<PAGE>
As filed with the Securities and Exchange Commission on October 15, 1999
Registration Nos. 33-66712, 811-7932
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 23
and
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 25
LINDNER ASSET ALLOCATION FUND, LINDNER LARGE-CAP FUND, LINDNER
SMALL-CAP FUND, LINDNER UTILITY FUND, LINDNER MARKET
NEUTRAL FUND, LINDNER OPPORTUNITIES FUND AND
LINDNER GOVERNMENT MONEY MARKET FUND,
each a Series of
LINDNER INVESTMENTS
(Exact Name of Registrant as Specified in Charter)
7711 Carondelet, Suite 700
St. Louis, Missouri 63105
(Address of Principal Executive Office)
(314) 727-5305
(Registrant's Telephone Number, Including Area Code)
Brian L. Blomquist, Vice President
Ryback Management Corporation
7711 Carondelet, Suite 700
St. Louis, Missouri 63105
(Name and Address of Agent for Service)
Copy to:
Paul R. Rentenbach
Dykema Gossett PLLC
400 Renaissance Center
Detroit, Michigan 48243
FAX: 313-568-6915
- ------------------------------------------------------------------------------
It is proposed that this filing will become effective (check appropriate box):
[ ] 60 days after filing pursuant to Rule 485(a)(1), or
[ ] On_________, 199_, pursuant to Rule 485(a)(1), or
[ ] 75 days after filing pursuant to Rule 485(a)(2), or
[ ] On ________, 19__, pursuant to Rule 485(a)(2).
[X] Immediately upon filing pursuant to Rule 485(b), or
[ ] On ___________, 19__, pursuant to Rule 485(b).
If appropriate, check this box:
[ ] This post-effective amendment designates a new effective date for a
previously-filed post-effective amendment.
==============================================================================
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Lindner Logo
As with all mutual funds, the Securities and Exchange Commission has
not approved or disapproved the Funds' shares nor has the Securities
and Exchange Commission passed upon the adequacy of this Prospectus.
Any representation to the contrary is a criminal offense.
LINDNER INVESTMENTS
Investor and Institutional Shares of
LINDNER ASSET ALLOCATION FUND
formerly Lindner Dividend Fund
LINDNER LARGE-CAP FUND
formerly Lindner Growth Fund
LINDNER SMALL-CAP FUND
formerly Lindner/Ryback Small-Cap Fund
LINDNER UTILITY FUND
LINDNER MARKET NEUTRAL FUND
formerly Lindner Bulwark Fund
and
Investor Shares of
LINDNER OPPORTUNITIES FUND
LINDNER GOVERNMENT MONEY
MARKET FUND
PROSPECTUS
DATED
OCTOBER 15, 1999
<PAGE>
<PAGE>
CONTENTS
INVESTMENT OBJECTIVES, RISKS AND PERFORMANCE 3
RISK FACTORS 5
PERFORMANCE SUMMARY 9
FUND EXPENSES 11
FINANCIAL HIGHLIGHTS 13
THE FUNDS IN DETAIL 18
ASSET ALLOCATION FUND 19
LARGE-CAP FUND 20
SMALL-CAP FUND 21
UTILITY FUND 22
MARKET NEUTRAL FUND 23
OPPORTUNITIES FUND 24
GOVERNMENT MONEY MARKET FUND 25
MORE ABOUT RISK 26
CERTAIN INVESTMENT PRACTICES 29
MANAGEMENT OF THE TRUST 31
PRICING OF SHARES FOR PURCHASE OR REDEMPTION 32
PURCHASE OF SHARES AND SHAREHOLDER INQUIRIES 33
REDEMPTION OF SHARES 38
EXCHANGING AN INVESTMENT FROM ONE FUND TO ANOTHER 42
SYSTEMATIC WITHDRAWAL PLAN 43
INDIVIDUAL RETIREMENT ACCOUNTS 43
DIVIDENDS, DISTRIBUTIONS AND TAXES 44
DISTRIBUTION AND SERVICE PLAN 46
LINDNER FUNDS 2
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INVESTMENT OBJECTIVES, RISKS AND PERFORMANCE
LINDNER ASSET ALLOCATION FUND
The Asset Allocation Fund seeks to produce current income through
investments in common stocks, convertible and non-convertible
preferred stocks, corporate bonds and debt securities issued or
guaranteed by the U.S. government that provide a yield higher than
that paid on either the Standard & Poor's 500 Stock Index or on
passbook savings accounts. Capital appreciation is a secondary
investment objective. The Asset Allocation Fund may invest in any
type or class of security without regard to market capitalization
size.
* Under normal circumstances, invests between 45% and 60% of total
assets in common stocks and securities convertible into common
stocks, between 25% and 50% of total assets in fixed income
securities and up to 30% of total assets in cash equivalent
securities.
* May invest a portion of its assets in securities issued by real
estate investment trusts ("REITs"), securities sold in unregistered
private placements to qualified institutional buyers ("Rule 144A
Securities") and debt securities that are rated below investment
grade or are unrated ("junk bonds").
* Principal risks include market risk, valuation risk, liquidity
risk, management risk, Year 2000 processing risk, credit risk and
interest rate risk. See "Risk Factors."
LINDNER LARGE-CAP FUND
The Large-Cap Fund seeks long-term capital appreciation through
investments in common stocks or securities convertible into common
stock. The production of current income is a secondary investment
objective.
* Under normal circumstances, invests at least 65% of total assets
in common stocks and equity securities of U.S. companies that have
market capitalizations in the range of the Russell 1000 Index
(between $1.45 billion and $456 billion at March 31, 1999).
* May invest using either value or growth strategies in companies
that are diversified across industry sectors, but may emphasize
certain sectors that are believed to offer superior potential for
growth of capital at the time of investment.
* May borrow money for investment purposes.
* May invest a portion of its assets in securities issued by foreign
companies, securities issued by REITs and Rule 144A Securities.
* Principal risks include market risk, valuation risk, liquidity
risk, foreign risk, management risk, leverage risk and Year 2000
processing risk. See "Risk Factors."
LINDNER SMALL-CAP FUND
The Small-Cap Fund seeks capital appreciation. The production of
current income is a secondary investment objective.
* Under normal circumstances, invests at least 65% of total assets
in common stocks and equity securities of U.S. companies that have
market capitalizations in the range of the Russell 2000 Index
(between $216 million and $1.44 billion at March 31, 1999).
* May invest using either value or growth strategies in companies
that are diversified across industry sectors, but may emphasize
certain sectors that are believed to offer superior potential for
growth of capital at the time of investment.
* May invest a portion of its assets in securities issued by foreign
companies, securities issued by REITs and Rule 144A Securities.
LINDNER FUNDS 3
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* Principal risks include market risk, valuation risk, liquidity
risk, foreign risk, management risk, Year 2000 processing risk and
small cap stock risk. See "Risk Factors."
LINDNER UTILITY FUND
The Utility Fund seeks to produce current income through investments
in securities of domestic and foreign public utility companies.
Capital appreciation is a secondary investment objective.
* Under normal circumstances, invests at least 65% of total assets
in common and preferred stocks (both convertible and
non-convertible) and bonds of domestic and foreign public utilities,
including gas, electric, telecommunications, cable television, water
and energy utilities and related businesses.
* May invest in Rule 144A Securities and junk bonds.
* Principal risks include market risk, valuation risk, liquidity
risk, Year 2000 processing risk, management risk, credit risk,
sector concentration and foreign risk. See "Risk Factors."
LINDNER MARKET NEUTRAL FUND
The Market Neutral Fund seeks long term capital appreciation in both
bull and bear markets while maintaining minimal portfolio exposure
to general equity market risk by always having both long and short
positions in equity securities.
* Invests in long positions of common stocks and securities
convertible into common stocks issued by U.S. companies without
regard to quality or rating that the Adviser believes are
undervalued.
* Invests in short positions in common stocks and securities
convertible into common stocks issued by U.S. companies that the
Adviser believes are overvalued.
* May invest in Rule 144A Securities.
* Principal risks include market risk, valuation risk, Year 2000
processing risk, short selling risk, management risk, leverage risk
and interest rate risk. See "Risk Factors."
LINDNER OPPORTUNITIES FUND
The Opportunities Fund seeks long-term capital growth. The
production of current income is a secondary investment objective.
* Under normal circumstances, invests primarily in common stocks and
securities convertible into common stocks that are issued by U.S.
companies.
* May invest in both "growth" and "value" stocks of companies with
small, medium or large capitalizations, depending on the Adviser's
judgment as to which styles or sectors are currently in favor.
* Uses fundamental and technical analyses of a company's financial
condition, industry position and prospects, and of economic
conditions generally to select investments.
* Principal risks include market risk, management risk, small cap
stock risk and Year 2000 processing risk. See "Risk Factors."
LINDNER GOVERNMENT MONEY MARKET FUND
The Government Money Market Fund seeks to produce current income
consistent with preservation of capital and liquidity.
* Invests exclusively in U.S. dollar denominated obligations issued
or guaranteed by the United States Government, its agencies and
instrumentalities and in repurchase agreements secured by such
securities.
LINDNER FUNDS 4
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<PAGE>
* Principal risks include market risk, interest rate risk and Year
2000 processing risk. See "Risk Factors."
RISK FACTORS
All investments involve some level of risk. Simply stated, risk is
the possibility that you will lose money or not make money. The
principal risk factors for the Funds are described below. Other
risks may also apply. See "More About Risk" on page 26. Before you
invest, you should be aware of the principal risks that apply to
your Fund. As with any mutual fund, you could lose money over any
period of time. Investments in the Funds are not bank deposits and
are not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. Although the Government
Money Market Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the
Government Money Market Fund.
MARKET RISK (ALL FUNDS)
The market value of a security may move up or down, sometimes
rapidly and unpredictably. These fluctuations, often referred to as
"volatility", may cause the price of a security to drop below
previous levels. Market risk may affect a single issuer, industry,
sector of the economy or the market as a whole. Market risk is
common to most investments, including stocks and bonds, and to the
mutual funds that invest in them. Bonds and other fixed income
securities generally involve less market risk than stocks. However,
the risks of investing in bonds can vary significantly depending
upon factors such as issuer and maturity. The bonds of some
companies may be riskier than the stocks of others.
VALUATION RISK (ALL FUNDS EXCEPT GOVERNMENT MONEY MARKET FUND)
This is the risk that the Adviser has valued certain securities at a
higher or lower price than the Fund can sell them.
LIQUIDITY RISK (ASSET ALLOCATION FUND, LARGE-CAP FUND, SMALL-CAP
FUND, UTILITY FUND)
Certain securities may be difficult or impossible to sell at the
time and price that a Fund would like. A Fund may have to accept a
lower price, sell other securities or forego an investment
opportunity, and this could have a negative effect on performance.
This risk applies to restricted securities, Rule 144A Securities,
certain over-the-counter options, securities not traded in the U.S.
markets and other securities that may trade in U.S. markets but are
not registered under the federal securities laws. Each Fund may
invest up to 15% of its net assets in illiquid securities except
that the Government Money Market Fund may invest only up to 10% of
its net assets in illiquid securities. Because illiquid and
restricted securities may be difficult to sell at an acceptable
price, they may be subject to greater volatility and may result in a
loss to a Fund.
MANAGEMENT RISK (ALL FUNDS EXCEPT GOVERNMENT MONEY MARKET FUND)
A strategy which the Adviser uses may fail to produce the intended
results. The particular securities and types of securities a Fund
holds may under-perform other securities and types of securities.
There can be no assurance that a Fund will achieve its investment
objective. Certain policies of each Fund which may not be changed
without a shareowner vote are described in the SAI.
LINDNER FUNDS 5
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YEAR 2000 PROCESSING RISK (ALL FUNDS)
Like other investment companies and financial service providers,
each Fund could be adversely affected if the computer systems used
by the Adviser (and the Subadviser in the case of the Government
Money Market Fund) and the Funds' other service providers do not
properly process and calculate date-related information and data
beginning on January 1, 2000. This possibility is commonly known as
the "Year 2000 Problem". The Year 2000 Problem arises because most
computer systems were designed only to recognize a two-digit year,
not a four-digit year. When the year 2000 begins, these computers
may interpret "00" as the year 1900 and either stop processing
date-related computations or process them incorrectly. These
failures could have a negative impact on the handling of securities
trades, pricing and account services. The Adviser is taking steps to
address the Year 2000 Problem with respect to the computer systems
that it uses. The Adviser is also working to determine the Year 2000
readiness of those entities which provide services to the Funds. As
of the date of this Prospectus, it is not anticipated that
shareholders will experience negative effects on their investment,
or on the services provided in connection therewith, as a result of
the Year 2000 Problem relating to the investment adviser or the
Funds' other major service providers. However, there can be no
assurance that the steps taken by these service providers will be
successful, or that interaction with other non-complying computer
systems will not adversely impact the Funds. Also, companies in
which the Funds invest could be adversely affected by the Year 2000
Problem. Also, it is possible that the normal operations of the Fund
will in any event, be disrupted significantly by the failure of
communications and public utility companies, governmental entities,
financial processors or others as a result of the Year 2000 Problem.
CREDIT RISK (ASSET ALLOCATION FUND, UTILITY FUND)
Each Fund, to the extent that it invests in fixed income securities,
is subject to the risk that an issuer of those securities may
default on its obligation to pay interest and repay principal. Also,
changes in the financial strength of an issuer or changes in the
credit rating of a security may affect its value. Credit risk
includes "counterparty risk,"--the risk that the other party to a
transaction will not fulfill its contractual obligation. This risk
applies, for example, to repurchase agreements into which a Fund may
enter. Securities rated below investment grade are particularly
subject to credit risk. These securities are predominantly
speculative and are commonly referred to as "junk bonds". To the
extent a Fund purchases or holds convertible or other securities
that are rated below investment grade, a greater risk exists as to
the timely repayment of the principal of, and the timely payment of
interest or dividends on, such securities.
INTEREST RATE RISK (ASSET ALLOCATION FUND, MARKET NEUTRAL FUND,
GOVERNMENT MONEY MARKET FUND)
Changes in interest rates may cause a decline in the market value of
an investment. With bonds and other fixed income securities, a rise
in interest rates typically causes a fall in bond values, while a
fall in interest rates typically causes a rise in bond values. Fixed
income securities with longer maturities are more susceptible to
changes in value due to interest rate changes than are those with
shorter maturities.
LINDNER FUNDS 6
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SECTOR CONCENTRATION (UTILITY FUND)
A fund that invests more than 25% of its net assets in a group of
related industries (an industry sector) is subject to increased risk
because of this concentration. The fund's performance will generally
depend on the sector's performance, which may differ in direction
and degree from that of the overall stock market. In addition,
financial, economic, business and political developments affecting
the industry sector may have a greater effect on the fund.
FOREIGN RISK (LARGE-CAP FUND, SMALL-CAP FUND, UTILITY FUND)
When a Fund invests in foreign securities, it will be subject to
special risks not typically associated with domestic companies
resulting from less government regulation, less public information
and less economic, political and social stability. Foreign
securities, and in particular foreign debt securities, are sensitive
to changes in interest rates. In addition, investment in the
securities of foreign governments involves the risk that foreign
governments may default on their obligations or may otherwise not
respect the integrity of their debt. A Fund which invests in foreign
securities will also be subject to the diplomatic risk that an
adverse change in the diplomatic relations between the U.S. and
another country might reduce the value or liquidity of investments.
Future political and economic developments, the possible imposition
of withholding taxes on dividend income, the possible seizure or
nationalization of foreign holdings, the possible establishment of
exchange controls or freezes on the convertibility of currency, or
the adoption of other governmental restrictions might adversely
affect an investment in foreign securities. Additionally, foreign
banks and foreign branches of domestic banks may be subject to less
stringent reserve requirements, and to different accounting,
auditing and recordkeeping requirements.
Foreign risks will normally be greatest when a Fund invests in
issuers located in emerging markets. Securities issued in emerging
market countries, in particular, may be more sensitive to certain
economic changes and less liquid. These countries are located in the
Asia/Pacific region, Eastern Europe, Latin and South America and
Africa. In general, the securities markets of these countries are
less liquid, are subject to greater price volatility, have smaller
market capitalizations and have problems with securities
registration and custody. In addition, because the securities
settlement procedures are less developed in these countries, a Fund
may be required to deliver securities before receiving payment and
also be unable to complete transactions during market disruptions.
As a result of these and other risks, investments in these countries
generally present a greater risk of loss to a Fund. Investment in
foreign securities also involves higher costs than investment in
U.S. securities, including higher transaction and custody costs as
well as the imposition of additional taxes by foreign governments.
Each of the Funds, other than the Government Money Market Fund, may
invest in foreign currency denominated securities. A Fund which
invests in foreign currency denominated securities will also be
subject to the risk of negative foreign currency rate fluctuations.
A change in the exchange rate between U.S. dollars and foreign
currency may reduce the value of an investment made in a security
denominated in that foreign currency. The International Fund may,
but is not required to, hedge against foreign currency risk, and the
other Funds may do so on unsettled trades.
LINDNER FUNDS 7
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SMALL CAP STOCK RISK (SMALL-CAP FUND, OPPORTUNITIES FUND)
Smaller capitalization stocks involve greater risks than those
associated with larger, more established companies. Small company
stocks may be subject to more abrupt or erratic price movements, for
several reasons. These stocks are traded in lower volumes and the
issuers of these stocks are more sensitive to changing conditions
and may have less certain growth prospects. Also, there are fewer
market makers for these stocks and wider spreads between quoted bid
and asked prices in the over-the-counter market. Small cap stocks
also tend to be less liquid, particularly during periods of market
disruption. There is normally less publicly available information
concerning these securities. Small companies in which the Funds may
invest may have limited product lines, markets or financial
resources, or may be dependent on a small management group.
LEVERAGE RISK (LARGE-CAP FUND, MARKET NEUTRAL FUND)
Each Fund other than the Government Money Market Fund has the
ability to borrow money and use the borrowings for investment
purposes ("leverage"). Borrowing may not exceed the limits
established from time to time by the Board of Trustees, which is
currently set at 5% of total assets after giving effect to the
borrowing. At present, the Adviser intends to use borrowed funds for
investing only for the Large-Cap Fund and the Market Neutral Fund.
Leveraging creates an opportunity for increased net income and
capital appreciation but, at the same time, creates special risk
considerations. For example, leveraging may exaggerate changes in
the net asset value of a Fund's shares and in the yield on a Fund's
portfolio. Although the principal of such borrowings will be fixed,
a Fund's assets may change in value during the time the borrowing is
outstanding. Leveraging will create interest expense for the Fund
which can exceed the income from the assets retained. To the extent
the income derived from securities purchased with borrowed funds
exceeds the interest a Fund will have to pay, the Fund's net income
will be greater than if leveraging were not used. Conversely, if the
income from the assets retained with borrowed monies is not
sufficient to cover the cost of leveraging, the net income of the
Fund will be less than if leveraging were not used, and therefore
the amount available for distribution to stockholders as dividends
will be reduced. If, due to market fluctuations or other reasons, a
Fund must sell securities to repay borrowings, the Fund may have to
do so at a time when it is disadvantageous.
LINDNER FUNDS 8
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PERFORMANCE SUMMARY
The bar charts below illustrate the risks of investing in the Funds.
The bar charts show you how much an investment in Investor Shares of
a Fund has changed in value over each calendar year, assuming all
dividends and capital gains are reinvested, during each of the last
10 calendar years (or from the year of inception if shorter than 10
years). These returns differ from the total returns shown for each
Fund's fiscal year Financial Highlights. The Opportunities Fund is a
new fund and just commenced operations on October 12, 1999. As with
all mutual funds, past performance is not a prediction of the
future.
CALENDAR YEAR TOTAL RETURNS<F1>
Asset Allocation Fund chart
Large-Cap Fund chart
Small-Cap Fund chart
Utility Fund chart
Market Neutral Fund chart
[FN]
- ---------
<F1> The Funds have a fiscal year that ends on June 30. Total returns (not
annualized), for each Fund for the six months ended June 30, 1999, are as
follows--Asset Allocation Fund: 3.88%; Large-Cap Fund: -0.06%; Small-Cap Fund:
6.47%; Utility Fund: 24.53%; and Market Neutral Fund: 1.24%.
<F2> Until July 1, 1999, this Fund was managed with a different investment
objective and different principal investment strategies.
LINDNER FUNDS 9
<PAGE>
<PAGE>
AVERAGE ANNUAL TOTAL RETURNS
The tables below compare each Fund's Investor Share and
Institutional Share performance over varying periods ending on
December 31, 1998, to the performance of a broadly based securities
market index and other indices that are believed by the Adviser to
have similar investment objectives. This tells you what constant
annual return would have produced the actual cumulative return of
the Fund or index. Because the Opportunities Fund only commenced
operations on October 12, 1999, no performance data is available for
it. As with all mutual funds, past performance is not a prediction
of the future.
<TABLE>
<CAPTION>
Since
Inception
INVESTOR SHARES--Fund or Index 1 Year 5 Years 10 Years <F1>
- ------------------------------ ------ ------- -------- ---------
<S> <C> <C> <C> <C>
Asset Allocation Fund -13.65% 6.95% 9.40% 15.58%
S&P 500 Index 18.45% 26.09% 18.60% 14.75%
Large-Cap Fund -30.29% 5.38% 6.61% 15.27%
S&P 500 Index 18.45% 26.09% 18.60% 13.01%
Small-Cap Fund -17.46% 11.48% n/a 10.71%
Russell 2000 Index -16.19% 10.81% 10.26% 9.46%
Utility Fund -8.71% 12.41% n/a 12.15%
Dow Jones Utility Index 6.19% 13.48% n/a 8.74%
Market Neutral Fund <F2> 0.55% -0.82% n/a -0.66%
S&P 500 Index 18.45% 26.09% 18.60% 24.24%
<CAPTION>
Since
Inception
INSTITUTIONAL SHARES--Fund or Index 1 Year 5 Years 10 Years <F1>
- ----------------------------------- ------ ------- -------- ---------
<S> <C> <C> <C> <C>
Asset Allocation Fund -13.82% n/a n/a 3.27%
S&P 500 Index 18.45% n/a n/a 30.30%
Large-Cap Fund -30.66% n/a n/a -5.02%
S&P 500 Index 18.45% n/a n/a 31.04%
Small-Cap Fund -17.43% n/a n/a 7.50%
Russell 2000 Index -16.19% n/a n/a 8.20%
Utility Fund -9.12% n/a n/a 8.66%
Dow Jones Utility Index 6.19% n/a n/a 21.18%
Market Neutral Fund <F2> 0.84% n/a n/a -9.20%
S&P 500 Index 18.45% n/a n/a 31.04%
<FN>
- --------
<F1> The date of inception is different for each Fund and for each class within
a Fund.
<F2> Until July 1, 1999, this Fund was managed with a different investment
objective and different principal investment strategies.
</TABLE>
The yield on the Government Money Market Fund for the seven day
period ended on December 31, 1998 was 4.50%. This yield is based on
historical earnings, which will fluctuate and should not be
considered as representative of future performance. You may call
1-800-995-7777 to learn the current 7-day yield on the Government
Money Market Fund.
LINDNER FUNDS 10
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FUND EXPENSES
These tables describe the fees and expenses that you may pay if you
buy and hold Investor Shares or Institutional Shares of one of the
Funds.
SHAREHOLDER FEES (fees paid directly from your investment)
Maximum sales charge (load) imposed on purchases............ None
Maximum sales charge (load) imposed on reinvested
dividends................................................. None
Deferred sales charge (load)................................ None
Redemption fee (as a percentage of redemption proceeds,
payable only if shares are redeemed within 60 days of
purchase--see "Redemption of Shares")<F*>................. 2%
Exchange fee................................................ None
Wire transfer fee per requested transaction (see "Redemption
of Shares")............................................... $10
Overnight delivery fee for checks (see "Redemption of
Shares").................................................. $15
[FN]
- -------
<F*> The Government Money Market Fund does not charge this redemption fee.
<TABLE>
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)
<CAPTION>
Distribution Other Total
Management (12b-1) Expenses Operating
Fees Fees <F1> Expenses
---------- ------------ -------- ---------
(as a percentage of average daily net assets)
<S> <C> <C> <C> <C>
ASSET ALLOCATION FUND
Investor Shares 0.52% None 0.14% 0.66%
Institutional Shares 0.52% 0.25% 0.13% 0.90%
LARGE-CAP FUND
Investor Shares 0.37% None 0.20% 0.57%
Institutional Shares 0.37% 0.25% 0.23% 0.85%
SMALL-CAP FUND
Investor Shares 0.70% None 0.24% 0.94%
Institutional Shares 0.70% 0.25% 0.21% 1.16%
UTILITY FUND
Investor Shares 0.70% None 0.27% 0.97%
Institutional Shares 0.70% 0.25% 0.35% 1.30%
MARKET NEUTRAL FUND
Investor Shares 1.00% None 0.45% 1.45%
Institutional Shares <F2> 1.00% 0.25% 0.71% 1.96%
OPPORTUNITIES FUND
Investor Shares <F3> 0.90% None 0.35% 1.25%
GOVERNMENT MONEY MARKET FUND
Investor Shares <F4> 0.15% None 0.35% 0.50%
<FN>
- -------
<F1> Other Expenses include an administration fee of 0.20% of average daily net
assets of the Government Money Market Fund and an administration fee of 0.15%
of average daily net assets of the Opportunities Fund, payable to Lindner Asset
Management, Inc., as administrator.
<F2> For the fiscal year ended June 30, 1999, the Adviser waived all of its
management fee for Institutional Shares of the Market Neutral Fund, and actual
Total Operating Expenses for this class of shares was 0.96% of average net
assets.
<F3> The Adviser has agreed to waive a portion of its management fee for the
fiscal years ending June 30, 2000 and 2001 in order to maintain the Total
Operating Expenses for the Opportunities Fund at not more than 1.25% of average
net assets during the fiscal year. After July 1, 2001, the Adviser can
terminate this fee waiver, in its sole discretion.
<F4> The Adviser has agreed to waive a portion of its administrative fee to the
extent necessary to maintain the Government Money Market Fund's annual Total
Operating Expenses at not more than 0.50% of average net assets during the
fiscal year. For the fiscal year ended June 30, 1999, no waiver was required.
The Adviser can terminate this fee waiver at any time, in its sole discretion.
</TABLE>
LINDNER FUNDS 11
<PAGE>
<PAGE>
EXPENSE EXAMPLES
These examples may help you to compare the costs of investing in one
of the Lindner Funds with the costs of investing in other mutual
funds. Because the table uses hypothetical (assumed) conditions,
your actual costs may be higher or lower. These examples should not
be considered as representing past or future performance or expenses
of any Fund.
You would pay the following expenses on a $10,000 investment,
assuming (1) Total Operating Expenses of each Fund are as set forth
in the table above, (2) each Fund has a 5% annual return and (3) you
redeem your shares at the end of each time period:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
ASSET ALLOCATION FUND
Investor Shares $ 67 $211 $ 368 $ 822
Institutional Shares $ 92 $287 $ 498 $1,107
LARGE-CAP FUND
Investor Shares $ 58 $182 $ 318 $ 714
Institutional Shares $ 87 $271 $ 471 $1,049
SMALL-CAP FUND
Investor Shares $ 96 $299 $ 520 $1,154
Institutional Shares $118 $368 $ 638 $1,408
UTILITY FUND
Investor Shares $ 99 $310 $ 536 $1,189
Institutional Shares $132 $412 $ 713 $1,568
MARKET NEUTRAL FUND
Investor Shares $148 $459 $ 792 $1,735
Institutional Shares $199 $615 $1,057 $2,285
OPPORTUNITIES FUND
Investor Shares $127 $397 $ 686 $1,511
GOVERNMENT MONEY MARKET FUND
Investor Shares $ 44 $138 $ 241 $ 542
</TABLE>
LINDNER FUNDS 12
<PAGE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<CAPTION>
INCOME (LOSS) FROM INVESTMENT OPERATIONS DISTRIBUTIONS
------------------------------------------------- ------------------------------------------
Net Realized Distributions
and from Net
Net Asset Unrealized Total Dividends Realized
Value, Net Gains from from Net Gains from
Beginning Investment (Losses) on Investment Investment Investment Total
of Period Income Investments Operations Income Transactions Distributions
--------- ---------- ------------ ---------- ---------- ------------- -------------
LINDNER ASSET ALLOCATION FUND <F1>
- ----------------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1995 $24.96 $0.95 $1.05 $2.00 $0.96 $0.00 $0.96
1996 $26.00 $1.80 $2.29 $4.09 $1.79 $0.23 $2.02
1997 $28.07 $1.63 $0.70 $2.33 $1.68 $0.78 $2.46
1998 $27.94 $1.83 $2.02 $3.85 $1.71 $2.49 $4.20
1999 $27.59 $2.16 ($3.80) ($1.64) $1.95 $0.50 $2.45
<CAPTION>
LINDNER LARGE-CAP FUND <F2>
- ---------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1995 $22.42 $0.43 $2.66 $3.09 $0.34 $1.84 $2.18
1996 $23.33 $0.40 $4.47 $4.87 $0.47 $1.34 $1.81
1997 $26.39 $0.36 $2.72 $3.08 $0.39 $3.10 $3.49
1998 $25.98 $0.38 ($0.27) $0.11 $0.34 $3.48 $3.82
1999 $22.27 $0.29 ($3.36) ($3.07) $0.32 $2.74 $3.06
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------
Ratio of
Net Net
Net Asset Ratio of Investment Assets,
Value, Expenses Income to Portfolio End of
End of Total to Average Average Turnover Period
Period Return <F3> Net Assets Net Assets Rate (In Millions)
--------- ----------- ---------- ---------- --------- -------------
LINDNER ASSET ALLOCATION FUND <F1>
- ----------------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1995 $26.00 8.12% 0.21% 2.43% 11.00% $1,903
1996 $28.07 16.14% 0.60% <F4> 6.62% 30.24% $2,293
1997 $27.94 8.75% 0.60% 5.74% 40.32% $2,017
1998 $27.59 14.75% 0.61% 6.29% 28.56% $1,616
1999 $23.50 -5.57% 0.66% 8.03% 31.74% $768
<CAPTION>
LINDNER LARGE-CAP FUND <F2>
- ---------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1995 $23.33 14.89% 0.54% 1.89% 24.94% $1,446
1996 $26.39 21.95% 0.63% <F4> 1.53% 39.49% $1,446
1997 $25.98 12.50% 0.44% 1.39% 36.39% $1,495
1998 $22.27 0.31% 0.44% 1.29% 44.43% $1,003
1999 $16.14 -13.66% 0.57% 1.27% 53.41% $434
<FN>
- ---------
<F1> Historical performance information for fiscal 1995 is for Lindner Dividend
Fund, Inc. (LDFI), the predecessor to the Asset Allocation Fund. The Asset
Allocation Fund succeeded to all of the assets and liabilities of LDFI on
June 30, 1995, pursuant to a reorganization approved by shareholders on
June 29, 1995.
