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Previous: REPTRON ELECTRONICS INC, SC 13G, 1998-06-08 |
Next: HIGHWOODS PROPERTIES INC, S-3/A, 1998-06-08 |
<PAGE> 1
PROSPECTUS
AMERICAN HERITAGE GROWTH FUND, INC. LOGO
------------------------
A NO-LOAD MUTUAL FUND
A DIVERSIFIED, OPEN-END MANAGEMENT INVESTMENT COMPANY
HAVING AN INVESTMENT OBJECTIVE OF SEEKING GROWTH OF CAPITAL
------------------------
1370 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(212) 397-3900
(800) 828-5050
------------------------
AMERICAN HERITAGE GROWTH FUND, INC. (the "Fund") is a no-load mutual fund.
The Fund is designed for investors who desire to participate in a carefully
supervised program of seeking growth of capital. The Fund will seek growth of
capital by investing primarily in common stocks and securities convertible into
or exchangeable for common stocks. Although the Fund intends to invest primarily
in securities issued by companies with medium and large market capitalizations,
the Fund has and intends to continue to invest in securities issued by small and
virtually unknown companies, including companies that have never earned a
profit.
This Prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. A Statement of Additional
Information dated June 1, 1998 containing additional information about the Fund
has been filed with the Securities and Exchange Commission and is available upon
request, without charge, by writing to the Fund at the address set forth above
or by calling the Fund at either of the above telephone numbers. The Statement
of Additional Information is incorporated by reference into the Prospectus. The
Securities and Exchange Commission maintains a web site (http://www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding registrants that file electronically
with the Securities and Exchange Commission.
THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS JUNE 1, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
Expense Summary......................... 2
Highlights.............................. 3
Financial Highlights and Related
Ratios/Supplemental Data.............. 4
Senior Securities....................... 5
The Fund's Investment Objective,
Policies and Risk Factors............. 5
Management's Discussion of the Fund's
Performance........................... 9
Investment Restrictions................. 9
</TABLE>
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
Management.............................. 10
Determination of Net Asset Value........ 11
How to Become an Investor in the Fund... 11
How to Redeem Shares.................... 12
Distribution of Income Dividends
and Realized Capital Gains............ 13
Total Return............................ 13
Shareholder Services.................... 14
Additional Facts........................ 14
</TABLE>
EXPENSE SUMMARY
This table is designed to illustrate the various fees and expenses that
you, as an investor in the Fund, will incur.
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Sales load imposed on purchases...... None
Sales load imposed on reinvested
dividends.......................... None
Deferred sales load.................. None
Redemption fees...................... None
Exchange Fee......................... None
ANNUAL FUND OPERATING EXPENSES
(As a percentage of Average Net Assets)
Management fees...................... 1.25%(1)
12b-1 fees........................... None
Other expenses....................... 1.42%(2)
Total Fund operating expenses........ 2.67%(2)
</TABLE>
(1) The fee, with respect to any average net assets in excess of $100 million,
will be 1% thereof.
(2) The Fund's investment advisor, American Heritage Management Corporation
("AHMC"), has agreed to decrease the investment advisory fee or, if
necessary, to reimburse the Fund if and to the extent that the Fund's
aggregate annual operating expenses exceed specified percentages of the
Fund's net assets. The percentages are 2.5% of the first $30 million, 2% of
the next $70 million and 1.5% of average net assets in excess of $100
million. When calculating the Fund's expenses for the foregoing purpose,
interest, taxes, brokerage commissions, extraordinary expenses, including
expenses of litigation, as well as a portion of the Fund's custodian fees
attributable to investments in foreign countries are excluded. AHMC may
terminate such agreement at any time provided that written notice of the
termination is mailed to each of the Fund's shareholders not less than
fifteen days prior to the termination.
EXAMPLE
The following example illustrates the expenses that you would pay on a
$1,000 investment assuming (1) a 5% annual return and (2) redemption at the end
of each time period. Since the Fund charges no redemption fees of any kind, the
expenses would be the same if no redemption was made.
<TABLE>
<CAPTION>
1 Year 3 Years 5 years 10 years
<S> <C> <C> <C>
$28 $86 $146 $310
</TABLE>
The purpose of the table and the example is to assist an investor in
understanding the various costs and expenses that an investor in the Fund will
bear, whether directly or indirectly. THE EXAMPLES ARE ESTIMATED AS SET FORTH IN
THE NOTE TO THE PREVIOUS TABLE AND SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.
Certain expenses of the Fund aggregating approximately $15,000 have been
paid by AHMC. AHMC has agreed to permit the Fund to defer repayment of that
amount to AHMC until such time, if any, as the value of the Fund's net assets
reaches $30 million. In addition, certain creditors of the Fund, including AHMC,
have agreed to defer payment to them of an aggregate of approximately $70,000
until such time. If the value of the Fund's net assets reaches $30 million, the
Fund will pay the foregoing amounts at that time. In such event, for purposes of
computing the Fund's net asset value, the amount so paid will be amortized over
a period of twelve months.
On May 18, 1998, the value of the Fund's net assets was approximately
$1,191,000.
2
<PAGE> 3
HIGHLIGHTS
INVESTMENT
OBJECTIVE The investment objective of the Fund is to seek growth of
capital. Income from the Fund's investment portfolio will be
only an incidental consideration and entirely subordinate to
the Fund's investment objective. The Fund is a diversified
investment company. See "The Fund's Investment Objective,
Policies and Risk Factors."
NO SALES
CHARGE No sales charge or load will be deducted from the amount
invested. Accordingly, the Fund is a "no load" Fund. See "How
to Become an Investor in the Fund."
MINIMUM
INVESTMENTS The minimum initial investment is $1,000. Subsequent
investments may be made, at the option of the investor, in
amounts of $500 or more. Shareholders may open additional
accounts (e.g. custodian accounts, IRA accounts, and Keogh
accounts) with a minimum investment of $500.
LIQUIDITY The Fund provides day-to-day liquidity. Investors have the
right to redeem their shares at the net asset value next
determined after receipt of a duly made request. There is no
redemption fee. See "How to Redeem Shares."
RISK FACTORS The Fund may utilize the investment techniques of short-term
trading, the purchase of foreign securities and the purchase
of securities issued by companies with small or thin market
capitalizations. These techniques involve greater than normal
risk and attainment of the Fund's investment objective
cannot, of course, be assured. See "The Fund's Investment
Objective, Policies and Risk Factors."
DIVERSIFICATION The Fund is a diversified investment company and will,
therefore, spread investment risk by limiting its holdings in
any one company. See "Investment Restrictions."
INVESTMENT
ADVISOR American Heritage Management Corporation is the Fund's
Investment Advisor. The primary business of the Investment
Advisor is to provide investment advice to the Fund and to
The American Heritage Fund, Inc. The Fund pays the Investment
Advisor a fee which, on an annual basis, amounts to one and
one-quarter percent (1.25%) of the first $100 million of the
value of average daily net assets of the Fund and one percent
(1%) of the value of any additional net assets. See
"Management."
CAPITAL STOCK This Prospectus relates to an offer of shares of capital
stock, $.001 par value.
RETIREMENT
PLANS The Fund offers a prototype Individual Retirement Plan (IRA).
See "Shareholder Services."
3
<PAGE> 4
FINANCIAL HIGHLIGHTS AND RELATED RATIOS/SUPPLEMENTAL DATA
The Fund's financial highlights and related ratios/supplemental data are
reflected in the following table. Items 1 through 7 are expressed on a per share
basis for a share outstanding throughout the period. The information was derived
from financial statements which have been examined by Landsburg Platt
Raschiatore & Dalton, independent certified public accountants.
AMERICAN HERITAGE GROWTH FUND, INC.
FINANCIAL HIGHLIGHTS AND RELATED
RATIOS/SUPPLEMENTAL DATA
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE FOR THE PERIOD
YEAR ENDED YEAR ENDED YEAR ENDED FROM MAY 25, 1994**
JANUARY 31, JANUARY 31, JANUARY 31, THROUGH JANUARY 31,
1998 1997 1996 1995
----------- ----------- ----------- -------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ .16 $ 1.66 $ 3.57 $ 5.00
Income from investment operations:
Net investment income .00 .24 1.51 2.17
Net gains or (losses) on
securities (both realized and
unrealized) (.01) (.32) (.69) (1.24)
---------- ---------- ---------- ----------
Total from investment operations (.01) (.08) .82 .93
Less distributions:
Dividends (from net investment
income) (.01) (1.42) (2.73) (2.36)
Dividends (from net realized gains
on investments) -- -- -- --
---------- ---------- ---------- ----------
Net asset value, end of period $ .14 $ .16 $ 1.66 $ 3.57
========== ========== ========== ==========
Total return (9.00)% (4.66)% 29.48% 30.42%*
Net assets, end of period $1,162,294 $2,240,860 $4,932,970 $3,898,560
Ratio of expenses to average net
assets 2.67% 2.81% 2.62% 2.50%*
Ratio of net investment income
(loss) to average net assets (1.25)% 25.97% 44.46% 63.52%*
Portfolio turnover rate 172.20% 1,378.14% 4,262.64% 3,213.89%
Average commission per share $ .0780 $ .0627 $ .0388 N/A
</TABLE>
* Annualized
** Commencement of operations
N/A -- Disclosure not applicable to prior periods.
