<PAGE>
As filed with the Securities and Exchange
Commission on April 30, 1998
File No. 33-20478
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 12
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
Amendment No. 15
SGY FUNDS, INC.
(formerly Yamaichi Funds, Inc.)
(Exact Name of Registrant as Specified in Charter)
30 Wall Street, New York, New York 10005
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code: 212-248-8220
Edward S. Burke
SG Pacific Asset Management, Inc.
30 Wall Street, New York, New York 10005
(Name and address of agent for service)
It is proposed that this filing will become effective (Check appropriate line)
immediately upon filing pursuant to paragraph (b)
on (date) pursuant to paragraph (b)
X 60 days after filing pursuant to paragraph (a)(1)
on (date) pursuant to paragraph (a)(1)
75 days after filing pursuant to paragraph (a)(2)
on (date) pursuant to paragraph (a)(2) 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.
<PAGE>
CROSS REFERENCE SHEET
(as required by Rule 404(c))
N-1A Item No. Location in Prospectuses
(Caption)
PART A
Item 1. Cover Page Cover Page
Item 2. Synopsis Expense Information
Item 3. Financial Highlights Financial Highlights
Item 4. General Description of Cover Page; Investment
Registrant Objectives and
Policies
Item 5. Management of the Fund Management of the Fund
Item 5a. Management's Discussion of Management's Discussion of
Fund Performance Fund Performance
Item 6. Capital Stock and Other Dividends, Distribution
Securities and Taxes; Description of
Common Stock
Item 7. Purchase of Securities Purchase of Shares
Being Offered of Shares
Item 8. Redemption or Repurchase Redemption of Shares
Item 9. Pending Legal Proceedings Not applicable
PART B Location in Statements
Of Additional Information
(Caption)
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and Management
History
Item 13. Investment Objectives and Investment Objectives
Policies and Policies; Investment
Restrictions
Item 14. Management of the Fund Management
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Item 15. Control Persons and Management
Principal Holders of
Securities
Item 16. Investment Advisory and Management
Other Services
Item 17. Brokerage Allocation and Portfolio Transactions
Other Practices and Brokerage
Item 18. Capital Stock and Other Not applicable.
Securities
Item 19. Purchase, Redemption and Distribution
of Pricing of Shares
Being Offered
Item 20. Tax Status Taxes
Item 21. Underwriters Distribution
Item 22. Calculation of Performance Performance Information
Data
Item 23. Financial Statements Financial Statements
Part C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to this Registration Statement.
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SGY Global Fund
30 Wall Street
New York, New York 10005
For Account Information Call: 1-800-327-6143
SGY Global Fund (the "Fund"), a portfolio of SGY Funds, Inc. (the
"Company"), seeks to obtain long-term growth of capital primarily through
investment in equity securities of companies in foreign countries and in the
United States. See "Investment Objective and Policies". The Company is an
open-end diversified management investment company or "mutual fund", which
offers investors the opportunity to invest in different portfolios with
different investment objectives and policies.
SG Pacific Asset Management, Inc. (the "Investment Manager") acts as
investment manager of the Fund. The Fund is sold at its net asset value
without any initial or deferred sales charge. The Investment Manager receives
a management fee from the Fund of 1% of average daily net assets on an annual
basis. This Prospectus concisely sets forth information a prospective
investor should know about the Fund before investing. A "Statement of
Additional Information" dated May 1, 1998 containing additional information
about the Fund has been filed with the Securities and Exchange Commission and
is available upon request and without charge by calling or writing the Fund at
the above address. The Statement of Additional Information is incorporated by
reference into this Prospectus in its entirety.
Investors are advised to read this Prospectus and retain it for future
reference.
- ---------------------------------------------------------------
SG PACIFIC ASSET MANAGEMENT, INC.
Investment Manager
- ---------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
Prospectus dated May 1, 1998
<PAGE>
Expense Information
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchase
(as a percentage of offering price)..................None
Annual Fund Operating Expenses (as a percentage of average net
assets):
Management Fees......................................1.00%
Shareholder Servicing Agent & Custodian..............0.80%
Other Expenses ......................................0.40%
=====
Total Fund Operating Expenses (annualized
as a percentage of average net assets):..............2.20%
Example:
You would pay the following expenses on a $1,000 investment,
assuming (i) 5% annual return and (ii) redemption at the end of
each of each time period:
1 year 3 years 5 years 10 years
$23.........$73.......$128........$291
The purpose of this table is to assist the investor in
understanding the various costs and expenses of an investment in
the Fund. This example is based on a management fee of 1%
average net assets and an estimate of other expenses based on
newly negotiated contracts of the Fund and not the expense
information that appears in the financial statements of the Fund.
Reference is made to "Purchase of Shares" and "Management of the
Fund" for a description of the items in the table entitled
"Maximum Sales Load" and "Management Fees". THIS EXAMPLE SHOULD
NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES.
THE ACTUAL EXPENSES OF THE FUND MAY BE GREATER OR LESS THAN THOSE
SHOWN.
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Financial Highlights
The following table provides per-share information derived
from the Fund's financial statements relating to income from
investment operations, distributions, total return and other
supplemental information. [In February, 1998, the largest
shareholder of the Fund notified the Fund of its plan to redeem
its shares of the Fund and on February 11, 1998 all the
shareholders of the Fund redeemed their shares at a net asset
value of $9.02 per share.] The information contained in the
table has been audited by Coopers & Lybrand, the Fund's
independent accountants, whose report thereon, along with the
Fund's Financial Statements and related notes, appears in the
Fund's Statement of Additional Information.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year Year Year Year Year Year Year Year Year Period
Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended***
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
Per Share Operating
Performance:
Net asset value,
beginning of period.....$8.97 $9.32 $8.37 $9.33 $7.35 $7.93 $7.53 $9.95 $9.76 $9.95
----- ----- ----- ----- ----- ------ ------ ------ ------ -----
Net investment income
(loss).................. (0.14) (0.01) (0.01) (0.05) 0.04 0.06 0.04 0.08# 0.11 0.10
Net realized gain (loss)
on investments and
foreign currency........ 1.52 0.92 1.51 (0.56) 2.42 (0.24) 1.00 (2.01) 1.33 (0.21)
------ ------ ------ ------ ----- ------- ---- ------ ---- ------
Total from investment
operations.............. 1.38 0.91 1.50 (0.61) 2.46 (0.18) 1.04 (1.93) 1.44 (0.11)
Distributions to
shareholders from:
Capital................. ------ (1.26) ------ ------ ------ (0.34) (0.60) (0.32) ------ ------
Net Investment Income... ------ ------ ------ ------ (0.04) (0.06) (0.04) (0.17) ------ (0.08)
Funds in excess of
Net Investment Income... ------ ------ ------ ------ (0.02) ------ ------ ------ ------ ------
Net realized gain on
investments............. (1.27) ------ (0.55) (0.35) (0.42) ------ ------ ----- (1.25) ------
Net asset value:
End of Period........... $9.08 $8.97 $9.32 $8.37 $9.33 $7.35 $7.93 $7.53 $9.95 $9.76
--------------------------------------------------------------------------------------
Total Return@........... 15.72% 10.55% 17.22% (6.40%) 33.62% (2.28%) 14.22% (18.90%) 14.75% (1.11%)
--------------------------------------------------------------------------------------
Ratio of management fee
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to average net assets... 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%*
Ratio of expenses to
average net assets before
reduction............... --- --- --- 2.10% -- -- -- -- -- --
Ratio of expenses to
average net assets...... 2.81% 2.37% 1.93% 2.04% 1.75% 1.78% 1.94% 1.58% 1.73% 1.92%*
Ratio of net investment
income/(loss) to average
net assets............... (1.22) (0.13%) (0.14%) (0.37%) 0.35% 0.77% 0.48% 0.98% 0.64% 1.86%
Portfolio turnover
rate.................... 101.46% 65.07% 73.99% 70.13% 75.50% 58.20% 47.40% 99.20% 136.00% 68.70%
Shares outstanding at end
of period (000 omitted). 1,118 1,483 2,164 2,249 3,608 6,975 7,397 8,696 5,535 10,630
Average Commission Rate
Paid Per Share** .000881 .001608
</TABLE>
*Annualized
@Represents the aggregate total return for the period indicated and does not
reflect any applicable sales charges.
#Based on average shares outstanding during this period
** For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share
for security trades on which commissions are Charged. This amount may
vary from period to period and fund to fund depending on
the mix of trades executed in various markets where trading practices and
commission rate structures may differ.
*** The Fund commenced operations on June 10, 1988.
4
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INVESTMENT OBJECTIVE AND POLICIES
The objective of the SGY Global Fund (the "Fund") is to
obtain long term growth of capital primarily through investment
in equity securities of companies in foreign countries and in the
United States. Any income achieved is incidental to the Fund's
objective of long-term growth of capital. There can be no
assurance that the Fund will be able to achieve its investment
objective.
The Fund will seek to achieve its objective through
investments in a diversified portfolio of securities which will
consist primarily of equity securities for which there are market
quotations readily available. For purposes of this Prospectus,
"equity securities" include all types of common stock, debt
instruments and preferred stock convertible into common stock,
warrants and units of various types of securities including
warrants. In addition, the Fund may invest in long-term debt
securities. Investments in debt securities (other than
short-term debt securities) will generally be made only when the
Investment Manager determines that the potential for long-term
capital appreciation on debt securities equals or exceeds the
return on equity securities. In circumstances where the
Investment Manager believes that equity markets generally are
overpriced and investments in short-term fixed income securities
are desirable to preserve capital, the Fund may, for temporary
defensive purposes, invest a portion or all its portfolio in such
securities.
To the extent the Fund invests in debt securities for capital
growth, the Fund will purchase investment grade debt with
maturities of more than one year. The debt securities in which
the Fund may invest will be rated "Baa" or better by Moody's
Investor Service, Inc. ("Moody's") or "BBB" or better by Standard
and Poor's Corporation ("S&P"), or will be obligations of
comparable quality as determined by the Investment Manager. Debt
securities of non-United States companies and foreign governments
are not generally rated by Moody's or S&P.
In circumstances when the Investment Manager believes that
equity markets are generally overpriced and investments in
short-term fixed income securities are desirable to preserve
capital, the Fund may, for temporary defensive purposes, invest a
portion or all of its portfolio in: short-term debt securities of
United States and foreign governments and their agencies,
instrumentalities or municipalities; corporate obligations of
United States and foreign issuers; or money market instruments
denominated in United States dollars and/or foreign currency.
The value of debt securities in which the Fund may invest
generally varies inversely with changes in prevailing interest
rates.
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Global Equities Market
Although the Fund is not required to maintain any particular
geographic or currency mix of its investments, it presently
expects to invest in equity securities of companies whose common
stock is traded on foreign and United States securities markets.
The total value of equity securities of companies whose common
stock is traded on the securities markets of various countries
reflects the relative size of the investment opportunities in
those countries. The Fund will normally invest the majority of
its assets in equity securities whose principal trading markets
are in those nations which make up the top twenty equity markets
in terms of stock market capitalization, although securities
trading on less developed markets may present favorable
opportunities which the Fund may take advantage of. It is
expected that the Fund will have significant investments in Japan
and the United States, which are the two largest equity markets.
Investments in equity securities of companies trading on the
markets of other countries will be made depending upon their
relative attractiveness. Under normal circumstances, investments
will be made in no less than three separate markets. The
percentage of the Fund's assets invested in particular geographic
sectors will shift from time to time according to the judgment of
the Investment Manager.
It is expected that the majority of the Fund's investments
will be equity securities of companies whose common stocks are
traded in markets located in the major industrialized countries.
However, the Fund may invest up to 20% of its assets in "emerging
markets", some or all of which may be located in underdeveloped
countries. The Fund may also invest in sponsored and unsponsored
American Depository Receipts ("ADR's"), European Depository
Receipts ("EDR's") or other securities representing an underlying
interest in, or which are convertible into, securities of foreign
companies. Generally, ADRs (in registered form) are designed for
use in the United States securities markets and EDRs (in bearer
form) are designed for use in the European securities markets.
ADRs, EDRs and other similar securities may not necessarily be
denominated in the same currency as the securities into which
they may be exchanged. There may be less financial and other
information available in the U.S. for unsponsored ADR issues as
opposed to sponsored ADR issues.
Other Investment Policies
The Fund may on occasion enter into repurchase agreements.
Repurchase agreements involve the sale of securities to the Fund
with the concurrent agreement of the seller (a bank or securities
dealer) to repurchase the securities at the same price plus an
amount equal to an agreed-upon interest rate within a specific
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time, usually less than one week, but on occasion for a longer
period. These repurchase agreements are considered to be loans
by the Fund which are collateralized by the underlying
securities. The Fund requires continual maintenance of
collateral (in cash or U.S. Government securities) held by the
Fund's Custodian in an amount equal to or in excess of the market
value of the securities which are the subject of the agreement.
The Fund may not invest more than 10% of its total assets in
repurchase agreements and may not invest more than 5% of its
total assets in illiquid securities other than repurchase
agreements. It is not anticipated that the Fund will enter into
a material number of repurchase agreements.
In addition, the Fund may from time to time lend securities
from its portfolio to brokers, dealers or financial institutions
such as banks and trust companies. In so doing, the Fund would
continue to receive the equivalent of the interest or dividends
paid by the issuer on the loaned securities, and collateral.
Loans of portfolio securities must be collateralized in an amount
equal to or in excess of the market value of the securities
loaned, and, as a matter of fundamental policy, the Fund may not
lend more than 10% of the value of its total assets. The Fund
has the right to call a loan and obtain the securities loaned at
any time on notice of not more than five business days.
Although the Fund does not have the right to vote securities
on loan, it may terminate the loan and regain the right to vote
if that is considered important to the Fund's investment in the
securities. The Fund may pay reasonable administrative and
custodial fees in connection with a loan and may pay a negotiated
portion of the interest earned on the cash or equivalent
collateral to the borrower or placing broker. The Fund maintains
procedures for evaluating and monitoring the creditworthiness of
firms with which it enters into repurchase agreements and engages
in securities lending transactions. However, in the event of a
bankruptcy or other default of a seller of a repurchase agreement
or a borrower of securities, there may be delays and expenses in
liquidating the securities, a decline in their value and a loss
of interest.
