<PAGE>
As filed with the Securities and Exchange Commission on April 23, 1999
1940 Act Registration No. 811-6187
1933 Act File No. 33-36454
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_/
Pre-Effective Amendment No. /_/ /_/
Post-Effective Amendment No. 12 /X/
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /_/
Amendment No. 12 /X/
(Check appropriate box or boxes)
ASM INDEX 30 FUND, INC.
(Exact Name of Registrant as Specified in Charter)
410 PARK AVENUE, 18TH FLOOR, NEW YORK, NEW YORK 10022
(Address of Principal Executive Offices) (Zip Code)
(212) 891-7900
Registrant's Telephone Number, Including Area Code
M. FYZUL KHAN, ESQ., 410 PARK AVENUE, 18TH FLOOR, NEW YORK, NEW YORK 10022
(Name and Address of Agent for Service)
Please send copies of communications to
Steven M. Felsenstein, Esq.
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
It is proposed that this filing will become effective (check appropriate box)
/_/ immediately upon filing pursuant to paragraph (b)
/x/ on April 24, 1999 pursuant to paragraph (b)
/_/ 60 days after filing pursuant to paragraph (a)(1)
/_/ on ____________ pursuant to paragraph (a)(1)
/_/ 75 days after filing pursuant to paragraph (a)(2)
/_/ on ____________ pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
/_/ This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
<PAGE>
[LOGO]
ASM INDEX 30 FUND, INC.
410 PARK AVENUE
18TH FLOOR
NEW YORK, NEW YORK 10022
(800) 333-4276
PROSPECTUS
DATED APRIL 24, 1999
A DIVERSIFIED, PURE NO-LOAD MUTUAL FUND
Everything you need to open your account is inside, including:
Current Prospectus
New Account Application
New Account Information
How to Contact ASM Index 30 Fund
AS WITH ALL MUTUAL FUNDS, THE U.S. SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR
COMPLETENESS OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
COMPANIES THAT COMPRISE THE DOW JONES INDUSTRIAL AVERAGE:
ALLIED SIGNAL, INC.
ALUMINUM COMPANY OF AMERICA
AMERICAN EXPRESS CO.
AT&T CORP.
BOEING CO.
CATERPILLAR, INC.
CHEVRON CORP.
CITIGROUP INC.
COCA-COLA CO.
E.I. DUPONT DE NEMOURS & CO.
EASTMAN KODAK CO.
EXXON CORP.
GENERAL ELECTRIC CO.
GENERAL MOTORS CORP.
GOODYEAR TIRE & RUBBER CO.
HEWLETT-PACKARD CO.
INTERNATIONAL BUSINESS MACHINES CORP.
INTERNATIONAL PAPER CO.
JOHNSON & JOHNSON
McDONALD'S CORP.
MERCK & CO.
MINNESOTA MINING & MANUFACTURING CO.
J.P. MORGAN & CO.
PHILIP MORRIS COMPANIES, INC.
PROCTER & GAMBLE CO.
SEARS ROEBUCK & CO.
UNION CARBIDE CORP.
UNITED TECHNOLOGIES CORP.
WAL-MART STORES, INC.
WALT DISNEY CO.
2
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
- ------------------------------------ -----
<S> <C>
About the Fund...................... 4
Performance Information............. 5
Fees and Expenses................... 6
Management of the Fund.............. 6
Shareholder Investment Accounts..... 7
Buying Shares....................... 7
<CAPTION>
TABLE OF CONTENTS PAGE
- ------------------------------------ -----
<S> <C>
Selling Shares...................... 9
Portfolio Turnover.................. 10
Distributions and Taxes............. 11
Year 2000........................... 11
Recent Developments................. 11
Legal Proceedings................... 11
Financial Highlights................ 13
</TABLE>
3
<PAGE>
ABOUT THE FUND
INVESTMENT OBJECTIVE--
The investment objective of the ASM Index 30 Fund, Inc.(the "Fund") is to
achieve total return through a combination of capital appreciation and current
income. The investment objective of the Fund may not be changed without
shareholder approval.
INVESTMENT APPROACH--
The Fund limits its investments to the common stocks of the 30 companies
that make up the well-known Dow Jones Industrial Average ("DJIA")*, all of which
are listed on the New York Stock Exchange. The stocks of these companies are
widely known and represent major American corporations engaged in a variety of
industries.
The Fund invests at least 95% of the Fund's assets in an equal number of
shares of each of these 30 companies, without regard to the share prices of the
individual stocks, with the goal of tracking the total return of the DJIA. The
balance of any assets not invested in these companies is normally held in cash
or cash equivalents.
- ------------------------
* "Dow Jones Industrial Average" and "DJIA" are the property of Dow Jones &
Company. The ASM Index 30 Fund, Inc. is neither affiliated with, nor endorsed
by, Dow Jones & Company.
PRINCIPAL INVESTMENT RISKS--
There is no guarantee that the Fund will achieve its investment objective.
Since the Fund limits its investments to the 30 widely followed stocks of the
DJIA which are listed on the inside of the front cover of this prospectus, any
number of factors, including market and economic conditions, can cause the
Fund's performance to be lower or greater than that of other funds which invest
in similar stocks. Because the prices of stocks fluctuate, your investment in
the Fund will fluctuate, which means that you could lose money. However, stocks
have historically been a popular choice of long term investors with specific
investment goals.
Some of the principal risks of investing in the Fund include:
Market Risk--Market risk is the risk that all or a majority of the
securities in a certain market like the stock or bond market--will decline
in value because of factors such as economic conditions, investor confidence
and future expectations.
Industry and Security Risk--Generally, this is the risk that the value
of securities in a particular industry or the value of an individual stock
or bond will decline because of changing expectations for the performance of
that industry or for the individual company issuing the stock or bond.
The risks make it possible that one or more of the stocks held by the Fund
may go down in value, which will affect the Fund's goal of increasing the total
value of Fund shares. However, by limiting the stocks held by the Fund to 30
well-known, major American corporations, the potential for risk, while not
eliminated, may be somewhat reduced. Please see the Statement of Additional
Information for further discussion of these risks and other risk factors.
THE FUND MAY NOT ACHIEVE ITS INVESTMENT GOALS AND IT IS NOT INTENDED TO
SERVE AS A COMPLETE INVESTMENT PROGRAM. AN INVESTMENT IN THE FUND IS NOT A BANK
DEPOSIT AND IT IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION ("FDIC") OR ANY OTHER GOVERNMENT AGENCY
4
<PAGE>
PERFORMANCE INFORMATION
The charts that follow help to show the returns and risks of investing in
the Fund. They show changes in the Fund's yearly performance over the life of
the Fund and compare the Fund's average annual returns for the past one-year,
five-year, and the life of the Fund to those of the DJIA during each period.
Investment performance also often reflects the risks associated with the
Fund's investment objective and policies. These factors should be considered
when comparing the Funds to other funds. You should keep in mind that the Fund's
past performance is not necessarily an indication of the Fund's future
performance.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
ASM INDEX 30 FUND, INC. TOTAL RETURN AS OF 12/31 EACH YEAR
1991 -8.90%*
1992 5.70%
1993 13.33%
1994 1.04%
1995 29.05%
1996 24.78%
1997 24.51%
1998 16.78%
Best Calendar Quarter: Q2 1997 17.08%
Worst Calendar Quarter: Q3 1998 -11.72%
</TABLE>
- ------------------------
* Not annualized. Shares of the Fund were first sold on March 4, 1991.
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED 12/31/98)
<TABLE>
<CAPTION>
SINCE
COMMENCEMENT OF
OPERATIONS
PAST ONE YEAR PAST FIVE YEARS MARCH 4, 1991
--------------- --------------- -------------------
<S> <C> <C> <C>
ASM Index 30 Fund, Inc. 16.78% 18.79% 12.88%
Dow Jones Industrial Average++ 18.00% 22.06% 17.94%
</TABLE>
- ------------------------
++ The DJIA is a composite of the common stocks of 30 widely held, well-known
large capitalization domestic corporations. The DJIA's performance assumes
reinvestment of all dividends and distributions and does not reflect any
asset-based charges for investment management or other expenses.
5
<PAGE>
FEES AND EXPENSES
The following table describes the fees and expenses that you may pay in
connection with an investment in the Fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<S> <C> <C>
Maximum Sales Charge (load) on Purchases
(as a percentage of offering price) None
Sales Charge on Reinvested Dividends None
Redemption Fees None
Exchange Fees None
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
<S> <C> <C>
Advisory Fee 0.08%
Other Expenses 0.83%
Total Annual Fund Operating Expenses 0.91%(1)
</TABLE>
- ------------------------
1 Extraordinary non-recurring expenses arising from recent events are expected
to result in a materially higher expense ratio during the current period.
EXPENSE EXAMPLE--
This is an example of what you might pay in expenses over various time
periods and will help you to compare the cost of investing in the Fund with the
cost of investing in other mutual funds. It is based on the same hypothetical
factors used by other funds in their prospectuses: a $10,000 investment, 5%
total return each year and no change in Fund expense levels. This example is the
same whether you sold your shares at the end of the period or kept them. This
example is for comparison only since actual returns and expenses will be
different.
<TABLE>
<CAPTION>
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
- ------------- ------------- ----------- -----------
<S> <C> <C> <C>
$ 93 $ 290 $ 504 $ 1,120
</TABLE>
MANAGEMENT OF THE FUND
The Fund is managed by the Board of Directors (the "Board") which is
responsible for protecting the interests of shareholders. The members of the
Board are experienced business persons who meet throughout the year to oversee
the Fund's activities, review contractual arrangements with companies that
provide services to the Fund, and review Fund performance.
The Board appoints an investment adviser to manage the day-to-day operations
of the Fund. The basis for this arrangement is detailed in an Investment
Management Agreement between the Fund and the investment adviser.
The Fund's investment adviser is required to manage the Fund in accordance
with its fundamental policy, which limits the Fund's investments primarily to
the common stocks of the 30 companies that comprise the DJIA. In doing so, the
investment adviser is responsible for purchases and sales of the securities held
by the Fund, including the reinvestment of the Fund's assets. As such, the
investment adviser conducts the daily business affairs of the Fund and oversees
investments in the Fund in keeping with its investment objective, policies and
restrictions.
On February 26, 1999, the Board appointed ORBITEX Management, Inc.
("ORBITEX"), 410 Park Avenue, New York, N.Y. 10022 to serve as the investment
adviser to the Fund for an interim period of up
6
<PAGE>
to 120 days. The Board also recommended that shareholders approve (at a meeting
to be called to consider this proposal) a tax-free reorganization of the Fund as
a new series of an existing fund managed by ORBITEX.
ORBITEX is a registered investment adviser under the Investment Advisers Act
of 1940, as amended. ORBITEX is currently organized as a New York corporation.
ORBITEX is affiliated with ORBITEX Management Ltd., a Canadian corporation and
investment adviser, which provides investment services to individuals and
institutions including Canadian unit trusts. ORBITEX is a majority-owned
subsidiary of Capital Management Ltd., a Bahamian corporation and an investment
management firm. Mr. Thomas Bachmann is the sole controlling person of Capital
Management Ltd. ORBITEX is the parent corporation of ORBITEX Capital Strategies,
Inc., an investment adviser. ORBITEX acts as investment adviser to the ORBITEX
Group of Funds, a U.S. registered investment company. As of April 6, 1999,
ORBITEX, its subsidiary ORBITEX Capital Strategies, Inc. and its affiliate
ORBITEX Management Ltd. have an aggregate of approximately $1.2 billion in
investment company and other portfolio assets under management.
Courtney D. Smith is the Portfolio Manager for the Fund and assumed primary
responsibility for the day-to-day management of the Fund's portfolio on March 1,
1999. Mr. Smith joined ORBITEX in 1996. Formerly, commencing in 1990, he was
President and Chief Investment Officer of Pinnacle Capital Management, Inc.,
which provides managed futures accounts. Commencing in 1993, he was also
President and Chief Executive Officer of Quantum Financial Services, Inc., a
futures and stock brokerage firm. Mr. Smith also manages the Orbitex Growth
Fund.
