As filed with the Securities and Exchange Commission
on September 30, 1996
Registration Nos. 33-54748
811-7348
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. ---- [ ]
Post-Effective Amendment No. 19 [X]
----
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 21 [X]
----
(Check appropriate box or boxes)
The Munder Funds, Inc.
(Exact Name of Registrant as Specified in Charter)
480 Pierce Street, Birmingham, Michigan 48009
(Address of Principal Executive Offices) (Zip code)
Registrant's Telephone Number: (810) 647-9200
Paul F. Roye, Esq.
Dechert Price & Rhoads
1500 K Street, N.W., Suite 500
Washington, D.C. 20005
(Name and Address of Agent for Service)
Copies to:
Lisa Anne Rosen, Esq.
Munder Capital Management
480 Pierce Street
Birmingham, Michigan 48009
[X] It is proposed that this filing will become effective on December 14, 1996
pursuant to paragraph (a)(2) of Rule 485
The Registrant has elected to register an indefinite number of shares
under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment
Company Act of 1940. Registrant filed the notice required by Rule 24f-2 with
respect to its fiscal year ended June 30, 1996 on August 29, 1996.
<PAGE>
THE MUNDER FUNDS, INC.
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a)
PART A
------
Prospectus for The Munder Short Term Treasury Fund
(Class A, B and C Shares)
Item Heading
---- -------
1. Cover Page Cover Page
2. Synopsis Prospectus
Summary; Expense
Table
3. Condensed Financial Information Not Applicable
4. General Description of Registrant Cover Page;
Prospectus
Summary;
Investment
Objective and
Policies;
Description of
Shares
5. Management of the Fund Management;
Investment
Objective and
Policies;
Dividends and
Distributions;
Performance
6. Capital Stock and Other Securities Management; How
to Purchase
Shares; How to
Redeem Shares;
Dividends and
Distributions;
Taxes;
Description of
Shares
7. Purchase of Securities Being Offered How to Purchase
Shares; Net Asset
Value
<PAGE>
8. Redemption or Repurchase How to Redeem
Shares
9. Pending Legal Proceedings Not Applicable
Prospectus for The Munder Short Term Treasury Fund
(Class K Shares)
Item Heading
---- -------
1. Cover Page Cover Page
2. Synopsis Expense Table
3. Condensed Financial Information Not Applicable
4. General Description of Registrant Cover Page;
Investment
Objective and
Policies;
Description of
Shares
5. Management of the Fund Management;
Investment
Objective and
Policies;
Dividends and
Distributions;
Performance
6. Capital Stock and Other Securities Management;
Purchases and
Redemptions of
Shares; Dividends
and
Distributions;
Taxes;
Description of
Shares
7. Purchase of Securities Being Offered Purchases and
Redemptions of
Shares; Net Asset
Value
8. Redemption or Repurchase Purchases and
Redemptions of
Shares
9. Pending Legal Proceedings Not Applicable
<PAGE>
Prospectus for The Munder Short Term Treasury Fund
(Class Y Shares)
Item Heading
---- -------
1. Cover Page Cover Page
2. Synopsis Expense Table
3. Condensed Financial Information Not Applicable
4. General Description of Registrant Cover Page;
Investment
Objective and
Policies;
Description of
Shares
5. Management of the Fund Management;
Investment
Objective and
Policies;
Dividends and
Distributions;
Performance
6. Capital Stock and Other Securities Management;
Purchases and
Redemptions of
Shares; Dividends
and
Distributions;
Taxes;
Description of
Shares
7. Purchase of Securities Being Offered Purchases and
Redemptions of
Shares; Net Asset
Value
8. Redemption or Repurchase Purchases and
Redemptions of
Shares
9. Pending Legal Proceedings Not Applicable
PART B
------
10. Cover Page Cover Page
<PAGE>
11. Table of Contents Table of Contents
12. General Information and History See Prospectus --
"Management;"
General;
Directors and
Officers
13. Investment Objectives and Policies Fund Investments;
Additional
Investment
Limitations;
Portfolio
Transactions
14. Management of the Fund See Prospectus --
"Management;"
Directors and
Officers;
Miscellaneous
15. Control Persons and Principal See Prospectus --
Holders of Securities "Management;"
Miscellaneous
16. Investment Advisory and Other Investment
Services Advisory
Services and
Other Service
Arrangements; See
Prospectus --
"Management"
17. Brokerage Allocation and Other Portfolio
Practices Transactions
18. Capital Stock and Other Securities See Prospectus --
"Description of
Shares" and
"Management;"
Additional
Information
Concerning Shares
19. Purchase, Redemption and Pricing Purchase and
of Securities Being Offered Redemption
Information; Net
Asset Value;
Additional
Information
Concerning Shares
20. Tax Status Taxes
<PAGE>
21. Underwriters Distribution of
Fund Shares
22. Calculation of Performance Data Performance
Information
23. Financial Statements Not Applicable
THE MUNDER FUNDS, INC.
The purpose of this Post-Effective Amendment filing is to add to the
Registration Statement prospectuses and a statement of additional information
regarding a new portfolio of the Registrant, designated The Munder Short Term
Treasury Fund.
The prospectuses and statements of additional information of The Munder
Multi-Season Growth Fund, The Munder Money Market 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, The Munder Small-Cap Value
Fund, The Munder Micro-Cap Equity Fund and The Munder Equity Selection Fund are
not included in this filing.
<PAGE>
THE MUNDER SHORT TERM TREASURY FUND
480 Pierce Street
Birmingham, Michigan 48009
Telephone (800) 438-5789
PROSPECTUS
Class A, Class B and Class C Shares
The Munder Short Term Treasury Fund (the "Fund") is a series of shares
issued by The Munder Funds, Inc. (the "Company"), an open-end management
investment company. The Fund's investment objective is to provide shareholders
with a high level of current income consistent with capital preservation. The
Fund seeks to achieve its objective by investing only in U.S. Treasury
securities and repurchase agreements fully collateralized by U.S. Treasury
securities. There can be no assurance that the Fund's investment objective will
be achieved. The net asset value per share of the Fund will fluctuate in
response to changes in market conditions and other factors.
Munder Capital Management (the "Advisor") serves as investment advisor to
the Fund.
This prospectus contains the information that a prospective investor
should know before investing in the Fund. Investors are encouraged to read this
Prospectus and retain it for future reference. A Statement of Additional
Information dated ______, 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. It may be obtained free of
charge by calling the Fund at (800) 438-5789.
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 ____________, 1996
<PAGE>
TABLE OF CONTENTS
PAGE
PROSPECTUS SUMMARY................................................ 3
EXPENSE TABLE..................................................... 6
THE FUND.......................................................... 8
INVESTMENT OBJECTIVE AND POLICIES................................. 8
PORTFOLIO INSTRUMENTS AND PRACTICES AND
ASSOCIATED RISK FACTORS....................... 9
INVESTMENT LIMITATIONS............................................ 12
HOW TO PURCHASE SHARES............................................ 13
HOW TO REDEEM SHARES.............................................. 21
CONVERSION OF CLASS B SHARES...................................... 26
HOW TO EXCHANGE SHARES............................................ 27
DIVIDENDS AND DISTRIBUTIONS....................................... 28
NET ASSET VALUE................................................... 29
MANAGEMENT........................................................ 30
TAXES............................................................. 34
DESCRIPTION OF SHARES............................................. 35
PERFORMANCE....................................................... 37
SHAREHOLDER ACCOUNT INFORMATION................................... 38
No person has been authorized to give any information, or to make any
representations not contained in this Prospectus, or in the Fund's 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 Company
or its distributor, Funds Distributor, Inc. (the "Distributor"). This Prospectus
does not constitute an offering by the Company or by the Distributor in any
jurisdiction in which such offering may not lawfully be made.
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing in this Prospectus.
Investment Objective
The investment objective of the Munder Short Term Treasury Fund is to
provide investors with a high level of current income consistent with capital
preservation. The Fund seeks to achieve its objective by investing only in U.S.
Treasury securities and repurchase agreements fully collateralized by U.S.
Treasury securities.
Principal Investments
Under normal market conditions, 100% of the Fund's assets are invested in
U.S. Treasury securities and repurchase agreements fully collateralized by U.S.
Treasury securities. The dollar-weighted average maturity of the Fund's
portfolio is not expected to exceed two years.
Investment Risks and Special Considerations
The Fund is not a money market fund and, although it seeks to maintain
minimum fluctuation of principal value, no assurance can be given that, when an
investor desires to redeem Fund shares, the then-current net asset value per
share will be at or greater than the net asset value per share at the time of
purchase.
The value of the portfolio securities held by the Fund will vary inversely
to changes in prevailing interest rates. Thus, if interest rates have increased
from the time a security was purchased, such security, if sold, might be sold at
a price less than its cost. Similarly, if interest rates have declined from the
time a security was purchased, such security, if sold, might be sold at a price
greater than its purchase cost. In either instance, if the security was
purchased at face value and held to maturity, no gain or loss would be realized.
Purchase Plans
This Prospectus offers three classes, "Class A," "Class B," and "Class C,"
respectively, of shares ("Shares") to investors. Investors may select Class A
shares, Class B shares or Class C shares, each with different expense levels and
with a public offering price that reflects different sales charges. Purchases in
excess of $250,000 must be for Class A or Class C shares. The Fund also offers
two additional classes of Shares, Class K Shares and Class Y Shares. These
classes of the Fund may have different sales charges and expense levels, which
may affect performance. Investors may
<PAGE>
call the Fund at (800) 438-5789 for more information concerning Class K Shares
and Class Y Shares.
Class A Shares
Offered at net asset value plus a maximum initial sales
charge of 4.00%. The Fund pays a shareholder servicing fee at
the annual rate of .25% of the value of average daily net
assets. See "How to Purchase Shares."
Class B Shares
Offered at net asset value per share subject to a contingent deferred
sales charge ("CDSC") imposed on certain redemptions made within six years of
the date of purchase at the maximum rate of 5.00% of the lesser of the shares'
net asset value or original purchase price. The Fund is subject to shareholder
servicing and distribution fees at the annual rate of 1.00% of the value of
average daily net assets. Class B shares will convert automatically to Class A
shares, based on relative net asset value, at the end of six years after the
date of original purchase. See "How to Purchase Shares."
Class C Shares
Offered at net asset value per share subject to a CDSC imposed on certain
redemptions made within one year of the date of purchase at the rate of 1.00% of
the lesser of the shares' net asset value or original purchase price. The Fund
is subject to shareholder servicing and distribution fees at the annual rate of
1.00% of the value of average daily net assets.
Purchasing Shares
Class A shares, Class B shares and Class C shares of the
Fund are offered continuously and may be purchased from the
Distributor through certain broker-dealers and other financial
institutions or through First Data Investor Services Group,
Inc. (the "Transfer Agent"). Shares of the Fund are subject
to the applicable sales charge or CDSC. See "How to Purchase
Shares."
Minimum Investment
$1,000 minimum investment ($50 through Automatic
Investment Plan). $50 minimum for subsequent purchases.
Exchange Privileges
Shares may be exchanged for shares of the same class of other funds of the
Company or The Munder Funds Trust, subject to any applicable sales charge.
<PAGE>
Reinvestment
Automatic reinvestment of dividends and capital gains without a sales
charge or CDSC unless a shareholder elects to receive cash.
Other Features
<TABLE>
<S> <C> <C>
Class A Shares Class B Shares Class C Shares
Automatic Investment Plan Automatic Investment Plan Automatic Investment Plan
Automatic Withdrawal Plan Automatic Withdrawal Plan Automatic Withdrawal Plan
Retirement Plans Retirement Plans Retirement Plans
Telephone Exchanges Telephone Exchanges Telephone Exchanges
Rights of Accumulation Reinvestment Privilege Reinvestment Privilege
Letter of Intent
Quantity Discounts
Reinvestment Privilege
</TABLE>
Dividends and Other Distributions
Dividends are declared daily for the Fund; capital gains are distributed
at least annually.
Net Asset Value
Determined once daily for the Fund on each business day.
Redeeming Shares
Class A shares of the Fund may be redeemed at net asset
value per share by mail, telephone or check. Certain
redemptions of Class A shares may be subject to a CDSC. Class
B and Class C shares are redeemable at net asset value less
any applicable CDSC 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 Board of Directors. See "Management -- Investment Advisor."
Distributor
<PAGE>
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.
<TABLE>
<S> <C> <C> <C>
Class A Shares Class B Shares Class C Shares
Shareholder transaction expenses:
Maximum sales load on purchases 4.00% None None
Maximum sales load on reinvested None None None
dividends
Maximum contingent deferred None(1) 5.00% 1.00%(2)
sales charge
Redemption fees None None None
Exchange fees None None None
Annual operating expenses:
(as a percentage of average net
assets)
Advisory fees .25% .25% .25%
12b-1 fees .25% 1.00%(3) 1.00%(3)
Other expenses .25% .25% .25%
Total Fund operating expenses .75% 1.50% 1.50%
(1) A deferred sales charge of 1.00% is assessed on certain redemptions of Class A shares that were
purchased with no initial sales charge as part of an investment of $1,000,000 or more. See "How
to Purchase Shares."
(2) A deferred sales charge of up to 1.00% is assessed on redemption of Class C shares made within
the first year of investing.
(3) Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted by the National Association of
Securities Dealers, Inc.
</TABLE>
The initial sales charge applicable to Class A shares set forth in the
above table is the maximum charge imposed upon the purchase of Class A shares.
Reductions and waivers from sales loads are described under "How to Purchase
Shares." The CDSC applicable to Class B shares set forth in the above table is
the maximum sales load applicable imposed upon redemption of Class B shares.
Waivers of CDSC are described under "How to Redeem Shares."
"Other expenses" in the above table include fees for shareholder services,
administrator fees, custodial fees, legal and accounting fees, printing costs,
registration fees,
<PAGE>
fees for any portfolio valuation service, the cost of regulatory compliance, the
costs of maintaining the Fund's legal existence and the costs involved with
communicating with shareholders. The amount of "Other expenses" is based on
estimated expenses and projected assets for the current fiscal year. The nature
of the services for which the Fund is obligated to pay advisory fees is
described under "Management." 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.
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:
<TABLE>
<S> <C> <C>
An investor would pay the following expenses on a $1,000 investment, assuming a
5% annual return:
1 Year 3 Year
Class A Shares(1) $47 $63
Class B Shares
Assuming redemption at end of time period(2) $65 $77
Assuming no redemption at the end of time period $15 $47
Class C Shares (3) $25 $47
(1) Assumes deduction at the time of purchase of the maximum initial sales
charge and redemption at the end of the time period shown.
(2) Assumes deduction at the time of redemption of the maximum applicable CDSC. See "How to Redeem
Shares -- Contingent Deferred Sales Charge -- Class B Shares."
(3) Assumes redemption at the end of time period shown and is subject to a
CDSC for redemptions made within one year of date of purchase.
</TABLE>
Because of the 12b-1 fees paid by the Fund as shown in the above table,
long-term shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the National Association of Securities
Dealers, Inc.
The foregoing Expense Table and Example are intended to
assist investors in understanding the various shareholder
<PAGE>
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 FUND
The Munder Short Term Treasury Fund (the "Fund") is a series of shares
issued by The Munder Funds, Inc. (the "Company"), an open-end management
investment company. The Company was organized 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
The Fund's investment objective is to provide shareholders with a high
level of current income consistent with capital preservation. The Fund seeks to
achieve its objective by investing only in U.S. Treasury securities and
repurchase agreements fully collateralized by U.S. Treasury securities. Under
normal market conditions, the Fund will invest 100% of its total assets in these
securities. Under normal circumstances, the Fund will enter into repurchase
agreements with maturities of seven days or less and will invest in securities
with remaining maturities of three years or less. The dollar-weighted average
maturity of the Fund's portfolio is not expected to exceed two years. The Fund
also may borrow money for temporary purposes and to meet redemption requests and
may enter into reverse repurchase agreements. In addition, the Fund may lend
portfolio securities, may purchase securities on a "when-issued" basis and may
purchase or sell securities on a "forward commitment" basis. See "Portfolio
Instruments and Practices and Associated Risk Factors." There can be no
assurance that the Fund's investment objective will be achieved.
The Fund is not a money market fund and, although it seeks to maintain
minimum fluctuation of principal value, no assurance can be given that, when an
investor desires to redeem Fund shares, the then-current net asset value per
share will be at or greater than the net asset value per share at the time of
purchase.
The value of the portfolio securities held by the Fund will vary inversely
to changes in prevailing interest rates.
<PAGE>
Thus, if interest rates have increased from the time a security was purchased,
such security, if sold, might be sold at a price less than its cost. Similarly,
if interest rates have declined from the time a security was purchased, such
security, if sold, might be sold at a price greater than its purchase cost. In
either instance, if the security was purchased at face value and held to
maturity, no gain or loss would be realized.
PORTFOLIO INSTRUMENTS AND PRACTICES AND
ASSOCIATED RISK FACTORS
U.S. Treasury Securities. Securities purchased by the
Fund are direct obligations of the U.S. Treasury and are
guaranteed by the full faith and credit of the U.S.
government. These securities presently consist of U.S.
Treasury bills, U.S. Treasury notes and U.S. Treasury bonds.
U.S. Treasury securities differ in their interest rates,
maturities and times of issuance. Treasury bills have initial
maturities of one year or less; Treasury notes have initial
maturities of one to ten years; and Treasury bonds generally
have initial maturities greater than ten years.
Zero Coupon Treasury Securities. A portion of the U.S. Treasury securities
purchased by the Fund may be "zero coupon" Treasury securities. These are U.S.
Treasury notes and bonds which have been stripped of their unmatured interest
coupons and receipts or which are certificates representing interests in such
stripped debt obligations and coupons. Such securities are purchased at a
discount from their face amount, giving the purchaser the right to receive their
full value at maturity. A zero coupon security pays no interest to its holder
during its life. Its value to an investor consists of the difference between its
face value at the time of maturity and the price for which it was acquired,
which is generally an amount significantly less than its face value (sometimes
referred to as a "deep discount" price).
The interest earned on such securities is, implicitly, automatically
compounded and paid out at maturity. While such compounding at a constant rate
eliminates the risk of receiving lower yields upon reinvestment of interest if
prevailing interest rates decline, the owner of a zero coupon security will be
unable to participate in higher yields upon reinvestment of interest received if
prevailing interest rates rise. For this reason, zero coupon securities are
subject to substantially greater market price fluctuations during periods of
changing prevailing interest rates than are comparable debt securities which
make current distributions of interest. Current federal tax law requires that a
holder (such as the Fund) of a zero coupon security accrue a portion of the
discount at which the security was purchased as income each year even though the
Fund receives no interest payments in
<PAGE>
cash on the security during the year.
Certain banks and brokerage firms have separated ("stripped") the
principal portions ("corpus") from the coupon portions of the U.S. Treasury
bonds and notes and sell them separately in the form of receipts or certificates
representing undivided interests in these instruments (which instruments are
generally held by a bank in a custodial or trust account). The Fund will not
purchase any such receipts or certificates representing stripped corpus or
coupon interests in U.S. Treasury securities sold by banks and brokerage firms.
The Fund will only purchase zero coupon Treasury securities which have been
stripped by the Federal Reserve Bank.
Repurchase Agreements. The Fund may agree to purchase U.S. Treasury
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 member banks of the Federal Reserve system, any foreign bank or any
domestic or foreign broker/dealer which is recognized as a reporting government
securities dealer. 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.
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.
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
<PAGE>
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.
When-Issued Purchases and Forward Commitments. The Fund may purchase
securities on a "when-issued" basis and may purchase or sell securities on a
"forward commitment" basis. These transactions, which involve a commitment by
the Fund to purchase or sell particular securities with payment and delivery
taking place at a future date (perhaps one or two months later), permit the Fund
to lock-in a price or yield on a security, regardless of future changes in
interest rates. When-issued and forward commitment transactions involve the risk
that the price or yield obtained may be less favorable than the price or yield
available when the delivery takes place. The Fund will establish a segregated
account consisting of cash, U.S. Government securities or other high grade debt
obligations in an amount equal to the amount of its when-issued purchases and
forward commitments. The Fund's when-issued purchases and forward purchase
commitments are not expected to exceed 25% of the value of the Fund's total
assets absent unusual market conditions. The Fund does not intend to engage in
when-issued purchases and forward commitments for speculative purposes but only
in furtherance of its investment objective.
Lending of Portfolio Securities. To enhance the return on its 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 a possible delay in
the recovery of the securities or a possible loss of rights in the collateral
should the borrower fail financially.
Portfolio Turnover. The Advisor will not consider portfolio turnover rate
a limiting factor in making investment decisions consistent with the Fund's
objective and policies. A high portfolio turnover rate involves larger
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. It is anticipated that the Fund's annual portfolio turnover
rate will range from 100% to 200%.
<PAGE>
INVESTMENT LIMITATIONS
The Fund's investment objective and policies may be changed by the
Company's Board of Directors without shareholder approval. However, shareholders
will be notified in writing at least 30 days in advance of any such material
change, except where notice is not required. 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 the 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 assets of the Fund may be
invested without regard to this 5% limitation;
(2) invest 25% or more of its total assets in one or more issuers
conducting their principal business activities in the same industry;
and
(3) borrow money except for temporary purposes in amounts up to
one-third of the value of its total assets at the time of such
borrowing. Whenever borrowings exceed 5% of a Fund's total assets,
the Fund will not make any additional investments.
These investment limitations are applied at the time investment securities
are purchased.
HOW TO PURCHASE SHARES
This Prospectus offers individual investors three methods of purchasing
shares of the Fund, thus enabling investors to choose the class that best suits
their needs, given the amount of purchase and intended length of investment.
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 through authorized
investment dealers or directly from the Distributor or the Transfer Agent. Only
the Distributor and investment dealers which have a sales agreement with the
Distributor are authorized to sell shares of the Fund. The Distributor is a
registered broker/dealer with principal offices at 60 State Street, Boston,
Massachusetts 02109.
<PAGE>
Shares will be credited to a shareholder's account at the public offering
price next computed after an order is received by the Distributor or a dealer,
less any applicable initial sales charges. 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 for Class A, Class B or Class shares is
$1,000 and subsequent investments must be at least $50. Purchases in excess of
$250,000 must be for Class A shares or Class C shares. Payments for shares of
the Fund may, in the discretion of the Advisor, be made in the form of
securities that are permissible investments for the Fund. For further
information, see "In-Kind Purchases" in the Statement of Additional Information.
