BERGER INVESTMENT PORTFOLIO TRUST
485APOS, 2000-11-15
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<PAGE>   1

    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 15, 2000

                                                      1933 Act File No. 33-69460
                                                      1940 Act File No. 811-8046

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

[ ] Pre-Effective Amendment No.

[X] Post-Effective Amendment No. 33

                                     and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

[X] Amendment No. 35

                        (Check appropriate box or boxes)

BERGER INVESTMENT PORTFOLIO TRUST
--------------------------------------------------------------------------------
               (Exact Name of Registrant as Specified in Charter)

210 University Boulevard, Suite 900, Denver, Colorado     80206
--------------------------------------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (303) 329-0200
                                                    --------------

Jack R. Thompson, 210 University Boulevard, Suite 900, Denver, CO 80206
--------------------------------------------------------------------------------
                     (Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: As soon as practicable after this
post-effective amendment becomes effective.

It is proposed that this filing will become effective: (check appropriate box)

                  Immediately upon filing pursuant to paragraph (b)
                  On (date) pursuant to paragraph (b)
XX                60 days after filing pursuant to paragraph (a)(1)
                  on (date) pursuant to paragraph (a)(1)
                  75 days after filing pursuant to paragraph (a)(2)
                  on (date) pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:

[ ]               this post-effective amendment designates a new effective date
                  for a previously filed post-effective amendment.

Title of Securities Being Registered: Shares of Beneficial Interest of the
Berger Information Technology Fund -- Investor Shares, Berger Information
Technology Fund -- Institutional Shares, Berger New Generation Fund -- Investor
Shares, Berger New Generation Fund -- Institutional Shares, Berger Select Fund,
Berger Small Company Growth Fund -- Investor Shares, Berger Small Company Growth
Fund -- Institutional Shares, Berger Mid Cap Growth Fund, Berger Mid Cap Value
Fund, and Berger Balanced Fund.



<PAGE>   2


                                EXPLANATORY NOTE

     This amendment to the Registration Statement of the Berger Investment
Portfolio Trust contains the following:

Four Prospectuses:

         One for the combined retail Berger Funds, including the Berger
         Information Technology Fund -- Investor Shares, Berger New Generation
         Fund -- Investor Shares, Berger Select Fund, Berger Small Company
         Growth Fund -- Investor Shares, Berger Mid Cap Growth Fund, Berger Mid
         Cap Value Fund, and Berger Balanced Fund.
         One for the Berger Information Technology Fund -- Institutional Shares
         One for the Berger New Generation Fund -- Institutional Shares class
         One for the Berger Small Company Growth Fund -- Institutional Shares
         class

Four Statements of Additional Information:

         One for the combined retail Berger Funds including the Berger
         Information Technology Fund -- Investor Shares, Berger New Generation
         Fund -- Investor Shares, Berger Select Fund, Berger Small Company
         Growth Fund -- Investor Shares, Berger Mid Cap Growth Fund, Berger Mid
         Cap Value Fund, and Berger Balanced Fund.
         One for the Berger Information Technology Fund -- Institutional Shares
         One for the Berger New Generation Fund -- Institutional Shares class
         One for the Berger Small Company Growth Fund -- Institutional Shares
         class

One Part C

This amendment does not amend nor affect the Prospectus or SAI covering the
Berger Large Cap Value Fund and the Fund's most recent filing dated October 19,
2000.


<PAGE>   3

                        January 29, 2001

                        Berger Funds

                        Prospectus

                        [BERGER FUNDS LOGO]


                        BERGER INFORMATION TECHNOLOGY FUND - INVESTOR SHARES

                        BERGER NEW GENERATION FUND - INVESTOR SHARES

                        BERGER SELECT FUND

                        BERGER SMALL COMPANY GROWTH FUND - INVESTOR SHARES


                        BERGER MID CAP GROWTH FUND


                        BERGER MID CAP VALUE FUND

                        BERGER GROWTH FUND


                        BERGER INTERNATIONAL FUND

                        BERGER LARGE CAP GROWTH FUND


                        BERGER BALANCED FUND

The Securities and Exchange Commission has not approved or disapproved any
shares offered in this prospectus, or determined whether this prospectus is
accurate or complete. Anyone who tells you otherwise is committing a crime. Like
all mutual funds, an investment in the Berger Funds is not a bank deposit and is
not insured or guaranteed by the FDIC or any other government agency. There is
no guarantee that the Funds will meet their investment goals, and although you
have the potential to make money, you could also lose money in the Funds.

<PAGE>   4

















BERGER FUNDS, BERGER NEW GENERATION FUND, BERGER SMALL COMPANY GROWTH FUND,
BERGER BALANCED FUND, BERGER MID CAP GROWTH FUND and BERGER MID CAP VALUE FUND
are registered service marks of Berger LLC; The BERGER MOUNTAIN LOGO is a
registered trademark of Berger LLC; BERGER INFORMATION TECHNOLOGY FUND, BERGER
SELECT FUND, BERGER INTERNATIONAL FUND, BERGER GROWTH FUND and BERGER LARGE CAP
GROWTH FUND are service marks of Berger LLC; other marks referred to herein are
the trademarks, service marks, registered trademarks or registered service marks
of the respective owners thereof.


<PAGE>   5
                                                                               3

CONTENTS
--------------------------------------------------------------------------------

BERGER FUNDS(R) are a no-load family of mutual funds. A mutual fund pools money
from shareholders and invests in a portfolio of securities. Each of the
following sections introduces a Fund, its goal(s), principal investment
strategies and principal risks. They also contain expense and performance
information.


<TABLE>
<S>                                                                             <C>
Berger Information Technology Fund(SM) - Investor Shares ......................   4

Berger New Generation Fund(R) - Investor Shares ...............................   6

Berger Select Fund(SM) ........................................................   8

Berger Small Company Growth Fund(R) - Investor Shares .........................  10

Berger Mid Cap Growth Fund(R) .................................................  12

Berger Mid Cap Value Fund(R) ..................................................  14

Berger Growth Fund(SM) ........................................................  16

Berger International Fund(SM) .................................................  18

Berger Large Cap Growth Fund(SM) ..............................................  20

Berger Balanced Fund(R) .......................................................  22

INVESTMENT TECHNIQUES, SECURITIES AND ASSOCIATED RISKS ........................  24

Risk and Investment Table .....................................................  25

Risk and Investment Glossary ..................................................  26

BUYING SHARES .................................................................  28

SELLING (REDEEMING) SHARES ....................................................  29

INFORMATION ABOUT YOUR ACCOUNT ................................................  30

Exchanging Shares .............................................................  30

Signature Guarantees/Special Documentation ....................................  30

Your Share Price ..............................................................  30

OTHER INFORMATION ABOUT YOUR ACCOUNT ..........................................  31

Distributions and Taxes .......................................................  33

Tax-Sheltered Retirement Plans ................................................  33

ORGANIZATION OF THE BERGER FUNDS FAMILY .......................................  34

Investment Managers ...........................................................  34

12b-1 Arrangements ............................................................  36

Special Fund Structures .......................................................  36

FINANCIAL HIGHLIGHTS FOR THE BERGER FUNDS FAMILY ..............................  37

Berger Information Technology Fund - Investor Shares ..........................  37

Berger New Generation Fund - Investor Shares ..................................  39

Berger Select Fund ............................................................  39

Berger Small Company Growth Fund - Investor Shares ............................  40

Berger Mid Cap Growth Fund ....................................................  41

Berger Mid Cap Value Fund .....................................................  41

Berger Growth Fund ............................................................  42

Berger International Fund .....................................................  42

Berger Large Cap Growth Fund ..................................................  44

Berger Balanced Fund ..........................................................  44
</TABLE>



                             Berger Funds o January 29, 2001 Combined Prospectus

<PAGE>   6
4


BERGER INFORMATION TECHNOLOGY FUND -- INVESTOR SHARES     Ticker Symbol    BINVX
--------------------------------------------------------------------------------

THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES

The Fund aims for capital appreciation. In pursuing its goal, the Fund invests
at least 80% of its assets in common stocks of companies in the information
technology group of industries, such as software, hardware, computer consulting
services, communications and Internet services and products. The Fund's
investment manager analyzes trends in information technology spending and
demand, then identifies companies it believes are best positioned to benefit
from those trends. The Fund generally invests the remainder of its assets in
information technology-related companies whose stock price the investment
manager believes is undervalued relative to their assets, earnings, cash flow or
business franchise.

The Fund's investment manager generally looks for companies:

o    That dominate their industries or a particular market segment

o    That have or are developing products or services that represent significant
     technological advancements or improvements

o    That have strong fundamentals, strong management and strong product
     positioning.

The Fund primarily invests in common stocks. The Fund is free to invest in
companies of any size market capitalization. The Fund's investment manager will
generally sell a security when it no longer meets the manager's investment
criteria or when it has met the manager's expectations for appreciation.

PRINCIPAL RISKS


You may be interested in the Fund if you are comfortable with above-average risk
and intend to make a long-term investment commitment. Like all managed funds,
there is a risk that the investment manager's strategy for managing the Fund may
not achieve the desired results. In addition, the price of common stock moves up
and down in response to corporate earnings and developments, economic and market
conditions and unanticipated events. As a result, the price of the Fund's
investments may go down and you could lose money on your investment.


Given the Fund's concentration in industries that are rapidly changing, its
share price may fluctuate more than that of funds invested in more stable
industries. Companies in the information technology industries may have narrow
product lines and their products and services are often subject to intense
competition and rapid obsolescence.


Because the Fund's investments are focused in the information technology sector,
the Fund is more susceptible to adverse events and market pressures impacting
the industries included in that sector, which may pose greater market and
liquidity risk.


See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.

THE FUND'S PAST PERFORMANCE


The information below shows the Fund's performance since it began operations
through December 31, 2000. These returns include reinvestment of all dividends
and capital gains distributions and reflect Fund expenses. As with all mutual
funds, past performance does not guarantee future results.


Year-by-year returns show how the Fund's performance has varied by illustrating
the differences for each full calendar year since the Fund began.


                  YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31


                                    [CHART]


<TABLE>
<S>                                          <C>
                               1998          62.72%
                               1999         161.40%
                               2000               %
</TABLE>



                            BEST QUARTER:     %

                            WORST QUARTER:    %

Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Wilshire 5000 Index
(Wilshire 5000). While the Fund does not seek to match the returns of the
Wilshire 5000, this index is a good indicator of general stock market
performance. You may not invest in the Wilshire 5000, and unlike the Fund, it
does not incur fees or charges.



Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   7
                                                                               5


BERGER FUNDS
--------------------------------------------------------------------------------

AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2000

<TABLE>
<CAPTION>
                                           Life of the Fund
                                1 Year     (April 8, 1997)
--------------------------------------------------------------------------------
<S>                             <C>         <C>
The Fund                           %              %
Wilshire 5000                      %              %
--------------------------------------------------------------------------------
</TABLE>


FUND EXPENSES

As a shareholder in the Fund, you do not pay any sales loads, but you do
indirectly bear Annual Fund Operating Expenses, which vary from year to year.


<TABLE>
SHAREHOLDER TRANSACTION EXPENSES                                               %
--------------------------------------------------------------------------------
<S>                                                                         <C>
Redemption Fee (as a percentage of amount redeemed
or exchanged of shares are held less than 6 months)                         1.00
Exchange Fee*                                                               None
--------------------------------------------------------------------------------
</TABLE>



<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)                                             %
--------------------------------------------------------------------------------
<S>                                                                          <C>
Management fee                                                               .85
Distribution (12b-1) fee                                                     .25
Other expenses                                                               .53
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses                                        1.63
--------------------------------------------------------------------------------
</TABLE>


*The 1% redemption fee referenced in the table will be imposed on shares
exchanged if held less than 6 months, since an exchange is treated as a
redemption followed by a purchase.


UNDERSTANDING EXPENSES


Annual Fund operating expenses are paid by the Fund. As a result, they reduce
the Fund's return. Fund expenses include management fees, 12b-1 fees and
administrative costs such as shareholder recordkeeping and reports, custodian
and pricing services and registration fees.

EXAMPLE COSTS


The following example helps you compare the cost of investing in the Fund with
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses:


o  $10,000 initial investment

o  5% total return for each year

o  Fund operating expenses remain the same for each period

o  Redemption after the end of each period

Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:


<TABLE>
<CAPTION>
Years                                                                          $
--------------------------------------------------------------------------------
<S>                                                                          <C>
One
Three
Five
Ten
--------------------------------------------------------------------------------
</TABLE>





                             Berger Funds o January 29, 2001 Combined Prospectus

<PAGE>   8
6


BERGER NEW
GENERATION FUND --
INVESTOR SHARES                                        Ticker Symbol       BENGX
--------------------------------------------------------------------------------

THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES

The Fund aims for capital appreciation. In pursuing that goal, the Fund
primarily invests in the common stocks of companies with potential for
significant earnings growth.

The Fund focuses on leading-edge companies with new ideas, technologies or
methods of doing business. Its investment manager seeks companies it believes
have the potential to change the direction or dynamics of the industries in
which they operate or significantly influence the way businesses or consumers
conduct their affairs.

THE FUND'S INVESTMENT MANAGER GENERALLY LOOKS FOR COMPANIES:

o  In business sectors characterized by rapid change, regardless of the
   company's size


o  With favorable long-term growth potential because of their new or
   innovative products or services


o  With management and financial strength to fulfill their vision and grow
   their business.

The Fund invests in common stocks, both domestic and foreign, and other
securities with equity features, such as convertible securities and preferred
stocks. Due to the Fund's focus on companies with the characteristics described
above, the Fund generally is weighted toward small market capitalization
companies, although it is free to invest in companies with larger market
capitalizations as well. The Fund's investment manager will generally sell a
security when it no longer meets the manager's investment criteria or when it
has met the manager's expectations for appreciation. The Fund's investment
manager may actively trade the portfolio in pursuit of the Fund's goal.

PRINCIPAL RISKS


You may be interested in the Fund if you are comfortable with above-average risk
and intend to make a long-term investment commitment. Like all managed funds,
there is a risk that the investment manager's strategy for managing the Fund may
not achieve the desired results. In addition, the price of common stock moves up
and down in response to corporate earnings and developments, economic and market
conditions and unanticipated events. As a result, the price of the Fund's
investments may go down and you could lose money on your investment.

Given the Fund's weighting toward small companies in rapidly changing
industries, its share price may fluctuate more than that of funds invested in
larger companies or more stable industries. Small companies may pose greater
market, liquidity and information risks because of narrow product lines, limited
financial resources, less depth in management or a limited trading market for
their stocks. In addition, products and services in rapidly changing industries
may be subject to intense competition and rapid obsolescence and may require
regulatory approvals prior to their use. The Fund's investments are often
focused in a small number of business sectors, which may pose greater market and
liquidity risks. In addition, the Fund's active trading will cause the Fund to
have an increased portfolio turnover rate. Higher turnover rates may result in
higher brokerage costs to the Fund and in higher net taxable gains for you as an
investor.


See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.

THE FUND'S PAST PERFORMANCE


The information below shows the Fund's performance since it began operations
through December 31, 2000. These returns include reinvestment of all dividends
and capital gains distributions and reflect Fund expenses. As with all mutual
funds, past performance does not guarantee future results.


Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year since the Fund began.

                 YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31

                                    [CHART]

<TABLE>
<S>                                          <C>
                            1997             24.22%
                            1998             23.00%
                            1999            144.20%
                            2000                  %
</TABLE>



                            BEST QUARTER:         %

                            WORST QUARTER:        %





Berger Funds o January 29, 2001 Combined Prospectus

<PAGE>   9
                                                                               7

BERGER FUNDS
--------------------------------------------------------------------------------

Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Standard & Poor's 500
Index (S&P 500). While the Fund does not seek to match the returns of the S&P
500, this index is a good indicator of general stock market performance. You may
not invest in the S&P 500, and unlike the Fund, it does not incur fees or
charges.


AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2000

                                                  Life of the Fund
                                1 Year            (March 29, 1996)
--------------------------------------------------------------------------------
The Fund                           %                        %
S&P 500                            %                        %
--------------------------------------------------------------------------------


FUND EXPENSES

As a shareholder in the Fund, you do not pay any sales loads, redemption or
exchange fees, but you do indirectly bear Annual Fund Operating Expenses, which
vary from year to year.


<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)                                              %
--------------------------------------------------------------------------------
<S>                                                                          <C>
Management fee                                                               .83
Distribution (12b-1) fee                                                     .25
Other expenses                                                               .22
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses                                        1.30
--------------------------------------------------------------------------------
</TABLE>



UNDERSTANDING EXPENSES


Annual Fund operating expenses are paid by the Fund. As a result, they reduce
the Fund's return. Fund expenses include management fees, 12b-1 fees and
administrative costs such as shareholder recordkeeping and reports, custodian
and pricing services and registration fees.

EXAMPLE COSTS


The following example helps you compare the cost of investing in the Fund with
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses:


o  $10,000 initial investment

o  5% total return for each year

o  Fund operating expenses remain the same for each period

o  Redemption after the end of each period

Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:


<TABLE>
<CAPTION>
Years                                                                          $
--------------------------------------------------------------------------------
<S>                                                                            <C>
One
Three
Five
Ten
--------------------------------------------------------------------------------
</TABLE>





                             Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   10
8

BERGER
SELECT FUND                                       Ticker Symbol            BESLX
--------------------------------------------------------------------------------
THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES

The Fund aims for capital appreciation. In pursuing that goal, the Fund
primarily invests in the common stocks of companies with superior potential for
strong earnings growth.


This nondiversified Fund normally invests in a core portfolio of 20-30 common
stocks selected by the Fund's three co-portfolio managers. Each co-portfolio
manager selects a portion of the stocks that comprise the portfolio. The stock
selection focuses on companies of any size whose growth potential is not yet
fully reflected in the company's stock price.


The Fund's investment manager generally looks for companies with:

o  Solid fundamental growth opportunities and that are market share leaders in
   their industries or have the potential to develop a large market for their
   products and services

o  Strong, capable management teams with clearly defined strategies for revenue
   and earnings growth

o  A Catalyst for positive earnings developments such as evolving product
   cycles, special situations or changing economic conditions.

The Fund's investment manager will generally sell a security when it no longer
meets the manager's investment criteria or when it has met the manager's
expectations for appreciation. The Fund's investment manager may actively trade
the portfolio in pursuit of the Fund's goal. Due to this and the Fund's
relatively small number of holdings, the annual portfolio turnover rate may be
higher than other mutual funds.

PRINCIPAL RISKS


You may be interested in the Fund if you are comfortable with above-average risk
and intend to make a long-term investment commitment. Like all managed funds,
there is a risk that the investment manager's strategy for managing the Fund may
not achieve the desired results. In addition, the price of common stock moves up
and down in response to corporate earnings and developments, economic and market
conditions and unanticipated events. As a result, the price of the Fund's
investments may go down and you could lose money on your investment.

The Fund's share price may fluctuate more than the market in general and most
equity funds because of its ability as a nondiversified fund to take larger
positions in a smaller number of companies. As a result, the gains or losses on
a single stock will have a greater impact on the Fund's share price. The Fund's
investments are often focused in a small number of business sectors, which may
pose greater market and liquidity risks. In addition, the Fund's active trading
will cause the Fund to have an increased portfolio turnover rate. Higher
turnover rates may result in higher brokerage costs to the Fund and in higher
net taxable gains for you as an investor.


See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.

THE FUND'S PAST PERFORMANCE


The information below shows the Fund's performance since it began operations
through December 31, 2000. These returns include reinvestment of all dividends
and capital gains distributions and reflect Fund expenses. As with all mutual
funds, past performance does not guarantee future results.


Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year since the Fund began.

                 YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31

                                    [CHART]

<TABLE>
<S>                                     <C>
                              1998      72.26%
                              1999      81.68%
                              2000           %
</TABLE>



                              BEST QUARTER:       %

                              WORST QUARTER:      %

Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Standard & Poor's 500
Index (S&P 500). While the Fund does not seek to match the returns of the S&P
500, this index is a good indicator of general stock market performance. You may
not invest in the S&P 500, and unlike the Fund, it does not incur fees or
charges.





Berger Funds o January 29, 2001 Combined Prospectus

<PAGE>   11
                                                                               9

BERGER FUNDS
--------------------------------------------------------------------------------


AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2000



<TABLE>
<CAPTION>
                                           Life of the Fund
                               1 Year     (December 31, 1997)
--------------------------------------------------------------------------------
<S>                            <C>        <C>
The Fund                          %               %
S&P 500                           %               %
--------------------------------------------------------------------------------
</TABLE>


FUND EXPENSES

As a shareholder in the Fund, you do not pay any sales loads, redemption or
exchange fees, but you do indirectly bear Annual Fund Operating Expenses, which
vary from year to year.


<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)                                             %
--------------------------------------------------------------------------------
<S>                                                                          <C>
Management fee                                                               .75
Distribution (12b-1) fee                                                     .25
Other expenses                                                               .23
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses                                        1.23
--------------------------------------------------------------------------------
</TABLE>



UNDERSTANDING EXPENSES


Annual Fund operating expenses are paid by the Fund. As a result, they reduce
the Fund's return. Fund expenses include management fees, 12b-1 fees and
administrative costs such as shareholder recordkeeping and reports, custodian
and pricing services and registration fees.

EXAMPLE COSTS


The following example helps you compare the cost of investing in the Fund with
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses:


o  $10,000 initial investment

o  5% total return for each year

o  Fund operating expenses remain the same for each period

o  Redemption after the end of each period

Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:


<TABLE>
<CAPTION>
Years                                                                          $
--------------------------------------------------------------------------------
<S>                                                                          <C>
One
Three
Five
Ten
--------------------------------------------------------------------------------
</TABLE>




                             Berger Funds o January 29, 2001 Combined Prospectus

<PAGE>   12
10


BERGER SMALL COMPANY
GROWTH FUND --
INVESTOR SHARES                                        Ticker Symbol       BESCX
--------------------------------------------------------------------------------

THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES

The Fund aims for capital appreciation. In pursuing that goal, the Fund
primarily invests in the common stocks of small companies with the potential for
rapid earnings growth.

The Fund's stock selection focuses on companies that either occupy a dominant
position in an emerging industry or have a growing market share in a larger,
fragmented industry.

The Fund's investment manager generally looks for companies with:

o  A proprietary technology, product or service that may enable the company to
   be a market share leader

o  Strong entrepreneurial management with clearly defined strategies for growth

o  Relatively strong balance sheets.

Under normal circumstances, the Fund invests at least 65% of its assets in
equity securities of companies whose market capitalization, at the time of
initial purchase, is less than the 12-month average of the maximum market
capitalization for companies included in the Russell 2000 Index (Russell 2000).
This average is updated monthly. The Fund's investment manager will generally
sell a security when it no longer meets the manager's investment criteria or
when it has met the manager's expectations for appreciation. The Fund's
investment manager may actively trade the portfolio in pursuit of the Fund's
goal.

PRINCIPAL RISKS


You may be interested in the Fund if you are comfortable with above-average risk
and intend to make a long-term investment commitment. Like all managed funds,
there is a risk that the investment manager's strategy for managing the Fund may
not achieve the desired results. In addition, the price of common stock moves up
and down in response to corporate earnings and developments, economic and market
conditions and unanticipated events. As a result, the price of the Fund's
investments may go down and you could lose money on your investment.

The Fund's share price may fluctuate more than that of funds primarily invested
in stocks of mid-sized and large companies. Small company securities may
underperform as compared to the securities of larger companies. They may also
pose greater market, liquidity and information risks because of narrow product
lines, limited financial resources, less depth in management or a limited
trading market for their stocks. The Fund's investments are often focused in a
small number of business sectors, which may pose greater market and liquidity
risks. In addition, the Fund's active trading will cause the Fund to have an
increased portfolio turnover rate. Higher turnover rates may result in higher
brokerage costs to the Fund and in higher net taxable gains for you as an
investor.


See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.

THE FUND'S PAST PERFORMANCE


The information below shows the Fund's performance since it began operations
through December 31, 2000. These returns include reinvestment of all dividends
and capital gains distributions and reflect Fund expenses. As with all mutual
funds, past performance does not guarantee future results.


Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year since the Fund began.

                 YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31

                                    [CHART}

<TABLE>
<S>                                <C>
                    1994           13.73%
                    1995           33.80%
                    1996           16.77%
                    1997           16.16%
                    1998            3.17%
                    1999          104.39%
                    2000                %
</TABLE>



                              BEST QUARTER:      %

                              WORST QUARTER:     %

Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Russell 2000. While the
Fund does not seek to match the returns of the Russell 2000, this index is a
good indicator of small company stock market performance. You may not invest in
the Russell 2000, and unlike the Fund, it does not incur fees or charges.




Berger Funds o January 29, 2001 Combined Prospectus

<PAGE>   13
                                                                              11

BERGER FUNDS
--------------------------------------------------------------------------------


AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2000



<TABLE>
<CAPTION>
                                          Life of the Fund
                      1 Year   5 Years    (December 30, 1993)
--------------------------------------------------------------------------------
<S>                   <C>      <C>        <C>
The Fund                 %        %             %
Russell 2000             %        %             %
--------------------------------------------------------------------------------
</TABLE>


FUND EXPENSES

As a shareholder in the Fund, you do not pay any sales loads, redemption or
exchange fees, but you do indirectly bear Annual Fund Operating Expenses, which
vary from year to year.


<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)                                             %
--------------------------------------------------------------------------------
<S>                                                                          <C>
Management fee                                                               .81
Distribution (12b-1) fee                                                     .25
Other expenses                                                               .21
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses                                        1.27
--------------------------------------------------------------------------------
</TABLE>



UNDERSTANDING EXPENSES


Annual Fund operating expenses are paid by the Fund. As a result, they reduce
the Fund's return. Fund expenses include management fees, 12b-1 fees and
administrative costs such as shareholder recordkeeping and reports, custodian
and pricing services and registration fees.

EXAMPLE COSTS


The following example helps you compare the cost of investing in the Fund with
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses:


o  $10,000 initial investment

o  5% total return for each year

o  Fund operating expenses remain the same for each period

o  Redemption after the end of each period

Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:


<TABLE>
<CAPTION>
Years                                                                          $
--------------------------------------------------------------------------------
<S>                                                                            <C>
One
Three
Five
Ten
--------------------------------------------------------------------------------
</TABLE>





                             Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   14
12

BERGER MID CAP
GROWTH FUND                                            Ticker Symbol       BEMGX
--------------------------------------------------------------------------------


THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES


The Fund aims for capital appreciation. In pursuing that goal, the Fund
primarily invests in the common stocks of mid-sized companies with the potential
for strong earnings growth.

Stock selection focuses on companies that commit their resources to innovative
products or services for unique, changing or rapidly growing markets.

The Fund's investment manager generally looks for companies with:

o  Strong revenue and earnings growth fundamentals and dominant market share in
   their industry or business sector

o  Strong management teams with established organizational structures

o  Solid balance sheets and the ability to efficiently finance their growth
   through sufficient resources and access to capital.

Under normal circumstances, the Fund invests at least 65% of its assets in
equity securities of companies whose market capitalization falls, at the time of
initial purchase, within a range of $1 billion to the 12-month average of the
maximum market capitalization for companies included in the Standard & Poor's
Mid Cap 400 Index (S&P 400). This average is updated monthly. The Fund's
investment manager will generally sell a security when it no longer meets the
manager's investment criteria or when it has met the manager's expectations for
appreciation. The Fund's investment manager may actively trade the portfolio in
pursuit of the Fund's goal.

PRINCIPAL RISKS


You may be interested in the Fund if you are comfortable with above-average risk
and intend to make a long-term investment commitment. Like all managed funds,
there is a risk that the investment manager's strategy for managing the Fund may
not achieve the desired results. In addition, the price of common stock moves up
and down in response to corporate earnings and developments, economic and market
conditions and unanticipated events. As a result, the price of the Fund's
investments may go down and you could lose money on your investment.

The Fund's share price may fluctuate more than that of funds primarily invested
in stocks of large companies. Mid-sized companies may pose greater market,
liquidity and information risks because of narrow product lines, limited
financial resources, less depth in management or a limited trading market for
their stocks. The Fund's investments are often focused in a small number of
business sectors, which may pose greater market and liquidity risks. In
addition, the Fund's active trading will cause the Fund to have an increased
portfolio turnover rate. Higher turnover rates may result in higher brokerage
costs to the Fund and in higher net taxable gains for you as an investor.


See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.

THE FUND'S PAST PERFORMANCE


The information below shows the Fund's performance since it began operations
through December 31, 2000. These returns include reinvestment of all dividends
and capital gains distributions and reflect Fund expenses. As with all mutual
funds, past performance does not guarantee future results.


Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year since the Fund began.

                 YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31

                                    [CHART]

<TABLE>
<S>                                    <C>
                         1998           54.38%
                         1999          151.46%
                         2000                %
</TABLE>



                             BEST QUARTER:     %

                             WORST QUARTER:    %

Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the S&P 400. While the Fund
does not seek to match the returns of the S&P 400, this index is a good
indicator of general stock market performance for mid-sized companies. You may
not invest in the S&P 400, and unlike the Fund, it does not incur fees or
charges.




Berger Funds o January 29, 2001 Combined Prospectus



<PAGE>   15
                                                                              13

BERGER FUNDS
--------------------------------------------------------------------------------


AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2000



<TABLE>
<CAPTION>
                                            Life of the Fund
                               1 Year      (December 31, 1997)
--------------------------------------------------------------------------------
<S>                             <C>         <C>
The Fund                          %                %
S&P 400                           %                %
--------------------------------------------------------------------------------
</TABLE>


FUND EXPENSES

As a shareholder in the Fund, you do not pay any sales loads, redemption or
exchange fees, but you do indirectly bear Annual Fund Operating Expenses, which
vary from year to year.


<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)                                             %
--------------------------------------------------------------------------------
<S>                                                                          <C>
Management fee                                                               .75
Distribution (12b-1) fee                                                     .25
Other expenses                                                               .28
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses                                        1.28
--------------------------------------------------------------------------------
</TABLE>



UNDERSTANDING EXPENSES


Annual Fund operating expenses are paid by the Fund. As a result, they reduce
the Fund's return. Fund expenses include management fees, 12b-1 fees and
administrative costs such as shareholder recordkeeping and reports, custodian
and pricing services and registration fees.

EXAMPLE COSTS


The following example helps you compare the cost of investing in the Fund with
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses:


o  $10,000 initial investment

o  5% total return for each year

o  Fund operating expenses remain the same for each period

o  Redemption after the end of each period

Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:


<TABLE>
<CAPTION>
Years                                                                          $
--------------------------------------------------------------------------------
<S>                                                                          <C>
One
Three
Five
Ten
--------------------------------------------------------------------------------
</TABLE>






                             Berger Funds o January 29, 2001 Combined Prospectus

<PAGE>   16
14

BERGER MID CAP
VALUE FUND                                              Ticker Symbol     BEMVX
--------------------------------------------------------------------------------

THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES

The Fund aims for capital appreciation. In pursuing that goal, the Fund
primarily invests in the common stocks of mid-sized companies whose stock prices
are believed to be undervalued.

Investment selection focuses on companies that have fallen out of favor with the
market or are temporarily misunderstood by the investment community. To a lesser
degree, the Fund also invests in companies that demonstrate special situations
or turnarounds, meaning companies that have experienced significant business
problems but are believed to have favorable prospects for recovery.

The Fund's investment manager generally looks for companies with:

o A low price relative to their assets, earnings, cash flow or business
  franchise

o Products and services that give them a competitive advantage

o Quality balance sheets and strong management.

The investment manager's philosophy is to weigh a security's downside risk
before considering its upside potential, which may help provide an element of
capital preservation. Under normal circumstances, the Fund invests at least 65%
of its assets in equity securities of mid-sized companies whose market
capitalization falls, at the time of initial purchase, within a range of $1
billion to the 12-month average of the maximum market capitalization for
companies included in the Standard & Poor's Mid Cap 400 Index (S&P 400). This
average is updated monthly. The Fund's investment manager will generally sell a
security when it no longer meets the manager's investment criteria or when it
has met the manager's expectations for appreciation. The Fund's investment
manager may actively trade the portfolio in pursuit of the Fund's goal.

PRINCIPAL RISKS


You may be interested in the Fund if you are comfortable with above-average risk
and intend to make a long-term investment commitment. Like all managed funds,
there is a risk that the investment manager's strategy for managing the Fund may
not achieve the desired results. In addition, the price of common stock moves up
and down in response to corporate earnings and developments, economic and market
conditions and unanticipated events. As a result, the price of the Fund's
investments may go down and you could lose money on your investment.

The Fund's share price may fluctuate more than that of funds primarily invested
in large companies. Mid-sized companies may pose greater market, liquidity and
information risks because of narrow product lines, limited financial resources,
less depth in management or a limited trading market for their stocks. The
Fund's investments are often focused in a small number of business sectors,
which may pose greater market and liquidity risks. In addition, the Fund may
invest in certain securities with unique risks, such as special situations which
could present increased market and information risks. The Fund's active trading
will cause the Fund to have an increased portfolio turnover rate. Higher
turnover rates may result in higher brokerage costs to the Fund and in higher
net taxable gains for you as an investor.


See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.

THE FUND'S PAST PERFORMANCE


The information below shows the Fund's performance since it began operations
through December 31, 2000. These returns include reinvestment of all dividends
and capital gains distributions and reflect Fund expenses. As with all mutual
funds, past performance does not guarantee future results.


Total return shows you the Fund's performance for the one full calendar year
since the Fund began.


                 YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31

                                    [CHART]

<TABLE>
<S>                                             <C>
                         1999                   21.56%
                         2000                        %
</TABLE>



                         BEST QUARTER:           %

                         WORST QUARTER:          %

Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the S&P 400. While the Fund
does not seek to match the returns of the S&P 400, this index is a good
indicator of general stock market performance for mid-sized companies. You may
not invest in the S&P 400, and unlike the Fund, it does not incur fees or
charges.





Berger Funds o January 29, 2001 Combined Prospectus

<PAGE>   17
                                                                              15
BERGER FUNDS
--------------------------------------------------------------------------------


AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2000



<TABLE>
<CAPTION>
                                           Life of the Fund
                               1 Year     (August 12, 1998)
--------------------------------------------------------------------------------
<S>                            <C>        <C>
The Fund                          %               %
S&P 400                           %               %
--------------------------------------------------------------------------------
</TABLE>


FUND EXPENSES

As a shareholder in the Fund, you do not pay any sales loads, redemption or
exchange fees, but you do indirectly bear Annual Fund Operating Expenses, which
vary from year to year.


<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)                                              %
--------------------------------------------------------------------------------
<S>                                                                          <C>
Management fee                                                               .75
Distribution (12b-1) fee                                                     .25
Other expenses                                                               .59
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses                                        1.59
--------------------------------------------------------------------------------
</TABLE>



UNDERSTANDING EXPENSES


Annual Fund operating expenses are paid by the Fund. As a result, they reduce
the Fund's return. Fund expenses include management fees, 12b-1 fees and
administrative costs such as shareholder recordkeeping and reports, custodian
and pricing services and registration fees.

EXAMPLE COSTS


The following example helps you compare the cost of investing in the Fund with
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses:


o  $10,000 initial investment

o  5% total return for each year

o  Fund operating expenses remain the same for each period

o  Redemption after the end of each period

Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:


<TABLE>
<CAPTION>
Years                                                                          $
--------------------------------------------------------------------------------
<S>                                                                           <C>
One
Three
Five
Ten
--------------------------------------------------------------------------------
</TABLE>






                             Berger Funds o January 29, 2001 Combined Prospectus

<PAGE>   18
16

BERGER
GROWTH FUND                                                Ticker Symbol   BEONX
--------------------------------------------------------------------------------

THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES

The Fund aims for long-term capital appreciation. In pursuing that goal, the
Fund primarily invests in the common stocks of established companies with the
potential for growth.

Stock selection by the Fund's investment manager focuses on companies believed
to have strong growth potential regardless of the company's size.

The Fund's investment manager generally looks for companies with:

o  Opportunities for rapid revenue and earnings growth

o  Large market potential for their products and services

o  Strong, capable management teams that have the vision necessary to increase
   their market share in growing industries.

The Fund's investment manager will generally sell a security when it no longer
meets the manager's investment criteria or when it has met the manager's
expectations for appreciation. The Fund's investment manager may actively trade
the portfolio in pursuit of the Fund's goal.

PRINCIPAL RISKS


You may be interested in the Fund if you are comfortable with the risks of
equity investing and intend to make a long-term investment commitment. Like all
managed funds, there is a risk that the investment manager's strategy for
managing the Fund may not achieve the desired results. In addition, the price of
common stock moves up and down in response to corporate earnings and
developments, economic and market conditions and unanticipated events. As a
result, the price of the Fund's investments may go down and you could lose money
on your investment.

The Fund's share price may fluctuate more than that of funds primarily invested
in stocks of large companies. Small and mid-sized companies may pose greater
market, liquidity and information risks because of narrow product lines, limited
financial resources, less depth in management or a limited trading market for
their stocks. The Fund's investments may focus in a small number of business
sectors, which may pose greater market and liquidity risks. In addition, the
Fund's active trading will cause the Fund to have an increased portfolio
turnover rate. Higher turnover rates may result in higher brokerage costs to the
Fund and in higher net taxable gains for you as an investor.


See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.

THE FUND'S PAST PERFORMANCE


The information below shows the Fund's performance since it began operations
through December 31, 2000. These returns include reinvestment of all dividends
and capital gains distributions and reflects Fund expenses. As with all mutual
funds, past performance does not guarantee future results.


Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year for the past ten years.

                 YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31

                                    [CHART]

<TABLE>
<S>                      <C>                 <C>
                         1991                88.81%
                         1992                 8.53%
                         1993                21.20%
                         1994                (6.66)%
                         1995                21.34%
                         1996                13.73%
                         1997                13.57%
                         1998                16.23%
                         1999                52.28%
                         2000                     %
</TABLE>




                              BEST QUARTER:        %

                              WORST QUARTER:       %



Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Standard & Poor's 500
Index (S&P 500). While the Fund does not seek to match the returns of the S&P
500, this index is a good indicator of general stock market performance. You may
not invest in the S&P 500, and unlike the Fund, it does not incur fees or
charges.

AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2000



<TABLE>
<CAPTION>
                                                  Life of the Fund
             1 Year    5 Years    10 Years      (September 30, 1974)
--------------------------------------------------------------------------------
<S>          <C>       <C>        <C>           <C>
The Fund        %        %           %                  %
S&P 500         %        %           %                  %
--------------------------------------------------------------------------------
</TABLE>





Berger Funds o January 29, 2001 Combined Prospectus

<PAGE>   19
                                                                              17
BERGER FUNDS
--------------------------------------------------------------------------------

FUND EXPENSES

As a shareholder in the Fund, you do not pay any sales loads, redemption or
exchange fees, but you do indirectly bear Annual Fund Operating Expenses, which
vary from year to year.


<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)                                              %
--------------------------------------------------------------------------------
<S>                                                                          <C>
Management fee                                                               .69
Distribution (12b-1) fee                                                     .25
Other expenses                                                               .19
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses                                        1.13
--------------------------------------------------------------------------------
</TABLE>


UNDERSTANDING EXPENSES


Annual Fund operating expenses are paid by the Fund. As a result, they reduce
the Fund's return. Fund expenses include management fees, 12b-1 fees and
administrative costs such as shareholder recordkeeping and reports, custodian
and pricing services and registration fees.


EXAMPLE COSTS


The following example helps you compare the cost of investing in the Fund with
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses:


o  $10,000 initial investment

o  5% total return for each year

o  Fund operating expenses remain the same for each period

o  Redemption after the end of each period

Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:


<TABLE>
<CAPTION>
Years                                                                          $
--------------------------------------------------------------------------------
<S>                                                                           <C>
One
Three
Five
Ten
--------------------------------------------------------------------------------
</TABLE>





                             Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   20
18


BERGER
INTERNATIONAL FUND                                     Ticker Symbol       BBINX
--------------------------------------------------------------------------------


THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES


The Fund aims for long-term capital appreciation. In pursuing that goal, the
Fund primarily invests in common stocks of well-established foreign companies.
The Fund invests all of its assets in the Berger International Portfolio
(Portfolio), which has the same goals and policies as the Fund.


The portfolio's investment manager first identifies economic and business themes
that it believes provide a favorable framework for selecting stocks. Using
fundamental analysis, the investment manager then selects individual companies
best positioned to take advantage of opportunities presented by these themes.

The Portfolio's investment manager generally looks for companies with:

o  Securities that are fundamentally undervalued relative to their long-term
   prospective earnings growth rates, their historic valuation levels and their
   competitors

o  Business operations predominantly in well-regulated and more stable foreign
   markets

o  Substantial size and liquidity, strong balance sheets, proven management and
   diversified earnings.


The Portfolio invests primarily in common stocks with 65% of its total assets in
securities of companies located in at least five different countries outside the
United States. Recently, the Portfolio has been weighted toward the United
Kingdom, Europe and selectively in Japan and the Far East. However, it may also
invest in other foreign countries, including developing countries. A majority of
the Portfolio's assets are invested in mid-sized to large capitalization
companies. The Portfolio's investment manager will generally sell a security
when it has met the manager's expectations for appreciation.


See "Organization of the Berger Funds Family--Special Fund Structures--Master/
Feeder" later in this prospectus for more information on the Fund's investment
in the Portfolio.

PRINCIPAL RISKS


You may be interested in the Fund if you are comfortable with the risks of
international investing and intend to make a long-term investment commitment.
Like all managed funds, there is a risk that the investment manager's strategy
for managing the Fund may not achieve the desired results. In addition, the
price of common stock moves up and down in response to corporate earnings and
developments, economic and market conditions and unanticipated events. As a
result, the price of the Fund's investments may go down and you could lose money
on your investment. There are additional risks with investing in foreign
countries, especially in developing countries--specifically, economic, market,
currency, liquidity, information, political and transaction risks. As a result
of these additional risks, the Fund may be more volatile than a domestic stock
fund. In addition, foreign stocks may not move in concert with the U.S. markets.
In addition, the Fund may invest in certain securities with unique risks, such
as forward foreign currency contracts, which may present hedging, credit,
correlation, opportunity and leverage risks.


See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.

THE FUND'S PAST PERFORMANCE


The information below shows the Fund's performance since it began operations
through December 31, 2000. These returns include reinvestment of all dividends
and capital gains distributions and reflect Fund expenses. As with all mutual
funds, past performance does not guarantee future results.

Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year for the past ten years.



                 YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31

                                    [CHART]

<TABLE>
<S>                                          <C>
                              1991           13.18%
                              1992           10.21%
                              1993           36.38%
                              1994           (7.80%)
                              1995           18.78%
                              1996           18.51%
                              1997            2.90%
                              1998           14.92%
                              1999           30.90%
                              2000                %
</TABLE>



                              BEST QUARTER:        %

                              WORST QUARTER:       %

Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Morgan Stanley Capital
International Europe, Australasia and the Far East Index (EAFE Index). While the
Fund does not seek to match the returns of the EAFE Index, this index is a good
indicator of foreign stock markets. You may not invest in the EAFE Index, and
unlike the Fund, it does not incur fees or charges.





Berger Funds o January 29, 2001 Combined Prospectus

<PAGE>   21
                                                                              19

BERGER FUNDS
--------------------------------------------------------------------------------


 AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2000(2)



<TABLE>
<CAPTION>
                                              Life of the Fund
             1 Year      5 Years    10 Years   (July 31, 1989)
--------------------------------------------------------------------------------
<S>          <C>         <C>        <C>        <C>
The Fund        %           %          %            %
EAFE Index      %           %          %            %
--------------------------------------------------------------------------------
</TABLE>



2. Predecessor Performance: performance figures covering periods prior to
October 11, 1996, include the performance of a pool of assets advised by the
Portfolio's investment manager for periods before the Portfolio began
operations. This performance has been adjusted to reflect the increased expenses
expected in operating the Fund, net of fee waivers. The asset pool was not
registered with the SEC and was not subject to the investment restrictions
imposed on mutual funds. If the pool had been registered, its performance might
have been adversely affected.


FUND EXPENSES

As a shareholder in the Fund, you do not pay any sales loads, redemption or
exchange fees, but you do indirectly bear Annual Fund Operating Expenses, which
vary from year to year.


<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES(1)
(deducted directly from the Fund)                                              %
--------------------------------------------------------------------------------
<S>                                                                         <C>
Management fee                                                               .85
Distribution (12b-1) fee                                                     .25
Other expenses                                                               .58
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses                                        1.68
--------------------------------------------------------------------------------
</TABLE>


1. Annual fund operating expenses consist of the Fund's expenses plus the Fund's
share of the expenses of the Portfolio.


UNDERSTANDING EXPENSES


Annual Fund operating expenses are paid by the Fund. As a result, they reduce
the Fund's return. Fund expenses include management fees, 12b-1 fees and
administrative costs such as shareholder recordkeeping and reports, custodian
and pricing services and registration fees.

EXAMPLE COSTS


The following example helps you compare the cost of investing in the Fund with
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses:


o  $10,000 initial investment

o  5% total return for each year

o  Fund operating expenses remain the same for each period

o  Redemption after the end of each period

Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:


<TABLE>
<CAPTION>
Years                                                                          $
--------------------------------------------------------------------------------
<S>                                                                           <C>
One
Three
Five
Ten
--------------------------------------------------------------------------------
</TABLE>





                             Berger Funds o January 29, 2001 Combined Prospectus

<PAGE>   22
20


BERGER LARGE CAP
GROWTH FUND                                            Ticker Symbol       BEOOX
--------------------------------------------------------------------------------


THE FUND'S GOALS AND PRINCIPAL INVESTMENT STRATEGIES


The Fund aims for capital appreciation. In pursuing that goal, the Fund
primarily invests in the securities of large, well-established growing
companies.

Security selection focuses on the common stocks and convertible securities of
companies that have demonstrated a history of growth in revenues and earnings.


The Fund's investment manager generally looks for companies with:


o  Opportunities for above-average revenue and earnings growth


o  Strong market positions for their products and services

o  Strong, seasoned management teams with well-established and clearly defined
   strategies.



Under normal circumstances, the Fund invests at least 65% of its assets in
equity securities of companies whose market capitalization, at the time of
initial purchase, is $10 billion or more. The Fund may invest up to 20% of its
assets in convertible securities rated below investment grade (BB or lower by
S&P, Ba or lower by Moody's). The Fund's investment manager will generally sell
a security when it no longer meets the manager's investment criteria or when it
has met the manager's expectations for appreciation. The Fund's investment
manager may actively trade the portfolio in pursuit of the Fund's goal.


PRINCIPAL RISKS


You may be interested in the Fund if you are comfortable with the risks of
equity investing and intend to make a long-term investment commitment. Like all
managed funds, there is a risk that the investment manager's strategy for
managing the Fund may not achieve the desired results. In addition, the price of
common stock moves up and down in response to corporate earnings and
developments, interest rate movements, economic and market conditions and
unanticipated events. As a result, the price of the Fund's investments may go
down and you could lose money on your investment.

To the extent the Fund invests in fixed-income securities it takes on different
risks, including movements in interest rates and default on payment of principal
or interest. In addition, the Fund may invest in convertible securities rated
below investment grade, which may pose greater market, interest rate, prepayment
and credit risks. These issuers are less financially secure, and are more likely
to be hurt by interest rate movements. In addition, if the Fund does engage in
active trading, this will cause the Fund to have an increased portfolio turnover
rate. Higher turnover rates may result in higher brokerage costs to the Fund and
in higher net taxable gains for you as an investor.


See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.

THE FUND'S PAST PERFORMANCE


The information below shows the Fund's performance since it began operations
through December 31, 2000. These returns include reinvestment of all dividends
and capital gains distributions and reflect Fund expenses. As with all mutual
funds, past performance does not guarantee future results.


Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year for the past ten years.


                YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31(1)

                                    [CHART]

<TABLE>
<S>                                          <C>
                         1991                60.97%
                         1992                 4.82%
                         1993                23.57%
                         1994                (9.07%)
                         1995                23.92%
                         1996                15.61%
                         1997                22.70%
                         1998                22.49%
                         1999                61.32%
                         2000                     %
</TABLE>



                         BEST QUARTER:             %

                         WORST QUARTER:            %

Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Standard & Poor's 500
Index (S&P 500). While the Fund does not seek to match the returns of the S&P
500, this index is a good indicator of general stock market performance. You may
not invest in the S&P 500, and unlike the Fund, it does not incur fees or
charges.




Berger Funds o January 29, 2001 Combined Prospectus

<PAGE>   23
                                                                              21

BERGER FUNDS
--------------------------------------------------------------------------------


AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 20001



<TABLE>
<CAPTION>
                                                       Life of the Fund
                      1 Year  5 Years  10 Years       (September 30, 1974)
--------------------------------------------------------------------------------
<S>                   <C>    <C>       <C>            <C>
The Fund                 %       %       %                       %
S&P 500                  %       %       %                       %
--------------------------------------------------------------------------------
</TABLE>



1. Effective January 29, 2001, the Fund changed its name and non-fundamental
investment strategies from that of a Growth and Income Fund to a Large Cap
Growth Fund.


FUND EXPENSES

As a shareholder in the Fund, you do not pay any sales loads, redemption or
exchange fees, but you do indirectly bear Annual Fund Operating Expenses, which
vary from year to year.


<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)                                            %
--------------------------------------------------------------------------------
<S>                                                                         <C>
Management fee                                                              .74
Distribution (12b-1) fee                                                    .25
Other expenses                                                              .19
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses                                       1.18
--------------------------------------------------------------------------------
</TABLE>



UNDERSTANDING EXPENSES


Annual Fund operating expenses are paid by the Fund. As a result, they reduce
the Fund's return. Fund expenses include management fees, 12b-1 fees and
administrative costs such as shareholder recordkeeping and reports, custodian
and pricing services and registration fees.

EXAMPLE COSTS


The following example helps you compare the cost of investing in the Fund with
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses:


o  $10,000 initial investment

o  5% total return for each year

o  Fund operating expenses remain the same for each period

o  Redemption after the end of each period

Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:


<TABLE>
<CAPTION>
YEARS                                                                        $
--------------------------------------------------------------------------------
<S>                                                                        <C>
One
Three
Five
Ten
--------------------------------------------------------------------------------
</TABLE>



                             Berger Funds o January 29, 2001 Combined Prospectus

<PAGE>   24

22

BERGER
BALANCED FUND                           Ticker Symbol                      BEBAX
--------------------------------------------------------------------------------

THE FUND'S GOALS AND PRINCIPAL INVESTMENT STRATEGIES

The Fund aims for capital appreciation and current income. In pursuing these
goals, the Fund primarily invests in a diversified group of domestic equity and
fixed-income securities.

The allocation between equity and fixed-income securities is based upon the
investment manager's assessment of available investment opportunities and
relevant market, economic and financial factors.

The Fund's investment manager generally looks for companies with:

o    Reasonably priced equity securities with strong, consistent and predictable
     earnings growth rates

o    Strong, seasoned management teams and competitive products or services

o    Well-capitalized balance sheets.

The Fund's equity investments consist primarily of common stocks of companies
with mid-sized to large market capitalizations. The Fund's fixed-income
investments are a variety of income-producing securities, such as short- to
long-term corporate and government debt securities, convertible securities,
preferred stocks and mortgage-backed securities. The investment manager believes
its investment style emphasizing equity securities offers shareholders the
opportunity for capital appreciation along with a reasonable level of capital
preservation. Normally, equity securities are expected to range from 45% to 65%
of the Fund's total assets. However, it is the Fund's policy to invest at least
25% of its total assets in fixed-income senior securities and at least 25% in
equity securities. The Fund may invest up to 20% of its assets in convertible
securities rated below investment grade (BB or lower by S&P, Ba or lower by
Moody's).


The Fund's investment manager will generally sell a security when it no longer
meets the manager's investment criteria or when it has met the manager's
expectations for appreciation.


PRINCIPAL RISKS


You may be interested in the Fund if you are comfortable with the risks of
equity and fixed-income investing and intend to make a long-term investment
commitment. Like all managed funds, there is a risk that the investment
manager's strategy for managing the Fund may not achieve the desired results. In
addition, the price of common stock moves up and down in response to corporate
earnings and developments, interest rate movements, economic and market
conditions and unanticipated events. As a result, the price of the Fund's
investments may go down and you could lose money on your investment. The Fund
may be riskier than other balanced funds that invest more heavily in
fixed-income securities.

To the extent the Fund invests in fixed-income securities it takes on different
risks, including movements in interest rates and default on payment of principal
or interest, as well as market and call risks. In addition, the Fund may invest
in convertible securities rated below investment grade, which may pose greater
market, interest rate, prepayment and credit risks. These issuers are less
financially secure, and are more likely to be hurt by interest rate movements.
When interest rates are low, the Fund's income distributions to you may be
reduced or eliminated.


See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.

THE FUND'S PAST PERFORMANCE


The information below shows the Fund's performance since it began operations
through December 31, 2000. These returns include reinvestment of all dividends
and capital gains distributions and reflect Fund expenses. As with all mutual
funds, past performance does not guarantee future results.


Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year since the Fund began.

                  YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31

                                    [CHART]

<TABLE>
<S>                               <C>
                         1998                 34.38%
                         1999                 44.58%
                         2000
</TABLE>



                                BEST QUARTER:  %

                                WORST QUARTER: %




Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Standard & Poor's 500
Index (S&P 500). While the Fund does not seek to match the returns of the S&P
500, this index is a good indicator of general stock market performance. You may
not invest in the S&P 500, and unlike the Fund, it does not incur fees or
charges.



Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   25

                                                                              23

BERGER FUNDS
--------------------------------------------------------------------------------


AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2000



<TABLE>
<CAPTION>
                                                 Life of the Fund
                              1 Year           (September 30, 1997)
--------------------------------------------------------------------------------
<S>                           <C>              <C>
The Fund                        %                          %(1)
S&P 500                         %                          %
--------------------------------------------------------------------------------
</TABLE>



1. Includes returns for the last quarter of 1997, which reflect a higher than
normal level of trading activity undertaken to pursue equity opportunities
available as the advisor was beginning to implement the Fund's long-term
approach to equity management.


FUND EXPENSES

As a shareholder in the Fund, you do not pay any sales loads, redemption or
exchange fees, but you do indirectly bear Annual Fund Operating Expenses, which
vary from year to year.


<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)%
--------------------------------------------------------------------------------
<S>                                                                      <C>
Management fee                                                              .70
Distribution (12b-1) fee                                                    .25
Other expenses                                                              .19
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses                                       1.14
--------------------------------------------------------------------------------
</TABLE>



UNDERSTANDING EXPENSES


Annual Fund operating expenses are paid by the Fund. As a result, they reduce
the Fund's return. Fund expenses include management fees, 12b-1 fees and
administrative costs such as shareholder recordkeeping and reports, custodian
and pricing services and registration fees.

EXAMPLE COSTS


The following example helps you compare the cost of investing in the Fund with
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses:


o  $10,000 initial investment

o  5% total return for each year

o  Fund operating expenses remain the same for each period

o  Redemption after the end of each period

Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:


<TABLE>
<CAPTION>
YEARS                                                                          $
--------------------------------------------------------------------------------
<S>                                                                        <C>
One
Three
Five
Ten
--------------------------------------------------------------------------------
</TABLE>




                             Berger Funds o January 29, 2001 Combined Prospectus



<PAGE>   26

24

INVESTMENT TECHNIQUES,
SECURITIES AND
ASSOCIATED RISKS
--------------------------------------------------------------------------------

BEFORE YOU INVEST...


in any of the Berger Funds, make sure you understand the risks involved. All
investments involve risk. Generally, the greater the risk, the greater the
potential for return. The reverse is also generally true--the lower the risk,
the lower the potential for return.


Like all mutual funds, an investment in the Berger Funds is not a bank deposit
and is not insured or guaranteed by the FDIC or any other government agency. The
Funds are not a complete investment program, but may serve to diversify other
types of investments in your portfolio. There is no guarantee that the Funds
will meet their investment goals, and although you have the potential to make
money, you could also lose money by investing in the Funds.


The table on the opposite page will help you further understand the risks the
Funds take by investing in certain securities and the investment techniques used
by the Berger Funds. A glossary follows the opposite page. You may get more
detailed information about the risks of investing in the Berger Funds in the
Statement of Additional Information (SAI), including a discussion of debt
security ratings in Appendix A to the SAI.


KEY TO TABLE

Follow down the columns under the name of the Fund in which you are interested.
The boxes will tell you:


Y    Yes, the security or technique is permitted by a Fund and is emphasized by
     a Fund.


<    (Note: character is a hollow Y) Yes, the security or technique is permitted
     by a Fund.

N    No, the security or technique is not permitted by a Fund.


F    The restriction is fundamental to a Fund. (Fundamental restrictions cannot
     be changed without a shareholder vote.)

5    Use of a security or technique is permitted, but subject to a restriction
     of up to 5% of total assets.

10   Use of a security or technique is permitted, but subject to a restriction
     of up to 10% of total assets.

25   Use of a security or technique is permitted, but subject to a restriction
     of up to 25% of total assets.

33.3 Use of a security or technique is permitted, but subject to a restriction
     of up to 33 1/3% of total assets.


[ ]       (Note: character is a hollow 5) Use of a security or technique is
          permitted, but subject to a restriction of up to 5% of net assets.

[ ][ ]    (Note: character is a hollow 10) Use of a security or technique is
          permitted, but subject to a restriction of up to 10% of net assets.

[ ][ ][ ] (Note: character is a hollow 15) Use of a security or technique is
          permitted, but subject to a restriction of up to 15% of net assets.

Notes to table

1. The Funds have no minimum quality standards for convertible securities,
although they will not invest in defaulted securities. They also will not invest
20% or more of their assets in convertible securities rated below investment
grade or in unrated convertible securities that the advisor considers to be
below investment grade.


2. IPOs constituted a significant portion of the Fund's performance during the
last fiscal year. However, there can be no assurance that IPOs will continue to
have such a significant impact, if the quality or number of available IPOs
diminishes or if the Fund grows in size and IPOs become an insignificant part of
the Fund's total portfolio.

3. The Berger Balanced Fund may invest only in mortgage-backed securities that
are issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, or in privately issued mortgage-backed or asset-backed
securities that are rated AA/Aa (S&P/Moody's) or above.

4. The Funds may use futures, forwards and options only for hedging. Not more
than 5% of a Fund's net assets may be used for initial margins for futures and
premiums for options, although a Fund may have more at risk under these
contracts than the initial margin or premium. However, a Fund's aggregate
obligations under these contracts may not exceed the total market value of the
assets being hedged, such as some or all of the value of the Fund's equity
securities.




Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   27

                                                                              25

BERGER FUNDS
--------------------------------------------------------------------------------
RISK AND INVESTMENT TABLE


<TABLE>
<CAPTION>
                                                                                  BERGER      BERGER
                                           BERGER         BERGER                   SMALL       MID
                                         INFORMATION       NEW         BERGER     COMPANY      CAP
                                          TECHNOLOGY    GENERATION     SELECT     GROWTH     GROWTH
                                             FUND          FUND         FUND       FUND       FUND
<S>                                      <C>            <C>            <C>       <C>         <C>
Diversification                               F              F           NF         F           F

Small and mid-sized company securities        <              Y            <         Y           Y
Market, liquidity and information risk

Foreign securities                            <              <            <         <           <
Market, currency, transaction,
liquidity, information and
political risk

Sector focus                                  Y              Y            Y         Y           Y
Market and liquidity risk

Convertible securities(1)                     <              <            <         <           <
Market, interest rate,
prepayment and credit risk

Investment grade bonds (nonconvertible)       Y              Y            Y         Y           Y
Interest rate, market, call
and credit risk

Companies with limited operating histories    <              <            <         <           <
Market, liquidity and information risk

Illiquid and restricted securities           [ ][ ][ ]      [ ][ ][ ]    [ ][ ][ ] [ ][ ][ ]   [ ][ ][ ]
Market, liquidity and transaction risk

Special situations                            <              <            <         <           <
Market and information risk

Initial Public Offerings (IPOs)              <2             <2            <         <          <2
Market, liquidity and information risk

Mortgage-backed and asset-backed
securities(3)                                 N             N             N         N           N
Interest rate, prepayment, extension,
market and credit risk

Temporary defensive measures                  N              <            <         <           <
Opportunity risk

Lending portfolio securities               33.3           33.3         33.3      33.3        33.3
Credit risk

Borrowing                                   25F            25F          25F       25F         25F
Leverage risk

Financial futures(4)                         [ ]            [ ]          [ ]       [ ]         [ ]
Hedging, correlation, opportunity
and leverage risk

Forward foreign currency contracts(4)         <              <            <         <           <
Hedging, credit, correlation,
opportunity and leverage risk

Hedging Strategies

Options(4) (exchange-traded and
over-the-counter)                            [ ]            [ ]          [ ]       [ ]         [ ]
Hedging, credit, correlation and
leverage risk

Writing (selling) covered call options(4)    25             25           25        25          25
(exchange-traded and over-the-counter)
Opportunity, credit and leverage risk

<CAPTION>
                                              BERGER                                BERGER
                                               MID                                  LARGE
                                               CAP      BERGER       BERGER          CAP       BERGER
                                              VALUE     GROWTH    INTERNATIONAL     GROWTH     BALANCED
                                              FUND       FUND         FUND           FUND       FUND
<S>                                          <C>        <C>       <C>               <C>       <C>
Diversification                                F          F             F             F           F

Small and mid-sized company securities         Y          Y             <             <           <
Market, liquidity and information risk

Foreign securities                             <          <             Y             <           <
Market, currency, transaction,
liquidity, information and
political risk

Sector focus                                   Y          Y             <             <           <
Market and liquidity risk

Convertible securities(1)                      <          <             <             Y           Y
Market, interest rate,
prepayment and credit risk

Investment grade bonds (nonconvertible)        <          <             <             <           Y
Interest rate, market, call
and credit risk

Companies with limited operating histories     <         5F             <             5F           <
Market, liquidity and information risk

Illiquid and restricted securities            [ ][ ][ ]  [ ][ ][ ]     [ ][ ][ ]     [ ][ ][ ]   [ ][ ][ ]
Market, liquidity and transaction risk

Special situations                             Y          <             <             <           <
Market and information risk

Initial Public Offerings (IPOs)                <          <             <             <           <
Market, liquidity and information risk

Mortgage-backed and asset-backed
securities(3)                                  N          N             N             N           <
Interest rate, prepayment, extension,
market and credit risk

Temporary defensive measures                   <          <             N             <           <
Opportunity risk

Lending portfolio securities                33.3         NF          33.3            NF        33.3
Credit risk

Borrowing                                    25F       5F           25F            5F         25F
Leverage risk

Financial futures(4)                          [ ]      [ ]            N            [ ]         [ ]
Hedging, correlation, opportunity
and leverage risk

Forward foreign currency contracts(4)          <        <             Y             <           <
Hedging, credit, correlation,
opportunity and leverage risk

Hedging Strategies

Options(4) (exchange-traded and
over-the-counter)                             [ ]      [ ]            N            [ ]         [ ]
Hedging, credit, correlation and
leverage risk

Writing (selling) covered call options(4)     25       25             N            25          25
(exchange-traded and over-the-counter)
Opportunity, credit and leverage risk

</TABLE>




                             Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   28

26

RISK AND INVESTMENT
GLOSSARY
--------------------------------------------------------------------------------

BORROWING refers to a loan of money from a bank or other financial institution
undertaken by a Fund for temporary or emergency reasons only.

CALL RISK is the possibility that an issuer may redeem or "call" a fixed-income
security before maturity at a price below its current market price. An increased
likelihood of a call may reduce the security's price.

COMMON STOCK is a share of ownership (equity) interest in a company.

COMPANIES WITH LIMITED OPERATING HISTORIES are securities issued by companies
that have been in continuous operation for less than three years. Sometimes
called "unseasoned" issuers.


CONVERTIBLE SECURITIES are debt or equity securities that may be converted on
specified terms into stock of the issuer.


CORRELATION RISK occurs when a Fund "hedges" ~ uses one investment to offset the
Fund's position in another. If the two investments do not behave in relation to
one another the way Fund managers expect them to, then unexpected results may
occur.

CREDIT RISK means that the issuer of a security or the counterparty to an
investment contract may default or become unable to pay its obligations when
due.

CURRENCY RISK happens when a Fund buys or sells a security denominated in
foreign currency. Foreign currencies "float" in value against the U.S. dollar.
Adverse changes in foreign currency values can cause investment losses when a
Fund's investments are converted to U.S. dollars.

DIVERSIFICATION means a diversified fund may not, with respect to at least 75%
of its assets, invest more than 5% in the securities of one company. A
nondiversified fund may be more volatile than a diversified fund because it
invests more of its assets in a smaller number of companies and the gains or
losses on a single stock will therefore have a greater impact on the Fund's
share price. All of the Berger Funds are diversified funds, except the Berger
Select Fund.

EXTENSION RISK is the risk that, as interest rates rise, borrowers are less
likely to refinance their mortgages or other debts. As a result, the principal
on mortgage-backed or asset-backed securities may be paid later than expected,
which could cause the value of the securities to go down.

FINANCIAL FUTURES are exchange-traded contracts on securities, securities
indexes or foreign currencies that obligate the holder to take or make future
delivery of a specified quantity of those underlying securities or currencies on
a predetermined future date at a predetermined price.

FOREIGN SECURITIES are issued by companies located outside of the United States.
A Fund considers a company to be located outside the United States if the
principal securities trading market for its equity securities is located outside
the U.S. or it is organized under the laws of, and has a principal office in, a
country other than the U.S.

FORWARD FOREIGN CURRENCY CONTRACTS are privately negotiated contracts committing
the holder to purchase or sell a specified quantity of a foreign currency on a
predetermined future date at a predetermined price.

HEDGING RISK comes into play when a Fund uses a security whose value is based on
an underlying security or index to "offset" the Fund's position in another
security or currency. The objective of hedging is to offset potential losses in
one security with gains in the hedge. But a hedge can eliminate or reduce gains
as well as offset losses. (Also see "Correlation risk.")

ILLIQUID AND RESTRICTED SECURITIES are securities which, by rules of their issue
or by their nature, cannot be sold readily. These do not include liquid Rule
144A securities.

INFORMATION RISK means that information about a security or issuer might not be
available, complete, accurate or comparable.


INITIAL PUBLIC OFFERING (IPO) is the sale of a company's securities to the
public for the first time. IPO companies can be small and have limited operating
histories. The price of IPO securities can be highly unstable because of
prevailing market psychology and the small number of shares available. In
addition, the quality and number of IPOs available for purchase may diminish in
the future, and their contribution to Fund performance may be less significant
as a Fund grows in size.


INTEREST RATE RISK is the risk that changes in interest rates will adversely
affect the value of an investor's securities. When interest rates rise, the
value of fixed-income securities will generally fall. Conversely, a drop in
interest rates will generally cause an increase in the value of fixed-income
securities. Longer-term securities are subject to greater interest rate risk.


INVESTMENT-GRADE BONDS are rated BBB (Standard & Poor's) or Baa (Moody's) or
above. Bonds rated below investment grade are subject to greater credit risk
than investment-grade bonds.


LENDING PORTFOLIO SECURITIES to qualified financial institutions is undertaken
in order to earn income. The Funds lend securities only on a fully
collateralized basis.



Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   29
                                                                              27

BERGER FUNDS
--------------------------------------------------------------------------------

LEVERAGE RISK occurs in some securities or techniques that tend to magnify the
effect of small changes in an index or a market. This can result in a loss that
exceeds the amount that was invested in the contract.

LIQUIDITY RISK occurs when investments cannot be sold readily. A Fund may have
to accept a less-than-desirable price to complete the sale of an illiquid
security or may not be able to sell it at all.

MARKET CAPITALIZATION is the total current market value of a company's
outstanding common stock.


MARKET RISK exists in all mutual funds and means the risk that the prices of
securities in a market, a sector, or an industry will fluctuate and that such
movements might reduce an investment's value.


MORTGAGE-BACKED SECURITIES are securities that represent interests in "pools" of
mortgages or that are backed by mortgages where the interest and principal
payments on the mortgages are "passed-through" to the security holder.
Mortgage-backed securities may be issued or guaranteed by the U.S. Government.
They may also be privately issued and backed by U.S. Government guaranteed
securities or by private arrangements to make them more secure.

ASSET-BACKED SECURITIES are similar, except backed by assets such as car loans
or credit card receivables rather than mortgages.

OPPORTUNITY RISK means missing out on an investment opportunity because the
assets necessary to take advantage of it are committed to less advantageous
investments or strategies.

OPTIONS are contracts giving the holder the right but not the obligation to
purchase or sell a security on or before a predetermined future date at a fixed
price. Options on securities indexes are similar, but settle in cash.


POLITICAL RISK comes into play with investments, particularly foreign
investments, that may be adversely affected by nationalization, taxation, war,
government instability or other economic or political actions or factors.


PREPAYMENT RISK is the risk that, as interest rates fall, borrowers are more
likely to refinance their debts. As a result, the principal on certain
fixed-income securities may be paid earlier than expected, which could cause
investment losses and cause prepaid amounts to have to be reinvested at a
relatively lower interest rate.

SECTOR FOCUS occurs when a significant portion of a Fund's assets are invested
in a relatively small number of related industries. The Funds will not
concentrate more than 25% of their total assets in any one industry. Sector
focus may increase both market and liquidity risk.

SMALL AND MID-SIZED COMPANY SECURITIES are securities issued by small or
mid-sized companies, as measured by their market capitalization. The market
capitalization range targeted by each of the Funds investing primarily in small
or mid-sized companies varies by Fund and appears in the description for those
Funds under the heading "The Fund's Goal and Principal Investment Strategies."
In general, the smaller the company, the greater its risks.


SPECIAL SITUATIONS are companies about to undergo a structural, financial or
management change that may significantly affect the value of their securities.



TEMPORARY DEFENSIVE MEASURES may be taken when a Fund's investment manager
believes they are warranted because of market conditions. When this happens, the
Fund may increase its investment in government securities and other short-term
securities without regard to the Fund's investment restrictions, policies or
normal investment emphasis.



TRANSACTION RISK means that a Fund may be delayed or unable to settle a
transaction or that commissions and settlement expenses may be higher than
usual. In the case of foreign securities, use of a foreign securities depository
to maintain Fund assets may increase this risk. This risk may be minimized
through an analysis and continuous monitoring, by the Funds' primary custodian,
of the custodial risks of using the depository.



WRITING (SELLING) COVERED CALL OPTIONS is the selling of a contract to another
party, which gives them the right but not the obligation to buy a particular
security from you. A Fund will write call options only if it already owns the
security (if it is "covered").



                             Berger Funds o January 29, 2001 Combined Prospectus

<PAGE>   30

28

BUYING SHARES
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
Minimum Initial Investments
--------------------------------------------------------------------------------
<S>                                                                       <C>
Regular investment                                                        $2,000
Low Minimum Investment Plan                                               $  100
IRA                                                                       $  500
--------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>
Minimum Subsequent Investments
--------------------------------------------------------------------------------
<S>                                                                       <C>
Regular investment                                                        $   50
Regular automatic investment                                              $   50
Low Minimum Investment Plan                                               $  100
   (required monthly automatic investments)
--------------------------------------------------------------------------------
</TABLE>


Send new account applications to

Berger Funds
P.O. Box 219958
Kansas City, MO 64121-9958

OR for overnight, certified or registered mail only

Berger Funds
330 West 9th Street, 1st Floor
Kansas City, MO 64105


Important notes about paying for your shares

o    Your check must be made payable to Berger Funds.

o    You may not purchase shares by cash, credit card, third-party checks or
     checks drawn on foreign banks.

o    Telephone and online purchase orders may not exceed $100,000 on the date
     the order is placed. Shares previously bought by telephone or online access
     are included in calculating account size only if payment has been received
     for those shares.


o    Orders not paid for on time will be canceled, and shares will be redeemed
     from your account to compensate for any decline in price of the shares
     canceled.


o    The Funds reserve the right to reject any order and to waive or reduce
     minimums, or increase minimums following notice.

BY MAIL

o    Read this prospectus.

o    Fill out the application if you are opening a new account.

o    Make out a check to Berger Funds for the amount you want to invest.

o    Send the application and check to the Berger Funds in the envelope
     provided.

o    To add to an existing account, be sure to include your account number on
     your check and mail it to the appropriate address above.


BY TELEPHONE*


o    If you already have a Berger Funds account, you may purchase additional
     shares by telephone order.

o    You must pay for them within three business days by wire, electronic funds
     transfer or overnight delivery of a check.

o    Call (800) 551-5849 for current wire or electronic funds transfer
     instructions.


BY ONLINE ACCESS*


o    If you have established a Berger Funds account with electronic funds
     transfer privileges you may purchase additional shares via online access.

o    You will find us online at bergerfunds.com.

BY SYSTEMATIC INVESTMENT PLAN

o    To automatically purchase more shares on a regular basis for a regular
     minimum or Low Minimum Investment Plan account, fill out the Systematic
     Investment Plan section of the application. Investments are transferred
     automatically from your bank account.


o    The Low Minimum Investment Plan is designed for investors who would like to
     begin a regular investment program but are reluctant to commit to higher
     lump sum initial investments. In order to qualify for the Low Minimum
     Investment Plan, an investor must commit to automatic monthly investments
     totaling no less than $100 per month per account. Automatic monthly
     investments must be made until the value of each account opened under the
     Plan is at least $2,000 or the account will be assessed an annual charge of
     $10.

*    All shareholders are automatically granted telephone and online transaction
     privileges unless they decline them explicitly in writing, either on the
     account application or by writing to the Berger Funds at the address above.
     You may give up some level of security by choosing to buy and sell shares
     by telephone or online rather than by mail.




Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   31

                                                                              29

BERGER FUNDS

SELLING (REDEEMING)
SHARES
--------------------------------------------------------------------------------

IMPORTANT NOTES ABOUT PAYMENT FOR YOUR REDEEMED SHARES

In times of extreme economic or market conditions, transactions by telephone or
online may be difficult.

o    Generally, payment for your redeemed shares will be sent to you within
     three business days after receipt of your redemption request in good order.

o    You may receive payment for redeemed shares via wire or electronic funds
     transfer. You may elect these services on the account application or send
     to the Berger Funds a written request providing your bank information with
     your signature guaranteed. (See "Signature Guarantees/ Special
     Documentation" below.)

o    Wire and electronic funds transfers are subject to a $1,000 minimum and
     $100,000 maximum.

o    You will be charged $10 if you request a wire transfer. There is no charge
     for an electronic funds transfer.

o    A wire transfer will be sent the next business day after receipt of your
     order, and an electronic funds transfer will be sent the second business
     day after receipt of your order.

o    Proceeds from the redemption of shares purchased by check may be delayed
     until full payment for the shares has been received and cleared, which may
     take up to 15 days from the purchase date.

o    The Berger Information Technology Fund will deduct a 1% redemption fee from
     your redemption proceeds if you redeem shares of that Fund held less than 6
     months. This fee is intended to discourage investors from short-term
     trading of Fund shares and to offset the cost to the Fund of excess
     brokerage and other costs incurred as a result of such trading. This fee
     will not be charged to retirement plan accounts or in the case of
     redemptions resulting from the death of the shareholder.

BY MAIL

o    Send a written request indicating your account number and the dollar amount
     or number of shares you are redeeming to the appropriate address shown
     under "Buying Shares."

o    Your request must be signed by each registered shareholder, with the
     signature(s) appearing exactly as they do on your account registration.


BY TELEPHONE*


o    Call (800) 551-5849.


BY ONLINE ACCESS*


o    You will find us online at bergerfunds.com.

BY SYSTEMATIC WITHDRAWAL PLAN

o    Shares may be redeemed automatically ($50 minimum) monthly, quarterly,
     semi-annually or annually.

o    A systematic withdrawal plan may be established if you own shares in a Fund
     worth at least $5,000.

o    Call (800) 551-5849 for more information and forms.


*    For limitations on telephone and online redemptions see "Signature
     Guarantees/Special Documentation" below. Telephone and online redemptions
     are not available for shares held in retirement accounts sponsored by the
     Funds.





                             Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   32

30

INFORMATION ABOUT
YOUR ACCOUNT
--------------------------------------------------------------------------------

EXCHANGING SHARES

Shares of the Funds described in this prospectus may be exchanged for shares of
any other Berger Fund or for shares in the Cash Account Trust Portfolios (the
CAT Portfolios). The CAT Portfolios are three separately managed, unaffiliated
money market funds: the Money Market Portfolio, the Government Securities
Portfolio and the Tax-Exempt Portfolio.

The exchange privilege with the CAT Portfolios does not constitute an offering
or recommendation of the shares of these portfolios by the Berger Funds or
Berger LLC. Berger LLC is compensated for administrative services it performs
with respect to the CAT Portfolios.

When exchanging shares:

o    Each account must be registered identically ~ have the same signatures and
     addresses.

o    Each Fund or CAT Portfolio must be legally eligible for sale in your state
     of residence.

o    You may exchange out of each of the Berger Funds up to four times per
     calendar year. At this time, there is no limit on the number of exchanges
     permitted out of the CAT Portfolios.

o    You may exchange by telephone, online access or mail.

o    You are responsible for obtaining and reading the prospectus for the Fund
     or CAT Portfolio into which you are exchanging.

o    An exchange out of a Berger Fund results in the sale of that Fund's shares
     and the purchase of another, normally resulting in a taxable event for you.

o    Exchanges into any new Fund or CAT Portfolio are subject to that Fund's or
     Portfolio's initial and subsequent investment minimums.

o    The Berger Information Technology Fund will deduct a 1% redemption fee from
     the amount you exchange if you exchange shares of that Fund held less than
     6 months. This fee is intended to discourage investors from short-term
     trading of Fund shares and to offset the cost to the Fund of excess
     brokerage and other costs incurred as a result of such trading. This fee
     will not be charged to retirement plan accounts.

The Funds may terminate or modify the exchange privilege in the future.

SIGNATURE GUARANTEES/SPECIAL DOCUMENTATION

The Funds use Signature Guarantees to protect you and the Funds from possible
fraudulent requests for redeemed shares. Your redemption request must be in
writing and accompanied by a Signature Guarantee if:

o    Your request exceeds $100,000.

o    You request that payment be made to a name other than the one on your
     account registration.


o    You request that payment be mailed to an address that has been changed
     within 30 days of your redemption request or to an address other than the
     one of record.


o    You change or add information relating to your designated bank.

Berger Funds reserve the right to require Signature Guarantees under other
certain circumstances.

You can get a Signature Guarantee from most broker-dealers, national or state
banks, credit unions, federal savings and loan associations or other eligible
institutions. You cannot obtain a Signature Guarantee from a notary public.

Make sure the Signature Guarantee appears:

o    Together with the signature(s) of all registered owner(s) of the redeemed
     shares on the written redemption request.


o    On any share certificates you hold for the redeemed shares or on a separate
     statement of assignment (stock power) that may be obtained from a bank or
     broker.



Additional documents are required for redemptions by corporations, executors,
administrators, trustees and guardians. For instructions, call (800) 551-5849,
or write to the Berger Funds, P.O. Box 219958, Kansas City, MO 64121-9958.


YOUR SHARE PRICE

The price at which you buy, sell or exchange Fund shares is the share price or
net asset value (NAV). The share price for each Fund is determined by adding the
value of that Fund's investments, cash and other assets, deducting liabilities,
and then dividing that value by the total number of that Fund's shares
outstanding. For Funds offering more than one class of shares, share price is
calculated separately for each class.

Each Fund's share price is calculated at the close of the regular trading
session of the New York Stock Exchange



Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   33
                                                                              31

BERGER FUNDS

OTHER INFORMATION
ABOUT YOUR ACCOUNT
--------------------------------------------------------------------------------


(normally 4:00 p.m. Eastern time) each day that the Exchange is open. Share
price is not calculated on the days that the Exchange is closed.


For a purchase, redemption or exchange of Fund shares, your price is the share
price next calculated after your request is received in good order and accepted
by the Fund, its authorized agent or designee. To receive a specific day's
price, your request must be received before the close of the New York Stock
Exchange on that day.

When the Funds calculate their share price, they value the securities they hold
at market value. Sometimes market quotes for some securities are not available
or are not representative of market value. Examples would be when events occur
that materially affect the value of a security at a time when the security is
not trading or when the securities are illiquid. In that case, securities may be
valued in good faith at fair value, using consistently applied procedures
decided on by the trustees or directors. Money market instruments maturing
within 60 days are valued at amortized cost, which approximates market value.
Assets and liabilities expressed in foreign currencies are converted into U.S.
dollars at the prevailing market rates quoted by one or more banks or dealers
shortly before the close of the Exchange.


A Fund's foreign securities may trade on days that the Exchange is closed and
the Fund's daily share price is not calculated. As a result, the Fund's daily
share price may be affected, and you will not be able to purchase or redeem
shares.


SECURITY CONSIDERATIONS

You may give up some level of security by choosing to buy or sell shares by
telephone or online, rather than by mail. The Funds use procedures designed to
give reasonable assurance that telephone and online instructions are genuine,
including recording the transactions, testing the identity of the shareholder
placing the order and sending prompt written confirmation of transactions to the
shareholder of record.


The Funds and their service providers are not liable for acting upon
instructions communicated by telephone or online that they believe to be genuine
if these procedures are followed.


CONFIRMATION OF YOUR PURCHASES AND REDEMPTIONS

After any transaction, you will receive written confirmation including the share
price and the dollar amount and number of shares bought or redeemed. Exception:
Shares purchased under Systematic Investment Plans or redeemed under Systematic
Withdrawal Plans will be confirmed quarterly. Partial shares will be calculated
to three decimal places.

SHAREHOLDER REPORTS

To reduce expenses, a Fund may mail only one copy of most financial reports,
prospectuses and proxies to your household, even if you have more than one
account in the Fund. Call (800) 551-5849 if you need additional copies of
financial reports or prospectuses.

SHARE CERTIFICATES

To assist in minimizing administrative costs, share certificates will not be
issued. Records of share ownership are maintained by the Fund's transfer agent
in book entry form. If you are selling shares previously issued in certificate
form, you need to include the certificate along with your redemption or exchange
request. If you have lost your certificate, please call us at (800) 551-5849.

PURCHASES THROUGH BROKER-DEALERS


You may buy Fund shares through certain broker-dealers or other financial
organizations, but these organizations may charge you a fee or may have
different minimums for first-time or additional investments that are not
applicable if you buy shares directly from the Funds.




                             Berger Funds o January 29, 2001 Combined Prospectus



<PAGE>   34

32


OTHER INFORMATION
ABOUT YOUR ACCOUNT
(CONTINUED)
--------------------------------------------------------------------------------



THIRD-PARTY ADMINISTRATORS


Certain brokerage firms and other companies may provide administrative services
(such as sub-transfer agency, recordkeeping or shareholder communications
services) to investors purchasing shares of the Funds through those companies. A
Fund's advisor or a Fund (if approved by its directors or trustees) may pay fees
to these companies for their services. These companies may also be appointed as
agents for or authorized by the Funds to accept on their behalf purchase and
redemption requests that are received in good order. Subject to Fund approval,
certain of these companies may be authorized to designate other entities to
accept purchase and redemption orders on behalf of the Funds.

DATE-RELATED INFORMATION

Mutual funds and businesses around the world could be adversely affected if
computers do not properly process date-related information. The Funds' advisors
are addressing these issues for their computers and are getting reasonable
assurances from the Funds' other major service providers that they too are
addressing these issues to preserve smooth functioning of the Funds' trading,
pricing, shareholder account, custodial and other operations. There can be no
assurances, however, that all problems will be avoided.

These computer problems could also adversely affect the Funds' investments.
Improperly functioning computers may disrupt securities markets generally or
result in overall economic uncertainty. Individual companies may also be
adversely affected by the cost of fixing their computers, which could be
substantial. The Funds' investment managers consider these issues when
evaluating investments for the Funds.

REDEMPTIONS IN-KIND

Each Fund intends to redeem its shares only for cash, although in order to
protect the interest of remaining shareholders, it retains the right to redeem
its shares in-kind under unusual circumstances. In-kind payment means payment
will be made to you in portfolio securities rather than cash. If this occurs,
you will incur transaction costs if you sell the securities for cash. You may
have difficulty selling the securities and recovering the amount of your
redemption if the securities are illiquid.

ACCOUNT MINIMUMS

The Funds will charge all shareholder accounts with a balance of less than
$2,000 an annual fee of $10 unless the shareholder account is making automatic
monthly investments. This charge is designed to help offset the proportionately
higher costs of maintaining small accounts.

This charge will apply to accounts that have been over $2,000 at some point in
time only if the balance has dropped below this amount because shares were
redeemed, not because the share value declined.

Shares in accounts that do not meet the minimum balance requirement applicable
to them as described below may also be subject to involuntary redemption by the
Funds.

REDEMPTIONS BY THE FUNDS OF CERTAIN ACCOUNTS

To reduce their expenses, all Funds other than the Berger Growth Fund may
involuntarily redeem the shares in your account if your balance drops below
$2,000 - but only if it drops below this amount because you have redeemed
shares, not because the share value has declined. You will be given 60 days'
notice before a Fund undertakes any involuntary redemption. During that time,
you may buy more shares to bring your account above the minimum. Existing
shareholders of the following Funds have lower minimum balance requirements and
must maintain these minimum balances to avoid involuntary redemption:


<TABLE>
<CAPTION>
                                        IF YOUR SHARES WERE         YOUR MINIMUM          IF YOUR SHARES WERE       YOUR MINIMUM
FUND                                    PURCHASED BEFORE...      ACCOUNT BALANCE IS       PURCHASED BEFORE...    ACCOUNT BALANCE IS
-----------------------------------------------------------------------------------------------------------------------------------

<S>                                     <C>                      <C>                    <C>                      <C>
Berger Growth and Income Fund           January 26, 1996                $250            November 28, 1996             $   500
Berger Small Company Growth Fund        January 26, 1996                $250            November 28, 1996             $   500
Berger New Generation Fund                                                              November 28, 1996             $ 1,000
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


The Funds also reserve the right to close any account if it believes the
shareholder is engaging in activities which may be detrimental to the Funds.




Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   35

                                                                              33

BERGER FUNDS
--------------------------------------------------------------------------------

DISTRIBUTIONS AND TAXES

DISTRIBUTIONS OF INCOME AND GAINS

Unless you tell us that you want to receive your distributions in cash, they
will be reinvested automatically in Fund shares.


The Funds generally make two kinds of distributions:


o    Capital gains from the sale of portfolio securities held by a fund. Each
     Fund will distribute any net realized capital gains annually, normally in
     December.

o    Net investment income from interest or dividends received on securities
     held by a fund. The Funds will distribute their investment income as
     follows:

<TABLE>
<CAPTION>
                                                  DISTRIBUTIONS OF
FUND                                              NET INVESTMENT INCOME
--------------------------------------------------------------------------------

<S>                                               <C>
Berger Growth and Income Fund                     Quarterly
                                                  (normally in March, June,
                                                  September and December)
Berger Balanced Fund                              Quarterly
                                                  (normally in March, June,
                                                  September and December)
All other Berger Funds                            Annually
                                                  (normally in December)
--------------------------------------------------------------------------------
</TABLE>


The Funds reserve the right to reinvest into your account undeliverable or
uncashed dividend or distribution checks that remain outstanding for six months.
The dividend or distribution amount will be reinvested in shares of the
applicable Fund at the NAV next computed after the check is cancelled.


YOUR TAXES

You generally will owe tax on amounts distributed to you by the Funds in any
non-retirement account whether you reinvest them in additional shares or receive
them in cash. Distributions of gains from the sale of assets held by a Fund for
more than one year generally are taxable to you at the applicable long-term
capital gains rate, regardless of how long you have owned your Fund shares.
Distributions from other sources generally are taxed as ordinary income.

Distributions made by the Funds to you will normally be capital gains. A portion
of those gains may be net short-term capital gains, which are taxed as ordinary
income. The Berger Growth and Income Fund and the Berger Balanced Fund normally
will also distribute net investment income, which is taxed as ordinary income.
The other Berger Funds generally will not distribute net investment income,
although any net investment income that is generated as a by-product of managing
their portfolios will be distributed to you.

If you redeem Fund shares that have appreciated in value, you will have a
taxable gain upon redemption. Exchanges are treated as a redemption and purchase
for tax purposes. Therefore, you will also have a taxable gain if you exchange
shares that have appreciated in value.

ADDITIONAL TAX INFORMATION

You should consult your own tax advisor about your particular situation. For
more information about other tax matters, including backup withholding for
certain taxpayers and other tax aspects of redemptions, see the SAI.

TAX-SHELTERED RETIREMENT PLANS


The Funds offer several tax-qualified retirement plans for individuals,
businesses and nonprofit organizations. For information about establishing an
IRA, Roth IRA, profit-sharing or money purchase pension plan, 403(b) Custodial
Account, SEP-IRA, SIMPLE IRA account or other retirement plans, please call
(800) 551-5849, or write to the Berger Funds, P.O. Box 219958, Kansas City, MO
64121-9958. Trustees for existing 401(k) or other plans interested in using Fund
shares as an investment or investment alternative in their plans are invited to
call the Funds at (800) 259-2820.





                             Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   36

34

ORGANIZATION OF THE
BERGER FUNDS FAMILY
--------------------------------------------------------------------------------

INVESTMENT MANAGERS


The following companies provide investment management and administrative
services to the Funds. The advisory fees paid for the most recent fiscal year
are shown in the following table as a percentage of each Fund's average daily
net assets.

Berger LLC (210 University Blvd., Suite 900, Denver, CO 80206) serves as
investment advisor, sub-advisor or administrator to mutual funds and
institutional investors. Berger LLC has been in the investment advisory business
for 26 years. When acting as investment advisor, Berger LLC is responsible for
managing the investment operations of the Funds. Berger LLC also provides
administrative services to the Funds.

Bank of Ireland Asset Management (U.S.) Limited (BIAM) (75 Holly Hill Lane,
Greenwich, CT 06830 [representative office]; 26 Fitzwilliam Place, Dublin 2,
Ireland [main office]) serves as investment advisor or sub-advisor to pension
and profit-sharing plans and other institutional investors and mutual funds.
Bank of Ireland's investment management group was founded in 1966. As
sub-advisor, BIAM provides day-to-day management of the investment operations of
the Berger International Portfolio.

Perkins, Wolf, McDonnell & Company (PWM) (53 West Jackson Boulevard, Suite 722,
Chicago, IL 60604) provides day-to-day management of the investment operations
as sub-advisor of the Berger Mid Cap Value Fund.


Bay Isle Financial Corporation (Bay Isle) (160 Sansome Street, 17th Floor, San
Francisco, CA 94104) has been in the investment advisory business since 1987.
Bay Isle served as investment advisor to the Berger Information Technology Fund
(then known as the InformationTech 100(R) Fund) from its inception in April 1997
until July 1999, when Bay Isle became sub-advisor to the Fund. As sub-advisor,
Bay Isle provides day-to-day management of the Fund's investment operations.



Berger Funds o January 29, 2001 Combined Prospectus





<PAGE>   37
                                                                              35

BERGER FUNDS
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                    Advisory Fee Paid
                    by the Fund or
Fund                Portfolio           The Fund's Investment Manager
----                -----------------   -----------------------------
<S>                 <C>                 <C>
Berger              0.85% paid to       William F. K. Schaff, co-founder, co-owner and Chief Investment Officer of Bay
Information         Berger LLC(1)       Isle, has been the investment manager for the Berger Information Technology Fund
Technology Fund                         since its inception in April 1997. Mr. Schaff has been managing accounts of Bay
                                        Isle clients since 1987.

Berger New          0.83% paid to       Mark S. Sunderhuse, Executive Vice President of Berger LLC, is the investment
Generation Fund     Berger LLC          manager of the Berger New Generation Fund. Mr. Sunderhuse joined Berger LLC in
                                        January 1998 and assumed management of the Fund in January 1999. Mr. Sunderhuse
                                        has more than twelve years of experience in the investment management industry.

Berger Select       0.75% paid to       Jay W. Tracey, CFA (see Berger Growth Fund), Mark Sunderhuse (see Berger New
Fund                Berger LLC          Generation Fund), and Steve Fossel (see Berger Balanced Fund) are co-managers of
                                        the Berger Select Fund. Mr. Tracey and Mr. Fossel assumed co-management of the
                                        Fund in June 2000, and Mr. Sunderhuse assumed co-management of the Fund in May
                                        1999. Each co-portfolio manager selects a portion of the stocks that comprise
                                        the Fund's portfolio.

Berger Small        0.81% paid to       Jay W. Tracey, CFA (see Berger Growth Fund) and Mark Sunderhuse (see Berger New
Company Growth      Berger LLC          Generation Fund) are interim investment managers of the Berger Small Company
Fund                                    Growth Fund, assuming management of the Fund in June 2000.

Berger Mid Cap      0.75% paid to       Jay W. Tracey, CFA (see Berger Growth Fund) and Mark Sunderhuse (see Berger New
Growth Fund         Berger LLC          Generation Fund) are interim investment managers of the Berger Mid Cap Growth
                                        Fund, assuming management of the Fund in June 2000.

Berger Mid Cap      0.75% paid to       Thomas M. Perkins has been the lead investment manager for the Berger Mid Cap Value
Value Fund          Berger LLC          Fund since its inception in August 1998. Thomas Perkins has been an investment manager
                                        since 1974 and joined Perkins, Wolf, McDonnell & Company as a portfolio manager in
                                        1998. Robert H. Perkins has served as investment manager of the Berger Mid Cap Value
                                        Fund since its inception in August 1998. Robert Perkins has been an investment manager
                                        since 1970 and serves as President and a director of PWM. As lead manager, Tom Perkins
                                        is responsible for the daily decisions on the Fund's security selection.


Berger Growth       0.69% paid to       Jay W. Tracey, CFA Executive Vice President and Chief Investment Officer of Berger LLC.
Fund                Berger LLC          assumed management of the Fund in August 2000. Mr. Tracey joined Berger LLC in June
                                        2000 and has more than 24 years experience in the investment management industry.

Berger              0.85% paid to       BIAM, using a team approach, has been the investment manager for the Portfolio, in which
International       Berger LLC(1)       the Fund is invested, since its inception in 1996. BIAM is the sub-advisor to the Portfolio
Fund                                    and is part of Bank of Ireland's asset management group, established in 1966. Most of the
                                        team of investment professionals have been with the group for at least ten years.

Berger Large        0.74% paid to       Steven L. Fossel, CFA (see Berger Balanced Fund) was appointed interim portfolio manager
Cap Growth Fund     Berger LLC          in August 2000.

Berger Balanced     0.70% paid to       Steven L. Fossel, CFA, Vice President of Berger LLC, is the investment manager of the
Fund                Berger LLC          Berger Balanced Fund. Mr. Fossel joined Berger LLC in March 1998 and assumed management
                                        of the Berger Balance Fund in June 2000. Mr. Fossel has more than nine years of
                                        experience in the investment management industry.
</TABLE>



(1)  BBOI Worldwide LLC, a joint venture between Berger LLC and BIAM, was the
     advisor to the Berger International Fund until May 12, 2000, when Berger
     LLC became the Fund's advisor.





                             Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   38

36


ORGANIZATION OF THE
BERGER FUNDS FAMILY
(CONTINUED)
--------------------------------------------------------------------------------


PORTFOLIO TURNOVER

Portfolio changes are made whenever the Fund's investment manager believes that
the Fund's goal could be better achieved by investment in another security,
regardless of portfolio turnover. At times, portfolio turnover for a Fund may
exceed 100% per year. A turnover rate of 100% means the securities owned by a
Fund were replaced once during the year. Higher turnover rates may result in
higher brokerage costs to the Funds and in higher net taxable gains for you as
an investor. Each Fund's portfolio turnover rate can be found under the heading
"Financial Highlights for the Berger Funds Family."

12b-1 Arrangements

The Funds are "no-load" funds, meaning that you pay no sales charge or
commissions when you buy or sell Fund shares. However, each Fund has adopted a
12b-1 plan permitting it to pay a fee in connection with distribution of its
shares. Berger LLC is entitled to be paid a fee under each plan of 0.25% of each
Fund's average daily net assets. Because this fee is paid on an ongoing basis,
this may result in the cost of your investment increasing and over time may cost
you more than other types of sales charges. The fee may be used for such things
as marketing and promotion, compensation to dealers and others who provide
distribution and administrative services, and shareholder support services (such
as routine requests for information).

Special Fund Structures

MULTI-CLASS


The Berger Information Technology Fund, the Berger New Generation Fund and the
Berger Small Company Growth Fund each currently has two classes of shares. The
Investor Shares offered in this prospectus are available to the general public.
The other class of shares, Institutional Shares, are offered through a separate
prospectus and are designed for investors who maintain a minimum account balance
of $250,000. Each class of shares has its own expenses so that share price,
performance and distributions will differ between classes. The 12b-1 plans
adopted by these Funds apply only to the Investor Shares. For more information
on Institutional Shares, please call (800) 259-2820.


MASTER/FEEDER


The Berger International Fund is organized as a "feeder" fund in a
"master/feeder" structure. This means that the Fund's assets are all invested in
a larger "master" portfolio of securities, the Berger International Portfolio,
which has investment goals and policies identical to those of the Fund. The
other feeders investing in the Portfolio are the International Equity Fund and
the Berger International CORE Fund. The International Equity Fund has a minimum
balance requirement of $1,000,000 and the Berger International CORE Fund has a
minimum balance requirement of $250,000. Each Fund shares its own expenses so
that share price, performance and distributions will differ among feeders. For
more information on these feeders, please call (800) 259-2820.


The Fund may withdraw its investment in the Portfolio at any time, if the
Trustees determine that it is in the best interests of the Fund to do so. In
that event, the Fund might transfer to another master fund or hire its own
investment advisor. A withdrawal could result in the Fund receiving an in-kind
distribution of portfolio securities from the Portfolio. In that case, the Fund
could incur brokerage, tax or other charges if it converted the securities to
cash. In addition, an in-kind distribution could adversely affect the liquidity
of the Fund.

For more information on multi-class and master/feeder fund structures, see the
SAI.



Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   39

                                                                              37

FINANCIAL HIGHLIGHTS

FINANCIAL HIGHLIGHTS
FOR THE BERGER FUNDS
FAMILY
--------------------------------------------------------------------------------

The financial highlights will help you understand each Fund's financial
performance for the periods indicated. Certain information reflects financial
results for a single Fund share. Total return shows how much your investment in
the Fund increased or decreased during each period, assuming you reinvested all
dividends and distributions. Except as otherwise noted, PricewaterhouseCoopers
LLP, independent accountants, audited this information. Their report is included
in the Funds' annual report, which is available without charge upon request.

Berger Information Technology Fund ~ Investor Shares
For a Share Outstanding Throughout the Period


<TABLE>
<CAPTION>

                                                                              YEAR ENDED            PERIOD FROM JULY 2, 1999(1)
                                                                           SEPTEMBER 30, 2000         TO SEPTEMBER 30, 1999
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>                       <C>
Net asset value, beginning of period                                                                          $53.47
---------------------------------------------------------------------------------------------------------------------------
From investment operations
     Net investment income (loss)                                                                              (0.00)(5)
     Net realized and unrealized gains (losses) on investments
        and foreign currency transactions                                                                       3.99
Total from investment operations                                                                                3.99
Net asset value, end of period                                                                                $57.46
---------------------------------------------------------------------------------------------------------------------------
Total Return(2)                                                                                                 7.46%
---------------------------------------------------------------------------------------------------------------------------

Ratios/Supplemental Data:
Net assets, end of period (in thousands)                                                                      $4,811
Net expense ratio to average net assets(3)                                                                      1.83%(4)
Ratio of net income (loss) to average net assets                                                               (1.58)%(4)
Gross expense ratio to average net assets                                                                       2.16%(4)
Portfolio turnover rate(2)                                                                                        31%
</TABLE>


1.   Commencement of investment operations for Investor Shares.

2.   Not annualized.

3.   Net expenses represent gross expenses reduced by fees waived and/or
     reimbursed by the Advisor.

4.   Annualized.

5.   Amount represents less than $0.01 per share.



                             Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   40

38

FINANCIAL HIGHLIGHTS
FOR THE BERGER FUNDS
FAMILY
--------------------------------------------------------------------------------

Berger Information Technology Fund

Supplemental Financial Highlights
For a Share Outstanding Throughout the Period

The following financial highlights are for the Fund for periods ending February
28, 1998 and 1999, and for the period from March 1, 1999 to July 1, 1999, prior
to the Fund's reorganization. Prior to the Fund's reorganization on July 2,
1999, the Fund was known as the InformationTech 100(R) Fund. At the time of the
reorganization, the Fund adopted share classes and first began offering the
Investor Shares. Therefore, the 0.25% 12b-1 fee paid by the Investor Shares is
not reflected in the data on the table. Unless otherwise noted, this information
was audited by the Fund's prior independent accountants. Their report appears in
the 1999 Annual Report to Shareholders of the InformationTech 100(R) Fund and is
available from the Fund without charge upon request. The information for the
period March 1, 1999 to July 1, 1999 is unaudited.


<TABLE>
<CAPTION>

                                                    Period from
                                                    March 1, 1999                                     Period from
                                                   to July 1, 1999            Year Ended           April 8, 1997(1)
                                                    (Unaudited)            February 28, 1999     to February 28, 1998
--------------------------------------------------------------------------------------------------------------------------

<S>                                                <C>                     <C>                    <C>
Net asset value, beginning of period                    $44.36                $ 30.15                   $20.00
--------------------------------------------------------------------------------------------------------------------------
From investment operations
     Net investment income (loss)                        (0.19)                 (0.31)                   (0.10)
     Net realized and unrealized gains (losses)
        on investments and foreign
        currency transactions                            10.02                  14.52                    10.25
--------------------------------------------------------------------------------------------------------------------------
Total from investment operations                          9.83                  14.21                    10.15
--------------------------------------------------------------------------------------------------------------------------

Less dividends and distributions
     Distributions (from capital gains)                  (0.72)                    --                       --
Total dividends and distributions                        (0.72)                    --                       --
Net asset value, end of period                          $53.47                $ 44.36                   $30.15
--------------------------------------------------------------------------------------------------------------------------
Total Return(2)                                          20.54%                 47.13%                   50.75%
--------------------------------------------------------------------------------------------------------------------------

Ratios/Supplemental Data:
Net assets, end of period (in thousands)               $18,101                $12,446                   $2,674
Net expense ratio to average net assets(3)                1.48%(4)               1.50%                    1.50%(4)
Ratio of net income (loss) to average net assets         (1.22)%(4)             (1.19)%                  (1.01)%(4)
Gross expense ratio to average net assets                 2.03%(4)               2.67%                   12.17%(4)
Portfolio turnover rate(2)                                  11%                    35%                      33%
</TABLE>

(1)  Commencement of investment operations for the Fund.


(2)  Not annualized.


(3)  Net expenses represent gross expenses reduced by fees waived and/or
     reimbursed by the Advisor.

(4)  Annualized.



Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   41

                                                                              39

FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

Berger New Generation Fund - Investor Shares
For a Share Outstanding Throughout the Period


<TABLE>
<CAPTION>
                                                                                                             Period from March 29,
                                                                   Years Ended September 30,               1996(1) to September 30,
                                                        2000       1999              1998           1997            1996
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>      <C>             <C>             <C>              <C>
Net asset value, beginning of period                            $  12.66          $  14.72        $  11.82        $  10.00
-----------------------------------------------------------------------------------------------------------------------------
From investment operations
     Net investment income (loss)                                  (0.00)(6)            --           (0.13)           0.56
     Net realized and unrealized gains (losses) on
        investments and foreign currency transactions              13.61             (2.06)           3.64            1.26
-----------------------------------------------------------------------------------------------------------------------------
Total from investment operations                                   13.61             (2.06)           3.51            1.82
-----------------------------------------------------------------------------------------------------------------------------

Less dividends and distributions
     Dividends (from net investment income)                           --                --           (0.61)             --
     Distributions (from capital gains)                            (0.50)               --              --              --
Total dividends and distributions                                  (0.50)                            (0.61)             --
Net asset value, end of period                                  $  25.77          $  12.66        $  14.72        $  11.82
-----------------------------------------------------------------------------------------------------------------------------
Total Return(2)                                                   110.82%           (13.99)%         31.53%          18.20%
-----------------------------------------------------------------------------------------------------------------------------

Ratios/Supplemental Data:
Net assets, end of period (in thousands)                        $330,938          $113,693        $190,164        $116,912
Net expense ratio to average net assets(3)                          1.54%             1.72%           1.89%           1.90%(4)
Ratio of net income (loss) to average net assets                   (1.29)%           (1.37)%         (1.51)%         12.35%(4)
Gross expense ratio to average net assets                           1.54%             1.72%           1.89%           2.09%(4)
Portfolio turnover rate(2)                                           168%              243%            184%            474%(5)
</TABLE>


(1)  Commencement of investment operations for Investor Shares.

(2)  Not annualized.

(3)  Net expenses represent gross expenses reduced by fees waived and/or
     reimbursed by the Advisor.

(4)  Annualized.

(5)  Portfolio turnover was greater than anticipated during this period due to
     active trading undertaken in response to market conditions at a time when
     the Fund's assets were still relatively small and before the Fund was fully
     invested.

(6)  Amount represents less than $0.01 per share.


Berger Select Fund
For a Share Outstanding Throughout the Period


<TABLE>
<CAPTION>
                                                                                      Period from
                                                       Years Ended September 30,  December 31, 1997(1)
                                                         2000       1999          to September 30, 1998
-------------------------------------------------------------------------------------------------------
<S>                                                      <C>     <C>              <C>
Net asset value, beginning of period                            $     13.26        $     10.00
-------------------------------------------------------------------------------------------------------
From investment operations
     Net investment income (loss)                                      0.01               0.07
     Net realized and unrealized gains (losses) on
        investments and foreign currency transactions                  6.80               3.19
-------------------------------------------------------------------------------------------------------
Total from investment operations                                       6.81               3.26
-------------------------------------------------------------------------------------------------------

Less dividends and distributions
     Dividends (from net investment income)                           (0.05)                --
     Dividends (in excess of net investment income)                   (0.01)                --
     Distributions (from capital gains)                               (0.84)                --
Total dividends and distributions                                     (0.90)                --
Net asset value, end of period                                  $     19.17        $     13.26
-------------------------------------------------------------------------------------------------------
Total Return(2)                                                       53.06%             32.60%
-------------------------------------------------------------------------------------------------------

Ratios/Supplemental Data:
Net assets, end of period (in thousands)                        $   101,352        $    41,571
Net expense ratio to average net assets(3)                             1.29%              1.48%(5)
Ratio of net income (loss) to average net assets                       0.27%              1.13%(5)
Gross expense ratio to average net assets                              1.29%              1.48%(5)
Portfolio turnover rate(2)                                              696%              1486%(4)
</TABLE>


(1)  Commencement of investment operations.

(2)  Not annualized.

(3)  Net expenses represent gross expenses reduced by fees waived and/or
     reimbursed by the Advisor.

(4)  Portfolio turnover was greater than expected during this period due to
     active trading undertaken in response to market conditions at a time when
     the Fund's assets were still relatively small and before the Fund was fully
     invested.

(5)  Annualized.


                             Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   42

40

FINANCIAL HIGHLIGHTS
FOR THE BERGER FUNDS
FAMILY
--------------------------------------------------------------------------------

Berger Small Company Growth Fund ~ Investor Shares
For a Share Outstanding Throughout the Period


<TABLE>
<CAPTION>
                                                                   Years Ended September 30,
                                                            2000         1999              1998            1997           1996
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>          <C>             <C>             <C>              <C>
Net asset value, beginning of period                                   $   3.61          $   5.33        $   4.74        $   3.61
----------------------------------------------------------------------------------------------------------------------------------
From investment operations
     Net investment income (loss)                                         (0.00)(1)            --           (0.05)          (0.03)
     Net realized and unrealized gains (losses) on
        investments and foreign currency transactions                      1.95             (1.24)           0.84            1.16
----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations                                           1.95             (1.24)           0.79            1.13
----------------------------------------------------------------------------------------------------------------------------------

Less dividends and distributions
     Dividends (from net investment income)                                  --                --              --              --
     Distributions (from capital gains)                                   (0.70)            (0.48)          (0.20)             --
Total dividends and distributions                                         (0.70)            (0.48)          (0.20)             --
Net asset value, end of period                                         $   4.86          $   3.61        $   5.33        $   4.74
----------------------------------------------------------------------------------------------------------------------------------
Total Return                                                              62.78%           (24.70)%         17.68%          31.30%
----------------------------------------------------------------------------------------------------------------------------------

Ratios/Supplemental Data:
Net assets, end of period (in thousands)                               $675,637          $561,741        $902,685        $871,467
Net expense ratio to average net assets(2)                                 1.60%             1.48%           1.67%           1.68%
Ratio of net income (loss) to average net assets                          (1.21)%           (1.01)%         (1.09)%         (0.97)%
Gross expense ratio to average net assets                                  1.60%             1.59%           1.67%           1.68%
Portfolio turnover rate                                                     128%               97%            111%             91%
</TABLE>


(1)  Amount represents less than $0.01 per share.

