<PAGE>
As filed with the Securities and Exchange Commission on April 28, 1995
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(Registration No. 33-48299)
Pre-Effective Amendment No. _______
Post-Effective Amendment No. 4
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
(Registration No. 811-06046)
Amendment No. 5
(Check appropriate box or boxes)
PIPER GLOBAL FUNDS INC.
(Exact Name of Registrant as Specified in Charter)
Piper Jaffray Tower
222 South Ninth Street, Minneapolis, Minnesota 55402
(Address of Principal Executive Offices) (Zip Code)
(612) 342-6387
(Registrant's Telephone Number, including Area Code)
Charles N. Hayssen
222 South Ninth Street
Minneapolis, Minnesota 55402
(Name and Address of Agent for Service)
Copy to:
Kathleen L. Prudhomme, Esq.
Dorsey & Whitney
Pillsbury Center South
220 South Sixth Street
Minneapolis, Minnesota 55402-1498
X immediately upon filing pursuant to paragraph (b) of rule 485
-------
__________on (specify date) pursuant to paragraph (b) of rule 485
__________60 days after filing pursuant to paragraph (a) of rule 485
__________on (specify date) pursuant to paragraph (a) of rule 485
The Registrant has registered an indefinite number or amount of common
stock under the Securities Act of 1933 pursuant to Rule 24f-2 under the
Investment Company Act of 1940. A Rule 24f-2 Notice was filed by the Registrant
on or about April 24, 1995.
<PAGE>
PIPER GLOBAL FUNDS INC.
Registration Statement on Form N-1A
----------------
Cross Reference Sheet
Pursuant to Rule 481(a)
----------------
<TABLE>
<CAPTION>
Item No. Prospectus Heading
- -------- ------------------
<S> <C> <C>
1. Cover Page.......................... Cover Page (no caption)
2. Synopsis............................ Introduction; Fund Expenses
3. Condensed Financial Information..... Financial Highlights
4. General Description of Registrant... Introduction; Investment Objective
and Policies; Special Investment
Methods
5. Management of the Fund.............. Management
6. Capital Stock and Other Securities.. General Information; Introduction;
Dividends, Distributions and Tax
Status
7. Purchase of Securities Being Offered Dividends and Distributions; How to
Purchase Shares; Valuation of
Shares
8. Redemption or Repurchase............ How to Redeem Shares
9. Pending Legal Proceedings........... General Information
Statement of Additional Information Heading
- -------------------------------------------
10. Cover Page.......................... Cover Page (no caption)
11. Table of Contents................... Table of Contents
12. General Information and History..... Not Applicable
13. Investment Objectives and Policies.. Investment Objective, Policies and
Restrictions
14. Management of the Fund.............. Directors and Executive Officers
15. Control Persons and Principal
Holders of Securities............... Capital Stock and Ownership of
Shares
16. Investment Advisory and Other
Services............................ Investment Advisory and Other
Services
17. Brokerage Allocation and Other
Practices........................... Portfolio Transactions and
Allocation of Brokerage
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
18. Capital Stock and Other Securities Capital Stock and Ownership of Shares
19. Purchase, Redemption and Pricing
of Securities Being Offered....... Net Asset Value and Public Offering
Price; Redemption
20. Tax Status........................ Taxation
21. Underwriters...................... Investment Advisory and Other
Services; Portfolio Transactions and
Allocation of Brokerage
22. Calculations of Performance Data.. Calculation of Performance Data
23. Financial Statements.............. Financial Statements
</TABLE>
<PAGE>
PROSPECTUS DATED APRIL 28, 1995
PACIFIC-EUROPEAN GROWTH FUND
A SERIES OF PIPER GLOBAL FUNDS INC.
PIPER JAFFRAY TOWER
222 SOUTH NINTH STREET, MINNEAPOLIS, MINNESOTA 55402-3804
(800) 866-7778 (TOLL FREE)
Pacific-European Growth Fund (the "Fund") is a diversified series of Piper
Global Funds Inc. ("Piper Global"), an open-end management investment company
the shares of which can be offered in more than one series. The Fund is the
only series of Piper Global currently outstanding. The investment objective of
the Fund is long-term capital appreciation. Current income is incidental to
this objective. The Fund seeks to achieve its investment objective through
investments primarily in Common Stock (as herein defined) of companies in the
Pacific Basin or in Europe (including Eastern Europe). Up to 25% of the Fund's
total assets may be invested in other areas of the world to the extent
significant opportunities for long-term capital appreciation outside of the
Pacific Basin and Europe become available. The Fund does not invest in Common
Stock of U.S. companies. No assurance can be given that the Fund's investment
objective will be achieved.
Investment in the Fund involves certain risks and requires consideration of
factors not typically associated with investment in securities of U.S.
issuers. See "Risk Factors."
This Prospectus concisely describes the information about the Fund that you
should know before investing. Please read the Prospectus carefully before
investing and retain it for future reference.
A Statement of Additional Information about the Fund dated April 28, 1995 is
available free of charge. Write to the Fund at Piper Jaffray Tower, 222 South
Ninth Street, Minneapolis, Minnesota 55402-3804 or telephone (800) 866-7778
(toll free). The Statement of Additional Information has been filed with the
Securities and Exchange Commission and is incorporated in its entirety by
reference in this Prospectus.
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.
<PAGE>
INTRODUCTION
Pacific-European Growth Fund (the "Fund") is a diversified series of Piper
Global Funds Inc. ("Piper Global"), an open-end management investment company,
or mutual fund, the shares of which can be offered in more than one series.
Each series in effect represents a separate fund with its own investment
objectives and policies. The Fund is the only series of Piper Global currently
outstanding. Piper Global was organized under the laws of the State of
Minnesota in 1990 as a closed-end investment company and converted to an open-
end investment company on August 31, 1992. The investment objective of the
Fund is long-term capital appreciation. Current income is incidental to this
objective.
THE INVESTMENT ADVISER
The Fund is managed by Piper Capital Management Incorporated (the
"Adviser"), a wholly owned subsidiary of Piper Jaffray Companies Inc. The Fund
pays the Adviser a basic management fee calculated and paid monthly at an
annual rate of 1.00% on net assets up to $100 million, with the fee scaled
downward as assets increase in size (the "Basic Fee"). The Basic Fee (as a
percentage of net assets) is higher than that paid by most other mutual funds.
The Basic Fee may be increased or decreased by up to a maximum, on an annual
basis, of .25% of the Fund's average daily net assets depending upon the
extent to which the Fund outperforms or underperforms the Morgan Stanley
Capital International European, Australian and Far East Index (the "EAFE (SM)
Index"). See "Management--Investment Adviser."
THE SUB-ADVISER
Edinburgh Fund Managers plc acts as the Fund's sub-adviser (the "Sub-
Adviser") under an agreement with the Adviser. The Sub-Adviser is a public
limited company that was incorporated in 1969. It is a majority-owned
subsidiary of The British Investment Trust PLC, a Scottish closed-end
investment company founded in 1889, for which the Sub-Adviser serves as
investment manager and adviser. For its services, the Sub-Adviser is paid a
fee by the Adviser equal to 65% of the Basic Fee plus or minus 90% of the
performance fee adjustment. See "Management--Sub-Adviser."
THE DISTRIBUTOR
Piper Jaffray Inc. ("Piper Jaffray" or the "Distributor"), a wholly owned
subsidiary of Piper Jaffray Companies Inc. and an affiliate of the Adviser,
serves as Distributor of the Fund's shares.
OFFERING PRICE
Shares of the Fund are offered to the public at the next determined net
asset value after receipt of an order by a shareholder's Piper Jaffray
investment executive or other broker-dealer plus a maximum sales charge of 4%
of the offering price (4.17% of the net asset value) on purchases of less than
$100,000. The sales charge is reduced on a graduated scale on purchases of
$100,000 or more. FUND SHARES ARE BEING OFFERED TO THE PUBLIC WITHOUT AN
INITIAL OR DEFERRED SALES CHARGE THROUGH JUNE 30, 1995. In connection with
purchases of $500,000 or more, there is no initial sales charge; however, a 1%
contingent deferred sales charge will be imposed in the event of a redemption
transaction occurring within 24 months following such a purchase. See "How to
Purchase Shares--Public Offering Price."
MINIMUM INITIAL AND SUBSEQUENT INVESTMENTS
The minimum initial investment for the Fund is $250. There is no minimum for
subsequent investments. See "How to Purchase Shares--Minimum Investments."
2
<PAGE>
EXCHANGES
You may exchange your shares for shares of any other mutual fund managed by
the Adviser which is open to new investors and eligible for sale in your state
of residence. All exchanges are subject to the minimum investment requirements
and other applicable terms set forth in the prospectus of the fund whose
shares you acquire. You may make four exchanges per year without payment of a
service charge. Thereafter, there is a $5 service charge for each exchange.
See "Shareholder Services--Exchange Privilege."
REDEMPTION PRICE
Shares of the Fund may be redeemed at any time at their net asset value next
determined after a redemption request is received by your Piper Jaffray
investment executive or other broker-dealer. A contingent deferred sales
charge will be imposed upon the redemption of certain shares initially
purchased without a sales charge. See "How to Redeem Shares--Contingent
Deferred Shares Charge." The Fund reserves the right, upon 30 days written
notice, to redeem an account if the net asset value of the shares falls below
$200. See "How to Redeem Shares--Involuntary Redemption."
CERTAIN RISK FACTORS TO CONSIDER
An investment in the Fund is subject to certain risks, as set forth in
detail under "Investment Objective and Policies," "Special Investment Methods"
and "Risk Factors." As with other mutual funds, there can be no assurance that
the Fund will achieve its objective. Because the Fund invests in foreign
securities, an investment in the Fund requires consideration of certain risk
factors that are not typically associated with investing in securities of U.S.
companies. These factors include risks relating to adverse currency
fluctuations, potential political and economic instability of certain
countries, limited liquidity and volatile prices of certain securities of non-
U.S. companies, and foreign taxation. In addition, the Fund may engage in the
following investment practices which involve certain special risks: entering
into currency exchange transactions, forward foreign currency exchange
transactions and foreign currency futures and options, entering into options
transactions on securities in which the Fund may invest, the use of repurchase
agreements, the lending of portfolio securities, entering into futures
contracts and options on futures contracts, the purchase of securities on a
"when-issued" basis and the purchase or sale of securities on a "forward
commitment" basis. These techniques involve certain special risks and may
increase the volatility of the Fund's net asset value. The Fund may invest in
illiquid securities which will involve greater risk than investments in other
securities and may increase Fund expenses.
SHAREHOLDER INQUIRIES
Any questions or communications regarding a shareholder account should be
directed to your Piper Jaffray investment executive or, in the case of shares
held through another broker-dealer, to IFTC at (800) 874-6205. General
inquiries regarding the Fund should be directed to the Fund at the telephone
number set forth on the cover page of this Prospectus.
3
<PAGE>
FUND EXPENSES
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of offering
price)................................................................. 4.00%
Exchange Fee*........................................................... $0
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Management Fee.......................................................... 1.03%
Rule 12b-1 Fees (after voluntary limitation)............................ .32%
Other Expenses.......................................................... .45%
----
Total Fund Operating Expenses (after voluntary limitation)............ 1.80%
</TABLE>
- --------
*There is a $5.00 fee for each exchange in excess of four exchanges per year.
See "How to Purchase Shares--Exchange Privilege."
EXAMPLE
You would pay the following expenses on a $1,000 investment assuming a 5%
annual return and redemption at the end of each time period:
<TABLE>
<S> <C>
1 year............................. $ 58
3 years............................ $ 94
5 years............................ $134
10 years............................ $243
</TABLE>
The purpose of the above Fund Expenses table is to assist you in
understanding the various costs and expenses that investors in the Fund will
bear directly or indirectly. THE EXAMPLE CONTAINED IN THE TABLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE
GREATER OR LESSER THAN THOSE SHOWN.
The information set forth in the table is based on actual expenses incurred
by the Fund during the fiscal year ended February 28, 1995, except that the
Rule 12b-1 fees and total fund operating expenses have been restated to
reflect a change in the Distributor's voluntary Rule 12b-1 fee limit for
fiscal 1996. The Fund has adopted a Rule 12b-1 Plan under which the Fund is
required to reimburse the Distributor for shareholder servicing costs and
distribution costs in an amount not to exceed, on an annualized basis, .50% of
the average daily net assets of the Fund. Of such amount, the Distributor may
be paid shareholder servicing fees of up to .25% of the average daily net
assets of the Fund to cover shareholder servicing costs, and distribution fees
of a like amount to cover distribution costs. The Distributor has voluntarily
agreed to limit the fee to an annual rate of .32% of the Fund's average daily
net assets. This voluntary limitation may be revised or terminated at any time
after fiscal year end. The Adviser may or may not assume additional expenses
of the Fund from time to time, in its discretion, while retaining the ability
to be reimbursed by the Fund for expenses assumed during a fiscal year prior
to the end of such year. The foregoing policy will have the effect of lowering
the Fund's overall expenses ratio and increasing yield to investors when such
amounts are assumed or the inverse when such amounts are reimbursed. During
the fiscal year ended February 28, 1995, the Distributor voluntarily limited
Rule 12b-1 fees to .28% of average daily net assets, resulting in total
operating expenses equal to 1.76% of average daily net assets. Absent any Rule
12b-1 fee limitation, total Fund operating expenses for the fiscal year ended
February 28, 1995, would have been 1.98% of average daily net assets. The
management fees for fiscal 1996 may be more or less than those set forth in
the table to the extent that the Fund outperforms or underperforms the EAFE
Index. See "Management--Investment Adviser." As a result of the Fund's
reimbursement of its distribution costs, which payments are considered asset-
based sales charges, long-term shareholders of the Fund may pay more than the
economic equivalent of the maximum 6.25% front end sales charge permitted
under the rules of the National Association of Securities Dealers, Inc. For
additional information, including a more complete explanation of
4
<PAGE>
management and Rule 12b-1 fees, see "Management--Investment Adviser" and
"Distribution of Fund Shares."
FINANCIAL HIGHLIGHTS
The information presented in this section relates to fiscal periods ended
both before and after the conversion of Piper Global from a closed-end
investment company to an open-end investment company on August 31, 1992. The
following financial highlights have been audited by KPMG Peat Marwick LLP,
independent auditors, whose report thereon appears in the Statement of
Additional Information. This information should be read in conjunction with
the financial statements and the related notes thereto appearing in the
Statement of Additional Information. The table sets forth for the Fund per-
share data for a share of capital stock outstanding throughout each fiscal
period and selected information for such periods.
<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28, PERIOD FROM
---------------------------------- 4/27/90* TO
1995 1994 1993 1992 2/28/91
------- ------- ------ ------ -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period........................ $ 15.44 $ 10.81 $10.53 $10.18 $10.97
------- ------- ------ ------ ------
Operations:
Investment income (loss)--net. (0.03) (0.03) -- 0.06 0.20
Net realized and unrealized
gains (losses) on invest-
ments........................ (1.63) 4.72 0.28 0.37 (0.79)
------- ------- ------ ------ ------
Total from operations........ (1.66) 4.69 0.28 0.43 (0.59)
------- ------- ------ ------ ------
Distributions from net invest-
ment income................... -- -- -- (0.06) (0.20)
Return of capital distribu-
tions......................... -- -- -- (0.02) --
Distributions from net realized
gains......................... (1.05) (0.06) -- -- --
------- ------- ------ ------ ------
Total distributions.......... (1.05) (0.06) -- (0.08) (0.20)
------- ------- ------ ------ ------
Net asset value, end of period. $ 12.73 $ 15.44 $10.81 $10.53 $10.18
======= ======= ====== ====== ======
Total return + ................ (11.09)% 43.45% 2.66% 4.44% (5.03)%
Net assets, end of period (000s
omitted)...................... 154,393 165,655 59,791 35,680 34,492
Ratio of expenses to average
daily
net assets ++................. 1.76% 1.81% 2.25% 1.92% 1.77%**
Ratio of net investment income
(loss) to average daily net
assets ++..................... (0.19)% (0.29)% 0.03% 0.60% 2.36%**
Portfolio turnover rate
(excluding
short-term securities)........ 57% 52% 59% 69% 10%
</TABLE>
* Commencement of operations.
** Adjusted to an annual basis.
+ Total return is based on the change in net asset value during the period,
assumes reinvestment of all distributions and does not reflect a sales charge.
++ During 1995 and 1994, the Fund's Rule 12b-1 fee was voluntarily limited by
the Distributor to .28% and .30%, respectively, of average daily net assets.
Had the maximum fee of .50% been in effect, the ratios of expenses and net
investment income (loss) would have been 1.98%/(.41%) and 2.01%/(.49%),
respectively. During 1993, various fees and expenses were voluntarily limited
or absorbed by the Adviser and the Distributor. Had the Fund paid all 1993
expenses, the ratios of expenses and net investment income (loss) to average
daily net assets would have been 2.59% and (.31)%. Included in 1993 gross
expenses were expenses of approximately .32% of average daily net assets that
related to converting to an open-end investment company.
Further performance information pertaining to the Fund is contained in the
annual report to shareholders which may be obtained without charge by calling
or writing the Fund at the address and telephone number listed on the cover.
5
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
GENERAL
The Fund's investment objective is long-term capital appreciation. Current
income is incidental to this objective. The Fund seeks to achieve its
investment objective through investments primarily (under normal
circumstances, at least 65% of its total assets) in Common Stock of companies
in the Pacific Basin or in Europe (including Eastern Europe). "Common Stock"
means common stock and foreign equity securities which are substantially
similar to common stock in the U.S. and does not include preferred stock or
convertible debt securities (such foreign equity securities may have voting
and distribution rights which differ from those of common stock in the U.S.).
The Pacific Basin is generally defined as those countries bordering the
Pacific Ocean. The Fund may invest in the following countries within the
region: Malaysia, Pakistan, Sri Lanka, the Philippines, Singapore, South
Korea, Thailand, India, Indonesia, Hong Kong, Japan, Taiwan, Australia and New
Zealand. In addition, to the extent that suitable investment opportunities
become available, the Fund may invest in any other country within the region,
including, but not limited to, China. For purposes of this Prospectus, unless
otherwise indicated, Europe consists of Austria, Belgium, Denmark, Germany,
Finland, France, Greece, the Republic of Ireland, Italy, the Netherlands,
Norway, Portugal, Spain, Sweden, Switzerland, Turkey and the United Kingdom
(together, "Western Europe"), plus Albania, Bulgaria, the Czech and Slovak
Republics, Hungary, Poland, Romania, the successor states to the former
Yugoslavia, and the Commonwealth of Independent States (formerly, the Union of
Soviet Socialist Republics) (together, "Eastern Europe"). As the securities
markets of additional continental European countries develop, such countries
may be considered part of the Fund's definition of Europe and appropriate
countries for investment by the Fund. For a discussion of the economies of the
Pacific Basin and Europe, see "Investment Objective, Policies and
Restrictions--Investment Background" in the Statement of Additional
Information.
As of March 31, 1995, approximately 64% of the Fund's investments were in
companies in the Pacific Basin (including Japan) and approximately 26% were in
companies in Europe. While the Fund has no specific policy or restriction on
the allocation of its funds between Europe and the Pacific Basin, the Adviser
and the Sub-Adviser (collectively, "Management") believe that the
opportunities for long-term capital appreciation in the Pacific Basin are
generally superior to those presently available in the economically more
mature areas of the world. The relative emphasis of the Fund's investments
between the Pacific Basin and Europe may change over time to the extent
Management identifies greater investment opportunities in Europe as a result
of more attractive values, recent developments in Eastern Europe, the removal
of most intra-European trade barriers as a result of the adoption of the
Single European Act in 1992 or other factors. In normal market conditions, the
Fund's investments will be allocated among at least three different countries
in the Pacific Basin and/or Europe. For additional information regarding the
allocation of Fund investments, see "Investment Objective, Policies and
Restrictions--Investment Background--Allocation of Investments Between the
Pacific Basin and Europe" in the Statement of Additional Information.
A company is considered to be in the Pacific Basin or in Europe, as the case
may be, if (a) it is organized under the laws of a country within the Pacific
Basin or in Europe (including the United Kingdom); (b) at least 50% of its
assets are located in the Pacific Basin or in Europe; (c) it derives at least
50% of its total revenues from goods produced, sales made, services performed
or investment in companies in the Pacific Basin or in Europe; or (d) its
securities are traded principally on stock exchanges in a Pacific Basin or
European country. The Fund's definition of companies in the Pacific Basin or
in Europe may include companies that reflect economic and market forces
applicable to other regions as
6
<PAGE>
well as the Pacific Basin or Europe. Nevertheless, Management believes that
investment in such companies is appropriate in light of the Fund's investment
objective because Management selects among such companies those which, in its
view, have sufficiently strong exposure to economic and market forces in the
Pacific Basin or in Europe, as the case may be, such that the value of the
securities of such companies will tend to reflect Pacific Basin or European
developments to a greater extent than developments in other regions. With
respect to the investment by the Fund in companies that receive 50% or more of
their revenues from investments in companies located in the Pacific Basin or
Europe (e.g., investment companies and trusts), the Fund believes that
securities of such companies will similarly reflect the development of the
region in which it invests and, in addition, the purchase of such securities
is currently one of the few mechanisms through which the Fund may invest in
securities of South Korean, Taiwanese and Indian companies.
Up to 25% of the Fund's total assets may be invested in other areas of the
world to the extent significant opportunities for long-term capital
appreciation outside of the Pacific Basin and Europe become available. The
Fund currently invests a portion of its assets in certain countries in Latin
America, including Mexico, Brazil, Argentina, Chile, Peru, Venezuela, Colombia
and Ecuador. The Fund may invest in other Latin American countries as
opportunities develop. As of March 31, 1995, approximately 2% of the Fund's
investments were in companies in Latin America. The Fund does not invest in
Common Stock of U.S. companies. No assurance can be given that the Fund's
investment objective will be achieved.
The investment objective of the Fund is not fundamental and may be changed
without shareholder approval. If there is a change in investment objective,
shareholders should consider whether the Fund remains an appropriate
investment in light of their then current financial position and needs.
TYPES OF SECURITIES IN WHICH THE FUND MAY INVEST
The Fund invests primarily in Common Stock. In addition, up to 10% of the
Fund's assets may be invested in rights, options or warrants to purchase
Common Stock. In addition to investing directly in Common Stock, the Fund may
invest in American Depository Receipts ("ADRs") and European Depository
Receipts ("EDRs"). Generally, ADRs in registered form are U.S. dollar
denominated securities designed for use in the U.S. securities markets, which
represent and may be converted into the underlying foreign security. EDRs are
typically issued in bearer form and are designed for use in the European
securities markets. The Fund also may purchase shares of investment companies
or trusts which invest principally in securities in which the Fund is
authorized to invest. The purchase of investment company stock currently is
one of the few mechanisms through which the Fund may invest in securities of
Indian and Taiwanese companies. For a discussion of the risks of investing in
investment companies, see "Risk Factors--Investment and Repatriation
Restrictions."
For temporary defensive purposes, the Fund may invest without limitation in
U.S. dollar denominated or foreign currency denominated cash or in high
quality debt securities with remaining maturities of one year or less. Such
securities may include commercial paper, certificates of deposit, bankers'
acceptances and securities issued by the U.S. or a foreign government, their
agencies or instrumentalities. All securities in which the Fund invests for
defensive purposes (other than securities issued or guaranteed by the U.S. or
a foreign government, their agencies or instrumentalities) must be rated AA or
better by Standard & Poor's Corporation or be of comparable quality as
determined by the Adviser. For an explanation of ratings, see Appendix A to
the Statement of Additional Information.
7
<PAGE>
SPECIAL INVESTMENT METHODS
The following discussion describes some of the investment management
practices that the Fund may employ from time to time to facilitate portfolio
management and mitigate risk.
FOREIGN CURRENCY TRANSACTIONS
The Fund engages in currency exchange transactions in connection with the
purchase and sale of its investments. Currency exchange transactions are
necessary to enable the Fund to purchase securities denominated in a foreign
currency and to convert interest and dividend payments or sales proceeds paid
in a foreign currency into U.S. dollars or into another currency. In addition,
the Fund may engage in forward foreign currency exchange transactions and
foreign currency futures and options transactions to protect against
uncertainty with respect to future currency exchange rates. Forward currency
exchange and futures and options transactions are used only for hedging and
not for speculation. The Fund conducts its currency exchange transactions
either on a spot (cash) basis at the rate prevailing in the currency exchange
market or through entering into forward or futures contracts to purchase or
sell foreign currencies.
The Fund may engage in "transaction hedging" to protect against a change in
the foreign currency exchange rate between the date on which the Fund
contracts to purchase or sell the security and the settlement date or to "lock
in" the U.S. dollar equivalent (or other foreign currency equivalent to the
extent needed for purposes of purchasing securities) of a dividend or interest
payment in a foreign currency. For that purpose, the Fund may purchase or sell
a foreign currency on a spot (or cash) basis at the prevailing spot rate in
connection with the settlement of transactions in portfolio securities
denominated in that foreign currency.
If conditions warrant, the Fund may also enter into contracts to purchase or
sell foreign currencies at a future date ("forward contracts") and purchase or
sell foreign currency futures contracts as a hedge against changes in foreign
currency exchange rates between the trade and settlement dates on particular
transactions and not for speculation. A foreign currency forward contract is a
negotiated agreement to exchange currency at a future time at a rate or rates
that may be higher or lower than the spot rate. Foreign currency futures
contracts are standardized exchange-traded contracts and have margin
requirements.
For transaction hedging purposes, the Fund may also purchase exchange-listed
and over-the-counter call and put options on foreign currency futures
contracts and on foreign currencies. A put option on a futures contract gives
the Fund the right to assume a short position in the futures contract until
expiration of the option. A put option on currency gives the Fund the right to
sell a currency at an exercise price until the expiration of the option. A
call option on a futures contract gives the Fund the right to assume a long
position in the futures contract until the expiration of the option. A call
option on currency gives the Fund the right to purchase a currency at the
exercise price until the expiration of the option.
The Fund may engage in "position hedging" to protect against a decline in
the value relative to the U.S. dollar of the currencies in which its portfolio
securities are denominated or quoted (or an increase in the value of currency
for securities which the Fund intends to buy, when it holds cash reserves and
short-term investments). For position hedging purposes, the Fund may purchase
or sell foreign currency futures contracts and foreign currency forward
contracts, and may purchase put or call options on foreign currency futures
contracts and in foreign currencies on exchanges or over-the-counter markets.
In connection with position hedging, the Fund may also purchase or sell
foreign currency on a spot basis.
8
<PAGE>
Transaction and position hedging do not eliminate fluctuations in the
underlying prices of the securities which the Fund owns or intends to purchase
or sell. They simply establish a rate of exchange which one can achieve at
some future point in time. Additionally, although these techniques tend to
minimize the risk of loss due to a decline in the value of the hedged
currency, they tend to limit any potential gain which might result from the
increase in the value of such currency. In addition, hedging transactions
involve costs and may result in losses. The Fund may write covered call
options on foreign currencies to offset some of the costs of hedging those
currencies. The Fund will engage in over-the-counter transactions only when
appropriate exchange-traded transactions are unavailable and when, in the
opinion of the Adviser, the pricing mechanism and liquidity are satisfactory
and the participants are responsible parties likely to meet their contractual
obligations. The Fund's ability to engage in hedging and related option
transactions may be limited by tax considerations. See "Taxation--Consequences
of Certain Fund Investments" in the Statement of Additional Information.
