan Afifi....................... Assistant Vice President Assistant Secretary
</TABLE>
- ------------
* The address of each person named above is 1345 Avenue of the Americas, New
York, New York 10105.

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS

The Registrant's accounts and records will be maintained at The Bank of New
York, 48 Wall Street, New York, New York 10286. Records of shareholders'
accounts will be maintained at BISYS Fund Services, Inc., 3435 Stelzer Road,
Columbus, Ohio 43219.

ITEM 29. MANAGEMENT SERVICES

The Registrant is not a party to any management-related service contract
not discussed in the Prospectus or Statement of Additional Information of this
Registration Statement.

ITEM 30. UNDERTAKINGS

The Registrant hereby undertakes to provide each person to whom a copy of
the Prospectus is given with a copy of the Fund's annual report, which contains
the information required by item 5A of Form N-1A, upon request by such person
and free of charge.

The Registrant hereby undertakes to call a meeting of shareholders for the
purpose of voting upon the question of removal of a director, if requested to do
so by the holders of at least 10% of the Fund's outstanding shares, and that it
will assist in communication with other shareholders as required by Section
16(c) of the Investment Company Act of 1940.

C-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and State of New York, as of the 28th day of December 1998.

FIRST EAGLE TRUST

By: /s/ JOHN P. ARNHOLD
..................................
JOHN P. ARNHOLD,
CO-PRESIDENT

By: /s/ HAROLD J. LEVY
..................................
HAROLD J. LEVY,
CO-PRESIDENT

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
/S/ JOHN P. ARNHOLD Trustee December 28, 1998
.........................................
JOHN P. ARNHOLD

/S/ CANDACE K. BEINECKE* Trustee December 28, 1998
.........................................
CANDACE K. BEINECKE

/S/ EDWIN J. EHRLICH* Trustee December 28, 1998
.........................................
EDWIN J. EHRLICH

/S/ K. GEORG GABRIEL* Trustee December 28, 1998
.........................................
K. GEORG GABRIEL

/S/ ROBERT J. GELLERT* Trustee December 28, 1998
.........................................
ROBERT J. GELLERT

/S/ MICHAEL M. KELLEN* Trustee December 28, 1998
.........................................
MICHAEL M. KELLEN

/S/ WILLIAM M. KELLY* Trustee December 28, 1998
.........................................
WILLIAM M. KELLY

/S/ STANFORD S. WARSHAWSKY* Trustee December 28, 1998
.........................................
STANFORD S. WARSHAWSKY

/S/ ROBERT MILLER Treasurer (Principal Financial and Accounting December 28, 1998
......................................... Officer
ROBERT MILLER
</TABLE>

* by power-of-attorney by /s/ JOHN P. ARNHOLD
........................

EXHIBIT INDEX

B. Exhibits

<TABLE>
<S> <C>
1. Agreement and Declaration of Trust of the Registrant.*
2. By-laws of the Registrant.*
4. Account Application Form.*
5. Investment Advisory Agreement between the Registrant and Arnhold and S. Bleichroeder Advisers, Inc.*
6.(a) Distribution and Services Agreement between the Registrant and Arnhold and S. Bleichroeder, Inc.
(b) Selling Group Agreement.*
8.(a) Custody Agreement between the Registrant and The Bank of New York.*
(b) Fund Accounting Agreement.*
(c) Foreign Custody Manager Agreement between Registrant and Bank of New York.*
(d) Special Custody Agreement among Registrant, The Bank of New York and Arnhold and S. Bleichroeder,
Inc.**
9. Transfer Agency Agreement.*
11. Consent of Independent Auditors.
13. Subscription Agreement.**
17. Financial Data Schedule.
18. Rule 18f-3 Plan.*
19. Power of Attorney.*
</TABLE>

- ------------
* Previously filed on or about February 27, 1998 with Post-Effective Amendment
No. 16 to the Registration Statement of the Registrant on Form N-1A and
incorporated herein by reference.

