As filed with the Securities and Exchange Commission on June 3, 1999
Registration No. 33-63560
811-7762
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. 7
and/or
REGISTRATION STATEMENT UNDER INVESTMENT COMPANY ACT OF 1940
Amendment No. 9
(Check appropriate box or boxes.)
SOGEN FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
1221 Avenue of the Americas
New York, NY 10020
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (800) 334-2143
------------
Jean-Marie Eveillard
SoGen Funds, Inc.
1221 Avenue of the Americas
New York, NY 10020
(Name and Address of Agent for Service)
------------
Copy to:
Jack W. Murphy, Esq.
Dechert Price & Rhoads
1775 Eye Street, N.W.
Washington, DC 20006
It is proposed that this filing will become effective (check appropriate box):
____ Immediately upon filing pursuant to paragraph (b)
____ On (date) pursuant to paragraph (b)
_X_ 60 days after filing pursuant to paragraph (a)(1)
____ On (date) pursuant to paragraph (a)(1)
____ 75 days after filing pursuant to paragraph (a)(2)
____ on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, click the following box:
____ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered:
SoGen International Fund - Class A Common Stock
SoGen International Fund - Class I Common Stock
SoGen Overseas Fund - Class A Common Stock
SoGen Overseas Fund - Class I Common Stock
SoGen Gold Fund - Common Stock
SoGen Money Fund - Common Stock
<PAGE>
PROSPECTUS
SOGEN INTERNATIONAL FUND
SOGEN OVERSEAS FUND
SOGEN GOLD FUND
SOGEN MONEY FUND
-------------------------
[LOGO]
1221 Avenue of the Americas
New York, NY 10020
(800) 334-2143
-------------------------
Societe Generale Asset Management Corp.
Investment Adviser
Funds Distributor, Inc.
Principal Underwriter
-------------------------
SoGen International Fund
For investors seeking long-term growth of capital by investing primarily in
common stocks (and in securities convertible into common stocks) of the United
States and foreign companies.
SoGen Overseas Fund
For investors seeking long-term growth of capital by investing primarily in
securities of small and medium size non-U.S. companies.
SoGen Gold Fund
For investors seeking growth of capital by investing primarily in securities of
companies engaged in mining, processing, dealing in or holding gold or other
precious metals both in the United States and in foreign countries.
SoGen Money Fund
For investors seeking as high a level of current income as is considered
consistent with the preservation of capital and liquidity by investing
exclusively in U.S. dollar-denominated money market instruments which mature in
397 days or less.
--------------------------
The Securities and Exchange Commission has not approved or disapproved of these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
--------------------------
Prospectus
August 1, 1999
<PAGE>
TABLE OF CONTENTS
Page
Overview of the Funds.................................................
Investment Objectives, Principal Investment Strategies,
and Related Risks...........................................
Management of the Company.............................................
Distribution Arrangements.............................................
How to Invest.........................................................
Shareholders' Reference Guide.........................................
Financial Highlights..................................................
<PAGE>
OVERVIEW OF THE FUNDS
Each Fund is a separate, diversified portfolio of SoGen Funds, Inc. (the
"Company"), an open-end management investment company, and has a different
investment objective which it pursues through separate investment policies. The
difference in objectives and policies among the Funds affects the degree of risk
and return of each Fund.
Investment Objective of Each Fund.
SoGen International Fund ("International Fund") seeks long-term growth of
capital.
SoGen Overseas Fund ("Overseas Fund") seeks long-term growth of capital.
SoGen Gold Fund ("Gold Fund") seeks growth of capital.
SoGen Money Fund ("Money Fund") seeks as high a level of current income as
is considered consistent with the preservation of capital and liquidity.
Principal Investment Strategies of Each Fund.
International Fund
In seeking to achieve its investment objective, International Fund will
normally invest its assets primarily in common stocks (and in securities
convertible into common stocks) of United States and foreign companies.
International Fund also may invest a portion of its assets in fixed-income
securities of domestic or foreign issuers which, in addition to the income they
may provide, appear to offer potential for long-term growth of capital.
Overseas Fund
In seeking to achieve its investment objective, Overseas Fund will invest
primarily in securities of small and medium size non-U.S. companies and may
invest in securities traded in mature markets (for example, Japan, Canada and
the United Kingdom) and in emerging markets (for example, Mexico and Indonesia).
Overseas Fund particularly seeks companies that have growth potential, financial
strength and stability, strong management and fundamental value. However,
Overseas Fund may invest in companies that do not have all of these
characteristics.
Gold Fund
In seeking to achieve its investment objective, Gold Fund will invest
primarily in securities of companies engaged in mining, processing, dealing in
or holding gold or other precious metals such as silver, platinum and palladium,
both in the United States and in foreign countries. Under normal circumstances,
at least 65% of the value of Gold Fund's total assets will be invested in
securities (which may include both equity and, to a limited extent, debt
securities) consisting of issuers engaged in gold operations, including
securities of gold mining finance companies as well as operating companies with
long-, medium- or short-life mines. Up to 35% of Gold Fund's assets may be
invested in equity and, to a limited extent, debt securities unrelated to the
precious metals industry where the investment adviser believes such securities
are consistent with Gold Fund's investment objective.
Money Fund
In seeking to achieve its investment objective, Money Fund invests
primarily in high-quality, short-term money market instruments, including
certificates of deposit, banker's acceptances, commercial paper, and other money
market instruments. Money Fund seeks to provide a stable net asset value of $1
per share by investing in securities with a maturity of 397 days or less. To be
considered high quality, a security is generally rated in one of the two highest
credit-quality categories for short-term securities by a nationally recognized
rating service. If unrated, the security must be determined by Money Fund's
investment adviser to be of quality equivalent to those in the two highest
credit quality categories.
Principal Risks of Investing in the Funds.
A Word About Mutual Fund Risks
Investment in any mutual fund has inherent risks. There can be no
assurance that the investment objectives of a fund will be realized or that a
fund's shares will not decline in value. Economic conditions change and stock
markets are volatile. If the investment adviser to a fund judges market
conditions incorrectly, the fund's portfolio may decline in value. You could
lose money by investing in a mutual fund. You should consider your own risk
tolerance, investment goals and investment timeline before committing any of
your money to an investment in a mutual fund.
You should note that an investment in Money Fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although Money Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in Money Fund.
Main Risks of the Funds
Investing in Foreign Securities
International Fund, Overseas Fund, and Gold Fund provide investors with
an opportunity to place a portion of their assets in a diversified portfolio of
foreign securities. In addition, Money Fund may invest in U.S.
dollar-denominated high quality foreign debt securities.
Foreign securities involve certain inherent risks that are different
from those of domestic securities, including political or economic instability
of the issuer or the country of issue, changes in foreign currency and exchange
rates, and the possibility of adverse changes in investment or exchange control
regulations. Currency fluctuations will also affect the net asset value of each
Fund irrespective of the performance of the underlying investments in foreign
issuers. Typically, there is less publicly available information about a foreign
company than about a U.S. company, and foreign companies may be subject to less
stringent reserve, auditing and reporting requirements. Many foreign stock
markets are not as large or liquid as in the United States; fixed commissions on
foreign stock exchanges are generally higher than the negotiated commissions on
U.S. exchanges; and there is generally less government supervision and
regulation of foreign stock exchanges, brokers and companies than in the United
States. Foreign governments can also levy confiscatory taxes, expropriate assets
and limit repatriations of assets. As a result of these and other factors,
foreign securities purchased by a Fund may be subject to greater price
fluctuation than securities of U.S. companies. These risks may be more
pronounced with respect to investments in emerging markets.
Fluctuations in the Price of Gold
Gold Fund maintains a policy of concentrating its investments in gold
and other precious metal-related issuers. Gold Fund is therefore susceptible to
specific political and economic risks affecting the price of gold and other
precious metals including changes in U.S. or foreign tax, currency or mining
laws, increased environmental costs, international monetary and political
policies, economic conditions within an individual country, trade imbalances,
and trade or currency restrictions between countries.
Interest Rate Risk
Many of Money Fund's portfolio holdings are susceptible to decline in a
rising interest rate environment.
Performance History of the Funds.
The bar charts below show each Fund's annual return from year to year,
together with each Fund's best and worst quarters since inception. How each Fund
has performed in the past is not necessarily an indication of how it will
perform in the future.
As another indication of the relative performance and the risks of each
Fund, below the bar charts for each Fund is a table that compares each Fund's
average annual total return to an appropriate broad-based securities market
index.
International Fund
[Insert Bar Chart for past 10 years; Need only be with respect to one class
(e.g. Class A shares)]*
----------
* International Fund's total return for the period from January 1, 1999 to
June 30, 1999 was ____%.
Best Quarter: [ ]
Worst Quarter: [ ]
Since
Commencement
of Operations
1 Year 5 Years 10 years ([ ])
------ ------- -------- -------------
International Fund
Class A Shares
Class I Shares
[MSCI World Index]
Overseas Fund
[Insert Bar Chart since inception; Need only be with respect to one class
(e.g., Class A shares)] *
----------
* Overseas Fund's total return for the period from January 1, 1999 to June
30, 1999 was ____%.
Best Quarter: [ ]
Worst Quarter: [ ]
Since
Commencement
of Operations
1 Year 5 Years (August 31, 1993)
------ ------- -----------------
Overseas Fund
Class A Shares
Class I Shares
[MSCI EAFE Index]
Gold Fund
[Insert Bar Chart since inception] *
----------
* Gold Fund's total return for the period from January 1, 1999 to June 30,
1999 was ____%.
Best Quarter: [ ]
Worst Quarter: [ ]
Since
Commencement
of Operations
1 Year 5 Years (August 31, 1993)
------ ------- ---------------
Gold Fund
[Index]
Money Fund
[Insert Bar Chart since inception] *
----------
* Money Fund's total return for the period from January 1, 1999 to June 30,
1999 was ____%.
Best Quarter: [ ]
Worst Quarter: [ ]
Since
Commencement
of Operations
1 Year 5 Years (August 31, 1993)
------ ------- -----------------
Money Fund
To obtain Money Fund's current 7-day yield, please call [ ]. Fees and Expenses
of the Funds.
This information is designed to help you understand the fees and
expenses that you may pay if you buy and hold shares of the Funds.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SoGen SoGen SoGen SoGen
International International Overseas Overseas SoGen Gold SoGen Money
Fund Fund Fund Class A Fund Class I Fund Fund
Class A Class I
Shareholder Fees (fees paid
directly from your investment)
Maximum Sales Charge (Load) 3.75% None 3.75% None 3.75% None
===== ==== ===== ==== ===== ====
Imposed on Purchases
(as a percentage of public
offering price)
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)
Management Fees 0.75% 0.75% 0.75% 0.75% 0.75% 0.15%
Distribution (12b-1) Fees 0.25%* None 0.25%* None 0.25%* None
Other Expenses 0.18% 0.18% 0.22% 0.22% 0.55% [0.86]%
----- ----- ----- ----- ----- -------
Total Fund Operating Expenses
1.18% 0.93% 1.22% 0.97% 1.55% [1.01]%**
===== ===== ===== ===== ===== =========
</TABLE>
- ----------
* Some of the Funds have adopted a Rule 12b-1 plan with allows those Funds to
pay distribution fees for the sale and distribution of their shares. The
maximum level of distribution expenses for those Funds is 0.25% per year of
those Fund's average net assets. Because these fees are paid out of each of
those Fund's assets on an on-going basis, the distribution expenses you pay
over time will increase the cost of your investment and may total more than
the maximum sales charge permissible if imposed entirely as an initial
sales charge.
** [SGAM Corp., the investment adviser, has voluntarily agreed to limit the
total expenses of Money Fund (excluding interest, taxes, brokerage and
extraordinary expenses) to an annual rate of 0.75% of the Fund's average
net assets until July 31, 1999. After July 31, 1999, the expense limitation
may be terminated or revised at any time.]
Example
This Example is intended to help you compare the cost of investing in
the Funds with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in a Fund for the time periods indicated and then redeem
all of your shares at the end of those periods. The Example also assumes that
your investment has a 5% return each year and that a Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
International Fund
Class A $ $ $ $
Class I $ $ $ $
Overseas Fund
Class A $ $ $ $
Class I $ $ $ $
Gold Fund $ $ $ $
Money Fund $ $ $ $
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES, AND RELATED RISKS
International Fund Investment Objective and Policies.
International Fund's investment objective is to provide long-term
growth of capital. In seeking to achieve this objective, International Fund will
normally invest its assets primarily in common stocks (and in securities
convertible into common stocks) of United States and foreign companies. However,
International Fund reserves the right to invest a portion of its assets in
fixed-income securities of domestic or foreign issuers which, in addition to the
income they may provide, appear to offer potential for long-term growth of
capital. When deemed appropriate by International Fund's investment adviser for
short-term investment or defensive purposes, International Fund may hold a
portion of its assets in short-term debt instruments including commercial paper
and certificates of deposit.
Overseas Fund Investment Objective and Policies.
Overseas Fund seeks long-term growth of capital by investing primarily
in securities of small and medium size non-U.S. companies. Overseas Fund
particularly seeks companies that have growth potential, financial strength and
stability, strong management and fundamental value. However, Overseas Fund may
invest in companies that do not have all of these characteristics.
The investment objective of Overseas Fund may be changed by the
Company's Board of Directors without shareholder approval. If there were such a
change, each shareholder would need to consider whether Overseas Fund would
remain an appropriate investment in light of the shareholder's then current
financial position and needs. Shareholders will be notified a minimum of sixty
days in advance of any change in investment objective.
Overseas Fund may invest in securities traded in mature markets (for
example, Japan, Canada and the United Kingdom) and in emerging markets (for
example, Mexico and Indonesia). A list of the mature and emerging markets in
which Overseas Fund may invest is included in the Statement of Additional
Information under "Investment Policies, Techniques and Risks--Foreign
Securities." There are no limits on Overseas Fund's geographic asset
distribution, but Overseas Fund ordinarily invests in at least three countries
outside the United States.
The equity securities in which Overseas Fund may invest include common
and preferred stocks, warrants or other similar rights, and convertible
securities. Overseas Fund may purchase foreign securities in the form of
sponsored or unsponsored American Depositary Receipts (ADRs), Global Depositary
Receipts (GDRs), and European Depositary Receipts (EDRs) or other securities
representing underlying shares of foreign issuers. Overseas Fund may also invest
in any other type of security, including up to 20% of its total assets in debt
securities. Such debt securities may include lower-rated securities, commonly
referred to as "junk bonds" (i.e., securities rated BB or lower by Standard &
Poor's Corporation ("S&P") or Ba or lower by Moody's Investors Service, Inc.
("Moody's")), and securities that are not rated. There are no restrictions as to
the ratings of debt securities acquired by Overseas Fund or the portion of
Overseas Fund's assets that may be invested in debt securities in a particular
rating category. Under normal market conditions, Overseas Fund invests at least
75% of its total assets, taken at market value, in foreign securities. Overseas
Fund may also invest in "structured securities" in which the value is linked to
the price of an underlying instrument, such as a currency, commodity, or index.
Gold Fund Investment Objective and Policies.
Gold Fund seeks growth of capital by investing primarily in securities
of companies engaged in mining, processing, dealing in or holding gold or other
precious metals such as silver, platinum and palladium, both in the United
States and in foreign countries.
The investment objective of Gold Fund may be changed by the Company's
Board of Directors without shareholder approval. If there were such a change,
each shareholder would need to consider whether Gold Fund would remain an
appropriate investment in light of the shareholder's then current financial
position and needs. Shareholders will be notified a minimum of sixty days in
advance of any change in investment objective.
Under normal circumstances, at least 65% of the value of Gold Fund's
total assets will be invested in securities (which may include both equity and,
to a limited extent, debt securities) consisting of issuers engaged in gold
operations, including securities of gold mining finance companies as well as
operating companies with long-, medium- or short-life mines. Up to 35% of Gold
Fund's assets may be invested in equity and, to a limited extent, debt
securities unrelated to the precious metals industry where the investment
adviser believes such securities are consistent with Gold Fund's investment
objective.
Gold Fund's investment adviser is of the belief that a gold-based
investment medium will, over the medium term, protect capital from adverse
monetary and political developments of a national or international nature and
may offer better opportunity for capital growth than many other forms of
investment. Investments in gold may provide more of a hedge against currencies
with declining buying power, devaluation and inflation than other types of
investments. In those periods when investments in gold and gold-related
securities appreciate in value relative to the U.S. dollar, Gold Fund's
investments may serve to offset erosion in the purchasing power of the U.S.
dollar.
[As indicated, the investment adviser is of the belief that the price
of gold and gold-related securities generally are likely to experience
significant appreciation in the relatively near future. If, however, this
expected bull market in gold-related securities does not develop or if it does
but the investment adviser should conclude that any price appreciation that
occurs is not likely to continue, the investment adviser expects that it will
recommend to the Company's Board of Directors that the Company seek the vote of
Gold Fund's shareholders to liquidate Gold Fund. Liquidation would involve the
sale of all of Gold Fund's assets, followed by the distribution of the proceeds,
less accrued liabilities, to shareholders. The decision to recommend liquidation
will not, however, affect the right of Gold Fund shareholders to redeem their
shares or to exchange their shares for shares of Money Fund, International Fund
or Overseas Fund, in the latter two cases without payment of any additional
sales charge. Potential investors should carefully weigh the consequences of
investing in, and paying the related sales charge for, a fund that may have a
limited term from the date of this Prospectus.]
Gold Fund anticipates that it will normally invest in common stocks and
securities convertible into common stocks, such as convertible preferreds,
convertible debentures and sponsored or unsponsored American Depositary Receipts
(ADRs), Global Depositary Receipts (GDRs) and European Depositary Receipts
(EDRs) for those securities, all of which may be traded on a securities exchange
or over-the-counter. Gold Fund may invest up to 20% of its total assets in debt
securities, including lower-rated securities, commonly referred to as "junk
bonds" (i.e., securities rated BB or lower by S&P or Ba or lower by Moody's and
securities that are not rated). There are no restrictions as to the ratings of
debt securities acquired by Gold Fund or the portion of Gold Fund's assets that
may be invested in debt securities in a particular rating category. The market
performance of non-convertible debt securities of companies engaged in mining
and processing gold can be expected to be comparable to that of other debt
obligations of similar quality and generally will not react to fluctuations in
the price of gold. An investment in the debt instruments of gold-related
companies, therefore, cannot be expected to provide the hedge against inflation
that may be provided through investment in equity securities of companies
engaged in such activities. Investment in such debt securities can serve to
reduce the risk of fluctuation in net asset value of a portfolio composed
primarily of gold-related equity investments. Gold Fund may also invest in
"structured securities" in which the value is linked to the price of an
underlying instrument, such as a currency, commodity, or index.
Because of Gold Fund's policy of investing primarily in securities of
companies engaged in gold mining, processing, dealing in or holding gold and
other precious metals, a substantial part of Gold Fund's assets will generally
be invested in securities of companies domiciled or operating in one or more
foreign countries.
Money Fund Investment Objective and Policies.
Money Fund seeks as high a level of current income as is considered
consistent with the preservation of capital and liquidity. The investment
objective of Money Fund may be changed by the Company's Board of Directors
without shareholder approval. If there were such a change, each shareholder
would need to consider whether Money Fund would remain an appropriate investment
in light of the shareholder's then current financial position and needs.
Shareholders will be notified a minimum of sixty days in advance of any change
in investment objective.
In seeking to achieve its investment objective, Money Fund invests
exclusively in the following types of U.S. dollar-denominated money market
instruments which mature in 397 days or less and which Money Fund's investment
adviser has determined to present minimal credit risk:
1. Bank certificates of deposit, time deposits or bankers' acceptances of
domestic banks (including their foreign branches) and U.S. and foreign
branches of foreign banks having capital surplus and undivided profits in
excess of $100 million.
2. Commercial paper rated Prime-1 or Prime-2 by Moody's, A-1 or A-2 by S&P,
Duff 2 or higher by Duff & Phelps, Inc. ("Duff"), or F-2 or higher by Fitch
Investors Service, Inc. ("Fitch"); commercial paper or notes of issuers
with an unsecured debt issue outstanding currently rated Aa or higher by
Moody's, AA or higher by S&P, AA or higher by Duff, or AA or higher by
Fitch where the obligation is on the same or a higher level of priority and
collateralized to the same extent as the rated issue; investments in other
corporate obligations such as publicly traded bonds, debentures and notes
rated Aa by Moody's, AA by S&P, Duff or Fitch; and other similar securities
which, if unrated by Moody's, S&P, Duff or Fitch, are determined by Money
Fund's investment adviser, using guidelines approved by the Board of
Directors, to be at least equal in quality to one or more of the above
referenced securities. Notwithstanding the foregoing, Money Fund may invest
no more than 5% of its total assets in securities that are accorded the
second highest rating by the requisite number of nationally recognized
statistical rating organizations. (For a description of the ratings, see
"Appendix -- Ratings of Investment Securities" in the Statement of
Additional Information.)
3. Obligations of, or guaranteed by, the U.S. or Canadian governments, their
agencies or instrumentalities.
4. Repurchase agreements involving obligations that are suitable for
investment under the categories set forth above.
Implementation of Investment Strategies and Related Risks.
In addition to the investment policies described above (and subject to
certain restrictions described herein), the Funds may invest in some or all of
the following securities and employ some or all of the following investment
techniques, some of which may present special risks as described below. A more
complete discussion of these securities and investment techniques and their
associated risks is contained in the Funds' Statement of Additional Information.
Because the Funds' investments will be subject to the market
fluctuations and risks inherent in all investments, there can be no assurance
that the Funds' stated objectives will be realized. Societe Generale Asset
Management Corp. ("SGAM Corp."), the Funds' investment adviser, will seek to
minimize these risks through professional management and investment
diversification. The value of shares of the International Fund, Overseas Fund
and Gold Fund when sold may be higher or lower than when purchased. Although
Money Fund is designed to maintain a stable share price of $1.00, there can be
no assurance that Money Fund will be able to do so.
Foreign Investments. International Fund, Overseas Fund, and Gold Fund
provide investors with an opportunity to place a portion of their assets in a
diversified portfolio of foreign securities. In addition, Money Fund may invest
in U.S. dollar-denominated high quality foreign debt securities. From time to
time, many foreign economies have grown faster than the U.S. economy, and the
returns on investments in these countries have exceeded those of similar U.S.
investments, although there can be no assurance that these conditions will
continue. International investing allows investors to achieve greater
diversification and to take advantage of changes in foreign economies and market
conditions.
