As filed with the Securities and Exchange Commission on August 31, 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. 46
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 47
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)
Johanne Castro, 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)
-----
X 60 days after filing pursuant to Rule 485(a)(1)
-----
75 days after filing pursuant to Rule 485(a)(2)
-----
on _________________ 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 - Combined Prospectus for Class P shares of Montgomery U.S.
Asset Allocation Fund and various series of another
Registrant, The Montgomery Funds (File Nos.
33-34841 and 811-6011).
Part B - Combined Statement of Additional Information for Class R
shares of the Montgomery Global Long-Short Fund and the
Montgomery U.S. Asset Allocation Fund and various series of
another Registrant, The Montgomery Funds (File Nos. 33-34841
and 811-6011), and Class P shares of certain Funds us
incorporated by reference to Post-Effective Amendment No. 44
Part C - Other Information
Signature Page
Exhibits
<PAGE>
- --------------------------------------------------------------------------------
PART A
COMBINED PROSPECTUS FOR CLASS P SHARES OF
MONTGOMERY U.S. ASSET ALLOCATION FUND
AND
VARIOUS SERIES OF THE MONTGOMERY FUNDS
- --------------------------------------------------------------------------------
<PAGE>
Prospectus
October 31, 1999
The Montgomery FundsSM
U.S. Equity Funds
Growth Fund
Small Cap Fund
Equity Income Fund
International & Global Equity Funds
International Growth Fund
International Small Cap Fund
Emerging Markets Fund
Multi-Strategy Funds
Select 50 Fund
U.S. Asset Allocation Fund
U.S. Fixed-Income & Money Market Funds
Short Duration Government Bond Fund
Government Money Market Fund
California Tax-Free Intermediate Bond Fund
The Montgomery Funds have registered each 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 Funds.
The SEC has not approved or disapproved these securities or passed upon the
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
1
<PAGE>
- ---------------------------
How to Contact Us
- ---------------------------
[Sidebar]
Montgomery Shareholder
Service Representatives
800.572.FUND [3863]
Available 6 A.M. to 5 P.M.
Pacific time
Montgomery Web Site
www.montgomeryfunds.com
Address General
Correspondence to:
The Montgomery Funds
101 California Street
San Francisco, CA
94111-9361
TABLE OF CONTENTS
U.S. Equity Funds
Montgomery Growth Fund.............................................
Montgomery Small Cap Fund..........................................
Montgomery Equity Income Fund......................................
International and Global Equity Funds
Montgomery International Growth Fund...............................
Montgomery International Small Cap Fund............................
Montgomery Emerging Markets Fund...................................
Multi-Strategy Funds
Montgomery Select 50 Fund..........................................
Montgomery U.S. Asset Allocation Fund..............................
U.S. Fixed-Income and Money Market Funds
Montgomery Short Duration Government Bond Fund.....................
Montgomery Government Money Market Fund............................
Montgomery California Tax-Free Intermediate Bond Fund..............
Portfolio Management....................................................
Additional Investment Strategies and Related Risks......................
The Euro: Single European Currency................................
Defensive Investments..............................................
Portfolio Turnover.................................................
The Year 2000......................................................
Additional Benchmark Information...................................
Financial Highlights....................................................
Account Information.....................................................
Becoming a Montgomery Shareholder..................................
How Fund Shares are Priced.........................................
2
<PAGE>
Buying Additional Shares...........................................
Exchanging Shares..................................................
Selling Shares.....................................................
Other Policies.....................................................
Tax Information....................................................
After You Invest...................................................
This prospectus contains important information about the investment objectives,
strategies and risks of The Montgomery Funds that you should know before you
invest in them. Please read it carefully and keep it on hand for future
reference. Please be aware that The Montgomery Funds:
[] Are not bank deposits
[] Are 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 Funds.
This prospectus describes only the Funds' Class P shares, which are sold only
through financial intermediaries and financial professionals. The Montgomery
Funds offer other classes of shares with different fees and expenses to eligible
investors.
3
<PAGE>
U.S. EQUITY FUNDS
Growth Fund | MNGFX
Objective
[] Seeks long-term capital appreciation by investing in growth-oriented U.S.
companies
Strategy [clipart]
The Fund may invest in U.S. companies of any size, but invests at least 65% of
its total assets in those companies whose shares have a total stock market value
(market capitalization) of at least $1 billion.
The Fund's strategy is to identify well-managed U.S. companies whose share
prices appear to be undervalued relative to the firms' growth potential. The
managers rigorously analyze all prospective holdings by subjecting them to the
following three steps of their investment process:
[] Identify companies with improving business fundamentals
[] Conduct in-depth analysis of each company's current business and future
prospects
[] Analyze each company's price to determine whether its growth prospects have
been discovered by the market
Risks [clipart]
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. As with any stock fund, the
value of your investment will fluctuate on a day-to-day basis with movements in
the stock market, as well as in response to the activities of individual
companies. To the extent that the Fund is overweighted in certain market sectors
compared with the Standard and Poor's 500 Composite Price Index, the Fund may be
more volatile than the S&P 500.
When the Fund's portfolio managers think that market conditions are not
favorable or when they are unable to locate attractive investments, they may
(but are not required to) temporarily increase the Fund's cash position. Larger
cash positions can be a defensive measure in adverse market conditions. Should
the market advance, however, the Fund may not participate as much as it might
have if more of its assets were invested in stocks.
4
<PAGE>
- --------------------------------------------------------------------------------
Past Fund Performance The bar chart on the left below shows the risks of
investing in the Fund and how the Fund's total return has varied from
year-to-year. The table on the right compares the Fund's performance with a
commonly used index for its market segment. Of course, past performance is no
guarantee of future results.
- --------------------------------------------------------------------------------
[bar chart]
1997 1998
- ------------------- -----------------
x.xx% 2.02%
During the two-year period described above in the bar chart, the Fund's best
quarter was Q_ 199_ (x.xx%) and the worst quarter was Q_ 199_ (x.xx%).
Growth Fund 2.02% 15.11%
S&P 500 Index 28.75% x.xx%
- ----------------------------------------------------------------------------
1 Year Inception
(1/12/96)
1999 Return Through 9/30/99: x.xx% Average Annual Returns Through 12/31/98
Fees & Expenses [clipart]
<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 or deferred sales
loads and does not charge shareholders for exchanging shares or reinvesting
dividends.
<S> <C>
Shareholder Fees (fees paid directly from your investment)
Redemption Fee* 0.00%
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
Management Fee 0.95%
Distribution/Service (12b-1) Fee 0.25%
Other Expenses 0.45%
Total Annual Fund Operating Expenses 1.65%
<FN>
* $10 will be deducted from redemption proceeds sent by wire or overnight
courier.
</FN>
</TABLE>
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, whether or not you
sold your shares at the end of each period. It 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
- ----------------------------------------------------------
$167 $519 $895 $1,947
[clipart] [sidebar]
Portfolio Management
Roger Honour
Kathryn Peters
For more details see page __
For financial highlights
see page ___
5
<PAGE>
Small Cap Fund | MNSCX
Objective
[] Seeks long-term capital appreciation by investing in rapidly growing U.S.
small-cap companies
Strategy [clipart]
The Fund invests at least 65% of its total assets in the stocks of U.S.
companies whose shares have a total stock market value (market capitalization)
of $1.5 billion or less at the time of purchase.
The Fund's portfolio managers follow a growth strategy to invest in potentially
attractive small-cap companies that are at an early or transitional stage of
their development. The managers look for companies that they believe can thrive
even in adverse economic conditions. Specifically, they search for companies
that they think have the potential to:
[] Gain market share within their industries
[] Deliver consistently high profits to shareholders
[] Increase their corporate earnings each quarter
[] Provide solutions for current or impending problems in their respective
industries or in society overall
Risks [clipart]
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. As with any stock fund, the
value of your investment will fluctuate on a day-to-day basis with movements in
the stock market, as well as in response to the activities of individual
companies. To the extent that the Fund is overweighted in certain market sectors
compared with the Russell 2000 Index, the Fund may be more volatile than the
Russell 2000.
The Fund's focus on small-cap stocks may expose shareholders to additional
risks. Smaller companies typically have more limited product lines, markets and
financial resources than larger companies, and their securities may trade less
frequently and in more limited volume than those of larger, more mature
companies. As a result, small-cap stocks--and therefore the Fund--may fluctuate
significantly more in value than larger-cap stocks and funds that focus on them.
6
<PAGE>
- --------------------------------------------------------------------------------
Past Fund Performance The bar chart on the left below shows the risks of
investing in the Fund and how the Fund's total return has varied from
year-to-year. The table on the right compares the Fund's performance with a
commonly used index for its market segment. Of course, past performance is no
guarantee of future results.
- --------------------------------------------------------------------------------
[bar chart]
1997 1998
- -------------- -----------
x.xx% -8.19
During the two-year period described above in the bar chart, the Fund's best
quarter was Q_ 199_ (x.xx%) and the worst quarter was Q_ 199_ (x.xx%).
Small Cap Fund -8.19% 4.93%
Russell 2000 Index -2.55% x.xx%
- -------------------------------------------------------------------------------
1 Year Inception
(7/1/96)
1999 Return Through 9/30/99: x.xx% Average Annual Returns Through 12/31/98
Fees & Expenses [clipart]
<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 or deferred sales
loads on this Fund and does not charge shareholders for exchanging shares or
reinvesting dividends.
<S> <C>
Shareholder Fees (fees paid directly from your investment)
Redemption Fee * 0.00%
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
Management Fee 1.00%
Distribution/Service (12b-1) Fee 0.25%
Other Expenses 0.32%
- --------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.57%
<FN>
* $10 will be deducted from redemption proceeds sent by wire or overnight courier.
</FN>
</TABLE>
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, whether or not you
sold your shares at the end of each period. It 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
- --------------------------------------------------------
$159 $495 $853 $1,860
[clipart][sidebar]
Portfolio Management
Stuart Roberts
Brad Kidwell
Cam Philpott
For more details see page ___.
For financial highlights
see page ___
7
<PAGE>
Equity Income Fund | MNEIX
Objective
[] Seeks current income and long-term capital appreciation while striving to
minimize portfolio volatility by investing in large, dividend-paying U.S.
companies
Strategy [clipart]
The Fund seeks to provide a greater yield than the average yield of Standard &
Poor's 500 Composite Price Index stocks by investing at least 65% of its total
assets in dividend-paying stocks of large U.S. companies.
The Fund's strategy is to identify mature companies that have a history of
paying regular dividends to shareholders and offer a dividend yield well above
their historical average and/or the market's average. (Dividend yield is
calculated by dividing the dividend a company pays out per share of common stock
by the stock market price of those shares.) The Fund typically invests in
companies for two to four years. The portfolio manager will usually begin to
reduce the Fund's position in a company as its share price moves up and its
dividend yield drops to the lower end of its historical range. He may also pare
back or sell the Fund's position in a company that reduces or eliminates its
dividend or if he believes that the company is about to do so.
Risks [clipart]
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. As with any stock fund, the
value of your investment will fluctuate on a day-to-day basis with movements in
the stock market, as well as in response to the activities of individual
companies. Increased interest rates may reduce the value of your investment in
this Fund. Although the Fund seeks to provide a consistent level of income to
shareholders, its yield may fluctuate significantly in the short term.
