Additional Qs&As
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22. Will the SoGen No. Only the SoGen Money Fund is
International, Gold and Overseas being merged with a Colonial Fund,
Funds be merged or in any way i.e. the Colonial Money Market
combined with other Colonial Fund.
Funds?
The SoGen International, Gold and
Overseas Funds will remain distinct
from other Colonial Funds and their
investment objectives will not
change. The fact that they are
part of a Colonial Trust does not
mean that they will be merged with
existing Colonial Funds.
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23. Why Are there two Interim The SoGen International Fund and
Investment Advisory Contracts? the SoGen Overseas and Gold Funds
(Exhibit F) have different advisory fees, as
noted in section 4 (Compensation
of the Advisor) of the contracts.
The contract for the SoGen
International Fund was drawn up in
1978, while the contract for the
SoGen Overseas and Gold Funds was
drawn up in 1993. Each contract
contains slightly different legal
phrasing. Therefore we are
required to prepare two `interim'
contracts.
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24. Can I exchange into other You will be able to exchange into
funds offered by Colonial? the funds offered by Colonial,
Stein Roe Advisor, Newport and
Crabbe Huson fund families which
are distributed by Liberty Funds
Distributor, Inc.
There is no exchange provision into
the Stein Roe No-Load series of
funds.
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25. Why do I need to call Liberty The personnel at the Liberty
to get more information on their Service Center are more informed on
Funds and their class of shares? the nature and policies of their
funds and are far better equipped
to answer all of your questions.
Information regarding Colonial and
other related matters will be sent
to shareholders once the
reorganization has been approved.
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26. Why can't SoGen tell me if It is simply too expensive and
there is a state and local tax lengthy a task to investigate every
implication to this reorganization? state and local tax regulation and
issue an opinion on each one. You
should consul your tax adviser
regarding state and local tax
issues. Legal counsel has
expressed the opinion that this is
a Federally tax-free
reorganization, and while it does
not know of any consequence, it has
not made any investigation on the
state or local level.
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27. Why should I vote for this While we cannot advise you on how
reorganization? you should vote, you may wish to
consider the following:
- The Investment Advisor is
under agreement to be purchased
by Liberty Financial and the
best way to retain the services
of the Advisor is to approve the
reorganization.
- The Board of Directors has
voted in favor of this
proposal. The additional
research capability of the
Liberty organization could
enhance the research material
available to the Funds.
- This reorganization provides
shareholders a wider range of
investment options than are
currently available within the
SoGen Family such as additional
classes of shares and the
ability to exchange into other
funds made available by Liberty.
- The wider distribution
network of Liberty Financial may
provide increased investment in
the Funds and help grow assets.
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28. Why is the Investment Adviser The background to answer that
being sold? question is as follows:
Societe Generale is one of the
largest banks in France and has an
asset management subsidiary titled
Societe Generale Asset Management,
S.A. This asset management
division is, in turn, a majority
shareholder of SGAM Corp., which is
the investment advisor to the SoGen
Funds.
Societe Generale Asset Management,
S.A. has determined that it no
longer wishes to maintain a
presence in the retail mutual fund
business in the US. As such, it
has entered into an agreement with
Liberty to purchase SGAM Corp.
That is why the Investment Adviser
is being sold.
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29. Why are the Sales Load being The simple answer is that the
increased and will the 12B-1 fees increase in the Sales Load is
go to 0.35%? designed to bring the reorganized
funds into line with the other
funds in the Colonial family.
The current 12B-1 fee of 0.25% will
be maintained for two years and
while the majority of Colonial
Funds maintain the ability to
increase the 12B-1 fee to 0.35%,
they have not done so and the fee
remains at 0.25%.
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30. Does the conversion from a The risk of Fund shareholders being
Maryland Corp. to a Massachusetts personally liable as partners for
Business Trust expose shareholders the obligations of the trust is
to personal liability? extremely small. Today, hundreds
of other mutual funds are organized
as a Massachusetts Business Trust
and there has never been a case
where the courts have found Fund
shareholders liable under any
circumstances. The Colonial Trust
contains a charter that requires
the trust to maintain insurance
policies, fidelity bonds and
indemnification clauses that
further protect shareholders
against liability of the Fund.
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