<PAGE>
PROSPECTUS APRIL 1, 1999
SG COWEN INTERMEDIATE
FIXED INCOME FUND
SG COWEN GOVERNMENT
SECURITIES FUND
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS, AND ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
[LOGO] [LOGO]
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-----------
<S> <C>
SG COWEN INTERMEDIATE FIXED INCOME FUND....................... 3
SG COWEN GOVERNMENT SECURITIES FUND........................... 6
HOW WE MANAGE THE FUNDS....................................... 9
Our investment strategies..................................... 9
The securities in which we typically invest................... 9
The risks of investing in the Funds........................... 11
WHO MANAGES THE FUNDS......................................... 12
Investment adviser............................................ 12
Management Fees............................................... 12
Portfolio manager............................................. 12
ABOUT YOUR ACCOUNT............................................ 12
Choosing share class.......................................... 12
How to reduce your sales charge............................... 14
How to buy shares............................................. 14
How to sell shares............................................ 15
Account minimum............................................... 15
Special services.............................................. 15
DIVIDENDS, DISTRIBUTIONS AND TAXES............................ 16
FINANCIAL HIGHLIGHTS.......................................... 17
</TABLE>
2
<PAGE>
SG COWEN INTERMEDIATE FIXED INCOME FUND ("INTERMEDIATE FUND")
WHAT ARE THE FUND'S GOALS?
The Fund seeks current income and stability of principal through investment
primarily in high quality intermediate term fixed income securities. Although
the Fund will strive to achieve these goals, there is no assurance that it will.
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
Under normal market conditions, we invest at least 65% of the Fund's assets
in high quality fixed income securities with a weighted average maturity between
three and ten years. The Fund may also invest in securities issued or guaranteed
by the U.S. Government and its agencies and instrumentalities, preferred stock,
corporate debt obligations, and mortgage related securities. The Fund may also
purchase securities on a when-issued basis. At least 65% of the Fund's assets
will be invested in securities rated in the two highest categories of the
ratings assigned by at least one Nationally Recognized Statistical Rating
Organization (NRSRO), and all of the Fund's assets will be invested in
securities in the four highest ratings assigned by at least one NRSRO, or if
unrated in securities determined by SG Cowen Asset Management to be of
comparable quality, when we buy them.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
Investing in any mutual fund involves risk, including the risk that you may
lose part or all of the money you invest. The price of Fund shares will increase
and decrease according to changes in the value of the Fund's investments.
The market value of fixed income obligations of the Fund will be affected by
general changes in interest rates, which will result in increases or decreases
in the value of the obligations held by the Fund. The market value of the
obligations held by the Fund can be expected to vary inversely to changes in
prevailing interest rates. You should also recognize that, in periods of
declining interest rates, a Fund's yield will tend to be somewhat higher than
prevailing market rates and, in periods of rising interest rates, a Fund's yield
will tend to be somewhat lower. Also, when interest rates are falling, the
inflow of net new money to a Fund from the continuous sale of its shares will
tend to be invested in instruments producing lower yields than the balance of
its portfolio, thereby reducing the Fund's current yield. In periods of rising
interest rates, the opposite can be expected to occur. In addition, securities
in which the Fund may invest may not yield as high a level of current income as
might be achieved by investing in securities with less liquidity, less
creditworthiness or longer maturities. For further discussion of risk, see "How
We Manage the Fund."
You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
investment program. You may wish to discuss this Fund with your financial
adviser to determine whether it is an appropriate choice for you.
3
<PAGE>
INTERMEDIATE FUND
HOW HAS THE FUND PERFORMED?
THE BAR CHART AND TABLE below can help you evaluate the potential risks and
rewards of investing in the Fund. We show how returns have varied since the Fund
commenced operations, as well as the average annual returns of all of the Fund's
shares for one year, five years, and since inception -- compared to the
performance of the Lehman Intermediate Government/Corporate Index. You should
remember that unlike the Fund, the Lehman Intermediate Government/ Corporate
Index is unmanaged and doesn't include the costs of buying, selling, and holding
the securities. The Fund's past performance is not necessarily an indication of
how it will perform in the future.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
YEAR BY YEAR RETURNS
<S> <C>
Year-end returns
1993* 5.74%
1994 -1.43%
1995 14.92%
1996 3.47%
1997 8.13%
1998 8.94%
*Since inception
</TABLE>
During the years illustrated above, the Fund's highest return in one quarter
was +5.40% (9/30/98) and its lowest return in one calendar quarter (6/30/94) was
- -1.70%.
CALENDAR YEAR RETURNS (CLASS A)
The maximum Class A sales charge of 2.35%, assessed when you purchase
shares, is not reflected in the total returns noted above. If this fee were
included, the returns would be less than those shown. The average annual returns
shown below do include the sales charge.
AVERAGE ANNUAL RETURNS AS OF 12/31/98
<TABLE>
<CAPTION>
1 Year 5 Years Inception*
----------- ----------- -----------
<S> <C> <C> <C>
SG Cowen Intermediate Fixed Income Fund, Class A................. 6.37% 6.11% 6.14%
Lehman Intermediate Government/Corporate Index................... 8.44% 6.60% 6.86%
</TABLE>
<TABLE>
<CAPTION>
1 Year Inception
----------- -----------
<S> <C> <C>
SG Cowen Intermediate Fixed Income Fund, Class B........................... 5.76% 7.69%**
SG Cowen Intermediate Fixed Income Fund, Class I........................... 9.22% 8.12%***
</TABLE>
* January 20, 1993
** July 12, 1994
*** July 11, 1994
4
<PAGE>
INTERMEDIATE FUND
WHAT ARE THE FUND'S FEES AND EXPENSES?
These tables describe the fees and expenses you may pay in connection with
an investment in the Fund.
SHAREHOLDERS FEES are paid directly from your investment. The Fund may waive
or reduce sales charges. Please see the Statement of Additional Information for
additional information on sales charges.
