As filed with the Securities and Exchange Commission on May 28, 1999
File Nos. 33-69686
811-8064
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 43
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 44
THE MONTGOMERY FUNDS II
(Exact Name of Registrant as Specified in its Charter)
101 California Street
San Francisco, California 94111
(Address of Principal Executive Office)
(415) 572-3863
(Registrant's Telephone Number, Including Area Code)
Greg M. Siemons, Assistant Secretary
101 California Street
San Francisco, California 94111
(Name and Address of Agent for Service)
-------------------------
It is proposed that this filing will become effective:
___________ immediately upon filing pursuant to Rule 485(b)
___________ on ___________ pursuant to Rule 485(b)
___________ 60 days after filing pursuant to Rule 485(a)(1)
___________ 75 days after filing pursuant to Rule 485(a)(2)
_____X_____ on July 31, 1999 pursuant to Rule 485(a)(1)
----------
Please Send Copy of Communications to:
JULIE ALLECTA, ESQ.
DAVID A. HEARTH, ESQ.
Paul, Hastings, Janofsky & Walker LLP
345 California Street
San Francisco, California 94104
(415) 835-1600
<PAGE>
THE MONTGOMERY FUNDS II
CONTENTS OF THE POST-EFFECTIVE AMENDMENT
This Post-Effective Amendment to the registration statement of the Registrant
contains the following documents:
Facing Sheet
Contents of the Post-Effective Amendment
Part A - Prospectus for Class B and Class C shares of Montgomery Global
Long-Short Fund
Part B - Combined Statement of Additional Information for Montgomery
Institutional Series: International Growth Portfolio,
Montgomery Institutional Series: Emerging Markets Focus
Portfolio, Montgomery Institutional Series: Macro Cap
Systematic Value Portfolio, Montgomery Institutional Series:
Small Cap Systematic Value Portfolio and Montgomery Global
Long-Short Fund is incorporated by reference to Post-Effective
Amendment No. 42
Part C - Other Information
Signature Page
Exhibits
<PAGE>
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PART A
PROSPECTUS FOR
CLASS B AND CLASS C SHARES OF
MONTGOMERY GLOBAL LONG-SHORT FUND
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<PAGE>
Prospectus
July 31, 1999
The Montgomery Funds IISM
MONTGOMERY GLOBAL LONG-SHORT FUND
The Montgomery Funds II has registered the mutual fund offered in this
prospectus with the U.S. Securities and Exchange Commission (SEC). That
registration does not imply, however, that the SEC endorses the Fund.
The SEC has not approved or disapproved the Fund or passed upon the adequacy of
this prospectus. Any representation to the contrary is a criminal offense.
<PAGE>
- -------------------------
How to Contact Us
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Montgomery Shareholder
Service Representatives
800.627.7933
Montgomery Web Site
www.montgomeryfunds.com
Address General
Correspondence to:
The Montgomery Funds II
101 California Street
San Francisco, CA 94111-9361
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<PAGE>
TABLE OF CONTENTS
Objective......................................................................5
Strategy.......................................................................5
Risks..........................................................................5
Fees & Expenses................................................................6
Portfolio Management...........................................................8
Additional Investment Strategies and Related Risks.............................8
Montgomery Global Long-Short Fund.........................................8
The Euro: Single European Currency.......................................9
Defensive Investments....................................................10
Portfolio Turnover.......................................................10
The Year 2000............................................................10
Additional Information on the Benchmarks for the Fund....................10
Financial Highlights..........................................................12
What You Need To Know About Your Montgomery Account...........................13
How Fund Shares are Priced...............................................13
Foreign Investors........................................................13
Investing in the Fund Through Financial Intermediaries........................14
Investing in the Fund Directly with Montgomery................................14
Opening a New Account..................................................14
Buying Additional Shares...............................................15
Exchanging Shares......................................................16
Other Exchange Policies................................................16
Selling Shares.........................................................16
Other Policies................................................................18
Tax Withholding Information..............................................19
After You Invest.........................................................20
How To Avoid "Buying A Dividend"..............................................21
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<PAGE>
This prospectus contains important information about the investment objective,
strategy and risks of the Montgomery Global Long-Short Fund (the "Fund") that
you should know before you invest in the Fund. Please read it carefully and keep
it on hand for future reference.
Please be aware that the Fund:
[] Is not a bank deposit
[] Is not guaranteed, endorsed or insured by any financial institution or
government entity such as the Federal Deposit Insurance Corporation (FDIC)
You should also know that you could lose money by investing in the Fund.
This prospectus describes only the Fund's Class B and Class C shares. The
Montgomery Funds II offers other classes of shares of the Fund with different
fees and expenses to eligible investors.
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<PAGE>
Global Long-Short Fund
Objective
[] Seeks capital appreciation by investing in long and short positions in
equity securities worldwide.
Strategy
The Fund's strategy is to uncover stocks with the greatest potential for changes
in price, and to benefit whether overall stock markets move up or down. The
Fund's stock selection strategy combines in-depth financial review with on-site
analysis of companies, countries and regions to identify potential investments.
The portfolio managers buy stocks "long" that they believe will perform better
than their peers, and sell stocks "short" that they believe will underperform
their peers. They may also engage in margin borrowing or use options and
financial futures contracts in an effort to enhance returns.
Under normal conditions, this Fund seeks to achieve its objective by investing
at least 65% of its total assets in long and short positions in equity
securities of publicly traded companies in the U.S., developed foreign and
emerging markets. A long position is where the Fund purchases a stock outright,
while a short position is when the Fund sells a security that it has borrowed.
Short positions may be used to partially hedge long positions or to garner
returns from insights made from the manager's company research. The Fund will
realize a profit or incur a loss from a short position depending on whether the
value of the underlying stock increases or decreases between the time it is sold
and when the Fund replaces the borrowed security.
Risks
This Fund uses sophisticated investment approaches that may present
substantially higher risks than most mutual funds. The Fund will seek to
increase return by investing in transactions using margin, leverage, short sales
and other forms of volatile financial derivatives such as options and futures.
As a result, an investment in this Fund may be more volatile than investments in
other mutual funds. This Fund is not appropriate for conservative investors.
By investing in stocks, the Fund may expose you to certain risks that could
cause you to lose money, particularly a sudden decline in a holding's share
price or an overall decline in the stock market. Short sales are speculative
investments and will cause the Fund to lose money if the value of a security
does not go down as the managers expect. In addition, the use of borrowing and
short sales may cause the Fund to have higher expenses (especially interest and
dividend expenses) than those of other equity mutual funds.
By investing in foreign stocks the Fund carries additional risks such as
regulatory, political and currency risk. Moreover, the Fund may invest up to 30%
of its total assets in emerging markets, which are far more volatile than the
U.S. market. For a more detailed discussion of the risks mentioned above, see
"Additional Investment Strategies and Related Risks" on page ____.
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<PAGE>
<TABLE>
Past Fund Performance The bar chart below shows the risks of investing in the
Fund. The table immediately below the bar chart compares the Fund's performance
with commonly used indices for its market segment. Of course, past performance
is no guarantee of future results.
<CAPTION>
51.69%
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
[] During the one-year period described in the bar chart on the left for the Class B shares
of the Fund, the best quarter was Q1 1998 (26.50%) and the
worst quarter was Q3 1998 (-4.17%).