The Fund also invests to a limited extent in securities of
companies which have been in existence for less than three years,
in securities for which market quotations are not readily
available and in securities of other registered investment
companies. See "Investment Restrictions" in the Statement of
Additional Information.
The Fund's investment objective may not be changed without
the approval of the holders of a majority of the Fund's
outstanding voting securities. A majority of the Fund's
outstanding voting securities, when used in this Prospectus,
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means the lesser of (i) 67% of the shares presented by proxy or
(ii) more than 50% of the outstanding shares.
The Fund anticipates that its annual portfolio turnover rate
will not exceed 100% in normal circumstances. Increased turnover
will have the effect of increasing the Fund's brokerage and
custodial expenses.
Management Discussion of Fund Performance
The Fund rose 15.72% for 1997. This compares to a gain of
15.76% for the Morgan Stanley Capital International (MSCI) World
Index (with net dividends reinvested) and an increase of 12.85%
for the average global equity fund as compiled by Lipper
Analytical Services. The Fund under performed the Index by 4
basis points for the year, but out performed the average global
fund by 287 basis points. The Fund's performance benefited from
stock selection in the U.S., Japan and continental Europe. Stock
selection in Asia (ex-Japan) was a slight drag on
performance.
Set forth below is a graphical representation of the Fund's
performance versus the MSCI World Index:
[GRAPHIC OMITTED]
- -------------------------------------------
MSCI SGYF
12/88 $10,743.58 $9,889.44
89 12,527.92 11,347.79
90 10,395.95 9,202.56
91 12,296.77 10,510.76
92 11,654.12 10,271.46
93 14,276.57 13,727.00
94 15,001.31 12,846.08
95 18,109.63 15,058.09
96 20,550.47 16,646.32
97 23,789.22 19,263.10
Note: Past performance is not necessarily indicative of future
performance.
Special Considerations and Risks
Investing in securities of foreign companies and countries,
in particular those considered "emerging markets", involves
certain considerations and risks which are not typically
associated with investing in U.S. Government securities and those
of domestic companies. Foreign companies are not generally
subject to uniform accounting, auditing and financial standards
and requirements comparable to those applicable to companies in
8
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the United States. There may also be less governmental
supervision and regulation of foreign securities exchanges,
brokers and listed companies than exists in the United States.
Dividends paid by foreign issuers may be subject to withholding
and other foreign taxes which may decrease the net return on such
investments as compared to dividends and interest paid to the
Fund by the U.S. Government or by domestic companies, and
additional costs will be incurred by the Fund to convert foreign
currencies into U.S. dollars. In addition, there may be the
possibility of expropriations, confiscatory taxation,
nationalization, currency blockage, political, economic or social
instability or diplomatic developments which could affect assets
of the Fund held in foreign countries.
There may be less publicly available information about
foreign companies and governments than is available in reports
and ratings published about U.S. companies. Most foreign
securities markets have substantially less volume than the New
York Stock Exchange and securities of most foreign companies are
less liquid and more volatile than securities of comparable U.S.
companies. Brokerage commissions and other transaction costs on
foreign securities exchanges are generally higher than in the
United States.
Foreign Currency Transactions
A portfolio of foreign securities may be favorably or
unfavorably affected by fluctuations in the relative rates of
exchange between the currencies of different nations and by
exchange control regulations.
With respect to settlement transactions, the Fund may, for a
fixed amount of United States dollars, enter into a forward
foreign exchange contract for the purchase or sale of the amount
of foreign currency involved in the underlying securities
transaction, including locking-in the U.S. dollar price
equivalent of interest or dividends to be paid on such securities
which are held by the Fund.
In so doing, the Fund will attempt to insulate itself against
possible losses resulting from a change in the relationship
between the U.S. dollar and the foreign currency during the
period between the date a security is purchased or sold, or on
which the dividend or interest payment is declared, and the date
on which payment is made or received.
Additionally, from time to time when the Fund believes that a
particular foreign currency may suffer a substantial decline
against the U.S. dollar, it may enter into a forward contract to
sell, for a fixed amount of dollars, the amount of foreign
currency approximating the value of some or all of the Fund's
9
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portfolio securities denominated in such foreign currency. The
Fund will not enter into forward contracts described in the
previous sentence if, as a result, it would have more than 15% of
the value of its total assets committed to the consummation of
such contracts. In addition, the Fund will not enter into such
forward contracts or maintain a net exposure to such contracts
where consummation of the contracts would obligate the Fund to
deliver an amount of foreign currency in excess of the value of
the Fund's portfolio securities or other assets denominated in
that currency.
The precise matching of a forward foreign currency contract
or a put or call option on a foreign currency with a particular
portfolio security will generally not be possible since the value
of the Fund's portfolio securities in foreign currencies will
change between the date on which the contract or option is
entered into and the date on which it matures. The projection of
short-term currency market movement is extremely difficult, and
the successful execution of a short-term hedging strategy is
highly uncertain. Accordingly, if a decision is made to sell a
security denominated in a foreign currency and terminate a
corresponding forward contract, it may be necessary for the Fund
to purchase additional foreign currency on the spot market (and
bear the expenses of such purchase) if the proceeds realized from
the sale of such security are less than the amount of foreign
currency that the Fund is obligated to deliver.
MANAGEMENT OF THE FUND
Directors and Officers
The Board of Directors of SGY Funds, Inc. (the "Company"), in
addition to reviewing the actions of the Fund's Investment
Manager, as set forth below, decides matters of general policy.
The Company's Officers conduct and supervise the daily business
operations of the Fund. A listing of the Company's Directors and
Officers is set forth in the Statement of Additional Information.
Investment Manager
SG Pacific Asset Management, Inc., the investment manager of
the Fund (the "Investment Manager"), was organized under the name
Yamaichi Capital Management, Inc. as a New York corporation on
March 3, 1981. SG Pacific is a subsidiary of SG Yamaichi Asset
Management Co., Ltd. (previously Yamaichi International Capital
Management Company, Limited ("SG Yamaichi")), Japan's oldest
investment management company, which managed aggregate assets in
excess of approximately $19 billion as of March 31, 1998.
Societe Generale Asset Management (North Pacific) Co., Ltd., a
wholly-owned subsidiary of Societe Generale, owns 85% of SG
Yamaichi.
10
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Pursuant to a Management Agreement, the Investment Manager,
subject to the supervision of the Company's Board of Directors in
conformity with the stated policies of the Fund, manages the
investment operations and portfolio composition of the Fund,
including the purchase, retention, disposition and loan of
securities. The Investment Manager also administers the Fund's
corporate affairs and, in connection therewith, furnishes the
Fund with office facilities, together with ordinary clerical and
bookkeeping services. The Investment Manager receives from the
Fund an annual fee of 1% of the Fund's average daily net assets.
For the fiscal year ended December 31, 1997, the Management Fee
paid by the Fund $130,631.
While this fee is higher than that paid by most other
investment companies, it is not higher than that paid by many
funds with similar objectives and policies.
The annualized ratio of expenses to average net assets for
the period ended December 31, 1997 was 2.81%.
Portfolio Management
Edward S. Burke is a Senior Vice President of the Investment
Manager and is primarily responsible for the management of the
Fund's portfolio. Mr. Burke has been employed by the Investment
Manager since 1989.
Year 2000
Like other mutual funds, financial and business
organizations, the Fund may be adversely affected if the computer
systems used by the Fund's service providers cannot properly
process and calculate date-related information from and after
January 1, 2000. The Fund has been in contact with all of its
service providers for whom it would be harmful to the Fund if
such service providers do not address this "Year 2000" problem.
Each has informed the Fund that it has either solved its "Year
2000" problem or is currently working on the problem and will
keep the Fund informed of its developments in this area.
However, there can be no assurance that the steps taken to
address the "Year 2000" problem will be sufficient to avoid any
adverse impact on the Fund.
Investment Restrictions
The Fund is subject to certain other investment restrictions,
which, like the Fund's investment objective, may not be changed
without the vote of a majority of the Fund's outstanding voting
securities. See "Investment Restrictions" in the Statement of
Additional Information.
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Portfolio Transactions
Most of the Fund's purchases and sales of securities, whether
transacted on securities exchanges or over-the-counter, will be
effected on the primary trading markets for those securities.
The primary trading market for a given security is generally
located in the country in which the issuer has established its
principal office.
Portfolio securities transactions on behalf of the Fund are
placed by the Investment Manager with a number of brokers and
dealers, including its affiliates. The Fund may use an
affiliated broker in connection with a purchase or sale of
securities when the Investment Manager reasonably believes that
the broker will provide the best or equal execution compared with
non-affiliated brokers and that the affiliated broker's charge
for the transaction does not exceed the usual and customary
levels charged to comparable, unaffiliated customers in similar
transactions.
PURCHASE OF SHARES
Your initial investment in the Fund ordinarily must be at
least $1,000. The Company may, in the Investment Manager's sole
discretion, accept certain accounts with less than the stated
minimum initial investment. Shares of the Fund are sold on a
continuous basis at the net asset value next determined after
receipt of a purchase order by the Company. Purchase orders
received by dealers prior to 4:00 p.m., Eastern time, on any
business day and transmitted to the Company, by 5:00 p.m.,
Eastern time, that day are confirmed at the net asset value
determined as of the close of the regular session of trading on
the New York Stock Exchange on that day. It is the
responsibility of dealers to transmit properly completed orders
so that they will be received by the Company by 5:00 p.m.,
Eastern time. Dealers may charge a fee for effecting purchase
orders. Direct purchase orders received by the Fund's transfer
agent, Countrywide Fund Services, Inc. (the "Transfer Agent"), by
4:00 p.m., Eastern time, are confirmed at that day's net asset
value. Direct investments received by the Transfer Agent after
4:00 p.m., Eastern time, and orders received from dealers after
5:00 p.m., Eastern time, are confirmed at the net asset value
next determined on the following business day.
You may open an account and make an initial investment in the
Fund by sending a check and a completed account application form
to Countrywide Fund Services, Inc., P.O. Box 5354, Cincinnati,
Ohio 45201-5354. Checks should be made payable to the "SGY
Global Fund".
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The Company mails you confirmations of all purchases or
redemptions of Fund shares. Certificates representing shares are
not issued. The Company reserves the right to limit the amount
of investments and to refuse to sell to any person.
Investors should be aware that the Fund's account application
contains provisions in favor of the Fund, the Transfer Agent and
certain of their affiliates, excluding such entities from certain
liabilities (including, among others, losses resulting from
unauthorized shareholder transactions) relating to the various
services made available to investors.
Should an order to purchase shares be canceled because your
check does not clear, you will be responsible for any resulting
losses or fees incurred by the Fund or the Transfer Agent in the
transaction.
You may also purchase shares of the Fund by wire. Please
telephone the Transfer Agent (Nationwide call toll-free 877-997-
4726) for instructions. You should be prepared to give the name
in which the account is to be established, the address, telephone
number and taxpayer identification number for the account, and
the name of the bank which will wire the money.
Your investment will be made at the net asset value next
determined after your wire is received together with the account
information indicated above. If the Company does not receive
timely and complete account information, there may be a delay in
the investment of your money and any accrual of dividends. To
make your initial wire purchase, you are required to mail a
completed account application to the Transfer Agent. Your bank
may impose a charge for sending your wire. There is presently no
fee for receipt of wired funds, but the Company reserves the
right to charge shareholders for this service upon thirty days
prior notice to shareholders.
You may purchase and add shares to your account by mail or by
bank wire. Checks should be sent to Countrywide Fund Services,
Inc., P.O. Box 5354, Cincinnati, Ohio 45201-5354. Checks should
be made payable to the "SGY Global Fund." Bank wires should be
sent as outlined above. Each additional purchase request must
contain the name of your account and your account number to
permit proper crediting to your account. While there is no
minimum amount required for subsequent investments, the Company
reserves the right to impose such a requirement.
Transactions Through Financial Institutions
Shares may be purchased and redeemed through certain broker-
dealers, banks and other financial institutions ("Processing
Organizations"). Processing Organizations may charge their
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<PAGE>
customers a fee for their services and are responsible for
promptly transmitting purchase, redemption and other requests to
the Fund.
Processing Organizations may charge a fee for their service
and may require different minimum initial investments than the
Fund. Processing Organizations may also impose other charges or
restrictions different from those applicable to shareholders who
invest in the Fund directly. Shareholders who invest through
Processing Organizations should acquaint themselves with their
institution's procedures and should read this Prospectus in
conjunction with any materials and information provided by their
institution. Customers who purchase the Fund's shares through a
Processing Organization may or may not be the shareholder of
record and, subject to their institution's and the Fund's
procedures, may have Fund shares transferred into their name.
There is typically a three-day settlement period for purchases
and redemptions through broker-dealers. Certain Processing
Organizations may also enter purchase orders with payment to
follow.
Certain shareholder services may not be available to
shareholders who have purchased shares through a Processing
Organization. These shareholders should contact their Processing
Organization for further information. The Fund may confirm
purchases and redemptions of a Processing Organization's
customers directly to the Processing Organization, which in turn
will provide its customers with confirmations and periodic
statements. The Fund is not responsible for the failure of any
Processing Organization to carry out its obligations to its
customers.
SHAREHOLDER SERVICES
Contact the Transfer Agent (Nationwide call toll-free 877-
997-4726) for additional information about the shareholder
services described below.
Automatic Withdrawal Plan
If the shares in your account have a value of at least
$5,000, you may elect to receive, or may designate another person
to receive, monthly or quarterly payments in a specified amount
of not less than $100 each. There is no charge for this
service.