<TABLE>
<CAPTION>
Share Class A B I
- ------------------------------------------------------------------ --------- --------- ------
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases (as a % of
offering price)................................................. 2.35%(1) None None
Maximum Contingent Deferred Sales Charge (Load) (as a % of
purchase price or redemption price, whichever is lower)......... None 3.00%(2) None
Maximum Sales Charge (Load) on Reinvested Dividends............... None None None
Redemption Fees(3)................................................ None None None
Exchange Fee...................................................... None None None
</TABLE>
ANNUAL FUND OPERATING EXPENSES are expenses that are deducted from the
Fund's assets.
<TABLE>
<CAPTION>
Share Class A B I
- -------------------------------------------------------------------------- ------ ------ ------
<S> <C> <C> <C>
Management Fees........................................................... 0.50% 0.50% 0.50%
Distribution and Service (12b-1) Fees..................................... 0.25% 0.50% 0.0%
Other Expenses............................................................ 0.91% 0.92% 0.91%
------ ------ ------
Total Operating Expenses(4)............................................... 1.66% 1.92% 1.41%
</TABLE>
EXAMPLE(5)
This example is intended to help you compare the cost of investing in the
Fund to the cost of investing in other mutual funds. We show the cumulative
amount of Fund expenses on a hypothetical investment of $10,000 assuming an
annual 5% return and the Fund's operating expenses remaining the same. Unless
otherwise indicated, the example assumes that you redeem all of your shares at
the end of each period. This is an example only, and does not represent future
expenses, which may be greater or less than those shown here.
<TABLE>
<CAPTION>
10
1 Year 3 Years 5 Years Years
------- ------- ------- -------
<S> <C> <C> <C> <C>
Class A................................... $ 400 $ 746 $1,116 $2,154
Class B (assumes redemption at end of
period)................................. $ 495 $ 803 $1,137 $2,243
Class B (assumes no redemption)........... $ 195 $ 603 $1,037 $2,243
Class I................................... $ 144 $ 446 $ 771 $1,691
</TABLE>
- ------------
(1) A purchase of Class A shares at $1 million or more will be made at net asset
value.
(2) If you redeem Class B shares during the first year after you buy them, the
shares will be subject to a contingent deferred sales charge of 3%. The
contingent deferred sales charge is 3% during the second year, 2% during the
third and fourth years, 1% during the fifth and sixth years, and 0%
thereafter.
(3) The Fund currently charges $10.00 per redemption for redemptions payable by
wire.
(4) The above table does not reflect SG Cowen's voluntary waiver of fees and
reimbursement of expenses. The total annual operating expenses after
considering reimbursement would have been .65%, .90% and .40% for Class A, B
and I, respectively.
(5) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here.
5
<PAGE>
SG COWEN GOVERNMENT SECURITIES FUND ("GOVERNMENT FUND")
WHAT ARE THE FUND'S GOALS?
The Fund seeks total return consisting of current income and appreciation of
capital primarily through investments in U.S. Government securities. Although
the Fund will strive to achieve these goals, there is no assurance that it will.
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
Under normal market conditions, at least 65% of the Fund's assets will be
invested in U.S. Government securities. The balance of the Fund's assets will be
invested in mortgage related securities rated in the four highest ratings
assigned by at least one Nationally Recognized Statistical Rating Organization
(NRSRO), or if unrated in securities determined by SG Cowen Asset Management to
be of comparable quality, when we buy them. The Fund may also purchase
securities on a when-issued basis.
Additional information about the Fund's investments is available in the
Fund's annual and semi-annual reports to shareholders and the statement of
additional information.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
Investing in any mutual fund involves risk, including the risk that you may
lose part or all of the money you invest. The price of Fund shares will increase
and decrease according to changes in the value of the Fund's investments.
The market value of fixed income obligations of the Fund will be affected by
general changes in interest rates, which will result in increases or decreases
in the value of the obligations held by the Fund. The market value of the
obligations held by one Fund can be expected to vary inversely to changes in
prevailing interest rates. You should also recognize that, in periods of
declining interest rates, the Fund's yield will tend to be somewhat higher than
prevailing market rates and, in periods of rising interest rates, a Fund's yield
will tend to be somewhat lower. Also, when interest rates are falling, the
inflow of net new money to a Fund from the continuous sale of its shares will
tend to be invested in instruments producing lower yields than the balance of
its portfolio, thereby reducing the Fund's current yield. In periods of rising
interest rates, the opposite can be expected to occur. In addition, securities
in which the Fund may invest may not yield as high a level of current income as
might be achieved by investing in securities with less liquidity, less
creditworthiness or longer maturities. For further discussion of risk, see "How
We Manage the Fund."
You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
investment program. You may wish to discuss this Fund with your financial
adviser to determine whether it is an appropriate choice for you.
6
<PAGE>
GOVERNMENT FUND
HOW HAS THE FUND PERFORMED?
THE BAR CHART AND TABLE below can help you evaluate the potential risks and
rewards of investing in the Fund. We show how returns have varied since the Fund
commenced operations, as well as the average annual returns of all of the Fund's
shares for one year, five years, and since inception -- compared to the
performance of the Lehman Aggregate Index. You should remember that unlike the
Fund, the Lehman Aggregate Index is unmanaged and doesn't include the costs of
buying, selling, and holding the securities. The Fund's past performance is not
necessarily an indication of how it will perform in the future.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
YEAR BY YEAR RETURNS
<S> <C>
Year-end returns
1993* 7.85%
1994 -2.80%
1995 15.83%
1996 1.92%
1997 8.57%
1998 10.49%
*Since inception
</TABLE>
During the years illustrated above, the Fund's highest return in one quarter
was +6.61% (9/30/98) and its lowest return in one calendar quarter (3/31/94) was
- -2.38%.
CALENDAR YEAR RETURNS (CLASS A)
The maximum Class A sales charge of 4.75%, assessed when you purchase
shares, is not reflected in the total returns noted above. If this fee were
included, the returns would be less than those shown. The average annual returns
shown below do include the sales charge.
