<PAGE>
1933 Act Registration No. 33-39906
1940 Act Registration No. 811-6297
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 27, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
----
Post-Effective Amendment No. 11
----
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No.
----
(Check appropriate box or boxes)
FORTIS WORLDWIDE PORTFOLIOS, INC.
(Exact Name of Registrant as Specified in Charter)
500 Bielenberg Drive
Woodbury, Minnesota 55125
(Address of Principal Executive Offices, Zip Code)
(612) 738-4000
(Registrant's Telephone Number, including Area Code)
Scott R. Plummer, Esq.
500 Bielenberg Drive
Woodbury, Minnesota 55125
(Name and Address of Agent for Service)
COPY TO:
Michael J. Radmer, Esq.
Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402-1498
It is proposed that this filing will become effective (check appropriate box):
immediately upon filing pursuant to paragraph (b) of Rule 485
-----
X on March 1, 1998 pursuant to paragraph (b) of Rule 485
-----
75 days after filing pursuant to paragraph (a) of Rule 485
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on (specify date) pursuant to paragraph (a) of Rule 485
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60 days after filing pursuant to paragraph (a) of Rule 485
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<PAGE>
FORTIS WORLDWIDE PORTFOLIOS, INC.
Registration Statement on Form N-1A
----------------------------
Cross Reference Sheet
Pursuant to Rule 481(a)
-----------------------
Item No. Prospectus Heading
- -------- ------------------
1. Cover Page. . . . . . . . . . . . . . Cover Page (no caption)
2. Synopsis. . . . . . . . . . . . . . . (not included)
3. Financial Highlights. . . . . . . . . Financial Highlights
4. General Description of Registrant . . Summary of Investment Objectives;
Organization and Classification;
Investment Objectives and Policies;
Risk Considerations
5. Management of the Fund. . . . . . . . Management
6. Capital Stock and Other Securities. . Capital Stock; Dividends and
Capital Gain Distributions;
Valuation of Securities; Taxation;
Shareholder Inquiries
7. Purchase of Securities Being Offered. How to Buy Portfolio Shares;
Valuation of Securities; Redemption
8. Redemption or Repurchase. . . . . . . Redemption
9. Pending Legal Proceedings . . . . . . Not Applicable
Heading Statement of Additional Information
- ------- -----------------------------------
10. Cover Page. . . . . . . . . . . . . . Cover Page (no caption)
11. Table of Contents . . . . . . . . . . Table of Contents
12. General Information and History . . . Organization and Classification
13. Investment Objectives and Policies. . Investment Objectives and Policies
14. Management of the Fund. . . . . . . . Directors and Executive Officers
15. Control Persons and Principal
Holders of Securities . . . . . . . . Capital Stock
16. Investment Advisory and Other
Services. . . . . . . . . . . . . . . Investment Advisory and Other
Services
17. Brokerage Allocation and Other
Practices . . . . . . . . . . . . . . Portfolio Transactions and
Allocation of Brokerage
18. Capital Stock and Other Securities. . Capital Stock
19. Purchase, Redemption and Pricing
of Securities Being Offered . . . . . Computation of Net Asset Value and
Pricing; Redemption; Special
Purchase Plans
20. Tax Status. . . . . . . . . . . . . . Taxation
21. Underwriters. . . . . . . . . . . . . Investment Advisory and Other
Services
22. Calculations of Performance Data. . . Performance
23. Financial Statements. . . . . . . . . Financial Statements
<PAGE>
MAILING ADDRESS:
P.O. Box 64284
St. Paul
Minnesota 55164
STREET ADDRESS:
500 Bielenberg Drive
Woodbury
Minnesota 55125
Telephone: (612) 738-4000
Toll Free: (800) 800-2638, Ext. 3012
FORTIS WORLDWIDE
PORTFOLIOS
PROSPECTUS
- -----------------------------------------------------------
DATED MARCH 1, 1998
- -----------------------------------------------------------
Global Growth Portfolio
- -----------------------------------------------------------
International Equity Portfolio
- -----------------------------------------------------------
THIS PROSPECTUS CONCISELY SETS FORTH THE INFORMATION A PROSPECTIVE INVESTOR
SHOULD KNOW ABOUT THE PORTFOLIOS BEFORE INVESTING. INVESTORS SHOULD RETAIN THIS
PROSPECTUS FOR FUTURE REFERENCE. THE PORTFOLIOS HAVE FILED A STATEMENT OF
ADDITIONAL INFORMATION (ALSO DATED MARCH 1, 1998) WITH THE SECURITIES AND
EXCHANGE COMMISSION (THE "COMMISSION"). THE STATEMENT OF ADDITIONAL INFORMATION
IS AVAILABLE FREE OF CHARGE FROM FORTIS INVESTORS, INC. ("INVESTORS") AT THE
ABOVE MAILING ADDRESS OF THE PORTFOLIOS, AND IS INCORPORATED BY REFERENCE INTO
THIS PROSPECTUS IN ACCORDANCE WITH THE COMMISSION'S RULES. THE COMMISSION
MAINTAINS A WORLD WIDE WEB SITE THAT CONTAINS REPORTS AND INFORMATION REGARDING
ISSUERS THAT FILE ELECTRONICALLY WITH THE COMMISSION. THE ADDRESS OF SUCH SITE
IS "HTTP://WWW.SEC.GOV."
SHARES IN THE PORTFOLIOS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK; ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY; AND
INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. SEE
"INVESTMENT OBJECTIVES AND POLICIES; RISK CONSIDERATIONS."
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.
FORTIS-REGISTERED TRADEMARK-
AND FORTIS-REGISTERED TRADEMARK- ARE FORTIS
REGISTERED SERVICEMARKS OF FORTIS SOLID ANSWERS FOR A CHANGING
AMEV AND FORTIS AG. WORLD-REGISTERED TRADEMARK-
<PAGE>
RISK FACTORS
Investments in stock funds expose investors to potential declines in the price
of the stocks contained in the funds' portfolios, which may result in a decline
in the price of the shares of such funds. In addition, the Portfolios'
significant foreign investment activities present certain additional risks. The
price of each Portfolio's shares will fluctuate and there is no assurance that
investors will be able to redeem their Portfolio shares for a price equal to or
greater than their original cost.
For more information on the risks associated with investing in the Portfolios,
see "Investment Objectives and Policies; Risk Considerations."
SUMMARY OF INVESTMENT OBJECTIVES
Fortis Global Growth Portfolio ("Global Portfolio") and Fortis International
Equity Portfolio ("International Portfolio") (sometimes referred to individually
as a "Portfolio" and collectively as the "Portfolios") are non-diversified
series of Fortis Worldwide Portfolios, Inc. ("Fortis Worldwide"). Each
Portfolio's primary investment objective is long-term capital appreciation and
current income is an incidental objective. Global Portfolio seeks its objectives
primarily by investing in a global portfolio of equity securities, allocated
among the markets of the U.S and other, possibly diverse, countries and regions
of the world. International Portfolio seeks its objectives by investing
primarily in equity securities of non-U.S. companies.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Risk Factors.............................................................. 2
Summary of Investment Objectives.......................................... 2
Class Shares.............................................................. 2
Summary of Portfolio Expenses............................................. 3
Financial Highlights...................................................... 4
Organization and Classification........................................... 5
Investment Objectives and Policies; Risk Considerations................... 5
- Global Growth Portfolio............................................. 5
- International Equity Portfolio...................................... 6
- Investment Policies and Restrictions Applicable to Both
Portfolios........................................................ 7
- Risk Considerations................................................. 10
Management................................................................ 12
- Board of Directors.................................................. 12
- The Investment Adviser/Transfer Agent/ Dividend Agent............... 12
- Portfolio Management................................................ 12
- Brokerage Allocation................................................ 13
The Underwriter and Distribution Expenses................................. 13
Valuation of Securities................................................... 13
Capital Stock............................................................. 14
Dividends and Capital Gains Distributions................................. 14
Taxation.................................................................. 14
How to Buy Portfolio Shares............................................... 15
- General Purchase Information........................................ 15
- Alternative Purchase Arrangements................................... 16
- Class A Shares--Initial Sales Charge Alternative.................... 16
- Class B and H Shares--Contingent Deferred Sales Charge
Alternatives...................................................... 17
- Class C Shares--Level Sales Charge Alternative...................... 18
Redemption................................................................ 19
- Contingent Deferred Sales Charge.................................... 20
Shareholder Inquiries..................................................... 21
Account Application....................................................... 22
Automated Clearing House (ACH) Agreement.................................. 25
</TABLE>
No broker-dealer, sales representative, or other person has been authorized to
give any information or to make any representations other than those contained
in this Prospectus, and if given or made, such information or representations
must not be relied upon as having been authorized by the Portfolios or
Investors. This Prospectus does not constitute an offer or solicitation by
anyone in any state in which such offer or solicitation is not authorized, or in
which the person making such offer or solicitation is not qualified to do so, or
to any person to whom it is unlawful to make such offer or solicitation.
CLASS SHARES
Each Portfolio offers investors the choice of four classes of shares with
different sales charges and expenses. These alternatives permit choosing the
most beneficial method of purchasing shares given the amount of the purchase,
the length of time the investor expects to hold the shares, and other
circumstances.
CLASS A SHARES. Generally, an investor who purchases Class A shares pays a sales
charge at the time of purchase. As a result, Class A shares are not subject to
any charges when they are redeemed (except for sales at net asset value in
excess of $1 million which may be subject to a contingent deferred sales
charge). The initial sales charge may be reduced or waived for certain
purchases. Class A shares are subject to an annual Rule 12b-1 fee of .25% of
average daily net assets attributable to Class A shares. This fee is lower than
the other classes and therefore Class A shares have lower expenses and pay
higher dividends. See "How to Buy Portfolio Shares--Class A Shares--Initial
Sales Charge Alternative."
CLASS B AND H SHARES. The only difference between Class B and H shares is the
percentage of dealer concession paid to dealers. This difference does not in any
way affect the charges on an investor's shares. Class B and H shares both are
sold without an initial sales charge, but are subject to a contingent deferred
sales charge of 4% if redeemed within two years of purchase, with declining
charges for redemptions thereafter up to six years after purchase. Class B and H
shares are also subject to a higher annual Rule 12b-1 fee than Class A shares --
1.00% of the Portfolio's average daily net assets attributable to Class B or H
shares, as applicable. However, after eight years, Class B and H shares
automatically will be converted to Class A shares at no charge to the investor,
resulting in a lower Rule 12b-1 fee thereafter. Class B and H shares provide the
benefit of putting all dollars to work from the time of investment, but will
have a higher expense ratio and pay lower dividends than Class A shares due to
the higher Rule 12b-1 fee and any other class specific expenses. See "How to Buy
Portfolio Shares--Class B and H Shares--Contingent Deferred Sales Charge
Alternatives."
CLASS C SHARES. Class C shares: 1) are sold without an initial sales charge, but
are subject to a contingent deferred sales charge; 2) are subject to an annual
Rule 12b-1 fee of 1.00% of the Portfolio's average daily net assets attributable
to Class C shares; and 3) provide the benefit of putting all dollars to work
from the time of investment, but will have a higher expense ratio and pay lower
dividends than Class A shares due to the higher Rule 12b-1 fee and any other
class specific expenses. While Class C shares do not convert to Class A shares,
they are subject to a lower contingent deferred sales charge (1%) than
2
<PAGE>
Class B or H shares and need to be held for only one year to avoid paying the
contingent deferred sales charge. See "How to Buy Portfolio Shares--Class C
Shares--Level Sales Charge Alternative."
IN SELECTING WHICH CLASS OF SHARES TO PURCHASE, YOU SHOULD CONSIDER, AMONG OTHER
THINGS, (1) the length of time you expect to hold your investment, (2) the
amount of any applicable sales charge (whether imposed at the time of purchase
or redemption) and Rule 12b-1 fees, as noted above, (3) whether you qualify for
any reduction or waiver of any applicable sales charge (e.g., if you are exempt
from the sales charge, you must invest in Class A shares), (4) the various
exchange privileges among the different classes of shares and (5) the fact that
Class B and H shares automatically convert to Class A shares eight years after
purchase.
SUMMARY OF PORTFOLIO EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
MAXIMUM SALES CHARGE IMPOSED ON
PURCHASES GLOBAL INTERNATIONAL
(AS A PERCENTAGE OF OFFERING PRICE) PORTFOLIO PORTFOLIO
- ---------------------------------------- ------------- ---------------
<S> <C> <C>
Class A Shares.......................... 4.75%* 4.75%*
Class B and H Shares.................... 0.00%** 0.00%**
Class C Shares.......................... 0.00%** 0.00%**
</TABLE>
<TABLE>
<CAPTION>
MAXIMUM DEFERRED SALES CHARGE
(AS A PERCENTAGE OF ORIGINAL PURCHASE
PRICE GLOBAL INTERNATIONAL
OR REDEMPTION PROCEEDS, AS APPLICABLE) PORTFOLIO PORTFOLIO
- ---------------------------------------- ------------ ----------------
<S> <C> <C>
Class A Shares.......................... *** ***
Class B and H Shares.................... 4.00% 4.00%
Class C Shares.......................... 1.00% 1.00%
</TABLE>
*SINCE THE PORTFOLIOS ALSO PAY AN ASSET BASED SALES CHARGE, LONG-TERM
SHAREHOLDERS MAY PAY MORE THAN THE ECONOMIC EQUIVALENT OF THE MAXIMUM
FRONT-END SALES CHARGE PERMITTED BY NASD RULES.
**CLASS B, H AND C SHARES ARE SOLD WITHOUT A FRONT END SALES CHARGE, BUT THEIR
CONTINGENT DEFERRED SALES CHARGE AND RULE 12B-1 FEES MAY CAUSE LONG-TERM
SHAREHOLDERS TO PAY MORE THAN THE ECONOMIC EQUIVALENT OF THE MAXIMUM
PERMITTED FRONT END SALES CHARGES.
***A CONTINGENT DEFERRED SALES CHARGE OF 1.00% IS IMPOSED ON CERTAIN REDEMPTIONS
OF CLASS A SHARES THAT WERE PURCHASED WITHOUT AN INITIAL SALES CHARGE AS PART
OF AN INVESTMENT OF $1 MILLION OR MORE. SEE "HOW TO BUY PORTFOLIO
SHARES--CLASS A SHARES--INITIAL SALES CHARGE ALTERNATIVE."
ANNUAL PORTFOLIO OPERATING EXPENSES (as a % of average net assets)
<TABLE>
<CAPTION>
GLOBAL PORTFOLIO
----------------------------------------
CLASS A CLASS B AND CLASS C
SHARES H SHARES SHARES
------------ ------------ ------------
<S> <C> <C> <C>
Management Fees......................... 1.00% 1.00% 1.00%
12b-1 Fees.............................. .25% 1.00% 1.00%
Other Expenses.......................... .19% .19% .19%
--- --- ---
TOTAL PORTFOLIO OPERATING EXPENSES.... 1.44% 2.19% 2.19%
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL PORTFOLIO
----------------------------------------
CLASS A CLASS B AND CLASS C
SHARES H SHARES SHARES
------------ ------------ ------------
<S> <C> <C> <C>
Management Fees (after voluntary fee
waivers and reimbursements) (1)........ .60% .60% .60%
12b-1 Fees.............................. .25% 1.00% 1.00%
Other Expenses.......................... .85% .85% .85%
--- --- ---
TOTAL PORTFOLIO OPERATING EXPENSES
(AFTER VOLUNTARY FEE WAIVERS AND
REIMBURSEMENTS) (1).................. 1.70% 2.45% 2.45%
</TABLE>
(1) FORTIS ADVISERS, INC. ("ADVISERS") HAS AGREED, ON A VOLUNTARY BASIS, TO
REIMBURSE THE PORTFOLIO A PORTION OF ITS ADVISORY FEE UNTIL THE EARLIER OF
THE END OF THE FISCAL YEAR ENDED OCTOBER 31, 1998 OR THE DATE THE
PORTFOLIO'S NET ASSETS EQUAL OR EXCEED $20,000,000 IF TOTAL PORTFOLIO
OPERATING EXPENSES EXCEED 1.70% FOR CLASS A SHARES, AND 2.45% FOR CLASS B,
C AND H SHARES. ABSENT THE REIMBURSEMENT REFERRED TO ABOVE, MANAGEMENT
FEES AS AN ANNUALIZED PERCENTAGE OF AVERAGE NET ASSETS WOULD BE 1.00% FOR
THE PORTFOLIO; AND THE TOTAL PORTFOLIO OPERATING EXPENSES CALCULATED ON
SUCH BASIS WOULD BE 2.10% FOR CLASS A SHARES, AND 2.85% FOR CLASS B, C AND
H SHARES.
EXAMPLE
You would pay the following expenses on a $1,000 investment over various time
periods assuming: (1) 5% annual return; and (2) redemption at the end of each
time period. This example assumes conversion of Class B and H shares to Class A
shares after eight years and a waiver of deferred sales charges on Class B and H
shares of 10% of the amount invested. See "Redemption--Contingent Deferred Sales
Charge--Class B, H and C Shares."
<TABLE>
<CAPTION>
GLOBAL PORTFOLIO
-------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A Shares.......................... $ 61 $ 91 $ 122 $ 212
Class B and H Shares.................... $ 58 $ 96 $ 135 $ 233
Class C Shares.......................... $ 32 $ 69 $ 117 $ 252
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL PORTFOLIO (2)
-------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A Shares.......................... $ 64 $ 99 $ 135 $ 239
Class B and H Shares.................... $ 61 $ 103 $ 149 $ 260
Class C Shares.......................... $ 35 $ 76 $ 131 $ 279
</TABLE>
(2) AS REFERRED TO IN (1) ABOVE, ADVISERS INTENDS TO REIMBURSE THE PORTFOLIO A
PORTION OF ITS ADVISORY FEES ON A VOLUNTARY BASIS, AND THE AMOUNTS SHOWN
REFLECT THIS REIMBURSEMENT AS OF THE DATE OF THIS PROSPECTUS. ABSENT THIS
REIMBURSEMENT, THE DOLLAR AMOUNTS FOR THE 1, 3, 5 AND 10 YEAR PERIODS
WOULD BE AS FOLLOWS: CLASS A SHARES, $68, $110, $155 AND $279; CLASS B AND
H SHARES, $65, $115, $168 AND $300; AND CLASS C SHARES, $39, $88, $150 AND
$318.
Assuming no redemption, the Class B, H and C expenses on the same investment
would be as follows:
<TABLE>
<CAPTION>
GLOBAL PORTFOLIO
-------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class B and H Shares.................... $ 22 $ 69 $ 117 $ 233
Class C Shares.......................... $ 22 $ 69 $ 117 $ 252
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL PORTFOLIO (3)
-------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class B and H Shares.................... $ 25 $ 76 $ 131 $ 260
Class C Shares.......................... $ 25 $ 76 $ 131 $ 279
</TABLE>
(3) ABSENT THE FEE REIMBURSEMENT REFERRED TO IN (1) ABOVE, THE DOLLAR AMOUNTS
FOR THE 1, 3, 5 AND 10 YEAR PERIODS WOULD BE AS FOLLOWS: CLASS B AND H
SHARES, $29, $88, $150 AND $300; AND CLASS C SHARES, $29, $88, $150 AND
$318.
THE PURPOSE OF THE ABOVE TABLE IS TO ASSIST THE INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT AN INVESTOR IN THE PORTFOLIOS WILL BEAR, WHETHER
DIRECTLY OR INDIRECTLY. THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE SHOWN. FOR A MORE COMPLETE DESCRIPTION OF THE VARIOUS
COSTS AND EXPENSES, SEE "MANAGEMENT" AND "HOW TO BUY PORTFOLIO SHARES." THE
INFORMATION SET FORTH IN THE TABLE FOR GLOBAL PORTFOLIO REFLECTS ACTUAL EXPENSES
INCURRED DURING FISCAL 1997. FOR INTERNATIONAL PORTFOLIO, THE ITEM, OTHER
EXPENSES, HAS BEEN ESTIMATED.
3
<PAGE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
The following audited financial highlights for Global Portfolio should be read
in conjunction with the financial statements of the Portfolio and the
independent auditors' report of KPMG Peat Marwick LLP found in the Portfolio's
1997 Annual Report to Shareholders, which may be obtained without charge.
Information is not presented for International Portfolio, which did not commence
operations until the date of this Prospectus.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD JULY
CLASS A 8, 1991***
YEAR ENDED OCTOBER 31, (COMMENCEMENT OF
----------------------------------------------------------------- OPERATIONS) THROUGH
1997 1996 1995 1994 1993 1992 OCTOBER 31, 1991
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period............................ $ 21.28 $ 18.24 $ 14.78 $ 14.42 $ 11.52 $ 10.87 $ 10.05
- -----------------------------------------------------------------------------------------------------------------------------
Operations:
Investment loss - net............ (.07) (.06) (.09) (.04) (.12) -- --
Net realized and unrealized gains
on investments.................. 2.71 3.10 3.55 .40 3.02 .68 .82
- -----------------------------------------------------------------------------------------------------------------------------
Total from operations.............. 2.64 3.04 3.46 .36 2.90 .68 .82
- -----------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net..... -- -- -- -- -- (.02) --
From net realized gains.......... -- -- -- -- -- (.01) --
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions to
shareholders...................... -- -- -- -- -- (.03) --
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period..... $ 23.92 $ 21.28 $ 18.24 $ 14.78 $ 14.42 $ 11.52 $ 10.87
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Total return@...................... 12.41% 16.67% 23.41% 2.50% 25.17% 6.24% 8.16%
- -----------------------------------------------------------------------------------------------------------------------------
Net assets at end of period (000s
omitted).......................... $125,268 $107,607 $68,302 $55,214 $28,226 $10,727 $ 6,249
Ratio of expenses to average daily
net assets........................ 1.44% 1.51% 1.73% 1.72% 2.19% 2.25% 2.25%*
Ratio of net investment income
(loss) to average daily net
assets............................ (.29%) (.33%) (.55%) (.35%) (1.01%) (.04%) .30%*
Portfolio turnover rate............ 30% 18% 27% 21% 37% 31% 8%
Average commission rate paid**..... $ .0246 $ .0272 -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------------------------------------------
CLASS B CLASS C CLASS H
------------------------------ ------------------------------ --------------------------------
1997 1996 1995+ 1997 1996 1995+ 1997 1996 1995+
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period....................... $ 20.98 $ 18.12 $ 14.60 $ 21.00 $ 18.13 $ 14.60 $ 20.99 $ 18.12 $ 14.60
- ---------------------------------------------------------------------------------------------------------------------------------
Operations:
Investment loss - net....... (.27) (.24) (.09) (.28) (.23) (.09) (.28) (.23) (.09)
Net realized and unrealized
gains on investments....... 2.71 3.10 3.61 2.71 3.10 3.62 2.71 3.10 3.61
- ---------------------------------------------------------------------------------------------------------------------------------
Total from operations......... 2.44 2.86 3.52 2.43 2.87 3.53 2.43 2.87 3.52
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to
shareholders................. -- -- -- -- -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period....................... $ 23.42 $ 20.98 $ 18.12 $ 23.43 $ 21.00 $ 18.13 $ 23.42 $ 20.99 $ 18.12
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Total return@................. 11.63% 15.78% 24.11% 11.57% 15.83% 24.18% 11.58% 15.84% 24.11%
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period
(000s omitted)............... $11,446 $ 5,735 $ 991 $ 4,664 $ 3,087 $ 434 $18,690 $10,765 $ 2,141
Ratio of expenses to average
daily net assets............. 2.19% 2.26% 2.48%* 2.19% 2.26% 2.48%* 2.19% 2.26% 2.48%*
Ratio of net investment loss
to average daily net
assets....................... (1.03%) (.99%) (1.42%)* (1.04%) (.99%) (1.55%)* (1.04%) (1.02%) (1.46%)*
Portfolio turnover rate....... 30% 18% 27% 30% 18% 27% 30% 18% 27%
Average commission rate
paid**....................... $ .0246 $ .0272 -- $ .0246 $ .0272 -- $ .0246 $ .0272 --
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* ANNUALIZED.
** IN ACCORDANCE WITH RULES ADOPTED BY THE SECURITIES AND EXCHANGE COMMISSION,
DISCLOSURE OF AVERAGE COMMISION RATE PAID IS REQUIRED BEGINNING WITH FISCAL
YEAR 1996. THE AMOUNT REPRESENTS TOTAL BROKERAGE COMMISSION PAID ON
APPLICABLE PURCHASES AND SALES OF SECURITIES FOR THE PERIOD DIVIDED BY THE
TOTAL NUMBER OF RELATED SHARES PURCHASED AND SOLD. THE COMPARABILITY OF THIS
INFORMATION MAY BE AFFECTED BY THE FACT THAT COMMISSION RATES PER SHARE VARY
SIGNIFICANTLY AMONG FOREIGN COUNTRIES.
*** GLOBAL PORTFOLIO'S INCEPTION WAS MARCH 25, 1991, WHEN IT WAS INITIALLY
CAPITALIZED. HOWEVER, GLOBAL PORTFOLIO'S SHARES DID NOT BECOME EFFECTIVELY
REGISTERED UNDER THE SECURITIES ACT OF 1933 UNTIL JULY 8, 1991.
SUPPLEMENTARY INFORMATION IS NOT PRESENTED FOR THE PERIOD FROM MARCH 25,
1991 THROUGH JULY 7, 1991 AS GLOBAL PORTFOLIO'S SHARES WERE NOT REGISTERED
DURING THAT PERIOD.
@ THESE ARE GLOBAL PORTFOLIO'S TOTAL RETURNS DURING THE PERIOD, INCLUDING
REINVESTMENT OF ALL DIVIDEND AND CAPITAL GAINS DISTRIBUTIONS WITHOUT
ADJUSTMENTS FOR SALES CHARGE.
+ FOR THE PERIOD FROM NOVEMBER 14, 1994 (COMMENCEMENT OF OPERATIONS) THROUGH
OCTOBER 31, 1995.
4
<PAGE>
Each Portfolio may advertise its "cumulative total return," "average annual
total return," and may compare such figures to recognized indices. Performance
figures are calculated separately for each class of shares, and figures for each
class will be presented. The Portfolios may advertise their relative performance
as compiled by outside organizations such as Lipper Analytical or
CDA/Wiesenberger, or refer to publications which have mentioned a Portfolio,
Fortis Advisers, or their personnel, and also may advertise other performance
items as set forth in the Statement of Additional Information. The performance
discussion required by the Securities and Exchange Commission is found in the
Portfolios' Annual Report to Shareholders and will be made available without
charge upon request.
ORGANIZATION AND CLASSIFICATION
The Portfolios are nondiversified series of Fortis Worldwide, which was
incorporated under Minnesota law in 1991. Although each Portfolio is classified
as a nondiversified fund under the Investment Company Act of 1940 (the "1940
Act"), the Portfolios are still required to meet certain diversification
requirements in order to qualify as "regulated investment companies" for Federal
income tax purposes under the Internal Revenue Code of 1986, as amended (the
"Code"). To so qualify, a Portfolio must diversify its holdings so that, at the
close of each quarter of its taxable year, (a) at least 50% of the value of its
total assets is represented by cash, cash items, securities issued by the U.S.
Government, its agencies and instrumentalities, the securities of other
regulated investment companies, and other securities limited generally with
respect to any one issuer to an amount not more than 5% of the total assets of
the Portfolio and not more than 10% of the outstanding voting securities of such
issuer, and (b) not more than 25% of the value of its total assets is invested
in the securities of any issuer (other than securities issued by the U.S.
Government, its agencies or instrumentalities, or the securities of other
regulated investment companies), or in two or more issuers that the Portfolio
controls and that are engaged in the same or similar trades or businesses.
INVESTMENT OBJECTIVES AND POLICIES; RISK CONSIDERATIONS
Global Portfolio and International Portfolio each has a primary investment
objective of long-term capital appreciation and an incidental objective of
current income. The Portfolios pursue these objectives through different
investment policies and strategies, as described below. The Portfolios are
designed for investors who wish to accept the risks of foreign investments,
which are different from those associated with a portfolio consisting entirely
of U.S. securities. There is no assurance that a Portfolio's investment
objectives will be achieved. The investment objectives of the Portfolios may be
changed without the approval of shareholders. While no such change is
contemplated, such a change could result in a Portfolio's objectives differing
from those deemed appropriate by an investor at the time of investment.
GLOBAL GROWTH PORTFOLIO
Global Portfolio seeks its objectives by investing primarily in a portfolio of
global equity securities, allocated among the markets of the U.S. and other,
possibly diverse, countries and regions of the world. The Portfolio is not
required to maintain any particular geographic or currency mix of its
investments, nor is it required to maintain any particular proportion of stocks,
bonds or other securities in its portfolio. In view of its investment
objectives, however, Global Portfolio currently expects to invest its assets
primarily in equity securities of U.S. and non-U.S. issuers. Under normal market
conditions, the Portfolio invests approximately 55% to 65% (exclusive of
collateral in connection with securities lending) of its total assets in equity
securities established growth companies which have achieved a record of
operating earnings over the past five-year period. Such companies would usually
be located in the United States, Canada, the United Kingdom, other Western
European nations, Japan, and Australia. These companies will also have paid or
have the ability to pay a dividend. Established growth companies typically have
less sensitivity to general economic trends, tend to generate above-average
returns on invested capital, and have leadership positions in their respective
industries. When selecting securities of non-U.S. issuers, Advisers considers
additional factors related to the country of the non-U.S. issuer, including
foreign currency exchange, the political stability of the country of such
non-U.S. issuer, foreign regulations and settlement practices.
In addition, Global Portfolio may invest up to 35% to 45% of its total assets in
equity securities of U.S. and non-U.S. emerging growth companies and in emerging
markets. Emerging growth companies are smaller-capitalization companies that
Advisers believes have a potential for earnings growth over time that is above
the growth rate of more established companies or are early in their life cycles
and have the potential to become major enterprises. Global Portfolio has no
minimum size requirements for the emerging growth companies in which it will
invest. Emerging markets tend to be in the less economically developed regions
of the world. Investments in smaller-capitalization companies and in emerging
markets involve certain additional risks. See "-- Risk Considerations--Smaller-
Capitalization Companies" and "--Emerging Markets." The Portfolio may invest in
any kind of equity security including common stocks, preferred stocks,
convertible securities and warrants.
The Portfolio may invest substantially or primarily in investment grade debt
securities of U.S. and non-U.S. issuers when the total return available from
investments in such securities may equal or exceed the total return available
from investments in equity securities. Investment grade debt includes those
securities rated within one of the four highest ratings categories of Moody's
Investors Service, Inc. ("Moody's") (Aaa, Aa, A and Baa) or of Standard & Poor's
Ratings Services ("S&P") (AAA, AA, A and BBB), or comparably rated by another
nationally recognized rating agency, or, if unrated,
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determined to be of comparable quality by Advisers. When, in the judgement of
Advisers, business or financial conditions warrant, the Portfolio may assume a
temporary defensive position and may invest up to 100% of its assets in debt or
equity securities of U.S. and non-U.S. issuers or in high quality money market
instruments or hold its assets in cash.
The Portfolio expects that a large portion of the debt investments held by the
Portfolio will be government or corporate bonds rated (at the time of the
Portfolio's investment) within one of the two highest ratings categories of
Moody's (Aaa and Aa) or of S&P (AAA and AA), or comparably rated by another
nationally recognized rating agency, or, if unrated, determined by Advisers to
be of comparable quality. Securities rated Baa or BBB have speculative
characteristics, and changes in economic conditions or other circumstances are
more likely to lead to a weakened capacity to make principal and interest
payments than is the case with higher grade securities. The Portfolio may retain
a portfolio security whose rating has changed if the security otherwise meets
the Portfolio's investment objectives and investment criteria, provided that no
more than 5% of the Portfolio's net assets may be invested in a debt security
rated lower than Baa or BBB, or comparably rated by another nationally
recognized rating agency. A description of the Moody's and S&P ratings is
included as an appendix to the Statement of Additional Information.
The Portfolio currently contemplates that it will consider investments in a
number of the major stock markets worldwide, including the United States, and in
several emerging markets. The Portfolio intends to maintain a global portfolio
during most periods of time. The Portfolio normally invests at least 65% of its
total assets (exclusive of collateral in connection with securities lending) in
equity securities traded in at least three countries. Issues of any one country
other than the United States and Japan will represent no more than 25% of the
Portfolio's total assets under normal market conditions. The Portfolio may
purchase securities that are issued by the government or a corporation or
financial institution of one nation but denominated in the currency of another
nation (or a multinational currency unit).
INTERNATIONAL EQUITY PORTFOLIO
International Portfolio seeks its objectives by investing primarily, under
normal circumstances, at least 65% of total assets (exclusive of collateral in
connection with securities lending) in equity securities traded in at least
three foreign (non-U.S.) countries. Equity securities include common stocks,
preferred stocks, convertible securities and warrants.
International Portfolio may make investments in any country or region of the
world, including emerging markets. Investing in emerging markets involves
additional risks. See "--Risk Considerations--Emerging Markets." International
Portfolio may invest up to 25% of its total assets in U.S. based companies with
significant operations outside the U.S.
In managing International Portfolio, Advisers anticipates utilizing top down and
bottom up approaches to security selection. With a top down approach, country
and security selection is influenced by factors such as foreign currency
movements, economic policies, political and sociological issues, foreign
regulations, settlement practices and global investment flows.
With a bottom up approach, investment selection is driven primarily by the
merits of the company itself. Investments may be selected because of their
growth potential or their perceived fundamental value. In seeking companies with
growth potential, Advisers attempts to identify companies whose earnings and
revenue growth potential exceed industry averages. Advisers also seeks companies
which it believes to be well managed with above average returns on equity and
invested capital, healthy balance sheets and the potential to gain market share.
Companies of this nature typically have above average growth potential and a
correspondingly higher than average valuation level as measured by price to
earnings, price to cash flow and price to book value ratios.
In seeking fundamental value, Advisers attempts to identify companies whose
shares appear inexpensive relative to anticipated profit and dividend growth.
Often a stock is "out of favor" and priced low relative to the company's
potential earnings, cash flow and book value.
International Portfolio will not be subject to any restrictions with respect to
the size of the companies in which it will invest. The Portfolio may invest in
small-, medium- and large-capitalization companies. While smaller-capitalization
companies generally have potential for rapid growth, they often involve higher
risks than larger companies because they lack the management experience,
financial resources, product diversification and competitive strengths of larger
companies. See "--Risk Considerations--Smaller Capitalization Companies."
Advisers anticipates investing the majority of assets of International Portfolio
in common stocks of mid-capitalization companies (those with market
capitalizations from $1 billion to $5 billion at the time of purchase), and
large capitalization companies (those with market capitalizations of at least $5
billion at the time of purchase).
Although International Portfolio invests primarily in equity securities, it may
invest up to 35% of its total assets in debt obligations and short-term money
market instruments. See "--Investment Policies and Restrictions Applicable to
Both Portfolios--Investment in Money Market Instruments" and
"--Debt Obligations." International Portfolio may invest up to 25% of its total
assets in debt securities rated below Baa by Moody's, below BBB by S&P, or
comparably rated by another nationally recognized rating agency, or, if unrated,
determined to be of comparable quality by Advisers. Such securities, commonly
know as "high-yield" or "junk" bonds, are subject to
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higher risks and greater market fluctuations than are lower-yielding,
higher-rated securities. See "--Risk Considerations--High-Yield Securities."
When, in the judgment of Advisers, business or financial conditions warrant,
International Portfolio may assume a temporary defensive position and invest
without limit in equity securities of U.S. companies or short-term money market
instruments or hold its assets in cash. See "--Investment Policies and
Restrictions Applicable to Both Portfolios--Short-Term Money Market
Instruments."
INVESTMENT POLICIES AND RESTRICTIONS APPLICABLE TO BOTH PORTFOLIOS
COMMON AND PREFERRED STOCKS. Each Portfolio may invest in common and preferred
stocks. Stocks represent shares of ownership in a company. Generally, preferred
stock has a specified dividend and ranks after bonds and before common stocks in
its claim on income for dividend payments and on assets should the company be
liquidated. After other claims are satisfied, common stockholders participate in
company profits on a pro rata basis; profits may be paid out in dividends or
reinvested in the company to help it grow. Increases and decreases in earnings
are usually reflected in a company's stock price, so common stocks generally
have the greatest appreciation and depreciation potential of all corporate
securities.
DEBT OBLIGATIONS. The debt obligations in which each Portfolio may invest
include a variety of government bonds and corporate debt obligations. Government
bonds which the Portfolios may purchase include debt obligations issued or
guaranteed by the United States or foreign governments (including foreign
states, provinces or municipalities) or their agencies, authorities or
instrumentalities and also may include debt obligations issued by supranational
entities, which entities are organized or supported by several national
governments, such as the World Bank and the Asian Development Bank. Other debt
obligations held by the Portfolios may include corporate bonds of U.S. and
non-U.S. issuers and debt obligations convertible into equity securities or
having attached warrants or rights to purchase equity securities.
CONVERTIBLE SECURITIES. Each Portfolio may invest in debt or preferred stock
convertible into or exchangeable for common stock. Traditionally, convertible
securities have paid dividends or interest at rates higher than common stocks
but lower than non-convertible securities. They generally participate in the
appreciation or depreciation of the underlying stock into which they are
convertible, but to a lesser degree. In recent years, convertibles have been
developed which combine higher or lower current income with options and other
features.
WARRANTS OR RIGHTS. Warrants or rights may be acquired by each Portfolio in
connection with other securities or separately and provide a Portfolio with the
right to purchase at a later date other securities of the issuer.
WHEN-ISSUED OR DELAYED DELIVERY TRANSACTIONS. Each Portfolio may purchase or
sell portfolio securities on a when-issued or delayed delivery basis.
When-issued or delayed delivery transactions arise when securities are purchased
by a Portfolio with payment and delivery to take place in the future in order to
secure what is considered to be an advantageous price and yield to the Portfolio
at the time of entering into the transaction. The value of fixed income
securities to be delivered in the future will fluctuate as interest rates vary.
Because each Portfolio must set aside cash or liquid securities in a segregated
account to satisfy its commitments to purchase when-issued or delayed delivery
securities, management of the Portfolios' investments may be limited by
commitments to purchase when-issued or delayed delivery securities.
To the extent a Portfolio engages in when-issued or delayed delivery
transactions, it will do so for the purpose of acquiring portfolio securities
consistent with the Portfolio's investment objectives and policies and not for
the purpose of investment leverage or to speculate on interest rate changes. The
Portfolios will only make commitments to purchase securities on a when-issued or
delayed delivery basis with the intention of actually acquiring the securities.
Each Portfolio reserves the right to sell these securities before the settlement
date if deemed advisable.
The purchase of securities on a when-issued or delayed delivery basis exposes
the Portfolios to risk because the securities may decrease in value prior to
their delivery. Purchasing securities on a when-issued or delayed delivery basis
involves the additional risk that the return available in the market when the
delivery takes place will be higher than that obtained in the transaction
itself. These risks could result in increased volatility of a Portfolio's net
asset value to the extent the Portfolio purchases securities on a when-issued or
delayed delivery basis while remaining substantially fully invested.
INVESTMENT IN MONEY MARKET INVESTMENTS. Under a temporary defensive strategy,
pending investment of proceeds from new sales of Portfolio shares, or to meet
ordinary daily cash needs, each Portfolio may hold cash (U.S. dollars, foreign
currencies or multinational currency units) and/or invest any portion or all of
its assets in high quality money market instruments. Money market instruments in
which the Portfolios may invest include, but are not limited to, the following
instruments of U.S. or foreign issuers: government securities, commercial paper,
bank certificates of deposit, bankers' acceptances and repurchase agreements
relating to any of the foregoing. For temporary defensive reasons, such as
during times of international political or economic uncertainty, most or all of
a Portfolio's investments may be made in the United States and denominated in
U.S. dollars.
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REPURCHASE AGREEMENTS. Each Portfolio may invest in repurchase agreements.
Repurchase agreements are short-term instruments under which securities are
purchased from a bank or a securities dealer with an agreement by the seller to
repurchase the securities at a mutually agreeable date, interest rate, and
price. Generally, repurchase agreements are of short duration--usually less than
a week, but on occasion for longer periods. The Portfolios will limit their
investment in repurchase agreements with a maturity of more than seven days and
other illiquid securities to 15% of its respective net assets.
RESTRICTED AND ILLIQUID SECURITIES. As a fundamental policy which may not be
changed without shareholder approval, Global Portfolio may invest no more than
10% of the value of its total assets (at the time of investment) in securities
which are not registered under the applicable securities laws of the country in
which such securities are traded and for which no alternative market is readily
available (such securities are referred to herein as "restricted securities").
