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PROSPECTUS FEBRUARY 11, 1994
PEOPLES INDEX FUND, INC.
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PEOPLES INDEX FUND, INC. (THE "FUND") IS AN OPEN-END, NON-
DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS AN INDEX
FUND. ITS GOAL IS TO PROVIDE INVESTMENT RESULTS THAT CORRESPOND TO
THE PRICE AND YIELD PERFORMANCE OF PUBLICLY TRADED COMMON STOCKS
IN THE AGGREGATE, AS REPRESENTED BY THE STANDARD & POOR'S 500
COMPOSITE STOCK PRICE INDEX. IN ANTICIPATION OF TAKING A MARKET
POSITION, THE FUND IS PERMITTED TO PURCHASE AND SELL STOCK INDEX
FUTURES. THE FUND IS NEITHER SPONSORED BY NOR AFFILIATED WITH
STANDARD & POOR'S CORPORATION.
WELLS FARGO NIKKO INVESTMENT ADVISORS ("WFNIA") SERVES AS THE
FUND'S INDEX FUND MANAGER.
THE DREYFUS CORPORATION ("DREYFUS") SERVES AS THE FUND'S
ADMINISTRATOR. DREYFUS SERVICE CORPORATION (THE "DISTRIBUTOR"), A
WHOLLY-OWNED SUBSIDIARY OF DREYFUS, SERVES AS THE FUND'S
DISTRIBUTOR.
SHAREHOLDERS WHO REDEEM SHARES WITHIN SIX MONTHS OF THE
OPENING OF THEIR ACCOUNT WILL BE CHARGED A 1% REDEMPTION FEE WHICH
WILL BE DEDUCTED FROM REDEMPTION PROCEEDS. HOWEVER, THE
REDEMPTION FEE WILL NOT BE APPLICABLE TO SHARES HELD IN OMNIBUS
ACCOUNTS.
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THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE
FUND THAT YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND
RETAINED FOR FUTURE REFERENCE.
PART B (ALSO KNOWN AS THE STATEMENT OF ADDITIONAL INFORMATION),
DATED FEBRUARY 11, 1994, WHICH MAY BE REVISED FROM TIME TO TIME,
PROVIDES A FURTHER DISCUSSION OF CERTAIN AREAS IN THIS PROSPECTUS
AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME INVESTORS. IT
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS
INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE
FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-
0144, OR CALL 1-800-645-6561. WHEN TELEPHONING ASK FOR OPERATOR 666.
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THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY. THE FUND'S SHARES INVOLVE
CERTAIN INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THE FUND'S SHARE PRICE AND INVESTMENT RETURN FLUCTUATE AND ARE
NOT GUARANTEED.
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TABLE OF CONTENTS
PAGE
FEE TABLE................................................... 2
CONDENSED FINANCIAL INFORMATION............................. 2
DESCRIPTION OF THE FUND..................................... 3
MANAGEMENT OF THE FUND...................................... 5
HOW TO BUY FUND SHARES...................................... 6
HOW TO REDEEM FUND SHARES................................... 8
SHAREHOLDER SERVICES........................................ 10
SHAREHOLDER SERVICES PLAN................................... 10
DIVIDENDS, DISTRIBUTIONS AND TAXES.......................... 11
PERFORMANCE INFORMATION..................................... 12
GENERAL INFORMATION......................................... 12
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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.
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FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES
Redemption Fees (as percentage of amount redeemed)................. 1.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees.................................................... .10%
Shareholder Services Fees.......................................... .10%
Other Expenses..................................................... .33%
Total Fund Operating Expenses...................................... .53%
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
You would pay the following expenses
on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period: $5 $17 $30 $66
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL
PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN GREATER
OR LESS THAN 5%.
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The purpose of the foregoing table is to assist you in understanding the
various costs and expenses that investors will bear, directly or indirectly,
the payment of which will reduce investors' return on an annual basis. The
information in the foregoing table does not reflect any fee waivers or
expense reimbursement arrangements that may be in effect. You can
purchase Fund shares without charge directly from the Distributor; you
may be charged a nominal fee if you effect transactions in Fund shares
through a securities dealer, bank or other financial institution. See
"Management of the Fund."
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Coopers &
Lybrand, the Fund's independent accountants, whose report thereon
appears in the Statement of Additional Information. Further financial data
and related notes are included in the Statement of Additional Information,
available upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This
information has been derived from information provided in the Fund's
financial statements.
<TABLE>
<CAPTION>
Year Ended October 31,
------------------------------------------------
PER SHARE DATA: 1990(1) 1991 1992 1993
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net asset value, beginning of year................................ $12.50 $10.86 $14.16 $15.16
------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net............................................. .17 .34 .41 .30
Net realized and unrealized gain (loss) on investments (1.81) 3.18 .97 1.86
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS.............................. (1.64) 3.52 1.38 2.16
------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net.............................. -- (.22) (.38) (.40)
Dividends from net realized gain on investments................... -- -- -- (.04)
------ ------ ------ ------
Total Distributions........................................... -- (.22) (.38) (.44)
------ ------ ------ ------
Net asset value, end of year...................................... $10.86 $14.16 $15.16 $16.88
====== ====== ====== ======
TOTAL INVESTMENT RETURN.............................................. (13.12%)(2) 32.85% 9.90% 14.49%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........................... -- -- -- .39%
Ratio of net investment income to average net assets.............. 3.46%(2) 3.45% 3.04% 2.36%
Decrease reflected in above expense ratios due to undertakings
by WFNIA and Dreyfus.......................................... 1.42%(2) .78% .65% .14%
Decrease reflected in above expense ratios due to
redemption fee................................................ .08%(2) .10% -- --
Portfolio Turnover Rate........................................... 1.21%(2) .69% 3.10% 3.77%
Net Assets, end of year (000's Omitted)........................... $29,266 $69,211 $92,598 $281,403
- --------------------------
(1) From January 2, 1990 (commencement of operations) to October 31, 1990.