Under an interim Investment Management Agreement dated as of February 28,
1999 (the "Agreement") between the Fund and ORBITEX, which is effective for no
more than 120 days pending a shareholder meeting and vote regarding a new
investment management agreement, ORBITEX is entitled to receive a monthly fee at
an annual rate of 0.08% of the Fund's average daily net assets for services
provided to the Fund. On February 28, 1999, the Fund replaced the Fund's
previous investment adviser with ORBITEX. The Fund's previous investment adviser
had served as its investment adviser since the Fund commenced operations on
March 4, 1991. For the fiscal year ended 1998, pursuant to a fee waiver and
expense reimbursement agreement, the Fund's previous investment adviser waived
all of its management fees of $26,302 and reimbursed the Fund for certain
expenses.
SHAREHOLDER INVESTMENT ACCOUNTS
BUYING SHARES
You may purchase shares of the Fund without any sales charge directly from
the Fund or through an investment adviser, financial planner, broker, dealer or
other investment professional. You may buy shares at the Fund's Net Asset Value
("NAV"), next computed after the close of business (currently 4:00 pm Eastern
time) each day that the New York Stock Exchange ("NYSE") is open. The NAV is
determined by dividing the value of the Fund's securities, cash and other
assets, minus all expenses and liabilities, by the number of shares outstanding.
The Fund's securities are valued each day at their market value, which usually
means the last quoted sale price on the security's principal exchange on that
day. The Fund reserves the right to reject (and will return) large purchase
orders it receives after 3:00 p.m. for purchases on that
day.
The following chart shows the minimum investments required to open an
account:
<TABLE>
<CAPTION>
MINIMUM
MINIMUM INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENT INVESTMENT
- ------------------------------------------------------------------------- ----------------- -------------
<S> <C> <C>
Regular Accounts......................................................... $ 1,000 $ 100
Automatic Investment Plan................................................ $ 1,000 $ 100
Regular, Spousal, Roth and Educational IRAs+............................. $ 500 $ 100
</TABLE>
7
<PAGE>
Only investments in U.S. dollars are accepted. Third party checks are not
acceptable. A fee may be charged for a check that does not clear and the Fund
reserves the right to refuse any investment.
- ------------------------
+ For IRA accounts--Please call us at 1-800-333-4276 to obtain the required
forms to establish any of the IRAs currently available.
SHARE EXCHANGE PRIVILEGE--
You may exchange shares you own (minimum, $2,500 initial, $100 per
subsequent investment) for shares of the Flex-Funds Money Market Fund, provided
such shares are offered in your state of residence. The exchange request may be
made by phone or by mail. Be sure to obtain and read the current prospectus of
the Flex-Funds Money Market Fund before you make the exchange. All new accounts
resulting from a share exchange will be subject to the same privileges as your
original account. Currently, there is no charge applicable for share exchanges.
Such exchange of shares, however, is considered a taxable event for IRS
purposes. The Fund may change, discontinue or temporarily suspend this exchange
privilege during unusual market conditions or upon 60 days' notice to
shareholders.
AUTOMATIC INVESTMENT PLAN--
Shareholders may elect to automatically make investments in the Fund ($100
minimum per transaction) by completing the section of the account application
for this purpose. There is no charge for this service. However, the transfer
agent will impose a fee if sufficient funds are not available in your account at
the time of the automatic transaction.
ACCOUNT STATEMENTS AND REPORTS--
Every Shareholder will receive an account statement that describes
transactions processed in an account. In addition, every Shareholder will
receive a statement whenever the Fund declares a dividend or distribution.
Shareholders will also receive a year-end statement providing information for
tax purposes as well as Annual and Semi-Annual Reports for the Fund.
8
<PAGE>
HOW TO OPEN AN ACCOUNT--
<TABLE>
<CAPTION>
NEW ACCOUNTS ADD TO EXISTING ACCOUNTS
<S> <C>
In Writing:
On the investment slip, fill in the
Complete and sign the application amount you are enclosing, write
and mail the application along with your account number on your check
your check to: and mail to:
ASM INDEX 30 FUND, INC.
c/o Mutual Funds Service Co., Inc.
P. O. Box 7177, 6000 Memorial Drive
Dublin, OH 43017
By Phone--Federal Funds Wire:
Call first to obtain an account
number. Complete the required
information on the application and Instruct your bank to send your
mail it to the above address. investment by wire as follows:
Instruct your bank to wire your
investment to:
Star Bank, N.A., Cinti/Trust, ABA # 0420-0001-3
Attn: ASM Index 30 Fund, Inc., Credit Account # 480389436
Name(s) of registered Shareholder(s)
Personal Account Number (Your ASM Index 30 Fund, Inc. account number)
Automatically:
Complete the required information
on the application and send it with Call us to request the appropriate
your initial investment to: forms and instructions.
ASM INDEX 30 FUND, INC.
c/o Mutual Funds Service Co., Inc.
P. O. Box 7177, 6000 Memorial Drive
Dublin, OH 43017
</TABLE>
SELLING SHARES
You may sell shares of the Fund that you own back to the Fund at any time.
The price per share will be the next NAV determined after your request is
accepted in good order by the Fund's transfer agent. Good order means that a
written request must be signed by the shareholder(s) and, when required, the
signature(s) must be guaranteed by an eligible guarantor institution (a bank,
broker-dealer, credit union, securities exchange, clearing agency or savings
association). A request for a sale of shares will be processed promptly and you
can generally expect to receive a check for the proceeds within a week (7 days).
You may redeem by telephone up to 3:00 p.m. EST. You may redeem shares only on
days when the NYSE is open, which is normally weekdays except for certain
holidays. Currently, the NYSE observes the following holidays: New Year's Day,
Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
9
<PAGE>
HOW TO SELL YOUR SHARES--
<TABLE>
<CAPTION>
IN WRITING: MAIL TO:
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Send a written letter of instruction signed by all
registered owners indicating:
Your name(s) on the account
Your Account number ASM Index 30 Fund, Inc.
The dollar amount or the number of shares you wish to c/o Mutual Fund Service Co., Inc.
sell How and where to send the proceeds (including P.O. Box 7177
signature guarantee(s) and other documentation, if 6000 Memorial Drive
required) Dublin, OH 43017
Please include signature(s) and other documentation, if
required.
</TABLE>
By Phone:
Call us at 1-800-333-4276 with your request and a check will be sent to the
address of record. All telephone calls are recorded for your protection and
reasonable procedures are taken to verify the identity of the caller (such as
providing your account number and taxpayer identification number). If such
measures are followed to ensure against unauthorized transactions, the Fund,
ORBITEX and the Fund's Transfer Agent will not be responsible for any losses.
By Wire:
Call us at 1-800-333-4276 with your request and a federal funds wire will be
transmitted to your bank based on the information you gave us on your account
application.
Certain written requests to sell shares require a signature guarantee. A
signature guarantee is used to help protect you and the Fund from fraud. A
signature guarantee for all registered owners is required under the following
circumstances: redemptions of $25,000 or more, all requests where the address of
record on the account was changed within the last 30 days, and when the proceeds
are to be sent to a different payee or address of record.
You can obtain a signature guarantee from a bank, broker-dealer, credit
union, securities exchange, clearing agency, or savings association but not from
a notary public. Please call the Fund to learn if a signature guarantee is
needed or to make sure that it is completed appropriately in order to avoid any
processing delays.
ADDITIONAL INVESTMENT INFORMATION
The Fund reserves the right to make a "redemption in kind" (payment in
portfolio securities rather than cash) if the amount to be redeemed is large
enough to possibly affect Fund operations or if the redemption would otherwise
disrupt the Fund. For example, the Fund may redeem shares in-kind if the amount
represents more than 5% of the Fund's assets.
If you are selling shares recently purchased, payment of your proceeds may
be delayed until payment for those shares has been confirmed by the transfer
agent, but not in excess of 15 days.
PORTFOLIO TURNOVER
The Fund's portfolio turnover rate for each of the fiscal years ending
October 31, 1997 and 1998 was 265% and 196%, respectively. The Fund continues to
be invested almost entirely in equities. Almost all Fund portfolio turnover is a
result of purchases and sales of securities necessary for settlement of
purchases and redemptions of Fund shares requested by Fund shareholders and
stock splits of the portfolio
10
<PAGE>
securities held by the Fund. High portfolio turnover involves additional
brokerage expense and may involve increased tax consequences to the Fund and its
shareholders.
DISTRIBUTIONS AND TAXES
In general, Fund distributions are taxable to you as either ordinary income
or capital gains. This is true whether you reinvest your distributions in
additional shares of the Fund or receive them in cash. Any capital gains the
Fund distributes are taxable to you as long-term capital gains no matter how
long you have owned your shares.
Every January you will receive a statement that shows the tax status of
distributions you received for the previous year. Distributions declared in
October, November and December but paid in January are taxable as if they were
paid in December.
When you sell your shares of the Fund, you may have a capital gain or loss.
For tax purposes, an exchange of your shares of the Fund for shares of The
Flex-Funds Money Market Fund is the same as a sale. The individual tax rate on
any gain from the sale or exchange of your shares depends on how long you have
held your shares.
By law, the Fund must withhold 31% of your taxable distributions and
proceeds if you do not provide your correct taxpayer identification number
(TIN), or certify that your TIN is correct, or if the IRS instructs the Fund to
do so.
Fund distributions and gains from the sale or exchange of your shares will
generally be subject to state and local income tax. Non-U.S. investors may be
subject to U.S. withholding and estate tax. YOU SHOULD CONSULT WITH YOUR TAX
ADVISER ABOUT THE FEDERAL, STATE, LOCAL OR FOREIGN TAX CONSEQUENCES OF YOUR
INVESTMENT IN THE FUND.
YEAR 2000
As with other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by its service providers do not properly process and
calculate data-related information on or after January 1, 2000. This is commonly
referred to as the "Year 2000 Issue." The Fund is taking steps to obtain
satisfactory assurances that the Fund's major service providers are taking steps
reasonably designed to address the Year 2000 Issue with respect to the computer
systems that such service providers use. There can be no assurance that these
steps will be sufficient to avoid any adverse impact on the business of the
Fund. ORBITEX has reviewed the types of securities and debt obligations held as
investments by the Fund to determine the impact of the Year 2000 Issue on the
returns and relative safety of principal of such securities and debt
obligations. Based on this review, ORBITEX does not believe the Year 2000 Issue
poses any substantial risk for such returns and safety of principal.
RECENT DEVELOPMENTS
The appointment of ORBITEX as the Fund's investment adviser was approved by
the Board to assure continuity of management upon the termination of the
previous adviser as of the close of business on February 28, 1999. The Board has
also proposed that shareholders approve a tax-free reorganization of the Fund
with another fund advised by ORBITEX.
LEGAL PROCEEDINGS
On February 8, 1999, a suit was filed in the Thirteenth Judicial Circuit
Court, Hillsborough County, Florida, against Steven H. Adler, a former director
and officer of the Fund, Vector Index Advisors, Inc., the former investment
adviser of the Fund, and the Fund, alleging that the former director and officer
of the Fund failed to invest in the Fund amounts purportedly paid by the
plaintiffs to the former investment
11
<PAGE>
adviser of the Fund. The relief sought is the recovery of the investment amounts
and interest thereon, additional general, consequential and incidental damages,
legal costs and disbursements, and declaratory and injunctive relief to preclude
the Fund from transferring or permitting the dissipation of its assets. With the
possible exception of the former director and officer of the Fund, the Fund had
no knowledge that the amounts purportedly paid by the plaintiffs to the former
investment adviser were, as the plaintiffs have alleged, to be invested in the
Fund. The Fund and its counsel are investigating this matter and the possibility
that other unasserted claims or improprieties exist. At the present time, the
liability of the Fund, if any, is not readily determinable.