4
<PAGE> 5
SENIOR SECURITIES
The following table provides certain information with respect to senior
securities (including bank loans) of the Fund during each of the fiscal years
ended January 31, 1995, 1996, 1997 and 1998.
<TABLE>
<CAPTION>
AMOUNT OF DEBT AVERAGE AMOUNT OF AVERAGE NUMBER OF AVERAGE AMOUNT OF
OUTSTANDING AT DEBT OUTSTANDING SHARES OUTSTANDING DEBT PER SHARE
FISCAL YEAR END OF FISCAL YEAR DURING FISCAL YEAR DURING THE FISCAL YEAR DURING THE FISCAL YEAR
- ----------- ------------------ ------------------ ---------------------- ----------------------
<S> <C> <C> <C> <C>
1995 0.00 $ 27,756 388,217 $.0715
1996 $1,035,656 $105,159 1,399,457 $.0751
1997 $ 295,722 $ 94,076 4,503,223 $.0209
1998 $ 0 $ 46,754 10,429,879 $.0045
</TABLE>
The averages shown above were determined on a daily basis.
THE FUND'S INVESTMENT OBJECTIVE, POLICIES AND RISK FACTORS
INVESTMENT OBJECTIVE
The investment objective of the Fund is to seek growth of capital. Income
from the Fund's investment portfolio will be only an incidental consideration
entirely subordinate to the capital growth objective. It is important that the
Fund's objective match the investor's objective. There can be no assurance that
the Fund will, in fact, achieve its objective. The investment objective of the
Fund cannot be changed without shareholder approval.
The value of a shareholder's share on redemption may be more or less than
the shareholder's cost depending upon the net asset value at the time.
RISK FACTORS
The Fund may seek to obtain its investment objective through the use of
certain investment techniques which may entail greater than average risks. For
example, the Fund may engage in short-term trading in order to take advantage of
market fluctuations and the Fund may invest in foreign securities. The Fund may
purchase speculative securities issued by companies that have never earned a
profit, do not pay dividends or which are not traded on a national securities
exchange. Such companies are often extremely thinly capitalized and the Fund
bears the risk of a total loss of its investment in such companies. Purchases of
such securities entail greater than normal risk, including the risk that the
Fund may lose the total purchase price of such securities. The Fund's techniques
may also include entering into transactions involving derivative securities such
as writing covered options. The Fund's investment techniques can be expected to
result in greater turnover of the Fund's portfolio and greater expense than is
customary for most mutual funds. The Fund anticipates that its annual portfolio
turnover rate will be 150% or more. During the fiscal year ended January 31,
1998, the Fund's portfolio turnover rate was approximately 172%. The high rate
of portfolio turnover was primarily due to Management's decision to aggressively
trade a portion of the Fund's portfolio on a short term basis. Management
believes that the Fund's annual portfolio turnover rate will, in the foreseeable
future, not generally exceed 600%. It is difficult, however, to predict the
maximum rate with any certainty. A high rate of portfolio turnover can be
expected to result in the payment of a high volume of brokerage
5
<PAGE> 6
commissions and the recognition of capital gains and losses. To the extent that
the Fund distributes short-term capital gains, such distributions will be
taxable as dividends to the investor upon declaration. If AHMC terminates its
agreement to reimburse the Fund for certain expenses, the Fund's expenses, as a
percentage of average net assets, can be expected to be higher than those of
substantially all other management investment companies. See "Expense Summary."
An investment in the Fund is not guaranteed by any bank or governmental
agency.
The Fund has and may continue to purchase securities on or shortly prior to
their respective ex-dividend dates and to dispose of such securities soon
thereafter. Such practice can increase the amount of taxable income of
shareholders while decreasing the Fund's total return.
See "Management" and "Distribution of Income Dividends and Realized Capital
Gains" in this Prospectus and "Brokerage Allocation and Other Practices" in the
Fund's Statement of Additional Information.
INVESTMENT POLICIES
Under normal circumstances, more than 80% of the Fund's investments, other
than cash and cash equivalents, will consist of common stocks and securities
convertible into or exchangeable for common stocks such as convertible preferred
stocks and convertible debt securities. The Fund intends to invest primarily in
securities issued by companies with medium and large market capitalizations. To
a limited degree, the Fund may invest in non-convertible preferred stocks and
debt securities, such as corporate bonds and debentures and securities issued by
the United States Government and its instrumentalities, when they are believed
to offer opportunities for growth of capital or are desirable in the light of
prevailing market or economic conditions. Any such debt securities so purchased
by the Fund may be either "investment grade" or speculative. Debt securities in
the lowest category of investment grade debt may have speculative
characteristics and changes in economic conditions or other circumstances are
more likely to lead to a weakened capacity to make principal and interest
payments than is the case with higher grade debt securities. Speculative debt
securities may include obligations of issuers that are in default or in
bankruptcy when Management believes that the prospect of capital appreciation
outweighs the risk of investment therein. Naturally, the risk attendant to the
investment in such securities, as well as other debt securities, can be
substantial inasmuch as the value thereof is based upon the ability of the
issuer to make all required payments of interest and principal. Generally, debt
securities which are believed to offer opportunities for growth of capital,
including securities referred to as "junk bonds," may be purchased by the Fund
when Management believes (a) interest rates will decline and, therefore, the
value of the debt securities will increase, or (b) the market value thereof is
likely to appreciate due to factors affecting specific issuers. The Fund does
not intend to purchase any debt securities which are not investment grade, if as
a result of such purchase, more than five percent of the value of the Fund's net
assets will be represented by such securities.
When Management believes that a temporary defensive position is desirable,
the Fund may invest in debt securities, including securities of the United
States Government and its instrumentalities, or retain cash or cash equivalents,
all without limitation. Temporary defensive positions may be desirable during
times of generally falling prices of equity securities or during times when
Management believes that falling prices will shortly occur. Debt securities and
cash equivalents may include short-term commercial paper, certificates of
deposit, time deposits and repurchase agreements. The Fund will not acquire time
deposits if (a) at the time
6
<PAGE> 7
of such acquisition more than 10% of the value of the Fund's net assets will be
invested in such time deposits, or (b) the time deposits cannot be liquidated
within seven days.
The Fund may invest up to 25% of the value of its total assets at the time
of such investment in securities of companies engaged in a particular industry
if, in the judgment of the Fund, securities of companies in that industry afford
better than average prospects for growth. Because the Fund is a diversified
investment company, at least 75% of the value of the Fund's total assets will be
represented by cash and cash items, Government securities and other securities
limited in respect to any one issuer to an amount not greater in value than 5%
of the value of the Fund's total assets and to not more than 10% of the
outstanding voting securities of any one issuer. The foregoing limitations will
be applied solely at the time of the purchase of a particular security.
WRITING COVERED CALL OPTIONS
The Fund may write covered call options without limitation. A call option
permits the holder thereof to purchase the securities of an issuer at a
predetermined price. A call option is considered to be "covered" if, at the time
the option is written, the Fund owns the securities (or securities convertible
into the securities without additional consideration) against which the call
option is written and will continue to own such securities during the time that
the Fund is obligated under the option. The Fund anticipates that most of the
options written by it will be for a duration of not more than nine months.
Through the receipt of the option premium, the Fund may mitigate the effect of a
price decline. Because the Fund must be prepared to deliver the securities which
are the subject of the call option at a predetermined price even if their value
has increased, the Fund will relinquish some ability to participate in price
increases in those securities. The Fund will not purchase call or put options
written by others.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements as a money market alternative
with respect to its otherwise uninvested cash. There is no limitation on the
amount of repurchase agreements which may be entered into by the Fund. In
connection with a repurchase agreement, the Fund will acquire a security and
simultaneously agree to resell it at a higher price. A repurchase agreement,
therefore, involves a loan by the Fund to the seller who agrees to pay the
resale price to the Fund, which loan is collateralized by the value of the
underlying security. Delays or losses could result if the other party to the
repurchase agreement defaults or becomes insolvent. All repurchase agreements
entered into by the Fund will be fully collateralized by securities issued by
the United States Government.
FOREIGN SECURITIES
The Fund may purchase securities issued by companies organized in foreign
countries, provided that, as a result of any such purchase, not more than 35% of
the value of the Fund's total assets will be represented by such securities. The
Fund has not determined those countries, if any, in which such companies may be
organized. Such countries may have either developed or emerging markets.
Although the Fund intends to invest in foreign companies located in nations
which it considers to have relatively stable governments, there is the
possibility of expropriation, nationalization or confiscatory taxation, taxation
of income earned in a foreign country and other foreign taxes, foreign exchange
controls (which may include suspension of the ability to transfer currency from
a country), default in foreign government securities, political or social
instability or diplomatic developments which could adversely affect investments
in securities of foreign issuers. In addition,
7
<PAGE> 8
in many countries there is less publicly available information about issuers
than is generally available with respect to domestic companies. In addition,
foreign companies are not generally subject to uniform accounting, auditing and
financial reporting standards, and auditing practices and requirements may not
be comparable to those applicable to domestic companies. In many foreign
countries, there is less government supervision and regulation of business and
industry practices, stock exchanges, brokers and listed companies than in the
United States. Foreign securities transactions may be subject to higher
brokerage costs than domestic securities transactions. In addition, the foreign
securities markets of many of the countries in which the Fund may invest may
also be smaller, less liquid, and subject to greater price volatility than those
in the United States. Transactions in foreign securities may involve greater
time from the trade date until settlement than for domestic securities
transactions and involve the risk of possible losses through holding of
securities by custodian and securities depositories in foreign countries.
