<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No.___________)
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
SECURITY INCOME FUND
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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SECURITY INCOME FUND
* EMERGING MARKETS TOTAL RETURN SERIES
* GLOBAL ASSET ALLOCATION SERIES
* GLOBAL HIGH YIELD SERIES
Member of The Security Benefit Group of Companies
700 SW HARRISON STREET, TOPEKA, KANSAS 66636-0001
1-800-888-2461
April 7, 1999
Dear Shareholder:
The Board of Directors of Security Income Fund (the "Fund") has unanimously
approved the liquidation and dissolution of the Emerging Markets Total Return
Series, the Global Asset Allocation Series and the Global High Yield Series (the
"Series") of the Fund pursuant to a Plan of Liquidation and Dissolution for the
Series (the "Plan"). After considering other alternatives, the Board of
Directors concluded that the liquidation and dissolution of the Series pursuant
to the Plan is in the best interest of each Series and its shareholders. The
enclosed Notice of a Special Meeting is to inform you of a meeting called to
obtain shareholder approval of each Series' liquidation and dissolution pursuant
to the Plan. The enclosed Proxy Statement describes this matter in more detail.
The Series' net assets as of February 26, 1999 were Global High Yield Series
- - $4,152,688, Global Asset Allocation Series - $2,259,381 and Emerging Markets
Total Return Series - $1,590,748. The Board of Directors has concluded that the
continued operation of the Series at this size is not economically feasible for
shareholders and any marketing efforts under current circumstances are unlikely
to increase the Series' size enough to justify the continuance of each Series'
operations. In addition, given each Series' relatively small amount of assets,
the Board of Directors has determined that it is unlikely that any Series could
be sold to, or merged with, another investment company. Therefore, the Board of
Directors has approved the liquidation and dissolution of the Series pursuant to
the Plan, subject to approval by the respective Series' shareholders.
If the Plan is approved with respect to a Series, shareholders remaining in
that Series as of the liquidation date will receive one or more cash
distributions as described in the Proxy Statement and the Plan. If shareholders
do not approve this proposal, the Series will continue to incur additional
expenses which may adversely affect their net asset value.
After reading the enclosed material, please complete, sign and return the
proxy card so that your shares will be represented and so that the Series can
avoid the expense of additional mailings. You may revoke your proxy at any time
prior to its use. YOUR VOTE IS EXTREMELY IMPORTANT.
If you want additional information concerning this proposal, please call the
Fund's toll-free number 1-800-888-2461, ext. 3127.
Sincerely,
JOHN D. CLELAND
President
Security Income Fund
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF
SECURITY INCOME FUND, EMERGING MARKETS TOTAL RETURN SERIES,
GLOBAL ASSET ALLOCATION SERIES AND GLOBAL HIGH YIELD SERIES
TO BE HELD APRIL 26, 1999
700 SW HARRISON ST., TOPEKA, KANSAS 66636-0001
TELEPHONE 1-800-888-2461
TO THE SHAREHOLDERS OF
* SECURITY INCOME FUND
- EMERGING MARKETS TOTAL RETURN SERIES
- GLOBAL ASSET ALLOCATION SERIES
- GLOBAL HIGH YIELD SERIES
Notice is hereby given that a special meeting of the shareholders of the
Global High Yield Series, the Global Asset Allocation Series and the Emerging
Markets Total Return Series (the "Series") of Security Income Fund (the "Fund"),
a Kansas corporation, will be held on April 26, 1999 at 9:30 a.m., Central time,
at the offices of the Fund, 700 SW Harrison, Topeka, Kansas 66636-0001 (the
"Meeting"). The Meeting has been called for the following purposes:
1. To approve the liquidation and dissolution of the each Series pursuant to
the provisions of a Plan of Liquidation and Dissolution approved by the
Fund's Board of Directors;
2. To amend the Articles of Incorporation of the Fund to reduce to zero the
number of shares outstanding of each Series and dissolve those Series of
the Fund's common stock.
3. To transact such other business as may properly come before the Meeting.
The Series' shareholders of record at the close of business on April 1, 1999
are entitled to notice of, and to vote at, the Meeting or any adjournment(s)
thereof.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE,
SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE PAID
RETURN ENVELOPE ENCLOSED, SO THAT A QUORUM WILL BE PRESENT AT THE MEETING. TO
AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP LETTERS TO ENSURE A QUORUM,
IT IS MOST IMPORTANT AND IN YOUR INTEREST FOR YOU TO SIGN YOUR PROXY CARD AND
RETURN IT PROMPTLY. THE PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS USE.
By order of the Board of Directors of
Security Income Fund,
AMY J. LEE
Secretary
The date of this Notice is April 7, 1999
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IMPORTANT: SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT IN PERSON AT THE MEETING
ARE REQUESTED TO MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD(S) TO THE
FUND AS EARLY AS POSSIBLE.
<PAGE>
SECURITY INCOME FUND
* EMERGING MARKETS TOTAL RETURN SERIES
* GLOBAL ASSET ALLOCATION SERIES
* GLOBAL HIGH YIELD SERIES
MEMBER OF THE SECURITY BENEFIT GROUP OF COMPANIES
700 SW HARRISON STREET, TOPEKA, KANSAS 66636-0001
SPECIAL MEETING OF SHAREHOLDERS, APRIL 26, 1999
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Security Income Fund, a Kansas corporation
(the "Fund"). Proxies will be voted at a special meeting of shareholders of the
Fund's Global High Yield Series, Global Asset Allocation Series and Emerging
Markets Total Return Series (the "Series") to be held on April 26, 1999 at 9:30
a.m. Central time, at the offices of the Fund, 700 SW Harrison, Topeka, Kansas
66636-0001, and at any adjournment(s) thereof (the "Meeting").