Investors should understand and consider carefully the greater risks
involved in foreign investing. Investing in foreign securities and other
positions which are generally denominated in foreign currencies, and utilization
of forward foreign currency exchange contracts (see "Currency Exchange
Transactions" below), involve certain risks and opportunities not typically
associated with investing in U.S. securities. These include: fluctuations in the
rates of exchange between the U.S. dollar and foreign currencies; changes in
exchange control regulations or currency restrictions that would prevent cash
from being brought back to the United States; less public information with
respect to issuers of securities; less governmental supervision of stock
exchanges, securities brokers and issuers of securities; different accounting,
auditing and financial reporting standards; different settlement periods and
trading practices; less liquidity and frequently greater price volatility in
foreign markets than in the United States; imposition of foreign taxes; and
sometimes less advantageous legal, operational and financial protections
applicable to foreign sub-custodial arrangements.
Investing in countries outside the United States entails political
risk. There exists the possibility of restrictions on foreign investors,
expropriation of assets, confiscatory taxation, seizure or nationalization of
foreign bank deposits or other assets, establishment of exchange controls, or
other adverse political or social developments that could affect investment in
these nations. Economies in individual markets may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross domestic
product, rates of inflation, currency depreciation, capital reinvestment,
resource self-sufficiency and balance of payments positions. Many emerging
market countries have experienced extremely high rates of inflation for many
years. That has had and may continue to have very negative effects on the
economies and securities markets of those countries.
The securities markets of emerging countries are substantially smaller,
less developed, less liquid and more volatile than the securities markets of the
United States and other more developed countries. Disclosure and regulatory
standards in many respects are less stringent than in the United States. There
also may be a lower level of monitoring and regulation in emerging markets of
traders, insiders and investors. Enforcement of existing regulations has been
extremely limited.
Since Money Fund will invest only in U.S. dollar-denominated
securities, the return on its shares will not be subject to the risk of adverse
changes in the exchange rates between the U.S. dollar and foreign currencies. In
addition, Money Fund does not intend to invest in the securities markets of
emerging countries.
Fluctuations in the Price of Gold. Due to Gold Fund's policy of
concentrating its investments in gold and other precious metal-related issuers,
investment in Gold Fund's shares involves special considerations, including
changes in U.S. or foreign tax, currency or mining laws and increased
environmental costs. The price of gold has been subject to dramatic downward and
upward price movements over short periods of time and may be affected by
unpredictable international monetary and political policies such as currency
devaluations or revaluations, economic conditions within an individual country,
trade imbalances, or trade or currency restrictions between countries. The price
of gold, in turn, is likely to affect the market prices of securities of
companies mining or processing gold, and accordingly, the value of Gold Fund's
investments in such securities may also be affected. Gold-related investments as
a group have performed less well than the stock market in general during periods
when the U.S. dollar is strong, inflation is low and general economic conditions
are stable.
Currency Exchange Transactions. Each Fund may engage in currency
exchange transactions to hedge against losses in the U.S. dollar value of its
portfolio securities resulting from possible variations in exchange rates and
not for speculation. A currency exchange transaction may be conducted either on
a spot (i.e., cash) basis at the spot rate for purchasing or selling currency
prevailing in the foreign exchange market or through a forward currency exchange
contract ("forward contract"). A forward contract is an agreement to purchase or
sell a specified currency at a specified future date (or within a specified time
period) and price set at the time of the contract. Forward contracts are usually
entered into with banks and broker/dealers, are not exchange-traded and are
usually for less than one year, but may be renewed. Currency exchange
transactions may involve currencies of the different countries in which a Fund
may invest. Although forward contracts may be used to protect a Fund from
adverse currency movements, the use of such hedges may reduce or eliminate
potential profits from currency fluctuations that are otherwise in a Fund's
favor.
Temporary Strategies; Cash Reserves. Overseas Fund and Gold Fund each
has the flexibility to respond promptly to changes in market and economic
conditions. In the interest of preserving shareholders' capital, SGAM Corp. may
employ a temporary defensive investment strategy if it determines such a
strategy to be warranted. Pursuant to such a defensive strategy, a Fund
temporarily may hold cash (U.S. dollars, foreign currencies, multinational
currency units) and/or invest up to 100% of its assets in high quality debt
securities or money market instruments of U.S. or foreign issuers. Most or all
of a Fund's investments may be made in the United States and denominated in U.S.
dollars. It is impossible to predict whether, when or for how long a Fund will
employ defensive strategies.
In addition, pending investment of proceeds from new sales of shares or
to meet ordinary daily cash needs, a Fund temporarily may hold cash (U.S.
dollars, foreign currencies or multinational currency units) and may invest any
portion of its assets in money market instruments.
Year 2000. Like other investment companies, financial and business
organizations and individuals around the world, the Funds could be adversely
affected if the computer systems used by the SGAM Crop. or other service
providers to the Funds do not properly process and calculate date-related
information and data from and after January 1, 2000. This is commonly known as
the "Year 2000 Problem." SGAM Corp. is taking steps that it believes are
reasonably designed to address the Year 2000 Problem with respect to computer
systems that it uses and is taking steps to obtain reasonable assurances that
comparable steps are being taken by the Funds' other service providers. At this
time, however, there can be no assurance that these steps will be sufficient to
avoid any adverse impact to the Funds.
The Year 2000 Problem is expected to impact corporations, which may
include issuers of portfolio securities held by the Funds, to varying degrees
based upon various factors, including, but not limited to, the corporation's
industry sector and degree of technological sophistication. In this regard, the
Funds occasionally invest in issuers located in emerging markets. Such issuers
may not be applying the same diligence to the Year 2000 Problem as are issuers
in more mature markets. The Funds are unable to predict what impact, if any, the
Year 2000 Problem will have on the issuers of securities held in the Funds'
portfolios.
MANAGEMENT OF THE COMPANY
Investment Adviser.
The Company's portfolios are managed by SGAM Corp., 1221 Avenue of the
Americas, New York, New York 10020. SGAM Corp. is a registered investment
adviser which is indirectly owned by Societe Generale, one of France's largest
banks. Jean-Marie Eveillard, President and Director of the Company, is primarily
responsible for the day-to-day management of the Company's investment
portfolios. Mr. Eveillard has been a Director and President or Executive Vice
President of SGAM Corp. since 1990.
SGAM Corp. furnishes investment advice to the Funds consistent with
each Fund's stated investment objective and policies. SGAM Corp. also furnishes
the Company with office space and certain facilities and services required for
its business and pays any compensation and expenses of the officers of the
Company.
Advisory fees are paid monthly, except that the advisory fees for
International Fund are paid quarterly. The annual fee rates listed above for
International Fund, Overseas Fund and Gold Fund are higher than the rate of fees
paid by most United States mutual funds that invest in domestic equity
securities. The Company believes, however, that the advisory fee rates are not
higher than the rate of fees paid by most other mutual funds that invest
significantly in foreign equity securities. For the fiscal year ended March 31,
1999, International Fund, Overseas Fund, Gold Fund, and Money Fund paid advisory
fees equal to [ ]%, [ ]%, [ ]% and [ ]%, respectively, of their average daily
net asset values.
DISTRIBUTION ARRANGEMENTS
The Funds' shares are offered, in states and countries in which such
offer is lawful, to investors either through selected securities dealers or
directly by the Funds' principal underwriter, Funds Distributor, Inc. ("FDI"),
[address]. FDI, which replaced SG Cowen Securities Corporation as the Funds'
principal underwriter on [July 1], 1999, is a registered broker-dealer.
Class A shares of International Fund and Overseas Fund and shares of
Gold Fund are subject to a sales charge that is described under "How to Invest
How to Purchase Shares - Public Offering Price," below.
International Fund (on behalf of its Class A shares), Overseas Fund (on
behalf of its Class A shares) and Gold Fund have each adopted a Distribution
Plan and Agreement (the "Plan") pursuant to Rule 12b-1 under the Investment
Company Act of 1940. Under the Plan, each Fund may pay FDI a quarterly
distribution related fee at an annual rate not to exceed 0.25% of the average
daily net asset value attributable to the participating class of shares. FDI is
obligated to use the amounts received under the Plan for payments to qualifying
dealers (not to exceed 0.25% of the average daily net asset value of accounts of
participating classes originated by such dealers) for their assistance in the
distribution of a Fund's shares and the provision of shareholder services and
for other expenses such as advertising costs and the payment for the printing
and distribution of prospectuses to prospective investors. FDI bears
distribution expenses to the extent they are not covered by payments under the
Plan. Any distribution expenses incurred by FDI in any fiscal year of a Fund
which are not reimbursed from payments under the Plan accrued in such fiscal
year will not be carried over for payment under the Plan in any subsequent year.
Class I shares and shares of Money Fund do not participate in the Plan and are
not charged with any portion of the payments made under the Plan.
Because the fees are paid out of Fund assets on an on-going basis, over
time these fees will increase the cost of an investment in the Funds and may
ultimately cost more than paying other types of sales charges.
HOW TO INVEST
Net Asset Value.
The price at which shares of each Fund are purchased or redeemed is
equal to the net asset value per share of a Fund as determined on the effective
day of a purchase or redemption. Each Fund's net asset value per share is
computed as of the close of trading on the New York Stock Exchange ("NYSE") on
each day during which the NYSE is open for trading. The net asset value per
share is computed by dividing the total current value of the assets of a Fund,
less its liabilities, by the total number of shares outstanding at the time of
such computation. Because each Fund may invest in securities that are listed on
foreign exchanges that may trade on weekends or other days when those Funds do
not price their shares, those Funds' share value may change on days when
shareholders will not be able to purchase or redeem those Funds' shares.
In the case of International Fund, Overseas Fund, and Gold Fund,
portfolio securities are valued primarily based on market quotations where
available. Short-term investments maturing in sixty days or less are valued at
cost plus interest earned, which approximates value. In the case of Money Fund,
portfolio securities are valued at their amortized cost, which approximates
market value, subject to guidelines and procedures established by the Board of
Directors in accordance with applicable SEC regulations. Securities for which
current market quotations are not readily available are valued at fair value as
determined in good faith by the Board of Directors of the Company.
How to Purchase Shares.
The minimum initial and subsequent investment amounts generally
required for each Fund and each class of shares within a Fund are listed in the
table below:
Minimum
Initial Investment Amount
Needed to Minimum Subsequent
Open an Account Investment Amount
International Fund
Class A $1,000 $100
Class I* $1 million $100
Overseas Fund
Class A $1,000 $100
Class I* $1 million $100
Gold Fund $1,000 $100
Money Fund $10,000 $100
- ------------
* The current net asset value of a shareholder's account in any class of any
of the SoGen Funds may qualify for purposes of meeting the initial minimum
investment amount for International Fund Class I shares and Overseas Fund
Class I shares.
The Automatic Investment Program and Automatic Exchange Program each
require a minimum initial investment of $100 per Fund (see "Shareholder
Services") and an account with Money Fund that is opened by an exchange (see
"Shareholder Services - Exchange Privilege") requires a minimum investment of
$1,000. "Starter" checks and third-party checks will not be accepted for
purposes of opening a new account. The Funds reserve the right to waive the
initial minimum investment amounts, at the discretion of the principal
underwriter, for certain investors, including Fund employees and directors and
officers of SGAM Corp. A Fund's shares may be purchased through authorized
dealers or through FDI, the Funds' principal underwriter. A completed and signed
application is required for the initial account opened with the Funds. If there
is no application accompanying this Prospectus, please call (800) 334-2143 to
obtain one.
The principal underwriter reserves the right to limit the purchase of a
Fund's shares when it is in the best interest of the Fund.
Purchases Through Dealers.
Investors may purchase a Fund's shares through selected securities
dealers with whom FDI has sales agreements. A prospective investor may obtain
additional New Account Applications from such authorized dealers. For a list of
authorized dealers, please contact FDI at [ ]. Authorized dealers and financial
service firms may charge the investor a transaction fee in addition to the
applicable sales load.
Authorized dealers and financial service firms are responsible for
promptly transmitting purchase orders to FDI, the Funds' principal underwriter.
Purchases Through FDI.
Shares of a Fund may be purchased through FDI by mailing a check made
payable to The SoGen Funds along with the completed New Account Application to
The SoGen Funds, [c/o DST, P.O. Box 419324, Kansas City, MO 64141-6324]. [Shares
may also be purchased through FDI by Automated Clearing House ("ACH") transfer
or by bank wire. Please call [(800) 334-2143] for procedures as to how to
establish and administer the ACH purchase option, and please call prior to
wiring any funds.] See "Shareholders' Reference Guide" at the back of this
Prospectus for wiring instructions.
Public Offering Price.
The public offering price at which transactions will be effected will
be equal to the net asset value per share plus, in the case of International
Fund Class A shares, Overseas Fund Class A shares and Gold Fund shares, a sales
charge as described below. The net asset value per share of Money Fund is
expected to remain constant at $1.00 per share. Orders for shares received by
DST prior to the close of trading on the NYSE, or orders received by dealers
prior to such time and transmitted to FDI prior to the latter's close of
business, will be effected based on the net asset value determined as of the
close of trading on the NYSE that day. Net asset value per share is calculated
as set forth under "Net Asset Value," below. Class I shares and shares of the
Money Fund are not subject to sales charges. The sales charges currently in
effect are as follows:
Investment Amounts
<TABLE>
<S> <C> <C> <C>
Sales Charge Dealer Discount
Sales Charge as Expressed as as Percent of
Percent of Public Approximate Percent Public Offering
Offering Price of Net Amount Price
Invested
Less than $25,000 3.75% 3.90% 3.35%
$25,000 or more but less than $50,000 3.25% 3.35% 2.85%
$50,000 or more but less than $100,000 2.75% 2.83% 2.35%
$100,000 or more but less than $500,000 2.00% 2.04% 1.60%
$500,000 or more but less than $1,000,000 1.00% 1.01% 0.80%
$1,000,000 and over 0.00% 0.00% 0.00%
</TABLE>
Sales charges applicable to persons residing in countries outside the
United States may vary from those listed above.
FDI reallows discounts to selected dealers with whom it has sales
agreements and is entitled to retain the balance over the dealer discounts. FDI
may from time to time reallow the entire sales load, and may provide additional
promotional incentives, to dealers selling a Fund's shares. Such additional
promotional incentive may include financial assistance in connection with
pre-approved conferences or seminars, sales or training programs for invited
sales personnel and payment for travel expenses for such seminars or training
programs. In some instances the entire reallowance or incentives may be offered
only to certain dealers which have sold or may sell significant amounts of a
Fund's shares. Authorized dealers to whom substantially the entire sales charge
is reallowed may be deemed to be underwriters as that term is defined under the
Securities Act of 1933.
SGAM Corp. may from time to time pay a concession to a dealer which
employs a registered representative whose client invests in a Fund. Such amount
will be paid from the resources of SGAM Corp.
Reducing the Sales Charge.
As shown in the table above, the size of the total investment in a Fund
will affect the sales charge. Described below are several methods to reduce the
applicable sales charge. In order to obtain a reduction in the sales charge, an
investor must notify, at the time of purchase, his dealer, FDI or DST of the
applicability of one of the following:
Aggregation. The investment schedule above applies to the total amount
being invested by any "person," which term includes an individual, his spouse,
parents and children; a trustee or other fiduciary purchasing for a single
trust, estate or single fiduciary account (including a pension, profit-sharing
or other employee benefit trust created pursuant to a plan qualified under the
Internal Revenue Code) although more than one beneficiary is involved; or any
U.S. bank or investment adviser purchasing shares for its investment advisory
clients or customers. Any such person purchasing for several accounts at the
same time, may combine these investments into a single transaction in order to
reduce the applicable sales charge. Individual accounts and
corporate/partnership accounts may not be aggregated for purposes of reducing
the sales charge.
Concurrent Purchases. The sales load associated with an investment may
be reduced by combining concurrent purchases of International Fund Class A
shares, Overseas Fund Class A shares and Gold Fund shares and shares of other
funds advised by SGAM Corp., offered subsequent to the date of this Prospectus
subject to a sales load ("SoGen Load Funds"), by any "person," as described
above in "Aggregation." The concurrent purchase discount does not apply to
purchases of International Fund Class I shares, Overseas Fund Class I shares and
Money Fund shares. The applicable sales load will be based on the total dollar
amount of the investment in shares of two or more SoGen Load Funds that are
concurrently purchased.
Rights of Accumulation. A Fund's shares may be purchased at a reduced
sales charge by a "person" (as defined above in "Aggregation") who is already a
shareholder by taking into account not only the amount then being invested, but
also the current net asset value of the shares of any SoGen Load Fund already
held by such person. If the current net asset value of the qualifying shares
already held plus the net asset value of the current purchase exceeds a point in
the schedule of sales charges at which the charge is reduced to a lower
percentage, the entire current purchase is eligible for the reduced charge. To
be entitled to a reduced sales charge pursuant to the Rights of Accumulation,
the investor must notify his dealer, FDI or DST at the time of purchase that he
wishes to take advantage of such entitlement, and give the numbers of his
accounts, and those accounts held in the name of his spouse, parents or children
and the specific relationship of each such other person to the investor.
Letter of Intention. A "person" (as defined above in "Aggregation") may
also qualify for a reduced sales charge by completing the Letter of Intention
(the "Letter") contained in the New Account Application or a form for this
purpose which may be obtained by contacting the Funds at (800) 334-2143. This
enables the investor to aggregate purchases of shares of any SoGen Load Fund
during a thirteen-month period for purposes of calculating the applicable sales
charge. Applicable shares of any SoGen Load Fund currently owned by the investor
will be credited as purchases toward the completion of the Letter at the greater
of their net asset value on the date the Letter is executed or their cost. No
retroactive adjustment will be made if purchases exceed the amount indicated in
the Letter. For each investment made, the investor must notify his dealer, FDI
or DST that a Letter is on file along with all account numbers associated with
the Letter.
The Letter is not a binding obligation on the investor. However, 5% of
the amount specified in the Letter will be held in escrow, and if the investor's
purchases are less than the amount specified, the investor will be requested to
remit to the appropriate Fund an amount equal to the difference between the
sales charge paid and the sales charge applicable to the aggregate purchases
actually made. If not remitted within 20 days after written request, an
appropriate number of escrowed shares will be redeemed in order to realize the
difference. However, the sales charge applicable to the investment will in no
event be higher than if the shareholder had not submitted a Letter. Either the
shareholder or the Company may cancel the arrangement at will.
Sales at Net Asset Value. International Fund Class A shares, Overseas
Fund Class A shares and Gold Fund shares may be sold at net asset value (i.e.,
without a sales charge) (i) to registered representatives or employees of
authorized dealers, the spouse, parents or children of such person, or to any
trust, pension, profit-sharing or other benefit plan for only such persons, (ii)
to banks or trust companies or their affiliates when the bank, trust company or
affiliate is authorized to make investment decisions on behalf of a client,
(iii) to investment advisers and financial planners who place trades for their
own accounts or the accounts of their clients and who charge a management,
consulting or other fee for their services, (iv) to clients of such investment
advisers and financial planners who place trades for their own accounts if the
accounts are linked to the master account of such investment adviser or
financial planner on the books and records of the broker, agent, investment
adviser or financial institution, and (v) to retirement and deferred
compensation plans and trusts used to fund those plans, including, but not
limited to, those defined in Section 401(a), 403(b) or 457 of the Internal
Revenue Code and "rabbi trusts." Investors may be charged a fee if they effect
transactions in Fund shares through a broker or agent. Shares of the Funds may
also be sold at net asset value to current officers, directors and employees of
the Company, SGAM Corp., [FDI], U.S. branches and affiliates of Societe
Generale, employees of certain firms providing services to the Funds (such as
the custodian and the shareholder servicing agent), and to the spouse, parents
and children of any such person, or to any trust, pension, profit-sharing or
other benefit plan for only such persons. A Fund may also issue shares at net
asset value in connection with the acquisition of, or merger or consolidation
with, another investment company. The sales of shares at net asset value
described in this section are made upon the written assurance of the purchaser
that the purchase is made for investment purposes and that the shares will not
be resold except through redemption. Such notice must be given to FDI or DST at
the time of purchase on a form for this purpose as available from the Funds.
Reinstatement Privilege.
In addition, an investor is entitled to a one-time per account
privilege to reinvest in any SoGen Load Fund the proceeds of a full or partial
redemption of shares from a SoGen Load Fund at the then applicable net asset
value without payment of a sales charge. To exercise this privilege the investor
must submit to FDI or DST, within 60 calendar days after the redemption, both a
written request for reinstatement and a check or bank wire in an amount not
exceeding the redemption proceeds. An investor may also transfer an investment
in any SoGen Load Fund to an IRA or other tax qualified retirement plan account
in any SoGen Load Fund without payment of a sales charge. Such a transfer
involves a redemption of a Fund's shares and a reinvestment of the proceeds and,
hence, may involve a taxable transaction for income tax purposes.
Reinstatement will not prevent recognition of a gain realized on the
redemption, but a loss may be disallowed for tax purposes. The amount of gain or
loss resulting from the redemption may be affected by exercise of the
reinstatement privilege if the shares redeemed were held for 90 days or less, or
if a shareholder reinvests in the Funds within 30 days.
Bookshare Account Plan.
To facilitate the handling of transactions with shareholders, the Funds
use a bookshare account plan for shareholder accounts. DST, as the Funds'
transfer agent, automatically opens and maintains an account for each of the
Funds' shareholders directly registered with a Fund. All interests in shares,
full and fractional (rounded to three decimal places), are reflected in a
shareholder's book account. After any purchase, a confirmation is mailed to the
shareholder indicating the amount of full and fractional shares purchased, the
price per share and a statement of his account. Stock certificates will not be
issued for the shares of any Fund.
Conditions of Purchase.
The Company and FDI each reserves the right to refuse any order for
purchase of shares and to cancel any purchase due to nonpayment. Share purchases
are not binding on the Company or FDI until they are confirmed by DST as paid.
All payments must be made in U.S. dollars, and all checks must be drawn on U.S.
banks. No cash will be accepted. As a condition of this offering, if an
investor's purchase is canceled due to nonpayment or because his check or ACH
transfer does not clear, the investor will be responsible for any loss a Fund
may incur as a result thereof.
How to Redeem Shares.
Shareholders have the right to redeem all or any part of their shares
of a Fund for cash at the net asset value next computed after receipt of the
redemption request in proper form as further described below. Neither the
Company nor FDI currently charges a fee or commission upon the redemption of a
Fund's shares. Shareholders may redeem either through authorized dealers,
through FDI or by telephone. Shares held in the dealer's "street name" must be
redeemed through the dealer.
Redemptions Through Dealers.
Shareholders who have an account with an authorized dealer may submit a
redemption request to such dealer. Authorized dealers are responsible for
promptly transmitting redemption requests to FDI. Dealers may impose a charge
for handling redemption transactions placed through them and may have particular
requirements concerning redemptions. Accordingly, shareholders should contact
their authorized dealers for more information.