12
<PAGE>
FINANCIAL HIGHLIGHTS
The table below provides details of the Fund's performance for the fiscal
years ended October 31 from 1994 to the present. Certain information reflects
financial results for a single Fund share. The line at the end of the first
section, "Total Return", shows the actual performance results experienced by the
Fund for each period and the percentage by which an investment in the Fund would
have increased (or decreased), assuming all dividends and distributions were
reinvested each year. All of these figures were audited by the Fund's
independent auditors, PricewaterhouseCoopers LLP, or other accounting firms
previously engaged by the Fund. The report of PricewaterhouseCoopers LLP, for
the most recent fiscal year and the Fund's financial statements, are included in
the Fund's Statement of Additional Information, which is available upon request.
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
-----------------------------------------------------
1998 1997 1996 1995(A) 1994(A)
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR......................... $ 17.21 $ 14.13 $ 11.37 $ 9.78 $ 10.07
INVESTMENT OPERATIONS:
Net investment income.................................. 0.32 0.18 0.08 0.00 0.56
Net gains (losses) from investments (realized and
unrealized).......................................... 2.54 3.34 2.76 1.77 (0.16)
--------- --------- --------- --------- ---------
Total from investment operations......................... 2.86 3.52 2.84 1.77 0.40
--------- --------- --------- --------- ---------
DISTRIBUTIONS:
From net investment income............................. (0.27) (0.18) (0.07) (0.05) (0.52)
In excess of net investment income..................... 0.00 (0.11) (0.01) (0.13) 0.00
From net realized gains................................ (0.78) (0.15) 0.00 0.00 0.00
Tax return of capital.................................. 0.00 0.00 0.00 0.00 (0.17)
--------- --------- --------- --------- ---------
Total Distributions...................................... (1.05) (0.44) (0.08) (0.18) (0.69)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF YEAR............................. $ 19.02 $ 17.21 $ 14.13 $ 11.37 $ 9.78
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
TOTAL RETURN............................................. 17.13% 25.18% 25.01% 18.10% 3.97%
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000).......................... $ 29,535 $ 21,127 $ 9,315 $ 9,704 $ 7,277
Ratio of expenses to average net assets*............... 0.18% 0.42% 1.86% 3.01%** 0.75%
Ratio of net investment income to average net
assets*.............................................. 1.60% 1.51% 0.53% 0.04% 2.17%
Portfolio turnover rate***............................. 196% 265% 391% 340% 1193%
</TABLE>
- ------------------------
* Ratios are presented net of fees voluntarily reduced. If such voluntary fee
reductions had not occurred, the ratios would have been as follows: ratio of
expenses to average net assets would have been 0.91%, 1.05%, 2.59%, 5.77%
and 2.94% for 1998, 1997, 1996, 1995, and 1994, respectively; ratio of net
investment income (loss) to average net assets would have been 0.87%, 0.88%,
(0.20%), (2.72%) and (0.02%) for 1998, 1997, 1996, 1995 and 1994,
respectively. As a result of certain tax adjustments necessitated by the
Fund's failure to qualify as a regulated investment company for the years
ended October 31, 1995 and 1994, as well as other adjustments, the gross
expense ratios previously reported for these periods have been restated.
** Includes $50,460 of interest expense not subject to the expense
reimbursement agreement.
*** The Fund continues to be as fully invested in equities as possible.
Therefore, portfolio turnover is higher than most equity mutual funds
because purchases and sales of portfolio securities are necessary for
settlement of transactions requested by Fund shareholders and stock splits
by the companies in the DJIA require the Fund to purchase and sell portfolio
securities to maintain the Fund's investment in an equal number of shares of
such companies.
(a) Audited by predecessor auditor.
13
<PAGE>
[LOGO]
A Statement of Additional Information ("SAI") contains additional
information about the Fund and is incorporated by reference into this
Prospectus. The Fund's Annual and Semi-Annual Reports to shareholders contain
additional information about the Fund's investments. In the Fund's Annual
Report, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during the last
fiscal year.
You may obtain a free copy of these documents, or make other shareholder
inquiries, by calling or writing the Fund:
BY TELEPHONE: 1-800-333-4276
BY MAIL: ASM Index 30 Fund, Inc.
410 Park Avenue
18th Floor,
New York, NY 10022
ASM Index 30 Fund, Inc.
c/o Mutual Funds Service Co., Inc.
6000 Memorial Drive
P. O. Box 7177
Dublin, OH 43017
You may review and copy the SAI and other information about the Fund by
visiting the Securities and Exchange Commission's Public Reference Room in
Washington, D.C. or by visiting the Commission's Internet site at
http://www.sec.gov. Copies of this information may also be obtained, upon
payment of a duplicating fee, by writing to the Public Reference Section of the
Commission, Washington, D.C. 20549-6009. You may call the Commission at
1-800-SEC-0330 for information about the operation of the public reference room.
(Investment Company Act File No. 811-6187)
<PAGE>
ASM INDEX 30 FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
APRIL 24, 1999
This Statement of Additional Information ("SAI") relates to the ASM Index 30
Fund, Inc., (the "Fund") which is a registered open-end management investment
company, commonly known as a mutual fund. This SAI is not a prospectus and
should be read in conjunction with the prospectus of the Fund dated April 24,
1999. You may obtain the prospectus by calling 1-800-333-4276 or by writing to
the Fund at:
ASM INDEX 30 FUND, INC.
410 Park Avenue
18th Floor,
New York, NY 10022
ASM INDEX 30 FUND, INC.
c/o Mutual Funds Service Co., Inc.
6000 Memorial Drive
P. O. Box 7177
Dublin, OH 43017
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
Fund History 3
Description of the Fund and Its
Investments and Risks 3
Investment Restrictions 5
Portfolio Turnover 6
Management of the Fund 7
Control Persons and Principal Holders of Securities 9
Investment Advisory and Other Service Providers 10
Brokerage Allocation and Other Practices 12
Capital Stock 13
Purchases, Redemptions and
Pricing of Shares 13
Taxation of the Fund 14
Underwriters 15
Calculation of Performance Data 15
Financial Statements 18
Appendix A - Standard & Poor's
Bond Ratings 31
Appendix B - Moody's Bond Ratings 32
</TABLE>
<PAGE>
FUND HISTORY
The Fund was organized in the State of Maryland on April 25, 1990. The Fund is a
diversified, open-end management investment company.
It is not contemplated that regular annual meetings of shareholders will be
held. There normally will be no meetings of shareholders for the purpose of
electing directors unless and until such time as less than a majority of the
directors holding office have been elected by shareholders, at which time the
directors then in office will call a shareholders' meeting for the election of
directors. The Fund has undertaken to afford shareholders certain rights,
including the right to call a meeting of shareholders for the purpose of voting
on the removal of one or more directors. Such removal can be effected upon the
action of two-thirds of the outstanding shares of the Fund. The directors are
required to call a meeting of shareholders for the purpose of voting on the
question of removal of any director when requested in writing to do so by
shareholders of record of not less than 10% of the Fund's outstanding shares. In
addition, ten of the Fund's shareholders holding the lesser of $25,000 worth or
one percent of the Fund's shares may advise the directors in writing that they
wish to communicate with other shareholders for the purpose of requesting a
meeting to remove a director. The directors will then, if requested by the
Applicants, mail at the Applicants' expense the Applicants' communication to all
other shareholders.
DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS
The following information supplements the discussion of the Fund's investment
objectives and policies.
The investment objective of the Fund is to provide total return through a
combination of capital appreciation and current income. The Fund's principal
investment strategies are described in the Fund's prospectus.
SHORT-TERM INVESTMENTS
With respect to no more than 5% of the Fund's total assets, the Fund may invest
in the following:
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund purchases a security
from a bank or recognized securities dealer and simultaneously commits to resell
that security to the bank or dealer at an agreed-upon date and price reflecting
a market rate of interest unrelated to the coupon rate or maturity of the
purchased security. The Fund maintains custody of the underlying securities
prior to their repurchase; thus the obligation of the bank or dealer to pay the
repurchase price on the date agreed to is, in effect, secured by such underlying
securities. If the value of such securities is less than the repurchase price,
the other party to the agreement will provide additional collateral so that at
all times the collateral is at least equal to the repurchase price.
3
<PAGE>
Although repurchase agreements carry certain risks not associated with direct
investments in securities, the Fund intends to enter into repurchase agreements
only with banks and dealers believed by ORBITEX Management, Inc. (the "Adviser")
to present minimum credit risks in accordance with guidelines established by the
Board. The Adviser will review and monitor the creditworthiness of such
institutions under the Board's general supervision. To the extent that the
proceeds from any sale of collateral upon a default in the obligation to
repurchase were less than the repurchase price, the Fund would suffer a loss. If
the other party to the repurchase agreement petitions for bankruptcy or
otherwise becomes subject to bankruptcy or other liquidation proceedings, there
might be restrictions on the Fund's ability to sell the collateral and the Fund
could suffer a loss. However, with respect to financial institutions whose
bankruptcy or liquidation proceedings are subject to the U.S. Bankruptcy Code,
the Fund intends to comply with provisions under such Code that would allow it
immediately to resell the collateral.
COMMERCIAL PAPER
The Fund may invest in commercial paper which are short-term promissory notes
issued by companies to finance their, or their affiliates', current obligations.
The Fund may purchase only high quality obligations that the Adviser believes
present minimal credit risks. To be considered high quality, a security must be
(i) an obligation issued by the U.S. government; (ii) with respect to commercial
paper other than obligations issued by the U.S. government, rated in accordance
with applicable rules in one of the two highest rating categories for short-term
obligations by at least two nationally recognized statistical rating
organizations (each referred to as an "NRSRO") (or by one NRSRO, if only one has
rated the security); or (iii) if unrated, judged by the Adviser to be of
equivalent quality to short-term obligations rated in one of the two highest
rating categories for short-term obligations by at least two NRSROs. The rating
categories of two NRSROs are included in Appendices to this SAI.
U.S. GOVERNMENT SECURITIES AND OBLIGATIONS
The Fund may invest in U.S. government securities, which include direct
obligations of the U.S. Treasury (such as U.S. Treasury bills, notes and bonds)
and obligations directly issued or guaranteed by U.S. government agencies or
instrumentalities. Some obligations issued or guaranteed by agencies or
instrumentalities of the U.S. government are backed by the full faith and credit
of the U.S. government (such as Government National Mortgage Association bonds),
others are backed only by the right of the issuer to borrow from the U.S.
Treasury (such as securities of Federal Home Loan Banks), and others are backed
only by the credit of the instrumentality.
EURODOLLAR BANK OBLIGATIONS
The Fund may invest in Eurodollar bank obligations that the Adviser believes
present minimal credit risks. Eurodollar bank obligations are dollar-denominated
certificates of deposit or time deposits issued outside the U.S. capital markets
by foreign branches of U.S. banks and by foreign banks. The Eurodollar bank
obligations are subject to certain sovereign risks. One such risk is the
possibility that a foreign government might prevent dollar-denominated funds
from flowing across its borders. Other risks include: adverse political and
economic developments in a foreign
4
<PAGE>
country; the extent and quality of government regulation of financial markets
and institutions; the imposition of foreign withholding taxes; and expropriation
or nationalization of foreign issuers.
STAR TREASURY FUND SHARES
The Fund may also invest in shares of the Star Treasury Fund. Star Treasury Fund
is a series of a Massachusetts business trust registered as an open-end
investment management company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and is managed by the Fund's custodian, Star Bank. The
Fund's investments in such shares shall be limited to investments pursuant to
sweep arrangements for the overnight investment of assets of the Fund that are
not otherwise invested at the end of a given day.