(2) Not annualized.
</TABLE>
(2)
Further information about the Fund's performance is contained in the
Fund's annual report, which may be obtained without charge by writing to
the address or calling the number set forth on the cover page of this
Prospectus.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE - The Fund's investment objective is to provide
investment results that correspond to the price and yield performance of
publicly-traded common stocks in the aggregate, as represented by the
Standard & Poor's 500 Composite Stock Price Index* (the "Index"). The
Fund's investment objective cannot be changed without approval by the
holders of a majority (as defined in the Investment Company Act of 1940)
of the Fund's outstanding voting shares. There can be no assurance that the
Fund's investment objective will be achieved.
MANAGEMENT POLICIES - The Fund attempts to duplicate the investment
results of the Index, which is composed of 500 selected common stocks,
most of which are listed on the New York Stock Exchange. Standard &
Poor's Corporation chooses the stocks to be included in the Index solely on
a statistical basis. The Fund attempts to be fully invested at all times in
the stocks that comprise the Index and stock index futures as described
below and, in any event, at least 80% of the Fund's net assets will be so
invested. Inclusion of a stock in the Index in no way implies an opinion by
Standard & Poor's Corporation as to its attractiveness as an investment.
The Fund uses the Index as the standard performance comparison because
it represents approximately 69% of the total market value of all common stocks
and is well known to investors. An investment in the Fund involves risks similar
to those of investing in common stocks.
The weightings of stocks in the Index are based on each stock's relative
total market capitalization; that is, its market price per share times the
number of shares outstanding. Because of this weighting, as of October 31,
1993, 46% of the Index was composed of the 50 largest companies. WFNIA
generally selects stocks for the Fund's portfolio in the order of their
weightings in the Index beginning with the heaviest weighted stocks. With
respect to the Fund's assets invested in the stocks in the Index, the
percentage of such assets invested in each stock is approximately the
same as the percentage it represents in the Index.
No attempt is made to manage the portfolio in the traditional sense
using economic, financial and market analysis. The Fund is managed using
a computer program to determine which stocks are to be purchased or sold
to replicate the Index to the extent feasible. From time to time,
administrative adjustments may be made in the Fund's portfolio because
of changes in the composition of the Index, but such changes should be
infrequent.
The Fund believes that the indexing approach described above is an
effective method of substantially duplicating percentage changes in the
Index. It is a reasonable expectation that there will be a close correlation
between the Fund's performance and that of the Index in both rising and
falling markets. The Fund will attempt to achieve a correlation between
the performance of its portfolio and that of the Index of at least 0.95,
without taking into account expenses. A correlation of 1.00 would indicate
perfect correlation, which would be achieved when the Fund's net asset
value, including the value of its dividend and capital gains distributions,
increases or decreases in exact proportion to changes in the Index. The
Fund's ability to correlate its performance with the Index, however, may
be affected by, among other things, changes in securities markets, the
manner in which the Index is calculated by Standard & Poor's Corporation
and the timing of purchases and redemptions. In the future, the Board of
Directors, subject to the approval of shareholders, may select another
index if such a standard of comparison is deemed to be more
representative of the performance of common stocks.
The Fund's ability to duplicate the performance of the Index also
depends to some extent on the size of the Fund's portfolio and the size of
cash flows into and out of the Fund. Investment changes to accommodate
these cash flows are made to maintain the similarity of the Fund's
portfolio to the Index to the maximum practicable extent.
From time to time to increase its income, the Fund may lend securities
from its portfolio to brokers, dealers and other financial institutions needing
to borrow securities to complete certain transactions. Such loans may not exceed
30% of the value of the Fund's total assets. In connection with such loans, the
Fund receives collateral consisting of cash, U.S. Government securities or
irrevocable letters of credit. Such collateral is main-
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*"Standard & Poor's 500," "S&P" and "S&P 500" are trademarks of
Standard & Poor's Corporation and have been licensed for use by the Fund.
The Fund is not sponsored, endorsed, sold or promoted by Standard &
Poor's Corporation.
(3)
tained at all times in an amount equal to at least 100% of the current
market value of the loaned securities. The Fund continues to be entitled to
payments in amounts equal to the dividends, interest or other
distributions payable on the loaned security and receives interest on the
amount of the loan. Such loans are terminable at any time upon specified
notice. The Fund might experience risk of loss if the institution with
which it has engaged in a portfolio loan transaction breaches its
agreement with the Fund.
When the Fund has cash reserves, the Fund may invest in U.S.
Government securities, repurchase agreements, time deposits,
certificates of deposit, bankers' acceptances and high-grade commercial
paper. See the Fund's Statement of Additional Information for a
description of these instruments. The Fund also may purchase stock index
futures in anticipation of taking a market position when, in the opinion of
WFNIA, available cash balances do not permit an economically efficient
trade in the cash market. The Fund also may sell stock index futures to
terminate existing positions it may have as a result of its purchases of
stock index futures.
