<PAGE>
As filed with the Securities and Exchange Commission on September 18, 1995
Registration No. 33-90888
811-9010
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C 20549
- --------------------------------------------------------------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [_]
Pre-Effective Amendment No. 2 [X]
-----
Post-Effective Amendment No. _____ [_]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 2 [X]
-----
TRANSAMERICA INVESTORS, INC.
----------------------------
(Exact Name of Registrant)
1150 SOUTH OLIVE, LOS ANGELES, CA 90015
----------------------------------------
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code:
(213) 742-2111
Name and Address of Agent for Service: Copy to:
Reid A. Evers, Esquire Frederick R. Bellamy, Esquire
Second Vice President, Assistant General Counsel Sutherland, Asbill & Brennan
Transamerica Occidental Life Insurance Co. 1275 Pennsylvania Avenue, N.W.
1150 South Olive Washington, D.C. 20004-2404
Los Angeles, CA 90015
Approximate date of proposed public offering:
As soon as practicable after effectiveness of the Registration Statement.
Declaration required pursuant to Rule 24f-2 of the Investment Company Act of
1940: An indefinite number of shares of Common Stock of the Registrant is being
registered by this Registration Statement. The $500 filing fee required by said
Rule was paid with the initial filing.
The Registrant hereby amends its Registration Statement under the Securities Act
of 1933 on such date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which specifically states
that this Registration Statement shall hereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.
<PAGE>
TRANSAMERICA INVESTORS, INC.
Registration Statement on Form N-1A
CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
<TABLE>
<CAPTION>
N-1A
Item No. Caption
- -------- -------
<S> <C> <C>
PART A INFORMATION REQUIRED IN A PROSPECTUS
1. Cover Page...................................................... Cover Page
2. Synopsis..................................................... Fund Expenses
3. Condensed Financial Information............................. Not Applicable
4. General Description of Registrant............ The Premier Funds at a Glance
A General Discussion.about Risk
General Information
Transamerica Premier Funds in Detail
Investment Procedures and Risk Considerations for the Funds
5. Management of the Fund................................. The Management Team
Investment Adviser and Administrator
General Information
5A. Management's Discussion of Performance................ Investment Adviser's
Performance
6. Capital Stock and Other Securities..................... The Management Team
Shareholder Services
How to Exchange Shares
Dividends and Capital Gains
What About Taxes?
General Information
7. Purchase of Securities Being Offered.................. Opening Your Account
How to Buy Additional Shares
Shareholder Services
General Information
Share Price
Other Investor Requirements and Services
8. Redemption or Repurchase................................ How to Sell Shares
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C>
9. Pending Legal Proceedings...............................General Information
</TABLE>
PART B INFORMATION REQUIRED IN THE
STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
N-1A
Item No. Caption
- -------- -------
<S> <C> <C>
10. Cover Page...................................................... Cover Page
11. Table of Contents........................................ Table of Contents
12. General Information and History............................. Not Applicable
13. Investment Objectives and Policies................. Investment Restrictions
Description of Corporate Bond Ratings
Description of Fixed-Income Instruments
Investment Procedures and Risk Considerations For the Funds
Fund Turnover
14. Management of the Registrant..................... Management of the Company
Investment Advisory and Other Services
15. Control Persons and Principal
Holders of Securities..................................... Not Applicable
16. Investment Advisory and
Other Services.................... Investment Advisory and Other Services
17. Brokerage Allocation and Other
Practices........................................... Brokerage Allocation
18. Capital Stock and Other Securities...................... Exchange Privilege
19. Purchase, Redemption and Pricing
of Securities Being Offered............. Determination of Net Asset Value
20. Tax Status.................................................. Not Applicable
21. Underwriters................................................ Not Applicable
22. Calculation of Performance Data.................... Performance Information
23. Financial Statements.................................. Financial Statements
</TABLE>
3
<PAGE>
PART C OTHER INFORMATION
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.
4
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
5
<PAGE>
TRANSAMERICA PREMIER FUNDS
INVESTOR SHARES
Supplement Dated September 22, 1995
to Investor Shares Prospectus Dated September 22, 1995
The following information supplements, and should be read in conjunction
with, the Prospectus to which this endorsement is attached.
The following information supplements the section titled "Fund Expenses."
As an additional subsidy to introduce the Funds, beginning on the date of
commencement of Fund sales, the Investment Adviser will waive the Adviser Fee
and the Administrator will assume any other operating expenses for each Fund,
other than certain extraordinary or non-recurring expenses, which together
exceed 0.25% of the average daily net assets for each Fund until the earlier of
December 31, 1995 or such time as the Fund's assets exceed $50 million.
The estimated operating expenses for the period from the date of
commencement of Fund sales until December 31, 1995 are as follows:
ESTIMATED FUND OPERATING EXPENSES TO 12/31/95
(as a percent of average net assets)
<TABLE>
<CAPTION>
=========================================================================================
TOTAL
OPERATING
OTHER EXPENSES
ADVISER EXPENSES AFTER WAIVER
FEE AFTER 12b-1 AFTER REIM- AND REIM-
FUND WAIVER FEE BURSEMENT BURSEMENT
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Premier Equity 0.00 % 0.25 % 0.00 % 0.25 %
- -----------------------------------------------------------------------------------------
Premier Index 0.00 % 0.10 % 0.15 % 0.25 %
- -----------------------------------------------------------------------------------------
Premier Bond 0.00 % 0.25 % 0.00 % 0.25 %
- -----------------------------------------------------------------------------------------
Premier Balanced 0.00 % 0.25 % 0.00 % 0.25 %
- -----------------------------------------------------------------------------------------
Premier Short-Term Government 0.00 % 0.25 % 0.00 % 0.25 %
- -----------------------------------------------------------------------------------------
Premier Cash Reserve 0.00 % 0.10 % 0.15 % 0.25 %
=========================================================================================
</TABLE>
The estimated annual operating expenses, assuming the above figures until
------
December 31, 1995 and the figures currently in the Prospectus after December 31,
1995 are as follows:
ESTIMATED ANNUAL FUND OPERATING EXPENSES
(as a percent of average net assets)
<TABLE>
<CAPTION>
=========================================================================================
TOTAL
OPERATING
OTHER EXPENSES
ADVISER EXPENSES AFTER WAIVER
FEE AFTER 12b-1 AFTER REIM- AND REIM-
FUND WAIVER FEE BURSEMENT BURSEMENT
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Premier Equity 0.64 % 0.25 % 0.30 % 1.19 %
- -----------------------------------------------------------------------------------------
Premier Index 0.22 % 0.10 % 0.27 % 0.59 %
- -----------------------------------------------------------------------------------------
Premier Bond 0.45 % 0.25 % 0.34 % 1.04 %
- -----------------------------------------------------------------------------------------
Premier Balanced 0.56 % 0.25 % 0.34 % 1.15 %
- -----------------------------------------------------------------------------------------
Premier Short-Term Government 0.37 % 0.25 % 0.08 % 0.70 %
- -----------------------------------------------------------------------------------------
Premier Cash Reserve 0.26 % 0.10 % 0.23 % 0.59 %
=========================================================================================
</TABLE>
PEO21-0995
<PAGE>
PROSPECTUS: SEPTEMBER 22, 1995
TRANSAMERICA
PREMIER FUNDS
INVESTOR SHARES
YOUR GUIDE This guide (the "Prospectus") will provide you with helpful insights
and details about the Transamerica Premier Funds. It is intended to give you
what you need to know before investing. Please read it carefully and save it for
future reference.
TRANSAMERICA INVESTORS Transamerica Investors, Inc. (also referred to as the
Company or we, us, or our) is an open-end, management investment company. We are
a mutual fund company that offers a number of portfolios, known as the
Transamerica Premier Funds. Each Fund is managed separately and has its own
investment objective, strategies and policies designed to meet different goals.
Each Fund and each class of each Fund has its own levels of expenses and
charges. The minimum investment is $1,000 per Fund, or less in some instances.
See "Minimum Investment Amounts" on page _____.
THE PREMIER FUNDS
. Transamerica Premier Equity Fund
. Transamerica Premier Index Fund
. Transamerica Premier Bond Fund
. Transamerica Premier Balanced Fund
. Transamerica Premier Short-Intermediate Government Fund
. Transamerica Premier Cash Reserve Fund
FOR ADDITIONAL INFORMATION AND ASSISTANCE For additional details about the
Funds, you can call 1-800-89-ASK-US (1-800-892-7587), or write to Transamerica
Investors, P.O. Box 9232, Boston, Massachusetts 02205-9232. A free Statement of
Additional Information (the "SAI"), which has been filed with the Securities and
Exchange Commission, is available by calling the above number. The SAI is a part
of this Prospectus by reference.
THESE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE UNITED STATES GOVERNMENT.
THERE CAN BE NO ASSURANCE THAT THE TRANSAMERICA PREMIER CASH RESERVE FUND WILL
BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
LIKE ALL MUTUAL FUND SHARES, 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.
<PAGE>
<TABLE>
<CAPTION>
CONTENTS
SECTION PAGE
<S> <C>
THE PREMIER FUNDS AT A GLANCE . . . . . . . . . . . . . . .
[margin] HERE'S WHERE YOU CAN GET A
QUICK OVERVIEW OF THE FUNDS' INVESTMENT
OBJECTIVES, STRATEGIES, AND POLICIES, AND SEE
IF YOU'RE THE TYPE OF INVESTOR WHO MIGHT BE
INTERESTED IN THESE FUNDS.
FUND EXPENSES . . . . . . . . . . . . . . . . . . . . . . .
[margin] ALL OF THE FEES AND EXPENSES ARE
SPELLED OUT HERE, SO YOU CAN SEE HOW THESE
COSTS COMPARE WITH OTHER FUNDS.
THE MANAGEMENT TEAM . . . . . . . . . . . . . . . . . . . .
INVESTMENT ADVISER'S PERFORMANCE . . . . . . . . . . . . .
[margin] READ THIS SECTION FOR
INFORMATION ABOUT THE INVESTMENT ADVISER,
INCLUDING SOME INVESTMENT PERFORMANCE
NUMBERS YOU CAN USE TO COMPARE WITH
OTHER FUNDS.
TRANSAMERICA PREMIER FUNDS IN DETAIL . . . . . . . . . . .
A GENERAL DISCUSSION ABOUT RISK . . . . . . . . . . . . . .
[margin] YOUR TOLERANCE FOR RISK IS ONE
MAJOR PART OF YOUR INVESTMENT DECISION.
YOU SHOULD BE AWARE OF SEVERAL TYPES OF
RISK RELATED TO THE FUNDS, WHICH ARE
EXPLAINED IN THIS SECTION.
INVESTMENT PROCEDURES AND RISK
CONSIDERATIONS FOR THE FUNDS. . . . . . . . . . . . .
SHAREHOLDER SERVICES . . . . . . . . . . . . . . . . . . .
[margin] WE OFFER A NUMBER OF SERVICES
THAT MAKE INVESTING IN THE FUNDS SIMPLE
AND EFFICIENT, LIKE OUR AUTOMATIC
INVESTMENT PLAN. THIS SECTION LISTS AND
DESCRIBES THESE SPECIAL SERVICES.
OPENING YOUR ACCOUNT . . . . . . . . . . . . . . . . . . .
[margin] THESE SECTIONS CAN HELP YOU
UNDERSTAND HOW THE TRANSAMERICA PREMIER
FUNDS CAN BE EASILY AND CONVENIENTLY USED
TO MEET YOUR NEEDS.
HOW TO BUY ADDITIONAL SHARES . . . . . . . . . . . . . . .
</TABLE>
2
<PAGE>
[margin] The minimum investment is
$1,000 per Fund, or less in some
instances.
HOW TO SELL SHARES . . . . . . . . . . . . . . . . . . . .
HOW TO EXCHANGE SHARES . . . . . . . . . . . . . . . . . .
OTHER INVESTOR REQUIREMENTS AND SERVICES . . . . . . . . .
DIVIDENDS AND CAPITAL GAINS . . . . . . . . . . . . . . . .
[margin] ONE OF THE ADVANTAGES OF
INVESTING IN MUTUAL FUNDS IS THE POTENTIAL
TO RECEIVE DIVIDENDS AND/OR CAPITAL GAINS.
YOU CHOOSE HOW YOU WANT TO RECEIVE THESE.
WHAT ABOUT TAXES? . . . . . . . . . . . . . . . . . . . . .
SHARE PRICE . . . . . . . . . . . . . . . . . . . . . . . .
INVESTMENT ADVISER AND ADMINISTRATOR . . . . . . . . . . .
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . .
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE OR
OTHER JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN
SUCH STATE OR OTHER JURISDICTION.
THE PREMIER FUNDS AT A GLANCE
The Transamerica Premier Funds consist of six diversified
Funds with different investment objectives and risk levels, which
invest in a range of securities types. There is no guarantee that
these investment objectives will be met. These short descriptions
will give you a summary of each Fund. A more detailed description
for each Fund is in "Transamerica Premier Funds in Detail" on
page____. For information on the risks associated with investment
in these Funds, see "Investment Procedures and Risk
Considerations for the Funds" on page ____.
TRANSAMERICA PREMIER EQUITY FUND
. We seek to maximize long-term growth for this Fund.
. We invest primarily in common stocks of growth companies that
we consider to be premier companies that are under-valued in
the stock market.
. The Fund is intended for investors who wish to participate
primarily in the common stock markets. Investors should have
the perspective, patience, and financial ability to take on
above-average stock market volatility in a focused pursuit of
long-term capital growth.
3
<PAGE>
TRANSAMERICA PREMIER INDEX FUND
. We seek to track the performance of the Standard & Poor's 500
Composite Stock Price Index, also known as the S&P 500 Index,
for this Fund.
. We attempt to reproduce the overall investment characteristics
of the S&P 500 Index by using a combination of management
techniques. Our stock purchases reflect the S&P 500 Index, but
we make no attempt to forecast general market movements.
. The Fund is intended for investors who wish to participate in
the overall growth of the economy, as reflected by the
domestic stock market. Investors should have the perspective,
patience, and financial ability to take on average stock
market volatility in pursuit of long-term capital growth.
TRANSAMERICA PREMIER BOND FUND
. We seek to achieve a high total return (income plus capital
changes) from fixed income securities consistent with
preservation of principal for this Fund.
. We invest primarily in a diversified selection of investment
grade corporate and government bonds and mortgage-backed
securities.
. The Fund is intended for investors who wish to invest in a
diversified portfolio of bonds. Investors should have the
perspective, patience, and financial ability to take on above-
average bond price volatility in pursuit of a high total
return produced by income from longer-term securities and
capital gains from undervalued bonds.
TRANSAMERICA PREMIER BALANCED FUND
. We seek to achieve long-term capital growth and current income
with a secondary objective of capital preservation, by
balancing investments among stocks, bonds, and cash (or cash
equivalents) for this Fund.
. We invest in a diversified selection of common stocks, bonds,
and money market instruments and other short-term debt
securities.
. The Fund is intended for investors who wish to participate in
both the equity and debt markets, but who wish to leave the
allocation of the balance between them to professional
management. Investors should have the perspective, patience,
and financial ability to take on average market volatility in
pursuit of long-term total return that balances capital growth
and current income.
TRANSAMERICA PREMIER SHORT-INTERMEDIATE GOVERNMENT FUND
. We seek to achieve a high level of current income with the
security of investing in government securities for this Fund.
. We generally invest in securities issued or guaranteed by the
U.S. Government, its agencies or instrumentalities, or its
political subdivisions. The Fund will have dollar-weighted
average maturity of more than two years, but less than five
years.
. The Fund is intended for investors who wish to earn higher
income than is available from money market funds. Investors
should have the perspective and patience to accept the
additional price fluctuation for the advantage of earning
generally higher returns than is available from money market
funds.
4
<PAGE>
TRANSAMERICA PREMIER CASH RESERVE FUND
. We seek to maximize current income from money market
securities consistent with liquidity and preservation of
principal for this Fund.
. This is a money market fund. We invest primarily in high
quality U.S. dollar-denominated money market instruments with
remaining maturities of 13 months or less.
. The Fund provides a low risk, relatively low cost way to
maximize current income through high quality money market
securities that offer stability of principal and liquidity.
This Fund may be a suitable investment for temporary or
defensive purposes and may also be appropriate as part of an
overall long-term investment strategy.
SHARES OF THESE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY BANK, AND ARE NOT
INSURED BY THE FDIC OR ANY OTHER GOVERNMENTAL AGENCY. THESE FUNDS INVOLVE
INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
FUND EXPENSES
Each Fund bears the costs of its operations. These costs may
include, but are not limited to, fees for investment adviser,
distribution, shareholder service, independent directors,
professional and brokerage services, security pricing services,
custody, transfer agency, recordkeeping services, insurance,
federal and state registration, amortized expenses, taxes, and
any extraordinary expenses.
Each Fund is available in two classes of shares: Investor
Shares and Adviser Shares. Each class of shares will be charged
separately for expenses related solely to that class. Each class
of shares may have different sales charges and other expenses,
which may affect performance. Fund expenses that are not class-
specific will be allocated between the classes based on the net
assets of each class. This Prospectus describes only Investor
Shares.
INVESTOR SHARES Investor Shares are available on a no-load basis
directly to individuals, companies, Pension and Retirement
Savings Programs, and other institutional investors from
Transamerica Securities Sales Corporation ("TSSC"), the
Distributor. For a listing of applicable Pension and Retirement
Savings Programs, see "Pension and Retirement Savings Programs"
on page ____.
Adviser Shares are available only to Pension and Retirement
Savings Programs and other institutional investors, and only from
registered representatives of Transamerica Financial Resources,
Inc. ("TFR"), or other registered broker-dealers authorized by
the Board of Directors and TSSC. Individual investors can buy
Adviser Shares only for an Individual Retirement Account ("IRA")
or through a program sponsored by their employer, that is offered
by a registered representative (i.e. broker). To receive a free
prospectus about Adviser Shares, contact a TFR representative or
call 1-800-89-ASK-US.
5
<PAGE>
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
==============================================================================================
SHORT-
PREMIER FUNDS INTERM CASH
TRANSACTION EXPENSES EQUITY INDEX BOND BALANCED GOVERN RESERVE
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales Charge on Purchases/1/ None None None None None None
- ----------------------------------------------------------------------------------------------
Redemption Fee None None None None None None
- ----------------------------------------------------------------------------------------------
Sales Charge on Reinvested Dividends None None None None None None
- ----------------------------------------------------------------------------------------------
Exchange Fee None None None None None None
- ----------------------------------------------------------------------------------------------
Contingent Deferred Sales Charge None None None None None None
==============================================================================================
</TABLE>
[margin] SHAREHOLDER TRANSACTION EXPENSES ARE
CHARGES YOU PAY AT THE TIME YOU BUY OR SELL SHARES
IN A FUND.