<F2> Historical performance information for fiscal 1995 is for Lindner Fund,
Inc. (LFI), the predecessor to the Large-Cap Fund. The Large-Cap Fund
succeeded to all of the assets and liabilities of LFI on June 30, 1995,
pursuant to a reorganization approved by shareholders on June 29, 1995.
<F3> Total return shows how much an investment has changed over the year shown,
assuming all dividends and capital gains are reinvested and shares are
redeemed at net asset values at the end of the year.
<F4> Expense ratios for periods after September 1, 1995, are computed using
gross expenses, which include fees reduced in connection with specific
waiver agreements.
LINDNER FUNDS 13
<PAGE>
<PAGE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT THE PERIOD)
INCOME (LOSS) FROM INVESTMENT OPERATIONS DISTRIBUTIONS
------------------------------------------------- ------------------------------------------
Net Realized Distributions
and from Net
Net Asset Unrealized Total Dividends Realized
Value, Net Gains from from Net Gains from
Beginning Investment (Losses) on Investment Investment Investment Total
of Period Income Investments Operations Income Transactions Distributions
--------- ---------- ------------ ---------- ---------- ------------- -------------
LINDNER SMALL-CAP FUND
- ----------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1995 $4.79 ($0.03) $0.71 $0.68 $0.01 $0.00 $0.01
1996 $5.46 $0.00 $1.30 $1.30 $0.00 $0.61 $0.61
1997 $6.15 $0.04 $1.49 $1.53 $0.01 $0.00 $0.01
1998 $7.67 $0.09 $1.07 $1.16 $0.04 $0.30 $0.34
1999 $8.49 $0.08 ($0.12) ($0.04) $0.08 $0.31 $0.39
<CAPTION>
LINDNER UTILITY FUND
- --------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1995 $10.02 $0.39 $0.84 $1.23 $0.39 $0.09 $0.48
1996 $10.77 $0.35 $3.42 $3.77 $0.34 $0.00 $0.34
1997 $14.20 $0.39 $1.60 $1.99 $0.42 $0.02 $0.44
1998 $15.75 $0.37 $1.96 $2.33 $0.37 $0.93 $1.30
1999 $16.78 $0.33 $0.44 $0.77 $0.33 $2.41 $2.74
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------
Ratio of
Net Net
Net Asset Ratio of Investment Assets,
Value, Expenses Income to Portfolio End of
End of Total to Average Average Turnover Period
Period Return <F1> Net Assets Net Assets Rate (In Millions)
--------- ----------- ---------- ---------- --------- -------------
LINDNER SMALL-CAP FUND
- ----------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1995 $5.46 14.32% 1.65% -0.57% 158.62% $8
1996 $6.15 25.70% 1.22% <F2> -0.04% 103.05% $10
1997 $7.67 24.96% 0.96% 0.46% 49.49% $25
1998 $8.49 15.24% 0.87% 1.13% 24.52% $54
1999 $8.06 0.11% 0.94% 0.99% 65.98% $38
<CAPTION>
LINDNER UTILITY FUND
- --------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1995 $10.77 12.51% 1.04% 3.02% 190.70% $18
1996 $14.20 35.39% 0.95% <F2> 2.87% 98.58% $32
1997 $15.75 14.29% 0.89% 2.81% 86.44% $47
1998 $16.78 15.53% 0.91% 2.21% 99.37% $43
1999 $14.81 8.62% 0.97% 2.40% 137.51% $26
<FN>
- ---------
<F1> Total return shows how much an investment has changed over the year shown,
assuming all dividends and capital gains are reinvested and shares are
redeemed at net asset values at the end of the year.
<F2> Expense ratios for periods after September 1, 1995, are computed using
gross expenses, which include fees reduced in connection with specific
waiver agreements.
LINDNER FUNDS 14
<PAGE>
<PAGE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT THE PERIOD)
INCOME (LOSS) FROM INVESTMENT OPERATIONS DISTRIBUTIONS
------------------------------------------------- ------------------------------------------
Net Realized Distributions
and from Net
Net Asset Unrealized Total Dividends Realized
Value, Net Gains from from Net Gains from
Beginning Investment (Losses) on Investment Investment Investment Total
of Period Income Investments Operations Income Transactions Distributions
--------- ---------- ------------ ---------- ---------- ------------- -------------
LINDNER MARKET NEUTRAL FUND
- ---------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1995 $7.17 $0.11 ($0.10) $0.01 $0.05 $0.04 $0.09
1996 $7.09 $0.26 $1.32 $1.58 $0.31 $0.00 $0.31
1997 $8.36 $0.29 ($1.81) ($1.52) $0.14 $0.00 $0.14
1998 $6.70 $0.23 ($0.89) ($0.66) $0.39 $0.00 $0.39
1999 $5.65 $0.23 $0.01 $0.24 $0.17 $0.00 $0.17
<CAPTION>
LINDNER GOVERNMENT MONEY MARKET FUND
- ------------------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1997 <F1> $1.00 $0.05 $0.00 $0.05 $0.05 $0.00 $0.05
1998 $1.00 $0.05 $0.00 $0.05 $0.05 $0.00 $0.05
1999 $1.00 $0.05 $0.00 $0.05 $0.05 $0.00 $0.05
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------
Ratio of
Net Net
Net Asset Ratio of Investment Assets,
Value, Expenses Income to Portfolio End of
End of Total to Average Average Turnover Period
Period Return <F2> Net Assets Net Assets Rate (In Millions)
--------- ----------- ---------- ---------- --------- -------------
LINDNER MARKET NEUTRAL FUND
- ---------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1995 $7.09 0.10% 1.27% 2.45% 122.64% $65
1996 $8.36 23.44% 1.24% <F3> 2.45% 139.82% $62
1997 $6.70 -18.43% 1.20% 3.86% 457.57% $68
1998 $5.65 -10.08% 1.23% 1.66% 109.32% $28
1999 $5.72 4.29% 1.45% 3.46% 104.92% $18
<CAPTION>
LINDNER GOVERNMENT MONEY MARKET FUND
- ------------------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1997 <F1> $1.00 5.02% 0.43% 5.45% -- $39
1998 $1.00 5.21% 0.50% 5.08% -- $43
1999 $1.00 4.70% 0.50% 4.53% -- $44
<FN>
- ---------
<F1> For the period July 6, 1996 (initial purchase) to June 30, 1997.
<F2> Total return for periods of less than a year are not annualized. Total
return shows how much an investment has changed over the year shown,
assuming all dividends and capital gains are reinvested and shares are
redeemed at net asset values at the end of the year.
<F3> Expense ratios for periods after September 1, 1995, are computed using
gross expenses, which include fees reduced in connection with specific
waiver agreements.
LINDNER FUNDS 15
<PAGE>
<PAGE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(FOR AN INSTITUTIONAL SHARE OUTSTANDING THROUGHOUT THE PERIOD)
INCOME (LOSS) FROM INVESTMENT OPERATIONS DISTRIBUTIONS
------------------------------------------------- ------------------------------------------
Net Realized Distributions
and from Net
Net Asset Unrealized Total Dividends Realized
Value, Net Gains from from Net Gains from
Beginning Investment (Losses) on Investment Investment Investment Total
of Period Income Investments Operations Income Transactions Distributions
--------- ---------- ------------ ---------- ---------- ------------- -------------
LINDNER ASSET ALLOCATION FUND
- -----------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1997 <F1> $28.07 $1.61 $0.66 $2.27 $1.66 $0.78 $2.44
1998 $27.90 $1.78 $2.00 $3.78 $1.66 $2.49 $4.15
1999 $27.53 $2.15 ($3.83) ($1.68) $1.94 $0.50 $2.44
<CAPTION>
LINDNER LARGE-CAP FUND
- ----------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1997 <F2> $26.39 $0.34 $2.68 $3.02 $0.37 $3.10 $3.47
1998 $25.94 $0.35 ($0.30) $0.05 $0.31 $3.48 $3.79
1999 $22.20 $0.28 ($3.41) ($3.13) $0.31 $2.74 $3.05
<CAPTION>
LINDNER SMALL-CAP FUND
- ----------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1997 <F3> $6.15 $0.04 $1.49 $1.53 $0.01 $0.00 $0.01
1998 $7.67 $0.08 $1.06 $1.14 $0.03 $0.30 $0.33
1999 $8.48 $0.08 ($0.13) ($0.05) $0.08 $0.31 $0.39
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
-----------------------------------------------------
Ratio of
Net Net
Net Asset Ratio of Investment Assets,
Value, Expenses Income to Portfolio End of
End of Total to Average Average Turnover Period (In
Period Return <F4> Net Assets Net Assets Rate Thousands)
--------- ----------- ---------- ---------- --------- ----------
LINDNER ASSET ALLOCATION FUND
- -----------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1997 <F1> $27.90 9.84% 0.85% 5.69% 40.32% <F5> $2,010
1998 $27.53 14.49% 0.88% 6.14% 28.56% $2,777
1999 $23.41 -5.74% 0.90% 7.64% 31.74% $4,143
<CAPTION>
LINDNER LARGE-CAP FUND
- ----------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1997 <F2> $25.94 15.36% 0.46% 1.29% 36.39% <F5> $102
1998 $22.20 0.08% 0.75% 1.05% 44.43% $369
1999 $16.02 -14.01% 0.85% 1.13% 53.41% $185
<CAPTION>
LINDNER SMALL-CAP FUND
- ----------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1997 <F3> $7.67 21.21% 0.59% 0.26% 49.49% <F5> $0.2
1998 $8.48 15.02% 1.31% 0.99% 24.52% $154
1999 $8.04 -0.07% 1.16% 1.44% 65.98% $1,631
<FN>
- ---------
<F1> For the period July 9, 1996 (initial purchase) to June 30, 1997.
<F2> For the period July 12, 1996 (initial purchase) to June 30, 1997.
<F3> For the period November 1, 1996 (initial purchase) to June 30, 1997.
<F4> Total return for periods of less than a year are not annualized. Total
return shows how much an investment has changed over the year shown,
assuming all dividends and capital gains are reinvested and shares are
redeemed at net asset values at the end of the year.
<F5> Annualized.
LINDNER FUNDS 16
<PAGE>
<PAGE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(FOR AN INSTITUTIONAL SHARE OUTSTANDING THROUGHOUT THE PERIOD)
INCOME (LOSS) FROM INVESTMENT OPERATIONS DISTRIBUTIONS
------------------------------------------------- ------------------------------------------
Net Realized Distributions
and from Net
Net Asset Unrealized Total Dividends Realized
Value, Net Gains from from Net Gains from
Beginning Investment (Losses) on Investment Investment Investment Total
of Period Income Investments Operations Income Transactions Distributions
--------- ---------- ------------ ---------- ---------- ------------- -------------
LINDNER UTILITY FUND
- --------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1997 <F1> $14.20 $0.27 $1.60 $1.87 $0.31 $0.02 $0.33
1998 $15.74 $0.26 $2.03 $2.29 $0.26 $0.93 $1.19
1999 $16.84 $0.19 $0.53 $0.72 $0.19 $2.41 $2.60
<CAPTION>
LINDNER MARKET NEUTRAL FUND
- ---------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1997 <F3> $8.36 $0.26 ($1.81) ($1.55) $0.14 $0.00 $0.14
1998 $6.67 ($0.16) ($0.49) ($0.65) $0.00 $0.00 $0.00
1999 $6.02 $0.23 $0.01 $0.24 $0.17 $0.00 $0.17
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
-----------------------------------------------------
Ratio of
Net Net
Net Asset Ratio of Investment Assets,
Value, Expenses Income to Portfolio End of
End of Total to Average Average Turnover Period (In
Period Return <F4> Net Assets Net Assets Rate Thousands)
--------- ----------- ---------- ---------- --------- ----------
LINDNER UTILITY FUND
- --------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1997 <F1> $15.74 14.52% 0.75% 2.42% 86.44% <F4> $54
1998 $16.84 15.23% 1.22% 1.99% 99.37% $9
1999 $14.96 7.99% 1.30% 2.70% 137.51% $0.2
<CAPTION>
LINDNER MARKET NEUTRAL FUND
- ---------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1997 <F3> $6.67 -18.61% 1.37% 4.45% 457.57% <F4> $1.6
1998 $6.02 -9.75% 1.86% 16.68% 109.32% $0.1
1999 $6.09 4.02% 0.96% 3.13% 104.92% $0.1
<FN>
- ---------
<F1> For the period October 31, 1996 (initial purchase) to June 30, 1997.
<F2> For the period July 11, 1996 (initial purchase) to June 30, 1997.
<F3> Total return for periods of less than a year are not annualized. Total
return shows how much an investment has changed over the year shown,
assuming all dividends and capital gains are reinvested and shares are
redeemed at net asset values at the end of the year.
<F4> Annualized.
</TABLE>
LINDNER FUNDS 17
<PAGE>
<PAGE>
THE FUNDS IN DETAIL
The investment objective of each Fund is a "fundamental" policy and
may not be changed without a vote by the Fund's shareholders. The
principal investment strategies for each Fund are operational
policies and may be changed by the Trust without approval by the
shareholders of a Fund. Each Fund is a "diversified" fund.
Lindner Asset Management, Inc., whose address is 7711 Carondelet
Avenue, Suite 700, St. Louis, Missouri 63105, is the investment
adviser for all of the Funds, which means that it is responsible for
managing each Fund's assets according to its investment objective
(goal) and its investment strategies. For easier reading, Lindner
Asset Management, Inc. is referred to as "Lindner Management" or the
"Adviser". Lindner Management is a professional investment advisory
firm that has been providing investment management services to the
Lindner Funds since 1993.
Concise fund-by-fund descriptions begin on the next page and provide
the following information:
* Goals and strategies of each Fund (percentages of Fund assets are
based on total assets unless otherwise indicated).
* The primary types of securities in which a Fund may invest.
The Trust's Annual Report to Shareholders includes the annual report
of the independent auditors for the Trust and the audited financial
statements of each Fund. It also includes line graphs comparing the
performance of each class of shares of each Fund to selected
broad-based securities market indices that the Adviser deems to be
appropriate, as well as a discussion of the factors which materially
affected a Fund's performance during the fiscal year ended June 30,
1999. The Trust's Annual Report is available free upon request.
LINDNER FUNDS 18
<PAGE>
<PAGE>
ASSET ALLOCATION FUND
The investment objective of the Asset Allocation Fund is to produce
current income through investments in common stocks, convertible and
non-convertible preferred stocks, corporate bonds and debt
securities issued or guaranteed by the U.S. government that provide
a yield higher than that paid on either the Standard & Poor's 500
Stock Index or on passbook savings accounts. Capital appreciation is
a secondary investment objective. To pursue this goal, the Asset
Allocation Fund may invest in any type or class of security without
regard to market capitalization size. Under normal market
conditions, the Asset Allocation Fund will invest in common stocks,
fixed income securities, securities convertible into common stocks
(such as warrants and preferred stocks) and cash equivalent
securities. The Asset Allocation Fund normally invests 45% to 60% of
its total assets in common stocks and securities convertible into
common stocks, 25% to 50% of its total assets in fixed income
securities and up to 30% of its total assets in cash equivalent
securities. These securities may be sold in unregistered "private
placements" to qualified institutional buyers ("Rule 144A
Securities").
The Adviser selects common stocks primarily for the purpose of
providing long-term capital growth, and invests predominantly in
those companies which are growth-oriented and have exhibited
consistent, above-average growth in revenues and earnings relative
to their valuations. The Asset Allocation Fund will invest the fixed
income portion of its investments in a range of interest-paying debt
securities, including corporate bonds, notes, debentures and
asset-backed securities, obligations issued or guaranteed by the
U.S. government or its agencies and securities representing
interests in pools of mortgages issued or guaranteed by the U.S.
government or its agencies. Up to 35% of the Asset Allocation Fund's
total assets may be invested in debt securities that are rated below
investment grade or are unrated ("junk bonds"). In addition to
securities of U.S. companies, the Asset Allocation Fund may invest a
portion of its assets in securities of foreign companies (including
ADRs) and in equity securities issued by real estate investment
trusts and it may invest a portion of its assets to purchase put
options for hedging purposes.
The cash equivalent securities of the Asset Allocation Fund normally
consist of short-term obligations (with maturities of 18 months or
less) consisting of domestic and foreign commercial paper, variable
rate master demand notes, bankers' acceptances, certificates of
deposit issued by domestic banks or domestic branches of foreign
banks, obligations issued by the U.S. government or its agencies and
repurchase agreements. The Asset Allocation Fund may also invest a
portion of its assets in securities issued by other investment
companies. Before you invest, please read "More About Risk" on
page 26.
For temporary defensive or emergency purposes, the Asset Allocation
Fund may invest all or a portion of its assets in short-term
securities issued by the U.S. government or its agencies and
short-term debt securities issued by U.S. corporations that are
rated in one of the four highest categories by a nationally
recognized securities rating organization. If the Fund takes a
temporary defensive position, it may not achieve its investment
objective.
LINDNER ASSET ALLOCATION FUND 19
<PAGE>
<PAGE>
LARGE-CAP FUND
The investment objective of the Large-Cap Fund is long-term capital
appreciation through investments in common stocks or securities
convertible into common stock. The production of current income is a
secondary investment objective. To pursue this goal, under normal
circumstances the Large-Cap Fund will invest at least 65% of its
total assets in common stocks and equity securities of large
capitalization U.S. companies, which are those that have a market
capitalization in the range of the Russell 1000 Index. At March 31,
1999, this range of capitalization was from $1.45 billion to $456
billion. Equity securities also include preferred stocks, securities
convertible into common stock and warrants to purchase common
stocks. Stock selection may reflect either a growth or value
investment approach. The Large-Cap Fund generally invests in between
50 to 400 companies that are diversified across sectors. The
Large-Cap Fund has tended to emphasize, or overweight, certain
sectors that the Adviser believes offers greater potential for
growth of capital at the time, such as financial services,
technology and energy stocks. These weightings may change from time
to time in the future. The Large-Cap Fund may borrow money from
banks to use for investment purposes (a practice known as
"leveraging"), which may increase the risk of loss to investors in
declining market situations.
When selecting securities for the Large-Cap Fund, the Adviser blends
quantitative and fundamental financial analyses to identify
companies with strong cash flows, secure market franchises and
revenue growth that is among the highest for the particular
industry. A strong balance sheet and strong management are other
factors that the Adviser considers. In addition to securities of
U.S. companies, the Large-Cap Fund may invest a portion of its
assets in securities of foreign companies (including ADRs) and in
debt securities and it may invest a portion of its assets to
purchase put options for hedging purposes. The Large-Cap Fund also
may invest a portion of its assets in Rule 144A Securities and in
equity securities issued by real estate investment trusts. Before
you invest, please read "More About Risk" on page 26.
For temporary defensive or emergency purposes, the Large-Cap Fund
may invest all or a portion of its assets in short-term debt
securities issued by the U.S. government or its agencies and
short-term debt securities issued by U.S. corporations that are
rated in one of the four highest categories by a nationally
recognized securities rating organization. If the Large-Cap Fund
takes a temporary defensive position, it may not achieve its
investment objective.
LINDNER LARGE-CAP FUND 20
<PAGE>
<PAGE>
SMALL-CAP FUND
The investment objective of the Small-Cap Fund is capital
appreciation. The production of current income is a secondary
investment objective. To pursue this goal, under normal
circumstances the Small-Cap Fund will invest at least 65% of its
total assets in common stocks and equity securities of U.S. small
capitalization companies, which are those having a market
capitalization in the range of the Russell 2000 Index. At March 31,
1999, this range of capitalization was from $216 million to $1.44
billion. Equity securities also includes preferred stocks,
securities convertible into common stock and warrants to purchase
common stocks. Stock selection may reflect either a growth or value
investment approach.
When choosing stocks, the Adviser used both fundamental and
quantitative financial analyses to identify companies with
outstanding management, substantial cash flows, potential for
revenue growth in both existing and new markets and a potential for
some catalyst or factor to cause the stock's price to rise. The
Small-Cap Fund generally invests in between 25 and 100 companies
that are diversified across many industries, and it may invest
substantially in certain selected sectors which the Adviser believes
will offer better opportunities for capital growth at the time. The
Fund is diversified across sectors. In addition to securities of
U.S. companies, the Small-Cap Fund may invest a portion of its
assets in securities of foreign companies (including ADRs) and in
debt securities (including up to 20% of its assets in junk bonds),
in Rule 144A Securities, in equity securities issued by real estate
investment trusts and may invest a portion of its assets to purchase
put options for hedging purposes. Before you invest, please read
"More About Risk" on page 26.
For temporary defensive or emergency purposes, the Small-Cap Fund
may invest all or a portion of its assets in short-term debt
securities issued by the U.S. Government or its agencies and
short-term debt securities issued by U.S. corporations that are
rated in one of the four highest categories by a nationally
recognized securities rating organization. If the Small-Cap Fund
takes a temporary defensive position, it may not achieve its
investment objective.
LINDNER SMALL-CAP FUND 21
<PAGE>
<PAGE>
UTILITY FUND
The Utility Fund's investment objective is to produce current income
through investments in securities of domestic and foreign public
utility companies. Capital appreciation is a secondary investment
objective. To pursue this goal, under normal circumstances the
Utility Fund will invest at least 65% of its total assets in common
stocks, securities convertible into common stocks, and
nonconvertible preferred stocks and bonds issued by domestic and
foreign regulated public utility companies, including gas, electric,
telecommunications, cable television, water and energy companies
("Utilities"), and in companies that are in businesses related to
such Utilities, such as suppliers of raw materials. Some of these
securities may be Rule 144A Securities, and up to 35% of the Utility
Fund's total assets may be invested in junk bonds.
The Utility Fund may invest in securities not currently paying
dividends or interest if the Adviser believes that the company will
begin or resume paying dividends or interest in the foreseeable
future or if the Adviser believes that such an investment will
enhance the total return for the Fund. The Adviser looks for
Utilities that it believes are undervalued but are believed to have
long-term growth prospects substantially better than the economy as
a whole. In addition to securities of Utilities, the Utility Fund
may invest a portion of its assets to purchase put options for
hedging purposes. Before you invest, please read "More About Risk"
on page 26.
For temporary defensive or emergency purposes, the Utility Fund may
invest all or a portion of its assets in short-term debt securities
issued by the U.S. government or its agencies and short-term debt
securities issued by U.S. corporations that are rated in one of the
four highest categories by a nationally recognized securities rating
organization. If the Utility Fund takes a temporary defensive
position, it may not achieve its investment objective.
LINDNER UTILITY FUND 22
<PAGE>
<PAGE>
MARKET NEUTRAL FUND
The investment objective of the Market Neutral Fund is long-term
capital appreciation in both bull and bear markets while maintaining
minimal exposure to general equity market risk by always having both
long and short positions in equity securities issued by U.S.
companies. Long positions will be held in those securities that the
Adviser has identified as undervalued and short positions will be
held in equity securities that the Adviser has identified as
overvalued. To pursue this goal, the Market Neutral Fund will invest
substantially all of its assets in common stocks, securities
convertible into common stocks without regard to quality or rating,
short positions in common stocks and securities convertible into
common stocks, and, to a limited degree, non-convertible preferred
stocks and debt securities without regard to quality or rating. Some
of these securities may be Rule 144A Securities. The Market Neutral
Fund may borrow money from banks to use for investment purposes (a
practice known as "leveraging"), which may increase the risk of loss
to investors in declining market situations.
By taking long and short positions in different securities with
similar characteristics, the Market Neutral Fund attempts to cancel
out the effect of the general stock market movements on the Fund's
performance. The Adviser will determine the size of each long and
short position in analyzing the tradeoff between the attractiveness
of each position and its impact on the risk of the overall
portfolio. The Market Neutral Fund seeks to construct a diversified
portfolio that has minimal net exposure to the U.S. equity market
generally and certain other risk factors.
The Market Neutral Fund's performance objective is to achieve a
total return in excess of the total return on the 3-month U.S.
Treasury Bill. Its performance is not expected to correlate with the
direction of any major U.S. stock market or any general stock market
index. However, the Market Neutral Fund is different from an
investment in 3-month U.S. Treasury Bills because U.S. Treasury
Bills are backed by the full faith and credit of the U.S.
Government, have a fixed rate of return and a short duration and
have no risk of losing capital. Before you invest, please also read
"More About Risk" on page 26. In addition, the short selling
activities of the Market Neutral Fund will accelerate the
recognition of gains for federal income tax purposes because any
gains on short sales are short-term capital gains for tax purposes,
taxable at ordinary income tax rates. This may increase the income
taxes paid by shareholders of the Market Neutral Fund.
For temporary defensive or emergency purposes, the Market Neutral
Fund may invest all or a portion of its assets in short-term debt
securities issued by the U.S. Government or its agencies and
short-term debt securities issued by U.S. corporations that are
rated in one of the four highest categories by a nationally
recognized securities rating organization. If the Market Neutral
Fund takes a temporary defensive position, it may not achieve its
investment objective.
LINDNER MARKET NEUTRAL FUND 23
<PAGE>
<PAGE>
OPPORTUNITIES FUND
The investment objective of the Opportunities Fund is long term
capital growth. To pursue this goal, the Opportunities Fund will
focus its investments in common stocks, and securities convertible
into common stocks, of U.S. companies that have been selected for
their growth prospects relative to their valuations. At any given
time, the Adviser may tend to buy "growth" stocks or "value" stocks,
or a combination of both types, depending on the Adviser's judgment
as to which style is currently in favor or is about to come into
favor. The Adviser may invest in stocks of companies that are
considered "small-cap," "mid-cap" or "large-cap" in terms of market
capitalization. Investments are carefully monitored and may
emphasize those industries or sectors that the Adviser believes will
offer more favorable opportunities in light of changing economic,
social and political conditions or trends. The Adviser will also
seek investment opportunities in companies involved in prospective
acquisitions, reorganizations, spin-offs, consolidations and
liquidations.
The Adviser will seek out those companies it believes have superior
management and are favorably situated to produce above-average
earnings growth over time while maintaining enough cash to finance
future growth in their businesses. In addition, the Adviser will
look for opportunities in turn-around situations and in securities
it believes to be priced substantially lower than their intrinsic
value. The Adviser does not place any emphasis on dividend or
interest income, except when it believes that this income will have
a favorable influence on the market value of a security.
The Opportunities Fund primarily invests in common stocks and
securities convertible into common stocks issued by well-known and
established companies and smaller, less well-known companies.
However, the Opportunities Fund may also invest in preferred stocks,
common stock rights or warrants, depositary receipts or debt
securities, if the Adviser believes that they offer opportunities
for growth in capital. The Opportunities Fund may invest a portion
of its assets in securities sold in unregistered "private
placements" offered to qualified institutional buyers ("Rule 144A
Securities") and may invest a portion of its assets in put options
for hedging purposes only. Before you invest, please read "More
About Risk" on page 26.
Under normal circumstances, the Opportunities Fund's portfolio
turnover rate is anticipated to be a high as 150% per year, which is
higher than the portfolio turnover rate for most equity funds. The
portfolio turnover rate is calculated by dividing the lesser of
purchases or sales of portfolio securities for the fiscal year by
the monthly average value of the portfolio securities owned during
the fiscal year. To the extent short-term trading results in the
realization of short-term capital gains, shareholders will be taxed
on such gains at ordinary income tax rates. Increased portfolio
turnover necessarily results in correspondingly higher costs
including brokerage commissions, dealer mark-ups and other
transaction costs on the sale of securities and reinvestment in
other securities, and may result in the acceleration of taxable
gains.
For temporary defensive or emergency purposes, the Opportunities
Fund may invest all or a portion of its assets in short-term debt
securities issued by the U.S. government or its agencies and
short-term debt securities issued by U.S. corporations that are
rated in one of the four highest categories by a nationally
recognized securities rating organization. If the Fund takes a
temporary defensive position, it may not achieve its investment
objective.
LINDNER OPPORTUNITIES FUND 24
<PAGE>
<PAGE>
GOVERNMENT MONEY MARKET FUND
The investment objective of the Government Money Market Fund is to
produce current income consistent with preservation of capital and
liquidity. To pursue this goal, the Government Money Market Fund
will invest exclusively in U.S. dollar-denominated debt securities
issued or guaranteed by the U.S. Government, its agencies and
instrumentalities, and in repurchase agreements secured by such
types of securities.