8
<PAGE>
- --------------------------------------------------------------------------------
Past Fund Performance The bar chart on the left below shows the risks of
investing in the Fund and how the Fund's total return has varied from
year-to-year. The table on the right compares the Fund's performance with a
commonly used index for its market segment. Of course, past performance is no
guarantee of future results.
- --------------------------------------------------------------------------------
[bar chart]
1997 1998
- ------------------- -----------------
x.xx% 10.11%
During the two-year period described above in the bar chart, the Fund's best
quarter was Q_ 199_ (x.xx%) and the worst quarter was Q_ 199_ (x.xx%).
Equity Income Fund 10.11% 18.42%
S&P 500 Index 28.75% x.xx%
- --------------------------------------------------------------------------------
1 Year Inception
(3/11/96)
1999 Return Through 9/30/99: x.xx% Average Annual Returns Through 12/31/98
Fees & Expenses [clipart]
<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 or deferred sales
loads and does not charge shareholders for exchanging shares or reinvesting
dividends.
<S> <C>
Shareholder Fees (fees paid directly from your investment)
Redemption Fee * 0.00%
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)++
Management Fee 0.60%
Distribution/Service (12b-1) Fee 0.25%
Other Expenses 0.62%
- --------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.47%
Fee Reduction and/or Expense Reimbursement 0.37%
Net Expenses 1.10%
<FN>
* $10 will be deducted from redemption proceeds sent by wire or overnight
courier.
++ Montgomery Asset Management has contractually agreed to reduce its fees
and/or absorb expenses to limit the Fund's total annual operating expenses
(excluding interest and tax expenses and 12b-1 fee) to 0.85%. This contract
has a rolling 10-year term.
</FN>
</TABLE>
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, whether or not you
sold your shares at the end of each period. It 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
- -------------------------------------------------------
$112 $349 $605 $1,336
[clipart] [sidebar]
Portfolio Management
William King
For more details see page ___
For financial highlights
see page ___
9
<PAGE>
INTERNATIONAL GLOBAL
EQUITY FUNDS
International Growth Fund | MNIGX
Objective
[] Seeks long-term capital appreciation by investing in medium- and large-cap
companies in developed stock markets outside the United States
Strategy [clipart]
The Fund invests at least 65% of its total assets in the common stocks of
companies outside the United States whose shares have a stock market value
(market capitalization) of more than $1 billion. The Fund currently concentrates
its investments in the stock markets of western Europe, particularly the United
Kingdom, France, Germany, Italy and the Netherlands, as well as developed
markets in Asia, such as Japan and Hong Kong. The Fund typically invests in at
least three countries outside the United States, with no more than 40% of its
assets in any one country.
The portfolio managers seek well-managed companies that they believe will be
able to increase their sales and corporate earnings on a sustained basis. In
addition, the portfolio managers purchase shares of companies that they consider
to be under- or reasonably-valued relative to their long-term prospects. The
managers favor companies that they believe have a competitive advantage, offer
innovative products or services and may profit from such trends as deregulation
and privatization. On a strategic basis, the Fund's assets may be allocated
among countries in an attempt to take advantage of market trends. The Fund's
portfolio managers and analysts frequently travel to the countries in which the
Fund invests or may invest to gain firsthand insight into the economic,
political and social trends that affect investments in those countries.
Risks [clipart]
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. As with any stock fund, the
value of your investment will fluctuate on a day-to-day basis with movements in
the stock market, as well as in response to the activities of individual
companies.
By investing primarily in foreign stocks, the Fund may expose 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, most of the securities in which the Fund invests are denominated in
foreign currencies, whose value may decline against the U.S. dollar.
10
<PAGE>
- --------------------------------------------------------------------------------
Past Fund Performance The bar chart on the left below shows the risks of
investing in the Fund and how the Fund's total return has varied from
year-to-year. The table on the right compares the Fund's performance with a
commonly used index for its market segment. Of course, past performance is no
guarantee of future results.
- --------------------------------------------------------------------------------
[bar chart]
1997 1998
- ------------------- -----------------
x.xx% 28.65%
During the two-year period described above in the bar chart, the Fund's best
quarter was Q_ 199_ (x.xx%) and the worst quarter was Q_ 199_ (x.xx%).
International Growth Fund 28.65% 20.14%
MSCI EAFE Index+ 20.00% x.xx%
- ------------------------------------------------------------------------------
1 Year Inception
(3/11/96)
+See page __ for a description of this index.
1999 Return Through 9/30/99: x.xx% Average Annual Returns Through 12/31/98
Fees & Expenses [clipart]
<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 or deferred sales
loads and does not charge shareholders for exchanging shares or reinvesting
dividends.
<S> <C>
Shareholder Fees (fees paid directly from your investment)
Redemption Fee * 0.00%
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)++
Management Fee 1.12%
Distribution/Service (12b-1) Fee 0.25%
Other Expenses 0.73%
- --------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 2.10%
Fee Reduction and/or Expense Reimbursement 0.20%
Net Expenses 1.90%
<FN>
* $10 will be deducted from redemption proceeds sent by wire or overnight
courier.
++ Montgomery Asset Management has contractually agreed to reduce its fees
and/or absorb expenses to limit the Fund's total annual operating expenses
(excluding interest and tax expenses and 12b-1 fee) to 1.65%. This contract
has a 10-year term.
</FN>
</TABLE>
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, whether or not you
sold your shares at the end of each period. It 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
- -------------------------------------------------------
$192 $595 $1,024 $2,213
[clipart] [sidebar]
Portfolio Management
John Boich
Oscar Castro
For more details see page ___
For financial highlights
see page ___
11
<PAGE>
International Small Cap Fund | MNISX
Objective
[] Seeks long-term capital appreciation by investing in small-cap companies in
developed stock markets outside the United States
Strategy [clipart]
The Fund invests at least 65% of its total assets in the stocks of companies
outside the United States whose shares have a market value (market
capitalization) profile consistent with the Salomon Smith Barney World Extended
Market Index excluding the United States. (This index had a weighted average
market capitalization of $2.3 billion and a median market capitalization of $404
million on March 31, 1999.) The Fund typically invests most of its assets in the
developed stock markets of western Europe and Asia, particularly the United
Kingdom, France, Germany, Italy, Sweden and Japan. The Fund invests in at least
three different countries outside the United States, with no more than 40% of
its assets in any one country.
The Fund's portfolio manager seeks well-managed, small-cap companies that he
believes will be able to increase sales and corporate earnings on a sustained
basis. The portfolio manager must consider the shares of these companies to be
under- or reasonably valued relative to their long-term prospects and favors
companies that he believes have a competitive advantage, offer innovative
products or services and may profit from such trends as deregulation and
privatization. On a strategic basis, the Fund's assets may be allocated among
countries in an attempt to take advantage of market trends. The Funds portfolio
manager and analysts frequently travel to the countries in which the Fund
invests or may invest to gain firsthand insight into the economic, political and
social trends that affect investments in those countries.
Risks [clipart]
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. As with any stock fund, the
value of your investment will fluctuate on a day-to-day basis with movements in
the stock market, as well as in response to the activities of individual
companies.
In addition, 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. Other risks of focusing on small foreign companies include limited or
inaccurate information; limited product lines, markets or financial resources;
and securities that may trade less frequently and in limited volume. As a
result, small-cap stocks--and therefore the Fund--may fluctuate significantly
more in value than funds that focus on larger-cap stocks. Most of the securities
in which the Fund invests are denominated in foreign currencies, whose value may
decline against the U.S. dollar.
12
<PAGE>
- --------------------------------------------------------------------------------
Past Fund Performance The bar chart on the left below can give some indication
of the risks of investing in the Fund by allowing a comparison to market
performance. The table on the right compares the Fund's performance with a
commonly used index for its market segment. Of course, past performance is no
guarantee of future results.
- --------------------------------------------------------------------------------
[bar chart]
1998
- -------------------
10.33%
During the one-year period described above in the bar chart, the Fund's best
quarter was Q_ 199_ (x.xx%) and the worst quarter was Q_ 199_ (x.xx%).
International Small Cap Fund 10.33% -1.66%
Salomon Smith Barney World Extended
(ex-U.S.) Market Index+ 12.15% x.xx%
- --------------------------------------------------------------------------------
1 Year Inception
(6/9/97)
+See page __ for a description of this index.
1999 Return Through 9/30/99: x.xx% Average Annual Returns Through 12/31/98
Fees & Expenses [clipart]
<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 or deferred sales
loads on this Fund and does not charge shareholders for exchanging shares or
reinvesting dividends.
<S> <C>
Shareholder Fees (fees paid directly from your investment)
Redemption Fee* 0.00%
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)++
Management Fee 1.24%
Distribution/Service (12b-1) Fee 0.25%
Other Expenses 0.88%
- --------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 2.37%
Fee Reduction and/or Expense Reimbursement 0.22%
Net Expenses 2.15%
<FN>
* $10 will be deducted from redemption proceeds sent by wire or overnight
courier.
++ Montgomery Asset Management has contractually agreed to reduce its fees
and/or absorb expenses to limit the Fund's total annual operating expenses
(excluding interest and tax expenses and 12b-1 fee) to 1.90%. This contract
has a rolling 10-year term.
</FN>
</TABLE>
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, whether or not you
sold your shares at the end of each period. It 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
- -------------------------------------------------------
$217 $671 $1,151 $2,471
[clipart][sidebar]
Portfolio Management
John Boich
For more details see page ___
For financial highlights
see page ___
13
<PAGE>
Emerging Markets Fund | MNEMX
Objective
[] Seeks long-term capital appreciation by investing in companies based or
operating primarily in developing economies throughout the world
Strategy [clipart]
The Fund invests at least 65% of its total assets in the stocks of companies
based in the world's developing economies. The Fund typically maintains
investments in at least six of these countries at all times, with no more than
35% of its assets in any single one of them. These may include:
[] Latin America: Argentina, Brazil, Chile, Colombia, Costa Rica, Jamaica,
Mexico, Peru, Trinidad and Tobago, Uruguay and Venezuela
[] Asia: Bangladesh, China/Hong Kong, India, Indonesia, Malaysia, Pakistan,
the Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand and
Vietnam
[] Europe: Czech Republic, Greece, Hungary, Kazakhstan, Poland, Portugal,
Romania, Russia, Slovakia, Slovenia, Turkey and Ukraine
[] The Middle East: Israel and Jordan
[] Africa: Egypt, Ghana, Ivory Coast, Kenya, Morocco, Nigeria, South Africa,
Tunisia and Zimbabwe
The Fund's strategy combines computer-based screening techniques with in-depth
financial review and on-site analysis of companies, countries and regions to
identify potential investments. The Fund's portfolio managers and analysts
frequently travel to the emerging markets to gain firsthand insight into the
economic, political and social trends that affect investments in those
countries. The Fund allocates its assets among emerging countries with stable or
improving macroeconomic environments and invests in companies within those
countries that the portfolio managers believe have high capital appreciation
potential without excessive risks. The portfolio managers strive to keep the
Fund well diversified across individual stocks, industries and countries to
reduce its overall risk.
Risks [clipart]
By investing in stocks, the Fund may expose you to certain risks that could
cause you to lose money, particularly a decline in a holding's share price or an
overall decline in the stock market. 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 relative immaturity and occasional
instability. Some emerging markets restrict the flow of money into or out of
their stock markets and 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 based on only a few industries or on
revenue from particular commodities and international aid. Most of the
securities in which the Fund invests are denominated in foreign currencies,
whose value may decline against the U.S. dollar.
