SENTRY FUND, INC.
1800 North Point Drive
Stevens Point, WI 54481
Telephone: (800) 533-7827
PROSPECTUS
March 1, 1999
The investment objective of Sentry Fund, Inc. (the
"Fund") is long-term capital growth. The Fund invests
in common stocks and other securities that have the
principal characteristics of common stocks or are
convertible into common stocks.
This Prospectus contains information you should know
before you invest in the Fund. Please read it
carefully and keep it for future reference.
The Securities and Exchange Commission (the "SEC") has
not approved or disapproved of these securities or
passed upon the adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
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TABLE OF CONTENTS
HIGHLIGHTS AND RISKS 2
PAST PERFORMANCE 3
FEES AND EXPENSES OF THE FUND 4
INVESTMENT OBJECTIVE 5
HOW THE FUND INVESTS 5
FUND MANAGEMENT 6
HOW TO PURCHASE SHARES 7
SPECIAL SERVICES FOR SHAREHOLDERS 8
HOW TO REDEEM SHARES 10
VALUATION OF FUND SHARES 11
DISTRIBUTIONS TO SHAREHOLDERS AND TAXATION 11
YEAR 2000 ISSUE 12
FINANCIAL HIGHLIGHTS 14
In deciding whether to invest in the Fund, you should
rely only on information in this Prospectus or the
Statement of Additional Information (the "SAI"). The
Fund has not authorized others to provide additional
information. The Fund does not authorize use of this
Prospectus in any state or jurisdiction in which an
offer to sell shares of the Fund may not lawfully be
made.
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HIGHLIGHTS AND RISKS
What are the goals of the Fund?
The Fund's goal is long-term capital growth. This goal
is sometimes referred to as the Fund's investment
objective. Current income from dividends or interest
is not an important factor in selecting investments for
the Fund. The Fund cannot guarantee that it will
achieve its goal. For more information, see "How the
Fund Invests."
What will the Fund invest in?
The Fund invests primarily in common stocks of
established domestic companies. In trying to achieve
its goal, the common stocks selected for the Fund will
be those the Fund's investment adviser, Sentry
Investment Management, Inc. (the "Adviser"), believes
offer favorable long-term growth prospects. For more
information, see "How the Fund Invests."
What are the principal risks of investing in the Fund?
The main risks of investing in the Fund are:
Stock Market Risk: Equity funds like the Fund are subject to stock
market risks and significant fluctuations in value.
If the stock market declines in value, the Fund
is likely to decline in value. Increases or
decreases in value of stocks are generally
greater than for bonds or other debt
instruments.
Stock Selection Risk: The stocks selected by the Adviser may decline in
value or not increase in value when the stock
market in general is rising.
Liquidity Risk: The Adviser may not be able to sell stocks at an
optimal time or price.
You should be aware that you may lose money by
investing in the Fund.
Is an investment in the Fund appropriate for me?
The Fund is suitable for long-term investors only. The
Fund is not a short-term investment vehicle. An
investment in the Fund may be appropriate if:
Your goal is long-term capital growth;
You do not require current income from this
investment; and
You are willing to accept short-term or
intermediate-term fluctuations in value to seek
possible higher long-term returns.
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PAST PERFORMANCE
The bar chart and table below provide some indication
of the risks of investing in the Fund by showing how
the Fund's performance has varied from year to year and
by showing how the Fund's performance over time
compares to that of the S&P 500 Index1r. The bar
chart and table assume reinvestment of income dividends
and capital gain distributions. When first organized
in 1970, the Fund applied a sales charge to each share
purchase. The Fund's sales charge was eliminated on
March 1, 1991. The performance data shown does not
reflect its deduction, and had it been reflected, the
charge would reduce the performance shown. Remember
that the Fund's past performance does not reflect how
the Fund may perform in the future.
Year-by-year total return as of 12/31 of each year
* The Fund's fiscal year end is October 31. The
Fund's total return from January 1, 1998 to October 31,
1998 was -2.41%.