** Previously filed and incorporated by reference.

STATEMENT OF DIFFERENCES
------------------------

The dagger symbol shall be expressed as................................ 'D'
The double dagger symbol shall be expressed as......................... 'DD'
Characters normally expressed as superscript shall be preceded by...... 'pp'
The division sign shall be expressed as ............................... [div]

<PAGE>

FIRST EAGLE TRUST
DISTRIBUTION AND SERVICES AGREEMENT

AGREEMENT made as of the 27th day of February, 1998, between FIRST
EAGLE TRUST, a Delaware business trust (the "Trust"), and ARNHOLD AND S.
BLEICHROEDER, INC., a New York corporation (the "Distributor"), such Distributor
to act on behalf of those Series (hereinafter referred to as the "Funds") of the
Trust listed in Exhibit A hereto in the manner contemplated by this Agreement.

W I T N E S S E T H :

WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
and it is in the interest of the Trust to continuously offer shares of the Funds
for sale under the Securities Act of 1933, as amended (the "1933 Act").

WHEREAS, the Trust and the Distributor wish to enter into an agreement
with each other with respect to the continuous offering of the classes of shares
of beneficial interest of the Funds ("Shares") as listed in Exhibit A upon the
terms described in the Prospectus and Statement of Additional Information that
is included as part of the Trust's Registration Statement on Form N-1A, as may
be amended from time to time (the "Registration Statement").

NOW, THEREFORE, the parties agree as follows:

Section 1. Appointment of the Distributor. The Trust hereby appoints
the Distributor to act as its exclusive agent to sell and to arrange for the
sale of Shares on the terms and

for the period set forth in this Agreement and in accordance with the
Registration Statement, and the Distributor hereby accepts such appointment and
agrees to act hereunder.

Section 2. Services and Duties of the Distributor.

(a) The Distributor agrees to sell, as agent for the Trust during the
term of this Agreement, Shares upon the terms described in the Prospectus and
Statement of Additional Information that is included in Registration Statement.

(b) The Distributor will make itself available to receive orders,
satisfactory to the Distributor, for the purchase of Shares and will accept such
orders on behalf of the Trust and will transmit such orders to the Funds'
transfer agent as promptly as practicable. Purchase orders shall be deemed
effective at the time and in the manner set forth in the current Prospectus and
Statement of Additional Information (hereinafter referred to jointly as the
"Prospectus").

(c) The offering price of Shares shall be determined following the
receipt of an order in accordance with procedures set forth in the Prospectus.
The Trust shall furnish the Distributor, with all possible promptness, advice of
each computation of net asset value of the Shares.

(d) The Distributor in its discretion may sell Shares to such
registered and qualified retail dealers and financial services firms ("Firms")
as it may select. In making agreements with such firms, the Distributor shall
act only as principal and not as agent for the Trust.

(e) The Distributor may also appoint such Firms to provide
distribution services to investors. The Firms shall provide such facilities and
personnel as is necessary or beneficial for providing information regarding the
Funds, distribution of sales literature, prospectuses, promotional

material and information, and assisting with Fund services and privileges for
clients of such Firms and shareholders of the Funds. The Distributor may also
provide the above services to the Trust and shall coordinate transfer agency
services for the Trust.

(f) The Distributor shall order Shares from the Trust only to the
extent it has received purchase orders therefor. Shares offered for sale or sold
by the Distributor shall be so offered or sold at a price per share determined
in accordance with the Prospectus. The price the Trust shall receive for all
Shares purchased from it shall be the net asset value of such Shares as
determined in accordance with the Prospectus. The Distributor may pay
commissions or fees to Firms and to others in its discretion in such amounts as
the Distributor shall determine from time to time and as provided in the
Prospectus. The Distributor shall be entitled to receive and retain any
applicable contingent deferred sales charge as described in the current
Prospectus. In addition to sales made by it as agent of the Trust, the
Distributor may also sell Shares as principal to persons with whom it does not
have selling group agreements.

(g) The Distributor will not make, or authorize Firms or others to
make, any short sales of Shares. The Distributor, as agent of and for the
account of the Trust, may repurchase the Shares at such prices and upon such
terms and conditions as shall be specified in the Prospectus. In selling or
reacquiring Shares for the account of the Trust, the Distributor will in all
respects conform to the requirements of all state and federal laws and the rules
and regulations of the National Association of Securities Dealers, Inc. ("NASD")
relating to such sale or reacquisition, as the case may be, and will indemnify
and save harmless the Fund from any damage or expense on account of any wrongful
act by the Distributor or any employee, representative or agent of the

Distributor. The Distributor will observe and be bound by all the provisions of
the Agreement and Declaration of Trust of the Trust and the provisions of the
Prospectus.