Differences Among the Classes
The primary distinctions among the classes of the Fund's shares are in
their sales charge structures and ongoing expenses, as summarized in the table
below. Each class has distinct advantages and disadvantages for different
investors, and investors may choose the class that best suits their
circumstances and objectives.
<TABLE>
<S> <C> <C> <C>
ANNUAL 12B-1 FEES (AS A %
OF AVERAGE DAILY NET
ASSETS) OTHER INFORMATION
SALES CHARGE
CLASS A Maximum initial sales Service fee of 0.25% Initial sales charge
charge of 4.0% of the waived or reduced for
public offering price. certain purchases.
CLASS B Maximum CDSC of 5% of Service fee of 0.25%; CDSC waived for certain
redemption proceeds; distribution fee of 0.7redemptions; shares
declines to zero after six convert to Class A shares
years. approximately six years
after issuance, subject to
receipt of certain tax
rulings or opinions.
CLASS C Maximum CDSC of 1% of Service fee of 0.25%; Shares do not
convert to redemption proceeds fordistribution fee of 0.7another
class. redemptions made within the first year after purchase.
</TABLE>
Factors to Consider in Choosing a Class of Shares
<PAGE>
In deciding which class of shares to purchase, investors should consider
the cost of sales charges together with the cost of the ongoing annual expenses
described below, as well as any other relevant facts and circumstances:
Sales Charges
Class A shares are sold at net asset value plus an initial sales charge of
up to 4% of the public offering price. Because of this initial sales charge, not
all of a Class A shareholder's purchase price is invested in the Fund. Class A
shares sold pursuant to a complete waiver of the initial sales charge applicable
to large purchase are subject to a 1% CDSC if redeemed within one year of the
date of purchase.
Class B shares are sold with no initial sales charge, but a CDSC of up to
5% of the redemption proceeds applies to redemptions made within six years of
purchase. See "How to Redeem Shares -- Contingent Deferred Sales Charge -- Class
B Shares." Class B shares are subject to higher on going expenses than Class A
shares, but automatically convert to Class A shares approximately six years
after issuance subject to receipt of certain tax rulings or opinions.
Class C shares are sold without an initial sales charge or a CDSC except
for a CDSC of 1% applicable to redemptions made within the first year after
investing. Thus, the entire amount of a Class B or C shareholder's purchase
price is immediately invested in the Fund.
Waiver and Reductions of Class A Sales Charges
Class A share purchases of $100,000 or more may be made at a reduced sales
charge. In considering the combined cost of sales charges and ongoing annual
expenses, investors should take into account any applicable reduced sales
charges on Class A shares. In addition, the entire initial sales charge on Class
A shares is waived for certain eligible purchasers. See "Initial Sales Charge -
Class A shares." Because Class A shares bear lower ongoing annual expenses that
Class B shares or Class C shares, investors eligible for complete initial sales
charge waivers should purchase Class A shares.
Ongoing Annual Expenses
Classes A, B and C shares pay an annual 12b-1 service fee of 0.25% of
average daily net assets. Classes B and C shares pay an annual 12b-1
distribution fee of 0.75% of average daily net assets. An investor should
consider both ongoing annual expenses and initial or contingent deferred sales
charges in estimating the costs of investing in the respective classes of
<PAGE>
Fund shares over various time periods.
For example, assuming a constant net asset value, the cumulative
distribution fee on Class B and Class C shares would approximate the expense of
the 4.0% maximum initial sales charge on the Class A shares if the shares were
held for approximately 5 1/2 years. Because Class B shares convert to Class A
shares (which do not bear the expense of ongoing distribution fees)
approximately six years after purchase (subject to receipt of certain tax
rulings or opinions), an investor expecting to hold shares of the Fund for
longer than six years would generally pay lower cumulative expenses by
purchasing Class B shares than by purchasing Class C shares. An investor
expecting to hold shares of the Fund for less than four years would generally
pay lower cumulative expenses by purchasing Class C shares than by purchasing
Class A shares, and due to the contingent deferred sales charges that would
become payable on redemption of Class B shares, such an investor would generally
pay lower cumulative expenses by purchasing Class C shares than Class B shares.
On the other hand, an investor expecting to hold shares of the Fund for more
than six years would generally pay lower cumulative expenses by purchasing Class
B shares because of the Class B conversion feature described under "Conversion
of Class B Shares." An investor who qualifies for a reduction or waiver of the
initial sales charge on Class A shares may pay lower cumulative expenses by
purchasing Class A shares than by purchasing Class B or Class C shares.
The foregoing examples do not reflect, among other variables, the cost or
benefit of bearing sales charges or distribution fees at the time of purchase,
upon redemption or over time, nor can they reflect fluctuations in the net asset
value of Fund shares, which will affect the actual amount of expenses paid.
Expenses borne by classes may differ slightly because of the allocation of other
class-specific expenses, such as transfer agency fees, printing and postage
expenses related to shareholder reports, prospectuses and proxies, and
securities registration fees. The example set forth above under "Fund Expenses"
shows the cumulative expenses an investor would pay over periods of one and
three years on a hypothetical investment in each class of Fund shares, assuming
an annual return of 5%.
Other Information
Dealers may receive different levels of compensation for selling one
particular class of Fund shares rather than another. Investors should understand
that distribution fees and initial and contingent deferred sales charges all are
intended to compensate the Distributor for distribution services.
<PAGE>
An account may be opened by mailing a check or other negotiable bank draft
(payable to The Munder Funds) for $1,000 or more for Class A, Class B or Class C
shares with a completed and signed Account Application Form to The Munder Funds,
c/o First Data Investor Services Group, Inc., 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 public offering price of
Fund shares next computed following receipt of payment by the Transfer Agent.
The public offering price for the shares is the per share net asset value (see
"Net Asset Value") next determined after receipt of the order by the dealer,
plus any applicable initial sales charge for Class A shares. 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. When
placing purchase orders, investors should specify the class of shares being
purchased. All share purchase orders that fail to specify a class will
automatically be invested in Class A shares.
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
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 Investor Services Group, Inc., P.O. Box 5130, Westborough,
Massachusetts 01581-5130.
Additional investments 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 Class A, Class B and Class C shares of the Fund may arrange
for periodic investments in the Fund through
<PAGE>
automatic deductions from a checking or savings account by completing the AIP
Application Form or by calling the Fund at (800) 438-5789. The minimum
pre-authorized investment amount is $50. Such a plan is voluntary and may be
discontinued by the shareholder at any time or by the Company on 30 days'
written notice to the shareholder.
See the Statement of Additional Information for further information
regarding purchase of the Fund's shares.
Reinvestment Privilege
Upon redemption of Class A, B or C shares of the Fund (or Class A, B or C
shares of another non-money market fund of the Company or The Munder Funds
Trust), a shareholder has an annual right, to be exercised within 60 days, to
reinvest the redemption proceeds in shares of the same class of the same fund
without any sales charges. The Transfer Agent must be notified in writing by the
purchaser, or by his or her broker, at the time the purchase is made of the
reinvestment in order to eliminate a sales charge.
Initial Sales Charge - Class A Shares
The public offering price of Class A shares is the next determined net
asset value plus any applicable sales charge, which will vary with the size of
the purchase as shown in the following table: <TABLE>
INITIAL SALES CHARGE SCHEDULE - CLASS A SHARES
<S> <C> <C> <C>
Sales Charge as a Percentage of
Discount to
Selected Dealers
Net Amount as a Percentage of
Invested (Net Offering Price
Amount of Purchase Offering Price Asset Value)
Less than $100,000 4.00% 4.17% 3.75%
$100,000 but less than $250,03.00% 3.09% 2.75%
$250,000 but less than $500,02.00% 2.04% 1.75%
$500,000 but less than $1,0001.25% 1.27% 1.00%
$1,000,000 or more None* None* (see below)**
* No initial sales charge applies on investments of $1 million or more, but a CDSC of 1% is
imposed on certain redemptions within one year of the purchase. See "How to Redeem Shares --
Contingent Deferred Sales Charge -- Class A and Class C Shares."
** A 1% commission will be paid by the Distributor to dealers who initiate
and are responsible for purchases of $1 million or more.
<PAGE>
</TABLE>
The Distributor will pay the appropriate Dealers' Reallowance to brokers
purchasing Class A shares. From time to time, the Distributor may reallow to
brokers the full amount of the sales charge on Class A shares. To the extent the
Distributor reallows more than 90% of the sales charge to brokers, such brokers
may be deemed to be underwriters under the Securities Act of 1933, as amended.
In addition to the Dealers' Reallowance, the Distributor will, from time to
time, at its expense or as an expense for which it may be reimbursed under the
Class B Plan or Class C Plan described below, pay a bonus or other consideration
or incentive (which may be in the form of merchandise or trips) to brokers or
institutions which sell a minimum dollar amount of shares of the Fund during a
specified period of time. Dealers may receive compensation from the Distributor
on sales made without a sales charge.
Sales Charge Waivers - Class A Shares
Upon notice to the Transfer Agent at the time of purchase, the initial
sales charge will be waived on sales of Class A shares to the following types of
purchasers: (1) individuals with an investment account or relationship with the
Advisor; (2) full-time employees and retired employees of the Advisor, employees
of the Fund's Administrator, Distributor and Custodian, and immediate family
members of such persons; (3) registered broker-dealers that have entered into
selling agreements with the Distributor, for their own accounts or for
retirement plans for their employees or sold to registered representatives for
full-time employees (and their families) that certify to the Distributor at the
time of purchase that such purchase is for their own account (or for the benefit
of their families); (4) certain qualified employee benefit plans as defined
below; and (5) financial institutions, financial planners or employee benefit
plan consultants acting for the accounts of their clients.
Qualified Employer Sponsored Retirement Plans
Upon notice to the Transfer Agent at the time of purchase, the initial
sales charge will be waived on purchases by employer sponsored retirement plans
which are qualified under Section 401(a) of the Code, including: 401(k) plans,
defined benefit pension plans, profit-sharing pension plans, money-purchase
pension plans; and Section 457 deferred compensation plans and Section 403(b)
plans (each, a "Qualified Employee Benefit Plan") that (1) invest $1,000,000 or
more in Class A shares of investment portfolios offered by the Company or The
Munder Funds Trust (other than the Index 500 Fund) or (2) have at least 75
eligible plan participants. In addition, the CDSC of 1% imposed on certain
redemptions within one year of purchase will be waived for Qualified Employee
Benefit Plan purchases that meet the above criteria. A 1% commission will be
paid by the Distributor to dealers who
<PAGE>
initiate and are responsible for Qualified Employee Benefit Plan purchases that
meet the above criteria. For purposes of the foregoing sales charge waiver,
Simplified Employee Pension Plans ("SEPs") and Individual Retirement Accounts
("IRAs") are not considered to be Qualified Employee Benefit Plans.
Sales charges will be waived for individuals who purchase Class A shares
with the proceeds of distributions from qualified retirement plans for which the
Advisor serves as investment advisor. Sales charges will be waived for
individuals who purchase Class A shares with the proceeds of redemptions of
Class Y shares of the Funds of the Company or The Munder Funds Trust if the
proceeds are invested within 60 days of redemption. See "Other Information --
Description of Shares."
If an investor intends to purchase over the next 13 months at least
$100,000 of Class A shares, the sales charge may be reduced by completing the
Letter of Intent portion of the Account Application Form or the applicable form
from the investor's broker. The Letter of Intent includes a provision for a
sales charge adjustment depending on the amount actually purchased within the
13-month period. In addition, pursuant to a Letter of Intent, the Custodian will
hold in escrow the difference between the sales charge applicable to the amount
initially purchased and the sales charge paid at the time of the investment
which is based on the amount covered by the Letter of Intent. The amount held in
escrow will be applied to the investor's account at the end of the 13-month
period unless the amount specified in the Letter of Intent is not purchased.
The Letter of Intent will not obligate the investor to purchase shares,
but if he or she does, each purchase made during the period will be at the sales
charge applicable to the total amount intended to be purchased. The letter may
be dated as of a prior date to include any purchase made within the past 90
days. The Letter of Intent will apply only to Class A shares of the Fund or
other investment portfolios of the Company and The Munder Funds Trust. The value
of Class B or Class C shares of any fund of the Company or The Munder Funds
Trust will not be counted toward the fulfillment of a Letter of Intent.
As shown in the table under "Initial Sales Charge -- Class A Shares,"
larger purchases may reduce the sales charge paid. Upon notice to the investor's
broker or the Transfer Agent, purchases of Class A shares that are made by the
investor, his or her spouse, his or her children under age 21 and his or her IRA
will be combined when calculating the sales charge. The value of Class B or
Class C shares of any fund of the Company or The Munder Funds Trust will not be
counted toward the foregoing Quantity Discounts.
<PAGE>
An investor who has previously purchased Class A shares of a non-money
market fund of the Company or The Munder Funds Trust upon which a sales charge
has already been paid may, upon request, aggregate investments in such shares
with current purchases to determine the applicable sales charge for current
purchases. An investor's aggregate investment is the total value (based upon the
greater of current net asset value or the public offering price originally paid
if provided at the time of purchase) of: (a) current purchases, and (b) shares
that are beneficially owned by the investor for which a sales charge has already
been paid. Similarly, with respect to each subsequent investment, all Class A
shares of a non- money market fund of the Company or The Munder Funds Trust upon
which a sales charge has already been paid that are beneficially owned by the
investor at the time of investment may be combined to determine the applicable
sales charge.
Pursuant to the Fund's Variable Pricing System, the Fund issues two
classes of shares in addition to the classes described in this Prospectus, Class
K and Class Y shares. Class K and Class Y shares have different sales charges
and expense levels, which will affect performance. Investors may call (800)
438-5789 to obtain more information concerning Class K and Class Y shares. When
placing purchase orders, investors should specify the class of shares being
purchased. All share purchase orders that fail to specify a class will
automatically be invested in Class A shares.
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 Investor Services Group, Inc., 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." Redemption proceeds
<PAGE>
will be reduced by the amount of any CDSC (see below).
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 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.
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. The Company reserves the right to delay the
wiring of redemption proceeds for up to seven days after it receives a
redemption order if, in the judgment of the Advisor, an earlier payment could
adversely affect the Fund.
The Company, the Distributor and the Transfer Agent reserve the right at
any time to suspend or terminate the 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 only according to the previously established
instructions.
The Fund ordinarily will make payment for all Shares redeemed within seven
business days after the receipt by the
<PAGE>
Transfer Agent in proper form, however, 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 take
as long as 15 days.
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. No redemption fee is charged for the redemption of shares,
but a CDSC is imposed on certain redemptions of Class A, Class B and Class C
shares as described below.
Redemption by Check
Free checkwriting is available with respect to Class A Shares of the Fund.
With this service, a shareholder may write checks in the amount of $500 or more.
To obtain checks, a shareholder must complete the Signature Card Section of the
Account Application Form. To establish this checkwriting service after opening
an account, the shareholder must contact the Fund to obtain an Account
Application Form. Upon 30 days' prior written notice to shareholders, the
checkwriting privilege may be modified or terminated. An investor cannot close
an account in the Fund by writing a check. A shareholder will receive the
dividends declared on the shares to be redeemed up to the date that a check is
presented to the Custodian for payment.
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 holders
of Class A, Class B and Class C shares 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
<PAGE>
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 on which 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 Application Form available through the Transfer Agent.
Shareholders should realize that if withdrawals exceed 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.
Purchases of additional Class A shares of the Fund concurrently with withdrawals
may be disadvantageous to investors because of the sales charges involved, and,
therefore, are discouraged. Class B and Class C shares, if any, that are
redeemed in connection with the AWP are still subject to the applicable CDSC.
Contingent Deferred Sales Charge - Class B Shares
Class B shares that are redeemed within six years of purchase will be
subject to a CDSC as set forth below. A CDSC payable to the Distributor is
imposed on any redemption of shares that causes the current value of a
shareholder's account to fall below the dollar amount of all payments by the
shareholder for the purchase of shares during the preceding six years.
The CDSC will be waived for certain exchanges as described below. In
addition, Class B shares that are redeemed will not be subject to a CDSC to the
extent that the value of such shares represents (1) reinvestment of dividends or
capital gain distributions, (2) shares held more than six years, or (3) capital
appreciation of shares redeemed. In determining the applicability and rate of
any CDSC, it will be assumed that a redemption of Class B shares is made first
of shares representing reinvestment of dividends and capital gains
distributions, then any appreciation on shares redeemed, and then of remaining
shares held by the shareholders for the longest period of time. The purchase
payment from which a redemption is made is assumed to be the earliest purchase
payment from which a full redemption has not already been effected. The holding
period of Class B shares of the Fund acquired through an exchange of Class B
shares of The Munder Money Market Fund (which are available only by exchange of
Class B shares of the Fund or other funds in the Company or the Munder Funds
Trust) will be calculated from the date that the Class B shares were initially
purchased.
<PAGE>
The amount of any applicable CDSC will be calculated by multiplying the
net asset value of shares subject to the charge at the time of redemption or at
the time of purchase, whichever is lower, by the applicable percentage shown in
the table below:
CONTINGENT DEFERRED
SALES CHARGE AS
A PERCENTAGE OF
YEAR SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
First 5.00%
Second 4.00%
Third 3.00%
Fourth 3.00%
Fifth 2.00%
Sixth 1.00%
Seventh 0.00%
For Federal income tax purposes, the amount of the CDSC will reduce the
gain or increase the loss, as the case may be, on the amount recognized on the
redemption of shares. The amount of any CDSC will be paid to the Distributor.
The Distributor will pay a commission of 4.0% of the net asset value of
Class B shares to brokers that initiate and are responsible for purchases of
Class B shares of the Fund.
The CDSC will be waived for certain exchanges, as described below. In
addition, the CDSC will be waived in the following circumstances: (1) total or
partial redemptions made within one year following the death of a shareholder or
registered joint owner; (2) minimum required distributions made in connection
with an IRA or other retirement plan following attainment of age 70 1/2; and (3)
redemptions pursuant to the Fund's right to liquidate a shareholder's account
involuntarily.
Contingent Deferred Sales Charge - Class A and Class C Shares
In order to recover commissions paid to dealers on investments of $1
million or more in Class A shares and on investments in Class C shares, a CDSC
of 1% applies to certain redemptions of such shares made within the first year
after investing.
No charge is imposed to the extent that the net asset value of the shares
redeemed does not exceed (a) the current net asset value of shares purchased
through reinvestment of dividends or capital gain distributions plus (b) the
current net asset value of shares purchased more than one year prior to the
redemption, plus (c) increases in the net asset value
<PAGE>
of the shareholder's shares above the purchase payments made during the
preceding one year. The same waivers as are available with respect to the CDSC
on Class B shares also apply to the CDSC on Class A and Class C shares.
The holding period of Class A or Class C shares of the Fund acquired
through an exchange of the corresponding class of shares of The Munder Money
Market Fund (which are available only by exchange of Class A or Class C shares
of the Fund or other funds in the Company or the Munder Funds Trust, as the case
may be) and other non-money market funds of The Munder Funds Trust and other
funds of the Company will be calculated from the date that the Class A or Class
C shares were initially purchased.
See the Statement of Additional Information for further information
regarding redemption of Fund shares.
Class A shares purchased for at least $1,000,000 without a sales charge
may be exchanged for Class A shares of another fund of the Company or The Munder
Funds Trust without the imposition of a CDSC, although the CDSC described above
will apply to the redemption of the shares acquired through an exchange.
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible rate.
It will be assumed that the redemption is made first of amounts representing all
Class A shares on which a front-end sales charge has been assessed; then of
shares acquired pursuant to the reinvestment of dividends and distributions; and
then of amounts representing the cost of shares purchased one year or more prior
to the redemption. For Federal income tax purposes, the amount of the CDSC will
reduce the gain or increase the loss, as the case may be, on the amount realized
on redemption. The amount of any CDSC will be paid to the Distributor.
CONVERSION OF CLASS B SHARES
A shareholder's Class B shares will automatically convert to Class A
shares in the Fund on the sixth anniversary of the issuance of the Class B
shares, together with a pro rata portion of all Class B shares representing
dividends and other distributions paid in additional Class B shares. The Class B
shares so converted will no longer be subject to the higher expenses borne by
Class B shares. The conversion will be effected at the relative net asset values
per share of the two classes. If a shareholder effects one or more exchanges
among Class B shares of the Fund, other non-money market funds of the Company or
other funds of The Munder Funds Trust during the six-year period, the holding
periods for the shares so exchanged will be counted toward the six-year period.
Because the per share net asset value of the Class A shares may be
<PAGE>
higher than that of the Class B shares at the time of
conversion, a shareholder may receive fewer Class A shares
than the number of Class B shares converted, although the
dollar value will be the same. See "Net Asset Value."
Other
Some or all of the services and privileges described herein may not be
available to certain customers of a broker, and a broker may impose conditions
on its customers which are different from those described in this Prospectus.
Investors should consult their brokers in this regard.
HOW TO EXCHANGE SHARES
General
Class A, Class B and Class C shares of the Fund may be exchanged for
shares of the same class of other funds of the Company or The Munder Funds
Trust, based on their respective net asset values, subject to any applicable
sales charge differential.
Class A shares of a money market fund of the Company or The Munder Funds
Trust that were (1) acquired through the use of the exchange privilege and (2)
can be traced back to a purchase of shares in one or more investment portfolios
of the Company or The Munder Funds Trust for which a sales charge was paid, can
be exchanged for Class A shares of a fund of the Company or The Munder Funds
Trust subject to payment of differential sales charges as applicable.
The exchange of Class B shares of one fund of the Company or The Munder
Funds Trust for Class B shares of another fund of the Company or The Munder
Funds Trust will not be subject to a CDSC. The exchange of Class C shares of one
fund of the Company or The Munder Funds Trust for Class C shares of another fund
of the Company or The Munder Funds Trust will not be subject to a CDSC. For
purposes of computing the applicable CDSC, the length of time of ownership of
the Class B or Class C shares will be measured from the date of the original
purchase and will not be affected by such exchanges.
Any share exchange must satisfy the requirements relating to the minimum
initial investment in an investment portfolio of the Company or The Munder Funds
Trust, and the shares involved must be legally available for sale in the state
of the investor's residence. For Federal income tax purposes, a share exchange
is taxable event and, accordingly, a capital gain or loss may be realized.