INVESTMENT RESTRICTIONS
The Fund has adopted the following restrictions (in addition to those indicated
in its prospectus) as fundamental policies, which may not be changed without the
favorable vote of the holders of a "majority," as defined in the 1940 Act, of
the Fund's outstanding voting securities. Under the 1940 Act, the vote of the
holders of a majority of a Fund's outstanding voting securities means the vote
of the holders of the lesser of (i) 67% of the shares of the Fund represented at
a meeting at which the holders of more than 50% of its outstanding shares are
Represented or (ii) more than 50% of the outstanding shares.
The Fund may not:
1. Purchase securities on margin, except such short-term credits as may be
necessary for the clearance of transactions.
2. Make short sales of securities or maintain a short position.
3. Issue senior securities, borrow money or pledge its assets, except that the
Fund may borrow on an unsecured basis from banks for temporary or emergency
purposes or for the clearance of transactions in amounts not exceeding 10%
of its total assets (not including the amount borrowed) and will not make
investments while borrowings in excess of 5% of the value of the Fund's
total assets are outstanding.
4. Buy or sell commodities or commodity futures contracts, or buy or sell real
estate, real estate limited partnership interests or other interests in
real estate (although it may purchase and sell securities which are secured
by real estate and securities of companies which invest or deal in real
estate).
5. Make loans (except for purchases of publicly-traded debt securities
consistent with the Fund's investment policies).
6. Make investments for the purpose of exercising control or management.
7. Act as underwriter (except to the extent the Fund may be deemed to be an
underwriter in connection with the sale of securities in the Fund's
investment portfolio).
5
<PAGE>
8. Invest 25% or more of its total assets (calculated at the time of purchase
and taken at market value) in any one industry.
9. As to 75% of the value of its total assets, invest more than 5% of the
value of its total assets in the securities of any one issuer (other than
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities), or purchase more than 10% of all outstanding voting
securities of any one issuer.
The Fund observes the following restrictions as a matter of operating but not
fundamental policy, pursuant to positions taken by federal and state regulatory
authorities:
The Fund may not:
10. Purchase any security if as a result the Fund would then hold more than 10%
of any class of securities of an issuer (taking all common stock issues as
a single class, all preferred stock issues as a single class, and all debt
issues a single class).
11. Invest in securities of any issuer if, to the knowledge of the Fund, any
officer or director of the Fund or of the Adviser owns more than 1/2 of 1%
of the outstanding securities of such issuer, and such directors who own
more than 1/2 of 1% own in the aggregate more than 5% of the outstanding
securities of such issuer.
12. Invest more than 5% of the value of its net assets in warrants (included in
that 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 or American Stock
Exchange).
13. Invest in any security if as a result the Fund would have more than 5% of
its total assets invested in securities of companies which together with
any predecessor have been in continuous operation for fewer than three
years.
14. Invest in oil, gas or mineral related programs, partnerships or leases.
The Fund and the Adviser have informally adopted guidelines of the staff of the
U.S. Securities and Exchange Commission limiting the value of the Fund's
investments in illiquid investments to no more than 15% of the Fund's net asset
value. Illiquid investments are generally investments for which market
quotations are not readily available or that the Fund could not sell or dispose
of in the ordinary course of business within seven calendar days at
approximately the price at which the Fund has valued the investment. Because the
Fund has a policy of investing at least 95% of the Fund's assets in the equity
securities of 30 large capitalization companies trading on the New York Stock
Exchange and its other investments are generally not illiquid, it is unlikely
that the Fund would ever approach exceeding this limitation.
PORTFOLIO TURNOVER
The Fund's portfolio turnover rate for each of the fiscal years ending October
31, 1997 and 1998 was 265% and 196%, respectively. The Fund continues to be
almost entirely invested in equities. Almost all Fund portfolio turnover is a
result of purchases and sale of securities necessary for settlement of purchases
and redemptions requested by Fund shareholders and stock splits of the portfolio
securities held by the Fund. High portfolio turnover involves additional
6
<PAGE>
brokerage expense and may involve increased tax consequences to the Fund and its
shareholders. See "Taxation of the Fund" below.
MANAGEMENT OF THE FUND
The overall management of the business and affairs of the Fund is vested with
its Board of Directors (the "Board"). The Board approves all significant
agreements between the Fund and persons or companies furnishing services to it,
including the Fund's agreement with its Adviser, Custodian, Transfer Agent,
Accounting and Administrative providers. The day to day operations of the Fund
are delegated to its officers, subject to the investment objectives and policies
of the Fund and to general supervision by the Board. The directors and officers
of the Fund and of the Adviser, their age, business addresses and principal
occupations during the past five years are:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
DIRECTORS & OFFICERS POSITION WITH FUND THE PAST 5 YEARS
-------------------- ------------------ ----------------
<S> <C> <C>
W. Keith Schilit Director; Chair, Audit Faculty Member, Univ. of South
Age 44 Committee Florida;
Catalyst Ventures President, Catalyst Ventures
4928 Bay Way Drive (Venture capital and
Tampa, FL 33629 consulting).
Daniel Calabria, Director Retired; formerly Executive
Age 62 Vice President, Wm. R. Hough &
7068 So. Shore Drive So. Co. (mutual funds); formerly
South Pasadena, FL 33707 President, Templeton Fund
Management Corp. (mutual
funds); Trustee, IDEX Mutual
Funds (mutual funds); Trustee,
Florida Tax-Free Funds (mutual
funds).
Jerome P. Feltenstein, Director President, American Business
Age 64 Associates, Inc. (umbrella
61 Mimosa Drive manufacturer).
Cos Cob, CT 06807
Arthur Salzfass, Director Consultant, Micro Info; (computer
Age 64 consulting) Director, SBM Inc.;
98 Paulding Drive President, Rutledge Books, Inc.
Chappaqua, NY 10514 (publishing); Chief Operating
Officer, Honi-Corp,
Inc. (computer software); Chief
Executive Officer and
President, U.S. Fibercom, Inc.
(international telephone service
company).
M. Fyzul Khan (1), (2) Acting Chief Executive Legal Counsel and 1940 Act
Age 27 Officer; Compliance Officer Compliance Officer, and
and Secretary currently Corporate Secretary,
of the Adviser, March 1998 to
present; Corporate Secretary of
ORBITEX Group of Funds
(investment adviser); formerly
in-house attorney at CIBC
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
DIRECTORS & OFFICERS POSITION WITH FUND THE PAST 5 YEARS
-------------------- ------------------ ----------------
<S> <C> <C>
Oppenheimer from August 1997 to
March 1998 (hedge fund); and
law student at Widener
University School of Law from
September 1994 to June 1997.
Keith D. Kemp (1), (3) Acting Chief Financial Vice President of Operations of
Officer the Adviser, 1999 to present; formerly,
Vice President of Mutual Fund
Accounting and Administration, The
Bank of New York from 1998 to 1999
(banking); formerly, Senior Manager,
Forum Financial Group from 1996 to
1998 (investment services); and formerly,
Business Unit Controller and Assistant
Treasurer, First Data Investor Services
Group from 1992 to 1996 (investment services).
</TABLE>
(1) Interested person of the Fund under the 1940 Act.
(2) On March 6, 1999, the Board acted to appoint M. Fyzul Khan as the only
officer of the Fund beginning on April 1, 1999. On April 12, 1999, the Board
acted to appoint M. Fyzul Khan as the Acting Chief Executive Officer
beginning on April 12, 1999.
(3) On April 12, 1999, the Board acted to appoint Keith D. Kemp as the Acting
Chief Financial Officer beginning on April 12, 1999.
THE FOLLOWING TABLE SHOWS THE COMPENSATION PAID BY THE FUND TO THE DIRECTORS OF
THE FUND DURING THE FISCAL YEAR ENDED OCTOBER 31, 1998:
COMPENSATION TABLE
<TABLE>
<CAPTION>
- ------------------------------ ---------------- -------------------- -------------- ------------------
PENSION OR ESTIMATED TOTAL
RETIREMENT ANNUAL COMPENSATION
AGGREGATE BENEFITS ACCRUED BENEFITS FROM FUND AND
COMPENSATION AS PART OF FUND UPON FUND COMPLEX
NAME OF PERSON, POSITION FROM FUND EXPENSES RETIREMENT PAID TO DIRECTORS
- ------------------------------ ---------------- -------------------- -------------- ------------------
<S> <C> <C> <C> <C>
Steven H. Adler* Former None None None None
President
W. Keith Schilit, Director $5,500 None None $5,500
Daniel Calabria, Director $5,500 None None $5,500
Jerome P. Feltenstein, $5,500 None None $5,500
Director
Arthur Salzfass, Director $5,500 None None $5,500
</TABLE>
The Fund pays fees of $4,000 per year plus $500 for each meeting attended by
directors who are not "interested persons" of the Fund. Such directors are
reimbursed for any expenses incurred in attending meetings.
* In connection with the termination of Vector Index Advisors, Inc. ("Vector")
as investment adviser of the Fund, the Board of the Fund accepted as of February
28, 1999, the resignation of Steven H. Adler, Chairman and Present of Vector as
a director and officer of the Fund.
8
<PAGE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
(a) As of April 9, 1999, there were no control persons of the Fund.
(b) Principal Holders
As of April 9, 1999, the following persons held of record 5% or more of the
outstanding shares of common stock of the Fund:
<TABLE>
<CAPTION>
NAME & ADDRESS % OWNERSHIP
-------------- -----------
<S> <C>
Donaldson Lufkin & Jenrette 6.3%
Pershing Division
P.O. Box 2052
Jersey City, NJ 7303-2052
National Financial Services Corp. 12.5%
Church Street Station, 5th Floor
P.O. Box 3908
New York, NY 10008-3908
National Investor Services 7.8%
For the Exclusive Benefit of Our Customers
55 Water Street
New York, NY 10041
FTC & Co. 17.1%
Attn: Datalynx
House Account
P.O. Box 173736
Denver, CO 80217-3736
</TABLE>
As of April 9, 1999, the officers and directors of the Fund owned less than 1%
of the Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
THE MANAGEMENT AGREEMENT
Subject to the supervision of the Board, current investment advisory and
management services are provided to the Fund by ORBITEX Management, Inc., (the
"Adviser") pursuant to an Investment Management Agreement dated as of February
28, 1999 (the "Agreement").
9
<PAGE>
The Agreement was approved by the Board and by a majority of the directors who
neither are interested persons of the Fund nor have any direct or indirect
financial interest in the Agreement or any other agreement related thereto
("Independent Directors") on February 26, 1999. The Agreement will continue in
effect until the earlier of July 1, 1999 or the vote of shareholders either
approving or disapproving a new management agreement with the Adviser.
Under the Agreement, the Adviser provides a continuous investment program for
the Fund and makes decisions and places orders to buy, sell or hold particular
securities. The Adviser also supervises all matters relating to the operation of
the Fund and obtains for it corporate officers, clerical staff, office space,
equipment and services. Under the Agreement, the Adviser is entitled to receive
a monthly fee at an annual rate of 0.08 of 1% of the Fund's average daily net
assets for services provided to the Fund. In addition to the fee payable to the
Adviser, the Fund is responsible for its operating expenses, including: (i)
interest and taxes; (ii) brokerage and futures commissions; (iii) insurance
premiums; (iv) compensation and expenses of Directors other than those
affiliated with the Adviser; (v) legal and audit expenses; (vi) fees and
expenses of the custodian, shareholder, service or transfer agent; (vii) fees
and expenses for registration or qualification of the Fund and its shares under
federal or state securities laws; (viii) expenses of preparing, printing and
mailing reports and notices and proxy material to shareholders; (ix) other
expenses incidental to holding any shareholder meetings; (x) dues or assessments
of or contributions to the Investment Company Institute or any successor; and
(xi) such non-recurring expenses as may arise, including litigation affecting
the Fund and the legal obligations with respect to which the Fund may have to
indemnify its officers and Directors.
The Adviser will not continue the waiver of fees and reimbursement of expenses
arrangements that the previous investment adviser had with the Fund.
For the fiscal year ended 1998, the Fund's previous adviser waived fees and
reimbursed the Fund for expenses in the amount of $242,280 which included
management fees of $26,302. For fiscal years ended 1996 and 1997 the previous
adviser was not entitled to any fees, and reimbursed the Fund for expenses in
the amount of $89,199 and $180,781, respectively.