(h) The Distributor shall, for all purposes herein provided, be deemed
to be an independent contractor and, unless expressly provided herein or
otherwise authorized, shall have no authority to act for or represent the Trust
in any way. The Distributor and its affiliates, by separate agreement with the
Trust, may also serve the Trust in other capacities. The services of the
Distributor to the Trust under this Agreement are not to be deemed exclusive,
and the Distributor shall be free to render similar services or other services
to others so long as its services hereunder are not materially impaired thereby.

(i) The Distributor shall issue and deliver or shall arrange for
various Firms to issue and deliver on behalf of the Trust such confirmations of
sales made by it pursuant to this Agreement as may be required. At or prior to
the time of issuance of Shares, the Distributor will pay or cause to be paid to
the Trust the amount due the Trust for the sale of such Shares. Certificates
shall be issued or Shares registered on the transfer books of the Trust in such
names and denominations as the Distributor may specify.

Section 3. Compensation to the Distributor. For services rendered
pursuant to this Agreement, the Trust shall pay to the Distributor, on a monthly
basis, the fees as set forth in Exhibit B to this Agreement. This Agreement
contemplates that the Firms providing services in connection with the sale and
servicing of Shares will be compensated by the Distributor in accordance with
the terms of this Agreement and the Prospectus. For the month and year in which
this Agreement becomes effective or terminates, there shall be an appropriate
proration on the basis of the number of days that the Agreement is in effect
during the month and year, respectively. The

net asset value per Share and the net assets of each of the Funds shall be
calculated in accordance with the provisions of the Prospectus. On each day when
net asset value is not calculated, the net asset value per Share shall be deemed
to be the net asset value of such a Share as of the close of business on the
last previous day on which such calculation was made. The fees payable to the
Distributor shall be in addition to and shall not be reduced or offset by the
amount of any contingent deferred sales charge received by the Distributor. The
Distributor may also receive compensation from Arnhold and S. Bleichroeder
Advisors, Inc., the Fund's investment adviser, as the Distributor and the
investment adviser may agree from time to time.

Section 4. Duties of the Trust.

(a) The Trust agrees to sell its Shares so long as it has Shares
available for sale and agrees to deliver or cause the Funds' transfer agent to
deliver Share certificates or to register such Shares on the records of the
Funds in non-certificated form and to register such Shares on the records of the
Funds in such names and amounts as the Distributor has requested in writing, as
promptly as practicable after receipt by the Trust of the net asset value
thereof and written instructions for registering such Shares.

(b) The Trust shall keep the Distributor fully informed with regard to
its affairs and shall furnish to the Distributor copies of all financial
statements and other information that the Distributor may reasonably request for
use in connection with the distribution of Shares. Upon request by the
Distributor, the Trust will furnish a certified copy of the current financial
statements prepared for the Funds by the Trust's independent accountants. The
Trust will furnish such reasonable number of copies of the current Prospectus
and financial statements as the Distributor

may request. The Trust shall cooperate fully in the efforts of the Distributor
to sell and arrange for the sale of Shares.

(c) The Trust shall take all necessary action to provide for
authorized Shares and for the payment of filing fees as may be necessary to
register the Shares under the 1933 Act and the 1940 Act so that Shares will be
available for sale by the Distributor. The Trust agrees to file from time to
time such amendments, reports and other documents as may be necessary in order
that there will be no untrue statement of a material fact in the Registration
Statement or Prospectus, and so that there will be no omission to state a
material fact in the Registration Statement or Prospectus.

(d) The Trust shall use its best efforts to qualify and maintain the
qualification of an appropriate number of Shares for sale under the securities
laws of such states as the Distributor and the Fund may approve; and, if
necessary or appropriate in connection therewith, to qualify and maintain the
qualification of the Trust as a broker or dealer in such states. The Trust shall
not be required to amend its Agreement of Trust or By-Laws to comply with the
laws of any state, to maintain an office in any state, to change the terms of
the offering of its Shares in any state from the terms set forth in its
Registration Statement, to qualify as a foreign corporation in any state or to
consent to service of process in any state other than with respect to claims
arising out of the offering of Shares. The Distributor shall furnish such
information and other material relating to its affairs and activities as may be
required by the Trust in connection with such qualifications.