ESTIMATED ANNUAL FUND OPERATING EXPENSES
(as a percent of average net assets)
<TABLE>
<CAPTION>
============================================================================================
TOTAL
OPERATING
OTHER EXPENSES
ADVISER EXPENSES AFTER WAIVER
FEE AFTER 12B-1 AFTER REIM- AND REIM-
FUND WAIVER/2/ FEE/3/ BURSEMENT/4/ BURSEMENT/5/
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Premier Equity 0.85 % 0.25% 0.40% 1.50 %
- --------------------------------------------------------------------------------------------
Premier Index 0.30 % 0.10% 0.30% 0.70 %
- --------------------------------------------------------------------------------------------
Premier Bond 0.60 % 0.25% 0.45% 1.30 %
- --------------------------------------------------------------------------------------------
Premier Balanced 0.75 % 0.25% 0.45% 1.45 %
- --------------------------------------------------------------------------------------------
Premier Short-Intermediate 0.50 % 0.25% 0.10% 0.85 %
Government
- --------------------------------------------------------------------------------------------
Premier Cash Reserve 0.35 % 0.10% 0.25% 0.70 %
============================================================================================
</TABLE>
The preceding tables summarize actual transaction expenses and anticipated
operating expenses. The purpose of the tables is to assist you in understanding
the varying costs and expenses you will bear directly or indirectly. Without any
fee waiver by the Investment Adviser or expense reimbursement by the
Administrator, the estimated total operating expenses for the first year of the
Funds' operation, based on $50 million of assets in each Fund, are 3.26 %, 2.77
%, 3.10 %, 3.16 %, 2.90 % and 2.62 %, respectively.
EXAMPLE
Using the above tables of transaction expenses and operating expenses/6/, you
would pay the following expenses based on a $1,000 investment. The expenses
shown assume a 5% annual return. The expenses are the same whether or not you
redeem your shares at the end of each time period. We may assess an annual fee
against accounts used as IRA's or SEP's. For more information on this fee, see
"IRA/SEP Accounts" on page _____ .
6
<PAGE>
<TABLE>
<CAPTION>
===========================================================
FUND 1 YEAR 3 YEARS
-----------------------------------------------------------
<S> <C> <C>
Premier Equity $15 $47
-----------------------------------------------------------
Premier Index $ 7 $22
-----------------------------------------------------------
Premier Bond $13 $41
-----------------------------------------------------------
Premier Balanced $15 $46
-----------------------------------------------------------
Premier Short-Intermediate Government $ 9 $27
-----------------------------------------------------------
Premier Cash Reserve $ 7 $22
===========================================================
</TABLE>
[margin] ANNUAL FUND OPERATING
EXPENSES ARE PAID AT A DAILY RATE OUT OF THE
FUND'S ASSETS. WE CALCULATE THE SHARE PRICE
AND ANY DIVIDENDS AFTER THESE EXPENSES ARE
PAID.
THE INFORMATION CONTAINED IN THE ABOVE EXAMPLES SHOULD NOT BE CONSIDERED A
REPRESENTATION OF FUTURE EXPENSES. THE ACTUAL EXPENSES MAY BE MORE OR LESS THAN
THOSE SHOWN.
1. Although there is no sales charge, there is a 12b-1 fee. Over a long period
of time, the total amount of 12b-1 fees paid may exceed the amount of another
fund's sales charges.
2. See "Adviser Fee" on page ____.
3. 12b-1 fees cover costs of advertising and marketing the Funds. For more
information on 12b-1 fees, see "Distribution Plan" on page ____.
4. "Other Expenses" are those incurred after any reimbursements to the Fund by
the Administrator. See "The Management Team" on page ____. Other expenses
include expenses not covered by the adviser fee or the 12b-1 fee. See
"Distribution Plan" on page ____. This can include fees and expenses
attributable solely to a particular class of shares, such as those for transfer
agent and administrative personnel; preparing, printing, mailing and
distributing materials to shareholders of a particular class; state and federal
registration fees; legal and accounting fees; directors' fees and expenses
incurred as a result of issues relating solely to a class; and fees and payments
for specific class services including account maintenance, dividend disbursing
or subaccounting services; or administration of a dividend reinvestment,
systematic investment or withdrawal plan.
5. Total operating expenses include adviser fees, 12b-1 fees, and other expenses
that a Fund incurs. The Investment Adviser has agreed to waive their Adviser Fee
and the Administrator has agreed to assume any other operating expenses for each
Fund , other than certain extraordinary or non-recurring expenses, which
together exceed a specified percentage of the average daily net assets of that
Fund until the earlier of October 1, 1996 or such time as the Fund's assets
exceed $50 million. The specified percentages are 1.50 % for the Premier Equity
Fund, 0.70 % for the Premier Index Fund, 1.30 % for the Premier Bond Fund, 1.45
% for the Premier Balanced Fund, 0.85 % for the Premier Short-Intermediate
Government Fund, and 0.70 % for the Premier Cash Reserve Fund. The Administrator
may, from time to time, assume additional expenses. Fee waivers and expense
assumption arrangements, which may be terminated at any time without notice,
will increase a Fund's yield.
6. The expenses in the example assume no fees for IRA or SEP accounts.
THE MANAGEMENT TEAM
7
<PAGE>
Responsibility for the management and supervision of the
Company and its Funds rests with the Board of Directors of
Transamerica Investors, Inc. (the "Board"). The Investment
Adviser and the Administrator are subject to the direction of the
Board.
The Funds' Investment Adviser is Transamerica Investment
Services, Inc. (the "Investment Adviser"), 1150 S. Olive Street,
Los Angeles, California 90015. The Investment Adviser's duties
include, but are not limited to: (1) supervising and managing the
investments of each Fund and directing the purchase and sale of
its investments; and (2) ensuring that investments follow the
investment objective, strategies, and policies and comply with
government regulations. For more information on Fund management,
see "Investment Adviser and Administrator Services" on page ____.
The Funds' Administrator is Transamerica Occidental Life
Insurance Company (the "Administrator"), 1150 S. Olive Street,
Los Angeles, California 90015. The Administrator's duties
include, but are not limited to: (1) providing the Funds with
administrative and clerical services, including the maintenance
of the Funds' books and records; (2) registering the Fund shares
with the Securities and Exchange Commission (the "SEC") and with
those states and other jurisdictions where its shares are offered
or sold and arranging periodic updating of the Funds' prospectus;
(3) providing proxy materials and reports to Fund shareholders
and the SEC; and (4) providing the Funds with adequate office
space and all necessary office equipment and services.
Transamerica Occidental Life Insurance Company is a wholly
owned subsidiary of Transamerica Insurance Corporation of
California. Both Transamerica Insurance Corporation of California
and Transamerica Investment Services, Inc. are wholly owned
subsidiaries of Transamerica Corporation, 600 Montgomery Street,
San Francisco, California 94111, one of the nation's largest
financial services companies.
INVESTMENT ADVISER'S
PERFORMANCE
Because Transamerica Investors, Inc. is a new mutual fund
company, established in 1995, there is no past performance
information available for the Premier Funds. However, the
Investment Adviser, Transamerica Investment Services, Inc., has
been managing segregated investment accounts (or "separate
accounts") for pension clients of Transamerica Corporation's
affiliate companies for over ten years. The Investment Adviser's
performance in managing these investments was a key factor in our
decision to offer mutual funds to the public. This performance is
illustrated in the tables and graphs that follow.
[margin] THE PERFORMANCE FIGURES SHOWN
HERE ARE FOR FIVE INVESTMENT FUNDS WHICH
HAVE THE SAME INVESTMENT ADVISER AND USE
THE SAME BASIC INVESTMENT STRATEGIES AS THE
CORRESPONDING PREMIER FUNDS. THIS
DEMONSTRATES THE INVESTMENT ADVISER'S
INVESTMENT TRACK RECORD.
8
<PAGE>
Five of the Funds described in this Prospectus have
substantially the same investment objectives and policies and use
the same investment strategies and techniques as the similarly
named, but unrelated, separate accounts managed by the Investment
Adviser . However, there can be no assurance that their
performance will be the same. The Funds may have total assets
which will be more or less than the total assets in the separate
accounts. The Investment Adviser believes that asset size is not
a significant factor in the Funds' ability to achieve their
investment objectives.
For comparison purposes, the five separate accounts match up
to the Premier Funds as follows:
<TABLE>
<CAPTION>
SEPARATE ACCOUNTS PREMIER FUNDS
----------------- -------------
<S> <C>
Equity Separate Account Transamerica Premier Equity Fund
Equity Index Separate Account Transamerica Premier Index Fund
Bond Separate Account Transamerica Premier Bond Fund
Balanced Separate Account Transamerica Premier Balanced Fund
Cash Management Separate Account Transamerica Premier Cash Reserve Fund
</TABLE>
The following table shows how the separate accounts' annualized
performance compares to recognized industry indexes over the last one-year,
three-year, and five-year periods.
SEPARATE ACCOUNT PERFORMANCE*
<TABLE>
<CAPTION>
=========================================================================================
SINCE
SEPARATE ACCOUNT OR INDEX 1 YEAR 3 YEARS 5 YEARS INCEPTION**
=========================================================================================
<S> <C> <C> <C> <C>
Equity Separate Account 44.02% 26.38% 23.84% 20.69%
- -----------------------------------------------------------------------------------------
S&P 500 Index 26.07% 13.26% 12.09% 10.51%
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Equity Index Separate Account 25.45% 12.62% 11.46% 13.47%
- -----------------------------------------------------------------------------------------
S&P 500 Index 26.07% 13.26% 12.09% 13.72%
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Bond Separate Account 15.80% 10.13% 11.54% 13.13%
- -----------------------------------------------------------------------------------------
Lehman Brothers Government/Corporate Index 12.77% 7.93% 9.61% 10.44%
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Balanced Separate Account 37.54% - - - - 17.38%
- -----------------------------------------------------------------------------------------
60% S&P 500 Index and 40% Lehman Brothers 20.75% - - - - 9.57%
Government/Corporate Index
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Cash Management Separate Account 5.00% 3.56% 4.44% 6.94%
- -----------------------------------------------------------------------------------------
IBC/Donoghue First Tier Index 4.95% 3.51% 4.37% 6.88%
- -----------------------------------------------------------------------------------------
</TABLE>
* Figures are as of 6/30/95
** Inception dates: Equity - 10/1/87; Equity Index - 10/1/86;
Bond - 5/1/83; Balanced - 4/1/93; Cash Management - 1/3/82
- - Prior to separate account inception
The Investment Adviser has had a history of successfully
investing in the three basic investment categories: equity, bond,
and money markets. Below are graphs of the three separate
accounts representing those categories, showing their performance
since inception compared with the performance of recognized
industry indexes for each investment category.
Rates of return shown are calculated using a time-weighted
total rate of return with each period linked to create the long
term rates of return. Results
9
<PAGE>
for periods longer than one year are annualized. This method was
used for each separate account and will also be used for each of
the Funds. Beginning on October 1, 1992 the separate account
values were calculated daily and cash flows were daily. Prior to
that date, separate account valuations and cash flows were
monthly.
10
<PAGE>
The following graph shows that $1,000 invested in the Equity
Separate Account at its inception on October 1, 1987 would have
grown to about $4,293 as of June 30, 1995. This is equivalent to
a 20.69% return per year. By comparison $1,000 invested at the
same time in S&P 500 Index securities would have grown to only
about $2,169. The S&P 500 Index is a selection of 500 common
stocks designed to be a benchmark for the equity market in
general.
[GRAPH APPEARS HERE]
11
<PAGE>
The following graph shows that $1,000 invested in the Bond
Separate Account at its inception on May 1, 1983 would have grown
to about $4,487 as of June 30, 1995. This is equivalent to a
13.13% return per year. By comparison $1,000 invested at the same
time in Lehman Brothers Government/ Corporate Index securities
would have grown to only about $3,348. The Lehman Brothers
Government/Corporate Index is a mixture of both corporate and
government bonds with maturities of 10 years or longer that are
rated investment grade or higher by Moody's or Standard &
Poor's.
[GRAPH APPEARS HERE]
12
<PAGE>
The following graph shows that $1,000 invested in the Cash
Management Separate Account at its inception on January 3, 1982
would have grown to about $2,417 as of June 30, 1995. This is
equivalent to a 6.94 % return per year. And $1,000 invested at
the same time in IBC/Donoghue First Tier Index securities would
have grown to about $2,399. The IBC/Donoghue First Tier Index is
a composite of taxable money market funds that meet the SEC's
definition of first tier securities.
[GRAPH APPEARS HERE]
Performance for the separate accounts is shown after
reduction for investment management and administrative charges.
The industry indexes shown in the above graphs are used for
comparison purposes only. They are unmanaged indexes that have no
management fees or expense charges, and they are not available
for investment. Performance figures are based on historical
earnings. They are not intended to indicate future performance.
As you can see, the separate accounts have good long-term
performance records compared with the indexes. Keep in mind the
Premier Funds' performance may differ from the separate accounts'
performance. Some reasons for this difference are timing of
purchases and sales, availability of cash for new investments,
brokerage commissions, and diversification of securities. It's
possible that by using different performance-determining methods
than we've used here, the results could vary. You should not rely
on this performance data when deciding whether to invest in a
13
<PAGE>
particular Premier Fund. Past performance of the separate
accounts is no guarantee of future results for the Funds.
14
<PAGE>
TRANSAMERICA PREMIER FUNDS IN
DETAIL
FUND OBJECTIVES, STRATEGIES AND POLICIES The investment
objectives, strategies, and policies of each Fund are described
below. There is also a section for each Fund giving some points
to consider when investing in that Fund's shares. The "Some
Points to Consider When Investing" section is designed to suggest
circumstances for investing in that Fund, and give you a better
understanding of the Fund.
FUND RISKS The "Investment Procedures and Risk Considerations for
the Funds" section on page ____ details specific risks of the
types of securities in which the Funds invest.
TRANSAMERICA PREMIER EQUITY FUND
INVESTMENT OBJECTIVE We seek to maximize long-term growth for
this Fund.
INVESTMENT STRATEGIES AND POLICIES We invest primarily in common
stocks of growth companies that we consider to be premier
companies that are undervalued in the stock market. We believe
premier companies have: managements that demonstrate their
outstanding capabilities through a combination of superior track
records and well-defined plans for the future; low cost
proprietary products; dominance in market share or specialized
market niches; strong earnings and cash flows to finance future
growth; or shareholder orientation by increasing dividends, stock
repurchases, and strategic acquisitions.
[margin] FOR THE TRANSAMERICA PREMIER
EQUITY FUND, WE GENERALLY FOCUS ON
GROWTH STOCKS OF WHAT WE CONSIDER TO BE
PREMIER COMPANIES.
We also select companies for their potential for growth
based upon trends in the U.S. economy. Some major trends have
included: a) the aging of baby boomers; b) the proliferation of
communication and information technologies; c) the shift toward
financial assets rather than real estate or other tangible
assets; and d) the continuing increase in U.S. productivity.
We focus on growth stocks for this Fund. We will generally
invest at least 65% of the Fund's assets in common stocks. We may
also invest in preferred stocks, warrants, and bonds convertible
into common stocks. When the Investment Adviser determines that
market conditions warrant, the Fund may invest without limit in
cash and cash equivalents for temporary defensive purposes. It is
not expected to be used routinely. As part of the management of
cash and cash equivalents and to help maintain liquidity, we may
purchase and sell the same kind of money market and other short-
term instruments and debt securities as we do for the
15
<PAGE>
Transamerica Premier Cash Reserve Fund. See "Transamerica Premier
Cash Reserve Fund" on page ____ .
We may buy foreign securities if they meet the same criteria
described above for the Fund's investments in general. We may
invest as much as 20% of its assets in foreign securities. At
times the Fund may have no foreign investments. Foreign
securities we purchase will be those traded on the U.S. exchanges
as American depositary receipts ("ADR's"). ADR's are registered
stocks of foreign companies which trade on U.S. stock exchanges.
SOME POINTS TO CONSIDER WHEN INVESTING Since we invest primarily
in common stocks, our investments are subject to stock market
price volatility. Price volatility means that stock prices can go
up or down due to a variety of economic and market conditions.
[margin] STOCK PRICES GO UP AND DOWN,
ESPECIALLY OVER A SHORT-TERM HORIZON. SO IF
YOU INVEST IN THE TRANSAMERICA PREMIER
EQUITY FUND YOU SHOULD BE WILLING TO
ACCEPT THESE KINDS OF PRICE SWINGS WHILE
FOCUSING ON THE LONG-TERM INVESTMENT
OBJECTIVE.
However, we attempt to lessen price volatility by focusing
on the potential for each prospective holding (a "bottom up"
approach) rather than the economic and business cycle (a "top
down" approach). The Fund is constructed one stock at a time.
Each company passes through our research process and in our
opinion stands on its own merits as a viable investment. Our
proprietary fundamental research is designed to identify
companies with potential for improvement in profitability and
acceleration of growth. We believe a rising stock market will
tend to provide significant opportunities for these fundamental
improvements to be reflected in stock prices. We believe these
stocks to have stable inherent value under most circumstances and
tend to be better protected in a general declining market.
The Fund is intended for investors who have the perspective,
patience, and financial ability to take on above-average stock
market volatility in a focused pursuit of long-term capital
growth. Because of the uncertainty associated with common stock
investments, the Fund is intended to be a long-term investment.
TRANSAMERICA PREMIER INDEX FUND
INVESTMENT OBJECTIVE We seek to track the performance of the
Standard & Poor's 500 Composite Stock Price Index, also known as
the S&P 500 Index (the "Index"), for this Fund.
INVESTMENT STRATEGIES AND POLICIES To achieve the Fund's
objective, we use a combination of management techniques. We
purchase common stocks, S&P 500 Stock Index futures, S&P 500
Stock Index options, and short-term instruments in varying
proportions. For common stocks, investment decisions are based
solely on the market proportions of securities which are included
in the Index. The only exception is that Transamerica
16
<PAGE>
Corporation common stock will not be purchased. Our stock
purchases reflect the Index, but we make no attempt to forecast
general market movements.
[margin] THE TRANSAMERICA PREMIER
INDEX FUND IS A EASY WAY FOR YOU TO INVEST
IN THE OVERALL STOCK MARKET SINCE THE FUND
WILL TRACK THE 500 STOCKS IN THE S&P 500.
The Index is an unmanaged index which assumes reinvestment
of dividends and is generally considered representative of U.S.
large capitalization stocks. The Index is composed of 500 common
stocks of large-capitalization companies that are chosen by
Standard and Poor's Corporation on a statistical basis. The
inclusion of a stock in the Index in no way implies that Standard
& Poor's Corporation believes the stock to be an attractive
investment. The 500 stocks, most of which trade on the New York
Stock Exchange, represent approximately 70% of the market value
of all U.S. common stocks. Each stock in the Index is weighted by
its market value.