Before making an exchange request, shareholders should consult a tax or other
financial advisor and should consider the investment objective, policies and
restrictions of the investment portfolio into which the shareholder is making an
exchange, as set forth in the
<PAGE>
applicable prospectus. An investor who is considering an exchange may obtain a
copy of the prospectus for any investment portfolio of the Company or The Munder
Funds Trust by contacting his or her broker or the Fund at (800) 438-5789.
Certain brokers may charge a fee for handling exchanges.
The Company reserves the right to modify or terminate the exchange
privilege at any time. Notice will be given to shareholders of any material
modifications except where notice is not required.
Exchange by Telephone
A shareholder may give exchange instructions to the shareholder's broker
or by telephone to the Fund at (800) 438- 5789. Telephone exchange privileges
are not available to shareholders who have custody of their share certificates.
The Company reserves the right to reject any telephone exchange request.
Telephone exchanges may be subject to limitations as to amount or frequency, and
to other restrictions that may be established from time to time to ensure that
exchanges do not operate to the disadvantage of the Fund or its shareholders.
Exchange by Mail
Exchange order may be sent by mail to the shareholder's broker or to the
Transfer Agent at the address set forth in "Shareholder Account Information."
DIVIDENDS AND DISTRIBUTIONS
The Fund expects to pay 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 daily as a dividend and paid monthly. Generally,
dividends are paid within six business days after month-end.
The Fund's net realized capital gains (including net short-term capital
gains), if any, are distributed at least annually. Dividends and other
distributions paid by the Fund with respect to its Class A, Class B and Class C
shares are calculated at the same time. Dividends and capital gains are paid in
the form of additional shares of the same class 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 or in a subsequent request, 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 class of the Fund at the net asset value in effect at the close of business
on the reinvestment date. Dividends are automatically paid in cash (along with
any redemption
<PAGE>
proceeds) not later than seven business days after a shareholder closes an
account with the Fund.
The per share dividends on Class B and Class C shares of the Fund
generally will be lower than the per share dividends on Class A shares of the
Fund as a result of the higher annual service and distribution fees applicable
with respect to Class B and Class C shares.
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.
The Fund's net investment income available for distribution to the holders
of shares will be reduced by the amount of service and distribution fees payable
under the Class A Plan, the Class B Plan and Class C Plan described below.
NET ASSET VALUE
Net asset value for a particular class of shares of the Fund is calculated
by dividing the value of all securities and other assets belonging to the Fund
allocable to that class, less the liabilities charged to that class, by the
number of outstanding shares of that class.
The net asset value per share of the Fund for the purpose
of pricing purchase and redemption orders is determined as of
<PAGE>
the close of regular trading hours on the New York Stock Exchange (currently
4:00 p.m., New York time) on each business day. Securities 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. 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 determines 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 Company does not accept purchase and redemption orders on days on
which 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 (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.
The different expenses borne by each class of shares will result in
different net asset values and dividends. The per share net asset value of the
Class B and Class C shares of the Fund generally will be lower than that of the
Class A shares of the Fund because of the higher expenses borne by the Class B
and Class C shares.
MANAGEMENT
Board of Directors
The Company is managed under the direction of its Board of Directors. The
Statement of Additional Information contains the name and background information
of each Director.
Investment Advisor
Munder Capital Management, a Delaware general partnership
with its principal offices at 480 Pierce Street, Birmingham,
Michigan 48009, serves as the Fund's investment advisor. The
Advisor was formed in December 1994. The principal partners
of the Advisor are Old MCM, Inc. ("MCM"), Munder Group LLC,
Woodbridge Capital Management, Inc. ("Woodbridge") and WAM
<PAGE>
Holdings, Inc. ("WAM"). MCM was founded in February 1985 as a
Delaware corporation and was a registered investment advisor.
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 June 30,
1996, the Advisor and its affiliates had approximately $34
billion in assets under active management, of which $17
billion were invested in equity securities, $6 billion were
invested in money market or other short-term instruments, and
$11 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.
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 .25% of the Fund's average daily net assets.
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 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.
Portfolio Manager
Sharon E. Fayolle, Vice President and Director of Money Market Trading for
the Advisor, is primarily responsible for the day to day management of the
investment selections of the Fund. She is also responsible for overseeing the
management of cash portfolios, money market funds and foreign currency trading
since May, 1996. She has co-managed the Munder International Bond Fund since
October, 1996. Prior to joining the Advisor in 1996, she was employed in the
investment area of Ford Motor Company as European Portfolio Manager responsible
for investment and cash management for Ford's European operations.
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 Company. First Data is a wholly-owned
subsidiary of First Data Corporation. The Administrator
<PAGE>
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 Company'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 these 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
for which they provide services, computed daily and payable monthly at the rate
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 certain other investment portfolios that are advised by the Advisor,
for which the Custodian provides services, 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% 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 Company has adopted Distribution and Service Plans with respect to
Class A, Class B and Class C shares of the Fund, pursuant to which the Fund uses
its assets to finance
<PAGE>
activities relating to the distribution of its shares to investors and the
provision of certain shareholder services (collectively, the "Plans"). Under the
Class A Plan, the Distributor is paid a service fee at an annual rate of 0.25%
of the value of average daily net assets of the Class A shares. Under the Class
B and Class C Plans, the Distributor is paid a service fee at an annual rate of
0.25%, and a distribution fee at an annual rate of 0.75%, of the value of
average daily net assets of the Class B and Class C shares.
Under the Plans, the Distributor uses the service fees primarily to pay
ongoing trail commissions to securities dealers (which may include the
Distributor itself) and other financial institutions and organizations
(collectively, the "Service Organizations") who provide shareholder services for
the Fund. These services include, among other things, processing new shareholder
account applications, preparing and transmitting to the Fund's Transfer Agent
computer processable tapes of all transactions by customers and serving as the
primary source of information to customers in answering questions concerning the
Fund and their transactions with the Fund.
The Class B and Class C Plans permit payments to be made by the Fund to
the Distributor for expenditures incurred by it in connection with the
distribution of Fund shares to investors and the 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 Fund. The Distributor is also authorized
to engage in advertising, the preparation and distribution of sales literature
and other promotional activities on behalf of the Fund. In addition, the Class B
and Class C Plans authorize 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
Plans. 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 CDSCs received by the Distributor.
The Distributor expects to pay or arrange for payment of sales commissions
to dealers authorized to sell Class B or Class C shares, all or a part of which
may be paid at the time of sale. The Distributor will use its own funds (which
may be borrowed) to pay such commissions pending reimbursement pursuant to the
Class B and Class C Plans. Because the payment of distribution and service fees
with respect to Class B and Class C shares is subject to the 1.00% limitation
described above and will therefore be spread over a number of years, it may take
the Distributor a number of years to recoup sales commissions paid by it to
dealers and other distribution and service related expenses from the payments
received by it
<PAGE>
from the Fund pursuant to the Plans.
The Plans may be terminated at any time. The Plans provide that amounts
paid as prescribed by the Plans at any time may not cause the limitation on such
payments established by the Plans 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 Plans 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 Plans and
their payment terms on a continuous basis and in so doing will consider all
relevant factors, including expenses incurred by the Distributor and the amount
received under the Plans and the proceeds of the CDSCs with respect to the Class
B and Class C shares.
TAXES
The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code for 1986, as amended (the "Code").
Such qualification 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 any
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 and 90% of its net tax-exempt interest 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.)
Substantially all of the Fund's net realized long-term capital gains, if
any, will be distributed at least annually. The Fund will generally have no
Federal income 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
<PAGE>
long the shareholders have held their shares.
A taxable gain or loss may also be realized by a holder of shares in the
Fund upon the redemption or transfer of shares depending upon the tax basis of
the shares and their price at the time of the transaction.
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.
Before purchasing shares in the Funds, 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 declare
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.
On an annual basis, the Company will send written notices to record owners
of shares regarding the Federal tax status of distributions made by the Fund.
Since this is not an exhaustive discussion of applicable tax consequences and
since state and local taxes may be different from the Federal taxes described
above, investors may wish to contact their tax advisors concerning investments
in the Fund.
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 Munder Money Market Fund, The Munder
Small-Cap Value Fund, The Munder Equity Selection Fund, The Munder Micro-Cap
Equity Fund and The NetNet Fund, each of which, except The Munder International
Bond Fund, is classified as a diversified investment company under the 1940 Act.
The shares of the Fund are offered as five separate classes of common
stock, $.01 par value per share, designated Class A shares, Class B shares,
Class C shares, Class K shares
<PAGE>
and Class Y shares. All shares represent interests in the same assets of the
Fund and are identical in all respects except that each class bears different
service and distribution expenses and may bear various class-specific expenses,
and each class has exclusive voting rights with respect to its service and/or
distribution plan, if any. Class B and Class C shares are subject to a
distribution fee which generally will cause Class B and Class C shares to have a
higher expense ratio and pay lower dividends than Class A shares. Shares of the
Fund issued are fully paid, non-assessable, fully transferable and redeemable at
the option of the holder. Investors may call the Fund at (800) 438-5789 for more
information concerning other classes of shares of the Fund. This Prospectus
relates only to the Class A, Class B and Class C shares of the Fund.
The Company's 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 mater to be voted upon affects only the
interests of the shareholders of a particular Fund. In addition, shareholders of
the Fund will vote in the aggregate and not by class, except as otherwise
expressly required by law or when the Directors determine that the matter to be
voted upon affects only the interests of the holders of a particular class of
shares. The Company is not required and does 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 Company will assist in shareholder communications in
connection with such a meeting. For further discussion of the voting rights of
shareholders, see "Additional Information Concerning Shares" in the Statement of
Additional Information.
Reports to Shareholders
The Fund will seek to eliminate duplicate mailings of prospectuses and
shareholders reports to accounts which have the same primary record owner, and
with respect to joint tenant accounts or tenant in common accounts, 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 and yield data for the
shares of the Fund in advertisements or in communications to shareholders. The
total return of Class A, Class B or Class C shares in the Fund may be calculated
on an average annual total return basis, and may also be calculated
<PAGE>
on an aggregate total return basis, for various periods. Average annual total
return reflects the average percentage change in value of an investment in a
class of shares 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.
The yield of a class of shares in the Fund is computed based on the net
income of such class in the 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 for a class of shares 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 result on a semi-annual basis.
Performance quotations for each class of shares will be calculated
separately. Quotations for total return for Class A shares will reflect the
maximum sales charge charged by the Fund with respect to Class A shares and
quotations of total return for Class B and Class C shares will reflect any
applicable CDSC, except that the Fund may also provide, in conjunction with such
quotations, additional quotations that do not reflect the maximum sales charge
when the quotations are being provided to investors who are subject to waived or
reduced sales charges as described in this Prospectus. Because these additional
quotations will not reflect the maximum sales charge payable by non-exempt
investors, these quotations will be higher than the performance quotation
otherwise computed.
Quotations of total return for shares will reflect the fees for certain
distribution and shareholder services as described in this Prospectus.
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 Lehman Brothers
Government/Corporate Bond Index, a recognized unmanaged index of government and
corporate bonds, 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
<PAGE>
Times, or in publications of a local or regional nature, may also be used in
comparing the performance of a class of shares in 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 a 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.
SHAREHOLDER ACCOUNT INFORMATION
Investment by Mail
Send the completed Account Application Form (if initial purchase) or
letter stating Fund name, share class, shareholder's registered name and account
number (if subsequent purchase) with a check to:
First Data Investor Services Group, Inc.
The Munder Funds
P.O. Box 5130
Westborough, Massachusetts 01581-5130
Investment by Bank Wire
An investor opening a new account should call the Fund 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 "Investment by Mail." Wire instructions must
state the Fund name, share class, 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, share class, shareholder's registered
name and shareholder account number)
Before writing any funds an investor must call the Fund at (800) 438-5789
to confirm the wire instructions.
<PAGE>
Exchange by Telephone
Call your broker or the Fund at (800) 4348-5789.
Class A , Class B and Class C shares may be exchanged only for shares of
the same class of another fund of the Company or The Munder Funds Trust, subject
to any applicable sales charge.
Redemptions by Telephone
Call your broker or the Fund at (800) 438-5789.
Redemptions by Mail
Send complete instructions, including name of Fund, share class, amount of
redemption, shareholder's registered name, account number, and, if a certificate
has been issued, an endorsed share certificate, to:
First Data Investor Services Group, Inc.
The Munder Funds
P.O. Box 5130
Westborough, Massachusetts 01581-5130
Additional Questions
Shareholders with additional questions regarding purchase, exchange and
redemption procedures may call the Fund at (800) 438-5789.
<PAGE>
THE MUNDER SHORT TERM TREASURY FUND
480 Pierce Street
Birmingham, Michigan 48009
Telephone (800) 438-5789
PROSPECTUS
Class K Shares
The Munder Short Term Treasury Fund (the "Fund") is a series of shares
issued by The Munder Funds, Inc. (the "Company"), an open-end management
investment company. The Fund's investment objective is to provide shareholders
with a high level of current income consistent with capital preservation. The
Fund seeks to achieve its objective by investing only in U.S. Treasury
securities and repurchase agreements fully collateralized by U.S. Treasury
securities. There can be no assurance that the Fund's investment objective will
be achieved. The net asset value per share of the Fund will fluctuate in
response to changes in market conditions and other factors.
Munder Capital Management (the "Advisor") serves as investment advisor to
the Fund.
This prospectus contains the information that a prospective investor
should know before investing in the Fund. Investors are encouraged to read this
Prospectus and retain it for future reference. A Statement of Additional
Information dated ______, 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. It may be obtained free of
charge by calling the Fund at (800) 438-5789.
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 ____________, 1996
<PAGE>
TABLE OF CONTENTS
PAGE
EXPENSE TABLE..................................................... 3
THE FUND.......................................................... 4
INVESTMENT OBJECTIVE AND POLICIES................................. 4
PORTFOLIO INSTRUMENTS AND PRACTICES AND
ASSOCIATED RISK FACTORS....................... 5
INVESTMENT LIMITATIONS............................................ 8
PURCHASES AND REDEMPTIONS OF SHARES............................... 8
DIVIDENDS AND DISTRIBUTIONS....................................... 11
NET ASSET VALUE................................................... 12
MANAGEMENT........................................................ 13
TAXES............................................................. 16
DESCRIPTION OF SHARES............................................. 17
PERFORMANCE....................................................... 18
No person has been authorized to give any information, or to make any
representations not contained in this Prospectus, or in the Fund's 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 Company
or its distributor, Funds Distributor, Inc. (the "Distributor"). This Prospectus
does not constitute an offering by the Company or by the Distributor in any
jurisdiction in which such offering may not lawfully be made.
<PAGE>
EXPENSE TABLE
The following table sets forth certain costs and expenses that an investor
will incur either directly or indirectly as a shareholder of Class K shares of
the Fund based on estimated operating expenses.
Annual operating expenses
(as a percentage of average net assets)
Advisory Fees..................................................... .25%
Other expenses.................................................... .50%
Shareholder Servicing........................................25%
All Other Expenses...........................................25%
Total Fund Operating Expenses..................................... .75%
"Other expenses" in the above table include fees for shareholder services,
administrator fees, custodial fees, legal and accounting fees, printing costs,
registration fees, fees for any portfolio valuation service, the cost of
regulatory compliance, the costs of maintaining the Fund's legal existence and
the costs involved with communicating with shareholders. The amount of "Other
expenses" is based on estimated expenses and projected assets for the current
fiscal year. The nature of the services for which the Fund is obligated to pay
advisory fees is described under "Management." 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.
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:
<TABLE>
<S> <C> <C>
1 Year 3 Year
An investor in Class K shares of the Fund $8 $24
would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period:
<PAGE>
</TABLE>
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 FUND
The Munder Short Term Treasury Fund (the "Fund") is a series of shares
issued by The Munder Funds, Inc. (the "Company"), an open-end management
investment company. The Company was organized 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
The Fund's investment objective is to provide shareholders with a high
level of current income consistent with capital preservation. The Fund seeks to
achieve its objective by investing only in U.S. Treasury securities and
repurchase agreements fully collateralized by U.S. Treasury securities. Under
normal market conditions, the Fund will invest 100% of its total assets in these
securities. Under normal circumstances, the Fund will enter into repurchase
agreements with maturities of seven days or less and will invest in securities
with remaining maturities of three years or less. The dollar-weighted average
maturity of the Fund's portfolio is not expected to exceed two years. The Fund
also may borrow money for temporary purposes and to meet redemption requests and
may enter into reverse repurchase agreements. In addition, the Fund may lend
portfolio securities, may purchase securities on a "when-issued" basis and may
purchase or sell securities on a "forward commitment" basis. See "Portfolio
Instruments and Practices and Associated Risk Factors." There can be no
assurance that the Fund's investment objective will be achieved.
The Fund is not a money market fund and, although it seeks to maintain
minimum fluctuation of principal value, no assurance can be given that, when an
investor desires to redeem Fund shares, the then-current net asset value per
share will be at or greater than the net asset value per share at the time of
purchase.
<PAGE>
The value of the portfolio securities held by the Fund will vary inversely
to changes in prevailing interest rates. Thus, if interest rates have increased
from the time a security was purchased, such security, if sold, might be sold at
a price less than its cost. Similarly, if interest rates have declined from the
time a security was purchased, such security, if sold, might be sold at a price
greater than its purchase cost. In either instance, if the security was
purchased at face value and held to maturity, no gain or loss would be realized.
PORTFOLIO INSTRUMENTS AND PRACTICES AND
ASSOCIATED RISK FACTORS
U.S. Treasury Securities. Securities purchased by the
Fund are direct obligations of the U.S. Treasury and are
guaranteed by the full faith and credit of the U.S.
government. These securities presently consist of U.S.
Treasury bills, U.S. Treasury notes and U.S. Treasury bonds.
U.S. Treasury securities differ in their interest rates,
maturities and times of issuance. Treasury bills have initial
maturities of one year or less; Treasury notes have initial
maturities of one to ten years; and Treasury bonds generally
have initial maturities greater than ten years.
Zero Coupon Treasury Securities. A portion of the U.S. Treasury securities
purchased by the Fund may be "zero coupon" Treasury securities. These are U.S.
Treasury notes and bonds which have been stripped of their unmatured interest
coupons and receipts or which are certificates representing interests in such
stripped debt obligations and coupons. Such securities are purchased at a
discount from their face amount, giving the purchaser the right to receive their
full value at maturity. A zero coupon security pays no interest to its holder
during its life. Its value to an investor consists of the difference between its
face value at the time of maturity and the price for which it was acquired,
which is generally an amount significantly less than its face value (sometimes
referred to as a "deep discount" price).
The interest earned on such securities is, implicitly, automatically
compounded and paid out at maturity. While such compounding at a constant rate
eliminates the risk of receiving lower yields upon reinvestment of interest if
prevailing interest rates decline, the owner of a zero coupon security will be
unable to participate in higher yields upon reinvestment of interest received if
prevailing interest rates rise. For this reason, zero coupon securities are
subject to substantially greater market price fluctuations during periods of
changing prevailing interest rates than are comparable debt securities which
make current distributions of interest. Current federal tax law requires that a
holder (such as the Fund) of a zero coupon security accrue a portion of the
discount at which the security was purchased as income each
<PAGE>
year even though the Fund receives no interest payments in cash on the security
during the year.
Certain banks and brokerage firms have separated ("stripped") the
principal portions ("corpus") from the coupon portions of the U.S. Treasury
bonds and notes and sell them separately in the form of receipts or certificates
representing undivided interests in these instruments (which instruments are
generally held by a bank in a custodial or trust account). The Fund will not
purchase any such receipts or certificates representing stripped corpus or
coupon interests in U.S. Treasury securities sold by banks and brokerage firms.
The Fund will only purchase zero coupon Treasury securities which have been
stripped by the Federal Reserve Bank.
Repurchase Agreements. The Fund may agree to purchase U.S. Treasury
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 member banks of the Federal Reserve system, any foreign bank or any
domestic or foreign broker/dealer which is recognized as a reporting government
securities dealer. 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.
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.
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
<PAGE>
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.
When-Issued Purchases and Forward Commitments. The Fund may purchase
securities on a "when-issued" basis and may purchase or sell securities on a
"forward commitment" basis. These transactions, which involve a commitment by
the Fund to purchase or sell particular securities with payment and delivery
taking place at a future date (perhaps one or two months later), permit the Fund
to lock-in a price or yield on a security, regardless of future changes in
interest rates. When-issued and forward commitment transactions involve the risk
that the price or yield obtained may be less favorable than the price or yield
available when the delivery takes place. The Fund will establish a segregated
account consisting of cash, U.S. Government securities or other high grade debt
obligations in an amount equal to the amount of its when-issued purchases and
forward commitments. The Fund's when-issued purchases and forward purchase
commitments are not expected to exceed 25% of the value of the Fund's total
assets absent unusual market conditions. The Fund does not intend to engage in
when-issued purchases and forward commitments for speculative purposes but only
in furtherance of its investment objective.
Lending of Portfolio Securities. To enhance the return on its 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 a possible delay in
the recovery of the securities or a possible loss of rights in the collateral
should the borrower fail financially.
Portfolio Turnover. The Advisor will not consider portfolio turnover rate
a limiting factor in making investment decisions consistent with the Fund's
objective and policies. A high portfolio turnover rate involves larger
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. It is anticipated that the Fund's annual portfolio turnover
rate will range from 100% to 200%.
<PAGE>
INVESTMENT LIMITATIONS
The Fund's investment objective and policies may be changed by the
Company's Board of Directors without shareholder approval. However, shareholders
will be notified in writing at least 30 days in advance of any such material
change, except where notice is not required. 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 the 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 assets of the Fund may be
invested without regard to this 5% limitation;
(2) invest 25% or more of its total assets in one or more issuers
conducting their principal business activities in the same industry;
and
(3) borrow money except for temporary purposes in amounts up to
one-third of the value of its total assets at the time of such
borrowing. Whenever borrowings exceed 5% of a Fund's total assets,
the Fund will not make any additional investments.
These investment limitations are applied at the time investment securities
are purchased.
PURCHASES AND REDEMPTIONS OF SHARES
Shares of the Fund are sold on a continuous basis for the Fund by the
Distributor. The Distributor is a registered broker/dealer with principal
offices at 60 State Street, Boston, Massachusetts 02109.