(2)  Net expenses represent gross expenses reduced by fees waived and/or
     reimbursed by the Advisor.






Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   43

                                                                              41

FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

Berger Mid Cap Growth Fund
For a Share Outstanding Throughout the Period


<TABLE>
<CAPTION>

                                                                                      Period from
                                                         Years ended September 30,   December 31,1997(1)
                                                          2000          1999        to September 30, 1998
----------------------------------------------------------------------------------------------------------
<S>                                                     <C>        <C>               <C>
Net asset value, beginning of period                               $    10.93          $    10.00
----------------------------------------------------------------------------------------------------------
From investment operations
     Net investment income (loss)                                       (0.00)(5)              --
     Net realized and unrealized gains (losses) on
        investments and foreign currency transactions                   11.10                0.93
----------------------------------------------------------------------------------------------------------
Total from investment operations                                        11.10                0.93
----------------------------------------------------------------------------------------------------------

Less dividends and distributions
     Distributions (from capital gains)                                 (0.21)                 --
Total dividends and distributions                                       (0.21)                 --
Net asset value, end of period                                     $    21.82          $    10.93
----------------------------------------------------------------------------------------------------------
Total Return(2)                                                        102.76%               9.30%
----------------------------------------------------------------------------------------------------------

Ratios/Supplemental Data:
Net assets, end of period (in thousands)                           $   25,550          $    4,283
Net expense ratio to average net assets(3)                               1.78%               2.00%(4)
Ratio of net income (loss) to average net assets                        (1.03)%             (0.82)%(4)
Gross expense ratio to average net assets                                1.78%               2.46%(4)
Portfolio turnover rate(2)                                                178%                262%
</TABLE>


(1)  Commencement of investment operations.

(2)  Not annualized.

(3)  Net expenses represent gross expenses reduced by fees waived and/or
     reimbursed by the Advisor.

(4)  Annualized.

(5)  Amount represents less than $0.01 per share.


Berger Mid Cap Value Fund
For a Share Outstanding Throughout the Period


<TABLE>
<CAPTION>
                                                                                       Period from
                                                         Years Ended September 30,   August 12, 1998(1)
                                                           2000          1999       to September 30, 1998
---------------------------------------------------------------------------------------------------------
<S>                                                       <C>       <C>              <C>
Net asset value, beginning of period                                $     9.33        $    10.00
---------------------------------------------------------------------------------------------------------
From investment operations
     Net investment income (loss)                                         0.07              0.03
     Net realized and unrealized gains (losses) on
         investments and foreign currency transactions                    2.83             (0.70)
---------------------------------------------------------------------------------------------------------
Total from investment operations                                          2.90             (0.67)
---------------------------------------------------------------------------------------------------------

Less dividends and distributions
     Dividends (from net investment income)                              (0.06)               --
Total dividends and distributions                                        (0.06)               --
Net asset value, end of period                                      $    12.17        $     9.33
---------------------------------------------------------------------------------------------------------
Total Return(2)                                                          31.12%            (6.70)%
---------------------------------------------------------------------------------------------------------

Ratios/Supplemental Data:
Net assets, end of period (in thousands)                            $   22,918        $   19,710
Net expense ratio to average net assets(3)                                1.62%             1.68%(4)
Ratio of net income (loss) to average net assets                          0.54%             2.30%(4)
Gross expense ratio to average net assets                                 1.62%             1.68%(4)
Portfolio turnover rate(2)                                                 154%               25%
</TABLE>


(1)  Commencement of investment operations.

(2)  Not annualized.

(3)  Net expenses represent gross expenses reduced by fees waived and/or
     reimbursed by the Advisor.

(4)  Annualized.



                             Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   44

42

FINANCIAL HIGHLIGHTS
FOR THE BERGER FUNDS
FAMILY
--------------------------------------------------------------------------------

Berger Growth Fund
For a Share Outstanding Throughout the Period


<TABLE>
<CAPTION>
                                                                            Years Ended September 30,
                                                          2000     1999              1998            1997(1)          1996(1)
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>     <C>              <C>              <C>                <C>
Net asset value, beginning of period                            $   11.99          $   21.51        $   19.64        $   18.89
--------------------------------------------------------------------------------------------------------------------------------
From investment operations
     Net investment income (loss)                                   (0.00)(2)             --            (0.09)           (0.08)
     Net realized and unrealized gains (losses) on
        investments and foreign currency transactions                4.55              (2.57)            4.73             1.76
--------------------------------------------------------------------------------------------------------------------------------
Total from investment operations                                     4.55              (2.57)            4.64             1.68
--------------------------------------------------------------------------------------------------------------------------------

Less dividends and distributions
     Distributions (from capital gains)                             (0.98)             (6.95)           (2.77)           (0.93)
Total dividends and distributions                                   (0.98)             (6.95)           (2.77)           (0.93)
Net asset value, end of period                                  $   15.56          $   11.99        $   21.51        $   19.64
--------------------------------------------------------------------------------------------------------------------------------
Total Return                                                        38.96%            (16.08)%          26.50%            9.36%
--------------------------------------------------------------------------------------------------------------------------------

Ratios/Supplemental Data:
Net assets, end of period (in thousands)                        $1,333,794         $1,286,828       $1,889,048       $2,012,706
Net expense ratio to average net assets(3)                           1.36%              1.38%            1.41%            1.42%
Ratio of net income (loss) to average net assets                    (0.38)%            (0.38)%          (0.40)%          (0.43)%
Gross expense ratio to average net assets                            1.36%              1.38%            1.41%            1.42%
Portfolio turnover rate                                               274%               280%             200%             122%
</TABLE>


(1)  Per share calculations for the period were based on average shares
     outstanding.

(2)  Amount represents less than $0.01 per share.

(3)  Net expenses represent gross expenses reduced by fees waived and/or
     reimbursed by the Advisor.



Berger International Fund

For a Share Outstanding Throughout the Period


<TABLE>
<CAPTION>
                                                                                                         Period from
                                                                  Years ended September 30,           November 7, 1996(1)
                                                            2000         1999              1998       to September 30, 1997
---------------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>      <C>                <C>                 <C>
Net asset value, beginning of period                                $     10.06        $     11.46          $     10.00
---------------------------------------------------------------------------------------------------------------------------
From investment operations
     Net investment income (loss)                                         (0.07)              0.50(2)              0.05
     Net realized and unrealized gains (losses)
        on investments and foreign currency transactions                   3.01              (1.46)(2)             1.41
---------------------------------------------------------------------------------------------------------------------------
Total from investment operations                                           2.94              (0.96)                1.46
---------------------------------------------------------------------------------------------------------------------------

Less dividends and distributions
     Dividends (from net investment income)                               (0.47)             (0.06)                  --
     Distributions (in excess of capital gains)                           (0.02)             (0.38)                  --
Total dividends and distributions                                         (0.49)             (0.44)                  --
Net asset value, end of period                                      $     12.51        $     10.06          $     11.46
---------------------------------------------------------------------------------------------------------------------------
Total Return(3)                                                           29.64%             (8.46)%              14.60%
---------------------------------------------------------------------------------------------------------------------------

Ratios/Supplemental Data:
Net assets, end of period (in thousands)                            $    23,014        $    16,515          $    18,673
Net expense ratio to average net assets(4),(5)                             1.76%              1.80%                1.90%(6)
Ratio of net income (loss) to average net assets                          (0.01)%             2.20%                0.61%(6)
Gross expense ratio to average net assets(5)                               1.77%              1.83%                1.99%(6)
Portfolio turnover rate(3),(7)                                               16%                17%                  17%
</TABLE>


(1)  Commencement of investment operations.

(2)  Restated.

(3)  Not annualized.

(4)  Net expenses represent gross expenses reduced by fees waived and/or
     reimbursed by the Portfolio's Advisor.

(5)  Reflects the Fund's expenses plus the Fund's pro rata share of the
     Portfolio's expenses.

(6)  Annualized.

(7)  Represents the portfolio turnover rate of the Portfolio. All of the
     investable assets of the Fund are invested in the Portfolio.


Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   45

                                                                              43

FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------


The following table is based on the historical financial statements of the pool
of assets that was, in a practical sense, the predecessor to the Portfolio in
which the Berger International Fund is invested. The total return, expense
ratios and per share data on the table have been adjusted to reflect the
increase in Fund operating expenses that was expected to occur when the pool's
assets were transferred to the Portfolio over the pool's actual operating
expenses for each period shown.


The table covers the period from the beginning of the pool through October 11,
1996, when the pool's assets were transferred to the Portfolio. The pool was not
registered with the SEC and was not subject to the investment restrictions
imposed on mutual funds. If the pool had been registered, the pool's financial
results might have been adversely affected.

International Equity Pool

Adjusted Selected Data (Unaudited)
For a Share Outstanding Throughout the Period

<TABLE>
<CAPTION>
                                     Period From                                                                    Period From
                                     January 1,                                                                     July 31,
                                      1996 TO                                                                       1989(1) TO
                                     October 11                 Years Ended December 31,                            December 31,
                                       1996(2)        1995       1994        1993       1992       1991       1990       1989
-------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>           <C>          <C>         <C>        <C>        <C>        <C>         <C>
  Per Share Data:(3)
  Net asset value, beginning of
     period                           $  8.94       $  7.52    $  8.16     $  5.98    $  5.43    $  4.80    $  5.00     $  4.11
-------------------------------------------------------------------------------------------------------------------------------
  From investment operations
     Net investment income (loss)        0.11          0.12       0.06        0.10       0.08       0.08       0.06        0.02
  Net realized and unrealized
     gain (loss) on
     investments                         0.95          1.30      (0.70)       2.08       0.47       0.55      (0.26)       0.87
-------------------------------------------------------------------------------------------------------------------------------
  Total from investment operations       1.06          1.42      (0.64)       2.18       0.55       0.63      (0.20)       0.89
-------------------------------------------------------------------------------------------------------------------------------
  Net asset value, end of period      $ 10.00       $  8.94    $  7.52     $  8.16    $  5.98    $  5.43    $  4.80     $  5.00
-------------------------------------------------------------------------------------------------------------------------------
  Total Return(3)                       11.91%        18.78%     (7.80)%     36.38%     10.21%     13.18%     (4.11)%     21.80%
-------------------------------------------------------------------------------------------------------------------------------

  Ratios/Supplemental Data:
Net Assets, end of period
     (in thousands)                   $ 4,482       $ 5,662    $ 6,215     $ 5,495    $ 3,016    $ 2,364    $ 1,201     $   916
  Net expense ratio to average
     net assets(3),(4)                   1.78%(5)      1.78%      1.78%       1.78%      1.78%      1.78%      1.78%       1.78%(5)
  Ratio of net income (loss) to
     average net assets(3)               1.11%(5)      1.03%      0.42%       0.92%      0.78%      1.26%      0.79%      (0.47)%(5)
  Gross expense ratio to average
     net assets(3)                       1.83%(5)      1.83%      1.83%       1.83%      1.83%      1.83%      1.83%       1.83%(5)
  Portfolio turnover rate                  30%           34%        62%         41%        36%        27%        31%        413%
</TABLE>

(1)  Commencement of operations of the pool.

(2)  Commencement of operations of the Portfolio in which the Fund is invested.

(3)  Adjusted to reflect the increase in expenses expected in operating the
     Fund, including the Fund's pro rata share of the Portfolio's expenses, net
     of fee waivers. Additionally, total return is not annualized for periods of
     less than one full year.

(4)  Net expenses represent gross expenses less fees that would have been waived
     by the Advisor of the Portfolio if the fee waiver in effect for the
     Portfolio had been in effect for the pool.

(5)  Annualized.


                             Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   46


44

FINANCIAL HIGHLIGHTS
FOR THE BERGER FUNDS
FAMILY
--------------------------------------------------------------------------------

Berger Growth and Income Fund
For a Share Outstanding Throughout the Period


<TABLE>
<CAPTION>
                                                                              Years Ended September 30,
                                                          2000        1999              1998            1997            1996
------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>     <C>              <C>              <C>             <C>
Net asset value, beginning of period                             $     13.60       $     16.72     $     14.06     $     12.89
------------------------------------------------------------------------------------------------------------------------------
From investment operations
     Net investment income (loss)                                      (0.00)(3)          0.04            0.14            0.20
     Net realized and unrealized gains (losses)
        on investments and foreign currency transactions                4.53             (0.30)           4.28            1.17
------------------------------------------------------------------------------------------------------------------------------
Total from investment operations                                        4.53             (0.26)           4.42            1.37
------------------------------------------------------------------------------------------------------------------------------

Less dividends and distributions
     Dividends (from net investment income)                               --             (0.03)          (0.13)          (0.20)
     Dividends (in excess of net investment income)                    (0.01)            (0.01)             --              --
     Distributions (from capital gains)                                (2.80)            (2.82)          (1.63)             --
Total dividends and distributions                                      (2.81)            (2.86)          (1.76)          (0.20)
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                                   $     15.32       $     13.60     $     16.72     $     14.06
------------------------------------------------------------------------------------------------------------------------------
Total Return                                                           38.67%            (1.60)%         34.56%          10.66%
------------------------------------------------------------------------------------------------------------------------------

Ratios/Supplemental Data:
Net assets, end of period (in thousands)                         $   379,356       $   301,330     $   357,023     $   315,538
Net expense ratio to average net assets(1)                              1.35%             1.44%           1.51%           1.56%
Ratio of net income (loss) to average net assets                       (0.22)%            0.25%           0.87%           1.39%
Gross expense ratio to average net assets                               1.35%             1.44%           1.51%           1.56%
Portfolio turnover rate                                                  173%              417%(2)         173%            112%
</TABLE>


(1)  Net expenses represent gross expenses reduced by fees waived and/or
     reimbursed by the Advisor.

(2)  Portfolio turnover was greater than anticipated during this period due to
     higher than normal trading activity undertaken in response to market
     conditions that existed at that time.

(3)  Amount represents less than $0.01 per share.


Berger Balanced Fund
For a Share Outstanding Throughout the Period


<TABLE>
<CAPTION>
                                                                  Years Ended September 30,
                                                             2000          1999            1998(1)
-----------------------------------------------------------------------------------------------------
<S>                                                         <C>     <C>             <C>
Net asset value, beginning of period                                $     13.28     $     10.00
-----------------------------------------------------------------------------------------------------
From investment operations
     Net investment income                                                 0.23            0.22
     Net realized and unrealized gains on investments
        and foreign currency transactions                                  4.69            5.17
-----------------------------------------------------------------------------------------------------
Total from investment operations                                           4.92            5.39
-----------------------------------------------------------------------------------------------------

Less dividends and distributions
     Dividends (from net investment income)                               (0.23)          (0.21)
     Distributions (from capital gains)                                   (1.35)          (1.90)
Total dividends and distributions                                         (1.58)          (2.11)
-----------------------------------------------------------------------------------------------------
Net asset value, end of period                                      $     16.62     $     13.28
-----------------------------------------------------------------------------------------------------
Total Return                                                              39.41%          56.77%
-----------------------------------------------------------------------------------------------------

Ratios/Supplemental Data:
Net assets, end of period (in thousands)                            $   122,766     $    30,721
Net expense ratio to average net assets(2)                                 1.23%           1.50%
Ratio of net income to average net assets                                  1.63%           1.81%
Gross expense ratio to average net assets                                  1.23%           1.57%
Portfolio turnover rate                                                     227%            658%(3)
</TABLE>


(1)  The Fund had no financial highlights for the one day of operations during
     the period ended September 30, 1997.

(2)  Net expenses represent gross expenses reduced by fees waived and/or
     reimbursed by the Advisor.

(3)  Portfolio turnover was greater than expected during this period due to
     higher than normal trading activity undertaken in response to market
     conditions at a time when the Fund's assets were still relatively small and
     before the Fund was fully invested.


Berger Funds o January 29, 2001 Combined Prospectus


<PAGE>   47





                       This page intentionally left blank.


<PAGE>   48





                       This page intentionally left blank.



<PAGE>   49




FOR MORE INFORMATION


Additional information about the Funds' investments is available in the Funds'
semi-annual and annual reports to shareholders. the Funds' annual report
contains a discussion of the market conditions and investment strategies that
affected the Funds' performance over the past year.


You may wish to read the Statement of Additional Information (SAI) for more
information on the Funds and the securities they invest in. The SAI is
incorporated into this prospectus by reference, which means that it is
considered to be part of the prospectus.

You can get free copies of the annual and semi-annual reports and the SAI,
request other information or get answers to your questions about the Funds by
writing or calling the Funds at:

Berger Funds
P.O. Box 219958
Kansas City, MO 64121-9958
(800)333-1001
bergerfunds.com

Text-only versions of Fund documents can be viewed online or downloaded from
the EDGAR database on the SEC's Web site at sec.gov.


You can also obtain copies by visiting the SEC's Public Reference Room in
Washington D.C. For information on the operation of the Public Reference Room,
call (202) 942-8090. Copies of documents may also be obtained, after paying a
duplicating fee, by sending your request to the following e-mail address:
[email protected]. or by writing to the SEC's Public Reference Section,
Washington, D.C. 20549-6009.


INVESTMENT COMPANY ACT FILE NUMBERS:

Berger Investment portfolio Trust 811-8046
o  Berger Information Technology Fund - Investor Shares
o  Berger New Generation Fund - Investor Shares
o  Berger Select Fund
o  Berger Small Company Growth Fund - Investor Shares
o  Berger Mid Cap Growth Fund
o  Berger Mid Cap Value Fund
o  Berger Balanced Fund


Berger Growth Fund, Inc. 811-1382

o  Berger Growth Fund


Berger Worldwide Funds Trust 811-07669
o  Berger International Fund


Berger Growth and Income Fund, Inc. 811-1383
o  Berger Growth and Income Fund

Compros

<PAGE>   50


                    BERGER INFORMATION TECHNOLOGY FUND -- INSTITUTIONAL SHARES

                    Prospectus

                    January 29, 20001

                    [BERGER FUNDS LOGO]



The Securities and Exchange Commission has not approved or disapproved any
shares offered in this prospectus or determined whether this prospectus is
accurate or complete. Anyone who tells you otherwise is committing a crime. Like
all mutual funds, an investment in the Fund is not a bank deposit and is not
insured or guaranteed by the FDIC or any other government agency. There is no
guarantee that the Fund will meet its investment goal, and although you have the
potential to make money you could also lose money in the Fund.

<PAGE>   51


BERGER FUNDS is a registered service mark of Berger LLC; THE BERGER MOUNTAIN
LOGO is a registered trademark of Berger LLC; BERGER INFORMATION TECHNOLOGY FUND
is a service mark of Berger LLC; other marks referred to herein are the
trademarks, service marks, registered trademarks or registered service marks or
the respective owners thereof.



<PAGE>   52
                                                                               3

CONTENTS
--------------------------------------------------------------------------------

BERGER FUNDS(R) are a no-load family of mutual funds. A mutual fund pools money
from shareholders and invests in a portfolio of securities. This prospectus
offers the class of shares designated as Institutional Shares of the Berger
Information Technology Fund. These shares are designed for pension and
profit-sharing plans, employee benefit trusts, endowments, foundations and
corporations, as well as high net worth individuals and financial
intermediaries, who are willing to maintain a minimum account balance of
$250,000. Institutional Shares are also made available for purchase and dividend
reinvestment in the account of all holders of Institutional Shares who received
their shares in the Fund's reorganization on July 2, 1999.


<TABLE>
<S>                                                                     <C>
BERGER INFORMATION TECHNOLOGY FUND(SM) - Institutional Shares ...        4

The Fund's Goal and Principal Investment Strategies .............        4

Principal Risks .................................................        4

The Fund's Past Performance .....................................        5

Fund Expenses ...................................................        6

INVESTMENT TECHNIQUES, SECURITIES AND ASSOCIATED RISKS...........        8

Risk and Investment Glossary ....................................        8

BUYING SHARES ...................................................       12

SELLING (REDEEMING) SHARES ......................................       14

INFORMATION ABOUT YOUR ACCOUNT ..................................       15

Exchanging Shares ...............................................       15

Signature Guarantees/Special Documentation ......................       16

Your Share Price ................................................       16

OTHER INFORMATION ABOUT YOUR ACCOUNT ............................       17

Distributions and Taxes .........................................       19

Tax-Sheltered Retirement Plans ..................................       20

ORGANIZATION OF THE FUND ........................................       21

Investment Managers .............................................       21

Special Fund Structure ..........................................       21

FINANCIAL HIGHLIGHTS FOR THE FUND ...............................       22
</TABLE>



                              Berger Funds o January 29, 2001 Berger Information
                                         Technology Fund -- Institutional Shares


<PAGE>   53
4

BERGER INFORMATION
TECHNOLOGY FUND --
INSTITUTIONAL SHARES                                     Ticker Symbol    BINFX
--------------------------------------------------------------------------------

THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES

The Fund aims for capital appreciation. In pursuing its goal, the Fund invests
at least 80% of its assets in common stocks of companies in the information
technology group of industries, such as software, hardware, computer consulting
services, communications and Internet services and products. The Fund's
investment manager analyzes trends in information technology spending and
demand, then identifies companies it believes are best positioned to benefit
from those trends. The Fund generally invests the remainder of its assets in
information technology-related companies whose stock price the investment
manager believes is undervalued relative to their assets, earnings, cash flow or
business franchise.

The Fund's investment manager generally looks for companies:

o    That dominate their industries or a particular market segment

o    That have or are developing products or services that represent significant
     technological advancements or improvements

o    That have strong fundamentals, strong management and strong product
     positioning.

The Fund primarily invests in common stocks. The Fund is free to invest in
companies of any size market capitalization. The Fund's investment manager will
generally sell a security when it no longer meets the manager's investment
criteria or when it has met the manager's expectations for appreciation.

PRINCIPAL RISKS


You may be interested in the Fund if you are comfortable with above-average risk
and intend to make a long-term investment commitment. Like all managed funds,
there is a risk that the investment manager's strategy for managing the Fund may
not achieve the desired results. In addition, the price of common stock moves up
and down in response to corporate earnings and developments, economic and market
conditions and unanticipated events. As a result, the price of the Fund's
investments may go down and you could lose money on your investment.


Given the Fund's concentration in industries that are rapidly changing, its
share price may fluctuate more than that of funds invested in more stable
industries. Companies in the information technology industries may have narrow
product lines and their products and services are often subject to intense
competition and rapid obsolescence.


Because the Fund's investments are focused in the information technology sector,
the Fund is more susceptible to adverse events and market pressures impacting
the industries included in that sector, which may pose greater market and
liquidity risk.


See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.



Berger Funds o January 29, 2001 Berger Information
Technology Fund -- Institutional Shares


<PAGE>   54

                                                                               5


BERGER INFORMATION
TECHNOLOGY FUND
--------------------------------------------------------------------------------


THE FUND'S PAST PERFORMANCE


The information below shows the Fund's performance since it began operation
through December 31, 2000. These returns include reinvestment of all dividends
and capital gains distributions and reflect Fund expenses. As with all mutual
funds, past performance does not guarantee future results.


Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year since the Fund began.

                  YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31

                                    [CHART]


<TABLE>
<S>                                        <C>
                              1998           62.72%
                              1999          165.53%
                              2000                %
</TABLE>




                            BEST QUARTER:        %

                            WORST QUARTER:       %



Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Wilshire 5000 Index
(Wilshire 5000). While the Fund does not seek to match the returns of the
Wilshire 5000, this index is a good indicator of general stock market
performance. You may not invest in the Wilshire 5000, and unlike the Fund, it
does not incur fees or charges.

AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2000



<TABLE>
<CAPTION>
                                                            Life of the Fund
                                                  1 Year     (April 8, 1997)
--------------------------------------------------------------------------------
<S>                                             <C>         <C>
The Fund                                             %              %
Wilshire 5000                                        %              %
--------------------------------------------------------------------------------
</TABLE>



                              Berger Funds o January 29, 2001 Berger Information
                                         Technology Fund -- Institutional Shares


<PAGE>   55
6

BERGER INFORMATION
TECHNOLOGY FUND --
INSTITUTIONAL SHARES
--------------------------------------------------------------------------------

FUND EXPENSES

As a shareholder in the Fund, you do not pay any sales loads, but you do
indirectly bear Annual Fund Operating Expenses, which vary from year to year.


<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES                                               %
--------------------------------------------------------------------------------
<S>                                                                         <C>
Redemption Fee (as a percentage of amount redeemed
or exchanged if shares held less than 6 months)                             1.00
Exchange Fee*                                                               None
--------------------------------------------------------------------------------
</TABLE>



<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)                                              %
--------------------------------------------------------------------------------
<S>                                                                         <C>
Management fee                                                               .85
Other expenses                                                               .18
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses                                        1.03
--------------------------------------------------------------------------------
</TABLE>



* The 1% redemption fee referenced in the table will be imposed on shares
exchanged if held less than 6 months, since an exchange is treated as a
redemption followed by a purchase.

1. Under a written contract, the Fund's investment advisor waives its fee or
reimburses the Fund for expenses to the extent that, at any time during the life
of the Fund, the annual operating expenses for the Institutional Shares class of
the Fund in any fiscal year, including the investment advisory fee, but
excluding brokerage commissions, interest, taxes and extraordinary expenses,
exceed 1.50% of the Fund's average daily net assets attributable to the
Institutional Shares for that fiscal year. The contract may not be terminated or
amended except by a vote of the Fund's Board of Trustees.


UNDERSTANDING EXPENSES

Annual Fund operating expenses are paid by the Fund. As a result, they reduce
the Fund's return. Fund expenses include management fees and administrative
costs such as shareholder recordkeeping and reports, custodian and pricing
services and registration fees.



Berger Funds o January 29, 2001 Berger Information
Technology Fund -- Institutional Shares


<PAGE>   56
                                                                               7


BERGER INFORMATION
TECHNOLOGY FUND
--------------------------------------------------------------------------------


EXAMPLE COSTS


The following example helps you compare the cost of investing in the Fund with
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses:


o  $10,000 initial investment

o  5% total return for each year

o  Fund operating expenses remain the same for each period

o  Redemption after the end of each period

Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:

BERGER INFORMATION TECHNOLOGY - INSTITUTIONAL SHARES


<TABLE>
<CAPTION>
YEARS                                                                         $
--------------------------------------------------------------------------------
<S>                                                                          <C>
One
Three
Five
Ten
--------------------------------------------------------------------------------
</TABLE>



                              Berger Funds o January 29, 2001 Berger Information
                                         Technology Fund -- Institutional Shares


<PAGE>   57
8

INVESTMENT TECHNIQUES,
SECURITIES AND ASSOCIATED
RISKS
--------------------------------------------------------------------------------

BEFORE YOU INVEST...


in the Fund, make sure you understand the risks involved. All investments
involve risk. Generally, the greater the risk, the greater the potential for
return. The reverse is also generally true-the lower the risk, the lower the
potential for return.


Like all mutual funds, an investment in the Fund is not a bank deposit and is
not insured or guaranteed by the FDIC or any other government agency. The Fund
is not a complete investment program, but may serve to diversify other types of
investments in your portfolio. There is no guarantee that the Fund will meet its
investment goal, and although you have the potential to make money, you could
also lose money by investing in the Fund.

The following glossary will help you further understand the risks the Fund takes
by investing in certain securities and the investment techniques used by the
Fund. You may get more detailed information about the risks of investing in the
Fund in the Statement of Additional Information (SAI), including a discussion of
debt security ratings in Appendix A to the SAI.

RISK AND INVESTMENT GLOSSARY

Borrowing refers to a loan of money from a bank or other financial institution
undertaken by the Fund for temporary or emergency reasons only. The Fund will
not borrow more than 25% of its total assets. Leverage Risk


Call risk is the possibility that an issuer may redeem or "call" a fixed-income
security before maturity at a price below its current market price. An increase
in the likelihood of a call may reduce the security's price.


Common stock is a share of ownership (equity) interest in a company.

Companies with limited operating histories are securities issued by companies
that have been in continuous operation for less than three years. Sometimes
called "unseasoned" issuers. Market, Liquidity and Information Risks


Convertible securities(1) are debt or equity securities that may be converted on
specified terms into stock of the issuer. Market, Interest Rate, Prepayment and
Credit Risks


Correlation risk occurs when the Fund "hedges"--uses one investment to offset
the Fund's position in another. If the two investments do not behave in relation
to one another the way Fund managers expect them to, then unexpected results may
occur.

Credit risk means that the issuer of a security or the counterparty to an
investment contract may default or become unable to pay its obligations when
due.


Currency risk happens when the Fund buys or sells a security denominated in
foreign currency. Foreign currencies "float" in value against the U.S. dollar.
Adverse changes in foreign currency values can cause investment losses when the
Fund's investments are converted to U.S. dollars.


Berger Funds o January 29, 2001 Berger Information
Technology Fund -- Institutional Shares


<PAGE>   58
                                                                               9


BERGER INFORMATION
TECHNOLOGY FUND
--------------------------------------------------------------------------------


Diversification means a diversified fund may not, with respect to at least 75%
of its assets, invest more than 5% in the securities of one company. A
nondiversified fund may be more volatile than a diversified fund because it
invests more of its assets in a smaller number of companies and the gains or
losses on a single stock will therefore have a greater impact on the fund's
share price. The Fund is a diversified fund.

Financial futures(2) are exchange-traded contracts on securities, securities
indexes or foreign currencies that obligate the holder to take or make future
delivery of a specified quantity of those underlying securities or currencies on
a predetermined future date at a predetermined price. Not more than 5% of the
Fund's net assets may be used for initial margins for futures and premiums for
options. Hedging, Correlation, Opportunity and Leverage Risks

Foreign securities are issued by companies located outside of the United States.
The Fund considers a company to be located outside the United States if the
principal securities trading market for its equity securities is located outside
the U.S. or it is organized under the laws of, and has a principal office in, a
country other than the U.S. Market, Currency, Transaction, Liquidity,
Information and Political Risks

Forward foreign currency contracts(2) are privately negotiated contracts
committing the holder to purchase or sell a specified quantity of a foreign
currency on a predetermined future date at a predetermined price. Hedging,
Credit, Correlation, Opportunity and Leverage Risks

Hedging risk comes into play when the Fund uses a security whose value is based
on an underlying security or index to "offset" the Fund's position in another
security or currency. The objective of hedging is to offset potential losses in
one security with gains in the hedge. But a hedge can eliminate or reduce gains
as well as offset losses. (Also see "Correlation risk.")


Illiquid and restricted securities are securities that, by rules of their issue
or by their nature, cannot be sold readily. These do not include liquid Rule
144A securities. The Fund will not invest more than 15% of its net assets in
illiquid securities, including restricted securities not deemed to be liquid.
Market, Liquidity and Transaction Risks


Information risk means that information about a security or issuer might not be
available, complete, accurate or comparable.


Initial public offering (IPO)(3) is the sale of a company's securities to the
public for the first time. IPO companies can be small and have limited operating
histories. The price of IPO securities can be highly unstable because of
prevailing market psychology and the small number of shares available. In
addition, the quality and number of IPOs available for purchase may diminish in
the future, and their contribution to Fund performance may be less significant
as a Fund grows in size. Market, Liquidity and Information Risks



                              Berger Funds o January 29, 2001 Berger Information
                                         Technology Fund -- Institutional Shares



<PAGE>   59

10

INVESTMENT TECHNIQUES
SECURITIES AND ASSOCIATED
RISKS (CONTINUED)
--------------------------------------------------------------------------------

Interest rate risk is the risk that changes in interest rates will adversely
affect the value of an investor's securities. When interest rates rise, the
value of fixed-income securities will generally fall. Conversely, a drop in
interest rates will generally cause an increase in the value of fixed-income
securities. Longer-term securities are subject to greater interest rate risk.


Investment-grade bonds are rated BBB (Standard & Poor's) or Baa (Moody's) or
above. Bonds rated below investment grade are subject to greater credit risk
than investment-grade bonds. Interest Rate, Market, Call and Credit Risks


Lending portfolio securities to qualified financial institutions is undertaken
in order to earn income. The Fund lends securities only on a fully
collateralized basis. The Fund may lend portfolio securities only up to 33 1/3%
of its total assets. Credit Risk

Leverage risk occurs in some securities or techniques that tend to magnify the
effect of small changes in an index or a market. This can result in a loss that
exceeds the amount that was invested in the contract.

Liquidity risk occurs when investments cannot be sold readily. The Fund may have
to accept a less-than-desirable price to complete the sale of an illiquid
security or may not be able to sell it at all.

Market capitalization is the total current market value of a company's
outstanding common stock.


Market risk exists in all mutual funds and means the risk that the prices of
securities in a market, a sector, or an industry will fluctuate and that such
movements might reduce an investment's value.


Opportunity risk means missing out on an investment opportunity because the
assets necessary to take advantage of it are committed to less advantageous
investments or strategies.

Options(2) are contracts giving the holder the right but not the obligation to
purchase or sell a security on or before a predetermined future date for a fixed
price. Options on securities indexes are similar, but settle in cash. Not more
than 5% of the Fund's net assets may be used for initial margins for futures and
premiums for options. Hedging, Credit, Correlation and Leverage Risks


Political risk comes into play with investments, particularly foreign
investments, that may be adversely affected by nationalization, taxation, war,
government instability or other economic or political actions or factors.


Prepayment risk is the risk that, as interest rates fall, borrowers are more
likely to refinance their debts. As a result, the principal on certain
fixed-income securities may be paid earlier than expected, which could cause
investment losses and cause prepaid amounts to have to be reinvested at a
relatively lower interest rate.



Berger Funds o January 29, 2001 Berger Information
Technology Fund -- Institutional Shares


<PAGE>   60
                                                                              11


BERGER INFORMATION
TECHNOLOGY FUND
--------------------------------------------------------------------------------


Sector focus(4) occurs when a significant portion of the Fund's assets are
invested in a relatively small number of related industries. The Fund will not
concentrate more than 25% of its total assets in any one industry. Sector focus
may increase both market and liquidity risk. Market and Liquidity Risks

Small and mid-sized company securities are securities issued by small or
mid-sized companies, as measured by their market capitalization. The market
capitalization range targeted by funds investing in small or mid-sized companies
varies by fund. In general, the smaller the company, the greater its risks.
Market, Liquidity and Information Risks


Special situations are companies about to undergo a structural, financial or
management change that may significantly affect the value of their securities.
Market and Information Risks

Transaction risk means that the Fund may be delayed or unable to settle a
transaction or that commissions and settlement expenses may be higher than
usual. In the case of foreign securities, use of a foreign securities depository
to maintain Fund assets may increase this risk. This risk may be minimized
through an analysis and continuous monitoring, by the Funds' primary custodian,
of the custodial risks of using the depository.


Writing (selling) covered call options(2) is the selling of a contract to
another party, which gives them the right but not the obligation to buy a
particular security from you. The Fund will write call options only if it
already owns the security (if it is "covered"). The Fund may only write call
options up to 25% of its total assets. Opportunity, Credit and Leverage Risks


1. The Fund has no minimum quality standards for convertible securities,
although it will not invest in defaulted securities. It also will not invest 20%
or more of its assets in convertible securities rated below investment grade or
in unrated convertible securities that the sub-advisor considers to be below
investment grade.

2. The Fund may use futures, forwards and options only for hedging. Not more
than 5% of the Fund's net assets may be used for initial margins for futures and
premiums for options, although the Fund may have more at risk under these
contracts than the initial margin or premium. However, the Fund's aggregate
obligations under these contracts may not exceed the total market value of the
assets being hedged, such as some or all of the value of the Fund's equity
securities.

3. IPOs constituted a significant portion of the Fund's performance during the
last fiscal year. However, there can be no assurance that IPOs will continue to
have such a significant impact, if the quality or number of available IPOs
diminishes or if the Fund grows in size and IPOs become an insignificant part of
the Fund's total portfolio.

4. The security or technique is emphasized by the Fund.



                              Berger Funds o January 29, 2001 Berger Information
                                         Technology Fund -- Institutional Shares


<PAGE>   61

12

BUYING SHARES
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
MINIMUMS
--------------------------------------------------------------------------------
<S>                                                                  <C>
Initial investment                                                      $250,000
Subsequent investments                                                No minimum
--------------------------------------------------------------------------------
</TABLE>


Send new account applications to

Berger Funds
P.O. BOX 219958
KANSAS CITY, MO 64121-9958

OR for overnight, certified or registered mail only

Berger Funds
330 West 9th Street, 1st Floor
Kansas City, MO 64105


BY MAIL

o    Read this prospectus.

o    Fill out the application if you are opening a new account.

o    Make out a check to Berger Funds for the amount you want to invest.

o    Send the application and check to the Berger Funds in the envelope
     provided.

o    To add to an existing account, be sure to include your account number on
     your check and mail it to the appropriate address above.


BY WIRE OR ELECTRONIC FUNDS TRANSFER

o    Payment may be made from your bank to the Berger Funds.

o    Call (800) 960-8427 for current wire or electronic funds transfer
     instructions.


BY TELEPHONE

o    If you already have a Berger Funds account, you may purchase additional
     shares by telephone order.

o    You must pay for them within three business days by wire, electronic funds
     transfer or overnight delivery of a check.

o    Call (800) 960-8427 for current wire or electronic funds transfer
     instructions.



Berger Funds o January 29, 2001 Berger Information Technology Fund --
Institutional Shares



<PAGE>   62

                                                                              13


BERGER INFORMATION
TECHNOLOGY FUND
--------------------------------------------------------------------------------


BY ONLINE ACCESS

o    If you have established a Berger Funds account with electronic funds
     transfer privileges, you may purchase additional shares via online access.

o    You will find us online at bergerfunds.com.


BY AUTOMATIC INVESTMENT PLAN

o    To automatically purchase more shares on a regular basis, fill out the
     Automatic Investment Plan section of the application.

o    Investments are transferred automatically from your bank account.

o    See details on the application.

     All shareholders are automatically granted telephone and online transaction
     privileges unless they decline them explicitly in writing, either on the
     account application or by writing to the Berger Funds at the address above.

     You may give up some level of security by choosing to buy and sell shares
     by telephone or online rather than by mail. In times of extreme economic or
     market conditions, transactions by telephone or online may be difficult.

IMPORTANT NOTES ABOUT PAYING FOR YOUR SHARES

o    Your check must be made payable to Berger Funds.

o    You may not purchase shares by cash, credit card, third-party checks or
     checks drawn on foreign banks.

o    Subject to approval by the Fund, you may purchase Fund shares with liquid
     securities that the Fund is eligible to purchase. These securities must
     have a value that can be readily determined in accordance with the Fund's
     valuation policies. You may pay for Fund shares with securities only if it
     is the investment manager's intention to retain them in the Fund's
     portfolio. The Fund may amend or terminate this practice at any time.


o    Orders not paid for on time will be canceled, and shares will be redeemed
     from your account to compensate for any decline in price of the shares
     canceled.

Berger Funds reserve the right to reject any order and to waive or reduce
minimums, or increase minimums following notice.




                              Berger Funds o January 29, 2001 Berger Information
                                         Technology Fund -- Institutional Shares


<PAGE>   63
14

SELLING (REDEEMING)
SHARES
--------------------------------------------------------------------------------

BY MAIL

o    Send a written request indicating your account number and the dollar amount
     or number of shares you are redeeming to the appropriate address shown
     under "Buying Shares."

o    Your request must be signed by each registered shareholder, with the
     signature(s) appearing exactly as they do on your account registration.

o    Include any necessary Signature Guarantees. See "Signature
     Guarantees/Special Documentation" below.

BY TELEPHONE

o    Call (800) 960-8427.

BY ONLINE ACCESS

o    You will find us online at bergerfunds.com.

     For limitations on telephone and online redemptions see "Signature
     Guarantees/Special Documentation" below.

     Telephone and online redemptions are not available for shares held in
     retirement accounts sponsored by the Fund.

BY SYSTEMATIC WITHDRAWAL PLAN

o    A systematic withdrawal plan may be established.

o    Shares may be redeemed automatically ($50 minimum) monthly, quarterly,
     semi-annually or annually.

o    Call (800) 960-8427 for more information and forms.

Important notes about payment for your redeemed shares

o    The Fund is intended as a long-term investment, and not as a short-term
     trading vehicle. Therefore, the Fund will deduct a 1% redemption fee from
     your redemption proceeds if you redeem Fund shares held less than 6 months.
     This fee is intended to discourage investors from short-term trading of
     Fund shares and to offset the cost to the Fund of excess brokerage and
     other costs incurred as a result of such trading. This fee will not be
     charged to retirement plan accounts or in the case of redemptions resulting
     from the death of the shareholder.

o    Generally, payment for your redeemed shares will be sent to you within
     three business days after receipt of your redemption request in good order.

o    You may receive payment for redeemed shares via wire or electronic funds
     transfer. You may elect these services on the account application or send
     to the Berger Funds a written request providing your bank information with
     your signature guaranteed. (See "Signature Guarantees/Special
     Documentation" below.)



Berger Funds o January 29,2001 Berger Information
Technology Fund -- Institutional Shares



<PAGE>   64

                                                                              15
BERGER INFORMATION TECHNOLOGY FUND


INFORMATION ABOUT YOUR
ACCOUNT
--------------------------------------------------------------------------------

o    A wire transfer will be sent the next business day after receipt of your
     order, and an electronic funds transfer will be sent the second business
     day after receipt of your order.

o    Proceeds from the redemption of shares purchased by check may be delayed
     until full payment for the shares has been received and cleared, which may
     take up to 15 days from the purchase date.

EXCHANGING SHARES

Shares of the Fund may be exchanged for shares of any other publicly available
Berger Funds by calling (800) 960-8427. When exchanging shares:

o    Each account must be registered identically--have the same signatures and
     addresses.

o    Each Fund must be legally eligible for sale in your state of residence.

o    You may exchange out of each of the Berger Funds up to four times per
     calendar year.

o    You may exchange by telephone, online access or mail.

o    You are responsible for obtaining and reading the prospectus for the Fund
     into which you are exchanging.

o    An exchange out of a Berger Fund results in the sale of that Fund's shares
     and the purchase of another, normally resulting in a taxable event for you.

o    Exchanges into any new Fund are subject to that Fund's initial and
     subsequent investment minimums.

o    The Fund will deduct a 1% redemption fee from the amount you exchange if
     you exchange Fund shares held less than 6 months. This fee is intended to
     discourage investors from short-term trading of Fund shares and to offset
     the cost to the Fund of excess brokerage and other costs incurred as a
     result of such trading. This fee will not be charged to retirement plan
     accounts.


The Fund may terminate or modify the exchange privilege in the future.



                               Berger Funds o January 29,2001 Berger Information
                                         Technology Fund -- Institutional Shares



<PAGE>   65

16

INFORMATION ABOUT YOUR
ACCOUNT (CONTINUED)
--------------------------------------------------------------------------------

Signature Guarantees/Special Documentation

The Fund uses Signature Guarantees to protect you and the Fund from possible
fraudulent requests for redeemed shares. Your redemption request must be in
writing and accompanied by a Signature Guarantee if:


o    Your request exceeds $100,000.


o    You request that payment be made to a name other than the one on your
     account registration.


o    You request that payment be mailed to an address that has been changed
     within 30 days of your redemption request or to an address other than the
     one of record.


o    You change or add information relating to your designated bank.


Berger Funds reserve the right to require Signature Guarantees under other
certain circumstances.


You can get a Signature Guarantee from most broker-dealers, national or state
banks, credit unions, federal savings and loan associations or other eligible
institutions. You cannot obtain a Signature Guarantee from a notary public.

Make sure the Signature Guarantee appears:

o    Together with the signature(s) of all registered owner(s) of the redeemed
     shares on the written redemption request.


o    On any share certificates you hold for the redeemed shares or on a separate
     statement of assignment (stock power) that may be obtained from a bank or
     broker.


Additional documents are required for redemptions by corporations, executors,
administrators, trustees and guardians. For instructions, call (800) 960-8427 or
write to the Berger Funds, P.O. Box 219958, Kansas City, MO 64121-9958 .

Your Share Price


The price at which you buy, sell or exchange Fund shares is the share price or
net asset value (NAV). The share price for the Institutional Shares of the Fund
is determined by adding the Institutional Shares' pro rata portion of the total
value of the Fund's investments, cash and other assets, deducting the
Institutional Shares' pro rata portion of the Fund's liabilities and the
liabilities attributable directly to the Institutional Shares and then dividing
that value by the total number of the Institutional Shares outstanding. Share
price is calculated separately for each class of Fund shares.

The Fund's share price is calculated at the close of the regular trading session
of the New York Stock Exchange (normally 4:00 p.m. Eastern time) each day that
the Exchange is open. Share price is not calculated on the days that the
Exchange is closed.





Berger Funds o January 29,2001 Berger Information
Technology Fund -- Institutional Shares



<PAGE>   66
                                                                              17

BERGER INFORMATION
TECHNOLOGY FUND


OTHER INFORMATION ABOUT
YOUR ACCOUNT
--------------------------------------------------------------------------------

For a purchase, redemption or exchange of Fund shares, your price is the share
price next calculated after your request is received in good order by the Fund,
its authorized agent or designee. To receive a specific day's price, your
request must be received before the close of the New York Stock Exchange on that
day.

When the Fund calculates its share price, it values the securities it holds at
market value. Sometimes market quotes for some securities are not available or
are not representative of market value. Examples would be when events occur that
materially affect the value of a security at a time when the security is not
trading or when the securities are illiquid. In that case, securities may be
valued in good faith at fair value, using consistently applied procedures
decided on by the trustees. Money market instruments maturing within 60 days are
valued at amortized cost, which approximates market value. Assets and
liabilities expressed in foreign currencies are converted into U.S. dollars at
the prevailing market rates quoted by one or more banks or dealers shortly
before the close of the Exchange.


The Fund's foreign securities may trade on days that the Exchange is closed and
the Fund's daily share price is not calculated. As a result, the Fund's daily
share price may be affected, and you will not be able to purchase or redeem
shares.


SECURITY CONSIDERATIONS

You may give up some level of security by choosing to buy or sell shares by
telephone or online, rather than by mail. The Fund uses procedures designed to
give reasonable assurance that telephone and online instructions are genuine,
including recording the transactions, testing the identity of the shareholder
placing the order and sending prompt written confirmation of transactions to the
shareholder of record.


The Fund and its service providers are not liable for acting upon instructions
communicated by telephone or online that they believe to be genuine if these
procedures are followed.


CONFIRMATION OF YOUR PURCHASES AND REDEMPTIONS

After any transaction, you will receive written confirmation including the share
price and the dollar amount and number of shares bought or redeemed. Exception:
Shares purchased under Automatic Investment Plans or redeemed under Systematic
Withdrawal Plans will be confirmed quarterly. Partial shares will be calculated
to three decimal places.

SHAREHOLDER REPORTS

To reduce expenses, the Fund may mail only one copy of most financial reports,
prospectuses and proxies to your household, even if you have more than one
account in the Fund. Call (800) 960-8427 if you need additional copies of
financial reports or prospectuses.




                              Berger Funds o January 29, 2001 Berger Information
                                         Technology Fund -- Institutional Shares



<PAGE>   67
18

OTHER INFORMATION ABOUT
YOUR ACCOUNT (CONTINUED)
--------------------------------------------------------------------------------

SHARE CERTIFICATES

To assist in minimizing administrative costs, share certificates will not be
issued. Records of share ownership are maintained by the Fund's transfer agent
in book entry form.

PURCHASES THROUGH BROKER-DEALERS


You may buy Fund shares through certain broker-dealers or other financial
organizations, but these organizations may charge you a fee or may have
different minimums for first-time or additional investments that are not
applicable if you buy shares directly from the Fund.

THIRD-PARTY ADMINISTRATORS


Certain brokerage firms and other companies may provide administrative services
(such as sub-transfer agency, recordkeeping or shareholder communications
services) to investors purchasing shares of the Fund through those companies.
The Fund's advisor or the Fund (if approved by its trustees) may pay fees to
these companies for their services. These companies may also be appointed as
agents for or authorized by the Fund to accept on its behalf purchase and
redemption requests that are received in good order. Subject to Fund approval,
certain of these companies may be authorized to designate other entities to
accept purchase and redemption orders on behalf of the Fund.

DATE-RELATED INFORMATION

Mutual funds and businesses around the world could be adversely affected if
computers do not properly process date-related information. The Fund's advisor
is addressing these issues for its computers and is getting reasonable
assurances from the Fund's other major service providers that they too are
addressing these issues to preserve smooth functioning of the Fund's trading,
pricing, shareholder account, custodial and other operations. There can be no
assurances, however, that all problems will be avoided.

These computer problems could also adversely affect the Fund's investments.
Improperly functioning computers may disrupt securities markets generally or
result in overall economic uncertainty. Individual companies may also be
adversely affected by the cost of fixing their computers, which could be
substantial. The Fund's investment manager considers these issues when
evaluating investments for the Fund.

REDEMPTIONS IN-KIND

The Fund intends to redeem its shares only for cash, although in order to
protect the interest of remaining shareholders, it retains the right to redeem
its shares in-kind under unusual circumstances. In-kind payment means payment
will be made to you in portfolio securities rather than cash. If this occurs,
you will incur transaction costs if you sell the securities for cash. You may
have difficulty selling the securities and recovering the amount of your
redemption if the securities are illiquid.




Berger Funds o January 29, 2001 Berger Information
Technology Fund -- Institutional Shares



<PAGE>   68
                                                                              19


BERGER INFORMATION
TECHNOLOGY FUND
--------------------------------------------------------------------------------


REDEMPTIONS BY THE FUND OF CERTAIN ACCOUNTS

To reduce its expenses, the Fund may involuntarily redeem the shares in your
account if your balance drops below $250,000--but only if it drops below this
amount because you have redeemed shares, not because the share value has
declined. You will be given 60 days' notice before the Fund undertakes any
involuntary redemption. During that time, you may buy more shares to bring your
account above the minimum.

Holders of Institutional Shares who received their shares in the Fund's
reorganization in July 1999, will not be subject to this minimum account balance
requirement in their existing accounts, but instead will be subject to the
regular Berger Funds retail minimum account balance requirement of $2,000.


The Fund also reserves the right to close any account if it believes the
shareholder is engaging in activities which may be detrimental to the Fund.


DISTRIBUTION AND TAXES

DISTRIBUTIONS OF INCOME AND GAINS


Unless you tell us that you want to receive your distributions in cash, they
will be reinvested automatically in Fund shares. The Fund generally makes two
kinds of distributions:

o    Capital gains from the sale of portfolio securities held by the Fund. The
     Fund will distribute any net realized capital gains annually, normally in
     December.

o    Net investment income from interest or dividends received on securities
     held by the Fund. The Fund will distribute its investment income annually,
     normally in December.

The Fund reserves the right to reinvest into your account undeliverable or
uncashed dividend or distribution checks that remain outstanding for six months.
The dividend or distribution amount will be reinvested in shares of the
applicable Fund at the NAV next computed after the check is cancelled.


YOUR TAXES

You generally will owe tax on amounts distributed to you by the Fund in any
non-retirement account whether you reinvest them in additional shares or receive
them in cash. Distributions of gains from the sale of assets held by the Fund
for more than one year generally are taxable to you at the applicable long-term
capital gains rate, regardless of how long you have owned your Fund shares.
Distributions from other sources generally are taxed as ordinary income.

Distributions made by the Fund to you will normally be capital gains. A portion
of those gains may be net short-term capital gains, which are taxed as ordinary
income. The Fund generally will not distribute net investment income, although
any net investment income that is generated as a by-product of managing its
portfolio will be distributed to you.



                              Berger Funds o January 29, 2001 Berger Information
                                         Technology Fund -- Institutional Shares



<PAGE>   69
20

OTHER INFORMATION ABOUT
YOUR ACCOUNT (CONTINUED)
--------------------------------------------------------------------------------

If you redeem Fund shares that have appreciated in value, you will have a
taxable gain upon redemption. Exchanges are treated as a redemption and purchase
for tax purposes. Therefore, you will also have a taxable gain if you exchange
shares that have appreciated in value.

ADDITIONAL TAX INFORMATION

You should consult your own tax advisor about your particular situation. For
more information about other tax matters, including backup withholding for
certain taxpayers and other tax aspects of redemptions, see the SAI.

TAX-SHELTERED RETIREMENT PLANS


The Fund offers several tax-qualified retirement plans for individuals,
businesses and nonprofit organizations. For information about establishing an
IRA, Roth IRA, profit-sharing or money purchase pension plan, 403(b) Custodial
Account, SEP-IRA, SIMPLE IRA account or other retirement plans, please call
(800) 259-2820, or write to the Berger Funds, P.O. Box 219958, Kansas City, MO
64121-9958. Trustees for existing 401(k) or other plans interested in using Fund
shares as an investment or investment alternative in their plans are invited to
call the Fund at (800) 259-2820.




Berger Funds o January 29, 2001 Berger Information
Technology Fund -- Institutional Shares



<PAGE>   70

                                                                              21

BERGER INFORMATION
TECHNOLOGY FUND


ORGANIZATION OF THE FUND
--------------------------------------------------------------------------------

INVESTMENT MANAGERS


The following companies provide investment management and administrative
services to the Fund.

Berger LLC (210 University Blvd., Suite 900, Denver, CO 80206) is the Fund's
investment advisor. Berger LLC serves as investment advisor, sub-advisor or
administrator to mutual funds and institutional investors. Berger LLC has been
in the investment advisory business for 26 years. As investment advisor, Berger
LLC overseas, evaluates and monitors the investment advisory services provided
by PWM as sub-advisor. For the most recent fiscal year, the Fund paid Berger LLC
and advisory fee of 0.85% of net assets. Berger LLC also provides administrative
services to the Fund.


Bay Isle Financial Corporation (160 Sansome Street, 17th Floor, San Francisco,
CA 94104) is the Fund's sub-advisor. Bay Isle has been in the investment
advisory business since 1987. Bay Isle served as investment advisor to the Fund
(then known as the InformationTech 100(R) Fund) from its inception in April 1997
until July 1999, when Bay Isle became sub-advisor to the Fund. As sub-advisor,
Bay Isle provides day-to-day management of the Fund's investment operations.
William F. K. Schaff has been the investment manager for the Fund since its
inception. Mr. Schaff is a co-founder and co-owner of Bay Isle and serves as its
Chief Investment Officer. Mr. Schaff has been managing accounts of Bay Isle
clients since 1987.

PORTFOLIO TURNOVER

Portfolio changes are made whenever the Fund's investment manager believes that
the Fund's goal could be better achieved by investment in another security,
regardless of portfolio turnover. At times, portfolio turnover for the Fund may
exceed 100% per year. A turnover rate of 100% means the securities owned by the
Fund were replaced once during the year. Higher turnover rates may result in
higher brokerage costs to the Fund and in higher net taxable gains for you as an
investor. The Fund's portfolio turnover rate can be found under the heading
"Financial Highlights for the Fund."

SPECIAL FUND STRUCTURE

On July 2, 1999, the Fund began offering two classes of shares. The
Institutional Shares offered in this prospectus are designed for investors who
maintain a minimum account balance of $250,000. Institutional Shares are also
made available for purchase and dividend reinvestment to all holders of
Institutional Shares who received their shares in the Fund's reorganization on
July 2, 1999. The other class of shares, Investor Shares, are offered through a
separate prospectus and are available to the general public with a minimum
account balance of $2,000. Each class of shares has its own expenses so that
share price, performance and distributions will differ between classes. The
12b-1 plan adopted by the Fund applies only to the Investor Shares. For more
information on Investor Shares, please call (800) 333-1001.

For more information on the multi-class fund structure, see the SAI.



                              Berger Funds o January 29, 2001 Berger Information
                                         Technology Fund -- Institutional Shares


<PAGE>   71

22

FINANCIAL HIGHLIGHTS
FOR THE FUND
--------------------------------------------------------------------------------


These financial highlights are intended to help you understand the Fund's
financial performance for the periods shown. Certain information reflects
financial results for a single Fund share. Total return shows you how much an
investment in the Fund increased or decreased during each period, assuming you
reinvested all dividends and distributions. PricewaterhouseCoopers, LLP,
independent accountants, audited the information for the period ended September
30, 1999. Their report appears in the 1999 Annual Report to Shareholders of the
Fund and is incorporated by reference into (made a part of) the Statement of
Additional Information. That Annual Report is available from the Fund without
charge upon request. Information for the periods ended February 28, 1999 and
1998, was audited by other independent accountants.


Berger Information Technology Fund ~ Institutional Shares
Financial Highlights
For a Share Outstanding Throughout the Period


<TABLE>
<CAPTION>
                                                                  Period from                        Period from
                                                  Year Ended     March 1, 1999       Year Ended     April 8, 1997(1)
                                                 September 30,  to September 30,     February 28,   to February 28,
                                                     2000            1999               1999            1998
-------------------------------------------------------------------------------------------------------------------
<S>                                              <C>           <C>                <C>              <C>
Net asset value, beginning of period                           $      44.36       $      30.15     $      20.00
-------------------------------------------------------------------------------------------------------------------
From investment operations:
  Net investment income (loss)                                        (0.00)(5)          (0.31)           (0.10)
  Net realized and unrealized gains (losses) from
   investments and foreign currency transactions                      13.83              14.52            10.25
-------------------------------------------------------------------------------------------------------------------
Total from investment operations                                      13.83              14.21            10.15
-------------------------------------------------------------------------------------------------------------------
Less dividends and distribution (from capital gains)                  (0.72)                --               --
-------------------------------------------------------------------------------------------------------------------
Total dividends and distributions                                     (0.72)                --               --
-------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                                 $      57.47       $      44.36     $      30.15
-------------------------------------------------------------------------------------------------------------------
Total Return(2)                                                       31.30%             47.13%           50.75%
-------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands)                       $     20,094       $     12,446     $      2,674
Net expense ratio to average net assets(3)                             1.49%(4)           1.50%            1.50%(4)
Ratio of net income (loss) to  average net assets                     (1.22)%(4)         (1.19)%          (1.01)%(4)
Gross expense ratio to average net assets                              1.94%              2.67%           12.17%(4)
Portfolio turnover rate                                                  31%                35%              33%
</TABLE>


1.   Commencement of operations for Institutional Shares.
2.   Not annualized.
3.   Net expenses represent gross expenses reduced by fees waived and/or
     reimbursed by the Advisor.
4.   Annualized.
5.   Amount represents less than $0.01 per share.



Berger Funds o January 29, 2001 Berger Information
Technology Fund -- Institutional Shares


<PAGE>   72




                       This page intentionally left blank


<PAGE>   73

FOR MORE INFORMATION:

Additional information about the Funds' investments is available in the Fund's
semi-annual and annual reports to shareholders. The Fund's annual report
contains a discussion of the market conditions and investment strategies that
affected the Fund's performance over the past year.

You may wish to read the Statement of Additional Information (SAI) for more
information on the Fund and the securities it invests in. The SAI is
incorporated into this prospectus by reference, which means that it is
considered to be part of the prospectus.

You can get free copies of the annual and semi-annual reports and the SAI,
request other information or get answers to your questions about the Fund by
writing or calling the Fund at:

Berger Funds
P.O. Box 219958
Kansas City, MO 64121-9958
(800) 259-2820
bergerfunds.com

Text-only versions of Fund documents can be viewed online or downloaded from the
EDGAR database on the SEC's Web site at sec.gov.


You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, D.C. For information on the operation of the Public Reference Room,
call (202) 942-8090. Copies of documents may also be obtained, after paying a
duplicating fee, by sending your request to the following e-mail address:
[email protected], or by writing to the SEC's Public Reference Section,
Washington, D.C. 20549-6009.


INVESTMENT COMPANY ACT FILE NUMBER:

Berger Investment Portfolio Trust 811-8046

(Berger Information Technology Fund -- Institutional Shares)           TECHIPROS
<PAGE>   74
                         Berger New

                         Generation Fund --

                         Institutional Shares

                         Prospectus

                         January 29, 2001

                         [BERGER FUNDS LOGO]




The Securities and Exchange Commission has not approved or disapproved any
shares offered in this prospectus or determined whether this prospectus is
accurate or complete. Anyone who tells you otherwise is committing a crime. Like
all mutual funds, an investment in the Fund is not a bank deposit and is not
insured or guaranteed by the FDIC or any other government agency. There is no
guarantee that the Fund will meet its investment goal, and although you have the
potential to make money, you could also lose money in the Fund.


<PAGE>   75




BERGER FUNDS, and BERGER NEW GENERATION FUND are registered service marks of
Berger LLC; The BERGER MOUNTAIN LOGO is a registered trademark of Berger LLC;
other marks referred to herein are the trademarks, service marks registered
trademarks or registered service marks of the respective owners thereof.


<PAGE>   76

                                                                               3

CONTENTS
--------------------------------------------------------------------------------


BERGER FUNDS(R) are a no-load family of mutual funds. A mutual fund pools money
from shareholders and invests in a portfolio of securities. This prospectus
offers the class of shares designated as Institutional Shares of the Berger New
Generation Fund. These shares are designed for pension and profit-sharing plans,
employee benefit trusts, endowments, foundations and corporations, as well as
high net worth individuals and financial intermediaries, who are willing to
maintain a minimum account balance of $250,000.


<TABLE>
<S>                                                                             <C>
BERGER NEW GENERATION FUND(R) - INSTITUTIONAL SHARES .........................  4

The Fund's Goal and Principal Investment Strategies ..........................  4

Principal Risks ..............................................................  4

The Fund's Past Performance ..................................................  5

Fund Expenses ................................................................  6

INVESTMENT TECHNIQUES, SECURITIES AND ASSOCIATED RISKS .......................  7

Risk and Investment Glossary .................................................  7

BUYING SHARES ................................................................ 11

SELLING (REDEEMING) SHARES ................................................... 13

INFORMATION ABOUT YOUR ACCOUNT ............................................... 14

Exchanging Shares ............................................................ 14

Signature Guarantees/Special Documentation ................................... 14

Your Share Price ............................................................. 15

OTHER INFORMATION ABOUT YOUR ACCOUNT ......................................... 16

Distributions and Taxes ...................................................... 18

Tax-Sheltered Retirement Plans ............................................... 19

ORGANIZATION OF THE FUND ..................................................... 20

Investment Manager ........................................................... 20

Special Fund Structure ....................................................... 20

FINANCIAL HIGHLIGHTS FOR THE FUND ............................................ 21
</TABLE>



                   Berger Funds o January 29, 2001 Berger New Generation Fund --
                                                            Institutional Shares


<PAGE>   77


4


BERGER NEW GENERATION FUND -- INSTITUTIONAL SHARES  Ticker Symbol  NOT AVAILABLE
--------------------------------------------------------------------------------

THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES

The Fund aims for capital appreciation. In pursuing that goal, the Fund
primarily invests in the common stocks of companies with potential for
significant earnings growth.

The Fund focuses on leading-edge companies with new ideas, technologies or
methods of doing business. Its investment manager seeks companies it believes
have the potential to change the direction or dynamics of the industries in
which they operate or significantly influence the way businesses or consumers
conduct their affairs.

The Fund's investment manager generally looks for companies:

o    In business sectors characterized by rapid change, regardless of the
     company's size


o    With favorable long-term growth potential because of their new or
     innovative products or services


o    With management and financial strength to fulfill their vision and grow
     their business.

The Fund invests in common stocks, both domestic and foreign, and other
securities with equity features, such as convertible securities and preferred
stocks. Due to the Fund's focus on companies with the characteristics described
above, the Fund generally is weighted toward small market capitalization
companies, although it is free to invest in companies with larger market
capitalizations as well. The Fund's investment manager will generally sell a
security when it no longer meets the manager's investment criteria or when it
has met the manager's expectations for appreciation. The Fund's investment
manager may actively trade the portfolio in pursuit of the Fund's goal.

PRINCIPAL RISKS


You may be interested in the Fund if you are comfortable with above-average risk
and intend to make a long-term investment commitment. Like all managed funds,
there is a risk that the investment manager's strategy for managing the Fund may
not achieve the desired results. In addition, the price of common stock moves up
and down in response to corporate earnings and developments, economic and market
conditions and unanticipated events. As a result, the price of the Fund's
investments may go down and you could lose money on your investment.



Given the Fund's weighting toward small companies in rapidly changing
industries, its share price may fluctuate more than that of funds invested in
larger companies or more stable industries. Small companies may pose greater
market, liquidity and information risks because of narrow product lines, limited
financial resources, less depth in management or a limited trading market for
their stocks. In addition, products and services in rapidly changing industries
may be subject to intense competition and rapid obsolescence and may require
regulatory approvals prior to their use. The Funds investments




Berger Funds o January 29, 2001 Berger New Generation Fund --
Institutional Shares


<PAGE>   78

                                                                               5

BERGER NEW GENERATION FUND
--------------------------------------------------------------------------------



are often focused in a small number of business sectors, which may pose greater
market and liquidity risks. In addition, the Fund's active trading will cause
the Fund to have an increased portfolio turnover rate. Higher turnover rates may
result in higher brokerage costs to the Fund and in higher net taxable gains for
you as an investor.


See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.

The Fund's Past Performance


The information below shows the Fund's performance since it began operations
through December 31, 2000. These returns include reinvestment of all dividends
and capital gains distributions and reflect Fund expenses. As with all mutual
funds, past performance does not guarantee future results.


Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year since the Fund began.



                 YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31(1)

                                    [CHART]


<TABLE>
<S>                                            <C>

                              1997                24.22%
                              1998                23.00%
                              1999               142.38%
                              2000                     %
</TABLE>



                                BEST QUARTER: %

                                WORST QUARTER: %



Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Standard & Poor's 500
Index (S&P 500). While the Fund does not seek to match the returns of the S&P
500, this index is a good indicator of general stock market performance. You may
not invest in the S&P 500, and unlike the Fund, it does not incur fees or
charges.

AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2000(1)



<TABLE>
<CAPTION>

                                                  Life of the Fund
                                  1 Year          (March 29, 1996)
--------------------------------------------------------------------------------
<S>                             <C>              <C>
The Fund                             %                      %
S&P 500                              %                      %
--------------------------------------------------------------------------------
</TABLE>


1. Fund returns include periods prior to the Fund's adoption of share classes
and therefore reflect a 0.25% 12b-1 fee which has not been paid by the
Institutional Shares since the inception of that class on August 16, 1999.


                   Berger Funds o January 29, 2001 Berger New Generation Fund --
                                                            Institutional Shares



<PAGE>   79

6


BERGER NEW
GENERATION FUND --
INSTITUTIONAL SHARES
--------------------------------------------------------------------------------

FUND EXPENSES


As a shareholder in the Fund, you do not pay any sales loads, but you do
indirectly bear Annual Fund Operating Expenses, which vary from year to year.



<TABLE>
<CAPTION>

ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)
--------------------------------------------------------------------------------
<S>                                                                        <C>
Management fee                                                               .83
Other expenses                                                               .74
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses(1)                                     1.57
Expense Reimbursement(1)                                                    (.40)
--------------------------------------------------------------------------------
Net Expenses                                                                1.17
--------------------------------------------------------------------------------
</TABLE>



1. Pursuant to a written agreement, the Fund's investment adviser reimburses the
Fund's Institutional Shares class to the extent the normal transfer agency and
registration expenses of the Institutional Shares exceed .20%.


UNDERSTANDING EXPENSES

Annual Fund operating expenses are paid by the Fund. As a result, they reduce
the Fund's return. Fund expenses include management fees and administrative
costs such as shareholder recordkeeping and reports, custodian and pricing
services and registration fees.

Example Costs


The following example helps you compare the cost of investing in the Fund with
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses:


o    $10,000 initial investment

o    5% total return for each year

o    Fund operating expenses remain the same for each period

o    Redemption after the end of each period

Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:

BERGER NEW GENERATION -- INSTITUTIONAL SHARES


<TABLE>
<CAPTION>
Years
--------------------------------------------------------------------------------
<S>                                                                          <C>
One
Three
Five
Ten
--------------------------------------------------------------------------------
</TABLE>




Berger Funds o January 29, 2001 Berger New Generation Fund --
Institutional Shares


<PAGE>   80

                                                                               7


BERGER NEW GENERATION FUND


INVESTMENT TECHNIQUES,
SECURITIES AND ASSOCIATED
RISKS
--------------------------------------------------------------------------------

BEFORE YOU INVEST...


in the Fund, make sure you understand the risks involved. All investments
involve risk. Generally, the greater the risk, the greater the potential for
return. The reverse is also generally true-the lower the risk, the lower the
potential for return.


Like all mutual funds, an investment in the Fund is not a bank deposit and is
not insured or guaranteed by the FDIC or any other government agency. The Fund
is not a complete investment program, but may serve to diversify other types of
investments in your portfolio. There is no guarantee that the Fund will meet its
investment goal, and although you have the potential to make money, you could
also lose money by investing in the Fund.

The following glossary will help you further understand the risks the Fund takes
by investing in certain securities and the investment techniques used by the
Fund. You may get more detailed information about the risks of investing in the
Fund in the Statement of Additional Information (SAI), including a discussion of
debt security ratings in Appendix A to the SAI.

RISK AND INVESTMENT GLOSSARY

Borrowing refers to a loan of money from a bank or other financial institution
undertaken by the Fund for temporary or emergency reasons only. The Fund will
not borrow more than 25% of its total assets. Leverage Risk


Call risk is the possibility that an issuer may redeem or "call" a fixed-income
security before maturity at a price below its current market price. An increase
in the likelihood of a call may reduce the security's price.


Common stock is a share of ownership (equity) interest in a company.

Companies with limited operating histories are securities issued by companies
that have been in continuous operation for less than three years. Sometimes
called "unseasoned" issuers. Market, Liquidity and Information Risks


Convertible securities are debt or equity securities that may be converted on
specified terms into stock of the issuer. Market, Interest Rate, Prepayment and
Credit Risks



Correlation risk occurs when the Fund "hedges"--uses one investment to offset
the Fund's position in another. If the two investments do not behave in relation
to one another the way Fund managers expect them to, then unexpected results may
occur.

Credit risk means that the issuer of a security or the counterparty to an
investment contract may default or become unable to pay its obligations when
due.


Currency risk happens when the Fund buys or sells a security denominated in
foreign currency. Foreign currencies "float" in value against the U.S. dollar.
Adverse changes in foreign currency values can cause investment losses when the
Fund's investments are converted to U.S. dollars.



                   Berger Funds o January 29, 2001 Berger New Generation Fund --
                                                            Institutional Shares



<PAGE>   81

8


INVESTMENT TECHNIQUES
SECURITIES AND ASSOCIATED
RISKS (CONTINUED)
--------------------------------------------------------------------------------


Diversification means a diversified fund may not, with respect to at least 75%
of its assets, invest more than 5% in the securities of one company. A
nondiversified fund may be more volatile than a diversified fund because it
invests more of its assets in a smaller number of companies and the gains or
losses on a single stock will therefore have a greater impact on the fund's
share price. The Fund is a diversified fund.

Financial futures(2) are exchange-traded contracts on securities, securities
indexes or foreign currencies that obligate the holder to take or make future
delivery of a specified quantity of those underlying securities or currencies on
a predetermined future date at a predetermined price. Not more than 5% of the
Fund's net assets may be used for initial margins for futures and premiums for
options. Hedging, Correlation, Opportunity and Leverage Risks

Foreign securities are issued by companies located outside of the United States.
The Fund considers a company to be located outside the United States if the
principal securities trading market for its equity securities is located outside
the U.S. or it is organized under the laws of, and has a principal office in, a
country other than the U.S. Market, Currency, Transaction, Liquidity,
Information and Political Risks

Forward foreign currency contracts(2) are privately negotiated contracts
committing the holder to purchase or sell a specified quantity of a foreign
currency on a predetermined future date at a predetermined price. Hedging,
Credit, Correlation, Opportunity and Leverage Risks

Hedging risk comes into play when the Fund uses a security whose value is based
on an underlying security or index to "offset" the Fund's position in another
security or currency. The objective of hedging is to offset potential losses in
one security with gains in the hedge. But a hedge can eliminate or reduce gains
as well as offset losses. (Also see "Correlation risk.")


Illiquid and restricted securities are securities that, by rules of their issue
or by their nature, cannot be sold readily. These do not include liquid Rule
144A securities. The Fund will not invest more than 15% of its net assets in
illiquid securities, including restricted securities not deemed to be liquid.
Market, Liquidity and Transaction Risks


Information risk means that information about a security or issuer might not be
available, complete, accurate or comparable.


Initial public offering (IPO)(4) is the sale of a company's securities to the
public for the first time. IPO companies can be small and have limited operating
histories. The price of IPO securities can be highly unstable because of
prevailing market psychology and the small number of shares available. In
addition, the quality and number of IPOs available for purchase may diminish in
the future, and their contribution to Fund performance may be less significant
as the Fund grows in size. Market, Liquidity and Information Risks




Berger Funds o January 29, 2001 Berger New Generation Fund --
Institutional Shares


<PAGE>   82

                                                                               9


BERGER NEW GENERATION FUND
--------------------------------------------------------------------------------


Interest rate risk is the risk that changes in interest rates will adversely
affect the value of an investor's securities. When interest rates rise, the
value of fixed-income securities will generally fall. Conversely, a drop in
interest rates will generally cause an increase in the value of fixed-income
securities. Longer-term securities are subject to greater interest rate risk.


Investment-grade bonds are rated BBB (Standard & Poor's) or Baa (Moody's) or
above. Bonds rated below investment grade are subject to greater credit risk
than investment-grade bonds. Interest Rate, Market, Call and Credit Risks


Lending portfolio securities to qualified financial institutions is undertaken
in order to earn income. The Fund lends securities only on a fully
collateralized basis. The Fund may lend portfolio securities only up to 33 1/3%
of its total assets. Credit Risk

Leverage risk occurs in some securities or techniques that tend to magnify the
effect of small changes in an index or a market. This can result in a loss that
exceeds the amount that was invested in the contract.

Liquidity risk occurs when investments cannot be sold readily. The Fund may have
to accept a less-than-desirable price to complete the sale of an illiquid
security or may not be able to sell it at all.

Market capitalization is the total current market value of a company's
outstanding common stock.


Market risk exists in all mutual funds and means the risk that the prices of
securities in a market, a sector, or an industry will fluctuate and that such
movements might reduce an investment's value.


Opportunity risk means missing out on an investment opportunity because the
assets necessary to take advantage of it are committed to less advantageous
investments or strategies.

Options(2) are contracts giving the holder the right but not the obligation to
purchase or sell a security on or before a predetermined future date for a fixed
price. Options on securities indexes are similar, but settle in cash. Not more
than 5% of the Fund's net assets may be used for initial margins for futures and
premiums for options. Hedging, Credit, Correlation, and Leverage Risks


Political risk comes into play with investments, particularly foreign
investments, that may be adversely affected by nationalization, taxation, war,
government instability or other economic or political actions or factors.


Prepayment risk is the risk that, as interest rates fall, borrowers are more
likely to refinance their debts. As a result, the principal on certain
fixed-income securities may be paid earlier than expected, which could cause
investment losses and cause prepaid amounts to have to be reinvested at a
relatively lower interest rate.



                   Berger Funds o January 29, 2001 Berger New Generation Fund --
                                                            Institutional Shares


<PAGE>   83

10


INVESTMENT TECHNIQUES
SECURITIES AND ASSOCIATED
RISKS (CONTINUED)
--------------------------------------------------------------------------------



Sector focus(3) occurs when a significant portion of the Fund's assets are
invested in a relatively small number of related industries. The Fund will not
concentrate more than 25% of its total assets in any one industry. Sector focus
may increase both market and liquidity risk. Market and Liquidity Risks

Small and mid-sized company securities(3) are securities issued by small or
mid-sized companies, as measured by their market capitalization. The market
capitalization range targeted by funds investing in small or mid-sized companies
varies by fund. In general, the smaller the company, the greater its risks.
Market, Liquidity and Information Risks


Special situations are companies about to undergo a structural, financial or
management change that may significantly affect the value of their securities.
Market and Information Risks



Temporary defensive measures increase a fund's investment in government
securities and other short-term securities when warranted because of market
conditions, without regard to the fund's investment restrictions, policies or
normal investment emphasis. Opportunity Risk



Transaction risk means that the Fund may be delayed or unable to settle a
transaction or that commissions and settlement expenses may be higher than
usual. In the case of foreign securities, use of a foreign securities depository
to maintain Fund assets may increase this risk. This risk may be minimized
through an analysis and continuous monitoring, by the Funds' primary custodian,
of the custodial risks of using the depository.



Writing (selling) covered call options(2) is the selling of a contract to
another party, which gives them the right but not the obligation to buy a
particular security from you. The Fund will write call options only if it
already owns the security (if it is "covered"). The Fund may only write call
options up to 25% of its total assets. Opportunity, Credit and Leverage Risks



1. The Fund has no minimum quality standards for convertible securities,
although it will not invest in defaulted securities. It also will not invest 20%
or more of its assets in convertible securities rated below investment grade or
in unrated convertible securities that the sub-advisor considers to be below
investment grade.

2. The Fund may use futures, forwards and options only for hedging. Not more
than 5% of the Fund's net assets may be used for initial margins for futures and
premiums for options, although the Fund may have more at risk under these
contracts than the initial margin or premium. However, the Fund's aggregate
obligations under these contracts may not exceed the total market value of the
assets being hedged, such as some or all of the value of the Fund's equity
securities.

3. The security or technique is emphasized by the Fund.


4. IPOs constituted a significant portion of the Fund's performance during the
last fiscal year. However, there can be no assurance that IPOs will continue to
have such a significant impact if the quality of number of available IPOs
diminishes or if the Fund grows in size and IPOs become an insignificant part of
the Fund's total portfolio.




Berger Funds o January 29, 2001 Berger New Generation Fund --
Institutional Shares


<PAGE>   84

                                                                              11


BERGER NEW GENERATION FUND


BUYING SHARES
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

Minimums
--------------------------------------------------------------------------------
<S>                                                                  <C>
Initial investment                                                      $250,000
Subsequent investments                                                No minimum
--------------------------------------------------------------------------------
</TABLE>

Send new account applications to

Berger Funds
P.O. Box 219958
Kansas City, MO 64121-9958

OR for overnight, certified or registered mail only

Berger Funds
330 West 9th Street, 1st Floor
Kansas City, MO 64105

BY MAIL

o    Read this prospectus.

o    Fill out the application if you are opening a new account.

o    Make out a check to Berger Funds for the amount you want to invest.

o    Send the application and check to the Berger Funds in the envelope
     provided.

o    To add to an existing account, be sure to include your account number on
     your check and mail it to the appropriate address above.

BY WIRE OR ELECTRONIC FUNDS TRANSFER

o    Payment may be made from your bank to the Berger Funds.

o    Call (800) 960-8427 for current wire or electronic funds transfer
     instructions.

BY TELEPHONE

o    If you already have a Berger Funds account, you may purchase additional
     shares by telephone order.

o    You must pay for them within three business days by wire, electronic funds
     transfer or overnight delivery of a check.

o    Call (800) 960-8427 for current wire or electronic funds transfer
     instructions.



                   Berger Funds o January 29, 2001 Berger New Generation Fund --
                                                            Institutional Shares



<PAGE>   85

12


BUYING SHARES
(CONTINUED)
--------------------------------------------------------------------------------


BY ONLINE ACCESS

o    If you have established a Berger Funds account with electronic funds
     transfer privileges, you may purchase additional shares via online access.

o    You will find us online at bergerfunds.com.

BY AUTOMATIC INVESTMENT PLAN

o    To automatically purchase more shares on a regular basis, fill out the
     Automatic Investment Plan section of the application.

o    Investments are transferred automatically from your bank account.

o    See details on the application.

     All shareholders are automatically granted telephone and online transaction
     privileges unless they decline them explicitly in writing, either on the
     account application or by writing to the Berger Funds at the address above.

     You may give up some level of security by choosing to buy and sell shares
     by telephone or online rather than by mail. In times of extreme economic or
     market conditions, transactions by telephone or online may be difficult.

o    Your check must be made payable to Berger Funds.

o    You may not purchase shares by cash, credit card, third-party checks or
     checks drawn on foreign banks.

o    Subject to approval by the Fund, you may purchase Fund shares with liquid
     securities that the Fund is eligible to purchase. These securities must
     have a value that can be readily determined in accordance with the Fund's
     valuation policies. You may pay for Fund shares with securities only if it
     is the investment manager's intention to retain them in the Fund's
     portfolio. The Fund may amend or terminate this practice at any time.


o    Orders not paid for on time will be canceled, and shares will be redeemed
     from your account to compensate for any decline in price of the shares
     canceled.



Berger Funds reserve the right to reject any order and to waive or reduce
minimums, or increase minimums following notice.



Berger Funds o January 29, 2001 Berger New Generation Fund --
Institutional Shares


<PAGE>   86

                                                                              13


BERGER NEW GENERATION FUND

SELLING (REDEEMING)
SHARES
--------------------------------------------------------------------------------


BY MAIL

o    Send a written request indicating your account number and the dollar amount
     or number of shares you are redeeming to the appropriate address shown
     under "Buying Shares."

o    Your request must be signed by each registered shareholder, with the
     signature(s) appearing exactly as they do on your account registration.

o    Include any necessary Signature Guarantees. See "Signature
     Guarantees/Special Documentation" below.

BY TELEPHONE

o    Call (800) 960-8427.

BY ONLINE ACCESS

o    You will find us online at bergerfunds.com.

     For limitations on telephone and online redemptions see "Signature
     Guarantees/Special Documentation" below.

     Telephone and online redemptions are not available for shares held in
     retirement accounts sponsored by the Fund.

BY SYSTEMATIC WITHDRAWAL PLAN

o    A systematic withdrawal plan may be established.

o    Shares may be redeemed automatically ($50 minimum) monthly, quarterly,
     semi-annually or annually.

o    Call (800) 960-8427 for more information and forms.

Important notes about payment for your redeemed shares

o    Generally, payment for your redeemed shares will be sent to you within
     three business days After Receipt of Your Redemption Request in Good Order.

o    You may receive payment for redeemed shares via wire or electronic funds
     transfer. You may elect these services on the account application or send
     to the Berger Funds a written request providing your bank information with
     your signature guaranteed. (See "Signature Guarantees/Special
     Documentation" below.)

o    A wire transfer will be sent the next business day after receipt of your
     order, and an electronic funds transfer will be sent the second business
     day after receipt of your order.

o    Proceeds from the redemption of shares purchased by check may be delayed
     until full payment for the shares has been received and cleared, which may
     take up to 15 days from the purchase date.


                   Berger Funds o January 29, 2001 Berger New Generation Fund --
                                                            Institutional Shares



<PAGE>   87

14

INFORMATION ABOUT YOUR
ACCOUNT
--------------------------------------------------------------------------------

EXCHANGING SHARES

Shares of the Fund may be exchanged for shares of any other publicly available
Berger Funds by calling (800) 960-8427. When exchanging shares:

o    Each account must be registered identically--have the same signatures and
     addresses.

o    Each Fund must be legally eligible for sale in your state of residence.

o    You may exchange out of each of the Berger Funds up to four times per
     calendar year.

o    You may exchange by telephone, online access or mail.

o    You are responsible for obtaining and reading the prospectus for the Fund
     into which you are exchanging.

o    An exchange out of a Berger Fund results in the sale of that Fund's shares
     and the purchase of another, normally resulting in a taxable event for you.

o    Exchanges into any new Fund are subject to that Fund's initial and
     subsequent investment minimums.

The Fund may terminate or modify the exchange privilege in the future.

Signature Guarantees/Special Documentation

The Fund uses Signature Guarantees to protect you and the Fund from possible
fraudulent requests for redeemed shares. Your redemption request must be in
writing and accompanied by a Signature Guarantee if:


o    Your request exceeds $100,000.


o    You request that payment be made to a name other than the one on your
     account registration.


o    You request that payment be mailed to an address that has been changed
     within 30 days of your redemption request or to an address other than the
     one of record.


o    You change or add information relating to your designated bank.

Berger Funds reserve the right to require Signature Guarantees under other
certain circumstances.

You can get a Signature Guarantee from most broker-dealers, national or state
banks, credit unions, federal savings and loan associations or other eligible
institutions. You cannot obtain a Signature Guarantee from a notary public.

Make sure the Signature Guarantee appears:

o    Together with the signature(s) of all registered owner(s) of the redeemed
     shares on the written redemption request.


Berger Funds o January 29, 2001 Berger New Generation Fund --
Institutional Shares



<PAGE>   88

                                                                              15


BERGER NEW GENERATION FUND
--------------------------------------------------------------------------------



o  On any share certificates you hold for the redeemed shares or on a separate
   statement of assignment (stock power) that may be obtained from a bank or
   broker.

Additional documents are required for redemptions by corporations, executors,
administrators, trustees and guardians. For instructions, call (800) 960-8427 or
write to the Berger Funds, P.O. Box 219958, Kansas City, MO 64121-9958.


Your Share Price


The price at which you buy, sell or exchange Fund shares is the share price or
net asset value (NAV). The share price for the Institutional Shares of the Fund
is determined by adding the Institutional Shares' pro rata portion of the total
value of the Fund's investments, cash and other assets, deducting the
Institutional Shares' pro rata portion of the Fund's liabilities and the
liabilities attributable directly to the Institutional Shares and then dividing
that value by the total number of the Institutional Shares outstanding. Share
price is calculated separately for each class of Fund shares.

The Fund's share price is calculated at the close of the regular trading session
of the New York Stock Exchange (normally 4:00 p.m. Eastern time) each day that
the Exchange is open. Share price is not calculated on the days that the
Exchange is closed.


For a purchase, redemption or exchange of Fund shares, your price is the share
price next calculated after your request is received in good order by the Fund,
its authorized agent or designee. To receive a specific day's price, your
request must be received before the close of the New York Stock Exchange on that
day.

When the Fund calculates its share price, it values the securities it holds at
market value. Sometimes market quotes for some securities are not available or
are not representative of market value. Examples would be when events occur that
materially affect the value of a security at a time when the security is not
trading or when the securities are illiquid. In that case, securities may be
valued in good faith at fair value, using consistently applied procedures
decided on by the trustees. Money market instruments maturing within 60 days are
valued at amortized cost, which approximates market value. Assets and
liabilities expressed in foreign currencies are converted into U.S. dollars at
the prevailing market rates quoted by one or more banks or dealers shortly
before the close of the Exchange.


The Fund's foreign securities may trade on days that the Exchange is closed and
the Fund's daily share price is not calculated. As a result, the Fund's daily
share price may be affected, and you will not be able to purchase or redeem
shares.



                   Berger Funds o January 29, 2001 Berger New Generation Fund --
                                                            Institutional Shares



<PAGE>   89

16

OTHER INFORMATION ABOUT
YOUR ACCOUNT
--------------------------------------------------------------------------------

SECURITY CONSIDERATIONS

You may give up some level of security by choosing to buy or sell shares by
telephone or online, rather than by mail. The Fund uses procedures designed to
give reasonable assurance that telephone and online instructions are genuine,
including recording the transactions, testing the identity of the shareholder
placing the order and sending prompt written confirmation of transactions to the
shareholder of record.


The Fund and its service providers are not liable for acting upon instructions
communicated by telephone or online that they believe to be genuine if these
procedures are followed.


CONFIRMATION OF YOUR PURCHASES AND REDEMPTIONS

After any transaction, you will receive written confirmation including the share
price and the dollar amount and number of shares bought or redeemed. Exception:
Shares purchased under Automatic Investment Plans or redeemed under Systematic
Withdrawal Plans will be confirmed quarterly. Partial shares will be calculated
to three decimal places.

SHAREHOLDER REPORTS

To reduce expenses, the Fund may mail only one copy of most financial reports,
prospectuses and proxies to your household, even if you have more than one
account in the Fund. Call (800) 960-8427 if you need additional copies of
financial reports or prospectuses.

SHARE CERTIFICATES

To assist in minimizing administrative costs, share certificates will not be
issued. Records of share ownership are maintained by the Fund's transfer agent
in book entry form.

PURCHASES THROUGH BROKER-DEALERS

You may buy Fund shares through certain broker-dealers or other financial
organizations, but these organizations may charge you a fee or may have
different minimums for first-time or additional investments which are not
applicable if you buy shares directly from the Fund.


Berger Funds o January 29, 2001 Berger New Generation Fund --
Institutional Shares



<PAGE>   90

                                                                              17


BERGER NEW GENERATION FUND
--------------------------------------------------------------------------------



THIRD-PARTY ADMINISTRATORS


Certain brokerage firms and other companies may provide administrative services
(such as sub-transfer agency, recordkeeping or shareholder communications
services) to investors purchasing shares of the Fund through those companies.
The Fund's advisor or the Fund (if approved by its trustees) may pay fees to
these companies for their services. These companies may also be appointed as
agents for or authorized by the Fund to accept on its behalf purchase and
redemption requests that are received in good order. Subject to Fund approval,
certain of these companies may be authorized to designate other entities to
accept purchase and redemption orders on behalf of the Fund.

DATE-RELATED INFORMATION

Mutual funds and businesses around the world could be adversely affected if
computers do not properly process date-related information. The Fund's advisor
is addressing these issues for its computers and is getting reasonable
assurances from the Fund's other major service providers that they too are
addressing these issues to preserve smooth functioning of the Fund's trading,
pricing, shareholder account, custodial and other operations. There can be no
assurances, however, that all problems will be avoided.

These computer problems could also adversely affect the Fund's investments.
Improperly functioning computers may disrupt securities markets generally or
result in overall economic uncertainty. Individual companies may also be
adversely affected by the cost of fixing their computers, which could be
substantial. The Fund's investment manager considers these issues when
evaluating investments for the Fund.

REDEMPTIONS IN-KIND

The Fund intends to redeem its shares only for cash, although in order to
protect the interest of remaining shareholders, it retains the right to redeem
its shares in-kind under unusual circumstances. In-kind payment means payment
will be made to you in portfolio securities rather than cash. If this occurs,
you will incur transaction costs if you sell the securities for cash. You may
have difficulty selling the securities and recovering the amount of your
redemption if the securities are illiquid.

REDEMPTIONS BY THE FUND OF CERTAIN ACCOUNTS


To reduce its expenses, the Fund may involuntarily redeem the shares in your
account if your balance drops below $250,000--but only if it drops below this
amount because you have redeemed shares, not because the share value has
declined. You will be given 60 days' notice before the Fund undertakes any
involuntary redemption. During that time, you may buy more shares to bring your
account above the minimum.

The Fund also reserves the right to close any account if it believes the
shareholder is engaging in activities which may be detrimental to the Fund.



                   Berger Funds o January 29, 2001 Berger New Generation Fund --
                                                            Institutional Shares



<PAGE>   91

18


OTHER INFORMATION ABOUT
YOUR ACCOUNT (CONTINUED)
--------------------------------------------------------------------------------



DISTRIBUTION AND TAXES

DISTRIBUTIONS OF INCOME AND GAINS


Unless you tell us that you want to receive your distributions in cash, they
will be reinvested automatically in Fund shares. The Fund generally makes two
kinds of distributions:

o    Capital gains from the sale of portfolio securities held by the Fund. The
     Fund will distribute any net realized capital gains annually, normally in
     December.

o    Net investment income from interest or dividends received on securities
     held by the Fund. The Fund will distribute its investment income annually,
     normally in December.

The Fund reserves the right to reinvest into your account undeliverable or
uncashed dividend or distribution checks that remain outstanding for six months.
The dividend or distribution amount will be reinvested in shares of the
applicable Fund at the NAV next computed after the check is cancelled.


YOUR TAXES

You generally will owe tax on amounts distributed to you by the Fund in any
non-retirement account whether you reinvest them in additional shares or receive
them in cash. Distributions of gains from the sale of assets held by the Fund
for more than one year generally are taxable to you at the applicable long-term
capital gains rate, regardless of how long you have owned your Fund shares.
Distributions from other sources generally are taxed as ordinary income.

Distributions made by the Fund to you will normally be capital gains. A portion
of those gains may be net short-term capital gains, which are taxed as ordinary
income. The Fund generally will not distribute net investment income, although
any net investment income that is generated as a by-product of managing its
portfolio will be distributed to you.

If you redeem Fund shares that have appreciated in value, you will have a
taxable gain upon redemption. Exchanges are treated as a redemption and purchase
for tax purposes. Therefore, you will also have a taxable gain if you exchange
shares that have appreciated in value.


Berger Funds o January 29, 2001 Berger New Generation Fund --
Institutional Shares



<PAGE>   92

                                                                              19


BERGER NEW GENERATION FUND
--------------------------------------------------------------------------------


ADDITIONAL TAX INFORMATION

You should consult your own tax advisor about your particular situation. For
more information about other tax matters, including backup withholding for
certain taxpayers and other tax aspects of redemptions, see the SAI.

TAX-SHELTERED RETIREMENT PLANS


The Fund offers several tax-qualified retirement plans for individuals,
businesses and nonprofit organizations. For information about establishing an
IRA, Roth IRA, profit-sharing or money purchase pension plan, 403(b) Custodial
Account, SEP-IRA, SIMPLE IRA account or other retirement plans, please call
(800) 259-2820, or write to the Berger Funds, P.O. Box 219958, Kansas City, MO
64121-9958. Trustees for existing 401(k) or other plans interested in using Fund
shares as an investment or investment alternative in their plans are invited to
call the Fund at (800) 259-2820.



                   Berger Funds o January 29, 2001 Berger New Generation Fund --
                                                            Institutional Shares



<PAGE>   93

20

ORGANIZATION OF THE FUND
--------------------------------------------------------------------------------

INVESTMENT MANAGER


Berger LLC (210 University Blvd., Suite 900, Denver, CO 80206) is the Fund's
investment advisor. Berger LLC serves as investment advisor, sub-advisor or
administrator to mutual funds and institutional investors. Berger LLC has been
in the investment advisory business for 26 years. When acting as investment
advisor, Berger LLC is responsible for managing the investment operations of the
Fund. For the most recent fiscal year, the Fund paid Berger LLC and advisory fee
of 0.00% of net assets. Berger LLC also provides administrative services to the
Fund.


Mark S. Sunderhuse, Senior Vice President of Berger LLC, is the investment
manager of the Fund. Mr. Sunderhuse joined Berger LLC in January 1998 and
assumed management of the Fund in January 1999. Mr. Sunderhuse has more than
eleven years of experience in the investment management industry.

PORTFOLIO TURNOVER

Portfolio changes are made whenever the Fund's investment manager believes that
the Fund's goal could be better achieved by investment in another security,
regardless of portfolio turnover. At times, portfolio turnover for the Fund may
exceed 100% per year. A turnover rate of 100% means the securities owned by the
Fund were replaced once during the year. Higher turnover rates may result in
higher brokerage costs to the Fund and in higher net taxable gains for you as an
investor. The Fund's portfolio turnover rate can be found under the heading
"Financial Highlights for the Fund."

SPECIAL FUND STRUCTURE

The Fund offers two classes of shares. The Institutional Shares offered in this
prospectus are designed for investors who maintain a minimum account balance of
$250,000. The other class of shares, Investor Shares, are offered through a
separate prospectus and are available to the general public with a minimum
account balance of $2,000. Each class of shares has its own expenses so that
share price, performance and distributions will differ between classes. The
12b-1 plan adopted by the Fund applies only to the Investor Shares. For more
information on Investor Shares, please call (800) 333-1001.

For more information on the multi-class fund structure, see the SAI.





Berger Funds o January 29, 2001 Berger New Generation Fund --
Institutional Shares




<PAGE>   94

                                                                              21


FINANCIAL HIGHLIGHTS


FINANCIAL HIGHLIGHTS
FOR THE FUND
--------------------------------------------------------------------------------


The financial highlights will help you understand the Fund's financial
performance for the periods shown. Certain information reflects financial
results for a single Fund share. Total return shows you how much your investment
in the Fund increased or decreased during each period, assuming you reinvested
all dividends and distributions. PricewaterhouseCoopers LLP, independent
accountants, audited this information. Their report is included in the Fund's
annual report, which is available without charge upon request.

Berger New Generation Fund - Institutional Shares
For a Share Outstanding Throughout the Period


<TABLE>
<CAPTION>

                                                  Year Ended
                                              ------------------       Period from August 16, 1999(1)
                                              September 30, 2000           to September 30, 1999
----------------------------------------------------------------------------------------------------
<S>                                           <C>                      <C>
Net asset value, beginning of period                                             $23.29
----------------------------------------------------------------------------------------------------
From investment operations
  Net investment income (loss)                                                    (0.00)(5)
  Net realized and unrealized gains
   (losses) on investments and
   foreign currency transactions                                                   2.50
----------------------------------------------------------------------------------------------------
Total from investment operations                                                   2.50
----------------------------------------------------------------------------------------------------
Net asset value, end of period                                                   $25.79
----------------------------------------------------------------------------------------------------
Total Return(2)                                                                   10.73%
----------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands)                                         $  347
Net expense ratio to average net assets(3)                                         1.02%(4)
Ratio of net income (loss) to  average net assets                                 (0.85)%(4)
Gross expense ratio to average net assets                                          1.02%(4)
Portfolio turnover rate(2)                                                          168%
</TABLE>


1.  Commencement of investment operations for Institutional Shares.

2.  Not annualized.

3.  Net expenses represent gross expenses reduced by fees waived and/or
    reimbursed by the Advisor.

4.  Annualized.

5.  Amount represents less than $0.01 per share.





                   Berger Funds o January 29, 2001 Berger New Generation Fund --
                                                            Institutional Shares




<PAGE>   95
22

FINANCIAL HIGHLIGHTS
FOR THE FUND
--------------------------------------------------------------------------------

The following supplemental financial highlights are for the Berger New
Generation Fund for periods before August 16, 1999, when the Fund first adopted
share classes and began offering Institutional Shares. Therefore, the data on
the table reflect a 0.25% 12b-1 fee not paid by the Institutional Shares. The
information in the table for the years ended September 30, 1998, 1997 and 1996
was audited by PricewaterhouseCoopers LLP, the Fund's independent accountants.
The information for the period ended August 15, 1999, is unaudited.

Berger New Generation Fund
Supplemental Financial Highlights
For a Share Outstanding Throughout the Period

<TABLE>
<CAPTION>


                                              Period from October 1, 1998  Years Ended September 30,
                                                  to August 15, 1999       -------------------------
                                                     (Unaudited)            1998      1997       1996(1)
-------------------------------------------------------------------------------------------------------
<S>                                           <C>                          <C>       <C>         <C>
Net asset value, beginning of period                    $12.66             $14.72    $11.82      $10.00
-------------------------------------------------------------------------------------------------------
From investment operations
  Net investment income (loss)                           (0.16)                --     (0.13)       0.56
  Net realized and unrealized gains (losses) on
   investments and foreign currency transactions         11.29              (2.06)     3.64        1.26
-------------------------------------------------------------------------------------------------------
Total from investment operations                         11.13              (2.06)     3.51        1.82
-------------------------------------------------------------------------------------------------------
Less dividends and distributions
  Dividends (from net investment income)                    --                 --     (0.61)         --
  Distributions (from capital gains)                     (0.50)                --        --          --
-------------------------------------------------------------------------------------------------------
Total dividends and distributions                        (0.50)                --     (0.61)         --
-------------------------------------------------------------------------------------------------------
Net asset value, end of period                          $23.29             $12.66    $14.72      $11.82
-------------------------------------------------------------------------------------------------------
Total Return(2)                                          90.53%            (13.99)%   31.53%      18.20%
-------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands)              $536,791           $113,693  $190,164    $116,912
Net expense ratio to average net assets(3)                1.54%(4)           1.72%     1.89%       1.90%(4)
Ratio of net income (loss) to  average net assets        (1.26)%(4)         (1.37)%   (1.51)%     12.35%(4)
Gross expense ratio to average net assets                 1.54%(4)           1.72%     1.89%       2.09%(4)
Portfolio turnover rate(2)                                 151%               243%      184%        474%(5)
</TABLE>


1.   Period from March 29, 1996 (commencement of investment operations for the
     Investor Shares) to September 30, 1996.

2.   Not annualized.

3.   Net expenses represent gross expenses reduced by fees waived and/or
     reimbursed by the Advisor.

4.   Annualized.

5.   Portfolio turnover was greater than expected during this period due to
     active trading undertaken in response to market conditions at a time when
     the Fund's assets were still relatively small and before the Fund was fully
     invested.



Berger Funds o January 29, 2001 Berger New Generation Fund --
Institutional Shares

<PAGE>   96









                       This page intentionally left blank



<PAGE>   97

FOR MORE INFORMATION:

Additional information about the Fund's investments is available in the
Fund's semi-annual and annual reports to shareholders. The Fund's annual
report contains a discussion of the market conditions and investment strategies
that affected the Fund's performance over the past year.

You may wish to read the Statement of Additional Information (SAI) for more
information on the Fund and the securities it invests in. The SAI is
incorporated into this prospectus by reference, which means that it is
considered to be part of the prospectus.

You can get free copies of the annual and semi-annual reports and the SAI,
request other information or get answers to your questions about the Fund by
writing or calling the Fund at:


Berger Funds
P.O. Box 219958
Kansas City, MO 64121-9958
(800) 259-2820
bergerfunds.com



Text-only versions of Fund documents can be viewed online or downloaded from
the EDGAR database on the SEC's web site at sec.gov.



You can also obtain copies by visiting the SEC's Public Reference Room in
Washington D.C. For information on the operation of the Public Reference Room,
call (202) 942-8090. Copies of documents may also be obtained, after paying
a duplicating fee, by sending your request to the following e-mail
address: [email protected]. or by writing to the SEC's Public Reference
Section, Washington, D.C. 20549-6009.


INVESTMENT COMPANY ACT FILE NUMBER:

Berger Investment Portfolio Trust 811-8046


(Berger New Generation Fund -- Institutional Shares)                    NGNIPROS


<PAGE>   98

                   Berger Small Company Growth Fund -- Institutional Shares

                   Prospectus


                   January 29, 2001


                   [BERGER FUNDS LOGO]


The Securities and Exchange Commission has not approved or disapproved any
shares offered in this prospectus or determined whether this prospectus is
accurate or complete. Anyone who tells you otherwise is committing a crime.
Like all mutual funds, an investment in the Fund is not a bank deposit and is
not insured or guaranteed by the FDIC or any other government agency. There is
no guarantee that the Fund will meet its investment goal, and although you have
the potential to make money, you could also lose money in the Fund.

<PAGE>   99



BERGER FUNDS and BERGER SMALL COMPANY GROWTH FUND are registered service marks
of Berger LLC; THE BERGER MOUNTAIN LOGO is a registered trademark of Berger LLC;
other marks referred to herein are the trademarks, service marks, registered
trademarks or registered service marks of the respective owners thereof.



<PAGE>   100
                                                                               3

CONTENTS
--------------------------------------------------------------------------------


BERGER FUNDS(R) are a no-load family of mutual funds. A mutual fund pools money
from shareholders and invests in a portfolio of securities. This prospectus
offers the class of shares designated as Institutional Shares of the Berger
Small Company Growth Fund. These shares are designed for pension and
profit-sharing plans, employee benefit trusts, endowments, foundations and
corporations, as well as high net worth individuals and financial intermediaries
who are willing to maintain a minimum account balance of $250,000.




<TABLE>
<S>                                                                        <C>
BERGER SMALL COMPANY GROWTH FUND(R) - INSTITUTIONAL SHARES ......            4

The Fund's Goal and Principal Investment Strategies .............            4

Principal Risks .................................................            4

The Fund's Past Performance .....................................            5

Fund Expenses ...................................................            6

INVESTMENT TECHNIQUES, SECURITIES AND ASSOCIATED RISKS ..........            7

Risk and Investment Glossary ....................................            7

BUYING SHARES ...................................................           11

SELLING (REDEEMING) SHARES ......................................           13

INFORMATION ABOUT YOUR ACCOUNT ..................................           14

Exchanging Shares ...............................................           14

Signature Guarantees/Special Documentation ......................           14

Your Share Price ................................................           15

OTHER INFORMATION ABOUT YOUR ACCOUNT ............................           16

Distributions and Taxes .........................................           17

Tax-Sheltered Retirement Plans ..................................           18

ORGANIZATION OF THE FUND ........................................           19

Investment Manager ..............................................           19

Special Fund Structure ..........................................           19

FINANCIAL HIGHLIGHTS FOR THE FUND ...............................           20
</TABLE>



                                    Berger Funds o January 29, 2001 Berger Small
                                     Company Growth Fund -- Institutional Shares


<PAGE>   101
4


BERGER SMALL COMPANY GROWTH FUND -- INSTITUTIONAL SHARES   Ticker Symbol   BESCX
--------------------------------------------------------------------------------


THE FUND'S GOAL AND PRINCIPAL INVESTMENT STRATEGIES

The Fund aims for capital appreciation. In pursuing that goal, the Fund
primarily invests in the common stocks of small companies with the potential for
rapid earnings growth.

The Fund's stock selection focuses on companies that
either occupy a dominant position in an emerging industry or have a growing
market share in a larger, fragmented industry.

The Fund's investment manager generally looks for companies with:

o    A proprietary technology, product or service that may enable the company to
     be a market share leader

o    Strong entrepreneurial management with clearly defined strategies for
     growth

o    Relatively strong balance sheets

Under normal circumstances, the Fund invests at least 65% of its assets in
equity securities of companies whose market capitalization, at the time of
initial purchase, is less than the 12-month average of the maximum market
capitalization for companies included in the Russell 2000 Index (Russell 2000).
This average is updated monthly. The Fund's investment manager will generally
sell a security when it no longer meets the manager's investment criteria or
when it has met the manager's expectations for appreciation. The Fund's
investment manager may actively trade the portfolio in pursuit of the Fund's
goal.

PRINCIPAL RISKS


You may be interested in the Fund if you are comfortable with above-average risk
and intend to make a long-term investment commitment. Like all managed funds,
there is a risk that the investment manager's strategy for managing the Fund may
not achieve the desired results. In addition, the price of common stock moves up
and down in response to corporate earnings and developments, economic and market
conditions and unanticipated events. As a result, the price of the Fund's
investments may go down and you could lose money on your investment.

The Fund's share price may fluctuate more than that of funds primarily invested
in stocks of mid-sized and large companies. Small company securities may
underperform as compared to the securities of larger companies. They may also
pose greater market, liquidity and information risks because of narrow product
lines, limited financial resources, less depth in management or a limited
trading market for their stocks. The Fund's investments are often focused in a
small number of business sectors, which may pose greater market and liquidity
risks. In addition the Fund's active trading will cause the Fund to have an
increased portfolio turnover rate. Higher turnover rates may result in higher
brokerage costs to the Fund and in higher net taxable gains for you as an
investor.



Berger Funds o January 29, 2001 Berger Small
Company Growth Fund -- Institutional Shares



<PAGE>   102
                                                                               5


BERGER SMALL COMPANY GROWTH FUND
--------------------------------------------------------------------------------


See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on principal risks and other risks.

THE FUND'S PAST PERFORMANCE


The information below shows the Fund's performance since it began operation
through December 31, 2000. These returns include reinvestment of all dividends
and capital gains distributions and reflect Fund expenses. As with all mutual
funds, past performance does not guarantee future results.


Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year since the Fund began.

                 YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31(1)

                                    [CHART]

<TABLE>
<S>                                         <C>
                              1994          13.73%
                              1995          33.80%
                              1996          16.77%
                              1997          16.16%
                              1998           3.17%
                              1999         102.59%
                              2000               %
</TABLE>



                              Best quarter:    %

                              Worst quarter:   %



Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Russell 2000. While the
Fund does not seek to match the returns of the Russell 2000, this index is a
good indicator of small company stock market performance. You may not invest in
the Russell 2000, and unlike the Fund, it does not incur fees or charges.



AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2000(1)



<TABLE>
<CAPTION>
                                                              Life of the Fund
                                     1 Year       5 Years    (December 30, 1993)
--------------------------------------------------------------------------------
<S>                                  <C>          <C>        <C>
The Fund                                %            %                %
Russell 2000                            %            %                %
--------------------------------------------------------------------------------
</TABLE>


1. Fund returns include periods prior to the Fund's adoption of share classes
and therefore reflect a 0.25% 12b-1 fee which has not been paid by the
Institutional Shares since that class commenced investment operations on October
16, 1999.


                                    Berger Funds o January 29, 2001 Berger Small
                                     Company Growth Fund -- Institutional Shares


<PAGE>   103
6

BERGER SMALL COMPANY
GROWTH FUND --
INSTITUTIONAL SHARES
--------------------------------------------------------------------------------

FUND EXPENSES


As a shareholder in the Fund, you do not pay any sales loads, but you do
indirectly bear Annual Fund Operating Expenses, which vary from year to year.



<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund)                                             %
--------------------------------------------------------------------------------
<S>                                                                         <C>
Management fee                                                              .81
Other expenses                                                              .78
--------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES                                       1.59
Expense Reimbursement(1)                                                   (.54)
--------------------------------------------------------------------------------
NET EXPENSES                                                               1.05
--------------------------------------------------------------------------------
</TABLE>



1. Pursuant to a written agreement, the Fund's investment adviser reimburses the
Fund's Institutional Shares class to the extent the normal transfer agency and
registration expenses of the Institutional Shares exceed .20%.