The Government Money Market Fund will invest in securities issued by
U.S. Government agencies or instrumentalities only when the
Subadviser is satisfied that the credit risk of the agency or
instrumentality is minimal. In addition, repurchase agreements will
have maturities of less than seven days, will be fully
collateralized and will be made only with primary securities dealers
having the higher short-term debt rating. Before you invest, please
also read "More About Risk" on page 26.
Firstar Bank, N.A., (formerly called "Star Bank, N.A.") a national
bank headquartered in Cincinnati, Ohio, serves as the Subadviser for
the Government Money Market Fund and manages its portfolio on a
day-to-day basis. Firstar Bank, N.A. currently has over $14 billion
of its own assets and manages 12 mutual funds having assets in
excess of $5 billion, including four money market funds with assets
in excess of $1.9 billion.
LINDNER GOVERNMENT MONEY MARKET FUND 25
<PAGE>
<PAGE>
MORE ABOUT RISK
A Fund's investment goal and principal strategies largely determine
its risk profile. You will find a concise description of each Fund's
risk profile in the summary under the caption "Investments, Risks
and Performance". The fund-by-fund discussions contain more
information. This section describes the various additional risks
that may affect the Funds.
The Funds may use certain investment practices that have higher
risks associated with them. However, each Fund has limitations and
policies designed to reduce many of the risks. The tables under
"Certain Investment Practices" on pages 29 and 30 describe these
practices and the limitations on their use.
The principal risks of investing in each Fund are described above
under the captions "Investment Objectives, Risks and Performance" beginning
on page 3 and under the caption "Risk Factors" beginning on page 5. The
following list provides detail about some of the other risks that
may apply to the Funds.
CURRENCY RISK
Fluctuations in exchange rates between the U.S. dollar and foreign
currencies may negatively affect an investment. Adverse changes in
exchange rates may erode or reverse any gains produced by
foreign-currency denominated investments and may increase any
losses.
EXTENSION RISK
An unexpected rise in interest rates may extend the life of a
mortgage-backed security issued by one of the U.S. government
agencies beyond the expected prepayment time, typically reducing the
security's value.
GOVERNMENT OBLIGATIONS RISK
In addition to U.S. Treasury obligations, the Funds may invest in
other securities issued or guaranteed by the U.S. government, its
agencies and instrumentalities. No assurance can be given that the
U.S. government will provide financial support to U.S.
government-sponsored agencies or instrumentalities where it is not
obligated to do so by law.
INFORMATION RISK
Key information about an issuer, security or market may be
inaccurate or unavailable.
LEGAL RISK
Lawsuits or other legal proceedings against the issuer of a security
may adversely affect the issuer, the market value of the security,
or a fund's performance.
OPERATIONAL RISK
Some countries, such as Russia, have less developed securities
markets (and related transaction, registration and custody
practices) that could subject a Fund to losses from fraud,
negligence, delay or other actions.
LINDNER FUNDS 26
<PAGE>
<PAGE>
POLITICAL RISK
Foreign governments may expropriate assets, impose capital controls
or punitive taxes, or nationalize a company or an industry. Any of
these actions could have a severe effect on security prices and
impair a Fund's ability to bring its capital or income back to the
U.S. Other political risks include economic policy changes, social
and political instability, military action and war.
PORTFOLIO TURNOVER RISK
The Adviser will not consider the portfolio turnover rate a limiting
factor in making investment decisions for a Fund. A high rate of
portfolio turnover (100% or more) involves correspondingly greater
expenses which must be borne by a Fund and its shareowners. It may
also result in higher short-term capital gains that are taxable to
shareowners. See "Financial Highlights" for the Funds' historical
portfolio turnover rates. The Government Money Market Fund may have
high portfolio turnover, but brokerage commissions are not normally
paid on money market instruments. Portfolio turnover is not expected
to have a material effect on the Government Money Market Fund's net
investment income.
PREPAYMENT RISK
This is the risk that an issuer will exercise its right to pay
principal on an obligation held by a Fund earlier than expected.
This may happen when there is a decline in interest rates. These
events may make a Fund unable to recoup its initial investment and
may result in a Fund having to reinvest the proceeds at lower rates
or reduced yields.
PUT OPTION RISK
All of the Funds except the Government Money Market Fund may invest
up to 5% of their total assets to purchase put options for hedging
purposes. By purchasing a put option, a Fund obtains the right (but
not the obligation) to sell the option's underlying instrument at a
fixed strike price. In return for this right, a Fund pays the
current market price for the option (known as the option premium). A
Fund may terminate its position in a put option by allowing it to
expire or by exercising the option. If the option is allowed to
expire, a Fund will lose the entire premium. If the option is
exercised, a Fund completes the sale of the underlying instrument at
the strike price. A Fund may also terminate a put option position by
closing it out in the secondary market at its current price, if a
liquid secondary market exists. There is no assurance a liquid
secondary market will exist for any particular option at any
particular time. If the secondary market for an option is not liquid
because of price fluctuation limits or otherwise, it could prevent
prompt liquidation of unfavorable positions, and potentially could
require a Fund to continue to hold a position until delivery or
expiration regardless of changes in its value. If a Fund buys a put
option it can expect to realize a gain if underlying security's
price falls substantially. However, if the underlying security's
price does not fall enough to offset the cost of purchasing the
option, a Fund can expect to suffer a loss (limited to the amount of
the premium, plus related transaction costs).
LINDNER FUNDS 27
<PAGE>
<PAGE>
REGULATORY RISK
Governments, agencies or other regulatory bodies may adopt or change
laws or regulations that could adversely affect the issuer, the
market value of the security, or a fund's performance.
SHORT SELLING RISK
When the Adviser anticipates that a security is overvalued it may
sell the security short and borrow the same security from a broker
or other institution to complete the transaction. Later, the
security is purchased and returned to the broker or institution from
which the original security has been borrowed. A fund will incur a
loss as a result of a short sale if the price of the borrowed
security increases between the date of the short sale and the date
on which a fund replaces such security. A fund will realize a gain
if the price declines between those two dates. There is a risk that
a fund will be unable to close out a short position at any
particular time or at an acceptable price. During the time a fund
has a short position in a security it is subject to the risk that
the lender will terminate the loan at a time when the fund is unable
to borrow the same security from another lender. In this event, a
fund may have to purchase the security at a higher price in order to
close out the short position. Although a fund's potential gain is
limited to the amount at which it sold a security short, its
potential loss is limited only by the maximum attainable price of
the security less the price at which the security was sold short.
Until a Fund replaces a borrowed security, it will maintain a
segregated account containing cash, U.S. Government securities, or
other liquid securities such that the amount deposited in the
account plus any amount deposited with the broker or other custodian
as collateral will at least equal the current market value of the
security sold short.
TAX CONSEQUENCES
The Market Neutral Fund has the side effect of accelerating the
recognition of gains for tax purposes and increasing the short-term
gain component in the Market Neutral Fund. Short-term gains are
ordinarily taxed to shareholders at ordinary income tax rates,
increasing the amount of taxes payable by shareholders.
TEMPORARY INVESTMENT RISK
Each of the Funds may, for temporary defensive purposes, invest a
certain percentage of its total assets in cash or various short-term
instruments. In particular, the Government Money Market Fund may
from time to time hold uninvested cash reserves or invest in
short-term taxable money market obligations, and the International
Fund may invest in money market securities denominated in U.S. or
foreign currencies. When a Fund's assets are invested in these
instruments, the Fund may not be achieving its investment objective.
LINDNER FUNDS 28
<PAGE>
<PAGE>
CERTAIN INVESTMENT PRACTICES
For each of the following investment practices, this table shows the
applicable limitation. These limitations may be changed from time to
time by the Board of Trustees.
KEY TO TABLE:
- --------------------------------------------------------------------
* Permitted without limitation; does not indicate actual use
% Represents an investment limitation as a percentage of total
fund assets; does not indicate actual use
+ Permitted, but not expected to be used to a significant extent
++ Not permitted at present
<TABLE>
<CAPTION>
Asset
Allocation Large-Cap Small-Cap
Fund Fund Fund
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BORROWING The borrowing of money from banks to meet
redemptions, for other temporary or emergency purposes
and for investment purposes. + 5% +
- -------------------------------------------------------------------------------------------------------
FOREIGN SECURITIES Securities of foreign issuers. May
include depositary receipts. + 25% 25%
- -------------------------------------------------------------------------------------------------------
INVESTMENT-GRADE DEBT SECURITIES Debt securities rated
within the four highest grades (AAA/Aaa through BBB/Baa)
by Standard & Poor's or Moody's Rating Service, and
unrated securities of comparable quality. 50% * *
- -------------------------------------------------------------------------------------------------------
NON-INVESTMENT-GRADE DEBT SECURITIES Debt securities and
convertible securities rated below the fourth-highest
grade (BBB/Baa) by Standard & Poor's or Moody's Rating
Service, and unrated securities of comparable quality.
Commonly referred to as junk bonds. 35% + +
- -------------------------------------------------------------------------------------------------------
PUT OPTIONS Instruments that provide a right to sell
(put) a particular security at a fixed price within a
certain time period. A fund may purchase put options for
hedging purposes only. 5% 5% 5%
- -------------------------------------------------------------------------------------------------------
REAL-ESTATE INVESTMENT TRUSTS (REITS) Pooled investment
vehicles that invest primarily in income-producing real
estate or real-estate related loans or interests. 15% 15% 15%
- -------------------------------------------------------------------------------------------------------
RESTRICTED AND OTHER ILLIQUID SECURITIES Securities with
restrictions on trading, or those not actively traded.
May include private placements and Rule 144A Securities. 15% 15% 15%
- -------------------------------------------------------------------------------------------------------
SECTOR CONCENTRATION Investing more than 25% of a fund's
net assets in a group of related industries (market
sector). Performance will largely depend upon the
sector's performance, which may differ in direction and
degree from that of the overall stock market. Financial,
economic, business, political and other developments
affecting the sector will have a greater effect on the
fund. ++ ++ ++
- -------------------------------------------------------------------------------------------------------
SECURITIES LENDING Lending portfolio securities to
financial institutions; a fund receives cash, U.S.
government securities or bank letters of credit as
collateral. + ++ +
- -------------------------------------------------------------------------------------------------------
SHORT SALES Selling borrowed securities with the
intention of repurchasing them for a profit on the
expectation that the market price will drop. + + +
- -------------------------------------------------------------------------------------------------------
</TABLE>
LINDNER FUNDS 29
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Market Government
Utility Neutral Opportunities Money Market
Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BORROWING The borrowing of money from banks
to meet redemptions or for other temporary or
emergency purposes and for investment
purposes. + 5% + ++
- ----------------------------------------------------------------------------------------------------------
FOREIGN SECURITIES Securities of foreign
issuers. May include depositary receipts. 35% + ++ ++
- ----------------------------------------------------------------------------------------------------------
INVESTMENT-GRADE DEBT SECURITIES Debt
securities rated within the four highest
grades (AAA/Aaa through BBB/Baa) by Standard
& Poor's or Moody's Rating Service, and
unrated securities of comparable quality. * * ++ ++
- ----------------------------------------------------------------------------------------------------------
NON-INVESTMENT-GRADE DEBT SECURITIES Debt
securities and convertible securities rated
below the fourth-highest grade (BBB/Baa) by
Standard & Poor's or Moody's Rating Service,
and unrated securities of comparable quality.
Commonly referred to as junk bonds. 35% + ++ ++
- ----------------------------------------------------------------------------------------------------------
PUT OPTIONS Instruments that provide a right
to sell (put) a particular security at a
fixed price within a certain time period. A
fund may purchase put options for hedging
purposes only. 5% 5% 5% ++
- ----------------------------------------------------------------------------------------------------------
REAL-ESTATE INVESTMENT TRUSTS (REITS) Pooled
investment vehicles that invest primarily in
income-producing real estate or real-estate
related loans or interests. ++ 15% + ++
- ----------------------------------------------------------------------------------------------------------
RESTRICTED AND OTHER ILLIQUID SECURITIES
Securities with restrictions on trading, or
those not actively traded. May include
private placements and Rule 144A Securities. 15% 15% 15% 10%
- ----------------------------------------------------------------------------------------------------------
SECTOR CONCENTRATION Investing more than 25%
of a fund's net assets in a group of related
industries (market sector). Performance will
largely depend upon the sector's performance,
which may differ in direction and degree from
that of the overall stock market. Financial,
economic, business, political and other
developments affecting the sector will have a
greater effect on a Fund. 65% ++ ++ ++
- ----------------------------------------------------------------------------------------------------------
SECURITIES LENDING Lending portfolio
securities to financial institutions; a fund
receives cash, U.S. government securities or
bank letters of credit as collateral. + + + ++
- ----------------------------------------------------------------------------------------------------------
SHORT SALES Selling borrowed securities with
the intention of repurchasing them for a
profit on the expectation that the market
price will drop. + 50% ++ ++
- ----------------------------------------------------------------------------------------------------------
</TABLE>
LINDNER FUNDS 30
<PAGE>
<PAGE>
MANAGEMENT OF THE TRUST
The Trust is governed by a Board of Trustees that meets regularly
throughout the year to review its activities, review contractual
arrangements with companies that provide services to the Trust, and
review each Fund's performance. The majority of Trustees are not
affiliated with the Trust. The Board of Trustees is permitted to
issue an unlimited number of full and fractional shares and to
create an unlimited number of series of shares. Information about
the Trustees and executive officers of the Trust may be found in the
SAI.
Each Fund is managed by Lindner Management, which chooses a Fund's
investments and handles its business affairs. Lindner Management is
also the Administrator, Transfer Agent, and Dividend Disbursing
Agent for the Funds. The Adviser's business address is 7711
Carondelet Avenue, Suite 700, St. Louis, Missouri 63105. The Adviser
is registered as an investment adviser and as a stock transfer agent
with the Securities and Exchange Commission. As of September 30,
1999, the Adviser managed approximately $1.2 billion of assets. All
of the Funds other than the Opportunities Fund are managed by the
Adviser's Investment Committee, which was established by the
Adviser's Board of Directors in February 1999, and no one person is
primarily responsible for making investment recommendations to the
Committee. The Investment Committee is presently comprised of Doug
T. Valassis, Chairman and Chief Executive Officer of the Adviser and
Chairman of the Trust, Mark T. Finn, Vice Chairman and Chief
Operating Officer of the Adviser, and Eric E. Ryback, President of
the Adviser and President of the Trust. Additional information about
the background and experience of these individuals is contained in
the SAI. The portfolio manager for the Opportunities Fund is Mark T.
Finn, Vice Chairman and Chief Operating Officer of the Adviser. Mr.
Finn has been the Vice Chairman and Chief Operating Officer of the
Adviser since March 1999 and has also been the Chairman of Vantage
Consulting Group, Inc., an investment consulting firm and a
registered investment adviser, for more than five years. He also
serves as a Trustee for CitiFunds, a family of mutual funds
sponsored by Citibank, N.A.
During the fiscal year ended June 30, 1999, the Trust paid the
Adviser management fees as a percentage of the average net assets of
both Classes of each Fund as follows (after giving effect to any fee
waivers):
Asset Allocation Fund 0.52%
Large-Cap Fund 0.37%
Small-Cap Fund 0.70%
Utility Fund 0.70%
Market Neutral Fund 1.01%
Government Money Market Fund 0.15%
LINDNER FUNDS 31
<PAGE>
<PAGE>
The advisory agreements with Lindner Management relating to the
Large-Cap Fund and the Opportunities Fund provide for a base
management fee equal to a percentage of average net assets of each
Fund, with adjustments upward or downward, depending on the Fund's
annual performance when compared to the annual performance of the
Russell 2000 Index (in the case of the Large-Cap Fund) or the S&P
500 Index (in the case of the Opportunities Fund). The maximum
performance bonus or performance penalty is 0.20% of average net
assets of the particular Fund, and this bonus or penalty is achieved
if the Fund's performance exceeds or falls below the particular index
by more than 12%. See the SAI for details concerning this performance
fee arrangement.
With regard to the Government Money Market Fund only, the Adviser
has entered into a Subadvisory Agreement with Firstar Bank, N.A. The
management fee of the Subadviser is paid by the Adviser. The
Subadviser was founded in 1853 and is the largest bank and trust
organization of Firstar Corporation. Firstar Bank's expertise in
trust administration, investments and estate planning makes it one
of the leading trust institutions in Ohio. Firstar Bank has managed
common trust funds since 1957. As of June 30, 1999, Firstar Bank
also managed 30 mutual funds having a market value in excess of $8.3
billion. As a part of its regular banking operations, Firstar Bank
may make loans to public companies. Thus, it may be possible from
time to time for the Fund to hold or acquire securities of companies
that are also borrowing clients of Firstar Bank. Both the Adviser
and the Subadviser believe that any such relationship will not be a
factor in the selection of portfolio securities for the Government
Money Market Fund. The Subadviser's business address is 425 Walnut
Street, Cincinnati, Ohio 45202.
PRICING OF SHARES FOR PURCHASE OR REDEMPTION
When you buy or redeem shares, the price of each share is its "net
asset value" or "NAV." Each Fund determines the NAV of shares in
each Class at the close of trading (usually 4:00 p.m., Eastern Time)
on each day on which at least one of the following markets is open:
the New York Stock Exchange, the American Stock Exchange, or the
Nasdaq Stock Market. NAV is calculated separately for each Fund by
adding the value of its securities, cash and other assets,
subtracting its liabilities, and then dividing the result by the
number of shares outstanding.
If the Fund receives your order to purchase, or your order for
redemption, prior to the closing of the New York Stock Exchange, the
Fund will process the transaction using the NAV calculated as of
that day's close of business. For purchase orders received and
shares tendered for redemption after the closing of the New York
Stock Exchange, the Fund will determine NAV as of the closing on the
following trading day.
The value of securities held by the Funds is calculated differently
for different types of securities. Investments in securities traded
on a national securities exchange or quoted on the Nasdaq National
Market System are valued at the last reported sales price as of the
close of the New
LINDNER FUNDS 32
<PAGE>
<PAGE>
York Stock Exchange. Securities for which no sale was reported on a
particular day are valued at the mean between the last reported bid
and asked prices. Securities which are traded both in the over-the-
counter market and on a stock exchange are valued according to the
broadest and most representative market. Securities and assets for
which quotations are not readily available are valued at fair value
as determined pursuant to procedures approved by the Trustees.
The value of foreign securities is converted into U.S. dollars at
the rate of exchange prevailing on the valuation date. Purchases and
sales of foreign securities as well as income and expenses related
to such securities are converted at the prevailing rate of exchange
on the respective dates of such transactions.
Portfolio securities of the Government Money Market Fund are valued
on an amortized cost basis, whereby a security is initially valued
at its acquisition cost. Thereafter, a constant straight-line
amortization is assumed each day regardless of the impact of
fluctuating interest rates. This procedure is designed to stabilize
the net asset value per share at $1.00. Under most conditions, management
of the Trust believes that this will be possible, but there can be no
assurance that they can do so on a continuous basis.
PURCHASE OF SHARES AND SHAREHOLDER INQUIRIES
You may purchase Investor Shares directly from a Fund at the per
share NAV. Institutional investors who have written distribution or
service agreements with the Trust or with Lindner Management may
purchase Institutional Shares directly from a Fund at the per share
NAV.
A Fund, at its discretion, may issue Investor Shares in exchange for
publicly traded securities. Such an exchange will result in a
taxable transaction to the person acquiring shares of a Fund. A Fund
may similarly issue Investor Shares in connection with any merger or
consolidation with or acquisition of the assets of any other
investment company or trust.
MINIMUM PURCHASE AMOUNTS
The minimum investments for the Funds are as follows:
For opening a new account:
$2,000 if you are buying Investor Shares of any Fund.
$250 if you are buying Institutional Shares of any Fund.
$250 for Individual Retirement Accounts invested in any Fund.
For existing investors opening additional accounts in either Class
of any Fund:
$500 if you maintain the minimum investment in at least one account.
LINDNER FUNDS 33
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$250 where additional accounts in any Fund will be registered as a
Uniform Gift to Minors (UGMA) or a Uniform Transfer to Minors
(UTMA).
For subsequent purchases:
$100 if you are buying shares of either Class of any Fund (except in
the case of dividend reinvestment, which has no minimum, and
automatic purchase plan investments and payroll deduction
investments, which have a $50 minimum).
ESTABLISHING A NEW ACCOUNT
In order to establish a new account with any of the Funds, you must
submit a written "Share Purchase Application" to:
Lindner Investments
P.O. Box 11208
St. Louis, Missouri 63105
If you use an overnight form of delivery (e.g. Express Mail), you
should address your application to:
Lindner Investments
7711 Carondelet Ave., Ste. 700
St. Louis, Missouri 63105
You should direct inquiries regarding any other matter to the post
office box address.
Applications to purchase shares may be rejected by the Trust and are
not binding until accepted. The Trust will not accept applications
unless they are accompanied by a check payable in U.S. dollars drawn
on a U.S. bank, savings and loan or credit union. If your check is
returned for insufficient funds, the Custodian will charge a $15 fee
against your account and you will be responsible for any loss
incurred by the Trust.
It is the Trust's policy not to accept applications under
circumstances or in amounts considered disadvantageous for
shareholders. Any accounts opened without a proper social security
number or taxpayer identification number may be liquidated and
distributed to the owner(s) of record on the first business day
following the 60th day of investment, minus any backup withholding
tax amount.
WITHHOLDING CERTIFICATION
Before the Trust will establish a new account or make registration
changes to an existing account, you must certify to the Trust on the
Share Purchase Application or on an Internal Revenue Service ("IRS")
Form W-9 your social security or taxpayer identification number and
certify that you are not subject to withholding of dividend payments
due to past under-reporting
LINDNER FUNDS 34
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of such payments. Each Fund is required by statute to withhold
31% of your distributions ("backup withholding") if:
(1) you fail to certify as to your social security or taxpayer
identification number;
(2) you fail to certify that you are not subject to withholding;
(3) the IRS notifies the Fund that you have furnished an incorrect
taxpayer identification number; or
(4) the IRS notifies the Fund that you have under reported interest
or dividends in the past.
Dividends to shareholders who are non-resident aliens may be subject
to a 30% United States withholding tax. If you are a non-resident
alien shareholder, you should consult your tax adviser about the
applicability of this withholding tax.
ADDITIONAL PURCHASES
You may buy additional Fund shares in the following ways:
BY MAIL
Fill-out the remittance slip that is attached to your account
confirmation statement, or write a letter indicating that you would
like to purchase shares of either Class of any Fund. Please indicate
the name(s) in which the account is registered and the account
number. Include a check payable to "Lindner Investments" and mail
to:
Lindner Investments
P.O. Box 640672
Cincinnati, Ohio 45264-0672.
BY AUTOMATED CLEARING HOUSE (ACH)
You may request purchase of shares by Automated Clearing House
(ACH), a free electronic transfer service that is used by thousands
of individuals and corporations. It takes 15 days from the date we
receive your request to establish ACH. Once ACH is in place, you may
call or write to purchase shares via ACH. Your bank account will be
debited for ACH purchases on the day of your order, and therefore
ACH purchases should not exceed the current value of your bank
account. Please make sure that the funds are available. A fee will
be applied to all returned ACH purchases. Call Customer Service at
(800) 995-7777 for a form to establish ACH services. (See also
"Automatic Investment Plan" and "Payroll Deduction".)
BY WIRE
You may purchase additional shares by wiring the amount of a
purchase to the Trust's domestic custodian, Firstar Bank, N.A. Prior
to sending a wire, call the Customer Service Department at
(800) 995-7777. The wire must be received by 4:00 p.m., Eastern Time
to receive that business
LINDNER FUNDS 35
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day's closing price. Your bank may charge a fee to wire funds. For
purchases under $1,000, we will deduct any fee from the money wired.
BY TELEPHONE
If you elect to establish telephone privileges with the Trust on
your Share Purchase Application, you may buy additional shares, in
an amount not to exceed the current balance in your account, by
calling the Trust at (800) 995-7777. Payment must be received no
later than five business days after the date on which the purchase
was made. If payment is not received within the time required, the
order will be subject to cancellation and you will be responsible
for any loss incurred.
The Trust will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. So long as we
follow these procedures, Lindner Management and the Trust will not
be liable for losses, costs, or expenses for acting upon your
telephone instructions, and Lindner Management will have authority,
as agent, to redeem shares in your account to cover any such loss.
As a result of this policy, you will bear the risk of any loss
unless we have failed to follow these procedures.
ADDITIONAL INFORMATION ABOUT INVESTMENTS IN THE FUNDS
Once you have mailed, telephoned or otherwise transmitted investment
instructions to the Trust, they may not be modified or canceled. The
Trust cannot accept investments specifying a certain price or date
and will not honor such requests.
The Transfer Agent will send you a confirmation after each
transaction affecting your account. Dividend payments and
reinvestments are shown on your quarterly consolidated statement.
You should bring any discrepancies to the Transfer Agent's attention
within 30 days of receipt. The Transfer Agent will provide a listing
of your account history, upon receipt of a written request signed by
all account owners and a $25.00 fee for each account researched.
Checks should be payable to "Lindner Asset Management." All requests
are completed on a first-come, first-served basis. Due to extreme
volume during certain times of the year, requests for account
histories may take two to three weeks for delivery.
ISSUING CERTIFICATES
Certificates will not be issued for shares unless requested in
writing. Certificates will be issued for full shares only and cannot
be issued to a third party. Certificates are not available for IRA
accounts or for shares in the Government Money Market Fund. You
cannot redeem or exchange certificated shares unless you surrender
the certificates to the Trust.
LINDNER FUNDS 36
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PURCHASING THROUGH THIRD PARTIES
You may purchase shares of a Fund through certain broker-dealers,
financial institutions or other service providers ("Processing
Intermediaries") who have been authorized to accept purchase and
redemption orders on behalf of the Funds.
When you buy shares of a Fund in this way, the Processing
Intermediary, rather than you, may be the shareholder of record. The
Trust will be deemed to have received a purchase or redemption order
when the Processing Intermediary receives the order. Broker-dealers
or other financial institutions may be liable to you for any losses
arising from their failure to timely communicate purchase orders to
the Trust.
A purchase or redemption order made through a Processing
Intermediary will be priced at a Fund's NAV next computed after the
order is received by the Processing Intermediary. Processing
Intermediaries may use procedures and impose restrictions in
addition to or different from those applicable to shareholders who
invest in a Fund directly. If you intend to invest in a Fund through
a Processing Intermediary you should read the program materials
provided by the Processing Intermediary in conjunction with this
Prospectus.
Processing Intermediaries may charge fees or other charges for the
services they provide to their customers. If you do not wish to
receive the services of a Processing Intermediary, or pay the fees
that may be charged for such services, you may want to consider
investing directly with a Fund. You may make direct purchases or
sales of Fund shares without a sales or redemption charge.
AUTOMATIC INVESTMENT PLAN (INVESTOR SHARES ONLY)
If you own Investor Shares of the Funds, you may invest a specific
amount of money on an automatic basis by authorizing the Funds to
automatically withdraw money from your bank account on a designated
date or dates during the month. You must invest at least $50 for
each automatic investment. You may request to participate in the
automatic investment plan by writing:
Lindner Investments
P.O. Box 11208
St. Louis, Missouri 63105
You should also direct any questions or inquiries regarding the plan
to this address or by calling us as (800) 995-7777. If you want to
change or discontinue your automatic investment plan, you must
notify Lindner Investments in writing at least 15 days prior to the
next scheduled investment date.
LINDNER FUNDS 37
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PAYROLL DEDUCTION (INVESTOR SHARES ONLY)
Many employers provide for payroll deduction allowing you to direct
a portion of your pay to the investment option of your choice via
ACH. Lindner Investments will accept your direct deposit in amounts
of at least $100 for the purchase of Investor Shares in any of the
Funds. If you want to use payroll deduction to invest, request the
proper instructions that will be given to your employer from:
Lindner Investments
P.O. Box 11208
St. Louis, Missouri 63105
You should also direct any questions or inquiries regarding the plan
to this address or by calling us as (800) 995-7777. You should also
find out what prior notice your employer requires if you want to
change or discontinue your payroll deduction choice.
REDEMPTION OF SHARES
You may sell all or any part of your shares to a Fund for
redemption. The Trust redeems shares at the NAV per share as next
computed after either (a) a written request is received "in good
order" at the office of the Trust or (b) a telephone request is
received by a Fund by a shareholder who has established Telephone
Privileges.
The redemption price is the NAV next computed after the time when
the Fund receives your written request in good order. During the
period prior to the time shares are redeemed, dividends on such
shares accrue and are payable, and you are entitled to exercise all
other rights of beneficial ownership. Once you have requested a
redemption, you may not modify or cancel it. The value of shares on
redemption may be more or less than their original cost, depending
on the market value of the portfolio securities at the time of
redemption.
In the case of recently purchased shares, proceeds will not be
remitted until the Trust is satisfied that checks given in payment
of shares being redeemed have cleared, which may take up to 15 days.
You may redeem shares in the following ways:
BY MAIL
By mailing a written request addressed to:
Lindner Investments
P.O. Box 11208
St. Louis, MO 63105
LINDNER FUNDS 38
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A written redemption request is "in good order" if it:
(1) is properly endorsed by all registered shareholders in the exact
names in which the shares are registered;
(2) is accompanied by properly endorsed share certificates, if any
have been issued; and
(3) states the following:
* the name of the Fund,
* the account number,
* the exact name(s) of the shareholder(s) in which the account
is registered as shown on the latest confirmation, and
* the number of shares or dollar amount to be redeemed.