- ---------------------------------------------------------------------------------------------------------------------
1998
</TABLE>
<TABLE>
<CAPTION>
Average Annual Returns Through 12/31/98.
<S> <C> <C>
Global Long-Short Fund - Class B 51.69% 51.69%
Global Long-Short Fund - Class C 41.98% 41.98%
- ---------------------------------------------------------------------------------------------
MSCI All-Country World Free Index+ 21.97% 21.97%
- ---------------------------------------------------------------------------------------------
MSCI EAFE Index+ 20.00% 20.00%
- ---------------------------------------------------------------------------------------------
S&P 500 Index 28.75% 28.75%
- ---------------------------------------------------------------------------------------------
1 Year Inception (12/31/97)
<FN>
+See page __ for a description of these indices.
</FN>
</TABLE>
Fees & Expenses
<TABLE>
The following table shows the fees and expenses you may pay if you buy and hold
shares of the Fund. Montgomery does not impose any front-end loads on this Fund.
<CAPTION>
Class Class
B* C
----------------
<S> <C> <C>
Shareholder Fees (fees paid directly from your investment)
Maximum Deferred Sales Charge (as a percentage of redemption proceeds) 5.00%+ 1.00%++
Redemption Fee# 0.00% 0.00%
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)##
Management Fee 1.50% 1.50%
Distribution (12b-1) and Service Fees 1.00% 1.00%
Other Expenses x.xx% x.xx%
- ------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses x.xx% x.xx%
Fee Reduction and/or Expense Reimbursement x.xx% x.xx%
- ------------------------------------------------------------------------------------------------------
Net Expenses 3.10% 3.10%
<FN>
* Class B shares convert to Class R shares automatically at the beginning of
the seventh year after purchase.
# $10 will be deducted from redemption proceeds sent by wire or overnight
courier.
+ 5.00% during the first year, 4.00% during the second year, 3.00% during the
third and fourth years, 2.00% during the fifth year and 1.00% during the
sixth. Class B shares automatically convert into Class R shares
approximately seven years after purchase and thereafter will not be subject
to a CDSC.
++ Class C shares are subject to a 1.00% contingent deferred sales charge if
redeemed within the first year of purchase.
## Montgomery Asset Management has contractually agreed to reduce its fees
and/or absorb expenses to limit the Fund's total annual operating expenses
(excluding the 12b-1 fee of 0.75% and interest and tax expense) to 2.35% for
Class B and Class C shares. This contract has a rolling ten-year term.
</FN>
</TABLE>
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<PAGE>
Example of Fund expenses: This example is intended to help you compare the cost
of investing in the Fund with the cost of investing in other mutual funds. The
table below shows what you would pay in expenses over time, assuming that you
redeemed all of your shares at the end of each period. It also assumes a $10,000
initial investment, 5% total return each year and no changes in expenses. This
example is for comparison purposes only. It does not necessarily represent the
Fund's actual expenses or returns.
1 Year 3 Years 5 Years 10 Years
----------------------------------------------------
Class B $712 $1,254 $1,720 $3,392
Class C $312 $954 $1,620 $3,392
The table below shows what your would pay in expenses over time if you did not
redeem your shares. The example does not reflect sales charge (loads) on
reinvested dividends. If these sales charges (loads) were included, your costs
would be higher.
1 Year 3 Years 5 Years 10 Years
----------------------------------------------------
Class B $312 $954 $1,620 $3,392
Class C $312 $954 $1,620 $3,392
Portfolio Management
Angeline Ee and Nancy Kukacka For financial highlights,
For more details see page __ see page __
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<PAGE>
PORTFOLIO MANAGEMENT
The investment manager of the Fund is Montgomery Asset Management, LLC, 101
California Street, San Francisco, California 94111. Founded in 1990, Montgomery
Asset Management is a subsidiary of Commerzbank AG, one of the largest publicly
held commercial banks in Germany. As of December 31, 1998, Montgomery Asset
Management managed approximately $9 billion, with $4.5 billion invested in The
Montgomery Funds.
ANGELINE EE, portfolio manager with Montgomery's International/Global team
(since 1994). Prior to joining Montgomery in 1994 as a Portfolio Manager, Ms. Ee
was a portfolio manager with AIGIC Investment Corp. in Singapore. From 1989
until 1990, Ms. Ee was a co-manager of a portfolio of Asian equities and bonds
at Chase Manhattan Bank in Singapore.
NANCY KUKACKA, portfolio manager with Montgomery's International/Global team
(since 1995). Before joining Montgomery in 1995 as a Portfolio Manager, Ms.
Kukacka worked at CS First Boston Investment from 1994 through 1995 where she
was an investment analyst covering consumer cyclical and non-durable sectors.
Previously, Ms. Kukacka was an investment analyst at RCM Capital Management from
1990 through 1994, providing fundamental-based analysis for more than $12
billion in equity investments.
ADDITIONAL INVESTMENT STRATEGIES AND RELATED RISKS
Montgomery Global Long-Short Fund
General. The Fund is considered to have invested at least 65% of its total
assets in long and short positions in equity securities when the value of long
positions in equity securities and the value of assets serving as collateral for
short positions together constitute at least 65% of the value of its total
assets. The value of long and short positions will not necessarily be equal.
Short Sales. When Montgomery believes that a security is overvalued, it may sell
the security short and borrow the same security from a broker or other
institution to complete the sale. If the price of the security decreases in
value the Fund may make a profit and, conversely, if the security increases in
value, the Fund will incur a loss because it will have to replace the borrowed
security by purchasing it at a higher price. There can be no assurance that the
Fund will be able to close out the short position at any particular time or at
an acceptable price. Although the Fund's gain is limited to the amount at which
it sold a security short, its potential loss is not limited. A lender may
request that the borrowed securities be returned on short notice, and if that
occurs at a time when other short sellers of the subject security are receiving
similar requests, a "short squeeze" can occur. This means that the Fund might be
compelled, at the most disadvantageous time, to replace borrowed securities
previously sold short, with purchases on the open market at prices significantly
greater than those the securities were sold short at. Short selling also may
produce higher than normal portfolio turnover and result in increased
transaction costs to the Fund.
The Fund also may make short sales "against-the-box," in which it sells short
securities it owns. The Fund will incur transaction costs, including interest
expenses, in connection with opening, maintaining and closing short sales
against-the-box, which result in a "constructive sale" requiring the Fund to
recognize any taxable gain from the transaction.
Until the Fund replaces a borrowed security it will designate sufficient U.S.
government securities, and other liquid debt and equity securities to cover any
difference between the value of the security sold short and any collateral
deposited with a broker or other custodian. In addition, the value of the
designated securities must be at least equal to the original value of the
securities sold short. Depending on arrangements made with the broker or
custodian, the Fund may not receive any payments (including
-8-
<PAGE>
interest) on collateral deposited with the broker or custodian. The Fund will
not make a short sale if, immediately before the transaction, the market value
of all securities sold exceeds 100% of the value of the Fund's net assets.
Borrowing/Leverage. The Fund may borrow money from banks and engage in reverse
repurchase transactions for temporary or emergency purposes. The Fund may borrow
from broker-dealers and other institutions in order to leverage a transaction.
Total bank borrowings may not exceed one-third of the value of the Fund's
assets.