Best Quarter: First Quarter 1991 +16.67%
Worst Quarter: Third Quarter 1990 -12.63%
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Average annual total return as of 12/31/98
1 Year 5 Years 10 Years
Sentry Fund 6.4% 16.5% 15.2%
S&P 500 Index(R)* 28.5% 23.9% 19.1%
* S&P 500 Indexr is an unmanaged index generally
representative of the U.S. stock market.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may
pay if you buy and hold shares of the Fund.
Shareholder Fees (fees paid directly from your
investment): None
Annual Fund Operating Expenses (expenses that are
deducted from Fund assets*)
Management Fees .75%
Distribution and Services (12b-1) Fees None
Other Expenses .08%
Total Annual Fund Operating Expenses .83%
* Fund operating expenses are deducted from Fund
assets before computing the daily share price or making
distributions. As a result, they will not appear on
your account statement, but instead, reduce the amount
of total return you receive.
Example
This example is intended to help you compare the cost
of investing in the Fund with the cost of investing in
other mutual funds.
The example assumes that you invest $10,000 in the Fund
for the time periods indicated and then redeem all of
your shares at the end of those periods. The example
also assumes that your investment has a 5% return each
year, and that the Fund's operating expenses remain the
same. Although your actual costs may be higher or
lower, based on these assumptions, your costs would be
as follows:
1 year $ 87
3 years $ 273
5 years $ 475
10 years $1,056
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INVESTMENT OBJECTIVE
The Fund's investment objective is long-term capital
growth.
HOW THE FUND INVESTS
The Adviser generally follows a "growth at a reasonable
price" approach to investing for the Fund. The Fund
will focus on equity securities of companies which, in
the opinion of the Adviser, have prospects for above-
average growth. In determining which securities to
purchase, the Adviser will take into consideration both
growth prospects and valuation. In evaluating
individual companies, the Adviser reviews certain
criteria which it believes are important, such as:
Above average growth;
Strong balance sheet;
Low price to earnings ratio relative to growth;
Shareholder-oriented management;
Above average return on equity; and
Proprietary products.
The securities the Adviser selects typically possess
some, but not all, of the above attributes.
The Fund typically sells a security when the Adviser
believes it has achieved its target price, shows
deteriorating fundamentals, or other securities are
better values.
Under normal circumstances, the Fund will invest most
of its assets in common stocks. Common stocks are
units of ownership of a corporation. Equity funds like
the Fund are subject to stock market risks and
significant fluctuations in value. If the stock market
declines in value, the Fund is likely to decline in
value. Increases or decreases in the value of stocks
are generally greater than for bonds and other debt
investments. In addition the stocks selected by the
Adviser may decline in value or not increase in value
when the stock market in general is rising.
To respond to adverse market, economic, political or
other conditions, the Fund may invest all or a
substantial portion of its assets in short-term
obligations or fixed-income obligations as temporary,
defensive measures. To the extent the Fund uses
temporary, defensive measures, the Fund may not achieve
its investment objective. See the Fund's SAI for a
more complete discussion of these temporary
investments.
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FUND MANAGEMENT
Investment Adviser
The Adviser manages and directs the Fund's investments,
subject to the review of the Fund's Board of Directors.
The Adviser is also responsible for portfolio
transactions and brokerage services.
The Adviser is located at 1800 North Point Drive,
Stevens Point, Wisconsin 54481, and is a wholly-owned
subsidiary of Sentry Insurance a Mutual Company
("Sentry Insurance"). The Adviser, which has been in
the business of providing investment advice for over 23
years, also provides investment management services to
Sentry Insurance and its affiliated companies.
Pursuant to an Investment Advisory Agreement between
the Fund and the Adviser, the Fund pays the Adviser a
quarterly fee computed by using annual rates based on
the average daily net asset value of the Fund during
the quarter. For the fiscal year ended October 31,
1998, the fee paid by the Fund to the Adviser was .75%
of the Fund's average net assets.
Pursuant to the Investment Advisory Agreement, if the
total expenses of the Fund (excluding taxes, portfolio
brokerage commissions and interest, but including the
investment advisory fee) exceed the sum of 1-1/2% of
the first $30,000,000 and 1% of the balance of the
average daily net asset value of the Fund in any one
fiscal year, the Adviser will reimburse the Fund for
such excess. This expense limitation is taken into
consideration with each payment of the management fee.