The following redemption requests must be in writing and must have
signatures guaranteed (including the signatures on any share
certificate) by a bank, trust company, savings and loan
association, or a member of a national stock exchange (a notary
public is not an acceptable guarantor):
(1) redemptions on accounts that have requested an address change
within the preceding two months;
(2) redemptions for which the proceeds are to be sent to someone
other than the registered shareholder(s) and/or to an address other
than the address of record; or
(3) redemptions for which the proceeds are to be wired and the wire
instructions are different than those previously submitted.
The following redemptions must be in writing, but do not require a
signature guarantee (unless one of the above circumstances applies):
(1) all IRA accounts; and
(2) redemptions of shares for which certificates have been issued.
IRA account redemptions must also be accompanied by Internal Revenue
Service ("IRS") Form W-4P. IRA redemption requests not accompanied
by Form W-4P will be subject to withholding. Additional
documentation may be required from corporations, executors,
administrators, trustees, or guardians.
If you have questions about which documents or instructions are
necessary in order to redeem shares, please write, or call the Trust
at (800) 995-7777.
BY TELEPHONE
You may call the Trust at (800) 995-7777 to request that the
proceeds be mailed to the you, provided that you have previously
established Telephone Privileges with the Funds and have not
requested an address change in the preceding two months. The Trust
reserves the right to refuse
LINDNER FUNDS 39
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<PAGE>
telephone redemptions and may limit the dollar amount or the number of
telephone redemptions. IRA accounts may not be redeemed by telephone.
The Trust will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. If we follow
such procedures, Lindner Management and the Trust will not be liable
for losses, costs, or expenses for acting upon your telephone
instructions or for any unauthorized telephone redemption. As a
result of this policy, you will bear the risk of any loss unless we
have failed to follow these procedures.
REDEMPTION FEE
Each Fund other than the Government Money Market Fund charges a 2%
fee if you redeem shares within 60 days after purchase. This means
that the amount payable on redemption will be reduced by 2%. This
fee is not charged on redemptions made under a systematic withdrawal
plan (see "Systematic Withdrawal Plan"). The amount of this fee
remains as an asset of the Fund which has charged it, and it does
not benefit the Adviser. This redemption fee was reinstated by the
Board of Trustees of the Trust, effective October 1, 1998. The Trust
may waive this redemption fee, at the sole discretion of the
Adviser.
REDEMPTION THROUGH THIRD PARTIES
If you redeem shares through Processing Intermediaries, those
entities may charge a service fee. Processing Intermediaries may use
procedures and impose restrictions in addition to or different from
those applicable to shareholders who invest in a Fund directly. You
should read the program materials provided by the Processing Intermediary.
A Processing Intermediary has the responsibility of submitting a redemption
request to the Trust prior to a Fund's next determination of NAV in order
to obtain the redemption price that would be applicable if the request had
been placed directly with the Trust. A Processing Intermediary may be liable
to an investor for any losses arising from their failure to timely deliver
redemption requests to the Trust.
DISBURSEMENT METHODS
BY MAIL
The Trust will normally disburse payment by check within five days
after receiving your request for redemption. A charge of $15 will be
deducted from your account if you request the check to be sent by
overnight delivery.
The Trust may postpone the date of payment for redeemed shares, or
the Trust's obligation to redeem shares may be suspended for:
(1) any period during which the New York Stock Exchange is closed or
trading is restricted;
(2) any period during which an emergency exists which makes it
impracticable for the Trust to sell a Fund's securities or to fairly
determine the value of a Fund's net assets; or
LINDNER FUNDS 40
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(3) such other periods as the SEC may order for the protection of
shareholders.
BY WIRE TRANSFER
You may obtain the proceeds of a redemption by a bank wire transfer
if you have previously established Wire Privileges with the Trust.
Under normal circumstances, your proceeds will be posted to your
bank account the business day following the date of the redemption.
If the proceeds are wired to an account at a bank that is not a
member of the Federal Reserve System, there could be a delay in
crediting the funds to the bank account. A charge of $10 per wire
will be deducted from the amount being wired.
BY AUTOMATED CLEARING HOUSE ("ACH")
You may obtain the proceeds of a redemption by ACH if you have
previously established ACH Privileges with the Trust. Under normal
circumstances, proceeds will be posted to your bank account the
evening of the second business day following the date of the
redemption. There are no fees for this service.
INVOLUNTARY REDEMPTION
In an attempt to reduce expenses, partly attributable to maintaining
small accounts, the Trust reserves the right to redeem, upon 30
days' written notice, all of your shares if your account has a NAV
of less than $2,000. You may prevent involuntary redemption by making
additional investments during the 30-day notice period that increase
the value of your account to this minimum amount.
CHECKING PRIVILEGES (GOVERNMENT MONEY MARKET FUND ONLY)
Upon request, the Government Money Market Fund will provide each
shareholder who maintains a minimum balance of $5,000 with checks
drawn on the Government Money Market Fund that clear through Firstar
Bank, N.A., Cincinnati, Ohio. This privilege does not constitute a
banking function, and owning Government Money Market Fund shares is
not equivalent to a bank checking account. When such a check is
presented for payment, a sufficient number of whole and fractional
shares in your account in the Government Money Market Fund will be
redeemed to cover the amount of the check. Checks may only be written
for $500 or more.
If you wish to use this method of redemption you must complete and
file an authorization form which is available upon request. You
should receive an initial supply of checks within three weeks of
filing the form. If you bought the shares to be redeemed by check,
the Fund may delay sending you the proceeds only until such time as
it is reasonably assured that good payment has been collected for
the purchase of such shares, which may be up to 15 days.
LINDNER FUNDS 41
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The Government Money Market Fund may refuse to honor checks whenever
the right of redemption has been suspended or postponed or whenever
the account is otherwise impaired. The Fund will charge a $15
service fee when a check is presented to redeem shares of the
Government Money Market Fund in excess of the value of your account
in the Government Money Market Fund. There is no other fee for using
checks.
EXCHANGING AN INVESTMENT FROM ONE FUND TO ANOTHER
Subject to any applicable minimum initial investment requirements,
you may exchange Investor Shares of one Fund for Investor Shares of
any other Fund, and you may exchange Institutional Shares of one
Fund for Institutional Shares of any other Fund. Before exchanging
shares, you should read the current prospectus describing the shares
to be acquired. The exchange privilege is not designed to afford
shareholders a way to play short-term swings in the market. Lindner
Investments is not suitable for that purpose. The Trust reserves the
right to limit the amount and frequency of exchanges between Funds
in circumstances it deems disadvantageous to the Funds.
BY TELEPHONE
You may exchange shares by phone by calling us at (800) 995-7777 if
you have established Telephone Privileges with the Trust and the
account registrations and options (for example, automatic
reinvestment of dividends) are identical.
BY MAIL
You may direct the Trust in writing to exchange shares. If the
shares are owned by two or more persons, the request should be
signed by each person. All signatures should be exactly as the name
appears in the registration. Send your directions to Lindner
Investments, P.O. Box 11208, St. Louis, MO 63105.
ADDITIONAL INFORMATION ABOUT SHARE EXCHANGES
* If the shares being surrendered for exchange are represented by a
certificate, you must return the certificate to Lindner Management
before the conversion can be made.
* Once you have made an exchange request by telephone or mail, it is
irrevocable and you may not modify or cancel it.
* The value of the shares surrendered and the value of the shares
acquired are the NAVs of such shares next computed after receipt of
an exchange order.
* Shares may not be exchanged unless you have furnished the Trust
with the correct tax identification number and the certification
required by the Internal Revenue Code and Regulations. See
"Withholding Certification."
LINDNER FUNDS 42
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* An exchange of shares is, for federal income tax purposes, a sale
of the shares, on which you may realize a taxable gain or loss.
* If the request is made by a corporation, partnership, trust,
fiduciary, agent or unincorporated association, Lindner Management
will require evidence satisfactory to it of the authority of the
individual signing the request.
* Under most circumstances, a bank, broker or benefit plan
administrator that owns Institutional Shares of a Fund for the
benefit of participants in a tax qualified retirement plan (such as
a 401(k) Plan) may not permit participants in such plan to exchange
Institutional Shares of a Fund for Investor Shares of that Fund or
any other Fund.
SYSTEMATIC WITHDRAWAL PLAN (INVESTOR SHARES ONLY)
A systematic withdrawal plan is available to you if you hold
Investor Shares of a Fund whose total account value is at least
$15,000 and you wish to withdraw fixed amounts of money from that
Fund on a systematic basis. Withdrawals must be in amounts of $100
or more and may be made monthly or quarterly, at an annual rate not
exceeding 40% of the value of your Investor Shares at the inception
of your systematic withdrawal plan. If you participate in a
systematic withdrawal plan, you may still make additional
redemptions whenever you wish.
Under a systematic withdrawal plan, the Fund redeems Investor Shares
as of the close of the first business day following the twentieth
day of each month in which a withdrawal is made. Each redemption of
Shares will result in a gain or loss that you must report on your
income tax return. Establishing a systematic withdrawal account
constitutes an election by you to reinvest into the Fund all income
dividends and capital gains distributions payable on your account.
To participate in the systematic withdrawal plan you must sign a
form we will provide upon request and deposit any stock certificates
subjected to the plan. You may request to participate in the
systematic withdrawal plan and ask questions about it by writing to:
Lindner Investments
P.O. Box 11208
St. Louis, Missouri 63105
You may terminate the systematic withdrawal plan at any time by
written notice to the Funds.
INDIVIDUAL RETIREMENT ACCOUNTS ("IRAS") (INVESTOR SHARES ONLY)
IRAs are available to employed (including self-employed) persons and
their non-employed spouses. All contributions to an IRA Plan are
invested in Investor Shares of the Fund you select. You will be
charged an annual administrative fee of $10 per IRA account, which
you may pay separately by check.
LINDNER FUNDS 43
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Contributions to an IRA must be post-marked no later than the due
date of the tax return (without extensions) for the contribution
year for which the contribution is being made. You must request
withdrawals from an IRA in writing and include IRS Form W-4P with
your request. IRA redemption requests not accompanied by Form W-4P
will be subject to income tax withholding.
Firstar Bank, N.A., serves as Custodian for IRAs. The Custodian's
fee and other information about IRAs are disclosed in documents
including a Disclosure Statement that you must obtain from the Funds
before investing in an IRA. You should consult your tax advisor
regarding the appropriateness of investing in an IRA. Address written
requests for applications to establish an IRA to:
Lindner Investments
P.O. Box 11208
St. Louis, Missouri 63105
DIVIDENDS, DISTRIBUTIONS AND TAXES
PAYMENT OF DIVIDENDS AND DISTRIBUTIONS
* Record Date: the date the Fund identifies its "shareholders of
record" (shareholders entitled to receive the fund's dividend and/or
capital gains distribution).
* Ex-Dividend Date: the date the dividend is deducted from the
Fund's NAV. Also, the date dividends and/or capital gains are
posted. This is normally the day after the Record Date.
* Payment Date (Payable Date): the date dividends and/or capital
gains distributions are paid to shareholders.
The Large-Cap Fund, the Small-Cap Fund, the Opportunities Fund and
the Market Neutral Fund declare annual dividends from net investment
income each December. The Asset Allocation Fund and the Utility Fund
distribute substantially all of their net investment income in
quarterly dividends generally declared in March, June, September and
December, within 15 days after the respective record dates. All of
these Funds distribute net realized capital gains, if any, in
December.
Dividends paid by each Class of these Funds are calculated at the
same time and in the same manner, except that the expenses
attributable solely to either the Investor Shares or to the
Institutional Shares will be borne solely by that Class.
Institutional Shares receive lower per share dividends than Investor
Shares because of the higher expenses borne by the Institutional
Shares. See "Fund Expenses" and "Distribution and Service Plan".
For the Government Money Market Fund, at the end of each business
day that the New York Stock Exchange and the Federal Reserve Banks
are open, the Fund's net investment income is
LINDNER FUNDS 44
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declared as a daily dividend to shareholders. Shareholders receive
dividends in additional shares of the Government Money Market Fund
unless they elect to receive cash. Reinvestment or payment of
dividends is done monthly at the NAV of the Government Money Market
Fund on the date paid. If you request cash payment, checks are mailed
within five business days after the last day of each month.
The Funds may declare additional dividends from net investment
income and from net realized capital gains in December. If a Fund
declares a dividend and/or a capital gain distribution in October,
November, or December and it is made payable during January of the
following year, such payment is considered taxable income to the
shareholder on December 31 of the year in which the dividend or
distribution was declared.
Each Fund automatically reinvests dividends and capital gain
distributions in Fund shares at the NAV determined on the day
following the record date for such dividends or distributions,
unless you provide written notice by the record date indicating your
intention to receive such dividend or distribution in cash.
EFFECT OF DIVIDENDS AND DISTRIBUTIONS ON NAV
Any dividends or capital gains distributions paid shortly after you
buy shares in a Fund will have the effect of reducing the per share
NAV of your shares by the amount of the dividends or distributions.
All or a portion of such dividends or distributions, although in
effect a return of capital, are subject to taxes, which may be at
ordinary income tax rates.
FEDERAL TAXATION OF DIVIDENDS AND DISTRIBUTIONS
Each Fund is not liable for federal income taxes to the extent it
distributes its taxable income. Additionally, each Fund intends to
distribute substantially all capital gains and ordinary income and
thus avoid imposition of excise taxes.
You are generally liable for federal income taxes on the income
dividends and capital gains distributions of each Fund (whether or
not reinvested in the Fund).
Distributions are taxable as ordinary income to the extent derived
from a Fund's investment income. Distributions of net capital gains
may be taxable at different rates depending upon how long the Fund
has held the assets. Distributions of capital gains are taxable to
you based on how long a Fund has held a security, not on how long
you have owned the Fund shares.
DIVIDENDS RECEIVED DEDUCTION
Each Fund will furnish, upon request, a confirmation to corporate
shareholders reflecting the amount of dividends which do not qualify
for the 70% dividends received deduction. None of the Government
Money Market Fund's net investment income is expected to be derived
from
LINDNER FUNDS 45
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dividends, therefore, no part of any distribution from that Fund will
be eligible for the dividends received deduction.
OTHER TAX CONSEQUENCES
In addition to the federal income tax consequences described above,
there may be other federal, state or local tax considerations
applicable to the circumstances of a particular investor. You are
urged to consult your tax advisor about the effect of your
investment in a Fund on your tax situation. You should also review
with your tax adviser the effect of investments by the Government
Money Market Fund in repurchase agreements; several states treat the
income received by a mutual fund from repurchase agreements as
income from sources other than securities of the United States
Government or its agencies or instrumentalities, and such income may
be subject to state income or intangibles taxes.
The foregoing discussion of tax consequences is based on tax laws
and regulations in effect on the date of this Prospectus, which are
subject to change by legislative or administrative action.
DISTRIBUTION AND SERVICE PLAN (INSTITUTIONAL SHARES ONLY)
For its Institutional Class shares only, each Fund has a
Distribution and Service Plan ("Distribution Plan") pursuant to Rule
12b-1 under the 1940 Act. The Distribution Plan provides that
Institutional Shares of each Fund may pay distribution and other
shareholder service related expenses of up to 0.25% each year of the
average net assets allocated to Institutional Shares.
Because these fees are paid out of the Funds' assets on an ongoing
basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales
charges. Payments pursuant to the Distribution Plan may be made only
to reimburse expenses incurred during a rolling 12-month period,
subject to the annual limitation.
LINDNER FUNDS 46
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NOTES
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LINDNER FUNDS 47
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You can find additional information about the Lindner Funds in its
Annual and Semi-Annual Reports to Shareholders and in the Statement
of Additional Information ("SAI"). The Annual and Semi-Annual Reports
to Shareholders include financial statements, detailed performance
information, portfolio holdings, management's discussion of Fund
performance, market conditions and investment strategies and, in the
Annual Report only, the auditor's report. The SAI contains more detailed
information on all aspects of the Funds and is incorporated by reference
in (legally considered to be part of) this Prospectus. To request a free
copy of the current Annual or Semi-Annual Report to Shareholders or the
current SAI, or to obtain other information about a Fund, write or call:
LINDNER INVESTMENTS
7711 Carondelet Avenue, Suite 700
St. Louis, Missouri 63105
Phone:(800) 995-7777
Fax: (314) 727-9306
Internet Website:
http://www.lindnerfunds.com
You can visit the SEC's Internet Web site (http://www.sec.gov) to
view the SAI, material incorporated by reference, and other
information. You can also obtain copies by visiting the SEC's Public
Reference Room in Washington DC. Call 1-800-SEC-0330 for information
on the operation of the Public Reference Room.
PROSPECTUS DATED
OCTOBER 15, 1999
Lindner Logo
Investor Shares Ticker Symbols
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LINDNER ASSET
ALLOCATION FUND: LDDVX
LINDNER LARGE-CAP
FUND: LDNRX
LINDNER SMALL-CAP
FUND: LDRSX
LINDNER UTILITY FUND: LDUTX
LINDNER MARKET
NEUTRAL FUND: LDNBX
Lindner Opportunities Fund Investor Shares and Institutional Shares
for the other Funds do not yet have ticker symbols
Investment Company Act File No. 811-7932
INVESTMENT ADVISER AND TRANSFER AGENT:
Lindner Asset Management, Inc.
CUSTODIANS:
Firstar Bank, N.A.
The Chase Manhattan Bank
COUNSEL:
Dykema Gossett PLLC
INDEPENDENT AUDITORS:
Deloitte & Touche LLP
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PART B
LINDNER INVESTMENTS
STATEMENT OF ADDITIONAL INFORMATION
for
INVESTOR SHARES
and
INSTITUTIONAL SHARES
of
LINDNER ASSET ALLOCATION FUND
LINDNER LARGE-CAP FUND
LINDNER SMALL-CAP FUND
LINDNER UTILITY FUND
LINDNER MARKET NEUTRAL FUND
and
INVESTOR SHARES
of
LINDNER OPPORTUNITIES FUND
LINDNER GOVERNMENT MONEY MARKET FUND
This Statement of Additional Information ("Statement of Additional
Information" or "SAI") is not a Prospectus and should be read in
conjunction with the Lindner Investments (the "Trust") Prospectus dated
October 15, 1999, which incorporates this SAI by reference (i.e.,
legally makes this a part of the Prospectus). Because this Statement of
Additional Information is not itself a prospectus, no investment in
shares of the Fund should be made solely upon the information contained
herein. Copies of the Prospectus may be obtained by writing Lindner
Investments at 7711 Carondelet Avenue, P.O. Box 11208, St. Louis,
Missouri 63105, or by calling (800) 995-7777.
The Annual Report to Shareholders of Lindner Investments for the fiscal
year ended June 30, 1999, which has been distributed to shareholders of
each Fund pursuant to Section 30(d) of the Investment Company Act of
1940, is hereby incorporated into this Statement of Additional
Information by reference. Copies of this Annual Report will be provided
without charge with this Statement of Additional Information.
October 15, 1999
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TABLE OF CONTENTS
PAGE
LINDNER INVESTMENTS AND THE FUNDS 3
Lindner Investments 3
The Funds 3
DEFINITIONS 3
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS 4
Lindner Asset Allocation Fund 4
Lindner Large-Cap Fund 5
Lindner Small-Cap Fund 6
Lindner Utility Fund 6
Lindner Market Neutral Fund 7
Lindner Government Money Market Fund 8
Investment Policies and Restrictions 10
Common Investment Techniques and Types of Securities 12
General; Portfolio Turnover 20
MANAGEMENT OF THE TRUST 20
Compensation 22
Code of Ethics 22
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES 23
INVESTMENT ADVISORY AND OTHER SERVICES 24
Controlling Persons 24
Services Provided by Adviser 24
Adviser Compensation 25
Subadviser (Government Money Market Fund) 28
Transfer Agent 29
Administrator 30
Distribution and Service Plan 30
Custodians and Independent Auditors 32
BROKERAGE ALLOCATION 32
PURCHASE, REDEMPTION AND PRICING OF SECURITIES 34
All Funds Other Than Government Money Market Fund 35
Government Money Market Fund 35
ADDITIONAL PERFORMANCE INFORMATION 36
All Funds Other Than Government Money Market Fund 36
Government Money Market Fund 37
FINANCIAL STATEMENTS 38
CERTAIN OTHER MATTERS 39
Liability of Trustees and Others 39
Description of Series and Shares 39
Registration Statement 40
APPENDIX--DESCRIPTION OF BOND RATINGS 41
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LINDNER INVESTMENTS AND THE FUNDS
LINDNER INVESTMENTS
Lindner Investments (the "Trust") is an unincorporated business trust
organized under the laws of Massachusetts under a Declaration of Trust
dated July 20, 1993. The Declaration of Trust permits the Board of
Trustees of Lindner Investments to issue an unlimited number of full and
fractional shares of beneficial interest, to create an unlimited number
of series of shares and to create an unlimited number of classes of one
or more series of shares. Each series, or fund, of the Trust represents
a separate portfolio of securities and other assets with its own
investment objectives and policies. The assets and liabilities of each
fund belong only to, and are borne only by, that particular fund and no
other fund. The Trust presently offers shares of beneficial interest in
seven separate series: Lindner Asset Allocation Fund, Lindner Large-Cap
Fund, Lindner Small-Cap Fund, Lindner Utility Fund, Lindner Market
Neutral Fund, Lindner Government Money Market Fund and Lindner
Opportunities Fund (the "Funds").
THE FUNDS
Each Fund is classified as an open-end, no-load management investment
company under the 1940 Act, commonly known as a "mutual fund." Each
Fund is a "diversified" mutual fund, which means that with respect to
75% of a Fund's total assets, that Fund will not purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities) if, as a result,
(a) more than 5% of the Fund's total assets would be invested in the
securities of that issuer, or (b) the Fund would hold more than 10% of
the outstanding voting securities of that issuer.
DEFINITIONS
For purposes of this Statement of Additional Information, the reader
should assume that the terms defined below have the meanings indicated,
unless the context requires otherwise.
"Administration Agreements" means the Administrative Service Agreement
dated as of May 20, 1996 and the Administration Agreement dated as of
July 23, 1999, each of which is between the Trust and the Adviser, which
pertain to the Government Money Market Fund and the Opportunities Fund,
respectively, together with any amendments.
"Adviser" or "Lindner Management" means Lindner Asset Management, Inc.,
a corporation organized and existing under the laws of the State of
Michigan, having its principal offices at 7711 Carondelet Avenue, P.O.
Box 11208, St. Louis, Missouri 63105.
"Advisory Contracts" means the Advisory and Service Contracts dated as
of September 23, 1993, December 29, 1994, and June 28, 1995, the
Advisory Contracts dated as of May 20, 1996, and April 1, 1998, and the
Advisory Agreement dated as of July 23, 1999, each of which is between
the Trust and the Adviser, together with any amendments.
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"Agency Agreements" means the Agency Agreement, dated September 23,
1993, as amended, and the Transfer Agency Agreements dated as of May 20,
1996, April 1, 1998 and July 23, 1999, each of which is between the
Trust and Lindner Management, together with any amendments.
"Class" means either the class of Investor Shares or the class of
Institutional Shares of each Fund other than the Government Money Market
Fund and the Opportunities Fund.
"Fund" means each of Lindner Asset Allocation Fund, Lindner Large-Cap
Fund, Lindner Small-Cap Fund, Lindner Utility Fund, Lindner Market
Neutral Fund, Lindner Government Money Market Fund and Lindner
Opportunities Fund, each of which has been established by the Trust a
separate series.
"Prospectus" means the Prospectus of the Trust dated October 15, 1999.
"Trust" means Lindner Investments, a business trust organized and
existing under the laws of the Commonwealth of Massachusetts, having its
principal offices at 7711 Carondelet Avenue, P.O. Box 11208, St. Louis,
Missouri 63105.
"1940 Act" means the federal Investment Company Act of 1940, as amended.
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
The investment objectives of each Fund are described below. Differences
in investment objectives and policies and practices among the Funds,
differences in the degree of acceptable risk, tax considerations and the
judgment of the portfolio manager are among the factors that can be
anticipated to affect the investment return of each Fund. As a result
of such differences, the performance results of each Fund may differ
even though more than one Fund may utilize similar investment
techniques. Each Fund's investment objective is a fundamental
investment policy and may not be changed without the approval of the
holders of a majority of the outstanding shares of each Fund, which is
defined in the 1940 Act to mean the lesser of (a) 67% of the shares of
the Fund at a meeting at which more than 50% of the shares are present
in person or by proxy or (b) more than 50% of the outstanding shares of
the Fund.
LINDNER ASSET ALLOCATION FUND
The investment objective of the Asset Allocation Fund is to produce
current income through investments in common stocks, convertible and
non-convertible preferred stocks, corporate bonds and securities issued
or guaranteed by the U.S. government that provide a yield higher than
that paid on either the Standard & Poor's 500 Stock Index or on passbook
savings accounts. Capital appreciation is a secondary investment
objective. To pursue this goal, the Asset Allocation Fund may invest in
any type or class of security without regard to market capitalization
size. Under normal market conditions, the Asset Allocation Fund will
invest in common stocks, fixed income securities, securities convertible
into common stocks (such as warrants and preferred stocks) and cash
equivalent securities. The Asset Allocation
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Fund normally invests 45% to 60% of its total assets in common stocks
and securities convertible into common stocks, 25% to 50% of its total
assets in fixed income securities and up to 30% of its total assets in
cash equivalent securities. These securities may be sold in
unregistered "private placements" to qualified institutional buyers
("Rule 144A Securities").
The Adviser selects common stocks for the Asset Allocation Fund
primarily for the purpose of providing long-term capital growth, and
invests predominantly in those companies which are growth-oriented and
have exhibited consistent, above-average growth in revenues and
earnings. The Asset Allocation Fund will invest the fixed income
portion of its investments in a range of interest-paying debt
securities, including corporate bonds, notes, debentures and asset-
backed securities, obligations issued or guaranteed by the U.S.
government or its agencies and securities representing interests in
pools of mortgages issued or guaranteed by the U.S. government or its
agencies. Up to 35% of the Asset Allocation Fund's total assets may be
invested in debt securities that are rated below investment grade or are
unrated ("junk bonds"). See "Common Investment Techniques and
Securities - High Risk, High Yield, Lower-Rated Debt Securities." In
addition to securities of U.S. companies, the Asset Allocation Fund may
invest a portion of its assets in securities of foreign companies
(including ADRs) and in securities issued by real estate investment
trusts and it may invest a portion of its assets to purchase put options
for hedging purposes.
The cash equivalent securities of the Asset Allocation Fund normally
consist of short-term obligations (with maturities of 18 months or less)
consisting of domestic and foreign commercial paper, variable rate
master demand notes, bankers' acceptances, certificates of deposit
issued by domestic banks or domestic branches of foreign banks,
obligations issued by the U.S. government or its agencies and repurchase
agreements. The Asset Allocation Fund may also invest a portion of its
assets in securities issued by other investment companies.
For temporary defensive or emergency purposes, the Asset Allocation Fund
may invest all or a portion of its assets in short-term debt securities
issued by the U.S. government or its agencies and short-term debt
securities issued by U.S. corporations that are rated in one of the four
highest categories by a nationally recognized securities rating
organization. If the Fund takes a temporary defensive position, it may
not achieve its investment objective.
LINDNER LARGE-CAP FUND
The investment objective of the Large-Cap Fund is long-term capital
appreciation through investments in common stocks or securities
convertible into common stock. The production of current income is a
secondary investment objective. To pursue this goal, under normal
circumstances the Large-Cap Fund will invest at least 65% of its total
assets in common stocks and equity securities of large capitalization
U.S. companies, which are those that have a market capitalization in the
range of the Russell 1000 Index. At March 31, 1999, this range of
capitalization was from $1.45 billion to $456 billion. Equity
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securities also includes preferred stocks, securities convertible into
common stock and warrants to purchase common stocks. Stock selection
may reflect either a growth or value investment approach. The Large-Cap
Fund generally invests in between 50 to 400 U.S. companies that are
diversified across sectors. The Large-Cap Fund has tended to emphasize,
or overweight, certain sectors that the Adviser believes offer greater
potential for growth of capital at the time, such as financial services,
technology and energy stocks. These weightings may change from time to
time. The Large-Cap Fund may borrow money from banks to use for
investment purposes (a practice know as "leverage"), which may increase
the risk of loss to investors in declining market situations.
When selecting securities for the Large-Cap Fund, the Adviser blends
quantitative and fundamental financial analyses to identify companies
with strong cash flows, secure market franchises and revenue growth that
is among the highest for the particular industry. A strong balance
sheet and strong management are other factors that the Adviser
considers. In addition to securities of U.S. companies, the Large-Cap
Fund may invest a portion of its assets in securities of foreign
companies (including ADRs), in debt securities and it may invest a
portion of its assets to purchase put options for hedging purposes. The
Large-Cap Fund also may invest a portion of its assets in Rule 144A
Securities and in equity securities issued by real estate investment
trusts.
For temporary defensive or emergency purposes, the Large-Cap Fund may
invest all or a portion of its assets in short-term debt securities
issued by the U.S. Government or its agencies and short-term debt
securities issued by U.S. corporations that are rated in one of the four
highest categories by a nationally recognized securities rating
organization. If the Large-Cap Fund takes a temporary defensive
position, it may not achieve its investment objective.