UNDERSTANDING EXPENSES

Annual Fund operating expenses are paid by the Fund. As a result, they reduce
the Fund's return. Fund expenses include management fees and administrative
costs such as shareholder recordkeeping and reports, custodian and pricing
services and registration fees.

EXAMPLE COSTS


The following example helps you compare the cost of investing in the Fund with
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses:


o    $10,000 initial investment

o    5% total return for each year

o    Fund operating expenses remain the same for each period

o    Redemption after the end of each period

Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:


<TABLE>
<CAPTION>
BERGER SMALL COMPANY GROWTH FUND -- INSTITUTIONAL SHARES
YEARS                                                                          $
--------------------------------------------------------------------------------
<S>                                                                          <C>
One
Three
Five
Ten
--------------------------------------------------------------------------------
</TABLE>




Berger Funds o January 29, 2001 Berger Small
Company Growth Fund -- Institutional Shares


<PAGE>   104
                                                                               7

BERGER SMALL COMPANY GROWTH FUND
INVESTMENT TECHNIQUES,
SECURITIES AND ASSOCIATED
RISKS
--------------------------------------------------------------------------------


BEFORE YOU INVEST...


in the Fund, make sure you understand the risks involved. All investments
involve risk. Generally, the greater the risk, the greater the potential for
return. The reverse is also generally true-the lower the risk, the lower the
potential for return.


Like all mutual funds, an investment in the Fund is not a bank deposit and is
not insured or guaranteed by the FDIC or any other government agency. The Fund
is not a complete investment program, but may serve to diversify other types of
investments in your portfolio. There is no guarantee that the Fund will meet its
investment goal, and although you have the potential to make money, you could
also lose money by investing in the Fund.

The following glossary will help you further understand the risks the Fund takes
by investing in certain securities and the investment techniques used by the
Fund. You may get more detailed information about the risks of investing in the
Fund in the Statement of Additional Information (SAI), including a discussion of
debt security ratings in Appendix A to the SAI.

RISK AND INVESTMENT GLOSSARY

Borrowing refers to a loan of money from a bank or other financial institution
undertaken by the Fund for temporary or emergency reasons only. The Fund will
not borrow more than 25% of its total assets. Leverage Risk


Call risk is the possibility that an issuer may redeem or "call" a fixed-income
security before maturity at a price below its current market price. An increase
in the likelihood of a call may reduce the security's price.


Common stock is a share of ownership (equity) interest in a company.

Companies with limited operating histories are securities issued by companies
that have been in continuous operation for less than three years. Sometimes
called "unseasoned" issuers. Market, Liquidity and Information Risks


Convertible securities(1) are debt or equity securities that may be converted on
specified terms into stock of the issuer. Market, Interest Rate, Prepayment and
Credit Risks


Correlation risk occurs when the Fund "hedges"--uses one investment to offset
the Fund's position in another. If the two investments do not behave in relation
to one another the way Fund managers expect them to, then unexpected results may
occur.

Credit risk means that the issuer of a security or the counterparty to an
investment contract may default or become unable to pay its obligations when
due.


Currency risk happens when the Fund buys or sells a security denominated in
foreign currency. Foreign currencies "float" in value against the U.S. dollar.
Adverse changes in foreign currency values can cause investment losses when the
Fund's investments are converted to U.S. dollars.




                                    Berger Funds o January 29, 2001 Berger Small
                                     Company Growth Fund -- Institutional Shares


<PAGE>   105

8

INVESTMENT TECHNIQUES,
SECURITIES AND ASSOCIATED
RISKS (CONTINUED)
--------------------------------------------------------------------------------

Diversification means a diversified fund may not, with respect to at least 75%
of its assets, invest more than 5% in the securities of one company. A
nondiversified fund may be more volatile than a diversified fund because it
invests more of its assets in a smaller number of companies and the gains or
losses on a single stock will therefore have a greater impact on the fund's
share price. The Fund is a diversified fund.

Financial futures(2) are exchange-traded contracts on securities, securities
indexes or foreign currencies that obligate the holder to take or make future
delivery of a specified quantity of those underlying securities or currencies on
a predetermined future date at a predetermined price. Not more than 5% of the
Fund's net assets may be used for initial margins for futures and premiums for
options. Hedging, Correlation, Opportunity and Leverage Risks

Foreign securities are issued by companies located outside of the United States.
The Fund considers a company to be located outside the United States if the
principal securities trading market for its equity securities is located outside
the U.S. or it is organized under the laws of, and has a principal office in, a
country other than the U.S. Market, Currency, Transaction, Liquidity,
Information and Political Risks

Forward foreign currency contracts(2) are privately negotiated contracts
committing the holder to purchase or sell a specified quantity of a foreign
currency on a predetermined future date at a predetermined price. Hedging,
Credit, Correlation, Opportunity and Leverage Risks

Hedging risk comes into play when the Fund uses a security whose value is based
on an underlying security or index to "offset" the Fund's position in another
security or currency. The objective of hedging is to offset potential losses in
one security with gains in the hedge. But a hedge can eliminate or reduce gains
as well as offset losses. (Also see "Correlation risk.")


Illiquid and restricted securities are securities that, by rules of their issue
or by their nature, cannot be sold readily. These do not include liquid Rule
144A securities. The Fund will not invest more than 15% of its net assets in
illiquid securities, including restricted securities not deemed to be liquid.
Market, Liquidity and Transaction Risks


Information risk means that information about a security or issuer might not be
available, complete, accurate or comparable.


Initial public offering (IPO) is the sale of a company's securities to the
public for the first time. IPO companies can be small and have limited operating
histories. The price of IPO securities can be highly unstable because of
prevailing market psychology and the small number of shares available. In
addition, the quality and number of IPOs available for purchase may diminish in
the future, and their contribution to Fund performance may be less significant
as the Fund grows in size. Market, Liquidity and Information Risks





Berger Funds o January 29, 2001 Berger Small
Company Growth Fund -- Institutional Shares



<PAGE>   106

                                                                               9


BERGER SMALL COMPANY GROWTH FUND
--------------------------------------------------------------------------------


Interest rate risk is the risk that changes in interest rates will adversely
affect the value of an investor's securities. When interest rates rise, the
value of fixed-income securities will generally fall. Conversely, a drop in
interest rates will generally cause an increase in the value of fixed-income
securities. Longer-term securities are subject to greater interest rate risk.


Investment-grade bonds are rated BBB (Standard & Poor's) or Baa (Moody's) or
above. Bonds rated below investment grade are subject to greater credit risk
than investment-grade bonds. Interest Rate, Market, Call and Credit Risks


Lending portfolio securities to qualified financial institutions is undertaken
in order to earn income. The Fund lends securities only on a fully
collateralized basis. The Fund may lend portfolio securities only up to 33 1/3%
of its total assets. Credit Risk

Leverage risk occurs in some securities or techniques that tend to magnify the
effect of small changes in an index or a market. This can result in a loss that
exceeds the amount that was invested in the contract.

Liquidity risk occurs when investments cannot be sold readily. The Fund may have
to accept a less-than-desirable price to complete the sale of an illiquid
security or may not be able to sell it at all.

Market capitalization is the total current market value of a company's
outstanding common stock.


Market risk exists in all mutual funds and means the risk that the prices of
securities in a market, a sector, or an industry will fluctuate and that such
movements might reduce an investment's value.


Opportunity risk means missing out on an investment opportunity because the
assets necessary to take advantage of it are committed to less advantageous
investments or strategies.

Options(2) are contracts giving the holder the right but not the obligation to
purchase or sell a security on or before a predetermined future date for a fixed
price. Options on securities indexes are similar, but settle in cash. Not more
than 5% of the Fund's net assets may be used for initial margins for futures and
premiums for options. Hedging, Credit, Correlation, and Leverage Risks


Political risk comes into play with investments, particularly foreign
investments, that may be adversely affected by nationalization, taxation, war,
government instability or other economic or political actions or factors.


Prepayment risk is the risk that, as interest rates fall, borrowers are more
likely to refinance their debts. As a result, the principal on certain
fixed-income securities may be paid earlier than expected, which could cause
investment losses and cause prepaid amounts to have to be reinvested at a
relatively lower interest rate.



                                    Berger Funds o January 29, 2001 Berger Small
                                     Company Growth Fund -- Institutional Shares



<PAGE>   107
10

INVESTMENT TECHNIQUES,
SECURITIES AND ASSOCIATED
RISKS (CONTINUED)
--------------------------------------------------------------------------------

Sector focus(3) occurs when a significant portion of the Fund's assets are
invested in a relatively small number of related industries. The Fund will not
concentrate more than 25% of its total assets in any one industry. Sector focus
may increase both market and liquidity risk. Market and Liquidity Risks

Small company securities(3) are securities issued by small companies, as
measured by their market capitalization. The market capitalization range
targeted by the Fund appears under the heading "The Fund's Goal and Principal
Investment Strategies." In general, the smaller the company, the greater its
risks. Market, Liquidity and Information Risks


Special situations are companies about to undergo a structural, financial or
management change that may significantly affect the value of their securities.
Market and Information Risks

Temporary defensive measures increase a fund's investment in government
securities and other short-term securities when warranted because of market
conditions, without regard to the fund's investment restrictions, policies or
normal investment emphasis. Opportunity Risk

Transaction risk means that the Fund may be delayed or unable to settle a
transaction or that commissions and settlement expenses may be higher than
usual. In the case of foreign securities, use of a foreign securities depository
to maintain Fund assets may increase this risk. This risk may be minimized
through an analysis and continuous monitoring, by the Funds' primary custodian,
of the custodial risks of using the depository.

Writing (selling) covered call options(2) is the selling of a contract to
another party, which gives them the right but not the obligation to buy a
particular security from you. The Fund will write call options only if it
already owns the security (if it is "covered"). The Fund may only write call
options up to 25% of its total assets. Opportunity,  Credit and Leverage Risks



1. The Fund has no minimum quality standards for convertible securities,
although it will not invest in defaulted securities. It also will not invest 20%
or more of its assets in convertible securities rated below investment grade or
in unrated convertible securities that the sub-advisor considers to be below
investment grade.

2. The Fund may use futures, forwards and options only for hedging. Not more
than 5% of the Fund's net assets may be used for initial margins for futures and
premiums for options, although the Fund may have more at risk under these
contracts than the initial margin or premium. However, the Fund's aggregate
obligations under these contracts may not exceed the total market value of the
assets being hedged, such as some or all of the value of the Fund's equity
securities.

3. The security or technique is emphasized by the Fund.



Berger Funds o January 29, 2001 Berger Small
Company Growth Fund -- Institutional Shares


<PAGE>   108
                                                                              11


BERGER SMALL COMPANY GROWTH FUND
BUYING SHARES
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
MINIMUMS
--------------------------------------------------------------------------------
<S>                                                                   <C>
Initial investment                                                      $250,000
Subsequent investments                                                No minimum
--------------------------------------------------------------------------------
</TABLE>

Send new account applications to

Berger Funds
P.O. Box 219958
Kansas City, MO 64121-9958

OR for overnight, certified or registered mail only

Berger Funds
330 West 9th Street, 1st Floor
Kansas City, MO 64105

BY MAIL

o    Read this prospectus.

o    Fill out the application if you are opening a new account.

o    Make out a check to Berger Funds for the amount you want to invest.

o    Send the application and check to the Berger Funds in the envelope
     provided.

o    To add to an existing account, be sure to include your account number on
     your check and mail it to the appropriate address above.

BY WIRE OR ELECTRONIC FUNDS TRANSFER

o    Payment may be made from your bank to the Berger Funds.

o    Call (800) 960-8427 for current wire or electronic funds transfer
     instructions.

BY TELEPHONE

o    If you already have a Berger Funds account, you may purchase additional
     shares by telephone order.

o    You must pay for them within three business days by wire, electronic funds
     transfer or overnight delivery of a check.

o    Call (800) 960-8427 for current wire or electronic funds transfer
     instructions.



                                    Berger Funds o January 29, 2001 Berger Small
                                     Company Growth Fund -- Institutional Shares



<PAGE>   109

12

BUYING SHARES
(CONTINUED)
--------------------------------------------------------------------------------

BY ONLINE ACCESS

o    If you have established a Berger Funds account with electronic funds
     transfer privileges, you may purchase additional shares via online access.

o    You will find us online at bergerfunds.com.

BY AUTOMATIC INVESTMENT PLAN

o    To automatically purchase more shares on a regular basis, fill out the
     Automatic Investment Plan section of the application.

o    Investments are transferred automatically from your bank account.

o    See details on the application.

     All shareholders are automatically granted telephone and online transaction
     privileges unless they decline them explicitly in writing, either on the
     account application or by writing to the Berger Funds at the address above.

     You may give up some level of security by choosing to buy and sell shares
     by telephone or online rather than by mail. In times of extreme economic or
     market conditions, transactions by telephone or online may be difficult.

Important notes about paying for your shares

o    Your check must be made payable to Berger Funds.

o    You may not purchase shares by cash, credit card, third-party checks or
     checks drawn on foreign banks.

o    Subject to approval by the Fund, you may purchase Fund shares with liquid
     securities that the Fund is eligible to purchase. These securities must
     have a value that can be readily determined in accordance with the Fund's
     valuation policies. You may pay for Fund shares with securities only if it
     is the investment manager's intention to retain them in the Fund's
     portfolio. The Fund may amend or terminate this practice at any time.


o    Orders not paid for on time will be canceled, and shares will be redeemed
     from your account to compensate for any decline in price of the shares
     canceled.

Berger Funds reserve the right to reject any order and to waive or reduce
minimums, or increase minimums following notice.




Berger Funds o January 29, 2001 Berger Small
Company Growth Fund -- Institutional Shares



<PAGE>   110
                                                                              13


BERGER SMALL COMPANY GROWTH FUND
SELLING (REDEEMING)
SHARES
--------------------------------------------------------------------------------


BY MAIL

o    Send a written request indicating your account number and the dollar amount
     or number of shares you are redeeming to the appropriate address shown
     under "Buying Shares."

o    Your request must be signed by each registered shareholder, with the
     signature(s) appearing exactly as they do on your account registration.

o    Include any necessary Signature Guarantees. See "Signature
     Guarantees/Special Documentation" below.

BY TELEPHONE

o    Call (800) 960-8427.

BY ONLINE ACCESS

o    You will find us online at bergerfunds.com.

     For limitations on telephone and online redemptions see "Signature
     Guarantees/Special Documentation" below.

     Telephone and online redemptions are not available for shares held in
     retirement accounts sponsored by the Fund.

BY SYSTEMATIC WITHDRAWAL PLAN

o    A systematic withdrawal plan may be established.

o    Shares may be redeemed automatically ($50 minimum) monthly, quarterly,
     semi-annually or annually.

o    Call (800) 960-8427 for more information and forms.

Important notes about payment for your redeemed shares


o    Generally, payment for your redeemed shares will be sent to you within
     three business days after receipt of your redemption request in good order.


o    You may receive payment for redeemed shares via wire or electronic funds
     transfer. You may elect these services on the account application or send
     to the Berger Funds a written request providing your bank information with
     your signature guaranteed. (See "Signature Guarantees/Special
     Documentation" below.)

o    A wire transfer will be sent the next business day after receipt of your
     order, and an electronic funds transfer will be sent the second business
     day after receipt of your order.

o    Proceeds from the redemption of shares purchased by check may be delayed
     until full payment for the shares has been received and cleared, which may
     take up to 15 days from the purchase date.



                                    Berger Funds o January 29, 2001 Berger Small
                                     Company Growth Fund -- Institutional Shares



<PAGE>   111

14

INFORMATION ABOUT YOUR
ACCOUNT
--------------------------------------------------------------------------------

EXCHANGING SHARES

Shares of the Fund may be exchanged for shares of any other publicly available
Berger Funds by calling (800) 960-8427. When exchanging shares:

o    Each account must be registered identically--have the same signatures and
     addresses.

o    Each Fund must be legally eligible for sale in your state of residence.

o    You may exchange out of each of the Berger Funds up to four times per
     calendar year.

o    You may exchange by telephone, online access or mail.

o    You are responsible for obtaining and reading the prospectus for the Fund
     into which you are exchanging.

o    An exchange out of a Berger Fund results in the sale of that Fund's shares
     and the purchase of another, normally resulting in a taxable event for you.

o    Exchanges into any new Fund are subject to that Fund's initial and
     subsequent investment minimums.

The Fund may terminate or modify the exchange privilege in the future.

SIGNATURE GUARANTEES/SPECIAL DOCUMENTATION

The Fund uses Signature Guarantees to protect you and the Fund from possible
fraudulent requests for redeemed shares.

Your redemption request must be in writing and accompanied by a Signature
Guarantee if:


o    Your request exceeds $100,000.


o    You request that payment be made to a name other than the one on your
     account registration.


o    You request that payment be mailed to an address that has been changed
     within 30 days of your redemption request or to an address other than the
     one of record.


o    You change or add information relating to your designated bank.


Berger Funds reserve the right to require Signature Guarantees under other
certain circumstances.


You can get a Signature Guarantee from most broker-dealers, national or state
banks, credit unions, federal savings and loan associations or other eligible
institutions. You cannot obtain a Signature Guarantee from a notary public.

Make sure the Signature Guarantee appears:

o    Together with the signature(s) of all registered owner(s) of the redeemed
     shares on the written redemption request.



Berger Funds o January 29, 2001 Berger Small
Company Growth Fund -- Institutional Shares



<PAGE>   112
                                                                              15


BERGER SMALL COMPANY GROWTH FUND
--------------------------------------------------------------------------------



o    On any share certificates you hold for the redeemed shares or on a separate
     statement of assignment (stock power) that may be obtained from a bank or
     broker.

Additional documents are required for redemptions by corporations, executors,
administrators, trustees and guardians. For instructions, call (800) 960-8427,
or write to the Berger Funds, P.O. Box 219958, Kansas City, MO 64121-9958.


Your Share Price


The price at which you buy, sell or exchange Fund shares is the share price or
net asset value (NAV). The share price for the Institutional Shares of the Fund
is determined by adding the Institutional Shares' pro rata portion of the total
value of the Fund's investments, cash and other assets, deducting the
Institutional Shares' pro rata portion of the Fund's liabilities and the
liabilities attributable directly to the Institutional Shares and then dividing
that value by the total number of the Institutional Shares outstanding. Share
price is calculated separately for each class of Fund shares.

The Fund's share price is calculated at the close of the regular trading session
of the New York Stock Exchange (normally 4:00 p.m. Eastern time) each day that
the Exchange is open. Share price is not calculated on the days that the
Exchange is closed.


For a purchase, redemption or exchange of Fund shares, your price is the share
price next calculated after your request is received in good order by the Fund,
its authorized agent or designee. To receive a specific day's price, your
request must be received before the close of the New York Stock Exchange on that
day.

When the Fund calculates its share price, it values the securities it holds at
market value. Sometimes market quotes for some securities are not available or
are not representative of market value. Examples would be when events occur that
materially affect the value of a security at a time when the security is not
trading or when the securities are illiquid. In that case, securities may be
valued in good faith at fair value, using consistently applied procedures
decided on by the trustees. Money market instruments maturing within 60 days are
valued at amortized cost, which approximates market value. Assets and
liabilities expressed in foreign currencies are converted into U.S. dollars at
the prevailing market rates quoted by one or more banks or dealers shortly
before the close of the Exchange.


The Fund's foreign securities may trade on days that the Exchange is closed and
the Fund's daily share price is not calculated. As a result, the Fund's daily
share price may be affected, and you will not be able to purchase or redeem
shares.


SECURITY CONSIDERATIONS

You may give up some level of security by choosing to buy or sell shares by
telephone or online, rather than by mail. The Fund uses procedures designed to
give reasonable assurance that telephone and online instructions are genuine,
including recording the



                                    Berger Funds o January 29, 2001 Berger Small
                                     Company Growth Fund -- Institutional Shares



<PAGE>   113
16

OTHER INFORMATION ABOUT
YOUR ACCOUNT
--------------------------------------------------------------------------------

transactions, testing the identity of the shareholder placing the order and
sending prompt written confirmation of transactions to the shareholder of
record. The Fund, and its service providers, are not liable for acting upon
instructions communicated by telephone or online that they believe to be genuine
if these procedures are followed.

CONFIRMATION OF YOUR PURCHASES AND REDEMPTIONS

After any transaction, you will receive written confirmation including the share
price and the dollar amount and number of shares bought or redeemed. Exception:
Shares purchased under Automatic Investment Plans or redeemed under Systematic
Withdrawal Plans will be confirmed quarterly. Partial shares will be calculated
to three decimal places.

SHAREHOLDER REPORTS

To reduce expenses, the Fund may mail only one copy of most financial reports,
prospectuses and proxies to your household, even if you have more than one
account in the Fund. Call (800) 960-8427 if you need additional copies of
financial reports or prospectuses.

SHARE CERTIFICATES

To assist in minimizing administrative costs, share certificates will not be
issued. Records of share ownership are maintained by the Fund's transfer agent
in book entry form.

PURCHASES THROUGH BROKER-DEALERS


You may buy Fund shares through certain broker-dealers or other financial
organizations, but these organizations may charge you a fee or may have
different minimums for first-time or additional investments that are not
applicable if you buy shares directly from the Fund.

THIRD-PARTY ADMINISTRATORS


Certain brokerage firms and other companies may provide administrative services
(such as sub-transfer agency, recordkeeping or shareholder communications
services) to investors purchasing shares of the Fund through those companies.
The Fund's advisor or the Fund (if approved by its trustees) may pay fees to
these companies for their services. These companies may also be appointed as
agents for or authorized by the Fund to accept on its behalf purchase and
redemption requests that are received in good order. Subject to Fund approval,
certain of these companies may be authorized to designate other entities to
accept purchase and redemption orders on behalf of the Fund.

DATE-RELATED INFORMATION

Mutual funds and businesses around the world could be adversely affected if
computers do not properly process date-related information. The Fund's advisor
is addressing these issues for its computers and is getting reasonable
assurances from the Fund's other major service providers that they too are
addressing these issues to preserve



Berger Funds o January 29, 2001 Berger Small
Company Growth Fund -- Institutional Shares



<PAGE>   114
                                                                              17


BERGER SMALL COMPANY GROWTH FUND
--------------------------------------------------------------------------------


smooth functioning of the Fund's trading, pricing, shareholder account,
custodial and other operations. There can be no assurances, however, that all
problems will be avoided.

These computer problems could also adversely affect the Fund's investments.
Improperly functioning computers may disrupt securities markets generally or
result in overall economic uncertainty. Individual companies may also be
adversely affected by the cost of fixing their computers, which could be
substantial. The Fund's investment manager considers these issues when
evaluating investments for the Fund.

REDEMPTIONS IN-KIND

The Fund intends to redeem its shares only for cash, although in order to
protect the interest of remaining shareholders, it retains the right to redeem
its shares in-kind under unusual circumstances. In-kind payment means payment
will be made to you in portfolio securities rather than cash. If this occurs,
you will incur transaction costs if you sell the securities for cash. You may
have difficulty selling the securities and recovering the amount of your
redemption if the securities are illiquid.

REDEMPTIONS BY THE FUND OF CERTAIN ACCOUNTS

To reduce its expenses, the Fund may involuntarily redeem the shares in your
account if your balance drops below $250,000--but only if it drops below this
amount because you have redeemed shares, not because the share value has
declined. You will be given 60 days' notice before the Fund undertakes any
involuntary redemption. During that time, you may buy more shares to bring your
account above the minimum.


The Fund also reserves the right to close any account if it believes the
shareholder is engaging in activities which may be detrimental to the Fund


DISTRIBUTION AND TAXES

DISTRIBUTIONS OF INCOME AND GAINS


Unless you tell us that you want to receive your distributions in cash, they
will be reinvested automatically in Fund shares. The Fund generally makes two
kinds of distributions:

o    Capital gains from the sale of portfolio securities held by the Fund. The
     Fund will distribute any net realized capital gains annually, normally in
     December.

o    Net investment income from interest or dividends received on securities
     held by the Fund. The Fund will distribute its investment income annually,
     normally in December.

The Fund reserves the right to reinvest into your account undeliverable or
uncashed dividend or distribution checks that remain outstanding for six months.
The dividend or distribution amount will be reinvested in shares of the
applicable Fund at the NAV next computed after the check is cancelled.




                                    Berger Funds o January 29, 2001 Berger Small
                                     Company Growth Fund -- Institutional Shares



<PAGE>   115

18

OTHER INFORMATION ABOUT
YOUR ACCOUNT (CONTINUED)
--------------------------------------------------------------------------------

You generally will owe tax on amounts distributed to you by the Fund in any
non-retirement account whether you reinvest them in additional shares or receive
them in cash. Distributions of gains from the sale of assets held by the Fund
for more than one year generally are taxable to you at the applicable long-term
capital gains rate, regardless of how long you have owned your Fund shares.
Distributions from other sources generally are taxed as ordinary income.

Distributions made by the Fund to you will normally be capital gains. A portion
of those gains may be net short-term capital gains, which are taxed as ordinary
income. The Fund generally will not distribute net investment income, although
any net investment income that is generated as a by-product of managing its
portfolio will be distributed to you.

If you redeem Fund shares that have appreciated in value, you will have a
taxable gain upon redemption. Exchanges are treated as a redemption and purchase
for tax purposes. Therefore, you will also have a taxable gain if you exchange
shares that have appreciated in value.

ADDITIONAL TAX INFORMATION

You should consult your own tax advisor about your particular situation. For
more information about other tax matters, including backup withholding for
certain taxpayers and other tax aspects of redemptions, see the SAI.

TAX-SHELTERED RETIREMENT PLANS


The Fund offers several tax-qualified retirement plans for individuals,
businesses and nonprofit organizations. For information about establishing an
IRA, Roth IRA, profit-sharing or money purchase pension plan, 403(b) Custodial
Account, SEP-IRA, SIMPLE IRA account or other retirement plans, please call
(800) 259-2820, or write to the Berger Funds, P.O. Box 219958, Kansas City, MO
64121-9958. Trustees for existing 401(k) or other plans interested in using Fund
shares as an investment or investment alternative in their plans are invited to
call the Fund at (800) 259-2820.




Berger Funds o January 29, 2001 Berger Small
Company Growth Fund -- Institutional Shares



<PAGE>   116

                                                                              19


BERGER SMALL COMPANY GROWTH FUND

ORGANIZATION OF THE FUND
--------------------------------------------------------------------------------


INVESTMENT MANAGER


Berger LLC (210 University Blvd., Suite 900, Denver, CO 80206) is the Fund's
investment advisor. Berger LLC serves as investment advisor, sub-advisor or
administrator to mutual funds and institutional investors. Berger LLC has been
in the investment advisory business for 26 years. When acting as investment
advisor, Berger LLC is responsible for managing the investment operations of the
Fund. For the most recent fiscal year, the Fund paid Berger LLC and advisory fee
of 0.81% of net assets. Berger LLC also provides administrative services to the
Fund.

Jay W. Tracey, CFA, Executive Vice President and Chief Investment Officer of
Berger LLC, and Mark S. Sunderhuse, Executive Vice President of Berger LLC, are
interim investment managers of the Fund and assumed management in June 2000. Mr.
Tracey joined Berger LLC in June 2000 and has more than 23 years experience in
the investment management industry. Mr Sunderhuse joined Berger LLC in January
1998 and has more than 12 years experience in the investment management
industry.


PORTFOLIO TURNOVER

Portfolio changes are made whenever the Fund's investment manager believes that
the Fund's goal could be better achieved by investment in another security,
regardless of portfolio turnover. At times, portfolio turnover for the Fund may
exceed 100% per year. A turnover rate of 100% means the securities owned by the
Fund were replaced once during the year. Higher turnover rates may result in
higher brokerage costs to the Fund and in higher net taxable gains for you as an
investor. The Fund's portfolio turnover rate can be found under the heading
"Financial Highlights for the Fund."

SPECIAL FUND STRUCTURE

The Fund offers two classes of shares. The Institutional Shares offered in this
prospectus are designed for investors who maintain a minimum account balance of
$250,000. The other class of shares, Investor Shares, are offered through a
separate prospectus and are available to the general public with a minimum
account balance of $2,000. Each class of shares has its own expenses so that
share price, performance and distributions will differ between classes. The
12b-1 plan adopted by the Fund applies only to the Investor Shares. For more
information on Investor Shares, please call (800) 333-1001.

For more information on the multi-class fund structure, see the SAI.



                                    Berger Funds o January 29, 2001 Berger Small
                                      Company Growth Fund - Institutional Shares



<PAGE>   117

20

FINANCIAL HIGHLIGHTS
FOR THE FUND
--------------------------------------------------------------------------------

The Institutional Shares class of the Fund did not commence investment
operations before the fiscal year ended September 30, 1999. Therefore, financial
highlights for that class of shares are not shown. The following supplemental
financial highlights are for the Fund for periods before the Fund first began
selling Institutional Shares. Therefore, the data on the table reflect a 0.25%
12b-1 fee not paid by the Institutional Shares. Unless otherwise noted, the
information in the table was audited by PricewaterhouseCoopers LLP, the Fund's
independent accountants.

Berger Small Company Growth Fund
Supplemental Financial Highlights
For a Share Outstanding Throughout the Period


<TABLE>
<CAPTION>
                                                                   Years Ended September 30,
                                      ----------------------------------------------------------------------------------------
                                      2000         1999             1998           1997           1996                1995
------------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>     <C>              <C>            <C>            <C>                 <C>
Net asset value, beginning of period          $      3.61      $      5.33    $      4.74    $      3.61         $      2.74
------------------------------------------------------------------------------------------------------------------------------
From investment operations
  Net investment income (loss)                      (0.00)(2)           --          (0.05)         (0.03)              (0.02)
  Net realized and unrealized gains
   (losses) from investments and
   foreign currency transactions                     1.95            (1.24)          0.84           1.16                0.89
------------------------------------------------------------------------------------------------------------------------------
Total from investment operations                     1.95            (1.24)          0.79           1.13                0.87
------------------------------------------------------------------------------------------------------------------------------
Less dividends and distributions
  Dividends (from net investment
   income)                                             --               --             --             --               (0.00)(2)
  Distributions (from capital gains)                (0.70)           (0.48)         (0.20)            --                  --
------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions                   (0.70)           (0.48)         (0.20)            --                  --
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                $      4.86      $      3.61    $      5.33    $      4.74         $      3.61
------------------------------------------------------------------------------------------------------------------------------
Total Return(3)                                     62.78%          (24.70)%        17.68%         31.30%              31.90%
------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
  Net assets, end of period
   (in thousands)                             $   675,637      $   561,741    $   902,685    $   871,467         $   522,667
Net expense ratio to average
  net assets(4)                                      1.60%            1.48%          1.67%          1.68%               1.89%
Ratio of net income (loss)
  to  average net assets                            (1.21)%          (1.01)%        (1.09)%        (0.97)%             (0.74)%
Gross expense ratio to average
   net assets                                        1.60%            1.59%          1.67%          1.68%               1.89%
Portfolio turnover rate(3)                            128%              97%           111%            91%                109%
</TABLE>


1.   Period from December 30, 1993 (commencement of investment operations) to
     September 30, 1994. Other independent accountants audited this information.
2.   Amount represents less than $0.01 per share.
3.   Not annualized.
4.   Net expenses represent gross expenses reduced by fees waived and/or
     reimbursed by the Advisor.
5.   Annualized.




Berger Funds o January 29, 2001 Berger Small
Company Growth Fund -- Institutional Shares


<PAGE>   118




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<PAGE>   119




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<PAGE>   120





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<PAGE>   121

FOR MORE INFORMATION:

Additional information about the Fund's investments is available in the Fund's
semi-annual and annual reports to shareholders. The Fund's annual report
contains a discussion of the market conditions and investment strategies that
affected the Fund's performance over the past year.

You may wish to read the Statement of Additional Information (SAI) for more
information on the Fund and the securities it invests in. The SAI is
incorporated into this prospectus by reference, which means that it is
considered to be part of the prospectus.

You can get free copies of the annual and semi-annual reports and the SAI,
request other information or get answers to your questions about the Fund by
writing or calling the Fund at:


Berger Funds
P.O. Box 219958
Kansas City, MO 64121-9958
(800) 259-2820
bergerfunds.com


Text-only versions of Fund documents can be viewed online or downloaded from the
EDGAR database on the SEC's Web site at sec.gov.


You can also obtain copies by visiting the SEC's Public Reference Room in
Washington D.C. For information on the operation of the Public Reference Room,
call (202) 942-8090. Copies of documents may also be obtained, after paying a
duplicating fee, by sending your request to the following e-mail address:
[email protected], or by writing to the SEC's Public Reference Section,
Washington, D.C. 20549-6009.


INVESTMENT COMPANY ACT FILE NUMBER:


Berger Investment Products Trust 811-8046
(Berger Small Company Growth Fund -- Institutional Shares)              SCGIPROS

<PAGE>   122
              BERGER INFORMATION TECHNOLOGY FUND - INVESTOR SHARES
                  A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST

                  BERGER NEW GENERATION FUND - INVESTOR SHARES
                  A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST

                               BERGER SELECT FUND
                  A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST

               BERGER SMALL COMPANY GROWTH FUND - INVESTOR SHARES
                  A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST



                           BERGER MID CAP GROWTH FUND
                  A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST

                            BERGER MID CAP VALUE FUND
                  A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST

                               BERGER GROWTH FUND


                            BERGER INTERNATIONAL FUND
                    A SERIES OF BERGER WORLDWIDE FUNDS TRUST

                          BERGER LARGE CAP GROWTH FUND


                              BERGER BALANCED FUND
                  A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST


                       STATEMENT OF ADDITIONAL INFORMATION
                      SHAREHOLDER SERVICES: 1-800-551-5849


     This Statement of Additional Information ("SAI") is not a prospectus. It
relates to the Prospectus for the Berger Funds listed above (the "Funds"), dated
January 29, 2001, as it may be amended or supplemented from time to time, which
may be obtained by writing the Funds at P.O. Box 5005, Denver, Colorado 80217,
or calling 1-800-333-1001.


     The Funds are all "no-load" mutual funds, meaning that a buyer pays no
commissions or sales loads when buying or redeeming shares of the Funds,
although each Fund pays certain costs of distributing its shares. See "Section
5. Expenses of the Funds -- 12b-1 Plans" below. This SAI describes each of these
Funds which have many features in common, but may have different investment
objectives and different investment emphases.

     The following financial statements of the Funds are incorporated herein by
reference:


     [TO BE UPDATED]


     Copies of the Annual Report are available, without charge, upon request, by
calling 1-800-333-1001.





                             DATED JANUARY 29, 2001


<PAGE>   123

                                TABLE OF CONTENTS
                                        &
                         CROSS-REFERENCES TO PROSPECTUS


<TABLE>
<CAPTION>
                                                                        CROSS-REFERENCES TO
                                                               PAGE     RELATED DISCLOSURES
SECTION                                                        NO.      IN PROSPECTUS
-------                                                        ----     -------------------
<S>                                                            <C>      <C>

Introduction                                                   1        Table of Contents

1. Investment Strategies and Risks of the Funds.               1        Berger Funds; Investment Techniques,
                                                                        Securities and the Associated Risks

2. Investment Restrictions                                     16       Berger Funds; Investment Techniques,
                                                                        Securities and the Associated Risks

3. Management of the Funds                                     22       Organization of the Berger Funds Family

4. Investment Advisors and Sub-Advisors                        29       Organization of the Berger Funds Family

5. Expenses of the Funds                                       36       Berger Funds; Organization of the Berger Funds
                                                                        Family; Financial Highlights for the Berger
                                                                        Funds Family

6. Brokerage Policy                                            45       Organization of the Berger Funds Family

7. How to Purchase and Redeem Shares in the Funds              50       Buying Shares; Selling (Redeeming) Shares

8. How the Net Asset Value is Determined                       51       Your Share Price

9. Income Dividends, Capital Gains Distributions and Tax       53       Distributions and Taxes
   Treatment

10. Suspension of Redemption Rights                            54       Other Information About Your Account

11. Tax-Sheltered Retirement Plans                             54       Tax-Sheltered Retirement Plans

12. Exchange Privilege and Systematic Withdrawal               57       Exchanging Shares
      Plan

13. Performance Information                                    57       Financial Highlights for the Berger Funds
                                                                        Family

14. Additional Information                                     60       Organization of the Berger Funds Family;
                                                                        Special Fund Structures

Financial Information                                          68       Financial Highlights

</TABLE>


                                      -i-
<PAGE>   124

<PAGE>   125


                                  INTRODUCTION

     The Funds described in this SAI are all mutual funds, or open-end,
management investment companies. All of the Funds are diversified funds, except
the Berger Select Fund. See below under "Non-Diversification" in Section 1 for
further information concerning the Berger Select Fund. Although each Fund is
offering only its own shares and is not participating in the sale of the shares
of the other Funds, it is possible that a Fund might become liable for any
misstatement, inaccuracy or incomplete disclosure in the Prospectus or SAI
concerning the other Funds.

1.   INVESTMENT STRATEGIES AND RISKS OF THE FUNDS

     The Prospectus describes the investment objective of each of the Funds and
the principal investment policies and strategies used to achieve that objective.
It also describes the principal risks of investing in each Fund.


     This section contains supplemental information concerning the types of
securities and other instruments in which the Funds may invest, the investment
policies and portfolio strategies that the Funds may utilize and certain risks
attendant to those investments, policies and strategies. For the Berger
International Fund, the term "Fund" in this Section 1 should be read to mean the
Berger International Portfolio (the "Portfolio"), in which all the investable
assets of the Fund are invested.


     COMMON AND PREFERRED STOCKS. Stocks represent shares of ownership in a
company. Generally, preferred stock has a specified dividend and ranks after
bonds and before common stocks in its claim on income for dividend payments and
on assets should the company be liquidated. After other claims are satisfied,
common stockholders participate in company profits on a pro-rata basis. Profits
may be paid out in dividends or reinvested in the company to help it grow.
Increases and decreases in earnings are usually reflected in a company's stock
price, so common stocks generally have the greatest appreciation and
depreciation potential of all corporate securities. While most preferred stocks
pay dividends, any of the Funds may purchase preferred stock where the issuer
has omitted, or is in danger of omitting, payment of its dividends. Such
investments would be made primarily for their capital appreciation potential.
All investments in stocks are subject to market risk, meaning that their prices
may move up and down with the general stock market, and that such movements
might reduce their value.


     DEBT SECURITIES. Debt securities (such as bonds or debentures) are
fixed-income securities that bear interest and are issued by corporations or
governments. The issuer has a contractual obligation to pay interest at a stated
rate on specific dates and to repay principal on a specific maturity date. In
addition to market risk, debt securities are generally subject to two other
kinds of risk: credit risk and interest rate risk. Credit risk refers to the
ability of the issuer to meet interest or principal payments as they come due.
The lower the rating given a security by a rating service (such as Moody's
Investor Service ("Moody's") and Standard & Poor's ("S&P")), the greater the
credit risk the rating service perceives with respect to that security. None of
the Funds will purchase any nonconvertible securities rated below investment
grade (Ba or lower by Moody's, BB or lower by S&P). In cases where the ratings
assigned by more than one rating agency differ, the Funds will consider the
security as rated in the higher category. If nonconvertible securities purchased
by a Fund are downgraded to below investment grade following purchase, the
directors or trustees of the Fund, in consultation with the Fund's advisor or
sub-advisor, will determine what action, if any, is appropriate in light of all
relevant circumstances. For a further discussion of debt security ratings, see
Appendix A to this SAI.


     Interest rate risk refers to the fact that the value of fixed-income
securities (like debt securities) generally fluctuates in response to changes in
interest rates. A decrease in interest rates will generally result in an
increase in the price of fixed-income securities held by a Fund. Conversely,
during periods of rising interest rates, the value of fixed-income securities
held by a Fund will generally decline. Longer-term securities are generally more
sensitive to interest rate changes and are more volatile than shorter-term
securities, but they generally offer higher yields to compensate investors for
the associated risks.

     Certain debt securities can also present prepayment risk. For example, a
security may contain redemption and call provisions. If an issuer exercises
these provisions when interest rates are declining, the Fund could sustain
investment losses as well as have to reinvest the proceeds from the security at
lower interest rates, resulting in a decreased return for the Fund.


                                      -1-

<PAGE>   126

     CONVERTIBLE SECURITIES. The Funds may also purchase debt or equity
securities which are convertible into common stock when the Fund's advisor or
sub-advisor believes they offer the potential for a higher total return than
nonconvertible securities. While fixed-income securities generally have a
priority claim on a corporation's assets over that of common stock, some of the
convertible securities which the Funds may hold are high-yield/high-risk
securities that are subject to special risks, including the risk of default in
interest or principal payments which could result in a loss of income to the
Fund or a decline in the market value of the securities. Convertible securities
often display a degree of market price volatility that is comparable to common
stocks. The credit risk associated with convertible securities generally is
reflected by their ratings by organizations such as Moody's or S&P or a similar
determination of creditworthiness by the Fund's advisor or sub-advisor. The
Funds have no pre-established minimum quality standards for convertible
securities and may invest in convertible securities of any quality, including
lower rated or unrated securities. However, the Funds will not invest in any
security in default at the time of purchase, and each of the Funds will invest
less than 20% of the market value of its assets at the time of purchase in
convertible securities rated below investment grade. If convertible securities
purchased by a Fund are downgraded following purchase, or if other circumstances
cause 20% or more of a Fund's assets to be invested in convertible securities
rated below investment grade, the directors or trustees of the Fund, in
consultation with the Fund's advisor or sub-advisor, will determine what action,
if any, is appropriate in light of all relevant circumstances. For a further
discussion of debt security ratings, see Appendix A to this SAI. Convertible
securities will be included in the 25% of total assets the Berger Balanced Fund
will keep in fixed-income senior securities. However, only that portion of their
value attributable to their fixed-income characteristics will be used in
calculating the 25%.


     ZEROS/STRIPS. Each of the Funds, except the Berger New Generation Fund, the
Berger Small Company Growth Fund and the Berger International Fund, may invest
in zero coupon bonds or in "strips." Zero coupon bonds do not make regular
interest payments; rather, they are sold at a discount from face value.
Principal and accreted discount (representing interest accrued but not paid) are
paid at maturity. "Strips" are debt securities that are stripped of their
interest coupon after the securities are issued, but otherwise are comparable to
zero coupon bonds. The market values of "strips" and zero coupon bonds generally
fluctuate in response to changes in interest rates to a greater degree than do
interest-paying securities of comparable term and quality.


     SECURITIES OF SMALLER COMPANIES. Each of the Funds may invest in securities
of companies with small or mid-sized market capitalizations. Market
capitalization is defined as total current market value of a company's
outstanding common stock. Investments in companies with smaller market
capitalizations may involve greater risks and price volatility (that is, more
abrupt or erratic price movements) than investments in larger, more mature
companies since smaller companies may be at an earlier stage of development and
may have limited product lines, reduced market liquidity for their shares,
limited financial resources or less depth in management than larger or more
established companies. Smaller companies also may be less significant factors
within their industries and may have difficulty withstanding competition from
larger companies. While smaller companies may be subject to these additional
risks, they may also realize more substantial growth than larger or more
established companies.

     SECURITIES OF COMPANIES WITH LIMITED OPERATING HISTORIES. Each of the Funds
may invest in securities of companies with limited operating histories. The
Funds consider these to be securities of companies with a record of less than
three years' continuous operation, even including the operations of any
predecessors and parents. (These are sometimes referred to as "unseasoned
issuers.") These companies by their nature have only a limited operating history
which can be used for evaluating the company's growth prospects. As a result,
investment decisions for these securities may place a greater emphasis on
current or planned product lines and the reputation and experience of the
company's management and less emphasis on fundamental valuation factors than
would be the case for more mature companies. In addition, many of these
companies may also be small companies and involve the risks and price volatility
associated with smaller companies.

     INITIAL PUBLIC OFFERINGS. The Funds may invest in a company's securities at
the time the company first offers securities to the public, that is, at the time
of the company's initial public offering or IPO. Although companies can be any
age or size at the time of their IPOs, they are often smaller and have a limited
operating history, which involve a greater potential for the value of their
securities to be impaired following the IPO. See "Securities of Smaller
Companies" and "Securities of Companies with Limited Operating Histories" above.

     Investors in IPOs can be adversely affected by substantial dilution in the
value of their shares, by sales of additional shares and by concentration of
control in existing management and principal shareholders. In addition, all of
the factors that affect stock market performance may have a greater impact on
the shares of IPO companies.


                                      -2-

<PAGE>   127

     The price of a company's securities may be highly unstable at the time of
its IPO and for a period thereafter due to market psychology prevailing at the
time of the IPO, the absence of a prior public market, the small number of
shares available and limited availability of investor information. As a result
of this or other factors, a Fund's advisor or sub-advisor might decide to sell
an IPO security more quickly than it would otherwise, which may result in a
significant gain or loss and greater transaction costs to the Fund. Any gains
from shares held for 12 months or less will be treated as short-term gains,
taxable as ordinary income to the Fund's shareholders. In addition, IPO
securities may be subject to varying patterns of trading volume and may, at
times, be difficult to sell without an unfavorable impact on prevailing prices.

     The effect of an IPO investment can have a magnified impact on a Fund's
performance when the Fund's asset base is small. Consequently, IPOs may
constitute a significant portion of a Fund's returns particularly when the Fund
is small. Since the number of securities issued in an IPO is limited, it is
likely that IPO securities will represent a smaller component of a Fund's assets
as it increases in size, and therefore have a more limited effect on the Fund's
performance.

     There can be no assurance that IPOs will continue to be available for any
of the Funds to purchase. The number or quality of IPOs available for purchase
by a Fund may vary, decrease or entirely disappear. In some cases, a Fund may
not be able to purchase IPOs at the offering price, but may have to purchase the
shares in the aftermarket at a price greatly exceeding the offering price,
making it more difficult for the Fund to realize a profit.

     The advisor's or sub-advisor's IPO trade allocation procedures govern which
Funds and other advised accounts participate in the allocation of any IPO. See
the heading "Trade Allocations" under Section 4 below. Under the IPO allocation
procedures of Berger LLC, a Fund generally will not participate in an IPO if the
securities available for allocation to the Fund are insignificant relative to
the Fund's net assets. As a result, any Fund or account whose assets are very
large (such as the Berger Growth Fund) is not likely to participate in the
allocation of many IPOs.

     FOREIGN SECURITIES. Each Fund may invest in foreign securities, which may
be traded in foreign markets and denominated in foreign currency. The Funds'
investments may also include American Depositary Receipts (ADRs), European
Depositary Receipts (EDRs) which are similar to ADRs, in bearer form, designed
for use in the European securities markets, and in Global Depositary Receipts
(GDRs).

     Investments in foreign securities involve some risks that are different
from the risks of investing in securities of U.S. issuers, such as the risk of
adverse political, social, diplomatic and economic developments and, with
respect to certain countries, the possibility of expropriation, taxes imposed by
foreign countries or limitations on the removal of monies or other assets of the
Funds. Moreover, the economies of individual foreign countries will vary in
comparison to the U.S. economy in such respects as growth of gross domestic
product, rate of inflation, capital reinvestment, resources, self-sufficiency
and balance of payments position. Securities of some foreign companies,
particularly those in developing countries, are less liquid and more volatile
than securities of comparable domestic companies. A developing country generally
is considered to be in the initial stages of its industrialization cycle.
Investing in the securities of developing countries may involve exposure to
economic structures that are less diverse and mature, and to political systems
that can be expected to have less stability than developed countries.


     There also may be less publicly available information about foreign issuers
and securities than domestic issuers and securities, and foreign issuers
generally are not subject to accounting, auditing and financial reporting
standards, requirements and practices comparable to those applicable to domestic
issuers. Also, there is generally less government supervision and regulation of
exchanges, brokers, financial institutions and issuers in foreign countries than
there is in the U.S. Foreign financial markets typically have substantially less
volume than U.S. markets. Foreign markets also have different clearance and
settlement procedures and, in certain markets, delays or other factors could
make it difficult to effect transactions, potentially causing a Fund to
experience losses or miss investment opportunities. The use of a foreign
securities depository may increase this risk. The Funds may maintain assets with
a foreign securities depository if certain conditions are met. A foreign
securities depository may maintain assets on behalf of a Fund if the depository:
(i) acts as or operates a system for the central handling of securities that is
regulated by a foreign financial regulatory authority; (ii) holds assets on
behalf of the Fund under safekeeping conditions no less favorable than those
that apply to other participants; (iii) maintains records that identify the
assets of participants, and keep its own assets separated from the assets of
participants; (iv) provides periodic reports to participants; and (v) undergoes
periodic examination by regulatory authorities or independent accountants. In
addition, the Funds' primary custodian provides the Fund with an analysis of the
custodial risks of using a depository, monitors the depository on a continuous
basis, and notifies the Funds of any material changes in risks associated with
using the depository. In general, the analysis may



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include an analysis of a depository's expertise and market reputation, the
quality of its services, its financial strength, and insurance or
indemnification arrangements, the extent and quality of regulation and
independent examination of the depository, its standing in published ratings,
its internal controls, and other procedures for safeguarding investments, and
any related legal proceedings.


     Costs associated with transactions in foreign securities are generally
higher than with transactions in U.S. securities. A Fund will incur greater
costs in maintaining assets in foreign jurisdictions and in buying and selling
foreign securities generally, resulting in part from converting foreign
currencies into U.S. dollars. In addition, a Fund might have greater difficulty
taking appropriate legal action with respect to foreign investments in non-U.S.
courts than with respect to domestic issuers in U.S. courts, which may heighten
the risk of possible losses through the holding of securities by custodians and
securities depositories in foreign countries.


     For any Fund invested in securities denominated or quoted in currencies
other than the U.S. dollar, changes in foreign currency exchange rates will
affect the value of the investments in its portfolio and the unrealized
appreciation or depreciation of investments insofar as U.S. investors are
concerned. If the foreign currency in which a security is denominated
appreciates against the U.S. dollar, the dollar value of the security will
increase. Conversely, a decline in the exchange rate of the foreign currency
against the U.S. dollar would adversely affect the dollar value of the foreign
securities. Foreign currency exchange rates are determined by forces of supply
and demand on the foreign exchange markets, which are in turn affected by the
international balance of payments and other economic and financial conditions,
government intervention, speculation and other factors.


     PASSIVE FOREIGN INVESTMENT COMPANIES (PFICS). The Funds may purchase the
securities of certain companies considered Passive Foreign Investment Companies
(PFICs) under U.S. tax laws. For certain types of PFICs, in addition to bearing
their proportionate share of a Fund's expenses (management fees and operating
expenses), shareholders will also indirectly bear similar expenses of such PFIC.
PFIC investments also may be subject to less favorable U.S. tax treatment, as
discussed in Section 9 below.


     ILLIQUID AND RESTRICTED SECURITIES. Each of the Funds is authorized to
invest in securities which are illiquid or not readily marketable because they
are subject to restrictions on their resale ("restricted securities") or
because, based upon their nature or the market for such securities, no ready
market is available. None of the Funds will purchase any such security, the
purchase of which would cause the Fund to invest more than 15% of its net
assets, measured at the time of purchase, in illiquid securities. Investments in
illiquid securities involve certain risks to the extent that a Fund may be
unable to dispose of such a security at the time desired or at a reasonable
price or, in some cases, may be unable to dispose of it at all. In addition, in
order to resell a restricted security, a Fund might have to incur the
potentially substantial expense and delay associated with effecting
registration. If securities become illiquid following purchase or other
circumstances cause more than 15% of a Fund's net assets to be invested in
illiquid securities, the directors or trustees of that Fund, in consultation
with the Fund's advisor, will determine what action, if any, is appropriate in
light of all relevant circumstances.


     Repurchase agreements maturing in more than seven days will be considered
as illiquid for purposes of this restriction. Pursuant to guidelines established
by the directors or trustees, a Fund's advisor or sub-advisor will determine
whether securities eligible for resale to qualified institutional buyers
pursuant to SEC Rule 144A under the Securities Act of 1933 should be treated as
illiquid investments considering, among other things, the following factors: (1)
the frequency of trades and quotes for the security; (2) the number of dealers
willing to purchase or sell the security and the number of other potential
purchasers; (3) dealer undertakings to make a market in the security; and (4)
the nature of the security and the marketplace trades (e.g., the time needed to
dispose of the security, the method of soliciting offers, and the mechanics of
the transfer). The liquidity of a Fund's investments in Rule 144A securities
could be impaired if qualified institutional buyers become uninterested in
purchasing these securities.

     REPURCHASE AGREEMENTS. Each Fund may invest in repurchase agreements with
various financial organizations, including commercial banks, registered
broker-dealers and registered government securities dealers. A repurchase
agreement is an agreement under which a Fund acquires a debt security (generally
a debt security issued or guaranteed by the U.S. government or an agency
thereof, a banker's acceptance or a certificate of deposit) from a commercial


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bank, broker or dealer, subject to resale to the seller at an agreed upon price
and date (normally, the next business day). A repurchase agreement may be
considered a loan collateralized by securities. The resale price reflects an
agreed upon interest rate effective for the period the instrument is held by a
Fund and is unrelated to the interest rate on the underlying instrument. In
these transactions, the securities acquired by a Fund (including accrued
interest earned thereon) must have a total value equal to or in excess of the
value of the repurchase agreement and are held by the Fund's custodian bank
until repurchased. In addition, the directors or trustees will establish
guidelines and standards for review by the investment advisor of the
creditworthiness of any bank, broker or dealer party to a repurchase agreement
with a Fund. None of the Funds will enter into a repurchase agreement maturing
in more than seven days if as a result more than 15% of the Fund's net assets
would be invested in such repurchase agreements and other illiquid securities.

     These transactions must be fully collateralized at all times by debt
securities (generally a security issued or guaranteed by the U.S. Government or
an agency thereof, a banker's acceptance or a certificate of deposit), but
involve certain risks, such as credit risk to the Fund if the other party
defaults on its obligation and the Fund is delayed or prevented from liquidating
the collateral. For example, if the other party to the agreement defaults on its
obligation to repurchase the underlying security at a time when the value of the
security has declined, a Fund may incur a loss upon disposition of the security.
If the other party to the agreement becomes insolvent and subject to liquidation
or reorganization under the Bankruptcy Code or other laws, a court may determine
that the underlying security is collateral for a loan by a Fund not within the
control of the Fund and therefore the realization by the Fund on such collateral
may automatically be stayed and delayed. Further, it is possible that a Fund may
not be able to substantiate its interest in the underlying security and may be
deemed an unsecured creditor of the other party to the agreement. The Funds
expect that these risks can be controlled through careful monitoring procedures.

     WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. Each Fund may purchase and
sell securities on a when-issued or delayed delivery basis. However, none of the
Funds currently intends to purchase or sell securities on a when-issued or
delayed delivery basis, if as a result more than 5% of its total assets taken at
market value at the time of purchase would be invested in such securities.
When-issued or delayed delivery transactions arise when securities (normally,
obligations of issuers eligible for investment by a Fund) are purchased or sold
by the Fund with payment and delivery taking place in the future in order to
secure what is considered to be an advantageous price or yield. However, the
yield available on a comparable security when delivery takes place may vary from
the yield on the security at the time that the when-issued or delayed delivery
transaction was entered into. Any failure to consummate a when-issued or delayed
delivery transaction may result in a Fund missing the opportunity of obtaining a
price or yield considered to be advantageous. When-issued and delayed delivery
transactions may generally be expected to settle within one month from the date
the transactions are entered into, but in no event later than 90 days. However,
no payment or delivery is made by a Fund until it receives delivery or payment
from the other party to the transaction.

     When a Fund purchases securities on a when-issued basis, it will maintain
in a segregated account with its custodian cash, U.S. government securities or
other liquid assets having an aggregate value equal to the amount of such
purchase commitments, until payment is made. If necessary, additional assets
will be placed in the account daily so that the value of the account will equal
or exceed the amount of the Fund's purchase commitments.


     LENDING OF PORTFOLIO SECURITIES. Each of the Funds, except the Berger
Growth Fund and the Berger Large Cap Growthand Fund, may lend their securities
to qualified institutional investors (such as brokers, dealers or other
financial organizations) who need to borrow securities in order to complete
certain transactions, such as covering short sales, avoiding failures to deliver
securities or completing arbitrage operations. Loans of securities by a Fund
will be collateralized by cash, letters of credit, or securities issued or
guaranteed by the U.S. Government or its agencies. The collateral will equal at
least 100% of the current market value of the loaned securities,
marked-to-market on a daily basis. By lending its securities, a Fund will be
attempting to generate income through the receipt of interest on the loan which,
in turn, can be invested in additional securities to pursue the Fund's
investment objective. Any gain or loss in the market price of the securities
loaned that might occur during the term of the loan would be for the account of
the Fund.


     Each Fund permitted to lend its portfolio securities may lend to qualified
brokers, dealers, banks or other financial institutions, so long as the terms,
the structure and the aggregate amount of such loans are not inconsistent with
the Investment Company Act of 1940, or the Rules and Regulations or
interpretations of the Securities and Exchange Commission (the "Commission")
thereunder, which currently require that (a) the borrower pledge and maintain
with the Fund collateral consisting of cash, an irrevocable letter of credit or
securities issued or guaranteed by the United States government having

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<PAGE>   130

a value at all times not less than 100% of the value of the securities loaned,
(b) the borrower add to such collateral whenever the price of the securities
loaned rises (i.e., the borrower "marks to the market" on a daily basis), (c)
the loan be made subject to termination by the Fund at any time and (d) the Fund
receives reasonable interest on the loan, which interest may include the Fund's
investing cash collateral in interest bearing short-term investments, and (e)
the Fund receives all dividends and distributions on the loaned securities and
any increase in the market value of the loaned securities.

     A Fund lending securities bears risk of loss in the event that the other
party to a securities lending transaction defaults on its obligations and the
Fund is delayed in or prevented from exercising its rights to dispose of the
collateral, including the risk of a possible decline in the value of the
collateral securities during the period in which the Fund seeks to assert these
rights, the risk of incurring expenses associated with asserting these rights
and the risk of losing all or a part of the income from the transaction. None of
the Funds will lend its portfolio securities if, as a result, the aggregate
value of such loans would exceed 33-1/3% of the value of the Fund's total assets
(including the value of the collateral received to secure the loan). Loan
arrangements made by a Fund will comply with all other applicable regulatory
requirements, including the rules of the New York Stock Exchange, which rules
presently require the borrower, after notice, to redeliver the securities within
the normal settlement time of three business days. All relevant facts and
circumstances, including creditworthiness of the broker, dealer or institution,
will be considered in making decisions with respect to the lending of
securities, subject to review by the Fund's trustees.

     Although voting rights with respect to loaned securities pass to the
borrower, lending Funds retain the right to recall a security (or terminate a
loan) for the purpose of exercising the security's voting rights. Efforts to
recall loaned securities in time to exercise voting rights may be unsuccessful,
especially for foreign securities or thinly traded securities. In addition, it
is expected that loaned securities will be recalled for voting only when the
items being voted on are, in the judgment of the lending Fund's advisor, either
material to the economic value of the security or threaten to materially impact
the issuing company's corporate governance policies or structure.


     SHORT SALES. Each Fund (other than the Berger International Fund) currently
is only permitted to engage in short sales if, at the time of the short sale,
the Fund owns or has the right to acquire an equivalent kind and amount of the
security being sold short at no additional cost (i.e., short sales "against the
box"). The Berger International Fund is not permitted to engage in short sales
at all.


     In a short sale, the seller does not immediately deliver the securities
sold and is said to have a short position in those securities until delivery
occurs. To make delivery to the purchaser, the executing broker borrows the
securities being sold short on behalf of the seller. While the short position is
maintained, the seller collateralizes its obligation to deliver the securities
sold short in an amount equal to the proceeds of the short sale plus an
additional margin amount established by the Board of Governors of the Federal
Reserve. If a Fund engages in a short sale, the collateral account will be
maintained by the Fund's custodian. While the short sale is open, the Fund will
maintain in a segregated custodial account an amount of securities convertible
into or exchangeable for such equivalent securities at no additional cost. These
securities would constitute the Fund's long position.


     Under prior law, a Fund could have made a short sale, as described above,
when it wanted to sell a security it owned at a current attractive price, but
also wished to defer recognition of gain or loss for Federal income tax purposes
and for purposes of satisfying certain tests applicable to regulated investment
companies under the Internal Revenue Code. However, federal tax legislation has
since eliminated the ability to defer recognition of gain or loss in short sales
against the box and accordingly, it is not anticipated that any of the Funds
will be engaging in these transactions unless there are further legislative
changes.


     SPECIAL SITUATIONS. Each Fund may also invest in "special situations."
Special situations are companies that have recently experienced or are
anticipated to experience a significant change in structure, management,
products or services which may significantly affect the value of their
securities. Examples of special situations are companies being reorganized or
merged, companies emerging from bankruptcy, companies introducing unusual new
products or which enjoy particular tax advantages. Other examples are companies
experiencing changes in senior management, extraordinary corporate events,
significant changes in cost or capital structure or which are believed to be
probable takeover candidates. The opportunity to invest in special situations,
however, is limited and depends in part on the market's assessment of these
companies and their circumstances. By its nature, a "special situation" company
involves to some degree a break with the company's past experience. This creates
greater uncertainty and potential risk of loss than if the company were
operating according to long-


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established patterns. In addition, stocks of companies in special situations may
decline or not appreciate as expected if an anticipated change or development
does not occur or is not assessed by the market as favorably as expected.

     HEDGING TRANSACTIONS. Each Fund is authorized to make limited use of
certain types of futures, forwards and/or options, but only for the purpose of
hedging, that is, protecting against market risk due to market movements that
may adversely affect the value of a Fund's securities or the price of securities
that a Fund is considering purchasing. The utilization of futures, forwards and
options is also subject to policies and procedures which may be established by
the directors or trustees from time to time. In addition, none of the Funds is
required to hedge. Decisions regarding hedging are subject to the advisor's or
sub-advisor's judgment of the cost of the hedge, its potential effectiveness and
other factors the advisor or sub-advisor considers pertinent.

     A hedging transaction may partially protect a Fund from a decline in the
value of a particular security or its portfolio generally, although hedging may
also limit a Fund's opportunity to profit from favorable price movements, and
the cost of the transaction will reduce the potential return on the security or
the portfolio. Use of these instruments by a Fund involves the potential for a
loss that may exceed the amount of initial margin the Fund would be permitted to
commit to the contracts under its investment limitation, or in the case of a
call option written by the Fund, may exceed the premium received for the option.
However, a Fund is permitted to use such instruments for hedging purposes only,
and only if the aggregate amount of its obligations under these contracts does
not exceed the total market value of the assets the Fund is attempting to hedge,
such as a portion or all of its exposure to equity securities or its holding in
a specific foreign currency. To help ensure that the Fund will be able to meet
its obligations under its futures and forward contracts and its obligations
under options written by that Fund, the Fund will be required to maintain liquid
assets in a segregated account with its custodian bank or to set aside portfolio
securities to "cover" its position in these contracts.

     The principal risks of a Fund utilizing futures transactions, forward
contracts and options are: (a) losses resulting from market movements not
anticipated by the Fund; (b) possible imperfect correlation between movements in
the prices of futures, forwards and options and movements in the prices of the
securities or currencies hedged or used to cover such positions; (c) lack of
assurance that a liquid secondary market will exist for any particular futures
or options at any particular time, and possible exchange-imposed price
fluctuation limits, either of which may make it difficult or impossible to close
a position when so desired; (d) lack of assurance that the counterparty to a
forward contract would be willing to negotiate an offset or termination of the
contract when so desired; and (e) the need for additional information and skills
beyond those required for the management of a portfolio of traditional
securities. In addition, when the Fund enters into an over-the-counter contract
with a counterparty, the Fund will assume counterparty credit risk, that is, the
risk that the counterparty will fail to perform its obligations, in which case
the Fund could be worse off than if the contract had not been entered into.


     Following is additional information concerning the futures, forwards and
options which the Berger Information Technology Fund, the Berger New Generation
Fund, the Berger Select Fund, the Berger Small Company Growth Fund, the Berger
Mid Cap Growth Fund, the Berger Mid Cap Value Fund, the Berger Growth Fund, the
Berger Large Cap Growthand Fund and the Berger Balanced Fund may utilize,
provided that no more than 5% of the Fund's net assets at the time the contract
is entered into may be used for initial margins for financial futures
transactions and premiums paid for the purchase of options. In addition, those
Funds may only write call options that are covered and only up to 25% of the
Fund's total assets.



     Currently, the Berger International Fund is authorized to utilize only
forward contracts for hedging purposes and is not permitted to utilize futures
or options. Consequently, the following additional information should be read as
applicable to that Fund only to the extent it discusses forwards. If the
trustees ever authorize that Fund to utilize futures or options, such
investments would be permitted solely for hedging purposes, and the Fund would
not be permitted to invest more than 5% of its net assets at the time of
purchase in initial margins for financial futures transactions and premiums for
options. In addition, the Fund's advisor or sub-advisor may be required to
obtain bank regulatory approval before that Fund engages in futures and options
transactions.







                                      -7-
<PAGE>   132

     Futures Contracts. Financial futures contracts are exchange-traded
contracts on financial instruments (such as securities and foreign currencies)
and securities indices that obligate the holder to take or make delivery of a
specified quantity of the underlying financial instrument, or the cash value of
an index, at a future date. Although futures contracts by their terms call for
the delivery or acquisition of the underlying instruments or a cash payment
based on the mark-to-market value of the underlying instruments, in most cases
the contractual obligation will be offset before the delivery date by buying (in
the case of an obligation to sell) or selling (in the case of an obligation to
buy) an identical futures contract. Such a transaction cancels the original
obligation to make or take delivery of the instruments.

     Certain Funds may enter into contracts for the purchase or sale for future
delivery of financial instruments, such as securities and foreign currencies, or
contracts based on financial indices including indices of U.S. Government
securities, foreign government securities or equity securities. U.S. futures
contracts are traded on exchanges which have been designated "contract markets"
by the Commodity Futures Trading Commission ("CFTC") and must be executed
through a futures commission merchant (an "FCM"), or brokerage firm, which is a
member of the relevant contract market. Through their clearing corporations, the
exchanges guarantee performance of the contracts as between the clearing members
of the exchange.

     Both the buyer and seller are required to deposit "initial margin" for the
benefit of the FCM when a futures contract is entered into. Initial margin
deposits are equal to a percentage of the contract's value, as set by the
exchange on which the contract is traded, and may be maintained in cash or other
liquid assets. If the value of either party's position declines, that party will
be required to make additional "variation margin" payments to the other party to
settle the change in value on a daily basis. Initial and variation margin
payments are similar to good faith deposits or performance bonds or
party-to-party payments resulting from daily changes in the value of the
contract, unlike margin extended by a securities broker, and would be released
or credited to the Funds upon termination of the futures contract, assuming all
contractual obligations have been satisfied. Unlike margin extended by a
securities broker, initial and variation margin payments do not constitute
purchasing securities on margin for purposes of a Fund's investment limitations.
A Fund will incur brokerage fees when it buys or sells futures contracts.

     In the event of the bankruptcy of the FCM that holds margin on behalf of a
Fund, the Fund may be entitled to return of margin owed to the Fund only in
proportion to the amount received by the FCM's other customers. A Fund will
attempt to minimize this risk by careful monitoring of the creditworthiness of
the FCMs with which the Fund does business and by depositing margin payments in
a segregated account with the Fund's custodian for the benefit of the FCM when
practical or otherwise required by law.

     Where applicable, each Fund intends to comply with guidelines of
eligibility for exclusion from the definition of the term "commodity pool
operator" with the CFTC and the National Futures Association, which regulate
trading in the futures markets. Accordingly, a Fund will not enter into any
futures contract or option on a futures contract if, as a result, the aggregate
initial margin and premiums required to establish such positions would exceed 5%
of the Fund's net assets.

     Although a Fund will hold cash and liquid assets in a segregated account
with a mark-to-market value sufficient to cover the Fund's open futures
obligations, the segregated assets will be available to the Fund immediately
upon closing out the futures position.

     The acquisition or sale of a futures contract may occur, for example, when
a Fund is considering purchasing or holds equity securities and seeks to protect
itself from fluctuations in prices without buying or selling those securities.
For example, if prices were expected to decrease, the Fund might sell equity
index futures contracts, thereby hoping to offset a potential decline in the
value of equity securities in the portfolio by a corresponding increase in the
value of the futures contract position held by the Fund and thereby preventing
the Fund's net asset value from declining as much as it otherwise would have. A
Fund also could protect against potential price declines by selling portfolio
securities and investing in money market instruments. However, the use of
futures contracts as a hedging technique allows a Fund to maintain a defensive
position without having to sell portfolio securities.

     Similarly, when prices of equity securities are expected to increase,
futures contracts may be bought to attempt to hedge against the possibility of
having to buy equity securities at higher prices. This technique is sometimes
known as an anticipatory hedge. Since the fluctuations in the value of futures
contracts should be similar to those of equity securities, a Fund could take
advantage of the potential rise in the value of equity securities without buying
them until the market has


                                      -8-

<PAGE>   133

stabilized. At that time, the futures contracts could be liquidated and the Fund
could buy equity securities on the cash market.

     The ordinary spreads between prices in the cash and futures markets, due to
differences in the nature of those markets, are subject to distortions. First,
all participants in the futures market are subject to initial margin and
variation margin requirements. Rather than meeting additional variation margin
requirements, investors may close out futures contracts through offsetting
transactions which could distort the normal price relationship between the cash
and futures markets. Second, the liquidity of the futures market depends on
participants entering into offsetting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery, liquidity
in the futures market could be reduced and prices in the futures market
distorted. Third, from the point of view of speculators, the margin deposit
requirements in the futures market are less than margin requirements in the
securities market. Therefore, increased participation by speculators in the
futures market may cause temporary price distortions. Due to the possibility of
the foregoing distortions, a correct forecast of general price trends by a Fund
still may not result in a successful use of futures.

     Futures contracts entail additional risks. Although a Fund will only
utilize futures contracts when it believes that use of such contracts will
benefit the Fund, if the Fund's investment judgment is incorrect, the Fund's
overall performance could be worse than if the Fund had not entered into futures
contracts. For example, if the Fund has hedged against the effects of a possible
decrease in prices of securities held in the Fund's portfolio and prices
increase instead, the Fund will lose part or all of the benefit of the increased
value of these securities because of offsetting losses in the Fund's futures
positions. In addition, if the Fund has insufficient cash, it may have to sell
securities from its portfolio to meet daily variation margin requirements. Those
sales may be, but will not necessarily be, at increased prices which reflect the
rising market and may occur at a time when the sales are disadvantageous to the
Fund. Although the buyer of an option cannot lose more than the amount of the
premium plus related transaction costs, a buyer or seller of futures contracts
could lose amounts substantially in excess of any initial margin deposits made,
due to the potential for adverse price movements resulting in additional
variation margin being required by such positions. However, each Fund utilizing
futures contracts intends to monitor its investments closely and will attempt to
close its positions when the risk of loss to the Fund becomes unacceptably high.

     The prices of futures contracts depend primarily on the value of their
underlying instruments. Because there are a limited number of types of futures
contracts, it is possible that the standardized futures contracts available to a
Fund will not match exactly the Fund's current or potential investments. A Fund
may buy and sell futures contracts based on underlying instruments with
different characteristics from the securities in which it typically invests --
for example, by hedging investments in portfolio securities with a futures
contract based on a broad index of securities -- which involves a risk that the
futures position will not correlate precisely with the performance of the Fund's
investments.

     Futures prices can also diverge from the prices of their underlying
instruments, even if the underlying instruments closely correlate with a Fund's
investments. Futures prices are affected by such factors as current and
anticipated short-term interest rates, changes in volatility of the underlying
instruments and the time remaining until expiration of the contract. Those
factors may affect securities prices differently from futures prices. Imperfect
correlations between a Fund's investments and its futures positions may also
result from differing levels of demand in the futures markets and the securities
markets, from structural differences in how futures and securities are traded,
and from imposition of daily price fluctuation limits for futures contracts. A
Fund may buy or sell futures contracts with a value less than or equal to the
securities it wishes to hedge or is considering purchasing. If price changes in
a Fund's futures positions are poorly correlated with its other investments, its
futures positions may fail to produce desired gains or result in losses that are
not offset by the gains in the Fund's other investments.

     Because futures contracts are generally settled within a day from the date
they are closed out, compared with a longer settlement period for most types of
securities, the futures markets can provide superior liquidity to the securities
markets. Nevertheless, there is no assurance a liquid secondary market will
exist for any particular futures contract at any particular time. In addition,
futures exchanges may establish daily price fluctuation limits for futures
contracts and may halt trading if a contract'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, it may be impossible for a Fund to enter into new
positions or close out existing positions. If the secondary market for a futures
contract is not liquid because of price fluctuation limits or otherwise, a Fund
may not be able to promptly liquidate unfavorable futures positions and
potentially could be required to continue to hold a futures position until the
delivery date, regardless of changes in its value. As a result, a Fund's access
to other assets held to cover its futures positions also could be impaired.



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     Options on Futures Contracts. Certain Funds may buy and write options on
futures contracts for hedging purposes. An option on a futures contract gives a
Fund the right (but not the obligation) to buy or sell a futures contract at a
specified price on or before a specified date. The purchase of a call option on
a futures contract is similar in some respects to the purchase of a call option
on an individual security. Depending on the pricing of the option compared to
either the price of the futures contract upon which it is based or the price of
the underlying instrument, ownership of the option may or may not be less risky
than ownership of the futures contract or the underlying instrument. As with the
purchase of futures contracts, a Fund may buy a call option on a futures
contract to hedge against a market advance, and a Fund might buy a put option on
a futures contract to hedge against a market decline.

     The writing of a call option on a futures contract constitutes a partial
hedge against declining prices of the security or foreign currency which is
deliverable under, or of the index comprising, the futures contract. If the
futures price at the expiration of the call option is below the exercise price,
a Fund will retain the full amount of the option premium which provides a
partial hedge against any decline that may have occurred in the Fund's portfolio
holdings. If a call option a Fund has written is exercised, the Fund will incur
a loss which will be reduced by the amount of the premium it received. Depending
on the degree of correlation between change in the value of its portfolio
securities and changes in the value of the futures positions, a Fund's losses
from existing options on futures may to some extent be reduced or increased by
changes in the value of portfolio securities.

     The purchase of a put option on a futures contract is similar in some
respects to the purchase of protective put options on portfolio securities. For
example, a Fund may buy a put option on a futures contract to hedge the Fund's
portfolio against the risk of falling prices.

     The amount of risk a Fund assumes when it buys an option on a futures
contract is the premium paid for the option plus related transaction costs. In
addition to the correlation risks discussed above, the purchase of an option
also entails the risk that changes in the value of the underlying futures
contract will not be fully reflected in the value of the options bought.

     Forward Foreign Currency Exchange Contracts. A forward contract is a
privately negotiated agreement between two parties in which one party is
obligated to deliver a stated amount of a stated asset at a specified time in
the future and the other party is obligated to pay a specified invoice amount
for the assets at the time of delivery. The Funds authorized to utilize forward
contracts currently intend that they will only use forward contracts or
commitments for hedging purposes and will only use forward foreign currency
exchange contracts, although a Fund may enter into additional forms of forward
contracts or commitments in the future if they become available and advisable in
light of the Funds' objectives and investment policies. Forward contracts
generally are negotiated in an interbank market conducted directly between
traders (usually large commercial banks) and their customers. Unlike futures
contracts, which are standardized exchange-traded contracts, forward contracts
can be specifically drawn to meet the needs of the parties that enter into them.
The parties to a forward contract may agree to offset or terminate the contract
before its maturity, or may hold the contract to maturity and complete the
contemplated exchange.

     The following discussion summarizes the relevant Funds' principal uses of
forward foreign currency exchange contracts ("forward currency contracts"). A
Fund may enter into forward currency contracts with stated contract values of up
to the value of the Fund's assets. A forward currency contract is an obligation
to buy or sell an amount of a specified currency for an agreed price (which may
be in U.S. dollars or a foreign currency) on a specified date. A Fund will
exchange foreign currencies for U.S. dollars and for other foreign currencies in
the normal course of business and may buy and sell currencies through forward
currency contracts in order to fix a price (in terms of a specified currency)
for securities it has agreed to buy or sell ("transaction hedge"). A Fund also
may hedge some or all of its investments denominated in foreign currency against
a decline in the value of that currency (or a proxy currency whose price
movements are expected to have a high degree of correlation with the currency
being hedged) relative to the U.S. dollar by entering into forward currency
contracts to sell an amount of that currency approximating the value of some or
all of its portfolio securities denominated in that currency ("position hedge")
or by participating in futures contracts (or options on such futures) with
respect to the currency. A Fund also may enter into a forward currency contract
with respect to a currency where the Fund is considering the purchase or sale of
investments denominated in that currency but has not yet selected the specific
investments ("anticipatory hedge").

     These types of hedging minimize the effect of currency appreciation as well
as depreciation, but do not eliminate fluctuations in the underlying U.S. dollar
equivalent value of the proceeds of or rates of return on a Fund's foreign
currency denominated portfolio securities. The matching of the increase in value
of a forward contract and the decline in the U.S. dollar equivalent value of the
foreign currency denominated asset that is the subject of the hedge generally
will not be


                                      -10-

<PAGE>   135

precise. Shifting a Fund's currency exposure from one foreign currency to
another limits that Fund's opportunity to profit from increases in the value of
the original currency and involves a risk of increased losses to such Fund if
its investment manager's projection of future exchange rates is inaccurate.
Unforeseen changes in currency prices may result in poorer overall performance
for a Fund than if it had not entered into such contracts.

     A Fund will cover outstanding forward currency contracts by maintaining
liquid portfolio securities denominated in the currency underlying the forward
contract or the currency being hedged. To the extent that a Fund is not able to
cover its forward currency positions with underlying portfolio securities, the
Funds' custodian will segregate cash or liquid assets having a value equal to
the aggregate amount of such Fund's commitments under forward contracts entered
into. If the value of the securities used to cover a position or the value of
segregated assets declines, the Fund must find alternative cover or segregate
additional cash or liquid assets on a daily basis so that the value of the
covered and segregated assets will be equal to the amount of a Fund's
commitments with respect to such contracts.

     While forward contracts are not currently regulated by the CFTC, the CFTC
may in the future assert authority to regulate forward contracts. In such event,
the Funds' ability to utilize forward contracts may be restricted. A Fund may
not always be able to enter into forward contracts at attractive prices and may
be limited in its ability to use these contracts to hedge Fund assets. In
addition, when a Fund enters into a privately negotiated forward contract with a
counterparty, the Fund assumes counterparty credit risk, that is, the risk that
the counterparty will fail to perform its obligations, in which case the Fund
could be worse off than if the contract had not been entered into. Unlike many
exchange-traded futures contracts and options on futures, there are no daily
price fluctuation limits with respect to forward contracts and other negotiated
or over-the-counter instruments, and with respect to those contracts, adverse
market movements could therefore continue to an unlimited extent over a period
of time. However, each Fund utilizing forward contracts intends to monitor its
investments closely and will attempt to renegotiate or close its positions when
the risk of loss to the Fund becomes unacceptably high.

     Options on Securities and Securities Indices. Certain Funds may buy or sell
put or call options and write covered call options on securities that are traded
on United States or foreign securities exchanges or over-the-counter. Buying an
option involves the risk that, during the option period, the price of the
underlying security will not increase (in the case of a call) to above the
exercise price, or will not decrease (in the case of a put) to below the
exercise price, in which case the option will expire without being exercised and
the holder would lose the amount of the premium. Writing a call option involves
the risk of an increase in the market value of the underlying security, in which
case the option could be exercised and the underlying security would then be
sold by a Fund to the option holder at a lower price than its current market
value and the Fund's potential for capital appreciation on the security would be
limited to the exercise price. Moreover, when a Fund writes a call option on a
securities index, the Fund bears the risk of loss resulting from imperfect
correlation between movements in the price of the index and the price of the
securities set aside to cover such position. Although they entitle the holder to
buy equity securities, call options to purchase equity securities do not entitle
the holder to dividends or voting rights with respect to the underlying
securities, nor do they represent any rights in the assets of the issuer of
those securities.

     A call option written by a Fund is "covered" if the Fund owns the
underlying security covered by the call or has an absolute and immediate right
to acquire that security without additional cash consideration (or for
additional cash consideration held in a segregated account by its custodian)
upon conversion or exchange of other securities held in its portfolio. A call
option is also deemed to be covered if a Fund holds a call on the same security
and in the same principal amount as the call written and the exercise price of
the call held (i) is equal to or less than the exercise price of the call
written or (ii) is greater than the exercise price of the call written if the
difference is maintained by the Fund in liquid assets in a segregated account
with its custodian.

     The writer of a call option may have no control when the underlying
securities must be sold. Whether or not an option expires unexercised, the
writer retains the amount of the premium. This amount, of course, may, in the
case of a covered call option, be offset by a decline in the market value of the
underlying security during the option period.

     The writer of an exchange-traded call option that wishes to terminate its
obligation may effect a "closing purchase transaction." This is accomplished by
buying an option of the same series as the option previously written. The effect
of the purchase is that the writer's position will be cancelled by the clearing
corporation. If a Fund desires to sell a particular security from the Fund's
portfolio on which the Fund has written a call option, the Fund will effect a
closing transaction prior to or concurrent with the sale of the security.
However, a writer may not effect a closing purchase transaction after being
notified of the exercise of an option. An investor who is the holder of an
exchange-traded option may liquidate its position by effecting a "closing sale
transaction." This is accomplished by selling an option of the same series as
the option previously bought. There is no guarantee that either a closing
purchase or a closing sale transaction can be effected.



                                      -11-

<PAGE>   136

     A Fund will realize a profit from a closing transaction if the price of the
purchase transaction is less than the premium received from writing the option
or the price received from a sale transaction is more than the premium paid to
buy the option; the Fund will realize a loss from a closing transaction if the
price of the purchase transaction is more than the premium received from writing
the option or the price received from a sale transaction is less than the
premium paid to buy the option. Because increases in the market price of a call
option will generally reflect increases in the market price of the underlying
security, any loss resulting from the repurchase of a call option is likely to
be offset in whole or in part by appreciation of the underlying security owned
by the Fund.

     An option position may be closed out only where there exists a secondary
market for an option of the same series. If a secondary market does not exist,
it might not be possible to effect closing transactions in particular options
with the result that a Fund would have to exercise the options in order to
realize any profit. If a Fund is unable to effect a closing purchase transaction
in a secondary market, it will not be able to sell the underlying security until
the option expires or the Fund delivers the underlying security upon exercise.
Reasons for the absence of a liquid secondary market may include the following:
(i) there may be insufficient trading interest in certain options, (ii)
restrictions may be imposed by a national securities exchange on which the
option is traded ("Exchange") on opening or closing transactions or both, (iii)
trading halts, suspensions or other restrictions may be imposed with respect to
particular classes or series of options or underlying securities, (iv) unusual
or unforeseen circumstances may interrupt normal operations on an Exchange, (v)
the facilities of an Exchange or of the Options Clearing Corporation ("OCC") may
not at all times be adequate to handle current trading volume, or (vi) one or
more Exchanges could, for economic or other reasons, decide or be compelled at
some future date to discontinue the trading of options (or a particular class or
series of options), in which event the secondary market on that Exchange (or in
that class or series of options) would cease to exist, although outstanding
options on that Exchange that had been issued by the OCC as a result of trades
on that Exchange would continue to be exercisable in accordance with their
terms.

     In addition, when a Fund enters into an over-the-counter option contract
with a counterparty, the Fund assumes counterparty credit risk, that is, the
risk that the counterparty will fail to perform its obligations, in which case
the Fund could be worse off than if the contract had not been entered into.

     An option on a securities index is similar to an option on a security
except that, rather than the right to take or make delivery of a security at a
specified price, an option on a securities index gives the holder the right to
receive, on exercise of the option, an amount of cash if the closing level of
the securities index on which the option is based is greater than, in the case
of a call, or less than, in the case of a put, the exercise price of the option.

     A Fund may buy call options on securities or securities indices to hedge
against an increase in the price of a security or securities that the Fund may
buy in the future. The premium paid for the call option plus any transaction
costs will reduce the benefit, if any, realized by a Fund upon exercise of the
option, and, unless the price of the underlying security or index rises
sufficiently, the option may expire and become worthless to the Fund. A Fund may
buy put options to hedge against a decline in the value of a security or its
portfolio. The premium paid for the put option plus any transaction costs will
reduce the benefit, if any, realized by a Fund upon exercise of the option, and,
unless the price of the underlying security or index declines sufficiently, the
option may expire and become worthless to the Fund.

     An example of a hedging transaction using an index option would be if a
Fund were to purchase a put on a stock index, in order to protect the Fund
against a decline in the value of all securities held by it to the extent that
the stock index moves in a similar pattern to the prices of the securities held.
While the correlation between stock indices and price movements of the stocks in
which the Funds will generally invest may be imperfect, the Funds utilizing put
options expect, nonetheless, that the use of put options that relate to such
indices will, in certain circumstances, protect against declines in values of
specific portfolio securities or the Fund's portfolio generally. Although the
purchase of a put option may partially protect a Fund from a decline in the
value of a particular security or its portfolio generally, the cost of a put
will reduce the potential return on the security or the portfolio.

     MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The Berger Balanced Fund may
invest in certain mortgage-backed and asset-backed securities. Mortgage-backed
securities are securities that directly or indirectly represent a participation
in, or are secured by and payable from, mortgage loans secured by real property.
Asset-backed securities are similar, except that they are backed by assets other
than mortgages, such as motor vehicle installment sales contracts, installment
loan contracts, leases of various types of real and personal property and
receivables from revolving credit agreements (credit cards).


                                      -12-

<PAGE>   137

     The primary risk of any mortgage-backed or asset-backed security is the
uncertainty of the timing of cash flows from the assets underlying the
securities. See the subheading "Special Risks of Mortgage-Backed Securities"
below for more information about prepayment and extension risks. Also, see the
subheading "Asset-Backed Securities" below for more information about
asset-backed securities.

     There are currently three basic types of mortgage-backed securities: (i)
those issued or guaranteed by the United States Government or one of its
agencies or instrumentalities, such as the Government National Mortgage
Association (GNMA), the Federal National Mortgage Association (FNMA) and the
Federal Home Loan Mortgage Corporation (FHLMC); (ii) those issued by private
issuers that represent an interest in or are collateralized by mortgage-backed
securities issued or guaranteed by the United States Government or one of its
agencies or instrumentalities; and (iii) those issued by private issuers that
represent an interest in or are collateralized by whole mortgage loans or
mortgage-backed securities without a government guarantee but usually having
some form of private credit enhancement.

     U.S. Government Mortgage-Backed Securities. The Fund may invest in
mortgage-backed securities issued or guaranteed by GNMA, FNMA and FHLMC. GNMA
certificates are backed by the "full faith and credit" of the United States.
FNMA and FHLMC certificates are not backed by the full faith and credit of the
United States, but the issuing agency or instrumentality has the right to
borrow, to meet its obligations, from an existing line of credit with the U.S.
Treasury. The U.S. Treasury has no legal obligation to provide such line of
credit and may choose not to do so. Each of GNMA, FNMA and FHLMC guarantee
timely distribution of interest to certificate holders. GNMA and FNMA also
guarantee timely distribution of scheduled principal payments. FHLMC generally
guarantees only the ultimate collection of principal of the underlying mortgage
loans.

     Collateralized Mortgage Obligations and Multiclass Pass-Through Securities.
The Berger Balanced Fund may also invest in collateralized mortgage obligations
(CMOs). CMOs are debt obligations collateralized by mortgage loans or mortgage
pass-through securities. Typically, CMOs are collateralized by GNMA, FNMA or
FHLMC certificates, but also may be collateralized by whole loans or private
mortgage pass-through securities (such collateral is referred to in this section
as Mortgage Assets). Multiclass pass-through securities are equity interests in
a trust composed of Mortgage Assets. Payments of principal of and interest on
the Mortgage Assets, and any reinvestment income thereon, provide the funds to
pay debt service on the CMOs or make scheduled distributions on the multiclass
pass-through securities. CMOs may be issued by agencies or instrumentalities of
the U. S. Government, or by private originators of, or investors in, mortgage
loans, including savings and loan associations, mortgage banks, commercial
banks, investment banks and special purpose subsidiaries of the foregoing. The
Fund may invest in CMOs issued by private entities only if the CMOs are rated at
least investment grade (at least BBB by S&P or Baa by Moody's) or, if unrated,
are determined to be of comparable quality.

     In a CMO, a series of bonds or certificates is issued in multiple classes.
Each class of CMOs, often referred to as a "tranche," is issued at a specific
fixed or floating coupon rate and has a stated maturity or final distribution
date. Interest is paid or accrues on all classes of the CMOs on a monthly,
quarterly or semiannual basis. Certain CMOs may have variable or floating
interest rates. The principal of and interest on the Mortgage Assets may be
allocated among the several classes of a CMO series in a number of different
ways.

     Generally, the purpose of the allocation of the cash flow of a CMO to the
various classes is to obtain a more predictable cash flow to the individual
tranches than exists with the underlying collateral of the CMO. As a general
rule, the more predictable the cash flow is on a CMO tranche, the lower the
anticipated yield will be on that tranche at the time of issuance relative to
prevailing market yields on mortgage-backed securities. As part of the process
of creating more predictable cash flows on most of the tranches in a series of
CMOs, one or more tranches generally must be created that absorb most of the
volatility in the cash flows on the underlying mortgage loans. The yields on
these tranches may be higher than prevailing market yields on mortgage-backed
securities with similar maturities. As a result of the uncertainty of the cash
flows of these tranches, the market prices of and yield on these tranches
generally are more volatile.

     The Fund also may invest in parallel pay CMOs and Planned Amortization
Class CMOs (PAC Bonds). Parallel pay CMOs are structured to provide payments of
principal on each payment date to more than one class. These simultaneous
payments are taken into account in calculating the stated maturity date or final
distribution date of each class, which, as with other CMO structures, must be
retired by its stated maturity date or final distribution date but may be
retired earlier. PAC Bonds generally require payments of a specified amount of
principal on each payment date. PAC Bonds always are parallel pay CMOs with the
required principal payment on such securities having the highest priority after
interest has been paid to all classes.


                                      -13-

<PAGE>   138

     The Fund may not invest in "stripped" mortgage-backed securities
(interest-only securities (IOs) or principal-only securities (POs)) or in
mortgage-backed securities known as "inverse floaters."

     Adjustable Rate Mortgages. The Berger Balanced Fund may also invest in
adjustable rate mortgage securities (ARMs), which are pass-through mortgage
securities collateralized by mortgages with adjustable rather than fixed rates.
ARMs, like fixed rate mortgages, have a specified maturity date, and the
principal amount of the mortgage is repaid over the life of the mortgage. Unlike
fixed rate mortgages, the interest rate on ARMs is adjusted at regular intervals
based on a specified, published interest rate "index" such as a Treasury rate
index. The new rate is determined by adding a specific interest amount, the
"margin," to the interest rate of the index. Investment in ARM securities allows
the Fund to participate in changing interest rate levels through regular
adjustments in the coupons of the underlying mortgages, resulting in more
variable current income and lower price volatility than longer-term fixed rate
mortgage securities. ARM securities are a less effective means of locking in
long-term rates than fixed rate mortgages since the income from adjustable rate
mortgages will increase during periods of rising interest rates and decline
during periods of falling rates.

     Private Mortgage Pass-Through Securities. Private mortgage pass-through
securities are structured similarly to the GNMA, FNMA and FHLMC mortgage
pass-through securities and are issued by originators of and investors in
mortgage loans, including depository institutions, mortgage banks, investment
banks and special purpose subsidiaries of the foregoing. These securities
usually are backed by a pool of conventional fixed rate or adjustable rate
mortgage loans. Since private mortgage pass-through securities typically are not
guaranteed by an entity having the credit status of GNMA, FNMA and FHLMC, these
securities generally are structured with one or more types of credit enhancement
to make them more secure, which may be through guarantees, insurance policies or
letters of credit obtained by the issuer or sponsor from third parties, through
various means of structuring the transaction or through a combination of those
approaches. The Fund may invest in private mortgage pass-through securities only
if they are rated AA/Aa (S&P/Moody's) or above.

     Special Risks of Mortgage-Backed Securities. Mortgage-backed securities
have certain different characteristics than traditional debt securities. As a
result of the risks associated with these securities, the Fund could realize a
loss by investing in them, regardless of their rating or their credit
enhancement features.

     Among the major differences between mortgage-backed securities and
traditional debt securities are that on mortgage-backed securities, interest and
principal payments are made more frequently, usually monthly, and principal may
be prepaid at any time because the underlying mortgage loans or other assets
generally may be prepaid at any time, usually without penalty. Changes in the
rate of prepayments will generally affect the yield to maturity of the security.
Moreover, when the holder of the security attempts to reinvest prepayments of
principal and interest, it may receive a rate of interest which is higher or
lower than the rate on the mortgage-backed securities originally held. To the
extent that mortgage-backed securities are purchased at a premium, mortgage
foreclosures and principal prepayments may result in a loss to the extent of the
premium paid. If such securities are bought at a discount, both scheduled
payments of principal and unscheduled prepayments will increase current and
total returns and will accelerate the recognition of income which, when
distributed to shareholders, will be taxable as ordinary income.

     Mortgage-backed securities, like all fixed-income securities, generally
decrease in value as a result of increases in interest rates. In addition,
although generally the value of fixed-income securities increases during periods
of falling interest rates and decreases during periods of rising interest rates,
as a result of prepayments and other factors, this is not always the case with
respect to mortgage-backed securities.

     Although the extent of prepayments on a pool of mortgage loans depends on
various economic and other factors, as a general rule, prepayments on fixed rate
mortgage loans will increase during a period of falling interest rates and
decrease during a period of rising interest rates. Accordingly, during a period
of declining rates, the Fund is likely to have greater amounts to reinvest as a
result of prepayments and is likely to have to reinvest those amounts at lower
interest rates than during a period of rising interest rates. Mortgage-backed
securities generally decrease in value as a result of increases in interest
rates and may benefit less than other fixed-income securities from declining
interest rates because of the risk of prepayment.

     The Fund may invest in mortgage derivative securities, such as CMOs, the
average life of which is determined using mathematical models that incorporate
prepayment assumptions and other factors that involve estimates of future
economic and market conditions. These estimates may vary from actual future
results, particularly during periods of extreme market volatility. In addition,
under certain market conditions, the average weighted life of mortgage
derivative securities may not accurately reflect the price volatility of such
securities. For example, in periods of supply and demand imbalances in the



                                      -14-
<PAGE>   139

market for such securities and/or in periods of sharp interest rate movements,
the prices of mortgage derivative securities may fluctuate to a greater extent
than would be expected from interest rate movements alone.

     The Fund's investments in mortgage derivative securities also subject the
Fund to extension risk. Extension risk is the possibility that rising interest
rates may cause prepayments to occur at a slower than expected rate. This
particular risk may effectively change a security which was considered short or
intermediate-term at the time of purchase into a long-term security. Long-term
securities generally fluctuate more widely in response to changes in interest
rates than short or intermediate-term securities.

     In addition, CMOs and other mortgage-backed securities issued by private
entities are not U.S. government securities and are not guaranteed by any
government agency, although the pool of securities underlying a privately issued
mortgage-backed security may be subject to a guarantee. Therefore, if the
collateral securing a privately issued mortgage-backed security held by the
Fund, in addition to any third party credit support or guarantees, is
insufficient to make payment, the Fund could sustain a loss on its investment in
that security. However, as stated above, the Fund will invest in CMOs and other
mortgage-backed securities issued by private entities only if they are rated
AA/Aa (S&P/Moody's) or above.

     Asset-Backed Securities. The Berger Balanced Fund may also invest in
asset-backed securities. Asset-backed securities are securities that represent
direct or indirect participation in, or are secured by and payable from, assets
other than mortgage-backed assets, such as motor vehicle installment sales
contracts, installment loan contracts, leases of various types of real and
personal property and receivables from revolving credit agreements (credit
cards). Asset-backed securities have yield characteristics similar to those of
mortgage-backed securities and are subject to many of the same risks. See the
subheading "Special Risks of Mortgage-Backed Securities" above for a discussion
of those risks. In addition, asset-backed securities involve certain risks that
are not posed by mortgage-backed securities, since asset-backed securities do
not usually contain the complete benefit of a security interest in the related
collateral. For example, credit card receivables generally are unsecured and the
debtors are entitled to the protection of a number of state and federal consumer
credit laws, including the bankruptcy laws, some of which may reduce the ability
to obtain full payment. In the case of automobile receivables, due to various
legal and economic factors, proceeds for repossessed collateral may not always
be sufficient to support payments on these securities.

     New instruments and variations of existing mortgage-backed securities and
asset-backed securities continue to be developed. The Fund may invest in any
such instruments or variations as may be developed, to the extent consistent
with its investment objective and policies and applicable legal requirements.


     TEMPORARY DEFENSIVE MEASURES. Each of the Funds (except the Berger
Information Technology Fund and the Berger International Fund) may increase its
investment in government securities, and other short-term, interest-bearing
securities without regard to the Fund's otherwise applicable percentage limits,
policies or its normal investment emphasis, when its advisor or sub-advisor
believes market conditions warrant a temporary defensive position. Taking larger
positions in such short-term investments may serve as a means of preserving
capital in unfavorable market conditions. When in a defensive position, a Fund
could miss the opportunity to participate in any stock or bond market advances
that occur during those periods, which the Fund might have been able to
participate in if it had remained more fully invested.


     NON-DIVERSIFICATION. The Berger Select Fund is classified as a
"non-diversified" Fund under the Investment Company Act of 1940, which means
that the Fund is not limited by that Act in the proportion of its assets that it
may invest in the securities of a single issuer. The Fund's net asset value may
be more volatile than that of a more-widely diversified fund because the Fund
invests more of its assets in a smaller number of issuers. Consequently, the
Fund may be more vulnerable to any single economic, political or regulatory
occurrence, and the gains or losses on a single stock will have a greater impact
on the Fund's net asset value.

     However, the Fund intends to conduct its operations so as to qualify to be
taxed as a "regulated investment company" under the Internal Revenue Code, which
will generally relieve the Fund of any liability for federal income tax to the
extent its earnings are distributed to shareholders. See Section 9--Income
Dividends, Capital Gains Distributions and Tax Treatment below. To qualify as a
regulated investment company, among other requirements, the Fund will limit its
investments


                                      -15-

<PAGE>   140

so that, at the close of each quarter of the taxable year, (i) not more than 25%
of the market value of the Fund's total assets will be invested in securities of
a single issuer, and (ii) with respect to 50% of the market value of its total
assets, not more than 5% of the market value of its total assets will be
invested in the securities of a single issuer and the Fund will not own more
than 10% of the outstanding voting securities of a single issuer. These
limitations do not apply to U.S. government securities.

     PORTFOLIO TURNOVER. The portfolio turnover rates of each of the Funds are
shown in the Financial Highlights tables included in the Prospectus. The annual
portfolio turnover rates of some of the Funds at times have exceeded 100%. A
100% annual turnover rate results, for example, if the equivalent of all of the
securities in the Fund's portfolio are replaced in a period of one year. The
Funds anticipate that their portfolio turnover rates in future years may exceed
100%, and investment changes will be made whenever management deems them
appropriate even if this results in a higher portfolio turnover rate. In
addition, portfolio turnover for all the Funds may increase as a result of large
amounts of purchases and redemptions of shares of the Funds due to economic,
market or other factors that are not within the control of management.

     Higher portfolio turnover will necessarily result in correspondingly higher
brokerage costs for the Funds. The existence of a high portfolio turnover rate
has no direct relationship to the tax liability of a Fund, although sales of
certain stocks will lead to realization of gains, and, possibly, increased
taxable distributions to shareholders. The Funds' brokerage policy is discussed
further below under Section 6--Brokerage Policy, and additional information
concerning income taxes is located under Section 9--Income Dividends, Capital
Gains Distributions and Tax Treatment.

     The variation in the portfolio turnover rate for the Berger Select Fund's
two most recently completed fiscal years is due to the increased size of the
Fund and a portfolio manager change.

2.   INVESTMENT RESTRICTIONS

     As indicated in the Prospectus, the investment objective of each of the
Funds is as follows:


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<PAGE>   141


<TABLE>
<CAPTION>
              FUND                                           INVESTMENT OBJECTIVE
              ---------------------------------------------- --------------------------------------------
<S>                                                          <C>
              Berger Information Technology Fund             Capital appreciation
              ---------------------------------------------- --------------------------------------------
              Berger New Generation Fund                     Capital appreciation
              ---------------------------------------------- --------------------------------------------
              Berger Select Fund                             Capital appreciation
              ---------------------------------------------- --------------------------------------------
              Berger Small Company Growth Fund               Capital appreciation
              ---------------------------------------------- --------------------------------------------
              Berger Mid Cap Growth Fund                     Capital appreciation
              ---------------------------------------------- --------------------------------------------
              Berger Mid Cap Value Fund                      Capital appreciation
              ---------------------------------------------- --------------------------------------------
              Berger Growth Fund                             Long-term capital appreciation
              ---------------------------------------------- --------------------------------------------
              Berger International Fund                      Long-term capital appreciation
              ---------------------------------------------- --------------------------------------------
              Berger Large Cap Growth Fund                   Capital appreciation
              ---------------------------------------------- --------------------------------------------
              Berger Balanced Fund                           Capital appreciation and current income
              ---------------------------------------------- --------------------------------------------
</TABLE>



     The investment objective of the Berger Information Technology Fund, the
Berger New Generation Fund, the Berger Select Fund, the Berger Small Company
Growth Fund, the Berger Mid Cap Growth Fund, the Berger Mid Cap Value Fund, the
Berger Growth Fund, the Berger International Fund and the Berger Balanced Fund,
and the primary investment objective of the Berger Large Cap Growthand Fund, are
considered fundamental, meaning that they cannot be changed without a
shareholders' vote.



                                      -17-
<PAGE>   142



There can be no assurance that any of the Funds' investment objectives will be
realized.

     Effective January 2001, the Trustees of the Berger Growth and Income Fund
approved a change in the name and non-fundamental investment strategies of the
Fund from that of a Growth and Income Fund to a Large Cap Growth Fund, and in
doing so eliminated the Fund's secondary investment objective.


     Each Fund has also adopted certain investment policies, strategies,
guidelines and procedures in pursuing its objective. These may be changed
without a shareholder vote. The principal policies and strategies used by the
Funds are described in the Prospectus.

     In addition, each Fund has adopted certain fundamental and non-fundamental
restrictions on its investments and other activities, which are listed below.
Fundamental restrictions may not be changed without the approval of (i) 67% or
more of the voting securities of the Fund present at a meeting of shareholders
thereof if the holders of more than 50% of the outstanding voting securities are
present or represented by proxy, or (ii) more than 50% of the outstanding voting
securities of the Fund. Non-fundamental restrictions may be changed in the
future by action of the directors or trustees without shareholder vote.

BERGER INFORMATION TECHNOLOGY FUND, BERGER NEW GENERATION FUND, BERGER SELECT
FUND, BERGER SMALL COMPANY GROWTH FUND(R), BERGER MID CAP GROWTH FUND, THE
BERGER MID CAP VALUE FUND AND BERGER BALANCED FUND


     Except as noted, the following fundamental restrictions apply to each of
the Berger Information Technology Fund, the Berger New Generation Fund, the
Berger Select Fund, the Berger Small Company Growth Fund, the Berger Mid Cap
Growth Fund, the Berger Mid Cap Value Fund and the Berger Balanced Fund. The
Fund may not:


     1. (Does not apply to the Berger Select Fund) With respect to 75% of the
Fund's total assets, purchase the securities of any one issuer (except U.S.
government securities) if immediately after and as a result of such purchase (a)
the value of the holdings of the Fund in the securities of such issuer exceeds
5% of the value of the Fund's total assets or (b) the Fund owns more than 10% of
the outstanding voting securities of such issuer.

     2. Invest in any one industry (other than U.S. government securities) 25%
or more (more than 25%, in the case of the Berger Small Company Growth Fund) of
the value of its total assets at the time of such investment.

     3. Borrow money, except from banks for temporary or emergency purposes in
amounts not to exceed 25% of the Fund's total assets (including the amount
borrowed) taken at market value, nor pledge, mortgage or hypothecate its assets,
except to secure permitted indebtedness and then only if such pledging,
mortgaging or hypothecating does not exceed 25% of the Fund's total assets taken
at market value. When borrowings exceed 5% of the Fund's total assets, the Fund
will not purchase portfolio securities.

     4. Act as a securities underwriter (except to the extent the Fund may be
deemed an underwriter under the Securities Act of 1933 in disposing of a
security), issue senior securities (except to the extent permitted under the
Investment Company Act of 1940), invest in real estate (although it may purchase
shares of a real estate investment trust), or invest in commodities or commodity
contracts except financial futures transactions, futures contracts on securities
and securities indices and options on such futures, forward foreign currency
exchange contracts, forward commitments or securities index put or call options.

     5. Make loans, except that the Fund may enter into repurchase agreements
and may lend portfolio securities in accordance with the Fund's investment
policies. The Fund does not, for this purpose, consider the purchase of all or a
portion of an issue of publicly distributed bonds, bank loan participation
agreements, bank certificates of deposit, bankers' acceptances, debentures or
other securities, whether or not the purchase is made upon the original issuance
of the securities, to be the making of a loan.

     In applying the industry concentration investment restriction (no. 2
above), each Fund uses the industry groups used in the Data Monitor Portfolio
Monitoring System of William O'Neil & Co. Incorporated. Further, in implementing
that


                                      -18-

<PAGE>   143


restriction, the Berger Small Company Growth Fund intends not to invest in any
one industry 25% or more of the value of its total assets at the time of such
investment.

     The trustees have adopted additional non-fundamental investment
restrictions for the Berger Information Technology Fund, the Berger New
Generation Fund, the Berger Select Fund, the Berger Small Company Growth Fund,
the Berger Mid Cap Growth Fund, the Berger Mid Cap Value Fund and the Berger
Balanced Fund. These limitations may be changed by the trustees without a
shareholder vote. The non-fundamental investment restrictions include the
following:

     1. The Fund may not purchase securities on margin from a broker or dealer,
except that the Fund may obtain such short-term credits as may be necessary for
the clearance of transactions, and may not make short sales of securities,
except that the Fund may make short sales if, at the time of the short sale, the
Fund owns or has the right to acquire an equivalent kind and amount of the
security being sold short at no additional cost (i.e., short sales "against the
box"). This limitation shall not prohibit or restrict the Fund from entering
into futures, forwards and options contracts or from making margin payments and
other deposits in connection therewith.

     2. The Fund may not purchase the securities of any other investment
company, except by purchase in the open market involving no commission or profit
to a sponsor or dealer (other than the customary broker's commission).

     3. The Fund may not invest in companies for the purposes of exercising
control of management.

     4. The Fund may not purchase any security, including any repurchase
agreement maturing in more than seven days, which is not readily marketable, if
more than 15% of the net assets of the Fund, taken at market value at the time
of purchase would be invested in such securities.

     5. Only for the purpose of hedging, the Fund may purchase and sell
financial futures, forward foreign currency exchange contracts and put and call
options, but no more than 5% of the Fund's net assets at the time of purchase
may be invested in initial margins for financial futures transactions and
premiums for options. The Fund may only write call options that are covered and
only up to 25% of the Fund's total assets.

     6. The Fund may not purchase or sell securities on a when-issued or delayed
delivery basis, if as a result more than 5% of its total assets taken at market
value at the time of purchase would be invested in such securities.





                                      -19-

<PAGE>   144


BERGER GROWTH FUND(SM)  AND BERGER LARGE CAP GROWTH FUND(R)

     The following fundamental restrictions apply to each of the Berger Growth
Fund and the Berger Large Cap Growthand Fund. The Fund may not:


     1. Purchase the securities of any one issuer (except U.S. Government
securities) if immediately after and as a result of such purchase (a) the value
of the holdings of the Fund in the securities of such issuer exceeds 5% of the
value of the Fund's total assets or (b) the Fund owns more than 10% of the
outstanding voting securities or of any class of securities of such issuer.

     2. Purchase securities of any company with a record of less than three
years' continuous operation (including that of predecessors) if such purchase
would cause the Fund's investments in all such companies taken at cost to exceed
5% of the value of the Fund's total assets.

     3. Invest in any one industry more than 25% of the value of its total
assets at the time of such investment.

     4. Make loans, except that the Fund may enter into repurchase agreements in
accordance with the Fund's investment policies. The Fund does not, for this
purpose, consider the purchase of all or a portion of an issue of publicly
distributed bonds, bank loan participation agreements, bank certificates of
deposit, bankers' acceptances, debentures or other securities, whether or not
the purchase is made upon the original issuance of the securities, to be the
making of a loan.