STOCK INDEX FUTURES - A stock index future obligates the seller to
deliver (and the purchaser to take) an amount of cash equal to a specific
dollar amount times the difference between the value of a specific stock
index at the close of the last trading day of the contract and the price at
which the agreement is made. No physical delivery of the underlying
stocks in the index is made. The Fund purchases and sells futures
contracts on the stock index for which it can obtain the best price with
consideration also given to liquidity.
Initially, when purchasing or selling futures contracts, the Fund is
required to deposit with its custodian in the broker's name an amount of
cash or cash equivalents up to approximately 10% of the contract amount.
This amount is subject to change by the exchange or board of trade on
which the contract is traded and members of such exchange or board of
trade may impose their own higher requirements. This amount is known as
"initial margin" and is in the nature of a performance bond or good faith
deposit on the contract which is returned to the Fund upon termination of
the futures position, assuming all contractual obligations have been
satisfied. Subsequent payments, known as "variation margin," to and from
the broker, are made daily as the price of the index or securities
underlying the futures contract fluctuates, making the long and short
positions in the futures contract more or less valuable, a process known
as "marking-to-market." At any time prior to the expiration of a futures
contract, the Fund may elect to close the position by taking an opposite
position at the then prevailing price, which will operate to terminate the
Fund's existing position in the contract.
Using futures in anticipation of market transactions involves certain
risks. Although the Fund intends to purchase or sell futures contracts only
if there is an active market for such contracts, no assurance can be given
that a liquid market will exist for any particular contract at any
particular time. In addition, the price of stock index futures may not
correlate perfectly with the movement in the stock index due to certain
market distortions. First, all participants in the futures market are
subject to margin deposit and maintenance requirements. Rather than
meeting additional margin deposit requirements, investors may close
futures contracts through offsetting transactions which would distort the
normal relationship between the index and futures markets. Secondly,
from the point of view of speculators, the deposit requirements in the
futures market are less onerous than margin requirements in the
securities market. Therefore, increased participation by speculators in
the futures market also may cause temporary price distortions. Because of
the possibility of price distortions in the futures market and the
imperfect correlation between movements in the stock index and
movements in the price of stock index futures, a correct forecast of
general market trends still may not result in a successful hedging
transaction.
The Fund is not a commodity pool. The Fund's commodity transactions
must constitute bona fide hedging or other permissible transactions
pursuant to regulations promulgated by the Commodity Futures Trading
Commission. In addition, the Fund may not engage in such transactions if
the amount of initial margin deposits, other than bona fide hedging
transactions, would exceed 5% of the liquidation value of the Fund's
assets, after taking into account unrealized profits and losses on such
contracts it has entered into. In connection with its futures transactions,
the Fund may be required to establish and maintain at its custodian bank a
segregated account consisting of cash or high quality money market
instruments in an amount equal to the market value of the underlying
commodity less any amount deposited as margin.
(4)
CERTAIN FUNDAMENTAL POLICIES - The Fund may: (i) invest up to 5% of its
assets in securities of any company having less than three years'
continuous operation (including operations of any predecessors); (ii)
borrow money from banks (which, if permitted by applicable regulatory
authority, may be from Wells Fargo Institutional Trust Company, N.A. or
Wells Fargo Bank, N.A., affiliates of WFNIA), but only for temporary or
emergency (not leveraging) purposes in an amount up to 15% of the value
of the Fund's total assets (including the amount borrowed) valued at the
lesser of cost or market, less liabilities (not including the amount
borrowed) at the time the borrowing is made. While borrowings exceed 5%
of the value of the Fund's total assets, the Fund will not make any
additional investments; (iii) pledge, hypothecate, mortgage or otherwise
encumber its assets, but only in an amount up to 15% of the value of its
total assets to secure borrowings for temporary or emergency purposes.
Collateral arrangements with respect to initial or variation margin for
futures contracts will not be deemed to be pledges of the Fund's assets;
(iv) invest up to 25% of its assets in the securities of issuers in a single
industry (or more to the extent the Index also is so concentrated); and (v)
invest up to 10% of its net assets in repurchase agreements providing for
settlement in more than seven days after notice and in securities that are
not readily marketable. This paragraph describes fundamental policies
that cannot be changed without approval by the holders of a majority (as
defined in the Investment Company Act of 1940) of the Fund's outstanding
voting shares. See "Investment Objective and Management Policies _
Investment Restrictions" in the Fund's Statement of Additional
Information.
INVESTMENT CONSIDERATIONS - The Fund's classification as a "non-
diversified" investment company means that the proportion of the Fund's
assets that may be invested in the securities of a single issuer is not
limited by the Investment Company Act of 1940. A "diversified" investment
company is required by the Investment Company Act of 1940 generally,
with respect to 75% of its total assets, to invest not more than 5% of
such assets in the securities of a single issuer and to hold not more than
10% of the outstanding voting securities of a single issuer. However, the
Fund intends to conduct its operations so as to qualify as a "regulated
investment company" for purposes of the Internal Revenue Code of 1986,
as amended (the "Code"), which requires that, at the end of each quarter
of its taxable year, (i) at least 50% of the market value of the Fund's total
assets be invested in cash, U.S. Government securities, the securities of
other regulated investment companies and other securities, with such
other securities of any one issuer limited for the purposes of this
calculation to an amount not greater than 5% of the value of the Fund's
total assets and 10% of the outstanding voting securities of such issuer,
and (ii) not more than 25% of the value of its total assets be invested in
the securities of any one issuer (other than U.S. Government securities or
the securities of other regulated investment companies). Since a
relatively high percentage of the Fund's assets may be invested in the
securities of a limited number of issuers, some of which may be within
the same economic sector, the Fund's portfolio securities may be more
susceptible to any single economic, political or regulatory occurrence
than the portfolio securities of a diversified investment company.
