PROSPECTUS
The NetNet Fund (the "Fund") is a mutual fund portfolio that seeks to
provide shareholders long term capital appreciation. The Fund invests primarily
in equity securities of companies engaged in the research, design, development,
manufacturing or distribution of products, processes or services for use with
Internet and Intranet related businesses. The Fund is a separate portfolio of
the Munder Funds, Inc. (the "Company"), an open-end investment company that
currently offers seven investment portfolios.
Munder Capital Management (the "Advisor") serves as the investment advisor
of the Fund.
This Prospectus contains information that a prospective investor should
know before investing. Investors are encouraged to read this Prospectus and
retain it for future reference. A Statement of Additional Information dated
August 17, 1996, as amended or supplemented from time to time, has been filed
with the Securities and Exchange Commission (the "SEC") and is incorporated by
reference into this Prospectus. The Statement of Additional Information may be
obtained free of charge by calling the Fund at (800) 438-5789. The Securities
and Exchange Commission maintains a Web site (http://WWW.SEC.GOV) that contains
the Statement of Additional Information and other information regarding the
Fund.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY ANY BANK, AND ARE NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. AN
INVESTMENT IN THE FUND INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
SECURITIES OFFERED BY THIS PROSPECTUS 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.
The date of this Prospectus is August 17, 1996.
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TABLE OF CONTENTS
Page
Prospectus Summary...................................................... 2
Expense Table........................................................... 4
Investment Objective and Policies....................................... 5
Portfolio Instruments and Practices
and Associated Risk Factors.......................................... 7
Investment Limitations.................................................. 15
How to Purchase Shares.................................................. 16
How to Redeem Shares.................................................... 17
Dividends and Distributions............................................. 20
Net Asset Value......................................................... 21
Management.............................................................. 22
Taxes................................................................... 25
Description of Shares................................................... 27
Performance............................................................. 27
Shareholder Account Information......................................... 29
No person has been authorized to give any information, or to make any
representations not contained in this Prospectus, or in the Funds' Statement of
Additional Information incorporated herein by reference, in connection with the
offering made by this Prospectus, and, if given or made, such information or
representations must not be relied upon as having been authorized by the Funds
or the Distributor. This Prospectus does not constitute an offering by the Funds
or by the Distributor in any jurisdiction in which such offering may not
lawfully be made.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing in this Prospectus.
Investment Objective and Policies
The Fund's investment objective is long term capital appreciation. It
seeks to achieve this objective by investing primarily in equity securities of
companies engaged in the research, design, development, manufacturing or
distribution of products, processes or services for use with Internet and
Intranet related businesses. There is no assurance that the Fund will achieve
its investment objective. The companies the Fund will invest in will include
Internet access providers, network equipment manufacturers, computer hardware
and software developers, content providers, developers of search engines, data
services, specialty Internet services, financial services and Internet presence
providers.
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Investment Risks and Special Considerations
The Fund's performance and price per share will change daily based on many
factors, including national and international economic conditions, the overall
level of equity prices, general market conditions and international exchange
rates. Depending on these factors, the net asset value of the Fund may decrease
instead of increase. The Fund may invest in the securities of emerging growth
companies, which may involve greater price volatility and risk than those
incurred by funds that do not invest in such companies. In addition, the Fund
will concentrate its investments in securities of companies engaged in Internet
and Intranet related businesses. The value of Fund shares may be susceptible to
factors affecting the computer, telecommunications, broadcast, cable and related
industries. These industries may be subject to greater governmental regulation
than many other industries and changes in governmental policies and the need for
regulatory approvals may have a material effect on the products and services of
these industries. In addition, competitive pressures and changing demand may
have a significant effect on the financial condition of companies in these
industries. There is no assurance that the Fund will achieve its investment
objective.
See "Investment Objective and Policies."
Purchasing Shares
Shares of the Fund are offered at net asset value. Shares of the Fund are
offered continuously and may be purchased from the Distributor or through the
Transfer Agent.
See "How to Purchase Shares."
Minimum Investment
$1,000 minimum investment ($50 through Automatic
Investment Plan). $50 minimum for subsequent purchases.
Reinvestment
Automatic reinvestment of dividends and capital gains unless a shareholder
elects to receive cash.
Other Features
Automatic Investment Plan
Automatic Withdrawal Plan
Retirement Plans
Reinvestment Privilege
Dividends and Other Distributions
Dividends from net investment income are declared and paid at least
annually. Capital gains, if any, are distributed at least annually.
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Net Asset Value
Determined once daily on each business day.
Redeeming Shares
Shares of the Fund may be redeemed at net asset value by
mail or telephone. See "How to Redeem Shares."
Investment Advisor
As investment advisor for the Fund, Munder Capital Management provides
overall investment management for the Fund, provides research and credit
analysis, is responsible for all purchases and sales of portfolio securities,
maintains records relating to such purchases and sales, and provides reports to
the Company's Board of Directors. See "Management -- Investment Advisor."
Distributor
Funds Distributor, Inc.
EXPENSE TABLE
The following table sets forth certain costs and expenses that an investor
will incur either directly or indirectly as a shareholder of the Fund based on
estimated operating expenses.
Shareholder transaction expenses:
Maximum sales load on purchases None
Maximum sales load on reinvested dividends None
Maximum contingent deferred sales charge None
Redemption Fees None
Annual operating expenses:
(as percentage of average net assets)
Advisory fees 1.00%
12b-1 fees 0.25%
Other expenses 0.25%
Total fund operating expenses 1.50%
The amount of "Other Expenses" in the table above is based on estimated
expenses and projected assets for the current fiscal year. See "Management" in
this Prospectus for a further description of the Fund's operating expenses. Any
fees charged by institutions directly to customer accounts for services provided
in connection with investments in shares of the Fund are in addition to the
expenses shown in the above Expense Table and the Example shown below. The
Transfer Agent may deduct a wire redemption fee of $7.50 for wire redemptions
under $5,000.
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EXAMPLE
The following example demonstrates the projected dollar amount of total
cumulative expenses that would be incurred over various periods with respect to
a hypothetical investment in the Fund. These amounts are based on payment by the
Fund of operating expenses at the levels set forth in the above table, and are
also based on the following assumptions:
An investor would pay the following expenses on a $1,000 investment in the
Fund assuming (1) a hypothetical 5% annual return and (2) redemption at the end
of the following time periods:
1 Year 3 Years
$15 $47
The foregoing Expense Table and Example are intended to assist investors
in understanding the various shareholder transaction expenses and operating
expenses of the Fund that investors bear either directly or indirectly.
THE EXAMPLE SHOWN ABOVE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF FUTURE INVESTMENT RETURN OR OPERATING
EXPENSES. ACTUAL INVESTMENT RETURN AND OPERATING EXPENSES MAY
BE MORE OR LESS THAN THOSE SHOWN.
The NetNet Fund is a series of shares issued by the Munder Funds, Inc.
(the "Company"), an open-end management investment company. The Company was
incorporated under the laws of the State of Maryland on November 18, 1992 and
has registered under the Investment Company Act of 1940, as amended (the "1940
Act"). The Fund's principal office is located at 480 Pierce Street, Birmingham,
Michigan 48009 and its telephone number is (800) 438-5789.
INVESTMENT OBJECTIVE AND POLICIES
This Prospectus describes the NetNet Fund. Purchasing shares of the Fund
should not be considered a complete investment program, but an important segment
of a well- diversified investment program.
The Fund is designed for investors seeking long term capital appreciation.
The Fund focuses on companies with the potential for significant long term
capital appreciation from their involvement in Internet and Intranet related
businesses.
The investment objective of the Fund is to provide shareholders with long
term capital appreciation. The Fund seeks to achieve this objective by investing
primarily in companies engaged in Internet and Intranet related businesses.
Income is not a primary consideration in the selection of investments.