Changes in foreign exchange rates will affect the value of those securities
which are denominated or quoted in currencies other than the U.S. dollar.
ILLIQUID SECURITIES
The Fund will not purchase any security which it believes is illiquid at
the time of its purchase. Some securities may, however, become illiquid after
their purchase by the Fund. Illiquid securities may be difficult to sell at an
acceptable price.
8
<PAGE> 9
MANAGEMENT'S DISCUSSION OF THE FUND'S PERFORMANCE
During the Fund's fiscal year ended January 31, 1998, the factors that
materially affected the Fund's performance were the under-performance of some of
the Fund's holdings in medium to small capitalization technology and sub-prime
lending companies.
COMPARISON OF A $10,000 INVESTMENT IN THE FUND TO
THE SAME INVESTMENT IN THE S&P 500 INDEX
PERFORMANCE GRAPH
<PAGE> 10
<TABLE>
<CAPTION>
AHGF TOTAL REDEEMABLE VALUE S&P 500 TOTAL REDEEMABLE VALUE
<S> <C> <C>
25-May-94 10000 10000
10000 10016
10000 10024
10000 10024
10000 10024
10000 10024
10000 10006
10000 10031
10000 10034
10000 10089
10000 10089
10000 10089
10000 10064
10000 10049
10000 10024
10000 10047
10000 10064
10000 10064
10000 10064
10000 10074
10000 10147
10100 10108
10100 10138
10100 10062
10100 10062
10100 10062
10100 9997
10100 9906
10100 9944
10100 9869
10100 9723
10100 9723
10100 9723
10100 9823
10100 9799
10100 9834
10100 9760
10100 9805
10100 9805
10100 9805
10100 9805
10100 9811
10100 9806
10120 9856
10140 9882
10140 9882
10140 9882
10160 9883
10160 9848
10160 9865
10180 9969
10220 9985
10220 9985
10220 9985
10200 10010
10160 9980
10140 9930
10200 9953
10480 9964
10480 9964
10480 9964
10480 9990
10600 9972
10640 9955
10660 9992
10720 10081
10720 10081
10720 10081
10720 10144
10720 10137
10720 10158
10680 10093
10700 10065
10700 10065
10700 10065
10720 10085
10740 10090
10780 10143
10740 10113
10780 10181
10780 10181
10780 10181
10760 10168
10740 10253
10720 10257
10680 10213
10700 10225
10700 10225
10700 10225
10680 10196
10800 10245
10900 10345
10900 10325
10960 10454
10960 10454
10960 10454
11000 10473
11020 10507
10960 10494
10960 10445
10940 10400
10940 10400
10940 10400
10940 10400
10980 10419
10980 10400
11020 10448
10960 10343
10960 10343
10960 10343
10960 10300
11060 10330
11080 10358
11180 10492
11200 10412
11200 10412
11200 10412
11180 10408
11200 10243
11200 10201
11200 10197
11220 10162
11220 10162
11220 10162
11180 10194
11260 10221
11420 10282
11380 10227
11400 10238
11400 10238
11400 10238
11360 10220
11260 10064
11220 10041
11160 10015
11200 10077
11200 10077
11200 10077
11240 10164
11320 10314
11340 10307
11380 10358
11420 10388
11420 10388
11420 10388
11440 10386
11420 10358
11460 10416
11440 10340
11420 10296
11420 10296
11420 10296
11380 10207
11360 10224
11400 10249
11440 10321
11500 10497
11500 10497
11500 10497
11440 10468
11440 10383
11600 10342
11600 10374
11580 10255
11580 10255
11580 10255
11560 10275
11560 10335
11560 10331
11540 10308
11560 10263
11560 10263
11560 10263
11520 10348
11520 10326
11520 10341
11500 10296
11540 10251
11540 10251
11540 10251
11600 10181
11600 9998
11600 9996
11600 9996
11600 10053
11600 10053
11600 10053
11580 10096
11620 10119
11560 10086
11540 9982
11560 10081
11560 10081
11560 10081
11560 10083
11560 10079
11560 10037
11560 9909
11560 9947
11560 9947
11560 9947
11560 10004
11540 10020
11520 10127
11520 10136
11522 10213
11522 10213
11522 10213
11522 10194
11522 10176
11522 10232
11489 10234
11590 10245
11590 10245
11590 10245
11590 10245
11590 10304
11556 10268
11522 10276
11624 10236
11624 10236
11624 10236
11624 10236
11624 10233
11624 10271
11624 10264
11590 10272
11590 10272
11590 10272
11658 10276
11590 10296
11658 10295
11692 10295
11726 10393
11726 10393
11726 10393
11726 10469
11726 10484
11726 10477
11692 10416
11692 10367
11692 10367
11692 10367
11760 10391
11726 10393
11726 10430
11726 10450
11929 10496
11929 10496
11929 10496
11963 10456
12099 10501
12099 10502
12200 10557
12268 10688
12268 10688
12268 10688
12302 10749
12302 10743
12268 10752
12268 10732
12234 10763
12234 10763
12234 10763
12234 10770
12166 10792
12132 10837
12200 10853
12166 10782
12166 10782
12166 10782
12166 10782
12132 10799
12099 10853
12132 10897
12132 10927
12132 10927
12132 10927
12099 10830
12132 10911
12065 10875
12099 10864
12099 10872
12099 10872
12099 10872
12065 10879
12065 10801
12031 10824
12065 10830
12099 10974
12099 10974
12099 10974
12132 10985
12132 11049
12166 11027
12200 11107
12200 11110
12200 11110
12200 11110
12166 11124
12200 11100
12200 11113
12234 11120
12302 11232
12302 11232
12302 11232
12336 11287
12370 11303
12268 11286
12268 11266
11963 11233
11963 11233
11963 11233
12065 11261
12166 11340
12166 11349
12268 11361
12268 11369
12268 11369
12268 11369
12336 11383
12302 11350
12268 11387
12234 11434
12234 11434
12234 11434
12234 11434
12166 11365
12166 11349
12099 11339
12132 11347
</TABLE>
<PAGE> 11
<TABLE>
<CAPTION>
AHGF TOTAL REDEEMABLE VALUE S&P 500 TOTAL REDEEMABLE VALUE
<S> <C> <C>
12166 11419
12166 11419
12166 11419
12166 11520
12234 11505
12166 11517
12234 11537
12302 11563
12302 11563
12302 11563
12302 11556
12370 11571
12505 11698
12505 11703
12437 11695
12437 11695
12437 11695
12505 11785
12641 11781
12607 11800
12607 11802
12607 11829
12607 11829
12607 11829
12573 11881
12573 11893
12539 11868
12404 11700
12404 11697
12404 11697
12404 11697
12471 11798
12471 11910
12471 11912
12505 11914
12336 11805
12336 11805
12336 11805
12336 11805
12234 11804
12404 12026
12437 12029
12437 12009
12437 12009
12437 12009
12471 12078
12437 12077
12404 12023
12404 12011
12437 11907
12437 11907
12437 11907
12471 11974
12573 12096
12471 12106
12539 12121
12573 12182
12573 12182
12573 12182
12675 12304
12607 12299
12675 12277
12844 12437
12878 12407
12878 12407
12878 12407
12742 12281
12675 12243
12607 12300
12776 12280
12776 12303
12776 12303
12776 12303
12810 12357
12810 12357
12946 12362
13047 12518
13386 12573
13386 12573
13386 12573
13386 12592
13352 12538
13624 12677
13793 12680
13759 12655
13759 12655
13759 12655
13759 12719
13556 12624
13183 12456
13319 12514
13285 12516
13285 12516
13285 12516
13793 12584
13759 12685
13861 12697
14064 12781
14064 12730
14064 12730
14064 12730
14064 12711
14132 12656
14132 12640
14437 12642
14572 12648
14572 12648
14572 12648
14369 12673
14471 12683
14674 12669
14877 12622
14810 12571
14810 12571
14810 12571
14742 12677
14810 12652
14742 12687
14708 12667
14742 12672
14742 12672
14742 12672
14742 12647
14844 12680
14844 12628
14776 12635
14674 12696
14674 12696
14674 12696
14640 12672
14606 12695
14640 12720
14708 12743
14708 12788
14708 12788
14708 12788
14708 12788
14674 12911
14776 12936
14810 12940
14945 12994
14945 12994
14945 12994
15047 13023
15013 13082
15115 13139
15081 13250
15081 13244
15081 13244
15081 13244
15115 13235
15182 13268
15318 13327
15284 13242
15149 13213
15149 13213
15149 13213
15013 13215
14979 13206
14844 13204
14945 13314
14945 13281
14945 13281
14945 13281
14776 13220
14708 13235
14708 13217
14708 13248
14776 13246
14776 13246
14776 13246
14539 13152
14572 13133
14674 13179
14742 13262
14776 13294
14776 13294
14776 13294
14674 13261
14674 13346
14539 13363
14539 13437
14403 13364
14403 13364
14403 13364
14267 13310
14437 13344
14335 13252
14200 13121
14200 13191
14200 13191
14200 13191
14166 13273
14064 13233
14166 13297
14234 13426
14200 13446
14200 13446
14200 13446
14267 13399
14234 13351
14234 13477
14471 13516
14437 13505
14437 13505
14437 13505
14471 13497
14403 13429
14301 13540
14234 13618
14301 13681
14301 13681
14301 13681
14267 13609
14234 13688
14200 13647
14200 13647
14234 13683
14234 13683
14234 13683
14200 13714
14234 13832
14471 13866
14539 13814
14674 13851
14674 13851
14674 13851
14708 14005
14674 14097
14742 14158
14776 14067
14776 14097
14776 14097
14776 14097
14877 14144
14674 14127
14606 14200
14335 14092
14267 14079
14267 14079
14267 14079
14132 13862
14439 13979
14344 13843
14533 13947
14627 13981
14627 13981
14627 13981
14627 13981
14627 14035
14533 14047
14439 14039
14439 14080
14439 14080
14439 14080
14439 14080
14627 14190
14627 14206
14627 14123
14627 14101
14627 14101