     5. Borrow in excess of 5% of the value of its total assets, or pledge,
mortgage, or hypothecate its assets taken at market value to an extent greater
than 10% of the Fund's total assets taken at cost (and no borrowing may be
undertaken except from banks as a temporary measure for extraordinary or
emergency purposes). This limitation shall not prohibit or restrict short sales
or deposits of assets to margin or guarantee positions in futures, options or
forward contracts, or the segregation of assets in connection with any of such
transactions.

     6. Purchase or retain the securities of any issuer if those officers and
directors of the Fund or its investment advisor owning individually more than
1/2 of 1% of the securities of such issuer together own more than 5% of the
securities of such issuer.

     7. Purchase the securities of any other investment company, except by
purchase in the open market involving no commission or profit to a sponsor or
dealer (other than the customary broker's commission).

     8. Act as a securities underwriter (except to the extent the Fund may be
deemed an underwriter under the Securities Act of 1933 in disposing of a
security) or invest in real estate (although it may purchase shares of a real
estate investment trust), or invest in commodities or commodity contracts
except, only for the purpose of hedging, (i) financial futures transactions,
including futures contracts on securities, securities indices and foreign
currencies, and options on any such futures, (ii) forward foreign currency
exchange contracts and other forward commitments and (iii) securities index put
or call options.

     9. Participate on a joint or joint and several basis in any securities
trading account.

     10. Invest in companies for the purposes of exercising control of
management.

     In applying the industry concentration investment restriction (no. 3
above), the Funds use the industry groups used in the Data Monitor Portfolio
Monitoring System of William O'Neil & Co. Incorporated. Further, in implementing
that

                                      -20-



<PAGE>   145
restriction, each Fund intends not to invest in any one industry 25% or more of
the value of its total assets at the time of such investment.


                  The directors have adopted additional non-fundamental
investment restrictions for the Berger Growth Fund and the Berger Large Cap
Growthand Fund. These limitations may be changed by the directors without a
shareholder vote. The non-fundamental investment restrictions include the
following:


                  1. Only for the purpose of hedging, the Fund may purchase and
sell financial futures, forward foreign currency exchange contracts and put and
call options, but no more than 5% of the Fund's net assets at the time of
purchase may be invested in initial margins for financial futures transactions
and premiums for options. The Fund may only write call options that are covered
and only up to 25% of the Fund's total assets.

                  2. The Fund may not purchase or sell securities on a
when-issued or delayed delivery basis, if as a result more than 5% of its total
assets taken at market value at the time of purchase would be invested in such
securities.

                  3. The Fund may not purchase any security, including any
repurchase agreement maturing in more than seven days, which is not readily
marketable, if more than 15% of the net assets of the Fund, taken at market
value at the time of purchase would be invested in such securities.

                  4. The Fund may not purchase securities on margin from a
broker or dealer, except that the Fund may obtain such short-term credits as may
be necessary for the clearance of transactions, and may not make short sales of
securities, except that the Fund may make short sales if, at the time of the
short sale, the Fund owns or has the right to acquire an equivalent kind and
amount of the security being sold short at no additional cost (i.e., short sales
"against the box"). This limitation shall not prohibit or restrict the Fund from
entering into futures, forwards and options contracts or from making margin
payments and other deposits in connection therewith.


BERGER INTERNATIONAL FUND


                  The Fund has adopted the investment policy that it may,
notwithstanding any other fundamental or non-fundamental investment policy or
restriction, invest all of its investable assets in the securities of another
open-end investment company or series thereof with substantially the same
investment objective, policies and limitations as the Fund. This arrangement is
commonly referred to as a master/feeder.


                  All other fundamental and non-fundamental investment policies
and restrictions of the Berger International Fund and the Berger International
Portfolio (the "Portfolio") are identical. Therefore, although the following
investment restrictions refer to the Portfolio, they apply equally to the Fund.


                  The Portfolio has adopted certain fundamental restrictions on
its investments and other activities, and none of these restrictions may be
changed without the approval of (i) 67% or more of the voting securities of the
Portfolio present at a meeting of shareholders thereof if the holders of more
than 50% of the outstanding voting securities are present or represented by
proxy, or (ii) more than 50% of the outstanding voting securities of the
Portfolio. Whenever the Fund is requested to vote on a change in the investment
restrictions of the Portfolio, the Fund will hold a meeting of its shareholders
and will cast its votes as instructed by the shareholders.

                  The following fundamental restrictions apply to the Portfolio.
The Portfolio may not:

                  1. With respect to 75% of the Portfolio's total assets,
purchase the securities of any one issuer (except U.S. government securities) if
immediately after and as a result of such purchase (a) the value of the holdings
of the Portfolio in the securities of such issuer exceeds 5% of the value of the
Portfolio's total assets or (b) the Portfolio owns more than 10% of the
outstanding voting securities of such issuer.

                  2. Invest in any one industry (other than U.S. government
securities) 25% or more of the value of its total assets at the time of such
investment.

                  3. Borrow money, except from banks for temporary or emergency
purposes in amounts not to exceed 25% of the Portfolio's total assets (including
the amount borrowed) taken at market value, nor pledge, mortgage or hypothecate



                                      -21-
<PAGE>   146

its assets, except to secure permitted indebtedness and then only if such
pledging, mortgaging or hypothecating does not exceed 25% of the Portfolio's
total assets taken at market value. When borrowings exceed 5% of the Portfolio's
total assets, the Portfolio will not purchase portfolio securities.

                  4. Act as a securities underwriter (except to the extent the
Portfolio may be deemed an underwriter under the Securities Act of 1933 in
disposing of a security), issue senior securities (except to the extent
permitted under the Investment Company Act of 1940), invest in real estate
(although it may purchase shares of a real estate investment trust), or invest
in commodities or commodity contracts except financial futures transactions,
futures contracts on securities and securities indices and options on such
futures, forward foreign currency exchange contracts, forward commitments or
securities index put or call options.

                  5. Make loans, except that the Portfolio may enter into
repurchase agreements and may lend portfolio securities in accordance with the
Portfolio's investment policies. The Portfolio does not, for this purpose,
consider the purchase of all or a portion of an issue of publicly distributed
bonds, bank loan participation agreements, bank certificates of deposit,
bankers' acceptances, debentures or other securities, whether or not the
purchase is made upon the original issuance of the securities, to be the making
of a loan.

                  In applying the industry concentration investment restriction
(no. 2 above), the Portfolio uses the industry groups designated by the
Financial Times World Index Service.

                  The trustees have adopted additional non-fundamental
investment restrictions for the Portfolio. These limitations may be changed by
the trustees without a shareholder vote. The non-fundamental investment
restrictions include the following:





                  1. The Portfolio may not purchase securities on margin from a
broker or dealer, except that the Portfolio may obtain such short-term credits
as may be necessary for the clearance of transactions, and may not make short
sales of securities. This limitation shall not prohibit or restrict the
Portfolio from entering into futures, forwards and options contracts or from
making margin payments and other deposits in connection therewith.

                  2. The Portfolio may not purchase the securities of any other
investment company, except by purchase in the open market involving no
commission or profit to a sponsor or dealer (other than the customary broker's
commission).

                  3. The Portfolio may not invest in companies for the purposes
of exercising control of management.

                  4. The Portfolio may not purchase any security, including any
repurchase agreement maturing in more than seven days, which is not readily
marketable, if more than 15% of the net assets of the Portfolio, taken at market
value at the time of purchase would be invested in such securities.

                  5. The Portfolio may not enter into any futures, forwards or
options, except that only for the purpose of hedging, the Portfolio may enter
into forward foreign currency exchange contracts with stated contract values of
up to the value of the Portfolio's assets.

                  6. The Portfolio may not purchase or sell securities on a
when-issued or delayed delivery basis, if as a result more than 5% of its net
assets taken at market value at the time of purchase would be invested in such
securities.


3.                MANAGEMENT OF THE FUNDS

                  Each Fund is supervised by a board of directors or trustees
who are responsible for major decisions about the Funds' policies and overall
Fund oversight. Each Fund's board hires the companies that run day-to-day Fund
operations, such as the investment advisor, administrator, transfer agent and
custodian.



                                      -22-
<PAGE>   147

                  The directors or trustees and executive officers of each of
the Funds are listed below, together with information which includes their
principal occupations during the past five years and other principal business
affiliations.


      MICHAEL OWEN, c/o Zayed University, Post Office Box 19282, Dubai, United
           Arab Emirates DOB: 1937. Dean, since _______ 2000, of Zayed
           University. Formerly self-employed as a financial and management
           consultant, and in real estate development from June 1999 to _____
           2000. From 1993 to June 1999, Dean, and from 1989 to 1993, a member
           of the Finance faculty, of the College of Business, Montana State
           University. Formerly (1976-1989), Chairman and Chief Executive
           Officer of Royal Gold, Inc. (mining). Chairman of the Board of Berger
           Growth Fund and Berger Large Cap Growthand Fund. Chairman of the
           Trustees of Berger Investment Portfolio Trust, Berger Institutional
           Products Trust, Berger Worldwide Funds Trust, Berger Worldwide
           Portfolios Trust and Berger Omni Investment Trust.

*    JACK R. THOMPSON, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1949. President and a director since May 1999 (Executive Vice
           President from February 1999 to May 1999) of Berger Growth Fund and
           Berger Large Cap Growthand Fund. President and a trustee since May
           1999 (Executive Vice President from February 1999 to May 1999) of
           Berger Investment Portfolio Trust, Berger Institutional Products
           Trust, Berger Worldwide Funds Trust, Berger Worldwide Portfolios
           Trust and Berger Omni Investment Trust. President and Director since
           June, 1999 (Executive Vice President from February 1999 to June 1999)
           of Berger LLC. Audit Committee Member of the Public Employees'
           Retirement Association of Colorado (pension plan) since November
           1997. Self-employed as a consultant from July 1995 through February
           1999. Director of Wasatch Advisors (investment management) from
           February 1997 to February 1999. Director of Janus Capital Corporation
           (investment management) from June 1984 through June 1995, and
           Executive Vice President of the Corporation from April 1989 through
           June 1995. Treasurer of Janus Capital Corporation from November 1983
           through October 1989. Trustee of the Janus Investment Funds from
           December 1990 through June 1995, and Senior Vice President of the
           Trust from May 1993 through June 1995. President and a director of
           Janus Service Corporation (transfer agent) from January 1987 through
           June 1995. President and a director of Fillmore Agency, Inc.
           (advertising agency), from January 1990 through June 1995. Executive
           Vice President and a director of Janus Capital International, Ltd.
           (investment advisor) from September 1994 through June 1995. President
           and a director of Janus Distributors, Inc. (broker/dealer), from May
           1991 through June 1995. Director of IDEX Management, Inc. (investment
           management), from January 1985 through June 1995. Trustee and Senior
           Vice President of the of the Janus Aspen Funds from May 1993 through
           June 1995.


      DENNIS E. BALDWIN, 3481 South Race Street, Englewood, CO 80110, DOB: 1928.
           President, Baldwin Financial Counseling. Formerly (1978-1990), Vice
           President and Denver Office Manager of Merrill Lynch Capital Markets.
           Director of Berger Growth Fund and Berger Large Cap Growth Fund.
           Trustee of Berger Investment Portfolio Trust, Berger Institutional
           Products Trust, Berger Worldwide Funds Trust, Berger Worldwide
           Portfolios Trust and Berger Omni Investment Trust.





      KATHERINE A. CATTANACH, 672 South Gaylord, Denver, CO 80209, DOB: 1945.
           Managing Principal, Sovereign Financial Services, Inc. (investment
           consulting firm). Formerly (1981-1988), Executive Vice President,
           Captiva Corporation, Denver, Colorado (private investment management
           firm). Ph.D. in Finance (Arizona State University); Chartered
           Financial Analyst (CFA). Director of Berger Growth Fund and Berger
           Large Cap Growthand Fund. Trustee of Berger Investment Portfolio
           Trust, Berger Institutional Products Trust, Berger Worldwide Funds
           Trust, Berger Worldwide Portfolios Trust and Berger Omni Investment
           Trust.







                                      -23-
<PAGE>   148





      PAUL R. KNAPP, 33 North LaSalle Street, Suite 1900, Chicago, IL 60602,
           DOB: 1945. Since October 2000, Executive Officer of DST Systems, Inc.
           Director (since February 1998) and a Vice President (February 1998 -
           November 1998) of West Side Investments, Inc. (investments), a
           wholly-owned subsidiary of DST Systems, Inc. Formerly, President,
           Chief Executive Officer and a director (September 1997 - October
           2000) of DST Catalyst, Inc. (international financial markets
           consulting, software and computer services company, an 81% owned
           subsidiary of DST Systems, Inc.) Previously (1991 - October 2000),
           Chairman, President, Chief Executive Officer and a director of
           Catalyst Institute (international public policy research organization
           focused primarily on financial markets and institutions); also (1991
           - September 1997), Chairman, President, Chief Executive Officer and a
           director of Catalyst Consulting (international financial institutions
           business consulting firm). Prior thereto (1988-1991), President,
           Chief Executive Officer and a director of Kessler Asher Group
           (brokerage, clearing and trading firm). Director of Berger Growth
           Fund and Berger Large Cap Growthand Fund. Trustee of Berger
           Investment Portfolio Trust, Berger Institutional Products Trust,
           Berger Worldwide Funds Trust, Berger Worldwide Portfolios Trust and
           Berger Omni Investment Trust.

      HARRY T. LEWIS, JR., 1600 Broadway, Suite 2400, Denver, CO 80202, DOB:
           1933. Self-employed as a private investor. Formerly (1981-1988),
           Senior Vice President, Rocky Mountain Region, of Dain Bosworth
           Incorporated and member of that firm's Management Committee. Director
           of J.D. Edwards & Co. (computer software company) since 1995.
           Director of Berger Growth Fund and Berger Large Cap Growthand Fund.
           Trustee of Berger Investment Portfolio Trust, Berger Institutional
           Products Trust, Berger Worldwide Funds Trust, Berger Worldwide
           Portfolios Trust and Berger Omni Investment Trust.

      WILLIAM SINCLAIRE, 3049 S. Perry Park Road, Sedalia, CO 80135, DOB: 1928.
           President, Santa Clara LLC (privately owned agriculture company).
           Director of Berger Growth Fund and Berger Large Cap Growthand Fund.
           Trustee of Berger Investment Portfolio Trust, Berger Institutional
           Products Trust, Berger Worldwide Funds Trust, Berger Worldwide
           Portfolios Trust and Berger Omni Investment Trust.

*     JAY  W. TRACEY, CFA, 210 University Boulevard, Suite 900, Denver, CO
           80206, DOB: 1954. Executive Vice President of the Berger Funds (since
           August, 2000). Executive Vice President and Chief Investment Officer
           of Berger LLC (since June 2000). Interim co-portfolio manager since
           June 2000 of the Berger Small Company Growth Fund and the Berger Mid
           Cap Growth Fund (since June 2000); portfolio manager of the Berger
           Growth Fund (since August 2000); co-portfolio manager since June 2000
           of the Berger Select Fund (since June 2000). Formerly, Vice President
           and Portfolio Manager at OppenheimerFunds, Inc (September 1994 to May
           2000) and Managing Director of Buckingham Capital Management
           (February 1994 to September 1994) .







                                      -24-
<PAGE>   149


*     MARK S. SUNDERHUSE, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1961. Vice President (since February 1999) and portfolio manager
           (since January 1999) of the Berger New Generation Fund. Vice
           President and co-portfolio manager since May 1999 of the Berger
           Select Fund. Interim co-portfolio manager since June 2000 of the
           Berger Small Company Growth Fund and the Berger Mid Cap Growth Fund.
           Interim co-portfolio manager (January 2000 to May 2000) of the Berger
           Balanced Fund. Senior Vice PresidentExecutive Vice President (since
           June 2000), portfolio manager (since January 1999) and Senior Vice
           President (from January 1998 to June 2000) with Berger LLC. Formerly,
           Senior Vice President and Assistant Portfolio Manager with Crestone
           Capital Management, Inc. (from January 1991 through January 1998);
           Investment Officer with United Bank of Denver (from April 1989
           through January 1991); and officer and registered representative with
           Boettcher & Company, Inc. (investment banking) (from May 1985 through
           April 1989).

*     STEVEN L. FOSSEL, CFA, 210 University Boulevard, Suite 900, Denver, CO
           80206, DOB: 1968. Vice President and portfolio manager of Berger LLC
           (since June 2000); senior equity analyst with Berger LLC (from March
           1998 to June 2000). Portfolio manager since June 2000 of the Berger
           Balanced Fund, co-portfolio manager since June 2000 of the Berger
           Select Fund. Formerly, Analyst and Assistant Portfolio Manager with
           Salomon Brothers Asset Management (from August 1992 to February
           1998).

      JANICE M. TEAGUE, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1954. Vice President (since November 1998) and Assistant
           Secretary (since February 2000 and previously from September 1996 to
           November 1998) and Secretary (November 1998 through January 2000) of
           the Berger Funds. Vice President (since October 1997), Secretary
           (since November 1998) and Assistant Secretary (September 1996 through
           November 1998) with Berger LLC. Vice President and Secretary with
           Berger Distributors LLC, since August 1998. Formerly, self-employed
           as a business consultant from June 1995 through September 1996,
           Secretary of the Janus Funds from January 1990 to May 1995 and
           Assistant Secretary of Janus Capital Corporation from October 1989 to
           May 1995.


*     DAVID J. SCHULTZ, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1950. Vice President and Treasurer (since November 1998) and
           Assistant Treasurer (September 1996 to November 1998) of the Berger
           Funds. Vice President (since February 1997) and Controller (since
           August 1994) with Berger LLC. Chief Financial Officer and Treasurer
           (since May 1996), Assistant Secretary (since August 1998) and
           Secretary (May 1996 to August 1998) with Berger Distributors LLC.
           Formerly, Partner with Smith, Brock & Gwinn (accounting firm) from
           January 1984 to August 1994.


*     ANTHONY R. BOSCH, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1965. Vice President of the Berger Funds (since February 2000).
           Vice President (since June 1999) with Berger LLC. Formerly, Assistant
           Vice President of Federated Investors, Inc. from December 1996
           through May 1999, and Attorney with the U.S. Securities and Exchange
           Commission (from June 1990 through December 1996).


*     BRIAN S. FERRIE, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1958. Vice President of the Berger Funds since November 1998.
           Vice President (since February 1997) and Chief Compliance Officer
           (since August 1994) with Berger LLC. Chief Compliance Officer with
           Berger Distributors LLC, since May 1996. Formerly, Compliance Officer
           with United Services Advisor, Inc., from January 1988 to July 1994,
           and Director of Internal Audit of United Services Funds from January
           1987 to July 1994.

*     JOHN PAGANELLI, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1967. Assistant Treasurer of the Berger Funds since November
           1998. Vice President (since November 1998) and Manager of Accounting
           (January 1997 through November 1998) with Berger LLC. Formerly,
           Manager of Accounting (December 1994 through October 1996) and Senior
           Accountant (November 1991 through December 1994) with Palmeri Fund
           Administrators, Inc.


*     SUE VREELAND, 210 University Boulevard, Suite 900, Denver, CO 80206, DOB:
           1948. Secretary of the Berger Funds (since February 2000). Assistant
           Secretary of Berger LLC and Berger Distributors LLC since June 1999.
           Formerly, Assistant Secretary of the Janus Funds from March 1994 to
           May 1999, Assistant Secretary of Janus Distributors, Inc. from June
           1995 to May 1997 and Manager of Fund Administration for Janus Capital
           Corporation from February 1992 to May 1999.




                                      -25-
<PAGE>   150

----------

* Interested person (as defined in the Investment Company Act of 1940) of one or
more of the Funds and/or of the Funds' advisors or sub-advisors.

                  The directors or trustees of the Funds have adopted a
director/trustee retirement age of 75 years.

DIRECTOR/TRUSTEE COMPENSATION


                  The officers of the Funds received no compensation from the
Funds during the fiscal year ended September 30, 2000. However, directors and
trustees of the Funds who are not "interested persons" of the Funds or their
advisors or sub-advisors are compensated for their services according to a fee
schedule, allocated among the Funds. Neither the officers of the Funds nor the
directors or trustees receive any form of pension or retirement benefit
compensation from the Funds.

     The following table sets forth information regarding compensation paid or
accrued during the fiscal year ended September 30, 2000, for each director or
trustee of the Funds:




                                      -26-
<PAGE>   151


<TABLE>
<CAPTION>
NAME AND POSITION
WITH BERGER FUNDS           AGGREGATE COMPENSATION FROM
========================================================================================================================
                                                                    BERGER
                          BERGER        BERGER                      SMALL         BERGER        BERGER
                          INFORMATION   NEW           BERGER        COMPANY       MID CAP       MID CAP       BERGER
                          TECHNOLOGY    GENERATION    SELECT        GROWTH        GROWTH        VALUE         GROWTH
                          FUND          FUND          FUND          FUND          FUND          FUND          FUND
                          ----------    ----------    ----------    ----------    ----------    ----------    ----------
<S>                       <C>           <C>           <C>           <C>           <C>           <C>           <C>
Dennis E.                 $       49    $    2,441    $    1,340    $    8,432    $    3,075    $      147    $      319
Baldwin(4)

Dennis E.
Baldwin(3)                $_________    $_________    $_________    $_________    $_________    $_________    $_________

Louis Bindner(7)          $_________    $_________    $_________    $_________    $_________    $_________    $_________

Katherine A.              $       49    $    2,441    $    1,340    $    8,432    $    5,747    $      147    $      319
Cattanach(4)

Katherine A.              $_________    $_________    $_________    $_________    $_________    $_________    $_________
Cattanach(3)

<CAPTION>

NAME AND POSITION
WITH BERGER FUNDS           AGGREGATE COMPENSATION FROM
============================================================================================
                                         BERGER
                                         LARGE
                          BERGER         CAP           BERGER       ALL           ALL
                          INTERNATIONAL  GROWTH        BALANCED     BERGER        BERGER
                          FUND(1)        FUND          FUND         FUNDS(2)      FUNDS(3)
                          ----------    ----------    ----------    ----------    ----------
<S>                       <C>           <C>           <C>           <C>           <C>
Dennis E.                 $   19,673    $    2,966    $    7,639    $    1,175    $   47,600
Baldwin(4)

Dennis E.                 $_________    $_________    $_________    $_________    $_________
Baldwin(3)

Louis Bindner(7)          $_________    $_________    $_________    $_________    $_________

Katherine A.              $   19,673    $    2,966    $    4,968    $    1,175    $   47,600
Cattanach(4)

Katherine A.              $_________    $_________    $_________    $_________    $_________
Cattanach(3)
</TABLE>




                                      -27-
<PAGE>   152


<TABLE>
<CAPTION>
NAME AND POSITION
WITH BERGER FUNDS           AGGREGATE COMPENSATION FROM
========================================================================================================================
                                                                    BERGER
                          BERGER        BERGER                      SMALL         BERGER        BERGER
                          INFORMATION   NEW           BERGER        COMPANY       MID CAP       MID CAP       BERGER
                          TECHNOLOGY    GENERATION    SELECT        GROWTH        GROWTH        VALUE         GROWTH
                          FUND          FUND          FUND          FUND          FUND          FUND          FUND
                          ----------    ----------    ----------    ----------    ----------    ----------    ----------
<S>                       <C>           <C>           <C>           <C>           <C>           <C>           <C>
Paul R. Knapp(3)          $_________    $_________    $_________    $_________    $_________    $_________    $_________

Harry T. Lewis(3)         $_________    $_________    $_________    $_________    $_________    $_________    $_________

Michael Owen(3)           $_________    $_________    $_________    $_________    $_________    $_________    $_________

William                   $_________    $_________    $_________    $_________    $_________    $_________    $_________
Sinclaire(3)

Jack R.  Thompson         $        0    $        0    $        0    $        0    $        0    $        0    $        0
(4),(5),(6),(7)

Jack R.  Thompson
(3),(4),(5),(6)           $_________    $_________    $_________    $_________    $_________    $_________    $_________

<CAPTION>

NAME AND POSITION
WITH BERGER FUNDS           AGGREGATE COMPENSATION FROM
============================================================================================
                                         BERGER
                                         LARGE
                          BERGER         CAP           BERGER       ALL           ALL
                          INTERNATIONAL  GROWTH        BALANCED     BERGER        BERGER
                          FUND(1)        FUND          FUND         FUNDS(2)      FUNDS(3)
                          ----------    ----------    ----------    ----------    ----------
<S>                       <C>           <C>           <C>           <C>           <C>
Paul R. Knapp(3)          $_________    $_________    $_________    $_________    $_________

Harry T. Lewis(3)         $_________    $_________    $_________    $_________    $_________

Michael Owen(3)           $_________    $_________    $_________    $_________    $_________

William                   $_________    $_________    $_________    $_________    $_________
Sinclaire(3)

Jack R.  Thompson
(4),(5),(6),(7)           $        0    $        0    $        0    $        0    $        0

Jack R.  Thompson
(3),(4),(5),(6)           $_________    $_________    $_________    $_________    $_________
</TABLE>




                                      -28-
<PAGE>   153

NOTES TO TABLE





(1) Comprised of the portion of the trustee compensation paid by Berger
Worldwide Portfolios to its trustees and allocated to the Fund.

(2) Includes the Berger Growth Fund, the Berger Large Cap Growthand Fund, the
Berger Investment Portfolio Trust (including the Berger Small Company Growth
Fund, the Berger New Generation Fund, the Berger Balanced Fund, the Berger
Select Fund, the Berger Mid Cap Value Fund, the Berger Mid Cap Growth Fund and
the Berger Information Technology Fund), the Berger Institutional Products Trust
(four series), the Berger Worldwide Funds Trust (three series, including the
Berger International Fund), the Berger Worldwide Portfolios Trust (one series)
and the Berger Omni Investment Trust (one series). Aggregate compensation
figures do not include first-year estimates for any Fund in existence for less
than one year. Of the aggregate amounts shown for each director/trustee, the
following amounts were deferred under applicable deferred compensation plans:
Dennis E. Baldwin $_____; Katherine A. Cattanach $______; Michael Owen $_____;
William Sinclaire $______.

(3) Director of Berger Growth Fund and Berger Large Cap Growthand Fund and
trustee of Berger Investment Portfolio Trust, Berger Institutional Products
Trust, Berger Worldwide Portfolios Trust, Berger Worldwide Funds Trust and
Berger Omni Investment Trust.

(4) Interested person of Berger LLC.

(5) Trustee of Berger Worldwide Funds Trust and Berger Worldwide Portfolios
Trust.

(6) President of Berger Growth Fund, Berger Large Cap Growthand Fund, Berger
Investment Portfolio Trust, Berger Institutional Products Trust, Berger
Worldwide Portfolios Trust, Berger Worldwide Funds Trust and Berger Omni
Investment Trust.

(7) Resigned as Director and Trustee effective November 17, 2000.


                  Directors or trustees may elect to defer receipt of all or a
portion of their fees pursuant to a fee deferral plan adopted by each of the
Funds. Under the plan, deferred fees are credited to an account and adjusted
thereafter to reflect the investment experience of whichever of the Berger Funds
(or approved money market funds) is designated by the director or trustee for
this purpose. Pursuant to an SEC exemptive order, the Funds are permitted to
purchase shares of the designated funds in order to offset their obligation to
the directors/trustees participating in the plan. Purchases made pursuant to the
plan are excepted from any otherwise applicable investment restriction limiting
the purchase of securities of any other investment company. A Fund's obligation
to make payments of deferred fees under the plan is a general obligation of the
Fund.


                  As of December 29, 2000, the officers and directors/trustees
of the Funds as a group owned of record or beneficially an aggregate of less
than 1% of the outstanding shares of each of the Funds.


4.                INVESTMENT ADVISORS AND SUB-ADVISORS

BERGER LLC - INVESTMENT ADVISOR


                  Berger LLC ("Berger LLC"), 210 University Boulevard, Suite
900, Denver, CO 80206, is the investment advisor to all the Berger Funds. Berger
LLC is responsible for managing the investment operations of these Funds and the
composition of their investment portfolios. Berger LLC also acts as each Funds'
administrator and is responsible for such functions as monitoring compliance
with all applicable federal and state laws.

                  Berger LLC is a Nevada Limited Liability Company, and has been
in the investment advisory business for 26 years. It serves as investment
advisor or sub-advisor to mutual funds and institutional investors and had
assets under management of approximately $____ billion as of December 31, 2000.
Berger LLC is a subsidiary of Stilwell Management Inc. ("Stilwell"), which owns
more than 80% of Berger LLC, and is an indirect subsidiary of Stilwell Financial
Inc. ("Stilwell Financial"). Stilwell also owns approximately 32% of the
outstanding shares of DST Systems, Inc. ("DST"), a publicly traded information
and transaction processing company which acts as the Funds' transfer agent. DST,
in turn, owns 100% of DST Securities, a registered broker-dealer, which executes
portfolio trades for the Funds.

                  Stilwell Financial was previously a wholly-owned subsidiary of
Kansas City Southern Industries, Inc. ("KCSI"). On July 12, 2000, KCSI completed
a separation of its transportation and financial services segments through a
dividend of stock of Stilwell Financial. On




                                      -29-
<PAGE>   154


that date, KCSI shareholders received two shares of Stilwell Financial for every
KCSI share held as of June 28, 2000. The separation resulted in no change in the
management or control of the Funds or the Advisor to the Funds.

BBOI WORLDWIDE LLC - INVESTMENT ADVISOR

                  Prior to May 12, 2000, BBOI Worldwide LLC ("BBOI Worldwide"),
210 University Blvd., Suite 700, Denver, CO 80206, a joint venture between
Berger LLC and Bank of Ireland Asset Management (U.S.) Limited (BIAM), served as
advisor and administrator to the Portfolio. Effective May 12, 2000, the Berger
International Portfolio entered into a new advisory agreement with Berger LLC
replacing BBOI Worldwide LLC as the Fund's investment advisor and administrator,
and BBOI was subsequently dissolved. Berger LLC is responsible for overseeing,
evaluating and monitoring the investment advisory services provided byBerger
BIAM as sub-advisor.


BANK OF IRELAND ASSET MANAGEMENT (U.S.) LIMITED - SUB-ADVISOR


                  As permitted in its Investment Advisory Agreement with the
Berger International Portfolio, Berger LLC has delegated day-to-day investment
management responsibility for the Portfolio to BIAM. As sub-advisor, BIAM
manages the investments in the Portfolio and determines what securities and
other investments will be purchased, retained, sold or loaned, consistent with
the investment objective and policies established by the trustees. BIAM's main
offices are at 26 Fitzwilliam Place, Dublin 2, Ireland. BIAM maintains a
representative office at 75 Holly Hill Lane, Greenwich, CT 06830. BIAM is an
indirect wholly-owned subsidiary of Bank of Ireland, a publicly traded,
diversified financial services group with business operations worldwide. Bank of
Ireland provides investment management services through a network of related
companies, including BIAM which serves primarily institutional clients in the
United States and Canada. Bank of Ireland and its affiliates managed assets for
clients worldwide in excess of $_____ billion as of September 30, 2000.


     Bank of Ireland or its affiliates may have deposit, loan or other
commercial or investment banking relationships with the issuers of securities
which may be purchased by the Portfolio, including outstanding loans to such
issuers which could be repaid in whole or in part with the proceeds of
securities purchased by the Portfolio. Federal law prohibits BIAM, in making
investment decisions, from using material non-public information in its
possession or in the possession of any of its affiliates. In addition, in making
investment decisions for the Portfolio, BIAM will not take into consideration
whether an issuer of securities proposed for purchase or sale by the Portfolio
is a customer of Bank of Ireland or its affiliates.



                                      -30-
<PAGE>   155

PERKINS, WOLF, MCDONNELL & COMPANY - SUB-ADVISOR


                  Perkins, Wolf, McDonnell & Company ("PWM"), 53 West Jackson
Boulevard, Suite 818, Chicago, Illinois 60604, has been engaged as the
investment sub-advisor for the Berger Mid Cap Value Fund. PWM was organized in
1980 under the name Mac-Per-Wolf Co. to operate as a securities broker-dealer.
In September 1983, it changed its name to Perkins, Wolf, McDonnell & Company.
PWM is a member of the National Association of Securities Dealers, Inc. (the
"NASD") and, in 1984, became registered as an investment advisor with the SEC.

                  PWM has been the investment sub-adviser to the Berger Mid Cap
Value Fund since it commenced operations in August 1998.

                  Thomas M. Perkins has been the lead investment manager for the
Berger Mid Cap Value Fund.Fund since its inception in August 1998. As lead
manager, Tom Perkins is responsible for the daily decisions on security
selection for the Fund's portfolio. Robert H. Perkins, brother of Thomas
Perkins, has also served as investment manager of the Berger Mid Cap Value Fund
since its inception. Robert Perkins has been an investment manager since 1970
and serves as President and a director of PWM. Thomas Perkins has been an
investment manager since 1974 and joined PWM as a portfolio manager in 1998.
Robert Perkins owns 49% of PWM. Gregory E. Wolf owns 20% of PWM and serves as
its Treasurer and a director.


BAY ISLE FINANCIAL CORPORATION - SUB-ADVISOR

                  Bay Isle Financial Corporation ("Bay Isle"), 160 Sansome
Street, 17th Floor, San Francisco, CA 94104, is the investment sub-advisor for
the Berger Information Technology Fund. Bay Isle has been in the investment
advisory business since 1986. Bay Isle serves as investment advisor or
sub-advisor to mutual funds, institutional investors and individual separate
accounts.


                  Bay Isle served as investment advisor to the Berger
Information Technology Fund (originally known as the Information Tech 100(R)
Fund) from its inception in April 1997 until July 1999, when the
InformationTech(R) 100 Fund was reorganized into the Information Technology Fund
with shareholder approval. At that time, Bay Isle became the investment
sub-advisor to the Fund under a Sub-Advisory Agreement between Berger LLC as
advisor and Bay Isle as sub-advisor. As sub-advisor, Bay Isle provides
day-to-day management of the Fund's investment operations.


                  William F. K. Schaff is primarily responsible for the
day-to-day investment decisions for the Berger Information Technology Fund. Mr.
Schaff is a co-founder and controlling person of Bay Isle and serves as its
Chief Investment Officer and a director. Mr. Schaff has been managing accounts
of Bay Isle clients since 1987. Gary G. Pollock is also a co-founder and
controlling person of Bay Isle and serves as its President and a director.

                  In addition to its other activities, Bay Isle maintains the
InformationWeek(R) 100 Index, an unmanaged index of the stocks of 100 companies
in the information technology industries. InformationWeek(R) is a registered
trademark of CMP Media, which is not affiliated with Bay Isle or the Fund. Mr.
Schaff also writes articles on investments for InformationWeek magazine, a
publication of CMP Media covering information technology-related topics. CMP
Media compensates Bay Isle for managing the Index and for Mr. Schaff's articles.

INVESTMENT ADVISORY AGREEMENTS

                  Under the Investment Advisory Agreements between each Fund and
its advisor, the advisor is generally responsible for furnishing continuous
advice and making investment decisions as to the acquisition, holding or
disposition of securities or other assets which each Fund may own or contemplate
acquiring from time to time. Each Investment Advisory Agreement provides that
the investment advisor shall not be liable for any error of judgment or mistake
of law or for any loss arising out of any investment or for any act or omission
taken with respect to the Fund, except for willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties thereunder and except to the extent
otherwise provided by law.



                                      -31-
<PAGE>   156

                  Under each Investment Advisory Agreement in effect, the
advisor is compensated for its services by the payment of a fee at an annual
rate, calculated as a percentage of the average daily net assets of the Fund.


                  The following schedule reflects the advisory fees charged to
the Funds for the fiscal year ended September 30, 2000:



<TABLE>
<CAPTION>
                FUND                                 ADVISOR                                 INVESTMENT ADVISORY FEE
                ----                                 -------                                 -----------------------
<S>                                                <C>                                       <C>
Berger Information Technology Fund                 Berger LLC(1)                                      0.__%(1)
Berger New Generation Fund                         Berger LLC                                         0.__%(2)
Berger Select Fund                                 Berger LLC                                         0.__%
Berger Small Company Growth Fund                   Berger LLC                                         0.__%(3)
Berger Mid Cap Growth Fund                         Berger LLC                                         0.__%(2)
Berger Mid Cap Value Fund                          Berger LLC(4)                                      0.__%(4)
Berger Growth Fund                                 Berger LLC                                         0.__%(3)
Berger International Fund(6)                       Berger LLC(5)                                      0.__%(5)
Berger Large Cap Growth Fund(7)                    Berger LLC                                         0.__%(3)
Berger Balanced Fund                               Berger LLC                                         0.__%(2)
</TABLE>


(1)  Fund is sub-advised by Bay Isle. See text preceding and following table.
     Under a written contract, the Fund's investment advisor waives its fee or
     reimburses the Fund for expenses to the extent that, at any time during the
     life of the Fund, the annual operating expenses for the Investor Shares
     class of the Fund in any fiscal year, including the investment advisory fee
     and the 12b-1 fee, but excluding brokerage commissions, interest, taxes and
     extraordinary expenses, exceed 2.00% of the Fund's average daily net assets
     attributable to the Investor Shares for that fiscal year. The contract also
     provides that the advisor will waive an additional amount of its fees or
     reimburse an additional amount of expenses to the extent necessary to keep
     its fee waiver and reimbursement for the Investor Shares class
     proportionate to its fee waiver and reimbursement for the Fund's other
     outstanding share class. The contract may not be terminated or amended
     except by a vote of the Fund's Board of Trustees. The investment advisory
     fee is allocated among the Investor Shares and the other class of the Fund
     on the basis of net assets attributable to each such class.

(2)  Under a written contract, the Fund's investment advisor waives its fee to
     the extent that, at any time during the life of the Fund, the Fund's annual
     operating expenses (or, if applicable, for the Investor Shares class of the
     Fund) in any fiscal year, including the investment advisory fee and the
     12b-1 fee, but excluding brokerage commissions, interest, taxes and
     extraordinary expenses, exceed 1.90% in the case of the Investor Shares
     class of the Berger New



                                      -32-
<PAGE>   157

     Generation Fund, 2.00% in the case of the Berger Mid Cap Growth Fund, and
     1.50% in the case of the Berger Balanced Fund, of the average daily net
     assets of the Fund (or applicable class) for that fiscal year. The
     advisor's contract with the Berger Mid Cap Growth Fund and the Berger
     Balanced Fund may not be terminated or amended except by a vote of the
     Fund's Board of Trustees. The agreement with the Berger New Generation Fund
     may be terminated by the advisor upon 90 days' prior written notice to the
     Fund. For the Berger New Generation Fund, the investment advisory fee is
     allocated among the Investor Shares and the other class of the Fund on the
     basis of net assets attributable to each such class.

(3)  Under a written agreement, the Fund's investment advisor waives its fee to
     the extent that the annual operating expenses for the Investor Shares class
     of the Fund in any fiscal year, including the investment advisory fee, but
     excluding the 12b-1 fee, brokerage commissions, interest, taxes and
     extraordinary expenses, exceed 2-1/2% of the first $30,000,000 of average
     daily net assets, plus 2% of the next $70,000,000, plus 1-1/2% of the
     balance of the average daily net assets of the Fund attributable to the
     Investor Shares for that fiscal year. The agreement may be terminated by
     the advisor upon 90 days' prior written notice to the Fund. The investment
     advisory fee is allocated among the Investor Shares and the other class of
     the Fund on the basis of net assets attributable to each such class.

(4)  Fund is sub-advised by PWM. See text preceding and following table.





(5)  International Fund bears its pro rata portion of the fee paid by the Berger
     International Portfolio to Berger LLC as the advisor. The Portfolio is
     sub-advised by BIAM. See text preceding and following table. Under a
     written contract, the Portfolio's investment advisor waives its investment
     advisory fee to the extent that, at any time during the life of the
     Portfolio, the Portfolio's annual operating expenses in any fiscal year,
     including the investment advisory fee and custodian fees, but excluding
     brokerage commissions, interest, taxes and extraordinary expenses, exceed
     1.00% of the Portfolio's average daily net assets for that fiscal year. The
     contract may not be terminated or amended except by a vote of the
     Portfolio's Board of Trustees. Any such reduction in the advisory fee paid
     by the Portfolio will also reduce the pro rata share of the advisory fee
     borne indirectly by the InternationalBerger International Fund.

(6)  Effective May 12, 2000, the Berger/BIAM International Fund was renamed
     Berger International Fund.

(7)  Effective January 29, 2001, the Berger Growth and Income Fund was renamed
     Berger Large Cap Growth Fund.

     Investment advisory fees are charged to the Berger Funds according to the
following schedule:



<TABLE>
<CAPTION>
                  Fund                                   Average Daily Net Assets                           Annual Rate
                  ----                                   ------------------------                           -----------

<S>                                                      <C>                                                <C>
        Berger Select Fund                                  First $500 million                                  .75%
        Berger Mid Cap Growth Fund                           Next $500 million                                  .70%
        Berger Mid Cap Value Fund                             Over $1 billion                                   .65%
        Berger Growth Fund
        Berger Large Cap Growth Fund

        Berger Information Technology Fund                  First $500 million                                  .85%
        Berger New Generation Fund                           Next $500 million                                  .80%
        Berger Small Company Growth Fund                      Over $1 billion                                   .75%

        Berger Balanced Fund                                 First $1 billion                                   .70%
                                                              Over $1 billion                                   .65%

        Berger International Portfolio                      First $500 million                                  .85%
                                                             Next $500 million                                  .80%
                                                              Over $1 billion                                   .75%
</TABLE>



                  Each Fund's current Investment Advisory Agreement will
continue in effect until the last day of April 2001, and thereafter from year to
year if such continuation is specifically approved at least annually by the
directors or trustees or by vote of a majority of the outstanding shares of the
Fund and in either case by vote of a majority of the directors or trustees who
are not "interested persons" (as that term is defined in the 1940 Act) of the
Fund or the advisor. Each Agreement is subject to termination by the Fund or the
advisor on 60 days' written notice, and terminates automatically in the event of
its assignment.



                                      -33-
<PAGE>   158


                  Under the Sub-Advisory Agreement between the advisors and the
sub-advisors for the Berger International Portfolio, the Berger Mid Cap Value
Fund and the Berger Information Technology Fund, the sub-advisor is responsible
for day-to-day investment management. The sub-advisor manages the investments
and determines what securities and other investments will be acquired, held or
disposed of, consistent with the investment objective and policies established
by the trustees. Each Sub-Advisory Agreement provides that the sub-advisor shall
not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission taken with respect to
the Fund, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its obligations
and duties thereunder and except to the extent otherwise provided by law.

                  No fees are paid directly to the sub-advisors by the Funds. As
the sub-advisor of the Berger Mid Cap Value Fund, PWM receives from the advisor
a fee at the annual rate of 0.375% of the first $500 million of average daily
net assets of the Fund, 0.35% of the next $500 million and 0.325% of any amount
in excess of $1 billion. sub- BIAM, as the sub-advisor of the Berger
International Portfolio, receives from the advisor a fee at the annual rate of
0.45% of the average daily net assets of the Portfolio. During certain periods,
BIAM may voluntarily waive all or a portion of its fee under the Sub-Advisory
Agreement, which will not affect the fee paid by the Portfolio to the advisor.
Bay Isle, as the sub-advisor of the Berger Information Technology Fund, receives
from the advisor a fee at the annual rate of 0.425% for the first $500 million
of the Fund's average daily net Fund.assets, 0.40% of the next $500 million and
0.375% of any amount in excess of $1 billion.

                  The Sub-Advisory Agreements will continue in effect until
April 2001 or 2002, and thereafter from year to year if such continuation is
specifically approved at least annually by the trustees or by vote of a majority
of the outstanding shares of the Fund and in either case by vote of a majority
of the trustees of the Fund who are not "interested persons" (as that term is
defined in the Investment Company Act of 1940) of the Fund or the advisor or the
sub-advisor. The Sub-Advisory Agreements are subject to termination by the Fund
or the sub-advisor on 60 days' written notice, and terminate automatically in
the event of their assignment and in the event of termination of the related
Investment Advisory Agreement.


OTHER ARRANGEMENTS BETWEEN BERGER LLC AND PWM


                  Berger LLC and PWM entered into an Agreement, dated November
18, 1996, as amended January 27, 1997, April 8, 1998 and November 17, 1999 (the
"November 18 Agreement"), under which, among other things, PWM agreed that, so
long as Berger LLC acts as the advisor to the Berger Mid Cap Value Fund, and PWM
provides sub-advisory or other services in connection with the Fund, PWM will
not manage or provide advisory services to any registered investment company
that is in direct competition with the Fund.





OTHER ARRANGEMENTS BETWEEN BERGER LLC AND BAY ISLE

                  Berger LLC and Bay Isle have formed a joint venture to provide
asset management services to certain private accounts. In connection with the
formation of that joint venture, Berger LLC purchased from Bay Isle owners
William F. K. Schaff and Gary G. Pollock the right that, if either Mr. Schaff or
Mr. Pollock ever desires to sell any of his Bay Isle shares in the future, they
will together first offer to sell shares to Berger LLC aggregating at least 80%
of the total outstanding shares of Bay Isle at an agreed price. If Berger LLC
elects to purchase the Bay Isle shares offered, the parties have agreed to use
their best efforts to have 5-year employment agreements entered into between Bay
Isle and Messrs. Schaff and Pollock. Consummation of any such purchase of Bay
Isle shares by Berger LLC would be subject to a number of conditions, including
any required approval



                                      -34-
<PAGE>   159

by Fund shareholders under the Investment Company Act of 1940. Bay Isle and
Messrs. Schaff and Pollock are also compensated by Berger LLC for providing
administrative or consulting services relating to their joint venture private
account business.

TRADE ALLOCATIONS

                  While investment decisions for the Funds are made
independently by the advisor or sub-advisor, the same investment decision may be
made for a Fund and one or more accounts advised by the advisor or sub-advisor.
In this circumstance, should purchase and sell orders of the same class of
security be in effect on the same day, the orders for such transactions may be
combined by the advisor or sub-advisor in order to seek the best combination of
net price and execution for each. Client orders partially filled will, as a
general matter, be allocated pro rata in proportion to each client's original
order, although exceptions may be made to avoid, among other things, odd lots
and de minimis allocations. Execution prices for a combined order will be
averaged so that each participating client receives the average price paid or
received. While in some cases, this policy might adversely affect the price paid
or received by a Fund or other participating accounts, or the size of the
position obtained or liquidated, the advisor or sub-advisor will aggregate
orders if it believes that coordination of orders and the ability to participate
in volume transactions will result in the best overall combination of net price
and execution.

RESTRICTIONS ON PERSONAL TRADING


                  Berger LLC, the Berger Funds and Berger Distributors LLC each
permits its directors, officers and employees to purchase and sell securities
for their own accounts in accordance with a policy regarding personal investing
in Ethics.each of the Codes of Ethics for Berger LLC, the Berger Funds and
Berger Distributors LLC. The policy requires all covered persons to conduct
their personal securities transactions in a manner which does not operate
adversely to the interests of the Funds or Berger LLC's other advisory clients.
Directors and officers of Berger LLC and Berger Distributors LLC, investment
personnel and other designated persons deemed to have access to current trading
information ("access persons") are required to pre-clear all transactions in
securities not otherwise exempt under the policy. Requests for authority to
trade will be denied pre-clearance when, among other reasons, the proposed
personal transaction would be contrary to the provisions of the policy or would
be deemed to adversely affect any transaction then known to be under
consideration for or currently being effected on behalf of any client account,
including the Funds.

                  In addition to the pre-clearance requirements described above
for Berger LLC and Berger Distributors LLC, the policy subjects directors and
officers of Berger LLC, the Berger Funds and Berger Distributors LLC, investment
personnel and other access persons to various trading restrictions and reporting
obligations. All reportable transactions are reviewed for compliance with the
policy. The policy is administered by Berger LLC and the provisions of the
policy are subject to interpretation by and exceptions authorized by its board
of directors.

                  PWM has adopted a Code of Ethics that is substantially similar
to the Code adopted by Berger LLC.



                  BIAM has adopted a Code of Ethics that restricts its officers,
employees and other staff from personal trading in specified circumstances,
including among others prohibiting participation in initial public offerings,
prohibiting dealing in a security for the seven days before and after any trade
in that security on behalf of clients, prohibiting trading in a security while
an order is pending for any client on that same security, and requiring profits
from short-term trading in securities (purchase and sale within a 60-day period)
to be forfeited. In addition, staff of BIAM must report all of their personal
holdings in securities annually and must disclose their holdings in any private
company if an investment in that same company is being considered for clients.
Staff of BIAM are required to pre-clear all transactions in securities not
otherwise exempt under the Code of Ethics and must instruct their broker to
provide BIAM with duplicate confirmations of all such personal trades.


                  Bay Isle permits its officers, directors, employees and
consultants to purchase and sell securities for their own accounts and accounts
of related persons in accordance with provisions governing personal securities
trading in Bay Isle's code of ethics and related internal policies. Employees
must wait 3 days between the time a new recommendation or opinion change is made
and the time the employee may trade in those securities in their own or related
accounts, or alternatively may ask that



                                      -35-
<PAGE>   160


their transaction be added to a "block" trade that will be made for a group of
clients. Any employee trade not included in a "block" trade made must be
pre-cleared if the trade exceeds certain specified volume limits. Volume limits
are set with the intent of requiring prior approval of any trade that could
potentially cause changes in the market price of the security in question. In
addition, no employee may sell (or buy) any security which he or she has bought
(or sold) within the past 5 trading days unless a loss is realized on closing
the position. No employee, officer or director of Bay Isle may acquire any
security in an initial public offering or in a private placement without prior
written approval from Bay Isle's President. Any Bay Isle employee who is an
"access person" of the Fund will also be subject to the provisions of Berger
LLC's Code of Ethics, if those provisions are more restrictive than the
provisions of Bay Isle's own code. Each employee must acknowledge quarterly that
they are in compliance with the Bay Isle Code of Ethics and related policies.


5.                EXPENSES OF THE FUNDS


ALL FUNDS EXCEPT THE BERGER INTERNATIONAL FUND



                  In addition to paying an investment advisory fee to its
advisor, each Fund (other than the Berger International Fund) pays all of its
expenses not assumed by its advisor, including, but not limited to, custodian
and transfer agent fees, legal and accounting expenses, administrative and
record keeping expenses, interest charges, federal and state taxes, expenses of
shareholders' meetings, compensation of directors or trustees who are not
interested persons of Berger LLC, expenses of printing and distributing reports
to shareholders and federal and state administrative agencies, and all expenses
incurred in connection with the execution of its portfolio transactions,
including brokerage commissions on purchases and sales of portfolio securities,
which are considered a cost of securities of each Fund. Each Fund also pays all
expenses incurred in complying with all federal and state laws and the laws of
any foreign country applicable to the issue, offer or sale of shares of the
Fund, including, but not limited to, all costs involved in preparing and
printing prospectuses for shareholders of the Fund.

                  Under a separate Administrative Services Agreement with
respect to each of such Funds, Berger LLC performs certain administrative and
recordkeeping services not otherwise performed by the Fund's custodian and
recordkeeper, including the preparation of financial statements and reports to
be filed with the Securities and Exchange Commission and state regulatory
authorities. For the fiscal year ended September 30, 2000, Berger LLC did not
charge an administrative fee to the Funds. The administrative services fees may
be changed by the directors or trustees without shareholder approval.


                  The following tables show the total dollar amounts of advisory
fees and administrative services fees paid by each of such Funds for the periods
indicated and the amount of such fees waived on account of excess expenses under
applicable expense limitations. Except where noted, these amounts were paid to
Berger LLC.

                       Berger Information Technology Fund


<TABLE>
<CAPTION>
                                                                               Advisory Fee
                                Investment            Administrative        Waiver and Expense
  Fiscal Year Ended(1)       Advisory Fee(2)          Service Fee(3)         Reimbursement(4)             TOTAL
------------------------- ----------------------- ----------------------- ------------------------ ---------------------
<S>                       <C>                     <C>                     <C>                      <C>
Sept. 30, 2000            $ ________              $ ________              $ ________               $ _______
Sept. 30, 1999            $   97,000              $   11,000              $  (47,000)              $  61,000
Feb. 28, 1999(5)          $   68,000              $   30,000              $  (84,000)              $  14,000
</TABLE>


(1) The Fund's fiscal year changed from February 28 to September 30 as part of a
reorganization effective July 1999.



                                      -36-
<PAGE>   161

(2) Under the advisory agreement in effect prior to the reorganization
referenced in note (1), the Fund's predecessor paid an advisory fee at an annual
rate of 0.95% of its average daily net assets to Bay Isle. As part of the
reorganization, the investment advisory fee of 0.90% payable to Berger LLC came
into effect. Effective October 1, 1999, the investment advisory fee charged to
the Fund was reduced to 0.85% of the first $500 million of average net assets;
0.80% on the next $500 million of average net assets; and 0.75% of average net
assets exceeding $1 billion.

(3) Under the administrative service agreement in effect prior to the
reorganization referenced in note (1), the Fund's predecessor paid to a third
party administrator an administrative services fee at the annual rate of 0.20%
of average net assets, subject to a $30,000 annual minimum. As part of the
reorganization, the administrative service fee of 0.01% payable to Berger LLC
came into effect. Effective October 1, 1999, Berger LLC eliminated the 0.01%
administrative fee charged to the Funds.

(4) Prior to the reorganization referenced in note (1), the Fund's prior advisor
had voluntarily agreed to reduce its fees and/or pay expenses of the Fund to
ensure that the Fund's expenses did not exceed 1.50%. During 1998, in addition
to waiving its entire advisory fee and reimbursing the Fund for the entire
administrative service fee, the Fund's prior advisor reimbursed the Fund for
$59,000 of additional expenses in order to meet the applicable expense
limitation. As part of the reorganization, the current expense limitation
arrangements came into effect with Berger LLC, which are described in note (2)
to the table appearing above under the heading "Investment Advisory Agreements."

(5) The Fund was the accounting survivor in the reorganization referenced in
note (1). Accordingly, this covers the period April 8, 1997 (commencement of
operations of the predecessor) to February 28, 1998, of the Fund's predecessor.

                           Berger New Generation Fund


<TABLE>
<CAPTION>
Fiscal Year Ended       Investment        Administrative      Advisory Fee
   September 30,       Advisory Fee        Service Fee          Waiver            TOTAL
-----------------      ------------       --------------      ------------      ----------
<S>                    <C>                <C>                 <C>              <C>
       2000            $___________       $_____________      $          0      $_________

       1999            $  1,714,000       $       19,000      $          0      $1,733,000

       1998            $  1,229,000       $       14,000      $          0      $1,243,000
</TABLE>



                                      -37-

<PAGE>   162

                               Berger Select Fund


<TABLE>
<CAPTION>
   Fiscal Year Ended            Investment            Administrative          Advisory Fee               TOTAL
     September 30,             Advisory Fee            Service Fee               Waiver
------------------------- ----------------------- ----------------------- ---------------------- -----------------------
<S>                        <C>                     <C>                      <C>                   <C>
          2000                  $_________              $________               $     0                  $_______

          1999                  $  740,000              $  10,000               $     0                  $750,000

          1998*                 $  143,000              $   2,000               $     0                  $145,000
</TABLE>


* Covers period from December 31, 1997 (commencement of operations) through the
end of the Fund's first fiscal year on September 30, 1998.

                        Berger Small Company Growth Fund


<TABLE>
<CAPTION>
   Fiscal Year Ended            Investment            Administrative          Advisory Fee
     September 30,             Advisory Fee            Service Fee               Waiver                  TOTAL
------------------------- ----------------------- ----------------------- ---------------------- -----------------------

<S>                       <C>                     <C>                      <C>                   <C>
          2000                  $_________              $________                $     0               $_________

          1999                  $5,582,000              $  62,000                $     0               $5,644,000

          1998                  $6,984,000              $  78,000                $     0               $7,062,000
</TABLE>






                           Berger Mid Cap Growth Fund



<TABLE>
<CAPTION>
   Fiscal Year Ended            Investment            Administrative          Advisory Fee
     September 30,             Advisory Fee            Service Fee               Waiver                  TOTAL
   -----------------           ------------           ---------------         ------------             ----------
<S>                            <C>                    <C>                     <C>                      <C>
          2000                  $________               $________              $      0                $_________

          1999                  $  88,000               $   1,000              $      0                $   89,000

          1998*                 $  20,000               $       0              $(12,000)               $    8,000
</TABLE>


* Covers period from December 31, 1997 (commencement of operations) through the
end of the Fund's first fiscal year on September 30, 1998.


                                      -38-

<PAGE>   163

                            Berger Mid Cap Value Fund


<TABLE>
<CAPTION>
   Fiscal Year Ended            Investment            Administrative          Advisory Fee
     September 30,             Advisory Fee            Service Fee               Waiver                  TOTAL
   -----------------           ------------           --------------          ------------             -----------
<S>                            <C>                    <C>                     <C>                      <C>
          2000                  $________               $_________              $     0                $__________

          1999                  $ 176,000               $    2,000              $     0                $   178,000

          1998*                 $  20,000               $        0              $     0                $    20,000
</TABLE>


* Covers period from August 12, 1998 (commencement of operations) through the
end of the Fund's first fiscal year on September 30, 1998.

                               Berger Growth Fund


<TABLE>
<CAPTION>
   Fiscal Year Ended            Investment            Administrative          Advisory Fee
     September 30,             Advisory Fee            Service Fee               Waiver                  TOTAL
   -----------------           ------------           --------------          ------------             -----------
<S>                            <C>                    <C>                     <C>                      <C>

          2000                 $__________               $_______                $     0                $__________

          1999                 $10,835,000               $144,000                $     0                $10,979,000

          1998                 $12,939,000               $173,000                $     0                $13,112,000
</TABLE>



                          Berger Large Cap Growth Fund



<TABLE>
<CAPTION>
   Fiscal Year Ended            Investment            Administrative          Advisory Fee
     September 30,             Advisory Fee            Service Fee               Waiver              TOTAL
-----------------------        ------------           --------------          ------------         -----------
<S>                            <C>                    <C>                     <C>                  <C>
          2000                  $_________               $_______                $    0            $_________

          1999                  $2,740,000               $ 37,000                $    0            $2,777,000

          1998                  $2,539,000               $ 34,000                $    0            $2,573,000
</TABLE>


                              Berger Balanced Fund


<TABLE>
<CAPTION>
   Fiscal Year Ended            Investment            Administrative          Advisory Fee
     September 30,             Advisory Fee            Service Fee               Waiver             TOTAL
-----------------------        ------------           --------------          ------------        ----------
<S>                            <C>                    <C>                     <C>                 <C>

          2000                  $_________               $_______                $      0         $_________

          1999                  $  616,000               $  9,000                $      0         $  625,000

          1998                  $  168,000               $  2,000                $(16,000)        $  154,000
</TABLE>




                                      -39-
<PAGE>   164


                  Each Fund has appointed State Street Bank and Trust Company
("State Street"), 801 Pennsylvania, Kansas City, MO 64105, as its recordkeeping
and pricing agent. In addition, State Street also serves as the Funds'
custodian,custodian. Each of the Funds has appointed DST Systems, Inc. ("DST"),
P.O. Box 219958, Kansas City, MO 64121, as its transfer agent and dividend
disbursing agent. Approximately 32% of the outstanding shares of DST are owned
by Stilwell.

                  As recordkeeping and pricing agent, State Street calculates
the daily net asset value of each Fund and performs certain accounting and
recordkeeping functions required by the Funds. The Funds pay State Street a
monthly base fee plus an asset-based fee. State Street is also reimbursed for
certain out-of-pocket expenses.

                  State Street, as custodian, and its subcustodians have custody
and provide for the safekeeping of the Funds' securities and cash, and receive
and remit the income thereon as directed by the management of the Funds. The
custodian and subcustodians do not perform any managerial or policy-making
functions for the Funds. For its services as custodian, State Street receives an
asset-based fee plus certain transaction fees and out-of-pocket expenses.

                  As transfer agent and dividend disbursing agent, DST maintains
all shareholder accounts of record; assists in mailing all reports, proxies and
other information to the Funds' shareholders; calculates the amount of, and
delivers to the Funds' shareholders, proceeds representing all dividends and
distributions; and performs other related services. For these services, DST
receives a fee from the Funds at an annual rate of $14.00 per open Fund
shareholder account, subject to preset volume discounts, plus certain
transaction fees and fees for closed accounts, and is reimbursed for
out-of-pocket expenses.

                  All of State Street's and DST's fees are subject to reduction
pursuant to an agreed formula for certain earnings credits on the cash balances
of the Funds. Earnings credits received by each Fund can be found on the Fund's
Statement of Operations in the Annual Report incorporated by reference into this
Statement of Additional Information.

BERGER INTERNATIONAL FUND

                  The Berger International Fund is allocated and bears
indirectly its pro rata share of the aggregate annual operating expenses of the
Berger International Portfolio, since all of the investable assets of the Fund
are invested in the Portfolio.

                  Expenses of the Portfolio include, among others, its pro rata
share of the expenses of Berger Worldwide Portfolios Trust, of which the
Portfolio is a series, such as: expenses of registering the Trust with
securities authorities; the compensation of its independent trustees; expenses
of preparing reports to investors and to governmental offices and commissions;
expenses of meetings of investors and trustees of the Trust; legal fees; and
insurance premiums of the Trust. Expenses of the Portfolio also include, among
others, the fees payable to the advisor under the Investment Advisory Agreement;
expenses connected with the execution of portfolio transactions, including
brokerage commissions on purchases and sales of portfolio securities (which are
considered a cost of securities of the Portfolio); custodian fees; auditors'
fees; interest and taxes imposed on the Portfolio; transfer agent, recordkeeping
and pricing agent fees; and such other non-recurring and extraordinary items as
may arise from time to time.

                  Expenses of the Berger International Fund include, among
others, its pro rata share of the expenses of the Berger Worldwide Funds Trust,
of which the Fund is a series, such as: expenses of registering the Trust with
securities authorities; expenses of meetings of the shareholders of the Trust;
and legal fees. Expenses of the Fund also include, among others, registration
and filing fees incurred in registering shares of the Fund with securities
authorities; 12b-1 fees; taxes imposed on the Fund; the fee payable to the
Advisor under the Administrative Services Agreement; and such other
non-recurring and extraordinary items as may arise from time to time.




                                      -40-
<PAGE>   165


                  SERVICE ARRANGEMENTS FOR THE FUND. Under an Administrative
Services Agreement with the Berger International Fund, Berger LLC serves as the
administrator of the Fund. In this capacity, it is responsible for administering
and managing all aspects of the Fund's day-to-day operations, subject to the
oversight of the trustees of the Fund.






                  Berger is responsible, at its expense, for furnishing (or
procuring other parties to furnish) all administrative services reasonably
necessary for the operation of the Fund, including recordkeeping and pricing
services, custodian services, transfer agency and dividend disbursing services,
tax and audit services, insurance, printing and mailing to shareholders of
prospectuses and other required communications, and certain other administrative
and recordkeeping services, such as coordinating matters relating to the
operations of the Fund, monitoring the Fund's status as a "regulated investment
company" under the Internal Revenue Code, coordinating registration of
sufficient Fund shares under federal and state securities laws, arranging for
and supervising the preparation of registration statements, tax returns, proxy
materials, financial statements and reports for filing with regulatory
authorities and distribution to shareholders of the Fund. Under the
Administrative Services Agreement, the Fund pays Berger a fee at an annual rate
equal to the lesser of (i) 0.45% of its average daily net assets, or (ii)
Berger's annual cost to provide or procure these services (including the fees of
any services providers whose services are procured by Berger), plus an
additional 0.02% of the Fund's average daily net assets. The trustees of the
Fund regularly review amounts paid to and expenditures incurred pursuant to the
Administrative Services Agreement. In addition, in the event that Berger's
duties under the Administrative Services Agreement are delegated to another
party, Berger may take into account, in calculating the cost of such services,
only the costs incurred by such other party in discharging the delegated duties.
Prior to May 12, 2000 BBOI Worldwide served as the Fund's administrator, in
which capacity it was responsible for providing these services.

                  Also prior to May 12, 2000, under a Sub-Administration
Agreement then in effect between BBOI Worldwide and Berger LLC, Berger was
delegated the responsibility to perform certain of the administrative and
recordkeeping services required under the Administrative Services Agreement and
to procure, at BBOI Worldwide's expense, third parties to provide the services
not provided by Berger LLC. Under the Sub-Administration Agreement, Berger LLC
was paid a fee of 0.25% of the Fund's average daily net assets for its services.
During certain periods, Berger LLC voluntarily waived all or a portion of its
fee, which did not affect the fee paid by the Fund to BBOI Worldwide.

                  State Street has been appointed to provide recordkeeping and
pricing services to the Fund, including calculating the daily net asset value of
the Fund, and to perform certain accounting and recordkeeping functions that it
requires. In addition, State Street has been appointed to serve as the Fund's
custodian, and DST has been appointed to




                                      -41-
<PAGE>   166


serve as the Fund's transfer agent and dividend disbursing agent. The fees of
State Street and DST are all paid by Berger LLC. Approximately 32% of the
outstanding shares of DST are owned by Stilwell.

                  SERVICE ARRANGEMENTS FOR THE PORTFOLIO. Under the Investment
Advisory Agreement between Berger LLC and the Berger International Portfolio, in
addition to providing investment advisory services, Berger is responsible for
providing or arranging for all managerial and administrative services necessary
for the operations of the Portfolio. Berger is responsible for providing certain
of these services at its own expense, such as compliance monitoring and
preparing investor communications, which have been delegated to Berger LLC as
part of the Sub-Administration Agreement discussed above. Other services are
procured from third party service providers at the Portfolio's own expense, such
as custody, recordkeeping and pricing services. Prior to May 12, 2000, BBOI
Worldwide served as the Fund's administrator, in which capacity it was
responsible for providing these services.

                  The Portfolio has appointed State Street as recordkeeping and
pricing agent to calculate the daily net asset value of the Portfolio and to
perform certain accounting and recordkeeping functions required by the
Portfolio. In addition, the Portfolio has appointed State Street as its
custodian. The Portfolio has appointed DST to serve as its transfer agent. For
custodian, recordkeeping and pricing services, the Portfolio pays fees directly
to State Street based on a percentage of its net assets, subject to certain
minimums, and reimburses State Street for certain out-of-pocket expenses.

                  The following table shows the total dollar amounts of advisory
fees paid by the Portfolio to Berger LLC or BBOI Worldwide for the periods
indicated and the amount of such fees waived on account of excess expenses under
applicable expense limitations. The investment advisory fee is paid by the
Portfolio and is borne indirectly pro rata by the Fund and the other mutual
funds invested in the Portfolio.

                         Berger International Portfolio



<TABLE>
<CAPTION>
Fiscal Year Ended        Investment          Advisory Fee        TOTAL
September 30,            Advisory Fee        Waiver
------------------       ------------        ------------        ----------
<S>                      <C>                 <C>                 <C>
        2000             $_________          $_______            $_________

        1999             $2,010,000          $(17,000)           $1,993,000

        1998             $1,531,000          $(61,000)           $1,470,000
</TABLE>



                  Administrative Service Fee In addition, the Fund paid Berger
LLC or BBOI Worldwide the following amounts for its services under the
Administrative Services Agreement.

Berger International Fund



<TABLE>
<CAPTION>
Fiscal Year Ended September 30,              Administrative Services Fee
-------------------------------              ---------------------------
<S>                                          <C>
              2000                           $____________

              1999                           $      87,000

              1998                           $      85,000
</TABLE>







                                      -42-
<PAGE>   167


                  As noted above with respect to the other Berger Funds, all of
State Street's fees are subject to reduction pursuant to an agreed formula for
certain earnings credits on the cash balances maintained with it as custodian.
Earnings credits received by the Portfolio can be found on the Portfolio's
Statement of Operations in the Annual Report incorporated by reference into this
Statement of Additional Information.


12b-1 PLANS

         Each of the Funds has adopted a 12b-1 plan (the "Plan") pursuant to
Rule 12b-1 under the Investment Company Act of 1940, which provides for the
payment to Berger LLC of a 12b-1 fee of 0.25% per annum of the Fund's average
daily net assets to finance activities primarily intended to result in the sale
of Fund shares. The Plans are intended to benefit the Funds by attracting new
assets into the Funds and thereby affording potential cost reductions due to
economies of scale.

         The expenses paid by Berger LLC may include, but are not limited to:

o        payments made to, and costs incurred by, a Fund's principal underwriter
         in connection with the distribution of Fund shares, including payments
         made to and expenses of officers and registered representatives of the
         Distributor;

o        payments made to and expenses of other persons (including employees of
         Berger LLC) who are engaged in, or provide support services in
         connection with, the distribution of Fund shares, such as answering
         routine telephone inquiries and processing shareholder requests for
         information;

o        compensation (including incentive compensation and/or continuing
         compensation based on the amount of customer assets maintained in a
         Fund) paid to securities dealers, financial institutions and other
         organizations which render distribution and administrative services in
         connection with the distribution of Fund shares, including services to
         holders of Fund shares and prospective investors;

o        costs related to the formulation and implementation of marketing and
         promotional activities, including direct mail promotions and
         television, radio, newspaper, magazine and other mass media
         advertising;

o        costs of printing and distributing prospectuses and reports to
         prospective shareholders of Fund shares;

o        costs involved in preparing, printing and distributing sales literature
         for Fund shares;

o        costs involved in obtaining whatever information, analyses and reports
         with respect to market and promotional activities on behalf of a Fund
         relating to Fund shares that Berger LLC deems advisable;

o        and such other costs relating to Fund shares as the Fund may from time
         to time reasonably deem necessary or appropriate in order to finance
         activities primarily intended to result in the sale of Fund shares.

                  Such 12b-1 fee payments are to be made by each Fund to Berger
LLC with respect to each fiscal year of the Fund without regard to the actual
distribution expenses incurred by Berger LLC in such year; that is, if the
distribution expenditures incurred by Berger LLC are less than the total of such
payments in such year, the difference is not to be reimbursed to the Fund by
Berger LLC, and if the distribution expenditures incurred by Berger LLC are more
than the total of such payments, the excess is not to be reimbursed to Berger
LLC by the Fund.

                  From time to time a Fund may engage in activities which
jointly promote the sale of Fund shares and other funds that are or may in the
future be advised or administered by Berger LLC, which costs are not readily
identifiable as related to any one fund. In such cases, a Fund's 12b-1 fees may
be used to finance the joint promotion of the shares of that Fund, along with
the shares of the other fund. Berger LLC allocates the cost of such joint
promotional activity among the funds involved on the basis of their respective
net assets, unless otherwise directed by the directors or trustees.


                  The current 12b-1 Plans will continue in effect until the end
of April 2001, and from year to year thereafter if approved at least annually by
each Fund's directors or trustees and those directors or trustees who are not
interested persons of the Fund and have no direct or indirect financial interest
in the operation of the Plan or any related agreements by votes cast in person
at a meeting called for such purpose. The Plans may not be amended to increase
materially the amount to be spent on distribution of Fund shares without
shareholder approval.




                                      -43-
<PAGE>   168


                  Following are the payments made to Berger LLC pursuant to the
Plans for the fiscal year ended September 30, 2000:



<TABLE>
<CAPTION>
              FUND                                                12B-1 PAYMENT
              ----                                                -------------
<S>                                                               <C>
              Berger Information Technology Fund(1)               $____________

              Berger New Generation Fund(1)                       $____________

              Berger Select Fund                                  $____________

              Berger Small Company Growth Fund(1)                 $____________

              Berger Mid Cap Growth Fund                          $____________

              Berger Mid Cap Value Fund                           $____________

              Berger Growth Fund                                  $____________

              Berger International Fund                           $____________

              Berger Large Cap Growth Fund                        $____________

              Berger Balanced Fund                                $____________
</TABLE>



(1) The Berger Information Technology Fund, the Berger New Generation Fund, and
the Berger Small Company Growth Fund have adopted a 12b-1 Plan only with respect
to the Investor Shares class of shares, which is the class of shares of those
Funds covered by this SAI.


OTHER EXPENSE INFORMATION

                  The directors or trustees of each of the Funds have authorized
portfolio transactions to be placed on an agency basis through DST Securities,
Inc. ("DSTS"), a wholly-owned broker-dealer subsidiary of DST. When transactions
are effected through DSTS, the commission received by DSTS is credited against,
and thereby reduces, certain operating expenses that the Fund would otherwise be
obligated to pay. No portion of the commission is retained by DSTS. See Section
6--Brokerage Policy for further information concerning the expenses reduced as a
result of these arrangements. DSTS may be considered an affiliate of Berger LLC
due to the ownership interest of Stilwell in both DST and Berger LLC.

                  The Funds and/or their advisors have entered into arrangements
with certain brokerage firms and other companies(such as recordkeepers and
administrators) to provide administrative services (such as sub-transfer agency,
recordkeeping, shareholder communications, sub-accounting and/or other services)
to investors purchasing shares of the Funds through those firms or companies. A
Fund's advisor or a Fund (if approved by its directors or trustees) may pay fees
to these companies for their services. These companies may also be appointed as
agents for or authorized by the Funds to accept on their behalf purchase and
redemption requests that are received in good order. Subject to Fund approval,
certain of these companies may be authorized to designate other entities to
accept purchase and redemption orders on behalf of the Funds.



                                      -44-
<PAGE>   169

                  The Fund's advisor may also enter into arrangements with
organizations that solicit clients for the advisor, which may include clients
who purchase shares of the Funds. While the specific terms of each arrangement
may differ, generally, the fee paid by the advisor under such arrangements is
based on the value of the referred client's assets managed by the advisor. None
of the fees paid to such organizations will be borne by the Funds.

DISTRIBUTOR

                  The distributor (principal underwriter) of each Fund's shares
is Berger Distributors LLC (the "Distributor"), 210 University Boulevard, Suite
900, Denver, CO 80206. The Distributor may be reimbursed by Berger LLC for its
costs in distributing the Funds' shares.

6.                BROKERAGE POLICY

                  Although each Fund retains full control over its own
investment policies, under the terms of its Investment Advisory Agreement, the
advisor is directed to place the portfolio transactions of the Fund. Where
applicable, the advisor may delegate placement of brokerage to a Fund's
sub-advisor. A report on the placement of brokerage business is given to the
directors or trustees of each Fund every quarter, indicating the brokers with
whom Fund portfolio business was placed and the basis for such placement. The
brokerage commissions paid by the Funds during the past three fiscal years were
as follows:

                              BROKERAGE COMMISSIONS


<TABLE>
<CAPTION>
                                             FOR THE YEAR/PERIOD ENDED SEPTEMBER 30,
                                             ---------------------------------------
                                             2000             1998              1999
                                             ----             ----              ----
<S>                                          <C>              <C>               <C>
BERGER INFORMATION TECHNOLOGY FUND           $___________     $      4,000(1)   $     10,000(1)

BERGER NEW GENERATION FUND                   $___________     $    349,000      $    340,000

BERGER SELECT FUND                           $___________     $    972,000      $    536,000(2)

BERGER SMALL COMPANY GROWTH FUND             $___________     $    807,000      $    890,000

BERGER MID CAP GROWTH FUND                   $___________     $     27,000      $     15,000(2)

BERGER MID CAP VALUE FUND                    $___________     $    129,000      $     33,000(3)
</TABLE>




                                      -45-
<PAGE>   170


<TABLE>
<CAPTION>
                                             FOR THE YEAR/PERIOD ENDED SEPTEMBER 30,
                                             ---------------------------------------
                                             2000             1998              1999
                                             ----             ----              ----
<S>                                          <C>                                <C>
BERGER GROWTH FUND                           $___________     $  6,010,000      $  9,258,000

BERGER INTERNATIONAL FUND(4)                 $___________     $    155,000      $    225,000

BERGER LARGE CAP GROWTH FUND                 $___________     $    805,000      $  2,397,000

BERGER BALANCED FUND                         $___________     $    291,000      $    207,000
</TABLE>



(1) The Fund's fiscal year changed from February 28 to September 30 as part of a
reorganization effective July 1999. Accordingly, the brokerage commissions shown
for 1997 were paid by the Fund's predecessor during the period April 8, 1997
(commencement of operations of the predecessor) to February 28, 1998, and the
brokerage commissions shown for 1998 were paid by the Fund's predecessor during
its fiscal year ended February 28, 1999. Brokerage commissions shown for 1999
were paid by the Fund for the period from March 1, 1999 through September 30,
1999.

(2) Covers period from December 31, 1997 (commencement of operations) through
the end of the Fund's first fiscal year on September 30, 1998.


(3) Covers period from August 12, 1998 (commencement of operations) through the
end of the Fund's first fiscal year on September 30, 1998.





                  The Investment Advisory Agreement each Fund has with its
advisor authorizes and directs the advisor to place portfolio transactions for
the Fund only with brokers and dealers who render satisfactory service in the
execution of orders at the most favorable prices and at reasonable commission
rates. Where applicable, the Sub-Advisory Agreement for each sub-advised Fund
similarly directs the sub-advisor. However, each Agreement specifically
authorizes the advisor or sub-advisor to place such transactions with a broker
with whom it has negotiated a commission that is in excess of the commission
another broker or dealer would have charged for effecting that transaction if
the advisor or sub-advisor determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker viewed in terms of either that particular
transaction or the overall responsibilities of the advisor or sub-advisor.
Accordingly, the advisor or sub-advisor does not have an obligation to seek the
lowest available commission.

                  In accordance with this provision of the Agreement, portfolio
brokerage business of each Fund may be placed with brokers who provide useful
brokerage and research services to the advisor or, where applicable, the
sub-advisor. The Fund's advisor or sub-advisor may consider the value of
research provided as a factor in the choice of brokers. "Research" includes
computerized on-line stock quotation systems and related data feeds from stock
exchanges, computerized trade order entry, execution and confirmation systems,
fundamental and technical analysis data and software, computerized stock market
and business news services, economic research, account performance data and
computer hardware used for the receipt of electronic research services and
broker and other third-party equity research, such as publications or writings
which furnish advice as to the value of securities and advisability of
investing, and analyses and reports concerning issuers, industries,



                                      -46-
<PAGE>   171

securities, market trends, and portfolio strategies. Research may be provided
orally, in print, or electronically. These include a service used by the
independent directors or trustees of the Funds in reviewing the Investment
Advisory Agreements.

                  In some cases, a product or services termed "research" may
serve other functions unrelated to the making of investment decisions. When a
product has such a mixed use, the advisor or sub-advisor will make a good faith
allocation of the cost of the product according to the use made of it. The
portion of the product that assists the advisor or sub-advisor in the investment
decision-making process may be paid for with a Fund's commission dollars. The
advisor or sub-advisor pays for the portion of the product that is not
"research" with its own funds. Accordingly, the decision whether and how to
allocate the costs of such a product presents a conflict of interest for the
advisor or sub-advisor.

                  The Funds' advisors and sub-advisors do not enter into formal
agreements with any brokers regarding the placement of securities transactions
because of any such brokerage or research services that they provide. An advisor
or sub-advisor may, however, make arrangements with and maintain internal
procedures for allocating transactions to brokers who provide such services to
encourage them to provide services expected to be useful to the advisor's or
sub-advisor's clients, including the Funds. Brokers may suggest a level of
business they would like to receive in return for the brokerage and research
they provide. The advisor or sub-advisor then determines whether to continue
receiving the research and brokerage provided and the approximate amount of
commissions it is willing to pay to continue the brokerage and research
arrangement with each broker. The actual amount of commissions a broker may
receive may be more or less than a broker's suggested allocations, depending on
the advisor's or sub-advisor's level of business, market conditions and other
relevant factors. Even under these arrangements, however, the placement of all
Fund transactions, must be consistent with the Funds' brokerage placement and
execution policies, and must be directed to a broker who renders satisfactory
service in the execution of orders at the most favorable prices and at
reasonable commission rates.


                  During the fiscal year ended September 30, 2000, of the
brokerage commissions paid by the Funds, the following amounts were paid to
brokers who provided to the Funds selected brokerage or research services
prepared by the broker or subscribed or paid for by the broker on behalf of the
Funds:



<TABLE>
<CAPTION>
  FUND                                                 AMOUNT OF TRANSACTIONS            AMOUNT OF COMMISSIONS
  ----                                                 ----------------------            ---------------------
<S>                                                   <C>                                <C>
  Berger Information Technology Fund                          $_______                         $__________

  Berger New Generation Fund                                  $_______                         $__________

  Berger Select Fund                                          $_______                         $__________

  Berger Small Company Growth Fund                            $_______                         $__________

  Berger Mid Cap Growth Fund                                  $_______                         $__________

  Berger Mid Cap Value Fund                                   $_______                         $__________
</TABLE>




                                      -47-
<PAGE>   172


<TABLE>
<CAPTION>
  FUND                                                 AMOUNT OF TRANSACTIONS            AMOUNT OF COMMISSIONS
  ----                                                 ----------------------            ---------------------
<S>                                                   <C>                                <C>
  Berger Growth Fund                                          $_______                         $__________

  Berger International Fund                                   $_______                         $__________

  Berger Large Cap Growth Fund                                $_______                         $__________

  Berger Balanced Fund                                        $_______                         $__________
</TABLE>


                  These brokerage and research services received from brokers
are often helpful to the advisor or sub-advisor in performing its investment
advisory responsibilities to the Funds, and the availability of such services
from brokers does not reduce the responsibility of the advisor's or
sub-advisor's advisory personnel to analyze and evaluate the securities in which
the Funds invest. The brokerage and research services obtained as a result of
the Funds' brokerage business also will be useful to the advisor or sub-advisor
in making investment decisions for its other advisory accounts, and, conversely,
information obtained by reason of placement of brokerage business of such other
accounts may be used by the advisor or sub-advisor in rendering investment
advice to the Funds. Although such brokerage and research services may be deemed
to be of value to the advisor or sub-advisor, they are not expected to decrease
the expenses that the advisor or sub-advisor would otherwise incur in performing
its investment advisory services for the Funds nor will the advisory fees that
are received by the advisor or sub-advisor from the Funds be reduced as a result
of the availability of such brokerage and research services from brokers.

                  The directors or trustees of each of the Funds have authorized
portfolio transactions to be placed on an agency basis through DSTS, a
wholly-owned broker-dealer subsidiary of DST. When transactions are effected
through DSTS, the commission received by DSTS is credited against, and thereby
reduces, certain operating expenses that the Fund would otherwise be obligated
to pay. No portion of the commission is retained by DSTS. DSTS may be considered
an affiliate of Berger LLC due to the ownership interest of Stillwell in both
DST and Berger LLC.

                  Included in the brokerage commissions paid by the Funds during
the last three fiscal years, as stated in the preceding Brokerage Commissions
table, are the following amounts paid to DSTS, which served to reduce each
Fund's out-of-pocket expenses as follows:

                 DSTS COMMISSIONS AND RELATED EXPENSE REDUCTIONS


<TABLE>
<CAPTION>
                                                                                                                 Reduction
                                     DSTS         Reduction        DSTS             Reduction    DSTS            in
                                     Commissions  in Expenses      Commissions      in Expenses  Commissions     Expenses
                                     Paid         FYE              Paid             FYE          Paid            FYE
                                     FYE 9/30/00  9/30/00(1)       FYE 9/30/99      9/30/99(1)   FYE 9/30/98     9/30/98(1)
                                     -----------  ----------       ----------       ----------   -----------     ----------
<S>                                  <C>          <C>              <C>              <C>          <C>             <C>
Berger Information Technology        $_________   $_________       $        0(2)    $        0   $       0(2)    $        0
Fund

Berger New Generation Fund           $_________   $_________       $    6,000(3)    $    4,500   $    2,000      $    1,500

Berger Select Fund                   $_________   $_________       $   61,000(4)    $   46,000   $    9,000(5)   $    7,000(5)
</TABLE>




                                      -48-
<PAGE>   173


<TABLE>
<S>                                  <C>          <C>              <C>              <C>          <C>             <C>
Berger Small Company Growth          $_________   $_________       $    6,000(6)    $    4,500   $        0      $        0
Fund

Berger Mid Cap Growth Fund           $        0   $        0       $        0       $        0   $        0(7)   $        0(7)

Berger Mid Cap Value Fund            $        0   $        0       $        0       $        0   $        0(8)   $        0(8)

Berger Growth Fund                   $_________   $_________       $  399,000(9)    $  299,000   $  390,000      $  293,000

Berger International Fund            $        0   $        0       $        0       $        0   $        0      $        0

Berger Large Cap Growth Fund         $_________   $_________       $   32,000(10)   $   24,000   $   28,000      $   21,000

Berger Balanced Fund                 $_________   $_________       $    1,500(11)   $    1,000   $        0      $        0
</TABLE>


(1) No portion of the commission is retained by DSTS. Difference between
commissions paid through DSTS and reduction in expenses constitute commissions
paid to an unaffiliated clearing broker.

(2) The Fund's fiscal year changed from February 28 to September 30 as part of a
reorganization effective July 2, 1999. Accordingly, the amounts shown for FYE
9/30/97 were paid by the Fund's predecessor during the period April 8, 1997
(commencement of operations of the predecessor) to February 28, 1998, and the
amounts shown for FYE 9/30/98 were paid by the Fund's predecessor during its
fiscal year ended February 28, 1999. Amounts shown for FYE 9/30/99 cover the
period for March 1, 1999 to September 30, 1999.

(3) Constitutes 2% of the aggregate brokerage commissions paid by the Berger New
Generation Fund and less than 1% of the aggregate dollar amount of transactions
placed by the Berger New Generation Fund.

(4) Constitutes 6% of the aggregate brokerage commissions paid by the Berger
Select Fund and less than 1% of the aggregate dollar amount of transactions
placed by the Berger Select Fund.

(5) Covers the period from December 31, 1997 (commencement of operations)
through September 30, 1998.

(6) Constitutes 1% of the aggregate brokerage commissions paid by Berger Small
Company Growth Fund and less than 1% of the aggregate dollar amount of
transaction placed by Berger Small Company Growth Fund.

(7) Covers the period from December 31, 1997 (commencement of operations)
through September 30, 1998.

(8) Covers the period from August 12, 1998 (commencement of operations) through
September 30, 1998.

(9) Constitutes 7% of the aggregate brokerage commissions paid by the Berger
Growth Fund and less than 1% of the aggregate dollar amount of transactions
placed by the Berger Growth Fund.


(10) Constitutes 4% of the aggregate brokerage commissions paid by the Berger
Large Cap Growth Fund and less than 1% of the aggregate dollar amount of
transactions placed by the Berger Large Cap Growth Fund.


(11) Constitutes less than 1% of the aggregate brokerage commissions paid by the
Berger Balanced Fund and less than 1% of the aggregate dollar amount of
transactions placed by Berger Balanced Fund.




                  Each Fund's advisor or sub-advisor places securities orders
with a limited number of major institutional brokerage firms chosen for the
reliability and quality of execution; commission rates; quality of research
coverage of major U.S. companies, the U.S. economy and the securities markets;
promptness; back office capabilities; capital strength and financial



                                      -49-
<PAGE>   174

stability; prior performance in serving the advisor and its clients; and
knowledge of other buyers and sellers. The advisor or sub-advisor selects the
broker for each order based on the factors above, as well as the size,
difficulty and other characteristics of the order. The directors or trustees of
the Funds have also authorized sales of shares of the Funds by a broker-dealer
and the recommendations of a broker-dealer to its customers that they purchase
Fund shares to be considered as factors in the selection of broker-dealers to
execute portfolio transactions for the Funds. In addition, the advisor or
sub-advisor may also consider payments made by brokers to a Fund or to other
persons on behalf of a Fund for services provided to the Fund for which it would
otherwise be obligated to pay, such as transfer agency fees. In placing
portfolio business with any such broker or dealer, the advisor will seek the
best execution of each transaction.


                  During the fiscal year ended September 30, 1999, Berger Large
Cap Growth Fund, Berger Balanced Fund and Berger Mid Cap Value Fund acquired
securities of the Funds' regular broker dealers. As of September 30, 2000, these
Funds owned the following securities of its regular broker-dealers with the
following values:



<TABLE>
<CAPTION>
                     FUND                         BROKER/DEALER                           VALUE           SECURITY
                     ----                         -------------                           -----           --------
<S>                                       <C>                                            <C>            <C>
       Berger Large Cap Growth Fund       Morgan Stanley Dean Witter & Co.               $________      Common Stock
                                          The Goldman Sachs Group, Inc.                   ________      Common Stock

       Berger Balanced Fund               Morgan Stanley Dean Witter & Co.                ________      Common Stock
                                          Merrill Lynch & Co.                             ________      Bonds
                                          Bear Stearns                                    ________      Bonds

       Berger Mid Cap Value Fund          Merrill Lynch & Co.                             ________      Common Stock
</TABLE>


7.                HOW TO PURCHASE AND REDEEM SHARES IN THE FUNDS

<TABLE>
<S>                                                                             <C>
                  MINIMUM INITIAL INVESTMENTS:
                           Regular investment                                   $2,000
                           Low Minimum Investment Plan                          $  100
                  MINIMUM SUBSEQUENT INVESTMENTS:
                           Regular investment                                   $   50
                           Regular automatic investment                         $   50
                           Low Minimum Investment Plan
                           (required monthly automatic investments)             $  100
</TABLE>

                  To purchase shares in any of the Funds, simply complete the
application form enclosed with the Prospectus. Then mail it with a check payable
to "Berger Funds" to the following address:

                  Berger Funds
                  P.O. Box 219958
                  Kansas City, MO 64121

                  If a shareholder is adding to an existing account, shares may
also be purchased by placing an order by telephone call to the Funds at
1-800-551-5849 or via on-line access, and remitting payment to DST Systems, Inc.
Payment for shares ordered on-line must be made by electronic funds transfer. In
order to make sure that payment for telephone purchases is received on time,
shareholders are encouraged to remit payment by electronic funds transfer.
Shareholders may also remit payment for telephone purchases by wire or by
overnight delivery.

                  In addition, Fund shares may be purchased through certain
broker-dealers that have established mutual fund programs and certain other
organizations connected with pension and retirement plans. These broker-dealers
and other organizations may charge investors a transaction or other fee for
their services, may require different minimum initial and



                                      -50-
<PAGE>   175

subsequent investments than the Funds and may impose other charges or
restrictions different from those applicable to shareholders who invest in the
Funds directly. Fees charged by these organizations will have the effect of
reducing a shareholder's total return on an investment in Fund shares. No such
charge will apply to an investor who purchases Fund shares directly from a Fund
as described above.

                  Procedures for purchasing, selling (redeeming) and exchanging
Fund shares by telephone and on-line are described in the Prospectus. The Funds
may terminate or modify those procedures and related requirements at any time,
although shareholders of the Funds will be given notice of any termination or
material modification. Berger LLC may, at its own risk, waive certain of those
procedures and related requirements.

                  As described in the Prospectus, the Berger Information
Technology Fund will deduct a 1% redemption fee from a shareholder's redemption
proceeds if the shareholder redeems shares of that Fund held less than 6 months.
Because an exchange involves a redemption of shares followed by a purchase, this
redemption fee will also apply to exchanges of Fund shares held less than 6
months. This fee is intended to discourage investors from short-term trading of
Fund shares and to offset the cost to the Fund of excess brokerage and other
costs incurred as a result of such trading. This fee will not be charged to
retirement plan accounts (such as 401(k)s and 403(b)s) or in the case of
redemptions resulting from the death of the shareholder. This fee will also not
be charged on the redemption of shares obtained through the reinvestment of
dividends paid on Fund shares. If some but not all of the shares in an account
are redeemed, shares are treated as redeemed in an order determined by and
applied uniformly to all accounts by the Fund's sub-transfer agent.

8.                HOW THE NET ASSET VALUE IS DETERMINED


                  The net asset value of each Fund is determined once daily, at
the close of the regular trading session of the New York Stock Exchange (the
"Exchange") (normally 4:00 p.m., Eastern time, Monday through Friday) each day
that the Exchange is open. The Exchange is closed and the net asset value of the
Funds is not determined on weekends and on New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day each year. The per share net asset value
of each Fund is determined by dividing the total value of its securities and
other assets, less liabilities, by the total number of shares outstanding.


                  For those Funds offering classes of shares, net asset value is
calculated by class, and since the Investor Shares and each other class of those
Funds has its own expenses, the per share net asset value of those Funds will
vary by class.


                  Since the Berger International Fund invests all of its
investable assets in the Berger International Portfolio, the value of the Fund's
investable assets will be equal to the value of its beneficial interest in the
Portfolio. The value of securities held in the Portfolio are determined as
described below for the Funds.


                  In determining net asset value for each of the Funds,
securities listed or traded primarily on national exchanges, The Nasdaq Stock
Market and foreign exchanges are valued at the last sale price on such markets,
or, if such a price is lacking for the trading period immediately preceding the
time of determination, such securities are valued at the mean of their current
bid and asked prices. Securities that are traded in the over-the-counter market
are valued at the mean between their current bid and asked prices. The market
value of individual securities held by each Fund will be determined by using
prices provided by pricing services which provide market prices to other mutual
funds or, as needed, by obtaining market quotations from independent
broker/dealers. Short-term money market securities maturing within 60 days are
valued on the amortized cost basis, which approximates market value. All assets
and liabilities initially expressed in terms of non-U.S. dollar currencies are
translated into U.S. dollars at the prevailing market rates as quoted by one or
more banks or dealers shortly before the close of the Exchange. Securities and
assets for which quotations are not readily available or are not representative
of market value may be valued at their fair value determined in good faith
pursuant to consistently applied procedures established by the directors or
trustees. Examples would be when events occur that materially affect the value
of a security at a time when the security is not trading or when the securities
are illiquid.

                  Generally, trading in foreign securities markets is
substantially completed each day at various times prior to the close of the
Exchange. The values of foreign securities used in computing the net asset value
of the shares of a Fund are determined as of the earlier of such market close or
the closing time of the Exchange. Occasionally, events affecting the value of
such securities may occur between the times at which they are determined and the
close of the Exchange, or when the foreign market on which such securities trade
is closed but the Exchange is open, which will not be reflected in the
computation of net



                                      -51-
<PAGE>   176

asset value. If during such periods, events occur which materially affect the
value of such securities, the securities may be valued at their fair value as
determined in good faith pursuant to consistently applied procedures established
by the directors or trustees.

                  A Fund's securities may be listed primarily on foreign
exchanges or over-the-counter dealer markets which may trade on days when the
Exchange is closed (such as a customary U.S. holiday) and on which the Fund's
net asset value is not calculated. As a result, the net asset value of a Fund
may be significantly affected by such trading on days when shareholders cannot
purchase or redeem shares of the Fund.



                                      -52-
<PAGE>   177

9.                INCOME DIVIDENDS, CAPITAL GAINS
                  DISTRIBUTIONS AND TAX TREATMENT

                  This discussion summarizes certain U.S. federal income tax
issues relating to the Funds. As a summary, it is not an exhaustive discussion
of all possible tax ramifications. Accordingly, shareholders are urged to
consult with their tax advisors with respect to their particular tax
consequences.

                  TAX STATUS OF THE FUNDS. If a Fund meets certain investment
and distribution requirements, it will be treated as a "regulated investment
company" (a "RIC") under the Internal Revenue Code and will not be subject to
federal income tax on earnings that it distributes in a timely manner to
shareholders. It also may be subject to an excise tax on undistributed income if
it does not meet certain timing requirements for distributions. Each of the
Funds intends to qualify as a RIC annually and to make timely distributions in
order to avoid income and excise tax liabilities.

                  TAX ON FUND DISTRIBUTIONS. With certain exceptions provided by
law, the Funds will report annually to the Internal Revenue Service and to each
shareholder information about the tax treatment of the shareholder's
distributions. Dividends paid by a Fund, whether received in cash or reinvested
in additional Fund shares, will be treated as ordinary income to the
shareholders. Distributions of net capital gain, whether received in cash or
reinvested in Fund shares, will be taxable to the shareholders, but the rate of
tax will vary depending upon the Fund's holding periods in the assets whose sale
resulted in the capital gain. Dividends and distributions that are declared in
October, November or December but not distributed until the following January
will be considered to be received by the shareholders on December 31.

                  In general, net capital gains from assets held by a Fund for
more than 12 months will be subject to a maximum tax rate of 20% and net capital
gains from assets held for 12 months or less will be taxed as ordinary income.
Distributions will be subject to these capital gains rates, regardless of how
long a shareholder has held Fund shares. Assets contributed to a Fund in an
in-kind purchase of Fund shares may generate more gain upon their sale than if
the assets had been purchased by the Fund with cash contributed to the Fund in a
cash purchase of Fund shares.

                  If a Fund's distributions for a taxable year exceeds its tax
earnings and profits available for distribution, all or a portion of its
distributions may be treated as a return of capital. To the extent a
distribution is treated as a return of capital, a shareholder's basis in his or
her Fund shares will be reduced by that amount.


                  If a shareholder has elected to receive dividends and/or
capital gain distributions in cash and the U.S. Postal Service is unable to
deliver checks to the shareholder's address of record, or if a shareholder's
checks remain uncashed for six months, the Funds reserve the right to reinvest
the amount distributed in shares of the applicable Fund at the NAV next computed
after the check is cancelled, and to convert the shareholder's distribution
option from receiving cash to having all dividend and other distributions
reinvested in additional shares. In addition, no interest will accrue on amounts
represented by uncashed distribution or redemption checks.

                  Additionally, the Funds reserve the right to reinvest
distributions of less than $10 in shares of the applicable Fund at the NAV next
computed.


                  TAX ON REDEMPTIONS OF FUND SHARES. Shareholders may be subject
to tax on the redemption of their Fund shares. In general, redemptions may give
rise to a capital gain or loss, the treatment of which will depend on the
shareholder's holding period in the Fund shares. Tax laws may prevent the
deduction of a loss on the sale of Fund shares if the shareholder reinvests in
the Fund shortly before or after the sale giving rise to the loss. Any loss on
the redemption or other sale or exchange of Fund shares held for six months or
less will be treated as a long-term capital loss to the extent of any long-term
capital gain distribution received on the shares.

                  INCOME FROM FOREIGN SOURCES. Dividends and interest received
by the Funds on foreign securities may give rise to withholding and other taxes
imposed by foreign countries, although these taxes may be reduced by applicable
tax treaties. Foreign taxes will generally be treated as expenses of the Funds,
unless a Fund has more than 50% of its assets invested in foreign corporate
securities at the end of the Fund's taxable year. In that case, for the Funds
that make an election, shareholders of the Fund may be able to deduct (as an
itemized deduction) or claim a foreign tax credit for their share of foreign
taxes, subject to limitations prescribed in the tax law.



                                      -53-
<PAGE>   178

                  If a Fund invests in a foreign corporation that is a passive
foreign investment company (a "PFIC"), special rules apply that may affect the
tax treatment of gains from the sale of the stock and may cause a Fund to incur
IRS tax and interest charges. However, the Fund may be eligible to elect one of
two alternative tax treatments with respect to PFIC shares which would avoid
these taxes and charges, but also may affect, among other things, the amount and
character of gain or loss and the timing of the recognition of income with
respect to PFIC shares. Accordingly, the amounts, character and timing of income
distributed to shareholders of a Fund holding PFIC shares may differ
substantially as compared to a fund that did not invest in PFIC shares.

                  INCOME FROM CERTAIN TRANSACTIONS. Some or all of the Funds'
investments may include transactions that are subject to special tax rules.
Transactions involving foreign currencies may give rise to a gain or loss that
could affect a Fund's ability to make ordinary dividend distributions.
Investment in certain financial instruments, such as options, futures contracts
and forward contracts, may require annual recognition of unrealized gains and
losses. Transactions that are treated as "straddles" may affect the character
and/or timing of other gains and losses of the Fund. If a Fund enters into a
transaction (such as a "short sale against the box") that reduces the risk of
loss on an appreciated financial position that it already holds, the entry into
the transaction may constitute a constructive sale and require immediate
recognition of gain.

                  BACKUP WITHHOLDING. In general, if a shareholder is subject to
backup withholding, a Fund will be required to withhold federal income tax at a
rate of 31% from distributions to that shareholder. These payments are
creditable against the shareholder's federal income tax liability.

                  FOREIGN SHAREHOLDERS. Foreign shareholders of a Fund generally
will be subject to a 30% U.S. withholding tax on dividends paid by a Fund from
ordinary income and short-term capital gain, although the rate may be reduced by
a tax treaty. If a foreign shareholder dies while owning Fund shares, those
shares may be subject to U.S. estate taxes.


                  TAX STATUS OF THE BERGER INTERNATIONAL PORTFOLIO. The Berger
International Portfolio, in which the Berger International Fund invests all of
its investable assets, has in previous years been classified as a partnership
for U.S. federal income tax purposes, and it intends to retain that
classification. The Berger International Fund is treated for various federal tax
purposes as owning an allocable share of the Portfolio's assets and will be
allocated a share of the Portfolio's income, gain and loss.


10.               SUSPENSION OF REDEMPTION RIGHTS

                  The right of redemption may be suspended for any period during
which the New York Stock Exchange is closed or the Securities and Exchange
Commission determines that trading on the Exchange is restricted, or when there
is an emergency as determined by the Securities and Exchange Commission as a
result of which it is not reasonably practicable for a Fund to dispose of
securities owned by it or to determine the value of its net assets, or for such
other period as the Securities and Exchange Commission may by order permit for
the protection of shareholders of a Fund.

                  Each Fund intends to redeem its shares only for cash, although
it retains the right to redeem its shares in-kind under unusual circumstances,
in order to protect the interests of the remaining shareholders, by the delivery
of securities selected from its assets at its discretion. Each Fund is, however,
governed by Rule 18f-1 under the Investment Company Act of 1940 pursuant to
which the Fund is obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the net assets of the Fund during any 90-day period for any
one shareholder. For purposes of this threshold, each underlying account holder
whose shares are held of record in certain omnibus accounts is treated as one
shareholder. Should redemptions by any shareholder during any 90-day period
exceed such limitation, the Fund will have the option of redeeming the excess in
cash or in-kind. If shares are redeemed in-kind, the redeeming shareholder
generally will incur brokerage costs in converting the assets to cash. The
redeeming shareholder may have difficulty selling the securities and recovering
the amount of the redemption if the securities are illiquid. The method of
valuing securities used to make redemption in-kind will be the same as the
method of valuing portfolio securities described under Section 8.

11.               TAX-SHELTERED RETIREMENT PLANS

                  The Funds offer several tax-qualified retirement plans for
individuals, businesses and non-profit organizations, including a Profit-Sharing
Plan, a Money Purchase Pension Plan, an Individual Retirement Account (IRA), a
Roth IRA and a 403(b) Custodial Account for adoption by employers and
individuals who wish to participate in such Plans. For information on



                                      -54-
<PAGE>   179

other types of retirement plans offered by the Funds, please call 1-800-333-1001
or write to the Funds c/o Berger LLC, P.O. Box 5005, Denver, CO 80217.

PROFIT-SHARING AND MONEY PURCHASE PENSION PLANS

                  Employers, self-employed individuals and partnerships may make
tax-deductible contributions to the tax-qualified retirement plans offered by
the Funds. All income and capital gains accumulated in the Plans are tax free
until withdrawn. The amounts that are deductible depend upon the type of Plan or
Plans adopted.

                  If you, as an employer, self-employed person or partnership,
adopt the Profit-Sharing Plan, you may vary the amount of your contributions
from year to year and may elect to make no contribution at all for some years.
If you adopt the Money Purchase Pension Plan, you must commit yourself to make a
contribution each year according to a formula in the Plan that is based upon
your employees' compensation or your earned income. By adopting both the
Profit-Sharing and the Money Purchase Pension Plan, you can increase the amount
of contributions that you may deduct in any one year.


                  If you wish to purchase shares of any Fund in conjunction with
one or both of these tax-qualified plans, you may use an Internal Revenue
Service approved prototype Trust Agreement and Retirement Plan available from
the Funds. State Street serves as trustee of the Plan, for which it charges an
annual trustee's fee for each Fund or Cash Account Trust Money Portfolio
(discussed below) in which the participant's account is invested. Contributions
under the Plans are invested exclusively in shares of the Funds or the Cash
Account Trust Money Market Portfolios, which are then held by the trustee under
the terms of the Plans to create a retirement fund in accordance with the tax
code.


                  Distributions from the Profit-Sharing and Money Purchase
Pension Plans generally may not be made without penalty until the participant
reaches age 59-1/2 and must begin no later than April 1 of the calendar year
following the year in which the participant attains age 70-1/2. A participant
who is not a 5% owner of the employer may postpone such distributions to April 1
of the calendar year following the year of retirement. This exception does not
apply to distributions from an individual retirement account (IRA). Except for
required distributions after age 70-1/2, periodic distributions over more than
10 years and the distribution of any after-tax contributions, distributions are
subject to 20% Federal income tax withholding unless those distributions are
rolled directly to another qualified plan or an IRA. Participants may not be
able to receive distributions immediately upon request because of certain
requirements under federal tax law. Since distributions which do not satisfy
these requirements can result in adverse tax consequences, consultation with an
attorney or tax advisor regarding the Plans is recommended. You should also
consult with your tax advisor regarding state tax law implications of
participation in the Plans.

                  In order to receive the necessary materials to create a
Profit-Sharing or Money Purchase Pension Plan, please write to the Berger Funds,
c/o Berger LLC, P.O. Box 5005, Denver, Colorado 80217, or call 1-800-333-1001.
Trustees for 401(k) or other existing plans interested in utilizing Fund shares
as an investment or investment alternative in their plans should contact the
Berger Funds at 1-800-333-1001.

INDIVIDUAL RETIREMENT ACCOUNT (IRA)

                  If you are an individual with compensation or earned income,
whether or not you are actively participating in an existing qualified
retirement plan, you can provide for your own retirement by adopting an IRA.
Under an IRA, you can contribute each year up to the lesser of 100% of your
compensation or $2,000. If you are married and you file a joint return, you and
your spouse together may make contributions totaling up to $4,000 to two IRAs
(with no more than $2,000 being contributed to either account) if your joint
income is $4,000 or more, even if one spouse has no earned income. If neither
you nor your spouse are active participants in an existing qualified retirement
plan, or if your income does not exceed certain amounts, the amounts contributed
to your IRA can be deducted for Federal income tax purposes whether or not your
deductions are itemized. If you or your spouse are covered by an existing
qualified retirement plan, the deductibility of your IRA contributions will be
phased out for federal income tax purposes if your income exceeds specified
amounts, although the income level at which your IRA contributions will no
longer be deductible is higher if only your spouse (but not you) is an active
participant. However, whether your contributions are deductible or not, the
income and capital gains accumulated in your IRA are not taxed until the account
is distributed.

                  If you wish to create an IRA to invest in shares of any Fund,
you may use the Fund's IRA custodial agreement form which is an adaptation of
the form provided by the Internal Revenue Service. Under the IRA custodial
agreement,



                                      -55-
<PAGE>   180


State Street will serve as custodian, for which it will charge an annual
custodian fee for each Fund or Cash Account Trust Money Market Portfolio in
which the IRA is invested.


                  Distributions from an IRA generally may not be made without
penalty until you reach age 59 1/2 and must begin no later than April 1 of the
calendar year following the year in which you attain age 70 1/2. Since
distributions which do not satisfy these requirements can result in adverse tax
consequences, consultation with an attorney or tax advisor is recommended. You
should also consult with your tax advisor about state taxation of your account.

                  In order to receive the necessary materials to create an IRA
account, please write to the Berger Funds, c/o Berger LLC, P.O. Box 5005,
Denver, Colorado 80217, or call 1-800-333-1001.


ROTH IRA

                  If you are an individual with compensation or earned income,
you may contribute up to the lesser of $2,000 or 100% of your compensation to a
Roth IRA, as long as your income does not exceed a specified income level
($95,000 for single individuals, $150,000 for married individuals filing
jointly). A Roth IRA is similar in many respects to a traditional IRA, as
described above. However, the maximum amount you may contribute to a Roth IRA is
phased out between that income level and a maximum income amount ($110,000 and
$160,000, respectively), and you may not make any contribution at all to a Roth
IRA if your income exceeds the maximum income amount. Also, you can make
contributions to a Roth IRA even after you reach age 70-1/2, and you are not
required to take distributions from a Roth IRA prior to your death.

                  Contributions to a Roth IRA are not deductible for federal
income tax purposes. However, the income and capital gains accumulated in a Roth
IRA are not taxed while held in the IRA, and distributions can be taken tax-free
if the Roth IRA has been established for a minimum of five years and the
distribution is after age 59-1/2, for a first time home purchase, or upon death
or disability.


                  An individual with an income of less than $100,000 who is not
married filing separately can roll his or her existing IRA into a Roth IRA.
However, the individual must pay taxes on the fair market value of the existing
IRA on the date of the rollover. Please consult your tax advisor concerning Roth
IRA rollovers. [Add language re where to write?]


403(b) CUSTODIAL ACCOUNTS

                  If you are employed by a public school system or certain
federally tax-exempt private schools, colleges, universities, hospitals,
religious and charitable or other nonprofit organizations, you may establish a
403(b) Custodial Account. Your employer must participate in the establishment of
the account.