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Tax-Deferred Retirement Plans
Shares of the Fund are available for purchase in connection
with the following tax-deferred retirement plans:
-- Keogh Plans for self-employed individuals
-- Individual retirement account (IRA) plans for
individuals and their non-employed spouses,
including Roth IRAs and Education IRAs
-- Qualified pension and profit-sharing plans for
employees, including those profit-sharing plans with a
401(k) provision
-- 403(b) (7) custodial accounts for employees of
public school systems, hospitals, colleges and
other non-profit organizations meeting certain
requirements of the Internal Revenue Code
Direct Deposit Plans
Shares of the Fund may be purchased through direct deposit
plans offered by certain employers and government agencies.
These plans enable a shareholder to have all or a portion of his
or her payroll or social security checks transferred
automatically to purchase shares of the Fund.
Automatic Investment Plan
You may make automatic monthly investments in the Fund from
your bank, savings and loan or other depository institution
account on either the 15th or the last business day of the month.
The minimum initial and subsequent investments must be $100 under
the plan. The Transfer Agent pays the costs associated with
these transfers, but reserves the right, upon thirty days written
notice, to make reasonable charges for this service. Your
depository institution may impose its own charge for debiting
your account which would reduce your return from an investment in
the Fund.
DISTRIBUTION EXPENSES
A Distribution Plan, adopted by the Fund pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended,
permits the Fund's distributor and the Investment Manager to use
their own assets, which may include fees received from the Fund,
to finance the distribution activities contemplated under the
Plan. Payments which may be made can include, but are not
limited to, the payment of compensation to broker-dealers,
including the distributor, for distributing shares, expenses,
other than compensation of the distributor's or Investment
Manager's own employees, incurred in connection with advertising,
and the preparation and distribution of sales literature and
15
<PAGE>
prospectuses to prospective investors, implementing and operating
the Distribution Plan, and performing other promotional
activities on behalf of the Fund. No payments to the Investment
Manager or the distributor are to be made by the Fund under the
Plan separate from the management fee paid by the Fund pursuant
to the Management Agreement.
The Board of Directors has determined that, in its judgment,
there is a reasonable likelihood that the Plan will benefit the
Fund and its shareholders. The Plan is subject to annual review
and approval by the Board of Directors, which will consider its
continued appropriateness and the level of compensation provided
therein.
REDEMPTION OF SHARES
You may redeem shares of the Fund on each day that the Fund
is open for business by sending a written request to the Fund.
The request must state the number of shares of the dollar amount
to be redeemed and your account number. The request must be
signed exactly as your name appears on the Fund's account
records. If the shares to be redeemed have a value of $25,000 or
more, your signature must be guaranteed by any eligible guarantor
institution, including banks, brokers and dealers, municipal
securities brokers and dealers, government securities brokers and
dealers, credit unions, national securities exchanges, registered
securities associations, clearing agencies and savings
associations.
Redemption requests may direct that the proceeds be wired
directly to your existing account in any commercial bank or
brokerage firm in the United States. If your instructions
request a redemption by wire, you will be charged an $8
processing fee. The Fund reserves the right, upon thirty days
written notice, to change the processing fee. All charges will
be deducted from your account by redemption of shares in your
account. Your bank or brokerage firm may also impose a charge
for processing the wire. In the event that wire transfer of
funds is impossible or impractical, the redemption proceeds will
be sent by mail to the designated account.
You may also redeem shares by placing a wire redemption
request through a securities broker or dealer. Unaffiliated
broker-dealers may impose a fee on the shareholder for this
service. You will receive the net asset value per share next
determined after receipt by the Fund or its agent of your wire
redemption request. It is the responsibility of broker-dealers
to properly transmit wire redemption orders.
You will receive the net asset value per share next
determined after receipt by the Transfer Agent of your redemption
16
<PAGE>
request in the form described above. Payment is made within
three business days after tender in such form, provided that
payment in redemption of shares purchased by check will be
effected only after the check has been collected, which may take
up to fifteen days from the purchase date. To eliminate this
delay, you may purchase shares of the Fund by certified check or
wire. At the discretion of the Fund or the Transfer Agent,
corporate investors and other associations may be required to
furnish an appropriate certification authorizing redemptions to
ensure proper authorization.
The Fund reserves the right to suspend the right of
redemption or to postpone the date of payment for more than three
business days under unusual circumstances as determined by the
Securities and Exchange Commission.
EXCHANGE PRIVILEGE
Shares of the Fund may be exchanged at net asset value for
shares of the Countrywide Money Market Fund (a series of
Countrywide Investment Trust), which invests primarily in high-
quality U.S. dollar-denominated money market instruments and
seeks high current income, consistent with liquidity and
stability of capital. Shares of the Countrywide Money Market
Fund acquired via exchange may be re-exchanged for shares of the
Fund at net asset value.
You may request an exchange by sending a written request to
the Transfer Agent. The request must be signed exactly as your
name appears on the Fund's account records. Exchanges may also
be requested by telephone. If you are unable to execute your
transaction by telephone (for example, during times of unusual
market activity), consider requesting your exchange by mail or by
visiting the Fund's offices at 30 Wall Street, New York, NY
10005. An exchange will be effected at the next determined net
asset value after receipt of a request by the Transfer Agent.
Exchanges may only be made for shares of funds then offered
for sale in your state of residence and are subject to the
applicable minimum initial investment requirements. The exchange
privilege may be modified or terminated by the Board of Directors
upon 60 days' prior notice to shareholders. An exchange results
in a sale of fund shares, which may cause you to recognize a
capital gain or loss. Before making an exchange, contact the
Transfer Agent to obtain a current prospectus and more
information about exchanges among the funds.
17
<PAGE>
NET ASSET VALUE
The net asset value per share is the net worth of the Fund
(assets, including securities at value, minus liabilities)
divided by the number of shares outstanding. For valuation
purposes, quotations of foreign securities in foreign currency
are converted to U.S. dollar equivalents. The Board of Directors
has fixed the specific time of day for the computation of the
Fund's net asset value to be as of the close of trading on the
New York Stock Exchange (currently 4:00 p.m., New York time).
The value of investments listed on a securities exchange or
on the NASDAQ National Market System is based on the last sales
price on that exchange or system prior to the time the Fund's
assets are valued. In the absence of recorded sales, the average
of readily available closing bid and asked prices on such
exchanges or systems will be used. If an extraordinary event
which is likely to affect the value of the security occurs after
the close of an exchange or system on which a portfolio security
is traded, such security will be valued at its fair value as
determined in good faith by the Investment Manager under
procedures established by, and under the general supervision of,
the Company's Board of Directors.
Unlisted securities are valued at the average of the quoted
bid and asked prices in the over-the-counter market. Securities
or other assets for which market quotations are not readily
available are valued by appraisal at their value as determined in
good faith by the Investment Manager under procedures established
by the Board of Directors. The Fund may use a pricing service in
the determination of its net asset value as approved by the
Company's Board of Directors. Investments in debt securities
having a maturity of 60 days or less are valued at amortized
cost, if their term to maturity from the date of purchase was
less than 60 days, or by amortizing their value on the 61st day
prior to maturity, if their term to maturity from date of
purchase by the Fund was more than 60 days, unless the Board of
Directors determines that this does not represent fair value.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund intends to qualify as a regulated investment company
under the Internal Revenue Code of 1986, as amended (the "Code").
Accordingly, the Fund will not be subject to federal income taxes
on its net investment income and capital gains, if any, that it
distributes to its shareholders if it distributes each year at
least 90% of its "investment company taxable income". All
dividends out of net investment income and net short-term capital
gains will be taxable as ordinary income to shareholders whether
or not reinvested. Dividends out of net investment income are
eligible for the 70% dividends-received deduction for corporate
18
<PAGE>
shareholders, to the extent the Fund's income is derived from
certain dividends received from domestic corporations. Pursuant
to the Taxpayer Relief Act of 1997, two different tax rates apply
to net capital gains--that is, the excess of net gains from
capital assets held for more than one year over net losses from
capital assets held for not more than one year. One rate
(generally 28%) applies to net gains on capital assets held for
more than one year but not more than 18 months ("mid-term
gains"), and a second rate (generally 20%) applies to the balance
of such net capital gains ("adjusted net capital gains").
Distributions of mid-term gains and adjusted net capital gains
will be taxable to shareholders as such, whether or not
reinvested and regardless of the length of time a shareholder has
owned his or her shares, and will not be eligible for the
dividends-received deduction. The Fund intends to distribute
annually to shareholders all of its "investment company taxable
income", which includes dividends, interest and any net
short-term capital gains in excess of net long-term losses, and
all of its net capital gains. Under certain circumstances, a
portion of the Fund's distributions may be treated as a
nontaxable return of capital, which will reduce a shareholder's
basis in his shares of the Fund. If that basis is reduced to
zero, any further returns of capital would be taxable as capital
gain.
The Fund will be subject to a nondeductible 4% excise tax to
the extent it does not meet certain minimum distribution
requirements by the end of each calendar year. For this purpose,
income retained by the Fund that is subject to income tax will be
considered to have been distributed by year-end. The Fund
intends to meet these requirements. For purposes of the 4%
excise tax and federal income tax purposes, dividends declared in
October, November or December and payable to shareholders of
record as of a date in such a month will be treated as received
by shareholders, and distributed by the Fund, on December 31 of
such calendar year, if distributed by the following January
31.
Income received by the Fund from sources within foreign
countries may be subject to foreign income taxes withheld at the
source. If the Fund has more than 50% of the value of its assets
invested in stock or securities of foreign corporations at the
close of its taxable year, which is the Fund's present intention,
the Fund may elect to treat foreign income taxes paid by it as
paid directly by shareholders of the Fund. If the Fund makes
this election, the amount of such foreign taxes will be included
in the income of shareholders, and shareholders may claim either
a credit or deduction for federal income tax purposes for such
foreign taxes. The amount of taxes for which a shareholder can
claim a credit in any year is subject to limitations set out in
the Code. In particular, capital gains realized by the Fund on
19
<PAGE>
the sales of foreign securities will be considered, as passed
through to shareholders, to be United States-source income, and,
therefore, foreign taxes paid with respect to such gains may not
be creditable.
Any gain or loss realized upon a sale or redemption of shares
of the Fund by a shareholder who is not a dealer in securities
generally will be treated as a long-term capital gain or loss if
the shares have been held for more than one year, and otherwise
as a short-term capital gain or loss. In the case of an
individual shareholder, the applicable tax rate imposed on long-
term capital gains differs depending on whether the shares were
held at the time of the sale or redemption for more than 18
months, or for more than one year but not more than 18 months.
However, any loss realized by a shareholder upon a sale or
redemption of shares in the Fund held for six months or less will
be treated as long-term capital loss to the extent of any
distributions of net capital gains received by the shareholder
with respect to such shares. Additionally, any loss realized on
a sale or redemption of shares of the Fund will be disallowed to
the extent the shares disposed of are replaced within a period of
61 days beginning 30 days before and ending 30 days after the
shares are sold or exchanged. If disallowed, the loss will be
reflected in an adjustment to the basis of the shares
acquired.
Any dividend or capital gains distribution received by a
shareholder will have the effect of reducing the net asset value
of the shareholder's shares by the exact amount of the dividend
or capital gains distribution. If the net asset value of the
shares should be reduced below a shareholder's cost as a result
of a dividend or capital gains distribution, such dividend or
capital gains distribution, although constituting a return of
capital, will be taxable as described above. Investors should
consider the tax implications of buying shares in the Fund just
prior to a distribution, since the cost of shares purchased at
that time may reflect the amount of the forthcoming
distribution.
Dividends of net investment income to a shareholder who as to
the United States, is a nonresident alien individual, fiduciary
of a foreign trust or estate, foreign corporation or foreign
partnership (a "foreign shareholder") will be subject to U.S.
withholding tax at the rate of 30% (or such lower rate as may be
provided by an applicable tax treaty) unless the dividends are
effectively connected with a U.S. trade or business of the
foreign shareholder, in which case the dividends will be subject
to tax on a net income basis at the graduated rates applicable to
U.S. individuals, trusts, estates or domestic corporations, as
the case may be. Distributions of net capital gains to a foreign
shareholder, and gain realized by a foreign shareholder upon a
20
<PAGE>
sale or redemption of shares of the Fund, will not be subject to
U.S. tax unless the distributions or gains, as the case may be,
are effectively connected with a U.S. trade or business of a
foreign shareholder or, in the case of a shareholder who is a
nonresident alien individual, the shareholder was present in the
U.S. for more than 182 days during the taxable year and certain
other conditions are met. Transfers by gift of shares of the
Fund by a foreign shareholder who is a nonresident alien
individual will not be subject to U.S. federal gift tax, but the
value of shares of the Fund held by such a shareholder at his or
her death will be includable in his or her gross estate for
Federal estate tax purposes (absent an applicable tax
treaty).
The Fund may be required to withhold U.S. federal income tax
at the rate of 31% of all taxable distributions payable to
shareholders, including nonresident alien individuals, who fail
to provide the Fund with their correct taxpayer identification
number or to make required certifications, or who have been
notified by the Internal Revenue Service that they are subject to
backup withholding. Any amounts withheld may be credited against
a shareholder's U.S. federal income tax liability.
Distributions will be paid in additional Fund shares based on
the Fund's net asset value at the close of business on the record
date, unless the shareholder elects in writing not less than five
business days prior to the record date to receive such
distributions in cash. The Fund will notify each shareholder
after the close of the Fund's taxable year both of the dollar
amount and the taxable status of that year's distributions.
Shareholders are urged to consult their own tax advisers
regarding specific questions as to federal, state or local taxes.
See "Taxes" in the Statement of Additional Information.
PERFORMANCE INFORMATION
From time to time the Fund may advertise its "total return".
These figures are based on historical earnings and are not
intended to indicate future performance. The "total return"
shows how much an investment in the Fund would have increased (or
decreased) over a specific period of time (i.e., one, five or ten
years or since inception of the Fund) assuming that all
distributions and dividends by the Fund were reinvested on the
reinvestment dates during the period and less all recurring fees.