14627 14101
14627 14145
14627 13940
14533 13690
14439 13787
14722 13767
14816 13767
14816 13767
14816 13722
14722 13919
14627 13873
14722 13917
14722 13999
14816 13999
14816 13999
14816 14035
15005 14021
15005 14186
15005 14119
15099 14224
15099 14224
15099 14224
15288 14287
15571 14423
15665 14560
15571 14618
15665 14559
15665 14559
15665 14559
15665 14688
15760 14801
15665 14886
15760 15029
15665 15037
15665 15037
15665 15037
15665 15154
15571 15137
15571 15026
15760 14931
15854 14856
15854 14856
15854 14856
15854 14856
15571 14689
15665 14862
16043 15109
15949 15115
15949 15115
15949 15115
15854 14917
15760 14845
15854 14792
15760 14694
15760 14785
15760 14785
15760 14785
15760 14935
15854 15051
15760 14969
15854 15008
15571 14545
15571 14545
15571 14545
15760 14695
15665 14628
15665 14669
15760 14722
15760 14735
15760 14735
15760 14735
15760 14994
15760 14972
15665 14933
15571 14916
15665 14949
15665 14949
15665 14949
15477 14935
15382 15003
15382 14914
15477 14915
15571 14836
15571 14836
15571 14836
15571 15025
15571 15063
15571 15078
15665 15079
15665 15079
15665 15079
15665 15079
15382 14817
15477 14770
15571 14570
15477 14519
15477 14646
15477 14646
15477 14646
15477 14779
15571 14836
15477 14760
15760 14807
15760 14841
15760 14841
15760 14841
15949 14905
16137 14991
16420 14959
16515 15021
16420 15036
16420 15036
16420 15036
</TABLE>
<PAGE> 12
<TABLE>
<CAPTION>
AHGF TOTAL REDEEMABLE VALUE S&P 500 TOTAL REDEEMABLE VALUE
<S> <C> <C>
16326 15053
16326 15055
16232 15066
16232 14811
16232 14771
16232 14771
16232 14771
16137 14753
16043 14695
16043 14849
16043 14868
16232 15023
16232 15023
16232 15023
16326 15243
16420 15340
16515 15338
16609 15326
16703 15426
16703 15426
16703 15426
16703 15567
16609 15558
16609 15691
16609 15639
16703 15700
16703 15700
16703 15700
16703 15700
16609 15554
16326 15459
16420 15549
16515 15497
16515 15497
16515 15497
16326 15464
16420 15578
16515 15718
16326 15596
16137 15602
16137 15602
16137 15602
16043 15576
16137 15549
16232 15511
15854 15486
15665 15438
15665 15438
15665 15438
15665 15423
15477 15351
15382 15349
15194 15353
15099 15463
15099 15463
15099 15463
15099 15510
15099 15502
14910 15412
14722 15508
14910 15557
14910 15557
14910 15557
15005 15681
14910 15631
14910 15604
14910 15604
14627 15257
14627 15257
14627 15257
14533 15148
14533 15200
14344 15232
14155 14992
14061 15005
14061 15005
14061 15005
13872 14625
13684 14592
13872 14725
13967 14947
13778 14835
13778 14835
13778 14835
13684 14720
13495 14560
13306 14555
13495 14660
13589 14770
13589 14770
13589 14770
13495 14656
13495 14758
13495 14871
13684 15108
13872 15399
13872 15399
13872 15399
13872 15348
13872 15398
14061 15442
14155 15406
14250 15398
14250 15398
14250 15398
14250 15484
14061 15359
14061 15404
14061 15410
13967 15480
13967 15480
13967 15480
13967 15513
13967 15494
13967 15481
14061 15612
14155 15528
14155 15528
14155 15528
14533 15454
14627 15513
14722 15480
14722 15310
14627 15185
14627 15185
14627 15185
14627 15185
14533 15248
14722 15275
14439 15133
14722 15280
14722 15280
14722 15280
14816 15468
14722 15471
14722 15555
14910 15650
14910 15869
14910 15869
14910 15869
14816 15954
15005 15934
15005 15900
15194 15937
15382 16031
15382 16031
15382 16031
15194 16019
15288 15999
15288 16004
15571 16010
15571 16018
15571 16018
15571 16018
15477 16045
15382 16086
15194 16204
15099 16175
15382 16378
15382 16378
15382 16378
15288 16424
15288 16364
15571 16275
15665 16227
15760 16369
15760 16369
15760 16369
15760 16438
15665 16416
15571 16460
15477 16521
15477 16611
15477 16611
15477 16611
15288 16589
15288 16512
15477 16529
15665 16413
15665 16381
15665 16381
15665 16381
15571 16295
15382 16396
15477 16387
15665 16490
15571 16457
15571 16457
15571 16457
15382 16528
15477 16701
15854 16949
16043 17024
16043 17100
16043 17100
16043 17100
15854 17126
15854 17074
15854 17115
15949 17228
15571 17270
15571 17270
15571 17270
15571 17257
15382 17378
15382 17423
15477 17395
15665 17535
15665 17535
15665 17535
15665 17731
15477 17710
15571 17690
15571 17690
15571 17738
15571 17738
15571 17738
15760 17728
15760 17534
15760 17464
15760 17450
15571 17339
15571 17339
15571 17339
15949 17577
15665 17525
15477 17368
15382 17105
15194 17090
15194 17090
15194 17090
14722 16911
14910 17029
15099 17159
15005 17491
14910 17567
14910 17567
14910 17567
13635 17521
13806 17618
13806 17618
14107 17731
14407 17762
14407 17762
14407 17762
14178 17693
14289 17388
14289 17388
14334 17301
14505 17560
14505 17560
14505 17560
14521 17551
14636 17683
14684 17575
14748 17727
14678 17836
14678 17836
14678 17836
14739 17838
15119 18057
14983 18019
14874 18079
14680 18231
14680 18231
14680 18231
14935 18244
14805 18385
15073 18469
14965 18266
14894 18101
14913 18101
14850 18101
14657 17972
14681 17973
14657 18152
14681 18429
14520 18478
14520 18478
14520 18478
14705 18493
14596 18554
14430 18299
14435 18349
14483 18570
14483 18570
14483 18570
14475 18474
14529 18572
14593 18887
14538 19102
14454 19024
14454 19024
14454 19024
14454 19024
14387 19211
14419 19124
14234 18897
14327 18873
14327 18873
14327 18873
14472 19073
14453 19115
14387 18969
14210 18722
14188 18623
14188 18623
14188 18623
14288 18729
14312 18629
14417 18895
14258 18817
14345 18968
14345 18968
14345 18968
14252 19173
14236 19118
14259 18956
14044 18613
14271 18698
14271 18698
14271 18698
14148 18759
14038 18617
13695 18525
13703 18453
13771 18487
13771 18487
13771 18487
13809 18648
13866 18607
14057 18645
14057 18253
14057 18253
14057 18253
14057 18253
13394 17858
13310 17917
13114 17696
13236 17701
13331 17879
13331 17879
13331 17879
13594 17979
13716 18079
13525 17950
13431 17897
13246 17410
13246 17410
13246 17410
13106 17553
13175 17812
13153 18022
13026 17981
12949 18089
12949 18089
12949 18089
12739 17948
12717 18284
12716 18262
12687 18204
12506 18067
12506 18067
12506 18067
12480 18248
12614 18747
12628 18923
12703 18859
12818 19201
12818 19201
12818 19201
</TABLE>
<PAGE> 13
<TABLE>
<CAPTION>
AHGF TOTAL REDEEMABLE VALUE S&P 500 TOTAL REDEEMABLE VALUE
<S> <C> <C>
13202 19610
13135 19553
13107 19269
13160 19379
13224 19491
13224 19491
13224 19491
12992 19796
12839 19692
12914 19764
12861 19908
12700 19625
12700 19625
12700 19625
12670 19709
12857 19909
12989 19856
12888 19769
13204 20039
13204 20039
13204 20039
13204 20039
13410 20102
13541 20047
13495 19975
13610 20075
13610 20075
13610 20075
13627 20030
13467 20010
13472 19887
13603 19968
13755 20315
13755 20315
13755 20315
13868 20431
13672 20488
13813 20593
13837 20927
14053 21159
14053 21159
14053 21159
14146 21175
14255 21187
14255 21069
14275 21282
14489 21299
14489 21299
14489 21299
13963 20823
14114 21243
14002 21070
13909 20948
13934 21035
13934 21035
13934 21035
14028 20983
14135 21126
14183 21437
14386 21743
14386 21743
14386 21743
14386 21743
15015 21632
15119 21792
15171 21527
15203 21676
15456 21747
15456 21747
15456 21747
15790 21788
15985 21963
15912 22221
15765 22104
15416 21717
15416 21717
15416 21717
15266 21661
15631 22160
15581 22222
15678 22310
15732 22275
15732 22275
15732 22275
15868 22220
16047 22361
16357 22603
16247 22653
16336 22484
16336 22484
16336 22484
16526 22560
16636 22609
16792 22800
16965 22585
16598 22166
16598 22166
16598 22166
16461 22254
16232 22006
16125 21904
16228 21970
15959 21402
15959 21402
15959 21402
16116 21682
16390 22004
16602 22324
16486 21985
16395 21949
16395 21949
16395 21949
16411 21869
16250 21699
16158 21719
16086 21483
16024 21384
16024 21384
16024 21384
16024 21384
16169 22053
16260 22065
16289 22138
16246 22095
16246 22095
16246 22095
16196 22148
16286 22206
16097 21859
16027 21713
15752 21983
15752 21983
15752 21983
15533 21889
15471 22505
15260 22443
15303 22546
15330 22623
15330 22623
15330 22623
15508 22741
15464 22658
15383 22481
15284 22325
15375 22506
15375 22506
15375 22506
15468 22700
15378 22555
15569 22751
15517 22872
15548 22982
15548 22982
15548 22982
15785 23164
15877 23414
16182 23199
16128 23123
16070 23037
16070 23037
16070 23037
16067 23064
15903 23116
15803 23008
15413 22759
15154 22495
15154 22495
15154 22495
15433 22768
15468 23165
15254 23076
14800 22652
14707 22437
14707 22437
14707 22437