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Under normal conditions, the Fund will invest at least 65% of its total
assets in equity securities of companies listed on U.S. securities exchanges or
NASDAQ which are engaged in the research, design, development, manufacturing or
engaged to a significant extent in the business of distributing products,
processes or services for use with Internet and Intranet related businesses.
Equity securities include common stock, preferred stock and securities
convertible into common stock. The specific risks of investing in
Internet-related securities are summarized under "Portfolio Instruments and
Practices and Associated Risk Factors-Industry Concentration."
The Fund may also invest in short-term money market securities. Under
normal market conditions, short-term money market securities could comprise up
to 35% of the Fund's total assets. The Fund could invest a higher percentage of
its assets in money market securities for temporary defensive purposes.
The Fund's investment objective and all other investment policies, unless
otherwise noted, are non-fundamental and may be changed by the Board of
Directors without shareholder approval.
The Internet is a world-wide network of computers designed to permit users
to share information and transfer data quickly and easily. The World Wide Web
("WWW") which is a means of graphically interfacing with the Internet, is a
hyper-text based publishing medium containing text, graphics, interactive
feedback mechanisms and links within WWW documents and to other WWW documents.
An Intranet is the application of WWW tools and concepts to a company's internal
documents and databases. The Advisor believes that the Internet and the Intranet
are together the emerging frontier interlinking computers, telecommunications
and broadcast. Consequently, there are opportunities for continued growth in
demand for components, products, media, services, and systems to assist,
facilitate, enhance, store, process, record, reproduce, retrieve and distribute
information, products and services for use by businesses, institutions and
consumers. Companies engaged in these efforts are the central focus of the Fund.
Internet and Intranet related businesses include companies engaged in the
research, design, development, manufacturing or distribution of servers,
routers, search engines, bridges and switches, browsers, network applications,
agent software, modems, carriers, firewall and security, e-mail, electronic
commerce, video and publishing for use on the Internet/Intranet.
The value of Fund shares may be susceptible to factors affecting the
industries described above. These industries may be subject to greater
governmental regulation than many other industries and changes in governmental
policies and the
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need for regulatory approvals may have a material effect on the products and
services of these industries. In addition, because of its narrow industry focus,
the Fund's performance is closely tied to, and affected by, these industries.
Companies in an industry are often faced with the same obstacles, issues or
regulatory burdens, and their securities may react similarly and move in unison
to these and other market conditions.
Finally, competitive pressures and changing demand may have a significant
effect on the financial condition of companies in these industries. Such
companies spend heavily on research and development and are especially sensitive
to the risk of product obsolescence.
Although securities of large and well-established companies in the
information technology industries will be held in the Fund's portfolio, the Fund
also will invest in medium, small and/or newly-public companies which may be
subject to greater share price fluctuations and declining growth, particularly
in the event of rapid changes in technology and/or increased competition.
Securities of those smaller and/or less seasoned companies may, therefore,
expose shareholders of the Fund to above-average risk.
PORTFOLIO INSTRUMENTS AND PRACTICES
AND ASSOCIATED RISK FACTORS
Investment strategies that are available to the Fund are set forth below.
Additional information concerning certain of these strategies and their related
risks is contained in the Statement of Additional Information.
EQUITY SECURITIES. The Fund will invest in common stocks, and may invest
in warrants and similar rights to purchase common stock. The Fund may invest up
to 5% of its net assets at the time of purchase in warrants and similar rights
(other than those that have been acquired in units or attached to other
securities). Warrants represent rights to purchase securities at a specific
price valid for a specific period of time. The prices of warrants do not
necessarily correlate with the prices of the underlying securities. In addition,
the Fund may invest in convertible bonds and convertible preferred stock. A
convertible security is a security that may be converted either at a stated
price or rate within a specified period of time into a specified number of
shares of common stock. By investing in convertible securities, the Fund seeks
the opportunity, through the conversion feature, to participate in the capital
appreciation of the common stock into which the securities are convertible,
while earning higher current income than is available from the common stock.
Although the Fund may acquire convertible securities that are rated below
investment grade by Standard & Poor's Corporation ("S&P") or Moody's Investors
Service, Inc. ("Moody"), it is
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expected that investments in lower-rated convertible securities will not exceed
5% of the value of the total assets of the Fund at the time of purchase.
FOREIGN SECURITIES. The Fund may invest in the securities of foreign
issuers. There are certain risks and costs involved in investing in securities
of companies and governments of foreign nations, which are in addition to the
usual risks inherent in U.S. investments. Investments in foreign securities
involve higher costs than investments in U.S. securities, including higher
transaction costs as well as the imposition of additional taxes by foreign
governments. In addition, foreign investments may include additional risks
associated with the level of currency exchange rates, less complete financial
information about the issuers, less market liquidity, and political instability.
Future political and economic developments, the possible imposition of
withholding taxes on interest income, the possible seizure or nationalization of
foreign holdings, the possible establishment of exchange controls, or the
adoption of other governmental restrictions might adversely affect the payment
of principal and interest on foreign obligations. Additionally, foreign banks
and foreign branches of domestic banks may be subject to less stringent reserve
requirements, and to different accounting, auditing and recordkeeping
requirements.
Although the Fund may invest in securities denominated in foreign
currencies, portfolio securities and other assets held by the Fund are valued in
U.S. dollars. As a result, the net asset value of the Fund's shares may
fluctuate with U.S. dollar exchange rates as well as with price changes of its
portfolio securities in the various local markets and currencies. In addition to
favorable and unfavorable currency exchange-rate developments, the Fund is
subject to the possible imposition of exchange control regulations or freezes on
convertibility of currency.
Investments in foreign securities may be in the form of American
Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs") or similar
securities. These securities may not be denominated in the same currency as the
securities they represent. ADRs are receipts typically issued by a United States
bank or trust company evidencing ownership of the underlying foreign securities.
EDRs are receipts issued by a European financial institution evidencing a
similar arrangement. Generally, ADRs, in registered form, are designed for use
in United States securities markets, and EDRs, in bearer form, are designed for
use in the European securities markets.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Fund
may enter into forward currency exchange contracts in an
effort to reduce the level of volatility caused by changes in
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foreign currency exchange rates. The Fund may not enter into these contracts for
speculative purposes. A forward currency exchange contract is an obligation to
purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract agreed upon by the parties, at a
price set at the time of contract. The Fund will segregate cash or liquid
securities to cover its obligation to purchase foreign currency under a forward
foreign currency contract. Although such contracts tend to minimize the risk of
loss due to a decline in the value of the hedged currency, at the same time they
tend to limit any potential gain that might be realized should the value of such
currency increase. The Fund will not enter into forward foreign currency
exchange contracts if as a result, the Fund will have more than 20% of its total
assets committed to consummation of such forward foreign currency exchange
contracts.
FUTURES CONTRACTS AND OPTIONS. The Fund may invest in futures contracts
and options on futures contracts for hedging purposes or to maintain liquidity.
However, the Fund may not purchase or sell a futures contract unless immediately
after any such transaction the sum of the aggregate amount of margin deposits on
its existing futures positions and the amount of premiums paid for related
options is 5% or less of its total assets.
Futures contracts obligate the Fund, at maturity, to take or make delivery
of certain securities or the cash value of a bond or securities index. When
interest rates are rising, futures contracts can offset a decline in value of
the Fund's portfolio securities. When rates are falling, these contracts can
secure higher yields for securities the Fund intends to purchase.
The Fund may purchase and sell call and put options on futures contracts
traded on an exchange or board of trade. When the Fund purchases an option on a
futures contract, it has the right to assume a position as a purchaser or seller
of a futures contract at a specified exercise price at any time during the
option period. When the Fund sells an option on a futures contract, it becomes
obligated to purchase or sell a futures contract if the option is exercised. In
anticipation of a market advance, the Fund may purchase call options on futures
contracts as a substitute for the purchase of futures contracts to hedge against
a possible increase in the price of securities which the Fund intends to
purchase. Similarly, if the value of the Fund's portfolio securities is expected
to decline, the Fund might purchase put options or sell call options on futures
contracts rather than sell futures contracts. In connection with the Fund's
position in a futures contract or option thereon, the Fund will create a
segregated account of liquid assets or will otherwise cover its position in
accordance with applicable requirements of the SEC.