Total return does not take into account any federal or state
income taxes that may be payable. Average annual total return
takes into account any applicable initial or contingent deferred
sales charges. The Fund also may include comparative performance
information in advertising or marketing the Fund's shares. Such
performance information may include data from Lipper Analytical
Services, Inc., other industry publications, business
21
<PAGE>
periodicals, rating services and market indices. See
"Performance Information" in the Statement of Additional
Information.
DESCRIPTION OF COMMON STOCK
The Company, incorporated in the State of Maryland on
March 2, 1988 (originally under the name Yamaichi Funds, Inc.),
is authorized to issue 50 million shares of common stock, $0.01
par value (the "Common Stock"). Shares of the Fund, when issued,
are fully paid, nonassessable, fully transferable and redeemable
at the option of the holder. See "Redemption of Shares". All
Fund shares are equal as to earnings, assets and voting
privileges. There are no conversion, pre-emptive or other
subscription rights. Pursuant to the Company's Articles of
Incorporation, the Board of Directors may authorize the creation
of additional series of Common Stock, with such preferences,
privileges, limitations and voting and dividend rights as the
Board may determine. Each share outstanding is entitled to share
equally in dividends and other distributions and in the net
assets of the Fund on liquidation. Accordingly, in the event of
liquidation, each share of the Fund's Common Stock is entitled to
its portion of all of the Fund's assets after all debts and
expenses have been paid. The shares of the Fund do not have
cumulative voting rights for the election of Directors. The
Company will hold a special meeting of shareholder to elect
Directors, approve the Management Agreement and Distribution Plan
and ratify the selection of auditors. The Company does not
intend to hold annual or other shareholder meetings, except to
the extent required by the Investment Company Act of 1940, as
amended, or other applicable law. When requested in writing to
do so by holders of at least 10% of its shares, the Company shall
call a meeting of shareholders to vote upon the removal of one or
more of the Company's Directors and shall assist shareholder
communications in such matter.
REPORTS TO SHAREHOLDERS
The Company will send to its shareholders annual and
semi-annual reports; the financial statements appearing in its
annual reports will be audited by independent public accountants.
Shareholder inquiries should be addressed to the Fund at the
address and telephone number indicated on the cover page of this
Prospectus.
CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT
Brown Brothers Harriman & Co. ("Brown Brothers" or the
"Custodian"), located at 40 Water Street, Boston, Massachusetts
02109, serves as Custodian for the Fund's portfolio securities
22
<PAGE>
and cash. In that capacity, Brown Brothers maintains certain
financial and accounting books and records pursuant to agreements
with the Fund. The Custodian employs sub-custodians, who are
approved by the Directors of the Company in accordance with
regulations of the Securities and Exchange Commission, to provide
custodial services for the Fund's foreign assets held outside of
the United States. The Directors of the Company monitor the
activities of the Custodian and sub-custodians.
The Fund has retained Countrywide Fund Services, Inc., P.O.
Box 5354, Cincinnati, Ohio (the "Transfer Agent"), to serve as
the Fund's transfer agent, dividend paying agent and shareholder
service agent. The Transfer Agent is a wholly-owned indirect
subsidiary of Countrywide Credit Industries, Inc., a New York
Stock Exchange listed company principally engaged in the business
of residential mortgage lending. The Transfer Agent also
provides accounting and pricing services to the Fund. The
Transfer Agent receives a monthly fee from the Fund for
calculating daily net asset value per share and maintaining such
books and records as are necessary to enable it to perform its
duties.
No dealer, salesman or any other person has been authorized
to give any information or to make any representations, other
than those contained in this Prospectus, and, if given or made,
such other information or representations must not be relied upon
as having been authorized by the Fund or the Investment Manager.
This Prospectus does not constitute an offer by the Fund or the
Investment Manager to sell or a solicitation of an offer to buy
any of the securities offered hereby in any jurisdiction to any
person to whom it is unlawful to make such offer or solicitation
in such jurisdiction.
23
<PAGE>
Page
Expense Information..................................2
Financial Highlights.................................3
Investment Objective and Policies....................4
Management of the Fund...............................9
Purchase of Shares..................................11
Sharholder Services.................................12
Distribution Expenses...............................13
Redemption of Shares................................14
Exchange Privilege..................................15
Net Asset Value.....................................16
Dividends, Distributions and Taxes..................16
Performance Information.............................19
Description of Common Stock.........................19
Reports to Shareholders.............................19
Custodian and Transfer and Dividend
Disbursing Agent....................................20
24
<PAGE>
[Part B]
SGY GLOBAL FUND
a portfolio of
SGY FUNDS, INC.
Statement of Additional Information, dated May 1, 1998
SGY Global Fund (the "Fund"), a portfolio of SGY Funds, Inc.
(the "Company"), is a mutual fund that seeks to obtain long-term
growth of capital primarily through investment in equity
securities of companies in foreign countries and the United
States. The Company is an open-end, diversified management
investment company or "mutual fund", which intends to offer
investors the opportunity to invest in different portfolios with
different investment objectives and policies. See "Investment
Objective and Policies".
This Statement of Additional Information is not a prospectus
and should be read in conjunction with the Fund's Prospectus,
dated May 1, 1998, a copy of which may be obtained from the Fund
at 30 Wall Street, New York, New York 10005.
TABLE OF CONTENTS
Investment Objective and Policies.....................2
Investment Restrictions...............................6
Directors and Officers................................8
Investment Manager....................................9
Distribution.........................................10
Net Asset Value......................................11
Portfolio Transactions and Brokerage.................12
Taxes................................................14
Performance Information..............................15
Custodian and Transfer and Dividend Disbursing Agent.16
Independent Accountants..............................16
Financial Statements.................................17
1
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The Fund's objective is to obtain long-term growth of capital
primarily through investment in equity securities of companies in
foreign countries and the United States. Any income achieved is
incidental to the Fund's objective of long-term growth of
capital. There can be no assurance that the Fund will be able to
achieve its investment objective.
The Fund will seek to achieve its objective through
investments in a diversified portfolio of securities which will
consist primarily of equity securities for which market
quotations are readily available. For purposes of this Statement
of Additional Information, "equity securities" include all types
of common stock, debt instruments and preferred stock convertible
into common stock, warrants, units of various types of securities
including warrants, and similar types of securities which have
market characteristics equivalent to common stock. The
Investment Manager (as defined below) may determine from time to
time that the long-term capital appreciation of debt securities
may equal or exceed the return on equity securities. In
circumstances where the Investment Manager believes that equity
markets generally are overpriced and investments in short-term
fixed income securities are desirable to preserve capital, the
Fund may, for temporary defensive purposes, invest a portion or
all of its portfolio in such securities.
Although the Fund is not required to maintain any particular
geographic or currency mix of its investments, it presently
expects to invest in equity securities of companies whose common
stock is traded on foreign and United States securities markets.
The total value of equity securities traded on the securities
markets of various countries reflects the relative size of the
investment opportunities in those countries. The Fund will
normally invest the majority of its assets in equity securities
whose principal trading markets are those nations which make up
the top twenty equity markets in terms of stock market
capitalization, although securities traded on less developed
markets may present favorable opportunities for investment by the
Fund.
The Fund has no fixed policy with respect to portfolio
turnover; however, it is anticipated that the Fund's annual
portfolio turnover rate will not exceed 100% in normal
circumstances. For a further description of the Fund's
investment objective and policies, see "Investment Objective and
Policies" in the Prospectus.
2
<PAGE>
Forward Foreign Currency Exchange Contracts
Since investments in foreign companies will usually involve
currencies of foreign countries, and since the Fund may
temporarily hold funds in foreign currency bank deposits during
the completion of investment programs, the value of the Fund's
assets as measured in U.S. dollars may be affected favorably or
unfavorably by changes in foreign currency exchange rates and
exchange control regulations, and the Fund may incur costs in
connection with conversions between various currencies. The Fund
will conduct its foreign currency exchange transactions either on
a spot (i.e., cash) basis at the spot rate prevailing in the
foreign currency exchange market, or through entering into
forward contracts to purchase or sell foreign currencies. A
forward foreign currency exchange contract involves an obligation
to purchase or sell a specific currency at a future date, which
may be any fixed number of days from the date of the contract
agreed upon by the parties, at a price set at the time of the
contract. These contracts are traded in the interbank market
conducted directly between currency traders (usually large
commercial banks) and their customers. A forward contract
generally has no deposit requirements, and no commissions are
charged at any stage for trades.
The Fund may enter into forward foreign currency exchange
contracts under several circumstances. When the Fund enters into
a contract for the purchase or sale of a security denominated in
a foreign currency, or when the Fund anticipates the receipt in a
foreign currency of dividends or interest payments on a security
which it holds, the Fund may desire to "lock-in" the U.S. dollar
price of the security or the U.S. dollar equivalent of such
dividend or interest payment, as the case may be. By entering
into a forward contract for the purchase or sale, for a fixed
amount of dollars, of the amount of foreign currency involved in
the underlying transactions, the Fund will be able to protect
itself against a possible loss resulting from an adverse change
in the relationship between the U.S. dollar and the subject
foreign currency during the period between the date on which the
security is purchased or sold, or on which the dividend or
interest payment is declared, and the date on which such payments
are made or received.
Additionally, when the Fund's management believes that a
particular foreign currency may suffer a substantial decline
against the U.S. dollar, it may enter into a forward contract to
sell, for a fixed amount of dollars, the amount of foreign
currency approximating the value of some or all of the Fund's
portfolio securities denominated in such foreign currency. The
precise matching of the forward contract amounts and the value of
the securities involved will not generally be possible since the
value of such securities in foreign currencies will change as a
3
<PAGE>
consequence of market movements in the value of those securities
between the date on which the forward contract is entered into
and the date on which it matures. The projection of short-term
currency market movement is extremely difficult, and the
successful execution of a short-term hedging strategy is highly
uncertain. The Fund does not intend to enter into such forward
contracts to protect the value of its portfolio securities on a
regular or continuous basis, and will not do so if, as a result,
the Fund would have more than 15% of the value of its total
assets committed to the consummation of such contracts. The Fund
will also not enter into such forward contracts or maintain a net
exposure to such contracts where the consummation of the
contracts would obligate the Fund to deliver an amount of foreign
currency in excess of the value of the Fund's portfolio
securities or other assets denominated in that currency. Under
normal circumstances, consideration of the prospect of currency
parities will be incorporated into the Fund's long-term
investment decisions regarding its overall portfolio
diversification strategies. However, the Fund's management
believes it is important to have the flexibility to enter into
such forward contracts when it determines that the best interests
of the Fund will be so served. The Fund's Custodian (as defined
below) will place cash or liquid equity or debt securities into a
segregated account of the Fund in an amount equal to the value of
the Fund's total assets committed to the consummation of forward
foreign currency exchange contracts entered into to protect the
value of its portfolio securities, as previously described. If
the value of the securities placed in the segregated account
declines, additional cash or securities will be placed in the
account on a daily basis so that the value of the account will
equal the amount of the Fund's commitments with respect to such
contracts.
The Fund generally will not enter into a forward contract
with a term of greater than one year. At the maturity of a
forward contract, the Fund may either sell the portfolio security
and make delivery of the foreign currency, or it may retain the
security and terminate its contractual obligation to deliver the
foreign currency by purchasing an "offsetting" contract with the
same currency trader obligating it to purchase, on the same
maturity date, the same amount of foreign currency.
It is impossible to forecast with absolute precision the
market value of a particular portfolio security at the expiration
of a forward contract. Accordingly, it may be necessary for the
Fund to purchase additional foreign currency on the spot market
(and bear the expense of such purchase) if the market value of
the security is less than the amount of foreign currency that the
Fund is obligated to deliver and if a decision is made to sell
the security and make delivery of the foreign currency.
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If the Fund retains the portfolio security and engages in an
offsetting transaction, the Fund will incur a gain or a loss (as
described below) to the extent that there has been movement in
forward contract prices. Should forward prices decline during
the period between the Fund's entering into a forward contract
for the sale of a foreign currency and the date it enters into an
offsetting contract for the purchase of the foreign currency, the
Fund will realize a gain to the extent that the price of the
currency it has agreed to sell exceeds the price of the currency
it has agreed to purchase. Should forward prices increase, the
Fund will suffer a loss to the extent that the price of the
currency it has agreed to purchase exceeds the price of the
currency it has agreed to sell.
The Fund's dealing in forward foreign currency exchange
contracts will be limited to the transactions described above.
Of course, the Fund is not required to enter into such
transactions with regard to its foreign currency-denominated
securities. It also should be realized that this method of
protecting the value of the Fund's portfolio securities against a
decline in the value of a currency does not eliminate
fluctuations in the underlying prices of the securities. It
simply establishes a rate of exchange which one can achieve at
some future point in time. Additionally, although such contracts
tend to minimize the risk of loss due to a decline in the value
of the hedged currency, at the same time they tend to limit any
potential gain which might result should the value of such
currency increase.
Although the Fund values its assets daily in U.S. dollars, it
does not intend to convert its holdings of foreign currencies
into U.S. dollars on a daily basis. It will do so from time to
time, and investors should be aware of the costs of currency
conversion. Although foreign exchange dealers do not charge a
fee for conversion, they do realize a profit based on the
difference (i.e., the "spread") between the prices at which they
buy and sell various currencies. Thus, a dealer may offer to
sell a foreign currency to the Fund at one rate, while offering a
lesser rate of exchange should the Fund desire to resell that
currency to the dealer.
Repurchase Agreements
The Fund may on occasion enter into repurchase agreements
wherein the seller agrees to repurchase a security from the Fund
at a mutually agreed-upon time and price. The period of maturity
is usually quite short, possibly overnight or a few days,
although it may extend over a number of months. The resale price
will be in excess of the purchase price, reflecting an
agreed-upon rate of return effective for the period of time the
Fund's money is invested in the security. If the seller defaults
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and the value of the collateral securing the repurchase agreement
declines, the Fund may incur a loss. In addition, if bankruptcy
proceedings are commenced with respect to the seller of the
security, realization upon the collateral by the Fund may be
delayed or limited. It is expected that repurchase agreements
will be used for liquidity purposes to meet redemption requests
and for the pending reinvestment of funds in equity or other
long-term securities.