The Fund also may leverage its portfolio through margin borrowing and other
techniques in an effort to increase total return. Although leverage creates an
opportunity for increased income and gain, it also creates special risks. For
example, leveraging may magnify changes in the net asset values of the Fund's
shares and in its portfolio yield. Although margin borrowing will be fully
collateralized, the Fund's assets may change in value while the borrowing is
outstanding. Leveraging creates interest expenses that can exceed the income
from the assets retained.
Foreign Securities. By investing in foreign stocks, the Fund exposes
shareholders to additional risks. Foreign stock markets tend to be more volatile
than the U.S. market due to economic and political instability and regulatory
conditions in some countries. In addition, the risks of investing in emerging
markets are considerable. Emerging stock markets tend to be much more volatile
than the U.S. market due to the relative immaturity, and occasional instability,
of their political and economic systems. In the past many emerging markets
restricted the flow of money into or out of their stock markets, and some
continue to impose restrictions on foreign investors. These markets tend to be
less liquid and offer less regulatory protection for investors. The economies of
emerging countries may be predominately based on only a few industries or on
revenue from particular commodities, international aid and other assistance. In
addition, most of the securities in which the Fund invests are denominated in
foreign currencies, whose value may decline against the U.S. dollar.
Furthermore, during the period following the January 1, 1999 introduction by the
European Union of a single European currency (the "euro"), market uncertainties
and even market disruptions could affect negatively the Fund's investments in
European companies.
The Euro: Single European Currency
On January 1, 1999, the European Union (EU) introduced a single European
currency called the euro. Eleven of the fifteen EU members have begun to convert
their currencies to the euro including Austria, Belgium, Finland, France,
Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain
(leaving out Britain, Sweden, Denmark and Greece). For the first three years,
the euro will be a phantom currency (only an accounting entry).
Euro notes and coins will begin circulating in 2002.
The introduction of the euro has occurred, but the following uncertainties will
continue to exist for some time:
[] Whether the payment, valuation and operational systems of banks and
financial institutions can operate reliably.
[] The applicable conversion rate for contracts stated in the national
currency of an EU member.
[] The ability of clearing and settlement systems to process transactions
reliably.
[] The effects of the euro on European financial and commercial markets.
[] The effect of new legislation and regulations to address euro-related
issues.
-9-
<PAGE>
These and other factors could cause market disruptions and affect the value of
your shares in the Fund. Montgomery and its key service providers have taken
steps to address euro-related issues, but there can be no assurance that these
efforts will be sufficient.
Defensive Investments
At the discretion of its portfolio manager(s), the Fund may invest up to 100% of
its assets in cash and cash equivalents for temporary defensive purposes. Such a
stance may help the Fund minimize or avoid losses during adverse market,
economic or political conditions. During such a period, the Fund may not achieve
its investment objective. For example, should the market advance during this
period, the Fund may not participate as much as it would have if it had been
more fully invested.
Portfolio Turnover
The Fund's portfolio managers will sell a security when they believe it is
appropriate to do so, regardless of how long the Fund has owned that security.
Buying and selling securities generally involves some expense to the Fund, such
as commission paid to brokers and other transaction costs. By selling a
security, the Fund may realize taxable capital gains that it will subsequently
distribute to shareholders. Generally speaking, the higher the Fund's annual
portfolio turnover, the greater its brokerage costs and the greater the
likelihood that it will realize taxable capital gains. Increased brokerage costs
may adversely affect the Fund's performance. Also, unless you are a tax-exempt
investor or you purchase shares through a tax-deferred account, the distribution
of capital gains may affect your after-tax return. Annual portfolio turnover of
100% or more is considered high. See "Financial Highlights," beginning on page
__, for the Fund's historical portfolio turnover.
The Year 2000
The common past practice in computer programming of using just two digits to
identify a year has resulted in the Year 2000 challenge throughout the
information technology industry. If unchanged, many computer applications and
systems could misinterpret dates occurring after December 31, 1999, leading to
errors or failure. This failure could adversely affect the Fund's operations,
including pricing, securities trading, and the servicing of shareholder
accounts.
Montgomery is dedicated to providing uninterrupted, high-quality performance
from our computer systems before, during and after 2000. We are now renovating
and testing our internal systems. Montgomery is diligently working with external
partners, suppliers, vendors and other service providers, to ensure that the
systems with which we interact will remain operational at all times.
In addition to taking reasonable steps to secure our internal systems and
external relationships, Montgomery is further developing contingency plans
intended to ensure that unexpected systems failures will not adversely affect
the Fund's operations. Montgomery intends to monitor these processes through the
rollover of 1999 into 2000 and to quickly implement alternative solutions if
necessary.
Despite Montgomery's efforts and contingency plans, however, noncompliant
computer systems could have a material adverse effect on the Fund's business,
operations, or financial condition. Additionally, the Fund's performance could
be hurt if a computer system failure at a company or governmental unit affects
the prices of securities the Fund owns. Issuers in countries outside of the
U.S., particularly in emerging markets, may not be required to make the same
level of disclosure about year 2000 readiness as required in the U.S.
Montgomery, of course, cannot audit any company and its major suppliers to
verify their year 2000 readiness. Montgomery understands that many foreign
countries and companies are well behind their U.S. counterparts in preparing for
2000.
-10-
<PAGE>
Additional Information on the Benchmarks for the Fund
The Morgan Stanley Capital International EAFE Index is composed of 21 developed
market countries in Europe, Australasia and Far East. The returns are presented
net of dividend withholding taxes.
The Morgan Stanley Capital International All-Country World-Free Index is an
unmanaged, capitalization-weighted monthly total return index composed of
securities listed on the stock exchanges of more than 45 developed and emerging
countries, including the United States.
-11-
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
The following financial information for the period ended March 31, 1999 was
audited by ___________________, whose report, dated ____________, appears in the
1999 Annual Report of this Fund. The information for the period ended March 31,
1998 was also audited by ___________________, whose report, is also included
here. These financial highlights are intended to help you understand the Fund's
financial performance. The total return in the table represents the rate that an
investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions).
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
MONTGOMERY GLOBAL LONG-SHORT FUND (a)
Class B Class B Class C Class C
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER-SHARE DATA FOR March 31, March 31, March 31, March 31,
THE PERIOD ENDED: 1999 1998 1999 1998
(audited) (audited) (audited) (audited)
Net Asset Value - Beginning of Period $xx.xx $10.00 $xx.xx $10.00
Net investment income/(loss)# x.xx -- x.xx --
Net realized and unrealized gain/(loss) on x.xx 2.64 x.xx
investments 1.83
Net increase/(decrease) in net assets
resulting from investment operations x.xx 2.64 x.xx 1.83
Distributions to shareholders:
Dividends from net investment income -- -- --
Distributions in excess of net investment -- -- --
income -- -- --
Distributions from net realized capital -- -- --
gains -- -- --
Distributions in excess of net capitalized -- -- --
gains
Distributions from capital
Total Distributions:
Net Asset Value-End of Period $xx.xx $12.64 $xx.xx $11.83
Total Return* xx.xx% 26.50% xx.xx% 18.50%
- ----------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/Supplemental Data:
Net assets, end of year (in 000's) $xx,xxx $61 $xx,xxx $202
Ratio of net investment income/(loss) to
average net assets x.xx% (0.10)%+ x.xx% (0.10)%+
Ratio of net investment income/(loss), before
reduction of fees by Manager, to average net x.xx% (2.52)%+ x.xx% (2.52)%+
assets
Portfolio turnover rate xx.xx% 84.25% xx.xx% 84.25%
Expense ratio before reduction of fees by
Manager, including interest and tax expenses x.xx% 5.94%+ x.xx% 5.94%+
Expense ratio including interest and tax expenses x.xx% 3.53%+ x.xx% 3.53%+
Expense ratio excluding interest and tax expenses x.xx% 3.10%+ x.xx% 3.10%+
- ----------------------------------------------------------------------------------------------------------------------
<FN>
(a) The Global Long-Short Fund commenced operations on December 31, 1997.