In addition, each Portfolio has a nonfundamental policy allowing it to invest no
more than 15% of its net assets (at the time of investment) in all forms of
illiquid investments, as determined pursuant to applicable Securities and
Exchange Commission rules and regulations. For purposes of this nonfundamental
policy, Section 4(2) commercial paper and Rule 144A securities, although
"restricted securities," may be determined to be "liquid" under guidelines
adopted by the Board of Directors. Investing in Rule 144A securities could have
the effect of increasing the level of illiquidity in a Portfolio to the extent
that qualified institutional buyers become, for a time, uninterested in
purchasing these securities.
BORROWINGS. The Portfolios may borrow from banks for temporary or emergency
purposes. The Portfolios also may engage in "roll" transactions which involve
the sale of securities together with a commitment (for which a Portfolio may
receive a fee) to purchase similar, but not identical, securities at a future
date. Each Portfolio will maintain in a segregated account with its custodian
cash or liquid securities in an amount sufficient to cover its obligations under
"roll" transactions. A Portfolio's borrowings through banks and roll
transactions will not exceed 33 1/3% of its total assets.
SECURITIES LENDING. Each Portfolio is authorized to make loans of its portfolio
securities to broker-dealers or to other institutional investors. The borrower
must maintain with the Portfolio's custodian collateral consisting of cash, U.S.
government securities or other liquid, high-grade debt securities equal to at
least 100% of the value of the borrowed securities, plus any accrued interest.
The Portfolio will receive any interest paid on the loaned securities and a fee
and/or a portion of the interest earned on the collateral. Each Portfolio will
limit its loans of portfolio securities to an aggregate of 30% of the value of
its total assets, measured at the time any such loan is made. ("Total assets" of
the Portfolio include the amount lent as well as the collateral securing such
loans.)
OPTIONS, FUTURES AND CURRENCY STRATEGIES. To attempt to increase return, each
Portfolio may write covered call options on securities it holds; this strategy
will be employed only when, in the opinion of Advisers, the size of the premium
the Portfolio receives for writing the option is adequate to compensate the
Portfolio against the risk that appreciation in the underlying security may not
be fully realized if the option is exercised. The Portfolios also are authorized
to write covered put options to attempt to enhance return.
Each Portfolio may use forward currency contracts and certain options and
futures strategies to attempt to hedge its portfolio, I.E., reduce the overall
level of investment risk normally associated with the Portfolio. There can be no
assurance that such efforts will succeed.
To attempt to hedge against adverse movements in exchange rates between
currencies, each Portfolio may enter into forward currency contracts for the
purchase or sale of a specified currency at a specified future date. Such
contracts may involve the purchase or sale of a foreign currency against the
U.S. dollar or may involve two foreign currencies. A Portfolio may enter into
forward currency contracts either with respect to specific transactions or with
respect to its portfolio positions. For example, when a Portfolio anticipates
making a purchase or sale of a security, it may enter into a forward currency
contract in order to set the rate (either relative to the U.S. dollar or another
currency) at which a currency exchange transaction related to the purchase or
sale will be made. Further, when Advisers believes a particular currency may
decline compared to the U.S. dollar or another currency, a Portfolio may enter
into a forward contract to sell the currency Advisers expects to decline in an
amount approximating the value of some or all of the portfolio securities of the
Portfolio denominated in that currency. Although forward contracts will be used
primarily to protect the Portfolios from adverse currency movements, they also
involve the risk that anticipated currency movements will not be accurately
predicted. The Portfolios also may write covered call options and purchase put
and call options on currencies to hedge against movements in exchange rates.
Each Portfolio may write covered call options and purchase put and call options
on equity and debt securities to hedge against the risk of fluctuations in the
prices of securities held by the Portfolio or which Advisers intends to include
in the Portfolio. Each Portfolio may use stock index futures contracts and
options thereon to hedge all or part of the equity portion of its portfolio
against negative stock market movements. Similarly, each Portfolio may use
interest rate futures contracts and options thereon to hedge the debt portion of
its portfolio against changes in the general level of interest rates.
The Portfolios may write only "covered" call options. An option written on a
security or currency is "covered" when, so long as a Portfolio is obligated
under the option, it owns the underlying security or currency. A Portfolio will
"cover" options on
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futures contracts it writes by maintaining in a segregated account either
marketable securities which, in Advisers' judgment, correlate to the underlying
futures contract or an amount of cash or liquid securities equal to the amount
the Portfolio would be required to pay were the option exercised.
The Portfolios have adopted two nonfundamental investment restrictions on the
use of options, futures and forward contracts. The first restriction is that a
Portfolio will not enter into any options, futures or forward contract
transactions if immediately thereafter the amount of premiums paid for all
options, initial margin deposits on all futures contracts and/or options on
futures contracts, and collateral deposited with respect to forward contracts
held by or entered into by the Portfolio would exceed 5% of the value of the
total assets of the Portfolio. The second restriction is that the aggregate
value of a Portfolio's assets covering, subject to or committed to all options,
futures and forward contracts, will not exceed 20% of the value of the total
assets of the Portfolio. However, each Portfolio intends to limit its investment
in futures during the coming year so that the aggregate value of the Portfolio's
assets subject to futures contracts will not exceed 5% of the value of its net
assets.
ZERO COUPON OBLIGATIONS. The Portfolios may invest in zero coupon obligations of
the government and corporate issuers, including rights to "stripped" coupon and
principal payments. Certain obligations are "stripped" of their coupons, and the
rights to receive each coupon payment and the principal payment are sold as
separate securities. Once separated, each coupon as well as the principal amount
represents a different single-payment claim due from the issuer of the security.
Each single-payment claim (coupon or principal) is equivalent to a zero coupon
bond. A zero coupon security pays no interest to its holder during its life, and
its value consists of the difference between its face value at maturity (the
coupon or principal amount), if held to maturity, or its market price on the
date of sale, if sold prior to maturity, and its acquisition price (the
discounted "present value" of the payment to be received).
Certain zero coupon obligations represent direct obligations of the issuer of
the "stripped" coupon and principal payments. Other zero coupon obligations are
securities issued by financial institutions which constitute a proportionate
ownership of an underlying pool of stripped coupon or principal payments. The
Portfolios may invest in either type of zero coupon obligation. The investment
policies and restrictions applicable to corporate and government securities in a
Portfolio shall apply equally to the Portfolio's investments in zero coupon
securities (including, for example, minimum corporate bond ratings).
VARIABLE AMOUNT MASTER DEMAND NOTES. The Portfolios may invest in variable
amount master demand notes. These instruments are short-term unsecured
promissory notes issued by corporations to finance short-term credit needs.
DEPOSITORY RECEIPTS. Each Portfolio may hold equity securities of foreign
issuers in the form of American Depository Receipts ("ADRs") and European
Depository Receipts ("EDRs," which are sometimes referred to as Continental
Depository Receipts or "CDRs") or other securities convertible into securities
of eligible foreign issuers. These securities may not necessarily be denominated
in the same currency as the securities for which they may be exchanged. ADRs are
receipts typically issued by an American bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation. EDRs are
receipts issued in Europe typically by foreign banks and trust companies that
evidence ownership of either foreign or domestic securities. Generally, ADRs in
registered form are designed for use in the U.S. securities markets and EDRs in
bearer form are designed for use in European securities markets. For purposes of
each Portfolio's investment policies, a Portfolio's investments in ADRs and EDRs
will be deemed to be investments in the equity securities of the foreign issuers
into which the ADRs and EDRs may be converted.
INVESTMENT COMPANY SECURITIES. Each Portfolio may purchase shares of investment
companies which invest principally in securities in which the Portfolios are
authorized to invest. The purchase of investment company stock currently is one
of the few mechanisms through which the Portfolios may invest in securities of
companies located in certain foreign countries. A Portfolio's investments in
shares of investment companies may include investments in S&P 500 Depository
Receipts ("SPDRS") and World Equity Benchmark Shares ("WEBS"). SPDRS are shares
of ownership of a unit investment trust (a type of investment company) that
holds all 500 stocks included in the Standard & Poor's 500 Index. WEBS are
country-specific series of securities, where each series seeks to provide
investment results that generally correspond to the market yield performance of
a specific Morgan Stanley Capital International country index by investing in a
portfolio of that country's equity securities. Under the 1940 Act, a Portfolio
may not invest more than 10% of its total assets in investment companies or more
than 5% of its total assets in the securities of any one investment company, nor
may it own more than 3% of the outstanding voting securities of any such
company. A Portfolio will incur additional expenses due to the duplication of
expenses as a result of investing in other investment companies.
SHORT SALES AGAINST THE BOX. A Portfolio may sell a security to the extent the
Portfolio contemporaneously owns or has the right to obtain securities identical
to those sold short without payment of any additional consideration. Such a
short sale is referred to as a short sale "against the box." The aggregate
market value of the underlying securities subject to all outstanding short sales
may not exceed 5% of the net assets of a Portfolio.
DETERMINATION OF AN ISSUER'S DOMICILE. For each Portfolio, an issuer is
typically considered as domiciled in a particular
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country if it is incorporated under the laws of that country, at least 50% of
the value of its assets are located in that country, and it normally derives at
least 50% of its income from operations or sales in that country. For issuers
which do not meet this criteria, Advisers will consider where an issuer has its
principal activities and interests, taking into account such factors as the
location of the issuer's assets, personnel, sales and earnings in determining
the country of an issuer.
RISK CONSIDERATIONS
An investment in either Portfolio involves certain risks in addition to those
noted above and in the Statement of Additional Information. These include the
following:
EQUITY SECURITIES GENERALLY. Market prices of equity securities generally, and
of particular companies' equity securities, frequently are subject to greater
volatility than prices of fixed income securities. Market prices of equity
securities as a group have dropped dramatically in a short period of time on
several occasions in the past, and they may do so again in the future. Each
Portfolio is subject to the risk of generally adverse equity markets.
FOREIGN INVESTING. Foreign investing entails certain additional risks. The
securities of non-U.S. issuers generally will not be registered with, nor the
issuers thereof be subject to, the reporting requirements of the U.S. Securities
and Exchange Commission. Accordingly, there may be less publicly available
information about foreign securities and issuers than is available about
domestic securities and issuers. Foreign companies are not subject to uniform
accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to domestic companies. Securities of
some foreign companies are less liquid and their prices may be more volatile
than securities of comparable domestic companies. Settlement periods for foreign
securities, which are sometimes longer than those for securities of U.S.
issuers, may affect portfolio liquidity. These different settlement practices
may cause missed purchasing opportunities and/or the loss of interest on money
market and debt investments pending further equity or long-term debt
investments.
In addition, with respect to some foreign countries, there is a possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of a Portfolio, political or social instability, or diplomatic or
economic developments which could affect a Portfolio's investments in those
countries. Moreover, individual foreign economies may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross national
product, rate of inflation, rate of savings and capital reinvestment, resource
self-sufficiency and balance of payments positions. It is anticipated that
substantially all of the foreign equities purchased by the Portfolios will be
listed on foreign exchanges. Trading volume on foreign and emerging market stock
exchanges is substantially less than that on the New York Stock Exchange.
Foreign stock exchanges also have further risks due to permanent or temporary
termination of trading and greater spreads between bid and asked prices for
securities in such markets. In addition, there is generally less government
supervision and regulation of foreign stock exchanges. Furthermore, stock
markets in emerging markets, such as nations in the Far East, while offering
opportunities for substantial returns, can be more volatile during periods of
investment uncertainty than established major exchanges. Shares of the
Portfolios, therefore, are subject to greater fluctuation in value than shares
of a conservative equity fund or of a fund which invests entirely in more
established markets. The Portfolios may incur additional costs because of
generally higher foreign brokerage commissions and the additional custodial
costs associated with maintaining securities.
Since the Portfolios may invest substantially in securities denominated in
currencies other than the U.S. dollar, and since the Portfolios may hold foreign
currencies, the Portfolios may be affected favorably or unfavorably by exchange
control regulations or changes in the exchange rates between such currencies and
the U.S. dollar. Changes in currency exchange rates will influence the value of
dividends and interest earned by a Portfolio and gains and losses realized by a
Portfolio. Exchange rates are determined by the forces of supply and demand in
the foreign exchange markets. These forces are affected by the international
balance of payments and other economic and financial conditions, government
intervention, speculation and other factors. In addition, the Portfolios may
incur costs associated with currency hedging and the conversion of foreign
currency into U.S. dollars and may be adversely affected by restriction on the
conversion or transfer of foreign currency.
EMERGING MARKETS. International Portfolio may invest without limitation in
emerging market countries and Global Portfolio may invest up to 45% of its total
assets in equity securities in emerging markets. The risks of foreign investing
are of greater concern in the case of investments in emerging markets, which may
exhibit greater price volatility and have less liquidity. Further, the economies
of emerging market countries generally are heavily dependent upon international
trade and, accordingly, have been and may continue to be adversely affected by
trade barriers, managed adjustments in relative currency values, and other
protectionist measures imposed or negotiated by the countries with which they
trade. These emerging market economies have also been and may continue to be
adversely affected by economic conditions in the countries with which they
trade.
As used in this Prospectus, emerging markets are countries categorized as
emerging markets by the International Finance Corporation, the World Bank's
private sector division. Such countries may be located in various regions of the
world, such as the Far East, Asia, Central Europe and Latin America, and may
include but are not limited to Indonesia, Malaysia, China, India, Mexico,
Argentina, Chile, Brazil, Peru, Hungary, Poland
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and the Czech Republic. Such markets tend to be in the less economically
developed regions of the world. General characteristics of emerging market
countries also include lower degrees of political stability, a high demand for
capital investment, a high dependence on export markets for their major
industries, a need to develop basic economic infrastructures and rapid economic
growth.
SMALLER-CAPITALIZATION COMPANIES. Investing in both U.S. and non-U.S. smaller
capitalization companies involves certain special risks. Smaller-capitalization
companies may have limited product lines, markets or financial resources, and
they may be dependent on a limited management group. The securities of
smaller-capitalization companies may have limited market stability and may be
subject to more abrupt or erratic market movements than securities of larger,
more established companies or the market averages in general. The equity
securities of smaller-capitalization companies frequently have experienced
greater price volatility in the past than those of larger-capitalization
companies, and they may be expected to do so in the future. To the extent the
Portfolios invest in smaller-capitalization companies, they are subject to this
risk of greater volatility.
INTEREST RATE RISK. Interest rate risk is the risk that the value of a
fixed-rate debt security will decline due to changes in market interest rates.
Because the Portfolios invest in fixed-rate debt securities, they are subject to
interest rate risk. In general, when interest rates rise, the value of a
fixed-rate debt security declines. Conversely, when interest rates decline, the
value of a fixed-rate debt generally increases. Thus, shareholders bear the risk
that increases in market interest rates will cause the value of a Portfolio's
investments to decline.
CREDIT RISK. Credit risk is the risk that the issuer of a debt security will
fail to make payments on the security when due. Because the Portfolios invest in
debt securities, they are subject to credit risk.
Securities issued or guaranteed by the U.S. Government generally are viewed as
carrying minimal credit risk. Securities issued by U.S. governmental entities
but not backed by the full faith and credit of the United States, securities
issued by foreign governments, and securities issued by private entities are
subject to higher levels of credit risk. Shareholders bear the risk that payment
defaults could cause the value of a Portfolio's investments to decline.
HIGH-YIELD SECURITIES. International Portfolio may invest up to 25% of its total
assets in high-yield securities. The prices of high-yield securities have been
found to be less sensitive to changes in prevailing interest rates than
higher-rated investments, but are likely to be more sensitive to adverse
economic changes or individual corporate developments. During an economic
downturn or substantial period of rising interest rates, highly leveraged
issuers may experience financial stress which would adversely affect their
ability to service their principal and interest payment obligations, to meet
their projected business goals or to obtain additional financing. If the issuer
of a fixed-income security owned by International Portfolio were to default, the
Portfolio might incur additional expenses to seek recovery. The risk of loss due
to default by issuers of high-yield securities is significantly greater than
that associated with higher-rated securities because such securities generally
are unsecured and frequently are subordinated to the prior payment of senior
indebtedness. In addition, periods of economic uncertainty and change can be
expected to result in an increased volatility of market prices of high-yield
securities and a concomitant volatility in the net asset value of shares of the
Portfolio.
High-yield securities frequently have call or redemption features that would
permit an issuer to repurchase the security from International Portfolio. If a
call were exercised by the issuer during a period of declining interest rates,
the Portfolio likely would have to replace such called security with a lower
yielding security, thus decreasing the net investment income to the Portfolio
and dividends to shareholders.
The secondary market for high-yield securities is less liquid than the markets
for higher-quality securities and, as such, may have an adverse effect on the
market prices of certain securities. The limited liquidity of the market may
also adversely affect the ability of International Portfolio's Board of
Directors to arrive at a fair value for certain high yield securities at certain
times and could make it difficult for the Portfolio to sell certain securities.
There is no lower limit with respect to rating categories for securities in
which International Portfolio may invest. Securities rated D by S&P are in the
lowest rating class, which indicates that payments are in default or that a
bankruptcy petition has been filed with respect to the issuer. Moody's lowest
rated class of bonds is rated C. Issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing. Moody's
and S&P ratings are discussed in an appendix to the Statement of Additional
Information.
CALL RISK. Many corporate bonds may be redeemed at the option of the issuer
("called") at a specified price prior to their stated maturity date. In general,
it is advantageous for a corporate issuer to call its bonds if they can be
refinanced through the issuance of new bonds which bear a lower interest rate
than that of the called bonds. Call risk is the risk that corporate bonds will
be called during a period of declining market interest rates so that such
refinancings may take place.
If a bond held by a Portfolio is called during a period of declining interest
rates, the Portfolio probably will have to reinvest the proceeds received by it
at a lower interest rate than that borne by the called bond, thus resulting in a
decrease in the Portfolio's income. To the extent a Portfolio
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<PAGE>
invests in callable corporate bonds, Portfolio shareholders bear the risk that
reductions in income will result from the call of the bonds. Most U.S.
Government securities are not callable before their stated maturity.
OPTIONS, FUTURES AND CURRENCY STRATEGIES. The use of forward currency contracts
and options and futures strategies involve certain investment risks and
transaction costs. These risks include dependence on Advisers' ability to
predict movements in the prices of individual securities; fluctuations in the
general securities markets and movements in interest rates and currency markets;
imperfect correlation between movements in the price of currency, options,
futures contracts or options thereon and movements in the price of the currency
or security hedged or used for cover; unexpected adverse price movements which
could render a Portfolio's hedging strategy unsuccessful and could result in
losses; the fact that skills and techniques needed to trade options, futures
contracts and options thereon or to use forward currency contracts are different
from those needed to select the securities in which the Portfolio invests; and
lack of assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any particular time requiring a
Portfolio to maintain a position until exercise or expiration, which could
result in losses.
ACTIVE MANAGEMENT. Each Portfolio is actively managed by Advisers. The
performance of each Portfolio therefore will reflect in part the ability of
Advisers to select securities which are suited to achieving the Portfolio's
investment objectives. Due to their active management, the Portfolios could
underperform other mutual funds with similar investment objectives or the market
generally.
NONDIVERSIFICATION. Each Portfolio normally will invest in a substantial number
of issuers; however, the Portfolios will operate as "nondiversified" mutual
funds, enabling each Portfolio to invest more than 5% of its assets in the
securities of single issuer. Because the Portfolios are permitted to invest a
greater proportion of their assets in the securities of a smaller number of
issuers, each Portfolio may be subject to greater investor risk with respect to
its individual portfolio than an investment company which is more broadly
diversified.
PORTFOLIO TURNOVER. Although the Portfolios do not intend generally to trade for
short-term profits, a Portfolio may dispose of a security without regard to the
time such security has been held when such action appears advisable to Advisers.
MANAGEMENT
BOARD OF DIRECTORS
Under Minnesota law, the Board of Directors of Fortis Worldwide (the "Board of
Directors") has overall responsibility for managing Fortis Worldwide in good
faith, in a manner reasonably believed to be in the best interests of Fortis
Worldwide, and with the care an ordinarily prudent person would exercise in
similar circumstances. However, this management may be delegated. The Articles
of Incorporation of Fortis Worldwide limit the liability of directors to the
fullest extent permitted by law.
THE INVESTMENT ADVISER/TRANSFER AGENT/DIVIDEND AGENT
Fortis Advisers, Inc. ("Advisers") is the investment adviser, transfer agent,
and dividend agent for the Portfolios. Advisers has been managing investment
company portfolios since 1949, and is indirectly owned 50% by Fortis AMEV and
50% by Fortis AG, diversified financial services companies. In addition to
providing investment advice, Advisers is responsible for management of Fortis
Worldwide's business affairs, subject to the overall authority of the Board of
Directors. Advisers' address is that of the Portfolios.
Under an Investment Advisory and Management Agreement, Advisers receives a
monthly fee from each Portfolio calculated at an annual rate of 1% of the first
$500 million of average daily net assets and .9% of average daily net assets
over $500 million. While the Portfolios' advisory fees are higher than those
paid by many other investment companies, they are partially offset by the added
costs paid by Advisers for acting as the Portfolios' registrar, transfer agent
and dividend agent.
If International Portfolio's total annual operating expenses (based on average
daily net assets) exceed an amount equal to, on an annual basis, 1.70% for Class
A shares and 2.45% for Class B, H and C shares, then Advisers has agreed to
reimburse the International Portfolio a portion of its advisory fee until the
earlier of the end of the fiscal year ended October 31, 1998 or the date the
Portfolio's net assets exceed $20,000,000. In addition, to this fee
reimbursement, Advisers reserves the right, but shall not be obligated, to
institute voluntary expense reimbursement programs which, if instituted, shall
be in such amounts and based on such terms and conditions as Advisers, in its
sole and absolute discretion, determines. Furthermore, Advisers reserves the
absolute right to discontinue any of such reimbursement programs at any time
without notice to the applicable Portfolio.
PORTFOLIO MANAGEMENT
James S. Byrd has been primarily responsible for the day-to-day management of
Global Portfolio since its inception in 1991. Diane M. Gotham began managing
Global Portfolio as of the date of this Prospectus. Mr. Byrd and Ms. Gotham have
been primarily responsible for the day-to-day management of International
Portfolio since its inception. Mr. Byrd has been an Executive Vice President of
Advisers since 1995, prior to which he was a Vice President of Advisers and
Investors. Ms. Gotham has been a Vice President of Advisers since 1998. From
1994 to 1998, Ms. Gotham was a securities analyst for Advisers, and from 1993 to
1994, Ms. Gotham was a systems engineer for International Business Machines
("IBM") in Minneapolis, Minnesota.
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BROKERAGE ALLOCATION
Advisers may consider sales of shares of a Portfolio, and of other funds advised
by Advisers, as a factor in the selection of broker-dealers to execute Portfolio
securities transactions when it is believed that this can be done without
causing the Portfolio to pay more in brokerage commissions than it would
otherwise.
THE UNDERWRITER AND DISTRIBUTION EXPENSES
Fortis Investors, Inc. ("Investors"), a subsidiary of Advisers, is Fortis
Worldwide's underwriter. Investors' address is that of the Portfolios.
Pursuant to a Plan of Distribution adopted by the Portfolios under Rule 12b-1
under the 1940 Act, each Portfolio is obligated to pay Investors an annual fee
of .25% of each Portfolio's average net assets attributable to Class A shares
and 1.00% of each Portfolio's average net assets attributable to Class B, H and
C shares. All of the Rule 12b-1 fees paid by each Portfolio with respect to its
Class A shares constitutes a "distribution fee." The Rule 12b-1 fees paid by
each Portfolio with respect to its Class B, H and C shares is comprised of (a) a
servicing fee equal to .25% of each Portfolio's average daily net assets
attributable to each of the Class B, H and C shares and (b) a distribution fee
equal to .75% of each Portfolio's average daily net assets attributable to each
of the Class B, H and C shares.
The higher Rule 12b-1 distribution fee attributable to Class B, H and C shares
is designed to permit an investor to purchase such shares through registered
representatives of Investors and other broker-dealers without the assessment of
an initial sales charge and at the same time to permit Investors to compensate
its registered representatives and other broker-dealers in connection with the
sale of such shares. The fee for all classes may be used by Investors for the
purpose of financing any activity which is primarily intended to result in the
sale of shares. For example, such distribution fee may be used by Investors: (a)
to compensate broker-dealers, including Investors and its registered
representatives, for their sale of Portfolio shares, including the
implementation of various incentive programs with respect to broker-dealers,
banks, and other financial institutions, and (b) to pay other advertising and
promotional expenses in connection with the distribution of Portfolio shares.
The shareholder servicing fee paid by the Class B, H and C shares is intended to
compensate Investors for the provision of certain services to shareholders. The
services provided may include personal services provided to shareholders, such
as answering shareholder inquiries regarding the Portfolios and providing
reports and other information, and services related to the maintenance of
shareholder accounts. Investors may use the Rule 12b-1 fee to make payments to
qualifying broker-dealers and financial institutions that provide such services.
Investors may also enter into sales or servicing agreements with certain
institutions such as banks ("Service Organizations") which have purchased shares
of one or both of the Portfolios for the accounts of their clients, or which
have made Portfolio shares available for purchase by their clients, and/or which
provide continuing service to such clients. The Glass-Steagall Act and other
applicable laws prohibit certain banks from engaging in the business of
underwriting securities. In such circumstances, Investors, if so requested, will
engage such banks as Service Organizations only to perform administrative and
shareholder servicing functions, but at the same fees and other terms applicable
to dealers. (If a bank were prohibited from acting as a Service Organization,
its shareholder clients would be permitted to remain Portfolio shareholders and
alternative means for continuing servicing of such shareholders would be
sought.) In such event changes in the operation of the Portfolios might occur
and a shareholder serviced by such bank might no longer be able to avail itself
of any automatic investment or other services then being provided by the Bank.
(State securities laws on this issue may differ from the interpretations of
Federal law expressed above and banks and other financial institutions may be
required to register as dealers pursuant to state law.)
VALUATION OF SECURITIES
Each Portfolio's net asset value per share is determined by dividing the value
of the securities owned by the Portfolio, plus any cash or other assets, less
all liabilities, by the number of the Portfolio's shares outstanding. The
portfolio securities in which the Portfolios invest fluctuate in value, and
hence the net asset value per share of each Portfolio also fluctuates. The net
asset value of each Portfolio's shares is determined as of the close of regular
trading on the New York Stock Exchange (the "Exchange") on each day on which the
Exchange is open. If shares are purchased through another broker-dealer who
receives the order prior to the close of the Exchange, then Investors will apply
that day's price to the order as long as the broker-dealer places the order with
Investors by the end of the day.
Securities are generally valued at market value. A security listed or traded on
the exchange is valued at its last sale price on the exchange where it is
principally traded on the day of valuation. Lacking any sales on the exchange
where it is principally traded on the day of valuation, prior to the time as of
which assets are valued, the security generally is valued at the previous day's
last sale price on that exchange. A security listed or traded on the NASDAQ
National Market System is valued at its last sale price that day, and lacking
any sales that day on the NASDAQ National Market System, the security generally
is valued at the last bid price. Options will be valued at market value or fair
value, as determined in good faith by the Board of Directors, if no market
exists. Futures contracts will be valued in a like manner except that open
futures
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<PAGE>
contracts sales will be valued using the closing settlement price or, in the
absence of such a price, the most recent quoted asked price.
An outside pricing service may be utilized to provide valuations of debt
securities. The pricing service may employ electronic data processing techniques
and/or a matrix system to determine valuations using methods which include
consideration of yields or prices of bonds of comparable quality, type of issue,
coupon, maturity and rating; indications as to value from dealers; and general
market conditions. When market quotations are not readily available, or when
illiquid securities or other assets are being valued, such securities or other
assets are valued at fair value as determined in good faith by management under
supervision of the Portfolios' Board of Directors. Short-term investments in
debt securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued at amortized cost.
Purchases and sales by a Portfolio after 2:00 P.M. Central Time normally are not
recorded until the following day.
Any assets or liabilities initially expressed in terms of foreign currencies are
translated into U.S. dollars at the official exchange rate or, alternatively, at
the mean of the current bid and asked prices of such currencies against the U.S.
dollar last quoted by a major bank that is a regular participant in the foreign
exchange market or on the basis of a pricing service that takes into account the
quotes provided by a number of such major banks. If neither of these
alternatives is available or both are deemed not to provide a suitable
methodology for converting a foreign currency into U.S. dollars, the Board of
Directors in good faith will establish a conversion rate for such currency.
Trading in securities on foreign securities exchanges and over-the-counter
markets is normally completed well before the close of the business day in New
York. The calculation of a Portfolio's net asset value therefore may not take
place contemporaneously with the determination of the prices of securities held
by the Portfolio. Events affecting the values of portfolio securities that occur
between the time their prices are determined and the close of the Exchange will
not be reflected in a Portfolio's net asset value unless management, under the
supervision of the Board of Directors, determines that the particular event
would materially affect net asset value. Foreign securities trading may not take
place on all days on which the Exchange is open. Further, trading takes place in
Japanese markets on certain Saturdays and in various foreign markets on days on
which the Exchange is not open and therefore the Portfolios' net asset value is
not calculated. As a result, a Portfolio's net asset value may be significantly
affected by such trading on days when the Portfolio is not open for shareholder
purchases and redemptions.
CAPITAL STOCK
Each Portfolio currently offers its shares in four classes, each with different
sales arrangements and bearing differing expenses. Class A, B, H and C shares
each represent interests in the assets of the respective Portfolio and have
identical voting, dividend, liquidation and other rights on the same terms and
conditions except that expenses related to the distribution of each class are
borne solely by such class and each class of shares has exclusive voting rights
with respect to provisions of the Portfolio's Rule 12b-1 distribution plan which
pertain to that particular class and other matters for which separate class
voting is appropriate under applicable law. The Portfolios may offer additional
classes of shares.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
Each Portfolio's policy is to pay dividends from net investment income and make
distributions of any realized capital gains annually. Distributions paid by a
Portfolio with respect to all classes of shares will be calculated in the same
manner, at the same time, on the same day, and will be in the same amount,
except that the higher Rule 12b-1 fees applicable to Class B, H and C shares
will be borne exclusively by such shares. The per share dividends on Class B, H
and C shares will be lower than those on Class A shares as a result of the
higher Rule 12b-1 fees applicable to Class B, H and C shares.
Dividends and capital gains distributions will be made in the form of additional
shares of the same class of the same Portfolio (at net asset value) unless the
shareholder sends a written request that either or both be sent to the
shareholder or reinvested (at net asset value) in shares of the same class of
another Fortis fund. Dividends and capital gains distributions will be
reinvested on the dividend record date at the net asset value on that date. If
they are reinvested in another Fortis fund, processing normally takes up to
three business days.
TAXATION
Each Portfolio will distribute substantially all of its net income and capital
gains to its shareholders. Distributions from each Portfolio are taxable to
shareholders, whether paid in cash or reinvested. Dividends paid from the net
income of each Portfolio must be treated as ordinary income by its shareholders.
Dividends paid from each Portfolio's net capital gains are generally treated as
long-term capital gains by shareholders, regardless of the length of time for
which they have held their shares in the Portfolio. However, for individuals,
estates and trusts, the Taxpayer Relief Act of 1997 has created new "mid-term
capital gain" rates that apply to the sale of capital assets held more than one
year but not more than 18 months. Under regulations announced by the Internal
Revenue Service, each Portfolio will designate the portion of its capital gain
dividends that must be treated by shareholders who are individuals,
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estates or trusts as mid-term capital gains and the portion that must be treated
by such shareholders as long-term capital gains.
A shareholder will recognize capital gain or loss upon the sale or exchange of
shares in a Portfolio if, as is normally the case, the shares are capital assets
in the shareholder's hands. For corporate shareholders, the capital gain or loss
will be long-term if the shares have been held for more than one year. For
shareholders that are individuals, estates or trusts, the gain or loss will be
long-term if the shareholder has held the shares for more than 18 months and
mid-term if the shareholder has held the shares for more than one year but not
more than 18 months.
Information about the tax status of each year's dividends and distributions will
be mailed annually.
Prior to purchasing shares of a Portfolio, prospective shareholders (except for
tax qualified retirement plans) should consider the impact of dividends or
capital gains distributions which are expected to be announced, or have been
announced but not paid. Any such dividends or capital gains distributions paid
shortly after a purchase of shares by an investor prior to the record date will
have the effect of reducing the per share net asset value by the amount of the
dividends or distributions. All or a portion of such dividends or distributions,
although in effect a return of capital, are subject to taxation. As of October
31, 1997, approximately 32% of Global Portfolio's net assets represented
unrealized appreciation, undistributed net investment income, and accumulated
net realized gains or losses.
HOW TO BUY PORTFOLIO SHARES
GENERAL PURCHASE INFORMATION
MINIMUM AND MAXIMUM INVESTMENTS
A minimum initial investment of $500 normally is required. An exception to this
minimum (except on telephone or wire orders) is the "Systematic Investment Plan"
($25 per month by "Pre-authorized Check Plan" or $50 per month on any other
basis). The minimum subsequent investment normally is $50, again subject to the
above exception.
Class A shares have no maximum order. Class B and H shares have a $500,000
maximum and Class C shares have a $1,000,000 maximum. Orders greater than these
limits will be treated as orders for Class A shares.
INVESTING BY TELEPHONE
Your registered representative may make your purchase ($500 minimum) by
telephoning the number on the cover page of this Prospectus. In addition, your
check and the Account Application which accompanies this Prospectus must be
promptly forwarded, so that Investors receives your check within three business
days. Please make your check payable to Fortis Investors, Inc. and mail it with
your Application to "CM-9651, St. Paul, MN 55170-9651." If you have a bank
account authorization form on file, you may purchase $100 - $10,000 worth of
Portfolio shares via telephone through the automated Fortis Information Line.
INVESTING BY WIRE
A shareholder having an account with a commercial bank that is a member of the
Federal Reserve System may purchase shares ($500 minimum) by requesting their
bank to transmit immediately available funds (Federal Funds) by wire to:
U.S. Bank National Association
ABA #091000022, credit account no: 1-702-2514-1341
Fortis Funds Purchase Account
For further credit to __________________________________________________________
(name of client)
Fortis Account NBR _____________________________________________________________
Before making an initial investment by wire, your broker-dealer must first
telephone Investors at the number on the cover page of this Prospectus to open
your account and obtain your account number. In addition, the Account
Application which accompanies this Prospectus must be promptly forwarded to
Investors at the mailing address in the "Investing by Mail" section of this
Prospectus. Additional investments may be made at any time by having your bank
wire Federal Funds to the above address for credit to your account. Such
investments may be made by wire even if the initial investment was by mail.
INVESTING BY MAIL
(ADDRESS: CM-9614, ST. PAUL, MN 55170-9614)
The Account Application which accompanies this Prospectus must be completed,
signed, and sent with a check or other negotiable bank draft, payable to "Fortis
Funds." Additional purchases may be made at any time by mailing a check or other
negotiable bank draft along with your confirmation stub. The account to which
the subsequent purchase is to be credited should be identified as to the name(s)
of the registered owner(s) and by account number.
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ALTERNATIVE PURCHASE ARRANGEMENTS
Each Portfolio offers investors the choice between multiple classes of shares
which offer differing sales charges and bear different expenses. These
alternatives permit an investor to choose the more beneficial method of
purchasing shares given the amount of the purchase, the length of time the
investor expects to hold the shares, and other circumstances. A broker-dealer
may receive different levels of compensation depending on which class of shares
is sold. Investors may also provide additional cash compensation to dealers, and
the dealers may use the cash compensation for their own company-sponsored sales
programs. Additional compensation or assistance may be provided to dealers and
includes payment or reimbursement for educational, training and sales
conferences or programs for their employees. In some cases, this compensation
may only be available to dealers whose representatives have sold or are expected
to sell significant amounts of shares. Investors will make these payments from
it's own resources and none of the aforementioned additional compensation is
paid for by the applicable Portfolio or it's shareholders.
CLASS A SHARES--INITIAL SALES CHARGE ALTERNATIVE
The public offering price of each Portfolio's Class A shares is determined once
daily, by adding a sales charge to the net asset value per share of the shares
next calculated after receipt of the purchase order. The sales charges and
broker-dealer concessions, which vary with the size of the purchase, are shown
in the following table.
<TABLE>
<CAPTION>
SALES CHARGE
SALES CHARGE AS
AS PERCENTAGE PERCENTAGE
OF THE OF THE BROKER-
OFFERING NET AMOUNT DEALER
AMOUNT OF SALE PRICE INVESTED CONCESSION
- ---------------------------------------- ------------- ------------ ----------
<S> <C> <C> <C>
Less than $100,000...................... 4.750% 4.987% 4.00%
$100,000 but less than $250,000......... 3.500% 3.627% 3.00%
$250,000 but less than $500,000......... 2.500% 2.564% 2.25%
$500,000 but less than $1,000,000....... 2.000% 2.041% 1.75%
$1,000,000 or more*..................... -0- -0- 1.00%
</TABLE>
- ------------------------
* Each Portfolio imposes a contingent deferred sales charge in connection with
certain purchases of Class A shares of $1,000,000 or more. See
"Redemption--Contingent Deferred Sales Charge."
Additional compensation (as a percentage of sales charge) will be paid to a
broker-dealer when its annual sales of Fortis funds having a sales charge exceed
$10,000,000 (2%), $25,000,000 (4%), and $50,000,000 (5%).
The above scale applies to purchases of Class A shares by the following:
(1) Any individual, his or her spouse, and their children under the age of
21, and any of such persons' tax-qualified plans (provided there is only one
participant);
(2) A trustee or fiduciary of a single trust estate or single fiduciary
account; and
(3) Any organized group, provided that the purchase is made by means which
result in economy of sales effort or expenses, whether the purchase is made
through a central administrator, through a single broker-dealer or by other
means, and the group has a tax identification number. An organized group
does not include clients of an investment adviser.
SPECIAL PURCHASE PLANS
For information on any of the following special purchase or exchange plans
applicable to Class A shares, see the Statement of Additional Information or
contact your broker-dealer or sales representative. It is the purchaser's
obligation to notify his or her broker-dealer or sales representative about the
purchaser's eligibility for any of the following special purchase or exchange
plans.
- RIGHT OF ACCUMULATION The preceding table's sales charge discount applies
to the current purchase plus the net asset value of shares already owned
of any Fortis fund having a sales charge.
- STATEMENT OF INTENTION The preceding table's sales charge discount
applies to an initial purchase of at least $1,000, with an intention to
purchase the balance needed to qualify within 13 months--excluding shares
purchased by reinvesting dividends or capital gains.
- REINVESTED DIVIDEND/CAPITAL GAINS DISTRIBUTIONS BETWEEN THE FORTIS
FUNDS Shareholders of either Portfolio may reinvest their dividend and/or
capital gains distributions in either Portfolio or another Fortis fund at
net asset value.
- CONVERSION FROM CLASS B OR H SHARES Class B or H shares will
automatically be converted to Class A shares (at net asset value) after
eight years.
