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REGISTRATION NO. 33-61542
REGISTRATION NO. 811-7662
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 12
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Post-Effective Amendment No. 12
U.S. GLOBAL ACCOLADE FUNDS
(Exact Name of Registrant as Specified in Charter)
7900 CALLAGHAN ROAD
SAN ANTONIO, TEXAS 78229
(Address of Principal Executive Office)
Registrant's Telephone Number, including Area Code (210) 308-1234
Frank E. Holmes, President
U.S. Global Accolade Funds
7900 Callaghan Road
San Antonio, Texas 78249-3340
(Name and Address of Agent for Service)
Approximate date of proposed public offering:
It is proposed that this filing will become effective (check appropriate box):
/ / immediately upon filing pursuant to paragraph (b) of Rule 485
/ X / on November 3, 1997, pursuant to paragraph (b) of Rule 485
/ / 60 days after filing pursuant to paragraph (a) of Rule 485
/ / On (date), pursuant to paragraph (a) of Rule 485.
Registrant hereby declares, pursuant to Rule 24f-2 under the Investment Company
Act of 1940, an indefinite number of shares of beneficial interest, no par
value, have previously been registered.
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U.S. GLOBAL ACCOLADE FUNDS
FORM N-1A
CROSS REFERENCE SHEET
ITEM
NO. CAPTION OR LOCATION IN PROSPECTUS
1 Cover Page
2 Not Applicable
3 Not Applicable
4 Cover Page; Description of the Funds; The Trust; Special Risks
5 Management of the Funds
6 Cover Page; The Trust; Dividends and Taxes
7 How to Purchase and Sell Shares; Net Asset Value
(12b-1 Plan - Management of the Funds;
Distribution Expense Plan)
8 How to Purchase and Sell Shares
9 Not Applicable
CAPTION OR LOCATION IN STATEMENT OF ADDITIONAL INFORMATION
10 Cover Page
11 Table of Contents
12 General Information
13 Investment Objectives and Policies
14 Management of the Fund
15 Principal Holders of Securities
16 Investment Advisory Services; Transfer Agency and Other Services
17 Investment Objectives and Policies
18 General Information
19 Additional Information on Redemptions
20 Tax Status
21 Not Applicable
22 Calculation of Performance Data
23 Financial Statements
<PAGE>
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PART A. PROSPECTUS
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U.S. GLOBAL ACCOLADE FUNDS
MEGATRENDS FUND
P.O. BOX 781234
SAN ANTONIO, TEXAS 78278-1234
1-800-873-8637 OR 1-800-US-FUNDS
(INFORMATION, SHAREHOLDER SERVICES AND REQUESTS)
INTERNET: HTTP://WWW.USFUNDS.COM
PROSPECTUS
NOVEMBER 3, 1997
This prospectus presents information that a prospective investor should
know about the MegaTrends Fund (the "Fund"), a diversified series of U.S.
Global Accolade Funds (the "Trust"). The Trust is an open-end management
investment company. Investors are responsible for determining whether or not an
investment in the fund is appropriate for their needs. Read and retain this
prospectus for future reference.
A Statement of Additional Information dated November 3, 1997, has been
filed with the Securities and Exchange Commission and is incorporated herein by
reference. The Statement of Additional Information is available without charge
from U.S. Global Accolade Funds upon request at the address set forth above or
by calling 1-800-873-8637 or 1-800-US-FUNDS.
THESE SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
PAGE
----
Summary of Fees and Expenses......... 2
Financial Highlights -- MegaTrends
Fund............................... 4
Investment Objectives, Investment
Policies, and
Risk Considerations................ 5
Other Investment Practices........... 8
How to Purchase Shares............... 9
How to Exchange Shares............... 12
How to Redeem Shares................. 14
How Shares Are Valued................ 18
Dividends and Taxes.................. 19
The Trust............................ 21
Management of the Fund............... 21
Distribution Expense Plan............ 24
Performance Information.............. 25
SUMMARY OF FEES AND EXPENSES
The following summary is provided to assist you in understanding the
various costs and expenses a shareholder in the Fund could bear directly or
indirectly.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load.............. None
Redemption Fee.................. None
Administrative Exchange Fee..... $ 5
Account Closing Fee (does not
apply to exchanges).......... $10
Trader's Fee (shares held less
than 30 days)................ 0.25%
ANNUAL FUND OPERATING EXPENSES (AS A
PERCENTAGE OF AVERAGE NET
ASSETS)(1)
Management and Administrative
Fees......................... 1.00%
12b-1 Fees...................... 0.25%
Other Expenses, including
Transfer Agency and
Accounting Services Fees..... 0.72%
Total Fund Operating Expenses... 1.97%
Net Fund Operating Expenses..... 1.97%
2
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Except for active ABC Investment Plan(Registered Trademark) accounts,
custodial accounts for minors, and retirement accounts, if an account balance
falls, for any reason other than market fluctuations, below $5,000 at any time
during a month, that account will be subject to a monthly small account charge
of $1 which will be payable quarterly. See "Small Accounts."
A shareholder who requests delivery of redemption proceeds by wire transfer
will be subject to a $10 charge. International wires will be higher.
HYPOTHETICAL EXAMPLE OF EFFECT OF FUND EXPENSES:
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return and redemption at the end of each period.
1 year............................... $ 30
3 years.............................. $ 72
5 years.............................. $ 116
10 years............................. $ 240
The hypothetical example is based upon the Fund's historical expenses which
are expected to decline as the Fund's net assets increase. In conformance with
SEC regulations, the example is based upon a $1,000 investment; however, the
Fund's minimum investment is $5,000. In practice, a $1,000 account would be
assessed a monthly $1 small account charge which is not reflected in the
example. See "Small Accounts." Included in these estimates is the account
closing fee of $10 for each period. This fee is a flat charge which does not
vary with the size of your investment. Accordingly, for investments larger than
$1,000, your total expenses will be substantially lower in percentage terms than
the illustration implies. The example should not be considered a representation
of future expenses. Actual expenses may be more or less than those shown.
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(1) Annual fund operating expenses and the hypothetical example are based on the
fund's historical expenses. Management fees and transfer agency fees are paid to
U.S. Global Investors, Inc. (the "Advisor") and its wholly owned subsidiaries.
The Advisor then pays a portion of the management fee to Money Growth Institute,
Inc. (the "Sub-Advisor") for serving as sub-advisor. Please refer to the
section, "Management of the Funds," for further information.
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FINANCIAL HIGHLIGHTS
The following information for the fiscal year ended June 30, 1997, has been
audited by Price Waterhouse LLP, independent accountants, whose unqualified
report thereon is included in the MegaTrends Fund 1997 Annual Report, which is
incorporated by reference into the Statement of Additional Information. The
following information for the fiscal periods ended June 30, 1992 through 1996,
was audited by Arthur Andersen LLP. The related financial statements and report
of independent accountants for 1996 and prior periods are included in the fund's
1996 Annual Report to Shareholders and are incorporated by reference into the
Statement of Additional Information. The Financial Highlights should be read in
conjunction with the financial statements and notes thereto included in the
Annual Report. In addition to the data set forth below, further information
about the performance of the Fund is contained in the Annual Report and
Statement of Additional Information, which may be obtained without charge.
Per share data for an outstanding share throughout each period is as
follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
----------------------------------------------------------------
1997* 1996 1995 1994 1993 1992**
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF
PERIOD............................. $ 11.27 $ 11.17 $ 10.29 $ 10.84 $ 10.36 $ 10.00
--------- --------- --------- --------- --------- ---------
Income from investment operations:
Net investment income............ 0.01 0.17 0.28 0.19 0.15 0.16
Net realized and unrealized gains
(losses) on investments........ 2.39 1.72 0.95 (0.35) 0.55 0.51
--------- --------- --------- --------- --------- ---------
Total from investment operations..... 2.40 1.89 1.23 (0.16) 0.70 0.67
--------- --------- --------- --------- --------- ---------
Dividends and distributions:
Dividends from net investment
income......................... (0.01) (0.17) (0.28) (0.19) (0.15) (0.16)+
Distributions from net realized
gains.......................... (0.21) (1.61) -- (0.20) (0.07) (0.15)+
In excess of net realized
gains.......................... -- (0.01) (0.07) -- -- --
--------- --------- --------- --------- --------- ---------
Total dividends and distributions.... (0.22) (1.79) (0.35) (0.39) (0.22) (0.31)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE AT END OF PERIOD..... $ 13.45 $ 11.27 $ 11.17 $ 10.29 $ 10.84 $ 10.36
========= ========= ========= ========= ========= =========
TOTAL RETURN......................... 20.72% 17.10% 12.20% (1.50)% 6.79% 7.94%#
========= ========= ========= ========= ========= =========
Net assets at end of period
(000's)............................ $ 25,610 $ 27,945 $ 32,976 $ 45,523 $ 58,955 $ 28,340
========= ========= ========= ========= ========= =========
Ratio to average net assets(1):
Net investment income............ 0.09% 1.30% 2.36% 1.65% 1.60% 2.21%#
Total expenses................... 1.97% 2.10% 1.98% 1.81% 1.95% 2.71%#
Expenses reimbursed or offset.... (0.09)% (0.60)% (0.48)% (0.31)% (0.45)% (1.24)%#
Net expenses..................... 1.88% 1.50% 1.50% 1.50% 1.50% 1.47%#
Average commission rate paid......... $ 0.0800 n/a n/a n/a n/a n/a
Portfolio turnover rate.............. 62% 115% 163% 143% 83% 75%#
</TABLE>
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* Effective November 18, 1996, the Fund changed to a new investment manager.
** For the period October 21, 1991, effective date of registration and public
offering, through June 30, 1992.
+ For the period ended June 30, 1992, the per share data was calculated using
average shares outstanding throughout the period, whereas for subsequent
periods, the per share data was calculated based upon actual distributions.
For the period ended June 30, 1992, actual distributions per share from net
investment income and from net realized gains from security transactions
amounted to $0.11 and $0.08, respectively.
# Ratios and total return are annualized for periods of less than one year.
(1) Expenses reimbursed or offset reflect reductions to total reductions to
total expenses, as discussed in the notes to the financial statements. Such
amounts would decrease the net invetment income ratio had such reductions
not occurred.
4
<PAGE>
INVESTMENT OBJECTIVES, INVESTMENT POLICIES, AND RISK CONSIDERATIONS
The primary investment objective of the Fund is to seek long-term capital
appreciation consistent with the preservation of capital. Earning current income
from dividends, interest and short-term capital gains is a secondary objective.
The Fund is not intended to be a complete investment program, and there is no
assurance that its investment objectives can be achieved. The Fund's investment
objectives are fundamental and as such may not be changed without the
affirmative vote of the holders of a majority of its outstanding shares as
defined in the Investment Company Act of 1940. Unless otherwise indicated, all
investment practices and limitations of the Fund are nonfundamental policies
which may be changed by the Board of Trustees without shareholder approval.
The Fund should be viewed essentially as an equity fund since it is
expected that, unless the Fund is in a defensive posture, the majority of its
assets will be held in common stocks most of the time. The Fund, however, may
from time to time have a significant portion, and possibly all, of its assets in
obligations issued or guaranteed as to principal and interest by the United
States Government, its agencies or instrumentalities ("U.S. Government
obligations" described below) and corporate debt securities of various
maturities. When the Sub-Advisor believes substantial price risks exist for
common stocks because of uncertainties in the investment outlook or when, in the
judgment of the Sub-Advisor, it is otherwise warranted in selling to manage the
Fund's portfolio against the risks of a major stock market decline, the Fund may
temporarily hold, for defensive purposes, all or a portion of its assets in
money market instruments.
Investments in equity and debt securities are subject to inherent market
risks and fluctuations in value due to earnings, economic conditions, quality
ratings and other factors beyond the control of the Sub-Advisor. Debt securities
also are subject to price fluctuations based upon changes in the level of
interest rates, which will generally result in all those securities changing in
price in the same way, i.e., all those securities experiencing appreciation when
interest rates decline and depreciation when interest rates rise. As a result,
the return and net asset value of the Fund will fluctuate.
ASSET ALLOCATION
The Sub-Advisor determines the asset allocation of the Fund's portfolio
primarily upon the basis of market timing techniques developed by Dr. Stephen
Leeb, President and controlling shareholder of the Sub-Advisor, and his staff.
These techniques attempt to identify the degree of risk in holding stocks versus
debt securities and/or versus money market instruments. Dr. Leeb and his staff
have developed models over the years to assist him in assessing risk in the
equity and debt markets. These models emphasize general economic and monetary
factors and, to a lesser extent, trends in the equity and debt markets
themselves.
5
<PAGE>
Investors should be aware that the investment results of the Fund depend
upon the ability of the Sub-Advisor to correctly anticipate the relative
performance and risk of stocks, debt securities and money market instruments.
Historical evidence indicates that correctly timing portfolio allocations among
these asset classes has been an extremely difficult investment strategy to
implement successfully. While Dr. Leeb has substantial experience in applying
market timing techniques, there can be no assurance that the Sub-Advisor will
correctly anticipate relative asset class performance in the future on a
consistent basis. Investment results would suffer, for example, if only a small
portion of the Fund's assets were invested in stocks during a significant stock
market advance or if a major portion were invested in stocks during a major
decline.
STOCK SELECTION
The stock selection approach within the equity sector of the Fund's
portfolio can best be characterized in the vernacular of the investment business
as a "value" orientation. That is, great emphasis is placed on "value"
parameters, such as having a strong balance sheet, substantial free cash flow, a
record of rising dividends, and/or having a high dividend yield. In addition,
companies in whose equities the Fund may invest will predominantly have large
capitalizations in terms of total market value. Usually, but not always, the
stocks of such companies are traded on major stock exchanges. Such stocks are
usually very liquid, but there may be periods when a particular stock or stocks
in general become substantially less liquid. Such periods are usually, but not
always, brief, and the Sub-Advisor will seek to minimize the overall liquidity
risk of the Fund's portfolio. In addition, it is unlikely that the Fund would
have more than a token amount of its assets, and in no case more than five
percent (5%) of its net assets, in stocks with market capitalizations less than
$300 million at the time of purchase. The Fund may invest in foreign companies
through the purchase of sponsored American Depository Receipts, "ADRs,"
(certificates of ownership issued by an American bank or trust company as a
convenience to investors in lieu of the underlying shares which it holds in
custody), or other securities of foreign issuers that are publicly traded in the
United States. The Fund does not currently intend to invest more than five
percent (5%) of its net assets in American Depository Receipts and other foreign
securities.
GOVERNMENT AND CORPORATE DEBT SECURITIES
When the Fund has a portion of its assets in U.S. Government obligations or
corporate debt securities, the maturities of these securities will be based in
large measure both on the Advisor's perception as to general risk levels in the
debt market versus the equity market, and on the Advisor's perception of the
future trend and term structure of interest rates. Dr. Leeb, with his staff, has
developed models that assist him in assessing risk in the debt markets and
interest rate trends.
6
<PAGE>
U.S. Government obligations include securities which are issued or
guaranteed by the United States Treasury, by various agencies of the United
States Government, and by various instrumentalities which have been established
or sponsored by the United States Government. U.S. Treasury obligations are
backed by the "full faith and credit" of the U.S. Government. U.S. Treasury
obligations include Treasury bills, Treasury notes and Treasury bonds. Agencies
or instrumentalities established by the United States Government include the
Federal Home Loan Bank, the Federal Land Bank, the Government National Mortgage
Association, the Federal National Mortgage Association, the Federal Home Loan
Mortgage Corporation, and the Student Loan Marketing Association.