* Total return does not include sales charges or redemption fees.
# Per-share numbers have been calculated using the average share method, which
more appropriately represents the per-share data for the period, since the
use of the undistributed income method did not accord with results of
operations.
+ Annualized.
</FN>
</TABLE>
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<PAGE>
WHAT YOU NEED TO KNOW ABOUT YOUR MONTGOMERY ACCOUNT
You pay no front-end sales charge to invest in the Fund. However, you may be
subject to a contingent deferred sales charge under certain conditions (see
"Selling Shares" and the Statement of Additional Information for further
details). Trade requests received after the close of trading on the New York
Stock Exchange (NYSE), normally 1 P.M. Pacific time (4 P.M. Eastern time) will
be executed at the following business day's closing price. The minimum initial
investment for the Fund is $2,000 and the minimum subsequent investment is $500.
Under certain conditions we may waive these minimums. If you buy shares through
a broker or investment advisor, different requirements may apply. All
investments must be made in U.S. dollars. Purchases may also be made in certain
circumstances by payment of securities. See "In Kind Purchases" below and the
Statement of Additional Information for further details.
We must receive payment from you within three business days of your purchase. In
addition, the Fund and the Distributor each reserve the right to reject any
purchase.
From time to time, Montgomery may close and reopen the Fund to new investors at
its discretion. Shareholders who maintain open accounts in the Fund when it
closes may make additional investments in it. If a Fund is closes and you redeem
your total investment in the Fund, your account will be closed and you will not
be able to make any additional investments in the Fund.
How Fund Shares Are Priced
How and when we calculate the Fund's price or net asset value (NAV) determines
the price at which you will buy or sell shares. We calculate the Fund's NAV by
dividing the total value of its assets by the number of outstanding shares. We
base the value of the Fund's investments on its market value, usually the last
price reported for each security before the close of market that day. A market
price may not be available for securities that trade infrequently. Occasionally,
an event that affects a security's value may occur after the market closes. This
is more likely to happen for foreign securities traded in foreign markets that
have different time zones than in the United States. Major developments
affecting the prices of those securities may occur after the foreign markets in
which such securities trade have closed, but before the Fund calculates its NAV.
In this case, Montgomery, under the supervision of the Fund's Board of Trustees
or Pricing Committee, will make a good-faith estimate of the security's "fair
value," which may be higher or lower than the security's closing price in its
relevant market.
We calculate the NAV of the Fund after the close of trading on the NYSE every
day that the NYSE is open. We do not calculate the NAVs on the days that the
NYSE is closed for trading. An exception applies as described below. If we
receive your order by the close of trading on the NYSE, you can purchase shares
at the price calculated for that day. The NYSE usually closes at 4 P.M. on
weekdays, except for holidays. If your order and payment are received after the
NYSE has closed, your shares will be priced at the next NAV we determine after
the receipt of your order. More details about how we calculate the Fund's NAVs
are in the Statement of Additional Information.
> The Fund invests in securities denominated in foreign currencies and traded
on foreign exchanges. To determine their value, we convert their
foreign-currency price into U.S. dollars by using the exchange rate last
quoted by a major bank. Exchange rates fluctuate frequently and may affect
the U.S. dollar value of foreign-denominated securities, even if their
market price does not change. In addition, some foreign exchanges are open
for trading when the U.S. market is closed. As a result, the Fund's foreign
securities--and its price--may fluctuate during periods when you can't buy,
sell or exchange shares in the Fund.
Foreign Investors
Foreign citizens and resident aliens of the United States living abroad may not
invest in the Fund.
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<PAGE>
INVESTING IN THE FUND THROUGH FINANCIAL INTERMEDIARIES
You may purchase and sell shares through securities brokers and benefit plan
administrators or their subagents. You should contact them directly for
information regarding how to invest or redeem through them. They may also charge
you service or transaction fees. If you purchase or redeem shares through them,
you will receive the NAV calculated after receipt of the order by them
(generally, 4:00 P.M. Eastern time) on any day the NYSE is open. If your order
is received by them after that time, it will be purchased or redeemed at the
next calculated NAV. Brokers and benefit plan administrators who perform
shareholder servicing for the Fund may receive fees from the Fund or Montgomery
for providing these services.
INVESTING IN THE FUND DIRECTLY WITH MONTGOMERY
Opening a New Account
By Mail Send your completed application, with a check payable to Montgomery
Global Long-Short Fund, to the appropriate address below. Your check must be in
U.S. dollars and drawn only on a bank located in the United States. We do not
accept third-party checks, "starter" checks, credit-card checks, instant-loan
checks or cash investments. We may impose a charge on checks that do not clear.
Regular Mail
The Montgomery Funds II
c/o DST Systems, Inc.
P.O. Box 419073
Kansas City, MO 64141-6073
Express Mail or Overnight Courier
The Montgomery Funds II
c/o DST Systems, Inc.
210 West 10th Street
7th Floor
Kansas City, MO 64105-1614
By Wire Call us at (800) 627-7933, option (2) to let us know that you intend to
make your initial investment by wire. Tell us your name and the amount you want
to invest. We will give you further instructions and a fax number to which you
should send your completed New Account application. To ensure that we handle
your investment accurately, include complete account information in all wire
instructions. Then request your bank to wire money from your account to the
attention of:
Investors Fiduciary Trust Company
ABA #101003621
For: DST Systems, Inc.
and include the following:
Account #7526601
Attention: The Montgomery Funds II
For credit to: [shareholder(s) name]
Shareholder Account Number:
[shareholder(s) account number]
Name of Fund: [Montgomery Global Long-Short Fund]
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<PAGE>
Please note that your bank may charge a wire transfer fee.
By Phone To make an initial investment by phone, you must have been a current
Montgomery shareholder for at least 30 days. Shares for Individual Retirement
Accounts (IRAs) may not be purchased by phone. Your purchase must meet the
Fund's investment minimum and is limited to the total value of your existing
accounts or $10,000, whichever is greater. To complete the transaction, we must
receive payment within three business days. We reserve the right to collect any
losses from your account if we do not receive payment within that time.
In-Kind Purchases An investor may purchase shares of the Fund by tendering
payment in-kind in the form of securities, provided that any such tendered
securities are readily marketable, their acquisition is consistent with the
Fund's investment objectives and policies, and the tendered securities are
otherwise acceptable to the Fund's portfolio managers. For purposes of in-kind
purchases, a security will be considered "readily marketable" if it is in the
process of undergoing customary settlement and/or registration in its primary
market. For purposes of sales of shares of the Fund of such securities, the
tendered securities shall be valued at the identical time and in the identical
manner that the portfolio securities of the Fund are valued for the purpose of
calculating the net asset value of the Fund's shares.