Purchase of Shares
Class K shares of the Fund are sold without an initial or contingent sales
charge to customers ("Customers") of banks and other institutions, and the
immediate family members of such customers, that have entered into agreements
with the Company providing for shareholder services for Customers. Customers may
include individuals, trusts, partnerships and
<PAGE>
corporations. All share purchases are effected through a Customer's account at
an institution through procedures established in connection with the
requirements of the account, and confirmations of share purchases and
redemptions will be sent to the institution involved. Institutions (or their
nominees) will normally be the holders of record of Fund shares acting on behalf
of their Customers, and will reflect their Customers' beneficial ownership of
shares in the account statements provided by them to their Customers. The
exercise of voting rights and the delivery to Customers of shareholder
communications from the Fund will be governed by the Customers' account
agreements with the institution. Investors wishing to purchase shares of the
Fund should contact their account representatives.
Shares of the Fund are sold at net asset value per share next determined
on that day after receipt of a purchase order. Purchase orders by an institution
for Class K shares must be received by the Distributor or the Fund's Transfer
Agent before the close of regular trading hours (currently 4:00 p.m. New York
City time) on the New York Stock Exchange (the "Exchange"), on any Business Day
(as defined below). Payment for such shares must be made by institutions in
Federal funds or other funds immediately available to the Custodian no later
than 4:00 p.m. (New York City time) on the next Business Day following the
receipt of the purchase order.
It is the responsibility of the institution to transmit orders for
purchases by their customers and to deliver required funds on a timely basis. If
funds are not received within the periods described above, the order will be
canceled, notice thereof will be given, and the institution will be responsible
for any loss to the Fund or its shareholders. Institutions may charge certain
account fees depending on the type of account the investor has established with
the institution. In addition, an institution may receive fees from the Fund with
respect to the investments of its customers as described below under
"Management." Payments for Class K shares of the Fund may, in the discretion of
the Advisor, be made in the form of securities that are permissible investments
for the Fund. For further information see "In-Kind Purchases" in the Statement
of Additional Information.
Purchases may be effected on days on which the Exchange is open for
business (a "Business Day"). The Company reserves the right to reject any
purchase order. Payment for orders which are not received or accepted will be
returned after prompt inquiry. The issuance of shares is recorded on the books
of the Fund, and share certificates are not issued unless expressly requested in
writing. Certificates are not issued for fractional shares.
<PAGE>
Neither the Company, the Distributor nor the Transfer Agent will be
responsible for the authenticity of telephone instructions for the purchase or
redemption of shares where such instructions are reasonably believed to be
genuine. Accordingly, the Institution will bear the risk of loss. The Company
will attempt to confirm that telephone instructions are genuine and will use
such procedures as are considered reasonable. To the extent that the Company
fails to use reasonable procedures to verify the genuineness of telephone
instructions, it or its service providers may be liable for such instructions
that prove to be fraudulent or unauthorized.
Redemption of Shares
Redemption orders are effected at the net asset value per share next
determined after receipt of the order. Shares held by an institution on behalf
of its customers must be redeemed in accordance with instructions and
limitations pertaining to the account at the institution. The Fund intends to
pay cash for all shares redeemed, but in unusual circumstances may make payment
wholly or partly in portfolio securities at their then market value equal to the
redemption price. In such cases, an investor may incur brokerage costs in
converting such securities to cash.
Share balances may be redeemed pursuant to arrangements between
institutions and investors. It is the responsibility of an institution to
transmit redemption orders to the Fund's Transfer Agent and to credit its
Customers' accounts with the redemption proceeds on a timely basis. If the
Transfer Agent receives a redemption order prior to 4:00 p.m. (New York City
time), the redemption proceeds for shares of the Fund are normally wired to the
redeeming institution the following Business Day. The Fund reserves the right to
delay the wiring of redemption proceeds for up to seven days after it receives
redemption order if, in the judgment of the Investment Advisor, an earlier
payment could adversely affect the Fund.
Redemption by Check
Free checkwriting is available with respect to Class K Shares of the Fund.
With this service, a shareholder may write checks in the amount of $500 or more.
To obtain checks, a shareholder must complete the Signature Card Section of the
Account Application Form. To establish this checkwriting service after opening
an account, the shareholder must contact the Fund to obtain an Account
Application Form. Upon 30 days' prior written notice to shareholders, the
checkwriting privilege may be modified or terminated. An investor cannot close
an account in the Fund by writing a check. A shareholder will receive the
dividends declared on the shares to be redeemed up to the date that a check is
presented to the Custodian for payment.
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
The Fund expects to pay 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 daily as a dividend and paid monthly. Generally,
dividends are paid within six business days after month-end.
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 same class 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 or in a subsequent
request, 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 class of the Fund at the net asset value in effect at the
close of business on the reinvestment date. Dividends are automatically paid in
cash (along with any redemption proceeds) not later than seven business days
after a shareholder closes an account with the Fund.
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>
The Fund's net investment income available for distribution to the holders
of Class K shares will be reduced by the amount of service and distribution fees
payable under the Class K Plan described below.
NET ASSET VALUE
Net asset value for Class K shares in the Fund is calculated by dividing
the value of all securities and other assets belonging to the Fund allocable to
that class, less the liabilities charged to that class, by the number of
outstanding shares of that class.
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
hours on the New York Stock Exchange (currently 4:00 p.m., New York time) on
each business day. Securities 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. 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 determines 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 Company does not accept purchase and redemption orders on days on
which 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 (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 Board of Directors. The
Statement of Additional Information contains the name and background information
of each Director.
<PAGE>
Investment Advisor
Munder Capital Management, a Delaware general partnership with its
principal offices at 480 Pierce Street, Birmingham, Michigan 48009, serves as
the Fund's investment advisor. The Advisor was formed in December 1994. The
principal partners of the Advisor are Old MCM, Inc. ("MCM"), Munder Group LLC,
Woodbridge Capital Management, Inc. ("Woodbridge") and WAM Holdings, Inc.
("WAM"). MCM was founded in February 1985 as a Delaware corporation and was a
registered investment advisor. 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 June 30, 1996, the Advisor and its affiliates
had approximately $34 billion in assets under active management, of which $17
billion were invested in equity securities, $6 billion were invested in money
market or other short-term instruments, and $11 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.
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 .25% of the Fund's average daily net assets.
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 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.
Portfolio Manager
Sharon E. Fayolle, Vice President and Director of Money Market Trading for
the Advisor, is primarily responsible for the day to day management of the
investment selections of the Fund. She is also responsible for overseeing the
management of cash portfolios, money market funds and foreign currency trading
since May, 1996. She has co-managed the Munder International Bond Fund since
October, 1996. Prior to joining the Advisor in 1996, she was employed in the
investment area of Ford Motor Company as European Portfolio Manager responsible
for investment and cash management for Ford's European operations.
<PAGE>
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 Company. 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 Company'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 these 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
for which they provide services, computed daily and payable monthly at the rate
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 certain other investment portfolios that are advised by the Advisor,
for which the Custodian provides services, 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% of net assets in excess of
$600 million. The Custodian also receives certain transaction based fees.
<PAGE>
For an additional description of the services performed by the
Administrator, Transfer Agent and Custodian, see the Statement of Additional
Information.
Shareholder Servicing Arrangements
The Company, on behalf of the Fund, has adopted a Shareholder Servicing
Plan (the "Class K Plan") under which Class K shares are sold through
institutions which enter into shareholder servicing agreements with the Company.
The agreements require the institutions to provide shareholder services to their
customers ("Customers") who from time to time own of record or beneficially
Class K shares in return for payment by the Fund at a rate not exceeding .25%
(on an annualized basis) of the average daily net asset value of the Class K
shares beneficially owned by the Customers. Class K shares bear all fees paid to
institutions under the Class K Plan.
The services provided by institutions under the Class K Plan may include
processing purchase, exchange and redemption requests from Customers and placing
orders with the Transfer Agent; processing dividend and distribution payments
from the Fund on behalf of Customers; providing information periodically to
Customers showing their positions in Class K shares; providing sub-accounting
with respect to Class K shares beneficially owned by Customers or the
information necessary for sub-accounting; responding to inquiries from Customers
concerning their investment in Class K shares; arranging for bank wires; and
providing such other similar services as may be reasonably requested.
The Fund understands that institutions may charge fees to their Customers
who are the owners of Class K shares in connection with their Customer accounts.
These fees would be in addition to any amounts which may be received by an
institution under its agreements with the Fund. The agreements require an
institution to disclose to its Customers any compensation payable to the
institution by the Fund and any other compensation payable by the Customers in
connection with the investment of their assets in Class K shares. Customers of
institutions should read this Prospectus in light of the terms governing their
accounts with their institutions. Conflict of interest restrictions may apply to
the receipt by institutions of compensation from the Distributor with respect to
the investment of fiduciary assets in Class K shares.
Payments under the Class K Plan are not tied exclusively to the
shareholder service expenses actually incurred by the institutions and the
payments may exceed service expenses actually incurred. The Company's Board of
Directors evaluates the appropriateness of the Class K Plan and its payment
terms on a periodic basis.
<PAGE>
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 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 any
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 and 90% of its net tax-exempt interest 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.)
Substantially all of the Fund's net realized long-term capital gains, if
any, will be distributed at least annually. The Fund will generally have no
Federal income 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.
A taxable gain or loss may also be realized by a holder of shares in the
Fund upon the redemption or transfer of shares depending upon the tax basis of
the shares and their price at the time of the transaction.
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.
Before purchasing shares in the Funds, 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 declare
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
<PAGE>
a portion of such dividend or distribution, although in effect a return of
capital, may be subject to tax.
On an annual basis, the Company will send written notices to record owners
of shares regarding the Federal tax status of distributions made by the Fund.
Since this is not an exhaustive discussion of applicable tax consequences and
since state and local taxes may be different from the Federal taxes described
above, investors may wish to contact their tax advisors concerning investments
in the Fund.
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 Munder Money Market Fund, The Munder
Small-Cap Value Fund, The Munder Equity Selection Fund, The Munder Micro-Cap
Equity Fund and The NetNet Fund, each of which, except The Munder International
Bond Fund, is classified as a diversified investment company under the 1940 Act.
The shares of the Fund are offered as five separate classes of common
stock, $.01 par value per share, designated Class A shares, Class B shares,
Class C shares, Class K shares and Class Y shares. All shares represent
interests in the same assets of the Fund and are identical in all respects
except that each class bears different service and distribution expenses and may
bear various class-specific expenses, and each class has exclusive voting rights
with respect to its service and/or distribution plan, if any. Shares of the Fund
issued are fully paid, non-assessable, fully transferable and redeemable at the
option of the holder. Investors may call the Fund at (800) 438-5789 for more
information concerning other classes of shares of the Fund. This Prospectus
relates only to the Class K shares of the Fund.
The Company's 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. In addition, shareholders of
the Fund will vote in the
<PAGE>
aggregate and not by class, except as otherwise expressly required by law or
when the Directors determine that the matter to be voted upon affects only the
interests of the holders of a particular class of shares. The Company is not
required and does 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
Company will assist in shareholder communications in connection with such a
meeting. For further discussion of the voting rights of shareholders, see
"Additional Information Concerning Shares" in the Statement of Additional
Information.
Reports to Shareholders
The Fund will seek to eliminate duplicate mailings of prospectuses and
shareholders reports to accounts which have the same primary record owner, and
with respect to joint tenant accounts or tenant in common accounts, 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 and yield data for Class
K shares of the Fund in advertisements or in communications to shareholders. The
total return of Class K shares of 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 a class of shares 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.
The yield of a class of shares in the Fund is computed based on the net
income of such class in the 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 for a class of shares 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 result on a semi-annual basis.
The Fund may compare the performance of the shares to the performance of
other mutual funds with similar investment
<PAGE>
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 Lehman Brothers Government/Corporate Bond Index, a recognized
unmanaged index of government and corporate bonds, 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 a class of shares in 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 a 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.
Quotations of total return for Class K shares will reflect the fees for
certain shareholder services described in this Prospectus.
THE MUNDER SHORT TERM TREASURY FUND
480 Pierce Street
Birmingham, Michigan 48009
Telephone (800) 438-5789
PROSPECTUS
Class Y Shares
The Munder Short Term Treasury Fund (the "Fund") is a series of shares
issued by The Munder Funds, Inc. (the "Company"), an open-end management
investment company. The Fund's investment objective is to provide shareholders
with a high level of current income consistent with capital preservation. The
Fund seeks to achieve its objective by investing only in U.S. Treasury
securities and repurchase agreements fully collateralized by U.S. Treasury
securities. There can be no assurance that the Fund's investment objective will
be achieved. The net asset value per share of the Fund will fluctuate in
response to changes in market conditions and other factors.
Munder Capital Management (the "Advisor") serves as investment advisor to
the Fund.
This prospectus contains the information that a prospective investor
should know before investing in the Fund. Investors are encouraged to read this
Prospectus and retain it for future reference. A Statement of Additional
Information dated ______, 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. It may be obtained free of
charge by calling the Fund at (800) 438-5789.
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 ____________, 1996
<PAGE>
TABLE OF CONTENTS
PAGE
EXPENSE TABLE..................................................... 3
THE FUND.......................................................... 4
INVESTMENT OBJECTIVE AND POLICIES................................. 4
PORTFOLIO INSTRUMENTS AND PRACTICES AND
ASSOCIATED RISK FACTORS....................... 5
INVESTMENT LIMITATIONS............................................ 8
PURCHASES AND REDEMPTIONS OF SHARES............................... 8
DIVIDENDS AND DISTRIBUTIONS....................................... 11
NET ASSET VALUE................................................... 12
MANAGEMENT........................................................ 13
TAXES............................................................. 15
DESCRIPTION OF SHARES............................................. 16
PERFORMANCE....................................................... 18
No person has been authorized to give any information, or to make any
representations not contained in this Prospectus, or in the Fund's 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 Company
or its distributor, Funds Distributor, Inc. (the "Distributor"). This Prospectus
does not constitute an offering by the Company or by the Distributor in any
jurisdiction in which such offering may not lawfully be made.
<PAGE>
EXPENSE TABLE
The following table sets forth certain costs and expenses that an investor
will incur either directly or indirectly as a shareholder of Class Y shares of
the Fund based on estimated operating expenses.
<TABLE>
<S> <C>
Annual operating expenses
(as a percentage of average net assets)
Advisory Fees .............................................. .25%
Other Expenses.............................................. .25%
Total Fund Operating Expenses............................... .50%
</TABLE>
"Other expenses" in the above table include fees for shareholder services,
administrator fees, custodial fees, legal and accounting fees, printing costs,
registration fees, fees for any portfolio valuation service, the cost of
regulatory compliance, the costs of maintaining the Fund's legal existence and
the costs involved with communicating with shareholders. The amount of "Other
expenses" is based on estimated expenses and projected assets for the current
fiscal year. The nature of the services for which the Fund is obligated to pay
advisory fees is described under "Management." 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.
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:
<TABLE>
<S> <C>
1 Year 3 Year
An investor would pay the following $5 $16
expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at
the end of each time period:
</TABLE>
<PAGE>
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 FUND
The Munder Short Term Treasury Fund (the "Fund") is a series of shares
issued by The Munder Funds, Inc. (the "Company"), an open-end management
investment company. The Company was organized 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
The Fund's investment objective is to provide shareholders with a high
level of current income consistent with capital preservation. The Fund seeks to
achieve its objective by investing only in U.S. Treasury securities and
repurchase agreements fully collateralized by U.S. Treasury securities. Under
normal market conditions, the Fund will invest 100% of its total assets in these
securities. Under normal circumstances, the Fund will enter into repurchase
agreements with maturities of seven days or less and will invest in securities
with remaining maturities of three years or less. The dollar-weighted average
maturity of the Fund's portfolio is not expected to exceed two years. The Fund
also may borrow money for temporary purposes and to meet redemption requests and
may enter into reverse repurchase agreements. In addition, the Fund may lend
portfolio securities, may purchase securities on a "when-issued" basis and may
purchase or sell securities on a "forward commitment" basis. See "Portfolio
Instruments and Practices and Associated Risk Factors." There can be no
assurance that the Fund's investment objective will be achieved.
The Fund is not a money market fund and, although it seeks to maintain
minimum fluctuation of principal value, no assurance can be given that, when an
investor desires to redeem Fund shares, the then-current net asset value per
share will be at or greater than the net asset value per share at the time of
purchase.
The value of the portfolio securities held by the Fund will vary inversely
to changes in prevailing interest rates. Thus, if interest rates have increased
from the time a
<PAGE>
security was purchased, such security, if sold, might be sold at a price less
than its cost. Similarly, if interest rates have declined from the time a
security was purchased, such security, if sold, might be sold at a price greater
than its purchase cost. In either instance, if the security was purchased at
face value and held to maturity, no gain or loss would be realized.
PORTFOLIO INSTRUMENTS AND PRACTICES AND
ASSOCIATED RISK FACTORS
U.S. Treasury Securities. Securities purchased by the
Fund are direct obligations of the U.S. Treasury and are
guaranteed by the full faith and credit of the U.S.
government. These securities presently consist of U.S.
Treasury bills, U.S. Treasury notes and U.S. Treasury bonds.
U.S. Treasury securities differ in their interest rates,
maturities and times of issuance. Treasury bills have initial
maturities of one year or less; Treasury notes have initial
maturities of one to ten years; and Treasury bonds generally
have initial maturities greater than ten years.
Zero Coupon Treasury Securities. A portion of the U.S. Treasury securities
purchased by the Fund may be "zero coupon" Treasury securities. These are U.S.
Treasury notes and bonds which have been stripped of their unmatured interest
coupons and receipts or which are certificates representing interests in such
stripped debt obligations and coupons. Such securities are purchased at a
discount from their face amount, giving the purchaser the right to receive their
full value at maturity. A zero coupon security pays no interest to its holder
during its life. Its value to an investor consists of the difference between its
face value at the time of maturity and the price for which it was acquired,
which is generally an amount significantly less than its face value (sometimes
referred to as a "deep discount" price).
The interest earned on such securities is, implicitly, automatically
compounded and paid out at maturity. While such compounding at a constant rate
eliminates the risk of receiving lower yields upon reinvestment of interest if
prevailing interest rates decline, the owner of a zero coupon security will be
unable to participate in higher yields upon reinvestment of interest received if
prevailing interest rates rise. For this reason, zero coupon securities are
subject to substantially greater market price fluctuations during periods of
changing prevailing interest rates than are comparable debt securities which
make current distributions of interest. Current federal tax law requires that a
holder (such as the Fund) of a zero coupon security accrue a portion of the
discount at which the security was purchased as income each year even though the
Fund receives no interest payments in cash on the security during the year.
<PAGE>
Certain banks and brokerage firms have separated ("stripped") the
principal portions ("corpus") from the coupon portions of the U.S. Treasury
bonds and notes and sell them separately in the form of receipts or certificates
representing undivided interests in these instruments (which instruments are
generally held by a bank in a custodial or trust account). The Fund will not
purchase any such receipts or certificates representing stripped corpus or
coupon interests in U.S. Treasury securities sold by banks and brokerage firms.
The Fund will only purchase zero coupon Treasury securities which have been
stripped by the Federal Reserve Bank.
Repurchase Agreements. The Fund may agree to purchase U.S. Treasury
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 member banks of the Federal Reserve system, any foreign bank or any
domestic or foreign broker/dealer which is recognized as a reporting government
securities dealer. 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.
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.
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
<PAGE>
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.
When-Issued Purchases and Forward Commitments. The Fund may purchase
securities on a "when-issued" basis and may purchase or sell securities on a
"forward commitment" basis. These transactions, which involve a commitment by
the Fund to purchase or sell particular securities with payment and delivery
taking place at a future date (perhaps one or two months later), permit the Fund
to lock-in a price or yield on a security, regardless of future changes in
interest rates. When-issued and forward commitment transactions involve the risk
that the price or yield obtained may be less favorable than the price or yield
available when the delivery takes place. The Fund will establish a segregated
account consisting of cash, U.S. Government securities or other high grade debt
obligations in an amount equal to the amount of its when-issued purchases and
forward commitments. The Fund's when-issued purchases and forward purchase
commitments are not expected to exceed 25% of the value of the Fund's total
assets absent unusual market conditions. The Fund does not intend to engage in
when-issued purchases and forward commitments for speculative purposes but only
in furtherance of its investment objective.
Lending of Portfolio Securities. To enhance the return on its 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 a possible delay in
the recovery of the securities or a possible loss of rights in the collateral
should the borrower fail financially.
Portfolio Turnover. The Advisor will not consider portfolio turnover rate
a limiting factor in making investment decisions consistent with the Fund's
objective and policies. A high portfolio turnover rate involves larger
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. It is anticipated that the Fund's annual portfolio turnover
rate will range from 100% to 200%.
INVESTMENT LIMITATIONS
The Fund's investment objective and policies may be changed by the
Company's Board of Directors without shareholder approval. However, shareholders
will be notified
<PAGE>
in writing at least 30 days in advance of any such material change, except where
notice is not required. 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 the 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 assets of the Fund may be
invested without regard to this 5% limitation;
(2) invest 25% or more of its total assets in one or more issuers
conducting their principal business activities in the same industry;
and
(3) borrow money except for temporary purposes in amounts up to
one-third of the value of its total assets at the time of such
borrowing. Whenever borrowings exceed 5% of a Fund's total assets,
the Fund will not make any additional investments.
These investment limitations are applied at the time investment securities
are purchased.
PURCHASES AND REDEMPTIONS OF SHARES
Shares of the Fund are sold on a continuous basis for the Fund by the
Distributor. The Distributor is a registered broker/dealer with principal
offices at 60 State Street, Boston, Massachusetts 02109.
Purchase of Shares
Class Y Shares of the Fund are sold without an initial or contingent sales
charge to fiduciary and discretionary accounts of institutions, "institutional
investors," Directors, trustees, officers and employees of the Company, The
Munder Funds Trust, the Investment Advisor, the Distributor and the Investment
Advisor's investment advisory clients and family members of the Advisor's
employees. "Institutional investors" may include financial institutions (such as
banks, savings institutions and credit unions); pension and profit sharing and
employee benefit plans and trusts; insurance companies; investment companies;
investment advisers; and broker-dealers acting for their own accounts or for the
accounts of such institutional investors. A minimum
<PAGE>
initial investment of $500,000 for Class Y Shares of the Fund is required for
fiduciary and discretionary accounts of institutions and institutional
investors.
Shares of the Fund are sold at net asset value per share next determined
on that day after receipt of a purchase order. Purchase orders by an institution
for Class Y shares must be received by the Distributor or the Fund's Transfer
Agent before the close of regular trading hours (currently 4:00 p.m. New York
City time) on the New York Stock Exchange (the "Exchange"), on any Business Day
(as defined below). Payment for such shares must be made by institutions in
Federal funds or other funds immediately available to the Custodian no later
than 4:00 p.m. (New York City time) on the next Business Day following the
receipt of the purchase order.
