THIS PROFILE IS FILED UNDER RULE 497(K)(1)(i) UNDER THE
SECURITIES ACT OF 1933.
PROFILE
July __, 1998
FIRSTHAND FUNDS
[Insert Logo here]
THE TECHNOLOGY VALUE FUND
THE MEDICAL SPECIALISTS FUND
THE TECHNOLOGY LEADERS FUND
THE TECHNOLOGY INNOVATORS FUND
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The Technology Value Fund, The Medical Specialists Fund, The
Technology Leaders Fund and The Technology Innovators Fund
are stock funds whose goal is to realize
long-term capital appreciation.
This Profile summarizes key information about these Funds that is included in
the Funds' prospectus. The Funds' prospectus includes additional information
about the Funds, including a more detailed description of the risks associated
with investing in the Funds that you may want to consider before you invest. You
may obtain the prospectus and other information about the Funds at no cost by
calling toll-free 1-888-884-2675 or on the Funds' website at
www.firsthandfunds.com.
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THE TECHNOLOGY VALUE FUND
THE MEDICAL SPECIALISTS FUND
THE TECHNOLOGY LEADERS FUND
THE TECHNOLOGY INNOVATORS FUND
1. WHAT IS THE OBJECTIVE OF EACH FUND?
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Each Fund seeks to realize long-term capital appreciation.
2. WHAT ARE THE FUNDS' PRINCIPAL INVESTMENT STRATEGIES?
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THE TECHNOLOGY VALUE FUND - invests primarily in equity securities of
companies in the electronic technology and medical technology fields which the
investment adviser considers to be undervalued and have potential for capital
appreciation.
THE MEDICAL SPECIALISTS FUND - invests primarily in equity securities of
companies in the health and biotechnology field which the investment adviser
considers to have a strong earnings growth outlook and potential for capital
appreciation.
THE TECHNOLOGY LEADERS FUND - invests primarily in equity securities of
companies in the high technology field which the investment adviser considers to
have the strongest competitive position.
THE TECHNOLOGY INNOVATORS FUND - invests primarily in equity securities of
companies in the high technology field which the investment adviser considers to
be best positioned to introduce successful new products.
Additional information about the Funds' investments is available in the Funds'
annual and semiannual reports to shareholders. In the Funds' annual report you
will find a discussion of the market conditions and investment strategies that
significantly affected the Funds' performance during the last fiscal year. You
may obtain these reports at no cost by calling 1-888-884-2675.
3. WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUNDS?
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o Each Fund is non-diversified and as such, a relatively high percentage of
the Funds' assets may be invested in the securities of a limited number of
issuers. Accordingly, the Funds may be more susceptible to any single
economic, political or regulatory occurrence than a diversified fund.
o Each Fund will concentrate its investments (invest 25% or more of its total
assets) in the technology industry. The Funds will be subject to greater
risk because of their concentration of investments in a single industry and
within certain segments of the industry because, compared to the broad
market, a particular group of related stocks could decline in price due to
developments affecting an industry. For example, the technology industry
may be strongly affected by changes in the economic climate, broad market
swings, moves in a dominant industry stock or regulatory changes.
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o Each Fund may invest a substantial portion of its assets in small
capitalization companies. While investments in smaller companies may have
greater potential for rapid growth, they can involve greater risks and may
be less liquid and more volatile than investments in larger companies.
o The Funds are primarily stock funds; like all stock investments, this
exposes the investor to potential drops in stock prices. The stock market's
long rise over time has been punctuated by declines; even in rising
markets, the share prices of the most profitable companies can fall.
o Each Fund is designed for long-term investors who seek capital appreciation
and are comfortable with the risks described here. Each Fund's investment
return and net asset value fluctuate, and when you sell your shares you may
receive more or less than the amount you paid for them.
o Each Fund (except for The Technology Value Fund) may write (sell) covered
put and call options and may buy put and call options written by others
covering securities and stock indices. Each Fund may write covered call
options. The use of options, while designed to hedge against adverse price
changes in portfolio securities and/or enhance income, may result in lost
profits and transaction costs.