                  If your employer participates, it will automatically deduct
the amount you designate from your gross salary and contribute it to your 403(b)
Custodial Account. The amount which you may contribute annually under a salary
reduction agreement is generally the lesser of $9,500 or your exclusion
allowance, which is based upon a specified formula, and other Internal Revenue
Code limits apply. There is a $50 minimum investment in the 403(b) Custodial
Account. Contributions made to the account reduce the amount of your current
income subject to Federal income tax. Federal income tax is not paid on your
contribution until you begin making withdrawals. In addition, all income and
capital gains accumulated in the account are tax-free until withdrawn.

                  Withdrawals from your 403(b) Custodial Agreement may begin as
soon as you reach age 59-1/2 and must begin no later than April 1 of the year
following the later of the calendar year in which you attain age 70-1/2 or the
calendar year in which you retire. Except for required distributions after age
70-1/2 and periodic distributions over more than 10 years, distributions are
subject to 20% Federal income tax withholding unless those distributions are
rolled directly to another 403(b) account or annuity or an individual retirement
account (IRA). You may not be able to receive distributions immediately upon
request because of certain notice requirements under federal tax law. Since
distributions which do not satisfy these requirements can result in adverse tax
consequences, consultation with an attorney or tax advisor regarding the 403(b)
Custodial Account is recommended. You should also consult with your tax advisor
about state taxation of your account.



                                      -56-
<PAGE>   181


                  Individuals who wish to purchase shares of a Fund in
conjunction with a 403(b) Custodial Account may use a Custodian Account
Agreement and related forms available from the Funds. State Street serves as
custodian of the 403(b) Custodial Account, for which it charges an annual
custodian fee for each Fund or Cash Account Trust Money Market Portfolio in
which the participant's account is invested.


                  In order to receive the necessary materials to create a 403(b)
Custodial Account, please write to the Berger Funds, c/o Berger LLC, P.O. Box
5005, Denver, Colorado 80217, or call 1-800-333-1001.

12.               EXCHANGE PRIVILEGE AND SYSTEMATIC WITHDRAWAL PLAN

                  A shareholder who owns shares of any of the Funds worth at
least $5,000 at the current net asset value may establish a Systematic
Withdrawal account from which a fixed sum will be paid to the shareholder at
regular intervals by the Fund in which the shareholder is invested.

                  To establish a Systematic Withdrawal account, the shareholder
deposits Fund shares with the Fund and appoints the Fund as agent to redeem
shares in the shareholder's account in order to make monthly, quarterly,
semi-annual or annual withdrawal payments to the shareholder of a fixed amount.
The minimum withdrawal payment is $50.00. These payments generally will be made
on the 25th day of the month.

                  Withdrawal payments are not yield or income on the
shareholder's investment, since portions of each payment will normally consist
of a return of the shareholder's investment. Depending on the size of the
disbursements requested and the fluctuation in value of the Fund's portfolio,
redemptions for the purpose of making such disbursements may reduce or even
exhaust the shareholder's account.

                  The shareholder may vary the amount or frequency of withdrawal
payments, temporarily discontinue them, or change the designated payee or
payee's address, by notifying the Fund. The shareholder may, of course, make
additional deposits of Fund shares in the shareholder's account at any time.

                  Since redemption of shares to make withdrawal payments is a
taxable event, each investor should consult a tax advisor concerning proper tax
treatment of the redemption.

                  Any shareholder may exchange any or all of the shareholder's
shares in any of the Funds for shares of any of the other available Berger Funds
or for shares of the Money Market Portfolio, the Government Securities Portfolio
or the Tax-Exempt Portfolio of the Cash Account Trust ("CAT Portfolios"),
separately managed, unaffiliated money market funds, without charge, after
receiving a current prospectus of the other Fund or CAT Portfolio. The exchange
privilege with the CAT Portfolios does not constitute an offering or
recommendation of the shares of any such CAT Portfolio by any of the Funds or
Berger LLC. Berger LLC is compensated for administrative services it performs
with respect to the CAT Portfolios.

                  Exchanges into or out of the Funds are made at the net asset
value per share next determined after the exchange request is received. Each
exchange represents the sale of shares from one Fund and the purchase of shares
in another, which may produce a gain or loss for income tax purposes. In
addition, exchanges out of the Berger Information Technology Fund will be
subject to a redemption fee of 1% if shares are exchanged within 6 months of
purchase.

                  An exchange of shares may be made by written request directed
to DST Systems, Inc., via on-line access, or simply by telephoning the Berger
Funds at 1-800-551-5849. This privilege may be terminated or amended by any of
the Funds, and is not available in any state in which the shares of the Fund or
CAT Portfolio being acquired in the exchange are not eligible for sale.
Shareholders automatically have telephone and on-line privileges to authorize
exchanges unless they specifically decline this service in the account
application or in writing.

13.               PERFORMANCE INFORMATION

                  From time to time in advertisements, the Funds may discuss
their performance ratings as published by recognized mutual fund statistical
services, such as Lipper Analytical Services, Inc., CDA Investment Technologies,
Inc., Morningstar, Inc., or Value Line Investment Survey or by publications of
general interest such as The Wall Street Journal, Investor's Business Daily,
Money, Barron's, Financial World or Kiplinger's Personal Finance Magazine. In
addition, the Funds may compare their performance to that of recognized
broad-based securities market indices, including the Standard & Poor's



                                      -57-
<PAGE>   182

500 Stock Index, the Dow Jones Industrial Average, the Wilshire 5000 Index, the
Russell 2000 Stock Index, the Standard & Poor's 400 Mid-Cap Index, the Standard
& Poor's 600 Small Cap Index, Morgan Stanley Capital International EAFE (Europe,
Australasia, Far East) Index, the Dow Jones World Index, the Standard &
Poor's/BARRA Value Index, the Nasdaq Composite Index, the Lehman Brothers
Intermediate Term Government/Corporate Bond Index or the InformationWeek 100
Index, or more narrowly-based or blended indices which reflect the market
sectors in which that Fund invests.

                  The total return of each Fund is calculated for any specified
period of time by assuming the purchase of shares of the Fund at the net asset
value at the beginning of the period. Each dividend or other distribution paid
by the Fund is assumed to have been reinvested at the net asset value on the
reinvestment date. The total number of shares then owned as a result of this
process is valued at the net asset value at the end of the period. The
percentage increase is determined by subtracting the initial value of the
investment from the ending value and dividing the remainder by the initial
value.

                  Each Fund's total return reflects the Fund's performance over
a stated period of time. An average annual total return reflects the
hypothetical annually compounded return that would have produced the same total
return if the Fund's performance had been constant over the entire period. Total
return figures are based on the overall change in value of a hypothetical
investment in each Fund. Because average annual total returns for more than one
year tend to smooth out variations in a Fund's return, investors should
recognize that such figures are not the same as actual year-by-year results.

                  All performance figures for the Funds are based upon
historical results and do not assure future performance. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.

                  Quotations of average annual total return for the Funds will
be expressed in terms of the average annual compounded rate of return of a
hypothetical investment in the Fund over periods of 1, 3, 5 and 10 years, or for
the life of the Fund, if shorter. These are the rates of return that would
equate the initial amount invested to the ending redeemable value. These rates
of return are calculated pursuant to the following formula: P(1 + T)(n) = ERV
(where P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years and ERV = the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the period). All total
return figures reflect the deduction of a proportional share of Fund expenses on
an annual basis, and assume that all dividends and distributions are reinvested
when paid.

PREDECESSOR PERFORMANCE QUOTATIONS


                  BERGER INTERNATIONAL FUND. The Berger International Portfolio
(in which all the investable assets of the Berger International Fund are
invested) commenced operations upon the transfer to the Portfolio of assets held
in a pooled trust (the "Pool") maintained by Citizens Bank New Hampshire, for
which BIAM had provided day-to-day portfolio management as sub-advisor since the
inception of the Pool. At that time, BIAM's bank holding company parent
indirectly owned a 23.5% interest in the parent of Citizens Bank New Hampshire.
The investment objective, policies, limitations, guidelines and strategies of
the Pool were materially equivalent to those of the Berger International Fund
and the Portfolio. Assets from the Pool were transferred on October 11, 1996, to
a separate "feeder" fund investing in the Portfolio which, in turn, transferred
those assets to the Portfolio in exchange for an interest in the Portfolio. As a
result of this transaction, the investment holdings in the Portfolio were the
same as the investment holdings in the portfolio of the Pool immediately prior
to the transfer, except for the seed capital provided by Berger LLC.


                  The Pool was not a registered investment company since it was
exempt from registration under the Investment Company Act of 1940 (the "1940
Act"). Since, in a practical sense, the Pool constitutes the "predecessor" of
the Portfolio, the Fund calculates its performance for periods commencing prior
to the transfer of the Pool's assets to the Portfolio by including the Pool's
total return, adjusted at that time to reflect any increase in fees and expenses
applicable in operating the Fund, including the Fund's pro rata share of the
aggregate annual operating expenses, net of fee waivers, of the Portfolio. Those
fees and expenses included 12b-1 fees.


                  Performance data quoted for the Berger International Fund for
periods prior to October 1996 include the performance of the Pool and include
periods before the Fund's and the Portfolio's registration statements became
effective. As noted above, the Pool was not registered under the 1940 Act and
thus was not subject to certain investment restrictions that are imposed on the
Fund and the Portfolio by the 1940 Act. If the Pool had been registered under
the 1940 Act, the Pool's performance might have been adversely affected.




                                      -58-
<PAGE>   183




                  BERGER INFORMATION TECHNOLOGY FUND. The Berger Information
Technology Fund is the accounting survivor and successor of a fund previously
known as the InformationTech 100(R) Fund, which was reorganized into the Fund
effective July 2, 1999. As part of the reorganization, all of the then-existing
shares of the predecessor fund were exchanged for Institutional Shares of the
Fund, and the Fund commenced offering the Investor Shares covered in this
Statement of Additional Information.

                  The Fund quotes its historical performance track record for
both of its classes of shares based on its predecessor's only shares outstanding
prior to the reorganization. Accordingly, performance data for the Investor
Shares for periods prior to the date of the reorganization do not reflect the
0.25% per year 12b-1 fee currently borne by the Investor Shares. Total return of
the Investor Shares and other classes of shares of the Fund will be calculated
separately. Because each class of shares is subject to different expenses, the
performance of each class for the same period will differ.

AVERAGE ANNUAL TOTAL RETURNS


                  The average annual total return for each of the Funds for
various periods ending September 30, 2000, are shown on the following table:



<TABLE>
<CAPTION>
FUND                                1-YEAR         3-YEAR        5-YEAR         10-YEAR       LIFE OF FUND
----                                ------         ------        ------         -------       ------------
<S>                                <C>            <C>            <C>            <C>           <C>
Berger Information Technology       _____%          N/A           N/A            N/A           _____%
Fund  - Investor Shares(1)
                                                                                              (since 4/8/97)

Berger New Generation Fund -        _____%         _____%         N/A            N/A           _____%
Investor Shares
                                                                                              (since 3/29/96)

Berger Select Fund                  _____%          N/A           N/A            N/A           _____%
                                                                                              (since 12/31/97)

Berger Small Company Growth Fund    _____%         _____%        _____%         N/A           _____%
- Investor Shares                                                                             (since 12/30/93)

Berger Mid Cap Growth Fund          _____%         N/A           N/A            N/A           _____%
                                                                                              (since 12/31/97)
</TABLE>




                                       59
<PAGE>   184


<TABLE>
<S>                                 <C>           <C>            <C>            <C>           <C>
Berger Mid Cap Value  Fund          _____%         N/A           N/A            N/A           _____%
                                                                                              (since 8/12/98)

Berger Growth Fund                  _____%         _____%        _____%         _____%        _____%
                                                                                              (since 9/30/74)(4)

Berger International Fund(5)        _____%         _____%        _____%         _____%        _____%
                                                                                              (since 7/31/89)
Berger Large Cap Growth Fund        _____%         _____%        _____%         _____%        _____%
                                                                                              (since 9/30/74)(4)

Berger Balanced Fund                _____%         N/A           N/A            N/A           _____%
                                                                                              (since 9/30/97)
</TABLE>



(1) Performance data for the Investor Shares include periods prior to the Fund's
adoption of share classes as part of its reorganization on July 2, 1999, and
therefore, for those periods, do not reflect the 0.25% per year 12b-1 fee which
has been paid by the Investor Shares since the inception of the class on that
date.

(2) Performance data for the Investor Shares include periods prior to the Fund's
adoption of class designations on February 14, 1997, and therefore, for those
periods, do not reflect the 0.25% per year 12b-1 fee applicable to the Investor
Shares, which came into effect on that date.

(3) Covers the period from October 21, 1987 (date of the Fund's first public
offering) through September 30, 1999.


(4) Life of Fund covers the period from September 30, 1974 (immediately prior to
Berger LLC assuming the duties as the investment advisor for those Funds)
through September 30, 1999. Since the 12b-1 fees for the Berger Growth Fund and
the Berger Large Cap Growth Fund did not take effect until June 19, 1990, the
performance figures on the table do not reflect the deduction of the 12b-1 fees
for the full length of the 10-year and longer periods.

(5) Data for the Berger International Fund covering periods prior to October 11,
1996, reflect the performance of the pool of assets transferred on that date
into the Berger International Portfolio in which all of the Fund's assets are
invested, adjusted at that time to reflect any increase in expenses expected in
operating the Fund, including the Fund's pro rata share of the aggregate annual
operating expenses, of the Portfolio net of fee waivers.


14.               ADDITIONAL INFORMATION

FUND ORGANIZATION


                  BERGER GROWTH FUND AND BERGER LARGE CAP GROWTH FUND. The
Berger Growth Fund and Berger Large Cap Growth Fund are separate corporations
which were incorporated under the laws of the State of Maryland on March 10,
1966, as "The One Hundred Fund, Inc." and "The One Hundred and One Fund, Inc.",
respectively. The names "Berger One Hundred Fund(R)", "Berger 100 Fund(SM)",
"Berger One Hundred and One Fund(R)" and "Berger 101 Fund(R)" were adopted by
the respective Funds as service marks and trade names in November 1989 and were
registered as service marks in December 1991. In 1990, the shareholders of the
Berger Large Cap Growth Fund approved changing its formal corporate name to
"Berger One Hundred and One Fund, Inc." and the Fund began doing business under
the trade name "Berger Growth and Income Fund, Inc." in January 1996. The name
"Berger Growth and Income Fund(R)" was registered as a service mark in August
1998. In January 2000, The One Hundred Fund, Inc. and the Berger One Hundred and
One Fund, Inc. formally changed their corporate names to the "Berger Growth
Fund, Inc." and the "Berger Growth and Income Fund, Inc." respectively and the
name "Berger Growth Fund(SM)" was adopted as a trade name.



                                       60
<PAGE>   185


In January 2001, the Berger Growth and Income Fund formally changed its
corporate name to the "Berger Large Cap Growth Fund, Inc." and the name "Berger
Growth Fund(SM)" was adopted as a trade name.




                  Each of the Berger Growth Fund and the Berger Large Cap Growth
Fund has only one class of securities, its Capital Stock, with a par value of
one cent per share, of which 200,000,000 shares are authorized for issue by the
Berger Growth Fund and 100,000,000 shares are authorized for issue by the Berger
Large Cap Growth Fund. Shares of the Funds are fully paid and nonassessable when
issued. All shares issued by a Fund participate equally in dividends and other
distributions by the Fund, and in the residual assets of the Fund in the event
of its liquidation.


                  BERGER SMALL COMPANY GROWTH FUND, BERGER NEW GENERATION FUND,
BERGER BALANCED FUND, BERGER SELECT FUND, BERGER MID CAP GROWTH FUND, BERGER MID
CAP VALUE FUND AND BERGER INFORMATION TECHNOLOGY FUND. The Berger Small Company
Growth Fund is a separate series established on August 23, 1993, under the
Berger Investment Portfolio Trust, a Delaware business trust established under
the Delaware Business Trust Act. The name "Berger Small Company Growth Fund(R)"
was registered as a service mark in September 1995. The Berger Small Company
Growth Fund had no class designations until July 6, 1999, when all of the
then-existing shares were designated as Investor Shares, which are covered in
this Statement of Additional Information, and the Fund commenced offering a
separate class known as Institutional Shares covered in a separate Prospectus
and Statement of Additional Information.

                  The Berger New Generation Fund was the second series created
under the Berger Investment Portfolio Trust, established on December 21, 1995.
The name "Berger New Generation Fund(R)" was registered as a service mark in
December 1996. The Berger Balanced Fund was the third series created under the
Berger Investment Portfolio Trust, established on August 22, 1997. The name
"Berger Balanced Fund(R)" was registered as a service mark in September 1998.
The Berger New Generation Fund had no class designations until July 6, 1999,
when all of the then-existing shares were designated as Investor Shares, which
are covered in this Statement of Additional Information, and the Fund commenced
offering a separate class known as Institutional Shares covered in a separate
Prospectus and Statement of Additional Information.

                  The Berger Select Fund and the Berger Mid Cap Growth Fund were
the fourth and fifth series created under the Trust, established on November 13,
1997. The Berger Mid Cap Value Fund was the sixth series created under the
Berger Investment Portfolio Trust, established on May 21, 1998.

                  The Berger Information Technology Fund was the seventh series
created under the Berger Investment Portfolio Trust, established on February 18,
1999. The Fund is the successor to the fund formerly known as the
InformationTech 100(R) Fund. The InformationTech 100(R) Fund commenced
operations on April 8, 1997, as a separate series of the Advisors Series Trust,
a Delaware business trust. The InformationTech 100(R) Fund was then reorganized
into the Fund in a transaction that became effective in July 1999. As part of
the reorganization, all of the then-existing shares of the predecessor fund were
exchanged for Institutional Shares of the Fund, and the Fund commenced offering
the Investor Shares covered in this Statement of Additional Information.

                  The Trust is authorized to issue an unlimited number of shares
of beneficial interest in series or portfolios. Currently, the Funds named above
are the only series established under the Trust, although others may be added in
the future. The Trust is also authorized to establish multiple classes of shares
representing differing interests in an existing or new series. Shares of the
Funds are fully paid and nonassessable when issued. Each share has a par value
of $.01. All shares issued by each Fund participate equally in dividends and
other distributions by the Fund, and in the residual assets of the Fund in the
event of its liquidation.


                  BERGER INTERNATIONAL FUND. The Berger Worldwide Funds Trust is
a Delaware business trust organized on May 31, 1996, under the name Berger/BIAM
Worldwide Funds Trust. In May, 2000, the Trust changed its name to Berger
Worldwide Funds Trust. The Berger International Fund was established on May 31,
1996, as a series of the Trust. The Fund was originally named the Berger/BIAM
International Fund and changed its name in May 2000 to the Berger International
Fund. The Trust is authorized to issue an unlimited number of shares of
beneficial interest in series or portfolios. Currently, the series comprising
the Fund is one of three series established under the Trust, although others may
be added in the future. The Trust is also authorized to establish multiple
classes of shares representing differing interests in an existing or new series.
Shares of the Fund are fully paid and non-assessable when issued. Each share has
a



                                       61
<PAGE>   186

par value of $.01. All shares issued by the Fund participate equally in
dividends and other distributions by the Fund, and in the residual assets of the
Fund in the event of its liquidation.


                  Berger Worldwide Portfolios Trust is also a Delaware business
trust organized on May 31, 1996, under the name Berger/BIAM Worldwide Portfolios
Trust. In May 2000, the Trust changed its name to Berger Worldwide Portfolios
Trust. The Berger International Portfolio (in which all of the investable assets
of the Berger International Fund are invested) was established on May 31, 1996,
as a series of that Trust. The Portfolio was originally named the Berger/BIAM
International Portfolio and changed its name in May 2000 to the Berger
International Portfolio. Like the Berger International Fund, the Portfolio is a
diversified, open-end management investment company. The Portfolio commenced
operations upon the transfer to the Portfolio of assets held in a pooled trust.
See "Performance Information -- Predecessor Performance Data -- Berger
International Fund" in Section 13 above for additional information on the asset
transfer. The Berger Worldwide Portfolios Trust is authorized to sell unlimited
interests in series or portfolios. Interests may be divided into classes.
Currently, the series comprising the Portfolio is the only series established
under that Trust, although others may be added in the future.


                  Each investor in the Portfolio, including the Fund, is
entitled to a vote in proportion to the amount of its investment in the
Portfolio. Whenever the Fund is requested to vote as an investor in the
Portfolio on matters pertaining to the Portfolio (other than a vote by the Fund
to continue the operation of the Portfolio upon the withdrawal of another
investor in the Portfolio), the Fund will hold a meeting of its shareholders and
will cast all of its votes as an investor in the Portfolio in the same
proportion as directed by the votes of the Fund's shareholders. Fund
shareholders who do not vote will not affect the votes cast by the Fund at the
meeting of the Portfolio investors. The percentage of the votes representing the
Fund's shareholders who do not vote will be voted by the Fund in the same
proportion as the Fund's shareholders who do, in fact, vote.




                  DELAWARE BUSINESS TRUST INFORMATION. Under Delaware law,
shareholders of the Funds organized as series of Delaware Business Trusts will
enjoy the same limitations on personal liability as extended to stockholders of
a Delaware corporation. Further, the Trust Instruments of those Trusts provides
that no shareholder shall be personally liable for the debts, liabilities,
obligations and expenses incurred by, contracted for or otherwise existing with
respect to, the Trusts or any particular series (fund) of the Trusts. However,
the principles of law governing the limitations of liability of beneficiaries of
a business trust have not been authoritatively established as to business trusts
organized under the laws of one jurisdiction but operating or owning property in
other jurisdictions. In states that have adopted legislation containing
provisions comparable to the Delaware Business Trust Act, it is believed that
the limitation of liability of beneficial owners provided by Delaware law should
be respected. In those jurisdictions that have not adopted similar legislative
provisions, it is possible that a court might hold that the



                                       62
<PAGE>   187

shareholders of the Trusts are not entitled to the limitations of liability set
forth in Delaware law or the Trust Instruments and, accordingly, that they may
be personally liable for the obligations of the Trusts.

                  In order to protect shareholders from such potential
liability, the Trust Instruments require that every written obligation of the
Trusts or any series thereof contain a statement to the effect that such
obligation may only be enforced against the assets of the Trusts or such series.
The Trust Instruments also provides for indemnification from the assets of the
relevant series for all losses and expenses incurred by any shareholder by
reason of being or having been a shareholder, and that the Trusts shall, upon
request, assume the defense of any such claim made against such shareholder for
any act or obligation of the relevant series and satisfy any judgment thereon
from the assets of that series.

                  As a result, the risk of a shareholder of the Funds in those
Trusts incurring financial loss on account of shareholder liability is limited
to circumstances in which the Fund itself would be unable to meet its
obligations. The Trusts believe that the risk of personal liability to
shareholders of the Fund is therefore remote. The trustees intend to conduct the
operations of the Trusts and the Funds so as to avoid, to the extent possible,
liability of shareholders for liabilities of the Trusts or the Funds.





                  CORPORATE GOVERNANCE AND OTHER INFORMATION PERTAINING TO ALL
FUNDS. None of the Funds is required to hold annual shareholder meetings unless
required by the Investment Company Act of 1940 or other applicable law or unless
called by the directors or trustees. If shareholders owning at least 10% of the
outstanding shares of the Berger Growth Fund, the Berger Large Cap Growth Fund
or any of the Trusts so request, a special shareholders' meeting of that Fund or
Trust will be held for the purpose of considering the removal of a director or
trustee, as the case may be. Special meetings will be held for other purposes if
the holders of at least 25% of the outstanding shares of any of those Funds or
Trusts so request. Subject to certain limitations, the Funds/Trusts will
facilitate appropriate communications by shareholders desiring to call a special
meeting for the purpose of considering the removal of a director or trustee.


                  Shareholders of the Funds and, where applicable, the other
series/classes of the same business trust, generally vote separately on matters
relating to those respective series/classes, although they vote together and
with the holders of any other series/classes of the same business trust in the
election of trustees of the trust and on all matters relating to the trust as a
whole. Each full share of each Fund has one vote.

                  Shares of the Funds have non-cumulative voting rights, which
means that the holders of more than 50% of the shares voting for the election of
directors or trustees can elect 100% of the directors or trustees if they choose
to do so and, in such event, the holders of the remaining less than 50% of the
shares voting for the election of directors or trustees will not be able to
elect any person or persons as directors or trustees.


                  Shares of the Funds have no preemptive rights. There are no
sinking funds or arrearage provisions which may affect the rights of the Fund
shares. Fund shares have no subscription rights or conversion rights, except
that shareholders of any class of the Berger Information Technology Fund may
convert their shares into shares of any other class of the Fund in the event and
only in the event the shareholder ceases to be eligible to purchase or hold
shares of the original class, or becomes eligible to purchase shares of a
different class, by reason of a change in the shareholder's status under the
conditions of eligibility in effect for such class at that time. Shares of the
Funds may be transferred by endorsement, or other customary methods, but none of
the Funds is bound to recognize any transfer until it is recorded on its books.




                                       63
<PAGE>   188

                  Under governing corporate law, each Fund may enter into a
variety of corporate transactions, such as reorganizations, conversions, mergers
and asset transfers, or may be liquidated. Any such transaction would be subject
to a determination from the directors or trustees that the transaction was in
the best interests of the Fund and its shareholders, and may require obtaining
shareholder approval.

MORE INFORMATION ON SPECIAL FUND STRUCTURES


                  MULTI-CLASS. All of the Funds are permitted to divide their
shares into classes. However, currently only the Berger Information Technology
Fund, the Berger New Generation Fund and the Berger Small Company Growth Fund
have divided their shares into classes and have two classes of shares
outstanding, the Investor Shares covered by this SAI and the Institutional
Shares offered through a separate Prospectus and SAI. These Funds implemented
their multi-class structure by adopting Rule 18f-3 Plans under the 1940 Act
permitting them to issue shares in classes. The Rule 18f-3 Plans govern such
matters as class features, dividends, voting, allocation of income and expenses
between classes, exchange and trustee monitoring of the Plan. Each class is
subject to such investment minimums and other conditions of eligibility as are
set forth in the relevant prospectus for the class, as it may be amended from
time to time. Institutional Shares are designed for institutional, individual
and other investors willing to maintain a higher minimum account balance,
currently set at $250,000. Information concerning Institutional Shares is
available from the Funds at 1-800-259-2820.


                  Subject to the relevant Declaration of Trust or Trust
Instrument and any other applicable provisions, the trustees of those Funds have
the authority to create additional classes, or change existing classes, from
time to time, in accordance with Rule 18f-3 under the Act.


                  MASTER/FEEDER. Unlike other mutual funds that directly acquire
and manage their own portfolios of securities, the Berger International Fund
(referred to as a feeder fund) seeks to achieve its investment objective by
investing all of its investable assets in the Berger International Portfolio
(referred to as a master fund). This two-tier structure is commonly known as a
master/feeder. The Fund has the same investment objective and policies as the
Portfolio. The Fund will invest only in the Portfolio, and the Fund's
shareholders will therefore acquire only an indirect interest in the investments
of the Portfolio. The master/feeder fund structure is still relatively new and
lacks a substantial history.

                  In addition to selling a beneficial interest to the Fund, the
Portfolio may sell beneficial interests to other mutual funds or institutional
investors (that is, other feeder funds). Such investors will invest in the
Portfolio on the same terms and conditions and will pay their proportionate
share of the Portfolio's expenses. However, the other investors investing in the
Portfolio are not required to issue their shares at the same public offering
price as the Fund due to potential differences in expense structures.
Accordingly, investors in the Fund should be aware that these differences may
result in differences in returns experienced by investors in the different funds
that invest in the Portfolio. Such differences in returns are common in this
type of mutual fund structure and are also present in other mutual fund
structures. Information concerning other investors in the Portfolio (for
example, other feeder funds) is available from the Fund at 1-800-706-0539.
Currently, there are two other feeder funds that also invest all of their
investable assets in the Portfolio: the International Equity Fund (designed for
eligible trusts or bank trust departments) which has a minimum balance
requirement of $1,000,000, and the Berger International CORE Fund, which has a
minimum balance requirement of $250,000.


                  The investment objective of the Fund may not be changed
without the approval of the Fund's shareholders. The investment objective of the
Portfolio may not be changed without the approval of the investors in the
Portfolio, including the Fund. If the objective of the Portfolio changes and the
shareholders of the Fund do not approve a parallel change in the Fund's
investment objective, the trustees of the Trust will consider other
alternatives, including seeking an alternative investment vehicle or directly
retaining the Fund's own investment advisor.

                  Smaller funds investing in the Portfolio may be materially
affected by the actions of larger funds investing in the Portfolio. For example,
if a larger fund invests or withdraws from the Portfolio, the remaining funds
may experience lower or higher pro rata operating expenses. Lower returns could
possibly result from a large withdrawal. However, this possibility also exists
for traditionally structured funds which have large or institutional investors.
Also, a fund with a greater pro rata ownership in the Portfolio could have
effective voting control over the operations of the Portfolio.

                  Whenever the Fund is requested to vote as an investor in the
Portfolio on matters pertaining to the Portfolio (other than a vote by the Fund
to continue the operation of the Portfolio upon the withdrawal of another
investor in the Portfolio),



                                       64
<PAGE>   189

the Fund will hold a meeting of its shareholders and will cast all of its votes
as an investor in the Portfolio in the same proportion as directed by the votes
of the Fund's shareholders. Fund shareholders who do not vote will not affect
the votes cast by the Fund at the meeting of the Portfolio investors. The
percentage of the votes representing the Fund's shareholders who do not vote
will be voted by the Fund in the same proportion as the Fund's shareholders who
do, in fact, vote.

                  The Fund may withdraw its investment in the Portfolio at any
time, if the trustees of the Trust determine that it is in the best interests of
the Fund to do so. Certain changes in the Portfolio's investment objective,
policies and limitations may require the Fund to withdraw its investment in the
Portfolio. Upon any such withdrawal, the trustees would consider what action
might be taken, including investing the Fund's assets in another pooled
investment entity having the same investment objective and policies as the Fund
or retaining an investment advisor to manage the Fund's assets in accordance
with the investment policies described above with respect to the Portfolio. Any
such withdrawal could result in a distribution in-kind of portfolio securities
(as opposed to a cash distribution) from the Portfolio. If securities are
distributed, the Fund could incur brokerage, tax or other charges in converting
the securities to cash. In addition, a distribution in-kind may adversely affect
the liquidity of the Fund.


                  The trustees of the Berger Worldwide Funds Trust and the
Berger Worldwide Portfolios Trust are the same individuals. A majority of the
trustees of each of those Trusts who are not "interested persons" (as defined in
the Investment Company Act of 1940) of either Trust have adopted written
procedures reasonably appropriate to deal with potential conflicts of interest
arising from the fact that the same individuals are trustees of both Trusts, up
to and including creating a new board of trustees for one or the other of the
Trusts.


PRINCIPAL SHAREHOLDERS


                  Insofar as the management of the Funds is aware, as of
December 29, 2000, no person owned, beneficially or of record, more than 5% of
the outstanding shares of any of the Funds, except for the following:



<TABLE>
<CAPTION>
OWNER                                     FUND                                                     PERCENTAGE
-----                                     ----                                                     ----------
<S>                                       <C>                                                      <C>
Charles Schwab & Co. Inc. ("Schwab")      Berger Information Technology Fund (Investor Shares)     11.11%
101 Montgomery Street
San Francisco, CA 94104

                                          Berger New Generation Fund (Investor Shares)             21.71%

                                          Berger Select Fund                                       45.81%

                                          Berger Small Company Growth Fund (Investor Shares)       24.80%

                                          Berger Mid Cap Growth Fund                               40.23%

                                          Berger Mid Cap Value Fund                                45.86%

                                          Berger Growth Fund                                       20.99%

                                          Berger International Fund                                25.51%

                                          Berger Large Cap Growth Fund                             27.19%

                                          Berger Balanced Fund                                     36.83%
</TABLE>




                                       65
<PAGE>   190


<TABLE>
<S>                                       <C>                                                      <C>
National Financial Services Corporation   Berger New Generation Fund (Investor Shares)             13.90%
("Fidelity")
200 Liberty St.
One World Financial Center
New York, NY 10281-1003

                                          Berger Select Fund                                       12.01%

                                          Berger Small Company Growth Fund (Investor Shares)        7.68%

                                          Berger Mid Cap Growth Fund                               17.87%

                                          Berger Large Cap Growth Fund                              5.77%

                                          Berger Balanced Fund                                     12.65%

Donaldson Lufkin & Jenrette               Berger Balanced Fund                                      5.42%
("DLJ")
SEC Corp Pershing Division
P.O. Box 2052
Jersey City, NJ 07303

National Investor Services Corp.          Berger Information Technology Fund (Investor Shares)     12.97%
55 Water Street, 32nd Floor
New York, NY 10041-3299

                                          Berger New Generation Fund (Investor Shares)              5.32%

                                          Berger Balanced Fund                                      6.11%
</TABLE>


                  Any person owning more than 25% of the outstanding securities
of a Fund may be deemed to control it. Schwab and Fidelity are believed to hold
their shares of the Funds as nominees for the benefit of their client.


                  In addition, Schwab owned of record 26.08%, and Fidelity owned
of record 8.52% of all the outstanding shares of the Berger Investment Portfolio
Trust, of which the Berger Information Technology Fund, Berger New Generation
Fund, Berger Select Fund, Berger Small Company Growth Fund, Berger Mid Cap
Growth Fund, Berger Mid Cap Value Fund and the Berger Balanced Fund are
outstanding series. Schwab also owned of record




                                      -66-
<PAGE>   191


18.37% of the outstanding shares of the Berger Worldwide Funds Trust, of which
the Berger International Fund is one of three outstanding series.


                  As of January 4, 2000, Schwab owned of record 57.28% of the
outstanding shares of the Berger Information Technology Fund, a series of the
Berger Investment Portfolio Trust, when Schwab's record ownership of the Fund's
Trust shares is added together with record ownership of Institutional Shares of
the Fund. In addition, Bay Isle has advised the Trust that, as January 4, 2000,
it had voting discretion over approximately 27.60% of that fund's outstanding
shares in accounts beneficially owned by various Bay Isle advisory clients. Bay
Isle may be deemed to beneficially own those shares as a result of its voting
discretion.

DISTRIBUTION


                  Berger Distributors LLC, as the Funds' Distributor, is the
principal underwriter of all the Funds' shares. The Distributor is a
wholly-owned subsidiary of Berger LLC. The Distributor is a registered
broker-dealer under the Securities Exchange Act of 1934 and is a member of the
National Association of Securities Dealers, Inc. The Distributor acts as the
agent of a Fund in connection with the sale of the Fund's shares in all states
in which the shares are eligible for sale and in which the Distributor is
qualified as a broker-dealer. David J. Schultz, Chief Financial Officer,
Assistant Secretary and Treasurer of the Distributor, is also Vice President and
Treasurer of the Funds. Janice M. Teague, Vice President and Secretary of the
Distributor, is also Vice President and Assistant Secretary of the Funds. Brian
Ferrie, Vice President and Chief Compliance Officer of the Distributor, is also
Vice President of the Funds. Sue Vreeland, Assistant Secretary of the
Distributor, is also Secretary of the Funds.

                  Each of the Funds and the Distributor are parties to a
Distribution Agreement that continues through April 2001 or 2002, and thereafter
from year to year if such continuation is specifically approved at least
annually by the directors or trustees or by vote of a majority of the
outstanding shares of the Fund and in either case by vote of a majority of the
directors or trustees who are not "interested persons" (as that term is defined
in the Investment Company Act of 1940) of the Fund or the Distributor. The
Distribution Agreement is subject to termination by the Fund or the Distributor
on 60 days' prior written notice, and terminates automatically in the event of
its assignment. Under the Distribution Agreement, the Distributor continuously
offers shares of the Funds and solicits orders to purchase Fund shares at net
asset value. The Distributor is not compensated for its services under the
Distribution Agreement, but may be reimbursed by Berger LLC for its costs in
distributing Fund shares.


OTHER INFORMATION

                  The Funds have each filed with the Securities and Exchange
Commission, Washington, D.C., a Registration Statement under the Securities Act
of 1933, as amended, with respect to the securities of the Funds of which this
Statement of Additional Information is a part. If further information is desired
with respect to any of the Funds or such securities, reference is made to the
Registration Statements and the exhibits filed as a part thereof.


                  Davis, Graham & Stubbs LLP, 1550 Seventeenth Street, Suite
500, Denver, Colorado, acts as counsel to the Funds.


INDEPENDENT ACCOUNTANTS


                   [TO BE UPDATED]






                                      -67-
<PAGE>   192

FINANCIAL INFORMATION

                  A copy of the Annual Report referenced below is enclosed with
this SAI. Additional copies of that Report may be obtained upon request without
charge by calling the Funds at 1-800-333-1001.

Year-End Financial Statements





                   [TO BE UPDATED]






                                      -68-
<PAGE>   193

                                   APPENDIX A

HIGH-YIELD/HIGH-RISK SECURITIES

         Each of the Funds may invest in convertible securities of any quality,
including unrated securities or securities rated below investment grade (Ba or
lower by Moody's, BB or lower by S&P). However, a Fund will not purchase any
security in default at the time of purchase. None of the Funds will invest more
than 20% of the market value of its assets at the time of purchase in
convertible securities rated below investment grade.

         Securities rated below investment grade are subject to greater risk
that adverse changes in the financial condition of their issuers or in general
economic conditions, or an unanticipated rise in interest rates, may impair the
ability of their issuers to make payments of interest and principal or
dividends. The market prices of lower grade securities are generally less
sensitive to interest rate changes than higher-rated investments, but more
sensitive to economic changes or individual corporate developments. Periods of
economic uncertainty and change can be expected to result in volatility of
prices of these securities. Lower rated securities also may have less liquid
markets than higher rated securities, and their liquidity as well as their value
may be adversely affected by poor economic conditions. Adverse publicity and
investor perceptions as well as new or proposed laws may also have a negative
impact on the market for high-yield/high-risk bonds. In the event of an
unanticipated default, a Fund will experience a reduction in its income and
could expect a decline in the market value of the securities affected. The
prices of these securities may be more volatile and the markets for them may be
less liquid than those for higher-rated securities.

         Unrated securities, while not necessarily of lower quality than rated
securities, may not have as broad a market. Unrated securities will be included
in a Fund's percentage limits for investments rated below investment grade,
unless the Fund's advisor deems such securities to be the equivalent of
investment grade. If securities purchased by a Fund are downgraded following
purchase, or if other circumstances cause the Fund to exceed its percentage
limits on assets invested in securities rated below investment grade, the
director or trustees of the Fund, in consultation with the Fund's advisor, will
determine what action, if any, is appropriate in light of all relevant
circumstances.

         Relying in part on ratings assigned by credit agencies in making
investments will not protect a Fund from the risk that the securities will
decline in value, since credit ratings represent evaluations of the safety of
principal, dividend and/or interest payments, and not the market values of such
securities. Moreover, such ratings may not be changed on a timely basis to
reflect subsequent events.

         Although the market for high-yield debt securities has been in
existence for many years and from time to time has experienced economic
downturns, this market has involved a significant increase in the use of
high-yield debt securities to fund highly leverage corporate acquisitions and
restructurings. Past experience may not, therefore, provide an accurate
indication of future performance of the high-yield debt securities market,
particularly during periods of economic recession.

         Expenses incurred in recovering an investment in a defaulted security
may adversely affect a Fund's net asset value. Moreover, the reduced liquidity
of the secondary market for such securities may adversely affect the market
price of, and the ability of a Fund to value, particular securities at certain
times, thereby making it difficult to make specific valuation determinations.

CORPORATE BOND RATINGS

         The ratings of fixed-income securities by Moody's and Standard & Poor's
are a generally accepted measurement of credit risk. However, they are subject
to certain limitations. Ratings are generally based upon historical events and
do not necessarily reflect the future. In addition, there is a period of time
between the issuance of a rating and the update of the rating, during which time
a published rating may be inaccurate.

KEY TO MOODY'S CORPORATE RATINGS

         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 generally known as
high grade bonds. They are rated lower than the best bonds because margins of



                                      -69-
<PAGE>   194

protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.

         A-Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.

         Baa-Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.

         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 good and bad times over the future. Uncertainty of position
characterizes bonds of this class.

         B-Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.

         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 Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic category.

KEY TO STANDARD & POOR'S CORPORATE RATINGS

         AAA-Debt rated AAA has the highest rating assigned by Standard &
Poor's. 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 the higher rated issues only in a 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
debt in this category than 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 will likely have some quality and protective characteristics, these
are out-weighed by the large uncertainties or major risk exposures to adverse
conditions.

         C1-The rating C1 is reserved for income bonds on which no interest is
being paid.

         D-Debt rated D is in default, and payment of interest and/or repayment
of principal is in arrears.

         PLUS (+) OR MINUS (-)-The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.



                                      -70-
<PAGE>   195
FOR MORE INFORMATION:

Additional information about the Funds' investments is available in the Funds'
semi-annual and annual reports to shareholders. The Funds' annual report
contains a discussion of the market conditions and investment strategies that
affected the Funds' performance over the past year.

You may wish to read the Statement of Additional Information (SAI) for more
information on the Funds and the securities they invest in. The SAI is
incorporated into this prospectus by reference, which means that it is
considered to be part of the prospectus.

You can get free copies of the annual and semi-annual reports and the SAI,
request other information or get answers to your questions about the Funds by
calling or writing either a participating insurance company or the Funds at:

Berger Funds
P.O. Box 5005
Denver, CO 80217
(800) 259-2820
bergerfunds.com

Text-only versions of Fund documents can be viewed online or downloaded from the
EDGAR database on the SEC's web site at sec.gov.

You can also obtain copies by visiting the SEC's Public Reference Room in
Washington D.C. For information on the operation of the Public Reference Room,
call 1-202-942-8090. Copies of documents may also be obtained, after paying a
duplicating fee, by sending your request to the following e-mail address:
[email protected]. or by writing to the SEC's Public Reference Section,
Washington, DC 20549-6009.

INVESTMENT COMPANY ACT FILE NUMBER:

Berger Institutional Products Trust 811-07367
o Berger IPT - New Generation Fund
o Berger IPT - Small Company Growth Fund
o Berger IPT - Growth Fund
o Berger/BIAM IPT - International Fund
o Berger IPT - Growth and Income Fund



                                                                    4/00IPT PROS
<PAGE>   196
                       BERGER INFORMATION TECHNOLOGY FUND
                 (A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST)

                              INSTITUTIONAL SHARES



                       STATEMENT OF ADDITIONAL INFORMATION
                      SHAREHOLDER SERVICES: 1-800-960-8427


                  This Statement of Additional Information ("SAI") is not a
prospectus. It relates to the Prospectus for the Berger Information Technology
Fund (the "Fund") -- Institutional Shares, dated January 29, 2001, as it may be
amended or supplemented from time to time, which may be obtained by writing the
Fund at P.O. Box 5005, Denver, Colorado 80217, or calling 1-800-259-2820.


                  This SAI is about the class of shares of the Fund designated
as Institutional Shares. Institutional Shares are designed for pension and
profit-sharing plans, employee benefit trusts, endowments, foundations and
corporations, as well as high net worth individuals, who are willing to maintain
a minimum account balance of $250,000. Shares of the Fund may be offered through
certain financial intermediaries that may charge their customers transaction or
other fees with respect to the customers' investment in the Fund. Institutional
Shares are also made available for purchase and dividend reinvestment in the
account of all holders of Institutional Shares who received their shares in the
Fund's reorganization in July 1999.

                  The Fund is the successor to the InformationTech 100(R) Fund,
which was reorganized into the Fund effective July 2, 1999

                  The following financial statements of the Fund are
incorporated herein by reference:


                                 [TO BE UPDATED]





                  Copies of that Annual Report are available, without charge,
upon request, by calling the Fund at 1-800-259-2820.







                             DATED JANUARY 29, 2001



<PAGE>   197




                                TABLE OF CONTENTS
                                        &
                         CROSS-REFERENCES TO PROSPECTUS


<TABLE>
<CAPTION>
                                                                        CROSS-REFERENCES TO
                                                               PAGE     RELATED DISCLOSURES
SECTION                                                        NO.      IN PROSPECTUS
-------                                                        ----     -------------------
<S>                                                           <C>       <C>
Introduction                                                   1        Contents

1. Investment Strategies and Risks of the Funds.               1        Berger Information Technology Fund; The Fund's
                                                                        Goal and Principal Investment Strategies;
                                                                        Principal Risks; Investment Techniques,
                                                                        Securities and Associated Risks

2. Investment Restrictions                                     14       Berger Funds; Investment Techniques,
                                                                        Securities and the Associated Risks

3. Management of the Fund                                      16       Berger Information Technology Fund;
                                                                        Organization of the Fund

4. Investment Advisors and Sub-Advisor                         22       Berger Information Technology Fund;
                                                                        Organization of the Fund

5. Expenses of the Fund                                        26       Berger Information Technology Fund; Financial
                                                                        Highlights for the Fund; Organization of the
                                                                        Fund

6. Brokerage Policy                                            28       Berger Information Technology Fund;
                                                                        Organization of the Fund

7. How to Purchase and Redeem Shares in the Funds              30       Buying Shares, Selling (Redeeming) Shares

8. How the Net Asset Value is Determined                       31       Your Share Price

9. Income Dividends, Capital Gains Distributions and Tax       32       Distributions and Taxes
   Treatment

10. Suspension of Redemption Rights                            34       Other Information About Your Account

11. Tax-Sheltered Retirement Plans                             34       Tax-Sheltered Retirement Plans

12. Exchange Privilege                                         34       Exchanging Shares

13. Performance Information                                    35       Berger Information Technology Fund; Financial
                                                                        Highlights for the Fund

14. Additional Information                                     36       Organization of the Fund; Special Fund
                                                                        Structures

Financial Information                                          40       Financial Highlights for the Fund
</TABLE>

                                      -i-

<PAGE>   198


                                  INTRODUCTION

                  The Fund described in this SAI is a mutual fund, or open-end,
management investment company. The Fund is a diversified fund.

1.                INVESTMENT STRATEGIES AND RISKS OF THE FUND

                  The Prospectus describes the investment objective of the Fund
and the principal investment policies and strategies used to achieve that
objective. It also describes the principal risks of investing in the Fund.

                  This section contains supplemental information concerning the
types of securities and other instruments in which the Fund may invest, the
investment policies and portfolio strategies that the Fund may utilize and
certain risks attendant to those investments, policies and strategies.

                  COMMON AND PREFERRED STOCKS. Stocks represent shares of
ownership in a company. Generally, preferred stock has a specified dividend and
ranks after bonds and before common stocks in its claim on income for dividend
payments and on assets should the company be liquidated. After other claims are
satisfied, common stockholders participate in company profits on a pro-rata
basis. Profits may be paid out in dividends or reinvested in the company to help
it grow. Increases and decreases in earnings are usually reflected in a
company's stock price, so common stocks generally have the greatest appreciation
and depreciation potential of all corporate securities. While most preferred
stocks pay dividends, the Fund may purchase preferred stock where the issuer has
omitted, or is in danger of omitting, payment of its dividends. Such investments
would be made primarily for their capital appreciation potential. All
investments in stocks are subject to market risk, meaning that their prices may
move up and down with the general stock market, and that such movements might
reduce their value.

                  DEBT SECURITIES. Debt securities (such as bonds or debentures)
are fixed-income securities which bear interest and are issued by corporations
or governments. The issuer has a contractual obligation to pay interest at a
stated rate on specific dates and to repay principal on a specific maturity
date. In addition to market risk, debt securities are generally subject to two
other kinds of risk: credit risk and interest rate risk. Credit risk refers to
the ability of the issuer to meet interest or principal payments as they come
due. The lower the rating given a security by a rating service (such as Moody's
Investor Service ("Moody's") and Standard & Poor's ("S&P")), the greater the
credit risk the rating service perceives with respect to that security. The Fund
will not purchase any nonconvertible securities rated below investment grade (Ba
or lower by Moody's, BB or lower by S&P). In cases where the ratings assigned by
more than one rating agency differ, the Fund will consider the security as rated
in the higher category. If nonconvertible securities purchased by the Fund are
downgraded to below investment grade following purchase, the trustees of the
Fund, in consultation with the Fund's sub-advisor, will determine what action,
if any, is appropriate in light of all relevant circumstances. For a further
discussion of debt security ratings, see Appendix A to this SAI.

                  Interest rate risk refers to the fact that the value of
fixed-income securities (like debt securities) generally fluctuates in response
to changes in interest rates. A decrease in interest rates will generally result
in an increase in the price of fixed-income securities held by the Fund.
Conversely, during periods of rising interest rates, the value of fixed-income
securities held by the Fund will generally decline. Longer-term securities are
generally more sensitive to interest rate changes and are more volatile than
shorter-term securities, but they generally offer higher yields to compensate
investors for the associated risks.

                  Certain debt securities can also present prepayment risk. For
example, a security may contain redemption and call provisions. If an issuer
exercises these provisions when interest rates are

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<PAGE>   199

declining, the Fund could sustain investment losses as well as have to reinvest
the proceeds from the security at lower interest rates, resulting in a decreased
return for the Fund.

                  CONVERTIBLE SECURITIES. The Fund may also purchase debt or
equity securities which are convertible into common stock when the Fund's
sub-advisor believes they offer the potential for a higher total return than
nonconvertible securities. While fixed-income securities generally have a
priority claim on a corporation's assets over that of common stock, some of the
convertible securities which the Fund may hold are high-yield/high-risk
securities that are subject to special risks, including the risk of default in
interest or principal payments which could result in a loss of income to the
Fund or a decline in the market value of the securities. Convertible securities
often display a degree of market price volatility that is comparable to common
stocks. The credit risk associated with convertible securities generally is
reflected by their ratings by organizations such as Moody's or S&P or a similar
determination of creditworthiness by the Fund's sub-advisor. The Fund has no
pre-established minimum quality standards for convertible securities and may
invest in convertible securities of any quality, including lower rated or
unrated securities. However, the Fund will not invest in any security in default
at the time of purchase, and the Fund will invest less than 20% of the market
value of its assets at the time of purchase in convertible securities rated
below investment grade. If convertible securities purchased by the Fund are
downgraded following purchase, or if other circumstances cause 20% or more of
the Fund's assets to be invested in convertible securities rated below
investment grade, the trustees of the Fund, in consultation with the Fund's
sub-advisor, will determine what action, if any, is appropriate in light of all
relevant circumstances. For a further discussion of debt security ratings, see
Appendix A to this SAI.

                  SPECIAL SITUATIONS. The Fund may also invest in "special
situations." Special situations are companies that have recently experienced or
are anticipated to experience a significant change in structure, management,
products or services which may significantly affect the value of their
securities. Examples of special situations are companies being reorganized or
merged, companies emerging from bankruptcy, companies introducing unusual new
products or which enjoy particular tax advantages. Other examples are companies
experiencing changes in senior management, extraordinary corporate events,
significant changes in cost or capital structure or which are believed to be
probable takeover candidates. The opportunity to invest in special situations,
however, is limited and depends in part on the market's assessment of these
companies and their circumstances. By its nature, a "special situation" company
involves to some degree a break with the company's past experience. This creates
greater uncertainty and potential risk of loss than if the company were
operating according to long-established patterns. In addition, stocks of
companies in special situations may decline or not appreciate as expected if an
anticipated change or development does not occur or is not assessed by the
market as favorably as expected.

                  ZEROS/STRIPS. The Fund may invest also in zero coupon bonds or
in "strips." Zero coupon bonds do not make regular interest payments; rather,
they are sold at a discount from face value. Principal and accreted discount
(representing interest accrued but not paid) are paid at maturity. "Strips" are
debt securities that are stripped of their interest coupon after the securities
are issued, but otherwise are comparable to zero coupon bonds. The market values
of "strips" and zero coupon bonds generally fluctuate in response to changes in
interest rates to a greater degree than do interest-paying securities of
comparable term and quality. The Fund will not invest in mortgage-backed or
other asset-backed securities.

                  SECURITIES OF SMALLER COMPANIES. The Fund may invest in
securities of companies with small or mid-sized market capitalizations. Market
capitalization is defined as total current market value of a company's
outstanding common stock. Investments in companies with smaller market
capitalizations may involve greater risks and price volatility (that is, more
abrupt or erratic price movements) than investments in larger, more mature
companies since smaller companies may be at an earlier stage of development and
may have limited product lines, reduced market liquidity for their shares,
limited financial resources or less depth in management than larger or more
established companies. Smaller companies also may be less significant factors
within their industries and may have difficulty withstanding competition

                                      -2-

<PAGE>   200

from larger companies. While smaller companies may be subject to these
additional risks, they may also realize more substantial growth than larger or
more established companies.

                  SECURITIES OF COMPANIES WITH LIMITED OPERATING HISTORIES. The
Fund may invest in securities of companies with limited operating histories. The
Fund considers these to be securities of companies with a record of less than
three years' continuous operation, even including the operations of any
predecessors and parents. (These are sometimes referred to as "unseasoned
issuers.") These companies by their nature have only a limited operating history
which can be used for evaluating the company's growth prospects. As a result,
investment decisions for these securities may place a greater emphasis on
current or planned product lines and the reputation and experience of the
company's management and less emphasis on fundamental valuation factors than
would be the case for more mature companies. In addition, many of these
companies may also be small companies and involve the risks and price volatility
associated with smaller companies.


                  INITIAL PUBLIC OFFERINGS. The Fund may invest in a company's
securities at the time the company first offers securities to the public, that
is, at the time of the company's initial public offering or IPO. Although
companies can be any age or size at the time of their IPOs, they are often
smaller and have a limited operating history, which involve a greater potential
for the value of their securities to be impaired following the IPO. See
"Securities of Smaller Companies" and "Securities of Companies with Limited
Operating Histories" above.


                  Investors in IPOs can be adversely affected by substantial
dilution in the value of their shares, by sales of additional shares and by
concentration of control in existing management and principal shareholders. In
addition, all of the factors that affect stock market performance may have a
greater impact on the shares of IPO companies.


                  The price of a company's securities may be highly unstable at
the time of its IPO and for a period thereafter due to market psychology
prevailing at the time of the IPO, the absence of a prior public market, the
small number of shares available and limited availability of investor
information. As a result of this or other factors, the Fund's sub-advisor might
decide to sell an IPO security more quickly than it would otherwise, which may
result in a significant gain or loss and greater transaction costs to the Fund.
Any gains from shares held for 12 months or less will be treated as short-term
gains, taxable as ordinary income to the Fund's shareholders. In addition, IPO
securities may be subject to varying patterns of trading volume and may, at
times, be difficult to sell without an unfavorable impact on prevailing prices.


                  The effect of an IPO investment can have a magnified impact on
the Fund's performance when the Fund's asset base is small. Consequently, IPOs
may constitute a significant portion of the Fund's returns particularly when the
Fund is small. Since the number of securities issued in an IPO is limited, it is
likely that IPO securities will represent a smaller component of the Fund's
assets as it increases in size, and therefore have a more limited effect on the
Fund's performance.

                  There can be no assurance that IPOs will continue to be
available for the Fund to purchase. The number or quality of IPOs available for
purchase by the Fund may vary, decrease or entirely disappear. In some cases,
the Fund may not be able to purchase IPOs at the offering price, but may have to
purchase the shares in the aftermarket at a price greatly exceeding the offering
price, making it more difficult for the Fund to realize a profit.

                   The advisor's IPO trade allocation procedures govern which
funds and other advised accounts participate in the allocation of any IPO. See
the heading "Trade Allocations" under Section 4 below. Under the IPO allocation
procedures of Berger LLC, the Fund generally will not participate in an IPO if
the securities available for allocation to the Fund are insignificant relative
to the Fund's net assets. As a result, any fund or account whose assets are very
large is not likely to participate in the allocation of many IPOs.

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<PAGE>   201

                  FOREIGN SECURITIES. The Fund may invest in foreign securities,
which may be traded in foreign markets and denominated in foreign currency. The
Fund's investments may also include American Depositary Receipts (ADRs),
European Depositary Receipts (EDRs) which are similar to ADRs, in bearer form,
designed for use in the European securities markets, and in Global Depositary
Receipts (GDRs).

                  Investments in foreign securities involve some risks that are
different from the risks of investing in securities of U.S. issuers, such as the
risk of adverse political, social, diplomatic and economic developments and,
with respect to certain countries, the possibility of expropriation, taxes
imposed by foreign countries or limitations on the removal of monies or other
assets of the Fund. Moreover, the economies of individual foreign countries will
vary in comparison to the U.S. economy in such respects as growth of gross
domestic product, rate of inflation, capital reinvestment, resources,
self-sufficiency and balance of payments position. Securities of some foreign
companies, particularly those in developing countries, are less liquid and more
volatile than securities of comparable domestic companies. A developing country
generally is considered to be in the initial stages of its industrialization
cycle. Investing in the securities of developing countries may involve exposure
to economic structures that are less diverse and mature, and to political
systems that can be expected to have less stability than developed countries.


         There also may be less publicly available information about foreign
issuers and securities than domestic issuers and securities, and foreign issuers
generally are not subject to accounting, auditing and financial reporting
standards, requirements and practices comparable to those applicable to domestic
issuers. Also, there is generally less government supervision and regulation of
exchanges, brokers, financial institutions and issuers in foreign countries than
there is in the U.S. Foreign financial markets typically have substantially less
volume than U.S. markets. Foreign markets also have different clearance and
settlement procedures and, in certain markets, delays or other factors could
make it difficult to effect transactions, potentially causing the Fund to
experience losses or miss investment opportunities. The use of a foreign
securities depository may increase this risk. The Funds may maintain assets with
a foreign securities depository if certain conditions are met. A foreign
securities depository may maintain assets on behalf of a Fund if the depository:
(i) acts as or operates a system for the central handling of securities that is
regulated by a foreign financial regulatory authority; (ii) holds assets on
behalf of the Fund under safekeeping conditions no less favorable than those
that apply to other participants; (iii) maintains records that identify the
assets of participants, and keep its own assets separated from the assets of
participants; (iv) provides periodic reports to participants; and (v) undergoes
periodic examination by regulatory authorities or independent accountants. In
addition, the Funds' primary custodian provides the Fund with an analysis of the
custodial risks of using a depository, monitors the depository on a continuous
basis, and notifies the Funds of any material changes in risks associated with
using the depository. In general, the analysis may include an analysis of a
depository's expertise and market reputation, the quality of its services, its
financial strength, and insurance or indemnification arrangements, the extent
and quality of regulation and independent examination of the depository, its
standing in published ratings, its internal controls, and other procedures for
safeguarding investments, and any related legal proceedings.


                  Costs associated with transactions in foreign securities are
generally higher than with transactions in U.S. securities. The Fund will incur
greater costs in maintaining assets in foreign jurisdictions and in buying and
selling foreign securities generally, resulting in part from converting foreign
currencies into U.S. dollars. In addition, the Fund might have greater
difficulty taking appropriate legal action with respect to foreign investments
in non-U.S. courts than with respect to domestic issuers in U.S. courts, which
may heighten the risk of possible losses through the holding of securities by
custodians and securities depositories in foreign countries.

                  If the Fund is invested in securities denominated or quoted in
currencies other than the U.S. dollar, changes in foreign currency exchange
rates will affect the value of the investments in its portfolio and the
unrealized appreciation or depreciation of investments insofar as U.S. investors
are concerned. If the foreign currency in which a security is denominated
appreciates against the U.S. dollar,

                                      -4-

<PAGE>   202

the dollar value of the security will increase. Conversely, a decline in the
exchange rate of the foreign currency against the U.S. dollar would adversely
affect the dollar value of the foreign securities. Foreign currency exchange
rates are determined by forces of supply and demand on the foreign exchange
markets, which are in turn affected by the international balance of payments and
other economic and financial conditions, government intervention, speculation
and other factors.

                  PASSIVE FOREIGN INVESTMENT COMPANIES (PFICS). The Fund may
purchase the securities of certain companies considered Passive Foreign
Investment Companies (PFICs) under U.S. tax laws. For certain types of PFICs, in
addition to bearing their proportionate share of the Fund's expenses (management
fees and operating expenses), shareholders will also indirectly bear similar
expenses of such PFIC. PFIC investments also may be subject to less favorable
U.S. tax treatment, as discussed in Section 9 below.

                  ILLIQUID AND RESTRICTED SECURITIES. The Fund is authorized to
invest in securities which are illiquid or not readily marketable because they
are subject to restrictions on their resale ("restricted securities") or
because, based upon their nature or the market for such securities, no ready
market is available. However, the Fund will not purchase any such security, the
purchase of which would cause the Fund to invest more than 15% of its net
assets, measured at the time of purchase, in illiquid securities. Investments in
illiquid securities involve certain risks to the extent that the Fund may be
unable to dispose of such a security at the time desired or at a reasonable
price or, in some cases, may be unable to dispose of it at all. In addition, in
order to resell a restricted security, the Fund might have to incur the
potentially substantial expense and delay associated with effecting
registration. If securities become illiquid following purchase or other
circumstances cause more than 15% of the Fund's net assets to be invested in
illiquid securities, the trustees of the Fund, in consultation with the Fund's
sub-advisor, will determine what action, if any, is appropriate in light of all
relevant circumstances.

                  Repurchase agreements maturing in more than seven days will be
considered as illiquid for purposes of this restriction. Pursuant to guidelines
established by the trustees, the Fund's sub-advisor will determine whether
securities eligible for resale to qualified institutional buyers pursuant to SEC
Rule 144A under the Securities Act of 1933 should be treated as illiquid
investments considering, among other things, the following factors: (1) the
frequency of trades and quotes for the security; (2) the number of dealers
willing to purchase or sell the security and the number of other potential
purchasers; (3) dealer undertakings to make a market in the security; and (4)
the nature of the security and the marketplace trades (e.g., the time needed to
dispose of the security, the method of soliciting offers, and the mechanics of
the transfer). The liquidity of the Fund's investments in Rule 144A securities
could be impaired if qualified institutional buyers become uninterested in
purchasing these securities.

                  REPURCHASE AGREEMENTS. The Fund may invest in repurchase
agreements with various financial organizations, including commercial banks,
registered broker-dealers and registered government securities dealers. A
repurchase agreement is an agreement under which the Fund acquires a debt
security (generally a debt security issued or guaranteed by the U.S. government
or an agency thereof, a banker's acceptance or a certificate of deposit) from a
commercial bank, broker or dealer, subject to resale to the seller at an agreed
upon price and date (normally, the next business day). A repurchase agreement
may be considered a loan collateralized by securities. The resale price reflects
an agreed upon interest rate effective for the period the instrument is held by
the Fund and is unrelated to the interest rate on the underlying instrument. In
these transactions, the securities acquired by the Fund (including accrued
interest earned thereon) must have a total value equal to or in excess of the
value of the repurchase agreement and are held by the Fund's custodian bank
until repurchased. In addition, the trustees will establish guidelines and
standards for review by the investment sub-advisor of the creditworthiness of
any bank, broker or dealer party to a repurchase agreement with the Fund. The
Fund will not enter into a repurchase agreement maturing in more than seven days
if as a result more than 15% of the Fund's net assets would be invested in such
repurchase agreements and other illiquid securities.

                  These transactions must be fully collateralized at all times
by debt securities (generally a security issued or guaranteed by the U.S.
Government or an agency thereof, a banker's acceptance or a

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<PAGE>   203

certificate of deposit), but involve certain risks, such as credit risk to the
Fund if the other party defaults on its obligation and the Fund is delayed or
prevented from liquidating the collateral. For example, if the other party to
the agreement defaults on its obligation to repurchase the underlying security
at a time when the value of the security has declined, the Fund may incur a loss
upon disposition of the security. If the other party to the agreement becomes
insolvent and subject to liquidation or reorganization under the Bankruptcy Code
or other laws, a court may determine that the underlying security is collateral
for a loan by the Fund not within the control of the Fund and therefore the
realization by the Fund on such collateral may automatically be stayed and
delayed. Further, it is possible that the Fund may not be able to substantiate
its interest in the underlying security and may be deemed an unsecured creditor
of the other party to the agreement. The Fund expects that these risks can be
controlled through careful monitoring procedures.

                  WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Fund may
purchase and sell securities on a when-issued or delayed delivery basis.
However, the Fund currently does not intend to purchase or sell securities on a
when-issued or delayed delivery basis, if as a result more than 5% of its total
assets taken at market value at the time of purchase would be invested in such
securities. When-issued or delayed delivery transactions arise when securities
(normally, obligations of issuers eligible for investment by the Fund) are
purchased or sold by the Fund with payment and delivery taking place in the
future in order to secure what is considered to be an advantageous price or
yield. However, the yield available on a comparable security when delivery takes
place may vary from the yield on the security at the time that the when-issued
or delayed delivery transaction was entered into. Any failure to consummate a
when-issued or delayed delivery transaction may result in the Fund missing the
opportunity of obtaining a price or yield considered to be advantageous.
When-issued and delayed delivery transactions may generally be expected to
settle within one month from the date the transactions are entered into, but in
no event later than 90 days. However, no payment or delivery is made by the Fund
until it receives delivery or payment from the other party to the transaction.

                  When the Fund purchases securities on a when-issued basis, it
will maintain in a segregated account with its custodian cash, U.S. government
securities or other liquid assets having an aggregate value equal to the amount
of such purchase commitments, until payment is made. If necessary, additional
assets will be placed in the account daily so that the value of the account will
equal or exceed the amount of the Fund's purchase commitments.

                  LENDING OF PORTFOLIO SECURITIES. The Fund may lend its
securities to qualified institutional investors (such as brokers, dealers or
other financial organizations) who need to borrow securities in order to
complete certain transactions, such as covering short sales, avoiding failures
to deliver securities or completing arbitrage operations. Loans of securities by
the Fund will be collateralized by cash, letters of credit, or securities issued
or guaranteed by the U.S. Government or its agencies. The collateral will equal
at least 100% of the current market value of the loaned securities,
marked-to-market on a daily basis. By lending its securities, the Fund will be
attempting to generate income through the receipt of interest on the loan which,
in turn, can be invested in additional securities to pursue the Fund's
investment objective. Any gain or loss in the market price of the securities
loaned that might occur during the term of the loan would be for the account of
the Fund.

                  The Fund may lend its portfolio securities to qualified
brokers, dealers, banks or other financial institutions, so long as the terms,
the structure and the aggregate amount of such loans are not inconsistent with
the Investment Company Act of 1940, or the Rules and Regulations or
interpretations of the Securities and Exchange Commission (the "Commission")
thereunder, which currently require that (a) the borrower pledge and maintain
with the Fund collateral consisting of cash, an irrevocable letter of credit or
securities issued or guaranteed by the United States government having a value
at all times not less than 100% of the value of the securities loaned, (b) the
borrower add to such collateral whenever the price of the securities loaned
rises (i.e., the borrower "marks to the market" on a daily basis), (c) the loan
be made subject to termination by the Fund at any time and (d) the Fund receives
reasonable interest on the loan, which interest may include the Fund's investing
cash collateral in interest bearing short-term

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<PAGE>   204

investments, and (e) the Fund receives all dividends and distributions on the
loaned securities and any increase in the market value of the loaned securities.

                  The Fund bears risk of loss in the event that the other party
to a securities lending transaction defaults on its obligations and the Fund is
delayed in or prevented from exercising its rights to dispose of the collateral,
including the risk of a possible decline in the value of the collateral
securities during the period in which the Fund seeks to assert these rights, the
risk of incurring expenses associated with asserting these rights and the risk
of losing all or a part of the income from the transaction. The Fund will not
lend its portfolio securities if, as a result, the aggregate value of such loans
would exceed 33-1/3% of the value of the Fund's total assets (including the
value of the collateral received to secure the loan). Loan arrangements made by
the Fund will comply with all other applicable regulatory requirements,
including the rules of the New York Stock Exchange, which rules presently
require the borrower, after notice, to redeliver the securities within the
normal settlement time of three business days. All relevant facts and
circumstances, including creditworthiness of the broker, dealer or institution,
will be considered in making decisions with respect to the lending of
securities, subject to review by the Fund's trustees.

                  Although voting rights with respect to loaned securities pass
to the borrower, the Fund retains the right to recall a security (or terminate a
loan) for the purpose of exercising the security's voting rights. Efforts to
recall loaned securities in time to exercise voting rights may be unsuccessful,
especially for foreign securities or thinly traded securities. In addition, it
is expected that loaned securities will be recalled for voting only when the
items being voted on are, in the judgment of the Fund's sub-advisor, either
material to the economic value of the security or threaten to materially impact
the issuing company's corporate governance policies or structure.

                  SHORT SALES. The Fund currently is only permitted to engage in
short sales if, at the time of the short sale, the Fund owns or has the right to
acquire an equivalent kind and amount of the security being sold short at no
additional cost (i.e., short sales "against the box").

                  In a short sale, the seller does not immediately deliver the
securities sold and is said to have a short position in those securities until
delivery occurs. To make delivery to the purchaser, the executing broker borrows
the securities being sold short on behalf of the seller. While the short
position is maintained, the seller collateralizes its obligation to deliver the
securities sold short in an amount equal to the proceeds of the short sale plus
an additional margin amount established by the Board of Governors of the Federal
Reserve. If the Fund engages in a short sale, the collateral account will be
maintained by the Fund's custodian. While the short sale is open, the Fund will
maintain in a segregated custodial account an amount of securities convertible
into or exchangeable for such equivalent securities at no additional cost. These
securities would constitute the Fund's long position.

                  Under prior law, the Fund could have made a short sale, as
described above, when it wanted to sell a security it owned at a current
attractive price, but also wished to defer recognition of gain or loss for
Federal income tax purposes and for purposes of satisfying certain tests
applicable to regulated investment companies under the Internal Revenue Code.
However, federal tax legislation has eliminated the ability to defer recognition
of gain or loss in short sales against the box and accordingly, it is not
anticipated that the Fund will be engaging in these transactions unless there
are further legislative changes.

                  HEDGING TRANSACTIONS. Although it has historically not done
so, the Fund is authorized to make limited use of certain types of futures,
forwards and/or options, but only for the purpose of hedging, that is,
protecting against market risk due to market movements that may adversely affect
the value of the Fund's securities or the price of securities that the Fund is
considering purchasing. The utilization of futures, forwards and options is also
subject to policies and procedures which may be established by the trustees from
time to time. In addition, the Fund is not required to hedge. Decisions
regarding hedging are subject to the sub-advisor's judgment of the cost of the
hedge, its potential effectiveness and other factors the sub-advisor considers
pertinent.

                                      -7-

<PAGE>   205



                  A hedging transaction may partially protect the Fund from a
decline in the value of a particular security or its portfolio generally,
although hedging may also limit the Fund's opportunity to profit from favorable
price movements, and the cost of the transaction will reduce the potential
return on the security or the portfolio. Use of these instruments by the Fund
involves the potential for a loss that may exceed the amount of initial margin
the Fund would be permitted to commit to the contracts under its investment
limitation, or in the case of a call option written by the Fund, may exceed the
premium received for the option. However, the Fund is permitted to use such
instruments for hedging purposes only, and only if the aggregate amount of its
obligations under these contracts does not exceed the total market value of the
assets the Fund is attempting to hedge, such as a portion or all of its exposure
to equity securities or its holding in a specific foreign currency. To help
ensure that the Fund will be able to meet its obligations under its futures and
forward contracts and its obligations under options written by the Fund, the
Fund will be required to maintain liquid assets in a segregated account with its
custodian bank or to set aside portfolio securities to "cover" its position in
these contracts.

                  The principal risks of the Fund utilizing futures
transactions, forward contracts and options are: (a) losses resulting from
market movements not anticipated by the Fund; (b) possible imperfect correlation
between movements in the prices of futures, forwards and options and movements
in the prices of the securities or currencies hedged or used to cover such
positions; (c) lack of assurance that a liquid secondary market will exist for
any particular futures or options at any particular time, and possible
exchange-imposed price fluctuation limits, either of which may make it difficult
or impossible to close a position when so desired; (d) lack of assurance that
the counterparty to a forward contract would be willing to negotiate an offset
or termination of the contract when so desired; and (e) the need for additional
information and skills beyond those required for the management of a portfolio
of traditional securities. In addition, when the Fund enters into an
over-the-counter contract with a counterparty, the Fund will assume counterparty
credit risk, that is, the risk that the counterparty will fail to perform its
obligations, in which case the Fund could be worse off than if the contract had
not been entered into.

                  Following is additional information concerning the futures,
forwards and options which the Fund may utilize, provided that no more than 5%
of the Fund's net assets at the time the contract is entered into may be used
for initial margins for financial futures transactions and premiums paid for the
purchase of options. In addition, the Fund may only write call options that are
covered and only up to 25% of the Fund's total assets.

                  Futures Contracts. Financial futures contracts are
exchange-traded contracts on financial instruments (such as securities and
foreign currencies) and securities indices that obligate the holder to take or
make delivery of a specified quantity of the underlying financial instrument, or
the cash value of an index, at a future date. Although futures contracts by
their terms call for the delivery or acquisition of the underlying instruments
or a cash payment based on the mark-to-market value of the underlying
instruments, in most cases the contractual obligation will be offset before the
delivery date by buying (in the case of an obligation to sell) or selling (in
the case of an obligation to buy) an identical futures contract. Such a
transaction cancels the original obligation to make or take delivery of the
instruments.

                  The Fund may enter into contracts for the purchase or sale for
future delivery of financial instruments, such as securities and foreign
currencies, or contracts based on financial indices including indices of U.S.
Government securities, foreign government securities or equity securities. U.S.
futures contracts are traded on exchanges which have been designated "contract
markets" by the Commodity Futures Trading Commission ("CFTC") and must be
executed through a futures commission merchant (an "FCM"), or brokerage firm,
which is a member of the relevant contract market. Through their clearing
corporations, the exchanges guarantee performance of the contracts as between
the clearing members of the exchange.

                  Both the buyer and seller are required to deposit "initial
margin" for the benefit of the FCM when a futures contract is entered into.
Initial margin deposits are equal to a percentage of the contract's value, as
set by the exchange on which the contract is traded, and may be maintained in
cash or other

                                      -8-

<PAGE>   206


liquid assets. If the value of either party's position declines, that party will
be required to make additional "variation margin" payments to the other party to
settle the change in value on a daily basis. Initial and variation margin
payments are similar to good faith deposits or performance bonds or
party-to-party payments resulting from daily changes in the value of the
contract, unlike margin extended by a securities broker, and would be released
or credited to the Fund upon termination of the futures contract, assuming all
contractual obligations have been satisfied. Unlike margin extended by a
securities broker, initial and variation margin payments do not constitute
purchasing securities on margin for purposes of the Fund's investment
limitations. The Fund will incur brokerage fees when it buys or sells futures
contracts.

                  In the event of the bankruptcy of the FCM that holds margin on
behalf of the Fund, the Fund may be entitled to return of margin owed to the
Fund only in proportion to the amount received by the FCM's other customers. The
Fund will attempt to minimize the risk by careful monitoring of the
creditworthiness of the FCMs with which the Fund does business and by depositing
margin payments in a segregated account with the Fund's custodian for the
benefit of the FCM when practical or otherwise required by law.

                  The Fund intends to comply with guidelines of eligibility for
exclusion from the definition of the term "commodity pool operator" with the
CFTC and the National Futures Association, which regulate trading in the futures
markets. Accordingly, the Fund will not enter into any futures contract or
option on a futures contract if, as a result, the aggregate initial margin and
premiums required to establish such positions would exceed 5% of the Fund's net
assets.

                  Although the Fund would hold cash and liquid assets in a
segregated account with a mark-to-market value sufficient to cover the Fund's
open futures obligations, the segregated assets would be available to the Fund
immediately upon closing out the futures position.

                  The acquisition or sale of a futures contract may occur, for
example, when the Fund is considering purchasing or holds equity securities and
seeks to protect itself from fluctuations in prices without buying or selling
those securities. For example, if prices were expected to decrease, the Fund
might sell equity index futures contracts, thereby hoping to offset a potential
decline in the value of equity securities in the portfolio by a corresponding
increase in the value of the futures contract position held by the Fund and
thereby preventing the Fund's net asset value from declining as much as it
otherwise would have. The Fund also could protect against potential price
declines by selling portfolio securities and investing in money market
instruments. However, the use of futures contracts as a hedging technique allows
the Fund to maintain a defensive position without having to sell portfolio
securities.

                  Similarly, when prices of equity securities are expected to
increase, futures contracts may be bought to attempt to hedge against the
possibility of having to buy equity securities at higher prices. This technique
is sometimes known as an anticipatory hedge. Since the fluctuations in the value
of futures contracts should be similar to those of equity securities, the Fund
could take advantage of the potential rise in the value of equity securities
without buying them until the market has stabilized. At that time, the futures
contracts could be liquidated and the Fund could buy equity securities on the
cash market.

                  The ordinary spreads between prices in the cash and futures
markets, due to differences in the nature of those markets, are subject to
distortions. First, all participants in the futures market are subject to
initial margin and variation margin requirements. Rather than meeting additional
variation margin requirements, investors may close out futures contracts through
offsetting transactions which could distort the normal price relationship
between the cash and futures markets. Second, the liquidity of the futures
market depends on participants entering into offsetting transactions rather than
making or taking delivery. To the extent participants decide to make or take
delivery, liquidity in the futures market could be reduced and prices in the
futures market distorted. Third, from the point of view of speculators, the
margin deposit requirements in the futures market are less than margin
requirements in the securities market. Therefore, increased participation by
speculators in the futures market may cause temporary

                                      -9-

<PAGE>   207

price distortions. Due to the possibility of the foregoing distortions, a
correct forecast of general price trends by the Fund still may not result in a
successful use of futures.

                  Futures contracts entail additional risks. Although the Fund
will only utilize futures contracts when it believes that use of such contracts
will benefit the Fund, if the Fund's investment judgment is incorrect, the
Fund's overall performance could be worse than if the Fund had not entered into
futures contracts. For example, if the Fund has hedged against the effects of a
possible decrease in prices of securities held in the Fund's portfolio and
prices increase instead, the Fund will lose part or all of the benefit of the
increased value of these securities because of offsetting losses in the Fund's
futures positions. In addition, if the Fund has insufficient cash, it may have
to sell securities from its portfolio to meet daily variation margin
requirements. Those sales may be, but will not necessarily be, at increased
prices which reflect the rising market and may occur at a time when the sales
are disadvantageous to the Fund. Although the buyer of an option cannot lose
more than the amount of the premium plus related transaction costs, a buyer or
seller of futures contracts could lose amounts substantially in excess of any
initial margin deposits made, due to the potential for adverse price movements
resulting in additional variation margin being required by such positions.
However, the Fund intends to monitor its investments closely and will attempt to
close its positions when the risk of loss to the Fund becomes unacceptably high.

                  The prices of futures contracts depend primarily on the value
of their underlying instruments. Because there are a limited number of types of
futures contracts, it is possible that the standardized futures contracts
available to the Fund will not match exactly the Fund's current or potential
investments. The Fund may buy and sell futures contracts based on underlying
instruments with different characteristics from the securities in which it
typically invests -- for example, by hedging investments in portfolio securities
with a futures contract based on a broad index of securities -- which involves a
risk that the futures position will not correlate precisely with the performance
of the Fund's investments.

                  Futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments closely correlate
with the Fund's investments. Futures prices are affected by such factors as
current and anticipated short-term interest rates, changes in volatility of the
underlying instruments and the time remaining until expiration of the contract.
Those factors may affect securities prices differently from futures prices.
Imperfect correlations between the Fund's investments and its futures positions
may also result from differing levels of demand in the futures markets and the
securities markets, from structural differences in how futures and securities
are traded, and from imposition of daily price fluctuation limits for futures
contracts. The Fund may buy or sell futures contracts with a value less than or
equal to the securities it wishes to hedge or is considering purchasing. If
price changes in the Fund's futures positions are poorly correlated with its
other investments, its futures positions may fail to produce desired gains or
result in losses that are not offset by the gains in the Fund's other
investments.

                  Because futures contracts are generally settled within a day
from the date they are closed out, compared with a longer settlement period for
most types of securities, the futures markets can provide superior liquidity to
the securities markets. Nevertheless, there is no assurance a liquid secondary
market will exist for any particular futures contract at any particular time. In
addition, futures exchanges may establish daily price fluctuation limits for
futures contracts and may halt trading if a contract'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, it may be impossible for the Fund to enter
into new positions or close out existing positions. If the secondary market for
a futures contract is not liquid because of price fluctuation limits or
otherwise, the Fund may not be able to promptly liquidate unfavorable futures
positions and potentially could be required to continue to hold a futures
position until the delivery date, regardless of changes in its value. As a
result, the Fund's access to other assets held to cover its futures positions
also could be impaired.

                  Options on Futures Contracts. The Fund may buy and write
options on futures contracts for hedging purposes. An option on a futures
contract gives the Fund the right (but not the obligation) to buy or sell a
futures contract at a specified price on or before a specified date. The
purchase of a call

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<PAGE>   208

option on a futures contract is similar in some respects to the purchase of a
call option on an individual security. Depending on the pricing of the option
compared to either the price of the futures contract upon which it is based or
the price of the underlying instrument, ownership of the option may or may not
be less risky than ownership of the futures contract or the underlying
instrument. As with the purchase of futures contracts, the Fund may buy a call
option on a futures contract to hedge against a market advance, and the Fund
might buy a put option on a futures contract to hedge against a market decline.

                  The writing of a call option on a futures contract constitutes
a partial hedge against declining prices of the security or foreign currency
which is deliverable under, or of the index comprising, the futures contract. If
the futures price at the expiration of the call option is below the exercise
price, the Fund will retain the full amount of the option premium which provides
a partial hedge against any decline that may have occurred in the Fund's
portfolio holdings. If a call option the Fund has written is exercised, the Fund
will incur a loss which will be reduced by the amount of the premium it
received. Depending on the degree of correlation between change in the value of
its portfolio securities and changes in the value of the futures positions, the
Fund's losses from existing options on futures may to some extent be reduced or
increased by changes in the value of portfolio securities.

                  The purchase of a put option on a futures contract is similar
in some respects to the purchase of protective put options on portfolio
securities. For example, the Fund may buy a put option on a futures contract to
hedge the Fund's portfolio against the risk of falling prices.

                  The amount of risk the Fund assumes when it buys an option on
a futures contract is the premium paid for the option plus related transaction
costs. In addition to the correlation risks discussed above, the purchase of an
option also entails the risk that changes in the value of the underlying futures
contract will not be fully reflected in the value of the options bought.

                  Forward Foreign Currency Exchange Contracts. A forward
contract is a privately negotiated agreement between two parties in which one
party is obligated to deliver a stated amount of a stated asset at a specified
time in the future and the other party is obligated to pay a specified invoice
amount for the assets at the time of delivery. The Fund currently intends that
it will only use forward contracts or commitments for hedging purposes and will
only use forward foreign currency exchange contracts, although the Fund may
enter into additional forms of forward contracts or commitments in the future if
they become available and advisable in light of the Fund's objectives and
investment policies. Forward contracts generally are negotiated in an interbank
market conducted directly between traders (usually large commercial banks) and
their customers. Unlike futures contracts, which are standardized
exchange-traded contracts, forward contracts can be specifically drawn to meet
the needs of the parties that enter into them. The parties to a forward contract
may agree to offset or terminate the contract before its maturity, or may hold
the contract to maturity and complete the contemplated exchange.

                  The following discussion summarizes the Fund's principal uses
of forward foreign currency exchange contracts ("forward currency contracts").
The Fund may enter into forward currency contracts with stated contract values
of up to the value of the Fund's assets. A forward currency contract is an
obligation to buy or sell an amount of a specified currency for an agreed price
(which may be in U.S. dollars or a foreign currency) on a specified date. The
Fund will exchange foreign currencies for U.S. dollars and for other foreign
currencies in the normal course of business and may buy and sell currencies
through forward currency contracts in order to fix a price (in terms of a
specified currency) for securities it has agreed to buy or sell ("transaction
hedge"). The Fund also may hedge some or all of its investments denominated in
foreign currency against a decline in the value of that currency (or a proxy
currency whose price movements are expected to have a high degree of correlation
with the currency being hedged) relative to the U.S. dollar by entering into
forward currency contracts to sell an amount of that currency approximating the
value of some or all of its portfolio securities denominated in that currency
("position hedge") or by participating in futures contracts (or options on such
futures) with respect to the currency. The Fund also may enter into a forward
currency contract with respect to a currency where the Fund is considering the
purchase or sale of investments denominated in that currency but has not yet
selected the specific investments ("anticipatory hedge").

                                      -11-

<PAGE>   209

                  These types of hedging minimize the effect of currency
appreciation as well as depreciation, but do not eliminate fluctuations in the
underlying U.S. dollar equivalent value of the proceeds of or rates of return on
the Fund's foreign currency denominated portfolio securities. The matching of
the increase in value of a forward contract and the decline in the U.S. dollar
equivalent value of the foreign currency denominated asset that is the subject
of the hedge generally will not be precise. Shifting the Fund's currency
exposure from one foreign currency to another limits the Fund's opportunity to
profit from increases in the value of the original currency and involves a risk
of increased losses to the Fund if its investment manager's projection of future
exchange rates is inaccurate. Unforeseen changes in currency prices may result
in poorer overall performance for the Fund than if it had not entered into such
contracts.

                  The Fund will cover outstanding forward currency contracts by
maintaining liquid portfolio securities denominated in the currency underlying
the forward contract or the currency being hedged. To the extent that the Fund
is not able to cover its forward currency positions with underlying portfolio
securities, the Fund's custodian will segregate cash or liquid assets having a
value equal to the aggregate amount of the Fund's commitments under forward
contracts entered into. If the value of the securities used to cover a position
or the value of segregated assets declines, the Fund must find alternative cover
or segregate additional cash or liquid assets on a daily basis so that the value
of the covered and segregated assets will be equal to the amount of the Fund's
commitments with respect to such contracts.

                  While forward contracts are not currently regulated by the
CFTC, the CFTC may in the future assert authority to regulate forward contracts.
In such event, the Fund's ability to utilize forward contracts may be
restricted. The Fund may not always be able to enter into forward contracts at
attractive prices and may be limited in its ability to use these contracts to
hedge Fund assets. In addition, when the Fund enters into a privately negotiated
forward contract with a counterparty, the Fund assumes counterparty credit risk,
that is, the risk that the counterparty will fail to perform its obligations, in
which case the Fund could be worse off than if the contract had not been entered
into. Unlike many exchange-traded futures contracts and options on futures,
there are no daily price fluctuation limits with respect to forward contracts
and other negotiated or over-the-counter instruments, and with respect to those
contracts, adverse market movements could therefore continue to an unlimited
extent over a period of time. However, the Fund intends to monitor its
investments closely and will attempt to renegotiate or close its positions when
the risk of loss to the Fund becomes unacceptably high.

                  Options on Securities and Securities Indices. The Fund may buy
or sell put or call options and write covered call options on securities that
are traded on United States or foreign securities exchanges or over-the-counter.
Buying an option involves the risk that, during the option period, the price of
the underlying security will not increase (in the case of a call) to above the
exercise price, or will not decrease (in the case of a put) to below the
exercise price, in which case the option will expire without being exercised and
the holder would lose the amount of the premium. Writing a call option involves
the risk of an increase in the market value of the underlying security, in which
case the option could be exercised and the underlying security would then be
sold by the Fund to the option holder at a lower price than its current market
value and the Fund's potential for capital appreciation on the security would be
limited to the exercise price. Moreover, when the Fund writes a call option on a
securities index, the Fund bears the risk of loss resulting from imperfect
correlation between movements in the price of the index and the price of the
securities set aside to cover such position. Although they entitle the holder to
buy equity securities, call options to purchase equity securities do not entitle
the holder to dividends or voting rights with respect to the underlying
securities, nor do they represent any rights in the assets of the issuer of
those securities.

                  A call option written by the Fund is "covered" if the Fund
owns the underlying security covered by the call or has an absolute and
immediate right to acquire that security without additional cash consideration
(or for additional cash consideration held in a segregated account by its
custodian) upon conversion or exchange of other securities held in its
portfolio. A call option is also deemed to be covered if the Fund holds a call
on the same security and in the same principal amount as the call written and
the

                                      -12-

<PAGE>   210

exercise price of the call held (i) is equal to or less than the exercise
price of the call written or (ii) is greater than the exercise price of the call
written if the difference is maintained by the Fund in liquid assets in a
segregated account with its custodian.

                  The writer of a call option may have no control when the
underlying securities must be sold. Whether or not an option expires
unexercised, the writer retains the amount of the premium. This amount, of
course, may, in the case of a covered call option, be offset by a decline in the
market value of the underlying security during the option period.

                  The writer of an exchange-traded call option that wishes to
terminate its obligation may effect a "closing purchase transaction." This is
accomplished by buying an option of the same series as the option previously
written. The effect of the purchase is that the writer's position will be
canceled by the clearing corporation. If the Fund desires to sell a particular
security from the Fund's portfolio on which the Fund has written a call option,
the Fund will effect a closing transaction prior to or concurrent with the sale
of the security. However, a writer may not effect a closing purchase transaction
after being notified of the exercise of an option. An investor who is the holder
of an exchange-traded option may liquidate its position by effecting a "closing
sale transaction." This is accomplished by selling an option of the same series
as the option previously bought. There is no guarantee that either a closing
purchase or a closing sale transaction can be effected.

                  The Fund will realize a profit from a closing transaction if
the price of the purchase transaction is less than the premium received from
writing the option or the price received from a sale transaction is more than
the premium paid to buy the option; the Fund will realize a loss from a closing
transaction if the price of the purchase transaction is more than the premium
received from writing the option or the price received from a sale transaction
is less than the premium paid to buy the option. Because increases in the market
price of a call option will generally reflect increases in the market price of
the underlying security, any loss resulting from the repurchase of a call option
is likely to be offset in whole or in part by appreciation of the underlying
security owned by the Fund.

                  An option position may be closed out only where there exists a
secondary market for an option of the same series. If a secondary market does
not exist, it might not be possible to effect closing transactions in particular
options with the result that the Fund would have to exercise the options in
order to realize any profit. If the Fund is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or the Fund delivers the underlying security
upon exercise. Reasons for the absence of a liquid secondary market may include
the following: (i) there may be insufficient trading interest in certain
options, (ii) restrictions may be imposed by a national securities exchange on
which the option is traded ("Exchange") on opening or closing transactions or
both, (iii) trading halts, suspensions or other restrictions may be imposed with
respect to particular classes or series of options or underlying securities,
(iv) unusual or unforeseen circumstances may interrupt normal operations on an
Exchange, (v) the facilities of an Exchange or of the Options Clearing
Corporation ("OCC") may not at all times be adequate to handle current trading
volume, or (vi) one or more Exchanges could, for economic or other reasons,
decide or be compelled at some future date to discontinue the trading of options
(or a particular class or series of options), in which event the secondary
market on that Exchange (or in that class or series of options) would cease to
exist, although outstanding options on that Exchange that had been issued by the
OCC as a result of trades on that Exchange would continue to be exercisable in
accordance with their terms.

                  In addition, when the Fund enters into an over-the-counter
option contract with a counterparty, the Fund assumes counterparty credit risk,
that is, the risk that the counterparty will fail to perform its obligations, in
which case the Fund could be worse off than if the contract had not been entered
into.

                  An option on a securities index is similar to an option on a
security except that, rather than the right to take or make delivery of a
security at a specified price, an option on a securities index gives the holder
the right to receive, on exercise of the option, an amount of cash if the
closing level of the

                                      -13-

<PAGE>   211

securities index on which the option is based is greater than, in the case of a
call, or less than, in the case of a put, the exercise price of the option.

                  The Fund may buy call options on securities or securities
indices to hedge against an increase in the price of a security or securities
that the Fund may buy in the future. The premium paid for the call option plus
any transaction costs will reduce the benefit, if any, realized by the Fund upon
exercise of the option, and, unless the price of the underlying security or
index rises sufficiently, the option may expire and become worthless to the
Fund. The Fund may buy put options to hedge against a decline in the value of a
security or its portfolio. The premium paid for the put option plus any
transaction costs will reduce the benefit, if any, realized by the Fund upon
exercise of the option, and, unless the price of the underlying security or
index declines sufficiently, the option may expire and become worthless to the
Fund.
                  An example of a hedging transaction using an index option
would be if the Fund were to purchase a put on a stock index, in order to
protect the Fund against a decline in the value of all securities held by it to
the extent that the stock index moves in a similar pattern to the prices of the
securities held. While the correlation between stock indices and price movements
of the stocks in which the Fund will generally invest may be imperfect, the Fund
expects, nonetheless, that the use of put options that relate to such indices
will, in certain circumstances, protect against declines in values of specific
portfolio securities or the Fund's portfolio generally. Although the purchase of
a put option may partially protect the Fund from a decline in the value of a
particular security or its portfolio generally, the cost of a put will reduce
the potential return on the security or the portfolio.

                  PORTFOLIO TURNOVER. The portfolio turnover rates of the Fund
are shown in the Financial Highlights table included in the Prospectus.
Investment changes in the Fund will be made whenever management deems them
appropriate even if this results in a higher portfolio turnover rate. A 100%
annual turnover rate results, for example, if the equivalent of all of the
securities in the Fund's portfolio are replaced in a period of one year. In
addition, portfolio turnover for the Fund may increase as a result of large
amounts of purchases and redemptions of shares of the Fund due to economic,
market or other factors that are not within the control of management.

                  Higher portfolio turnover will necessarily result in
correspondingly higher brokerage costs for the Fund. The existence of a high
portfolio turnover rate has no direct relationship to the tax liability of the
Fund, although sales of certain stocks will lead to realization of gains, and,
possibly, increased taxable distributions to shareholders. The Fund's brokerage
policy is discussed further below under Section 6--Brokerage Policy, and
additional information concerning income taxes is located under Section
9--Income Dividends, Capital Gains Distributions and Tax Treatment.

2.                INVESTMENT RESTRICTIONS

                  The investment objective of the Fund is capital appreciation.
The investment objective of the Fund is considered fundamental, meaning that it
cannot be changed without a shareholders' vote. There can be no assurance that
the Fund's investment objective will be realized.

                  The Fund has also adopted certain investment policies,
strategies, guidelines and procedures in pursuing its objective. These may be
changed without a shareholder vote. The principal policies and strategies used
by the Fund are described in the Prospectus.

                  In addition, the Fund has adopted certain fundamental and
non-fundamental restrictions on its investments and other activities, which are
listed below. Fundamental restrictions may not be changed without the approval
of (i) 67% or more of the voting securities of the Fund present at a meeting of
shareholders thereof if the holders of more than 50% of the outstanding voting
securities are present or represented by proxy, or (ii) more than 50% of the
outstanding voting securities of the Fund. Non-fundamental restrictions may be
changed in the future by action of the trustees without shareholder vote.

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<PAGE>   212

BERGER INFORMATION TECHNOLOGY FUND

                  The following fundamental restrictions apply to the Berger
Information Technology Fund. The Fund may not:

                  1. With respect to 75% of the Fund's total assets, purchase
the securities of any one issuer (except U.S. government securities) if
immediately after and as a result of such purchase (a) the value of the holdings
of the Fund in the securities of such issuer exceeds 5% of the value of the
Fund's total assets or (b) the Fund owns more than 10% of the outstanding voting
securities of such issuer.

                  2. Invest in any one industry (other than U.S. government
securities) 25% or more of the value of its total assets at the time of such
investment.

                  3. Borrow money, except from banks for temporary or emergency
purposes in amounts not to exceed 25% of the Fund's total assets (including the
amount borrowed) taken at market value, nor pledge, mortgage or hypothecate its
assets, except to secure permitted indebtedness and then only if such pledging,
mortgaging or hypothecating does not exceed 25% of the Fund's total assets taken
at market value. When borrowings exceed 5% of the Fund's total assets, the Fund
will not purchase portfolio securities.

                  4. Act as a securities underwriter (except to the extent the
Fund may be deemed an underwriter under the Securities Act of 1933 in disposing
of a security), issue senior securities (except to the extent permitted under
the Investment Company Act of 1940), invest in real estate (although it may
purchase shares of a real estate investment trust), or invest in commodities or
commodity contracts except financial futures transactions, futures contracts on
securities and securities indices and options on such futures, forward foreign
currency exchange contracts, forward commitments or securities index put or call
options.

                  5. Make loans, except that the Fund may enter into repurchase
agreements and may lend portfolio securities in accordance with the Fund's
investment policies. The Fund does not, for this purpose, consider the purchase
of all or a portion of an issue of publicly distributed bonds, bank loan
participation agreements, bank certificates of deposit, bankers' acceptances,
debentures or other securities, whether or not the purchase is made upon the
original issuance of the securities, to be the making of a loan.

                  In applying the industry concentration investment restriction
(no. 2 above), the Fund uses the industry groups used in the Data Monitor
Portfolio Monitoring System of William O'Neil & Co. Incorporated.

                  The trustees have adopted additional non-fundamental
investment restrictions for the Fund. These limitations may be changed by the
trustees without a shareholder vote. The non-fundamental investment restrictions
include the following:

                  1. The Fund may not purchase securities on margin from a
broker or dealer, except that the Fund may obtain such short-term credits as may
be necessary for the clearance of transactions, and may not make short sales of
securities, except that the Fund may make short sales if, at the time of the
short sale, the Fund owns or has the right to acquire an equivalent kind and
amount of the security being sold short at no additional cost (i.e., short sales
"against the box"). This limitation shall not prohibit or restrict the Fund from
entering into futures, forwards and options contracts or from making margin
payments and other deposits in connection therewith.

                  2. The Fund may not purchase the securities of any other
investment company, except by purchase in the open market involving no
commission or profit to a sponsor or dealer (other than the customary broker's
commission).

                                      -15-

<PAGE>   213

                  3. The Fund may not invest in companies for the purposes of
exercising control of management.

                  4. The Fund may not purchase any security, including any
repurchase agreement maturing in more than seven days, which is not readily
marketable, if more than 15% of the net assets of the Fund, taken at market
value at the time of purchase would be invested in such securities.

                  5. Only for the purpose of hedging, the Fund may purchase and
sell financial futures, forward foreign currency exchange contracts and put and
call options, but no more than 5% of the Fund's net assets at the time of
purchase may be invested in initial margins for financial futures transactions
and premiums for options. The Fund may only write call options that are covered
and only up to 25% of the Fund's total assets.

                  6. The Fund may not purchase or sell securities on a
when-issued or delayed delivery basis, if as a result more than 5% of its total
assets taken at market value at the time of purchase would be invested in such
securities.

3.                MANAGEMENT OF THE FUND

                  The Fund is supervised by trustees who are responsible for
major decisions about the Fund's policies and overall Fund oversight. The Fund's
trustees hire the companies that run day-to-day Fund operations, such as the
investment advisor, administrator, transfer agent and custodian.

                  The trustees and executive officers of the Fund are listed
below, together with information which includes their principal occupations
during the past five years and other principal business affiliations.


      MICHAEL OWEN, c/o Zayed University, Post Office Box 19282, Dubai, United
           Arab Emirates DOB: 1937. Dean, since _______ 2000, of Zayed
           University. Formerly self-employed as a financial and management
           consultant, and in real estate development from June 1999 to _____
           2000. From 1993 to June 1999, Dean, and from 1989 to 1993, a member
           of the Finance faculty, of the College of Business, Montana State
           University. Formerly (1976-1989), Chairman and Chief Executive
           Officer of Royal Gold, Inc. (mining). Chairman of the Board of Berger
           Growth Fund and Berger Large Cap Growth Fund. Chairman of the
           Trustees of Berger Investment Portfolio Trust, Berger Institutional
           Products Trust, Berger Worldwide Funds Trust, Berger Worldwide
           Portfolios Trust and Berger Omni Investment Trust.

*     JACK R. THOMPSON, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1949. President and a director since May 1999 (Executive
           Vice President from February 1999 to May 1999) of Berger Growth
           Fund and Berger Large Cap Growth Fund. President and a trustee
           since May 1999 (Executive Vice President from February 1999 to
           May 1999) of Berger Investment Portfolio Trust, Berger
           Institutional Products Trust, Berger Worldwide Funds Trust,
           Berger Worldwide Portfolios Trust and Berger Omni Investment
           Trust. President and Director since June, 1999 (Executive Vice
           President from February 1999 to June 1999) of Berger LLC. Audit
           Committee Member of the Public Employees' Retirement Association
           of Colorado (pension plan) since November 1997. Self-employed as
           a consultant from July 1995 through February 1999. Director of
           Wasatch Advisors (investment management) from February 1997 to
           February 1999. Director of Janus Capital Corporation (investment
           management) from June 1984 through June 1995, and Executive Vice
           President of the Corporation from April 1989 through June 1995.
           Treasurer of Janus Capital Corporation from November 1983 through
           October 1989. Trustee of the Janus Investment Funds from December
           1990 through June 1995, and Senior Vice President of the Trust
           from May 1993 through June 1995. President and a director of
           Janus Service Corporation (transfer agent) from January 1987
           through June 1995. President and a director of Fillmore Agency,
           Inc. (advertising agency), from January 1990


                                      -16-

<PAGE>   214


           through June 1995. Executive Vice President and a director of Janus
           Capital International, Ltd. (investment advisor) from September 1994
           through June 1995. President and a director of Janus Distributors,
           Inc. (broker/dealer), from May 1991 through June 1995. Director of
           IDEX Management, Inc. (investment management), from January 1985
           through June 1995. Trustee and Senior Vice President of the of the
           Janus Aspen Funds from May 1993 through June 1995.


      DENNIS E. BALDWIN, 3481 South Race Street, Englewood, CO 80110, DOB: 1928.
           President, Baldwin Financial Counseling. Formerly (1978-1990), Vice
           President and Denver Office Manager of Merrill Lynch Capital
           Markets. Director of Berger Growth Fund and Berger Large Cap Growth
           Fund. Trustee of Berger Investment Portfolio Trust, Berger
           Institutional Products Trust, Berger Worldwide Funds Trust, Berger
           Worldwide Portfolios Trust and Berger Omni Investment Trust.






      KATHERINE A. CATTANACH, 672 South Gaylord, Denver, CO 80209, DOB: 1945.
           Managing Principal, Sovereign Financial Services, Inc. (investment
           consulting firm). Formerly (1981-1988), Executive Vice President,
           Captiva Corporation, Denver, Colorado (private investment management
           firm). Ph.D. in Finance (Arizona State University); Chartered
           Financial Analyst (CFA). Director of Berger Growth Fund and Berger
           Large Cap Growth Fund. Trustee of Berger Investment Portfolio Trust,
           Berger Institutional Products Trust, Berger Worldwide Funds Trust,
           Berger Worldwide Portfolios Trust and Berger Omni Investment Trust.

      PAUL R. KNAPP, 33 North LaSalle Street, Suite 1900, Chicago, IL 60602,
           DOB: 1945. Since October 2000, Executive Officer of DST Systems, Inc.
           Director (since February 1998) and a Vice President (February 1998 -
           November 1998) of West Side Investments, Inc. (investments), a
           wholly-owned subsidiary of DST Systems, Inc. Formerly, President,
           Chief Executive Officer and a director (September 1997 - October
           2000) of DST Catalyst, Inc. (international financial markets
           consulting, software and computer services company, an 81% owned
           subsidiary of DST Systems, Inc.) Previously (1991 - October 2000),
           Chairman, President, Chief Executive Officer and a director of
           Catalyst Institute (international public policy research organization
           focused primarily on financial markets and institutions); also (1991
           - September 1997), Chairman, President, Chief Executive Officer and a
           director of Catalyst Consulting (international financial institutions
           business consulting firm). Prior thereto (1988-1991), President,
           Chief Executive Officer and a director of Kessler Asher Group
           (brokerage, clearing and trading firm). Director of Berger Growth
           Fund and Berger Large Cap Growth Fund. Trustee of Berger Investment
           Portfolio Trust, Berger Institutional Products Trust, Berger
           Worldwide Funds Trust, Berger Worldwide Portfolios Trust and Berger
           Omni Investment Trust.

      HARRY T. LEWIS, JR., 1600 Broadway, Suite 2400, Denver, CO 80202,
           DOB: 1933. Self-employed as a private investor. Formerly
           (1981-1988), Senior Vice President, Rocky Mountain Region, of Dain
           Bosworth Incorporated and member of that firm's Management
           Committee. Director of J.D. Edwards & Co. (computer software
           company) since 1995. Director of Berger Growth Fund and Berger Large
           Cap Growth Fund. Trustee of Berger Investment Portfolio Trust,
           Berger Institutional Products Trust, Berger Worldwide Funds Trust,
           Berger Worldwide Portfolios Trust and Berger Omni Investment Trust.


                                      -17-


<PAGE>   215


      WILLIAM SINCLAIRE, 3049 S. Perry Park Road, Sedalia, CO 80135, DOB: 1928.
           President, Santa Clara LLC (privately owned agriculture company).
           Director of Berger Growth Fund and Berger Large Cap Growth Fund.
           Trustee of Berger Investment Portfolio Trust, Berger Institutional
           Products Trust, Berger Worldwide Funds Trust, Berger Worldwide
           Portfolios Trust and Berger Omni Investment Trust.

*     JAY W. TRACEY, CFA, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1954. Executive Vice President of the Berger Funds (since
           August, 2000). Executive Vice President and Chief Investment Officer
           of Berger LLC (since June 2000). Interim co-portfolio manager since
           June 2000 of the Berger Small Company Growth Fund and the Berger Mid
           Cap Growth Fund (since June 2000); portfolio manager of the Berger
           Growth Fund (since August 2000); co-portfolio manager since June
           2000 of the Berger Select Fund (since June 2000). Formerly, Vice
           President and Portfolio Manager at OppenheimerFunds, Inc (September
           1994 to May 2000) and Managing Director of Buckingham Capital
           Management (February 1994 to September 1994) .

*     JANICE M. TEAGUE, 210 University Boulevard, Suite 900, Denver, CO
           80206, DOB: 1954. Vice President (since November 1998) and Assistant
           Secretary (since February 2000 and previously from September 1996 to
           November 1998) and Secretary (November 1998 through January 2000) of
           the Berger Funds. Vice President (since October 1997), Secretary
           (since November 1998) and Assistant Secretary (September 1996
           through November 1998) with Berger LLC. Vice President and Secretary
           with Berger Distributors LLC, since August 1998. Formerly,
           self-employed as a business consultant from June 1995 through
           September 1996, Secretary of the Janus Funds from January 1990 to
           May 1995 and Assistant Secretary of Janus Capital Corporation from
           October 1989 to May 1995.


*     DAVID J. SCHULTZ, 210 University Boulevard, Suite 900, Denver, CO
           80206, DOB: 1950. Vice President and Treasurer (since November 1998)
           and Assistant Treasurer (September 1996 to November 1998) of the
           Berger Funds. Vice President (since February 1997) and Controller
           (since August 1994) with Berger LLC. Chief Financial Officer and
           Treasurer (since May 1996), Assistant Secretary (since August 1998)
           and Secretary (May 1996 to August 1998) with Berger Distributors LLC
           Formerly, Partner with Smith, Brock & Gwinn (accounting firm) from
           January 1984 to August 1994.


*     ANTHONY R. BOSCH, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1965. Vice President of the Berger Funds (since February 2000).
           Vice President (since June 1999) with Berger LLC. Formerly,
           Assistant Vice President of Federated Investors, Inc. from December
           1996 through May 1999, and Attorney with the U.S. Securities and
           Exchange Commission (from June 1990 through December 1996).


*     BRIAN S. FERRIE, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1958. Vice President of the Berger Funds since November 1998.
           Vice President (since February 1997) and Chief Compliance Officer
           (since August 1994) with Berger LLC. Chief Compliance Officer with
           Berger Distributors LLC, since May 1996. Formerly, Compliance
           Officer with United Services Advisor, Inc., from January 1988 to
           July 1994, and Director of Internal Audit of United Services Funds
           from January 1987 to July 1994.

*     JOHN PAGANELLI, 210 University Boulevard, Suite 900, Denver, CO
           80206, DOB: 1967. Assistant Treasurer of the Berger Funds since
           November 1998. Vice President (since November 1998) and Manager of
           Accounting (January 1997 through November 1998) with Berger LLC.
           Formerly, Manager of Accounting (December 1994 through October 1996)
           and Senior Accountant (November 1991 through December 1994) with
           Palmeri Fund Administrators, Inc.


*     SUE VREELAND, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1948. Secretary of the Berger Funds (since February 2000).
           Assistant Secretary of Berger LLC and Berger Distributors LLC since
           June 1999. Formerly, Assistant Secretary of the Janus Funds from


                                      -18-

<PAGE>   216


           March 1994 to May 1999, Assistant Secretary of Janus Distributors,
           Inc. from June 1995 to May 1997 and Manager of Fund Administration
           for Janus Capital Corporation from February 1992 to May 1999


---------

* Interested person (as defined in the Investment Company Act of 1940) of the
Fund and/or of the Fund's advisor or sub-advisor.

  The trustees of the Fund have adopted a trustee retirement age of 75 years.

                                      -19-

<PAGE>   217

TRUSTEE COMPENSATION


                   The officers of the Fund received no compensation from the
Fund during the fiscal year ended September 30, 2000. However, trustees of the
Fund who are not "interested persons" of the Fund or its advisor or sub-advisor
are compensated for their services according to a fee schedule, allocated among
the Berger Funds. Neither the officers of the Fund nor the trustees receive any
form of pension or retirement benefit compensation from the Fund.