It is the responsibility of the institution to transmit orders for
purchases by their customers and to deliver required funds on a timely basis. If
funds are not received within the periods described above, the order will be
canceled, notice thereof will be given, and the institution will be responsible
for any loss to the Fund or its shareholders. Institutions may charge certain
account fees depending on the type of account the investor has established with
the institution. In addition, an institution may receive fees from the Fund with
respect to the investments of its customers as described below under
"Management." Payments for Class Y Shares of the Fund may, in the discretion of
the Advisor, be made in the form of securities that are permissible investments
for the Fund. For further information see "In-Kind Purchases" in the Statement
of Additional Information.
Purchases may be effected on days on which the Exchange is open for
business (a "Business Day"). The Company reserves the right to reject any
purchase order. Payment for orders which are not received or accepted will be
returned after prompt inquiry. The issuance of shares is recorded on the books
of the Fund, and share certificates are not issued unless expressly requested in
writing. Certificates are not issued for fractional shares.
Neither the Company, the Distributor nor the Transfer Agent will be
responsible for the authenticity of telephone instructions for the purchase or
redemption of shares where such instructions are reasonably believed to be
genuine. Accordingly, the Institution will bear the risk of loss. The Company
will attempt to confirm that telephone instructions are genuine and will use
such procedures as are considered reasonable. To the extent that the Company
fails to use reasonable procedures to verify the genuineness of telephone
instructions, it or its service providers may be liable for such instructions
that prove to be fraudulent or unauthorized.
<PAGE>
Automatic Investment Plan ("AIP")
An investor in Class Y 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 Application Form. The minimum pre-authorized
investment is $50.
Redemption of Shares
Redemption orders are effected at the net asset value per share next
determined after receipt of the order. Shares held by an institution on behalf
of its customers must be redeemed in accordance with instructions and
limitations pertaining to the account at the institution. The Fund intends to
pay cash for all shares redeemed, but in unusual circumstances may make payment
wholly or partly in portfolio securities at their then market value equal to the
redemption price. In such cases, an investor may incur brokerage costs in
converting such securities to cash.
Share balances may be redeemed pursuant to arrangements between
institutions and investors. It is the responsibility of an institution to
transmit redemption orders to the Fund's Transfer Agent and to credit its
Customers' accounts with the redemption proceeds on a timely basis. If the
Transfer Agent receives a redemption order prior to 4:00 p.m. (New York City
time), the redemption proceeds for shares of the Fund are normally wired to the
redeeming institution the following Business Day. The Fund reserves the right to
delay the wiring of redemption proceeds for up to seven days after it receives a
redemption order if, in the judgment of the Investment Advisor, an earlier
payment could adversely affect the Fund.
Redemption by Check
Free checkwriting is available with respect to Class Y Shares of the Fund.
With this service, a shareholder may write checks in the amount of $500 or more.
To obtain checks, a shareholder must complete the Signature Card Section of the
Account Application Form. To establish this checkwriting service after opening
an account, the shareholder must contact the Fund to obtain an Account
Application Form. Upon 30 days' prior written notice to shareholders, the
checkwriting privilege may be modified or terminated. An investor cannot close
an account in the Fund by writing a check. A shareholder will receive the
dividends declared on the shares to be redeemed up to the date that a check is
presented to the Custodian for payment.
<PAGE>
Exchanges
Class Y Shares of the Fund may be exchanged for Class Y Shares of other
funds of the Company and The Munder Funds Trust, based on their respective net
asset values, without the imposition of any sales charges.
Any shares involved in an exchange must satisfy the requirements relating
to the minimum initial investment in an investment portfolio of the Company or
The Munder Funds Trust, and the shares involved must be legally available for
sale in the state of the investor's residence. For Federal income tax purposes,
a share exchange is a taxable event and, accordingly, a capital gain or loss may
be realized. Before making an exchange request, shareholders should consult a
tax or other financial advisor and should consider the investment objective,
policies and restrictions of the investment portfolio into which the shareholder
is making an exchange, as set forth in the applicable prospectus. An investor
who is considering an exchange may obtain a copy of the prospectus for any
investment portfolio of the Company or The Munder Funds Trust by contacting his
or her broker or the Fund at (800) 438-5789. Certain brokers may charge a fee
for handling exchanges.
The Company reserves the right to modify or terminate the exchange
privilege at any time. Notice will be given to shareholders of any material
modifications, except where notice is not required.
DIVIDENDS AND DISTRIBUTIONS
The Fund expects to pay 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 daily as a dividend and paid monthly. Generally,
dividends are paid within six business days after month-end.
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 same class 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 or in a subsequent
request, 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 class of the Fund at the net asset value in effect at the
close of business on the reinvestment date. Dividends are automatically paid in
cash (along with any redemption proceeds) not later than seven business days
after a shareholder closes an account with the Fund.
<PAGE>
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.
NET ASSET VALUE
Net asset value for Class Y Shares in the Fund is calculated by dividing
the value of all securities and other assets belonging to the Fund allocable to
that class, less the liabilities charged to that class, by the number of
outstanding shares of that class.
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
hours on the New York Stock Exchange (currently 4:00 p.m., New York time) on
each business day. Securities 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. 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
<PAGE>
Directors. Debt securities with remaining maturities of 60 days or less are
valued at amortized cost, unless the Board of Directors determines 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 Company does not accept purchase and redemption orders on days on
which 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 (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 Board of Directors. The
Statement of Additional Information contains the name and background information
of each Director.
Investment Advisor
Munder Capital Management, a Delaware general partnership with its
principal offices at 480 Pierce Street, Birmingham, Michigan 48009, serves as
the Fund's investment advisor. The Advisor was formed in December 1994. The
principal partners of the Advisor are Old MCM, Inc. ("MCM"), Munder Group LLC,
Woodbridge Capital Management, Inc. ("Woodbridge") and WAM Holdings, Inc.
("WAM"). MCM was founded in February 1985 as a Delaware corporation and was a
registered investment advisor. 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 June 30, 1996, the Advisor and its affiliates
had approximately $34 billion in assets under active management, of which $17
billion were invested in equity securities, $6 billion were invested in money
market or other short-term instruments, and $11 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.
For the advisory services provided and expenses assumed
by it, the Advisor has agreed to a fee from the Fund, computed
<PAGE>
daily and payable monthly, at an annual rate of .25% of the Fund's average daily
net assets.
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 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.
Portfolio Manager
Sharon E. Fayolle, Vice President and Director of Money Market Trading for
the Advisor, is primarily responsible for the day to day management of the
investment selections of the Fund. She is also responsible for overseeing the
management of cash portfolios, money market funds and foreign currency trading
since May, 1996. She has co-managed the Munder International Bond Fund since
October, 1996. Prior to joining the Advisor in 1996, she was employed in the
investment area of Ford Motor Company as European Portfolio Manager responsible
for investment and cash management for Ford's European operations.
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 Company. 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 Company'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 these 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
for which they provide services, computed daily and payable monthly at the rate
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
<PAGE>
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 certain other investment portfolios that are advised by the Advisor,
for which the custodian provides services, 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% 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.
TAXES
The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code for 1986, as amended (the "Code").
Such qualification 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 any
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 and 90% of its net tax-exempt interest 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.)
<PAGE>
Substantially all of the Fund's net realized long-term capital gains, if
any, will be distributed at least annually. The Fund will generally have no
Federal income 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.
A taxable gain or loss may also be realized by a holder of shares in the
Fund upon the redemption or transfer of shares depending upon the tax basis of
the shares and their price at the time of the transaction.
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.
Before purchasing shares in the Funds, 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.
On an annual basis, the Company will send written notices to record owners
of shares regarding the Federal tax status of distributions made by the Fund.
Since this is not an exhaustive discussion of applicable tax consequences and
since state and local taxes may be different from the Federal taxes described
above, investors may wish to contact their tax advisors concerning investments
in the Fund.
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 Munder Money Market Fund, The Munder
Small-Cap Value Fund, The Munder Equity Selection Fund, The Munder Micro-Cap
<PAGE>
Equity Fund and The NetNet Fund, each of which, except The Munder International
Bond Fund, is classified as a diversified investment company under the 1940 Act.
The shares of the Fund are offered as five separate classes of common
stock, $.01 par value per share, designated Class A Shares, Class B Shares,
Class C Shares, Class K Shares and Class Y Shares. All shares represent
interests in the same assets of the Fund and are identical in all respects
except that each class bears different service and distribution expenses and may
bear various class-specific expenses, and each class has exclusive voting rights
with respect to its service and/or distribution plan, if any. Shares of the Fund
issued are fully paid, non-assessable, fully transferable and redeemable at the
option of the holder. Investors may call the Fund at (800) 438-5789 for more
information concerning other classes of Shares of the Fund. This Prospectus
relates only to the Class Y Shares of the Fund.
The Company's 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 Company is not required
and does 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 Company
will assist in shareholder communications in connection with such a meeting. For
further discussion of the voting rights of shareholders, see "Additional
Information Concerning Shares" in the Statement of Additional Information.
Reports to Shareholders
The Fund will seek to eliminate duplicate mailings of prospectuses and
shareholders reports to accounts which have the same primary record owner, and
with respect to joint tenant accounts or tenant in common accounts, 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 and yield data for Class
Y Shares of the Fund in advertisements or in communications to shareholders. The
total return of a class of shares in the Fund may be calculated on an average
annual total return basis, and may also be calculated on an
<PAGE>
aggregate total return basis, for various periods. Average annual total return
reflects the average percentage change in value of an investment in a class of
shares 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.
The yield of a class of shares in the Fund is computed based on the net
income of such class in the 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 for a class of shares 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 result on a semi-annual basis.
The Fund may compare the performance of its 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 Lehman Brothers
Government/Corporate Bond Index, a recognized unmanaged index of government and
corporate bonds, 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 a
class of shares in 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 a 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>
THE MUNDER SHORT TERM TREASURY FUND
STATEMENT OF ADDITIONAL INFORMATION
______________ ___, 1996
The Munder Short Term Treasury Fund (the "Fund") is a series of shares
issued by The Munder Funds, Inc. (the "Company"), an open-end management
investment company. The Fund's investment advisor is Munder Capital Management
(the "Advisor").
This Statement of Additional Information is intended to supplement the
information provided to investors in the Fund's Prospectuses dated ____________,
1996 and has been filed with the Securities and Exchange Commission ("SEC") as
part of the Company's Registration Statement. This Statement of Additional
Information is not a prospectus, and should be read only in conjunction with the
Fund's Prospectuses dated ___________, 1996. The contents of this Statement of
Additional Information are incorporated by reference in the Prospectuses in
their entirety. A copy of each Prospectus may be obtained through Funds
Distributor, Inc. (the "Distributor"), or by calling the Fund at (800) 438-5789.
This Statement of Additional Information is dated _____________, 1996. 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.
TABLE OF CONTENTS
Page
GENERAL................................................................. 2
FUND INVESTMENTS........................................................ 2
Repurchase Agreements............................................... 3
Borrowing........................................................... 3
Reverse Repurchase Agreements....................................... 4
When-Issued Purchases and Forward Commitments (Delayed-
Delivery Transactions).......................................... 4
Lending of Portfolio Securities..................................... 5
ADDITIONAL INVESTMENT LIMITATIONS....................................... 5
DIRECTORS AND OFFICERS.................................................. 8
INVESTMENT ADVISORY AND OTHER SERVICE ARRANGEMENTS...................... 12
Investment Advisor.................................................. 12
Distribution Agreement.............................................. 13
<PAGE>
Administration Agreement............................................ 15
Custodian and Transfer Agency Agreements............................ 15
PORTFOLIO TRANSACTIONS.................................................. 18
PURCHASE AND REDEMPTION INFORMATION..................................... 21
Purchases........................................................... 21
Letter of Intent.................................................... 21
Retirement Plans.................................................... 22
Redemptions......................................................... 22
Systematic Withdrawals.............................................. 22
Other Information................................................... 23
Exchanges........................................................... 23
NET ASSET VALUE......................................................... 24
In-Kind Purchases................................................... 24
PERFORMANCE INFORMATION................................................. 24
TAXES................................................................... 27
General............................................................. 28
ADDITIONAL INFORMATION CONCERNING SHARES................................ 31
MISCELLANEOUS........................................................... 32
Counsel............................................................. 32
Independent Auditors................................................ 33
REGISTRATION STATEMENT.................................................. 33
GENERAL
The Company was organized as a Maryland corporation on
November 18, 1992. As stated in each Prospectus, the
investment advisor of the Fund is Munder Capital Management
(the "Advisor"). The principal partners of the Advisor are
Old MCM, Inc. ("Old MCM"), Munder Group LLC, Woodbridge
Capital Management, Inc. ("Woodbridge") and WAM Holdings, Inc.
("WAM"). Mr. Lee P. Munder, the Advisor's Chief Executive
Officer, indirectly owns or controls a majority of the
partnership interests of the Advisor. Capitalized terms used
herein and not otherwise defined have the same meanings as are
given to them in the Prospectuses.
FUND INVESTMENTS
The following supplements the information contained in the Fund's
Prospectuses concerning the investment objective and policies of the Fund. The
Fund's investment objective is a non-fundamental policy and may be changed
without the
<PAGE>
authorization of the holders of a majority of the Fund's
outstanding shares. There can be no assurance that the Fund
will achieve its objective.
Repurchase Agreements. The Fund may agree to purchase securities from
financial institutions such as member banks of the Federal Reserve System, any
foreign bank or any domestic or foreign broker/dealer that is recognized as a
reporting government securities dealer, subject to the seller's agreement to
repurchase them at an agreed-upon time and price ("repurchase agreements"). 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 underlying obligations, except with respect to repurchase
agreements secured by U.S.
Government securities.
The repurchase price under the repurchase agreements described in the
Prospectuses generally equals the price paid by the Fund plus interest
negotiated on the basis of current short-term rates (which may be more or less
than the rate on the securities underlying the repurchase agreement).
Securities subject to repurchase agreements will be held by the Company's
custodian (or sub-custodian) in the Federal Reserve/Treasury book-entry system
or by another authorized securities depository. Repurchase agreements are
considered to be loans by the Fund under the Investment Company Act of 1940, as
amended (the "1940 Act").
Borrowing. The Fund is authorized to borrow money in amounts up to 5% of
the value of its total assets at the time of such borrowings for temporary
purposes, and is authorized to borrow money in excess of the 5% limit as
permitted by the 1940 Act to meet redemption requests. This borrowing may be
unsecured. The 1940 Act requires the Fund to maintain continuous asset coverage
of 300% of the amount borrowed. If the 300% asset coverage should decline as a
result of market fluctuations or other reasons, the Fund may be required to sell
some of its portfolio holdings within three days to reduce the debt and restore
the 300% asset coverage, even though it may be disadvantageous from an
investment standpoint to sell securities at that time. Borrowing may exaggerate
the effect on the Fund's net asset value of any increase or decrease in the
market value of securities purchased with borrowed funds. Money borrowed will be
subject to interest costs which may or may not be recovered by an appreciation
of the securities purchased. The Fund may also be required to maintain minimum
average balances in connection with such borrowing or to pay a commitment or
other fees to maintain a
<PAGE>
line of credit; either of these requirements would increase the cost of
borrowing over the stated interest rate. The Fund may, in connection with
permissible borrowings, transfer, as collateral, securities owned by the Fund.
Reverse Repurchase Agreements. The Fund may borrow funds for temporary or
emergency 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 will pay interest on
amounts obtained pursuant to a reverse repurchase agreement. While reverse
repurchase agreements are outstanding, the Fund will maintain, in a segregated
account, cash, U.S. Government securities or other liquid high-grade debt
securities of an amount at least equal to the market value of the securities,
plus accrued interest, subject to the agreement.
When-Issued Purchases and Forward Commitments (Delayed- Delivery
Transactions). When-issued purchases and forward commitments (delayed-delivery
transactions) are commitments by the Fund to purchase or sell particular
securities with payment and delivery to occur at a future date (perhaps one or
two months later). These transactions permit the Fund to lock-in a price or
yield on a security, regardless of future changes in interest rates.
When the Fund agrees to purchase securities on a when- issued or forward
commitment basis, the Custodian will set aside cash or liquid portfolio
securities equal to the amount of the commitment in a separate account.
Normally, the Custodian will set aside portfolio securities to satisfy a
purchase commitment, and in such a case the Fund may be required subsequently to
place additional assets in the separate account in order to ensure that the
value of the account remains equal to the amount of the Fund's commitments. It
may be expected that the market value of the Fund's net assets will fluctuate to
a greater degree when it sets aside portfolio securities to cover such purchase
commitments than when it sets aside cash. Because the Fund's liquidity and
ability to manage its portfolio might be affected when it sets aside cash or
portfolio securities to cover such purchase commitments, the Advisor expects
that its commitments to purchase when-issued securities and forward commitments
will not exceed 25% of the value of the Fund's total assets absent unusual
market conditions.
The Fund will purchase securities on a when-issued or forward commitment
basis only with the intention of completing the transaction and actually
purchasing the securities. If deemed advisable as a matter of investment
strategy, however, the Fund may dispose of or renegotiate a commitment after it
<PAGE>
is entered into, and may sell securities it has committed to purchase before
those securities are delivered to the Fund on the settlement date. In these
cases the Fund may realize a taxable capital gain or loss.
When the Fund engages in when-issued and forward commitment transactions,
it relies on the other party to consummate the trade. Failure of such party to
do so may result in the Fund's incurring a loss or missing an opportunity to
obtain a price considered to be advantageous.
The market value of the securities underlying a when- issued purchase or a
forward commitment to purchase securities, and any subsequent fluctuations in
their market value, are taken into account when determining the net asset value
of the Fund starting on the day the Fund agrees to purchase the securities. The
Fund does not earn interest on the securities it has committed to purchase until
they are paid for and delivered on the settlement date.
Lending of Portfolio Securities. To enhance the return on its portfolio,
the Fund may lend securities in its portfolio (subject to a limit of 25% of its
total assets) 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. These loans are terminable at any time, and the Fund will
receive any interest or dividends paid on the loaned securities. In addition, it
is anticipated that the Fund may share with the borrower some of the income
received on the collateral for the loan or the Fund will be paid a premium for
the loan. The risk in lending portfolio securities, as with other extensions of
credit, consists of a possible delay in recovery of the securities or a possible
loss of rights in the collateral should the borrower fail financially. In
determining whether the Fund will lend securities, the Advisor will consider all
relevant facts and circumstances. The Fund will only enter into loan
arrangements with broker-dealers, banks or other institutions which the Advisor
has determined are creditworthy under guidelines established by the Board of
Directors.
ADDITIONAL INVESTMENT LIMITATIONS
In addition to the fundamental investment limitations disclosed in the
Prospectuses, the Fund is subject to the investment limitations enumerated in
this section which may be changed only by a vote of the holders of a majority of
the Fund's outstanding shares (as defined under "Miscellaneous Shareholder
Approvals").
The Fund may not:
<PAGE>
1. Invest more than 25% of its total assets in the securities of
issuers conducting their principal business activities in any
one industry (securities issued or guaranteed by the United
States Government, its agencies or instrumentalities are not
considered to represent industries);
2. Borrow money or issue senior securities (as
defined in the 1940 Act) except that the Fund
may borrow (i) 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;
3. Pledge, mortgage or hypothecate its assets
other than to secure borrowings permitted by
restriction 2 above;
4. Make loans of securities to other persons in excess of 25% of
the Fund's total assets; provided the Fund may invest without
limitation in short-term debt obligations (including
repurchase agreements) and publicly distributed debt
obligations;
5. Underwrite securities of other issuers, except
insofar as the Fund may be deemed an
underwriter under the Securities Act of 1933,
as amended (the "1933 Act") in selling
portfolio securities;
6. Purchase or sell real estate or any interest therein,
including interests in real estate limited partnerships,
except securities issued by companies (including real estate
investment trusts) that invest in real estate or interests
therein;
7. Purchase securities on margin, or make short
sales of securities except for the use of
short-term credit necessary for the clearance
of purchase and sales of portfolio securities;
8. Make investments for the purpose of exercising
control of management; or
9. Invest in commodities or commodity futures
contracts.
Additional investment restrictions adopted by the Fund,
which may be changed by the Board of Directors, provide that
<PAGE>
the Fund may not:
1. With respect to 50% of the Fund's assets,
invest more than 5% of the Fund's assets (taken
at market value at the time of purchase) in the
outstanding securities of any single issuer or
own more than 10% of the outstanding voting
securities of any one issuer, in each case
other than securities issued or guaranteed by
the United States Government, its agencies or
instrumentalities, at the close of each quarter
of its taxable year;
2. Invest more than 15% of its net assets (taken at market value
at the time of purchase) in securities which cannot be readily
resold because of legal or contractual restrictions or which
are not otherwise marketable;
3. Purchase or sell interests in oil, gas or other
mineral exploration or development plans or
leases;
4. Invest in warrants if at the time of
acquisition more than 5% of its total assets,
taken at market value at the time of purchase,
would be invested in warrants, and if at the
time of acquisition more than 2% of its total
assets, taken at market value at the time of
purchase, would be invested in warrants not
traded on the New York Stock Exchange or
American Stock Exchange. For purposes of this
restriction, warrants acquired by the Fund in
units or attached to securities may be deemed
to be without value;
5. Invest more than 5% of its total assets in
securities of issuers which together with any
predecessors have a record of less than three
years of continuous operation. This
restriction shall not apply with respect to
securities issued by a special purpose funding
vehicle for a company with a record of at least
three years of continuous operation, or to real
estate investment trusts the sponsor of which
has a record of at least three years of
operation;
6. Invest in other investment companies except as
permitted under the 1940 Act.
If a percentage limitation is satisfied at the time of investment, a later
increase or decrease in such percentage resulting from a change in the value of
the Fund's investments
<PAGE>
will not constitute a violation of such limitation, except that any borrowing by
the Fund that exceeds the fundamental investment limitations stated above must
be reduced to meet such limitations within the period required by the 1940 Act
(currently three days). In addition, if the Fund's holdings of illiquid
securities exceeds 15% because of changes in the value of the Fund's
investments, the Fund will take action to reduce its holdings of illiquid
securities within a time frame deemed to be in the best interest of the Fund.