Also included are the Bank for Cooperatives, the Federal Intermediate
Credit Bank, the Federal Financing Bank, the Federal Farm Credit Bank, the
Federal Agricultural Mortgage Corporation, the Resolution Funding Corporation,
the Financing Corporation of America and the Tennessee Valley Authority. Some of
these securities are supported by the full faith and credit of the United States
Government while others are supported only by the credit of the agency or
instrumentality, which may include the right of the issuer to borrow from the
United States Treasury.
The Fund may also purchase corporate debt securities rated "B" or higher
by Standard & Poor's Ratings Group or Moody's Investors Service, Inc., although
the Fund does not hold, nor intends to invest, more than five percent (5%) of
its net assets in corporate debt securities rated at least "B" but less than
"A" by either of these two rating organizations. Lower-rated debt securities
(commonly called "junk bonds") are often considered to be speculative and
involve greater degrees of risk of default or price changes due to changes in
the issuer's creditworthiness. The Fund may also purchase debt securities on a
when-issued basis, but the Fund does not currently intend to invest more than
five percent (5%) of its net assets in such securities during the coming year.
MONEY MARKET SECURITIES
The money market instruments which the Fund may own from time to time
include U.S. Government obligations having a maturity of less than one year,
commercial paper rated A-1 by Standard & Poor's Ratings Group or Prime-1 by
Moody's Investors Service, Inc., bank debt instruments (certificates of deposit,
time deposits and bankers' acceptances) and other short-term instruments issued
by domestic branches of U.S. financial institutions that are insured by the
Federal Deposit Insurance Corporation and have assets exceeding $10 billion.
The Fund may also invest a portion of its assets in repurchase agreements
with domestic broker/dealers, banks and other financial institutions, provided
the Fund's custodian always has possession of securities serving as collateral
or has evidence of book entry receipt of such securities. In a repurchase
agreement, the Fund purchases securities subject to the sellers
7
<PAGE>
agreement to repurchase such securities at a specified time (normally one day)
and price. The repurchase price reflects an agreed-upon interest rate during the
time of investment. All repurchase agreements must be collateralized by the
United States Government or government agency securities, the market values of
which equal or exceed 102% of the principal amount of the repurchase obligation.
If an institution enters an insolvency proceeding, the resulting delay in
liquidation of securities serving as collateral could cause the Fund some loss
if the value of the securities declined prior to liquidation. To minimize the
risk of loss, the Fund will enter into repurchase agreements only with
institutions and dealers which the Board of Trustees considers creditworthy.
OTHER INVESTMENT PRACTICES
The Fund may make short-term loans of its portfolio securities to banks,
brokers and dealers, although the Fund has no present intention to do so.
The Fund may borrow money from banks or as may be necessary for the
clearance of securities transactions but only for emergency or extraordinary
purposes in an amount not exceeding five percent (5%) of the Fund's total
assets. The Fund's policy on borrowing is a fundamental policy which may not be
changed without the affirmative vote of a majority of its outstanding shares.
PORTFOLIO TURNOVER
The Fund does not intend to use short-term trading as a primary means of
achieving its investment objectives. However, the Fund's rate of portfolio
turnover will depend on market and other conditions, and it will not be a
limiting factor when portfolio changes are deemed necessary or appropriate by
the Sub-Advisor. For the fiscal years ended June 30, 1996 and 1997, the Fund's
portfolio turnover was 115% and 62%, respectively. Although the annual portfolio
turnover rate of the Fund cannot be accurately predicted, it will likely be
between 75% and 150%, but may be either higher or lower. High turnover involves
correspondingly greater commission expenses and transaction costs and increases
the possibility that the Fund would not qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code. The Fund will not
qualify as a regulated investment company if it derives 30% or more of its gross
income from gains (without offset for losses) from the sale or other disposition
of securities held for less than three months. High turnover may result in the
Fund recognizing greater amounts of income and capital gains, which would
increase the amount of income and capital gains which the Fund must distribute
to its shareholders in order to maintain its status as a regulated investment
company and to avoid the imposition of federal income or excise taxes (see
"Taxes").
8
<PAGE>
PORTFOLIO TRANSACTIONS
In executing portfolio transactions and selecting brokers or dealers, the
Fund seeks the best overall terms available. In assessing the terms of a
transaction, consideration may be given to various factors, including the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer (for a specified
transaction and on a continuing basis), the reasonableness of the commission, if
any, and the brokerage and research services provided. Under the Advisory and
Sub-Advisory agreements, the Advisor and Sub-Advisor are permitted, in certain
circumstances, to pay a higher commission than might otherwise be obtained in
order to acquire brokerage and research services. The Advisor and Sub-Advisor
must determine in good faith, however, that such commission is reasonable in
relation to the value of the brokerage and research services provided -- viewed
in terms of that particular transaction or in terms of all the accounts over
which investment discretion is exercised. In such case, the Board of Trustees
will review the commissions paid by the Fund to determine if the commissions
paid over representative periods of time were reasonable in relation to the
benefits obtained. The advisory fee of the Advisor would not be reduced by
reason of its receipt of such brokerage and research services. To the extent
that any research services of value are provided by broker-dealers through or
with whom the Fund places portfolio transactions, the Advisor or Sub-Advisor may
be relieved of expenses which they might otherwise bear.
HOW TO PURCHASE SHARES
The minimum initial investment for the Fund is $5,000 for regular accounts
or $1,000 for custodial accounts for minors. The minimum subsequent investment
is $100. The minimum initial investment for persons enrolled in the ABC
Investment Plan(Registered Trademark) is $1,000 and the minimum subsequent
investment pursuant to such a plan is $100 or more per month per account. There
is no minimum purchase for retirement plan accounts, including IRAs,
administered by the Advisor or its agents and affiliates. Management may waive
minimum initial or subsequent investment requirements for purchases made through
qualifying broker-dealers or certain institutional programs.
YOU MAY INVEST IN THE FOLLOWING WAYS:
BY MAIL
Send your application and check or money order, made payable to the
MegaTrends Fund, to P.O. Box 781234, San Antonio, Texas 78278-1234.
When making subsequent investments, enclose your check with the return
remittance portion of the confirmation of your previous investment or indicate
on your check or a separate piece of paper your name, address and account number
and mail to the address mentioned above. Do not use
9
<PAGE>
the remittance portion of your confirmation statement for a different fund as it
is pre-coded. Doing so may cause your investment to be invested into the wrong
fund. If you wish to purchase shares in more than one fund, send a separate
check or money order for each fund. Third party checks will not be accepted, and
the Fund reserves the right to refuse to accept second party checks.
BY TELEPHONE
Once your account is open, you may make investments by telephone by calling
1-800-873-8637 or 1-800-US-FUNDS. Investments by telephone are not available in
money market funds or any retirement account administered by the Advisor or its
agents. The maximum telephone purchase is ten times the value of the shares
owned, calculated at the last available net asset value. Payment for shares
purchased by telephone is due within seven business days after the date of the
transaction. You cannot exchange shares purchased by telephone until after the
payment has been received and accepted by the Trust.
BY WIRE
You may make your initial or subsequent investments in the MegaTrends Fund
by wiring money. To do so, call the Fund at 1-800-873-8637 or 1-800-US-FUNDS for
a confirmation number and wiring instructions.
BY ABC INVESTMENT PLAN(Registered Trademark)
The ABC Investment Plan (Registered Trademark) (Automatically Building
Capital) is offered as a special service allowing you to build a position in any
of the U.S. Global Investors family of funds over time without trying to
outguess the market. Once your account is open, you may make investments
automatically by completing the ABC Investment Plan(Registered Trademark) form
authorizing United Shareholder Services, Inc. to draw on your money market or
bank account monthly for a minimum of $100 a month beginning within thirty (30)
days after the account is opened. These lower minimums are a special service
bringing to small investors the benefits of U.S. Global Investors family of
funds without requiring a $5,000 minimum initial investment.
Your investment dollars will automatically buy more shares when the market
is undervalued and fewer shares when the market is overvalued. By investing an
equal amount at regular periodic intervals, you avoid the extremes in the
market. Of course, using the ABC Investment Plan(Registered Trademark) does not
guarantee a profit. If you sell at the bottom, no system will give you a gain.
You may call 1-800-873-8637 to open a treasury money market fund or you
could inquire at your bank whether it will honor debits through the Automated
Clearing House ("ACH") or, if necessary, preauthorized
10
<PAGE>
checks. You may change the date or amount of your investment or discontinue the
Plan any time by letter received by United Shareholder Services, Inc. at least
two weeks before the change is to become effective.
ADDITIONAL INFORMATION ABOUT PURCHASES
All purchases of shares are subject to acceptance by the Fund and are not
binding until accepted. The Fund reserves the right to reject any application or
investment. Orders received by the Fund's Transfer Agent or sub-agent before
4:00 p.m., Eastern Time, Monday through Friday exclusive of business holidays,
and accepted by the Fund will receive the share price next computed after
receipt of the order. In the event that the New York Stock Exchange ("NYSE")
and other financial markets close earlier, as on the eve of a holiday, orders
will become effective earlier in the day at the close of trading on the NYSE.
If your telephone order to purchase shares is canceled due to nonpayment or
late payment (whether or not your check has been processed by the Fund), you
will be responsible for any loss incurred by the Fund by reason of such
cancellation. If checks are returned unpaid due to insufficient funds, stop
payment or other reasons, the Fund will charge your account $20 and you will be
responsible for any loss incurred by the Fund with respect to canceling the
purchase.
To recover any such loss or charge, the Fund reserves the right, without
further notice, to redeem shares of any affiliated funds already owned by any
purchaser whose order is canceled, for whatever reason, and such a purchaser may
be prohibited from placing further orders unless investments are accompanied by
full payment by wire or cashier's check.
U.S. Global Accolade Funds charges no sales commissions or "loads."
However, investors may purchase and sell shares through registered
broker/dealers who may charge fees for their services.
CHECKS DRAWN ON FOREIGN BANKS. To be received in good order, an investment
must be made in U.S. dollars payable through a bank in the United States. As an
accommodation, the Funds' Transfer Agent may accept checks payable in a foreign
currency or drawn on a foreign bank and will attempt to convert such checks into
U.S. dollars and repatriate such amount to the Funds account in the United
States. Your investment in the Fund will not be considered to have been received
in good order until your foreign check has been converted into U.S. dollars and
is available to the Fund through a bank in the United States. Your investment in
the Fund may be delayed until your foreign check has been converted into U.S.
dollars and cleared the normal collection process. Any amounts charged to the
Fund for collection procedures will be deducted from the amount invested.
If the Fund incurs a charge for locating a shareholder without a current
address, such charge will be passed through to the shareholder.
11
<PAGE>
TAX IDENTIFICATION NUMBER
The Fund is required by federal law to withhold and remit to the United
States Treasury a portion of the dividends, capital gain distributions and
proceeds of redemptions paid to any shareholder who fails to furnish the Fund
with a correct taxpayer identification number, who underreports dividend or
interest income or who fails to provide certification of a tax identification
number. In order to avoid this withholding requirement, you must certify on your
application, or on a separate Form W-9 supplied by the Transfer Agent, that your
taxpayer identification number is correct and that you are not currently subject
to backup withholding or you are exempt from backup withholding. For
individuals, your taxpayer identification number is your social security number.
Instructions to exchange or transfer shares held in established accounts
will be refused until the certification has been provided. In addition, the Fund
assesses a $50 administrative fee if the taxpayer identification number is not
provided by year-end.
CONFIRMATION STATEMENTS
When you open your account, the Fund will send you a confirmation
statement, which will be your evidence that you have opened an account with the
Fund. The confirmation statement is nonnegotiable, so if it is lost or
destroyed, you will not be required to buy a lost instrument bond or be subject
to other expense or trouble as you would with a negotiable stock certificate.
The Fund does not issue stock certificates.
You normally will receive a confirmation statement after each transaction
(purchase, redemption, dividend, etc.) showing activity in the account. If you
have no transactions, you will receive an annual statement only.
HOW TO EXCHANGE SHARES
You have the privilege of exchanging into any other fund in the U.S. Global
Investors family of funds which is registered in your state. An exchange
involves the redemption (sale) of shares of one fund and purchase of shares of
another fund at the respective closing net asset value and is a taxable
transaction.
FUNDS IN THE U.S. GLOBAL INVESTORS FAMILY OF FUNDS
Investing involves a tradeoff between potential rewards and potential
risks. In order to achieve higher rewards on your investment, you must be
willing to take on higher risk. If you are most concerned with safety of
principal, a lower risk investment will provide greater stability but with lower
potential earnings. Another strategy for dealing with volatile markets is to use
the ABC Investment Plan(Registered Trademark). The list below is a reward and
risk guide to all of the mutual funds in the U.S. Global Investors family of
funds. This guide may help you decide if a fund is suitable for your investment
goals.
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HIGH REWARD China Region Opportunity Fund
HIGH RISK Regent Eastern European Fund
U.S. Gold Shares Fund
U.S. World Gold Fund
U.S. Global Resources Fund
Adrian Day Global Opportunity Fund
Bonnel Growth Fund
MODERATE REWARD U.S. Real Estate Fund
MODERATE RISK U.S. All American Equity Fund
MegaTrends Fund
U.S. Income Fund
U.S. Tax Free Fund
United Services Near-Term Tax Free
Fund
LOW REWARD U.S. Government Securities Savings
Fund
LOW RISK U.S. Treasury Securities Cash Fund
If you have additional questions, one of our professional investor
representatives will personally assist you. Call 1-800-US-FUNDS.
BY TELEPHONE
You will automatically have the privilege to direct the Fund to exchange
your shares between identically registered accounts by calling toll-free
1-800-873-8637 or 1-800-US-FUNDS. In connection with such exchanges neither the
Fund nor the Transfer Agent will be responsible for acting upon any instructions
reasonably believed by them to be genuine. The shareholder, as a result of this
policy, will bear the risk of loss. The Fund and/or its Transfer Agent will,
however, employ reasonable procedures to confirm that instructions communicated
by telephone are genuine (including, requiring some form of personal
identification, providing written confirmation and tape recording
conversations); and if it does not employ reasonable procedures, it may be
liable for losses due to unauthorized or fraudulent transactions.
BY MAIL
You may direct the Fund in writing to exchange your shares. The request
must be signed exactly as the name appears in the registration. (Before writing,
read "Additional Information About Exchanges.")
ADDITIONAL INFORMATION ABOUT EXCHANGES
(1) A $5 charge will be paid to United Shareholder Services, Inc. for each
exchange out of any fund account. Retirement accounts administered by the
Advisor or its agents are charged $5 for each exchange exceeding three per
quarter. Exchange fees cover administrative costs associated with handling these
exchanges.