For additional information regarding foreign currency transactions, see
"Investment Objective, Policies and Restrictions--Foreign Currency
Transactions" in the Statement of Additional Information.
HEDGING
The Fund may engage in various futures and put and call transactions
(collectively, "Hedging Transactions"). Hedging Transactions may be used to
attempt to protect against possible declines in the market value of the Fund's
portfolio, to protect the Fund's unrealized gains in the value of its
portfolio securities, to facilitate the sale of such securities for investment
purposes or to establish a position in the securities markets as a temporary
substitute for purchasing particular securities. Any or all of these
techniques may be used at any time. There is no overall limitation on the
percentage of the Fund's portfolio securities which may be subject to a hedge
position. There is no particular strategy that requires use of one technique
rather than another. Use of any Hedging Transaction is a function of market
conditions. The Hedging Transactions that the Fund may use are described
below. Additional Hedging Transactions may be used by the Fund in the future
as they are developed to the extent deemed appropriate by the Board of
Directors of the Fund.
Options on Securities. In seeking to reduce fluctuations in net asset value,
the Fund may write (i.e., sell), covered put and call options and purchase put
and call options on the securities in which it may invest. Such options are
traded on U.S. and foreign securities exchanges and in the over-the-counter
markets.
A put option gives the buyer of such option, upon payment of a premium, the
right to deliver a specified amount of a security to the writer of the option
on or before a fixed date at a predetermined price. A call option gives the
purchaser of the option, upon payment of a premium, the right to call upon the
writer to deliver a specified amount of a security on or before a fixed date,
at a predetermined price. A call option written by the Fund is "covered" if
the Fund owns the underlying security covered by the call or has an absolute
and immediate right to acquire that security without additional cash
consideration (or for additional cash consideration held in a segregated
account by its custodian) upon conversion or exchange of other securities held
in its portfolio. A call option is also covered if the Fund holds a call on
the same security and in the same principal amount as the call written where
the exercise price of the call held (a) is equal to or less than the exercise
price of the call written or (b) is greater than the exercise price of the
call written if the difference is maintained by the Fund in cash and high
grade liquid debt securities in a segregated account with its custodian. A put
option written by the Fund is "covered" if the Fund maintains cash and high
grade liquid debt securities with a value equal to the exercise price in a
segregated account with its custodian, or else holds a put on the same
security and in the same principal amount as the put written where the
exercise price of the put held is equal to or greater than the exercise price
of the put written. The Fund will not write puts if, as a result, more than
50% of the Fund's assets
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would be required to be segregated. The premium paid by the purchaser of an
option will reflect, among other things, the relationship of the exercise
price to the market price and volatility of the underlying security, the
remaining term of the option, supply and demand and interest rates.
In purchasing a call option, the Fund would be in a position to realize a
gain if, during the option period, the price of the security increased above
the call option price by an amount in excess of the cost of the option.
Otherwise, it would realize a loss. In purchasing a put option, the Fund would
be in a position to realize a gain if, during the option period, the price of
the security declined below the put option price by an amount in excess of the
cost of the option. Otherwise, it would realize a loss. If a put or call
option purchased by the Fund were permitted to expire without being sold or
exercised, its premium would be lost by the Fund.
If a put option written by the Fund were exercised, the Fund would be
obligated to purchase the underlying security at the exercise price. If a call
option written by the Fund were exercised, the Fund would be obligated to sell
the underlying security at the exercise price. The risk involved in writing a
put option is that there could be a decrease in the market value of the
underlying security caused by rising interest rates or other factors. If this
occurred, the option could be exercised and the underlying security would then
be sold to the Fund at a higher price than its current value. The risk
involved in writing a call option is that there could be an increase in the
market value of the underlying security caused by declining interest rates or
other factors. If this occurred, the option could be exercised and the
underlying security would then be sold by the Fund at a lower price than its
current market value. These risks could be reduced by entering into a closing
transaction as described in Appendix B to the Statement of Additional
Information. The Fund retains the premium received from writing a put or call
option whether or not the option is exercised. See Appendix B to the Statement
of Additional Information for a further discussion of the use, risks and costs
of option trading.
The exchanges have established position limits governing the maximum number
of options which may be written by an investor or group of investors acting in
concert. Similarly, the Commodities Futures Trading Commission and the Chicago
Board of Trade have established futures position limits for an investor or
group of investors acting in concert. (A discussion of the Fund's ability to
invest in futures contracts and options thereon is set forth below.) The
position limits may restrict the Fund's ability to purchase or write options
on a particular security or to enter into futures contracts. It is possible
that the Fund and other clients of the Adviser, including closed-end and other
open-end investment companies managed by the Adviser, may be considered to be
a group of investors acting in concert. Thus, the number of options or futures
transactions which the Fund may enter into may be affected by options or
futures transactions of other investment advisory clients of the Adviser.
Over-the-counter options are purchased or written by the Fund in privately
negotiated transactions. Such options are illiquid and it may not be possible
for the Fund to dispose of an option it has purchased or terminate its
obligations under an option it has written at a time when the Adviser believes
it would be advantageous to do so.
Futures Contracts and Options on Futures Contracts. The Fund may enter into
contracts for the purchase or sale for future delivery of securities or
contracts based on financial indices including any index of securities in
which the Fund may invest ("futures contracts") and may purchase and write put
and call options to buy or sell futures contracts ("options on futures
contracts"). A "sale" of a futures contract means the acquisition of a
contractual obligation to deliver the securities called for by the contract at
a specified price on a specified date. The purchaser of a futures contract on
an index agrees to take or make delivery of an amount of cash equal to the
difference between a specified dollar multiple of the value of the index on
the expiration date of the contract ("current contract value") and the price
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at which the contract was originally struck. No physical delivery of the
securities underlying the index is made. Options on futures contracts to be
written or purchased by the Fund will be traded on exchanges or over-the-
counter. These investment techniques are used only to hedge against declines
in the value of the Fund's portfolio securities or increases in the prices of
securities which the Fund intends to purchase at a later date. The successful
use of such instruments relies upon the Adviser's experience with respect to
such instruments. Should prices move in an unexpected manner, the Fund may not
achieve the anticipated benefits of futures contracts or options on futures
contracts or may realize losses and would thus be in a worse position than if
such strategies had not been used. In addition, the correlation between
movements in the price of futures contracts or options on futures contracts
and movements in the prices of the securities hedged or used for cover will
not be perfect. See Appendix B to the Statement of Additional Information for
further discussion of the use, risks and costs of futures contracts and
options on futures contracts.
Futures contracts and options on futures contracts are used only as a hedge
and not for speculation. In addition, the Fund does not enter into any futures
contracts or options on futures contracts if immediately thereafter the amount
of initial margin deposits on all the futures contracts of the Fund and
premiums paid on options on futures contracts would exceed 5% of the market
value of the total assets of the Fund. This restriction will not be changed by
the Fund's Board of Directors without considering the policies and concerns of
the various applicable federal and state regulatory agencies.
The Fund limits its activities in options and futures contracts to the
extent necessary to prevent disqualification of the Fund as a regulated
investment company under the Internal Revenue Code. For a discussion of the
tax treatment of futures contracts and options on futures contracts, see
"Taxation--Consequences of Certain Fund Investments" in the Statement of
Additional Information.
WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES
The Fund may purchase securities on a "when-issued" basis and may purchase
or sell securities on a "forward commitment" basis. The Fund may make such
purchases in order to lock-in the purchase price of a security which
Management believes will appreciate in value. There is always the risk,
however, that the security will decrease in value prior to its delivery. When
such transactions are negotiated, the price is fixed at the time the
commitment is made, but delivery and payment for the securities take place at
a later date, which can be a month or more after the date of the transaction.
At the time the Fund makes the commitment to purchase securities on a when-
issued or forward commitment basis, it will record the transaction and
thereafter reflect the value of such securities in determining its net asset
value. At the time the Fund enters into a transaction on a when-issued or
forward commitment basis, a segregated account consisting of cash or high
grade liquid debt securities equal to the value of the when-issued or forward
commitment securities will be established and maintained with the custodian
and will be marked to the market daily. On the delivery date, the Fund will
meet its obligations from securities that are then maturing or sale of the
securities held in the segregated asset account and/or from then available
cash flow. If the Fund disposes of the right to acquire a when-issued security
prior to its acquisition or disposes of its right to deliver or receive
against a forward commitment, it can incur a gain or loss due to market
fluctuation.
There is always a risk that the securities may not be delivered and that the
Fund may incur a loss or will have lost the opportunity to invest the amount
set aside for such transaction in the segregated asset account. The purchase
of securities on a when-issued or forward commitment basis can result in
increased volatility of the Fund's net asset value to the extent the Fund
makes such purchases while remaining substantially fully invested. Settlements
in the ordinary course, which may take substantially more than three business
days for non-U.S. securities, are not treated by the Fund as when-issued or
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forward commitment transactions and, accordingly, are not subject to the
foregoing limitations even though some of the risks described above may be
present in such transactions.
REPURCHASE AGREEMENTS
The Fund may enter, without limitation, into repurchase agreements
pertaining to the securities in which it may invest with securities dealers or
member banks of the Federal Reserve System. A repurchase agreement arises when
a buyer such as the Fund purchases a security and simultaneously agrees to
resell it to the vendor at an agreed-upon future date, normally one day or a
few days later. The resale price is greater than the purchase price,
reflecting an agreed upon interest rate which is effective for the period of
time the buyer's money is invested in the security and which is related to the
current market rate rather than the coupon rate on the purchased security.
Such agreements permit the Fund to keep all of its assets at work while
retaining "overnight" flexibility in pursuit of investments of a longer-term
nature. The Fund requires continual maintenance by its custodian for its
account in the Federal Reserve/Treasury Book Entry System of collateral in an
amount equal to, or in excess of, the resale price. In the event a vendor
defaults on its repurchase obligation, the Fund might suffer a loss to the
extent that the proceeds from the sale of the collateral are less than the
repurchase price. In the event of a vendor's bankruptcy, the Fund might be
delayed in, or prevented from, selling the collateral for the Fund's benefit.
The Fund's Board of Directors has established procedures, which are
periodically reviewed by the Board, pursuant to which the Adviser will monitor
the creditworthiness of the dealers and banks with which the Fund enters into
repurchase agreement transactions.
LENDING OF SECURITIES
In order to facilitate achievement of its investment objective, the Fund may
from time to time lend securities from its portfolio to brokers, dealers and
financial institutions and receive collateral in the form of cash or U.S.
government securities. Securities lending may be used to generate income to
cushion the Fund against declines in stock prices without requiring the Fund
to sell portfolio securities which it believes will appreciate in value. As
with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the collateral should the borrower of the securities fail
financially. However, the Fund will enter into loan arrangements only with
brokers, dealers or financial institutions which the Adviser has determined
are creditworthy under guidelines established by the Fund's Board of
Directors. In addition, collateral for such loans must be maintained at all
times in an amount equal to at least 100% of the current market value of the
loaned securities (including interest on the loaned securities). The interest
accruing on the loaned securities will be paid to the Fund and the Fund will
have the right, on demand, to call back the loaned securities. The Fund may
pay fees to arrange the loans. The Fund does not lend portfolio securities in
excess of 30% of the value of its total assets (including such loans), nor
does the Fund lend its portfolio securities to any officer, director, employee
or affiliate of the Fund or the Adviser or Sub-Adviser.
ILLIQUID SECURITIES
As a fundamental investment restriction that may not be changed without the
approval of a majority of the Fund's shares, the Fund will not invest more
than 15% of its net assets in illiquid securities. A security is considered
illiquid if it cannot be sold in the ordinary course of business within seven
days at approximately the price at which it is valued. Illiquid securities may
offer a higher yield than securities which are more readily marketable, but
they may not always be marketable on advantageous terms.
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The sale of illiquid securities often requires more time and results in
higher brokerage charges or dealer discounts and other selling expenses than
does the sale of securities eligible for trading on national securities
exchanges or in the over-the-counter markets. The Fund may be restricted in
its ability to sell such securities at a time when the Adviser or Sub-Adviser
deems it advisable to do so. In addition, in order to meet redemption
requests, the Fund may have to sell other assets, rather than such illiquid
securities, at a time which is not advantageous.
"Restricted securities" are securities which were originally sold in private
placements and which have not been registered under the Securities Act of 1933
(the "1933 Act"). Such securities generally have been considered illiquid,
since they may be resold only subject to statutory restrictions and delays or
if registered under the 1933 Act. In 1990, however, the Securities and
Exchange Commission adopted Rule 144A under the 1933 Act, which provides a
safe harbor exemption from the registration requirements of the 1933 Act for
resales of restricted securities to "qualified institutional buyers," as
defined in the rule. The result of this rule has been the development of a
more liquid and efficient institutional resale market for restricted
securities. Thus, restricted securities are no longer necessarily illiquid.
The Fund may therefore invest in Rule 144A securities and treat them as liquid
when they have been determined to be liquid by the Board of Directors of the
Company or by the Adviser or Sub-Adviser subject to the oversight of and
pursuant to procedures adopted by the Board of Directors. See "Investment
Objective, Policies and Restrictions--Illiquid Securities" in the Statement of
Additional Information. Similar determinations may be made with respect to
commercial paper issued in reliance on the so-called "private placement"
exemption from registration under Section 4(2) of the 1933 Act.
BORROWING
The Fund may borrow money only from banks for temporary or emergency
purposes in an amount up to 10% of the value of the Fund's total assets,
provided that reverse repurchase agreements entered into by the Fund are not
subject to such limitation. Reverse repurchase agreements are subject,
however, to the asset coverage requirements of the Investment Company Act of
1940 (the "1940 Act") and to certain segregated account requirements. The Fund
has not entered into reverse repurchase agreements in the past and has no
current intention of entering into such agreements in the future. See
"Investment Objective, Policies and Restrictions--Reverse Repurchase
Agreements" in the Statement of Additional Information. Interest paid by the
Fund on borrowed funds will decrease the net earnings of the Fund. The Fund
will not purchase portfolio securities while outstanding borrowings (other
than reverse repurchase agreements) exceed 5% of the value of the Fund's total
assets. The Fund may mortgage, pledge or hypothecate its assets only to secure
such temporary or emergency borrowing. The policies set forth in this
paragraph are fundamental and may not be changed without the approval of a
majority of the Fund's shares.
PORTFOLIO TURNOVER
The Fund intends to acquire and hold securities for long-term capital
appreciation and normally does not intend to trade in securities for short-
term gains; however, securities may be purchased and sold at such times as
Management deems to be in the best interests of the Fund and its shareholders.
The method of calculating portfolio turnover rate is set forth in the
Statement of Additional Information under "Investment Objective, Policies and
Restrictions--Portfolio Turnover." Portfolio turnover rates for the Fund are
set forth in "Financial Highlights."
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INVESTMENT RESTRICTIONS
The Fund has adopted certain fundamental and nonfundamental investment
restrictions in addition to those set forth above. Fundamental investment
restrictions which may not be changed without shareholder approval include the
following: (1) With respect to 75% of its total assets, the Fund will not
invest more than 5% of the value of its total assets in any one issuer, or own
more than 10% of the outstanding voting securities of any one issuer. (These
restrictions do not apply to securities issued or guaranteed by the U.S.
government or any agency or instrumentality thereof. For purposes of these
restrictions, the government of any country (other than the U.S.), including
its governmental subdivisions, is each considered a single issuer.) (2) The
Fund will not invest 25% or more of the value of its total assets in the same
industry. (This restriction does not apply to securities issued or guaranteed
by the U.S. government or its agencies or instrumentalities.) In addition, as
nonfundamental investment restrictions which may be changed at any time
without shareholder approval, the Fund will not invest more than 5% of its net
assets in warrants or more than 5% of its total assets in the securities of
issuers which, with their predecessors, have a record of less than three
years' continuous operation. A list of the Fund's fundamental and
nonfundamental investment restrictions is set forth in the Statement of
Additional Information.
RISK FACTORS
Investment in foreign securities requires consideration of factors not
typically associated with investment in securities of U.S. issuers. Those
include the following:
Currency Fluctuations. The value of the Fund's portfolio securities computed
in U.S. dollars will vary with increases and decreases in the exchange rate
between the currencies in which the Fund has invested and the U.S. dollar. A
decline in the value of any particular currency against the U.S. dollar will
cause a decline in the U.S. dollar value of the Fund's holdings of securities
denominated in such currency and, therefore, will cause an overall decline in
the Fund's net asset value and net investment income and capital gains, if
any, to be distributed in U.S. dollars to shareholders by the Fund.
The rate of exchange between the U.S. dollar and other currencies is
determined by several factors, including the supply and demand for particular
currencies, central bank efforts to support particular currencies, the
movement of interest rates, the price of oil, the pace of activity in the
industrial countries, including the United States, and other economic and
financial conditions affecting the world economy.
Political and Economic Risks. Investing in securities of non-U.S. companies
may entail additional risks. Nationalization, expropriation or confiscatory
taxation, currency blockage, political changes, government regulation, social
instability or diplomatic developments could affect adversely the economy of a
country or the Fund's investment in such country. The Fund may also be
adversely affected by exchange control regulations.
Certain additional risks are involved in investing in the securities of
Eastern European issuers. Although the Fund has the ability to invest in such
securities, because of current political instability and military conflict in
Eastern Europe, the Fund does not currently hold any such securities and does
not intend to purchase any such securities until a more favorable political
climate exists.
Upon the accession to power of Communist regimes approximately 50 years ago,
the governments of a number of Eastern European countries expropriated a large
amount of property. The claims of many
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property owners against those governments were never finally settled. There
can be no assurance that any Fund investments in Eastern Europe would not also
be expropriated, nationalized or otherwise confiscated. In the event of such
expropriation, nationalization or other confiscation, the Fund could lose its
entire investment in the country involved. In addition, any change in the
leadership or policies of Eastern European countries, or any change in the
leadership or policies of the Commonwealth of Independent States (formerly,
the Union of Soviet Socialist Republics) that exercises a significant
influence over those countries, may halt the expansion of or reverse the
liberalization of foreign investment policies now occurring and adversely
affect existing investment opportunities.
Most Eastern European countries have had a centrally planned, socialist
economy since shortly after World War II. The governments of a number of
Eastern European countries currently are implementing reforms directed at
political and economic liberalization, including efforts to decentralize the
economic decision making process and move towards a market economy. There can
be no assurance that these reforms will continue or, if continued, will
achieve their goals. In addition, favorable economic developments in Eastern
Europe may not continue or may be reversed by unanticipated political events
that could adversely affect the Fund if it were invested in the securities of
Eastern European issuers.
Investing in the securities of Eastern European issuers involves certain
considerations not usually associated with investing in securities of issuers
in more developed capital markets such as the United States, Japan or Western
Europe, including (a) political and economic considerations, such as greater
risks of expropriation, confiscatory taxation and nationalization and less
social, political and economic stability; (b) the small current size of the
markets for such securities and the currently low or nonexistent volume of
trading, resulting in lack of liquidity and in price volatility; (c) certain
national policies which may restrict the Fund's investment opportunities,
including, without limitation, restrictions on investing in issuers or
industries deemed sensitive to relevant national interests; and (d) the
absence of developed legal structures governing private or foreign investments
and private property.
Corporate Disclosure Standards and Governmental Regulation. Non-U.S.
companies are not generally subject to uniform accounting, auditing and
financial reporting standards or to other regulatory requirements comparable
to those applicable to U.S. companies. Thus, there may be less available
information concerning non-U.S. issuers of securities held by the Fund than is
available concerning U.S. companies.
Applicable accounting and financial reporting standards in Eastern Europe
may be substantially different from U.S. accounting standards and, in certain
Eastern European countries, no reporting standards currently exist.
Consequently, substantially less information on Eastern European companies is
available to investors and the information that is available may not be
conceptually comparable to, or prepared on the same basis as that available in
more developed capital markets, which may make it difficult to assess the
financial status of particular companies. However, in order to become
attractive to Western international investors such as the Fund, some Eastern
European companies may submit to reviews of their financial condition
conducted in accordance with accounting standards employed in Western European
countries. Management believes that such information, together with the
application of other analytical techniques, can provide an adequate basis on
which to assess the financial viability of such companies.
Market Characteristics. Securities of many non-U.S. companies may be less
liquid and their prices more volatile than securities of comparable U.S.
companies. In addition, securities of companies traded in many countries
outside the U.S., particularly those of emerging countries in the Pacific
Basin, may be
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subject to further risks due to the inexperience of local brokers and
financial institutions in less developed markets, the possibility of permanent
or temporary termination of trading, and greater spreads between bid and asked
prices for securities. Non-U.S. stock exchanges and brokers are subject to
less governmental supervision and regulation than in the U.S. and non-U.S.
stock exchange transactions are usually subject to fixed commissions, which
are generally higher than negotiated commissions on U.S. transactions. In
addition, there may in certain instances be delays in the settlement of non-
U.S. stock exchange transactions.
Investment and Repatriation Restrictions. Several of the countries in the
Pacific Basin and certain European countries restrict, to varying degrees,
foreign investments in their securities markets. Government and private
restrictions take a variety of forms, including (a) limitations on the amount
of funds that may be introduced into or repatriated from the country
(including limitations on repatriation of investment income and capital
gains); (b) prohibitions or substantial restrictions on foreign investment in
certain industries or market sectors, such as defense, energy and
transportation; (c) restrictions (whether contained in the charter of an
individual company or mandated by the government) on the percentage of
securities of a single issuer which may be owned by a foreign investor;
(d) limitations on the types of securities which a foreign investor may
purchase; and (e) restrictions on a foreign investor's right to invest in
companies whose securities are not publicly traded. In some circumstances,
these restrictions may limit or preclude investment in certain countries or
may increase the cost of investing in securities of particular companies.
The governments of certain Eastern European countries may require that a
governmental or quasi-governmental authority act as custodian of the Fund's
assets invested in such countries. These authorities may not be qualified to
act as foreign custodians under the 1940 Act and, as a result, the Fund will
not be able to invest in these countries in the absence of exemptive relief
from the Securities and Exchange Commission. In addition, the risk of loss
through government confiscation may be increased in such countries.
The Fund may make direct investments in Taiwan if it adheres to certain
government restrictions or may invest in Taiwanese stocks quoted elsewhere.
However, the Fund currently intends to invest in Taiwan through the purchase
of shares of investment funds organized under the laws of Taiwan and through
Euromarket Instruments. The Fund currently may not make direct investments in
India. However, the laws regarding investments in India by foreigners have
recently changed and the Fund will most likely apply to the authorities in
India for permission to invest directly in that country. The return on the
Fund's investments in investment companies will be reduced by the operating
expenses, including investment advisory and administrative fees, of such
companies. The Fund's investment in an investment company may require the
payment of a premium above the net asset value of the investment company's
shares, and the market price of the investment company thereafter may decline
without any change in the value of the investment company's assets. The Fund,
however, will not invest in any investment company or trust unless it is
believed that the potential benefits of such investment are sufficient to
warrant the payment of any such premium. Under the 1940 Act, the Fund may not
invest more than 10% of its assets in investment companies or more than 5% of
its total assets in the securities of any one investment company, nor may it
own more than 3% of the outstanding voting securities of any such company.
Foreign Taxes. The Fund's interest and dividend income from foreign issuers
may be subject to non-U.S. withholding taxes. The Fund also may be subject to
taxes on trading profits in some countries. In addition, many of the countries
in the Pacific Basin have a transfer or stamp duties tax on certain
16
<PAGE>
securities transactions. The imposition of these taxes will increase the cost
to the Fund of investing in any country imposing such taxes. For U.S. tax
purposes, U.S. shareholders may be entitled to a credit or deduction to the
extent of any foreign income taxes paid by the Fund. See "Tax Status."
MANAGEMENT
BOARD OF DIRECTORS
The Board of Directors of Piper Global has the primary responsibility for
overseeing the overall management of Piper Global and electing its officers.
INVESTMENT ADVISER
Piper Capital Management Incorporated (the "Adviser") has been retained
under an Investment Advisory and Management Agreement (the "Advisory
Agreement") with Piper Global to act as the Fund's investment adviser subject
to the authority of the Board of Directors.
In addition to acting as the investment adviser for the Fund, the Adviser
serves as investment adviser to a number of other open-end and closed-end
investment companies and to various other concerns, including pension and
profit sharing funds, corporate funds and individuals. As of March 31, 1995,
the Adviser rendered investment advice regarding approximately $10.2 billion
of assets. The Adviser is a wholly owned subsidiary of Piper Jaffray Companies
Inc., a publicly held corporation which is engaged through its subsidiaries in
various aspects of the financial services industry. The address of the Adviser
is Piper Jaffray Tower, 222 South Ninth Street, Minneapolis, Minnesota 55402-
3804.
The Adviser supervises, directs and monitors the day to day operations of
the Fund in accordance with the Fund's investment objective, policies and
restrictions, as well as the implementation of investment programs formulated
by the Sub-Adviser. The Adviser is responsible for investing the portion of
the Fund's portfolio maintained in cash and short-term high quality debt
securities. The Adviser reviews investment and allocation determinations of
the Sub-Adviser. In addition, the Sub-Adviser must obtain the Adviser's
approval prior to (a) any investment of the assets of the Fund in any country
outside of the Pacific Basin or Europe, and (b) any investment by the Sub-
Adviser which would result in reallocation of in excess of 5% of the Fund's
total assets. The Adviser determines the broker-dealers which are eligible to
execute transactions on behalf of the Fund. The Adviser furnishes at its own
expense all necessary administrative services, office space, equipment and
clerical personnel for providing the foregoing services. In addition, the
Adviser pays the salaries and fees of all officers and directors of the Fund
who are affiliated with the Adviser. The Adviser is liable to the Fund for
losses resulting from willful misconduct, bad faith or gross negligence in the
performance of its duties or from its reckless disregard of its duties under
the Advisory Agreement.
Under the Advisory Agreement, the Fund pays the Adviser a monthly management
fee. The fee is paid at an annual rate of 1.00% on average daily net assets up
to $100 million, .875% on net assets over $100 million and up to $200 million,
and .75% on net assets over $200 million (the "Basic Fee"), and is subject to
adjustment as described below. The adjustment is based upon the investment
performance of the Fund in relation to the investment record of the Morgan
Stanley Capital International EAFESM Index (the "EAFE Index"). The Basic Fee
is higher than fees paid by most other investment companies.
Adjustments to the Basic Fee are made by comparison of the Fund's investment
performance for the applicable period with the investment record of the EAFE
Index. The Basic Fee for each month may be increased or decreased by up to
.25% (on an annualized basis) of the Fund's average daily net assets depending
upon the extent (as set forth below) by which the Fund's performance varies
from the EAFE Index over the applicable performance period. For purposes of
calculation of the performance
17
<PAGE>
adjustment, average daily net assets are equal to the Fund's average daily net
assets during the month for which the calculation is being made.