Under the terms of the Agreement, the Adviser will continue to use the
administrative services of the present administrator for the Fund. The services
provided under the Agreement are subject to the supervision of the officers and
directors of the Fund, and include the day-to-day administration of matters
related to the corporate existence of the Fund, maintenance of its records,
preparation of reports, and assistance in the preparation of the Fund's
registration statements under Federal and state laws. In addition to the duties
described in the Prospectus, the Adviser, in furtherance of such duties and
responsibilities, is authorized in its discretion to engage in the following
activities on behalf of the Fund: (i) develop a continuing program for the
management of the assets of each Fund; (ii) buy, sell, exchange, convert, lend,
or otherwise trade in portfolio securities and other assets; (iii) place orders
and negotiate the commissions for the execution of transactions in securities
with or through broker-dealers, underwriters, or issuers; (iv) prepare and
supervise the preparation of shareholder reports and other shareholder
communications; and (v) obtain and evaluate business and financial information
in connection with the exercise of its duties.
10
<PAGE>
The cost of distributing shares of the Fund is borne by the Adviser.
Unaffiliated registered broker-dealers act as, or will act as, distributors of
Fund shares at no cost to the Fund.
The Agreement is terminable by vote of the Board or by the holders of a majority
of the outstanding voting securities of the Fund at any time without penalty, on
60 days' written notice to the Adviser. The Agreement may also be terminated by
the Adviser on 60 days written notice to the Fund. On December 23, 1998, the
Board voted to approve the termination of the previous adviser effective at the
close of business on February 28, 1999. The previous adviser served as
investment adviser to the Fund until that date.
OTHER SERVICE PROVIDERS
PricewaterhouseCoopers LLP, 200 South Biscayne Boulevard, Suite 1900, Miami,
Florida 33131 has been chosen to be independent auditors for the Fund.
The Fund employs Mutual Funds Service Co., P.O. Box 7177, 6000 Memorial Drive,
Dublin, OH 43017 to provide fund administrative, accounting,
dividends/distributions paying agency and transfer agency services. For the
services provided, Mutual Funds Service Co., received $36,409, $52,791 and
$76,464 for 1996, 1997, and 1998, respectively.
In addition, Star Bank, N.A., located at 425 Walnut Street, Cincinnati, Ohio
45201, serves as the Fund's Custodian.
BROKERAGE ALLOCATION AND OTHER PRACTICES
The Agreement states that in connection with its duties to arrange for the
purchase and the sale of securities held in the portfolio of the Fund by placing
purchase and sale orders for the Fund, the Adviser shall select such
broker-dealers ("brokers") as shall, in its judgment, achieve the policy of
"best execution," i.e., prompt and efficient execution at the most favorable
securities price. In making such selection, the Adviser is authorized in the
Agreement to consider the reliability, integrity and financial condition of the
broker. The Adviser also is authorized by Agreement to consider whether the
broker provides research or statistical information to the Fund and/or other
accounts of the Adviser.
The Agreement states that the commissions paid to brokers may be higher than
another broker would have charged if a good faith determination is made by the
Adviser that the commission is reasonable in relation to the services provided,
viewed in terms of either that particular transaction or the Adviser's overall
responsibilities as to the accounts as to which it exercises investment
discretion and that the Adviser shall use its judgment in determining that the
amount of commissions paid are reasonable in relation to the value of brokerage
and research services provided and need not place or attempt to place a specific
dollar value on such services or on the portion of commission rates reflecting
such services. The Agreement provides that to demonstrate that such
determinations were in good faith, and to show the overall reasonableness of
commissions paid, the Adviser shall be prepared to show that commissions paid
(i) were for
11
<PAGE>
purposes contemplated by the Agreement; (ii) were for products or services
which provide lawful and appropriate assistance to its decision-making process;
and (iii) were within a reasonable range as compared to the rates charged by
brokers to other institutional investors as such rates may become known from
available information.
The research services discussed above may be in written form or through direct
contact with individuals and may include information as to particular companies
and securities as well as market, economic or institutional areas and
information assisting the Fund in the valuation of its investments. The research
which the Adviser receives for the Fund's brokerage commissions, whether or not
useful to the Fund, may be useful to it in managing the accounts of its other
advisory clients, if any. Similarly, the research received for the commissions
of such accounts may be useful to the Fund.
During the fiscal years ended October 31, 1996, 1997 and 1998, the Fund paid a
total of $124,142, $83,760 and $77,797 in brokerage commissions, respectively.
CAPITAL STOCK
The Fund is authorized to issue 1,000,000,000 shares of common stock, $.001 per
value (the "Common Stock"). Shares of the Fund, when issued, are fully
transferable and redeemable at the option of the holder. Shares are also
redeemable at the option of the Fund in certain circumstances as described in
the Fund's Prospectus under "Selling Shares." All Fund shares are equal as to
earnings assets and voting privileges. There are no conversion, preemption or
other subscription rights. Under the Fund's Articles of Incorporation, the Board
may authorize the creation of additional series of common stock, with such
preferences, privileges, limitations and voting and dividend rights as the Board
may determine. Each share of the Fund outstanding is entitled to share equally
in dividends and other distributions and in the net assets of the Fund on
liquidation. Accordingly, in the event of liquidation, each share of the Fund's
common stock is entitled to its portion of all the Fund's assets after all debts
and expenses have been paid. The shares of the Fund do not have cumulative
voting rights for the election of Directors.
PURCHASES, REDEMPTIONS AND PRICING OF SHARES
NET ASSET VALUE
The net asset value of the Fund's shares will fluctuate and is determined as of
the close of trading on the New York Stock Exchange ("NYSE") (currently 4:00
p.m. Eastern time) on each day the NYSE is open. The Fund is open for business
on days when the NYSE is open. Currently, the NYSE observes the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. However, the Exchange may close on days not included above.
The net asset value per share is computed by dividing the value of the
securities held by the Fund plus any cash or other assets (including interest
and dividends accrued but not yet received)
12
<PAGE>
minus all liabilities (including accrued expenses) by the total number of Fund
shares outstanding at such time.
Portfolio securities that are principally traded on a national securities
exchange are valued at their last sale on the exchange on which they are
principally traded prior to the close of the NYSE or, in the absence of recorded
sales, at their current bid price on such exchanges. Securities listed on the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
are valued at the last available sale price on NASDAQ prior to the time of
valuation. Securities that are principally traded in securities markets, but not
principally traded on securities exchanges or NASDAQ, are valued at the current
bid price prior to the close of the NYSE. Other securities and assets for which
market quotations are not readily available are valued at fair value as
determined in good faith using methods approved by the Board.
REDEMPTION IN KIND
If the Board determines that it would be detrimental to the best interests of
the remaining shareholders of the Fund to make payment wholly in cash, the Fund
may pay the redemption price in part by a distribution in kind of securities
from the portfolio of the Fund, in lieu of cash. The Fund has elected to be
governed by Rule 18f-1 under the 1940 Act pursuant to which the Fund is
obligated to redeem shares solely in cash up to the lesser of $250,000 or one
percent of the net asset value of the Fund during any 90 day period for any one
shareholder. Should redemptions by any shareholder exceed such limitation, the
Fund will have the option of redeeming the excess in cash or in kind. If shares
are redeemed In kind, the redeeming shareholder would incur brokerage costs in
converting the assets into cash.
TAXATION OF THE FUND
DISTRIBUTION OF NET INVESTMENT INCOME. The Fund receives income generally in the
form of dividends and interest on its investments. This income, less expenses
incurred in the operation of the Fund, constitutes the Fund's investment income
from which dividends may be paid to you. Any distributions by the Fund from such
income will be taxable to you as ordinary income, whether you take them in cash
or in additional shares. The Fund distributes dividends to you on a quarterly
basis.
DISTRIBUTIONS OF CAPITAL GAINS. The Fund may derive capital gains and losses in
connection with the sales or other dispositions of its portfolio securities.
Distributions from net short-term capital gains will be taxable to you as
ordinary income. Distributions from net long-term capital gains will be taxable
to you as long-term capital gain, regardless of how long you have held your
shares in the Fund. Any net capital gains realized by the Fund generally will be
distributed once each year, and may be distributed more frequently, if
necessary, in order to reduce or eliminate excise or income taxes on the Fund.
INFORMATION ON THE TAX CHARACTER OF DISTRIBUTIONS. The Fund will inform you of
the amount of your ordinary income dividends and capital gains distributions at
the time they are paid, and will advise you of their tax status for federal
income tax purposes shortly after the close of each calendar year. If you have
not held Fund shares for a full year, the Fund may designate and
13
<PAGE>
distribute to you as ordinary income or capital gain a percentage of income
that is not equal to the actual amount of such income earned during the period
of your investment in the Fund.
ELECTION TO BE TAXED AS A REGULATED INVESTMENT COMPANY. The Fund has elected to
be treated as a regulated investment company under Subchapter M of the Internal
Revenue Code, has qualified as such for its most recent fiscal year, and intends
to so qualify during the current fiscal year. As a regulated investment company,
the Fund generally pays no federal income tax on the income and gains it
distributed to you. The Board reserves the right not to maintain the
qualification of the Fund as a regulated investment company if it determined
such course of action to be beneficial to shareholders. In such case, the Fund
will be subject to federal, and possibly state, corporate taxes on its taxable
income and gains, and distributions to you will be taxed as ordinary dividend
income to the extent of the Fund's earnings and profits.
EXCISE TAX DISTRIBUTIONS REQUIREMENTS. To avoid federal excise taxes, the
Internal Revenue Code requires the Fund to distribute to you by December 31 of
each year, at a minimum, the following amounts: 98% of its taxable ordinary
income earned during the calendar year; 98% of its capital gain net income
earned during the twelve month period ending October 31; and 100% of any
undistributed amounts from the prior year. The Fund intends to declare and pay
these amounts in December (or in January that are treated by you as received in
December) to avoid these excise taxes, but can give no assurances that its
distributions will be sufficient to eliminate all taxes.
REDEMPTION OF FUND SHARES. Redemptions and exchanges of Fund shares are taxable
transactions for federal and state income tax purposes. If you redeem your Fund
shares, or exchange your Fund shares for shares of The Flex-Funds Money Market
Fund, the IRS will require that you report a gain or loss on your redemption or
exchange. If you hold your shares as a capital asset, the gain or loss that you
realize will be capital gain or loss and will be long-term or short-term,
generally depending on how long you hold your shares. Any loss incurred on the
redemption or exchange of shares held for six months or less will be treated as
a long-term capital loss to the extent of any long-term capital gains
distributed to you by the Fund on those shares.
All or a portion of any loss that you realize upon the redemption of your Fund
shares will be disallowed to the extent that you buy other shares in the Fund
(through reinvestment of dividends or otherwise) within 30 days before or after
your share redemption. Any loss disallowed under these rules will be added to
your tax basis in the new shares you buy.
DIVIDENDS-RECEIVED DEDUCTION FOR CORPORATIONS. As a corporate shareholder, you
should note that 19.6% of the dividends paid by the Fund for the most recent
fiscal year qualified for the dividends-received deduction. You will be
permitted in some circumstances to deduct these qualified dividends, thereby
reducing the tax that you would otherwise be required to pay on these dividends.
The dividends-received deduction will be available only with respect to
dividends designated by the Fund as eligible for such treatment. All dividends
(including the deducted portion) must be included in your alternative minimum
taxable income calculations.
UNDERWRITERS
14
<PAGE>
The costs of distributing shares of the Fund is borne by the Adviser.
Unaffiliated registered broker-dealers act as, or will act as, distributors of
Fund shares at no cost to the Fund.
CALCULATION OF PERFORMANCE DATA
From time to time the Fund may quote its average annual total return
("standardized return") in advertisements or promotional materials.