EXEMPTIONS FROM SALES CHARGE:
- Fortis, Inc. or its subsidiaries, and the following persons associated
with such companies, if all account owners fit this description: (1)
officers and directors; (2) employees; (3) spouses of any such persons; or
(4) any of such persons' children, grandchildren, parents, grandparents,
or siblings--or spouses of any of these persons. (All such persons may
continue to add to their account even after their company relationships
have ended);
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- Fortis Worldwide directors, officers, or their spouses (or such persons'
children, grandchildren, parents, or grandparents--or spouses of any such
persons), if all account owners fit this description;
- Representatives or employees (or their spouses) of Investors (including
agencies) or of other broker-dealers having a sales agreement with
Investors (or such persons' children, grandchildren, parents, or
grandparents--or spouses of any such persons), if all account owners fit
this description;
- Pension, profit-sharing, and other retirement plans of directors,
officers, employees, representatives, and other relatives and affiliates
(as set forth in the preceding three paragraphs) of Fortis Worldwide,
Fortis, Inc., and broker-dealers (and certain affiliated companies) having
a sales agreement with Investors and purchases with the proceeds from such
plans upon the retirement or employment termination of such persons;
- Registered investment companies;
- Shareholders of unrelated mutual funds with front-end and/or deferred
sales loads, to the extent that the purchase price of such Portfolio
shares is funded by the proceeds from the redemption of shares of any such
unrelated mutual fund (within 60 days of the purchase of Portfolio
shares), provided that the shareholder's application so specifies and is
accompanied either by the redemption check of such unrelated mutual fund
(or a copy of the check) or a copy of the confirmation statement showing
the redemption. Similarly, anyone who is or has been the owner of a fixed
annuity contract not deemed a security under the securities laws who
wishes to surrender such contract and invest the proceeds in a Portfolio,
to the extent that the purchase price of such Portfolio shares is funded
by the proceeds from the surrender of the contract (within 60 days of the
purchase of Portfolio shares), provided that such owner's application so
specifies and is accompanied either by the insurance company's check (or a
copy of the check) or a copy of the insurance company surrender form. From
time to time, Investors may pay commissions to broker-dealers and
registered representatives on transfers from mutual funds or annuities as
described above;
- Purchases by employees (including their spouses and dependent children) of
banks and other financial institutions that provide referral and
administrative services related to order placement and payment to
facilitate transactions in shares of a Portfolio for their clients
pursuant to a sales or servicing agreement with Investors; provided,
however, that only those employees of such banks and other firms who as a
part of their usual duties provide such services related to such
transactions in Portfolio shares shall qualify;
- Commercial banks offering self directed 401(k) programs containing both
pooled and individual investment options may purchase Portfolio shares for
such programs at a reduced sales charge of 2.5% on sales of less than
$500,000. For sales of $500,000 or more, normal sales charges apply; and
- Registered investment advisers, trust companies, and bank trust
departments exercising discretionary investment authority or using a money
management/ mutual fund "wrap" program with respect to the money to be
invested in a Portfolio, provided that the investment adviser, trust
company or trust department provides Advisers with evidence of such
authority or the existence of such a wrap program with respect to the
money invested.
RULE 12b-1 FEES
Class A shares are subject to a Rule 12b-1 fee payable at an annual rate of .25%
of the average daily net assets of each Portfolio attributable to such shares.
For additional information, see "The Underwriter and Distribution Expenses."
DEFERRED SALES CHARGES
Although there is no initial sales charge on purchases of Class A shares of
$1,000,000 or more, Investors pays broker-dealers out of its own assets, a fee
of up to 1% of the offering price of such shares. If these shares are redeemed
within two years, the redemption proceeds will be reduced by 1%. For additional
information, see "Redemption--Contingent Deferred Sales Charge."
CLASS B AND H SHARES--CONTINGENT DEFERRED SALES CHARGE ALTERNATIVES
The public offering price of Class B and H shares is the net asset value of each
Portfolio's shares. Such shares are sold without an initial sales charge so that
a Portfolio receives the full amount of the investor's purchase. However, a
contingent deferred sales charge ("CDSC") of 4% will be imposed if shares are
redeemed within two years of purchase. The CDSC decreases according to the
following table:
<TABLE>
<CAPTION>
IF REDEEMED WITHIN CDSC
------------------------------------ ----
<S> <C>
3 years of purchase................. 3%
4 years of purchase................. 3%
5 years of purchase................. 2%
6 years of purchase................. 1%
</TABLE>
For additional information, see "Redemption--Contingent Deferred Sales Charge."
In addition, Class B and H shares are subject to higher annual Rule 12b-1 fees
as described below.
Proceeds from the CDSC are paid to Investors and are used to defray its expenses
related to providing distribution-related services to a Portfolio in connection
with the sale of Class B and H shares, such as the payment of compensation to
17
<PAGE>
selected broker-dealers, and for selling such shares. The combination of the
CDSC and the Rule 12b-1 fee enables a Portfolios to sell such shares without
deduction of a sales charge at the time of purchase. Although such shares are
sold without an initial sales charge, Investors pays a dealer concession equal
to: (1) 4.00% of the amount invested to broker-dealers who sell Class B shares
at the time the shares are sold and an annual fee of .25% of the average daily
net assets of the Portfolio attributable to such shares; or (2) 5.25% of the
amount invested to broker-dealers who sell Class H shares at the time the shares
are sold (with no annual fee). Under alternative (2), from time to time the
dealer concession paid to broker-dealers who sell Class H shares may be
increased up to 5.50%.
RULE 12b-1 FEES
Class B and H shares are subject to a Rule 12b-1 fee payable at an annual rate
of 1.00% of the average daily net assets of each Portfolio attributable to such
shares. The higher Rule 12b-1 fee will cause Class B and H shares to have a
higher expense ratio and to pay lower dividends than Class A shares. For
additional information about this fee, see "The Underwriter and Distribution
Expenses."
CONVERSION TO CLASS A SHARES
Class B and H shares (except for those purchased by reinvestment of dividends
and other distributions) will automatically convert to Class A shares after
eight years. Each time any such shares in the shareholder's account convert to
Class A, a proportionate amount of the Class B and H shares purchased through
the reinvestment of dividends and other distributions paid on such shares will
also convert to Class A.
CLASS C SHARES--LEVEL SALES CHARGE ALTERNATIVE
The public offering price of Class C shares is the net asset value of such
shares. Class C shares are sold without an initial sales charge so that a
Portfolio receives the full amount of the investor's purchase. However, a CDSC
of 1% will be imposed if shares are redeemed within one year of purchase. For
additional information, see "Redemption--Contingent Deferred Sales Charge." In
addition, Class C shares are subject to higher annual Rule 12b-1 fees as
described below.
Proceeds from the CDSC are paid to Investors and are used to defray its expenses
related to providing distribution-related services to the Portfolios in
connection with the sale of Class C shares, such as the payment of compensation
to selected broker-dealers, and for selling Class C shares. The combination of
the CDSC and the Rule 12b-1 fee enables the Portfolios to sell Class C shares
without deduction of a sales charge at the time of purchase. Although Class C
shares are sold without an initial sales charge, Investors pays a dealer
concession equal to 1.00% of the amount invested to broker-dealers who sell
Class C shares at the time the shares are sold and an annual fee of 1.00% of the
amount invested that begins to accrue one year after the shares are sold.
RULE 12b-1 FEES
Class C shares are subject to a Rule 12b-1 fee payable at an annual rate of
1.00% of the average daily net assets of the respective Portfolio attributable
to such shares. The higher Rule 12b-1 fee will cause Class C shares to have a
higher expense ratio and to pay lower dividends than Class A shares. For
additional information about this fee, see "The Underwriter and Distribution
Expenses."
SPECIAL PURCHASE PLANS FOR ALL CLASSES
- TAX SHELTERED RETIREMENT PLANS Individual Retirement Accounts ("IRAs"),
Keogh, Pension, Profit Sharing, and 403(b) accounts are available.
- GIFTS OR TRANSFERS TO MINOR CHILDREN Adults can make an irrevocable gift
or transfer of up to $10,000 annually per child ($20,000 for married
couples) to as many children as they choose without having to file a
Federal gift tax return.
- SYSTEMATIC INVESTMENT PLAN Voluntary $25 or more per month purchases by
automatic financial institution transfers (see Systematic Investment Plan
Authorization Agreement in this Prospectus) or $50 or more per month by
any other means enable an investor to lower his or her average cost per
share through the principle of "dollar cost averaging."
- EXCHANGE PRIVILEGE Portfolio shares may be exchanged among other funds of
the same class managed by Advisers without payment of an exchange fee or
additional sales charge. Similarly, shareholders of other Fortis funds may
exchange their shares for Portfolio shares of the same class (at net asset
value if the shares to be exchanged have already been subject to a sales
charge). Also, holders of Class E shares of Fortis Tax-Free Portfolios and
Fortis Income Portfolios (which also have a front-end sales charge) may
exchange their shares for Class A Portfolio shares and holders of Fortis
Money Fund Class A shares may exchange their shares for any class of
Portfolio shares (at net asset value and only into Class A if the shares
have already incurred a sales charge). A shareholder initiates an exchange
by writing to or telephoning his or her broker-dealer, sales
representative, or the Portfolios regarding the shares to be exchanged.
Telephone exchanges will be permitted only if the shareholder completes
and returns the Telephone Exchange section of the Account Application.
During times of chaotic economic or market circumstances, a shareholder
may have difficulty reaching his or her broker-dealer, sales
representative, or the Portfolios by telephone. Consequently, a telephone
exchange may be difficult to implement at those times. See "Redemption."
An exchange of shares of one fund for those of another fund pursuant to
the exchange privilege is considered to be a sale for federal income tax
purposes, and may result in a taxable capital gain or loss.
18
<PAGE>
Purchases and exchanges should be made for investment purposes only. The
Portfolios, Advisers and Investors each reserves the right to reject any
specific purchase order or to restrict purchases by a particular purchaser (or
group of purchasers) at any time. For instance, if a Portfolio, Advisers or
Investors believes a purchase may be contrary to the best interests of the
Portfolio's shareholders or would otherwise disrupt the management of the
Portfolio, the Portfolio, Advisers or Investors may reject such purchase. The
Portfolios, Advisers and Investors also reserve the right to restrict, terminate
or impose charges upon exchanges and/or telephone transfer privileges, with 30
days notice to the shareholder.
It is the policy of the Portfolios and Investors to reject and/or restrict
purchases by market timers, if (1) more than four exchange purchases are
affected in a timed account in a single calendar year or (2) a certain purchase
would result in shares being held in timed accounts by market timers
representing more than 1% of a Portfolio's net assets. The Portfolios, Advisers
and Investors each reserves the right to request market timers to redeem their
shares at net asset value, less any applicable CDSC, if in the opinion of the
Portfolios, Advisers or Investors these restrictions are violated.
REDEMPTION
Registered holders of Portfolio shares may redeem their shares without any
charge (except any applicable contingent deferred sales charge) at the per share
net asset value next determined following receipt by a Portfolio of a written
redemption request in proper form (and a properly endorsed stock certificate if
one has been issued). However, if shares are redeemed through another
broker-dealer who receives the order prior to the close of the Exchange, then
Investors will apply that day's price to the order as long as the broker-dealer
places the order with Investors by the end of the day. Some broker-dealers may
charge a fee to process redemptions.
Any certificates should be sent to the Portfolios by certified mail. Share
certificates and/or stock powers, if any, tendered in redemption must be
endorsed and executed exactly as the Portfolio shares are registered. If the
redemption proceeds are to be paid to the registered holder and sent to the
address of record, normally a signature guarantee is not required unless the
redemption proceeds are greater than $25,000. However, for example, if the
redemption proceeds are to be paid to someone other than the registered holder,
sent to a different address, or the shares are to be transferred, the owner must
have his signature guaranteed.
Class A shares may be registered in broker-dealer "street name accounts" only if
the broker-dealer has a selling agreement with Investors. In such cases,
instructions from the broker-dealer are required to redeem shares or transfer
ownership. Transfer to another broker-dealer requires the new broker-dealer to
also have a selling agreement with Investors. If the proposed new broker-dealer
does not have a selling agreement with Investors, the shareholder can leave the
shares under the original street name account or have the broker-dealer transfer
ownership to the shareholder's name.
Broker-dealers having a sales agreement with Investors may orally place a
redemption order, but proceeds will not be released until the appropriate
written materials are received.
An individual shareholder (or in the case of multiple owners, any shareholder)
may orally redeem up to $25,000, provided that the account is not a
tax-qualified plan, and the check will be sent to the address of record if such
address has not changed in the last 30 days. During times of chaotic economic or
market circumstances, a shareholder may have difficulty reaching his or her
broker-dealer, sales representative, or the Portfolios by telephone.
Consequently, a telephone redemption may be difficult to implement at those
times. If a shareholder is unable to reach the Portfolios by telephone, written
instructions should be sent. Advisers reserves the right to modify, condition,
terminate, or impose charges upon this telephone redemption privilege with 30
days notice to shareholders. Advisers, Investors and Fortis Worldwide will not
be responsible for, and the shareholder will bear the risk of loss from, oral
instructions, including fraudulent instructions, which are reasonably believed
to be genuine. The telephone redemption procedure is automatically available to
shareholders. Fortis Worldwide will employ reasonable procedures to confirm that
telephone instructions are genuine, but if such procedures are not deemed
reasonable, it may be liable for any losses due to unauthorized or fraudulent
instructions. Fortis Worldwide's procedures are to verify address and social
security number, tape record the telephone call and provide written confirmation
of the transaction.
Payment will be made as soon as possible, but not later than three days after
receipt of a proper redemption request. However, if shares subject to the
redemption request were recently purchased with non-guaranteed funds (e.g.,
personal check), the mailing of your redemption check may be delayed by up to
fifteen days. A shareholder wishing to avoid these delays should consider the
wire purchase method described under "How to Buy Portfolio Shares."
Each Portfolio has the right to redeem accounts with a current value of less
than $500 unless the original purchase price of the remaining shares (including
sales commissions) was at least $500. Portfolio shareholders actively
participating in the Portfolios' Systematic Investment Plan or Group Systematic
Investment Plan will not have their accounts redeemed. Before redeeming an
account, a Portfolio will mail to the shareholder a notice of its intention to
redeem, which will give the shareholder an opportunity to make an additional
investment. If no additional investment is received by the Portfolio within 60
days of the date the notice was mailed, the shareholder's account will be
redeemed.
19
<PAGE>
Each Portfolio has a "Systematic Withdrawal Plan" which provides for voluntary
automatic withdrawals of at least $50 monthly, quarterly, semiannually, or
annually. Deferred sales charges may apply to such redemptions.
There is also a "Reinvestment Privilege" which is a one-time opportunity to
reinvest sums redeemed within the prior 60 days without payment of an additional
sales charge. For further information about these plans, contact your
broker-dealer or sales representative.
CONTINGENT DEFERRED SALES CHARGE
CLASS A SHARES
Each Portfolio imposes a contingent deferred sales charge ("CDSC") on Class A
shares in certain circumstances. Under the CDSC arrangement, for sales of shares
of $1,000,000 or more, including right of accumulation and statements of
intention (see "How to Buy Portfolio Shares--Class A Shares-- Initial Sales
Charge Alternative--Special Purchase Plans"), the front-end sales charge
("FESC") will not be imposed (although Investors intends to pay its registered
representatives and other dealers that sell Portfolio shares, out of its own
assets, a fee of up to 1% of the offering price of such sales except on
purchases exempt from the FESC). However, if such shares are redeemed within two
years after their purchase date (the "CDSC Period"), the redemption proceeds
will be reduced by the 1% CDSC.
The CDSC will be applied to the lesser of (a) the net asset value of shares
subject to the CDSC at the time of purchase, or (b) the net asset value of such
shares at the time of redemption. No charge will be imposed on amounts
representing an increase in share value due to capital appreciation. The CDSC
will not be applied to shares acquired through reinvestment of income dividends
or capital gain distributions or shares held for longer than the applicable CDSC
Period. In determining which shares to redeem, unless instructed otherwise,
shares that are not subject to the CDSC and having a higher Rule 12b-1 fee will
be redeemed first, shares not subject to the CDSC having a lower Rule 12b-1 fee
will be redeemed next, and shares subject to the CDSC then will be redeemed in
the order purchased.
Each Portfolio will waive the CDSC in the event of the shareholder's death or
disability, as defined in Section 72(m)(7) of the Code (if satisfactory evidence
is provided to the Fund), and for tax-qualified retirement plans (excluding
IRAs, SEPS, 403(b) plans, and 457 plans) and each class of transaction that
qualifies for exemption from the Portfolio's FESC (see "How to Buy Portfolio
Shares--Class A Shares--Initial Sales Charge Alternative"). Shares of a
Portfolio that are acquired in exchange for shares of another Fortis fund that
were subject to a CDSC will remain subject to the CDSC that applied to the
shares of the other Fortis fund. Additionally, the CDSC will not be imposed at
the time that Portfolio shares subject to the CDSC are exchanged for shares of
Fortis Money Fund or at the time such Fortis Money Fund shares are reexchanged
for shares of any Fortis fund subject to a CDSC; provided, however, that, in
each such case, the shares acquired will remain subject to the CDSC if redeemed
within the CDSC Period.
Investors, upon notification, will provide a PRO RATA refund of any CDSC paid in
connection with a redemption of shares of any Fortis fund (by crediting such
refunded CDSC to such shareholder's account) if, within 60 days of such
redemption, all or any portion of the redemption proceeds are reinvested in
shares of the same class of any Fortis Fund. Any reinvestment within 60 days of
a redemption on which the CDSC was paid will be made without the imposition of a
FESC. Such reinvestment will be subject to the same CDSC to which such amount
was subject prior to the redemption, but the CDSC Period will run from the
original investment date.
CLASS B, H, AND C SHARES
The CDSC on Class B, H, and C shares will be calculated on an amount equal to
the lesser of the net asset value of the shares at the time of purchase or their
net asset value at the time of redemption. No charge will be imposed on amounts
representing an increase in share value due to capital appreciation. In
addition, no charge will be assessed on shares derived from reinvestment of
dividends or capital gains distributions or on shares held for longer than the
applicable CDSC Period.
Upon any request for redemption of shares of any class of shares that imposes a
CDSC, it will be assumed, unless otherwise requested, that shares subject to no
CDSC will be redeemed first in the order purchased and all remaining shares that
are subject to a CDSC will be redeemed in the order purchased. With respect to
the redemption of shares subject to no CDSC where the shareholder owns more than
one class of shares, those shares with the highest Rule 12b-1 fee will be
redeemed in full prior to any redemption of shares with a lower Rule 12b-1 fee.
The CDSC does not apply to: (1) redemption of shares when a Portfolio exercises
its right to liquidate accounts which are less than the minimum account size;
(2) death or disability, as defined in Section 72(m)(7) of the Code (if
satisfactory evidence is provided to the respective Portfolio); (3) with respect
to Class B and H shares only, an amount that represents, on an annual
(non-cumulative) basis, up to 10% of the amount (at the time of the investment)
of the shareholder's purchases; and (4) with respect to Class B, H and C shares,
qualified plan benefit distributions due to participant's separation from
service, loans or financial hardship (excluding IRAs, SEPs, and 403(b), 457, and
Fortis KEY plans) upon the Portfolio's receipt from the plan's administrator or
trustee of a signature guarantee and written instructions detailing the reason
for the distribution.
As an illustration of CDSC calculations, assume that Shareholder X purchases, on
Year 1/Day 1, 100 shares at $10 per share. Assume further that, on Year 2/Day 1,
Shareholder X
20
<PAGE>
purchased an additional 100 shares at $12 per share. Finally, assume that, on
Year 3/Day 1, Shareholder X wishes to redeem shares worth $1,300, and that the
net asset value per share as of the close of business on such day is $13. To
effect Shareholder X's redemption request, 100 shares at $13 per share (totaling
$1,300) would be redeemed. The CDSC would be waived in connection with the
redemption of that number of shares equal in value (at the time of redemption)
to $220 (10% of $1,000--the purchase amount of the shares purchased by
Shareholder X on Year 1/Day 1--plus 10% of $1,200--the purchase amount of the
shares purchased by Shareholder X on Year 2/Day 1.) In addition, no CDSC would
apply to the $400 in capital appreciation on Shareholder X's shares ($2,600 Year
3 value minus $2,200 purchase cost of shares).
If a shareholder exchanges shares subject to a CDSC for Class B, H or C shares
of a different Fortis Fund, the transaction will not be subject to a CDSC.
However, when shares acquired through the exchange are redeemed, the shareholder
will be treated as if no exchange took place for the purpose of determining the
CDSC Period and applying the CDSC.
Investors, upon notification, will provide, out of its own assets, a PRO RATA
refund of any CDSC paid in connection with a redemption of Class B, H or C
shares of a Portfolio (by crediting such refunded CDSC to such shareholder's
account) if, within 60 days of such redemption, all or any portion of the
redemption proceeds are reinvested in shares of the same class in any Fortis
Fund. Any reinvestment within 60 days of a redemption to which the CDSC was paid
will be made without the imposition of a front-end sales charge but will be
subject to the same CDSC to which such amount was subject prior to the
redemption, but the CDSC Period will run from the original investment date.
SHAREHOLDER INQUIRIES
Inquiries should be directed to your broker-dealer or sales representative, or
to the Portfolios at the telephone number or mailing address listed on the cover
of this Prospectus. A $10 fee will be charged for copies of Annual Account
Summaries older than the preceding year.
21
<PAGE>
FORTIS-Registered Trademark-
--------------------------------------------------------
ACCOUNT APPLICATION
Complete this application to open a new Fortis
account or to add services to an existing Fortis
account. For personal service, please call your
Mail to: investment professional or Fortis customer service at
FORTIS MUTUAL FUNDS 1-800-800-2638, ext. 3012.
CM-9614 DO NOT USE TO OPEN A FORTIS IRA, SEP, 403(B) OR
St. Paul, MN 55170-9614 FORTIS MONEY FUND ACCOUNT.
________________________________________________________________________________
1 ACCOUNT INFORMATION
________________________________________________________________________________
Please provide the information requested below:
/ /INDIVIDUAL: Please print your name, Social Security number, U.S. citizen
status.
/ /JOINT TENANT: List all names, one Social Security number, one U.S. citizen
status.
/ /UNIFORM GIFT/TRANSFER TO MINORS: Provide name of custodian (ONLY ONE) and
minor, minor's Social Security number, minor's U.S. citizen status and date
of birth of minor.
/ /TRUST: List trustee and trust title, including trust date, trust's Taxpayer
ID number; also include a photocopy of first page of the trust agreement.
/ /CORPORATION, ASSOCIATION, PARTNERSHIP: Include full name, Taxpayer ID number;
also include a photocopy of Articles of Incorporation, Partnership Agreement,
etc.
/ /FORTIS KEY PLAN: Include Social Security number.
/ /QUALIFIED PLAN: Include name of Plan and trustee, Plan's Taxpayer ID number.
/ / OTHER: _____________________________________________________________________
- ---------------------------------------------------------------
Owner (Individual, 1st Joint Tenant, Custodian, Trustee) (Please print)
- ------------------------------------------------------------------------
Owner (2nd Joint Tenant, Minor, Trust Name) (Please print)
- ------------------------------------------------------------------------
Additional information, if needed
- ------------------------------------------------------------------------
Street address
- ------------------------------------------------------------------------
City State Zip
- ------------------------------------------------------------------------
Social Security number (Taxpayer ID)
( )
- ---------------------------------------------------------------
Daytime phone Date of birth
(Uniform Gift/Transfer to Minors)
Date of Trust (if applicable) __________________________________________________
Are you a U.S. citizen? / / Yes / / No
If no, country of permanent residence __________________________________________
95749 (3/98)
________________________________________________________________________________
2 TRANSFER ON DEATH
________________________________________________________________________________
Please indicate the Primary Beneficiary with "PB" after the beneficiary(ies)
name(s). Indicate Contingent Beneficiary with "CB." Indicate Lineal Descendant
Per Stirpes with "LDPS" if you want ownership to pass to the legal heirs of the
primary beneficiary in the event a designated beneficiary dies before the
account owner.
TOD IS ONLY AVAILABLE FOR INDIVIDUAL AND JOINT TENANTS (JTWROS) ACCOUNTS.
BENEFICIARY(IES):
Name _____________________________ SS# _________________________________________
Name _____________________________ SS# _________________________________________
Name _____________________________ SS# _________________________________________
________________________________________________________________________________
3 INVESTMENT ACCOUNT
________________________________________________________________________________
A. PHONE ORDERS
Was order previously phoned in? If yes, date ___________________________________
Confirmation # ___________________________ Account # ___________________________
FOR PHONE ORDERS, CHECK MUST BE MADE PAYABLE TO FORTIS INVESTORS
B. MAIL-IN ORDERS
Check enclosed for $____________________________. (MADE PAYABLE TO FORTIS FUNDS)
MUST INDICATE CLASS
<TABLE>
<C> <S> <C> <C>
1) ---------- $ ----------- A / / B / / C / / H / /
Fund Name Amount or % Class
2) $ A / / B / / C / / H / /
---------- -----------
Fund Name Amount or % Class
3) $ A / / B / / C / / H / /
---------- -----------
Fund Name Amount or % Class
4) $ A / / B / / C / / H / /
---------- -----------
Fund Name Amount or % Class
5) $ A / / B / / C / / H / /
---------- -----------
Fund Name Amount or % Class
</TABLE>
________________________________________________________________________________
4 EXEMPTION FROM SALES CHARGE
________________________________________________________________________________
CHECK IF APPLICABLE (for net asset value purchases):
/ / I am a member of one of the categories of persons listed under "Exemptions
from Sales Charge" in the prospectus. I qualify for exemption from the sales
charge because ____________________________________________________________.
/ / I was (within the past 60 days) the owner of a fixed annuity contract not
deemed a security or a shareholder of an unrelated mutual fund with a
front-end and/or deferred sales charge. I have attached the mutual
fund/insurance check (or copy of the redemption confirmation/surrender
form).
<PAGE>
________________________________________________________________________________
5 SIGNATURE & CERTIFICATION
________________________________________________________________________________
I have received and read each appropriate fund prospectus and understand that
its terms are incorporated by reference into this application. I am of legal age
and legal capacity.
I understand that this application is subject to acceptance by Fortis Investors,
Inc.
I CERTIFY, UNDER PENALTIES OF PERJURY, THAT:
(1) THE SOCIAL SECURITY NUMBER OR TAXPAYER ID NUMBER PROVIDED IS CORRECT; AND
(CROSS OUT THE FOLLOWING IF NOT TRUE)
(2) THAT THE IRS HAS NEVER NOTIFIED ME THAT I AM SUBJECT TO 31% BACKUP
WITHHOLDING, OR HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO SUCH BACKUP
WITHHOLDING.
Each person signing on behalf of any entity represents that his or her actions
are authorized. It is agreed that all Fortis Funds, Fortis Investors, Fortis
Advisers and their officers, directors, agents and employees will not be liable
for any loss, liability, damage or expense for relying upon this application or
any instruction believed genuine.
IF YOU ARE NOT SIGNING AS AN INDIVIDUAL, STATE YOUR TITLE OR CAPACITY (INCLUDE
APPROPRIATE DOCUMENTS VERIFYING YOUR CAPACITY).
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF
THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP
WITHHOLDING.
AUTHORIZED SIGNATURE(S)
X
- ---------------------------------------------------------------
Owner, Custodian, Trustee Date
X
- ---------------------------------------------------------------
Joint Owner, Trustee Date
________________________________________________________________________________
6 DEALER/REPRESENTATIVE INFORMATION
________________________________________________________________________________
- --------------------------------------------------
Representative's name (please print)
- ------------------------------------------------------------------------
Name of Broker/Dealer
- ------------------------------------------------------------------------
Branch Office address
- ------------------------------------------------------------------------
Representative's signature
( )
- ------------------------------------------------------------------------
Representative's number Representative's Phone Number
- ------------------------------------------------------------------------
AUTHORIZED SIGNATURE OF BROKER/DEALER
________________________________________________________________________________
7 DISTRIBUTION OPTIONS
________________________________________________________________________________
If no option is selected, all distributions will be reinvested in the same
Fortis fund(s) selected above. Please note that distributions can only be
reinvested in the SAME CLASS.
/ / Reinvest dividends and capital gains
/ / Dividends in cash and reinvest capital gains (See Section 8 for payment
options.)
/ / Dividends and capital gains in cash (See Section 8 for payment options.)
/ / Distributions into another Fortis fund (must be SAME CLASS).
____________________________________________________________________________
Fund Name Fund/Account # (if existing account)
________________________________________________________________________________
8 WITHDRAWAL OPTIONS
________________________________________________________________________________
A. CASH DIVIDENDS
PLEASE FORWARD THE PAYMENT TO:
<TABLE>
<S> <C>
/ / My Bank. (Please complete Bank Information in
Section D, and choose one option below. Payment
will be sent via U.S. Mail if neither option is
checked.)
/ / Via U.S. Mail
/ / Via ACH (electronic transfer)
/ / My address of record.
</TABLE>
B. SYSTEMATIC WITHDRAWAL PLAN
Please consult your financial or tax adviser before electing a Systematic
Withdrawal Plan.
Please redeem shares from my Fortis ______________________________________ Fund,
account number _______________________ in the amount of $______________________.
Effective Withdrawal Date __________________________ __________________________
Month Day
<TABLE>
<S> <C> <C> <C>
FREQUENCY: / / Monthly / / Semi-Annually
/ / Quarterly / / Annually
</TABLE>
PLEASE FORWARD THE PAYMENT TO:
<TABLE>
<S> <C>
/ / My Bank. (Please complete Bank Information in
Section D, and choose one option below. Payment
will be sent via U.S. Mail if neither option is
checked.)
/ / Via U.S. Mail
/ / Via ACH (electronic transfer)
/ / My address of record.
</TABLE>
C. TELEPHONE OPTIONS
/ / TELEPHONE EXCHANGE. All exchanges must be into accounts having the identical
registration-ownership. All authorized signatures listed in Section 5 (or
your registered representative with shareholder consent) can make telephone
transfers.
/ / TELEPHONE REDEMPTION ($25,000 LIMIT AND NOT AVAILABLE FOR QUALIFIED PLANS)
If you have not changed your address in the past 60 days, you are eligible
for this service. This option allows all authorized signatures in Section 5
(or your registered representative with shareholder consent) to redeem up to
$25,000 from your Fortis account.
PLEASE FORWARD THE PAYMENT TO:
<TABLE>
<S> <C>
/ / My Bank. (Please complete Bank Information in
Section D, and choose one option below. Payment
will be sent via U.S. Mail if neither option is
checked.)
/ / Via U.S. Mail
/ / Via ACH (electronic transfer)
/ / My address of record.
</TABLE>
D. BANK INFORMATION
I request Fortis Financial Group (FFG) to pay sums due me by crediting my bank
account in the form of electronic entries. This authorization will remain in
effect until I notify FFG.
TYPE OF ACCOUNT: / / Checking / / Savings
Bank name ______________________________________________________________________
Address ________________________________________________________________________
City, State, Zip _______________________________________________________________
Name of bank account ___________________________________________________________
Bank account number ____________________________________________________________
Bank transit number ____________________________________________________________
Bank phone number ______________________________________________________________
ATTACH A VOIDED CHECK FROM YOUR BANK CHECKING ACCOUNT
<PAGE>
________________________________________________________________________________
9 SYSTEMATIC TRANSFER PROGRAM
________________________________________________________________________________
Fortis' Systematic Transfer Program allows you to transfer money from any Fortis
fund, in which you have a current balance of at least $1,000, into any other
Fortis fund (maximum of 3), on a monthly basis. The minimum amount for each
transfer is $50. Generally, transfers between funds must be within the SAME
CLASS. See prospectus for details.
- ------------------------------------------------------------------------
Fund from which shares will be exchanged: Effective Date
FUND(S) TO RECEIVE INVESTMENT(S):
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
Fund Amount to invest monthly
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
________________________________________________________________________________
10 REDUCED FRONT-END SALES CHARGES
________________________________________________________________________________
A. RIGHT OF ACCUMULATION
/ / I own shares of more than one fund in the Fortis Family of Funds, which may
entitle me to a reduced sales charge.
- ---------------------------------------------------------------
Name on account Account number
- ------------------------------------------------------------------------
Name on account Account number
- ------------------------------------------------------------------------
Name on account Account number
B. STATEMENT OF INTENT
I agree to invest $_________ over a 13-month period beginning __________, 19__
(not more than 90 days prior to this application). I understand that an
additional sales charge must be paid if I do not complete my purchase.
________________________________________________________________________________
11 PRIVILEGED ACCOUNT SERVICE
________________________________________________________________________________
Fortis' Privileged Account Service systematically rebalances your funds back to
your original specifications ($10,000 minimum per account). All funds must be
within the SAME CLASS.
Frequency: / / quarterly / / semi-annually / / annually
<TABLE>
<S> <C> <C>
Fund Selected Percentage
(up to 5) (whole %)
1)
------------------------- ---------------
2)
------------------------- ---------------
3)
------------------------- ---------------
4)
------------------------- ---------------
5)
------------------------- ---------------
</TABLE>
________________________________________________________________________________
12 SUITABILITY
________________________________________________________________________________
NOTE: Must be completed with each fund application unless you provide
suitability information to your broker/dealer on a different form.
State In Which Application Was Signed ______________________________________
- ---------------------------------------------------------------
Employer
- ---------------------------------------------------------------
Business Address
- ---------------------------------------------------------------
City, State, ZIP
- ---------------------------------------------------------------
Occupation Age (optional)
Is customer associated with or employed by another
NASD member? / / Yes / / No
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------
Please mark one box under ESTIMATED
ESTIMATED ANNUAL INCOME ESTIMATED NET
and one box under ANNUAL WORTH
ESTIMATED NET WORTH INCOME (Exclusive of
(All Sources) Family Residence)
- --------------------------------------------------------------------------------
under $10,000
- --------------------------------------------------------------------------------
$10,000 - $25,000
- --------------------------------------------------------------------------------
$25,000 - $50,000
- --------------------------------------------------------------------------------
$50,000 - $100,000
- --------------------------------------------------------------------------------
$100,000 - $500,000
- --------------------------------------------------------------------------------
$500,000 - $1,000,000
- --------------------------------------------------------------------------------
Over $1,000,000
- --------------------------------------------------------------------------------
Declined
- --------------------------------------------------------------------------------
</TABLE>
Source of Funds
- ---------------------------------------------
ESTIMATED FEDERAL TAX BRACKET
/ / 15% / / 28% / / 31% / / 36% / / 39.6% / / Declined
INVESTMENT OBJECTIVES
/ / Growth (long-term capital appreciation)
/ / Income (cash generating)
/ / Tax-free Income
/ / Diversification
/ / Other (please specify) _________________________________________
Did you use a Fortis Asset Allocation model? / / Yes / / No
________________________________________________________________________________
13 SYSTEMATIC INVESTMENT PLAN
________________________________________________________________________________
Complete the Automated Clearing House (ACH) Authorization Agreement Form in the
prospectus and attach a VOIDED check from your bank checking account. These
plans may be established for as little as $25.
________________________________________________________________________________
14 OTHER SPECIAL INSTRUCTIONS
________________________________________________________________________________
- ---------------------------------------------------------------
- ---------------------------------------------------------------
<PAGE>
FORTIS MUTUAL FUND [LOGO]
AUTOMATED CLEARING HOUSE (ACH) AUTHORIZATION AGREEMENT
Please complete each section below to establish ACH Mail to:FORTIS
capability to your Fortis Mutual Fund Account. MUTUAL FUNDS
For personal service, please call your investment P.O. Box 64284
professional or Fortis at (800) 800-2638, Ext. 3012. St. Paul, MN 55164
For investment options, complete sections (1)(2)(3). For
withdrawal, complete sections (1)(2)(4)(5).
________________________________________________________________________________
1 FORTIS ACCOUNT INFORMATION
________________________________________________________________________________
Account Registration:
________________________________________________________________________________
Owner (Individual, 1st Joint Tenant, Custodian, Trustee)
________________________________________________________________________________
Owner (2nd Joint Tenant, Minor, Trust Name)
________________________________________________________________________________
Additional Information, if needed
________________________________________________________________________________
Street address
________________________________________________________________________________
City State Zip
________________________________________ _______________________________________
Social Security number (Taxpayer I.D.) Day Time Phone
________________________________________________________________________________
2 BANK/FINANCIAL INSTITUTION INFORMATION
________________________________________________________________________________
<TABLE>
<S> <C> <C>
PLAN TYPE: / / New Plan / / Bank Change
ACCOUNT TYPE: / / Checking / / Savings
(must attach a (must attach a
voided check) deposit slip)
</TABLE>
________________________________________________________________________________
Transit Number
________________________________________________________________________________
Bank Account Number
________________________________________________________________________________
Account Owner(s) (Please Print)
________________________________________________________________________________
Depositor's Daytime Phone Number
CLEARLY PRINT THE BANK/FINANCIAL INSTITUTION'S NAME AND ADDRESS BELOW:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Signature of Depositor Date
________________________________________________________________________________
Signature of Joint-Depositor Date
________________________________________________________________________________
3 INVESTMENT OPTION(S)
________________________________________________________________________________
<TABLE>
<S> <C> <C>
I request Fortis Financial Group (FFG) to obtain payment of sums becoming due the
company by charging my account in the form of electronic debit entries. I request
and authorize the financial institution named to accept, honor and charge those
entries to my account. Please allow 30 days for collected funds to be available
in your Fortis account.
A. / / Invest via FORTIS INFORMATION LINE by phone
(minimum $25, maximum $10,000)
Please allow up to four business days for deposit into
Fortis Funds. Transactions after 3:00 p.m. (CST) will be
processed the following business day.
*Not available on tax qualified accounts such as IRA, SEP,
SARSEP and Key plans.
B. / / Systematic Investment Plan: / / New Plan / / Change Plan
C. / / Starting Draft Date:
D. / / Account Number:
</TABLE>
<TABLE>
<CAPTION>
Class Amount
Fund (Circle One) $25 per fund minimum
- ---------------------------------------------------------- -------------- -------------------------
<S> <C> <C>
A B C H
A B C H
A B C H
A B C H
</TABLE>
________________________________________________________________________________
4 WITHDRAWAL OPTION(S)
________________________________________________________________________________
<TABLE>
<S> <C> <C>
I request Fortis Financial Group (FFG) to pay sums due me by
crediting my bank account in the form of electronic entries.
I request and authorize the financial institution to accept,
honor and credit those entries to my account. Withdrawal from
Fortis Fund(s) requires account owner(s) signature(s) - see
Section 5
(Please consult your financial or tax adviser before electing
a systematic withdrawal plan. For Tax Qualified accounts,
additional forms are required for distribution.)
A. / / Cash Dividends
B. / / Redeem via FORTIS INFORMATION LINE by phone
(minimum $100, maximum $25,000)
Please allow up to four business days for
withdrawal to credit your bank account.
Transactions after 3:00 p.m. (CST) will be
processed the following business day.
*Not available on tax qualified accounts such as
IRA, SEP, SARSEP and Key plans.
C. / / Systematic Withdrawal Plan: / / New
Plan / / Change Plan
D. / / Beginning Withdrawal Date:
E. / / Account Number:
</TABLE>
<TABLE>
<CAPTION>
Class Amount
Fund (Circle One) $25 per fund minimum
- ---------------------------------------------------------- -------------- -------------------------
<S> <C> <C>
A B C H
A B C H
A B C H
A B C H
</TABLE>
________________________________________________________________________________
5 SIGNATURES
________________________________________________________________________________
Each person signing on behalf of any entity represents that his or her actions
are authorized. It is agreed that all Fortis Funds, Fortis Investors, Fortis
Advisers and their officers, directors, agents and employees will not be liable
for any loss, liability, damage or expense for relying upon this application or
any instruction believed genuine.
This authorization will remain in effect until I notify FFG. I hereby terminate
any prior Authorization of FFG to initiate charges to this account. I understand
that any returned item or redemption of the entire account may result in
termination of my Automated Clearing House agreement. This authorization will
become effective upon acceptance by FFG at its home office.
Authorized Signature(s)
X ______________________________________________________________________________
Owner, Custodian, Trustee Date
X ______________________________________________________________________________
Joint Owner, Trustee Date
[LOGO]
FORTIS FINANCIAL GROUP
Fortis Advisers, Inc. (fund management since 1949)
Fortis Investors, Inc. (principal underwriter; member SIPC)
P.O. Box 64284
St. Paul, MN 55164
(800) 800-2638
98049(8/96)
<PAGE>
FORTIS-Registered Trademark-
FORTIS FINANCIAL GROUP
P.O. BOX 64284
ST. PAUL, MN 55164
BULK RATE
U.S. POSTAGE
PAID
PERMIT NO. 3794
MINNEAPOLIS, MN
PROSPECTUS
MARCH 1, 1998
FORTIS WORLDWIDE PORTFOLIOS
96020 (REV. 3/98)
<PAGE>
FORTIS WORLDWIDE PORTFOLIOS, INC.
STATEMENT OF ADDITIONAL INFORMATION
DATED MARCH 1, 1998
Fortis Global Growth Portfolio ("Global Portfolio") and Fortis International
Equity Portfolio ("International Portfolio") (sometimes referred to individually
as a "Portfolio" and collectively as the "Portfolios") are portfolios of Fortis
Worldwide Portfolios, Inc. ("Fortis Worldwide"). This Statement of Additional
Information is NOT a prospectus, but should be read in conjunction with the
Portfolios' Prospectus dated March 1, 1998. A copy of that prospectus may be
obtained from your broker-dealer or sales representative. The address of Fortis
Investors, Inc. ("Investors") is P.O. Box 64284, St. Paul, Minnesota 55164.
Telephone: (612) 738-4000. Toll Free (800) 800-2638.