Portfolio Manager
Keith E. Ringberg, the Adviser's Director of Equity
Management, is primarily responsible for the day-to-day
management of the Fund's investment portfolio. Mr.
Ringberg received a B.A. degree from Milton College in
1972, and a M.B.A. from Western Illinois University in
1974. Mr. Ringberg has been employed by the Adviser
for the past 23 years, and has managed the Fund's
portfolio for the past 15 years.
Underwriter and Transfer Agent
Sentry Equity Services, Inc. ("Sentry Equity"), 1800
North Point Drive, Stevens Point, Wisconsin 54481, a
registered broker-dealer and member of the National
Association of Securities Dealers, Inc., acts as
underwriter for the Fund pursuant to an Underwriter
Agreement. Sentry Equity is a wholly-owned subsidiary
of Sentry Insurance, and is therefore affiliated with
the Adviser and the Fund.
Under a separate Agency Agreement, Sentry Equity also
serves as the Fund's Transfer Agent, Dividend
Disbursing Agent, and Plan Agent.
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HOW TO PURCHASE SHARES
You may purchase Fund shares by opening an account
through any Sentry Equity sales agent or directly
through Sentry Equity's office at 1800 North Point
Drive, Stevens Point, Wisconsin 54481, telephone (800)
533-7827.
To open an account:
Complete and sign the account Application.
Send the Application, along with a check for the
initial investment amount, to Sentry Equity at the
address given above.
Your check should be made payable to "Sentry Fund,
Inc." Payment must be made by check drawn on a U.S.
bank, savings and loan, or credit union. Cash, third-
party checks, and checks made payable to "Sentry
Equity" or "Sentry Equity Services, Inc." will not be
accepted.
If your check does not clear, you may be charged a
$20 service fee.
All applications to purchase Fund shares are
subject to acceptance by the Fund and are not binding
until so accepted. The Fund reserves the right to
decline or accept a purchase application in whole or in
part.
Minimum Investments Initial Investment Subsequent
Investment
Regular Account (Open Purchase Plan): $500 $ 50
Planned Automatic Investment Draft Plan
("PAID" Plan): $200 $ 20
Periodic Purchase Plan: $500 $240 annually
Employer-Sponsored Payroll Deduction Plan: $200 $ 10 per pay period
Traditional IRAs: $500 $ 50
Roth IRAs: $500 $ 50
Education IRAs: $500 N/A
The Fund may change or waive these minimums at any
time; you will be given at least 30 days' notice of any
increase in the minimum dollar amount of purchases.
Purchases which would result in the investor owning,
either beneficially or of record, more than 4.9% of the
Fund's outstanding shares will not be accepted unless
the investor enters
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into an agreement with the Fund
which takes into account the interests of all Fund
shareholders. The Fund will redeem the shares of any
investor in excess of 4.9% of the Fund's outstanding
shares if the investor does not enter into such an
agreement. Sentry Insurance and its affiliated
companies are excluded.
Stock Certificates
The Fund will not issue stock certificates unless they
are requested. Sentry Equity will maintain an account
for you that will record your Fund share holdings to
three decimal places. By making a written request to
Sentry Equity, you may obtain a certificate
representing full shares at no cost.
Distributions
All distributions of investment income (dividends) or
net realized capital gains will be paid in shares of
the Fund, which will be added to your account at net
asset value. See "Distributions to Shareholders and
Taxation." However, if you have a Regular Account, you
may receive all your distributions, or only those
distributions representing investment income, in cash
if you elect to do so on the Application or by written
notice to Sentry Equity.
Confirmations
A written confirmation will be mailed to you each time
a transaction occurs which changes the number of shares
you own. The confirmation will give details of the
transaction and state the number of shares you owned
before and after the transaction.
SPECIAL SERVICES FOR SHAREHOLDERS
The Fund offers the following services to shareholders.
Additional information about these services is
available by contacting Sentry Equity at (800) 533-
7827. The Fund may modify or terminate these services
at any time.
Participation in any of the Fund's investment plans is
entirely voluntary and you may discontinue or convert
to another plan at any time subject to certain
restrictions or penalties for IRA plans.