The following table illustrates the full range of permitted increases or
decreases to the Basic Fee on an annualized basis:
<TABLE>
<CAPTION>
ADJUSTMENT
TO BASIC FEE
PERFORMANCE OF FUND RELATIVE TO EAFE INDEX (ANNUALIZED)
------------------------------------------ ------------
<S> <C>
+5 Percentage Points or more................................. +.25
+4........................................................... +.20
+3........................................................... +.15
+2........................................................... +.10
+1........................................................... +.05
0.......................................................... 0
-1........................................................... -.05
-2........................................................... -.10
-3........................................................... -.15
-4........................................................... -.20
-5 Percentage Points or more................................. -.25
</TABLE>
The Basic Fee, plus or minus the performance adjustments calculated as
described herein, is paid monthly. The applicable performance period is a
rolling 12-month period consisting of the most recent calendar month plus the
immediately preceding 11 months.
In calculating the investment performance of the Fund as compared with the
investment record of the EAFE Index, dividends and other distributions of the
Fund and dividends and other distributions made with respect to component
securities of the EAFE Index during the performance period are treated as
having been reinvested. The investment performance of the Fund is calculated
based upon the total return of the Fund for the applicable period, which
consists of the total net asset value of the Fund at the end of the applicable
period, including reinvestment of dividends and distributions, less the net
asset value of the Fund at the commencement of the applicable period divided
by the net asset value of the Fund at the commencement of the applicable
period. Fractions of a percentage point are rounded to the nearest whole point
(to the higher whole point if exactly one-half).
The EAFE Index is a market capitalization weighted index containing (as of
March 31, 1995) 1,113 companies representing approximately 60% of the market
capitalization of each of the following 20 countries: Australia, Austria,
Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan,
The Netherlands, New Zealand, Norway, Singapore, Malaysia, Spain, Sweden,
Switzerland and the United Kingdom. The EAFE Index is an unmanaged index of
common stocks, whereas the Fund, under normal circumstances, may invest up to
35% of its assets in securities other than common stock. Additionally, the
largest percentages of the EAFE Index are currently represented by the
Japanese and United Kingdom markets, which currently represent approximately
44% and 16%, respectively, of the EAFE Index. Consequently, the extent to
which the EAFE Index increases or decreases in any one year will be affected
significantly by the performance of these markets. The Fund currently has
approximately 33% and 9%, respectively, of its total assets invested in Japan
and the United Kingdom. Because the Fund's weighting in these two markets is
not as significant as that of the EAFE Index, the performance of the other
markets in which the Fund invests, as compared to that of the Japanese and
United Kingdom markets, will affect to a significant degree whether the Fund
outperforms or underperforms the EAFE Index.
SUB-ADVISER
Edinburgh Fund Managers plc, Donaldson House, 97 Haymarket Terrace,
Edinburgh, Scotland EH12, 5HD, is the Sub-Adviser for the Fund under an
agreement with the Adviser (the "Sub-Advisory Agreement"). The Sub-Adviser is
responsible for the investment and reinvestment of the Fund's assets in
18
<PAGE>
non-U.S. securities and the placement of brokerage transactions in connection
therewith. For its services, the Sub-Adviser is paid a fee by the Adviser
equal to 65% of the Basic Fee plus or minus 90% of the performance fee
adjustment described above. Such fee is paid over the same time periods and
calculated in the same manner as the investment advisory fee described above
under "--Investment Adviser."
The Sub-Adviser is a public limited company that was incorporated in 1969.
It is a majority-owned subsidiary of The British Investment Trust PLC, a
Scottish closed-end investment company founded in 1889, for which the Sub-
Adviser serves as investment manager and adviser. The Sub-Adviser, an
investment adviser registered under the Advisers Act, currently furnishes
investment management services, directly or through subsidiaries, to ten
closed-end investment companies, twenty-six open-end investment companies
(which includes four open-end investment companies serving United Kingdom tax-
exempt institutional clients), twenty-one pension plans, four charitable
organizations and four other individual/corporate clients. As of March 31,
1995, the Sub-Adviser managed approximately $5.7 billion of assets.
Approximately 20% of such assets were invested in the Pacific Basin and 62% of
such assets were invested in Europe.
PORTFOLIO MANAGEMENT
The day-to-day management of the Fund is primarily the responsibility of the
Sub-Adviser. The following individuals employed by the Sub-Adviser co-manage
the Fund: Iain A. Watt, Michael W. Balfour, Jamie Sandison, Christian
Albuisson, David Currie and Gavin Grant. Mr. Balfour, who is a director of the
Fund, has been director of overseas investments for the Sub-Adviser since
1992, and was previously the assistant director and head of the Pacific
Department of the Sub-Adviser from 1988 to 1992. Mr. Watt, who is a director
of the Fund, has been the managing director of the Sub-Adviser since 1991,
prior to which he had been a director of the Sub-Adviser since 1986. Mr.
Sandison has been a portfolio manager in the Pacific Department since January
1994 and was previously an investment manager with Ivory and Sime plc from
1990 to 1994. Mr. Albuisson has been a portfolio manager in the European
Department of the Sub-Adviser since February 1990 and was previously an
investment manager with British Linen Fund Managers from June 1988 to February
1990. Mr. Currie was appointed assistant director of the Sub-Adviser in 1993
and head of the Japanese Department in 1992, prior to which he had been a
portfolio manager in that department since 1991 and a fund manager in the UK
Department from October 1988 to January 1991. Mr. Grant was appointed
assistant director of the Sub-Adviser in 1995 and head of the Latin American
Department in 1994, prior to which he had been a portfolio manager in that
department since 1991. Messrs. Watt, Balfour, Albuisson and Currie have been
co-managers of the Fund since its inception. Messrs. Sandison and Grant have
been co-managers of the Fund since 1994 and 1992, respectively.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND CUSTODIAN
First Trust National Association, 180 East Fifth Street, St. Paul, Minnesota
55101, serves as Custodian for the Fund's portfolio securities and cash.
Investors Fiduciary Trust Company ("IFTC"), 127 West Tenth Street, Kansas
City, Missouri 64105, serves as Transfer Agent and Dividend Disbursing Agent
for the Fund.
Rules adopted under the 1940 Act permit the Fund to maintain its securities
and cash in the custody of certain eligible banks and securities depositories.
The Fund's portfolio of Pacific Basin and European issuers is held by its sub-
custodians who are approved by the directors in accordance with such rules.
Such determination is made pursuant to such rules following a consideration of
a number of factors including, but not limited to, the reliability and
financial stability of the institution; the ability of the institution to
perform custodial services for the Fund; the reputation of the institution in
its national market; the political and economic stability of the country in
which the institution is located; and the risks of potential nationalization
or expropriation of Fund assets.
19
<PAGE>
Piper Global has entered into a Shareholder Account Servicing Agreement with
the Distributor. Under this agreement, the Distributor provides certain
transfer agent and dividend disbursing agent services for shareholder accounts
held at the Distributor. For more information, see "Investment Advisory and
Other Services--Transfer Agent and Dividend Disbursing Agent" in the Statement
of Additional Information.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
The Adviser and Sub-Adviser select brokers and futures commission merchants
to use for the Fund's portfolio transactions. In making its selection, the
Adviser may consider a number of factors, which are more fully discussed in
the Statement of Additional Information, including but not limited to,
research services, the reasonableness of commissions and quality of services
and execution. A broker's sales of Fund shares may also be considered a factor
if the Adviser or Sub-Adviser is satisfied that the Fund would receive from
that broker the most favorable price and execution then available for a
transaction. Portfolio transactions for the Fund may be effected through the
Distributor on a securities exchange in compliance with Section 17(e) of the
1940 Act. For more information, see "Portfolio Transactions and Allocation of
Brokerage" in the Statement of Additional Information.
DISTRIBUTION OF FUND SHARES
Piper Jaffray acts as the principal distributor of the Fund's shares. Piper
Global has adopted a Distribution Plan (the "Plan") as required by Rule 12b-1
under the 1940 Act. Under the Plan, the Distributor is entitled to
reimbursement each month for its actual expenses incurred in connection with
servicing of the Fund's shareholder accounts and in connection with
distribution related services provided with respect to the Fund, in an amount
not to exceed, on an annualized basis, .50% of the average daily net assets of
the Fund.
The Distributor is reimbursed under the Plan for its expenses incurred in
connection with the sale of Fund shares ("Distribution Expenses") and for its
costs in connection with the ongoing servicing and/or maintenance of
shareholder accounts ("Shareholder Servicing Costs"). Of the .50% of average
daily net assets reimbursable under the Plan, .25% may be reimbursed to cover
Shareholder Servicing Costs and .25% may be reimbursed to cover Distribution
Expenses. The Distributor has voluntarily agreed to limit reimbursements under
the Plan to .32% of the Fund's average daily net assets. This limitation may
be revised or terminated at any time after fiscal 1996 year end. The Adviser
and the Distributor, out of their own assets, may pay for certain expenses
incurred in connection with the distribution of shares of the Fund. In
particular, the Adviser may make payments out of its own assets to Piper
Jaffray investment executives and other broker dealers in connection with
their sales of shares of the Fund. See "How to Purchase Shares--Purchase
Price." Further information regarding the Plan is contained in the Statement
of Additional Information.
The Distributor's Shareholder Servicing Costs include payments to investment
executives of the Distributor and broker-dealers which have entered into sales
agreements with the Distributor. If shares of the Fund are sold by a
representative of a broker-dealer other than the Distributor, the broker-
dealer is paid .30% of the average daily net assets of the Fund attributable
to shares sold by the broker-dealer's representative. If shares of the Fund
are sold by an investment executive of the Distributor, compensation is paid
to the investment executive in the manner set forth in a written agreement, in
an amount not to exceed .30% of the average daily net assets of the Fund
attributable to shares sold by the investment executive. Of such payments, an
amount equal to .25% of average daily net assets of the Fund is considered a
Shareholder Servicing Cost under the Plan and the remainder is considered
ongoing sales compensation reimbursable as a Distribution Expense under the
Plan.
20
<PAGE>
Shareholder Guide to Investing
HOW TO PURCHASE SHARES
GENERAL
The Fund's shares may be purchased at the public offering price from the
Distributor and from other broker-dealers who have sales agreements with the
Distributor. The address of the Distributor is that of the Fund. The
Distributor reserves the right to reject any purchase order. You should be
aware that, because the Fund does not issue stock certificates, Fund shares
must be kept in an account with the Distributor or with IFTC. All investments
must be arranged through your Piper Jaffray investment executive or other
broker-dealer.
PURCHASE PRICE
You may purchase shares of the Fund at the net asset value per share next
calculated after receipt of your order by your Piper Jaffray investment
executive or other broker-dealer, plus a front-end sales charge as follows:
<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE
AMOUNT OF TRANSACTION AT OFFERING AS A PERCENTAGE OF AS A PERCENTAGE OF
PRICE OFFERING PRICE NET ASSET VALUE
--------------------------------- ------------------ ------------------
<S> <C> <C>
Less than $100,000................ 4.00% 4.17%
$100,000 but less than $250,000... 3.25% 3.36%
$250,000 but less than $500,000... 2.50% 2.56%
$500,000 and over................. 0.00% 0.00%
</TABLE>
This table sets forth total sales charges or underwriting commissions. The
Distributor may reallow up to the entire sales charge to broker-dealers in
connection with their sales of shares. These broker-dealers may, by virtue of
such reallowance, be deemed to be "underwriters" under the 1933 Act.
FUND SHARES ARE BEING OFFERED TO THE PUBLIC WITHOUT AN INITIAL OR DEFERRED
SALES CHARGE THROUGH JUNE 30, 1995. The Distributor will pay its investment
executives and other broker-dealers selling Fund shares a fee equal to 2.00%
of the net asset value of any shares sold during this period. These payments
will be an expense of the Distributor; they will not be reimbursed by the Fund
under its Rule 12b-1 Plan.
The Distributor will make certain payments to its investment executives and
to other broker-dealers in connection with their sales of Fund shares. See
"Distribution of Fund Shares," above. In addition, the Distributor or the
Adviser, at their own expense, provide promotional incentives to investment
executives of the Distributor and to broker-dealers who have sales agreements
with the Distributor in connection with sales of shares of the Fund and other
mutual funds for which the Adviser acts as investment adviser. In some
instances, these incentives may be made available only to certain investment
executives or broker-dealers who have sold or may sell significant amounts of
such shares. The incentives may include payment for travel expenses, including
lodging at luxury resorts, incurred in connection with sales seminars.
PURCHASES OF $500,000 OR MORE
If you make a purchase of $500,000 or more (including purchases made under a
Letter of Intent), a 1% contingent deferred sales charge will be assessed in
the event you redeem shares within 24 months following the purchase. This
sales charge will be paid to the Distributor. For more information, please
refer to the Contingent Deferred Sales Charge section of "How To Redeem
Shares." The Distributor
21
<PAGE>
Shareholder Guide to Investing
currently pays its investment executives and other broker-dealers fees in
connection with these purchases as follows:
<TABLE>
<CAPTION>
FEE AS
A PERCENTAGE
AMOUNT OF TRANSACTION OF OFFERING PRICE
--------------------- -----------------
<S> <C>
First $1,000,000........................................ 1.00%
Next $2,000,000......................................... 0.75%
Next $2,000,000......................................... 0.50%
Next $5,000,000......................................... 0.25%
Above $10,000,000....................................... 0.15%
</TABLE>
Piper Jaffray investment executives and other broker-dealers generally will
not receive a fee in connection with purchases on which the contingent
deferred sales charge is waived. However, the Distributor, in its discretion,
may pay a fee out of its own assets to its investment executives and other
broker-dealers in connection with purchases by employee benefit plans on which
no sales charge is imposed. Please see the Special Purchase Plans section of
"Reducing Your Sales Charge."
MINIMUM INVESTMENTS
A minimum initial investment of $250 is required.There is no minimum for
subsequent investments. The Distributor, in its discretion, may waive the
minimum.
REDUCING YOUR SALES CHARGE
You may qualify for a reduced sales charge through one or more of several
plans. You must notify your Piper Jaffray investment executive or broker-
dealer at the time of purchase to take advantage of these plans.
AGGREGATION
Front-end or initial sales charges may be reduced or eliminated by
aggregating your purchase with purchases of certain related personal accounts.
In addition, purchases made by members of certain organized groups will be
aggregated for purposes of determining sales charges. Sales charges are
calculated by adding the dollar amount of your current purchase to the higher
of the cost or current value of shares of any Piper fund sold with a sales
charge that are currently held by you and your related accounts or by other
members of your group.
Qualified Groups. You may group purchases in the following personal accounts
together:
. Your individual account.
. Your spouse's account.
. Your children's accounts (if they are under the age of 21).
. Your employee benefit plan accounts if they are exclusively for your
benefit. This includes accounts such as IRAs, individual 403(b) plans or
single-participant Keogh-type plans.
. A single trust estate or single fiduciary account if you are the trustee
or fiduciary.
22
<PAGE>
Shareholder Guide to Investing
Additionally, purchases made by members of any organized group meeting the
requirements listed below may be aggregated for purposes of determining sales
charges:
. The group has been in existence for more than six months;
. It is not organized for the purpose of buying redeemable securities of a
registered investment company; and
. Purchases must be made through a central administration, or through a
single dealer, or by other means that result in economy of sales effort
or expense.
An organized group does not include a group of individuals whose sole
organizational connection is participation as credit card holders of a
company, policyholders of an insurance company, customers of either a bank or
broker-dealer or clients of an investment adviser.
RIGHT OF ACCUMULATION
Sales charges for purchases of Fund shares into Piper Jaffray accounts will
be automatically calculated taking into account the dollar amount of any new
purchases along with the higher of current value or cost of shares previously
purchased in the Piper funds that were sold with a sales charge. For other
broker-dealer accounts, you should notify your investment executive at the
time of purchase of additional Piper fund shares you may own.
LETTER OF INTENT
Your sales charge may be reduced by signing a non-binding Letter of Intent.
This Letter of Intent will state your intention to invest $100,000 or more in
any of the Piper funds sold with a sales charge over a 13-month period,
beginning not earlier than 90 days prior to the date you sign the Letter. You
will pay the lower sales charge applicable to the total amount you plan to
invest over the 13-month period. Part of your shares will be held in escrow to
cover additional sales charges that may be due if you do not invest the
planned amount. Please see "Purchase of Shares" in the Statement of Additional
Information for more details. You can contact your Piper Jaffray investment
executive or other broker-dealer for an application.
SPECIAL PURCHASE PLANS
For more information on any of the following special purchase plans, contact
your Piper Jaffray investment executive or other broker-dealer.
PURCHASE BY PIPER JAFFRAY COMPANIES INC., ITS SUBSIDIARIES AND THE SUB-ADVISER
Piper Jaffray Companies Inc., its subsidiaries and the Sub-Adviser may buy
shares of the Fund without incurring a sales charge. The following persons
associated with such entities also may buy Fund shares without paying a sales
charge:
. Officers, directors and partners.
. Employees and retirees.
. Sales representatives.
. Spouses or children under the age of 21 of any of the above.
. Any trust, pension, profit-sharing or other benefit plan for any of the
above.
23
<PAGE>
Shareholder Guide to Investing
PURCHASES BY BROKER-DEALERS
Employees of broker-dealers who have entered into sales agreements with the
Distributor, and spouses and children under the age of 21 of such employees,
may buy shares of the Fund without incurring a sales charge.
PURCHASES BY OTHER INDIVIDUALS WITHOUT A SALES CHARGE
The following other individuals and entities also may buy Fund shares
without paying a sales charge:
. Clients of the Adviser buying shares of the Fund in their advisory
accounts.
. Discretionary accounts at Piper Trust Company and participants in
investment companies exempt from registration under the 1940 Act that are
managed by the Adviser.
. Trust companies and bank trust departments using funds over which they
exercise exclusive discretionary investment authority and which are held
in a fiduciary, agency, advisory, custodial or similar capacity.
. Investors purchasing shares through a Piper Jaffray investment executive
if the purchase of such shares is funded by the proceeds from the sale of
shares of any non-money market open-end mutual fund. This privilege is
available for 30 days after the sale.
PURCHASES BY EMPLOYEE BENEFIT PLANS AND TAX-SHELTERED ANNUITIES
. Shares of the Fund will be sold at net asset value, without a sales
charge, to employee benefit plans containing an actively maintained
qualified cash or deferred arrangement under Section 401(k) of the
Internal Revenue Code of 1986, as amended (the "Code") (a "401(k) Plan").
In the event a 401(k) Plan of an employer has purchased shares in the
Fund or in any other mutual fund managed by the Adviser (other than a
money market fund) during any calendar quarter, any other employee
benefit plan of such employer that is a qualified plan under Section
401(a) of the Code also may purchase shares of the Fund during such
quarter without incurring a sales charge.
. Custodial accounts under Section 403(b) of the Code (known as tax-
sheltered annuities) also may buy shares of the Fund without incurring a
sales charge.
HOW TO REDEEM SHARES
NORMAL REDEMPTION
You may redeem all or a portion of your shares on any day that the Fund
values its shares. (Please refer to "Valuation of Shares" below for more
information.) Your shares will be redeemed at the net asset value next
calculated after the receipt of your instructions in good form by your Piper
Jaffray investment executive or other broker-dealer as explained below.
Piper Jaffray Inc. Accounts. To redeem your shares, please contact your
Piper Jaffray investment executive with an oral request to redeem your shares.
24
<PAGE>
Shareholder Guide to Investing
Other Broker-Dealer Accounts. To redeem your shares, you may either contact
your broker-dealer with an oral request or send a written request directly to
the Fund's transfer agent, IFTC. This request should contain: the dollar
amount or number of shares to be redeemed, your Fund account number and either
a social security or tax identification number (as applicable). You should
sign your request in exactly the same way the account is registered. If there
is more than one owner of the shares, all owners must sign. A signature
guarantee is required for redemptions over $25,000. Please contact IFTC or
refer to "Redemption of Shares" in the Statement of Additional Information for
more details.
CONTINGENT DEFERRED SALES CHARGE
If you invest $500,000 or more and, as a result, pay no front-end sales
charge, you may incur a contingent deferred sales charge if you redeem within
24 months. This charge will be equal to 1% of the lesser of the net asset
value of the shares at the time of purchase or at the time of redemption. This
charge does not apply to amounts representing an increase in the value of Fund
shares due to capital appreciation or to shares acquired through reinvestment
of dividend or capital gain distributions. In determining whether a contingent
deferred sales charge is payable, shares that are not subject to any deferred
sales charge will be redeemed first, and other shares will then be redeemed in
the order purchased.
Letter of Intent. In the case of a Letter of Intent, the 24-month period
begins on the date the Letter of Intent is completed.
Special Purchase Plans. If you purchased your shares through one of the
plans described above under "Special Purchase Plans," the contingent deferred
sales charge will be waived. In addition, the contingent deferred sales charge
will be waived in the event of:
. The death or disability (as defined in Section 72(m)(7) of the Code) of
the shareholder. (This waiver will be applied to shares held at the time
of death or the initial determination of disability of either an
individual shareholder or one who owns the shares as a joint tenant with
the right of survivorship or as a tenant in common.)
. A lump sum distribution from an employee benefit plan qualified under
Section 401(a) of the Code, an individual retirement account under
Section 408(a) of the Code or a simplified employee pension plan under
Section 408(k) of the Code.
. Systematic withdrawals from any such plan or account if the shareholder
is at least 59 1/2 years old.
. A tax-free return of the excess contribution to an individual retirement
account under Section 408(a) of the Code.
. Involuntary redemptions effected pursuant to the right to liquidate
shareholder accounts having an aggregate net asset value of less than
$200.
Exchanges. If you exchange your shares, no contingent deferred sales charge
will be imposed. However, the charge will apply if you subsequently redeem the
new shares within 24 months of the original purchase.
25
<PAGE>
Shareholder Guide to Investing
Reinstatement Privilege. If you elect to use the Reinstatement Privilege
(please see "Shareholder Services" below), any contingent deferred sales
charge you paid will be credited to your account (proportional to the amount
reinvested). Please see "Redemption of Shares" in the Statement of Additional
Information for more details.
PAYMENT OF REDEMPTION PROCEEDS
After your shares have been redeemed, the cash proceeds will normally be
sent to you or your broker-dealer within five business days (three business
days after June 3, 1995). In no event will payment be made more than seven
days after receipt of your order in good form. However, payment may be
postponed or the right of redemption suspended for more than seven days under
unusual circumstances, such as when trading is not taking place on the New
York Stock Exchange. Payment of redemption proceeds may also be delayed if the
shares to be redeemed were purchased by a check drawn on a bank which is not a
member of the Federal Reserve System, until such check has cleared the banking
system (normally up to 15 days from the purchase date).
INVOLUNTARY REDEMPTION
The Fund reserves the right to redeem your account at any time if the net
asset value of the account falls below $200 as the result of a redemption or
exchange request. You will be notified in writing prior to any such redemption
and will be allowed 30 days to make additional investments before the
redemption is processed.
SHAREHOLDER SERVICES
AUTOMATIC MONTHLY INVESTMENT PROGRAM
You may arrange to make additional automated purchases of shares of the Fund
or certain other mutual funds managed by the Adviser. You can automatically
transfer $100 or more per month from your bank, savings and loan or other
financial institution to purchase additional shares. In addition, if you hold
your shares in a Piper Jaffray account you may arrange to make such additional
purchases by having $25 or more automatically transferred each month from any
of the money market fund series of Piper Funds. You should contact your Piper
Jaffray investment executive or IFTC to obtain authorization forms or for
additional information.
REINSTATEMENT PRIVILEGE
If you have redeemed shares of the Fund, you may be eligible to reinvest in
shares of any fund managed by the Adviser without payment of an additional
sales charge. The reinvestment request must be made within 30 days of the
redemption. This privilege is subject to the eligibility of share purchases
in your state as well as the minimum investment requirements and any other
applicable terms in the prospectus of the fund being acquired.
EXCHANGE PRIVILEGE
If your investment goals change, you may prefer a fund with a different
objective. If you are considering an exchange into another mutual fund managed
by the Adviser, you should carefully read the appropriate prospectus for
additional information about that fund. A prospectus may be obtained through
your Piper Jaffray investment executive, your broker-dealer or the
Distributor. To exchange your shares, please contact your Piper Jaffray
investment executive, your broker-dealer or IFTC.
26
<PAGE>
Shareholder Guide to Investing
You may exchange your shares for shares of any other mutual fund managed by
the Adviser that is open to new investors. All exchanges are subject to the
eligibility of share purchases in your state as well as the minimum investment
requirements and any other applicable terms in the prospectus of the fund
being acquired. Exchanges are made on the basis of net asset values of the
funds involved, except that investors exchanging into a fund which has a
higher sales charge must pay the difference.
You may make four exchanges per year without payment of a service charge.
Thereafter, you will pay a $5 service charge for each exchange. The Fund
reserves the right to change or discontinue the exchange privilege, or any
aspect of the privilege, upon 60 days' written notice.
TELEPHONE TRANSACTION PRIVILEGES
Piper Jaffray Inc. Accounts. If you hold your shares in a Piper Jaffray
account, you may telephone your investment executive to execute any
transaction or to apply for many shareholder services. In some cases, you may
be required to complete a written application.
Other Broker-Dealer Accounts. If you hold your shares in an account with
your broker-dealer or at IFTC, you may authorize telephone privileges by
completing the Account Application and Services Form. Please contact your
broker-dealer or IFTC (800-874-6025) for an application or for more details.
The Fund will employ reasonable procedures to confirm that a telephonic
request is genuine, including requiring that payment be made only to the
address of record or the bank account designated on the Account Application
and Services Form and requiring certain means of telephonic identification. If
the Fund follows such procedures, it will not be liable for following
instructions communicated by telephone that it reasonably believes to be
genuine. If the Fund does not employ such procedures, it may be liable for any
losses due to unauthorized or fraudulent telephone instructions.
DIRECTED DIVIDENDS
You may direct income dividends and capital gains distributions to be
invested in any other mutual fund managed by the Adviser (other than a money
market fund) that is offered in your state. This investment will be made at
net asset value. It will not be subject to a minimum investment amount except
that you must hold shares in such fund (including the shares being acquired
with the dividend or distribution) with a value at least equal to such fund's
minimum initial investment amount.
SYSTEMATIC WITHDRAWAL PLAN
If your account has a value of $5,000 or more, you may establish a
Systematic Withdrawal Plan. This plan will allow you to receive regular
periodic payments by redeeming as many shares from your account as necessary.
As with other redemptions, a redemption to make a withdrawal is a sale for
federal income tax purposes. Payments made under a Systematic Withdrawal Plan
cannot be considered as actual yield or income since part of the payments may
be a return of capital.
A request to establish a Systematic Withdrawal Plan must be submitted in
writing to your Piper Jaffray investment executive or other broker-dealer.