Because of the market value weighting, the 50 largest
companies in the Index currently account for approximately 50% of
the Index. Typically, companies included in the Index are the
largest and most dominant firms in their respective industries.
As of June 30, 1995, the five companies with the largest
weighting in the Index were: General Electric (2.4%), Exxon
Corporation (2.2%), AT&T Corporation (2.1%), Coca Cola (2.0%),
and Royal Dutch Petroleum (1.6%). The Investment Adviser
routinely compares the Fund's composition to the Index and
rebalances the Fund as required.
We may invest in instruments, other than common stocks,
whose return depends on stock market prices. They include S&P 500
Stock Index futures contracts, options on the Index, options on
futures contracts, and debt securities. These are derivative
securities whose returns are linked to the returns of the S&P 500
Index. These investments are made primarily to help the Fund
track the total return of the Index. The use of S&P 500 Index
derivatives allows the Fund to achieve close correlation with the
Index on a cost-effective basis while maintaining liquidity.
Purchase of futures and options requires only a small amount of
cash to cover the Fund's position and approximate the price
movement of the Index. In order to avoid leverage, any cash which
we do not invest in stocks or in futures and options we invest in
short-term debt securities of the same type as the Transamerica
Premier Cash Reserve Fund can invest. These investments allow the
Fund to approximate the dividend yield of the Index, to cover the
Fund's open positions in the S&P 500 Index derivatives, and to
help offset transaction costs and other expenses not incurred by
the unmanaged Index. For more information on derivatives, see the
section on "Options, Futures, and Other Derivatives" on page
______ of the Prospectus, and also in the Statement of Additional
Information.
The Transamerica Premier Index Fund is not sponsored,
endorsed, sold or promoted by Standard & Poor's Corporation.
S&P's only relationship to the Transamerica Premier Index Fund is
the licensing of the S&P marks and the S&P 500 Index.
SOME POINTS TO CONSIDER WHEN INVESTING The performance of the
Transamerica Premier Index Fund will reflect the performance of
the S&P 500 Index although it may not match it precisely.
Generally, when the Index is
17
<PAGE>
rising, the value of shares in the Fund should also rise. When
the market is declining, the value of shares should also decline.
The Index's returns are not reduced by investment or operating
expenses. So, our ability to match the Index will be impeded by
such expenses. The Fund's return versus the Index, and its
monthly correlation with the movement of the Index, will be
reviewed by the Fund's management and reported to the Board.
In attempting to achieve its objective, the Fund will
actively trade its investments. This may result in higher
transaction costs and tax consequences than for a less actively
traded fund, but the Investment Adviser believes that such
turnover will not adversely affect the Fund's performance. The
portfolio turnover rate may be as high as 200%. See page ____for
more information on turnover.
The Fund is intended for investors who wish to participate
in the overall growth of the economy, as reflected by the
domestic stock market. By owning shares of the Fund, you
indirectly own shares of the largest companies, according to
their proportional representation in the Index. Investors should
have the perspective, patience, and financial ability to take on
average stock market volatility in pursuit of long-term capital
growth. Because of the uncertainty associated with common stock
investments, the Fund is intended to be a long-term investment.
TRANSAMERICA PREMIER BOND FUND
INVESTMENT OBJECTIVE We seek to achieve a high total return
(income plus capital changes) from fixed income securities
consistent with preservation of principal for this Fund.
INVESTMENT STRATEGIES AND POLICIES We invest in a diversified
selection of corporate and government bonds and mortgage-backed
securities. Through our proprietary evaluation and credit
research, we identify bonds whose potential to outperform other
similar bonds, by virtue of underlying credit strength and market
mispricing, is not fully reflected in the current bond market
valuations. By actively managing the Fund, we capitalize on these
opportunities. We seek to accumulate additional return by finding
price advantages as they occur in the market.
We normally invest at least 65% of the Fund's assets in
investment grade bonds. Investment grade bonds are rated Baa or
higher by Moody's Investors Service ("Moody's"). They are rated
BBB or higher by Standard & Poor's Corporation ("S&P").
Maturities are primarily between 10 and 30 years. In addition, we
may invest in lower-rated securities (currently not expected to
exceed 20% of the Fund's assets). Those securities are rated Ba1
or lower (Moody's) and BB+ or lower (S&P). We may also invest in
unrated securities of similar quality, as determined by us. For
more information on lower-rated securities, see "High-Yield
('Junk') Bonds" on page ____ of the Prospectus and see the
Statement of Additional Information. For more information on S&P
and Moody's ratings, see "Summary of Bond Ratings" on page ____.
[margin] WE INVEST PRIMARILY IN HIGH
QUALITY, INVESTMENT GRADE CORPORATE AND
GOVERNMENT BONDS AND MORTGAGE-BACKED
SECURITIES, AND, TO A LESSER EXTENT, IN
18
<PAGE>
BELOW-INVESTMENT GRADE SECURITIES, FOREIGN
SECURITIES, AND CASH EQUIVALENTS.
Our investments may include securities issued or guaranteed
by the U.S. Government or its agencies and instrumentalities,
publicly traded corporate securities, as well as municipal
obligations. We also may invest in mortgage-backed securities
issued by various federal agencies and government sponsored
enterprises and in other mortgage-related or asset-backed
securities. The investments in mortgage-related securities can be
subject to the risk of early repayment of principal. For more
information, see "Mortgage-Backed and Asset-Backed Securities" on
page ____ and the Statement of Additional Information.
We may buy foreign securities and other instruments if they
meet the same criteria described above for the Fund's investments
in general. We may invest as much as 20% of the Fund's assets in
foreign securities. At times the Fund may have no foreign
investments. See "Foreign Securities" on page ____.
If a security in the Fund that was originally rated
"investment grade" is downgraded by a ratings service, it may or
may not be sold. This depends on our assessment of the issuer's
prospects. However, we will not purchase below-investment-grade
securities if that would increase their representation in the
Fund to more than 35%. See "Summary of Bond Ratings" on page ____
and "High Yield ('Junk') Bonds" on page ____ for a description of
bond ratings and junk bonds.
As part of the management of cash and cash equivalents and
to help maintain liquidity, we may purchase and sell the same
kind of money market and other short-term instruments and debt
securities as we do for the Transamerica Premier Cash Reserve
Fund. See "Transamerica Premier Cash Reserve Fund" on page ____ .
We may also invest in options and futures contracts on other
securities or groups of securities and preferred stock. See
"Options, Futures and Other Derivatives" on page ___ and in the
Statement of Additional Information. We ordinarily invest in
common stock only as a result of conversion of bonds, exercise of
warrants, or other extraordinary business events.
SOME POINTS TO CONSIDER WHEN INVESTING The Transamerica Premier
Bond Fund is intended for investors who have the perspective,
patience, and financial ability to take on above-average bond
price volatility in pursuit of a high total return produced by
income from longer-term securities and capital changes from
undervalued credit strength. Due to the longer maturity of the
Fund's assets, the price of the Fund's securities can fluctuate
more sharply than shorter-term securities when interest rates go
up or down. An increase in interest rates will cause prices to
fall. A decrease in rates will cause prices to rise. Because of
the uncertainty associated with long-term bond investments, the
Fund is intended to be a long-term investment.
The longer maturity bonds in which we primarily invest tend
to produce higher income than bonds with shorter maturities.
Longer maturity bonds also tend to vary more in price in response
to changes in interest rates. The basic quality of the bonds,
which are primarily investment grade, tends to provide some
safety of principal.
[margin] BOND PRICES AND INTEREST RATES
TEND TO WORK LIKE A SEE-SAW. LONGER
19
<PAGE>
MATURITY BONDS SIT OUT TOWARDS THE END.
SHORTER MATURITY BONDS SIT IN TOWARDS THE
CENTER. WHEN INTEREST RATES RISE, BOND
PRICES FALL. WHEN INTEREST RATES FALL, BOND
PRICES RISE.
In general, lower-rated bonds, which are a much lesser
component of the Fund, offer higher returns. But they also carry
higher risks. These can include: a) a higher risk of insolvency,
especially during economic downturns; b) a lower degree of
liquidity; and c) the prices of lower-rated bonds can be more
volatile.
TRANSAMERICA PREMIER BALANCED FUND
INVESTMENT OBJECTIVE We seek to achieve long-term capital growth
and current income with a secondary objective of capital
preservation, by balancing investments among stocks, bonds, and
cash (or cash equivalents) for this Fund.
INVESTMENT STRATEGIES AND POLICIES We invest in a diversified
selection of common stocks, bonds, and money market instruments
and other short-term debt securities. We attempt to achieve
reasonable asset appreciation during favorable periods and
conservation of principal in adverse times. This requires
flexibility in managing the Fund's assets. Therefore, we may
shift the portions held in bonds and stocks according to business
and investment conditions. The Fund may hold equity, fixed
income, and cash securities in any proportion, although at all
times it will not hold less than 25% of its assets in non-
convertible debt securities. When the Investment Adviser
determines that market conditions warrant, the Fund may invest
without limit in cash or cash equivalents for temporary defensive
purposes. To the extent that the Fund is so invested, it is not
achieving the investment objectives of the Fund.
[margin] THE NAME OF THE TRANSAMERICA
PREMIER BALANCED FUND IS VERY DESCRIPTIVE.
WE ATTEMPT TO BALANCE LONG-TERM CAPITAL
GROWTH (STOCKS) WITH CURRENT INCOME
(BONDS AND OTHER FIXED INCOME SECURITIES).
Under normal circumstances, we expect that common stocks
will represent 60% to 70% of the Fund's total assets. The Fund
holds common stocks primarily to provide long-term growth of
capital and income. We invest the remaining 30% to 40% of the
Fund's assets primarily in investment grade bonds as rated by
either Moody's or S&P.
The stocks in the Transamerica Premier Balanced Fund are
generally growth companies that we consider to be premier
companies of high quality and undervalued in the stock market.
Equity securities may be selected by us based on growth potential
and dividend paying properties since income is a consideration.
We manage the equity portion of the Fund in a similar manner as
we do the Transamerica Premier Equity Fund, although the
selection of securities may differ. See "Transamerica Premier
Equity Fund" on page ___.
20
<PAGE>
[margin] THE STOCKS IN THE PREMIER
BALANCED FUND ARE USUALLY CONCENTRATED
AMONG PREMIER HIGH QUALITY GROWTH COMPANIES. WE
MANAGE THAT PORTION OF THE FUND MUCH
LIKE WE MANAGE THE TRANSAMERICA PREMIER
EQUITY FUND.
We invest the fixed income portion of the Fund in a
diversified selection of corporate and U.S. Government bonds and
mortgage-backed securities. We manage this portion in a similar
manner as we do the Transamerica Premier Bond Fund, although the
selection of securities may differ. See "Transamerica Premier
Bond Fund" on page ____. The fixed income assets are normally at
least 65% high quality, investment grade bonds with maturities of
between 5 and 30 years. Non-investment grade bonds held in the
fixed income portion of the Fund will be less than 20% of the
Transamerica Premier Balanced Fund's net assets. For more
information on non-investment grade bonds, see "High-Yield
('Junk') Bonds" on page ____ and the Statement of Additional
Information.
[margin] WE MANAGE THE FIXED INCOME
PORTION OF THE TRANSAMERICA PREMIER
BALANCED FUND (MOSTLY BONDS AND
MORTGAGE-BACKED SECURITIES) MUCH LIKE WE
MANAGE THE TRANSAMERICA PREMIER BOND
FUND.
The Fund may also hold certain short-term fixed income
securities as a cash reserve. As part of the management of cash
and cash equivalents and to help maintain liquidity, we may
purchase and sell the same kind of money market and other short-
term instruments and debt securities as we do for the
Transamerica Premier Cash Reserve Fund. See "Transamerica Premier
Cash Reserve Fund" on page ____ .
We may buy foreign securities and other instruments if they
meet the same criteria described above for the Fund's investments
in general. We may invest as much as 20% of the Fund's assets in
foreign securities. At times the Fund may have no foreign
investments. Foreign stock securities purchased by us will be
those traded on the U.S. exchanges as ADR's. We may also invest
in stock and bond index futures and options to a limited extent,
as well as preferred stocks.
[margin] BY INVESTING IN BOTH STOCKS AND
BONDS, WE ATTEMPT TO LESSEN OVERALL
INVESTMENT RISK.
SOME POINTS TO CONSIDER WHEN INVESTING In general, the Fund holds
equities for long-term capital appreciation, and holds bonds for
stability of principal and income as well as a reserve for
investment opportunities. This balance often creates a situation
where some of the market risks offset one another. But investment
risks cannot totally be avoided. The expected performance of such
a fund would normally lie somewhere between the performance of an
equity fund (holding the same stocks) and the performance of a
bond fund (holding the same bonds). But this depends on the
actual
21
<PAGE>
proportions of stocks and bonds. Since we have flexibility in
changing the balance between asset classes, we may increase
exposure to the current advantages of one or more of the asset
classes. Or we may avoid the current disadvantages of one or more
of the asset classes.
The Transamerica Premier Balanced Fund is intended for
investors who wish to participate in both the equity and debt
markets, but who wish to leave the allocation of the balance
between them to professional management. The Fund is intended for
investors who have the perspective, patience, and financial
ability to take on average market volatility in pursuit of long-
term total return that balances capital growth and current
income. Because of the uncertainties associated with common stock
and bond investments, the Fund is intended to be a long-term
investment.
TRANSAMERICA PREMIER SHORT-INTERMEDIATE GOVERNMENT FUND
INVESTMENT OBJECTIVE We seek to achieve a high level of current
income with the security of investing in government securities
for this Fund.
INVESTMENT STRATEGIES AND POLICIES We generally invest at least
65% of the Fund's assets in securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities, or its
political subdivisions. The Fund will have a dollar-weighted
average maturity of more than two years, but less than five
years. The maturity of individual instruments may range from less
than one to as much as thirty years. Our goal is to offer higher
income than money market funds with greater price stability than
most bond funds. Because of the Fund's emphasis on income,
capital appreciation is not a significant investment
consideration. Our investments will consist primarily of bonds
and mortgage-backed securities.
We may invest in U.S. Treasury bills, notes and bonds. We
may also invest in securities issued by any agency or
instrumentality of the United States. Examples of those
securities include those issued by the Government National
Mortgage Association ("GNMA"), the Federal National Mortgage
Association ("FNMA"), the Federal Housing Administration, the
Federal Farm Credit System, or the Student Loan Marketing
Association. Some agency securities are backed by the full faith
and credit of the U.S. Treasury (such as those issued by GNMA).
Others are supported by a borrowing facility from the Treasury
(such as those issued by FNMA). The remainder are backed by the
credit of the issuing agency or instrumentality. Agency
securities that are mortgage-backed (such as those issued by
GNMA) are also subject to prepayment risk. For more information
on prepayment risk see the section on "Current Income Risk" under
"A Discussion About Risk" on page ____ and the section on
"Mortgage-Backed and Asset-Backed Securities" on page ___.
We may also invest up to 35% of the Fund's assets in
investment grade corporate bonds. Investment grade bonds are
rated Baa or higher by Moody's Investors Service ("Moody's").
They are rated BBB or higher by Standard & Poor's Corporation
("S&P"). For more information on S&P and Moody's ratings, see
"Summary of Bond Ratings" on page ____. We may also invest in
instruments derived from (i.e. derivative instruments) government
or
22
<PAGE>
government agency securities. For more information on derivatives
see "Options, Futures, and Other Derivatives" on page ____. As
part of the management of cash and cash equivalents and to help
maintain liquidity, we may purchase and sell the same kind of
money market and other short-term instruments and debt securities
as we do for the Transamerica Premier Cash Reserve Fund. See
"Transamerica Premier Cash Reserve Fund" on page ___.
SOME POINTS TO CONSIDER WHEN INVESTING Generally, the
Transamerica Premier Short-Intermediate Government Fund is
subject to relatively low credit risk. This is because we invest
primarily in securities that are issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, or its political
subdivisions or other top-rated securities, although the Fund
itself is not guaranteed. Under normal conditions, the Fund
provides a higher yield than money market funds because of the
somewhat longer maturity of the securities. The high quality and
the limited maturity of the assets tend to provide safety of
principal. Most bonds will fall in price when interest rates
rise. Bonds of higher credit quality tend to better withstand the
changes in the economy. Also, shorter-term bonds will decline
less than longer term bonds.
In attempting to achieve its objective, the Fund will
actively trade its investments. This may result in higher
transaction costs and tax consequences than for a less actively
traded fund, but the Investment Adviser believes that such
turnover will not adversely affect the Fund's performance. The
portfolio turnover rate may be as high as 300%. See page __ for
more information on turnover.
The Transamerica Premier Short-Intermediate Government Fund
is intended for investors who wish to earn higher income than is
available from money market funds. However, this Fund may have
more short-term volatility than a money market fund. Investors
should have the perspective and patience to accept the additional
price fluctuation for the advantage of earning generally higher
returns than is available from money market funds.
TRANSAMERICA PREMIER CASH RESERVE FUND
INVESTMENT OBJECTIVE We seek to maximize current income from
money market securities consistent with liquidity and
preservation of principal for this Fund.
INVESTMENT STRATEGIES AND POLICIES This is a money market fund.
We invest primarily in high quality U.S. dollar-denominated money
market instruments of U.S. and foreign issuers with remaining
maturities of 13 months or less, including:
. Obligations issued or guaranteed by the U.S. and foreign
governments and their agencies or instrumentalities;
. Obligations of U.S. and foreign banks, or their foreign
branches, and U.S. savings banks;
. Short-term corporate obligations, including commercial paper,
notes, and bonds;
. Other short-term debt obligations with remaining maturities of
397 days or less; and
. Repurchase agreements involving any of the securities
mentioned above.
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<PAGE>
[margin] THE TRANSAMERICA PREMIER CASH
RESERVE FUND OFFERS A PLACE TO KEEP YOUR
MONEY WHILE YOU ARE CONSIDERING IN WHICH
FUNDS TO INVEST, OR FOR YOUR SHORT-TERM
NEEDS.
We may also purchase other marketable, non-convertible
corporate debt securities of U.S. issuers. These investments
include bonds, debentures, floating rate obligations, and issues
with optional maturities. See the Statement of Additional
Information for a description of these securities.
Bank obligations are limited to U.S. or foreign banks having
total assets over $1.5 billion. Investments in savings
association obligations are limited to U.S. savings banks with
total assets over $1.5 billion. Investments in bank obligations
can include instruments issued by foreign branches of U.S. or
foreign banks or domestic branches of foreign banks.