14
<PAGE>
- --------------------------------------------------------------------------------
Past Fund Performance The bar chart on the left below shows the risks of
investing in the Fund and how the Fund's total return has varied from
year-to-year. The table on the right compares the Fund's performance with a
commonly used index for its market segment. Of course, past performance is no
guarantee of future results.
- --------------------------------------------------------------------------------
[bar chart]
1997 1998
- ------------------- -----------------
x.xx% -38.89%
During the two-year period described above in the bar chart, the Fund's best
quarter was Q_ 199_ (x.xx%) and the worst quarter was Q_ 199_ (x.xx%).
Emerging Markets Fund -38.89% -14.37%
IFC Global Index+ -21.10% x.xx%
- --------------------------------------------------------------------------------
1 Year Inception
(3/11/96)
+See page __ for a description of this index.
1999 Return Through 9/30/99: x.xx% Average Annual Returns Through 12/31/98
Fees & Expenses [clipart]
<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 or deferred sales
loads on this Fund and does not charge shareholders for exchanging shares or
reinvesting dividends.
<S> <C>
Shareholder Fees (fees paid directly from your investment)
Redemption Fee * 0.00%
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)++
Management Fee 1.16%
Distribution/Service (12b-1) Fee 0.25%
Other Expenses 1.16%
- --------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 2.57%
Fee Reduction and/or Expense Reimbursement 0.42%
Net Expenses 2.15%
<FN>
* $10 will be deducted from redemption proceeds sent by wire or overnight
courier.
++ Montgomery Asset Management has contractually agreed to reduce its fees
and/or absorb expenses to limit the Fund's total annual operating expenses
(excluding interest and tax expenses and 12b-1 fee) to 1.90%. This contract
has a rolling 10-year term.
</FN>
</TABLE>
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, whether or not you
sold your shares at the end of each period. It 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
- -------------------------------------------------------
$217 $671 $1,151 $2,471
[clipart][sidebar]
Portfolio Management
Josephine Jimenez
Bryan Sudweeks
Frank Chiang
For more details see page ___.
For financial highlights
see page ___
15
<PAGE>
Select 50 Fund | MNSFX
Objective
[] Seeks long-term capital appreciation by investing in 10 companies from each
of five different investment disciplines, for a total of 50 securities
Strategy [clipart]
Five of Montgomery's portfolio management teams each select approximately 10
stocks that they believe may offer the greatest capital appreciation potential
from their respective areas of expertise. These currently include:
[] U.S. growth [] U.S. equity income [] Emerging markets
[] U.S. emerging growth [] International equity
The result is a concentrated portfolio of at least 50 stocks that is allocated
approximately equally among Montgomery's five equity disciplines and is well
diversified with typically 60% allotted to U.S. securities of all capitalization
ranges and 40% invested internationally. For details about the teams' individual
strategies, please see the sections on the Montgomery Growth, U.S. Emerging
Growth, Equity Income, International Growth and Emerging Markets Funds in this
prospectus.
Risks [clipart]
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. Although the Select 50 Fund
diversifies its assets across different industries, market segments and
countries, it typically invests in just 50 securities. As a result, the value of
shares in the Fund may vary more than those of mutual funds investing in a
greater number of securities.
In addition, the Fund invests in companies in emerging and developed foreign
markets (each typically 20%), which may expose it to additional risks. Foreign
and emerging stock markets tend to be more volatile than the U.S. market due to
economic and political instability and regulatory conditions. This risk is
heightened in the case of emerging markets because of their relative economic
and political immaturity and, in many instances, dependence on only a few
industries. They also tend to be less liquid, more volatile, and offer less
regulatory protection for investors. Also, many of the securities in which the
Fund invests are denominated in foreign currencies, whose value may decline
against the U.S. dollar.
The Fund also invests a significant portion of its assets (typically 20%) in
smaller companies, which may offer greater capital appreciation potential than
larger companies but at potentially greater risk. Smaller companies may have
more limited product lines, markets or financial resources than larger
companies, and their securities may trade less frequently and in more limited
volume than those of larger, more mature companies. As a result, small-cap
stocks--and therefore the Fund--may fluctuate significantly more in value than
larger-cap stocks and funds that focus exclusively on them.
16
<PAGE>
- --------------------------------------------------------------------------------
Past Fund Performance The bar chart on the left below shows the risks of
investing in the Fund and how the Fund's total return has varied from
year-to-year. The table on the right compares the Fund's performance with a
commonly used index for its market segment. Of course, past performance is no
guarantee of future results.
- --------------------------------------------------------------------------------
[bar chart]
1997 1998
- ------------------- -----------------
x.xx% 9.16%
During the two-year period described above in the bar chart, the Fund's best
quarter was Q_ 199_ (x.xx%) and the worst quarter was Q_ 199_ (x.xx%).
Select 50 Fund 9.16% 18.00%
S&P 500 Index 28.75% x.xx%
- --------------------------------------------------------------------------------
*Calculated from 11/30/96 1 Year Inception
(12/12/96)
1999 Return Through 9/30/99: x.xx% Average Annual Returns Through 12/31/98
Fees & Expenses [clipart]
<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 or deferred sales
loads and does not charge shareholders for exchanging shares or reinvesting
dividends.
<S> <C>
Shareholder Fees (fees paid directly from your investment)
Redemption Fee* 0.00%
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)++
Management Fee 1.25%
Distribution/Service (12b-1) Fee 0.25%
Other Expenses 0.66%
- --------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 2.16%
Fee Reduction and/or Expense Reimbursement 0.11%
Net Expenses 2.05%
<FN>
* $10 will be deducted from redemption proceeds sent by wire or overnight
courier.
++ Montgomery Asset Management has contractually agreed to reduce its fees
and/or absorb expenses to limit the Fund's total annual operating expenses
(excluding interest and tax expenses and 12b-1 fee) to 1.80%. This contract
has a rolling 10-year term.
</FN>
</TABLE>
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, whether or not you
sold your shares at the end of each period. It 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
- -------------------------------------------------------
$207 $641 $1,100 $2,369
[clipart][sidebar]
Portfolio Management
(Fund Oversight)
Portfolio managers from each equity team
For more details see page ___
For financial highlights
see page ___
17
<PAGE>
U.S. Asset Allocation Fund | MNAAX
Objective
[] Seeks to provide shareholders with high total return (consisting of both
capital appreciation and income) while also seeking to reduce risk by
actively allocating its assets among stocks, bonds and money market
securities
Strategy [clipart]
As a "fund-of-funds," the Montgomery U.S. Asset Allocation Fund currently
invests its assets in three underlying Montgomery Funds:
[] Montgomery Growth Fund, for U.S. equity exposure
[] Montgomery Total Return Bond Fund, for U.S. bond exposure
[] Montgomery Government Money Market Fund, for cash exposure
The Fund's strategy is to analyze various market factors, including relative
risk and return, using a proprietary computer program to help the portfolio
managers determine what they believe is an optimal asset allocation among
stocks, bonds and cash.
The Fund's total equity and bond exposure may each range from 20 to 80% of its
assets. It may invest anywhere from 0 to 50% of its assets in a Montgomery money
market fund. At times, the Fund may invest in other Montgomery Funds that have
similar investment exposure to the Funds listed above.
The Fund's portfolio managers regularly adjust the proportion of assets allotted
to the underlying portfolios in response to changing market conditions.
Risks [clipart]
By investing a substantial portion of its assets in stock and bond mutual funds,
the Fund may expose you to certain risks that could cause you to lose money. The
value of the Fund's investments in the Montgomery Growth Fund, like investments
in any stock fund, will fluctuate on a daily basis with movements in the stock
market, as well as in response to the activities of the individual companies in
which the Montgomery Growth Fund invests. The value of the Fund's investment in
the Total Return Bond Fund will fluctuate along with interest rates. When
interest rates rise, a bond's market price generally declines. When interest
rates fall, the bond's price usually increases. In addition, if the managers do
not accurately predict changing market conditions and other economic factors,
the Fund's assets might be allocated in a manner that is disadvantageous.
18
<PAGE>
- --------------------------------------------------------------------------------
Past Fund Performance The bar chart on the left below shows the risks of
investing in the Fund and how the Fund's total return has varied from
year-to-year. The table on the right compares the Fund's performance with a
commonly used index for its market segment. Of course, past performance is no
guarantee of future results.
- --------------------------------------------------------------------------------
[bar chart]
1997 1998
- ------------------- -----------------
x.xx% 6.03%
During the two-year period described above in the bar chart, the Fund's best
quarter was Q_ 199_ (x.xx%) and the worst quarter was Q_ 199_ (x.xx%).
U.S. Asset Allocation Fund 6.03% 12.38%
S&P 500 Index 28.75% x.xx%
Lehman Brothers Aggregate Bond
Index 8.69% 8.33%
- --------------------------------------------------------------------------------
1 Year Inception
(1/2/96)
1999 Return Through 9/30/99: x.xx% Average Annual Returns Through 12/31/98
Fees & Expenses [clipart]
<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 or deferred sales
loads on this fund and does not charge shareholders for exchanging shares or
reinvesting dividends.
<S> <C>
Shareholder Fees (fees paid directly from your investment)
Redemption Fee * 0.00%
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)++
Management Fee 0.00%
Distribution/Service (12b-1) Fee 0.25%
Other Expenses
Top Fund Expenses 0.38%
Underlying Fund Expenses 1.25%
- --------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.88%
Fee Reduction and/or Expense Reimbursement 0.33%
Net Expenses 1.55%
<FN>
* $10 will be deducted from redemption proceeds sent by wire or overnight
courier.
++ In addition to the 0.38% total operating expenses of the Fund, a
shareholder also indirectly bears the Fund's pro rata share of the fees and
expenses incurred by each underlying Fund. The total expense ratio before
reimbursement, including indirect expenses for the fiscal year ended June
30, 1999, was 1.88%, calculated based on the Fund's total operating expense
ratio (0.38%) plus a weighted average of the expense ratios of its
underlying Funds (1.25%) plus a 12b-1 fee of 0.25%. Montgomery has
contractually agreed to reduce its fees and/or absorb expenses to limit the
Fund's total annual operating expenses (excluding interest and tax expenses
and 12b-1 fee) to 1.30% (including the expenses of the underlying Funds).
This contract has a rolling 10-year term.
</FN>
</TABLE>
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, whether or not you
sold your shares at the end of each period. It 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
- -------------------------------------------------------
$157 $488 $843 $1,839
[clipart][sidebar]
Portfolio Management
Portfolio managers from
each underlying Fund
For more details see page ___
For financial highlights
see page __
19
<PAGE>
U.S. FIXED-INCOME & MONEY
MARKET FUNDS
Short Duration Government Bond Fund | MNSGX
Objective
[] Seeks maximum total return consisting of both income and capital
appreciation, while striving to preserve shareholders' initial investment
(principal) by investing in short-term U.S. government securities.
Strategy [clipart]
The Fund invests at least 65% of its total assets in short-term U.S. government
securities, which may include Treasuries in addition to bonds and notes issued
by government agencies such as the Federal Home Loan Bank, Government National
Mortgage Association (GNMA or "Ginnie Mae"), Federal National Mortgage
Association (FNMA or "Fannie Mae") and Student Loan Marketing Association (SLMA
or "Sallie Mae").
