<PAGE>
Registration No. 333-____
As filed with the Securities and Exchange Commission on September 11, 1998
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[_] Pre-Effective Amendment No. __ [_] Post-Effective Amendment No. __
-----------------------
THE GOVETT FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
250 MONTGOMERY STREET, SUITE 1200, SAN FRANCISCO, CALIFORNIA 94104
(Address of Principal Executive Offices)
(800) 731-1755
(Registrant's Telephone Number, including Area Code)
ALICE L. SCHULMAN
SECRETARY
THE GOVETT FUNDS, INC.
250 MONTGOMERY STREET, SUITE 1200
SAN FRANCISCO, CALIFORNIA 94104
(Name and Address of Agent for Service)
COPIES OF COMMUNICATIONS TO:
REGINA M. PISA, P.C.
GOODWIN, PROCTER & HOAR LLP
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
-----------------------
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement.
-----------------------
Registrant is relying on Section 24(f) of the Investment Company Act of 1940,
as amended, which permits registration of an indefinite number of shares of
common stock, $.00001 par value of the Registrant. Accordingly, no filing fee is
due in connection with this Registration Statement.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
===============================================================================
<PAGE>
THE GOVETT FUNDS, INC.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following pages and documents:
Front Cover
Contents Page
Letter to Shareholders of Govett Asia Fund and Govett Latin America Fund
Notice of Special Meeting of Shareholders of Govett Asia Fund and Govett Latin
America Fund
Part A - Prospectus/Joint Proxy Statement Concerning the Acquisition of Assets
of each of Govett Asia Fund and Govett Latin America Fund
Part B - Statement of Additional Information
Part C - Other Information
Signature Page
Exhibits
(i)
<PAGE>
THE GOVETT FUNDS, INC.
CROSS REFERENCE SHEET
PURSUANT TO RULE 481(A)
<TABLE>
<CAPTION>
CAPTION OR LOCATION IN
FORM N-14 ITEM NO. AND CAPTION PROSPECTUS/PROXY STATEMENT
- ------------------------------ --------------------------
Part A Information Required in Prospectus/Proxy Statement
------
<S> <C>
1. Beginning of Registration Statement Cover Page; Cross Reference Sheet
and Outside Front Cover Page of Prospectus
2. Beginning and Outside Back Cover Table of Contents
Page of Prospectus
3. Fee Table, Synopsis Information and Summary; Principal Risk Factors;
and Risk Factors Comparison of Investment Objectives and
Policies
4. Information about the Transaction Summary; Information About the
Reorganization; Comparative Information
on Shareholder Rights; Exhibit A
(Plan of Reorganization)
5. Information about the Registrant Cover Page; Summary; Principal Risk
Factors; Comparison of Investment
Objectives and Policies; Information
About the Reorganization; Comparative
Information on Distribution
Arrangements; Comparative Information on
Shareholder Services; Comparative
Information on Shareholder Rights;
Management; Additional Information
About The Funds; Current Prospectus of Registrant
6. Information about the Company Being Summary; Comparison of Investment
Acquired Objectives and Policies; Information About
the Reorganization; Comparative
Information on Distribution Arrangements;
Comparative Information on Shareholder
Services; Comparative Information on
Shareholder Rights; Additional Information
About The Funds; Prospectus of Registrant
dated April 17, 1998, as supplemented
June 4, 1998
</TABLE>
(ii)
<PAGE>
<TABLE>
<S> <C>
7. Voting Information Summary; Information About the
Reorganization; Comparative Information on
Shareholder Rights; Voting Information
8. Interest of Certain Persons and Experts Information About the
Reorganization
9. Additional Information Required for Not Applicable
Reoffering By Persons Deemed to be
Underwriters
</TABLE>
(iii)
<PAGE>
<TABLE>
<CAPTION>
CAPTION OR LOCATION IN
FORM N-14 ITEM NO. AND CAPTION PROSPECTUS/PROXY STATEMENT
- ------------------------------ --------------------------
Part B: Information Required in Statement of Additional Information
------
<S> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. Additional Information about the Registrant Cover Page; Statement of Additional
Information of Registrant dated April 17,
1998, as supplemented June 4, 1998
13. Additional Information about the Cover Page; Statement of Additional
Information
Company Being Acquired of Registrant dated April 17, 1998, as
supplemented June 4, 1998
14. Financial Statements Annual Report of the Registrant for the
year ended December 31, 1997; Semi-Annual
Report of the Registrant for the six-month
period ended June 30, 1998; and Pro Forma
Financial Statements
</TABLE>
Part C: Other Information
------
<TABLE>
<S> <C>
15. Indemnification Indemnification
16. Exhibits Exhibits
17. Undertakings Undertakings
</TABLE>
(iv)
<PAGE>
GOVETT ASIA FUND
GOVETT LATIN AMERICA FUND
EACH A SERIES OF
THE GOVETT FUNDS, INC.
250 MONTGOMERY STREET, SUITE 1200
SAN FRANCISCO, CALIFORNIA 94104
___________________________
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders of
each of Govett Asia Fund and Govett Latin America Fund (together, the "Acquired
Funds"), series of The Govett Funds, Inc. (the "Company"), to be held at the
offices of PricewaterhouseCoopers LLP, 333 Market Street, 21st Floor, San
Francisco, California 94104 on December 15, 1998 at 2:00 p.m. local time.
At this important meeting you will be asked to consider and approve a Plan
of Reorganization on behalf of each Acquired Fund and Govett Emerging Markets
Equity Fund (the "Acquiring Fund").
If the proposal is approved by the shareholders of an Acquired Fund, the
Acquiring Fund would acquire substantially all of the assets and assume certain
liabilities of that Acquired Fund. As a result, you, as a shareholder of such
Acquired Fund, would receive, in exchange for your shares of such Acquired Fund,
Class A Retail shares of the Acquiring Fund with an aggregate value equivalent
to the aggregate net asset value of your Acquired Fund shares at the time of the
transaction. Approval by the shareholders of one Acquired Fund, and the
consummation of the transaction with respect to that Acquired Fund, are not
conditioned on the approval by shareholders of the other Acquired Fund or the
consummation of the transaction with respect to such other Acquired Fund. Each
transaction, however, is conditioned upon the receipt of an opinion of counsel
to the effect that the transaction would be free from federal income taxes to
you and your Acquired Fund.
The Board of Directors of the Company has determined that the proposed
reorganization should provide benefits to shareholders of the Acquired Funds
because of the enhanced economies of scale and more efficient operations which
are expected to result from combining funds with the same investment manager and
sub-adviser, the same multiple class structure, the same sales load structure
and similar investment objectives and policies.
I thank you for your participation as a shareholder and urge you to please
exercise your right to vote by completing, dating and signing the enclosed proxy
card or, if you own shares in each Acquired Fund, proxy cards. A self-
addressed, postage-paid envelope has been enclosed for your convenience. We
look forward to receiving your vote.
IT IS VERY IMPORTANT THAT YOUR VOTING INSTRUCTIONS BE RECEIVED NO LATER
THAN DECEMBER 8, 1998.
Instructions for shares held of record in the name of a nominee, such as a
broker-dealer, may be subject to earlier cut-off dates established by such
intermediaries to facilitate a timely response.
Sincerely,
Patrick K. Cunneen
Chairman of the Board of Directors
October 16, 1998
<PAGE>
GOVETT ASIA FUND
GOVETT LATIN AMERICA FUND
EACH A SERIES OF
THE GOVETT FUNDS, INC.
250 MONTGOMERY STREET, SUITE 1200
SAN FRANCISCO, CALIFORNIA 94104
_____________________________
NOTICE OF SPECIAL MEETING
OF SHAREHOLDERS
TO BE HELD ON DECEMBER 15, 1998
_______________________________
A Special Meeting of Shareholders of Govett Asia Fund (the "Asia Fund") and
Govett Latin America Fund (the "Latin America Fund"), each a portfolio series of
The Govett Funds, Inc., a Maryland corporation (the "Company"), will be held at
the offices of PricewaterhouseCoopers LLP, 333 Market Street, 21st Floor, San
Francisco, California 94104, on December 15, 1998 at 2:00 p.m. local time (the
"Meeting") for the following purposes:
1. By the shareholders of record of the Asia Fund, to consider and act
upon an Plan of Reorganization (the "Plan") providing for the transfer
of the assets of the Asia Fund (subject to certain liabilities) to
Govett Emerging Markets Equity Fund (the "Acquiring Fund") in exchange
for Class A Retail shares of the Acquiring Fund, the distribution of
such shares to shareholders of the Asia Fund and the subsequent
liquidation of the Asia Fund;
2. By the shareholders of record of the Latin America Fund, to consider
and act upon the Plan providing for the transfer of the assets of
Latin America Fund (subject to certain liabilities) to the Acquiring
Fund in exchange for Class A Retail shares of the Acquiring Fund, the
distribution of such shares to the shareholders of the Latin America
Fund and the subsequent liquidation of the Latin America Fund; and
3. To consider and act upon any matter incidental to the foregoing and to
transact such other business as may properly come before the Meeting
and any adjournments thereof.
The close of business on October 5, 1998 has been fixed as the record date
for the determination of shareholders entitled to notice of, and to vote at, the
Meeting and any adjournments thereof.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE SIZE OF YOUR HOLDINGS IN THE FUND.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE AND SIGN
THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH
NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU LATER DESIRE TO VOTE IN
PERSON AT THE MEETING, YOU MAY REVOKE YOUR PROXY.
By Order of the Directors,
Alice L. Schulman, Secretary
October 16, 1998
Date of Notice
<PAGE>
QUESTIONS AND ANSWERS
Q. WHY AM I RECEIVING THIS MATERIAL AND WHAT AM I SUPPOSED TO DO WITH IT?
A. This material is being sent to you as a shareholder of either Govett Asia
Fund or Govett Latin America Fund.
Proposals 1 and 2 described in the Prospectus/Joint Proxy Statement ask
shareholders of Govett Asia Fund and Govett Latin America Fund to, in effect,
change to another mutual fund. If you are a Govett Asia Fund shareholder and the
shareholders of Govett Asia Fund approve Proposal 1, Govett Asia Fund will
combine with Govett Emerging Markets Equity Fund and you will exchange your
shares of Govett Asia Fund for shares of Govett Emerging Markets Equity Fund. If
you are a Govett Latin America Fund shareholder and the shareholders of Govett
Latin America Fund approve Proposal 2, Govett Latin America Fund will combine
with Govett Emerging Markets Equity Fund and you will exchange your shares of
Govett Latin America Fund for shares of Govett Emerging Markets Equity Fund.
There are no sales charges in connection with either transaction. In
exchange for your shares, you will receive shares of Govett Emerging Markets
Equity Fund with a total net asset value equal to the total net asset value of
the shares that you exchanged.
The Board of Directors is asking the shareholders of each fund, Govett Asia
Fund or Govett Latin America Fund, to approve the combination of their fund with
Govett Emerging Markets Equity Fund and to exchange their shares for shares of
Govett Emerging Markets Equity Fund.
You should read the material carefully, mark your vote on the enclosed
Proxy Form and send it back before December 8, 1998.
Q. WHY ARE THESE TRANSACTIONS BEING PROPOSED?
A. The Board of Directors believes that, in the current competitive
environment, each of Govett Asia Fund and Govett Latin America Fund is too small
to manage effectively, which may affect the performance of the Fund. In
addition, the investment adviser has heavily subsidized each Fund since its
inception, however the subsidy could be discontinued at any time. Moreover, the
shareholders of Govett Asia Fund and Govett Latin America Fund may benefit from
the more diversified portfolio of Govett Emerging Markets Equity Fund.
Q. WHAT IS THE DIFFERENCE BETWEEN PROPOSAL 1 AND PROPOSAL 2?
A. The two proposals are very similar, except that Proposal 1 only affects
------ ----
shareholders of Govett Asia Fund, and only Govett Asia Fund shareholders are
permitted to vote on it. If you
<PAGE>
are a shareholder of Govett Latin America Fund, you are not permitted to vote on
Proposal 1, only on Proposal 2.
Proposal 2 only affects shareholders of Govett Latin America Fund, and only
Govett Latin America Fund shareholders are permitted to vote on it. If you are
a shareholder of Govett Asia Fund, you are not permitted to vote on Proposal 2,
only on Proposal 1.
Proposal 1 and Proposal 2 are independent of each other. Thus, whether the
transaction contemplated in Proposal 1 proceeds depends on whether Proposal 1 is
adopted by the shareholders of Govett Asia Fund and does not depend on whether
shareholders of Govett Latin America Fund approve Proposal 2. Similarly,
whether the transaction contemplated in Proposal 2 proceeds depends on whether
Proposal 2 is adopted by the shareholders of Govett Latin America Fund and does
not depend on whether shareholders of Govett Asia Fund approve Proposal 1.
Q. WHAT ARE THE TAX EFFECTS OF THE TRANSACTIONS?
It is intended that none of Govett Asia Fund, Govett Latin America Fund or
Govett Emerging Markets Equity Fund or any of their shareholders will have to
pay any federal income tax as a result of the transactions.
Q. HOW DO THE DIRECTORS RECOMMEND THAT I VOTE?
A. The Board of Directors recommends that you vote FOR the proposal that
applies to your shares.
Q. HOW DO I CONTACT YOU IF I HAVE ANY QUESTION?
A. You may call (800) 821-0803, Monday through Friday, 9:00 a.m. to 7:00 p.m.
(Eastern Time).
______________________________
IMPORTANT INFORMATION ABOUT THE PROPOSALS IS SET FORTH
IN THE ACCOMPANYING PROSPECTUS/JOINT PROXY STATEMENT.
PLEASE READ IT CAREFULLY.
PLEASE VOTE.
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN.
<PAGE>
PROSPECTUS/JOINT PROXY STATEMENT
______________________________
Concerning the Acquisition of the Assets of
GOVETT ASIA FUND
GOVETT LATIN AMERICA FUND
each a series of
The Govett Funds, Inc.
250 Montgomery Street, Suite 1200
San Francisco, California 94104
(800) 821-0803
By and in Exchange for Shares of
GOVETT EMERGING MARKETS EQUITY FUND
a series of
The Govett Funds, Inc.
250 Montgomery Street, Suite 1200
San Francisco, California 94104
(800) 821-0803
______________________________
This Prospectus/Joint Proxy Statement relates to the proposed transfer of
the assets and the assumption of certain liabilities of each of Govett Asia Fund
(the "Asia Fund") and Govett Latin America Fund (the "Latin America Fund," and
together with the Asia Fund, the "Acquired Funds"), each a series of The Govett
Funds, Inc., a Maryland corporation (the "Company"), to Govett Emerging Markets
Equity Fund (the "Acquiring Fund," and together with the Acquired Funds, the
"Funds"), another series of the Company, in exchange for Class A Retail shares
of common stock, $.00001 par value per share, of the Acquiring Fund ("Acquiring
Fund Shares"). Following such transfer, Acquiring Fund Shares will be
distributed to shareholders of the Acquired Funds and each Acquired Fund will be
liquidated. As a result of the proposed transaction, each shareholder of Class A
Retail shares of one or both Acquired Funds will receive in exchange for his or
her Class A Retail shares of such Acquired Fund, Class A Retail shares of the
Acquiring Fund with an aggregate value equal to the value of such shareholder's
shares of the Acquired Fund, calculated as of the close of business on the
business day immediately prior to the exchange. Currently, only Class A Retail
shares of each Acquired Fund are issued and outstanding.
This Prospectus/Joint Proxy Statement is furnished to the shareholders of
the Acquired Funds in connection with the solicitation of proxies by and on
behalf of the Company's Board of Directors to be used at a Special Meeting of
Shareholders of the Acquired Funds to be held at the offices of
PricewaterhouseCoopers LLP, 333 Market Street, 21st Floor, San Francisco,
California 94104, at 2:00 p.m. local time on December 15, 1998 and at any
adjournments thereof (the "Meeting"). This document also serves as a prospectus
of the Acquiring Fund and
<PAGE>
covers the proposed issuance of Acquiring Fund Shares. The Board of Directors of
the Company may hereinafter be referred to as the "Board of Directors."
The investment objective of the Asia Fund is to seek long-term capital
appreciation by investing primarily in equity securities of companies located in
Asia. The investment objective of the Latin America Fund is to seek long-term
capital appreciation by investing primarily in equity and debt securities of
issuers located in Latin America. The investment objective of the Acquiring
Fund is to seek long-term capital appreciation by investing primarily in equity
securities of issuers located in emerging markets. Each of the Asia Fund and
the Acquiring Fund is a diversified series of the Company; however, the Latin
America Fund is not a diversified series of the Company. The Company is an
open-end management company registered under the Investment Company Act of 1940,
as amended (the "1940 Act").
This Prospectus/Joint Proxy Statement, which should be retained for future
reference, sets forth concisely the information that shareholders of the
Acquired Funds should know before investing. This Prospectus/Joint Proxy
Statement is accompanied by the Prospectus of the Class A Retail shares of the
Funds dated April 17, 1998, as supplemented June 4, 1998, which is incorporated
by reference herein. It also is accompanied by the Annual Report of the Company
for the year ended December 31, 1997 and the semi-annual report of the Company
for the period ended June 30, 1998. A Statement of Additional Information dated
October 16, 1998, containing additional information relevant to the proposed
transaction has been filed with the Securities and Exchange Commission and is
incorporated by reference into this Prospectus/Joint Proxy Statement. A copy of
such Statement of Additional Information may be obtained without charge by
writing to The Govett Funds, Inc., 250 Montgomery Street, Suite 1200, San
Francisco, California 94104, or by calling toll-free (800) 731-1755.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
October 16, 1998
Date of Prospectus/Joint Proxy Statement
2
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
SUMMARY................................................................... 4
PRINCIPAL RISK FACTORS.................................................... 10
REASONS FOR THE REORGANIZATION............................................ 12
INFORMATION ABOUT THE REORGANIZATION...................................... 13
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES.......................... 16
COMPARATIVE INFORMATION ON DISTRIBUTION ARRANGEMENTS...................... 21
COMPARATIVE INFORMATION ON SHAREHOLDER SERVICES........................... 21
FISCAL YEAR............................................................... 21
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS............................. 22
MANAGEMENT................................................................ 22
ADDITIONAL INFORMATION ABOUT THE FUNDS.................................... 23
VOTING INFORMATION........................................................ 23
EXPERTS................................................................... 25
OTHER MATTERS............................................................. 25
NO ANNUAL MEETING OF SHAREHOLDERS......................................... 25
Exhibit A: Plan of Reorganization......................................... A-1
</TABLE>
3
<PAGE>
SUMMARY
The following paragraphs summarize certain information contained in or
incorporated by reference in this Prospectus/Joint Proxy Statement. This
summary is not intended to be a complete statement of all material features of
the proposed Reorganization (as described more fully below) and is qualified in
its entirety by reference to the full text of this Prospectus/Joint Proxy
Statement and the documents referred to herein.
Proposed Transaction. The Board of Directors of the Company has approved a
--------------------
Plan of Reorganization (the "Plan of Reorganization") providing for the transfer
of all of the assets of each Acquired Fund to the Acquiring Fund (subject to the
assumption by the Acquiring Fund of the liabilities of the Acquired Fund,
reflected on a statement of assets and liabilities of that Acquired Fund as of
the close of business on the Valuation Date, as defined below) in exchange for
Acquiring Fund Shares at a closing to be held following the satisfaction of the
conditions to the Reorganization (the "Closing"). The aggregate net asset value
of full and fractional Acquiring Fund Shares to be issued to shareholders of
each Acquired Fund will equal the value of the aggregate net assets of the
Acquired Fund as of the close of business on the business day immediately prior
to the Closing (the "Valuation Date"). The number of Class A Retail shares
(collectively, the "shares" or individually, a "share") to be issued to each
Acquired Fund will be determined by dividing (a) the aggregate net assets in
Class A Retail shares of that Acquired Fund by (b) the net asset value per Class
A Retail share, respectively, of the Acquiring Fund, each computed as of the
close of business on the Valuation Date. Acquiring Fund Shares will be
distributed to shareholders of each Acquired Fund, and such Acquired Fund will
be liquidated. The proposed transaction described above is referred to in this
Prospectus/Joint Proxy Statement as the "Reorganization."
As a result of the Reorganization, each Acquired Fund shareholder will
receive, in exchange for his or her Class A Retail shares of such Acquired Fund,
Class A Retail shares of the Acquiring Fund with an aggregate value equal to the
value of such shareholder's shares of the Acquired Fund, calculated as of the
close of business on the Valuation Date.
At or prior to the Closing, each of the Acquired Funds shall declare a
dividend or dividends which, together with all previous dividends, shall have
the effect of distributing to that Acquired Fund's shareholders all of the
Acquired Fund's investment company income for all taxable years ending at or
prior to the Closing (computed without regard to any deduction for dividends
paid) and all of its net capital gains realized (after reduction for any capital
loss carry-forward) in all taxable years ending at or prior to the Closing. The
Directors, including the Directors who are not "interested persons" of the
Company as defined in the Investment Company Act of 1940, as amended (the "1940
Act"), have determined that the interests of existing shareholders of the Funds
will not be diluted as a result of the transactions contemplated by the
Reorganization and that the Reorganization would be in the best interests of the
shareholders of the Acquired Funds and the Acquiring Fund. See "Information
About the Reorganization."