Otherwise, the Fund may continue to hold a security even though it causes the
Fund to exceed a percentage limitation because of fluctuation in the value of
the Fund's assets.
In order to permit the sale of shares in certain states, the Company may
make commitments more restrictive than the investment policies and limitations
described above.
DIRECTORS AND OFFICERS
The directors and executive officers of the Company, and their business
addresses and principal occupations during the past five years, are:
<TABLE>
<S> <C> <C>
Principal Occupation
Name, Address and Age Positions with Company During Past Five Years
Charles W. Elliott 1/ Chairman of the Board of Senior Advisor to the President
3338 Bronson Boulevard Directors and Interim Director of Athletics
Kalmazoo, MI 49008 - Western Michigan University
Age: 62 since July 1995; prior to that
Executive Vice President
Administration & Chief
Financial Officer,
Kellogg Company from
January 1987 through
June 1995; before that
Price Waterhouse. Board
of Directors, Steelcase
Financial Corporation.
John Rakolta, Jr. Director and Vice Chairman oChairman, Walbridge Aldinger
1876 Rathmor Board of Directors Company
Bloomfield Hills, MI 48304
Age: 47
Thomas B. Bender Director Investment Advisor, Financial &
7 Wood Ridge Road Investment Management Group
Glen Arbor, MI 49636 (since April, 1991); Vice
Age: 61 President Institutional Sales,
Kidder, Peabody & Co. (Retired
April, 1991).
David J. Brophy Director Professor, University of
1025 Martin Place Michigan; Director, River Place
Ann Arbor, MI 48104 Financial Corp.; Trustee,
Age: 58 Renaissance Assets Trust.
<PAGE>
Dr. Joseph E. Champagne Director Corporate and Executive
319 Snell Road Consultant since September 1995;
Rochester, MI 48306 prior to that Chancellor, Lamar
Age: 56 University from September 1994
until September 1995;
before that Consultant
to Management, Lamar
University; President
and Chief Executive
Officer, Crittenton
Corporation, Crittenton
Development Corporation
until August 1993;
before that President,
Oakland University of
Rochester, MI, until
August 1991; Member,
Board of Directors, Ross
Operating Valve of Troy,
MI
Thomas D. Eckert Director President and COO, Mid-Atlantic
10726 Falls Pointe Drive Group of Pulte Home Corporation
Great Falls, VA 22066
Age: 47
Jack L. Otto Director Retired; Director of Standard
6532 W. Beech Tree Road Federal Bank; Executive Director,
Glen Arbor, MI 49636 McGregor Fund (a private
Age: 67 philanthropic foundation) 1981-
1985; Managing Partner, Detroit
officer of Ernst & Young, until
1981.
Arthur DeRoy Rodecker Director President, Rodecker & Company,
4000 Town Center Investment Brokers, Inc. since
Suite 101 November 1976; President, RAC
Southfield, MI 48075 Advisors, Inc., Registered
Age: 68 Investment Advisor since February
1979; President and
Trustee, Helen L. DeRoy
Foundation, a charitable
foundation; Vice
President and Trustee,
DeRoy Testamentary
Foundation, a charitable
foundation; Trustee,
Providence Hospital
Foundation.
Lee P. Munder President President and CEO of the Advisor;
480 Pierce Street Chief Executive Officer and
Suite 300 President of Old MCM, Inc.;
Birmingham, MI 48009 Director, LPM Investment
Age: 50 Services, Inc. ("LPM").
Terry H. Gardner Vice President, Chief FinancVice President and Chief
480 Pierce Street Officer and Treasurer Financial Officer of the Advisor;
Suite 300 Vice President and Chief
Birmingham, MI 48009 Financial Officer of Old MCM,
Age: 35 Inc. (February 1993 to present);
Audit Manager Arthur Andersen &
Co. (1991 to February 1993);
Secretary of LPM
Paul Tobias Vice President Executive Vice President and
480 Pierce Street Chief Operating Officer of the
Suite 300 Advisor (since April 1995) and
Birmingham, MI 48009 Executive Vice President of
Age: 43 Comerica, Inc.
<PAGE>
Gerald Seizert Vice President Executive Vice President and
480 Pierce Street Chief Investment Officer/Equities
Suite 300 of the Advisor (since April
Birmingham, MI 48009 1995); Managing Director (1991-
Age: 44 1995), Director (1992-1995) and
Vice President (1984-1991) of
Loomis, Sayles and Company, L.P.
Elyse G. Essick Vice President Vice President and Director of
480 Pierce Street Marketing for the Advisor; Vice
Suite 300 President and Director of Client
Birmingham, MI 48009 Services of Old MCM, Inc. (August
Age: 37 1988 to December 1994).
James C. Robinson Vice President Vice President and Chief
480 Pierce Street Investment Officer/Fixed Income
Suite 300 for the Advisor; Vice President
Birmingham, MI 48009 and Director of Fixed Income of
Age: 34 Old MCM, Inc. (1987-1994).
Leonard J. Barr, II Vice President Vice President and Director of
480 Pierce Street Core Equity Research of the
Suite 300 Advisor; Director and Senior Vice
Birmingham, MI 48009 President of Old MCM, Inc. (since
Age: 51 1988); Director of LPM.
Lisa A. Rosen Secretary, Assistant TreasurGeneral Counsel of the Advisor
480 Pierce Street since May, 1996; Formerly
Suite 300 Counsel, First Data Investor
Birmingham, MI 48009 Services Group, Inc.; Assistant
Age 28 Vice President and Counsel with
The Boston Company Advisors,
Inc.; Associate with Hutchins,
Wheeler & Dittmar.
Ann F. Putallaz Vice President Vice President and Director of
480 Pierce Street Fiduciary Services (since January
Suite 300 1995); Director of Client and
Birmingham, MI 48009 Marketing Services of Woodbridge
Age: 50 Capital Management, Inc.
Richard H. Rose Assistant Treasurer Senior Vice President, First Data
First Data Investor Services Investor Services Group, Inc.
Group, Inc. (since May 6, 1994). Formerly,
One Exchange Place Senior Vice President, The Boston
6th Floor Company Advisors, Inc. since
Boston, MA 02109 November 1989.
Age: 39
Teresa M. R. Hamlin Assistant Secretary Counsel, First Data Investor
First Data Investor Services Services Group, Inc.; Formerly
Group, Inc. Paralegal Manager, The Boston
One Exchange Place Company Advisors, Inc.
6th Floor
Boston, MA 02109
Age: 32
1/ Director is an "interested person" of the Company as defined in the 1940 Act.
</TABLE>
Directors of the Company receive an aggregate fee from
the Company, The Munder Funds Trust (the "Trust") and St.
Clair Funds, Inc. ("St. Clair") comprised of an annual
retainer fee and a fee for each Board meeting attended, and
are reimbursed for all out-of-pocket expenses relating to
attendance at meetings.
<PAGE>
The following table summarizes the compensation paid by the Company, the
Trust and St. Clair to their respective Directors/Trustees for the fiscal year
ended June 30, 1996.
<TABLE>
<S> <C> <C> <C> <C>
Aggregate Pension
Compensation Retirement Estimated
from the Benefits Accrued Annual Total
Trust, Company as Part of Benefits from the
Name of Person Positioand St. Clair Fund Expenses upon Retirement Fund Complex
Charles W. Elliott $14,000.00 None None $14,000.00
Chairman
John Rakolta, Jr. $14,000.00 None None $14,000.00
Vice Chairman
Thomas B. Bender $14,000.00 None None $14,000.00
David J. Brophy $14,000.00 None None $14,000.00
Trustee and Director
Dr. Joseph E. Champagne$14,000.00 None None $14,000.00
Trustee and Director
Thomas D. Eckert $14,000.00 None None $14,000.00
Trustee and Director
Jack L. Otto $14,000.00 None None $14,000.00
Trustee and Director
Arthur DeRoy Rodecker $14,000.00 None None $14,000.00
Trustee and Director
</TABLE>
No officer, director or employee of the Advisor, Comerica, the
Distributor, the Administrator or the Transfer Agent currently receives any
compensation from the Trust or the Company.
The Company will not employ Rodecker & Company,
Investment Brokers, Inc. to effect brokerage transactions for
the Funds.
INVESTMENT ADVISORY AND OTHER SERVICE ARRANGEMENTS
Investment Advisor. The Advisor of the Fund is Munder Capital Management,
a Delaware general partnership. The general partners of the Advisor are
Woodbridge, WAM, Old MCM, and Munder Group, LLC. Woodbridge and WAM are
wholly-owned subsidiaries of Comerica Bank -- Ann Arbor, which, in turn is a
wholly-owned subsidiary of Comerica Incorporated, a publicly-held bank holding
company.
Under the terms of the Advisory Agreement, the Advisor furnishes
continuing investment supervision to the Fund and is responsible for the
management of the Fund's portfolio. The responsibility for making decisions to
buy, sell or hold a
<PAGE>
particular security rests with the Advisor, subject to review by the Company's
Board of Directors.
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 0.25% of average daily net assets of the Fund.
If the total expenses borne by the Fund in any fiscal year exceed the
expense limitations imposed by applicable state securities regulations, the
Advisor, Administrator, Custodian and Transfer Agent will bear the amount of
such excess to the extent required by such regulations in proportion to the fees
otherwise payable to them with respect to the Fund for such year. Such amount
borne will be limited to the amount of the fees paid to them for the applicable
period with respect to the Fund. As of the date of this Statement of Additional
Information, the most restrictive expense limitation applicable to the Fund
limits its aggregate annual expenses, including management and advisory fees but
excluding interest, taxes, brokerage commissions, and certain other expenses, to
2-1/2% of the first $30 million of its average net assets, 2% of the next $70
million, and 1-1/2% of its remaining average net assets.
The Fund's Advisory Agreement will continue in effect for a period of two
years from its effective date. If not sooner terminated, the Advisory Agreement
will continue in effect for successive one year periods thereafter, provided
that each continuance is specifically approved annually by (a) the vote of a
majority of the Board of Directors who are not parties to the Advisory Agreement
or interested persons (as defined in the 1940 Act), cast in person at a meeting
called for the purpose of voting on approval, and (b) either (i) the vote of a
majority of the outstanding voting securities of the Fund, or (ii) the vote of a
majority of the Board of Directors. The Advisory Agreement is terminable by vote
of the Board of Directors, or by the holders of a majority of the outstanding
voting securities of the Fund, at any time without penalty, upon 60 days'
written notice to the Advisor. The Advisor may also terminate its advisory
relationship with the Fund without penalty upon 90 days' written notice to the
Company. The Advisory Agreement terminates automatically in the event of its
assignment (as defined in the 1940 Act).
Distribution Agreement. The Company has entered into a distribution
agreement, under which the Distributor, as agent, sells shares of the Fund on a
continuous basis. The Distributor has agreed to use appropriate efforts to
solicit orders for the purchase of shares of the Fund, although it is not
obligated to sell any particular amount of shares. The Distributor pays the cost
of printing and distributing prospectuses to persons who are not holders of
shares of the Fund (excluding preparation and printing expenses necessary
<PAGE>
for the continued registration of the shares) and of printing and distributing
all sales literature. The Distributor's principal offices are located at 60
State Street, Boston, Massachusetts 02109.
Distribution Services Arrangements - Class A, Class B and Class C Shares.
The Fund has adopted a Service Plan with respect to its Class A Shares pursuant
to which it uses its assets to finance activities relating to the provision of
certain shareholder services. Under the Service Plans, the Distributor is paid
an annual service fee at the rate of 0.25% of the value of average daily net
assets of the Class A Shares of the Fund. The Fund has adopted a Service and
Distribution Plan with respect to its Class B and Class C Shares, pursuant to
which it uses its assets to finance activities relating to the distribution of
its shares to investors and the provision of certain shareholder services. Under
the Service and Distribution Plans, the Distributor is paid an annual service
fee of 0.25% of the value of average daily net assets of the Class B and Class C
Shares of the Fund and an annual distribution fee at the rate of 0.75% of the
value of average daily net assets of the Class B and Class C Shares of the Fund.
Under the terms of the Service Plan and both Service and Distribution
Plans (collectively, the "Plans"), each Plan continues from year to year,
provided such continuance is approved annually by vote of the Board of
Directors, including a majority of the Board of Directors who are not interested
persons of the Company, as applicable, and who have no direct or indirect
financial interest in the operation of that Plan (the "Non-Interested Plan
Directors"). The Plans may not be amended to increase the amount to be spent for
the services provided by the Distributor without shareholder approval, and all
amendments of the Plans also must be approved by the Directors in the manner
described above. Each Plan may be terminated at any time, without penalty, by
vote of a majority of the Non-Interested Plan Directors or by a vote of a
majority of the outstanding voting securities of the relevant class of the Fund
(as defined in the 1940 Act) upon not more than 30 days' written notice to any
other party to the Plan. Pursuant to each Plan, the Distributor will provide the
Board of Directors periodic reports of amounts expended under the Plan and the
purposes for which such expenditures were made.
With respect to Class B and Class C Shares of the Fund, the Distributor
expects to pay sales commissions to dealers authorized to sell the Fund's Class
B and Class C Shares at the time of sale. The Distributor will use its own funds
(which may be borrowed) to pay such commissions pending reimbursement pursuant
to the relevant Service and Distribution Plan. In addition, the Advisor may use
its own resources to make payments to the Distributor or dealers authorized to
sell the Fund's shares to support their sales
<PAGE>
efforts.
Shareholder Servicing Arrangements - Class K Shares. As stated in the
Fund's Prospectus, Class K Shares are sold to investors through institutions
which enter into Shareholder Servicing Agreements with the Company to provide
support services to their Customers who beneficially own Class K Shares in
consideration of the Fund's payment of not more than 0.25% (on an annualized
basis) of the average daily net asset value of the Class K Shares beneficially
owned by the Customers.
Services provided by institutions under their service agreements may
include (i) aggregating and processing purchase and redemption requests for
Class K Shares from Customers and placing net purchase and redemption orders
with the Distributor; (ii) providing customers with a service that invests the
assets of their accounts in Class K Shares pursuant to specific or
pre-authorized instructions; (iii) processing dividend payments on behalf of
Customers; (iv) providing information periodically to Customers showing their
positions in Class K Shares; (v) arranging for bank wires; (vi) responding to
Customer inquiries relating to the services performed by the institutions; (vii)
providing subaccounting with respect to Class K Shares beneficially owned by
Customers or the information necessary for subaccounting; (viii) if required by
law, forwarding shareholder communications from the Company (such as proxies,
shareholder reports, annual and semi-annual financial statements and dividend
distribution and tax notices) to Customers; (ix) forwarding to Customers proxy
statements and proxies containing any proposals regarding the Company's
arrangements with institutions; and (x) providing such other similar services
the Company may reasonably request to the extent the institutions are permitted
to do so under applicable statues, rules and regulations.
Pursuant to the Company's agreements with such institutions, the Board of
Directors will review, at least quarterly, a written report of the amounts
expended under the Company's agreements with institutions and the purposes for
which the expenditures were made. In addition, the arrangements with
institutions must be approved annually by a majority of the Board of Directors
including a majority of the Directors who are not "interested persons" as
defined in the 1940 Act, and have no direct or indirect financial interest in
such arrangements.
The Board of Directors has approved the arrangements with the institutions
based on information provided by the service contractors that there is a
reasonable likelihood that the arrangements will benefit the Fund and its
shareholders by affording the Fund greater flexibility in connection with the
servicing of the accounts of the beneficial owners of their shares in an
efficient manner.
<PAGE>
Administration Agreement. First Data Investor Services Group, Inc. ("First
Data" or the "Administrator") located at 53 State Street, Boston, Massachusetts
02109 serves as administrator for the Company pursuant to an administration
agreement, (the "Administration Agreement"). First Data has agreed to maintain
office facilities for the Company; provide accounting and bookkeeping services
for the Fund, including the computation of the Fund's net asset value, net
income and realized capital gains, if any; furnish statistical and research
data, clerical services, and stationery and office supplies; prepare and file
various reports with the appropriate regulatory agencies; and prepare various
materials required by the SEC or any state securities commission having
jurisdiction over the Company.
The Administration Agreement provides that the Administrator performing
services thereunder shall not be liable under the Agreement except for its
willful misfeasance, bad faith or gross negligence in the performance of its
duties or from the reckless disregard by it of its duties and obligations
thereunder.
Regarding the Administrator's agreement to reimburse the Company in the
event the expenses of the Fund exceed applicable state expense limitations, see
"Investment Advisory and Other Service Arrangements - Advisory Agreement."
Custodian and Transfer Agency Agreements. Comerica Bank (the "Custodian"),
whose principal business address is One Detroit Center, 500 Woodward Avenue,
Detroit, MI 48226, maintains custody of the Fund's assets pursuant to a
custodian agreement ("Custody Agreement") with the Company. Under the Custody
Agreement, the Custodian (i) maintains a separate account in the name of the
Fund, (ii) holds and transfers portfolio securities on account of the Fund,
(iii) accepts receipts and makes disbursements of money on behalf of the Fund,
(iv) collects and receives all income and other payments and distributions on
account of the Fund's securities and (v) makes periodic reports to the Board of
Directors concerning the Fund's operations. The Custodian is authorized to
select one or more domestic or foreign banks or trust companies to serve as
sub-custodian on behalf of the Fund.
First Data also serves as the transfer and dividend disbursing agent for
the Fund pursuant to a transfer agency agreement (the "Transfer Agency
Agreement") with the Company, under which First Data (i) issues and redeems
shares of the Fund, (ii) addresses and mails all communications by the Fund to
its record owners, including reports to shareholders, dividend and distribution
notices and proxy materials for its meetings of shareholders, (iii) maintains
shareholder accounts, (iv) responds to correspondence by shareholders of the
Fund and (v) makes periodic reports to the Board of Directors concerning the
operations of the Fund.
<PAGE>
Regarding the Custodian's and Transfer Agent's agreement to reimburse the
Company in the event the expenses of the Fund exceed applicable state expense
limitations, see "Investment Advisory and Other Service Arrangements - Advisory
Agreement."
Comerica. As stated in the Fund's Class K Shares Prospectus, Class K
Shares of the Fund are sold to customers of banks and other institutions. Such
banks and institutions may include Comerica Incorporated (a publicly-held bank
holding company), its affiliates and subsidiaries ("Comerica") and other
institutions that have entered into agreements with the Company providing for
shareholder services for their customers.
Banking laws and regulations currently prohibit a bank holding company
registered under the Federal Bank Holding Company Act of 1956 or any bank or
non-bank affiliate thereof from sponsoring, organizing, controlling or
distributing the shares of a registered, open-end investment company
continuously engaged in the issuance of its shares, and prohibit banks generally
from underwriting securities, but such banking laws and regulations do not
prohibit such a holding company or affiliate or banks generally from acting as
investment advisor, administrator, transfer agent or custodian to such an
investment company, or from purchasing shares of such a company as agent for and
upon the order of customers. The Advisor and the Custodian are subject to such
banking laws and regulations.
The Advisor and the Custodian believe they may perform the services for
the Company contemplated by their respective agreements with the Company without
violation of applicable banking laws or regulations. It should be noted,
however, that there have been no cases deciding whether bank and non-bank
subsidiaries of a registered bank holding company may perform services
comparable to those that are to be performed by these companies, and future
changes in either Federal or state statutes and regulations relating to
permissible activities of banks and their subsidiaries or affiliates, as well as
future judicial or administrative decisions or interpretations of current and
future statutes and regulations, could prevent these companies from continuing
to perform such service for the Company.
Should future legislative, judicial or administrative action prohibit or
restrict the activities of such companies in connection with the provision of
services on behalf of the Company, the Company might be required to alter
materially or discontinue its arrangements with such companies and change its
method of operations. It is not anticipated, however, that any change in the
Company's method of operations would affect the net asset value per share of the
Fund or result in a financial loss to any shareholder of the Fund.
<PAGE>
It should be noted that future changes in either Federal or state statutes
and regulations relating to permissible activities of banks and their
subsidiaries or affiliates, as well as future judicial or administrative
decisions or interpretations of current and future statutes and regulations,
could prevent Comerica and certain other institutions from continuing to perform
certain services for Class K Shares of the Fund.
Should future legislative, judicial or administrative action prohibit or
restrict the activities of Comerica and/or other institutions in connection with
the provision of services on behalf of Class K Shares of the Fund, the Company
might be required to alter materially or discontinue its arrangements with the
institutions and change its method of operations with respect to Comerica and
certain other institutions. It is not anticipated, however, that any change in
the Fund's method of operations would affect the net asset value per share of
the Fund or result in a financial loss to any holder of Class K Shares of the
Fund.
Other Information Pertaining to Distribution, Administration, Custodian
and Transfer Agency Agreements. As stated in the Prospectuses, the Administrator
and Transfer Agent each receives, as compensation for its services, fees from
the Fund based on the aggregate average daily net assets of the Fund and other
investment portfolios advised by the Advisor. The Custodian receives a separate
fee for its services. In approving the Administration Agreement and Transfer
Agency Agreement, the Board of Directors did consider the services that are to
be provided under their respective agreements, the experience and qualifications
of the respective service contractors, the reasonableness of the fees payable by
the Company in comparison to the charges of competing vendors, the impact of the
fees on the estimated total ordinary operating expense ratio of the Fund and the
fact that neither the Administrator nor the Transfer Agent is affiliated with
the Company or the Advisor. The Board also considered its responsibilities under
federal and state law in approving these agreements.
Comerica Bank provides custodial services to the Fund. As compensation for
its services, Comerica Bank is entitled to receive fees, based on the aggregate
average daily net assets of the Fund and certain other investment portfolios for
which Comerica Bank provides services, computed daily and payable monthly at an
annual rate of 0.03% of the first $100 million of average daily net assets, plus
0.02% of the next $500 million of net assets, plus 0.01% of all net assets in
excess of $600 million. Comerica Bank also receives certain transaction based
fees.
<PAGE>
PORTFOLIO TRANSACTIONS
Subject to the general supervision of the Board Members, the Advisor makes
decisions with respect to and places orders for all purchases and sales of
portfolio securities for the Fund.
Transactions on U.S. stock exchanges involve the payment of negotiated
brokerage commissions. On exchanges on which commissions are negotiated, the
cost of transactions may vary among different brokers. Transactions on foreign
stock exchanges involve payment for brokerage commissions which are generally
fixed.