13702 20896
14207 21965
14202 21906
13942 21541
14038 21802
14038 21802
14038 21802
14517 22384
14420 22426
14463 22477
14388 22366
14197 22120
14197 22120
14197 22120
14165 21970
14041 22033
13817 21613
13877 21870
13899 22150
13899 22150
13899 22150
13971 22577
13891 22389
13916 22544
13946 22888
13962 22987
13962 22987
13962 22987
13814 22595
13778 22697
13810 22721
13810 22721
13817 22811
13817 22811
13817 22811
13824 23274
13731 23201
13669 23329
13643 23242
13649 23497
13649 23497
13649 23497
13639 23465
13632 23308
13593 23166
13568 22817
13581 22780
13581 22780
13581 22780
13567 23020
13576 23131
13600 23073
13733 22829
13783 22626
13783 22626
13783 22626
13246 22792
13298 22444
13797 22291
13797 22291
13798 22381
13798 22381
13798 22381
13904 22792
13879 23212
13900 23203
13900 23203
13902 23314
13902 23314
13902 23314
13846 23363
13836 23114
13823 23057
13703 22868
13684 22190
13684 22190
13684 22190
13634 22465
13705 22775
13791 22915
13763 22744
13722 23002
13722 23002
13722 23002
13722 23002
13683 23411
13882 23226
13811 23040
13795 22910
13795 22910
13795 22910
13679 22894
13767 23183
13955 23391
13932 23584
13944 23460
31-Jan-98 13944 23460
13944 23460
14039 23962
14099 24077
14051 24102
13995 24024
14050 24242
14050 24242
14050 24242
14069 24202
14112 24401
14127 24430
14101 24531
14109 24435
14109 24435
14109 24435
14109 24435
14037 24500
14084 24729
14046 24639
14103 24781
14103 24781
14103 24781
14113 24876
14035 24694
14081 24993
14170 25135
14166 25152
14166 25152
14166 25152
14051 25113
14002 25217
13905 25110
13842 24819
13896 25316
13896 25316
13896 25316
13823 25235
13787 25522
14067 25628
14181 25667
14263 25635
14263 25635
14263 25635
14276 25892
14299 25920
14371 26043
14397 26145
14439 26372
14439 26372
14439 26372
14468 26285
14484 26528
14468 26439
14470 26412
14406 26288
14406 26288
14406 26288
14371 26243
31-Mar-98 14438 26440
14641 26595
14868 26881
14995 26946
14995 26946
14995 26946
14976 26915
14738 26638
14773 26449
14779 26666
14779 26666
14779 26666
14779 26666
14740 26644
14753 26790
14882 26876
14679 26609
14701 26958
14701 26958
14701 26958
14814 26981
14853 27053
14910 27148
14852 26885
14998 26604
14998 26604
14998 26604
14804 26092
14904 26060
15054 26293
15112 26706
15173 26928
15173 26928
15173 26928
15294 26954
15338 26797
15278 26549
15365 26315
15517 26627
15517 26627
15517 26627
15461 26604
15468 26826
15821 26904
15794 26869
15579 26663
15579 26663
15579 26663
15485 26596
15568 26700
</TABLE>
<PAGE> 14
Past performance is not predictive of future performance.
INVESTMENT RESTRICTIONS
Certain of the Fund's policies, including restrictions previously discussed
in this Prospectus, are considered to be fundamental and, therefore, cannot be
changed without shareholder approval. The following policies and restrictions
are fundamental. All other policies and restrictions referred to in this
Prospectus can be changed without shareholder approval.
(1) At least 75% of the value of the Fund's total assets will be
represented by cash and cash items, Government securities, and other securities
limited in respect to any one issuer to an amount not greater in
9
<PAGE> 15
value than 5% of the value of the Fund's total assets and to not more than 10%
of the outstanding voting securities of any one issuer.
(2) The Fund will not invest 25% or more of the value of its total assets
in securities of companies in any one industry.
(3) The Fund will not loan money to other persons, except that the Fund may
(a) enter into repurchase agreements, (b) invest in debentures, bonds or similar
governmental or corporate obligations of types commonly distributed publicly or
privately to financial institutions and (c) purchase debt securities which are
convertible into equity securities of an issuer without regard to whether such
debt securities are types commonly distributed publicly or privately to
financial institutions.
(4) The Fund will not borrow money except from banks and only for temporary
or emergency purposes, but not in amounts exceeding 33 1/3% of the Fund's net
assets. Any borrowings in excess of that amount will be reduced within three
business days to comply with such limitation. The Fund's net asset value may be
subject to greater fluctuation during any time that the Fund has borrowed money.
The percentage limitations contained in the restrictions described above
are all applied solely at the time of any transaction on the basis of values or
amounts determined at that time. Such restrictions do not apply if a percentage
limitation were exceeded only as a result of changes in values or amounts not
resulting from a subsequent transaction subject to the restriction.
MANAGEMENT
The business of the Fund is managed under the direction of its Board of
Directors. The Fund has retained AHMC, 1370 Avenue of the Americas, New York,
New York 10019 to provide the Fund with investment research advice and to
continuously furnish an investment program for the Fund's portfolio. AHMC
recommends securities to be purchased and sold by the Fund and the portion of
the Fund's assets which is to be held uninvested. AHMC advises and assists the
officers of the Fund in carrying out policy decisions of the Fund's Board of
Directors. The role of AHMC is advisory only. All investment decisions are made
by the Fund. AHMC is also the investment advisor to The American Heritage Fund,
Inc. ("AHF"), an open-end management investment company having the objective of
obtaining maximum capital growth.
Heiko H. Thieme is the Chief Executive Officer of the Fund and AHMC and, in
such capacities, has been primarily responsible for the day-to-day management of
the Fund's portfolio since the Fund's inception. Since February 1990, Mr. Thieme
has been the Chief Executive Officer of The American Heritage Fund, Inc. Prior
to 1994, Mr. Thieme was a Consultant/Strategist to Deutsche Bank A.G. and
previously had been the Executive Vice President in charge of U.S. equity of its
wholly-owned subsidiary, Deutsche Bank Capital Corp. Mr. Thieme began his career
at the British brokerage firm of Wood & McKenzie of Edinburgh and London. In
1976 Mr. Thieme joined White Weld & Co. in London as Vice President in charge of
marketing for Germany and Austria. Mr. Thieme writes a weekly column for one of
the major German newspapers, Frankfurter Allgemeine Zeitung, and appears
frequently on German television as well as on numerous American T.V. stations
with commentaries on the U.S. markets and global issues. In May 1989, Mr. Thieme
was chosen as "Best Investment Advisor" of 1988 in West Germany at the
International Investment Congress held in Frankfurt. Further, Mr. Thieme
regularly makes presentations to institutional investors in Europe, Asia, the
United States and Canada. Mr. Thieme is known worldwide for his undaunted
optimism and
10
<PAGE> 16
frequently contrarian views and has been the author of "The Viewpoint" for more
than 17 years. Mr. Thieme is the beneficial owner of 90% of the outstanding
capital stock of AHMC.
AHMC is compensated for the investment advisory services it renders by the
payment of a fee at the annual rate of one and one-quarter percent (1.25%) of
the first $100 million of the value of average daily net assets of the Fund and
one percent (1%) of the value of any additional net assets, payable monthly.
Such fee is higher than the fee paid by most other management investment
companies to their investment advisors.
The Fund anticipates that a substantial portion of its portfolio
transactions will be allocated to Thieme Securities, Inc. ("TSI"). The Fund may
also allocate portfolio transactions to brokers who provide research or
recommendations for the benefit of the Fund or who are instrumental in sales of
shares of the Fund. Mr. Thieme is the Chief Executive Officer and sole
shareholder of TSI.
Mr. Thieme receives compensation from TSI in connection with portfolio
transactions allocated to it by the Fund. Reference is made to the Fund's
Statement of Additional Information for a more complete description of the
Fund's policies with respect to portfolio transactions.