Section 5. Expenses.

(a) The Trust shall bear all expenses of the continuous offering of
Shares in connection with: (i) fees and disbursements of its counsel and
independent accountants, (ii) the

preparation, filing and printing of the Registration Statement required by and
under the federal securities laws, (iii) the preparation and mailing of annual
and interim reports, Prospectuses and proxy materials to existing shareholders
and (iv) the qualifications of Shares for sale and of the Trust as a broker or
dealer under the securities laws of such states or other jurisdictions as shall
be selected by the Trust and the Distributor pursuant to Section 4(d) hereof and
the cost and expenses payable to each such state for continuing qualification
therein.

(b) The Distributor shall bear (i) the costs and expenses of
preparing, printing and distributing any materials not prepared by the Trust and
other materials used by the Distributor in connection with its offering of
Shares for sale to the public, (ii) the cost and expense of printing such extra
copies of the Prospectus and Statement of Additional Information for use in the
sale of Shares to the public, (iii) the expenses of registration or
qualification of the Distributor as a dealer or broker under federal or state
laws and the expense of continuing such registration or qualification and (iv)
the expenses of any sales commissions for sales of the Funds' Shares (except
such expenses as are specifically undertaken by the Trust).

Section 6. Reports to the Board. The Distributor shall prepare reports
for the Board of Trustees of the Trust on a quarterly basis in connection with
the Trust's Rule 12b-1 plan and agreement for such Classes of Shares subject to
Rule 12b-1 as described in the Prospectus showing amounts paid to the various
Firms and such other information as shall be reasonably requested by the Board
of Trustees.

Section 7. Distribution Services Plan. To the extent applicable, this
Agreement constitutes the Rule 12b-1 plan and agreement for such payments as
described in Exhibit B as being made pursuant to Rule 12b-1 under the 1940 Act;
and this Agreement and plan shall be approved and renewed in accordance with
Rule 12b-1. However, payments for services not specifically identified as being
in accordance with Rule 12b-1 shall be deemed not to be in accordance with Rule
12b-1.

Section 8. Indemnification. The Trust agrees to indemnify, defend and
hold the Distributor, its directors, officers and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act free and harmless
from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which the
Distributor, its directors, officers or any such controlling person may incur
under the 1933 Act, or under common law or otherwise, arising out of or based
upon any untrue statement of a material fact contained in the Registration
Statement or arising out of or based upon any alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such claims, demands, liabilities or
expenses arise out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information furnished in writing by the Distributor to the Trust for use in
the Registration Statement; provided, however, that this indemnity agreement
shall not inure to the benefit of such Distributor, director, officer or
controlling person unless a court of competent jurisdiction shall determine in a
final decision on the merits that the person to be indemnified was

not liable by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties, or by reason of its reckless disregard of its
obligations under this Agreement ("disabling conduct"), or, in the absence of
such a decision, a reasonable determination, based upon a review of the facts,
that the indemnified person was not liable by reason of disabling conduct, by
(a) a vote of a majority of a quorum of trustees who are neither "interested
persons" of the Trust as defined in Section 2(a)(19) of the 1940 Act nor parties
to the proceeding or (b) an independent legal counsel in a written opinion. The
Trust's agreement to indemnify the Distributor, its directors, officers and any
controlling person as aforesaid is expressly conditioned upon the Trust being
promptly notified of any action brought against the Distributor, its directors,
officers or any controlling person, and such notification is to be given by
letter or telegram addressed to the Trust at its principal business office. The
Trust agrees to promptly notify the Distributor of the commencement of any
litigation or proceedings against it or any of its trustees or officers in
connection with the issue and sale of Shares.