4
<PAGE>
THE DIRECTORS OF THE COMPANY RECOMMEND THAT THE SHAREHOLDERS OF EACH
ACQUIRED FUND VOTE FOR APPROVAL OF THE PLAN OF REORGANIZATION.
Approval of the Plan of Reorganization by the shareholders of the Asia Fund
is a condition of the consummation of the Reorganization with respect to the
Asia Fund, and approval of the Plan of Reorganization by the shareholders of the
Latin America Fund is a condition of the consummation of the Reorganization with
respect to the Latin America Fund. At the discretion of the Board of Directors,
the Reorganization may proceed with respect to one Acquired Fund if the Plan of
Reorganization is approved by the shareholders of that Acquired Fund even if the
Plan of Reorganization is not approved by the shareholders of the other Acquired
Fund. With respect to either Acquired Fund, the affirmative vote of the holders
of a majority of the outstanding shares (within the meaning of the 1940 Act) of
such Acquired Fund, voting together as a single class, is required to approve
the Plan of Reorganization on behalf of such Fund. A "majority" vote is defined
in the 1940 Act as the vote of the holders of the lesser of (a) 67% or more of
the shares of an Acquired Fund, voting together as a single class, present at
the Meeting, if the holders of more than 50% of the outstanding shares are
present or represented by proxy, or (b) more than 50% of the outstanding shares
of an Acquired Fund, voting together as a single class. See "Voting
Information."
Tax Consequences. Counsel to the Company, Goodwin, Procter & Hoar LLP,
----------------
will opine that, subject to customary assumptions and representations, upon
consummation of the Reorganization with respect to each Acquired Fund and the
transfer of substantially all of the assets of such Acquired Fund to the
Acquiring Fund, with respect to such Acquired Fund: (i) the transfer of all the
assets of such Acquired Fund for Acquiring Fund Shares and the assumption by the
Acquiring Fund of all stated liabilities of such Acquired Fund will constitute a
"reorganization" for federal income tax purposes, and the Acquired Fund and the
Acquiring Fund will each be a "party to a reorganization" for federal income tax
purposes; (ii) no gain or loss will be recognized by such Acquired Fund or the
Acquiring Fund upon the transfer of the Acquired Fund assets to the Acquiring
Fund in exchange for Acquiring Fund Shares; (iii) no gain or loss will be
recognized by shareholders of the Acquired Fund upon the exchange of shares of
the Acquired Fund for Acquiring Fund Shares; (iv) the basis of Acquiring Fund
Shares received by each Acquired Fund shareholder pursuant to the Reorganization
will be the same as the basis of such Acquired Fund shares exchanged therefor;
and (v) the basis of the Acquired Fund assets in the hands of the Acquiring Fund
will be the same as the basis of such assets in the hands of the Acquired Fund
immediately prior to the Reorganization. The receipt of such an opinion upon
the Closing is a condition to the Reorganization. See "Information About the
Reorganization."
Investment Objectives and Policies. The investment objective of the Asia
----------------------------------
Fund is to seek long-term capital appreciation by investing primarily in equity
securities of companies located in Asia. Under normal market conditions, Asia
Fund invests primarily in common stocks, preferred stocks and warrants to
acquire such stocks of issuers located in any country in Asia, provided that the
fund invests in at least three issuers located in different countries.
5
<PAGE>
Asia Fund may invest up to 35% of its total assets in other equity securities,
in debt obligations convertible into equity securities and in non-convertible
debt securities.
The investment objective of the Latin America Fund is to seek long-term
capital appreciation by investing primarily in equity and debt securities of
issuers located in Latin America. Under normal market conditions, Latin America
Fund invests primarily in common stocks, preferred stocks, warrants to acquire
such stocks and debt securities (such as, government or sovereign or corporate
bonds, notes and debentures) of issuers located in any country in Latin America.
Latin America Fund must invest (a) in at least three issuers located in
different countries and (b) no more than 40% of its total assets in issuers
located in any one country, except Brazil and Mexico, in which the fund may
invest up to 60% of total assets in either country. Latin America Fund may
invest up to 35% of its total assets in equity securities and debt securities of
issuers located in the U.S.
The investment objective of the Acquiring Fund is to seek long-term capital
appreciation by investing primarily in equity securities of issuers located in
emerging markets. Under normal market conditions, the Acquiring Fund invests
primarily in common stocks, preferred stocks and warrants to acquire such stocks
of issuers located in emerging or developing markets, provided that the fund
invests in at least three issuers located in different countries. The Acquiring
Fund may invest up to 35% of its total assets in other equity securities, in
debt obligations convertible into equity securities and in non-convertible debt
securities.
In other respects, however, the investment objectives, policies and
restrictions of the Funds are substantially similar. To the extent that there
are other differences in the policies and restrictions of the Funds, Acquired
Fund shareholders should consider such differences. These differences are
discussed below under "Comparison of Investment Objectives and Policies."
Management and Other Service Providers. The business affairs of the
--------------------------------------
Company are managed by its Board of Directors. For each of the Funds, AIB
Govett, Inc. (the "Investment Manager") serves as investment adviser, AIB Govett
Asset Management Limited serves as investment subadviser, FPS Broker Services,
Inc. serves as distributor (the "Distributor"), FPS Services, Inc. serves as
transfer agent and dividend paying agent (the "Transfer Agent"), The Chase
Manhattan Bank serves as custodian, Chase Global Funds Services Company provides
administration and accounting services and PricewaterhouseCoopers LLP is the
independent auditor. See "Management."
Advisory Fees and Expenses. The following tables summarize the shareholder
--------------------------
transaction expenses applicable to each Fund and the annual operating expenses
for the Funds on an individual basis and for the Acquiring Fund on a pro forma
basis after giving effect to the Reorganization. This table is followed by a
helpful example illustrating the effect of these expenses on a $1,000 investment
in each Fund.
6
<PAGE>
SHAREHOLDER TRANSACTION EXPENSES APPLICABLE TO EACH FUND
- --------------------------------------------------------
CLASS A RETAIL
--------------
Shareholder Transaction Expenses
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)................ None
Maximum Sales Charge Imposed on Reinvested
Dividends (as a percentage of offering price)...... None
Maximum Deferred Sales Charge (as a percentage
of original purchase price or redemption
proceeds, as applicable)........................... None
Redemption Fees (as a percentage of amount
redeemed, if applicable)........................... None
Exchange Fees......................................... None
7
<PAGE>
TABLE OF EXPENSES OF THE ACQUIRING FUND (INDIVIDUALLY AND ON A PRO FORMA BASIS)
AND EACH ACQUIRED FUND (AS OF JUNE 30, 1998)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRO FORMA GOVETT EMERGING MARKETS EQUITY FUND
(WITH BOTH ACQUIRED FUNDS)
<S> <C> <C> <C>
Govett Emerging Markets Equity Fund Class A Retail Class A Retail
-------------- --------------
Annual Fund Operating Expenses (as a Annual Fund Operating Expenses (as a
percentage of average net assets)* percentage of average net assets*
Management Fees.................. 1.00% Management Fees..................... 1.00%
12b-1 Fees....................... 0.35% 12b-1 Fees.......................... 0.35%
Other Expenses................... 2.38% Other Expenses...................... x.xx%
---- ----
Operating Expenses without....... Operating Expenses without..........
(without reimbursement)........ 3.73% (without reimbursement)........... (x.xx)%
Reimbursement*................... (1.23%) Reimbursement*...................... x.xx%
Total Fund Operating Expenses.... 2.50% Total Fund Operating Expenses....... 2.50%
====
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA GOVETT EMERGING MARKETS EQUITY FUND
(WITH ASIA FUND ONLY)
<S> <C> <C> <C>
Govett Asia Fund Class A Retail Class A Retail
-------------- --------------
Annual Fund Operating Expenses (as a Annual Fund Operating Expenses (as a
percentage of average net assets)* percentage of average net assets*
Management Fees.................. 1.00% Management Fees..................... 1.00%
12b-1 Fees....................... 0.35% 12b-1 Fees.......................... 0.35%
Other Expenses................... 14.69% Other Expenses...................... x.xx%
----- ----
Operating Expenses without....... Operating Expenses without..........
(without reimbursement)........ 16.04% (without reimbursement)........... (x.xx)%
Reimbursement*................... (13.54%) Reimbursement*...................... x.xx%
Total Fund Operating Expenses.... 2.50% Total Fund Operating Expenses....... 2.50%
---- ====
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA GOVETT EMERGING MARKETS EQUITY FUND
(WITH LATIN AMERICA FUND ONLY)
<S> <C> <C> <C>
Govett Latin America Fund Class A Retail Class A Retail
-------------- --------------
Annual Fund Operating Expenses (as a Annual Fund Operating Expenses (as a
percentage of average net assets)* percentage of average net assets*
Management Fees.................. 1.00% Management Fees..................... 1.00%
12b-1 Fees....................... 0.35% 12b-1 Fees.......................... 0.35%
Other Expenses................... 4.36% Other Expenses...................... x.xx%
----- ----
Operating Expenses without....... Operating Expenses without..........
(without reimbursement)........ 5.71% (without reimbursement)........... (x.xx)%
Reimbursement*................... (3.21%) Reimbursement*...................... x.xx%
Total Fund Operating Expenses.... 2.50% Total Fund Operating Expenses....... 2.50%
==== ====
</TABLE>
______________________________________
* For the period ended June 30, 1998, AIB Govett, Inc. waived a portion of its
management fee and reimbursed a portion of the other operating expenses of the
Funds, so that the actual net operating expenses for the period were 2.50% of
net assets for the Acquiring and Acquired Funds.
8
<PAGE>
EXAMPLE:
You would pay the following expenses
on a $1,000 investment assuming (1) 5% annual return
and (2) redemption of the entire investment
at the end of each time period:
<TABLE>
<CAPTION>
PRO FORMA ACQUIRING FUND
GOVETT EMERGING MARKETS EQUITY FUND (WITH BOTH ACQUIRED FUNDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- --------
Class A Retail shares........ $74 $123 $176 $319 $74 $123 $176 $319
</TABLE>
<TABLE>
<CAPTION>
GOVETT ASIA FUND PRO FORMA ACQUIRING FUND
(WITH ASIA FUND)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- --------
Class A Retail shares........ $74 $123 $176 $319 $74 $123 $176 $319
</TABLE>
<TABLE>
<CAPTION>
GOVETT LATIN AMERICA FUND PRO FORMA ACQUIRING FUND
(WITH LATIN AMERICA FUND ONLY)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- --------
Class A Retail shares........ $74 $123 $176 $319 $74 $123 $176 $319
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED AS A REPRESENTATION OF PAST OR FUTURE
RETURNS OR EXPENSES. ACTUAL RETURNS OR EXPENSES MAY BE GREATER OR LESS THAN
SHOWN.
Multiple Class Structure; Distribution Arrangements. Each Fund has
---------------------------------------------------
authorized three classes of shares: Class A Retail shares, Class B shares and
Institutional Class shares. Currently, each Fund only has Class A Retail shares
outstanding. Only Class A Retail and Institutional Class shares may be purchased
through securities dealers which have entered into sales agreements with the
Distributor. When offered, Class A Retail and Institutional Class shares may be
purchased at the next determined net asset value per share plus a sales charge,
which may be imposed on a deferred basis.
In the proposed Reorganization, shareholders of the Asia Fund will receive
Class A Retail shares of the Acquiring Fund, and shareholders of the Latin
America Fund will receive Class A Retail shares of the Acquiring Fund, that is,
the corresponding class of shares of the Acquiring Fund which they currently
hold in each Acquired Fund, respectively. The Class A Retail shares of the
Acquiring Fund have identical arrangements with respect to the imposition of
distribution and service fees as Class A Retail shares of the Acquired Funds.
Dividends and Capital Gains. The Funds have identical policies with regard
---------------------------
to dividends and distributions. Each Fund's policy is to distribute at least
annually substantially all of their net investment income and net realized
capital gains. After the closing of the Reorganization, Acquired Fund
shareholders who currently have dividends reinvested will continue to have
dividends reinvested in the Acquiring Fund and those who currently have
9
<PAGE>
capital gains reinvested will continue to have capital gains reinvested in the
Acquiring Fund. The number of shares received in connection with any such
reinvestment will be based upon the net asset value per share of the applicable
class of shares of the Acquiring Fund in effect on the record date. See
"Comparative Information on Shareholder Services."
Exchange Rights. Each Fund currently has identical exchange privileges to
---------------
the other Funds. Shareholders of a Fund may exchange their shares for shares of
a corresponding class of shares, when available, of the other publicly offered
Govett Funds at any time on the basis of the relative net asset values of the
respective shares to be exchanged, subject to compliance with applicable
securities laws. Shareholders of any other such fund may similarly exchange
their shares for shares of an available corresponding class of any of the Funds.
See "Comparative Information on Shareholder Services."
Redemption Procedures. Each Fund offers the same redemption features,
---------------------
including the acceptance of redemption requests by mail, telephone and wire,
provided that applicable conditions are met. Any request to redeem shares of
either Acquired Fund received and processed prior to the Reorganization will be
treated as a redemption of shares of that Acquired Fund. Any request to redeem
shares received or processed after the Reorganization will be treated as a
request to redeem shares of the Acquiring Fund. See "Comparative Information on
Shareholder Services."
Minimum Account Size. Each Fund reserves the right to redeem an account if
--------------------
the aggregate value of the shares in such account is less than $500 for a period
of 30 days after notice is mailed to the applicable shareholder. The Acquiring
Fund shareholder accounts established pursuant to the Reorganization with a
value of less than $500 will therefore be subject to redemption upon 30 days'
prior notice. During such 30-day period, a shareholder will have the option of
avoiding such redemption by increasing the value of the account to $500 or more.
PRINCIPAL RISK FACTORS
The investment risks of the Funds generally are similar because of the
similarities of investment objectives and policies of the Funds. However, the
Asia Fund's ability to achieve its investment objective depends on the
performance of stocks of companies located in Asia, whereas the Acquiring Fund's
ability to achieve its investment objective depends on the performance of stocks
of companies located in emerging markets, many of which may not be in Asia.
Similarly, the Latin America Fund's ability to achieve its investment objective
depends on the performance of stocks of companies located in Latin America, as
well as government, corporate and other issuers to meet their continuing
obligations for the payment of principal and interest on certain debt
obligations. In contrast, the Acquiring Fund's ability to achieve its
investment objective depends on the performance of stocks of companies located
in emerging markets, many of which may not be in Latin America, and the
Acquiring Fund is subject to an investment restriction that prohibits more than
35% of the assets of the Acquiring
10
<PAGE>
Fund from being invested in debt securities. See "Comparison of Investment
Objectives and Policies." Such risks are more fully discussed under the captions
"An Overview of the Funds," "Investment Techniques and Policies" and "Investment
Risks" in the Prospectus of the Acquired Fund and the Acquiring Fund enclosed
with this Prospectus/Joint Proxy Statement.
Each of the Funds is subject to market risk--the possibility that stock and
bond prices will decline over short, or even extended, periods--to a greater
degree than domestic investments, as a result of a variety of factors that can
affect stock and bond prices. For example, there may be less information
publicly available about foreign companies, and less government regulation and
supervision of foreign stock exchanges, securities dealers and publicly traded
companies than is available about comparable U.S. entities. Accounting,
auditing and financial reporting standards, practices and requirements are not
uniform and may be less rigorous than U.S. standards. Securities of some
foreign companies are less liquid, and their prices are more volatile, than
securities of comparable U.S. companies. Trading settlement practices in some
markets may be slower or less frequent than in the U.S., which could affect
liquidity of a fund's portfolio. Trading practices abroad may offer less
protection for investors. In some foreign countries, any or all of
expropriation, nationalization and confiscation are risks to which companies
may be subject. A foreign government's limits on the repatriation of
distributions and profits and on the removal of securities, property or other
assets from that country may affect a fund's liquidity and the value of its
assets. Political or social instability, including war or other armed conflict,
or diplomatic developments also could affect the Funds.
The risks of investing in foreign securities are intensified if the
investments are in emerging or developing markets. In general, these markets
may offer special investment opportunities because their securities markets,
industries and capital structure are growing rapidly, but investments in these
countries involve special risks not present in the U.S. or in mature foreign
markets, such as Germany or the United Kingdom. Settlement of securities trades
may be subject to extended delays, so that securities purchased or the proceeds
of sales of securities may not be received on a timely basis. Emerging
economies generally have smaller, less developed trading markets and exchanges,
which may affect liquidity, so that a Fund may not be able to dispose of those
securities quickly and at a reasonable price. These markets may also experience
greater volatility, which can materially affect the value of the Acquiring
Fund's portfolio and, therefore, its net asset value. Emerging market countries
may have relatively unstable governments. In such environments the risk of
nationalization of business or of prohibitions on repatriation of assets is
greater than in more stable, developed political and economic circumstances.
The economy of a developing market country may be predominantly based on only a
few industries, and it may be highly vulnerable to changes in local or global
trade conditions. The legal and accounting systems, and mechanisms for
protecting property rights, may not be as well developed as those in more mature
economies. In addition, some emerging markets countries have general or
industry-specific restrictions on foreign ownership that may limit or eliminate
the Fund's opportunities to acquire desirable securities.
11
<PAGE>
REASONS FOR THE REORGANIZATION
In reaching the decision to recommend that the shareholders of the Acquired
Funds vote to approve the Reorganization, the Board of Directors, including the
Directors who are not interested persons of the Company, concluded that the
Reorganization would be in the best interests of the respective Acquired Funds
and that the interests of existing shareholders of the Acquiring Funds will not
be diluted as a consequence of the combination. The Directors considered a
number of factors, including the smaller size and higher expenses of the
Acquired Funds before fee waivers and reimbursements compared to the Acquiring
Fund and the efficiencies resulting from combining the operations of two funds
into a separate third fund with the same investment manager and subadviser, the
same multiple class structure, the same distribution fees and similar investment
objectives and policies.
As reflected in the capitalization table in "Information About the
Reorganization--Capitalization" set forth below, each Acquired Fund is small. As
a result, its expenses are relatively high and have been heavily subsidized by
the Investment Manager or the Subadviser since inception; see "Table of Expenses
of Acquiring Fund (individually and on a pro forma basis) and Acquired Funds"
set forth in the "Summary" above. The Investment Manager reserves the right to
discontinue at any time its voluntary subsidization of expenses of each Acquired
Fund; consequently, either or both Acquired Funds' expenses could increase in
the future. On the other hand, the Acquiring Fund has substantially more assets
and a lower actual expense ratio. By combining the assets of either or both
Acquired Funds with the Acquiring Fund, each Acquired Fund may, over time,
benefit from certain economies of scale. In particular, greater portfolio
diversification and more efficient portfolio management could result from a
larger asset base. Greater diversification is expected to be beneficial to
shareholders because it may reduce the negative effect which the adverse
performance of any one portfolio security may have on the performance of the
portfolio as a whole. Because each Fund has the same investment adviser,
subadviser, custodian, transfer agent and distributor, combining either or both
Acquired Funds with the Acquiring Fund could, over time, produce administrative
economies of scale, resulting in net benefits to the Acquired Funds'
shareholders.
These benefits substantially offset the loss to the shareholders of the
Asia and Latin America Funds of having a fund more devoted to investments in
companies located in each respective region, as compared to the Acquiring Fund
which focuses more on securities of companies located in emerging markets.
THE BOARD OF DIRECTORS OF THE COMPANY BELIEVES THAT THE PROPOSED
REORGANIZATION IS IN THE BEST INTERESTS OF THE SHAREHOLDERS OF EACH ACQUIRED
FUND AND RECOMMENDS THAT SHAREHOLDERS OF EACH ACQUIRED FUND VOTE FOR THE
REORGANIZATION.
12
<PAGE>
INFORMATION ABOUT THE REORGANIZATION
At a meeting held on August 14, 1998, the Board of Directors of the
Company approved the Plan of Reorganization substantially in the form set forth
as Exhibit A to this Prospectus/Joint Proxy Statement.
---------
Plan of Reorganization. The Plan of Reorganization provides that, at the
----------------------
Closing, the Acquiring Fund will acquire all of the assets of either or both of
the Acquired Funds (subject to the assumption by the Acquiring Fund of all of
the liabilities of the respective Acquired Fund reflected on an unaudited
statement of assets and liabilities) in exchange for Acquiring Fund Shares. The
aggregate net asset value of full and fractional Acquiring Fund Shares to be
issued to shareholders of the Asia Fund and Latin America Fund will equal the
value of the aggregate net assets of each respective Fund as of the close of
business on the Valuation Date. The number of Class A Retail shares to be issued
to each Acquired Fund will be determined by dividing (a) the aggregate net
assets in Class A Retail shares of that Acquired Fund by (b) the net asset value
per Class A Retail share of the Acquiring Fund, each computed as of the close of
business on the Valuation Date. Portfolio securities of the Funds will be
valued in accordance with the valuation practices of the Acquiring Fund which
are described under the caption "Management of the Funds--How the Funds Value
Their Shares" of the Acquiring Fund Prospectus and which are identical to those
of the Acquired Funds.