Since the stocks of some foreign issuers are included in the Index, the
Fund's portfolio may contain securities of such foreign issuers which may
subject the Fund to additional investment risks with respect to those
securities that are different in some respects from those incurred by a
fund which invests only in securities of domestic issuers. Such risks
include future political and economic developments, the possible
imposition of withholding taxes on income payable on the securities, the
possible establishment of exchange controls or the adoption of other
foreign governmental restrictions which might adversely affect an
investment in these securities and the possible seizure or nationalization
of foreign deposits.
Investment decisions for the Fund are made independently from those of
the other accounts and investment companies that may be managed by
WFNIA. However, if such other accounts or investment companies are
prepared to invest in, or desire to dispose of, securities in which the Fund
invests at the same time as the Fund, available investments or
opportunities for sales will be allocated equitably to each. In some cases,
this procedure may adversely affect the size of the position obtained for
or disposed of by the Fund or the price paid or received by the Fund.
(5)
MANAGEMENT OF THE FUND
INDEX FUND MANAGER - WFNIA, located at 45 Fremont Street, San
Francisco, California 94105, is the index fund manager. WFNIA was
organized and registered as an investment adviser on April 3, 1990.
Pursuant to an Index Management Agreement with the Fund, WFNIA
manages the investment of the Fund's assets, subject to the supervision
of the Fund's Board of Directors and in conformity with Maryland law and
the stated policies of the Fund. WFNIA is responsible for placing purchase
and sale orders and providing continuous supervision of the investment
portfolio. WFNIA also serves as index fund manager of Dreyfus Life and
Annuity Index Fund, Inc. and Dreyfus Edison Electric Index Fund, Inc.
On April 3, 1990, Wells Fargo & Company, Wells Fargo Bank, N.A. and
Wells Fargo Investment Advisors ("WFIA"), the predecessor index manager
of the Fund, signed an agreement with The Nikko Securities Co., Ltd. and an
affiliate ("Nikko") pursuant to which the assets and business of WFIA
relevant to its performance as index fund manager were transferred to
WFNIA. WFIA and Nikko each own 50% of WFNIA. Nikko, whose principal
place of business is located in Tokyo, Japan, is one of the world's leading
investment managers with approximately $18 billion under management as
of October 31, 1993. WFNIA, one of the world's largest managers of index
funds, is responsible for managing or providing investment advice for
assets aggregating in excess of $154 billion.
Pursuant to the terms of the Index Management Agreement, the Fund has
agreed to pay WFNIA a monthly fee at the annual rate of .10 of 1% of the
value of the Fund's average daily net assets. For the fiscal year ended
October 31, 1993, the Fund paid WFNIA an index management fee at the
effective annual rate of .06 of 1% of the value of the Fund's average daily
net assets pursuant to undertakings by WFNIA.
ADMINISTRATOR - Dreyfus, located at 200 Park Avenue, New York, New
York 10166, serves as the Fund's administrator pursuant to an
Administration Agreement with the Fund. Under the Administration
Agreement, Dreyfus generally assists in all aspects of the Fund's
operations, other than providing index management or investment advice,
subject to the overall authority of the Fund's Board of Directors in
accordance with Maryland law. Dreyfus was organized in 1947 and, as of
November 1, 1993, managed or administered approximately $80 billion in assets
for more than 1.9 million investor accounts nationwide.
Pursuant to the terms of the Administration Agreement, the Fund has
agreed to pay Dreyfus a monthly fee at the annual rate of .20 of 1% of the
value of the Fund's average daily net assets. For the fiscal year ended
October 31, 1993, the Fund paid Dreyfus an administration fee at the
effective annual rate of .10 of 1% of the value of the Fund's average daily
net assets pursuant to undertakings by Dreyfus.
CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT - Wells
Fargo Institutional Trust Company, N.A., 45 Fremont Street, San Francisco,
California 94105 ("WFITC"), is the Custodian of the Fund's investments.
WFITC is owned by WFNIA and Wells Fargo & Company. The Shareholder
Services Group, Inc., a subsidiary of First Data Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent") .
EXPENSES - The imposition of the Fund's index management and
administration fees, as well as other operating expenses, will have the
effect of reducing investors' return and will affect the Fund's ability to
track the Index exactly. From time to time, WFNIA and/or Dreyfus or one
of their affiliates may waive receipt of their fees and/or voluntarily
assume certain expenses of the Fund, which would have the effect of
lowering the overall expense ratio of the Fund and increasing yield to
investors at the time such amounts are waived or assumed, as the case
may be. The Fund will not pay WFNIA and/or Dreyfus or their affiliates at
a later time for any amounts which may be waived, nor will the Fund
reimburse WFNIA and/or Dreyfus or their affiliates for any amounts which
may be assumed. Dreyfus may pay the Distributor for shareholder and
distribution services from Dreyfus' own assets, including past profits but
not including the administration fee paid by the Fund. The Distributor may
use part or all of such payments to pay securities dealers or others in
respect of these services.