AVERAGE ANNUAL RETURNS AS OF 12/31/98
<TABLE>
<CAPTION>
1 Year 5 Years Inception*
----------- ----------- -----------
<S> <C> <C> <C>
SG Cowen Government Securities Fund, Class A..................... 5.24% 5.58% 6.01%
Lehman Aggregate Index........................................... 8.69% 7.27% 7.57%
</TABLE>
<TABLE>
<CAPTION>
1 Year Inception
----------- -----------
<S> <C> <C>
SG Cowen Government Securities Fund, Class I............................... 10.32% 8.42%**
</TABLE>
* January 20, 1993
** July 11, 1994
There are currently no Class B shares outstanding.
7
<PAGE>
GOVERNMENT FUND
WHAT ARE THE FUND'S FEES AND EXPENSES?
These tables describe the fees and expenses you may pay in connection with
an investment in the Fund.
SHAREHOLDERS FEES are paid directly from your investment. The Fund may waive
or reduce sales charges. Please see the Statement of Additional Information for
additional information on sales charges.
<TABLE>
<CAPTION>
Share Class A B I
- ------------------------------------------------------------------ -------- ------ ------
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases (as a % of
offering price)................................................. 4.75%(1) None None
Maximum Contingent Deferred Sales Charge (Load) (as a % of
purchase price or redemption price, whichever is lower)......... None 5%(2) None
Maximum Sales Charge (Load) on Reinvested Dividends............... None None None
Redemption Fees(4)................................................ None None None
Exchange fee...................................................... None None None
</TABLE>
ANNUAL FUND OPERATING EXPENSES are expenses that are deducted from the
Fund's assets.
<TABLE>
<CAPTION>
Share Class A B I
- -------------------------------------------------------------------------- ------ ------ ------
<S> <C> <C> <C>
Management Fees........................................................... 0.60% 0.60% 0.60%
Distribution and Service (12b-1) Fees..................................... 0.25% 1.00% 0.0%
Other Expenses............................................................ 3.02% 3.02% 4.06%
------ ------ ------
Total Operating Expenses.................................................. 3.87% 4.62% 4.66%
</TABLE>
EXAMPLE(5)
This example is intended to help you compare the cost of investing in the
Fund to the cost of investing in other mutual funds. We show the cumulative
amount of Fund expenses on a hypothetical investment of $10,000 assuming an
annual 5% return and the Fund's operating expenses remaining the same. Unless
otherwise indicated, the example assumes that you redeem all of your shares at
the end of each period. This is an example only, and does not represent future
expenses, which may be greater or less than those shown here.
<TABLE>
<CAPTION>
10
1 Year 3 Years 5 Years Years
------- ------- ------- -------
<S> <C> <C> <C> <C>
Class A................................... $ 846 $1,600 $2,371 $4,376
Class B (assumes redemption at end of
period)................................. $ 963 $1,694 $2,532 $4,709
Class B (assumes no redemption)........... $ 463 $1,394 $2,332 $4,709
Class I................................... $ 467 $1,405 $2,350 $4,740
</TABLE>
- ------------
(1) A purchase of Class A shares at $1 million or more will be made at net asset
value.
(2) If you redeem Class B shares during the first year after you buy them, the
shares will be subject to a contingent deferred sales charge of 5%. The
contingent deferred sales charge is 4% during the second year, 3% during the
third and fourth years, 2% during the fifth year, 1% during the sixth year,
and 0% thereafter.
(3) The Fund currently charges $10.00 per redemption for redemptions payable by
wire.
8
<PAGE>
(4) The above table does not reflect SG Cowen's voluntary waiver of fees and
reimbursement of expenses. The total annual operating expenses after
considering a reimbursement waiver have been .40%, .90% and .40% for Class
A, B and I, respectively.
(5) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here.
HOW WE MANAGE THE FUNDS
OUR INVESTMENT STRATEGIES
We analyze economic and market conditions, seeking to identify the
securities that we think make the best investments in pursuit of our investment
objectives. We blend a number of investment strategies to manage the Funds.
SG COWEN INTERMEDIATE FIXED INCOME FUND
We seek to achieve the Fund's objectives by investing primarily in high
quality fixed income securities. If we anticipate a rise in interest rates, we
will reduce the weighted average maturity of the securities in which we invest,
but in no case will that be less than three years. On the other hand, if we
anticipate a decline in interest rates, we will lengthen the average weighted
maturity, but in no case will that be more than ten years. The maximum remaining
maturity of any investment held by the Fund is 40 years. We invest only in those
securities rated in the highest categories of a nationally recognized
statistical rating organization. If a security is not rated, we invest only in
those which we deem to be of comparable quality of those securities described in
the previous sentence. At least 65% of the Fund's assets will be invested in
securities rated in the two highest categories of the ratings assigned by at
least one Nationally Recognized Statistical Rating Organization (NRSRO), and all
of the Fund's assets will be invested in securities in the four highest ratings
assigned by at least one NRSRO, or if unrated in securities determined by SG
Cowen Asset Management to be of comparable quality, when we buy them.
THE SECURITIES IN WHICH WE TYPICALLY INVEST
The following is a description of the securities in which the Intermediate
Fund normally invests. Please see the Statement of Additional Information for
additional descriptions and risk information on these and all the securities in
which we invest.
U.S. GOVERNMENT SECURITIES
U.S. government securities include U.S. Treasury bills, notes and bonds, as
well as securities issued or guaranteed by U.S. government agencies or
instrumentalities, such as the Federal Home Loan Banks and Farmers Home
Administration. U.S. government securities includes zero coupon bonds which are
bonds that are sold for only a fraction of their par value and don't pay
interest. Instead, the bond increases to its full value when it matures.
CORPORATE BONDS
Corporate bonds are debt obligations issued by a corporation.
DEBENTURE
An unsecured bond backed by the creditworthiness of the issuer, but not by
the issuer's tangible assets.