In addition, we may invest in U.S. dollar-denominated
obligations issued or guaranteed by foreign governments or their
political subdivisions, agencies, or instrumentalities. We may
buy these foreign securities and other instruments if they meet
the same criteria described above for the Fund's investments in
general. The Fund can invest up to 25% of its assets in
obligations of Canadian and other foreign issuers. At times the
Fund may have no foreign investments.
The commercial paper and other short-term corporate
obligations are determined by us to present minimal credit risks.
We determine that they are either: a) rated in the highest short-
term rating category by at least two nationally recognized
statistical rating organizations; b) rated in the highest short-
term rating by a single rating organization if it's the only
organization that has assigned the obligations a short-term
rating; or c) unrated, but determined by us to be of comparable
quality (also called "First Tier Securities").
We seek to maintain a stable net asset value of $1.00 per
share by investing in assets which present minimal credit risk as
defined above, and by maintaining an average maturity of 90 days
or less. Securities are valued on an amortized cost basis.
[margin] THE TRANSAMERICA PREMIER CASH
RESERVE FUND OFFERS THE CONVENIENCE OF A
LOW RISK, RELATIVELY LOW COST INVESTMENT.
YOU CAN GET AT YOUR MONEY SIMPLY BY
WRITING CHECKS, JUST AS YOU DO WITH YOUR
BANK CHECKING ACCOUNT (ALTHOUGH THERE IS
A MINIMUM CHECK AMOUNT OF $250). SEE
"BY CHECK" ON PAGE ___ FOR MORE DETAILS.
SOME POINTS TO CONSIDER WHEN INVESTING The Fund provides a low
risk, relatively low cost way to maximize current income through
high quality money market securities that offer stability of
principal and liquidity. The rates on short-term investments made
by us and the daily dividend paid to investors will vary, rising
or falling with short-term rates generally. The Fund's yield will
tend to lag behind the changes in interest rates. The speed with
which the
24
<PAGE>
Fund's yield reflects current market rates will depend on how
quickly its securities mature and the amount of money available
for new investment.
This Fund may be a suitable investment for temporary or
defensive purposes. It may also be appropriate as part of an
overall long-term investment strategy.
THE TRANSAMERICA PREMIER CASH RESERVE FUND IS NEITHER INSURED NOR
GUARANTEED BY THE UNITED STATES GOVERNMENT, AND THERE CAN BE NO
ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE NET
ASSET VALUE OF $1.00 PER SHARE.
WHAT IS FUNDAMENTAL? The investment objectives given for each
Fund are fundamental. This means they can be changed only with
the approval of the majority of shareholders. We can give you no
assurance that these objectives will be met. Many of the
strategies and policies are not fundamental. This means
strategies and policies can be changed by the Board without your
approval.
If any investment objectives of a Fund change, you should
decide if the Fund still meets your financial needs. More
information about this is in the Statement of Additional
Information.
A GENERAL DISCUSSION ABOUT RISK
It's important for you to understand the risks inherent in
investing in different kinds of funds, such as our Funds. All
investments are subject to risk. Even money you hide in your
mattress is subject to the risk that inflation may erode its
value. Each of the Funds is subject to the following risks:
[margin] HOW YOU FEEL ABOUT RISK IS
PERSONAL. RISK REFLECTS UNCERTAINTY OR
UNEXPECTED CHANGE. TRY TO COME UP WITH A
BALANCE OF INVESTMENTS THAT ALLOWS YOU TO
GO AFTER YOUR MAIN GOALS WHILE STILL GIVING
YOU PEACE OF MIND.
MARKET OR PRICE VOLATILITY RISK For stocks, this refers to the up
and down price fluctuations, or volatility, caused by changing
conditions in the financial markets. For bonds and other debt
securities, it is the change in market price caused by interest
rate movements. Longer-maturity bond funds and stock funds are
more subject to this risk than money market and shorter-maturity
bond funds.
FINANCIAL OR CREDIT RISK For stocks and other equity securities,
financial risk comes from the possibility that current earnings
of the stock company will fall or that overall financial
circumstances will decline. Either of these could cause the
security to lose its value. For bonds and other debt securities,
financial risk comes from the possibility that the issuer will
not be able to pay principal and interest on time. Funds with low
quality bonds and speculative stock funds are more subject to
this risk than funds with
25
<PAGE>
government or high quality bonds. For more information, see
"High-Yield ('Junk') Bonds" on page ____ and "Summary of Bond
Ratings" on page ____.
CURRENT INCOME RISK The Funds receive income, either as interest
or dividends, from the securities in which they have invested.
Each Fund pays out substantially all of this income to its
shareholders as dividends. See the footnote for "What About
Taxes" on page ____. The dividends paid out to shareholders are
called current income. Current income risk means how much and how
quickly overall interest rate or dividend rate changes on income
received by the Funds affects our ability to maintain the current
level of income paid to shareholders.
INFLATION OR PURCHASING POWER RISK Inflation risk is the
uncertainty that your invested dollars may not buy as much in the
future as they do today. Longer-maturity bond funds are more
subject to this risk than money market or stock funds.
SOVEREIGN RISK Sovereign risk is the potential loss of assets or
earning power due to government actions, such as taxation,
expropriation, or regulation. Funds with large investments
overseas or funds with tax-advantaged investments are more
subject to this risk.
More in-depth information about risk is provided in the following
section and in the Statement of Additional Information.
INVESTMENT PROCEDURES AND RISK CONSIDERATIONS FOR THE FUNDS
BUYING AND SELLING SECURITIES In general, we purchase and hold
securities for each Fund for capital growth, current income, or a
combination of those purposes. However, we ordinarily buy and
sell securities whenever we think it is appropriate in order to
achieve the Fund's investment objective. Fund changes can result
from liquidity needs, securities reaching a price objective,
anticipated changes in interest rates, a change in the
creditworthiness of an issuer, or from general financial or
market developments. Because investment changes usually are not
tied to the length of time a security has been held, a
significant number of short-term transactions may result.
[margin] WE HAVE THE ABILITY TO BUY AND
SELL SECURITIES AS OFTEN AS WE WISH IN ORDER
TO ACHIEVE A FUND'S INVESTMENT OBJECTIVE.
We may sell one security and simultaneously purchase another
of comparable quality. We may simultaneously purchase and sell
the same security to take advantage of short-term differentials
and bond yields. Or we may purchase individual securities in
anticipation of relatively short-term price gains. The rate of
portfolio turnover will not be a determining factor in these
decisions. However, certain tax considerations can restrict our
ability to sell securities in some circumstances when the
security has been held for less than three months. Increased
turnover results in higher costs. These costs result
26
<PAGE>
from brokerage commissions, dealer mark-ups and other transaction
costs on the sale of securities and reinvestment in other
securities. This can result in the acceleration of taxable gains.
Turnover for the insurance company separate accounts (as
described under "Investment Adviser's Performance" on page
_____), also managed by the Investment Adviser, has not been and
will not be a consideration. The Investment Adviser buys and
sells securities for each separate account whenever they believe
it is appropriate to do so. The Transamerica Premier Funds are
and will be managed in a substantially similar manner.
We cannot predict precisely the turnover rates for these new
Funds, but we expect that the annual turnover rates will
generally not exceed: 50% for the Transamerica Premier Equity
Fund; 200% for the Transamerica Premier Index Fund; 100% for the
Transamerica Premier Bond Fund; 50% for the Transamerica Premier
Balanced Fund; and 300% for the Transamerica Premier Short-
Intermediate Government Fund. We expect the turnover rate for the
Transamerica Premier Cash Reserve Fund to be zero for regulatory
purposes. A 100% annual turnover rate would occur if all of a
Fund's securities were replaced one time during a one year
period. Short-term gains realized from turnover are taxable to
shareholders as ordinary income, except for shares held in
special tax-qualified accounts (such as IRA's or employer
sponsored pension plans). In addition, higher turnover rates can
result in corresponding increases in brokerage commissions and
other transaction costs. We generally will not consider turnover
rates in making investment decisions on behalf of any Fund
consistent with the Fund's investment objective and policies.
For more information, see "What About Taxes?", on page ___,
and the Statement of Additional Information.
FUND LENDING As a way to earn additional income, we may lend Fund
securities to creditworthy persons not affiliated with the Funds.
Such loans must be secured by cash collateral or by irrevocable
letters of credit maintained on a current basis in an amount at
least equal to the market value of the securities loaned. During
the existence of the loan, we must continue to receive the
equivalent of the interest and dividends paid by the issuer on
the securities loaned and interest on the investment of the
collateral. We must have the right to call the loan and obtain
the securities loaned at any time on five days' notice. This
includes the right to call the loan to enable the us to execute
shareholder voting rights. Such loans cannot exceed one-third of
the Fund's net assets taken at market value. Interest on loaned
securities cannot exceed 10% of the annual gross income of the
Fund (without offset for realized capital gains). The lending
policy described in this paragraph is a fundamental policy that
can be changed only by a vote of a majority of shareholders.
Lending securities to broker-dealers and institutions could
result in a loss or a delay in recovering the Fund's securities.
BORROWING POLICIES OF THE FUNDS We can borrow money from banks or
engage in reverse repurchase agreements, for temporary or
emergency purposes. We can borrow up to one-third of a Fund's
total assets. To secure borrowings, we can mortgage or pledge
securities in an amount up to one-third of a Fund's net assets.
If we borrow money, a Fund's share price may be subject to
greater fluctuation until the borrowing is paid off. The Fund
will not make any additional investments, other than through
reverse
27
<PAGE>
repurchase agreements, while the level of borrowing exceeds 5% of
the Fund's total assets. For more information on reverse
repurchase agreements see the "Reverse Repurchase Agreements and
Leverage" section below.
REPURCHASE AGREEMENTS We may enter into repurchase agreements
with Federal Reserve System member banks or U.S. securities
dealers. A repurchase agreement occurs when, at the time we
purchase an interest-bearing debt obligation, the seller agrees
to repurchase the debt obligation on a specified date in the
future at an agreed-upon price. The repurchase price reflects an
agreed-upon interest rate during the time the Fund's money is
invested in the security. Since the security constitutes
collateral for the repurchase obligation, a repurchase agreement
can be considered a collateralized loan. Our risk is the ability
of the seller to pay the agreed-upon price on the delivery date.
If the seller is unable to make a timely repurchase, our expected
proceeds could be delayed, or we could suffer a loss in principal
or current interest, or incur costs in liquidating the
collateral. We have established procedures to evaluate the
creditworthiness of parties making repurchase agreements.
The securities underlying repurchase agreements are not
subject to the restrictions applicable to maturity of the Funds
or their securities.
We will not invest in repurchase agreements maturing in more
than seven days if that would constitute more than 10% of its net
assets when taking into account the remaining days to maturity of
our existing repurchase agreements.
REVERSE REPURCHASE AGREEMENTS AND LEVERAGE We may enter into
reverse repurchase agreements with Federal Reserve member banks
and U.S. securities dealers from time to time. In a reverse
repurchase transaction we sell securities and simultaneously
agree to repurchase them at a price which reflects an agreed-upon
rate of interest. We will use the proceeds of reverse repurchase
agreements to make other investments which either mature or are
under an agreement to resell at a date simultaneous with or prior
to the expiration of the reverse repurchase agreement. The Fund
may utilize reverse repurchase agreements only if the interest
income to be earned from the investment proceeds of the
transaction is greater than the interest expense of the reverse
repurchase transaction.
Reverse repurchase agreements are a form of leverage which
increases the opportunity for gain and the risk of loss for a
given change in market value. In addition the gains or losses
will cause the net asset value of the Funds' shares to rise or
fall faster than would otherwise be the case. There may also be a
risk of delay in the recovery of the underlying securities if the
opposite party has financial difficulties.
A Fund's obligations under all borrowings, including reverse
repurchase agreements, will not exceed one-third of the Fund's
net assets.
WHEN-ISSUED SECURITIES We may sometimes purchase new issues of
securities on a when-issued basis. The price of when-issued
securities is established at the time the commitment to purchase
is made. Delivery of and payment for these securities typically
occur 15 to 45 days after the commitment to purchase. The market
price of the securities at the time of delivery may be higher or
lower than those contracted for on the when-issued security, and
there is some risk the transaction may not be consummated. We
maintain a
28
<PAGE>
segregated account for each of the Funds consisting of cash or
high-quality liquid debt securities in an amount at least equal
to the when-issued commitments.
SHORT SALES We may sell securities which we do not own, or intend
to deliver to the buyer if we do own ("sell short") if, at the
time of the short sale, we own or have the right to acquire an
equal amount of the security being sold short at no additional
cost. These transactions allow us to hedge against price
fluctuations by locking in a sale price for securities we do not
wish to sell immediately.
We may make a short sale when we want to sell a security we
own at a current attractive price. This allows us to postpone a
gain or loss for federal income tax purposes and to satisfy
certain tests applicable to regulated investment companies under
the Code. We will make short sales only if the total amount of
all short sales does not exceed 10% of the Fund. This limitation
can be changed at any time.
MUNICIPAL OBLIGATIONS We may invest in municipal obligations for
any Fund, except for the Transamerica Premier Index Fund. This
includes the equity Funds as part of their cash management
techniques. In addition to the usual risks associated with
investing for income, the value of municipal obligations can be
affected by changes in the actual or perceived credit quality.
The credit quality of a municipal obligation can be affected by,
among other factors: a) the financial condition of the issuer or
guarantor; b) the issuer's future borrowing plans and sources of
revenue; c) the economic feasibility of the revenue bond project
or general borrowing purpose; d) political or economic
developments in the region or jurisdiction where the security is
issued; and e) the liquidity of the security. Because municipal
obligations are generally traded over the counter, the liquidity
of a particular issue often depends on the willingness of dealers
to make a market in the security. The liquidity of some municipal
issues can be enhanced by demand features which enable us to
demand payment from the issuer or a financial intermediary on
short notice.
HIGH-YIELD ("JUNK") BONDS High-yield bonds (commonly called
"junk" bonds) are lower-rated bonds that involve higher current
income but are predominantly speculative because they present a
higher degree of credit risk. Credit risk is the risk that the
issuer of the bonds will not be able to make interest or
principal payment on time. If this happens, we would lose some of
our income, and we could expect a decline in the market value of
the securities affected. We need to carefully analyze the
financial condition of companies issuing junk bonds. The prices
of junk bonds tend to be more reflective of prevailing economic
and industry conditions, issuers' unique financial situations,
and the bonds' coupon than to small changes in the level of
interest rates. But during an economic downturn or a period of
rising interest rates, highly leveraged companies can have
trouble making principal and interest payments, meeting projected
business goals, and obtaining additional financing.
We may also invest in unrated debt securities. Unrated debt,
while not necessarily of lower quality than rated securities, may
not have as broad a market. Because of the size and perceived
demand for the issue, among other factors, certain municipalities
may decide not to pay the cost of getting a rating
29
<PAGE>
for their bonds. We analyze the creditworthiness of the issuer,
as well as any financial institution or other party responsible
for payments on the security, to determine whether to purchase
unrated municipal bonds.
Unrated debt securities will be included in the 35% limit on
non-investment grade debt of the applicable Funds, unless we deem
such securities to be the equivalent of investment grade
securities. See "Summary of Bond Ratings" on page _____ and the
Statement of Additional Information for a description of bond
rating categories.
FOREIGN SECURITIES We may invest in foreign securities for each
of the Funds, except the Transamerica Premier Index Fund and the
Transamerica Premier Short-Intermediate Government Fund. Foreign
equity investments for the Transamerica Premier Equity Fund and
the Transamerica Premier Balanced Fund are limited to the
purchase of American depositary receipts ("ADR's") evidencing
ownership of the underlying foreign securities. ADR's are dollar-
denominated and are issued by domestic banks or securities firms
and traded in the U.S.
Investing in securities of foreign issuers involves
different, and sometimes greater, risks than investments in
securities of U.S. issuers. These include an increased risk of
adverse political and economic developments, and, with respect to
certain countries, the possibility of expropriation,
nationalization or confiscatory taxation or limitations on the
removal of the funds or other assets of a Fund. These risks are
discussed under "A Discussion About Risk" on page ____.
OPTIONS, FUTURES, AND OTHER DERIVATIVES We may use options,
futures, forward contracts, and swap transactions ("derivatives")
for each of the Funds. However, we do not currently use, nor
anticipate using, derivatives for the Transamerica Premier Cash
Reserve Fund. We may seek to protect a Fund against potential
unfavorable movements in interest rates or securities' prices by
investing in derivatives. If those markets do not move in the
direction we anticipate, we could suffer investment losses.
We may purchase and write call or put options on securities
or on indexes ("options"). We may also enter into interest rate
or index futures contracts for the purchase or sale of
instruments based on financial indexes ("futures contracts"),
options on futures contracts, forward contracts, and interest
rate swaps and swap-related products. We use these instruments
primarily to adjust a Fund's exposure to changing securities
prices, interest rates, or other factors that affect securities
values. This is an attempt to reduce the overall investment risk.
However, the Transamerica Premier Index Fund will use derivatives
as part of its strategy to match the S&P 500 Index.
Risks in the use of these derivatives include, in addition
to those referred to above: a) the risk that interest rates and
securities prices do not move in the directions being hedged
against, in which case the Fund has incurred the cost of the
derivative (either its purchase price or, by writing an option,
losing the opportunity to profit from increases in the value of
the securities covered) with no tangible benefit; b) imperfect
correlation between the price of derivatives and the movements of
the securities' prices or interest rates being hedged; c) the
possible absence of a liquid secondary market for any particular
derivative at any time; d) the potential loss if the counterparty
to the transaction does not perform as promised; and e) the
possible need to defer closing out certain positions to avoid
adverse tax consequences.
30
<PAGE>
More information on derivatives is contained in the
Statement of Additional Information.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES We may invest in
mortgage-backed and asset-backed securities. The Transamerica
Premier Bond Fund and the Transamerica Premier Short-Intermediate
Government Fund are more likely to invest in such securities than
the other Funds. Mortgage-backed and asset-backed securities are
generally pools of many individual mortgages or other loans. Part
of the cash flow of these securities is from the early payoff of
some of the underlying loans. The specific amount and timing of
such prepayments is difficult to predict, creating "prepayment
risk." For example, prepayments on Government National Mortgage
Association ("GNMA's") are more likely to increase during periods
of declining long-term interest rates because borrowers tend to
refinance when interest rates drop. In the event of very high
prepayments, we may be required to invest these proceeds at a
lower interest rate, causing us to earn less than if the
prepayments had not occurred. Prepayments are more likely to
decrease during periods of rising interest rates, causing the
expected average life to become longer. This variability of
prepayments will tend to limit price gains when interest rates
drop and to exaggerate price declines when interest rates rise.