(2) An exchange involves both the redemption of shares out of the Fund and
the purchase of shares in a "Separate Fund." Like any other purchase, shares
of the Separate Fund cannot be purchased by exchange
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until all conditions of purchase are met, including investable proceeds being
immediately available. Like any other redemption, the Fund reserves the right to
hold exchange proceeds for up to seven days. In general, the Fund expects to
exercise this right on exchanges of $50,000 or more. In such event, purchase of
the Separate Fund shares will also be delayed. Separate Fund shares will be
priced at their net asset value at the time of purchase. Redemption proceeds
will not be invested in either fund during this period. Fund shares will always
be redeemed immediately; however, Separate Fund shares will not be purchased
until investable proceeds are available. You will be notified immediately if the
purchase will be delayed.
(3) Shares may not be exchanged unless you have furnished the Fund with
your tax identification number, certified as prescribed by the Internal Revenue
Code and Regulations, and the exchange is to an account with like registration
and tax identification number. (See "Tax Identification Number.")
(4) Exchanges out of the MegaTrends Fund of shares held less than 30 days
are subject to a trader's fee. The applicable trader's fee is described under
"Trader's Fee Paid to the Fund."
(5) The exchange privilege may be canceled anytime. The exchange fee and
other terms of the privilege are subject to change.
HOW TO REDEEM SHARES
You may redeem any or all of your shares at will. The Fund redeems shares
at the net asset value next determined after it has received and accepted a
redemption request in proper order. Redemption requests received in proper order
by the Trust's Transfer Agent or sub-agent prior to 4:00 p.m. Eastern Time,
Monday through Friday, exclusive of business holidays, to be effective that day,
will receive the share price next computed after receipt of the request.
BY MAIL
A written request for redemption must be in proper order, which requires
delivery of the following to the Transfer Agent:
(1) a written request for redemption signed by each registered owner
exactly as the shares are registered, the account number and the number of
shares or the dollar amount to be redeemed;
(2) signature guarantees when required; and,
(3) such additional documents as are customarily required to evidence the
authority of persons effecting redemptions on behalf of corporations, executors,
trustees, and other fiduciaries. Redemptions will not become effective until all
documents, in the form required, have been received by the Transfer Agent.
(Before writing, read "Additional Information About Redemptions.")
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HOW TO EXPEDITE REDEMPTIONS
To redeem your Fund shares by telephone, you may call the Fund and direct
an exchange out of the Fund into an identically registered account in a U.S.
Global Investors treasury money market fund ($1,000 minimum initial investment).
You may then write a check against your treasury money market fund account. See
"How to Exchange Shares" for a description of exchanges, including the $5
exchange fee. Call 1-800-873-8637 or 1-800-US-FUNDS for more information
concerning telephone redemption and a treasury money market fund prospectus.
Telephone redemptions without opening a treasury money market account are
available for members of the Chairman's Circle. For more information about the
Fund's Chairman's Circle program, call 1-800-873-8637 or 1-800-US-FUNDS.
SPECIAL REDEMPTION ARRANGEMENTS
Special arrangements may be made by institutional investors, or on behalf
of accounts established by brokers, advisers, banks or similar institutions, to
have redemption proceeds transferred by wire to pre-established accounts upon
telephone instructions. For further information, call the Fund at 1-800-873-8637
or 1-800-US-FUNDS.
SIGNATURE GUARANTEE
Redemptions in excess of $15,000 currently require a signature guarantee. A
signature guarantee is required for all redemptions, regardless of the amount
involved, when the proceeds are to be paid to someone other than the registered
owner of the shares to be redeemed, or if proceeds are to be mailed to an
address other than the registered address of record.
When a signature guarantee is required, each signature must be guaranteed
by:
(a) a federally insured bank or thrift institution;
(b) a broker or dealer (general securities, municipal, or government) or
clearing agency registered with the U.S. Securities and Exchange
Commission that maintains net capital of at least $100,000; or
(c) a national securities exchange or national securities association. The
guarantee must:
(i) include the statement "Signature(s) Guaranteed";
(ii) be signed in the name of the guarantor by an authorized person,
including the person's printed name and position with the
guarantor; and
(iii)include a recital that the guarantor is federally insured,
maintains the requisite net capital or is a national securities
exchange or association.
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Shareholders living abroad may acknowledge their signatures before a U.S.
consular officer. Military personnel may acknowledge their signatures before
officers authorized to take acknowledgments (e.g., legal officers and
adjutants).
REDEMPTION PROCEEDS MAY BE SENT TO YOU:
BY MAIL
If your redemption check is mailed, it is usually mailed within 48 hours;
however, the Fund reserves the right to hold redemption proceeds for up to seven
days. If the shares to be redeemed were purchased by check, the redemption
proceeds will not be mailed until the purchase check has cleared, which may take
up to seven days. You may avoid this requirement by investing by bank wire
(federal funds). Redemption checks may be delayed if you have changed your
address in the last 30 days. Please notify the Fund promptly in writing, or by
telephone, of any change of address.
BY WIRE
You may authorize the Fund to transmit redemption proceeds by wire,
provided you send written wiring instructions with a signature guarantee at the
time of redemption. Proceeds from your redemption will usually be transmitted on
the first business day following the redemption. However, the Fund reserves the
right to hold redemption proceeds for up to seven days. If the shares to be
redeemed were purchased by check, the redemption proceeds will not be mailed or
wired until the purchase check has cleared, which may take up to seven days.
There is a $10 charge to cover the wire, which is deducted from redemption
proceeds. International wires will be higher.
ADDITIONAL INFORMATION ABOUT REDEMPTIONS
The redemption price may be more or less than your cost, depending on the
net asset value of the Fund's portfolio next determined after your request is
received.
A request to redeem shares in an IRA or similar retirement account must be
accompanied by an IRS Form W4-P and a reason for withdrawal as specified by the
IRS. Proceeds from the redemption of shares from a retirement account may be
subject to withholding tax.
The Fund has the authority to redeem existing accounts and to refuse a
potential account the privilege of having an account in the Fund if the Fund
reasonably determines that the failure to so redeem, or to so prohibit, would
have a material adverse consequence to the Fund and its shareholders. The power
to redeem existing accounts will be exercised in light of the Trustees'
fiduciary duties and in conformance with Massachusetts law. The Fund will not
redeem an existing account solely to prevent the legitimate exercise of a
shareholder's rights. No account closing fee will be charged to investors whose
accounts are closed under this provision.
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TRADER'S FEE PAID TO FUND
A trader's fee of 25 basis points or 0.25% of the value of shares redeemed
or exchanged will be assessed to shareholders who redeem or exchange shares of
the Fund held less than thirty (30) days. The trader's fee will be paid to the
Fund to benefit remaining shareholders by protecting them against expenses due
to excessive trading. Excessive short-term trading has an adverse impact on
effective portfolio management as well as upon Fund expenses. The Fund has
reserved the right to refuse investments from shareholders who engage in
short-term trading that may be disruptive to the Fund.
ACCOUNT CLOSING FEE
In order to reduce Fund expenses, an account closing fee of $10 will be
assessed to shareholders who redeem all shares in their Fund account and direct
that redemption proceeds be delivered to them by mail or wire. The charge is
payable directly to the Fund's Transfer Agent which, in turn, will reduce its
charges to the Fund by an equal amount. The purpose of the charge is to allocate
to redeeming shareholders a more equitable portion of the Transfer Agent's fee,
including the cost of tax reporting, which is based upon the number of
shareholder accounts. Account closing fees do not apply to exchanges between the
funds in the U.S. Global Investors family of funds nor do they apply to any
involuntarily redeemed account.
SMALL ACCOUNTS
Fund accounts which fall, for any reason other than market fluctuations,
below $5,000 at any time during the month, will be subject to a monthly small
account charge of $1 which will be payable quarterly. The charge is payable
directly to the Fund's Transfer Agent which, in turn, will reduce its charges to
the Fund by an equal amount. The purpose of the charge is to allocate the costs
of maintaining shareholder accounts more equally among shareholders.
As a special service, active ABC Investment Plan(Registered Trademark)
accounts, custodial accounts for minors with at least $1,000, and retirement
plan accounts administered by the Advisor or its agents and affiliates will not
be subject to the small account charge.
In order to reduce expenses of the Fund, the Fund may redeem all shares in
any shareholder account, other than active ABC Investment Plan(Registered
Trademark) accounts, custodial accounts for minors and retirement plan accounts,
if, for a period of more than three months, the account has a net asset value of
$2,500 or less and the reduction in value is not due to market fluctuations. If
the Fund elects to close such accounts, it will notify shareholders whose
accounts are below the minimum of its intention to do so, and will provide those
shareholders with an opportunity to increase their accounts by investing a
sufficient amount to bring their accounts up to the minimum amount
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within 90 days of the notice. No account closing fee will be charged to
investors whose accounts are closed under this redemption provision.
OTHER SERVICES
The Fund has a number of plans and services available to meet the special
needs of certain investors. Plans available include:
(1) payroll deduction plans, including military allotments;
(2) custodial accounts for minors;
(3) a flexible, systematic withdrawal plan; and,
(4) various retirement plans such as IRA, SEP/IRA, 403(b)(7), 401(k) and
employer-adopted defined contribution plans.
There is an annual charge for each retirement plan fund account with
respect to which Security Trust & Financial Company, a wholly-owned subsidiary
of the Advisor, acts as custodian. If this administrative charge is not paid
separately prior to the last business day of a calendar year or prior to a total
redemption, it will be deducted from the shareholder's account.
Application forms and brochures describing these plans and services can be
obtained from the Transfer Agent by calling 1-800-873-8637 or 1-800-US-FUNDS.
24-HOUR ACCOUNT INFORMATION
Shareholders can also access current information 24 hours a day on yields,
share prices, latest dividends, account balances, deposits and redemptions. Just
call 1-800-873-8637 or 1-800-US-FUNDS and press the appropriate codes into your
touch-tone phone.
HOW SHARES ARE VALUED
Shares of each Fund are purchased or redeemed, on a continuing basis
without a sales charge, at their next determined net asset value per share. The
net asset value per share of each Fund is calculated separately by Brown
Brothers Harriman Co. Net asset value per share is determined and orders become
effective as of 4:00 p.m. Eastern Time, Monday through Friday, exclusive of
business holidays on which the NYSE is closed, by dividing the aggregate net
assets of each Fund by the total number of shares of that Fund outstanding. In
the event that the NYSE and other financial markets close earlier as on the eve
of a holiday, the net asset value per share will be determined earlier in the
day at the close of trading on the NYSE.
Valuation will be calculated in U.S. Dollars. Securities quoted in other
currencies will be converted to U.S. dollars using the exchange rate then in
effect in the principal market in which the relevant securities are traded. A
portfolio security listed or traded on an international market (a market other
than those in the United States or Canada), either an exchange or over-the-
counter, is valued at the last reported sales price before the time when assets
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are valued. A portfolio security listed or traded in the domestic market (a
market in the United States or Canada), either on an exchange or over-the-
counter, is valued at the latest reported sale price before the time when assets
are valued. Lacking any sales on that day, the security is valued at the mean
between the last reported bid and ask prices.
When market quotations are not readily available, or when restricted
securities or other assets are being valued, such assets are valued at fair
value as determined in good faith by or under procedures established by the
Board of Trustees. These procedures provide, in part, that the Advisor will
produce a written "Fair Value Memorandum" stating its methodology and
rationale for determining fair value for such assets. A copy of the Fair Value
Memorandum will be delivered to the Chairman of the Audit Committee (or any
Independent Trustee if the Chairman of the Audit Committee is unavailable). The
Chairman of the Audit Committee (or Independent Trustee) will, after full
deliberation, have authority to determine fair value in conformance with the
Fair Value Memorandum or to call for an immediate meeting of the Audit Committee
to establish fair market value.
Portfolio securities traded on more than one market are valued according to
the broadest and most representative market. Prices used to value portfolio
securities are monitored to ensure that they represent current market values.
The calculation of net asset value may not take place contemporaneously with the
determination of the prices of portfolio securities used in such calculations.
Events affecting the values of portfolio securities that occur between the time
prices are determined and the close of the New York Stock Exchange will not be
reflected in the Fund's calculation of net asset value unless the Fund's Board
of Trustees deems that the particular event would materially affect the net
asset value, in which case an adjustment will be made. If the price of a
portfolio security is determined to be materially different from its current
market value, such security will be valued at fair value as determined by
management and approved in good faith by the Board of Trustees.
Debt securities with maturities of 60 days or less at the time of purchase
are valued on the basis of the amortized cost. This involves valuing an
instrument at its cost initially and, thereafter, assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument.
DIVIDENDS AND 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"). By
complying with the applicable provisions of the Code, a Fund will not be subject
to federal income tax on its net investment income and capital gain net income
that are distributed to shareholders.
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All income dividends and capital gain distributions are normally
reinvested, without charge, in additional full and fractional shares of the
Fund. Alternatively, investors may choose: (1) automatic reinvestment of capital
gain distributions in Fund shares and payment of income dividends in cash; (2)
payment of capital gain distributions in cash and automatic reinvestment of
income dividends in Fund shares; or (3) all income dividend and capital gain
distributions reinvested. The share price of the reinvestment will be the net
asset value of the Fund shares computed at the close of business on the date the
dividend or distribution is paid. Dividend checks returned to the Fund as
undeliverable and dividend checks not cashed after 180 days will automatically
be reinvested at the price of the Fund on the day returned and the distribution
option will be changed to "reinvest."
At the time of purchase, the share price of the Fund may reflect
undistributed income, capital gain or unrealized appreciation of securities. Any
dividend or capital gain distribution paid to a shareholder shortly after a
purchase of shares will reduce the per share net asset value by the amount of
the distribution. Although in effect a return of capital to the shareholder,
these distributions are fully taxable.
The Fund generally pays dividends, if any, semiannually and pays capital
gains, if any, annually.
Mutual funds are potentially subject to a nondeductible 4% excise tax
calculated as a percentage of certain undistributed amounts of taxable ordinary
income and capital gains net of capital losses. The Fund intends to make such
distributions as may be necessary to avoid this excise tax.
Dividends from taxable net investment income and distributions of net
short-term capital gains paid by the Fund are taxable to shareholders as
ordinary income, whether received in cash or reinvested in additional shares of
the Fund. A portion of these dividends may qualify for the 70% dividends
received deduction available to corporations. Distributions of net capital gains
will be taxable to shareholders as long-term capital gains, whether paid in cash
or reinvested in additional shares, regardless of the length of time the
investor has held his shares.
Each January, the Fund will report to its shareholders the federal tax
status of dividends and distributions paid or declared by the Fund during the
preceding calendar year. This statement will also indicate whether and to what
extent distributions qualify for the 70% dividends received deduction available
to corporations.
The foregoing discussion relates only to generally applicable federal
income tax provisions in effect as of the date of this prospectus. Shareholders
should consult their tax advisers about the status of distributions from the
Fund in their own states and localities.
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THE TRUST
U.S. Global Accolade Funds is an open-end management investment company
consisting of several separate, diversified portfolios.
The Trust was formed April 16, 1993, as a business trust under the laws of
the Commonwealth of Massachusetts. It is a series company authorized to issue
shares without par value in separate series. Shares of the series have been
authorized; shares of each series represent an interest in a separate portfolio.
The Board of Trustees has the power to create additional portfolios anytime
without a vote of shareholders of the Trust. Trustees serve six-year terms. No
shareholder meeting will ordinarily be held unless otherwise required by the
Investment Company Act of 1940. The Trust will call a meeting of shareholders to
vote on the question of removal of one or more Trustees when requested in
writing to do so by record holders of not less than 10% of the Trust's
outstanding shares and to comply with the provisions of Section 16(c) of the
Investment Company Act of 1940 relating to shareholder communications.