9
<PAGE>
FLOATING RATE NOTES
A floating rate note is a debt obligation whose interest rate changes
whenever a specified benchmark interest rate, such as the federal funds rate,
changes.
MORTGAGE-BACKED SECURITIES
Fixed income securities that represent pools of mortgages, with investors
receiving principal and interest payments as the underlying mortgage loans are
paid back. Many are issued and guaranteed against default by the U.S. Government
or its agencies or instrumentalities, such as the Federal Home Loan Mortgage
Corporation, the Federal National Mortgage Association and the Government
National Mortgage Association. Others are issued by private financial
institutions, with some fully collateralized by certificates issued or
guaranteed by the government or its agencies or instrumentalities.
NON-CONVERTIBLE FIXED INCOME PREFERRED STOCK
Preferred stock is stock with a fixed dividend rate that must be paid before
the dividend of any common stock, pays a guaranteed rate of interest and cannot
be converted into common stock.
SG COWEN GOVERNMENT SECURITIES FUND
We seek to achieve the Fund's objectives by investing primarily in high
quality fixed income securities. If we anticipate a rise in interest rates, we
will reduce the average weighted maturity of the securities in which we invest,
and if we anticipate a decline in interest rates, we will lengthen the average
weighted maturity. Under normal market conditions, at least 65% of the Fund's
assets will be invested in U.S. government securities. The balance of the Fund's
assets will be invested in mortgage related securities rated in the four highest
ratings assigned by at least one NRSRO, or if unrated in securities determined
by SG Cowen Asset Management to be of comparable quality, when we buy them.
THE SECURITIES IN WHICH WE TYPICALLY INVEST
The following is a description of the securities in which the Government
Fund normally invests. Please see the Statement of Additional Information for
additional descriptions and risk information on these and all the securities in
which we invest.
U.S. GOVERNMENT SECURITIES
U.S. government securities include U.S. Treasury bills, notes and bonds, as
well as securities issued or guaranteed by U.S. government agencies or
instrumentalities, such as the Federal Home Loan Banks and Farmers Home
Administration. U.S. government securities includes zero coupon bonds which are
bonds that are sold for only a fraction of their par value and don't pay
interest. Instead, the bond increases to its full value when it matures.
MORTGAGE-BACKED SECURITIES
Fixed income securities that represent pools of mortgages, with investors
receiving principal and interest payments as the underlying mortgage loans are
paid back. Many are issued and guaranteed against default by the U.S. Government
or its agencies or instrumentalities, such as the Federal Home Loan Mortgage
Corporation, the Federal
10
<PAGE>
National Mortgage Association and the Government National Mortgage Association.
Others are issued by private financial institutions, with some fully
collateralized by certificates issued or guaranteed by the government or its
agencies or instrumentalities.
THE FOLLOWING APPLIES TO BOTH FUNDS:
PURCHASING SECURITIES ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS
Each Fund may buy or sell securities on a when-issued or delayed delivery
basis, paying for the securities before delivery or taking delivery at a later
date. When-issued securities, although authorized, have not yet been issued.
Buying and selling securities on a delayed delivery basis calls for the delivery
of the securities at an agreed upon date later than the scheduled date.
PORTFOLIO TURNOVER
Both Funds anticipate that their annual portfolio turnover will be less than
100%. A turnover rate of 100% would occur if a Fund sold and replaced within one
year securities valued at 100% of the Fund's net assets. While we do not intend
to engage in short term trading, we sell securities regardless of how long we
have held them in order to take advantage of investment opportunities or to take
advantage of changing economic conditions. We conduct ongoing analysis of the
markets to determine what investments are appropriate for the current economic
and investment environment and then act on that analysis. The Funds do not
anticipate that portfolio turnover will affect the performance or have any tax
consequences for their shareholders.
THE RISKS OF INVESTING IN THE FUND
Investing in any mutual fund involves risk, including the risk that you may
receive little or no return on your investment, and the risk that you may lose
part or all of the money you invest. Therefore, before you invest in the Fund
you should carefully evaluate the risks. Because of the nature of the Fund's
investment, you should consider an investment in the Fund to be a long-term
investment that typically provides the best results when held for a number of
years. The following are the chief risks you assume when investing in the Fund:
(1) Market risk is the risk that all or a majority of the securities in a
certain market-- like the stock or bond market-- will decline in value because
of factors such as economic conditions, future expectations or investor
confidence; (2) Liquidity risk is the possibility that securities cannot be
readily sold, or can only be sold at a price significantly lower than their
broadly recognized value; and (3) Industry and security risk is the risk that
the value of securities in a particular industry or the value of an individual
stock or bond will decline because of changing expectations for the performance
of that industry or for the individual company issuing the stock or bond.
YEAR 2000 RISKS
Like other mutual funds, the Funds could be adversely affected if the
computer systems used by the Investment Adviser and other service providers do
not properly process and calculate date-related information after January 1,
2000. This is commonly known as the "Year 2000 Problem." This problem may also
adversely affect the issues in which the Fund invests. The Investment Adviser is
taking steps that it believes are reasonably designed to address the Year 2000
Problem with respect to the computer systems that it uses, and to obtain
satisfactory assurances that comparable steps are being taken by the Funds'
other major service providers. At this time, however, there can be no assurance
that these steps will be sufficient to avoid any adverse impact on the Funds.
11
<PAGE>
WHO MANAGES THE FUNDS
The officers of each Fund conduct the Fund's daily business operations,
subject to the supervision of the Fund's Board of Directors.