Manage Your Account Online
Our online Shareholder Service Center offers free, secure access to your
account(s) round-the-clock. Shareholders can:
[] Check current account balances
[] Buy, exchange or sell shares
[] View the most recent account activity and up to 80 records of account
history within the past two years
[] Order duplicate statements and tax forms
[] Reorder checkbooks
To register call 800.627.7933 option (2) speak with a shareholder service
representative. Please have your Fund and account numbers ready. It only takes a
minute!
Get in-depth information
Our Web site is a good source of in-depth information on the Fund or other
Montgomery Funds, as well as useful information about investing in general.
Click on:
[] Funds & Performance for daily performance and net asset values, plus
in-depth information on any of our Funds, including audio broadcasts of
portfolio manager commentaries
[] Meet Our Experts to gain weekly insight into market events, browse through
a vast archive of commentaries and read portfolio manager biographies
[] Resource Center for answers to your investment questions, a glossary of
financial terms, our online bookstore, plus 11 calculation worksheets to
help you meet your investment goals, such as:
> College Prep to learn how to invest for your children's or
grandchildren's education
> Retirement Planning to start investing for your golden years now
Buying Additional Shares
By Mail Complete the form at the bottom of any Montgomery statement and mail it
with your check payable to Montgomery Global Long-Short Fund. Or mail the check
with a signed letter noting the name of the Fund in which you want to invest,
your account number and telephone number. We will mail you a confirmation of
your investment. Note that we may impose a charge on checks that do not clear.
-15-
<PAGE>
By Phone Current shareholders are automatically eligible to buy shares by phone.
To buy shares in the Fund or to invest in a new Fund, call (800) 627-7933 option
(2). Shares for IRAs may not be purchased by phone. There are restrictions on
the dollar amount of shares you may buy by phone.
We must receive payment for your purchase within three business days of your
request. To ensure that we do, you can:
> Transfer money directly from your bank account by mailing a written request
and a voided check or deposit slip (for a savings account).
> Send us a check by overnight or second-day courier service.
> Instruct your bank to wire money to our affiliated bank using the
information provided on page ___.
Online To buy shares online, you must first set up an Electronic Link, which
allows us to automatically debit or credit your bank account for transactions
made by phone or online. Then visit our Web site, www.montgomeryfunds.com, where
you can purchase up to $25,000 per day in additional shares of the Fund, except
those held in a retirement account. The cost of the shares will be automatically
deducted from your bank account.
To take advantage of this service, simply mail us a voided check or preprinted
deposit slip from your bank account along with a request to establish an
Electronic Link.
By Wire There is no need to contact us when buying additional shares by wire.
Instruct your bank to wire funds to our affiliated bank using the information on
page __.
Exchanging Shares
You may exchange shares in the Fund for shares in another, in accounts with the
same registration, Taxpayer Identification number and address. Applicable
minimums apply to exchanges as well as purchases. Note that an exchange may
result in a realized gain or loss for tax purposes. Additionally, you may be
subject to a contingent deferred sales charge under certain conditions (see
"Selling Shares" and the Statement of Additional Information for further
details). You may exchange shares by phone, at (800) 627-7933 option (2).
Other Exchange Policies
[] We will process your exchange order at the "next-calculated" NAV. This
means that if your exchange order is received after 4:00 P.M. on a
particular day, it will be processed at the NAV calculated on the next
trading day.
[] You may exchange shares in the Fund only if it has been qualified for sale
in your state. You may not exchange shares in the Fund for shares of
another that is currently closed to new shareholders unless you are already
a shareholder in the closed Fund.
[] Because excessive exchanges can harm the Fund's performance, we reserve the
right to terminate your exchange privileges if you make more than four
exchanges out of any one fund during a 12-month period. We may also refuse
an exchange into a Fund from which you have sold shares within the previous
90 days (accounts under common control and accounts having the same
Taxpayer Identification number will be counted together).
Selling Shares
You may sell some or all of your Fund shares on days that the NYSE is open for
trading. Note that a redemption may result in a realized gain or loss for tax
purposes.
Your shares will be sold at the next NAV we calculate for the Fund after
receiving your order. We will promptly pay the proceeds to you, less any
contingent deferred sales charges (CDSC) (see below),
-16-
<PAGE>
normally within three business days of receiving your order and all necessary
documents (including a written redemption order with the appropriate signature
guarantee). We will mail or wire you the proceeds, depending on your
instructions. Although shares purchased by check will be redeemed at the
next-calculated NAV, redemption proceeds will not be made available until 15
days after the purchase date. Within this 15-day period, you may choose to
exchange your investment into a Montgomery money market fund if you have a
prospectus for one of those funds.
o Class B Shares Shareholders who redeem or exchange Class B shares will be
subject to a CDSC if they redeemed or exchanged those shares within six years of
purchase as shown in the following table:
- -----------------------------------------------------------------------------
DURING THE FOLLOWING YEAR(S) OF CDSC
PURCHASE
- -----------------------------------------------------------------------------
1st year 5.00%
- -----------------------------------------------------------------------------
2nd year 4.00%
- -----------------------------------------------------------------------------
3rd year 3.00%
- -----------------------------------------------------------------------------
4th year 3.00%
- -----------------------------------------------------------------------------
5th year 2.00%
- -----------------------------------------------------------------------------
6th year 1.00%
- -----------------------------------------------------------------------------
After 6 years None
- -----------------------------------------------------------------------------
Class B shares will automatically convert to Class R shares at the beginning of
the seventh year after purchase.
[] Class C Shares Shareholders who redeem or exchange Class C shares within
one year of purchase will be charged a CDSC of 1.00%. There is no CDSC imposed
on Class C shares acquired through reinvestment of dividends or capital gains.
[] Class B and C Shares The CDSC will be imposed on the lesser of the original
purchase price or the net asset value of the redeemed or exchanged shares at the
time of the redemption. CDSC calculations are based on the specific shares
involved, not the value of the account. To keep your CDSC as low as possible,
each time you place a request to sell or exchange shares, we will first sell or
exchange any shares in your account that are not subject to a CDSC. If there are
not enough of these shares to meet your request, we will sell or exchange your
shares on a first-in, first-out basis. Your financial consultant or institution
may elect to waive some or all of the payment, thereby reducing or eliminating
the otherwise applicable CDSC.
Shares can be sold in several ways:
[] By Mail Send us a letter including your name, Montgomery account number and
the dollar amount or number of shares you want to sell. You must sign the letter
the same way your account is registered. If you have a joint account, all
account holders must sign the letter.
If you want the proceeds to go to a party other than the account owner(s) or
your predesignated bank account, or if the dollar amount of your redemption
exceeds $50,000, you must obtain a signature guarantee (not a notarization),
available from many commercial banks, savings associations, stock brokers and
other NASD member firms.
If you want to wire your redemption proceeds but do not have a predesignated
bank account, include a voided check or deposit slip with your letter. The
minimum wire amount is $500. Wire charges, if any, will be deducted from the
redemption proceeds. We may permit lesser wire amounts or fees at our
discretion.
-17-
<PAGE>
[] By Check If you have check writing privileges in your account, you may
write a check to redeem some of your shares of the Fund. A balance must be
available for the amount of the check. Funds invested by check must be invested
for 15 days before they are available for redemption. Checkwriting is not
available for IRA accounts. Checks may not be written for amounts below $250.