ZERO COUPON BONDS We may invest in zero coupon bonds and strips.
Zero coupon bonds do not make regular interest payments. Instead,
they are sold at a discount from face value. A single lump sum
which represents both principal and interest is paid at maturity.
Strips are debt securities whose interest coupons are taken out
and traded separately after the securities are issued, but
otherwise are comparable to zero coupon bonds. The market value
of zero coupon bonds and strips generally is more sensitive to
interest rate fluctuations than interest-paying securities of
comparable term and quality.
ILLIQUID SECURITIES We may invest up to 15% of a Fund's net
assets in securities that are illiquid, except that the
Transamerica Premier Cash Reserve Fund may only invest 10%.
Securities are considered illiquid when there is no readily
available market or when they have legal or contractual
restrictions. Repurchase agreements which mature in more than
seven days are included as illiquid securities. It may be
difficult for us to sell these investments quickly for their fair
market value.
Certain restricted securities that are not registered for
sale to the general public but that can be resold to
institutional investors under Rule 144A may not be considered
illiquid. This is provided that a dealer or institutional trading
market exists. The institutional trading market is relatively
new. Liquidity of the Funds' investments could be impaired if
trading for these securities does not further develop or
declines. The Investment Adviser determines the liquidity of Rule
144A securities under guidelines approved by the Board.
VARIABLE RATE, FLOATING RATE, OR VARIABLE AMOUNT SECURITIES We
may invest in variable rate, floating rate, or variable amount
securities for each Fund, except for the Transamerica Premier
Equity Fund. These are short-term unsecured promissory notes
issued by corporations to
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<PAGE>
finance short-term credit needs. They are interest-bearing notes
on which the interest rate generally fluctuates on a scheduled
basis.
INVESTMENTS IN OTHER INVESTMENT COMPANIES We may invest up to 10%
of a Fund's total assets in the shares of other investment
companies, but only up to 5% of its assets in any one other
investment company. In addition, we cannot purchase more than 3%
of the securities of any one investment company for any Fund. We
intend to keep these investments to a minimum.
SHAREHOLDER SERVICES
- ------------------------------------------
HOW TO GET IN TOUCH WITH US
WHETHER YOU ARE A NEW INVESTOR, OR YOU ARE
A CURRENT SHAREHOLDER, YOU CAN CALL 1-800-
89-ASK-US TO OBTAIN INFORMATION ABOUT
YOUR ACCOUNT, OR TO INVEST IN ANY OF THE
TRANSAMERICA PREMIER FUNDS.
- ------------------------------------------
Our goal is to make your investment in our Funds, and the
ongoing account servicing, as simple as possible by offering the
following shareholder services:
. Simple application form with service representatives to assist
you.
. Purchases, exchanges and redemptions by phone.
. Purchases and redemptions by wire.
. Automatic Investment Plan - you designate an amount of $50 or
more to be automatically withdrawn from your checking, savings
or other bank account and deposited into the Fund you select.
. Automatic Exchange Plan - allows you to specify an amount to
be automatically withdrawn from one Fund and deposited into
another Fund on a regular basis, once or twice a month.
. Automatic Income Plan - you can receive automatic monthly
payments from your Fund account to your checking or savings
account.
. Automatic investment of dividends.
. Uniform Gifts to Minors (UGMA or UTMA).
. Transmission of redemption proceeds by electronic funds
transfer.
. Check writing - unless your account is for a Pension or
Retirement Savings Program, you can write checks for $250 or
more against your Transamerica Premier Cash Reserve Fund
account.
. Individual Retirement Account (IRA) - we will administer your
IRA or SEP.
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<PAGE>
[margin] MORE DETAILS ON THESE AND OTHER
SERVICES ARE IN THE NEXT SECTIONS.
The Company reserves the right to amend, suspend, or
discontinue offering any of these options at any time without
prior notice.
OPENING YOUR ACCOUNT
To open an account, complete the attached application and
send it to us with a check, money order, or wire for the amount
you want to invest. Mail the application to:
Transamerica Investors
PO Box [insert box number]
Boston, MA 02266-8520
If you need help in filling out your application, call one
of our customer service representatives at 1-800-89-ASK-US . We
will walk you through the application and help you understand
everything.
[margin] WHEN YOU SET UP AN IRA, YOU
ENJOY TAX-DEFERRED INVESTMENT EARNINGS.
YOU MAY WANT TO CONSOLIDATE SEVERAL IRAS
OR YOU MAY NEED TO INVEST A DISTRIBUTION
FROM A FORMER EMPLOYER'S PENSION PLAN.
IRA/SEP ACCOUNTS You can establish an Individual Retirement
Account ("IRA") or Simplified Employee Pension ("SEP") with
Transamerica Premier Funds. Contributions to an IRA or SEP may be
deductible from your taxable income, depending on your personal
tax situation. Please call 1-800-89-ASK-US for your IRA/SEP
application kit, or for additional information. The kit has
information on whether you qualify for deductible contributions
to an IRA.
If you are receiving a distribution from your pension plan,
or you would like to transfer your IRA account from another
financial institution, you can continue to get tax-deferred
growth by transferring these proceeds to your Transamerica
Premier Fund IRA. If you want to rollover distributions from your
pension plan to an IRA in one or more of the Funds, the money
must be paid directly by your pension plan administrator to
Transamerica Investors to avoid a 20% federal withholding tax.
See "What About Taxes?" on page ____.
There is an annual fee of $10 per Fund in which you own
shares for administering your IRA or SEP. This is limited to a
maximum annual fee of $36 per taxpayer identification number.
Alternatively, you can pay a one-time, non-refundable fee of $100
for all IRA/SEP accounts that are maintained under the same
taxpayer identification number. You may pay the fee to us,
otherwise we will deduct the annual fee ordinarily during
December of each year or at the time you fully redeem your shares
in a Fund, if before then. We will waive this fee if the value of
the shares in your IRA/SEP account is $5,000 or more when the fee
is due. The Company reserves the right to change the fee, but we
will notify you at least 30 days in advance of any change.
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<PAGE>
HOW TO BUY ADDITIONAL SHARES
YOU MAY BUY SHARES IN ONE OF FOUR WAYS:
1) BY MAIL Fill out an investment coupon from a previous
confirmation statement, or indicate on your check or a separate
piece of paper your name, address and account number, and mail it
to:
Transamerica Investors
PO Box 9232
Boston, MA 02205-9232
[margin] YOU HAVE FOUR OPTIONS WHEN IT
COMES TO INVESTING IN THE FUNDS - BY MAIL,
TELEPHONE, WIRE, OR WITH THE AUTOMATIC
INVESTMENT PLAN. THE AUTOMATIC
INVESTMENT PLAN AUTOMATICALLY TAKES
MONEY OUT OF YOUR BANK ACCOUNT AND
INVESTS IT INTO THE FUNDS OF YOUR CHOICE.
2) BY AUTOMATIC INVESTMENT PLAN You can make investments
automatically by electing this service in your application. It
will authorize us to take regular, automatic withdrawals from
your bank account. These periodic investments must be at least
$50 for each Fund in which you are automatically investing. You
can change the date or amount of your monthly investment, or
terminate the Automatic Investment Plan, at any time by letter or
telephone call (with prior authorization). Give us your request
at least 20 business days before the change is to become
effective. You may also be able to have investments automatically
deducted from:
(1) your paycheck at work;
(2) your savings account; or
(3) other sources of your choice.
Call 1-800-89-ASK-US for more information.
[margin] THE AUTOMATIC INVESTMENT PLAN
IS A GOOD WAY FOR YOU TO MAKE REGULAR,
SYSTEMATIC INVESTMENTS INTO YOUR FUNDS -
FOR EXAMPLE, $200 EVERY MONTH -
THROUGHOUT THE YEAR. IT GIVES YOU THE
CONVENIENCE AND DISCIPLINE OF SYSTEMATIC
INVESTING.
3) BY TELEPHONE If you elect the telephone purchasing service on
your application, you can make occasional electronic withdrawals
from your designated bank account by calling 1-800-89-ASK-US.
We take reasonable precautions to make sure that telephone
instructions are genuine. Precautions include requiring you to
positively identify yourself, tape recording the telephone
instructions, and providing
34
<PAGE>
written confirmations. We accept all telephone instructions we
reasonably believe to be accurate and genuine. Any losses arising
from communication errors are your responsibility. If reasonable
procedures are not used to confirm that instructions communicated
by telephone are genuine, the Company may be liable for any
losses due to unauthorized or fraudulent transactions.
[margin] WE TAKE REASONABLE STEPS TO
MAKE SURE YOUR TELEPHONE INSTRUCTIONS ARE
AUTHORIZED AND ACCURATE. WE RECORD ALL
PHONE CALLS AND SEND YOU CONFIRMATION OF
ALL TELEPHONE TRANSACTIONS. YOU ARE
RESPONSIBLE FOR THE ACCURACY OF PHONE
INSTRUCTIONS.
4) BY WIRE You can make your initial or subsequent investments in
the Funds by wire. Here's what you need to do:
(1) send us your application form (initial investment
only);
(2) call 1-800-89-ASK-US for a wire number;
(3) instruct your bank to wire money to State Street Bank,
ABA number 011000028, DDA number ___________ ; and
(4) specify on the wire:
a) "Transamerica Investors, Inc.;"
b) your Fund's account number, if you have one;
c) identify the Funds in which you would like to
purchase shares, and the amount to be allocated to
each Fund (e.g. $5,000 in the Transamerica Premier
Equity Fund and $4,000 in the Transamerica Premier
Bond Fund);
d) your name, your city and state; and
e) your wire number.
Wired money is considered received by us when we receive the
wire and all the required information listed above. If we receive
your telephone call and wire before the New York Stock Exchange
closes, usually 4:00 p.m. Eastern time, the money is credited
that same day if you have supplied us with all other needed
information.
MINIMUM INVESTMENT AMOUNTS The minimum initial investment in any
of the Funds is $1,000. The minimum is reduced to $250 if the
account is for a Pension or Retirement Savings Program or a
Uniform Gift to Minors or Uniform Transfer to Minors (UGMA/UTMA).
The minimum subsequent investment by check or telephone is $100.
The minimum initial and subsequent investments for the Automatic
Investment Plan or a group billing purchase program is $50 per
Fund. There is no minimum subsequent investment if your account
is for a Pension or Retirement Savings Program.
Your investment must be a specified dollar amount. We cannot
accept purchase requests specifying a certain price, date, or
number of shares; these investments will be returned. The price
you pay for your shares will be the next determined net asset
value after your purchase order is received. See "Share Price" on
page ___. The Company reserves the right to reject any
application or investment. There may be circumstances when the
Company will not accept new investments in one or more of the
Funds. If you have a securities dealer, bank, or other financial
institution handle your transactions with us you may be charged a
fee by them.
35
<PAGE>
HOW TO SELL SHARES
You can sell your shares to us (called redeeming) at any
time. You'll receive the net asset value next determined after we
receive your redemption request, assuming all requirements have
been met. Before redeeming, please read "When Share Price Is
Determined" on page __, and "Minimum Account Balances" on page
___.
[margin] YOU CAN SELL YOUR SHARES VIA ANY
OF FOUR WAYS: (1) BY MAIL; (2) BY PHONE;
(3) BY CHECK; OR (4) UNDER AN AUTOMATIC
INCOME PLAN.
YOU MAY SELL SHARES IN ONE OF FOUR WAYS:
1) BY MAIL Your written instructions to us to redeem shares can
be in any one of the following forms:
. By redemption form, available by calling 1-800-89-ASK-US;
. By letter; or
. By assignment form or other authorization granting power
with respect to your shares in one of the Funds.
Once mailed to us, your redemption request is irrevocable
and cannot be modified or canceled.
If the amount redeemed is over $50,000, all signatures must
be guaranteed. See "Signature Guarantee" on page___. The request
must be signed by each registered owner. All owners must sign the
request exactly as their names appear in the registration. For
example, if the owner's name appears in the registration as John
Michael Smith, he must sign that way and not as John M. Smith.
2) BY TELEPHONE If you have previously authorized telephone
directions in writing (e.g. in your application), you can redeem
your shares by calling 1-800-89-ASK-US . Be careful in calling,
since once made, your telephone request cannot be modified or
canceled.
You have several options for receiving your redemption:
. By check;
. By electronic transfer to your bank; or
. By wire transfer(minimum of $5,000).
If you call us before the close of the New York Stock
Exchange, usually 4:00 p.m. Eastern time, you will receive the
price determined as of the close of that business day. See "Share
Price" on page ____. Before calling, read " Points to Remember
When Redeeming" on page ____.
We take reasonable precautions to make sure that telephone
instructions are genuine. Precautions include requiring you to
positively identify yourself, tape recording the telephone
instructions, and providing written confirmations. We accept all
telephone instructions we reasonably believe to be accurate and
genuine. Any losses arising from communication errors are your
responsibility. If reasonable procedures are not used to confirm
36
<PAGE>
that instructions communicated by telephone are genuine, the
Company may be liable for any losses due to unauthorized or
fraudulent transactions. For detailed information on how
telephone transactions will operate, see the Statement of
Additional Information.
3) BY CHECK (Transamerica Premier Cash Reserve Fund only)
Redemptions can be made from the Transamerica Cash Reserve Fund
by check. To be eligible, you must have applied for the check
writing feature on your account application. The signature(s) you
designated must appear on the check for it to be honored. If you
close your account by check, we will send you any accrued
dividends by check. You can write an unlimited number of checks,
as long as each check is for $250 or more, and as long as the
Fund account balance does not drop below $500. See "Minimum
Account Balances" on page ____.
This option is not available for Pension or Retirement
Savings Program accounts (including IRA's), or any other account
controlled by a fiduciary.
[margin] IF YOU'RE INVESTED IN THE
TRANSAMERICA PREMIER CASH RESERVE FUND,
GETTING YOUR MONEY CAN BE AS EASY AS
WRITING A CHECK.
4) BY AUTOMATIC INCOME PLAN Under the Automatic Income Plan we
automatically redeem enough shares each month to provide you with
a check or automatic deposit to your bank account. The minimum is
$50 per Fund. Please tell us: a) when you want to be paid each
month; b) how much you want to be paid; and c) from which
Fund(s). To set up an Automatic Income Plan, call us at 1-800-89-
ASK-US.
If your monthly income payments exceed the dividends,
interest, and capital appreciation on your shares, the payments
will deplete your investment.
You can specify the Automatic Income Plan when you make your
first investment. If you sign up for the plan later, the request
for the Automatic Income Plan or any increase in payment amount
must be signed by all owners of your account.
[margin] IF YOU WANT TO RECEIVE A FLAT
AMOUNT EACH MONTH, USE THE AUTOMATIC
INCOME PLAN. WE WILL AUTOMATICALLY SELL
ENOUGH SHARES EVERY MONTH TO PROVIDE YOU
WITH AN INCOME PAYMENT. AMOUNTS PAID TO
YOU BY AUTOMATIC INCOME PLAN ARE NOT A
RETURN ON YOUR INVESTMENT. YOU MUST
REPORT ANY GAINS OR LOSSES ON YOUR INCOME
TAX RETURN. WE WILL PROVIDE INFORMATION TO
YOU CONCERNING ANY GAIN OR LOSS.
You can request us to send payments to an address other than
the address of record at the time of your first investment. After
that, a request to send payments to an address other than the
address of record must be signed by all owners of your account,
with their signatures guaranteed.
The Automatic Income Plan option can be terminated at any
time. If it is, we will notify you. You can terminate the Plan or
change the amount of the
37
<PAGE>
payments by writing or calling us. Termination or change will
become effective within 15 days after we receive your
instructions.
HOW LONG WILL IT TAKE? We will usually send your redemption
payment to you on the second business day after we receive your
request, but not later than seven days afterwards, assuming we
have all the information we need. If the information you provide
us is incomplete, we will contact you, but this may delay the
redemption.
The Company may postpone such payment if: (a) the New York
Stock Exchange is closed for other than usual weekends or
holidays, or trading on the New York Stock Exchange is
restricted; (b) an emergency exists as defined by the U.S.
Securities and Exchange Commission (the "Commission"), or the
Commission requires that trading be restricted; or (c) the
Commission permits a delay for the protection of investors.
When a redemption occurs shortly after a recent check
purchase, the redemption proceeds may be held beyond seven days
but only until the purchase check clears, which may take up to 15
days. If you anticipate redemptions soon after you purchase your
shares by check, you can avoid this delay by wiring your purchase
payment.
If you request a redemption check within 30 days of your
address change, you must send us your request in writing with a
signature guarantee. Keep your address current by writing or
calling in your new address to us as soon as possible.
POINTS TO REMEMBER WHEN REDEEMING
. All redemptions are made and the price is determined on the
day we receive all necessary documentation. See "When Share
Price Is Determined" on page ___.
. We cannot accept redemptions specifying a certain date or
price. We will return these requests.
. For redemptions greater than $250,000 the Company reserves the
right to give you marketable securities instead of cash. See
the Statement of Additional Information, or call us at 1-800-
89-ASK-US.
. Except for a transfer of redemption proceeds to the custodian
of a tax-qualified plan, we will make all payments to the
registered owner of the shares, unless you tell us otherwise.
We will mail all checks to the address of record, unless you
tell us otherwise.
. If the redemption request is made by a corporation,
partnership, trust, fiduciary, agent, or unincorporated
association, the individual signing the request must be
authorized. If the redemption is from an account under a
qualified pension plan, spousal consent may be required.
. A request to redeem shares in an IRA or 403(b) plan must be
accompanied by an IRS Form W4-P (pension income tax
withholding form, which we will provide) and a reason for
withdrawal. This is required by the IRS.
Please call us at 1-800-89-ASK-US or write to Transamerica
Investors, P.O. Box 9232, Boston, MA 02205-9232 for further
information.
HOW TO EXCHANGE SHARES
38
<PAGE>
BETWEEN FUNDS AND CLASSES If your investment needs change, you
can exchange shares in any Fund for shares of any other Fund
within the same class. Exchanges can be made in writing or by
telephone at any time by shareholders. The procedures relating to
exchanges in writing and by telephone are the same as for
purchases. Exchanges are available to any resident of any state
in which shares of the Fund are legally sold.
Exchanges between different classes of shares will be on the
basis of the relative net asset values of the respective shares
to be exchanged. You may be able to exchange your shares for
shares of a class having a different pricing structure if you are
no longer eligible to purchase shares of the original class due
to a change in your status. You will receive advance notice if
your shares must be exchanged for another class of shares.