This Proxy Statement, accompanied by Notice of the Special Meeting and a
proxy card, was first mailed to shareholders of the Series on or about April 14,
1999. The expenses in connection with preparing this Proxy Statement and all
solicitations will be borne by the Series to the extent permitted by applicable
law.
At the Meeting, shareholders of each Series will be asked to approve the
liquidation and dissolution of the Series pursuant to the provisions of the Plan
of Liquidation and Dissolution attached hereto as Exhibit A (the "Plan"). The
shareholders will be asked to amend the Fund's Articles of Incorporation to
reduce to zero the number of the shares of each Series outstanding and to
dissolve those Series of the Fund's common stock. The Board of Directors of the
Fund approved the Plan and amendment of the articles of incorporation by
unanimous written consent in lieu of a meeting, subject to shareholder approval.
A majority of the outstanding shares of a Series (a "quorum") must be present in
person or by proxy in order to conduct the business of the Series at the
Meeting. The affirmative vote of shareholders holding a majority of the
outstanding shares of a Series' common stock (the "Shares") is required for
approval of the liquidation and dissolution of each Series and amendment of the
Fund's Articles of Incorporation. The Board of Directors recommends that
shareholders of each Series vote "FOR" the liquidation and dissolution and "FOR"
the amendment of the Articles of Incorporation.
Shareholders of record at the close of business on April 1, 1999 (the "Record
Date") are entitled to vote at the Meeting. Each shareholder is entitled to one
vote for each full Share and a proportionate vote for each fractional Share held
as of the Record Date. The number of Shares outstanding and the net assets of
each Series as of the Record Date are set forth below.
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THE FUND WILL FURNISH TO A SHAREHOLDER, WITHOUT CHARGE, A COPY OF THE SERIES'
MOST RECENT ANNUAL REPORT UPON WRITTEN REQUEST TO SECURITY INCOME FUND, MFR
SERIES, 700 SW HARRISON, TOPEKA, KANSAS 66636-0001, OR BY CALLING
1-800-888-2461, EXT. 3127.
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SERIES NUMBER OF SHARES OUTSTANDING NET ASSETS
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Global High Yield 408,144.723 $3,749,903
Global Asset Allocation 118,476.049 $2,138,506
Emerging Market Total Return 140,905.788 $1,477,578
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As of the Record Date, the following persons owned beneficially more than 5%
of a Series.
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% OF
NUMBER SERIES'
OF SHARES OUTSTANDING
SERIES NAME OWNED SHARES
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Security Benefit Life Insurance Company
Emerging 700 Harrison Street 111,696.859 79%
Markets Topeka, KS 66636
Total -------------------------------------------------------------------
Return Edward D. Jones Co F A O
P.0. Box 2500 10,246.000 7%
Maryland Heights, MO 63043
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Security Benefit Life Insurance Company
700 Harrison Street 103,219.628 87%
Global Topeka, KS 66636
Asset -------------------------------------------------------------------
Allocation Hisanori Kataoka
%TOA Corp 8,574.436 7%
3-7-13 Naritaya Building, 5th Floor
Ginza Chuo-Ku Tokyo
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Global Security Benefit Group Inc.
High 700 Harrison Street 363,372.292 89%
Yield Topeka, KS 66636
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The individuals named as proxies on the enclosed proxy card will vote in
accordance with your direction as indicated thereon if your proxy card is
received properly executed by you or by your duly appointed agent or
attorney-in-fact. If you sign, date and return the proxy card, but give no
voting instructions, the duly appointed proxies will vote your Shares in favor
of the proposals described in this Proxy Statement and they may, in their
discretion, vote upon such other matters as may properly come before the
Meeting. Any person giving a proxy may revoke it at any time prior to its use by
giving written notice of such revocation to the Fund prior to the Meeting, by
delivering a subsequently dated proxy to the Fund prior to the Meeting, or by
attending and voting at the Meeting in person.
If a quorum is not present at the Meeting, or if a quorum is present but
sufficient votes to approve the liquidation and dissolution of the Series and
amendment of the Articles of Incorporation of the Fund are not received, the
persons named as proxies may propose one or more adjournments of the Meeting to
permit further solicitation of proxies. Any adjournment will require the
affirmative vote of a majority of those Shares represented at the Meeting in
person or by proxy. The persons named as proxies will vote for or against an
adjournment based on their determination of what is in the best interests of the
shareholders. A shareholder vote may be taken for a Series on one more of the
proposals in this Proxy Statement prior to any adjournment if sufficient votes
have been received for approval with respect to that Series.
If a proxy represents a broker "non-vote" (that is, a proxy from a broker or
nominee indicating that such person has not received instructions from the
beneficial owner or other person entitled to vote shares of the Fund on a
particular matter with respect to which the broker or nominee has discretionary
power) or is marked with an abstention (collectively, "abstentions"), the
Series' Shares represented thereby will be considered to be present at the
meeting for purposes of determining the existence of a quorum for the
transaction of business. Abstentions, however, will have the effect of a "no"
vote for the purpose of obtaining requisite approval for the proposals described
herein and any other proposals that may come before the Meeting.
Proxies will be solicited primarily by mail. However, proxies may also be
solicited by telephone, telegraph, facsimile or personal interview conducted by
certain officers or employees of Security Management Company, LLC, the Fund's
transfer agent and administrator.