The Fund may purchase bonds of any maturity, but generally the portfolio's
overall effective duration is comparable to that of a three-year U.S. Treasury
note. Typically, a lower duration means that the bond or portfolio has less
sensitivity to interest rates. The Fund invests in bonds that the portfolio
manager believes offer attractive yields and are undervalued relative to issues
of similar credit quality and interest rate sensitivity.
Risks [clipart]
By investing in bonds, the Fund may expose you to certain risks that could cause
you to lose money. As with most bond funds, the value of shares in the
Montgomery Short Duration Government Bond Fund will fluctuate along with
interest rates. When interest rates rise, a bond's market price generally
declines. When interest rates fall, the bond's market price usually increases. A
fund such as this one, which invests most of its assets in bonds will behave
largely the same way. As a result, the Fund is not appropriate for investors
whose primary investment objective is absolute stability of principal. The
Montgomery Short Duration Government Bond Fund is not a money market fund.
20
<PAGE>
- --------------------------------------------------------------------------------
Past Fund Performance The bar chart on the left below shows the risks of
investing in the Fund and how the Fund's total return has varied from
year-to-year. The table on the right compares the Fund's performance with a
commonly used index for its market segment. Of course, past performance is no
guarantee of future results.
- --------------------------------------------------------------------------------
[bar chart]
1997 1998
- ------------------- -----------------
x.xx% 7.48%
During the two-year period described above in the bar chart, the Fund's best
quarter was Q_ 199_ (x.xx%) and the worst quarter was Q_ 199_ (x.xx%).
Short Duration Gov't Bond Fund 7.48% 6.69%
Lehman Brothers Gov't.
Bond 1-3 Yr. Index 6.97% x.xx%
- --------------------------------------------------------------------------------
1 Year Inception
(3/11/96)
1999 Return Through 9/30/99: x.xx% Average Annual Returns Through 12/31/98
Fees & Expenses [clipart]
<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 or deferred sales
loads on this fund and does not charge shareholders for exchanging shares or
reinvesting dividends.
<S> <C>
Shareholder Fees (fees paid directly from your investment)
Redemption Fee * 0.00%
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)++
Management Fee 0.50%
Distribution/Service (12b-1) Fee 0.25%
Other Expenses 1.02%
- --------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.77%
Fee Reduction and/or Expense Reimbursement 0.09%
Less Interest and Taxes 0.73%
Net Expenses 0.95%
<FN>
* $10 will be deducted from redemption proceeds sent by wire or overnight
courier.
++ Montgomery Asset Management has contractually agreed to reduce its fees
and/or absorb expenses to limit the Fund's total annual operating expenses
(excluding interest and tax expenses and 12b-1 fee) to 0.70%. This contract
has a rolling 10-year term. Total expenses including interest and taxes
were 1.60%, however, net expenses actually paid by shareholders because of
additional voluntary reductions by the Manager were 0.87%.
</FN>
</TABLE>
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, whether or not you
sold your shares at the end of each period. It 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
- -------------------------------------------------------
$97 $302 $524 $1,163
[clipart] [sidebar]
Portfolio Management
William Stevens
Marie Chandoha
For more details see page ___
For financial highlights
see page ___
21
<PAGE>
Government Money Market Fund* | MNGXX
Objective
[] Money Market Fund: Seeks to provide shareholders with current income
consistent with liquidity and preservation of capital by investing in
short-term U.S. government securities
Strategy [clipart]
The Fund invests exclusively in short-term U.S. government securities, which may
include bills, notes and bonds issued by government agencies such as the Federal
Home Loan Bank, Federal National Mortgage Association (FNMA or "Fannie Mae") and
Student Loan Marketing Association (SLMA or "Sallie Mae"), in repurchase
agreements for U.S. government securities and in similar money market funds.
The Fund invests in short-term U.S. government securities that the portfolio
manager believes offer attractive yields and are undervalued relative to issues
of similar credit quality and interest rate sensitivity.
The Fund invests in compliance with industry-standard requirements for money
market funds for the quality, maturity and diversification of investments.
Risks [clipart]
Although the Fund seeks to preserve the value of your investment at $1 per
share, it is possible to lose money by investing in this Fund. Also a decline in
short-term interest rates would lower the Fund's yield and the return on your
investment. An investment in The Montgomery Government Money Market Fund is
neither insured nor guaranteed by the Federal Deposit Insurance Corporation
(FDIC) or any other government agency.
*Formerly named the Montgomery Government Reserve Fund.
22
<PAGE>
- --------------------------------------------------------------------------------
Past Fund Performance The bar chart on the left below shows the risks of
investing in the Fund and how the Fund's total return has varied from
year-to-year. The table on the right compares the Fund's performance with a
commonly used index for its market segment. Of course, past performance is no
guarantee of future results.
- --------------------------------------------------------------------------------
[bar chart]
1997 1998
- ------------------- -----------------
x.xx% 4.87%
During two-year period described above in the bar chart, the Fund's best quarter
was Q_ 199_ (x.xx%) and the worst quarters were Q_ 199_ (x.xx%).
Gov't Money Market Fund 4.87% 4.87%
Lipper U.S. Gov't Money
Market Fund Average 4.89% x.xx%
- --------------------------------------------------------------------------------
1 Year Inception
(3/11/96)
Average Annual Returns Through 12/31/98
1999 Return Through 9/30/99: x.xx% Seven-Day Yield as of 9/30/99: x.xx%
Call 800.572-FUND [3863] between 6 A.M. and 5 P.M.
Pacific time for the current yield.
Fees & Expenses [clipart]
<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 or deferred sales
loads on this fund and does not charge shareholders for exchanging shares or
reinvesting dividends.
<S> <C>
Shareholder Fees (fees paid directly from your investment)
Redemption Fee * 0.00%
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
Management Fee 0.36%
Distribution/Service (12b-1) Fee 0.25%
Other Expenses 0.07%
- --------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.68%
<FN>
* $10 will be deducted from redemption proceeds sent by wire or overnight
courier.
</FN>
</TABLE>
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, whether or not you
sold your shares at the end of each period. It 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
- -------------------------------------------------------
$69 $217 $378 $845
[clipart][sidebar]
Portfolio Management
William Stevens
For more details see page ___
For financial highlights
see page ___
23
<PAGE>
California Tax-Free Intermediate Bond Fund | MNCTX
Objective
[] Seeks to provide shareholders with maximum income exempt from federal and
California state personal income taxes, while striving to preserve
shareholders' initial investment (principal), by investing in
intermediate-maturity California municipal bonds
Strategy [clipart]
The Fund invests at least 80% of its net assets in intermediate-term,
high-quality California municipal bonds. High-quality bonds are those rated
within the four highest grades by rating agencies such as Standard & Poor's (at
least BBB), Moody's (at least Baa) or Fitch (at least BBB). From time to time
the Fund may also invest in unrated bonds that the portfolio manager believes
are comparable to investment-grade bonds.
The Fund may purchase bonds of any maturity, but generally the portfolio's
average dollar-weighted maturity ranges from five to 10 years. The Fund's
portfolio managers invest in California municipal bonds that offer attractive
yields and are considered to be under-valued relative to issues of similar
credit quality and interest rate sensitivity. Although the Fund concentrates its
assets in California municipal bonds, the portfolio manager strives to diversify
the portfolio across sectors and issuers within that market.
Risks [clipart]
By investing in bonds, the Fund may expose you to certain risks that could cause
you to lose money. As with most bond funds, the value of shares in the
Montgomery California Tax-Free Intermediate Bond Fund will fluctuate along with
interest rates. When interest rates rise, a bond's market price generally
declines. When interest rates fall, a bond's market price usually increases. A
fund such as this one, which invests most of its assets in bonds, will behave
largely the same way. As a result, the Fund is not appropriate for investors
whose primary investment objective is absolute principal stability. The
Montgomery California Tax-Free Intermediate Bond Fund is not a money market
fund.
The Fund's concentration in California municipal bonds may expose shareholders
to additional risks. In particular, the Fund will be vulnerable to any
development in California's economy that may weaken or jeopardize the ability of
California municipal-bond issuers to pay interest and principal on their bonds.
As a result, the Fund's shares may fluctuate more widely in value than those of
a fund investing in municipal bonds from a number of different states. The
Fund's objective is to provide income exempt from federal and California state
personal income taxes, but some of its income may be subject to the alternative
minimum tax.
24
<PAGE>
- --------------------------------------------------------------------------------
Past Fund Performance The bar chart on the left below shows the risks of
investing in another class of shares of the Fund not subject to the Class P Rule
12b-1 fee and how the total return of that class of shares of the Fund has
varied from year-to-year. The table on the right compares the performance of
that class of shares of the Fund with a commonly used index for its market
segment. Of course, past performance is no guarantee of future results.
- --------------------------------------------------------------------------------
[bar chart]
1994 1995 1996 1997 1998
- --------------------------------------------------------------------------------
0.05% 11.41% 4.51% 7.50% 6.06%
During the five-year period described above in the bar chart, the Fund's best
quarter was Q3 1998 (+3.59%) and the worst quarter was Q1 1994 (-1.43%).
<TABLE>
<S> <C> <C> <C>
CA Tax-Free Intermediate Bond Fund 6.06% 5.84% 5.74%
Merrill Lynch CA Municipal Intermediate Bond Index 6.31% 4.99% 5.02%*
- ------------------------------------------------------------------------------------------------------------------------
*Calculated from 6/30/93 1 Year 5 Years Inception
(7/1/93++)
</TABLE>
1999 Return Through 9/30/99: x.xx% Average Annual Returns Through 12/31/98
++ Represents the inception date of another class of shares of the Fund not
subject to the Class P Rule 12b-1 fee.
Fees & Expenses [clipart]
<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 or deferred sales
loads on this fund and does not charge shareholders for exchanging shares or
reinvesting dividends.
<S> <C>
Shareholder Fees (fees paid directly from your investment)
Redemption Fee * 0.00%
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)++
Management Fee 0.50%
Distribution/Service (12b-1) Fee 0.25%
Other Expenses # 0.30%
- --------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.05%
Fee Reduction and/or Expense Reimbursement 0.10%
Net Expenses 0.95%
<FN>
* $10 will be deducted from redemption proceeds sent by wire or overnight
courier.
++ Montgomery Asset Management has contractually agreed to reduce its fees
and/or absorb expenses to limit the Fund's total annual operating expenses
(excluding interest and tax expenses and 12b-1 fee) to 0.70%. This contract
has a rolling 10-year term.
# Based on actual other expenses of another class of shares of the Fund not
subject to the Class P Rule 12b-1 fee.
</FN>
</TABLE>
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, whether or not you
sold your shares at the end of each period. It 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
- -------------------------------------------------------
$97 $302 $524 $1,163
[clipart][sidebar]
Portfolio Management
William Stevens
For more details see page ___
For financial highlights
see page ___
25
<PAGE>
PORTFOLIO MANAGEMENT
PORTFOLIO MANAGEMENT
The investment manager of the Montgomery Funds is Montgomery Asset Management,
LLC. Founded in 1990, Montgomery Asset Management is a subsidiary of Commerzbank
AG, one of the largest publicly held commercial banks in Germany. As of
September 30, 1999, Montgomery Asset Management managed approximately $x.x
billion on behalf of some xxx,xxx investors in The Montgomery Funds.