Advertisements and promotional materials reflecting standardized return
("performance advertisements") will show percentage rates reflecting the average
annual change in the value of an assumed initial investment in the Fund of
$1,000 at the end of one, five and ten year periods. If such periods have not
yet elapsed, data will be given as of the end of a shorter period corresponding
to the duration of the Fund. Standardized return assumes the reinvestment of all
dividends and capital gain distributions.
The Fund also may refer in advertising and promotional materials to its yield.
The Fund's yield shows the rate of income that it earns on its investments,
expressed as a percentage of the net asset value of Fund shares. The Fund
calculates yield by determining the interest income it earned from its portfolio
investments for a specified thirty day period (net of expenses), dividing such
income by the average number of Fund shares outstanding, and expressing the
result as an annualized percentage based on the net assets value at the end of
that thirty day period. Yield accounting methods differ from the methods used
for other accounting purposes; accordingly, the Fund's yield may not equal the
dividend income actually paid to investors or the income reported in the Fund's
financial statements.
In addition to standardized return, performance advertisements may also include
other total return performance data ("non-standardized return").
Non-standardized return may be quoted for the same or different periods as those
for which standardized return is quoted and may consist of aggregate or average
annual percentage rate of return, actual year by year rates or any combination
thereof.
All data included in performance advertisements will reflect past performance
and will not necessarily be indicative of future results. The investment return
and principal value of an investment in the Fund will fluctuate, and an
investor's proceeds upon redeeming Fund shares may be more or less than the
original cost of the shares.
TOTAL RETURN. Average annual total return quotations used in the Fund's
advertising and promotional materials are calculated according to the following
formula:
n
P (1 + T) = ERV
Where:
P = a hypothetical initial payment of $1000.
15
<PAGE>
T = average annual total return.
n = the number of years.
ERV = the ending redeemable value at the end of the period of a hypothetical
$1,000 payment made at the beginning of the 1-, 5-, or 10-year periods at the
end of the 1-, 5-, or 10-year periods (or fractional portion).
Under the foregoing formula, the time periods used in advertising will be based
on rolling calendar quarters, updated to the last day of the most recent quarter
prior to submission of the advertising for publication. Average annual total
return, or "T" in the above formula, is computed by finding the average annual
compounded rates of return over the period that would equate the initial amount
invested to the ending redeemable value. Average annual total return assumes the
reinvestment of all dividends and distributions.
AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED OCTOBER 31, 1998
<TABLE>
<CAPTION>
FROM MARCH 4, 1991 TO
PAST ONE YEAR PAST 5 YEARS OCTOBER 31, 1998
------------- ------------ ----------------
<S> <C> <C>
17.13% 17.70% 12.29%
</TABLE>
YIELD. Annualized yield quotations used in the Fund's advertising and
promotional materials are calculated by dividing the Fund's interest income for
a specified thirty-day period, net of expenses, by the average number of shares
outstanding during the period, and expressing the result as an annualized
percentage (assuming semi-annual compounding) of the net asset value per share
at the end of the period. A portfolio's yield is a way of showing the rate of
income the portfolio earns on its investments as a percentage of the portfolio's
share price. Yield quotations are calculated according to the following formula:
6
YIELD = 2 [ ( a-b + 1 ) - 1 ]
--------
cd
Where
a = dividends and interest earned during the period.
b = expenses accrued for the period, net of reimbursements.
c = the average daily number of shares outstanding during the period that are
entitled to receive dividends.
d = the maximum offering price per share on the last day of the period.
16
<PAGE>
Except as noted below, in determining net investment income earned during the
period ("a" in the above formula), the Fund calculates interest earned on each
debt obligation held by it during the period by (1) computing the obligation's
yield to maturity, based on the market value of the obligation (including actual
accrued interest) on the last business day of the period or, if the obligation
was purchased during the period, the maturity by 360 and multiplying the
resulting quotient by the market value of the obligation (including actual
accrued interest). Once interest earned is calculated in this fashion for each
debt obligation held by the Fund, net investment income is then determined by
totaling all such interest earned.
For purposes of these calculations, the maturity of an obligation with one or
more call provisions is assumed to be the next date on which the obligation
reasonably can be expected to be called or, if none, the maturity date. For the
30-day period ended October 31, 1998, the yield of the Fund was 1.7625%.
OTHER INFORMATION. The Fund's performance data quoted in advertising and other
promotional materials represents past performance and is not intended to predict
or indicate future results. The return and principal value of an investment in
the Fund will fluctuate, and an investor's redemption proceeds may be more or
less than the original investment amount. In advertising and promotional
materials the Fund may compare its performance with data published by Lipper
Analytical Services, Inc. ("Lipper") or CDA Investment Technologies, Inc.
("CDA"). The Fund also may refer in such materials to mutual fund performance
rankings and other data, such as comparative asset, expense and fee levels,
published by Lipper or CDA. Advertising and promotional materials also may refer
to comparisons of the Fund and comparative mutual fund data and ratings reported
in independent periodicals including, but not limited to, The Wall Street
Journal, Money Magazine, Forbes, Business Week, Financial World, and Barron's.
17
<PAGE>
FINANCIAL STATEMENTS
PricewaterhouseCoopers LLP serves as independent public accountants for the
Fund, and in its capacity as such, audits the Fund's financial statements.
The Fund's Statement of Assets and Liabilities, Statement of Operations,
Statement of Changes in Net Assets, Financial Highlights and Notes to
Financial Statements, as well as the report of PricewaterhouseCoopers LLP for
the fiscal year ended October 31, 1998 are included in the Fund's Annual
Report to shareholders. You may request a copy of the Annual Report, without
charge, by writing to the Fund or calling (800) 333-4276. The foregoing
financial statements, as supplemented by the addition of Notes 6 and 7 and
the Report of Independent Accountants, dated December 30, 1998, except for
Notes 6 and 7, as to which the date is March 9, 1999, are included on the
following pages of this SAI.
18
<PAGE>
ASM INDEX 30 FUND, INC,
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
<TABLE>
<CAPTION>
PERCENT OF TOTAL
NET ASSETS SHARES VALUE
<S> <C> <C> <C>
COMMON STOCKS:
AEROSPACE
Boeing Co. 13,900 $ 521,250
United Technologies Corp. 13,900 1,323,975
6.2% 1,845,225
ALUMINUM
Aluminum Company of America 3.7% 13,900 1,101,575
AUTO AND TRUCK
General Motors Corp. 3.0% 13,900 876,569
BANKING
J. P. Morgan Corp. 4.4% 13,900 1,310,075
BEVERAGE
Coca-Cola Co. 3.2% 13,900 939,988
CHEMICAL
E.I. du Pont Nemours & Co. 13,900 799,250
Union Carbide Corp. 13,900 535,150
4.5% 1,334,400
COMPUTER & PERIPHERALS
International Business Machines Corp. 7.0% 13,900 2,063,281
CONSUMER PRODUCTS
Procter & Gamble Co. 4.2% 13,900 1,235,362
DIVERSIFIED
AlliedSignal, Inc. 13,900 541,231
Minnesota Mining & Manufacturing Co. 13,900 1,112,000
5.6% 1,653,231
DRUG
Merck & Co, Inc. 6.4% 13,900 1,879,975
ELECTRICAL EQUIPMENT
General Electric Corp. 4.1% 13,900 1,216,250
FINANCIAL SERVICES
American Express Co. 4.2% 13,900 1,228,413
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF TOTAL
NET ASSETS SHARES VALUE
<S> <C> <C> <C>
HEALTH
Johnson & Johnson 3.8% 13,900 1,132,850
INSURANCE
Citigroup, Inc. 2.2% 13,900 654,169
MACHINERY
Caterpillar Inc. 2.1% 13,900 625,500
MULTIMEDIA
The Walt Disney Co. 1.3% 13,900 374,431
OFFICE AUTOMATION & EQUIPMENT
Hewlett-Packard Co. 2.8% 13,900 836,606
OIL/GAS
Chevron Corp. 13,900 1,132,850
Exxon Corp. 13,900 990,375
7.2% 2,123,225
PAPER & FOREST PRODUCTS
International Paper Co. 2.2% 13,900 645,481
PHOTOGRAPHIC EQUIPMENT AND SUPPLIES
Eastman Kodak Co. 3.6% 13,900 1,077,250
RESTAURANT
McDonald's Corp. 3.1% 13,900 929,563
RETAIL STORE
Sears, Roebuck & Co. 13,900 624,631
Wal-Mart Stores, Inc. 13,900 959,100
5.4% 1,583,731
TELECOMMUNICATION SERVICES
American Telephone & Telegraph Corp. 2.9% 13,900 865,275
TIRE AND RUBBER
The Goodyear Tire & Rubber Co. 2.5% 13,900 748,863
TOBACCO
Philip Morris Companies, Inc. 2.4% 13,900 710,637
----------
TOTAL COMMON STOCKS
(Cost $26,626,247) 98.2%* 28,991,925
----------
REPURCHASE AGREEMENT:
Star Bank
4.70%, entered into 10/30/98, due 11/02/98 $591,000 591,000
Collateralized by $605,000 GNMA 6.625%, 9/20/22
with market value of $607,620
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF TOTAL
NET ASSETS SHARES VALUE
<S> <C> <C> <C>
TOTAL REPURCHASE AGREEMENT 2.0% 591,000
----------
(Cost $591,000)
TOTAL INVESTMENTS 100.2% 29,582,925
-----------
(Cost $27,217,247)
LIABILITIES IN EXCESS OF OTHER ASSETS -0.2% (47,864)
-----------
TOTAL NET ASSETS 100.0% $29,535,061
-----------
-----------
</TABLE>
*Total consists of individual percentages which have been rounded.
The accompanying notes are an integral part of these financial statements.
21
<PAGE>
ASM INDEX 30 FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
<TABLE>
<S> <C>
Assets:
Investments in common stocks, at market value $ 28,991,925
(cost $26,626,247)
Repurchase agreements, at cost 591,000
Cash 531
Interest and dividends receivable 20,808
Receivable from adviser 92,872
Prepaid expense and other assets 34,602
-------------
Total Assets 29,731,738
-------------
Liabilities:
Payable for capital shares redeemed 129,780
Accrued expenses 66,897
-------------
Total Liabilities 196,677
-------------
Net Assets $ 29,535,061
-------------
-------------
Components of Net Assets:
Capital paid-in $ 26,449,017
Accumulated undistributed net realized gains from
investment transactions 720,366
Net unrealized appreciation of investments 2,365,678
-------------
Total Net Assets $ 29,535,061
-------------
-------------
Capital Shares Outstanding
($0.001 par value, 1,000,000,000 shares authorized) 1,552,908
Net Asset Value - - Offering and Redemption Price Per Share $ 19.02
-------------
-------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
22
<PAGE>
ASM INDEX 30 FUND, INC.