Redemptions Through FDI.
Shareholders may redeem their Fund shares through FDI by transmitting
written redemption instructions to The SoGen Funds, c/o [DST, P.O. Box 419324,
Kansas City, MO 64141-6324].
Redemptions by Telephone.
Unless contrary instructions are elected in the New Account Application
or Special Options Form, shareholders may redeem a Fund's shares in
non-retirement accounts by telephone by calling DST at (800) 334-2143. Telephone
redemption requests received prior to the close of business on the NYSE on any
Fund business day will be effected on that day. Such requests received after the
close of business on the NYSE will be effected on the following business day.
Shareholders may not make a redemption request by telephone if the proceeds are
to be wired to a bank account number or mailed to an address other than the one
previously designated by the shareholder. Such requests must be in writing
accompanied by a signature guarantee. Shareholders who would like to change
wiring instructions should send written notification, signed by all of the
account's registered shareholders and accompanied by a signature guarantee, to
DST at the address listed above. (See "Redemption Price" below for acceptable
guarantors. See "Receiving Redemption Proceeds" below for change of address
procedures.) There is a $100,000 maximum on telephone redemptions by check.
There is no limitation on redemptions by ACH transfer or by bank wire; however,
a fee will be deducted from proceeds sent by bank wire. Telephone redemption
privileges may be difficult to implement and may be modified or suspended
without notice during periods of drastic economic or market changes. DST has
instituted procedures it believes are reasonably designed to ensure that
redemption instructions communicated by telephone are genuine, and could be
liable for losses caused by unauthorized or fraudulent instructions in the
absence of such procedures. DST will require a form of personal identification
prior to acting upon telephone instructions, will provide a written confirmation
of such transaction and will record a shareholder's instructions. Telephone
redemption privileges may be modified or terminated at any time by the company
upon written notice to shareholders.
Redemption Price.
Orders to redeem shares received in proper form by DST prior to the
close of trading on the NYSE, or redemption orders received by dealers prior to
such time and transmitted to FDI prior to the latter's close of business, will
be effected at the net asset value determined as of the close of trading on the
NYSE that day.
Redemption requests must meet all the following requirements to be
considered in proper form:
1. Written and signed instructions from the registered owner(s) must be
received by DST (except for telephone redemptions).
2. A letter or a stock power signed by the registered owner(s) must be
signature guaranteed by an acceptable guarantor. A guarantee is required
for such redemptions to be paid by check greater than $100,000, or where
the redemption proceeds are to be sent to an address other than the address
of record, to a person other than the registered shareholder(s) for the
account or to a bank account number other than the one previously
designated by the shareholder. A signature guarantee is not required for
any amount redeemed by ACH transfer or bank wire when a pre-designated bank
has been identified by the shareholder. Any one of the following guarantors
is normally acceptable: (a) a commercial bank or trust company; (b) a
member firm of a domestic stock exchange; (c) a foreign branch of any
institution included in paragraph (a) or (b); (d) a national securities
exchange; or (e) a savings association. Guarantees from a notary public are
not acceptable.
3. All certificates, if any, to be redeemed must be received by DST in
negotiable form.
4. In the case of shares held of record in the name of a corporation, trust,
fiduciary or partnership, evidence of authority to sign and a stock power
with signature(s) guaranteed must be received by DST.
Receiving Redemption Proceeds.
Payment of the redemption price will generally be made within three
business days after receipt of the redemption request in proper form, but the
Company may suspend the right of redemption and postpone payment during any
period when (i) trading on the NYSE is restricted or such exchange is closed,
other than customary weekend and holiday closings, (ii) the Securities and
Exchange Commission ("SEC") has by order permitted such suspension, or (iii) an
emergency, as defined by the rules of the SEC, exists, making disposal of
portfolio securities or determination of a Fund's net asset value not reasonably
practicable.
The Funds will not mail redemption proceeds for any shares until checks
or ACH transfers received in payment for such shares have cleared, which may
take up to fifteen days. Investors who wish to avoid any such delay should
purchase shares by bank wire.
In addition, any change of address will require a fifteen-day holding
period before the proceeds of any redemption will be released to the new
address. Shareholders will have the ability to use the exchange privilege during
this holding period. Shareholders can avoid the fifteen-day holding period if
either the redemption or change of address request is signed by all registered
owners and is accompanied by a signature guarantee for each owner. The
fifteen-day holding period can also be avoided by establishing bank wire
redemption instructions through the New Account Application or Special Options
Form.
Redemption proceeds are normally paid in the form of a check. Proceeds
can also be sent to a shareholder's bank account by ACH transfer or by bank wire
when a pre-designated bank has been identified in the New Account Application or
Special Options Form. Proceeds sent by ACH transfer should generally be credited
to a shareholder's account on the second business day after the redemption.
Proceeds sent by bank wire should be credited on the business day following the
redemption; however, a fee will be deducted from such proceeds.
The amount realized on a redemption may be more or less than the
investor's cost, depending on the net asset value of a Fund's shares at the time
of such redemption, and a gain or loss may be recognized for tax purposes.
Minimum Account Size.
Due to the relatively high cost of maintaining smaller accounts, the
Company reserves the right to redeem shares in any account if the value of that
account drops below $500, except accounts for shareholders currently
participating in the Automatic Investment program described below. The Company
also reserves the right to redeem shares in any Class I account if the value of
that Class I account drops below $100,000. A shareholder will be allowed at
least 60 days to make an additional investment to bring his account value to the
stated minimum before the redemption is processed.
Shareholder Services.
The Company offers the following shareholder services:
Exchange Privilege.
Shareholders or authorized parties are entitled to exchange some or all
of their International Fund Class A shares, Overseas Fund Class A shares or Gold
Fund shares for shares of the Money Fund and shares of other SoGen Load Funds.
Shareholders or authorized parties are also entitled to exchange some or all of
their International Fund Class I shares or Overseas Fund Class I shares for
Class I shares of any other SoGen Fund and shares of the Money Fund. Such shares
exchanged will be valued at their respective net asset values computed as of the
close of trading on the NYSE on the day the exchange is requested.
An exchange of shares pursuant to the exchange privilege may result in
a shareholder realizing a taxable gain or loss for income tax purposes. The
exchange privilege is available to shareholders residing in any state in which
the shares of the Fund being acquired may legally be sold. There is no charge
for the exchange privilege. Any exchange, however, must meet the applicable
minimum investment amount for the Fund into which the exchange is being made as
set forth on Page [ ]. Upon exchanges of shares of Money Fund for shares of any
SoGen Load Fund, payment of the applicable sales load must be made, unless a
sales load has already been paid on such shares. For additional information
concerning exchanges, or to effect exchanges, contact the Funds at (800)
334-2143.
Exchanges by telephone may be difficult to implement in times of
drastic economic or market changes. The exchange privilege should not be used to
take advantage of short-term swings in the securities markets. The Company
reserves the right to limit or terminate the exchange privilege as to any
shareholder who makes exchanges more than four times a year (other than through
the Automatic Exchange Program or a similar periodic investment program). The
Company can modify or revoke the exchange privilege for all shareholders upon 60
days' prior written notice or without notice in times of drastic economic or
market changes.
Conversion.
Class A shares of International Fund or Overseas Fund having an
aggregate value not less than $1 million may be converted into Class I shares of
the same Fund upon the election of the shareholder. Such conversions shall take
place at net asset value, shall not result in the realization of income or gain
for Federal income tax purposes and shall be tax free to shareholders. For
additional information concerning conversions, or to effect a conversion,
contact your dealer, financial intermediary or the Funds at (800) 334-2143.
Automatic Exchange Program.
Shareholders who wish to automatically exchange shares of one Fund for
another on a monthly basis can do so by means of the Automatic Exchange Program.
The minimum exchange amount is $100. If the balance in the account the
shareholder is exchanging from falls below the designated automatic exchange
amount, all remaining shares will be exchanged and the program will be
discontinued. All conditions with respect to exchange transactions apply as
discussed in "Exchange Privilege" above.
Telephone Privileges.
Unless contrary instructions are elected in the New Account Application
or Special Options Form, the account will be entitled to make telephone
purchases, redemptions, exchanges, conversions and account maintenance requests.
Neither the Company nor its agents will be liable for following instructions
communicated by telephone that are reasonably believed to be genuine. Reasonable
procedures will be employed on behalf of each Fund to confirm that the
instructions are genuine. Such procedures include, but are not limited to,
written confirmation of telephone transactions, tape recording telephone
conversations and requiring specific personal information prior to acting upon
telephone instructions.
Any owner(s), trustee(s) or other fiduciary entity as indicated in the
account registration, investment professional of record and/or other parties
that can provide specific personal information will be allowed to initiate any
of the above referenced telephone transactions. Personal information may include
a combination of the following items: (i) the fund and account number, (ii) the
account registration, (iii) the social security or tax identification number on
the account, (iv) the address of record, (v) designated bank account information
and any other information deemed appropriate to allow access to the account.
Certain retirement accounts are not eligible for all the telephone
privileges referenced above. Please call (800) 334-2143 with all inquiries
pertaining to telephone privileges.
Automatic Investment Program.
Investors may make regular semi-monthly, monthly or quarterly
investments of $100 (or more) in shares of any SoGen Load Fund or Money Fund,
automatically from a checking or savings account. Upon written authorization,
DST will debit the investor's designated bank account as indicated and use the
proceeds to purchase shares of a Fund for the investor's account. Because
approval by the investor's bank is required, establishment of an Automatic
Investment Program may require at least thirty days. To establish an Automatic
Investment Program, indication must be made on the New Account Application or
Special Options Form, and a check (minimum $100 if a new account is being
established), savings account deposit slip or savings account statement must be
forwarded to DST. Shares purchased through Automatic Investment Program payments
are subject to the redemption restrictions for recent purchases described in
"How to Redeem Shares." The Company may amend or cease to offer the Automatic
Investment Program at any time.
Dividend Direction Plan.
Shareholders in a Fund may elect to have income dividends and capital
gains distributions on their Fund shares invested without the payment of any
sales charge in shares of Money Fund or shares of any SoGen Load Fund in which
they have an existing account and maintain a minimum account balance. All
dividends and distributions so invested are taxable for U.S. federal income tax
purposes as though received in cash. For further information about this
privilege, contact DST in writing at the appropriate address listed the
Shareholder's Reference Guide or by telephone at (800) 334-2143.
Systematic Withdrawal Plan.
A shareholder who owns shares of a Fund with a current net asset value
of $10,000 or more may use those shares to establish a Systematic Withdrawal
Plan to receive a monthly or quarterly check in a stated amount of not less than
$50 on or about the 25th day of the month. Dividends and distributions on shares
invested under a Systematic Withdrawal Plan may not be taken in cash but must be
reinvested, which will be done at net asset value. A Fund's shares will be
redeemed as necessary to meet withdrawal payments. Withdrawals in excess of
dividends and distributions will reduce and may deplete the invested principal
and may result in a gain or loss for tax purposes. Purchases of additional
shares made concurrently with withdrawals of shares are undesirable because of
sales charges incurred when purchases are made. Accordingly, a shareholder may
not maintain a Systematic Withdrawal Plan while simultaneously making regular
purchases. New accounts established by check, after the 10th of the month, will
not begin distribution until the following month due to the fifteen-day hold on
check purchases. The Company may amend or cease to offer the Systematic
Withdrawal Plan at any time.
Retirement Plans.
The Company offers a variety of retirement plans such as IRA, Roth-IRA,
SEP, SIMPLE IRA and Education IRA and 403(b)(7) plans which allow investors to
save for retirement and defer taxes on investment income, if any. The tax
benefits of these plans may not be available for all persons. Investors should
consult their tax advisers regarding their eligibility.
Retirement plans may purchase International Fund Class I shares or
Overseas Fund Class I shares provided they meet the minimum initial investment
amount of $1 million or the plan has or expects to have 100 or more participants
and will be domiciled in an omnibus or pooled account within each Fund and will
not require a Fund to pay any type of administrative fee or payment per
participant account to any third party.
For appropriate applications, please contact the Funds at (800)
334-2143.
Shareholder Statements And Reports.
A confirmation statement is mailed to shareholders for each transaction
in a Fund, and a summary statement and tax reporting are provided at year end.
Each Fund also provides shareholders with an annual Prospectus as well as annual
and semi-annual reports.
Account Maintenance.
Shareholders will often need to update certain account information
during their relationship with the Funds. Please call (800) 334-2143 with any
questions concerning the legal requirements necessary to execute your request.
Inquiries.
For information on how to buy shares of a Fund or to request additional
literature about any of the Funds, or for account information, shareholder
services or information on how to redeem shares, please refer to the
Shareholders' Reference Guide, below.
Dividends, Distributions And Taxes
Dividends and Distributions.
Money Fund intends to declare a dividend of its net investment income
daily and pays such dividends monthly. Money Fund intends to distribute net
realized capital gains, if any, at least annually.
It is the policy of International Fund, Overseas Fund, and Gold Fund to
make periodic distributions but no less than annual distributions of net
investment income and net realized capital gains, if any. Unless a shareholder
otherwise elects income dividends and capital gains distributions will be
reinvested in additional shares of the Funds at net asset value per share
calculated as of the payment date. The Funds pay both income dividends and
capital gains distributions on a per share basis. As a result, on the
ex-dividend date of such payment, the net asset value per share of International
Fund, Overseas Fund, and Gold Fund will be reduced by the amount of such
payment. The net asset value per share of Money Fund is expected, however, to
remain constant at $1.00 per share.
Taxes Generally.
Each Fund intends to qualify and has elected to be treated as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended. To qualify, a Fund must meet certain income,
diversification and distribution requirements. As a regulated investment
company, a Fund generally will not be subject to federal income or excise taxes
on income and capital gains distributed to shareholders within applicable time
limits, although foreign source income received by a Fund may be subject to
foreign withholding taxes.
Shareholders normally will be taxed on the dividends and capital gains
distributions they receive from a Fund whether received in additional shares or
cash. Dividend payments representing taxable net investment income and any net
short-term capital gains will be taxable as ordinary income. If any portion of
the income of a Fund consists of dividends received from U.S. corporations, a
portion of the dividends paid by such Fund may qualify for the
dividends-received deduction available to corporate shareholders. Distributions
of any net long-term capital gain designated as capital gains distributions will
be taxable to individual shareholders at a maximum 20% capital gains rates,
regardless of how long they have held their shares. A distribution will be
treated as paid on December 31 of the current calendar year if it is declared by
a Fund in October, November or December with a record date in such a month and
paid by the Fund during January of the following calendar year.
Upon the sale or other disposition of shares of a Fund, a shareholder
may realize a capital gain or loss which may be eligible for reduced federal tax
rates, generally depending upon the shareholder's holding period for the shares.
Information regarding the tax status of income dividends and capital
gains distributions will be sent to shareholders by January 31 of each year.
Backup Withholding.
The Funds are generally required by the Internal Revenue Service
("IRS") to withhold 31% of the amount of taxable interest, dividends, and
capital gains distributions and (except in the case of the Money Fund)
redemption proceeds paid to shareholders who have not complied with IRS
regulations. In order to avoid this withholding requirement, a U.S. shareholder
must certify on the New Account Application or on a separate Form W-9 that their
Social Security or Taxpayer Identification Number is correct and that he is
exempt from, or is not currently subject to, backup withholding. A non-U.S.
shareholder is generally subject to this 31% withholding on interest, dividends
and capital gains distributions and redemption proceeds unless he certifies on
the New Account Application or on a separate Form W-8 that he is a non-resident
alien and is not engaged in a trade or business in the United States regarding
his Fund shares.
Non-United States Shareholders.
Under current U.S. law, the Funds will ordinarily be obligated to withhold
30% of any ordinary income dividend payments to non-U.S. shareholders unless a
tax treaty exists between the U.S. and the shareholder's country of residence
which provides for withholding on a different basis. Non-U.S. shareholders may
incur a U.S. estate tax liability if they die owning a Fund's shares. Such
shareholders should consult their tax advisers as to the tax liability they may
incur to the United States as a result of owning a Fund's shares and as to the
availability of any credits against taxes payable to their own countries for
taxes paid to the United States.
The foregoing information is intended for general information only. Fund
distributions also may be subject to state, local and foreign taxes.
Shareholders should consult their own tax advisers regarding the particular tax
consequences of an investment in a Fund.
SHAREHOLDERS' REFERENCE GUIDE
Telephone Numbers:
For Fund Information, Account & Shareholder Services: (800) 334-2143
Mail:
Direct Purchases, Redemptions
and Account Updates: The SoGen Funds
c/o DST Systems, Inc.
P.O. Box 419324
Kansas City, MO 64141-6324
Overnight Mail:
The SoGen Funds
c/o DST Systems, Inc.
330 West 9th Street
Kansas City, MO 64105-1807
Wiring Instructions:
You may wire funds to us at: IFTC, Kansas City, MO
ABA Routing #101003621
Account #7534116
Reference: (Your account number and fund name)
To avoid rejection of your wire, you must inform us of your intention
to wire funds to us and include the fund name and your SoGen Fund account number
in the reference section of the wire.
Automatic Investment Program -- Regular investments of at least $100,
automatically from your checking or savings account. Because approval by your
bank is required, establishment of an Automatic Investment Program may require
at least thirty days. See the "Automatic Investment Program" section of the
Prospectus for details.
Systematic Withdrawal Plan -- With a minimum net asset value of
$10,000, you may establish a Systematic Withdrawal Plan to receive, not less
than $50, on a monthly or quarterly basis. Distributions are made on or about
the 25th of the month. New accounts established by check after the 10th of the
month, will not begin distribution until the following month due to the
fifteen-day hold on check purchases. Please see the "Systematic Withdrawal Plan"
section of the Prospectus for details.
Investment through ACH -- A convenient way for you to invest or redeem
shares in your SoGen Fund account. Please contact your financial representatives
or the Funds directly at (800) 334-2143 for further information.
<PAGE>
FINANCIAL HIGHLIGHTS
The Financial Highlights Table is intended to help you understand the
Funds' financial performance for the past five years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in a Fund (assuming reinvestment of all dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the
Funds' financial statements, are included in the Statement of Additional
Information, which is available upon request.
<PAGE>
SoGen International Fund Class A Shares
- ------------------------------------------------------------------------------
For the Year Ended March 31,
- ------------------------------------------------------------------------------
1999 1998 1997 1996 1995
Selected Per Share Data
Net asset value, beginning of year $26.68 $26.09 $23.20 $23.32
------ ------ ------ ------
Income from investment operations:
Net investment income 1.47 1.03 1.06 0.10
Net realized and unrealized gains on 2.10 1.39 3.37 0.49
---- ---- ---- ----
investments
Total from investment operations 3.57 2.42 4.43 0.59
---- ---- ---- ----
Less distributions:
Dividends from net investment income
(1.36) (1.09) (0.81) (0.15)
Distributions from capital gains
(1.47) (0.74) (0.73) (0.56)
------ ------ ------ ------
Total distributions.. (2.83) (1.83) (1.54) (0.71)
------ ------ ------ ------
Net asset value, end of year $27.42 $26.68 $26.09 $23.20
====== ====== ====== ======
Total return* ....... 14.35% 9.48% 19.57% 2.63%
Ratios/Supplemental data
Net assets, end of year (millions)
$4,035 $3,908 $3,033 $1,922
Ratios of operating expenses to
average net assets:
1.18%** 1.21%** 1.25%** 1.26%
Ratios of net investment income to average 2.80%** 3.08%** 3.71%** 2.70%
net assets:..................
Portfolio turnover rate 20.63% 12.85% 9.64% 12.96%
Average commission rate paid# $0.028 $0.003 $0.013 ----
- -----------
* Does not give effect to deduction of the sales load.
** The ratio of operating expenses to average net assets for the years ended
March 31, 1998, 1997 and 1996 would have been 1.19%, 1.21% and 1.25%,
respectively, without the effect of earnings credits. The ratio of net
investment income to average net assets for the years ended March 31, 1998,
1997 and 1996 would have been 2.80%, 3.08% and 3.71%, respectively, without
the effect of earnings credits.
# Average commission rate paid is expressed on a per share basis. Not all
commissions are computed on a per share basis; therefore, commissions
expressed as a percentage of transactions may be higher. Due to Securities
and Exchange Commission disclosure guidelines, average commissions per
share are calculated only for the periods subsequent to the year ended
March 31, 1995.
<PAGE>
<TABLE>
SoGen Overseas Fund Class A Shares
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Year Year Year Year
Ended Ended Ended Ended Ended
March 31, March 31, March 31, March 31, March 31,
1999 1998 1997 1996 1995
Selected Per Share Data
Net asset value, beginning of year............. $13.84 $13.26 $11.65 $11.54
------ ------ ------ ------
Income (loss) from investment operations:
Net investment income (loss)................ 0.88 0.61 0.48 0.14
Net realized and unrealized gains on
investments................................. 0.31 0.95 1.74 0.04
---- ------ ------- -------
Total from investment operations............ 1.19 1.56 2.22 0.18
----- ------ ------- -------
Less distributions:
Dividends from net investment income........ (0.83) (0.60) (0.44) (0.05)
Distributions from capital gains............ (0.68) (0.38) (0.17) (0.02)
------ -------- -------- --------
Total distributions......................... (1.51) (0.98) (0.61) (0.07)
------ -------- -------- --------
Net asset value, end of year................... $ 13.52 $ 13.84 $ 13.26 $ 11.65
======= ======= ======= =======
Total Return++.................................. 10.00% 12.16% 19.47% 1.56%
Ratios/Supplemental Data
Net assets, end of year (millions)............. $1,007 $953 $647 $439
Ratio of operating expenses to average net 1.22%(DELTA) 1.27%(DELTA) 1.37% 1.40%
assets...................................
Ratio of net investment income to average net
assets..............Net investment income 2.20%(DELTA) 2.28%(DELTA) 3.31% 2.29%
Portfolio turnover rate........................ 22.13% 15.18% 9.46%
3.16%
Average commission rate paid#.................. $0.0177 $0.0207 $0.0190 ---
</TABLE>
- -----------
* Annualized.
(DELTA) The ratios of operating expenses to average net assets and net
investment income to average net assets for the year ended March 31, 1998
for SoGen Overseas Fund would have been the same without the effect of
earnings credits. The ratio of operating expenses to average net assets and
net investment income to average net assets for the year ended March 31,
1997 for SoGen Overseas Fund would have been the same and 2.27%,
respectively, without the effect of earnings credits.
++ Total return disclosed for the period ended March 31, 1994 is not
annualized. The annualized total return for the period ended March 31, 1994
was 26.40% for SoGen Overseas Fund.
++ Does not give effect to deduction of the sales load.