LINDNER SMALL-CAP FUND
The investment objective of the Small-Cap Fund is capital appreciation.
The production of current income is a secondary investment objective.
To pursue this goal, under normal circumstances the Small-Cap Fund will
invest at least 65% of its total assets in common stocks and equity
securities of U.S. small capitalization companies, which are those
having a market capitalization in the range of the Russell 2000 Index.
At March 31, 1999, this range of capitalization was from $216 million to
$1.44 billion. Equity securities also includes preferred stocks,
securities convertible into common stock and warrants to purchase common
stocks. Stock selection may reflect either a growth or value investment
approach.
When choosing stocks, the Adviser uses both fundamental and quantitative
financial analyses to identify companies with outstanding management,
substantial cash flows, potential for revenue growth in both existing
and new markets and a potential for some catalyst or factor to cause the
stock's price to rise. The Fund generally invests in between 25 and 100
companies that are diversified across many industries, and it may invest
substantially in certain selected sectors which the Adviser believes
will offer better opportunities for
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capital growth at the time. The Fund is diversified across sectors. In
addition to securities of U.S. companies, the Small-Cap Fund may invest
a portion of its assets in securities of foreign companies (including
ADRs) and in debt securities (including up to 20% of its assets in junk
bonds), in Rule 144A Securities, in equity securities issued by real
estate investment trusts and it may invest a portion of its assets to
purchase put options for hedging purposes.
For temporary defensive or emergency purposes, the Small-Cap Fund may
invest all or a portion of its assets in short-term debt securities
issued by the U.S. Government or its agencies and short-term debt
securities issued by U.S. corporations that are rated in one of the four
highest categories by a nationally recognized securities rating
organization. If the Small-Cap Fund takes a temporary defensive
position, it may not achieve its investment objective.
LINDNER UTILITY FUND
The Utility Fund's investment objective is to produce a current income
through investments in securities of domestic and foreign public utility
companies. Capital appreciation is a secondary investment objective.
To pursue this goal, under normal circumstances the Utility Fund will
invest at least 65% of its total assets in common stocks, securities
convertible into common stocks, and nonconvertible preferred stocks and
bonds issued by domestic and foreign regulated public utility companies,
including gas, electric, telecommunications, cable television, water and
energy companies ("Utilities"), and in companies that are in businesses
related to such Utilities, such as suppliers of raw materials. Some of
these securities may be Rule 144A Securities and up to 35% of the
Utility Fund's total assets may be invested in junk bonds.
The Utility Fund may invest in securities not currently paying dividends
or interest if the Adviser believes that the company will begin or
resume paying dividends or interest in the foreseeable future. The
Adviser looks for Utilities that it believes are undervalued for
identifiable reasons not considered to be fundamental, and Utilities
that are believed to have long-term growth prospects substantially
better than the economy as a whole. In addition to securities of
Utilities, the Utility Fund may invest a portion of its assets to
purchase put options for hedging purposes.
For temporary defensive or emergency purposes, the Utility Fund may
invest all or a portion of its assets in short-term debt securities
issued by the U.S. Government or its agencies and short-term debt
securities issued by U.S. corporations that are rated in one of the four
highest categories by a nationally recognized securities rating
organization. If the Utility Fund takes a temporary defensive position,
it may not achieve its investment objective.
LINDNER MARKET NEUTRAL FUND
The investment objective of the Market Neutral Fund is long-term capital
appreciation in both bull and bear markets while maintaining minimal
exposure to general equity market risk by always having both long and
short positions in equity securities issued by U.S.
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companies. Long positions will be held in those securities that the
Adviser has identified as undervalued and short positions will be held
in equity securities that the Adviser has identified as overvalued. To
pursue this goal, the Market Neutral Fund will invest substantially all
of its assets in common stocks, securities convertible into common
stocks without regard to quality or rating, short positions in common
stocks and securities convertible into common stocks, and, to a limited
degree, non-convertible preferred stocks and debt securities without
regard to quality or rating. Some of these securities may be Rule 144A
Securities. The Market Neutral Fund may borrow money from banks to use
for investment purposes (a practice know as "leverage"), which may
increase the risk of loss to investors in declining market situations.
By taking long and short positions in different securities with similar
characteristics, the Market Neutral Fund attempts to cancel out the
effect of the general stock market movements on the Fund's performance.
The Adviser will determine the size of each long and short position in
analyzing the tradeoff between the attractiveness of each position and
its impact on the risk of the overall portfolio. The Market Neutral
Fund seeks to construct a diversified portfolio that has minimal net
exposure to the U.S. equity market generally and certain other risk
factors.
The Market Neutral Fund's performance objective is to achieve a total
return in excess of the total return on the 3-month U.S. Treasury Bill.
Its performance is not expected to correlate with the direction of any
major U.S. stock market or any general stock market index. However, the
Market Neutral Fund is different from an investment in 3-month U.S.
Treasury Bills because U.S. Treasury Bills are backed by the full faith
and credit of the U.S. Government, have a fixed rate of return and a
short duration and have minimal risk of losing capital. In addition,
the short selling activities of the Market Neutral Fund will accelerate
the recognition of gains for federal income tax purposes because any
gains on short sales are short-term capital gains for tax purposes,
taxable at ordinary income tax rates. This may increase the income
taxes paid by shareholders of the Market Neutral Fund.
For temporary defensive or emergency purposes, the Market Neutral Fund
may invest all or a portion of its assets in short-term debt securities
issued by the U.S. Government or its agencies and short-term debt
securities issued by U.S. corporations that are rated in one of the four
highest categories by a nationally recognized securities rating
organization. If the Market Neutral Fund takes a temporary defensive
position, it may not achieve its investment objective.
LINDNER OPPORTUNITIES FUND
The investment objective of the Opportunities Fund is long term capital
growth. To pursue this goal, the Opportunities Fund will focus its
investments in common stocks, and securities convertible into common
stocks, of U.S. companies that have been selected for their growth
prospects relative to their valuations, without regard to market
capitalization size. At any given time, the Adviser may tend to buy
"growth" stocks or "value" stocks of companies with small,
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medium or large capitalizations, or a combination of both types,
depending on the Adviser's judgment as to which styles or sectors are
currently in favor or are about to come into favor. The Adviser will
seek out those companies it believes have superior management and are
favorably situated to produce above-average earnings growth over time
while maintaining enough cash to finance future growth in their
businesses. Investments are carefully monitored and may emphasize those
industries or sectors that the Adviser believes will offer more
favorable opportunities in light of changing economic, social and
political conditions or trends. The Adviser will also seek investment
opportunities in companies involved in prospective acquisitions,
reorganizations, spin-offs, consolidations and liquidations. In
addition, the Adviser will look for opportunities in turn-around
situations and in securities it believes to be priced substantially
lower than their intrinsic value. The Adviser does not place any
emphasis on dividend or interest income, except when it believes that
this income will have a favorable influence on the market value of a
security.
The Opportunities Fund primarily invests in common stocks and securities
convertible into common stocks issued by well-known and established
companies and smaller, less well-known companies. However, the
Opportunities Fund may also invest in preferred stocks, common stock
rights or warrants, depositary receipts or debt securities, if the
Adviser believes that they offer opportunities for growth in capital
value. The Opportunities Fund may invest a portion of its assets in
Rule 144A Securities and may invest a portion of its assets in put
options for hedging purposes.
For temporary defensive or emergency purposes, the Opportunities Fund
may invest all or a portion of its assets in short-term debt securities
issued by the U.S. government or its agencies and short-term debt
securities issued by U.S. corporations that are rated in one of the four
highest categories by a nationally recognized securities rating
organization. If the Opportunities Fund takes a temporary defensive
position, it may not achieve its investment objective.
LINDNER GOVERNMENT MONEY MARKET FUND
The investment objective of the Government Money Market Fund is to
produce current income consistent with preservation of capital and
liquidity. To pursue this goal, the Government Money Market Fund will
invest exclusively in United States dollar-denominated obligations. The
dollar-weighted average maturity of the Government Money Market Fund
will not exceed 90 days, and all securities purchased will have a
maturity of 397 days or less at the time of acquisition (except for
securities underlying certain repurchase agreements and certain variable
rate and floating rate instruments). Normally, the Government Money
Market Fund will hold securities to maturity but may dispose of any
instrument if the Adviser deems the action appropriate because of
redemption requirements, reduction in credit quality, a reduction in the
instrument's rating, or other reasons. Even though most securities are
expected to be held to maturity, the fact that they will have maturities
of 397 days or less will result in high portfolio turnover. The
Government Money Market Fund seeks to
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maintain a constant $1.00 per share net asset value, although this
cannot be assured.
The Government Money Market Fund will invest in short-term securities
issued or guaranteed by the United States Government, its agencies and
instrumentalities and in repurchase agreements secured by such
securities. These include issues of the United States Treasury, such as
bills, notes and bonds, and issues of agencies and instrumentalities of
the U.S. Government which are established under the authority of an Act
of Congress. Issues of such agencies and instrumentalities may include,
for example, securities issued by the Government National Mortgage
Association, the Tennessee Valley Authority, the Farmers Home
Administration, Federal Home Loan Banks, Federal Intermediate Credit
Banks, Federal Land Banks, Federal Housing Administration, the Federal
National Mortgage Association, the Federal Home Loan Mortgage
Corporation and the Student Loan Marketing Association. Some of these
securities, such as U.S. Treasury bills, notes and bonds, are supported
by the full faith and credit of the U.S. Treasury; others, such as
obligations of the Federal National Mortgage Association, are not full
faith and credit obligations of the U.S. Treasury but are supported to a
limited extent by the discretionary authority of the U.S. Treasury to
make loans to the issuer; and others, such as securities issued by the
Federal Home Loan Banks, are sponsored by the U.S. Government but are
supported only by the credit of the instrumentality itself. No
assurance can be given that the U.S. Government would provide financial
support to its sponsored instrumentalities if it is not obligated to do
so by law. The Government Money Market Fund will invest in the
securities of such an instrumentality only when it is satisfied that the
credit risk with respect to such instrumentality is minimal. The
Government Money Market Fund does not invest in obligations insured by
the Federal Deposit Insurance Corporation.
The Government Money Market Fund may also engage in repurchase agreement
transactions, and its investment portfolio may from time to time consist
entirely of securities subject to repurchase agreements. Under the
terms of a typical repurchase agreement, the Fund will acquire an
underlying debt obligation for a relatively short period (usually not
more than one week) subject to an obligation of the seller to
repurchase, and the fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the holding period.
This arrangement results in a fixed rate of return that is not subject
to market fluctuations during the holding period.
The Government Money Market Fund may enter into repurchase agreements
with respect to its portfolio securities with brokers, dealers, and
commercial banks, and will engage in such transactions only with
institutions included on the Federal Reserve System's list of
institutions, commonly referred to as "primary dealers", with whom the
Federal Reserve open market desk will do business. Repurchase
agreements are considered loans collateralized by the underlying
securities. The Government Money Market Fund will not invest more than
20% of its net assets in repurchase agreements with any one primary
dealer. Under each repurchase agreement the selling institution will be
required to maintain the value of the securities subject to the
repurchase agreement at not less than 102% of their
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repurchase price. Repurchase agreements could involve certain risks in
the event of default or insolvency of the other party, including
possible delays or restrictions upon the Government Money Market Fund's
ability to dispose of the underlying securities. The Adviser, acting
under the supervision of the Trustees, reviews the credit-worthiness of
institutions with whom the Government Money Market Fund enters into
repurchase agreements to evaluate these risks, and also monitors the
status of repurchase agreements to insure that the value of the
collateral equals or exceeds 102% of the amount of the repurchase
obligation and in the event of a shortfall takes such action as it deems
appropriate (which may include a demand for additional collateral from
the selling institution and will include such a demand if the value of
the collateral has fallen below 100% of the amount of the repurchase
obligation).
This fund may also lend its portfolio securities to brokers, dealers,
and financial institutions provided that cash or cash equivalent
collateral, or letters of credit to the extent permitted by law, equal
to at least 100% of the market value of the securities loaned, is
maintained by the borrower. Any loans of portfolio securities will be
made according to guidelines established by the Securities and Exchange
Commission and the Trust's Board of Trustees.
INVESTMENT POLICIES AND RESTRICTIONS
The following investment policies and restrictions supplement those set
forth in the Prospectus. Unless otherwise noted, whenever an investment
policy or restriction states a maximum percentage of a Fund's assets
that may be invested in any security or other asset, or sets forth a
policy regarding quality standards, such standard or percentage
limitation will be determined at the time of the Fund's acquisition of
such security or other asset. Accordingly, any subsequent change in
values, net assets, or other circumstances will not be considered when
determining whether the investment complies with the Fund's investment
policies and restrictions.
Fundamental Investment Policies and Restrictions
The following investment policies and restrictions are matters of
fundamental policy and may not be changed without the approval of the
holders of the lesser of (a) 67% of the shares of the Fund at a meeting
at which more than 50% of the shares are present in person or by proxy
or (b) more than 50% of the outstanding shares of the Fund.
1. Each Fund may borrow money from banks of up to 5% of net
assets for temporary or emergency purposes, and not for
investment leveraging. Each Fund, other than the Government
Money Market Fund, may also borrow money or issue senior
securities and use such borrowings for investment purposes
in amounts up to 33-1/3% of its total assets at the time of
a borrowing (including the amounts borrowed), and pledge its
assets to the extent required by any lender or holder of
senior securities (including purchases of securities on
margin). However, as a non-fundamental operating policy,
the Board of Trustees has imposed a restriction on such
borrowings of not more than 5% of a Fund's total assets.
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This operating restriction may be changed by the Board of
Trustees without approval or action by the shareholders of
the affected Fund or Funds.
2. The Funds will not underwrite securities of other issuers,
except when a Fund may be deemed to be an underwriter as
defined in the Securities Act of 1933 in connection with the
disposition of a restricted security or a Rule 144A
security.
3. None of the Funds will invest more than 25% of its total
assets in securities issued by companies in the same
industry, except that the Utility Fund under normal
circumstances will invest at least 65% of its total assets
in securities issued by Utilities.
4. None of the Funds will purchase or sell commodities or
commodity contracts.
5. None of the Funds will purchase or sell interests in real
estate (including limited partnership interests) or
interests in real estate mortgage loans, except that each
Fund other than the Utility Fund and the Government Money
Market Fund may invest up to 15% of its total assets in
securities representing interests in real estate investment
trusts ("REITs") whose shares are listed for trading on a
national securities exchange or eligible to be quoted in the
Nasdaq Stock Market.
6. The Funds will not make loans to other persons, other than
loans of portfolio securities. For purposes of this
restriction, the purchase of notes, bonds or other evidence
of indebtedness, or the entry into repurchase agreements are
not considered loans.
7. None of the Funds other than the Opportunities Fund (for
which a similar investment restriction is non-fundamental)
will purchase illiquid securities in excess of 15% of net
assets (10% of net assets in the case of the Government
Money Market Fund) at the time of purchase, or securities
whose sale would not be permitted without registration under
the Securities Act of 1933 (the "1933 Act"), other than
securities qualifying as Rule 144A Securities under the 1933
Act. For purposes of this restriction, illiquid securities
include indebtedness of companies originally incurred in
connection with a loan from a bank, insurance company or
other financial institution, mortgage derivative Interest
Only securities and repurchase agreements with maturities of
more than seven days.
8. The Asset Allocation Fund, Large-Cap Fund, Small-Cap Fund,
Utility Fund and Market Neutral Fund may not invest more
than 25% of their total assets in Rule 144A Securities. The
Government Money Market Fund will not invest in Rule 144A
Securities.
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9. None of the Funds will purchase securities of any issuer if
immediately thereafter more than 5% of its total assets at
market would be invested in the securities of any one
issuer, other than the U.S. Government, its agencies or
instrumentalities.
10. The Opportunities Fund may not mortgage or pledge any of its
assets, except to the extent necessary to effect permitted
borrowings; this limitation does not prohibit escrow,
collateral or margin arrangements in connection with the
purchase of put options.
Operating (Non-Fundamental) Investment Policies and Restrictions
The following investment policies and restrictions have been approved by
the Board of Trustees as operating policies, which mean that the Board
of Trustees may change any or all of these policies without a vote or
approval by the shareholders of the Fund or Funds affected by the policy
or restriction:
1. None of the Funds other than the Market Neutral Fund will
make short sales of securities unless at the time of such
short sale the Fund owns or has the right to acquire, as the
result of the ownership of convertible or exchangeable
securities or a pending merger or acquisition (and without
payment of additional consideration) an approximately equal
amount of such securities that it will retain so long as the
Fund is in a short position (commonly known as short sales
"against the box"). If such a pending merger or acquisition
does not occur, or if a Fund disposes of such convertible or
exchangeable securities, the Fund will cover the short
position at the soonest possible time consistent with
prudence. The Market Neutral Fund intends to make short
sales even if it does not own or have the right to acquire
the underlying security.
2. The Asset Allocation Fund, Large-Cap Fund, Small-Cap Fund,
Utility Fund, Market Neutral Fund and Opportunities Fund may
invest up to 5% of total assets in the purchase of put
options for hedging purposes only, not for speculative
purposes. None of the Funds may sell put nor may they
purchase or write ("sell") call options or any combination
of put and call options.
3. The Opportunities Fund does not intend to purchase any
security if, as a result, more than 15% of its net assets
would be invested in securities that are deemed to be
illiquid because they are subject to legal or contractual
restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at
approximately the prices at which they are valued.
4. The Opportunities Fund does not intend to purchase
securities on margin, except to the extent that the Fund may
make use of leverage (borrowings) and is required to pledge
securities as collateral for such borrowings, and except
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that the Fund may obtain such short-term credits as are
necessary for the clearance of transactions.
COMMON INVESTMENT TECHNIQUES AND TYPES OF SECURITIES
The following information contains more detailed information about types
of investments in which a Fund may invest, investment strategies that
the Adviser may employ in pursuit of a Fund's investment objective and a
summary of the related risks.
COMMON STOCK. Common stock represents an equity or ownership interest
in a company. In the event a company is liquidated or declares
bankruptcy, the claims of owners of bonds and preferred stock take
precedence over the claims of those who own common stock.
PREFERRED STOCK. Preferred stock is a class of equity or ownership in a
company that pays dividends at a specified rate and that has precedence
over common stock in the payment of dividends. In the event an issuer
is liquidated or declares bankruptcy, the claims of owners of debt
securities (such as bonds, notes or debentures) take precedence over the
claims of those who own preferred and common stock.
DEBT SECURITIES. Debt securities are used by issuers to borrow money.
The issuer usually pays a fixed, variable or floating rate of interest,
and must repay the amount borrowed at the maturity of the security.
Some debt securities are sold at a discount from their face values.
Debt securities include corporate bonds, notes and debentures, debt
obligations issued by the U.S. government or its agencies or by state
and local governmental authorities, and mortgage and other asset-backed
securities issued by certain U.S. governmental agencies.
CONVERTIBLE SECURITIES. Convertible securities are bonds, debentures,
notes, preferred stocks or other securities that may be converted or
exchanged (by the holder or by the issuer) into shares of the underlying
common stock (or cash or securities of equivalent value) at a stated
exchange ratio. A convertible security may also be called for
redemption or conversion by the issuer after a particular date and under
certain circumstances (including a specified price) established upon
issue. If a convertible security held by a fund is called for
redemption or conversion, the fund could be required to tender it for
redemption, convert it into the underlying common stock, or sell it to a
third party. Convertible securities generally have less potential for
gain or loss than common stocks. Convertible securities generally
provide yields higher than the underlying common stocks, but generally
lower than comparable non-convertible securities. Because of this
higher yield, convertible securities generally sell at prices above
their "conversion value," which is the current market value of the stock
to be received upon conversion. The difference between this conversion
value and the price of convertible securities will vary over time
depending on changes in the value of the underlying common stocks and
interest rates. When the underlying common stocks decline in value,
convertible securities will tend not to decline to the same extent
because of the interest or dividend payments and the repayment of
principal at maturity for certain types of convertible securities.
However, securities that are convertible other than at the option of the
holder generally do not limit the potential for loss to the same extent
as securities convertible at the option of the holder. When the
underlying common stocks rise in value, the value of convertible
securities may also be expected to increase. At the same time, however,
the difference
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between the market value of convertible securities and their conversion
value will narrow, which means that the value of convertible securities
will generally not increase to the same extent as the value of the
underlying common stocks. Because convertible securities may also be
interest-rate sensitive, their value may increase as interest rates fall
and decrease as interest rates rise. Convertible securities are also
subject to credit risk, and are often lower-quality securities.
INVESTMENT-GRADE DEBT SECURITIES. Investment-grade debt securities are
medium and high-quality debt securities. Some may possess speculative
characteristics and may be more sensitive to economic changes and to
changes in the financial conditions of issuers. A debt security is
considered to be investment-grade if it is rated at least BBB by Moody's
Investors Service or the equivalent by Standard & Poor's, or is unrated
but considered to be of equivalent quality by the Adviser.
HIGH-RISK, HIGH-YIELD, LOWER-RATED DEBT SECURITIES ("JUNK BONDS"). All
of the Funds other than the Government Money Market Fund anticipate that
a portion of their assets will be invested in lower-rated,
high-yield/high-risk securities rated BB or lower by S&P or Ba or lower
by Moody's that have poor protection of payment of principal and
interest. See the Appendix to this Statement of Additional Information
for a description of these ratings. These securities often are
considered to be speculative and to involve greater risk of default or
price changes due to changes in the issuer's credit-worthiness. Market
prices of these securities may fluctuate more than higher-rated debt
securities and may decline significantly in periods of general economic
difficulty which may follow periods of rising rates. While the market
for junk bonds has been in existence for many years and has weathered
previous economic downturns, the market has experienced an increase in
the large-scale use of such securities to fund highly leveraged
corporate acquisitions and restructurings. Accordingly, past experience
may not provide an accurate indication of future performance of the junk
bond market, especially during periods of economic recession. These
junk bonds are subject to certain risks that may not be present with
investments in higher grade securities, including the following:
* Youth and Growth of High Yield Bond Market. Recently, many
issuers have been affected by adverse economic and market
conditions. It should be recognized that an economic
downturn is likely to have a negative effect on the junk
bond market and on the value of junk bonds held by the
Funds, as well as on the ability of the issuers to repay
principal and interest on their borrowings.
* Sensitivity to Interest Rate and Economic Changes. Although
prices of junk bonds may be less sensitive to interest rate
changes than higher-rated investments, junk bonds are
generally more sensitive to adverse economic changes or
individual corporate developments. During a strong economic
downturn or a substantial period of rising interest rates,
highly leveraged issuers may experience financial stress
that would adversely affect their ability to service their
principal and interest payment obligations, to meet
projected business goals, and to obtain additional
financing. Accordingly, there could be a higher incidence
of default. This would adversely affect the value of junk
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bonds and a Fund's net asset value. In addition, if the
issuer of a security defaulted, the Funds might incur
additional expenses to seek recovery. Periods of economic
uncertainty also increase volatility of market prices of
junk bonds and a Fund's resulting net asset value.
* Payment Expectations. Generally, when interest rates rise,
the value of bonds, including junk bonds, tends to decrease;
when interest rates fall, the value of bonds tends to
increase. If an issuer of a high-yield security containing
a redemption or call provision exercises either provision in
a declining interest rate market, the Funds would have to
replace the security, which could result in a decreased
return for holders of shares in the Funds. Conversely, if a
Fund were to experience unexpected net redemptions in a
rising interest rate market, they might be forced to sell
certain securities, regardless of investment merit. This
could result in decreasing the assets to which a Fund's
expenses could be allocated and a reduced rate of return for
the Fund.
* Liquidity and Valuation. Junk bonds are typically traded
among a smaller number of broker-dealers rather than in a
broad secondary market. Purchasers of junk bonds tend to be
institutions, rather than individual investors, a factor
that further limits the secondary market. To the extent
that no established retail secondary market exists, many
junk bonds may not be as liquid as higher-grade bonds. The
ability of a Fund to value or sell junk bonds will be
adversely affected to the extent that such securities are
thinly traded or illiquid. During such periods, there may
be less reliable objective information available and,
therefore, the responsibility of the Trust's Board of
Trustees to value junk bonds becomes more difficult, with
judgment playing a greater role.
Since the risk of default is higher for junk bonds, the Adviser's
research and credit analysis are an integral part of managing securities
of this type that are held by the Funds. In considering investments for
the Funds, the Adviser attempts to identify those issuers of junk bonds
whose financial condition is adequate to meet future obligations, has
improved, or is expected to improve in the future. The Adviser's
analysis focuses on relative values based on such factors as interest or
dividend coverage, asset coverage, earnings prospects, and the
experience and managerial strength of the issuer. In addition, the
Funds may chose, at their expense or in conjunction with others, to
pursue litigation or otherwise exercise their rights as holders of debt
securities if they determine this course of action to be in the best
interest of their shareholders.
FOREIGN INVESTMENTS. Foreign investments can involve significant risks
in addition to the risks inherent in U.S. investments. The value of
securities denominated in or indexed to foreign currencies, and of
dividends and interest from such securities, can change significantly
when foreign currencies strengthen or weaken relative to the U.S.
dollar. Foreign securities markets generally have less trading volume
and less
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liquidity than U.S. markets, and prices on some foreign markets can be
highly volatile. Many foreign countries lack uniform accounting and
disclosure standards comparable to those applicable to U.S. companies,
and it may be more difficult to obtain reliable information regarding an
issuer's financial condition and operations. In addition, the costs of
foreign investing, including withholding taxes, brokerage commissions,
and custodial costs, are generally higher than for U.S. investments.
Foreign markets may offer less protection to investors than U.S.
markets. Foreign issuers, brokers, and securities markets may be
subject to less government supervision. Foreign security trading
practices, including those involving the release of assets in advance of
payment, may involve increased risks in the event of a failed trade or
the insolvency of a broker-dealer, and may involve substantial delays.
It also may be difficult to enforce legal rights in foreign countries.
Foreign investing also involves political and economic risks. Foreign
investments may be adversely affected by actions of foreign governments,
including exploration or nationalization of assets, confiscatory
taxation, restrictions on U.S. investment or on the ability to
repatriate assets or convert currency into U.S. dollars, or other
government intervention. There may be a greater possibility of default
by foreign governments or foreign government-sponsored enterprises.
Investments in foreign countries also involve a risk of local political,
economic, or social instability, military action or unrest, or adverse
diplomatic developments. No assurance can be given that the Adviser
will be able to anticipate or counter these potential events.
These risks generally are magnified by investments in developing
countries. Developing countries may have relatively unstable
governments, economies based on only a few industries, and securities
markets that trade a small number of securities. The Funds may invest
in foreign securities that impose restrictions on transfer within the
U.S. or to U.S. persons. Although securities subject to transfer
restrictions may be marketable abroad, they may be less liquid than
foreign securities of the same class that are not subject to such
restrictions. American Depository Receipts and European Depository
Receipts ("ADRs" and "EDRs") are certificates evidencing ownership of
shares of a foreign-based issuer held in trust by a banker or similar
financial institution. Designed for use in U.S. and European securities
markets, respectively, ADRs and EDRs are alternatives to the purchase of
the underlying securities in their national markets and currencies.
For the Utility Fund, holdings in foreign securities will be limited to
35% of total assets, including a limit of 10% of total assets in
securities primarily traded in the markets of any one country. As
operating policies, the Large-Cap Fund and the Small-Cap Fund may invest
up to 25% of total assets in foreign securities; however, these
limitations are not fundamental policies and may be changed without the
consent of the holders of the majority of the Fund's outstanding voting
securities.
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SECURITIES LENDING. Each of the Funds, other than the Utility Fund and
the Government Money Market Fund, may lend portfolio securities to
certain institutional borrowers of securities and may invest the cash
collateral and obtain additional income or receive an agreed upon amount
of interest from the borrower. Loans will generally be short-term.
Loans are subject to termination at the option of a Fund or the
borrower. The Funds may pay reasonable fees in connection with a loan
and may pay a negotiated portion of the interest earned on the cash or
equivalent collateral to the borrower or placing broker. Because there
may be delays in the recovery of securities loaned, or even a loss of
rights in collateral supplied should the borrower fail financially,
loans will be made only to parties whose credit-worthiness is deemed
satisfactory by the Adviser. In addition, securities loans will only be
made if, in the judgment the Adviser, the consideration to be earned
from such loans would justify the risk. The Utility Fund and the
Government Money Market Fund may not lend portfolio securities to
others.
The Adviser understands that it is the current view of the SEC staff
that the Funds may engage in securities loan transactions only under the
following conditions: (1) the Funds must receive 100% collateral in the
form of cash, cash equivalents (e.g., U.S. Treasury bills or notes) or
other high grade liquid debt instruments from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) exceeds the value of the
collateral; (3) after giving notice, the Funds must be able to terminate
the loans at any time; (4) the Funds must receive reasonable interest on
the loans or flat fees from the borrower, as well as amounts equivalent
to any dividends, interest, or other distributions on the securities
loans and to any increase in market value; (5) the Funds may pay only
reasonable custodian fees in connection with the loans; (6) the Board of
Trustees must be able to vote proxies on the securities loaned, either
by terminating the loans or by entering into alternative arrangements
with the borrower; and (7) the Board of Trustees makes arrangements to
vote or consent with respect to a material event affecting the
securities on loan. Cash received through loan transactions may be
invested in any security in which the Funds are authorized to invest.
Investing this cash subjects that investment, as well as the security
loaned, to market risks.