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In addition, the Fund, may write covered call options, buy put options,
buy call options and write secured put options on particular securities or
various stock indices. Options trading is a highly specialized activity which
entails greater than ordinary investment risks. A call option for a particular
security gives the purchaser of the option the right to buy, and a writer the
obligation to sell, the underlying security at the stated exercise price at any
time prior to the expiration of the option, regardless of the market price of
the security. The premium paid to the writer is in consideration for undertaking
the obligations under the option contract. A put option for a particular
security gives the purchaser the right to sell the underlying security at the
stated exercise price at any time prior to the expiration date of the option,
regardless of the market price of the security. In contrast to an option on a
particular 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.
The use of derivative instruments exposes the Fund to additional risks and
transaction costs. Risks inherent in the use of derivative instruments include:
(1) the risk that interest rates, securities prices and currency markets will
not move in the direction that a portfolio manager anticipates; (2) imperfect
correlation between the price of derivative instruments and movements in the
prices of the securities, interest rates or currencies being hedged; (3) the
fact that skills needed to use these strategies are different than those needed
to select portfolio securities; (4) inability to close out certain hedged
positions to avoid adverse tax consequences; (5) the possible absence of a
liquid secondary market for any particular instrument and possible
exchange-imposed price fluctuation limits, either of which may make it difficult
or impossible to close out a position when desired; (6) leverage risk, that is,
the risk that adverse price movements in an instrument can result in a loss
substantially greater than the Fund's initial investment in that instrument (in
some cases, the potential loss is unlimited); and (7) particularly in the case
of privately- negotiated instruments, the risk that the counterparty will fail
to perform its obligations, which could leave the Fund worse off than if it had
not entered into the position.
When the Fund invests in a derivative instrument, it may be required to
segregate cash and other high-grade liquid debt securities or certain portfolio
securities to "cover" the Fund's position. Assets segregated or set aside
generally may not be disposed of so long as the Fund maintains the positions
requiring segregation or cover. Segregating assets could diminish the Fund's
return due to the opportunity losses of foregoing other potential investments
with the segregated assets.
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The Fund is not a commodity pool, and all futures transactions engaged in
by the Fund must constitute bona fide hedging or other permissible transactions
in accordance with the rules and regulations promulgated by the Commodity
Futures Trading Commission. Successful use of futures and options is subject to
special risk considerations.
For a further discussion see "Additional Information on Fund Investments"
and the Appendix to the Statement of Additional Information.
REPURCHASE AGREEMENTS. The Fund may agree to purchase securities from
financial institutions subject to the seller's agreement to repurchase them at
an agreed-upon time and price ("repurchase agreements"). The financial
institutions with which the Fund may enter into repurchase agreements include
banks and non-bank dealers of U.S. Government securities that are listed on the
Federal Reserve Bank of New York's list of reporting dealers. The Advisor will
review and continuously monitor the creditworthiness of the seller under a
repurchase agreement, and will require the seller to maintain liquid assets in a
segregated account in an amount that is greater than the repurchase price.
Default by or bankruptcy of the seller would, however, expose the Fund to
possible loss because of adverse market action or delays in connection with the
disposition of the underlying obligations.
REVERSE REPURCHASE AGREEMENTS. The Fund may borrow funds for temporary
purposes by selling portfolio securities to financial institutions such as banks
and broker/dealers and agreeing to repurchase them at a mutually specified date
and price ("reverse repurchase agreements"). Reverse repurchase agreements
involve the risk that the market value of the securities sold by the Fund may
decline below the repurchase price. The Fund would pay interest on amounts
obtained pursuant to a reverse repurchase agreement.
INVESTMENT COMPANY SECURITIES. In connection with the management of daily
cash positions, the Fund may invest in securities issued by other investment
companies which invest in short-term debt securities and which seek to maintain
a $1.00 net asset value per share (i.e., "money market funds"). Securities of
other investment companies will be acquired within limits prescribed by the 1940
Act. These limitations, among other matters, restrict investments in securities
of other investment companies to no more than 10% of the value of the Fund's
total assets, with no more than 5% invested in the securities of any one
investment company. As a shareholder of another investment company, the Fund
would bear, along with other shareholders, its pro rata portion of the other
investment company's expenses, including advisory fees. These expenses would be
in addition to the expenses the Fund bears directly in connection with its own
operations.
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LIQUIDITY MANAGEMENT. Pending investment, to meet anticipated redemption
requests, or as a temporary defensive measure if the Advisor determines that
market conditions warrant, the Fund may also invest without limitation in
short-term U.S. Government obligations, high quality money market instruments,
variable and floating rate instruments and repurchase agreements as described
above.
High quality money market instruments may include obligations issued by
Canadian corporations and Canadian counterparts of U.S. corporations and
Europaper, which is U.S. dollar-denominated commercial paper of a foreign
issuer. The Fund may also purchase U.S. dollar-denominated bank obligations,
such as certificates of deposit, bankers' acceptances and interest-bearing
savings and time deposits, issued by U.S. or foreign banks or savings
institutions having total assets at the time of purchase in excess of $1
billion. Short-term obligations purchased by the Fund will either have
short-term debt ratings at the time of purchase in the top two categories by one
or more unaffiliated nationally recognized statistical rating organizations
("NRSROs") or be issued by issuers with such ratings. Unrated instruments
purchased by the Fund will be of comparable quality as determined by the
Advisor.
ILLIQUID SECURITIES. The Fund may invest up to 15% of the value of its net
assets (determined at time of acquisition) in securities which are illiquid.
Illiquid securities would generally include repurchase agreements and time
deposits with notice/termination dates in excess of seven days, and certain
securities which are subject to trading restrictions because they are not
registered under the Securities Act of 1933, as amended (the "Act"). If, after
the time of acquisition, events cause this limit to be exceeded, the Fund will
take steps to reduce the aggregate amount of illiquid securities as soon as
reasonably practicable in accordance with the policies of the SEC.
The Fund may invest in commercial obligations issued in reliance on the
"private placement" exemption from registration afforded by Section 4(2) of the
Act ("Section 4(2) paper"). The Fund may also purchase securities that are not
registered under the Act, but which can be sold to qualified institutional
buyers in accordance with Rule 144A under the Act ("Rule 144A securities").
Section 4(2) paper is restricted as to disposition under the Federal securities
laws, and generally is sold to institutional investors which agree that they are
purchasing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction. Section 4(2) paper
normally is resold to other institutional investors through or with the
assistance of the issuer or investment dealers which make a market in the
Section 4(2) paper, thus providing liquidity. Rule 144A securities generally
must be sold only to
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other qualified institutional buyers. If a particular investment in Section 4(2)
paper or Rule 144A securities is not determined to be liquid, that investment
will be included within the Fund's limitation on investment in illiquid
securities. The Advisor will determine the liquidity of such investments
pursuant to guidelines established by the Company's Board of Directors. The Fund
will limit its investment in restricted securities to 10% of the Fund's total
assets, excluding Rule 144A securities, and will limit its investment in all
restricted securities, including Rule 144A securities, to 15% of its total
assets.
U.S. GOVERNMENT OBLIGATIONS. The Funds may purchase
obligations issued or guaranteed the U.S. Government and U.S.
Government agencies and instrumentalities. Obligations of
certain agencies and instrumentalities of the U.S. Government,
such as those of the Government National Mortgage Association,
are supported by the full faith and credit of the U.S.