U.S. Equity Funds
[photo] ROGER HONOUR, senior portfolio manager for the Montgomery Growth Fund
(since 1993). Prior to joining Montgomery in June 1993, Roger Honour was a vice
president and portfolio manager at Twentieth Century Investors in Kansas City,
Missouri. From 1990 to 1992, he served as vice president and portfolio manager
at Alliance Capital Management.
[photo] BRADFORD KIDWELL, portfolio manager for the Montgomery Small Cap Fund
(since 1991). Prior to joining Montgomery in 1991, Brad Kidwell was the sole
general partner and portfolio manager of Oasis Financial Partners. From 1987 to
1989, he covered the savings and loan industry for Dean Witter Reynolds.
[photo] WILLIAM KING, CFA, senior portfolio manager for the Montgomery Equity
Income Fund (since 1994). Before joining Montgomery in 1994, Bill King gained
analytical and portfolio management experience at Merus Capital Management.
Previously, he was a financial analyst/manager for SEI and a division controller
and financial analyst for Kaiser Aluminum and Kaiser Industries.
[photo] KATHRYN PETERS, portfolio manager for the Montgomery Growth Fund (since
1995). Kathy Peters joined Montgomery in 1995. From 1992 to 1995, she was an
associate in the investment banking division of Donaldson, Lufkin & Jenrette in
New York. Prior to that she analyzed mezzanine investments for Barclays de Zoete
Wedd.
[photo] JEROME "CAM" PHILPOTT, CFA, portfolio manager for the Montgomery Small
Cap Fund (since 1991). Before joining Montgomery in 1991, Cam Philpott was a
securities analyst with Boettcher & Company in Denver. Prior to that he was a
securities analyst at Berger Associates Incorporated.
[photo] STUART ROBERTS, senior portfolio manager for the Montgomery Small Cap
Fund (since 1990). Stuart Roberts has specialized in small-cap investing since
1983. Prior to joining Montgomery in 1990, he was a portfolio manager and
analyst at Founders Asset Management in Denver, where he managed three
growth-oriented mutual funds.
International and Global Equity Funds
[photo] JOHN BOICH, CFA, senior portfolio manager for the Montgomery
International Growth (since 1995) and International Small Cap Funds (since
1997). John Boich joined Montgomery in 1993. From 1990 to 1993, John Boich was a
vice president and portfolio manager at The Boston Company Institutional
Investors, Inc. From 1989 to 1990, he was co-founder and co-manager of The
Common Goal World Fund, a global equity partnership.
[photo] OSCAR CASTRO, CFA, senior portfolio manager for the Montgomery
International Growth Fund (since 1995). Oscar Castro joined Montgomery in 1993.
From 1991 to 1993 he was a vice president and portfolio manager at G.T. Capital
Management, Inc. From 1989 to 1990, he was co-founder and co-manager of The
Common Goal World Fund, a global equity partnership.
[photo] FRANK CHIANG, portfolio manager for the Montgomery Emerging Markets Fund
(since 1996). Frank Chiang joined Montgomery in 1996. From 1993 to 1996, he was
a portfolio manager and managing director at TCW Asia Ltd. in Hong Kong. Prior
to that he was associate director and portfolio manager at
26
<PAGE>
Wardley Investment Services, Hong Kong.
[photo] ANGELINE EE, portfolio manager with Montgomery's International/Global
team (since 1994). Prior to joining Montgomery, 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.
[photo] JOSEPHINE JIMENEZ, CFA, senior portfolio manager for the Montgomery
Emerging Markets Fund (since 1992). Before joining Montgomery in 1991, Josephine
Jimenez worked at Emerging Markets Investors Corp./Emerging Markets Management
in Washington, D.C., as a senior analyst and portfolio manager. The research and
analysis methods she helped develop--including a proprietary stock valuation
model for hyperinflationary economies--are the foundation of her investment
strategy.
[photo] NANCY KUKACKA, portfolio manager with Montgomery's International/Global
team (since 1995). Before joining Montgomery, 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.
[photo] BRYAN SUDWEEKS, PH.D., CFA, director of quantitative research for the
Montgomery Emerging Markets Fund (since 1992). Before joining Montgomery in
1991, Bryan Sudweeks was a senior analyst and portfolio manager at Emerging
Markets Investors Corp./Emerging Markets Management in Washington, D.C. Prior to
that he was a professor of international finance and investments at George
Washington University.
Multi-Strategy Funds
SELECT 50 FUND. The portfolio managers listed previously for the U.S. Equity
Funds and the International and Global Equity Funds are the key members of the
five portfolio management teams responsible for managing the Select 50 Fund.
U.S. ASSET ALLOCATION FUND. The portfolio managers listed previously for the
U.S. Equity Funds and below for the U.S. Fixed Income and Money Market Funds
allocate assets among the underlying Funds for the U.S. Asset Allocation Fund.
Information about the portfolio managers for the underlying Funds, which
currently include the Growth, Total Return Bond and Government Money Market
Funds, is provided previously under U.S. Equity Funds and below under U.S. Fixed
Income and Money Market Funds.
U.S. Fixed-Income and Money Market Funds
[photo] MARIE CHANDOHA, portfolio manager for the Montgomery Total Return Bond
and Short Duration Government Bond Funds (since 1999). Prior to joining
Montgomery in 1999, Marie Chandoha worked at Goldman Sachs & Co., where she
advised institutional clients on optimal asset allocation strategies in the U.S.
bond market. From 1994 to 1996, Ms. Chandoha held positions as a managing
director of global fixed income and economics research at Credit Suisse First
Boston. Prior to that Ms. Chandoha was a research analyst in mortgage securities
at Morgan Stanley; and an economist at the Federal Reserve Bank of New York.
[photo] WILLIAM STEVENS, senior portfolio manager for the Montgomery
Fixed-Income Funds (since 1992). Prior to joining Montgomery in 1992, Bill
Stevens worked at Barclays de Zoete Wedd Securities, where he started its
collateralized mortgage obligation (CMO) and asset-backed securities trading.
From 1990 to 1991, Mr. Stevens traded stripped mortgage securities and
mortgage-related interest rate swaps for the First Boston Company.
27
<PAGE>
Management Fees and Operating Expense Limits
<TABLE>
The table below shows the management fee rate actually paid to Montgomery Asset
Management over the past fiscal year and the contractual limits on total
operating expenses for each Fund. The management fee amounts may vary from year
to year, depending on actual expenses. Actual fee rates may be greater than
contractual rates to the extent Montgomery recouped previously deferred fees
during the fiscal year.
<CAPTION>
MANAGEMENT TOTAL EXPENSE
FEES LIMIT
MONTGOMERY FUND (annual rate) (annual rate)
<S> <C> <C>
U.S. Equity Funds
Montgomery Growth Fund 0.95% 1.50%
Montgomery Small Cap Fund 1.00% 1.40%
Montgomery Equity Income Fund 0.60% 0.85%
International and Global Equity Funds
Montgomery International Growth Fund 1.12% 1.65%
Montgomery International Small Cap Fund 1.24% 1.90%
Montgomery Emerging Markets Fund 1.16% 1.90%
Multi-Strategy Funds
Montgomery Select 50 Fund 1.25% 1.80%
Montgomery U.S. Asset Allocation Fund 0.00% 1.30%
U.S. Fixed-Income and Money Market Funds
Montgomery Short Duration Government Bond Fund 0.50% 0.70%
Montgomery Government Money Market Fund 0.36% 0.60%
Montgomery California Tax-Free Intermediate Bond Fund 0.50% 0.70%
</TABLE>
28
<PAGE>
Additional Investment Strategies and Related Risks
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, Denmark, Greece and Sweden). 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.
These and other factors could cause market disruptions and affect the value of
your shares in a Fund that invests in companies conducting business in Europe.
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), each Montgomery Fund may invest
up to 100% of its assets in cash for temporary defensive purposes. No Fund is
required or expected to take such a defensive posture. But if used, such an
unlikely stance may help a Fund minimize or avoid losses during adverse market,
economic or political conditions. During such a period, a Fund may not achieve
its investment objective. For example, should the market advance during this
period, a Fund may not participate as much as it would have if it had been more
fully invested.
Portfolio Turnover
The Funds' portfolio managers will sell a security when they believe it is
appropriate to do so, regardless of how long a Fund has owned that security.
Buying and selling securities generally involves some expense to a Fund, such as
commission paid to brokers and other transaction costs. By selling a security, a
Fund may realize taxable capital gains that it will subsequently distribute to
shareholders. Generally speaking, the higher a 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 a
Fund's performance. Also, unless you are a tax-exempt investor or you purchase
shares through 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.
The following Montgomery Funds that invest in stocks will typically have annual
turnover in excess of that rate because of their portfolio managers' investment
style: International Growth, International Small Cap, Select 50, and U.S. Asset
Allocation Funds. See "Financial Highlights," beginning on page ___, for each
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
29
<PAGE>
computer applications and systems could misinterpret dates occurring after
December 31, 1999, leading to errors or failure. This failure could adversely
affect a 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 completing
tests on testing our internal systems. Montgomery is diligently working with
external partners, suppliers, vendors and other service providers, to assure
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 assure that unexpected systems failures will not adversely affect
the Funds' operations. Montgomery intends to monitor these processes through the
rollover of 1999 into 2000 and to quickly implement alternative solutions if
necessary.
However, despite Montgomery's efforts and contingency plans, noncompliant
computer systems could have a material adverse effect on a Fund's business,
operations, or financial condition. Additionally, a 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. The Manager, 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.
Additional Benchmark Information
The International Finance Corporation (IFC) Global Composite Index comprises
more than 1.200 individual stocks from 33 developing countries in Asia, Latin
America, the Middle East, Africa and Europe.
The Morgan Stanley Capital International (MSCI) Europe, Australasia and Far East
(EAFE) Index, a capitalization-weighted index, is composed of 21 developed
market countries in Europe, Australasia and Far East. The returns are presented
net of dividend withholding taxes.
The Salomon Smith Barney World Extended Market Index comprises the
small-capitalization equities of each country in the Salomon Smith Barney Broad
Market Index. The index contains approximately 3,000 issues in more than 20
countries, is calculated gross of withholding taxes and is capitalization
weighted.
30
<PAGE>
FINANCIAL HIGHLIGHTS
FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand the Funds'
performance for the periods shown.
The following selected per-share data and ratios for the periods ended June 30,
1999 and June 30, 1998, were audited by _______________________.
Their ___________, 1999 and August 14, 1998 reports appear in the 1999 and 1998
Annual Reports of the Funds. Information for the periods ended June 30, 1991
through June 30, 1997, was audited by other independent accountants. Their
report is not included here.
The financial information for periods indicated with the note "R" relates to
another class of shares of the California Tax-Free Intermediate Bond Fund not
subject to the Class P Rule 12b-1 fees.
<TABLE>
The total return figures in the tables represent the rate an investor would have
earned (or lost) on an investment in the relevant Fund (assuming reinvestment of
all dividends and distributions).