LEVERAGE. As described above, each Fund other than the Government Money
Market Fund has the ability to borrow money and use the borrowings for
investment purposes ("leverage"). Leveraging creates an opportunity for
increased net income and capital appreciation but, at the same time,
creates special risk considerations. For example, leveraging may
exaggerate changes in the net asset value of a Fund's shares and in the
yield on a Fund's portfolio. Although the principal of such borrowings
will be fixed, a Fund's assets may change in value during the time the
borrowing is outstanding. Leveraging will create interest expense for
the Fund which can exceed the income from the assets retained. To the
extent the income derived from securities purchased with borrowed funds
exceeds the interest a Fund will have to pay, the Fund's net income will
be greater than if leveraging were not used. Conversely, if the income
from the assets retained with borrowed monies is not sufficient to cover
the cost of leveraging, the
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net income of the Fund will be less than if leveraging were not used,
and therefore the amount available for distribution to stockholders as
dividends will be reduced.
Borrowing may not exceed the limits established from time to time by the
Board of Trustees. If, due to market fluctuations or other reasons, a
Fund must sell securities to repay borrowings, the Fund may have to do
so at a time when it is disadvantageous.
ILLIQUID INVESTMENTS. Each Fund other than the Government Money Market
Fund may invest a portion of assets in illiquid investments. Illiquid
investments are investments that cannot be sold or disposed of in the
ordinary course of business at approximately the prices at which they
are valued. Difficulty in selling securities may result in a loss or
may be costly to the Fund. Under the supervision of the Board of
Trustees, the Adviser determines the liquidity of investments and,
through reports from the Adviser, the Board monitors trading activity in
illiquid investments. In determining the liquidity of investments, the
Adviser may consider various factors, including (i) the frequency of
trades and quotations, (ii) the number of dealers and prospective
purchasers in the marketplace, (iii) dealer undertakings to make a
market, (iv) the nature of the security, and (v) the nature of the
marketplace for trades (including any demand, put or tender features,
the mechanics and other requirements for transfer, any letters of credit
enhancement features, any ratings, the number of holders, the method of
soliciting offers, the time required to dispose of the security, and the
ability to assign or offset a Fund's rights and obligations relating to
the investment). Investments currently considered to be illiquid
include over-the-counter options, non-government stripped fixed-rate
mortgage-backed securities, Interest Only mortgage derivative securities
and any other restricted or foreign securities determined by the Adviser
to be illiquid. In the absence of market quotations, illiquid
investments are priced at fair value as determined in good faith by the
Board of Trustees. If through a change in values, net assets, or other
circumstances, a Fund were in a position where more than the permitted
percentage of its net assets were invested in illiquid securities, it
would seek to take appropriate steps to protect liquidity.
RESTRICTED SECURITIES. Restricted securities are subject to legal
restrictions on their sale. Difficulty in selling securities may result
in a loss or be costly to a Fund. Restricted securities generally can be
sold in privately negotiated transactions, pursuant to an exemption from
registration under the Securities Act of 1933, or in a registered public
offering. Where registration is required, the holder of a registered
security may be obligated to pay all or part of the registration expense
and a considerable period may elapse between the time it decides to seek
registration and the time it may be permitted to sell a security under
an effective registration statement. If, during such a period, adverse
market conditions were to develop, the holder might obtain a less
favorable price than prevailed when it decided to seek registration of
the security. Restricted securities may also be illiquid securities
(see above).
SECURITIES OF OTHER INVESTMENT COMPANIES. Securities of other
investment companies, including shares of closed-end investment
companies, unit investment trusts, and open-end investment companies,
represent interests in professionally managed portfolios that may invest
in any type of instrument. Investing in other investment companies
involves substantially the same risks as investing directly in the
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underlying instruments, but may involve additional expenses at the
investment company level, such as portfolio management fees and
operating expenses. Certain types of investment companies, such as
closed-end investment companies, issue a fixed number of shares that
trade on a stock exchange or over-the-counter at a premium or a discount
to their net asset value. Others are continuously offered at net asset
value, but may also be traded in the secondary market. The extent to
which a fund can invest in securities of other investment companies is
limited by federal securities laws.
WHEN-ISSUED SECURITIES. Each Fund may purchase securities on a
when-issued basis, in which case delivery and payment normally take
place within 45 days after the date of the commitment to purchase. The
payment obligation and the interest rate that will be received on the
securities are each fixed at the time the buyer enters into the
commitment. Although a Fund will only purchase securities on a
when-issued basis with the intention of actually acquiring the
securities, the Fund may sell these securities before the settlement
date if it is deemed advisable.
Securities purchased on a when-issued basis and the securities held by a
Fund are subject to changes in market value based upon the public's
perception of the credit-worthiness of the issuer and changes, real
or anticipated, in the level of interest rates (which will generally
result in similar changes in value, i.e., both experiencing
appreciation when interest rates decline and depreciation when interest
rates rise). Therefore, to the extent a Fund remains substantially
fully invested at the same time that it has purchased securities on a
when-issued basis, there will be a greater possibility that the market
value of the Fund's assets will vary more than otherwise. Purchasing a
security on a when-issued basis can involve a risk that the yields
available in the market when the delivery takes place may be higher than
those obtained on the security so purchased.
A separate account consisting of cash or liquid high-grade debt
securities equal to the amount of the when-issued commitments will be
established with the Fund's portfolio securities custodian, and marked
to market daily, with additional cash or liquid high grade debt
securities added when necessary. When the time comes to pay for
when-issued securities, the Fund will meet its obligations from then
available cash flow, sale of securities held in the separate account,
sale of other securities or, although they would not normally expect to
do so, from the sale of the when-issued securities themselves (which
may have a value greater or less than the Fund's payment obligations).
Sale of securities to meet such obligations carries with it a greater
potential for the realization of capital gain or loss.
WARRANTS. Warrants are instruments which entitle the holder to buy an
equity security at a specific price for a specific period of time.
Changes in the value of a warrant do not necessarily correspond to
changes in the value of its underlying security. The price of a warrant
may be more volatile than the price of its underlying security, and a
warrant may offer greater potential for capital appreciation as well as
capital loss. Warrants do not entitle a holder to dividends or voting
rights with respect to the underlying security and do not represent any
rights in the assets of the issuing company. A warrant ceases to have
value if it is not exercised prior to its expiration date. These factors
can make warrants more speculative than other types of investments.
SECURITIES OF REAL ESTATE INVESTMENT TRUSTS. Each Fund other than the
Utility Fund and Government Money Market Fund may invest in equity
securities or debt obligations issued by real estate investment trusts
("REITs"). Equity REITs own real estate properties, while mortgage
REITs make construction, development, and long-term mortgage loans.
Their value may be affected by changes in the value of the underlying
property of the trusts, the creditworthiness of the issuer, property
taxes, interest rates, and tax
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and regulatory requirements, such as those relating to the environment.
Both types of REITs are dependent upon management skill, are not
diversified, and are subject to heavy cash flow dependency, defaults by
borrowers, self-liquidation, and the possibility of failing to qualify
for tax-free status of income under the Internal Revenue Code and
failing to maintain exemption from the 1940 Act.
REPURCHASE AGREEMENTS. The Funds may invest in repurchase agreements.
A repurchase agreement involves the purchase of a security by a Fund and
a simultaneous agreement (generally by a bank or dealer) to repurchase
that security back from the fund at a specified price and date or upon
demand. This technique offers a method of earning income on idle cash.
The repurchase agreement is effectively secured by the value of the
underlying security. A risk associated with repurchase agreements is
the failure of the seller to repurchase the securities as agreed, which
may cause the Fund to suffer a loss if the market value of such
securities declines before they can be liquidated on the open market.
In the event of bankruptcy or insolvency of the seller, a Fund may
encounter delays and incur costs in liquidating the underlying security.
As an operating policy, the Funds will not invest in repurchase
agreements maturing in more than seven days.
SHORT SALES. The Market Neutral Fund will seek to neutralize the
exposure of its long equity positions to general equity market risk and
to realize additional gains through shorts sales. Short sales are
transactions in which the Market Neutral Fund sells a security it does
not own in anticipation of a decline in the value of that security
relative to the long positions held by the Market Neutral Fund. To
complete such a transaction, the Market Neutral Fund must borrow the
security to make delivery to the buyer. The Market Neutral Fund then is
obligated to replace the security borrowed by purchasing it at the
market price at or prior to the time of replacement. The price at such
time may be more or less than the price at which the security was sold
by the Market Neutral Fund. Until the security is replaced, the Market
Neutral Fund is required to repay the lender any dividends or interest
that accrue during the period of the loan. To borrow the security, the
Market Neutral Fund also may be required to pay a premium, which would
increase the cost of the security sold. The net proceeds of the short
sale will be retained by the broker (or by the Market Neutral Fund's
custodian in a special custody account), to the extent necessary to meet
margin requirements, until the short position is closed out. The Market
Neutral Fund also will incur transaction costs in effecting short sales.
Short sales have certain special risks associated with them. For
example, the Market Neutral Fund will incur a loss as a result of the
short sale if the price of the security increases between the date of
the short sale and the date on which the Market Neutral Fund replaces
the borrowed security. There can be no assurance that the Market
Neutral Fund will be able to close out the position at any particular
time or at an acceptable price. The Market Neutral Fund will realize a
gain if the security declines in price between those dates. The amount
of any gain will be decreased, and the amount of any loss increased, by
the amount of the premium, dividends, interest or expenses the Market
Neutral Fund may be required to pay in connection with a short sale.
Although the Fund's gain is limited to the amount at which it sold a
security short, less the price of the borrowed
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security, the Fund's loss is potentially unlimited, since the price of a
security sold short could theoretically rise indefinitely.
Until the Market Neutral Fund replaces a borrowed security in connection
with short sales, the Market Neutral Fund will: (a) maintain daily a
segregated account containing cash or U.S. Government securities, at
such a level that (i) the amount deposited in the account plus the
amount deposited with the broker as collateral will equal the current
value of the security sold short and (ii) the amount deposited in the
segregated account plus the amount deposited with the broker as
collateral will not be less than the market value of the security at the
time it was sold short; or (b) otherwise cover its short position.
In addition, the Asset Allocation Fund, Large-Cap Fund, Small-Cap Fund,
Utility Fund, Market Neutral Fund and Opportunities Fund also may make
short sales "against the box," which occurs when a security identical to
one owned by the Fund is borrowed and sold short. If a Fund enters into
a short sale against the box, it is required to segregate securities
equivalent in kind and amount to the securities sold short (or
securities convertible or exchangeable into such securities) and is
required to hold such securities while the short sale is outstanding. A
Fund will incur transaction costs, including interest, in connection
with opening, maintaining, and closing short sales against the box.
PURCHASING PUT OPTIONS. By purchasing a put option, a Fund obtains the
right (but not the obligation) to sell the option's underlying security
at a fixed strike price. In return for this right, the Fund pays the
current market price for the option (known as the option premium).
Options can have various types of underlying instruments, including
specific securities, indices of securities prices, and futures
contracts; however, a Fund will only purchase exchange-traded or OTC put
options on exchange-traded securities or on recognized securities
indices (such as the Standard & Poor's 500 Stock Index) for hedging
purposes. The Board of Trustees has approved investments by the Funds
only in put options on specific securities or on indices of securities
prices. The Fund may terminate its position in a put option it has
purchased by allowing it to expire or by exercising the option. If the
option is allowed to expire, the Fund will lose the entire premium it
paid. If the Fund exercises the option, it completes the sale of the
underlying instrument at the strike price, which may be higher or lower
than the current market price. The Fund also may terminate a put option
position by closing it out in the secondary market at its current price,
if a liquid secondary market exists. A Fund that buys a put option can
expect to realize a gain if the price of the underlying security falls
substantially. However, if the underlying security's price does not
fall enough to offset the cost of purchasing the option, the Fund can
expect to suffer a loss (limited to the amount of the premium paid, plus
related transaction costs.)
LIQUIDITY OF OPTIONS. No assurance can be given that a liquid secondary
market will exist for any particular options at any particular time.
Options may have relatively low trading volume and liquidity if their
strike prices are not close to the underlying
22
<PAGE>
<PAGE>
security's current price. In addition, exchanges may establish daily
price fluctuation limits for options, and may halt trading if an
option's price moves upward or downward more than the limit in a given
day. On volatile trading days when the price fluctuation limit is
reached or a trading halt is imposed, it may be impossible for a Fund to
enter into new positions or close out existing positions. If the
secondary market for an option is not liquid because of price
fluctuation limits or otherwise, it could prevent prompt liquidation of
unfavorable positions, and potentially could require a Fund to continue
to hold a position until expiration regardless of changes in its value.
As a result, a Fund's access to other assets held to cover its options
also could be impaired.
OTC OPTIONS. Unlike exchange-traded options, which are standardized
with respect to the underlying instrument, expiration date, contract
size, and strike price, the terms of over-the-counter options (i.e.,
options not traded on exchanges) ("OTC options"), generally are
established through negotiation with the other party to the option
contract. While this type of arrangement allows a Fund greater
flexibility to tailor an option to its needs, OTC options generally
involve greater credit risk than exchange-traded options, which are
guaranteed by the clearing organization of the exchanges where they are
traded. The risk of illiquidity also is greater with OTC options, since
these options generally can be closed out only by negotiation with the
other party to the option.
ASSET COVERAGE FOR OPTIONS POSITIONS. A Fund must comply with
guidelines established by the Securities and Exchange Commission with
respect to coverage of options by mutual funds, and if the guidelines so
require will segregate cash and appropriate high-grade liquid debt
assets in the amount prescribed. Segregated securities cannot be sold
while the futures or option strategy is outstanding, unless they are
replaced with other suitable assets. As a result, there is a
possibility that segregation of a large percentage of a Fund's assets
could impede portfolio management or a Fund's ability to meet redemption
requests or other current obligations.
GENERAL; PORTFOLIO TURNOVER
There is no assurance that a Fund will meet its investment objective or
that there will not be substantial losses in any given investment.
Also, at anytime, the value of a Fund's shares may be more or less than
an investor's cost. Under normal circumstances, each Fund's portfolio
turnover rate is anticipated to be less than 75% per year (150% in the
case of the Opportunities Fund). A Fund's portfolio turnover rate will
be calculated by dividing the lesser of purchases or sales of portfolio
securities for the fiscal year by the monthly average value of the
portfolio securities owned during the fiscal year. To the extent
short-term trading results in the realization of short-term capital
gains, shareholders will be taxed on such gains at ordinary income tax
rates. Increased portfolio turnover necessarily results in
correspondingly higher costs including brokerage commissions, dealer
mark-ups and other transaction costs on the sale of securities and
reinvestment in other securities, and may result in the acceleration of
taxable gains.
23
<PAGE>
<PAGE>
MANAGEMENT OF THE TRUST
The Trustees of the Trust are responsible for generally overseeing the
conduct of each Fund's business. The Officers and Trustees of the Trust
are listed below, together with information regarding their principal
business occupations during at least the past five years and their ages.
Each of the Trustees of the Trust was elected as a trustee at the
inception of the Trust in 1993 and has served continuously since that
date. Trustees who are "interested persons" of the Trust, as defined in
Section 2(a)(19) of the 1940 Act, are indicated with an asterisk.
<TABLE>
<CAPTION>
POSITION(S)
HELD WITH PRINCIPAL OCCUPATION(S)
NAME, AGE AND ADDRESS THE TRUST DURING PAST FIVE YEARS
- --------------------- ----------- -----------------------
<C> <C> <S>
Doug T. Valassis<F*>, 47 Chairman Chairman and Trustee of the
520 Lake Cook Road of the Trust. Chairman, a
Suite 380 Board and Director and Treasurer of
Deerfield, IL 60015 Trustee the Adviser since 1993.
President of Franklin
Enterprises, Inc., a
private investment firm,
for more than five years.
Eric E. Ryback<F*>, 47 President President and Trustee of
7711 Carondelet Ave. and Trustee the Trust. President and
Suite 700 a Director of the Adviser
St. Louis, MO 63105 since 1993.
Brian L. Blomquist, 40 Admin. Vice Executive Vice President of
7711 Carondelet Ave. President, Adviser since 1995 and
Suite 700 Secretary and Assistant Secretary of
St. Louis, MO 63105 Treasurer Adviser since 1993. Vice
President of the Adviser
from 1993 to 1995.
Kenneth E. Puzder, 33 Vice Financial operations
7711 Carondelet Ave. President principal and accounting
St. Louis, MO 63105 manager of the Adviser
since 1998; Audit manager
with KPMG from 1997 to
1998; Controller of Mills
Group, Inc., a commercial
and residential real estate
group, from 1990 to 1997;
Financial operations
principal of The B. Mills
Corporation, an introducing
broker, from 1993 to 1997.
Robert L. Byman, 53 Trustee Partner in the law firm of
Jenner & Block Jenner & Block, Chicago,
One IBM Place Illinois, for more than
Chicago, IL 60611 five years.
24
<PAGE>
<PAGE>
Terrence P. Fitzgerald, 44 Trustee Vice President, Development
2407 Stryker Avenue Director, The Mills
Vienna, VA 22181 Corporation, since 1996.
Senior counsel, The May
Department Stores from 1993
until 1995.
Marc P. Hartstein, 46 Trustee Director--Industry
3 Middlebrook Lane Development of Anheuser-
St. Louis, MO 63141 Busch, Inc. Also owns Hart
Communications, a research
strategic planning and
image development firm.
Peter S. Horos, 50 Trustee Investment Manager,
All State Allstate Life Insurance
3075 Sanders Road Company, Northbrook,
Northbrook, IL 60062 Illinois, for more than
five years.
Donald J. Murphy, 56 Trustee President of Murcom
141 Jackson Blvd. Financial, Ltd., a private
Chicago, IL 60604 investment firm, for more
than five years.
Dennis P. Nash, 48 Trustee Vice President, Nellis Feed
Nellis Feed Company Company, a feed ingredient
899 Skokie Blvd. broker, for more than five
Northbrook, IL 60062 years.
</TABLE>
COMPENSATION
During the fiscal year ended June 30, 1999, Trustees of Lindner
Investments received the following compensation from the Trust, which is
the only group of mutual funds managed by the Adviser:
<TABLE>
<CAPTION>
AGGREGATE REMUNERATION
NAME AND CAPACITY IN WHICH RECEIVED FROM THE TRUST
REMUNERATION WAS RECEIVED WITH RESPECT TO ALL FUNDS
-------------------------- -------------------------
<S> <C>
Robert L. Byman, Trustee $12,125
Terrence P. Fitzgerald, Trustee 12,125
Marc P. Hartstein, Trustee 12,125
Peter S. Horos, Trustee 10,900
Donald J. Murphy, Trustee 12,125
Dennis P. Nash, Trustee 12,125
Eric E. Ryback, Trustee and President 0
Doug T. Valassis, Trustee and Chairman 0
</TABLE>
25
<PAGE>
<PAGE>
There are no pension or retirement benefit plans or programs in effect
for Trustees of the Trust. No officers of the Trust receive any
remuneration from the Trust.
CODE OF ETHICS
Officers, directors and employees of the Adviser are permitted to engage
in personal securities transactions (including securities that may be
purchased or held by the Funds), subject to the Trust's Code of Ethics
(the "Ethics Code"). The Ethics Code restricts certain practices with
regard to personal securities transactions and personal dealings,
provides a framework for the reporting and monitoring of personal
securities transactions to the Adviser's Vice President - Operations (or
his designee), and sets forth a procedure of identifying, for
disciplinary action, those individuals who violate the Ethics Code. The
Ethics Code prohibits each of the officers, Trustees and all Investment
Managers (e.g. portfolio managers, securities analysts and traders) of
the Trust from purchasing or selling any security that the officer,
director or employee knows or believes is being considered for purchase
or sale by any series of the Trust, or is being purchased of sold by any
series of the Trust. The Ethics Code also prohibits each Investment
Manager from (i) purchasing or selling any security within seven
calendar days of the purchase or sale of the security by any series of
the Trust, including the Fund for which the Investment Manager manages,
(ii) engaging in short-term trading (a purchase and sale or vice-versa
within 60 days), (iii) purchasing securities for his own account during
an initial or secondary public offering, (iv) purchasing securities in a
private placement by a publicly-owned company without prior approval by
the Adviser's Vice President - Operations, or (v) purchasing or selling
any security for his own account without prior approval of the Adviser's
Vice President - Operations. Any profit realized in these prohibited
transactions must be paid over to the Trust. Officers, Trustees and
Investment Managers are required to direct their broker to forward
duplicate copies of all trade confirmations and periodic account
statements to the Adviser's Vice President - Operations. All officers,
Trustees and Investment Mangers are also required to disclose all
securities beneficially owned by them on December 31 of each year. The
Trust's Adviser has adopted substantially the same code.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Shareholders of each Fund will vote by series except as otherwise
required by the 1940 Act. Matters affecting an individual series
include, but are not limited to, the investment objectives, policies and
restrictions of that series. Shares have no subscription, preemptive or
conversion rights. Shares do not have cumulative voting rights when
voting on the election of Trustees. Therefore, the holders of more than
50% of the aggregate number of shares of all series of the Trust may
elect all the Trustees. The shares of each Fund other than the
Government Money Market Fund and Opportunities Fund are divided into two
Classes. Each share has one vote and shareholders will vote in the
aggregate and not by Class, except as to any matter that affects only
one Class of shares or as otherwise required by law. Only holders of
Institutional Shares will be
26
<PAGE>
<PAGE>
entitled to vote on matters relating to the Trust's Distribution Plan
for that class of shares.
At September 30, 1999, no person beneficially owned, either directly or
indirectly, more than 25% of the voting securities of the Trust or any
Fund, nor had the Trust or any Fund or any other person acknowledged or
asserted the existence of control over the Trust or any Fund, nor had
there been any adjudication under the 1940 Act that control over the
Trust or any Fund exists. In addition, at September 30, 1999, no person
owned of record or was known by the Trust to own of record or
beneficially 5% or more of any series of the Trust.
At September 30, 1999, the officers and Trustees of the Trust, as a
group, owned the following amounts of shares in each Fund:
<TABLE>
<CAPTION>
NO. OF
NAME OF FUND SHARES % OF TOTAL
------------ ------ ----------
<S> <C> <C>
Lindner Asset Allocation Fund
Investor Shares 110,958 shs. 0.37%
Institutional Shares 0 shs. 0.00%
Lindner Large-Cap Fund--
Investor Shares 146,176 shs. 0.59%
Institutional Shares 0 shs. 0.00%
Lindner Small-Cap Fund
Investor Shares 123,414 shs. 3.39%
Institutional Shares 0 shs. 0.00%
Lindner Utility Fund
Investor Shares 13,289 shs. 0.76%
Institutional Shares 0 shs. 0.00%
Lindner Market Neutral Fund
Investor Shares 7,435 shs. 0.26%
Institutional Shares 0 shs. 0.00%
Lindner Government Money Market Fund
Investor Shares 466,817 shs. 16.24%
</TABLE>
As of October 15, 1999, shares of the Opportunities Fund were held by a
group of its initial investors, all of whom are considered control
persons. As of October 15, 1999, Doug T. Valassis owned 83% of the
Fund's shares and Robert L. Byman and Donald J. Murphy each owned 8.3%
of the Fund's shares.
INVESTMENT ADVISORY AND OTHER SERVICES
CONTROLLING PERSONS
The Funds' Adviser, Lindner Asset Management, Inc., is controlled by The
George F. Valassis Stock Trust and other trusts established for the
benefit of Mr. Valassis's family members (collectively, the "Valassis
Trusts"), which as of June 30, 1999, held 52% of the voting securities
of the Adviser. Doug T. Valassis is a co-Trustee of the Valassis Trusts
and serves as the Chairman of the Board of Directors of the Trust and
the Adviser. The other co-Trustees of the Valassis Trusts are Edward W.
Elliott, Jr., and D. Craig Valassis, the brother of Doug T. Valassis.
Mr. Doug Valassis and Mr. Elliot each also individually own 6.5% of the
common stock of the Adviser. Certain
27
<PAGE>
<PAGE>
officers of the Trusts also serve as officers of the Adviser. See
"Management of the Trust".
SERVICES PROVIDED BY ADVISER
Under the Advisory Contracts and the Administration Agreements, the
Adviser provides each Fund with investment advisory services, office
space, and personnel, and pays the salaries and fees of the Trust's
officers and Trustees who are "interested persons" of the Trust and all
personnel rendering clerical services relating to the investments of
each Fund. The Adviser also pays all promotional expenses of the Trust,
including the printing and mailing of the prospectus to people who are
not current shareholders. The Trust pays all other costs and expenses
including interest, taxes, fees of Trustees who are not "interested
persons" of the Trust, other fees and commissions, expenses directly
related to the issuance and redemption of shares (including expenses of
registering or qualifying shares for sale in each state), charges of
custodians, transfer agents, and registrars, the costs of printing and
mailing reports and notices to shareholders, auditing services and legal
services, and other expenses not expressly assumed by the Adviser.
INVESTMENT COMMITTEE; PORTFOLIO MANAGER
Since April 1999, portfolio investments for all of the Asset Allocation
Fund, the Large-Cap Fund, the Small-Cap Fund, the Utility Fund and the
Market Neutral Fund are being managed by an Investment Committee
established by the Lindner Management Board of Directors. No one person
is primarily responsible for making investment recommendations to this
Investment Committee. The present members of the Investment Committee
are Doug T. Valassis, Eric E. Ryback and Mark T. Finn. Mr. Valassis has
been the Chairman and a Trustee of the Trust since its inception in
1992, a director and the Treasurer of the Adviser since its inception in
1993, and President of Franklin Enterprises, Inc., a private investment
firm, for more than five years. Mr. Ryback has been President and a
Trustee of the Trust since its inception in 1992 and President and a
Director of the Adviser since its inception in 1993. Mr. Finn has been
the Vice Chairman and Chief Operating Officer of the Adviser since March
1999 and has also been the Chairman of Vantage Consulting Group, Inc.,
an investment consulting firm and a registered investment adviser, for
more than five years. He also serves as a Trustee for CitiFunds, a
family of mutual funds sponsored by Citibank, N.A. Mr. Finn also serves
as the portfolio manager for the Opportunities Fund.
ADVISER COMPENSATION
ASSET ALLOCATION FUND
The Advisory Contract for the Asset Allocation Fund requires payment of
a quarterly fee to the Adviser at the annualized rate of 7/10 of 1% of
the average net assets of the Asset Allocation Fund not in excess of $50
million, 6/10 of 1% of the Asset Allocation Fund's average net assets in
excess of $50 million and up to $200 million and 5/10 of 1% of the Asset
Allocation Fund's average net assets in excess of $200 million. For
purposes of computing the quarterly fee, the Asset
28
<PAGE>
<PAGE>
Allocation Fund's average net assets are calculated by dividing the sum
of the Asset Allocation Fund's net assets at the beginning and end of
each month in the fiscal quarter by six.
LARGE-CAP FUND
The Advisory Contract for the Large-Cap Fund requires payment of a basic
fee to the Adviser of 0.7% per annum of the first $50 million of average
net assets of the Large-Cap Fund, plus 0.6% of the next $350 million and
0.5% of the excess over $400 million, subject to increase or decrease
(performance bonus or penalty) depending on the Large-Cap Fund's
investment performance compared with the investment record of the
Russell 2000 Index. Investment performance of the Large-Cap Fund means
the sum of the change in its net asset value during the fiscal year and
the value of dividends and capital gains distributions per share
accumulated to the end of the fiscal year, expressed as a percentage of
net asset value per share at the beginning of the fiscal year. In
computing the investment performance of the Large-Cap Fund and the
investment record of the Index, distributions of realized capital gains
by the Large-Cap Fund, dividends paid by the Large-Cap Fund out of its
investment income, and all cash distributions of the Companies whose
stocks comprise the Russell 2000 Index, are treated as reinvested.
<TABLE>
FEE SCHEDULE FOR LARGE-CAP FUND
<CAPTION>
IF THE LARGE-CAP FUND'S FIRST $50 NEXT $350 EXCESS OVER
PERFORMANCE EXCEEDS THE MILLION MILLION $400 MILLION
INDEX BY: OF ASSETS OF ASSETS OF ASSETS
--------- --------- ------------
<S> <C> <C> <C>
more than 12% 0.9% 0.8% 0.7%
more than 6% but less than 12% 0.8% 0.7% 0.6%
less than 6% 0.7% 0.6% 0.5%
<CAPTION>
IF THE LARGE-CAP FUND'S
PERFORMANCE FALLS BELOW
THE INDEX BY:
<S> <C> <C> <C>
less that 6% 0.7% 0.6% 0.5%
more than 6% but less that 12% 0.6% 0.5% 0.4%
more than 12% 0.5% 0.4% 0.3%
</TABLE>
The maximum fee possible, assuming maximum performance, is 0.9% of the
first $50 million of average net assets, 0.8% of the next $350 million,
and 0.7% of the excess over $400 million. The smallest fee possible,
assuming poorest performance, is 0.5% of the first $50 million of
average net assets, 0.4% of the next $350 million, and 0.3% of the
excess over $400 million. The basic fee may be increased or decreased,
in accordance with the foregoing formula, during a particular year
despite the fact that (1) there may be no change in the Index, if there
is an increase or decrease in the net asset value per share of the
Large-Cap Fund of at least 6%, or (2) there may be no change in the net
asset value per share of the Large-Cap Fund, if there is an increase or
decrease in the Index of at least 6%. The
29
<PAGE>
<PAGE>
Large-Cap Fund's average net assets is the sum of the net assets
exclusive of any accrued performance bonus or penalty at the beginning
and end of each month of the fiscal year, divided by twenty-four. In
partial payment of amounts so accrued, the Adviser is entitled to
receive quarterly installments of 1/10 of 1% of average net assets
toward the annual fee, subject to the foregoing expense limitation
applied on a quarterly basis; the excess, if any, of the annual fee over
the quarterly installments is payable annually, within thirty days after
receipt of the Accountant's Report for the Large-Cap Fund's fiscal year.