On any matter submitted to shareholders, shares of the portfolio entitle
their holder to one vote per share, irrespective of the relative net asset value
of the portfolio's shares. On matters affecting an individual portfolio, a
separate vote of shareholders of the portfolio is required. The portfolio's
shares are fully paid and non-assessable by the Trust, have no preemptive or
subscription rights, and are fully transferable, with no conversion rights.
MANAGEMENT OF THE FUND
TRUSTEES
The business affairs of the Fund are managed by the Trust's Board of
Trustees. The Trustees establish policies, as well as review and approve
contracts and their continuance. The Trustees also elect the officers and select
the Trustees to serve as executive and audit committee members.
THE SUB-ADVISOR
Effective November 18, 1996, the Advisor and the Trust contracted with
Money Growth Institute, Inc. to serve as Sub-Advisor for the Fund. Dr. Stephen
Leeb, president of the Sub-Advisor and its controlling shareholder, is, and
since the Fund's inception October 21, 1991, has been the Fund's portfolio
manager. The Sub-Advisor manages the composition of the portfolio and furnishes
the Fund advice and recommendations with respect to its investments and its
investment program and strategy, subject to the general supervision and control
of the Advisor and the Trust's Board of Trustees. Investment decisions for the
funds are made independently from those of other investment companies advised by
U.S. Global Investors, Inc. Advisor and Sub-Advisor investment personnel may
invest in securities for their own accounts pursuant to a Code of Ethics that
establishes procedures for personal investing and restricts certain
transactions.
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In consideration for such services, the Advisor will pay the Sub-Advisor a
fee, on an annual basis, from 50 basis points (0.50%) to 1% of Fund assets based
on the assets of the Fund.
Prior to the effective date of the current Sub-Advisory Agreement, the Fund
compensated a different investment advisor at an annual rate of one percent (1%)
of average net assets for its services under a separate agreement. For the
fiscal year ended June 30, 1997, the advisory fee paid to the Advisor was 1.00%
(net of waivers by the Advisor) of the Fund's average net assets.
Dr. Leeb has been engaged in the business of providing investment advisory
and portfolio management services since the late 1970s. The business address of
the Sub-Advisor is 45 Rockefeller Plaza, Suite 2570, New York, New York 10111.
As the Fund's portfolio manager, Dr. Leeb is primarily responsible for the
day-to-day investment management of the Fund. The Sub-Advisor is an investment
adviser with assets under management, apart from the Fund, of approximately $40
million as of October 17, 1997. Dr. Leeb is the editor of BALANCED, a highly
regarded and award winning investment advisory newsletter, and THE BIG PICTURE,
one of the nation's top market timing newsletters. The author of the acclaimed
book GETTING IN ON THE GROUND FLOOR, Dr. Leeb accurately forecast the great bull
market of the 1980s and early 1990s. He is also the author of MARKET TIMING FOR
THE NINETIES. He is now at work on a third book which will examine the
investment and economic climate in the nineties and beyond. Dr. Leeb holds a
Bachelor's Degree in Economics from The Wharton School. He also received an M.A.
in Psychology and Math and a Ph.D. in Psychology from the University of
Illinois. Dr. Leeb has been quoted in numerous financial publications, and he
has appeared on Wall Street Week, Nightly Business Report, CNN and CNBC.
Dr. Leeb and the Sub-Advisor have recently consented to, without admitting
or denying any of the charges, two SEC orders. The order dated January 16, 1996,
related to certain advertisements for a newsletter edited by Dr. Leeb. Dr. Leeb
was neither the owner nor the publisher of the newsletter. The order dated July
14, 1995, related to certain record keeping requirements and requirements
governing client solicitations. Considered jointly, the orders allege that Dr.
Leeb and other respondents willfully violated, or aided and abetted violations
of various provisions of the Securities Act of 1933, the Securities Exchange Act
of 1934, the Investment Company Act of 1940, and the Advisers Act of 1940. Dr.
Leeb and the other respondents agreed to certain remedial sanctions including
censures, cease and desist orders, payment of civil money penalties, and the
implementation of certain procedures to ensure their compliance with the federal
securities laws. Neither the MegaTrends Fund nor the predecessor fund was a
party to either proceeding.
Three states issued orders against the Sub-Advisor for conducting advisory
business in their states without prior registration as an investment
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adviser. The Sub-Advisor agreed to cease and desist such practice, paid fines,
and registered in each state.
THE INVESTMENT ADVISOR
U.S. Global Investors, Inc., 7900 Callaghan Road, San Antonio, Texas 78229,
under an Investment Advisory Agreement with the Trust dated September 21, 1994,
furnishes investment advice and is responsible for overall management of the
Trust's business affairs. Frank E. Holmes is Chairman of the Board of Directors
and Chief Executive Officer of the Advisor, as well as President and Trustee of
the Trust. Since October 1989, Mr. Holmes has owned more than 25% of the voting
stock of the Advisor and is its controlling person. The Advisor was organized in
1968. The Advisor serves as investment advisor to U.S. Global Investors Funds
and U.S. Global Accolade Funds, a family of mutual funds with approximately $1.5
billion in assets.
The Advisor provides management and investment advisory services to the
Trust and to the funds in the Trust. The Advisor furnishes an investment program
for the Fund, determines, subject to the overall supervision and review of the
Board of Trustees of the Trust, what investments should be purchased, sold and
held, and makes changes on behalf of the Trust in the investments of the Fund.
The Advisor provides the Trust with office space, facilities and business
equipment and provides the services of executive and clerical personnel for
administering the affairs of the Trust.
Investment decisions for the Fund are made independently from those of
other investment companies advised by U.S. Global Investors, Inc.
The Advisory Agreement with the Trust provides for the Fund to pay the
Advisor a flat management fee of 1% of the Fund's average net assets.
The Advisor may, out of profits derived from its management fee, pay
certain financial institutions (which may include banks, trust companies,
securities dealers and other industry professionals) a "servicing fee" for
performing certain administrative servicing functions for Fund shareholders to
the extent these institutions are allowed to do so by applicable statute, rule
or regulation. These fees will be paid periodically and will generally be based
on a percentage of the value of the institutions' client Fund shares, although
such fees may be account based.
The Transfer Agency Agreement with the Trust provides for the Fund to pay
USSI an annual fee of $23 per account ( 1/12 of $23 monthly). In connection with
obtaining and/or providing administrative services to the beneficial owners of
Fund shares through broker/dealers, banks, trust companies and similar
institutions which provide such services and maintain an omnibus account with
the Transfer Agent, the Fund will pay to the Transfer Agent a monthly fee equal
to one-twelfth ( 1/12) of 12.5 basis points (.00125) of the value of the shares
of the fund held in accounts at the institutions,
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which payment will not exceed $1.92 multiplied by the average daily number of
accounts holding Fund shares at the institutions. These fees cover the usual
transfer agency functions. In addition, the Fund bears certain other Transfer
Agent expenses such as the costs of record retention and postage, as well as the
telephone and line charges (including the toll-free 800 service) used by
shareholders to contact the Transfer Agent. Transfer Agent fees and expenses
including reimbursed expenses, are reduced by the amount of small account
charges and account closing fees the Transfer Agent is paid.
Brown Brothers Harriman & Co. provides bookkeeping and accounting,
custodian and administrative services for the fund.
The Advisor is reimbursed certain costs for in-house legal services
pertaining to the Fund.
The Fund pays all other expenses for its operations and activities. The
expenses borne by the Fund include the charges and expenses of any shareholder
servicing agents; custodian fees; legal and auditor expenses; brokerage
commissions for portfolio transactions; the advisory fee; extraordinary
expenses; expenses of shareholders and trustee meetings; expenses for preparing,
printing, and mailing prospectuses, proxy statements, reports and other
communications to shareholders; and expenses of registering and qualifying
shares for sale, among others.
DISTRIBUTION EXPENSE PLAN
Pursuant to Rule 12b-1 under the Investment Company Act of 1940, the Fund
has adopted a distribution expense plan (the "Plan") under which Fund assets
may be utilized to pay for or reimburse expenditures in connection with sales
and promotional services related to the distribution of Fund shares, including
personal services provided to prospective and existing Fund shareholders, which
include the costs of: printing and distribution of prospectuses and promotional
materials; making slides and charts for presentations; assisting shareholders
and prospective investors in understanding and dealing with the Fund; and travel
and out-of-pocket expenses (e.g., copy and long distance telephone charges)
related thereto. Fund assets may be utilized to pay for or reimburse such
expenditures provided the total amount expended pursuant to this Plan does not
exceed 0.25% of net assets on an annual basis.
Under the terms of the Plan the Fund may pay a "servicing fee" of up to
0.25% of the Fund's average net assets ( 1/12 of 0.25% monthly) to persons or
institutions for performing certain servicing functions for Fund shareholders.
These fees will be paid periodically and will generally be based on a percentage
of the value of Fund shares held by the institution's clients. The Plan allows
the Fund to pay for or reimburse expenditures in connection with sales and
promotional services related to the distribution of Fund shares, including
personal services provided to prospective and existing
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Fund shareholders. See "Distribution Plan" in the Statement of Additional
Information.
PERFORMANCE INFORMATION
From time to time, in advertisements or in reports to shareholders or
prospective shareholders, the Fund may compare its performance, either in terms
of its yield, total return or its yield and total return, to that of other
mutual funds with similar investment objectives and to stock or other indices as
reported in various periodicals. Performance comparisons should not be
considered as representative of the future performance of the Fund.
The Fund's average annual total return is computed by determining the
average annual compounded rate of return for a specified period that, if applied
to a hypothetical $1,000 initial investment, would produce the redeemable value
of that investment at the end of the period, assuming reinvestment of all
dividends and distributions and with recognition of all recurring charges. The
Fund may also utilize a total return for differing periods computed in the same
manner but without annualizing the total return.
The Fund's "yield" refers to the income generated by an investment in the
Fund over a 30-day (or one-month) period (which period will be stated in the
advertisement). Yield is computed by dividing the net investment income per
share earned during the most recent calendar month by the maximum offering price
per share on the last day of such month. This income is then "annualized."
That is, the amount of income generated by the investment during that 30-day
period is assumed to be generated each month over a 12-month period and is shown
as a percentage of the investment.
For purposes of the yield calculation, interest income is computed based on
the yield to maturity of each debt obligation and dividend income is computed
based upon the stated dividend rate of each security in the Funds portfolio, and
all recurring charges are recognized.
The standard total return and yield results do not take into account
recurring and nonrecurring charges for optional services which only certain
shareholders elect and which involve nominal fees such as the $5 fee for
exchanges. These fees have the effect of reducing the actual return realized by
shareholders.
25
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U.S. GLOBAL ACCOLADE FUNDS
SHARES OF THE FUND ARE SOLD AT NET ASSET
VALUE WITHOUT SALES COMMISSIONS
OR REDEMPTION FEES
MegaTrends Fund
INVESTMENT ADVISOR
U.S. Global Investors, Inc.
7900 Callaghan Road
San Antonio, Texas 78229
SUB-ADVISOR
Money Growth Institute, Inc.
45 Rockefeller Plaza, Suite 2570
New York, New York 10111
TRANSFER AGENT
United Shareholder Services, Inc.
P.O. Box 781234
San Antonio, Texas 78278-1234
CUSTODIAN, FUND ACCOUNTANT AND ADMINISTRATOR
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
LEGAL COUNSEL
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street, Suite 2600
Chicago, Illinois 60601
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
700 North St. Mary's, Suite 900
San Antonio, Texas 78205
No Load
Be Sure to Retain This Prospectus.
It Contains Valuable Information.
- --------------------------------------------------------------------------------
PART B. STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
U.S. GLOBAL ACCOLADE FUNDS
MEGATRENDS FUND
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information is not a prospectus. You should read it
in conjunction with the prospectus dated November 1, 1997 (the "Prospectus").
You may request a prospectus from U. S. Global Investors, Inc. (the "Adviser"),
7900 Callaghan Road, San Antonio, Texas 78229, by calling 1-800-US-FUNDS
(1-800-873-8637).
The date of this Statement of Additional Information is November 1, 1997.
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STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
PAGE
GENERAL INFORMATION..........................................................3
INVESTMENT OBJECTIVES AND POLICIES...........................................3
INVESTMENT LIMITATIONS.......................................................8
MANAGEMENT OF THE FUND.......................................................9
PRINCIPAL HOLDERS OF SECURITIES.............................................11
INVESTMENT ADVISORY SERVICES................................................11
TRANSFER AGENCY AND OTHER SERVICES..........................................12
DISTRIBUTION PLAN...........................................................13
CERTAIN PURCHASES OF SHARES OF THE FUND.....................................13
ADDITIONAL INFORMATION ON REDEMPTIONS.......................................14
CALCULATION OF PERFORMANCE DATA.............................................14
TAX STATUS..................................................................15
CUSTODIAN, FUND ACCOUNTANT, AND ADMINISTRATOR...............................16
INDEPENDENT ACCOUNTANTS ....................................................17
FINANCIAL STATEMENTS........................................................17
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GENERAL INFORMATION
U.S. Global Accolade Funds ("Trust") is an open-end management investment
company and is a business trust organized under the laws of the Commonwealth of
Massachusetts. The MegaTrends Fund ("Fund") is a series of the Trust and
represents a separate, diversified portfolio of securities (a "Portfolio").
The assets received by the Trust from the issue or sale of shares of the Fund,
and all income, earnings, profits and proceeds thereof, subject to the rights of
creditors only, are separately allocated to such Fund. They constitute the
underlying assets of each fund, are required to be segregated on the books of
accounts, and are to be charged with the expenses with respect to such Fund. Any
general expenses of the Trust, not readily identifiable as belonging to a
particular Fund, will be allocated by or under the direction of the Board of
Trustees ("Board" or "Trustees") in such manner as the Board determines to be
fair and equitable.
Each share of the Fund represents an equal proportionate interest in the Fund
with each other share and is entitled to such dividends and distributions, out
of the income belonging to that Fund, as are declared by the Board. Upon
liquidation of the Trust, shareholders of each fund are entitled to share pro
rata in the net assets belonging to the Fund available for distribution.
As described in THE TRUST section in the Prospectus, the Trust's Master Trust
Agreement provides that no annual or regular meeting of shareholders is
required. However, the Trust has a staggered Board with terms such that at least
25% of the Trustees expire every three years. The Trustees serve in that
capacity for six-year terms. Thus, there will ordinarily be no shareholder
meetings unless otherwise required by the Investment Company Act of 1940.
On any matter submitted to shareholders, the holder of each share is entitled to
one vote per share (with proportionate voting for fractional shares). On matters
affecting any individual fund, a separate vote of that fund would be required.
Shareholders of any fund are not entitled to vote on any matter which does not
affect their fund but which requires a separate vote of another fund.
Shares do not have cumulative voting rights, which means that in situations in
which shareholders elect Trustees, holders of more than 50% of the shares voting
for the election of Trustees can elect 100% of the Trust's Trustees, and the
holders of less than 50% of the shares voting for the election of Trustees will
not be able to elect any person as a Trustee.
Shares have no preemptive or subscription rights and are fully transferable.
There are no conversion rights.