# Average commission rate paid is expressed on a per share basis. Not all
commissions are computed on a per share basis; therefore, commissions
expressed as a percentage of transactions may be higher. Due to Securities
and Exchange Commission disclosure guidelines, average commissions per
share are calculated only for the periods subsequent to the year ended
March 31, 1995.
<PAGE>
<TABLE>
SoGen Gold Fund
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Year Year Year Year
Ended Ended Ended Ended Ended
March 31, March 31, March 31, March 31, March 31,
1999 1998 1997 1996 1995
Selected Per Share Data
Net asset value, beginning of year............. $10.60 $12.25 $11.28 $11.42
------ ------ ------ ------
Income from investment operations:
Net investment income (loss)................ 0.13 0.26 0.24 0.08
Net realized and unrealized gains (losses)
on investments.............................. (3.03) (1.75) 1.35 (0.10)
------ ------- ------- -------
Total from investment operations............ (2.90) (1.49) 1.59 (0.02)
------ ------- ------- -------
Less distributions:
Dividends from net investment income........ (0.39) (0.14) (0.35) (0.04)
Distributions from capital gains............ ---- (0.02) (0.27) (0.08)
------- -------- -------- --------
Total distributions......................... (0.39) (0.16) (0.62) (0.12)
------ -------- -------- --------
Net asset value, end of year................... $7.31 $ 10.60 $ 12.25 $ 11.28
===== ======= ======= =======
Total Return++.................................. (27.23%) (12.21)% 14.81% (0.14)%
Ratios/Supplemental Data
Net assets, end of year (millions)............. $31 $53 $63 $51
Ratio of operating expenses to average net 1.50%(DELTA) 1.45%(DELTA) 1.41% 1.46%
assets...................................
Ratio of net investment income to average net
assets..............Net investment income 1.52%(DELTA) 1.20%(DELTA) 1.29% 0.79%
Portfolio turnover rate........................ 11.20% 16.83% 22.40% 11.56%
Average commission rate paid#................... $0.013 $0.0009 $0.0002 ----
</TABLE>
- -----------
* Annualized.
(DELTA) The ratios of operating expenses to average net assets and net
investment income to average net assets for the year ended March 31, 1998
for SoGen Gold Fund would have been 1.56% and 1.46%, respectively, without
the effect of earnings credits. The ratio of operating expenses to average
net assets and investment income to average net assets for the year ended
March 31, 1997 for SoGen Gold Fund would have been 1.46% and 1.19%,
respectively, without the effect of earnings credits.
++ Total return disclosed for the period ended March 31, 1994 is not
annualized. The annualized total return for the period ended March 31, 1994
was 24.34% for SoGen Gold Fund.
++ Does not give effect to deduction of the sales load.
# Average commission rate paid is expressed on a per share basis. Not all
commissions are computed on a per share basis; therefore, commissions
expressed as a percentage of transactions may be higher. Due to Securities
and Exchange Commission disclosure guidelines, average commissions per
share are calculated only for the periods subsequent to the year ended
March 31, 1995.
<PAGE>
<TABLE>
SoGen Money Fund
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Year Year Year Year
Ended Ended Ended Ended Ended
March 31, March 31, March 31, March 31, March 31,
1999 1998 1997 1996 1995
Selected Per Share Data
Net asset value, beginning of year............. $1.00 $1.00 $1.00 $1.00
------ ----- ----- -----
Income from investment operations:
Net investment income (loss)................ 0.05 0.05 0.05 0.04
Net realized and unrealized gains on
investments................................. ---- ---- ---- ----
------ ------ ------- ------
Total from investment operations............ 0.05 0.05 0.05 0.04
------ ------- ------- -------
Less distributions:
Dividends from net investment income........ (0.05) (0.05) (0.05) (0.04)
Distributions from capital gains............ ---- ---- ---- ----
------- ------- -------- --------
Total distributions......................... (0.05) (0.05) (0.05) (0.04)
------ ------ ------ ------
Net asset value, end of year................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ======
Total Return................................... 4.97% 4.61% 5.03% 4.13%
Ratios/Supplemental Data
Net assets, end of year (millions)............. $19 $13 $8 $10
Ratio of operating expenses to average net 0.75%+ 0.75%+ 0.75%+ 0.75%+
assets...................................
Ratio of net investment income to average net
assets..............Net investment income 4.92%+ 4.63%+ 4.98%+ 4.14%+
</TABLE>
- -----------
* Annualized.
+ Without the effect of earnings credits, and the investment advisory fee
waiver and expense reimbursement provided by SGAM Corp., the ratio of
operating expenses to average net assets for SoGen Money Fund for the years
ended March 31, 1998, 1997, 1996, 1995 and for the period ended March 31,
1994 would have been 1.01%, 1.14%, 0.97%, 1.55% and 4.00%, respectively. On
the same basis, the ratio of net investment income to average net assets
for the years ended March 31, 1998, 1997, 1996, 1995 and for the period
ended March 31, 1994 would have been 4.66%, 426%, 4.76%, 3.34% and (1.07%),
respectively.
++ Total return disclosed for the period ended March 31, 1994 is not
annualized. The annualized total return for the period ended March 31, 1994
was 2.14% for SoGen Money Fund.
<PAGE>
SOGEN FUNDS, INC.
1221 Avenue of the Americas
New York, NY 10020
INVESTMENT ADVISER SOCIETE
GENERALE ASSET MANAGEMENT CORP.
1221 Avenue of the Americas
New York, NY 10020
UNDERWRITER
FUNDS DISTRIBUTORS, INC.
[ADDRESS]
LEGAL COUNSEL
DECHERT PRICE & RHOADS
30 Rockefeller Plaza
New York, NY 10112
INDEPENDENT AUDITORS
KPMG PEAT MARWICK LLP
757 Third Avenue
New York, NY 10017
DOMESTIC CUSTODIAN
INVESTORS FIDUCIARY TRUST COMPANY
127 West 10th Street
Kansas City, MO 64105
GLOBAL CUSTODIAN
THE CHASE MANHATTAN BANK
4 Chase MetroTech Center
Brooklyn, NY 11245
SHAREHOLDER SERVICING AGENT
DST SYSTEMS, INC.
P.O. Box 419324
Kansas City, MO 64141-6324
(800) 334-2143
<PAGE>
[Back Cover Page]
SoGen International Fund
SoGen Overseas Fund
SoGen Gold Fund
SoGen Money Fund
Where to go for Additional Information about the Funds.
If you would like additional information about any Fund, the following
information documents are available to you:
Annual/Semi-Annual Reports - Additional information about each Fund's
investments is available in that Fund's annual and semi-annual reports to
shareholders. In these reports, you will find a discussion of the market
conditions and investment strategies that significantly affected each Fund's
performance during the most recent fiscal year.
Statement of Additional Information - Additional information about each
Fund's structure and operations can be found in the Statement of Additional
Information. The information presented in the Statement of Additional
Information is incorporated by reference into this Prospectus and is legally
considered to be part of this Prospectus.
To request a copy of any of the materials described above, or to make
any other inquiries, please contact SoGen Funds, Inc. at (800) 747-2008.
Obtaining Information from the Securities and Exchange Commission
Reports and other information about each Fund (including the Funds'
Statement of Additional Information) may also be obtained from the Securities
and Exchange Commission:
1. By going to the Commission's public Reference Room in Washington, D.C.
where you can review and copy the information. Information on the operation
of the Public Reference Room may be obtained by calling the Commission at
(800) SEC-0330.
2. By accessing the Commission's Internet site at http://www.sec.gov where you
can view, download, and print the information.
3. By writing to the Public Reference Section of the Securities and Exchange
Commission, Washington, D.C. 20549-6009, where, upon payment of a
duplicating fee, copies of the information will be sent to you.
SEC File Number 811-7762
<PAGE>
SAI - 40
SAI -- 1
STATEMENT OF ADDITIONAL INFORMATION
SOGEN INTERNATIONAL FUND
SOGEN OVERSEAS FUND
SOGEN GOLD FUND
SOGEN MONEY FUND
-------------------------
[LOGO OF SOGEN APPEARS HERE]
1221 Avenue of the Americas
New York, NY 10020
(800) 334-2143
-------------------------
Societe Generale Asset Management Corp.
1221 Avenue of the Americas
New York, NY 10020
Investment Adviser
Funds Distributor, Inc.
[Address]
-------------------------
This Statement of Additional Information provides information about
SoGen International Fund, SoGen Overseas Fund, SoGen Gold Fund and SoGen Money
Fund, four separate portfolios of SoGen Funds, Inc. (the "Company"), an open-end
management investment company, in addition to the information contained in the
Prospectus of the Company dated August 1, 1999. This Statement of Additional
Information is not a prospectus. It relates to and should be read in conjunction
with the Prospectus of the Company, a copy of which can be obtained by writing
or by calling the Company at (800) 334-2143.
-------------------------
August 1, 1999
<PAGE>
TABLE OF CONTENTS
Statement of Cross-Referenced to
Additional Information captions in the
Page Prospectus Page
ORGANIZATION OF THE FUNDS
INVESTMENT OBJECTIVES, POLICIES AND
RESTRICTIONS
MANAGEMENT OF THE COMPANY
INVESTMENT ADVISER AND OTHER SERVICES
DISTRIBUTION OF THE FUNDS' SHARES
COMPUTATION OF NET ASSET VALUE
HOW TO PURCHASE SHARES
TAX STATUS
BROKERAGE ALLOCATION
CUSTODY OF PORTFOLIO
INDEPENDENT AUDITORS
FINANCIAL STATEMENTS
APPENDIX
<PAGE>
ORGANIZATION OF THE FUNDS
SoGen International Fund, SoGen Overseas Fund, SoGen Gold Fund and
SoGen Money Fund, (each individually referred to as a "Fund", collectively, the
"Funds" or, alternatively, the "International Fund," the "Overseas Fund," the
"Gold Fund," and the "Money Fund," respectively) are four separate portfolios of
SoGen Funds, Inc. (the "Company"), an open-end management investment company
incorporated under the laws of Maryland in May 1993. Each Fund is a separate,
diversified portfolio of assets and has a different investment objective which
it pursues through separate investment policies, as described below. The
Company's investment adviser is Societe Generale Asset Management Corp.
("SGAM"), a registered investment adviser. The Company's principal underwriter
is Funds Distributor, Inc. ("FDI"), a registered broker-dealer located in [ ].
Pursuant to the laws of Maryland, the Company's jurisdiction of
incorporation, the Board of Directors of the Company has adopted By-Laws of the
Company that do not require annual meetings of the Funds' shareholders. The
absence of a requirement that the Company hold annual meetings of the Funds'
shareholders reduces its expenses. Meetings of shareholders will continue to be
held when required by the Investment Company Act of 1940 or Maryland law or when
called by the Chairman of the Board of Directors, the President or shareholders
owning 10% of a Fund's outstanding shares. The cost of any such notice and
meeting will be borne by each Fund.
Under the provisions of the Investment Company Act of 1940, a vacancy
in the office of Director of the Company may be filled between meetings of the
shareholders of the Company by vote of the Directors then in office if,
immediately after filling such vacancy, at least two-thirds of the Directors
then holding office have been elected to the office of Director by the
shareholders of the Funds. In the event that at any time less than a majority of
the Directors of the Company holding office at that time were elected by the
shareholders of the Funds, the Board of Directors or the Chairman of the Board
shall, within sixty days, cause a meeting of shareholders to be held for the
purpose of electing directors to fill any vacancies in the Board of Directors.
The staff of the Securities and Exchange Commission has advised the
Funds that it interprets Section 16(c) of the Investment Company Act of 1940,
which provides a means for dissident shareholders of common-law trusts to
communicate with other shareholders of such trusts and to vote upon the removal
of trustees upon the request in writing by the record holders of not less than
10 percent of the outstanding shares of the trust, to apply to investment
companies, such as the Company, that are incorporated under Maryland law.
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
Investment Objectives of the Funds.
International Fund. The International Fund's investment objective is to
provide long-term growth of capital. In seeking to achieve this objective, the
Fund will normally invest its assets primarily in common stocks (and in
securities convertible into common stocks) of United States and foreign
companies. However, the Fund reserves the right to invest a portion of its
assets in fixed-income securities of domestic or foreign issuers which, in
addition to the income they may provide, appear to offer potential for long-term
growth of capital. When deemed appropriate by the Fund's investment adviser for
short-term investment or defensive purposes, the Fund may hold up to 100% of its
assets in short-term debt instruments including commercial paper and
certificates of deposits.
Investors should refer to the Fund's Prospectus for further discussion
of the Fund's investment objective and policy. There can be no assurance that
the Fund's stated objective will be realized.
Overseas Fund. The Overseas Fund seeks long-term growth of capital by
investing primarily in securities of small and medium size non-U.S. companies.
The Fund uses the techniques and invests in the types of securities described
below and in the Prospectus.
Gold Fund. The Gold Fund seeks growth of capital by investing primarily
in securities of companies engaged in mining, processing, dealing in or holding
gold or other precious metals such as silver, platinum and palladium, both in
the United States and in foreign countries. Gold-related investments have
provided protection against loss of purchasing power during periods of extensive
price inflation and/or following periods of extensive credit expansion. Under
normal circumstances, at least 65% of the value of the Fund's total assets will
be invested in securities (which may include both equity and, to a limited
extent, debt securities) consisting of issuers engaged in gold operations,
including securities of gold mining finance companies as well as operating
companies with long, medium or short-life mines.
Money Fund. The Money Fund seeks as high a level of current income as
is considered consistent with the preservation of capital and liquidity. The
Fund pursues its objective by investing exclusively in U.S. dollar-denominated
money market instruments which mature in 397 days or less.
Investment Policies, Techniques and Risks.
International Fund.
Commodity Linked Securities. The International Fund may invest up to 5%
of its assets in structured notes and/or preferred stock, the value of which is
linked to the price of a referenced commodity. Structured notes and/or preferred
stock differ from other types of securities in which the Fund may invest in
several respects. For example, not only the coupon but also the redemption
amount at maturity may be increased or decreased depending on the change in the
price of the referenced commodity.
Investment in commodity linked securities involves certain risks. In
addition to the credit risk of the security's issuer and the normal risks of
price changes in response to changes in interest rates, the redemption amount
may decrease as a result of changes in the price of the referenced commodity.
Further, in certain cases, the coupon and/or dividend may be reduced to zero,
and any further decline in the value of the security may then reduce the
redemption amount payable on maturity. Finally, commodity linked securities may
be more volatile than the price of the referenced commodity.
Gold Fund.
Fluctuations in the Price of Gold (Gold Fund). The price of gold has
been subject to substantial upward and downward price movements over short
periods of time and may be affected by unpredictable international monetary and
political policies, such as currency devaluations or revaluations, economic
conditions within an individual country, trade imbalances or trade or currency
restrictions between countries and world inflation rates and interest rates. The
price of gold, in turn, is likely to affect the market prices of securities of
companies mining, processing or dealing in gold, and accordingly, the value of
the Fund's investments in such securities also may be affected.
Money Fund.
Asset-Backed Securities (Money Fund). The Money Fund can invest a
portion of its assets in debt obligations known as "Asset-Backed Securities"
which are Eligible Securities (as that term is hereinafter defined). The credit
quality of most Asset-Backed Securities depends primarily on the credit quality
of the assets underlying such securities, how well the entity issuing the
security is insulated from the credit risk of the originator (or any other
affiliated entities), and the amount and quality of any credit support provided
to the securities. The rate of principal payments on Asset-Backed Securities
generally depends on the rate of principal payments received on the underlying
assets, which in turn may be affected by a variety of economic and other
factors. As a result, the yield on any Asset-Backed Security is difficult to
predict with precision and actual yield to maturity may be more or less than the
anticipated yield to maturity. Asset-Backed Securities may be classified as
"Pass-Through Certificates" or "Collateralized Obligations." Where deemed
appropriate by the Board of Directors, Asset-Backed Securities may be valued
using prices provided by a pricing service. The stated maturity of a particular
Asset-Backed Security will be treated as the instrument's maturity for purposes
of the Fund's portfolio maturity requirements, unless there exists an associated
demand feature, enabling the Fund to treat the instrument as having a shorter
maturity.
"Pass-Through Certificates" are Asset-Backed Securities which represent
an undivided fractional ownership interest in the underlying pool of assets.
Pass-Through Certificates usually provide for payments of principal and interest
received to be passed through to their holders, usually after deduction for
certain costs and expenses incurred in administering the pool. Because
Pass-Through Certificates represent ownership interests in the underlying
assets, the holders thereof bear directly the risk of any defaults by the
obligors on the underlying assets not covered by any credit support.
Asset-Backed Securities issued in the form of debt instruments, also
known as Collateralized Obligations, are generally issued as the debt of a
special purpose entity organized solely for the purpose of owning such assets
and issuing such debt. The assets collateralizing such Asset-Backed Securities
are pledged to a trustee or custodian for the benefit of the holders thereof.
Such issuers generally hold no assets other than those underlying the
Asset-Backed Securities and any credit support provided. As a result, although
payments on such Asset-Backed Securities are obligations of the issuers, in the
event of default on the underlying assets not covered by any credit support, the
issuing entities are unlikely to have sufficient assets to satisfy their
obligations on the related Asset-Backed Securities.
Eurodollar Certificates. To the extent that the Money Fund purchases
Eurodollar certificates of deposit, consideration will be given to their
marketability and possible restrictions on international currency transactions
and to regulations imposed by the domicile country of the foreign issuer.
Eurodollar certificates of deposit may not be subject to the same regulatory
requirements as certificates of deposit issued by U.S. banks and associated
income may be subject to the imposition of foreign taxes.
Repurchase Agreements. The Money Fund may invest in repurchase
agreements, which are instruments under which the Money Fund acquires ownership
of a security from a broker/dealer or bank that agrees to repurchase the
security at a mutually agreed upon time and price (which price is higher than
the purchase price), thereby determining the yield during the Money Fund's
holding period. Maturity of the securities subject to repurchase may exceed 397
days. In the event of a bankruptcy or other default of a seller of a repurchase
agreement, the Money Fund might have expenses in enforcing its rights, and could
experience losses, including a decline in the value of the underlying security
and loss of income. The Money Fund will only enter into repurchase agreements
with banks and other recognized financial institutions such as broker/dealers
which are deemed by the Money Fund's investment adviser to be creditworthy.
Restricted Securities. The Money Fund may invest in commercial paper
issued in reliance on the so-called "private placement" exemption from
registration afforded by Section 4(2) of the Securities Act of 1933, and resold
to qualified institutional buyers under Securities Act Rule 144A ("Section 4(2)
paper"). Section 4(2) paper is restricted as to disposition under the federal
securities laws, and generally is sold to institutional investors such as the
Money Fund which agree that they are purchasing the paper for investment and not
with a view to public distribution. Any resale by the purchaser must be in an
exempt transaction and may be accomplished in accordance with Rule 144A. Section
4(2) paper normally is resold to other institutional investors, like the Money
Fund, through or with the assistance of the issuer or investment dealers who
make a market in the Section 4(2) paper, thus providing liquidity. The
investment adviser will carefully monitor the Money Fund's investments in these
securities, focusing on such factors, among others, as valuation, liquidity and
availability of information. Investment in Section 4(2) paper could have the
effect of reducing the Money Fund's liquidity to the extent that qualified
institutional buyers become, for a time, uninterested in purchasing these
restricted securities.
Variable Rate Securities. The Money Fund may invest in instruments
having rates of interest that are adjusted periodically or which "float"
continuously according to formulae intended to minimize fluctuation in the
values of the instruments ("Variable Rate Securities"). The interest rates of
Variable Rate Securities ordinarily are determined by reference to, or are a
percentage of, an objective standard such as a bank's prime rate, the 90-day
U.S. Treasury Bill rate, or the rate of return on commercial paper or bank
certificates of deposit. Generally, the changes in the interest rates on
Variable Rate Securities reduce the fluctuations in the market values of such
securities. Accordingly, as interest rates decrease or increase, the potential
for capital appreciation or depreciation is less than for fixed-rate
obligations. Some Variable Rate Securities ("Variable Rate Demand Securities")
have a demand feature entitling the purchaser to resell the securities at an
amount approximately equal to amortized cost or the principal amount thereof
plus accrued interest. The Money Fund will determine the maturity of Variable
Rate Securities in accordance with Securities and Exchange Commission rules
which allow the Money Fund to consider certain of such instruments as having
maturities shorter than the maturity date on the face of the instrument. Under
such rules, the maturity date of Variable Rate Demand Securities may be
considered to be the longer of the period remaining until the next readjustment
of the interest rate or the period remaining until the principal amount can be
recovered through demand.
Methods of Allocating Cash Flows. While many Asset-Backed Securities
are issued with only one class of security, many others are issued in more than
one class, each with different payment terms. Multiple class Asset-Backed
Securities are issued for two main reasons. First, multiple classes may be used
as a method of providing credit-support. This is accomplished typically through
creation of one or more classes whose right to payments on the Asset-Backed
Security is made subordinate to the right to such payments of the remaining
class or classes. Second, multiple classes may permit the issuance of securities
with payment terms, interest rates or other characteristics differing both from
those of each other and from those of the underlying assets. Examples include
so-called "multi-tranche CMOs" (collateralized mortgage obligations with serial
maturities such that all principal payments received on the mortgages underlying
the securities are first paid to the class with the earliest stated maturity,
and then sequentially to the class with the next stated maturity), "Strips"
(Asset-Backed Securities entitling the holder to disproportionate interests with
respect to the allocation of interest and principal of the assets backing the
security), and securities with a class or classes having characteristics which
mimic the characteristics of non-Asset-Backed Securities, such as floating
interest rates (i.e., interest rates which adjust as a specified benchmark
changes) or scheduled amortization of principal.
Types of Credit Support. Asset-Backed Securities are often backed by a
pool of assets representing the obligations of a number of different parties. To
lessen the effect of failures by obligors on these underlying assets to make
payments, such securities may contain elements of credit support. Such credit
support falls into two classes: liquidity protection and protection against
ultimate default on the underlying assets. Liquidity protection refers to the
provision of advances, generally by the entity administering the pool of assets,
to ensure that scheduled payments on the underlying pool are made in a timely
fashion. Protection against ultimate default ensures payment on at least a
portion of the assets in the pool. Such protection may be provided through
guarantees, insurance policies or letters of credit obtained from third parties,
through various means of structuring the transaction, or through a combination
of such approaches. Examples of Asset-Backed Securities with credit support
arising out of the structure of the transaction include "senior-subordinated
securities" (multiple class Asset-Backed Securities with certain classes
subordinate to other classes as to the payment of principal thereon, with the
result that defaults on the underlying assets are borne first by the holders of
the subordinated class) and Asset-Backed Securities that have "reserve funds"
(where cash or investments, sometimes funded from a portion of the initial
payments on the underlying assets, are held in reserve against future losses) or
that have been "over-collateralized" (where the scheduled payments on, or the
principal amount of, the underlying assets substantially exceed that required to
make payment on the Asset-Backed Securities and pay any servicing or other
fees). The degree of credit support provided on each issue is based generally on
historical information respecting the level of credit risk associated with such
payments. Delinquency or loss in excess of that anticipated could adversely
affect the return on an investment in an Asset-Backed Security.