STATEMENT OF OPERATIONS
OCTOBER 31, 1998
<TABLE>
<S> <C>
Investment Income:
Dividends $ 547,620
Interest 37,229
------------
Total investment income 584,849
------------
Expenses:
Management fees 26,302
Professional fees 45,900
Custodian fees 33,291
Trustee fees 24,000
Legal expense 42,822
Administrative fees 24,167
Registration and filing fees 30,016
Transfer agent and accounting fees 52,297
Printing and postage 14,084
Other expenses 7,154
------------
Total expenses 300,033
------------
Less: Reimbursement of expenses by adviser (242,280)
-------------
Total expenses - net 57,753
------------
Investment income - net 527,096
------------
Realized and Unrealized Gains from Investments:
Net realized gains from investment transactions 3,568,516
Change in unrealized appreciation of investments 592,550
Net realized and unrealized gains from investments 4,161,066
------------
Net Increase in Net Assets Resulting from Operations $ 4,688,162
------------
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
23
<PAGE>
ASM INDEX 30 FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
OCTOBER 31, OCTOBER 31,
1998 1997
---- ----
<S> <C> <C>
Increase in net assets:
Operations:
Net investment income $ 527,096 $ 430,876
Net realized gains from investment transactions 3,568,516 5,534,868
Change in unrealized appreciation of investments 592,550 1,680,860
------------- -------------
Net increase in net assets resulting from operations 4,688,162 7,646,604
------------- -------------
Distributions to shareholders:
From net investment income (453,542) (430,876)
In excess of net investment income --- (63,140)
From net realized gains (1,846,825) (208,768)
------------ ------------
Net decrease in net assets resulting from distribution
to shareholders (2,300,367) (702,784)
------------ ------------
Capital share transactions:
Proceeds from shares issued 79,003,347 77,870,255
Reinvestment of distributions 1,766,644 590,838
Cost of shares redeemed (74,749,547) (73,593,574)
------------ ------------
Net increase in net assets resulting from capital
share transactions 6,020,444 4,867,519
------------ ------------
Total increase in net assets 8,408,239 11,811,339
------------ ------------
Net assets - beginning of period 21,126,822 9,315,483
------------ ------------
Net assets - end of period $ 29,535,061 $ 21,126,822
------------ ------------
------------ ------------
Changes in shares outstanding:
Shares issued 4,211,829 4,853,861
Shares issued in connection with reinvestment
of distributions 99,745 36,286
Shares redeemed (3,986,563) (4,321,722)
------------ ------------
Net increase in shares outstanding 325,011 568,425
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
24
<PAGE>
ASM INDEX 30 FUND, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
1998 1997 1996 1995(a) 1994(a)
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $17.21 $14.13 $11.37 $9.78 $10.07
INVESTMENT OPERATIONS:
Net investment income 0.32 0.18 0.08 0.00 0.56
Net gains (losses) from investments
(realized and unrealized) 2.54 3.34 2.76 1.77 -0.16
---- ---- ---- ---- -----
Total from investment operations 2.86 3.52 2.84 1.77 0.40
---- ---- ---- ---- ----
DISTRIBUTIONS:
From net investment income -0.27 -0.18 -0.07 -0.05 -0.52
In excess of net investment income 0.00 -0.11 -0.01 -0.13 0.00
From net realized gains -0.78 -0.15 0.00 0.00 0.00
Tax return of capital 0.00 0.00 0.00 0.00 -0.17
------- ------- ------ ------ ------
Total Distributions -1.05 -0.44 -0.08 -0.18 -0.69
------- ------- ------ ------ ------
NET ASSET VALUE, END OF YEAR $19.02 $17.21 $14.13 $11.37 $9.78
------- ------- ------ ------ ------
------- ------- ------ ------ ------
TOTAL RETURN 17.13% 25.18% 25.01% 18.10% 3.97%
------- ------- ------ ------ ------
------- ------- ------ ------ ------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $29,535 $21,127 $9,315 $9,704 $7,277
Ratio of expenses to average
net assets* 0.18% 0.42% 1.86% 3.01%** 0.75%
Ratio of net investment
income to average net assets* 1.60% 1.51% 0.53% 0.04% 2.17%
Portfolio turnover rate*** 196% 265% 391% 340% 1193%
</TABLE>
* Ratios are presented net of fees voluntarily reduced. If such voluntary fee
reductions had not occurred, the ratios would have been as follows: ratio of
expenses to average net assets would have been 0.91%, 1.05%, 2.59%, 5.77%, and
2.94% for 1998, 1997, 1996, 1995, and 1994, respectively; ratio of net
investment income (loss) to average net assets would have been 0.87%, 0.88%,
(0.20%), (2.72%) and (0.02%) for 1998, 1997, 1996, 1995 and 1994, respectively.
As a result of certain tax adjustments necessitated by the Fund's failure to
qualify as a regulated investment company for the years ended October 31, 1995
and 1994, as well as other adjustments, the gross expense ratios previously
reported for these periods have been restated.
** Includes $50,460 of interest expense not subject to the expense reimbursement
agreement.
*** The Fund continues to be as fully invested in equities as possible.
Therefore, portfolio turnover is higher than most equity mutual funds because
purchases and sales of portfolio securities are necessary for settlement of
transactions requested by Fund shareholders and stock splits by the companies
in the DJIA require the Fund to purchase and sell portfolio securities to
maintain the Fund's investment in an equal number of shares of such companies.
(a) Audited by predecessor auditor.
The accompanying notes are an integral part of these financial statements.
25
<PAGE>
ASM INDEX 30 FUND, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1998
ASM Index 30 Fund, Inc. (the "Fund") was incorporated in Maryland on April 25,
1990 and is registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), as a no-load, diversified, open-end management investment company.
The Fund has an investment objective of providing total return through a
combination of capital appreciation and current income.
1. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
by the Fund in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles. Preparation of the
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses for the
period.
SECURITY VALUATION
Portfolio securities are listed on a national securities exchange and
are stated at the last reported sales price on the day of valuation.
SECURITY TRANSACTIONS
The Fund records purchases of investments one business day after trade
date and sales of investments on the trade date. Realized gains and losses from
sales of investments are calculated on the specific identification basis.
Interest income is recognized on the accrual basis, and dividend income is
recorded on the ex-dividend date.
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund purchases
securities from a bank or recognized securities dealer and simultaneously
commits to resell that security to the bank or dealer at an agreed-upon date and
price reflecting a market rate of interest unrelated to the coupon rate or
maturity of the purchased security. The Fund may invest in repurchase agreements
with institutions believed by Vector Index Advisors, Inc. (the "Adviser") to
present minimum credit risk. Each repurchase agreement is recorded at cost. The
Fund requires that the securities purchased in a repurchase agreement be
transferred to the custodian in a manner sufficient to enable the Fund to obtain
those securities in the event of a counterparty default. The seller, under the
repurchase agreement, is required to maintain the value of the securities at
least equal to the repurchase price, including accrued interest.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on deposit with the
custodian.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on the ex-dividend date. On
a quarterly basis, the Fund declares and pays dividends from net investment
income, if any. On an annual basis, the Fund declares and pays net capital gain
dividends, if any.
Dividends from net investment income and net capital gain dividends
are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These differences are
primarily due to deferrals of certain losses and the Fund's use of the
accounting practice of tax equalization, whereby a portion of the costs of
capital shares redeemed is
<PAGE>
attributable to distributions to shareholders. Permanent book and tax basis
differences have been reclassified among the components of net assets.
FEDERAL INCOME TAXES
The Fund intends to continue to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment companies and
to distribute all of its taxable income to its shareholders.
2. INVESTMENT ADVISORY FEES
The Fund operates under an investment management agreement (the
"Agreement") with the Adviser. The Agreement provides for compensation to the
Adviser at an annual rate of 0.08% of the Fund's average daily net assets.
Pursuant to the Agreement, the Adviser provides continuous supervision of the
investment portfolio and pays the cost of compensation of the officers of the
Fund, and occupancy and certain clerical and administrative costs involved in
portfolio management. The Fund bears all other costs and expenses.
Certain officers and directors of the Fund are also officers and
directors of the Adviser. Commencing January 15, 1997, the Adviser voluntarily
agreed to limit expenses of the Fund to 0.18% of the Fund's average daily net
assets. Pursuant to commitments made to the Fund by the Adviser, the Adviser
reimbursed the Fund $242,280 for the year ended October 31, 1998. The Board of
Directors of the Fund has obtained confirmation that the Adviser has made
arrangements to assure availability of funds to discharge the Fund's
obligations. All amounts due under statutory and voluntary expense limitations
were paid by the Adviser within 30 days of the end of the fiscal year.
3. INVESTMENT TRANSACTIONS
For the year ended October 31, 1998, purchases and sales of investment
securities (excluding short-term securities) were $65,649,422 and $61,747,953,
respectively. As of October 31, 1998, the aggregate cost basis of investments
for Federal income tax purposes was $28,005,998 and net unrealized appreciation
of investments for Federal income tax purposes was comprised of the following:
Gross unrealized appreciation of investments $ 3,162,749
Gross unrealized depreciation of investments (1,585,822)
-----------
Net unrealized appreciation of investments $ 1,576,927
-----------
-----------
4. FINANCIAL HIGHLIGHTS RESTATEMENT
During the year ended October 31, 1996, the Fund, in consultation with
its auditors and legal counsel, determined, based on information available at
the time, that the Fund did not qualify as a regulated investment company under
the Internal Revenue Code for the years ended October 31, 1995 and 1994. As
such, the Fund would be subject to accrued Federal income taxes and interest of
approximately $1,312. The Adviser has agreed to pay these costs.
Also, advisory fees in the amount of $23,443 for the period from April
16, 1995 to October 31, 1995 should not have been accrued by the Fund nor
reimbursed by the Adviser. As a result, the expense ratios before reimbursement
in the Financial Highlights have been restated to reflect these changes. Prior
to restatement, such ratios were 5.94% and 2.55% for the years ended October 31,
1995 and 1994, respectively. All amounts discussed above as well as amounts due
under statutory and voluntary expense limitations are reflected in the
receivable from adviser on the Statement of Assets and Liabilities.
5. INVESTMENT ADVISER EVENTS
27
<PAGE>
The Fund had received a commitment from its Adviser (the "expense
commitment") that the Adviser would waive payment of its advisory fee, or would
otherwise pay to the Fund amounts by which the actual expenses of the Fund
exceed eighteen basis points of the Fund's average net assets. Subsequent to
October 31, 1998, the Fund was reimbursed by the Adviser for all expenses owed
through that date. Recently, the Board of Directors of the Fund was advised by
its Adviser of financial information which required the Board to consider
whether the Adviser would be able to continue to fulfill the expense commitment
in the future. Absent the expense commitment, the expense ratio for the Fund
would be materially higher than the Fund had to bear under the terms of the
expense commitment.
The Chairman and President of the Adviser, who is also a Director and
Officer of the Fund, requested and has received approval for a leave of absence
for personal reasons from all positions with the Fund, and from the day to day
operation of the Adviser with respect to the Fund. Other officers and employees
of the Adviser and the Fund continue to operate the Fund under the supervision
of the independent directors of the Fund.
On December 23, 1998, at a meeting of the independent members of the
Board of Directors, the directors voted to notify the Adviser of the termination
of the present investment advisory agreement effective sixty days after delivery
of notice of termination of the agreement. During this sixty-day period, the
Board will solicit proposals from other funds and advisers, and will consider
alternative arrangements. Such alternatives include a recommendation that
shareholders vote to approve a new investment advisory relationship with another
adviser, or vote to reorganize the Fund with another fund in a tax free
reorganization or, in the absence of such options, vote to terminate the Fund
and distribute its assets to the shareholders. Subsequent to October 31, 1998,
the Board has established a reserve for the expense of implementing such
alternatives.
Pending resolution of these concerns, the Board is confident that the
custodian bank, transfer agent, accounting services agent, independent
accountants and counsel for the Fund can continue to provide the services
required for the conduct of the Fund's business.
6. LEGAL PROCEEDINGS
On February 8, 1999, a suit was filed against a former director and
officer of the Fund; the investment adviser of the Fund; and the Fund alleging
that the former officer of the Fund failed to invest in the Fund amounts
purportedly paid by the plaintiffs to the investment adviser of the Fund. The
relief sought is the recovery of the investment amounts and interest thereon,
additional general, consequential and incidental damages, legal costs and
disbursements, and declaratory and injunctive relief to preclude the Fund from
transferring or permitting the dissipation of its assets. With the possible
exception of Steven H. Adler, the former officer and director of the Fund, the
Fund had no knowledge that the amounts purportedly paid by the plaintiffs to the
former investment adviser were, as the plaintiffs have alleged, to be invested
in the Fund. The Fund and its counsel are investigating this matter and the
possibility that other unasserted claims or improprieties exist. At the present
time, the liability of the Fund, if any, is not readily determinable.