There are no service charges for maintenance; the minimum amount that you may
withdraw each period is $100. You will be required to have any income
dividends and any capital gains distributions reinvested. You may choose to
have withdrawals made monthly, quarterly or semi-annually. Please contact your
Piper Jaffray investment executive, other broker-dealer or IFTC for more
information.
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Shareholder Guide to Investing
You should be aware that additional investments in an account that has an
active Systematic Withdrawal Plan may be inadvisable due to sales charges and
tax liabilities. As a result, you will not be allowed to make additional
investments of less than $5,000 or three times the annual withdrawals while
you have the plan in effect. Please refer to "Redemption of Shares" in the
Statement of Additional Information for additional details.
ACCOUNT PROTECTION
If you purchased your shares of the Fund through a Piper Jaffray investment
executive, you may choose from several account options. Your investments in
the Fund held in a Piper Jaffray account (except for non-"PAT" accounts) would
be protected up to $25 million. Investments held in non-"PAT" Piper Jaffray
accounts are protected up to $2.5 million. In each case, the Securities
Investor Protection Corporation ("SPIC") provides $500,000 of protection; the
additional coverage is provided by The Aetna Casualty & Surety Company. This
protection does not cover any declines in the net asset value of Fund shares.
CONFIRMATION OF TRANSACTIONS AND REPORTING OF OTHER INFORMATION
Each time there is a transaction involving your Fund shares, such as a
purchase, redemption or dividend reinvestment, you will receive a confirmation
statement describing that activity. This information will be provided to you
from either Piper Jaffray, your broker-dealer or IFTC. In addition, you will
receive various IRS forms after the first of each year detailing important tax
information. The Fund is required to supply annual and semi-annual reports
that list securities held by the Fund and include the current financial
statements of the Fund.
Householding. If you have multiple accounts with Piper Jaffray, you may
receive some of the above information in combined mailings. This will not only
help to reduce Fund expenses, it will help the environment by saving paper.
Please contact your Piper Jaffray investment executive for more information.
DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income and distributions of net realized
capital gains, if any, will be payable to Fund shareholders on an annual
basis.
Buying a Dividend. On the record date for a distribution, the Fund's share
price is reduced by the amount of the distribution. If you buy shares just
before the record date ("buying a dividend"), you will pay the full price for
the shares and then receive a portion of the price back as a taxable
distribution.
Distribution Options. All net investment income dividends and net realized
capital gains distributions for the Fund generally will be payable in
additional shares of the Fund at net asset value ("Reinvestment Option"). If
you wish to receive your distributions in cash, you must notify your Piper
Jaffray investment executive or other broker-dealer. You may elect either to
receive income dividends in cash and capital gains distributions in additional
shares of the Fund at net asset value ("Split Option"), or to receive both
income dividends and capital gains distributions in cash ("Cash Option"). You
may also direct income dividends and capital gains distributions to be
invested in another mutual fund managed by the Adviser. See "Shareholder
Services--Directed Dividends" above. The taxable status of income dividends
and/or net capital gains distributions is not affected by whether they are
reinvested or paid in cash.
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<PAGE>
VALUATION OF SHARES
The Fund computes its net asset value on each day the New York Stock
Exchange (the "Exchange") is open for business. The calculation is made as of
the regular close of the Exchange (currently 4:00 p.m. New York time) after
the Fund has declared any applicable dividends. In valuing the Fund's assets,
all securities for which market quotations are readily available are valued
under normal circumstances at the last sales price prior to the time of
determination, or if no sale is reported at that time, the mean between the
closing asked price and the closing bid price or, if no bid and asked prices
are available, at the most recent available sales price. With respect to a
security which is listed or traded on more than one exchange, the Fund
normally looks to the exchange on which trading is more extensive. In
instances where market quotations are not readily available and in certain
other circumstances, fair value is determined according to methods selected in
good faith by the Board of Directors. Short-term investments having a maturity
of 60 days or less are valued at cost with any premium amortized or discount
credited over the period remaining until maturity. Options will be valued at
market value or fair value, as determined in good faith by or under the
direction of the Board of Directors, if no market exists. Futures contracts
will be valued at the settlement price established each day by the board of
trade or exchange on which they are traded. Securities and assets for which
market quotations are not readily available are valued at fair value as
determined in good faith by or under the direction of the Board of Directors.
Any assets or liabilities initially expressed in terms of foreign currencies
are translated into U.S. dollars by the pricing service retained by the Fund
or, to the extent that an exchange rate is not available through such pricing
service, at the mean of current bid and asked prices of such currencies
against the U.S. dollar last quoted by a major bank that is a regular
participant in the foreign exchange market. The Fund has been advised that the
pricing service translates foreign currencies into U.S. dollars on the basis
of the official exchange rate or by taking into account the quotes provided by
a number of major banks that are regular participants in the foreign exchange
market. Trading in securities on European and Pacific Basin securities
exchanges and in over-the-counter markets is normally completed well before
the close of business on each business day of the Fund. In addition, European
or Pacific Basin securities trading generally or in a particular country or
countries may not take place on all business days in New York. Furthermore,
trading takes place in various foreign markets on days which are not business
days of the Fund and on which the Fund's net asset value is not calculated.
Therefore, the net asset value of the Fund might be significantly affected on
days when the investor has no access to the Fund. The Fund calculates net
asset value per share as of the close of the regular trading session on the
Exchange. Such calculation does not take place contemporaneously with the
determination of the prices of the majority of the portfolio securities used
in such calculation. If events materially affecting the value of such
securities occur between the time when their price is determined and the time
when the Fund's net asset value is calculated, such securities will be valued
at fair value as determined in good faith by or under the direction of the
Board of Directors.
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<PAGE>
TAX STATUS
The Fund qualified as a regulated investment company under Subchapter M of
the Internal Revenue Code of 1986, as amended, during its last taxable year
and intends to qualify as a regulated investment company during the current
taxable year. If so qualified, the Fund will not be liable for federal income
taxes to the extent it distributes its taxable income to shareholders.
Distributions by the Fund are generally taxable to the shareholders, whether
received in cash or additional shares of the Fund (or shares of another mutual
fund managed by the Adviser). Distributions of net capital gains (designated
as "capital gain dividends") are taxable to shareholders as long-term capital
gains, regardless of the length of time the shareholder has held shares of the
Fund.
A shareholder will recognize a capital gain or loss upon the sale or
exchange of shares in the Fund if, as is normally the case, the shares are
capital assets in the shareholder's hands. This capital gain or loss will be
long-term if the shares have been held for more than one year.
The Fund's investments may be subject to taxes in foreign countries which
would reduce the total return on such investments. In addition, if the Fund is
deemed to be a resident of the United Kingdom for United Kingdom tax purposes
or if the Fund is treated as being engaged in a trading activity through an
agent in the United Kingdom, there is a risk that the United Kingdom will
attempt to tax all or a portion of the Fund's gains or income. In light of the
structure of the Fund and the terms and conditions of the Advisory and Sub-
Advisory Agreements, the Adviser believes that any such risk is minimal.
If the Fund has more than 50% of its assets invested in the stock or
securities of foreign corporations at the end of the Fund's taxable year, the
Fund may make an election to allow shareholders either to claim U.S. foreign
tax credits with respect to such foreign taxes paid or to deduct such amounts
as an itemized deduction on their tax return. In the event such an election is
made, shareholders would have to increase their taxable income by the amount
of such taxes and the Fund would not be able to deduct such taxes in computing
its taxable income.
The foregoing relates to federal income taxation as in effect as of the date
of this Prospectus. For a more detailed discussion of the federal income tax
consequences of investing in shares of the Fund, see "Taxation" in the
Statement of Additional Information. Before investing in the Fund, you should
check the consequences of your local and state tax laws.
PERFORMANCE COMPARISONS
Advertisements and other sales literature for the Fund may refer to the
Fund's "average annual total return" and "cumulative total return." All such
total return quotations are based upon historical earnings and are not
intended to indicate future performance. The return on and principal value of
an investment in the Fund will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
Average annual return is the average annual compounded rate of return on a
hypothetical $1,000 investment made at the beginning of the advertised period.
Cumulative total return is calculated by subtracting a hypothetical $1,000
payment to the Fund from the redeemable value of such payment at the end of
the advertised period, dividing such difference by $1,000 and multiplying the
quotient by 100.
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<PAGE>
In calculating average annual and cumulative total return, the maximum sales
charge is deducted from the hypothetical investment and all dividends and
distributions are assumed to be reinvested.
In addition to advertising total return, comparative performance information
may be used from time to time in advertising the Fund's shares including data
from Lipper Analytical Services, Inc. and other entities or organizations
which track the performance of investment companies. Performance of the Fund
may be compared to the EAFE Index and to the performance of International
Funds as reported by Lipper.
For additional information regarding the calculation of average annual total
return and cumulative total return, see "Calculation of Performance Data" in
the Statement of Additional Information.
GENERAL INFORMATION
Piper Global is authorized to issue a total of 100 billion shares of common
stock, with a par value of $.01 per share. These shares can be issued in more
than one class or series. Each designated series of stock will represent a
separate portfolio of investments, each with a different investment objective.
The Board of Directors has authorized two billion shares to be issued as
Series A Common Shares, which are the shares of common stock of the Fund.
Currently, Series A is the only outstanding series of shares of Piper Global.
In addition, the Board of Directors may, without shareholder approval,
create and issue one or more additional classes of shares within the Fund, as
well as within any series of Piper Global created in the future. All classes
of shares in the Fund would be identical except that each class of shares
would be available through a different distribution channel and certain
classes might incur different expenses for the provision of distribution
services or the provision of shareholder services or administration assistance
by institutions. Shares of each class would share equally in the gross income
of the Fund, but any variation in expenses would be charged separately against
the income of the particular class incurring such expenses. This would result
in variations in net investment income accrued and dividends paid by and in
the net asset value of the different classes of the Fund. This ability to
create multiple classes of shares within the Fund will allow Piper Global in
the future the flexibility to better tailor its methods of marketing,
administering and distributing shares of the Fund to the needs of particular
investors and to allocate expenses related to such marketing, administration
and distribution methods to the particular classes of shareholders of the Fund
incurring such expenses.
All shares, when issued, will be fully paid and nonassessable and will be
redeemable. All shares have equal voting rights. They can be issued as full or
fractional shares. A fractional share has pro rata the same kind of rights and
privileges as a full share. The shares possess no preemptive or conversion
rights.
Each share has one vote (with proportionate voting for fractional shares).
Cumulative voting is not authorized. This means that the holders of more than
50% of the shares voting for the election of directors can elect 100% of the
directors if they choose to do so, and, in such event, the holders of the
remaining shares will be unable to elect any directors.
On an issue affecting only a particular series, the shares of the affected
series vote separately. An example of such an issue would be a fundamental
investment restriction pertaining to only one series. In voting on the
Investment Advisory and Management Agreement (the "Agreement"), approval of
the
31
<PAGE>
Agreement by the shareholders of a particular series would make the Agreement
effective as to that series whether or not it had been approved by the
shareholders of any other series.
If Piper Global issues shares in additional series, the assets received by
Piper Global for the issue or sale of shares of each series, and all income,
earnings, profits and proceeds thereof, subject only to the rights of
creditors, will be allocated to such series, and constitute the underlying
assets of such series. The underlying assets of each series are required to be
segregated on the books of account, and are to be charged with the expenses in
respect to such series and with a share of the general expenses of Piper
Global. Any general expenses of Piper Global not readily identifiable as
belonging to a particular series shall be allocated among the series based
upon the relative net assets of the series at the time such expenses were
accrued.
The Bylaws of Piper Global provide that shareholder meetings need be held
only with such frequency as required under Minnesota law. Minnesota
corporation law requires only that the Board of Directors convene shareholders
meetings when it deems appropriate. In addition, Minnesota law provides that
if a regular meeting of shareholders has not been held during the immediately
preceding 15 months, a shareholder or shareholders holding 3% or more of the
voting shares of Piper Global may demand a regular meeting of shareholders by
written notice given to the chief executive officer or chief financial officer
of Piper Global. Within 30 days after receipt of the demand, the Board of
Directors shall cause a regular meeting of shareholders to be called, which
meeting shall be held no later than 90 days after receipt of the demand, all
at the expense of Piper Global. In addition, the 1940 Act requires a
shareholder vote for all amendments to fundamental investment policies and
restrictions and for all amendments to investment advisory contracts and Rule
12b-1 distribution plans. The 1940 Act also provides that directors of Piper
Global may be removed by action of the record holders of two-thirds or more of
the outstanding shares of Piper Global. The directors are required to call a
meeting of shareholders for the purpose of voting upon the question of removal
of any director when so requested in writing by the record holders of at least
10% of Piper Global's outstanding shares.
PENDING LEGAL PROCEEDINGS
Complaints have been filed in U.S. District Court against the Adviser and
the Distributor relating to several other investment companies for which the
Adviser acts as investment adviser or subadviser. These lawsuits do not
involve the Fund and the Adviser and Distributor do not believe that the
lawsuits will have a material adverse effect upon their ability to perform
under their agreements with the Fund. An agreement in principle has been
reached to settle one such lawsuit. The Adviser and Distributor intend to
defend the other lawsuits vigorously. See "Pending Legal Proceedings" in the
Statement of Additional Information.
NO DEALER, SALES REPRESENTATIVE OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS (AND/OR IN THE STATEMENT OF ADDITIONAL INFORMATION REFERRED TO
ON THE COVER PAGE OF THIS PROSPECTUS) AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
FUND OR PIPER JAFFRAY INC. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION.
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<PAGE>
Pacific-European Growth Fund
A Series of Piper Global Funds Inc.
Investment Adviser
Piper Capital Management Incorporated
Sub-Adviser
Edinburgh Fund Managers plc
Distributor
Piper Jaffray Inc.
Custodian
First Trust National Association
Transfer Agent
Investors Fiduciary Trust Company
Legal Counsel
Dorsey & Whitney P.L.L.P.
Table of Contents
<TABLE>
<CAPTION>
page
<S> <C>
Introduction............................................................. 2
Fund Expenses............................................................ 4
Financial Highlights..................................................... 5
Investment Objective and Policies........................................ 6
Special Investment Methods............................................... 8
Risk Factors............................................................. 14
Management............................................................... 17
Distribution of Fund Shares.............................................. 20
SHAREHOLDER GUIDE TO INVESTING
How to Purchase Shares................................................. 21
Reducing Your Sales Charge............................................. 22
Special Purchase Plans................................................. 23
How to Redeem Shares................................................... 24
Shareholder Services................................................... 26
Dividends and Distributions............................................ 28
Valuation of Shares...................................................... 29
Tax Status............................................................... 30
Performance Comparisons.................................................. 30
General Information...................................................... 31
</TABLE>
PGPEX-05
<PAGE>
PART B
PACIFIC-EUROPEAN GROWTH FUND
A Series of Piper Global Funds Inc.
STATEMENT OF ADDITIONAL INFORMATION
April 28, 1995
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
Investment Objective, Policies and Restrictions..... 2
Directors and Executive Officers.................... 10
Investment Advisory and Other Services.............. 15
Portfolio Transactions and Allocation of Brokerage.. 21
Capital Stock and Ownership of Shares............... 23
Net Asset Value and Public Offering Price........... 23
Calculation of Performance Data..................... 24
Purchase of Shares.................................. 25
Redemption of Shares................................ 25
Taxation............................................ 27
General Information................................. 31
Financial Statements................................ 31
Pending Litigation.................................. 31
Appendix A - Corporate Bond, Preferred Stock and
Commercial Paper Ratings.......................... A-1
Appendix B - General Characteristics and Risks of
Options and Futures............................... B-1
</TABLE>
This Statement of Additional Information is not a prospectus. This
Statement of Additional Information relates to the prospectus dated April 28,
1995, and should be read in conjunction therewith. A copy of the prospectus may
be obtained from the Fund at Piper Jaffray Tower, 222 South Ninth Street,
Minneapolis, Minnesota 55402-3804.
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<PAGE>
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
-----------------------------------------------
The investment objective and policies of the Fund are set forth in the
prospectus. Certain additional investment information is set forth below.
INVESTMENT BACKGROUND
The Pacific Basin. Management believes that there are significant
investment opportunities available in the Pacific Basin. Its reasons for this
view include the following:
(a) Historic Economic Growth. Many countries in the Pacific Basin have,
over approximately the last 25 years, experienced an economic growth rate
superior to that of the U.S. Management believes that, based on its evaluation
of the factors which in its view have contributed to the high level of growth
experienced by countries in the Pacific Basin, the rapid growth rate of
countries in the region should continue.
(b) Attractive Relative Valuations. Management believes that the
potential future values of companies within the region have not been reflected
in stock market prices to as great an extent as in other areas of the world.
Accordingly, Management believes that a significant number of undervalued
companies are located in the region.
(c) Expansion of Equity Markets. Management believes that the stock
markets of countries in the Pacific Basin are maturing, that the strong economic
growth of the region will continue and that foreign investment will increase
substantially.
(d) Consumer Demand. Approximately 50% of the world's population lives
within the Pacific Basin, including China and India. Management believes that,
to the extent that economic growth within the region continues and per capita
income rises, consumer demand within the region should expand, which in turn
would provide further impetus to economic development.
Europe. The European economy as represented by the Gross Domestic Product
of Europe, including the United Kingdom, is greater than that of the U.S. and
almost twice the size of Japan. Management is of the view that the economic
growth of countries within Europe has not to date been fully reflected in stock
prices. Thus, the stock market capitalization of the European countries is
generally smaller relative to the size of their respective economies than are
the stock markets of the U.S. and Japan. Management believes that recent
developments in Europe will contribute to a significant increase in domestic and
foreign investment in the European stock markets, resulting in European stock
market capitalizations more reflective of the size of the respective European
economies and in turn a corresponding increase in stock market prices generally.
2
<PAGE>
In Management's view, the action of the European Union, consisting of
twelve Western European countries, in adopting the Single European Act, is of
particular importance. In Management's view, the dismantling of controls and
barriers and harmonization of laws and regulations will result in the
achievement of a higher economic growth rate and lower inflation in the region
as a whole than would otherwise have been the case. Management believes that
the progressive development of a single European market could be beneficial for
economic growth, investment and the control of inflation. In addition, recent
political developments in Eastern Europe are expected to result in an opening up
of these markets. Management anticipates that the development of market
oriented economies by Eastern European countries will contribute to economic
growth in Western Europe and extend the consumer market place of the whole
region.
Eastern European Developments. Although the changes taking place in
Eastern Europe are a continuing process and direct access to most of these
potential markets by foreign investors is limited, Management may in the future
seek to invest in the business opportunities that may emerge from the changing
political, economic and legal environment in Eastern Europe, particularly in
Hungary, Poland and the Czech and Slovak Republics. However, Management
believes that at the present time there are very few appropriate investments
available for the Fund in Eastern Europe and Management does not intend to make
any such investments in the near future. While Management expects that
additional investments will become available in the future, there can be no
assurance that this will be the case. Certain Eastern European countries are
currently implementing reforms directed at political and economic
liberalization, including efforts to move toward more market-oriented economies
and to foster multi-party political systems. For example, Hungary and Poland
have adopted reforms to stimulate their economies and encourage foreign
investment. Specifically, laws have been or are being enacted to allow private
individuals to own and operate businesses and to protect the property rights of
investors. Such laws seek to assure foreign investors of the right to own
interests in and, under certain circumstances, control local companies and to
repatriate capital and profits, and in certain cases grant favorable tax
treatment to companies with foreign participation.
As a result of these and other measures, Management expects that foreign
direct investment in Eastern Europe may increase. In addition, the World Bank,
the International Monetary Fund and various national governments and private
banks are providing financing to companies based in, and governments of, certain
Eastern European countries. The European Union has entered into trade and
cooperation agreements with most Eastern European countries and has provided
technical and financial assistance to such countries. Further, the United
States has granted many Eastern European nations "most favored nation" status
with respect to trade matters.
Allocation of Investments Between the Pacific Basin and Europe. As noted
above under "Investment Background - The Pacific Basin," the Pacific Basin
includes several countries that have experienced high economic growth rates in
3
<PAGE>
recent years. Also, Management believes that there are more attractive values
in the region as compared to other areas of the world. Consequently, Management
believes that the opportunities for long-term capital appreciation in the
Pacific Basin are generally superior to those presently available in the
economically more mature areas of the world. Accordingly, while the Fund has no
specific policy or restriction on the allocation of its funds between Europe and
the Pacific Basin, as of March 31, 1995, approximately 64% of the Fund's
investments were in companies in the Pacific Basin and approximately 26% were in
companies in Europe. The relative emphasis of the Fund's investments as
between the Pacific Basin and Europe may change over time to the extent
Management identifies greater investment opportunities in Europe as a result of
more attractive values, recent developments in Eastern Europe, the removal of
most intra-European trade barriers or otherwise.
Allocation Among Countries. Investment is made in those countries where
Management believes that economic and political factors, including currency
movements, are likely to produce above average investment returns. There is no
limitation on the percentage of the Fund's assets that may be invested at any
one time in securities of companies in one or more of the countries in the
Pacific Basin or in Europe, except insofar as the Fund is limited in its ability
to invest in other investment companies; provided, however, that in normal
market conditions the Fund's investments will be allocated among at least three
different countries in the Pacific Basin and/or Europe. To the extent the Fund
invests a significant portion of its assets in any one country, it will be more
susceptible to factors adversely affecting issuers in such country than would a
comparable fund having a lesser percentage of its assets so invested.
Selection of Investments. Emphasis is placed on identifying securities of
companies believed to be undervalued in the marketplace in relation to such
factors as the company's assets, earnings and growth potential or which are
believed best positioned within a particular industry to take advantage of
specific economic and political factors likely to result in growth for such
industry. The Fund does not, however, concentrate its investments in companies
of a particular asset size or in a particular industry, but instead selects its
investments based on the characteristics of the particular markets and economies
of the countries in which it invests.
FOREIGN CURRENCY TRANSACTIONS
As discussed in the prospectus, the Fund engages in currency exchange
transactions in connection with the purchase and sale of its investments. 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 as agreed by the parties, at a price set at the
time of the contract. In the case of a cancelable forward contract, the holder
has the unilateral right to cancel the contract at maturity by paying a
specified fee. The 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 requirement, and no
commissions are charged at any stage for trades. A
4
<PAGE>
foreign currency futures contract is a standardized contract for the future
delivery of a specified amount of a foreign currency at a future date at a price
set at the time of the contract. Foreign currency futures contracts traded in
the United States are designated by and traded on exchanges regulated by the
Commodity Futures Trading Commission ("CFTC"), such as the New York Mercantile
Exchange. The Fund would enter into foreign currency futures contracts solely
for hedging or other appropriate risk management purposes as defined in CFTC
regulations.
Forward foreign currency exchange contracts differ from foreign currency
futures contracts in certain respects. For example, the maturity date of a
forward contract may be any fixed number of days from the date of the contract
agreed upon by the parties, rather than a predetermined date in any given month.
Forward contracts may be in any amounts agreed upon by the parties rather than
predetermined amounts. Also, forward foreign exchange contracts are traded
directly between currency traders so that no intermediary is required. A
forward contract generally requires no margin or other deposit.
At the maturity of a forward or futures contract, the Fund may either
accept or make delivery of the currency specified in the contract, or at or
prior to maturity enter into a closing transaction involving the purchase or
sale of an offsetting contract. Closing transactions with respect to forward
contracts are usually effected with the currency trader who is a party to the
original forward contract. Closing transactions with respect to futures
contracts are effected on a commodities exchange; a clearing corporation
associated with the exchange assumes responsibility for closing out such
contracts.
Positions in foreign currency futures contracts may be closed out only on
an exchange or board of trade which provides a secondary market in such
contracts. Although the Fund purchases or sells foreign currency futures
contracts only on exchanges or boards of trade where there appears to be an
active secondary market, there is no assurance that a secondary market on an
exchange or board of trade will exist for any particular contract or at any
particular time. In such event, it may not be possible to close a futures
position and, in the event of adverse price movements, the Fund would continue
to be required to make daily cash payments of variation margin.
Options on foreign currencies operate similarly to options on securities,
and are traded primarily in the over-the-counter market, although options on
foreign currencies have recently been listed on several exchanges. Options
traded in the over-the-counter market are illiquid and it may not be possible
for the Fund to dispose of an option it has purchased or terminate its
obligations under an option it has written at a time when the Adviser believes
it would be advantageous to do so. Options on foreign currencies are affected
by all of those factors which influence foreign exchange rates and investments
generally.
The value of a foreign currency option is dependent upon the value of the
foreign currency and the U.S. dollar, and may have no relationship to the
5
<PAGE>
investment merits of a foreign debt security. Because foreign currency
transactions occurring in the interbank market involve substantially larger
amounts than those that may be involved in the use of foreign currency options,
investors may be disadvantaged by having to deal in an odd-lot market (generally
consisting of transactions of less than $1 million) for the underlying foreign
currencies at prices that are less favorable than for round lots. There is no
systematic reporting of last sale information for foreign currencies and there
is no regulatory requirement that quotations available through dealers or other
market sources be provided on a timely basis. Available quotation information
is generally representative of very large transactions in the interbank market
and thus may not reflect relatively smaller transactions (less than $1 million)
where rates may be less favorable. The interbank market in foreign currencies
is a global, around-the-clock market. To the extent that the U.S. options
markets are closed while the markets for the underlying currencies remain open,
significant price and rate movements may take place in the underlying markets
that cannot be reflected in the options markets.
Although foreign exchange dealers do not charge a fee for currency
conversion, they do realize a profit based upon the difference between prices at
which they are buying and selling 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.
REVERSE REPURCHASE AGREEMENTS
The Fund has the right to enter into reverse repurchase agreement
transactions. However, the Fund does not currently enter into or intend to
enter into such transactions during the coming year.
The Fund may enter into reverse repurchase agreements with the same parties
with whom it may enter into repurchase agreements. See "Special Investment
Methods - Repurchase Agreements" in the prospectus. Under a reverse repurchase
agreement, the Fund sells securities and agrees to repurchase them at a mutually
agreed date and price. Because certain of the incidents of ownership of the
security are retained by the Fund, reverse repurchase agreements are considered
a form of borrowing by the Fund from the buyer, collateralized by the security.
At the time the Fund enters into a reverse repurchase agreement, it will
establish and maintain a segregated account with an approved custodian
containing high grade liquid debt securities having a value not less than the
repurchase price (including accrued interest). Reverse repurchase agreements
involve the risk that the market value of the securities retained in lieu of
sale by the Fund may decline below the price of the securities the Fund has sold
but is obligated to repurchase. In the event the buyer of securities under a
reverse repurchase agreement files for bankruptcy or becomes insolvent, such
buyer or its trustee or receiver may receive an extension of time to determine
whether to enforce the Fund's obligation to repurchase the securities and the
Fund's use of the proceeds of the reverse repurchase agreement may effectively
be restricted pending such decisions. Reverse repurchase agreements will be
used as a means of borrowing for investment
6
<PAGE>
purposes. This speculative technique is referred to as leveraging. Leveraging
may exaggerate the effect on net asset value of any increase or decrease in the
market value of the Fund's portfolio. Money borrowed for leveraging will be
subject to interest costs which may or may not be recovered by income from or
appreciation of the securities purchased. The Fund's Board of Directors has
established procedures, which are periodically reviewed by the Board, pursuant
to which the Adviser will monitor the creditworthiness of the dealers and banks
with which the Fund enters into reverse repurchase agreement transactions.