Credit Card Receivable Securities. The Fund may invest in Asset-Backed
Securities backed by receivables from revolving credit card agreements ("Credit
Card Receivable Securities"). Most of the Credit Card Receivable Securities
issued publicly to date have been Pass-Through Certificates. In order to
lengthen the maturity of Credit Card Receivable Securities, most such securities
provide for a fixed period during which only interest payments on the underlying
accounts are passed through to the security holder and principal payments
received on such accounts are used to fund the transfer to the pool of assets
supporting the related Credit Card Receivable Securities of additional credit
card charges made on an account. The initial fixed period usually may be
shortened upon the occurrence of specified events which signal a potential
deterioration in the quality of the assets backing the security, such as the
imposition of a cap on interest rates. The ability of the issuer to extend the
life of an issue of Credit Card Receivable Securities thus depends upon the
continued generation of additional principal amounts in the underlying accounts
during the initial period and the non-occurrence of specified events.
Competitive, regulatory and general economic factors could adversely affect the
rate at which new receivables are created in an account and conveyed to an
issuer, shortening the expected weighted average life of the related Credit Card
Receivable Security and reducing its yield. An acceleration in cardholders'
payment rates or any other event which shortens the period during which
additional credit card charges on an account may be transferred to the pool of
assets supporting the related Credit Card Receivable Security could have a
similar effect on the weighted average life and yield.
Credit card holders are entitled to the protection of a number of state
and federal consumer credit laws, many of which give such holder the right to
set off certain amounts against balances owed on the credit card, thereby
reducing amounts paid on accounts. In addition, unlike most other Asset-Backed
Securities, accounts are unsecured obligations of the cardholder.
Investment Policies Applicable to More Than One Fund.
Policies Applicable to All Funds:
Foreign Securities. Each Fund may (and the International Fund and the
Overseas Fund will) invest in foreign securities, which may entail a greater
degree of risk (including risks relating to exchange rate fluctuations, tax
provisions, or expropriation of assets) than does investment in securities of
domestic issuers. The Funds may invest in securities of foreign issuers directly
or in the form of American Depository Receipts (ADRs), Global Depository
Receipts (GDRs), European Depository Receipts (EDRs), or other securities
representing underlying shares of foreign issuers. Positions in these securities
are not necessarily denominated in the same currency as the common stocks into
which they may be converted. ADRs are receipts typically issued by an American
bank or trust company evidencing ownership of the underlying securities. EDRs
are European receipts evidencing a similar arrangement. GDRs are global
offerings where two securities are issued simultaneously in two markets, usually
publicly in non-U.S. markets and privately in the U.S. market. Generally ADRs,
in registered form, are designed for use in the U.S. securities markets, EDRs,
in bearer form, are designed for use in European securities markets. GDR's are
designed for use in the U.S. and European securities markets. Each of the Funds
(except the Money Fund) may invest in both "sponsored" and "unsponsored" ADRs.
In a sponsored ADR, the issuer typically pays some or all of the expenses of the
depository and agrees to provide its regular shareholder communications to ADR
holders. An unsponsored ADR is created independently of the issuer of the
underlying security. The ADR holders generally pay the expenses of the
depository and do not have an undertaking from the issuer of the underlying
security to furnish shareholder communications. Issuers of unsponsored ADRs are
not obligated to disclose material information in the United States and,
therefore, there may not be a correlation between such information and the
market value of the ADRs. Each Fund does not expect to invest 5% or more of its
total assets in unsponsored ADRs.
With respect to portfolio securities that are issued by foreign issuers
or denominated in foreign currencies, the investment performance of a Fund is
affected by the strength or weakness of the U.S. dollar against these
currencies. For example, if the dollar falls in value relative to the Japanese
yen, the dollar value of a yen-denominated stock held in the portfolio will rise
even though the price of the stock remains unchanged. Conversely, if the dollar
rises in value relative to the yen, the dollar value of the yen-denominated
stock will fall. (See discussion of transaction hedging and portfolio hedging
under "Currency Exchange Transactions.")
Investors should understand and consider carefully the risks involved
in foreign investing. Investing in foreign securities, positions which are
generally denominated in foreign currencies, and utilization of forward foreign
currency exchange contracts involve certain risks and opportunities not
typically associated with investing in U.S. securities. These considerations
include: fluctuations in the rates of exchange between the U.S. dollar and
foreign currencies; possible imposition of exchange control regulations or
currency restrictions that would prevent cash from being brought back to the
United States; less public information with respect to issuers of securities;
less governmental supervision of stock exchanges, securities brokers, and
issuers of securities; different accounting, auditing and financial reporting
standards; different settlement periods and trading practices; less liquidity
and frequently greater price volatility in foreign markets than in the United
States; imposition of foreign taxes; and sometimes less advantageous legal,
operational and financial protections applicable to foreign sub-custodial
arrangements.
Although the Funds seek to invest in companies and governments of
countries having stable political environments, there is the possibility of
expropriation or confiscatory taxation, seizure or nationalization of foreign
bank deposits or other assets, establishment of exchange controls, the adoption
of foreign government restrictions, or other adverse political, social or
diplomatic developments that could affect investment in these nations.
The countries in which the International Fund and the Overseas Fund
invest are included in those listed below. The International Fund and the
Overseas Fund may not invest in all the countries listed, and they may invest in
countries that are not listed, when such investments are consistent with the
Funds' investment objective and policies. In addition, the Gold Fund may invest
in gold-related investments in any countries deemed suitable by the investment
adviser.
Mature Markets Emerging Markets
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Australia Argentina Morocco
Austria Brazil Nigeria
Belgium Chile Pakistan
Canada Czech Republic People's Republic of China
Denmark Ecuador Peru
Finland Greece Philippines
France Hungary Poland
Germany India South Africa
Hong Kong Indonesia South Korea
Ireland Israel Sri Lanka
Italy Jamaica Taiwan
Japan Jordan Thailand
Luxembourg Kenya Turkey
Netherlands Malaysia Uruguay
New Zealand Mexico Venezuela
Norway Vietnam
Portugal
Singapore
Spain
Sweden
Switzerland
United Kingdom
United States
It may not be feasible for the International Fund, the Overseas Fund or
the Gold Fund currently to invest in all of these countries due to restricted
access to their securities markets or inability to implement satisfactory
custodial arrangements.
Since the Money Fund will invest only in U.S. dollar-denominated
securities, the return on its shares will not be subject to the risk of adverse
changes in the exchange rates between the U.S. dollar and foreign currencies. In
addition, the Money Fund does not intend to invest in the securities markets of
emerging countries.
The cost of investing in foreign securities is higher than the cost of
investing in U.S. securities. Investing in each Fund is an efficient way for an
individual to participate in foreign markets, but its expenses, including
advisory and custody fees, are higher than the expenses of a typical mutual fund
that invests in domestic equities.
Restricted and Illiquid Securities. Each Fund may invest up to 15% of
its net assets (10% in the case of the Money Fund and the International Fund) in
illiquid securities, including certain securities that are subject to legal or
contractual restrictions on resale ("restricted securities").
Generally, restricted securities may be sold only in privately
negotiated transactions or in a public offering with respect to which a
registration statement is in effect under the Securities Act of 1933 (the "1933
Act"). Where registration is required, a Fund may be obligated to pay all or
part of the registration expenses and a considerable period may elapse between
the time of the decision to sell and the time the Fund may be permitted to sell
a security under an effective registration statement. If, during such a period,
adverse market conditions were to develop, the Fund might obtain a less
favorable price than that which prevailed when it decided to sell. Restricted
securities will be priced at fair value as determined in good faith by the Board
of Directors. If, through the appreciation of illiquid securities or the
depreciation of liquid securities, a Fund should be in a position where more
than 15% of the value of its net assets (10% in the case of the Money Fund and
the International Fund) is invested in illiquid assets, including restricted
securities, the Fund will take appropriate steps to protect liquidity.
Notwithstanding the above, a Fund may purchase securities that have
been privately placed but that are eligible for purchase and sale under Rule
144A under the 1933 Act. That rule permits certain qualified institutional
buyers, such as the Funds, to trade in privately placed securities that have not
been registered for sale under the 1933 Act. SGAM Corp., under the supervision
of the Board of Directors of the Company, will consider whether securities
purchased under Rule 144A are illiquid and thus subject to a Fund's restriction
on investing in illiquid securities. A determination as to whether a Rule 144A
security is liquid or not is a factual issue requiring an evaluation of a number
of factors. In making this determination, SGAM Corp. will consider the trading
markets for the specific security, taking into account the unregistered nature
of a Rule 144A security. In addition, SGAM Corp. could consider (1) the
frequency of trades and quotes, (2) the number of dealers and potential
purchasers, (3) the dealer undertakings to make a market, and (4) the nature of
the security and of market place trades (e.g., the time needed to dispose of the
security, the method of soliciting offers and the mechanics of transfer). The
liquidity of Rule 144A securities would be monitored and if, as a result of
changed conditions, it is determined that a Rule 144A security is no longer
liquid, a Fund's holdings of illiquid securities would be reviewed to determine
what steps, if any, are required to assure that the Fund does not invest more
than the maximum percentage of its assets in illiquid securities. Investing in
Rule 144A securities could have the effect of increasing the amount of a Fund's
assets invested in illiquid securities if qualified institutional buyers are
unwilling to purchase such securities.
Bank Obligations. Each Fund may invest in bank obligations, which may
include bank certificates of deposit, time deposits or bankers' acceptances.
Certificates of deposit and time deposits are negotiable certificates issued
against funds deposited in a commercial bank for a definite period of time and
earning a specified return. Bankers' acceptances are negotiable drafts or bills
of exchange, normally drawn by an importer or exporter to pay for specific
merchandise, which are "accepted" by a bank, meaning in effect that the bank
unconditionally agrees to pay the face value of the instrument on maturity.
Investments in these instruments are limited to obligations of domestic banks
(including their foreign branches) and U.S. and foreign branches of foreign
banks having capital surplus and undivided profits in excess of $100 million.
Policies Applicable to the International Fund, the Overseas Fund and the Gold
Fund:
Currency Exchange Transactions. A currency exchange transaction may be
conducted either on a spot (i.e., cash) basis at the spot rate for purchasing or
selling currency prevailing in the foreign exchange market or through a forward
currency exchange contract ("Forward Contract"). A Forward Contract is an
agreement to purchase or sell a specified currency at a specified future date
(or within a specified time period) and price set at the time of the contract.
Forward Contracts are usually entered into with banks and broker/dealers, are
not exchange traded and are usually for less than one year, but may be renewed.
Currency exchange transactions may involve currencies of the different
countries in which the International Fund, the Overseas Fund and Gold Fund may
invest, and serve as hedges against possible variations in the exchange rates
between these currencies and the U.S. dollar. A Fund's currency transactions are
limited to transaction hedging and portfolio hedging involving either specific
transactions or portfolio positions. Transaction hedging is the purchase or sale
of a Forward Contract with respect to specific payables or receivables of a Fund
accruing in connection with the purchase or sale of portfolio securities.
Portfolio hedging is the use of a Forward Contract with respect to a portfolio
security position denominated or quoted in a particular currency. A Fund may
engage in portfolio hedging with respect to the currency of a particular country
in amounts approximating actual or anticipated positions in securities
denominated in that currency.
If a Fund enters into a Forward Contract, the custodian bank will
segregate liquid assets of the Fund having a value equal to the Fund's
commitment under such Forward Contract.
At the maturity of a Forward Contract to deliver a particular currency,
a Fund may either sell the portfolio security related to such contract and make
delivery of the currency, or it may retain the security and either acquire the
currency on the spot market or terminate its contractual obligation to deliver
the currency by purchasing an offsetting contract with the same currency trader
obligating it to purchase on the same maturity date the same amount of the
currency.
It is impossible to forecast with absolute precision the market value
of portfolio securities at the expiration of a Forward Contract. Accordingly, it
may be necessary for a Fund to purchase additional currency on the spot market
(and bear the expense of such purchase) if the market value of the security is
less than the amount of currency the Fund is obligated to deliver, and if a
decision is made to sell the security and make delivery of the currency.
Conversely, it may be necessary to sell on the spot market some of the currency
received upon the sale of the portfolio security if its market value exceeds the
amount of currency the Fund is obligated to deliver.
If a Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss to the extent that there has
been movement in Forward Contract prices. If a Fund engages in an offsetting
transaction, it may subsequently enter into a new Forward Contract to sell the
currency. Should forward prices decline during the period between the date a
Fund enters into a Forward Contract for the sale of a currency and the date it
enters into an offsetting contract for the purchase of the currency, the Fund
will realize a gain to the extent the price of the currency it has agreed to
sell exceeds the price of the currency it has agreed to purchase. Should forward
prices increase, the Fund will suffer a loss to the extent the price of the
currency it has agreed to purchase exceeds the price of the currency it has
agreed to sell. A default on the contract would deprive the Fund of unrealized
profits or force the Fund to cover its commitments for purchase or sale of
currency, if any, at the current market price.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also preclude the
opportunity for gain if the value of the hedged currency should rise. Moreover,
it may not be possible for a Fund to hedge against a devaluation that is so
generally anticipated that the Fund is not able to contract to sell the currency
at a price above the devaluation level it anticipates. The cost to a Fund of
engaging in currency exchange transactions varies with such factors as the
currency involved, the length of the contract period and prevailing market
conditions. Since currency exchange transactions are usually conducted on a
principal basis, no fees or commissions are involved.
Lower-Rated Debt Securities. Each of the International Fund, the
Overseas Fund and the Gold Fund may invest in debt securities, including
lower-rated securities (i.e., securities rated BB or lower by Standard & Poor's
Corporation ("S&P") or Ba or lower by Moody's Investors Service, Inc.
("Moody's"), commonly called "junk bonds") and securities that are not rated.
There are no restrictions as to the ratings of debt securities acquired by a
Fund or the portion of a Fund's assets that may be invested in debt securities
in a particular rating category, except that the Overseas Fund and the Gold Fund
will not invest more than 20% of its assets in securities rated below investment
grade or unrated securities considered by the investment adviser to be of
comparable credit quality.
Securities rated BBB by S&P or Baa by Moody's (the lowest investment
grade ratings) are considered to be of medium grade and to have speculative
characteristics. Debt securities rated below investment grade are predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal. Although lower-rated debt and comparable unrated debt securities may
offer higher yields than do higher rated securities, they generally involve
greater volatility of price and risk of principal and income, including the
possibility of default by, or bankruptcy of, the issuers of the securities. In
addition, the markets in which lower-rated and unrated debt securities are
traded are more limited than those in which higher rated securities are traded.
Adverse publicity and investors' perceptions, whether or not based on
fundamental analysis, may decrease the values and liquidity of lower-rated debt
securities, especially in a thinly traded market. During periods of thin trading
in these markets, the spread between bid and asked prices is likely to increase
significantly, and a Fund may have greater difficulty selling its portfolio
securities. See "Computation of Net Asset Value." Analyses of the
creditworthiness of issuers of lower-rated debt securities may be more complex
than for issuers of higher rated securities, and the ability of the Fund to
achieve its investment objective may, to the extent of investment in lower-rated
debt securities, be more dependent upon such creditworthiness analyses than
would be the case if the Fund were investing in higher rated securities.
Lower-rated debt securities may be more susceptible to real or
perceived adverse economic and competitive industry conditions than investment
grade securities. The prices of lower-rated debt securities have been found to
be less sensitive to interest rate changes than higher rated investments, but
more sensitive to adverse economic downturns or individual corporate
developments. A projection of an economic downturn or of a period of rising
interest rates, for example, could cause a decline in lower-rated debt
securities' prices because the advent of a recession could lessen the ability of
a highly-leveraged company to make principal and interest payments on its debt
securities. If the issuer of lower-rated debt securities defaults, a Fund may
incur additional expenses seeking recovery.
A more complete description of the characteristics of bonds in each
rating category is included in the appendix to this Statement of Additional
Information.
Policies Applicable to the Overseas Fund, the Gold Fund and the Money Fund:
When-Issued or Delayed-Delivery Securities. Each Fund may purchase
securities on a "when-issued" or "delayed delivery" basis. Although the payment
and interest terms of these securities are established at the time a Fund enters
into the commitment, the securities may be delivered and paid for a month or
more after the date of purchase, when their value may have changed. A Fund makes
such commitments only with the intention of actually acquiring the securities,
but may sell the securities before settlement date if the investment adviser
deems it advisable for investment reasons.
At the time a Fund enters into a binding obligation to purchase
securities on a when-issued basis, liquid assets of the Fund having a value at
least as great as the purchase price of the securities to be purchased will be
segregated on the books of the Fund and held by the custodian throughout the
period of the obligation. The use of these investment strategies, as well as any
borrowing by a Fund, may increase net asset value fluctuation.
Securities purchased on a when-issued or delayed delivery basis are
recorded as assets on the day following the purchase and are marked-to-market
daily. A Fund will not invest more than 25% of its assets in when-issued or
delayed delivery securities, does not intend to purchase such securities for
speculative purposes and will make commitments to purchase securities on a
when-issued or delayed delivery basis with the intention of actually acquiring
the securities. However, the Funds reserve the right to sell acquired
when-issued or delayed delivery securities before their settlement dates if
deemed advisable.
Policies Applicable to the International Fund and the Overseas Fund:
Investment in Other Investment Companies. Certain markets are closed in
whole or in part to equity investments by foreigners. The International Fund and
the Overseas Fund may be able to invest in such markets solely or primarily
through governmentally-authorized investment companies. Each Fund generally may
invest up to 10% of its assets in shares of other investment companies and up to
5% of its assets in any one investment company (in each case measured at the
time of investment), as long as no investment represents more than 3% of the
outstanding voting stock of the acquired investment company at the time of
investment. These restrictions do not apply to certain investment companies
known as private investment companies and "qualified purchaser" investment
companies.
Investment in another investment company may involve the payment of a
premium above the value of the issuer's portfolio securities, and is subject to
market availability. In the case of a purchase of shares of such a company in a
public offering, the purchase price may include an underwriting spread. The
Funds do not intend to invest in such an investment company unless, in the
judgment of the Funds' investment adviser, the potential benefits of such
investment justify the payment of any applicable premium or sales charge. As a
shareholder in an investment company, the Funds would bear its ratable share of
that investment company's expenses, including its advisory and administration
fees. At the same time, the Funds would continue to pay their own management
fees and other expenses.
Policies Applicable to the Overseas Fund and the Gold Fund:
Structured Securities. The Overseas Fund may invest in structured notes
and/or preferred stock, the value of which is linked to currencies, interest
rates, other commodities, indices or other financial indicators, and the Gold
Fund may invest in structured notes and/or preferred stock, the value of which
is linked to the price of gold or other precious metals. Structured securities
differ from other types of securities in which the Funds may invest in several
respects. For example, the coupon dividend and/or redemption amount at maturity
may be increased or decreased depending on changes in the value of the
underlying instrument.
Investment in structured securities involves certain risks. In addition
to the credit risk of the security's issuer and the normal risks of price
changes in response to changes in interest rates, the redemption amount may
decrease as a result of changes in the price of the underlying instrument.
Further, in the case of certain structured securities, the coupon and/or
dividend may be reduced to zero, and any further declines in the value of the
underlying instrument may then reduce the redemption amount payable on maturity.
Finally, structured securities may be more volatile than the price of the
underlying instrument.
Change of Objective.
The investment objectives of the Overseas Fund, the Gold Fund and the
Money Fund are not fundamental policies of the Funds and, accordingly, may be
changed by the Board of Directors without shareholder approval. Shareholders
will be notified a minimum of sixty days in advance of any change in investment
objective.
The investment objective of the International Fund, on the other hand,
is a fundamental policy of the Fund and may not be changed without shareholder
approval.
Investment Restrictions.
In pursuing its investment objective, each Fund will not:
1. With respect to 75% of the value of a Fund's total assets, invest more than
5% of its total assets (valued at time of investment) in securities of any
one issuer, except securities issued or guaranteed by the government of the
United States, or any of its agencies or instrumentalities, or acquire
securities of any one issuer which, at the time of investment, represent
more than 10% of the voting securities of the issuer;
2. Borrow money except unsecured borrowings from banks as a temporary measure
in exceptional circumstances, and such borrowings may not exceed 10% of a
Fund's net assets at the time of the borrowing. A Fund will not purchase
securities while borrowings exceed 5% of its total assets;
3. (Overseas Fund, Gold Fund and Money Fund) -- Invest more than 25% of its
assets (valued at time of investment) in securities of companies in any one
industry other than U.S. Government Securities (except that the Gold Fund
will, as a matter of fundamental policy, concentrate its investments in the
precious metals industry and the Money Fund may concentrate its investments
in U.S. bank obligations);
4. (International Fund) -- Purchase the securities of any issuer if such
purchase would cause more than 25% of the value of its total assets to be
invested in securities of any one issuer or industry, with the exception of
the securities of the United States government and its corporate
instrumentalities and, under the circumstances described below,
certificates of deposit and other short-term bank instruments. In fact, the
Fund intends to diversify its investments among various issuers and
industries and will not purchase certificates of deposit or other
short-term bank instruments except to the extent deemed appropriate for the
short-term investment of cash or a temporary defensive measure. The Fund
will limit its purchases of certificates of deposit and other short-term
bank instruments to those issued by United States banks and savings and
loan associations, including foreign branches of such banks, and United
States branches or agencies of foreign banks, which have total assets (as
of the date of their most recently published financial statements) of at
least $1 billion.
5. (International Fund) -- Purchase or sell its portfolio securities from or
to any of its officers, directors or employees, its investment adviser or
its principal underwriter, except to the extent that such purchase or sale
may be permitted by an order, rule or regulation of the Securities and
Exchange Commission.