The Acquiring Fund will assume all liabilities, expenses, costs, charges
and reserves reflected on an unaudited statement of assets and liabilities of
each Acquired Fund prepared as of the close of business on the Valuation Date in
accordance with generally accepted accounting principles consistently applied
from the prior audited period. The Acquiring Fund will assume only those
liabilities of each Acquired Fund reflected in that unaudited statement of
assets and liabilities and will not assume any other liabilities. Such
statement of assets and liabilities will reflect all liabilities known to the
such Acquired Fund as of the date thereof. At or prior to the Closing, each
Acquired Fund shall declare a dividend or dividends which, together with all
prior such dividends, shall have the effect of distributing to the Acquired
Fund's shareholders all of the Acquired Fund's investment company income for all
taxable years ending at or prior to the Closing (computed without regard to any
deduction for dividends paid) and all of its net capital gains realized (after
reduction for any capital loss carry-forward) in all taxable years ending at or
prior to the Closing.
At or as soon as practicable after the Closing, each Acquired Fund will
liquidate and distribute pro rata to its shareholders of record as of the close
of business on the Valuation Date the full and fractional Acquiring Fund Shares
received by the Acquired Fund. Such liquidation and distribution will be
accomplished by the establishment of shareholder accounts on the share records
of the Acquiring Fund in the name of each such shareholder of such Acquired
Fund, representing the respective pro rata number of full and fractional
Acquiring Fund Shares due such shareholder. All of the Acquiring Fund's future
distributions attributable to the shares issued in the Reorganization will be
paid to shareholders in cash or invested in additional shares of the Acquiring
Fund at the price in effect as described in the
13
<PAGE>
Acquiring Fund's current Prospectus on the respective payment dates in
accordance with instructions previously given by the shareholder to the Acquired
Fund's transfer agent. As of the Closing, each outstanding certificate which,
prior to the Closing, represented shares of the Acquired Fund will be deemed for
all purposes to evidence ownership of the number of Acquiring Fund Shares
issuable with respect thereto pursuant to the Reorganization. After the Closing,
certificates originally representing Class A Retail shares of each Acquired Fund
will be rendered null and void and nonnegotiable; upon special request and
surrender of such certificates to the Transfer Agent, holders of these
nonnegotiable certificates shall be entitled to receive certificates
representing the number of Acquiring Fund Shares issuable with respect thereto.
Notwithstanding approval by shareholders of either or both Acquired Fund,
the Plan of Reorganization may be terminated at any time prior to the
consummation of the Reorganization with respect to either Acquired Fund without
liability on the part of any the Company or its Directors, officers or
shareholders, by the Company if circumstances should develop that, in the
opinion of the Company, make proceeding with the Reorganization with respect to
either or both Acquired Funds inadvisable. The Plan of Reorganization may be
amended, waived or supplemented in such manner as may be mutually agreed upon by
the authorized officers of the Company; provided, however, that following the
Meeting, no such amendment, waiver or supplement may have the effect of changing
the provision for determining the number of Acquiring Fund Shares to be issued
to the shareholders of each Acquired Fund to the detriment of such shareholders
without their further approval. The expenses incurred in connection with
entering into and carrying out the provisions of the Plan of Reorganization,
whether or not the Reorganization is consummated, will be paid for by the
Investment Manager.
Description of Acquiring Fund Shares. Full and fractional shares of the
------------------------------------
Acquiring Fund will be issued to the Acquired Fund shareholders in accordance
with the procedures under the Plan of Reorganization as described above. Each
share will be fully paid and non-assessable when issued and transferable without
restrictions and will have no preemptive or cumulative voting rights and have
only such conversion or exchange rights as the Board of Directors of the Company
may grant in its discretion.
Federal Income Tax Consequences. Counsel to the Funds, Goodwin, Procter &
-------------------------------
Hoar LLP, will opine that, subject to customary assumptions and representations,
on the basis of the existing provisions of the Internal Revenue Code (the
"Code"), the Treasury Regulations promulgated thereunder and current
administrative and judicial interpretations thereof, for federal income tax
purposes: (i) the transfer of all the assets of each Acquired Fund in exchange
for Acquiring Fund Shares and the assumption by the Acquiring Fund of all stated
liabilities of the Acquired Fund will constitute a "reorganization" within the
meaning of Section 368(a)(1)(C) of the Code, and the Acquiring Fund and the
Acquired Fund each will be a "party to a reorganization" within the meaning of
Section 368(b) of the Code; (ii) no gain or loss will be recognized by such
Acquired Fund or the Acquiring Fund upon the transfer of the Acquired Fund
assets to the Acquiring Fund in exchange for Acquiring Fund Shares; (iii) no
gain or loss will be recognized by shareholders of either Acquired Fund upon the
exchange of
14
<PAGE>
the Acquired Fund shares for Acquiring Fund Shares; (iv) the basis of Acquiring
Fund Shares received by each Acquired Fund shareholder pursuant to the
Reorganization will be the same as the basis of the Acquired Fund shares
exchanged therefor; (v) the basis of the Acquired Fund assets in the hands of
the Acquiring Fund will be the same as the basis of such assets in the hands of
such Acquired Fund immediately prior to the Reorganization. The receipt of such
an opinion upon the Closing is a condition to the consummation of the
Reorganization. If the transfer of the assets of either Acquired Fund in
exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund of
such liabilities of such Acquired Fund do not constitute a tax-free
reorganization, each shareholder of such Acquired Fund will recognize gain or
loss equal to the difference between the value of Acquiring Fund Shares such
shareholder acquires and the tax basis of such shareholder's Acquired Fund
shares.
Shareholders of the Acquired Funds should consult their tax advisers
regarding the effect, if any, of the proposed Reorganization in light of their
individual circumstances. The foregoing discussion only relates to the federal
income tax consequences of the Reorganization, and shareholders of the Acquired
Funds should also consult their tax advisers as to state and local tax
consequences, if any, of the Reorganization.
Capitalization. The following table sets forth the capitalization of each
--------------
Fund as of June 30, 1998, and on a pro forma basis as of that date giving effect
to each and both proposed acquisitions of assets at net asset value. The pro
forma data reflects an exchange ratio of 0.452 for Class A Retail shares of the
Acquiring Fund issued for each Class A Retail share of the Asia Fund and an
exchange ratio of 0.753 for Class A Retail shares of the Acquiring Fund issued
for each Class A Retail share of the Latin America Fund.
<TABLE>
<CAPTION>
Combined Combined
Combined Asia and Latin Latin America Asia, Latin America
Acquiring Asia Acquiring Funds America and Acquiring Funds and Acquiring Funds
Fund Fund After Reorganization Fund After Reorganization After Reorganization
---------- -------- -------------------- -------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Net assets (in 000s)....... $ 19,414 $ 949 $ 20,363 $ 2,980 $ 22,394 $ 23,343
Net asset value per share
Class A Retail.......... $ 9.76 $ 4.41 $ 9.76 $ 7.35 $ 9.76 $ 9.76
Shares outstanding
Class A Retail.......... 1,989,192 215,341 2,086,415 405,647 2,294,488 2,391,749
</TABLE>
______________
The table set forth above should not be relied on to reflect the number of
shares to be received in the Reorganization; the actual number of shares to be
received will depend upon the net asset value and number of shares outstanding
of each Fund at the time of the Reorganization.
The following table sets forth the number of outstanding shares of common
stock of each Fund as of June 30, 1998, and the approximate percentages of
the outstanding shares of each Fund that were beneficially owned by the
Investment Manager.
15
<PAGE>
<TABLE>
<CAPTION>
Name of Fund Total Shares Outstanding
- ------------------------------------------ ------------------------
<S> <C>
Asia Fund Class A Retail Shares........... 215,341
Latin America Fund Class A Retail Shares.. 405,647
Acquiring Fund Class A Retail Shares...... 1,989,192
</TABLE>
In addition, as of such date, the Directors and officers of the Company as
a group owned less than one percent of the outstanding shares of each Fund. The
Investment Manager and its affiliates have indicated to the Company that with
respect to their shares of the Acquired Funds they intend to vote for and
against the proposal in the same relative proportion as do the other
shareholders of the Acquired Funds who cast votes at the Meeting.
The following persons or entities either beneficially, as of June 30, 1998,
owned or were the shareholder of record of more than 5% of the outstanding
shares of the Acquired Funds:
<TABLE>
<CAPTION>
Name of Fund Percent of Shares Owned Name and Address of Holder
- ------------------------- ----------------------- ----------------------------
<S> <C> <C>
Govett Asia Fund 6.35% James G. Lindell
9257 Wedgewood Drive
Woodbury, MN 55125
Govett Latin America Fund 18.77% Charles Schwab & Co. Inc.*
Special Custody Acc't
Exclu Bene Cust
Attention Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
</TABLE>
- ----------------
* The investment adviser believes this account holder does not beneficially own
any of the shares in this account.
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
Information about the investment objectives and policies of the Funds is
summarized below. More complete information regarding the same is set forth in
the Prospectus of the Funds dated April 17, 1998, as supplemented June 4, 1998,
which is incorporated by reference herein (a copy is enclosed), and in the
Statement of Additional Information which has been filed with the Securities and
Exchange Commission in connection with the Reorganization. Shareholders should
consult the Prospectus and the Statement of Additional Information for a more
detailed comparison.
Investment Objectives. The investment objective of the Asia Fund is to seek
---------------------
long-term capital appreciation by investing primarily in equity securities of
companies located in Asia. Under normal market conditions, Asia Fund invests
primarily in common stocks, preferred stocks and warrants to acquire such stocks
of issuers located in any country in Asia, provided that the fund invests in at
least three issuers located in different countries. Asia Fund may invest up to
35% of its total assets in other equity securities, in debt obligations
convertible into equity securities and in non-convertible debt securities.
The investment objective of the Latin America Fund is to seek long-term
capital appreciation by investing primarily in equity and debt securities of
issuers located in Latin America. Under normal market conditions, Latin America
Fund invests primarily in common stocks, preferred stocks, warrants to acquire
such stocks and debt securities (such as, government or sovereign or corporate
bonds, notes and debentures) of issuers located in any country in Latin America.
Latin America Fund must invest (a) invests in at least three issuers located in
different countries and (b) no more than 40% of its total assets in issuers
located in any one country, except Brazil and Mexico, in which the fund may
invest up to 60% of total assets in either country. Latin America Fund may
invest up to 35% of its total assets in equity securities and debt securities of
issuers located in the U.S.
16
<PAGE>
The investment objective of the Acquiring Fund is to seek long-term capital
appreciation by investing primarily in equity securities of issuers located in
emerging markets. Under normal market conditions, the Acquiring Fund invests
primarily in common stocks, preferred stocks and warrants to acquire such stocks
of issuers located in emerging or developing markets, provided that the fund
invests in at least three issuers located in different countries. The Acquiring
Fund may invest up to 35% of its total assets in other equity securities, in
debt obligations convertible into equity securities and in non-convertible debt
securities.
The principal difference in the investment objectives of the Funds is that
under normal market conditions, the Asia Fund focuses its investments in
companies located in Asia and the Latin America Fund focuses its investments in
companies located in Latin America, while the Acquiring Fund focuses more on
securities of companies located in emerging markets, which may not include those
countries covered by the Asia Fund or the Latin America Fund. Also, the Latin
America Fund may invest a greater proportion of its assets in debt
securities,whereas the Acquiring Fund primarily invests in equity securities and
may only invest up to 35% of its total assets in debt securities.
Investment Restrictions. The investment restrictions of the Funds are
-----------------------
substantially similar. Set forth below is a summary of each fund's investment
restrictions. The summary is qualified in its entirety by reference to and is
made subject to the complete text of the investment restrictions of each fund,
which are set forth in the Statement of Additional Information of the funds.
Certain of the investment restrictions of each Fund are deemed fundamental,
which means that they may not be changed without the approval of a majority of
such fund's outstanding voting securities (as defined in the 1940 Act).
Investment restrictions which are not deemed fundamental may be changed by a the
Directors without shareholder approval.
The following are the fundamental investment limitations of each Fund. No
Fund may:
1. Borrow money or mortgage or pledge any of its assets, except that a
Fund may borrow from banks, for temporary or emergency purposes, up to 33-1/3%
of its total assets and pledge up to 33-1/3% of its total assets in connection
therewith. Any borrowings that come to exceed 33-1/3 % of the value of the
Fund's total assets at any time will be reduced within three (exclusive of
Sundays and legal holidays) to the extent necessary to comply with the 33-1/3%
limitation. No Fund may purchase securities when borrowings exceed 5% of its
assets. Borrowings for purposes of this restriction include reverse repurchase
agreements.
2. Purchase any securities on "margin," or underwrite securities, except
that a Fund may obtain such short-term credit as may be necessary for the
clearance of purchases and sales of securities and except that the Funds may
make margin deposits in connection with futures contracts and options.
17
<PAGE>
3. Make loans if, as a result, more than 33-1/3 % of a Fund's total
assets would be lent to other parties except (i) through the purchase of a
portion of an issue of debt securities in accordance with its investment
objectives, policies, and limitations, or (ii) by engaging in repurchase
agreements with respect to portfolio securities. Portfolio securities may be
loaned only if continuously collateralized at least 100% by "marking-to-market"
daily.
4. Invest 25% or more of its total assets in the securities of issuers in
a single industry (excluding securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities).
5. Purchase from, or sell any portfolio securities to, a Fund's officers
or Directors, or any firm of which any such officer or Director is a member, as
principal, except that a Fund may deal with such persons or firms as securities
dealers and pay a customary brokerage commission; or retain securities of any
issuer, if to the knowledge of a Fund, one or more of its officers, Directors or
investment managers own beneficially more than one-half of 1% of the securities
of such issuer and all such persons together own beneficially more than 5% of
such securities.
6. Purchase the securities of any issuer if, as a result thereof, more
than 5% of the value of total assets of any Fund would be invested in the
securities of companies which, including predecessors, have a record of less
than three years' continuous operations.
7. Purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or instrumentalities)
if, as a result thereof, any such Fund, or the Company as a whole, would own
more than 10% of the outstanding voting securities of such issuer.
8. Issue senior securities, as defined in the 1940 Act, except that this
restriction shall not be deemed to prohibit a Fund from (a) making any otherwise
permitted borrowings, mortgages or pledges, or (b) entering into option
contracts, forward contracts or repurchase transactions.
9. With respect to 75% of its total assets, invest in securities of any
one issuer if immediately after, and as a result of such investment, more than
5% of the total assets of the Fund, taken at market value, would be invested in
the securities of such issuer, provided that the Latin America is not restricted
in this regard. This restriction does not apply to investments in U.S.
government or agency securities.
10. Make investments for the purpose of exercising control, or underwrite
the securities of other issuers, except insofar as a Fund may be technically
deemed an underwriter in connection with the disposition of its portfolio
securities.
18
<PAGE>
11. Purchase interests in oil, gas or other mineral exploration or
development programs, including mineral leases, although the Funds may invest in
common stocks of companies which invest in or sponsor such programs.
12. Purchase or sell real estate or real estate limited partnerships or
securities issued by companies that invest in real estate or interests therein.
13. Purchase commodities or commodity contracts (including futures
contracts), except that the Funds may purchase securities of issuers which
invest or deal in commodities or commodity contracts, and except that the Funds
may enter into futures and options contracts only for hedging purposes.
In order to change any restriction which is a fundamental policy, approval
must be obtained from the respective Fund's shareholders; this would require the
affirmative vote of the lesser of (i) 67% or more of the respective Fund's
outstanding voting securities that are represented at the meeting if more than
50% of the outstanding voting securities of the respective Fund are represented,
or (ii) more than 50% of the respective Fund's outstanding voting securities.
The following investment limitations are not fundamental, and may be
changed without prior shareholder approval (they, too, apply to each Fund).
The Funds do not currently intend to:
1. Engage in any reverse repurchase agreements if, as a result, more than
5% of a Fund's net assets would be subject to reverse repurchase agreements.
2. Purchase or otherwise acquire any security or enter into a repurchase
agreement with respect to any security if, as a result, more than 5% of a Fund's
net assets (taken at current value) would be invested in repurchase agreements
not entitling the holder to payment of interest and principal within seven days,
or in securities that are illiquid by virtue of legal or contractual
restrictions on resale or for which there is no readily available market.
3. Purchase securities of another investment company, except as permitted
by the 1940 Act and other applicable laws.
4. Lend assets, other than portfolio securities, to other parties, except
by purchasing debt securities and engaging in repurchase agreements. Portfolio
securities may be loaned only if continuously collateralized at least 100% by
"marking-to-market" daily. The Funds, however, do not currently intend to lend
their portfolio securities during the current fiscal year.
5. Make short sales of securities or maintain a short position, unless at
all times when a short position is open the respective Fund owns an equal amount
of such securities or
19
<PAGE>
securities convertible or exchangeable into, without payment of any further
consideration, securities of the same issuer as, and equal in amount to, the
securities sold short ("short sales against the box"), and unless not more than
5% of the Fund's net assets (taken at market value) is held as collateral for
such sales at any one time.
6. Purchase a security if, as a result thereof, more than 5% of a Fund's
net assets would be invested in warrants or more than 2% of such Fund's net
assets will be invested in warrants which are not listed on the American or New
York Stock Exchange.
7. Invest more than 5% of its net assets in securities restricted as to
resale or in illiquid securities.
Investment Techniques. In addition, each Fund follows the following
---------------------
investment techniques.
Depository Receipts. The Funds may invest in sponsored and unsponsored
American Depository Receipts ("ADPs"), European Depository Receipts ("EDRs"),
Global Depository Receipts ("GDRs"), and similar global instruments to the
extent that they may invest in the underlying securities.
Investment in Debt Securities and Commercial Paper. With respect to each
of the Asia Fund and the Acquiring Fund, at least 75% of Fund's total assets
invested in non-convertible debt securities other than commercial paper must be
rated, at the time of purchase, at least in the A category by Standard & Poor's
Corporation or Moody's Investors Services, Inc., or if unrated, determined to be
of comparable quality by the Investment Manager. The Funds' commercial paper
investments also must, at the time of purchase, be rated at least Prime-2 by
Moody's or A-2 by Standard & Poor's, or if unrated, determined to be of
comparable quality by the Investment Manager.
Temporary Strategies. To retain flexibility to respond promptly to adverse
changes in market and economic conditions, the Investment Manager, in its
discretion, may use temporary defensive strategies.
Hedging Strategies. Each Fund may use certain hedging strategies to
attempt to reduce the overall level of investment and currency risk normally
associated with its investments, although there can be no assurance that such
efforts will succeed. It is currently intended that no Fund will place more
than 5% of its net assets at risk in any one hedging transactions or securities.
Repurchase Agreements. Each Fund may enter into repurchase agreements.
Investment in Other Investment Companies. Each Fund may invest in such
companies to the extent permitted under the 1940 Act. The Funds may not invest
in any investment companies managed by the Investment Manager or any of its
affiliates.
20
<PAGE>
Restricted Securities. The Funds may invest in foreign securities that are
restricted against transfer within the U.S. or to U.S. persons.
In addition, each of the Asia Fund and the Acquiring Fund is a "diversified
company," as that term is defined in the 1940 Act. As a diversified company,
each Fund, with respect to 75% of its total assets, may not invest more than 5%
of its total assets in the securities of any one issuer (excluding the U.S.
Government and its agencies) or more than 10% of the outstanding voting
securities of any one issuer. The Latin America Fund is not a diversified
company.
COMPARATIVE INFORMATION ON DISTRIBUTION ARRANGEMENTS
Class A Retail shares of each Fund are not subject to an initial sales
charge.
The Funds have adopted the Class A Distribution and Service Plan Pursuant
to Rule 12b-1 (the "Distribution Plan") in accordance with regulations
promulgated under the 1940 Act. Fund shares generally are purchased through
mutual fund "supermarkets" and wrap programs, which provide certain shareholder
support and administrative services. The distribution fees are used primarily
to offset the expenses of the mutual fund supermarkets and wrap programs in
providing those services. Under the provisions of the Distribution Plan, the
Fund makes payments to the Distributor based on an annual rate of 0.35% of the
average daily value of the net assets of each Class A Retail shares. No service
fee is charged for Class A Retail shares.
COMPARATIVE INFORMATION ON SHAREHOLDER SERVICES
The Funds offer the same shareholder services, including the dividend and
distribution reinvestment privileges, a systematic withdrawal plan, a dividend
allocation plan, telephone purchases, telephone exchanges, telephone redemptions
and an automatic investment program. Because each Fund currently offers the same
shareholder services, after the closing of the proposed Reorganization the same
services will continue to be available to the shareholders of the Acquired
Funds.
FISCAL YEAR
Each Fund operates on a fiscal year ending December 31.
21
<PAGE>
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS
Each Fund is a series of the Company, a Maryland corporation governed by
its Articles of Incorporation and By-laws. Each share of any Fund represents an
equal proportionate interest in the assets and liabilities belonging to that
Fund. As such, each share is entitled to dividends and distributions out of the
income (after expenses) belonging to that Fund as declared by the Board of
Directors. Moreover, certain matters will involve separate votes of one or more
series of a Company, while others will require a vote of the Company's
shareholders as a whole. The foregoing is only a summary of certain of the
provisions of the Company's Articles of Incorporation and By-laws. Shareholders
should refer directly to the provisions of the Articles of Incorporation and By-
laws for their full text.
MANAGEMENT
The business affairs of the Company are managed by its Board of Directors.