The Securities and Exchange Commission views reverse repurchase agreement
transactions as collateralized borrowings by the Fund. Therefore, pursuant to
the Investment Company Act of 1940 (the "1940 Act"), the Fund must maintain
continuous asset coverage (that is, total assets including borrowings, less
liabilities exclusive of borrowings) of at least 300% of the amount
borrowed.
ILLIQUID SECURITIES
As a fundamental investment restriction that may not be changed without
shareholder approval, the Fund will invest no more than 15% of its net assets in
illiquid securities. A security is considered illiquid if it cannot be sold in
the ordinary course of business within seven days at approximately the price at
which it is valued. Illiquid securities may offer a higher yield than
securities which are more readily marketable, but they may not always be
marketable on advantageous terms.
The sale of illiquid securities often requires more time and results in
higher brokerage charges or dealer discounts and other selling expenses than
does the sale of securities eligible for trading on national securities
exchanges or in the over-the-counter markets. The Fund may be restricted in its
ability to sell such securities at a time when the Adviser deems it advisable to
do so. In addition, in order to meet redemption requests, the Fund may have to
sell other assets, rather than such illiquid securities, at a time which is not
advantageous.
"Restricted securities" are securities which were originally sold in
private placements and which have not been registered under the Securities Act
of 1933 (the "1933 Act"). Such securities generally have been considered
illiquid, since they may be resold only subject to statutory restrictions and
delays or if registered under the 1933 Act. In 1990, however, the Securities
and Exchange Commission adopted Rule 144A under the 1933 Act, which provides a
safe harbor exemption from the registration requirements of the 1933 Act for
resales of restricted securities to "qualified institutional buyers," as defined
in the rule. The result of this rule has been the development of a more liquid
and efficient institutional resale market for restricted securities. Thus,
restricted securities are no longer necessarily illiquid. The Fund may therefore
invest in Rule 144A securities and treat them as liquid when they have been
determined to be liquid by the Board of Directors of the Company or by the
Adviser subject to the oversight of and pursuant to procedures adopted by the
Board of Directors (as discussed below). Similar determinations may be made
with
7
<PAGE>
respect to securities issued in reliance on the so-called "private placement"
exemption from registration under Section 4(2) of the 1933 Act.
Under the procedures adopted by the Board of Directors, factors taken into
account in determining the liquidity of a security include (a) the frequency of
trades and quotes for the security; (b) the number of dealers willing to
purchase or sell the security and the number of other potential purchasers; (c)
dealer undertakings to make a market in the security; and (d) the nature of the
security and the nature of the marketplace trades (e.g., the time needed to
dispose of the security, the method of soliciting offers and the mechanics of
transfer). With respect to Rule 144A securities, investing in such securities
could have the effect of increasing the level of Fund illiquidity to the extent
that qualified institutional buyers become, for a time, uninterested in
purchasing these securities.
PORTFOLIO TURNOVER
Portfolio turnover is the ratio of the lesser of annual purchases or sales
of portfolio securities to the average monthly value of portfolio securities,
not including securities maturing in less than 12 months. A 100% portfolio
turnover rate would occur, for example, if the lesser of the value of purchases
or sales of portfolio securities for a particular year were equal to the average
monthly value of the portfolio securities owned during such year.
INVESTMENT RESTRICTIONS
The Fund's investment objective and the following investment restrictions
are fundamental and cannot be changed without the approval of the holders of a
majority of the Fund's outstanding voting securities (defined in the 1940 Act
as the lesser of (a) more than 50% of the outstanding shares or (b) 67% or more
of the shares represented at a meeting where more than 50% of the outstanding
shares are represented). All other investment policies or practices are
considered by the Fund not to be fundamental and, accordingly, may be changed
without shareholder approval. If a percentage restriction on investment or use
of assets set forth below is adhered to at the time a transaction is effected,
later changes in percentage resulting from changing market values will not be
considered a deviation from policy. The Fund may not:
(1) With respect to 75% of its total assets, invest more than 5% of the
value of its total assets (taken at market value at the time of purchase) in the
outstanding securities of any one issuer, or own more than 10% of the
outstanding voting securities of any one issuer, in each case other than
securities issued or guaranteed by the United States government or any agency or
instrumentality thereof. For purposes of these restrictions, the government of
any country (other than the U.S.), including its governmental subdivisions, is
each considered a single issuer.
(2) Invest 25% or more of the value of its total assets in the securities
of issuers in the same industry, provided that this limitation does not apply to
8
<PAGE>
securities issued or guaranteed by the United States government or its agencies
or instrumentalities.
(3) Borrow money (provided that the Fund may enter into reverse repurchase
agreements) except from banks for temporary or emergency purposes. The amount
of such borrowing may not exceed 10% of the value of the Fund's total assets.
The Fund will not purchase portfolio securities while outstanding borrowing
exceeds 5% of the value of the Fund's total assets. The Fund will not borrow
money for leverage purposes (provided that the Fund may enter into reverse
repurchase agreements for such purposes).
(4) Pledge, hypothecate, mortgage or otherwise encumber its assets, except
to secure issuances or borrowings permitted by restriction 3 above (collateral
arrangements with respect to reverse repurchase agreements or to margin for
future contracts and options are not deemed to be pledges or other encumbrances
for purposes of this restriction).
(5) Make loans of money or property to any person, except through loans of
portfolio securities, the purchase of debt obligations in which the Fund may
invest consistently with the Fund's investment objective and policies or the
acquisition of securities subject to repurchase agreements.
(6) Underwrite the securities of other issuers, except to the extent that
in connection with the disposition of portfolio securities or the sale of its
own shares the Fund may be deemed to be an underwriter.
(7) Invest for the purpose of exercising control over management of any
company.
(8) Purchase real estate or interests therein other than securities backed
by mortgages and similar instruments.
(9) Purchase or sell commodities or commodity contracts except for hedging
purposes.
(10) Make any short sales of securities.
(11) Issue any senior securities (as defined in the 1940 Act), other than
as set forth in restriction number 3 above and except to the extent that using
options and futures contracts or purchasing or selling securities on a when-
issued or forward commitment basis may be deemed to constitute issuing a senior
security.
(12) Invest more than 15% of the value of its net assets in illiquid
securities.
In addition, the following are non-fundamental investment restrictions of
the Fund which may be changed without shareholder approval:
9
<PAGE>
(a) The Fund will not purchase or sell interests in oil, gas or mineral
leases or interests in oil, gas or other mineral exploration or development
programs.
(b) The Fund will not invest more than 5% of the value of its total assets
in the securities of any issuers which, with their predecessors, have a record
of less than three years' continuous operation. (Securities of such issuers
will not be deemed to fall within this limitation if they are guaranteed by an
entity in continuous operation for more than three years. The value of all
securities issued or guaranteed by such guarantor and owned by the Fund shall
not exceed 10% of the value of the total assets of the Fund.)
(c) The Fund will not purchase any securities on margin except to obtain
such short-term credits as may be necessary for the clearance of transactions
and except that the Fund may make margin deposits in connection with futures
contracts.
(d) The Fund will not purchase or retain the securities of any issuer if,
to the Fund's knowledge, those officers or directors of Piper Global or its
affiliates or of its investment adviser who individually own beneficially more
than 0.5% of the outstanding securities of such issuer, together own more than
5% of such outstanding securities.
(e) The Fund will not invest in real estate limited partnerships.
(f) The Fund will treat repurchase agreements with remaining maturities in
excess of seven days as illiquid securities.
(g) The Fund will not invest more than 5% of its net assets in warrants,
valued at the lower of cost or market. Included within this amount, but not to
exceed 2% of the value of the Fund's net assets, may be warrants which are not
listed on the New York Stock Exchange or the American Stock Exchange.
DIRECTORS AND EXECUTIVE OFFICERS
--------------------------------
The directors and officers of Piper Global and their principal occupations
during the past five years are set forth below. Each of Piper Global's
directors and officers, other than Mr. Watt and Mr. Balfour, also serves as a
director or officer of various closed-end and open-end investment companies
managed by the Adviser.
10
<PAGE>
PRINCIPAL OCCUPATIONS
POSITION WITH DURING THE PAST FIVE YEARS
NAME AND ADDRESS PIPER GLOBAL AND OTHER AFFILIATIONS
- ---------------- ------------- --------------------------
William H. Ellis* Chairman of President of Piper Jaffray Companies
Piper Jaffray Tower the Board of Inc. and Piper Jaffray Inc. since
222 South Ninth Street Directors September 1982 and Chief Operating
Minneapolis, MN 55402 Officer of the same two companies
since August 1983; Director and
Chairman of the Board of the
Adviser since October 1985 and
President of the Adviser since
December 1994.
Jaye F. Dyer Director President of Dyer Management
4670 Norwest Center Company, a private management
90 South Seventh Street company, since January 1, 1991;
Minneapolis, MN 55402 prior thereto, Mr. Dyer was
President and Chief Executive
Officer of Dyco Petroleum
Corporation, a Minneapolis based
oil and natural gas development
subsidiary of Arkla, Inc., from
1971, when he founded the company,
until March 1, 1989, and Chairman
of the Board until December 31,
1990. Mr. Dyer serves on the board
of directors of Northwestern
National Life Insurance Company,
The ReliaStar Financial Corp. (the
holding company of Northwestern
National Life Insurance Company)
and various privately held and
nonprofit corporations.
Karol D. Emmerich Director President of The Paraclete Group,
7302 Claredon Drive a consultant to nonprofit and other
Edina, MN 55439 organizations, since May 1993;
prior thereto, Ms. Emmerich was
Vice President and Treasurer of
Dayton Hudson Corporation from 1980
to May 1993 and Chief Accounting
Officer from 1989 to May 1993.
Ms. Emmerich also serves on the
board of directors of a number of
privately held and nonprofit
corporations.
Luella G. Goldberg Director
7019 Tupa Drive
Edina, MN 55435 Ms. Goldberg serves on the board
of directors of Northwestern
National Life Insurance Company
(since 1976), The ReliaStar
Financial Corp. (since 1989), TCF
Bank Savings fsb (since 1986), TCF
Financial Corporation, the holding
company of TCF Bank Savings fsb
(since 1988) and Hormel Foods Corp.
(since 1993). Ms. Goldberg also
serves as a Trustee of Wellesley
College and as a director of a
number of other organizations,
including the Minnesota Orchestral
Association and the University of
Minnesota Foundation. Ms. Goldberg
was Chairman of the Board of
Trustees of Wellesley College from
1985 to 1993 and acting President
from July 1, 1993 to October 1,
1993.
11
<PAGE>
PRINCIPAL OCCUPATIONS
POSITION WITH DURING THE PAST FIVE YEARS
NAME AND ADDRESS PIPER GLOBAL AND OTHER AFFILIATIONS
- ---------------- ------------- --------------------------
John T. Golle Director Chairman and Chief Executive
1600 West 82nd Street Officer of Education Alternatives,
Minneapolis, MN 55431 Inc., a company in the business of
providing private management for
public schools since 1986; formerly
a partner and director of Golle &
Holmes Companies, a holding company
located in Minneapolis, Minnesota
engaged through its subsidiaries in
various aspects of the training and
development services industry. Mr.
Golle also serves on the board of
directors of the Children's
Broadcasting Corporation.
George Latimer Director Director, Special Actions Office,
754 Linwood Office of the Secretary, Department
St. Paul, MN 55105 of Housing and Urban Development
since 1993, prior thereto, Mr.
Latimer had been Dean of Hamline Law
School, Saint Paul, Minnesota, since
1990. Mr. Latimer serves on the
board of directors of Digital
Biometrics, Inc. and Payless
Cashways, Inc.
Iain A. Watt* Director Managing Director of the Sub--
Edinburgh Fund Managers plc Adviser since 1991, prior to which
Donaldson House he had been Director since 1986.
97 Haymarket Terrace Mr. Watt is also a director of
Edinburgh, EH12 5HD Edinburgh Dragon Trust plc,
Edinburgh New Tiger Trust plc,
Edinburgh Unit Trust Managers
Limited, Edinburgh Oil Management
Limited and Private Fund Managers
Limited.
Michael W. Balfour* Director Director of Overseas Investments
Edinburgh Fund Managers plc of the Sub-Adviser since 1992, prior
Donaldson House to which he was the assistant
97 Haymarket Terrace director and head of the Pacific
Edinburgh, EH12 5HD Department of the Sub-Adviser from
1988 to 1992. Mr. Balfour is also a
director of the Sub-Adviser, Credit
Capital Asset Management Company
Limited, Edinburgh Inca Trust plc
and Edinburgh Java Trust plc.
Paul A. Dow President Chief Investment Officer of the
Piper Jaffray Tower Adviser since December 1989 and
222 South Ninth Street Senior Vice President of the Adviser
Minneapolis, MN 55402 since February 1989.
Robert H. Nelson Vice President Senior Vice President of the Adviser
Piper Jaffray Tower since November 1993, prior to which
222 South Ninth Street he had been a Vice President of the
Minneapolis, MN 55402 Adviser since November 1991 and an
Assistant Vice President since 1989.
12
<PAGE>
PRINCIPAL OCCUPATIONS
POSITION WITH DURING THE PAST FIVE YEARS
NAME AND ADDRESS PIPER GLOBAL AND OTHER AFFILIATIONS
- ---------------- ------------- --------------------------
Nancy S. Olsen Vice President Senior Vice President of the
Piper Jaffray Tower Adviser since November 1991;
222 South Ninth Street prior to which Ms. Olsen had
Minneapolis, MN 55402 been a Vice President of the
Adviser since May 1987.
Charles N. Hayssen Treasurer Managing Director of Piper
Piper Jaffray Tower Jaffray Inc. since 1986 and of
222 South Ninth Street Piper Jaffray Companies Inc.
Minneapolis, MN 55402 since 1987; Chief Financial
Officer of Piper Jaffray Inc.
since 1988; Director and Chief
Financial Officer of the
Adviser since 1989 and Chief
Operating Officer of the
Adviser since December 1994.
David E. Rosedahl Secretary Managing Director, Secretary
Piper Jaffray Tower and General Counsel for Piper
222 South Ninth Street Jaffray Inc.; Managing
Minneapolis, MN 55402 Director and General Counsel
for Piper Jaffray Companies
Inc.; Secretary and a
Director of the Adviser.
__________________
* Directors who are "interested persons" of the Fund, as defined in the 1940
Act, of Piper Capital and the Fund.
Two of the Fund's directors, Mr. Balfour and Mr. Watt, reside outside of
the United States and substantially all of the assets of such persons are
located outside of the United States. Neither Mr. Balfour nor Mr. Watt has
appointed an agent for service of process in the United States. It may not be
possible, therefore, for investors to effect service of process within the
United States upon such persons or to enforce against them, in the United States
courts or foreign courts, judgments obtained in the United States courts
predicated upon the civil liability provisions of the federal securities laws of
the United States. In addition, it is not certain that a foreign court would
enforce, in original actions, liabilities against such persons predicated solely
upon United States securities laws.
Ms. Goldberg, Ms. Emmerich and Mr. Dyer are members of the Fund's Audit
Committee. Ms. Goldberg acts as the chairperson of such committee. The Audit
Committee oversees the Fund's financial reporting process, reviews audit
results and recommends annually to the Fund a firm of independent certified
public accountants.
The Board of Directors also has a Committee of the Independent Directors,
consisting of Messrs. Dyer, Golle and Latimer, Ms. Emmerich and Ms. Goldberg,
and a Derivatives Committee consisting of Ms. Emmerich, who serves as
chairperson of such committee, Ms. Goldberg and Mr. Dyer. The functions of the
Committee of the Independent Directors are: (a) recommendation to the full Board
of approval of any
13
<PAGE>
management, advisory, sub-advisory and/or administration agreements; (b)
recommendation to the full Board of approval of any underwriting and/or
distribution agreements; (c) review of the fidelity bond and premium allocation;
(d) review of errors and omissions and any other joint insurance policies and
premium allocation; (e) review of, and monitoring of compliance with, procedures
adopted pursuant to certain rules promulgated under the 1940 Act; and (f) such
other duties as the independent directors shall, from time to time, conclude are
necessary or appropriate to carry out their duties under the 1940 Act. The
functions of the Derivatives Committee are: (a) to oversee practices, policies
and procedures of the Adviser in connection with the use of derivatives; (b) to
receive periodic reports from management and independent accountants; and (c) to
report periodically to the Committee of the Independent Directors and the Board
of Directors.
The directors of the Fund who are officers or employees of the Adviser or
Sub-Adviser or any of their affiliates receive no remuneration from the Fund.
Each of the other directors receives from the Fund an annual retainer of $1,000,
plus a fee of $250 for each regular quarterly Board of Directors meeting
attended. In addition, members of the Audit Committee not affiliated with the
Adviser or Sub-Adviser receive $1,000 for each Audit Committee meeting attended
($2,000 with respect to the chairperson of the Committee), with such fee being
allocated between the Fund and all other publicly-held investment companies
managed by the Adviser. Members of the Committee of the Independent Directors
and the Derivatives Committee currently receive no additional compensation.
Directors are also reimbursed for expenses incurred in connection with attending
meetings.
The following table sets forth the aggregate compensation received by each
director from Piper Global during the fiscal year ended February 28, 1995, as
well as the total compensation received by each director from Piper Global and
all other registered investment companies managed by the Adviser or an affiliate
of the Adviser during the calendar year ended December 31, 1994. Directors who
are officers or employees of the Adviser or any of its affiliates did not
receive any such compensation and are not included in the table. No other
individuals received compensation from Piper Global during the fiscal year ended
February 28, 1995.
<TABLE>
<CAPTION>
Pension or
Retirement Estimated Total
Aggregate Benefits Annual Benefits Compensation
Compensation Accrued as Part Upon from Fund
Director from Piper Global of Fund Expenses Retirement Complex*
- -------- ----------------- ---------------- --------------- ------------
<S> <C> <C> <C> <C>
Jaye F. Dyer $2,053 None None $61,500
Karol D. Emmerich $2,053 None None $61,500
Luella G. Goldberg $2,105 None None $63,500
John T. Golle $2,000 None None $59,500
George Latimer $2,000 None None $59,500
</TABLE>
* Consists of 26 registered investment companies managed by the Adviser or an
affiliate of the Adviser, including Piper Global. Each director included in the
table serves on the board of each such registered investment company.
14
<PAGE>
INVESTMENT ADVISORY AND OTHER SERVICES
--------------------------------------
GENERAL
The investment adviser for the Fund is Piper Capital Management
Incorporated (the "Adviser"). Its affiliate, Piper Jaffray Inc. (the
"Distributor"), acts as the Fund's distributor. The Sub-Adviser for the Fund is
Edinburgh Fund Managers plc (the "Sub-Adviser"). Each of the Adviser and Sub-
Adviser acts as such pursuant to a written agreement which is periodically
approved by the directors or the shareholders of the Fund. The address of both
the Adviser and the Distributor is Piper Jaffray Tower, 222 South Ninth Street,
Minneapolis, Minnesota 55402-3804. The address of the Sub-Adviser is Donaldson
House, 97 Haymarket Terrace, Edinburgh, Scotland, EH12 5HD.
CONTROL OF THE ADVISER, THE SUB-ADVISER AND THE DISTRIBUTOR
The Adviser and the Distributor are both wholly owned subsidiaries of Piper
Jaffray Companies Inc., a publicly held corporation which is engaged through its
subsidiaries in various aspects of the financial services industry. The Sub-
Adviser is a public limited company incorporated in 1969. It is a majority-owned
subsidiary of The British Investment Trust plc, a Scottish closed-end investment
company, for which the Sub-Adviser serves as investment manager and adviser.
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
The Adviser acts as the investment adviser of the Fund under an Investment
Advisory and Management Agreement which has been approved by the Board of
Directors of Piper Global (including a majority of the directors who are not
parties to the agreement, or interested persons of any such party, other than as
directors of Piper Global) and the shareholders of the Fund.
The Investment Advisory and Management Agreement will terminate
automatically in the event of its assignment. In addition, the agreement is
terminable at any time, without penalty, by the Board of Directors of Piper
Global or by vote of a majority of the Fund's outstanding voting securities on
not more than 60 days' written notice to the Adviser, and by the Adviser on 60
days' written notice to Piper Global. The agreement may be terminated at any
time by a vote of the holders of a majority of the outstanding voting securities
of the Fund, upon 60 days' written notice to the Adviser. Unless sooner
terminated, the agreement shall continue in effect for more than two years after
its execution only so long as such continuance is specifically approved at least
annually by either the Board of Directors or by a vote of a majority of the
outstanding voting securities of the Fund, provided that in either event such
continuance is also approved by a vote of a majority of the directors who are
not parties to such agreement, or interested persons of such parties, cast in
person at a meeting called for the purpose of voting on such approval.
15
<PAGE>
Pursuant to the Investment Advisory and Management Agreement, the Fund pays
the Adviser monthly advisory fees as set forth in the prospectus. Adjustments to
the Basic Fee are made by comparison of the Fund's investment performance for
the applicable period with the investment record of the EAFE Index. The Basic
Fee for each month may be increased or decreased by up to .25% (on an annualized
basis) of the Fund's average daily net assets depending upon the extent by which
the Fund's performance varies from the EAFE Index over the applicable
performance period. For each percentage point by which the investment
performance of the Fund exceeds that of the EAFE Index for the applicable
performance period, the Basic Fee is increased by .05% (on an annualized basis)
of the Fund's average daily net assets, and for each percentage point amount by
which the Fund underperforms the EAFE Index, the Basic Fee is decreased by .05%
(on an annualized basis) of the Fund's average daily net assets. The maximum
monthly increase for performance is 1/12 of .25% of the Fund's average daily net
assets and will be payable if the investment performance of the Fund exceeds
that of the EAFE Index by five or more percentage points for the performance
period, and the maximum decrease for performance is 1/12 of .25% of the Fund's
average daily net assets, which will occur if the Fund underperforms the EAFE
Index by five or more percentage points for the performance period. For purposes
of calculation of the performance adjustment, average daily net assets are equal
to the Fund's average daily net assets during the month for which the
calculation is being made. The advisory fees paid by the Fund for the fiscal
years ended February 28, 1993, 1994 and 1995 were $505,350, $1,068,330 and
$1,731,719, respectively.
The Adviser and Sub-Adviser intend, although not required under the
Investment Advisory and Management Agreement and Sub-Investment Advisory
Agreement (discussed below), to reimburse the Fund for the amount, if any, by
which the total operating and management expenses of the Fund (including the
Adviser's compensation and amounts paid pursuant to the Fund's Rule 12b-1 plan,
but excluding interest, taxes, brokerage fees and commissions, and extraordinary
expenses) for the fiscal year exceed 2.25%. This arrangement may be modified or
discontinued at any time after fiscal year end, at the Adviser's discretion.
Even in the event of discontinuance of this arrangement the Fund will still be
subject to the laws of certain states, which require that if a mutual fund's
expenses (including advisory fees but excluding interest, taxes, brokerage
commissions and extraordinary expenses) exceed certain percentages of average
net assets, the fund must be reimbursed for such excess expenses. The Investment
Advisory and Management Agreement provides that the Adviser must make any
expense reimbursements to the Fund required under state law. The laws of
California provide that aggregate annual expenses of a mutual fund shall not
normally exceed 2-1/2% of the first $30 million of the average net assets, 2% of
the next $70 million of the average net assets and 1-1/2% of the remaining
average net assets. Such expenses include the Adviser's compensation, but
exclude interest, taxes, brokerage fees and commissions, extraordinary expenses
and amounts paid under the Fund's Rule 12b-1 Plan. The Adviser does not believe
that the laws of any other state in which the Fund's shares may be offered for
sale contain expense reimbursement requirements.
16
<PAGE>
Under the Investment Advisory and Management Agreement, the Adviser
provides the Fund with advice and assistance in the selection and disposition of
the Fund's investments. All investment decisions are subject to review by the
Board of Directors of the Fund. The Adviser is obligated to pay the salaries and
fees of any affiliates of the Adviser serving as officers or directors of the
Fund.
SUB-ADVISORY AGREEMENT
Under the Sub-Investment Advisory Agreement, the Sub-Adviser is responsible
for the investment and reinvestment of the Fund's assets in non-U.S. securities
and the placement of brokerage transactions in connection therewith. For its
services, the Sub-Adviser is paid by the Adviser a fee, payable over the same
time periods and calculated in the same manner as the Adviser's fee, equal to
65% of the Adviser's Basic Fee plus or minus 90% of the performance fee
adjustment. The fee received by the Sub-Adviser will be reduced by a portion of
the excess, if any, of certain of the Fund's annual expenses over the expense
limitations set by California law, as described above, and any other applicable
state expense limitations. The Sub-Adviser's fee shall be reduced by an amount
which bears the same ratio to the fee reductions absorbed by the Adviser under
the Investment Advisory and Management Agreement as the sub-advisory fees which
the Sub-Adviser would otherwise be entitled to receive bear to the advisory fees
which the Adviser would be entitled to receive had the Fund not exceeded state
expense limitations.
The fees paid by the Adviser to the Sub-Adviser (such amounts are payable
out of the advisory fees received by the Adviser for the same periods and are
not in addition to such amounts) for the fiscal years ended February 28, 1993,
1994 and 1995 were $364,557, $691,438 and $1,149,751, respectively.
The Sub-Investment Advisory Agreement will terminate automatically in the
event of its assignment. In addition, the Sub-Investment Advisory Agreement is
terminable at any time, without penalty, by the Board of Directors on 60 days'
written notice to the Adviser and the Sub-Adviser or by a vote of the holders of
a majority of the outstanding shares of the Fund. Unless sooner terminated, the
Sub-Investment Advisory Agreement shall continue in effect until two years from
the date of its execution and thereafter from year to year provided it is
specifically approved at least annually by either the Board of Directors or by a
vote of a majority (as defined in the 1940 Act) of the outstanding voting
securities of the Fund, provided that, in either event, such continuance is also
approved by a vote of a majority of the Directors who are not parties to such
Sub-Investment Advisory Agreement, or interested persons of such parties, cast
in person at a meeting called for the purpose of voting on such approval.
EXPENSES
The expenses of the Fund are deducted from its income before dividends are
paid. These expenses include, but are not limited to, organizational costs,
fees paid
17
<PAGE>
to the Adviser, fees and expenses of officers and directors who are not
affiliated with the Adviser, taxes, interest, legal fees, transfer agent,
dividend disbursing agent and custodian fees, audit fees, brokerage fees and
commissions, fees and expenses of registering and qualifying the Fund and its
shares for distribution under federal and state securities laws, expenses of
preparing prospectuses and statements of additional information and of printing
and distributing prospectuses and statements of additional information annually
to existing shareholders, the expenses of reports to shareholders, shareholders'
meetings and proxy solicitations, distribution expenses pursuant to the Rule
12b-1 plan, and other expenses which are not expressly assumed by the Adviser
under the Investment Advisory and Management Agreement.