                                      -20-

<PAGE>   218


                   The following table sets forth information regarding
compensation paid or accrued during the fiscal year ended September 30, 2000,
for each trustee of the Fund:



<TABLE>
<CAPTION>
                                    AGGREGATE COMPENSATION FROM
--------------------------------------------------------------------------------------------------
         NAME AND POSITION
         WITH BERGER FUNDS           BERGER INFORMATION TECHNOLOGY FUND(1)     ALL BERGER FUNDS(2)
         -----------------           -------------------------------------     -------------------
<S>                                 <C>                                       <C>
Dennis E. Baldwin(3)                            $ ___                              $______

Louis Bindner(6)                                $ ___                              $______

Katherine A. Cattanach(3)                       $ ___                              $______

Paul R. Knapp(3)                                $ ___                              $______

Harry T. Lewis(3)                               $ ___                              $______

Michael Owen(3)                                 $ ___                              $______

William Sinclaire(3)                            $ ___                              $______

Jack R. Thompson(3),(4),(5)                     $ ___                              $______
</TABLE>


NOTES TO TABLE

(1)   The Fund was not added as an operating series of the Trust until July 2,
      1999. Figures are from the period of the reorganization to September 30,
      1999.


(2)   Includes the Berger Growth Fund, the Berger Large Cap Growth Fund, the
      Berger Investment Portfolio Trust (including the Berger Information
      Technology Fund, the Berger Small Company Growth Fund, the Berger New
      Generation Fund, the Berger Balanced Fund, the Berger Select Fund, Berger
      Mid Cap Value Fund, and the Berger Mid Cap Growth Fund), the Berger
      Institutional Products Trust (four series), the Berger Worldwide Funds
      Trust (three series, including the Berger International Fund), the Berger
      Worldwide Portfolios Trust (one series) and the Berger Omni Investment
      Trust (including the Berger Small Cap Value Fund). Aggregate compensation
      figures do not include first-year estimates for any Fund in existence for
      less than one year. Of the aggregate amounts shown for each trustee, the
      following amounts were deferred under applicable deferred compensation
      plans: Dennis E. Baldwin $______; Katherine A. Cattanach $______; Michael
      Owen $______; William Sinclaire $______.

(3)   Director of Berger Growth Fund and Berger Large Cap Growth Fund and
      trustee of Berger Investment Portfolio Trust, Berger Institutional
      Products Trust, Berger Worldwide Portfolios Trust, Berger Worldwide Funds
      Trust and Berger Omni Investment Trust.


                                      -21-

<PAGE>   219

(4)   Interested person of Berger LLC.


(5)   President of Berger Growth Fund, Berger Large Cap Growth Fund, Berger
      Investment Portfolio Trust, Berger Institutional Products Trust, Berger
      Worldwide Portfolios Trust, Berger Worldwide Funds Trust and Berger Omni
      Investment Trust.

(6)   Resigned as Director and Trustee effective November 17, 2000.


                   Trustees may elect to defer receipt of all or a portion of
their fees pursuant to a fee deferral plan adopted by the Fund. Under the plan,
deferred fees are credited to an account and adjusted thereafter to reflect the
investment experience of whichever of the Berger Funds (or approved money market
funds) is designated by the trustee for this purpose. Pursuant to an SEC
exemptive order, the Fund is permitted to purchase shares of the designated
funds in order to offset its obligation to the trustees participating in the
plan. Purchases made pursuant to the plan are excepted from any otherwise
applicable investment restriction limiting the purchase of securities of any
other investment company. The Fund's obligation to make payments of deferred
fees under the plan is a general obligation of the Fund.


                   As of December 29, 2000, the officers and trustees of the
Fund as a group owned of record or beneficially no shares of the Fund.


4.                 INVESTMENT ADVISOR AND SUB-ADVISOR

BERGER LLC - INVESTMENT ADVISOR

                   Berger LLC, 210 University Boulevard, Suite 900, Denver, CO
80206, is the investment advisor to the Fund. Berger LLC is responsible for
managing the investment operations of the Fund and the composition of its
investment portfolio. Berger LLC also acts as the Fund's administrator and is
responsible for such functions as monitoring compliance with all applicable
federal and state laws.


                   Berger LLC is a Nevada Limited Liability Company, and has
been in the investment advisory business for 26 years. It serves as investment
advisor or sub-advisor to mutual funds and institutional investors and had
assets under management of approximately $______ billion as of December 31,
2000. Berger LLC is a subsidiary of Stilwell Management Inc. ("Stilwell"), which
owns more than 80% of Berger LLC, and is an indirect subsidiary of Stilwell
Financial Inc. ("Stilwell Financial"). Stilwell also owns approximately 32% of
the outstanding shares of DST Systems, Inc. ("DST"), a publicly traded
information and transaction processing company which acts as the Funds' transfer
agent. DST, in turn, owns 100% of DST Securities, a registered broker-dealer,
which executes portfolio trades for the Funds.

                  Stilwell Financial was previously a wholly-owned subsidiary of
Kansas City Southern Industries, Inc. ("KCSI"). On July 12, 2000, KCSI completed
a separation of its transportation and financial services segments through a
dividend of stock of Stilwell Financial. On that date, KCSI shareholders
received two shares of Stilwell Financial for every KCSI share held as of June
28, 2000. The separation resulted in no change in the management or control of
the Funds or the Advisor to the Funds.


BAY ISLE FINANCIAL CORPORATION - SUB-ADVISOR

                   Bay Isle Financial Corporation ("Bay Isle"), 160 Sansome
Street, 17th Floor, San Francisco, CA 94104, is the investment sub-advisor for
the Fund. Bay Isle has been in the investment advisory business since 1986. Bay
Isle serves as investment advisor or sub-advisor to mutual funds,

                                      -22-

<PAGE>   220


institutional investors and individual separate accounts. As sub-advisor, Bay
Isle provides day-to-day management of the Fund's investment operations.


                   Bay Isle served as investment advisor to the Fund (originally
known as the InformationTech 100(R) Fund) from its inception in April 1997 until
July 1999, when the InformationTech 100(R) Fund was reorganized into the Fund
with shareholder approval. At that time, Bay Isle became the investment
sub-advisor to the Fund under a Sub-Advisory Agreement between Berger LLC as
advisor and Bay Isle as sub-advisor. As sub-advisor, Bay Isle provides
day-to-day management of the Fund's investment operations.

                   William F. K. Schaff is primarily responsible for the
day-to-day investment decisions for the Fund. Mr. Schaff is a co-founder and
controlling person of Bay Isle and serves as its Chief Investment Officer and a
director. Mr. Schaff has been managing accounts of Bay Isle clients since 1987.
Gary G. Pollock is also a co-founder and controlling person of Bay Isle and
serves as its President and a director.

                   In addition to its other activities, Bay Isle maintains the
InformationWeek(R) 100 Index, an unmanaged index of the stocks of 100 companies
in the information technology industries. InformationWeek(R) is a registered
trademark of CMP Media, which is not affiliated with Bay Isle or the Fund. Mr.
Schaff also writes articles on investments for InformationWeek magazine, a
publication of CMP Media covering information technology-related topics. CMP
Media compensates Bay Isle for managing the Index and for Mr. Schaff's articles.

INVESTMENT ADVISORY AGREEMENTS

                   Under the Investment Advisory Agreement between the Fund and
its advisor, the advisor is generally responsible for furnishing continuous
advice and making investment decisions as to the acquisition, holding or
disposition of securities or other assets which the Fund may own or contemplate
acquiring from time to time. The Investment Advisory Agreement provides that the
investment advisor shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or omission
taken with respect to the Fund, except for willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties thereunder and except to the extent
otherwise provided by law.

                   Under the Agreement the advisor is compensated for its
services by the payment of a fee at an annual rate, calculated as a percentage
of the average daily net assets of the Fund.


                   The following schedule reflects the advisory fees charged to
the Fund for the fiscal year ended September 30, 2000:



<TABLE>
<CAPTION>
             FUND                           ADVISOR      INVESTMENT ADVISORY FEE
             ----                           -------      -----------------------
<S>                                       <C>           <C>
Berger Information Technology Fund        Berger LLC(1)         0.___%(2)
</TABLE>


(1)   Fund is sub-advised by Bay Isle. See text preceding and following this
      table.

(2)   Under a written contract, the Fund's investment advisor waives its fee or
      reimburses the Fund for expenses to the extent that, at any time during
      the life of the Fund, the annual operating expenses for the Institutional
      Shares class of the Fund in any fiscal year, including the investment
      advisory fee, but excluding brokerage commissions, interest, taxes and
      extraordinary expenses, exceed 1.50% of the Fund's average daily net
      assets attributable to the Institutional Shares for that fiscal year. The
      contract also provides that the advisor will waive an additional amount of
      its fees or reimburse an additional amount of expenses to the extent
      necessary to keep its fee waiver and reimbursement for the Institutional
      Shares class proportionate to its fee waiver and reimbursement for the
      Fund's other outstanding share class. The contract may not be terminated
      or amended except by a vote of the Fund's Board of

                                      -23-

<PAGE>   221
Trustees. The investment advisory fee is allocated among the Institutional
Shares and the other class of the Fund on the basis of net assets attributable
to each such class.




                   The Fund's Investment Advisory Agreement will continue in
effect until the last day of April 2001, and thereafter from year to year if
such continuation is specifically approved at least annually by the trustees or
by vote of a majority of the outstanding shares of the Fund and in either case
by vote of a majority of the trustees who are not "interested persons" (as that
term is defined in the 1940 Act) of the Fund or the advisor. The Agreement is
subject to termination by the Fund or the advisor on 60 days' written notice,
and terminates automatically in the event of its assignment.

                   Under the Sub-Advisory Agreement between the advisor and the
sub-advisor for the Fund, the sub-advisor is responsible for day-to-day
investment management. The sub-advisor manages the investments and determines
what securities and other investments will be acquired, held or disposed of,
consistent with the investment objective and policies established by the
trustees. The Sub-Advisory Agreement provides that the sub-advisor shall not be
liable for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission taken with respect to the Fund,
except for willful misfeasance, bad faith or gross negligence in the performance
of its duties, or by reason of reckless disregard of its obligations and duties
thereunder and except to the extent otherwise provided by law.


                   No fees are paid directly to the sub-advisor by the Fund. Bay
Isle, as the sub-advisor of the Fund, receives from the advisor a fee at the
annual rate of 0.425% for the first $500 million of the Fund's average daily net
assets, 0.40% of the next $500 million and 0.375% of any amount in excess of $1
billion. The Sub-Advisory Agreement will continue in effect until April 2001,
and thereafter from year to year if such continuation is specifically approved
at least annually by the trustees or by vote of a majority of the outstanding
shares of the Fund and in either case by vote of a majority of the trustees of
the Fund who are not "interested persons" (as that term is defined in the
Investment Company Act of 1940) of the Fund or the advisor or the sub-advisor.
The Sub-Advisory Agreement is subject to termination by the Fund or the
sub-advisor on 60 days' written notice, and terminates automatically in the
event of its assignment and in the event of termination of the Investment
Advisory Agreement.


OTHER ARRANGEMENTS BETWEEN BERGER LLC AND BAY ISLE

                   Berger LLC and Bay Isle have formed a joint venture to
provide asset management services to certain private accounts. In connection
with the formation of that joint venture, Berger LLC purchased from Bay Isle
owners William F. K. Schaff and Gary G. Pollock the right that, if either Mr.
Schaff or Mr. Pollock ever desires to sell any of his Bay Isle shares in the
future, they will together first offer to sell shares to Berger LLC aggregating
at least 80% of the total outstanding shares of Bay Isle at an agreed price. If
Berger elects to purchase the Bay Isle shares offered, the parties have agreed
to use their best efforts to have 5-year employment agreements entered into
between Bay Isle and Messrs. Schaff and Pollock. Consummation of any such
purchase of Bay Isle shares by Berger LLC would be subject to a number of
conditions, including any required approval by Fund shareholders under the
Investment Company Act of 1940. Bay Isle and Messrs. Schaff and Pollock are also
compensated by

                                      -24-

<PAGE>   222

Berger LLC for providing administrative or consulting services relating to their
joint venture private account business.

TRADE ALLOCATIONS

                   While investment decisions for the Fund are made
independently by the sub-advisor, the same investment decision may be made for
the Fund and one or more accounts advised by the advisor. In this circumstance,
should purchase and sell orders of the same class of security be in effect on
the same day, the orders for such transactions may be combined by the advisor in
order to seek the best combination of net price and execution for each. Client
orders partially filled will, as a general matter, be allocated pro rata in
proportion to each client's original order, although exceptions may be made to
avoid, among other things, odd lots and de minimus allocations. Execution prices
for a combined order will be averaged so that each participating client receives
the average price paid or received. While in some cases, this policy might
adversely affect the price paid or received by the Fund or other participating
accounts, or the size of the position obtained or liquidated, the advisor will
aggregate orders if it believes that coordination of orders and the ability to
participate in volume transactions will result in the best overall combination
of net price and execution.

RESTRICTIONS ON PERSONAL TRADING


                  Berger LLC, the Berger Funds and Berger Distributors LLC each
permits its directors, officers and employees to purchase and sell securities
for their own accounts in accordance with a policy regarding personal investing
in each of the Codes of Ethics for Berger LLC, the Berger Funds and Berger
Distributors LLC. The policy requires all covered persons to conduct their
personal securities transactions in a manner which does not operate adversely to
the interests of the Funds or Berger LLC's other advisory clients. Directors and
officers of Berger LLC and Berger Distributors LLC, investment personnel and
other designated persons deemed to have access to current trading information
("access persons") are required to pre-clear all transactions in securities not
otherwise exempt under the policy. Requests for authority to trade will be
denied pre-clearance when, among other reasons, the proposed personal
transaction would be contrary to the provisions of the policy or would be deemed
to adversely affect any transaction then known to be under consideration for or
currently being effected on behalf of any client account, including the Funds.

                  In addition to the pre-clearance requirements described above
for Berger LLC and Berger Distributors LLC, the policy subjects directors and
officers of Berger LLC, the Berger Funds and Berger Distributors LLC, investment
personnel and other access persons to various trading restrictions and reporting
obligations. All reportable transactions are reviewed for compliance with the
policy. The policy is administered by Berger LLC and the provisions of the
policy are subject to interpretation by and exceptions authorized by its board
of directors.

                  Bay Isle permits its officers, directors, employees and
consultants to purchase and sell securities for their own accounts and accounts
of related persons in accordance with provisions governing personal securities
trading in Bay Isle's code of ethics and related internal policies. Employees
must wait 3 days between the time a new recommendation or opinion change is made
and the time the employee may trade in those securities in their own or related
accounts, or alternatively may ask that their transaction be added to a "block"
trade that will be made for a group of clients. Any employee trade not included
in a "block" trade made must be pre-cleared if the trade exceeds certain
specified volume limits. Volume limits are set with the intent of requiring
prior approval of any trade that could potentially cause changes in the market
price of the security in question. In addition, no employee may sell (or buy)
any security which he or she has bought (or sold) within the past 5 trading days
unless a loss is realized on closing the position. No employee, officer or
director of Bay Isle may acquire any security in an initial public offering or
in a private placement without prior written approval from Bay Isle's President.
Any Bay Isle employee who is an "access person" of the Fund will also be subject
to the provisions of Berger LLC's Code of Ethics, if those provisions are more
restrictive than the provisions of Bay Isle's own code. Each


                                      -25-

<PAGE>   223

employee must acknowledge quarterly that they are in compliance with the Bay
Isle code of ethics and related policies.

5.                 EXPENSES OF THE FUND


                   In addition to paying an investment advisory fee to its
advisor, the Fund pays all of its expenses not assumed by its advisor,
including, but not limited to, custodian and transfer agent fees, legal and
accounting expenses, administrative and record keeping expenses, interest
charges, federal and state taxes, expenses of shareholders' meetings,
compensation of trustees who are not interested persons of Berger LLC, expenses
of printing and distributing reports to shareholders and federal and state
administrative agencies, and all expenses incurred in connection with the
execution of its portfolio transactions, including brokerage commissions on
purchases and sales of portfolio securities, which are considered a cost of
securities of the Fund. The Fund also pays all expenses incurred in complying
with all federal and state laws and the laws of any foreign country applicable
to the issue, offer or sale of shares of the Fund, including, but not limited
to, all costs involved in preparing and printing prospectuses for shareholders
of the Fund.

                   Under a separate Administrative Services Agreement with
respect to the Fund, Berger LLC performs certain administrative and
recordkeeping services not otherwise performed by the Fund's custodian and
recordkeeper, including the preparation of financial statements and reports to
be filed with the Securities and Exchange Commission and state regulatory
authorities. For the fiscal year ended September 30, 2000, Berger LLC did not
charge an administrative fee to the Fund. The administrative services fee may be
changed by the trustees without shareholder approval.


                   The following table shows the cost to the Fund of the
previously applicable advisory fee and administrative services fee for the years
shown and the amount of such fees waived on account of excess expenses under
applicable expense limitations.

                       Berger Information Technology Fund


<TABLE>
<CAPTION>
                                                                       Advisory Fee
                         Investment             Administrative         Waiver and Expense
Fiscal Year Ended(1)     Advisory Fee(2)        Service Fee(3)         Reimbursement(4)          TOTAL
--------------------     ---------------        --------------         ----------------          -----
<S>                     <C>                   <C>                     <C>                      <C>
Sept. 30, 2000           $ _______              $ __________           $ (______)               $ _______

Sept. 30, 1999           $ 97,000               $ 11,000               $ (47,000)               $ 61,000

Feb. 28, 1999            $ 68,000               $ 30,000               $ (84,000)               $ 14,000
</TABLE>


(1)   The Fund's fiscal year changed from February 28 to September 30 as part of
      a reorganization effective July 1999.

(2)   Under the advisory agreement in effect prior to the reorganization
      referenced in note (1), the Fund's predecessor paid an advisory fee at an
      annual rate of 0.95% of its average daily net assets to Bay Isle. As part
      of the reorganization, the current investment advisory fee of 0.90%
      payable to Berger LLC came into effect. Effective October 1, 1999, the
      investment advisory fee charged to the Fund was reduced to the following
      rates of average daily net assets; 0.85% of the first $500 million; 0.80%
      of the next $500 million and; 0.75% in excess of $1 billion.

                                      -26-

<PAGE>   224

(3)   Under the administrative service agreement in effect prior to the
      reorganization referenced in note (1), the Fund's predecessor paid to a
      third party administrator an administrative services fee at the annual
      rate of 0.20% of average net assets, subject to a $30,000 annual minimum.
      Effective October 1, 1999, Berger LLC eliminated the 0.01% administrative
      fee charged to the Fund.


(4)   Prior to the reorganization referenced in note (1), the Fund's prior
      advisor had voluntarily agreed to reduce its fees and/or pay expenses of
      the Fund to ensure that the Fund's expenses did not exceed 1.50%. During
      1998, in addition to waiving its entire advisory fee and reimbursing the
      Fund for the entire administrative service fee, the Fund's prior advisor
      reimbursed the Fund for $59,000 of additional expenses in order to meet
      the applicable expense limitation. As part of the reorganization, the
      current expense limitation arrangements came into effect with Berger LLC,
      which are described in note (2) to the table appearing above under the
      heading "Investment Advisory Agreements."

                   The Fund has appointed State Street Bank and Trust Company
("State Street"), 801 Pennsylvania, Kansas City, MO 64105, as its recordkeeping
and pricing agent. In addition, State Street also serves as the Funds'
custodian. Each of the Funds has appointed DST Systems, Inc. ("DST"), P.O. Box
219958, Kansas City, MO 64121, as its transfer agent and dividend disbursing
agent. Approximately 32% of the outstanding shares of DST are owned by Stilwell.

                   As recordkeeping and pricing agent, State Street calculates
the daily net asset value of the Fund and performs certain accounting and
recordkeeping functions required by the Fund. The Fund pays State Street a
monthly base fee plus an asset-based fee. State Street is also reimbursed for
certain out-of-pocket expenses.

                   State Street, as custodian, and its subcustodians have
custody and provide for the safekeeping of the Fund's securities and cash, and
receive and remit the income thereon as directed by the management of the Fund.
The custodian and subcustodians do not perform any managerial or policy-making
functions for the Fund. For its services as custodian, State Street receives an
asset-based fee plus certain transaction fees and out-of-pocket expenses.

                   As transfer agent and dividend disbursing agent, DST
maintains all shareholder accounts of record; assists in mailing all reports,
proxies and other information to the Fund's shareholders; calculates the amount
of, and delivers to the Fund's shareholders, proceeds representing all dividends
and distributions; and performs other related services. For these services, DST
receives a fee from the Fund at an annual rate of $14.00 per open Fund
shareholder account, subject to preset volume discounts, plus certain
transaction fees and fees for closed accounts, and is reimbursed for
out-of-pocket expenses.






                   All of State Street's and DST's fees are subject to reduction
pursuant to an agreed formula for certain earnings credits on the cash balances
of the Fund. Earnings credits received by the Fund can be found on the Fund's
Statement of Operations in the Annual Report incorporated by reference into this
Statement of Additional Information


OTHER EXPENSE INFORMATION

                   The trustees of the Fund have authorized portfolio
transactions to be placed on an agency basis through DST Securities, Inc.
("DSTS"), a wholly-owned broker-dealer subsidiary of DST. When transactions are
effected through DSTS, the commission received by DSTS is credited against, and
thereby reduces, certain operating expenses that the Fund would otherwise be
obligated to pay. No portion of the commission is retained by DSTS. See Section
6--Brokerage Policy for further information

                                      -27-

<PAGE>   225

concerning the expenses reduced as a result of these arrangements. DSTS may be
considered an affiliate of Berger LLC due to the ownership interest of Stilwell
in both DST and Berger LLC.

                   The Fund and/or its advisor have entered into arrangements
with certain brokerage firms and other companies (such as recordkeepers and
administrators) to provide administrative services (such as sub-transfer agency,
recordkeeping, shareholder communications, sub-accounting and/or other services)
to investors purchasing shares of the Fund through those firms or companies. The
Fund's advisor or the Fund (if approved by its trustees) may pay fees to these
companies for their services. These companies may also be appointed as agents
for or authorized by the Fund to accept on its behalf purchase and redemption
requests that are received in good order. Subject to Fund approval, certain of
these companies may be authorized to designate other entities to accept purchase
and redemption orders on behalf of the Fund.

                   The Fund's advisor may also enter into arrangements with
organizations that solicit clients for the advisor, which may include clients
who purchase shares of the Fund. While the specific terms of each arrangement
may differ, generally, the fee paid by the advisor under such arrangements is
based on the value of the referred client's assets managed by the advisor. None
of the fees paid to such organizations will be borne by the Fund.

DISTRIBUTOR

                   The distributor (principal underwriter) of the Fund's shares
is Berger Distributors LLC (the "Distributor"), 210 University Boulevard, Suite
900, Denver, CO 80206. The Distributor may be reimbursed by Berger LLC for its
costs in distributing the Fund's Institutional Shares.

6.                 BROKERAGE POLICY

                   Although the Fund retains full control over its own
investment policies, under the terms of its Investment Advisory Agreement,
Berger LLC as the Fund's advisor is directed to place the portfolio transactions
of the Fund. A report on the placement of brokerage business is given to the
trustees of the Fund every quarter, indicating the brokers with whom Fund
portfolio business was placed and the basis for such placement.

                   The brokerage commissions paid by the Fund were as follows:


<TABLE>
<CAPTION>
Fiscal Year (period ended)                    Brokerage Commissions
--------------------------                    ---------------------
<S>                                          <C>
2000                                                 $ ______

1999                                                 $  4,000(1)

1998                                                 $ 10,000(1)
</TABLE>


(1)   The Fund's fiscal year changed from February 28 to September 30 as part of
      a reorganization effective July 1999. Accordingly, the brokerage
      commissions for 1997 were paid by the Fund's predecessor during the period
      April 8, 1997 (commencement of operations of the predecessor) to February
      28, 1998, and the brokerage commissions for 1998 were paid by the Fund's
      predecessor for the fiscal year ended February 28, 1999. Brokerage
      commissions for 1999 were paid by the Fund for the period March 1, 1999 to
      September 30, 1999.

                   The Investment Advisory Agreement authorizes and directs the
advisor to place portfolio transactions for the Fund only with brokers and
dealers who render satisfactory service in the execution of orders at the most
favorable prices and at reasonable commission rates. However, the Agreement

                                      -28-

<PAGE>   226

specifically authorizes the advisor to place such transactions with a broker
with whom it has negotiated a commission that is in excess of the commission
another broker or dealer would have charged for effecting that transaction if
the advisor determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker viewed in terms of either that particular transaction or
the overall responsibilities of the advisor. Accordingly, the advisor does not
have an obligation to seek the lowest available commission.

                   In accordance with this provision of the Agreement, portfolio
brokerage business of the Fund may be placed with brokers who provide useful
brokerage and research services to the advisor. During the Fund's fiscal year
ended February 28, 1999, brokerage was placed by the Fund's then advisor, now
sub-advisor, Bay Isle Financial Corporation, and none of the brokerage
commissions paid by the Fund were paid to brokers who provided to the Fund such
brokerage or research services. Currently, however, the Fund's brokerage is
placed by Berger LLC, the Fund's advisor, which may consider the value of
research provided as a factor in the choice of brokers. "Research" includes
computerized on-line stock quotation systems and related data feeds from stock
exchanges, computerized trade order entry, execution and confirmation systems,
fundamental and technical analysis data and software, computerized stock market
and business news services, economic research, account performance data and
computer hardware used for the receipt of electronic research services and
broker and other third-party equity research, such as publications or writings
which furnish advice as to the value of securities and advisability of
investing, and analyses and reports concerning issuers, industries, securities,
market trends, and portfolio strategies. Research may be provided orally, in
print, or electronically. These include a service used by the independent
trustees of the Fund in reviewing the Investment Advisory Agreement.

                   In some cases, a product or services termed "research" may
serve other functions unrelated to the making of investment decisions. When a
product has such a mixed use, the advisor will make a good faith allocation of
the cost of the product according to the use made of it. The portion of the
product that assists the advisor in the investment decision-making process may
be paid for with the Fund's commission dollars. The advisor pays for the portion
of the product that is not "research" with its own funds. Accordingly, the
decision whether and how to allocate the costs of such a product presents a
conflict of interest for Berger LLC.

                   Berger LLC does not enter into formal agreements with any
brokers regarding the placement of securities transactions because of any such
brokerage or research services that they provide. Berger LLC may, however, make
arrangements with and maintain internal procedures for allocating transactions
to brokers who provide such services to encourage them to provide services
expected to be useful to Berger LLC's clients, including the Fund. Brokers may
suggest a level of business they would like to receive in return for the
brokerage and research they provide. Berger LLC then determines whether to
continue receiving the research and brokerage provided and the approximate
amount of commissions it is willing to pay to continue the brokerage and
research arrangement with each broker. The actual amount of commissions a broker
may receive may be more or less than a broker's suggested allocations, depending
on Berger LLC's level of business, market conditions and other relevant factors.
Even under these arrangements, however, the placement of all Fund transactions,
must be consistent with the Fund's brokerage placement and execution policies,
and must be directed to a broker who renders satisfactory service in the
execution of orders at the most favorable prices and at reasonable commission
rates.


                   During the fiscal year ended September 30, 2000, of the
brokerage commissions paid by the Fund, the following amounts were paid to
brokers who provided to the Fund selected brokerage or research services
prepared by the broker or subscribed or paid for by the broker on behalf of the
Fund:



<TABLE>
<CAPTION>
  FUND                                     Amount of Transactions   Amount of Commissions
  ----                                     ----------------------   ---------------------
<S>                                        <C>                     <C>
  Berger Information Technology Fund              $ _____                 $_______
</TABLE>






                                      -29-

<PAGE>   227

                   These brokerage and research services received from brokers
are often helpful to Berger LLC in performing its investment advisory
responsibilities to the Fund, and the availability of such services from brokers
does not reduce the responsibility of Berger LLC's advisory personnel to analyze
and evaluate the securities in which the Fund invests. The brokerage and
research services obtained as a result of the Fund's brokerage business also
will be useful to Berger LLC in making investment decisions for its other
advisory accounts, and, conversely, information obtained by reason of placement
of brokerage business of such other accounts may be used by Berger LLC in
rendering investment advice to the Fund. Although such brokerage and research
services may be deemed to be of value to Berger LLC, they are not expected to
decrease the expenses that Berger LLC would otherwise incur in performing its
investment advisory services for the Fund nor will the advisory fees that are
received by Berger LLC from the Fund be reduced as a result of the availability
of such brokerage and research services from brokers.

                   The trustees of the Fund have authorized portfolio
transactions to be placed on an agency basis through DSTS, a wholly-owned
broker-dealer subsidiary of DST. When transactions are effected through DSTS,
the commission received by DSTS is credited against, and thereby reduces,
certain operating expenses that the Fund would otherwise be obligated to pay. No
portion of the commission is retained by DSTS. DSTS may be considered an
affiliate of Berger LLC due to the ownership interest of Stilwell in both DST
and Berger LLC.

                   The Fund's advisor places securities orders with a limited
number of major institutional brokerage firms chosen for the reliability and
quality of execution; commission rates; quality of research coverage of major
U.S. companies, the U.S. economy and the securities markets; promptness; back
office capabilities; capital strength and financial stability; prior performance
in serving the advisor and its clients; and knowledge of other buyers and
sellers. The advisor selects the broker for each order based on the factors
above, as well as the size, difficulty and other characteristics of the order.
The trustees of the Fund have also authorized sales of shares of the Fund by a
broker-dealer and the recommendations of a broker-dealer to its customers that
they purchase Fund shares to be considered as factors in the selection of
broker-dealers to execute portfolio transactions for the Fund. In addition, the
advisor may also consider payments made by brokers to the Fund or to other
persons on behalf of the Fund for services provided to the Fund for which it
would otherwise be obligated to pay, such as transfer agency fees. In placing
portfolio business with any such broker or dealer, the advisor of the Fund will
seek the best execution of each transaction.

7.                 HOW TO PURCHASE AND REDEEM SHARES IN THE FUND

<TABLE>
<S>                                                                    <C>
                   Minimum Initial Investment                          $250,000
</TABLE>

                   Institutional Shares in the Fund may be purchased at the
relevant net asset value without a sales charge. The minimum initial investment
for Institutional Shares of the Fund is $250,000. (This requirement is not
applicable to shareholder accounts opened prior to the Fund's reorganization in
July 1999, since those accounts met the initial investment minimum in effect for
the Fund at the time those accounts were opened.)

                   To purchase shares in the Fund, simply complete the
application form enclosed with the Prospectus. Then mail it with a check payable
to "Berger Funds" to the following address:

                   Berger Funds
                   P.O. Box 219958
                   Kansas City, MO  64121

                                      -30-

<PAGE>   228

                   Payment for shares purchased may be made by wire, electronic
funds transfer or mail. All purchase orders are effected at the relevant net
asset value per share of the Fund next determined after receipt of the purchase
order, completed application and payment. A purchase order, together with
payment in proper form, received by the Fund, its authorized agent or designee
prior to the close of the New York Stock Exchange (the "Exchange") on a day the
Fund is open for business will be effected at that day's net asset value. An
order received after that time will be effected at the net asset value
determined on the next business day.

                   Additional investments may be made at any time by mail,
telephone (1-800-960-8427) or online (bergerfunds.com) at the relevant net asset
value by calling or writing the Fund and making payment by wire or electronic
funds transfer as outlined above.

                   In addition, Fund shares may be purchased through certain
broker-dealers that have established mutual fund programs and certain other
organizations connected with pension and retirement plans. These broker-dealers
and other organizations may charge investors a transaction or other fee for
their services, may require different minimum initial and subsequent investments
than the Fund and may impose other charges or restrictions different from those
applicable to shareholders who invest in the Fund directly. Fees charged by
these organizations will have the effect of reducing a shareholder's total
return on an investment in Fund shares. No such charge will apply to an investor
who purchases Fund shares directly from the Fund as described above.

                   Procedures for purchasing, selling (redeeming) and exchanging
Fund shares by telephone and online are described in the Prospectus. The Fund
may terminate or modify those procedures and related requirements at any time,
although shareholders of the Fund will be given notice of any termination or
material modification. Berger LLC may, at its own risk, waive certain of those
procedures and related requirements.

                   As described in the Prospectus, the Fund is intended as a
long-term investment, and not as a short-term trading vehicle. Therefore, the
Fund will deduct a 1% redemption fee from a shareholder's redemption proceeds if
the shareholder redeems Fund shares held less than 6 months. Because an exchange
involves a redemption of shares followed by a purchase, this redemption fee will
also apply to exchanges of Fund shares held less than 6 months. This fee is
intended to discourage investors from short-term trading of Fund shares and to
offset the cost to the Fund of excess brokerage and other costs incurred as a
result of such trading. This fee will not be charged to retirement plan accounts
(such as 401(k)s and 403(b)s) or in the case of redemptions resulting from the
death of the shareholder. This fee will also not be charged on the redemption of
shares obtained through the reinvestment of dividends paid on Fund shares. If
some but not all of the shares in an account are redeemed, shares are treated as
redeemed in an order determined by and applied uniformly to all accounts by the
Fund's sub-transfer agent.

8.                 HOW THE NET ASSET VALUE IS DETERMINED


                   The net asset value of the Fund is determined once daily, at
the close of the regular trading session of the New York Stock Exchange (the
"Exchange") (normally 4:00 p.m., Eastern time, Monday through Friday) each day
that the Exchange is open. The Exchange is closed and the net asset value of the
Fund is not determined on weekends and on New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day each year.


                   The per share net asset value of the Institutional Shares is
determined by dividing the Institutional Shares' pro rata portion of the total
value of the Fund's securities and other assets, less the Institutional Shares'
pro rata portion of the Fund's liabilities and the liabilities attributable to
the Institutional Shares, by the total number of Institutional Shares
outstanding. Since net asset value for the Fund is

                                      -31-

<PAGE>   229

calculated by class, and since the Institutional Shares and each other class of
the Fund has its own expenses, the per share net asset value of the Fund will
vary by class.

                   In determining net asset value, securities listed or traded
primarily on national exchanges, The Nasdaq Stock Market and foreign exchanges
are valued at the last sale price on such markets, or, if such a price is
lacking for the trading period immediately preceding the time of determination,
such securities are valued at the mean of their current bid and asked prices.
Securities that are traded in the over-the-counter market are valued at the mean
between their current bid and asked prices. The market value of individual
securities held by the Fund will be determined by using prices provided by
pricing services which provide market prices to other mutual funds or, as
needed, by obtaining market quotations from independent broker/dealers.
Short-term money market securities maturing within 60 days are valued on the
amortized cost basis, which approximates market value. All assets and
liabilities initially expressed in terms of non-U.S. dollar currencies are
translated into U.S. dollars at the prevailing market rates as quoted by one or
more banks or dealers shortly before the close of the Exchange. Securities and
assets for which quotations are not readily available or are not representative
of market value may be valued at their fair value determined in good faith
pursuant to consistently applied procedures established by the trustees.
Examples would be when events occur that materially affect the value of a
security at a time when the security is not trading or when the securities are
illiquid.

                   Generally, trading in foreign securities markets is
substantially completed each day at various times prior to the close of the
Exchange. The values of foreign securities used in computing the net asset value
of the shares of the Fund are determined as of the earlier of such market close
or the closing time of the Exchange. Occasionally, events affecting the value of
such securities may occur between the times at which they are determined and the
close of the Exchange, or when the foreign market on which such securities trade
is closed but the Exchange is open, which will not be reflected in the
computation of net asset value. If during such periods, events occur which
materially affect the value of such securities, the securities may be valued at
their fair value as determined in good faith pursuant to consistently applied
procedures established by the trustees.

                   The Fund's securities may be listed primarily on foreign
exchanges or over-the-counter dealer markets which may trade on days when the
Exchange is closed (such as a customary U.S. holiday) and on which the Fund's
net asset value is not calculated. As a result, the net asset value of the Fund
may be significantly affected by such trading on days when shareholders cannot
purchase or redeem shares of the Fund.

9.                 INCOME DIVIDENDS, CAPITAL GAINS
                   DISTRIBUTIONS AND TAX TREATMENT

                   This discussion summarizes certain U.S. federal income tax
issues relating to the Fund. As a summary, it is not an exhaustive discussion of
all possible tax ramifications. Accordingly, shareholders are urged to consult
with their tax advisors with respect to their particular tax consequences.

                   TAX STATUS OF THE FUND. If the Fund meets certain investment
and distribution requirements, it will be treated as a "regulated investment
company" (a "RIC") under the Internal Revenue Code and will not be subject to
federal income tax on earnings that it distributes in a timely manner to
shareholders. It also may be subject to an excise tax on undistributed income if
it does not meet certain timing requirements for distributions. The Fund intends
to qualify as a RIC annually and to make timely distributions in order to avoid
income and excise tax liabilities.

                   TAX ON FUND DISTRIBUTIONS. With certain exceptions provided
by law, the Fund will report annually to the Internal Revenue Service and to
each shareholder information about the tax treatment of the shareholder's
distributions. Dividends paid by the Fund, whether received in cash or
reinvested in additional Fund shares, will be treated as ordinary income to the
shareholders. Distributions of net capital gain, whether received in cash or
reinvested in Fund shares, will be taxable to the shareholders, but the rate of
tax will vary depending upon the Fund's holding periods in the assets whose sale
resulted in the capital gain. Dividends and distributions that are declared in
October, November or

                                      -32-

<PAGE>   230

December but not distributed until the following January will be considered to
be received by the shareholders on December 31.

                   In general, net capital gains from assets held by the Fund
for more than 12 months will be subject to a maximum tax rate of 20% and net
capital gains from assets held for 12 months or less will be taxed as ordinary
income. Distributions will be subject to these capital gains rates, regardless
of how long a shareholder has held Fund shares. Assets contributed to the Fund
in an in-kind purchase of Fund shares may generate more gain upon their sale
than if the assets had been purchased by the Fund with cash contributed to the
Fund in a cash purchase of Fund shares.

                   If the Fund's distributions for a taxable year exceeds its
tax earnings and profits available for distribution, all or a portion of its
distributions may be treated as a return of capital. To the extent a
distribution is treated as a return of capital, a shareholder's basis in his or
her Fund shares will be reduced by that amount.


                  If a shareholder has elected to receive dividends and/or
capital gain distributions in cash and the U.S. Postal Service is unable to
deliver checks to the shareholder's address of record, or if a shareholder's
checks remain uncashed for six months, the Fund reserves the right to reinvest
the amount distributed in shares of the applicable Fund at the NAV next computed
after the check is cancelled, and to convert the shareholder's distribution
option from receiving cash to having all dividend and other distributions
reinvested in additional shares. In addition, no interest will accrue on amounts
represented by uncashed distribution or redemption checks.

                   Additionally, the Funds reserve the right to reinvest
distributions of less than $10 in shares of the applicable Fund at the NAV next
computed.


                   TAX ON REDEMPTIONS OF FUND SHARES. Shareholders may be
subject to tax on the redemption of their Fund shares. In general, such
redemptions may give rise to a capital gain or loss, the treatment of which will
depend on the shareholder's holding period in the Fund shares. Tax laws may
prevent the deduction of a loss on the sale of Fund shares if the shareholder
reinvests in the Fund shortly before or after the sale giving rise to the loss.
Any loss on the redemption or other sale or exchange of Fund shares held for six
months or less will be treated as a long-term capital loss to the extent of any
long-term capital gain distribution received on the shares.

                   INCOME FROM FOREIGN SOURCES. Dividends and interest received
by the Fund on foreign securities may give rise to withholding and other taxes
imposed by foreign countries, although these taxes may be reduced by applicable
tax treaties. Foreign taxes will generally be treated as expenses of the Fund,
unless the Fund has more than 50% of its assets invested in foreign corporate
securities at the end of the Fund's taxable year. In that case, if the fund
makes an election, shareholders of the Fund may be able to deduct (as an
itemized deduction) or claim a foreign tax credit for their share of foreign
taxes, subject to limitations prescribed in the tax law.

                   If the Fund invests in a foreign corporation that is a
passive foreign investment company (a "PFIC"), special rules apply that may
affect the tax treatment of gains from the sale of the stock and may cause the
Fund to incur IRS tax and interest charges. However, the Fund may be eligible to
elect one of two alternative tax treatments with respect to PFIC shares which
would avoid these taxes and charges, but also may affect, among other things,
the amount and character of gain or loss and the timing of the recognition of
income with respect to PFIC shares. Accordingly, the amounts, character and
timing of income distributed to shareholders of the Fund holding PFIC shares may
differ substantially as compared to a fund that did not invest in PFIC shares.

                   INCOME FROM CERTAIN TRANSACTIONS. Some or all of the Fund's
investments may include transactions that are subject to special tax rules.
Transactions involving foreign currencies may give rise to gain or loss that
could affect the Fund's ability to make ordinary dividend distributions.
Investment in certain financial instruments, such as options, futures contracts
and forward contracts, may require annual recognition of unrealized gains and
losses. Transactions that are treated as "straddles"

                                      -33-

<PAGE>   231

may affect the character and/or timing of other gains and losses of the Fund. If
the Fund enters into a transaction (such as a "short sale against the box") that
reduces the risk of loss on an appreciated financial position that it already
holds, the entry into the transaction may constitute a constructive sale and
require immediate recognition of gain.

                   BACKUP WITHHOLDING. In general, if a shareholder is subject
to backup withholding, the Fund will be required to withhold federal income tax
at a rate of 31% from distributions to that shareholder. These payments are
creditable against the shareholder's federal income tax liability.

                   FOREIGN SHAREHOLDERS. Foreign shareholders of the Fund
generally will be subject to a 30% U.S. withholding tax on dividends paid by the
Fund from ordinary income and short-term capital gain, although the rate may be
reduced by a tax treaty. If a foreign shareholder dies while owning Fund shares,
those shares may be subject to U.S. estate taxes.

10.                SUSPENSION OF REDEMPTION RIGHTS

                   The right of redemption may be suspended for any period
during which the New York Stock Exchange is closed or the Securities and
Exchange Commission determines that trading on the Exchange is restricted, or
when there is an emergency as determined by the Securities and Exchange
Commission as a result of which it is not reasonably practicable for the Fund to
dispose of securities owned by it or to determine the value of its net assets,
or for such other period as the Securities and Exchange Commission may by order
permit for the protection of shareholders of the Fund.

                   The Fund intends to redeem its shares only for cash, although
it retains the right to redeem its shares in-kind under unusual circumstances,
in order to protect the interests of the remaining shareholders, by the delivery
of securities selected from its assets at its discretion. The Fund is, however,
governed by Rule 18f-1 under the Investment Company Act of 1940 pursuant to
which the Fund is obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the net assets of the Fund during any 90-day period for any
one shareholder. For purposes of this threshold, each underlying account holder
whose shares are held of record in certain omnibus accounts is treated as one
shareholder. Should redemptions by any shareholder during any 90-day period
exceed such limitation, the Fund will have the option of redeeming the excess in
cash or in-kind. If shares are redeemed in-kind, the redeeming shareholder
generally will incur brokerage costs in converting the assets to cash. The
redeeming shareholder may have difficulty selling the securities and recovering
the amount of the redemption if the securities are illiquid. The method of
valuing securities used to make redemption in-kind will be the same as the
method of valuing portfolio securities described under Section 8.

11.                TAX-SHELTERED RETIREMENT PLANS

                   The Fund offers several tax-qualified retirement plans for
individuals, businesses and nonprofit organizations. For information about
establishing an IRA, Roth IRA, profit-sharing or money purchase pension plan,
403(b) Custodial Account, SEP-IRA, SIMPLE IRA account or other retirement plans,
please call 1-800-259-2820 or write to The Berger Funds c/o Berger LLC, P.O. Box
5005, Denver, CO 80217. Trustees for existing 401(k) or other plans interested
in using Fund shares as an investment or investment alternative in their plans
are invited to call the Fund at 1-800-259-2820.

                   The Fund also offers an Automatic Investment Plan (minimum
$50 per month) and a Systematic Withdrawal Plan (minimum of $50 withdrawn
monthly, quarterly, semiannually or annually). Forms for these plans may be
obtained by writing to the Fund, c/o DST Systems, Inc., P.O. Box 219958, Kansas
City, MO 64121, or call 1-800-960-8427.

12.                EXCHANGE PRIVILEGE

                   Any shareholder may exchange any or all of the shareholder's
shares in the Fund, subject to stated minimums, for shares of any of the other
available Berger Funds, without charge, after receiving a current prospectus of
the other fund. Exchanges into or out of the Fund are made at the net

                                      -34-

<PAGE>   232


asset value per share next determined after the exchange request is received.
Each exchange represents the sale of shares from one fund and the purchase of
shares in another, which may produce a gain or loss for federal income tax
purposes. In addition, exchanges out of the Fund will be subject to a redemption
fee of 1% if shares are exchanged within 6 months of purchase. An exchange of
shares may be made by written request directed to DST Systems, Inc., by
telephoning the Fund at 1-800-960-8427 or by contacting the Fund online at
bergerfunds.com. This privilege may be terminated or amended by the Fund, and is
not available in any state in which the shares of the Berger Fund being acquired
in the exchange are not eligible for sale. Shareholders automatically have
telephone and online transaction privileges to authorize exchanges unless they
specifically decline this service in the account application or in writing.


13.                PERFORMANCE INFORMATION

                   From time to time in advertisements, the Fund may discuss its
performance ratings as published by recognized mutual fund statistical services,
such as Lipper Analytical Services, Inc., CDA Investment Technologies, Inc.,
Morningstar, Inc., or Value Line Investment Survey or by publications of general
interest such as The Wall Street Journal, Investor's Business Daily, Money,
Barron's, Financial World or Kiplinger's Personal Finance Magazine. In addition,
the Fund may compare its performance to that of recognized broad-based
securities market indices, including the Wilshire 5000 Index, the Standard &
Poor's 500 Stock Index, the Dow Jones Industrial Average, the Russell 2000 Stock
Index, the Standard & Poor's 400 Mid-Cap Index, the Standard & Poor's 600 Small
Cap Index, Morgan Stanley Capital International EAFE (Europe, Australasia, Far
East) Index, the Dow Jones World Index, the Standard & Poor's/BARRA Value Index,
the Nasdaq Composite Index, the Lehman Brothers Intermediate Term
Government/Corporate Bond Index or the InformationWeek 100 Index, or more
narrowly-based or blended indices which reflect the market sectors in which the
Fund invests.

                   The total return of the Fund is calculated for any specified
period of time by assuming the purchase of shares of the Fund at the net asset
value at the beginning of the period. Each dividend or other distribution paid
by the Fund is assumed to have been reinvested at the net asset value on the
reinvestment date. The total number of shares then owned as a result of this
process is valued at the net asset value at the end of the period. The
percentage increase is determined by subtracting the initial value of the
investment from the ending value and dividing the remainder by the initial
value.

                   The Fund's total return reflects the Fund's performance over
a stated period of time. An average annual total return reflects the
hypothetical annually compounded return that would have produced the same total
return if the Fund's performance had been constant over the entire period. Total
return figures are based on the overall change in value of a hypothetical
investment in the Fund. Because average annual total returns for more than one
year tend to smooth out variations in the Fund's return, investors should
recognize that such figures are not the same as actual year-by-year results.

                   All performance figures for the Fund are based upon
historical results and do not assure future performance. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.

                   Quotations of average annual total return for the Fund will
be expressed in terms of the average annual compounded rate of return of a
hypothetical investment in the Fund over periods of 1, 3, 5 and 10 years, or for
the life of the Fund, if shorter. These are the rates of return that would
equate the initial amount invested to the ending redeemable value. These rates
of return are calculated pursuant to the following formula: P(1 + T)n = ERV
(where P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years and ERV = the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the period). All total
return figures reflect the deduction of a proportional share of Fund expenses on
an annual basis, and assume that all dividends and distributions are reinvested
when paid.

                                      -35-

<PAGE>   233



PREDECESSOR PERFORMANCE QUOTATIONS

                   The Fund is the accounting survivor and successor of a fund
previously known as the InformationTech 100(R) Fund, which was reorganized into
the Fund effective July 2, 1999. As part of the reorganization, all of the
then-existing shares of the predecessor fund were exchanged for Institutional
Shares of the Fund. The Fund quotes its historical performance track record for
both of its classes of shares based on its predecessor's only shares outstanding
prior to the reorganization.

                   Total return of the Institutional Shares and other classes of
shares of the Fund will be calculated separately. Because each class of shares
is subject to different expenses, the performance of each class for the same
period will differ.


                   The average annual total returns for the Fund for the
periods shown ending September 30, 2000 are as follows:



<TABLE>
<CAPTION>
                                                          LIFE OF FUND
                                         1-YEAR           (APRIL 8, 1997)
                                         ------           ---------------
<S>                                      <C>                     <C>
Berger Information Technology Fund -     ______%           _________%
Institutional Shares
</TABLE>




14.                ADDITIONAL INFORMATION

FUND ORGANIZATION

                   The Fund is a separate series of the Berger Investment
Portfolio Trust (the "Trust"), a Delaware business trust established under the
Delaware Business Trust Act. The Fund was established on February 18, 1999. The
Fund is the successor to the fund formerly known as the InformationTech 100(R)
Fund. The InformationTech 100(R) Fund commenced operations on April 8, 1997, as
a separate series of the Advisors Series Trust, a Delaware business trust. The
InformationTech 100(R) Fund was then reorganized into the Fund in a transaction
that became effective on July 2, 1999. As part of the reorganization, all of the
then-existing shares of the predecessor fund were exchanged for Institutional
Shares of the Fund.

                   The Trust is authorized to issue an unlimited number of
shares of beneficial interest in series or portfolios. Currently, the Fund is
one of seven series established under the Trust, although others may be added in
the future. The Trust is also authorized to establish multiple classes of shares
representing differing interests in an existing or new series. The Fund
currently has two classes of shares, although others may be added in the future.

                   Shares of the Fund are fully paid and nonassessable when
issued. Each share has a par value of $.01. All shares issued by the Fund
participate equally in dividends and other distributions by the Fund, and in the
residual assets of the Fund in the event of its liquidation.

                   DELAWARE BUSINESS TRUST INFORMATION. Under Delaware law,
shareholders of the Fund will enjoy the same limitations on personal liability
as extended to stockholders of a Delaware corporation. Further, the Trust
Instrument of the Trust provides that no shareholder shall be personally liable
for the debts, liabilities, obligations and expenses incurred by, contracted for
or otherwise existing with respect to, the Trust or any particular series (fund)
of the Trust. However, the principles of law governing the limitations of
liability of beneficiaries of a business trust have not been authoritatively
established as to business trusts organized under the laws of one jurisdiction
but operating or owning property in other

                                      -36-

<PAGE>   234

jurisdictions. In states that have adopted legislation containing provisions
comparable to the Delaware Business Trust Act, it is believed that the
limitation of liability of beneficial owners provided by Delaware law should be
respected. In those jurisdictions that have not adopted similar legislative
provisions, it is possible that a court might hold that the shareholders of the
Trust are not entitled to the limitations of liability set forth in Delaware law
or the Trust Instrument and, accordingly, that they may be personally liable for
the obligations of the Trust.

                   In order to protect shareholders from such potential
liability, the Trust Instrument requires that every written obligation of the
Trust or any series thereof contain a statement to the effect that such
obligation may only be enforced against the assets of the Trust or such series.
The Trust Instrument also provides for indemnification from the assets of the
relevant series for all losses and expenses incurred by any shareholder by
reason of being or having been a shareholder, and that the Trust shall, upon
request, assume the defense of any such claim made against such shareholder for
any act or obligation of the relevant series and satisfy any judgment thereon
from the assets of that series.

                   As a result, the risk of a shareholder of the Fund incurring
financial loss on account of shareholder liability is limited to circumstances
in which the Fund itself would be unable to meet its obligations. The Trust
believes that the risk of personal liability to shareholders of the Fund is
therefore remote. The trustees intend to conduct the operations of the Trust and
the Fund so as to avoid, to the extent possible, liability of shareholders for
liabilities of the Trust or the Fund.

                   CORPORATE GOVERNANCE INFORMATION PERTAINING TO THE FUND. The
Fund is not required to hold annual shareholder meetings unless required by the
Investment Company Act of 1940 or other applicable law or unless called by the
trustees. If shareholders owning at least 10% of the outstanding shares of the
Trust so request, a special shareholders' meeting of the Trust will be held for
the purpose of considering the removal of a trustee. Special meetings will be
held for other purposes if the holders of at least 25% of the outstanding shares
of the Trust so request. Subject to certain limitations, the Trust will
facilitate appropriate communications by shareholders desiring to call a special
meeting for the purpose of considering the removal of a trustee.

                   Shareholders of the Fund and, where applicable, the other
series/classes of the Trust, generally vote separately on matters relating to
those respective series/classes, although they vote together and with the
holders of any other series/classes of the Trust in the election of trustees of
the Trust and on all matters relating to the Trust as a whole. Each full share
of the Fund has one vote.

                   Shares of the Fund have non-cumulative voting rights, which
means that the holders of more than 50% of the shares voting for the election of
trustees can elect 100% of the trustees if they choose to do so and, in such
event, the holders of the remaining less than 50% of the shares voting for the
election of trustees will not be able to elect any person or persons as
trustees.

                   Shares of the Fund have no preemptive rights. There are no
sinking funds or arrearage provisions which may affect the rights of the Fund
shares. Fund shares have no subscription rights or conversion rights, except
that shareholders of any class of the Fund may convert their shares into shares
of any other class of the Fund in the event and only in the event the
shareholder ceases to be eligible to purchase or hold shares of the original
class, or becomes eligible to purchase shares of a different class, by reason of
a change in the shareholder's status under the conditions of eligibility in
effect for such class at that time. Shares of the Fund may be transferred by
endorsement, or other customary methods, but the Fund is not bound to recognize
any transfer until it is recorded on its books.

                   Under governing corporate law, the Fund may enter into a
variety of corporate transactions, such as reorganizations, conversions, mergers
and asset transfers, or may be liquidated. Any such transaction would be subject
to a determination from the trustees that the transaction was in the best
interests of the Fund and its shareholders, and may require obtaining
shareholder approval.

                                      -37-

<PAGE>   235




MORE INFORMATION ON SPECIAL MULTI-CLASS FUND STRUCTURE

                   The Fund currently has divided its shares into two classes of
shares, the Institutional Shares covered by this SAI and the Investor Shares
offered through a separate Prospectus and SAI. The Fund implemented its
multi-class structure by adopting a Rule 18f-3 Plan under the 1940 Act
permitting it to issue its shares in classes. The Fund's Rule 18f-3 Plan governs
such matters as class features, dividends, voting, allocation of income and
expenses between classes, exchange and trustee monitoring of the Plan. Each
class is subject to such investment minimums and other conditions of eligibility
as are set forth in the relevant prospectus for the class, as it may be amended
from time to time. Investor Shares are available to the general public and bear
a 0.25% 12b-1 fee. Information concerning Investor Shares is available from the
Fund at 1-800-333-1001.

                    Subject to the Trust's Trust Instrument and any other
applicable provisions, the trustees of the Trust have the authority to create
additional classes, or change existing classes, from time to time, in accordance
with Rule 18f-3 under the Act.

PRINCIPAL SHAREHOLDERS


                   Insofar as the management of the Fund is aware, as of
December 29, 2000, no person owned, beneficially or of record, more than 5% of
the outstanding shares of the Fund, except for the following:



<TABLE>
<CAPTION>
OWNER                                                   PERCENTAGE HELD(1)
-----                                                   ------------------
<S>                                                   <C>
Charles Schwab & Co., Inc.                              _____%
101 Montgomery Street                                   (owned of record)
San Francisco,  CA 94104

Du Bain 1991 Trust                                      _____%
Myron Du Bain TTEE                                      (owned of record)
160 Sansome Street, 17th Floor
San Francisco, CA 94104
</TABLE>


(1)   All shares appearing on this table are of the Fund's Institutional Shares
      class.


                   In addition, as of that date, Schwab owned of record _____%
of the Investor Shares class of the Fund, which together with its Institutional
Shares, constitute _____% of the Fund's total outstanding shares.

                   In addition, Bay Isle has advised the Trust that, as of
December 29, 2000, it had voting discretion over approximately _____% of the
Fund's outstanding shares in accounts beneficially owned by various Bay Isle
advisory clients. Bay Isle may be deemed to beneficially own those shares as a
result of its voting discretion.

                   Any person owning more than 25% of the outstanding securities
of the Fund may be deemed to control it. Schwab is believed to hold its shares
of the Fund as nominee for the benefit of its clients or customers.


                                      -38-

<PAGE>   236

DISTRIBUTION


                  Berger Distributors LLC, as the Fund's Distributor, is the
principal underwriter of the Fund's shares. The Distributor is a wholly-owned
subsidiary of Berger LLC. The Distributor is a registered broker-dealer under
the Securities Exchange Act of 1934 and is a member of the National Association
of Securities Dealers, Inc. The Distributor acts as the agent of the Fund in
connection with the sale of the Fund's shares in all states in which the shares
are eligible for sale and in which the Distributor is qualified as a
broker-dealer. David J. Schultz, Chief Financial Officer, Assistant Secretary
and Treasurer of the Distributor, is also Vice President and Treasurer of the
Fund. Janice M. Teague, Vice President and Secretary of the Distributor, is also
Vice President and Assistant Secretary of the Fund. Brian Ferrie, Vice President
and Chief Compliance Officer of the Distributor, is also Vice President of the
Fund. Sue Vreeland, Assistant Secretary of the Distributor, is also Secretary of
the Fund.


                   The Fund and the Distributor are parties to a Distribution
Agreement that continues through April 2001, and thereafter from year to year if
such continuation is specifically approved at least annually by the trustees or
by vote of a majority of the outstanding shares of the Fund and in either case
by vote of a majority of the trustees who are not "interested persons" (as that
term is defined in the Investment Company Act of 1940) of the Fund or the
Distributor. The Distribution Agreement is subject to termination by the Fund or
the Distributor on 60 days' prior written notice, and terminates automatically
in the event of its assignment. Under the Distribution Agreement, the
Distributor continuously offers shares of the Fund and solicits orders to
purchase Fund shares at net asset value. The Distributor is not compensated for
its services under the Distribution Agreement, but may be reimbursed by Berger
LLC for its costs in distributing Fund shares.

OTHER INFORMATION

                   The Trust has filed with the Securities and Exchange
Commission, Washington, D.C., a Registration Statement under the Securities Act
of 1933, as amended, with respect to the securities of the Fund of which this
Statement of Additional Information is a part. If further information is desired
with respect to the Fund or such securities, reference is made to the
Registration Statement and the exhibits filed as a part thereof.


                   Davis, Graham & Stubbs LLP, 1550 Seventeenth Street, Suite
500, Denver, Colorado, acts as counsel to the Fund.


INDEPENDENT ACCOUNTANTS


                  [TO BE UPDATED]

                                          -39-

<PAGE>   237

FINANCIAL INFORMATION



                  [TO BE UPDATED]


                   That Annual Report is enclosed with this Statement of
Additional Information. Additional copies may be obtained upon request without
charge by calling the Fund at 1-800-259-2820.




                                      -40-

<PAGE>   238



                                   APPENDIX A

HIGH-YIELD/HIGH-RISK SECURITIES

         The Fund may invest in convertible securities of any quality, including
unrated securities or securities rated below investment grade (Ba or lower by
Moody's, BB or lower by S&P) (sometimes referred to as "junk bonds"). However,
the Fund will not purchase any security in default at the time of purchase. The
Fund will not invest more than 20% of the market value of its assets at the time
of purchase in convertible securities rated below investment grade.

         Securities rated below investment grade are subject to greater risk
that adverse changes in the financial condition of their issuers or in general
economic conditions, or an unanticipated rise in interest rates, may impair the
ability of their issuers to make payments of interest and principal or
dividends. The market prices of lower grade securities are generally less
sensitive to interest rate changes than higher-rated investments, but more
sensitive to economic changes or individual corporate developments. Periods of
economic uncertainty and change can be expected to result in volatility of
prices of these securities. Lower rated securities also may have less liquid
markets than higher rated securities, and their liquidity as well as their value
may be adversely affected by poor economic conditions. Adverse publicity and
investor perceptions as well as new or proposed laws may also have a negative
impact on the market for high-yield/high-risk bonds. In the event of an
unanticipated default, the Fund will experience a reduction in its income and
could expect a decline in the market value of the securities affected. The
prices of these securities may be more volatile and the markets for them may be
less liquid than those for higher-rated securities.

         Unrated securities, while not necessarily of lower quality than rated
securities, may not have as broad a market. Unrated securities will be included
in the Fund's percentage limits for investments rated below investment grade,
unless the Fund's sub-advisor deems such securities to be the equivalent of
investment grade. If securities purchased by the Fund are downgraded following
purchase, or if other circumstances cause the Fund to exceed its percentage
limits on assets invested in securities rated below investment grade, the
trustees of the Fund, in consultation with the Fund's sub-advisor, will
determine what action, if any, is appropriate in light of all relevant
circumstances.

         Relying in part on ratings assigned by credit agencies in making
investments will not protect the Fund from the risk that the securities will
decline in value, since credit ratings represent evaluations of the safety of
principal, dividend and/or interest payments, and not the market values of such
securities. Moreover, such ratings may not be changed on a timely basis to
reflect subsequent events.

         Although the market for high-yield debt securities has been in
existence for many years and from time to time has experienced economic
downturns, this market has involved a significant increase in the use of
high-yield debt securities to fund highly leverage corporate acquisitions and
restructurings. Past experience may not, therefore, provide an accurate
indication of future performance of the high-yield debt securities market,
particularly during periods of economic recession.

         Expenses incurred in recovering an investment in a defaulted security
may adversely affect the Fund's net asset value. Moreover, the reduced liquidity
of the secondary market for such securities may adversely affect the market
price of, and the ability of the Fund to value, particular securities at certain
times, thereby making it difficult to make specific valuation determinations.

CORPORATE BOND RATINGS

         The ratings of fixed-income securities by Moody's and Standard & Poor's
are a generally accepted measurement of credit risk. However, they are subject
to certain limitations. Ratings are generally based upon historical events and
do not necessarily reflect the future. In addition, there is a period of time
between the issuance of a rating and the update of the rating, during which time
a published rating may be inaccurate.


                                      -41-

<PAGE>   239




KEY TO MOODY'S CORPORATE RATINGS

         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 generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.

         A-Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.

         Baa-Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.

         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 good and bad times over the future. Uncertainty of position
characterizes bonds of this class.

         B-Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.

         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 Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic category.

KEY TO STANDARD & POOR'S CORPORATE RATINGS

         AAA-Debt rated AAA has the highest rating assigned by Standard &
Poor's. 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 the higher rated issues only in small degree.

                                      -42-

<PAGE>   240

         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
debt in this category than 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 will likely have some quality and protective characteristics, these
are out-weighed by the large uncertainties or major risk exposures to adverse
conditions.

         C1-The rating C1 is reserved for income bonds on which no interest is
being paid.

         D-Debt rated D is in default, and payment of interest and/or repayment
of principal is in arrears.

         PLUS (+) OR MINUS (-)-The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.



                                      -43-

<PAGE>   241


                           BERGER NEW GENERATION FUND
                 (A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST)

                              INSTITUTIONAL SHARES

                       STATEMENT OF ADDITIONAL INFORMATION
                      SHAREHOLDER SERVICES: 1-800-960-8427


     This Statement of Additional Information ("SAI") is not a prospectus. It
relates to the Prospectus for the Berger New Generation Fund (the "Fund") --
Institutional Shares, dated January 29, 2001, as it may be amended or
supplemented from time to time, which may be obtained by writing the Fund at
P.O. Box 5005, Denver, Colorado 80217, or calling 1-800-259-2820.


     This SAI is about the class of shares of the Fund designated as
Institutional Shares. Institutional Shares are designed for pension and
profit-sharing plans, employee benefit trusts, endowments, foundations and
corporations, as well as high net worth individuals, who are willing to maintain
a minimum account balance of $250,000. Shares of the Fund may be offered through
certain financial intermediaries that may charge their customers transaction or
other fees with respect to the customers' investment in the Fund.

     The following financial statements of the Fund are incorporated herein by
reference:


     [TO BE UPDATED]


     Copies of that Annual Report are available, without charge, upon request,
by calling 1-800-259-2820.


                             DATED JANUARY 29, 2001




<PAGE>   242


                                TABLE OF CONTENTS
                                        &
                         CROSS-REFERENCES TO PROSPECTUS


<TABLE>
<CAPTION>

                                                                          CROSS-REFERENCES TO
                                                             PAGE         RELATED DISCLOSURES
SECTION                                                      NO.          IN PROSPECTUS
-------                                                      --------     -------------------

<S>                                                            <C>        <C>
Introduction                                                    1         Table of Contents

1. Investment Strategies and Risks of the Fund                  1         Berger New Generation Fund;
                                                                          Investment Techniques, Securities and Associated Risks

2. Investment Restrictions                                      14        Berger New Generation Fund;
                                                                          Investment Techniques, Securities and Associated Risks

3. Management of the Fund                                       15        Berger New Generation Fund;
                                                                          Organization of the Fund

4. Investment Advisor                                           20        Berger New Generation Fund;
                                                                          Organization of the Fund

5. Expenses of the Fund                                         23        Berger New Generation Fund; Financial Highlights for the
                                                                          Fund; Organization of the Fund

6. Brokerage Policy                                             25        Berger New Generation Fund;
                                                                          Organization of the Fund

7. How to Purchase and Redeem Shares in the Fund                27        Buying Shares; Exchanging Shares

8. How the Net Asset Value is Determined                        28        Your Share Price

9. Income Dividends, Capital Gains Distributions and Tax        29        Distributions and Taxes
   Treatment

10. Suspension of Redemption Rights                             30        Other Information About Your Account

11. Tax-Sheltered Retirement Plans                              31        Tax-Sheltered Retirement Plans

12. Exchange Privilege                                          31        Exchanging Shares

13. Performance Information                                     31        Berger New Generation Fund;  Financial Highlights for the
                                                                          Fund;

14. Additional Information                                      32        Organization of the Fund; Special Fund Structure

Financial Information                                           36        Financial Highlights for the Fund
</TABLE>

                                      -i-

<PAGE>   243


                                  INTRODUCTION

     The Fund described in this SAI is a mutual fund, or open-end, management
investment company. The Fund is a diversified fund.

1.   INVESTMENT STRATEGIES AND RISKS OF THE FUND

     The Prospectus describes the investment objective of the Fund and the
principal investment policies and strategies used to achieve that objective. It
also describes the principal risks of investing in the Fund.

     This section contains supplemental information concerning the types of
securities and other instruments in which the Fund may invest, the investment
policies and portfolio strategies that the Fund may utilize and certain risks
attendant to those investments, policies and strategies.

     COMMON AND PREFERRED STOCKS. Stocks represent shares of ownership in a
company. Generally, preferred stock has a specified dividend and ranks after
bonds and before common stocks in its claim on income for dividend payments and
on assets should the company be liquidated. After other claims are satisfied,
common stockholders participate in company profits on a pro-rata basis. Profits
may be paid out in dividends or reinvested in the company to help it grow.
Increases and decreases in earnings are usually reflected in a company's stock
price, so common stocks generally have the greatest appreciation and
depreciation potential of all corporate securities. While most preferred stocks
pay dividends, the Fund may purchase preferred stock where the issuer has
omitted, or is in danger of omitting, payment of its dividends. Such investments
would be made primarily for their capital appreciation potential. All
investments in stocks are subject to market risk, meaning that their prices may
move up and down with the general stock market, and that such movements might
reduce their value.

     DEBT SECURITIES. Debt securities (such as bonds or debentures) are
fixed-income securities which bear interest and are issued by corporations or
governments. The issuer has a contractual obligation to pay interest at a stated
rate on specific dates and to repay principal on a specific maturity date. In
addition to market risk, debt securities are generally subject to two other
kinds of risk: credit risk and interest rate risk. Credit risk refers to the
ability of the issuer to meet interest or principal payments as they come due.
The lower the rating given a security by a rating service (such as Moody's
Investor Service ("Moody's") and Standard & Poor's ("S&P")), the greater the
credit risk the rating service perceives with respect to that security. The Fund
will not purchase any nonconvertible securities rated below investment grade (Ba
or lower by Moody's, BB or lower by S&P). In cases where the ratings assigned by
more than one rating agency differ, the Fund will consider the security as rated
in the higher category. If nonconvertible securities purchased by the Fund are
downgraded to below investment grade following purchase, the trustees of the
Fund, in consultation with the Fund's advisor, will determine what action, if
any, is appropriate in light of all relevant circumstances. For a further
discussion of debt security ratings, see Appendix A to this SAI.

     Interest rate risk refers to the fact that the value of fixed-income
securities (like debt securities) generally fluctuates in response to changes in
interest rates. A decrease in interest rates will generally result in an
increase in the price of fixed-income securities held by the Fund. Conversely,
during periods of rising interest rates, the value of fixed-income securities
held by the Fund will generally decline. Longer-term securities are generally
more sensitive to interest rate changes and are more volatile than shorter-term
securities, but they generally offer higher yields to compensate investors for
the associated risks.

     Certain debt securities can also present prepayment risk. For example, a
security may contain redemption and call provisions. If an issuer exercises
these provisions when interest rates are declining, the Fund could sustain
investment losses as well as have to reinvest the proceeds from the security at
lower interest rates, resulting in a decreased return for the Fund.

     CONVERTIBLE SECURITIES. The Fund may also purchase debt or equity
securities which are convertible into common stock when the Fund's advisor
believes they offer the potential for a higher total return than nonconvertible
securities. While fixed-income securities generally have a priority claim on a

                                      -1-

<PAGE>   244


corporation's assets over that of common stock, some of the convertible
securities which the Fund may hold are high-yield/high-risk securities that are
subject to special risks, including the risk of default in interest or principal
payments which could result in a loss of income to the Fund or a decline in the
market value of the securities. Convertible securities often display a degree of
market price volatility that is comparable to common stocks. The credit risk
associated with convertible securities generally is reflected by their ratings
by organizations such as Moody's or S&P or a similar determination of
creditworthiness by the Fund's advisor. The Fund has no pre-established minimum
quality standards for convertible securities and may invest in convertible
securities of any quality, including lower rated or unrated securities. However,
the Fund will not invest in any security in default at the time of purchase, and
the Fund will invest less than 20% of the market value of its assets at the time
of purchase in convertible securities rated below investment grade. If
convertible securities purchased by the Fund are downgraded following purchase,
or if other circumstances cause 20% or more of the Fund's assets to be invested
in convertible securities rated below investment grade, the trustees of the
Fund, in consultation with the Fund's advisor, will determine what action, if
any, is appropriate in light of all relevant circumstances. For a further
discussion of debt security ratings, see Appendix A to this SAI.

     SPECIAL SITUATIONS. The Fund may also invest in "special situations."
Special situations are companies that have recently experienced or are
anticipated to experience a significant change in structure, management,
products or services which may significantly affect the value of their
securities. Examples of special situations are companies being reorganized or
merged, companies emerging from bankruptcy, companies introducing unusual new
products or which enjoy particular tax advantages. Other examples are companies
experiencing changes in senior management, extraordinary corporate events,
significant changes in cost or capital structure or which are believed to be
probable takeover candidates. The opportunity to invest in special situations,
however, is limited and depends in part on the market's assessment of these
companies and their circumstances. By its nature, a "special situation" company
involves to some degree a break with the company's past experience. This creates
greater uncertainty and potential risk of loss than if the company were
operating according to long-established patterns. In addition, stocks of
companies in special situations may decline or not appreciate as expected if an
anticipated change or development does not occur or is not assessed by the
market as favorably as expected.

     SECURITIES OF SMALLER COMPANIES. The Fund may invest in securities of
companies with small or mid-sized market capitalizations. Market capitalization
is defined as total current market value of a company's outstanding common
stock. Investments in companies with smaller market capitalizations may involve
greater risks and price volatility (that is, more abrupt or erratic price
movements) than investments in larger, more mature companies since smaller
companies may be at an earlier stage of development and may have limited product
lines, reduced market liquidity for their shares, limited financial resources or
less depth in management than larger or more established companies. Smaller
companies also may be less significant factors within their industries and may
have difficulty withstanding competition from larger companies. While smaller
companies may be subject to these additional risks, they may also realize more
substantial growth than larger or more established companies.

     SECURITIES OF COMPANIES WITH LIMITED OPERATING HISTORIES. The Fund may
invest in securities of companies with limited operating histories. The Fund
considers these to be securities of companies with a record of less than three
years' continuous operation, even including the operations of any predecessors
and parents. (These are sometimes referred to as "unseasoned issuers.") These
companies by their nature have only a limited operating history which can be
used for evaluating the company's growth prospects. As a result, investment
decisions for these securities may place a greater emphasis on current or
planned product lines and the reputation and experience of the company's
management and less emphasis on fundamental valuation factors than would be the
case for more mature companies. In addition, many of these companies may also be
small companies and involve the risks and price volatility associated with
smaller companies.

     INITIAL PUBLIC OFFERINGS. The Fund may invest in a company's securities at
the time the company first offers securities to the public, that is, at the time
of the company's initial public offering or IPO. Although companies can be any
age or size at the time of their IPOs, they are often smaller and have a limited
operating history, which involve a greater potential for the value of their
securities to be impaired

                                      -2-

<PAGE>   245


following the IPO. See "Securities of Smaller Companies" and "Securities of
Companies with Limited Operating Histories" above.

     Investors in IPOs can be adversely affected by substantial dilution in the
value of their shares, by sales of additional shares and by concentration of
control in existing management and principal shareholders. In addition, all of
the factors that affect stock market performance may have a greater impact on
the shares of IPO companies.

     The price of a company's securities may be highly unstable at the time of
its IPO and for a period thereafter due to market psychology prevailing at the
time of the IPO, the absence of a prior public market, the small number of
shares available and limited availability of investor information. As a result
of this or other factors, the Fund's advisor might decide to sell an IPO
security more quickly than it would otherwise, which may result in a significant
gain or loss and greater transaction costs to the Fund. Any gains from shares
held for 12 months or less will be treated as short-term gains, taxable as
ordinary income to the Fund's shareholders. In addition, IPO securities may be
subject to varying patterns of trading volume and may, at times, be difficult to
sell without an unfavorable impact on prevailing prices.

     The effect of an IPO investment can have a magnified impact on the Fund's
performance when the Fund's asset base is small. Consequently, IPOs may
constitute a significant portion of the Fund's returns particularly when the
Fund is small. Since the number of securities issued in an IPO is limited, it is
likely that IPO securities will represent a smaller component of the Fund's
assets as it increases in size, and therefore have a more limited effect on the
Fund's performance.

     There can be no assurance that IPOs will continue to be available for the
Fund to purchase. The number or quality of IPOs available for purchase by the
Fund may vary, decrease or entirely disappear. In some cases, the Fund may not
be able to purchase IPOs at the offering price, but may have to purchase the
shares in the aftermarket at a price greatly exceeding the offering price,
making it more difficult for the Fund to realize a profit.

     The advisor's IPO trade allocation procedures govern which funds and other
advised accounts participate in the allocation of any IPO. See the heading
"Trade Allocations" under Section 4 below. Under the IPO allocation procedures
of Berger LLC, the Fund generally will not participate in an IPO if the
securities available for allocation to the Fund are insignificant relative to
the Fund's net assets. As a result, any fund or account whose assets are very
large is not likely to participate in the allocation of many IPO's.

     FOREIGN SECURITIES. The Fund may invest in foreign securities, which may be
traded in foreign markets and denominated in foreign currency. The Fund's
investments may also include American Depositary Receipts (ADRs), European
Depositary Receipts (EDRs) which are similar to ADRs, in bearer form, designed
for use in the European securities markets, and in Global Depositary Receipts
(GDRs).

     Investments in foreign securities involve some risks that are different
from the risks of investing in securities of U.S. issuers, such as the risk of
adverse political, social, diplomatic and economic developments and, with
respect to certain countries, the possibility of expropriation, taxes imposed by
foreign countries or limitations on the removal of monies or other assets of the
Fund. Moreover, the economies of individual foreign countries will vary in
comparison to the U.S. economy in such respects as growth of gross domestic
product, rate of inflation, capital reinvestment, resources, self-sufficiency
and balance of payments position. Securities of some foreign companies,
particularly those in developing countries, are less liquid and more volatile
than securities of comparable domestic companies. A developing country generally
is considered to be in the initial stages of its industrialization cycle.
Investing in the securities of developing countries may involve exposure to
economic structures that are less diverse and mature, and to political systems
that can be expected to have less stability than developed countries.

     There also may be less publicly available information about foreign issuers
and securities than domestic issuers and securities, and foreign issuers
generally are not subject to accounting, auditing and financial reporting
standards, requirements and practices comparable to those applicable to domestic
issuers. Also, there is generally less government supervision and regulation of
exchanges, brokers, financial

                                      -3-

<PAGE>   246



institutions and issuers in foreign countries than there is in the U.S. Foreign
financial markets typically have substantially less volume than U.S. markets.
Foreign markets also have different clearance and settlement procedures and, in
certain markets, delays or other factors could make it difficult to effect
transactions, potentially causing the Fund to experience losses or miss
investment opportunities. The use of a foreign securities depository may
increase this risk. The Funds may maintain assets with a foreign securities
depository if certain conditions are met. A foreign securities depository may
maintain assets on behalf of a Fund if the depository: (i) acts as or operates a
system for the central handling of securities that is regulated by a foreign
financial regulatory authority; (ii) holds assets on behalf of the Fund under
safekeeping conditions no less favorable than those that apply to other
participants; (iii) maintains records that identify the assets of participants,
and keep its own assets separated from the assets of participants; (iv) provides
periodic reports to participants; and (v) undergoes periodic examination by
regulatory authorities or independent accountants. In addition, the Funds'
primary custodian provides the Fund with an analysis of the custodial risks of
using a depository, monitors the depository on a continuous basis, and notifies
the Funds of any material changes in risks associated with using the depository.
In general, the analysis may include an analysis of a depository's expertise and
market reputation, the quality of its services, its financial strength, and
insurance or indemnification arrangements, the extent and quality of regulation
and independent examination of the depository, its standing in published
ratings, its internal controls, and other procedures for safeguarding
investments, and any related legal proceedings.


     Costs associated with transactions in foreign securities are generally
higher than with transactions in U.S. securities. The Fund will incur greater
costs in maintaining assets in foreign jurisdictions and in buying and selling
foreign securities generally, resulting in part from converting foreign
currencies into U.S. dollars. In addition, the Fund might have greater
difficulty taking appropriate legal action with respect to foreign investments
in non-U.S. courts than with respect to domestic issuers in U.S. courts, which
may heighten the risk of possible losses through the holding of securities by
custodians and securities depositories in foreign countries.

     If the Fund is invested in securities denominated or quoted in currencies
other than the U.S. dollar, changes in foreign currency exchange rates will
affect the value of the investments in its portfolio and the unrealized
appreciation or depreciation of investments insofar as U.S. investors are
concerned. If the foreign currency in which a security is denominated
appreciates against the U.S. dollar, the dollar value of the security will
increase. Conversely, a decline in the exchange rate of the foreign currency
against the U.S. dollar would adversely affect the dollar value of the foreign
securities. Foreign currency exchange rates are determined by forces of supply
and demand on the foreign exchange markets, which are in turn affected by the
international balance of payments and other economic and financial conditions,
government intervention, speculation and other factors.

     PASSIVE FOREIGN INVESTMENT COMPANIES (PFICS). The Fund may purchase the
securities of certain companies considered Passive Foreign Investment Companies
(PFICs) under U.S. tax laws. For certain types of PFICs, in addition to bearing
their proportionate share of the Fund's expenses (management fees and operating
expenses), shareholders will also indirectly bear similar expenses of such PFIC.
PFIC investments also may be subject to less favorable U.S. tax treatment, as
discussed in Section 9 below.

     ILLIQUID AND RESTRICTED SECURITIES. The Fund is authorized to invest in
securities which are illiquid or not readily marketable because they are subject
to restrictions on their resale ("restricted securities") or because, based upon
their nature or the market for such securities, no ready market is available.
However, the Fund will not purchase any such security, the purchase of which
would cause the Fund to invest more than 15% of its net assets, measured at the
time of purchase, in illiquid securities. Investments in illiquid securities
involve certain risks to the extent that the Fund may be unable to dispose of
such a security at the time desired or at a reasonable price or, in some cases,
may be unable to dispose of it at all. In addition, in order to resell a
restricted security, the Fund might have to incur the potentially substantial
expense and delay associated with effecting registration. If securities become
illiquid following purchase or other circumstances cause more than 15% of the
Fund's net assets to be invested in illiquid securities, the trustees of the
Fund, in consultation with the Fund's advisor, will determine what action, if
any, is appropriate in light of all relevant circumstances.

                                      -4-

<PAGE>   247


     Repurchase agreements maturing in more than seven days will be considered
as illiquid for purposes of this restriction. Pursuant to guidelines established
by the trustees, the Fund's advisor will determine whether securities eligible
for resale to qualified institutional buyers pursuant to SEC Rule 144A under the
Securities Act of 1933 should be treated as illiquid investments considering,
among other things, the following factors: (1) the frequency of trades and
quotes for the security; (2) the number of dealers willing to purchase or sell
the security and the number of other potential purchasers; (3) dealer
undertakings to make a market in the security; and (4) the nature of the
security and the marketplace trades (e.g., the time needed to dispose of the
security, the method of soliciting offers, and the mechanics of the transfer).
The liquidity of the Fund's investments in Rule 144A securities could be
impaired if qualified institutional buyers become uninterested in purchasing
these securities.

     REPURCHASE AGREEMENTS. The Fund may invest in repurchase agreements with
various financial organizations, including commercial banks, registered
broker-dealers and registered government securities dealers. A repurchase
agreement is an agreement under which the Fund acquires a debt security
(generally a debt security issued or guaranteed by the U.S. government or an
agency thereof, a banker's acceptance or a certificate of deposit) from a
commercial bank, broker or dealer, subject to resale to the seller at an agreed
upon price and date (normally, the next business day). A repurchase agreement
may be considered a loan collateralized by securities. The resale price reflects
an agreed upon interest rate effective for the period the instrument is held by
the Fund and is unrelated to the interest rate on the underlying instrument. In
these transactions, the securities acquired by the Fund (including accrued
interest earned thereon) must have a total value equal to or in excess of the
value of the repurchase agreement and are held by the Fund's custodian bank
until repurchased. In addition, the trustees will establish guidelines and
standards for review by the investment advisor of the creditworthiness of any
bank, broker or dealer party to a repurchase agreement with the Fund. The Fund
will not enter into a repurchase agreement maturing in more than seven days if
as a result more than 15% of the Fund's net assets would be invested in such
repurchase agreements and other illiquid securities.

     These transactions must be fully collateralized at all times by debt
securities (generally a security issued or guaranteed by the U.S. Government or
an agency thereof, a banker's acceptance or a certificate of deposit), but
involve certain risks, such as credit risk to the Fund if the other party
defaults on its obligation and the Fund is delayed or prevented from liquidating
the collateral. For example, if the other party to the agreement defaults on its
obligation to repurchase the underlying security at a time when the value of the
security has declined, the Fund may incur a loss upon disposition of the
security. If the other party to the agreement becomes insolvent and subject to
liquidation or reorganization under the Bankruptcy Code or other laws, a court
may determine that the underlying security is collateral for a loan by the Fund
not within the control of the Fund and therefore the realization by the Fund on
such collateral may automatically be stayed and delayed. Further, it is possible
that the Fund may not be able to substantiate its interest in the underlying
security and may be deemed an unsecured creditor of the other party to the
agreement. The Fund expects that these risks can be controlled through careful
monitoring procedures.

     WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Fund may purchase and sell
securities on a when-issued or delayed delivery basis. However, the Fund
currently does not intend to purchase or sell securities on a when-issued or
delayed delivery basis, if as a result more than 5% of its total assets taken at
market value at the time of purchase would be invested in such securities.
When-issued or delayed delivery transactions arise when securities (normally,
obligations of issuers eligible for investment by the Fund) are purchased or
sold by the Fund with payment and delivery taking place in the future in order
to secure what is considered to be an advantageous price or yield. However, the
yield available on a comparable security when delivery takes place may vary from
the yield on the security at the time that the when-issued or delayed delivery
transaction was entered into. Any failure to consummate a when-issued or delayed
delivery transaction may result in the Fund missing the opportunity of obtaining
a price or yield considered to be advantageous. When-issued and delayed delivery
transactions may generally be expected to settle within one month from the date
the transactions are entered into, but in no event later than 90 days. However,
no payment or delivery is made by the Fund until it receives delivery or payment
from the other party to the transaction.

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<PAGE>   248


     When the Fund purchases securities on a when-issued basis, it will maintain
in a segregated account with its custodian cash, U.S. government securities or
other liquid assets having an aggregate value equal to the amount of such
purchase commitments, until payment is made. If necessary, additional assets
will be placed in the account daily so that the value of the account will equal
or exceed the amount of the Fund's purchase commitments.

     LENDING OF PORTFOLIO SECURITIES. The Fund may lend its securities to
qualified institutional investors (such as brokers, dealers or other financial
organizations) who need to borrow securities in order to complete certain
transactions, such as covering short sales, avoiding failures to deliver
securities or completing arbitrage operations. Loans of securities by the Fund
will be collateralized by cash, letters of credit, or securities issued or
guaranteed by the U.S. Government or its agencies. The collateral will equal at
least 100% of the current market value of the loaned securities,
marked-to-market on a daily basis. By lending its securities, the Fund will be
attempting to generate income through the receipt of interest on the loan which,
in turn, can be invested in additional securities to pursue the Fund's
investment objective. Any gain or loss in the market price of the securities
loaned that might occur during the term of the loan would be for the account of
the Fund.

     The Fund may lend its portfolio securities to qualified brokers, dealers,
banks or other financial institutions, so long as the terms, the structure and
the aggregate amount of such loans are not inconsistent with the Investment
Company Act of 1940, or the Rules and Regulations or interpretations of the
Securities and Exchange Commission (the "Commission") thereunder, which
currently require that (a) the borrower pledge and maintain with the Fund
collateral consisting of cash, an irrevocable letter of credit or securities
issued or guaranteed by the United States government having a value at all times
not less than 100% of the value of the securities loaned, (b) the borrower add
to such collateral whenever the price of the securities loaned rises (i.e., the
borrower "marks to the market" on a daily basis), (c) the loan be made subject
to termination by the Fund at any time and (d) the Fund receives reasonable
interest on the loan, which interest may include the Fund's investing cash
collateral in interest bearing short-term investments, and (e) the Fund receives
all dividends and distributions on the loaned securities and any increase in the
market value of the loaned securities.

     The Fund bears risk of loss in the event that the other party to a
securities lending transaction defaults on its obligations and the Fund is
delayed in or prevented from exercising its rights to dispose of the collateral,
including the risk of a possible decline in the value of the collateral
securities during the period in which the Fund seeks to assert these rights, the
risk of incurring expenses associated with asserting these rights and the risk
of losing all or a part of the income from the transaction. The Fund will not
lend its portfolio securities if, as a result, the aggregate value of such loans
would exceed 33-1/3% of the value of the Fund's total assets (including the
value of the collateral received to secure the loan). Loan arrangements made by
the Fund will comply with all other applicable regulatory requirements,
including the rules of the New York Stock Exchange, which rules presently
require the borrower, after notice, to redeliver the securities within the
normal settlement time of three business days. All relevant facts and
circumstances, including creditworthiness of the broker, dealer or institution,
will be considered in making decisions with respect to the lending of
securities, subject to review by the Fund's trustees.

     Although voting rights with respect to loaned securities pass to the
borrower, the Fund retains the right to recall a security (or terminate a loan)
for the purpose of exercising the security's voting rights. Efforts to recall
loaned securities in time to exercise voting rights may be unsuccessful,
especially for foreign securities or thinly traded securities. In addition, it
is expected that loaned securities will be recalled for voting only when the
items being voted on are, in the judgment of the Fund's advisor, either material
to the economic value of the security or threaten to materially impact the
issuing company's corporate governance policies or structure.

     SHORT SALES. The Fund currently is only permitted to engage in short sales
if, at the time of the short sale, the Fund owns or has the right to acquire an
equivalent kind and amount of the security being sold short at no additional
cost (i.e., short sales "against the box").

                                      -6-

<PAGE>   249


     In a short sale, the seller does not immediately deliver the securities
sold and is said to have a short position in those securities until delivery
occurs. To make delivery to the purchaser, the executing broker borrows the
securities being sold short on behalf of the seller. While the short position is
maintained, the seller collateralizes its obligation to deliver the securities
sold short in an amount equal to the proceeds of the short sale plus an
additional margin amount established by the Board of Governors of the Federal
Reserve. If the Fund engages in a short sale, the collateral account will be
maintained by the Fund's custodian. While the short sale is open, the Fund will
maintain in a segregated custodial account an amount of securities convertible
into or exchangeable for such equivalent securities at no additional cost. These
securities would constitute the Fund's long position.

     Under prior law, the Fund could have made a short sale, as described above,
when it wanted to sell a security it owned at a current attractive price, but
also wished to defer recognition of gain or loss for Federal income tax purposes
and for purposes of satisfying certain tests applicable to regulated investment
companies under the Internal Revenue Code. However, federal tax legislation has
eliminated the ability to defer recognition of gain or loss in short sales
against the box and accordingly, it is not anticipated that the Fund will be
engaging in these transactions unless there are further legislative changes.

     HEDGING TRANSACTIONS. The Fund is authorized to make limited use of certain
types of futures, forwards and/or options, but only for the purpose of hedging,
that is, protecting against market risk due to market movements that may
adversely affect the value of the Fund's securities or the price of securities
that the Fund is considering purchasing. The utilization of futures, forwards
and options is also subject to policies and procedures which may be established
by the trustees from time to time. In addition, the Fund is not required to
hedge. Decisions regarding hedging are subject to the advisor's judgment of the
cost of the hedge, its potential effectiveness and other factors the advisor
considers pertinent.

     A hedging transaction may partially protect the Fund from a decline in the
value of a particular security or its portfolio generally, although hedging may
also limit the Fund's opportunity to profit from favorable price movements, and
the cost of the transaction will reduce the potential return on the security or
the portfolio. Use of these instruments by the Fund involves the potential for a
loss that may exceed the amount of initial margin the Fund would be permitted to
commit to the contracts under its investment limitation, or in the case of a
call option written by the Fund, may exceed the premium received for the option.
However, the Fund is permitted to use such instruments for hedging purposes
only, and only if the aggregate amount of its obligations under these contracts
does not exceed the total market value of the assets the Fund is attempting to
hedge, such as a portion or all of its exposure to equity securities or its
holding in a specific foreign currency. To help ensure that the Fund will be
able to meet its obligations under its futures and forward contracts and its
obligations under options written by the Fund, the Fund will be required to
maintain liquid assets in a segregated account with its custodian bank or to set
aside portfolio securities to "cover" its position in these contracts.

     The principal risks of the Fund utilizing futures transactions, forward
contracts and options are: (a) losses resulting from market movements not
anticipated by the Fund; (b) possible imperfect correlation between movements in
the prices of futures, forwards and options and movements in the prices of the
securities or currencies hedged or used to cover such positions; (c) lack of
assurance that a liquid secondary market will exist for any particular futures
or options at any particular time, and possible exchange-imposed price
fluctuation limits, either of which may make it difficult or impossible to close
a position when so desired; (d) lack of assurance that the counterparty to a
forward contract would be willing to negotiate an offset or termination of the
contract when so desired; and (e) the need for additional information and skills
beyond those required for the management of a portfolio of traditional
securities. In addition, when the Fund enters into an over-the-counter contract
with a counterparty, the Fund will assume counterparty credit risk, that is, the
risk that the counterparty will fail to perform its obligations, in which case
the Fund could be worse off than if the contract had not been entered into.

     Following is additional information concerning the futures, forwards and
options which the Fund may utilize, provided that no more than 5% of the Fund's
net assets at the time the contract is entered into may be used for initial
margins for financial futures transactions and premiums paid for the purchase of

                                      -7-

<PAGE>   250


options. In addition, the Fund may only write call options that are covered and
only up to 25% of the Fund's total assets.

     Futures Contracts. Financial futures contracts are exchange-traded
contracts on financial instruments (such as securities and foreign currencies)
and securities indices that obligate the holder to take or make delivery of a
specified quantity of the underlying financial instrument, or the cash value of
an index, at a future date. Although futures contracts by their terms call for
the delivery or acquisition of the underlying instruments or a cash payment
based on the mark-to-market value of the underlying instruments, in most cases
the contractual obligation will be offset before the delivery date by buying (in
the case of an obligation to sell) or selling (in the case of an obligation to
buy) an identical futures contract. Such a transaction cancels the original
obligation to make or take delivery of the instruments.

     The Fund may enter into contracts for the purchase or sale for future
delivery of financial instruments, such as securities and foreign currencies, or
contracts based on financial indices including indices of U.S. Government
securities, foreign government securities or equity securities. U.S. futures
contracts are traded on exchanges which have been designated "contract markets"
by the Commodity Futures Trading Commission ("CFTC") and must be executed
through a futures commission merchant (an "FCM"), or brokerage firm, which is a
member of the relevant contract market. Through their clearing corporations, the
exchanges guarantee performance of the contracts as between the clearing members
of the exchange.

     Both the buyer and seller are required to deposit "initial margin" for the
benefit of the FCM when a futures contract is entered into. Initial margin
deposits are equal to a percentage of the contract's value, as set by the
exchange on which the contract is traded, and may be maintained in cash or other
liquid assets. If the value of either party's position declines, that party will
be required to make additional "variation margin" payments to the other party to
settle the change in value on a daily basis. Initial and variation margin
payments are similar to good faith deposits or performance bonds or
party-to-party payments resulting from daily changes in the value of the
contract, unlike margin extended by a securities broker, and would be released
or credited to the Fund upon termination of the futures contract, assuming all
contractual obligations have been satisfied. Unlike margin extended by a
securities broker, initial and variation margin payments do not constitute
purchasing securities on margin for purposes of the Fund's investment
limitations. The Fund will incur brokerage fees when it buys or sells futures
contracts.

     In the event of the bankruptcy of the FCM that holds margin on behalf of
the Fund, the Fund may be entitled to return of margin owed to the Fund only in
proportion to the amount received by the FCM's other customers. The Fund will
attempt to minimize the risk by careful monitoring of the creditworthiness of
the FCMs with which the Fund does business and by depositing margin payments in
a segregated account with the Fund's custodian for the benefit of the FCM when
practical or otherwise required by law.

     The Fund intends to comply with guidelines of eligibility for exclusion
from the definition of the term "commodity pool operator" with the CFTC and the
National Futures Association, which regulate trading in the futures markets.
Accordingly, the Fund will not enter into any futures contract or option on a
futures contract if, as a result, the aggregate initial margin and premiums
required to establish such positions would exceed 5% of the Fund's net assets.

     Although the Fund would hold cash and liquid assets in a segregated account
with a mark-to-market value sufficient to cover the Fund's open futures
obligations, the segregated assets would be available to the Fund immediately
upon closing out the futures position.

     The acquisition or sale of a futures contract may occur, for example, when
the Fund is considering purchasing or holds equity securities and seeks to
protect itself from fluctuations in prices without buying or selling those
securities. For example, if prices were expected to decrease, the Fund might
sell equity index futures contracts, thereby hoping to offset a potential
decline in the value of equity securities in the portfolio by a corresponding
increase in the value of the futures contract position held by the Fund and
thereby preventing the Fund's net asset value from declining as much as it
otherwise would have. The Fund also could protect against potential price
declines by selling portfolio securities and investing in money market

                                      -8-

<PAGE>   251


instruments. However, the use of futures contracts as a hedging technique allows
the Fund to maintain a defensive position without having to sell portfolio
securities.

     Similarly, when prices of equity securities are expected to increase,
futures contracts may be bought to attempt to hedge against the possibility of
having to buy equity securities at higher prices. This technique is sometimes
known as an anticipatory hedge. Since the fluctuations in the value of futures
contracts should be similar to those of equity securities, the Fund could take
advantage of the potential rise in the value of equity securities without buying
them until the market has stabilized. At that time, the futures contracts could
be liquidated and the Fund could buy equity securities on the cash market.

     The ordinary spreads between prices in the cash and futures markets, due to
differences in the nature of those markets, are subject to distortions. First,
all participants in the futures market are subject to initial margin and
variation margin requirements. Rather than meeting additional variation margin
requirements, investors may close out futures contracts through offsetting
transactions which could distort the normal price relationship between the cash
and futures markets. Second, the liquidity of the futures market depends on
participants entering into offsetting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery, liquidity
in the futures market could be reduced and prices in the futures market
distorted. Third, from the point of view of speculators, the margin deposit
requirements in the futures market are less than margin requirements in the
securities market. Therefore, increased participation by speculators in the
futures market may cause temporary price distortions. Due to the possibility of
the foregoing distortions, a correct forecast of general price trends by the
Fund still may not result in a successful use of futures.

     Futures contracts entail additional risks. Although the Fund will only
utilize futures contracts when it believes that use of such contracts will
benefit the Fund, if the Fund's investment judgment is incorrect, the Fund's
overall performance could be worse than if the Fund had not entered into futures
contracts. For example, if the Fund has hedged against the effects of a possible
decrease in prices of securities held in the Fund's portfolio and prices
increase instead, the Fund will lose part or all of the benefit of the increased
value of these securities because of offsetting losses in the Fund's futures
positions. In addition, if the Fund has insufficient cash, it may have to sell
securities from its portfolio to meet daily variation margin requirements. Those
sales may be, but will not necessarily be, at increased prices which reflect the
rising market and may occur at a time when the sales are disadvantageous to the
Fund. Although the buyer of an option cannot lose more than the amount of the
premium plus related transaction costs, a buyer or seller of futures contracts
could lose amounts substantially in excess of any initial margin deposits made,
due to the potential for adverse price movements resulting in additional
variation margin being required by such positions. However, the Fund intends to
monitor its investments closely and will attempt to close its positions when the
risk of loss to the Fund becomes unacceptably high.

     The prices of futures contracts depend primarily on the value of their
underlying instruments. Because there are a limited number of types of futures
contracts, it is possible that the standardized futures contracts available to
the Fund will not match exactly the Fund's current or potential investments. The
Fund may buy and sell futures contracts based on underlying instruments with
different characteristics from the securities in which it typically invests --
for example, by hedging investments in portfolio securities with a futures
contract based on a broad index of securities -- which involves a risk that the
futures position will not correlate precisely with the performance of the Fund's
investments.

     Futures prices can also diverge from the prices of their underlying
instruments, even if the underlying instruments closely correlate with the
Fund's investments. Futures prices are affected by such factors as current and
anticipated short-term interest rates, changes in volatility of the underlying
instruments and the time remaining until expiration of the contract. Those
factors may affect securities prices differently from futures prices. Imperfect
correlations between the Fund's investments and its futures positions may also
result from differing levels of demand in the futures markets and the securities
markets, from structural differences in how futures and securities are traded,
and from imposition of daily price fluctuation limits for futures contracts. The
Fund may buy or sell futures contracts with a value less than or equal to the
securities it wishes to hedge or is considering purchasing. If price changes in
the Fund's futures positions are poorly

                                      -9-

<PAGE>   252


correlated with its other investments, its futures positions may fail to produce
desired gains or result in losses that are not offset by the gains in the Fund's
other investments.

     Because futures contracts are generally settled within a day from the date
they are closed out, compared with a longer settlement period for most types of
securities, the futures markets can provide superior liquidity to the securities
markets. Nevertheless, there is no assurance a liquid secondary market will
exist for any particular futures contract at any particular time. In addition,
futures exchanges may establish daily price fluctuation limits for futures
contracts and may halt trading if a contract'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, it may be impossible for the Fund to enter into
new positions or close out existing positions. If the secondary market for a
futures contract is not liquid because of price fluctuation limits or otherwise,
the Fund may not be able to promptly liquidate unfavorable futures positions and
potentially could be required to continue to hold a futures position until the
delivery date, regardless of changes in its value. As a result, the Fund's
access to other assets held to cover its futures positions also could be
impaired.

     Options on Futures Contracts. The Fund may buy and write options on futures
contracts for hedging purposes. An option on a futures contract gives the Fund
the right (but not the obligation) to buy or sell a futures contract at a
specified price on or before a specified date. The purchase of a call option on
a futures contract is similar in some respects to the purchase of a call option
on an individual security. Depending on the pricing of the option compared to
either the price of the futures contract upon which it is based or the price of
the underlying instrument, ownership of the option may or may not be less risky
than ownership of the futures contract or the underlying instrument. As with the
purchase of futures contracts, the Fund may buy a call option on a futures
contract to hedge against a market advance, and the Fund might buy a put option
on a futures contract to hedge against a market decline.

     The writing of a call option on a futures contract constitutes a partial
hedge against declining prices of the security or foreign currency which is
deliverable under, or of the index comprising, the futures contract. If the
futures price at the expiration of the call option is below the exercise price,
the Fund will retain the full amount of the option premium which provides a
partial hedge against any decline that may have occurred in the Fund's portfolio
holdings. If a call option the Fund has written is exercised, the Fund will
incur a loss which will be reduced by the amount of the premium it received.
Depending on the degree of correlation between change in the value of its
portfolio securities and changes in the value of the futures positions, the
Fund's losses from existing options on futures may to some extent be reduced or
increased by changes in the value of portfolio securities.

     The purchase of a put option on a futures contract is similar in some
respects to the purchase of protective put options on portfolio securities. For
example, the Fund may buy a put option on a futures contract to hedge the Fund's
portfolio against the risk of falling prices.

     The amount of risk the Fund assumes when it buys an option on a futures
contract is the premium paid for the option plus related transaction costs. In
addition to the correlation risks discussed above, the purchase of an option
also entails the risk that changes in the value of the underlying futures
contract will not be fully reflected in the value of the options bought.

     Forward Foreign Currency Exchange Contracts. A forward contract is a
privately negotiated agreement between two parties in which one party is
obligated to deliver a stated amount of a stated asset at a specified time in
the future and the other party is obligated to pay a specified invoice amount
for the assets at the time of delivery. The Fund currently intends that it will
only use forward contracts or commitments for hedging purposes and will only use
forward foreign currency exchange contracts, although the Fund may enter into
additional forms of forward contracts or commitments in the future if they
become available and advisable in light of the Fund's objectives and investment
policies. Forward contracts generally are negotiated in an interbank market
conducted directly between traders (usually large commercial banks) and their
customers. Unlike futures contracts, which are standardized exchange-traded
contracts, forward contracts can be specifically drawn to meet the needs of the
parties that enter into them. The parties to a forward contract may agree to
offset or terminate the contract before its maturity, or may hold the contract
to maturity and complete the contemplated exchange.

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     The following discussion summarizes the Fund's principal uses of forward
foreign currency exchange contracts ("forward currency contracts"). The Fund may
enter into forward currency contracts with stated contract values of up to the
value of the Fund's assets. A forward currency contract is an obligation to buy
or sell an amount of a specified currency for an agreed price (which may be in
U.S. dollars or a foreign currency) on a specified date. The Fund will exchange
foreign currencies for U.S. dollars and for other foreign currencies in the
normal course of business and may buy and sell currencies through forward
currency contracts in order to fix a price (in terms of a specified currency)
for securities it has agreed to buy or sell ("transaction hedge"). The Fund also
may hedge some or all of its investments denominated in foreign currency against
a decline in the value of that currency (or a proxy currency whose price
movements are expected to have a high degree of correlation with the currency
being hedged) relative to the U.S. dollar by entering into forward currency
contracts to sell an amount of that currency approximating the value of some or
all of its portfolio securities denominated in that currency ("position hedge")
or by participating in futures contracts (or options on such futures) with
respect to the currency. The Fund also may enter into a forward currency
contract with respect to a currency where the Fund is considering the purchase
or sale of investments denominated in that currency but has not yet selected the
specific investments ("anticipatory hedge").

     These types of hedging minimize the effect of currency appreciation as well
as depreciation, but do not eliminate fluctuations in the underlying U.S. dollar
equivalent value of the proceeds of or rates of return on the Fund's foreign
currency denominated portfolio securities. The matching of the increase in value
of a forward contract and the decline in the U.S. dollar equivalent value of the
foreign currency denominated asset that is the subject of the hedge generally
will not be precise. Shifting the Fund's currency exposure from one foreign
currency to another limits the Fund's opportunity to profit from increases in
the value of the original currency and involves a risk of increased losses to
the Fund if its investment manager's projection of future exchange rates is
inaccurate. Unforeseen changes in currency prices may result in poorer overall
performance for the Fund than if it had not entered into such contracts.

     The Fund will cover outstanding forward currency contracts by maintaining
liquid portfolio securities denominated in the currency underlying the forward
contract or the currency being hedged. To the extent that the Fund is not able
to cover its forward currency positions with underlying portfolio securities,
the Fund's custodian will segregate cash or liquid assets having a value equal
to the aggregate amount of the Fund's commitments under forward contracts
entered into. If the value of the securities used to cover a position or the
value of segregated assets declines, the Fund must find alternative cover or
segregate additional cash or liquid assets on a daily basis so that the value of
the covered and segregated assets will be equal to the amount of the Fund's
commitments with respect to such contracts.

     While forward contracts are not currently regulated by the CFTC, the CFTC
may in the future assert authority to regulate forward contracts. In such event,
the Fund's ability to utilize forward contracts may be restricted. The Fund may
not always be able to enter into forward contracts at attractive prices and may
be limited in its ability to use these contracts to hedge Fund assets. In
addition, when the Fund enters into a privately negotiated forward contract with
a counterparty, the Fund assumes counterparty credit risk, that is, the risk
that the counterparty will fail to perform its obligations, in which case the
Fund could be worse off than if the contract had not been entered into. Unlike
many exchange-traded futures contracts and options on futures, there are no
daily price fluctuation limits with respect to forward contracts and other
negotiated or over-the-counter instruments, and with respect to those contracts,
adverse market movements could therefore continue to an unlimited extent over a
period of time. However, the Fund intends to monitor its investments closely and
will attempt to renegotiate or close its positions when the risk of loss to the
Fund becomes unacceptably high.

     Options on Securities and Securities Indices. The Fund may buy or sell put
or call options and write covered call options on securities that are traded on
United States or foreign securities exchanges or over-the-counter. Buying an
option involves the risk that, during the option period, the price of the
underlying security will not increase (in the case of a call) to above the
exercise price, or will not decrease (in the case of a put) to below the
exercise price, in which case the option will expire without being exercised and
the holder would lose the amount of the premium. Writing a call option involves
the risk of an increase in the

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<PAGE>   254


market value of the underlying security, in which case the option could be
exercised and the underlying security would then be sold by the Fund to the
option holder at a lower price than its current market value and the Fund's
potential for capital appreciation on the security would be limited to the
exercise price. Moreover, when the Fund writes a call option on a securities
index, the Fund bears the risk of loss resulting from imperfect correlation
between movements in the price of the index and the price of the securities set
aside to cover such position. Although they entitle the holder to buy equity
securities, call options to purchase equity securities do not entitle the holder
to dividends or voting rights with respect to the underlying securities, nor do
they represent any rights in the assets of the issuer of those securities.

     A call option written by the Fund is "covered" if the Fund owns the
underlying security covered by the call or has an absolute and immediate right
to acquire that security without additional cash consideration (or for
additional cash consideration held in a segregated account by its custodian)
upon conversion or exchange of other securities held in its portfolio. A call
option is also deemed to be covered if the Fund holds a call on the same
security and in the same principal amount as the call written and the exercise
price of the call held (i) is equal to or less than the exercise price of the
call written or (ii) is greater than the exercise price of the call written if
the difference is maintained by the Fund in liquid assets in a segregated
account with its custodian.

     The writer of a call option may have no control when the underlying
securities must be sold. Whether or not an option expires unexercised, the
writer retains the amount of the premium. This amount, of course, may, in the
case of a covered call option, be offset by a decline in the market value of the
underlying security during the option period.

     The writer of an exchange-traded call option that wishes to terminate its
obligation may effect a "closing purchase transaction." This is accomplished by
buying an option of the same series as the option previously written. The effect
of the purchase is that the writer's position will be canceled by the clearing
corporation. If the Fund desires to sell a particular security from the Fund's
portfolio on which the Fund has written a call option, the Fund will effect a
closing transaction prior to or concurrent with the sale of the security.
However, a writer may not effect a closing purchase transaction after being
notified of the exercise of an option. An investor who is the holder of an
exchange-traded option may liquidate its position by effecting a "closing sale
transaction." This is accomplished by selling an option of the same series as
the option previously bought. There is no guarantee that either a closing
purchase or a closing sale transaction can be effected.