Under Massachusetts law, the shareholders of the Trust could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Master Trust Agreement disclaims shareholder liability for acts or
obligations of the Trust and requires that notice of such disclaimer be given in
each agreement, obligation or instrument entered into or executed by the Trust
or the Trustees. The Master Trust Agreement provides for indemnification out of
the Trust's property for all losses and expenses of any shareholder held
personally liable for the obligations of the Trust. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Trust itself would be unable to meet its
obligations.
INVESTMENT OBJECTIVES AND POLICIES
The following information supplements the discussion of the Fund's investment
objectives and policies discussed in the Fund's Prospectus.
EQUITY PRICE FLUCTUATION
The Fund invests primarily in equity securities. Equity securities are subject
to price fluctuations depending on a variety of factors, including market,
business, and economic conditions.
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FOREIGN INVESTMENTS
Subject to the Fund's investment policies and quality standards, the Fund may
invest in the securities of foreign issuers. Investing in securities issued by
companies whose principal business activities are outside the United States may
involve significant risks not present in domestic investments. For example,
there is generally less publicly available information about foreign companies,
particularly those not subject to the disclosure and reporting requirements of
the United States securities laws. Foreign issuers are generally not bound by
uniform accounting, auditing and financial reporting standards and requirements
of practice comparable to those applicable to domestic issuers. Investments in
foreign securities also involve the risk of possible adverse changes in
investment or exchange control regulations, expropriation or confiscatory
taxation, limitation of the removal of funds or the assets of the Fund,
political or financial instability or diplomatic and other developments which
could affect such investment. Further, economies of particular countries or
areas of the world may differ favorably or unfavorably from the economy of the
United States. It is anticipated that in most cases the best available market
for foreign securities will be on exchanges or in over-the-counter markets
located outside of the United States. Foreign stock markets, while growing in
volume and sophistication, are generally not as developed as those in the United
States, and securities of some foreign issuer (particularly those located in
developing countries) may be less liquid and more volatile than securities of
comparable United States Companies. In addition, foreign brokerage commissions
are generally higher than commissions on securities traded in the United States
and may be non-negotiable. In general, there is less overall governmental
supervision and regulation of foreign securities markets, broker/dealer, and
issuers than in the United States.
WARRANTS AND RIGHTS
Warrants are options to purchase equity securities at a specified price and are
valid for a specific time period. Rights are similar to warrants, but normally
have a short duration and are distributed by the issuer to its shareholders. The
Fund may realize a loss equal to all or a portion of the price paid for the
warrants or rights if the price of the underlying security decreases or does not
increase by more than the amount paid for the warrants or rights. The Fund may
purchase warrants and rights, provided that the Fund does not invest more than
5% of its net assets at the time of purchase in warrants and rights other than
those that have been acquired in units or attached to other securities. Of such
5%, no more than 2% of the Fund's assets at the time of purchase may be invested
in warrants which are not listed on either the New York Stock Exchange or the
American Stock Exchange.
QUALITY RATINGS OF CORPORATE BONDS
The ratings of Moody's Investors Service, Inc. and Standard & Poor's Ratings
Group for corporate bonds in which the Fund may invest are as follows:
MOODY'S INVESTORS SERVICE, INC.. Aaa - Bonds which are rated Aaa are judged to
be of the best quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edge." Interest payments are protected by a
large or an exceptionally stable margin, and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues.
Aa - Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what is generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa - Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
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Ba - Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
STANDARD & POOR'S RATINGS GROUP. AAA - Bonds rated AAA have the highest rating
assigned by Standard & Poor's to a debt obligation. Capacity to pay interest and
repay principal is extremely strong.
AA - Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A - Bonds rated A have a strong capacity to pay interest and repay principal
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated categories.
BB and B - Bonds rated BB and B are regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the lowest degree of
speculation and B the higher degree of speculation. While such bonds will likely
have some quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
RISK FACTORS OF LOWER-RATED SECURITIES. Lower-rated debt securities (commonly
called "junk bonds") may be subject to certain risk factors to which other
securities are not subject to the same degree. An economic downturn tends to
disrupt the market for lower-rated bonds and adversely affect their values. Such
an economic downturn may be expected to result in increased price volatility of
lower-rated bonds and of the value of the Fund's shares, and an increase in
issuers' defaults on such bonds.
Also, many issuers of lower-rated bonds are substantially leveraged, which may
impair their ability to meet their obligations. In some cases, the securities in
which the Fund invests are subordinated to the prior payment of senior
indebtedness, thus potentially limiting the Fund's ability to recover full
principal or to receive payments when senior securities are in default.
The credit rating of a security does not necessarily address its market value
risk. Also, ratings may, from time to time, be changed to reflect developments
in the issuer's financial condition. Lower-rated securities held by the Fund
have speculative characteristics which are apt to increase in number and
significance with each lower rating category.
When the secondary market for lower-rated bonds becomes increasingly illiquid,
or in the absence of readily available market quotations for lower-rated bonds,
the relative lack of reliable, objective data makes the responsibility of the
Trustees to value such securities more difficult, and judgment plays a greater
role in the valuation of portfolio securities. Also, increased illiquidity of
the market for lower-rated bonds may affect the Fund's ability to dispose of
portfolio securities at a desirable price.
In addition, if the Fund experiences unexpected net redemptions, it could be
forced to sell all or a portion of its lower- rated bonds without regard to
their investment merits, thereby decreasing the asset base upon which the Fund's
expenses can be spread and possibly reducing the Fund's rate of return. Also,
prices of lower-rated bonds have been found to be less sensitive to interest
rate changes and more sensitive to adverse economic changes and individual
corporate developments than more highly rated investments. Certain laws or
regulations may have a material effect on the Fund's investments in lower-rated
bonds.
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COMMERCIAL PAPER AND OTHER MONEY MARKET INSTRUMENTS
Commercial paper consists of short-term (usually from one to two hundred-seventy
days) unsecured promissory notes issued by corporations in order to finance
their current operations. The Fund will only invest in commercial paper rated
A-1 by Standard & Poor's Ratings Group or Prime-1 by Moody's Investors Service,
Inc. or unrated paper of issuers who have outstanding unsecured debt rated AA or
better by Standard & Poor's or Aa or better by Moody's. Certain notes may have
floating or variable rates. Variable and floating rate notes with a demand
notice period exceeding seven days will be subject to the Fund's restriction on
illiquid investments (see "Investment Limitations") unless, in the judgment of
the Adviser, such note is liquid.
The rating of Prime-1 is the highest commercial paper rating assigned by Moody's
Investors Service, Inc. Among the factors considered by Moody's in assigning
ratings are the following: valuation of the management of the issuer; economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; evaluation of the
issuer's products in relation to competition and customer acceptance; liquidity;
amount and quality of long-term debt; trend of earnings over a period of 10
years; financial strength of the parent company and the relationships which
exist with the issuer; and, recognition by the management of obligations which
may be present or may arise as a result of public interest questions and
preparations to meet such obligations. These factors are all considered in
determining whether the commercial paper is rated Prime-1. Commercial paper
rated A (highest quality) by Standard & Poor's Ratings Group has the following
characteristics: liquidity ratios are adequate to meet cash requirements;
long-term senior debt is rated "A" or better, although in some cases "BBB"
credits may be allowed; the issuer has access to at least two additional
channels of borrowing; basic earnings and cash flow have an upward trend with
allowance made for unusual circumstances; typically, the issuer's industry is
well established and the issuer has a strong position within the industry; and,
the reliability and quality of management are unquestioned. The relative
strength or weakness of the above factors determines whether the issuer's
commercial paper is rated A-1.
The Fund may invest in short-term bank debt instruments such as certificates of
deposit, bankers' acceptances and time deposits issued by national banks and
state banks, trust companies and mutual savings banks, or by banks or
institutions the accounts of which are insured by the Federal Deposit Insurance
Corporation or the Federal Savings and Loan Insurance Corporation. The Fund will
only invest in bankers' acceptances of banks having a short-term rating of A-1
by Standard & Poor's Ratings Group or Prime-1 by Moody's Investors Service, Inc.
The Fund will not invest in time deposits maturing in more than seven days if,
as a result thereof, more than 10% of the value of its net assets would be
invested in such securities and other illiquid securities.
As described more fully in the Prospectus, the Fund may invest a portion of its
assets in repurchase agreements with domestic broker/dealers, banks and other
financial institutions.
WHEN-ISSUED SECURITIES
The Fund will only make commitments to purchase securities on a when-issued
basis with the intention of actually acquiring the securities. In addition, the
Fund may purchase securities on a when-issued basis only if delivery and payment
for the securities take place within 120 days after the date of the transaction.
In connection with these investments, the Fund will direct the custodian to
place cash, U.S. Government obligations or high-grade debt instruments in a
segregated account in an amount sufficient to make payment for the securities to
be purchased. When a segregated account is maintained because the Fund purchases
securities on a when-issued basis, the assets deposited in the segregated
account will be valued daily at market for the purpose of determining the
adequacy of the securities in the account. If the market value of such
securities declines, additional cash or securities will be placed in the account
on a daily basis so that the market value of the account will equal the amount
of the Fund's commitments to purchase securities on a when-issued basis. To the
extent funds are in a segregated account, they will not be available for new
investment or to meet redemptions. Securities purchased on a when-issued basis
and the securities held in the Fund's portfolio are subject to changes in market
value based upon changes in the level of interest rates (which will generally
result in all of those securities changing in value in the same way; I.E., all
those securities experiencing appreciation when interest rates decline and
depreciation when interest rates rise). Therefore, if in order to achieve higher
returns, the Fund remains substantially fully invested at the same time that it
has purchased securities on a when-issued basis, there will be a possibility
that the market value of the Fund's assets will experience greater fluctuation.
The purchase of securities on a when-issued basis may involve a risk of loss if
the broker-dealer selling the securities fails to deliver after the value of the
securities has risen.
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When the time comes for the Fund to make payment for securities purchased on a
when-issued basis, the Fund will do so by using then available cash flow, by
sale of the securities held in the segregated account, by sale of other
securities or, although it would not normally expect to do so, by directing the
sale of the securities purchased on a when-issued basis themselves (which may
have a market value greater or less than the Fund's payment obligation).
Although the Fund will only make commitments to purchase securities on a
when-issued basis with the intention of actually acquiring the securities, the
Fund may sell these securities before the settlement date if it is deemed
advisable by the Adviser or Sub- Adviser as a matter of investment strategy.
LOANS OF PORTFOLIO SECURITIES
The Fund may make short-term loans of its portfolio securities to banks, brokers
and dealers. Lending portfolio securities exposes the Fund to the risk that the
borrower may fail to return the loaned securities or may not be able to provide
additional collateral or that the Fund may experience delays in recovery of the
loaned securities or loss of rights in the collateral if the borrower fails
financially. To minimize these risks, the borrower must agree to maintain
collateral marked to market daily, in the form of cash or U.S. Government
obligations, with the Fund's custodian in an amount at least equal to the market
value of the loaned securities. It is the Fund's policy, which may not be
changed without the affirmative vote of a majority of its outstanding shares,
that such loans will not be made if as a result the aggregate of all outstanding
loans exceeds 25% of the value of the Fund's total assets.
Under applicable regulatory requirements (which are subject to change), the loan
collateral must, on each business day, at least equal the value of the loaned
securities. To be acceptable as collateral, letters of credit must obligate a
bank to pay amounts demanded by the Fund if the demand meets the terms of the
letter. Such terms and the issuing bank must be satisfactory to the Fund. The
Fund receives amounts equal to the dividends or interest on loaned securities
and also receives one or more of (a) negotiated loan fees, (b) interest on
securities used as collateral, or (c) interest on short-term debt securities
purchased with such collateral; either type of interest may be shared with the
borrower. The Fund may also pay fees to placing brokers as well as custodian and
administrative fees in connection with loans. Fees may only be paid to a placing
broker provided that the Trustees determine that the fee paid to the placing
broker is reasonable and based solely upon services rendered, that the Trustees
separately consider the propriety of any fee shared by the placing broker with
the borrower, and that the fees are not used to compensate the Adviser or any
affiliated person of the Fund or an affiliated person of the Adviser or other
affiliated person. The terms of the Fund's loans must meet applicable tests
under the Internal Revenue Code and permit the Fund to reacquire loaned
securities on five days' notice or in time to vote on any important matter.
PORTFOLIO TURNOVER
The Fund's management buys and sells securities for the Fund to accomplish
investment objectives. The Fund's investment policy may lead to frequent changes
in investments, particularly in periods of rapidly fluctuating interest rates.
The Fund's investments may also be traded to take advantage of perceived
short-term disparities in market values.
A change in the securities held by the Fund is known as "portfolio turnover."
For the fiscal years ended June 30, 1997, and 1996, the Fund's portfolio
turnover rate was 62% and 115%, respectively. A high portfolio turnover rate may
cause the Fund to pay higher transaction expenses, including more commissions
and markups, and also result in quicker recognition of capital gains, resulting
in more capital gain distributions which may be taxable to shareholders. Any
short-term gain realized on securities will be taxed to shareholders as ordinary
income. See TAX STATUS section.
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities for the Fund and the placing of the Fund's
securities transactions and negotiation of commission rates, where applicable,
are made by Money Growth Institute, Inc. ("Sub-Adviser") and are subject to
review by the Fund's Adviser and Board of Trustees of the Fund. In the purchase
and sale of portfolio securities, the Sub-Adviser seeks best execution for the
Fund, taking into account such factors as price (including the applicable
brokerage commission or dealer spread), the execution capability, financial
responsibility and responsiveness of the broker or dealer and the brokerage and
research services provided by the broker or dealer. The Sub-Adviser generally
seeks favorable prices and commission rates that are reasonable in relation to
the benefits received. For the fiscal years ended June 30, 1997, 1996 and 1995
the Fund paid brokerage commissions of $87,809, $120,408 and $95,561,
respectively.
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The Fund has no obligation to deal with any broker or dealer in the execution of
securities transactions. Affiliates of the Fund or of the Sub-Advisor may effect
securities transactions which are executed on a national securities exchange or
transactions in the over-the-counter market conducted on an agency basis. The
Sub-Advisor owns a limited partnership interest in Brimberg & Co., L.P.
("Brimberg"), a registered broker-dealer. During the fiscal years ended June 30,
1997, 1996 and 1995, the Fund paid Brimberg Brokerage commissions of $87,809,
$120,408 and $95,561, respectively, which equals 100% of the total brokerage
commissions paid by the Fund for effecting 100% of the Fund's portfolio
transactions involving the payment of brokerage commissions. Because commissions
received from the Fund are excluded when calculating the Sub-Advisor's profits
as a Brimberg limited partner, the Sub-Advisor does not receive material
benefits from Brimberg's brokerage services to the Fund. The Fund will not
effect any brokerage transactions in its portfolio securities with an affiliated
broker if such transactions would be unfair or unreasonable to its shareholders.
Generally, the Fund attempts to deal directly with the dealers who make a market
in the securities involved unless better prices and execution are available
elsewhere. Such dealers usually act as principals for their own account. On
occasion, portfolio securities for the Fund may be purchased directly from the
issuer.