No broker-dealer, sales representative, or other person has been authorized to
give any information or to make any representations other than those contained
in this Statement of Additional Information, and if given or made, such
information or representations must not be relied upon as having been authorized
by the Portfolios or Investors. This Statement of Additional Information does
not constitute an offer or solicitation by anyone in any state in which such
offer or solicitation is not authorized, or in which the person making such
offer or solicitation is not qualified to do so, or to any person to whom it is
unlawful to make such offer or solicitation.
27
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ORGANIZATION AND CLASSIFICATION....................................... 29
INVESTMENT OBJECTIVES AND POLICIES.................................... 29
- Global Growth Portfolio......................................... 29
- International Equity Portfolio.................................. 30
- General......................................................... 30
- Variable Amount Master Demand Notes............................. 31
- Lending of Portfolio Securities................................. 31
- Portfolio Trading............................................... 31
- Commercial Bank Obligations..................................... 31
- "Roll" Transactions............................................. 31
- Options......................................................... 31
- Futures Contracts and Options on Futures Contracts.............. 32
- Forward Foreign Currency Exchange Contracts..................... 32
- Risks of Transactions in Options, Futures Contracts, and Forward
Contracts....................................................... 33
- When Issued or Delayed Delivery Transactions.................... 33
- Risk Factors.................................................... 33
DIRECTORS AND EXECUTIVE OFFICERS...................................... 35
INVESTMENT ADVISORY AND OTHER SERVICES................................ 38
- General......................................................... 38
- Control and Management of Advisers and Investors................ 38
- Investment Advisory and Management Agreement.................... 38
- Expenses........................................................ 38
- Plan of Distribution............................................ 39
- Underwriting and Distribution Agreement......................... 40
PORTFOLIO TRANSACTIONS AND ALLOCATION OF BROKERAGE.................... 40
CAPITAL STOCK......................................................... 41
COMPUTATION OF NET ASSET VALUE AND PRICING............................ 42
SPECIAL PURCHASE PLANS................................................ 42
- Statement of Intention.......................................... 42
- Tax Sheltered Retirement Plans.................................. 43
- Gifts or Transfers to Minor Children............................ 44
- Systematic Investment Plan...................................... 45
<CAPTION>
PAGE
<S> <C>
- Exchange Privilege.............................................. 45
- Reinvested Dividend/Capital Gains Distributions between Fortis
Funds........................................................... 45
- Purchases by Fortis, Inc. (or its Subsidiaries) or Associated
Persons......................................................... 45
- Purchases by Fortis Worldwide Directors or Officers............. 45
- Purchases by Representatives or Employees of Broker-Dealers..... 45
- Purchases by Certain Retirement Plans........................... 45
- Purchases by Registered Investment Companies.................... 45
- Purchases with Proceeds from Redemption of Unrelated Mutual Fund
Shares or Surrender of Certain Fixed Annuity Contracts.......... 45
- Purchases by Employees of Certain Banks and Other Financial
Services Firms.................................................. 46
- Purchases by Commercial Banks Offering Self-Directed 401(k)
Programs Containing both Pooled and Individual Investment
Options......................................................... 46
- Purchases by Investment Advisers, Trust Companies, and Bank
Trust Departments Exercising Discretionary Investment Authority
or Using a Money Management Mutual Fund "Wrap" Program.......... 46
REDEMPTION............................................................ 46
- Systematic Withdrawal Plan...................................... 46
- Reinvestment Privilege.......................................... 46
TAXATION.............................................................. 47
PERFORMANCE COMPARISONS............................................... 48
FINANCIAL STATEMENTS.................................................. 50
CUSTODIAN AND COUNSEL................................................. 50
LIMITATION OF DIRECTOR LIABILITY...................................... 50
ADDITIONAL INFORMATION................................................ 50
APPENDIX A -- CORPORATE BOND, PREFERRED STOCK, AND COMMERCIAL PAPER
RATINGS.............................................................. 51
APPENDIX B -- DESCRIPTION OF FUTURES, OPTIONS, AND FORWARD
CONTRACTS............................................................ 53
APPENDIX C -- LIST OF PUBLICATIONS.................................... 56
</TABLE>
<PAGE>
ORGANIZATION AND CLASSIFICATION
An investment company is an arrangement by which a number of persons invest in a
company that in turn invests in securities of other companies. Each Portfolio
operates as an "open-end" investment company because it generally must redeem an
investor's shares upon request.
INVESTMENT OBJECTIVES AND POLICIES
GLOBAL GROWTH PORTFOLIO
INVESTMENT OBJECTIVES
Global Portfolio's primary investment objective is long-term capital
appreciation. Current income is an incidental objective. The Portfolio seeks its
objectives by investing primarily in a portfolio of global equity securities,
allocated among diverse international markets.
INVESTMENT RESTRICTIONS
Global Portfolio is subject to the following fundamental investment
restrictions. They may be changed only by the vote of a majority of the
Portfolio's outstanding shares, which means the lesser of (i) 67% of the
Portfolio's outstanding shares present at a meeting of the holders if more than
50% of the outstanding shares are present in person or by proxy or (ii) more
than 50% of the Portfolio's outstanding shares.
Global Portfolio will not:
(1) Concentrate its investments, that is, invest 25% or more of its total
assets in any particular industry.
(2) Buy or sell commodities or commodity contracts, including futures
contracts, other than within the limitations set forth in the Prospectus and
Statement of Additional Information.
(3) Purchase or sell real estate or other interests in real estate, or
interests in real estate investment trusts; however, the Portfolio may invest in
debt securities secured by real estate or interests therein or issued by
corporations which invest in real estate or interests therein.
(4) Mortgage, pledge, hypothecate, or in any manner transfer, as security for
indebtedness, any securities owned or held by the Portfolio, provided that this
restriction shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.
(5) Act as an underwriter of securities of other issuers, except to the
extent that, in connection with the disposition of portfolio securities, the
Portfolio may be deemed an underwriter under applicable laws and except that the
Portfolio may invest up to 10% of the value of its assets (at time of
investment) in portfolio securities which are not registered under the
applicable securities laws of the country in which such securities are traded
and for which no alternative market is readily available (such securities are
referred to herein as "restricted securities").
(6) Purchase securities on margin, except that the Portfolio, in accordance
with its investment objectives and policies, may purchase securities on a
when-issued and delayed delivery basis, within the limitations set forth in the
Prospectus and Statement of Additional Information. The Portfolio may also
obtain such short-term credit as it needs for the clearance of securities
transactions and may make margin deposits in connection with futures contracts.
(7) Make short sales, except for sales "against the box." While a short sale
is made by selling a security the Portfolio does not own, a short sale is
"against the box" to the extent the Portfolio contemporaneously owns or has the
right to obtain securities identical to those sold short without payment of any
additional consideration.
(8) Make loans to other persons, except that it may purchase readily
marketable bonds, debentures, or other debt securities, whether or not publicly
distributed, enter into repurchase agreements, and make loans of portfolio
securities to an aggregate of 30% of the value of its total assets, measured at
the time any such loan is made.
(9) Issue senior securities, except that the Portfolio may purchase
securities on a when-issued and delayed delivery basis and enter into roll
transactions and other transactions within the limitations set forth in the
Prospectus and Statement of Additional Information which may be deemed to
constitute borrowing.
(10) Borrow money except from banks for temporary or emergency purposes not in
excess of 33 1/3% of the value of the Portfolio's total assets. The Portfolio
will not purchase securities while borrowings (including "roll" transactions) in
excess of 5% of total assets are outstanding. In the event that the asset
coverage for the Portfolio's borrowings falls below 300%, the Portfolio will
reduce, within three days (excluding Sundays and holidays), the amount of its
borrowings in order to provide for 300% asset coverage.
The following investment restrictions are nonfundamental and may be changed by
the Board of Directors of Fortis Worldwide (the "Board of Directors") without
shareholder approval.
Global Portfolio will not:
(1) Invest more than 15% of its net assets in illiquid securities.
(2) Enter into any options, futures, or forward contract transactions if
immediately thereafter (a) the amount of premiums paid for all options, initial
margin deposits on all futures contracts and/or options on futures contracts,
and collateral deposited with respect to forward contracts held by or entered
into by the Portfolio would exceed 5% of the value of the total assets of the
Portfolio or (b) the Portfolio's assets covering, subject to, or committed to
all options, futures, and forward contracts would exceed 20% of the value of the
total assets of the Portfolio.
29
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT OBJECTIVES
International Portfolio's primary investment objective is long-term capital
appreciation. Current income is an incidental objective. International Portfolio
seeks its objectives by investing primarily in equity securities of non-U.S.
companies.
INVESTMENT RESTRICTIONS
International Portfolio is subject to the following fundamental investment
restrictions. They may be changed only by the vote of a majority of the
Portfolio's outstanding shares, which means the lesser of (i) 67% of the
Portfolio's outstanding shares present at a meeting of the holders if more than
50% of the outstanding shares are present in person or by proxy or (ii) more
than 50% of the Portfolio's outstanding shares.
International Portfolio will not:
(1) Invest 25% or more of the value of its total assets in the securities of
issuers conducting their principal business activities in the same industry,
provided that there is no limitation with respect to investments in obligations
issued or guaranteed by the United States Government or its agencies and
instrumentalities.
(2) Purchase or sell physical commodities (such as grains, livestock, etc.)
or futures or option contracts thereon. However, the Portfolio may purchase or
sell any forms of financial instruments or contracts that might be deemed
commodities.
(3) Invest in real estate, except that the Portfolio may invest in securities
issued by companies owning real estate or interests therein.
(4) Act as an underwriter of securities of other issuers, except to the
extent that, in connection with the disposition of portfolio securities, the
Portfolio may be deemed an underwriter under applicable laws.
(5) Make loans to other persons except that it may engage in repurchase
agreements, securities lending transactions and the acquisition of debt
securities in accordance with the Prospectus and Statement of Additional
Information.
(6) Issue senior securities, except that the Portfolio may purchase
securities on a when-issued and delayed delivery basis and enter into roll
transactions and other transactions which may be deemed to constitute borrowing,
within the limitations set forth in the Prospectus and Statement of Additional
Information.
(7) Borrow money except from banks for temporary or emergency purposes not in
excess of 33 1/3% of the value of the Portfolio's total assets. Investment
securities will not be purchased for the Portfolio while outstanding bank
borrowings exceed 5% of the value of the Portfolio's total assets.
The following restrictions are nonfundamental and may be changed by the Board of
Directors without shareholder approval.
International Portfolio will not:
(1) Invest more than 15% of its net assets in illiquid securities.
(2) Enter into any options, futures, or forward contract transactions if
immediately thereafter (a) the amount of premiums paid for all options, initial
margin deposits on all futures contracts and/or options on futures contracts,
and collateral deposited with respect to forward contracts held by or entered
into by the Portfolio would exceed 5% of the value of the total assets of the
Portfolio or (b) the Portfolio's assets covering, subject to, or committed to
all options, futures, and forward contracts would exceed 20% of the value of the
total assets of the Portfolio.
Any investment policy or restriction of either Portfolio which involves a
maximum percentage of securities or assets, except those dealing with borrowing
and illiquid securities, shall not be considered to be violated unless an excess
over the percentage occurs immediately after an acquisition of securities or
utilization of assets and results therefrom.
GENERAL
In certain countries, governmental restrictions and other limitations on
investment may affect the maximum percentage of equity ownership in any one
company by a Portfolio. In some instances only special classes of securities may
be purchased by foreigners, and the market prices, liquidity, and rights with
respect to those securities may vary from shares owned by nationals. Advisers is
not aware at this time of the existence of any investment or exchange control
regulations which might substantially impair the operations of the Portfolios as
described in the Prospectus and this Statement of Additional Information.
Although restrictions may in the future make it undesirable to invest in certain
countries, Advisers does not believe that any current repatriation restrictions
would affect its decisions to invest in the countries eligible for investment by
the Portfolios. It should be noted, however, that this situation could change at
any time. The Portfolios have no present intention of making any significant
investment in any country or stock market where the political or economic
situation might be considered by Advisers to be at risk of substantial or total
loss because of such political or economic situation.
As of October 31, 1997, 85% of Global Portfolio's net assets were invested in
common stocks.
VARIABLE AMOUNT MASTER DEMAND NOTES
As noted in the Prospectus, the Portfolios may invest in variable amount master
demand notes.
Variable amount master demand notes allow the investment of fluctuating amounts
by a Portfolio at varying market rates of
30
<PAGE>
interest pursuant to arrangements between the Portfolio and a financial
institution which has lent money to a borrower. Variable amount master demand
notes permit a series of short-term borrowings under a single note. Both the
lender and the borrower have the right to reduce the amount of outstanding
indebtedness at any time. Such notes provide that the interest rate on the
amount outstanding varies on a daily basis depending upon a stated short-term
interest rate barometer. Advisers will monitor the creditworthiness of the
borrower throughout the term of the variable master demand note. It is not
generally contemplated that such instruments will be traded and there is no
secondary market for the notes. Typically, agreements relating to such notes
provide that the lender shall not sell or otherwise transfer the note without
the borrower's consent. Thus, variable amount master demand notes may under
certain circumstances be deemed illiquid assets. However, such notes will not be
considered illiquid where a Portfolio has a "same day withdrawal option," I.E.,
where it has the unconditional right to demand and receive payment in full of
the principal amount then outstanding together with interest to the date of
payment.
LENDING OF PORTFOLIO SECURITIES
For the purpose of realizing additional income, each Portfolio may make secured
loans of portfolio securities amounting to not more than 30% of its total
assets. ("Total Assets" of a Portfolio includes the amount lent as well as the
collateral securing such loans.) Securities loans are made to broker-dealers or
institutional investors pursuant to agreements requiring that the loans be
continuously secured by collateral at least equal at all times to the value of
the securities lent "marked to market" on a daily basis. The collateral received
will consist of cash, U.S. short-term government securities, bank letters of
credit or such other collateral as may be permitted under a Portfolio's
investment program and by regulatory agencies and approved by the Board of
Directors of Fortis Worldwide (the "Board of Directors"). While the securities
loan is outstanding, the Portfolio will continue to receive the equivalent of
the interest or dividends paid by the issuer on the securities, as well as
interest on the investment of the collateral or a fee from the borrower. Each
Portfolio has a right to call each loan and obtain the securities on five
business days' notice. A Portfolio will not have the right to vote equity
securities while they are being lent, but it will call in a loan in anticipation
of any important vote. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving additional
collateral or in the recovery of the securities or possible loss of rights in
the collateral should the borrower fail financially. Loans will only be made to
firms deemed by a Portfolio to be of good standing and will not be made unless,
in the judgment of the Portfolio, the consideration to be earned from such loans
would justify the risk.
PORTFOLIO TRADING
Each Portfolio intends to engage in portfolio trading when it is believed that
the sale of a security owned by the Portfolio and/ or the purchase of another
security of better value can enhance principal and/or increase income. A
security may be sold to avoid any prospective decline in market value, or a
security may be purchased in anticipation of a market rise. Although the
Portfolios do not intend generally to trade for short-term profits, the
securities in the portfolio of a Portfolio will be sold whenever management
believes it is appropriate to do so, without regard to the length of time a
particular security may have been held.
COMMERCIAL BANK OBLIGATIONS
For the purposes of the Portfolios' investment policies with respect to bank
obligations, obligations of foreign branches of U.S. banks and of foreign banks
may be obligations of the parent bank in addition to the issuing bank, or may be
limited by the terms of a specific obligation and by government regulation. As
with investment in non-U.S. securities in general, investments in the
obligations of foreign branches of U.S. banks and of foreign banks may subject
the Portfolios to investment risks that are different in some respects from
those of investments in obligations of domestic issuers. Although the Portfolios
will typically acquire obligations issued and supported by the credit of U.S. or
foreign banks having total assets at the time of purchase in excess of $1
billion, this $1 billion figure is not a fundamental investment policy or
restriction of the Portfolios. For the purposes of calculation with respect to
the $1 billion figure, the assets of a bank will be deemed to include the assets
of its U.S. and non-U.S. branches.
"ROLL" TRANSACTIONS
Each Portfolio may engage in "roll" transactions which involve the sale of
Government National Mortgage Association ("GNMA") certificates or other
securities together with a commitment to purchase similar, but not identical,
securities at a future date (for which the Portfolio may receive a fee or
purchase the securities at a price that is lower than the then-current market
value of such securities). Each Portfolio will maintain in a segregated account
with a custodian cash or liquid securities in an amount sufficient to cover its
obligations under "roll" transactions.
OPTIONS
As provided below, in order to protect against declines in the value of
Portfolio securities or increases in the costs of securities to be acquired and
in order to increase the gross income of a Portfolio, each Portfolio may enter
into transactions in options on a variety of instruments and indices. The types
of instruments to be purchased and sold are further described in the Appendix of
this Statement of Additional Information, which should be read in conjunction
with the following sections.
OPTIONS ON SECURITIES. Each Portfolio may write (sell) covered call and covered
put options and purchase call and put options on securities. Where a Portfolio
writes an option which expires unexercised or is closed out by the Portfolio at
a profit, it will retain all or a portion of the premium received for the
31
<PAGE>
option, which will increase its gross income and will offset in part the reduced
value of any Portfolio security underlying the option, or the increased cost of
Portfolio securities to be acquired. In contrast, however, if the price of the
underlying security moves adversely to the Portfolio's position, the option may
be exercised and the Portfolio will be required to purchase or sell the
underlying security at a disadvantageous price, which may only be partially
offset by the amount of the premium, if at all. The Portfolios may also write
combinations of put and call options on the same security, known as "straddles."
Such transactions can generate additional premium income but also present
increased risk.
Each Portfolio may also purchase put or call options in anticipation of market
fluctuations which may adversely affect the value of its portfolio or the prices
of securities that the Portfolio wants to purchase at a later date. In the event
that the expected market fluctuations occur, the Portfolio may be able to offset
the resulting adverse effect on its portfolio, in whole or in part, through the
options purchased. The premium paid for a put or call option plus any
transaction costs will reduce the benefit, if any, realized by a Portfolio upon
exercise or liquidation of the option, and, unless the price of the underlying
security changes sufficiently, the option may expire without value to the
Portfolio.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
FUTURES CONTRACTS. Each Portfolio may enter into interest rate futures contracts
and stock index futures contracts for hedging purposes. The Portfolios may also
enter into foreign currency futures contracts. (Unless otherwise specified,
interest rate futures contracts, stock index futures contracts and foreign
currency futures contracts are collectively referred to as "Futures Contracts.")
Purchases or sales of stock index futures contracts are used to attempt to
protect a Portfolio's current or intended stock investments from broad
fluctuations in stock prices. Interest rate and foreign currency futures
contracts are purchased or sold to attempt to hedge against the effects of
interest or exchange rate changes on a Portfolio's current or intended
investments in fixed income or foreign securities. In the event that an
anticipated decrease in the value of Portfolio securities occurs as a result of
a general stock market decline, a general increase in interest rates, or a
decline in the dollar value of foreign currencies in which Portfolio securities
are denominated, the adverse effects of such changes may be offset, in whole or
in part, by gains on the sale of Futures Contracts. Conversely, the increased
cost of Portfolio securities to be acquired, caused by a general rise in the
stock market, a general decline in interest rates, or a rise in the dollar value
of foreign currencies, may be offset, in whole or in part, by gains on Futures
Contracts purchased by the Portfolio. A Portfolio will incur brokerage fees when
it purchases and sells Futures Contracts, and it will be required to make and
maintain margin deposits.
OPTIONS ON FUTURES CONTRACTS. The Portfolios may purchase and write options to
buy or sell interest rate futures contracts. In addition, the Portfolios may
purchase and write options on stock index futures contracts, and the Portfolios
may purchase and write options on foreign currency futures contracts. (Unless
otherwise specified, options on interest rate futures contracts, options on
stock index futures contracts, and options on foreign currency futures contracts
are collectively referred to as "Options on Futures Contracts.") Such investment
strategies will be used as a hedge and not for speculation.
Put and call Options on Futures Contracts may be traded by a Portfolio in order
to protect against declines in the values of Portfolio securities or against
increases in the cost of securities to be acquired. Purchases of Options on
Futures Contracts may present less risk in hedging than the purchase or sale of
the underlying futures contracts since the potential loss is limited to the
amount of the premium plus related transaction costs. The writing of such
options, however, does not present less risk than the trading of futures
contracts and will constitute only a partial hedge, up to the amount of the
premium received, and, if an option is exercised, the respective Portfolio may
suffer a loss on the transaction.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The Portfolios may enter into contracts for the purchase or sale of a specific
currency at a future date at a price set at the time of the contract (a
"Currency Contract"). The Portfolios will enter into Currency Contracts for
hedging purposes only, in a manner similar to the Portfolios' use of foreign
currency futures contracts. These transactions will include forward purchases or
sales of foreign currencies for the purpose of protecting the dollar value of
securities denominated in a foreign currency or protecting the dollar equivalent
of interest or dividends to be paid on such securities. By entering into such
transactions, however, a Portfolio may be required to forego the benefits of
advantageous changes in exchange rates. Currency Contracts are traded
over-the-counter, and not on organized commodities or securities exchanges. As a
result, such contracts operate in a manner distinct from exchange-traded
instruments, and their use involves certain risks beyond those associated with
transactions in the futures and option contracts described above.
OPTIONS ON FOREIGN CURRENCIES. The Portfolios may purchase and write put and
call options on foreign currencies for the purpose of protecting against
declines in the dollar value of foreign portfolio securities and against
increases in the dollar cost of foreign securities to be acquired. As in the
case of other types of options, however, the writing of an option on foreign
currency will constitute only a partial hedge, up to the amount of the premium
received, and a Portfolio could be required to purchase or sell foreign
currencies at disadvantageous exchange rates, thereby incurring losses. The
purchase of an option on foreign currency may constitute an effective hedge
against fluctuations in exchange rates, although, in the event of rate movements
adverse to a Portfolio's position, it may
32
<PAGE>
forfeit the entire amount of the premium plus related transaction costs. As in
the case of Currency Contracts, certain options on foreign currencies are traded
over-the-counter and involve risks which may not be present in the case of
exchange-traded instruments.
RISKS OF TRANSACTIONS IN OPTIONS, FUTURES CONTRACTS, AND FORWARD CONTRACTS
The Portfolios will enter into transactions in Futures Contracts, Options on
Futures Contracts, Currency Contracts, and certain options solely for hedging
purposes. Their use involves certain risks. For example, a lack of correlation
between the index or instrument underlying an option or Futures Contract and the
assets being hedged or unexpected adverse price movements, could render a
Portfolio's hedging strategy unsuccessful and could result in losses. The
Portfolios also may enter into transactions in options on securities and indexes
of securities for other than hedging purposes, which involves greater risk. In
addition, there can be no assurance that a liquid secondary market will exist
for any contract purchased or sold, and a Portfolio may be required to maintain
a position until exercise or expiration, which could result in losses.
Transactions in options, Futures Contracts, Options on Futures Contracts, and
Currency Contracts may be entered into on United States exchanges regulated by
the SEC or the Commodity Futures Trading Commission, as well as in the
over-the-counter market and on foreign exchanges. In addition, the securities
underlying options and Futures Contracts traded by the Portfolios may include
domestic as well as foreign securities. Investors should recognize that
transactions involving foreign securities or foreign currencies, and
transactions entered into in foreign countries, may involve considerations and
risks not typically associated with investing in U.S. markets.
WHEN-ISSUED OR DELAYED DELIVERY TRANSACTIONS
The Portfolios may purchase or sell portfolio securities on a when-issued or
delayed delivery basis. When-issued or delayed delivery transactions arise when
securities are purchased by a Portfolio with payment and delivery to take place
in the future in order to secure what is considered to be an advantageous price
and yield to the Portfolio at the time of entering into the transaction. When a
Portfolio enters into a delayed delivery transaction it becomes obligated to
purchase securities and it has all the rights and risks attendant to ownership
of a security, although delivery and payment occur at a later date. The value of
fixed income securities to be delivered in the future will fluctuate as interest
rates vary. Each Portfolio generally has the ability to close out a purchase
obligation on or before the settlement date, rather than purchase the security.
To the extent a Portfolio engages in when-issued or delayed delivery
transactions, it will do so for the purpose of acquiring portfolio securities
consistent with the Portfolio's investment objectives and policies and not for
the purpose of investment leverage or to speculate in interest rate changes. The
Portfolios will only make commitments to purchase securities on a when-issued or
delayed delivery basis with the intention of actually acquiring the securities,
but the Portfolios reserve the right to sell these securities before the
settlement date if deemed advisable.
RISK FACTORS
POLITICAL AND ECONOMIC RISKS. Investing in securities of non-U.S. companies may
entail additional risks due to the potential political and economic instability
of certain countries and risks of expropriation, nationalization, confiscation,
or the imposition of restrictions on foreign investment and on repatriation of
capital invested. In the event of such expropriation, nationalization, or other
confiscation, by any country, a Portfolio could lose its entire investment in
any such country.
ILLIQUID SECURITIES. Each Portfolio may invest up to 15% of its net assets in
illiquid securities. Global Portfolio is subject to the additional restriction
that it may invest no more than 10% of its total assets in securities the
disposition of which may be subject to legal or contractual restrictions. See
"--Global Growth Portfolio--Investment Restrictions." The sale of restricted or
illiquid securities often requires more time and results in higher brokerage
charges or dealer discounts and other selling expenses than does the sale of
securities eligible for trading on national securities exchanges or in the
over-the-counter markets. Illiquid securities often sell at a price lower than
similar securities that are not subject to restrictions on resale.
For purposes of the investment policy limiting each Portfolio's investments in
illiquid securities to 15% of net assets, the Portfolios may invest in certain
restricted securities and treat them as liquid when they have been determined to
be liquid by the Board of Directors or by Advisers subject to the oversight of
and pursuant to procedures adopted by the Board of Directors. Under these
procedures, factors taken into account in determining the liquidity of a
security include (a) the frequency of trades and quotes for the security; (b)
the number of dealers willing to purchase or sell the security and the number of
other potential purchasers; (c) dealer undertakings to make a market in the
security; and (d) the nature of the security and the nature of the marketplace
trades (e.g., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of transfer). Securities which may be
determined to be liquid under such procedures include commercial paper issued
pursuant to the private placement exemption of Section 4(2)of the Securities Act
of 1933 (the "1933 Act") and securities that are eligible for resale under Rule
144A under the 1933 Act that have legal or contractual restrictions on resale
but have a readily available market.
FOREIGN INVESTMENT RESTRICTIONS. Certain countries prohibit or impose
substantial restrictions on investments in their capital markets, particularly
their equity markets, by foreign entities such as the Portfolios. As
illustrations, certain countries require governmental approval prior to
investments by
33
<PAGE>
foreign persons, or limit the amount of investment by foreign persons in a
particular company, or limit the investment by foreign persons to only a
specific class of securities of a company that may have less advantageous terms
than securities of the company available for purchase by nationals. Moreover,
the national policies of certain countries may restrict investment opportunities
in issuers or industries deemed sensitive to national interests. In addition,
some countries require governmental approval for the repatriation of investment
income, capital, or the proceeds of securities sales by foreign investors. A
Portfolio could be adversely affected by delays in, or a refusal to grant, any
required governmental approval for repatriation, as well as by the application
to it of other restrictions on investments.
NONUNIFORM CORPORATE DISCLOSURE STANDARDS AND GOVERNMENTAL REGULATION. Foreign
companies are not generally subject to uniform accounting, auditing, and
financial reporting standards or to other regulatory requirements comparable to
those applicable to U.S. companies. Most of the securities held by the
Portfolios will not be registered with the SEC or regulators of any foreign
country, nor will the issuers thereof be subject to the SEC's reporting
requirements. Thus, there will be less available information concerning foreign
issuers of securities held by the Portfolios than is available concerning U.S.
issuers. In instances where the financial statements of an issuer are not deemed
to reflect accurately the financial situation of the issuer, the Portfolios will
take appropriate steps to evaluate the proposed investment, which may include
on-site inspection of the issuer, interviews with its management and
consultations with accountants, bankers, and other specialists.
CURRENCY FLUCTUATIONS. Because each Portfolio under normal circumstances will
invest at least a majority of its total assets in the securities of foreign
issuers which are denominated in foreign currencies, the strength or weakness of
the U.S. dollar against such foreign currencies may account for part of each
Portfolio's investment performance. A decline in the value of any particular
currency against the U.S. dollar will cause a decline in the U.S. dollar value
of each Portfolio's holdings of securities denominated in such currency and,
therefore, will cause an overall decline in each Portfolio's net asset value and
any net investment income and capital gains to be distributed in U.S. dollars to
shareholders of such Portfolio.
The rate of exchange between the U.S. dollar and other currencies is determined
by several factors including the supply and demand for particular currencies,
central bank efforts to support particular currencies, the movement of interest
rates, the pace of business activity in certain other countries, and the U.S.,
and other economic and financial conditions affecting the world economy.
Although each Portfolio values its assets daily in terms of U.S. dollars, the
Portfolios do not intend to convert their holdings of foreign currencies into
U.S. dollars on a daily basis. The Portfolios will do so from time to time, and
investors should be aware of the costs of currency conversion. Although foreign
exchange dealers do not charge a fee for conversion, they do realize a profit
based on the difference (the "spread") between the prices at which they are
buying and selling various currencies. Thus, a dealer may offer to sell a
foreign currency to a Portfolio at one rate, while offering a lesser rate of
exchange should the Portfolio desire to sell that currency to the dealer.
ADVERSE MARKET CHARACTERISTICS. Securities of many foreign issuers may be less
liquid and their prices more volatile than securities of comparable U.S.
issuers. In addition, foreign securities exchanges and brokers are generally
subject to less governmental supervision and regulation than in the U.S., and
foreign securities exchange transactions are usually subject to fixed
commissions, which are generally higher than negotiated commissions on U.S.
transactions. In addition, foreign securities exchange transactions may be
subject to difficulties associated with the settlement of such transactions.
Delays in settlement could result in temporary periods when assets of a
Portfolio are uninvested and no return is earned thereon. The inability of a
Portfolio to make intended security purchases due to settlement problems could
cause the Portfolio to miss attractive opportunities. Inability to dispose of a
portfolio security due to settlement problems either could result in losses to a
Portfolio due to subsequent declines in value of the portfolio security or, if
the Portfolio has entered into a contract to sell the security, could result in
possible liability to the purchaser. Advisers will consider such difficulties
when determining the allocation of a Portfolio's assets, although Advisers does
not believe that such difficulties will have a material adverse effect on the
portfolio trading activities.
NON-U.S. WITHHOLDING TAXES. Each Portfolio's net investment income from foreign
issuers may be subject to non-U.S. withholding taxes, thereby reducing the
Portfolio's net investment income. See "Taxation" in the Prospectus.
34
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
The names, addresses, principal occupations, and other affiliations of directors
and executive officers of the Portfolios are given below. All positions have
been held at least five years unless otherwise stated.
<TABLE>
<CAPTION>
POSITION WITH
NAME AND ADDRESS AGE THE PORTFOLIOS PRINCIPAL OCCUPATION AND AFFILIATIONS DURING PAST 5 YEARS
- ------------------------------ --- --------------- ------------------------------------------------------------
<S> <C> <C> <C>
Richard W. Cutting 66 Director Certified public accountant and financial consultant.
137 Chapin Parkway
Buffalo, New York
Allen R. Freedman* 57 Director Chairman and Chief Executive Officer of Fortis, Inc.; a
One Chase Manhattan Plaza Managing Director of Fortis International, N. V.
New York, New York
Dr. Robert M. Gavin 57 Director President, Cranbrook Education Community. Prior to July
380 Lone Pine Road 1996, President, Macalester College, St. Paul, MN.
Bloomfield Hills, MI
Benjamin S. Jaffray 67 Director Chairman of the Sheffield Group, Ltd., a financial
4040 IDS Center consulting group.
Minneapolis, Minnesota
Jean L. King 53 Director President, Communi-King, a communications consulting firm.
12 Evergreen Lane
St. Paul, Minnesota
Dean C. Kopperud* 45 President and Chief Executive Officer and a Director of Advisers,
500 Bielenberg Drive Director President and a Director of Investors, President of Fortis
Woodbury, Minnesota Financial Group, a Director of Fortis Benefits Insurance
Company and a Senior Vice President of Time Insurance
Company.
Edward M. Mahoney 67 Director Retired. Prior to December 1994, Chairman, Chief Executive
2760 Pheasant Road Officer and a Director of Advisers and Investors, Senior
Excelsior, Minnesota Vice President and a Director of Fortis Benefits Insurance
Company, and Senior Vice President of Time Insurance
Company.
Robb L. Prince 56 Director Financial and Employee Benefit Consultant. Prior to July
5108 Duggan Plaza 1995, Vice President and Treasurer, Jostens, Inc., a
Edina, Minnesota producer of products and services for the youth, education,
sports award, and recognition markets.
Leonard J. Santow 61 Director Principal, Griggs & Santow, Incorporated, economic and
75 Wall Street financial consultants.
21st Floor
New York, New York
Noel S. Shadko 43 Director Marketing Consultant. Prior to May 1996, Senior Vice
1908 W. 49th St. President of Marketing and Strategic Planning, Rollerblade,
Minneapolis, Minnesota Inc.
Joseph M. Wikler 56 Director Investment consultant and private investor. Prior to 1994,
12520 Davan Drive Director of Research, Chief Investment Officer, Principal,
Silver Spring, Maryland and a Director, The Rothschild Co., Baltimore, MD.
Gary N. Yalen 55 Vice President President and Chief Investment Officer of Advisers (since
One Chase Manhattan Plaza 1995), a Director of Advisers and Senior Vice President,
New York, New York Investments, Fortis, Inc. Prior to 1996, President and Chief
Investment Officer, Fortis Asset Management, a former
division of Fortis, Inc.
Howard G. Hudson 60 Vice President Executive Vice President and Head of Fixed Income
One Chase Manhattan Plaza Investments of Advisers since 1995. Prior to 1996, Senior
New York, New York Vice President, Fixed Income, Fortis Asset Management.
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH
NAME AND ADDRESS AGE THE FUND PRINCIPAL OCCUPATION AND AFFILIATIONS DURING PAST 5 YEARS
- ------------------------------ --- --------------- ------------------------------------------------------------
<S> <C> <C> <C>
Lucinda S. Mezey 50 Vice President Executive Vice President and Head of Equity Investments of
One Chase Manhattan Plaza Advisers since October 1997. From 1995 to October 1997,
New York, New York Chief Investment Officer, Alex Brown Capital Advisory and
Trust Co., Baltimore, MD and prior to 1995, Senior Vice
President and Head of Equity Investments, PNC Bank,
Philadelphia, PA.
James S. Byrd 46 Vice President Executive Vice President and a Director of Advisers. Prior
5500 Wayzata Boulevard to 1995, Vice President of Advisers and of Investors.
Golden Valley, Minnesota
Nicholas L. M. de Peyster 31 Vice President Vice President of Advisers since August 1995. Prior to 1996,
One Chase Manhattan Plaza Vice President, Equities, Fortis Asset Management.
New York, New York
Diane M. Gotham 40 Vice President Vice President of Advisers since 1998. From 1994 to 1998,
5500 Wayzata Boulevard securities analyst of Advisers, and prior to 1994, systems
Golden Valley, Minnesota engineer, International Business Machines ("IBM"),
Minneapolis, MN.
Charles J. Dudley 38 Vice President Vice President of Advisers and Fortis Asset Management since
One Chase Manhattan Plaza 1995. Prior to 1995, Senior Vice President, Sun America
New York, New York Asset Management, Los Angeles, CA.
Maroun M. Hayek 49 Vice President Vice President of Advisers since 1995. Prior to 1996, Vice
One Chase Manhattan Plaza President, Fixed Income, Fortis Asset Management.
New York, New York
Robert C. Lindberg 45 Vice President Vice President of Advisers.
One Chase Manhattan Plaza
New York, New York
Charles L. Mehlhouse 55 Vice President Vice President of Advisers. Prior to March 1996, Portfolio
One Chase Manhattan Plaza Manager, Marshall & Ilsley Bank Corporation Milwaukee, WI.
New York, New York
Kevin J. Michels 46 Vice President Vice President of Advisers since 1995. Prior to 1996, Vice
One Chase Manhattan Plaza President, Administration, Fortis Asset Management.
New York, New York
Christopher J. Pagano 34 Vice President Vice President of Advisers since 1996. Prior to March 1996,
One Chase Manhattan Plaza Government Strategist, Merrill Lynch, New York, NY.
New York, New York
Stephen M. Rickert 54 Vice President Vice President of Advisers since 1995. From 1994 to 1995,
One Chase Manhattan Plaza Corporate Bond Analyst, Fortis Asset Management, and from
New York, New York 1993 to 1994, Corporate Bond Analyst, Dillion, Read & Co.,
Inc., New York, NY.
Keith R. Thomson 60 Vice President Vice President of Advisers.
5500 Wayzata Boulevard
Golden Valley, Minnesota
Christopher J. Woods 37 Vice President Vice President of Advisers since 1995. Prior to 1996, Vice
One Chase Manhattan Plaza President, Fixed Income, Fortis Asset Management.
New York, New York
Robert W. Beltz, Jr. 48 Vice President Vice President--Securities Operations of Advisers and
500 Bielenberg Drive Investors.
Woodbury, Minnesota
Peggy E. Ettestad 40 Vice President Senior Vice President, Operations of Advisers since March
500 Bielenberg Drive 1997. Prior to March 1997, Vice President, G.E. Capital
Woodbury, MN Fleet Services, Minneapolis, MN.
Dickson W. Lewis 48 Vice President Senior Vice President, Marketing and Sales of Advisors since
500 Bielenberg Drive July 1997. From 1993 to July 1997, President and Chief
Woodbury, Minnesota Executive Officer, Hedstrom/Blessing, Inc., Minneapolis, MN.
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH
NAME AND ADDRESS AGE THE FUND PRINCIPAL OCCUPATION AND AFFILIATIONS DURING PAST 5 YEARS
- ------------------------------ --- --------------- ------------------------------------------------------------
<S> <C> <C> <C>
Tamara L. Fagely 39 Vice President Second Vice President of Advisers and Investors.
500 Bielenberg Drive and Treasurer
Woodbury, Minnesota
David A. Peterson 55 Vice President Vice President and Assistant General Counsel, Fortis
500 Bielenberg Drive Benefits Insurance Company.
Woodbury, Minnesota
Scott R. Plummer 38 Vice President Vice President, Associate General Counsel and Assistant
500 Bielenberg Drive Secretary of Advisers. Prior to September 1993, Attorney,
Woodbury, Minnesota Zelle & Larson, Minneapolis, MN.
Michael J. Radmer 52 Secretary Partner, Dorsey & Whitney LLP, the Fund's General Counsel.
220 South Sixth Street
Minneapolis, Minnesota
Rhonda J. Schwartz 39 Vice President Since January 1996, Senior Vice President and General
500 Bielenberg Drive Counsel of Advisers, Senior Vice President and General
Woodbury, Minnesota Counsel, Life and Investment Products, Fortis Benefits
Insurance Company and Vice President and General Counsel,
Life and Investment Products, Time Insurance Company. From
1993 to January 1996, Vice President and General Counsel,
Fortis, Inc.
Melinda S. Urion 45 Vice President Since December 1997, Senior Vice President and Chief
500 Bielenberg Drive Financial Officer of Advisers. Prior to December 1997,
Woodbury, Minnesota Senior Vice President of Finance and Chief Financial
Officer, American Express Financial Corporation; prior to
March 1995, Corporate Controller, American Express Financial
Corporation and prior to 1994, Controller and Treasurer, IDS
Life Insurance Company, Minneapolis, MN.
</TABLE>
- -------------------------------------------
* Mr. Kopperud is an "interested person" (as defined under the 1940 Act) of
Fortis Worldwide, Advisers, and Investors primarily because he is an officer
and a director of each. Mr. Freedman is an "interested person" of Fortis
Worldwide, Advisers, and Investors because he is Chairman and Chief Executive
Officer of Fortis, Inc. ("Fortis"), the parent company of Advisers and
indirect parent company of Investors, and a Managing Director of Fortis
International, N. V., the parent company of Fortis.
- -------------------------------------------
Each director who is not affiliated with Advisers or Investors receives fees of
$100 per month, $100 per meeting attended and $100 per committee meeting
attended (and reimbursement of travel expenses to attend meetings). The
following table sets forth the aggregate compensation received by each director
during the fiscal year ended October 31, 1997, as well as the total compensation
received by each director from Fortis Worldwide and all other investment
companies managed by Advisers during the calendar year ended December 31, 1997.