Treasury. Others, such as those of the Export-Import Bank of
the United States, are supported by the right of the issuer to
borrow from the U.S. Treasury; and still others, such as those
of the Student Loan Marketing Association, are supported only
by the credit of the agency or instrumentality issuing the
obligation. No assurance can be given that the U.S. Government
would provide financial support to U.S. Government-sponsored
instrumentalities if it is not obligated to do so by law.
BORROWING. The Fund is authorized to borrow money in amounts up to 5% of
the value of the Fund's total assets at the time of such borrowing for temporary
purposes. However, the Fund is authorized to borrow money in amounts up to 33
1/3% of its assets, as permitted by the 1940 Act, for the purpose of meeting
redemption requests. Borrowing by the Fund creates an opportunity for greater
total return but, at the same time, increases exposure to capital risk.
Leveraging by means of borrowing may exaggerate the effect of any increase or
decrease in the value of portfolio securities on the Fund's net asset value. In
addition, borrowed funds are subject to interest costs that may offset or exceed
the return earned on the borrowed funds. However, the Fund will not purchase
portfolio securities while borrowings exceed 5% of the Fund's total assets. For
more detailed information with respect to the risks associated with borrowing,
see the heading "Borrowing" in the Statement of Additional Information.
LENDING OF PORTFOLIO SECURITIES. To enhance the return of the portfolio,
the Fund may lend securities in its portfolio representing up to 25% of its
total assets, taken at market value, to securities firms and financial
institutions, provided that each loan is secured continuously by collateral in
the form of cash, high quality money market instruments or short-term U.S.
Government securities adjusted daily to have a market value at least equal to
the current market value of the securities loaned. The risk in lending portfolio
securities, as with other extensions of credit, consists of possible delay in
the recovery of the securities or possible loss of rights in the collateral
should the borrower fail financially.
PORTFOLIO TRANSACTIONS AND TURNOVER. All orders for the purchase or sale
of securities on behalf of the Fund are placed by the Advisor with
broker/dealers that the Advisor selects. A high portfolio turnover rate involves
larger brokerage commission expenses or transaction costs which must be borne
directly by the Fund, and may result in the realization of short-term capital
gains which are taxable to shareholders as ordinary income. The Advisor will not
consider portfolio turnover rate a limiting factor in making investment
decisions consistent with the Fund's objective and policies. It is anticipated
that the Fund's annual portfolio turnover rate will range from 200% to 250%.
INDUSTRY CONCENTRATION. There can be no assurance that a portfolio
consisting primarily of securities issued by companies engaged in Internet and
Internet-related activities will achieve the Fund's investment objective.
Because the Fund concentrates its investments in securities of companies engaged
in Internet related-businesses, its shares do not represent a complete
investment program and their value may fluctuate more than shares of a portfolio
invested in a
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broader range of industries. The value of Fund shares will also be especially
susceptible to factors affecting companies engaged in Internet and
Internet-related activities. Such companies are generally subject to the rate of
change in technology that is higher than in other industries. Changes in
governmental policies, such as telephone and cable regulations, freedom of
speech and anti-trust regulations may have a material effect on the demand for
Internet services. Many of the products and services of companies engaged in
Internet and Internet-related activities are also subject to relatively high
risks of rapid obsolescence caused by progressive scientific and technological
advances.
INVESTMENT LIMITATIONS
The Fund's investment objective and policies stated above may be changed
by the Fund's Board of Directors without approval by a majority of the Fund's
outstanding shares. No assurance can be given that the Fund will achieve its
investment objective.
The Fund has also adopted certain fundamental investment limitations that
may be changed only with the approval of a "majority of the outstanding shares
of a Fund" (as defined in the Statement of Additional Information). The
following descriptions summarize several of the Fund's fundamental investment
policies, which are set forth in full in the Statement of Additional
Information.
The Fund may not:
(1) purchase securities (except U.S. Government securities) if more
than 5% of its total assets will be invested in the securities of any one
issuer, except that up to 25% of the Fund's total assets may be invested
without regard to this 5% limitation;
(2) subject to the foregoing 25% exception, purchase
more than 10% of the outstanding voting securities of any
issuer;
(3) borrow money or issue senior securities (as defined in the 1940
Act) except (i) to borrow for temporary purposes in amounts not exceeding 5% of
its total assets and (ii) to meet redemption requests, in amounts (when
aggregated with amounts borrowed under clause (i)) not exceeding 33 1/3% of its
total assets.
These investment limitations are applied at the time investment securities
are purchased.
<PAGE>
HOW TO PURCHASE SHARES
Shares of the Fund are sold on a continuous basis and may be purchased on
any day the New York Stock Exchange is open for business directly from Funds
Distributor, Inc. (the "Distributor") or the Transfer Agent. Only the
Distributor is authorized to sell shares of the Fund. The Distributor is a
registered broker/dealer with principal offices at 60 State Street, Boston,
Massachusetts 02109.
Shares will be credited to a shareholder's account at the net asset value
next computed after an order is received by the Distributor. The issuance of
shares is recorded on the books of the Fund, and share certificates are not
issued unless expressly requested in writing. The Fund's management reserves the
right to reject any purchase order if, in its opinion, it is in the Fund's best
interest to do so and to suspend the offering of shares of any class for any
period of time.
The minimum initial investment is $1,000 and subsequent investments must be at
least $50.
An account may be opened by mailing a check or other negotiable bank draft
(payable to The Munder Funds) for $1,000 or more with a completed and signed
Account Application Form to The Munder Funds, c/o First Data, P.O. Box 5130,
Westborough, Massachusetts 01581-5130. An Account Application Form may be
obtained by calling (800) 438-5789. All such investments are made at the per
share net asset value of Fund shares next computed following receipt of payment
by the Transfer Agent. Confirmations of the opening of an account and of all
subsequent transactions in the account are forwarded by the Transfer Agent to
the shareholder's address of record.
The completed investment application must indicate a valid taxpayer
identification number and must be certified as such. Failure to provide a
certified taxpayer identification number may result in backup withholding at the
rate of 31%. Additionally, investors may be subject to penalties if they falsify
information with respect to their taxpayer identification numbers.
In addition, investors having an account with a commercial bank that is a
member of the Federal Reserve System may purchase shares of the Fund by
requesting their bank to transmit funds by wire to Boston Safe Deposit and Trust
Company, Boston, MA, ABA #011001234, DDA #16-798-3, Fund Name, Shareholder
Account Number, Account of (Registered Shareholder). Before wiring any funds, an
investor must contact the Fund by calling (800) 438-5789 to confirm the wire
<PAGE>
instructions. The investor's name, account number, taxpayer identification or
social security number, and address must be specified in the wire. In addition,
an Account Application Form containing the investor's taxpayer identification
number should be forwarded within seven days of purchase to The Munder Funds c/o
First Data, P.O. Box 5130, Westborough, Massachusetts 01581-5130.
Additional investment may be made at any time through the wire procedures
described above, which must include the investor's name and account number. The
investor's bank may impose a fee for investments by wire.
Automatic Investment Plan ("AIP")
An investor in shares of the Fund may arrange for periodic investments in
the Fund through automatic deductions from a checking or savings account by
completing the AIP portion in the Application Form. The minimum pre-authorized
investment amount is $50.
HOW TO REDEEM SHARES
Generally, shareholders may require the Fund to redeem their shares by
sending a written request, signed by the record owner(s), to The Munder Funds,
c/o First Data, P.O. Box 5130, Westborough, Massachusetts 01581-5130.
Signature Guarantee
If the proceeds of the redemption are greater than $50,000, or are to be
paid to someone other than the registered holder, or to other than the
shareholder's address of record, or if the shares are to be transferred, the
owner's signature must be guaranteed by a commercial bank, trust company,
savings association or credit union as defined by the Federal Deposit Insurance
Act, or by a securities firm having membership on a recognized national
securities exchange. If the proceeds of the redemption are less than $50,000, no
signature guarantees are required for shares for which certificates have not
been issued when an application is on file with the Transfer Agent and payment
is to be made to the shareholder of record at the shareholder's address of
record. The redemption price shall be the net asset value per share next
computed after receipt of the redemption request in proper order. See "Net Asset
Value."