7. NEW INVESTMENT ADVISER AND REORGANIZATION
On February 26, 1999, the Board of Directors of the Fund approved an
interim investment management contract ("Interim Contract") naming ORBITEX
Management, Inc. ("ORBITEX") as the new investment adviser of the Fund. The Fund
and ORBITEX entered into the Interim Contract effective on March 1, 1999,
following the termination of the previous investment adviser. The terms and
conditions of the Interim Contract are substantially the same as the management
contract that was terminated, but that ORBITEX will not limit the Fund's
expenses to 0.18% of the average daily net assets of the Fund beginning on March
1, 1999. The Interim Contract will remain in effect until the earlier of July 1,
1999 or the vote of the shareholders at a special shareholder meeting approving
or disapproving a new investment management contract between the Fund and
ORBITEX. The Board has also recommended that the shareholders of the Fund
approve a tax-free reorganization between the Fund and an investment company
managed by ORBITEX.
28
<PAGE>
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
For the taxable year ended October 31, 1998, 19.6% of the income
dividends paid by the Fund qualified for the dividends received deduction
available to corporations, and distributions from long-term capital gains for
the Fund were $4,126,336.
29
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
ASM Index 30 Fund, Inc. (the "Fund")
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Fund at October 31, 1998, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years then ended and the financial highlights for each of
the five years then ended, in conformity with generally accepted accounting
principals. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Funds'
management; our responsibility is to express an opinion on these financial
statements based on our audits. The financial highlights before restatement for
the years ended October 31, 1995 and 1994 were audited for other auditors, whose
report dated December 27, 1995 expressed an unqualified opinion. We also audited
the adjustments described in Note 4 that were applied to restate the expense
ratios included in the financial highlights for the years ended October 31, 1995
and 1994. In our opinion such adjustments are appropriate and have been properly
applied. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principals used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe our audits, which include confirmation of securities owned at October
31, 1998 by correspondence with the custodian, provide a reasonable basis for
the opinion expressed above.
As disclosed in Notes 5 and 7 to the financial statements, the Board of
Directors of the Fund voted to notify the Fund's investment adviser of the
termination of the present investment advisory agreement and has entered into
alternative arrangements for managing the Fund under a new investment advisory
agreement. Pursuant to the new investment advisory agreement, the Fund's annual
expenses, effective March 1, 1999, will not be limited to .18% of the average
daily net assets of the Fund. In addition, the Board has recommended that
shareholders approve reorganizing the Fund with another fund in a tax-free
reorganization. In the absence of such a reorganization, the Board would
consider terminating the Fund and distributing its assets to the shareholders.
Any of these alternatives could result in further material changes in the Fund's
future investment objectives, operations, or expense ratios. No adjustments have
been made to the financial statements as a result of this matter.
As disclosed in Note 6 to the financial statements, on February 8, 1999 a suit
was filed alleging that a former officer of the Fund failed to invest in the
Fund amounts paid by the plaintiffs to the former investment adviser of the
Fund. The relief sought is recovery of the investment amounts and interest
thereon, other consequential and incidental damages, and declaratory and
injunctive relief to preclude the Fund from transferring or permitting the
dissipation of its assets. At the present time, the liability of the Fund, if
any, is not readily determinable nor is it readily determinable whether other
individuals may file additional suits or make additional claims alleging similar
improprieties. No adjustments have been made to the financial statements as a
result of this matter.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
December 30, 1998, except for Note 6 and Note 7
as to which the date is March 9, 1999
30
<PAGE>
APPENDIX A
DEFINITIONS OF STANDARD & POOR'S BOND RATINGS
Standard & Poor's Ratings Group gives ratings to bonds that range from AAA to D.
The Fund may invest in bonds with ratings of CC above. Definitions of these
ratings are set forth below.
AAA Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small
degree.
A Debt rated A has a strong capacity to pay interest and principal
although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher
rated categories.
BBB 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.
BB, B, CCC, CC
Debt rated BB, B, CCC and CC is regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and the highest degree of speculation.
While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major
risk exposures to adverse conditions.
D Debt rated D is in default, and payment of interest and/or repayment of
principal is in arrears.
31
<PAGE>
APPENDIX B
MOODY'S BOND RATINGS
Moody's Investors Service, Inc. gives ratings to bonds that range from Aaa to
D. Definitions of these ratings are set forth below. The Fund may invest in
bonds with any ratings of Caa or better.
Aaa - These bonds are judged to be of the best quality. They carry the
smallest degree of investment risk. Interest payments are protected by
a large or by an exceptionally stable margin and principal is secure.
Aa - These bonds are judged to be of high quality by all standards. 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 risks appear somewhat larger than in
Aaa securities.
A - These are bonds which possess many favorable investment 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.
Baa - These bonds are considered as medium grade obligations, i.e., they
are neither highly protected nor poorly secured. Such bonds lack
outstanding investment characteristics and in fact have speculative
characteristics as well.
Ba - These are bonds judged to have speculative elements; their future
cannot be considered as well assured. Uncertainty of position
characterizes bonds in this class.
B - These bonds generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.
Caa - These are bonds of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or
interest.
Ca - These bonds represent obligations which are speculative in a high
degree. Such issues are often in default or have other market
shortcomings.
C - These are the lowest rated class of bonds and issues so rated can be
regarded as having extremely poor prospects of ever attaining any real
investment standing.
32
<PAGE>
PART C: OTHER INFORMATION
ITEM 23. EXHIBITS.
(a) (1) Articles of Incorporation is filed herewith as Exhibit EX-99B(1).
(2) Articles of Amendment dated January 11, 1991 is filed herewith as
Exhibit EX-99B(2).
(3) Articles of Amendment to Articles of Incorporation dated
August 26, 1997 is filed herewith as Exhibit EX-99B(3).
(b) By-laws are filed herewith as Exhibit EX-99B(4).
(c) Not Applicable.
(d) Management Agreement between ASM Index 30 Fund, Inc. and ORBITEX
Management, Inc. dated February 28, 1999 is incorporated by reference
to Post-Effective Amendment No. 11 to the Registration Statement on
Form N-1A filed on March 12, 1999.
(e) Not Applicable.
(f) Not Applicable.
(g) Custodian Agreement is filed herewith as Exhibit EX-99.B(5).
(h) (1) Administration Agreement (Transfer Agency) is filed herewith as
Exhibit EX-99.B(6).
(2) Accounting Services Agreement is filed herewith as Exhibit
EX-99.B(7).
(3) Administration Services Agreement is filed herewith as
Exhibit EX-99.B(8).
(i) (1) Opinion concerning the legality of shares is filed herewith as
Exhibit EX-99.B(9).
(2) Consent concerning the legality of shares is filed herewith as
Exhibit EX-99.B(10).
(j) Consent of auditors is filed herewith as Exhibit No. EX-99.B(11).
(k) Not Applicable.
(l) Not Applicable.
(m) Not Applicable.
(n) Financial Data Schedule for the ASM Index 30 Fund is incorporated by
reference to Post-Effective Amendment No. 11 to the Registration
Statement on Form N-1A filed on March 12, 1999.
<PAGE>
(o) Not Applicable.
(p) Power of Attorney granted by Jerome Feltenstein; Daniel Calabria; and
Arthur Salzfass is filed herewith as Exhibit EX-99.B(12).
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
See "Management of the Fund" in Part A of this Registration Statement.
ITEM 25. INDEMNIFICATION.
As permitted by Section 17(h) and (i) of the Investment Company Act of 1940 (the
"1940 Act") and pursuant to Article Tenth of the Fund Articles of Incorporation
(Exhibit 1 to the Registration Statement) and section 2-418 of the Maryland
General Corporation Law, officers and directors of the Registrant may be
indemnified against liabilities in connection with the Registration, unless it
is proved that (i) the act or omission of the director or officer was material
to the cause of action adjudicated in the proceeding and was committed in bad
faith or with active and deliberate dishonesty, (ii) the director actually
received an improper personal benefit in money, property or services, or (iii)in
the case of a criminal proceedings, the director had reasonable cause to believe
that the act of omission was unlawful. As permitted by Section 17(i) of the 1940
Act, pursuant to the Distribution Agreement (Exhibit 6 to the Registration
Statement), the Distributor of the Registrant may be indemnified against
liabilities which it may incur except liabilities arising from bad faith, gross
negligence, willful misfeasance or reckless disregard of duties.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 ("Securities Act") 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
Securities Act and is therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than payment by the Registrant
of expenses incurred or paid by a director, officer or controlling person of the
Registrant in connection with the successful defense of any action, suit or
proceeding) is asserted against the Registrant by such director, officer or
controlling person in connection with the shares being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
Section 2(d) of the Management Agreement limits the liability of ORBITEX
Management, Inc. to losses resulting from a breach of fiduciary duty with
respect to their receipt of compensation for services (in which case any award
of damages shall be limited to the period and amount set forth in section 36(b)
of the 1940 Act) or losses
<PAGE>
resulting from willful misfeasance, bad faith or gross negligence in
performance of its duties and obligation under the Management Agreement.
The Registrant undertakes to apply the indemnification provisions of its
Articles of Incorporation and the Investment Management Agreement in a manner
consistent with the provisions of Sections 17(h) and (i) of the Investment
Company Act.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
Reference is made to Part A of this Registration Statement and to Form ADV filed
under the Investment Advisers Act of 1940, as amended, by ORBITEX Management,
Inc. (File No. 801-52312).
ITEM 27. PRINCIPAL UNDERWRITER
Not Applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
The accounts, books and other documents required to be maintained by Registrant
pursuant to Section 31(a) of the Investment Company Act of 1940 and rules
promulgated thereunder are in the possession of Registrant and Registrant's
custodian and shareholder service agent, as follows: the documents required to
be maintained by paragraphs (4), (5), (6), (7), (10) and (11) of Rule 31a-1(b)
will be maintained by the Registrant, and all other records will be maintained
by the Custodian and Shareholder Service Agent.
ITEM 29. MANAGEMENT SERVICES.
All management-related service contracts are discussed in Parts A or B of this
Registration Statement.
ITEM 30. UNDERTAKINGS.
Registrant hereby undertakes to conduct its operations in accord with the
director removal and shareholder assistance provisions of Section 16(c) of the
Investment Company Act of 1940.
Registrant undertakes to furnish each person to whom a prospectus is delivered
with a copy of the Registrant's latest Annual Report to shareholders upon
request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all of the requirements for effectiveness of this Registration Statement
under Rule 485(b) under the Securities Act of 1933, as amended, and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of New York and State of New York on
the 12th day of April, 1999.
ASM Index 30 Fund, Inc.
Registrant
By:/s/ M. Fyzul Khan
----------------------------------
M. Fyzul Khan
Acting Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Jerome Feltenstein Director April 12, 1999
Jerome Feltenstein
/s/ W. Keith Schilit Director April 9, 1999
W. Keith Schilit
/s/ Daniel Calabria Director April 12, 1999
Daniel Calabria
/s/ Arthur Salzfass Director April 12, 1999
Arthur Salzfass
M. Fyzul Khan Acting Chief April 12, 1999
M. Fyzul Khan Executive Officer
Keith D. Kemp Acting Chief April 12, 1999
Keith D. Kemp Financial Officer
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
FORM N-1A EDGAR
EXHIBIT NO. EXHIBIT NO.
<S> <C> <C>
23(a)(1) Articles of Incorporation EX-99.B(1)
23(a)(2) Articles of Amendment EX-99.B(2)
23(a)(3) Articles of Amendment EX-99.B(3)
23(b) By-laws EX-99.B(4)
23(g) Custodian Agreement EX-99.B(5)
23 (h)(1) Administration Agreement (Transfer Agency) EX-99.B(6)
23 (h)(2) Accounting Services Agreement EX-99.B(7)
23 (h)(3) Administration Services Agreement EX-99.B(8)
23 (i)(1) Opinion Concerning the
Legality of Shares EX-99.B(9)
23 (i)(2) Consent Concerning the
Legality of Shares EX-99.B(10)
23 (j) Consent of Auditors EX-99.B(11)
23 (p) Power of Attorney EX-99.B(12)
</TABLE>