HOW TO BUY FUND SHARES
The Distributor, located at 200 Park Avenue, New York, New York
10166, is a wholly-owned subsidiary of Dreyfus. The shares it distributes
are not deposits or obligations of The Dreyfus Security Savings Bank,
F.S.B. and therefore are not insured by the Federal Deposit Insurance
Corporation.
(6)
You can purchase Fund shares without a sales charge if you purchase
them directly from the Distributor; you may be charged a nominal fee if
you effect transactions in Fund shares through a securities dealer, bank or
other financial institution. Stock certificates are issued only upon your
written request. No certificates are issued for fractional shares. The Fund
reserves the right to reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a client
of a securities dealer, bank or other financial institution which has made
an aggregate minimum initial purchase for its customers of $2,500.
Subsequent investments must be at least $100. The initial investment
must be accompanied by the Fund's Account Application. For full-time or
part-time employees of Dreyfus or any of its affiliates or subsidiaries,
directors of Dreyfus, Board members of a fund advised by Dreyfus,
members of the Fund's Board, or the spouse or minor child of any of the
foregoing, the minimum initial investment is $1,000. For full-time or
part-time employees of Dreyfus or any of its affiliates or subsidiaries
who elect to have a portion of their pay directly deposited into their Fund
account, the minimum initial investment is $50. The Fund reserves the
right to offer Fund shares without regard to minimum purchase
requirements to employees participating in certain qualified or non-
qualified employee benefit plans or other programs where contributions or
account information can be transmitted in a manner and form acceptable
to the Fund. The Fund reserves the right to vary further the initial and
subsequent investment minimum requirements at any time.
You may purchase Fund shares by check or wire. Checks should be made
payable to "Peoples Index Fund, Inc.," or, if for Dreyfus retirement plan
accounts, to "The Dreyfus Trust Company, Custodian." Payments to open
new accounts which are mailed should be sent to Peoples Index Fund, Inc.,
P.O. Box 6647, Providence, Rhode Island 02940-6647, together with your
Account Application. For subsequent investments, your Fund
account number should appear on the check and an investment slip should
be enclosed. For Dreyfus retirement plan accounts, both initial and
subsequent investments should be sent to The Dreyfus Trust Company,
Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427. Neither
initial nor subsequent investments should be made by third party check.
Purchase orders may be delivered in person only to a Dreyfus Financial
Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND WILL BE
PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone numbers listed
under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank
having a correspondent bank in New York City. Immediately available funds
may be transmitted by wire to The Bank of New York, DDA
#8900119527/Peoples Index Fund, Inc., for purchase of Fund shares in
your name. The wire must include your Fund account number (for new
accounts, your Taxpayer Identification Number ("TIN") should be included
instead), account registration and dealer number, if applicable. If your
initial purchase of Fund shares is by wire, please call 1-800-645-6561
after completing your wire payment to obtain your Fund account number.
Please include your Fund account number on the Fund's Account
Application and promptly mail the Account Application to the Fund, as no
redemptions will be permitted until the Account Application is received.
You may obtain further information about remitting funds in this manner
from your bank. All payments should be made in U.S. dollars and, to avoid
fees and delays, should be drawn only on U.S. banks. A charge will be
imposed if any check used for investment in your account does not clear.
The Fund makes available to certain large institutions the ability to issue
purchase instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct
the institution to transmit immediately available funds through the
Automated Clearing House to The Bank of New York with instructions to
credit your Fund account. The instructions must specify your Fund account
registration and your Fund account number PRECEDED BY THE DIGITS "1111."
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where
(i) the employers or affiliated employers maintaining such plans or
programs have a minimum of 250 employ-
(7)
ees eligible for participation in
such plans or programs, or (ii) such plan's or program's aggregate initial
investment in the Dreyfus Family of Funds or certain other products made
available by the Distributor to such plans or programs exceeds one million
dollars. All present holdings of shares of funds in the Dreyfus Family of
Funds by such employee benefit plans or programs will be aggregated to
determine the fee payable with respect to each such purchase of Fund
shares. The Distributor reserves the right to cease paying these fees at
any time. The Distributor will pay such fees from its own funds, other
than amounts received from the Fund, including past profits or any other
source available to it.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after your order is received by the Transfer Agent
or other agent. If an order is received in proper form by the Transfer Agent
by the close of trading on the floor of the New York Stock Exchange
(currently 4:00 p.m., New York time) on a given day, Fund shares will be
purchased at the net asset value determined as of such close of trading on
that day. Otherwise, Fund shares will be purchased at the net asset value
determined as of the close of trading on the floor of the New York Stock
Exchange on the next business day. To permit the Fund to invest your
money as promptly as possible after receipt, thereby maximizing the
Fund's ability to track the Index, you are urged to transmit your purchase
order in proper form so that it may be received by the Transfer Agent
prior to 12:00 noon, New York time, on the day you want your purchase
order to be effective.
The Fund's net asset value per share is determined as of the close of
trading on the floor of the New York Stock Exchange on each day the New
York Stock Exchange is open for business. For purposes of determining net
asset value per share, futures contracts will be valued 15 minutes after
the close of trading on the floor of the New York Stock Exchange. Net asset
value per share is computed by dividing the value of the Fund's net assets
(i.e., the value of its assets less liabilities) by the total number of shares
outstanding. The Fund's investments are valued based on market value, or
where market quotations are not readily available, based on fair value as
determined in good faith by the Board of Directors. For further information
regarding the methods employed in valuing Fund investments, see
"Determination of Net Asset Value" in the Fund's Statement of Additional
Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes"
and the Fund's Account Application for further information concerning this
requirement. Failure to furnish a certified TIN to the Fund could subject
you to a $50 penalty imposed by the Internal Revenue Service (the "IRS").