Expedited Redemption
In addition, a shareholder redeeming at least $1,000 of shares and who has
authorized expedited redemption on the application form filed with the Transfer
Agent may, at the
<PAGE>
time of such redemption, request that funds be mailed to the commercial bank or
registered broker-dealer previously designated on the application form by
telephoning the Fund at (800) 438-5789 prior to 4:00 p.m. New York City time.
Redemption proceeds will be sent on the next business day following receipt of
the telephone redemption request. If a shareholder seeks to use an expedited
method of redemption of shares recently purchased by check, the Fund may
withhold the redemption proceeds until it is reasonably assured of the
collection of the check representing the purchase, which may take up to 15 days.
The Company, the Distributor and the Transfer Agent reserve the right at
any time to suspend or terminate the expedited redemption procedure or to impose
a fee for this service. During periods of unusual economic or market changes,
shareholders may experience difficulties or delays in effecting telephone
redemptions. The Transfer Agent has instituted procedures that it believes are
reasonably designed to insure that redemption instructions communicated by
telephone are genuine, and could be liable for losses caused by unauthorized or
fraudulent instructions in the absence of such procedures. The procedures
currently include a recorded verification of the shareholder's name, social
security number and account number, followed by the mailing of a statement
confirming the transaction, which is sent to the address of record. If these
procedures are followed, neither the Company, the Distributor nor the Transfer
Agent will be responsible for any loss, damages, expense or cost arising out of
any telephone redemptions effected upon instructions believed by them to be
genuine. Redemption proceeds will be mailed/wired only according to the
previously established instructions.
The right of redemption and payment of redemption proceeds are subject to
suspension for any period during which the New York Stock Exchange is closed, or
when trading on the New York Stock Exchange is restricted as determined by the
SEC; during any period when an emergency as defined by the rules and regulations
of the SEC exists; or during any period when the SEC has by order permitted such
suspension. The Fund will not mail redemption proceeds until checks (including
certified checks or cashier's checks) received for the shares purchased have
cleared, which can be as long as 15 days.
There is no minimum for telephone redemptions paid by check. However, the
Transfer Agent may deduct its current wire fee from the principal in the
shareholder's account for wire redemptions under $5,000. As of the date of this
Prospectus, this fee was $7.50 for each wire redemption. There is no charge for
wire redemptions of $5,000 or more.
<PAGE>
The value of shares on repurchase may be more or less than the investor's
cost depending upon the market value of the Fund's portfolio securities at the
time of redemption.
Involuntary Redemption
The Fund may involuntarily redeem an investor's shares if the net asset
value of such shares is less than $500; provided that involuntary redemptions
will not result from fluctuations in the value of an investor's shares. An
investor may be notified that the value of the investor's account is less than
$500, in which case the investor would be allowed 60 days to make an additional
investment before the redemption is processed.
Automatic Withdrawal Plan ("AWP")
The Fund offers an Automatic Withdrawal Plan which may be used by
shareholders who wish to receive regular distributions from their accounts. Upon
commencement of the AWP, the account must have a current value of $2,500 or more
in the Fund. Shareholders may elect to receive automatic cash payments of $50 or
more on a monthly, quarterly, semi-annual or annual basis. Automatic withdrawals
are normally processed on the 20th day of the applicable month or, if such day
is not a day the New York Stock Exchange is open for business, on the next
business day and are paid promptly thereafter. An investor may utilize the AWP
by completing the AWP portion of the Application Form available through the
Transfer Agent.
Shareholders should realize that if withdrawals exceed capital
appreciation and/or income dividends their invested principal in the account
will be depleted. Thus, depending upon the frequency and amounts of the
withdrawal payments and/or any fluctuations in the net asset value per share,
their original investment could be exhausted entirely. To participate in the
AWP, shareholders must have their dividends automatically reinvested and may not
hold share certificates. Shareholders may change or cancel the AWP at any time,
upon written notice to the Transfer Agent.
No Exchanges
Exchanges with the other Munder mutual funds are not permitted. To
purchase shares of another Munder mutual fund, a shareholder may redeem his or
her shares of the Fund and use the redemption proceeds to purchase shares in
accordance with the purchase procedures of the other Munder mutual fund.
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
Shareholders of the Fund are entitled to dividends and distributions from
the net income and capital gains, if any, earned on investments held by the
Fund. The net income of the Fund is declared annually as a dividend.
The Fund's net realized capital gains (including net short-term capital
gains), if any, are distributed at least annually.
Dividends and capital gains are paid in the form of additional shares of
the Fund unless a shareholder requests that dividends and capital gains be paid
in cash. In the absence of this request on the Account Application Form, each
purchase of shares is made on the understanding that the Fund's Transfer Agent
is automatically appointed to receive the dividends upon all shares in the
shareholder's account and to reinvest them in full and fractional shares of the
same Fund at the net asset value in effect at the close of business on the
reinvestment date.
The Fund's expenses are deducted from the income of the Fund before
dividends are declared and paid. These expenses include, but are not limited to,
fees paid to the Advisor, Administrator, Custodian and Transfer Agent; fees and
expenses of officers and Directors; taxes; interest; legal and auditing fees;
brokerage fees and commissions; certain fees and expenses in registering and
qualifying the Fund and its shares for distribution under Federal and state
securities laws; expenses of preparing prospectuses and statements of additional
information and of printing and distributing prospectuses and statements of
additional information to existing shareholders; the expense of reports to
shareholders, shareholders' meetings and proxy solicitations; fidelity bond and
Directors' and officers' liability insurance premiums; the expense of using
independent pricing services; and other expenses which are not assumed by the
Administrator. Any general expenses of the Company that are not readily
identifiable as belonging to a particular fund of the Company are allocated
among all funds of the Company by or under the direction of the Board of
Directors in a manner that the Board determines to be fair and equitable. Except
as noted in this Prospectus and the Statement of Additional Information, the
Fund's service contractors bear expenses in connection with the performance of
their services, and the Fund bears the expenses incurred in its operations. The
Advisor, Administrator, Custodian and Transfer Agent may voluntarily waive all
or a portion of their respective fees from time to time.
<PAGE>
NET ASSET VALUE
Net asset value for shares in the Fund is calculated by dividing the value
of all securities and other assets belonging to the Fund, less the liabilities
charged, by the number of outstanding shares.
The net asset value per share of the Fund for the purpose of pricing
purchase and redemption orders is determined as of the close of regular trading
on the New York Stock Exchange (currently 4:00 p.m., New York time) on each
business day.
With respect to the Fund, securities that are traded on a national
securities exchange or on the NASDAQ National Market System are valued at the
last sale price on such exchange or market as of the close of business on the
date of valuation. Securities traded on a national securities exchange or on the
NASDAQ National Market System for which there were no sales on the date of
valuation and securities traded on other over-the-counter markets, including
listed securities for which the primary market is believed to be
over-the-counter, are valued at the mean between the most recently quoted bid
and asked prices. Options will be valued at market value or fair value if no
market exists. Futures contracts will be valued in like manner, except that open
futures contract sales will be valued using the closing settlement price or, in
the absence of such a price, the most recently quoted asked price. Portfolio
securities primarily traded on the London Stock Exchange are generally valued at
the mid-price between the current bid and asked prices. Portfolio securities
which are primarily traded on foreign securities exchanges, other than the
London Stock Exchange, are generally valued at the preceding closing values of
such securities on their respective exchanges, except when an occurrence
subsequent to the time a value was so established is likely to have changed such
value. In such an event, the fair value of those securities will be determined
through the consideration of other factors by or under the direction of the
Board of Directors. Restricted securities and securities and assets for which
market quotations are not readily available are valued at fair value by the
Advisor under the supervision of the Board of Directors. Debt securities with
remaining maturities of 60 days or less are valued at amortized cost, unless the
Board of Directors determine that such valuation does not constitute fair value
at that time. Under this method, such securities are valued initially at cost on
the date of purchase (or the 61st day before maturity).