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SHAREHOLDERS
PROPOSAL SOLICITED
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1. a. To approve the liquidation and dissolution of the Emerging Markets
Emerging Markets Total Return Series pursuant to Total Return
a Plan of Liquidation and Dissolution approved by Series of the Fund
the Fund's Board of Directors.
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b. To approve the liquidation and dissolution of the Global Asset
Global Asset Allocation Series pursuant to a Plan Allocation Series
of Liquidation and Dissolution approved by the of the Fund
Fund's Board of Directors.
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c. To approve the liquidation and dissolution of the Global High
Global High Yield Series pursuant to a Plan of Yield Series
Liquidation and dissolution approved by the of the Fund
Fund's Board of Directors.
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2. a. To amend the Articles of Incorporation of the Emerging Markets
Fund to reduce to zero the number of shares Total Return
outstanding of the Emerging Markets Total Return Series of the Fund
Series and dissolve that series of the Fund's
common stock.
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b. To amend the Articles of Incorporation of the Global Asset
Fund to reduce to zero the number of shares Allocation Series
outstanding of the Global Asset Allocation Series of the Fund
and dissolve that series of the Fund's common
stock.
- --------------------------------------------------------------------------------
c. To amend the Articles of Incorporation of the Global High Yield
Fund to reduce to zero the number of shares Series of the Fund
outstanding of the Global High Yield Series and
dissolve that series of the Fund's common stock.
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PROPOSAL 1
PROPOSAL TO LIQUIDATE THE ASSETS AND DISSOLVE THE SERIES PURSUANT
TO THE PROVISIONS OF THE PLAN OF LIQUIDATION AND DISSOLUTION
Proposals 1 and 2 are contingent upon shareholder approval of both Proposals.
If either proposal is not approved by shareholders of a Series, the other
Proposal will not be presented at the Meeting for that Series and any votes in
favor of such other Proposal will be null and void with no legal effect.
THE LIQUIDATION IN GENERAL
The Board of Directors proposes to liquidate and dissolve the Series pursuant
to the provisions of the Plan. The Plan provides for (1) the complete
liquidation of all of the assets of each Series; (2) ratable distribution to
shareholders of each Series' net assets; (3) the subsequent dissolution of each
Series under Kansas law.
The Board of Directors of the Fund has determined that (i) in order to
anticipate and meet redemption requests by shareholders prior to the Meeting,
and (ii) to decrease the probability of having to sell portfolio securities at
unfavorable prices, the Fund's management ("Management") may begin to liquidate
each Series' assets as it deems appropriate and in the shareholders' best
interests. If the Plan is approved, Management will undertake to liquidate the
remainder of the Series' assets at market prices and on such terms and
conditions as Management shall determine to be reasonable and in the best
interest of each Series and its shareholders. In the event the Plan is not
adopted, the Directors will consider what action, if any, should be taken,
including whether to continue the indefinite suspension of sales of Series
Shares.
REASONS FOR THE LIQUIDATION
The Fund is an open-end management investment company of the series type
organized as a Kansas corporation. The Fund first offered shares of the Global
High Yield Series on June 1, 1995, and the Global Asset Allocation and Emerging
Markets Total Return Series on May 19, 1997.
The Directors of the Fund considered and unanimously adopted resolutions
which, in part, (1) approved the liquidation and dissolution of each Series
pursuant to the Plan of Liquidation and Dissolution, (2) approved amendment of
the Articles of Incorporation of the Fund to reduce to zero the number of shares
outstanding of each Series and dissolve those Series of the Fund's common stock,
and (3) called a Special Meeting of Shareholders to approve the liquidation and
dissolution of the Series pursuant to the Plan and amendment of the Fund's
Articles of Incorporation. Under Kansas law, the dissolution of a series may be
authorized by the affirmative vote of a majority of the outstanding shares of
the affected series.
At a meeting held February 10, 1999, Management reported to the Board of
Directors that the continued operation of each Series at its current size was
not economically feasible for the shareholders. Management reviewed the
following possible alternatives for the Series: (i) continuation of the Series
with increased efforts to sell additional shares of the Series thereby
increasing the Series assets; (ii) the merger or sale of each Series into a
similar investment company; and (iii) a prompt liquidation of each Series. The
Board of Directors asked Management to report back to the Board prior to May 1,
1999, concerning the feasibility of the possible alternatives.
Management reported to the Board of Directors that it had considered the
viability of each alternative and had concluded that the prompt liquidation and
dissolution of the Series was the only viable alternative consistent with the
best interests of the shareholders at this time. Management was not confident
that any marketing efforts under current circumstances would increase the
Series' size sufficiently to continue their operations. Management reported that
it found the merger or sale of the Series into a similar investment company not
to be a realistic alternative due to the relatively small amount of assets under
management in the Series.
Therefore, Management requested that the Board of Directors approve the
prompt liquidation and dissolution of the Series pursuant to the Plan. Based
upon Management's report and recommendation, the Board of Directors concluded
that the liquidation and dissolution of the Series pursuant to the Plan is in
the best interests of the Series and the shareholders and approved the Plan and
amendment of the Articles of Incorporation by unanimous written consent in lieu
of a meeting, subject to shareholder approval. Upon the liquidation and
dissolution of the Series, shareholders may receive a taxable cash distribution.
See "Federal Income Tax Consequences" below.