Planned Automatic Investment Draft Plan
The Planned Automatic Investment Draft ("PAID") Plan is
offered by Sentry Equity to allow the purchase of Fund
shares at regular intervals. Based on your
authorization, an automatic withdrawal is made by
Sentry Equity from your bank account each month to
purchase shares of the Fund. This ensures that the
purchase schedule you select is maintained. There is
no extra charge for this service. Contact Sentry
Equity for a PAID Plan application. For more
information on the PAID Plan, see the Fund's SAI.
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Periodic Purchase Plan
Under the Periodic Purchase Plan, you may elect to make
regular investments of a specified amount either
monthly, quarterly or semi-annually. This plan
requires a minimum annual investment of $240. The
amount and frequency of payments (including additional
payments) may vary as long as the minimum initial
purchase of $500 and minimum annual purchase of $240
requirements are met.
Payroll Deduction
Employer-sponsored payroll deduction plans are designed
for investors who wish to make purchases of Fund shares
at regular intervals. You may enroll in this plan by
making an initial purchase of $200 or more and
completing the Application. For additional investments
made under an employer-sponsored payroll deduction
plan, the minimum purchase is $10 per pay period.
Purchases are entirely voluntary.
Systematic Withdrawal Plan
If you own $5,000 or more of Fund shares (the shares
cannot be in certificate form), you may request
quarterly payments from your account of at least $50,
payable to you or to your designated payee. For
accounts of $10,000 or more, monthly payments can be
made. Ordinarily, sufficient shares will be redeemed
from your account for the amount of the payment on the
20th day of the month. A check will be mailed to you
or your designated payee within three business days
thereafter.
To establish a Systematic Withdrawal Plan, complete the
appropriate section of the Application. For more
information, see the Fund's SAI.
Individual Retirement Accounts
The Fund offers three types of individual retirement
accounts (IRAs): the Traditional (deductible) IRA, the
Roth IRA, and the Education IRA. See the Fund's SAI
for a more complete explanation of these IRAs.
HOW TO REDEEM SHARES
You may request redemption of all or part of your Fund
shares at any time. The price per share will be the
net asset value next computed, less any applicable
income tax withholding, after the time the redemption
request is received in proper form by Sentry Equity.
See "Valuation of Fund Shares." You may contact Sentry
Equity at (800) 533-7827 for more information
concerning redemption of Fund shares. Your redemption
proceeds will be mailed promptly, but no later than
seven days after receipt of a redemption request in
good order. The redemption price of shares may be more
or less than your cost when you purchased the shares,
depending on the market value of the securities owned
by the Fund at the time of redemption.
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If you redeem shares through a financial intermediary
(such as a broker-dealer), the financial intermediary
may charge you transaction fees for its services. You
will not be charged a fee if you redeem your Fund
shares directly through Sentry Equity without the
intervention of a financial intermediary.
Written Redemptions
For most redemption requests, you need only furnish a
written, unconditional request to redeem your shares at
net asset value to Sentry Equity Services, Inc., 1800
North Point Drive, Stevens Point, Wisconsin 54481. If
shares are not represented by stock certificates, a
redemption request form available from Sentry Equity,
or a letter, may be used for the request. Written
redemption requests received via facsimile transmission
will be processed, but funds will not be released until
the original, signed redemption request has been
received by Sentry Equity at its office in Stevens
Point, Wisconsin. Requests for redemption must be
signed exactly as the shares are registered, including
the signature of each owner if owned jointly, and must
specify the number of shares or dollar amount to be
redeemed. Each signature must be guaranteed by a
registered representative of Sentry Equity, a
commercial bank, trust company, member of a stock
exchange, savings and loan association or savings bank,
or other eligible financial institution. A notary
public stamp or seal is not acceptable. The guarantee
may be waived by Sentry Equity on redemptions of
$10,000 or less. If the redemption request is from a
qualified plan, proper withholding and request for
redemption forms must be completed.
Stock Certificates
If shares are represented by stock certificates, the
form on the back of each certificate must be used to
redeem shares. The stock certificate must be signed
exactly as the account is registered. If the account
is owned jointly, both owners must sign.
Special Situations
Under certain circumstances (such as corporate or
fiduciary registrations), Sentry Equity may require
additional documents (such as inheritance tax waivers,
death certificates or corporate resolutions) before the
proceeds of a redemption can be paid.