6. Make loans, but this restriction shall not prevent a Fund from (a) buying a
part of an issue of bonds, debentures, or other obligations that are
publicly distributed, or from investing up to an aggregate of 15% of its
total assets (taken at market value at the time of each purchase) in parts
of issues of bonds, debentures or other obligations of a type privately
placed with financial institutions or (b) lending portfolio securities,
provided that a Fund may not lend securities if, as a result, the aggregate
value of all securities loaned would exceed 33% of its total assets (taken
at market value at the time of such loan);*
7. (Overseas Fund, Gold Fund and Money Fund) -- Underwrite the distribution of
securities of other issuers; however, a Fund may acquire "restricted"
securities which, in the event of a resale, might be required to be
registered under the 1933 Act on the grounds that the Fund could be
regarded as an underwriter as defined by the 1933 Act with respect to such
resale;
8. (International Fund) -- Engage in the underwriting of securities of other
issuers, except to the extent it may be deemed to be an underwriter in
selling portfolio securities as part of an offering registered under the
1933 Act.
9. (Overseas Fund, Gold Fund and Money Fund) -- Purchase and sell real estate
or interests in real estate, although it may invest in marketable
securities of enterprises that invest in real estate or interests in real
estate;
10. (International Fund) -- Purchase or sell real estate or interests therein,
commodities or commodity contracts. The Fund may, however, invest in real
estate investment trusts and companies holding real estate and may sell
commodities received by it as distributions on portfolio investments. (To
the extent the Fund's portfolio includes a commodity distributed to it, the
Fund will be subject to the risk of change in the value of such commodity.)
11. (Overseas Fund, Gold Fund and Money Fund) -- Make margin purchases of
securities, except for the use of such short term credits as are needed for
clearance of transactions; and
12. Sell securities short or maintain a short position, except, in the case of
the Overseas Fund, the Gold Fund and the Money Fund, short sales
against-the-box.
* The Funds have no present intention of lending their portfolio securities.
Restrictions 1 through 12 above (except the portions in parentheses)
are "fundamental," which means that they cannot be changed without the vote of a
majority of the outstanding voting securities of a Fund (defined by the
Investment Company Act of 1940, as amended ("1940 Act"), as the lesser of (i)
67% of a Fund's shares present at a meeting if more than 50% of the shares
outstanding are present or (ii) more than 50% of a Fund's outstanding shares).
In addition, each Fund is subject to a number of restrictions that may be
changed by the Board of Directors without shareholder approval. Under those
non-fundamental restrictions, a Fund will not:
a. Invest in companies for the purpose of management or the exercise
of control;
b. (International Fund) -- Purchase Securities on margin;
c. (Overseas Fund, Gold Fund and Money Fund) -- Invest in oil, gas or
other mineral leases or exploration or development programs,
although it may invest in marketable securities of enterprises
engaged in oil, gas or mineral exploration;
d. (International Fund) -- Purchase interests in oil, gas or other
mineral exploration programs or leases; however, this policy will
not prohibit the acquisition of securities of companies engaged in
the production or transmission of oil, gas or other minerals.
e. (Overseas Fund, Gold Fund and Money Fund) -- Invest more than 10%
of its net assets (valued at time of investment) in warrants,
valued at the lower of cost or market; provided that warrants
acquired in units or attached to securities shall be deemed to be
without value for purposes of this restriction;
f. (International Fund) -- Purchase warrants which are not offered in
units or attached to other portfolio securities if, immediately
after such purchase, more than 5% of the Fund's net assets would
be invested in such unattached warrants, valued at the lower of
cost or market. The Fund will not purchase unattached warrants not
listed on the New York or American Stock Exchange if, immediately
after such purchase, more than 2% of the Fund's net assets would
be invested in such unattached, unlisted warrants.
g. (Overseas Fund, Gold Fund and Money Fund) -- Pledge, mortgage or
hypothecate its assets, except as may be necessary in connection
with permitted borrowings or in connection with short sales;
h. (Overseas Fund, Gold Fund and Money Fund) -- Purchase or sell
commodities or commodity contracts, except that it may enter into
forward contracts and may sell commodities received by it as
distributions on portfolio investments; and
i. Purchase or sell put and call options on securities or on futures
contracts.
j (International Fund) -- Purchase illiquid securities or securities
the proceeds from the sale of which could not readily be
repatriated to the United States if, immediately after such
purchase, more than 10% of the value of its net assets would be
invested in such securities.
In addition, under normal circumstances the International Fund will
invest in at least three foreign countries.
Among the types of fixed income securities in which the International
Fund may invest from time to time are United States government obligations.
United States government obligations include Treasury Notes, Bonds and Bills
which are direct obligations of the United States government backed by the full
faith and credit of the United States, and securities issued by agencies and
instrumentalities of the United States government, which may be (i) guaranteed
by the United States Treasury, such as the securities of the Government National
Mortgage Association, or (ii) supported by the issuer's right to borrower from
the Treasury and backed by the credit of the federal agency or instrumentality
itself, such as securities of the Federal Intermediate Land Banks, Federal Land
Banks, Bank of Cooperatives, Federal Home Loan Banks, Tennessee Valley Authority
and Farmers Home Administration.
The Money Fund will only purchase securities that present minimal
credit risks and which are First Tier or Second Tier Securities (otherwise
referred to as "Eligible Securities"). An Eligible Security is:
(1) a security with a remaining maturity of 397 days or less: (a) that
is rated by the requisite nationally recognized statistical rating organizations
designated by the Securities and Exchange Commission (currently Moody's, S&P,
Duff and Phelps, Inc., Fitch Investors Services, Inc., Thompson Bankwatch, and,
with respect to debt issued by banks, bank holding companies, United Kingdom
building societies, broker/dealers and broker/ dealers' parent companies, and
bank-supported debt, IBCA Limited and its affiliate, IBCA, Inc. collectively,
the "NRSROs") in one of the two highest rating categories for short-term debt
obligations (the requisite NRSROs being any two or, if only rated by one, that
one NRSRO), or (b) that itself was unrated by any NRSRO, but was issued by an
issuer that has outstanding a class of short-term debt obligations (or any
security within that class) meeting the requirements of subparagraph 1(a) above
that is of comparable priority and security;
(2) a security that at the time of issuance was a long-term security
but has a remaining maturity of 397 days or less and: (a) whose issuer received
a rating in one of the two highest rating categories for short-term debt
obligations from the requisite NRSROs (the requisite NRSROs being any two or, if
only rated by one, that one NRSRO) with respect to a class of short-term debt
obligations (or any security within that class) that is currently comparable in
priority and security with the subject security or (b) which has long-term
ratings from the requisite NRSROs (the requisite NRSROs being any two or, if
only rated by one, that one NRSRO) which are in one of the two highest
categories; or
(3) a security not rated by an NRSRO but deemed by the investment
adviser pursuant to guidelines adopted by the Board of Directors, to be of
comparable quality to securities described in (1) and (2) and to present minimal
credit risks.
A First Tier Security is any Eligible Security which qualifies as such
because it carries (or other relevant securities issued by its issuer carry) top
NRSRO ratings (a single top rating is sufficient if only one NRSRO rates the
security) or has been determined, pursuant to guidelines adopted by the Board of
Directors, to be of comparable quality to such a security. A Second Tier
Security is any other Eligible Security.
The Money Fund will limit its investments in the First Tier Securities
of any one issuer to no more than five percent of its assets. (Repurchase
agreements collateralized by non-Government securities will be taken into
account when making this calculation.) Moreover, the Money Fund's total holdings
of Second Tier Securities will not exceed 5% of its assets, with investment in
the Second Tier Securities of any one issuer being limited to the greater of 1%
of the Fund's assets or $1 million. In addition, the underlying securities
involved in repurchase agreements collateralized by non-Government securities
will be First Tier Securities at the time the repurchase agreements are
executed.
Notwithstanding the foregoing investment restrictions, the Overseas
Fund and the Gold Fund may purchase securities pursuant to the exercise of
subscription rights, provided that such purchase will not result a Fund's
ceasing to be a diversified investment company. Japanese and European
corporations frequently issue additional capital stock by means of subscription
rights offerings to existing shareholders at a price substantially below the
market price of the shares. The failure to exercise such rights would result in
a Fund's interest in the issuing company being diluted. The market for such
rights is not well developed in all cases and, accordingly, a Fund may not
always realize full value on the sale of rights. The exception applies in cases
where the limits set forth in the investment restrictions would otherwise be
exceeded by exercising rights or would have already been exceeded as a result of
fluctuations in the market value of a Fund's portfolio securities with the
result that a Fund would be forced either to sell securities at a time when it
might not otherwise have done so, or to forego exercising the rights.
Total Return. From time to time the International Fund, the Overseas
Fund and the Gold Fund advertise their average annual total return. During the
one year period ended March 31, 1999, average annual rates of return were [ ]%,
[ ]% and [ ]%, for the International Fund (formerly SoGen International Fund,
Inc.) Class A shares, the Overseas Fund Class A shares and the Gold Fund,
respectively. Quotations of average annual returns for each Fund will be
expressed in terms of the average annual compounded rates of return of a
hypothetical investment in each Fund over periods of 1, 5 and 10 years (up to
the life of the Fund), calculated pursuant to the following formula: P(1+T)n =
ERV (where P = a hypothetical initial payment of $1000, T = the average annual
return, n = the number of years, and ERV = the ending redeemable value of a
hypothetical $1000 payment made at the beginning of the period). This
calculation assumes deduction of a proportional share of Fund expenses on an
annual basis and deduction of the maximum sales charge of 3.75% on the amount
initially invested, and assumes reinvestment of all income dividends and capital
gains distributions during the period.
Under the same assumptions utilized in the preceding calculation, an
investment in the International Fund (formerly SoGen International Fund, Inc.)
Class A shares over the ten year period from March 31, 1990 to March 31, 1999
would have increased at an average annual compounded rate of return of [ ]%, an
investment in the International Fund (formerly SoGen International Fund, Inc.)
Class A shares over the five year period from March 31, 1994 to March 31, 1999
would have increased at an average annual compounded rate of return of [ ]%, and
an investment in the International Fund (formerly SoGen International Fund,
Inc.) Class A shares over the one year period from March 31, 1998 to March 31,
1999 would have increased at an average annual compounded rate of [ ]%.
Current Yield and Effective Yield. From time to time the Money Fund may
advertise its current yield and effective yield. Current yield will be based on
income per share received by a hypothetical investment over a given 7-day period
(less expenses accrued during the period) and then "annualized" (i.e., assuming
that the 7-day yield would be received over 52 weeks, stated in terms of an
annual percentage return on the investment). Effective yield is calculated in a
manner similar to that used to calculate current yield, but when annualized, the
income earned by an investment in the Money Fund is assumed to be reinvested.
The effective yield will be slightly higher than the current yield because of
this assumed reinvestment. The Money Fund's current and effective 7-day yields
for the seven days ended March 31, 1999 were [ ]% and [ ]%, respectively.
Current yield and effective yield for the Money Fund will vary based on changes
in market conditions, the level of interest rates and the level of the Fund's
expenses and no reported yield figures should be considered an indication of the
performance that may be expected in the future.
Comparison of Portfolio Performance. From time to time the Company may
discuss in sales literature and advertisements, specific performance grades or
rankings or other information as published by recognized grades or rankings or
other information as published by recognized mutual fund statistical services,
such as Morningstar, Inc. or Lipper Analytical Services, Inc., or by
publications of general interest such as Barron's, Business Week, Financial
World, Forbes, Fortune, Kiplinger's Personal Finance, Money, Morningstar Mutual
Funds, Smart Money, The Wall Street Journal or Worth.
Portfolio Turnover. Although the International Fund, the Overseas Fund
and the Gold Fund will not make a practice of short-term trading, purchases and
sales of securities will be made whenever appropriate, in the investment
adviser's view, to achieve a Fund's investment objective. The rate of portfolio
turnover is calculated by dividing the lesser of the cost of purchases or the
proceeds from sales of portfolio securities (excluding short-term U.S.
government obligations and other short-term investments) for the particular
fiscal year by the monthly average of the value of the portfolio securities
(excluding short-term U.S. government obligations and short-term investments)
owned by a Fund during the particular fiscal year. The rate of portfolio
turnover is not a limiting factor when management deems portfolio changes
appropriate to achieve a Fund's stated objective. However, it is possible that,
under certain circumstances, a Fund may have to limit its short-term portfolio
turnover to permit it to qualify as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code").
MANAGEMENT OF THE COMPANY
The business of the Company is managed by its Board of Directors which
elects officers responsible for the day to day operations of the Funds and for
the execution of the policies formulated by the Board of Directors. Several of
the Directors and officers of the Company are Directors or officers of SGAM
Corp. or Societe Generale, Paris, France, the indirect owner of one hundred
percent (100%) of the outstanding voting securities of SGAM Corp. Jean-Marie
Eveillard, the President and a Director of the Company, owns 100% of SGAM
Corp.'s non-voting Series B common stock which represents 19.9% of the total
capital of SGAM Corp.
The following table sets forth the principal occupation or employment
of the members of the Board of Directors and principal officers of the Company.
Each of the following persons is also a Director and/or officer of SoGen
Variable Funds, Inc.
Position Held Principal Occupation During
Name, Address and Age With the Company the Past Five (5) Years)
- --------------------- ------- ------------------------
Philippe Collas, 49,* Chairman of the Head of Asset Management at
2 Place de la Coupole Board and Societe Generale since September
92078 Paris La Defense Director 1995. Head of Human Resource
Cedex France Management at Societe Generale
from prior to 1994.
Jean-Marie Eveillard, 59,*(1) President Director and President or
1221 Avenue of the Americas and Executive Vice President of SGAM
New York, NY 10020 Director corp. from prior to 1994.
Fred J. Meyer, 68,(2) Director Vice Chairman of Omnicom Group,
437 Madison Avenue Inc. from 1998. Chief Financial
New York, NY 10022 Officer of Omnicom Group Inc.
from prior to 1994 to 1998.
Director of Novartis
Corporation, and Zurich-American
Insurance Cos.
Dominique Raillard, 60,(2) Director President of Act 2 International
15, boulevard Delessert (consulting) since July 1995.
75016 Paris France Group Executive Vice President
of Promodes (consumer Products)
-- U.S. Companies Division from
prior to 1994 to 1995.
Nathan Snyder, 64,(1)(2) Director Independent Consultant from
163 Parish Rd. S. prior to 1994.
New Canaan, CT 06840
Philip J. Bafundo, 36, Vice President, Secretary and Treasurer, SGAM
1221 Avenue of the Americas Secretary and Corp. from prior to 1994.
New York, NY 10020 Treasurer Certified Public Accountant (New
York).
Edwin S. Olsen, 59,* Vice President Vice President, SG Cowen
1221 Avenue of the Americas Securities Corporation from
New York, NY 10020 prior to 1994.
Elizabeth Tobin, 45,* Vice President Senior Vice President, SGAM
1221 Avenue of the Americas Corp. since 1998, Associate
New York, NY 10020 Portfolio Manager from December
1996, Securities Analyst, SGAM
Corp. from prior to 1994 to
1996.
Charles de Vaulx, 37,* Vice President Senior Vice President, SGAM
1221 Avenue of the Americas Corp. since 1998, Associate
New York, NY 10020 Portfolio Manager from December
1996, Securities Analyst, SGAM
Corp. from prior to 1994 to
1996.
- ----------
* An "interested person" of the Company as defined in the 1940 Act.
(1) Member of the Executive Committee. When the Board of Directors is not in
session, the Executive Committee may generally exercise most of the powers
of the Board of Directors.
(2) Member of the Audit Committee.
The Company makes no payments to any of its officers for services.
However, currently each of the Company's Directors who are not officers or
employees of SGAM Corp., FDI or Societe Generale are paid by the Company an
annual fee of $[6,000] and a fee of $[1,000] for each meeting of the Company's
Board of Directors and for each meeting of any Committee of the Board that they
attend (other than those held by telephone conference call). Each Director is
reimbursed by the Company for any expenses he may incur by reason of attending
such meetings or in connection with services he may perform for the Company.
During the fiscal year ended March 31, 1999, an aggregate of $[ ] was paid or
accrued for Directors' fees and expenses by the Company. See Note 2 of Notes to
the Financial Statements on page 22 of the Company's Annual Report to
Shareholders for a description of various transactions during the Company's most
recent fiscal year between the Company and its Directors and affiliates of its
Directors.
Compensation of Directors and Certain Officers. The following table
sets forth information regarding compensation of Directors by the Company and by
the fund complex of which the Company is a part for the fiscal year ended March
31, 1999. Officers of the Company and Directors who are interested persons of
the Company do not receive any compensation from the Company of any other fund
in the fund complex which is a U.S. registered investment company. In the column
headed "Total Compensation From Registrant and Fund Complex Paid to Directors,"
the number in parentheses indicates the total number of boards in the fund
complex on which the Director served as of March 31, 1999.
Compensation Table
Fiscal Year Ended March 31, 1999
<TABLE>
<S> <C> <C> <C> <C>
Pension or Total
Retirement Compensation
Benefits Estimated From Registrant
Aggregate Accrued as Annual and Fund Complex
Compensation Part of Fund Benefits Paid to Directors
from Registrant Expenses Upon
Name of Person, Position Retirement
- ------------------------ ----------
Philippe Collas**, Director and Chairman $ -- N/A N/A $ --
Jean-Marie Eveillard**, Director and President $ -- N/A N/A $ --
Fred J. Meyer*, Director $ N/A N/A $ (2)
Dominique Raillard*, Director $ N/A N/A $ (2)
Nathan Snyder*, Director $ N/A N/A $ (2)
</TABLE>
- ----------
* Member of the Audit Committee.
** "Interested person" of the Company as defined in the 1940 Act because of
the affiliation with SGAM Corp., the Fund's investment adviser.
[The Directors and officers of the Company, as a group, owned less than
1% of the outstanding shares of capital stock of the Company at June 30, 1999.
The Company knows of no person who owns beneficially more than 5% of the capital
stock of the Company.]
While the Company is a Maryland corporation, certain of its Directors
and officers are non-residents of the United States and may have all, or a
substantial part, of their assets located outside the United States. None of the
officers or Directors has authorized an agent for service of process in the
United States. As a result, it may be difficult for U.S. investors to effect
service of process upon non-U.S. Directors or officers within the United States
or effectively to enforce judgments of courts of the United States predicated
upon civil liabilities of such officers or Directors under the federal
securities laws of the United States.
INVESTMENT ADVISER AND OTHER SERVICES
As described in the Company's Prospectus, SGAM Corp. is the Company's
investment adviser and, as such, manages the International Fund, the Overseas
Fund, the Gold Fund and the Money Fund. SGAM Corp. was incorporated in Delaware
in February 1990, and is indirectly owned by Societe Generale, one of France's
largest banks.
The persons named below are affiliated with the Company and are also
affiliated persons of SGAM Corp. or Societe Generale. The capacity in which such
persons are affiliated with the Company and SGAM Corp. or Societe Generale is
also indicated.
<TABLE>
<S> <C> <C>
Office Held with Office Held with SGAM Corp.,
Name the Company or Societe Generale
Philippe Collas Chairman of the Board and Director Head of Asset Management, Societe Generale.
Chairman of the Board and Director, SGAM
Corp.
Jean-Marie Eveillard President and Director President and Director, SGAM Corp.
Philip J. Bafundo Vice President, Secretary and Secretary and Treasurer, SGAM Corp.
Treasurer
Charles de Vaulx Vice President Senior Vice President and Associate Portfolio
Manager, SGAM Corp.
Edwin S. Olsen Vice President Vice President, SG Cowen Securities Corporation
Elizabeth Tobin Vice President Senior Vice President and Associate Portfolio
Manager, SGAM Corp.
</TABLE>
Under its investment advisory contracts with the Company, which became
effective August 17, 1993 (in the case of SoGen Overseas Fund, SoGen Gold Fund
and SoGen Money Fund) and July 31, 1998 (in the case of SoGen International
Fund), SGAM Corp. furnishes the Company with investment advice consistent with
each Fund's stated investment objective. SGAM Corp. also furnishes the Company
with office space and certain facilities required for the business of the Funds,
and statistical and research data, and pays any compensation and expenses of the
Company's officers. Until July 31, 1998, SGAM Corp. provided substantially
similar services for SoGen International Fund, Inc. pursuant to an investment
advisory contract which became effective April 26, 1990 and was amended on July
10, 1992. Pursuant to an Agreement and Plan of Merger dated April 27, 1998,
SoGen International Fund, Inc. became a portfolio of the Company. The Company
adopted a new investment advisory contract, on behalf of SoGen International
Fund, with SGAM Corp. on substantially the same terms as the previous investment
advisory contract in effect for SoGen International Fund, Inc.
In return for the services listed above, each Fund pays SGAM Corp. a
fee at the annual rate of the average daily value of the Fund's net assets as
follows:
International Fund.............. 1.00% of the first $25 million and
0.75% of the excess over $25 million
Overseas Fund................... 0.75%
Gold Fund....................... 0.75%
Money Fund...................... 0.40%
Advisory fees are paid monthly, except that advisory fees for the
International Fund are paid quarterly. The annual fee rates listed above for the
International Fund, the Overseas Fund and the Gold Fund, respectively, are
higher than the rate of fees paid by most U.S. mutual funds that invest
primarily in domestic equity securities. The Company believes, however, that the
advisory fee rates are not higher than the rate of fees paid by most other
mutual funds that invest significantly in foreign equity securities.
The Overseas Fund and the Gold Fund paid investment advisory fees for
the fiscal year ended March 31, 1997 in the amount of $5,899,446 and $449,545,
respectively, for the fiscal year ended March 31, 1998, the investment advisory
fees were $7,798,589 and $283,300, respectively, and for the fiscal year ended
March 31, 1999, the investment advisory fees were $[ ] and $[ ], respectively.
For the fiscal year ended March 31, 1998, $37,399 of the investment advisory fee
of $60,497 for the Money Fund was waived by SGAM Corp.
The International Fund paid advisory fees for the fiscal year ended
March 31, 1999 in the amount of $[ ]. SoGen International Fund, Inc. paid
investment advisory fees under its investment advisory contract for the fiscal
years ended March 31, 1997, 1998 and 1999 in the amount of $26,404,805,
$30,954,079, and $[ ], respectively.
Under the investment advisory contracts between the Company and SGAM
Corp., the investment adviser is responsible for the management of each of the
Funds' portfolios and constantly reviews their holdings in the light of its own
research analyses and those of other relevant sources. Reports of portfolio
transactions are given regularly to the Directors of the Company, who review
each Fund's portfolio at meetings held four times a year.
Under the terms of the investment advisory contracts, a Fund will
discontinue the use of the term "SoGen" in a Fund's name or the use of any marks
or symbols owned by the investment adviser if the investment adviser ceases to
act as a Fund's investment adviser or if the investment adviser so requests.
[As of the date of this Statement of Additional Information, SGAM
Corp. owned of record and beneficially, approximately [ ] shares of the Overseas
Fund, [ ] shares of the Gold Fund and [ ] shares of the Money Fund. SGAM Corp.
did not own any shares of the International Fund.]