<CAPTION>
[table]
- -------------------------------------------------------------------------------------------------------------------
U.S. Equity Funds
Growth Fund
SELECTED PER-SHARE DATA FOR THE YEAR OR PERIOD ENDED JUNE 30: 1999 1998++ 1997++ 1996(a)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value - beginning of year $23.77 $23.12 $21.94 $19.22
Net investment income/(loss) 0.13 0.11 0.09 0.03
Net realized and unrealized gain/(loss)
on investments 2.22 3.55 3.96 2.69
Net increase/(decrease) in net assets
resulting from investment operations 2.35 3.66 4.05 2.72
Distributions:
Dividends from net investment income (0.04) (0.09) (0.10) --
Distribution from net realized capital gains (1.57) (2.92) (2.77) --
Distribution in excess of net realized capital gains -- -- -- --
Total distributions (1.61) (3.01) (2.87) --
Net asset value - end of year $24.51 $23.77 $23.12 $21.94
====================================================================================================================
Total return** 11.62% 17.09% 20.41% 14.15%
Ratios to average net assets/supplemental data
Net assets, end of year (in 000s) $219 $198 $212 $82
Ratio of net investment income/(loss) to average
net assets 0.71% 0.46% 0.44% 0.53%+
Net investment income/(loss) before deferral
of fees by Manager $0.17 $0.11 -- --
Portfolio turnover rate 54% 54% 61% 118%
Expense ratio before deferral of fees by
Manager including interest and tax expenses 1.20% 1.45% -- --
Expense ratio including interest and tax expenses 1.20% 1.45% 1.52% 1.60%+
Expense ratio excluding interest and tax expenses 1.19% 1.44% -- --
- -------------------------------------------------------------------------------------------------------------------
<FN>
(a) The Growth Fund's Class P shares commenced operations on January 12, 1996.
** Total return represents aggregate total for the periods indicated.
+ Annualized.
++ 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.
</FN>
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Equity Funds
Small Cap Fund Equity Income Fund
SELECTED PER-SHARE DATA FOR THE YEAR OR PERIOD
ENDED JUNE 30: 1999 1998++ 1997(b) 1999 1998 1997++ 1996(c)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of year $20.53 $19.48 $21.73 $18.25 $17.90 $16.09 $15.66
Net investment income/(loss) (0.20) (0.20) (0.20) 0.26 0.38 0.44 0.08
Net realized and unrealized gain/(loss)
on investments (1.21) 4.22 1.13 2.31 2.27 3.35 0.35
Net increase/(decrease) in net assets
resulting from investment operations (1.41) 4.02 1.03 2.57 2.65 3.79 0.43
Distributions:
Dividends from net investment income -- -- -- (0.27) (0.39) (0.42) --
Distributions from net realized capital gains (2.77) (2.97) (3.28) (1.54) (1.91) (1.56) --
Distributions in excess of net realized
capital gains -- -- -- -- -- -- --
Total distributions (2.77) (2.97) (3.28) (1.81) (2.30) (1.98) --
Net asset value - end of year $16.35 $20.53 $19.48 $19.01 $18.25 $17.90 $13.38
====================================================================================================================================
Total return** (4.39)% 22.44% 5.74% 14.74% 15.49% 25.64% 2.75%
Ratios to average net assets/supplemental data
Net assets, end of year (in 000s) $20,606 $21,548 $6,656 $3,212 $2,719 $868 $2
Ratio of net investment income/(loss) to
average net assets (1.35)% (0.95)% (1.03)%+ 1.46% 2.07% 2.68% 2.78+
Net investment income/(loss) before deferral
of fees by Manager $(0.20) $(0.20) -- $0.19 $0.28 $0.34 $0.06
Portfolio turnover rate 70.96% 68.65% 58.71% 57.13% 68.23% 62.31% 89.77%
Expense ratio before deferral of fees by
Manager, including interest and tax expense 1.57% 1.49% 1.45+ 1.47% 1.63% 1.71% 1.70%+
Expense ratio including interest and tax
expenses 1.57% 1.49% -- 1.10% 1.11% -- --
Expense ratio excluding interest and tax
expenses 1.57% 1.49% -- 1.10% 1.10% 1.11% 1.10%+
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
(b) The Small Cap Fund's Class P shares commenced operations on July 1, 1996.
(c) The Equity Income Fund's Class P shares commenced operations on March 11,
1996.
** Total return represents aggregate total for the periods indicated.
+ Annualized.
++ 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.
</FN>
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
International and Global Equity Funds
International Growth Fund International Small Cap Fund
SELECTED PER-SHARE DATA FOR THE YEAR OR PERIOD
ENDED JUNE 30: 1999 1998 1997 1996(d) 1999 1998 1997(e)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value-beginning of year $18.64 $16.22 $15.31 $13.66 $14.86 $11.75 $12.00
Net investment income/(loss) 0.17 (0.01) 0.05 0.00# (0.05) 0.03 0.00#
Net realized and unrealized gain/(loss) on
investments 0.21 3.50 2.54 0.31 2.35 3.10 0.02
Net increase/(decrease) in net assets resulting
from investment operations 0.38 3.49 2.59 1.65 2.30 3.13 0.02
Distributions:
Dividends from net investment income -- -- -- -- -- (0.02) --
Distributions in excess of net investment
income (0.00)# 0.00# -- -- -- -- --
Distributions from net realized capital gains (0.10) (1.07) (1.68) -- -- -- --
Distributions in excess of net realized
capital gains -- -- -- -- -- -- --
Total distributions (0.10) (1.07) (1.68) -- -- (0.02) --
Net asset value-end of year $18.92 $18.64 $16.22 $15.31 $17.16 $14.86 $12.02
====================================================================================================================================
Total return** 2.18% 23.03% 19.13% 12.08% 15.48% 26.68% 0.17%
Ratios to average net assets/supplemental data
Net assets, end of year (in 000s) $2,532 $5 $5 $1 $53,602 $41,640 $34,555
Ratio of net investment income/(loss) to
average net assets 0.72% (0.03)% 0.32% 0.01%+ (0.34)% 0.20% 0.04%+
Net investment income/(loss) before deferral of
fees by Manager $0.17 $(0.08) $(0.06) $(0.05) $(0.14) $(0.08) $(0.02)
Portfolio turnover rate 141.12% 127.13% 95.02% 238.91% 85% 177% 124%
Expense ratio before deferral of fees by
Manager, including interest and tax expense 2.10% 2.38% 2.62% 3.16%+ 2.60% 2.76% 2.32%+
Expense ratio including interest and tax expense 2.12% 1.91% -- -- -- 1.96% 1.99%+
Expense ratio excluding interest and tax expense 1.90% 1.90% 1.91% 1.90%+ 1.90% 1.90% 1.90%+
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
(d) The International Growth Fund's Class P shares commenced operations on
March 11, 1996.
(e) The International Small Cap Fund's Class P shares commenced operations on
June 9, 1997.
# Amount represents less than $0.01 per share.
** Total return represents aggregate total for the periods indicated.
+ Annualized.
++ 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.
</FN>
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
International and Global Equity Funds
Emerging Markets Fund
SELECTED PER-SHARE DATA FOR THE YEAR OR PERIOD ENDED JUNE 30: 1999 1998 1997 1996(f)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value-beginning of year $9.74 $16.77 $14.19 $12.62
Net investment income/(loss) 0.04 0.03 0.06 0.01
Net realized and unrealized gain/(loss)
on investments 0.26 (6.61) 2.58 1.56
Net increase/(decrease) in net assets
resulting from investment operations 0.30 (6.58) 2.64 1.57
Distributions:
Dividends from net investment income -- (0.12) (0.06) --
Distributions in excess of net investment income -- -- -- --
Distributions from net realized capital gains -- (0.33) -- --
Distributions in excess of net realized capital gains -- -- -- --
Total distributions -- (0.45) (0.06) --
Net asset value-end of year $10.85 $9.74 $16.77 $14.19
====================================================================================================================
Total return** 3.08% (39.70)% 18.62% 12.44%
Ratios to average net assets/supplemental data
Net assets, end of year (in 000s) $520 $413 $607 $2
Ratio of net investment income/(loss) to average
net assets 0.05% 0.30% 0.23% 0.33%+
Net investment income/(loss) before deferral
of fees by Manager $(0.10) $0.03 -- --
Portfolio turnover rate 86% 97% 83% 110%
Expense ratio before deferral of fees by
Manager, including interest and tax expenses 2.57% 1.90% -- --
Expense ratio including interest and tax expenses 2.47% 1.90% -- --
Expense ratio excluding interest and tax expenses 2.15% 1.85% 1.92% 1.97%+
- --------------------------------------------------------------------------------------------------------------------
<FN>
(f) The Emerging Markets Fund's Class P shares commenced operations on March
12, 1996.
** Total return represents aggregate total for the periods indicated.
+ Annualized.
</FN>
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Multi-Strategy Funds
Select 50 Fund
SELECTED PER-SHARE DATA FOR THE YEAR OR PERIOD ENDED JUNE 30: 1999 1998++ 1997(g)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value-beginning of year $20.68 $19.98 $15.89
Net investment income/(loss) 0.11 0.09 (0.02)
Net realized and unrealized gain/(loss)
on investments (0.27) 2.46 4.11
Net increase/(decrease) in net assets
resulting from investment operations (0.16) 2.55 4.09
Distributions:
Dividends from net investment income (0.30) -- --
Distributions in excess of net investment income -- -- --
Distributions from net realized capital gains (1.05) (1.85) --
Distributions in excess of net realized capital gains -- -- --
Distributions from capital -- -- --
Total distributions (1.35) (1.85) --
Net asset value-end of year $27.83 $20.68 $19.98
===========================================================================================================
Total return** 13.46% 14.12% 25.74%
Ratios to average net assets/supplemental data
Net assets, end of year (in 000s) $55 $52 $9
Ratio of net investment income/(loss) to average
net assets 6.11% 0.34% (0.21)%+
Net investment income/(loss) before deferral
of fees by Manager $(0.56) $0.09 $(0.03)
Portfolio turnover rate 110% 151% 158%
Expense ratio before deferral of fees by
Manager, including interest and tax expenses 2.16% 2.06% 2.17%+
Expense ratio including interest and tax expenses 2.16% 2.06% -
Expense ratio excluding interest and tax expenses 1.98% 2.05% 2.07%+
- -----------------------------------------------------------------------------------------------------------
<FN>
(g) The Select 50 Fund's Class P shares commenced operations on December 12,
1996.
** Total return represents aggregate total for the periods indicated.
+ Annualized.
++ 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.
</FN>
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Multi-Strategy Funds
U.S. Asset Allocation Fund
SELECTED PER-SHARE DATA FOR THE YEAR OR PERIOD ENDED JUNE 30: 1999 1998 1997++ 1995(h)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value-beginning of year $19.11 $19.89 $19.33 $17.86
Net investment income/(loss) 0.46 1.62 0.43 0.09
Net realized and unrealized gain/(loss) on investments 1.11 1.01 2.13 1.38
Net increase/(decrease) in net assets resulting from
investment operations 1.65 2.63 2.56 1.47
Distributions:
Dividends from net investment income (0.89) (0.84) (0.34) --
Distributions in excess of net investment income -- -- -- --
Distributions from net realized capital gains (3.09) (0.74) (1.66) --
Distributions in excess of net realized capital gains -- (1.83) -- --
Total distributions (3.98) (3.41) (2.00) --
Net asset value-end of year $16.78 $19.11 $19.89 $19.33
==============================================================================================================
Total return** 11.15% 14.53% 14.35% 8.23%
Ratios to average net assets/supplemental data
Net assets, end of year (in 000s) $56 $71 $74 $43
Ratio of net investment income/(loss) to average
net assets 1.99% 2.85% 2.30% 1.60%+
Net investment income/(loss) before deferral
of fees by Manager $1.85 $1.59 $0.42 $0.08
Portfolio turnover rate 36% 84% 169% 226%
Expense ratio before deferral of fees by
Manager, including interest and tax expenses 0.63% 0.56% 1.74% 1.80%+
Expense ratio including interest and tax expenses 0.51% 0.51% 1.68% 1.67%+
Expense ratio excluding interest and tax expenses 0.51% 0.50% 1.56% 1.55%+
- --------------------------------------------------------------------------------------------------------------
<FN>
(h) The U.S. Asset Allocation Fund's Class P shares commenced operations on
January 2, 1996.