The investment manager for each of the Funds is AIB Govett, Inc. (the
"Investment Manager") and the investment subadviser of each of the Funds is AIB
Govett Asset Management Limited (the "Investment Subadviser"). The Investment
Manager is charged with the overall responsibility for managing the investments
and business affairs of the Funds, subject to the authority of the Board of
Directors. The Investment Subadviser is charged with the responsibility of
managing the investment portfolios of each of the Funds, subject to the
authority of the Investment Manager and the Board of Directors. As of September
30, 1998, the Investment Manager had assets of approximately $15 billion under
management and the Investment Subadviser has assets of approximately $___
billion under management. The Investment Manager and the Investment Subadviser
are indirect subsidiaries of Allied Irish Banks plc.
The Investment Manager and the Investment Subadviser are part of a broad
network of affiliated offices worldwide, with principal offices in London,
Dublin, San Francisco and Singapore, which are supported in turn by a global
network of affiliated investment and research offices in Baltimore, Budapest,
Mexico City, Rio de Janiero, Poznan (Poland), Kuala Lumpur, Seoul and Taipei.
Each Fund's portfolio is managed by a team under the supervision of the
Investment Subadviser's Managing Director of Investments. Each team follows
investment policies and strategies determined by the Investment Subadviser's
Global Investment Policy Committee, consisting of the chief investment officers
of the principal offices, and an investment process based on interaction among
regional specialist desks.
For each of the Funds, FPS Broker Services, Inc. serves as distributor, FPS
Services, Inc. serves as transfer agent and dividend paying agent, The Chase
Manhattan Bank serves as custodian, Chase Global Funds Services Company provides
administration and accounting services and PricewaterhouseCoopers LLP is the
independent auditor.
22
<PAGE>
ADDITIONAL INFORMATION ABOUT THE FUNDS
Information about the Funds is included in their current Class A Retail
Shares Prospectus dated April 17, 1998, as supplemented June 4, 1998, a copy of
which is included herewith and incorporated by reference herein. Additional
information about the Funds is included in the Funds' Statement of Additional
Information dated April 17, 1998, as supplemented June 4, 1998. It is
accompanied by the Annual Report of the Company for the year ended December 31,
1997 and the semi-annual report of the Company for the period ended June 30,
1998. This Statement of Additional Information has been filed with the
Securities and Exchange Commission and is incorporated by reference herein.
Copies of this Statement may be obtained without charge by writing to The Govett
Funds, Inc., 250 Montgomery Street, Suite 1200, San Francisco, California 94104,
or by calling (800) 731-1755.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and the 1940 Act, and in accordance therewith
files proxy material, reports and other information with the Securities and
Exchange Commission. These reports can be inspected and copied at the Public
Reference Facilities maintained by the Securities and Exchange Commission at
Judiciary Plaza, 450 Fifth Street, NW, Washington, DC 20549, as well as at the
following regional offices: New York Regional Office, 75 Park Place, Room 1228,
New York, NY 10007; and Chicago Regional Office, Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago IL 60661. Copies of such material can
also be obtained from the Public Reference Branch, Office of Consumer Affairs
and Information Services, Securities and Exchange Commission, Judiciary Plaza,
450 Fifth Street, NW, Washington DC 20549 at prescribed rates.
VOTING INFORMATION
Any shareholder who has given a proxy has the right to revoke it at any
time prior to its exercise by attending the Meeting and voting his or her shares
in person or by submitting a written notice of revocation or a later-dated proxy
to the Company at the address of the Company set forth on the cover page of this
Prospectus/Joint Proxy Statement prior to the date of the Meeting. Shareholders
of record of the Acquired Funds at the close of business on October 5,1998 (the
"Record Date") will be entitled to notice of, and to vote at, the Meeting or any
adjournments thereof. This Prospectus/Joint Proxy Statement, proxies and
accompanying Notice of Meeting were first sent or given to shareholders of the
Funds on or about October 16, 1998.
As of the Record Date, there were approximately _____ issued and
outstanding Class A Retail shares of the Asia Fund and approximately _____
issued and outstanding Class A Retail shares of the Latin America Fund. Each
share of each such Fund is entitled to one vote, with a proportionate vote for
each fractional share, and may only be voted on this matter as it relates to
such Fund.
23
<PAGE>
If the enclosed proxy (or proxies in the event the shareholder holds shares
of both Acquired Funds) is properly executed and returned in time to be voted at
the Meeting, the shares represented thereby will be voted in accordance with the
instructions on the proxy. Unless instructions to the contrary are marked
thereon, the proxy will be voted for the proposal described herein and, in the
discretion of the persons named herein as proxies, to take such further action
as they may determine appropriate in connection with any other matter which may
properly come before the Meeting or any adjournments thereof. The Board of
Directors does not currently know of any matter to be considered at the Meeting
other than the proposal to approve the Plan of Reorganization.
The affirmative vote of the holders of a majority of the outstanding shares
of an Acquired Fund (within the meaning of the 1940 Act), voting together as a
single series, is required to approve the Plan of Reorganization on behalf of
such Fund. Under the 1940 Act, the vote of a majority of the outstanding shares
means the vote of the lesser of (a) 67% or more of the shares of a Fund, voting
together as a single class, present at the Meeting, if the holders of more than
50% of the outstanding shares are present or represented by proxy, or (b) more
than 50% of the outstanding shares of a Fund, voting together as a single class.
Approval of the Plan of Reorganization by the shareholders of an Acquired Fund
is a condition of the consummation of the Reorganization with respect to such
Fund. If the Reorganization is not approved by the shareholders of such Fund,
the Directors of the Company will continue the management of the such Fund and
the Acquiring Fund, respectively, and may consider other alternatives in the
best interests of each Fund's shareholders.
The holders of a majority of the shares of each Acquired Fund outstanding
at the close of business on the Record Date present in person or represented by
proxy constitute a quorum for the Meeting with respect to such Fund; however, as
noted above, the affirmative vote of a majority of the shares of such Fund,
voting together as a single series is required to approve the Reorganization.
In the event a quorum is not present at the Meeting or in the event a quorum is
present at the Meeting but sufficient votes to approve the Plan of
Reorganization are not received, the persons named as proxies may propose one or
more adjournments without further notice to shareholders of the Meeting to
permit further solicitation of proxies provided such persons determine, after
consideration of all relevant factors, including the nature of the proposal, the
percentage of votes then cast, the percentage of negative votes then cast, the
nature of the proposed solicitation activities and the nature of the reasons for
such further solicitation, that an adjournment and additional solicitation is
reasonable and in the interests of shareholders.
For purposes of determining the presence of a quorum for transacting
business at the Meeting and for determining whether sufficient votes have been
received for approval of the proposal to be acted upon at the Meeting,
abstentions and broker "non-votes" (that is, proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have discretionary power) will
be treated as shares that
24
<PAGE>
are present at the Meeting, but which have not been voted. For this reason,
abstentions and broker non-votes will assist each Acquired Fund in obtaining a
quorum, but both have the practical effect of a "no" vote for purposes of
obtaining the requisite vote for approval of the proposals to be acted upon at
the Meeting.
Expenses of the Reorganization will be borne by the Investment Manager.
Such expenses include costs of preparing, printing and mailing the enclosed
proxy, accompanying notice and Prospectus/Joint Proxy Statement and all other
costs in connection with solicitation of proxies, including any additional
solicitation by letter, telephone or telegraph. In addition to solicitation of
proxies by mail, officers of the Company and officers and regular employees of
the Investment Manager, affiliates of the Investment Manager, or other
representatives of the Company may also solicit proxies by telephone or telegram
or in person. A proxy solicitation firm may also be retained to assist in any
special, personal solicitation of proxies. The costs of retaining such a firm
will be borne by the Investment Manager.
THE DIRECTORS OF THE COMPANY, INCLUDING THE INDEPENDENT DIRECTORS OF THE
COMPANY, RECOMMEND APPROVAL BY EACH ACQUIRED FUND'S SHAREHOLDERS OF THE PLAN OF
REORGANIZATION.
EXPERTS
The financial statements of the Funds included in the Statement of
Additional Information have been incorporated herein by reference in reliance on
the reports of PricewaterhouseCoopers LLP, independent certified public
accountants, given on the authority of that firm as experts in accounting and
auditing. Certain legal matters with respect to the issuance of the shares of
the Company will be passed upon by Goodwin, Procter & Hoar LLP, Boston,
Massachusetts. In rendering such legal opinion, Goodwin, Procter & Hoar LLP may
rely on an opinion of Maryland counsel.
OTHER MATTERS
The Board of Directors does not intend to present any other business at the
Meeting, nor are they aware that any shareholder intends to do so. If, however,
any other matters are properly brought before the Meeting, the persons named in
the accompanying proxy will vote thereon in accordance with their judgment.
NO ANNUAL MEETING OF SHAREHOLDERS
There will be no annual or further special meetings of shareholders of the
Acquired Funds unless required by applicable law or called by the Directors of
the Company in their discretion.
25
<PAGE>
Shareholders wishing to submit proposals for inclusion in a proxy statement
for a subsequent shareholder meeting should send their written proposals to the
Secretary of the Company, 250 Montgomery Street, Suite 1200, San Francisco,
California 94104. Shareholder proposals should be received in a reasonable time
before the solicitation is made.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE FILL IN, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS NECESSARY IF IT IS MAILED IN THE UNITED STATES.
26
<PAGE>
EXHIBIT A
PLAN OF REORGANIZATION
PLAN OF REORGANIZATION dated as of _________, 1998 by The Govett Funds,
Inc., a Maryland corporation (the "Company"), on behalf of Govett Asia Fund (the
"Asia Fund"), Govett Latin America Fund (the "Latin America Fund," and together
with the Asia Fund, the "Acquired Funds"), and Govett Emerging Markets Fund (the
"Acquiring Fund," and together with the Acquired Funds, the "Funds"), each a
series of the Company.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, this Plan is intended to be, and is adopted as, a plan of
reorganization and liquidation within the meaning of Section 368(a)(1)(C) of the
Internal Revenue Code of 1986, as amended, such reorganization to consist of (a)
the transfer of all of the assets of the Asia Fund in exchange solely for Class
A Retail shares of common stock, $.00001 par value per share, of the Acquiring
Fund ("Acquiring Fund Shares") and the assumption by the Acquiring Fund of
certain liabilities of the Asia Fund and the distribution, after the Closing
hereinafter referred to, of Acquiring Fund Shares to the shareholders of the
Asia Fund in liquidation of the Asia Fund, all upon the terms and conditions
hereinafter set forth in this Plan and (b) the transfer of all of the assets of
the Latin America Fund in exchange solely for Class A Retail shares of common
stock, $.00001 par value per share, of the Acquiring Fund ("Acquiring Fund
Shares") and the assumption by the Acquiring Fund of certain liabilities of the
Latin America Fund and the distribution, after the Closing hereinafter referred
to, of Acquiring Fund Shares to the shareholders of the Latin America Fund in
liquidation of the Latin America Fund, all upon the terms and conditions
hereinafter set forth in this Plan (collectively, the "Reorganization"); and
WHEREAS, the Directors of the Company, including a majority of the
Directors who are not interested persons, have determined that participating in
the transactions contemplated by this Plan is in the best interests of each of
the Funds.
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
1. Transfer of Assets. Subject to the terms and conditions set forth
------------------
herein, at the closing provided for in Section 3 (the "Closing"), the Company on
behalf of each Acquired Fund shall transfer all of the assets of such Acquired
Fund, and assign all Assumed Liabilities (as hereinafter defined) to the
Acquiring Fund, and the Company on behalf of the Acquiring
A-1
<PAGE>
Fund shall acquire all such assets, and shall assume all such Assumed
Liabilities, upon delivery to the Company on behalf of such Acquired Fund of
Acquiring Fund Shares having a net asset value equal to the value of the net
assets of the Acquired Fund transferred (the "New Shares"). "Assumed
Liabilities" shall mean all liabilities, including all expenses, costs, charges
and reserves, reflected in an unaudited statement of assets and liabilities of
the Acquired Fund as of the close of business on the Valuation Date (as
hereinafter defined), determined in accordance with generally accepted
accounting principles consistently applied from the prior audited period. The
net asset value of the New Shares and the value of the net assets of the
Acquired Fund to be transferred shall be determined as of the close of regular
trading on the New York Stock Exchange on the business day immediately prior to
the Closing (the "Valuation Date") using the valuation procedures set forth in
the then current prospectus and statement of additional information of the
Acquiring Fund. All Assumed Liabilities of the Acquired Fund, to the extent that
they exist at or after the Closing, shall after the Closing attach to the
Acquiring Fund and may be enforced against the Acquiring Fund to the same extent
as if the same had been incurred by the Acquiring Fund.
2. Liquidation of the Acquired Fund. At or as soon as practicable after
--------------------------------
the Closing, each Acquired Fund will be liquidated and the New Shares that have
been delivered to the Company on behalf of such Acquired Fund will be
distributed to the shareholders of the Acquired Fund, each shareholder to
receive New Shares of the corresponding class equal to the pro rata portion of
shares of beneficial interest of the Acquired Fund held by such shareholder as
of the close of business on the Valuation Date. Such liquidation and
distribution will be accompanied by the establishment of an open account on the
share records of the Acquiring Fund in the name of each shareholder of the
Acquired Fund and representing the respective pro rata number of New Shares due
such shareholder. As soon as practicable after the Closing, the Company shall
take all steps necessary to effect a complete liquidation and dissolution of the
Acquired Fund. As of the Closing, each outstanding certificate which, prior to
the Closing, represented shares of the Acquired Fund will be deemed for all
purposes to evidence ownership of the number of Acquiring Fund Shares issuable
with respect thereto pursuant to the Reorganization. After the Closing,
certificates originally representing Class A Retail shares of the Acquired Fund
will be rendered nonnegotiable; upon special request and surrender of such
certificates to FPS Services, Inc. as transfer agent, holders of these
nonnegotiable certificates shall be entitled to receive certificates
representing the number of Acquiring Fund Shares issuable with respect thereto.
3. Conditions Precedent. The obligations of the Company on behalf of
--------------------
each Acquired Fund and the Acquiring Fund to effectuate the plan of
reorganization and liquidation hereunder with respect to such Acquired Fund
shall be subject to the satisfaction of the following conditions:
(a) At or immediately prior to the Closing, the Company shall have
declared and paid a dividend or dividends which, together with all previous such
dividends,
A-2
<PAGE>
shall have the effect of distributing to the shareholders of such Acquired Fund
all of such Fund's investment company taxable income for taxable years ending at
or prior to the Closing (computed without regard to any deduction for dividends
paid) and all of its net capital gain, if any, realized in taxable years ending
at or prior to the Closing (after reduction for any capital loss carry-forward);
(b) A registration statement of the Company on behalf of the
Acquiring Fund on Form N-14 under the Securities Act of 1933, as amended (the
"Securities Act"), registering the New Shares under the Securities Act, and such
amendment or amendments thereto as are determined by the Board of Directors of
the Company to be necessary and appropriate to effect such registration of the
New Shares (the "Registration Statement"), shall have been filed with the
Securities and Exchange Commission (the "Commission") and the Registration
Statement shall have become effective, and no stop-order suspending the
effectiveness of such Registration Statement shall have been issued, and no
proceeding for that purpose shall have been initiated or threatened by the
Commission (and not withdrawn or terminated);
(c) The New Shares shall have been duly qualified for offering to the
public in all states in which such qualification is required for consummation of
the transactions contemplated hereunder;
(d) The Company on behalf of the Acquiring Fund and such Acquired
Fund shall have received an opinion from Goodwin, Procter & Hoar LLP regarding
certain tax matters in connection with the Reorganization;
(e) The Company on behalf of the Acquiring Fund shall have received a
limited review report, in accordance with established accounting standards for
such reports, of PricewaterhouseCoopers LLP, auditors for the Company, as to the
unaudited statement of assets and liabilities described in Section 1 of this
Plan; and
(f) A vote approving this plan of reorganization contemplated hereby
shall have been adopted by at least a majority of the outstanding Class A Retail
shares of common stock of such Acquired Fund, voting together as a single class,
entitled to vote at the special meeting of shareholders of the Acquired Fund
duly called for such purpose;
Notwithstanding the foregoing, nothing in this Plan shall obligate the Company
to effectuate the plan of reorganization and liquidation with respect to one
Acquired Fund even if all of the conditions of this Section 3 have been
satisfied with respect to the other Acquired Fund, and nothing in this Plan
shall prevent the Company from effectuating the plan of reorganization and
liquidation with respect to one Acquired Fund even if all of the conditions of
this Section 3 have not been satisfied with respect to the other Acquired Fund.
4. Closing. With respect to each Acquired Fund, the Closing shall be
-------
held at the offices of Goodwin, Procter & Hoar LLP, Exchange Place, 53 State
Street, Boston,
A-3
<PAGE>
Massachusetts 02109, and shall occur (a) immediately prior to the opening of
business on the first Monday following receipt of all necessary regulatory
approvals and the final adjournment of the meeting of shareholders of such
Acquired Fund at which this Plan is considered or (b) such later time as the
parties may agree. All acts taking place at the Closing shall be deemed to take
place simultaneously unless otherwise provided. At, or as soon as may be
practicable following, the Closing, the Acquiring Fund shall distribute the New
Shares to the Acquired Fund Record Holders (as herein defined) by instructing
the Acquiring Fund to register the appropriate number of New Shares in the names
of the Acquired Fund's shareholders, and the Acquiring Fund agrees promptly to
comply with said instruction. The shareholders of record of the Acquired Fund as
of the close of business on the Valuation Date shall be certified by the
Company's transfer agent (the "Acquired Fund Record Holders").
5. Expenses. The expenses incurred in connection with the transactions
--------
contemplated by this Plan, whether or not the transactions contemplated hereby
are consummated, will be borne by AIB Govett, Inc.
6. Termination. This Plan and the transactions contemplated hereby may
-----------
be terminated and abandoned with respect to either or both Acquired Funds by
resolution of the Board of Directors of the Company at any time prior to the
Closing if circumstances should develop that, in the opinion of the Board of
Directors, in its sole discretion, make proceeding with this Plan inadvisable.
In the event of any such termination, there shall be no liability for damages on
the part of either Acquired Fund or the Acquiring Fund, or the Company's
Directors or officers, to any other person.
7. Amendments. This Plan may be amended, waived or supplemented in such
----------
manner as may be mutually agreed upon in writing by the authorized officers of
the Company acting on behalf of each Fund; provided, however, that following the
meeting of Acquired Funds' shareholders called by the Company pursuant to
Section 3(f) of this Plan, no such amendment, waiver or supplement may have the
effect of changing the provisions for determining the number of Acquiring Fund
Shares to be issued to the Acquired Funds' shareholders under this Plan to the
detriment of such shareholders without their further approval.
8. Governing Law. This Plan shall be governed and construed in
-------------
accordance with the laws of the State of Maryland, except as to matters of
conflicts of laws.
9. Further Assurances. The Company shall take such further action, prior
------------------
to, at, and after the Closing, as may be necessary or desirable and proper to
consummate the transactions contemplated hereby.
A-4
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
ACQUISITION OF ASSETS OF
GOVETT ASIA FUND
GOVETT LATIN AMERICA FUND
EACH A SERIES OF
THE GOVETT FUNDS, INC.
250 MONTGOMERY STREET, SUITE 1200
SAN FRANCISCO, CALIFORNIA 94104
(800) 731-1755
BY AND IN EXCHANGE FOR CLASS A RETAIL SHARES OF
GOVETT EMERGING MARKETS EQUITY FUND
A SERIES OF
THE GOVETT FUNDS, INC.
250 MONTGOMERY STREET, SUITE 1200
SAN FRANCISCO, CALIFORNIA 94104
(800) 731-1755
This Statement of Additional Information, relating specifically to the
proposed transfer of the assets of each of Govett Asia Fund and Govett Latin
America Fund, each a series of The Govett Funds, Inc. (the "Company"), in
exchange for Class A Retail Shares of common stock, $.00001 par value per share,
and the assumption of certain liability by, Govett Emerging Markets Equity Fund,
a series of the Company, consists of this cover page and the following described
documents, each of which is attached hereto and incorporated by reference
herein:
1. Statement of Additional Information of the Company dated April 17, 1998, as
supplemented June 4, 1998;
2. Annual Report of the Company for the year ended December 31, 1997;
3. Semi-Annual Report of the Company for the period ended June 30, 1998; and
4. Pro forma financials for Govett Emerging Markets Equity Fund.
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with, the Prospectus/Joint Proxy
Statement dated __________, 1998. A copy of the Prospectus/Joint Proxy
Statement may be obtained without charge by calling or writing the Company at
the telephone number or address set forth above.
The date of this Statement of Additional Information is _______________,
1998.