For both the Asset Allocation Fund and the Large-Cap Fund, the Adviser
is required to reimburse the Fund for any excess of annual operating and
management expenses, exclusive of taxes and interest but including the
Adviser's compensation, over 1-1/2% of the first $30,000,000 of the
Fund's average net assets plus 1% of average net assets in excess of
$30,000,000 for any fiscal year. Any excess over the expense limitation
is paid by the Adviser monthly.
SMALL-CAP AND UTILITY FUNDS
The Advisory Contract for the Small-Cap Fund and the Utility Fund
requires payment of a monthly fee to the Adviser equal to 1/12th of the
sum of the products obtained by multiplying (i) the average daily net
assets of each Fund not in excess of $50,000,000 by 0.7%; the average
daily net assets of the applicable Fund in excess of $50,000,000 but not
in excess of $200,000,000 by 0.6%; and the average daily net assets of
the applicable Fund in excess of $200,000,000 by 0.5%. For purposes of
these calculations, daily net assets of each Fund are averaged for each
calendar month.
MARKET NEUTRAL FUND
The Advisory Contract for the Market Neutral Fund requires payment of a
fee to the Adviser at the annual rate of 1.0% of the average daily net
assets of this Fund, calculated and paid on a monthly basis.
OPPORTUNITIES FUND
The Advisory Contract for the Opportunities Fund requires payment of a
basic fee to the Adviser of 0.9% per annum, subject to increase or
decrease (performance bonus or penalty) depending on the Opportunities
Fund's investment performance compared with the investment record of
the Standard & Poor's 500 Index. Investment performance of the Fund
means the sum of the change in its net asset value during the fiscal
year, expressed as a percentage of net asset value per share at the
beginning of the fiscal year. In computing the investment performance
of the Fund and the investment record of the Index, distributions of
realized capital gains by the Fund, dividends paid by the Fund out of
its investment income, and all cash distributions of the companies whose
stocks comprise the Standard & Poor's 500 Index, are treated as
reinvested.
30
<PAGE>
<PAGE>
FEE SCHEDULE FOR OPPORTUNITIES FUND
IF THE OPPORTUNITIES FUND'S
PERFORMANCE EXCEEDS THE BASIC FEE IS
INDEX BY: INCREASED BY
--------- ------------
less than 6% 0.0%
more than 6% but less than 12% 0.1%
more than 12% 0.2%
IF THE OPPORTUNITIES FUND'S
PERFORMANCE FALLS BELOW THE BASIC FEE IS
INDEX BY: DECREASED BY
--------- ------------
less than 6% 0.0%
more than 6% but less than 12% 0.1%
more than 12% 0.2%
The maximum fee possible, assuming maximum performance, is 1.1% of
average net assets, while the lowest fee possible, assuming poorest
performance, is 0.7% of average net assets. The basic fee may be
increased or decreased, in accordance with the foregoing formula, during
a particular year despite the fact that (1) there may be no change in
the Index, if there is an increase or decrease in the net asset value
per share of the Opportunities Fund of more than 6%, or (2) there may be
no change in the net asset value per share of the Opportunities Fund, if
there is an increase or decrease in the Index of more than 6%. The
Fund's average net assets is the sum of the net assets exclusive of any
accrued performance bonus or penalty at the beginning and end of each
month of the fiscal year, divided by twenty-four. In partial payment of
amounts so accrued, the Adviser is entitled to receive quarterly
installments of 0.1% of average net assets toward the annual fee; the
excess, if any, of the annual fee over the quarterly installments is
payable annually, within thirty days after receipt of the Accountant's
Report for the Opportunities Fund's fiscal year.
GOVERNMENT MONEY MARKET FUND
The Advisory Contract for the Government Money Market Fund requires
payment of a fee to the Adviser that is computed daily and payable
monthly at the annual rate of 0.15% of the Government Money Market
Fund's average daily net assets.
Under each Advisory Contract for the Small-Cap, Utility, Market Neutral
and Government Money Market Funds, the Adviser is required to reimburse
each Fund for any excess of annual operating and management expenses
relating to each Fund, exclusive of taxes and interest but including the
Adviser's compensation, over the most stringent expense limitation
imposed by state law or regulation for any fiscal year. Any excess over
the expense limitation is paid by the Adviser monthly.
The following table summarizes the advisory fees paid by the Funds
during the fiscal years ended June 30, 1999, 1998 and 1997. No expense
reimbursement has been required of the Adviser for these years for the
Funds shown.
31
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
----------------------------------------------
FUND NAME 1999 1998 1997
--------- ---- ---- ----
<S> <C> <C> <C>
Lindner Asset Allocation Fund $5,949,294 $9,220,306 $11,332,992
Lindner Large-Cap Fund<F1> 2,270,334 4,500,581 4,861,169
Lindner Small-Cap Fund 284,515 315,917 110,953
Lindner Utility Fund 209,232 313,257 271,898
Lindner Market Neutral Fund 242,692 443,278 805,475
Lindner Government Money Market Fund 72,541 61,946 54,669<F2>
Linder International Fund 15,087 37,849 25,886<F3>
Lindner High Yield Fund 3,159 2,025<F4> n/a
<FN>
_________
<F1> For the fiscal year ended June 30, 1999, the performance
index used to calculate the advisory fee payable to the
Adviser by the Large-Cap Fund was the Russell 2000 Composite
Index. For the fiscal years ended June 30, 1998 and 1997,
the performance index used to calculate such advisory fee
was the Standard & Poor's 500 Stock Composite Index. Also,
during fiscal years 1999, 1998 and 1997, the Adviser's fee
was reduced by a performance penalty of $1,213,486,
$2,700,692 and $2,939,360, respectively.
<F2> July 6, 1996 to June 30, 1997.
<F3> Net of expense reimbursement.
<F4> April 13, 1998 to June 30, 1998.
</TABLE>
SUBADVISER (GOVERNMENT MONEY MARKET FUND)
The Adviser has entered into a Subadvisory Agreement with Firstar Bank,
N.A. (the "Subadviser"), a national banking association. Under the
Subadvisory Agreement, it is the responsibility of the Subadviser to
make investment decisions for the Government Money Market Fund and to
place the purchase and sale orders for the portfolio transactions of
that fund, subject to the supervision of the Adviser and the Board of
Trustees of the Trust. As compensation for these services, the Adviser
pays a fee to the Subadviser that is computed daily and payable monthly,
at an annual rate of 0.10% of the first $250,000,000 of the Fund's
average net assets and at an annual rate of 0.08% of the Government
Money Market Fund's assets in excess of $250,000,000. The Subadviser was
founded in 1853 and is the largest bank and trust organization of
Firstar Corporation. Firstar Bank's expertise in trust administration,
investments and estate planning makes it one of the leading trust
institutions in Ohio. Firstar Bank has managed common trust funds since
1957. As of March 31, 1999, Firstar Bank also managed 20 mutual funds
having a market value in excess of $2.7 billion. As a part of its
regular banking operations, Firstar Bank may make loans to public
companies. Thus, it may be possible from time to time for the Fund to
hold or acquire securities of companies that are also borrowing clients
of Firstar Bank. Both the Adviser and the Subadviser believe that any
such relationship will not be a factor in the selection of portfolio
securities for the Government Money Market Fund. The Subadviser's
business address is 425 Walnut Street, Cincinnati, Ohio 45202.
EFFECT OF BANKING LAWS. The Glass-Steagall Act and other banking laws
and regulations presently prohibit a bank holding company registered
under the federal Bank Holding Company Act of 1956, as amended, or any
32
<PAGE>
<PAGE>
affiliate of such a bank holding company, from sponsoring, organizing or
controlling a registered open-end investment company continuously
engaged in the issuance of its shares, and from issuing, underwriting,
selling or distributing securities in general. Such laws and
regulations do not prohibit such a bank holding company or its
affiliates from acting as an investment adviser, transfer agent or
custodian to such an investment company or from purchasing shares of
such an investment company as agent for and upon the order of their
customers. The Subadviser is subject to such laws and regulations.
The Subadviser believes that it may perform subadvisory services for the
Government Money Market Fund without violating the Glass-Steagall Act or
other applicable banking laws or regulations. Changes in either federal
or state laws and regulations relating to the permissible activities of
banks and their subsidiaries or affiliates, as well as further judicial
or administrative decisions or interpretations of laws and regulations,
could prevent the Subadviser from continuing to perform all or a part of
these services. In such event, changes in the operations of the
Government Money Market Fund may occur, and the Board of Trustees of the
Trust would then consider alternative arrangements with another
subadviser and other means of continuing available investment services.
TRANSFER AGENT
Pursuant to the Agency Agreements, Lindner Management maintains
shareholder records and keeps such accounts, books, records, or other
documents as the Funds are required to keep under federal or state laws.
Lindner Management also acts as stock registrar and dividend disbursing
agent, issues and redeems the Funds' shares, mails the Funds'
prospectuses and proxy statements to the Funds' shareholders, and
disburses dividend payments. Effective December 1, 1998, as
compensation for these services, Lindner Management is paid a fee of
$11.00 per shareholder account per year for each Fund other than the
Government Money Market Fund, and is paid a fee of $10.00 per
shareholder account per year in the case of the Government Money Market
Fund. These agreements permit Lindner Management to engage the services
of sub-agents that may be required to facilitate the distribution of
shares and record keeping for shareholder accounts maintained in "street
name" with brokers, and Lindner Management has entered into a sub-
transfer agency agreement with State Street Bank and Trust Company for
such services. The fees and expenses of State Street Bank and Trust
Company are paid by the Trust.
The following table summarizes the fees paid by the Funds under the
Agency Agreement during the fiscal years ended June 30, 1999, 1998 and
1997, except as noted:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
--------------------------------------------
FUND NAME 1999 1998 1997
--------- ---- ---- ----
<S> <C> <C> <C>
Lindner Asset Allocation Fund $432,741 $534,860 $680,117
Lindner Large-Cap Fund 287,094 398,720 468,020
Lindner Small-Cap Fund 24,373 19,377 7,159
Lindner Utility Fund 17,447 20,962 20,099
Lindner Market Neutral Fund 14,179 18,668 23,692
Lindner Government Money Market Fund 15,575 11,899 9,217<F1>
Linder International Fund 2,543 3,303 2,190
Linder High-Yield Bond Fund 2,183 385<F2>
<FN>
_______
<F1> July 6, 1996 to June 30, 1997.
<F2> April 13, 1998 to June 30, 1998.
</TABLE>
33
<PAGE>
<PAGE>
ADMINISTRATOR
Lindner Management is the administrator of the Government Money Market
Fund and Opportunities Fund and as such it administers those Funds'
corporate affairs. The Administrative Services Agreement for the
Government Money Market Fund provides for compensation to Lindner
Management equal to 0.20% per year of the Fund's average daily net
assets. The following table summarizes the administrative fees paid by
the Government Money Market Fund to Lindner Management during the fiscal
years ended June 30, 1999, 1998 and 1997.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
----------------------------------------
FUND NAME 1999 1998 1997
--------- ---- ---- ----
<S> <C> <C> <C>
Lindner Government Money Market Fund $86,008 $76,421 $72,892<F1>
Linder High-Yield Bond Fund 0 506<F2> n/a
<FN>
_________
<F1> July 6, 1996 to June 30, 1997.
<F2> April 13, 1998 to June 30, 1998.
</TABLE>
Under the Administration Agreement relating to the Opportunities Fund,
Lindner Management provides the Fund with office facilities and
personnel, non-investment related statistical and research data,
stationery and office supplies, executive and administrative services,
internal auditing and regulatory compliance services. Lindner
Management also assists in the preparation of reports to shareholders,
prepares proxy statements, makes filings with the Securities and
Exchange Commission and state securities authorities and performs
certain budgeting and financial reporting and compliance monitoring
activities. For these administrative services, the Fund pays Lindner
Management a monthly administration fee equal to 1/12 of 0.15% of the
average daily net assets of the Fund. Because the Opportunities Fund
only commenced operations on October 12, 1999, no fees have been paid.
Each of the Government Money Market Fund and Opportunities Fund pays
all of its other costs and expenses including interest, taxes, fees of
Trustees who are not interested persons of the Trust, administrative
expenses related directly to the issuance and redemption of shares (such
as expenses of registering or qualifying shares for sale, charges of
custodians, transfer agents and registrars), costs of printing and
mailing reports and notices to shareholders, charges for auditing
services and legal services, and other fees and commissions of every
kind not expressly assumed by Lindner Management as the administrator.
34
<PAGE>
<PAGE>
Each of the Advisory Contracts, Agency Agreements and the Administration
Agreements may be terminated by the Funds or Lindner Management upon 60
days' notice, and that may be terminated immediately by the Trust for
cause, as defined in each Agreement. Each Agreement also provides that
after an initial two-year period, it will automatically terminate if it
(1) is not approved by a majority of the Trust's trustees and a majority
of the Trust's disinterested trustees upon the annual renewal date of
the Agreement, or (2) is assigned in whole or in part by Lindner
Management. If any Agreement is terminated for either of the foregoing
reasons, the Trust will enter into a similar arrangement with an
unrelated party upon such terms and conditions as can be obtained at
that time.
DISTRIBUTION AND SERVICE PLAN
THIS SECTION RELATES ONLY TO THE INSTITUTIONAL SHARES OF EACH FUND OTHER
THAN THE GOVERNMENT MONEY MARKET FUND AND OPPORTUNITIES FUND. On behalf
of the Institutional Shares of each Fund, the Trust has adopted a
Distribution and Service Plan (the "Distribution Plan") pursuant to Rule
12b-1 under the 1940 Act, which regulates circumstances under which an
investment company may bear expenses associated with the distribution of
its shares. The Distribution Plan provides that Institutional Shares of
a Fund may incur certain expenses that may not exceed a maximum amount
equal to 0.25% of the average daily net asset value of the Institutional
Shares for any fiscal year occurring after the adoption of the
Distribution Plan. The Distribution Plan further provides that a Fund
may pay such amount to Lindner Management on behalf of Institutional
Shares distributed by or through broker-dealers, financial institutions
and other organizations which have entered into written agreements with
the Trust or Lindner Management in order to enable Lindner Management to
pay to such other organizations a maintenance, service or other fee, at
such intervals as Lindner Management may determine. Such payments will
be made to such other organizations for continuing services to their
clients or to the beneficial owners of Institutional Shares based on the
average daily net asset value of Institutional Shares held in such
accounts remaining outstanding on the books of a Fund for specified
periods. The disposition of monies pursuant to the Distribution Plan
will be reviewed by the Board of Trustees of the Trust on a quarterly
basis, to assure that the amounts paid and the purposes for which they
are paid, comply with the provisions of the Distribution Plan and Rule
12b-1.
The services under the Distribution Plan may include assistance in
advertising and marketing of Institutional Shares, aggregating and
processing purchase, exchange and redemption requests for Institutional
Shares, maintaining account records, issuing confirmations of
transactions and providing sub-accounting and sub-transfer agent
services with respect to Institutional Shares.
While the Distribution Plan is in effect, the selection and nomination
of Trustees of the Trust who are not "interested persons" of the Trust,
as defined in the 1940 Act (the "Independent Trustees") is committed to
the discretion of the Independent Trustees then in office.
35
<PAGE>
<PAGE>
The Distribution Plan was approved by the Board of Trustees (and by the
Independent Trustees), and by the shareholder owning all of the
Institutional Shares of each Fund in January and February 1996. The
Distribution Plan may be continued annually if approved by majority vote
of the Trustees, and by majority vote of the Independent Trustees, cast
in person at a meeting held for such purpose. The most recent approval
of the continuation of the Distribution Plan was in March 1999. The
Distribution Plan may not be amended to increase materially the amount
of distribution fees permitted to be paid thereunder without being first
approved by a majority vote of the holders of all Institutional Shares
of each Fund. The Distribution Plan may be terminated with respect to
any or all Funds at any time by a majority vote of the Independent
Trustees or by a majority vote of the holders of Institutional Shares of
the affected Fund. The following table summarizes the fees paid by
Institutional Shares of each Fund under the Distribution Plan during the
fiscal years ended June 30, 1997, 1998 and 1999.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
------------------------------------------
FUND NAME 1999 1998 1997
--------- ---- ---- ----
<S> <C> <C> <C>
Lindner Asset Allocation Fund $6,156 $6,211 $2,158
Lindner Large-Cap Fund 646 1,741 0
Lindner Small-Cap Fund 1,349 469 0
Lindner Utility Fund 5 82 117
Lindner Market Neutral Fund 0 400 3,276
Linder International Fund 0 0 0
Linder High-Yield Bond Fund 0 0 0
</TABLE>
CUSTODIANS AND INDEPENDENT AUDITORS
Firstar Bank, N.A. ("Firstar Bank"), 425 Walnut Street, Cincinnati, Ohio
45202, acts as custodian of all cash and domestic securities of the
Funds. Firstar Bank receives a monthly fee based on monthly average net
assets of all Funds, which fee is allocated among the Funds on the basis
of their net asset values. The Trust has an arrangement whereby
custodian expenses are reduced by maintaining compensating balances with
Firstar Bank. For the fiscal year ended June 30, 1999, custodial fees
for each Fund were reduced by the following amounts due to this
arrangement: Lindner Asset Allocation Fund--$39,481; Lindner Large-Cap
Fund--$19,393; Lindner Small-Cap Fund--$1,444; Lindner Utility Fund--
$1,038; Lindner Market Neutral Fund--$692; and Lindner Government Money
Market Fund--$1,786.
The Chase Manhattan Bank ("Chase"), 4 Chase MetroTech, 18th Floor,
Brooklyn, NY 11245, serves as the Funds' custodian of foreign securities
and precious metals. Chase charges custodian fees on a sliding scale
depending on the countries in which each Fund is invested. The fees
include transaction charges ranging from $30 to $125 plus safekeeping
fees ranging from 10/100 of 1% to 42/100 of 1% per annum, based upon the
portfolio market value of foreign securities in each country as of the
close of business on the last business day of each quarter. Precious
metal safekeeping charges are based on the amount being stored, while
charges for options and futures contracts are made on a per transaction
basis.
36
<PAGE>
<PAGE>
Deloitte & Touche LLP, independent auditors, One City Centre, St. Louis,
Missouri 63101, audits the Funds' annual financial statements.
BROKERAGE ALLOCATION
Placement of the Funds' orders to buy and sell portfolio securities are
the responsibility of the Adviser. Such decisions are made for the
Adviser by its Vice Chairman and Chief Operating Officer and its trading
department. In the allocation of such orders and the resulting
commissions, the following factors are considered:
* The Adviser's past experience, in dealing with various
brokers, of attaining the Funds' objectives of good
execution at the most favorable price;
* The services furnished by the broker in providing price
quotations;
* The allocation to the Funds of desired underwritten
securities;
* The part, if any, played by the broker or dealer in bringing
the security involved to the Adviser's attention and
providing information, research and analysis with respect
thereto;
* Assistance in the sale of Fund shares, provided that
execution of orders is satisfactory and that commission
rates are competitive with those available from other
brokers; and
* Commission rates (see discussion below).
It is the policy of each Fund to secure, consistent with good execution,
the highest possible price on sales and the lowest possible price on
purchases of securities. Since brokers are compensated through
commissions for services described above and since commissions may be
paid at varying rates, sales even at the highest possible price may not
yield the maximum possible net proceeds and purchases even at the lowest
possible price may not be made at the lowest possible overall cost.
As permitted by section 28(e) of the Securities Exchange Act of 1934,
commissions paid to brokers for effecting securities transactions may
exceed the commission which another broker would have charged for
effecting such transactions, if the Adviser has determined in good faith
that such charges are reasonable in view of quotation or research
services provided by such broker. Research services that may be
provided to the Funds by a broker include calling attention to a stock
and providing information about the operations of companies over and
above that published in investment manuals. The receipt of quotation
services from a broker relieves the Adviser of certain expenses which it
would otherwise incur. Any information and analysis received from
brokers supplements the Adviser's activities and facilities, but does
not reduce its expenses. Advice provided by brokers may be used by the
Adviser is servicing clients other than the Fund.
The Funds and their Adviser do not consider their facilities to be
adequate for the conduct of over-the-counter trading and believe that
better execution can usually be obtained through utilization of
37
<PAGE>
<PAGE>
brokers rather than direct dealing with primary market makers. Thus,
except for those instances in which the Funds deal directly with a
primary market maker, the Funds pay both the dealer's mark-up or
mark-down and the broker's commission. This practice has resulted and
will continue to result in greater costs to the Funds.
During the fiscal year ended June 30, 1999, the total brokerage
commissions paid by the Funds to brokers and dealers because of research
services provided are summarized below:
COMMISSIONS
FUND NAME PAID TRANSACTIONS
--------- ----------- ------------
Lindner Asset Allocation Fund $1,356,756 $756,894,740
Lindner Large-Cap Fund 2,140,571 694,497,336
Lindner Small-Cap Fund 204,865 44,508,772
Lindner Utility Fund 155,679 61,126,222
Lindner Market Neutral Fund 177,196 40,293,821
Lindner Government Money Market Fund 0 n/a
The following table lists the total amount of brokerage commissions paid
by each Fund during each of the last three fiscal years ended June 30,
1999:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
----------------------------------------------
FUND NAME 1999 1998 1997
--------- ---- ---- ----
<S> <C> <C> <C>
Lindner Asset Allocation Fund $1,394,388 $3,300,117 $2,846,295
Lindner Large-Cap Fund 2,494,626 3,505,598 2,651,802
Lindner Small-Cap Fund 204,865 93,125 58,600
Lindner Utility Fund 158,282 160,053 126,671
Lindner Market Neutral Fund 178,287 270,049 934,411
Lindner Government Money Market Fund 0 0 0
</TABLE>
PURCHASE, REDEMPTION AND PRICING OF SECURITIES
As stated in the Prospectus, the Adviser determines the current net
asset value of each Fund at the close of trading on each business day on
which at least one of the following markets is open: New York Stock
Exchange, American Stock Exchange, or the Nasdaq Stock Market. The per
share net asset value of each Class of shares of each Fund is calculated
by dividing the value of each Fund's securities, plus any cash and other
assets (including dividends and interest accrued but not collected) less
all liabilities, including accrued expenses allocable to that Class
(including accrued distribution and service fees payable by the
Institutional Shares) by the total number of shares of the particular
Class outstanding.
Set forth below is a specimen price make-up sheet showing, as of June
30, 1999, the computation of total offering price per share of Investor
Shares and Institutional Shares of each Fund, using the basis set forth
in the Prospectus for valuation of such Fund's portfolio securities and
other assets.
38
<PAGE>
<PAGE>
<TABLE>
SPECIMEN PRICE MAKE-UP SHEET -- JUNE 30, 1999
<CAPTION>
ASSET ALLOCATION LARGE-CAP SMALL-CAP
FUND FUND FUND
---------------- --------- ---------
<S> <C> <C> <C>
Securities at market $766,395,810 $435,333,944 $38,651,949
Cash and other assets, including accrued income 12,624,701 9,989,222 1,653,594
------------ ------------ -----------
Total assets 779,020,511 445,323,166 40,305,543
Liabilities, including accrued expenses 6,868,039 11,602,243 769,708
------------ ------------ -----------
Net assets $772,152,472 $433,720,923 $39,535,835
============ ============ ===========
Net asset value--
Investor shares:
Net assets $768,009,504 $433,535,961 $37,904,782
Number of shares outstanding 32,676,139 26,860,513 4,704,942
Per share $23.50 $16.14 $8.06
Institutional shares:
Net assets $4,412,968 $184,962 $1,631,053
Number of shares outstanding 176,955 11,544 202,930
Per share $23.41 $16.02 $8.04
<CAPTION>
UTILITY MARKET NEUTRAL GOVERNMENT MONEY
FUND FUND MARKET FUND
------- -------------- ----------------
<S> <C> <C> <C>
Securities at market $26,153,218 $15,214,671 $43,615,493
Cash and other assets, including accrued income 229,470 7,152,495 507,387
----------- ----------- -----------
Total assets 26,382,688 22,367,166 44,122,880
Liabilities, including accrued expenses 41,040 4,164,834 119,794
----------- ----------- -----------
Net assets $26,341,648 $18,202,332 $44,003,086
=========== =========== ===========
Net asset value--
Investor shares:
Net assets $26,341,452 $18,202,222 $44,003,086
Number of shares outstanding 1,778,283 3,181,938 44,003,086
Per share $14.81 $5.72 $1.00
Institutional shares:
Net assets $196 $110 n/a
Number of shares outstanding 13 18 n/a
Per share $14.96 $6.09 n/a
</TABLE>
ALL FUNDS OTHER THAN GOVERNMENT MONEY MARKET FUND
Investments in securities traded on a national securities exchange or
quoted on the Nasdaq National Market System are valued at the last
reported sales price as of the close of the New York Stock Exchange.
Securities traded in the over-the-counter market and listed securities
for which no sale was reported on that date are valued at the mean
between the last reported bid and asked prices. Securities which are
traded both in the over-the-counter market and on a stock exchange are
valued according to the broadest and most representative market.
Securities and assets for which quotations are not readily available are
valued at fair value as determined in good faith by or pursuant to
procedures established by the Trustees. The value of foreign securities
is converted into U.S. dollars at the rate of exchange prevailing on the
valuation date. Purchases and sales of foreign securities as well as
income and expenses related to such securities
39
<PAGE>
<PAGE>
are converted at the prevailing rate of exchange on the respective dates
of such transactions.
Each Fund may, to the extent permitted by its investment restrictions,
have positions in portfolio securities for which market quotations are
not readily available. It may be difficult to determine precisely the
fair market value for such investments and there may be a range of
values which are reasonable at any particular time. Fair value in such
instances will be determined in good faith by the Adviser in accordance
with procedures and policies approved by the Board of Trustees of
Lindner Investments, based upon such factors as are deemed relevant by
the Adviser under the circumstances, including the financial condition
and operating results of the issuer, recent third party transactions
(actual or proposed) relating to such securities and, in extreme cases,
the liquidation value of the issuer.
Shares are offered to the public at the price set forth in the
Prospectus, pursuant to written application as specified in the
Prospectus (see "Purchase of Shares and Shareholder Inquiries"). In the
event that the Funds issue their shares in exchange for other
securities, such other securities will meet the applicable Fund's
investment objectives and policies, will be acquired for investment and
will be liquid securities (i.e., not restricted as to transfer by law or
liquidity of market) that have a readily ascertainable market value.
GOVERNMENT MONEY MARKET FUND
The Government Money Market Fund values its investment securities based
upon their amortized cost in accordance with Rule 2a-7 of the Securities
and Exchange Commission under the 1940 Act. This involves valuing a
security at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the security. While
this method provides certainty in valuation, it may result in periods
during which value, as determined by amortized cost, is higher or lower
than the price the Fund would receive if it sold the securities. As
discussed below, it is the intention of the Fund to maintain a net asset
value per share of $1.00 for the Fund.
Pursuant to Rule 2a-7, the Fund is required to maintain a
dollar-weighted average Fund maturity of 90 days or less, to purchase
securities having remaining maturities of 397 days or less only, to
invest only in securities determined by the Trustees to present minimal
credit risks and to invest only in securities which are "eligible
securities" as defined in Rule 2a-7. Because the Government Money
Market Fund utilizes the procedures specified in Rule 2a-7 to determine
the maturity of its investments, further revision of Rule 2a-7 or
pronouncements clarifying or interpreting the scope of its application
may affect this fund's method for determining maturity of its
investments.
The Trustees have established procedures designated to stabilize, to the
extent reasonably possible, the Government Money Market Fund's price per
share, as computed for the purpose of sales and redemptions, at $1.00.
These procedures include review of the investment holdings
40
<PAGE>
<PAGE>
by the Trustees, at such intervals as they may deem appropriate, to
determine whether the Fund's net asset value calculated by using
available market quotations deviates from $1.00 per share based on
amortized cost. The extent of any deviation will be examined by the
Trustees. If the deviation exceeds 1/2 of 1%, the Trustees will
promptly consider what action, if any, will be initiated. In the event
the Trustees determine that a deviation exists which may result in
material dilution or other unfair results to investors or existing
shareholders, they have agreed to take such corrective actions as are
necessary and appropriate. These actions may include selling investment
securities prior to maturity to realize capital gains or losses or to
shorten the average maturity, withholding dividends, splitting,
combining, or otherwise recapitalizing outstanding shares or
establishing a net asset value per share by using available market
quotations.
ADDITIONAL PERFORMANCE INFORMATION
ALL FUNDS OTHER THAN GOVERNMENT MONEY MARKET FUND
The Funds may from time to time include their "average annual total
return" in communications to present or prospective investors. "Average
annual total return" is the annual percentage change in an investment in
the applicable Fund over a stated period of time. Each Fund will
compute average annual total return using the following formula:
P(1+T)n = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years (as a power)
ERV= ending redeemable value of a hypothetical $1,000
payment made at the beginning of the 1, 5 or 10 year
period at the end of the 1, 5 or 10 year period
In making the above-described computation, each Fund will assume that
all dividends and capital gains distributions by the Fund are reinvested
at the Fund's net asset value per share on the reinvestment date. The
Funds do not have sales loads payable by all shareholders that could
affect their calculations of average annual total return.