The Adviser and Sub-Advisor are specifically authorized to select brokers who
also provide brokerage and research services to the Fund and/or other accounts
over which the Adviser or Sub-Advisor exercises investment discretion and to pay
such brokers a commission in excess of the commission another broker would
charge if the Adviser or Sub- Advisor determines in good faith that the
commission is reasonable in relation to the value of the brokerage and research
services provided. The determination may be viewed in terms of a particular
transaction or the Advisor's or Sub- Advisor's overall responsibilities with
respect to the Fund and to accounts over which they exercise investment
discretion.
Research services include securities and economic analyses, reports on issuers'
financial conditions and future business prospects, newsletters and opinions
relating to interest trends, general advice on the relative merits of possible
investment securities for the Fund and statistical services and information with
respect to the availability of securities or purchasers or sellers of
securities. Although this information is useful to the Fund and the Adviser or
Sub-Advisor, it is not possible to place a dollar value on it. Research services
furnished by brokers through whom the Fund effects securities transactions may
be used by the Adviser or Sub-Advisor in servicing all of its accounts and not
all such services may be used by the Adviser or Sub-Advisor in connection with
the Fund.
INVESTMENT LIMITATIONS
The MegaTrends Fund will not change any of the following investment restrictions
without the affirmative vote of a majority of the outstanding voting securities
of the Fund, which, as used herein, means the lesser of (1) 67% of the Fund's
outstanding shares present at a meeting at which more than 50% of the
outstanding shares of the Fund are represented either in person or by proxy, or
(2) more than 50% of the Fund's outstanding shares.
THE FUND MAY NOT:
1. Invest in securities of any one issuer if immediately after and as a result
of such investment more than 5% of the total assets of the Fund, at market
value, would be invested in the securities of such issuer. This restriction
does not apply to investments in securities of the United States
Government, its agencies or instrumentalities.
2. Purchase more than 10% of the outstanding voting securities, or any class
of securities, of any one issuer. This restriction does not apply to
investments in securities of the United States Government, its agencies or
instrumentalities.
3. Invest more than 25% of its total assets in the securities of issuers in
any particular industry. This restriction does not apply to investments in
securities of the United States Government, its agencies or
instrumentalities.
4. Purchase securities of other investment companies, except in connection
with a merger, consolidation, acquisition or reorganization.
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5. Purchase or sell commodities or real estate. However, the Fund may invest
in publicly traded securities secured by real estate or issued by companies
which invest in real estate or real estate interests.
6. Purchase securities on margin, make short sales of securities or maintain a
short position, except that the Fund may obtain such short-term credit as
may be necessary for the clearance of purchases and sales of portfolio
securities. This restriction on short sales does not apply to short sales
"against the box" (I.E., when the Fund owns or is long on the securities
sold short).
7. Lend money, except by engaging in repurchase agreements or by purchasing
publicly distributed or privately placed debt obligations in which the Fund
may invest consistent with its investment objectives and policies. The Fund
may make loans of its portfolio securities in an aggregate amount not
exceeding 25% of its total assets, provided that such loans are
collateralized by cash or cash equivalents or U.S. Government obligations
in an amount equal to the market value of the securities loaned, marked to
market on a daily basis.
8. Borrow money, except for (i) temporary bank borrowings not in excess of 5%
of the value of the Fund's total assets for emergency or extraordinary
purposes, or (ii) short-term credits not in excess of 5% of the value of
the Fund's total assets as may be necessary for the clearance of securities
transactions.
9. Issue senior securities as defined in the Investment Company Act of 1940,
as amended, or mortgage, pledge, hypothecate or in any way transfer as
security for indebtedness any securities owned or held by the Fund except
as may be necessary in connection with borrowings described in (8) above,
and then not exceeding 10% of the Fund's total assets, taken at the lesser
of cost or market value.
10. Underwrite securities of other issuers except to the extent the Fund may be
deemed an underwriter under the Securities Act of 1933, as amended, in
selling portfolio securities.
11. Invest more than 10% of its net assets in securities which are illiquid.
12. Invest in oil, gas or other mineral leases.
13. Invest more than 5% of its net assets in warrants and will not invest more
than 2% of its net assets in warrants which are not listed on the New York
or American Stock Exchange. This restriction does not apply to investment
in warrants acquired in units or attached to securities.
The following investment restrictions may be changed by the Board of Trustees
without a shareholder vote.
THE FUND MAY NOT:
1. Pledge, mortgage or hypothecate the assets of the Fund.
2. Engage in short sales of securities except for "against the box" as
described in investment limitation 6.
3. Loan its portfolio securities.
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage, resulting from a change in values of
portfolio securities or amount of net assets, will not be considered a violation
of any of the foregoing restrictions.
MANAGEMENT OF THE FUND
The Trustees and Officers of the Trust and their principal occupations during
the past five years are set forth below. Except as otherwise indicated, the
business address of each is 7900 Callaghan Road, San Antonio, Texas 78229.
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<PAGE>
TRUST
NAME AND ADDRESS POSITION NAME AND ADDRESS
- ------------------ -------- -----------------------------------------
Richard E. Hughs Trustee Professor at the School of Business of
11 Dennin Drive the State University of New York at
Menands, NY 12204 Albany from 1990 to present; Dean, School
of Business 1990-1994; Director of the
Institute for the Advancement of Health
Care Management, 1994 - present.
Corporate Vice President, Sierra Pacific
Resources, Reno, NV, 1985-1990. Dean and
Professor, College of Business
Administration, University of Nevada,
Reno, 1977-1985. Associate Dean, Stern
School of Business, New York University,
New York City, 1970-1977.
Clark R. Mandigo Trustee Business consultant since 1991. From 1985
1250 N.E. Loop 410 to 1991, President, Chief Executive
Suite 900 Officer, and Director of Intelogic Trace,
San Antonio, Texas Inc., a nationwide company which sells,
78209 leases and maintains computers and
telecommunications systems and equipment.
Prior to 1985, President of BHP Petroleum
(Americas), Ltd., an oil and gas
exploration and development company.
Director of Palmer Wireless, Inc., Lone
Star Steakhouse & Saloon, Inc. and
Physician Corporation of America.
Formerly a Director of Datapoint
Corporation. Trustee for Pauze/Swanson
United Services Funds from November 1993
to February 1996.
Frank E. Holmes (1) Trustee, Chairman of the Board of Directors and
President, Chief Executive Officer of the Adviser.
Chief Since October 1989 Mr. Holmes has served
Executive and continues to serve in various
Officer positions with the Adviser, its
subsidiaries and the investment companies
it sponsors. Director of Franc-Or
Resource Corp. from November 1994 to
November 1996. Director of Adventure
Capital Limited from January 1996 to July
1997 and Director of Vedron Gold, Inc.
from August 1996 to March 1997. Director
of 71316 Ontario, Inc. since April 1987
and of F. E. Holmes Organization, Inc.
since July 1978. Director of Marleau,
Lemire Inc. from January 1995 to January
1996. Director of United Services Canada,
Inc. since February 1995 and Chief
Executive Officer from February to August
1995.
Susan B. McGee Executive Executive Vice President, Corporate
Vice Secretary and General Counsel of the
President, Adviser. Since September 1992 Ms. McGee
Secretary, as served and continues to serve in
General various positions with the Adviser, its
Counsel subsidiaries, and the investment
companies it sponsors. Before September
1992 Ms. McGee was a student at St.
Mary's Law School.
Thomas D. Tays Vice Vice President, Securities Counsel,
President, Director of Compliance and Assistant
Securities Secretary of the Adviser. Vice President,
Counsel, Securities Counsel, Chief Financial
Director of Officer, Director of Compliance and
Compliance Secretary of the Trust. Since September
1993, Mr. Tays has served and continues
to serve in various positions with the
Adviser, its subsidiaries, and the
investment companies it sponsors. Before
September 1993, Mr. Tays was an attorney
in private practice.
David J. Clark Chief Chief Financial Officer, Chief Operating
Financial Officer of the Adviser. Foreign Service
Officer Officer with U.S. Agency for
International Development in the U.S.
Embassy, Bonn, West Germany from May 1992
to May 1997. Audit Supervisor for
University of Texas Health Science Center
from April 1991 to April 1992.
Auditor-in-Charge for Texaco, Inc. from
August 1987 to June 1990.
- ------------------------------------
(1) This Trustee may be deemed an "interested person" of the Trust as defined
in the Investment Company Act of 1940.
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<PAGE>
PRINCIPAL HOLDERS OF SECURITIES
As of October 30, 1997, the Officers and Trustees of the Trust, as a group,
owned approximately 1% of the outstanding shares of the Fund. Management is
unaware of any shareholders beneficially owning 5% or more of the outstanding
shares of the Fund.
INVESTMENT ADVISORY SERVICES
The investment adviser to U.S. Global Accolade Funds is U.S. Global Investors,
Inc. ("Adviser"), a Texas corporation, pursuant to an advisory agreement dated
September 21, 1994 and amended November 15, 1996. Frank E. Holmes, Chief
Executive Officer and a Director of the Adviser, as well as a Trustee, President
and Chief Executive Officer of the Trust, beneficially owns more than 25% of the
outstanding voting stock of the Adviser and may be deemed to be a controlling
person of the Adviser.
In addition to the services described in the Fund's Prospectus, the Adviser will
provide the Trust with office space, facilities and simple business equipment,
and will provide the services of executive and clerical personnel for
administering the affairs of the Trust. It will compensate all personnel,
Officers, and Trustees of the Trust, if such persons are employees of the
Adviser or its affiliates, except that the Trust will reimburse the Adviser for
a portion of the compensation of the Adviser's employees who perform certain
legal services for the Trust, including state securities law regulatory
compliance work, based upon the time spent on such matters for the Trust.
The Trust pays all other expenses for its operations and activities. Each of the
funds of the Trust pays its allocable portion of these expenses. The expenses
borne by the Trust include the charges and expenses of any transfer agents and
dividend disbursing agents, custodian fees, legal and auditing expenses,
bookkeeping and accounting expenses, brokerage commissions for portfolio
transactions, taxes, if any, the advisory fee, extraordinary expenses, expenses
of issuing and redeeming shares, expenses of shareholder and trustee meetings,
expenses of preparing, printing and mailing proxy statements, reports and other
communications to shareholders, expenses of registering and qualifying shares
for sale, fees of Trustees who are not "interested persons" of the Adviser,
expenses of attendance by Officers and Trustees at professional meetings of the
Investment Company Institute, the No-Load Mutual Fund Association or similar
organizations, and membership or organization dues of such organizations,
expenses of preparing and setting in type prospectuses and periodic reports and
expenses of mailing them to current shareholders, cost of fidelity bond
premiums, cost of maintaining the books, and records of the Trust, and any other
charges and fees not specifically enumerated.
The Trust and the Adviser, in connection with the Fund, have entered into a
sub-advisory agreement with another firm as discussed in the Prospectus. The
Sub-Adviser's compensation is set forth in the Prospectus and is paid by the
Adviser. The Fund is not responsible for the Sub-Adviser's fee.
The Adviser may, out of profits derived from its management fee, pay certain
financial institutions (which may include banks, securities dealers, and other
industry professionals) a "servicing fee" for performing certain administrative
servicing functions for Fund shareholders to the extent these institutions are
allowed to do so by applicable statute, rule or regulation. These fees will be
paid periodically and will generally be based on a percentage of the value of
the institutions' client Fund shares. The Glass-Steagall Act prohibits banks
from engaging in the business of underwriting, selling or distributing
securities. However, in the Adviser's opinion, such laws should not preclude a
bank from performing shareholder administrative and servicing functions as
contemplated herein.
The Advisory Agreement was approved by the Board of Trustees of the Trust
(including a majority of the "disinterested Trustees") with respect to the Fund
and was approved by shareholders of the Fund on November 15, 1996. The Advisory
Agreement provides that it will continue initially for two years, and from year
to year thereafter, with respect to each fund, as long as it is approved at
least annually both (i) by a vote of a majority of the outstanding voting
securities of such fund (as defined in the Investment Company Act of 1940 [the
"Act"]) or by the Board of Trustees of the Trust, and (ii) by a vote of a
majority of the Trustees who are not parties to the Advisory Agreement or
"interested persons" of any party thereto cast in person at a meeting called for
the purpose of voting on such approval. The Advisory Agreement may be terminated
on 60 days' written notice by either party and will terminate automatically if
it is assigned.
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<PAGE>
The Adviser and the Sub-Adviser provide investment advice to a variety of
clients, including other mutual funds. Investment decisions for each client are
made with a view to achieving their respective investment objectives. Investment
decisions are the product of many factors in addition to basic suitability for
the particular client involved. Thus, a particular security may be bought or
sold for certain clients even though it could have been bought or sold for other
clients at the same time. Likewise, a particular security may be bought for one
or more clients when one or more other clients are selling the security. In some
instances, one client may sell a particular security to another client. It also
sometimes happens that two or more clients simultaneously purchase or sell the
same security, in which event each day's transactions in such security are,
insofar as possible, averaged as to price and allocated between such clients in
a manner which in the Adviser's or Sub-Adviser's opinion is equitable to each
and in accordance with the amount being purchased or sold by each. There may be
circumstances when purchases or sales of portfolio securities for one or more
clients will have an adverse effect on other clients. The Adviser employs a
professional staff of portfolio managers who draw upon a variety of resources
for research information for the clients.
In addition to advising client accounts, the Adviser invests in securities for
its own account. The Adviser has adopted policies and procedures intended to
minimize or avoid potential conflicts with its clients when trading for its own
account. The Adviser's investment objective and strategies are not the same as
its clients, emphasizing venture capital investing, private placement arbitrage,
and speculative short-term trading. The Adviser utilizes a diversified approach
to venture capital investing. Investments typically involve early-stage
businesses seeking initial financing as well as more mature businesses needing
capital for expansion, acquisitions, management buyouts, or recapitalizations.
In general, the Adviser invests in start-up companies in the natural resources
or technology fields.
TRANSFER AGENCY AND OTHER SERVICES
In addition to the services performed for the Fund and the Trust under the
Advisory Agreement, the Adviser, through its subsidiary, United Shareholder
Services, Inc. ("USSI"), provides transfer agent and dividend disbursement agent
services pursuant to the Transfer Agency Agreement as described in the Fund's
Prospectus under MANAGEMENT OF THE FUND--THE INVESTMENT ADVISER. In addition,
lockbox and statement printing services are provided by USSI. The Board of
Trustees recently approved the Transfer Agency and related agreements through
March 8, 1998.
Brown Brothers Harriman & Co. maintains the books and records of the Trust and
of each fund of the Trust and calculates their daily net asset value as
described in the Fund's Prospectus.
A & B Mailers, Inc., a corporation wholly owned by the Adviser, provides the
Trust with certain mail handling services. The charges for such services have
been negotiated by the Audit Committee and A & B Mailers, Inc. Each service is
priced separately.
DISTRIBUTION PLAN
As described in the SERVICE FEE section in the Prospectus, on May 22, 1996, the
Fund adopted a Distribution Plan pursuant to Rule 12b-1 of the 1940 Act
("Distribution Plan"). The Distribution Plan allows the Fund to pay for or
reimburse expenditures in connection with sales and promotional services related
to the distribution of Fund shares, including personal services provided to
prospective and existing Fund shareholders, which includes the costs of printing
and distribution of prospectuses and promotional materials, making slides and
charts for presentations, assisting shareholders and prospective investors in
understanding and dealing with the Fund, and travel and out-of-pocket expenses
(E.G., copy and long distance telephone charges) related thereto.