DISTRIBUTION PLAN
Rule 12b-1(b) under the 1940 Act provides that any payments made by the
Fund in connection with financing the distribution of its shares may only be
made pursuant to a written plan describing all aspects of the proposed financing
of distribution, and also requires that all agreements with any person relating
to the implementation of the plan must be in writing. The Fund has entered
into an Underwriting and Distribution Agreement with the Distributor pursuant to
a Distribution Plan adopted in accordance with such Rule. The Fund's
Distribution Plan became effective upon the Fund's conversion to an open-end
investment company on August 31, 1992.
Rule 12b-1(b)(1) requires that such plan be approved by a majority of a
Fund's outstanding shares, and Rule 12b-1(b)(2) requires that such plan,
together with any related agreements, be approved by a vote of the Board of
Directors of Piper Global and of the Directors who are not interested persons of
Piper Global and who have no direct or indirect interest in the operation of the
plan or in the agreements related to the plan, cast in person at a meeting
called for the purpose of voting on such plan or agreement. Rule 12b-1(b)(3)
requires that the plan or agreement provide, in substance:
(a) that it shall continue in effect for a period of more than one
year from the date of its execution or adoption only so long as such
continuance is specifically approved at least annually in the manner
described in paragraph (b)(2) of Rule 12b-1;
(b) that any person authorized to direct the disposition of moneys
paid or payable by the Fund pursuant to the plan or any related agreement
shall provide to the Board of Directors, and the directors shall review, at
least quarterly, a written report of the amounts so expended and the
purposes for which such expenditures were made; and
(c) in the case of a plan, that it may be terminated at any time by a
vote of a majority of the members of the Board of Directors of Piper Global
who are not interested persons of Piper Global and who have no direct or
indirect financial interest in the operation of the plan or in any
agreements related to
18
<PAGE>
the plan or by a vote of a majority of the outstanding voting securities of
the Fund.
Rule 12b-1(b)(4) requires that such a plan may not be amended to increase
materially the amount to be spent for distribution without shareholder approval
and that all material amendments of the plan must be approved in the manner
described in paragraph (b)(2) of Rule 12b-1.
Rule 12b-1(c) provides that the Fund may rely upon Rule 12b-1(b) only if
the selection and nomination of Piper Global's disinterested directors are
committed to the discretion of such disinterested directors. Rule 12b-1(e)
provides that the Fund may implement or continue a plan pursuant to Rule 12b-
1(b) only if the directors who vote to approve such implementation or
continuation conclude, in the exercise of reasonable business judgment and in
light of their fiduciary duties under state law, and under Sections 36(a) and
(b) of the 1940 Act, that there is a reasonable likelihood that the plan will
benefit the Fund and its shareholders. The Board of Directors has concluded
that there is a reasonable likelihood that the Distribution Plan will benefit
the Fund and its shareholders.
Pursuant to the provisions of the Distribution Plan, the Fund pays a
monthly fee to the Distributor equal, on an annual basis, to up to .50% of the
Fund's average daily net assets in order to reimburse the Distributor for its
actual expenses incurred to cover shareholder servicing costs and distribution
expenses. In the event expenses for any one year exceed the maximum
reimbursable under the Plan, such expenses may not be carried forward to the
following year. Shareholder Servicing Costs include all expenses of the
Distributor incurred in connection with providing administrative or accounting
services to shareholders, including, but not limited to, an allocation of the
Distributor's overhead and payments made to persons, including employees of the
Distributor, who respond to inquiries of shareholders of the Fund regarding
their ownership of shares or their accounts with the Fund, or who provide other
administrative or accounting services not otherwise required to be provided by
the Fund's Adviser or transfer agent. Distribution Expenses under the Plan
include, but are not limited to, initial and ongoing sales compensation (in
addition to sales charges) paid to investment executives of the Distributor and
to other broker-dealers; expenses incurred in the printing of prospectuses,
statements of additional information and reports used for sales purposes;
expenses of preparation and distribution of sales literature; expenses of
advertising of any type; an allocation of the Distributor's overhead; and
payments to and expenses of persons who provide support services in connection
with the distribution of Fund shares. Distribution fees paid by the Fund for
the fiscal year ended February 28, 1995 were $476,639. During this period, the
Distributor voluntarily agreed to limit the reimbursement fee to an annual rate
of .28% of average daily net assets. Of the distribution fees paid for the
fiscal year ended February 28, 1995, the Distributor used $200,188 for
compensation to underwriters (fees to investment executives) and $276,451 for
printing and mailing of prospectuses to other than current shareholders.
19
<PAGE>
UNDERWRITING AND DISTRIBUTION AGREEMENT
Pursuant to the Underwriting and Distribution Agreement, the Distributor
has agreed to act as the principal underwriter for the Fund in the sale and
distribution to the public of shares of the Fund, either through dealers or
otherwise. The Distributor has agreed to offer such shares for sale at all
times when such shares are available for sale and may lawfully be offered for
sale and sold. As compensation for its services, in addition to being
reimbursed for its shareholder servicing and distribution expenses pursuant to
the Distribution Plan discussed above, the Distributor receives the sales load
on sales of Fund shares as set forth in the prospectus. The Distributor waived
such payment for purchases of Fund shares during fiscal 1993. The total
underwriting commissions paid by the Fund during the fiscal years ended
February 28, 1994 and 1995 were $556,904 and $459,632, respectively, and the
Distributor retained underwriting commissions of $323,004 and $266,587,
respectively.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Investors Fiduciary Trust Company ("IFTC"), the transfer agent for Piper
Global, maintains certain omnibus shareholder accounts for the Fund. Each such
omnibus account represents the accounts of a number of individual shareholders
of the Fund. Piper Global has entered into a Shareholder Account Servicing
Agreement with the Distributor, pursuant to which the Distributor provides
certain transfer agent and dividend disbursing agent services for the underlying
individual shareholder accounts. Pursuant to such Agreement, the Distributor has
agreed to perform the usual and ordinary services of transfer agent and dividend
disbursing agent not performed by IFTC with respect to the underlying individual
shareholder accounts, including, without limitation, the following: maintaining
all shareholder accounts, preparing shareholder meeting lists, mailing
shareholder reports and prospectuses, tracking shareholder accounts for blue sky
and Rule l2b-1 purposes, withholding taxes on nonresident alien and foreign
corporation accounts, preparing and mailing checks for disbursement of income
dividends and capital gains distributions, preparing and filing U.S. Treasury
Department Form 1099 for all shareholders, preparing and mailing confirmation
forms to shareholders and dealers with respect to all purchases, exchanges and
liquidations of series shares and other transactions in shareholder accounts for
which confirmations are required, recording reinvestments of dividends and
distributions in series shares, recording redemptions of series shares, and
preparing and mailing checks for payments upon redemption and for disbursements
to withdrawal plan holders. As compensation for such services, the Distributor
is paid an annual fee of $6.00 per active shareholder account for the Fund and
$1.60 per inactive account for the Fund (defined as an account that has a
balance of shares in the Fund but that does not require a client statement for
the current month). There is no charge for a closed shareholder account (defined
as an account that has been inactive for at least three consecutive months).
Such fee is payable on a monthly basis at a rate of 1/12 of the annual per-
account charge. Such fee covers all services listed above, with the
20
<PAGE>
exception of preparing shareholder meeting lists and mailing shareholder reports
and prospectuses. These services, along with proxy processing (if applicable)
and other special service requests, are billable as performed at a mutually
agreed upon fee in addition to the annual fee noted above, provided that such
mutually agreed upon fee shall be fair and reasonable in light of the usual and
customary charges made by others for services of the same nature and quality.
The Agreement was in effect for a portion of the fiscal year ended February 28,
1995. Fees accrued from December 1, 1994 to February 28, 1995 were $23,704.
PORTFOLIO TRANSACTIONS AND ALLOCATION OF BROKERAGE
--------------------------------------------------
Transactions on stock exchanges involve the payment of brokerage
commissions. In transactions on stock exchanges in the United States,
commissions are negotiated whereas on many foreign stock exchanges, commissions
are fixed, often at levels higher than those available in the United States. In
the case of securities traded on the over-the-counter markets, there is
generally no stated commission but the price usually includes a commission paid
by the issuer to the underwriters. Commissions are paid with respect to the
purchase of certain other securities in which the Fund may invest, and with
respect to options on securities, futures contracts and options on futures
contracts purchased by the Fund. Subject to the general supervision of the
Directors of the Fund, the Adviser and the Sub-Adviser are responsible for the
investment decisions and the placing of the orders for portfolio transactions
for the Fund.
The Fund has no obligation to enter into transactions in portfolio
securities with any dealer, issuer, underwriter or other entity. The Fund does
not purchase securities from, or sell securities to, the Adviser, the Sub-
Adviser or their respective affiliates acting as principal. In placing orders,
it is the policy of the Fund to obtain the best price and execution for its
transactions. Where best price and execution may be obtained from more than one
broker-dealer, the Adviser or the Sub-Adviser may, in their discretion, purchase
and sell securities through broker-dealers who provide research, statistical and
other information to the Adviser or the Sub-Adviser, as the case may be. The
Fund will not purchase at a higher price or sell at a lower price in connection
with transactions effected with a dealer, acting as principal, who furnishes
research services to the Adviser or Sub-Adviser than would be the case if no
weight were given by the Adviser or Sub-Adviser, as the case may be, to the
dealer's furnishing of such services.
The supplemental information received from a broker-dealer is in addition
to the services required to be performed by the Adviser under the Advisory
Agreement, and by the Sub-Adviser under the Sub-Advisory Agreement, and the
expenses of the Adviser and/or the Sub-Adviser will not necessarily be reduced
as a result of the receipt of such information. Consistent with the Rules of
Fair Practice of the National Association of Securities Dealers, Inc., and
subject to seeking the best price and execution, the Fund may consider sales of
Shares of the Fund as a factor in the selection of broker-dealers to enter into
portfolio transactions with the Fund.
21
<PAGE>
The investment information provided to the Adviser or the Sub-Adviser, as
the case may be, is of the types described in Section 28(e)(3) of the Securities
Exchange Act of 1934 and is designed to augment the Adviser's or the Sub-
Adviser's own internal research and investment strategy capabilities. Research
and statistical services furnished by brokers through which the Fund effects
securities transactions are used by the Adviser or the Sub-Adviser in carrying
out its investment management responsibilities with respect to all its client
accounts, but not all such services may be used by the Adviser or the Sub-
Adviser in connection with the Fund.
Certain other clients of the Adviser and/or the Sub-Adviser may have
investment objectives and policies similar to those of the Fund. The Adviser
and/or the Sub-Adviser may, from time to time, make recommendations that result
in the purchase or sale of a particular security by its other clients
simultaneously with the Fund. ("Security" is defined for these purposes to
include options, futures contracts and options on futures contracts.) If
transactions on behalf of more than one client during the same period increase
the demand for securities being purchased or the supply of securities being
sold, there may be an adverse affect on price or quantity. In addition, it is
possible that the number of options or futures transactions that the Fund may
enter into may be affected by options or futures transactions entered into by
other investment advisory clients of the Adviser. It is the policy of the
Adviser and the Sub-Adviser to allocate advisory recommendations and the placing
of orders in a manner that is deemed equitable by the Adviser or the Sub-Adviser
to the accounts involved, including the Fund. When two or more of the clients of
the Adviser or Sub-Adviser (including the Fund) are purchasing or selling the
same security on a given day from the same broker-dealer, such transactions may
be averaged as to price.
Transactions in securities, options on securities, futures contracts and
options on futures contracts may be effected through Piper Jaffray Inc. if the
commissions, fees or other remuneration received by Piper Jaffray Inc. are
reasonable and fair compared to the commissions, fees or other remuneration paid
to other brokers or other futures commission merchants in connection with
comparable transactions involving similar securities or similar futures
contracts or options thereon being purchased or sold on an exchange or contract
market during a comparable period of time. In effecting portfolio transactions
through Piper Jaffray Inc., the Fund intends to comply with Section 17(e)(1) of
the 1940 Act.
The Fund paid brokerage commissions for the fiscal years ended
February 28, 1993, 1994 and 1995 of $274,000, $735,400 and $683,910,
respectively. No commissions were paid to affiliates of the Fund, the Adviser
or the Sub-Adviser, or to affiliates of such affiliates during such periods.
From time to time the Fund may acquire the securities of its regular
brokers or dealers or affiliates of such brokers or dealers. During the fiscal
year ended February 28, 1995, no such securities were acquired by the Fund.
22
<PAGE>
OPTION TRADING LIMITS
The writing by the Fund of options on securities will be subject to
limitations established by each of the registered securities exchanges on which
such options are traded. Such limitations govern the maximum number of options
in each class which may be written by a single investor or group of investors
acting in concert, regardless of whether the options are written on the same or
different securities exchanges or are held or written in one or more accounts or
through one or more brokers. Thus, the number of options which the Fund may
write may be affected by options written by other investment companies managed
by and other investment advisory clients of the Adviser and the Sub-Adviser. An
exchange may order the liquidation of positions found to be in excess of these
limits, and it may impose certain other sanctions.
CAPITAL STOCK AND OWNERSHIP OF SHARES
-------------------------------------
The Fund's shares of common stock have a par value of $.01 per share, and
have equal rights to share in dividends and assets. The shares possess no
preemptive or conversion rights. Cumulative voting is not authorized. This
means that the holders of more than 50% of the shares voting for the election of
directors can elect 100% of the directors if they choose to do so, and in such
event the holders of the remaining shares will be unable to elect any directors.
As of March 31, 1995, no shareholder was known by the Fund to own
beneficially 5% or more of the outstanding shares of the Fund. The directors
and officers of the Fund as a group owned less than 1% of the outstanding shares
of the Fund as of such date.
NET ASSET VALUE AND PUBLIC OFFERING PRICE
-----------------------------------------
The method for determining the public offering price of Fund shares is
summarized in the prospectus in the text following the headings "How to
Purchase Shares - Public Offering Price" and "Valuation of Shares." The net
asset value of the Fund's shares is determined on each day on which the New
York Stock Exchange is open, provided that the net asset value need not be
determined on days when no Fund shares are tendered for redemption and no order
for Fund shares is received. The New York Stock Exchange is not open for
business on the following holidays (or on the nearest Monday or Friday if the
holiday falls on a weekend): New Year's Day, Presidents' Day, Good Friday,
Memorial Day, July 4th, Labor Day, Thanksgiving and Christmas.
The portfolio securities in which the Fund invests fluctuate in value, and
hence the net asset value per share of the Fund also fluctuates. On
February 28, 1995, the net asset value per share for the Fund was calculated as
follows:
Net Assets ($154,392,852) = Net Asset Value Per Share ($12.73)
-------------------------
Shares Outstanding (12,130,925)
23
<PAGE>
A sales charge of 4% of the net asset value (in the case of sales of less
than $100,000) will be added to the net asset value per share to determine the
public offering price per share.
CALCULATION OF PERFORMANCE DATA
-------------------------------
Advertisements and other sales literature for the Fund may refer to
"average annual total return" and "cumulative total return." Average annual
total return figures are computed by finding the average annual compounded rates
of return over the periods indicated in the advertisement that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:
P(1+T)/n/ = ERV
Where: P = a hypothetical initial payment of $1,000;
T = average annual total return;
n = number of years; and
ERV = ending redeemable value at the end of the period of a
hypothetical $1,000 payment made at the beginning of
such period.
This calculation deducts the maximum sales charge from the initial hypothetical
$1,000 investment, assumes all dividends and capital gains distributions are
reinvested at net asset value on the appropriate reinvestment dates as described
in the prospectus, and includes all recurring fees, such as investment advisory
and management fees, charged to all shareholder accounts.
The average annual total returns on an investment in the Fund for various
periods ending February 28, 1995 were:
One Year: (14.64)% Since Inception (4/27/90): 4.66%
The Adviser has waived or paid certain expenses of the Fund, thereby
increasing total return. These expenses may or may not be waived or paid in the
future in the Adviser's discretion. Absent any voluntary expense payments or
waivers, the average annual total return since inception for the period ended
February 28, 1995, would have been 4.49%.
Cumulative total return is computed by finding the cumulative compounded
rate of return over the period indicated in the advertisement that would equate
the initial amount invested to the ending redeemable value, according to the
following formula:
24
<PAGE>
CTR = (/ERV-P/) 100
-----
/P/
Where: CTR = Cumulative total return;
ERV = ending redeemable value at the end of the period of a
hypothetical $1,000 payment made at the beginning of
such period; and
P = initial payment of $1,000.
This calculation assumes all dividends and capital gain distributions are
reinvested at net asset value on the appropriate reinvestment dates as described
in the prospectus and includes all recurring fees, such as investment advisory
and management fees, charged to all shareholder accounts.
The Fund's cumulative total return from inception (April 27, 1990) through
February 28, 1995 was 24.67%. Absent any voluntary expense payments or
waivers, the cumulative total return would have been 23.79%.
PURCHASE OF SHARES
------------------
An investor may qualify for a reduced sales charge immediately by signing a
nonbinding Letter of Intent stating the investor's intention to invest within a
13-month period, beginning not earlier than 90 days prior to the date of
execution of the Letter, a specified amount which, if made at one time, would
qualify for a reduced sales charge. Reinvested dividends will be treated as
purchases of additional shares. Any redemptions made during the term of the
Letter of Intent will be subtracted from the amount of purchases in determining
whether the Letter of Intent has been completed. During the term of a Letter of
Intent, IFTC will hold shares representing 5% of the amount that the investor
intends to invest during the 13-month period in escrow for payment of a higher
sales charge if the full amount indicated in the Letter of Intent is not
purchased. Dividends on the escrowed shares will be paid to the shareholder.
The escrowed shares will be released when the full amount indicated has been
purchased. If the full indicated amount is not purchased within the 13-month
period, the investor will be required to pay, either in cash or by liquidating
escrowed shares, an amount equal to the difference in the dollar amount of sales
charge actually paid and the amount of sales charge the investor would have paid
on his or her aggregate purchases if the total of such purchases had been made
at a single time.
REDEMPTION OF SHARES
--------------------
General
Redemption of shares, or payment, may be suspended at times (a) when the
New York Stock Exchange is closed for other than customary weekend or holiday
closings, (b) when trading on said Exchange is restricted, (c) when an emergency
exists, as a result of which disposal by the Fund of securities owned by it is
not
25
<PAGE>
reasonably practicable, or it is not reasonably practicable for the Fund fairly
to determine the value of its net assets, or (d) during any other period when
the Securities and Exchange Commission, by order, so permits, provided that
applicable rules and regulations of the Securities and Exchange Commission shall
govern as to whether the conditions prescribed in (b) or (c) exist.
Shareholders who purchased shares through a broker-dealer other than the
Distributor may also redeem such shares by written request to IFTC at the
address set forth in the Prospectus. To be considered in proper form, written
requests for redemption should indicate the dollar amount or number of shares to
be redeemed, refer to the shareholder's Fund account number, and give either a
social security or tax identification number. The request should be signed in
exactly the same way the account is registered. If there is more than one owner
of the shares, all owners must sign. If shares to be redeemed have a value of
$10,000 or more or redemption proceeds are to be paid to someone other than the
shareholder at the shareholder's address of record, the signature(s) must be
guaranteed by an "eligible guarantor institution," which includes a commercial
bank that is a member of the Federal Deposit Insurance Corporation, a trust
company, a member firm of a domestic stock exchange, a savings association or a
credit union that is authorized by its charter to provide a signature guarantee.
IFTC may reject redemption instructions if the guarantor is neither a member of
nor a participant in a signature guarantee program. Signature guarantees by
notaries public are not acceptable. The purpose of a signature guarantee is to
protect shareholders against the possibility of fraud. Further documentation
will be requested from corporations, administrators, executors, personal
representatives, trustees and custodians. Redemption requests given by
facsimile will not be accepted. Unless other instructions are given in proper
form, a check for the proceeds of the redemption will be sent to the
shareholder's address of record.
Reinstatement Privilege
A shareholder who has redeemed shares of the Fund may reinvest all or part
of the redemption proceeds in shares of the Fund within 30 days without payment
of an additional sales charge. The Distributor will refund to any shareholder a
pro rata amount of any contingent deferred sales charge paid by such shareholder
in connection with a redemption of Fund shares if and to the extent that the
redemption proceeds are reinvested within 30 days of such redemption in any
mutual fund managed by the Adviser. Such refund will be based upon the ratio of
the net asset value of shares purchased in the reinvestment to the net asset
value of shares redeemed. Reinvestments will be allowed at net asset value
without the payment of a front-end sales charge, irrespective of the amounts of
the reinvestment, but shall be subject to the same pro rata contingent deferred
sales charge that was applicable to the earlier investment; however, the period
during which the contingent deferred sales charge shall apply on the newly
issued shares shall be the period applicable to the redeemed shares extended by
the number of days between the redemption and the reinvestment dates
(inclusive).
26
<PAGE>
Systematic Withdrawal Plan
To establish a Systematic Withdrawal Plan for the Fund and receive regular
periodic payments, an account must have a value of $5,000 or more. A request to
establish a Systematic Withdrawal Plan must be submitted in writing to an
investor's Piper Jaffray investment executive or other broker-dealer. There are
no service charges for maintenance; the minimum amount that may be withdrawn
each period is $100. (This is merely the minimum amount allowed and should not
be interpreted as a recommended amount.) The holder of a Systematic Withdrawal
Plan will have any income dividends and any capital gains distributions
reinvested in full and fractional shares at net asset value. To provide funds
for payment, the appropriate Fund will redeem as many full and fractional shares
as necessary at the redemption price, which is net asset value. Redemption of
shares may reduce or possibly exhaust the shares in your account, particularly
in the event of a market decline. As with other redemptions, a redemption to
make a withdrawal payment is a sale for federal income tax purposes. Payments
made pursuant to a Systematic Withdrawal Plan cannot be considered as actual
yield or income since part of such payments may be a return of capital.
The maintenance of a Systematic Withdrawal Plan for the Fund concurrent
with purchases of additional shares of the Fund would be disadvantageous because
of the sales commission involved in the additional purchases. Additional
investments of less than $5,000 or three times the annual withdrawals under the
Systematic Withdrawal Plan will ordinarily not be allowed during the time the
plan is in effect. A confirmation of each transaction showing the sources of the
payment and the share and cash balance remaining in the account will be sent.
The plan may be terminated on written notice by the shareholder or the Fund, and
it will terminate automatically if all shares are liquidated or withdrawn from
the account or upon the death or incapacity of the shareholder. The amount and
schedule of withdrawal payments may be changed or suspended by giving written
notice to your Piper Jaffray investment executive or other broker-dealer at
least seven business days prior to the end of the month preceding a scheduled
payment.
TAXATION
--------
GENERAL
The Fund has qualified and intends to qualify in the future as a regulated
investment company for federal income tax purposes. In order to so qualify, the
Fund must meet certain requirements imposed by the Code as to the sources of the
Fund's income and the diversification of the Fund's assets. The Fund must,
among other things, (a) derive in each taxable year at least 90% of its gross
income from dividends, interest, payments with respect to loans of securities,
gains from the sale or other disposition of securities or other income derived
with respect to its business of investing in such securities (including, but not
limited to, gains from options, futures or forward contracts); (b) generally
derive in each taxable year less than 30% of its gross income from gains from
the sale or other disposition of securities, options, futures or forward
contracts held for less than three months; and
27
<PAGE>
(c) diversify its holdings so that, at the end of each fiscal quarter, (i) at
least 50% of the value of the Fund's assets is represented by (A) cash, United
States government securities or securities of other regulated investment
companies, and (B) other securities that, with respect to any one issuer, do not
represent more than 5% of the value of the Fund's assets or more than 10% of
the 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 issuer (other than
United States government securities or the securities of other regulated
investment companies) or two or more issuers controlled by the Fund and
determined to be engaged in the same trade or business.
If the Fund qualifies as a regulated investment company and satisfies a
minimum distribution requirement, the Fund will not be subject to federal income
tax on income and gains to the extent that it distributes such income and gains
to its shareholders. The minimum distribution requirement is satisfied if the
Fund distributes at least 90% of its net investment income (including tax-exempt
interest and net short-term capital gains) for the taxable year. Although the
Fund intends to satisfy the above minimum distribution requirement, it may elect
to retain its remaining net investment income. The Fund would be subject to
corporate tax (at rates up to 35%) on any undistributed income. The Fund will
be subject to a nondeductible 4% excise tax to the extent that it does not
distribute by the end of each calendar year (or is not subjected to regular
corporate tax in such year on) an amount equal to the sum of (a) 98% of the
Fund's ordinary income for such calendar year; (b) 98% of the excess of capital
gains over capital losses for the one-year period ending on October 31 of each
year; and (c) the undistributed income and gains from the preceding years (if
any).
As discussed above, the Fund intends to continue to distribute sufficient
income to qualify as a regulated investment company. However, the Fund may
retain all or a portion of its net investment income in excess of such amount,
which net investment income may be subject to the corporate income or the excise
tax. In addition, the Fund may in the future decide to retain all or a portion
of its net capital gain, as described under "Federal Tax Treatment of
Shareholders - Distributions to Shareholders," below.
FEDERAL TAX TREATMENT OF SHAREHOLDERS
Distributions to Shareholders. Distributions to shareholders attributable
to the Fund's net investment income (including interest income and net short-
term capital gains) are taxable as ordinary income whether paid in cash or
reinvested in additional shares of the Fund. It is not anticipated that any of
the Fund's distributions will qualify for the dividends received deduction for
corporate shareholders.
Distributions of any net capital gain (i.e., the excess of net long-term
capital gain over net short-term capital loss, if any) that are designated as
capital gain dividends are taxable as long-term capital gains, whether paid in
cash or additional shares of the Fund, regardless of how long the shares have
been held.
28
<PAGE>
The Fund may elect to retain all or a portion of its net capital gain and
be taxed at the corporate tax rate for such capital gains, which is currently
35%. In such event, the Fund would most likely make an election that would
require each shareholder of record on the last day of the Fund's taxable year
to include in income for tax purposes his proportionate share of the Fund's
undistributed net capital gain. If such an election is made, each shareholder
would be entitled to credit his proportionate share of the tax paid by the Fund
against his federal income tax liabilities and to claim refunds to the extent
that the credit exceeds such liabilities. In addition, the shareholder would be
entitled to increase the basis of his shares for federal tax purposes by an
amount equal to 65% of his proportionate share of the undistributed net capital
gain.
Dividends and distributions by the Fund are generally taxable to the
shareholders at the time the dividend or distribution is made (even if
reinvested in additional shares of the Fund). However, any dividend declared by
the Fund in October, November or December of any calendar year which is payable
to shareholders of record on a specified date in such a month will be treated as
received by the shareholders on December 31 of such year if the dividend is paid
during January of the following year. The realization by the Fund of original
issue or market discount will increase the investment income of the Fund and the
amount required to be distributed.