** Total return represents aggregate total for the periods indicated.
+ Annualized.
++ 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.
</FN>
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
U.S. Fixed Income and Money Market Funds
Short Duration Government
Bond Fund
SELECTED PER-SHARE DATA FOR THE YEAR OR PERIOD ENDED
JUNE 30: 1999 1998 1997 1996(i)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value-beginning of year $10.15 $9.99 $9.92 $9.98
Net investment income/(loss) 0.42 0.61 0.59 0.16
Net realized and unrealized gain/(loss)
on investments (0.05) 0.12 0.06 (0.05)
Net increase/(decrease) in net assets
resulting from investment operations 0.37 0.73 0.65 0.11
Distributions:
Dividends from net investment income (0.42) (0.57) (0.58) (0.17)
Distributions in excess of net investment income -- -- -- --
Distributions from net realized capital gains (0.05) -- (0.00)# --
Distributions in excess of net realized capital
gains -- -- -- --
Distributions from capital -- -- -- --
Total distributions (0.47) (0.57) (0.58) (0.17)
Net asset value-end of year $10.03 $10.15 $9.99 $9.92
=============================================================================================================
Total return** 4.47% 7.34% 6.69% 1.12%
Ratios to average net assets/supplemental data
Net assets, end of year (in 000s) $3,887 $3 $0 $1
Ratio of net investment income/(loss) to average
net assets 5.14% 5.58% 5.62% 5.63%+
Net investment income/(loss) before deferral
of fees by Manager $4.96 $0.55 $0.54 $0.14
Portfolio turnover rate 142% 502% 451% 350%
Expense ratio before deferral of fees by
Manager, including interest and tax expenses 1.77% 1.98% 2.30% 2.56%+
Expense ratio including interest and tax expenses 1.60% 1.40% 1.80% 1.80%+
Expense ratio excluding interest and tax expenses 0.87% 0.53% 0.85% 0.85%+
- -------------------------------------------------------------------------------------------------------------
<FN>
(i) The Short Duration Government Bond Fund's Class P shares commenced
operations on March 1, 1996.
** Total return represents aggregate total for the periods indicated.
+ Annualized.
++ 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.
</FN>
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
U.S. Fixed Income and Money Market Funds
Government Money Market Fund
SELECTED PER-SHARE DATA FOR THE YEAR OR PERIOD ENDED JUNE
30: 1999 1998 1997 1995(j)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value-beginning of year $1.00 $1.00 $1.00 $1.00
Net investment income/(loss) 0.045 0.049 0.048 0.014
Net realized and unrealized gain/(loss)
on investments (0.001) 0.000ss. 0.000ss. 0.000ss.
Net increase/(decrease) in net assets resulting
from investment operations 0.044 0.049 0.048 0.014
Distributions:
Dividends from net investment income (0.044) (0.049) (0.048) (0.014)
Distributions in excess of net investment income -- -- -- --
Distributions from net realized capital gains -- -- -- --
Total distributions $(0.044) (0.049) (0.048) (0.014)
Net asset value-end of year $1.00 $1.00 $1.00 $1.00
===========================================================================================================
Total return** 4.54% 5.00% 4.88% 1.38%
Ratios to average net assets/supplemental data
Net assets, end of year (in 000s) $1 -- -- $1
Ratio of net investment income/(loss) to average
net assets 4.53% 4.90% 4.68% 4.91%+
Net investment income/(loss) before deferral of
fees by Manager $0.045 $0.049 $0.048 $0.013
Portfolio turnover rate -- 0.78% -- --
Expense ratio before deferral of fees by
Manager, including interest and tax expenses 0.68% 0.73% 0.87% 0.99%+
Expense ratio including interest and tax expenses -- -- -- --
Expense ratio excluding interest and tax expenses 0.75% 0.78% 0.85% 0.85%+
- -----------------------------------------------------------------------------------------------------------
<FN>
(j) The Government Money Bond Fund's Class P shares commenced operations on
March 11, 1996.
** Total return represents aggregate total for the periods indicated.
+ Annualized.
ss. Amount represents less than $0.001 per share.
</FN>
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
U.S. Fixed Income and Money Market Funds
California Tax-Free Intermediate Bond Fund
SELECTED PER-SHARE DATA FOR THE YEAR
OR PERIOD ENDED JUNE 30: 1999(R) 1998(R) 1997(R) 1996(R) 1995(R)(k)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value-beginning of year $12.86 $12.53 $12.23 $12.04 $11.79
Net investment income 0.51 0.51 0.53 0.54 0.44
Net realized and unrealized
gain/(loss)
on investments (0.16) 0.33 0.30 0.19 0.25
Net increase/(decrease) in net
assets resulting from investment
operations 0.35 0.84 0.83 0.73 0.69
Distributions:
Dividends from net investment
income (0.51) (0.51) (0.53) (0.54) (0.44)
Distributions in excess of net
investment income (0.03) -- -- -- (0.00)ss.
Distributions from net realized
capital gains -- -- -- -- --
Total Distributions (0.54) (0.51) (0.53) (0.54) (0.44)
Net asset value-end of year $12.67 $12.86 $12.53 $12.23 $12.04
=================================================================================================
Total return** 2.71% 6.85% 6.91% 6.11% 6.03%
Ratios to average net
assets/supplemental data
Net assets, end of year (in 000s) $41,017 $35,667 $21,681 $13,948 $5,153
Ratio of net investment income to
average net assets 3.93% 4.03% 4.27% 4.34% 3.71%
Net investment income/(loss) before
deferral of fees by Manager $0.48 $0.44 $0.47 $0.43 $0.34
Portfolio turnover rate 197% 42% 26% 58% 38%
Expense ratio before deferral of
fees by Manager, including interest
and tax expenses 0.80% 1.19% 1.18% 1.43% 1.41%
Expense ratio including interest
and tax expenses 0.69% 0.69% 0.68% 0.61% 0.56%
Expense ratio excluding interest
and tax expenses 0.69% 0.68% -- -- --
- -------------------------------------------------------------------------------------------------
<FN>
(k) The California Tax-Free Intermediate Bond Fund's Class R shares commenced
operations on July 1, 1993.
** Total return represents aggregate total for the periods indicated.
+ Annualized.
ss. Amount represents less than $0.001 per share.
</FN>
</TABLE>
39
<PAGE>
<TABLE>
[table]
Investment Options
<CAPTION>
The Funds' shares are offered only through financial intermediaries and financial professionals. To open a new account, complete and
mail the New Account application included with this prospectus.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Trade requests received after 1:00 P.M. Pacific time (4:00 P.M. Once an account is established, you can:
eastern time) will be executed at the following business day's
closing price. Once a trade is placed it may not be altered or [] Buy, sell or exchange shares by phone.
canceled. Contact The Montgomery Funds at 800.572.FUND
[3863]. Press [] for a shareholder service
Checks should be made payable to: representative. Press [||] for the automated
The Montgomery Funds Montgomery Star System.
The minimum initial investment for each fund is $1,000. The [] Buy or sell shares by mail
minimum subsequent investment is $100. Mail buy/sell order(s) with your check:
By regular mail
The Montgomery Funds
c/o DST Systems, Inc.
P.O. Box 419073
Kansas City, MO 64141-6073
By express or overnight service:
The Montgomery Funds
c/o DST Systems, Inc.
210 West 10th Street, 8th Floor
Kansas City, MO 64105-1614
[] Buy or sell shares by wiring funds
To: Investors Fiduciary Trust Company
ABA #101003621
For: DST Systems, Inc.
Account #7526601
Attention: The Montgomery Funds
For Credit to: [shareholder(s) name]
Shareholder account number:
[shareholder(s) account number]
Name of Fund: [Montgomery Fund name]
</TABLE>
40
<PAGE>
ACCOUNT INFORMATION
What You Need to Know About Your Montgomery Account
The Funds' shares are only offered for sale by the Funds Distributor, Inc.
(Distributor) and through selected securities brokers and dealers. You pay no
sales charge to invest in The Montgomery Funds. The minimum initial investment
for each Fund is $1,000. The minimum subsequent investment is $100. Under
certain conditions we or the Distributor may waive these minimums. If you buy
shares through a broker or investment advisor, instead of directly from the
Distributor, different requirements may apply. All investments must be made in
U.S. dollars.
We must receive payment from you within three business days of your
purchase. In addition, the Funds and the Distributor each reserve the right to
reject all or part of any purchase.
Becoming a Montgomery Shareholder
To open a new account:
[] By Mail Send your completed application, with a check payable to The
Montgomery Funds, to the appropriate address (see column at right). 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.
[] By Wire Call us at (800) 572-FUND [3863] to let us know that you intend to
make your initial investment by wire. Tell us your name, the amount you want to
invest and the fund(s) in which 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
For credit to: [shareholder(s) name]
Shareholder Account Number:
[shareholder(s) account number]
Name of Fund: [Montgomery Fund]
Please note: 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 of a new fund must
meet its 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 any of your accounts if we do not receive payment within that time.
41
<PAGE>
[sidebar]
Getting Started
To invest, complete the New Account
application at the back of this prospectus.
Send it with a check payable to The
Montgomery Funds.
Regular Mail
The Montgomery Funds
c/o DST Systems, Inc.
P.O. Box 419073
Kansas City, MO 64141-6073
Express Mail or Overnight Courier
The Montgomery Funds
c/o DST Systems, Inc.
210 West 10th Street
8th Floor
Kansas City, MO 64105-1614
Foreign Investors:
Foreign citizens and resident aliens of the
United States living abroad may not invest
in The Montgomery Funds
How Fund Shares Are Priced
How and when we calculate the Funds' price or net asset value (NAV) determines
the price at which you will buy or sell shares. We calculate a fund's NAV by
dividing the total net value of its assets by the number of outstanding shares.
We base the value of the Funds' investments on their 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 from the United States. Major
developments affecting the price of those securities may happen after the
foreign markets in which such securities trade have closed, but before the Fund
calculates its NAV. In this case, Montgomery, subject to 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 security's
closing price in its relevant market.
We calculate the net asset value (NAV) of each Montgomery Fund after the
close of trading on the New York Stock Exchange (NYSE) every day the NYSE is
open. We do not calculate NAVs on the days on which the NYSE is closed for
trading. Certain exceptions apply 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 4:00 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 receipt of
your order. More details about how we calculate the Funds' NAV are in the
Statement of Additional Information.
[] Money Market Fund. The price of the Money Market Fund is determined at 12
noon eastern time on most business days. If we receive your order by that time,
your shares will be priced at the NAV calculated at 12 noon that day. If we
receive your order after 12 noon eastern time, you will pay the next price we
determine after receiving your order. Also, only those orders received by 12
noon will be eligible to accrue any dividend paid for the day of investment.