The Distributor agrees to indemnify, defend and hold the Trust, its
trustees, officers and any person who controls the Trust, if any, within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the cost of
investigating or defending against such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Trust, its trustees,
officers or any such controlling person may incur under the 1933 Act or under
common law or otherwise, but only to the extent that such liability or expense
incurred by the Trust, its trustees, officers or such controlling person
resulting from such claims or demands shall arise out of or be based upon any
alleged untrue statement of a material fact contained in information furnished
in writing by the Distributor to the

Trust for use in the Registration Statement or Prospectus or shall arise out of
or be based upon any alleged omission to state a material fact in connection
with such information required to be stated in the Registration Statement or
Prospectus or necessary to make such information not misleading. The
Distributor's agreement to indemnify the Trust, its trustees, officers and any
such controlling person as aforesaid is expressly conditioned upon the
Distributor's being promptly notified of any action brought against the Trust,
its trustees, officers or any such controlling person, such notification being
given to the Distributor at its principal business office.

Section 9. Compliance with Securities Laws. The Trust represents that
it is registered as an open-end, non-diversified management investment company
under the 1940 Act, and agrees that it will comply with all of the provisions of
the 1940 Act and of the rules and regulations thereunder. The Fund and the
Distributor each agree to comply with all of the applicable terms and provisions
of the 1940 Act, the 1933 Act and, subject to the provisions of Section 4(d)
hereof, all applicable state securities ("Blue Sky") laws. The Distributor
agrees to comply with all of the applicable terms and provisions of the
Securities Exchange Act of 1934.

Section 10. Duration and Termination of this Agreement. This Agreement
shall become effective as of the date first above written. This Agreement shall
continue in effect until February 28, 2000 and shall continue from year to year
thereafter only so long as such continuance is specifically approved at least
annually by (i) the Board of Trustees of the Trust, or by the vote of a majority
of the outstanding voting securities of the Funds, cast in person or by proxy,
and (ii) a majority of those trustees who are not parties to this Agreement or
interested persons of any such

party and who have no direct or indirect financial interest in this Agreement or
in any agreement related thereto, cast in person at a meeting called for the
purpose of voting upon such approval.

This Agreement may be terminated at any time without the payment of
any penalty, by the Board of Trustees of the Trust, by vote of a majority of the
outstanding voting securities of the Funds or by the Distributor on not more
than sixty (60) days' nor less than thirty (30) days' written notice to the
other party. This Agreement shall automatically terminate in the event of its
assignment, as defined in the 1940 Act.

Section 11. Amendments of this Agreement. This Agreement may be
amended by the parties only if such amendment is specifically approved by (i)
the Board of Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Funds, and (ii) a majority of those trustees of the
Trust who are not parties to this Agreement or interested persons of any such
party and who have no direct or indirect financial interest in this Agreement,
cast in person at a meeting called for the purpose of voting on such approval.
However, this Agreement may not be amended to increase any fee payable hereunder
by any existing Fund or Class of Shares without a vote of shareholders of such
Class of Shares or Fund.

Section 12. Notices. Any notice required to be given pursuant to this
Agreement shall be deemed duly given if delivered or mailed by registered mail,
postage prepaid, (1) to the Distributor at 1345 Avenue of the Americas, New
York, N.Y. 10105, Attention: Fund Administration Department or (2) to the Fund
at 1345 Avenue of the Americas, New York, N.Y. 10105, Attention: Secretary.

Section 13. Entire Agreement. Except as provided in the Class C Share
Distribution Agreement and the Services Agreement, this Agreement contains the
entire agreement between the parties hereto and supersedes all prior agreements,
understandings and arrangements with respect to the subject matter hereof. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder shall not be thereby
affected.

Section 14. Governing Law. This Agreement shall be governed by and
construed in accordance with the applicable federal securities laws and the laws
of the State of New York. This Agreement is the entire contract between the
parties relating to the subject matter hereof and supersedes all prior
agreements between the parties relating to the subject matter hereof.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.

<TABLE>
<S> <C>
FIRST EAGLE TRUST ARNHOLD AND S. BLEICHROEDER, INC.

By: /s/ Tracy L. Saltwick By: /s/ Stanford S. Warshawsky
----------------------------- -----------------------------

By: /s/ Robert Bruno By: /s/ John P. Arnhold
----------------------------- -----------------------------
</TABLE>

EXHIBIT A
As Revised November 19, 1998

FIRST EAGLE TRUST
DISTRIBUTION AND SERVICES AGREEMENT

The following Series of the Trust are referred to as the "Funds" in the
Distribution Agreement:

First Eagle Fund of America

First Eagle International Fund

Each of the above listed Funds offers the following classes of Shares as
described in the Trust's Registration Statement:

Class Y Shares

Class C Shares

Class A Shares

Dated as of the 19th day of November, 1998.