The Fund does not accept purchase and redemption orders on days the New
York Stock Exchange is closed. The New York Stock Exchange is currently
scheduled to be closed on New Year's Day, Presidents' Day, Good Friday, Memorial
Day
<PAGE>
(observed), Independence Day, Labor Day, Thanksgiving and Christmas, and on the
preceding Friday or subsequent Monday when one of these holidays falls on a
Saturday or Sunday, respectively.
MANAGEMENT
Board of Directors
The Company is managed under the direction of its governing Board of
Directors. The Statement of Additional Information contains the name and
background information of each Director.
Investment Advisor
The investment advisor of the Fund is Munder Capital Management, a
Delaware general partnership with its principal offices at 480 Pierce Street,
Birmingham, Michigan 48009. The principal partners of the Advisor are Old MCM,
Inc., Woodbridge Capital Management, Inc. ("Woodbridge") and WAM Holdings, Inc.
("WAM"). Woodbridge and WAM are indirect, wholly-owned subsidiaries of Comerica
Incorporated. Mr. Lee P. Munder, the Advisor's chief executive officer,
indirectly owns or controls a majority of the partnership interests in the
Advisor. As of March 31, 1996, the Advisor and its affiliates had approximately
$31 billion in discretionary assets under active management, of which $15
billion were invested in equity securities, $7 billion were invested in money
market or other short-term instruments, and $9 billion were invested in other
fixed income securities.
Subject to the supervision of the Board of Directors of the Company, the
Advisor provides overall investment management for the Fund, provides research
and credit analysis, is responsible for all purchases and sales of portfolio
securities, maintains books and records with respect to the Fund's securities
transactions and provides periodic and special reports to the Board of Directors
as requested. Investment decisions for the Fund's portfolio will be made by a
committee of portfolio managers employed by the Advisor.
For the advisory services provided and expenses assumed by it, the Advisor
has agreed to a fee from the Fund, computed daily and payable monthly, at an
annual rate of 1.00% of the average daily net assets of the Fund. This fee is
higher than the rate payable by most mutual funds.
The Advisor may, from time to time, make payments to banks, broker-dealers
or other financial institutions for certain services to the Fund and/or its
shareholders, including sub-administration, sub-transfer agency and
<PAGE>
shareholder servicing. Such payments are made out of the
Advisor's own resources and do not involve additional costs to
the Fund or its shareholders.
Administrator, Custodian and Transfer Agent
First Data Investor Services Group, Inc. ("First Data"), whose principal
business address is 53 State Street, Boston, Massachusetts 02109 (the
"Administrator"), serves as administrator for the Fund. First Data is a
wholly-owned subsidiary of First Data Corporation. The Administrator generally
assists the Company in all aspects of its administration and operations,
including the maintenance of financial records and fund accounting.
First Data also serves as the Fund's transfer agent and dividend
disbursing agent ("Transfer Agent"). Shareholder inquiries may be directed to
First Data at P.O. Box 5130, Westborough, Massachusetts 01581-5130.
As compensation for their services, the Administrator and Transfer Agent
are entitled to receive fees, based on the aggregate average daily net assets of
the Fund and certain other investment portfolios that are advised by the
Advisor, computed daily and payable monthly at the rates of: .12% of the first
$2.8 billion of net assets, plus .105% of the next $2.2 billion of net assets,
plus .10% of all net assets in excess of $5 billion with respect to the
Administrator and .02% of the first $2.8 billion of net assets, plus .015% of
the next $2.2 billion of net assets, plus .01% of all net assets in excess of $5
billion with respect to the Transfer Agent. Administration fees payable by the
Fund and certain other investment portfolios advised by the Advisor are subject
to a minimum annual fee of $1.2 million to be allocated among each series and
class thereof. The Administrator and Transfer Agent are also entitled to
reimbursement for out-of-pocket expenses. The Administrator has entered into a
Sub- Administration Agreement with the Distributor under which the Distributor
provides certain administrative services with respect to the Fund. The
Administrator pays the Distributor a fee for these services out of its own
resources at no cost to the Fund.
Comerica Bank (the "Custodian"), whose principal business address is One
Detroit Center, 500 Woodward Avenue, Detroit, Michigan 48226, provides custodial
services to the Fund. As compensation for its services, the Custodian is
entitled to receive fees, based on the aggregate average daily net assets of the
Fund and other Funds of the Company and The Munder Funds Trust, computed daily
and payable monthly at an annual rate of .03% of the first $100 million of
average daily net assets, .02% of the next $500 million of net assets and .01%
<PAGE>
of net assets in excess of $600 million. The Custodian also
receives certain transaction based fees.
For an additional description of the services performed by the
Administrator, Transfer Agent and Custodian, see the Statement of Additional
Information.
Distribution Services Arrangement
The Fund has adopted a Rule 12b-1 Distribution and Service Plan, pursuant
to which the Fund uses its assets to finance activities relating to the
distribution of its shares to investors and the provision of certain shareholder
services (the "Plan"). Under the Plan, the Distributor is paid a distribution
and service fee at an annual rate of up to 0.25% of the value of the Fund's
average daily net assets.
The Plan permits payments to be made by the Fund to the Distributor for
expenditures incurred by it in connection with the distribution of the Fund's
shares to investors and provision of certain shareholder services including but
not limited to the payment of compensation, including incentive compensation to
Service Organizations to obtain various distribution related services for the
Funds. The Distributor is also authorized to engage in advertising, the
preparation and distribution of sales literature and other promotional
activities on behalf of the Funds. In addition, the Plan authorizes payments by
the Fund of the cost of preparing, printing and distributing fund prospectuses
and statements of additional information to prospective investors and of
implementing and operating the Plan. Distribution expenses also include an
allocation of overhead of the Distributor and accruals for interest on the
amount of distribution expenses that exceed distribution fees and contingent
deferred sales charges received by the Distributor.
The Plan may be terminated at any time. The Plan provides that amounts
paid as prescribed by the Plan at any time may not cause the limitation on such
payments established by the Plan to be exceeded. The amount of daily
compensation payable to the Distributor with respect to each day will be accrued
each day as a liability of the Fund and will accordingly reduce the Fund's net
assets upon such accrual.
Payments under the Plan are not tied exclusively to the distribution
and/or shareholder service expenses actually incurred by the Distributor and the
payments may exceed distribution and/or service expenses actually incurred. The
Company's Board of Directors evaluates the appropriateness of the Plan and its
payment terms on a continuous basis and in doing so will consider all relevant
factors, including expenses incurred by the Distributor and the amount received
<PAGE>
under the Plan.
TAXES
The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). Such
qualification generally relieves the Fund of liability for Federal income taxes
to the extent its earnings are distributed in accordance with the Code.
Qualification as a regulated investment company under the Code for a
taxable year requires, among other things, that the Fund distribute to its
shareholders an amount equal to at least 90% of its investment company taxable
income for such year. In general, the Fund's investment company income will be
its taxable income (including dividends, interest, and short-term capital gains)
subject to certain adjustments and excluding the excess of any net long term
capital gain for the taxable year over the net short-term capital loss, if any,
for such year. The Fund intends to distribute substantially all of its
investment company taxable income each taxable year. Such distributions will be
taxable as ordinary income to the Fund's shareholders who are not currently
exempt from Federal income taxes, whether such income is received in cash or
reinvested in additional shares. (Federal income taxes for distributions to an
IRA or qualified retirement plan are deferred under the Code if applicable
requirements are met.) The dividends received deduction for corporations will
apply to such distributions by the Fund to the extent of the total qualifying
dividends received by the distributing Fund from domestic corporations for the
taxable year and if other applicable tax requirements are met.