BAR CHART AND PERFORMANCE TABLE
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The bar chart provides an indication of the greater than average variability of
The Technology Value Fund's returns by showing the changes in the Fund's
performance from year to year during the life of the Fund's operations. The
performance table compares the Fund's average annual returns for one year and
since inception to those of a broad based securities market index. How the Fund
has performed in the past is not necessarily an indication of how the Fund will
perform in the future. The other Funds have not yet completed one calendar year
of operations and are not included in this chart.
ANNUAL TOTAL RETURN OF THE TECHNOLOGY VALUE FUND FOR THE YEARS ENDED DECEMBER
31:
[bar chart]
1997 - 6.46%
1996 - 60.55%
1995 - 61.17%
1994*- 25.30%
* The Technology Value Fund Commenced Operations on May 20, 1994.
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During the period shown in the bar chart, the highest return for a quarter was
31.51% during the quarter ended June 30, 1997 and the lowest return for a
quarter was -18.72% during the quarter ended December 31, 1997.
The total return for The Technology Value Fund for the six months ended June 30,
1998 was 9.52%.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED JUNE 30, 1998:
LIFE OF FUND
ONE YEAR (Since 5/20/94)
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The Technology Value Fund -2.36% 38.19%
S&P 500* 30.16% 27.53%
* The S&P 500 Index is the Standard & Poor's 500 Index, a widely recognized,
unmanaged index of 500 stocks, the purpose of which is to portray the pattern
of common stock price movement.
4. WHAT ARE THE FUNDS' FEES AND EXPENSES?
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This section describes the fees and expenses that you may pay if you buy and
hold shares of the Funds. Annual fund operating expenses are calculated as a
percentage of average daily net assets.
SHAREHOLDER FEES
(fees paid directly from your investment):
The Funds are 100% no-load, so the Funds do not charge you any fees to buy or
sell shares.
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets):
<TABLE>
<S> <C> <C> <C> <C>
Management Fees 1.50%(A) 1.50%(A) 1.50%(A) 1.50%(A)
Distribution (12b-1) Fees None None None None
Other Expenses .43% .45% .45% .45%
----- ----- ----- -----
Total Annual Fund Operating Expenses 1.93%(A) 1.95%(A) 1.95%(A) 1.95%(A)
===== ===== ===== =====
</TABLE>
(A) The Advisory Agreement limits each Fund's total annual operating expenses
to 1.95% of the Fund's average daily net assets up to $200 million, 1.90%
of such assets from $200 million to $500 million, 1.85% of such assets from
$500 million to $1 billion, and 1.80% of such assets in excess of $1
billion.
With respect to The Technology Value Fund, "Other Expenses" are based on amounts
incurred during the most recent fiscal year, except that they have been restated
to reflect current fees as if they had been in effect during the entire year.
With respect to The Medical Specialists Fund, The Technology Leaders Fund and
The Technology Innovators Fund, the percentages expressing "Other Expenses" are
based on estimated amounts for the current fiscal year.
4
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EXAMPLE:
This Example is intended to help you compare the cost of investing in the Funds
with the cost of investing in other mutual funds.
This Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Funds' operating expenses remain the same. Although your actual costs may be
higher or lower, based on those assumptions your costs would be:
The The Medical The The Technology
Technology Specialists Technology Innovators
Value Fund Fund Leaders Fund Fund
---------- ----------- ------------ ------------
1 Year......... $ 196 $198 $198 $198
3 Years........ 606 612 612 612
5 Years........ 1,042
10 Years........ 2,254
5. WHO ARE THE INVESTMENT ADVISER AND PORTFOLIO MANAGERS OF THE FUNDS?
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Interactive Research Advisers, Inc., 101 Park Center Plaza, Suite 1300, San
Jose, California 95113, is the investment adviser to
the Funds.