Neither Mr. Freedman, who is an officer of the parent company of Advisers, nor
Mr. Kopperud, who is an officer of Advisers and Investors, received any such
compensation. No executive officer received any compensation from Fortis
Worldwide. During the fiscal year ended October 31, 1997, Global Portfolio paid
legal fees and expenses of $1,183 to a law firm of which Fortis Worldwide's
Secretary is a partner.
<TABLE>
<CAPTION>
TOTAL
AGGREGATE COMPENSATION FROM
COMPENSATION FROM FUND COMPLEX PAID
DIRECTOR THE FUND TO DIRECTOR *
- ----------------------- ----------------- -----------------
<S> <C> <C>
Richard W. Cutting..... $ 1,800 $ 31,200
Dr. Robert M. Gavin.... $ 1,800 $ 31,200
Benjamin S. Jaffray.... $ 1,700 $ 24,300
Jean L. King........... $ 1,700 $ 32,200
Edward M. Mahoney...... $ 1,800 $ 31,200
Robb L. Prince......... $ 1,800 $ 33,200
Leonard J. Santow...... $ 1,700 $ 30,200
Noel S. Shadko......... $ 1,800 $ 22,200
Joseph M. Wikler....... $ 1,800 $ 31,200
</TABLE>
- ------------------------
* The Fund Complex consists of 10 registered investment companies managed by
Advisers. All of the above officers and directors are also officers and/or
directors of each such open-end and closed-end investment company.
As of January 31, 1998, the directors and executive officers beneficially owned
less than 1% of the outstanding shares of each Portfolio. Directors Gavin,
Jaffray, Kopperud, Mahoney, Shadko and Prince are members of the Executive
Committee of the Board of Directors. While the Executive Committee is authorized
to act in the intervals between regular board meetings with full capacity and
authority of the full Board of Directors, except as limited by law, it is
expected that the Committee will meet at least twice a year.
37
<PAGE>
INVESTMENT ADVISORY AND OTHER
SERVICES
GENERAL
Fortis Advisers, Inc. ("Advisers") has been the investment adviser and manager
of each Portfolio since inception. Fortis Investors, Inc. ("Investors") acts as
the Portfolios' underwriter. Each acts pursuant to written agreements
periodically approved by the directors or shareholders. The address of each is
that of the Portfolios.
As of December 31, 1997, Advisers managed 30 investment company portfolios with
combined net assets of approximately $5,498,000,000, and one private account
with net assets of approximately $23,763,000.
CONTROL AND MANAGEMENT OF ADVISERS AND INVESTORS
Fortis owns 100% of the outstanding voting securities of Advisers, and Advisers
owns all of the outstanding voting securities of Investors.
Fortis, located in New York, New York, is a wholly owned subsidiary of Fortis
International, N.V., which has approximately $160 billion in assets worldwide
and is in turn a wholly owned subsidiary of AMEV/VSB 1990 N.V. ("AMEV/VSB
1990").
AMEV/VSB 1990 is a corporation organized under the laws of The Netherlands to
serve as the holding company for all U.S. operations and is owned 50% by Fortis
AMEV and 50% by Fortis AG. AMEV/VSB 1990 owns a group of companies active in
insurance, banking and financial services, and real estate development in The
Netherlands, the United States, Western Europe, Australia, and New Zealand.
Fortis AMEV is a diversified financial services company headquartered in
Utrecht, The Netherlands, where its insurance operations began in 1847. Fortis
AG is a diversified financial services company headquartered in Brussels,
Belgium, where its insurance operations began in 1824. Fortis AMEV and Fortis AG
own a group of companies (of which AMEV/VSB 1990 is one) active in insurance,
banking and financial services, and real estate development in The Netherlands,
Belgium, the United States, Western Europe, and the Pacific Rim.
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
Advisers acts as investment adviser and manager of the Portfolios under an
Investment Advisory and Management Agreement (the "Agreement"). The Agreement
will terminate automatically in the event of its assignment. In addition, the
Agreement is terminable at any time, without penalty, by the Board of Directors
or, with respect to any particular portfolio, by vote of a majority of the
outstanding voting securities of the applicable portfolio, on not more than 60
days' written notice to Advisers, and by Advisers on 60 days' notice to Fortis
Worldwide. Unless sooner terminated, the Agreement shall continue in effect for
more than two years after its execution only so long as such continuance is
specifically approved at least annually by either the Board of Directors or,
with respect to any particular portfolio, by vote of a majority of the
outstanding voting securities of the applicable portfolio, provided that in
either event such continuance is also approved by the vote of a majority of the
directors who are not parties to the Agreement, or interested persons of such
parties, cast in person at a meeting called for the purpose of voting on such
approval.
The Agreement provides for an investment advisory and management fee paid by
each Portfolio calculated as described in the following table.
<TABLE>
<CAPTION>
ANNUAL INVESTMENT ADVISORY
AVERAGE NET ASSETS AND MANAGEMENT FEE
- ----------------------------------- --------------------------
<S> <C>
For the first $500 million......... 1.0%
For assets over $500 million....... .9%
</TABLE>
The Agreement requires each Portfolio to pay all of its expenses that are not
expressly assumed by Advisers or Investors. These expenses include, among
others, the investment advisory and management fee, the fees and expenses of
directors and officers of Fortis Worldwide who are not "affiliated persons" of
Advisers, Plan of Distribution fees, interest expense, taxes, brokerage fees and
commissions, fees and expenses of registering and qualifying Fortis Worldwide
and its shares for distribution under Federal and state securities laws,
expenses of preparing prospectuses and of printing and distributing prospectuses
annually to existing shareholders, custodian charges, auditing and legal
expenses, insurance expenses, association membership dues, and the expense of
reports to shareholders, shareholders meetings, and proxy solicitations.
Although investment decisions for each Portfolio are made independently from
those of the other portfolios, funds, or private accounts managed by Advisers,
sometimes the same security is suitable for more than one portfolio, fund, or
account. If and when two or more portfolios, funds, or accounts simultaneously
purchase or sell the same security, the transactions will be allocated as to
price and amount in accordance with arrangements deemed equitable by Advisers to
each portfolio, fund, or account. The simultaneous purchase or sale of the same
securities by a Portfolio and another portfolio, fund, or account may have a
detrimental effect on the Portfolio as this may affect the price paid or
received by the Portfolio or the size of the position obtainable by the
Portfolio.
During the fiscal years ended October 31, 1997, 1996 and 1995, Global Portfolio
paid advisory and management fees in the amount of $1,480,162, $979,766 and
$595,572, respectively. International Portfolio had not commenced operations as
of October 31, 1997.
EXPENSES
Advisers bears the costs of acting as the Portfolios' transfer agent, registrar,
and dividend agent. Under the Agreement, Advisers, as investment adviser to the
Portfolios, has the sole authority and responsibility to make and execute
investment
38
<PAGE>
decisions for the applicable Portfolio within the framework of such Portfolio's
investment policies, subject to review by the Board of Directors. Advisers also
furnishes the Portfolios with all required management services, facilities,
equipment, and personnel.
Expenses that relate exclusively to a particular Portfolio, such as custodian
charges and registration fees for shares, are charged to that Portfolio. Other
expenses are allocated between the Portfolios in an equitable manner as
determined by officers of Fortis Worldwide under the supervision of the Board of
Directors, usually on the basis of net assets or number of accounts.
PLAN OF DISTRIBUTION
Fortis Worldwide has adopted a plan pursuant to Rule 12b-1 under the 1940 Act.
Rule 12b-1(b) provides that any payments made by a Portfolio in connection with
financing the distribution of its shares may only be made pursuant to a written
plan describing all aspects of the proposed financing of distribution, and also
requires that all agreements with any person relating to the implementation of
the plan must be in writing. In addition, Rule 12b-1(b)(1) requires that such
plan be approved by a majority of the applicable Portfolio's outstanding shares,
and Rule 12b-1(b)(1) requires that such plan, together with any related
agreements, be approved by a vote of the Board of Directors who are not
interested persons of the applicable Portfolio and have no direct or indirect
interest in the operation of the plan or in the agreements related to the plan,
cast in person at a meeting called for the purpose of voting on such plan or
agreement. Rule 12b-1(b)(3) requires that the plan or agreement provide in
substance:
(i) That it shall continue in effect for a period of more than one year from
the date of its execution or adoption only so long as such continuance is
specifically approved at least annually in the manner described in paragraph
(b)(2) of Rule 12b-1;
(ii) That any person authorized to direct the disposition of monies paid or
payable by the applicable Portfolio pursuant to the plan or any related
agreement shall provide to the Board of Directors, and the directors shall
review, at least quarterly, a written report of the amounts so expended and the
purpose for which such expenditures were made; and
(iii) In the case of a plan, that it may be terminated at any time by vote of
a majority of the members of the Board of Directors who are not interested
persons of the applicable Portfolio and have no direct or indirect financial
interest in the
operation of the plan, or in any agreements related to the plan or by vote of a
majority of the outstanding voting securities of the Portfolio.
Rule 12b-1(b)(4) requires that such plans may not be amended to increase
materially the amount to be spent for distribution without shareholder approval
and that all material amendments of the plan must be approved in the manner
described in paragraph (b)(2) of Rule 12b-1.
Rule 12b-1(c) provides that the Portfolios may rely on Rule 12b-1(b) only if the
selection and nomination of the disinterested directors of Fortis Worldwide are
committed to the discretion of such disinterested directors. Rule 12b-1(e)
provides that the Portfolios may implement or continue a plan pursuant to Rule
12b-1(b) only if the directors who vote to approve such implementation or
continuation conclude, in the exercise of reasonable business judgment and in
light of their fiduciary duties under state law, and under Section 26(a) and (b)
of the Investment Company Act of 1940, that there is a reasonable likelihood
that the plan will benefit the Portfolios and their shareholders.
Pursuant to the provisions of the Distribution Plan, each Portfolio pays
Investors a monthly fee at an annual rate of .25% of each Portfolio's average
daily net assets attributable to Class A shares and 1.00% of each Portfolio's
average daily net assets attributable to Class B, H and C shares. Such fees are
paid in connection with servicing of the shareholder accounts and in connection
with distribution-related services provided with respect to the Portfolios.
A portion of each Portfolio's total fee is paid as a distribution fee and will
be used by Investors to cover expenses that are primarily intended to result in,
or that are primarily attributable to, the sale of shares of a Portfolio
("Distribution Fees"), and the remaining portion of the fee is paid as a
shareholder servicing fee and will be used by Investors to provide compensation
for ongoing servicing and/or maintenance of shareholder accounts ("Shareholder
Servicing Fees"). For the Class A shares, the entire fee of .25% is designated
as a Distribution Fee. For the Class B, Class C and Class H shares, Investors
receives a total fee of 1.00% of the average daily net assets of each such
class, of which .75% is designated as a Distribution Fee and .25% is designated
as a Shareholder Servicing Fee.
Distribution Fees under the Plan include, but are not limited to, initial and
ongoing sales compensation (in addition to sales charges) paid to registered
representatives of Investors and to other broker-dealers; expenses incurred in
the printing of prospectuses, statements of additional information and reports
used for sales purposes; expenses of preparation and distribution of sales
literature; expenses of advertising of any type; an allocation of Investors'
overhead; and payments to and expenses of persons who provide support services
in connection with the distribution of Portfolio shares. Shareholder Servicing
Fees include all expenses of Investors incurred in connection with providing
administrative or accounting services to shareholders, including, but not
limited to, an allocation of Investors' overhead and payments made to persons,
including employees of Investors, who respond to inquiries of shareholders,
regarding their ownership of shares or their accounts with the Portfolios, or
who provide other administrative or accounting services not otherwise required
to be provided by Advisers.
39
<PAGE>
Total distribution fees paid by Global Portfolio for the fiscal year ended
October 31, 1997 and how those fees were used by Investors are:
<TABLE>
<S> <C>
Advertising............................ $ 3,500
Printing and Mailing of Prospectuses to
Other Than Current Shareholders....... 46,663
Compensation to Underwriters........... 418,214
Compensation to Dealers................ -0-
Compensation to Sales Personnel........ -0-
Interest, Carrying or Other Financing
Charges............................... -0-
Other (distribution-related
compensation sales literature,
supplies, postage, toll-free phone)... 114,906
-----------
Total.................................. $ 583,283
-----------
-----------
</TABLE>
International Portfolio was not in existence during this time.
UNDERWRITING AND DISTRIBUTION AGREEMENT
Pursuant to the Underwriting and Distribution Agreement, Investors has agreed to
act as the principal underwriter in the sale and distribution to the public of
shares of the Portfolios, either through dealers or otherwise. Investors has
agreed to offer such shares for sale at all times when such shares are available
for sale and may lawfully be offered for sale and sold. As compensation for its
services, in addition to receiving its distribution fees pursuant to the
Distribution Plan discussed above, Investors receives the sales load on sales of
Portfolio shares as set forth in the Prospectus.
The following table sets forth the aggregate dollar amount of underwriting
commissions paid by Global Portfolio for the fiscal years ended October 31,
1995, 1996 and 1997 and the amount of such commissions retained by Investors.
<TABLE>
<CAPTION>
UNDERWRITING COMMISSIONS RETAINED BY
TOTAL UNDERWRITING COMMISSIONS DISTRIBUTOR
- ------------------------------------- -------------------------------------
FISCAL FISCAL FISCAL FISCAL FISCAL FISCAL
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/95 10/31/96 10/31/97 10/31/95 10/31/96 10/31/97
- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ 368,850 $ 731,047 $ 679,460 $ 83,854 $ 137,087 $ 171,323
</TABLE>
International Portfolio was not in existence during this time.
PORTFOLIO TRANSACTIONS AND
ALLOCATION OF BROKERAGE
Transactions on a stock exchange in equity securities will be executed primarily
through brokers that will receive a commission paid by the Portfolios. Fixed
income securities, as well as equity securities traded in the over-the-counter
market, are generally traded on a "net" basis with dealers acting as principals
for their own accounts without a stated commission, although the price of the
security usually includes a profit to the dealer. In underwritten offerings,
securities are purchased at a fixed price that includes an amount of
compensation to the underwriter, generally referred to as the underwriter's
concession or discount. Certain of these securities may also be purchased
directly from the issuer, in which case neither commissions nor discounts are
paid.
Advisers selects and (where applicable) negotiates commissions with the
broker-dealers who execute the transactions for the Portfolios. The primary
criterion for the selection of a broker-dealer is the ability of the
broker-dealer, in the opinion of Advisers, to secure prompt execution of the
transactions on favorable terms, including the reasonableness of the commission
and considering the state of the market at the time. When consistent with these
objectives, business may be placed with broker-dealers who furnish investment
research or services to Advisers. Such research or services include advice, both
directly and in writing, as to the value of securities; the advisability of
investing in, purchasing or selling securities; and the availability of
securities, or purchasers or sellers of securities; as well as analyses and
reports concerning issues, industries, securities, economic factors and trends,
portfolio strategy, and the performance of accounts. This allows Advisers to
supplement its own investment research activities and enables Advisers to obtain
the views and information of individuals and research staffs of many different
securities firms prior to making investment decisions for the Portfolios. To the
extent portfolio transactions are effected with broker-dealers who furnish
research services to Advisers, Advisers receives a benefit, not capable of
valuation in dollar amounts, without providing any direct monetary benefit to
the Portfolios from these transactions. Advisers believes that most research
services obtained by it generally benefit several or all of the investment
companies and private accounts which it manages, as opposed to solely benefiting
one specific managed fund or account. Normally, research services obtained
through managed funds or accounts investing in common stocks would primarily
benefit the managed funds or accounts which invest in common stock; similarly,
services obtained from transactions in fixed income securities would normally be
of greater benefit to the managed funds or accounts which invest in debt
securities.
Advisers has not entered into any formal or informal agreements with any
broker-dealers, nor does it maintain any "formula" which must be followed in
connection with the placement of portfolio transactions of a Portfolio in
exchange for research services provided Advisers, except as noted below.
However, Advisers does maintain an informal list of broker-dealers, which is
used from time to time as a general guide in the placement of Portfolio
business, in order to encourage certain broker-dealers to provide Advisers with
research services which Advisers anticipates will be useful to it. Because the
list is merely a general guide, which is to be used only after the primary
criterion for the selection of broker-dealers (discussed above) has been met,
substantial deviations from the list are permissible and may be expected to
occur. Advisers will authorize the Portfolios to pay an amount of commission for
effecting a securities transaction in excess of the amount of commission another
broker-dealer would have charged only if Advisers determines in good faith that
such amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker-dealer, viewed in terms
of either that particular transaction or Advisers' overall responsibilities with
respect to the accounts as to which it exercises investment discretion.
Generally, the Portfolios pay higher than the lowest commission rates available.
40
<PAGE>
The Portfolios contemplate purchasing most foreign equity securities in
over-the-counter markets or stock exchanges located in the countries in which
the respective principal offices of the issuers of the various securities are
located, if that is the best available market. The fixed commissions paid in
connection with most such foreign stock transactions generally are higher than
negotiated commissions on United States transactions. There generally is less
government supervision and regulation of foreign stock exchanges and brokers
than in the United States. Foreign security settlements may in some instances be
subject to delays and related administrative uncertainties.
Foreign equity securities may be held by a Portfolio in the form of American
Depository Receipts ("ADRs"), European Depository Receipts ("EDRs," which are
sometimes referred to as Continental Depository Receipts or "CDRs"), or
securities convertible into foreign equity securities. ADRs or EDRs may be
listed on stock exchanges, or traded in the over-the-counter markets in the
United States or Europe, as the case may be. ADRs, like other securities traded
in the United States, will be subject to negotiated commission rates. The
foreign and domestic debt securities and money market instruments in which the
Funds may invest are generally traded in the over-the-counter markets.
Global Portfolio paid brokerage commissions of $205,035, $102,005 and $97,159
for the fiscal years ended October 31, 1997, 1996 and 1995, respectively.
International Portfolio had not commenced operations as of October 31, 1997.
During the fiscal year ended October 31, 1997, virtually all of the $205,035
paid by Global Portfolio in connection with transactions having an aggregate
dollar value of approximately $61,980,090 was paid to broker-dealers who
furnished investment research to Advisers, as outlined above.
The Portfolios will not effect any brokerage transactions in their portfolio
securities with any broker-dealer affiliated directly or indirectly with
Advisers, unless such transactions, including the frequency thereof, the receipt
of commissions payable in connection therewith, and the selection of the
affiliated broker-dealer effecting such transactions are not unfair or
unreasonable to the shareholders of the applicable Portfolio. No commissions
were paid to any affiliate of Advisers during the fiscal years ended October 31,
1997, 1996 and 1995.
From time to time, the Portfolios may acquire the securities of their regular
brokers or dealers or parent companies of such brokers or dealers. Global
Portfolio purchased securities issued by U.S. Bank National Association and held
$6,143,000 of such securities at the end of the fiscal year ended October 31,
1997. International Portfolio had not commenced operations as of October 31,
1997.
Advisers has developed written trade allocation procedures for its management of
the securities trading activities of its clients. Advisers manages multiple
portfolios, both public (mutual funds) and private. The purpose of the trade
allocation procedures is to treat the portfolios fairly and reasonably in
situations where the amount of a security that is available is insufficient to
satisfy the volume or price requirements of each portfolio that is interested in
purchasing that security.
Generally, when the amount of securities available in a public offering or the
secondary market is insufficient to satisfy the requirements for the interested
portfolios, the procedures require a pro rata allocation based upon the amounts
initially requested by each portfolio manager. In allocating trades made on
combined basis, Advisers seeks to achieve the average price of the securities
for each participating portfolio.
Because a pro rata allocation may not always adequately accommodate all facts
and circumstances, the procedures provide for exceptions to allocate trades on a
basis other than pro rata. Examples of where adjustments may be made include:
(i) the cash position of the portfolios involved in the transaction; and (ii)
the relative importance of the security to a portfolio in seeking to achieve its
investment objective.
CAPITAL STOCK
Each Portfolio's shares have a par value of $.01 per share and equal rights to
share in dividends and assets. The shares possess no preemptive or conversion
rights.
On January 31, 1998, Global Portfolio had outstanding Class A shares, Class B
shares, Class C shares, and Class H shares. On that date, no person owned of
record or, to Fortis Worldwide's knowledge, beneficially as much as 5% of the
outstanding shares of any class of the Portfolio. As of January 15, 1998,
International Portfolio had no outstanding shares.
The Portfolios currently offer their shares in four classes, each with different
sales arrangements and bearing different expenses. Under Fortis Worldwide's
Articles of Incorporation, the Board of Directors is authorized to create new
portfolios or classes without the approval of the shareholders of the
Portfolios. Each share will have a pro rata interest in the assets of the Fortis
Worldwide portfolios to which the shares of that series relate and will have no
interest in the assets of any other Fortis Worldwide portfolio. In the event of
liquidation, each share of a Fortis Worldwide portfolio would have the same
rights to dividends and assets as every other share of that Fortis Worldwide
portfolio, except that, in the case of a series with more than one class of
shares, such distributions will be adjusted to appropriately reflect any charges
and expenses borne by each individual class.
Cumulative voting is not authorized. This means that the holders of more than
50% of the shares voting for the election
41
<PAGE>
of directors can elect 100% of the directors if they choose to do so, and in
such event the holders of the remaining shares will be unable to elect any
directors.
Minnesota corporation law provides for the Board of Directors to convene
shareholder meetings when it deems appropriate. Therefore, Fortis Worldwide is
not required to hold annual or periodically scheduled regular shareholder
meetings. In addition, if a regular meeting of shareholders has not been held
during the immediately preceding fifteen months, a shareholder or shareholders
holding three percent or more of the voting shares of Fortis Worldwide may
demand a regular meeting of shareholders by written notice of demand given to
the chief executive officer or the chief financial officer of Fortis Worldwide.
Within ninety days after receipt of the demand, a regular meeting of
shareholders must be held at Fortis Worldwide's expense. Additionally, the 1940
Act requires shareholder votes for all amendments to fundamental investment
policies and restrictions, for all amendments to investment advisory contracts
and for certain amendments to Rule 12b-1 distribution plans.
COMPUTATION OF NET ASSET VALUE AND PRICING
GLOBAL GROWTH PORTFOLIO
On October 31, 1997, Global Portfolio's net asset value was calculated as
follows:
CLASS A
Net Assets ($125,268,273)
- ------------------------ = Net Asset Value Per Share ($23.92)
Shares Outstanding (5,237,194)
To obtain the public offering price per share for Class A shares, the 4.75%
sales charge had to be added to the net asset value obtained above:
$23.92
---- = Public Offering Price Per Share ($25.11)
.9525
CLASS B
Net Assets ($11,446,435)
- ------------------------ = Net Asset Value Per Share ($23.42)
Shares Outstanding (488,847)
CLASS H
Net Assets ($18,689,707)
- ------------------------ = Net Asset Value Per Share ($23.42)
Shares Outstanding (797,985)
CLASS C
Net Assets ($4,664,258)
- ------------------------ = Net Asset Value Per Share ($23.43)
Shares Outstanding (199,053)
INTERNATIONAL EQUITY PORTFOLIO
On October 31, 1997, International Portfolio had not commenced operations, and
therefore had no assets.
The primary close of trading of the New York Stock Exchange (the "Exchange")
currently is 3:00 P.M. (Central Time), but this time may be changed. The
offering price for purchase orders received in the office of the applicable
Portfolio after the beginning of each day the Exchange is open for trading is
based on net asset value determined as of the primary closing time for business
on the Exchange that day; the price in effect for orders received after such
close is based on the net asset value as of such close of the Exchange on the
next day the Exchange is open for trading.
Generally, the net asset value of each Portfolio's shares is determined on each
day on which the Exchange is open for business. The Exchange is not open for
business on the following holidays (or on the nearest Monday or Friday if the
holiday falls on a weekend): New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day. Additionally, the net asset value of a
Portfolio's shares need not be determined (i) on days on which changes in the
value of the portfolio securities of the Portfolio will not materially affect
the current net asset value of the Portfolio's shares or (ii) on days during
which no shares of the Portfolio are tendered for redemption and no orders to
purchase or sell the Portfolio's shares are received by a Portfolio.
SPECIAL PURCHASE PLANS
The Portfolios offer several special purchase plans, described in the
Prospectus, which allow reduction or elimination of the sales charge for Class A
shares under certain circumstances. Additional information regarding some of the
plans is as follows:
STATEMENT OF INTENTION
The 13-month period is measured from the date the letter of intent is approved
by Investors, or at the purchaser's option it may be made retroactive 90 days,
in which case Investors will make appropriate adjustments on purchases during
the 90-day period.
In computing the total amount purchased for purposes of determining the
applicable sales commission, the public offering price (at the time they were
purchased) of shares currently held in the Fortis Funds having a sales charge
and purchased within the past 90 days may be used as a credit toward Portfolio
shares to be purchased under the Statement of Intention. Any such shares
purchased during the remainder of the 13-month period also may be included as
purchases made under the Statement of Intention.
The Statement of Intention includes a provision for payment of additional
applicable sales charges at the end of the period in the event the investor
fails to purchase the amount indicated. This is accomplished by holding in
escrow the number of shares represented by the sales charge discount. If the
investor's purchases equal those specified in the Statement of Intention, the
escrow is released. If the purchases do not equal those specified in the
Statement of Intention, the shareholder
42
<PAGE>
may remit to Investors an amount equal to the difference between the dollar
amount of sales charges actually paid and the amount of sales charges that would
have been paid on the aggregate purchases if the total of such purchases had
been made at a single time. If the purchaser does not remit this sum to
Investors on a timely basis, Investors will redeem the escrowed shares. The
Statement of Intention is not a binding obligation on the part of the investor
to purchase, or the Portfolio to sell, the full amount indicated. Nevertheless,
the Statement of Intention should be read carefully before it is signed.
TAX SHELTERED RETIREMENT PLANS
IRAS AND TAX QUALIFIED RETIREMENT PLANS. Individual taxpayers can defer taxes on
current income by investing in certain tax qualified retirement plans
established by their employers or Individual Retirement Accounts (IRAs) for
retirement. lRAs may be opened by anyone who has earned compensation for
services rendered. Certain reductions in sales charges set forth under "How to
Buy Portfolio Shares" in the Prospectus are available to any organized group of
individuals desiring to establish IRAs for the benefit of its members. If you
are interested in one of these accounts, contact Investors for copies of our
plans. You should check with your tax adviser before investing.
TRADITIONAL IRA. Under current Federal tax law, IRA depositors generally may
contribute 100% of their earned income up to a maximum of $2,000 (including
sales charge). Contributions up to $2,000 (including sales charge) can be made
to IRA accounts for both an individual and a nonemployed spouse. All
shareholders who, along with their spouse, are not active participants in an
employer sponsored retirement plan or who have adjusted gross income below a
specified level can deduct such contributions (there is a partial deduction for
higher income levels up to a specified amount) from taxable income so that taxes
are put off until retirement, when reduced overall income and added deductions
may result in a lower tax rate. There are penalty taxes for withdrawing this
retirement money before reaching age 59 1/2 (unless the investor dies, is
disabled, or withdraws equal installments over a lifetime). In addition, there
are penalties on insufficient payouts after age 70 1/2, excess contributions,
and excess distributions.
ROTH IRA. For tax years beginning January 1, 1998, a new type of IRA, called
the Roth IRA will be available. Roth IRAs are different from traditional IRAs in
that contributions are never tax deductible and earnings on amounts held in the
account can be withdrawn tax-free if the funds remain in the IRA for at least 5
years and the IRA holder is at least 591/2 at the time of the withdrawal. The
ability to make a contribution to a Roth IRA is phased out for individuals whose
incomes exceed specific limits.
EDUCATION IRA. For tax years beginning January 1, 1998, individuals can also
establish an IRA to be used for the education expenses of a child. Contributions
are limited to $500 per child per year and are not deductible when made.
Earnings on amounts held in the account can be withdrawn tax-free provided they
are used for undergraduate or graduate education expenses of the child before
the child reaches age 30. The ability to make a contribution to an Education IRA
is phased out for individuals whose incomes exceed specific limits.
The Portfolios may advertise the number or percentage of their shareholders, or
the amount or percentage of their assets, which are invested in retirement
accounts or in any particular type of retirement account. Such figures also may
be given on an aggregate basis for all of the funds managed by Advisers. Any
retirement plan numbers may be compared to appropriate industry averages.
TAX SAVINGS AND YOUR IRA--A FULLY TAXABLE INVESTMENT COMPARED TO AN INVESTMENT
THROUGH AN IRA
The following table shows the yield on an investment of $2,000 made at the
beginning of each year for a period of 10 years and a period of 20 years. For
illustrative purposes only, the table assumes an annual rate of return of 8%.
<TABLE>
<CAPTION>
FULLY FULLY PARTIALLY
TAXABLE DEDUCTIBLE DEDUCTIBLE NON-DEDUCTIBLE
INVESTMENT IRA* IRA** IRA*
----------- ----------- ----------- ---------------
<S> <C> <C> <C> <C>
10 years - 15% $ 24,799 $ 31,291 $ 28,944 $ 26,597
Federal tax
bracket
10 years - 28% $ 19,785 $ 31,291 $ 26,910 $ 22,530
Federal tax
bracket
10 years - 31% $ 18,702 $ 31,291 $ 26,441 $ 21,591
Federal tax
bracket
10 years - 36% $ 16,957 $ 31,291 $ 25,659 $ 20,026
Federal tax
bracket
10 years - 39.6% $ 15,744 $ 31,291 $ 25,095 $ 18,900
Federal tax
bracket
20 years - 15% $ 72,515 $ 98,846 $ 91,432 $ 84,019
Federal tax
bracket
20 years - 28% $ 54,236 $ 98,846 $ 85,007 $ 71,169
Federal tax
bracket
20 years - 31% $ 50,526 $ 98,846 $ 83,525 $ 68,204
Federal tax
bracket
20 years - 36% $ 44,722 $ 98,846 $ 81,054 $ 63,261
Federal tax
bracket
20 years - 39.6% $ 40,820 $ 98,846 $ 79,274 $ 59,703
Federal tax
bracket
</TABLE>
- ------------------------
* It is assumed that tax on income earned on the IRA is deferred.
43
<PAGE>
** It is assumed that half of the contribution each year is tax deductible and
tax on income earned in the IRA is deferred.
The table reflects only Federal income tax rates for 1998, and not any state or
local income taxes.
The 15% Federal income tax rate applies to taxable income up to and including
$42,350 for married couples filing jointly and $25,350 for unmarried
individuals. The 28% Federal income tax rate applies to taxable income from
$42,350 to $102,300 for married couples filing jointly and to taxable income
from $25,350 to $61,400 for unmarried individuals. The 31% Federal income tax
rate applies to taxable income from $102,300 to $155,950 for married couples
filing jointly and to taxable income from $61,400 to $128,100 for unmarried
individuals. The 36% Federal income tax rate applies to taxable income from
$155,950 to $278,450 for married couples filing jointly and to taxable income
from $128,100 to $278,450 for unmarried individuals. The 39.6% Federal income
tax rate applies to taxable income above $278,450 for both. (Although the above
table reflects the nominal Federal tax rates, the effective Federal tax rates
exceed those rates for certain taxpayers because of the phase-out of personal
exemptions and the partial disallowance of itemized deductions for taxpayers
above certain income levels.)
- ----------------------------------------------
If you change your mind about opening your IRA, you generally have seven days
after receipt of notification within which to cancel your account. To do this,
you must send a written cancellation to Investors (at its mailing address listed
on the cover page) within that seven day period. If you cancel within seven
days, any amounts invested in a Portfolio will be returned to you, together with
any sales charge. If your investment has declined, Investors will make up the
difference so that you receive the full amount invested.
PENSION; PROFIT-SHARING; IRA; 403(B). Tax qualified retirement plans also are
available, including pension and profit-sharing plans, IRA's, and Section 403(b)
salary reduction arrangements. The Section 403(b) salary reduction arrangement
is principally for employees of state and municipal school systems and employees
of many types of tax-exempt or nonprofit organizations. Persons desiring
information about such Plans, including their availability, should contact
Investors. All the Retirement Plans summarized above involve a long-term
commitment of assets and are subject to various legal requirements and
restrictions. The legal and tax implications may vary according to the
circumstances of the individual investor. Therefore, the investor is urged to
consult with an attorney or tax adviser prior to establishing such a plan.
TAX-QUALIFIED PLAN CUSTODIANS AND TRUSTEES. Current fees: IRA and 403(b)--$10
annually; self-employed or small group corporate plan--$15 initial fee plus $30
annually (plus $5 annually per participant account and a per participant account
termination fee of $25). First Trust National Association is the Custodian under
the IRA and 403(b) plans. If a shareholder pays custodial fees by separate
check, they will not be deducted from his or her account and will not constitute
excess contributions. First Trust National Association also acts as Trustee
under the self-employed and small group corporate plans. The bank reserves the
right to change its fees on 30 days' prior written notice.
WITHHOLDING. Generally, distributions from accounts for tax qualified plans are
subject to either mandatory 20% Federal tax withholding or optional Federal
income tax withholding. Mandatory income tax withholding will not apply if the
payee elects to directly roll his or her distribution to either an IRA or
another qualified retirement plan. Any payee entitled to optional Federal income
tax withholding electing to have no withholding must do so in writing, and must
do so at or before the time that payment is made. A payee is not permitted to
elect no withholding if he or she is subject to mandatory backup withholding
under Federal law for failure to provide his or her tax identification number or
for failure to report all dividend or interest payments. Payees from 403(b) and
tax qualifed plans also are not permitted to elect out of withholding except as
regards systematic partial withdrawals extending over 10 or more years.
For IRAs, the withholding amount is 10% of the amount withdrawn.
Withholding for non-resident aliens is subject to special rules. When payment is
made to a plan trustee, Advisers assumes no responsibility for withholding.
Subsequent payment by the trustee to other payees may require withholding. Such
withholding is the responsibility of the plan trustee or of the plan
administrator.
Any amounts withheld may be applied as a credit against Federal tax subsequently
due.
GIFTS OR TRANSFERS TO MINOR CHILDREN
This gift or transfer is registered in the name of the custodian for a minor
under the Uniform Transfers to Minors Act (in some states the Uniform Gifts to
Minors Act). Dividends or capital gains distributions are taxed to the child,
whose tax bracket is usually lower than the adult's. However, if the child is
under 14 years old and his or her unearned income is more than $1,300 per year,
then that portion of the child's income which exceeds $1,300 per year will be
taxed to the child at the parents' top rate. Control of the shares passes to the
child upon reaching a specified adult age (either 18 or 21 years in most
states).
44
<PAGE>
SYSTEMATIC INVESTMENT PLAN
Each Portfolio provides a convenient, voluntary method of purchasing Portfolio
shares through its "Systematic Investment Plan."
The principal purposes of the Plan are to encourage thrift by enabling you to
make regular purchases in amounts less than normally required, and to employ the
principle of dollar cost averaging, described below.
By acquiring Portfolio shares on a regular basis pursuant to a Systematic
Investment Plan, or investing regularly on any other systematic plan, the
investor takes advantage of the principle of dollar cost averaging. Under dollar
cost averaging, if a constant amount is invested at regular intervals at varying
price levels, the average cost of all the shares will be lower than the average
of the price levels. This is because the same fixed number of dollars buys more
shares when price levels are low and fewer shares when price levels are high. It
is essential that the investor consider his or her financial ability to continue
this investment program during times of market decline as well as market rise.
The principle of dollar cost averaging will not protect against loss in a
declining market, as a loss will result if the plan is discontinued when the
market value is less than cost.
An investor has no obligation to invest regularly or to continue the Plan, which
may be terminated by the investor at any time without penalty. Under the Plan,
any distributions of income and realized capital gains will be reinvested in
additional shares at net asset value unless a shareholder instructs Investors in
writing to pay them in cash. Investors reserves the right to increase or
decrease the amount required to open and continue a Plan, and to terminate any
Plan after one year if the value of the amount invested is less than the amount
indicated.
EXCHANGE PRIVILEGE
The amount to be exchanged must meet the minimum purchase amount of the fund
being purchased.
Shareholders should consider the differing investment objectives and policies of
these other funds prior to making such exchange.
For Federal tax purposes, except where the transferring shareholder is a tax
qualified plan, a transfer between funds is a taxable event that probably will
give rise to a capital gain or loss. Furthermore, if a shareholder carries out
the exchange within 90 days of purchasing the shares in a Portfolio, the sales
charge incurred on that purchase cannot be taken into account for determining
the shareholder's gain or loss on the sale of those shares to the extent that
the sales charge that would have been applicable to the purchase of the later-
acquired shares in the other fund is reduced because of the exchange privilege.
However, the amount of the sales charge that may not be taken into account in
determining the shareholder's gain or loss on the sale of the first-acquired
shares may be taken into account in determining gain or loss on the eventual
sale or exchange of the later-acquired shares.
REINVESTED DIVIDEND/CAPITAL GAINS DISTRIBUTIONS BETWEEN FORTIS FUNDS
This privilege is based upon the fact that such orders are generally unsolicited
and the resulting lack of sales effort and expense.
PURCHASES BY FORTIS, INC. (OR ITS SUBSIDIARIES) OR ASSOCIATED PERSONS
This privilege is based upon the relationship of such persons to the Portfolios
and the resulting economies of sales effort and expense.
PURCHASES BY FORTIS WORLDWIDE DIRECTORS OR OFFICERS
This privilege is based upon their familiarity with the Portfolios and the
resulting lack of sales effort and expense.
PURCHASES BY REPRESENTATIVES OR EMPLOYEES OF
BROKER-DEALERS
This privilege is based upon the presumed knowledge such persons have about a
Portfolio as a result of their working for a company selling the Portfolio's
shares and resulting economies of sales effort and expense.
PURCHASES BY CERTAIN RETIREMENT PLANS
This privilege is based upon the familiarity of such investors with a Portfolio
and the resulting lack of sales effort and expense.
PURCHASES BY REGISTERED INVESTMENT COMPANIES
This privilege is based upon the generally unsolicited nature of such purchases
and the resulting lack of sales effort and expense.
PURCHASES WITH PROCEEDS FROM REDEMPTION OF UNRELATED MUTUAL FUND SHARES OR
SURRENDER OF CERTAIN FIXED ANNUITY CONTRACTS
SHAREHOLDERS OF UNRELATED MUTUAL FUNDS WITH SALES LOADS-- This privilege is
based upon the existing relationship of such persons with their broker-dealer or
registered representative and/or the familiarity of such shareholders with
mutual funds as an investment concept, with resulting economies of sales effort
and expense.
OWNERS OF A FIXED ANNUITY CONTRACT NOT DEEMED A SECURITY UNDER THE SECURITIES
LAWS--This privilege is based upon the existing relationship of such persons
with their broker-dealer or registered representative and/or the lower
acquisition costs associated with such sale, with resulting economies of sales
effort and expense.
45
<PAGE>
PURCHASES BY EMPLOYEES OF CERTAIN BANKS AND OTHER FINANCIAL SERVICES FIRMS
This privilege is based upon the familiarity of such investors with the
Portfolios and the resulting lack of sales effort and expense.
PURCHASES BY COMMERCIAL BANKS OFFERING SELF DIRECTED 401(K) PROGRAMS CONTAINING
BOTH POOLED AND INDIVIDUAL INVESTMENT OPTIONS
This privilege is based upon the existing relationship of such persons with
their broker-dealer or registered representative and/or the lower acquisition
costs associated with such sale, with resulting economies of sales effort and
expense.
PURCHASES BY INVESTMENT ADVISERS, TRUST COMPANIES, AND BANK TRUST DEPARTMENTS
EXERCISING DISCRETIONARY INVESTMENT AUTHORITY OR USING A MONEY MANAGEMENT MUTUAL
FUND "WRAP" PROGRAM
This privilege is based upon the familiarity of such investors with the
Portfolios and the resulting lack of sales effort and expense.
REDEMPTION
The obligation of each Portfolio to redeem its shares when called upon to do so
by the shareholder is mandatory with certain exceptions. Each Portfolio will pay
in cash all redemption requests by a shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the net asset value
of the Portfolio at the beginning of such period. When redemption requests
exceed such amount, however, each Portfolio reserves the right to make part or
all of the payment in the form of readily marketable securities or other assets
of the Portfolio. An example of when this might be done is in case of emergency,
such as in those situations enumerated in the following paragraph, or at any
time a cash distribution would impair the liquidity of a Portfolio to the
detriment of the existing shareholders. Any securities being so distributed
would be valued in the same manner as the applicable Portfolio is valued. If the
recipient sold such securities, he or she probably would incur brokerage
charges.