B-1
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
- ------------------------------------------- ---------------------------------------- -------------------------------------------
GOVETT GOVETT GOVETT GOVETT
EMERGING LATIN PRO FORMA EMERGING LATIN PRO FORMA
MARKETS GOVETT AMERICA COMBINED MARKETS GOVETT AMERICA COMBINED
EQUITY FUND ASIA FUND FUND PORTFOLIO EQUITY FUND ASIA FUND FUND PORTFOLIO
- ------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COMMON STOCKS - 92.6%
ARGENTINA - 5.2%
21,700 - 7,300 29,000 Banco Frances del Rio de la Plata $ 163,858 $ - $ 55,123 $ 218,981
- - 3,800 3,800 Importadora y Exportadora Patagonia - - 57,274 57,274
8,800 - 2,160 10,960 Telefonica de Argentina ADR 285,450 - 70,065 355,515
11,800 - 3,700 15,500 YPF ADR 354,737 - 111,231 465,968
----------- -------- ---------- -----------
804,045 - 293,693 1,097,738
----------- -------- ---------- -----------
AUSTRALIA - 0.7%
- 3,000 - 3,000 AMP - 35,154 - 35,154
- 23,800 - 23,800 Goodman Fielder - 34,677 - 34,677
- 2,800 - 2,800 Howard Smith - 16,492 - 16,492
- 24,900 - 24,900 Pasminco - 18,989 - 18,989
- 11,900 - 11,900 Woolworths Holdings - 38,734 - 38,734
----------- -------- ---------- -----------
- 144,046 - 144,046
----------- -------- ---------- -----------
BRAZIL - 11.3%
9,440 - 3,900 13,340 Cemig ADR 292,192 - 120,722 412,914
9,756,000 - 4,079,000 13,835,000 Electrobras 286,805 - 119,914 406,719
17,755,000 - 5,169,000 22,924,000 Gerasul* 24,256 - 7,062 31,318
- - 27,000 27,000 Guararapes - - 77,039 77,039
- - 3,350 3,350 Pao de Accucar GDR - - 75,794 75,794
- - 65,000 65,000 Riograndense de Telecommunication - - 70,870 70,870
1,000,000 - - 1,000,000 Saneamento Basico De SP 120,185 - - 120,185
- - 480,000 480,000 Telebras - - 38,183 38,183
6,040 - 1,740 7,780 Telebras ADR 659,492 - 189,986 849,478
7,100 - 2,690 9,790 Unibanco GDR 209,450 - 79,355 288,805
----------- -------- ---------- -----------
1,592,380 - 778,925 2,371,305
----------- -------- ---------- -----------
CHILE - 0.6%
- - 2,750 2,750 Empresa Nacional Electricidad ADR - - 39,187 39,187
- - 900 900 Quimica Minera ADR - - 30,150 30,150
- - 2,870 2,870 Telecomunicacoes de Chile ADR - - 58,297 58,297
----------- -------- ---------- -----------
- - 127,634 127,634
----------- -------- ---------- -----------
CHINA - 1.4%
569,000 - - 569,000 Qingling Motors 157,892 - - 157,892
9,760 - - 9,760 Zhejiang Southeast Electric Power GDR* 135,664 - - 135,664
----------- -------- ---------- -----------
293,556 - - 293,556
----------- -------- ---------- -----------
CROATIA - 0.6%
7,450 - - 7,450 Pliva GDR 121,063 - - 121,063
----------- -------- ---------- -----------
CZECH REPUBLIC - 2.3%
17,350 - - 17,350 Komercni Banka 219,478 - - 219,478
19,714 - - 19,714 SPT Telekom* 272,890 - - 272,890
----------- -------- ---------- -----------
492,368 - - 492,368
----------- -------- ---------- -----------
EGYPT - 3.4%
3,500 - - 3,500 Al-Ahram Beverages GDR 111,300 - - 111,300
14,100 - - 14,100 Commercial International Bank GDR 152,985 - - 152,985
3,000 - - 3,000 Madinet NASR 143,569 - - 143,569
22,000 - - 22,000 Paint & Chemical Industries GDR 206,250 - - 206,250
6,025 - - 6,025 Tourah Portland Cement 103,765 - - 103,765
----------- -------- ---------- -----------
717,869 - - 717,869
----------- -------- ---------- -----------
GREECE - 6.7%
2,500 - - 2,500 Alpha Credit Bank 202,884 - - 202,884
16,400 - - 16,400 Hellenic Petroleum* 134,090 - - 134,090
18,443 - - 18,443 Hellenic Telecommunication Organization 473,307 - - 473,307
3,140 - - 3,140 National Bank of Greece 402,819 - - 402,819
3,100 - - 3,100 Titan Cement 203,025 - - 203,025
----------- -------- ---------- -----------
1,416,125 - - 1,416,125
----------- -------- ---------- -----------
HONG KONG - 1.7%
- 52,000 - 52,000 China Resources Beijing Land - 16,779 - 16,779
126,000 16,000 - 142,000 China Telecom 218,727 27,775 - 246,502
- 2,200 - 2,200 Hong Kong & Shanghai Bank Holdings - 53,807 - 53,807
- 6,000 - 6,000 Hutchinson Whampoa - 31,673 - 31,673
----------- -------- ---------- -----------
218,727 130,034 - 348,761
----------- -------- ---------- -----------
</TABLE>
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
- ------------------------------------------- ---------------------------------------- -------------------------------------------
GOVETT GOVETT GOVETT GOVETT
EMERGING LATIN PRO FORMA EMERGING LATIN PRO FORMA
MARKETS GOVETT AMERICA COMBINED MARKETS GOVETT AMERICA COMBINED
EQUITY FUND ASIA FUND FUND PORTFOLIO EQUITY FUND ASIA FUND FUND PORTFOLIO
- ------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
HUNGARY - 3.9%
2,540 - - 2,540 Gedeon Richter GDR* $ 203,200 $ - $ - $ 203,200
8,400 - - 8,400 Matav ADR 247,275 - - 247,275
6,496 - - 6,496 MOL Magyar Olaj-es Gazipari GDR 175,392 - - 175,392
4,050 - - 4,050 OTP Bank GDR 196,628 - - 196,628
----------- -------- ---------- -----------
822,495 - - 822,495
----------- -------- ---------- -----------
INDIA - 5.3%
883 - - 883 Hindalco Industries 13,901 - - 13,901
7,900 - - 7,900 Hindustan Lever 281,251 - - 281,251
15,200 - - 15,200 ITC 233,736 - - 233,736
4,598 - - 4,598 Larsen & Toubro 24,866 - - 24,866
17,200 - - 17,200 Mahanager Telephone Nigam GDR* 180,170 - - 180,170
8,700 - - 8,700 Ranbaxy Laboratories 112,341 - - 112,341
54,700 - - 54,700 Reliance Industries 184,870 - - 184,870
19,000 - - 19,000 State Bank of India 94,104 - - 94,104
----------- -------- ---------- -----------
1,125,239 - - 1,125,239
----------- -------- ---------- -----------
ISRAEL - 5.5%
303,000 - - 303,000 Bank Leumi Le-Israel* 604,431 - - 604,431
5,200 - - 5,200 ECI Telecom 196,950 - - 196,950
1,600 - - 1,600 Koor Industries 184,875 - - 184,875
5,150 - - 5,150 Teva Pharmaceutical Industries ADR 181,216 - - 181,216
----------- -------- ---------- -----------
1,167,472 - - 1,167,472
----------- -------- ---------- -----------
JAPAN - 1.7%
- 800 - 800 Aderans - 17,544 - 17,544
- 3,000 - 3,000 Alpine Electronics* - 31,164 - 31,164
- 1,000 - 1,000 Fuji Photo Film - 34,843 - 34,843
- 2,000 - 2,000 Fujitsu - 21,065 - 21,065
- 1,000 - 1,000 Ito-Yokado - 47,107 - 47,107
- 1,000 - 1,000 Kikkoman - 5,266 - 5,266
- 3,000 - 3,000 Kirin Brewery - 28,351 - 28,351
- 1,000 - 1,000 Mitsui Fudosan - 7,907 - 7,907
- 400 - 400 Nintendo - 37,080 - 37,080
- 3 - 3 Nippon Telegraph & Telephone - 24,888 - 24,888
- 1 - 1 NTT Data Communications Systems - 36,142 - 36,142
- 100 - 100 Shohkoh Fund - 24,600 - 24,600
- 400 - 400 Sony - 34,483 - 34,483
----------- -------- ---------- -----------
- 350,440 - 350,440
----------- -------- ---------- -----------
MEXICO - 18.2%
- - 18,800 18,800 Apasco - - 98,700 98,700
27,500 - - 27,500 Cemex ADR 242,374 - - 242,374
156,250 - 52,800 209,050 Cifra C 216,896 - 73,293 290,189
- - 92,000 92,000 Controladora Comercial Mexicana - - 75,929 75,929
11,120 - 1,980 13,100 Femsa 346,321 - 61,665 407,986
46,700 - 15,000 61,700 Grupo Financiero Banamex* 90,902 - 29,197 120,099
33,700 - 14,500 48,200 Grupo Financiero Bancomer GDR 248,706 - 106,820 355,526
- - 81,500 81,500 Grupo Financiero Banorte* - - 88,113 88,113
- - 17,000 17,000 Grupo Industrial Saltillo - - 56,727 56,727
5,100 - - 5,100 Grupo Televisa GDR* 191,887 - - 191,887
46,000 - - 46,000 Kimberly-Clark de Mexico 162,449 - - 162,449
71,000 - - 71,000 Organizacion Soriana 203,748 - - 203,748
- - 3,400 3,400 Panamerican Beverages - - 106,888 106,888
326,000 - - 326,000 Telefonos de Mexico 770,536 - - 770,536
- - 5,730 5,730 Telefonos de Mexico ADR - - 275,398 275,398
23,150 - 7,850 31,000 Tubo de Acero de Mexico ADR 296,609 - 100,578 397,187
----------- -------- ---------- -----------
2,770,428 - 1,073,308 3,843,736
----------- -------- ---------- -----------
PHILIPPINES - 0.1%
- 2,736 - 2,736 Far East Bank & Trust (partly paid) - 2,296 - 2,296
- 4,100 - 4,100 Metropolitan Bank & Trust - 24,089 - 24,089
----------- -------- ---------- -----------
- 26,385 - 26,385
----------- -------- ---------- -----------
POLAND - 1.1%
7,000 - - 7,000 Bank Handlowy W Warszawie* 135,653 - - 135,653
3,900 - - 3,900 Bank Rozwoju Eksportu 105,693 - - 105,693
----------- -------- ---------- -----------
241,346 - - 241,346
----------- -------- ---------- -----------
</TABLE>
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
- ------------------------------------------- ---------------------------------------- -------------------------------------------
GOVETT GOVETT GOVETT GOVETT
EMERGING LATIN PRO FORMA EMERGING LATIN PRO FORMA
MARKETS GOVETT AMERICA COMBINED MARKETS GOVETT AMERICA COMBINED
EQUITY FUND ASIA FUND FUND PORTFOLIO EQUITY FUND ASIA FUND FUND PORTFOLIO
- ------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RUSSIA - 0.3%
18,877 - - 18,877 Trade House GUM ADR* $ 56,631 $ - $ - $ 56,631
----------- -------- ---------- -----------
SINGAPORE - 0.3%
- 5,300 - 5,300 Development Bank of Singapore - 29,331 - 29,331
- 4,000 - 4,000 Singapore Press Holdings - 26,754 - 26,754
----------- -------- ---------- -----------
- 56,085 - 56,085
----------- -------- ---------- -----------
SOUTH AFRICA - 7.9%
52,000 - - 52,000 ABSA Group 325,041 - - 325,041
14,000 - - 14,000 Liberty Life 273,413 - - 273,413
28,000 - - 28,000 Rembrandt Group 175,022 - - 175,022
11,500 - - 11,500 Reunert 13,017 - - 13,017
19,000 - - 19,000 Sasol 110,259 - - 110,259
60,000 - - 60,000 Smith (C.G.) 165,224 - - 165,224
16,500 - - 16,500 South African Breweries 340,077 - - 340,077
14,000 - - 14,000 Tiger Oats 123,461 - - 123,461
109,000 - - 109,000 Wooltru 139,950 - - 139,950
----------- -------- ---------- -----------
1,665,464 - - 1,665,464
----------- -------- ---------- -----------
TAIWAN - 2.6%
35,200 1,600 - 36,800 Compal Electronics* 94,760 4,307 - 99,067
104,000 - - 104,000 CTCI* 189,171 - - 189,171
17,400 - - 17,400 Delta Electronic Industrial 58,235 - - 58,235
84,720 3,080 - 87,800 Nien Hsing Textile* 197,250 7,171 - 204,421
----------- -------- ---------- -----------
539,416 11,478 - 550,894
----------- -------- ---------- -----------
THAILAND - 2.6%
12,100 5,100 - 17,200 Advanced Info Service 51,611 21,753 - 73,364
5,900 - - 5,900 BEC World 22,510 - - 22,510
96,500 - - 96,500 Electricity Generating* 129,070 - - 129,070
24,600 - - 24,600 PTT Exploration and Production* 186,540 - - 186,540
145,400 18,400 - 163,800 Thai Farmers Bank 128,345 16,242 - 144,587
----------- -------- ---------- -----------
518,076 37,995 - 556,071
----------- -------- ---------- -----------
TURKEY - 7.8%
930,000 - - 930,000 Alcatel Teletas Komunikasyon 122,231 - - 122,231
1,500,000 - - 1,500,000 Eregli Demir* 233,759 - - 233,759
6,100,000 - - 6,100,000 Sabanci Holding 377,957 - - 377,957
11,037,500 - - 11,037,500 Turkiye Is Bankasi 445,562 - - 445,562
17,823,000 - - 17,823,000 Yapi ve Kredi Bankasi 455,112 - - 455,112
----------- -------- ---------- -----------
1,634,621 - - 1,634,621
----------- -------- ---------- -----------
VENEZUELA - 1.4%
7,270 - 4,270 11,540 CANTV ADR 181,750 - 106,750 288,500
----------- -------- ---------- -----------
TOTAL COMMON STOCKS
(Cost $18,361,152, $871,133 and
$2,893,060, respectively, for a
total of $22,125,345) 16,379,071 756,463 2,380,310 19,515,844
----------- -------- ---------- -----------
PREFERRED STOCKS - 7.4%
BRAZIL - 7.4%
121,200 - 84,700 205,900 Banco Itau 69,164 - 48,335 117,499
25,000,000 - 8,800,000 33,800,000 Copel 233,453 - 82,176 315,629
2,647,000 - 960,000 3,607,000 Petrobras 492,071 - 178,462 670,533
1,650,000 - 380,000 2,030,000 Telesp Celular 136,959 - 31,542 168,501
836,000 - 380,000 1,216,000 Telesp 196,613 - 89,369 285,982
----------- -------- ---------- -----------
1,128,260 - 429,884 1,558,144
----------- -------- ---------- -----------
MALAYSIA - 0.0%
- 20,000 - 20,000 Multi-Purpose Holdings, expire 1/13/02 - 1,301 - 1,301
----------- -------- ---------- -----------
TOTAL PREFERRED STOCKS
(Cost $1,326,718, $8,005 and $470,859,
respectively, for a total of $1,805,582) 1,128,260 1,301 429,884 1,559,445
----------- -------- ---------- -----------
</TABLE>
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
- ------------------------------------------- ---------------------------------------- -------------------------------------------
GOVETT GOVETT GOVETT GOVETT
EMERGING LATIN PRO FORMA EMERGING LATIN PRO FORMA
MARKETS GOVETT AMERICA COMBINED MARKETS GOVETT AMERICA COMBINED
EQUITY FUND ASIA FUND FUND PORTFOLIO EQUITY FUND ASIA FUND FUND PORTFOLIO
- ------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WARRANTS AND RIGHTS* - 0.0%
BRAZIL - 0.0%
39,292 - 17,859 57,151 Telesp Rights, expire 7/2/98 $ 662 $ - $ 301 $ 963
----------- -------- ---------- -----------
GREECE - 0.0%
2,500 - - 2,500 Alpha Credit Bank Rights, expire 7/24/98 4,263 - - 4,263
----------- -------- ---------- -----------
HONG KONG - 0.0%
- 18,400 - 18,400 Oriental Press Group Warrants,
expire 10/2/98 - 24 - 24
----------- -------- ---------- -----------
JAPAN - 0.0%
- 20 - 20 Optec Dai-Ichi Denko Warrants,
expire 2/8/00 - 1,020 - 1,020
----------- -------- ---------- -----------
MALAYSIA - 0.0%
- 971 - 971 Rashid Hussain Berhad Warrants,
expire 3/25/02 - 162 - 162
----------- -------- ---------- -----------
PHILIPPINES - 0.0%
- 16,200 - 16,200 Belle Corporation Warrants,
expire 10/6/00 - 22 - 22
----------- -------- ---------- -----------
TOTAL WARRANTS AND RIGHTS
(Cost $0, $18,027 and $0, respectively,
for a total of $18,027) 4,925 1,228 301 6,454
----------- -------- ---------- -----------
TOTAL INVESTMENTS - 100%
(Cost $19,687,870, $897,165
and $3,363,919, respectively,
for a total of $23,948,954) $17,512,256 $758,992 $2,810,495 $21,081,743
=========== ======== ========== ===========
</TABLE>
* Non-income producing security
ADR American Depositary Receipt
GDR Global Depositary Receipt
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
GOVETT
EMERGING GOVETT LATIN
MARKETS GOVETT ASIA AMERICA PRO FORMA
EQUITY FUND FUND FUND COMBINED
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value - (see accompanying Schedule of Investments) $ 17,612,256 $ 758,992 $ 2,810,495 $ 21,081,743
Cash 362,109 73,178 79,709 514,996
Foreign currency, at value 1,057,767 81,761 1,424 1,140,952
Receivable from:
Securities sold 443,063 81,027 158,372 682,462
Fund shares sold 52,892 100 - 52,992
Dividends and interest 130,603 2,531 32,907 166,041
Reimbursement from investment manager 20,947 47,196 27,663 95,806
Other assets 3,087 3,087 3,116 9,290
------------ ---------- ----------- ------------
Total assets 19,582,724 1,047,672 3,113,686 23,744,282
------------ ---------- ----------- ------------
LIABILITIES:
Payable for:
Securities purchased - 42,177 32,249 74,426
Fund shares repurchased 2,931 - 24,240 27,171
Deferred foreign country taxes 12,683 149 - 12,832
Accrued expenses and other liabilities 152,968 56,276 77,139 288,383
------------ ---------- ----------- ------------
Total liabilities 168,582 98,602 133,628 400,812
------------ ---------- ----------- ------------
Net assets $ 19,414,142 $ 949,270 $ 2,980,058 $ 23,343,470
NET ASSETS CONSIST OF:
Paid-in-capital $ 30,595,391 $4,012,073 $ 4,722,333 $ 39,329,797
Undistributed net investment income (loss) (57,500) (24,209) 31,317 (50,392)
Accumulated net realized loss on investments and foreign currency
transactions (8,873,688) (2,902,250) (1,221,687) (12,997,625)
Net unrealized depreciation on investments, forward currency contracts
and net other assets (net of accrued foreign country tax unrealized
appreciation) (2,250,061) (136,344) (551,905) (2,936,310)
------------ ---------- ------------ ------------
Net assets $ 19,414,142 $ 949,270 $ 2,980,058 $23,343,470
------------ ---------- ------------ ------------
Shares outstanding 1,989,192 215,341 405,647 2,391,749
------------ ---------- ------------ ------------
Net Asset Value and redemption price per Class A share (a) $ 9.76 $ 4.41 $ 7.35 $ 9.76
------------ ---------- ------------ ------------
Cost of investments $ 19,687,870 $ 897,165 $ 3,363,919 $ 23,948,954
Cost of foreign currency $ 1,115,564 $ 81,091 $ 1,482 $ 1,198,137
</TABLE>
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
GOVETT GOVETT
EMERGING LATIN
MARKETS GOVETT ASIA AMERICA PRO FORMA
EQUITY FUND FUND FUND ADJUSTMENTS COMBINED
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investment income:
Interest* $ 9,594 $ 1,454 $ 1,816 $ 12,864
Dividends* 358,595 9,760 81,909 450,264
------------- ------------- ------------- -------------
Total investment income 368,189 11,214 83,725 463,128
------------- ------------- ------------- -------------
Expenses:
Management fee 134,118 6,450 20,875 161,443
Custody and administration fees 151,635 34,388 25,085 211,108
12b-1 fee Class A 50,689 2,425 7,899 61,013
Professional fees 21,972 21,973 21,972 (15,298)(c) 50,619
Transfer agency fee 86,911 10,006 12,456 109,373
Registration and filing fees 11,679 8,260 8,321 (15,088)(c) 13,172
Directors' fees and expenses 11,450 11,713 11,132 34,295
Amortization of organization costs - 3,137 2,908 (6,045)(c) -
Other 23,423 7,196 8,171 (647)(c) 38,143
------------- ------------- ------------- ------------- -------------
Total expenses 491,877 105,548 118,819 (37,078) 679,166
------------- ------------- ------------- ------------- -------------
Less: Expenses reimbursable and fees
waived by the Manager (157,759) (89,454) (66,708) 37,078(b) (276,843)
------------- ------------- ------------- ------------- -------------
Net operating expenses 334,118 16,094 52,111 402,323
------------- ------------- ------------- -------------
Interest and other non-operating expenses 7,238 24 297 7,559
------------- ------------- ------------- -------------
Net investment income (loss) 26,833 (4,904) 31,317 53,246
------------- ------------- ------------- -------------
Realized and unrealized gain (loss):
Net realized loss on:
Investment transactions (2,711,049) (575,932) (208,372) (3,495,353)
Foreign currency transactions (71,943) (1,597) (2,573) (76,113)
------------- ------------- ------------- -------------
Net realized loss (2,782,992) (577,529) (210,945) (3,571,466)
------------- ------------- ------------- -------------
Net unrealized appreciation (depreciation) on:
Investments (2,260,479) 238,387 (862,654) (2,884,746)
Foreign currency transactions (56,638) (3,989) (777) (61,404)
------------- ------------- ------------- -------------
Net unrealized appreciation (depreciation)
during the period (2,317,117) 234,398 (863,431) (2,946,150)
------------- ------------- ------------- -------------
Net realized and unrealized loss (5,100,109) (343,131) (1,074,376) (6,517,616)
------------- ------------- ------------- -------------
Net decrease in net assets resulting
from operations $(5,073,276) $ (348,035) $(1,043,059) $(6,464,370)
============= ============= ============= =============
*Net of foreign taxes withheld of $ 604 $ 691 $ 136 $ 1,431
</TABLE>
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
GOVETT GOVETT
EMERGING LATIN
MARKETS GOVETT ASIA AMERICA PRO FORMA
EQUITY FUND FUND FUND ADJUSTMENTS COMBINED
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investment income:
Interest* $ 36,269 $ 3,287 $ 7,107 $ 46,663
Dividends* 1,037,195 36,104 113,826 1,187,125
------------- ------------- ------------- -------------
Total investment income 1,073,464 39,391 120,933 1,233,788
------------- ------------- ------------- -------------
Expenses:
Management fee 532,713 26,499 53,584 612,796
Custody and administration fees 307,981 81,964 48,552 438,497
12b-1 fee Class A 266,568 13,400 26,854 306,822
Professional fees 59,241 54,726 53,235 (30,850)(c) 136,352
Transfer agency fee 229,546 26,105 24,997 280,648
Registration and filing fees 35,003 26,254 24,502 (47,225)(c) 38,534
Directors' fees and expenses 27,642 27,625 28,625 83,892
Amortization of organization costs 226 6,315 5,913 (12,228)(c) 226
Other 64,197 21,632 27,594 (2,468)(c) 110,955
------------- ------------- ------------- ------------- -------------
Total expenses 1,523,117 284,520 293,856 (92,771) 2,008,722
------------- ------------- ------------- ------------- -------------
Less: Expenses reimbursable and fees waived
by the Manager (188,156) (218,074) (159,809) 92,771(b) (473,268)
------------- ------------- ------------- ------------- -------------
Net operating expenses 1,334,961 66,446 134,047 1,535,454
------------- ------------- ------------- -------------
Interest and other non-operating expenses 29,022 9,825 127 38,974
------------- ------------- ------------- -------------
Net investment loss (290,519) (36,880) (13,241) (340,640)
------------- ------------- ------------- -------------
Realized and unrealized gain (loss):
Net realized gain (loss) on:
Investment transactions (22,482) (214,404) 838,886 602,000
Foreign currency transactions 284,343 (20,507) (11,069) 252,767
------------- ------------- ------------- -------------
Net realized gain (loss) 261,861 (234,911) 827,817 854,767
------------- ------------- ------------- -------------
Net unrealized appreciation (depreciation) on:
Investments (2,488,114) (492,034) (60,327) (3,040,475)
Foreign currency transactions (2,064) 7,964 2,666 8,566
------------- ------------- ------------- -------------
Net unrealized depreciation during the period (2,490,178) (484,070) (57,661) (3,031,909)
------------- ------------- ------------- -------------
Net realized and unrealized gain (loss) (2,228,317) (718,981) 770,156 (2,177,142)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from operations $(2,518,836) $ (755,861) $ 756,915 $(2,517,782)
============= ============= ============= =============
*Net of foreign taxes withheld of $ 35,128 $ 4,265 $ - $ 39,393
</TABLE>
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
NOTES TO THE PRO FORMA COMBINING FINANCIAL STATEMENTS
JUNE 30, 1998 (UNAUDITED)
Pro Forma information is intended to provide shareholders of Govett Asia Fund
and Govett Latin America Fund with information about the proposed reorganization
by indicating how the reorganization might have affected the Statement of Assets
and Liabilities and Statements of Operations of the Acquiring Fund had the
reorganization been consummated as of June 30, 1998 and at the beginning of each
of the periods for which the Statements of Operations are presented.