DESCRIPTION OF THE PLAN
Under the Plan, on the date on which the Plan is approved by a Series'
shareholders (the "Effective Date"), the Series will cease to conduct business
except as is required to carry out the terms of the Plan and to accept
redemption requests. Thereafter, all securities and other assets held by the
Series not already held in cash or cash equivalents will be converted to cash or
cash equivalents. Management will undertake to liquidate the Series' assets at
market prices on such terms and conditions as Management shall determine to be
reasonable and in the best interest of each Series and its shareholders.
The Plan further provides that the ratable distribution of each Series'
assets to its shareholders will be made in one or more cash payments. The first
distribution of a Series' assets (the "First Distribution") is expected to
consist of cash representing substantially all of the assets of the Series, less
any amount reserved to pay liabilities and expenses of the Series. Subsequent
distributions, if necessary, are anticipated to be made within ten days after
the First Distribution and will consist of cash from any assets remaining after
payment of liabilities and expenses, the proceeds of any sale of assets under
the Plan not sold prior to the First Distribution and any other miscellaneous
income to the Series. The First Distribution and any subsequent cash
distributions will be called the "Liquidation Distribution".
At present, the date or dates on which the Series will pay the liquidation
distributions to their shareholders and on which the Series will be liquidated
are not known to the Series, but it is anticipated that, if shareholders adopt
the Plan, the liquidation would occur on or prior to May 1, 1999. Each
shareholder will be required to surrender his or her share certificate(s) to the
Series' transfer agent, Security Management Company, LLC ("SMC"), at 700 SW
Harrison Street, Topeka, Kansas 66636-0001 prior to receiving his or her pro
rata liquidating distribution(s). In the event that a shareholder cannot
surrender a share certificate because it has been lost, apparently destroyed or
wrongfully taken, the shareholder will be asked to contact SMC at (785) 431-3127
to make alternative arrangements. The pro rata distribution represented by any
certificate not surrendered eventually will become "presumed abandoned" under
the abandoned property law of Kansas, and, pursuant to Kansas law, generally
will become payable to the shareholder's state of last residence according to
SMC's records.
FUND ACTIVITY FOLLOWING THE LIQUIDATION
Following liquidation, the Fund intends to file a certificate of dissolution
in accordance with the applicable provision of Kansas law.
THE RIGHT OF A SHAREHOLDER TO REDEEM HIS OR HER SHARES OF THE SERIES AT ANY
TIME HAS NOT BEEN IMPAIRED AND WILL NOT BE IMPAIRED BY THE ADOPTION OF THE PLAN.
THEREFORE, A SHAREHOLDER MAY REDEEM SHARES CONSISTENT WITH THE PROVISIONS OF THE
INVESTMENT COMPANY ACT WITHOUT THE NECESSITY OF WAITING FOR THE FUND TO TAKE ANY
ACTION.
FEDERAL INCOME TAX CONSEQUENCES
For federal income tax purposes, a shareholder's receipt of the Liquidation
Distribution will be a taxable event and will be treated as a sale of the
shareholder's Shares in exchange for the Liquidation Distribution. Each
shareholder will recognize gain or loss in an amount equal to the difference
between the cash he or she receives pursuant to the Liquidation Distribution and
the adjusted tax basis of his or her Shares. Assuming the shareholder holds his
or her Shares as a capital asset, the gain or loss generally will be treated as
a capital gain or loss. If the shares have been held for more than twelve
months, the gain or loss will constitute a long-term capital gain or loss
taxable at a maximum 20% rate. For Shares held one year or less, the gain or
loss will constitute a short-term capital gain or loss generally taxable at
ordinary income rates. Shareholders will be notified of their respective shares
of ordinary and capital gain dividends for the Series' final fiscal year in
normal tax-reporting fashion; amounts included in income as dividends and
reinvested in Shares will increase the shareholders' adjusted bases in their
Shares for purposes of computing their gain or loss on the receipt of the
Liquidation Distribution.
The information above is only a summary of some of the federal income tax
consequences generally affecting the Series and their individual U.S.
shareholders resulting from the liquidation of the Series. This summary does not
address the particular federal income tax consequences applicable to
shareholders other than U.S. individuals nor does it address state or local tax
consequences. The tax consequences of the liquidation may affect shareholders
differently depending upon their particular tax situations, and, accordingly,
this summary is not a substitute for careful tax planning on an individual
basis.
SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISERS TO DETERMINE THE FEDERAL,
STATE, AND OTHER INCOME TAX CONSEQUENCES OF RECEIVING THE LIQUIDATION
DISTRIBUTION WITH RESPECT TO THEIR PARTICULAR TAX CIRCUMSTANCES.
PROPOSAL 2
PROPOSAL TO AMEND THE FUND'S ARTICLES OF INCORPORATION
TO REDUCE TO ZERO THE NUMBER OF SHARES OUTSTANDING
OF EACH SERIES AND TO DISSOLVE EACH SERIES
In order to dissolve each Series, Kansas law requires amendment of the Fund's
Articles of Incorporation. Global Asset Allocation Series, Emerging Markets
Total Return Series and Global High Yield Series are series of the Fund's common
stock. Under Kansas law, each series of common stock is set forth in the Fund's
Articles of Incorporation, and the series' powers, designations, preferences and
the qualifications, limitations or restrictions of such preferences or rights
are described therein. Kansas law provides that any proposal to reduce the
number of shares of a series below the number outstanding must be approved by a
vote of a majority of the shares of the affected series. As a result, the
shareholders of each Series will vote separately with respect to dissolution of
that Series and a majority vote of the shareholders is required to approve
dissolution of the Series.