HOW TO REDEEM FUND SHARES
GENERAL - You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent as
described below. When a request is received in proper form, the Fund will
redeem the shares at the next determined net asset value. To maximize
the Fund's ability to track the Index, you are urged to transmit your
redemption requests so that they may be received by the Transfer Agent
prior to 12:00 noon, New York time, on the day you want your redemption
request to be effective.
You will be charged a 1% redemption fee for only those redemptions
which occur within the initial six-month period following the opening of
your account. This redemption fee will be deducted from your redemption
proceeds and retained by the Fund. It is expected that, as a result of this
fee, the Fund will be able to track the Index more closely. However, the
redemption fee will not be charged upon the redemption of shares
purchased through omnibus accounts, nor will it be used to pay fees
imposed for various Fund services. The redemption fee may be waived,
modified or discontinued and reintroduced at any time or from time to
time. In addition, securities dealers, banks and other financial
institutions may charge a nominal fee for effecting redemptions of Fund
shares. Any certificates representing Fund shares being redeemed must be
submitted with the redemption request. The value of the shares redeemed
may be more or less than their original cost, depending upon the Fund's
then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
accordance with the procedures described below, except as provided by
the rules of the Securities and Exchange Commission. HOWEVER, IF YOU
HAVE PURCHASED FUND SHARES BY CHECK OR THROUGH DREYFUS-AUTOMATIC ASSET
BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMP-
(8)
TION REQUEST TO THE TRANSFER AGENT, THE REDEMPTION
PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE
OF YOUR PURCHASE CHECK OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER,
WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE
FUND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE
FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER
AGENT OF THE PURCHASE CHECK OR THE DREYFUS-AUTOMATIC ASSET
BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE
PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE
PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE
IN YOUR ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME
ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE
AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL OTHER
RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be redeemed until
the Transfer Agent has received your Account Application.
The Fund reserves the right to redeem your account at its option upon
not less than 45 days' written notice if your account's net asset value is
$500 or less and remains so during the notice period.
PROCEDURES - You may redeem Fund shares by using the regular
redemption procedure through the Transfer Agent, through the Wire Redemption
Privilege, or through the Telephone Redemption Privilege. The Fund makes
available to certain large institutions the ability to issue redemption
instructions through compatible computer facilities.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed an
Optional Services Form with the Transfer Agent. If you select a telephone
redemption privilege, you authorize the Transfer Agent to act on telephone
instructions from any person representing himself or herself to be you,
and reasonably believed by the Transfer Agent to be genuine. The Fund will
require the Transfer Agent to employ reasonable procedures, such as
requiring a form of personal identification, to confirm that instructions
are genuine and, if it does not follow such procedures, the Fund or the
Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither the Fund nor the Transfer Agent will be
liable for following telephone instructions reasonably believed to be
genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption of Fund shares. In such cases, you should consider
using the other redemption procedures described herein. Use of these other
redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption
had been used. During the delay, the Fund's net asset value may fluctuate.
REGULAR REDEMPTION - Under the regular redemption procedure, you may
redeem shares by written request mailed to Peoples Index Fund, Inc., P.O.
Box 6647, Providence, Rhode Island 02940-6647, or, if for Dreyfus
retirement plan accounts, to The Dreyfus Trust Company, Custodian, P.O.
Box 6427, Providence, Rhode Island 02940-6427. Redemption requests
may be delivered in person only to a Dreyfus Financial Center. THESE
REQUESTS WILL BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY
UPON RECEIPT THEREBY. For the location of the nearest Dreyfus Financial
Center, please call one of the telephone numbers listed under "General
Information." Redemption requests must be signed by each shareholder,
including each owner of a joint account, and each signature must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing
agencies and savings associations, as well as from participants in the
New York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program ("STAMP"), and the Stock Exchanges
Medallion Program. If you have any questions with respect to signature-
guarantees, please call one of the telephone numbers listed under "General
Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
Your written redemption request may direct that the redemption
proceeds be used to purchase shares of other funds advised or
administered by Dreyfus. The 1% redemption fee, described above, if
applicable, may be charged upon such redemption (depending upon how long
your Fund account has been open or the type of account from which shares
are being redeemed) and your redemption proceeds will be invested in
shares of the
(9)
other fund on the next business day. Before you make such a
request, you must obtain and should review a copy of the current
prospectus of the fund being purchased. Prospectuses may be obtained
from the Distributor. The prospectus will contain information concerning
minimum investment requirements and other conditions that may apply to
your purchase. No other fees currently are charged shareholders directly in
connection with this procedure, although the Fund reserves the right, upon
not less than 60 days' written notice, to charge shareholders a nominal
fee in accordance with rules promulgated by the Securities and Exchange
Commission. This procedure may be modified or terminated at any time
upon not less than 60 days' notice to shareholders.