Checks require only one signature unless otherwise indicated. We will return
your checks at the end of the month. Note that we may impose a charge for a
stop-payment request.
[] By Phone You may accept or decline telephone redemption privileges on your
New Account application. If you accept, you will be able to sell up to $50,000
in shares by phone. You may not buy, sell or exchange shares in an IRA by phone.
If you included bank wire information on your New Account application or made
arrangements later for wire redemptions, proceeds can be wired to your bank
account. Please allow at least two business days for the proceeds to be credited
to your bank account. If you want proceeds to arrive at your bank on the same
business day (subject to bank cutoff times), there is a $10 fee. For more
information about our telephone transaction policies, see "Other Policies"
below.
[] Online You can sell up to $50,000 in shares in a regular account through
our online Shareholder Service Center at www.montgomeryfunds.com.
Redemption Fees The following fees may be charged when you sell your shares:
[] For shares sold by wire, a $10 wire transfer fee will be deducted directly
from the proceeds.
[] For redemption checks requested by Federal Express, a $10 fee will be
deducted directly from the redemption proceeds.
In accordance with the rules of the Securities and Exchange Commission (SEC), we
reserve the right to suspend redemptions under extraordinary circumstances.
Other Policies
Minimum Account Balances
Due to the cost of maintaining small accounts, we require a minimum Fund account
balance of $1,000. If your account balance falls below that amount for any
reason, we will ask you to add to your account. If your account balance is not
brought up to the minimum or you do not send us other instructions, we will
redeem your shares and send you the proceeds. We believe that this policy is in
the best interests of all our shareholders.
Expense Limitations
Montgomery Asset Management may reduce its management fees and absorb expenses
in order to maintain total operating expenses (excluding interest, taxes and
dividend expenses) for the Fund below its previously set operating expense
limit. The Investment Management Agreement allows Montgomery three years to
recoup amounts previously reduced or absorbed, provided the Fund remains within
the applicable expense limitation. Montgomery generally seeks to recoup the
oldest amounts before seeking payment of fees and expenses for the current year.
Shareholder Servicing Plan
The Fund has adopted a Shareholder Servicing Plan, under which the Fund pays
Montgomery or its Distributor a shareholder servicing fee at an annual rate of
up to 0.25% of the Fund's average daily net assets. The fee is intended to
reimburse the recipient for providing or arranging for services to shareholders.
The fee may also be used to pay certain brokers, transfer agents and other
financial intermediaries for providing shareholder services.
Share Marketing Plan ("Rule 12b-1 Plan")
The Fund has adopted a Rule 12b-1 Plan for the Class B and Class C shares. Under
the Rule 12b-1 Plan,
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<PAGE>
the Fund will pay distribution fees to the Distributor at an annual rate of
seventy-five one-hundredths of one percent (0.75%) of the Fund's aggregate
average daily net assets attributable to its Class B and Class C shares to
reimburse the Distributor for its distribution costs with respect to such class.
Because the Rule 12b-1 fees are paid out of the Fund's assets on an on-going
basis, over time these fees will increase the cost of your investment and may
cost you more than paying other types of sales charge.
Uncashed Redemption Checks
If you receive your Fund redemption proceeds or distributions by check (instead
of by wire) and it does not arrive within a reasonable period of time, call us
at (800) 627-7933 option (2). Please note that we are responsible only for
mailing redemption or distribution checks and are not responsible for tracking
uncashed checks or determining why checks are uncashed. If your check is
returned to us by the U.S. Postal Service or other delivery service, we will
hold it on your behalf for a reasonable period of time. We will not invest the
proceeds in any interest-bearing account. No interest will accrue on uncashed
distribution or redemption proceeds.
In-Kind Redemptions
When in the judgment of the Manager it is consistent with the best interests of
the Fund, an investor may redeem shares of the Fund and receive securities from
the Fund's portfolio selected by the Manager at its sole discretion, provided
that such redemption is not expected to affect the Fund's ability to attain its
investment objective or otherwise materially affect its operations. For the
purposes of redemptions in kind, the redeemed securities shall be valued at the
identical time and in the identical manner that the other portfolio securities
are valued for purposes of calculating the net asset value of the Fund's shares.
Telephone Transactions
By buying, selling or exchanging shares over the phone, you agree to reimburse
the Fund for any expenses or losses incurred in connection with transfers of
money from your account. This includes any losses or expenses caused by your
bank's failure to honor your debit or act in accordance with your instructions.
If your bank makes erroneous payments or fails to make payment after you buy
shares, we may cancel the purchase and immediately terminate your telephone
transaction privilege. In addition, we may discontinue these privileges at any
time upon prior written notice. You may discontinue phone privileges at any
time.
The shares you purchase by phone will be priced at the first net asset value we
determine after receiving your purchase. You will not actually own the shares,
however, until we receive your payment in full. If we do not receive your
payment within three business days of your request, we will cancel your
purchase. You may be responsible for any losses incurred by the Fund as a
result.
Please note that we cannot be held liable for following telephone instructions
that we reasonably believe to be genuine. We use several safeguards to ensure
that the instructions we receive are accurate and authentic, such as:
> recording certain calls,
> requiring a special authorization number or other personal information not
likely to be known by others, and
> sending a transaction confirmation to the investor.
Montgomery and its Transfer Agent may be held liable for any losses due to
unauthorized or fraudulent telephone transactions only if we have not followed
these reasonable procedures.
We reserve the right to revoke the telephone transaction privilege of any
shareholder at any time if he or she has used abusive language or misused the
phone privilege by making purchases and redemptions that appear to be part of a
systematic market-timing strategy.
-19-
<PAGE>
If you notify us that your address has changed, we will temporarily suspend your
telephone redemption privileges until 30 days after your notification to protect
you and your account. We require all redemption requests made during this period
to be in writing with a signature guarantee.
Shareholders may experience delays in exercising telephone redemption privileges
during periods of volatile economic or market conditions. In these cases you may
want to transmit your redemption request:
> by overnight courier
> by telegram
Tax Withholding Information
Be sure to complete the Taxpayer Identification Number (TIN) section of the New
Account application. If you don't have a Social Security Number or TIN, apply
for one immediately by contacting your local office of the Social Security
Administration or the Internal Revenue Service (IRS). If you do not provide us
with a TIN or a Social Security number, federal tax law may require us to
withhold 31% of your taxable dividends, capital-gains distributions, and
redemption and exchange proceeds (unless you qualify as an exempt payee under
certain rules).
Other rules about TINs apply for certain investors. For example, if you are
establishing an account for a minor under the Uniform Gifts to Minors Act, you
should furnish the minor's TIN. If the IRS has notified you that you are subject
to backup withholding because you failed to report all interest and dividend
income on your tax return, you must check the appropriate item on the New
Account application. Foreign shareholders should note that any dividends the
Fund pays to them may be subject to up to 30% withholding instead of backup
withholding.
After You Invest
Taxes
IRS rules require that the Fund distributes all of its net investment income and
capital gains, if any, to shareholders. Capital gains may be taxable at
different rates depending upon the length of time the Fund holds its assets. We
will inform you about the source of any dividends and capital gains upon
payment. After the close of each calendar year, we will advise you of their tax
status. The Fund's distributions, whether received in cash or reinvested, may be
taxable. Any redemption of the Fund's shares or any exchange of the Fund's
shares for another Fund will be treated as a sale, and any gain on the
transaction may be taxable.