[margin] EXCHANGING SHARES AMONG
FUNDS WITH DIFFERENT INVESTMENT OBJECTIVES
GIVES YOU THE OPPORTUNITY TO KEEP YOUR
GOALS IN SIGHT AS YOUR LIFESTYLE AND NEEDS
CHANGE. FOR EXAMPLE, AS YOU GET CLOSER TO
RETIREMENT AGE, YOU MAY WANT TO MOVE
SOME OF YOUR INVESTMENT DOLLARS INTO MORE
CONSERVATIVE FUNDS TO BETTER PROTECT YOUR
NEST EGG.
BY AUTOMATIC EXCHANGE PLAN You can make automatic share exchanges
once or twice a month. You can request the service in writing to
us. Your request must be signed by all registered owners of the
account. Call 1-800-89-ASK-US for information.
POINTS TO REMEMBER WHEN MAKING EXCHANGES Make sure you understand
the investment objective of the Fund into which you are
exchanging shares. The exchange service is not designed to give
shareholders the opportunity to "time the market." It gives you a
convenient way to change the balance between the accounts so that
it more closely matches your overall investment objectives and
risk tolerance level.
. You can make an unlimited number of exchanges between the
Funds. However, unless you are using the Automatic Exchange
Plan, further exchanges may be suspended for the remainder of
any calendar year during which you make more than four
exchanges involving a single Fund. This limitation is designed
to keep each Fund's asset base stable and to reduce its
administrative expenses.
. An exchange is treated as a sale of shares from one Fund and
the purchase of shares in another Fund. Exchanges are taxable
events. See "What About Taxes?" on page ____.
. Exchanges into or out of the Funds are made at the next
determined net asset value per share after we receive all
necessary information for the exchange.
. Exchanges are accepted only if the ownership registrations of
both accounts are identical.
. The Company reserves the right to reject any exchange request
and to modify or terminate the exchange option at any time.
[margin] EXCHANGES ARE TREATED THE SAME
AS PURCHASES AND REDEMPTIONS. THERE ARE
39
<PAGE>
TAX CONSIDERATIONS YOU SHOULD DISCUSS WITH
YOUR TAX ADVISER.
OTHER INVESTOR REQUIREMENTS AND SERVICES
TAX IDENTIFICATION NUMBER You must furnish your taxpayer
identification number and state whether or not you are subject to
back-up withholding for prior under-reporting. If you don't
furnish your tax I.D. number, redemptions or exchanges of shares,
as well as dividends and capital gains distributions, will be
subject to federal withholding tax.
CHANGING YOUR ADDRESS To change the address on your account,
please call us at 1-800-89-ASK-US, or send us a written
notification signed by all registered owners of your account.
Include the name of your Fund(s), the account number(s), the
name(s) on the account and both the old and new addresses. Within
the first 30 days after an address change, telephone redemptions
are permissible only if the redemption proceeds are wired or
electronically transferred. See "How to Sell Shares" on page
____.
SIGNATURE GUARANTEE When a signature guarantee is required, e.g.
when the redemption amount is more than $50,000, the signature of
each owner of record must be guaranteed by a bank or trust
company (or savings bank, savings and loan association, or a
member of a national stock exchange). This is required to comply
with general stock transfer rules. You must obtain a written
guarantee that states "Signature(s) Guaranteed" and is signed in
the name of the guarantor by an authorized person. If you have
any questions, call 1-800-89-ASK-US.
Our policy to waive the signature guarantee for amounts of
$50,000 or less can be amended or discontinued at any time. A
signature guarantee may be required with regard to any particular
redemption transaction.
[margin] THERE IS A LOT OF ADMINISTRATIVE
WORK IN MAINTAINING YOUR ACCOUNT SO WE
REQUIRE THAT YOU KEEP AT LEAST $500 IN EACH
FUND ACCOUNT. OF COURSE, YOU'RE INVESTING
FOR THE LONG HAUL, SO IT'S TO YOUR ADVANTAGE
TO KEEP BUILDING UP YOUR ACCOUNTS. THIS
GIVES YOUR MONEY A CHANCE TO REALLY WORK
FOR YOU.
MINIMUM ACCOUNT BALANCES You must maintain a minimum balance of
$500 in each Fund in which you own shares. If a Fund's value
falls below $500 as a result of your action, we will notify you.
You will have 30 days to increase your balance to or above the
minimum. If you do not increase your balance, we will redeem your
shares and pay the value to you.
This minimum does not apply if you are actively contributing
to that Fund through an Automatic Investment Plan. If your Fund
is for a Pension or
40
<PAGE>
Retirement Savings Program, we will exchange the balance to
another Fund of your choice.
HOW YOU WILL GET ONGOING INFORMATION ABOUT THE FUNDS We will
send you a consolidated, quarterly statement of your account
showing all transactions since the beginning of the current
quarter. You can request a statement of your account activity at
any time. Also, each time you invest, redeem, transfer or
exchange shares, we will send you a confirmation of the
transaction.
We will send you an annual report that includes audited
financial statements for the fiscal year. It will include a list
of securities in each Fund on that date. We will also send you a
semi-annual report that includes unaudited financial statements
for the previous six months. It will also include a list of
securities in each Fund on that date.
We will send you a new prospectus each year. The Statement
of Additional Information is also revised each year. We will send
this to you only if you request it.
[margin] WE'LL KEEP YOU INFORMED ABOUT
HOW YOUR INVESTMENTS ARE DOING WITH
QUARTERLY STATEMENTS AND SEMI-ANNUAL AND
ANNUAL REPORTS.
HOW TO TRANSFER YOUR SHARES TO ANOTHER PERSON You can transfer
ownership of your shares to another person or organization, or
change the name on an account, by sending us written
instructions. The request must be signed by all registered owners
of your account. To change the name on an account, the shares
must be transferred to a new account. If the amount transferred
exceeds $50,000, the request must include a signature guarantee.
See "Signature Guarantee" on page _____. This option is not
available for Pension or Retirement Savings Program. Please call
us at 1-800-89-ASK-US for additional information.
DIVIDENDS AND CAPITAL GAINS
We distribute substantially all of the Funds' net investment
income in the form of dividends to you. The following table shows
how often we pay dividends on each Fund.
<TABLE>
<CAPTION>
=========================================================
FUND DIVIDEND PAID
=========================================================
<S> <C>
Transamerica Premier Equity Fund Quarterly
---------------------------------------------------------
Transamerica Premier Index Fund Quarterly
---------------------------------------------------------
Transamerica Premier Bond Fund Monthly
---------------------------------------------------------
Transamerica Premier Balanced Fund Quarterly
---------------------------------------------------------
Transamerica Premier Short-Intermediate Monthly
Government Fund
---------------------------------------------------------
Transamerica Premier Cash Reserve Fund Monthly
=========================================================
</TABLE>
41
<PAGE>
Although we pay dividends monthly on the Transamerica
Premier Cash Reserve Fund, dividends are determined daily. You
may purchase shares of the Transamerica Premier Cash Reserve Fund
by wiring federal funds to State Street Bank, the Custodian. If
you notify us by calling 1-800-89-ASK-US by 1:00 p.m. (Eastern
Standard Time "EST") and State Street receives your wired funds
by 4:00 p.m. (EST), your purchase will be effective immediately,
and you will begin to earn dividends on that business day.
Federal funds wires will be accepted only on a day on which the
Federal Reserve is open. To redeem shares of the Transamerica
Premier Cash Reserve Fund by federal funds wire, call 1-800-89-
ASK-US. We will wire funds to you the next business day on which
the Federal Reserve is open. You will earn dividends on the day
you request redemption by telephone.
We distribute net capital gains, if any, on all of the Funds
annually.
[margin] YOU'RE INVESTING IN THE FUNDS
BECAUSE YOU WANT YOUR MONEY TO GROW.
THE INVESTMENT INCOME GENERATED BY A
FUND IS DISTRIBUTED TO YOU EITHER AS
DIVIDENDS OR CAPITAL GAINS, OR BOTH. YOU
CAN CHOOSE TO REINVEST OR TAKE CASH,
ACCORDING TO THE THREE OPTIONS DESCRIBED IN
THIS SECTION.
You can select from among the following distribution
options:
. REINVESTED You can have all of your dividends and
capital gains distributions reinvested in additional
shares of the same or any other Fund. Unless you choose
one of the other options, we will select this option for
you automatically;
. CASH & REINVESTED You can choose to have either your
dividends or your capital gains paid in cash and the
other will be reinvested in additional shares in the same
or any other Fund; or
. ALL CASH You can choose to have your dividends and
capital gains distributions paid in cash.
We make distributions for each Fund on a per share basis to
the shareholders of record as of the distribution date of that
Fund. We do this regardless of how long the shares have been
held. That means if you buy shares just before or on a record
date, you will pay the full price for the shares and then you may
receive a portion of the price back as a taxable distribution.
WHAT ABOUT TAXES?
FEDERAL TAXES* Dividends paid by a Fund from net investment
income, the excess of net short-term capital gain over net long-
term capital loss, and original issue discount or certain market
discount income will be taxable to shareholders as ordinary
income. Distributions paid by a Fund from the excess of net long-
term capital gain over net short-term capital loss will be
taxable as long-term capital gains regardless of how long the
shareholders have held their shares. These tax consequences will
apply regardless of whether distributions are received in cash or
reinvested in shares. A portion of the dividends paid to
corporate shareholders may qualify for the corporate
42
<PAGE>
dividends-received deduction to the extent the Fund earns
qualifying dividends. We will notify you after each calendar year
of the amount and character of distributions you received from
each Fund for federal tax purposes.
[margin] GENERALLY, WHETHER OR NOT YOU
CHOOSE TO REINVEST YOUR DIVIDENDS AND
CAPITAL GAINS OR TAKE THEM IN CASH, THEY
ARE CONSIDERED BY THE IRS TO BE TAXABLE
INCOME.
For IRA's and pension plans, dividends and capital gains are
reinvested and not taxed until you receive a qualified
---
distribution from your IRA or pension plan.
You need to consider the tax implications of buying shares
immediately prior to a distribution. Investors who purchase
shares shortly before the record date for a distribution will pay
a per share price that includes the value of the anticipated
distribution. You will be taxed when you receive the distribution
even though the distribution represents a return of a portion of
the purchase price. You may want to call us at 1-800-89-ASK-US
before your purchase. We'll tell you if a distribution is due.
Redemptions and exchanges of shares are taxable events which
may represent a gain or a loss for the shareholder.
Individuals and certain other classes of shareholders may be
subject to backup withholding of federal income tax on
distributions, redemptions and exchanges if they fail to furnish
their correct taxpayer identification number. Individuals,
corporations and other shareholders that are not U.S. persons
under the Code are subject to different tax rules. They may be
subject to nonresident alien withholding on amounts considered
ordinary dividends from the Fund.
When you sign your account application, you will be asked to
certify that your social security or taxpayer identification
number is correct. You will also be asked to certify that you are
not subject to backup withholding for failure to report income to
the Internal Revenue Service.
PENSION AND RETIREMENT SAVINGS PROGRAMS The tax rules applicable
to participants and beneficiaries in Pension and Retirement
Savings Programs vary according to the type of plan and the terms
and conditions of the plan. In general, distributions from these
plans are taxed as ordinary income. Special favorable tax
treatment may be available for certain types of contributions and
distributions. Adverse tax consequences may result from
contributions in excess of specified limits:
(1) distributions prior to age 59 1/2 (subject to certain
exceptions);
(2) distributions that do not conform to specified
commencement and minimum distribution rules;
(3) aggregate distributions in excess of a specified annual
amount; and
(4) in other specified circumstances.
You should consult a qualified tax advisor for more information.
[margin] THERE ARE SPECIAL TAX
CONSIDERATIONS IF YOU ARE TAKING A CASH
DISTRIBUTION FROM A PENSION PLAN AND
ROLLING IT OVER TO AN IRA IN ONE OF THE
FUNDS. YOU NEED TO DISCUSS THIS WITH YOUR
TAX ADVISER.
43
<PAGE>
OTHER TAXES In addition to federal taxes, you may be subject to
state and local taxes on payments received from us. Depending on
the state tax rules pertaining to a shareholder, a portion of the
dividends paid by a Fund that come from direct obligations of the
U.S. Treasury and certain agencies may be exempt from state and
local taxes. Check with your own tax adviser regarding specific
questions as to federal, state and local taxes.
*For each taxable year, we intend to qualify each Fund as a
regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). Qualifying
regulated investment companies distributing substantially all of
their ordinary income and capital gains are not subject to
federal income or excise tax on any net investment income and net
realized capital gains distributed to shareholders. However, the
shareholders (you) are subject to tax on these distributions.
SHARE PRICE
HOW SHARE PRICE IS DETERMINED We value Fund securities, primarily
traded on a domestic securities exchange or NASDAQ, at the last
sale price on that exchange on the day the valuation is made. We
take price information on listed securities from the exchange
where the security is primarily traded. If no sale is reported,
we use the mean of the latest bid and asked prices. We generally
price securities traded over-the-counter the same way. When
market quotations are not readily available, we value securities
and other assets at fair value as determined in good faith by the
Board.
[margin] THE PRICE OF YOUR SHARES IS
REFERRED TO AS THEIR NET ASSET VALUE. WE
CALCULATE THE NET ASSET VALUE EACH DAY THE
NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN.
We will value all securities held by the Transamerica
Premier Cash Reserve Fund, and any short-term investments of the
other Funds with maturities of 60 days or less at the time of
purchase, on the basis of amortized cost when the Board
determines that amortized cost is fair value. Amortized cost
involves valuing an investment at its cost and a constant
amortization to maturity of any discount or premium, regardless
of the effect of assuming movements in interest rates. For more
information, see the Statement of Additional Information.
WHEN SHARE PRICE IS DETERMINED The price of your shares is their
net asset value. We determine the net asset value by calculating
the total value of the Fund's assets, deducting total
liabilities, and dividing the result by the number of shares
outstanding. Except for the Transamerica Premier Cash Reserve
Fund, we determine the net asset value only on days that the New
York Stock Exchange (the "Exchange") is open. We determine the
net asset value of the Transamerica Premier Cash Reserve Fund
only on days that the Federal Reserve is open.
44
<PAGE>
[margin] WHEN YOU BUY OR SELL SHARES,
YOU GET THE SHARE PRICE THAT WE DETERMINE
AT THE CLOSE OF THE EXCHANGE ON THE DAY WE
RECEIVE YOUR REQUEST. IF WE RECEIVE YOUR
REQUEST AFTER THE CLOSE OF THE EXCHANGE,
YOU GET THE SHARE PRICE AT THE CLOSE OF THE
FOLLOWING DAY.
If we receive your investment or redemption request before
the close of business on the Exchange, usually 4:00 p.m. Eastern
time, your share price for that transaction will be the price we
determine at the close of the Exchange that day. When investment
and redemption requests are received after the Exchange is
closed, we use the share price at the close of the Exchange the
next day the Exchange is open. We consider investment and
redemption requests by telephone to be received at the time of
your telephone call, assuming you've given us all required
information.
We consider purchase payments to be received only when your
check, wire, or automatic investment funds are received by us
along with all required information. We consider wired funds to
be received on the day they are deposited in the Company's bank
account. If you call us with wire instructions before the
Exchange closes, we usually deposit the money that day.
WHERE TO FIND INFORMATION ABOUT SHARE PRICE You can get the
current net asset values of your Funds by calling us at 1-800-89-
ASK-US. The net asset value of each Fund may also be published
in leading newspapers daily, once its net assets reach a certain
amount.
INVESTMENT ADVISER AND ADMINISTRATOR
INVESTMENT ADVISER SERVICES The Investment Adviser is responsible
for making investment decisions for the Funds. The Investment
Adviser is also responsible for the selection of brokers and
dealers to execute transactions for each Fund. Some of these
brokers or dealers may be affiliated persons of the Company, the
Investment Adviser, Administrator, or the Distributor. Since it
is our policy to seek the best price and execution for each
transaction, the Investment Adviser may give consideration to
brokers and dealers who provide us with statistical information
and other services in addition to transaction services.
Additional information about the selection of brokers and dealers
is provided in the Statement of Additional Information.
Trading decisions for each of the Funds described in this
Prospectus are made by a team of expert managers and analysts
headed by a team leader. The team leader is primarily responsible
for the day-to-day decisions related to their Fund. They are
supported by the entire group of managers and analysts. The team
leader of any one Fund may be on another Fund team. The
45
<PAGE>
transactions and performance of the Funds are reviewed
continuously by the Investment Adviser's senior officers.
Here's a listing and brief biography of the team leaders for
each of the Funds:
. TRANSAMERICA PREMIER EQUITY FUND Glen E. Bickerstaff. Vice
President, Senior Fund Manager and Director of Research,
Transamerica Investment Services. B.S., University of Southern
California, 1980. Vice President, Fish & Lederer Investment
Counsel, 1986-1987. Vice President, Pacific Century Advisers,
1980-1986.
. TRANSAMERICA PREMIER INDEX FUND Christopher J. Bonavico.
Equity Trader & Analyst, Transamerica Investment Services.
M.B.A., New York University, 1993. B.S., University of
Delaware, 1987. Equity Research Analyst, Salomon Brothers,
1989-1993. Business Analyst, Planning & Financial Management,
Chase Manhattan Bank, 1988-1989.
. TRANSAMERICA PREMIER BOND FUND Sharon K. Kilmer, C.F.A. Vice
President and Senior Fund Manager, Transamerica Investment
Services. Member of the Los Angeles Society of Financial
Analysts. M.B.A., University of Southern California, 1982.
B.A., University of Southern California (Magna Cum Laude, Phi
Beta Kappa), 1980. Joined Transamerica in 1982.
. TRANSAMERICA PREMIER BALANCED FUND BONDS Sharon K. Kilmer,
C.F.A. (see above).
STOCKS Jeffrey S. Van Harte, C.F.A. Vice President and Senior
Fund Manager, Transamerica Investment Services. Member of San
Francisco Society of Financial Analysts. B.A., California
State University at Fullerton, 1980. Securities Analyst and
Trader, Transamerica Investment Services, 1980-1984.
. TRANSAMERICA PREMIER SHORT-INTERMEDIATE GOVERNMENT FUND AND
TRANSAMERICA PREMIER CASH RESERVE FUND Kevin J. Hickam, C.F.A.
Assistant Vice President and Fund Manager, Transamerica
Investment Services. Member of Los Angeles Society of
Financial Analysts. M.B.A. Cornell University, 1989. B.S.,
California State University at Chico, 1984. Senior Accountant,
Santa Clara Savings, 1984-1987.
ADVISER FEE For its services to the Funds, the Investment Adviser
receives an Adviser Fee. This fee is based on an annual
percentage of the average daily net assets of each Fund. It is
accrued daily, and paid monthly.