Foreign Tax Credit Election. The Fund may be subject to taxes on its
income imposed by foreign countries. If at the end of the Fund's fiscal year
more than 50% of its total assets consist of securities of foreign corporations,
the Fund will be eligible to file an election with the Internal Revenue Service
pursuant to which shareholders of the Fund will be required to include their
respective pro rata portions of such foreign taxes as gross income, treat such
amounts as foreign taxes paid by them, and deduct such amounts in computing
their taxable incomes or, alternatively, use them as foreign tax credits against
their federal income taxes.
Sale of Shares. In general, if a share of common stock is sold or
exchanged, the seller will recognize gain or loss equal to the difference
between the amount realized in the sale or exchange and the seller's adjusted
basis in the share of common stock. Any gain or loss realized upon a sale or
exchange of shares of common stock will be treated as long-term capital gain or
loss if the shares have been held for more than one year, and otherwise as
short-term capital gain or loss. Further, if such shares are held for six
months or less, loss realized by a shareholder will be treated as long-term
capital loss to the extent of the total of any capital gain dividend received by
the shareholder. In addition, any loss realized on a sale or exchange of shares
of common stock 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 disposition of the shares. In such case, the basis of the shares acquired
will be adjusted to reflect the disallowed loss.
29
<PAGE>
Backup Withholding. The Fund may be required to withhold federal income
tax at the rate of 31% of all taxable distributions payable to shareholders 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. Corporate shareholders and
certain other shareholders specified in the Code are generally exempt from such
backup withholding. Backup withholding is not an additional tax. Any amounts
withheld may be credited against the shareholder's federal income tax
liability.
Other Taxes. Distributions may also be subject to state, local and foreign
taxes depending on each shareholder's particular situation.
Foreign Shareholders. The foregoing discussion relates solely to United
States federal income tax law as applicable to "U.S. persons," i.e., U.S.
citizens and residents and U.S. domestic corporations, partnerships, trusts and
estates. Shareholders who are not U.S. persons should consult their tax
advisers regarding the U.S. and non-U.S. tax consequences of ownership of shares
of the Fund, including the fact that such a shareholder may be subject to U.S.
withholding tax at a rate of 30% (or at a lower rate under an applicable U.S.
income tax treaty) on amounts constituting ordinary income from U.S. sources,
including ordinary dividends paid by the Fund.
CONSEQUENCES OF CERTAIN FUND INVESTMENTS
The Fund engages in various hedging transactions. Under various provisions
of the Code, the result of such transactions may be to change the character of
recognized gains and losses, accelerate the recognition of certain gains and
losses, and defer the recognition of certain losses. The extent to which the
Fund may be able to use such hedging techniques may be limited by the
requirement that generally less than 30% of the Fund's gross income consist of
gains from the sale or disposition of certain assets held for less than three
months.
Under Section 988 of the Code, all or a portion of gains and losses from
certain transactions is treated as ordinary income or loss. These rules
generally apply to transactions in certain securities denominated in foreign
currencies, forward contracts in foreign currencies, futures contracts in
foreign currencies that are not "regulated futures contracts," certain
unlisted options and foreign currency swaps. The rules under Section 988 may
also affect the timing of income recognized by the Fund.
The Fund may be subject to U.S. taxes resulting from holdings in a passive
foreign investment company ("PFIC"). A foreign corporation is a PFIC when 75%
or more of its gross income for the taxable year is passive income or 50% or
more of the average value of its assets consists of assets that produce or could
produce passive income. The Fund has no current intention to invest in PFICs.
30
<PAGE>
GENERAL INFORMATION
-------------------
Minnesota has enacted legislation which authorizes corporations to
eliminate or limit the personal liability of a director to the corporation or
its shareholders for monetary damages for breach of the fiduciary duty of "care"
(the duty to act with the care an ordinarily prudent person in a like position
would exercise under similar circumstances). Minnesota law does not, however,
permit a corporation to eliminate or limit the liability of a director (a) for
any breach of the director's duty of "loyalty" to the corporation or its
shareholders (the duty to act in good faith and in a manner reasonably believed
to be in the best interest of the corporation), (b) for acts or omissions not in
good faith or that involve intentional misconduct or a knowing violation of law,
(c) for authorizing a dividend, stock repurchase or redemption or other
distribution in violation of Minnesota law or for violation of certain
provisions of Minnesota securities laws, or (d) for any transaction from which
the director derived an improper personal benefit. Minnesota law does not
permit elimination or limitation of a director's liability under the 1933 Act or
the Securities Exchange Act of 1934, and the 1940 Act prohibits elimination or
limitation of a director's liability for acts involving willful malfeasance, bad
faith, gross negligence or reckless disregard of the duties of a director. The
Articles of Incorporation of Piper Global limit the liability of directors to
the fullest extent permitted by Minnesota law and the 1940 Act.
FINANCIAL STATEMENTS
--------------------
The audited financial statements and supplementary schedules for the Fund
as of February 28, 1995, are incorporated by reference into this Statement of
Additional Information in reliance upon the report of KPMG Peat Marwick LLP,
4200 Norwest Center, Minneapolis, Minnesota 55402, independent auditors, given
upon the authority of said firm as experts in accounting and auditing.
PENDING LITIGATION
------------------
Complaints have been filed in federal court relating to another open-end
investment company managed by the Adviser and to six closed-end investment
companies managed by the Adviser and to two open-end funds for which the Adviser
acts as sub-adviser. A complaint was filed on October 5, 1994 in the United
States District Court, District of Minnesota, against the Institutional
Government Income Portfolio (a series of Piper Funds Inc.), the Adviser, the
Distributor, William H. Ellis and Edward J. Kohler alleging certain violations
of federal and state securities laws, including the making of materially
misleading statements in the prospectus, common law negligent misrepresentation
and breach of fiduciary duty. Plaintiffs in the complaint, which purports to be
a class action and represents the consolidation of a number of previously filed
complaints, are Richard J. Rodney, Jr., Doug Shonka, Carl Patrick Monahan, Jerry
Hoehnen, Rosemary Boris, Thomas W. Newcome, Delvin D. Junker, Printing Mailing
Trade District, affiliated with the Newspaper Drivers' Division of the
International Brotherhood of the Teamsters, The History Theatre, Inc., Paul
Gold, and Bernard Friedman. Piper Jaffray
31
<PAGE>
Companies and attorneys representing the plaintiffs in the complaint recently
reached a $70 million agreement in principle to settle the lawsuit. The
agreement requires court approval and the acceptance of the settlement by a
large percentage of Institutional Government Income Portfolio shareholders.
Three additional complaints, which are based on claims similar to those
asserted in the first complaint, have been filed relating to Institutional
Government Income Portfolio. The first of such complaints was filed in the same
court against the same parties on October 21, 1994, by Eltrax Systems, Inc. A
second additional complaint was filed against Piper Funds Inc., the Adviser, the
Distributor and Piper Jaffray Companies Inc. on September 30, 1994 in the United
States District Court, District of Colorado. Plaintiffs in the complaint are
Gary Pashel and Gregg S. Hayutin, Trustees of the Mae Pashel Trust; Mae Pashel,
individually; Gary Pashel and Michael H. Feinstein, Trustees of the Robert
Hayutin Insurance Trust; and Dennis E. Hayutin, Gregg S. Hayutin and Gary
Pashel, Trustees of the Marie Ellen Hayutin Trust. The third additional
complaint, a putative class action, was filed on November 1, 1994 in the United
States District Court, District of Idaho by the Idaho Association of Realtors,
Inc., a non-profit Idaho corporation. The complaint was filed against
Institutional Government Income Portfolio, the Adviser, the Distributor, Piper
Jaffray Companies Inc., William H. Ellis and Edward J. Kohler.
A complaint was filed by Herman D. Gordon on October 20, 1994, in the
United States District Court, District of Minnesota, against American Adjustable
Rate Term Trust Inc. - 1998, American Adjustable Rate Term Trust Inc. - 1999,
the Adviser, the Distributor, Piper Jaffray Companies Inc., Benjamin Rinkey,
Jeffrey Griffin, Charles N. Hayssen and Edward J. Kohler. The complaint, which
purports to be a class action, alleges that the defendants violated the federal
securities laws by making materially misleading statements in prospectuses and
other disclosure documents.
A complaint was filed by Carson H. Bradley on February 3, 1995 in the Sixth
Judicial District of the State of Idaho against American Government Income Fund
Inc., American Government Income Portfolio Inc., the Adviser, the Distributor
and Worth Bruntjen. The complaint alleges negligent misrepresentation, breach
of fiduciary duty and breach of contract.
A complaint was filed on April 14, 1995 in the United States District
Court, District of Minnesota, against American Adjustable Rate Term Trust Inc. -
1996, American Adjustable Rate Term Trust Inc. - 1997, American Adjustable Rate
Term Trust Inc. - 1998, American Adjustable Rate Term Trust Inc. - 1999, Piper
Jaffray Companies Inc., the Adviser, the Distributor, Benjamin Rinkey, Jeffrey
Griffin, Charles N. Hayssen, Edward J. Kohler and William H. Ellis. The
complaint, which is a putative class action, was filed by Frank Donio, I.R.A.,
Jane Mazzagatte, I.R.A., Myra Smith, John M. Gobble, I.R.A. and Morgan
Properties, Inc. The complaint alleges certain violations of federal and state
securities laws, including the dissemination or approval of misleading
prospectuses, reports and releases.
32
<PAGE>
Complaints have also been filed relating to two open-end funds for which
the Adviser has acted as sub-adviser, Managers Intermediate Mortgage Fund and
Managers Short Government Fund. A complaint was filed on September 26, 1994 in
the United States District Court, District of Connecticut, by Florence R. Hosea,
Bobby W. Hosea, Getrud B. Dale and Peter M. Dale, Andrew Poffel and Diane Poffel
as tenants by the Entireties, Myrone Sarone, Donna M. DiPalo, Bernard B. Geltner
and Gail Geltner and Paul Delman. The complaint was filed against The Managers
Funds, the Managers Funds, L.P., Robert P. Watson, the Adviser, the Distributor,
an individual associated with the Adviser, Evaluation Associates, Inc. and
Managers Intermediate Mortgage Fund. The complaint, which is a putative class
action, alleges certain violations of federal securities laws, including the
making of false and misleading statements in the prospectus, and alleges
negligent misrepresentation, breach of fiduciary duty and common law fraud. A
similar complaint filed as a putative class action in the same court on
November 4, 1994 was consolidated with the first complaint on December 13, 1994.
The complaint was filed by Karen E. Kopelman against The Managers Fund, The
Managers Funds, L.P., Robert P. Watson, the Adviser, the Distributor, Worth
Bruntjen, Evaluation Associates, Inc. and Managers Intermediated Mortgage Fund.
A complaint was filed on November 18, 1994 in the United States District Court,
District of Minnesota. The complaint was filed by Robert Fleck as a putative
class action against The Managers Funds, The Managers Funds, L.P., the Adviser,
the Distributor, Worth Bruntjen, Evaluation Associates, Inc., Robert P. Watson,
John E. Rosati, William M. Graulty, Madeline H. McWhinney, Steven J. Pasggioli,
Thomas R. Schneeweis and Managers Short Government Fund, F/K/A/ Managers Short
Government Income Fund. The complaint alleges certain violations of federal
securities laws, including the making of false and misleading statements in the
prospectus, and negligent misrepresentation.
The Adviser and Distributor do not believe that the settlement reached in
connection with the first lawsuit described above, or any other of the above
lawsuits, will have a material adverse effect upon their ability to perform
under their agreements with the Funds and they intend to defend the remaining
lawsuits vigorously.
33
<PAGE>
APPENDIX A
CORPORATE BOND, PREFERRED STOCK AND
COMMERCIAL PAPER RATINGS
Commercial Paper Ratings
- ------------------------
Standard & Poor's Corporation. Commercial paper ratings are graded
into four categories, ranging from "A" for the highest quality obligations to
"D" for the lowest. Issues assigned the A rating are regarded as having the
greatest capacity for timely payment. Issues in this category are further
refined with designation 1, 2 and 3 to indicate the relative degree of safety.
The "A-1" designation indicates that the degree of safety regarding timely
payment is very strong. Those issues determined to possess overwhelming safety
characteristics will be denoted with a plus sign designation.
Moody's Investors Service, Inc. Moody's commercial paper ratings
are opinions of the ability of the issuers to repay punctually promissory
obligations not having an original maturity in excess of nine months. Moody's
makes no representation that such obligations are exempt from registration under
the Securities Act of 1933, nor does it represent that any specific note is a
valid obligation of a rated issuer or issued in conformity with any applicable
law. Moody's employs the following three designations, all judged to be
investment grade, to indicate the relative repayment capacity of rated issuers:
Prime-1 Superior capacity for repayment of short-term promissory
obligations
Prime-2 Strong capacity for repayment of short-term promissory obligations
Prime-3 Acceptable capacity for repayment of short-term promissory
obligations
Corporate Bond Ratings
- ----------------------
Standard & Poor's Corporation. Standard & Poor's ratings for
corporate bonds have the following definitions:
Debt rated "AAA" has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.
Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in a small degree.
Debt rated "A" has a strong capacity to pay interest and repay
principal, although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.
A-1
<PAGE>
Debt rated "BBB" is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
Moody's Investors Service, Inc. Moody's ratings for corporate bonds
include the following:
Bonds which are rated "Aaa" are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Bonds which are rated "Aa" are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risk appear somewhat larger than in Aaa
securities.
Bonds which are rated "A" possess many favorable attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Bonds which are rated "Baa" are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as well.
Preferred Stock Rating
- ----------------------
Standard & Poor's Corporation. Standard & Poor's ratings for
preferred stock have the following definitions:
An issue rated "AAA" has the highest rating that may be assigned by
Standard & Poor's to a preferred stock issue and indicates an extremely strong
capacity to pay the preferred stock obligations.
A-2
<PAGE>
A preferred stock issue rated "AA" also qualifies as a high-quality
fixed income security. The capacity to pay preferred stock obligations is very
strong, although not as overwhelming as for issues rated "AAA."
An issue rated "A" is backed by a sound capacity to pay the preferred
stock obligations, although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions.
An issue rated "BBB" is regarded as backed by an adequate capacity to
pay the preferred stock obligations. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to make payments for a preferred
stock in this category than for issues in the "A" category.
Moody's Investors Service, Inc. Moody's ratings for preferred stock
include the following:
An issue which is rated "aaa" is considered to be a top-quality
preferred stock. This rating indicates good asset protection and the least risk
of dividend impairment within the universe of preferred stocks.
An issue which is rated "aa" is considered a high grade preferred
stock. This rating indicates that there is reasonable assurance that earnings
and asset protection will remain relatively well maintained in the foreseeable
future.
An issue which is rate "a" is considered to be an upper medium grade
preferred stock. While risks are judged to be somewhat greater than in the
"aaa" and "aa" classifications, earnings and asset protection are,
nevertheless, expected to be maintained at adequate levels.
An issue which is rated "baa" is considered to be medium grade,
neither highly protected nor poorly secured. Earnings and asset protection
appear adequate at present but may be questionable over any great length of
time.
A-3
<PAGE>
APPENDIX B
GENERAL CHARACTERISTICS AND RISKS
OF OPTIONS AND FUTURES
OPTIONS ON SECURITIES
The Fund may write covered put and call options and purchase put and call
options on the securities in which it may invest that are traded on U.S. and
foreign securities exchanges and in over-the-counter markets.
The writer of an option may have no control over when the underlying
securities must be sold, in the case of a call option, or purchased, in the case
of a put option; the writer may be assigned an exercise notice at any time prior
to the termination of the obligation. Whether or not an option expires
unexercised, the writer retains the amount of the premium. This amount, of
course, may, in the case of a covered call option, be offset by a decline in the
market value of the underlying security during the option period. If a call
option is exercised, the writer experiences a profit or loss from the sale of
the underlying security. If a put option is exercised, the writer must fulfill
the obligation to purchase the underlying security at the exercise price which
will usually exceed the then market value of the underlying security.
The writer of an option that wishes to terminate its obligation may effect
a "closing purchase transaction." This is accomplished by buying an option of
the same series as the option previously written. The effect of the purchase is
that the writer's position will be canceled by the clearing corporation.
However, a writer may not effect a closing purchase transaction after being
notified of the exercise of an option. Likewise, an investor who is the holder
of an option may liquidate its position by effecting a "closing sale
transaction." This is accomplished by selling an option of the same series as
the option previously purchased. There is no guarantee that either a closing
purchase or a closing sale transaction can be effected.
Effecting a closing transaction in the case of a written call option will
permit the Fund to write another call option on the underlying security with
either a different exercise price or expiration date or both, or in the case of
a written put option will permit the Fund to write another put option to the
extent that the exercise price thereof is secured by deposited cash or short-
term securities. Also, effecting a closing transaction will permit the cash or
proceeds from the concurrent sale of any securities subject to the option to be
used for other Fund investments. If the Fund desires to sell a particular
security from its portfolio on which it has written a call option, it will
effect a closing transaction prior to or concurrent with the sale of the
security.
The Fund will realize a profit from a closing transaction if the price of
the transaction is less than the premium received from writing the option or is
more than the premium paid to purchase the option; the Fund will realize a loss
from a closing transaction if the price of the transaction is more than the
premium received from writing the option or is less than the premium paid to
purchase the option.
B-1
<PAGE>
Because increases in the market price of a call option will generally reflect
increases in the market price of the underlying security, any loss resulting
from the repurchase of a call option is likely to be offset in whole or in part
by appreciation of the underlying security owned by the Fund.
An option position may be closed out only where there exists a secondary
market for an option of the same series. If a secondary market does not exist,
it might not be possible to effect closing transactions in particular options
with the result that the Fund would have to exercise the options in order to
realize any profit. If the Fund is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the underlying security upon
exercise. Reasons for the absence of a liquid secondary market include the
following: (i) there may be insufficient trading interest in certain options,
(ii) restrictions may be imposed by a national securities exchange ("Exchange")
on opening transactions or closing transactions or both, (iii) trading halts,
suspensions or other restrictions may be imposed with respect to particular
classes or series of options or underlying securities, (iv) unusual or
unforeseen circumstances may interrupt normal operations on an Exchange, (v) the
facilities of an Exchange or the Options Clearing Corporation may not at all
times be adequate to handle current trading volume, or (vi) one or more
Exchanges could, for economic or other reasons, decide or be compelled at some
future date to discontinue the trading of options (or a particular class or
series of options), in which event the secondary market on that Exchange (or in
that class or series of options) would cease to exist, although outstanding
options on that Exchange that had been issued by the Options Clearing
Corporation as a result of trades on that Exchange would continue to be
exercisable in accordance with their terms.
The Fund may purchase put options to hedge against a decline in the value
of its portfolio. By using put options in this way, the Fund will reduce any
profit it might otherwise have realized in the underlying security by the amount
of the premium paid for the put option and by transaction costs.
The Fund may purchase call options to hedge against an increase in the
price of securities that the Fund anticipates purchasing in the future. The
premium paid for the call option plus any transaction costs will reduce the
benefit, if any, realized by the Fund upon exercise of the option, and, unless
the price of the underlying security rises sufficiently, the option may expire
worthless to the Fund.
FUTURES CONTRACTS
The Fund may, for hedging purposes, enter into contracts for the purchase
or sale for future delivery of securities or foreign currencies, or contracts
based on securities or financial indices including any index of the types of
securities in which the Fund may invest. U.S. futures contracts have been
designed by exchanges which have been designated "contracts markets" by the
Commodity Futures Trading Commission and must be executed through a futures
commission merchant, or brokerage firm, which is a member of the relevant
contract market. Futures contracts trade on a number of exchange markets, and,
through their clearing
B-2
<PAGE>
corporations, the exchanges guarantee performance of the contracts as between
the clearing members of the exchange.
At the same time a futures contract is purchased or sold, the Fund must
allocate cash or securities as a deposit payment ("initial deposit"). It is
expected that the initial deposit would be approximately 1-1/2% to 5% of a
contract's face value. Daily thereafter, the futures contract is valued and the
payment of "variation margin" may be required, since each day the Fund would
provide or receive cash that reflects any decline or increase in the contract's
value.
At the time of delivery of securities pursuant to such a contract,
adjustments are made to recognize differences in value arising from the delivery
of securities with a different interest rate from that specified in the
contract. In some (but not many) cases, securities called for by a futures
contract may not have been issued when the contract was written.
Although futures contracts by their terms call for the actual delivery or
acquisition of securities, in most cases the contractual obligation is fulfilled
before the date of the contract without having to make or take delivery of the
securities. The offsetting of a contractual obligation is accomplished by
buying (or selling, as the case may be) on a commodities exchange an identical
futures contract calling for delivery in the same month. Such a transaction,
which is effected through a member of an exchange, cancels the obligation to
make or take delivery of the securities. Since all transactions in the futures
market are made, offset or fulfilled through a clearing house associated with
the exchange on which the contracts are traded, the Fund will incur brokerage
fees when it purchases or sells futures contracts.
The ordinary spreads between prices in the cash and futures markets, due to
differences in the nature of those markets, are subject to distortions. First,
all participants in the futures market are subject to initial deposit and
variation margin requirements. Rather than meeting additional variation margin
requirements, investors may close futures contracts through offsetting
transactions which could distort the normal relationship between the cash and
futures markets. Second, the liquidity of the futures market depends on
participants entering into offsetting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery, liquidity
in the futures market could be reduced, thus producing distortion. Third, from
the point of view of speculators, the margin 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 may
cause temporary price distortions. Due to the possibility of distortion, a
correct forecast of general interest rate trends by Management may still not
result in a successful transaction.
In addition, futures contracts entail risks. Although Management will only
enter into futures contracts if it believes that use of such contracts will
benefit the Fund, if Management's investment judgment about the general
direction of securities prices is incorrect, the Fund's overall performance
would be poorer than
B-3
<PAGE>
if it had not entered into any such contract. For example, if the Fund has
hedged against the possibility of a decrease in securities prices which would
adversely affect the price of securities held in its portfolio and securities
prices increase instead, the Fund will lose part or all of the benefit of the
increased value of its securities which it has hedged because it will have
offsetting losses in its futures positions. In addition, in such situations, if
the Fund has insufficient cash, it may have to sell securities from its
portfolio to meet daily variation margin requirements. Such sales of securities
may be, but will not necessarily be, at increased prices which reflect the
rising market. The Fund may have to sell securities at a time when it may be
disadvantageous to do so.
OPTIONS ON FUTURES CONTRACTS
The Fund may purchase and write options on futures contracts for hedging
purposes. The purchase of a call option on a futures contract is similar in
some respects to the purchase of a call option on an individual security.
Depending on the pricing of the option compared to either the price of the
futures contract upon which it is based or the price of the underlying debt
securities, it may or may not be less risky than ownership of the futures
contract or underlying debt securities. As with the purchase of futures
contracts, when the Fund is not fully invested it may purchase a call option on
a futures contract to hedge against an anticipated increase in securities
prices.
The writing of a call option on a futures contract constitutes a partial
hedge against declining prices of the security which is deliverable upon
exercise of the futures contract. If the futures price at expiration of the
option is below the exercise price, the Fund will retain the full amount of the
option premium which provides a partial hedge against any decline that may have
occurred in the Fund's portfolio holdings. The writing of a put option on a
futures contract constitutes a partial hedge against increasing prices of the
security which is deliverable upon exercise of the futures contract. If the
futures price at expiration of the option is higher than the exercise price, the
Fund will retain the full amount of the option premium which provides a partial
hedge against any increase in the price of securities which the Fund intends to
purchase. If a put or call option the Fund has written is exercised, the Fund
will incur a loss which will be reduced by the amount of the premium it
receives. Depending on the degree of correlation between changes in the value
of its portfolio securities and changes in the value of its futures positions,
the Fund's losses from existing options may to some extent be reduced or
increased by changes in the value of portfolio securities.
The purchase of a put option on a futures contract is similar in some
respects to the purchase of protective put options on portfolio securities. For
example, the Fund may purchase a put option on a futures contract to hedge the
Fund's portfolio against the risk of a decline in securities prices.
The amount of risk the Fund assumes when it purchases an option on a
futures contract is the premium paid for the option plus related transaction
costs. In addition to the correlation risks discussed above, the purchase of an
option also
B-4
<PAGE>
entails the risk that changes in the value of the underlying futures contract
will not be fully reflected in the value of the option purchased.
The Fund's ability to engage in the options and futures strategies
described above will depend on the availability of liquid markets in such
instruments. Markets in options and futures with respect to many types of
securities in which the Fund invests are relatively new and still developing.
It is impossible to predict the amount of trading interest that may exist in
various types of options or futures. Therefore no assurance can be given that
the Fund will be able to utilize these instruments effectively for the purposes
set forth above. Furthermore, the Fund's ability to engage in options and
futures transactions may be limited by tax considerations. See "Taxation-
Consequences of Certain Fund Investments."
ADDITIONAL RISKS OF OPTIONS ON SECURITIES AND OPTIONS ON FUTURES CONTRACTS
Options on securities may be traded over-the-counter. In an over-the-
counter trading environment, much of the protection afforded to exchange
participants will not be available. For example, there are no daily price
fluctuation limits, and adverse market movements could therefore continue to an
unlimited extent over a period of time. Although the purchaser of an option
cannot lose more than the amount of the premium plus related transaction costs,
this entire amount could be lost. Moreover, the option writer could lose
amounts substantially in excess of its initial investment, due to the margin
requirements associated with such positions.
In addition, options on securities, futures contracts and options on
futures contracts may be traded on foreign exchanges. Such transactions are
subject to the risk of governmental actions affecting trading in or the prices
of foreign currencies or securities. The value of such positions also could be
adversely affected by (a) other complex foreign political and economic factors;
(b) lesser availability than in the United States of data on which to make
trading decisions; (c) delays in the Fund's ability to act upon economic events
occurring in foreign markets during nonbusiness hours in the United States; (d)
the imposition of different exercise and settlement terms and procedures and
margin requirements than in the United States; and (e) lesser trading volume.
FUTURE DEVELOPMENTS
The Fund may, following written notice thereof to its shareholders, take
advantage of opportunities in the area of options and futures contracts and
options on futures contracts which are not currently contemplated for use by the
Fund or which are not currently available but which may be developed, to the
extent such opportunities are both consistent with the Fund's investment
objective and legally permissible for the Fund. Such opportunities, if they
arise, may involve risks which exceed those involved in the options and
futures activities described above.
B-5
<PAGE>
PART C
PIPER GLOBAL FUNDS INC.
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
- -------------------------------------------
(a) Financial statements are included in the Statement of Additional
Information.
(b) Exhibits:
1.a Articles of Incorporation (2)
1.b Articles of Amendment to Articles of Incorporation (4)
2. Amended and Restated Bylaws (4)
3. Not applicable
4. Not applicable
5.a Investment Advisory and Management Agreement (4)
5.b Sub-Investment Advisory Agreement (4)
6. Underwriting and Distribution Agreement (4)
7. Not applicable
8. Custody Agreement (3)
9.a Form of Transfer Agency Agreement (3)
9.b Form of Recordkeeping Agreement (3)
10. Opinion and Consent of Dorsey & Whitney (1)
11. Consent of KPMG Peat Marwick (5)
12. Not applicable
13. Not applicable
14. Not applicable
15. Amended and Restated Plan of Distribution (4)
16. Computation of Performance Quotations (1)
25. Power of Attorney (1)
- --------------
(1) Previously filed
(2) Incorporated by reference to the Registrant's Registration Statement on
Form N-2, filed February 16, 1990, File No. 33-33534.
