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FLAG INVESTORS EMERGING GROWTH FUND, INC.
Supplement dated November 13, 1998
to the Prospectuses dated March 1, 1998
The Prospectuses dated March 1, 1998 of Flag Investors Emerging Growth
Fund, Inc. (the "Fund") are hereby amended and supplemented as follows:
At a shareholder meeting held on September 25, 1998, shareholders of
the Fund approved a Sub-Advisory Agreement among the Fund, Investment Company
Capital Corp. ("ICC") and Alex. Brown Capital Advisory & Trust Company
("ABCAT"). Under this new arrangement, ICC will continue to supervise and manage
all of the Fund's operations and will oversee the performance of ABCAT. ABCAT
will be responsible for decisions to buy and sell securities for the Fund, for
broker-dealer selection and for negotiation of commission rates. ICC will
compensate ABCAT out of its advisory fee.
ABCAT is a trust company with approximately $2.9 billion of assets
under management at June 30, 1998. ABCAT employs Frederick L. Meserve who was
formerly an employee of BT Alex. Brown and ICC and has managed the Fund's
investments since 1993. The address of ABCAT is 19 South Street, Baltimore,
Maryland 21202.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
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FLAG INVESTORS EMERGING GROWTH FUND, INC.
Supplement dated November 13, 1998
to the Statement of Additional Information
dated March 1, 1998
The Statement of Additional Information dated March 1, 1998 of Flag
Investors Emerging Growth Fund, Inc. (the "Fund") is hereby amended and
supplemented as follows:
At a shareholder meeting held on September 25, 1998, shareholders of
the Fund approved a Sub-Advisory Agreement among the Fund, Investment Company
Capital Corp. ("ICC") and Alex. Brown Capital Advisory & Trust Company
("ABCAT"). As compensation for providing sub-advisory services, ABCAT is
entitled to receive a fee from ICC, calculated daily and payable monthly, at the
annual rate of 0.55% of the Fund's average daily net assets, provided that, if
necessary, ABCAT's annual compensation will be reduced in an amount proportional
to the Advisor's waiver so that the Fund's total expenses for that year do not
exceed 1.50% of the Flag Investors Class A Shares' average daily net assets.
ABCAT is a trust company chartered under the laws of the State of
Maryland. It is a wholly-owned subsidiary of Brown Capital Holdings Incorporated
("Brown Capital Holdings"), a Maryland corporation whose principal executive
officer is Michael D. Hankin. Brown Capital Holdings is owned by management and
employees of ABCAT and outside investors. The address of ABCAT and Brown Capital
Holdings is 19 South Street, Baltimore, Maryland 21202.