The pro forma combining statement of assets and liabilities as of June 30, 1998
and the pro forma combining statement of operations for the six months ended
June 30, 1998, have been prepared to reflect the reorganization described below
among Govett Emerging Markets Equity Fund, Govett Asia Fund and Govett Latin
America Fund after giving effect to pro forma adjustments described in the notes
below:
(a) The acquisition by Govett Emerging Markets Equity Fund of all of the assets
of Govett Asia Fund and Govett Latin America Fund in exchange for shares of
Govett Emerging Markets Equity Fund having a net asset value equal to the
net asset value of all the outstanding shares of Govett Asia Fund and
Govett Latin America Fund and the assumption by Govett Emerging Markets
Equity Fund of stated liabilities of Govett Asia Fund and Govett Latin
America Fund.
(b) Waiver of investment advisory fees was adjusted to reflect the advisor's
commitment to voluntarily waive fees in excess of 2.50% for Govett Emerging
Markets Equity Fund.
(c) Actual expenses incurred by the individual funds, for various expenses
included on a pro forma basis, were reduced to reflect estimated savings
arising from the reorganization.
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY DESCRIPTION
- ------------------------------------- ---------------------------------------------- ----------------------------------------
GOVETT GOVETT GOVETT GOVETT
EMERGING LATIN PRO FORMA EMERGING LATIN PRO FORMA
MARKETS AMERICA COMBINED MARKETS AMERICA COMBINED
EQUITY FUND FUND PORTFOLIO EQUITY FUND FUND PORTFOLIO
- ------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS - 92.3%
ARGENTINA - 5.4%
21,700 7,300 29,000 Banco Frances del Rio de la Plata $ 163,858 $ 55,123 $ 218,981
- 3,800 3,800 Importadora y Exportadora Patagonia - 57,274 57,274
8,800 2,160 10,960 Telefonica de Argentina ADR 285,450 70,065 355,515
11,800 3,700 15,500 YPF ADR 354,737 111,231 465,968
----------- ---------- -----------
804,045 293,693 1,097,738
----------- ---------- -----------
BRAZIL - 11.7%
9,440 3,900 13,340 Cemig ADR 292,192 120,722 412,914
9,756,000 4,079,000 13,835,000 Electrobras 286,805 119,914 406,719
17,755,000 5,169,000 22,924,000 Gerasul* 24,256 7,062 31,318
- 27,000 27,000 Guararapes - 77,039 77,039
- 3,350 3,350 Pao de Accucar GDR - 75,794 75,794
- 65,000 65,000 Riograndense de Telecommunication - 70,870 70,870
1,000,000 - 1,000,000 Saneamento Basico De SP 120,185 - 120,185
- 480,000 480,000 Telebras - 38,183 38,183
6,040 1,740 7,780 Telebras ADR 659,492 189,986 849,478
7,100 2,690 9,790 Unibanco GDR 209,450 79,355 288,805
----------- ---------- -----------
1,592,380 778,925 2,371,305
----------- ---------- -----------
CHILE - 0.6%
- 2,750 2,750 Empresa Nacional Electricidad ADR - 39,187 39,187
- 900 900 Quimica Minera ADR - 30,150 30,150
- 2,870 2,870 Telecomunicacoes de Chile ADR - 58,297 58,297
----------- ---------- -----------
- 127,634 127,634
----------- ---------- -----------
CHINA - 1.4%
569,000 - 569,000 Qingling Motors 157,892 - 157,892
9,760 - 9,760 Zhejiang Southeast Electric Power GDR* 135,664 - 135,664
----------- ---------- -----------
293,556 - 293,556
----------- ---------- -----------
CROATIA - 0.6%
7,450 - 7,450 Pliva GDR 121,063 - 121,063
----------- ---------- -----------
CZECH REPUBLIC - 2.4%
17,350 - 17,350 Komercni Banka 219,478 - 219,478
19,714 - 19,714 SPT Telekom* 272,890 - 272,890
----------- ---------- -----------
492,368 - 492,368
----------- ---------- -----------
EGYPT - 3.5%
3,500 - 3,500 Al-Ahram Beverages GDR 111,300 - 111,300
14,100 - 14,100 Commercial International Bank GDR 152,985 - 152,985
3,000 - 3,000 Madinet NASR 143,569 - 143,569
22,000 - 22,000 Paint & Chemical Industries GDR 206,250 - 206,250
6,025 - 6,025 Tourah Portland Cement 103,765 - 103,765
----------- ---------- -----------
717,869 - 717,869
----------- ---------- -----------
GREECE - 7.0%
2,500 - 2,500 Alpha Credit Bank 202,884 - 202,884
16,400 - 16,400 Hellenic Petroleum* 134,090 - 134,090
18,443 - 18,443 Hellenic Telecommunication Organization 473,307 - 473,307
3,140 - 3,140 National Bank of Greece 402,819 - 402,819
3,100 - 3,100 Titan Cement 203,025 - 203,025
----------- ---------- -----------
1,416,125 - 1,416,125
----------- ---------- -----------
HONG KONG - 1.1%
126,000 - 126,000 China Telecom 218,727 - 218,727
----------- ---------- -----------
HUNGARY - 4.1%
2,540 - 2,540 Gedeon Richter GDR* 203,200 - 203,200
8,400 - 8,400 Matav ADR 247,275 - 247,275
6,496 - 6,496 MOL Magyar Olaj-es Gazipari GDR 175,392 - 175,392
4,050 - 4,050 OTP Bank GDR 196,628 - 196,628
----------- ---------- -----------
822,495 - 822,495
----------- ---------- -----------
</TABLE>
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY DESCRIPTION
- ------------------------------------- ---------------------------------------------- ----------------------------------------
GOVETT GOVETT GOVETT GOVETT
EMERGING LATIN PRO FORMA EMERGING LATIN PRO FORMA
MARKETS AMERICA COMBINED MARKETS AMERICA COMBINED
EQUITY FUND FUND PORTFOLIO EQUITY FUND FUND PORTFOLIO
- ------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INDIA - 5.5%
883 - 883 Hindalco Industries $ 13,901 $ - $ 13,901
7,900 - 7,900 Hindustan Lever 281,251 - 281,251
15,200 - 15,200 ITC 233,736 - 233,736
4,598 - 4,598 Larsen & Toubro 24,866 - 24,866
17,200 - 17,200 Mahanager Telephone Nigam GDR* 180,170 - 180,170
8,700 - 8,700 Ranbaxy Laboratories 112,341 - 112,341
54,700 - 54,700 Reliance Industries 184,870 - 184,870
19,000 - 19,000 State Bank of India 94,104 - 94,104
----------- ---------- -----------
1,125,239 - 1,125,239
----------- ---------- -----------
ISRAEL - 5.7%
303,000 - 303,000 Bank Leumi Le-Israel* 604,431 - 604,431
5,200 - 5,200 ECI Telecom 196,950 - 196,950
1,600 - 1,600 Koor Industries 184,875 - 184,875
5,150 - 5,150 Teva Pharmaceutical Industries ADR 181,216 - 181,216
----------- ---------- -----------
1,167,472 - 1,167,472
----------- ---------- -----------
MEXICO - 18.9%
- 18,800 18,800 Apasco - 98,700 98,700
27,500 - 27,500 Cemex ADR 242,374 - 242,374
156,250 52,800 209,050 Cifra C 216,896 73,293 290,189
- 92,000 92,000 Controladora Comercial Mexicana - 75,929 75,929
11,120 1,980 13,100 Femsa 346,321 61,665 407,986
46,700 15,000 61,700 Grupo Financiero Banamex* 90,902 29,197 120,099
33,700 14,500 48,200 Grupo Financiero Bancomer GDR 248,706 106,820 355,526
- 81,500 81,500 Grupo Financiero Banorte* - 88,113 88,113
- 17,000 17,000 Grupo Industrial Saltillo - 56,727 56,727
5,100 - 5,100 Grupo Televisa GDR* 191,887 - 191,887
46,000 - 46,000 Kimberly-Clark de Mexico 162,449 - 162,449
71,000 - 71,000 Organizacion Soriana 203,748 - 203,748
- 3,400 3,400 Panamerican Beverages - 106,888 106,888
326,000 - 326,000 Telefonos de Mexico 770,536 - 770,536
- 5,730 5,730 Telefonos de Mexico ADR - 275,398 275,398
23,150 7,850 31,000 Tubo de Acero de Mexico ADR 296,609 100,578 397,187
----------- ---------- -----------
2,770,428 1,073,308 3,843,736
----------- ---------- -----------
POLAND - 1.2%
7,000 - 7,000 Bank Handlowy W Warszawie* 135,653 - 135,653
3,900 - 3,900 Bank Rozwoju Eksportu 105,693 - 105,693
----------- ---------- -----------
241,346 - 241,346
----------- ---------- -----------
RUSSIA - 0.3%
18,877 - 18,877 Trade House GUM ADR* 56,631 - 56,631
----------- ---------- -----------
SOUTH AFRICA - 8.2%
52,000 - 52,000 ABSA Group 325,041 - 325,041
14,000 - 14,000 Liberty Life 273,413 - 273,413
28,000 - 28,000 Rembrandt Group 175,022 - 175,022
11,500 - 11,500 Reunert 13,017 - 13,017
19,000 - 19,000 Sasol 110,259 - 110,259
60,000 - 60,000 Smith (C.G.) 165,224 - 165,224
16,500 - 16,500 South African Breweries 340,077 - 340,077
14,000 - 14,000 Tiger Oats 123,461 - 123,461
109,000 - 109,000 Wooltru 139,950 - 139,950
----------- ---------- -----------
1,665,464 - 1,665,464
----------- ---------- -----------
TAIWAN - 2.7%
35,200 - 35,200 Compal Electronics* 94,760 - 94,760
104,000 - 104,000 CTCI* 189,171 - 189,171
17,400 - 17,400 Delta Electronic Industrial 58,235 - 58,235
84,720 - 84,720 Nien Hsing Textile* 197,250 - 197,250
----------- ---------- -----------
539,416 - 539,416
----------- ---------- -----------
</TABLE>
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SECURITY DESCRIPTION
- ------------------------------------- ---------------------------------------------- ----------------------------------------
GOVETT GOVETT GOVETT GOVETT
EMERGING LATIN PRO FORMA EMERGING LATIN PRO FORMA
MARKETS AMERICA COMBINED MARKETS AMERICA COMBINED
EQUITY FUND FUND PORTFOLIO EQUITY FUND FUND PORTFOLIO
- ------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
THAILAND - 2.6%
12,100 - 12,100 Advanced Info Service $ 51,611 $ - $ 51,611
5,900 - 5,900 BEC World 22,510 - 22,510
96,500 - 96,500 Electricity Generating* 129,070 - 129,070
24,600 - 24,600 PTT Exploration and Production* 186,540 - 186,540
145,400 - 145,400 Thai Farmers Bank 128,345 - 128,345
----------- ---------- -----------
518,076 - 518,076
----------- ---------- -----------
TURKEY - 8.0%
930,000 - 930,000 Alcatel Teletas Komunikasyon 122,231 - 122,231
1,500,000 - 1,500,000 Eregli Demir* 233,759 - 233,759
6,100,000 - 6,100,000 Sabanci Holding 377,957 - 377,957
11,037,500 - 11,037,500 Turkiye Is Bankasi 445,562 - 445,562
17,823,000 - 17,823,000 Yapi ve Kredi Bankasi 455,112 - 455,112
----------- ---------- -----------
1,634,621 - 1,634,621
----------- ---------- -----------
VENEZUELA - 1.4%
7,270 4,270 11,540 CANTV ADR 181,750 106,750 288,500
----------- ---------- -----------
TOTAL COMMON STOCKS
(Cost $18,361,152 and $2,893,060, respectively,
for a total of $21,254,212) 16,379,071 2,380,310 18,759,381
----------- ---------- -----------
PREFERRED STOCKS - 7.7%
BRAZIL - 7.7%
121,200 84,700 205,900 Banco Itau 69,164 48,335 117,499
25,000,000 8,800,000 33,800,000 Copel 233,453 82,176 315,629
2,647,000 960,000 3,607,000 Petrobras 492,071 178,462 670,533
1,650,000 380,000 2,030,000 Telesp Celular* 136,959 31,542 168,501
836,000 380,000 1,216,000 Telesp 196,613 89,369 285,982
----------- ---------- -----------
1,128,260 429,884 1,558,144
----------- ---------- -----------
TOTAL PREFERRED STOCKS
(Cost $1,326,718 and $470,859, respectively,
for a total of $1,797,577) 1,128,260 429,884 1,558,144
----------- ---------- -----------
WARRANTS AND RIGHTS* - 0.0%
BRAZIL - 0.0%
39,292 17,859 57,151 Telesp Rights, expire 7/2/98 662 301 963
----------- ---------- -----------
GREECE - 0.0%
2,500 - 2,500 Alpha Credit Bank Rights, expire 7/24/98 4,263 - 4,263
----------- ---------- -----------
TOTAL WARRANTS AND RIGHTS
(Cost $0 and $0, respectively, for a total
of $0) 4,925 301 5,226
----------- ---------- -----------
TOTAL INVESTMENTS - 100%
(Cost $19,687,870 and $3,363,919, respectively,
for a total of $23,061,789) $17,512,256 $2,810,495 $20,322,751
=========== ========== ===========
</TABLE>
* Non-income producing security
ADR American Depositary Receipt
GDR Global Depositary Receipt
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILIITES
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
GOVETT GOVETT
EMERGING LATIN
MARKETS AMERICA PRO FORMA
EQUITY FUND FUND COMBINED
-------------- ------------- --------------
<S> <C> <C> <C>
ASSETS:
Investments, at value - (see accompanying Schedule of Investments) $ 17,512,256 $ 2,810,495 $ 20,322,751
Cash 362,109 79,709 441,818
Foreign currency, at value 1,057,767 1,424 1,059,191
Receivable from:
Securities sold 443,063 158,372 601,435
Fund shares sold 52,892 - 52,892
Dividends and interest 130,603 32,907 163,510
Reimbursement from investment manager 20,947 27,663 48,610
Other assets 3,087 3,116 6,203
-------------- ------------- --------------
Total assets 19,582,724 3,113,686 22,696,410
-------------- ------------- --------------
LIABILITIES:
Payable for:
Securities purchased - 32,249 32,249
Fund shares repurchased 2,931 24,240 27,171
Deferred foreign country taxes 12,683 - 12,683
Accrued expenses and other liabilities 152,968 77,139 230,107
-------------- ------------- --------------
Total liabilities 168,582 133,628 302,210
-------------- ------------- --------------
Net assets $ 19,414,142 $ 2,980,058 $ 22,394,200
-------------- ------------- --------------
NET ASSETS CONSIST OF:
Paid-in-capital $ 30,595,391 $ 4,722,333 $ 35,317,724
Undistributed net investment income (loss) (57,500) 31,317 (26,183)
Accumulated net realized loss on investments and foreign
currency transactions (8,873,688) (1,221,687) (10,095,375)
Net unrealized depreciation on investments, forward currency
contracts and net other assets (net of accrued foreign country tax
unrealized appreciation) (2,250,061) (551,905) (2,801,966)
-------------- ------------- --------------
Net assets $ 19,414,142 $ 2,980,058 $ 22,394,200
Shares outstanding 1,989,192 405,647 2,294,488
-------------- ------------- --------------
Net Asset Value and redemption price per Class A share (a) $ 9.76 $ 7.35 $ 9.76
-------------- ------------- --------------
Cost of investments $ 19,687,870 $ 3,363,919 $ 23,051,789
Cost of foreign currency $ 1,115,564 $ 1,482 $ 1,117,046
</TABLE>
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
GOVETT GOVETT
EMERGING LATIN
MARKETS AMERICA PRO FORMA
EQUITY FUND FUND ADJUSTMENTS COMBINED
--------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
Investment income:
Interest* $ 9,594 $ 1,816 $ 11,410
Dividends* 358,595 81,909 440,504
-------------- ------------- --------------
Total investment income 368,189 83,725 451,914
-------------- ------------- --------------
Expenses:
Management fee 134,118 20,875 154,993
Custody and administration fees 151,635 25,085 176,720
12b-1 fee Class A 50,689 7,899 58,588
Professional fees 21,972 21,972 (7,649)(c) 36,295
Transfer agency fee 86,911 12,456 99,367
Registration and filing fees 11,679 8,321 (7,439)(c) 12,561
Directors' fees and expenses 11,450 11,132 22,582
Amortization of organization costs - 2,908 (2,908)(c) -
Other 23,423 8,171 (379)(c) 31,215
-------------- ------------- --------- --------------
Total expenses 491,877 118,819 (18,375) 592,321
-------------- ------------- --------- --------------
Less: Expenses reimbursable and fees waived by the Manager (157,759) (66,708) 18,375 (b) (206,092)
-------------- ------------- --------- --------------
Net operating expenses 334,118 52,111 386,229
-------------- ------------- --------------
Interest and other non-operating expenses 7,238 297 7,535
-------------- ------------- --------------
Net investment income 26,833 31,317 58,150
-------------- ------------- --------------
Realized and unrealized loss:
Net realized loss on:
Investment transactions (2,711,049) (208,372) (2,919,421)
Foreign Currency transactions (71,943) (2,573) (74,516)
-------------- ------------- --------------
Net realized loss (2,782,992) (210,945) (2,993,937)
-------------- ------------- --------------
Net unrealized depreciation on:
Investments (2,260,479) (862,654) (3,123,133)
Foreign currency transactions (56,638) (777) (57,415)
-------------- ------------- --------------
Net unrealized depreciation during the period (2,317,117) (863,431) (3,180,548)
-------------- ------------- --------------
Net realized and unrealized loss (5,100,109) (1,074,376) (6,174,485)
-------------- ------------- --------------
Net decrease in net assets resulting from operations $ (5,073,276) $(1,043,059) $ (6,116,335)
============== ============= ==============
*Net of foreign taxes withheld of $ 604 $ 136 $ 740
</TABLE>
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
GOVETT GOVETT
EMERGING LATIN
MARKETS AMERICA PRO FORMA
EQUITY FUND FUND ADJUSTMENTS COMBINED
--------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
Investment income:
Interest* $ 36,269 $ 7,107 $ 43,376
Dividends* 1,037,195 113,826 1,151,021
-------------- ------------- --------------
Total investment income 1,073,464 120,933 1,194,397
-------------- ------------- --------------
Expenses:
Management fee 532,713 53,584 586,297
Custody and administration fees 307,981 48,552 356,533
12b-1 fee Class A 266,568 26,854 293,422
Professional fees 59,241 53,235 (15,425)(c) 97,051
Transfer agency fee 229,546 24,997 254,543
Registration and filing fees 35,003 24,502 (22,619)(c) 36,886
Directors' fees and expenses 27,642 28,625 56,267
Amortization of organization costs 226 5,913 (5,913)(c) 226
Other 64,197 27,594 (1,617)(c) 90,174
-------------- ------------- --------- --------------
Total expenses 1,523,117 293,856 (45,574) 1,771,399
-------------- ------------- --------- --------------
Less: Expenses reimbursable and fees waived by the Manager (188,156) (159,809) 45,574 (b) (302,391)
-------------- ------------- --------- --------------
Net operating expenses 1,334,961 134,047 1,469,008
-------------- ------------- --------------
Interest and other non-operating expenses 29,022 127 29,149
-------------- ------------- --------------
Net investment loss (290,519) (13,241) (303,760)
-------------- ------------- --------------
Realized and unrealized gain (loss):
Net realized gain (loss) on:
Investment transactions (22,482) 838,886 816,404
Foreign currency transactions 284,343 (11,069) 273,274
-------------- ------------- --------------
Net realized gain 261,861 827,817 1,089,678
-------------- ------------- --------------
Net unrealized appreciation (depreciation) on:
Investments (2,488,114) (60,327) (2,548,441)
Foreign currency transactions (2,064) 2,666 602
-------------- ------------- --------------
Net unrealized depreciation during the period (2,490,178) (57,661) (2,547,839)
-------------- ------------- --------------
Net realized and unrealized gain (loss) (2,228,317) 770,156 (1,458,161)
-------------- ------------- --------------
Net increase (decrease) in net assets resulting
from operations $ (2,518,836) $ 756,915 $ (1,761,921)
============== ============= ==============
*Net of foreign taxes withheld of $ 35,128 $ - $ 35,128
</TABLE>
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
NOTES TO THE PRO FORMA COMBINING FINANCIAL STATEMENTS
JUNE 30, 1998 (UNAUDITED)
Pro Forma information is intended to provide shareholders of Govett Latin
America Fund with information about the proposed reorganization by indicating
how the reorganization might have affected the Statement of Assets and
Liabilities and Statements of Operations of the Acquiring Fund had the
reorganization been consummated as of June 30, 1998 and at the beginning of each
of the periods for which the Statements of Operations are presented.