WIRE REDEMPTION PRIVILEGE - You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank
which is a member of the Federal Reserve System, or a correspondent bank
if your bank is not a member. To establish the Wire Redemption Privilege,
you must check the appropriate box and supply the necessary information
on the Fund's Account Application or file an Optional Services Form with
the Transfer Agent. You may direct that redemption proceeds be paid by
check (maximum $150,000 per day) made out to the owners of record and
mailed to your address. Redemption proceeds of
less than $1,000 will be paid automatically by check. Holders of jointly
registered Fund or bank accounts may have redemption proceeds of only up
to $250,000 wired within any 30-day period. You may telephone
redemption requests by calling 1-800-221-4060 or, if you are calling
from overseas, call 1-401-455-3306. The Fund reserves the right to
refuse any redemption request, including requests made shortly after a
change in address, and may limit the amount involved or the number of
such requests. This Privilege may be modified or terminated at any time
by the Transfer Agent or the Fund. The Fund's Statement of Additional
Information sets forth instructions for transmitting redemption requests
by wire. Shares held under Keogh Plans, IRAs or other retirement plans,
and shares for which certificates have been issued, are not eligible for
this Privilege.
TELEPHONE REDEMPTION PRIVILEGE -- You may redeem Fund shares
(maximum $150,000 per day) by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed an
Optional Services Form with the Transfer Agent. The redemption proceeds
will be paid by check and mailed to your address. You may telephone
redemption instructions by calling 1-800-221-4060 or, if you are calling
from overseas, call 1-401-455-3306. The Fund reserves the right to
refuse any request made by telephone, including requests made shortly
after a change of address, and may limit the amount involved or the
number of telephone redemption requests. This Privilege may be modified
or terminated at any time by the Transfer Agent or the Fund. Shares held
under Keogh Plans, IRAs or other retirement plans, and shares for which
the certificates have been issued, are not eligible for this Privilege.
SHAREHOLDER SERVICES
DREYFUS-AUTOMATIC ASSET BUILDER - Dreyfus-AUTOMATIC Asset Builder
permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund
shares are purchased by transferring funds from the bank account
designated by you. At your option, the bank account designated by you will
be debited in the specified amount, and Fund shares will be purchased,
once a month, on either the first or fifteenth day, or twice a month, on
both days. Only an account maintained at a domestic financial institution
which is an Automated Clearing House member may be so designated. To
establish a Dreyfus-AUTOMATIC Asset Builder account, you must file an
authorization form with the Transfer Agent. You may obtain the necessary
authorization form from the Distributor. You may cancel your participation
in this Privilege or change the amount of purchase at any time by mailing
written notification to Peoples Index Fund, Inc., P.O. Box 6647, Providence,
Rhode Island 02940-6647, or, if for Dreyfus retirement plan accounts, to
The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence, Rhode
Island 02940-6427, and the notification will be effective three business
days following receipt. The Fund may modify or terminate this Privilege at
any time or charge a service fee, although no such fee currently is
contemplated.
RETIREMENT PLANS - The Fund offers a variety of pension and profit-
sharing plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover
Accounts," 401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan
support services also are available. You can obtain details on the various
plans by calling the following numbers toll
(10)
free: for Keogh Plans, please
call 1-800-358-5566; for IRAs and IRA "Rollover Accounts," please call
1-800-645-6561; for SEP-IRAs, 401(k) Salary Reduction Plans and
403(b)(7) Plans, please call 1-800-322-7880.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which the
Fund reimburses the Distributor an amount not to exceed an annual rate of
.25 of 1% of the value of the Fund's average daily net assets for certain
allocated expenses of providing personal services and/or maintaining
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and
services related to the maintenance of shareholder accounts.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily pays dividends from net investment income and
distributes net realized securities gains, if any, once a year, but may
make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner consistent
with the provisions of the Investment Company Act of 1940. The Fund will
automatically reinvest dividends and distributions from securities gains,
if any, in additional Fund shares at net asset value or, at your option, pay
them in cash. The Fund will not make distributions from net realized
securities gains unless capital loss carryovers, if any, have been utilized
or have expired. You may choose whether to receive distributions in cash
or to reinvest them in additional Fund shares at net asset value. If
applicable, the 1% redemption fee, described under "How to Redeem Fund
Shares," will be charged upon certain redemptions of Fund shares received
through the automatic reinvestment of dividends or distributions. All
expenses are accrued daily and deducted before declaration of dividends to
investors.
Dividends paid by the Fund derived from net investment income and
distributions from net realized short-term securities gains of the Fund
will be taxable to U.S. shareholders as ordinary income whether received
in cash or reinvested in Fund shares. Depending on the composition of the
Fund's income, a portion of the dividends from net investment income may
qualify for the dividends received deduction allowable to certain
corporate shareholders. Distributions from net realized long-term
securities gains of the Fund will be taxable to U.S. shareholders as long-
term capital gains for Federal income tax purposes, regardless of how
long shareholders have held their Fund shares and whether such
distributions are received in cash or reinvested in Fund shares. The Code
provides that the net long-term capital gain of an individual will
generally not be subject to Federal income tax at a rate in excess of 28%.
Dividends and distributions may be subject to state and local taxes.
Dividends derived from net investment income and distributions from
net realized short-term securities gains paid by the Fund to a foreign
investor generally are subject to U.S. nonresident withholding taxes at the
rate of 30%, unless the foreign investor claims the benefit of a lower rate
specified in a tax treaty. Distributions from net realized long-term
securities gains paid by the Fund to a foreign investor as well as the
proceeds of any redemptions from a foreign investor's account, regardless
of the extent to which gain or loss may be realized, generally will not be
subject to U.S. nonresident withholding tax. However, such distributions
may be subject to backup withholding, as described below, unless the
foreign investor certifies his non-U.S. residency status.