Substantially all of the Fund's net realized long term capital gains, if
any, will be distributed at least annually. The Fund generally will have no tax
liability with respect to such gains, and the distributions will be taxable to
shareholders who are not currently exempt from Federal income taxes as long term
capital gains, no matter how long the shareholders have held their shares.
Dividends declared in October, November, or December of any year payable
to shareholders of record on a specified date in such months will be deemed to
have been received by shareholders and paid by the Fund on December 31 of such
year if such dividends are actually paid during January of the following year.
<PAGE>
Before purchasing shares in the Fund, the impact of dividends or
distributions which are expected to be declared or have been declared, but not
paid, should be carefully considered. Any dividend or distribution declared
shortly after a purchase of such shares prior to the record date will have the
effect of reducing the per share net asset value by the per share amount of the
dividend or distribution. All or a portion of such dividend or distribution,
although in effect a return of capital, may be subject to tax.
A taxable gain or loss may also be realized by a holder of shares in the
Fund upon the redemption, exchange or transfer of shares depending upon the tax
basis of the shares and their price at the time of the transaction.
On an annual basis, the Fund will send written notices to record owners of
shares regarding the Federal tax status of distributions made by them.
Foreign Taxes
Income or gain from investments in foreign securities may be subject to
foreign withholding or other taxes. It is expected the Fund may be subject to
foreign withholding taxes with respect to income received from sources within
foreign countries.
If the Fund invests in certain "passive foreign investment companies"
("PFICs"), it will be subject to Federal income tax (and possibly additional
interest charges) on a portion of any "excess distribution" or gain from the
disposition of such shares even if it distributes such income to its
shareholders. If the Fund elects to treat the PFIC as a "qualified electing
fund" ("QEF") and the PFIC furnishes certain financial information in the
required form to the Fund, the Fund will instead be required to include in
income each year its allocable share of the ordinary earnings and net capital
gains on the QEF, regardless of whether received, and such amounts will be
subject to the various distribution requirements described above.
The foregoing summarizes some of the important tax considerations
generally affecting the Fund and its shareholders and is not intended as a
substitute for careful tax planning. State and local tax laws may differ from
the Federal laws summarized above. Accordingly, potential investors in the Fund
should consult their tax advisors with respect to their own tax situation.
<PAGE>
DESCRIPTION OF SHARES
The Fund operates as one series of the Company.
The Company was organized as a Maryland corporation on November 18, 1992
and is also registered under the 1940 Act as an open-end management investment
company. The Company's Articles of Incorporation authorize the Directors to
classify and reclassify any unissued shares into one or more classes of shares.
Pursuant to such authority, the Directors have authorized the issuance of shares
of common stock, representing interests in The Munder Multi-Season Growth Fund,
The Munder Real Estate Equity Investment Fund, The Munder Mid- Cap Growth Fund,
The Munder Value Fund, The Munder International Bond Fund, The NetNet Fund and
The Munder Money Market Fund, each of which, except The Munder International
Bond Fund, is classified as a diversified investment company under the 1940 Act.
Each share of the Fund has a par value of $.01 per share and represents a
proportionate interest in the assets of the Fund.
Shareholders are entitled to one vote for each full share held and
proportionate fractional votes for fractional shares held, and will vote in the
aggregate and not by Fund, except where otherwise required by law or when the
Directors determine that the matter to be voted upon affects only the interests
of the shareholders of a particular Fund. The Fund is not required and do not
currently intend to hold annual meetings of shareholders for the election of
Board members except as required under the 1940 Act. A meeting of shareholders
will be called upon the written request of at least 10% of the outstanding
shares of the Company. To the extent required by law, the Fund will assist in
shareholder communications in connection with such a meeting. For a further
discussion of the voting rights of shareholders, see "Additional Information
Concerning Shares" in the Statement of Additional Information.
Reports to Shareholders
The Fund has eliminated duplicate mailings of prospectuses and shareholder
reports to accounts which have the same primary record owner, and with respect
to joint tenant accounts or tenant in common accounts and accounts which have
the same address. Additional copies of prospectuses and reports to shareholders
are available upon request by calling the Fund at (800) 438-5789.
PERFORMANCE
From time to time, the Fund may quote performance data
for the Shares in advertisements or in communications to
<PAGE>
shareholders. The total return of Shares in the Fund may be calculated on an
average annual total return basis, and may also be calculated on an aggregate
total return basis, for various periods. Average annual total return reflects
the average percentage change in value of an investment in the Fund from the
beginning date of the measuring period to the end of the measuring period.
Aggregate total return reflects the total percentage change in value over the
measuring period. Both methods of calculating total return assume that dividends
and capital gains distributions made during the period are reinvested in the
same class of shares.
Quotations of total return will reflect the fees for certain distribution
and shareholder services as described in this Prospectus.
The yield of shares in the Fund is computed based on the net income of
such Fund during a 30-day (or one month) period (which period will be identified
in connection with the particular yield quotation). More specifically, the
Fund's yield is computed by dividing the per share net income for the class
during a 30-day (or one-month) period by the maximum offering price per share on
the last day of the period and annualizing the results on a semi-annual basis.
The Fund may compare the performance of the Shares to the performance of
other mutual funds with similar investment objectives and to other relevant
indices or to rankings prepared by independent services or other financial or
industry publications that monitor the performance of mutual funds, including,
for example, Lipper Analytical Services, Inc., the Standard & Poor's 500 Index,
an unmanaged index of a group of common stocks, the Consumer Price Index, or the
Dow Jones Industrial Average, an unmanaged index of common stocks of 30
industrial companies listed on the New York Stock Exchange. Performance and
yield data as reported in national financial publications such as Morningstar,
Inc., Money Magazine, Forbes, Barron's, The Wall Street Journal and The New York
Times, or in publications of a local or regional nature, may also be used in
comparing the performance of the Fund.
Performance will fluctuate and any quotation of performance should not be
considered as representative of future performance of a class of shares in the
Fund. Shareholders should remember that performance is generally a function of
the kind and quality of the instruments held in the Fund, portfolio maturity,
operating expenses, and market conditions. Any fees charged by institutions
directly to their Customers' accounts in connection with investments in the Fund
will not be included in calculations of yield and performance.
<PAGE>
SHAREHOLDER ACCOUNT INFORMATION
Shareholders may place purchase and redemption orders directly through the
Transfer Agent. See "How to Purchase Shares" and "How to Redeem Shares" for more
information. The Transfer Agent for the Fund is First Data Investor Services
Group, Inc.
Investment by Mail
Send the completed Account Application Form (if initial purchase) or
letter stating Fund name, shareholder's registered name and account number (if
subsequent purchase) with a check to:
First Data
The Munder Funds
P.O. Box 5130
Westborough, Massachusetts 01581-5130
Investments by Bank Wire
An investor opening a new account should call the Funds at (800) 438-5789
to obtain an account number. Within seven days of purchase such an investor must
send a completed Account Application Form containing the investor's certified
taxpayer identification number to First Data Investor Services Group, Inc. at
the address provided above under "Investments by Mail." Wire instructions must
state the Fund name, the shareholder's registered name and the shareholder
account number. Bank wires should be sent through the Federal Reserve Bank Wire
System to:
Boston Safe Deposit and Trust Company
Boston, MA
ABA#: 011001234
DDA#: 16-798-3
Account No.
(State Fund name, shareholder's registered name and
shareholder account number)
Before wiring any funds an investor must call the Fund at (800) 438-5789
to confirm the wire instructions.
Redemptions by Telephone
Call the Fund at (800) 438-5789.