The Board of Directors of the Fund has approved amending the Fund's Articles
of Incorporation to dissolve the Series. Based upon the considerations set forth
under Proposal 1, the Board of Directors found that dissolution of the Series
was in the best interests of each Series and its shareholders.
CONCLUSION
THE DIRECTORS RECOMMEND VOTING FOR THE PROPOSAL TO LIQUIDATE AND DISSOLVE THE
SERIES PURSUANT TO TERMS AND CONDITIONS OF THE PLAN AND TO AMEND THE FUND'S
ARTICLES OF INCORPORATION AS DESCRIBED ABOVE. IN THE EVENT THE PLAN IS NOT
ADOPTED, THE DIRECTORS WILL CONSIDER WHAT ACTION, IF ANY, SHOULD BE TAKEN.
OTHER BUSINESS
Management knows of no other business to be presented at the Meeting other
than the proposals set forth in this Proxy Statement. If any other business
properly comes before the Meeting, the proxies will exercise their best judgment
in deciding how to vote on such matters.
SHAREHOLDER PROPOSALS
Unless otherwise required under the Investment Company Act of 1940,
ordinarily it will not be necessary for the Fund to hold annual meetings of
shareholders. Shareholder proposals must be received at least 120 days prior to
the next meeting of shareholders, whenever held.
FUND MANAGEMENT
MFR Advisors, Inc., One Liberty Plaza, 46th Floor, New York, New York 10006
serves as the Series' investment adviser. The Series' transfer agent is Security
Management Company, LLC, 700 SW Harrison, Topeka, Kansas 66636-0001. The Series'
custodian is Chase Manhattan Bank, 4 Chase Metro Tech Center, Brooklyn, New York
11245. The Series' underwriter is Security Distributors, Inc., 700 SW Harrison,
Topeka, Kansas 66636-0001.
PLEASE COMPLETE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE
ENCLOSED SELF-ADDRESSED POSTAGE-PAID ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY
TIME PRIOR TO THE MEETING BY WRITTEN NOTICE TO THE FUND OR BY SUBMITTING A PROXY
CARD BEARING A LATER DATE.
April 7, 1999
By Order of the Board of Directors
Security Income Fund,
AMY J. LEE
Secretary
<PAGE>
EXHIBIT A
FORM OF
PLAN OF LIQUIDATION AND DISSOLUTION
THIS PLAN OF LIQUIDATION AND DISSOLUTION (the "Plan") is adopted by Security
Income Fund (the "Fund") for its Global High Yield Series, Global Asset
Allocation Series and Emerging Markets Total Return Series (the "Series").
W I T N E S S E T H:
--------------------
WHEREAS, the Fund is an open-end management investment company registered under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, this Plan is intended to be and is adopted as a plan of liquidation of
the Series, on the terms and conditions set forth below; and
WHEREAS, the Board of Directors of the Fund, including a majority of the
directors who are not interested persons (as defined by the 1940 Act), has
determined that this Plan is in the best interests of the shareholders of each
Series ("Shareholders").
NOW THEREFORE, the Board of Directors of the Fund hereby adopts the following:
1. CONDITION PRECEDENT. This Plan is approved subject to the following
conditions:
a. This Plan shall be approved by the affirmative vote of Shareholders
holding a majority of the outstanding shares of a Series' common stock
at a special meeting of the Shareholders called for the purpose of
approving the Plan.
b. A Proxy Statement describing the Plan and the proposed liquidation and
dissolution shall be prepared and submitted to the Securities and
Exchange Commission ("SEC") and when authorized by such regulator,
shall be delivered to each Shareholder of record of the Series for the
purposes of soliciting proxies for the approval of the Plan.
c. All necessary approvals and authorizations from the SEC or any other
regulatory authority having jurisdiction over the transactions
contemplated by the Plan shall be obtained.
d. At or immediately prior to the Liquidation Date (as defined in
paragraph 5), each Series shall, if necessary, have declared and paid a
dividend or dividends which, together with all previous such dividends,
shall have the effect of distributing to the Shareholders of the Series
all of the Series investment company taxable income for taxable years
ending at or prior to the Liquidation Date (computed without regard to
any deduction for dividends paid) and all of its net capital gain, if
any, realized in taxable years ending at or prior to the Liquidation
Date (after reduction for any capital loss carry-forward).
2. TERMINATION OF BUSINESS OPERATIONS. On the date on which the Shareholders
approve the Plan (the "Effective Date"), the Series shall cease to conduct
business except as is required to carry out the terms of the Plan and to
accept redemption requests.
3. LIQUIDATION OF ASSETS. As soon as it is reasonable and practicable after
the Effective Date, but in no event later than May 1, 1999 (the
"Liquidation Period"), all portfolio securities of the Series not already
converted to cash or cash equivalents shall be converted to cash or cash
equivalents.
4. LIABILITIES. During the Liquidation Period, the Series shall pay,
discharge, or otherwise provide for the payment or discharge of, any and
all liabilities and obligations of the Series. If any Series is unable to
pay, discharge or otherwise provide for any liabilities of the Series
during the Liquidation Period, the Series may, however, retain cash or cash
equivalents in an amount which it estimates is necessary to discharge any
unpaid liabilities of the Series on the Series books as of the Liquidation
Date (as defined in paragraph 5). Unpaid liabilities may include but not be
limited to, income dividends and capital gains distributions, if any,
payable for the period prior to the Liquidation Date.