The pro forma combining statement of assets and liabilities as of June 30, 1998
and the pro forma combining statement of operations for the six months ended
June 30, 1998, have been prepared to reflect the reorganization described below
between Govett Emerging Markets Equity Fund and Govett Latin America Fund after
giving effect to pro forma adjustments described in the notes below:
(a) The acquisition by Govett Emerging Markets Equity Fund of all of the assets
of Govett Latin America Fund in exchange for shares of Govett Emerging
Markets Equity Fund having a net asset value equal to the net asset value
of all the outstanding shares of Govett Latin America Fund and the
assumption by Govett Emerging Markets Equity Fund of stated liabilities of
Govett Latin America Fund.
(b) Waiver of investment advisory fees was adjusted to reflect the advisor's
commitment to voluntarily waive fees in excess of 2.50% for Govett Emerging
Markets Equity Fund.
(c) Actual expenses incurred by the individual funds, for various expenses
included on a pro forma basis, were reduced to reflect estimated savings
arising from the reorganization.
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
- ------------------------------------- ---------------------------------------------- ----------------------------------------
GOVETT GOVETT
EMERGING PRO FORMA EMERGING PRO FORMA
MARKETS GOVETT COMBINED MARKETS GOVETT COMBINED
EQUITY FUND ASIA FUND PORTFOLIO EQUITY FUND ASIA FUND FUND
- ------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS - 93.8%
ARGENTINA - 4.4%
21,700 - 21,700 Banco Frances del Rio de la Plata $ 163,858 $ - $ 163,858
8,800 - 8,800 Telefonica de Argentina ADR 285,450 - 285,450
11,800 - 11,800 YPF ADR 354,737 - 354,737
----------- ---------- -----------
804,045 - 804,045
----------- ---------- -----------
AUSTRALIA - 0.8%
- 3,000 3,000 AMP - 35,154 35,154
- 23,800 23,800 Goodman Fielder - 34,677 34,677
- 2,800 2,800 Howard Smith - 16,492 16,492
- 24,900 24,900 Pasminco - 18,989 18,989
- 11,900 11,900 Woolworths Holdings - 38,734 38,734
----------- ---------- -----------
- 144,046 144,046
----------- ---------- -----------
BRAZIL - 8.7%
9,440 - 9,440 Cemig ADR 292,192 - 292,192
9,756,000 - 9,756,000 Electrobras 286,805 - 286,805
17,755,000 - 17,755,000 Gerasul* 24,256 - 24,256
1,000,000 - 1,000,000 Saneamento Basico De SP 120,185 - 120,185
6,040 - 6,040 Telebras ADR 659,492 - 659,492
7,100 - 7,100 Unibanco GDR 209,450 - 209,450
----------- ---------- -----------
1,592,380 - 1,592,380
----------- ---------- -----------
CHINA - 1.6%
569,000 - 569,000 Qingling Motors 157,892 - 157,892
9,760 - 9,760 Zhejiang Southeast Electric Power GDR* 135,664 - 135,664
----------- ---------- -----------
293,556 - 293,556
----------- ---------- -----------
CROATIA - 0.7%
7,450 - 7,450 Pliva GDR 121,063 - 121,063
----------- ---------- -----------
CZECH REPUBLIC - 2.7%
17,350 - 17,350 Komercni Banka 219,478 - 219,478
19,714 - 19,714 SPT Telekom* 272,890 - 272,890
----------- ---------- -----------
492,368 - 492,368
----------- ---------- -----------
EGYPT - 3.9%
3,500 - 3,500 Al-Ahram Beverages GDR 111,300 - 111,300
14,100 - 14,100 Commercial International Bank GDR 152,985 - 152,985
3,000 - 3,000 Madinet NASR 143,569 - 143,569
22,000 - 22,000 Paint & Chemical Industries GDR 206,250 - 206,250
6,025 - 6,025 Tourah Portland Cement 103,765 - 103,765
----------- ---------- -----------
717,869 - 717,869
----------- ---------- -----------
GREECE - 7.8%
2,500 - 2,500 Alpha Credit Bank 202,884 - 202,884
16,400 - 16,400 Hellenic Petroleum* 134,090 - 134,090
18,443 - 18,443 Hellenic Telecommunication Organization 473,307 - 473,307
3,140 - 3,140 National Bank of Greece 402,819 - 402,819
3,100 - 3,100 Titan Cement 203,025 - 203,025
----------- ---------- -----------
1,416,125 - 1,416,125
----------- ---------- -----------
HONG KONG - 1.9%
- 52,000 52,000 China Resources Beijing Land - 16,779 16,779
126,000 16,000 142,000 China Telecom 218,727 27,775 246,502
- 2,200 2,200 Hong Kong & Shanghai Bank Holdings - 53,807 53,807
- 6,000 6,000 Hutchinson Whampoa - 31,673 31,673
----------- ---------- -----------
218,727 130,034 348,761
----------- ---------- -----------
HUNGARY - 4.5%
2,540 - 2,540 Gedeon Richter GDR* 203,200 - 203,200
8,400 - 8,400 Matav ADR 247,275 - 247,275
6,496 - 6,496 MOL Magyar Olaj-es Gazipari GDR 175,392 - 175,392
4,050 - 4,050 OTP Bank GDR 196,628 - 196,628
----------- ---------- -----------
822,495 - 822,495
----------- ---------- -----------
</TABLE>
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
- ------------------------------------- ---------------------------------------------- ----------------------------------------
GOVETT GOVETT
EMERGING PRO FORMA EMERGING PRO FORMA
MARKETS GOVETT COMBINED MARKETS GOVETT COMBINED
EQUITY FUND ASIA FUND FUND EQUITY FUND ASIA FUND FUND
- ------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INDIA - 6.2%
883 - 883 Hindalco Industries $ 13,901 $ - $ 13,901
7,900 - 7,900 Hindustan Lever 281,251 - 281,251
15,200 - 15,200 ITC 233,736 - 233,736
4,598 - 4,598 Larsen & Toubro 24,866 - 24,866
17,200 - 17,200 Mahanager Telephone Nigam GDR* 180,170 - 180,170
8,700 - 8,700 Ranbaxy Laboratories 112,341 - 112,341
54,700 - 54,700 Reliance Industries 184,870 - 184,870
19,000 - 19,000 State Bank of India 94,104 - 94,104
----------- ---------- -----------
1,125,239 - 1,125,239
----------- ---------- -----------
ISRAEL - 6.4%
303,000 - 303,000 Bank Leumi Le-Israel* 604,431 - 604,431
5,200 - 5,200 ECI Telecom 196,950 - 196,950
1,600 - 1,600 Koor Industries 184,875 - 184,875
5,150 - 5,150 Teva Pharmaceutical Industries ADR 181,216 - 181,216
----------- ---------- -----------
1,167,472 - 1,167,472
----------- ---------- -----------
JAPAN - 1.9%
- 800 800 Aderans - 17,544 17,544
- 3,000 3,000 Alpine Electronics* - 31,164 31,164
- 1,000 1,000 Fuji Photo Film - 34,843 34,843
- 2,000 2,000 Fujitsu - 21,065 21,065
- 1,000 1,000 Ito-Yokado - 47,107 47,107
- 1,000 1,000 Kikkoman - 5,266 5,266
- 3,000 3,000 Kirin Brewery - 28,351 28,351
- 1,000 1,000 Mitsui Fudosan - 7,907 7,907
- 400 400 Nintendo - 37,080 37,080
- 3 3 Nippon Telegraph & Telephone - 24,888 24,888
- 1 1 NTT Data Communications Systems - 36,142 36,142
- 100 100 Shohkoh Fund - 24,600 24,600
- 400 400 Sony - 34,483 34,483
----------- ---------- -----------
- 350,440 350,440
----------- ---------- -----------
MEXICO - 15.2%
27,500 - 27,500 Cemex ADR 242,374 - 242,374
156,250 - 156,250 Cifra C 216,896 - 216,896
11,120 - 11,120 Femsa 346,321 - 346,321
46,700 - 46,700 Grupo Financiero Banamex* 90,902 - 90,902
33,700 - 33,700 Grupo Financiero Bancomer GDR 248,706 - 248,706
5,100 - 5,100 Grupo Televisa GDR* 191,887 - 191,887
46,000 - 46,000 Kimberly-Clark de Mexico 162,449 - 162,449
71,000 - 71,000 Organizacion Soriana 203,748 - 203,748
326,000 - 326,000 Telefonos de Mexico 770,536 - 770,536
23,150 - 23,150 Tubo de Acero de Mexico ADR 296,609 - 296,609
----------- ---------- -----------
2,770,428 - 2,770,428
----------- ---------- -----------
PHILLIPPINES - 0.1%
- 2,736 2,736 Far East Bank & Trust (partly paid) - 2,296 2,296
- 4,100 4,100 Metropolitan Bank & Trust - 24,089 24,089
----------- ---------- -----------
- 26,385 26,385
----------- ---------- -----------
POLAND - 1.3%
7,000 - 7,000 Bank Handlowy W Warszawie* 135,653 - 135,653
3,900 - 3,900 Bank Rozwoju Eksportu 105,693 - 105,693
----------- ---------- -----------
241,346 - 241,346
----------- ---------- -----------
RUSSIA - 0.3%
18,877 - 18,877 Trade House GUM ADR 56,631 - 56,631
----------- ---------- -----------
SINGAPORE - 0.3%
- 5,300 5,300 Development Bank of Singapore - 29,331 29,331
- 4,000 4,000 Singapore Press Holdings - 26,754 26,754
----------- ---------- -----------
- 56,085 56,085
----------- ---------- -----------
</TABLE>
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
- ------------------------------------- ---------------------------------------------- ----------------------------------------
GOVETT GOVETT
EMERGING PRO FORMA EMERGING PRO FORMA
MARKETS GOVETT COMBINED MARKETS GOVETT COMBINED
EQUITY FUND ASIA FUND FUND EQUITY FUND ASIA FUND FUND
- ------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SOUTH AFRICA - 9.1%
----------- ---------- -----------
52,000 - 52,000 ABSA Group $ 325,041 $ - $ 325,041
14,000 - 14,000 Liberty Life 273,413 - 273,413
28,000 - 28,000 Rembrandt Group 175,022 - 175,022
11,500 - 11,500 Reunert 13,017 - 13,017
19,000 - 19,000 Sasol 110,259 - 110,259
60,000 - 60,000 Smith (C.G.) 165,224 - 165,224
16,500 - 16,500 South African Breweries 340,077 - 340,077
14,000 - 14,000 Tiger Oats 123,461 - 123,461
109,000 - 109,000 Wooltru 139,950 - 139,950
----------- ---------- -----------
1,665,464 - 1,665,464
----------- ---------- -----------
TAIWAN - 3.0%
35,200 1,600 36,800 Compal Electronics* 94,760 4,307 99,067
104,000 - 104,000 CTCI* 189,171 - 189,171
17,400 - 17,400 Delta Electronic Industrial 58,235 - 58,235
84,720 3,080 87,800 Nien Hsing Textile* 197,250 7,171 204,421
----------- ---------- -----------
539,416 11,478 550,894
----------- ---------- -----------
THAILAND - 3.0%
12,100 5,100 17,200 Advanced Info Service 51,611 21,753 73,364
5,900 - 5,900 BEC World 22,510 - 22,510
96,500 - 96,500 Electricity Generating* 129,070 - 129,070
- - - Electricity Generating - - -
24,600 - 24,600 PTT Exploration and Production* 186,540 - 186,540
145,400 18,400 163,800 Thai Farmers Bank 128,345 16,242 144,587
----------- ---------- -----------
518,076 37,995 556,071
----------- ---------- -----------
TURKEY - 9.0%
930,000 - 930,000 Alcatel Teletas Komunikasyon 122,231 - 122,231
1,500,000 - 1,500,000 Eregli Demir* 233,759 - 233,759
6,100,000 - 6,100,000 Sabanci Holding 377,957 - 377,957
11,037,500 - 11,037,500 Turkiye Is Bankasi 445,562 - 445,562
17,823,000 - 17,823,000 Yapi ve Kredi Bankasi 455,112 - 455,112
----------- ---------- -----------
1,634,621 - 1,634,621
----------- ---------- -----------
VENEZUELA - 1.0%
7,270 - 7,270 CANTV ADR 181,750 - 181,750
----------- ---------- -----------
TOTAL COMMON STOCKS
(Cost $18,361,152 and $871,133, respectively,
for a total of $19,232,285) 16,379,071 756,463 17,135,534
----------- ---------- -----------
PREFERRED STOCKS - 6.2%
BRAZIL - 6.2%
121,200 - 121,200 Banco Itau 69,164 - 69,164
25,000,000 - 25,000,000 Copel 233,453 - 233,453
2,647,000 - 2,647,000 Petrobras 492,071 - 492,071
1,650,000 - 1,650,000 Telesp Celular* 136,959 - 136,959
836,000 - 836,000 Telesp 196,613 - 196,613
----------- ---------- -----------
1,128,260 - 1,128,260
----------- ---------- -----------
MALAYSIA - 0.0%
- 20,000 20,000 Multi-Purpose Holdings, expire 1/13/02 - 1,301 1,301
----------- ---------- -----------
TOTAL PREFERRED STOCKS
(Cost $1,326,718 and $8,005, respectively,
for a total of $1,334,723) 1,128,260 1,301 1,129,561
----------- ---------- -----------
</TABLE>
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
- ------------------------------------- ---------------------------------------------- ----------------------------------------
GOVETT GOVETT
EMERGING PRO FORMA EMERGING PRO FORMA
MARKETS GOVETT COMBINED MARKETS GOVETT COMBINED
EQUITY FUND ASIA FUND FUND EQUITY FUND ASIA FUND FUND
- ------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
WARRANTS AND RIGHTS* - 0.0%
BRAZIL - 0.0%
39,292 - 39,292 Telesp Rights, expire 7/2/98 $ 662 $ - $ 662
----------- ---------- -----------
GREECE - 0.0%
2,500 - 2,500 Alpha Credit Bank Rights, expire 7/24/98 4,263 - 4,263
----------- ---------- -----------
HONG KONG - 0.0%
- 18,400 18,400 Oriental Press Group Warrants, expire 10/2/98 - 24 24
----------- ---------- -----------
JAPAN - 0.0%
- 20 20 Optec Dai-Ichi Denko Warrants, expire 2/8/00 - 1,020 1,020
----------- ---------- -----------
MALAYSIA - 0.0%
- 971 971 Rashid Hussain Berhad Warrants, expire 3/25/02 - 162 162
----------- ---------- -----------
PHILLIPINES - 0.0%
- 16,200 16,200 Belle Corporation Warrants, expire 10/6/00 - 22 22
----------- ---------- -----------
TOTAL WARRANTS AND RIGHTS
(Cost $0 and $18,027, respectively,
for a total of $18,027) 4,925 1,228 6,153
----------- ---------- -----------
TOTAL INVESTMENTS - 100%
(Cost $19,687,870 and $897,165, respectively,
for a total of $20,585,035) $17,512,256 $ 758,992 $18,271,248
=========== ========== ===========
</TABLE>
* Non-income producing security
ADR American Depositary Receipt
GDR Global Depositary Receipt
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
GOVETT
EMERGING
MARKETS GOVETT PRO FORMA
EQUITY FUND ASIA FUND COMBINED
------------- ------------ -------------
<S> <C> <C> <C>
ASSETS:
Investments, at value - (see accompanying Schedule of Investments) $17,512,256 $ 758,992 $ 18,271,248
Cash 362,109 73,178 435,287
Foreign currency, at value 1,057,767 81,761 1,139,528
Receivable from:
Securities sold 443,063 81,027 524,090
Fund shares sold 52,892 100 52,992
Dividends and interest 130,603 2,531 133,134
Reimbursement from investment manager 20,947 47,196 68,143
Other assets 3,087 3,087 6,174
------------- ------------ --------------
Total assets 19,582,724 1,047,872 20,630,596
------------- ------------ --------------
LIABILITIES:
Payable for:
Securities purchased - 42,177 42,177
Fund shares repurchased 2,931 - 2,931
Deferred foreign country taxes 12,683 149 12,832
Accrued expenses and other liabilities 152,968 56,276 209,244
------------- ------------ --------------
Total liabilities 168,582 98,602 267,184
------------- ------------ --------------
Net assets $19,414,142 $ 949,270 $ 20,363,412
------------- ------------ --------------
NET ASSETS CONSIST OF:
Paid-in-capital $30,595,391 $4,012,073 $ 34,607,464
Undistributed net investment income (loss) (57,500) (24,209) (81,709)
Accumulated net realized loss on investments and foreign currency
transactions (8,873,688) (2,902,250) (11,775,938)
Net unrealized depreciation on investments, forward currency
contracts and net other assets (net of accrued foreign country tax
unrealized appreciation) (2,250,061) (136,344) (2,386,405)
------------- ------------ --------------
Net assets $19,414,142 $ 949,270 $ 20,363,412
------------- ------------ --------------
Shares outstanding 1,989,192 215,341 2,086,415
------------- ------------ --------------
Net Asset Value and redemption price per Class A share (a) $ 9.76 $ 4.41 $ 9.76
------------- ------------ --------------
Cost of investments $19,687,870 $ 897,165 $ 20,585,035
Cost of foreign currency $ 1,115,564 $ 81,091 $ 1,196,655
</TABLE>
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
GOVETT
EMERGING GOVETT
MARKETS ASIA PRO FORMA
EQUITY FUND FUND ADJUSTMENTS COMBINED
--------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
Investment income:
Interest* $ 9,594 $ 1,454 $ 11,048
Dividends* 358,595 9,760 368,355
-------------- ------------- --------------
Total investment income 368,189 11,214 379,403
-------------- ------------- --------------
Expenses:
Management fee 134,118 6,450 140,568
Custody and administration fees 151,635 34,388 186,023
12b-1 fee Class A 50,689 2,425 53,114
Professional fees 21,972 21,973 (7,649)(c) 36,296
Transfer agency fee 86,911 10,006 96,917
Registration and filing fees 11,679 8,260 (7,439)(c) 12,500
Directors' fees and expenses 11,450 11,713 23,163
Amortization of organization costs - 3,137 (3,137)(c) -
Other 23,423 7,196 (268)(c) 30,351
-------------- ------------- ------------- --------------
Total expenses 491,877 105,548 (18,493) 578,932
-------------- ------------- ------------- --------------
Less: Expenses reimbursable and fees waived by the Manager (157,759) (89,454) 18,493(b) (228,720)
-------------- ------------- ------------- --------------
Net operating expenses 334,118 16,094 350,212
-------------- ------------- --------------
Interest and other non-operating expenses 7,238 24 7,262
-------------- ------------- --------------
Net investment income (loss) 26,833 (4,904) 21,929
-------------- ------------- --------------
Realized and unrealized gain (loss):
Net realized loss on:
Investment transactions (2,711,049) (575,932) (3,286,981)
Foreign Currency transactions (71,943) (1,597) (73,540)
-------------- ------------- --------------
Net realized loss (2,782,992) (577,529) (3,360,521)
-------------- ------------- --------------
Net unrealized appreciation (depreciation) on:
Investments (2,260,479) 238,387 (2,022,092)
Foreign currency transactions (56,638) (3,989) (60,627)
-------------- ------------- --------------
Net unrealized appreciation (depreciation) during the period (2,317,117) 234,398 (2,082,719)
-------------- ------------- --------------
Net realized and unrealized loss (5,100,109) (343,131) (5,443,240)
-------------- ------------- --------------
Net decrease in net assets resulting from operations $ (5,073,276) $ (348,035) $ (5,421,311)
============== ============= ==============
*Net of foreign taxes withheld of $ 604 $ 691 $ 1,295
</TABLE>
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
GOVETT
EMERGING
MARKETS GOVETT PRO FORMA
EQUITY FUND ASIA FUND ADJUSTMENTS COMBINED
--------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
Investment income:
Interest* $ 36,269 $ 3,287 $ 39,556
Dividends* 1,037,195 36,104 1,073,299
-------------- ------------- --------------
Total investment income 1,073,464 39,391 1,112,855
-------------- ------------- --------------
Expenses:
Management fee 532,713 26,499 559,212
Custody and administration fees 307,981 81,964 389,945
12b-1 fee Class A 266,568 13,400 279,968
Professional fees 59,241 54,726 (15,425) 98,542
Transfer agency fee 229,546 26,105 255,651
Registration and filing fees 35,003 26,254 (24,606) 36,651
Directors' fees and expenses 27,642 27,625 55,267
Amortization of organization costs 226 6,315 (6,315) 226
Other 64,197 21,632 (851) 84,978
-------------- ------------- ----------- --------------
Total expenses 1,523,117 284,520 (47,197) 1,760,440
-------------- ------------- ----------- --------------
Less: Expenses reimbursable and fees waived by the Manager (188,156) (218,074) 47,197 (359,033)
-------------- ------------- ----------- --------------
Net operating expenses 1,334,961 66,446 1,401,407
-------------- ------------- --------------
Interest and other non-operating expenses 29,022 9,825 38,847
-------------- ------------- --------------
Net investment loss (290,519) (36,880) (327,399)
-------------- ------------- --------------
Realized and unrealized gain (loss):
Net realized gain (loss) on:
Investment transactions (22,482) (214,404) (236,886)
Foreign currency transactions 284,343 (20,507) 263,836
-------------- ------------- --------------
Net realized gain (loss) 261,861 (234,911) 26,950
-------------- ------------- --------------
Net unrealized appreciation (depreciation) on:
Investments (2,488,114) (492,034) (2,980,148)
Foreign currency transactions (2,064) 7,964 5,900
-------------- ------------- --------------
Net unrealized depreciation during the period (2,490,178) (484,070) (2,974,248)
-------------- ------------- --------------
Net realized and unrealized loss (2,228,317) (718,981) (2,947,298)
-------------- ------------- --------------
Net decrease in net assets resulting from operations $ (2,518,836) $ (755,861) $ (3,274,697)
============== ============= ==============
*Net of foreign taxes withheld of $ 35,128 $ 4,265 $ 39,393
</TABLE>
See accompanying notes to the pro forma combining financial statements
<PAGE>
GOVETT EMERGING MARKETS EQUITY FUND
NOTES TO THE PRO FORMA COMBINING FINANCIAL STATEMENTS
JUNE 30, 1998 (UNAUDITED)
Pro Forma information is intended to provide shareholders of Govett Asia Fund
with information about the proposed reorganization by indicating how the
reorganization might have affected the Statement of Assets and Liabilities and
Statements of Operations of the Acquiring Fund had the reorganization been
consummated as of June 30, 1998 and at the beginning of each of the periods for
which the Statements of Operations are presented.