A Fund may, with the approval of the Company's Board of Directors, from
time to time enter into arrangements with institutions to provide sub-transfer
agent services and other related services where a number of persons hold Fund
shares through one account registered with the Fund's transfer agent, DST
Systems, Inc. ("DST") in the name of that institution. Under those arrangements,
a Fund may compensate the institution rendering such services on a per
sub-account basis.
DISTRIBUTION OF THE FUNDS' SHARES
The Company and FDI have entered into an underwriting contract pursuant
to which FDI offers, as agent, shares of each Fund to investors, either directly
or through selected securities dealers, in states and countries in which a
Fund's shares are qualified and in which FDI is qualified as a dealer or where
such qualification is not required.
Pursuant to the Distribution Plan and Agreement (the "Plan") between
the Company and FDI, adopted by the International Fund (on behalf of its Class A
shares), the Overseas Fund (on behalf of its Class A shares) and the Gold Fund
in accordance with the provisions of Rule 12b-1 under the Investment Company Act
of 1940, each participating class of shares of a Fund may pay FDI a quarterly
distribution fee of up to, on an annual basis, 0.25% of the average daily net
asset value attributable to that class of shares. Under the Plan, FDI must apply
the full amount of fees received from a Fund to the payment of fees to dealers
for their assistance in the sale of the shares of the participating class of the
Fund and for the provision to shareholder services and for other distribution
related expenses such as the payment of advertising costs and the payment for
the preparation, printing and distribution of prospectuses to investors. For the
fiscal year ended March 31, 1999, the Company paid SG Cowen Securities
Corporation ("SG Cowen"), its previous principal underwriter, $[ ] pursuant to
the predecessor Plan, $[ ] of which was paid by SG Cowen to Societe Generale and
subsidiaries of Societe Generale. FDI and SGAM Corp. bear the Company's
distribution costs to the extent they exceed payments under the Plan. The Class
I shares of the International Fund, the Class I shares of the Overseas Fund and
the Money Fund do not participate in the Plan.
Substantially all of the amounts paid to FDI under the Plan (and the
Distribution Plan) are paid to dealers selling shares of the Funds, including
Societe Generale and certain of its subsidiaries, for their assistance in
selling shares of the Funds. A dealer selling shares normally receives a fee,
calculated on a quarterly basis, equal to 0.25% of the average daily net asset
value attributable to the participating classes of shares of a Fund held by the
dealer's customers. SG Cowen has retained $[ ] of the amount paid to it pursuant
to the predecessor Plan with respect to the fiscal year ended March 31, 1999, as
reimbursement for expenses incurred in promoting the sale of the Company's
shares, including printing and distribution of prospectuses and sales literature
for advertising. SG Cowen has also retained $[ ] of the amount paid to it
pursuant to the predecessor Plan with respect to the fiscal year ended March 31,
1999, as reimbursement for expenses incurred in promoting the sale of SoGen
International Fund, Inc.'s shares, including printing and distribution of
prospectuses and sales literature for advertising. Distribution expenses
incurred in any fiscal year which are not reimbursed from payments under the
Plan accrued in such fiscal year will not be carried over for payment under the
Plan in any subsequent year.
The Plan provides that it will continue in effect only so long as its
continuance is approved at least annually by the directors of the Company and by
the directors who are not interested persons of the Company and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreements relating to the Plan (the "Independent Directors"). In the case of an
agreement relating to the Plan, the Plan provides that such agreement may be
terminated, without penalty, by a vote of a majority of the Independent
Directors, or, as to a Fund, by a majority of the Fund's outstanding voting
securities on 60 days' written notice to FDI, and provides further that such
agreement will automatically terminate in the event of its assignment. The Plan
also states that it may not be amended to increase the maximum amount of the
payments thereunder without the approval of a majority of the outstanding voting
securities (as defined on page [ ]) of a Fund. No material amendment to the Plan
will, in any event, be effective unless it is approved by a vote of the
Directors and the Independent Directors of the Company.
When the Company seeks an Independent Director to fill a vacancy on the
Board or as an addition to the Board or as a nominee for election by
stockholders, the selection or nomination of the Independent Director is, under
resolutions adopted by the Directors contemporaneously with their adoption of
the Plan, committed to the discretion of the Independent Directors.
With respect to fiscal year ended March 31, 1999, SG Cowen, Societe
Generale (including subsidiaries) and SGAM Corp. received commissions and other
compensation in connection with operation of the Company and as follows:
SoGen Funds, Inc.
(1) (2) (3) (4) (5)
Net
Underwriting
Name of Discounts Commissions
Principal and on
Underwriter or Dealer Repurchases Brokerage Other
Affiliate Commissions or Redemptions Commissions Compensation
- ------------ ----------- ----------- ----------- ------------
SG Cowen $ $0 $ $
Societe Generale
(including subsidiaries) $ $0 $ $
SGAM Corp. $0 $0 $ $
- ----------
During the three years ended March 31, 1997, 1998 and 1999, the
aggregate amount of sales charges on sales of the Company's shares was
$2,098,953, $1,523,084, and $[ ], respectively. [During the years ended March
31, 1995 and 1996, SG Cowen received net underwriting discounts and dealer
commissions of $747,619, and $477,279, respectively. Societe Generale received
dealer discounts of $8,988 for the fiscal year ended March 31, 1996.]
During the two years ended March 31, 1997 and 1998, the aggregate
amount of sales charges on sales of SoGen International Fund, Inc.'s shares was
$14,480,187 and $7,485,957, respectively. [During the years ended March 31, 1995
and 1996, SG Cowen received net underwriting discounts and dealer commissions of
$941,813 and $3,005,037, respectively, and Societe Generale received dealer
discounts of $44,234 and $36,119, respectively.]
The investment advisory and underwriting contracts continue in effect
from year to year so long as the continuance of each contract is specifically
approved at least annually by the Board of Directors or by a vote of a majority
of the outstanding voting securities of each Fund (as defined on page [ ]). In
addition, the terms of each contract and the renewals thereof must be approved
annually by the vote of a majority of the directors who are not "interested
persons" (as defined in the 1940 Act) of SGAM Corp., FDI or the Company. Each
contract will terminate automatically in the event of its assignment (as defined
in the 1940 Act) and may be terminated, without penalty, on sixty days' written
notice at the option of either party thereto or by a vote of a majority of the
outstanding voting securities of a Fund.
COMPUTATION OF NET ASSET VALUE
Each Fund computes its net asset value once daily as of the close of
trading on each day the New York Stock Exchange is open for trading. The
Exchange is closed on the following days: New Year's Day, Rev. Dr. Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. The net asset value per share is
computed by dividing the total current value of the assets of a Fund, less its
liabilities, by the total number of shares outstanding at the time of such
computation.
The Money Fund values its portfolio instruments at amortized cost,
which means that they are valued at their acquisition cost, as adjusted for
amortization of premium or discount, rather than at current market value.
Calculations are made to compare the value of the Fund's investments valued at
amortized cost with market values. Market valuations are obtained by using
actual quotations provided by market makers, estimates of market value, or
values obtained from yield data relating to classes of money market instruments
published by reputable sources at the mean between the bid and asked prices for
the instruments. The amortized cost method of valuation seeks to maintain a
stable $1.00 per share net asset value even where there are fluctuations in
interest rates that affect the value of portfolio instruments. Accordingly, this
method of valuation can in certain circumstances lead to a dilution of a
shareholder's interest. If a deviation of 1/2 of 1% or more were to occur
between the net asset value per share calculated by reference to market values
and the Money Fund's $1.00 per share net asset value or if there were any other
deviation which the Board of Directors believed would result in a material
dilution to shareholders or purchasers, the Board of Directors would promptly
consider what action, if any, should be initiated. If the Money Fund's net asset
value per share (computed using market values) declined, or were expected to
decline, below $1.00, the Board of Directors might temporarily reduce or suspend
dividend payments in an effort to maintain the net asset value at $1.00 per
share. As a result of such reduction or suspension of dividends or other action
by the Board of Directors, an investor would receive less income during a given
period than if such a reduction or suspension had not taken place. Such action
could result in investors receiving no dividend for the period during which they
hold their shares and receiving, upon redemption, a price per share lower than
that which they paid. On the other hand, if the Money Fund's net asset value per
share (computed using market values) were to increase, or were anticipated to
increase above $1.00, the Board of Directors might supplement dividends in an
effort to maintain the net asset value at $1.00 per share.
A portfolio security, other than a bond, which is traded on a U.S.
national securities exchange or a securities exchange abroad is normally valued
at the price of the last sale on the exchange as of the close of business on the
date on which assets are valued. If there are no sales on such date, such
portfolio securities will be valued at the mean between the closing bid and
asked prices. Securities, other than bonds, traded in the over-the-counter
market are valued at the mean between the last bid and asked prices prior to the
time of valuation, except if such unlisted security is among the NASDAQ
designated "Tier 1" securities in which case it is valued at its last sale
price. All bonds, whether listed on an exchange or traded in the
over-the-counter market, for which market quotations are readily available are
valued at the mean between the last bid and asked prices received from dealers
in the over-the-counter market in the United States or abroad, except that when
no asked price is available, bonds are valued at the last bid price alone.
Short-term investments maturing in sixty days or less are valued at cost plus
interest earned, which approximates value. Securities for which current market
quotations are not readily available are valued at fair value as determined in
good faith by the Company's Board of Directors. A make-up sheet showing the
computation of the total offering price, using as a basis the value of the
Company's portfolio securities and other assets and its outstanding securities
as of March 31, 1999, appears as the Statement of Assets and Liabilities for the
Company.
HOW TO PURCHASE SHARES
The methods of buying and selling shares and the sales charges
applicable to purchases of shares of a Fund are described in the Company's
Prospectus.
As stated in the Prospectus, shares of the International Fund, the
Overseas Fund and the Gold Fund may be purchased at net asset value by various
persons associated with the Company, FDI, SGAM Corp., branches of Societe
Generale, certain firms providing services to the Company or affiliates thereof
for the purpose of promoting good will with employees and others with whom the
Company has business relationships, as well as in other special circumstances.
Shares are offered to other persons at net asset value in circumstances where
there are economies of selling efforts and sales related expenses with respect
to offers to certain investors.
TAX STATUS
Each Fund intends to qualify annually as a "regulated investment
company" under the Code. In order to qualify as a regulated investment company
for a taxable year, a Fund must, among other things, (a) derive 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 and other income derived with respect to the business of investing in
such stock, securities or currencies; (b) diversify its holdings so that, at the
end of each fiscal quarter, (i) at least 50% of the market value of its assets
is represented by cash, cash items, U.S. government securities, securities of
other regulated investment companies and other securities, with such other
securities of any one issuer qualifying only if the Fund's investment is limited
to an amount not greater than 5% of the Fund's assets or 10% of the voting
securities of the issuer, and (ii) not more than 25% of the value of its assets
is invested in the securities of any one issuer (other than U.S. government
securities or securities of other regulated investment companies); and (c)
distribute at least 90% of its investment company taxable income (which
includes, among other items, dividends, interest and net short-term capital
gains in excess of net long-term capital losses) for the year.
As a regulated investment company, each Fund generally will not be
subject to U.S. federal income tax on its investment company taxable income and
net capital gains (the excess of net long-term capital gains over net short-term
capital losses), if any, that it distributes to shareholders. Each Fund intends
to distribute to its shareholders, at least annually, substantially all of its
investment company taxable income and net capital gains. Amounts not distributed
on a timely basis in accordance with a calendar year distribution requirement
are subject to a non-deductible 4% excise tax. To prevent imposition of the
excise tax, each Fund must distribute during each calendar year an amount equal
to the sum of (1) at least 98% of its ordinary income (not taking into account
any capital gains or losses) for the calendar year, (2) at least 98% of its
capital gains in excess of its capital losses (adjusted for certain ordinary
losses) for the one-year period ending on October 31 of the calendar year, and
(3) any ordinary income and capital gains for previous years that were not
distributed during those years. A distribution will be treated as paid on
December 31 of the current calendar year if it is declared by a Fund in October,
November or December with a record date in such a month and paid by the Fund
during January of the following calendar year. Such distributions will be
taxable to shareholders in the calendar year in which the distributions are
declared, rather than the calendar year in which the distributions are received.
To prevent application of the excise tax, each Fund intends to make its
distributions in accordance with the calendar year distribution requirement.
Different tax treatment, including a penalty on pre-retirement
distributions, is accorded accounts maintained as IRAs. Shareholders should
consult their tax advisors for more information.
Dividends paid out of a Fund's investment company taxable income will
be taxable to a U.S. shareholder as ordinary income. To the extent that a
portion of a Fund's income consists of dividends paid by U.S. corporations, a
portion of the dividends paid by the Fund may be eligible for the corporate
dividends-received deduction. It is expected that a small portion of the
dividends paid by the International Fund, the Overseas Fund and the Gold Fund
will so qualify. Distributions of net capital gains, if any, designated as
capital gains distributions are taxable to individual shareholders at a maximum
20% capital gains rate, regardless of how long the shareholder has held the
Fund's shares, and are not eligible for the dividends-received deduction.
Shareholders receiving distributions in the form of additional shares, rather
than cash, generally will have a cost basis in each such share equal to the net
asset value of a share of the Fund on the reinvestment date. Shareholders will
be notified annually as to the U.S. federal tax status of distributions, and
shareholders receiving distributions in the form of additional shares will
receive a report as to the net asset value of those shares.
Investments by a Fund in zero coupon securities will result in income
to the Fund equal to a portion of the excess of the face value of the securities
over their issue price (the "original issue discount") each year that the
securities are held, even though the Fund receives no interest payments. This
income is included in determining the amount of income which the Fund must
distribute to maintain its status as a regulated investment company and to avoid
the payment of federal income tax and the 4% excise tax. If a Fund invests in
certain high yield original issue discount obligations issued by U.S.
corporations, a portion of the original issue discount accruing on such an
obligation may be eligible for the corporate dividends-received deduction. In
such event, a portion of the dividends of investment company taxable income
received from the Fund by its corporate shareholders may be eligible for this
corporate dividends-received deduction if so designated by the Fund in a written
notice to shareholders. For the fiscal year ended March 31, 1998, the
percentages of net investment income that qualified for the dividends-received
deduction for the International Fund, the Overseas Fund, Gold Fund and Money
Fund were 6.79%, 0.34%, 28.96% and 0.00%, respectively.
Certain foreign currency contracts in which the International Fund, the
Overseas Fund and the Gold Fund may invest are "section 1256 contracts." Gains
or losses on section 1256 contracts generally are considered 60% long-term and
40% short-term capital gains or losses; however, foreign currency gains or
losses (as discussed below) arising from certain section 1256 contracts may be
treated as ordinary income or loss. Also, section 1256 contracts held by a Fund
at the end of each taxable year (and, generally, for purposes of the 4% excise
tax, on October 31 of each year) are "marked-to-market" (that is, treated as
sold at fair market value), resulting in unrealized gains or losses being
treated as though they were realized.
Generally, the hedging transactions undertaken by the International
Fund, the Overseas Fund and the Gold Fund may result in "straddles" for U.S.
federal income tax purposes. The straddle rules may affect the character of
gains (or losses) realized by these Funds. In addition, losses realized by these
Funds on positions that are part of a straddle may be deferred under the
straddle rules, rather than being taken into account in calculating the taxable
income for the taxable year in which the losses are realized. Because only a few
regulations implementing the straddle rules have been promulgated, the tax
consequences to these Funds of engaging in hedging transactions are not entirely
clear. Hedging transactions may increase the amount of short-term capital gains
realized by a Fund which is taxed as ordinary income when distributed to
shareholders.
The International Fund, the Overseas Fund and the Gold Fund may make
one or more of the elections available under the Code which are applicable to
straddles. If any of these Fund makes any of the elections, the amount,
character and timing of the recognition of gains or losses from the affected
straddle positions will be determined under rules that vary according to the
election(s) made. The rules applicable under certain of the elections may
operate to accelerate the recognition of gains or losses from the affected
straddle positions.
Because the straddle rules may affect the character of gains or losses,
defer losses and/or accelerate the recognition of gain or losses from the
affected straddle positions, the amount which may be distributed to
shareholders, and which will be taxed to them as ordinary income or long-term
capital gains, may be increased or decreased as compared to a fund that did not
engage in such hedging transactions.
Notwithstanding any of the foregoing, a Fund may recognize gain (but
not loss) from a constructive sale of certain "appreciated financial positions"
if the Fund enters into a short sale, offsetting notional principal contract or
forward contract transaction with respect to the appreciated position or
substantially identical property. Appreciated financial positions subject to
this constructive sale treatment are interests (including options and forward
contracts and short sales) in stock, partnership interests, certain actively
traded trust instruments and certain debt instruments. Constructive sale
treatment does not apply to certain transactions closed in the 90-day period
ending with the 30th day after the close of the taxable year, if certain
conditions are met.
If a Fund enters into a short sale of property that becomes
substantially worthless, the Fund will recognize gain at that time as though it
had closed the short sale. Future Treasury regulations may apply similar
treatment to other transactions with respect to property that becomes
substantially worthless.
Under the Code, gains or losses attributable to fluctuations in
exchange rates which occur between the time a Fund accrues receivables or
liabilities denominated in a foreign currency and the time the Fund actually
collects such receivables, or pays such liabilities, generally are treated as
ordinary income or ordinary loss. Similarly, on disposition of debt securities
denominated in a foreign currency and on disposition of certain foreign currency
contracts, gains or losses attributable to fluctuations in the value of foreign
currency between the date of acquisition of the security or contract and the
date of disposition also are treated as ordinary gain or loss. These gains or
losses, referred to under the Code as "section 988" gains or losses, may
increase or decrease the amount of a Fund's investment company taxable income to
be distributed to its shareholders as ordinary income.
Upon the sale or other disposition of shares of a Fund, a shareholder
may realize a capital gain or loss which may be eligible for reduced federal tax
rates, generally depending upon the shareholder's holding period for the shares.
Any loss realized on a sale or exchange will be disallowed to the extent the
shares disposed of are replaced (including shares acquired pursuant to a
dividend reinvestment plan) within a period of 61 days beginning 30 days before
and ending 30 days after disposition of the shares. In such a case, the basis of
the shares acquired will be adjusted to reflect the disallowed loss. Any loss
realized by a shareholder on a disposition of Fund shares held by the
shareholder for six months or less will be treated as a long-term capital loss
to the extent of any distributions of net capital gains received by the
shareholder with respect to such shares.
Under certain circumstances the sales charge incurred in acquiring
shares of a Fund may not be taken into account in determining the gain or loss
on the disposition of those shares. This rule applies if shares of a Fund are
exchanged within 90 days after the date they were purchased and the new shares
are acquired without a sales charge or at a reduced sales charge. In that case,
the gain or loss recognized on the exchange will be determined by excluding from
the tax basis of the shares exchanged, all or a portion of the amount of the
sales charge that was imposed on the acquisition of those shares. This exclusion
applies to the extent that the otherwise applicable sales charge with respect to
the newly acquired shares is reduced as a result of having incurred the initial
sales charge. The portion of the initial sales charge that is excluded from the
basis of the exchanged shares is instead treated as an amount paid for the new
shares.
The International Fund, the Overseas Fund and the Gold Fund may be
subject to foreign withholding taxes on income and gains derived from their
investments outside the United States. Such taxes would reduce the yield on the
Funds' investments. Tax treaties between certain countries and the United States
may reduce or eliminate such taxes. If more than 50% of the value of a Fund's
total assets at the close of any taxable year consists of stocks or securities
of foreign corporations, the Fund may elect, for U.S. federal income tax
purposes, to treat any foreign country income or withholding taxes paid by the
Fund that can be treated as income taxes under U.S. income tax principles, as
paid by its shareholders. For any year that either Fund makes such an election,
each of its shareholders will be required to include in his income (in addition
to taxable dividends actually received) his allocable share of such taxes paid
by the Fund, and will be entitled, subject to certain limitations, to credit his
portion of these foreign taxes against his U.S. federal income tax due, if any,
or to deduct it (as an itemized deduction) from his U.S. taxable income, if any.
Generally, a credit for foreign taxes is subject to the limitation that
it may not exceed the shareholder's U.S. tax attributable to his foreign source
taxable income. With respect to the International Fund, the Overseas Fund and
Gold Fund, if the pass through election described above is made, the source of
the electing Fund's income flows through to its shareholders. Certain gains from
the sale of securities and certain currency fluctuation gains will not be
treated as foreign source taxable income. In addition, this foreign tax credit
limitation must be applied separately to certain categories of foreign source
income, one of which is foreign source "passive income." For this purpose,
foreign "passive income" includes dividends, interest, capital gains and certain
foreign currency gains. As a consequence, certain shareholders may not be able
to claim a foreign tax credit for the full amount of their proportionate share
of foreign taxes paid by the Fund. The foreign tax credit limitation rules do
not apply to certain electing individual taxpayers who have limited creditable
foreign taxes and no foreign source income other than passive investment-type
income. The foreign tax credit is eliminated with respect to foreign taxes
withheld on dividends if the dividend paying shares are held by the Fund for
less than 16 days (46 days in the case of preferred shares) during the 30-day
period (90-day period for preferred shares) beginning 15 days (45 days for
preferred shares) before the shares become ex-dividend. The foreign tax credit
can be used to offset only 90% of the alternative minimum tax (as computed under
the Code for purposes of this limitation) imposed on corporations and
individuals. If a Fund is not eligible to make the pass-through election
described above, the foreign taxes it pays will reduce its income, and
distributions by the Fund will be treated as U.S. source income. Each
shareholder will be notified within 60 days after the close of the Fund's
taxable year whether, pursuant to the election described above, the foreign
taxes paid by the Fund will be treated as paid by its shareholders for that year
and, if so, such notification will designate (i) such shareholder's portion of
the foreign taxes paid to such country and (ii) the portion of the Fund's
dividends and distributions that represents income derived from sources within
such country.
Investments by a Fund in stock of certain foreign corporations which
generate largely passive investment-type income, or which hold a significant
percentage of assets which generate such income (referred to as "passive foreign
investment companies" or "PFICs"), are subject to special tax rules designed to
prevent deferral of U.S. taxation of the Fund's share of the PFIC's earnings. In
the absence of certain elections to report these earnings on a current basis,
regardless of whether the Fund actually receives any distributions from the
PFIC, a Fund would be required to report certain "excess distributions" from,
and any gain from the disposition of stock of the PFIC, as ordinary income. This
ordinary income would be allocated ratably to a Fund's holding period for the
stock. Any amounts allocated to prior taxable years would be taxable to the Fund
at the highest rate of tax applicable in that year, increased by an interest
charge determined as though the amounts were underpayments of tax. Amounts
allocated to the year of the distribution or disposition would be included in a
Fund's net investment income for that year and, to the extent distributed as a
dividend to the Fund's shareholders, would not be taxable to the Fund.