Additional information about tax issues relating to the Fund can be found in our
Statement of Additional Information, available free by calling (800) 627-7933
option (2). Consult your tax advisor about the potential tax consequences of
investing in the Fund.
Dividends and Distributions
<TABLE>
As a shareholder in the Fund, you may receive income dividends and capital gain
distributions for which you will owe taxes (unless you invest solely through a
tax-advantaged account such as an IRA or a 401(k) plan). Dividends and
distributions are paid to all shareholders who maintain accounts with the Fund
as of its "record date" and according to the following schedule:
- ------------------------------------------------------------------------------------------------------
<CAPTION>
INCOME Dividends CAPITAL GAINS
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Global Long-Short Fund Declared and paid in the last Declared and paid in the last
quarter of each calendar year* quarter of each calendar year*
- ------------------------------------------------------------------------------------------------------
<FN>
* Following its fiscal year end March 31, the Fund may make additional
distributions to avoid the imposition of a tax.
</FN>
</TABLE>
-20-
<PAGE>
If you would like to receive distributions in cash, indicate that choice on your
New Account application. Otherwise, the distributions will be reinvested in
additional Fund shares.
Keeping You Informed
After you invest you will receive our Shareholder Services Guide, which includes
more information about buying, exchanging and selling shares in The Montgomery
Funds. It also describes in more detail useful tools for investors such as the
Montgomery Star System and online transactions.
During the year, we will also send you the following communications:
[] Confirmation statements.
[] Account statements. Mailed after the close of each calendar quarter.
[] Annual and semiannual reports. Mailed approximately 60 days after March 31
and September 30.
[] 1099 tax form. Sent by January 31.
[] Annual updated prospectus. Mailed to existing shareholders in the fall.
To save you money, we will send only one copy of each shareholder report or
other mailing to your household if you hold accounts under common ownership or
at the same address (regardless of the number of shareholders or accounts at
that household or address), unless you request additional copies.
Referral Arrangements
The Distributor for the Fund compensates selected solicitors for bringing new
accounts or investments to the Fund. The Fund will not pay this compensation out
of its assets unless it has adopted a Rule 12b-1 plan. You may request the
Statement of Additional Information through the telephone number given on the
last page for specific information about these arrangements.
HOW TO AVOID "BUYING A DIVIDEND"
If you plan to purchase shares in the Fund, check if it is planning to make a
distribution in the near future. Here's why: If you buy shares of the Fund just
before a distribution, you'll pay full price for the shares but receive a
portion of your purchase price back as a taxable distribution. This is called
"buying a dividend." Unless you hold the Fund in a tax-deferred account, you
will have to include the distribution in your gross income for tax purposes,
even though you may not have participated in the increase of the Fund's
appreciation.
OUR PARTNERS
As a Montgomery shareholder, you may see the names of our partners on a regular
basis. We all work together to ensure that your investments are handled
accurately and efficiently.
Funds Distributor, Inc., located in New York City and Boston, distributes The
Montgomery Funds.
DST Systems, located in Kansas City, Missouri, provides transfer agent services
and performs certain record keeping and accounting functions for the Fund.
-21-
<PAGE>
You can find more information about the Montgomery Global Long-Short Fund's
investment policies in the Statement of Additional Information (SAI),
incorporated by reference in this prospectus, which is available free of charge.
To request a free copy of the SAI, call us at 800.627.7933. You can review and
copy further information about The Montgomery Funds II, including the SAI, at
the Securities and Exchange Commission's (SEC's) Public Reference Room in
Washington, D.C. Call 800.SEC.0330 to obtain information about the operation of
the Public Reference Room. Reports and other information about The Montgomery
Funds II are available through the SEC's Web site at www.sec.gov. You can also
obtain copies of this information, upon payment of a duplicating fee, by writing
the Public Reference Section of the SEC, Washington, D.C., 20549-6009.
You can also find further information about Montgomery Global Long-Short Fund in
our annual and semiannual shareholder reports, which discuss the market
conditions and investment strategies that significantly affected each Fund's
performance during the previous fiscal period. To request a copy of the most
recent annual or semiannual report, call us at 800.627.7933.
Corporate Headquarters:
The Montgomery Funds
101 California Street
San Francisco, CA 94111-9361
800.627.7933
www.montgomeryfunds.com
SEC File Nos.: The Montgomery Funds II 811-8064
Funds Distributor, Inc. 7/99
-22-
<PAGE>
----------------------------------------------------
PART C
OTHER INFORMATION
---------------------------------------------------
<PAGE>
THE MONTGOMERY FUNDS II
--------------
FORM N-1A
--------------
PART C
--------------
Item 23. Exhibits
(a) Amended and Restated Agreement and Declaration of Trust as
incorporated by reference to Post-Effective Amendment No. 37
to the Registration Statement as filed with the Commission on
October 29, 1998 ("Post-Effective Amendment No. 37").
(b) Amended and Restated By-Laws is incorporated by reference to
Post-Effective Amendment No. 37.
(c) Instruments Defining Rights of Security Holder - Not
applicable.
(d) Investment Advisory Contracts - Form of Investment Management
Agreement is incorporated by reference to Post-Effective
Amendment No. 22 to the Registration Statement as filed with
the Commission on July 31, 1997 ("Post-Effective Amendment No.
22").
(e) Form of Underwriting Agreement is incorporated by reference to
Post-Effective Amendment No. 22.
(f) Bonus or Profit Sharing Contracts - Not applicable.
(g) Form of Custody Agreement is incorporated by reference to
Post-Effective Amendment No. 37.
(h) Other Material Contracts:
(1) Form of Administrative Services Agreement is
incorporated by reference to Post-Effective Amendment
No. 22.
(2) Form of Shareholder Services Plan is incorporated by
reference to Post-Effective Amendment No. 37.
(i) Opinion of Counsel as to legality of shares is incorporated by
reference to Post-Effective Amendment No. 42 to the
Registration Statement as filed with the Commission on May 27,
1999.
(j) Other Opinions: Independent Auditors' Consent - Not
applicable.
(k) Omitted Financial Statements - Not applicable.
(l) Initial Capital Agreements: Letter of Understanding re:
Initial Shares is incorporated by reference to Post-Effective
Amendment No. 37.
(m) Rule 12b-1 Plan: Form of Share Marketing Plan (Rule 12b-1Plan)
is incorporated by reference to Post-Effective Amendment No.
22.
(n) Financial Data Schedule. Financial Data Schedules are
incorporated by reference to Form NSAR-A filed on March 1,
1999.
(o) 18f-3 Plan - Form of Amended and Restated Multiple Class Plan
is incorporated by reference to Post-Effective Amendment No.
37.
<PAGE>
Item 24. Persons Controlled by or Under Common Control with the Fund
Montgomery Asset Management, LLC, a Delaware limited liability
company, is the manager of each series of the Registrant, of The Montgomery
Funds, a Massachusetts business trust, and of The Montgomery Funds III, a
Delaware business trust. Montgomery Asset Management, LLC is a subsidiary of
Commerzbank AG based in Frankfurt, Germany. The Registrant, The Montgomery Funds
and The Montgomery Funds III are deemed to be under the common control of each
of those two entities.