The annual fee percentages for the Transamerica Premier
Equity Fund are .85% on the first $1 billion of assets. This
reduces to: .82% on the next $1 billion; and finally .80% on
assets over $2 billion. The corresponding fee percentages for the
Transamerica Premier Index Fund are .30%, .30%, and .30%
respectively. The
46
<PAGE>
corresponding fee percentages for the Transamerica Premier Bond
Fund are .60%, .57%, and .55%, respectively. The corresponding
fee percentages for the Transamerica Premier Balanced Fund are
.75%, .72%, and .70%, respectively. The corresponding fee
percentages for the Transamerica Premier Short-Intermediate
Government Fund are .55%, .52%, and .50%, respectively. The
corresponding fee percentages for the Transamerica Premier Cash
Reserve Fund are .35%, .35%, and .35%, respectively.
The Investment Adviser will reduce the Adviser Fee each Fund
must pay if the fee exceeds any state-imposed restrictive expense
limitations. This excludes permissible items, such as brokerage
commissions, Rule 12b-1 payments, interest, taxes and litigation
expenses. The Investment Adviser may waive some or all of these
fees from time to time at its discretion.
ADMINISTRATOR SERVICES The Investment Adviser pays part of the
Adviser Fee to the Administrator. The Administrator provides
office space for the Company and pays the salaries, fees and
expenses of all Company officers and those directors affiliated
with Transamerica Corporation and not already paid by the
Investment Adviser. Each Fund pays all of its expenses not
assumed by the Administrator. This includes transfer agent and
custodian fees and expenses, legal and auditing fees, printing
costs of reports to shareholders, registration fees and expenses,
12b-1 fees, and fees and expenses of directors unaffiliated with
Transamerica Corporation.
The Administrator may from time to time reimburse the Funds
for some or all of their operating expenses, including 12b-1
fees. Such reimbursements will increase a Fund's return. This is
intended to make the Funds more competitive. This practice may be
terminated at any time.
GENERAL INFORMATION
TRANSAMERICA INVESTORS, INC. Transamerica Investors, Inc. was
organized as a Maryland corporation on February 22, 1995. The
Company is registered with the Securities and Exchange Commission
under the 1940 Act as an open-end, diversified management
investment company of the series type. Each Fund constitutes a
separate series. Each series has two classes of shares, Investor
Shares and Adviser Shares. The fiscal year-end of each of the
Funds is December 31.
The Company is authorized to issue and sell multiple classes
of shares for each of the Funds. The Company reserves the right
to issue additional classes of shares in the future without the
consent of shareholders, and can allocate any remaining
unclassified shares or reallocate any unissued classified shares.
Except for the differences noted below and elsewhere in this
Prospectus, each share of a Fund has equal dividend, redemption
and liquidation rights with other shares of the Funds and when
issued, is fully paid and nonassessable. Each share of each class
represents an identical legal interest in the same investments of
a Fund, except that Adviser Shares have higher distribution fees.
Each class has certain other expenses related solely to that
class. Each class will have exclusive voting rights under the
12b-1 distribution plan. In the event that a special meeting of
shareholders is called, separate votes are taken by each class
only if a matter affects, or requires the vote of, just that
class. Although the legal rights of holders of each class of
47
<PAGE>
shares are identical, it is likely that the difference in
expenses will result in different net asset values and dividends.
The classes may have different exchange privileges.
As a Maryland corporation, the Company is not required to
hold regular annual meetings of shareholders. Ordinarily there
will be no shareholder meetings, unless requested by shareholders
holding 10% or more of the outstanding shares, or unless required
by the 1940 Act or Maryland law. You are entitled to cast one
vote for each share you own of each Fund. At a special
shareholders meeting, if one is called, issues that affect all
the Funds in substantially the same way will be voted on by all
shareholders, without regard to the Funds. Issues that do not
affect a Fund will not be voted on by that Fund. Issues that
affect all Funds, but in which their interests are not
substantially the same, will be voted on separately by each Fund.
CUSTODIAN AND TRANSFER AGENT Under a Custodian Agreement, State
Street Bank and Trust Company ("State Street"), 225 Franklin
Street, Boston, Massachusetts 02110, holds all securities and
cash assets of the Funds, provides recordkeeping services, and
serves as the Funds' custodian. State Street is authorized to
deposit securities in securities depositories or to use services
of sub-custodians.
Under a Transfer Agency Agreement, Boston Financial Data
Services ("BFDS"), Two Heritage Drive, Quincy, Massachusetts
02171, serves as the Funds' transfer agent. The transfer agent is
responsible for: a) opening and maintaining your account; b)
reporting information to you about your account; c) paying you
dividends and capital gains; and d) handling your requests for
exchanges, transfers and redemptions.
[sidebar] BOSTON FINANCIAL DATA SERVICES,
ONE OF THE BIGGEST AND MOST EXPERIENCED
TRANSFER AGENTS IN THE BUSINESS, HANDLES ALL
YOUR ACCOUNT TRANSACTIONS AND PROVIDES
REPORTS TO YOU ABOUT YOUR ACCOUNT. FOR
INFORMATION ABOUT YOUR ACCOUNT, CALL THE
TRANSAMERICA INVESTORS TEAM AT 1-800-89-
ASK-US.
DISTRIBUTOR Transamerica Securities Sales Corporation ("TSSC") is
the principal underwriter and distributor of the shares of each
of the Funds. TSSC will distribute Investor Shares.
TSSC is a wholly-owned subsidiary of Transamerica Insurance
Corporation of California, which is a wholly-owned subsidiary of
Transamerica Corporation. TSSC is registered with the Securities
and Exchange Commission as a broker-dealer. TSSC is also a member
of the National Association of Securities Dealers, Inc.
DISTRIBUTION PLAN Each Fund makes payments to TSSC according to a
plan adopted to meet the requirements of Rule 12b-1 under the
Investment Company Act of 1940. These fees accrue daily and are
based on an annual percentage of the daily average net value of
the assets represented by each class of shares.
The 12b-1 plan of distribution and related distribution
contracts require the Funds to pay distribution and service fees
to TSSC as compensation for its activities, not as reimbursement
for specific expenses. If TSSC's expenses are
48
<PAGE>
more than its fees for any Fund, the Fund will not have to pay
more than those fees. If TSSC's expenses are less than the fees,
it will keep the excess. The Company will pay the distribution
and service fees to TSSC until the distribution contracts are
terminated or not renewed. In that event, TSSC's expenses over
and above any fees through the termination date will be TSSC's
sole responsibility and not the obligation of the Company. The
Transamerica Investors, Inc. Board of Directors (the "Board")
will annually review the distribution plan and contracts and
TSSC's expenses for each class of shares.
For the Investor Shares class, there is an annual 12b-1
distribution fee of .25% of the average daily net assets of the
Investor shares of each Fund, except the Transamerica Premier
Index and Cash Reserve Funds. The distribution fee for the Index
and Cash Reserve Funds is .10%. This fee covers such expenses as
preparation, printing and mailing of the Prospectus and Statement
of Additional Information, as well as sales literature and other
media advertising, and related expenses. It can also be used to
compensate sales personnel involved with selling the Funds.
From time to time, and for one or more Funds within each
class of Shares, the Distributor may waive all or any portion of
these fees at its discretion. All or any portion of these fees
may be paid by the Administrator for the Company, at the
discretion of the Administrator.
PERFORMANCE INFORMATION The Company may publish performance
information about the Funds. Fund performance usually will be
shown either as cumulative total return or average periodic total
return compared with other mutual funds by public ranking
services, such as Lipper Analytical Services, Inc. Cumulative
total return is the actual performance over a stated period of
time. Average annual total return is the hypothetical return,
compounded annually, that would have produced the same cumulative
return if the Fund's performance had been constant over the
entire period. Each Fund's total return shows its overall dollar
or percentage change in value. This includes changes in the share
price and reinvestment of dividends and capital gains.
The performance of a Fund can also be measured in terms of
yield. Each Fund's yield shows the rate of income the Fund earns
on its investments as a percentage of the Fund's share price.
A Fund can also separate its cumulative and average annual
total returns into income results and capital gains or losses.
Each Fund can quote its total returns on a before-tax or after-
tax basis.
The performance information which may be published for the
Funds is historical. It is not intended to represent or guarantee
future results. The value of your Fund shares can be more or less
than their original cost when they are redeemed. For more
information, see the Statement of Additional Information.
MATERIAL LEGAL PROCEEDINGS There are no material legal
proceedings to which the Company is subject, or to which the
Investment Adviser, the Administrator, or the Distributor are
subject which are likely to have a material adverse effect on
their ability to perform their obligations to the Company, or on
the Company itself.
SUMMARY OF BOND RATINGS Following is a summary of the grade
indicators used by two of the most prominent, independent rating
agencies (Moody's Investors Service, Inc. and Standard & Poor's
Corporation) to rate the quality of bonds. The first four
categories are generally considered
49
<PAGE>
investment quality bonds. Those below that level are of lower
quality, commonly referred to as "junk bonds."
<TABLE>
<CAPTION>
STANDARD &
----------
INVESTMENT GRADE MOODY'S POOR'S
---------------- ------- ------
<S> <C> <C>
Highest quality Aaa AAA
High quality Aa AA
Upper medium A A
Medium, speculative features Baa BBB
LOWER QUALITY
-------------
Moderately speculative Ba BB
Speculative B B
Very speculative Caa CCC
Very high risk Ca CC
Highest risk, may not be
paying interest C C
In arrears or default C D
</TABLE>
For more detailed information on bond ratings, including
gradations within each category of quality, see the Statement of
Additional Information.
PENSION AND RETIREMENT SAVINGS PROGRAMS Following is a listing of
Pension and Retirement Savings Programs.
. 401(a), 401(k), profit sharing, or money purchase pension
plans (including KEOGH/HR 10 Plans) designed to benefit
employees of corporations, partnerships, and sole proprietors.
. Section 403(b)(7) (Tax-Sheltered Annuity) Plans for employees
of educational organizations or other qualifying, tax exempt
organizations.
. Individual Retirement Account ("IRA"), or comparable program,
for individuals and Simplified Employee Pension ("SEP") Plans
for employers (including sole proprietors) and their
employees.
. Section 457 deferred compensation plans for employees of state
governments and tax exempt organizations.
. Employers' non-qualified plans or savings programs, that do
not qualify for federal tax advantages.
. Other retirement plans or savings programs allowed by the
Board.
[sidebar] TRANSAMERICA PREMIER FUNDS
PROVIDE A GOOD SELECTION OF FUNDS FOR YOUR
RETIREMENT OR SAVINGS NEEDS.
50
<PAGE>
TRANSAMERICA
PREMIER FUNDS
INVESTOR SHARES
NEW INVESTORS
For information on Transamerica Premier Funds
call toll-free:
1-800-89-ASK-US
and
Mail your application to:
Transamerica Investors
P.O. Box 9232
Boston, MA 02205-9232
CURRENT SHAREHOLDERS
For information on net asset values, make telephone
transactions, etc. call toll-free:
1-800-89-ASK-US
or
Send your purchase, redemption and other requests to:
Transamerica Investors
P.O. Box 9232
Boston, MA 02205-9232
<PAGE>
TRANSAMERICA PREMIER FUNDS
ADVISER SHARES
Supplement Dated September 22, 1995
to Adviser Shares Prospectus Dated September 22, 1995
The following information supplements, and should be read in conjunction
with, the Prospectus to which this endorsement is attached.
The following information supplements the section titled "Fund Expenses."
As an additional subsidy to introduce the Funds, beginning on the date of
commencement of Fund sales, the Investment Adviser will waive the Adviser Fee
and the Administrator will assume any other operating expenses for each Fund,
other than certain extraordinary or non-recurring expenses, which together
exceed the Total Operating Expenses shown below for each Fund until the earlier
of December 31, 1995 or such time as the Fund's assets exceed $50 million.
The estimated operating expenses for the period from the date of
commencement of Fund sales until December 31, 1995 are as follows:
ESTIMATED FUND OPERATING EXPENSES TO 12/31/95
(AS A PERCENT OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
=======================================================================================
TOTAL
OPERATING
OTHER EXPENSES
ADVISER EXPENSES AFTER WAIVER
FEE AFTER 12b-1 AFTER REIM- AND REIM-
FUND WAIVER FEE BURSEMENT BURSEMENT
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Premier Equity 0.00 % 1.00 % 0.00 % 1.00 %
- ---------------------------------------------------------------------------------------
Premier Index 0.00 % 1.00 % 0.15 % 1.15 %
- ---------------------------------------------------------------------------------------
Premier Bond 0.00 % 1.00 % 0.00 % 1.00 %
- ---------------------------------------------------------------------------------------
Premier Balanced 0.00 % 1.00 % 0.00 % 1.00 %
- ---------------------------------------------------------------------------------------
Premier Short-Term Government 0.00 % 1.00 % 0.00 % 1.00 %
- ---------------------------------------------------------------------------------------
Premier Cash Reserve 0.00 % 0.25 % 0.15 % 0.40 %
=======================================================================================
</TABLE>
The estimated annual operating expenses, assuming the above figures until
------
December 31, 1995 and the figures currently in the Prospectus after December 31,
1995 are as follows:
ESTIMATED ANNUAL FUND OPERATING EXPENSES
(AS A PERCENT OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
=======================================================================================
TOTAL
OPERATING
OTHER EXPENSES
ADVISER EXPENSES AFTER WAIVER
FEE AFTER 12b-1 AFTER REIM- AND REIM-
FUND WAIVER FEE BURSEMENT BURSEMENT
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Premier Equity 0.64 % 1.00 % 0.30 % 1.94 %
- ---------------------------------------------------------------------------------------
Premier Index 0.22 % 1.00 % 0.27 % 1.49 %
- ---------------------------------------------------------------------------------------
Premier Bond 0.45 % 1.00 % 0.34 % 1.79 %
- ---------------------------------------------------------------------------------------
Premier Balanced 0.56 % 1.00 % 0.34 % 1.90 %
- ---------------------------------------------------------------------------------------
Premier Short-Term Government 0.37 % 1.00 % 0.08 % 1.45 %
- ---------------------------------------------------------------------------------------
Premier Cash Reserve 0.26 % 0.25 % 0.23 % 0.74 %
=======================================================================================
</TABLE>
PEO2A-0995
<PAGE>
TRANSAMERICA PREMIER FUNDS
ADVISER SHARES
Supplement Dated September 22, 1995
to Adviser Shares Prospectus Dated September 22, 1995
For Residents of the State of Texas
The following information supplements, and should be read in conjunction
with, the Prospectus to which this endorsement is attached.
The following information supplements the section titled "Fund Expenses."
If you are eligible to buy the Adviser Shares, you are also eligible to
buy the Investor Shares. The 12b-1 fee for the Adviser Shares is higher
than the 12b-1 fee for the Investor Shares. Therefore, by buying the
Investor Shares you will pay less in fees each year, than if you purchase
the Adviser Shares.
However, we cannot provide you with the guidance of a registered broker-
dealer. The extra 12b-1 fee charged for the Adviser Shares is to
compensate the broker through whom it is sold for investment advice to
the investor.
PEO3-0995
<PAGE>
PROSPECTUS: SEPTEMBER 22, 1995
TRANSAMERICA
PREMIER FUNDS
ADVISER SHARES
YOUR GUIDE This guide (the "Prospectus") will provide you with helpful insights
and details about the Transamerica Premier Funds. It is intended to give you
what you need to know before investing. Please read it carefully and save it for
future reference.
TRANSAMERICA INVESTORS Transamerica Investors, Inc. (also referred to as the
Company or we, us, or our) is an open-end, management investment company. We are
a mutual fund company that offers a number of portfolios, known as the
Transamerica Premier Funds. Each Fund is managed separately and has its own
investment objective, strategies and policies designed to meet different goals.
Each Fund and each class of each Fund has its own levels of expenses and
charges. The minimum investment is $1,000 per Fund, or less in some instances.
See "Minimum Investment Amounts" on page_____.
THE PREMIER FUNDS
. Transamerica Premier Equity Fund
. Transamerica Premier Index Fund
. Transamerica Premier Bond Fund
. Transamerica Premier Balanced Fund
. Transamerica Premier Short-Intermediate Government Fund
. Transamerica Premier Cash Reserve Fund
FOR ADDITIONAL INFORMATION AND ASSISTANCE For additional details about the Funds
contact your broker, or you can call 1-800-89-ASK-US (1-800 892-7587), or write
to Transamerica Investors, P.O. Box 9232, Boston, Massachusetts 02205-9232. A
free Statement of Additional Information (the "SAI"), which has been filed with
the Securities and Exchange Commission, is available by calling the above
number. The SAI is a part of this Prospectus by reference.
THESE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE UNITED STATES GOVERNMENT.
THERE CAN BE NO ASSURANCE THAT THE TRANSAMERICA PREMIER CASH RESERVE FUND WILL
BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
LIKE ALL MUTUAL FUND SHARES, 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.
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C>
THE PREMIER FUNDS AT A GLANCE......................
[margin] HERE'S WHERE YOU CAN GET A
QUICK OVERVIEW OF THE FUNDS'
INVESTMENT OBJECTIVES, STRATEGIES,
AND POLICIES, AND SEE IF YOU'RE THE
TYPE OF INVESTOR WHO MIGHT BE
INTERESTED IN THESE FUNDS.
FUND EXPENSES......................................
THE MANAGEMENT TEAM................................
INVESTMENT ADVISER'S PERFORMANCE...................
[margin] READ THIS SECTION FOR
INFORMATION ABOUT THE INVESTMENT
ADVISER, INCLUDING SOME INVESTMENT
PERFORMANCE NUMBERS YOU CAN USE TO
COMPARE WITH OTHER FUNDS.
TRANSAMERICA PREMIER FUNDS IN DETAIL ..............
A GENERAL DISCUSSION ABOUT RISK....................
[margin] YOUR TOLERANCE FOR RISK IS
ONE MAJOR PART OF YOUR INVESTMENT
DECISION. YOU SHOULD BE AWARE OF
SEVERAL TYPES OF RISK RELATED TO
THE FUNDS, WHICH ARE EXPLAINED IN
THIS SECTION.
INVESTMENT PROCEDURES AND RISK
CONSIDERATIONS FOR THE FUNDS..................
SHAREHOLDER SERVICES...............................
HOW TO BUY ADDITIONAL SHARES.......................
[margin] The minimum investment is
$1,000 per Fund, or less in some
instances.
HOW TO SELL SHARES.................................
HOW TO EXCHANGE SHARES.............................
OTHER INVESTOR REQUIREMENTS AND SERVICES...........
DIVIDENDS AND CAPITAL GAINS........................
[margin] ONE OF THE ADVANTAGES OF
INVESTING IN MUTUAL FUNDS IS THE
POTENTIAL TO RECEIVE DIVIDENDS
AND/OR CAPITAL GAINS.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
WHAT ABOUT TAXES?....................................