Kevin M. Landis and Kendrick W. Kam are co-portfolio managers of The Technology
Value Fund. Mr. Landis is the portfolio manager of The Technology Leaders Fund
and The Technology Innovators Fund. Mr. Kam is the portfolio manager of The
Medical Specialists Fund.
Mr. Kam has been President of the Investment Adviser since its founding in 1993.
Mr. Kam was previously co-founder and Vice President of Marketing and Finance
for Novoste Corporation, a medical device company headquartered in Aguadilla,
Puerto Rico. Mr. Landis has been Vice President and Secretary of the Investment
Adviser since 1993. He served as New Products Marketing Manager for S-MOS
Systems, Inc., a San Jose, California-based semiconductor firm, before joining
the Investment Adviser.
6. HOW DO I BUY SHARES?
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The Funds are available to U.S. citizens or residents. Shares are sold without a
sales charge. To purchase shares of any of the Firsthand Funds, complete the
enclosed application and mail it with a check payable to the appropriate
Fund(s). Your account may also be established by wiring funds from your bank or
other financial institution. You may also open your account through a
broker-dealer authorized to sell shares of the Funds. Purchases will be
processed at a Fund's next net asset value calculated after your order is
received and accepted. Your initial investment must be at least $10,000, or
$2,000 for initial investments by an IRA. The minimum additional investment is
$50, subject to certain exceptions. Lower minimums may be available
5
<PAGE>
to investors purchasing shares of the Funds through certain brokerage firms or
financial institutions.
Please call shareholder services at 1-888-884-2675 or visit the Funds' website
at www.firsthand.com for more information.
7. HOW DO I SELL SHARES?
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You may redeem all or a portion of your shares on any business day by written
request. If you have made appropriate arrangements to do so, you may request
that your redemption proceeds be wired to an existing account with a bank or
other financial institution. Your shares may be redeemed through a broker-dealer
authorized to do so. Shares may also be exchanged at net asset value among any
of the Firsthand Funds or between any Firsthand Fund and the Short Term
Government Income Fund (a series of the Countrywide Investment Trust).
8. HOW ARE DISTRIBUTIONS MADE AND WHAT ARE THE TAX CONSIDERATIONS?
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Each Fund intends to declare and distribute income dividends and net capital
gains once annually. The Funds' capital gains distributions are taxable at
different rates depending on how long the Funds have held their assets. All
dividends and distributions will be reinvested automatically in shares of the
applicable Fund unless you elect to receive your distributions in cash.
9. WHAT OTHER SERVICES ARE AVAILABLE FROM THE FUNDS?
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A wide range of shareholder services are available, including, but not limited
to:
o 24-hour automated telephone line
o Automatic investment plan
o Direct deposit plan
o Tax-deferred retirement plans (e.g, IRAs, Keogh, 401(k), 403(b),
etc...)
o Exchange privilege
FOR MORE INFORMATION ABOUT INVESTING IN FIRSTHAND FUNDS, PLEASE CALL TOLL-FREE
1-888-884-2675 OR VISIT THE FUNDS' WEBSITE AT WWW.FIRSTHANDFUNDS.COM.
6
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[LOGO] FIRSTHAND NEW ACCOUNT APPLICATION
You may NOT establish an IRA account using this form
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You may purchase shares after reviewing the information in this profile or you
may request and review a prospectus (and other information) before making a
decision to invest in any of the Funds. If you choose to purchase shares after
reviewing this profile, you will receive the prospectus with your confirmation
of purchase. Please read the prospectus carefully and promptly after you receive
it.
Profile and application valid until: 09/20/98, after which time, the SEC
requires you to either read the current full prospectus located on our web site,
www.firsthandfunds.com, or call 1-888-884-2675 to request and then read the
latest prospectus or profile.