<TABLE>
<S> <C>
FIRST EAGLE TRUST ARNHOLD AND S. BLEICHROEDER, INC.

By: /s/ Robert Bruno By: /s/ John P. Arnhold
----------------------------- -----------------------------

By: /s/ Tracy L. Saltwick By: /s/ Stanford S. Warshawsky
----------------------------- -----------------------------
</TABLE>

EXHIBIT B
As Revised November 19, 1998

FIRST EAGLE TRUST
DISTRIBUTION AND SERVICES AGREEMENT

The following Series of the Trust are referred to as the "Funds" in the
Distribution Agreement:

First Eagle Fund of America

First Eagle International Fund

For services rendered pursuant to this Agreement, the Trust shall pay to the
Distributor, on a monthly basis, a services fee at the annual rate of 0.25% of
the average daily net assets of Class Y, Class C and Class A Shares of the
Funds.

For services pursuant to the Trust's Rule 12b-1 plan and agreement, the Trust
shall pay to the Distributor, on a monthly basis, a fee at the annual rate of
0.75% of the average daily net assets of Class C Shares of the Funds.

For services pursuant to the Trust's Rule 12b-1 plan and agreement, the Trust
shall pay to the Distributor, on a monthly basis, a fee at the annual rate of
0.25% of the average daily net assets of Class A Shares of the Funds.

Dated as of the 19th day of November, 1998.

<TABLE>
<S> <C>
FIRST EAGLE TRUST ARNHOLD AND S. BLEICHROEDER, INC.

By: /s/ Robert Bruno By: /s/ John P. Arnhold
----------------------------- -----------------------------

By: /s/ Tracy L. Saltwick By: /s/ Stanford S. Warshawsky
----------------------------- -----------------------------
</TABLE>

<PAGE>

EXHIBIT 11
INDEPENDENT AUDITORS' CONSENT

To the Shareholders and Board of Trustees of
FIRST EAGLE TRUST:

We consent to the use of our report dated December 14, 1998 with respect to
First Eagle Fund of America and First Eagle International Fund included herein
and to the references to our Firm under the headings 'Financial Highlights' in
the Prospectus and 'Custodian, Transfer and Dividend Disbursing Agent and
Independent Auditors' in the Statement of Additional Information.

KPMG PEAT MARWICK LLP

New York, New York
December 30, 1998

<PAGE>

<ARTICLE> 6
<SERIES>
<NUMBER> 011
<NAME> FIRST EAGLE FUND OF AMERICA CLASS Y

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 331,191,367
<INVESTMENTS-AT-VALUE> 395,586,898
<RECEIVABLES> 4,148,745
<ASSETS-OTHER> 469,044
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 400,204,687
<PAYABLE-FOR-SECURITIES> 2,983,194
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,749,199
<TOTAL-LIABILITIES> 7,732,393
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 298,179,898
<SHARES-COMMON-STOCK> 18,197,497
<SHARES-COMMON-PRIOR> 12,356,370
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 32,718,972
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 62,245,749
<NET-ASSETS> 392,472,294
<DIVIDEND-INCOME> 2,367,141
<INTEREST-INCOME> 1,224,410
<OTHER-INCOME> 0
<EXPENSES-NET> 4,925,774
<NET-INVESTMENT-INCOME> (1,334,223)
<REALIZED-GAINS-CURRENT> 32,670,646
<APPREC-INCREASE-CURRENT> 14,035,368
<NET-CHANGE-FROM-OPS> 45,368,798
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 32,159,998
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,168,769
<NUMBER-OF-SHARES-REDEEMED> (2,802,071)
<SHARES-REINVESTED> 1,474,429
<NET-CHANGE-IN-ASSETS> 138,033,969
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 32,207,528
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,520,419
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,964,092
<AVERAGE-NET-ASSETS> 328,507,419
<PER-SHARE-NAV-BEGIN> 20.59
<PER-SHARE-NII> (.08)
<PER-SHARE-GAIN-APPREC> 3.62
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (2.60)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.53
<EXPENSE-RATIO> 1.5
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