[] Foreign Funds. Several of our Funds invest 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
42
<PAGE>
change. In addition, some foreign exchanges are open for trading when the U.S.
market is closed. As a result, a Fund's foreign securities--and its price--may
fluctuate during periods when you can't buy, sell or exchange shares in the
Fund.
[] Bank Holidays. On bank holidays we will not calculate the price of the U.S.
Fixed-Income and Money Market Funds, even if the NYSE is open that day. Shares
in these funds will be sold at the next NAV we determine after receipt of your
order.
[sidebar]
TRADING TIMES
Whether buying, exchanging or selling shares, transaction
requests received after 1:00 P.M. Pacific time (4:00 P.M.
eastern time) will be executed at the next business day's
closing price.
43
<PAGE>
Buying Additional Shares
[] By Mail. Complete the form at the bottom of any Montgomery statement and mail
it with your check payable to The Montgomery Funds. 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.
[] By Phone. Current shareholders are automatically eligible to buy shares by
phone. To buy shares in a Fund you currently own or to invest in a new Fund,
call (800) 572-FUND [3863]. Shares for IRAs may not be purchased by phone.
Telephone purchases can be made for up to five times your account value as of
the previous day.
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
in "Becoming A Montgomery Shareholder" (page ___).
[] 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 under "Becoming a Montgomery Shareholder" (page ___).
Exchanging Shares
You may exchange Class P shares in one Fund for Class P shares in another, in
accounts with the same registration, Taxpayer Identification number and address.
There is a $100 minimum to exchange into a fund you currently own and a $1,000
minimum for investing in a new Fund. Note that an exchange may result in a
realized gain or loss for tax purposes. You may exchange shares by phone at
(800) 572-FUND [3863].
Other Exchange Policies
[] We will process your exchange order at the next-calculated NAV.
[] You may exchange shares only in Funds that are qualified for sale in your
state and that are offered in this prospectus. You may not exchange shares in
one 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 a 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). Exchanges out of the
Fixed-Income and Money Market Funds are exempt from this restriction.
[] We may restrict or refuse your exchanges if we receive, or anticipate
receiving, simultaneous orders affecting a large portion of a Fund's assets or
if we detect a pattern of exchanges that suggests a market-timing strategy. n We
reserve the right to refuse exchanges into a Fund by any person or group if, in
our judgment, the Fund would be unable to effectively invest the money in
accordance with its investment objective and policies, or might be adversely
affected in other ways.
[] Any redemption fees will apply to exchanges or redemptions out of a Fund.
44
<PAGE>
Selling Shares
You may sell some or all of your fund shares on days that the New York Stock
Exchange is open for trading (except bank holidays for the Fixed-Income and
Money Market Funds). 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, 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. Shares
purchased by check may not be redeemed until 15 days after the purchase date.
Within this 15-day period, you may choose to exchange into the Government Money
Market fund.
Aside from any applicable redemption fees, we generally will not charge you
any fees when you sell your shares, although there are some minor exceptions:
> For sharers sold by wire pay a $10 wire transfer fee that will be deducted
directly from their 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.
Shares can be sold in several ways:
[] By Mail. Send us a letter including your name, Montgomery account number, the
Fund from which you would like to sell shares 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 accountholders 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 preprinted, voided check or deposit slip.
If you do not have a preprinted check, please send a signature-guaranteed letter
along with your bank instructions. 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.
Call (800) 572-FUND [3863] for more details.
[sidebar]
Shareholder service is available Monday
through Friday from 6:00 a.m. to 5:00 P.M.
Pacific time.
Shareholders can get information around-
the-clock through the Montgomery Star
System or www.montgomeryfunds.com.
[] By Check. If you have checkwriting privileges in your account, you may write
a check to redeem some of your shares, but not to close your account in the
Fixed-Income or Money Market Funds. A balance must be available for the Fund
upon which the check is drafted. Investments by check must be invested for 15
days before they are available for redemption. Checkwriting is not available for
funds in an IRA. 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.
45
<PAGE>
[] 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 through one of our shareholder service representatives or through our
automated Star System at (800) 572-FUND [3863]. You may not buy or sell shares
in an IRA account 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."
Other Policies
Minimum Account Balances
Due to the cost of maintaining small accounts, we require a minimum 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 each 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.
Share Marketing Plan ("Rule 12b-1 Plan")
The Funds have adopted a Rule 12b-1 Plan for the Class P shares. Under the Rule
12b-1 Plan, the Funds will pay distribution fees to the Distributor at an annual
rate of twenty-five one-hundredths of one percent (0.25%) of each Fund's
aggregate average daily net assets attributable to its Class P shares to
reimburse the Distributor for its distribution costs with respect to such class.
Because the Rule 12b-1 fees are paid out of each Fund's assets on an ongoing
basis, over time these fees will increase the cost of your investment and may
cost you more than paying other types of sales charges.
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) 572-FUND [3863]. 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.
46
<PAGE>
[sidebar]
BUYING AND SELLING SHARES THROUGH SECURITIES
BROKERS AND BENEFIT PLAN ADMINISTRATORS
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 Funds or Montgomery for
providing these services.
Telephone Transactions
By buying or selling shares over the phone, you agree to reimburse the Funds 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.
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
> Sending a transaction confirmation to the investor
The Funds and our 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.
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:
> Using the automated Star System
> By overnight courier
> By telegram
You may discontinue phone privileges at any time.
47
<PAGE>
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-gain 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
Funds pay to them may be subject to up to 30% withholding instead of backup
withholding.
[sidebar]
INVESTMENT MINIMUMS
For regular accounts and IRAs, the
minimum initial investment is $1,000.
Minimum subsequent investment is $100.
After You Invest
Taxes
IRS rules require that the Funds distribute all of their net investment income
and capital gains, if any, to shareholders. Capital gains may be taxable at
different rates depending upon the length of time a 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 Funds' distributions, whether received in cash or reinvested, may be
taxable. Any redemption of a Fund's shares or any exchange of a 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 Funds can be found
in our Statement of Additional Information, available free by calling (800)
572-FUND [3863]. Consult your tax advisor about the potential tax consequences
of investing in the Funds.
A Note on the Montgomery Tax-Free Fund
The Montgomery California Tax-Free Intermediate Bond Fund intends to continue
paying what the IRS calls "exempt-interest dividends" to shareholders by
maintaining, as of the close of each quarter of its taxable year, at least 50%
of the value of their assets in municipal bonds. If the Fund satisfies this
requirement, any distributions paid to shareholders from its net investment
income will be exempt from federal income, to the extent that they derive its
net investment income from interest on municipal bonds. Any distributions paid
from other sources of net investment income, such as market discounts on certain
municipal bonds, will be treated as ordinary income by the IRS.
Dividends and Distributions
As a shareholder in The Montgomery Funds, 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). Income
dividends and capital-gain distributions are paid to all shareholders who
maintain accounts with each Fund as of its "record date."
48
<PAGE>
If you would like to receive dividends and distributions in cash, indicate
that choice on your New Account application. Otherwise, the distribution 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.
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 June 30
and December 31
> 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.
[sidebar]
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.
Investors Fiduciary Trust Company, located in Kansas
City, Missouri, is the Funds' master transfer agent. It
performs certain record keeping and accounting functions for
the Funds.
DST Systems, Inc. also located in Kansas City, Missouri,
assists Investors Fiduciary Trust with certain record keeping
and accounting functions for the Funds.
<TABLE>
[table]
<CAPTION>
INCOME DIVIDENDS CAPITAL GAINS
<S> <C> <C>
Equity Funds (except the Declared and paid in the last Declared and paid in the last
Equity Income Fund) quarter of each calendar year* quarter of each calendar year*
Equity Income Fund Declared and paid on or about the Declared and paid in the last
last business day of each quarter quarter of each calendar year*
Multi-Strategy Funds Declared and paid in the last Declared and paid in the last
quarter of each calendar year* quarter of each calendar year*
U.S. Fixed-Income and Money Declared daily and paid monthly on Declared and paid in the last
Market Funds or about the last business day of quarter of each calendar year*
each month
<FN>
*Following their fiscal year end (June 30), the Funds may make additional
distributions to avoid the imposition of a tax.
</FN>
</TABLE>
49
<PAGE>
[sidebar]
HOW TO AVOID "BUYING A DIVIDEND"
If you plan to purchase shares in a Fund,
check if it is planning to make a distribution
in the near future. Here's why: If you buy
shares of a 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.
50
<PAGE>
[Outside back cover: The Montgomery Funds; Address; Contact Info; Logo]
You can find more information about The Montgomery Funds' 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 800.572.FUND [3863]. You can
review and copy further information about The Montgomery Funds, including the
SAI, at the Securities and Exchange Commission's (SEC's) Public Reference Room
in Washington, D.C. To obtain information on the operation of the Public
Reference Room please call 800.SEC.0330. Reports and other information about The
Montgomery Funds are available at 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 find further information about The Montgomery Funds in our annual and
semiannual shareholder reports, which discuss the market conditions and
investment strategies that significantly affected each Fund's performance during
its most recent fiscal period. To request a copy of the most recent annual or
semiannual report, please call us at (800) 572-FUND [3863], option 3.
Corporate Headquarters:
The Montgomery Funds
101 California Street
- ---------------------------
(800) 572-FUND [3863]
www.montgomeryfunds.com
- ---------------------------
San Francisco, CA 94111-9361 SEC File Nos.: The Montgomery Funds 811-6011
The Montgomery Funds II 811-8064
Funds Distributor, Inc. 10/99
51
<PAGE>
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PART C
OTHER INFORMATION
- --------------------------------------------------------------------------------
<PAGE>
THE MONTGOMERY FUNDS II
--------------
FORM N-1A
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PART C
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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. - Not applicable.
(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
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
C-3
<PAGE>
owned subsidiary of Boston Institutional Group, Inc., a
holding company all of whose outstanding shares are owned by
key employees.
<TABLE>
<CAPTION>
(b) The following is a list of the executive officers, directors
and partners of Funds Distributor, Inc.
<S> <C>
Director, President and Chief Executive Officer Marie E. Connolly
Executive Vice President George A. Rio
Executive Vice President Donald R. Roberson
Executive Vice President William S. Nichols
Senior Vice President, General Counsel, Chief Margaret W. Chambers
Compliance Officer, Secretary and Clerk
Senior Vice President Michael S. Petrucelli
Director, Senior Vice President, Treasurer and Joseph F. Tower, III
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
</TABLE>
(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.
C-4
<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 30st day of August 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 August 30, 1999
- --------------------
George A. Rio Principal Executive Officer,
Treasurer and Principal
Financial and Accounting
Officer
R. Stephen Doyle * Chairman of the August 30, 1999
- --------------------
R. Stephen Doyle Board of Trustees
Andrew Cox * Trustee August 30, 1999
- --------------------
Andrew Cox
Cecilia H. Herbert * Trustee August 30, 1999
- --------------------
Cecilia H. Herbert
John A. Farnsworth * Trustee August 30, 1999
- --------------------
John A. Farnsworth
*By: /s/ Julie Allecta
--------------------
Julie Allecta, Attorney-in-Fact
pursuant to Powers of Attorney previously filed.
C-5