Lending of Portfolio Securities
The Fund may lend its portfolio securities to brokers or
dealers, banks or other recognized institutional borrowers of
securities, provided that the borrower at all times maintains
cash or equivalent collateral or secures a letter of credit in
favor of the Fund in an amount equal to at least 100% of the
market value of the securities loaned. During the time portfolio
securities are on loan, the borrower will pay the Fund an amount
equivalent to any dividend or interest paid on such securities.
The Fund may invest the cash collateral and earn additional
income or it may receive an agreed-upon amount of interest income
from the borrower. As a matter of fundamental policy, the Fund
may not lend more than 10% of the value of its total assets.
Loans are subject to termination at the option of the Fund or the
borrower. The Fund may pay reasonable administrative and
custodial fees in connection with a loan and may pay a negotiated
portion of the interest earned on the cash or equivalent
collateral to the borrower or placing broker. The Fund does not
have the right to vote securities on loan, but would terminate
the loan and regain the right to vote if that were considered
important with respect to the investment.
INVESTMENT RESTRICTIONS
The following restrictions are fundamental policies which
cannot be changed without the approval of the holders of a
majority of the Fund's outstanding voting securities.
The Fund may not:
1. Purchase securities on margin (but the Fund may
obtain such short-term credits as may be necessary for the
clearance of transactions).
2. Make short sales of securities (other than short
sales against the box) or maintain a short position.
3. Issue senior securities, borrow money or pledge its
assets, except that the Fund may borrow from a bank for temporary
or emergency purposes in amounts not exceeding 5% (taken at the
lower of cost or current value) of its total assets (not
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including the amount borrowed) and pledge its assets to secure
such borrowings.
4. Purchase any security (other than obligations of
the U.S. Government, its agencies, or instrumentalities) if as a
result: (i) more than 5% of the Fund's total assets (taken at
current value) would then be invested in securities of a single
issuer or (ii) more than 25% of the Fund's total assets (taken at
current value) would be invested in a single industry.
5. Purchase any security if as a result the Fund would
then hold more than 10% of any class of securities of an issuer
(taking all common stock issues of an issuer as a single class,
all preferred stock issues as a single class, and all debt issues
as a single class) or more than 10% of the outstanding voting
securities of an issuer.
6. Purchase any security if as a result the Fund would
then have more than 5% of its total assets (taken at current
value) invested in securities of companies (including
predecessors) less than three years old or in equity securities
for which market quotations are not readily available.
7. Invest in securities of any issuer if, to the
knowledge of the Company, any Officer or Director of the Company
or of the Investment Manager owns more than 1/2 of 1% of the
outstanding securities of such issuer, and such Officers and
Directors who own more than 1/2 of 1% own in the aggregate more
than 5% of the outstanding securities of such issuer.
8. Buy or sell commodities or commodity contracts or
futures contracts (except futures contracts on currency) or real
estate or interests in real estate, although it may purchase and
sell securities which are secured by real estate and securities
of companies which invest or deal in real estate. (For the
purpose of this restriction, forward foreign exchange contracts
are not deemed to be a commodity or commodity contract.)
9. 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.
10. Make investments for the purpose of exercising
control or management.
11. Invest more than 5% of its total assets in
securities that are subject to restrictions on resale because
such securities have not been registered under the Securities Act
of 1933, as amended. This restriction will not apply to
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securities that are readily marketable in securities markets
outside the United States.
12. Participate on a joint and several basis in any
trading account in securities.
13. Invest in securities of other registered investment
companies, except by purchases in the open market involving only
customary brokerage commissions and as a result of which not more
than 5% of its total assets (taken at current value) would be
invested in such securities, or except as part of a merger or
consolidation.
14. Invest in interests in oil, gas or other mineral
exploration or development programs, although it may invest in
the common stocks of companies which invest in or sponsor such
programs.
15. Make loans, except through (i) repurchase
agreements (repurchase agreements with a maturity of longer than
7 days together with securities of the type described in
Investment Restriction 11 and other illiquid assets being limited
to 10% of the Fund's total assets) and (ii) loans of portfolio
securities (limited to 10% of the Fund's total assets).
16. Purchase warrants if as a result the Fund would
then have more than 5% of its total assets (taken at current
value) invested in warrants. Investment in warrants which are
not listed on the New York or American Stock Exchange will be
limited to 2% of total assets (taken at current value).
17. Write, purchase or sell puts or calls on securities
or combinations thereof. The Fund may purchase puts or calls on
foreign currencies.
An investment that complies with the foregoing restrictions
at the time of investment will not subsequently fail to comply as
a result of a change in value of such investment.
DIRECTORS AND OFFICERS
Gerald E. Bisbee, Jr., Ph.D., Director, 73 Grove Street, New
Canaan, Connecticut. Dr. Bisbee has been Chairman and Chief
Executive Officer of Apache Medical Systems, Inc. since December,
1989. Prior to that he was the Chairman and Chief Executive
Officer of Hanger Orthopedic Group and its predecessors since
November 1987; he formerly was a Vice President of Kidder,
Peabody & Co., and Co-Director of the investment banking health
care group; he joined Kidder, Peabody & Co. in 1984 as a
securities analyst.
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F. Wood Fischer, Director, Private Investor since 1990.
Prior to that he was associated with Goldman, Sachs & Co. since
prior to 1990.
Harold J. Morowitz, Director, Professor at George Mason
University, with which he has been associated since prior to
1990. He was previously a Professor of Molecular Biophysics and
Biochemistry at Yale University.
Robert M. Solow, Director, Massachusetts Institute of
Technology, Cambridge, Massachusetts. Dr. Solow is an Institute
Professor in the Department of Economics at Massachusetts
Institute of Technology, with which he has been associated since
1950. Dr. Solow was awarded the Alfred Nobel Memorial Prize in
Economic Science in 1987.
Edward S. Burke, President and Treasurer, 30 Wall Street, New
York, New York. Mr. Burke has been a Vice President of SG
Pacific Asset Management, Inc. since November, 1989. Prior to
that he was associated with SLH Asset Management and its
predecessor firms since prior to 1985.
Kazuya Ishibashi, Secretary, 30 Wall Street, New York, New
York. Mr Ishibashi has been associated with SG Pacific Asset
Management, Inc. since 1994. Prior to that he was employed by
Yamaichi International Capital Management Co., Ltd.
The Officers conduct and supervise the daily business
operations of the Fund, while the Directors, in addition to their
functions set forth under "Investment Manager" and
"Distribution", review such actions and decide on general policy.
The Company pays each of its Directors who is not an
affiliated person of the Investment Manager or the Fund's
distributor, in addition to certain out-of-pocket expenses, an
annual fee of $5000, plus $500 for each Directors' meeting and
committee meeting attended.
INVESTMENT MANAGER
The Fund's investment adviser and manager is SG Pacific
Asset Management, Inc. ("SGPAM" or the "Investment Manager"),
located at 30 Wall Street, New York, New York 10005. The
services it provides to the Fund are discussed in the Prospectus
under "Management of the Fund -- Investment Manager".
The Investment Manager was organized under the name Yamaichi
Capital Management, Inc. as a New York corporation on March 3,
1981. The Investment Manager is a subsidiary of SG Yamaichi
Asset Management Co., Ltd. (previously Yamaichi International
Capital Management Company, Limited ("SG Yamaichi")), Japan's
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<PAGE>
oldest investment management company, which managed aggregate
assets in excess of approximately $19 billion as of March 31,
1998. SG Yamaichi was, until February 27, 1998, indirectly owned
and controlled by Yamaichi Securities Company, Limited, which
ceased operations on March 31, 1998. On February 27, 1998
Societe Generale Asset Management (North Pacific) Co., Ltd.
("SGAM"), a wholly-owned subsidiary of Societe Generale,
purchased an 85% interest in SG Yamaichi. In addition to serving
as investment manager to the Fund, the Investment Manager
currently manages in excess of $700 million for other
institutional clients.
For its services, the Investment Manager receives, pursuant
to a Management Agreement (the "Management Agreement"), a fee at
an annual rate of 1% of the Fund's average daily net assets. The
fee is computed daily and payable monthly. For the fiscal years
ended December 31, 1995, 1996 and 1997, the Fund paid the
Investment Manager $200,284, $160,502 and $130,631 respectively,
for its services performed under the Management Agreement.
The Management Agreement provides that the Investment Manager
shall not be liable to the Fund for any act or omission by the
Investment Manager or for any loss sustained by the Fund or its
shareholders except in the case of the Investment Manager's
willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations or duty. The Management Agreement
provides that it shall terminate automatically if assigned, and
that it may be terminated without penalty by either party upon
not more than 60 days', nor less than 30 days', written notice.
The Management Agreement, which became effective on April 23,
1988, shall continue in effect for a period of not more than two
years and thereafter from year to year only so long as such
continuance is specifically approved at least annually in
conformity with the Investment Company Act of 1940, as amended
(the "1940 Act"). The Management Agreement was initially
approved by the Company's Board of Directors, including all of
the Directors who are not interested persons as defined in the
1940 Act, at a meeting of the Board of Directors on April 20,
1998. It was approved by the sole shareholder of the Fund on
April 20, 1998. The Management Agreement replaced an earlier,
substantially identical Management Agreement that terminated
because of its technical assignment as a result of the purchase
on February 27, 1998 of an 85% interest in SG Yamaichi, the
corporate parent of the Investment Manager, by SGAM.
DISTRIBUTION
The Fund's distributor and other broker-dealers pay
commissions to salesmen as well as paying the cost of printing
and mailing prospectuses to potential investors and of any
advertising incurred by them in connection with their
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distribution of Fund shares. The Fund has adopted a Plan of
Distribution under Rule 12b-1 (the "12b-1 Plan") under the 1940
Act pursuant to which the Investment Manager and the Fund's
distributor may make certain payments (from its own resources
which may include fees received from the Fund) to its distributor
and provide reimbursement in respect of payments made by the
distributor to other dealers and certain of its expenses in
connection with the sale of the Fund's shares. Direct "trail"
payments which may be made by the Investment Manager to the
distributor under the Plan, as opposed to reimbursement made in
respect of actual payments and expenses incurred by the
distributor in connection with its activities under the Plan, are
currently based on the value of assets of the distributor's
clients that have been in the Fund more than one year and are
subject to the following limits: .20 of 1% of the average daily
value on an annual basis of such assets up to and including $110
million and .30 of 1% of the average daily value on an annual
basis of such assets in excess of $110 million. The 12b-1 Plan
in its present form does not provide for any payments by the Fund
and is essentially "defensive" in nature.
Pursuant to the 12b-1 Plan, the Fund's distributor shall
provide the Company, for review by the Directors, and the
Directors shall review, at least quarterly, a written report of
the amounts expended under the 12b-1 Plan and the purpose for
which such expenditures were made. The Directors have determined
that, in their judgment, there is a reasonable likelihood that
the 12b-1 Plan will benefit the Fund and its shareholders. In
the Directors' quarterly review of the 12b-1 Plan, they will
consider its continued appropriateness and the level of payments.
For the fiscal year ended December 31, 1997 no payments were made
under the Plan.
NET ASSET VALUE
The net asset value per share is the net worth of the Fund
(assets, including securities at value, minus liabilities)
divided by the number of shares outstanding. For valuation
purposes, quotations of foreign securities in a foreign currency
are converted to U.S. dollar equivalents using the prevailing
market rate last quoted by the Custodian, as of 11:00 a.m., New
York time. The Board of Directors has fixed the specific time of
day for the computation of the Fund's net asset value to be as of
the close of trading on the New York Stock Exchange (which is
currently 4:00 p.m., New York time) on each day that the Exchange
is open. Generally, trading in foreign securities, as well as
corporate bonds, U.S. Government securities and money market
instruments, is substantially completed each day at various times
prior to the close of the New York Stock Exchange. The values of
such securities used in computing the net asset value of the
Fund's shares are determined as of such times. Foreign currency
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exchange rates are also generally determined prior to the close
of the New York Stock Exchange.
The value of an investment listed on a securities exchange or
on the NASDAQ National Market System is based on its last sale
price on that exchange prior to the time the Fund's assets are
valued. In the absence of recorded sales, the average of readily
available closing bid and asked prices on such exchanges will be
used. Should an extraordinary event, which is likely to affect
the value of the security, occur after the close of an exchange
on which a portfolio security is traded, such security will be
valued at its fair value as determined in good faith by the
Investment Manager under procedures established by and under the
general supervision of the Company's Board of Directors.
Unlisted securities are valued at the average of the quoted
bid and asked prices in the over-the-counter market. Securities
or other assets for which market quotations are not readily
available are valued by appraisal at their fair value as
determined in good faith by the Investment Manager under the
procedures described above. Investments in debt securities
having a maturity of 60 days or less are valued at amortized
cost, if their term to maturity from the date of purchase was
less than 60 days, or by amortizing their value on the 61st day
prior to maturity, if their term to maturity from date of
purchase by the Fund was more than 60 days, unless the Board of
Directors determines that this does not represent fair value.
The Fund will compute its net asset value on days the New York
Stock Exchange is open for trading, except on days in which no
orders to purchase, sell or redeem Fund shares have been
received, or in which changes in the value of the Fund's
portfolio securities do not affect its net asset value.
PORTFOLIO TRANSACTIONS AND BROKERAGE
SGPAM is responsible for decisions to buy and sell securities
for the Fund, the selection of brokers and dealers to effect
these transactions and the negotiation of brokerage commissions,
if any. Purchases and sales of securities on a securities
exchange are effected through brokers who charge a negotiated
commission for their services. Orders may be directed to any
broker including, to the extent and in the manner permitted by
applicable law, the Fund's distributor.
In the over-the-counter market, securities are generally
traded on a "net" basis with dealers acting as principals for
their own accounts without stated commissions, although the price
of the securities usually includes profits to the dealers. In
underwritten offerings, securities are purchased at a fixed price
which includes compensation to the underwriter, generally
referred to as the underwriter's "concession" or "discount". On
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occasion, certain money market instruments may be purchased
directly from an issuer, in which case no commissions or
discounts are paid. The Fund will not deal with its distributor
in any transaction in which its distributor acts as principal.