A Fund may elect to mark to market its foreign investment company
stock, resulting in the stock being treated as sold at fair market value on the
last business day of each taxable year. Any resulting gain would be reported as
ordinary income; any resulting loss and any loss from an actual disposition of
the stock would be reported as ordinary loss to the extent of any net gains
reported in prior years. Alternatively, the Fund may be able to make an
election, in lieu of being taxable in the manner described above, to include
annually in income its pro rata share of the ordinary earnings and net capital
gain of the foreign investment company, regardless of whether it actually
received any distributions from the foreign company. These amounts would be
included in the Fund's investment company taxable income and net capital gain
which, to the extent distributed by the Fund as ordinary or capital gain
dividends, as the case may be, would not be taxable to the Fund. In order to
make this election, the Fund would be required to obtain certain annual
information from the foreign investment companies in which it invests, which in
many cases may be difficult to obtain.
Each Fund may be required to withhold U.S. federal income tax at the
rate of 31% of all taxable distributions payable to shareholders who fail to
provide the Fund with their correct taxpayer identification number or to make
required certifications, or who have been notified by the IRS that they are
subject to backup withholding. Corporate shareholders and certain shareholders
specified in the Code generally are exempt from such backup withholding. Backup
withholding is not an additional tax. Any amounts withheld may be credited
against the shareholder's U.S. federal income tax liability.
Since, at the time of an investor's purchase of a Fund's shares, a
portion of the per share net asset value by which the purchase price is
determined may be represented by realized or unrealized appreciation in the
Fund's portfolio or undistributed income of the Fund, subsequent distributions
(or a portion thereof) on such shares may in reality represent a return of his
capital. However, such a subsequent distribution would be taxable to such
investor even if the net asset value of his shares is, as a result of the
distributions, reduced below his cost for such shares. Prior to purchasing
shares of the Fund, an investor should carefully consider such tax liability
which he might incur by reason of any subsequent distributions of net investment
income and capital gains.
Fund shareholders may be subject to state, local and foreign taxes on
their Fund distributions and redemptions of Fund shares. Also, the tax
consequences to a foreign shareholder of an investment in a Fund may be
different from those described above. Shareholders are advised to consult their
own tax advisers with respect to the particular tax consequences to them of an
investment in a Fund.
BROKERAGE ALLOCATION
SGAM Corp. is responsible for selecting members of securities
exchanges, brokers and dealers (such members, brokers and dealers being
hereinafter referred to as "brokers") for the execution of a Fund's portfolio
transactions and, when applicable, the negotiation of commissions in connection
therewith.
Purchase and sale orders are usually placed with brokers who are
selected by SGAM Corp. as being able to achieve "best execution" of such orders.
"Best execution" means prompt and reliable execution at the most favorable
securities price, taking into account the other considerations as here-in-after
set forth. The determination of what may constitute best execution of a
securities transaction by a broker involves a number of considerations,
including, without limitation, the overall direct net economic result to a Fund
(involving both price paid or received and any commissions and other costs
paid), the efficiency with which the transaction is effected, the ability to
effect the transaction at all where a large block is involved, availability of
the broker to stand ready to execute possibly difficult transactions in the
future, and the financial strength and stability of the broker. Such
considerations are judgmental and are weighed by SGAM Corp. in determining the
overall reasonableness of brokerage commissions. While there is no commitment or
understanding to do so, subject to its policy of obtaining best execution, a
Fund may use affiliates of Societe Generale as brokers in the purchase and sale
of securities. For the fiscal years ended March 31, 1997, 1998 and 1999, the
Company paid SG Cowen and affiliates of Societe Generale $67,054, $69,602, and
$[ ], respectively, in such brokerage commissions for transactions effected on
various exchanges. Such commissions paid for the fiscal year ended March 31,
1999 represented [ ]% of the aggregate brokerage commissions paid by the Company
during such period and was paid in connection with transactions representing [
]% of the aggregate dollar amount of all transactions effected by the Company
(including principal transactions for which no direct brokerage commissions are
paid).
For the fiscal years ended March 31, 1997 and 1998, the SoGen
International Fund, Inc. paid SG Cowen and affiliates of Societe Generale
$124,672 and $103,244, respectively, in such brokerage commissions for
transactions effected on various exchanges. Such commissions paid for the fiscal
year ended March 31, 1999 represented [ ]% of the aggregate brokerage
commissions paid by the Company during such period and was paid in connection
with transactions representing [ ]% of the aggregate dollar amount of all
transactions effected by the Company (including principal transactions for which
no direct brokerage commissions are paid).
FDI may not, acting as principal, sell any security or other property
to, or purchase any security or other property from, a Fund, except to the
extent that such purchase or sale may be permitted by an order, rule or
regulation of the Securities and Exchange Commission.
SGAM Corp. is authorized to allocate brokerage and principal business
to brokers other than SG Cowen Securities Corporation (but not excluding other
affiliates of Societe Generale) who have provided brokerage and research
services, as such services are defined in Section 28(e) of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), for the Company and/or other
accounts, if any, for which SGAM Corp. exercises investment discretion (as
defined in Section 3(a)(35) of the 1934 Act) and, as to transactions as to which
fixed minimum commission rates are not applicable, to cause a Fund to pay a
commission for effecting a securities transaction in excess of the amount
another broker would have charged for effecting the transaction, if SGAM Corp.
in making the selection in question determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker, viewed in terms of either that particular
transaction or of SGAM Corp.'s overall responsibilities with respect to a Fund
and the other accounts as to which it exercises investment discretion. In
reaching such determination, SGAM Corp. is not required to place or attempt to
place a specific dollar value on the research or execution services of a broker
or on the portion of any commission reflecting either of said services. In
demonstrating that such determinations were made in good faith, SGAM Corp. must
be prepared to show that all commissions were allocated and paid for purposes
contemplated by a Fund's brokerage policy; that the research services provide
lawful and appropriate assistance to SGAM Corp. in the performance of its
investment decision-making responsibilities; and that the commissions paid were
within a reasonable range. The determination that commissions were within a
reasonable range will be based on any available information as to the level of
commissions known to be charged by other brokers on comparable transactions, but
there will be taken into account the Company's policies that (i) obtaining a low
commission is deemed secondary to obtaining a favorable securities price, since
it is recognized that usually it is more beneficial to a Fund to obtain a
favorable price than to pay the lowest commission, and (ii) the quality,
comprehensiveness and frequency of research studies which are provided for SGAM
Corp. are useful to SGAM Corp. in performing its services under the investment
advisory contracts with the Company. Research services provided by brokers to
SGAM Corp. are considered to be in addition to, and not in lieu of, services
required to be performed by SGAM Corp. under such investment advisory contracts.
Research services provided by brokers include written reports, responses to
specific inquiries and interviews with analysts. These services also include
invitations to meetings arranged by such brokers with the management of
companies in the Funds' portfolios or in which the Funds may invest.
Consistent with the Conduct Rules of the National Association of
Securities Dealers, Inc. and subject to obtaining prices at least as favorable
as those provided by other qualified brokers, SGAM Corp. may consider sales of
shares of a Fund as a factor in the selection of brokers to execute portfolio
transactions.
Each Fund has been advised by SGAM Corp. that it may combine brokerage
orders for the Fund with orders from its other clients (including the other
Funds) when placing such orders with brokers for execution. In the event orders
are placed for a Fund and one or more other clients for the purchase or sale of
the same security, the Fund and each such other client may share in each
transaction in the proportion that each customer's order bears to the aggregate
of such orders. The Funds' orders are accorded priority over those received from
SGAM Corp. for its own account or from any of its officers, directors or
employees.
While SGAM Corp. is primarily responsible for the allocation of each
Fund's portfolio transactions to brokers, its polices and practices in this
regard must be consistent with the foregoing and are periodically reviewed by
the Company's Board of Directors. In this connection, the directors periodically
review and discuss with SGAM Corp. the commissions paid by each Fund and, in
transactions where a Fund pays commissions which are in excess of the
commissions other brokers would have charged, SGAM Corp.'s determinations that
such higher commissions are reasonable in relation to the value of the brokerage
and research services. According to the Company's records, the amount of
brokerage commissions paid by the Company during the fiscal year ended March 31,
1999, which was attributable to research services was $[ ], in connection with
transactions amounting to $[ ]. During the fiscal years ended March 31, 1999,
1998 and 1997, the Company paid total brokerage commissions of $[ ], $1,335,957,
and $1,028,722, respectively. During the fiscal years ended March 31, 1998 and
1997, SoGen International Fund, Inc. paid total brokerage commissions of
$2,286,967 and $2,138,878, respectively.
CUSTODY OF PORTFOLIO
Domestic portfolio securities of each Fund are held pursuant to a
custodian agreement between the Company and Investors Fiduciary Trust Company,
127 West 10th Street, Kansas City, MO 64105. Certain of such securities may be
deposited in the book-entry system operated by the Federal Reserve System or
with the Depository Trust Company. The Company's sub-custodian, State Street
Bank and Trust, holds domestic securities issued in physical form. Pursuant to a
Global Custody Agreement between the Company and The Chase Manhattan Bank
("Chase"), 4 Chase MetroTech Center, Brooklyn, NY 11245, foreign securities may
be held by certain foreign sub-custodians which are participants in the Global
Investor Services Division of Chase and in certain foreign branches of Chase.
INDEPENDENT AUDITORS
The Company's independent auditors are KPMG Peat Marwick LLP, Certified
Public Accountants, 345 Park Avenue, New York, NY 10154. KPMG Peat Marwick LLP
audits each Fund's annual financial statements and renders its report thereon,
which is included in the Annual Report to Shareholders.
FINANCIAL STATEMENTS
The Company's financial statements and notes thereto appearing in the
March 31, 1999 Annual Report to Shareholders and the report thereon of KPMG Peat
Marwick LLP, Certified Public Accountants, appearing therein, are incorporated
by reference in this Statement of Additional Information. The Fund will furnish,
without charge, a copy of the Annual Report to Shareholders on request. All such
requests should be directed to the Secretary of the Fund, at 1221 Avenue of the
Americas, New York, NY 10020.
<PAGE>
APPENDIX
RATINGS OF INVESTMENT SECURITIES
The rating of a rating service represents the service's opinion as to
the credit quality of the security being rated. However, the ratings are general
and are not absolute standards of quality or guarantees as to the
creditworthiness of an issuer. Consequently, the Funds' investment adviser
believes that the quality of debt securities in which a Fund invests should be
continuously reviewed. A rating is not a recommendation to purchase, sell or
hold a security, because it does not take into account market value or
suitability for a particular investor. When a security has received a rating
from more than one service, each rating should be evaluated independently.
Ratings are based on current information furnished by the issuer or obtained by
the ratings services from other sources which they consider reliable. Ratings
may be changed, suspended or withdrawn as a result of changes in or
unavailability of such information, or for other reasons.
The following is a description of the characteristics of ratings used
by Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Corporation
("S&P").
Moody's Ratings.
Aaa -- Bonds rated Aaa are judged to be the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"giltedge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. Although 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 bonds.
Aa -- Bonds rated Aa are judged to be high quality by all standards.
Together with the Aaa group they comprise what are 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 bonds or fluctuation of protective elements may be
of greater amplitude or there may be other elements present which make the
long-term risk appear somewhat larger than in Aaa bonds.
A -- Bonds 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 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.
Ba -- Bonds 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 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.
Caa -- Bonds rated Caa are of poor standing. Such bonds may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca -- Bonds rated Ca represent obligations which are speculative in a
high degree. Such bonds are often in default or have other marked shortcomings.
S&P Ratings.
AAA -- Bonds rated AAA have the highest rating. Capacity to pay
principal and interest is extremely strong.
AA -- Bonds rated AA have a very strong capacity to pay principal and
interest and differ from AAA bonds only in small degree.
A -- Bonds rated A have a strong capacity to pay principal and
interest, 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 principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this capacity
than for bonds in higher rated categories.
BB -- B -- CCC -- CC -- Bonds A-1 -- A-rated BB, B, CCC and CC are
regarded, on balance, as predominantly speculative with respect to the issuer's
capacity to pay interest and repay principal in accordance with the terms of the
obligation.
BB indicates the lowest degree of speculation among such bonds and CC
the highest degree of speculation. Although such bonds will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
<PAGE>
C -- 1
PART C
OTHER INFORMATION
Item 23. Exhibits
EXHIBIT
(a)(1) Articles of Incorporation of the Registrant.*
(a)(2) Articles of Amendment and Restatement.*
(a)(3) Articles Supplementary*
(b) By-Laws of the Registrant as amended through August 17, 1993.*
(c) Specimen Certificates representing shares of Common Stock
($.001 par value).*
(d)(1) Investment Advisory Contract between the Registrant and Societe
Generale Asset Management Corp.("SGAM Corp.") (Overseas, Gold and
Money Funds only)*
(d)(2) Investment Advisory Contract between the Registrant and
Societe Generale Asset Management Corp.
(International Fund only)*
(e)(1) Underwriting Agreement between the Registrant and Fund
Distributors, Inc. ("FDI")**
(e)(2) Form of Selling Group Agreement*
(f) Not applicable
(g)(1) Custody Agreement between the Registrant and Investors Fiduciary
Trust Company.*
(g)(2) Transfer Agency and Registrar Agreement between the Registrant
and DST Systems, Inc.*
(g)(3) Global Custody Agreement between the Registrant and The Chase
Manhattan Bank, N.A. ("Chase")*
(g)(4) Amendment to Global Custody Agreement between the Registrant and
Chase*
(h) Not applicable
(i) Opinion and Consent of Dechert Price & Rhoads*
(j) Consent of KPMG Peat Marwick LLP**
(k) Not applicable
(l) Investment Representation letter of SGAM Corp.*
(m) Rule 12b-1 Distribution Plan and Agreement between the
Registrant and FDI**
(n) Financial Data Schedules.*
(o) Multiple Class Plan pursuant to Rule 18f-3*
(p) Power of Attorney of Messrs. Collas*, Eveillard*, Meyer*,
Raillard*, Snyder*
- -------------------
* Previously filed as an exhibit to the Registration Statement.
** To be filed in a subsequent Amendment prior to the effective date of
this Amendment.
Item 24. Persons Controlled by or Under Common Control With Registrant
None.
Item 25. Indemnification
Registrant is incorporated under the laws of the State of Maryland and
is subject to Section 2-418 of the Corporations and Associations Article of the
General Corporation Law of the State of Maryland controlling the indemnification
of directors and officers. Since Registrant has its executive offices in the
State of New York, and is qualified as a foreign corporation doing business in
such State, the persons covered by the foregoing statute may also be entitled to
and subject to the limitations of the indemnification provisions of Section
721-726 of the New York Business Corporation Law.
The general effect of these statutes is to protect directors, officers,
employees and agents of the Registrant against legal liability and expenses
incurred by reason of their positions with the Registrant. The statutes provide
for indemnification for liability for proceedings not brought on behalf of the
corporation and for those brought on behalf of the corporation, and in each case
place conditions under which indemnification will be permitted, including
requirements that the indemnified person acted in good faith. Under certain
conditions, payment of expenses in advance of final disposition may be
permitted. The By-Laws of the Registrant make the indemnification of its
directors, officers, employees and agents mandatory subject only to the
conditions and limitations imposed by the above-mentioned Section 2-418 of
Maryland Law and by the provisions of Section 17(h) of the Investment Company
Act of 1940 as interpreted and required to be implemented by SEC Release No.
IC-11330 of September 4, 1980.
In referring in its By-Laws to, and making indemnification of directors
subject to the conditions and limitations of, both Section 2-418 of the Maryland
Law and Section 17(h) of the Investment Company Act of 1940, as amended (the
"1940 Act"), the Registrant intends that conditions and limitations on the
extent of the indemnification of directors and officers imposed by the
provisions of either Section 2-418 or Section 17(h) shall apply and that any
inconsistency between the two will be resolved by applying the provisions of
said Section 17(h) if the condition or limitation imposed by Section 17(h) is
the more stringent. In referring in its By-Laws to SEC Release No. IC-11330 as
the source for interpretation and implementation of said Section 17(h), the
Registrant understands that it would be required under its By-Laws to use
reasonable and fair means in determining whether indemnification of a director
or officer should be made and undertakes to use either (1) a final decision on
the merits by a court or other body before whom the proceeding was brought that
the person to be indemnified ("indemnitee") was not liable to the Registrant or
to its security holders by reason of willful malfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
or her office ("disabling conduct") or (2) in the absence of such a decision, a
reasonable determination, based upon a review of the facts, that the indemnitee
was not liable by reason of such disabling conduct, by (a) the vote of a
majority of a quorum of directors who are neither "interested persons" (as
defined in the 1940 Act) of the Registrant nor parties to the proceeding, or (b)
an independent legal counsel in a written opinion. Also, the Registrant will
make advances of attorney's fees or other expenses incurred by a director or
officer in his or her defense only if (in addition to his or her undertaking to
repay the advance if he or she is not ultimately entitled to indemnification)
(1) the indemnitee provides a security for his or her undertaking, (2) the
Registrant shall be insured against losses arising by reason of any lawful
advances, or (3) a majority of a quorum of the non-interested, non-party
directors of the Registrant, or an independent legal counsel in a written
opinion, shall determine, based on a review of readily available facts, that
there is reason to believe that the indemnitee ultimately will be found entitled
to indemnification.
In addition, the Registrant will maintain a directors' and officers'
errors and omissions liability insurance policy protecting directors and
officers against liability for claims made by reason of any acts, errors or
omissions committed in their capacity as directors of officers. The policy will
contain certain exclusions, among which is exclusion from coverage for active or
deliberate dishonest or fraudulent acts and exclusion for fines or penalties
imposed by law or other matters deemed uninsurable.
Item 26. Business and Other Connections of Investment Adviser
SGAM Corp. is the Registrant's investment adviser. In addition to the
Registrant, SGAM Corp., acts as investment adviser to SoGen Variable Funds, Inc.
and pension funds and sub-adviser to non-affiliated investment funds.
Reference is made to "Management of the Fund" in the Statement of
Additional Information constituting Part B of this Post-Effective Amendment for
a description of the business activities and employment of certain directors and
officers of SGAM Corp. within the last two fiscal years of the Registrant. The
directors of SGAM Corp. not disclosed in Part B are as follows:
Name and Address Principal Occupation
- --------------------------------------------- -------------------------------
Christian d'Allest........Director of Foreign Affiliates, Societe Generale Asset
2 Place de la Coupole Management
92078 Paris La Defense Cedex
France
Jean Roger Huet........... President, New York Branch, Societe Generale
1221 Avenue of the Americas
New York, NY 10020
Item 27. Principal Underwriters
(a) Funds Distributor, Inc. (the "Distributor") acts as principal
underwriter for the following investment companies.
American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
The Brinson Funds
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Equity Funds, Inc.
J.P. Morgan Institutional Funds
J.P. Morgan Funds
JPM Series Trust
JPM Series Trust II
LaSalle Partners Funds, Inc.
Kobrick Investment Trust
Merrimac Series
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds I
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
The Munder Funds, Inc.
National Investors Cash Management Fund, Inc.
Orbitex Group of Funds
SG Cowen Funds, Inc.
SG Cowen Income + Growth Fund, Inc.
SG Cowen Standby Reserve Fund, Inc.
SG Cowen Standby Tax-Exempt Reserve Fund, Inc.
SG Cowen Series Funds, Inc.
St. Clair Funds, Inc.
The Skyline Funds
Waterhouse Investors Family of Funds, Inc.
WEBS Index Fund, Inc.
Funds Distributor is registered with the Securities and Exchange
Commission as a broker-dealer and is a member of the National Association of
Securities Dealers. Funds Distributor is located at 60 State Street, Suite 1300,
Boston, Massachusetts 02109. Funds Distributor is an indirect wholly-owned
subsidiary of Boston Institutional Group, Inc., a holding company all of whose
outstanding shares are owned by key employees.
(b) The following is a list of the executive officers, directors and
partners of Funds Distributor, Inc.
Director, President and Chief Executive Officer - Marie E. Connolly
Executive Vice President - George A. Rio
Executive Vice President - Donald R. Roberson
Executive Vice President - William S. Nichols
Senior Vice President, General Counsel, Chief - Margaret W. Chambers
Compliance Officer, Secretary and Clerk
Director, Senior Vice President, Treasurer and - Joseph F. Tower, III
Chief Financial Officer
Senior Vice President - Paula R. David
Senior Vice President - Gary S. MacDonald
Senior Vice President - Judith K. Benson
Chairman and Director - William J. Nutt
(c) Not applicable.
Item 28. Location of Accounts and Records
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder are maintained at the offices of the Registrant, 1221 Avenue of the
Americas, New York, NY 10020 with the exception of certain accounts, books and
other documents which are kept by the Registrant's custodian, Investors
Fiduciary Trust Company, 127 West 10th Street, Kansas City, MO 64105 and
registrar and shareholder servicing agent, DST Systems, Inc. ("DST"), P.O. Box
419324, Kansas City, Missouri, 64141-6324.
Item 29. Management Services
Not applicable.
Item 30. Undertakings
The Registrant undertakes to call a meeting of shareholders for the
purpose of voting upon the question of removal of a director, if requested to do
so by the holders of at least 10% of a Fund's outstanding shares, and that it
will assist communication with other shareholders as required by Section 16(c)
of the Investment Company Act of 1940.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, the Registrant, SoGen Funds,
Inc., has duly caused this Post-Effective Amendment No. 7 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and State of New York, on the 3rd day of June, 1999.
SOGEN FUNDS, INC.
By: /s/ Jean-Marie Eveillard
---------------------------
(JEAN-MARIE EVEILLARD
PRESIDENT)
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment No. 7 has been signed below by the following
persons in the capacities and on the dates indicated.
/s/ Jean-Marie Eveillard President and Director June 3, 1999
__________________________________ (principal executive officer)
JEAN-MARIE EVEILLARD
/s/ Philip J. Bafundo Vice President and Treasurer June 3, 1999
__________________________________ (principal financial and
PHILIP J. BAFUNDO counting officer)
accounting officer)
* Chairman of the Board June 3, 1999
----------------------------------
PHILIPPE COLLAS
* Director June 3, 1999
----------------------------------
FRED J. MEYER
* Director June 3, 1999
----------------------------------
DOMINIQUE RAILLARD
* Director June 3, 1999
----------------------------------
NATHAN SNYDER
* By: /s/ Jean-Marie Eveillard
---------------------------------
(JEAN-MARIE EVEILLARD, ATTORNEY-IN-FACT)
- --------
* The Funds have no present intention of lending their portfolio
securities.