5. DISTRIBUTION TO SHAREHOLDERS. Upon termination of the Liquidation Period
(the "Liquidation Date"), each Series' assets will be distributed ratably
among shareholders of record in one or more cash payments. The first
distribution of a Series' assets (the "First Distribution") is expected to
consist of cash representing substantially all the assets of the Series,
less the amount reserved to pay creditors of the Series. Subsequent
distributions, if necessary, are anticipated to be made within ten days
after the First Distribution and will consist of any cash from any assets
remaining after payment of creditors, the proceeds of any sale of assets of
the Series under the Plan not sold prior to the First Distribution and any
other miscellaneous income to the Series. Each shareholder will be required
to surrender his or her share certificate(s) to Security Management
Company, LLC ("SMC"), the Fund's transfer agent prior to receiving his or
her pro rata liquidating distribution(s). In the event that a shareholder
cannot surrender a share certificate because it has been lost, apparently
destroyed or wrongfully taken, the Shareholder must contact SMC at
1-800-888-2461 to make alternative arrangements.
6. AMENDMENT OR TERMINATION. This Plan and the transactions contemplated
hereby may be terminated and abandoned by resolution of the Board of
Directors of the Fund with respect to one or more of the Series, at any
time prior to the Liquidation Date, if circumstances should develop that,
in the opinion of the Board, in its sole discretion, make proceeding with
this Plan inadvisable. The Board of Directors may modify or amend this Plan
at any time without Shareholder approval if it determines that such action
would be advisable and in the best interests of a Series and the
Shareholders of the Series. However, if the Board determines that any such
amendment or modification will materially and adversely affect the
interests of the Shareholders, such an amendment or modification will not
be adopted unless approved by the Shareholders of each Series.
7. FILINGS. As soon as practicable after the final distribution of the Series
assets to Shareholders, the Fund shall file a certificate of dissolution
and any other documents, as are necessary to effect the dissolution of the
Series in accordance with requirements of the Articles of Incorporation of
the Fund, the laws of the State of Kansas, the Internal Revenue Code of
1986, as amended, any applicable securities laws, and any rules and
regulations of the Securities and Exchange Commission or any state
securities commission, including, without limitation, the preparation and
filing of any tax returns.
8. POWERS OF BOARD AND OFFICERS. The Board of Directors and, subject to the
direction of the Board of Directors, the officers of the Fund, shall have
authority to do or authorize any or all acts and things as provided for in
the Plan and any and all such further acts and things as they may consider
necessary or desirable to carry out the purposes of the Plan, including,
without limitation, the execution and filing of all certificates,
documents, information returns, tax returns, forms and other papers which
may be necessary to or appropriate to implement the Plan or which may be
required by the provisions of the 1940 Act or any other applicable laws.
9. AMENDMENT OF PLAN. The Board shall have the authority to authorize such
variations from or amendments of the provisions of the Plan (other than the
terms of the Liquidation Distribution) as may be necessary or appropriate
to effect the dissolution, complete liquidation, and termination of the
existence of the Series, and the distribution of assets to Shareholders in
accordance with the purposes to be accomplished by the Plan.
10. EXPENSES. The expenses of carrying out the terms of this Plan shall be
borne by the Series, whether or not the liquidation contemplated by the
Plan is effected.
11. FURTHER ASSURANCES. The Fund shall take such further action, prior to, at,
and after the Liquidation Date, as may be necessary or desirable and proper
to consummate the transactions contemplated by this Plan.
12. GOVERNING LAW. This Plan shall be governed and construed in accordance with
the laws of the State of Kansas.
IN WITNESS WHEREOF, the Board of Directors of the Fund has caused this Plan to
be executed by their duly authorized representatives as of this 29th day of
March, 1999.
SECURITY INCOME FUND
By: JOHN D. CLELAND
President
<PAGE>
[SBG LOGO]
The Security Benefit Group of Companies
700 SW Harrison St.
Topeka, Kansas 66636-0001
GLOBAL HIGH YIELD SERIES OF SECURITY INCOME FUND
Special Meeting of Shareholders
April 26, 1999
The undersigned hereby appoints John D. Cleland, Donald A. Chubb, Jr.,
and James R. Schmank, and each of them, with full power of
substitution, as proxies of the undersigned to vote at the
above-stated special meeting, and at all adjournments thereof, all
shares of
GLOBAL HIGH YIELD SERIES OF SECURITY INCOME FUND
held by the undersigned at the Special Meeting of Shareholders of the
Fund to be held at 9:30 AM, local time, on April 26, 1999, at Security
Benefit Group Building, 700 Harrison Street, Topeka, Kansas
66636-0001, and at any adjournment thereof, in the manner directed
below with respect to the matters referred to in the proxy statement
for the meeting, receipt of which is hereby acknowledged, and in the
proxies' discretion, upon such other matters as may properly come
before the meeting or any adjournment thereof.
In order to avoid the additional expense of further solicitation to
your Fund, we strongly urge you to review, complete, and return your
ballot as soon as possible. Your vote is important regardless of the
number of shares you own. The Board of Directors recommends a vote for
each of the following proposals. These voting instructions will be
voted as specified and in the absence of specification will be treated
as granting authority to vote "FOR" each proposal.