INVESTMENT ADVISER
From each Fund's commencement of operations until July 1, 1998, Cowen & Co
("Cowen") served as investment manager to the Fund. On July 1, 1998, Cowen's
business was combined with Societe Generale Securities Corporation, a subsidiary
of Societe Generale ("SG"), to form SG Cowen Securities Corporation ("SG
Cowen"). SG, a leading international commercial and investment bank established
in 1864, has a global network of offices in over 80 countries. Since July 1,
1998, SG Cowen, through its investment management division, SG Cowen Asset
Management, has served as the new investment adviser to the Fund, with the
existing investment management personnel of Cowen continuing to provide
investment management services to the Fund for the same management fee described
below. SG Cowen, which currently manages approximately $6 billion in assets,
manages the Fund's business affairs, including being responsible for the Fund's
investment program, and provides daily administrative services.
MANAGEMENT FEES
For managing the Intermediate Fund and the Government Fund and their
investments, the adviser is paid a yearly fee of 0.50% and 0.60%, respectively,
of daily net asset value.
PORTFOLIO MANAGER
Alan E. Koepplin is a Senior Investment Officer and is responsible for the
daily management of each Fund's portfolio. He has had such responsibility since
the Funds commenced operations in January, 1993. He has served as a Director and
Portfolio Manager of SG Cowen since July 1, 1998. Prior thereto he was a
Director and Portfolio Manager of Cowen Asset Management.
ABOUT YOUR ACCOUNT
You can choose from a number of share classes. Because each share class has
a different combination of sales charges, fees, and other features, you should
consult your financial adviser to determine which class best suits your
investment goals and time frame.
CHOOSING A SHARE CLASS
CLASS A Class A shares have an up-front sales charge that you pay when you
buy the shares. If you invest $50,000 or more your front-end sales charge will
be reduced. You may qualify for other reduced sales charges, as described in
"How To Reduce Your Sales Charges," and under certain circumstances the sales
charge may be waived; please see the Fund's Statement of Additional Information.
Class A shares are also subject to an annual 12b-1 fee no greater than 0.25% of
the Fund's average daily net assets, which is lower than the 12b-1 fee for Class
B shares. The 12b-1 plan allows the Fund to pay distribution fees for the sale
and distribution of its shares. Class A shares are not subject to a contingent
deferred sales charge. The offering price includes a front-end sales charge.
12
<PAGE>
CLASS A SHARES FEES
INTERMEDIATE FUND
<TABLE>
<CAPTION>
Sales Charge as a Sales Charge as a
Percentage of the Percentage of the Dealer
Shares Purchased in Single Transaction Public Offering Price Net Amount Invested Reallowance
- ----------------------------------------- --------------------- ----------------------- ---------------
<S> <C> <C> <C>
Up to $49,999............................ 2.35% 2.40% 2.00%
$50,000 to $99,999....................... 2.25% 2.30% 1.90%
$100,000 to $249,999..................... 2.00% 2.04% 1.75%
$250,000 to $499,999..................... 1.75% 1.78% 1.50%
$500,000 to $999,999..................... 1.45% 1.47% 1.25%
$1,000,000 to $2,999,999................. 0% 0% 0.60%
$3,000,000 to $3,999,999*................ 0% 0% 0.30%
</TABLE>
GOVERNMENT FUND
<TABLE>
<CAPTION>
Sales charge as Sales charge as % Dealer's commission
% of offering of amount as % of offering
Amount of purchase price invested price
- --------------------------------------------- --------------- ----------------- ---------------------
<S> <C> <C> <C>
Up to $49, 999............................... 4.75% 5.00% 4.00%
$50,000 to $99,999........................... 4.00% 4.17% 3.25%
$100,000 to $249,999......................... 3.75% 3.90% 3.00%
$250,000 to $499,999......................... 2.50% 2.56% 2.00%
$500,000 to $999,999......................... 2.00% 2.04% 1.50%
$1,000,000 to $2,999,999..................... 0% 0% 1.00%
$3,000,000 to $3,999,999*.................... 0% 0% 0.50%
</TABLE>
*If you invest $4 million or more, you will receive Class I shares, which
are not subject to any sales charge or service fee.
CLASS B Class B shares have no up-front sales charge, so the full amount of
your purchase is invested in the Fund. However, you will pay a contingent
deferred sales charge if you redeem your shares within six years after you buy
them. If you redeem Class B shares of Intermediate Fund during the first year
after you buy them, the shares will be subject to a contingent deferred sales
charge of 3%. The contingent deferred sales charge is 3% during the second year,
2% during the third and fourth years, 1% during the fifth and sixth years, and
0% thereafter. If you redeem Class B shares of Government Fund during the first
year after you buy them, the shares will be subject to a contingent deferred
sales charge of 5%. The contingent deferred sales charge is 4% during the second
year, 3% during the third and fourth years, 2% during the fifth year, 1% during
the sixth year, and 0% thereafter. Under certain circumstances the contingent
deferred sales charge may be waived; please see the Fund's Statement of
Additional Information. Class B Shares of Intermediate Fund are subject to a
service fee at the annual rate of 0.25%, and a distribution fee at the annual
rate of 0.25%, and Class B shares of Government Fund are subject to a service
fee at the annual rate of 0.25%, and a distribution fee at the annual rate of
0.75%, of the value of the respective Fund's average daily net assets
attributable to this Class. The 12b-1 plan allows each Fund to pay distribution
fees for the sale and distribution of its shares.
13
<PAGE>
CLASS I Class I shares have no up-front sales charge, so the full amount of
your purchase is invested in the Funds. Class I shares are not subject to a
contingent deferred sales charge or to an annual 12b-1 fee. Class I shares may
be referred to as institutional shares. They are available exclusively to
certain types of investors such as employee benefit plans of selected dealers of
the Funds, charitable organizations, investment advisory and consulting clients
of SG Cowen, accounts as to which a broker, registered investment adviser, or
bank charges an account management fee and certain omnibus accounts. Please
contact your financial adviser for further information or see the Fund's
Statement of Additional Information.
HOW TO REDUCE YOUR SALES CHARGE
We offer a number of ways to reduce or eliminate the sales charge on shares.
Please refer to the Funds' Statement of Additional Information for detailed
information and eligibility requirements. You can also get additional
information from your financial adviser. You or your financial adviser must
notify us at the time you purchase shares if you are eligible for any of these
programs.