The total amount expended pursuant to the Distribution Plan may not exceed 0.25%
of the Fund's net assets on an annual basis. For the fiscal year ended June 30,
1997, the Fund paid a total of $38,207 in distribution fees. Distribution
expenses paid by the Adviser or other third parties in prior periods that
exceeded 0.25% of net assets may be paid by the Fund with distribution expenses
accrued pursuant to the 12b-1 plan in the current or future periods, so long as
the 0.25% limitation is never exceeded.
Expenses which the Fund incurs pursuant to the Distribution Plan are reviewed
quarterly by the Board of Trustees. On an annual basis the Distribution Plan is
reviewed by the Board of Trustees as a whole, and by the Trustees who are not
"interested persons" as that term is defined in the 1940 Act and who have no
direct or indirect financial interest in the
Page 12
<PAGE>
operation of the Distribution Plan ("Qualified Trustees"). In their review of
the Distribution Plan, the Board of Trustees, as a whole, and the Qualified
Trustees determine whether, in their reasonable business judgment and in light
of their fiduciary duties under state law and under Section 36(a) and (b) of the
1940 Act, there is reasonable likelihood that the Distribution Plan will benefit
the Fund and its shareholders. The Distribution Plan may be terminated at any
time by vote of a majority of the Qualified Trustees, or by vote of a majority
of the outstanding voting securities of the Fund.
The Fund is unaware of any Trustee or any interested person of the Fund who had
a direct or indirect financial interest in the operations of the Distribution
Plan.
The Fund expects that the Distribution Plan will be used primarily to pay a
"service fee" to persons who provide personal services to prospective and
existing Fund shareholders. Shareholders of the Fund will benefit from these
personal services and the Fund expects to benefit from economies of scale as
more shareholders are attracted to the Fund.
CERTAIN PURCHASES OF SHARES OF THE FUND
Shares of the Fund are continuously offered by the Trust at their net asset
value next determined after an order is accepted. The methods available for
purchasing shares of the Fund are described in the Prospectus. In addition,
shares of the Fund may be purchased using stock, as long as the securities
delivered to the Trust meet the investment objectives and concentration policies
of the Fund, and are otherwise acceptable to the Adviser, which reserves the
right to reject all or any part of the securities offered in exchange for shares
of the Fund. On any such "in kind" purchase, the following conditions will
apply:
1. the securities offered by the investor in exchange for shares of the Fund
must not be in any way restricted as to resale or otherwise be illiquid;
2. securities of the same issuer must already exist in the Fund's portfolio;
3. the securities must have a value which is readily ascertainable (and not
established only by evaluation procedures) as evidenced by a listing on the
American Stock Exchange ("AMEX"), the New York Stock Exchange ("NYSE"), or
National Association of Securities Dealers Automated Quotation System
("NASDAQ");
4. any securities so acquired by the fund will not comprise more than 5% of
that fund's net assets at the time of such exchange;
5. no over-the-counter securities will be accepted unless the principal
over-the-counter market is in the United States; and,
6. the securities are acquired for investment and not for resale.
The Trust believes that this ability to purchase shares of the Fund using
securities provides a means by which holders of certain securities may obtain
diversification and continuous professional management of their investments
without the expense of selling those securities in the public market.
An investor who wishes to make an "in kind" purchase should furnish (either in
writing or by telephone) to the Trust a list with a full and exact description
of all of the securities which he or she proposes to deliver. The Trust will
advise him or her as to those securities which it is prepared to accept and will
provide the investor with the necessary forms to be completed and signed by the
investor. The investor should then send the securities, in proper form for
transfer, with the necessary forms to the Trust and certify that there are no
legal or contractual restrictions on the free transfer and sale of the
securities. The securities will be valued as of the close of business on the day
of receipt by the Trust in the same manner as portfolio securities of the Fund
are valued. See the section entitled HOW SHARES ARE VALUED in the Prospectus.
The number of shares of the Fund, having a net asset value as of the close of
business on the day of receipt equal to the value of the securities delivered by
the investor, will be issued to the investor, less applicable stock transfer
taxes, if any.
Page 13
<PAGE>
The exchange of securities by the investor pursuant to this offer will
constitute a taxable transaction and may result in a gain or loss for Federal
income tax purposes. Each investor should consult his or her tax adviser to
determine the tax consequences under Federal and state law of making such an "in
kind" purchase.
ADDITIONAL INFORMATION ON REDEMPTIONS
SUSPENSION OF REDEMPTION PRIVILEGES
The Trust may suspend redemption privileges or postpone the date of payment for
up to seven days, but cannot do so for more than seven days after the redemption
order is received except during any period (1) when the NYSE is closed, other
than customary weekend and holiday closings, or trading on the Exchange is
restricted as determined by the Securities and Exchange Commission ("SEC"); (2)
when an emergency exists, as defined by the SEC, which makes it not reasonably
practicable for the Trust to dispose of securities owned by it or to fairly
determine the value of its assets; or, (3) as the SEC may otherwise permit.
CALCULATION OF PERFORMANCE DATA
The performance quotations described below are based on historical earnings and
are not intended to indicate future performance.
TOTAL RETURN
The Fund may advertise performance in terms of average annual total return for
1-, 5- and 10-year periods, or for such lesser periods as the Fund has been in
existence. Average annual total return is computed by finding the average annual
compounded rates of return over the periods that would equate the initial amount
invested to the ending redeemable value, according to the following formula:
n
P(1+T) = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
N = number of years
ERV = ending redeemable value of a hypothetical
$1,000 payment made at the beginning of the
1-, 5- or 10-year periods at the end of the
year or period.
The calculation assumes all charges are deducted from the initial $1,000 payment
and assumes all dividends and distributions by the Fund are reinvested at the
price stated in the Prospectus on the reinvestment dates during the period, and
includes all recurring fees that are charged to all shareholder accounts.
The average annual Total Return for the Fund for the periods ended June 30,
1997, are as follows:
1 year .................................................20.7%
5 years ..................................................9.0%
Since Inception (October 21, 1991).........................7.3%
NONSTANDARDIZED TOTAL RETURN
The Fund may provide the above described standard total return results for a
period which ends as of not earlier than the most recent calendar quarter end
and which begins either twelve months before or at the time of commencement of
the Fund's operations. In addition, the Fund may provide nonstandardized total
return results for differing periods, such as for the most recent six months.
Such nonstandardized total return is computed as otherwise described in the
TOTAL RETURN section except that no annualization is made.
SECURITIES AND EXCHANGE COMMISSION THIRTY-DAY YIELD
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<PAGE>
From time to time, the Fund may advertise its yield. A yield quotation is based
on a 30-day (or one month) period and is computed by dividing the net investment
income per share earned during the period by the maximum offering price per
share on the last day of the period, according to the following formula:
A-B 6
YIELD = 2[-----}+1) -1]
CD
Where: A = dividends and interest earned during the period
B = expenses accrued for the period (net of reimbursement)
C = the average daily number of shares
outstanding during the period that
were entitled to receive dividends
D = the maximum offering price per share on
the last day of the period
Solely for the purpose of computing yield, dividend income is recognized by
accruing 1/365 of the stated dividend rate of the security each day that the
Fund owns the security. Generally, interest earned (for the purpose of "a"
above) on debt obligations is computed by reference to the yield to maturity of
each obligation held based on the market value of the obligation (including
actual accrued interest) at the close of business day prior to the start of the
30-day (or one-month) period for which yield is being calculated, or with
respect to obligations purchased during the month, the purchase price (plus
actual accrued interest). The yield of the Fund for June 1997 was 0.39%.
TAX STATUS
TAXATION OF THE FUND--IN GENERAL
As stated in its Prospectus, the Fund intends to qualify as a "regulated
investment company" under Subchapter M of the Internal Revenue Code of 1986, as
amended ("Code"). Accordingly, the Fund will not be liable for Federal income
taxes on its taxable net investment income and capital gain net income that are
distributed to shareholders, provided that the Fund distributes at least 90% of
its net investment income and net short-term capital gain for the taxable year.
To qualify as a regulated investment company, the Fund must, among other things,
(a) derive in each taxable year at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock, securities or foreign currencies, or other income
derived with respect to its business of investing in such stock, securities or
currencies ("90% test"); (b) derive in each taxable year less than 30% of its
gross income from the sale or other disposition of stock or securities held less
than three months ("30% test"); and, (c) satisfy certain diversification
requirements at the close of each quarter of the Fund's taxable year.
The Code imposes a non-deductible 4% excise tax on a regulated investment
company that fails to distribute, during each calendar year, an amount equal to
the sum of (1) at least 98% of its ordinary income for the calendar year, (2) at
least 98% of its capital gain net income for the twelve-month period ending on
October 31 of the calendar year and (3) any portion (not taxable to the Fund) of
the respective balance from the preceding calendar year. The Fund intends to
make such distributions as are necessary to avoid imposition of this excise tax.
TAXATION OF THE FUND'S INVESTMENTS
The Fund's ability to make certain investments may be limited by provisions of
the Code that require inclusion of certain unrealized gains or losses in the
Fund's income for purposes of the 90% test, the 30% test, and the distribution
requirements of the Code, and by provisions of the Code that characterize
certain income or loss as ordinary income or loss rather than capital gain or
loss. Such recognition, characterization and timing rules generally apply to
investments in certain forward currency contracts, foreign currencies and debt
securities denominated in foreign currencies.
TAXATION OF THE SHAREHOLDER
Taxable distributions generally are included in a shareholder's gross income for
the taxable year in which they are received. However, dividends declared in
October, November, or December and made payable to shareholders of record
Page 15
<PAGE>
in such a month, will be deemed to have been received on December 31, if a Fund
pays the dividends during the following January.
Distributions by the Fund will result in a reduction in the fair market value of
the Fund's shares. Should a distribution reduce the fair market value below a
shareholder's cost basis, such distribution nevertheless would be taxable to the
shareholder as ordinary income or long-term capital gain, even though, from an
investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying shares of the Fund just prior to a distribution. The price of such shares
purchased at that time includes the amount of any forthcoming distribution.
Those investors purchasing the Fund's shares immediately prior to a distribution
may receive a return of investment upon distribution which will nevertheless be
taxable to them.
A shareholder of the Fund should be aware that a redemption of shares (including
any exchange into other funds offered, affiliated or administered by U.S. Global
Investors, Inc.) is a taxable event and, accordingly, a capital gain or loss may
be recognized. If a shareholder of the Fund receives a distribution taxable as
mid-term or long-term capital gain, as applicable, with respect to shares of the
Fund and redeems or exchanges shares before he has held them for more than six
months, any loss on the redemption or exchange (not otherwise disallowed as
attributable to an exempt-interest dividend) will be treated as mid-term or
long-term capital loss to the extent of the mid-term or long-term capital gain,
as applicable, recognized.
CUSTODIAN, FUND ACCOUNTANT AND ADMINISTRATOR
Beginning November 1997 Brown Brothers Harriman & Co. began serving as
custodian, fund accountant and administrator for all Funds of the Trust. With
respect to the Funds owning foreign securities, Brown Brothers Harriman & Co.
may hold securities outside the United States pursuant to sub-custody
arrangements separately approved by the Trust. Prior to November, Bankers Trust
Company provided custody services and USSI provided fund accounting and
administrative services. Services with respect to the retirement accounts will
be provided by Security Trust and Financial Company of San Antonio, Texas, a
wholly owned subsidiary of the Adviser.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, 700 North St. Mary's, Suite 900, San Antonio, Texas 78205,
are the independent accountants for the Trust.
FINANCIAL STATEMENTS
The financial statements for the fiscal year ended June 30, 1997, have been
audited by Price Waterhouse LLP and are incorporated by reference from the
MEGATRENDS FUND 1997 ANNUAL REPORT of June 30, 1997, which has been delivered
with the Statement of Additional Information unless previously provided, in
which event the Trust will promptly provide another copy free of charge, upon
request to: U.S. Global Investors, Inc., 7900 Callaghan Road, San Antonio, Texas
78229, 1-800-873-8637 or (210) 308-1234. The financial highlights for the fiscal
periods ended June 30, 1992 through 1996, have been audited by Arthur Andersen
LLP. The related financial statements and report of independent accountants for
1996 and prior periods are included in the Fund's 1996 ANNUAL REPORT TO
SHAREHOLDERS and are incorporated by reference into the Statement of Additional
Information.
Page 16
- --------------------------------------------------------------------------------
PART C. OTHER INFORMATION
- --------------------------------------------------------------------------------
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS
(1) The Financial Statements for the period ended June 30, 1997, of U.S.
Global Accolade Funds--MegaTrends Fund are incorporated by reference
from the MEGATRENDS FUND 1997 ANNUAL REPORT.
(b) EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
(1) (a) First Amended and Restated Master Trust Agreement, dated May 22, 1996,
incorporated by reference to Post-Effective Amendment No. 5 dated May
28, 1996 (EDGAR Accession No. 0000902042-96-000046).
(b) Amendment No. 1, dated November 20, 1996, to the First Amended and
Restated Master Trust Agreement, dated May 22, 1996, incorporated by
reference to Post- Effective Amendment No. 11 dated August 22, 1997
(EDGAR Accession No. 0000902042-97-000051).
(c) Amendment No. 2, dated February 21, 1997, to the First Amended and
Restated Master Trust Agreement, dated May 22, 1996, incorporated by
reference to Post-Effective Amendment No. 11 dated August 22, 1997
(EDGAR Accession No. 0000902042-97- 000051).
(d) Amendment No. 3, dated April 10, 1997, to the First Amended and
Restated Master Trust Agreement, dated May 22, 1996, incorporated by
reference to Post-Effective Amendment No. 11 dated August 22, 1997
(EDGAR Accession No. 0000902042-97- 000051).
(2) By-laws of U.S. Global Accolade Funds, incorporated by reference to
initial registration dated April 15, 1993.
(3) Not applicable
(4) Not applicalbe
(5) (a) Advisory Agreement between U.S. Global Investors, Inc. and U.S. Global
Accolade Funds dated September 21, 1994, incorporated by reference to
Post-Effective Amendment No. 5 dated May 28, 1996 (EDGAR Accession
No.0000902042-96- 000046).
(b) Sub-Advisory Agreement among U.S. Global Accolade Funds, U.S. Global
Investors, Inc. and Bonnel, Inc. dated September 21, 1994,
incorporated by reference to Pre- Effective Amendment No. 3 dated
October 17, 1994.
(c) Amendment dated May 22, 1996, to Advisory Agreement between U.S.
Global Accolade Funds and U.S. Global Investors, Inc. to add
MegaTrends Fund incorporated by reference to Post-Effective Amendment
No. 5 dated May 28, 1996 (EDGAR Accession No.0000902042-96-000046).
<PAGE>
EXHIBMBER DESCRIPTION OF EXHIBIT
(d) Sub-Advisory Agreement among U.S. Global Accolade Funds, U.S. Global
Investors, Inc. and Money Growth Institute, Inc. incorporated by
reference to Post-Effective Amendment No. 5 dated May 28, 1996 (EDGAR
Accession No. 0000902042-96-000046).
(e) Amendment dated February 19, 1997, to Advisory Agreement between U.S.