Each member of the Board of Directors of the Fund is also a director of
AHF. Mr. Thieme is the Chief Executive Officer of both AHF and two foreign
investment companies (the "Foreign Companies"), whose investment objectives are
also to seek growth of capital, and the investment advisor of the Foreign
Companies.
From time to time, the Fund, AHF, the Foreign Companies and other clients
of affiliated persons of AHMC may hold securities issued by the same company.
When the Fund and such other investors are engaged in the purchase or sale of
the same security, the prices and amounts will be allocated in a manner
considered by Management to be fair to each of them.
DETERMINATION OF NET ASSET VALUE
The Fund's net asset value per share for the purpose of pricing purchase
and redemption orders is determined as of the close of business of the New York
Stock Exchange on each day such Exchange is open for trading. The Fund's net
asset value will not be determined on New Year's Day, President's Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas,
on which days the New York Stock Exchange is not presently open for trading. In
the event, however, that the New York Stock Exchange is open for trading on any
of such days, the Fund's net asset value will be determined on such days. The
net asset value per share is computed by dividing the value of the net assets of
the Fund (i.e., the value of total assets less liabilities) by the total number
of the Fund's shares outstanding. In calculating net asset value, all portfolio
securities will be valued at market value when there is a reliable quotation
available for the securities and otherwise as the Board of Directors in good
faith determines.
HOW TO BECOME AN INVESTOR IN THE FUND
An investor may purchase shares of the Fund by submitting a completed
application with a check made payable to American Heritage Growth Fund, Inc. and
mailing it to American Heritage Growth Fund, Inc. Location 0637, Cincinnati,
Ohio 45264-0637. All Applications and checks which are sent by courier should be
sent to American Heritage Growth Fund, Inc., c/o Star Bank, N.A., 425 Walnut
Street, Mutual Fund
11
<PAGE> 17
Custody Department, Cincinnati, Ohio 45202. An application is included in this
Prospectus. All investments are made at the net asset value next computed after
receipt of an order accompanied by payment without the imposition of any sales
charge. The Fund will not issue share certificates. Each purchase of shares will
be confirmed by the Fund in writing to the purchaser.
Initial investments must be at least $1,000. Subsequent investments may be
made in amounts of $500 or more. The Fund may not involuntarily redeem a
shareholder's account if it falls below the minimum initial investment. An open
account is automatically created for each new investor so that additional
investments may be made at any time without completing a new application. The
above-stated minimums are applicable to all accounts although the minimums may
be waived for persons purchasing in a group if the total payment received from
the group exceeds the stated minimum. In addition, shareholders may open
additional accounts (e.g. custodian accounts, IRA accounts, and Trusts) with a
minimum of $500.
Investors may, if they so desire, purchase shares of the Fund through
certain registered broker-dealers. The Fund imposes no sales load or service
charge, but such broker-dealers may make a charge to investors for their
services. The charge and services may vary in amount among broker-dealers, some
of which may impose higher initial or subsequent investment requirements than
those established by the Fund.
HOW TO REDEEM SHARES
ALL REQUESTS FOR REDEMPTION OF SHARES MUST BE SIGNED BY ALL REGISTERED OWNERS
EXACTLY AS REGISTERED, INCLUDING FIDUCIARY TITLES, IF ANY, WITH SIGNATURES
GUARANTEED BY A MEMBER OF A NATIONAL SECURITIES EXCHANGE OR A UNITED STATES
COMMERCIAL BANK OR A FOREIGN BANK HAVING A NEW YORK CITY CORRESPONDENT.
Any shareholder may require the Fund to redeem his shares by making a
written request directly to the Fund's Transfer Agent, American Data Services,
Inc., 150 Motor Parkway, Suite 109, Hauppauge, New York 11788. Redemptions may
be made by telephone upon the request of certain financial institutions who are
holders of record of shares issued by the Fund, within the sole discretion of
the Fund. The Fund has instructed its Transfer Agent to confirm the authenticity
of any such request for redemption by telecopier and telephone. Proceeds of
redemptions made by telephone will be sent only to the respective financial
institution making the request. In the event that a telephone redemption which
is honored by the Fund is unauthorized or fraudulent, the Fund could sustain
losses.
The redemption price will be the net asset value next determined by the
Fund following receipt of the request. There is no redemption charge imposed by
the Fund.
The value of shareholder's shares on redemption may be more or less than
the shareholder's cost depending upon the net asset value at the time.
Payment for shares redeemed will normally be made within seven days after
receipt of a written request duly executed. Redemption proceeds will be mailed
upon clearance of the purchaser's check, which may take fifteen days or more.
Investors who anticipate that they will redeem their shares prior to the
expiration of such period, should pay for their shares by means of Federal Funds
or bank wire transfer. The determination of the net asset value of the Fund's
shares may be suspended and the right of redemption may be suspended or the
payment date postponed when: (i) trading on the New York Stock Exchange is
restricted as determined by
12
<PAGE> 18
the Securities and Exchange Commission or such Exchange is closed for other than
customary weekend and holiday closings; (ii) when an emergency exists, as
determined by the Securities and Exchange Commission, as a result of which
disposal by the Fund of securities owned by it is not reasonably practicable, or
it is not reasonably practicable for the Fund fairly to determine the value of
its net assets; or (iii) when the Securities and Exchange Commission by Order so
permits for the protection of the shareholders of the Fund.
DISTRIBUTION OF INCOME DIVIDENDS AND REALIZED CAPITAL GAINS
Dividend income will be incidental to the investment objective of growth of
capital. The Fund will, at the end of each fiscal year, consider the declaration
of a cash dividend from net investment income, if earned, and the distribution
of net capital gains, if any, realized on investments. The Fund intends to
distribute to its shareholders, at least annually, substantially all of its net
investment income and realized capital gains.
At the time a shareholder applies to purchase Fund shares, he automatically
gives written authority to the Fund to receive as the shareholder's agent,
income dividends and capital gains distributions, if any, and to cause them to
be reinvested for his account in additional Fund shares at net asset value.
However, a shareholder may, either at the time of purchase or at a later time,
request in writing to the Fund that his income dividends and capital gains
distributions, if any, be paid to him by check rather than reinvested in Fund
shares. A shareholder who requests in writing that his dividends and
distributions be paid to him by check may, at any time prior to a record date,
elect to have subsequent dividends and distributions reinvested in Fund shares
at net asset value.
The Fund intends to qualify for treatment under Subchapter M of the
Internal Revenue Code. In such case, the Fund will distribute any of its net
income and gains to shareholders and shareholders may be proportionately liable
for taxes on any income and gains of the Fund even though such income and gains
may be realized before a shareholder's investment in the Fund. Shareholders not
subject to taxes on their income will not be required to pay tax on any amounts
distributed to them. Any distribution of net income or short-term capital gains
will be taxed as dividends and any distribution of long-term capital gains will
be taxed as long-term capital gains. The Fund will inform shareholders of the
amount and nature of any such income or gains.
TOTAL RETURN
From time to time the Fund may advertise total return. Total return is
based on historical results and is not intended to predict future performance.
Total return is the change in value of an investment in the Fund over a
given period of time, assuming reinvestment of any dividends and capital gains
distributions. Average annual return is a hypothetical rate of return that, if
achieved annually, would produce a cumulative total return if performance had
been constant over the entire period of time. The Fund also may advertise a
return which is calculated in a different manner (a "non-standardized
quotation"). A non-standardized quotation of return measures the change in value
of a hypothetical account between the beginning and end of a period, assuming no
activity in the account other than reinvestment of dividends and capital gains
distributions. In the event the Fund incurs any non-recurring charges, the
reported total return for a period during which such charges were incurred would
be higher than it would otherwise be if non-recurring charges were reflected.
13
<PAGE> 19
SHAREHOLDER SERVICES
The Fund offers the following shareholder services. For further details
about such services write to or call the Fund.
EXCHANGE PRIVILEGE
A shareholder of the Fund has the privilege of exchanging shares of the
Fund for shares of The American Heritage Fund, Inc. ("AHF") by written notice to
the Fund's Transfer Agent subject to the following:
- Shares of AHF must be eligible for sale in the state of residence of
the shareholder.
- Shareholders may only exchange between accounts that are registered in
the same name, address, and have the same taxpayer identification
number.
- A shareholder must have received a current Prospectus of AHF before
the exchange.
- Both the Fund and AHF reserve the right to temporarily or permanently
terminate the exchange privilege.
Exchanges may have tax consequences. Accordingly, you may wish to consult
with your tax advisor before making any exchange.
AUTOMATIC WITHDRAWAL PLAN
With an Automatic Withdrawal Plan, a shareholder can arrange for automatic
distributions to be made monthly or quarterly in amounts not less than $1,000.
An Automatic Withdrawal Plan may neither be opened nor maintained by a
shareholder holding shares of the Fund having a total net asset value of less
than $50,000.
IRA PLANS
A prototype individual retirement account is available. Certain charges are
imposed by Star Bank, N.A. and American Data Services, Inc. and shareholders
should carefully review all documents provided in connection with such plan or
account.
ADDITIONAL FACTS
ORGANIZATION
The Fund was organized on February 14, 1994 under the laws of the State of
New York.
CUSTODIAN
Star Bank, N.A. 425 Walnut Street, Cincinnati, Ohio 45202 is the Custodian
of the portfolio securities and monies of the Fund. The Custodian performs no
managerial or policy-making functions for the Fund.