     The Fund will realize a profit from a closing transaction if the price of
the purchase transaction is less than the premium received from writing the
option or the price received from a sale transaction is more than the premium
paid to buy the option; the Fund will realize a loss from a closing transaction
if the price of the purchase transaction is more than the premium received from
writing the option or the price received from a sale transaction is less than
the premium paid to buy the option. Because increases in the market price of a
call option will generally reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a call option is
likely to be offset in whole or in part by appreciation of the underlying
security owned by the Fund.

     An option position may be closed out only where there exists a secondary
market for an option of the same series. If a secondary market does not exist,
it might not be possible to effect closing transactions in particular options
with the result that the Fund would have to exercise the options in order to
realize any profit. If the Fund is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or the Fund delivers the underlying security
upon exercise. Reasons for the absence of a liquid secondary market may include
the following: (i) there may be insufficient trading interest in certain
options, (ii) restrictions may be imposed by a national securities exchange on
which the option is traded ("Exchange") on opening or closing transactions or
both, (iii) trading halts, suspensions or other restrictions may be imposed with
respect to particular classes or series of options or underlying securities,
(iv) unusual or unforeseen circumstances may interrupt normal operations on an
Exchange, (v) the facilities of an Exchange or of the Options Clearing
Corporation ("OCC") may not at all times be adequate to handle current trading
volume, or (vi) one or more Exchanges could, for economic or other reasons,
decide or be compelled at some future date to discontinue the trading of options
(or a particular class

                                      -12-

<PAGE>   255


or series of options), in which event the secondary market on that Exchange (or
in that class or series of options) would cease to exist, although outstanding
options on that Exchange that had been issued by the OCC as a result of trades
on that Exchange would continue to be exercisable in accordance with their
terms.

     In addition, when the Fund enters into an over-the-counter option contract
with a counterparty, the Fund assumes counterparty credit risk, that is, the
risk that the counterparty will fail to perform its obligations, in which case
the Fund could be worse off than if the contract had not been entered into.

     An option on a securities index is similar to an option on a security
except that, rather than the right to take or make delivery of a security at a
specified price, an option on a securities index gives the holder the right to
receive, on exercise of the option, an amount of cash if the closing level of
the securities index on which the option is based is greater than, in the case
of a call, or less than, in the case of a put, the exercise price of the option.

     The Fund may buy call options on securities or securities indices to hedge
against an increase in the price of a security or securities that the Fund may
buy in the future. The premium paid for the call option plus any transaction
costs will reduce the benefit, if any, realized by the Fund upon exercise of the
option, and, unless the price of the underlying security or index rises
sufficiently, the option may expire and become worthless to the Fund. The Fund
may buy put options to hedge against a decline in the value of a security or its
portfolio. The premium paid for the put option plus any transaction costs will
reduce the benefit, if any, realized by the Fund upon exercise of the option,
and, unless the price of the underlying security or index declines sufficiently,
the option may expire and become worthless to the Fund.

     An example of a hedging transaction using an index option would be if the
Fund were to purchase a put on a stock index, in order to protect the Fund
against a decline in the value of all securities held by it to the extent that
the stock index moves in a similar pattern to the prices of the securities held.
While the correlation between stock indices and price movements of the stocks in
which the Fund will generally invest may be imperfect, the Fund expects,
nonetheless, that the use of put options that relate to such indices will, in
certain circumstances, protect against declines in values of specific portfolio
securities or the Fund's portfolio generally. Although the purchase of a put
option may partially protect the Fund from a decline in the value of a
particular security or its portfolio generally, the cost of a put will reduce
the potential return on the security or the portfolio.

     TEMPORARY DEFENSIVE MEASURES. The Fund may increase its investment in
government securities, and other short-term, interest-bearing securities without
regard to the Fund's otherwise applicable percentage limits, policies or its
normal investment emphasis, when its advisor believes market conditions warrant
a temporary defensive position. Taking larger positions in such short-term
investments may serve as a means of preserving capital in unfavorable market
conditions. When in a defensive position, the Fund could miss the opportunity to
participate in any stock or bond market advances that occur during those
periods, which the Fund might have been able to participate in if it had
remained more fully invested.

     PORTFOLIO TURNOVER. The portfolio turnover rates of the Fund are shown in
the Financial Highlights table included in the Prospectus. The annual portfolio
turnover rates of the Fund have exceeded 100%. A 100% annual turnover rate
results, for example, if the equivalent of all of the securities in the Fund's
portfolio are replaced in a period of one year. The Fund anticipates that its
portfolio turnover rate may exceed 100%, and investment changes will be made
whenever the investment manager deems them appropriate even if this results in a
higher portfolio turnover rate. In addition, portfolio turnover for the Fund may
increase as a result of large amounts of purchases and redemptions of shares of
the Fund due to economic, market or other factors that are not within the
control of management.

     Higher portfolio turnover will necessarily result in correspondingly higher
brokerage costs for the Fund. The existence of a high portfolio turnover rate
has no direct relationship to the tax liability of the Fund, although sales of
certain stocks will lead to realization of gains, and, possibly, increased
taxable distributions to shareholders. The Fund's brokerage policy is discussed
further below under Section 6--

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<PAGE>   256


Brokerage Policy, and additional information concerning income taxes is located
under Section 9--Income Dividends, Capital Gains Distributions and Tax
Treatment.

2.   INVESTMENT RESTRICTIONS

     The investment objective of the Fund is capital appreciation. The
investment objective of the Fund is considered fundamental, meaning that it
cannot be changed without a shareholders' vote. There can be no assurance that
the Fund's investment objective will be realized.

     The Fund has also adopted certain investment policies, strategies,
guidelines and procedures in pursuing its objective. These may be changed
without a shareholder vote. The principal policies and strategies used by the
Fund are described in the Prospectus.

     In addition, the Fund has adopted certain fundamental and non-fundamental
restrictions on its investments and other activities, which are listed below.
Fundamental restrictions may not be changed without the approval of (i) 67% or
more of the voting securities of the Fund present at a meeting of shareholders
thereof if the holders of more than 50% of the outstanding voting securities are
present or represented by proxy, or (ii) more than 50% of the outstanding voting
securities of the Fund. Non-fundamental restrictions may be changed in the
future by action of the trustees without shareholder vote.

BERGER NEW GENERATION FUND

     The following fundamental restrictions apply to the Berger New Generation
Fund. The Fund may not:

     1. With respect to 75% of the Fund's total assets, purchase the securities
of any one issuer (except U.S. government securities) if immediately after and
as a result of such purchase (a) the value of the holdings of the Fund in the
securities of such issuer exceeds 5% of the value of the Fund's total assets or
(b) the Fund owns more than 10% of the outstanding voting securities of such
issuer.

     2. Invest in any one industry (other than U.S. government securities) 25%
or more of the value of its total assets at the time of such investment.

     3. Borrow money, except from banks for temporary or emergency purposes in
amounts not to exceed 25% of the Fund's total assets (including the amount
borrowed) taken at market value, nor pledge, mortgage or hypothecate its assets,
except to secure permitted indebtedness and then only if such pledging,
mortgaging or hypothecating does not exceed 25% of the Fund's total assets taken
at market value. When borrowings exceed 5% of the Fund's total assets, the Fund
will not purchase portfolio securities.

     4. Act as a securities underwriter (except to the extent the Fund may be
deemed an underwriter under the Securities Act of 1933 in disposing of a
security), issue senior securities (except to the extent permitted under the
Investment Company Act of 1940), invest in real estate (although it may purchase
shares of a real estate investment trust), or invest in commodities or commodity
contracts except financial futures transactions, futures contracts on securities
and securities indices and options on such futures, forward foreign currency
exchange contracts, forward commitments or securities index put or call options.

     5. Make loans, except that the Fund may enter into repurchase agreements
and may lend portfolio securities in accordance with the Fund's investment
policies. The Fund does not, for this purpose, consider the purchase of all or a
portion of an issue of publicly distributed bonds, bank loan participation
agreements, bank certificates of deposit, bankers' acceptances, debentures or
other securities, whether or not the purchase is made upon the original issuance
of the securities, to be the making of a loan.

     In applying the industry concentration investment restriction (no. 2
above), the Fund uses the industry groups used in the Data Monitor Portfolio
Monitoring System of William O'Neil & Co. Incorporated.

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<PAGE>   257


     The trustees have adopted additional non-fundamental investment
restrictions for the Fund. These limitations may be changed by the trustees
without a shareholder vote. The non-fundamental investment restrictions include
the following:

     1. The Fund may not purchase securities on margin from a broker or dealer,
except that the Fund may obtain such short-term credits as may be necessary for
the clearance of transactions, and may not make short sales of securities,
except that the Fund may make short sales if, at the time of the short sale, the
Fund owns or has the right to acquire an equivalent kind and amount of the
security being sold short at no additional cost (i.e., short sales "against the
box"). This limitation shall not prohibit or restrict the Fund from entering
into futures, forwards and options contracts or from making margin payments and
other deposits in connection therewith.

     2. The Fund may not purchase the securities of any other investment
company, except by purchase in the open market involving no commission or profit
to a sponsor or dealer (other than the customary broker's commission).

     3. The Fund may not invest in companies for the purposes of exercising
control of management.

     4. The Fund may not purchase any security, including any repurchase
agreement maturing in more than seven days, which is not readily marketable, if
more than 15% of the net assets of the Fund, taken at market value at the time
of purchase would be invested in such securities.

     5. Only for the purpose of hedging, the Fund may purchase and sell
financial futures, forward foreign currency exchange contracts and put and call
options, but no more than 5% of the Fund's net assets at the time of purchase
may be invested in initial margins for financial futures transactions and
premiums for options. The Fund may only write call options that are covered and
only up to 25% of the Fund's total assets.

     6. The Fund may not purchase or sell securities on a when-issued or delayed
delivery basis, if as a result more than 5% of its total assets taken at market
value at the time of purchase would be invested in such securities.

3.   MANAGEMENT OF THE FUND

     The Fund is supervised by trustees who are responsible for major decisions
about the Fund's policies and overall Fund oversight. The Fund's trustees hire
the companies that run day-to-day Fund operations, such as the investment
advisor, administrator, transfer agent and custodian.

     The trustees and executive officers of the Fund are listed below, together
with information which includes their principal occupations during the past five
years and other principal business affiliations.


     MICHAEL OWEN, c/o Zayed University, Post Office Box 19282, Dubai, United
           Arab Emirates DOB: 1937. Dean, since _______ 2000, of Zayed
           University. Formerly self-employed as a financial and management
           consultant, and in real estate development from June 1999 to _____
           2000. From 1993 to June 1999, Dean, and from 1989 to 1993, a member
           of the Finance faculty, of the College of Business, Montana State
           University. Formerly (1976-1989), Chairman and Chief Executive
           Officer of Royal Gold, Inc. (mining). Chairman of the Board of Berger
           Growth Fund and Berger Large Cap Growth Fund. Chairman of the
           Trustees of Berger Investment Portfolio Trust, Berger Institutional
           Products Trust, Berger Worldwide Funds Trust, Berger Worldwide
           Portfolios Trust and Berger Omni Investment Trust.

*    JACK R. THOMPSON, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1949. President and a director since May 1999 (Executive Vice
           President from February 1999 to May 1999) of Berger 100 Fund and
           Berger Large Cap Growth Fund. President and a trustee since


                                      -15-

<PAGE>   258



           May 1999 (Executive Vice President from February 1999 to May 1999) of
           Berger Investment Portfolio Trust, Berger Institutional Products
           Trust, Berger Worldwide Funds Trust, Berger Worldwide Portfolios
           Trust and Berger Omni Investment Trust. President and Director since
           June 1999 (Executive Vice President from February 1999 to June 1999)
           of Berger LLC Audit Committee Member of the Public Employees'
           Retirement Association of Colorado (pension plan) since November
           1997. Self-employed as a consultant from July 1995 through February
           1999. Director of Wasatch Advisors (investment management) from
           February 1997 to February 1999. Director of Janus Capital Corporation
           (investment management) from June 1984 through June 1995, and
           Executive Vice President of the Corporation from April 1989 through
           June 1995. Treasurer of Janus Capital Corporation from November 1983
           through October 1989. Trustee of the Janus Investment Funds from
           December 1990 through June 1995, and Senior Vice President of the
           Trust from May 1993 through June 1995. President and a director of
           Janus Service Corporation (transfer agent) from January 1987 through
           June 1995. President and a director of Fillmore Agency, Inc.
           (advertising agency), from January 1990 through June 1995. Executive
           Vice President and a director of Janus Capital International, Ltd.
           (investment advisor) from September 1994 through June 1995. President
           and a director of Janus Distributors, Inc. (broker/dealer), from May
           1991 through June 1995. Director of IDEX Management, Inc. (investment
           management), from January 1985 through June 1995. Trustee and Senior
           Vice President of the of the Janus Aspen Funds from May 1993 through
           June 1995.


     DENNIS E. BALDWIN, 3481 South Race Street, Englewood, CO 80110, DOB:
           1928. President, Baldwin Financial Counseling. Formerly (1978-1990),
           Vice President and Denver Office Manager of Merrill Lynch Capital
           Markets. Director of Berger 100 Fund and Berger Large Cap Growth
           Fund. Trustee of Berger Investment Portfolio Trust, Berger
           Institutional Products Trust, Berger Worldwide Funds Trust, Berger
           Worldwide Portfolios Trust and Berger Omni Investment Trust.

     KATHERINE A. CATTANACH, 672 South Gaylord, Denver, CO 80209, DOB: 1945.
           Managing Principal, Sovereign Financial Services, Inc. (investment
           consulting firm). Formerly (1981-1988), Executive Vice President,
           Captiva Corporation, Denver, Colorado (private investment management
           firm). Ph.D. in Finance (Arizona State University); Chartered
           Financial Analyst (CFA). Director of Berger 100 Fund and Berger Large
           Cap Growth Fund. Trustee of Berger Investment Portfolio Trust, Berger
           Institutional Products Trust, Berger Worldwide Funds Trust, Berger
           Worldwide Portfolios Trust and Berger Omni Investment Trust.

      PAUL R. KNAPP, 33 North LaSalle Street, Suite 1900, Chicago, IL 60602,
           DOB: 1945. Since October 2000, Executive Officer of DST Systems, Inc.
           Director (since February 1998) and a Vice President (February 1998 -
           November 1998) of West Side Investments, Inc. (investments), a
           wholly-owned subsidiary of DST Systems, Inc. Formerly, President,
           Chief Executive Officer and a director (September 1997 - October
           2000) of DST Catalyst, Inc. (international financial markets
           consulting, software and computer services company, an 81% owned
           subsidiary of DST Systems, Inc.) Previously (1991 - October 2000),
           Chairman, President, Chief Executive Officer and a director of
           Catalyst Institute (international public policy research organization
           focused primarily on financial markets and institutions); also (1991
           - September 1997), Chairman, President, Chief Executive Officer and a
           director of Catalyst Consulting (international financial institutions
           business consulting firm). Prior thereto (1988-1991), President,
           Chief Executive Officer and a director of Kessler Asher Group
           (brokerage, clearing and trading firm). Director of Berger Growth
           Fund and Berger Large Cap Growth Fund. Trustee of Berger Investment
           Portfolio Trust, Berger Institutional Products Trust, Berger
           Worldwide Funds Trust, Berger Worldwide Portfolios Trust and Berger
           Omni Investment Trust.


                                      -16-

<PAGE>   259



           Portfolio Trust, Berger Institutional Products Trust, Berger
           Worldwide Funds Trust, Berger Worldwide Portfolios Trust and Berger
           Omni Investment Trust.

     HARRY T. LEWIS, JR., 1600 Broadway, Suite 2400, Denver, CO 80202, DOB:
           1933. Self-employed as a private investor. Formerly (1981-1988),
           Senior Vice President, Rocky Mountain Region, of Dain Bosworth
           Incorporated and member of that firm's Management Committee. Director
           of J.D. Edwards & Co. (computer software company) since 1995.
           Director of Berger 100 Fund and Berger Large Cap Growth Fund. Trustee
           of Berger Investment Portfolio Trust, Berger Institutional Products
           Trust, Berger Worldwide Funds Trust, Berger Worldwide Portfolios
           Trust and Berger Omni Investment Trust.

     WILLIAM SINCLAIRE, 3049 S. Perry Park Road, Sedalia, CO 80135, DOB: 1928.
           President, Santa Clara LLC (privately owned agriculture company).
           Director of Berger 100 Fund and Berger Large Cap Growth Fund. Trustee
           of Berger Investment Portfolio Trust, Berger Institutional Products
           Trust, Berger Worldwide Funds Trust, Berger Worldwide Portfolios
           Trust and Berger Omni Investment Trust.

*    JAY W. TRACEY, CFA, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1954. Executive Vice President of the Berger Funds (since
           August, 2000). Executive Vice President and Chief Investment Officer
           of Berger LLC (since June 2000). Interim co-portfolio manager since
           June 2000 of the Berger Small Company Growth Fund and the Berger Mid
           Cap Growth Fund (since June 2000); portfolio manager of the Berger
           Growth Fund (since August 2000); co-portfolio manager since June 2000
           of the Berger Select Fund (since June 2000). Formerly, Vice President
           and Portfolio Manager at OppenheimerFunds, Inc (September 1994 to May
           2000) and Managing Director of Buckingham Capital Management
           (February 1994 to September 1994) .


*    MARK S. SUNDERHUSE, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1961. Vice President (since February 1999) and portfolio manager
           (since January 1999) of the Berger New Generation Fund. Vice
           President and co-portfolio manager since May 1999 of the Berger
           Select Fund. Interim co-portfolio manager since January 2000 of the
           Berger Balanced Fund. Senior Vice President (since January 1998) and
           portfolio manager (since January 1999) with Berger LLC. Formerly,
           Senior Vice President and Assistant Portfolio Manager with Crestone
           Capital Management, Inc. (from January 1991 through January 1998);
           Investment Officer with United Bank of Denver (from April 1989
           through January 1991); and officer and registered representative with
           Boettcher & Company, Inc. (investment banking) (from May 1985 through
           April 1989).


*    JANICE M. TEAGUE, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1954. Vice President (since November 1998) and Assistant
           Secretary (since February 2000 and previously from September 1996 to
           November 1998) and Secretary (November 1998 through January 2000) of
           the Berger Funds. Vice President (since October 1997), Secretary
           (since November 1998) and Assistant Secretary (September 1996 through
           November 1998) with Berger LLC. Vice President and Secretary with
           Berger Distributors LLC, since August 1998. Formerly, self-employed
           as a business consultant from June 1995 through September 1996,
           Secretary of the Janus Funds from January 1990 to May 1995 and
           Assistant Secretary of Janus Capital Corporation from October 1989 to
           May 1995.


*    DAVID J. SCHULTZ, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1950. Vice President and Treasurer (since November 1998) and
           Assistant Treasurer (September 1996 to November 1998) of the Berger
           Funds. Vice President (since February 1997) and Controller (since
           August 1994) with Berger LLC. Chief Financial Officer and Treasurer
           (since May 1996), Assistant Secretary (since August 1998) and
           Secretary (May 1996 to August 1998) with Berger Distributors LLC
           Formerly, Partner with Smith, Brock & Gwinn (accounting firm) from
           January 1984 to August 1994.


*    ANTHONY R. BOSCH, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1965. Vice President of the Berger Funds (since February 2000).
           Vice President (since June 1999) with


                                      -17-

<PAGE>   260



           Berger LLC. Formerly, Assistant Vice President of Federated
           Investors, Inc. from December 1996 through May 1999, and Attorney
           with the U.S. Securities and Exchange Commission (from June 1990
           through December 1996).


*    BRIAN S. FERRIE, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1958. Vice President of the Berger Funds since November 1998.
           Vice President (since February 1997) and Chief Compliance Officer
           (since August 1994) with Berger LLC. Chief Compliance Officer with
           Berger Distributors LLC, since May 1996. Formerly, Compliance Officer
           with United Services Advisor, Inc., from January 1988 to July 1994,
           and Director of Internal Audit of United Services Funds from January
           1987 to July 1994.

*    JOHN PAGANELLI, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1967. Assistant Treasurer of the Berger Funds since November
           1998. Vice President (since November 1998) and Manager of Accounting
           (January 1997 through November 1998) with Berger LLC. Formerly,
           Manager of Accounting (December 1994 through October 1996) and Senior
           Accountant (November 1991 through December 1994) with Palmeri Fund
           Administrators, Inc.


*    SUE VREELAND, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1948. Secretary of the Berger Funds (since February 2000).
           Assistant Secretary of Berger LLC and Berger Distributors LLC since
           June 1999. Formerly, Assistant Secretary of the Janus Funds from
           March 1994 to May 1999, Assistant Secretary of Janus Distributors,
           Inc. from June 1995 to May 1997 and Manager of Fund Administration
           for Janus Capital Corporation from February 1992 to May 1999.


----------

* Interested person (as defined in the Investment Company Act of 1940) of the
Fund and/or of the Fund's advisor.

     The trustees of the Fund have adopted a trustee retirement age of 75 years.

                                      -18-

<PAGE>   261


TRUSTEE COMPENSATION


     The officers of the Fund received no compensation from the Fund during the
fiscal year ended September 30, 2000. However, trustees of the Fund who are not
"interested persons" of the Fund or its advisor are compensated for their
services according to a fee schedule, allocated among the Berger Funds. Neither
the officers of the Fund nor the trustees receive any form of pension or
retirement benefit compensation from the Fund.

     The following table sets forth information regarding compensation paid or
accrued during the fiscal year ended September 30, 2000, for each trustee of the
Fund:



<TABLE>
<CAPTION>
NAME AND POSITION
WITH BERGER FUNDS                                                AGGREGATE COMPENSATION FROM
-----------------                             ------------------------------------------------------------
                                              BERGER NEW GENERATION FUND               ALL BERGER FUNDS(1)
                                              --------------------------               -------------------
<S>                                                    <C>                                  <C>
Dennis E. Baldwin(2)                                   $_______                             $_______

Louis Bindner(5)                                       $_______                             $_______

Katherine A. Cattanach(2)                              $_______                             $_______

Paul R. Knapp(2)                                       $_______                             $_______

Harry T. Lewis(2)                                      $_______                             $_______

Michael Owen(2)                                        $_______                             $_______

William Sinclaire(2)                                   $_______                             $_______

Jack R. Thompson(2),(3),(4)                            $_______                             $_______
</TABLE>


NOTES TO TABLE


(1) Includes the Berger Growth Fund, the Berger Large Cap Growth Fund, the
Berger Investment Portfolio Trust (including the Berger Small Company Growth
Fund, the Berger New Generation Fund, the Berger Balanced Fund, the Berger Mid
Cap Value Fund, the Berger Select Fund, the Berger Information Technology Fund
and the Berger Mid Cap Growth Fund), the Berger Institutional Products Trust
(four series), the Berger Worldwide Funds Trust (three series, including the
Berger International Fund), the Berger Worldwide Portfolios Trust (one series)
and the Berger Omni Investment Trust (including the Berger Small Cap Value
Fund). Aggregate compensation figures do not include first-year estimates for
any Fund in existence for less than one year. Of the aggregate amounts shown for
each trustee, the following amounts were deferred under applicable deferred
compensation plans: Dennis E. Baldwin $_______; Katherine A. Cattanach $_______;
Michael Owen $______; William Sinclaire $_______.


                                      -19-

<PAGE>   262



(2) Director of Berger Growth Fund and Berger Large Cap Growth Fund and trustee
of Berger Investment Portfolio Trust, Berger Institutional Products Trust,
Berger Worldwide Portfolios Trust, Berger Worldwide Funds Trust and Berger Omni
Investment Trust.


(3) Interested person of Berger LLC.


(4) President of Berger Growth Fund, Berger Large Cap Growth Fund, Berger
Investment Portfolio Trust, Berger Institutional Products Trust, Berger
Worldwide Portfolios Trust, Berger Worldwide Funds Trust and Berger Omni
Investment Trust.

(5) Resigned as Director and Trustee effective November 17, 2000.


     Trustees may elect to defer receipt of all or a portion of their fees
pursuant to a fee deferral plan adopted by the Fund. Under the plan, deferred
fees are credited to an account and adjusted thereafter to reflect the
investment experience of whichever of the Berger Funds (or approved money market
funds) is designated by the trustee for this purpose. Pursuant to an SEC
exemptive order, the Fund is permitted to purchase shares of the designated
funds in order to offset its obligation to the trustees participating in the
plan. Purchases made pursuant to the plan are excepted from any otherwise
applicable investment restriction limiting the purchase of securities of any
other investment company. The Fund's obligation to make payments of deferred
fees under the plan is a general obligation of the Fund.


     As of December 29, 2000, the officers and trustees of the Fund as a group
owned of record or beneficially an aggregate of less than 1% of the outstanding
shares of the Fund.


4.   INVESTMENT ADVISOR

BERGER LLC - INVESTMENT ADVISOR

     Berger LLC, 210 University Boulevard, Suite 900, Denver, CO 80206, is the
investment advisor to the Fund. Berger LLC is responsible for managing the
investment operations of the Fund and the composition of its investment
portfolio. Berger LLC also acts as the Fund's administrator and is responsible
for such functions as monitoring compliance with all applicable federal and
state laws.


     Berger LLC is a Nevada Limited Liability Company, and has been in the
investment advisory business for 26 years. It serves as investment advisor or
sub-advisor to mutual funds and institutional investors and had assets under
management of approximately $6.1 billion as of December 31, 2000. Berger LLC is
a subsidiary of Stilwell Management Inc. ("Stilwell"), which owns more than 80%
of Berger LLC, and is an indirect subsidiary of Stilwell Financial Inc.
("Stilwell Financial"). Stilwell also owns approximately 32% of the outstanding
shares of DST Systems, Inc. ("DST"), a publicly traded information and
transaction processing company which acts as the Funds' transfer agent. DST, in
turn, owns 100% of DST Securities, a registered broker-dealer, which executes
portfolio trades for the Funds.

     Stilwell Financial was previously a wholly-owned subsidiary of Kansas City
Southern Industries, Inc. ("KCSI"). On July 12, 2000, KCSI completed a
separation of its transportation and financial services segments through a
dividend of stock of Stilwell Financial. On that date, KCSI shareholders
received two shares of Stilwell Financial for every KCSI share held as of June
28, 2000. The separation resulted in no change in the management or control of
the Funds or the Advisor to the Funds.


INVESTMENT ADVISORY AGREEMENT

     Under the Investment Advisory Agreement between the Fund and its advisor,
the advisor is generally responsible for furnishing continuous advice and making
investment decisions as to the acquisition, holding or disposition of securities
or other assets which the Fund may own or contemplate acquiring from time to
time. The Investment Advisory Agreement provides that the investment advisor
shall

                                      -20-

<PAGE>   263


not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission taken with respect to
the Fund, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its obligations
and duties thereunder and except to the extent otherwise provided by law.


     Under the Agreement in effect through September 30, 2000, the advisor was
compensated for its services by the payment of a fee at the following annual
rate, calculated as a percentage of the average daily net assets of the Fund:



<TABLE>
<CAPTION>
          FUND                                     ADVISOR                  INVESTMENT ADVISORY FEE
          ----                                     -------                  -----------------------

<S>                                               <C>                                <C>
Berger New Generation Fund                        Berger LLC                         ___%
</TABLE>


                                      -21-

<PAGE>   264


     Investment advisory fees are charged to the Fund according to the following
schedule:



<TABLE>
<CAPTION>
          FUND                      ADVISOR            INVESTMENT ADVISORY FEE
          ----                      -------            -----------------------

<S>                                <C>                <C>
Berger New Generation Fund         Berger LLC         0.85% of the first $500
                                                      million 0.80% of the next
                                                      $500 million 0.75% in
                                                      excess of $1 billion
</TABLE>



     The Fund's Investment Advisory Agreement will continue in effect until the
last day of April 2001, and thereafter from year to year if such continuation is
specifically approved at least annually by the trustees or by vote of a majority
of the outstanding shares of the Fund and in either case by vote of a majority
of the trustees who are not "interested persons" (as that term is defined in the
1940 Act) of the Fund or the advisor. The Agreement is subject to termination by
the Fund or the advisor on 60 days' written notice, and terminates automatically
in the event of its assignment.


TRADE ALLOCATIONS

     While investment decisions for the Fund are made independently by the
advisor, the same investment decision may be made for the Fund and one or more
accounts advised by the advisor. In this circumstance, should purchase and sell
orders of the same class of security be in effect on the same day, the orders
for such transactions may be combined by the advisor in order to seek the best
combination of net price and execution for each. Client orders partially filled
will, as a general matter, be allocated pro rata in proportion to each client's
original order, although exceptions may be made to avoid, among other things,
odd lots and de minimus allocations. Execution prices for a combined order will
be averaged so that each participating client receives the average price paid or
received. While in some cases, this policy might adversely affect the price paid
or received by the Fund or other participating accounts, or the size of the
position obtained or liquidated, the advisor will aggregate orders if it
believes that coordination of orders and the ability to participate in volume
transactions will result in the best overall combination of net price and
execution.

RESTRICTIONS ON PERSONAL TRADING


     Berger LLC, the Berger Funds and Berger Distributors LLC each permits its
directors, officers and employees to purchase and sell securities for their own
accounts in accordance with a policy regarding personal investing in each of the
Codes of Ethics for Berger LLC, the Berger Funds and Berger Distributors LLC.
The policy requires all covered persons to conduct their personal securities
transactions in a manner which does not operate adversely to the interests of
the Funds or Berger LLC's other advisory clients. Directors and officers of
Berger LLC and Berger Distributors LLC, investment personnel and other
designated persons deemed to have access to current trading information ("access
persons") are required to pre-clear all transactions in securities not otherwise
exempt under the policy. Requests for authority to trade will be denied
pre-clearance when, among other reasons, the proposed personal transaction would
be contrary to the provisions of the policy or would be deemed to adversely
affect any transaction then known to be under consideration for or currently
being effected on behalf of any client account, including the Funds.

     In addition to the pre-clearance requirements described above for Berger
LLC and Berger Distributors LLC, the policy subjects directors and officers of
Berger LLC, the Berger Funds and Berger Distributors LLC, investment personnel
and other access persons to various trading restrictions and reporting
obligations. All reportable transactions are reviewed for compliance with the
policy. The policy is administered


                                      -22-

<PAGE>   265


by Berger LLC and the provisions of the policy are subject to interpretation by
and exceptions authorized by its board of directors.

5.   EXPENSES OF THE FUND


     In addition to paying an investment advisory fee to its advisor, the Fund
pays all of its expenses not assumed by its advisor, including, but not limited
to, custodian and transfer agent fees, legal and accounting expenses,
administrative and record keeping expenses, interest charges, federal and state
taxes, expenses of shareholders' meetings, compensation of trustees who are not
interested persons of Berger LLC, expenses of printing and distributing reports
to shareholders and federal and state administrative agencies, and all expenses
incurred in connection with the execution of its portfolio transactions,
including brokerage commissions on purchases and sales of portfolio securities,
which are considered a cost of securities of the Fund. The Fund also pays all
expenses incurred in complying with all federal and state laws and the laws of
any foreign country applicable to the issue, offer or sale of shares of the
Fund, including, but not limited to, all costs involved in preparing and
printing prospectuses for shareholders of the Fund.

     Under a separate Administrative Services Agreement with respect to the
Fund, Berger LLC performs certain administrative and recordkeeping services not
otherwise performed by the Fund's custodian and recordkeeper, including the
preparation of financial statements and reports to be filed with the Securities
and Exchange Commission and state regulatory authorities. For the fiscal year
ended September 30, 2000, Berger LLC did not charge an administrative fee to the
Fund. The administrative services fees may be changed by the directors or
trustees without shareholder approval.


     The following table shows the total dollar amounts of advisory fees and
administrative services fees paid by the Fund to Berger LLC for the periods
indicated and the amount of such fees waived on account of excess expenses under
applicable expense limitations.

                           Berger New Generation Fund


<TABLE>
<CAPTION>
Fiscal Year Ended        Investment             Administrative           Advisory Fee
September 30,            Advisory Fee*          Service Fee**            Waiver                 TOTAL
-----------------        -------------          --------------           ------------           -----

<S>                      <C>                    <C>                    <C>                    <C>
2000                     $_________             $______                $_____________         $_________

1999                     $1,714,000             $19,000                $            0         $1,733,000

1998                     $1,229,000             $14,000                $            0         $1,243,000
</TABLE>


* Effective October 1, 1999, the investment advisory fee charged to the Fund was
reduced from .90% to the following rates of average daily net assets: 0.85% of
the first $500 million; 0.80% of the next $500 million and 0.75% in excess of $1
billion.

** Effective October 1, 1999, the 0.01% administrative services fee was
eliminated.


     The Fund has appointed State Street Bank and Trust Company ("State
Street"), 801 Pennsylvania, Kansas City, MO 64105, as its recordkeeping and
pricing agent. In addition, State Street also serves as the Funds' custodian.
Each of the Funds has appointed DST Systems, Inc. ("DST"), P.O. Box 219958,
Kansas City, MO 64121, as its transfer agent and dividend disbursing agent.
Approximately 32% of the outstanding shares of DST are owned by Stilwell.


                                      -23-

<PAGE>   266



     As recordkeeping and pricing agent, State Street calculates the daily net
asset value of the Fund and performs certain accounting and recordkeeping
functions required by the Fund. The Fund pays State Street a monthly base fee
plus an asset-based fee. State Street is also reimbursed for certain
out-of-pocket expenses.

     State Street, as custodian, and its subcustodians have custody and provide
for the safekeeping of the Fund's securities and cash, and receive and remit the
income thereon as directed by the management of the Fund. The custodian and
subcustodians do not perform any managerial or policy-making functions for the
Fund. For its services as custodian, State Street receives an asset-based fee
plus certain transaction fees and out-of-pocket expenses.

     As transfer agent and dividend disbursing agent, DST maintains all
shareholder accounts of record; assists in mailing all reports, proxies and
other information to the Fund's shareholders; calculates the amount of, and
delivers to the Fund's shareholders, proceeds representing all dividends and
distributions; and performs other related services. For these services, DST
receives a fee from the Fund at an annual rate of $14.00 per open Fund
shareholder account, subject to preset volume discounts, plus certain
transaction fees and fees for closed accounts, and is reimbursed for
out-of-pocket expenses.

     All of State Street's and DST's fees are subject to reduction pursuant to
an agreed formula for certain earnings credits on the cash balances of the Fund.
Earnings credits received by the Fund can be found on the Fund's Statement of
Operations in the Annual Report incorporated by reference into this Statement of
Additional Information


OTHER EXPENSE INFORMATION

     The trustees of the Fund have authorized portfolio transactions to be
placed on an agency basis through DST Securities, Inc. ("DSTS"), a wholly-owned
broker-dealer subsidiary of DST. When transactions are effected through DSTS,
the commission received by DSTS is credited against, and thereby reduces,
certain operating expenses that the Fund would otherwise be obligated to pay. No
portion of the commission is retained by DSTS. See Section 6--Brokerage Policy
for further information concerning the expenses reduced as a result of these
arrangements. DSTS may be considered an affiliate of Berger LLC due to the
ownership interest of Stilwell in both DST and Berger LLC.

     The Fund and/or its advisor have entered into arrangements with certain
brokerage firms and other companies (such as recordkeepers and administrators)
to provide administrative services (such as sub-transfer agency, recordkeeping,
shareholder communications, sub-accounting and/or other services) to investors
purchasing shares of the Fund through those firms or companies. The Fund's
advisor or the Fund (if approved by its trustees) may pay fees to these
companies for their services. These companies may also be appointed as agents
for or authorized by the Fund to accept on its behalf purchase and redemption
requests that are received in good order. Subject to Fund approval, certain of
these companies may be authorized to designate other entities to accept purchase
and redemption orders on behalf of the Fund.

     The Fund's advisor may also enter into arrangements with organizations that
solicit clients for the advisor, which may include clients who purchase shares
of the Fund. While the specific terms of each arrangement may differ, generally,
the fee paid by the advisor under such arrangements is based on the value of the
referred client's assets managed by the advisor. None of the fees paid to such
organizations will be borne by the Fund.

DISTRIBUTOR

     The distributor (principal underwriter) of the Fund's shares is Berger
Distributors LLC (the "Distributor"), 210 University Boulevard, Suite 900,
Denver, CO 80206. The Distributor may be reimbursed by Berger LLC for its costs
in distributing the Fund's Institutional Shares.

                                      -24-

<PAGE>   267


6.   BROKERAGE POLICY

     Although the Fund retains full control over its own investment policies,
under the terms of its Investment Advisory Agreement, Berger LLC as the Fund's
advisor is directed to place the portfolio transactions of the Fund. A report on
the placement of brokerage business is given to the trustees of the Fund every
quarter, indicating the brokers with whom Fund portfolio business was placed and
the basis for such placement. The brokerage commissions paid by the Fund during
the past three fiscal years were as follows:

                              BROKERAGE COMMISSIONS


<TABLE>
<CAPTION>
                                     FOR THE YEAR/PERIOD ENDED SEPTEMBER 30,
                                   -------------------------------------------
                                   2000               1999                1998
                                   ----               ----                ----

<S>                               <C>               <C>                 <C>
BERGER NEW GENERATION FUND        $_____            $349,000            $340,000
</TABLE>


     The Investment Advisory Agreement authorizes and directs the advisor to
place portfolio transactions for the Fund only with brokers and dealers who
render satisfactory service in the execution of orders at the most favorable
prices and at reasonable commission rates. However, the Agreement specifically
authorizes the advisor to place such transactions with a broker with whom it has
negotiated a commission that is in excess of the commission another broker or
dealer would have charged for effecting that transaction if the advisor
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker viewed in terms of either that particular transaction or the overall
responsibilities of the advisor. Accordingly, the advisor does not have an
obligation to seek the lowest available commission.

     In accordance with this provision of the Agreement, portfolio brokerage
business of the Fund may be placed with brokers who provide useful brokerage and
research services to the advisor. The Fund's advisor may consider the value of
research provided as a factor in the choice of brokers. "Research" includes
computerized on-line stock quotation systems and related data feeds from stock
exchanges, computerized trade order entry, execution and confirmation systems,
fundamental and technical analysis data and software, computerized stock market
and business news services, economic research, account performance data and
computer hardware used for the receipt of electronic research services and
broker and other third-party equity research, such as publications or writings
which furnish advice as to the value of securities and advisability of
investing, and analyses and reports concerning issuers, industries, securities,
market trends, and portfolio strategies. Research may be provided orally, in
print, or electronically. These include a service used by the independent
trustees of the Fund in reviewing the Investment Advisory Agreement.

     In some cases, a product or services termed "research" may serve other
functions unrelated to the making of investment decisions. When a product has
such a mixed use, the advisor will make a good faith allocation of the cost of
the product according to the use made of it. The portion of the product that
assists the advisor in the investment decision-making process may be paid for
with the Fund's commission dollars. The advisor pays for the portion of the
product that is not "research" with its own funds. Accordingly, the decision
whether and how to allocate the costs of such a product presents a conflict of
interest for Berger LLC.

     Berger LLC does not enter into formal agreements with any brokers regarding
the placement of securities transactions because of any such brokerage or
research services that they provide. Berger LLC may, however, make arrangements
with and maintain internal procedures for allocating transactions to brokers who
provide such services to encourage them to provide services expected to be
useful to Berger

                                      -25-

<PAGE>   268


LLC's clients, including the Fund. Brokers may suggest a level of business they
would like to receive in return for the brokerage and research they provide.
Berger LLC then determines whether to continue receiving the research and
brokerage provided and the approximate amount of commissions it is willing to
pay to continue the brokerage and research arrangement with each broker. The
actual amount of commissions a broker may receive may be more or less than a
broker's suggested allocations, depending on Berger LLC's level of business,
market conditions and other relevant factors. Even under these arrangements,
however, the placement of all Fund transactions, must be consistent with the
Fund's brokerage placement and execution policies, and must be directed to a
broker who renders satisfactory service in the execution of orders at the most
favorable prices and at reasonable commission rates.


     During the fiscal year ended September 30, 2000, of the brokerage
commissions paid by the Fund, the following amounts were paid to brokers who
provided to the Fund selected brokerage or research services prepared by the
broker or subscribed or paid for by the broker on behalf of the Fund:



<TABLE>
<CAPTION>
FUND                               AMOUNT OF TRANSACTIONS        AMOUNT OF COMMISSIONS
----                               ----------------------        ---------------------

<S>                                     <C>                            <C>
Berger New Generation Fund              $________                      $________
</TABLE>


     These brokerage and research services received from brokers are often
helpful to Berger LLC in performing its investment advisory responsibilities to
the Fund, and the availability of such services from brokers does not reduce the
responsibility of Berger LLC's advisory personnel to analyze and evaluate the
securities in which the Fund invests. The brokerage and research services
obtained as a result of the Fund's brokerage business also will be useful to
Berger LLC in making investment decisions for its other advisory accounts, and,
conversely, information obtained by reason of placement of brokerage business of
such other accounts may be used by Berger LLC in rendering investment advice to
the Fund. Although such brokerage and research services may be deemed to be of
value to Berger LLC, they are not expected to decrease the expenses that Berger
LLC would otherwise incur in performing its investment advisory services for the
Fund nor will the advisory fees that are received by Berger LLC from the Fund be
reduced as a result of the availability of such brokerage and research services
from brokers.

     The trustees of the Fund have authorized portfolio transactions to be
placed on an agency basis through DSTS, a wholly-owned broker-dealer subsidiary
of DST. When transactions are effected through DSTS, the commission received by
DSTS is credited against, and thereby reduces, certain operating expenses that
the Fund would otherwise be obligated to pay. No portion of the commission is
retained by DSTS. DSTS may be considered an affiliate of Berger LLC due to the
ownership interest of Stilwell in both DST and Berger LLC.

     Included in the brokerage commissions paid by the Fund during the last
three fiscal years, as stated in the preceding Brokerage Commissions table, are
the following amounts paid to DSTS, which served to reduce the Fund's
out-of-pocket expenses as follows:

                                      -26-

<PAGE>   269


                 DSTS COMMISSIONS AND RELATED EXPENSE REDUCTIONS


<TABLE>
<CAPTION>
                                              Reduction
                                  DSTS           in            DSTS        Reduction        DSTS        Reduction
                              Commissions     Expenses     Commissions    in Expenses    Commissions   in Expenses
                                  Paid           FYE           Paid           FYE           Paid           FYE
                              FYE 9/30/00    9/30/00(1)    FYE 9/30/99     9/30/99(1)    FYE 9/30/98    9/30/98(1)
                              -----------    ----------    -----------     ----------    -----------    ----------

<S>                            <C>             <C>          <C>              <C>            <C>            <C>
Berger New Generation Fund     $_____          $_____       $6,000(2)        $4,500         $2,000         $1,500
</TABLE>


(1) No portion of the commission is retained by DSTS. Difference between
commissions paid through DSTS and reduction in expenses constitute commissions
paid to an unaffiliated clearing broker.

(2) Constitutes 2% of the aggregate brokerage commissions paid by the Berger New
Generation Fund and less than 1% of the aggregate dollar amount of transactions
placed by the Berger New Generation Fund.

     The Fund's advisor places securities orders with a limited number of major
institutional brokerage firms chosen for the reliability and quality of
execution; commission rates; quality of research coverage of major U.S.
companies, the U.S. economy and the securities markets; promptness; back office
capabilities; capital strength and financial stability; prior performance in
serving the advisor and its clients; and knowledge of other buyers and sellers.
The advisor selects the broker for each order based on the factors above, as
well as the size, difficulty and other characteristics of the order. The
trustees of the Fund have also authorized sales of shares of the Fund by a
broker-dealer and the recommendations of a broker-dealer to its customers that
they purchase Fund shares to be considered as factors in the selection of
broker-dealers to execute portfolio transactions for the Fund. In addition, the
advisor may also consider payments made by brokers to the Fund or to other
persons on behalf of the Fund for services provided to the Fund for which it
would otherwise be obligated to pay, such as transfer agency fees. In placing
portfolio business with any such broker or dealer, the advisor of the Fund will
seek the best execution of each transaction.

7.   HOW TO PURCHASE AND REDEEM SHARES IN THE FUND

     Minimum Initial Investment                                        $250,000

     Institutional Shares in the Fund may be purchased at the relevant net asset
value without a sales charge. The minimum initial investment for Institutional
Shares of the Fund is $250,000.

     To purchase shares in the Fund, simply complete the application form
enclosed with the Prospectus. Then mail it with a check payable to "Berger
Funds" to the following address:

     Berger Funds
     P.O. Box 219958
     Kansas City, MO 64121

     Payment for shares purchased may be made by wire, electronic funds transfer
or mail. All purchase orders are effected at the relevant net asset value per
share of the Fund next determined after receipt of the purchase order, completed
application and payment. A purchase order, together with payment in proper form,
received by the Fund, its authorized agent or designee prior to the close of the
New York Stock Exchange (the "Exchange") on a day the Fund is open for business
will be effected at that day's net asset value. An order received after that
time will be effected at the net asset value determined on the next business
day.


     Additional investments may be made at any time by mail, telephone
(1-800-960-8427) at the relevant net asset value by calling or writing the Fund
and making payment by wire or electronic funds transfer as outlined above.


     In addition, Fund shares may be purchased through certain broker-dealers
that have established mutual fund programs and certain other organizations
connected with pension and retirement plans. These broker-dealers and other
organizations may charge investors a transaction or other fee for their
services, may require different minimum initial and subsequent investments than
the Fund and may impose other charges or restrictions different from those
applicable to shareholders who invest in the Fund directly. Fees charged by
these organizations will have the effect of reducing a shareholder's total
return on an investment in Fund shares. No such charge will apply to an investor
who purchases Fund shares directly from the Fund as described above.

                                      -27-

<PAGE>   270



     Procedures for purchasing, selling (redeeming) and exchanging Fund shares
by telephone are described in the Prospectus. The Fund may terminate or modify
those procedures and related requirements at any time, although shareholders of
the Fund will be given notice of any termination or material modification.
Berger LLC may, at its own risk, waive certain of those procedures and related
requirements.


8.   HOW THE NET ASSET VALUE IS DETERMINED


     The net asset value of the Fund is determined once daily, at the close of
the regular trading session of the New York Stock Exchange (the "Exchange")
(normally 4:00 p.m., Eastern time, Monday through Friday) each day that the
Exchange is open. The Exchange is closed and the net asset value of the Fund is
not determined on weekends and on New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day each year.


     The per share net asset value of the Institutional Shares is determined by
dividing the Institutional Shares' pro rata portion of the total value of the
Fund's securities and other assets, less the Institutional Shares' pro rata
portion of the Fund's liabilities and the liabilities attributable to the
Institutional Shares, by the total number of Institutional Shares outstanding.
Since net asset value for the Fund is calculated by class, and since the
Institutional Shares and each other class of the Fund has its own expenses, the
per share net asset value of the Fund will vary by class.

     In determining net asset value, securities listed or traded primarily on
national exchanges, The Nasdaq Stock Market and foreign exchanges are valued at
the last sale price on such markets, or, if such a price is lacking for the
trading period immediately preceding the time of determination, such securities
are valued at the mean of their current bid and asked prices. Securities that
are traded in the over-the-counter market are valued at the mean between their
current bid and asked prices. The market value of individual securities held by
the Fund will be determined by using prices provided by pricing services which
provide market prices to other mutual funds or, as needed, by obtaining market
quotations from independent broker/dealers. Short-term money market securities
maturing within 60 days are valued on the amortized cost basis, which
approximates market value. All assets and liabilities initially expressed in
terms of non-U.S. dollar currencies are translated into U.S. dollars at the
prevailing market rates as quoted by one or more banks or dealers shortly before
the close of the Exchange. Securities and assets for which quotations are not
readily available or are not representative of market value may be valued at
their fair value determined in good faith pursuant to consistently applied
procedures established by the trustees. Examples would be when events occur that
materially affect the value of a security at a time when the security is not
trading or when the securities are illiquid.

     Generally, trading in foreign securities markets is substantially completed
each day at various times prior to the close of the Exchange. The values of
foreign securities used in computing the net asset value of the shares of the
Fund are determined as of the earlier of such market close or the closing time
of the Exchange. Occasionally, events affecting the value of such securities may
occur between the times at which they are determined and the close of the
Exchange, or when the foreign market on which such securities trade is closed
but the Exchange is open, which will not be reflected in the computation of net
asset value. If during such periods, events occur which materially affect the
value of such securities, the securities may be valued at their fair value as
determined in good faith pursuant to consistently applied procedures established
by the trustees.

     The Fund's securities may be listed primarily on foreign exchanges or
over-the-counter dealer markets which may trade on days when the Exchange is
closed (such as a customary U.S. holiday) and on which the Fund's net asset
value is not calculated. As a result, the net asset value of the Fund may be
significantly affected by such trading on days when shareholders cannot purchase
or redeem shares of the Fund.

                                      -28-

<PAGE>   271


9.   INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX TREATMENT

     This discussion summarizes certain U.S. federal income tax issues relating
to the Fund. As a summary, it is not an exhaustive discussion of all possible
tax ramifications. Accordingly, shareholders are urged to consult with their tax
advisors with respect to their particular tax consequences.

     TAX STATUS OF THE FUND. If the Fund meets certain investment and
distribution requirements, it will be treated as a "regulated investment
company" (a "RIC") under the Internal Revenue Code and will not be subject to
federal income tax on earnings that it distributes in a timely manner to
shareholders. It also may be subject to an excise tax on undistributed income if
it does not meet certain timing requirements for distributions. The Fund intends
to qualify as a RIC annually and to make timely distributions in order to avoid
income and excise tax liabilities.

     TAX ON FUND DISTRIBUTIONS. With certain exceptions provided by law, the
Fund will report annually to the Internal Revenue Service and to each
shareholder information about the tax treatment of the shareholder's
distributions. Dividends paid by the Fund, whether received in cash or
reinvested in additional Fund shares, will be treated as ordinary income to the
shareholders. Distributions of net capital gain, whether received in cash or
reinvested in Fund shares, will be taxable to the shareholders, but the rate of
tax will vary depending upon the Fund's holding periods in the assets whose sale
resulted in the capital gain. Dividends and distributions that are declared in
October, November or December but not distributed until the following January
will be considered to be received by the shareholders on December 31.

     In general, net capital gains from assets held by the Fund for more than 12
months will be subject to a maximum tax rate of 20% and net capital gains from
assets held for 12 months or less will be taxed as ordinary income.
Distributions will be subject to these capital gains rates, regardless of how
long a shareholder has held Fund shares. Assets contributed to the Fund in an
in-kind purchase of Fund shares may generate more gain upon their sale than if
the assets had been purchased by the Fund with cash contributed to the Fund in a
cash purchase of Fund shares.

     If the Fund's distributions for a taxable year exceeds its tax earnings and
profits available for distribution, all or a portion of its distributions may be
treated as a return of capital. To the extent a distribution is treated as a
return of capital, a shareholder's basis in his or her Fund shares will be
reduced by that amount.


     If a shareholder has elected to receive dividends and/or capital gain
distributions in cash and the U.S. Postal Service is unable to deliver checks to
the shareholder's address of record, or if a shareholder's checks remain
uncashed for six months, the Fund reserves the right to reinvest the amount
distributed in shares of the applicable Fund at the NAV next computed after the
check is cancelled, and to convert the shareholder's distribution option from
receiving cash to having all dividend and other distributions reinvested in
additional shares. In addition, no interest will accrue on amounts represented
by uncashed distribution or redemption checks.

     Additionally, the Funds reserve the right to reinvest distributions of less
than $10 in shares of the applicable Fund at the NAV next computed.


     TAX ON REDEMPTIONS OF FUND SHARES. Shareholders may be subject to tax on
the redemption of their Fund shares. In general, such redemptions may give rise
to a capital gain or loss, the treatment of which will depend on the
shareholder's holding period in the Fund shares. Tax laws may prevent the
deduction of a loss on the sale of Fund shares if the shareholder reinvests in
the Fund shortly before or after the sale giving rise to the loss. Any loss on
the redemption or other sale or exchange of Fund shares held for six months or
less will be treated as a long-term capital loss to the extent of any long-term
capital gain distribution received on the shares.

     INCOME FROM FOREIGN SOURCES. Dividends and interest received by the Fund on
foreign securities may give rise to withholding and other taxes imposed by
foreign countries, although these taxes may be reduced by applicable tax
treaties. Foreign taxes will generally be treated as expenses of the Fund,
unless the Fund has more than 50% of its assets invested in foreign corporate
securities at the end of the Fund's taxable year. In that case, if the Fund
makes an election, shareholders of the Fund may be able to

                                      -29-

<PAGE>   272


deduct (as an itemized deduction) or claim a foreign tax credit for their share
of foreign taxes, subject to limitations prescribed in the tax law.

     If the Fund invests in a foreign corporation that is a passive foreign
investment company (a "PFIC"), special rules apply that may affect the tax
treatment of gains from the sale of the stock and may cause the Fund to incur
IRS tax and interest charges. However, the Fund may be eligible to elect one of
two alternative tax treatments with respect to PFIC shares which would avoid
these taxes and charges, but also may affect, among other things, the amount and
character of gain or loss and the timing of the recognition of income with
respect to PFIC shares. Accordingly, the amounts, character and timing of income
distributed to shareholders of the Fund holding PFIC shares may differ
substantially as compared to a fund that did not invest in PFIC shares.

     INCOME FROM CERTAIN TRANSACTIONS. Some or all of the Fund's investments may
include transactions that are subject to special tax rules. Transactions
involving foreign currencies may give rise to gain or loss that could affect the
Fund's ability to make ordinary dividend distributions. Investment in certain
financial instruments, such as options, futures contracts and forward contracts,
may require annual recognition of unrealized gains and losses. Transactions that
are treated as "straddles" may affect the character and/or timing of other gains
and losses of the Fund. If the Fund enters into a transaction (such as a "short
sale against the box") that reduces the risk of loss on an appreciated financial
position that it already holds, the entry into the transaction may constitute a
constructive sale and require immediate recognition of gain.

     BACKUP WITHHOLDING. In general, if a shareholder is subject to backup
withholding, the Fund will be required to withhold federal income tax at a rate
of 31% from distributions to that shareholder. These payments are creditable
against the shareholder's federal income tax liability.

     FOREIGN SHAREHOLDERS. Foreign shareholders of the Fund generally will be
subject to a 30% U.S. withholding tax on dividends paid by the Fund from
ordinary income and short-term capital gain, although the rate may be reduced by
a tax treaty. If a foreign shareholder dies while owning Fund shares, those
shares may be subject to U.S. estate taxes.

10.  SUSPENSION OF REDEMPTION RIGHTS

     The right of redemption may be suspended for any period during which the
New York Stock Exchange is closed or the Securities and Exchange Commission
determines that trading on the Exchange is restricted, or when there is an
emergency as determined by the Securities and Exchange Commission as a result of
which it is not reasonably practicable for the Fund to dispose of securities
owned by it or to determine the value of its net assets, or for such other
period as the Securities and Exchange Commission may by order permit for the
protection of shareholders of the Fund.

     The Fund intends to redeem its shares only for cash, although it retains
the right to redeem its shares in-kind under unusual circumstances, in order to
protect the interests of the remaining shareholders, by the delivery of
securities selected from its assets at its discretion. The Fund is, however,
governed by Rule 18f-1 under the Investment Company Act of 1940 pursuant to
which the Fund is obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the net assets of the Fund during any 90-day period for any
one shareholder. For purposes of this threshold, each underlying account holder
whose shares are held of record in certain omnibus accounts is treated as one
shareholder. Should redemptions by any shareholder during any 90-day period
exceed such limitation, the Fund will have the option of redeeming the excess in
cash or in-kind. If shares are redeemed in-kind, the redeeming shareholder
generally will incur brokerage costs in converting the assets to cash. The
redeeming shareholder may have difficulty selling the securities and recovering
the amount of the redemption if the securities are illiquid. The method of
valuing securities used to make redemption in-kind will be the same as the
method of valuing portfolio securities described under Section 8.

                                      -30-

<PAGE>   273


11.  TAX-SHELTERED RETIREMENT PLANS

     The Fund offers several tax-qualified retirement plans for individuals,
businesses and nonprofit organizations. For information about establishing an
IRA, Roth IRA, profit-sharing or money purchase pension plan, 403(b) Custodial
Account, SEP-IRA, SIMPLE IRA account or other retirement plans, please call
1-800-259-2820 or write to the Berger Funds c/o Berger LLC, P.O. Box 5005,
Denver, CO 80217. Trustees for existing 401(k) or other plans interested in
using Fund shares as an investment or investment alternative in their plans are
invited to call the Fund at 1-800-259-2820.

     The Fund also offers an Automatic Investment Plan (minimum $50 per month)
and a Systematic Withdrawal Plan (minimum of $50 withdrawn monthly, quarterly,
semiannually or annually). Forms for these plans may be obtained by writing to
the Fund, c/o DST Systems, Inc., P.O. Box 219958, Kansas City, MO 64121, or call
1-800-960-8427.

12.  EXCHANGE PRIVILEGE


     Any shareholder may exchange any or all of the shareholder's shares in the
Fund, subject to stated minimums, for shares of any of the other available
Berger Funds, without charge, after receiving a current prospectus of the other
fund. Exchanges into or out of the Fund are made at the net asset value per
share next determined after the exchange request is received. Each exchange
represents the sale of shares from one fund and the purchase of shares in
another, which may produce a gain or loss for federal income tax purposes. An
exchange of shares may be made by written request directed to DST Systems, Inc.
or by telephoning the Fund at 1-800-960-8427. This privilege may be terminated
or amended by the Fund, and is not available in any state in which the shares of
the Berger Fund being acquired in the exchange are not eligible for sale.
Shareholders automatically have telephone transaction privileges to authorize
exchanges unless they specifically decline this service in the account
application or in writing.


13.  PERFORMANCE INFORMATION

     From time to time in advertisements, the Fund may discuss its performance
ratings as published by recognized mutual fund statistical services, such as
Lipper Analytical Services, Inc., CDA Investment Technologies, Inc.,
Morningstar, Inc., or Value Line Investment Survey or by publications of general
interest such as The Wall Street Journal, Investor's Business Daily, Money,
Barron's, Financial World or Kiplinger's Personal Finance Magazine. In addition,
the Fund may compare its performance to that of recognized broad-based
securities market indices, including the Wilshire 5000 Index, the Standard &
Poor's 500 Stock Index, the Dow Jones Industrial Average, the Russell 1000 Value
Index, the Russell 2000 Stock Index, the Standard & Poor's 400 Mid-Cap Index,
the Standard & Poor's 600 Small Cap Index, Morgan Stanley Capital International
EAFE (Europe, Australasia, Far East) Index, the Dow Jones World Index, the
Standard & Poor's/BARRA Value Index, the Nasdaq Composite Index, the Lehman
Brothers Intermediate Term Government/Corporate Bond Index or the
InformationWeek 100 Index, or more narrowly-based or blended indices which
reflect the market sectors in which the Fund invests.

     The total return of the Fund is calculated for any specified period of time
by assuming the purchase of shares of the Fund at the net asset value at the
beginning of the period. Each dividend or other distribution paid by the Fund is
assumed to have been reinvested at the net asset value on the reinvestment date.
The total number of shares then owned as a result of this process is valued at
the net asset value at the end of the period. The percentage increase is
determined by subtracting the initial value of the investment from the ending
value and dividing the remainder by the initial value.

     The Fund's total return reflects the Fund's performance over a stated
period of time. An average annual total return reflects the hypothetical
annually compounded return that would have produced the same total return if the
Fund's performance had been constant over the entire period. Total return
figures are based on the overall change in value of a hypothetical investment in
the Fund. Because average annual total returns for more than one year tend to
smooth out variations in the Fund's return, investors should recognize that such
figures are not the same as actual year-by-year results.

                                      -31-

<PAGE>   274


     All performance figures for the Fund are based upon historical results and
do not assure future performance. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.

     Quotations of average annual total return for the Fund will be expressed in
terms of the average annual compounded rate of return of a hypothetical
investment in the Fund over periods of 1, 3, 5 and 10 years, or for the life of
the Fund, if shorter. These are the rates of return that would equate the
initial amount invested to the ending redeemable value. These rates of return
are calculated pursuant to the following formula: P(1 + T)n = ERV (where P = a
hypothetical initial payment of $1,000, T = the average annual total return, n =
the number of years and ERV = the ending redeemable value of a hypothetical
$1,000 payment made at the beginning of the period). All total return figures
reflect the deduction of a proportional share of Fund expenses on an annual
basis, and assume that all dividends and distributions are reinvested when paid.

PREDECESSOR PERFORMANCE QUOTATIONS

     Shares of the Fund had no class designations until July 6, 1999, when all
of the then-existing shares were designated as Investor Shares and the
Institutional Shares class of the Fund covered in this Statement of Additional
Information was established. The Fund commenced offering Institutional Shares on
August 16, 1999. Performance data for the Institutional Shares include periods
prior to the inception of the Institutional Shares class on August 16, 1999, and
therefore reflect a 0.25% per year 12b-1 fee applicable to the Investor Shares
that is not paid by the Institutional Shares. Total return of the Institutional
Shares and other classes of shares of the Fund will be calculated separately.
Because each class of shares is subject to different expenses, the performance
of each class for the same period will differ.

AVERAGE ANNUAL TOTAL RETURNS


     The average annual total return for the Fund for various periods ending
September 30, 2000, are shown on the following table:



<TABLE>
<CAPTION>
FUND                              1-YEAR          3-YEAR     5-YEAR        10-YEAR         LIFE OF FUND
----                              ------          ------     ------        -------         ------------

<S>                               <C>             <C>          <C>           <C>          <C>
Berger New Generation Fund -      _____%          _____%       N/A           N/A          _____%
Institutional Shares(1)                                                                   (since 3/29/96)
</TABLE>


1. Performance data for periods prior to the Fund's adoption of class
designations on August 16, 1999, reflect a 0.25% 12b-1 fee not paid by the
Institutional Shares.

14.  ADDITIONAL INFORMATION

FUND ORGANIZATION

     The Fund is a separate series of the Berger Investment Portfolio Trust (the
"Trust"), a Delaware business trust established under the Delaware Business
Trust Act. The Fund was established on December 21, 1995. The name "Berger New
Generation Fund(R)" was registered as a service mark in December 1996. The
Berger New Generation Fund had no class designations until July 6, 1999, when
all of the then-existing shares were designated as Investor Shares, which are
covered in a separate Prospectus and Statement of Additional Information, and
the Fund commenced offering the class known as Institutional Shares covered in
this Statement of Additional Information.

                                      -32-

<PAGE>   275


     The Trust is authorized to issue an unlimited number of shares of
beneficial interest in series or portfolios. Currently, the Fund is one of seven
series established under the Trust, although others may be added in the future.
The Trust is also authorized to establish multiple classes of shares
representing differing interests in an existing or new series. The Fund
currently has two classes of shares, although others may be added in the future.

     Shares of the Fund are fully paid and nonassessable when issued. Each share
has a par value of $.01. All shares issued by the Fund participate equally in
dividends and other distributions by the Fund, and in the residual assets of the
Fund in the event of its liquidation.

     DELAWARE BUSINESS TRUST INFORMATION. Under Delaware law, shareholders of
the Fund will enjoy the same limitations on personal liability as extended to
stockholders of a Delaware corporation. Further, the Trust Instrument of the
Trust provides that no shareholder shall be personally liable for the debts,
liabilities, obligations and expenses incurred by, contracted for or otherwise
existing with respect to, the Trust or any particular series (fund) of the
Trust. However, the principles of law governing the limitations of liability of
beneficiaries of a business trust have not been authoritatively established as
to business trusts organized under the laws of one jurisdiction but operating or
owning property in other jurisdictions. In states that have adopted legislation
containing provisions comparable to the Delaware Business Trust Act, it is
believed that the limitation of liability of beneficial owners provided by
Delaware law should be respected. In those jurisdictions that have not adopted
similar legislative provisions, it is possible that a court might hold that the
shareholders of the Trust are not entitled to the limitations of liability set
forth in Delaware law or the Trust Instrument and, accordingly, that they may be
personally liable for the obligations of the Trust.

     In order to protect shareholders from such potential liability, the Trust
Instrument requires that every written obligation of the Trust or any series
thereof contain a statement to the effect that such obligation may only be
enforced against the assets of the Trust or such series. The Trust Instrument
also provides for indemnification from the assets of the relevant series for all
losses and expenses incurred by any shareholder by reason of being or having
been a shareholder, and that the Trust shall, upon request, assume the defense
of any such claim made against such shareholder for any act or obligation of the
relevant series and satisfy any judgment thereon from the assets of that series.

     As a result, the risk of a shareholder of the Fund incurring financial loss
on account of shareholder liability is limited to circumstances in which the
Fund itself would be unable to meet its obligations. The Trust believes that the
risk of personal liability to shareholders of the Fund is therefore remote. The
trustees intend to conduct the operations of the Trust and the Fund so as to
avoid, to the extent possible, liability of shareholders for liabilities of the
Trust or the Fund.

     CORPORATE GOVERNANCE AND OTHER INFORMATION PERTAINING TO THE FUND. The Fund
is not required to hold annual shareholder meetings unless required by the
Investment Company Act of 1940 or other applicable law or unless called by the
trustees. If shareholders owning at least 10% of the outstanding shares of the
Trust so request, a special shareholders' meeting of the Trust will be held for
the purpose of considering the removal of a trustee. Special meetings will be
held for other purposes if the holders of at least 25% of the outstanding shares
of the Trust so request. Subject to certain limitations, the Trust will
facilitate appropriate communications by shareholders desiring to call a special
meeting for the purpose of considering the removal of a trustee.

     Shareholders of the Fund and, where applicable, the other series/classes of
the Trust, generally vote separately on matters relating to those respective
series/classes, although they vote together and with the holders of any other
series/classes of the Trust in the election of trustees of the Trust and on all
matters relating to the Trust as a whole. Each full share of the Fund has one
vote.

     Shares of the Fund have non-cumulative voting rights, which means that the
holders of more than 50% of the shares voting for the election of trustees can
elect 100% of the trustees if they choose to do so and, in such event, the
holders of the remaining less than 50% of the shares voting for the election of
trustees will not be able to elect any person or persons as trustees.

     Shares of the Fund have no preemptive rights. There are no sinking funds or
arrearage provisions which may affect the rights of the Fund shares. Fund shares
have no subscription rights or

                                      -33-

<PAGE>   276


conversion rights, except that shareholders of any class of the Fund may convert
their shares into shares of any other class of the Fund in the event and only in
the event the shareholder ceases to be eligible to purchase or hold shares of
the original class, or becomes eligible to purchase shares of a different class,
by reason of a change in the shareholder's status under the conditions of
eligibility in effect for such class at that time. Shares of the Fund may be
transferred by endorsement, or other customary methods, but the Fund is not
bound to recognize any transfer until it is recorded on its books.

     Under governing corporate law, the Fund may enter into a variety of
corporate transactions, such as reorganizations, conversions, mergers and asset
transfers, or may be liquidated. Any such transaction would be subject to a
determination from the trustees that the transaction was in the best interests
of the Fund and its shareholders, and may require obtaining shareholder
approval.

MORE INFORMATION ON SPECIAL MULTI-CLASS FUND STRUCTURE

     The Fund currently has divided its shares into two classes of shares, the
Institutional Shares covered by this SAI and the Investor Shares offered through
a separate Prospectus and SAI. The Fund implemented its multi-class structure by
adopting a Rule 18f-3 Plan under the 1940 Act permitting it to issue its shares
in classes. The Fund's Rule 18f-3 Plan governs such matters as class features,
dividends, voting, allocation of income and expenses between classes, exchange
and trustee monitoring of the Plan. Each class is subject to such investment
minimums and other conditions of eligibility as are set forth in the relevant
prospectus for the class, as it may be amended from time to time. Investor
Shares are available to the general public and bear a 0.25% 12b-1 fee.
Information concerning Investor Shares is available from the Fund at
1-800-333-1001.

     Subject to the Trust's Trust Instrument and any other applicable
provisions, the trustees of the Trust have the authority to create additional
classes, or change existing classes, from time to time, in accordance with Rule
18f-3 under the Act.

PRINCIPAL SHAREHOLDERS


     Insofar as the management of the Fund is aware, as of December 29, 2000, no
person owned, beneficially or of record, more than 5% of the outstanding shares
of the Fund, except for the following:


                                      -34-

<PAGE>   277



<TABLE>
<CAPTION>
OWNER                                    FUND                                                   PERCENTAGE
-----                                    ----                                                   ----------

<S>                                      <C>                                                    <C>
Charles Schwab & Co. Inc. ("Schwab")     Berger New Generation Fund                             _____%
101 Montgomery Street
San Francisco, CA 94104

John D. Swift                            Berger New Generation Fund                             _____%
1085 Chestnut Hill Cir. SW
Marietta, GA  30064-4607
</TABLE>



     In addition, as of that date, Schwab owned of record ____%, of all
outstanding shares of the Berger Investment Portfolio Trust, of which the Fund
is one outstanding series. Also as of that date, Schwab owned of record _____%
of the Investor Shares class of the Fund, which together with its Institutional
Shares constitutes _____% of the Fund's total outstanding shares.

     Any person owning more than 25% of the outstanding securities of the Fund
may be deemed to control it. Schwab is believed to hold its shares of the Fund
as nominee for the benefit of its clients or customers.


DISTRIBUTION


     Berger Distributors LLC, as the Fund's Distributor, is the principal
underwriter of the Fund's shares. The Distributor is a wholly-owned subsidiary
of Berger LLC. The Distributor is a registered broker-dealer under the
Securities Exchange Act of 1934 and is a member of the National Association of
Securities Dealers, Inc. The Distributor acts as the agent of the Fund in
connection with the sale of the Fund's shares in all states in which the shares
are eligible for sale and in which the Distributor is qualified as a
broker-dealer. David J. Schultz, Chief Financial Officer, Assistant Secretary
and Treasurer of the Distributor, is also Vice President and Treasurer of the
Fund. Janice M. Teague, Vice President and Secretary of the Distributor, is also
Vice President and Assistant Secretary of the Fund. Brian Ferrie, Vice President
and Chief Compliance Officer of the Distributor, is also Vice President of the
Fund. Sue Vreeland, Assistant Secretary of the Distributor, is also Secretary of
the Fund.


     The Fund and the Distributor are parties to a Distribution Agreement that
continues through April 2000, and thereafter from year to year if such
continuation is specifically approved at least annually by the trustees or by
vote of a majority of the outstanding shares of the Fund and in either case by
vote of a majority of the trustees who are not "interested persons" (as that
term is defined in the Investment Company Act of 1940) of the Fund or the
Distributor. The Distribution Agreement is subject to termination by the Fund or
the Distributor on 60 days' prior written notice, and terminates automatically
in the event of its assignment. Under the Distribution Agreement, the
Distributor continuously offers shares of the Fund and solicits orders to
purchase Fund shares at net asset value. The Distributor is not compensated for
its services under the Distribution Agreement, but may be reimbursed by Berger
LLC for its costs in distributing Fund shares.

                                      -35-

<PAGE>   278


OTHER INFORMATION

     The Trust has filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement under the Securities Act of 1933, as
amended, with respect to the securities of the Fund of which this Statement of
Additional Information is a part. If further information is desired with respect
to the Fund or such securities, reference is made to the Registration Statement
and the exhibits filed as a part thereof.


     Davis, Graham & Stubbs LLP, 1550 Seventeenth Street, Suite 500, Denver,
Colorado, acts as counsel to the Fund.


INDEPENDENT ACCOUNTANTS


     [TO BE UPDATED]


FINANCIAL INFORMATION


     [TO BE UPDATED]


     The above-referenced Annual Report is enclosed with a copy of this SAI.
Additional copies of that Report may be obtained upon request without charge by
calling the Fund at 1-800-259-2820.

                                      -36-

<PAGE>   279


                                   APPENDIX A

HIGH-YIELD/HIGH-RISK SECURITIES

     The Fund may invest in convertible securities of any quality, including
unrated securities or securities rated below investment grade (Ba or lower by
Moody's, BB or lower by S&P) (sometimes referred to as "junk bonds"). However,
the Fund will not purchase any security in default at the time of purchase. The
Fund will not invest more than 20% of the market value of its assets at the time
of purchase in convertible securities rated below investment grade.

     Securities rated below investment grade are subject to greater risk that
adverse changes in the financial condition of their issuers or in general
economic conditions, or an unanticipated rise in interest rates, may impair the
ability of their issuers to make payments of interest and principal or
dividends. The market prices of lower grade securities are generally less
sensitive to interest rate changes than higher-rated investments, but more
sensitive to economic changes or individual corporate developments. Periods of
economic uncertainty and change can be expected to result in volatility of
prices of these securities. Lower rated securities also may have less liquid
markets than higher rated securities, and their liquidity as well as their value
may be adversely affected by poor economic conditions. Adverse publicity and
investor perceptions as well as new or proposed laws may also have a negative
impact on the market for high-yield/high-risk bonds. In the event of an
unanticipated default, the Fund will experience a reduction in its income and
could expect a decline in the market value of the securities affected. The
prices of these securities may be more volatile and the markets for them may be
less liquid than those for higher-rated securities.

     Unrated securities, while not necessarily of lower quality than rated
securities, may not have as broad a market. Unrated securities will be included
in the Fund's percentage limits for investments rated below investment grade,
unless the Fund's advisor deems such securities to be the equivalent of
investment grade. If securities purchased by the Fund are downgraded following
purchase, or if other circumstances cause the Fund to exceed its percentage
limits on assets invested in securities rated below investment grade, the
trustees of the Fund, in consultation with the Fund's advisor, will determine
what action, if any, is appropriate in light of all relevant circumstances.

     Relying in part on ratings assigned by credit agencies in making
investments will not protect the Fund from the risk that the securities will
decline in value, since credit ratings represent evaluations of the safety of
principal, dividend and/or interest payments, and not the market values of such
securities. Moreover, such ratings may not be changed on a timely basis to
reflect subsequent events.

     Although the market for high-yield debt securities has been in existence
for many years and from time to time has experienced economic downturns, this
market has involved a significant increase in the use of high-yield debt
securities to fund highly leverage corporate acquisitions and restructurings.
Past experience may not, therefore, provide an accurate indication of future
performance of the high-yield debt securities market, particularly during
periods of economic recession.

     Expenses incurred in recovering an investment in a defaulted security may
adversely affect the Fund's net asset value. Moreover, the reduced liquidity of
the secondary market for such securities may adversely affect the market price
of, and the ability of the Fund to value, particular securities at certain
times, thereby making it difficult to make specific valuation determinations.

CORPORATE BOND RATINGS

     The ratings of fixed-income securities by Moody's and Standard & Poor's are
a generally accepted measurement of credit risk. However, they are subject to
certain limitations. Ratings are generally based upon historical events and do
not necessarily reflect the future. In addition, there is a period of time
between the issuance of a rating and the update of the rating, during which time
a published rating may be inaccurate.

                                      -37-

<PAGE>   280


KEY TO MOODY'S CORPORATE RATINGS

     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 generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.

     A-Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.

     Baa-Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

     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 good and bad times over the future. Uncertainty of position characterizes
bonds of this class.

     B-Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

     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 Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic category.

KEY TO STANDARD & POOR'S CORPORATE RATINGS

     AAA-Debt rated AAA has the highest rating assigned by Standard & Poor's.
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 the higher rated issues only in small degree.

                                      -38-

<PAGE>   281


     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
debt in this category than 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 will likely have some quality and protective characteristics, these
are out-weighed by the large uncertainties or major risk exposures to adverse
conditions.

     C1-The rating C1 is reserved for income bonds on which no interest is being
paid.

     D-Debt rated D is in default, and payment of interest and/or repayment of
principal is in arrears.

     PLUS (+) OR MINUS (-)-The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

                                      -39-
<PAGE>   282
                        BERGER SMALL COMPANY GROWTH FUND
                 (A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST)

                              INSTITUTIONAL SHARES



                       STATEMENT OF ADDITIONAL INFORMATION
                      SHAREHOLDER SERVICES: 1-800-960-8427




                  This Statement of Additional Information ("SAI") is not a
prospectus. It relates to the Prospectus for the Berger Small Company Growth
Fund (the "Fund") -- Institutional Shares, dated January 29, 2001, as it may be
amended or supplemented from time to time, which may be obtained by writing the
Fund at P.O. Box 5005, Denver, Colorado 80217, or calling 1-800-259-2820.


                  This SAI is about the class of shares of the Fund designated
as Institutional Shares. Institutional Shares are designed for pension and
profit-sharing plans, employee benefit trusts, endowments, foundations and
corporations, as well as high net worth individuals, who are willing to maintain
a minimum account balance of $250,000. Shares of the Fund may be offered through
certain financial intermediaries that may charge their customers transaction or
other fees with respect to the customers' investment in the Fund.

                  The following financial statements of the Fund are
incorporated herein by reference:


                                 [TO BE UPDATED]


                  Copies of that Annual report are available, without charge,
upon request, by calling 1-800-259-2820.






                             DATED JANUARY 29, 2001



<PAGE>   283


                                TABLE OF CONTENTS
                                        &
                         CROSS-REFERENCES TO PROSPECTUS


<TABLE>
<CAPTION>
                                                                       CROSS-REFERENCES TO
                                                             PAGE      RELATED DISCLOSURES
TABLE OF CONTENTS                                            NO.       IN PROSPECTUS
-----------------                                            ----      -------------------
<S>                                                          <C>       <C>
Introduction                                                    1      Contents

1. Investment Strategies and Risks of the Fund                  1      Berger Small Company Growth Fund; The Fund's Goal and
                                                                       Principal Investment Strategies; Principal Risks;
                                                                       Investment Techniques, Securities and Associated Risks

2. Investment Restrictions                                     14      Berger Small Company Growth Fund;
                                                                       Investment Techniques, Securities and Associated Risks

3. Management of the Fund                                      16      Berger Small Company Growth Fund;
                                                                       Organization of the Fund

4. Investment Advisor                                          20      Berger Small Company Growth Fund;
                                                                       Organization of the Fund

5. Expenses of the Fund                                        22      Berger Small Company Growth Fund; Financial Highlights
                                                                       for the Fund; Organization of the Fund

6. Brokerage Policy                                            24      Berger Small Company Growth Fund;
                                                                       Organization of the Fund

7. How to Purchase and Redeem Shares in the Fund               27      Buying Shares; Selling (Redeeming) Exchanging Shares

8. How the Net Asset Value is Determined                       28      Your Share Price

9. Income Dividends, Capital Gains Distributions and Tax       28      Distributions and Taxes
   Treatment

10. Suspension of Redemption Rights                            30      Other Information About Your Account

11. Tax-Sheltered Retirement Plans                             30      Tax-Sheltered Retirement Plans

12. Exchange Privilege                                         31      Exchanging Shares

13. Performance Information                                    31      Berger Small Company Growth Fund;  Financial Highlights
                                                                       for the Fund;

14. Additional Information                                     32      Organization of the Fund; Special Fund Structure

Financial Information                                          36       Financial Highlights for the Fund
</TABLE>



                                      -i-
<PAGE>   284



                                  INTRODUCTION

                  The Fund described in this SAI is a mutual fund, or open-end,
management investment company. The Fund is a diversified fund.

1.                INVESTMENT STRATEGIES AND RISKS OF THE FUND

                  The Prospectus describes the investment objective of the Fund
and the principal investment policies and strategies used to achieve that
objective. It also describes the principal risks of investing in the Fund.

                  This section contains supplemental information concerning the
types of securities and other instruments in which the Fund may invest, the
investment policies and portfolio strategies that the Fund may utilize and
certain risks attendant to those investments, policies and strategies.

                  COMMON AND PREFERRED STOCKS. Stocks represent shares of
ownership in a company. Generally, preferred stock has a specified dividend and
ranks after bonds and before common stocks in its claim on income for dividend
payments and on assets should the company be liquidated. After other claims are
satisfied, common stockholders participate in company profits on a pro-rata
basis. Profits may be paid out in dividends or reinvested in the company to help
it grow. Increases and decreases in earnings are usually reflected in a
company's stock price, so common stocks generally have the greatest appreciation
and depreciation potential of all corporate securities. While most preferred
stocks pay dividends, the Fund may purchase preferred stock where the issuer has
omitted, or is in danger of omitting, payment of its dividends. Such investments
would be made primarily for their capital appreciation potential. All
investments in stocks are subject to market risk, meaning that their prices may
move up and down with the general stock market, and that such movements might
reduce their value.

                  DEBT SECURITIES. Debt securities (such as bonds or debentures)
are fixed-income securities which bear interest and are issued by corporations
or governments. The issuer has a contractual obligation to pay interest at a
stated rate on specific dates and to repay principal on a specific maturity
date. In addition to market risk, debt securities are generally subject to two
other kinds of risk: credit risk and interest rate risk. Credit risk refers to
the ability of the issuer to meet interest or principal payments as they come
due. The lower the rating given a security by a rating service (such as Moody's
Investor Service ("Moody's") and Standard & Poor's ("S&P")), the greater the
credit risk the rating service perceives with respect to that security. The Fund
will not purchase any nonconvertible securities rated below investment grade (Ba
or lower by Moody's, BB or lower by S&P). In cases where the ratings assigned by
more than one rating agency differ, the Fund will consider the security as rated
in the higher category. If nonconvertible securities purchased by the Fund are
downgraded to below investment grade following purchase, the trustees of the
Fund, in consultation with the Fund's advisor, will determine what action, if
any, is appropriate in light of all relevant circumstances. For a further
discussion of debt security ratings, see Appendix A to this SAI.

                  Interest rate risk refers to the fact that the value of
fixed-income securities (like debt securities) generally fluctuates in response
to changes in interest rates. A decrease in interest rates will generally result
in an increase in the price of fixed-income securities held by the Fund.
Conversely, during periods of rising interest rates, the value of fixed-income
securities held by the Fund will generally decline. Longer-term securities are
generally more sensitive to interest rate changes and are more volatile than
shorter-term securities, but they generally offer higher yields to compensate
investors for the associated risks.

                  Certain debt securities can also present prepayment risk. For
example, a security may contain redemption and call provisions. If an issuer
exercises these provisions when interest rates are declining, the Fund could
sustain investment losses as well as have to reinvest the proceeds from the
security at lower interest rates, resulting in a decreased return for the Fund.

                  CONVERTIBLE SECURITIES. The Fund may also purchase debt or
equity securities which are convertible into common stock when the Fund's
advisor believes they offer the potential for a higher total return than
nonconvertible securities. While fixed-income securities generally have a
priority claim


                                      -1-
<PAGE>   285


on a corporation's assets over that of common stock, some of the convertible
securities which the Fund may hold are high-yield/high-risk securities that are
subject to special risks, including the risk of default in interest or principal
payments which could result in a loss of income to the Fund or a decline in the
market value of the securities. Convertible securities often display a degree of
market price volatility that is comparable to common stocks. The credit risk
associated with convertible securities generally is reflected by their ratings
by organizations such as Moody's or S&P or a similar determination of
creditworthiness by the Fund's advisor. The Fund has no pre-established minimum
quality standards for convertible securities and may invest in convertible
securities of any quality, including lower rated or unrated securities. However,
the Fund will not invest in any security in default at the time of purchase, and
the Fund will invest less than 20% of the market value of its assets at the time
of purchase in convertible securities rated below investment grade. If
convertible securities purchased by the Fund are downgraded following purchase,
or if other circumstances cause 20% or more of the Fund's assets to be invested
in convertible securities rated below investment grade, the trustees of the
Fund, in consultation with the Fund's advisor, will determine what action, if
any, is appropriate in light of all relevant circumstances. For a further
discussion of debt security ratings, see Appendix A to this SAI.

                  SPECIAL SITUATIONS. The Fund may also invest in "special
situations." Special situations are companies that have recently experienced or
are anticipated to experience a significant change in structure, management,
products or services which may significantly affect the value of their
securities. Examples of special situations are companies being reorganized or
merged, companies emerging from bankruptcy, companies introducing unusual new
products or which enjoy particular tax advantages. Other examples are companies
experiencing changes in senior management, extraordinary corporate events,
significant changes in cost or capital structure or which are believed to be
probable takeover candidates. The opportunity to invest in special situations,
however, is limited and depends in part on the market's assessment of these
companies and their circumstances. By its nature, a "special situation" company
involves to some degree a break with the company's past experience. This creates
greater uncertainty and potential risk of loss than if the company were
operating according to long-established patterns. In addition, stocks of
companies in special situations may decline or not appreciate as expected if an
anticipated change or development does not occur or is not assessed by the
market as favorably as expected.





                  SECURITIES OF SMALLER COMPANIES. The Fund may invest in
securities of companies with small or mid-sized market capitalizations. Market
capitalization is defined as total current market value of a company's
outstanding common stock. Investments in companies with smaller market
capitalizations may involve greater risks and price volatility (that is, more
abrupt or erratic price movements) than investments in larger, more mature
companies since smaller companies may be at an earlier stage of development and
may have limited product lines, reduced market liquidity for their shares,
limited financial resources or less depth in management than larger or more
established companies. Smaller companies also may be less significant factors
within their industries and may have difficulty withstanding competition from
larger companies. While smaller companies may be subject to these additional
risks, they may also realize more substantial growth than larger or more
established companies.

                  SECURITIES OF COMPANIES WITH LIMITED OPERATING HISTORIES. The
Fund may invest in securities of companies with limited operating histories. The
Fund considers these to be securities of companies with a record of less than
three years' continuous operation, even including the operations of any
predecessors and parents. (These are sometimes referred to as "unseasoned
issuers.") These companies by their nature have only a limited operating history
which can be used for evaluating the company's growth prospects. As a result,
investment decisions for these securities may place a greater emphasis on
current or planned product lines and the reputation and experience of the
company's management and less emphasis on fundamental valuation factors than
would be the case for more mature companies. In addition, many of these
companies may also be small companies and involve the risks and price volatility
associated with smaller companies.

                  INITIAL PUBLIC OFFERINGS. The Fund may invest in a company's
securities at the time the company first offers securities to the public, that
is, at the time of the company's initial public offering or IPO. Although
companies can be any age or size at the time of their IPOs, they are often
smaller and


                                      -2-
<PAGE>   286


have a limited operating history, which involve a greater potential for the
value of their securities to be impaired following the IPO. See "Securities of
Smaller Companies" and "Securities of Companies with Limited Operating
Histories" above.

                  Investors in IPOs can be adversely affected by substantial
dilution in the value of their shares, by sales of additional shares and by
concentration of control in existing management and principal shareholders. In
addition, all of the factors that affect stock market performance may have a
greater impact on the shares of IPO companies.

                  The price of a company's securities may be highly unstable at
the time of its IPO and for a period thereafter due to market psychology
prevailing at the time of the IPO, the absence of a prior public market, the
small number of shares available and limited availability of investor
information. As a result of this or other factors, the Fund's advisor might
decide to sell an IPO security more quickly than it would otherwise, which may
result in a significant gain or loss and greater transaction costs to the Fund.
Any gains from shares held for 12 months or less will be treated as short-term
gains, taxable as ordinary income to the Fund's shareholders. In addition, IPO
securities may be subject to varying patterns of trading volume and may, at
times, be difficult to sell without an unfavorable impact on prevailing prices.

                  The effect of an IPO investment can have a magnified impact on
the Fund's performance when the Fund's asset base is small. Consequently, IPOs
may constitute a significant portion of the Fund's returns particularly when the
Fund is small. Since the number of securities issued in an IPO is limited, it is
likely that IPO securities will represent a smaller component of the Fund's
assets as it increases in size, and therefore have a more limited effect on the
Fund's performance.

                  There can be no assurance that IPOs will continue to be
available for the Fund to purchase. The number or quality of IPOs available for
purchase by the Fund may vary, decrease or entirely disappear. In some cases,
the Fund may not be able to purchase IPOs at the offering price, but may have to
purchase the shares in the aftermarket at a price greatly exceeding the offering
price, making it more difficult for the Fund to realize a profit.

                  The advisor's IPO trade allocation procedures govern which
funds and other advised accounts participate in the allocation of any IPO. See
the heading "Trade Allocations" under Section 4 below. Under the IPO allocation
procedures of Berger LLC, the Fund generally will not participate in an IPO if
the securities available for allocation to the Fund are insignificant relative
to the Fund's net assets. As a result, any fund or account whose assets are very
large is not likely to participate in the allocation of many IPOs.

                  FOREIGN SECURITIES. The Fund may invest in foreign securities,
which may be traded in foreign markets and denominated in foreign currency. The
Fund's investments may also include American Depositary Receipts (ADRs),
European Depositary Receipts (EDRs) which are similar to ADRs, in bearer form,
designed for use in the European securities markets, and in Global Depositary
Receipts (GDRs).

                  Investments in foreign securities involve some risks that are
different from the risks of investing in securities of U.S. issuers, such as the
risk of adverse political, social, diplomatic and economic developments and,
with respect to certain countries, the possibility of expropriation, taxes
imposed by foreign countries or limitations on the removal of monies or other
assets of the Fund. Moreover, the economies of individual foreign countries will
vary in comparison to the U.S. economy in such respects as growth of gross
domestic product, rate of inflation, capital reinvestment, resources,
self-sufficiency and balance of payments position. Securities of some foreign
companies, particularly those in developing countries, are less liquid and more
volatile than securities of comparable domestic companies. A developing country
generally is considered to be in the initial stages of its industrialization
cycle. Investing in the securities of developing countries may involve exposure
to economic structures that are less diverse and mature, and to political
systems that can be expected to have less stability than developed countries.


                                      -3-
<PAGE>   287



                  There also may be less publicly available information about
foreign issuers and securities than domestic issuers and securities, and foreign
issuers generally are not subject to accounting, auditing and financial
reporting standards, requirements and practices comparable to those applicable
to domestic issuers. Also, there is generally less government supervision and
regulation of exchanges, brokers, financial institutions and issuers in foreign
countries than there is in the U.S. Foreign financial markets typically have
substantially less volume than U.S. markets. Foreign markets also have different
clearance and settlement procedures and, in certain markets, delays or other
factors could make it difficult to effect transactions, potentially causing the
Fund to experience losses or miss investment opportunities. The use of a foreign
securities depository may increase this risk. The Funds may maintain assets with
a foreign securities depository if certain conditions are met. A foreign
securities depository may maintain assets on behalf of a Fund if the depository:
(i) acts as or operates a system for the central handling of securities that is
regulated by a foreign financial regulatory authority; (ii) holds assets on
behalf of the Fund under safekeeping conditions no less favorable than those
that apply to other participants; (iii) maintains records that identify the
assets of participants, and keep its own assets separated from the assets of
participants; (iv) provides periodic reports to participants; and (v) undergoes
periodic examination by regulatory authorities or independent accountants. In
addition, the Funds' primary custodian provides the Fund with an analysis of the
custodial risks of using a depository, monitors the depository on a continuous
basis, and notifies the Funds of any material changes in risks associated with
using the depository. In general, the analysis may include an analysis of a
depository's expertise and market reputation, the quality of its services, its
financial strength, and insurance or indemnification arrangements, the extent
and quality of regulation and independent examination of the depository, its
standing in published ratings, its internal controls, and other procedures for
safeguarding investments, and any related legal proceedings.


                  Costs associated with transactions in foreign securities are
generally higher than with transactions in U.S. securities. The Fund will incur
greater costs in maintaining assets in foreign jurisdictions and in buying and
selling foreign securities generally, resulting in part from converting foreign
currencies into U.S. dollars. In addition, the Fund might have greater
difficulty taking appropriate legal action with respect to foreign investments
in non-U.S. courts than with respect to domestic issuers in U.S. courts, which
may heighten the risk of possible losses through the holding of securities by
custodians and securities depositories in foreign countries.

                  If the Fund is invested in securities denominated or quoted in
currencies other than the U.S. dollar, changes in foreign currency exchange
rates will affect the value of the investments in its portfolio and the
unrealized appreciation or depreciation of investments insofar as U.S. investors
are concerned. If the foreign currency in which a security is denominated
appreciates against the U.S. dollar, the dollar value of the security will
increase. Conversely, a decline in the exchange rate of the foreign currency
against the U.S. dollar would adversely affect the dollar value of the foreign
securities. Foreign currency exchange rates are determined by forces of supply
and demand on the foreign exchange markets, which are in turn affected by the
international balance of payments and other economic and financial conditions,
government intervention, speculation and other factors.

                  PASSIVE FOREIGN INVESTMENT COMPANIES (PFICS). The Fund may
purchase the securities of certain companies considered Passive Foreign
Investment Companies (PFICs) under U.S. tax laws. For certain types of PFICs, in
addition to bearing their proportionate share of the Fund's expenses (management
fees and operating expenses), shareholders will also indirectly bear similar
expenses of such PFIC. PFIC investments also may be subject to less favorable
U.S. tax treatment, as discussed in Section 9 below.

                  ILLIQUID AND RESTRICTED SECURITIES. The Fund is authorized to
invest in securities which are illiquid or not readily marketable because they
are subject to restrictions on their resale ("restricted securities") or
because, based upon their nature or the market for such securities, no ready
market is available. However, the Fund will not purchase any such security, the
purchase of which would cause the Fund to invest more than 15% of its net
assets, measured at the time of purchase, in illiquid securities. Investments in
illiquid securities involve certain risks to the extent that the Fund may be
unable to dispose of such a security at the time desired or at a reasonable
price or, in some cases, may be unable to


                                      -4-
<PAGE>   288


dispose of it at all. In addition, in order to resell a restricted security, the
Fund might have to incur the potentially substantial expense and delay
associated with effecting registration. If securities become illiquid following
purchase or other circumstances cause more than 15% of the Fund's net assets to
be invested in illiquid securities, the trustees of the Fund, in consultation
with the Fund's advisor, will determine what action, if any, is appropriate in
light of all relevant circumstances.

                  Repurchase agreements maturing in more than seven days will be
considered as illiquid for purposes of this restriction. Pursuant to guidelines
established by the trustees, the Fund's advisor will determine whether
securities eligible for resale to qualified institutional buyers pursuant to SEC
Rule 144A under the Securities Act of 1933 should be treated as illiquid
investments considering, among other things, the following factors: (1) the
frequency of trades and quotes for the security; (2) the number of dealers
willing to purchase or sell the security and the number of other potential
purchasers; (3) dealer undertakings to make a market in the security; and (4)
the nature of the security and the marketplace trades (e.g., the time needed to
dispose of the security, the method of soliciting offers, and the mechanics of
the transfer). The liquidity of the Fund's investments in Rule 144A securities
could be impaired if qualified institutional buyers become uninterested in
purchasing these securities.

                  REPURCHASE AGREEMENTS. The Fund may invest in repurchase
agreements with various financial organizations, including commercial banks,
registered broker-dealers and registered government securities dealers. A
repurchase agreement is an agreement under which the Fund acquires a debt
security (generally a debt security issued or guaranteed by the U.S. government
or an agency thereof, a banker's acceptance or a certificate of deposit) from a
commercial bank, broker or dealer, subject to resale to the seller at an agreed
upon price and date (normally, the next business day). A repurchase agreement
may be considered a loan collateralized by securities. The resale price reflects
an agreed upon interest rate effective for the period the instrument is held by
the Fund and is unrelated to the interest rate on the underlying instrument. In
these transactions, the securities acquired by the Fund (including accrued
interest earned thereon) must have a total value equal to or in excess of the
value of the repurchase agreement and are held by the Fund's custodian bank
until repurchased. In addition, the trustees will establish guidelines and
standards for review by the investment advisor of the creditworthiness of any
bank, broker or dealer party to a repurchase agreement with the Fund. The Fund
will not enter into a repurchase agreement maturing in more than seven days if
as a result more than 15% of the Fund's net assets would be invested in such
repurchase agreements and other illiquid securities.

                  These transactions must be fully collateralized at all times
by debt securities (generally a security issued or guaranteed by the U.S.
Government or an agency thereof, a banker's acceptance or a certificate of
deposit), but involve certain risks, such as credit risk to the Fund if the
other party defaults on its obligation and the Fund is delayed or prevented from
liquidating the collateral. For example, if the other party to the agreement
defaults on its obligation to repurchase the underlying security at a time when
the value of the security has declined, the Fund may incur a loss upon
disposition of the security. If the other party to the agreement becomes
insolvent and subject to liquidation or reorganization under the Bankruptcy Code
or other laws, a court may determine that the underlying security is collateral
for a loan by the Fund not within the control of the Fund and therefore the
realization by the Fund on such collateral may automatically be stayed and
delayed. Further, it is possible that the Fund may not be able to substantiate
its interest in the underlying security and may be deemed an unsecured creditor
of the other party to the agreement. The Fund expects that these risks can be
controlled through careful monitoring procedures.

                  WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Fund may
purchase and sell securities on a when-issued or delayed delivery basis.
However, the Fund currently does not intend to purchase or sell securities on a
when-issued or delayed delivery basis, if as a result more than 5% of its total
assets taken at market value at the time of purchase would be invested in such
securities. When-issued or delayed delivery transactions arise when securities
(normally, obligations of issuers eligible for investment by the Fund) are
purchased or sold by the Fund with payment and delivery taking place in the
future in order to secure what is considered to be an advantageous price or
yield. However, the yield available on a comparable security when delivery takes
place may vary from the yield on the security at the time that the when-issued
or delayed delivery transaction was entered into. Any failure to


                                      -5-
<PAGE>   289


consummate a when-issued or delayed delivery transaction may result in the Fund
missing the opportunity of obtaining a price or yield considered to be
advantageous. When-issued and delayed delivery transactions may generally be
expected to settle within one month from the date the transactions are entered
into, but in no event later than 90 days. However, no payment or delivery is
made by the Fund until it receives delivery or payment from the other party to
the transaction.

                  When the Fund purchases securities on a when-issued basis, it
will maintain in a segregated account with its custodian cash, U.S. government
securities or other liquid assets having an aggregate value equal to the amount
of such purchase commitments, until payment is made. If necessary, additional
assets will be placed in the account daily so that the value of the account will
equal or exceed the amount of the Fund's purchase commitments.

                  LENDING OF PORTFOLIO SECURITIES. The Fund may lend its
securities to qualified institutional investors (such as brokers, dealers or
other financial organizations) who need to borrow securities in order to
complete certain transactions, such as covering short sales, avoiding failures
to deliver securities or completing arbitrage operations. Loans of securities by
the Fund will be collateralized by cash, letters of credit, or securities issued
or guaranteed by the U.S. Government or its agencies. The collateral will equal
at least 100% of the current market value of the loaned securities,
marked-to-market on a daily basis. By lending its securities, the Fund will be
attempting to generate income through the receipt of interest on the loan which,
in turn, can be invested in additional securities to pursue the Fund's
investment objective. Any gain or loss in the market price of the securities
loaned that might occur during the term of the loan would be for the account of
the Fund.

                  The Fund may lend its portfolio securities to qualified
brokers, dealers, banks or other financial institutions, so long as the terms,
the structure and the aggregate amount of such loans are not inconsistent with
the Investment Company Act of 1940, or the Rules and Regulations or
interpretations of the Securities and Exchange Commission (the "Commission")
thereunder, which currently require that (a) the borrower pledge and maintain
with the Fund collateral consisting of cash, an irrevocable letter of credit or
securities issued or guaranteed by the United States government having a value
at all times not less than 100% of the value of the securities loaned, (b) the
borrower add to such collateral whenever the price of the securities loaned
rises (i.e., the borrower "marks to the market" on a daily basis), (c) the loan
be made subject to termination by the Fund at any time and (d) the Fund receives
reasonable interest on the loan, which interest may include the Fund's investing
cash collateral in interest bearing short-term investments, and (e) the Fund
receives all dividends and distributions on the loaned securities and any
increase in the market value of the loaned securities.

                  The Fund bears risk of loss in the event that the other party
to a securities lending transaction defaults on its obligations and the Fund is
delayed in or prevented from exercising its rights to dispose of the collateral,
including the risk of a possible decline in the value of the collateral
securities during the period in which the Fund seeks to assert these rights, the
risk of incurring expenses associated with asserting these rights and the risk
of losing all or a part of the income from the transaction. The Fund will not
lend its portfolio securities if, as a result, the aggregate value of such loans
would exceed 33-1/3% of the value of the Fund's total assets (including the
value of the collateral received to secure the loan). Loan arrangements made by
the Fund will comply with all other applicable regulatory requirements,
including the rules of the New York Stock Exchange, which rules presently
require the borrower, after notice, to redeliver the securities within the
normal settlement time of three business days. All relevant facts and
circumstances, including creditworthiness of the broker, dealer or institution,
will be considered in making decisions with respect to the lending of
securities, subject to review by the Fund's trustees.

                  Although voting rights with respect to loaned securities pass
to the borrower, the Fund retains the right to recall a security (or terminate a
loan) for the purpose of exercising the security's voting rights. Efforts to
recall loaned securities in time to exercise voting rights may be unsuccessful,
especially for foreign securities or thinly traded securities. In addition, it
is expected that loaned securities will be recalled for voting only when the
items being voted on are, in the judgment of the Fund's advisor, either


                                      -6-
<PAGE>   290


material to the economic value of the security or threaten to materially impact
the issuing company's corporate governance policies or structure.

                  SHORT SALES. The Fund currently is only permitted to engage in
short sales if, at the time of the short sale, the Fund owns or has the right to
acquire an equivalent kind and amount of the security being sold short at no
additional cost (i.e., short sales "against the box").

                  In a short sale, the seller does not immediately deliver the
securities sold and is said to have a short position in those securities until
delivery occurs. To make delivery to the purchaser, the executing broker borrows
the securities being sold short on behalf of the seller. While the short
position is maintained, the seller collateralizes its obligation to deliver the
securities sold short in an amount equal to the proceeds of the short sale plus
an additional margin amount established by the Board of Governors of the Federal
Reserve. If the Fund engages in a short sale, the collateral account will be
maintained by the Fund's custodian. While the short sale is open, the Fund will
maintain in a segregated custodial account an amount of securities convertible
into or exchangeable for such equivalent securities at no additional cost. These
securities would constitute the Fund's long position.

                  Under prior law, the Fund could have made a short sale, as
described above, when it wanted to sell a security it owned at a current
attractive price, but also wished to defer recognition of gain or loss for
Federal income tax purposes and for purposes of satisfying certain tests
applicable to regulated investment companies under the Internal Revenue Code.
However, federal tax legislation has eliminated the ability to defer recognition
of gain or loss in short sales against the box and accordingly, it is not
anticipated that the Fund will be engaging in these transactions unless there
are further legislative changes.

                  HEDGING TRANSACTIONS. The Fund is authorized to make limited
use of certain types of futures, forwards and/or options, but only for the
purpose of hedging, that is, protecting against market risk due to market
movements that may adversely affect the value of the Fund's securities or the
price of securities that the Fund is considering purchasing. The utilization of
futures, forwards and options is also subject to policies and procedures which
may be established by the trustees from time to time. In addition, the Fund is
not required to hedge. Decisions regarding hedging are subject to the advisor's
judgment of the cost of the hedge, its potential effectiveness and other factors
the advisor considers pertinent.

                  A hedging transaction may partially protect the Fund from a
decline in the value of a particular security or its portfolio generally,
although hedging may also limit the Fund's opportunity to profit from favorable
price movements, and the cost of the transaction will reduce the potential
return on the security or the portfolio. Use of these instruments by the Fund
involves the potential for a loss that may exceed the amount of initial margin
the Fund would be permitted to commit to the contracts under its investment
limitation, or in the case of a call option written by the Fund, may exceed the
premium received for the option. However, the Fund is permitted to use such
instruments for hedging purposes only, and only if the aggregate amount of its
obligations under these contracts does not exceed the total market value of the
assets the Fund is attempting to hedge, such as a portion or all of its exposure
to equity securities or its holding in a specific foreign currency. To help
ensure that the Fund will be able to meet its obligations under its futures and
forward contracts and its obligations under options written by the Fund, the
Fund will be required to maintain liquid assets in a segregated account with its
custodian bank or to set aside portfolio securities to "cover" its position in
these contracts.

                  The principal risks of the Fund utilizing futures
transactions, forward contracts and options are: (a) losses resulting from
market movements not anticipated by the Fund; (b) possible imperfect correlation
between movements in the prices of futures, forwards and options and movements
in the prices of the securities or currencies hedged or used to cover such
positions; (c) lack of assurance that a liquid secondary market will exist for
any particular futures or options at any particular time, and possible
exchange-imposed price fluctuation limits, either of which may make it difficult
or impossible to close a position when so desired; (d) lack of assurance that
the counterparty to a forward contract would be willing to negotiate an offset
or termination of the contract when so desired; and (e) the need for


                                      -7-
<PAGE>   291


additional information and skills beyond those required for the management of a
portfolio of traditional securities. In addition, when the Fund enters into an
over-the-counter contract with a counterparty, the Fund will assume counterparty
credit risk, that is, the risk that the counterparty will fail to perform its
obligations, in which case the Fund could be worse off than if the contract had
not been entered into.

                  Following is additional information concerning the futures,
forwards and options which the Fund may utilize, provided that no more than 5%
of the Fund's net assets at the time the contract is entered into may be used
for initial margins for financial futures transactions and premiums paid for the
purchase of options. In addition, the Fund may only write call options that are
covered and only up to 25% of the Fund's total assets.

                  Futures Contracts. Financial futures contracts are
exchange-traded contracts on financial instruments (such as securities and
foreign currencies) and securities indices that obligate the holder to take or
make delivery of a specified quantity of the underlying financial instrument, or
the cash value of an index, at a future date. Although futures contracts by
their terms call for the delivery or acquisition of the underlying instruments
or a cash payment based on the mark-to-market value of the underlying
instruments, in most cases the contractual obligation will be offset before the
delivery date by buying (in the case of an obligation to sell) or selling (in
the case of an obligation to buy) an identical futures contract. Such a
transaction cancels the original obligation to make or take delivery of the
instruments.

                  The Fund may enter into contracts for the purchase or sale for
future delivery of financial instruments, such as securities and foreign
currencies, or contracts based on financial indices including indices of U.S.
Government securities, foreign government securities or equity securities. U.S.
futures contracts are traded on exchanges which have been designated "contract
markets" by the Commodity Futures Trading Commission ("CFTC") and must be
executed through a futures commission merchant (an "FCM"), or brokerage firm,
which is a member of the relevant contract market. Through their clearing
corporations, the exchanges guarantee performance of the contracts as between
the clearing members of the exchange.

                  Both the buyer and seller are required to deposit "initial
margin" for the benefit of the FCM when a futures contract is entered into.
Initial margin deposits are equal to a percentage of the contract's value, as
set by the exchange on which the contract is traded, and may be maintained in
cash or other liquid assets. If the value of either party's position declines,
that party will be required to make additional "variation margin" payments to
the other party to settle the change in value on a daily basis. Initial and
variation margin payments are similar to good faith deposits or performance
bonds or party-to-party payments resulting from daily changes in the value of
the contract, unlike margin extended by a securities broker, and would be
released or credited to the Fund upon termination of the futures contract,
assuming all contractual obligations have been satisfied. Unlike margin extended
by a securities broker, initial and variation margin payments do not constitute
purchasing securities on margin for purposes of the Fund's investment
limitations. The Fund will incur brokerage fees when it buys or sells futures
contracts.

                  In the event of the bankruptcy of the FCM that holds margin on
behalf of the Fund, the Fund may be entitled to return of margin owed to the
Fund only in proportion to the amount received by the FCM's other customers. The
Fund will attempt to minimize the risk by careful monitoring of the
creditworthiness of the FCMs with which the Fund does business and by depositing
margin payments in a segregated account with the Fund's custodian for the
benefit of the FCM when practical or otherwise required by law.

                  The Fund intends to comply with guidelines of eligibility for
exclusion from the definition of the term "commodity pool operator" with the
CFTC and the National Futures Association, which regulate trading in the futures
markets. Accordingly, the Fund will not enter into any futures contract or
option on a futures contract if, as a result, the aggregate initial margin and
premiums required to establish such positions would exceed 5% of the Fund's net
assets.


                                      -8-
<PAGE>   292


                  Although the Fund would hold cash and liquid assets in a
segregated account with a mark-to-market value sufficient to cover the Fund's
open futures obligations, the segregated assets would be available to the Fund
immediately upon closing out the futures position.

                  The acquisition or sale of a futures contract may occur, for
example, when the Fund is considering purchasing or holds equity securities and
seeks to protect itself from fluctuations in prices without buying or selling
those securities. For example, if prices were expected to decrease, the Fund
might sell equity index futures contracts, thereby hoping to offset a potential
decline in the value of equity securities in the portfolio by a corresponding
increase in the value of the futures contract position held by the Fund and
thereby preventing the Fund's net asset value from declining as much as it
otherwise would have. The Fund also could protect against potential price
declines by selling portfolio securities and investing in money market
instruments. However, the use of futures contracts as a hedging technique allows
the Fund to maintain a defensive position without having to sell portfolio
securities.

                  Similarly, when prices of equity securities are expected to
increase, futures contracts may be bought to attempt to hedge against the
possibility of having to buy equity securities at higher prices. This technique
is sometimes known as an anticipatory hedge. Since the fluctuations in the value
of futures contracts should be similar to those of equity securities, the Fund
could take advantage of the potential rise in the value of equity securities
without buying them until the market has stabilized. At that time, the futures
contracts could be liquidated and the Fund could buy equity securities on the
cash market.