(3) Incorporated by reference to Amendment No. 2 to the Registrant's
Registration Statement on Form N-2, filed April 19, 1990, File No.
33-33534.
(4) Incorporated by reference to Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form N1-A filed June 28, 1993.
(5) Filed herewith.
1
<PAGE>
Item 25. Persons Controlled by or Under Common Control with Registrant
- ----------------------------------------------------------------------
No person is directly or indirectly controlled by or under common control
with the Registrant.
Item 26. Number of Holders of Securities
- -----------------------------------------
As of March 31, 1995, there were 16,269 record holders of the common shares
of Pacific-European Growth Fund.
Item 27. Indemnification
- -------------------------
The Articles of Incorporation and Bylaws of the Registrant provide that the
Registrant shall indemnify such persons for such expenses and liabilities, in
such manner and under such circumstances, to the full extent permitted by
Section 302A.521, Minnesota Statutes, as now enacted or hereafter amended,
provided that no such indemnification may be made if it would be in violation of
Section 17(h) of the Investment Company Act of 1940, as now enacted or hereafter
amended. Section 302A.521 of the Minnesota Statutes, as now enacted, provides
that a corporation shall indemnify a person made or threatened to be made a
party to a proceeding of the person against judgments, penalties, fines,
settlements, and reasonable expenses, including attorneys' fees and
disbursements, incurred by the person in connection with the proceeding if, with
respect to the acts or omissions of the person complained of in the proceeding,
the person has not been indemnified by another organization for the same
judgments, penalties, fines, settlements, and reasonable expenses incurred by
the person in connection with the proceeding with respect to the same acts or
omissions; acted in good faith, received no improper personal benefit and the
Minnesota Statutes dealing with directors' conflicts of interest, if applicable,
have been satisfied; in the case of a criminal proceeding, had no reasonable
cause to believe that the conduct was unlawful; and reasonably believed that the
conduct was in the best interests of the corporation or, in certain
circumstances, reasonably believed that the conduct was not opposed to the best
interests of the corporation.
Insofar as the indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the Registrant 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 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
incurred or paid by a director, officer, or controlling person of the Registrant
in the successful defense of any action, suit, or proceeding) is asserted by
such director, officer, or controlling person in connection with the securities
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
2
<PAGE>
is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
The Registrant will comply with the indemnification requirements of
Investment Company Act Releases 7221 (June 9, 1972) and 11330 (September 2,
1980).
Item 28. Business and Other Connections of Investment Adviser
- --------------------------------------------------------------
Information on the business of the Adviser is described in the section of
the Prospectus, incorporated by reference in this Registration Statement,
entitled "Management - Investment Adviser."
The officers and directors of the Adviser and their titles are as follow:
Name Title
---- -----
William H. Ellis President, Director and Chairman of
the Board
Charles N. Hayssen Director, Senior Vice President, Chief
Financial Officer and Chief
Operating Officer
David E. Rosedahl Director and Secretary
Bruce C. Huber Director
DeLos V. Steenson Director
Momchilo Vucenich Director
Beverly J. Zimmer Director
Paul A. Dow Senior Vice President and Chief
Investment Officer
Worth Bruntjen Senior Vice President
Richard W. Filippone Senior Vice President
John J. Gibas Senior Vice President
Marijo A. Goldstein Senior Vice President
Jeffrey B. Griffin Senior Vice President
Mark R. Grotte Senior Vice President
Michael P. Jansen Senior Vice President
Lisa A. Kenyon Senior Vice President
Steven V. Markusen Senior Vice President
Paula Meyer Senior Vice President
Robert H. Nelson Senior Vice President
Gary Norstrem Senior Vice President
Nancy S. Olsen Senior Vice President
Ronald R. Reuss Senior Vice President
Maxine D. Rossini Senior Vice President
3
<PAGE>
Bruce D. Salvog Senior Vice President
Sandra K. Shrewsbury Senior Vice President
David M. Steele Senior Vice President
Randall J. Sukovich Senior Vice President
Robert H. Weidenhammer Senior Vice President
John G. Wenker Senior Vice President
Douglas J. White Senior Vice President
Richard Daly Vice President
Michael C. Derck Vice President
Joan L. Harrod Vice President
Newby Herrod Vice President
Scott Jacobson Vice President
Kevin A. Jansen Vice President
Kimberly F. Kaul Vice President
Russell Kappenman Vice President
John D. Kightlinger Vice President
Wan-Chong Kung Vice President
Mark S. Lee Vice President
Thomas S. McGlinch Vice President
Thomas Moore Vice President
Edward P. Nicoski Vice President
Daniel Phillips Vice President
John K. Schonberg Vice President
Eric L. Siedband Vice President
Bradley Stone Vice President
Bonnie L. Theis Vice President
Eric H. Wesman Vice President
Marcy K. Winson Vice President
Principal occupations of Messrs. Ellis, Dow, Hayssen, Nelson and Rosedahl
and Ms. Olsen are set forth in the Statement of Additional Information under the
heading "Directors and Officers." Mr. Huber has been a Director of the Adviser
since October 1985 and was a Vice President of the Adviser from October 1985
until April 1992, and a Managing Director of Piper Jaffray Inc. ("Piper
Jaffray") since November 1986. Mr. Bruntjen has been a Senior Vice President of
the Adviser since January 1988. Mr. Filippone has been a Senior Vice President
of the Adviser since November 1991, prior to which he had been a Vice President
of the Adviser since May 1987. Mr. Gibas has been a Senior Vice President of
the Adviser since November 1992, prior to which he had been a Vice President of
the Adviser since May 1987. Ms. Goldstein has been a Senior Vice President of
the Adviser since November 1993, prior to which she was a Vice President of the
Adviser since 1991 and a fixed income analyst of the Adviser since 1988. Mr.
Griffin has been a Senior Vice President of the Adviser since November 1991,
prior to which he had been a Vice President of the Adviser since October 1989.
Mr. Grotte has been a Senior Vice President of the Adviser since November 1992,
prior to which he had been a Vice President of the Adviser since June 1988. Mr.
Michael Jansen has been a Senior Vice
4
<PAGE>
President of the Adviser since October 1993, prior to which he was a Managing
Director of Piper Jaffray since 1987, an Executive Vice President of Piper
Mortgage Acceptance Corporation since 1991 and an Executive Vice President and
Director of Premier Acceptance Corporation since 1988. Ms. Kenyon has been a
Senior Vice President of the Adviser since January 1992, prior to which she had
been a financial adviser for a private family in Los Angeles. Mr. Markusen has
been a Senior Vice President of the Adviser since December 1993, prior to which
had been a senior vice president of Investment Advisers, Inc., in Minneapolis,
Minnesota since 1989. Ms. Meyer has been a Senior Vice President of the Adviser
since December 1994, prior to which she had been a Vice President of Secura
Insurance, Appleton, Wisconsin since 1988. Mr. Nicoski has been a Senior Vice
President of the Adviser since October 1985 and a Managing Director of the
Distributor since November 1986. Mr. Norstrem has been a Senior Vice President
of the Adviser since 1993, prior to which he was Treasurer of the City of Saint
Paul, Minnesota for twenty-eight years. Mr. Reuss has been a Senior Vice
President of the Adviser since January 1989. Ms. Rossini has been a Senior Vice
President of the Adviser since September 1993, prior to which she had been a
managing Director of the Distributor since November 1989. Mr. Salvog has been a
Senior Vice President of the Adviser since January 1992, prior to which he had
been a portfolio manager at Kennedy & Associates in Seattle, Washington from
1984.
Sandra K. Shrewsbury has been a Senior Vice President of the Adviser since
September 1993, prior to which she had been a Managing Director of Piper Jaffray
since November 1992, a Vice President of Piper Jaffray since November 1990 and
an Assistant Vice President of Piper Jaffray since November 1989. Mr. Steele
has been a Senior Vice President of the Adviser since January 1992, prior to
which he had been a portfolio manager at Kennedy & Associates in Seattle,
Washington from 1987. Mr. Steenson has been a Director of the Adviser since
December 1994 and a Managing Director of the Underwriter since 1982. Mr.
Sukovich has been a Senior Vice President of the Adviser since January 1989.
Mr. Vucenich has been a Director of the Adviser since December 1994 and a
managing director of regional sales for Piper Jaffray Companies Inc. since
February 1993. Mr. Weidenhammer has been a Senior Vice President of the Adviser
since November 1991, prior to which he had been a Vice President of the Adviser
since July 1987. Mr. Wenker has been a Senior Vice President of the Adviser
since October 1993, prior to which he was a Managing Director of Piper Jaffray
since 1992, the Director of Revitalization Resources of the Minneapolis
Community Development Agency from September 1990 to January 1992 and a Vice
President of Miller & Schroeder Financial Inc. from 1986 to 1990. Mr. White
has been a Senior Vice President of the Adviser since November 1991, prior to
which he had been a Vice President of the Adviser since November 1989. Ms.
Zimmer has been a Director of the Adviser since December 1994, prior to which
she was Chief Operating Officer of the Adviser from May 1992 to December 1994
and Senior Vice President of the Adviser from December 1990 to December 1994.
Mr. Daly has been a Vice President of the Adviser since 1992, prior to
which he was an Assistant Vice President of the Piper Jaffray since 1990 and a
broker with Piper Jaffray from 1987 to 1992. Mr. Derck has been a Vice
President of the Adviser
5
<PAGE>
since November 1992, prior to which he had been a manager of Advisory Accounts
Services with the Adviser since April 1992 and, before that, an Assistant Vice
President at First Trust since 1976. Ms. Harrod has been a Vice President of the
Adviser since November 1992 and has been a trader for the Adviser since October
1989. Mr. Herrod has been a Vice President of the Adviser since 1992, prior to
which he was a Vice President of Capital Markets at Washington Square Capital
Management since 1987. Mr. Jacobson has been a Vice President of the Adviser
since 1992, prior to which he had been a manager at Deloitte & Touche since
1986. Mr. Kevin Jansen has been a Vice President of the Adviser since November
1993, prior to which he was an Assistant Vice President of Piper Jaffray since
1992 and an analyst at Piper Jaffray from 1991 to 1992. Mr. Kappenman has been
a Vice President of the Adviser since 1991. Ms. Kaul has been a Vice President
and Director of Corporate Communications of the Adviser since November 1991,
prior to which she was Copy Director and Assistant Vice President in the
advertising department of Piper Jaffray since 1986. Mr. Kightlinger has been a
Vice President of the Adviser since 1991, prior to which he had been a
department head and portfolio manager for TCF Bank Savings. Ms. Kung has been a
Vice President of the Adviser since May 1993, prior to which she had been a
Senior Consultant at Cytrol Inc. from 1989 to December 1992. Mr. Lee has been a
Vice President of the Adviser since November 1990, prior to which he had been
the National Sales Manager and Regional Vice President of Shurgard Capital
Group, Seattle, Washington, for eight years. Mr. McGlinch has been a Vice
President of the Adviser since November 1992, prior to which he had been an
Assistant Vice President of the Adviser since January 1992 and a specialty
products trader at FBS Investment Services from January 1990 to January 1992.
Mr. Moore has been a Vice President of the Adviser since 1992, prior to which he
was a Portfolio Manager at Alpine Capital Management from 1990 to 1992 and a
broker at Hanifen Capital Management from 1990 to 1992. Mr. Phillips has been a
Vice President of the Adviser since 1993 and has been an insurance product
manager at Piper Jaffray since 1987. Mr. Schonberg has been a Vice President of
the Adviser since November 1992 and a portfolio manager for the Adviser since
July 1989. Mr. Siedband has been a Vice President of the Adviser since 1992.
Mr. Stone has been a Vice President of the Adviser since November 1991 and a
fixed-income analyst of the Adviser since March 1990. Ms. Theis has been a Vice
President of the Adviser since November 1992, prior to which she had been an
Assistant Vice President of the Adviser since 1989. Mr. Wesman has been a Vice
President of the Adviser since January 1992. During 1991, Mr. Wesman was self-
employed, prior to which he had been the Regional Marketing Director of Keyport
Life Insurance Company (formerly Keystone Provident Life Insurance Company)
since January 1987. Ms. Winson has been a Vice President of the Adviser since
November 1993, prior to which she was an Assistant Vice President of the Adviser
since March 1993. Prior to March 1993, Ms. Winson was an educator from 1990 to
1992.
6
<PAGE>
The officers and directors of the Sub-Adviser and their titles are as
follow:
Name Title
---- -----
Angus M.M. Grossart Director and Non-Executive
Deputy Chairman
Colin H. Ross Director and Executive Chairman
Iain A. Watt Managing Director
Peter A.K. Arthur Executive Director
Walter G. Riddell-Carre Executive Director
Alexander J. Gowans Investment Director
William S. Johnstone Group Marketing Director
Michael W. Balfour Chief Investment Director
Alfred A. Bissett Executive Director
John W. Blair Non-Executive Director
Michael H. Butler Non-Executive Director
James Cowan Non-Executive Director
Lord Macfarlane of Bearsden Non-Executive Director
Barry J. Southcott Non-Executive Director
Principal occupations of Mr. Watt and Mr. Balfour are set forth in the
Statement of Additional Information under the heading "Directors and Executive
Officers." Mr. Grossart currently serves as a director of American Trust plc,
British Petroleum Scottish Advisory Board, Hewden Stuart plc, Murray
International Holdings Limited, Noble Grossart Limited, Noble Grossart Holdings
Limited, Noble Grossart Investments Limited, Porton International plc, The Royal
Bank of Scotland plc, The Royal Bank of Scotland Group plc, Sanda Investments
Limited, Scottish Financial Enterprise, The Scottish Investment Trust plc,
Scottish Opera, Scottish Television plc, St. Andrews Management Institute
Limited, The National Galleries of Scotland and Wright Health Group Limited.
Mr. Ross currently serves as a director of The British Investment Trust plc,
Edinburgh Oil & Gas plc, Edinburgh & Dallas Petroleum Limited, Esco Exploration
Limited, Edinburgh Oil Management Limited, Private Fund Managers Limited, Robert
Taylor (Ironfounder) Holdings Limited, Santop Limited, Edinburgh Unit Trust
Managers Limited and EFM Overseas Limited. Mr. Arthur currently serves as a
director of The Edinburgh Securities Co. Limited. Mr. Riddell-Carre currently
serves as a director of Edinburgh Japan Trust plc. Mr. Gowans currently serves
as a director of Edinburgh Income Trust plc, Edinburgh Small Companies Trust plc
and Edinburgh Unit Trust Managers Limited. Mr. Johnstone currently serves as a
director of Edinburgh Unit Trust Managers Limited and Broadgate Marketing
Limited. Mr. Bissett currently serves as a director of Edinburgh Oil and Gas
plc, Edinburgh & Dallas Petroleum Limited, Edinburgh Oil Management Limited,
Esco Exploration Limited, Santop Limited and Commonwealth Basketball
Championships Limited. Mr. Blair currently serves as a director of The British
Investment Trust plc, Clint Estates Limited, Douglas & Angus Estates Limited,
Arthurstone House plc, Fishdale Limited and Strathern & Blair Limited. Mr.
Butler currently serves as a director of The British Investment Trust plc,
British Coal
7
<PAGE>
Enterprises Limited, British Fuels Group Pension Scheme Limited and CIN
Management Limited.
Mr. Cowan currently serves as a director of The British Investment Trust
plc and CIN Management Limited. Lord MacFarlane currently serves as a director
of American Trust plc, United Distillers UK (formerly Arthur Bell Distillers
plc), Clydesdale Bank plc, Combined Capital Limited, General Accident Fire &
Life Assurance Corp. plc, The Fine Art Society plc, The High School of Glasgow
Limited, The National Galleries of Scotland, MacFarlane Group (Clansman) plc,
Abbott's Packaging Limited, A.C.W. Limited, Adhesive Labels Limited, Aston
Packaging Limited, Ayrshire Labels Limited, Clansman Cases Limited, Clansman
Contracts Limited, Controlled Packaging Services Limited, Factory Maintenance
Services (Glasgow) Limited, Flo Pak (UK) Limited, A & W Fullarton Limited, N.S.
MacFarlane & Co. Limited, N. S. MacFarlane (Office Makers) Limited, Management
Investors (Clansman) Limited, Mitchell Packaging Limited, Daniel Montgomery &
Son Limited, Smith Brothers (Clansman) Limited, United Distillers plc, Roger
Bilcliffe Fine Arts Limited, The Scottish Business Achievement Award Trust
Limited, Double R Packaging Limited, John Barrie (Contractors) Limited, Carbon
Paper Supply Co. Limited, Clyde Road Transport Limited, Clansmac Limited
(formerly Copigraph Limited), Deep Print Projects Limited, Dunsmuir
Manufacturing Company Limited, Farquharson Brothers Limited, Fullarton Motors
Limited, David Fleming Limited, General Welding Company Limited, Gwent Packaging
Limited, Thomas Ibbetson Limited, Lancashire Box Company Limited, MacFarlane
Group Limited (formerly NAMSALC Limited), N.R. Fitments Limited, Packability
(Grantham) Limited, Phoenix Packaging Limited, Wm Rankin & Sons (Closures)
Limited, Rolengate Limited, Silk Finish Limited, Thames Wood Wool Company
Limited and Vicarfield Manufacturing Company Limited. Mr. Southcott currently
serves as a director of The British Investment Trust plc, BZW Convertible
Investment Trust plc, CIN Contractors Management Limited, Citystone Assets plc,
Globe (Method) Limited, Globe (Mind) Limited, CIN Management Limited, CIN
Properties Limited, CIN Trustees Limited, CINVEN Limited, CIN Venture Nominees
Limited and Globe Venture Nominess Limited.
Item 29. Principal Underwriters
- --------------------------------
(a) Piper Jaffray Inc. acts as principal underwriter for the Registrant
and also for two other open-end investment companies, Piper Funds Inc., the
shares of which are currently offered in thirteen series, and Piper
Institutional Funds Inc., the shares of which are currently offered in three
series. Piper Jaffray has acted as principal underwriter in connection with the
initial public offering of shares of 22 closed-end investment companies managed
by the Adviser.
8
<PAGE>
(b) The name, positions and offices with Piper Jaffray Inc., and positions
and offices with the Registrant of each director and officer of Piper Jaffray
Inc. are as follow:
<TABLE>
<CAPTION>
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
- -------------------------- ----------------------------- ---------------------
<S> <C> <C>
Addison L. Piper Chairman of the Board of None
Directors and Chief Executive
Officer
William H. Ellis President, Chief Operating Chairman of
Officer and Member of the Board of
Board of Directors Directors
Karen M. Bohn Member of the Board None
of Directors
Ralph W. Burnet Member of the Board None
of Directors
John L. McElroy, Jr. Member of the Board None
of Directors
Kathy Halbreich Member of the Board None
of Directors
Robert S. Slifka Member of the Board None
of Directors
David Stanley Member of the Board None
of Directors
Bruce D. Aamoth Managing Director None
Craig W. Agneberg Managing Director None
Larry E. Bare Managing Director None
James J. Bellus Managing Director None
AnnDrea M. Benson Managing Director None
Lloyd K. Benson Managing Director None
James L. Bergtold Managing Director None
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
- -------------------------- ----------------------------- ---------------------
<S> <C> <C>
Peter A. Bessette Managing Director None
Gary J. Blauer Managing Director None
Ronald O. Braun Managing Director None
Barney Brenner Managing Director None
Paul E. Brodsky Managing Director None
Edward M. Caillier Managing Director None
Kenneth S. Cameranesi Managing Director None
Stephen M. Carnes Managing Director None
Joseph V. Caruso Managing Director None
Antonio J. Cecin Managing Director None
Linda A. Clark Managing Director None
Stephen B. Clark Managing Director None
David P. Crosby Managing Director None
Thomas S. Cousins Managing Director None
George S. Dahlman Managing Director None
Leslie E. Danford Jr. Managing Director None
Michael D. Deede Managing Director None
Thomas M. Delmoor Managing Director None
Jack C. Dillingham Managing Director None
Mark T. Donahoe Managing Director None
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
- -------------------------- ----------------------------- ---------------------
<S> <C> <C>
Andrew S. Duff Managing Director None
Michael D. Duffy Managing Director None
Neil Dunn Managing Director None
Jeffrey M. Eggemeyer Managing Director None
Fred R. Eoff, Jr. Managing Director None
Richard D. Estenson Managing Director None
Francis E. Fairman IV Managing Director None
Gordon R. Ferguson Managing Director None
Paul Ferry Managing Director None
Deanne W. Fewel Managing Director None
Mark E. Fisler Managing Director None
Michael W. Follett Managing Director None
Dean A. Frederickson Managing Director None
Marvin P. Geisness Managing Director None
Peter M. Gill Managing Director None
E. Peter Gillette Jr. Managing Director None
Robert S. Gilman Managing Director None
Paul D. Grangaard Managing Director None
R. Hunt Greene Managing Director None
G. Jeffrey Hamilton Managing Director None
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
- ------------------------- ----------------------------- ---------------------
<S> <C> <C>
James S. Harrington Managing Director None
Lynne M. Harrington Managing Director None
Charles N. Hayssen Managing Director, Chief Treasurer
Financial Officer, & Treasurer
William P. Henderson Managing Director None
Allan F. Hickok Managing Director None
Richard L. Hines Managing Director None
John E. Houlihan Managing Director None
Bruce C. Huber Managing Director None
Elizabeth A. Huey Managing Director None
Richard M. Hufnagel Managing Director None
John R. Jacobs Managing Director None
Nicholas P. Karos Managing Director None
Alan W. Kennebeck Managing Director None
John S. Kennefick Managing Director None
Charles B. Lannin Managing Director None
Eric W. Larson Managing Director None
Dan L. Lastavich Managing Director None
Douglas G. Lingafelter Managing Director None
Brian J. Luedtke Managing Director None
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
- -------------------------- ----------------------------- ---------------------
<S> <C> <C>
Anthony A. Lusvardi Managing Director None
Robert J. Magnuson Managing Director None
James M. Manire Jr. Managing Director None
Robert E. Mapes Managing Director None
Andrew E. Marks Managing Director None
Peter T. Mavroulis Managing Director None
Michael P. McMahon Managing Director None
Gregory T. McNellis Managing Director None
Thomas A. Medlin Managing Director None
John V. Miller Managing Director None
Dennis V. Mitchell Managing Director None
Susan D. Musselman Managing Director None
Barry J. Nordstrand Managing Director None
Benjamin S. Oehler Managing Director None
Joseph J. Olchefske Managing Director None
Brooks G. O'Neil Managing Director None
John P. O'Neill Managing Director None
John Otterlei Managing Director None
James M. Palmer Managing Director None
John F. Pellicci Managing Director None
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
- -------------------------- ----------------------------- ---------------------
<S> <C> <C>
Gary M. Petrucci Managing Director None
Robin C. Pfister Managing Director None
Rex W. Ramsay Managing Director None
Savino J. Ranallo Managing Director None
Roger W. Redmond Managing Director None
Ronald N. Reiches Managing Director None
Robert P. Rinek Managing Director None
Jim M. Roane Managing Director None
Bryan C. Roche Managing Director None
Deborah K. Roesler Managing Director None
David E. Rosedahl Managing Director, General Secretary
Counsel and Secretary
James J. Rude Managing Director None
Thomas P. Schnettler Managing Director None
Steven R. Schroll Managing Director None
Joyce Nelson Schuette Managing Director None
Michael A. Schultz Managing Director None
Lawrence M. Schwartz Jr. Managing Director None
Sandra K. Shrewsbury Managing Director None
John C. Siegler Managing Director None
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
- -------------------------- ----------------------------- ---------------------
<S> <C> <C>
Jay Silver Managing Director None
David P. Sirianni Managing Director None
Arch C. Smith Managing Director None
Robert L. Sonnek Managing Director None
Thomas E. Stanberry Managing Director None
DeLos V. Steenson Managing Director None
John P. Sten Managing Director None
Richard J. Stream Managing Director None
D. Greg Sundberg Managing Director None
William H. Teeter Managing Director None
Ann C. Tillotson Managing Director None
Marie A. Urich Managing Director None
Darrell L. Westby Managing Director None
David R. Westcott Managing Director None
Douglas R. Whitaker Managing Director None
Douglas H. Wilford Managing Director None
Eric P. Wilson Managing Director None
Stephen W. Woodard Managing Director None
Mark Wren Managing Director None
Laura P. Wright Managing Director None
Saul Yaari Managing Director None
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
- -------------------------- ----------------------------- ---------------------
<S> <C> <C>
Gary L. Zanin Managing Director None
</TABLE>
The principal business address of each of the individuals listed above is Piper
Jaffray Tower, 222 South Ninth Street, Minneapolis, Minnesota 55402-3804.
Item 30. Location of Accounts and Records
- ------------------------------------------
The physical possession of the accounts, books, and other documents
required to be maintained by Section 31(a) of the Investment Company Act of 1940
and Rules 3la-1 to 3la-3 promulgated thereunder is maintained by the Registrant
at Piper Jaffray Tower, 222 South Ninth Street, Minneapolis, Minnesota 55402-
3804, except that the physical possession of certain accounts, books and other
documents related to the custody of the Registrant's securities is maintained by
Investors Fiduciary Trust Company, 127 West Tenth Street, Kansas City, Missouri
64105.
Item 31. Management Services
- -----------------------------
Not applicable.
Item 32. Undertakings
- ----------------------
(a) Not applicable.
(b) Not applicable.
(c) Each recipient of a prospectus of any series of the Registrant may
request the latest Annual Report and such Annual Report will be furnished by the
Registrant without charge.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, 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
Registration Statement on Form N-1A to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Minneapolis and State of
Minnesota on the 24th day of April 1995.
PIPER GLOBAL FUNDS INC.
By /s/ Paul A. Dow
--------------------------------------
Paul A. Dow, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
/s/ Paul A. Dow
- ---------------------------- President (principal April 24, 1995
Paul A. Dow executive officer)
/s/ Charles N. Hayssen
- ---------------------------- Treasurer (principal April 24, 1995
Charles N. Hayssen financial and accounting
officer)
Michael W. Balfour* Director
Jaye F. Dyer* Director
William H. Ellis* Director
Karol D. Emmerich* Director
Luella G. Goldberg* Director
John T. Golle* Director
George Latimer* Director
Iain A. Watt* Director
*By /s/ William H. Ellis April 24, 1995
-------------------------
William H. Ellis
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
TO
REGISTRATION STATEMENT
OF
PIPER GLOBAL FUNDS INC.
Exhibit Page No.
- ------- --------
11 Independent Auditors' Consent
<PAGE>
EXHIBIT 11
Independent Auditors' Consent
-----------------------------
The Board of Directors
Piper Global Funds Inc.:
We consent to the use of our reports incorporated herein by reference and to the
references to our Firm under the headings "Financial Highlights" in Part A and
"Financial Statements" in Part B of the Registration Statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Minneapolis, Minnesota
April 28, 1995