14
<PAGE> 20
CAPITALIZATION
The authorized capital stock of the Fund consists of 250,000,000 shares of
capital stock, $.001 par value per share. Each share has equal voting, dividend
and liquidation rights.
TRANSFER AGENT
American Data Services, Inc. ("ADS") 150 Motor Parkway, Suite 109,
Hauppauge, New York 11788 is the Fund's Transfer Agent.
ADMINISTRATIVE SERVICES
The Fund has entered into an agreement with ADS whereby ADS maintains
certain books, records and other documents that the Fund is required to keep and
calculates the Fund's daily net asset value. The Fund has agreed to pay ADS a
monthly fee ranging from 1/12th of .1% to 1/12th of .009% of the Fund's monthly
net assets, depending on the amount of such assets.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be made by writing to American Data Services,
Inc. at 150 Motor Parkway, Suite 109, Hauppauge, New York 11788.
15
<PAGE> 21
AMERICAN HERITAGE GROWTH FUND, INC.
- --------------------------------------------------------------------------------
Mail to: American Heritage Growth Fund, Inc., Location 0637, Cincinnati, Ohio
45264-0637
(DO NOT USE THIS FORM FOR IRA PLANS. Please request separate forms)
================================================================================
Complete only the applicable sections which will tell us how your account should
be registered.
<TABLE>
<S> <C> <C>
ACCOUNT [ ] Individual
REGISTRATION
------------------------------------------------------
First Name Middle
Name Last Name
[ ] Joint Tenant
------------------------------------------------------
First Name Middle
Name Last Name
[ ] Gifts to Minors
-------------------------- As Custodian For
------------------------
Name of Custodian (only 1 permitted) Name
of Minor (only 1 permitted)
UNDER THE ------------------ UNIFORM GIFT TO MINORS
State
[ ] Corporations, ------------------------------------------------------
Trusts & Name of corporation or partnership. If a trust,
Others include the name(s) of trustees in which account will
be registered and the date of the trust investment. An
account for a pension or profit sharing plan or trust
may be registered in the name of the plan or trust
itself.
- --------------------------------------------------------------------------------------------
ADDRESS
------------------------------------------------------
Street
( )
------------------------------------------------------
City Home Phone
Number
( )
------------------------------------------------------
State Zip Code Business
Phone Number
- --------------------------------------------------------------------------------------------
INVESTMENT $ (Minimum initial $1,000.--Subsequent Investments of
--------------------- $500 or more.) Make checks payable to American
Heritage Growth Fund, Inc. Application is not needed
for subsequent investments.
- --------------------------------------------------------------------------------------------
DISTRIBUTIONS Reinvest all income and capital gain distributions in additional shares of the
Fund unless this box is checked.
[ ] Pay dividends and capital gain distributions in cash. If any dividend or
capital gain distribution check addressed and sent to (me)(us) is returned to
you, you hereby are authorized to invest the proceeds of that check in Fund
shares at the net asset value next determined after receipt by you of the
returned check. In such event (I)(we) understand and agree that all subsequent
dividend and capital gain distributions automatically will be reinvested in
Fund shares unless and until (I)(we) has signed and filed with you a new
request to receive dividends and capital gain distributions in cash.
- --------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 22
TAX IDENTIFICATION CERTIFICATION
Because of important changes made to the Internal Revenue Code in 1983, we
must be certain that we have a record of your correct Social Security or
other Taxpayer Identification Number. If you have not certified that you
have provided us with the correct number, your account will be subject to
special Federal income tax withholding of 20% of dividends and other
payments. To avoid this, please fill in your Social Security or Taxpayer
Identification Number.
/ / / / / / / / / /
--------------------------------------------------------
Social Security or Taxpayer Identification Number
Citizenship--If other than U.S.A.
If appropriate, check one of the following boxes:
[ ] I have been notified by the IRS that I am subject to backup withholding
for failure to report all interest or dividends.
[ ] I do not have a Social Security Number or Taxpayer Identification
Number, but I have applied for or intend to apply for one. I understand
that if I do not provide this number within 60 days, the required 20%
withholding will begin.
[ ] I am exempt because I am a Non-Resident Alien (not a U.S. citizen or
U.S. resident), a foreign corporation, partnership, estate or trust,
and, as a result, I am not required to submit a number.
[ ] I am an exempt recipient (see explanation below)
If you are an exempt recipient, you must certify your Tax Identification
Number as well as your exempt status to prevent withholding. A partial
listing of exempt recipients follows. For further information, see Internal
Revenue Code Sec. 3452 or consult you tax advisor.
<TABLE>
<S> <C>
- Retirement Plans - Common Trust Funds
- Corporations - Financial Institutions
- Colleges, Churches, Charitable Organizations - Registered Securities Dealers
- Agents, Fiduciaries, Middlemen
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SIGNATURE I understand and agree that:
(1) This application is subject to your acceptance or
rejection.
(2) All shares will be purchased at the net asset value next
determined after receipt and acceptance.
(3) The Fund has the right to redeem shares held in my
account to reimburse the Fund for any loss it has sustained
if my check for the purchase of or subscription for the
Fund shares is dishonored, regardless of whether the
undersigned was already an existing shareholder at the
time of such purchase or subscription.
(4) Under penalties of perjury, I certify that the
information I have provided in this application under the
caption TAX IDENTIFICATION CERTIFICATION is true,
correct, and complete.
I acknowledge receipt of your Prospectus and I understand
that all of its terms and provisions are incorporated herein
by reference.
</TABLE>
X
- --------------------------------------------------------------------------------
Signature of Individual and Joint Tenant or Custodian, Corporate Officer or
Trustee.
- ------------------------------------------------------------------
------------------------------------------------------------------------
Title of Corporate Officer or Trustee Date
WHERE DID YOU FIRST LEARN ABOUT THE AMERICAN HERITAGE GROWTH FUND?
- -------------------------------------
- --------------------------------------------------------------------------------
598
<PAGE> 23
AMERICAN HERITAGE GROWTH FUND, INC.
A NO-LOAD MUTUAL FUND
1370 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(212) 397-3900
(800) 828-5050
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information is not a prospectus and
should be read in conjunction with the Fund's Prospectus dated June 1, 1998,
1998. A copy of the Fund's Prospectus may be obtained from the Fund without
charge at the address set forth above.
June 1, 1998
B-1
<PAGE> 24
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
Brokerage Allocation and Other Practices B-3
Purchase of Certain Debt Securities B-4
Investment Restrictions B-4
Management B-5
Control Persons and Principal Holders of
Securities B-7
Investment Advisory and Other Services B-7
Total Return B-8
Custodian B-8
Independent Accountants B-8
Transfer Agent B-8
Financial Statements B-8
</TABLE>
B-2
<PAGE> 25
BROKERAGE ALLOCATIONS AND OTHER PRACTICES
American Heritage Management Corporation ("AHMC") places orders with
brokers and dealers for the purchase and sale of securities for the Fund's
portfolio. In performing this service, AHMC is required to place orders with the
primary objective of obtaining the most favorable price and a reasonable
execution for the Fund. Normally, over-the-counter transactions will be executed
on a principal basis with a broker-dealer who makes a market in or is otherwise
a traditional source of the security traded except in those cases in which the
Fund can obtain a better price or execution on an agency basis. Transactions
executed on an agency basis involve the payment of a brokerage commission.
In selecting brokers and dealers to execute the Fund's portfolio
transactions, AHMC may consider research, statistical and quotation services
received by the Fund or AHMC from such other brokers. If such information is
received and if it is, in fact, useful to AHMC, the information may tend to
reduce its costs of providing investment advice to the Fund.
Section 28(e) of the Securities Exchange Act of 1934 ("Section 28(e)
permits an investment advisor, under certain circumstances, to cause an account
to pay a broker or dealer which supplies brokerage and research services a
commission for effecting a securities transaction in excess of the amount of the
commission another broker or dealer would have charged for effecting the
transaction. Brokerage and research services include (a) furnishing advice as to
the value of securities and the availability of securities or purchasers or
sellers of securities, (b) furnishing analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy and the
performance of accounts, and (c) effecting securities transactions and
performing functions incidental thereto, such as clearance, settlement and
custody.
AHMC may cause the Fund to incur brokerage commissions in an amount
higher than the lowest available rate in return for such services. Research
services so received by AHMC may be used by AHMC for the benefit of the Fund or
any other client of AHMC. AHMC is of the opinion that the continued receipt of
supplemental investment research services from broker-dealers will be essential
to its provision of portfolio management services to the Fund. AHMC has
represented that such commissions will not be paid by the Fund unless (a) AHMC
determines in good faith that the amount is reasonable in relation to the
services in terms of the particular transaction, (b) such payment is made in
compliance with Section 28(e) and other applicable state and federal laws, and
(c) in the opinion of AHMC, the total commissions paid by the Fund are
reasonable in relation to the benefits to the Fund over the long term.
It is anticipated that a substantial portion of the Fund's portfolio
transactions will be allocated to Thieme Securities, Inc. ("TSI"). Heiko H.
Thieme is the Chief Executive Officer and sole shareholder of TSI. Except for
executing portfolio transactions, TSI is not in any other respect associated
with the Fund or in any way responsible for any investment advice or other
service provided to the Fund by Mr. Thieme personally or AHMC. See
"Management" and "Investment Advisory and Other Services."