<PAGE>
Redemptions by Mail
Send complete instructions, including amount of redemption, shareholder's
registered name, account number, and, if a certificate has been issued, an
endorsed share certificate, to:
First Data
The Munder Funds
P.O. Box 9755
Providence, Rhode Island 02940-9755
Additional Questions
Shareholders with additional questions regarding purchase and redemption
procedures may call the Fund at (800) 438-5789.
NetNet FUND PLEASE PRINT OR TYPE
PLEASE MAIL YOUR COMPLETED APPLICATION ALONG WITH YOUR CHECK
TO:
NetNet Fund
c/o First Data Investor Services Group, Inc.
P.O. Box 9755
Providence, RI 02940-9755
If you have questions regarding this application, please
telephone the Transfer Agent at (800) 438-5789
PLEASE CHECK ONE: New Account Change to Existing Options -
Account Number:
1 ACCOUNT REGISTRATION
Name Social Security Number
Joint Owner (if any) (If Joint Tenancy, use
Social Security of this
joint owner)
OR
Uniform Transfer to Minor:
for:
Custodian Name (one custodian only) Minor's Name (one
minor only)
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State (Custodian's State of Residence) Minor's Social
Security Number
OR
Trust Corporation Other (please specify)
Trust/Corporation Name
Trust Date Taxpayer Identification Number
2 MAILING ADDRESS
Street Apt.
City State Zip Code Telephone Number
Non-Resident Alien: Yes No
If Yes, Country of Residence
3 INITIAL INVESTMENT
Minimum investment of $1,000. Please be sure to read the prospectus carefully
before investing or sending money. You may request an additional prospectus by
calling (800) 438- 5789.
INVESTMENT AMOUNT
By check (Payable to The Munder Funds)
By wire, Account Number (Account
number assigned by Bank from
which assets were wired).
*$50 per Fund if the Automatic Investment Plan Option is being established at
this time (please complete section 5).
4 DISTRIBUTION OPTION
If adding this option to an already existing account, please complete Section 10
for a signature guarantee.
A. Reinvest dividends and capital gains in additional
Fund shares.
B. Pay dividends in cash; reinvest capital gains in
additional Fund shares.
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C. Pay dividends and capital gains in cash.
D. Please send my: Dividends Dividends &
Capital Gains (choose one) directly to my
checking/savings account.
I(We) authorize the NetNet Fund to deposit distributions into the following
Checking OR Savings account:
Please Staple Void Check or Deposit Slip Here:
Print Name Address
ABA Number (Bank Routing Number) Account Number Bank Account
Registration
Wiring Instructions
5 AUTOMATIC INVESTMENT PLAN
YES, I(we) wish to participate in the Automatic Investment Plan (AIP). I(We)
authorize First Data Investor Services Group, Inc. (First Data), the NetNet Fund
transfer agent, to invest automatically $ ($50 minimum) for me(us) on a: Monthly
OR Quarterly (Please choose either the 5th or the 20th of the month) basis and
draw a bank draft in payment of each of these investments against my(our)
Checking OR Savings account. For the purpose of verifying my(our) bank account
number, I(we) have enclosed a blank check or deposit slip marked void and have
signed the bank authorization below.
Name of Fund Checking/Savings Account Number ABA
Number
(Bank
Routing
Number)
Please note that your bank will clear and process each bank draft and will
include it with your regular statement. However, acceptance of this
authorization is conditional upon approval of your authorization by your bank,
which will allow First Data, the transfer agent for the NetNet Fund, to act as
your agent with regard to the Automatic Investment Plan (AIP). The AIP will
automatically terminate without notice if any bank draft is not paid upon
presentation by First Data, to your bank. The AIP may be modified or terminated
at any time, upon thirty (30)-days written notice.
Signature of Depositor Date
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Signature of Joint Depositor (if any) Date
Please Staple Void Check or Deposit Slip Here
6 TELEPHONE REDEMPTION
Please check the box if you want this option.
I (We) authorize First Data to act upon instructions received by telephone
from me (us) to redeem shares of the NetNet Fund.
1. I (We) relieve the Fund or First Data of any liability for the loss, cost or
expense for acting upon such instructions reasonably believed to be from me
(us).
2. I (We) assume responsibility for notifying the Fund within seven (7) business
days if a confirmation for the transaction is not received or is incorrect.
3. Redemption proceeds will be sent only to my account
address of record.
Name Name
Account # Account #
Date Date
7 AUTHORIZATIONS, CERTIFICATIONS AND SIGNATURES
See Prospectus for complete information. By signing the application, I (we)
hereby certify under the penalty of perjury that the information on this
application is true, complete and correct and that:
(We) understand that this order is subject to acceptance by the NetNet Fund.
I (we) agree that the NetNet Fund, Funds Distributor, Inc., First Data, Munder
Capital Management or any of its affiliates, officers, directors or employees
will not be liable for any loss, expense or cost for acting upon instructions or
inquiries reasonably believed to be genuine. Shares of the Fund are not deposits
or obligations of, or guaranteed or endorsed by, any bank, and are not insured
or guaranteed by the Federal Deposit Insurance Corporation, the
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Federal Reserve Board, or any other agency. An investment in the Fund involves
investment risks, including the possible loss of principal.
I (we) represent that I am (we are) of legal age and capacity and have read the
Prospectus for the NetNet Fund, and agree to its terms. First Data, is hereby
appointed agent to receive dividends and distributions for automatic
reinvestment unless otherwise directed in Section 4.
I also certify that:
This purchase is for personal investment purposes and the shares acquired
hereunder shall not be resold except through redemption by the Fund.
I (we) understand that this order is subject to acceptance by the NetNet Fund.
Please sign below exactly as the account is to be registered.
Corporation, etc. indicate titles:
Signature Date Name (please print)
Signature Date Name (please print)
8 TAXPAYER IDENTIFICATION
The Internal Revenue Service requires that all taxpayers provide their Taxpayer
Identification Numbers (Social Security Numbers) and sign in the space provided
in the section below. Failure by non-exempt taxpayers to furnish us with the
correct Taxpayer Identification Number will result in withholding of 31% of all
taxable dividends paid and/or withholding on certain other payments (this is
referred to as backup withholding). Please insert your Social Security Number or
Tax Identification Number in the space provided below as indicated by the
following table:
Type of Registration Tax I.D. Number to be Used
Individual Account Social Security # of Applicant
Joint Account Social Security # of Either
Person
Custodian Account for Minor Social Security # of Minor
Trust or Corporation Tax Identification Number
Taxpayer Identification:
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I (the Investor) certify under penalties of perjury that:
(1) The Social Security Number or taxpayer identification number shown above is
correct and may be used for any custodial or trust account opened for me by the
NetNet Fund and
(2) I (the Investor) am not subject to backup withholding
because:
(a) I am exempt from Backup Withholding
(b) I have not been notified by the Internal
Revenue Service ("IRS") that I am, as a result
of failure to report all interest or dividends,
or
(c) the IRS has notified me that I am no longer
subject to backup withholding.
The certification in this paragraph is required from all non-exempt persons to
prevent backup withholding of 31% of all taxable distribution and gross
redemption proceeds under the Federal income tax law.
Check here if you are subject to backup withholding or have not received a
notice from the IRS advising you that backup withholding has been terminated.
<PAGE>
Authorization:
Signature of Owner Date Title (if signing for
corporation, trusts,
etc.)
Signature of Joint Owner Date Title (if signing for
corporation, trusts,
etc.)
9 SIGNATURE GUARANTEE
If the following option is being established on an existing account, the
shareholder(s) signature(s) need(s) to be signature guaranteed.
Eligible guarantor institutions generally include banks, broker/dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations:
Option #4 - Distribution Option
Signature of Guaranteed (if required) Name of Guarantor
Shares of the Munder Funds are not deposits or obligations of, or guaranteed or
endorsed by any bank, and are not federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency. All
mutual fund shares involve certain investment risks, including the possible loss
of principal.
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