<PAGE>

<ARTICLE> 6
<SERIES>
<NUMBER> 012
<NAME> FIRST EAGLE FUND OF AMERICA CLASS C

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 331191367
<INVESTMENTS-AT-VALUE> 395586898
<RECEIVABLES> 4148645
<ASSETS-OTHER> 469044
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 400204887
<PAYABLE-FOR-SECURITIES> 2983194
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 698524
<TOTAL-LIABILITIES> 7732393
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 661283
<SHARES-COMMON-STOCK> 31502
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 32718972
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 62245749
<NET-ASSETS> 392472294
<DIVIDEND-INCOME> 2367141
<INTEREST-INCOME> 1224410
<OTHER-INCOME> 0
<EXPENSES-NET> 4928767
<NET-INVESTMENT-INCOME> (1337216)
<REALIZED-GAINS-CURRENT> 32670646
<APPREC-INCREASE-CURRENT> 14035368
<NET-CHANGE-FROM-OPS> 45368798
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 31502
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 138033969
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 32207528
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3520419
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4967085
<AVERAGE-NET-ASSETS> 328507419
<PER-SHARE-NAV-BEGIN> 21.07
<PER-SHARE-NII> (.16)
<PER-SHARE-GAIN-APPREC> .52
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.43
<EXPENSE-RATIO> 2.2
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

<PAGE>

<ARTICLE> 6
<SERIES>
<NUMBER> 021
<NAME> FIRST EAGLE INTERNATIONAL FUND CLASS Y

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 34779235
<INVESTMENTS-AT-VALUE> 39420909
<RECEIVABLES> 348940
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 12240
<TOTAL-ASSETS> 39782089
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1251918
<TOTAL-LIABILITIES> 1251918
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 30424053
<SHARES-COMMON-STOCK> 2376066
<SHARES-COMMON-PRIOR> 2246039
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3141485
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4647432
<NET-ASSETS> 38530171
<DIVIDEND-INCOME> 608725
<INTEREST-INCOME> 232291
<OTHER-INCOME> 0
<EXPENSES-NET> 987877
<NET-INVESTMENT-INCOME> (146861)
<REALIZED-GAINS-CURRENT> 2544157
<APPREC-INCREASE-CURRENT> (210168)
<NET-CHANGE-FROM-OPS> 2185732
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 2212663
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1473222
<NUMBER-OF-SHARES-REDEEMED> (1460355)
<SHARES-REINVESTED> 117160
<NET-CHANGE-IN-ASSETS> 4214930
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 2929902
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 494580
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1045315
<AVERAGE-NET-ASSETS> 42584004
<PER-SHARE-NAV-BEGIN> 16.17
<PER-SHARE-NII> (.06)
<PER-SHARE-GAIN-APPREC> .95
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.97)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.09
<EXPENSE-RATIO> 2.4
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

<PAGE>

<ARTICLE> 6
<SERIES>
<NUMBER> 022
<NAME> FIRST EAGLE INTERNATIONAL FUND CLASS C

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 34779235
<INVESTMENTS-AT-VALUE> 39420909
<RECEIVABLES> 348940
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 12240
<TOTAL-ASSETS> 39782089
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1251918
<TOTAL-LIABILITIES> 1251918
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 345547
<SHARES-COMMON-STOCK> 19217
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3141485
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4647432
<NET-ASSETS> 38530171
<DIVIDEND-INCOME> 608725
<INTEREST-INCOME> 232291
<OTHER-INCOME> 0
<EXPENSES-NET> 989273
<NET-INVESTMENT-INCOME> (148257)
<REALIZED-GAINS-CURRENT> 2544157
<APPREC-INCREASE-CURRENT> (210168)
<NET-CHANGE-FROM-OPS> 2185732
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 19217
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4214930
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 2929902
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 494580
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1046711
<AVERAGE-NET-ASSETS> 42584004
<PER-SHARE-NAV-BEGIN> 16.90
<PER-SHARE-NII> .84
<PER-SHARE-GAIN-APPREC> (1.73)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.01
<EXPENSE-RATIO> 2.9
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

<PAGE>