                  The ordinary spreads between prices in the cash and futures
markets, due to differences in the nature of those markets, are subject to
distortions. First, all participants in the futures market are subject to
initial margin and variation margin requirements. Rather than meeting additional
variation margin requirements, investors may close out futures contracts through
offsetting transactions which could distort the normal price relationship
between the cash and futures markets. Second, the liquidity of the futures
market depends on participants entering into offsetting transactions rather than
making or taking delivery. To the extent participants decide to make or take
delivery, liquidity in the futures market could be reduced and prices in the
futures market distorted. Third, from the point of view of speculators, the
margin deposit requirements in the futures market are less than margin
requirements in the securities market. Therefore, increased participation by
speculators in the futures market may cause temporary price distortions. Due to
the possibility of the foregoing distortions, a correct forecast of general
price trends by the Fund still may not result in a successful use of futures.

                  Futures contracts entail additional risks. Although the Fund
will only utilize futures contracts when it believes that use of such contracts
will benefit the Fund, if the Fund's investment judgment is incorrect, the
Fund's overall performance could be worse than if the Fund had not entered into
futures contracts. For example, if the Fund has hedged against the effects of a
possible decrease in prices of securities held in the Fund's portfolio and
prices increase instead, the Fund will lose part or all of the benefit of the
increased value of these securities because of offsetting losses in the Fund's
futures positions. In addition, if the Fund has insufficient cash, it may have
to sell securities from its portfolio to meet daily variation margin
requirements. Those sales may be, but will not necessarily be, at increased
prices which reflect the rising market and may occur at a time when the sales
are disadvantageous to the Fund. Although the buyer of an option cannot lose
more than the amount of the premium plus related transaction costs, a buyer or
seller of futures contracts could lose amounts substantially in excess of any
initial margin deposits made, due to the potential for adverse price movements
resulting in additional variation margin being required by such positions.
However, the Fund intends to monitor its investments closely and will attempt to
close its positions when the risk of loss to the Fund becomes unacceptably high.

                  The prices of futures contracts depend primarily on the value
of their underlying instruments. Because there are a limited number of types of
futures contracts, it is possible that the standardized futures contracts
available to the Fund will not match exactly the Fund's current or potential
investments. The Fund may buy and sell futures contracts based on underlying
instruments with different characteristics from the securities in which it
typically invests -- for example, by hedging investments in


                                       -9-
<PAGE>   293


portfolio securities with a futures contract based on a broad index of
securities -- which involves a risk that the futures position will not correlate
precisely with the performance of the Fund's investments.

                  Futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments closely correlate
with the Fund's investments. Futures prices are affected by such factors as
current and anticipated short-term interest rates, changes in volatility of the
underlying instruments and the time remaining until expiration of the contract.
Those factors may affect securities prices differently from futures prices.
Imperfect correlations between the Fund's investments and its futures positions
may also result from differing levels of demand in the futures markets and the
securities markets, from structural differences in how futures and securities
are traded, and from imposition of daily price fluctuation limits for futures
contracts. The Fund may buy or sell futures contracts with a value less than or
equal to the securities it wishes to hedge or is considering purchasing. If
price changes in the Fund's futures positions are poorly correlated with its
other investments, its futures positions may fail to produce desired gains or
result in losses that are not offset by the gains in the Fund's other
investments.

                  Because futures contracts are generally settled within a day
from the date they are closed out, compared with a longer settlement period for
most types of securities, the futures markets can provide superior liquidity to
the securities markets. Nevertheless, there is no assurance a liquid secondary
market will exist for any particular futures contract at any particular time. In
addition, futures exchanges may establish daily price fluctuation limits for
futures contracts and may halt trading if a contract'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, it may be impossible for the Fund to enter
into new positions or close out existing positions. If the secondary market for
a futures contract is not liquid because of price fluctuation limits or
otherwise, the Fund may not be able to promptly liquidate unfavorable futures
positions and potentially could be required to continue to hold a futures
position until the delivery date, regardless of changes in its value. As a
result, the Fund's access to other assets held to cover its futures positions
also could be impaired.

                  Options on Futures Contracts. The Fund may buy and write
options on futures contracts for hedging purposes. An option on a futures
contract gives the Fund the right (but not the obligation) to buy or sell a
futures contract at a specified price on or before a specified date. The
purchase of a call option on a futures contract is similar in some respects to
the purchase of a call option on an individual security. Depending on the
pricing of the option compared to either the price of the futures contract upon
which it is based or the price of the underlying instrument, ownership of the
option may or may not be less risky than ownership of the futures contract or
the underlying instrument. As with the purchase of futures contracts, the Fund
may buy a call option on a futures contract to hedge against a market advance,
and the Fund might buy a put option on a futures contract to hedge against a
market decline.

                  The writing of a call option on a futures contract constitutes
a partial hedge against declining prices of the security or foreign currency
which is deliverable under, or of the index comprising, the futures contract. If
the futures price at the expiration of the call option is below the exercise
price, the Fund will retain the full amount of the option premium which provides
a partial hedge against any decline that may have occurred in the Fund's
portfolio holdings. If a call option the Fund has written is exercised, the Fund
will incur a loss which will be reduced by the amount of the premium it
received. Depending on the degree of correlation between change in the value of
its portfolio securities and changes in the value of the futures positions, the
Fund's losses from existing options on futures may to some extent be reduced or
increased by changes in the value of portfolio securities.

                  The purchase of a put option on a futures contract is similar
in some respects to the purchase of protective put options on portfolio
securities. For example, the Fund may buy a put option on a futures contract to
hedge the Fund's portfolio against the risk of falling prices.

                  The amount of risk the Fund assumes when it buys an option on
a futures contract is the premium paid for the option plus related transaction
costs. In addition to the correlation risks discussed above, the purchase of an
option also entails the risk that changes in the value of the underlying futures
contract will not be fully reflected in the value of the options bought.


                                      -10-
<PAGE>   294


                  Forward Foreign Currency Exchange Contracts. A forward
contract is a privately negotiated agreement between two parties in which one
party is obligated to deliver a stated amount of a stated asset at a specified
time in the future and the other party is obligated to pay a specified invoice
amount for the assets at the time of delivery. The Fund currently intends that
it will only use forward contracts or commitments for hedging purposes and will
only use forward foreign currency exchange contracts, although the Fund may
enter into additional forms of forward contracts or commitments in the future if
they become available and advisable in light of the Fund's objectives and
investment policies. Forward contracts generally are negotiated in an interbank
market conducted directly between traders (usually large commercial banks) and
their customers. Unlike futures contracts, which are standardized
exchange-traded contracts, forward contracts can be specifically drawn to meet
the needs of the parties that enter into them. The parties to a forward contract
may agree to offset or terminate the contract before its maturity, or may hold
the contract to maturity and complete the contemplated exchange.

                  The following discussion summarizes the Fund's principal uses
of forward foreign currency exchange contracts ("forward currency contracts").
The Fund may enter into forward currency contracts with stated contract values
of up to the value of the Fund's assets. A forward currency contract is an
obligation to buy or sell an amount of a specified currency for an agreed price
(which may be in U.S. dollars or a foreign currency) on a specified date. The
Fund will exchange foreign currencies for U.S. dollars and for other foreign
currencies in the normal course of business and may buy and sell currencies
through forward currency contracts in order to fix a price (in terms of a
specified currency) for securities it has agreed to buy or sell ("transaction
hedge"). The Fund also may hedge some or all of its investments denominated in
foreign currency against a decline in the value of that currency (or a proxy
currency whose price movements are expected to have a high degree of correlation
with the currency being hedged) relative to the U.S. dollar by entering into
forward currency contracts to sell an amount of that currency approximating the
value of some or all of its portfolio securities denominated in that currency
("position hedge") or by participating in futures contracts (or options on such
futures) with respect to the currency. The Fund also may enter into a forward
currency contract with respect to a currency where the Fund is considering the
purchase or sale of investments denominated in that currency but has not yet
selected the specific investments ("anticipatory hedge").

                  These types of hedging minimize the effect of currency
appreciation as well as depreciation, but do not eliminate fluctuations in the
underlying U.S. dollar equivalent value of the proceeds of or rates of return on
the Fund's foreign currency denominated portfolio securities. The matching of
the increase in value of a forward contract and the decline in the U.S. dollar
equivalent value of the foreign currency denominated asset that is the subject
of the hedge generally will not be precise. Shifting the Fund's currency
exposure from one foreign currency to another limits the Fund's opportunity to
profit from increases in the value of the original currency and involves a risk
of increased losses to the Fund if its investment manager's projection of future
exchange rates is inaccurate. Unforeseen changes in currency prices may result
in poorer overall performance for the Fund than if it had not entered into such
contracts.

                  The Fund will cover outstanding forward currency contracts by
maintaining liquid portfolio securities denominated in the currency underlying
the forward contract or the currency being hedged. To the extent that the Fund
is not able to cover its forward currency positions with underlying portfolio
securities, the Fund's custodian will segregate cash or liquid assets having a
value equal to the aggregate amount of the Fund's commitments under forward
contracts entered into. If the value of the securities used to cover a position
or the value of segregated assets declines, the Fund must find alternative cover
or segregate additional cash or liquid assets on a daily basis so that the value
of the covered and segregated assets will be equal to the amount of the Fund's
commitments with respect to such contracts.

                  While forward contracts are not currently regulated by the
CFTC, the CFTC may in the future assert authority to regulate forward contracts.
In such event, the Fund's ability to utilize forward contracts may be
restricted. The Fund may not always be able to enter into forward contracts at
attractive prices and may be limited in its ability to use these contracts to
hedge Fund assets. In addition, when the Fund enters into a privately negotiated
forward contract with a counterparty, the Fund assumes


                                      -11-
<PAGE>   295


counterparty credit risk, that is, the risk that the counterparty will fail to
perform its obligations, in which case the Fund could be worse off than if the
contract had not been entered into. Unlike many exchange-traded futures
contracts and options on futures, there are no daily price fluctuation limits
with respect to forward contracts and other negotiated or over-the-counter
instruments, and with respect to those contracts, adverse market movements could
therefore continue to an unlimited extent over a period of time. However, the
Fund intends to monitor its investments closely and will attempt to renegotiate
or close its positions when the risk of loss to the Fund becomes unacceptably
high.

                  Options on Securities and Securities Indices. The Fund may buy
or sell put or call options and write covered call options on securities that
are traded on United States or foreign securities exchanges or over-the-counter.
Buying an option involves the risk that, during the option period, the price of
the underlying security will not increase (in the case of a call) to above the
exercise price, or will not decrease (in the case of a put) to below the
exercise price, in which case the option will expire without being exercised and
the holder would lose the amount of the premium. Writing a call option involves
the risk of an increase in the market value of the underlying security, in which
case the option could be exercised and the underlying security would then be
sold by the Fund to the option holder at a lower price than its current market
value and the Fund's potential for capital appreciation on the security would be
limited to the exercise price. Moreover, when the Fund writes a call option on a
securities index, the Fund bears the risk of loss resulting from imperfect
correlation between movements in the price of the index and the price of the
securities set aside to cover such position. Although they entitle the holder to
buy equity securities, call options to purchase equity securities do not entitle
the holder to dividends or voting rights with respect to the underlying
securities, nor do they represent any rights in the assets of the issuer of
those securities.





                  A call option written by the Fund is "covered" if the Fund
owns the underlying security covered by the call or has an absolute and
immediate right to acquire that security without additional cash consideration
(or for additional cash consideration held in a segregated account by its
custodian) upon conversion or exchange of other securities held in its
portfolio. A call option is also deemed to be covered if the Fund holds a call
on the same security and in the same principal amount as the call written and
the exercise price of the call held (i) is equal to or less than the exercise
price of the call written or (ii) is greater than the exercise price of the call
written if the difference is maintained by the Fund in liquid assets in a
segregated account with its custodian.

                  The writer of a call option may have no control when the
underlying securities must be sold. Whether or not an option expires
unexercised, the writer retains the amount of the premium. This amount, of
course, may, in the case of a covered call option, be offset by a decline in the
market value of the underlying security during the option period.

                  The writer of an exchange-traded call option that wishes to
terminate its obligation may effect a "closing purchase transaction." This is
accomplished by buying an option of the same series as the option previously
written. The effect of the purchase is that the writer's position will be
canceled by the clearing corporation. If the Fund desires to sell a particular
security from the Fund's portfolio on which the Fund has written a call option,
the Fund will effect a closing transaction prior to or concurrent with the sale
of the security. However, a writer may not effect a closing purchase transaction
after being notified of the exercise of an option. An investor who is the holder
of an exchange-traded option may liquidate its position by effecting a "closing
sale transaction." This is accomplished by selling an option of the same series
as the option previously bought. There is no guarantee that either a closing
purchase or a closing sale transaction can be effected.

                  The Fund will realize a profit from a closing transaction if
the price of the purchase transaction is less than the premium received from
writing the option or the price received from a sale transaction is more than
the premium paid to buy the option; the Fund will realize a loss from a closing
transaction if the price of the purchase transaction is more than the premium
received from writing the option or the price received from a sale transaction
is less than the premium paid to buy the option. Because increases in the market
price of a call option will generally reflect increases in the market price


                                      -12-
<PAGE>   296


of the underlying security, any loss resulting from the repurchase of a call
option is likely to be offset in whole or in part by appreciation of the
underlying security owned by the Fund.

                  An option position may be closed out only where there exists a
secondary market for an option of the same series. If a secondary market does
not exist, it might not be possible to effect closing transactions in particular
options with the result that the Fund would have to exercise the options in
order to realize any profit. If the Fund is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or the Fund delivers the underlying security
upon exercise. Reasons for the absence of a liquid secondary market may include
the following: (i) there may be insufficient trading interest in certain
options, (ii) restrictions may be imposed by a national securities exchange on
which the option is traded ("Exchange") on opening or closing transactions or
both, (iii) trading halts, suspensions or other restrictions may be imposed with
respect to particular classes or series of options or underlying securities,
(iv) unusual or unforeseen circumstances may interrupt normal operations on an
Exchange, (v) the facilities of an Exchange or of the Options Clearing
Corporation ("OCC") may not at all times be adequate to handle current trading
volume, or (vi) one or more Exchanges could, for economic or other reasons,
decide or be compelled at some future date to discontinue the trading of options
(or a particular class or series of options), in which event the secondary
market on that Exchange (or in that class or series of options) would cease to
exist, although outstanding options on that Exchange that had been issued by the
OCC as a result of trades on that Exchange would continue to be exercisable in
accordance with their terms.

                  In addition, when the Fund enters into an over-the-counter
option contract with a counterparty, the Fund assumes counterparty credit risk,
that is, the risk that the counterparty will fail to perform its obligations, in
which case the Fund could be worse off than if the contract had not been entered
into.

                  An option on a securities index is similar to an option on a
security except that, rather than the right to take or make delivery of a
security at a specified price, an option on a securities index gives the holder
the right to receive, on exercise of the option, an amount of cash if the
closing level of the securities index on which the option is based is greater
than, in the case of a call, or less than, in the case of a put, the exercise
price of the option.

                  The Fund may buy call options on securities or securities
indices to hedge against an increase in the price of a security or securities
that the Fund may buy in the future. The premium paid for the call option plus
any transaction costs will reduce the benefit, if any, realized by the Fund upon
exercise of the option, and, unless the price of the underlying security or
index rises sufficiently, the option may expire and become worthless to the
Fund. The Fund may buy put options to hedge against a decline in the value of a
security or its portfolio. The premium paid for the put option plus any
transaction costs will reduce the benefit, if any, realized by the Fund upon
exercise of the option, and, unless the price of the underlying security or
index declines sufficiently, the option may expire and become worthless to the
Fund.

                  An example of a hedging transaction using an index option
would be if the Fund were to purchase a put on a stock index, in order to
protect the Fund against a decline in the value of all securities held by it to
the extent that the stock index moves in a similar pattern to the prices of the
securities held. While the correlation between stock indices and price movements
of the stocks in which the Fund will generally invest may be imperfect, the Fund
expects, nonetheless, that the use of put options that relate to such indices
will, in certain circumstances, protect against declines in values of specific
portfolio securities or the Fund's portfolio generally. Although the purchase of
a put option may partially protect the Fund from a decline in the value of a
particular security or its portfolio generally, the cost of a put will reduce
the potential return on the security or the portfolio.

                  TEMPORARY DEFENSIVE MEASURES. The Fund may increase its
investment in government securities, and other short-term, interest-bearing
securities without regard to the Fund's otherwise applicable percentage limits,
policies or its normal investment emphasis, when its advisor believes market
conditions warrant a temporary defensive position. Taking larger positions in
such short-term investments


                                      -13-
<PAGE>   297


may serve as a means of preserving capital in unfavorable market conditions.
When in a defensive position, the Fund could miss the opportunity to participate
in any stock or bond market advances that occur during those periods, which the
Fund might have been able to participate in if it had remained more fully
invested.

                  PORTFOLIO TURNOVER. The portfolio turnover rates of the Fund
are shown in the Financial Highlights table included in the Prospectus. The
annual portfolio turnover rates of the Fund have exceeded 100%. A 100% annual
turnover rate results, for example, if the equivalent of all of the securities
in the Fund's portfolio are replaced in a period of one year. The Fund
anticipates that its portfolio turnover rate may exceed 100%, and investment
changes in the Fund will be made whenever the investment manager deems them
appropriate even if this results in a higher portfolio turnover rate. In
addition, portfolio turnover for the Fund may increase as a result of large
amounts of purchases and redemptions of shares of the Fund due to economic,
market or other factors that are not within the control of management.

                  Higher portfolio turnover will necessarily result in
correspondingly higher brokerage costs for the Fund. The existence of a high
portfolio turnover rate has no direct relationship to the tax liability of the
Fund, although sales of certain stocks will lead to realization of gains, and,
possibly, increased taxable distributions to shareholders. The Fund's brokerage
policy is discussed further below under Section 6--Brokerage Policy, and
additional information concerning income taxes is located under Section
9--Income Dividends, Capital Gains Distributions and Tax Treatment.

2.                INVESTMENT RESTRICTIONS

                  The investment objective of the Fund is capital appreciation.
The investment objective of the Fund is considered fundamental, meaning that it
cannot be changed without a shareholders' vote. There can be no assurance that
the Fund's investment objective will be realized.

                  The Fund has also adopted certain investment policies,
strategies, guidelines and procedures in pursuing its objective. These may be
changed without a shareholder vote. The principal policies and strategies used
by the Fund are described in the Prospectus.

                  In addition, the Fund has adopted certain fundamental and
non-fundamental restrictions on its investments and other activities, which are
listed below. Fundamental restrictions may not be changed without the approval
of (i) 67% or more of the voting securities of the Fund present at a meeting of
shareholders thereof if the holders of more than 50% of the outstanding voting
securities are present or represented by proxy, or (ii) more than 50% of the
outstanding voting securities of the Fund. Non-fundamental restrictions may be
changed in the future by action of the trustees without shareholder vote.

BERGER SMALL COMPANY GROWTH FUND

                  The following fundamental restrictions apply to the Berger
Small Company Growth Fund. The Fund may not:

                  1. With respect to 75% of the Fund's total assets, purchase
the securities of any one issuer (except U.S. government securities) if
immediately after and as a result of such purchase (a) the value of the holdings
of the Fund in the securities of such issuer exceeds 5% of the value of the
Fund's total assets or (b) the Fund owns more than 10% of the outstanding voting
securities of such issuer.

                  2. Invest in any one industry (other than U.S. government
securities) 25% or more of the value of its total assets at the time of such
investment.

                  3. Borrow money, except from banks for temporary or emergency
purposes in amounts not to exceed 25% of the Fund's total assets (including the
amount borrowed) taken at market value, nor pledge, mortgage or hypothecate its
assets, except to secure permitted indebtedness and then


                                      -14-
<PAGE>   298


only if such pledging, mortgaging or hypothecating does not exceed 25% of the
Fund's total assets taken at market value. When borrowings exceed 5% of the
Fund's total assets, the Fund will not purchase portfolio securities.


                  4. Act as a securities underwriter (except to the extent the
Fund may be deemed an underwriter under the Securities Act of 1933 in disposing
of a security), issue senior securities (except to the extent permitted under
the Investment Company Act of 1940), invest in real estate (although it may
purchase shares of a real estate investment trust), or invest in commodities or
commodity contracts except financial futures transactions, futures contracts on
securities and securities indices and options on such futures, forward foreign
currency exchange contracts, forward commitments or securities index put or call
options.

                  5. Make loans, except that the Fund may enter into repurchase
agreements and may lend portfolio securities in accordance with the Fund's
investment policies. The Fund does not, for this purpose, consider the purchase
of all or a portion of an issue of publicly distributed bonds, bank loan
participation agreements, bank certificates of deposit, bankers' acceptances,
debentures or other securities, whether or not the purchase is made upon the
original issuance of the securities, to be the making of a loan.

                  In applying the industry concentration investment restriction
(no. 2 above), the Fund uses the industry groups used in the Data Monitor
Portfolio Monitoring System of William O'Neil & Co. Incorporated. Further, the
Fund intends not to invest in any one industry 25% or more of the value of its
total assets at the time of such investments.


                  The trustees have adopted additional non-fundamental
investment restrictions for the Fund. These limitations may be changed by the
trustees without a shareholder vote. The non-fundamental investment restrictions
include the following:

                  1. The Fund may not purchase securities on margin from a
broker or dealer, except that the Fund may obtain such short-term credits as may
be necessary for the clearance of transactions, and may not make short sales of
securities, except that the Fund may make short sales if, at the time of the
short sale, the Fund owns or has the right to acquire an equivalent kind and
amount of the security being sold short at no additional cost (i.e., short sales
"against the box"). This limitation shall not prohibit or restrict the Fund from
entering into futures, forwards and options contracts or from making margin
payments and other deposits in connection therewith.

                  2. The Fund may not purchase the securities of any other
investment company, except by purchase in the open market involving no
commission or profit to a sponsor or dealer (other than the customary broker's
commission).

                  3. The Fund may not invest in companies for the purposes of
exercising control of management.

                  4. The Fund may not purchase any security, including any
repurchase agreement maturing in more than seven days, which is not readily
marketable, if more than 15% of the net assets of the Fund, taken at market
value at the time of purchase would be invested in such securities.

                  5. Only for the purpose of hedging, the Fund may purchase and
sell financial futures, forward foreign currency exchange contracts and put and
call options, but no more than 5% of the Fund's net assets at the time of
purchase may be invested in initial margins for financial futures transactions
and premiums for options. The Fund may only write call options that are covered
and only up to 25% of the Fund's total assets.

                  6. The Fund may not purchase or sell securities on a
when-issued or delayed delivery basis, if as a result more than 5% of its total
assets taken at market value at the time of purchase would be invested in such
securities.


                                      -15-
<PAGE>   299


3.                MANAGEMENT OF THE FUND

                  The Fund is supervised by trustees who are responsible for
major decisions about the Fund's policies and overall Fund oversight. The Fund's
trustees hire the companies that run day-to-day Fund operations, such as the
investment advisor, administrator, transfer agent and custodian.

                  The trustees and executive officers of the Fund are listed
below, together with information which includes their principal occupations
during the past five years and other principal business affiliations.


      MICHAEL OWEN, c/o Zayed University, Post Office Box 19282, Dubai, United
           Arab Emirates DOB: 1937. Dean, since _______ 2000, of Zayed
           University. Formerly self-employed as a financial and management
           consultant, and in real estate development from June 1999 to _____
           2000. From 1993 to June 1999, Dean, and from 1989 to 1993, a member
           of the Finance faculty, of the College of Business, Montana State
           University. Formerly (1976-1989), Chairman and Chief Executive
           Officer of Royal Gold, Inc. (mining). Chairman of the Board of Berger
           Growth Fund and Berger Large Cap Growth Fund. Chairman of the
           Trustees of Berger Investment Portfolio Trust, Berger Institutional
           Products Trust, Berger Worldwide Funds Trust, Berger Worldwide
           Portfolios Trust and Berger Omni Investment Trust.

*     JACK R. THOMPSON, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1949. President and a director since May 1999 (Executive Vice
           President from February 1999 to May 1999) of Berger Growth Fund and
           Berger Large Cap Growth Fund. President and a trustee since May 1999
           (Executive Vice President from February 1999 to May 1999) of Berger
           Investment Portfolio Trust, Berger Institutional Products Trust,
           Berger Worldwide Funds Trust, Berger Worldwide Portfolios Trust and
           Berger Omni Investment Trust. President and Director since June 1999
           (Executive Vice President from February 1999 to June 1999) of Berger
           LLC Audit Committee Member of the Public Employees' Retirement
           Association of Colorado (pension plan) since November 1997.
           Self-employed as a consultant from July 1995 through February 1999.
           Director of Wasatch Advisors (investment management) from February
           1997 to February 1999. Director of Janus Capital Corporation
           (investment management) from June 1984 through June 1995, and
           Executive Vice President of the Corporation from April 1989 through
           June 1995. Treasurer of Janus Capital Corporation from November 1983
           through October 1989. Trustee of the Janus Investment Funds from
           December 1990 through June 1995, and Senior Vice President of the
           Trust from May 1993 through June 1995. President and a director of
           Janus Service Corporation (transfer agent) from January 1987 through
           June 1995. President and a director of Fillmore Agency, Inc.
           (advertising agency), from January 1990 through June 1995. Executive
           Vice President and a director of Janus Capital International, Ltd.
           (investment advisor) from September 1994 through June 1995. President
           and a director of Janus Distributors, Inc. (broker/dealer), from May
           1991 through June 1995. Director of IDEX Management, Inc. (investment
           management), from January 1985 through June 1995. Trustee and Senior
           Vice President of the of the Janus Aspen Funds from May 1993 through
           June 1995.

      DENNIS E. BALDWIN, 3481 South Race Street, Englewood, CO 80110, DOB: 1928.
           President, Baldwin Financial Counseling. Formerly (1978-1990), Vice
           President and Denver Office Manager of Merrill Lynch Capital Markets.
           Director of Berger Growth Fund and Berger Large Cap Growth Fund.
           Trustee of Berger Investment Portfolio Trust, Berger Institutional
           Products Trust, Berger Worldwide Funds Trust, Berger Worldwide
           Portfolios Trust and Berger Omni Investment Trust.






                                      -16-
<PAGE>   300






      Berger Worldwide Funds Trust, Berger Worldwide Portfolios Trust and Berger
           Omni Investment Trust.

      KATHERINE A. CATTANACH, 672 South Gaylord, Denver, CO 80209, DOB: 1945.
           Managing Principal, Sovereign Financial Services, Inc. (investment
           consulting firm). Formerly (1981-1988), Executive Vice President,
           Captiva Corporation, Denver, Colorado (private investment management
           firm). Ph.D. in Finance (Arizona State University); Chartered
           Financial Analyst (CFA). Director of Berger Growth Fund and Berger
           Large Cap Growth Fund. Trustee of Berger Investment Portfolio Trust,
           Berger Institutional Products Trust, Berger Worldwide Funds Trust,
           Berger Worldwide Portfolios Trust and Berger Omni Investment Trust.

      PAUL R. KNAPP, 33 North LaSalle Street, Suite 1900, Chicago, IL 60602,
           DOB: 1945. Since October 2000, Executive Officer of DST Systems, Inc.
           Director (since February 1998) and a Vice President (February 1998 -
           November 1998) of West Side Investments, Inc. (investments), a
           wholly-owned subsidiary of DST Systems, Inc. Formerly, President,
           Chief Executive Officer and a director (September 1997 - October
           2000) of DST Catalyst, Inc. (international financial markets
           consulting, software and computer services company, an 81% owned
           subsidiary of DST Systems, Inc.) Previously (1991 - October 2000),
           Chairman, President, Chief Executive Officer and a director of
           Catalyst Institute (international public policy research organization
           focused primarily on financial markets and institutions); also (1991
           - September 1997), Chairman, President, Chief Executive Officer and a
           director of Catalyst Consulting (international financial institutions
           business consulting firm). Prior thereto (1988-1991), President,
           Chief Executive Officer and a director of Kessler Asher Group
           (brokerage, clearing and trading firm). Director of Berger Growth
           Fund and Berger Large Cap Growth Fund. Trustee of Berger Investment
           Portfolio Trust, Berger Institutional Products Trust, Berger
           Worldwide Funds Trust, Berger Worldwide Portfolios Trust and Berger
           Omni Investment Trust.


      HARRY T. LEWIS, JR., 1600 Broadway, Suite 2400, Denver, CO 80202, DOB:
           1933. Self-employed as a private investor. Formerly (1981-1988),
           Senior Vice President, Rocky Mountain Region, of Dain Bosworth
           Incorporated and member of that firm's Management Committee. Director
           of J.D. Edwards & Co. (computer software company) since 1995.
           Director of Berger Growth Fund and Berger Large Cap Growth Fund.
           Trustee of Berger Investment Portfolio Trust, Berger Institutional
           Products Trust, Berger Worldwide Funds Trust, Berger Worldwide
           Portfolios Trust and Berger Omni Investment Trust.

      WILLIAM SINCLAIRE, 3049 S. Perry Park Road, Sedalia, CO 80135, DOB: 1928.
           President, Santa Clara LLC (privately owned agriculture company).
           Director of Berger Growth Fund and Berger Large Cap Growth Fund.
           Trustee of Berger Investment Portfolio Trust, Berger Institutional
           Products Trust, Berger Worldwide Funds Trust, Berger Worldwide
           Portfolios Trust and Berger Omni Investment Trust.






                                      -17-
<PAGE>   301





*     JAY W. TRACEY, CFA, 210 University Boulevard, Suite 900, Denver, CO
           80206, DOB: 1954. Executive Vice President of the Berger Funds (since
           August, 2000). Executive Vice President and Chief Investment Officer
           of Berger LLC (since June 2000). Interim co-portfolio manager since
           June 2000 of the Berger Small Company Growth Fund and the Berger Mid
           Cap Growth Fund (since June 2000); portfolio manager of the Berger
           Growth Fund (since August 2000); co-portfolio manager since June 2000
           of the Berger Select Fund (since June 2000). Formerly, Vice President
           and Portfolio Manager at OppenheimerFunds, Inc (September 1994 to May
           2000) and Managing Director of Buckingham Capital Management
           (February 1994 to September 1994) .

*     JANICE M. TEAGUE, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1954. Vice President (since November 1998) and Assistant
           Secretary (since February 2000 and previously from September 1996 to
           November 1998) and Secretary (November 1998 through January 2000) of
           the Berger Funds. Vice President (since October 1997), Secretary
           (since November 1998) and Assistant Secretary (September 1996 through
           November 1998) with Berger LLC. Vice President and Secretary with
           Berger Distributors LLC, since August 1998. Formerly, self-employed
           as a business consultant from June 1995 through September 1996,
           Secretary of the Janus Funds from January 1990 to May 1995 and
           Assistant Secretary of Janus Capital Corporation from October 1989 to
           May 1995.

*     MARK S. SUNDERHUSE, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1961. Vice President (since February 1999) and portfolio manager
           (since January 1999) of the Berger New Generation Fund. Vice
           President and co-portfolio manager since May 1999 of the Berger
           Select Fund. Interim co-portfolio manager since June 2000 of the
           Berger Small Company Growth Fund and the Berger Mid Cap Growth Fund.
           Interim co-portfolio manager (January 2000 to May 2000) of the Berger
           Balanced Fund. Executive Vice President (since June 2000), portfolio
           manager (since January 1999) and Senior Vice President (from January
           1998 to June 2000) with Berger LLC. Formerly, Senior Vice President
           and Assistant Portfolio Manager with Crestone Capital Management,
           Inc. (from January 1991 through January 1998); Investment Officer
           with United Bank of Denver (from April 1989 through January 1991);
           and officer and registered representative with Boettcher & Company,
           Inc. (investment banking) (from May 1985 through April 1989).

*      DAVID J. SCHULTZ, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1950. Vice President and Treasurer (since November 1998) and
           Assistant Treasurer (September 1996 to November 1998) of the Berger
           Funds. Vice President (since February 1997) and Controller (since
           August 1994) with Berger LLC. Chief Financial Officer and Treasurer
           (since May 1996), Assistant Secretary (since August 1998) and
           Secretary (May 1996 to August 1998) with Berger Distributors LLC
           Formerly, Partner with Smith, Brock & Gwinn (accounting firm) from
           January 1984 to August 1994.

*      ANTHONY R. BOSCH, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1965. Vice President of the Berger Funds (since February 2000).
           Vice President (since June 1999) with Berger LLC. Formerly, Assistant
           Vice President of Federated Investors, Inc. from December 1996
           through May 1999, and Attorney with the U.S. Securities and Exchange
           Commission (from June 1990 through December 1996).


*      BRIAN S. FERRIE, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1958. Vice President of the Berger Funds since November 1998.
           Vice President (since February 1997) and Chief Compliance Officer
           (since August 1994) with Berger LLC. Chief Compliance Officer with
           Berger Distributors LLC, since May 1996. Formerly, Compliance Officer
           with United Services Advisor, Inc., from January 1988 to July 1994,
           and Director of Internal Audit of United Services Funds from January
           1987 to July 1994.

*      JOHN PAGANELLI, 210 University Boulevard, Suite 900, Denver, CO 80206,
           DOB: 1967. Assistant Treasurer of the Berger Funds since November
           1998. Vice President (since November 1998) and Manager of Accounting
           (January 1997 through November 1998) with Berger LLC.


                                      -18-
<PAGE>   302


           Formerly, Manager of Accounting (December 1994 through October 1996)
           and Senior Accountant (November 1991 through December 1994) with
           Palmeri Fund Administrators, Inc.


*      SUE VREELAND, 210 University Boulevard, Suite 900, Denver, CO 80206, DOB:
           1948. Secretary of the Berger Funds (since February 2000). Assistant
           Secretary of Berger LLC and Berger Distributors LLC since June 1999.
           Formerly, Assistant Secretary of the Janus Funds from March 1994 to
           May 1999, Assistant Secretary of Janus Distributors, Inc. from June
           1995 to May 1997 and Manager of Fund Administration for Janus Capital
           Corporation from February 1992 to May 1999


----------
* Interested person (as defined in the Investment Company Act of 1940) of the
Fund and/or of the Fund's advisor.

  The trustees of the Fund have adopted a trustee retirement age of 75 years.




TRUSTEE COMPENSATION


                   The officers of the Fund received no compensation from the
Fund during the fiscal year ended September 30, 2000. However, trustees of the
Fund who are not "interested persons" of the Fund or its advisor are compensated
for their services according to a fee schedule, allocated among the Berger
Funds. Neither the officers of the Fund nor the trustees receive any form of
pension or retirement benefit compensation from the Fund.



                   The following table sets forth information regarding
compensation paid or accrued during the fiscal year ended September 30, 2000,
for each trustee of the Fund:



<TABLE>
<CAPTION>
         NAME AND POSITION
         WITH BERGER FUNDS                                    AGGREGATE COMPENSATION FROM
======================================= ======================================= =================================

                                           BERGER SMALL COMPANY GROWTH FUND            ALL BERGER FUNDS(1)
--------------------------------------- --------------------------------------- ---------------------------------
<S>                                     <C>                                     <C>
Dennis E. Baldwin(2)                                 $ _________                           $________

Louis Bindner(5)                                     $ _________                           $________

Katherine A. Cattanach(2)                            $ _________                           $________

Paul R. Knapp(2)                                     $ _________                           $________

Harry T. Lewis(2)                                    $ _________                           $________

Michael Owen(2)                                      $ _________                           $________

William Sinclaire(2)                                 $ _________                           $________

Jack R. Thompson(2),(3),(4)                          $ _________                           $________
</TABLE>



                                      -19-
<PAGE>   303





NOTES TO TABLE


(1) Includes the Berger Growth Fund, the Berger Large Cap Growth Fund, the
Berger Investment Portfolio Trust (including the Berger Small Company Growth
Fund, the Berger New Generation Fund, the Berger Balanced Fund, the Berger
Select Fund, the Berger Information Technology Fund, the Berger Mid Cap Value
Fund and the Berger Mid Cap Growth Fund), the Berger Institutional Products
Trust (four series), the Berger Worldwide Funds Trust (three series), the Berger
Worldwide Portfolios Trust (one series) and the Berger Omni Investment Trust
(including the Berger Small Cap Value Fund). Aggregate compensation figures do
not include first-year estimates for any Fund in existence for less than one
year. Of the aggregate amounts shown for each trustee, the following amounts
were deferred under applicable deferred compensation plans: Dennis E. Baldwin
$______; Katherine A. Cattanach $______; Michael Owen $______; William Sinclaire
$______.

(2) Director of Berger Growth Fund and Berger Large Cap Growth Fund and trustee
of Berger Investment Portfolio Trust, Berger Institutional Products Trust,
Berger Worldwide Portfolios Trust, Berger Worldwide Funds Trust and Berger Omni
Investment Trust.


(3) Interested person of Berger LLC.


(4) President of Berger Growth Fund, Berger Large Cap Growth Fund, Berger
Investment Portfolio Trust, Berger Institutional Products ,Trust Berger
Worldwide Portfolios Trust, Berger Worldwide Funds Trust and Berger Omni
Investment Trust.

(5) Resigned as Director and Trustee effective November 14, 2000.


                   Trustees may elect to defer receipt of all or a portion of
their fees pursuant to a fee deferral plan adopted by the Fund. Under the plan,
deferred fees are credited to an account and adjusted thereafter to reflect the
investment experience of whichever of the Berger Funds (or approved money market
funds) is designated by the trustee for this purpose. Pursuant to an SEC
exemptive order, the Fund is permitted to purchase shares of the designated
funds in order to offset its obligation to the trustees participating in the
plan. Purchases made pursuant to the plan are excepted from any otherwise
applicable investment restriction limiting the purchase of securities of any
other investment company. The Fund's obligation to make payments of deferred
fees under the plan is a general obligation of the Fund.


                   As of December 31, 2000, the officers and trustees of the
Fund as a group owned of record or beneficially an aggregate of less than 1% of
the outstanding shares of the Fund.


4.                 INVESTMENT ADVISOR

BERGER LLC - INVESTMENT ADVISOR

                   Berger LLC, 210 University Boulevard, Suite 900, Denver, CO
80206, is the investment advisor to the Fund. Berger LLC is responsible for
managing the investment operations of the Fund and the composition of its
investment portfolio. Berger LLC also acts as the Fund's administrator and is
responsible for such functions as monitoring compliance with all applicable
federal and state laws.


                   Berger LLC is a Nevada Limited Liability Company, and has
been in the investment advisory business for 26 years. It serves as investment
advisor or sub-advisor to mutual funds and



                                      -20-
<PAGE>   304



institutional investors and had assets under management of approximately $___
billion as of December 31, 2000. Berger LLC is a subsidiary of Stilwell
Management Inc. ("Stilwell"), which owns more than 80% of Berger LLC, and is an
indirect subsidiary of Stilwell Financial Inc. ("Stilwell Financial"). Stilwell
also owns approximately 32% of the outstanding shares of DST Systems, Inc.
("DST"), a publicly traded information and transaction processing company which
acts as the Funds' transfer agent. DST, in turn, owns 100% of DST Securities, a
registered broker-dealer, which executes portfolio trades for the Funds.

                   Stilwell Financial was previously a wholly-owned subsidiary
of Kansas City Southern Industries, Inc. ("KCSI"). On July 12, 2000, KCSI
completed a separation of its transportation and financial services segments
through a dividend of stock of Stilwell Financial. On that date, KCSI
shareholders received two shares of Stilwell Financial for every KCSI share held
as of June 28, 2000. The separation resulted in no change in the management or
control of the Funds or the Advisor to the Funds.


INVESTMENT ADVISORY AGREEMENT

                   Under the Investment Advisory Agreement between the Fund and
its advisor, the advisor is generally responsible for furnishing continuous
advice and making investment decisions as to the acquisition, holding or
disposition of securities or other assets which the Fund may own or contemplate
acquiring from time to time. The Investment Advisory Agreement provides that the
investment advisor shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or omission
taken with respect to the Fund, except for willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties thereunder and except to the extent
otherwise provided by law.

                   Under the Agreement the advisor is compensated for its
services by the payment of a fee at an annual rate, calculated as a percentage
of the average daily net assets of the Fund.


                   The following schedule reflects the advisory fees charged to
the Fund for the fiscal year ended September 30, 2000:




<TABLE>
<CAPTION>
                      FUND                                 ADVISOR                  INVESTMENT ADVISORY FEE
                      ----                                 -------                  -----------------------
<S>                                               <C>                        <C>
Berger Small Company Growth Fund                  Berger LLC                                 _____%
</TABLE>


                   Investment advisory fees are charged to the Fund according to
the following schedule:


<TABLE>
<CAPTION>
                                                         AVERAGE DAILY
                      FUND                                 NET ASSETS                      ANNUAL RATE
                      ----                                 ----------                      -----------
<S>                                               <C>                                      <C>
Berger Small Company Growth Fund                  First $500 million                           .85%
                                                  Next $500 million                            .80%
                                                  Over $1 billion                              .75%
</TABLE>



                                      -21-
<PAGE>   305



                   The Fund's Investment Advisory Agreement will continue in
effect until the last day of April 2001, and thereafter from year to year if
such continuation is specifically approved at least annually by the trustees or
by vote of a majority of the outstanding shares of the Fund and in either case
by vote of a majority of the trustees who are not "interested persons" (as that
term is defined in the 1940 Act) of the Fund or the advisor. The Agreement is
subject to termination by the Fund or the advisor on 60 days' written notice,
and terminates automatically in the event of its assignment.


TRADE ALLOCATIONS

                   While investment decisions for the Fund are made
independently by the advisor, the same investment decision may be made for the
Fund and one or more accounts advised by the advisor. In this circumstance,
should purchase and sell orders of the same class of security be in effect on
the same day, the orders for such transactions may be combined by the advisor in
order to seek the best combination of net price and execution for each. Client
orders partially filled will, as a general matter, be allocated pro rata in
proportion to each client's original order, although exceptions may be made to
avoid, among other things, odd lots and de minimus allocations. Execution prices
for a combined order will be averaged so that each participating client receives
the average price paid or received. While in some cases, this policy might
adversely affect the price paid or received by the Fund or other participating
accounts, or the size of the position obtained or liquidated, the advisor will
aggregate orders if it believes that coordination of orders and the ability to
participate in volume transactions will result in the best overall combination
of net price and execution.

RESTRICTIONS ON PERSONAL TRADING


                  Berger LLC, the Berger Funds and Berger Distributors LLC each
permits its directors, officers and employees to purchase and sell securities
for their own accounts in accordance with a policy regarding personal investing
in each of the Codes of Ethics for Berger LLC, the Berger Funds and Berger
Distributors LLC. The policy requires all covered persons to conduct their
personal securities transactions in a manner which does not operate adversely to
the interests of the Funds or Berger LLC's other advisory clients. Directors and
officers of Berger LLC and Berger Distributors LLC, investment personnel and
other designated persons deemed to have access to current trading information
("access persons") are required to pre-clear all transactions in securities not
otherwise exempt under the policy. Requests for authority to trade will be
denied pre-clearance when, among other reasons, the proposed personal
transaction would be contrary to the provisions of the policy or would be deemed
to adversely affect any transaction then known to be under consideration for or
currently being effected on behalf of any client account, including the Funds.

                  In addition to the pre-clearance requirements described above
for Berger LLC and Berger Distributors LLC, the policy subjects directors and
officers of Berger LLC, the Berger Funds and Berger Distributors LLC, investment
personnel and other access persons to various trading restrictions and reporting
obligations. All reportable transactions are reviewed for compliance with the
policy. The policy is administered by Berger LLC and the provisions of the
policy are subject to interpretation by and exceptions authorized by its board
of directors.


5.                 EXPENSES OF THE FUND


                   In addition to paying an investment advisory fee to its
advisor, the Fund pays all of its expenses not assumed by its advisor,
including, but not limited to, custodian and transfer agent fees, legal and
accounting expenses, administrative and record keeping expenses, interest
charges, federal and state taxes, expenses of shareholders' meetings,
compensation of trustees who are not interested persons of Berger LLC, expenses
of printing and distributing reports to shareholders and federal and state
administrative agencies, and all expenses incurred in connection with the
execution of its portfolio transactions, including brokerage commissions on
purchases and sales of portfolio securities, which are considered a cost of
securities of the Fund. The Fund also pays all expenses incurred in complying
with all federal and state laws and the laws of any foreign country



                                      -22-
<PAGE>   306



applicable to the issue, offer or sale of shares of the Fund, including, but not
limited to, all costs involved in preparing and printing prospectuses for
shareholders of the Fund.

                  Under a separate Administrative Services Agreement with
respect to the Fund, Berger LLC performs certain administrative and
recordkeeping services not otherwise performed by the Fund's custodian and
recordkeeper, including the preparation of financial statements and reports to
be filed with the Securities and Exchange Commission and state regulatory
authorities. For the fiscal year ended September 30, 2000, Berger LLC did not
charge an administrative fee to the Fund. The administrative services fee may be
changed by the trustees without shareholder approval.

                   The following table shows the cost to the Fund of the
previously applicable advisory fee and administrative services fee for the years
shown and the amount of such fees waived on account of excess expenses under
applicable expense limitations.


                        Berger Small Company Growth Fund


<TABLE>
<CAPTION>
Fiscal Year Ended        Investment             Administrative         Advisory Fee
September 30,            Advisory Fee*          Service Fee**          Waiver                 TOTAL
-----------------        -------------          --------------         ------------           ------
<S>                      <C>                    <C>                    <C>                    <C>
2000                     $_______               $_______               $    0                 $_______


1999                     $5,582,000             $ 62,000               $    0                 $5,644,000

1998                     $6,984,000             $ 78,000               $    0                 $7,062,000
</TABLE>



* Effective October 1, 1999, the investment advisory fee charged to the Fund was
reduced from .90% to the following rates of average daily net assets: 0.85% of
the first $500 million; 0.80% of the next $500 million and 0.75% in excess of $1
billion.

** Effective October 1, 1999, the 0.01% administrative services fee was
eliminated.


                   The Fund has appointed State Street Bank and Trust Company
("State Street"), 801 Pennsylvania, Kansas City, MO 64105, as its recordkeeping
and pricing agent. In addition, State Street also serves as the Funds'
custodian. Each of the Funds has appointed DST Systems, Inc. ("DST"), P.O. Box
219958, Kansas City, MO 64121, as its transfer agent and dividend disbursing
agent. Approximately 32% of the outstanding shares of DST are owned by Stilwell.

                   As recordkeeping and pricing agent, State Street calculates
the daily net asset value of the Fund and performs certain accounting and
recordkeeping functions required by the Fund. The Fund pays State Street a
monthly base fee plus an asset-based fee. State Street is also reimbursed for
certain out-of-pocket expenses.

                   State Street, as custodian, and its subcustodians have
custody and provide for the safekeeping of the Fund's securities and cash, and
receive and remit the income thereon as directed by the management of the Fund.
The custodian and subcustodians do not perform any managerial or



                                      -23-
<PAGE>   307



policy-making functions for the Fund. For its services as custodian, State
Street receives an asset-based fee plus certain transaction fees and
out-of-pocket expenses.

                   As transfer agent and dividend disbursing agent, DST
maintains all shareholder accounts of record; assists in mailing all reports,
proxies and other information to the Fund's shareholders; calculates the amount
of, and delivers to the Fund's shareholders, proceeds representing all dividends
and distributions; and performs other related services. For these services, DST
receives a fee from the Fund at an annual rate of $14.00 per open Fund
shareholder account, subject to preset volume discounts, plus certain
transaction fees and fees for closed accounts, and is reimbursed for
out-of-pocket expenses.

                   All of State Street's and DST's fees are subject to reduction
pursuant to an agreed formula for certain earnings credits on the cash balances
of the Fund. Earnings credits received by the Fund can be found on the Fund's
Statement of Operations in the Annual Report incorporated by reference into this
Statement of Additional Information.


OTHER EXPENSE INFORMATION

                   The trustees of the Fund have authorized portfolio
transactions to be placed on an agency basis through DST Securities, Inc.
("DSTS"), a wholly-owned broker-dealer subsidiary of DST. When transactions are
effected through DSTS, the commission received by DSTS is credited against, and
thereby reduces, certain operating expenses that the Fund would otherwise be
obligated to pay. No portion of the commission is retained by DSTS. See Section
6--Brokerage Policy for further information concerning the expenses reduced as a
result of these arrangements. DSTS may be considered an affiliate of Berger LLC
due to the ownership interest of Stilwell in both DST and Berger LLC.

                   The Fund and/or its advisor have entered into arrangements
with certain brokerage firms and other companies (such as recordkeepers and
administrators) to provide administrative services (such as sub-transfer agency,
recordkeeping, shareholder communications, sub-accounting and/or other services)
to investors purchasing shares of the Fund through those firms or companies. The
Fund's advisor or the Fund (if approved by its trustees) may pay fees to these
companies for their services. These companies may also be appointed as agents
for or authorized by the Fund to accept on its behalf purchase and redemption
requests that are received in good order. Subject to Fund approval, certain of
these companies may be authorized to designate other entities to accept purchase
and redemption orders on behalf of the Fund.

                   The Fund's advisor may also enter into arrangements with
organizations that solicit clients for the advisor, which may include clients
who purchase shares of the Fund. While the specific terms of each arrangement
may differ, generally, the fee paid by the advisor under such arrangements is
based on the value of the referred client's assets managed by the advisor. None
of the fees paid to such organizations will be borne by the Fund.

DISTRIBUTOR

                   The distributor (principal underwriter) of the Fund's shares
is Berger Distributors LLC (the "Distributor"), 210 University Boulevard, Suite
900, Denver, CO 80206. The Distributor may be reimbursed by Berger LLC for its
costs in distributing the Fund's Institutional Shares.

6.                 BROKERAGE POLICY

                   Although the Fund retains full control over its own
investment policies, under the terms of its Investment Advisory Agreement,
Berger LLC as the Fund's advisor is directed to place the portfolio transactions
of the Fund. A report on the placement of brokerage business is given to the
trustees of the Fund every quarter, indicating the brokers with whom Fund
portfolio business was placed and the basis for such placement. The brokerage
commissions paid by the Fund during the past three fiscal years were as follows:


                                      -24-
<PAGE>   308


                              BROKERAGE COMMISSIONS


<TABLE>
<CAPTION>
                                                   FOR THE YEAR ENDED SEPTEMBER 30,
                                     ----------------------------------------------------------
                                          2000               1999                   1998
                                     ---------------- --------------------- -------------------
<S>                                  <C>              <C>                   <C>
BERGER SMALL COMPANY GROWTH FUND        $______             $807,000              $890,000
</TABLE>


                   The Investment Advisory Agreement authorizes and directs the
advisor to place portfolio transactions for the Fund only with brokers and
dealers who render satisfactory service in the execution of orders at the most
favorable prices and at reasonable commission rates. However, the Agreement
specifically authorizes the advisor to place such transactions with a broker
with whom it has negotiated a commission that is in excess of the commission
another broker or dealer would have charged for effecting that transaction if
the advisor determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker viewed in terms of either that particular transaction or
the overall responsibilities of the advisor. Accordingly, the advisor does not
have an obligation to seek the lowest available commission.

                   In accordance with this provision of the Agreement, portfolio
brokerage business of the Fund may be placed with brokers who provide useful
brokerage and research services to the advisor. The Fund's advisor may consider
the value of research provided as a factor in the choice of brokers. "Research"
includes computerized on-line stock quotation systems and related data feeds
from stock exchanges, computerized trade order entry, execution and confirmation
systems, fundamental and technical analysis data and software, computerized
stock market and business news services, economic research, account performance
data and computer hardware used for the receipt of electronic research services
and broker and other third-party equity research, such as publications or
writings which furnish advice as to the value of securities and advisability of
investing, and analyses and reports concerning issuers, industries, securities,
market trends, and portfolio strategies. Research may be provided orally, in
print, or electronically. These include a service used by the independent
trustees of the Fund in reviewing the Investment Advisory Agreement.

                   In some cases, a product or services termed "research" may
serve other functions unrelated to the making of investment decisions. When a
product has such a mixed use, the advisor will make a good faith allocation of
the cost of the product according to the use made of it. The portion of the
product that assists the advisor in the investment decision-making process may
be paid for with the Fund's commission dollars. The advisor pays for the portion
of the product that is not "research" with its own funds. Accordingly, the
decision whether and how to allocate the costs of such a product presents a
conflict of interest for Berger LLC.

                   Berger LLC does not enter into formal agreements with any
brokers regarding the placement of securities transactions because of any such
brokerage or research services that they provide. Berger LLC may, however, make
arrangements with and maintain internal procedures for allocating transactions
to brokers who provide such services to encourage them to provide services
expected to be useful to Berger LLC's clients, including the Fund. Brokers may
suggest a level of business they would like to receive in return for the
brokerage and research they provide. Berger LLC then determines whether to
continue receiving the research and brokerage provided and the approximate
amount of commissions it is willing to pay to continue the brokerage and
research arrangement with each broker. The actual amount of commissions a broker
may receive may be more or less than a broker's suggested allocations, depending
on Berger LLC's level of business, market conditions and other relevant factors.
Even under these arrangements, however, the placement of all Fund transactions,
must be consistent with the Fund's brokerage placement and execution policies,
and must be directed to a broker


                                      -25-
<PAGE>   309


who renders satisfactory service in the execution of orders at the most
favorable prices and at reasonable commission rates.


                   During the fiscal year ended September 30, 2000, of the
brokerage commissions paid by the Fund, the following amounts were paid to
brokers who provided to the Fund selected brokerage or research services
prepared by the broker or subscribed or paid for by the broker on behalf of the
Fund:



<TABLE>
<CAPTION>
                                                                              Amount
  FUND                                   Amount of Transactions           of Commissions
  ------------------------------------- --------------------------- ---------------------------
<S>                                     <C>                         <C>
  Berger Small Company Growth Fund                 $ _________              $________
</TABLE>


                   These brokerage and research services received from brokers
are often helpful to Berger LLC in performing its investment advisory
responsibilities to the Fund, and the availability of such services from brokers
does not reduce the responsibility of Berger LLC's advisory personnel to analyze
and evaluate the securities in which the Fund invests. The brokerage and
research services obtained as a result of the Fund's brokerage business also
will be useful to Berger LLC in making investment decisions for its other
advisory accounts, and, conversely, information obtained by reason of placement
of brokerage business of such other accounts may be used by Berger LLC in
rendering investment advice to the Fund. Although such brokerage and research
services may be deemed to be of value to Berger LLC, they are not expected to
decrease the expenses that Berger LLC would otherwise incur in performing its
investment advisory services for the Fund nor will the advisory fees that are
received by Berger LLC from the Fund be reduced as a result of the availability
of such brokerage and research services from brokers.

                   The trustees of the Fund have authorized portfolio
transactions to be placed on an agency basis through DSTS, a wholly-owned
broker-dealer subsidiary of DST. When transactions are effected through DSTS,
the commission received by DSTS is credited against, and thereby reduces,
certain operating expenses that the Fund would otherwise be obligated to pay. No
portion of the commission is retained by DSTS. DSTS may be considered an
affiliate of Berger LLC due to the ownership interest of Stilwell in both DST
and Berger LLC.

                   Included in the brokerage commissions paid by the Fund during
the last three fiscal years, as stated in the preceding Brokerage Commissions
table, are the following amounts paid to DSTS, which served to reduce the Fund's
out-of-pocket expenses as follows:


                 DSTS COMMISSIONS AND RELATED EXPENSE REDUCTIONS


<TABLE>
<CAPTION>
                                DSTS                          DSTS        Reduction        DSTS
                             Commissions    Reduction     Commissions    in Expenses    Commissions   Reduction in
                                Paid       in Expenses        Paid           FYE           Paid       Expenses FYE
                             FYE 9/30/00   FYE 9/30/00    FYE 9/30/99     9/30/99(1)    FYE 9/30/98    9/30/98(1)
--------------------------- -------------- ------------- --------------- ------------- -------------- --------------
<S>                         <C>            <C>           <C>             <C>           <C>            <C>
Berger Small Company        $ _____        $ _____       $ 6,000(2)      $ 4,500       $ 0            $ 0
Growth Fund
</TABLE>



                                      -26-
<PAGE>   310


(1) No portion of the commission is retained by DSTS. Difference between
commissions paid through DSTS and reduction in expenses constitute commissions
paid to an unaffiliated clearing broker.

(2) Constitutes 1% of the aggregate brokerage commissions paid by Berger Small
Company Growth Fund and less than 1% of the aggregate dollar amount of
transactions placed by Berger Small Company Growth Fund.

                   The Fund's advisor places securities orders with a limited
number of major institutional brokerage firms chosen for the reliability and
quality of execution; commission rates; quality of research coverage of major
U.S. companies, the U.S. economy and the securities markets; promptness; back
office capabilities; capital strength and financial stability; prior performance
in serving the advisor and its clients; and knowledge of other buyers and
sellers. The advisor selects the broker for each order based on the factors
above, as well as the size, difficulty and other characteristics of the order.
The trustees of the Fund have also authorized sales of shares of the Fund by a
broker-dealer and the recommendations of a broker-dealer to its customers that
they purchase Fund shares to be considered as factors in the selection of
broker-dealers to execute portfolio transactions for the Fund. In addition, the
advisor may also consider payments made by brokers to the Fund or to other
persons on behalf of the Fund for services provided to the Fund for which it
would otherwise be obligated to pay, such as transfer agency fees. In placing
portfolio business with any such broker or dealer, the advisor of the Fund will
seek the best execution of each transaction.

7.                 HOW TO PURCHASE AND REDEEM SHARES IN THE FUND

                   Minimum Initial Investment                           $250,000

                   Institutional Shares in the Fund may be purchased at the
relevant net asset value without a sales charge. The minimum initial investment
for Institutional Shares of the Fund is $250,000.

                   To purchase shares in the Fund, simply complete the
application form enclosed with the Prospectus. Then mail it with a check payable
to "Berger Funds" to the following address:

                   Berger Funds
                   P.O. Box 219958
                   Kansas City, MO  64121

                   Payment for shares purchased may be made by wire, electronic
funds transfer or mail. All purchase orders are effected at the relevant net
asset value per share of the Fund next determined after receipt of the purchase
order, completed application and payment. A purchase order, together with
payment in proper form, received by the Fund, its authorized agent or designee
prior to the close of the New York Stock Exchange (the "Exchange") on a day the
Fund is open for business will be effected at that day's net asset value. An
order received after that time will be effected at the net asset value
determined on the next business day.


                   Additional investments may be made at any time by mail or
telephone (1-800-960-8427) at the relevant net asset value by calling or writing
the Fund and making payment by wire or electronic funds transfer as outlined
above.


                   In addition, Fund shares may be purchased through certain
broker-dealers that have established mutual fund programs and certain other
organizations connected with pension and retirement plans. These broker-dealers
and other organizations may charge investors a transaction or other fee for
their services, may require different minimum initial and subsequent investments
than the Fund and may impose other charges or restrictions different from those
applicable to shareholders who invest in the Fund directly. Fees charged by
these organizations will have the effect of reducing a shareholder's total
return on an investment in Fund shares. No such charge will apply to an investor
who purchases Fund shares directly from the Fund as described above.


                   Procedures for purchasing, selling (redeeming) and exchanging
Fund shares by telephone are described in the Prospectus. The Fund may terminate
or modify those procedures and related requirements at any time, although
shareholders of the Fund will be given notice of any termination or material
modification. Berger LLC may, at its own risk, waive certain of those procedures
and related requirements.



                                      -27-
<PAGE>   311


8.                 HOW THE NET ASSET VALUE IS DETERMINED


                   The net asset value of the Fund is determined once daily, at
the close of the regular trading session of the New York Stock Exchange (the
"Exchange") (normally 4:00 p.m., Eastern time, Monday through Friday) each day
that the Exchange is open. The Exchange is closed and the net asset value of the
Fund is not determined on weekends and on New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day each year.


                   The per share net asset value of the Institutional Shares is
determined by dividing the Institutional Shares' pro rata portion of the total
value of the Fund's securities and other assets, less the Institutional Shares'
pro rata portion of the Fund's liabilities and the liabilities attributable to
the Institutional Shares, by the total number of Institutional Shares
outstanding. Since net asset value for the Fund is calculated by class, and
since the Institutional Shares and each other class of the Fund has its own
expenses, the per share net asset value of the Fund will vary by class.

                   In determining net asset value, securities listed or traded
primarily on national exchanges, The Nasdaq Stock Market and foreign exchanges
are valued at the last sale price on such markets, or, if such a price is
lacking for the trading period immediately preceding the time of determination,
such securities are valued at the mean of their current bid and asked prices.
Securities that are traded in the over-the-counter market are valued at the mean
between their current bid and asked prices. The market value of individual
securities held by the Fund will be determined by using prices provided by
pricing services which provide market prices to other mutual funds or, as
needed, by obtaining market quotations from independent broker/dealers.
Short-term money market securities maturing within 60 days are valued on the
amortized cost basis, which approximates market value. All assets and
liabilities initially expressed in terms of non-U.S. dollar currencies are
translated into U.S. dollars at the prevailing market rates as quoted by one or
more banks or dealers shortly before the close of the Exchange. Securities and
assets for which quotations are not readily available or are not representative
of market value may be valued at their fair value determined in good faith
pursuant to consistently applied procedures established by the trustees.
Examples would be when events occur that materially affect the value of a
security at a time when the security is not trading or when the securities are
illiquid.

                   Generally, trading in foreign securities markets is
substantially completed each day at various times prior to the close of the
Exchange. The values of foreign securities used in computing the net asset value
of the shares of the Fund are determined as of the earlier of such market close
or the closing time of the Exchange. Occasionally, events affecting the value of
such securities may occur between the times at which they are determined and the
close of the Exchange, or when the foreign market on which such securities trade
is closed but the Exchange is open, which will not be reflected in the
computation of net asset value. If during such periods, events occur which
materially affect the value of such securities, the securities may be valued at
their fair value as determined in good faith pursuant to consistently applied
procedures established by the trustees.

                   The Fund's securities may be listed primarily on foreign
exchanges or over-the-counter dealer markets which may trade on days when the
Exchange is closed (such as a customary U.S. holiday) and on which the Fund's
net asset value is not calculated. As a result, the net asset value of the Fund
may be significantly affected by such trading on days when shareholders cannot
purchase or redeem shares of the Fund.

9.                 INCOME DIVIDENDS, CAPITAL GAINS
                   DISTRIBUTIONS AND TAX TREATMENT

                   This discussion summarizes certain U.S. federal income tax
issues relating to the Fund. As a summary, it is not an exhaustive discussion of
all possible tax ramifications. Accordingly, shareholders are urged to consult
with their tax advisors with respect to their particular tax consequences.


                                      -28-
<PAGE>   312


                   TAX STATUS OF THE FUND. If the Fund meets certain investment
and distribution requirements, it will be treated as a "regulated investment
company" (a "RIC") under the Internal Revenue Code and will not be subject to
federal income tax on earnings that it distributes in a timely manner to
shareholders. It also may be subject to an excise tax on undistributed income if
it does not meet certain timing requirements for distributions. The Fund intends
to qualify as a RIC annually and to make timely distributions in order to avoid
income and excise tax liabilities.

                   TAX ON FUND DISTRIBUTIONS. With certain exceptions provided
by law, the Fund will report annually to the Internal Revenue Service and to
each shareholder information about the tax treatment of the shareholder's
distributions. Dividends paid by the Fund, whether received in cash or
reinvested in additional Fund shares, will be treated as ordinary income to the
shareholders. Distributions of net capital gain, whether received in cash or
reinvested in Fund shares, will be taxable to the shareholders, but the rate of
tax will vary depending upon the Fund's holding periods in the assets whose sale
resulted in the capital gain. Dividends and distributions that are declared in
October, November or December but not distributed until the following January
will be considered to be received by the shareholders on December 31.

                   In general, net capital gains from assets held by the Fund
for more than 12 months will be subject to a maximum tax rate of 20% and net
capital gains from assets held for 12 months or less will be taxed as ordinary
income. Distributions will be subject to these capital gains rates, regardless
of how long a shareholder has held Fund shares. Assets contributed to the Fund
in an in-kind purchase of Fund shares may generate more gain upon their sale
than if the assets had been purchased by the Fund with cash contributed to the
Fund in a cash purchase of Fund shares.

                   If the Fund's distributions for a taxable year exceeds its
tax earnings and profits available for distribution, all or a portion of its
distributions may be treated as a return of capital. To the extent a
distribution is treated as a return of capital, a shareholder's basis in his or
her Fund shares will be reduced by that amount.


                  If a shareholder has elected to receive dividends and/or
capital gain distributions in cash and the U.S. Postal Service is unable to
deliver checks to the shareholder's address of record, or if a shareholder's
checks remain uncashed for six months, the Fund reserves the right to reinvest
the amount distributed in shares of the applicable Fund at the NAV next computed
after the check is cancelled, and to convert the shareholder's distribution
option from receiving cash to having all dividend and other distributions
reinvested in additional shares. In addition, no interest will accrue on amounts
represented by uncashed distribution or redemption checks.

                  Additionally, the Funds reserve the right to reinvest
distributions of less than $10 in shares of the applicable Fund at the NAV next
computed.


                   TAX ON REDEMPTIONS OF FUND SHARES. Shareholders may be
subject to tax on the redemption of their Fund shares. In general, such
redemptions may give rise to a capital gain or loss, the treatment of which will
depend on the shareholder's holding period in the Fund shares. Tax laws may
prevent the deduction of a loss on the sale of Fund shares if the shareholder
reinvests in the Fund shortly before or after the sale giving rise to the loss.
Any loss on the redemption or other sale or exchange of Fund shares held for six
months or less will be treated as a long-term capital loss to the extent of any
long-term capital gain distribution received on the shares.

                   INCOME FROM FOREIGN SOURCES. Dividends and interest received
by the Fund on foreign securities may give rise to withholding and other taxes
imposed by foreign countries, although these taxes may be reduced by applicable
tax treaties. Foreign taxes will generally be treated as expenses of the Fund,
unless the Fund has more than 50% of its assets invested in foreign corporate
securities at the end of the Fund's taxable year. In that case, if the Fund
makes an election, shareholders of the Fund may be able to deduct (as an
itemized deduction) or claim a foreign tax credit for their share of foreign
taxes, subject to limitations prescribed in the tax law.


                                      -29-
<PAGE>   313


                   If the Fund invests in a foreign corporation that is a
passive foreign investment company (a "PFIC"), special rules apply that may
affect the tax treatment of gains from the sale of the stock and may cause the
Fund to incur IRS tax and interest charges. However, the Fund may be eligible to
elect one of two alternative tax treatments with respect to PFIC shares which
would avoid these taxes and charges, but also may affect, among other things,
the amount and character of gain or loss and the timing of the recognition of
income with respect to PFIC shares. Accordingly, the amounts, character and
timing of income distributed to shareholders of the Fund holding PFIC shares may
differ substantially as compared to a fund that did not invest in PFIC shares.

                   INCOME FROM CERTAIN TRANSACTIONS. Some or all of the Fund's
investments may include transactions that are subject to special tax rules.
Transactions involving foreign currencies may give rise to gain or loss that
could affect the Fund's ability to make ordinary dividend distributions.
Investment in certain financial instruments, such as options, futures contracts
and forward contracts, may require annual recognition of unrealized gains and
losses. Transactions that are treated as "straddles" may affect the character
and/or timing of other gains and losses of the Fund. If the Fund enters into a
transaction (such as a "short sale against the box") that reduces the risk of
loss on an appreciated financial position that it already holds, the entry into
the transaction may constitute a constructive sale and require immediate
recognition of gain.

                   BACKUP WITHHOLDING. In general, if a shareholder is subject
to backup withholding, the Fund will be required to withhold federal income tax
at a rate of 31% from distributions to that shareholder. These payments are
creditable against the shareholder's federal income tax liability.

                  FOREIGN SHAREHOLDERS. Foreign shareholders of the Fund
generally will be subject to a 30% U.S. withholding tax on dividends paid by the
Fund from ordinary income and short-term capital gain, although the rate may be
reduced by a tax treaty. If a foreign shareholder dies while owning Fund shares,
those shares may be subject to U.S. estate taxes.

10.                SUSPENSION OF REDEMPTION RIGHTS

                   The right of redemption may be suspended for any period
during which the New York Stock Exchange is closed or the Securities and
Exchange Commission determines that trading on the Exchange is restricted, or
when there is an emergency as determined by the Securities and Exchange
Commission as a result of which it is not reasonably practicable for the Fund to
dispose of securities owned by it or to determine the value of its net assets,
or for such other period as the Securities and Exchange Commission may by order
permit for the protection of shareholders of the Fund.

                   The Fund intends to redeem its shares only for cash, although
it retains the right to redeem its shares in-kind under unusual circumstances,
in order to protect the interests of the remaining shareholders, by the delivery
of securities selected from its assets at its discretion. The Fund is, however,
governed by Rule 18f-1 under the Investment Company Act of 1940 pursuant to
which the Fund is obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the net assets of the Fund during any 90-day period for any
one shareholder. For purposes of this threshold, each underlying account holder
whose shares are held of record in certain omnibus accounts is treated as one
shareholder. Should redemptions by any shareholder during any 90-day period
exceed such limitation, the Fund will have the option of redeeming the excess in
cash or in-kind. If shares are redeemed in-kind, the redeeming shareholder
generally will incur brokerage costs in converting the assets to cash. The
redeeming shareholder may have difficulty selling the securities and recovering
the amount of the redemption if the securities are illiquid. The method of
valuing securities used to make redemption in-kind will be the same as the
method of valuing portfolio securities described under Section 8.

11.                TAX-SHELTERED RETIREMENT PLANS

                   The Fund offers several tax-qualified retirement plans for
individuals, businesses and nonprofit organizations. For information about
establishing an IRA, Roth IRA, profit-sharing or money purchase pension plan,
403(b) Custodial Account, SEP-IRA, SIMPLE IRA account or other retirement plans,
please call 1-800-259-2820 or write to the Berger Funds c/o Berger LLC, P.O. Box
5005, Denver,


                                      -30-
<PAGE>   314


CO 80217. Trustees for existing 401(k) or other plans interested in using Fund
shares as an investment or investment alternative in their plans are invited to
call the Fund at 1-800-259-2820.

                   The Fund also offers an Automatic Investment Plan (minimum
$50 per month) and a Systematic Withdrawal Plan (minimum of $50 withdrawn
monthly, quarterly, semiannually or annually). Forms for these plans may be
obtained by writing to the Fund, c/o DST Systems, Inc., P.O. Box 219958, Kansas
City, MO 64121, or call 1-800-960-8427.

12.                EXCHANGE PRIVILEGE


                   Any shareholder may exchange any or all of the shareholder's
shares in the Fund, subject to stated minimums, for shares of any of the other
available Berger Funds, without charge, after receiving a current prospectus of
the other fund. Exchanges into or out of the Fund are made at the net asset
value per share next determined after the exchange request is received. Each
exchange represents the sale of shares from one fund and the purchase of shares
in another, which may produce a gain or loss for federal income tax purposes. An
exchange of shares may be made by written request directed to DST Systems, Inc.
or by telephoning the Fund at 1-800-960-8427. This privilege may be terminated
or amended by the Fund, and is not available in any state in which the shares of
the Berger Fund being acquired in the exchange are not eligible for sale.
Shareholders automatically have telephone transaction privileges to authorize
exchanges unless they specifically decline this service in the account
application or in writing.


13.                PERFORMANCE INFORMATION


                   From time to time in advertisements, the Fund may discuss its
performance ratings as published by recognized mutual fund statistical services,
such as Lipper Analytical Services, Inc., CDA Investment Technologies, Inc.,
Morningstar, Inc., or Value Line Investment Survey or by publications of general
interest such as The Wall Street Journal, Investor's Business Daily, Money,
Barron's, Financial World or Kiplinger's Personal Finance Magazine. In addition,
the Fund may compare its performance to that of recognized broad-based
securities market indices, including the Wilshire 5000 Index, the Standard &
Poor's 500 Stock Index, the Dow Jones Industrial Average, the Russell 1000 Value
Index, the Russell 2000 Stock Index, the Standard & Poor's 400 Mid-Cap Index,
the Standard & Poor's 600 Small Cap Index, Morgan Stanley Capital International
EAFE (Europe, Australasia, Far East) Index, the Dow Jones World Index, the
Standard & Poor's/BARRA Value Index, the Nasdaq Composite Index, the Lehman
Brothers Intermediate Term Government/Corporate Bond Index or the
InformationWeek 100 Index, or more narrowly-based or blended indices which
reflect the market sectors in which the Fund invests.


                   The total return of the Fund is calculated for any specified
period of time by assuming the purchase of shares of the Fund at the net asset
value at the beginning of the period. Each dividend or other distribution paid
by the Fund is assumed to have been reinvested at the net asset value on the
reinvestment date. The total number of shares then owned as a result of this
process is valued at the net asset value at the end of the period. The
percentage increase is determined by subtracting the initial value of the
investment from the ending value and dividing the remainder by the initial
value.

                   The Fund's total return reflects the Fund's performance over
a stated period of time. An average annual total return reflects the
hypothetical annually compounded return that would have produced the same total
return if the Fund's performance had been constant over the entire period. Total
return figures are based on the overall change in value of a hypothetical
investment in the Fund. Because average annual total returns for more than one
year tend to smooth out variations in the Fund's return, investors should
recognize that such figures are not the same as actual year-by-year results.

                   All performance figures for the Fund are based upon
historical results and do not assure future performance. The investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.


                                      -31-
<PAGE>   315


                   Quotations of average annual total return for the Fund will
be expressed in terms of the average annual compounded rate of return of a
hypothetical investment in the Fund over periods of 1, 3, 5 and 10 years, or for
the life of the Fund, if shorter. These are the rates of return that would
equate the initial amount invested to the ending redeemable value. These rates
of return are calculated pursuant to the following formula: P(1 + T)n = ERV
(where P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years and ERV = the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the period). All total
return figures reflect the deduction of a proportional share of Fund expenses on
an annual basis, and assume that all dividends and distributions are reinvested
when paid.

PREDECESSOR PERFORMANCE QUOTATIONS

                   Shares of the Fund had no class designations until July 6,
1999, when all of the then-existing shares were designated as Investor Shares
and the Institutional Shares class of the Fund covered in this Statement of
Additional Information was established. The Institutional Shares class of the
Fund commenced investment operations on October 16, 1999. Performance data for
the Institutional Shares include periods prior to the commencement of investment
operations of the Institutional Shares class on that date, and therefore reflect
a 0.25% per year 12b-1 fee applicable to the Investor Shares that is not paid by
the Institutional Shares. Total return of the Institutional Shares and other
classes of shares of the Fund will be calculated separately. Because each class
of shares is subject to different expenses, the performance of each class for
the same period will differ.


AVERAGE ANNUAL TOTAL RETURNS


                   The average annual total return for the Fund for various
periods ending September 30, 2000, are shown on the following table:



<TABLE>
<CAPTION>
FUND                              1-YEAR          3-YEAR       5-YEAR        10-YEAR      LIFE OF FUND
----                              ------          ------       ------        -------      ------------
<S>                               <C>             <C>          <C>           <C>          <C>
Berger Small Company Growth       _____%          _____%       _____%        N/A          _____%
Fund(1)                                                                                   (since 12/30/93)
</TABLE>


(1) Performance data reflects a 0.25% 12b-1 fee not paid by the Institutional
Shares.

14.                ADDITIONAL INFORMATION

FUND ORGANIZATION

                   The Fund is a separate series of the Berger Investment
Portfolio Trust (the "Trust"), a Delaware business trust established under the
Delaware Business Trust Act. The Fund was established on August 23, 1993. The
name "Berger Small Company Growth Fund(R)" was registered as a service mark in
September 1995. The Berger Small Company Growth Fund had no class designations
until July 6, 1999, when all of the then-existing shares were designated as
Investor Shares, which are covered in a separate Prospectus and Statement of
Additional Information, and the Fund commenced offering the class known as
Institutional Shares covered in this Statement of Additional Information.

                   The Trust is authorized to issue an unlimited number of
shares of beneficial interest in series or portfolios. Currently, the Fund is
one of seven series established under the Trust, although others may be added in
the future. The Trust is also authorized to establish multiple classes of shares
representing differing interests in an existing or new series. The Fund
currently has two classes of shares, although others may be added in the future.


                                      -32-
<PAGE>   316


                   Shares of the Fund are fully paid and nonassessable when
issued. Each share has a par value of $.01. All shares issued by the Fund
participate equally in dividends and other distributions by the Fund, and in the
residual assets of the Fund in the event of its liquidation.

                   DELAWARE BUSINESS TRUST INFORMATION. Under Delaware law,
shareholders of the Fund will enjoy the same limitations on personal liability
as extended to stockholders of a Delaware corporation. Further, the Trust
Instrument of the Trust provides that no shareholder shall be personally liable
for the debts, liabilities, obligations and expenses incurred by, contracted for
or otherwise existing with respect to, the Trust or any particular series (fund)
of the Trust. However, the principles of law governing the limitations of
liability of beneficiaries of a business trust have not been authoritatively
established as to business trusts organized under the laws of one jurisdiction
but operating or owning property in other jurisdictions. In states that have
adopted legislation containing provisions comparable to the Delaware Business
Trust Act, it is believed that the limitation of liability of beneficial owners
provided by Delaware law should be respected. In those jurisdictions that have
not adopted similar legislative provisions, it is possible that a court might
hold that the shareholders of the Trust are not entitled to the limitations of
liability set forth in Delaware law or the Trust Instrument and, accordingly,
that they may be personally liable for the obligations of the Trust.

                   In order to protect shareholders from such potential
liability, the Trust Instrument requires that every written obligation of the
Trust or any series thereof contain a statement to the effect that such
obligation may only be enforced against the assets of the Trust or such series.
The Trust Instrument also provides for indemnification from the assets of the
relevant series for all losses and expenses incurred by any shareholder by
reason of being or having been a shareholder, and that the Trust shall, upon
request, assume the defense of any such claim made against such shareholder for
any act or obligation of the relevant series and satisfy any judgment thereon
from the assets of that series.

                   As a result, the risk of a shareholder of the Fund incurring
financial loss on account of shareholder liability is limited to circumstances
in which the Fund itself would be unable to meet its obligations. The Trust
believes that the risk of personal liability to shareholders of the Fund is
therefore remote. The trustees intend to conduct the operations of the Trust and
the Fund so as to avoid, to the extent possible, liability of shareholders for
liabilities of the Trust or the Fund.

                   CORPORATE GOVERNANCE INFORMATION PERTAINING TO THE FUND. The
Fund is not required to hold annual shareholder meetings unless required by the
Investment Company Act of 1940 or other applicable law or unless called by the
trustees. If shareholders owning at least 10% of the outstanding shares of the
Trust so request, a special shareholders' meeting of the Trust will be held for
the purpose of considering the removal of a trustee. Special meetings will be
held for other purposes if the holders of at least 25% of the outstanding shares
of the Trust so request. Subject to certain limitations, the Trust will
facilitate appropriate communications by shareholders desiring to call a special
meeting for the purpose of considering the removal of a trustee.

                   Shareholders of the Fund and, where applicable, the other
series/classes of the Trust, generally vote separately on matters relating to
those respective series/classes, although they vote together and with the
holders of any other series/classes of the Trust in the election of trustees of
the Trust and on all matters relating to the Trust as a whole. Each full share
of the Fund has one vote.

                   Shares of the Fund have non-cumulative voting rights, which
means that the holders of more than 50% of the shares voting for the election of
trustees can elect 100% of the trustees if they choose to do so and, in such
event, the holders of the remaining less than 50% of the shares voting for the
election of trustees will not be able to elect any person or persons as
trustees.

                   Shares of the Fund have no preemptive rights. There are no
sinking funds or arrearage provisions which may affect the rights of the Fund
shares. Fund shares have no subscription rights or conversion rights, except
that shareholders of any class of the Fund may convert their shares into shares
of any other class of the Fund in the event and only in the event the
shareholder ceases to be eligible to purchase or hold shares of the original
class, or becomes eligible to purchase shares of a different class,


                                      -33-
<PAGE>   317


by reason of a change in the shareholder's status under the conditions of
eligibility in effect for such class at that time. Shares of the Fund may be
transferred by endorsement, or other customary methods, but the Fund is not
bound to recognize any transfer until it is recorded on its books.

                   Under governing corporate law, the Fund may enter into a
variety of corporate transactions, such as reorganizations, conversions, mergers
and asset transfers, or may be liquidated. Any such transaction would be subject
to a determination from the trustees that the transaction was in the best
interests of the Fund and its shareholders, and may require obtaining
shareholder approval.

MORE INFORMATION ON SPECIAL MULTI-CLASS FUND STRUCTURE

                   The Fund currently has divided its shares into two classes of
shares, the Institutional Shares covered by this SAI and the Investor Shares
offered through a separate Prospectus and SAI. The Fund implemented its
multi-class structure by adopting a Rule 18f-3 Plan under the 1940 Act
permitting it to issue its shares in classes. The Fund's Rule 18f-3 Plan governs
such matters as class features, dividends, voting, allocation of income and
expenses between classes, exchange and trustee monitoring of the Plan. Each
class is subject to such investment minimums and other conditions of eligibility
as are set forth in the relevant prospectus for the class, as it may be amended
from time to time. Investor Shares are available to the general public and bear
a 0.25% 12b-1 fee. Information concerning Investor Shares is available from the
Fund at 1-800-333-1001.

                    Subject to the Trust's Trust Instrument and any other
applicable provisions, the trustees of the Trust have the authority to create
additional classes, or change existing classes, from time to time, in accordance
with Rule 18f-3 under the Act.

PRINCIPAL SHAREHOLDERS


                   Insofar as the management of the Fund is aware, as of
December 29, 2000, no person owned, beneficially or of record, more than 5% of
the outstanding Institutional Shares of the Fund, except for the following:



<TABLE>
<CAPTION>
Owner                                    Fund                                                   Percentage
-----                                    ----                                                   ----------
<S>                                      <C>                                                    <C>
Charles Schwab & Co. Inc. ("Schwab")     Berger Small Company Growth Fund                       _____%
101 Montgomery Street
San Francisco, CA 94104

Herbert L. Wittow Tr.                    Berger Small Company Growth Fund                       _____%
4600 S. Ulster Street
Denver, CO  80237
</TABLE>


                   In addition, as of that date, Schwab owned of record 24.80%
of the Investor Shares class of the Fund, which together with its Institutional
Shares, constitute 24.81% of the Fund's total outstanding shares. Also as of
that date, Schwab owned of record 26.08% of all the outstanding shares of the
Berger Investment Portfolio Trust, of which the Fund is one outstanding series.


                                      -34-
<PAGE>   318


                   Any person owning more than 25% of the outstanding securities
of the Fund may be deemed to control it. Schwab is believed to hold its shares
of the Fund as nominee for the benefit of its clients or customers.

DISTRIBUTION


                  Berger Distributors LLC, as the Fund's Distributor, is the
principal underwriter of the Fund's shares. The Distributor is a wholly-owned
subsidiary of Berger LLC. The Distributor is a registered broker-dealer under
the Securities Exchange Act of 1934 and is a member of the National Association
of Securities Dealers, Inc. The Distributor acts as the agent of the Fund in
connection with the sale of the Fund's shares in all states in which the shares
are eligible for sale and in which the Distributor is qualified as a
broker-dealer. David J. Schultz, Chief Financial Officer, Assistant Secretary
and Treasurer of the Distributor, is also Vice President and Treasurer of the
Fund. Janice M. Teague, Vice President and Secretary of the Distributor, is also
Vice President and Assistant Secretary of the Fund. Brian Ferrie, Vice President
and Chief Compliance Officer of the Distributor, is also Vice President of the
Fund. Sue Vreeland, Assistant Secretary of the Distributor, is also Secretary of
the Fund.


                   The Fund and the Distributor are parties to a Distribution
Agreement that continues through April 2000, and thereafter from year to year if
such continuation is specifically approved at least annually by the trustees or
by vote of a majority of the outstanding shares of the Fund and in either case
by vote of a majority of the trustees who are not "interested persons" (as that
term is defined in the Investment Company Act of 1940) of the Fund or the
Distributor. The Distribution Agreement is subject to termination by the Fund or
the Distributor on 60 days' prior written notice, and terminates automatically
in the event of its assignment. Under the Distribution Agreement, the
Distributor continuously offers shares of the Fund and solicits orders to
purchase Fund shares at net asset value. The Distributor is not compensated for
its services under the Distribution Agreement, but may be reimbursed by Berger
LLC for its costs in distributing Fund shares.

OTHER INFORMATION

                   The Trust has filed with the Securities and Exchange
Commission, Washington, D.C., a Registration Statement under the Securities Act
of 1933, as amended, with respect to the securities of the Fund of which this
Statement of Additional Information is a part. If further information is desired
with respect to the Fund or such securities, reference is made to the
Registration Statement and the exhibits filed as a part thereof.

                  Davis, Graham & Stubbs LLP, 1550 Seventeenth Street, Suite
500, Denver, Colorado, acts as counsel to the Fund.

INDEPENDENT ACCOUNTANTS




                  [TO BE UPDATED]

                                      -35-
<PAGE>   319

FINANCIAL INFORMATION



                                 [TO BE UPDATED]


                   The above-referenced Annual Report is enclosed with a copy of
this SAI. Additional copies of those Reports may be obtained upon request
without charge by calling the Fund at 1-800-259-2820.


                                      -36-
<PAGE>   320


                                   APPENDIX A

HIGH-YIELD/HIGH-RISK SECURITIES

         The Fund may invest in convertible securities of any quality, including
unrated securities or securities rated below investment grade (Ba or lower by
Moody's, BB or lower by S&P) (sometimes referred to as "junk bonds"). However,
the Fund will not purchase any security in default at the time of purchase. The
Fund will not invest more than 20% of the market value of its assets at the time
of purchase in convertible securities rated below investment grade.

         Securities rated below investment grade are subject to greater risk
that adverse changes in the financial condition of their issuers or in general
economic conditions, or an unanticipated rise in interest rates, may impair the
ability of their issuers to make payments of interest and principal or
dividends. The market prices of lower grade securities are generally less
sensitive to interest rate changes than higher-rated investments, but more
sensitive to economic changes or individual corporate developments. Periods of
economic uncertainty and change can be expected to result in volatility of
prices of these securities. Lower rated securities also may have less liquid
markets than higher rated securities, and their liquidity as well as their value
may be adversely affected by poor economic conditions. Adverse publicity and
investor perceptions as well as new or proposed laws may also have a negative
impact on the market for high-yield/high-risk bonds. In the event of an
unanticipated default, the Fund will experience a reduction in its income and
could expect a decline in the market value of the securities affected. The
prices of these securities may be more volatile and the markets for them may be
less liquid than those for higher-rated securities.

         Unrated securities, while not necessarily of lower quality than rated
securities, may not have as broad a market. Unrated securities will be included
in the Fund's percentage limits for investments rated below investment grade,
unless the Fund's advisor deems such securities to be the equivalent of
investment grade. If securities purchased by the Fund are downgraded following
purchase, or if other circumstances cause the Fund to exceed its percentage
limits on assets invested in securities rated below investment grade, the
trustees of the Fund, in consultation with the Fund's advisor, will determine
what action, if any, is appropriate in light of all relevant circumstances.

         Relying in part on ratings assigned by credit agencies in making
investments will not protect the Fund from the risk that the securities will
decline in value, since credit ratings represent evaluations of the safety of
principal, dividend and/or interest payments, and not the market values of such
securities. Moreover, such ratings may not be changed on a timely basis to
reflect subsequent events.

         Although the market for high-yield debt securities has been in
existence for many years and from time to time has experienced economic
downturns, this market has involved a significant increase in the use of
high-yield debt securities to fund highly leverage corporate acquisitions and
restructurings. Past experience may not, therefore, provide an accurate
indication of future performance of the high-yield debt securities market,
particularly during periods of economic recession.

         Expenses incurred in recovering an investment in a defaulted security
may adversely affect the Fund's net asset value. Moreover, the reduced liquidity
of the secondary market for such securities may adversely affect the market
price of, and the ability of the Fund to value, particular securities at certain
times, thereby making it difficult to make specific valuation determinations.



CORPORATE BOND RATINGS

         The ratings of fixed-income securities by Moody's and Standard & Poor's
are a generally accepted measurement of credit risk. However, they are subject
to certain limitations. Ratings are generally based upon historical events and
do not necessarily reflect the future. In addition, there is a


                                      -37-
<PAGE>   321


period of time between the issuance of a rating and the update of the rating,
during which time a published rating may be inaccurate.

KEY TO MOODY'S CORPORATE RATINGS

         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 generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.

         A-Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.

         Baa-Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.

         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 good and bad times over the future. Uncertainty of position
characterizes bonds of this class.

         B-Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.

         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 Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic category.

KEY TO STANDARD & POOR'S CORPORATE RATINGS

         AAA-Debt rated AAA has the highest rating assigned by Standard &
Poor's. 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 the higher rated issues only in small degree.


                                      -38-
<PAGE>   322


         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
debt in this category than 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 will likely have some quality and protective characteristics, these
are out-weighed by the large uncertainties or major risk exposures to adverse
conditions.

         C1-The rating C1 is reserved for income bonds on which no interest is
being paid.

         D-Debt rated D is in default, and payment of interest and/or repayment
of principal is in arrears.

         PLUS (+) OR MINUS (-)-The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.

                                      -39-
<PAGE>   323

                        BERGER INVESTMENT PORTFOLIO TRUST

PART C. OTHER INFORMATION

Item 23. Exhibits

     The Exhibit Index following the signature pages below is incorporated
herein by reference.

Item 24. Persons Controlled by or Under Common Control With Registrant

     None.

Item 25. Indemnification

     Article IX, Section 2 of the Trust Instrument for Berger Investment
Portfolio Trust (the "Trust"), of which the Fund is a series, provides for
indemnification of certain persons acting on behalf of the Trust to the fullest
extent permitted by the law. In general, trustees, officers, employees and
agents will be indemnified against liability and against all expenses incurred
by them in connection with any claim, action, suit or proceeding (or settlement
thereof) in which they become involved by virtue of their Trust office, unless
their conduct is determined to constitute willful misfeasance, bad faith, gross
negligence or reckless disregard of their duties, or unless it has been
determined that they have not acted in good faith in the reasonable belief that
their actions were in or not opposed to the best interests of the Trust. The
Trust also may advance money for these expenses, provided that the trustees,
officers, employees or agents undertake to repay the Trust if their conduct is
later determined to preclude indemnification. The Trust has the power to
purchase insurance on behalf of its trustees, officers, employees and agents,
whether or not it would be permitted or required to indemnify them for any such
liability under the Trust Instrument or applicable law, and the Trust has
purchased and maintains an insurance policy covering such persons against
certain liabilities incurred in their official capacities.


     The business of Perkins, Wolf, McDonnell & Company ("PWM"), sub-advisor to
the Berger Mid Cap Value Fund, is also described in the Prospectus and in
Section 4 of the Statement of Additional Information. Information relating to
the business and other connections of the officers and directors of PWM (current
and for the past two years) is listed in Schedule A and D of PWM's Form ADV
(File No. 801-19974), as filed with the Securities and Exchange Commission on
March 28, 2000, which information from such schedules is incorporated herein by
reference.


Item 26. Business and Other Connections of Investment Adviser


     The business of Berger LLC, the investment adviser of the Fund, is
described in the Prospectus under the heading "Organization of the Berger Funds
Family -- Investment Managers" and in the Statement of Additional Information in
Section 4, which are included in this Registration Statement. Information
relating to the business and other connections of the officers and directors of
Berger Associates (current and for the past two years) is listed in Schedules A
and D of Berger LLC's Form ADV as filed with the Securities and Exchange
Commission (File No. 801-9451, dated August 23, 2000), which information from
such schedules is incorporated herein by reference.


                                      C-1

<PAGE>   324


Item 27. Principal Underwriters

     (a) Investment companies for which the Fund's principal underwriter also
acts as principal underwriter, depositor or investment adviser:


Berger Growth Fund,Inc.
Berger Growth and Income Fund, Inc.
Berger Investment Portfolio Trust
--Berger Small Company Growth Fund
--Berger New Generation Fund
--Berger Balanced Fund
--Berger Select Fund
--Berger Mid Cap Growth Fund
--Berger Mid Cap Value Fund
--Berger Information Technology Fund
Berger Omni Investment Trust
--Berger Small Cap Value Fund
Berger Institutional Products Trust
--Berger IPT - Growth Fund
--Berger IPT - Growth and Income Fund
--Berger IPT - Small Company Growth Fund
--Berger IPT - International Fund
--Berger IPT - New Generation Fund
Berger Worldwide Funds Trust
--Berger International Fund
--International Equity Fund
--Berger International CORE Fund


     (b) For Berger LLC:


<TABLE>
<CAPTION>
                                            Positions and                           Positions and
                                            Offices with                            Offices with
     Name                                    Underwriter                             Registrant
     ----                                    -----------                             ----------

<S>                                <C>                                       <C>
David G. Mertens                   President and CEO                         None

David J. Schultz                   Chief  Financial Officer,                 Vice President and Treasurer
                                   Assistant Secretary and
                                   Treasurer

Brian Ferrie                       Vice President and Chief Compliance       Vice President
                                   Officer

Janice M. Teague                   Vice President and Secretary              Vice President and Assistant Secretary

Sue Vreeland                       Assistant Secretary                       Secretary
</TABLE>


                                      C-2

<PAGE>   325


     The principal business address of each of the persons in the table above is
210 University Blvd., Suite 900, Denver, CO 80206.

     (c) Not applicable.

Item 28. Location of Accounts and Records

     The accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the rules promulgated thereunder are
maintained as follows:


     (a)  Shareholder records are maintained by the Registrant's transfer agent,
          DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141;

     (b)  Accounting records relating to cash and other money balances; asset,
          liability, reserve, capital, income and expense accounts; portfolio
          securities; purchases and sales; and brokerage commissions are
          maintained by the Registrant's Recordkeeping and Pricing Agent, State
          Street Bank and Trust Company ("State Street"), 801 Pennsylvania,
          Kansas City, Missouri 64105. Other records of the Registrant relating
          to purchases and sales; the Declaration of Trust; minute books and
          other trust records; brokerage orders; performance information and
          other records are maintained at the offices of the Registrant at 210
          University Boulevard, Suite 900, Denver, Colorado 80206.

     (c)  Certain records relating to day-to-day portfolio management of the
          Berger Mid Cap Value Fund are kept at the offices of its sub-adviser,
          Perkins, Wolf, McDonnell & Company, 53 West Jackson Boulevard, Suite
          818, Chicago, Illinois 60604.


Item 29. Management Services

     The Registrant has no management-related service contract which is not
discussed in Parts A and B of this form.

Item 30. Undertakings

     Not applicable.

                                       C-3

<PAGE>   326


                                   SIGNATURES


     Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment to
its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City and County of Denver, and State of
Colorado, on the 15th day of November, 2000.


                                       BERGER INVESTMENT PORTFOLIO TRUST
                                       (Registrant)

                                       By /s/ Jack R. Thompson
                                          ------------------------------
                                          Name: Jack R. Thompson
                                                ------------------------
                                          Title: President
                                                 -----------------------

     Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.


<TABLE>
<CAPTION>
       Signature                                        Title                                      Date
       ---------                                        -----                                      ----

<S>                                                <C>                                        <C>
/s/ Jack R. Thompson                               President (Principal                       November 15, 2000
---------------------------------                  Executive Officer)
Jack R. Thompson                                   and Director

/s/ David J. Schultz                               Vice President and                         November 15, 2000
---------------------------------                  Treasurer (Principal
David J. Schultz                                   Financial Officer)

/s/ John Paganelli                                 Assistant Treasurer                        November 15, 2000
---------------------------------                  (Principal Accounting
John Paganelli                                     Officer)

Dennis E. Baldwin*                                 Trustee                                    November 15, 2000
---------------------------------
Dennis E. Baldwin

Louis R. Bindner*                                  Trustee                                    November 15, 2000
---------------------------------
Louis R. Bindner
</TABLE>


                                      C-4

<PAGE>   327



<TABLE>
<S>                                                <C>                                        <C>
Katherine A. Cattanach*                            Trustee                                    November 15, 2000
---------------------------------
Katherine A. Cattanach

Paul R. Knapp*                                     Trustee                                    November 15, 2000
---------------------------------
Paul R. Knapp

Harry T. Lewis, Jr.*                               Trustee                                    November 15, 2000
---------------------------------
Harry T. Lewis, Jr.

Michael Owen*                                      Trustee                                    November 15, 2000
---------------------------------
Michael Owen

William Sinclaire*                                 Trustee                                    November 15, 2000
---------------------------------
William Sinclaire

*By: /s/  Jack R. Thompson
     ----------------------------
Attorney-in-fact
</TABLE>


                                      C-5

<PAGE>   328


                        BERGER INVESTMENT PORTFOLIO TRUST
                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
N-1A                  EDGAR
Exhibit               Exhibit
No.                   No.                     Name of Exhibit
-------               -------                 ---------------

<S>                   <C>                     <C>
(1)     Exhibit       23(a)                   Trust Instrument

(2)     Exhibit       23(b)                   Bylaws
        Exhibit       23(c)                   Not applicable

(3)     Exhibit       23(d)-1                 Form of Investment Advisory Agreement for
                                              Berger Small Company Growth Fund

(31)    Exhibit       23(d)-1a                Form of Amendment to Berger Small Company
                                              Growth Fund Investment Advisory Agreement

(4)     Exhibit       23(d)-2                 Form of Investment Advisory Agreement for
                                              Berger New Generation Fund

(31)    Exhibit       23(d)-2a                Form of Amendment to Berger New Generation
                                              Fund Investment Advisory Agreement

(5)     Exhibit       23(d)-3                 Form of Investment Advisory Agreement for
                                              Berger Balanced Fund

(31)    Exhibit       23(d)-3a                Form of Amendment to Berger Balanced Fund
                                              Investment Advisory Agreement

(6)     Exhibit       23(d)-4                 Form of Investment Advisory Agreement for
                                              Berger Select Fund

(31)    Exhibit       23(d)-4a                Form of Amendment to Berger Select Fund
                                              Investment Advisory Agreement

(7)     Exhibit       23(d)-5                 Form of Investment Advisory Agreement for
                                              Berger Mid Cap Growth Fund

(31)    Exhibit       23(d)-5a                Form of Amendment to Mid Cap Growth  Fund
                                              Investment Advisory Agreement

(8)     Exhibit       23(d)-6                 Form of Investment Advisory Agreement for
                                              Berger Mid Cap Value Fund

(31)    Exhibit       23(d)-6a                Form of Amendment to Mid Cap Value Fund
                                              Investment Advisory Agreement

(9)     Exhibit       23(d)-7                 Form of Sub-Advisory Agreement for Berger
                                              Mid Cap Value Fund

(29)    Exhibit       23(d)-8                 Form of Investment Advisory Agreement for
                                              Berger Information Technology Fund

(31)    Exhibit       23(d)-8a                Form of Amendment to Berger Information
                                              Technology Fund Investment Advisory
                                              Agreement
</TABLE>



<PAGE>   329



<TABLE>
<S>                   <C>                     <C>
(29)    Exhibit       23(d)-9                 Form of Sub-Advisory Agreement for Berger
                                              Information Technology Fund

(10)    Exhibit       23(e)                   Form of Distribution Agreement between the
                                              Trust and Berger LLC
        Exhibit       23(f)                   Not applicable

(11)    Exhibit       23(g)                   Form of Custody Agreement

(12)    Exhibit       23(h)-1                 Form of Administrative Services Agreement
                                              for Berger Small Company Growth Fund

(31)    Exhibit       23(h)-1a                Form of Amendment to Berger Small Company
                                              Growth Fund Administrative Services
                                              Agreement

(13)    Exhibit       23(h)-2                 Form of Administrative Services Agreement
                                              for Berger New Generation Fund

(31)    Exhibit       23(h)-2a                Form of Amendment to Berger New Generation
                                              Fund Administrative Services Agreement

(14)     Exhibit      23(h)-3                 Form of Administrative Services Agreement
                                              for Berger Balanced Fund

(31)     Exhibit      23(h)-3a                Form of Amendment to Berger Balance Fund
                                              Administrative Services Agreement

(15)     Exhibit      23(h)-4                 Form of Administrative Services Agreement
                                              for Berger Select Fund

(31)     Exhibit      23(h)-4a                Form of Amendment to Berger Select Fund
                                              Administrative Services Agreement

(16)     Exhibit      23(h)-5                 Form of Administrative Services Agreement
                                              for Berger Mid Cap Growth Fund

(31)     Exhibit      23(h)-5a                Form of Amendment to Berger Mid Cap Growth
                                              Fund Administrative Services Agreement

(17)     Exhibit      23(h)-6                 Form of Administrative Services Agreement
                                              for Berger Mid Cap Value Fund

(31)     Exhibit      23(h)-6a                Form of Amendment to Mid Cap Value Fund
                                              Administrative Services Agreement

(18)     Exhibit      23(h)-7                 Form of Recordkeeping and Pricing Agent
                                              Agreement

(19)     Exhibit      23(h)-8                 Form of Agency Agreement

(29)     Exhibit      23(h)-9                 Form of Administrative Services Agreement
                                              for the Berger Information Technology Fund

(31)     Exhibit      23(h)-9a                Form of Amendment to Berger Information
                                              Technology Fund Administrative Services
                                              Agreement
</TABLE>



<PAGE>   330



<TABLE>
<S>                   <C>                     <C>
(29)    Exhibit       23(i)-1                 Opinion and consent of Davis, Graham &
                                              Stubbs LLP (relating to the Berger
                                              Information Technology Fund)

(30)    Exhibit       23(i)-2                 Opinion and consent of Davis, Graham &
                                              Stubbs LLP (relating to the Berger New
                                              Generation Fund -- Institutional Shares
                                              and the Berger Small Company Growth Fund
                                              -- Institutional Shares)

*       Exhibit       23(j)-1                 Consent of PricewaterhouseCoopers LLP

(31)    Exhibit       23(j)-2                 Consent of McGladrey & Pullen, LLP
                                              relating to the Berger Information
                                              Technology Fund

        Exhibit       23(k)                   Not applicable

(20)    Exhibit       23(l)                   Investment Letter from Initial Stockholder

(21)    Exhibit       23(m)-1                 Rule 12b-1 Plan for Berger Small Company
                                              Growth Fund

(22)    Exhibit       23(m)-2                 Rule 12b-1 Plan for Berger New Generation
                                              Fund

(23)    Exhibit       23(m)-3                 Rule 12b-1 Plan for Berger Balanced Fund

(24)    Exhibit       23(m)-4                 Rule 12b-1 Plan for Berger Select Fund

(25)    Exhibit       23(m)-5                 Rule 12b-1 Plan for Berger Mid Cap Growth
                                              Fund

(26)    Exhibit       23(m)-6                 Rule 12b-1 Plan for Berger Mid Cap Value
                                              Fund

(29)    Exhibit       23(m)-7                 Rule 12b-1 Plan for the Investor Shares of
                                              the Berger Information Technology Fund

(30)    Exhibit       23(m)-8                 Amended and Restated Rule 12b-1 Plan for
                                              the Investor Shares of the Berger Small
                                              Company Growth Fund

(30)    Exhibit       23(m)-9                 Amended and Restated Rule 12b-1 Plan for
                                              the Investor Shares of the Berger New
                                              Generation Fund
</TABLE>



<PAGE>   331



<TABLE>
<S>                   <C>                     <C>
(29)    Exhibit       23(o)-1                 Rule 18f-3 Plan for the Berger Information
                                              Technology Fund

(30)    Exhibit       23(o)-2                 Rule 18f-3 Plan for the Berger Small
                                              Company Growth Fund

(30)    Exhibit       23(o)-3                 Rule 18f-3 Plan for the Berger New
                                              Generation Fund
</TABLE>


----------


*    To be filed with 485(b) filing


Filed previously as indicated below and incorporated herein by reference:

(1)  Filed as Exhibit 1 with Post-Effective Amendment No. 15 to the Registrant's
     Registration Statement on Form N-1A, filed April 30, 1998.

(2)  Filed as Exhibit 2 with Post-Effective Amendment No. 15 to the Registrant's
     Registration Statement on Form N-1A, filed April 30, 1998.

(3)  Filed as Exhibit 5.1 with Post-Effective Amendment No. 15 to the
     Registrant's Registration Statement on Form N-1A, filed April 30, 1998.

(4)  Filed as Exhibit 5.2 with Post-Effective Amendment No. 8 to the
     Registrant's Registration Statement on Form N-1A, filed February 23, 1996.

(5)  Filed as Exhibit 5.3 with Post-Effective Amendment No. 11 to the
     Registrant's Registration Statement on Form N-1A, filed August 28, 1997.

(6)  Filed as Exhibit 5.4 with Post-Effective Amendment No. 13 to the
     Registrant's Registration Statement on Form N-1A, filed December 31, 1997.

(7)  Filed as Exhibit 5.5 with Post-Effective Amendment No. 13 to the
     Registrant's Registration Statement on Form N-1A, filed December 31, 1997.

(8)  Filed as Exhibit 5.6 with Post-Effective Amendment No. 16 to the
     Registrant's Registration Statement on Form N-1A, filed June 16, 1998.

(9)  Filed as Exhibit 5.7 with Post-Effective Amendment No. 16 to the
     Registrant's Registration Statement on Form N-1A, filed June 16, 1998.

(10) Filed as Exhibit 6 with Post-Effective Amendment No. 16 to the Registrant's
     Registration Statement on Form N-1A, filed June 16, 1998.

(11) Filed as Exhibit 8 with Post-Effective Amendment No. 6 to the Registrant's
     Registration Statement on Form N-1A, filed November 27, 1995.

(12) Filed as Exhibit 9.2.1 with Post-Effective Amendment No. 15 to the
     Registrant's Registration Statement on Form N-1A, filed April 30, 1998.

(13) Filed as Exhibit 9.2.2 with Post-Effective Amendment No. 8 to the
     Registrant's Registration Statement on Form N-1A, filed February 23, 1996.

(14) Filed as Exhibit 9.2.3 with Post-Effective Amendment No. 11 to the
     Registrant's Registration Statement on Form N-1A, filed August 28, 1997.

(15) Filed as Exhibit 9.2.4 with Post-Effective Amendment No. 13 to the
     Registrant's Registration Statement on Form N-1A, filed December 31, 1997.

(16) Filed as Exhibit 9.2.5 with Post-Effective Amendment No. 13 to the
     Registrant's Registration Statement on Form N-1A, filed December 31, 1997.

(17) Filed as Exhibit 9.2.6 with Post-Effective Amendment No. 16 to the
     Registrant's Registration Statement on Form N-1A, filed June 16, 1998.

(18) Filed as Exhibit 9.3 with Post-Effective Amendment No. 15 to the
     Registrant's Registration Statement on Form N-1A, filed April 30, 1998.



<PAGE>   332


(19) Filed as Exhibit 9.4 with Post-Effective Amendment No. 15 to the
     Registrant's Registration Statement on Form N-1A, filed April 30, 1998.

(20) Filed as Exhibit 10 with Post-Effective Amendment No. 16 to the
     Registrant's Registration Statement on Form N-1A, filed June 16, 1998.

(21) Filed as Exhibit 13 with Post-Effective Amendment No. 15 to the
     Registrant's Registration Statement on Form N-1A, filed April 30, 1998.

(22) Filed as Exhibit 15.1 with Post-Effective Amendment No. 15 to the
     Registrant's Registration Statement on Form N-1A, filed April 30, 1998.

(23) Filed as Exhibit 15.2 with Post-Effective Amendment No. 8 to the
     Registrant's Registration Statement on Form N-1A, filed February 23, 1996.

(24) Filed as Exhibit 15.3 with Post-Effective Amendment No. 11 to the
     Registrant's Registration Statement on Form N-1A, filed August 28, 1997.

(25) Filed as Exhibit 15.4 with Post-Effective Amendment No. 13 to the
     Registrant's Registration Statement on Form N-1A, filed December 31, 1997.

(26) Filed as Exhibit 15.5 with Post-Effective Amendment No. 13 to the
     Registrant's Registration Statement on Form N-1A, filed December 31, 1997.

(27) Filed as Exhibit 15.6 with Post-Effective Amendment No. 16 to the
     Registrant's Registration Statement on Form N-1A, filed June 16, 1998.

(28) Filed as Exhibit number listed with Post-Effective Amendment No. 19 to the
     Registrant's Registration Statement on Form N-1A, filed January 25, 1999.

(29) Filed as Exhibit number listed with Post-Effective Amendment No. 20 to the
     Registrant's Registration Statement on Form N-1A, filed April 16, 1999.

(30) Filed as Exhibit number listed with Post-Effective Amendment No. 21 to the
     Registrant's Registration Statement on Form N-1A, filed June 15, 1999.


(31) Filed as Exhibit number listed with Post-Effective Amendment No. 24 to the
     Registrant's Registration Statement on Form N-1A, filed January 28, 2000.



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