Thus it will not deal in over-the-counter securities with its
distributor acting as market maker, and it will not execute a
negotiated trade with its distributor if execution involves its
distributor's acting as principal with respect to any part of the
Fund's order.
In placing orders for portfolio securities of the Fund, SGPAM
is required to give primary consideration to obtaining the most
favorable price and efficient execution. This means that SGPAM
will seek to execute each transaction at a price and commission,
if any, which provide the most favorable total cost or proceeds
reasonably attainable in the circumstances. While SGPAM
generally seeks reasonably competitive spreads or commissions,
the Fund will not necessarily be paying the lowest spread or
commission available. Within the framework of this policy, SGPAM
will consider research and investment services provided by
brokers or dealers who effect or are parties to portfolio
transactions of the Fund, SGPAM or SGPAM'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 SGPAM in
connection with all of its investment activities, and some of
such services obtained in connection with the execution of
transactions for the Fund may be used in managing other
investment accounts. Conversely, brokers furnishing such
services may be selected for the execution of transactions of
such other accounts and the services furnished by such brokers
may be used by SGPAM in providing investment management for the
Fund. Commission rates are established pursuant to negotiations
with the broker based upon the quality and quantity of execution
services provided by the broker in the light of generally
prevailing rates. SGPAM is authorized to pay higher commissions
on brokerage transactions for the Fund to brokers other than its
distributor in order to secure research and investment services
described above, subject to review by the Company's Board of
Directors from time to time as to the extent and continuation of
this practice. The allocation of orders among, and the rates of
commissions paid to, brokers are reviewed periodically by the
Company's Board of Directors. During the fiscal years ended
December 31, 1995, December 31, 1996 and December 31, 1997 the
Fund paid brokerage commissions totaling $64,915, $69,755 and
$65,369.72, respectively, to brokers providing specifically
identified research services.
Subject to the above considerations, SGPAM may use its
distributor as a principal broker for the Fund. In order for its
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distributor to effect any portfolio transactions for the Fund,
the commissions, fees or other remuneration received by its
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 a securities exchange
during a comparable period of time. This standard would allow
the Fund's distributor to receive no more than the remuneration
which an unaffiliated broker would be expected to receive in a
commensurate arm's-length transaction. Furthermore, the
Company's Board of Directors, including a majority of the
Directors who are not "interested" Directors, have adopted
procedures which are reasonably designed to provide that any
commissions, fees or other remuneration paid to the Fund's
distributor are consistent with the foregoing standard.
Brokerage transactions with the Fund's distributor are also
subject to such fiduciary standards as may be imposed by
applicable law.
During the fiscal year ended December 31, 1997, the Fund paid
no brokerage commissions to its former distributor, Yamaichi
International (America), Inc.
TAXES
The Fund intends to qualify as a regulated investment company
under the requirements of the Internal Revenue Code of 1986, as
amended, for each taxable year. In order to qualify as a
regulated investment company, the Fund must, among other things,
(a) derive at least 90% of its gross income from dividends,
interest, payments with respect to loans of stock and securities,
gains from the sale or other disposition of stock, securities or
foreign currencies and other income (including, but not limited
to, gains from options, futures or forward contracts) derived
from its business of investing in stock, securities or
currencies; and (b) diversify its holdings so that, at the end of
each fiscal quarter, (i) at least 50% of the market value of the
Fund's assets are represented by cash, U.S. Government securities
and other securities limited, in respect of any one issuer, to an
amount not greater than 5% of the Fund's assets and not more than
10% of the outstanding voting securities of such issuer, and
(ii) not more than 25% of the value of the Fund's assets is
invested in the securities of any one issuer (other than U.S.
Government securities). These requirements may limit the Fund's
ability to invest in certain types of assets.
For Federal income tax purposes, gain or loss from the
disposition of a forward contract denominated in a foreign
currency which is attributable to fluctuations in the value of
the foreign currency between the date of acquisition of the
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contract and the date of disposition is treated as ordinary gain
or loss.
If the Fund purchases shares in certain foreign investment
entities, called "passive foreign investment companies" ("PFIC"),
the Fund will be subject to U.S. federal income tax, and an
additional charge in the nature of interest in respect of
deferred taxes, on a portion of any "excess distribution" from
the PFIC or gain from the disposition of such shares even if the
entire "excess distribution" or gain is distributed as a taxable
dividend by the Fund to its shareholders. If the Fund were to
invest in a PFIC and elected to treat the PFIC as a "qualified
electing fund" under the Code, in lieu of the foregoing
treatment, the Fund would be required to include in income each
year a portion of ordinary earnings and net capital gains of the
qualified electing fund, even if not distributed to the Fund, and
such amounts would be subject to the 90% and calendar year
distribution requirements described above.
Pursuant to the Taxpayer Relief Act of 1997 the Fund can make
a "mark-to-market" election, i.e., treat the shares of PFICs as
sold on the last day of the Fund's taxable year, and thus avoid
the special Federal income tax and interest charge. The gains
the Fund recognizes from the mark-to-market election would be
included as ordinary income in the net investment income the Fund
must distribute to shareholders, notwithstanding that the Fund
would receive no cash in respect of such gains.
PERFORMANCE INFORMATION
The Fund may from time to time advertise its total return.
The average annual total return for shares of the Fund for the
one year and five year periods ended December 31, 1997 was 15.72%
and 13.4% respectively. These amounts are computed by assuming
a hypothetical initial payment of $1,000. It was assumed that
all of the dividends and distributions paid by the Fund over the
relevant time periods were reinvested on ex-dividend date. It
was then assumed that at the end of each relevant period, the
entire amount was redeemed. The average annual total return was
then determined by calculating the annual rate required for the
initial payment to change to the amount which would have been
received upon redemption. Total return does not take into
account any federal or state income taxes that may be payable.
See "Performance Information" in the Prospectus.
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Total return is calculated as follows:
n
P (1+T) = (ERV)
Where: P = a hypothetical initial payment of $1,000
T = average annual total return.
n = number of years
ERV = ending redeemable value of the initial payment.
CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT
Brown Brothers Harriman & Co. (the "Custodian") serves as
Custodian for the Fund's portfolio securities and cash. In that
capacity it maintains certain financial and accounting books and
records pursuant to agreements with the Fund.
The Fund has retained Countrywide Fund Services, Inc., P.O.
Box 5354, Cincinnati, Ohio (the "Transfer Agent"), to serve as
the Fund's transfer agent, dividend paying agent and shareholder
service agent. The Transfer Agent is a wholly-owned indirect
subsidiary of Countrywide Credit Industries, Inc., a New York
Stock Exchange listed company principally engaged in the business
of residential mortgage lending. The Transfer Agent also
provides accounting and pricing services to the Fund. The
Transfer Agent receives a monthly fee from the Fund for
calculating daily net asset value per share and maintaining such
books and records as are necessary to enable it to perform its
duties.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand LLP, 1 Post Office Square, Boston,
Massachusetts 02109, serves as the Fund's independent public
accountants, and in that capacity will audit the Fund's annual
financial statements.
YAMAICHI GLOBAL FUND
(A Portfolio of Yamaichi Funds, Inc.)
FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1997
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REPORT OF INDEPENDENT ACCOUNTANTS
To The Shareholders and Board of Directors
of SGY Global Fund (formerly Yamaichi Global Fund),
a portfolio of SGY Funds, Inc. (formerly Yamaichi Funds, Inc.):
We have audited the accompanying statement of assets and
liabilities of Yamaichi Global Fund, a portfolio of Yamaichi
Funds, Inc., including the portfolio of investments as of
December 31, 1997 and the related statement of operations for
the year then ended, the statement of changes in net assets for
each of the two years in the period then ended and the financial
highlights for each of the nine years in the period then ended
and for the period from June 10, 1988 (commencement of
operations) through December 31, 1988. These financial
statements and the financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether
the financial statements and the financial highlights are free
of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation
of securities owned as of December 31, 1997 by correspondence
with custodian and brokers. An audit also includes assessing
the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of Yamaichi Global Fund as of
December 31, 1997, the results of its operations for the year
then ended, the changes in its net assets for each of the two
years in the period then ended and the financial highlights for
each of the nine years in the period then ended and for the
period from June 10, 1988 (commencement of operations) through
December 31, 1988, in conformity with generally accepted
accounting principles.
Boston, Massachusetts
April 29, 1998
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YAMAICHI GLOBAL FUND
(A Portfolio of Yamaichi Funds, Inc.)
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
ASSETS
Investments at value (cost $7,975,657, Note 2A) $10,054,211
Foreign currencies 97,096
Cash 96,687
Dividends receivable 11,515
Receivable for taxes withheld 2,865
___________
Total assets 10,262,374
LIABILITIES
Custodian and fund accounting fees payable 30,992
Accrued professional fees 23,950
Accrual for Directors' fees (Note 3B) 9,619
Investment Advisory fees payable (Note 3A) 9,583
Accrued expenses and other payables 17,082
Transfer Agent fee payable 10,400
Accrued printing expenses 14,033
___________
Total liabilities 115,659
___________
Net assets for 1,117,700 shares outstanding (Note 5) $10,146,715
===========
Net assets consist of:
Accumulated net realized gain on investments and foreign
currency transactions (Note 2B) 1,225,440
Unrealized appreciation of investments, foreign currency
holdings, and other net assets (Note 2A) 2,175,482
Par value (Note 5) 11,177
Paid-in capital in excess of par value (Notes 1 and 5) 6,734,616
___________
Total net assets at value $10,146,715
===========
Net asset value and redemption price per share
($10,146,715 / 1,117,700 shares) $ 9.08
Maximum offering price per share ((100 / 95.25)
x $9.08) $ 9.53
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
YAMAICHI GLOBAL FUND
(A Portfolio of Yamaichi Funds, Inc.)
STATEMENT OF OPERATIONS
for the year ended December 31, 1997
Income (Note 2D):
Dividends (net of foreign withholding taxes of $14,279) $ 197,665
Interest 10,386
_________
_ Total investment income 208,051
Expenses:
Investment Advisory fees (Note 3A) $130,631
Custodian and fund accounting expense 124,756
Professional fees 29,324
Transfer Agent expense 33,756
Directors' fees (Note 3B) 27,073
Other expenses 13,520
Insurance expense 8,290
________
Total expenses 367,350
_________
Net investment income (loss) (159,299)
Realized and unrealized gain (loss) on investments and foreign
currencies:
Net realized gain (loss) on investments sold 2,370,650
Net realized gain (loss) on foreign currency transactions (20,440)
_________
Net realized gain (loss) on investments and foreign currency
transactions 2,350,210
Change in unrealized appreciation (depreciation) of
investments (155,789)
Change in unrealized appreciation (depreciation)
of foreign currencies and other net assets (5,428)
_________
Net unrealized appreciation (depreciation) of investments,
foreign currency holdings and other assets (161,217)
__________
Net realized and unrealized gain (loss) on investments,
foreign currency and other net assets 2,188,993
__________
Net increase (decrease) in net assets resulting from operations $2,029,694
==========
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
YAMAICHI GLOBAL FUND
(A Portfolio of Yamaichi Funds, Inc.)
STATEMENT OF CHANGES IN NET ASSETS
for the years ended December 31, 1997 and 1996
1997 1996
---- ----
Net investment income (loss) $(159,299) $ (21,197)
Net realized gain (loss) on investments and
foreign currency transactions 2,350,210 2,138,530
Net change in unrealized appreciation
(depreciation) of investments, foreign
currency holdings and other net assets (161,217) (616,638)
__________ _________
Net increase (decrease) in net assets resulting
from operations 2,029,694 1,500,695
Distributions to shareholders from:
Net realized gains on investments (1,413,816) (1,861,747)
Net increase (decrease) in net assets from Fund
share transactions (Note 5) (3,770,579) (6,514,073)
___________ ___________
Net increase (decrease) in net assets (3,154,701) (6,875,125)
Net assets:
Beginning of period 13,301,416 20,176,541
___________ __________
End of period $10,146,715 $13,301,416
=========== ===========
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
YAMAICHI GLOBAL FUND
(A Portfolio of Yamaichi Funds, Inc.)
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Year Year Year Year Year Year Year Year Year Period
Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88***
________ ________ ________ ________ ________ ________ ________ ________ ________ ___________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of
period $ 8.97 $ 9.32 $ 8.37 $ 9.33 $ 7.35 $ 7.93 $ 7.53 $ 9.95 $ 9.76 $ 9.95
________ _______ _______ _______ _______ _______ _______ _______ _______ _______
Net investment income (loss) (0.14) (0.01) (0.01) (0.05) 0.04 0.06 0.04 0.08# 0.11 0.10
Net realized and unrealized gain
(loss) on investments and
foreign currency 1.52 0.92 1.51 (0.56) 2.42 (0.24) 1.00 (2.01) 1.33 (0.21)
________ _______ _______ _______ _______ _______ _______ _______ _______ _______
Total from investment operations 1.38 0.91 1.50 (0.61) 2.46 (0.18) 1.04 (1.93) 1.44 (0.11)
Distributions to shareholders from:
Capital - (1.26) - - - (0.34) (0.60) (0.32) - -
Net investment income - - - - (0.04) (0.06) (0.04) (0.17) - (0.08)
Funds in excess of net investment
income - - - - (0.02) - - - - -
Net realized gain on investments (1.27) - (0.55) (0.35) (0.42) - - (1.25) -
________ _______ _______ _______ _______ _______ _______ _______ _______ _______
Net asset value:
End of period $9.08 $8.97 $9.32 $8.37 $9.33 $7.35 $7.93 $7.53 $9.95 $9.76
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total return@ 15.72% 10.55% 17.22% (6.40)% 33.62% (2.28)% 14.22% (18.90)% 14.75% (1.11)%
Ratio of investment advisory fees to
average net assets 1.00% 1.00% 1.00 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%*
Ratio of expenses to average net
assets before reduction - - - 2.10 - - - - - -
Ratio of expenses to average net
assets 2.81 2.37% 1.93 2.04% 1.75% 1.78% 1.94% 1.58% 1.73% 1.92%*
Ratio of net investment income (loss)
to average net assets (1.22) (0.13)% 0.14 (0.37)% 0.35 0.77% 0.48% 0.98% 0.64% 1.86%
Portfolio turnover rate 101.46% 65.07% 73.99 70.13% 75.50% 58.20% 47.40% 99.20% 136.00% 68.70%
5
<PAGE>
Shares outstanding at end of period
(000 omitted) 1,118 1,483 2,164 2,249 3,608 6,975 7,397 8,696 5,535 10,630
Average commission rate paid per
share** .000881 .001608
<FN>
* Annualized
@ Represents the aggregate total return for the period indicated and does not reflect any applicable sales charges.