NOTE: Please sign exactly as the name appears on this card. EACH joint
owner must sign the proxy. When signing as executor, administrator,
attorney, trustee or guardian, or as custodian for a minor, please
give the FULL title of such. If a corporation, please give the FULL
corporate name and indicate the signer's office. If a partner, please
sign in the partnership name.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: [X]
KEEP THIS PORTION FOR YOUR RECORDS
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
- --------------------------------------------------------------------------------
GLOBAL HIGH YIELD SERIES OF SECURITY INCOME FUND
For address changes and/or comments, please check [ ]
this box and write them on the back where indicated.
Vote On Proposals
FOR AGAINST ABSTAIN
1. Approval of the liquidation and dissolution of [ ] [ ] [ ]
Global High Yield Series.
2. Approval of the proposed amendment to the Fund's [ ] [ ] [ ]
Articles of Incorporation to reduce to zero the
number of shares outstanding of the Global High
Yield Series and dissolve that Series of the
Fund's common stock.
___________________________________________ _________________________________
Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owners) Date
- --------------------------------------------------------------------------------
<PAGE>
[SBG LOGO]
The Security Benefit Group of Companies
700 SW Harrison St.
Topeka, Kansas 66636-0001
EMERGING MARKETS TOTAL RETURN SERIES OF SECURITY INCOME FUND
Special Meeting of Shareholders
April 26, 1999
The undersigned hereby appoints John D. Cleland, Donald A. Chubb, Jr.,
and James R. Schmank, and each of them, with full power of
substitution, as proxies of the undersigned to vote at the
above-stated special meeting, and at all adjournments thereof, all
shares of
EMERGING MARKETS TOTAL RETURN SERIES OF SECURITY INCOME FUND
held by the undersigned at the Special Meeting of Shareholders of the
Fund to be held at 9:30 AM, local time, on April 26, 1999, at Security
Benefit Group Building, 700 Harrison Street, Topeka, Kansas
66636-0001, and at any adjournment thereof, in the manner directed
below with respect to the matters referred to in the proxy statement
for the meeting, receipt of which is hereby acknowledged, and in the
proxies' discretion, upon such other matters as may properly come
before the meeting or any adjournment thereof.
In order to avoid the additional expense of further solicitation to
your Fund, we strongly urge you to review, complete, and return your
ballot as soon as possible. Your vote is important regardless of the
number of shares you own. The Board of Directors recommends a vote for
each of the following proposals. These voting instructions will be
voted as specified and in the absence of specification will be treated
as granting authority to vote "FOR" each proposal.
NOTE: Please sign exactly as the name appears on this card. EACH joint
owner must sign the proxy. When signing as executor, administrator,
attorney, trustee or guardian, or as custodian for a minor, please
give the FULL title of such. If a corporation, please give the FULL
corporate name and indicate the signer's office. If a partner, please
sign in the partnership name.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: [X]
KEEP THIS PORTION FOR YOUR RECORDS
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
- --------------------------------------------------------------------------------
EMERGING MARKETS TOTAL RETURN SERIES OF SECURITY INCOME FUND
For address changes and/or comments, please check [ ]
this box and write them on the back where indicated.
Vote On Proposals
FOR AGAINST ABSTAIN
1. Approval of the liquidation and dissolution of [ ] [ ] [ ]
Emerging Markets Total Return Series.
2. Approval of the proposed amendment to the Fund's [ ] [ ] [ ]
Articles of Incorporation to reduce to zero the
number of shares outstanding of the Emerging
Markets Total Return Series and dissolve that
Series of the Fund's common stock.
___________________________________________ _________________________________
Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owners) Date
- --------------------------------------------------------------------------------
<PAGE>
[SBG LOGO]
The Security Benefit Group of Companies
700 SW Harrison St.
Topeka, Kansas 66636-0001
GLOBAL ASSET ALLOCATION SERIES OF SECURITY INCOME FUND
Special Meeting of Shareholders
April 26, 1999
The undersigned hereby appoints John D. Cleland, Donald A. Chubb, Jr.,
and James R. Schmank, and each of them, with full power of
substitution, as proxies of the undersigned to vote at the
above-stated special meeting, and at all adjournments thereof, all
shares of
GLOBAL ASSET ALLOCATION SERIES OF SECURITY INCOME FUND
held by the undersigned at the Special Meeting of Shareholders of the
Fund to be held at 9:30 AM, local time, on April 26, 1999, at Security
Benefit Group Building, 700 Harrison Street, Topeka, Kansas
66636-0001, and at any adjournment thereof, in the manner directed
below with respect to the matters referred to in the proxy statement
for the meeting, receipt of which is hereby acknowledged, and in the
proxies' discretion, upon such other matters as may properly come
before the meeting or any adjournment thereof.
In order to avoid the additional expense of further solicitation to
your Fund, we strongly urge you to review, complete, and return your
ballot as soon as possible. Your vote is important regardless of the
number of shares you own. The Board of Directors recommends a vote for
each of the following proposals. These voting instructions will be
voted as specified and in the absence of specification will be treated
as granting authority to vote "FOR" each proposal.
NOTE: Please sign exactly as the name appears on this card. EACH joint
owner must sign the proxy. When signing as executor, administrator,
attorney, trustee or guardian, or as custodian for a minor, please
give the FULL title of such. If a corporation, please give the FULL
corporate name and indicate the signer's office. If a partner, please
sign in the partnership name.
PLEASE EXECUTE, SIGN, DATE, AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: [X]
KEEP THIS PORTION FOR YOUR RECORDS
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
- --------------------------------------------------------------------------------
GLOBAL ASSET ALLOCATION SERIES OF SECURITY INCOME FUND
For address changes and/or comments, please check [ ]
this box and write them on the back where indicated.