Redemption of shares, or payment, may be suspended at times (a) when the
Exchange is closed for other than customary weekend or holiday closings, (b)
when trading on said Exchange is restricted, (c) when an emergency exists, as a
result of which disposal by a Portfolio of securities owned by it is not
reasonably practicable, or it is not reasonably practicable for the Portfolio
fairly to determine the value of its net assets, or during any other period when
the Securities and Exchange Commission, by order, so permits; provided that
applicable rules and regulations of the Securities and Exchange Commission shall
govern as to whether the conditions prescribed in (b) or (c) exist.
SYSTEMATIC WITHDRAWAL PLAN
An investor may open a "Systematic Withdrawal Plan" providing for withdrawals of
$50 or more per quarter, semiannually, or annually if he or she has made a
minimum investment in Portfolio shares of $4,000 ($50 or more per month if at
least $10,000 has been invested), or has acquired and deposited shares having
either an original cost, or current value computed on the basis of the offering
price, equal to the appropriate amount. The minimum amount which may be
withdrawn of $50 per month is a minimum only, and should not be considered a
recommendation.
These payments may constitute return of capital, and it should be understood
that they do not represent a yield or return on investment and that they may
deplete or eliminate the investment. The shareholder cannot be assured of
receiving payment for any specific period because payments will terminate when
all shares have been redeemed. The number of such payments will depend on the
amount of each payment, the frequency of each payment, and the increase (or
decrease) in value of the remaining shares.
Under this Plan, any distributions of income and realized capital gains are
reinvested at net asset value. If a shareholder wishes to purchase additional
shares of a Portfolio under this Plan, other than by reinvestment of
distributions, it should be understood that he or she would be paying a sales
commission on such purchases, while liquidations effected under the Plan would
be at net asset value. Additions to a shareholder account in which an election
has been made to receive systematic withdrawals will be accepted only if each
such addition is equal to at least one year's scheduled withdrawals or $1,200,
whichever is greater. A shareholder may not have a "Systematic Withdrawal Plan"
and a "Systematic Investment Plan" in effect simultaneously, as it is not, as
explained above, advantageous to do so.
The Plan is voluntary, flexible, and under the shareholder's control and
direction at all times, and does not limit or alter his or her right to redeem
shares. The Plan may be terminated in writing at any time by either the
shareholder or the applicable Portfolio. The cost of operating the Plan is borne
by Advisers. The redemption of Portfolio shares pursuant to the Plan is a
taxable event to the shareholder.
REINVESTMENT PRIVILEGE
In order to allow investors who have redeemed Portfolio shares an opportunity to
reinvest, without additional cost, a one-time privilege is offered whereby an
investor may reinvest in a Portfolio, or in any other fund underwritten by
Investors and available to the public, without a sales charge. The reinvestment
privilege must be exercised in an amount not exceeding the proceeds of
redemption; must be exercised within 60 days of redemption; and only may be
exercised once with respect to a Portfolio.
46
<PAGE>
The purchase price for Portfolio shares will be based upon net asset value at
the time of reinvestment, and may be more or less than the redemption value.
Should an investor utilize the reinvestment privilege within 30 days following a
redemption which resulted in a loss, all or a portion of that loss may not be
currently deductible for Federal income tax purposes. Exercising the
reinvestment privilege would not alter any capital gains taxes payable on a
realized gain. Furthermore, if a shareholder redeems within 90 days of
purchasing the shares in a Portfolio, the sales charge incurred on that purchase
cannot be taken into account for determining the shareholder's gain or loss on
the sale of those shares.
TAXATION
Global Portfolio qualified in the fiscal year ended October 31, 1997, and both
Portfolios intend to qualify, as regulated investment companies under the
Internal Revenue Code of 1986, as amended (the "Code"). As long as a Portfolio
so qualifies, the Portfolio is not taxed on the income it distributes to its
shareholders.
Gain or loss realized upon the sale of shares in the Portfolio will be treated
as capital gain or loss, provided that the shares represented a capital asset in
the hands of the shareholder. For individuals, estates, and trusts, long-term
capital gains, which are realized on the sale or exchange of capital assets held
for more than 18 months, are subject to a maximum federal income tax rate of
20%, while ordinary income is subject to a maximum rate of 39.6%. Mid-term
capital gains, which are realized on the sale or exchange of capital assets held
more than one year but not more than 18 months, are subject to a maximum federal
income tax rate of 28%.
Under the Code, each Portfolio is subject to a nondeductible excise tax for each
calendar year equal to 4 percent of the excess, if any, of the amount required
to be distributed over the amount distributed. However, the excise tax does not
apply to any income on which the Portfolio pays income tax. In order to avoid
the imposition of the excise tax, each Portfolio generally must declare
dividends by the end of a calendar year representing at least 98 percent of the
Portfolio's ordinary income for the calendar year and 98 percent of its capital
gain net income (both long-term and short-term capital gains) for the 12-month
period ending October 31 of the calendar year.
The marked-to-market rules of the Code may require each Portfolio to recognize
gains and losses on certain options and futures held by the Portfolio at the end
of the fiscal year. Under the marked-to-market rules, 60% of any net capital
gain or loss recognized is treated as long-term and 40% as short-term. In
addition, the straddle rules of the Code would require deferral of certain
losses realized on positions of a straddle to the extent that each Portfolio had
unrealized gains in offsetting positions at year end.
If a Portfolio invests in zero coupon obligations upon their issuance, such
obligations will have original issue discount in the hands of the Portfolio.
Generally, the original issue discount equals the difference between the "stated
redemption price at maturity" of the obligation and its "issue price" as those
terms are defined in the Code. If the Portfolio acquires an already issued zero
coupon bond from another holder, the bond will have original issue discount in
the Portfolio's hands, equal to the difference between the "adjusted issue
price" of the bond at the time the Portfolio acquires it (that is, the original
issue price of the bond plus the amount of original issue discount accrued to
date) and its stated redemption price at maturity. In each case, the Portfolio
is required to accrue as ordinary interest income a portion of such original
issue discount even though the Portfolio receives no cash currently as interest
payment on the obligation.
Because each Portfolio is required to distribute substantially all of its net
investment income (including accrued original issue discount) in order to
qualify as a regulated investment company, each Portfolio may be required to
distribute an amount greater than the total cash income the Portfolio actually
receives. Accordingly, in order to make the required distribution, the Portfolio
may be required to borrow or to liquidate securities.
Under Section 988 of the Code, all or a portion of gains and losses from certain
transactions is treated as ordinary income or loss. These rules generally apply
to transactions in certain securities denominated in foreign currencies, forward
contracts in foreign currencies, futures contracts in foreign currencies that
are not "regulated futures contracts," certain unlisted options and foreign
currency swaps. The rules under Section 988 may also affect the timing of income
recognized by a Portfolio.
Pursuant to a special provision in the Code, if Portfolio shares with respect to
which a long-term capital gain distribution has been made are held for six
months or less, any loss on the sale or other disposition of such shares will be
a long-term capital loss to the extent of such long-term capital gain
distribution, unless such sale or other disposition is pursuant to a Systematic
Withdrawal Plan.
Under the Code, each Portfolio is required to withhold and remit to the U.S.
Treasury 31% of dividend and capital gain income on the accounts of certain
shareholders who fail to provide a correct tax identification number, fail to
certify that they are not subject to backup withholding, or are subject to
backup withholding for some other reason.
If more than 50% of a Portfolio's total assets at the close of its fiscal year
consist of securities of foreign corporations, it will be eligible to, and may,
file an election with the Internal Revenue Service pursuant to which
shareholders will be required to include their pro rata portions of foreign
taxes paid by the Portfolio as income received by them. Shareholders may
47
<PAGE>
then either deduct such pro rata portions in computing their taxable income or
use them as foreign tax credits against their United States income taxes. If it
makes such an election, the Portfolio will report annually to each shareholder
the amount of foreign taxes to be included in income and then either deducted or
credited.
Alternatively, if the amount of foreign taxes paid by a Portfolio is not large
enough to warrant its making the election described above, the Portfolio may
claim the amount of foreign taxes paid as a deduction against its own gross
income. In that case, shareholders would not be required to include any amount
of foreign taxes paid by the Portfolio in their income and would not be
permitted either to deduct any portion of foreign taxes from their own income or
to claim any amount of foreign tax credit for taxes paid by the Portfolio.
For Federal income tax purposes, Global Portfolio had a capital loss carryover
of $1,183,856 at October 31, 1997, which, if not offset by subsequent capital
gains, will expire in 2003 and 2004.
It is unlikely the Board of Directors will authorize a distribution of any net
realized gains until the available capital loss carryover has been offset or
expired.
The foregoing is a general discussion of the Federal income tax consequences of
an investment in a Portfolio as of the date of this Statement of Additional
Information. Distributions from net investment income and from net realized
capital gains may also be subject to state and local taxes. Shareholders are
urged to consult their own tax advisers regarding specific questions as to
Federal, state, or local taxes.
PERFORMANCE COMPARISONS
Advertisements and other sales literature for the Portfolios may refer to
"average annual total return" and "cumulative total return." All such total
return quotations are based on historical earnings and are not intended to
indicate future performance. International Portfolio was not in existence during
the periods presented, and no performance information is presented.
Average annual total return is the average annual compounded rate of return on a
hypothetical $1,000 investment made at the beginning of the advertised period.
Average annual total return figures are computed according to the following
formula:
P(1+T) to the power of n = ERV
Where: P = a hypothetical initial
payment of $1,000
T = average annual total
return;
n = number of years; and
ERV = ending redeemable value
at the end of the period
of a hypothetical $1,000
payment made at the
beginning of such
period.
This calculation deducts the maximum sales charge from the initial hypothetical
$1,000 investment, assumes all dividends and capital gains distributions are
reinvested at net asset value on the appropriate reinvestment dates as described
in the Prospectus, and includes all recurring fees, such as investment advisory
and management fees, charged to all shareholder accounts. Average annual total
return quotations may be accompanied by quotations which do not reflect the
reduction in value of the initial investment due to the sales charge, and which
thus will be higher.
The following table sets forth the average annual total return of Global
Portfolio and each class of shares for various periods ended October 31, 1997.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
(WITH SALES CHARGES)
----------------------------------------
1 YEAR 5 YEARS SINCE INCEPTION
---------- ---------- ----------------
<S> <C> <C> <C>
Class A Shares*......... 7.07% 14.61% 13.88%
Class B Shares**........ 8.03% N/A 16.61%
Class C Shares**........ 10.57% N/A 17.30%
Class H Shares**........ 7.98% N/A 16.61%
</TABLE>
- ------------------------
* Inception date: July 8, 1991 (based on the maximum sales charge assessed on
purchases of Class A shares)
** Inception date: November 14, 1994 (including contingent deferred sales
charges "CDSC")
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
(WITHOUT SALES CHARGES)
----------------------------------------
1 YEAR 5 YEARS SINCE INCEPTION
---------- ---------- ----------------
<S> <C> <C> <C>
Class A Shares***....... 12.41% 15.73% 14.76%
Class B Shares****...... 11.63% N/A 17.28%
Class C Shares****...... 11.57% N/A 17.30%
Class H Shares****...... 11.58% N/A 17.28%
</TABLE>
- ------------------------
*** Inception Date: July 8, 1991 (based on net asset value)
**** Inception Date: November 14, 1994 (not including CDSC)
Cumulative total return is computed by finding the cumulative compounded rate of
return over the period indicated in the advertisement that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:
ERV + P
CTR = ( -------) 100
P
Where: CTR = Cumulative total return
ERV = ending redeemable value
at the end of the period
of a hypothetical $1,000
payment made at the
beginning of such
period; and
P = initial payment of
$1,000
This calculation assumes all dividends and capital gain distributions are
reinvested at net asset value on the appropriate
48
<PAGE>
reinvestment dates as described in the Prospectus and includes all recurring
fees, such as investment advisory and management fees, charged to all
shareholder accounts.
The following table sets forth the cumulative total returns for Global Portfolio
and each class of shares for the period from inception through October 31, 1997.
<TABLE>
<CAPTION>
CUMULATIVE
TOTAL RETURNS
(WITHOUT
SALES
CHARGES)
-------------
<S> <C>
Class A Shares*.............................. 138.60%
Class B Shares**............................. 60.41%
Class C Shares**............................. 60.48%
Class H Shares**............................. 60.41%
</TABLE>
- ------------------------
* Inception date: July 8, 1991 (based on the maximum sales charge assessed on
purchases of Class A shares)
** Inception date: November 14, 1994 (including CDSC)
<TABLE>
<CAPTION>
CUMULATIVE
TOTAL RETURNS
(WITH SALES
CHARGES)
-------------
<S> <C>
Class A Shares***............................ 127.26%
Class B Shares****........................... 57.71%
Class C Shares****........................... 60.48%
Class H Shares****........................... 57.71%
</TABLE>
- ------------------------
*** Inception Date: July 8, 1991 (based on net asset value)
**** Inception Date: November 14, 1994 (not including CDSC)
As noted in the Prospectus, the Portfolios may advertise their relative
performance as compiled by outside organizations or refer to publications which
have mentioned their performance or track the performance of investment
companies. From time to time each Portfolio may be compared to the following:
(1) The Salomon Brothers Non-U.S. Dollars Indices, which are measures of the
total return performance of high-quality non-U.S. dollar denominated securities
in major sectors of the worldwide bond markets.
(2) The Shearson Lehman Government/Corporate Bond Index, which is a
comprehensive measure of all public obligations of the U.S. Treasury (excluding
flower bonds and foreign targeted issues), all publicly issued debt of agencies
of the U.S. Government (excluding mortgage-backed securities), and all public,
fixed rate, nonconvertible investment grade domestic corporate debt rated at
least Baa by Moody's or BBB by S&P, or, in the case of nonrated bonds, BBB by
Fitch Investors Service (excluding Collateralized Mortgage Obligations).
(3) Average of Savings Accounts, which is a measure of all kinds of savings
deposits, including longer-term certificates (based on figures supplied by the
U.S. League of Savings Institutions). Savings accounts offer a guaranteed rate
of return on principal, but no opportunity for capital growth. During a portion
of the period, the maximum rates paid on some savings deposits were fixed by
law.
(4) The Consumer Price Index, which is a measure of the average change in
prices over time in a fixed market basket of goods and services (e.g., food,
clothing, shelter, fuels, transportation fares, charges for doctors' and
dentists' services, prescription medicines, and other goods and services that
people buy for day-to-day living).
(5) Bear Stearns Foreign Bond Index, which provides simple average returns
for individual countries and GNP-weighted index, beginning in 1975. The returns
are broken down by local market and currency.
(6) Ibbottson Associates International Bond Index, which provides a detailed
breakdown of local market and currency returns since 1960.
(7) Standard & Poor's 500 Index ("S&P 500") which is a widely recognized
index composed of the capitalization-weighted average of the price of 500 of the
largest publicly traded stocks in the United States.
(8) Salomon Brothers Broad Investment Grade Index which is a widely used
index composed of U.S. domestic government, corporate and mortgage-backed fixed
income securities.
(9) Dow Jones Industrial Average.
(10) Financial News Composite Index.
(11) Morgan Stanley Capital International World Indices, including, among
others, the Morgan Stanley World Index ("MSCI World") and the Morgan Stanley
Capital International Europe, Australia, Far East Index ("EAFE Index"). The EAFE
index is an unmanaged index of more than 800 companies of Europe, Australia, and
the Far East.
Indices prepared by the research departments of such financial organizations as
Salomon Brothers, Inc., Merrill Lynch, Pierce, Fenner & Smith, Inc., Bear
Stearns & Co., Inc., Morgan Stanley, and Ibbottson Associates may be used, as
well as information provided by the Federal Reserve Board.
Following is a list of ratings services which may be referred to, along with the
category in which the Portfolios are included. Because some of these services do
not take into account sales charges, their ratings may sometimes be different
than had they done so:
<TABLE>
<CAPTION>
GLOBAL GROWTH PORTFOLIO
- ---------------------------------------------------------
RATINGS SERVICE CATEGORY
- --------------------------------- --------------------
<S> <C>
Lipper Analytical Services, Inc. Global funds
CDA/Wiesenberger Global equity
Morningstar Publications, Inc. World stock
Johnson's Charts Global equity
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY PORTFOLIO
- ---------------------------------------------------------
RATINGS SERVICE CATEGORY
- --------------------------------- --------------------
<S> <C>
Lipper Analytical Services, Inc. International funds
CDA/Wiesenberger Non-U.S. equity
Morningstar Publications, Inc. Foreign stock
Johnson's Charts International equity
</TABLE>
Also see Appendix C for a list of publications in which articles about the
Portfolios may appear and to which the Portfolios may refer.
49
<PAGE>
FINANCIAL STATEMENTS
The audited financial statements as of October 31, 1997, as set forth in Global
Portfolio's 1997 Annual Report to Shareholders, are incorporated herein by
reference. The audited financial statements are provided in reliance on the
report of KPMG Peat Marwick LLP, 4200 Norwest Center, Minneapolis, Minnesota
55402, independent auditors of the Portfolios, and given on the authority of
such firm as experts in accounting and auditing.
CUSTODIAN AND COUNSEL
U.S. Bank National Association, 601 Second Avenue South, Minneapolis, Minnesota
55402 acts as custodian of the Portfolios' assets and portfolio securities.
Dorsey & Whitney LLP, 220 South Sixth Street, Minneapolis, Minnesota 55402, is
the independent General Counsel for Fortis Worldwide.
LIMITATION OF DIRECTOR LIABILITY
Under Minnesota law, each director of Fortis Worldwide owes certain fiduciary
duties to it and to its shareholders. Minnesota law provides that a director
"shall discharge the duties of the position of director in good faith, in a
manner the director reasonably believes to be in the best interest of the
corporation, and with the care an ordinarily prudent person in a like position
would exercise under similar circumstances." Fiduciary duties of a director of a
Minnesota corporation include, therefore, both a duty of "loyalty" (to act in
good faith and act in a manner reasonably believed to be in the best interests
of the corporation) and a duty of "care" (to act with the care an ordinarily
prudent person in a like position would exercise under similar circumstances).
Minnesota law authorizes corporations to eliminate or limit the personal
liability of a director to the corporation or its shareholders for monetary
damages for breach of the fiduciary duty of "care." Minnesota law does not,
however, permit a corporation to eliminate or limit the liability of a director
(i) for any breach of the directors' duty of "loyalty" to the corporation or its
shareholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for authorizing a
dividend, stock repurchase or redemption or other distribution in violation of
Minnesota law or for violation of certain provisions of Minnesota securities
laws, or (iv) for any transaction from which the director derived an improper
personal benefit. The Articles of Incorporation of Fortis Worldwide limit the
liability of directors to the fullest extent permitted by Minnesota statutes,
except to the extent that such liability cannot be limited as provided in the
Investment Company Act of 1940 (which Act prohibits any provisions which purport
to limit the liability of directors arising from such directors' willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of their role as directors).
Minnesota law does not eliminate the duty of "care" imposed upon a director. It
only authorizes a corporation to eliminate monetary liability for violations of
that duty. Minnesota law, further, does not permit elimination or limitation of
liability of "officers" to the corporation for breach of their duties as
officers (including the liability of directors who serve as officers for breach
of their duties as officers). Minnesota law does not permit elimination or
limitation of the availability of equitable relief, such as injunctive or
rescissionary relief. Further, Minnesota law does not permit elimination or
limitation of a director's liability under the Securities Act of 1933 or the
Securities Exchange Act of 1934, and it is uncertain whether and to what extent
the elimination of monetary liability would extend to violations of duties
imposed on directors by the Investment Company Act of 1940 and the rules and
regulations adopted under such Act.
ADDITIONAL INFORMATION
Fortis Worldwide has filed with the Securities and Exchange Commission,
Washington, D.C. 20549, a Registration Statement under the Securities Act of
1933, as amended, with respect to the common shares offered hereby. The
Prospectus and this Statement of Additional Information do not contain all of
the information set forth in the Registration Statement, certain parts of which
are omitted in accordance with Rules and Regulations of the Commission. The
Registration Statement may be inspected at the principal office of the
Commission at 450 Fifth Street, N.W., Washington, D.C., and copies thereof may
be obtained from the Commission at prescribed rates.
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APPENDIX A
CORPORATE BOND, PREFERRED STOCK, AND COMMERCIAL PAPER RATINGS
COMMERCIAL PAPER RATINGS
STANDARD & POOR'S RATINGS SERVICES. Commercial paper ratings are graded into
four categories, ranging from "A" for the highest quality obligations to "D" for
the lowest. Issues assigned the A rating are regarded as having the greatest
capacity for timely payment. Issues in this category are further refined with
designation 1, 2, and 3 to indicate the relative degree of safety. The "A-1"
designation indicates that the degree of safety regarding timely payment is very
strong. Those issues determined to possess overwhelming safety characteristics
will be denoted with a plus (+) sign designation. The "A-2" designation
indicates that the capacity for timely payment on issues with this designation
is strong. However, the relative degree of safety is not as high as for issues
designated "A-1." Issues carrying the "A-3" designation have a satisfactory
capacity for timely payment. They are, however, somewhat more vulnerable to the
adverse effects of changes in circumstances than obligations carrying the higher
designations.
MOODY'S INVESTORS SERVICE, INC. Moody's commercial paper ratings are opinions of
the ability of the issuers to repay punctually promissory obligations not having
an original maturity in excess of nine months. Moody's makes no representations
that such obligations are exempt from registration under the Securities Act of
1933, nor does it represent that any specific note is a valid obligation of a
rated issuer or issued in conformity with any applicable law. Moody's employs
the following three designations, all judged to be investment grade, to indicate
the relative repayment capacity of rated issuers:
<TABLE>
<S> <C>
Prime-1 Superior capacity for repayment of
short- term promissory
obligations.
Prime-2 Strong capacity for repayment of
short-term promissory obligations.
Prime-3 Acceptable capacity for repayment
of short-term promissory
obligations.
</TABLE>
CORPORATE BOND RATINGS
STANDARD & POOR'S RATINGS SERVICES. Its ratings for corporate bonds have the
following definitions:
Debt rated "AAA" has the highest rating assigned by Standard & Poor's. Capacity
to pay interest and repay principal is extremely strong.
Debt rated "AA" has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in a small degree.
Debt rated "A" has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
Debt rated "BBB" is regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories.
Debt rated "BB," "B," "CCC," "CC," and "C" is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. "BB" indicates the
lowest degree of speculation and "C" the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
Debt rated "BB" has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The "BB"
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied "BBB-" rating.
Debt rated "B" has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The "B" rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied "BB" or "BB-"
rating.
Debt rated "CCC" has a currently identifiable vulnerability to default, and is
dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The "CCC" rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
"B" or "B-" rating.
The rating "CC" is typically applied to debt subordinated to senior debt that is
assigned an actual or implied "CCC" rating.
The rating "C" is typically applied to debt subordinated to senior debt which is
assigned an actual or implied "CCC-" debt rating. The "C" rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.
Debt rated "D" is in payment default. The "D" rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The "D" rating also will be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.
The rating "C1" is reserved for income bonds on which no interest is being paid.
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"NR" indicates that no rating has been requested, that there is insufficient
information on which to base a rating, or that Standard & Poor's does not rate a
particular type of obligation as a matter of policy.
BOND INVESTMENT QUALITY STANDARDS. Under present commercial bank regulations
issued by the Comptroller of the Currency, bonds rated in the top four
categories (AAA, AAA, A and BBB, commonly known as "Investment Grade" ratings)
are generally regarded as eligible for bank investment. In addition, the Legal
Investment Laws of various states impose certain rating or other standards for
obligations eligible for investment by savings banks, trust companies, insurance
companies, and fiduciaries generally.
MOODY'S INVESTORS SERVICE, INC. Its ratings for corporate bonds include the
following:
Bonds which are rated "Aaa" are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Bonds which are rated "Aa" are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat larger than in Aaa securities.
Bonds which are rated "A" possess many favorable attributes and are to be
considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Bonds which are rated "Baa" are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Bonds which are rated "Ba" are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.
Bonds which are rated "B" generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Bonds which are rated "Caa" are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest.
Bonds which are rated "Ca" represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.
Bond which rated "C" are the lowest rated class of bonds and issues so rated can
be regarded as having extremely poor prospects of ever attaining any real
investment standing.
PREFERRED STOCK RATING
STANDARD & POOR'S RATINGS SERVICES. Its ratings for preferred stock have the
following definitions:
An issue rated "AAA" has the highest rating that may be assigned by Standard &
Poor's to a preferred stock issue and indicates an extremely strong capacity to
pay the preferred stock obligations.
A preferred stock issue rated "AA" also qualifies as a high-quality fixed income
security. The capacity to pay preferred stock obligations is very strong,
although not as overwhelming as for issues rated "AAA".
An issue rated "A" is backed by a sound capacity to pay the preferred stock
obligations, although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.
An issue rated "BBB" is regarded as backed by an adequate capacity to pay the
preferred stock obligations. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions, or changing circumstances are more
likely to lead to a weakened capacity to make payments for a preferred stock in
this category than for issues in the "A" category.
MOODY'S INVESTORS SERVICE, INC. Its ratings for preferred stock include the
following:
An issue which is rated "Aaa" is considered to be a top-quality preferred stock.
This rating indicates good asset protection and the least risk of dividend
impairment within the universe of preferred stocks.
An issue which is rated "Aa" is considered a high-grade preferred stock. This
rating indicates that there is reasonable assurance that earnings and asset
protection will remain relatively well maintained in the foreseeable future.
An issue which is rated "A" is considered to be an upper-medium grade preferred
stock. While risks are judged to be
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<PAGE>
somewhat greater than in the "Aaa" and "Aa" classifications, earnings and asset
protection are nevertheless expected to be maintained at adequate levels.
An issue which is rated "Baa" is considered to be medium grade, neither highly
protected nor poorly secured. Earnings and asset protection appear adequate at
present but may be questionable over any great length of time.
APPENDIX B
DESCRIPTION OF FUTURES, OPTIONS AND FORWARD CONTRACTS
OPTIONS ON SECURITIES
An option on a security provides the purchaser, or "holder," with the right, but
not the obligation, to purchase, in the case of a "call" option, or sell, in the
case of a "put" option, the security or securities underlying the option, for a
fixed exercise price up to a stated expiration date or, in the case of certain
options, on such date. The holder pays a nonrefundable purchase price for the
option, known as the "premium." The maximum amount of risk the purchaser of the
option assumes is equal to the premium plus related transaction costs, although
this entire amount may be lost. The risk of the seller, or "writer," however, is
potentially unlimited, unless the option is "covered." A call option written by
a Portfolio is "covered" if the Portfolio owns the underlying security covered
by the call or has an absolute and immediate right to acquire that security
without additional cash consideration (or for additional cash consideration held
in a segregated account by its custodian) upon conversion or exchange of other
securities held in its portfolio. A call option is also covered if a Portfolio
holds a call on the same security and in the same principal amount as the call
written where the exercise price of the call held (a) is equal to or less than
the exercise price of the call written or (b) is greater than the exercise price
of the call written if the difference is maintained by the Portfolio in cash and
high grade government securities in a segregated account with its custodian. A
put option written by a Portfolio is "covered" if the Portfolio maintains cash
and high grade government securities with a value equal to the exercise price in
a segregated account with its custodian, or else holds a put on the same
security and in the same principal amount as the put written where the exercise
price of the put held is equal to or greater than the exercise price of the put
written. If the writer's obligation is not so covered, it is subject to the risk
of the full change in value of the underlying security from the time the option
is written until exercise.
Upon exercise of the option, the holder is required to pay the purchase price of
the underlying security, in the case of a call option, or to deliver the
security in return for the purchase price in the case of a put option.
Conversely, the writer is required to deliver the security, in the case of a
call option, or to purchase the security, in the case of a put option. Options
on securities which have been purchased or written may be closed out prior to
exercise or expiration by entering into an offsetting transaction on the
exchange on which the initial position was established, subject to the
availability of a liquid secondary market.
Options on securities and options on indexes of securities, discussed below, are
traded on national securities exchanges, such as the Chicago Board Options
Exchange and the New York Stock Exchange, which are regulated by the SEC. The
Options Clearing Corporation guarantees the performance of each party to an
exchange-traded option, by in effect taking the opposite side of each such
option. A holder or writer may engage in transactions in exchange-traded options
on securities and options on indexes of securities only through a registered
broker-dealer which is a member of the exchange on which the option is traded.
In addition, options on securities and options on indexes of securities may be
traded on exchanges located outside the United States and over-the-counter
through financial institutions dealing in such options as well as the underlying
instruments. The particular risks of transactions on foreign exchanges and
over-the-counter transactions are set forth more fully in the Statement of
Additional Information.
OPTIONS ON STOCK INDEXES
In contrast to an option on a security, an option on a stock index provides the
holder with the right to make or receive a cash settlement upon exercise of the
option, rather than the right to purchase or sell a security. The amount of this
settlement is equal to (a) the amount, if any, by which the fixed exercise price
of the option exceeds (in the case of a call) or is below (in the case of a put)
the closing value of the underlying index on the date of exercise, multiplied by
(b) a fixed "index multiplier." The purchaser of the option receives this cash
settlement amount if the closing level of the stock index on the day of exercise
is greater than, in the case of a call, or less than, in the case of a put, the
exercise price of the option. The writer of the option is obligated, in return
for the premium received, to make delivery of this amount if the option is
exercised. As in the case of options on securities, the writer or holder may
liquidate positions in stock index options prior to exercise or expiration by
entering into closing transactions on the exchange on which such positions were
established, subject to the availability of a liquid secondary market.
The Portfolios will cover all options on stock indexes by owning securities
whose price changes, in the opinion of Advisers, are expected to be similar to
those of the index, or in such other manner as may be in accordance with the
rules of the exchange on which the option is traded and applicable laws and
regulations. Nevertheless, where a Portfolio covers a call option on a stock
index through ownership of securities, such securities may not match the
composition of the index. In that event, the Portfolio will not be fully covered
and could be subject to risk of loss in the event of adverse changes in the
value of the index. Each Portfolio will secure put options on stock indexes by
segregating assets equal to the option's exercise price, or in such other manner
as may be in accordance with the rules of the exchange on which the option is
traded and applicable laws and regulations.
The index underlying a stock option index may be a "broad-based" index, such as
the Standard & Poor's 500 Index or the New York Stock Exchange Composite Index,
the changes in value of which ordinarily will reflect movements in the stock
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<PAGE>
market in general. In contrast, certain options may be based upon narrower
market indexes, such as the Standard & Poor's 100 Index, or on indexes of
securities of particular industry groups, such as those of oil and gas or
technology companies. A stock index assigns relative values to the stocks
included in the index and the index fluctuates with changes in the market values
of the stocks so included.
FUTURES CONTRACTS ON FIXED INCOME SECURITIES, STOCK INDEXES AND FOREIGN
CURRENCIES
A Futures Contract is a bilateral agreement providing for the purchase and sale
of a specified type and amount of a financial instrument or foreign currency, or
for the making and acceptance of a cash settlement, at a stated time in the
future for a fixed price. By its terms, a Futures Contract provides for a
specified settlement date on which, in the case of the majority of interest rate
and foreign currency futures contracts, the fixed income securities or currency
underlying the contract are delivered by the seller and paid for by the
purchaser, or on which, in the case of stock index futures contracts and certain
interest rate and foreign currency futures contracts, the difference between the
price at which the contract was entered into and the contract's closing value is
settled between the purchaser and the seller in cash. Futures Contracts differ
from options in that they are bilateral agreements, with both the purchaser and
the seller equally obligated to complete the transaction. Futures Contracts call
for settlement only on the expiration date, and cannot be "exercised" at any
other time during their term.
The purchase or sale of a Futures Contract differs from the purchase or sale of
a security or the purchase of an option in that no purchase price is paid or
received. Instead, an amount of cash or cash equivalents, which varies but may
be as low as 5% or less of the value of the contract, must be deposited with the
broker as "initial margin." Subsequent payments to and from the broker, referred
to as "variation margin," are made on a daily basis as the value of the index or
instrument underlying the Futures Contract fluctuates, making positions in the
Futures Contracts more or less valuable, a process known as "marking to the
market."
U.S. Futures Contracts may be purchased or sold only on an exchange, known as a
"contract market," designated by the CFTC for the trading of such contract, and
only through a registered futures commission merchant which is a member of such
contract market. A commission must be paid on each completed purchase and sale
transaction. The contract market clearing house guarantees the performance of
each party to a Futures Contract, by in effect taking the opposite side of such
contract. At any time prior to the expiration of a Futures Contract, a trader
may elect to close out its position by taking an opposite position on the
contract market on which the position was entered into, subject to the
availability of a secondary market, which will operate to terminate the initial
position. At that time, a final determination of variation margin is made and
any loss experienced by the trader is required to be paid to the contract market
clearing house while any profit due to the trader must be delivered to it.
Futures Contracts may also be traded on foreign exchanges.
Interest rate Futures Contracts currently are traded on a variety of fixed
income securities, including long-term U.S. Treasury Bonds, Treasury Notes,
Government National Mortgage Association modified pass-through mortgage-backed
securities, and U.S. Treasury Bills. In addition, interest rate Futures
Contracts include contracts on indexes of municipal securities. Foreign currency
Futures Contracts currently are traded on the British pound, Canadian dollar,
Japanese yen, Swiss franc, West German mark, and on Eurodollar deposits.
A stock index or Eurodollar Futures Contract provides for the making and
acceptance of a cash settlement in much the same manner as the settlement of an
option on a stock index. The types of indexes underlying stock index futures
contracts are essentially the same as those underlying stock index options, as
described above. The index underlying a municipal bond index futures contract is
a broad-based index of municipal securities designed to reflect movements in the
municipal securities market as a whole. The index assigns weighted values to the
securities included in the index and its composition is changed periodically.
OPTIONS ON FUTURES CONTRACTS
An Option on a Futures Contract provides the holder with the right to enter into
a "long" position in the underlying Futures Contract, in the case of a call
option, or a "short" position in the underlying Futures Contract, in the case of
a put option, at a fixed exercise price up to a stated expiration date or, in
the case of certain options, on such date. Upon exercise of the option by the
holder, the contract market clearing house establishes a corresponding short
position for the writer of the option, in the case of a call option, or a
corresponding long position, in the case of a put option. In the event that an
option is exercised, the parties will be subject to all the risks associated
with the trading of Futures Contracts, such as payment of variation margin
deposits. In addition, the writer of an Option on a Futures Contract, unlike the
holder, is subject to initial and variation margin requirements on the option
position.
A position in an Option on a Futures Contract may be terminated by the purchaser
or the seller prior to expiration by affecting a closing purchase or sale
transaction, subject to the availability of a liquid secondary market, which is
the purchase or sale of an option of the same series (i.e., the same exercise
price and expiration date) as the option previously purchased or sold. The
difference between the premiums paid and received represents the trader's profit
or loss on the transaction.
Options on Futures Contracts that are written or purchased by a Portfolio on
United States exchanges are traded on the same contract market as the underlying
Futures Contract and, like Futures Contracts, are subject to regulation by the
CFTC and the performance guarantee of the exchange clearing house. In addition,
Options on Futures Contracts may be traded on foreign exchanges.
An option, whether based on a Futures Contract, a stock index, or security,
becomes worthless to the holder when it expires. Upon exercise of an option, the
exchange or contract
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market clearing house assigns exercise notices on a random basis to those of its
members which have written options of the same series and with the same
expiration date. A brokerage firm receiving such notices then assigns them on a
random basis to those of its customers which have written options of the same
series and expiration date. A writer therefore has no control over whether an
option will be exercised against it, nor over the timing of such exercise.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
A Currency Contract is a contractual obligation to purchase or sell a specific
quantity of a given foreign currency for a fixed exchange rate at a future date.
Currency Contracts are individually negotiated and are traded through the
"interbank currency market," an informal network of banks and brokerage firms
which operates around the clock and throughout the world. Transactions in the
interbank market may be executed only through financial institutions acting as
market-makers in the interbank market, or through brokers exercising purchases
and sales through such institutions. Market-makers in the interbank market
generally act as principals in taking the opposite side of their customers'
positions in Currency Contracts, and ordinarily charge a mark-up commission
which may be included in the cost of the Contract. In addition, market-makers
may require their customers to deposit collateral upon entering into a Currency
Contract, as security for the customer's obligation to make or receive delivery
of currency, and to deposit additional collateral if exchange rates move
adversely to the customer's position. Such deposits may function in a manner
similar to the margining of Futures Contracts, described above.
Prior to the stated maturity date of a Currency Contract, it may be possible to
liquidate the transaction by entering into an offsetting contract. In order to
do so, however, a customer may be required to maintain both contracts as open
positions until maturity and to make or receive a settlement of the difference
owed to or from the market-maker or broker at that time.
OPTIONS ON FUTURES CONTRACTS
Options on foreign currencies are traded in a manner substantially similar to
options on securities. In particular, an option on foreign currency provides the
holder with the right to purchase, in the case of a call option, or to sell, in
the case of a put option, a stated quantity of a particular currency for a fixed
price up to a stated expiration date or, in the case of certain options, on such
date. The writer of the option undertakes the obligation to deliver, in the case
of a call option, or to purchase, in the case of a put option, the quantity of
the currency called for in the option, upon exercise of the option by the
holder.
As in the case of other types of options, the holder of an option on foreign
currency is required to pay a one-time, nonrefundable premium, which represents
the cost of purchasing the option. The holder can lose the entire amount of this
premium, as well as related transaction costs, but not more than this amount.
The writer of the option, in contract, generally is required to make initial and
variation margin payments, similar to margin deposits required in the trading of
Futures Contracts and the writing of other types of options. The writer is
therefore subject to risk of loss beyond the amount originally invested and
above the value of the option at the time it is entered into.
Certain options on foreign currencies, like Currency Contracts, are traded
over-the-counter through financial institutions acting as market-makers in such
options and the underlying currencies. Such transactions therefore involve risks
not generally associated with exchange-traded instruments, which are discussed
below. Options on foreign currencies may also be traded on national securities
exchanges regulated by the SEC and on exchanges located in foreign countries.
Over-the-counter transactions can only be entered into with a financial
institution willing to take the opposite side, as principal, of a Portfolio's
position, unless the institution acts as broker and is able to find another
counterparty willing to enter into the transaction with the Portfolio. Where no
such counterparty is available, it will not be possible to enter into a desired
transaction. There also may be no liquid secondary market in the trading of
over-the-counter contracts, and a Portfolio could be required to retain options
purchased or written until exercise, expiration or maturity. This in turn could
limit the Portfolio's ability to profit from open positions or to reduce losses
experienced, and could result in greater losses.
Further, over-the-counter transactions are not subject to the guarantee of an
exchange clearing house, and the Portfolios will therefore be subject to the
risk of default by, or the bankruptcy of, the financial institution serving as
its counterparty. One or more of such institutions also may decide to
discontinue their role as market-makers in a particular currency or security,
thereby restricting the Portfolios' ability to enter into desired hedging
transactions. The Portfolios will enter into an over-the-counter transaction
only with parties whose creditworthiness has been reviewed and found
satisfactory by Advisers.
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APPENDIX C
The following is a list of publications whose articles may be referred to.
AMERICAN BANKER (The)
AP-DOW Jones News Service
ASSOCIATED PRESS (The)
BARRON'S
BETTER INVESTING
BOARDROOM REPORTS
BOND BUYER & CREDIT MARKETS (The)
BOND BUYER (The)
BONDWEEK
BUSINESS MONTH
BUSINESS WEEK
CABLE NEWS NETWORK
CASHFLOW MAGAZINE
CFO
CHICAGO TRIBUNE (The)
CHRISTIAN SCIENCE MONITOR
CITY BUSINESS/CORPORATE REPORT
CITYBUSINESS PUBLICATIONS
COMMERCIAL & FINANCIAL CHRONICLE
CONSUMER GUIDE
CORPORATE FINANCE
DALLAS MORNING NEWS
DOLLARS & SENSE
DOW-JONES NEWS SERVICE
ECONOMIST (The)
EQUITY INTERNATIONAL
EUROMONEY
FINANCIAL EXECUTIVE
FINANCIAL PLANNING
FINANCIAL SERVICES WEEK
FINANCIAL TIMES
FINANCIAL WORLD
FORBES
FORTUNE
FUTURES
GLOBAL FINANCE
GLOBAL INVESTOR
INDUSTRY WEEK
INSTITUTIONAL INVESTOR
INTERNATIONAL HERALD TRIBUNE
INVESTMENT DEALER'S DIGEST
INVESTOR'S BUSINESS DAILY
KIPLINGER PERSONAL FINANCE
KIPLINGER CALIF. LETTER (The)
KIPLINGER FLORIDA LETTER
KIPLINGER TEXAS LETTER
KIPLINGER WASHINGTON LETTER (The)
KNIGHT/RIDDER FINANCIAL
LA TIMES
LIPPER ANALYTICAL SERVICES
MARKET CHRONICLE
MINNEAPOLIS STAR TRIBUNE
MONEY
MONEY MANAGEMENT LETTER
MOODY'S INVESTORS SERVICE, INC.