Global Accolade Funds and U.S. Global Investors, Inc. to add Adrian
Day Global Opportunity Fund incorporated by reference to
Post-Effective Amendment No. 8 dated December 6, 1996 (EDGAR Accession
No. 0000902042-96-000082).
(f) Sub-Advisory Agreement dated December 18, 1996, among U.S. Global
Accolade Funds, U.S. Global Investors, Inc. and Global Strategic
Management, Inc. incorporated by reference to Post-Effective Amendment
No. 8 dated December 6, 1996 (EDGAR Accession No.
0000902042-96-000082).
(g) Amendment dated February 28, 1997, to Advisory Agreement between U.S.
Global Accolade Funds and U.S. Global Investors, Inc. to add Regent
Eastern European Fund incorporated by reference to Post-Effective
Amendment No. 9 dated December 24, 1996 (EDGAR Accession No.
0000902042-96-000083).
(h) Sub-Advisory Agreement dated February 28, 1997, among U.S. Global
Accolade Funds, U.S. Global Investors, Inc. and Regent Fund Management
Limited incorporated by reference to Post-Effective Amendment No. 9
dated December 24, 1996 (EDGAR Accession No. 0000902042-96-000083).
( 6) Not applicable
( 7) Not applicable
( 8) (a) Custodian Agreement dated October 4, 1994, between U.S. Global
Accolade Funds and Bankers Trust Company of New York incorporated by
reference to Pre-Effective Amendment No. 3 dated October 17, 1994
(b) Amendment dated July 18, 1996, to Custodian Agreement with Bankers
Trust Company of New York to add MegaTrends Fund to the Agreement
incorporated by reference to Post-Effective Amendment No. 6 dated
October 10, 1996 (EDGAR Accession No. 0000902042-96-000082).
(c) Amendment dated February 18, 1997, to Custodian Agreement with Bankers
Trust Company of New York to add Adrian Day Global Opportunity Fund
incorporated by reference to Post-Effective Amendment No. 8 dated
December 6, 1996 (EDGAR Accession No. 0000902042-96-000082).
(d) Amendment dated March 24, 1997, to Custodian Agreement with Bankers
Trust Company of New York to add Regent Eastern European Fund to the
Agreement incorporated by reference to Post-Effective Amendment No. 9
dated December 24, 1996 (EDGAR Accession No. 0000902042-96-000083).
( 9) (a) Transfer Agent Agreement between United Shareholder Services, Inc. and
U.S. Global Accolade Funds dated September 21, 1994, incorporated by
reference to Pre-Effective Amendment No. 3 dated October 17, 1994.
<PAGE>
EXHIBMBER DESCRIPTION OF EXHIBIT
(b) Bookkeeping and Accounting Agreement between United Shareholder
Services, Inc. and U.S. Global Accolade Funds dated September 21,
1994, incorporated by reference to Pre-Effective Amendment No. 3 dated
October 17, 1994
(c) Lockbox Service Agreement between United Shareholder Services, Inc.
and U.S. Global Accolade Funds dated September 21, 1994, incorporated
by reference to Pre-Effective Amendment No. 3 dated October 17, 1994.
(d) Printing Agreement between United Shareholder Services, Inc. and U.S.
Global Accolade Funds dated September 21, 1994, incorporated by
reference to Pre-Effective Amendment No. 3 dated October 17, 1994.
(e) Amendment dated May 22, 1996, to Transfer Agent Agreement between
United Shareholder Services, Inc. and U.S. Global Accolade Funds to
add MegaTrends Fund to the Agreement, incorporated by reference to
Post-Effective Amendment No. 5 dated May 28, 1996 (EDGAR Accession No.
0000902042-96-000046).
(f) Amendment dated February 18, 1997, to the Transfer Agent Agreement
between United Shareholder Services, Inc. and U.S. Global Accolade
Funds to add Adrian Day Global Opportunity Fund incorporated by
reference to Post-Effective Amendment No. 8 dated December 6, 1996
(EDGAR Accession No. 0000902042-96-000082).
(g) Amendment dated February 19, 1997, to the Bookkeeping and Accounting
Agreement between United Shareholder Services, Inc. and U.S. Global
Accolade Funds to add Adrian Day Global Opportunity Fund incorporated
by reference to Post-Effective Amendment No. 8 dated December 6, 1996
(EDGAR Accession No. 0000902042-96- 000082).
(h) Amendment dated February 19, 1997, to the Printing Agreement between
United Shareholder Services, Inc. and U.S. Global Accolade Funds to
add MegaTrends Fund and Adrian Day Global Opportunity Fund
incorporated by reference to Post-Effective Amendment No. 8 dated
December 6, 1996 (EDGAR Accession No. 0000902042-96- 000082).
(i) Amendment dated February 19, 1997, to the Lockbox Service Agreement
between United Shareholder Services, Inc. and U.S. Global Accolade
Funds to add MegaTrends fund and Adrian Day Global Opportunity Fund
incorporated by reference to Post- Effective Amendment No. 8 dated
December 6, 1996 (EDGAR Accession No. 0000902042-96-000082).
(j) Amendment dated February 28, 1997, to the Transfer Agent Agreement
between United Shareholder Services, Inc. and U.S. Global Accolade
Funds to add Regent Eastern European Fund to the Agreement
incorporated by reference to Post-Effective Amendment No. 9 dated
December 24, 1996 (EDGAR Accession No. 0000902042-96- 000083).
(k) Amendment dated February 28, 1997, to the Bookkeeping and Accounting
Agreement between United Shareholder Services, Inc. and U.S. Global
Accolade Funds to add Regent Eastern European Fund to the Agreement
incorporated by reference to Post- Effective Amendment No. 9 dated
December 24, 1996 (EDGAR Accession No. 0000902042-96-000083).
<PAGE>
BER DESCRIPTION OF EXHIBIT
(l) Amendment dated February 28, 1997, to the Printing Agreement between
United Shareholder Services, Inc. and U.S. Global Accolade Funds to
add Regent Eastern European Fund to the Agreement incorporated by
reference to Post-Effective Amendment No. 9 dated December 24, 1996
(EDGAR Accession No. 0000902042-96- 000083).
(m) Amendment dated February 28, 1997, to the Lockbox Service Agreement
between United Shareholder Services, Inc. and U.S. Global Accolade
Funds to add Regent Eastern European Fund to the Agreement
incorporated by reference to Post-Effective Amendment No. 9 dated
December 24, 1996 (EDGAR Accession No. 0000902042-96- 000083).
(10) (a) Opinion and consent of Thomas D. Tays, Esq., counsel to the
Registrant, incorporated by reference to Pre-Effective Amendment No. 3
dated October 17, 1994.
(b) Opinion and consent of Thomas D. Tays, Esq., counsel to the
Registrant, incorporated by reference to Post-Effective Amendment No.
6 dated October 8, 1996.
(c)* Consent of counsel, dated November 3, 1997.
(11) (a)* Consent of independent accountant, Arthur Andersen LLP, dated October
30, 1997, with respect to MegaTrends Fund.
(b)* Consent of independent accountant, Price Waterhouse LLP, dated October
30, 1997, with respect to MegaTrends Fund.
(c) Power of Attorney incorporated by reference to Post-Effective
Amendment No. 2 dated January 15, 1996 (EDGAR Accession No.
0000902042-96-000003).
(12) Not applicable
(13) Not applicable
(14) Not applicable
(15) (a) U.S. Global Accolade Funds/Bonnel Growth Fund Distribution Plan
pursuant to Rule 12b-1 approved September 21, 1994, incorporated by
reference to Pre-Effective Amendment No. 2 dated May 11, 1994.
(b) U.S. Global Accolade Funds/MegaTrends Fund Distribution Plan pursuant
to Rule 12b- 1 approved May 22, 1996, incorporated by reference to
Post-Effective Amendment No. 5 dated May 28, 1996 (EDGAR Accession No.
0000902042-96-000046).
(c) U.S. Global Accolade Funds/Adrian Day Global Opportunity Fund
Distribution Plan pursuant to Rule 12b-1 approved December 18, 1996,
incorporated by reference to Post- Effective Amendment No. 8 dated
December 6, 1996 (EDGAR Accession No. 0000902042-96-000082).
(d) U.S. Global Accolade Funds/Regent Eastern European Fund Distribution
Plan pursuant to Rule 12b-1 approved February 28, 1997, incorporated
by reference to Post-Effective Amendment No. 9 dated December 24, 1996
(EDGAR Accession No. 0000902042-96- 000083).
<PAGE>
BER DESCRIPTION OF EXHIBIT
(16) (a) Schedule for computation of each performance quotation provided in the
Registration Statement in response to Item 22 incorporated by
reference to initial registration statement dated April 15, 1993.
* Included herein.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Information pertaining to persons controlled by or under common control
with Registrant is incorporated by reference to the Statement of
Additional Information contained in Part B of this Registration
Statement at the section entitled "Principal Holders of Securities."
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
The number of record holders, as of October 30, 1997, of each class of
securities of the Registrant.
TITLE OF CLASS NUMBER OF RECORD HOLDERS
Bonnel Growth Fund 6,385
MegaTrends Fund 1,776
Adrian Day Global Opportunity Fund 447
Regent Eastern European Fund 1,011
ITEM 27. INDEMNIFICATION
Under Article VI of the Registrant's Master Trust Agreement, each of
its Trustees and officers or person serving in such capacity with
another entity at the request of the Registrant (a "Covered Person")
shall be indemnified (from the assets of the Sub-Trust or Sub-Trusts in
question) against all liabilities, including, but not limited to,
amounts paid in satisfaction of judgments, in compromises or as fines
or penalties, and expenses, including reasonable legal and accounting
fees, incurred by the Covered Person in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or
criminal before any court or administrative or legislative body, in
which such Covered Person may be or may have been involved as a party
or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having
been such a Trustee or officer, director or trustee, except with
respect to any matter as to which it has been determined that such
Covered Person (i) did not act in good faith in the reasonable belief
that such Covered Person's action was in or not opposed to the best
interests of the Trust or (ii) had acted with wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in
the conduct of such Covered Person's office (either and both of the
conduct described in (i) and (ii) being referred to hereafter as
"Disabling Conduct"). A determination that the Covered Person is not
entitled to indemnification may be made by (i) a final decision on the
merits by a court or other body before whom the proceeding was brought
that the person to be indemnified was not liable by reason of Disabling
Conduct, (ii) dismissal of a court action or an administrative
proceeding against a Covered Person for insufficiency of evidence of
Disabling Conduct, or (iii) a reasonable determination, based upon a
review of the facts, that the indemnitee was not liable by reason of
Disabling Conduct by (a) a vote of the majority of a quorum of Trustees
who are neither "interested persons" of the Trust as defined in Section
1(a)(19) of the 1940 Act nor parties to the proceeding, or (b) as
independent legal counsel in a written opinion.
<PAGE>
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Information pertaining to business and other connections of
Registrant's investment adviser is incorporated by reference to the
Prospectus and Statement of Additional Information contained in Parts A
and B of this Registration Statement at the sections entitled
"Management of the Funds" in the Prospectus and "Investment Advisory
Services" in the Statement of Additional Information.
ITEM 29. PRINCIPAL UNDERWRITERS
The Registrant is currently comprised of four no-load funds which act
as distributor of their own shares.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
All accounts and records maintained by the Registrant are kept at the
Registrant's office located at 7900 Callaghan Road, San Antonio, Texas.
All accounts and records maintained by Brown Brothers Harriman & Co. as
custodian for U.S. Global Accolade Funds are maintained at 40 Water
Street, Boston, Massachusetts 02109.
ITEM 31. Not applicable
ITEM 32. Not applicable
<PAGE>
SIGNATURE PAGE
Under the requirements of the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant certifies that it meets all of the requirements for
effectiveness of this Post-Effective Amendment to its Registration Statement
filed under Rule 485(b) of the Securities Act of 1933 and that it has duly
caused this Amendment to the Registration Statement on Form N-1A to be signed on
its behalf by the undersigned, thereunto duly authorized in the city of San
Antonio, State of Texas, on this 31st day of October, 1997.
U.S. GLOBAL ACCOLADE FUNDS
By: * /s/ Frank E. Holmes
---------------------------
FRANK E. HOLMES, President,
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
- --------------------------- ----------------------- ----------------
* /s/ Frank E. Holmes President October 31, 1997
- --------------------------- Chief-Executive-Officer
FRANK E. HOLMES Trustee
* /s/ Clark R. Mandigo Trustee October 31, 1997
- --------------------------- Audit-Committee
CLARK R. MANDIGO
* /s/ Richard E. Hughs Trustee October 31, 1997
- --------------------------- Audit-Committee
RICHARD E. HUGHS
/s/ Thomas D. Tays Vice President, Chief October 31, 1997
- --------------------------- Financial, Secretary
THOMAS D. TAYS
* BY: /s/ Thomas D. Tays
- --------------------------- Vice President, Chief
THOMAS D. TAYS Financial, Secretary October 31, 1997
Power of Attorney
- --------------------------------------------------------------------------------
[GRAPHIC: Arthur Andersen logo and letterhead]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in U.S. Global Accolade Funds' Registration Statement on Form N-1A,
Post-Effective Amendment No. 12 (the "Registration Statement"), of our report
dated July 19, 1996 included in the June 30, 1996 Annual Report of The Leeb
Personal Finance Fund of the Leeb Personal Finance Investment Trust, and to all
references to our Firm included in this Registration Statement.
/s/ Arthur Andersen, LLP
Cincinnati, Ohio
October 30, 1997
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 12 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated August 20, 1997, relating to the financial
statements and financial highlights appearing in the June 30, 1997 Annual Report
to Shareholders of MegaTrends Fund, which is also incorporated by reference into
the Registration Statement. We also consent to the references to us under the
headings "Financial Highlights" and "Independent Accountants" in the Prospectus
and under the headings "Independent Accountants" and "Financial Statements" in
the Statement of Additional Information.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
San Antonio, Texas
October 30, 1997
[GRAPHIC: U.S. GLOBAL INVESTORS LOGO]
November 3, 1997
U.S. Global Accolade Funds
7900 Callaghan Road
San Antonio, Texas 78229
Ladies and Gentlemen:
I hereby consent to the incorporation by reference in Post-Effective
Amendment No. 12 (the "Amendment") to Registration Statement 2-35439 on Form
N-1A (the "Registration Statement") of U.S. Global Accolade Funds (the "Trust")
of my opinion with respect to the legality of the shares of the Trust
representing interests in the MegaTrends Fund, assuming that all of the shares
are sold, issued and paid for in accordance with the terms of the Trust's
prospectus and Statement of Additional Information as contained in this
Registration Statement on Form N1-A.
I am licensed to practice law in the State of Oklahoma and not in any other
jurisdiction, I do not claim special expertise in the laws of any other
jurisdiction.
I hereby consent to the use of this opinion as an Exhibit to this
Registration Statement filed under Part C, I further consent to reference in the
prospectus of the Trust to the fact that this opinion concerning the legality of
the issue has ben rendered by me.
Sincerely,
/s/ Thomas D. Tays
THOMAS D. TAYS
Vice President, Secretary
TDT:kle
7900 Callaghan Road
........................
MAIL ADDRESS:
P.O. Box 781234
San Antonio, Texas
78278-1234
........................
Tel 210-308-1234
........................
1-800-US-FUNDS
........................
Fax 210-308-1223
........................
email [email protected]