IF YOU ARE SENDING THIS APPLICATION IN AFTER THE VALID DATE,
YOU MUST SIGN BELOW:
I certify that I have read the current prospectus or profile of the Funds:
_______________________________ _______________
Signature Date
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Mail this form to: Firsthand Funds, P.O. Box 5354, Cincinnati, OH 45201-5354
(Call toll-free 1-888-884-2675 for help with this form or to
open an IRA account)
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FUND USE ONLY
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ACCOUNT NO: __________________________-____
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1 Type of Account and Owner Name(s)
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Please print in CAPITAL LETTERS. Choose one:
[ ] INDIVIDUAL OR JOINT ACCOUNT *
*Joint tenancy with right of survivorship unless instructed otherwise
OWNER Title: Mr. [ ] Ms. [ ] Mrs. [ ] Dr. [ ]
Name (first, middle initial, last)
_________________________________________________________________________
|_________________________________________________________________________|
JOINT OWNER Title: Mr. [ ] Ms. [ ] Mrs. [ ] Dr. [ ]
Name (first, middle initial, last)
_________________________________________________________________________
|_________________________________________________________________________|
[ ] CUSTODIAL ACCOUNT
Uniform Gift or Transfer to Minors Act (UGMA or UTMA)
MINOR
Name (first, middle initial, last)
_________________________________________________________________________
|_________________________________________________________________________|
CUSTODIAN Title: Mr. [ ] Ms. [ ] Mrs. [ ] Dr. [ ]
Name (first, middle initial, last)
_________________________________________________________________________
|_________________________________________________________________________|
_ _
State of Residence (Minor's or Custodian's) |_||_|
[ ] TRUST, CORPORATION OR OTHER ENTITY ACCOUNT
Name of Trust, Corp., or Other Entity
_________________________________________________________________________
|_________________________________________________________________________|
Trustee Name or Type of Entity
_________________________________________________________________________
|_________________________________________________________________________|
Beneficiary Name (optional)
_________________________________________________________________________
|_________________________________________________________________________|
month day year
_ _ _ _ _ _
Date of Trust Agreement |_||_| |_||_| |_||_|
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2 Tax Identification Number
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Owner's or Minor's Social Security or Tax ID Number (Use Minor's Social Security
Number for Custodial Account)
_ _ _ _ _ _ _ _ _
|_||_||_| - |_||_| - |_||_||_||_|
Joint Owner's or Custodian's Social Security or Tax ID Number
_ _ _ _ _ _ _ _ _
|_||_||_| - |_||_| - |_||_||_||_|
Other Entity Tax ID Number
_ _ _ _ _ _ _ _ _
|_||_| - |_||_||_||_||_||_||_|
Nonresident aliens must fill out Form W-8. Please call 1-888-884-2675 to request
the form.
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3 Address
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Street Address or P.O. Box
______________________________________________________________________________
|______________________________________________________________________________|
______________________________________________________________________________
|______________________________________________________________________________|
City State
____________________________________________________ _ _
|____________________________________________________| |_||_|
Zip Code
_ _ _ _ _ _ _ _ _
|_||_||_||_||_| - |_||_||_||_|
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4 Other Account Information
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Daytime Phone Number Ext.
_ _ _ _ _ _ _ _ _ _ _ _ _ _
|_||_||_| |_||_||_| - |_||_||_||_| |_||_||_||_|
Evening Phone Number Ext.
_ _ _ _ _ _ _ _ _ _ _ _ _ _
|_||_||_| |_||_||_| - |_||_||_||_| |_||_||_||_|
Date of Birth (Owner/Minor) Date of Birth (Joint/Custodian)
month day year month day year
_ _ _ _ _ _ _ _ _ _ _ _
|_||_| - |_||_| - |_||_| |_||_| - |_||_| - |_||_|
[ ] U.S. Citizen [ ] Resident Alien
[ ] Nonresident Alien - Permanent foreign address for tax purposes is:
______________________________________________________________________________
|______________________________________________________________________________|
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5 Investment Amount
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Fill in the amount of your investment in each fund. For each fund in which you
wish to invest, the minimum initial investment is $10,000.00.