Notice as to the tax status of your dividends and distributions is mailed
to you annually. You also will receive periodic summaries of your account
which will include information as to dividends and distributions from
securities gains, if any, paid during the year.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends,
distributions from net realized securities gains and the proceeds of any
redemption, regardless of the extent to which gain or loss may be
realized, paid to a shareholder if such shareholder fails to certify either
that the TIN furnished in connection with opening an account is correct, or
that such shareholder has not received notice from the IRS of being
subject to backup withholding as a result of a failure to properly report
taxable dividend or interest income on a Federal income tax return.
Furthermore, the IRS may notify the Fund to institute backup withholding
if the IRS determines a shareholder's TIN is incorrect or if a shareholder
has failed to properly report taxable dividend and interest income on a
Federal income tax return.
(11)
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended October 31, 1993 as a "regulated investment company"
under the Code. The Fund intends to continue to so qualify if such
qualification is in the best interest of its shareholders. Such qualification
relieves the Fund of any liability for Federal
income tax to the extent its earnings are distributed in accordance with
applicable provisions of the Code. The Fund is subject to a non-deductible
4% excise tax, measured with respect to certain undistributed amounts of
taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as to
Federal, state or local taxes.
PERFORMANCE INFORMATION
For the purpose of advertising, performance is calculated on the basis
of average annual total return. Advertisements also may include
performance calculated on the basis of total return.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment in the Fund was purchased
with an initial payment of $1,000 and that the investment was redeemed
at the end of a stated period of time, after giving effect to the
reinvestment of dividends and distributions during the period. The return
is expressed as a percentage rate which, if applied on a compounded
annual basis, would result in the redeemable value of the investment at
the end of the period. Advertisements of the Fund's performance will
include the Fund's average annual total return for one, five and ten year
periods, or for shorter time periods depending upon the length of time
during which the Fund has operated.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the
income and principal changes for a specified period and dividing by the net
asset value per share at the beginning of the period. Advertisements may
include the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return.
Performance will vary from time to time and past results are not
necessarily representative of future results. Performance information,
such as that described above, may not provide a basis for comparison with
other investments or other investment companies using a different
method of calculating performance.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Standard
& Poor's 500 Composite Stock Price Index, Standard & Poor's MidCap 400
Index, Lipper Analytical Services, Inc., the Dow Jones Industrial Average,
Money Magazine, Morningstar, Inc. and other industry publications. The
Fund also may cite in its advertisements or in reports or other
communications to shareholders, historical performance of unmanaged
indexes as reported in Ibbotson, Roger G. and Rex A. Sinquefield, STOCKS,
BONDS, BILLS AND INFLATION (SBBI),1982, updated annually in the SBBI
YEARBOOK, Ibbotson Associates, Chicago. The Fund also may cite in its
advertisements the aggregate amount of assets committed to index
investing by pension funds and/or other institutional investors, which
currently exceeds $300 billion, and may refer to or discuss then-current
or past economic or financial conditions, developments or events.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on October 6, 1989, and
commenced operations on January 2, 1990. The Fund is authorized to issue
200 million shares of Common Stock, par value $.001 per share. Each share
has one vote.
Unless otherwise required by the Investment Company Act of 1940,
ordinarily it will not be necessary for the Fund to hold annual meetings of
shareholders. As a result, Fund shareholders may not consider each year
the election of Directors or the appointment of accountants. However,
pursuant to the Fund's By-Laws, the holders of at least 10% of the shares
outstanding and entitled to vote may require the Fund to hold a special
meeting of shareholders for purposes of removing a Director from office
and the holders of at least 25% of such
(12)
shares may require the Fund to
hold a special meeting of shareholders for any other purpose. Fund
shareholders may remove a Director by the affirmative vote of a majority
of the Fund's outstanding voting shares. In addition, the Board of Directors
will call a meeting of shareholders for the purpose of electing Directors
if, at any time, less than a majority of the Directors then holding office
have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends you
confirmation statements of account.
Shareholder inquiries may be made by writing to the Fund at l44 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll
free l-800-645-6561. In New York City, call 1-718-895-1206 (outside
New York City, call collect); on Long Island, call 794-5200.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND IN THE FUND'S OFFICIAL SALES LITERATURE IN
CONNECTION WITH THE OFFER OF THE FUND'S SHARES, AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY
PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
--------------
The Fund is not sponsored, endorsed, sold or promoted by Standard &
Poor's Corporation ("S&P"). S&P makes no representation or warranty,
express or implied, to the owners of the Fund or any member of the public
regarding the advisability of investing in securities generally or in the
Fund particularly or the ability of the S&P 500 Index to track general
stock market performance. S&P's only relationship to the Fund is the
licensing of certain trademarks and trade names of S&P and of the S&P
500 Index which is determined, composed and calculated by S&P without
regard to the Fund. S&P has no obligation to take the needs of the Fund or
the owners of the Fund into consideration in determining, composing or
calculating the S&P 500 Index. S&P is not responsible for and has not
participated in the calculation of the Fund's net asset value, nor is S&P a
distributor of the Fund. S&P has no obligation or liability in connection
with the administration, marketing or trading of the Fund.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS
OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE
FUND, OWNERS OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE
USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO
EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR USE WITH RESPECT TO THE S&P 500 INDEX OR ANY DATA
INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT
SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.
(13)