Over-the-counter issues, including corporate debt and government
securities, are normally traded on a "net" basis (i.e., without commission)
through dealers, or otherwise involve transactions directly with the issuer of
an instrument. With respect to over-the-counter transactions, the Advisor will
normally deal directly with dealers who make a market in the instruments
involved except in those circumstances where more favorable prices and execution
are available elsewhere. The cost of foreign and domestic securities purchased
from underwriters includes an underwriting commission or concession, and the
prices at which securities are purchased from and sold to dealers include a
dealer's mark-up or mark-down.
The Fund may participate, if and when practicable, in bidding for the
purchase of portfolio securities directly from an issuer in order to take
advantage of the lower purchase price available to members of a bidding group.
The Fund will engage in this practice, however, only when the Advisor believes
such practice to be in the Fund's interests.
The portfolio turnover rate of the Fund is calculated by dividing the
lesser of the Fund's annual sales or purchases of portfolio securities
(exclusive of purchases or sales of securities whose maturities at the time of
acquisition were one year or less) by the monthly average value of the
securities held by the Fund during the year. The Fund may engage in short-term
trading to achieve its investment objective. Portfolio turnover may vary greatly
from year to year as well as within a particular year.
In its Advisory Agreements, the Advisor agrees to select broker-dealers in
accordance with guidelines established by the Company's Board of Directors from
time to time and in accordance with applicable law. In assessing the terms
available for any transaction, the Advisor shall consider all factors it deems
relevant, including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker-dealer,
and the reasonableness of the commission, if any, both for the
<PAGE>
specific transaction and on a continuing basis. In addition, the Advisory
Agreements authorize the Advisor, subject to the prior approval of the Company's
Board of Directors, to cause the Fund to pay a broker-dealer which furnishes
brokerage and research services a higher commission than that which might be
charged by another broker-dealer for effecting the same transaction, provided
that the Advisor determines in good faith that such commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker-dealer, viewed in terms of either the particular transaction or the
overall responsibilities of the Advisor to the Fund. Such brokerage and research
services might consist of reports and statistics on specific companies or
industries, general summaries of groups of bonds and their comparative earnings
and yields, or broad overviews of the securities markets and the economy.
Supplementary research information so received is in addition to, and not
in lieu of, services required to be performed by the Advisor and does not reduce
the advisory fees payable to the Advisor by the Fund. It is possible that
certain of the supplementary research or other services received will primarily
benefit one or more other investment companies or other accounts for which
investment discretion is exercised. Conversely, the Fund may be the primary
beneficiary of the research or services received as a result of portfolio
transactions effected for such other account or investment company.
Portfolio securities will not be purchased from or sold to the Advisor,
the Distributor or any affiliated person (as defined in the 1940 Act) of the
foregoing entities except to the extent permitted by SEC exemptive order or by
applicable law.
Investment decisions for the Fund and for other investment accounts
managed by the Advisor are made independently of each other in the light of
differing conditions. However, the same investment decision may be made for two
or more of such accounts. In such cases, simultaneous transactions are
inevitable. Purchases or sales are then averaged as to price and allocated as to
amount in a manner deemed equitable to each such account. While in some cases
this practice could have a detrimental effect on the price or value of the
security as far as the Fund is concerned, in other cases it is believed to be
beneficial to the Fund. To the extent permitted by law, the Advisor may
aggregate the securities to be sold or purchased for the Fund with those to be
sold or purchased for other investment companies or accounts in executing
transactions.
The Fund will not purchase securities during the existence of any
underwriting or selling group relating to such securities of which the Advisor
or any affiliated person
<PAGE>
(as defined in the 1940 Act) thereof is a member except pursuant to procedures
adopted by the Company's Board of Directors in accordance with Rule 10f-3 under
the 1940 Act.
Except as noted in the Prospectuses and this Statement of Additional
Information the Fund's service contractors bear all expenses in connection with
the performance of its services and the Fund bears the expenses incurred in its
operations. 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 investment portfolio of the Company are allocated among all
investment portfolios of the Company by or under the direction of the Board of
Directors in a manner that the Board of Directors determines to be fair and
equitable. The Advisor, Administrator, Custodian and Transfer Agent may
voluntarily waive all or a portion of their respective fees from time to time.
PURCHASE AND REDEMPTION INFORMATION
Purchases and redemptions are discussed in the Fund's Prospectuses and
such information is incorporated herein by reference.
Purchases. In addition to the methods of purchasing shares described in
each Prospectus, the Fund also offers a pre-authorized checking plan by which
investors may accumulate shares of the Fund regularly each month by means of
automatic debits to their checking accounts. There is a $50 minimum on each
automatic debit. Shareholders may choose this option by checking the appropriate
part of the application form or by calling the Fund at (800) 438-5789. Such a
plan is voluntary and may be discontinued by the shareholder at any time or by
the Company on 30 days' written notice to the shareholder.
Letter of Intent. Purchasers who intend to invest $100,000 or more in
Class A Shares of the Fund within 13 months (whether in one lump sum or in
installments the first of which may not be less than 5% of the total intended
amount and each subsequent installment not less than $100, including
<PAGE>
automatic investment and payroll deduction plans), and to beneficially hold the
total amount of such shares fully paid for and outstanding simultaneously for at
least one full business day before the expiration of that period, should
complete the Letter of Intent ("LOI") section in the Application. Payment for
not less than 5% of the total intended amount must accompany the executed LOI.
Those shares purchased with the first 5% of the intended amount stated in the
LOI will be held as "escrowed shares" for as long as the LOI remains
unfulfilled. Although the escrowed shares are registered in the investor's name,
his full ownership of them is conditional upon fulfillment of the LOI. No
escrowed shares can be redeemed by the investor for any purpose until the LOI is
fulfilled or terminated. If the LOI is terminated for any reason other than
fulfillment, the Transfer Agent will redeem that portion of the escrowed shares
required and apply the proceeds to pay any adjustment that may be appropriate to
the sales commission on all shares (including the escrowed shares) already
purchased under the LOI and apply any unused balance to the investor's account.
The LOI is not a binding obligation to purchase any amount of shares, but its
execution will result in the purchaser paying a lower sales charge at the
appropriate quantity purchase level. A purchase not originally made pursuant to
an LOI may be included under a subsequent LOI executed within 90 days of such
purchase. In this case, an adjustment will be made at the end of 13 months from
the effective date of the LOI at the net asset value per share then in effect,
unless the investor makes an earlier written request to the Funds' Distributor
upon fulfilling the purchase of Shares under the LOI. In addition, the aggregate
value of any shares purchased prior to the 90-day period referred to above may
be applied to purchases under a current LOI in fulfilling the total intended
purchases under the LOI. However, no adjustment of sales charge previously paid
on purchases prior to the 90-day period will be made. Shares acquired through
reinvestment of dividends and capital gain distributions are considered in
connection with an investor's fulfillment of the LOI.
Retirement Plans. Shares of the Fund may be purchased in connection with
various types of tax deferred retirement plans, including individual retirement
accounts ("IRAs"), qualified plans, deferred compensation for public schools and
charitable organizations (403(b) plans) and simplified employee pension IRAs. An
individual or organization considering the establishment of a retirement plan
should consult with an attorney and/or an accountant with respect to the terms
and tax aspects of the plan. A $10.00 annual custodial fee is also charged on
IRAs. This custodial fee is due by December 15 of each year and may be paid by
check or shares liquidated from a shareholder's account.
<PAGE>
Redemptions
Systematic Withdrawals. In addition to the methods of redemption described
in each Prospectus, a systematic withdrawal plan is available in which a
shareholder of the Fund may elect to receive a fixed amount ($50 minimum),
monthly, quarterly, semi-annually, or annually, for accounts with a value of
$2,500 or more. Checks are mailed on or about the 10th of each designated month.
All certified shares must be placed on deposit under the plan and dividends and
capital gain distributions, if any, are automatically reinvested at net asset
value for shareholders participating in the plan. If the checks received by a
shareholder through the systematic withdrawal plan exceed the dividends and
capital appreciation of the shareholder's account, the systematic withdrawal
plan will have the effect of reducing the value of the account. Any gains and/or
losses realized from redemptions through the systematic withdrawal plan are
considered a taxable event by the Internal Revenue Service and must be reported
on the shareholders' income tax return. Shareholders should consult with a tax
advisor for information on their specific financial situations. At the time of
initial investment, a shareholder may request that the check for the systematic
withdrawal be sent to an address other than the address of record. The address
to which the payment is mailed may be changed by submitting a written request,
signed by all registered owners, with their signatures guaranteed. Shareholders
may add this option after the account is already established or change the
amount on an existing account by calling the Fund at (800) 438-5789. The Fund
may terminate the plan on 30 days' written notice to the shareholder.
Other Information. The Fund reserves the right to suspend or postpone
redemptions during any period when: (i) trading on the New York Stock Exchange
is restricted, as determined by the SEC, or the New York Stock Exchange is
closed for other than customary weekend and holiday closings; (ii) the SEC has
by order permitted such suspension or postponement for the protection of
shareholders; or (iii) an emergency, as determined by the SEC, exists, making
disposal of portfolio securities or valuation of net assets of the Fund not
reasonably practicable.
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. A notice
of redemption, sent by first-class mail to the investor's address of record,
will fix a date not less than 30 days after the mailing date, and shares will be
redeemed at the net asset value at the close of business on that date unless
sufficient additional shares are purchased to bring the aggregate account value
up to $500 or more. A check for the redemption proceeds payable to the investor
will be mailed to the investor at the address
<PAGE>
of record.
Redemption proceeds are normally paid in cash; however, the Fund may pay
the redemption price in whole or part by a distribution in kind of securities
from the portfolio of the Fund, in lieu of cash, in conformity with applicable
rules of the SEC. If shares are redeemed in kind, the redeeming Shareholder
might incur transaction costs in converting the assets into cash. The Fund is
obligated to redeem Shares solely in cash up to the lesser of $250,000 or 1% of
its net assets during any 90-day period for any one Shareholder.
Exchanges. In addition to the method of exchanging shares described in the
Fund's Prospectuses, a shareholder exchanging at least $1,000 of shares (for
which certificates have been issued) and who has authorized expedited exchanges
on the application form filed with the Transfer Agent may exchange shares by
telephoning the Fund at (800) 438-5789. Telephone exchange instructions must be
received by the Transfer Agent by 4:00 p.m., New York City time. The Fund,
Distributor and Transfer Agent reserve the right at any time to suspend or
terminate the expedited exchange 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 exchanges. Neither the
Fund nor the Transfer Agent will be responsible for any loss, damages, expense
or cost arising out of any telephone exchanges effected upon instructions
believed by them to be genuine. The Transfer Agent has instituted procedures
that it believes are reasonably designed to insure that exchange 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.
NET ASSET VALUE
In determining the approximate market value of portfolio investments, the
Company may employ outside organizations, which may use matrix or formula
methods that take into consideration market indices, matrices, yield curves and
other specific adjustments. This may result in the securities being valued at a
price different from the price that would have been determined had the matrix or
formula methods not been used. All cash, receivables and current payables are
carried on the Company's books at their face value. Other assets, if any, are
valued at fair value as determined in good faith under the supervision of the
Board of Directors.
<PAGE>
In-Kind Purchases
Payment for shares may, in the discretion of the Advisor, be made in the
form of securities that are permissible investments for the Fund as described in
each Prospectus. For further information about this form of payment please
contact the Transfer Agent. In connection with an in-kind securities payment,
the Fund will require, among other things, that the securities (a) meet the
investment objectives and policies of the Fund; (b) are acquired for investment
and not for resale; (c) are liquid securities that are not restricted as to
transfer either by law or liquidity of markets; (d) have a value that is readily
ascertainable; and (e) are valued on the day of purchase in accordance with the
pricing methods used by the Fund and that the Fund receive satisfactory
assurances that (i) it will have good and marketable title to the securities
received by it; (ii) that the securities are in proper form for transfer to the
Fund; and (iii) adequate information will be provided concerning the basis and
other tax matters relating to the securities.
PERFORMANCE INFORMATION
The Fund may, from time to time, include information regarding its yield
or total return in advertisements, sales literature, or reports to shareholders
or prospective investors.
The Fund's 30-day (or one month) standard yield described in each
Prospectus is calculated for the Fund in accordance with the method prescribed
by the SEC for mutual funds:
a - b
YIELD = 2[(--------)6 - 1]
cd+1
Where: a = dividends and interest earned by a Fund during
the period;
b = expenses accrued for the period (net of
reimbursements);
c = average daily number of shares outstanding
during the period entitled to receive
dividends; and
d = maximum offering price per share on the last
day of the period.
For the purpose of determining interest earned on debt obligations
purchased by the Fund at a discount or premium (variable "a" in the formula),
the Fund computes the yield to maturity of such instrument based on the market
value of the
<PAGE>
obligation (including actual accrued interest) at the close of business on the
last business day of each month, or, with respect to obligations purchased
during the month, the purchase price (plus actual accrued interest). Such yield
is then divided by 360 and the quotient is multiplied by the market value of the
obligation (including actual accrued interest) in order to determine the
interest income on the obligation for each day of the subsequent month that the
obligation is in the portfolio. It is assumed in the above calculation that each
month contains 30 days. The maturity of a debt obligation with a call provision
is deemed to be the next call date on which the obligation reasonably may be
expected to be called or, if none, the maturity date. For the purpose of
computing yield on equity securities held by the Fund, dividend income is
recognized by accruing 1/360 of the stated dividend rate of the security for
each day that the security is held by the Fund.
Interest earned on tax-exempt obligations that are issued without original
issue discount and have a current market discount is calculated by using the
coupon rate of interest instead of the yield to maturity. In the case of
tax-exempt obligations that are issued with original issue discount but which
have discounts based on current market value that exceed the then-remaining
portion of the original issue discount (market discount), the yield to maturity
is the imputed rate based on the original issue discount calculation. On the
other hand, in the case of tax-exempt obligations that are issued with original
issue discount but which have the discount based on current market value that
are less than the then-remaining portion of the original issue discount (market
premium), the yield to maturity is based on the market value.
With respect to mortgage or other receivables-backed debt obligations
purchased at a discount or premium, the formula generally calls for amortization
of the discount or premium. The amortization schedule will be adjusted monthly
to reflect changes in the market value of such debt obligations. Expenses
accrued for the period (variable "b" in the formula) include all recurring fees
charged by the Fund to all shareholder accounts in proportion to the length of
the base period and the Fund's mean (or median) account size. Undeclared earned
income will be subtracted from the offering price per share (variable "d" in the
formula). The Fund's maximum offering price per share for purposes of the
formula includes the maximum sales charge imposed -- currently 4.00% of the per
share offering price for Class A Shares of the Fund.
The Fund may advertise its "average annual total return" and will compute
such return by determining the average annual compounded rate of return during
specified periods that equates the initial amount invested to the ending
redeemable value of such investment according to the following formula:
<PAGE>
P = (1 + T)n = ERV
Where: T = average annual total return;
ERV = ending redeemable value of a hypothetical
$1,000
payment made at the beginning of the 1, 5,
or 10 year (or other) periods at the end
of the applicable period (or a fractional
portion thereof);
P = hypothetical initial payment of $1,000;
and
n = period covered by the computation,
expressed in years.
The Fund may advertise its "aggregate total return" and will compute such
return by determining the aggregate compounded rates of return during specified
periods that likewise equate the initial amount invested to the ending
redeemable value of such investment. The formula for calculating aggregate total
return is as follows:
(ERV) - 1
Aggregate Total Return = P
The calculations are made assuming that (1) all dividends and capital gain
distributions are reinvested on the reinvestment dates at the price per share
existing on the reinvestment date, (2) all recurring fees charged to all
shareholder accounts are included, and (3) for any account fees that vary with
the size of the account, a mean (or median) account size in the Fund during the
periods is reflected. The ending redeemable value (variable "ERV" in the
formula) is determined by assuming complete redemption of the hypothetical
investment after deduction of all non-recurring charges at the end of the
measuring period. The Fund's average annual total return and aggregate total
return quotations for Class A Shares will reflect the deduction of the maximum
sales charge charged in connection with the purchase of such shares; and the
Fund's average annual total return and aggregate total return quotations for
Class B Shares will reflect any applicable CDSC; provided that Fund may also
advertise total return data without reflecting any applicable CDSC sales charge
imposed on the purchase of Class A Shares or Class B Shares in accordance with
the views of the SEC. Quotations which do not reflect the sales charge will, of
course, be higher than quotations which do.
The performance of any investment is generally a function of portfolio
quality and maturity, type of investment and operating expenses.
<PAGE>
From time to time, in advertisements or in reports to shareholders, the
Fund's yields or total returns may be quoted and compared to those of other
mutual funds with similar investment objectives and to stock or other relevant
indices. For example, the Fund's yield may be compared to the IBC/Donoghue's
Money Fund Average, which is an average compiled by Donoghue's MONEY FUND REPORT
of Holliston, MA 01746, a widely recognized independent publication that
monitors the performance of money market funds, or to the data prepared by
Lipper Analytical Services, Inc., a widely recognized independent service that
monitors the performance of mutual funds. In addition, as stated in the Fund's
Prospectuses, the tax-equivalent yield (and hypothetical examples illustrating
the effect of tax-equivalent yields) of the Fund may be quoted in advertisements
or reports to shareholders. Hypothetical examples showing the difference between
a taxable and a tax-free investment may also be provided to shareholders.
TAXES
The following summarizes certain additional tax considerations generally
affecting the Fund and its shareholders that are not described in the Fund's
Prospectuses. No attempt is made to present a detailed explanation of the tax
treatment of the Fund or its shareholders, and the discussion here and in the
Prospectuses is not intended as a substitute for careful tax planning. Potential
investors should consult their tax Advisors with specific reference to their own
tax situations.
General. The Fund will elect to be taxed separately as a regulated
investment company under Subchapter M, of the Internal Revenue Code of 1986, as
amended (the "Code"). As a regulated investment company, the Fund generally is
exempt from Federal income tax on its net investment income and realized capital
gains which it distributes to shareholders, provided that it distributes an
amount equal to the sum of (a) at least 90% of its investment company taxable
income (net investment income and the excess of net short-term capital gain over
net long-term capital loss), if any, for the year and (b) at least 90% of its
net tax-exempt interest income, if any, for the year (the "Distribution
Requirement") and satisfies certain other requirements of the Code that are
described below. Distributions of investment company taxable income and net
tax-exempt interest income made during the taxable year or, under specified
circumstances, within twelve months after the close of the taxable year will
satisfy the Distribution Requirement.
In addition to satisfaction of the Distribution Requirement, the Fund must
derive with respect to a taxable year at least 90% of its gross income from
dividends,
<PAGE>
interest, certain payments with respect to securities loans and gains from the
sale or other disposition of stock or securities or foreign currencies, or from
other income derived with respect to its business of investing in such stock,
securities, or currencies (the "Income Requirement") and derive less than 30% of
its gross income from the sale or other disposition of securities and certain
other investments held for less than three months (the "Short-Short Gain Test").
Interest (including original issue discount and "accrued market discount")
received by the Fund at maturity or on disposition of a security held for less
than three months will not be treated (in contrast to other income which is
attributable to realized market appreciation) as gross income from the sale or
other disposition of securities held for less than three months for this
purpose.
In addition to the foregoing requirements, at the close of each quarter of
its taxable year, at least 50% of the value of the Fund's assets must consist of
cash and cash items, U.S. Government securities, securities of other regulated
investment companies, and securities of other issuers (as to which the Fund has
not invested more than 5% of the value of its total assets in securities of such
issuer and as to which the Fund does not hold more than 10% of the outstanding
voting securities of such issuer) and no more than 25% of the value of the
Fund's total assets may be invested in the securities of any one issuer (other
than U.S. Government securities and securities of other regulated investment
companies), or in two or more issuers which the Fund controls and which are
engaged in the same or similar trades or businesses.
Distributions of net investment income received by the Fund from
investments in debt securities and any net realized short-term capital gains
distributed by the Fund will be taxable to shareholders as ordinary income and
will not be eligible for the dividends received deduction for corporations.
The Fund intends to distribute to shareholders any excess of net long-term
capital gain over net short-term capital loss ("net capital gain") for each
taxable year. Such gain is distributed as a capital gain dividend and is taxable
to shareholders as long-term capital gain, regardless of the length of time the
shareholder has held the shares, whether such gain was recognized by the Fund
prior to the date on which a shareholder acquired shares of the Fund and whether
the distribution was paid in cash or reinvested in shares. In addition,
investors should be aware that any loss realized upon the sale, exchange or
redemption of shares held for six months or less will be treated as a long-term
capital loss to the extent any capital gain dividends have been paid with
respect to such shares. Capital gain dividends are not eligible for the
dividends received deduction for corporations.
<PAGE>
Ordinary income of individuals is taxable at a maximum nominal rate of
39.6%, although because of limitations on itemized deductions otherwise
allowable and the phase-out of personal exemptions, the maximum effective
marginal rate of tax for some taxpayers may be higher. An individual's long-term
capital gains are taxable at a maximum rate of 28%. Capital gains and ordinary
income of corporate taxpayers are both taxed at a nominal maximum rate of 35%.
If for any taxable year the Fund does not qualify as a regulated
investment company, all of its taxable income will be subject to tax at regular
corporate rates without any deduction for distributions to shareholders. In such
event, all distributions (whether or not derived from exempt-interest income)
would be taxable as ordinary income and would be eligible for the dividends
received deduction in the case of corporate shareholders to the extent of the
Fund's current and accumulated earnings and profits.
Shareholders will be advised annually as to the Federal income tax
consequences of distributions made by the Fund each year.
The Code imposes a non-deductible 4% excise tax on regulated investment
companies that fail to currently distribute an amount equal to specified
percentages of their ordinary taxable income and capital gain net income (excess
of capital gains over capital losses). The Fund intends to make sufficient
distributions or deemed distributions of its ordinary taxable income and capital
gain net income each calendar year to avoid liability for this excise tax.
The Company will be required in certain cases to withhold and remit to the
United States Treasury 31% of taxable dividends or 31% of gross proceeds
realized upon sale paid to any shareholder (i) who has provided either an
incorrect tax identification number or no number at all, (ii) who is subject to
backup withholding by the Internal Revenue Service for failure to report the
receipt of taxable interest or dividend income properly, or (iii) who has failed
to certify to the Company that he is not subject to backup withholding or that
he is an "exempt recipient."
The foregoing general discussion of Federal income tax consequences is
based on the Code and the regulations issued thereunder as in effect on the date
of this Statement of Additional Information. Future legislative or
administrative changes or court decisions may significantly change the
conclusions expressed herein, and any such changes or decisions may have a
retroactive effect with respect to the transactions contemplated herein.