PROGRAM
<TABLE>
<S> <C>
Letter of intent You can use a Letter of Intent to combine all your purchases of
Class A shares in selected SG Cowen Funds over a 13-month period to
qualify for reduced front-end sales charges.
Rights of accumulation You may also combine your previous purchases of Class A shares in
the Fund along with the purchase of Class A shares of selected
other SG Cowen Funds to reduce your front-end sales charges.
Reinvestment of Up to 30 days after you redeem your Class A shares, you can
redeemed shares reinvest the proceeds without paying a front-end sales charge. You
may use this privilege only once.
Certain individuals, Qualified individuals, organizations, retirement and profit sharing
employees of SG Cowen, plans, and others may qualify for the purchase of Class A shares
401(k) and other without a sales charge.
retirement plans
Please see your financial adviser to determine whether you qualify for any of these
programs, or consult the Statement of Additional Information.
</TABLE>
HOW TO BUY SHARES
Your financial adviser can handle all the details of purchasing shares,
including opening an account. You can also invest in the Fund by mail. Complete
an investment slip indicating the class of shares you wish to purchase, and mail
it with your check payable to the Fund to: DST Systems, Inc. ("DST"), 210 West
10th Street, Kansas City, MO 64105. If you are making an initial purchase by
mail, you must include a completed Investment Application, or an appropriate
retirement plan application if you are opening a retirement account, with your
check. If you want to purchase shares by Federal wire, contact the Fund directly
at 1-800-309-1111. There is no charge for establishing or maintaining an
account.
14
<PAGE>
You can open an account with an initial investment of $1,000 and make
additional investments at any time for as little as $100. The price you pay for
shares will depend on when we receive your purchase order. If you are buying
shares in an IRA, or a retirement plan for self-employed persons, the minimum
initial purchase is $500, and additional investments of only $50 after that.
If your order is received before 4:15 p.m. Eastern time on a business day,
you will pay that day's closing share price which is based on the Funds' net
asset value. If your order is received after 4:15 p.m., you will pay the next
business day's price. A business day is any day that the New York Stock Exchange
is open for business. We reserve the right to reject any purchase order.
Normally, we determine the Funds' net asset value (NAV) per share as of 4:15
p.m. Eastern time each day the New York Stock Exchange is open for business. We
calculate the net asset value per share by adding the market value of all the
securities and other assets in the Fund's portfolio, deducting all liabilities,
and dividing the resulting number by the number of shares outstanding. We price
securities and other assets for which market quotations are available at their
market value. Any short-term investments which have a maturity of less than 60
days are priced at amortized cost.
HOW TO SELL SHARES
You can sell your shares back to each Fund by mail or by contacting your
financial adviser. Generally, SG Cowen and other authorized dealers will act on
your oral instructions to redeem shares. If you send a written order to DST to
redeem shares, your request must be signed by all owners of the account, and you
must include a signature guarantee for each owner. If you hold your shares in
certificates, you must submit the certificates with your request to sell the
shares.
When a properly completed request to sell or exchange shares is received by
4:15 p.m. Eastern time on any day the New York Stock Exchange is open for
business, you will receive the net asset value as determined on the business day
your request is received. We will pay you normally within three business days,
but no later than seven days after your request to sell your shares is received.
If you purchased your shares by check, we will wait until your check has
cleared, which can take up to 15 days, before we send you the proceeds from the
sale of your shares.
ACCOUNT MINIMUM
If as a result of redemption your account balance falls below the required
minimum amount of $500, you will have 30 days to raise the balance to the
minimum after we notify you in writing. If your account is not at the minimum by
the required time, we may redeem it.
SPECIAL SERVICES
To help make investing with us as easy as possible, and to help you build
your investments, we offer the following special services. You can get further
information about these programs by calling Shareholder Services at
1-800-309-1111.
- - You can exchange all or part of your shares for the same class of shares in
certain other SG Cowen funds without paying a sales charge. When you exchange
shares, you are purchasing shares in another fund, so you should be sure to
get a copy of the Fund's prospectus and read it carefully before buying shares
through an exchange. For income tax purposes, an exchange is treated as a
concurrent sale and purchase and any gain on the transaction may be subject to
income tax. Therefore, you should consult your tax adviser about the tax
consequences of any exchange.
15
<PAGE>
- - You can automatically invest regular monthly investments of $100 or more
directly from your checking account. No fee is charged for these automatic
transactions, but a service charge of $10.00 will be deducted for checks
returned for insufficient funds. The Funds reserve the right upon notification
to all participants, to impose a fee in the future.
- - You may buy shares in the Funds for your individual or group retirement plan,
including your Individual Retirement Account (IRA), Roth IRA and Education
IRA.
- - Through our Systematic Withdrawal Plan, you can arrange a regular monthly,
quarterly, or annual payment from your account made to you or someone you
designate. If the value of your account is $10,000 or more, you can make
withdrawals of at least $50 monthly.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund declares income dividends daily and pays them monthly, while any
net realized capital gains are generally distributed annually. We automatically
reinvest all dividends and any capital gains, unless you tell us otherwise.
Tax laws are subject to change, so we urge you to consult your tax adviser
about your particular tax situation and how it might be affected by current tax
law. The tax status of your dividends from a Fund is not affected by whether you
reinvest your dividends or receive them in cash. Dividends from short-term
capital gains and net investment income are generally taxable as ordinary
income; dividends from long-term capital gains are taxable as capital gains. In
addition, you may be subject to state and local taxes on distributions.
We will send you a statement each year detailing the amount and tax status
of all dividends and capital gains that you were paid during the prior year.
16
<PAGE>
FINANCIAL HIGHLIGHTS
These financial highlights tables are intended to help you understand each
Fund's financial performance for the past five years. All information reflects
financial results for a single share in each Fund. This information has been
audited by Ernst & Young LLP, whose report, along with the Fund's financial
statements, is incorporated by reference in the Fund's annual report, which is
available upon request by calling 1-800-309-1111.