_ _ _ _ _ _ _ _ _
$ |_|,|_||_||_|,|_||_||_|.|_||_| Technology
Value
_ _ _ _ _ _ _ _ _
$ |_|,|_||_||_|,|_||_||_|.|_||_| Medical
Specialists
_ _ _ _ _ _ _ _ _
$ |_|,|_||_||_|,|_||_||_|.|_||_| Technology
Leaders
_ _ _ _ _ _ _ _ _
$ |_|,|_||_||_|,|_||_||_|.|_||_| Technology
Innovators
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6 Investment Method
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[ ] BY CHECK OR MONEY ORDER
Make payable to Firsthand Funds.
[ ] BY WIRE
Please call Shareholder Services toll-free at 1-888-884-2675 to have an
account number assigned and to receive wire instructions.
<PAGE>
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7 Automatic Investment Plan
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The Automatic Investment Plan offers the convenience of automatic investing on a
regular basis. Accounts using this plan are subject to the Firsthand Funds
account minimum of $10,000.00 and a subsequent investment minimum of $50.00 per
investment and $50.00 per month.
Automatic Investment Amount
_ _ _ _ _ _ _
$ |_||_|,|_||_||_|.|_||_| Technology Value
_ _ _ _ _ _ _
$ |_||_|,|_||_||_|.|_||_| Medical Specialists
_ _ _ _ _ _ _
$ |_||_|,|_||_||_|.|_||_| Technology Leaders
_ _ _ _ _ _ _
$ |_||_|,|_||_||_|.|_||_| Technology Innovators
Please make my automatic investment(s) on:
[ ] the last business day of each month
[ ] the 15th day of each month
[ ] both the 15th and last business day of each month
Name of Financial Institution (FI)
______________________________________________________________________________
|______________________________________________________________________________|
City State
____________________________________________________ _ _
|____________________________________________________| |_||_|
ABA Routing Number FI Account Number
_____________________________ ____________________________
|_____________________________| |____________________________|
[ ] Checking Account [ ] Savings Account
________________________________________________________________________________
(Signature of Depositor EXACTLY as it appears on FI Records)
________________________________________________________________________________
(Signature of Joint Tenant - if any)
(Joint Signatures are required when bank account is in joint names. Please sign
exactly as signature appears on your FI's records.)
PLEASE ATTACH A VOIDED CHECK FOR THE AUTOMATIC INVESTMENT PLAN.
INDEMNIFICATION TO DEPOSITOR'S BANK
In consideration for your participation in a plan which Interactive Research
Advisers, Inc. ("IRA") has put into effect, by which amounts, determined by your
depositor, payable to Firsthand Funds for purchase of shares of the Technology
Value Fund, the Medical Specialists Fund, the Technology Leaders Fund, or the
Technology Innovators Fund ("the Funds"), are collected by IRA, IRA hereby
agrees:
IRA will indemnify and hold you harmless from any liability to any person or
persons whatsoever arising out of the payment by you of any amount drawn by
the Funds to their own orders on the account of your depositor or from any
liability to any person whatsoever arising out of the dishonor by you whether
with or without cause or intentionally or inadvertently, of any such checks.
IRA will defend, at its own cost and expense, any action which might be
brought against you by any person or persons whatsoever because of your
actions taken pursuant to the foregoing request or in any manner arising by
reason of your participation in this arrangement. IRA will refund to you any
amount erroneously paid by you to the Funds on any such check if the claim for
the amount of such erroneous payment is made by you within six (6) months from
the date of such erroneous payment; your participation in this arrangement and
that of the Funds may be terminated by thirty (30) days written notice from
either party to the other.
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8 Distribution Options
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Dividends and capital gains will be reinvested UNLESS you indicate otherwise.
[ ] REINVEST ALL DIVIDENDS AND CAPITAL GAINS INTO THE FUND(S) FROM WHICH THEY
ARE PAID.
[ ] PAY ALL DIVIDENDS AND CAPITAL GAINS BY CHECK TO THE ACCOUNT HOLDER.