# Net investment income has been calculated based on the average Share method
** For fiscal years beginning on or after September 1, 1995, a fund is required to disclose its average commission rate per
share for security trades on which commissions are Charged. This amount may vary from period to period and fund to
fund depending on the mix of trades executed in various markets where trading practices and commission rate structures
may differ.
*** The fund commenced operations on June 10, 1988.
</TABLE>
The accompanying notes are an integral part of the
financial statements.
6
<PAGE>
YAMAICHI GLOBAL FUND
(A Portfolio of Yamaichi Funds, Inc.)
NOTES TO FINANCIAL STATEMENTS
1. Organization and Business:
Yamaichi Funds, Inc. (the "Company") is an investment company
registered under the Investment Company Act of 1940, as amended.
It is organized as a Maryland corporation and is an open-end,
diversified, management company. The Yamaichi Global Fund
portfolio (the "Fund") is currently the only portfolio of the
Company. On June 6, 1988, the initial 10,100 shares of the Fund
were purchased by Yamaichi International (America), Inc.
("YIA"), the Fund's Distributor. On June 10, 1988, operations
of the Fund commenced. The Funds custodian and fund accounting
agent is Brown Brothers Harriman & Co. The transfer agent is
Shareholder Services Inc.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies in
conformity with generally accepted accounting principles
consistently followed by the Fund in the preparation of the
financial statements.
2. Significant Accounting Policies:
A. Portfolio Valuation
Portfolio securities listed on a securities exchange or on
the NASDAQ National Market System ("NASDAQ") are valued by using
the last reported sale price, or, if no sales are reported, the
average of the last reported bid and asked prices. Securities
not listed on a securities exchange or NASDAQ are at the average
of the quoted bid and asked prices in the over-the-counter
market. If an extraordinary event which is likely to affect the
value of a security occurs after the close of an exchange or
system on which a portfolio security is traded, such security
will be valued at its fair value as determined in good faith by
the Investment Manager under procedures established by, and
under the general supervision of, the Fund's Board of Directors.
Obligations having remaining maturities of 60 days or less are
valued at amortized cost, which approximates market value. All
other securities and assets, including any restricted
securities, will be valued at their fair value as determined in
7
<PAGE>
good faith by the Board of Directors.
B. Forward Foreign Currency Exchange Contracts
From time to time the Fund may enter into forward foreign
currency exchange contracts to hedge certain assets denominated
in foreign currencies. Contracts are valued at the forward rate
and are marked-to-market daily. The change in the market value
is recorded by the Fund as an unrealized gain or loss. The use
of forward foreign currency contracts does not eliminate
fluctuations in the underlying prices of the Fund's portfolio
securities, but it does establish a rate of exchange that can be
achieved in the future. Although forward foreign currency
contracts limit the risk of loss due to a decline in the value of
the hedged currency, they also limit any potential gain that
might result should the value of the currency increase. In
addition, the Fund could be exposed to risks if the
counterparties to the contracts are unable to meet
the terms of their contracts.
C. Foreign Currency Transactions
Transactions denominated in foreign currencies are recorded
in the Fund's records at the current U.S. dollar exchange rate.
Asset and liability accounts that are denominated in foreign
currencies are adjusted to reflect the current exchange rate at
the end of the period. Transaction gains or losses resulting
from changes in the exchange rate during the reporting period or
upon settlement of the foreign currency transaction are reported
in operations for the current period. Since the net assets of
the Fund are presented at the exchange rate and market values at
the close of the period, it is not practical to isolate the
portion of the Fund's unrealized gains or losses arising as a
result of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of
securities during the period.
D. Securities Transactions and Investment Income
Security transactions are recorded on a trade-date basis.
Dividend income is recorded on an ex-dividend date. Interest
income is recorded on an accrual basis. Realized gains or
losses on sales of investments are determined on the identified
cost basis for accounting and tax purposes. Dividend and
interest income are recorded net of foreign taxes withheld where
recovery of such taxes is not assured.
8
<PAGE>
E. Federal Taxes
It is the Fund's policy to qualify as a regulated investment
company by complying with the requirements of the Internal
Revenue Code applicable to regulated investment companies
including the distribution of substantially all of its income to
its shareholders. Therefore, no federal income tax provision is
required. In addition, by distributing during each calendar
year substantially all of its net investment income, capital
gains and certain other amounts, the Fund will not be subject to
a Federal excise tax. Income distributions are determined in
accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are
primarily due to differing treatments of income and gains on
various investment securities held by the Fund, timing
differences and differing characterization of distributions made
by the Fund.
For Federal income tax purposes the cost of investments is
$7,975,656. At December 31, 1997 net unrealized appreciation of
investments was $2,078,555. This consists of aggregate gross
unrealized depreciation and appreciation of $(612,459) and
$2,691,014, respectively.
F. Repurchase Agreements
The Fund may enter into repurchase agreement transactions.
Under each repurchase agreement, the selling institution will be
required to maintain the value of the securities subject to the
repurchase agreement at not less than their repurchase price.
Repurchase agreements could involve certain risks in the event
of default or insolvency of the other party, including possible
delays or restrictions upon the Fund's ability to dispose of the
underlying securities. Yamaichi Capital Management, Inc. (YCM),
the Fund's investment adviser, acting under the supervision of
the Board of Directors, reviews the creditworthiness and value
of the collateral of those banks and dealers with which the Fund
enters into repurchase agreements to evaluate potential risks.
G. Distributions
Distributions to shareholders are recorded on the ex-dividend
date. Income and capital gain distributions are determined in
accordance with federal income tax regulations which may differ
from generally accepted accounting principles. These
differences are primarily due to differing treatments of income
and gains on various investment securities held by the Fund and
timing differences.
9
<PAGE>
3. Fees and Related Party Transactions:
A. Investment Advisory Fees
Under an agreement between the Fund and YCM (the "Management
Contract") YCM reviews and establishes investment policies for
the Fund, and pays all salaries, fees and expenses of officers
and directors of the Fund who are affiliated with YCM or its
affiliates. In addition to reviewing and establishing
investment policies for the Fund, YCM provides executive and
other personnel for management of the Fund and provides
investment advice and portfolio management services. For such
services, YCM receives a monthly fee at the annual rate of 1.0%
of the average daily net assets of the Fund.
B. Directors' Fees
Directors, other than those affiliated with YCM or its
affiliates, receive an annual fee of $5,000 plus $500 for each
meeting of the Board of Directors attended as well as
reimbursement for travel and out of pocket costs.
4. Purchases and Sales of Securities:
During the period, purchases of securities, other than
securities subject to repurchase transactions, short-term
interest bearing securities held to maturity and U.S. Government
Obligations, amounted to $12,060,741. Sales of such securities
during the year amounted to $17,939,332.
5. Share Capital:
The Fund has 50,000,000 authorized shares of common stock, par
value $.01 share, which may, without shareholder approval, be
increased and divided into an unlimited number of portfolios of
such shares. Share capital transactions during the period ended
December 31, 1997 and 1996 as follows:
Year Ended Year Ended
December 31, 1997 December 31, 1996
__________________ _________________
Shares Amount Shares Amount
_______ ________ ______ ______
Sold 37,999 $360,133 251 $ 2,411
Distributions reinvested 4,475 39,693 9,341 82,852
Reacquired (407,596) (4,170,405) (690,828) (6,599,335)
________ __________ ________ __________
Net increase (decrease) (365,122) $(3,770,579) (681,236) $(6,514,072)
======== =========== ======== ===========
10
<PAGE>
At December 31, 1997, there was one significant shareholder who
individually owns more than 5% of the shares outstanding. The
aggregate total value of shares held by this investor amounted
to $9,819,893.
6. Subsequent Events:
In February, 1998, the significant shareholder mentioned in
Note 5 notified the Fund of its plan to redeem its shares of the
Fund and on February 11, 1998 all existing shares of the Fund
were liquidated at an N.A.V. per share of $9.02 and the Fund was
reorganized into a new Fund known as the SGY Global Fund. On
February 27, 1998, Societe Generale Asset Management (North
Pacific) Co. Ltd., a wholly owned subsidiary of Societe
Generale, purchased an 85% interest in Yamaichi International
Capital Management.
11
<PAGE>
YAMAICHI GLOBAL FUND
(A Portfolio of Yamaichi Funds, Inc.)
PORTFOLIO OF INVESTMENTS
Market
Value
Investment by Country Industry Shares U.S. $
_____________________ ________ ______ ________
Argentina (1.50%)
SIDERCA /1 VOTE/ Steel 48,272 $134,222
SIDERAR SA A SHARES Steel 4,000 17,003
________
151,225
Canada (4.23%)
CANADIAN IMPERIAL BANK OF COMMERCE Financial Services 10,000 312,095
TRIMARK FINANCIAL CORP /CAD/ Financial Services 2,500 113,275
________
425,370
Switzerland (4.47%)
NOVARTIS AG REGD Healthcare 163 264,378
BALOISE HOLDINGS REGD Insurance 100 184,985
________
449,363
Germany (3.68%)
MUNCHENER RUCKVERSICHERUNG Insurance 600 228,126
SCHMALBACH-LUBECA Manufacturing 850 141,745
________
369,871
Denmark (0.42%)
GN GREAT STORE LTD Communications 2,500 41,959
________
41,959
France (4.43%)
AXA UAP Insurance 3,000 232,134
CAP GEMINI SA Computers 2,600 213,193
________
445,327
United Kingdom (6.81%)
NATIONAL POWER ORD Utility 15,000 147,812
SHELL TRANSPORT & TRADING REGD Utility 19,000 133,244
WHITBREAD A ORD Merchandising 9,000 132,143
UNITED ASSURANCE GROUP PLC Insurance 12,000 103,468
BRITISH PETROLEUM PLC SPONS ADR Utility 1,000 79,687
POWERGEN ORD Utility 5,000 65,037
BRITISH AIRWAYS ORD Transportation 2,500 22,993
12
<PAGE>
________
684,384
Hong Kong (1.17%)
HSBC HOLDINGS ORD Financial Services 3,500 86,269
HUTCHISON WHAMPOA Conglomerate 5,000 31,294
________
117,563
13
<PAGE>
YAMAICHI GLOBAL FUND
(A Portfolio of Yamichi Funds, Inc.)
PORTFOLIO OF INVESTMENTS
Ireland (0.87%)
RYANAIR HLDGS PLC SPON ADR Transportation 3,500 87,937
________
87,937
Italy (3.71%)
TELECOM ITALIA SPA Communications 38,888 248,364
ISTITUTO MOBILAIRE ITALIANO Financial Services 10,500 124,624
________
372,988
Japan (6.24%)
BANK OF TOKYO-MITSUBISHI Financial Services 12,000 165,391
KANSAI ELECTRIC POWER Utility 7,000 118,453
FUJITSU Computers 10,000 107,198
NOMURA SECURITIES CO LTD Financial Services 8,000 106,585
FUJIKARA Utility 10,000 66,156
TOKYO ELECTRON Utility 2,000 64,012
________
627,795
Netherlands (6.17%)
INTERNATIO-MULLER Conglomerate 11,000 346,099
ING GROEP NV Financial Services 5,000 210,579
INT'L NEDLAND GP NV WTS 3/15/01 Financial Services 6,111 64,011
________
620,689
Sweden (1.00%)
SANDIVIK AB SER B FREE Manufacturing 3,500 100,155
________
100,155
Spain (0.95%)
ENDESA SPON ADR Utility 1,950 95,428
________
95,428
14
<PAGE>
YAMAICHI GLOBAL FUND
(A Portfolio of Yamichi Funds, Inc.)
PORTFOLIO OF INVESTMENTS
Market
Value
Investment by Country Industry Shares U.S. $
_____________________ ________ ______ ________
United States (51.83%)
SIERRA HEALTH SERVICES Healthcare 9,000 $302,626
TELEPHONE & DATA SYSTEMS INC Communications 5,000 232,813
LIBERTY FINANCIAL COS INC Financial Services 6,150 232,163
SAUDI ARABIA INVESTMENT FUND Country Fund 25,000 215,626
PHARMACIA & UPJOHN INC Healthcare 5,000 183,126
CONSECO INC Financial Services 4,000 181,751
CENTURA BANKS INC Financial Services 2,500 172,500
VESTCOM INTL INC Commercial Services 7,500 167,812
ARM FINANCIAL GROUP INC CL A Financial Services 6,000 158,250
GTE CORP Communications 3,000 156,750
BINDLEY WESTERN INDS Healthcare 5,000 154,375
AMERICAN HOME PRODUCTS Healthcare 2,000 153,000
LEHMAN BROTHERS HLDGS INC Financial Services 3,000 153,000
PHILIPS NV ADR /NY SHS/ Manufacturing 2,500 151,250
WESTERN NATIONAL Insurance 5,000 148,125
LOCKHEED MARTIN CORP Computers 1,500 147,750
BANKAMERICA CORP Financial Services 2,000 146,000
NCR CORPORATION Computers 5,000 139,062
VERMONT FINANCIAL SERVICES CORP Financial Services 5,000 138,750
PHILIP MORRIS COS INC Merchandising 3,000 135,937
PACIFIC CENTURY FINL CORP Financial Services 5,000 123,750
15
<PAGE>
ADVEST GROUP INC Financial Services 5,000 123,437
FORD MOTOR CO. Automotive 2,500 121,718
SUN MICROSYSTEMS INC Computers 3,000 119,625
SUN INTL HOTELS LTD Hotel 3,000 112,875
ANALOG DEVICES INC Utility 4,000 110,750
16
<PAGE>
YAMAICHI GLOBAL FUND
(A Portfolio of Yamichi Funds, Inc.)