<TABLE>
<CAPTION>
SG Cowen Intermediate
Fixed Income Fund - Class A
-----------------------------------------------------
Year Ended November 30,
-----------------------------------------------------
1998 1997 1996 1995 1994
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of Year............................................. $ 9.47 $ 9.47 $ 9.71 $ 9.12 $ 9.95
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Investment Income - Net....................................... 0.53 0.59 0.63 0.67 0.51
Net Realized and Unrealized Gains (Losses) on Investments..... 0.33 - (0.15) 0.59 (0.68)
--------- --------- --------- --------- ---------
Net from Investment Operations................................ 0.86 0.59 0.48 1.26 (0.17)
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.......................... (0.53) (0.59) (0.63) (0.67) (0.53)
Distributions from Net Realized Gains on Investments.......... - - (0.09) - (0.13)
--------- --------- --------- --------- ---------
Total Distributions........................................... (0.53) (0.59) (0.72) (0.67) (0.66)
--------- --------- --------- --------- ---------
NET ASSET VALUE
End of Year................................................... $ 9.80 $ 9.47 $ 9.47 $ 9.71 $ 9.12
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total Return(5)................................................. 9.38% 6.47% 5.21% 14.22% (1.77)%
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 omitted)...................................... $ 7,671 $ 9,341 $ 11,885 $ 14,667 $ 2,836
Ratio of Expenses to Average Net Assets....................... 0.65% 0.65% 0.59% 0.47% 0.12%
Ratio of Investment Income - Net to Average Net Assets........ 5.58% 6.29% 6.61% 6.90% 5.41%
Decrease Reflected on Above Ratios Due to:
Investment Management and Service Fees Waived............... 0.50% 0.50% 0.50% 0.50% 0.63%
Other Expenses Waived or Absorbed........................... 0.51% 0.60% 0.52% 0.86% 3.43%
Portfolio Turnover Rate....................................... 64% 92% 110% 264% 159%
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
SG Cowen Intermediate Fixed
Income Fund - Class B
---------------------------------------------------------
Year Ended Period From
November 30, 7/12/94(4)
------------------------------------------ Through
1998 1997 1996 1995 11/30/94
--------- --------- --------- --------- -------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of Period................................................ $ 9.54 $ 9.54 $ 9.78 $ 9.17 $ 9.32(1)
--------- --------- --------- --------- ------
INCOME FROM INVESTMENT OPERATIONS
Investment Income - Net............................................ 0.51 0.53 0.61 0.65 0.20
Net Realized and Unrealized Gains (Losses) on Investments.......... 0.33 - (0.15) 0.61 (0.15)
--------- --------- --------- --------- ------
Net from Investment Operations..................................... 0.84 0.53 0.46 1.26 0.05
--------- --------- --------- --------- ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income............................... (0.51) (0.53) (0.61) (0.65) (0.20)
Distributions from Net Realized Gains on Investments............... - - (0.09) - -
--------- --------- --------- --------- ------
Total Distributions................................................ (0.51) (0.53) (0.70) (0.65) (0.20)
--------- --------- --------- --------- ------
NET ASSET VALUE
End of Period...................................................... $ 9.87 $ 9.54 $ 9.54 $ 9.78 $ 9.17
--------- --------- --------- --------- ------
--------- --------- --------- --------- ------
Total Return(5)...................................................... 9.07% 6.21% 4.96% 14.12% 1.25%(2)
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 omitted)........................................... $ 591 $ 630 $ 769 $ 577 $ 313
Ratio of Expenses to Average Net Assets............................ 0.90% 0.90% 0.85% 0.68% 0.19%(3)
Ratio of Investment Income - Net to Average Net Assets............. 5.33% 6.03% 6.40% 6.79% 2.15%(3)
Decrease Reflected on Above Ratios Due to:
Investment Management, Service and Distribution Fees Waived...... 0.50% 0.50% 0.50% 0.50% 0.18%(3)
Other Expenses Waived or Absorbed................................ 0.52% 0.54% 0.54% 0.46% 1.25%(3)
Portfolio Turnover Rate............................................ 64% 92% 110% 264% 159%
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
SG Cowen Intermediate Fixed
Income Fund - Class I
---------------------------------------------------------
Year Ended Period From
November 30, 7/11/94(4)
------------------------------------------ Through
1998 1997 1996 1995 11/30/94
--------- --------- --------- --------- -------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of Period............................................. $ 9.44 $ 9.44 $ 9.68 $ 9.10 $ 9.34(1)
--------- --------- --------- --------- ------
INCOME FROM INVESTMENT OPERATIONS
Investment Income - Net......................................... 0.55 0.61 0.65 0.69 0.23
Net Realized and Unrealized Gains (Losses) on Investments....... 0.33 - (0.15) 0.58 (0.24)
--------- --------- --------- --------- ------
Net from Investment Operations.................................. 0.88 0.61 0.50 1.27 (0.01)
--------- --------- --------- --------- ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income............................ (0.55) (0.61) (0.65) (0.69) (0.23)
Distributions from Net Realized Gains on Investments............ - - (0.09) - -
--------- --------- --------- --------- ------
Total Distributions............................................. (0.55) (0.61) (0.74) (0.69) (0.23)
--------- --------- --------- --------- ------
NET ASSET VALUE
End of Period................................................... $ 9.77 $ 9.44 $ 9.44 $ 9.68 $ 9.10
--------- --------- --------- --------- ------
--------- --------- --------- --------- ------
Total Return(5)................................................... 9.65% 6.74% 5.46% 14.41% (0.36%)(2)
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 omitted)........................................ $ 437 $ 701 $ 1,745 $ 1,872 $ 565
Ratio of Expenses to Average Net Assets......................... 0.40% 0.40% 0.35% 0.20% -
Ratio of Investment Income - Net to Average Net Assets.......... 5.87% 6.63% 6.87% 7.23% 1.98 %(3)
Decrease Reflected on Above Ratios Due to:
Investment Management Fee Waived.............................. 0.50% 0.50% 0.50% 0.50% 0.16 %(3)
Other Expenses Waived or Absorbed............................. 0.51% 0.50% 0.42% 0.97% 1.87 %(3)
Portfolio Turnover Rate 64% 92% 110% 264% 159 %
</TABLE>
- ---------------
(1) Based upon the Class A Net Asset Value on the day prior to commencement of
distribution
(2) Annualized
(3) Not Annualized
(4) Commencement of Distribution
(5) Exclusive of Sales Charges
19
<PAGE>
<TABLE>
<CAPTION>
SG Cowen Government Securities Fund - Class A
-----------------------------------------------------
Year Ended November 30,
-----------------------------------------------------
1998 1997 1996 1995 1994
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of Year....................................................... $ 9.58 $ 9.59 $ 9.83 $ 9.17 $ 10.11
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Investment Income - Net................................................. 0.55 0.61 0.64 0.69 0.52
Net Realized and Unrealized Gains (Losses) on Investments............... 0.48 (0.01) (0.24) 0.66 (0.84)
--------- --------- --------- --------- ---------
Net from Investment Operations.......................................... 1.03 0.60 0.40 1.35 (0.32)
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.................................... (0.55) (0.61) (0.64) (0.69) (0.56)
Distributions from Net Realized Gains on Investments.................... (0.03) - - - (0.06)
--------- --------- --------- --------- ---------
Total Distributions..................................................... (0.58) (0.61) (0.64) (0.69) (0.62)
--------- --------- --------- --------- ---------
NET ASSET VALUE
End of Year............................................................. $ 10.03 $ 9.58 $ 9.59 $ 9.83 $ 9.17
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total Return(5)........................................................... 11.13% 6.55% 4.34% 15.23% (3.24%)
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 Omitted)................................................ $ 1,542 $ 3,433 $ 2,631 $ 3,945 $ 488
Ratio of Expenses to Average Net Assets................................. 0.40% 0.40% 0.34% 0.22% -
Ratio of Investment Income - Net to Average Net Assets.................. 5.71% 6.47% 6.72% 7.08% 5.24%
Decrease Reflected on Above Ratios Due to:
Investment Management and Service Fees Waived......................... 0.85% 0.85% 0.85% 0.85% 0.78%
Other Expenses Waived or Absorbed..................................... 2.62% 2.70% 2.72% 3.63% 11.85%
Portfolio Turnover Rate................................................. 69% 184% 107% 289% 210%
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
SG Cowen Government
Securities Fund -- Class I
---------------------------------------------------------
Period From
Year Ended November 30, 7/11/94(4)
------------------------------------------ Through
1998 1997 1996 1995 11/30/94
--------- --------- --------- --------- -------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of Period.............................................. $ 9.70 $ 9.71 $ 9.94 $ 9.17 $ 9.45(1)
--------- --------- --------- --------- ------
INCOME FROM INVESTMENT OPERATIONS
Investment Income - Net.......................................... 0.56 0.62 0.65 0.70 0.22
Net Realized and Unrealized Gains (Losses) on Investments........ 0.48 (0.01) (0.23) 0.77 (0.28)
--------- --------- --------- --------- ------
Net from Investment Operations................................... 1.04 0.61 0.42 1.47 (0.06)
--------- --------- --------- --------- ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income............................. (0.56) (0.62) (0.65) (0.70) (0.22)
Distributions from Net Realized Gains on Investments............. (0.03) - - - -
--------- --------- --------- --------- ------
Total Distributions.............................................. (0.59) (0.62) (0.65) (0.70) (0.22)
--------- --------- --------- --------- ------
NET ASSET VALUE
End of Period.................................................... $ 10.15 $ 9.70 $ 9.71 $ 9.94 $ 9.17
--------- --------- --------- --------- ------
--------- --------- --------- --------- ------
Total Return(5).................................................... 11.04% 6.55% 4.48% 16.52% (1.57%)(2)
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 omitted)......................................... $ 127 $ 63 $ 93 $ 45 $ 13
Ratio of Expenses to Average Net Assets.......................... 0.40% 0.40% 0.36% 0.20% -
Ratio of Investment Income - Net to Average Net Assets........... 5.60% 6.49% 6.75% 7.12% 2.42%(3)
Decrease Reflected on Above Ratios Due to:
Investment Management Fees Waived.............................. 0.60% 0.60% 0.60% 0.60% 0.24%(3)
Other Expenses Waived or Absorbed.............................. 3.66% 3.06% 3.14% 5.14% 6.26%(3)
Portfolio Turnover Rate.......................................... 69% 184% 107% 289% 210%
</TABLE>
21
<PAGE>
(This page has been left blank intentionally.)
22
<PAGE>
Additional information about the Fund's investments is available in the
Fund's annual and semi-annual reports to shareholders. In the Fund's annual
report, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during its last
fiscal year. You can find more detailed information about the Fund in its
current Statement of Additional Information, which we have filed electronically
with the Securities and Exchange Commission (SEC) and which is legally a part of
this prospectus. If you want a free copy of the Statement of Additional
Information, the annual or semi-annual report, or if you have any questions
about investing in this Fund, you can write to us at Financial Square, New York,
NY 10005, or Funds Distributor Inc., the Fund's distributor, at 60 State Street,
Boston, MA 02109, or call toll-free 1-800-309-1111.
You can find reports and other information about the Fund on the SEC Web
site (http://www.sec.gov), or you can get copies of this information, after
payment of a duplicating fee, by writing to the Public Reference Section of the
SEC, Washington, D.C. 20549-6009. Information about the Fund, including the
Statement of Additional Information, can be reviewed and copied at the
Securities and Exchange Commission's Public Reference Room in Washington, D. C.
You can get information on the public reference room by calling the SEC at
1-800-SEC-0330.
Investment Company Act file number: 811-5388