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9 Resolutions
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THIS SECTION TO BE COMPLETED BY CORPORATIONS, TRUSTS AND OTHER ORGANIZATIONS
ONLY
Resolved: That this corporation or organization become a shareholder of
Firsthand Funds (the Trust) and that:
___________________________________________________________________________
is (are) hereby authorized to complete and execute the Application on behalf of
the corporation or organization and to take any action for it as may be
necessary or appropriate with respect to its shareholder account with the Trust,
and it is:
FURTHER RESOLVED: That any one of the above noted officers is authorized to sign
any documents necessary or appropriate to appoint Countrywide Fund Services,
Inc. as redemption agent of the corporation or organization for shares of the
Trust, to establish or acknowledge terms and conditions governing the redemption
of said shares and to otherwise implement the privileges elected on the
Application.
CERTIFICATE
I hereby certify that the foregoing resolutions are in conformity with the
Charter and By-Laws or other empowering documents of the
___________________________________________________________________________
(Name of Organization)
incorporated or formed under the laws of ____________________________________
(State)
and were adopted at a meeting of the Board of Directors or Trustees of the
organization or corporation duly called and held on ____________________ at
which a quorum was present and acting throughout, and that the same are now in
full force and effect. I further certify that the following is (are) duly
elected officer(s) of the corporation or organization, authorized to act in
accordance with the foregoing resolutions.
Name Title
____________________________________ ______________________________________
____________________________________ ______________________________________
____________________________________ ______________________________________
Witness my hand and seal of the corporation or organization this _________ day
of ________________________________, 19_____________.
____________________________________ ______________________________________
*Secretary-Clerk Other Authorized Officer (if required)
*If the Secretary or other recording officer is authorized to act by the above
resolutions, this certificate must also be signed by another officer.
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10 Signature
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By signing this form, I certify that:
o I have received, read, and agree to the terms of Firsthand Funds' The
Technology Value Fund, The Medical Specialists Fund, The Technology Leaders
Fund & The Technology Innovators Fund profile. I have the authority and legal
capacity to purchase mutual fund shares, am of legal age in my state, and
believe each investment is suitable for me.
o I authorize Firsthand Funds, The Technology Value Fund, The Medical
Specialists Fund, The Technology Leaders Fund, The Technology Innovators Fund
and their affiliates and agents to act on any instructions believed to be
genuine for any service authorized on this form and hereby release
Interactive Research Advisers, Inc., Firsthand Funds, Countrywide Fund
Services, Inc., and their respective officers, employees, agents and
affiliates from any and all liability in the performance of the acts
instructed herein, provided that such entities have exercised due care to
determine that the instructions are genuine.
o Firsthand Funds can redeem shares from my account(s) to reimburse it for any
loss due to nonpayment or other indebtedness.
o Under penalty of perjury, I declare the tax identification number(s) shown on
this form is correct. If I fail to give the correct number or sign this form,
Firsthands Funds may reject, restrict, or redeem my investment. I may also be
subject to IRS backup withholding (currently 31%) on all distributions and
redemptions, and I may be subject to a $50 IRS penalty.
o Under penalty of perjury, I declare I am NOT subject to IRS backup
withholding because 1) I have not been notified, or 2) notification has been
revoked (cross out "NOT" if you are currently subject to withholding), or 3)
if I have indicated in Section 4 that I am a nonresident alien, I certify
that for dividends, I am not a U.S. citizen or resident (or I am filing for a
foreign corporation, partnership, estate, or trust).
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For clarification on any of these certification issues, please contact us for
assistance. The IRS does not require your consent to any provision of this
document other than the certifications required to avoid backup withholding.
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PLEASE SIGN HERE
____________________________________ ______________________________________
Signature of Owner, Date Signature of Joint Owner, Date
Custodian or Trustee Corporate Officer, etc.
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THANK YOU FOR INVESTING WITH FIRSTHAND FUNDS.
YOU WILL RECEIVE A WRITTEN CONFIRMATION SHORTLY.
APP-0598