The Fund may suspend the right of redemption and the
determination of net asset value of its shares under
the following unusual circumstances: when the New York
Stock Exchange is closed (other than weekends and
holidays) or trading is restricted; when an emergency
exists, as determined by the SEC, making disposal of
portfolio securities or the valuation of net assets not
reasonably practicable; or during any period when the
SEC has by order permitted a suspension of redemption
for the protection of shareholders. In that event,
redemption will be effected at the net asset value next
determined after the suspension has been lifted unless
the shareholder has withdrawn the redemption request.
If you have been a shareholder for at least five years
and the aggregate value of your shares does not exceed
$200, the Fund reserves the right to close your
account. Before such action is taken, you will be
provided with six months' prior written notice.
<PAGE>
The Fund has the right to redeem Fund shares in whole
or in part with portfolio securities (i.e., redemption-
in-kind). For more information, please consult the
SAI.
VALUATION OF FUND SHARES
Net asset value is calculated by taking the value of
the Fund's total assets, including interest or
dividends accrued, but not yet collected, less all
liabilities, and dividing by the total number of shares
outstanding. The result, rounded to the nearest cent,
is the net asset value per share. The net asset value
per share is determined as of the close of trading
(generally 4:00 p.m., Eastern Standard Time) on each
day the New York Stock Exchange is open for business.
The New York Stock Exchange is closed on weekends and
national holidays. Net asset value is not determined
on days the New York Stock Exchange is closed. The
price at which a purchase order or redemption request
is effected is based on the next calculation of net
asset value after the order or request is placed.
Orders received by Sentry Equity prior to the close of
trading on the New York Stock Exchange and prior to the
close of the Fund's business day will be confirmed at a
price based on the net asset value effective as of the
close of the New York Stock Exchange on that day with
payment to follow.
DISTRIBUTIONS TO SHAREHOLDERS AND TAXATION
For federal income tax purposes, all dividends and
distributions of short-term capital gains you receive
from the Fund are taxable as ordinary income, whether
reinvested in additional shares or received in cash.
Distributions of long-term capital gains you receive
from the Fund, whether reinvested in additional shares
or received in cash, are taxable as a capital gain.
The capital gain holding period (and the applicable tax
rate) is determined by the length of time the Fund has
held the security and not the length of time you have
held shares in the Fund. The Fund expects that,
because of its investment objective, its distributions
will consist primarily of long- and short-term capital
gains. You will be informed annually of the amount and
nature of all dividends and capital gains paid during
the prior year. Capital gains and dividends may also
be subject to state or local taxes. If you are not
required to pay taxes on your income, you will
generally not be required to pay federal income taxes
on the distributions made to you by the Fund.
The Fund intends to declare dividends in June and
December, and to distribute any capital gains annually
with the December dividend. Any dividend that is
declared in October, November or December as of a
record date in one of those months, but is actually
paid to shareholders during the following January is
"deemed" to have been received by shareholders on
December 31 of the calendar year it was declared.
When a dividend or capital gain is distributed, the
Fund's net asset value decreases by the amount of the
distribution. If you purchase shares shortly before a
distribution, you will be subject to income taxes on
the distribution, even though the value of your
investment (plus cash received, if any) remains the
same. All dividends and capital gains distributions
will automatically be reinvested in additional Fund
shares at the then-prevailing net asset value.
<PAGE>
If you
participate in an Open Purchase Plan, you may request
your dividend and capital gains distributions, if any,
in cash.
If you do not furnish the Fund with your correct social
security number or taxpayer identification number, the
Fund is required by federal law to withhold federal
income tax from your distributions and redemption
proceeds at a rate of 31%.
This section is not intended to be a full discussion of
federal income tax laws and the effect of such laws on
you. There may be other federal, state or local tax
considerations applicable to a particular investor.
You are urged to consult your own tax adviser.
YEAR 2000 ISSUE
The Fund's operations depend on the seamless
functioning of computer systems in the financial
service industry. Many computer software systems in
use today cannot properly process date-related
information after December 31, 1999, because of the
method by which dates are encoded and calculated. This
failure, commonly referred to as the "Year 2000 Issue,"
could adversely affect the handling of security trades,
pricing and account servicing for the Fund.