Vote On Proposals
FOR AGAINST ABSTAIN
1. Approval of the liquidation and dissolution of [ ] [ ] [ ]
Global Asset Allocation Series.
2. Approval of the proposed amendment to the Fund's [ ] [ ] [ ]
Articles of Incorporation to reduce to zero the
number of shares outstanding of the Global Asset
Allocation Series and dissolve that Series of
the Fund's common stock.
___________________________________________ _________________________________
Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owners) Date
- --------------------------------------------------------------------------------
<TABLE> <S> <C>
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<NAME> SECURITY INCOME FUND
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<OTHER-INCOME> (12)
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<APPREC-INCREASE-CURRENT> (183)
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<GROSS-EXPENSE> 81
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</TABLE>
<TABLE> <S> <C>
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<NAME> SECURITY INCOME FUND
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<NAME> MFR GLOBAL HIGH YIELD - B
<MULTIPLIER> 1,000
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<S> <C>
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<APPREC-INCREASE-CURRENT> (183)
<NET-CHANGE-FROM-OPS> 174
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<NUMBER-OF-SHARES-SOLD> 2
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<SHARES-REINVESTED> 6
<NET-CHANGE-IN-ASSETS> 25
<ACCUMULATED-NII-PRIOR> 99
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<PER-SHARE-NII> .47
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<PER-SHARE-NAV-END> 9.82
<EXPENSE-RATIO> 2.56
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000088498
<NAME> SECURITY INCOME FUND
<SERIES>
<NUMBER> 061
<NAME> MFR EMERGING MARKETS - A
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
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<TOTAL-LIABILITIES> 141
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,095
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<SHARES-COMMON-PRIOR> 54
<ACCUMULATED-NII-CURRENT> 17
<OVERDISTRIBUTION-NII> 0
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<OVERDISTRIBUTION-GAINS> 0
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<DIVIDEND-INCOME> 7
<INTEREST-INCOME> 23
<OTHER-INCOME> 0
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<REALIZED-GAINS-CURRENT> 86
<APPREC-INCREASE-CURRENT> (16)
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<GROSS-EXPENSE> 33
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<PER-SHARE-NII> .19
<PER-SHARE-GAIN-APPREC> .65
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<PER-SHARE-NAV-END> 10.09
<EXPENSE-RATIO> 1.99
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000088498
<NAME> SECURITY INCOME FUND
<SERIES>
<NUMBER> 062
<NAME> MFR EMERGING MARKETS - B
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
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<INVESTMENTS-AT-COST> 1,165
<INVESTMENTS-AT-VALUE> 1,075
<RECEIVABLES> 157
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<ACCUMULATED-NII-CURRENT> 17
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<GROSS-EXPENSE> 33
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<PER-SHARE-NAV-END> 10.25
<EXPENSE-RATIO> 2.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000088498
<NAME> SECURITY INCOME FUND
<SERIES>
<NUMBER> 071
<NAME> MFR GLOBAL ASSET ALLOCATION - A
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
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<INVESTMENTS-AT-COST> 1,312
<INVESTMENTS-AT-VALUE> 1,497
<RECEIVABLES> 16
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<TOTAL-ASSETS> 1,563
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<TOTAL-LIABILITIES> 49
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,327
<SHARES-COMMON-STOCK> 72
<SHARES-COMMON-PRIOR> 58
<ACCUMULATED-NII-CURRENT> 11
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (10)
<OVERDISTRIBUTION-GAINS> 0
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<OTHER-INCOME> (1)
<EXPENSES-NET> 14
<NET-INVESTMENT-INCOME> 10
<REALIZED-GAINS-CURRENT> (12)
<APPREC-INCREASE-CURRENT> 210
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<ACCUMULATED-GAINS-PRIOR> 2
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<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 6
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 33
<AVERAGE-NET-ASSETS> 1,284
<PER-SHARE-NAV-BEGIN> 9.82
<PER-SHARE-NII> .10
<PER-SHARE-GAIN-APPREC> 1.75
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000088498
<NAME> SECURITY INCOME FUND
<SERIES>
<NUMBER> 072
<NAME> MFR GLOBAL ASSET ALLOCATION - B
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1.000
<INVESTMENTS-AT-COST> 1,312
<INVESTMENTS-AT-VALUE> 1,497
<RECEIVABLES> 16
<ASSETS-OTHER> 50
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,563
<PAYABLE-FOR-SECURITIES> 43
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6
<TOTAL-LIABILITIES> 49
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,327
<SHARES-COMMON-STOCK> 58
<SHARES-COMMON-PRIOR> 52
<ACCUMULATED-NII-CURRENT> 11
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (10)
<ACCUM-APPREC-OR-DEPREC> 186
<NET-ASSETS> 1,514
<DIVIDEND-INCOME> 10
<INTEREST-INCOME> 15
<OTHER-INCOME> (1)
<EXPENSES-NET> 14
<NET-INVESTMENT-INCOME> 10
<REALIZED-GAINS-CURRENT> (12)
<APPREC-INCREASE-CURRENT> 210
<NET-CHANGE-FROM-OPS> 208
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 164
<ACCUMULATED-NII-PRIOR> 1
<ACCUMULATED-GAINS-PRIOR> 2
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 6
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 33
<AVERAGE-NET-ASSETS> 1,284
<PER-SHARE-NAV-BEGIN> 9.82
<PER-SHARE-NII> .06
<PER-SHARE-GAIN-APPREC> 1.73
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.61
<EXPENSE-RATIO> 2.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