Although the Fund expects to qualify as a "regulated
investment company" and to be relieved of all or substantially
<PAGE>
all Federal income taxes, depending upon the extent of its activities in states
and localities in which its offices are maintained, in which its agents or
independent contractors are located or in which it is otherwise deemed to be
conducting business, the Fund may be subject to the tax laws of such states or
localities.
Certain debt instruments acquired by the Fund may include "original issue
discount" or "market discount". As a result, the Fund may be deemed under tax
law rules to have earned discount income in taxable periods in which it does not
actually receive any payments on the particular debt instruments involved. This
income, however, will be subject to the Distribution Requirements and must also
be distributed in accordance with the excise tax distribution rules discussed
above, which may cause the Fund to have to borrow or liquidate securities to
generate cash in order to timely meet these requirements (even though such
borrowing or liquidating securities at that time may be detrimental from the
standpoint of optimal portfolio management). Gain from the sale of a debt
instrument having market discount may be treated for tax purposes as ordinary
income to the extent that market discount accrued during the Fund's ownership of
that instrument.
The Fund may be subject to U.S. Federal income tax on a portion of any
"excess distribution" or a gain from the distribution of passive foreign
investment companies.
ADDITIONAL INFORMATION CONCERNING SHARES
The Company is a Maryland corporation. The Company's Articles of
Incorporation authorize the Board of Directors to classify or reclassify any
unissued shares of the Company into one or more classes by setting or changing,
in any one or more respects, their respective designations, preferences,
conversion or other rights, voting powers, restrictions, limitations,
qualifications and terms and conditions of redemption. Pursuant to the authority
of the Company's Articles of Incorporation, 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 Munder Money Market Fund, the Munder Small-Cap Value Fund, The Munder
Equity Selection Fund, The Munder Micro-Cap Equity Fund, and the NetNet Fund,
respectively. The Shares of each Fund (other than the Money Market Fund) are
offered in five separate classes: Class A, Class B, Class C, Class K and Class Y
Shares. The Money Market Fund offers only Class A, Class B and Class C Shares
(which may be acquired only through an exchange of shares from the corresponding
classes of other Funds of the Company and the Munder Funds Trust) and Class Y
Shares.
<PAGE>
In the event of a liquidation or dissolution of the Company or the Fund,
shareholders of the Fund would be entitled to receive the assets available for
distribution belonging to the Fund, and a proportionate distribution, based upon
the relative net asset value of the Fund, of any general assets not belonging to
the Fund which are available for distribution. Shareholders of the Fund are
entitled to participate in the net distributable assets of the Fund, based on
the number of shares of the Fund that are held by each shareholder.
Holders of all outstanding shares of the Fund will vote together in the
aggregate and not by class on all matters, except that only Class A Shares of
the Fund will be entitled to vote on matters submitted to a vote of shareholders
pertaining to the Fund's Class A Plan, only Class B Shares will be entitled to
vote on matters submitted to a vote of shareholders pertaining to the Fund's
Class B Plan, only Class C Shares of the Fund will be entitled to vote on
matters submitted to a vote of shareholders pertaining to the Fund's Class C
Plan, and only Class K Shares of the Fund will be entitled to vote on matters
submitted to a vote of shareholders pertaining to the Class K Plan.
Shareholders of the Fund, as well as those of any other investment
portfolio now or hereafter offered by the Company, will vote together in the
aggregate and not separately on a Fund-by-Fund basis, except as otherwise
required by law or when permitted by the Boards of Directors. Rule 18f-2 under
the 1940 Act provides that any matter required to be submitted to the holders of
the outstanding voting securities of an investment company such as the Company
shall not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding shares of each Fund affected by the
matter. The Fund is affected by a matter unless it is clear that the interests
of the Fund in the matter are substantially identical to the interests of other
portfolios of the Company or that the matter does not affect any interest of the
Fund. Under the Rule, the approval of an investment advisory agreement or any
change in a Fundamental investment policy would be effectively acted upon with
respect to the Fund only if approved by a majority of the outstanding shares of
the Fund. However, the Rule also provides that the ratification of the
appointment of independent auditors, the approval of principal underwriting
contracts and the election of trustees may be effectively acted upon by
shareholders of the Company voting together in the aggregate without regard to a
particular portfolio.
Shares of the Company have noncumulative voting rights and, accordingly,
the holders of more than 50% of the Company's outstanding shares may elect all
of the directors. Shares have no preemptive rights and only such conversion and
exchange rights as the Board may grant in its discretion.
<PAGE>
When issued for payment as described in the Prospectuses, shares will be fully
paid and non-assessable by the Company.
Shareholder meetings to elect directors will not be held unless and until
such time as required by law. At that time, the directors then in office will
call a shareholders' meeting to elect directors. Except as set forth above, the
directors will continue to hold office and may appoint successor directors.
Meetings of the shareholders of the Company shall be called by the directors
upon the written request of shareholders owning at least 10% of the outstanding
shares entitled to vote.
MISCELLANEOUS
Counsel. The law firm of Dechert Price & Rhoads, 1500 K Street, N.W.,
Washington, DC 20005, has passed upon certain legal matters in connection with
the shares offered by the Fund and serves as counsel to the Company.
Independent Auditors. Ernst & Young LLP, serves as the
Company's independent auditors.
Shareholder Approvals. As used in this Statement of Additional Information
and in the Prospectuses, a "majority of the outstanding shares" of the Fund
means the lesser of (a) 67% of the shares of the Fund represented at a meeting
at which the holders of more than 50% of the outstanding shares of the Fund are
present in person or by proxy, or (b) more than 50% of the outstanding shares of
the Fund.
REGISTRATION STATEMENT
This Statement of Additional Information and the Fund's Prospectuses do
not contain all the information included in the Fund's registration statement
filed with the SEC under the 1933 Act with respect to the securities offered
hereby, certain portions of which have been omitted pursuant to the rules and
regulations of the SEC. The registration statement, including the exhibits filed
therewith, may be examined at the offices of the SEC in Washington, D.C.
Statements contained herein and in the Fund's Prospectuses as to the
contents of any contract or other documents referred to are not necessarily
complete, and, in such instance, reference is made to the copy of such contract
or other documents filed as an exhibit to the Fund's registration statement,
each such statement being qualified in all respect by such reference.
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
---------------------------------
(a) Audited financial Statements as of June 30, 1995 are incorporated by
reference from the Annual Report for the fiscal period ended June
30, 1995 and include the following:
Auditor's Report
Financial Highlights
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Notes to the Financial Statements
Unaudited Financial Statements as of December 31, 1995 are
incorporated by reference from the SemiAnnual Report dated December
31, 1995 and include
the following:
Financial Highlights
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
No financial statements are incorporated in Part A or Part B for The
Munder Short Term Treasury Fund.
(b) Exhibits (the number of each exhibit relates to the exhibit
designation in Form N-1A):
(1) (a) Articles of Incorporation14
(b) Articles of Amendment14
(c) Articles Supplementary14
(d) Articles Supplementary for The Munder
Small-Cap Value Fund, The Munder Equity
Selection Fund, The Munder Micro-Cap
Equity Fund, The NetNet Fund and The
Munder Short Term Treasury Fund*
(2) By-Laws1
(3) Not Applicable
(4) Specimen security for The Munder Multi-
Season Growth Fund2
<PAGE>
(5) (a) Form of Investment Advisory Agreement for
The Munder Multi-Season Growth Fund7
(b) Form of Investment Advisory Agreement for
The Munder Money Market Fund7
(c) Form of Investment Advisory Agreement for
The Munder Real Estate Equity Investment
Fund7
(d) Form of Investment Advisory Agreement for
The Munder Value Fund12
(e) Form of Investment Advisory Agreement for
The Munder Mid-Cap Growth Fund12
(f) Form of Investment Advisory Agreement for
The Munder International Bond Fund14
(g) Form of Investment Advisory Agreement for
The NetNet Fund13
(h) Form of Investment Advisory Agreement for
The Munder Small-Cap Value Fund14
(i) Form of Investment Advisory Agreement for
The Munder Micro-Cap Equity Fund14
(j) Form of Investment Advisory Agreement for
The Munder Equity Selection Fund14
(k) Form of Investment Advisory Agreement for
The Munder Short Term Treasury Fund*
(6) (a) Form of Underwriting Agreement12
(b) Notice to Underwriting Agreement with
respect to The Munder Value Fund and The
Munder Mid-Cap Growth Fund12
(c) Notice to Underwriting Agreement with
respect to The Munder International Bond
Fund12
(d) Notice to Underwriting Agreement with
respect to The Munder Small-Cap Value
Fund, The Munder Equity Selection Fund,
The Munder Micro-Cap Equity Fund, The
Munder Short Term Treasury Fund and The
NetNet Fund14
(7) Not Applicable
(8) (a) Form of Custodian Contract12
<PAGE>
(b) Notice to Custodian Contract with respect
to The Munder Value Fund and The Munder
Mid-Cap Growth Fund12
(c) Notice to Custodian Contract with respect
to The Munder International Bond Fund12
(d) Notice to Custodian Contract with respect
to The Munder Small-Cap Value Fund, The
Munder Equity Selection Fund, The Munder
Micro-Cap Equity Fund and The NetNet
Fund14
(e) Notice to Custodian Contract with respect
to The Munder Short Term Treasury Fund*
(f) Form of Subcustodian Agreement*
(g) Notice to Subcustody Agreement with respect to The
Munder International Bond Fund, The Munder Small-Cap
Value Fund, The Munder Equity Selection Fund, The Munder
Micro-Cap Equity Fund, The NetNet Fund and The Munder
Short Term Treasury Fund*
(9) (a) Transfer Agency and Service Agreement12
(b) Notice to Transfer Agency and Service
Agreement with respect to The Munder
Value Fund and The Munder Mid-Cap Growth
Fund12
(c) Notice to Transfer Agency and Service
Agreement with respect to The Munder
International Bond Fund12
(d) Notice to Transfer Agency and Service
Agreement with respect to The Munder
Small-Cap Value Fund, The Munder Equity
Selection Fund, The Munder Micro-Cap
Equity Fund and The NetNet Fund14
(e) Notice to Transfer Agency and Service
Agreement with respect to The Munder Short
Term Treasury Fund*
(f) Administration Agreement12
(g) Notice to Administration Agreement with
respect to The Munder Value and The Munder
Mid-Cap Growth Fund12
<PAGE>
(h) Notice to Administration Agreement with
respect to The Munder International Bond
Fund12
(i) Notice to Administration Agreement with
respect to The Munder Small-Cap Value
Fund, The Munder Equity Selection Fund,
The Munder Micro-Cap Equity Fund and The
NetNet Fund14
(j) Notice to Administration Agreement with
respect to The Munder Short Term Treasury
Fund*
(10) (a) Opinion and Consent of Counsel with
respect to The Munder Multi-Season Growth
Fund2
(b) Opinion and Consent of Counsel with
respect to The Munder Money Market Fund5
(c) Opinion and Consent of Counsel with
respect to The Munder Real Estate Equity
Investment Fund4
(d) Opinion and Consent of Counsel with
respect to The Munder Value Fund and The
Munder Mid-Cap Growth Fund12
(e) Opinion and Consent of Counsel with
respect to The Munder International Bond
Fund12
(f) Opinion and Consent of Counsel with
respect to The NetNet Fund 13
(g) Opinion and Consent of Counsel with
respect to The Munder Small-Cap Value
Fund, the Munder Equity Selection Fund,
The Munder Micro-Cap Equity Fund and The
Munder Short Term Treasury Fund*
(11) (a) Consent of Dechert Price & Rhoads11
(b) Consent of Ernst & Young LLP*
(c) Consent of Arthur Andersen LLP11
(d) Letter of Arthur Andersen LLP regarding
change in independent auditor required by
Item 304 of Regulation S-K.11
(e) Powers of Attorney13
<PAGE>
(12) Not Applicable
(13) Initial Capital Agreement2
(14) Not Applicable
(15) (a) Service Plan for The Munder Multi-Season
Growth Fund Class A Shares7
(b) Service and Distribution Plan for The
Munder Multi-Season Growth Fund Class B
Shares7
(c) Service and Distribution Plan for The
Munder Multi-Season Growth Fund Class D
Shares7
(d) Service Plan for The Munder Money Market
Fund Class A Shares7
(e) Service and Distribution Plan for The
Munder Money Market Fund Class B Shares7
(f) Service and Distribution Plan for The
Munder Money Market Fund Class D Shares7
(g) Service Plan for The Munder Real Estate
Equity Investment Fund Class A Shares7
(h) Service and Distribution Plan for The
Munder Real Estate Equity Investment Fund
Class B Shares7
(i) Service and Distribution Plan for The
Munder Real Estate Equity Investment Fund
Class D Shares7
(j) Form of Service Plan for The Munder Multi-
Season Growth Fund Investor Shares8
(k) Form of Service Plan for Class K Shares of
The Munder Funds, Inc.14
(l) Form of Service Plan for Class A Shares of
The Munder Funds, Inc.14
(m) Form of Distribution and Service Plan for
Class B Shares of The Munder Funds, Inc.14
(n) Form of Distribution and Service Plan for
Class C Shares of The Munder Funds, Inc.14
(o) Form of Distribution and Service Plan for
The NetNet Fund13
<PAGE>
(16) Schedule for Computation of Performance
Quotations6
(17) Financial Data Schedules*
(18) Multi-Class Plan8
- --------------------------------
* To be filed by Amendment
- --------------------------------
1. Filed in Registrant's initial Registration Statement on
November 18, 1992 and incorporated by reference herein.
2. Filed in Pre-Effective Amendment No. 2 to the
Registrant's Registration Statement on February 26, 1993
and incorporated by reference herein.
3. Filed in Post-Effective Amendment No. 3 to the
Registrant's Registration Statement on July 28, 1993 and
incorporated by reference herein.
4. Filed in Post-Effective Amendment No. 7 to the
Registrant's Registration Statement on August 26, 1994
and incorporated by reference herein.
5. Filed in Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on July 9, 1993 and
incorporated by reference herein.
6. Filed in Post-Effective Amendment No. 5 to the
Registrant's Registration Statement on March 28, 1994 and
incorporated by reference herein.
7. Filed in Post-Effective Amendment No. 8 to the
Registrant's Registration Statement on February 28, 1995
and incorporated by reference herein.
8. Filed in Post-Effective Amendment No. 9 to the
Registrant's Registration Statement on April 13, 1995 and
incorporated by reference herein.
9. Filed in Post-Effective Amendment No. 10 to the
Registrant's Registration Statement on May 2, 1995 and
incorporated by reference herein.
10. Filed in Post-Effective Amendment No. 11 to the
Registrant's Registration Statement on May 31, 1995 and
incorporated by reference herein.
11. Filed in Post-Effective Amendment No. 12 to the
Registrant's Registration Statement on August 29, 1995
and incorporated by reference herein.
<PAGE>
12. Filed in Post-Effective Amendment No. 16 to the
Registrant's Registration Statement on June 25, 1996 and
incorporated by reference herein.
13. Filed in Post-Effective Amendment No. 17 to the
Registrant's Registration Statement on August 9, 1996 and
incorporated by reference herein.
14. Filed in Post-Effective Amendment No. 18 to the
Registrant's Registration Statement on August 14, 1996
and incorporated by reference herein.
Item 25. Persons Controlled by or Under Common Control with
Registrant.
--------------------------------------------------
Not Applicable.
Item 26. Number of Holders of Securities.
-------------------------------
As of September 27, 1996, the number of shareholders of record of
each Class of shares of each Series of the Registrant that was offered as of
that date was as follows:
<TABLE>
<S> <C> <C> <C> <C> <C>
Class A Class B Class C Class K Class Y
------------------------------------------------------
The Munder Multi-Season Growth Fund 385 1619 18 141 101
The Munder Money Market Fund 6 8 1 0 101
The Munder Real Estate Equity 14 9 4 1 68
Investment Fund
The Munder Mid-Cap Growth Fund 8 19 3 1 23
The Munder Value Fund 5 16 1 2 27
</TABLE>
Item 27. Indemnification.
---------------
Reference is made to Article 7.6 in the Registrant's Articles of
Incorporation, which are incorporated by reference herein.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers and
controlling persons of the Registrant by the Registrant pursuant to the Fund's
Articles of Incorporation, its By-Laws or otherwise, the Registrant is aware
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as
<PAGE>
expressed in the Act and, therefore, is unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by directors, officers or controlling
persons of the Registrant in connection with the successful defense of any act,
suit or proceeding) is asserted by such directors, officers or controlling
persons in connection with shares being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issues.
Item 28. Business and Other Connections of Investment
Adviser.
----------------------------------------------------
Munder Capital Management
-------------------------
Position
Name with Adviser
- ---- ------------
Old MCM, Inc. Partner
Munder Group LLC Partner
WAM Holdings, Inc. Partner
Woodbridge Capital Management, Inc. Partner
Lee P. Munder President and Chief
Executive Officer
Leonard J. Barr, II Senior Vice President
and Director of
Research
Ann J. Conrad Vice President and
Director of Special
Equity Products
Terry H. Gardner Vice President and
Chief Financial
Officer
Elyse G. Essick Vice President and
Director of Client
Services
<PAGE>
Otto G. Hinzmann Vice President and
Director of Equity
Portfolio Management
Sharon E. Fayolle Vice President and
Director of Money
Market Trading
Anne K. Kennedy Vice President and
Director of Corporate
Bond Trading
Peter G. Root Vice President and
Director of Government
Securities Trading
Lisa A. Rosen General Counsel and
Director of Mutual
Fund Operations
Ann F. Putallaz Vice President and
Director of Fiduciary
Services
James C. Robinson Vice President and
Chief Investment
Officer/Fixed Income
Gerald L. Seizert Executive Vice
President and Chief
Investment
Officer/Equity
Paul D. Tobias Executive Vice
President and Chief
Operating Officer
For further information relating to the Investment Adviser's officers, reference
is made to Form ADV filed under the Investment Advisers Act of 1940 by Munder
Capital Management.
SEC File No. 801-32415
Item 29. Principal Underwriters.
----------------------
(a) Funds Distributor, Inc. ("FDI") serves as
Distributor of shares of the Registrant. FDI also
serves as principal underwriter of the following
investment companies other than the Registrant:
HT Insight Funds, d/b/a Harris Insight Funds
Harris Insight Funds Trust
The Munder Funds Trust
<PAGE>
St. Clair Funds, Inc.
Panagora Funds
BJB Investment Funds
Waterhouse Investors Cash Management Fund, Inc.
Skyline Funds
Foreign Fund, Inc.
PanAgora Funds
BEA Investment Funds, Inc.
Fremont Mutual Funds
RCM Capital Funds, Inc.
RCM Equity Funds, Inc.
LKCM Funds
Pierpont Funds
JPM Advisor Funds
JPM Institutional Funds
(b) The directors and officers of FDI are set forth below. Unless
otherwise indicated, their address is One Exchange Place, Boston,
Massachusetts 02109.
Positions and Positions and
Offices with Offices with
Name FDI Registrant
- ---- ------------- -------------
William J. Nutt Chairman None
Marie E. Connolly President, Chief None
Executive Officer
John E. Pelletier Senior Vice None
President General Counsel
Rui M. Moura First Vice None
President
Joseph F. Tower, III Senior Vice None
President, Treasurer,
Chief Financial Officer
Richard W. Ingram Senior Vice President None
Donald R. Robertson Senior Vice President None
Bernard A. Whalen Senior Vice President None
John W. Gomez Director None
(c) Not Applicable
The information required by this Item 29 with respect to each
director and officer of FDI is incorporated by reference to Schedule A of Form
BD filed by FDI pursuant to
<PAGE>
the Securities Exchange Act of 1934 (SEC File No. 20518).
Item 30. Location of Accounts and Records.
--------------------------------
The account books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
the Rules thereunder will be maintained at the offices of Munder Capital
Management at 480 Pierce Street, Birmingham, MI 48009, at State Street Bank and
Trust Company, c/o National Financial Data Services, 1004 Baltimore, Kansas
City, Missouri 64105-1807 or at First Data Investor Services Group, Inc. (f/k/a
The Shareholder Services Group, Inc.), One Exchange Place, Boston, Massachusetts
02109.
Item 31. Management Services.
-------------------
Not Applicable
Item 32. Undertakings.
------------
(a) Not Applicable.
(b) Registrant undertakes to call a meeting of
Shareholders for the purpose of voting upon the
question of removal of a Director or Directors when
requested to do so by the holders of at least 10% of
the Registrant's outstanding shares of beneficial
interest and in connection with such meeting to
comply with the shareholders' communications
provisions of Section 16(c) of the Investment
Company Act of 1940.
(c) Registrant undertakes to furnish to each person to whom a prospectus
is delivered a copy of the Registrant's latest annual report to
shareholders upon request and without charge.
(d) Registrant undertakes to file a Post-Effective Amendment relating to
The Munder Short Term Treasury Fund, using reasonably current
financial statements which need not be certified, within four to six
moths from the effective date of the Registration Statement with
respect to The Munder Short Term Treasury Fund.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, Registrant has duly caused
this Post-Effective Amendment No. 19 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Washington, D.C. on this 30th day of September, 1996.
The Munder Funds, Inc.
By: *_______________________
Lee P. Munder
* By: /s/ Paul F. Roye
------------------------
Paul F. Roye
as Attorney-in-Fact
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment No. 17 to the Registration Statement on Form N-1A
has been signed below by the following persons on behalf of The Munder Funds,
Inc. in the capacities and on the date indicated:
Signatures Title Date
*_______________________ President and Chief September 30,1996
Lee P. Munder Executive Officer
*_______________________ Director September 30,1996
Charles W. Elliott
*_______________________ Director September 30,1996
Joseph E. Champagne
*_______________________ Director September 30,1996
Arthur DeRoy Rodecker
*_______________________ Director September 30,1996
Jack L. Otto
<PAGE>
*_______________________ Director September 30,1996
Thomas B. Bender
*_______________________ Director September 30,1996
Thomas D. Eckert
*_______________________ Director September 30,1996
John Rakolta, Jr.
*_______________________ Director September 30,1996
David J. Brophy
*_______________________ Vice President, September 30,1996
Terry H. Gardner Treasurer and
Chief Financial
Officer
* By: /s/ Paul F. Roye
------------------------
Paul F. Roye
as Attorney-in-Fact
<PAGE>