The Fund has made compliance with the Year 2000 Issue a
priority and is taking steps that it believes are
reasonably designed to address the Year 2000 Issue.
Because the Fund has no computer software system of its
own, Sentry Equity's and the Adviser's computer systems
are the focus of the Fund's efforts. Both Sentry
Equity and the Adviser have represented to the Fund
that they do not currently anticipate that the Year
2000 Issue will have a material impact on their ability
to continue to fulfill their duties as service
providers to the Fund. However, there can be no
assurance that the computer systems of the companies in
which the Fund invests will be compliant or that the
value of such investments will not be adversely
affected by the Year 2000 Issue.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you
understand the Fund's financial performance for the
past 5 years. Certain information reflects financial
results for a single Fund share. The total returns in
the table represent the rate that an investor would
have earned [or lost] on an investment in the Fund
(assuming reinvestment of all dividends and
distributions). This information has been audited by
PricewaterhouseCoopers LLP, whose report, along with
the Fund's financial statements, are included in the
Fund's Annual Report for the year ended October 31,
1998, which is available on request.
Year Ended October 31,
1998 1997 1996 1995 1994
Net Asset Value,
Beginning of Period $23.95 $18.19 $16.29 $15.39 $15.93
Income from Investment
Operations
Net Investment Income .11 .13 .17 .18 .18
Net Realized and Unrealized
Gains (Losses) on
Investments (.30) 6.70 3.01 1.65 .53
Total from Investment Operations (.19) 6.83 3.18 1.83 .71
Less Distributions
Dividends From Net
Investment Income (.11) (.16) (.17) (.17) (.22)
Distribution From Net
Realized Gains (3.85) (.91) (1.11) (.76) (1.03)
Total Distributions (3.96) (1.07) (1.28) (.93) (1.25)
Net Asset Value End of Period $ 19.80 $ 23.95 $ 18.19 $ 16.29 $ 15.39
Total Return (.76%) 39.23% 20.60% 12.97% 4.86%
Net Assets, End of
Period (in Thousands) $111,850 $118,278 $ 97,154 $84,374 $79,622
Ratio of Expenses to Average
Net Assets .83% .83% .84% .86% .86%
Ratio of Net Investment Income to
Average Net Assets .55% .61% .95% 1.17% 1.19%
Portfolio Turnover Rate 29.85% 40.75% 28.28% 26.54% 16.31%
<PAGE>
INVESTMENT ADVISER
Sentry Investment Management, Inc.
1800 North Point Drive
Stevens Point, WI 54481
UNDERWRITER
Sentry Equity Services, Inc.
1800 North Point Drive
Stevens Point, WI 54481
CUSTODIAN
Citibank, N.A.
399 Park Avenue
New York, NY 10022
LEGAL COUNSEL
Godfrey & Kahn
780 North Water Street
Milwaukee, WI 53202
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
203 North LaSalle
Chicago, IL 60601
The SAI for the Fund contains additional information
about the Fund. Additional Information about the
Fund's investments is contained in the Fund's annual
and semi-annual reports to shareholders. The Fund's
annual report provides a discussion of the market
conditions and investment strategies that significantly
affected the Fund's performance during its last fiscal
year. The Fund's SAI, which is incorporated by
reference into this Prospectus, annual reports and semi-
annual reports are available without charge upon
request to the address or toll-free telephone number
noted on the cover of this Prospectus. These documents
are also available from Sentry Equity. General
inquiries regarding the Fund can be directed to the
Fund at the address and toll-free telephone number on
the coverage page of this Prospectus.
Information about the Fund (including the SAI) can be
reviewed and copied at the SEC's Public Reference Room
in Washington, D.C. Please call the SEC at 1-800-SEC-
0330 for information relating to the operation of the
Public Reference Room. Reports and other information
about the Fund are also available on the SEC's Internet
Website located at http://www.sec.gov. Alternatively,
copies of this information may be obtained, upon
payment of a duplicating fee, by writing the Public
Reference Section of the SEC, Washington, D.C. 20549-
6009.
The Fund's 1940 Act File Number is 811-1861
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