NATIONAL THRIFT NEWS
NATIONAL UNDERWRITER
NELSON'S RESEARCH MONTHLY
NEW YORK DAILY NEWS
NEW YORK NEWSDAY
NEW YORK TIMES (The)
NEWSWEEK
NIGHTLY BUSINESS REPORT (The)
PENSION WORLD
PENSIONS & INVESTMENT AGE
PERSONAL INVESTOR
PORTFOLIO LETTER
REGISTERED REPRESENTATIVE
RUETERS
SECURITIES PRODUCT NEWS
SECURITIES WEEK
SECURITY TRADERS HANDBOOK
SAINT PAUL PIONEER PRESS
STANDARD & POOR'S CORPORATION
STANGER'S INVESTMENT ADVISOR
STANGER'S SELLING MUTUAL FUNDS
STOCK MARKET MAGAZINE (The)
TIME
TRUSTS & ESTATES
U.S. NEWS & WORLD REPORT
UNITED PRESS INTERNATIONAL
USA TODAY
WALL STREET JOURNAL (The)
WASHINGTON POST (The)
FORTIS BENEFITS INSURANCE COMPANY
WOODBURY BULLETIN
WIESENBERGER INVESTMENT COMPANIES
SERVICES
- ---------
96682 (Rev. 3/98)
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PART C
Fortis Worldwide Portfolios, Inc.
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements are incorporated by reference to the Registrant's
Annual Report previously filed with the Commission.
(b) Exhibits:
1. Articles of Incorporation (7)
2. Bylaws *
3. Not applicable
4. Not applicable
5.1 Investment Advisory and Management Agreement (2)
5.2 Investment Advisory and Management Agreement for Series B *
6.1 Underwriting and Distribution Agreement (4)
6.2 Amendment No. 1 to Underwriting and Distribution Agreement *
6.3 Dealer Sales Agreement (4)
7. Not applicable
8.1 Custody Agreement (1)
8.2 Exhibit A to Custody Agreement *
9. Not applicable
10.1 Opinion and Consent of Dorsey & Whitney LLP for Series A (3)
10.2 Opinion and Consent of Dorsey & Whitney LLP for Series B *
11. Consent of KPMG Peat Marwick LLP *
12. Not applicable
13. Not applicable
14. Model plan establishing retirement plan (3) and (5)
15. Plan of Distribution *
16. Performance Quotation Computation Schedule *
17. Financial Data Schedule *
18. Plan pursuant to Rule 18f-3 under the Investment Company Act of 1940
(6)
- -----------------------------------------
(1) Incorporated by reference to Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form N-1A filed with the Commission
in July 1992.
(2) Incorporated by reference to a Pre-Effective Amendment to the Registrant's
Registration Statement on Form N-1A filed with the Commission in June
1991.
(3) Incorporated by reference to Post-Effective Amendment No. 51 to the
Registration Statement of Fortis Growth Fund, Inc. (File No. 33-14784) on
Form N-1A filed with the Commission in December 1991.
1
<PAGE>
(4) Incorporated by reference to Post-Effective Amendment No. 5 to the
Registrant's Registration Statement on Form N-1A filed with the Commission
in September 1994.
(5) Incorporated by reference to Post-Effective Amendment No. 72 to the
Registration Statement of Fortis Equity Portfolios, Inc. (File No. 2-11387)
on Form N-1A filed with the Commission in November 1993.
(6) Incorporated by reference to Post-Effective Amendment No. 8 to the
Registrant's Registration Statement on Form N-1A filed with the Commission
in February 1996.
(7) Incorporated by reference to Post-Effective Amendment No. 10 to the
Registrant's Registration Statement on Form N-1A filed with the Commission
in December 1997.
* Filed herewith.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
No person is directly or indirectly controlled by or under common control
with the Registrant.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of January 31, 1998, the number of record holders of each class of
Common Shares was:
<TABLE>
<CAPTION>
Number of Record Holders
----------------------------------------------------
Class A Class B Class C Class H
------- ------- ------- -------
<S> <C> <C> <C> <C>
Global Portfolio 21,325 3,227 905 5,046
</TABLE>
International Portfolio was not in existence at this time.
ITEM 27. INDEMNIFICATION
Refer to the Pre-Effective Amendment to the Registrant's Registration
Statement filed with the Commission in June 1991, which is incorporated herein
by reference.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Information on the business of the Adviser is described in the Statement of
Additional Information. In addition to those listed in the Statement of
Additional Information:
<TABLE>
<CAPTION>
Other Business/Employment
Name Position with Adviser During past Two Years
- ---- --------------------- -------------------------
<S> <C> <C>
Michael D. O'Connor Qualified Plan Officer Qualified Plan Officer of Fortis
Benefits Insurance Company
David C. Greenzang Money Market Portfolio Debt securities manager with
Officer Fortis, Inc.
</TABLE>
2
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Fortis Advantage Portfolios, Inc.
Fortis Equity Portfolios, Inc.
Fortis Fiduciary Fund, Inc.
Fortis Income Portfolios, Inc.
Fortis Money Portfolios, Inc.
Fortis Securities, Inc.
Fortis Series Fund, Inc.
Fortis Worldwide Portfolios, Inc.
Variable Account C of Fortis Benefits Insurance Company
Variable Account D of Fortis Benefits Insurance Company
(b) In addition to those listed in the Statement of Additional Information:
Positions and Offices Positions and Offices
Name/Address with Underwriter with Registrant
------------ ---------------------- ---------------------
Carol M. Houghtby 2nd Vice President and Accounting Officer
500 Bielenberg Drive Treasurer
Woodbury, MN
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The physical possession of the accounts, books, and other documents
required to be maintained by Section 31(a) of the Investment Company Act of 1940
and Rules 3la-1 to 3la-3 promulgated thereunder is maintained by the Registrant
at Fortis Advisers, Inc., 500 Bielenberg Drive, Woodbury, MN 55125.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
(a) Not applicable.
(b) Registrant, on behalf of International Equity Portfolio, undertakes to file
a post-effective amendment, using financial statements which need not be
certified, within four to six months from the date the Portfolio commences
business.
(c) Each recipient of a prospectus of any series of the Registrant may request
the latest Annual Report of such series, and such Annual Report will be
furnished by the Registrant without charge.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement on Form N-1A
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Woodbury and State of Minnesota on the
26th day of February 1998.
FORTIS WORLDWIDE PORTFOLIOS, INC.
(Registrant)
By /s/ Dean C. Kopperud
-------------------------------
Dean C. Kopperud, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
/s/ Dean C. Kopperud President (principal February 26, 1998
- ------------------------------- executive officer)
Dean C. Kopperud
/s/ Tamara L. Fagely Treasurer (principal February 26, 1998
- ------------------------------- financial and
Tamara L. Fagely accounting officer)
Richard D. Cutting* Director
Allen R. Freedman* Director
Robert M. Gavin* Director
Benjamin S. Jaffray* Director
Jean L. King* Director
Edward M. Mahoney* Director
Robb L. Prince* Director
Leonard J. Santow* Director
Noel S. Shadko Director
Joseph M. Wikler* Director
*By /s/ Dean C. Kopperud February 26, 1998
-----------------------------
Dean C. Kopperud, Attorney-in-Fact
(Pursuant to a Power of Attorney dated March 21, 1996)
<PAGE>
EXHIBIT INDEX
TO
REGISTRATION STATEMENT
OF
FORTIS WORLDWIDE PORTFOLIOS, INC.
Exhibit
2 Bylaws
5.2 Investment Advisory and Management Agreement for Series B
6.2 Amendment #1 to Underwriting and Distribution Agreement
8.2 Exhibit A to Custody Agreement
10.2 Opinion and Consent of Dorsey & Whitney P.L.L.P.
11 Consent of KPMG Peat Marwick LLP
15 Plan of Distribution
16 Performance Quotation Computation Schedule
17 Financial Data Schedule
<PAGE>
As amended and restated
effective September 18, 1997
AMENDED AND RESTATED
BYLAWS
OF
FORTIS WORLDWIDE PORTFOLIOS, INC.
(formerly AMEV Worldwide Portfolios, Inc.)
ARTICLE I
OFFICES, CORPORATE SEAL
Section 1.01. NAME. The name of the corporation is Fortis Worldwide
Portfolios, Inc. The name of the series represented by Series A Common Shares
shall be "Fortis Global Growth Portfolio;" and the name of the series
represented by the Corporation's Series B Common Shares shall be "Fortis
International Equity Portfolio."
Section 1.02. REGISTERED OFFICE. The registered office of the
corporation in Minnesota shall be that set forth in the Articles of
Incorporation or in the most recent amendment of the Articles of Incorporation
or resolution of the directors filed with the Secretary of State of Minnesota
changing the registered office.
Section 1.03. OTHER OFFICES. The corporation may have such other
offices and places of business, within or without the State of Minnesota, as the
directors shall, from time to time, determine.
Section 1.04. CORPORATE SEAL. The corporate seal shall be circular
in form and shall have inscribed thereon the name of the corporation and the
word "Minnesota" and the words "Corporate Seal." The form of the seal shall be
subject to alteration by the Board of Directors and the seal may be used by
causing it or a facsimile to be impressed or affixed or printed or otherwise
reproduced. Any officer or director of the corporation shall have authority to
affix the corporate seal of the corporation to any document requiring the same.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 2.01. PLACE AND TIME OF MEETINGS. Except as provided
otherwise by Minnesota Statutes Chapter 302A, meetings of the shareholders may
be held at any place, within or without the State of Minnesota, designated by
the directors and, in the absence of such designation, shall be held at the
registered office of the corporation in the State of Minnesota. The directors
shall designate the time of day for each meeting and, in the absence of such
designation, every meeting of shareholders shall be held at ten o'clock a.m.
<PAGE>
Section 2.02. REGULAR MEETINGS. Annual meetings of shareholders are
not required by these Bylaws. Regular meetings shall be held only with such
frequency and at such times and places as provided in and required by law.
Section 2.03. SPECIAL MEETINGS. Special meetings of the shareholders
may be held at any time and for any purpose and may be called by the Chairman of
the Board, the President, and two or more directors, or by one or more
shareholders holding ten percent (10%) or more of the shares entitled to vote on
the matters to be presented to the meeting, except that a special meeting for
the purpose of considering any action directly or indirectly to facilitate or
effect a business combination, including any action to change or otherwise
affect the composition of the Board of Directors for that purpose, must be
called by 25% of the voting power of all shares entitled to vote.
Section 2.04. QUORUM; ADJOURNED MEETINGS. The holders of ten percent
(10%) of the shares outstanding and entitled to vote at the meeting shall
constitute a quorum for the transaction of business at any regular or special
shareholders' meeting. In case a quorum shall not be present at a meeting,
those present in person or by proxy shall adjourn to such day as they shall, by
majority vote, agree upon without further notice other than by announcement at
the meeting at which such adjournment is taken. If a quorum is present, a
meeting may be adjourned from time to time without notice other than
announcement at the meeting. At adjourned meetings at which a quorum is
present, any business may be transacted which might have been transacted at the
meeting as originally noticed. If a quorum is present, the shareholders may
continue to transact business until adjournment notwithstanding the withdrawal
of enough shareholders to leave less than a quorum.
Section 2.05. VOTING. At each meeting of the shareholders, every
shareholder shall have the right to vote in person or by proxy. Each
shareholder, unless the Articles of Incorporation or applicable laws provide
otherwise, shall have one vote for each share having voting power registered in
his name on the books of the corporation. Upon the demand of any shareholder,
the vote upon any question before the meeting shall be by written ballot.
Except as otherwise specifically provided by these Bylaws or as required by
provisions of the Investment Company Act of 1940 or other applicable laws, all
questions shall be decided by a majority vote of the number of shares entitled
to vote and represented at the meeting at the time of the vote. If the
matter(s) to be presented at a regular or special meeting relates only to a
particular portfolio or portfolios of the corporation, then only the
shareholders of the series of stock issued by such portfolio or portfolios are
entitled to vote on such matter(s).
Section 2.06. VOTING-PROXIES. The right to vote by proxy shall exist
only if the instrument authorizing such proxy to act shall have been executed in
writing by the shareholder himself or by his attorney thereunto duly authorized
in writing.
-2-
<PAGE>
No proxy shall be voted after three years from its date unless it provides for a
longer period.
Section 2.07. CLOSING OF BOOKS. The Board of Directors may fix a
time, not exceeding sixty (60) days preceding the date of any meeting of
shareholders, as a record date for the determination of the shareholders
entitled to notice of, and to vote at, such meeting, notwithstanding any
transfer of shares on the books of the corporation after any record date so
fixed. If the Board of Directors fails to fix a record date for determination
of the shareholders entitled to notice of, and to vote at, any meeting of
shareholders, the record date shall be the thirtieth (30th) day preceding the
date of such meeting.
Section 2.08. NOTICE OF MEETINGS. The Secretary or an Assistant
Secretary shall mail to each shareholder, shown by the books of the corporation
to be a holder of record of voting shares, at his address as shown by the books
of the corporation, a notice setting out the time and date and place of each
regular meeting and each special meeting, which notice shall be mailed at least
ten (10) days prior thereto; except that notice of a meeting at which an
agreement of merger or consolidation is to be considered shall be mailed to all
shareholders of record, whether entitled to vote or not, at least two (2) weeks
prior thereto; and except that notice of a meeting at which a proposal to
dispose of all, or substantially all, of the property and assets of the
corporation is to be considered shall be mailed to all shareholders of record,
whether entitled to vote or not, at least ten (10) days prior thereto; and
except that notice of a meeting at which a proposal to dissolve the corporation
or to amend the Articles of Incorporation is to be considered shall be mailed to
all shareholders of record, whether entitled to vote or not, at least ten (10)
days prior thereto. Every notice of any special meeting shall state the purpose
or purposes for which the meeting has been called, pursuant to Section 2.03, and
the business transacted at all special meetings shall be confined to the purpose
stated in the call.
Section 2.09. WAIVER OF NOTICE. Notice of any regular or special
meeting may be waived either before, at or after such meeting in writing signed
by each shareholder or representative thereof entitled to vote the shares so
represented.
ARTICLE III
DIRECTORS
Section 3.01. NUMBER, QUALIFICATIONS AND TERM OF OFFICE. Until the
first meeting of shareholders, or until the directors increase their number by
resolution, the number of directors shall be the number named in the Articles of
Incorporation. Thereafter, the number of directors shall be established by
resolution of the shareholders (subject to the authority of the Board of
Directors to increase the
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<PAGE>
number of directors as permitted by law), but shall not be less than the lesser
of (i) the number of shareholders of record and beneficially, or (ii) three (3).
In the absence of such resolution, the number of directors shall be the number
last fixed by the shareholders or the Board of Directors, or the Articles of
Incorporation. Directors may but need not be shareholders. Each of the
directors shall hold office until the regular meeting of shareholders next held
after his election and until his successor shall have been elected and shall
qualify, or until he shall resign, or shall have been removed as hereinafter
provided.
Section 3.02. ELECTION OF DIRECTORS. Except as otherwise provided in
Section 3.11 and 3.12 hereof, the directors shall be elected at all regular
shareholders' meeting. Directors may be elected at a special shareholders'
meeting, provided that the notice of such meeting shall contain mention of such
purpose. At each shareholders' meeting for the election of directors, the
directors shall be elected by a plurality of the votes validly cast at such
election. The shareholders of each series of stock of the corporation shall be
entitled to vote for directors and shall have equal voting power.
Section 3.03. GENERAL POWERS.
(a) The property, affairs and business of the corporation shall be
managed by the Board of Directors, which may exercise all the powers of the
corporation except those powers vested solely in the shareholders of the
corporation by statute, the Articles of Incorporation, or these Bylaws, as
amended.
(b) All acts done by any meeting of the Directors or by any person
acting as a director, so long as his successor shall not have been duly elected
or appointed, shall, notwithstanding that it be afterwards discovered that there
was some defect in the election of the directors or such person acting as
aforesaid or that they or any of them were disqualified, be as valid as if the
directors or such other person, as the case may be, had been duly elected and
were or was qualified to be directors or a director of the corporation.
Section 3.04. POWER TO DECLARE DIVIDENDS.
(a) The Board of Directors, from time to time as they may deem
advisable, may declare and pay dividends in cash or other property of the
corporation, out of any source available for dividends, to the shareholders of
each series of stock of the corporation according to their respective rights and
interests in the investment portfolio of the corporation issuing such series of
stock.
(b) The Board of Directors shall cause to be accompanied by a written
statement any dividend payment wholly or partly from any source other than
-4-
<PAGE>
(i) each investment portfolio's accumulated and accrued
undistributed net income (determined in accordance with generally
accepted accounting practice and the rules and regulations of the
Securities and Exchange Commission then in effect) and not including
profits or losses realized upon the sale of securities or other
properties; or
(ii) each investment portfolio's net income so determined for the
current or preceding fiscal year.
Such statement shall adequately disclose the source or sources of such payment
and the basis of calculation, and shall be in such form as the Commission may
prescribe.
(c) Notwithstanding the above provisions of this Section 3.04, the
Board of Directors may at any time declare and distribute pro rata among the
shareholders of each series of stock a "stock dividend" out of each portfolio's
authorized but unissued shares of stock, including any shares previously
purchased by a portfolio of the corporation.
Section 3.05. ANNUAL MEETING. The Board of Directors shall meet
annually at the registered office of the corporation, or at such other place
within or without the State of Minnesota as may be designated by the Board of
Directors, for the purpose of electing the officers of the corporation and for
the transaction of such other business as shall come before the meeting.
Section 3.06. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held from time to time at such time and place within or
without the State of Minnesota as may be fixed by resolution adopted by a
majority of the whole Board of Directors.
Section 3.07. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President, or by any
two of the directors and shall be held from time to time at such time and place
as may be designated in the notice of such meeting.
Section 3.08. NOTICE OF MEETINGS. Unless otherwise required by
Statute, no notice need be given of any annual or regular meeting of the Board
of Directors. Notice of each special meeting of the Board of Directors shall be
given by the Secretary who shall give at least twenty-four (24) hours' notice
thereof to each director by mail, telephone, telegram or in person.
Section 3.09. WAIVER OF NOTICE. Notice of any meeting of the Board
of Directors may be waived either before, at, or after such meeting in writing
signed by each director. A director, by his attendance and participation in the
action taken at
-5-
<PAGE>
any meeting of the Board of Directors, shall be deemed to have waived notice of
such meeting.
Section 3.10. QUORUM. A majority of the whole Board of Directors
shall constitute a quorum for the transaction of business except that, when a
vacancy or vacancies exist, a majority of the remaining directors (provided such
majority consists of not less than the lesser of (i) the number of directors
required by Section 3.02, or (ii) two (2) directors) shall constitute a quorum.
Section 3.11. VACANCIES; NEWLY CREATED DIRECTORSHIPS. Vacancies in
the Board of Directors of this corporation occurring by reason of death,
resignation or increase in the number of directors by the shareholders to the
minimum number required by Section 3.01 or by the Board pursuant to Section
3.01, shall be filled for the unexpired term by a majority of the remaining
directors of the Board although less than a quorum; newly created directorships
resulting from an increase in the authorized number of directors by action of
the Board of Directors as permitted by Section 3.01 may be filled by a
two-thirds (2/3) vote of the directors serving at the time of such increase; and
each person so elected shall be a director until his successor is elected by the
shareholders, who may make such election at their next regular meeting or at any
meeting duly called for that purpose; provided, however, that no vacancy can be
filled as provided above if prohibited by the provisions of the Investment
Company Act of 1940.
Section 3.12. REMOVAL. Removal of directors shall be governed by the
provisions of Section 302A.233 of the Minnesota Statutes or other applicable
provisions of the Minnesota Statutes or successors thereto.
Section 3.13. EXECUTIVE COMMITTEE. The Board of Directors, by
unanimous affirmative action of the entire Board, may establish an Executive
Committee consisting of two (2) or more directors. Such Committee may meet at
stated times or on notice of all given by any of their own number. During the
intervals between meetings of the Board of Directors, such Committee shall
advise and aid the officers of the corporation in all matters concerning the
business and affairs of the corporation and, generally, perform such duties and
exercise such powers as may be directed or delegated by the Board of Directors
from time to time. The Board of Directors may, by unanimous affirmative action
of the entire Board, delegate to such Committee authority to exercise all the
powers of the Board of Directors, except the power to amend the Bylaws and to
take action on matters reserved to the entire Board by the Investment Company
Act of 1940, while the Board of Directors is not in session. Vacancies in the
membership of the Committee shall be filled by the Board of Directors at a
regular meeting or at a special meeting called for that purpose.
-6-
<PAGE>
Section 3.14. OTHER COMMITTEES. The Board of Directors may establish
other committees from time to time making such regulations as it deems advisable
with respect to the membership, authority and procedures of such committees.
Section 3.15. WRITTEN ACTION. Any action which might be taken at a
meeting of the Board of Directors, or any duly constituted committee thereof,
may be taken without a meeting if done in writing and signed by a majority of
the directors or committee members, provided that no action may be taken by
written action if such action must be taken at a meeting in person pursuant to
the requirements of the Investment Company Act of 1940, or the rules or
regulations thereunder.
Section 3.16. COMPENSATION. Directors who are not salaried officers
of this corporation shall receive such fixed sum per meeting attended or such
fixed annual sum as shall be determined, from time to time, by resolution of the
Board of Directors. All directors may receive their expenses, if any, of
attendance at meetings of the Board of Directors or any committee thereof.
Nothing herein contained shall be construed to preclude any director from
serving this corporation in any other capacity and receiving proper compensation
therefor.
ARTICLE IV
OFFICERS
Section 4.01. NUMBER. The officers of the corporation shall consist
of a Chairman of the Board (if one is elected by the Board), the President, one
or more Vice Presidents (if desired by the Board), a Secretary and one or more
Assistant Secretaries, a Treasurer and one or more Assistant Treasurers, and
such other officers and agents as may, from time to time, be elected by the
Board of Directors.
Section 4.02. ELECTION, TERM OF OFFICE AND QUALIFICATIONS. At each
annual meeting of the Board of Directors, the Board shall elect, from within or
without their number, the President, the Secretary, the Treasurer and such other
officers as may be deemed advisable. Such officers shall hold office until the
next annual meeting of the directors or until their successors are elected and
qualified. The President and all other officers who may be directors shall
continue to hold office until the election and qualification of their
successors, notwithstanding an earlier termination of their directorship.
Section 4.03. RESIGNATION. Any officer may resign his office at any
time by delivering a written resignation to the Board of Directors, the
President, the Secretary, or any Assistant Secretary. Unless otherwise
specified therein, such resignation shall take effect upon delivery.
-7-
<PAGE>
Section 4.04. REMOVAL AND VACANCIES. Any officer may be removed from
his office by a majority of the whole Board of Directors, with or without cause.
Such removal, however, shall be without prejudice to the contract rights of the
person so removed. If there be a vacancy among the officers of the corporation
by reason of death, resignation or otherwise, such vacancy shall be filled for
the unexpired term by the Board of Directors.
Section 4.05. CHAIRMAN OF THE BOARD. The Chairman of the Board, if
one is elected, shall preside at all meetings of the shareholders and directors
and shall have such other duties as may be prescribed, from time to time, by the
Board of Directors.
Section 4.06. PRESIDENT. The President shall have general active
management of the business of the corporation. In the absence of the Chairman
of the Board, he shall preside at all meetings of the shareholders and
directors. He shall be the chief executive officer of the corporation and shall
see that all orders and resolutions of the Board of Directors are carried into
effect. He shall be ex officio a member of all standing committees. He may
execute and deliver, in the name of the corporation, any deeds, mortgages,
bonds, contracts or other instruments pertaining to the business of the
corporation and, in general, shall perform all duties usually incident to the
office of President. He shall have such other duties as may, from time to time,
be prescribed by the Board of Directors.
Section 4.07. VICE PRESIDENT. Each Vice President shall have such
powers and shall perform such duties as may be specified in the Bylaws or
prescribed by the Board of Directors or by the President. In the event of
absence or disability of the President, Vice Presidents shall succeed to his
power and duties in the order designated by the Board of Directors.
Section 4.08. SECRETARY. The Secretary shall be secretary of, and
shall attend all, meetings of the shareholders and Board of Directors and shall
record all proceedings of such meetings in the minute book of the corporation.
He shall give proper notice of meetings of shareholders and directors. He shall
keep the seal of the corporation and shall affix the same to any instrument
requiring it and may, when necessary, attest the seal by his signature. He
shall perform such other duties as may, from time to time, be prescribed by the
Board of Directors or by the President.
Section 4.09. TREASURER. The Treasurer shall keep accurate accounts
of all moneys of the corporation received or disbursed. He shall deposit all
moneys, drafts and checks in the name of, and to the credit of, the corporation
in such banks and depositories as a majority of the whole Board of Directors
shall, from time to time, designate. He shall have power to endorse, for
deposit, all notes, checks and drafts received by the corporation. He shall
disburse the funds of the corporation, as ordered by the Board of Directors,
making proper vouchers therefor. He shall
-8-
<PAGE>
render to the President and the directors, whenever required, an account of all
his transactions as Treasurer and of the financial condition of the corporation,
and shall perform such other duties as may, from time to time, be prescribed by
the Board of Directors or by the President.
Section 4.10. ASSISTANT SECRETARIES. At the request of the
Secretary, or in his absence or disability, any Assistant Secretary shall have
power to perform all the duties of the Secretary and, when so acting, shall have
all the powers of, and be subject to all restrictions upon, the Secretary. The
Assistant Secretaries shall perform such other duties as from time to time may
be assigned to them by the Board of Directors or the President.
Section 4.11. ASSISTANT TREASURERS. At the request of the Treasurer,
or in his absence or disability, any Assistant Treasurer shall have power to
perform all the duties of the Treasurer, and when so acting, shall have all the
powers of, and be subject to all the restrictions upon, the Treasurer. The
Assistant Treasurers shall perform such other duties as from time to time may be
assigned to them by the Board of Directors or the President.
Section 4.12. COMPENSATION. The officers of this corporation shall
receive such compensation for their services as may be determined, from time to
time, by resolution of the Board of Directors.
Section 4.13. SURETY BONDS. The Board of Directors may require any
officer or agent of the corporation to execute a bond (including, without
limitation, any bond required by the Investment Company Act of 1940 and the
rules and regulations of the Securities and Exchange Commission) to the
corporation in such sum and with such surety or sureties as the Board of
Directors may determine, conditioned upon the faithful performance of his duties
to the corporation, including responsibility for negligence and for the
accounting of any of the corporation's property, funds or securities that may
come into his hands. In any such case, a new bond of like character shall be
given at least every six years, so that the date of the new bond shall not be
more than six years subsequent to the date of the bond immediately preceding.
ARTICLE V
SHARES AND THEIR TRANSFER AND REDEMPTION
Section 5.01. CERTIFICATES FOR SHARES.
(a) Every owner of shares of the corporation shall be entitled to a
certificate, to be in such form as shall be prescribed by the Board of
Directors, certifying the number of shares of the corporation owned by him. The
certificates for such shares shall be numbered in the order in which they shall
be issued and
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<PAGE>
shall be signed, in the name of the corporation, by the President or a Vice
President and by the Treasurer, or by such officers as the Board of Directors
may designate. Such signatures may be facsimile if authorized by the Board of
Directors. Every certificate surrendered to the corporation for exchange or
transfer shall be cancelled, and no new certificate or certificates shall be
issued in exchange for any existing certificate until such existing certificate
shall have been so cancelled, except in cases provided for in Section 5.08.
(b) In case any officer, transfer agent or registrar who shall have
signed any such certificate, or whose facsimile signature has been placed
thereon, shall cease to be such an officer (because of death, resignation or
otherwise) before such certificate is issued, such certificate may be issued and
delivered by the corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
Section 5.02. ISSUANCE OF SHARES. The Board of Directors is
authorized to cause to be issued shares of the corporation up to the full amount
authorized by the Articles of Incorporation in such series and in such amounts
as may be determined by the Board of Directors and as may be permitted by law.
No shares shall be allotted except in consideration of cash or of an amount
transferred from surplus to stated capital upon a share dividend. At the time
of such allotment of shares, the Board of Directors making such allotments shall
state, by resolution, their determination of the fair value to the corporation
in monetary terms of any consideration other than cash for which shares are
allotted. The amount of consideration to be received in cash, or otherwise,
shall not be less than the par value of the shares so allotted. No shares of
stock issued by the corporation shall be issued, sold, or exchanged by or on
behalf of the corporation for any amount less than the net asset value per share
of the shares outstanding as determined pursuant to Article XI hereunder.
Section 5.03. REDEMPTION OF SHARES. Upon the demand of any
shareholder this corporation shall redeem any share of stock issued by it held
and owned by such shareholder at the net asset value thereof as determined
pursuant to Article XI hereunder. The Board of Directors may suspend the right
of redemption or postpone the date of payment during any period when: (a)
trading on the New York Stock Exchange is restricted or such Exchange is closed
for other than weekends or holidays; (b) the Securities and Exchange Commission
has by order permitted such suspension; or (c) an emergency as defined by rules
of the Securities and Exchange Commission exists, making disposal of portfolio
securities or valuation of net assets of the corporation not reasonably
practicable.
Section 5.04. TRANSFER OF SHARES. Transfer of shares on the books of
the corporation may be authorized only by the shareholder named in the
certificate, or the shareholder's legal representative, or the shareholder's
duly authorized attorney-in-fact, and upon surrender of the certificate or the
certificates for such
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<PAGE>
shares or a duly executed assignment covering shares held in unissued form. The
corporation may treat, as the absolute owner of shares of the corporation, the
person or persons in whose name shares are registered on the books of the
corporation.
Section 5.05. REGISTERED SHAREHOLDERS. The corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise expressly provided by the laws of Minnesota.
Section 5.06. TRANSFER AGENTS AND REGISTRARS. The Board of Directors
may from time to time appoint or remove transfer agents and/or registrars of
transfers of shares of stock of the corporation, and it may appoint the same
person as both transfer agent and registrar. Upon any such appointment being
made all certificates representing shares of capital stock thereafter issued
shall be countersigned by one of such transfer agents or by one of such
registrars of transfers or by both and shall not be valid unless so
countersigned. If the same person shall be both transfer agent and registrar,
only one countersignature by such person shall be required.
Section 5.07. TRANSFER REGULATIONS. The shares of stock of the
corporation may be freely transferred, and the Board of Directors may from time
to time adopt rules and regulations with reference to the method of transfer of
the shares of stock of the corporation.
Section 5.08. LOST, STOLEN, DESTROYED AND MUTILATED CERTIFICATES.
The holder of any stock of the corporation shall immediately notify the
corporation of any loss, theft, destruction or mutilation of any certificate
therefor, and the Board of Directors may, in its discretion, cause to be issued
to him a new certificate or certificates of stock upon the surrender of the
mutilated certificate or in case of loss, theft or destruction of the
certificate, upon satisfactory proof of such loss, theft or destruction, after
the owner of the lost, stolen or destroyed certificate, or his legal
representatives, gives to the corporation and to such registrar or transfer
agent as may be authorized or required to countersign such new certificate or
certificates a bond, in such sum as they may direct, and with such surety or
sureties, as they may direct, as indemnity against any claim that may be made
against them or any of them on account of or in connection with the alleged
loss, theft, or destruction of any such certificate.
Section 5.09. REDEMPTION OF SMALL SHAREHOLDER ACCOUNTS. If the value
of a shareholder's investments in the corporation becomes less than $500 (or
such other amount as may be determined from time to time by the Board of
Directors) as a result of a redemption or transfer of shares, the corporation's
officers are authorized, in their discretion, on behalf of the corporation, to
redeem such
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<PAGE>
shareholder's entire interest and remit such amount, provided that such a
redemption will only be effected by the corporation following (a) the mailing by
the corporation to such shareholder of a "notice of intention to redeem," and
(b) the passage of such time period as may be determined by the Board of
Directors, during which time the shareholder will have the opportunity to make
an additional investment in the corporation to increase the value of such
shareholder's account to at least such minimum amount.
ARTICLE VI
DIVIDENDS, SURPLUS, ETC.
Section 6.01. The corporation's net investment income will be
determined, and its dividends shall be declared and made payable at such time(s)
as the Board of Directors shall determine; dividends shall be payable to
shareholders of record as of the date of declaration.
It shall be the policy of the corporation to qualify for and elect the
tax treatment applicable to regulated investment companies under the Internal
Revenue Code, so that the corporation will not be subjected to Federal income
tax on such part of its income or capital gains as it distributes to
shareholders.
ARTICLE VII
BOOKS AND RECORDS, AUDIT, FISCAL YEAR
Section 7.01. BOOKS AND RECORDS. The Board of Directors of the
corporation shall cause to be kept:
(1) a share register, giving the names and addresses of the
shareholders, the number and classes held by each, and the dates
on which the certificates therefor were issued;
(2) records of all proceedings of shareholders and directors; and
(3) such other records and books of account as shall be necessary and
appropriate to the conduct of the corporate business.
Section 7.02. DOCUMENTS KEPT AT REGISTERED OFFICE. The Board of
Directors shall cause to be kept at the registered office of the corporation
originals or copies of:
(1) records of all proceedings of shareholders and directors;
(2) Bylaws of the corporation and all amendments thereto; and
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<PAGE>
(3) reports made to any or all of the shareholders within the last
preceding three (3) years.
Section 7.03. AUDIT, ACCOUNTANT.
(a) The Board of Directors shall cause the records and books of
account of the corporation to be audited at least once in each fiscal year and
at such other times as it may deem necessary or appropriate.
(b) The corporation shall employ an independent certified public
accountant or firm of independent certified public accountants as its Accountant
to examine the accounts of the corporation and to sign and certify financial
statements filed by the corporation. The Accountant's certificates and reports
shall be addressed both to the Board of Directors and to the shareholders.
(c) Any vacancy occurring between regular meetings, due to the death,
resignation or otherwise of the Accountant, may be filled by the Board of
Directors.
Section 7.04. FISCAL YEAR. The fiscal year of the corporation shall
be determined by the Board of Directors.
ARTICLE VIII
INSPECTION OF BOOKS
Section 8.01. Every shareholder of the corporation and every holder
of a voting trust certificate shall have a right to examine, in person or by
agent or attorney, at any reasonable time or times, for any proper purpose, and
at the place or places where usually kept, the share register, books of account
and records of the proceedings of the shareholders and directors and to make
extracts therefrom.
ARTICLE IX
VOTING OF STOCK HELD
Section 9.01. Unless otherwise provided by resolution of the Board of
Directors, the President, any Vice President, the Secretary or the Treasurer,
may from time to time appoint an attorney or attorneys or agent or agents of the
corporation, in the name and on behalf of the corporation, to cast the votes
which the corporation may be entitled to cast as a stockholder or otherwise in
any other corporation or association, any of whose stock or securities may be
held by the corporation, at meetings of the holders of the stock or other
securities of any such other corporation or association, or to consent in
writing to any action by any such other corporation or association, and may
instruct the person or persons so appointed as to the manner of casting such
votes or giving such consent, and may
-13-
<PAGE>
execute or cause to be executed on behalf of the corporation and under its
corporate seal, or otherwise, such written proxies, consents, waivers, or other
instruments as it may deem necessary or proper in the circumstances; or any of
such officers may themselves attend any meeting of the holders of stock or other
securities of any such corporation or association and thereat vote or exercise
any or all other powers of the corporation as the holder of such stock or other
securities of such other corporation or association, or consent in writing to
any action by any such other corporation or association.
ARTICLE X
VALUATION OF NET ASSET VALUE
Section 10.01. The net asset value per share of each series of stock
issued by the portfolios of the corporation shall be determined in good faith by
or under supervision of the officers of the corporation as authorized by the
Board of Directors as often and on such days and at such time(s) as the Board of
Directors shall determine.
ARTICLE XI
CUSTODY OF ASSETS
Section 11.01. All securities and cash owned by this corporation
shall, as hereinafter provided, be held by or deposited with a bank or trust
company having (according to its last published report) not less than two
million dollars ($2,000,000) aggregate capital, surplus and undivided profits
(the "Custodian").
This corporation shall enter into a written contract with the
Custodian regarding the powers, duties and compensation of the Custodian with
respect to the cash and securities of this corporation held by the Custodian.
Said contract and all amendments thereto shall be approved by the Board of
Directors of this corporation. In the event of the Custodian's resignation or
termination, the corporation shall use its best efforts promptly to obtain a
successor Custodian and shall require that the cash and securities owned by this
corporation held by the Custodian be delivered directly to such successor
Custodian.
ARTICLE XII
AMENDMENTS
Section 12.01. These Bylaws may be amended or altered by a vote of
the majority of the whole Board of Directors at any meeting provided that notice
of such proposed amendment shall have been given in the notice given to the
directors of such meeting. Such authority in the Board of Directors is subject
to the power of the
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<PAGE>
shareholders to change or repeal such Bylaws by a majority vote of the
shareholders present or represented at any annual or special meeting of
shareholders called for such purpose. The Board of Directors shall not make or
alter any Bylaws fixing their qualifications, classifications, term of office,
or number, except that the Board of Directors may make or alter any Bylaw to
increase their number.
ARTICLE XIII
MISCELLANEOUS
Section 13.01. INTERPRETATION. When the context in which words are
used in these Bylaws indicates that such is the intent, singular words will
include the plural and vice versa, and masculine words will include the feminine
and neuter genders and vice versa.
Section 13.02. ARTICLE AND SECTION TITLES. The titles of Sections
and Articles in these Bylaws are for descriptive purposes only and will not
control or alter the meaning of any of these Bylaws as set forth in the text.
-15-
<PAGE>
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
THIS AGREEMENT, made this 1st day of March 1998, by and between Fortis
Worldwide Portfolios, Inc., a Minnesota corporation (the "Fund") and Fortis
Advisers, Inc., a Minnesota corporation ("Advisers").
1. INVESTMENT ADVISORY AND MANAGEMENT SERVICES.
The Fund hereby engages Advisers, and Advisers hereby agrees to act, as
investment adviser for, and to manage the affairs, business and the investment
of the assets of the Fund's International Equity Portfolio. Such Portfolio is
herein referred to as the "Portfolio" and other Portfolios of the Fund from time
to time created by the Board of Directors of the Fund are herein collectively
referred to as the "Portfolios."
The investment of the assets of the Portfolio shall at all times be subject
to the applicable provisions of the Articles of Incorporation, Bylaws,
Registration Statement and current Prospectus and Statement of Additional
Information of the Fund and shall conform to the policies and purposes of the
Fund and the Portfolio as set forth in the Registration Statement and Prospectus
and Statement of Additional Information and as interpreted from time to time by
the Board of Directors of the Fund. Within the framework of the investment
policies of the Portfolio, Advisers shall have the sole and exclusive
responsibility for the management of the Portfolio and the making and execution
of all investment decisions for the Portfolio. Advisers shall report to the
Board of Directors regularly at such times and in such detail as the Board may
from time to time determine to be appropriate, in order to permit the Board to
determine the adherence of Advisers to the investment policies of the Portfolio.
Advisers shall, at its own expense, furnish the Fund suitable office space,
and all necessary office facilities, equipment and personnel for servicing the
investments of the Portfolio. Advisers shall arrange, if requested by the Fund,
for officers, employees, or other affiliates of Advisers to serve without
compensation from the Fund as directors, officers, or employees of the Fund if
duly elected to such positions by the shareholders or directors of the Fund.
Advisers hereby acknowledges that all records necessary in the operation of
the Fund, including records pertaining to its shareholders and investments, are
the property of the Fund, and in the event that a transfer of management or
investment advisory services to someone other than Advisers should ever occur,
Advisers will promptly, and at its own cost, take all steps necessary to
segregate such records and deliver them to the Fund.
<PAGE>
2. COMPENSATION FOR SERVICES.
In payment for all services, facilities, equipment and personnel, and for
other costs of Advisers hereunder, the Fund shall pay to Advisers a monthly fee
for the Portfolio, which fee shall be paid to Advisers not later than the fifth
business day of the month following the month in which such services are
rendered. Such monthly fee shall be at the rate or rates set forth below and
shall be based on the average of the net asset values of all of the issued and
outstanding shares of the Portfolio as determined as of the close of each
business day of the month pursuant to the Articles of Incorporation, Bylaws and
currently effective Prospectus and Statement of Additional Information of the
Fund. The following table sets forth the fees on a monthly and annual basis:
<TABLE>
<CAPTION>
Monthly Equivalent Average Asset
Rate Annual Rate Values of the Portfolio
------- ----------- -----------------------
<S> <C> <C> <C>
1/12 of 1.00% 1.00% On the first $500,000,000
Portfolio 1/12 of .9% .9% On average assets over
$500,000,000
</TABLE>
The fees shall be prorated for any fraction of a month at the commencement
or termination of this Agreement.