The total return for Investor Shares and Institutional Shares of each
Fund (or its predecessor), other than the Government Money Market Fund,
is provided in the table below, computed for the periods shown. Because
the Opportunities Fund only commenced operations on October 12, 1999, no
performance data is available for it.
41
<PAGE>
<PAGE>
<TABLE>
INVESTOR SHARES
AVERAGE ANNUAL TOTAL RETURN--
FISCAL YEAR ENDED JUNE 30, 1999
<CAPTION>
SINCE
FUND NAME 1 YEAR 5 YEARS 10 YEARS INCEPTION
--------- ------ ------- -------- ---------
<S> <C> <C> <C> <C>
Lindner Asset Allocation Fund -5.57% 8.88% 9.80% n/a
Lindner Large-Cap Fund -13.66% 10.93% 7.60% n/a
Lindner Small-Cap Fund 0.11% 15.68% n/a 13.46%<F1>
Lindner Utility Fund 8.62% 16.92% n/a 14.67%<F2>
Lindner Market Neutral Fund 4.29% -1.12% n/a -0.60%<F3>
<FN>
_________
<F1> For the period January 24, 1994 to June 30, 1999
<F2> For the period October 4, 1993 to June 30, 1999
<F3> For the period February 11, 1994 to June 30, 1999
</TABLE>
<TABLE>
INSTITUTIONAL SHARES
AVERAGE ANNUAL TOTAL RETURN--
FISCAL YEAR ENDED JUNE 30, 1999
<CAPTION>
SINCE
FUND NAME 1 YEAR 5 YEARS 10 YEARS INCEPTION
--------- ------ ------- -------- ---------
<S> <C> <C> <C> <C>
Lindner Asset Allocation Fund -5.74% n/a n/a 5.88%<F1>
Lindner Large-Cap Fund -14.01% n/a n/a -0.23%<F2>
Lindner Small-Cap Fund -0.07% n/a n/a 13.28%<F3>
Lindner Utility Fund 7.99% n/a n/a 14.23%<F4>
Lindner Market Neutral Fund 4.03% n/a n/a -8.46%<F5>
<FN>
_________
<F1> For the period July 9, 1996 to June 30, 1999
<F2> For the period July 12, 1996 to June 30, 1999
<F3> For the period November 1, 1996 to June 30, 1999
<F4> For the period October 31, 1996 to June 30, 1999
<F5> For the period July 11, 1996 to June 30, 1999
</TABLE>
Average annual total return is an historical measure of performance and
is not necessarily indicative of a Fund's future performance. Such
measurement will vary from time to time depending upon numerous factors,
including without limitation market conditions, the composition of each
Fund's portfolio and operating expenses. These factors should be
considered when evaluating each Fund's performance.
GOVERNMENT MONEY MARKET FUND
The Government Money Market Fund's yield is based on historical earnings
and will fluctuate and should not be considered as representative of
future performance. Since yields fluctuate, yield data cannot
necessarily be used to compare an investment in the Fund's shares with
bank deposits, savings accounts and similar investment alternatives
which often provide an agreed or guaranteed fixed yield for a stated
period of time. Performance and yield are generally functions of kind
and quality of the instruments held in the Fund, maturity of its
investments, operating expenses, and market conditions. The fees which
may be imposed by institutions or other financial intermediaries on
their customers for cash management and other services are not reflected
in the Government Money Market Fund's calculations of yield.
42
<PAGE>
<PAGE>
The Government Money Market Fund's standard yield quotations as they
appear in advertising and sales materials, and as disclosed in the
Prospectus, are calculated by a standard method prescribed by rules of
the Securities and Exchange Commission. Under that method, the yield
quotation is based on a recent seven-day period and computed as follows:
average daily net investment income per share during the seven-day
period is divided by the average daily price per share (expected to
remain constant at $1.00) during the period. The result is then
multiplied by 365 with the resulting annualized yield figure carried to
the nearest one-hundredth of one percent.
"Effective Yield" is computed in the same manner except that when
annualized, the income earned is assumed to be reinvested, thus
resulting in a higher return because of the compounding effect. The
Government Money Market Fund's average daily net investment income for
this purpose consists of accrued income on investment securities, plus
or minus amortized purchase discount or premium, less accrued expenses.
Realized capital gains or losses and unrealized appreciation or
depreciation of the Fund's investment securities are not included in the
calculation. Any fee charged to all shareholder accounts, such as a
fixed monthly shareholder service fee, will be included in the accrued
expenses of the Government Money Market Fund (the Fund does not
currently expect to charge such fees), and the average price per share
of the Government Money Market Fund will include any changes in net
asset value during the seven-day period.
Because the Government Money Market Fund values its investments on an
amortized cost basis, it does not believe that there is likely to be any
material difference between net income for dividend and standardized
yield quotation purposes. The yield on the Government Money Market Fund
will fluctuate daily as the income earned on its investments changes at
certain times. Accordingly, there is no assurance that the yield quoted
on any given occasion will remain in effect for any period of time. The
yield should not be compared to other open-end investment companies, or
to bank time deposits and other debt securities which provide for a
fixed yield for a given period of time and which may have a different
method of computation.
The yield on the Government Money Market Fund based on the seven days
ended on December 31, 1998 was 4.50%, while the effective yield during
the same period was 4.61%.
FINANCIAL STATEMENTS
The report of Deloitte & Touche LLP, independent auditors, and the
audited financial statements of each series of Lindner Investments,
which are contained in the Lindner Investments Annual Report to
Shareholders for the period ended June 30, 1999, previously sent to
shareholders of each Fund and filed with the Securities and Exchange
Commission, are hereby incorporated by reference into this Statement of
Additional Information. Lindner Investments will furnish copies of such
Annual Report to Shareholders, without charge, upon request made to the
Secretary of Lindner Investments, 7711 Carondelet Avenue, Suite 700, St.
Louis, Missouri 63105 (telephone: 800-995-7777).
43
<PAGE>
<PAGE>
CERTAIN OTHER MATTERS
LIABILITY OF TRUSTEES AND OTHERS
The Declaration of Trust provides that the Trustees, officers,
employees, and agents of the Trust will not be liable to the Trust, to
any Fund or to a shareholder, nor will any such person be liable to any
third party in connection with the affairs of the Trust, except as such
liability may arise from his or its own bad faith, willful misfeasance,
gross negligence, or reckless disregard of duties. It also provides
that all third parties shall look solely to the Trust property for
satisfaction of claims arising in connection with the affairs of the
Trust. With the exceptions stated, the Declaration of Trust provides
that a Trustee, officer, employee, or agent is entitled to be
indemnified against all liability in connection with the affairs of the
Trust.
DESCRIPTION OF SERIES AND SHARES
The Trust was organized under Massachusetts law on July 20, 1993
pursuant to a Declaration of Trust that permits the Board of Trustees to
issue an unlimited number of full and fractional shares of beneficial
interest and to create an unlimited number of series of shares and an
unlimited number of classes of shares within any particular series of
shares. The proceeds from the sale of each series of shares will be
invested in a separate portfolio of securities.
All shares have equal voting rights, except that only shares of a
particular series are entitled to vote on matters concerning only that
series. Each issued and outstanding share is entitled to one vote, to
participate equally in dividends and distributions declared by the
respective series, and, upon liquidation or dissolution, to share in the
net assets of such series remaining after satisfaction of outstanding
liabilities. In the event a series should be unable to meet its
obligations, the remaining series would assume the unsatisfied
obligations of that series. All shares issued and outstanding are fully
paid and nonassessable by the Trust. The Trust is not required to issue
share certificates.
The shares of each series have no preference, preemptive, conversion or
similar rights. In the event the Trustees create one or more additional
series, shareholders may be given the right to exchange shares of one
fund for shares of such other series.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted by the provisions of that Act or applicable state law, or
otherwise, to the holders of the outstanding voting securities of an
investment company shall not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding
shares of each class affected by the matter. Rule 18f-2 further
provides that a class shall be deemed to be affected by a matter unless
it is clear that the interests of each class in the matter are identical
or that the matter does not affect any interest of the
44
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<PAGE>
class. Under the Rule, the approval of an investment advisory agreement
or any change in investment policy would be effectively acted upon with
respect to a class of shares only if approved by a majority of the
outstanding voting securities of such class. However, the Rule also
provides that the ratification of independent public accountants, the
approval of principal underwriting contracts, and the election of
Trustees are not subject to the separate voting requirements and may be
effectively acted upon by shareholders of the investment company voting
without regard to class.
As permitted by Massachusetts law, the Trustees may determine not to
hold shareholders meetings for the election of Trustees, subject,
however, to the requirement that a special meeting of shareholders be
called for the purpose of electing Trustees within 60 days if at any
time less than a majority of the current Trustees have been elected by
shareholders of the Trust. Because shares do not have cumulative voting
rights, 50% of the voting shares can, if they choose, elect all Trustees
being selected while the holders of the remaining shares would be unable
to elect any Trustees. The Trustees will call a special meeting of
shareholders for the purpose of voting on the question of removal of a
Trustee or Trustees if shareholders of record of 10% or more of the
Trust's outstanding shares make a written request so to do. Any ten or
more shareholders who have been shareholders for more than six months
and who hold in the aggregate the lesser of 1% of the outstanding shares
or shares with a net asset value of $25,000 may advise the Trustees that
they wish to communicate with other shareholders for the purpose of
obtaining signatures requesting Trustees to call such a meeting. The
Trustees must thereupon afford access to the list of Fund shareholders
or offer to mail such solicitations at the shareholder's cost. If a
majority of the Trustees object to the contents of the solicitation, the
Trustees may request a determination of the Securities and Exchange
Commission as to the obligation to mail such material.
Any change in the Declaration of Trust, the Advisory Contracts, the
Administration Agreements, or the Agency Agreements, if it has the
effect of increasing costs, or in the fundamental investment
restrictions of a Fund must be approved by a majority of the
shareholders of that Fund before it can become effective. A "majority"
means the vote of the lesser of (1) 67% of the shares of the applicable
Fund present at a meeting if the holders of more than 50% of the
outstanding shares are present in person or by proxy, or (2) more than
50% of the outstanding shares of a Fund.
REGISTRATION STATEMENT
The Prospectus and this Statement of Additional Information omit certain
information contained in the Registration Statement filed with the
Securities and Exchange Commission. Copies of the Registration
Statement, including such omitted items, may be obtained from the
Commission by paying the charges prescribed under its rules and
regulations. In addition, the SEC maintains an Internet Web site that
contains reports, proxy and information statements that are filed
electronically with the SEC, including the Trust's Registration
Statement and such omitted items. The address of this site is
http://www.sec.gov.
45
<PAGE>
<PAGE>
Statements contained in the Prospectus and herein as to the contents of
any contact or other document referred to are not necessarily complete,
and, in each instance, reference is made to the copy of such contract or
other document filed as an exhibit to the Registration Statement of
which the Prospectus and this Statement of Additional Information form a
part, each such statement being qualified in all respects by such
reference.
46
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<PAGE>
APPENDIX--DESCRIPTION OF BOND RATINGS
STANDARD & POOR'S RATINGS SERVICES, A DIVISION OF THE MCGRAW-HILL
COMPANIES, INC. ("S&P")
BOND RATING DEFINITIONS
AAA - Debt rated AAA has the highest rating assigned by S&P. Capacity
to pay interest and repay principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from AAA issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt in
higher rated categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than for debt in
higher rated categories.
BB, B, CCC, CC and C - Debt rated BB, B, CCC, CC and C is regarded, on
balance, as predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the
obligation. BB indicates the lowest degree of speculation and C the
highest degree of speculation. While such debt may have some quality
and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
D - Debt rated D is in payment default. The D rating category is used
when interest payments or principal payments are not made on the date
due even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period. The
D rating will also be used upon the filing of a bankruptcy petition if
debt service payments are jeopardized.
Note: The ratings from AA to CCC may be modified by the addition of a
plus or minus sign to show the relative standing within the major
categories.
MOODY'S INVESTORS SERVICE, INC.
CORPORATE BOND RATING DEFINITIONS
Aaa - Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are
47
<PAGE>
<PAGE>
generally known as high grade bonds. They are rated lower than the best
bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as an upper medium grade obligation. Factors
giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa - Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have speculative
characteristics as well.
Ba - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well-assured. Often the protection
of interest and principal payments may be very moderate and thereby not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of a
desirable investment. Assurance of interest and principal payments or
of maintenance of other terms of the security over any long period for
time may be small.
Caa - Bonds which are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect to
principal or interest.
Ca - Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have
other marked shortcomings.
C - Bonds which are rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic
rating classification from Aaa through B in its corporate bond rating
system. The modifier 1 indicates that the bond being rated ranks in the
higher end of its generic rating; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the bond ranks in the lower
end of its generic rating category.
48
<PAGE>
<PAGE>
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS.
(a) Declaration of Trust, dated July 19, 1993 (previously filed as
Exhibit 1 to Post-Effective Amendment No. 7 and incorporated herein
by reference)
(b) Bylaws (previously filed as Exhibit 2 to Post-Effective Amendment No.
7 and incorporated herein by reference)
(c) Third Amended Certificate of Designation of Series and Classes of
Shares (previously filed as Exhibit (c) to Post-Effective Amendment
No. 22 and incorporated herein by reference)
(d) (1) Advisory and Service Contract, dated as of September 23, 1993,
between the Registrant and Lindner Asset Management, Inc. relating to
the Lindner Utility Fund and the Lindner Small-Cap Fund (previously
filed as Exhibit 5(a) to Post-Effective Amendment No. 7 and
incorporated herein by reference)
(2) Advisory and Service Contract, dated as of September 23, 1993,
between the Registrant and Lindner Asset Management, Inc. relating to
the Lindner Market Neutral Fund (previously filed as Exhibit 5(b) to
Post-Effective Amendment No. 7 and incorporated herein by reference)
(3) Advisory and Service Contract, dated as of December 29, 1994,
between the Registrant and Lindner Asset Management, Inc. relating to
the Lindner International Fund (previously filed as Exhibit 5(c) to
Post-Effective Amendment No. 7 and incorporated herein by reference)
(4) Advisory and Service Contract, effective as of June 28, 1995,
between the Registrant and Lindner Asset Management, Inc. relating to
the Lindner Asset Allocation Fund (previously filed as Exhibit 5(d)
to Post-Effective Amendment No. 7 and incorporated herein by
reference)
(5) Advisory and Service Contract, effective as of June 28, 1995,
between the Registrant and Lindner Asset Management, Inc. relating to
the Lindner Large-Cap Fund (previously filed as Exhibit 5(e) to
Post-Effective Amendment No. 7 and incorporated herein by reference)
(6) Advisory Agreement, dated as of May 20, 1996, between the
Registrant and Lindner Asset Management, Inc., relating to the
Lindner Government Money Market Fund (previously filed as Exhibit
5(f) to Post-Effective Amendment No. 11 and incorporated herein by
reference)
(7) Subadvisory Agreement, dated as of May 20, 1996, between Lindner
Asset Management, Inc. and Star Bank, N.A. (now known as "Firstar
Bank, N.A."), relating to the Lindner Government Money Market Fund
(previously filed as Exhibit 5(g) to Post-Effective Amendment No. 11
and incorporated herein by reference)
(8) Advisory Agreement, dated as of April 6, 1998, between the
Registrant and Lindner Asset Management, Inc., relating to the
Lindner High-Yield Bond Fund (previously filed as Exhibit 5(h) to
Post-Effective Amendment No. 16 and incorporated herein by reference)
(9) Amendment No. 1, effective as of July 1, 1998, to Advisory and
Service Contract between the Registrant and Lindner Asset Management,
Inc. relating to the Lindner Large-Cap Fund [Exhibit (d)(5)]
(previously filed as Exhibit (d)(9) to Post-Effective Amendment No.
18 and incorporated herein by reference)
(10) Advisory Agreement, dated as of July 23, 1999, between the
Registrant and Lindner Asset Management, Inc., relating to the
Lindner Opportunities Fund (previously filed as Exhibit (d)(10) to
Post-Effective Amendment No. 22 and incorporated herein by reference)
(e) None
(f) None
(g) (1) Custody Agreement between the Registrant and Star Bank, N.A. (now
known as "Firstar Bank, N.A."), dated December 7, 1994 (previously
filed as Exhibit 8(a) to Post-Effective Amendment No. 7 and
incorporated herein by reference)
(2) Global Custody Agreement between the Registrant and Chase
Manhattan Bank, dated as of September 1, 1998 (previously filed as
Exhibit (g)(2) to Post-Effective Amendment No. 18 and incorporated
herein by reference)
(h) (1) Agency Agreement, dated September 23, 1993, between the
Registrant and Lindner Asset Management, Inc., as amended on August
18, 1994 (previously filed as Exhibit 9 to Post-Effective Amendment
No. 7 and incorporated herein by reference)
(2) Second Amendment to Agency Agreement [Exhibit (h)(1)], dated as
of September 26, 1996 (previously filed as Exhibit 9(b) to
Post-Effective Amendment No. 12 and incorporated herein by reference)
(3) Transfer Agency Agreement, dated as of May 20, 1996, between the
Registrant and Lindner Asset Management, Inc., relating to the
Lindner Government Money Market Fund (previously filed as Exhibit
9(b) to Post-Effective Amendment No. 11 and incorporated herein by
reference)
(4) Sub-Transfer Agency Agreement, dated as of November 1, 1996,
between the Registrant and State Street Bank and Trust Company,
relating to the Lindner Government Money Market Fund (previously
filed as Exhibit 9(e) to Post-Effective Amendment No. 15 and
incorporated herein by reference)
(5) Transfer Agency Agreement, dated as of April 6, 1998, between the
Registrant and Lindner Asset Management, Inc., relating to the
Lindner High-Yield Bond Fund (previously filed as Exhibit 9(d) to
Post-Effective Amendment No. 16 and incorporated herein by reference)
(6) Administrative Services Agreement, dated as of May 20, 1996,
between the Registrant and Lindner Asset Management, Inc., relating
to the Lindner Government Money Market Fund (previously filed as
Exhibit 9(c) to Post-Effective Amendment No. 11 and incorporated
herein by reference)
<PAGE>
(7) Administration Agreement, dated as of April 6, 1998, between the
Registrant and Lindner Asset Management, Inc., relating to the
Lindner High-Yield Bond Fund (previously filed as Exhibit 9(g) to
Post-Effective Amendment No. 16 and incorporated herein by reference)
(8) Third Amendment to Agency Agreement [Exhibit (h)(1)], dated as of
December 1, 1998 (previously filed as Exhibit h(8) to Post-Effective
Amendment No. 18 and incorporated herein by reference)
(9) Transfer Agency Agreement, dated as of July 23, 1999, between the
Registrant and Lindner Asset Management, Inc., relating to the
Lindner Opportunities Fund (previously filed as Exhibit (h)(9) to
Post-Effective Amendment No. 22 and incorporated herein by reference)
(10) Administration Agreement, dated as of July 23, 1999, between the
Registrant and Lindner Asset Management, Inc., relating to the
Lindner Opportunities Fund (previously filed as Exhibit (h)(10) to
Post-Effective Amendment No. 22 and incorporated herein by reference)
(i) Opinion of Dykema Gossett PLLC, counsel for the Registrant, including
consent (previously filed as Exhibit (i) to Post-Effective Amendment
No. 22 and incorporated herein by reference)
(j) Independent Auditors' Consent (filed herewith)
(k) None
(l) (1) Purchase Agreements, dated as of February 1, 1996, between the
Registrant and the initial holder of Institutional Shares of each
Series of the Registrant (previously filed as Exhibit 13 to
Post-Effective Amendment No. 8 and incorporated herein by reference)
(2) Purchase Agreement, dated as of May 15, 1996, between the
Registrant and the initial holder of shares of Lindner Government
Money Market Fund (previously filed as Exhibit 13(b) to Post-
Effective Amendment No. 11 and incorporated herein by reference)
(3) Subscription Agreement, dated April 6, 1998, between the
Registrant and the initial holder of shares of Lindner High-Yield
Bond Fund (previously filed as Exhibit (l)(3) to Post-Effective
Amendment No. 18 and incorporated herein by reference)
(4) Subscription Agreement, dated July 23, 1999, between the
Registrant and the initial holder of shares of Lindner Opportunities
Fund (previously filed as Exhibit (l)(4) to Post-Effective Amendment
No. 22 and incorporated herein by reference)
(5) Subscription Agreement, dated October 12, 1999, between the
Registrant and the initial holder of shares of Lindner Opportunities
Fund (filed herewith)
(m) Distribution and Service Plan pursuant to Rule 12b-1 (previously
filed as Exhibit 15 to Post-Effective Amendment No. 8 and
incorporated herein by reference)
(n) Not required
(o) Lindner Investments Rule 18f-3 Dual-Class Plan (previously filed as
Exhibit 18 to Post-Effective Amendment No. 8 and incorporated herein
by reference)
<PAGE>
<PAGE>
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
Not applicable.
ITEM 25. INDEMNIFICATION.
The Declaration of Trust and Bylaws of the Registrant contain
provisions covering indemnification of the officers and trustees. The
following are summaries of the applicable provisions.
The Registrant's Declaration of Trust provides that every person who
is or has been a trustee, officer, employee or agent of the Registrant and
every person who serves at the trustees request as director, officer,
employee or agent of another enterprise will be indemnified by the
Registrant to the fullest extent permitted by law against all liabilities
and against all expenses reasonably incurred or paid by him in connection
with any debt, claim, action, demand, suit, proceeding, judgment, decree,
liability or obligation of any kind in which he becomes involved as a party
or otherwise or is threatened by virtue of his being or having been a
trustee, officer, employee or agent of the Registrant or of another
enterprise at the request of the Registrant and against amounts paid or
incurred by him in the compromise or settlement hereof.
No indemnification will be provided to a trustee or officer: (i)
against any liability to the Registrant or its shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office ("disabling conduct");
(ii) with respect to any matter as to which he shall, by the court or other
body by or before which the proceeding was brought or engaged, have been
finally adjudicated to be liable by reason of disabling conduct; (iii) in
the absence of a final adjudication on the merits that such trustee or
officer did not engage in disabling conduct, unless a reasonable
determination based upon a review of the facts that the person to be
indemnified is not liable by reason of such conduct, is made by vote of a
majority of a quorum of the trustees who are neither interested persons nor
parties to the proceedings, or by independent legal counsel, in a written
opinion.
The rights of indemnification may be insured against by policies
maintained by the Registrant, will be severable, will not affect any other
rights to which any trustee, officer, employee or agent may now or
hereafter be entitled, will continue as to a person who has ceased to be
such trustee, officer, employee, or agent and will inure to the benefit of
the heirs, executors and administrators of such a persons; provided,
however, that no person may satisfy any right of indemnity or reimbursement
except out of the property of the Registrant, and no other person will be
personally liable to provide indemnity or reimbursement (except an insurer
or surety or person otherwise bound by contract).
Article XIV of the Registrant's Bylaws provides that the Registrant
will indemnify each trustee and officer to the full extent permitted by
applicable federal, state and local statutes, rules and regulations and the
Declaration of Trust, as amended from time to time. With respect to a
proceeding against a trustee or officer brought by or on behalf of the
Registrant to obtain a judgment or decree in its favor, the Registrant will
provide the officer or trustee with the same indemnification, after the
same determination, as it is required to provide with respect to a
proceeding not brought by or on behalf of the Registrant.
This indemnification will be provided with respect to an action, suit
proceeding arising from an act or omission or alleged act or omission,
whether occurring before or after the adoption of Article XIV of the
Registrant's Bylaws.
ITEM 26. BUSINESS AND OTHER CONNECTIONS WITH INVESTMENT ADVISOR.
Information concerning the business, profession, vocation, or
employment of a substantial nature during the past two fiscal years of each
officer and director of the Adviser that also serves as an officer and/or
director of the Registrant (i.e., Messrs. Eric E. Ryback, Brian L.
Blomquist, and Doug T. Valassis) is set forth in Part B of this
Registration Statement under the heading "Management of the Trust", and is
incorporated herein by reference. The following chart summarizes the
business, profession, vocation, or employment of a substantial nature in
which each other officer and director of the Adviser is or has been engaged
at any time during the past two fiscal years:
Position Business, Profession,
Name with Adviser Vocation, or Employment
- ---- ------------ -----------------------
D. Craig Valassis Director Executive Vice President of Franklin
Enterprises, Inc., a private
investment firm located at 520 Lake
Cook Road, Suite 380, Lake Forest,
Illinois 60045.
Robert Miller Director Vice President and Controller of
Franklin Enterprises, Inc.
ITEM 27. PRINCIPAL UNDERWRITERS.
Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
All accounts and records required to be maintained by the Registrant
are maintained by the transfer agent, Lindner Asset Management, Inc., 7711
Carondelet Avenue, P.O. Box 11208, St. Louis, Missouri 63105.
ITEM 29. MANAGEMENT SERVICES.
There are no management-related service contracts not discussed in
Part A or Part B of this Registration Statement.
ITEM 30. UNDERTAKINGS.
Registrant undertakes to furnish to each person to whom a prospectus
is delivered a copy of Registrant's latest Annual Report to Shareholders,
upon request and without charge.
Registrant undertakes to call a meeting of shareholders for the
purpose of voting upon the questions of removal of a trustee or trustees if
requested to do so by the holders of at least 10% of Registrant's
outstanding shares. Registrant will stand ready to assist shareholder
communications in connection with any meeting of shareholders as prescribed
in Section 16(c) of the Investment Company Act of 1940.
C-2
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment to its Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Clayton, and State of Missouri, on the 15th day of October, 1999.
LINDNER INVESTMENTS
By: /S/ ERIC E. RYBACK
Eric E. Ryback, President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment has been signed below by the following persons in
the capacities indicated on October 15, 1999.
<F**> Chairman and Trustee
- -------------------------
Doug T. Valassis
/S/ ERIC E. RYBACK President and Trustee (Principal Executive Officer)
Eric E. Ryback
/S/ BRIAN L. BLOMQUIST Vice President--Operations, Secretary and Treasurer
Brian L. Blomquist (Principal Financial and Accounting Officer)
<F**> Trustee
- -------------------------
Robert L. Byman
<F**> Trustee
- -------------------------
Terrence P. Fitzgerald
<F**> Trustee
- -------------------------
Marc P. Hartstein
<F**> Trustee
- -------------------------
Peter S. Horos
<F**> Trustee
- -------------------------
Donald J. Murphy
<F**> Trustee
- -------------------------
Dennis P. Nash
[FN]
<F**>Executed on behalf of the indicated person by the undersigned,
pursuant to power of attorney previously filed and incorporated herein by
reference.
By: /S/ ERIC E. RYBACK
Eric E. Ryback, Attorney-in-fact
C-3
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
(j) Independent Auditors' Consent
(l)(5) Subscription Agreement, dated October 12, 1999, between
the Registrant and the initial holder of shares of
Lindner Opportunities Fund
<PAGE>
EXHIBIT j
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective
Amendment No. 23 to Registration Statement under the Securities Act of
1933 (filed under Securities Act File No. 33-66712) and in Post-
Effective Amendment No. 25 to Registration Statement under the
Investment Company Act of 1940 (filed under Investment Company Act File
No. 811-7932)(the "Post-Effective Amendment"), of our report dated
August 11, 1999, appearing in the Annual Report to Shareholders of
Lindner Investments, relating to the Lindner Asset Allocation Fund,
Lindner Large-Cap Fund, Lindner Small-Cap Fund, Lindner Utility Fund,
Lindner Market Neutral Fund and Lindner Government Money Market Fund for
the fiscal year ended June 30, 1999, which report is incorporated by
reference in the Statement of Additional Information forming a part of
the Post-Effective Amendment, and to the references to us under the
headings "Investment Advisory and Other Services--Custodians and
Independent Auditors" and "Financial Statements" in the Statement of
Additional Information forming a part of such Post-Effective Amendment.
/S/ DELOITTE & TOUCHE LLP
St. Louis, Missouri
October 14, 1999
<PAGE>
EXHIBIT l(5)
SUBSCRIPTION AGREEMENT
Valassis Enterprises, Inc. ("Purchaser"), hereby subscribes for
41,666.667 shares (the "Shares") of the Lindner Opportunities Fund (the
"Fund") and agrees to pay $12 per Share for all such Shares. Purchaser
understands that the Fund has filed a Registration Statement with the
Securities and Exchange Commission containing a Prospectus that describes
the Fund and the Shares, a copy of which has been received by the
Purchaser. Purchaser has been informed by the investment adviser to the
Fund that the Registration Statement referred to above became effective on
October 11, 1999.
Purchaser represents and warrants to the Fund as follows:
(a) Purchaser is aware that no federal or state agency has made any
finding or determination as to the fairness for investment, nor any
recommendation or endorsement of the Shares;
(b) Purchaser has such knowledge and experience of financial and
business matters as will enable it to utilize the information made
available to it in connection with the offering of the Shares to evaluate
the merits and risks of its investment and make an informed investment
decision;
(c) Purchaser is purchasing the Shares for investment and not with
a view to their redemption, distribution or resale, in whole or in part;
(d) Purchaser recognizes that the Fund has no operating history and
that its investment in the Shares involves certain risks. Purchaser has
fully understands such risks and acknowledges that its has sufficient
financial resources to bear the full loss of its investment in the Shares.
VALASSIS ENTERPRISES, INC.
By: /S/ DOUG T. VALASSIS
Doug T. Valassis, President
Dated: October 12, 1999
D1\175668.2
ID\ PRR