Item 25. Indemnification
Article VII of the Agreement and Declaration of Trust empowers the
Trustees of the Trust, to the full extent permitted by law, to purchase with
Trust assets insurance for indemnification from liability and to pay for all
expenses reasonably incurred or paid or expected to be paid by a Trustee or
officer in connection with any claim, action, suit or proceeding in which he or
she becomes involved by virtue of his or her capacity or former capacity with
the Trust.
Article VI of the By-Laws of the Trust provides that the Trust shall
indemnify any person who was or is a party or is threatened to be made a party
to any proceeding by reason of the fact that such person is and other amounts or
was an agent of the Trust, against expenses, judgments, fines, settlement and
other amounts actually and reasonable incurred in connection with such
proceeding if that person acted in good faith and reasonably believed his or her
conduct to be in the best interests of the Trust. Indemnification will not be
provided in certain circumstances, however, including instances of willful
misfeasance, bad faith, gross negligence, and reckless disregard of the duties
involved in the conduct of the particular office involved.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "1933 Act"), may be permitted to the Trustees,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the 1933 Act and is, therefore, unenforceable in the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a Trustee, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such Trustee, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the 1933 Act
and will be governed by the final adjudication of such issue.
Item 26. Business and Other Connections of the Investment Adviser
Effective July 31, 1997, Montgomery Asset Management, L.P. completed
the sale of substantially all of its assets to the current investment manager,
Montgomery Asset Management, LLC ("MAM, LLC"), a subsidiary of Commerzbank A.G.
Information about the officers and directors of MAM, LLC is provided below. The
address for the following persons is 101 California Street, San Francisco,
California 94111.
R. Stephen Doyle Chairman of the Board of Directors and Chief
Executive Officer of MAM, LLC
Mark B. Geist President and Director of MAM, LLC
F. Scott Tuck Executive Vice President of MAM, LLC
David E. Demarest Secretary, Treasurer and Executive Vice
President of MAM, LLC
The following directors of MAM, LLC also are officers of Commerzbank
AG. The address for the following persons is Neue Mainzer Strasse 32-36,
Frankfurt am Main, Germany.
Heinz Josef Hockmann Director of MAM, LLC
Dietrich-Kurt Frowein Director of MAM, LLC
Andreas Kleffel Director of MAM, LLC
Before July 31, 1997, Montgomery Securities, which is a broker-dealer
and the prior principal underwriter of the Registrant, was the sole limited
partner of the prior investment manager, Montgomery Asset Management, L.P.
("MAM, L.P."). The general partner of MAM, L.P. was a corporation, Montgomery
Asset Management, Inc. ("MAM, Inc."), certain of the officers and directors of
which now serve in similar capacities for MAM, LLC.
C-2
<PAGE>
Item 27. Principal Underwriter
(a) Funds Distributor, Inc. (the "Distributor") acts as principal
underwriter for the following investment companies.
American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
BJB Investment Funds
The Brinson Funds
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Equity Funds, Inc.
Founders Funds, Inc.
Harris Insight Funds Trust
HT Insight Funds, Inc. d/b/a Harris Insight Funds
J.P. Morgan Institutional Funds
J.P. Morgan Funds
JPM Series Trust
JPM Series Trust II
LaSalle Partners Funds, Inc.
Kobrick-Cendant Investment Trust
Merrimac Series
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
The Munder Funds, Inc.
National Investors Cash Management Fund, Inc.
Orbitex Group of Funds
SG Cowen Funds, Inc.
SG Cowen Income + Growth Fund, Inc.
SG Cowen Standby Reserve Fund, Inc.
SG Cowen Standby Tax-Exempt Reserve Fund, Inc.
SG Cowen Series Funds, Inc.
St. Clair Funds, Inc.
The Skyline Funds
Waterhouse Investors Family of Funds, Inc.
WEBS Index Fund, Inc.
The Distributor is registered with the Securities and Exchange
Commission as a broker-dealer and is a member of the National
Association of Securities Dealers. Funds Distributor is
located at 60 State Street, Suite 1300, Boston, Massachusetts
02109. Funds Distributor is an indirect wholly owned
subsidiary of Boston Institutional Group, Inc., a holding
company all of whose outstanding shares are owned by key
employees.
(b) The following is a list of the executive officers, directors
and partners of Funds Distributor, Inc.
C-3
<PAGE>
Director, President and Marie E. Connolly
Chief Executive Officer
Executive Vice President George A. Rio
Executive Vice President Donald R. Roberson
Executive Vice President William S. Nichols
Senior Vice President, General Margaret W. Chambers
Counsel, Chief Compliance
Officer, Secretary and Clerk
Senior Vice President Michael S. Petrucelli
Director, Senior Vice President, Joseph F. Tower, III
Treasurer and Chief
Financial Officer
Senior Vice President Paula R. David
Senior Vice President Allen B. Closser
Senior Vice President Bernard A. Whalen
Chairman and Director William J. Nutt
(c) Not Applicable.
Item 28. Location of Accounts and Records.
The accounts, books, or other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940, as amended (the "Investment
Company Act") will be kept by the Registrant's Transfer Agent, DST Systems,
Inc., P.O. Box 1004 Baltimore, Kansas City, Missouri 64105, except those records
relating to portfolio transactions and the basic organizational and Trust
documents of the Registrant (see Subsections (2)(iii), (4), (5), (6), (7), (9),
(10) and (11) of Rule 31a-1(b)), which will be kept by the Registrant at 101
California Street, San Francisco, California 94111.
Item 29. Management Services.
There are no management-related service contracts not discussed in
Parts A and B.
Item 30. Undertakings.
(a) Not applicable.
(b) Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's last
annual report to shareholders, upon request and without
charge.
(c) Registrant has undertaken to comply with Section 16(a) of the
Investment Company Act which requires the prompt convening of
a meeting of shareholders to elect trustees to fill existing
vacancies in the Registrant's Board of Trustees in the event
that less than a majority of the trustees have been elected to
such position by shareholders. Registrant has also undertaken
promptly to call a meeting of shareholders for the purpose of
voting upon the question of removal of any Trustee or Trustees
when requested in writing to do so by the record holders of
not less than 10 percent of the Registrant's outstanding
shares and to assist its shareholders in communicating with
other shareholders in accordance with the requirements of
Section 16(c) of the Investment Company Act.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, the Registrant has duly
caused this Amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of San Francisco, the
State of California, on this 27th day of May 1999.
THE MONTGOMERY FUNDS II
By: George A. Rio*
----------------------------------------
George A. Rio
President and Principal Executive
Officer; Treasurer and Principal
Financial and Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to Registrant's Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
George A. Rio* President and May 27, 1999
- ---------------------- Principal Executive Officer,
George A. Rio Treasurer and Principal
Financial and Accounting Officer
R. Stephen Doyle * Chairman of the May 27, 1999
- ---------------------- Board of Trustees
R. Stephen Doyle
Andrew Cox * Trustee May 27, 1999
- ----------------------
Andrew Cox
Cecilia H. Herbert * Trustee May 27, 1999
- ----------------------
Cecilia H. Herbert
John A. Farnsworth * Trustee May 27, 1999
- ----------------------
John A. Farnsworth
* By: /s/ Julie Allecta
- ----------------------
Julie Allecta, Attorney-in-Fact
pursuant to Powers of Attorney previously filed.
C-5