3. ALLOCATION OF EXPENSES.
(a) In addition to the fee described in Section 2 hereof, the Fund shall
pay all its expenses which are not assumed by Advisers and/or Fortis Investors,
Inc. ("Investors"). These Fund expenses include, by way of example, but not by
way of limitation, the fees and expenses of directors and officers of the Fund
who are not "affiliated persons" of Advisers, interest expenses, taxes,
brokerage fees and commissions, fees and expenses of registering and qualifying
the Fund and its shares for distribution under federal and state securities
laws, expenses of preparing prospectuses and of printing and distributing
prospectuses annually to existing shareholders, custodian charges, auditing and
legal expenses, insurance expense, association membership dues, and the expense
of reports to shareholders, shareholders' meetings, and proxy solicitations.
Advisers shall bear the costs of acting as the Fund's transfer agent, registrar,
and dividend disbursing agent.
(b) Advisers or Investors shall bear all promotional expenses in
connection with the distribution of the Fund's shares, including paying for
prospectuses and shareholder reports for new shareholders, and the costs of
sales literature.
-2-
<PAGE>
4. LIMIT ON EXPENSES.
Advisers reserves the right, but shall not be obligated, to institute
further voluntary expense reimbursement programs, which shall be in such amounts
and based upon such terms and conditions as Advisers, in its sole and absolute
discretion, determines. Furthermore, Advisers reserves the absolute right to
discontinue any of such reimbursement programs at any time without notice to the
Fund.
5. FREEDOM TO DEAL WITH THIRD PARTIES.
Advisers shall be free to render services to others similar to those
rendered under this Agreement or of a different nature except as such services
may conflict with the services to be rendered or the duties to be assumed
hereunder.
6. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT.
The effective date of this Agreement shall be March 1, 1998. Wherever
referred to in this Agreement, the vote or approval of the holders of a majority
of the outstanding voting securities of the Portfolio or the Fund shall mean the
vote of 67% or more of such securities if the holders of more than 50% of such
securities are present in person or by proxy or the vote of more than 50% of
such securities, whichever is less.
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect only so long as such continuance is specifically approved at
least annually (a) by the Board of Directors of the Fund, or with respect to the
Portfolio by the vote of the holders of a majority of the outstanding voting
securities of the Portfolio, and (b) by a majority of the directors who are not
interested persons of Advisers or of the Fund cast in person at a meeting called
for the purpose of voting on such approval; provided that, if a majority of the
outstanding voting securities of the Portfolio approves this Agreement, this
Agreement shall continue in effect with respect to such approving Portfolio
whether or not the shareholders of any other Portfolios of the Fund approve this
Agreement.
This Agreement may be terminated at any time without the payment of any
penalty by the vote of the Board of Directors of the Fund or by Advisers, upon
sixty (60) days' written notice to the other party. This Agreement may be
terminated with respect to the Portfolio at any time without the payment of any
penalty by the vote of the holders of a majority of the outstanding voting
securities of the Portfolio, upon sixty (60) days' written notice to Advisers.
Any such termination may be made effective with respect to both the investment
advisory and management services provided for in this Agreement or with respect
to either of such kinds of
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<PAGE>
services. This Agreement shall automatically terminate in the event of its
assignment.
7. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until approved
by vote of the holders of a majority of the outstanding voting securities of the
Portfolio which has approved and is subject to this Agreement. In addition, if
a majority of the outstanding voting securities of the Portfolio of the Fund
votes to amend this Agreement, such amendment shall be effective with respect to
such Portfolio whether or not the shareholders of any other Portfolios of the
Fund vote to adopt such amendment.
8. NOTICES.
Any notice under this Agreement shall be in writing, addressed, delivered
or mailed, postage prepaid, to the other party at such address as such other
party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Fund and Advisers have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
FORTIS WORLDWIDE PORTFOLIOS, INC.
By
------------------------------
Dean C. Kopperud
Its President
FORTIS ADVISERS, INC.
By
------------------------------
Dean C. Kopperud
Its Chief Executive Officer
<PAGE>
AMENDMENT NO. 1 TO
UNDERWRITING AND DISTRIBUTION AGREEMENT
THIS AMENDMENT, made this 26th day of February 1998, by and between Fortis
Worldwide Portfolios, Inc., a Minnesota corporation (the "Fund") for and on
behalf of each class of shares of each of the Fund's Portfolios and Fortis
Investors, Inc., a Minnesota corporation ("Investors").
1. Section 1 of the Underwriting and Distribution Agreement dated as of
November 14, 1994 by and between the Fund and Investors is hereby amended to
state that the term "Portfolios" shall be defined to include Fortis Global
Growth Portfolio, Fortis International Equity Portfolio and any other Portfolios
which may hereafter be created by the Board of Directors of the Fund.
2. The effective date of this Amendment shall be March 1, 1998.
IN WITNESS WHEREOF, the Fund and Investors have caused this Amendment to be
executed by their duly authorized officers as of the day and year first above
written.
FORTIS WORLDWIDE PORTFOLIOS, INC.
By: /s/ Dean C. Kopperud
---------------------------------
Dean C. Kopperud
Its President
FORTIS INVESTORS, INC.
By: /s/ Dean C. Kopperud
---------------------------------
Dean C. Kopperud
Its President
<PAGE>
EXHIBIT A
(AS AMENDED THROUGH MARCH 1, 1998)
TO
CUSTODIAN AGREEMENT
BETWEEN
FORTIS WORLDWIDE PORTFOLIOS, INC.
AND
U.S. BANK NATIONAL ASSOCIATION
NAME OF SERIES EFFECTIVE DATE
-------------- --------------
Fortis Global Growth Portfolio July 16, 1992
Fortis International Equity Portfolio March 1, 1998
<PAGE>
[LETTERHEAD]
DORSEY & WHITNEY LLP
PILSBURY CENTER SOUTH
220 SOUTH SIXTH STREET
MINNEAPOLIS, MINNESOTA 55402-1498
TELEPHONE: (612) 340-2600
FAX: (612) 340-2868
Fortis Worldwide Portfolios, Inc.
500 Bielenberg Drive
Woodbury, Minnesota 55125
Ladies and Gentlemen:
We have acted as counsel to Fortis Worldwide Portfolios, Inc., a
Minnesota corporation (the "Fortis Worldwide"), in connection with a
Registration Statement on Form N-1A (File No. 33-39906) (the "Registration
Statement") relating to the sale by Fortis Worldwide of an indefinite number of
Class A, Class B, Class C and Class H shares of the Fortis Worldwide's Series B
common stock, all with a par value of $.01 per share (collectively, the
"Shares").
We have examined such documents and have reviewed such questions of
law as we have considered necessary and appropriate for the purposes of our
opinions set forth below. In rendering our opinions set forth below, we have
assumed the authenticity of all documents submitted to us as originals, the
genuineness of all signatures and the conformity to authentic originals of all
documents submitted to us as copies. We have also assumed the legal capacity
for all purposes relevant hereto of all natural persons and, with respect to all
parties to agreements or instruments relevant hereto other than Fortis
Worldwide, that such parties had the requisite power and authority (corporate or
otherwise) to execute, deliver and perform such agreements or instruments, that
such agreements or instruments have been duly authorized by all requisite action
(corporate or otherwise), executed and delivered by such parties and that such
agreements or instruments are the valid, binding and enforceable obligations of
such parties. As to questions of fact material to our opinions, we have relied
upon certificates of officers of Fortis Worldwide and of public officials. We
have also assumed that the Shares will be issued and sold as described in the
Registration Statement.
Based on the foregoing, we are of the opinion that the Shares have
been duly authorized by all requisite corporate action and, upon issuance,
delivery and payment therefore as described in the Registration Statement, will
be validly issued, fully paid and nonassessable.
<PAGE>
DORSEY & WHITNEY LLP
Fortis Worldwide Portfolios, Inc.
February 26, 1998
Page 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm under the caption
"Custodian and Counsel" in the Prospectus constituting part of the Registration
Statement.
Dated: February 26, 1998
Very truly yours,
/s/ DORSEY & WHITNEY LLP
MJR
<PAGE>
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Fortis Worldwide Portfolios, Inc.:
We consent to the use of our report incorporated herein by reference and the
references to our Firm under the headings "Financial Highlights" in Part A
and "Financial Statements" in Part B of the Registration Statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Minneapolis, Minnesota
February 26, 1998
<PAGE>
FORTIS MUTUAL FUNDS
PLAN OF DISTRIBUTION
This Plan of Distribution (the "Plan") is adopted pursuant to Rule 12b-1 (the
"Rule") under the Investment Company Act of 1940 (as amended, the "1940 Act") by
Fortis Advantage Portfolios, Inc., Fortis Equity Portfolios, Inc., Fortis
Fiduciary Fund, Inc., Fortis Growth Fund, Inc., Fortis Income Portfolios, Inc.,
Fortis Money Portfolios, Inc., Fortis Tax-Free Portfolios, Inc. and Fortis
Worldwide Portfolios, Inc., (hereinafter collectively referred to as the
"Funds"), for and on behalf of each class (each class is referred to hereinafter
as a "Class") of each Fund, and each series for those Funds that are "series"
Funds. The classes of each Fund and series that currently have adopted this
Plan, and the effective dates of such adoption are as follows:
Fortis Advantage Portfolios, Inc.
Asset Allocation Portfolio, Class A* January 31, 1992
Asset Allocation Portfolio, Class B November 14, 1994
Asset Allocation Portfolio, Class C November 14, 1994
Asset Allocation Portfolio, Class H November 14, 1994
Capital Appreciation Portfolio, Class A* January 31, 1992
Capital Appreciation Portfolio, Class B November 14, 1994
Capital Appreciation Portfolio, Class C November 14, 1994
Capital Appreciation Portfolio, Class H November 14, 1994
High Yield Portfolio, Class A* January 31, 1992
High Yield Portfolio, Class B November 14, 1994
High Yield Portfolio, Class C November 14, 1994
High Yield Portfolio, Class H November 14, 1994
Government Total Return Portfolio, Class A* January 31, 1992
Government Total Return Portfolio, Class B November 14, 1994
Government Total Return Portfolio, Class C November 14, 1994
Government Total Return Portfolio, Class H November 14, 1994
Fortis Equity Portfolios, Inc.
Fortis Capital Fund, Class A* January 31, 1992
Fortis Capital Fund, Class B November 14, 1994
Fortis Capital Fund, Class C November 14, 1994
Fortis Capital Fund, Class H November 14, 1994
Fortis Value Fund, Class A January 1, 1996
Fortis Value Fund, Class B January 1, 1996
Fortis Value Fund, Class C January 1, 1996
Fortis Value Fund, Class H January 1, 1996
<PAGE>
Fortis Growth & Income Fund, Class A January 1, 1996
Fortis Growth & Income Fund, Class B January 1, 1996
Fortis Growth & Income Fund, Class C January 1, 1996
Fortis Growth & Income Fund, Class H January 1, 1996
Fortis Fiduciary Fund, Inc.
Fortis Fiduciary Fund, Inc., Class A* January 31, 1992
Fortis Fiduciary Fund, Inc., Class B November 14, 1994
Fortis Fiduciary Fund, Inc., Class C November 14, 1994
Fortis Fiduciary Fund, Inc., Class H November 14, 1994
Fortis Growth Fund, Inc.
Fortis Growth Fund, Inc., Class A* January 31, 1992
Fortis Growth Fund, Inc., Class B November 14, 1994
Fortis Growth Fund, Inc., Class C November 14, 1994
Fortis Growth Fund, Inc., Class H November 14, 1994
Fortis Income Portfolios, Inc.
Fortis U.S. Government Securities Fund, Inc., Class A November 14, 1994
Fortis U.S. Government Securities Fund, Inc., Class B November 14, 1994
Fortis U.S. Government Securities Fund, Inc., Class C November 14, 1994
Fortis U.S. Government Securities Fund, Inc., Class H November 14, 1994
Fortis Strategic Income Fund, Inc., Class A December 1, 1997
Fortis Strategic Income Fund, Inc., Class B December 1, 1997
Fortis Strategic Income Fund, Inc., Class C December 1, 1997
Fortis Strategic Income Fund, Inc., Class H December 1, 1997
Fortis Money Portfolios, Inc.
Fortis Money Fund, Class A* January 31, 1992
Fortis Money Fund, Class B November 14, 1994
Fortis Money Fund, Class C November 14, 1994
Fortis Money Fund, Class H November 14, 1994
Fortis Tax-Free Portfolios, Inc.
National Portfolio, Class A November 14, 1994
National Portfolio, Class B November 14, 1994
National Portfolio, Class C November 14, 1994
National Portfolio, Class H November 14, 1994
<PAGE>
Minnesota Portfolio, Class A November 14, 1994
Minnesota Portfolio, Class B November 14, 1994
Minnesota Portfolio, Class C November 14, 1994
Minnesota Portfolio, Class H November 14, 1994
Fortis Worldwide Portfolios, Inc.
Fortis Global Growth Portfolio, Class A* January 31, 1992
Fortis Global Growth Portfolio, Class B November 14, 1994
Fortis Global Growth Portfolio, Class C November 14, 1994
Fortis Global Growth Portfolio, Class H November 14, 1994
Fortis International Equity Portfolio, Class A March 1, 1998
Fortis International Equity Portfolio, Class B March 1, 1998
Fortis International Equity Portfolio, Class C March 1, 1998
Fortis International Equity Portfolio, Class H March 1, 1998
*For the Class A shares identified above, with the exception of the Class A
shares of Fortis Income Portfolios, Inc., this Plan constitutes an amended and
restated plan of distribution.
- --------------------------------------------------------------------------------
1. Compensation
CLASS A
Class A of each Fund is obligated to pay the principal underwriter of the
Fund's shares, Fortis Investors, Inc. ("Investors"), a total fee in connection
with the distribution-related services provided in respect of said Class A and
in connection with the servicing of shareholder accounts of said Class A. This
fee shall be calculated and payable monthly and, with the exception of Fortis
Advantage Portfolios, Inc., and Fortis Money Portfolios, Inc., at an annual rate
of .25% of said Class A's average daily net assets. With regard to Fortis
Advantage Portfolios, Inc., the annual rate shall be .45% on the Asset
Allocation and Capital Appreciation Portfolios and .35% on the High Yield and
Government Total Return Portfolios. With regard to Fortis Money Fund, as
discussed in greater detail below, the annual rate shall be .20% of average
daily net assets. All or any portion of such total fee may be payable as a
Distribution Fee, and all or any portion of such total fee may be payable as a
Shareholder Servicing Fee, as determined from time to time by the Funds' Board
of Directors. Until further action by the Board of Directors, all of such fee
shall be designated and payable as a Distribution Fee.
CLASS B, CLASS C AND CLASS H
Each of Class B, Class C and Class H of each Fund is obligated to pay
Investors a total fee in connection with the servicing of shareholder accounts
of said Class B, Class C or Class H (as applicable) and in connection with
distribution-related services provided in respect of said Class B, Class C or
Class H (as applicable),
<PAGE>
calculated and payable monthly, at the annual rate of 1.00% of the value of said
Class B's, Class C's or Class H's (as applicable) average daily net assets. All
or any portion of such total fee may be payable as a Shareholder Servicing Fee,
and all or any portion of such total fee may be payable as a Distribution Fee,
as determined from time to time by the Funds' Board of Directors. Until further
action by the Board of Directors, .25% per annum of each Class B's, Class C's
and Class H's average net assets shall be designated and payable as a
Shareholder Servicing Fee and the remainder of such fee shall be designated as a
Distribution Fee.
2. Expenses Covered by the Plan
(a) Except as qualified herein, the Distribution Fee may be used by
Investors for the purpose of financing any activity which is primarily intended
to result in the sale of Class shares. For example, such Distribution Fee may
be used by Investors: (i) to compensate broker-dealers, including Investors and
its registered representatives, for their sale of Portfolio shares, including
the implementation of various incentive programs with respect to broker-dealers,
banks, and other financial institutions, and (ii) to pay other advertising and
promotional expenses in connection with the distribution of class shares. These
advertising and promotional expenses include, by way of example but not by way
of limitation, costs of prospectuses for other than current shareholders;
preparation and distribution of sales literature; advertising of any type;
expenses of branch offices provided jointly by Investors and any affiliate
thereof; and compensation paid to and expenses incurred by officers, employees
or representatives of Investors or of other broker-dealers, banks, or other
financial institutions, including travel, entertainment, and telephone expenses.
(a) With regard to Class A shares of Money Fund, it is contemplated that
Fortis Advisers, Inc. ("Advisers"), pursuant to an Investment Advisory and
Management Agreement dated January 31, 1992, will receive a monthly fee for
services provided for Fortis Money Fund equivalent on an annual basis to .60% of
the average daily net assets for the first $500 million of assets under
management and .55% of assets under management in excess of $500 million. Under
the Plan, Advisers will then pay to Investors on a monthly basis a fee equal to
.20% of 1% of such average daily net assets as full compensation to Investors
for its services as distributor of Fortis Money Fund shares pursuant to this
Plan; provided, however, that Advisers may directly pay expenses otherwise
payable by Investors and deduct such amounts from the .20 of 1% otherwise
payable to Investors.
(b) The Shareholder Servicing Fee may be used by Investors to provide
compensation for ongoing servicing and/or maintenance of shareholder accounts
with each applicable Class of the Fund. Compensation may be paid by Investors
to persons, including employees of Investors, and institutions who respond to
inquiries of shareholders of each applicable Class regarding their ownership of
shares of their accounts with the Fund or who provide other administrative or
accounting services not otherwise required to be provided by the Fund's
investment adviser, transfer agent or other agent of the Fund.
<PAGE>
(c) Payments under the Plan are not tied exclusively to the expenses for
shareholder servicing and distribution related activities actually incurred by
Investors, so that such payments may exceed expenses actually incurred by
Investors. The Funds' Board of Directors will evaluate the appropriateness of
the Plan and its payment terms on a continuing basis and in doing so will
consider all relevant factors, including expenses borne by Investors and amounts
it receives under the Plan.
3. Additional Payment by Advisers and Investors
The Funds' investment adviser, Fortis Advisers, Inc. ("Advisers"), and
Investors may, at their option and in their sole discretion, make payments from
their own resources to cover the costs of additional distribution and
shareholder servicing activities.
4. Approval by Shareholders
The Plan will not take effect with respect to any Class, and no fee will be
payable in accordance with Section 1 of the Plan, until the Plan has been
approved by a vote of at least a majority of the outstanding voting securities
of such Class.
5. Approval by Directors
Neither the Plan nor any related agreement will take effect until approved
by a majority vote of both (a) the full Board of Directors of the Funds and (b)
those Directors who are not interested persons of the Funds and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreements related to the Plan (the "Independent Directors"), cast in person at
a meeting called for the purpose of voting on the Plan and the related
agreements.
6. Continuance of the Plan
The Plan will continue in effect from year to year so long as its
continuance is specifically approved annually by vote of the Funds' Board of
Directors in the manner described in Section 5 above.
7. Termination
The Plan may be terminated at any time with respect to any Class, without
penalty, by vote of a majority of the Independent Directors or by vote of a
majority of the outstanding voting securities of such Class.
8. Amendments
The Plan may not be amended with respect to any Class to increase
materially the amount of fees payable pursuant to the Plan, as described in
Section 1 above,
<PAGE>
unless the amendment is approved by a vote of at least a majority of the
outstanding voting securities of that Class (and, if applicable, of any other
affected Class or Classes), and all material amendments to the Plan must also be
approved by the Fund's Board of Directors in the manner described in Section 5
above.
9. Selection of Certain Directors
While the Plan is in effect, the selection and nomination of the Funds'
Directors who are not interested persons of the Funds will be committed to the
discretion of the Directors then in office who are not interested persons of the
Funds.
10. Written Reports
In each year during which the Plan remains in effect, Investors and any
person authorized to direct the disposition of monies paid or payable by the
Funds pursuant to the Plan or any related agreement will prepare and furnish to
the Funds' Board of Directors, and the Board will review at least quarterly,
written reports, complying with the requirements of the Rule, which set out the
amounts expended under the Plan and the purposes for which those expenditures
were made.
11. Preservation of Materials
The Funds will preserve copies of the Plan, any agreement relating to the
Plan and any report made pursuant to Section 10 above, for a period of not less
than six years (the first two years in an easily accessible place) from the date
of the Plan, agreement or report.
12. Meaning of Certain Terms
As used in the Plan, the terms "interested person" and "majority of the
outstanding voting securities" will be deemed to have the same meaning that
those terms have under the 1940 Act and the rules and regulations under the 1940
Act, subject to any exemption that may be granted to the Funds under the 1940
Act by the Securities and Exchange Commission.
13. Maximum Aggregate Sales Charge Calculations
In calculating the "remaining amount" under Section 26(d) of the National
Association of Securities Dealers, Inc.'s ("NASD") Rules of Fair Practice for
purposes of determining the maximum aggregate sales charge for each Class of
each Fund, the Funds are authorized to transfer a portion of the "remaining
amount" of a Class in the event of an exchange between that Class and another
Class of the same Fund or the other Funds. However, such a transfer of the
"remaining amount" must be
<PAGE>
conducted in accordance with Section 26(d), and any subsequent amendments to
such Section, as well as any interpretations of such Section by the NASD.(1)
- ------------------------------
(1) Paragraph 13 was added to the Plan pursuant to an amendment adopted by the
Funds' Boards of Directors on December 7, 1995.
<PAGE>
FORTIS WORLDWIDE PORTFOLIOS, INC.
(WITH SALES CHARGE)
AVERAGE ANNUAL TOTAL RETURN
ONE YEAR
P(1+T)^N ERV
<TABLE>
<CAPTION>
GLOBAL GROWTH CLASS A CLASS B CLASS C CLASS H
------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
P= 1,000 1,000 1,000 1,000
n= 1 1 1 1
ERV= 1,027.30 1,034.90 1,060.40 1,034.40
T= 2.73 3.49 6.04 3.44
(Fiscal Year (Fiscal Year (Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97) Ended 12/31/97) Ended 12/31/97)
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY CLASS A CLASS B CLASS C CLASS H
-------------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
P= 1,000 1,000 1,000 1,000
n= 1 1 1 1
ERV= 1,000.00 1,000.00 1,000.00 1,000.00
T= 0.00 0.00 0.00 0.00
(Fiscal Year (Fiscal Year (Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97) Ended 12/31/97) Ended 12/31/97)
</TABLE>
<PAGE>
(WITH SALES CHARGE)
AVERAGE ANNUAL TOTAL RETURN
TWO YEAR
<TABLE>
<CAPTION>
GLOBAL GROWTH CLASS A CLASS B CLASS C CLASS H
------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
P= 1,000 1,000 1,000 1,000
n= 2 2 2 2
ERV= 1,215.95 1,221.91 1,257.99 1,221.91
CTR= 21.59% 22.19% 25.80% 22.19%
T= 10.27% 10.54% 12.16% 10.54%
(Fiscal Year (Fiscal Year (Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97) Ended 12/31/97) Ended 12/31/97)
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY CLASS A CLASS B CLASS C CLASS H
-------------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
P= 1,000 1,000 1,000 1,000
n= 2 2 2 2
ERV= 1,000.00 1,000.00 1,000.00 1,000.00
CTR= 0.00% 0.00% 0.00% 0.00%
T= 0.00% 0.00% 0.00% 0.00%
(Fiscal Year (Fiscal Year (Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97) Ended 12/31/97) Ended 12/31/97)
</TABLE>
<PAGE>
(WITH SALES CHARGE)
AVERAGE ANNUAL TOTAL RETURN
THREE YEAR
<TABLE>
<CAPTION>
GLOBAL GROWTH CLASS A CLASS B CLASS C CLASS H
- ------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
P= 1,000 1,000 1,000 1,000
n= 3 3 3 3
ERV= 1,599.56 1,616.86 1,644.29 1,616.86
CTR= 59.96% 61.69% 64.43% 61.69%
T= 16.95% 17.37% 18.03% 17.37%
(Fiscal Year (Fiscal Year (Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97) Ended 12/31/97) Ended 12/31/97)
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY CLASS A CLASS B CLASS C CLASS H
- -------------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
P= 1,000 1,000 1,000 1,000
n= 3 3 3 3
ERV= 1,000.00 1,000.00 1,000.00 1,000.00
CTR= 0.00% 0.00% 0.00% 0.00%
T= 0.00% 0.00% 0.00% 0.00%
(Fiscal Year (Fiscal Year (Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97) Ended 12/31/97) Ended 12/31/97)
</TABLE>
<PAGE>
(WITH SALES CHARGE)
AVERAGE ANNUAL TOTAL RETURN
FOUR YEAR
<TABLE>
<CAPTION>
GLOBAL GROWTH CLASS A
- ------------- -------
<S> <C>
P= 1,000
n= 4
ERV= 1,531.24
CTR= 53.12%
T= 11.24%
(Fiscal Year
Ended 12/31/97)
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY CLASS A
- -------------------- -------
<S> <C>
P= 1,000
n= 4
ERV= 1,000.00
CTR= 0.00%
T= 0.00%
(Fiscal Year
Ended 12/31/97)
</TABLE>
<PAGE>
(WITH SALES CHARGE) (WITH SALES CHARGE)
AVERAGE ANNUAL TOTAL RETURN AVERAGE ANNUAL TOTAL RETURN
FIVE YEAR SIX YEAR
<TABLE>
<CAPTION>
GLOBAL GROWTH CLASS A GLOBAL GROWTH CLASS A
------------- ------- ------------- -------
<S> <C> <C> <C>
P= 1,000 P= 1,000
n= 5 n= 6
ERV= 1,830.24 ERV= 1,945.44
CTR= 83.02% CTR= 94.54%
T= 12.85% T= 11.73%
(Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97)
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY CLASS A INTERNATIONAL EQUITY CLASS A
-------------------- ------- -------------------- -------
<S> <C> <C> <C>
P= 1,000 P= 1,000
n= 5 n= 6
ERV= 1,000.00 ERV= 1,000.00
CTR= 0.00% CTR= 0.00%
T= 0.00% T= 0.00%
(Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97)
</TABLE>
<PAGE>
(WITH SALES CHARGE)
AVERAGE ANNUAL TOTAL RETURN
SINCE INCEPTION
<TABLE>
<CAPTION>
GLOBAL GROWTH CLASS A CLASS B CLASS C CLASS H
------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
P= 1,000 1,000 1,000 1,000
n= 6.48 3.128 3.128 3.128
ERV= 2,244.46 1,555.50 1,583.12 1,555.50
CTR= 124.45% 55.55% 58.31% 55.55%
T= 13.29% 15.17% 15.82% 15.17%
(Fiscal Year (Fiscal Year (Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97) Ended 12/31/97) Ended 12/31/97)
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY CLASS A CLASS B CLASS C CLASS H
-------------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
P= 1,000 1,000 1,000 1,000
n= 0 0 0 0
ERV= ERR ERR ERR ERR
CTR= ERR ERR ERR ERR
T= 0.00% 0.00% 0.00% 0.00%
(Fiscal Year (Fiscal Year (Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97) Ended 12/31/97) Ended 12/31/97)
</TABLE>
<PAGE>
(WITHOUT SALES CHARGE)
AVERAGE ANNUAL TOTAL RETURN
ONE YEAR
<TABLE>
<CAPTION>
GLOBAL GROWTH CLASS B CLASS C CLASS H
- ------------- ------- ------- -------
<S> <C> <C> <C>
P= 1,000 1,000 1,000
n= 1 1 1
ERV= 1,070.90 1,070.40 1,070.40
T= 7.09 7.04 7.04
(Fiscal Year (Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97) Ended 12/31/97)
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY CLASS B CLASS C CLASS H
- -------------------- ------- ------- -------
<S> <C> <C> <C>
P= 1,000 1,000 1,000
n= 1 1 1
ERV= 1,000.00 1,000.00 1,000.00
T= 0.00 0.00 0.00
(Fiscal Year (Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97) Ended 12/31/97)
</TABLE>
<PAGE>
(WITHOUT SALES CHARGE)
AVERAGE ANNUAL TOTAL RETURN
TWO YEAR
<TABLE>
<CAPTION>
GLOBAL GROWTH CLASS B CLASS C CLASS H
- ------------- ------- ------- -------
<S> <C> <C> <C>
P= 1,000 1,000 1,000
n= 2 2 2
ERV= 1,257.99 1,257.99 1,257.99
CTR= 25.80% 25.80% 25.80%
T= 12.16% 12.16% 12.16%
(Fiscal Year (Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97) Ended 12/31/97)
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY CLASS B CLASS C CLASS H
- -------------------- ------- ------- -------
<S> <C> <C> <C>
P= 1,000 1,000 1,000
n= 2 2 2
ERV= 1,000.00 1,000.00 1,000.00
CTR= 00.00% 00.00% 00.00%
T= 00.00% 00.00% 00.00%
(Fiscal Year (Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97) Ended 12/31/97)
</TABLE>
<PAGE>
(WITHOUT SALES CHARGE)
AVERAGE ANNUAL TOTAL RETURN
THREE YEAR
<TABLE>
<CAPTION>
GLOBAL GROWTH CLASS B CLASS C CLASS H
- ------------- ------- ------- -------
<S> <C> <C> <C>
P= 1,000 1,000 1,000
n= 3 3 3
ERV= 1,643.87 1,644.29 1,643.87
CTR= 64.39% 64.43% 64.39%
T= 18.02% 18.03% 18.02%
(Fiscal Year (Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97) Ended 12/31/97)
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY CLASS B CLASS C CLASS H
- -------------------- ------- ------- -------
<S> <C> <C> <C>
P= 1,000 1,000 1,000
n= 3 3 3
ERV= 1,000.00 1,000.00 1,000.00
CTR= 0.00% 0.00% 0.00%
T= 0.00% 0.00% 0.00%
(Fiscal Year (Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97) Ended 12/31/97)
</TABLE>
<PAGE>
(WITHOUT SALES CHARGE)
AVERAGE ANNUAL TOTAL RETURN
SINCE INCEPTION
<TABLE>
<CAPTION>
GLOBAL GROWTH CLASS B CLASS C CLASS H
- ------------- ------- ------- -------
<S> <C> <C> <C>
P= 1,000 1,000 1,000
n= 3.128 3.128 3.128
ERV= 1,582.70 1,583.55 1,582.70
CTR= 58.27% 58.36% 58.27%
T= 15.81% 15.83% 15.81%
(Fiscal Year (Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97) Ended 12/31/97)
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY CLASS B CLASS C CLASS H
- -------------------- ------- ------- -------
<S> <C> <C> <C>
P= 1,000 1,000 1,000
n= 0 0 0
ERV= ERR ERR ERR
CTR= ERR ERR ERR
T= 0.00% 0.00% 0.00%
(Fiscal Year (Fiscal Year (Fiscal Year
Ended 12/31/97) Ended 12/31/97) Ended 12/31/97)
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENT OF ASSETS AND LIABILITIES, STATEMENT OF OPERATIONS, AND STATEMENT OF
CHANGES IN NET ASSETS FOUND ON PAGES 8 THROUGH 14 OF THE ANNUAL SHAREHOLDER
REPORT.
</LEGEND>
<CIK> 0000874211
<NAME> FORTIS WORLDWIDE PORTFOLIOS, INC.
<SERIES>
<NUMBER> 011
<NAME> FORTIS GLOBAL GROWTH PORTFOLIO (CLASS A)
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 110,013,246
<INVESTMENTS-AT-VALUE> 162,506,924
<RECEIVABLES> 215,898
<ASSETS-OTHER> 39,174,792<F1>
<OTHER-ITEMS-ASSETS> 32,717
<TOTAL-ASSETS> 201,930,331
<PAYABLE-FOR-SECURITIES> 2,443,653
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 39,418,005<F1>
<TOTAL-LIABILITIES> 41,861,658
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 108,759,503
<SHARES-COMMON-STOCK> 5,237,194
<SHARES-COMMON-PRIOR> 5,057,401
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,183,856)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 52,493,026
<NET-ASSETS> 160,068,673
<DIVIDEND-INCOME> 701,751
<INTEREST-INCOME> 955,289
<OTHER-INCOME> 46,674<F2>
<EXPENSES-NET> (2,342,975)
<NET-INVESTMENT-INCOME> (639,261)
<REALIZED-GAINS-CURRENT> 3,841,913
<APPREC-INCREASE-CURRENT> 13,864,114
<NET-CHANGE-FROM-OPS> 17,066,766
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,430,651
<NUMBER-OF-SHARES-REDEEMED> (1,250,858)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 32,873,958
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (5,036,773)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,480,162
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,342,975
<AVERAGE-NET-ASSETS> 146,976,000
<PER-SHARE-NAV-BEGIN> 21.28
<PER-SHARE-NII> (0.07)
<PER-SHARE-GAIN-APPREC> 2.71
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.92
<EXPENSE-RATIO> 1.44
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>SECURITIES VALUED AT $38,334,312 WERE ON LOAN TO BROKERS FROM THE PORTFOLIO.
FOR COLLATERAL, THE PORTFOLIO'S CUSTODIAN RECEIVED $39,174,792 IN CASH.
<F2>SECURITY LENDING INCOME THROUGH OCTOBER 31, 1997.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENT OF ASSETS AND LIABILITIES, STATEMENT OF OPERATIONS, AND STATEMENT OF
CHANGES IN NET ASSETS FOUND ON PAGES 8 THROUGH 14 OF THE ANNUAL SHAREHOLDER
REPORT.
</LEGEND>
<CIK> 0000874211
<NAME> FORTIS WORLDWIDE PORTFOLIOS, INC.
<SERIES>
<NUMBER> 012
<NAME> FORTIS GLOBAL GROWTH PORTFOLIO (CLASS B)
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 110,013,246
<INVESTMENTS-AT-VALUE> 162,506,924
<RECEIVABLES> 215,898
<ASSETS-OTHER> 39,174,792<F1>
<OTHER-ITEMS-ASSETS> 32,717
<TOTAL-ASSETS> 201,930,331
<PAYABLE-FOR-SECURITIES> 2,443,653
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 39,418,005<F1>
<TOTAL-LIABILITIES> 41,861,658
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 108,759,503
<SHARES-COMMON-STOCK> 488,847
<SHARES-COMMON-PRIOR> 273,294
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,183,856)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 52,493,026
<NET-ASSETS> 160,068,673
<DIVIDEND-INCOME> 701,751
<INTEREST-INCOME> 955,289
<OTHER-INCOME> 46,674<F2>
<EXPENSES-NET> (2,342,975)
<NET-INVESTMENT-INCOME> (639,261)
<REALIZED-GAINS-CURRENT> 3,841,913
<APPREC-INCREASE-CURRENT> 13,864,114
<NET-CHANGE-FROM-OPS> 17,066,766
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 262,305
<NUMBER-OF-SHARES-REDEEMED> (46,752)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 32,873,958
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (5,036,773)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,480,162
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,342,975
<AVERAGE-NET-ASSETS> 146,976,000
<PER-SHARE-NAV-BEGIN> 20.98
<PER-SHARE-NII> (0.27)
<PER-SHARE-GAIN-APPREC> 2.71
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.42
<EXPENSE-RATIO> 2.19
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>SECURITIES VALUED AT $38,334,312 WERE ON LOAN TO BROKERS FROM THE PORTFOLIO.
FOR COLLATERAL, THE PORTFOLIO'S CUSTODIAN RECEIVED $39,174,792 IN CASH.
<F2>SECURITY LENDING INCOME THROUGH OCTOBER 31, 1997.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENT OF ASSETS AND LIABILITIES, STATEMENT OF OPERATIONS, AND STATEMENT OF
CHANGES IN NET ASSETS FOUND ON PAGES 8 THROUGH 14 OF THE ANNUAL SHAREHOLDER
REPORT.
</LEGEND>
<CIK> 0000874211
<NAME> FORTIS WORLDWIDE PORTFOLIOS, INC.
<SERIES>
<NUMBER> 013
<NAME> FORTIS GLOBAL GROWTH PORTFOLIO (CLASS C)
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 110,013,246
<INVESTMENTS-AT-VALUE> 162,506,924
<RECEIVABLES> 215,898
<ASSETS-OTHER> 39,174,792<F1>
<OTHER-ITEMS-ASSETS> 32,717
<TOTAL-ASSETS> 201,930,331
<PAYABLE-FOR-SECURITIES> 2,443,653
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 39,418,005<F1>
<TOTAL-LIABILITIES> 41,861,658
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 108,759,503
<SHARES-COMMON-STOCK> 199,053
<SHARES-COMMON-PRIOR> 147,001
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,183,856)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 52,493,026
<NET-ASSETS> 160,068,673
<DIVIDEND-INCOME> 701,751
<INTEREST-INCOME> 955,289
<OTHER-INCOME> 46,674<F2>
<EXPENSES-NET> (2,342,975)
<NET-INVESTMENT-INCOME> (639,261)
<REALIZED-GAINS-CURRENT> 3,841,913
<APPREC-INCREASE-CURRENT> 13,864,114
<NET-CHANGE-FROM-OPS> 17,066,766
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 80,723
<NUMBER-OF-SHARES-REDEEMED> (28,671)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 32,873,958
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (5,036,773)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,480,162
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,342,975
<AVERAGE-NET-ASSETS> 146,976,000
<PER-SHARE-NAV-BEGIN> 21.00
<PER-SHARE-NII> (0.28)
<PER-SHARE-GAIN-APPREC> 2.71
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.43
<EXPENSE-RATIO> 2.19
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>SECURITIES VALUED AT $38,334,312 WERE ON LOAN TO BROKERS FROM THE PORTFOLIO.
FOR COLLATERAL, THE PORTFOLIO'S CUSTODIAN RECEIVED $39,174,792 IN CASH.
<F2>SECURITY LENDING INCOME THROUGH OCTOBER 31, 1997.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENT OF ASSETS AND LIABILITIES, STATEMENT OF OPERATIONS, AND STATEMENT OF
CHANGES IN NET ASSETS FOUND ON PAGES 8 THROUGH 14 OF THE ANNUAL SHAREHOLDER
REPORT.
</LEGEND>
<CIK> 0000874211
<NAME> FORTIS WORLDWIDE PORTFOLIOS, INC.
<SERIES>
<NUMBER> 014
<NAME> FORTIS GLOBAL GROWTH PORTFOLIO (CLASS H)
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 110,013,246
<INVESTMENTS-AT-VALUE> 162,506,924
<RECEIVABLES> 215,898
<ASSETS-OTHER> 39,174,792<F1>
<OTHER-ITEMS-ASSETS> 32,717
<TOTAL-ASSETS> 201,930,331
<PAYABLE-FOR-SECURITIES> 2,443,653
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 39,418,005<F1>
<TOTAL-LIABILITIES> 41,861,658
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 108,759,503
<SHARES-COMMON-STOCK> 797,985
<SHARES-COMMON-PRIOR> 512,844
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,183,856)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 52,493,026
<NET-ASSETS> 160,068,673
<DIVIDEND-INCOME> 701,751
<INTEREST-INCOME> 955,289
<OTHER-INCOME> 46,674<F2>
<EXPENSES-NET> (2,342,975)
<NET-INVESTMENT-INCOME> (639,261)
<REALIZED-GAINS-CURRENT> 3,841,913
<APPREC-INCREASE-CURRENT> 13,864,114
<NET-CHANGE-FROM-OPS> 17,066,766
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 427,183
<NUMBER-OF-SHARES-REDEEMED> (142,042)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 32,873,958
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (5,036,773)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,480,162
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,342,975
<AVERAGE-NET-ASSETS> 146,976,000
<PER-SHARE-NAV-BEGIN> 20.99
<PER-SHARE-NII> (0.28)
<PER-SHARE-GAIN-APPREC> 2.71
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.42
<EXPENSE-RATIO> 2.19
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>SECURITIES VALUED AT $38,334,312 WERE ON LOAN TO BROKERS FROM THE PORTFOLIO.
FOR COLLATERAL, THE PORTFOLIO'S CUSTODIAN RECEIVED $39,174,792 IN CASH.
<F2>SECURITY LENDING INCOME THROUGH OCTOBER 31, 1997.
</FN>
</TABLE>