B-3
<PAGE> 26
During the fiscal year ended January 31, 1998, the Fund paid an
aggregate of approximately $21,670 in brokerage commissions of which
approximately $20,270 was paid to TSI, which represented approximately 94%
pf the total brokerage commissions paid by the Fund during such year. During the
same year, approximately 95% of the Fund's aggregate dollar transactions
involving the payment of brokerage commissions was effected through TSI.
PURCHASE OF CERTAIN DEBT SECURITIES
The Fund may purchase high yield debt securities which are not
investment grade, including securities referred to as "junk bonds" if as a
result of such purchase, no more than 5% of the value of the Fund's net assets
will be represented by such securities.
An economic downturn or increase in interest rates is likely to have
an adverse effect on the high yield securities market. The widespread expansion
of government, consumer and corporate debt within the United States economy has
made the corporate sector, especially cyclically sensitive industries, more
vulnerable to economic downturns or increased interest rates. The prices of high
yield securities have been found to be less sensitive to interest rate changes
than are those of higher rated investments, but more sensitive to adverse
economic changes or individual corporate developments. During an economic
downturn or substantial period of rising interest rates, highly leveraged
issuers may experience financial stress which would adversely affect the ability
to service their principal and interest payment obligations, to meet projected
business goals, and to obtain additional financing. In periods of economic
uncertainty and change, increased volatility of market prices of high yield
securities can be expected. To the extent that there is no established retail
secondary market, there may be thin trading of high yield securities. In the
absence of readily available market quotations, the valuation of high yield
securities held by the Fund will be determined by the Fund's Board of Directors.
The fulfillment of such responsibility may become difficult and judgment will
play a greater role in valuation because there may be less reliable, objective
data available.
INVESTMENT RESTRICTIONS
In addition to the investment restrictions described in the Fund's
Prospectus, the Fund operates under the following fundamental investment
policies and restrictions which cannot be changed or eliminated without the
approval of the lesser of (a) 67% or more of the voting securities of the Fund
present at a meeting if the holders of more than 50% of the outstanding voting
securities of the Fund are present or represented by proxy, or (b) more than 50%
of the outstanding voting securities of the Fund. These policies and
restrictions provide, in part, that the Fund may not:
(1) Issue any of its securities (a) for services, or (b) for property
other than cash or securities (including securities of which the Fund is the
issuer), except as a dividend or distribution to its security holders or in
connection with a reorganization;
B-4
<PAGE> 27
(2) Invest in companies for the purpose of exercising control or
management;
(3) Purchase or sell commodities or commodity contracts, including
futures contracts;
(4) Invest in oil, gas and other mineral leases, but the Fund shall
not be prohibited from investing in marketable securities of companies investing
in such leases;
(5) Invest in real estate or real estate mortgage loans, but the Fund
shall not be prohibited from investing in marketable securities of companies
engaged in real estate activities or investments other than real estate limited
partnerships.
(6) Make short sales;
(7) Underwrite securities issued by others; or
(8) Issue bonds or other class of securities preferred over shares of
the Fund in respect to the Fund's assets or earnings, except that the Fund may
establish additional series of shares;
The following investment limitations are not fundamental and may be
changed without shareholder approval:
(1) The Fund may not purchase warrants.
(2) The Fund will not purchase securities of other investment
companies unless purchased without the payment of any fee or charge other than
regular brokerage commissions. Included as part of the foregoing restriction,
the Fund will not purchase securities of any other open-end investment company
other than for the purpose of seeking a return on the Fund's uninvested cash
balance.
(3) The Fund will not purchase securities (other than securities
issued or guaranteed by domestic or foreign governments or political
subdivisions thereof) if, as a result of such purchase, more than 5% of the
value of the Fund's total assets would be represented by issuers that, including
predecessors, have then been in continuous operation for less than three years.
MANAGEMENT
The following table sets forth certain information with respect to
each member of the Fund's Board of Directors and each officer of the Fund. The
Fund does not have any advisory board.
B-5
<PAGE> 28
<TABLE>
<CAPTION>
Name and Address Positions Held With the Principal Occupation(s) During
Fund the Past Five Years
---- -------------------
<S> <C> <C>
Heiko H. Thieme* Chairman of the Board of Chairman of the Board of
1370 Avenue of the Directors, Chief Executive Directors, Chief Executive Officer
Americas Officer and Secretary and Secretary of the Fund and The
New York, NY American Heritage Fund, Inc.
("AHF") since February 1990 and
May 1994, respectively. Chief
Executive Officer of AHMC and
Thieme Associates, Inc.
(investment advisor) since 1990.
Chief Executive Officer of Thieme
Securities, Inc. and Thieme
Consulting, Inc. since 1996 and
1995, respectively. Chief Executive
Officer of The Thieme Fonds
International and The Global
Opportunity Fund Limited and their
respective investment advisors since
1994 and 1997, respectively.
Consultant/Strategist for Deutsche
Bank A.G. from 1989 until
December 1993.
John O. Koehler Director Chief Executive Officer of Koehler
One Strawberry Hill International, Ltd. (consultant on
Avenue - 14H public affairs, risk analysis,
Stamford, CT communications, planning and crisis
management)
Eugene Sarver Director Associate Professor of Finance of
241 W. 97th St. Lubin School of Business -
New York, NY Graduate Division, Pace University
until October 1996. Subsequent thereto,
sole proprietor of Sarver International
(financial and economic consulting) and
Associate of Intercap Investments, Inc.
</TABLE>
* An "Interested person" as defined in the Investment Company Act of 1940.
Dr. Sarver and Mr. Thieme have served as members of the Board of
Directors since February 1990. Mr. Koehler became a member of the Board of
Directors in May 1997. Each of the Fund's Directors is also a member of the
Board of Directors of AHF.
B-6
<PAGE> 29
Thieme Consulting, Inc., which is wholly owned by Mr. Thieme, provides
consulting services to a company whose securities are held by the Fund and
receives compensation therefor. Similar arrangements may be made with other
companies whose securities may become held by the Fund.
On June 1, 1998, Mr. Thieme and his spouse beneficially owned
approximately 1.8% of the Fund's outstanding capital stock. The foregoing
includes shares held by Mr. Thieme and his spouse as custodians for their
children. On the same date, the Fund's officers and directors as a group
beneficially owned approximately 2.9% of the Fund's outstanding capital stock.
During the fiscal year ended January 31, 1998, no cash compensation
was paid by the Fund to its executive officers or Directors.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
On May 18, 1998 , National Financial Services, Inc., P.O. Box 3908,
Church Street Station, New York, NY owned of record approximately 15% of the
shares of the Fund's outstanding capital stock
INVESTMENT ADVISORY AND OTHER SERVICES
Heiko H. Thieme may be deemed to control AHMC by virtue of his record
and beneficial ownership of 90% of the outstanding capital stock thereof. Mr.
Thieme acquired such stock on February 1, 1990. Mr. Thieme is the Chairman of
the Board of Directors and the Chief Executive Officer of AHMC. See
"Management". Northern Westchester Industries, Inc., a corporation which is
wholly owned by Richard K. Parker, is the record and beneficial owner of 10% of
the outstanding capital stock of AHMC.
AHMC became the Fund's investment advisor on May 25, 1994. In
connection with the Investment Advisory Agreement with AHMC, AHMC bears the
expenses of the Fund's trading operations. Except as set forth below, all other
expenses are borne by the Fund.
During the fiscal years ended January 31, 1996, 1997 and 1998,
the Fund incurred investment advisory fees to AHMC of $59,258, $51,874 and
$20,098, respectively. Such fees were not paid, however, pursuant to the prior
agreement by AHMC to decrease the investment advisory fee or, if necessary, to
reimburse the Fund if and to the extent that the Fund's aggregate annual
operating expenses exceed specified percentages of the Fund's net assets as
described in the Fund's Prospectus. In addition, AHMC reimbursed the Fund
$3,278, $31,128 and $124,827 for the respective fiscal years ended January
31, 1996, 1997 and 1998 in connection with such prior agreement.
During the Fund's fiscal year ended January 31, 1998, AHMC provided
office space and administrative personnel utilized by the Fund for which it will
not be reimbursed. AHMC is under no obligation to provide offices space or
personnel in the future without reimbursement.
B-7
<PAGE> 30
TOTAL RETURN
The Fund's average annual total return from May 25, 1994 until January
31, 1998 and for the fiscal year ended January 31, 1998 was approximately
8.67% and - 9%, respectively. See "Total Return" in the Fund's Prospectus for
a description of the method by which total return is computed.
CUSTODIAN
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio is the Fund's
Custodian. In such capacity, the Custodian maintains custody of the Fund's cash
and securities.
INDEPENDENT ACCOUNTANTS
Landsburg Platt Raschiatore & Dalton are the Fund's independent
certified public accountants. The financial statements included herein have been
examined by such firm to the extent set forth in their report.
TRANSFER AGENT
American Data Services, Inc., 150 Motor Parkway, Suite 109,
Hauppauge, New York 11788 ("ADS") is the Fund's Transfer Agent. In such
capacity, ADS maintains the Fund's capital stock records, effects issuances and
transfers of capital stock, handles all correspondence with respect to
shareholder accounts and processes redemptions.
FINANCIAL STATEMENTS
The Fund's Annual Reports for the fiscal years ended January 31,
1997 and 1998 are being furnished with this Statement of Additional
Information and are hereby incorporated by reference.
B-8
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