PORTFOLIO OF INVESTMENTS
BUTLER MANUFACTURING CO Construction 3,300 106,425
INTERNATIONAL BUSINESS MACHINES Computers 1,000 104,562
MICRON TECH Utility 4,000 104,000
GT GLOBAL ESTN EUROPE FD BEN Country Fund 8,000 101,000
BOEING CO Defense 1,950 95,428
AGCO CORP Manufacturing 2,500 73,125
INTEL CORP Computers 1,000 70,250
CUMMINS ENGINE CO INC Manufacturing 1,000 59,062
TTI TEAM TELECOM Computers 10,000 51,875
SAKS HOLDINGS INC Merchandising 2,500 51,718
PAKISTAN INVESTMENT FUND Country Fund 7,500 36,562
AT HOME CORP SER A Computers 1,300 32,662
TECHFORCE CORP Computers 5,000 30,000
CONTINENTAL NATURAL GAS INC Utility 2,500 26,875
QUALIX GROUP INC Computers 7,500 22,266
MARKWEST HYDROCARBON INC Utility 1,000 22,000
GEOTEK IND INC Communications 10,000 15,313
AEHR TEST SYSTEMS Utility 1,000 8,000
GILAT COMMUNICATIONS LTD Communications 1,000 7,375
MIDWAY AIRLINES CORP Transportation 300 4,537
FRESENIUS NATL MEDICAL CARE PFD Healthcare 2,500 175
BEN FRANKLIN RETAIL STORES INC Merchandising 9 1
_____ _________
5,210,635
17
<PAGE>
South Africa (2.52%)
LIBLIFE STRATEGIC INVESTMENTS Conglomerate 75,000 253,522
_________
253,522
Total Investments (Cost $ 7,975 657) $10,054,211
===========
18
<PAGE>
YAMAICHI GLOBAL FUND
(A Portfolio of Yamichi Funds, Inc.)
PORTFOLIO OF INVESTMENTS
% of Net
Industry Diversification (Unaudited) Assets
________
Automotive 1.20%
Commercial Services 1.65%
Communications 6.92%
Computers 10.23%
Conglomerate 6.22%
Construction 1.05%
Country Fund 3.48%
Defense 0.94%
Financial Services 25.75%
Healthcare 10.42%
Hotel 1.11%
Insurance 8.84%
Manufacturing 5.18%
Merchandising 3.15%
Steel 1.49%
Transportation 1.14%
Utility 10.31%
Other net assets 0.92%
_______
100.00%
Total Net Assets =======
19
<PAGE>
OTHER INFORMATION
[PART C]
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
The following financial statement is included in the
Prospectus constituting Part A of this Registration Statement.
Financial Highlights:
The following financial statements are included in the
Statement of Additional Information constituting Part B of this
Registration Statement.
Report of Independent Accountants.
Portfolio of Investments
December 31, 1997
Statement of Assets and Liabilities
December 31, 1997
Statement of Operations
January 1, 1997 through December 31, 1997
Statement of Changes in Net Assets
Fiscal years ended December 31, 1996 and
December 31, 1997
Notes to Financial Statements
December 31, 1997
(b) Exhibits:
Exhibit
Number Description
1(a) -- Articles of Incorporation.
1(b) -- Articles of Amendment.*
1(c) -- Articles of Amendment.
2 -- By-laws.*
4 -- Specimen Certificate for Shares
of Common Stock.*
5 -- Management Agreement.*
6(a) -- Distribution Agreement.*
6(b) -- Selected Dealers Agreement.*
8 -- Custodian Agreement.*
9 -- Transfer and Dividend
20
<PAGE>
Disbursement Agency Agreement.*
10 -- Opinion of Sullivan & Cromwell.*
11 -- Consent of Independent Accountants.
13 -- Purchase Agreement.*
15(a) -- Plan of Distribution under Rule 12b-1.*
15(b) -- Distribution Plan Agreement.*
16 -- Performance Quotation Computation.
Other Exhibit -- Power of Attorney of Gerald E. Bisbee,
Jr. and Robert M. Solow*
- -----------------------
* Previously filed.
Item 25. Persons Controlled by or under Common Control with
Registrant.
None.
Item 26. Number of Holders of Securities.
Title of Class Number of Holders
Common Stock [ ]
SGY Global Fund
par value $0.01 per share.
Item 27. Indemnification.
As permitted by Sections 17(h) and 17(i) of the Investment
Company Act of 1940, as amended (the "1940 Act"), and pursuant to
Article VIII of the Fund's Articles of Incorporation (Exhibit 1
to the Registration Statement), Officers, Directors, employees
and agents of the Fund may be indemnified against certain
liabilities in connection with the Fund, and pursuant to Section
5 of the Distribution Agreement (Exhibit 6 (a) to the
Registration Statement), Yamaichi International (America), Inc.,
as Distributor of the Fund, may be indemnified against certain
liabilities which it may incur. Such Article VIII of the
Articles of Incorporation and Section 5 of the Distribution
Agreement are hereby incorporated by reference in their entirety.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act"), may be
permitted to Directors, Officers and controlling persons of the
Registrant and the principal underwriter pursuant to the
foregoing provisions or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses
21
<PAGE>
incurred or paid by a Director, Officer, or controlling person of
the Registrant and the principal underwriter in connection with
the successful defense of any action, suit or proceeding) is
asserted against the Registrant by such Director, Officer or
controlling person or the principal underwriter in connection
with the shares being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
The Registrant hereby undertakes that it will apply the
indemnification provisions of its Articles of Incorporation in a
manner consistent with Release No. 11330 of the Securities and
Exchange Commission under the 1940 Act so long as the
interpretation of Sections 17(h) and 17(i) of such Act remain in
effect and are consistently applied.
Item 28. Business and Other Connections of Investment
Manager.
See "Investment Manager" in the Statement of Additional
Information.
The business and other connections of the Officers and
Directors of SG Pacific Asset Management, Inc. ("SGPAM") are as
follows:
Name and Address Position with Fund Business Position
Yoichi Kataoka None Chairman, President
30 Wall Street and Director of
New York, New York SGPAM.
Hiroo Takaishi
1-14-8 Ningyo-cho, None Director.
Nihonbashi, Chuo-ku
Tokyo 103 Japan
Edward S. Burke Senior Vice
30 Wall Street President
New York, New York of SGPAM
- ----------------------------
* "Interested" director, as defined in the Investment Company
Act of 1940, as amended.
22
<PAGE>
Item 29. Principal Underwriters.
(a) Not applicable.
(b) Not applicable.
(c) Registrant has no principal underwriter who is not an
affiliated person of the Registrant.
Item 30. Location of Accounts and Records.
All accounts, books and other documents required to be
maintained by Section 31(a) of the 1940 Act and the Rules
thereunder will be maintained at the offices of: Brown Brothers
Harriman & Co., 40 Water Street, Boston, Massachusetts 02109; and
the Fund, Two World Trade Center, New York, New York 10048.
Accounts, books and other documents required by pertinent
provisions of Section 31(a) of the 1940 Act and the Rules
thereunder will be kept at the offices of the Fund.
Item 31. Management Services.
Other than as set forth under the captions "Management of the
Fund -- Investment Manager" and "Management of the Fund --
Distributor" in the Prospectus constituting Part A of the
Registration Statement and "Investment Manager" and
"Distributor" in the Statement of Additional Information
constituting Part B of the Registration Statement, the Registrant
is not a party to any management-related service contract.
Item 32. Undertakings.
The undersigned Registrant hereby undertakes to call a meeting
of shareholders for the purpose of voting upon the question of
removal of a Director when requested in writing to do so by the
holders of at least 10% of the Registrant's outstanding shares of
common stock and, in connection with such meeting, to comply with
the provisions of Section 16(c) of the 1940 Act relating to
shareholder communications.
23
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, the
Registrant certifies that it meets all of the requirements for
effectiveness of this registration statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment No. 11 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in The City of New York, State of New York, on the
30th day of April, 1998.
SGY FUNDS, INC.
by /s/Edward S. Burke
-------------------------
Edward S. Burke,
President
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Post-Effective Amendment No. 12 to the Registration
Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
/s/Edward S. Burke
- -------------------------- President and April 30, 1998
Edward S. Burke Treasurer
/s/Kazua Ishibashi
- -------------------------- Secretary April 30, 1998
Kazuya Ishibashi
/s/Edward S. Burke
- -------------------------- Director April 30, 1998
Gerald E. Bisbee, Jr.
by: Edward S. Burke,
Attorney in Fact
/s/Edward S. Burke
------------------------- Director April 30, 1998
F. Wood Fischer
by: Edward S. Burke
Attorney in Fact
/s/Edward S. Burke
- -------------------------- Director April 30, 1998
Harold J. Morowitz
by: Edward S. Burke
24
<PAGE>
Attorney in Fact
/s/Edward S. Burke
- -------------------------- Director April 30, 1998
Robert M. Solow
by: Edward S. Burke, Attorney in Fact
25
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
1(c) Articles of Amendment
11 Consent of Independent
Accountants
27 Financial Data Schedule
26
02293002.AA5
<PAGE>
YAMAICHI FUNDS, INC.
ARTICLES OF AMENDMENT
(Changing its Name to SGY Funds, Inc.)
Yamaichi Funds, Inc., a Maryland corporation having
its principal place of business in Maryland in Baltimore
City, Maryland (hereinafter called the "Corporation"),
certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The charter of the Corporation is hereby amended
by striking out Article II of the Articles of
Incorporation and inserting in lieu thereof the
following:
SECOND: The name of the corporation (hereinafter
called the "Corporation") is SGY Funds, Inc.
SECOND: The amendment of the charter of the Corporation
as herein set forth was approved by a majority of the entire
Board of Directors of the Corporation, the charter amendment
is limited to a change expressly permitted by Section 2-605
of Title 2 of Subtitle 6 of the Maryland General Corporation
Law to be made without action by the stockholders, and the
Corporation is registered as an open-end company under the
Investment Company Act of 1940.
THIRD: These Articles of Amendment shall be effective
immediately.
The undersigned President of the Corporation
acknowledges these Articles of Amendment to be the corporate
act of the Corporation and states that to the best of his
knowledge, information and belief, the matters and facts set
forth in these Articles with respect to the authorization
and approval of the amendment of the Corporation's charter
are true in all material respects, and that this statement
is made under the penalties of perjury.
<PAGE>
IN WITNESS WHEREOF, Yamaichi Funds, Inc., has caused
these Articles of Amendment to be executed in its name and
on its behalf by its President, Edward S. Burke, and
witnessed by its Assistant Secretary, Kazuya Ishibashi, on
the 23d of April, 1998.
YAMAICHI FUNDS, INC.
/s/ Edward S. Burke
By:_________________________
Edward S. Burke
President
WITNESS:
/s/ K. Ishibashi
_____________________
Kazuya Ishibashi
Secretary
-2-
02293002.AB6
<PAGE>
[LETTERHEAD OF COOPERS & LYBRAND]
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of SGY Funds, Inc.
(formerly Yamaichi Funds, Inc.)
Re: Yamaichi Global Fund:
We hereby consent to the inclusion of our report dated
April 29, 1998 on our audit of the financial statements and
financial highlights of Yamaichi Global Fund as of December 31,
1997 in the Statement of Additional Information with respect to
the Post-Effective Amendment to the Registration Statement on
Form N-1A under the Securities Act of 1933, as amended, of SGY
Funds, Inc. (formerly Yamaichi Funds, Inc.). We further consent
to the reference to our Firm under the captions "Financial
Highlights" in the Prospectus and "Independent Accountants" in
the Statement of Additional Information.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
April 30, 1998
02293002.AC0
<PAGE>
[ARTICLE] 6
[CIK] 0000830272
[NAME] YAMAICHI GLOBAL FUND
[MULTIPLIER] 1
[SERIES]
[NUMBER] 1
[NAME]
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1997
[PERIOD-START] JAN-01-1997
[PERIOD-END] DEC-31-1997
[INVESTMENTS-AT-COST] 7,975,657
[INVESTMENTS-AT-VALUE] 10,054,211
[RECEIVABLES] 14,380
[ASSETS-OTHER] 183,783
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 10,262,374
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 115,659
[TOTAL-LIABILITIES] 115,659
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 6,745,793
[SHARES-COMMON-STOCK] 1,117,700
[SHARES-COMMON-PRIOR] 1,482,822
<ACCUMULATED-NET-CURRENT> 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 1,225,440
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 2,175,482
[NET-ASSETS] 10,146,715
[DIVIDEND-INCOME] 197,665
[INTEREST-INCOME] 10,386
[OTHER-INCOME] 0
[EXPENSES-NET] 367,350
[NET-INVESTMENT-INCOME] (159,299)
[REALIZED-GAINS-CURRENT] 2,350,210
[APPREC-INCREASE-CURRENT] (161,217)
[NET-CHANGE-FROM-OPS] 2,029,694
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 1,413,816
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 37,999
[NUMBER-OF-SHARES-REDEEMED] 407,596
[SHARES-REINVESTED] 4,475
[NET-CHANGE-IN-ASSETS] (3,154,701)
<PAGE>
<ACCUMULATED-NET-PRIOR> 0
[ACCUMULATED-GAINS-PRIOR] 711,329
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 130,631
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 367,350
[AVERAGE-NET-ASSETS] 13,063,100
[PER-SHARE-NAV-BEGIN] 8.97
<PER-SHARE-NET> (0.14)
[PER-SHARE-GAIN-APPREC] 1.52
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] 1.27
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 9.08
[EXPENSE-RATIO] 2.81
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
02293002.AB7