The pro forma combining statement of assets and liabilities as of June 30, 1998
and the pro forma combining statement of operations for the six months ended
June 30, 1998, have been prepared to reflect the reorganization described below
between Govett Emerging Markets Equity Fund and Govett Asia Fund after giving
effect to pro forma adjustments described in the notes below:
(a) The acquisition by Govett Emerging Markets Equity Fund of all of the assets
of Govett Asia Fund in exchange for shares of Govett Emerging Markets
Equity Fund having a net asset value equal to the net asset value of all
the outstanding shares of Govett Asia Fund and the assumption by Govett
Emerging Markets Equity Fund of stated liabilities of Govett Asia Fund.
(b) Waiver of investment advisory fees was adjusted to reflect the advisor's
commitment to voluntarily waive fees in excess of 2.50% for Govett Emerging
Markets Equity Fund.
(c) Actual expenses incurred by the individual funds, for various expenses
included on a pro forma basis, were reduced to reflect estimated savings
arising from the reorganization.
<PAGE>
THE GOVETT FUNDS, INC.
PART C
OTHER INFORMATION
Item 15. Indemnification
Article VIII of the Articles of Incorporation filed as Exhibit 1 to the
Registration Statement is incorporated herein by reference. The Registrant
has a liability policy under which the Registrant and its directors,
officers and affiliated persons are insured against certain liabilities.
Item 16. Exhibits
(1) Articles of Incorporation of the Registrant are incorporated by
reference to Exhibit 1 to the Registration Statement on Form N-1A
(File Nos. 33-37783 and 811-6229) ("Form N-1A").
(2) By-Laws of the Registrant are incorporated by reference to
Exhibit 2 to the Registrant's Form N-1A.
(3) Not applicable.
(4) Form of Plan of Reorganization is included in Part A.
(5) Not applicable.
(6) (a) Investment Management Agreement dated December 24, 1997, between
the Registrant and AIB Govett, Inc. is incorporated by reference
to Exhibit 5(a) to Registrant's Form N-1A.
(b) Investment Subadvisory Contract dated December 24, 1997 between
AIB Govett, Inc. and AIB Govett Asset Management Limited is
incorporated by reference to Exhibit 5(b) to Registrant's
Form N-1A.
(7) Distribution Agreement dated February 28, 1997 between the
Registrant and FPS Broker Services, Inc. is incorporated herein
by reference to Exhibit 6 to Registrant's Form N-1A.
(8) Not applicable.
C-1
<PAGE>
(9) Custodian Agreement dated December 16, 1991 between the
Registrant and The Chase Manhattan Bank is incorporated by
reference to Exhibit 8 to Registrant's Form N-1A.
(10) (a) Distribution Plan and Service Plan is incorporated herein by
reference on Exhibit 15 to Registrant's Form N-1A.
(b) Rule 18f-3 Plan is incorporated herein by reference to Exhibit
18 to Registrant's Form N-1A.
(11) Opinion and consent of Goodwin, Procter & Hoar LLP.*
(12) Form of opinion and consent of Goodwin, Procter & Hoar LLP as to
tax matters.**
(13) Transfer Agency and Service Agreement dated February 28, 1997,
between the Registrant and FPS Services, Inc. is incorporated
herein by reference to Exhibit 9 to Registrant's Form N-1A.
(14) Consent of PricewaterhouseCoopers LLP, independent auditors of
the Registrant.*
(15) Not applicable.
(16) Powers of Attorney of Directors of the Registrant is incorporated
herein by reference to Post-Effective Amendment No. 22 to
Registrant's Form N-1A.
(17) (a) (1) Form of Proxy Card for Govett Asia Fund.*
(2) Form of Proxy Card of Govett Latin America Fund.*
(b) Prospectus of the Registrant dated April 17, 1998 is
incorporated herein by reference to Post-Effective Amendment
No.22 to Registrant's Form N-1A.
(c) Statement of Additional Information of the Registrant dated April
17, 1998 is incorporated herein by reference to Post-Effective
Amendment No. 22 to Registrant's Form N-1A.
(d) Annual Report of The Govett Funds, Inc. for the fiscal year ended
December 31, 1997 is incorporated herein by reference to the
C-2
<PAGE>
Registrant's filing with the Securities and Exchange Commission
pursuant to Section 30(b)(2) of the Investment Company Act of
1940.
(e) Semi-Annual Report of The Govett Funds, Inc. for the 6-month
period ended June 30, 1998 is incorporated herein by reference to
the Registrant's filing with the Securities and Exchange
Commission pursuant to Section 30(b)(2) of the Investment Company
Act of 1940.
- -----------------------
* Filed herewith
** To be filed by amendment
Item 17. Undertakings
(1) The undersigned registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is
part of this registration statement by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act [17 CFR 230.145c], the reoffering prospectus will
contain the information called for by the applicable registration form
for reofferings by persons who may be deemed underwriters, in addition
to the information called for by the other items of the applicable
form.
(2) The undersigned registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as part of an amendment to the
registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the Securities
Act, each post-effective amendment shall be deemed to be a new
registration statement for the securities offered therein, and the
offering of the securities at that time shall be deemed to be the
initial bona fide offering of them.
C-3
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this registration statement has
been signed on behalf of the registrant, in the City of San Francisco and the
State of California on the 11th day of September, 1998.
THE GOVETT FUNDS, INC.
By: /s/ Sir Victor Garland
----------------------------------
Sir Victor Garland
President
As required by the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the dates
indicated.
Signature Title
/s/ Patrick K. Cunneen
- ------------------------ Chairman of the Board of Directors
Patrick K. Cunneen
/s/ Colin J. Kreidewolf Treasurer (Principal Financial and
- ------------------------ Accounting Officer)
Colin J. Kreidewolf
/s/ Sir Victor Garland Director, President
- ------------------------ (Principal Executive Officer)
Sir Victor Garland
* Director
- ------------------------
Elliot L. Atamian
* Director
- ------------------------
James M. Oates
* Director
- ------------------------
Frank R. Terzolo
/s/ Alice L. Schulman
- ------------------------
Alice L. Schulman
(Attorney-in-Fact under powers
of attorney filed herewith)
C-4
<PAGE>
Registration No. 333-____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[_] Pre-Effective Amendment No. __ [_] Post-Effective Amendment No. __
---------------------------
THE GOVETT FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
---------------------------
EXHIBITS
---------------------------
================================================================================
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequential
Exhibit Page
Number Number
<C> <S> <C>
(11) Opinion and Consent of Goodwin, Procter & Hoar LLP with
respect to the legality of the shares being issued
(14) Consent and Report of the Independent Accountants
(17) (a) (1) Form of Proxy Card of Govett Asia Fund
(2) Form of Proxy Card of Govett Latin America
Fund
</TABLE>
<PAGE>
ex-99.B11
GOODWIN, PROCTER & HOAR LLP
COUNSELLORS AT LAW
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
TELEPHONE (617) 570-1000
TELECOPIER (617) 523-1231
September 11, 1998
The Govett Funds, Inc.
250 Montgomery Street
Suite 1200
San Francisco, California 94104
Ladies and Gentlemen:
As counsel to The Govett Funds, Inc., a corporation organized under the
laws of the State of Maryland (the "Company"), we have been asked to render our
opinion in connection with the proposed issuance by the Company of Class A
shares of Common Stock, $0.00001 par value per share (the "Shares"), of Govett
Emerging Markets Equity Fund, a series of the Company which has been established
and designated pursuant to Article V of the Company's Articles of Amendment and
Restatement, as amended, all as more fully described in the Prospectus and
Statement of Additional Information contained in the Company's Registration
Statement on Form N-14 (the "Registration Statement") to be filed by the Company
with the Securities and Exchange Commission under the Securities Act of 1933.
We wish to advise you that we have examined such documents and questions of
law as we have deemed necessary for purposes of this opinion.
We do not hold ourselves out as being experts in, and do not express any
opinion herein under or with regard to, the laws of any other jurisdiction other
than the laws of The Commonwealth of Massachusetts and the Federal laws of the
United States of America, subject to the following sentence. In rendering the
opinions below with respect to matters of Maryland law, we have relied, with
your permission and without independent investigation or review, on the opinion
of Piper & Marbury L.L.P. of even date. A copy of that opinion is attached
hereto.
Based upon the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of Maryland; and
2. The Shares have been duly authorized for issuance and, when sold in
accordance with the terms of the Prospectus and Statement of Additional
Information in effect at the time of the sale, will be validly issued, fully
paid and non-assessable.
We consent to a copy of this opinion being filed as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
GOODWIN, PROCTER & HOAR LLP
Enclosure
<PAGE>
Ex-99.B11
PIPER & MARBURY
L.L.P.
CHARLES CENTER SOUTH
36 SOUTH CHARLES STREET WASHINGTON
BALTIMORE, MARYLAND 21201-3018 NEW YORK
410-530-2530 PHILADELPHIA
410-530-0480 EASTON
September 11, 1998
The Govett Funds, Inc.
250 Montgomery Street
Suite 1200
San Francisco, CA 94104
Re: Registration Statement on Form N-14
-----------------------------------
Ladies and Gentlemen:
We have acted as Maryland counsel to The Govett Funds, Inc., a Maryland
corporation (the "Company"), in connection with the proposed issuance by the
Company of Class A shares of Common Stock, $0.00001 par value per share (the
"Shares"), of Govett Emerging Markets Equity Fund, a series of the Company which
has been established and designated pursuant to Article V of the Company's
Articles of Amendment and Restatement, as amended, all as more fully described
in the Prospectus and Statement of Additional Information contained in the
Company's Registration Statement on Form N-14 (the "Registration Statement") to
be filed by the Company with the Securities and Exchange Commission under the
Securities Act of 1933. In this capacity, we have examined the charter and
bylaws of the Company, the Registration Statement, the corporation action taken
by the Company that provides for the authorization and issuance of the Shares, a
certificate of the Secretary of the Company, and such other documents and
matters as we have deemed necessary and appropriate to render the opinions set
forth in this letter. In reaching the opinions set forth below, we have assumed
all documents submitted to us as originals are authentic, all documents
submitted to us as certified or photostatic copies conform to the original
documents, all signatures on all documents submitted to us for examination are
genuine, and all public records reviewed are accurate and complete.
Based upon and subject to the foregoing, and limited in all respects to
applicable Maryland law, we are of the opinion and advise you as follows:
1. The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of Maryland; and
<PAGE>
Ex-99.B11
The Govett Funds, Inc.
September 11, 1998
Page 2
2. The Shares have been duly authorized for issuance and, when sold in
accordance with the terms of the Prospectus and Statement of Additional
Information in effect at the time of the sale, will be validly issued, fully
paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. Goodwin, Procter & Hoar LLP are authorized to rely on
the opinions stated herein in rendering their opinions to you in connection with
the Registration Statement.
Very truly yours,
/s/ Piper & Marbury L.L.P.
<PAGE>
Ex-99.14
Consent of Independent Accountants
We consent to the incorporation by reference in the Registration Statement on
Form N-14 (the "Registration Statement") of our report dated February 20, 1998,
relating to the financial statements and financial highlights for the year ended
December 31, 1997 appearing in the December 31, 1997 Annual Report to
Shareholders of the Govett Funds, Inc. which are also incorporated by reference
into the Registration Statement, and to the inclusion in this Registration
Statement of our report dated February 21, 1997, relating to the statement of
changes in net assets for the year ended December 31, 1996 and the financial
highlights for each of the four years in the period ended December 31, 1996 of
the Govett Funds, Inc. We also consent to the reference to our firm under the
caption "Experts."
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
September 10, 1998
<PAGE>
Ex-99.14
Report of Independent Accountants
To the Board of Directors and Shareholders
Of The Govett Funds, Inc.
In our opinion, the statement of changes in net assets for the year ended
December 31, 1996 and the financial highlights for each of the four years ended
December 31, 1996 (appearing on pages 32 through 37 of The Govett Funds, Inc.
(the "Company") 1997 Annual Report which have been incorporated by reference in
the Company's registration statement on Form N-14) present fairly, in all
material respects, the changes in their net assets and the financial highlights
of Govett International Equity Fund, Govett Emerging Markets Fund, Govett
Smaller Companies Fund, Govett Pacific Strategy Fund, Govett Latin America Fund,
and Govett Global Income Fund (constituting The Govett funds, Inc., hereafter
referred to as the "Funds") for each of the periods referred to above, in
conformity with generally accepted accounting principles. 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. We
conducted our audits of these financial statements in accordance with general
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 principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1996 by
correspondence with the custodians and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above. We have
not audited the financial statements of the Funds for any period subsequent to
December 31, 1996.
/s/ PricewaterhouseCoopers LLP
PriceWaterhouse LLP
Boston, Massachusetts
February 21, 1997
2
<PAGE>
EX-99.B17(a)(1)
Form of proxy card
PROXY (This Is Your Ballot Form - Please Complete, Sign and Return) PROXY
GOVETT ASIA FUND
A SERIES OF
THE GOVETT FUNDS, INC.
250 MONTGOMERY STREET, SUITE 1200, SAN FRANCISCO, CALIFORNIA 94104
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS:
We prefer that you mark appropriate boxes in dark ink with an "X".
The undersigned hereby appoints Colin J. Kreidewolf and Alice L. Schulman, and
each of them, as Proxies, each with the power to appoint his or her substitute,
and authorizes them to represent and to vote as designated on this form all
shares owned directly or beneficially of Govett Asia Fund held of record by the
undersigned on October 5, 1998 at the special meeting of shareholders of the
Fund to be held on December 15, 1998, or at any adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO CONTRARY DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE PROPOSAL.
Proposal, by the shareholders of record of Govett Asia Fund, to consider and act
upon an Plan of Reorganization providing for the transfer of the assets of
Govett Asia Fund (subject to certain liabilities) to Govett Emerging Markets
Equity Fund in exchange for Class A Retail shares of Govett Emerging Markets
Equity Fund, the distribution of such shares to shareholders of Govett Asia Fund
and the subsequent liquidation of Govett Asia Fund;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLEASE TURN OVER AND COMPLETE
<PAGE>
Please sign exactly as your name appears on the mailing. When shares are held
by joint tenants, both should sign. When signing as an attorney or as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by an authorized
person.
______________________, 1998
___________________________
Signature
___________________________
Signature if held jointly
PLEASE REMEMBER TO SIGN, DATE AND RETURN THE PROXY, USING THE ENCLOSED ENVELOPE.
Note: It has been a custom for many shareholders to include a note with the
return of the proxy statement commenting on our investments or any other matter
relevant to the Govett Funds. We read all such notes with great interest.
<PAGE>
EX-99.B17(a)(2)
Form of proxy card
PROXY (This Is Your Ballot Form - Please Complete, Sign and Return) PROXY
GOVETT LATIN AMERICA FUND
A SERIES OF
THE GOVETT FUNDS, INC.
250 MONTGOMERY STREET, SUITE 1200, SAN FRANCISCO, CALIFORNIA 94104
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS:
We prefer that you mark appropriate boxes in dark ink with an "X".
The undersigned hereby appoints Colin J. Kreidewolf and Alice L. Schulman, and
each of them, as Proxies, each with the power to appoint his or her substitute,
and authorizes them to represent and to vote as designated on this form all
shares owned directly or beneficially of Govett Latin America Fund held of
record by the undersigned on October 5, 1998 at the special meeting of
shareholders of the Fund to be held on December 15, 1998, or at any adjournments
thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO CONTRARY DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE PROPOSAL.
Proposal, by the shareholders of record of Govett Latin America Fund, to
consider and act upon an Plan of Reorganization providing for the transfer of
the assets of Govett Latin America Fund (subject to certain liabilities) to
Govett Emerging Markets Equity Fund in exchange for Class A Retail shares of
Govett Emerging Markets Equity Fund, the distribution of such shares to
shareholders of Govett Latin America Fund and the subsequent liquidation of
Govett Latin America Fund;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLEASE TURN OVER AND COMPLETE
<PAGE>
Please sign exactly as your name appears on the mailing. When shares are held
by joint tenants, both should sign. When signing as an attorney or as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by an authorized
person.
______________________, 1998
___________________________
Signature
___________________________
Signature if held jointly
PLEASE REMEMBER TO SIGN, DATE AND RETURN THE PROXY, USING THE ENCLOSED ENVELOPE.
Note: It has been a custom for many shareholders to include a note with the
return of the proxy statement commenting on our investments or any other matter
relevant to the Govett Funds. We read all such notes with great interest.