SHARE PRICE..........................................
INVESTMENT ADVISER AND ADMINISTRATOR.................
GENERAL INFORMATION..................................
</TABLE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE OR
OTHER JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN
SUCH STATE OR OTHER JURISDICTION.
THE PREMIER FUNDS AT A GLANCE
The Transamerica Premier Funds consist of six diversified
Funds with different investment objectives and risk levels, which
invest in a range of securities types. There is no guarantee that
these investment objectives will be met. These short descriptions
will give you a summary of each Fund. A more detailed description
for each Fund is in "Transamerica Premier Funds in Detail" on
page ____. For information on the risks associated with
investment in these Funds, see "Investment Procedures and Risk
Considerations for the Funds" on page ____.
TRANSAMERICA PREMIER EQUITY FUND
. We seek to maximize long-term growth for this Fund.
. We invest primarily in common stocks of growth companies that
we consider to be premier companies that are undervalued in
the stock market.
. The Fund is intended for investors who wish to participate
primarily in the common stock markets. Investors should have
the perspective, patience, and financial ability to take on
above-average stock market volatility in a focused pursuit of
long-term capital growth.
TRANSAMERICA PREMIER INDEX FUND
. We seek to track the performance of the Standard & Poor's 500
Composite Stock Price Index, also known as the S&P 500 Index,
for this Fund.
. We attempt to reproduce the overall investment characteristics
of the S&P 500 Index by using a combination of management
techniques. Our stock purchases reflect the S&P 500 Index, but
we make no attempt to forecast general market movements.
. The Fund is intended for investors who wish to participate in
the overall growth of the economy, as reflected by the
domestic stock market. Investors should have the perspective,
patience, and financial ability to take on average stock
market volatility in pursuit of long-term capital growth.
TRANSAMERICA PREMIER BOND FUND
3
<PAGE>
. We seek to achieve a high total return(income plus capital
changes) from fixed income securities consistent with
preservation of principal for this Fund.
. We invest primarily in a diversified selection of investment
grade corporate and government bonds and mortgage-backed
securities.
. The Fund is intended for investors who wish to invest in a
diversified portfolio of bonds. Investors should have the
perspective, patience, and financial ability to take on above-
average bond price volatility in pursuit of a high total
return produced by income from longer-term securities and
capital gains from undervalued bonds.
TRANSAMERICA PREMIER BALANCED FUND
. We seek to achieve long-term capital growth and current income
with a secondary objective of capital preservation, by
balancing investments among stocks, bonds, and cash (or cash
equivalents) for this Fund.
. We invest in a diversified selection of common stocks, bonds,
and money market instruments and other short-term debt
securities.
. The Fund is intended for investors who wish to participate in
both the equity and debt markets, but who wish to leave the
allocation of the balance between them to professional
management. Investors should have the perspective, patience,
and financial ability to take on average market volatility in
pursuit of long-term total return that balances capital growth
and current income.
TRANSAMERICA PREMIER SHORT-INTERMEDIATE GOVERNMENT FUND
. We seek to achieve a high level of current income with the
security of investing in government securities for this Fund.
. We generally invest in securities issued or guaranteed by the
U.S. Government, its agencies or instrumentalities, or its
political subdivisions. The Fund will have a dollar-weighted
average maturity of more than two years, but less than five
years.
. The Fund is intended for investors who wish to earn higher
income than is available from money market funds. Investors
should have the perspective and patience to accept the
additional price fluctuation for the advantage of earning
generally higher returns than is available from money market
funds.
TRANSAMERICA PREMIER CASH RESERVE FUND
. We seek to maximize current income from money market
securities consistent with liquidity and preservation of
principal for this Fund.
. This is a money market fund. We invest primarily in high
quality U.S. dollar-denominated money market instruments with
remaining maturities of 13 months or less.
. The Fund provides a low risk, relatively low cost way to
maximize current income through high quality money market
securities that offer stability of principal and liquidity.
This Fund may be a suitable investment for temporary or
defensive purposes and may also be appropriate as part of an
overall long-term investment strategy.
4
<PAGE>
SHARES OF THESE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY BANK, AND ARE NOT
INSURED BY THE FDIC OR ANY OTHER GOVERNMENTAL AGENCY. THESE FUNDS INVOLVE
INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
FUND EXPENSES
Each Fund bears the costs of its operations. These costs may
include, but are not limited to, fees for investment adviser,
distribution, shareholder service, independent directors,
professional and brokerage services, security pricing services,
custody, transfer agency, recordkeeping services, pension plan
services, insurance, federal and state registration, amortized
expenses, taxes, and any extraordinary expenses.
Each Fund is available in two classes of shares: Investor
Shares and Adviser Shares. Each class of shares will be charged
separately for expenses related solely to that class. Each class
of shares may have different sales charges and other expenses,
which may affect performance. Fund expenses that are not class-
specific will be allocated between the classes based on the net
assets of each class. This Prospectus describes only Adviser
Shares.
ADVISER SHARES Adviser Shares are available only for Pension and
Retirement Savings Programs and institutional investors, and only
from registered representatives of Transamerica Financial
Resources, Inc. ("TFR"), or other registered broker-dealers
authorized by the Board of Directors and Transamerica Securities
Sales Corporation ("TSSC"). Individual investors can buy this
class of shares only for an Individual Retirement Account ("IRA")
or through a program sponsored by their employer, that is offered
by a registered representative (i.e. broker). For a listing of
applicable Pension and Retirement Savings Programs, see "Pension
and Retirement Savings Programs" on page ____.
Investor Shares are sold directly to individuals, companies,
Pension and Retirement Savings Programs, and other institutional
investors from TSSC, the Distributor. For a free prospectus about
Investor Shares, call 1-800-89-ASK-US.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
==============================================================================================
<S> <C> <C> <C> <C> <C> <C>
SHORT-
------
PREMIER FUNDS INTERM CASH
------
TRANSACTION EXPENSES EQUITY INDEX BOND BALANCED GOVERN RESERVE
==============================================================================================
Sales Charge on Purchases/1/ None None None None None None
- ----------------------------------------------------------------------------------------------
Redemption Fee None None None None None None
- ----------------------------------------------------------------------------------------------
Sales Charge on Reinvested Dividends None None None None None None
- ----------------------------------------------------------------------------------------------
Exchange Fee None None None None None None
- ----------------------------------------------------------------------------------------------
Contingent Deferred Sales Charge None None None None None None
==============================================================================================
</TABLE>
5
<PAGE>
[margin] SHAREHOLDER TRANSACTION
EXPENSES ARE CHARGES YOU PAY AT THE
TIME YOU BUY OR SELL SHARES IN A
FUND.
ESTIMATED ANNUAL FUND OPERATING EXPENSES
(as a percent of average net assets)
<TABLE>
<CAPTION>
================================================================================================
TOTAL
OPERATING
OTHER EXPENSES
ADVISER EXPENSES AFTER WAIVER
FEE 12B-1 AFTER REIM- AND REIM-
FUND AFTER WAIVER/2/ FEE/3/ BURSEMENT/4/ BURSEMENT/5/
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Premier Equity 0.85 % 1.00% 0.40% 2.25 %
- ------------------------------------------------------------------------------------------------
Premier Index 0.30 % 1.00% 0.30% 1.60 %
- ------------------------------------------------------------------------------------------------
Premier Bond 0.60 % 1.00% 0.45% 2.05 %
- ------------------------------------------------------------------------------------------------
Premier Balanced 0.75 % 1.00% 0.45% 2.20 %
- ------------------------------------------------------------------------------------------------
Premier Short-Intermediate Government 0.50 % 1.00% 0.10% 1.60 %
- ------------------------------------------------------------------------------------------------
Premier Cash Reserve 0.35 % 0.25% 0.25% 0.85 %
================================================================================================
</TABLE>
The preceding tables summarize actual transaction expenses and anticipated
operating expenses. The purpose of the tables is to assist you in understanding
the varying costs and expenses you will bear directly or indirectly. Without any
fee waiver by the Investment Adviser or expense reimbursement by the
Administrator, the estimated total operating expenses for the first year of the
Funds' operation, based on $50 million of assets in each Fund, are 4.01 %, 3.67
%, 3.85 %, 3.91 %, 3.65 % and 2.77 %, respectively.
EXAMPLE
Using the above tables of transaction expenses and operating expenses/6/, you
would pay the following expenses based on a $1,000 investment. The expenses
shown assume a 5% annual return. The expenses are the same whether or not you
redeem your shares at the end of each time period. We may assess an annual fee
against accounts used as IRA's or SEP's. For more information on this fee, see
"IRA/SEP Accounts" on page _____ .
<TABLE>
<CAPTION>
=========================================================
FUND 1 YEAR 3 YEARS
=========================================================
<S> <C> <C>
Premier Equity $23 $70
- ---------------------------------------------------------
Premier Index $16 $50
- ---------------------------------------------------------
Premier Bond $21 $64
- ---------------------------------------------------------
Premier Balanced $22 $69
- ---------------------------------------------------------
Premier Short-Intermediate Government $16 $50
- ---------------------------------------------------------
Premier Cash Reserve $ 9 $27
=========================================================
</TABLE>
[margin] ANNUAL FUND OPERATING
EXPENSES ARE PAID AT A DAILY RATE
OUT OF THE
6
<PAGE>
FUND'S ASSETS. WE CALCULATE THE
SHARE PRICE AND ANY DIVIDENDS
AFTER THESE EXPENSES ARE PAID.
THE INFORMATION CONTAINED IN THE ABOVE EXAMPLES SHOULD NOT BE CONSIDERED A
REPRESENTATION OF FUTURE EXPENSES. THE ACTUAL EXPENSES MAY BE MORE OR LESS THAN
THOSE SHOWN.
1. Although there is no sales charge, there is a 12b-1 fee. Over a long period
of time, the total amount of 12b-1 fees paid may exceed the amount of another
fund's sales charges.
2. See "Adviser Fee" on page ____.
3. 12b-1 fees are asset-based charges to compensate brokers and other sales
people. They also cover costs of advertising and marketing the Funds. The 12b-1
fee includes a service fee to compensate sales people for expenses in providing
ongoing shareholder information and advice and related expenses. For more
information on 12b-1 fees, see "Distribution Plan" on page ____.
4. "Other Expenses" are those incurred after any reimbursements to the Fund by
the Administrator. See "The Management Team" on page ____. Other expenses
include expenses not covered by the adviser fee or the 12b-1 fee. See
"Distribution Plan" on page ____. This can include fees and expenses
attributable solely to a particular class of shares, such as those for transfer
agent, administrative personnel, and pension plan services, preparing,
printing, mailing and distributing materials to shareholders of a particular
class; state and federal registration fees; legal and accounting fees;
directors' fees and expenses incurred as a result of issues relating solely to a
class; and fees and payments for specific class services including account
maintenance, dividend disbursing or subaccounting services; or administration of
a dividend reinvestment, systematic investment or withdrawal plan.
5. Total operating expenses include adviser fees, 12b-1 fees, and other
expenses that a Fund incurs. The Investment Adviser has agreed to waive their
Adviser Fee and the Administrator has agreed to assume any other operating
expenses for each Fund , other than certain extraordinary or non-recurring
expenses, which together exceed a specified percentage of the average daily net
assets of that Fund until the earlier of October 1, 1996 or such time as the
Fund's assets exceed $50 million. The specified percentages are 2.25 % for the
Premier Equity Fund, 1.60 % for the Premier Index Fund, 2.05 % for the Premier
Bond Fund, 2.20 % for the Premier Balanced Fund, 1.60 % for the Premier Short-
Intermediate Government Fund, and 0.85 % for the Premier Cash Reserve Fund. The
Administrator may, from time to time, assume additional expenses. Fee waivers
and expense assumption arrangements, which may be terminated at any time without
notice, will increase a Fund's yield.
6. The expenses in the example assume no fees for IRA or SEP accounts.
THE MANAGEMENT TEAM
Responsibility for the management and supervision of the
Company and its Funds rests with the Board of Directors of
Transamerica Investors, Inc. (the "Board"). The Investment
Adviser and the Administrator are subject to the direction of the
Board.
The Funds' Investment Adviser is Transamerica Investment
Services, Inc. (the "Investment Adviser"), 1150 S. Olive Street,
Los Angeles, California 90015. The Investment Adviser's duties
include, but are not limited to: (1) supervising and managing the
investments of each Fund and directing the purchase and sale of
its investments; and (2) ensuring that investments follow the
investment objective, strategies, and policies and comply with
government
7
<PAGE>
regulations. For more information on Fund management, see
"Investment Adviser and Administrator Services" on page ____.
The Funds' Administrator is Transamerica Occidental Life
Insurance Company (the "Administrator"), 1150 S. Olive Street,
Los Angeles, California 90015. The Administrator's duties
include, but are not limited to: (1) providing the Funds with
administrative and clerical services, including the maintenance
of the Funds' books and records; (2) registering the Fund shares
with the Securities and Exchange Commission (the "SEC") and with
those states and other jurisdictions where its shares are offered
or sold and arranging periodic updating of the Funds' prospectus;
(3) providing proxy materials and reports to Fund shareholders
and the SEC; and (4) providing the Funds with adequate office
space and all necessary office equipment and services.
Transamerica Occidental Life Insurance Company is a wholly
owned subsidiary of Transamerica Insurance Corporation of
California. Both Transamerica Insurance Corporation of California
and Transamerica Investment Services, Inc. are wholly owned
subsidiaries of Transamerica Corporation, 600 Montgomery Street,
San Francisco, California 94111, one of the nation's largest
financial services companies.
INVESTMENT ADVISER'S PERFORMANCE
Because Transamerica Investors, Inc. is a new mutual fund
company, established in 1995, there is no past performance
information available for the Premier Funds. However, the
Investment Adviser, Transamerica Investment Services, Inc., has
been managing segregated investment accounts (or "separate
accounts") for pension clients of Transamerica Corporation's
affiliate companies for over ten years. The Investment Adviser's
performance in managing these investments was a key factor in our
decision to offer mutual funds to the public. This performance is
illustrated in the tables and graphs that follow.
[margin] THE PERFORMANCE FIGURES
SHOWN HERE ARE FOR FIVE INVESTMENT
FUNDS WHICH HAVE THE SAME
INVESTMENT ADVISER AND USE THE SAME
BASIC INVESTMENT STRATEGIES AS THE
CORRESPONDING PREMIER FUNDS. THIS
DEMONSTRATES THE INVESTMENT
ADVISER'S INVESTMENT TRACK
RECORD.
Five of the Funds described in this Prospectus have
substantially the same investment objectives and policies and use
the same investment strategies and techniques as the similarly
named, but unrelated, separate accounts managed by the Investment
Adviser. However, there can be no assurance that their
performance will be the same. The Funds may have total assets
which will be more or less than the total assets in the separate
accounts. The Investment Adviser believes that asset size is not
a significant factor in the Funds' ability to achieve their
investment objectives.
For comparison purposes, the five separate accounts match up
to the Premier Funds as follows:
8
<PAGE>
<TABLE>
<CAPTION>
SEPARATE ACCOUNTS PREMIER FUNDS
----------------- -------------
<S> <C>
Equity Separate Account Transamerica Premier Equity Fund
Equity Index Separate Account Transamerica Premier Index Fund
Bond Separate Account Transamerica Premier Bond Fund
Balanced Separate Account Transamerica Premier Balanced Fund
Cash Management Separate Account Transamerica Premier Cash Reserve Fund
</TABLE>
The following table shows how the separate accounts' annualized performance
compares to recognized industry indexes over the last one-year, three-year, and
five-year periods.
SEPARATE ACCOUNT PERFORMANCE*
<TABLE>
<CAPTION>
===================================================================================
SINCE
SEPARATE ACCOUNT OR INDEX 1 YEAR 3 YEARS 5 YEARS INCEPTION**
===================================================================================
<S> <C> <C> <C> <C>
Equity Separate Account 44.02% 26.38% 23.84% 20.69%
- -----------------------------------------------------------------------------------
S&P 500 Index 26.07% 13.26% 12.09% 10.51%
- -----------------------------------------------------------------------------------
Equity Index Separate Account 25.45% 12.62% 11.46% 13.47%
- -----------------------------------------------------------------------------------
S&P 500 Index 26.07% 13.26% 12.09% 13.72%
- -----------------------------------------------------------------------------------
Bond Separate Account 15.80% 10.13% 11.54% 13.13%
- -----------------------------------------------------------------------------------
Lehman Brothers Government/Corporate 12.77% 7.93% 9.61% 10.44%
Index
- -----------------------------------------------------------------------------------
Balanced Separate Account 37.54% - - - - 17.38%
- -----------------------------------------------------------------------------------
60% S&P 500 Index and 40% Lehman 20.75% - - - - 9.57%
Brothers Government/Corporate Index
- ----------------------------------------------------------------------------------
Cash Management Separate Account 5.00% 3.56% 4.44% 6.94%
- ----------------------------------------------------------------------------------
IBC/Donoghue First Tier Index 4.95% 3.51% 4.37% 6.88%
- ----------------------------------------------------------------------------------
</TABLE>
* Figures are as of 6/30/95
** Inception dates: Equity - 10/1/87; Equity Index - 10/1/86; Bond -
5/1/83; Balanced - 4/1/93; Cash Management - 1/3/82
- - Prior to separate account inception
The Investment Adviser has had a history of successfully
investing in the three basic investment categories: equity, bond,
and money markets. Below are graphs of the three separate
accounts representing those categories, showing their performance
since inception compared with the performance of recognized
industry indexes for each investment category.
Rates of return shown are calculated using a time-weighted
total rate of return with each period linked to create the long
term rates of return. Results for periods longer than one year
are annualized. This method was used for each separate account
and will also be used for each of the Funds. Beginning on October
1, 1992 the separate account values were calculated daily and
cash flows were daily. Prior to that date, separate account
valuations and cash flows were monthly.
9
<PAGE>
The following graph shows that $1,000 invested in the Equity
Separate Account at its inception on October 1, 1987 would have
grown to about $4,293 as of June 30, 1995. This is equivalent to
a 20.69% return per year. By comparison $1,000 invested at the
same time in S&P 500 Index securities would have grown to only
about $2,169. The S&P 500 Index is a selection of 500 common
stocks designed to be a benchmark for the equity market in
general.
[GRAPH APPEARS HERE]
10
<PAGE>
The following graph shows that $1,000 invested in the Bond
Separate Account at its inception on May 1, 1983 would have grown
to about $4,487 as of June 30, 1995. This is equivalent to a
13.13% return per year. By comparison $1,000 invested at the same
time in Lehman Brothers Government/ Corporate Index securities
would have grown to only about $3,348. The Lehman Brothers
Government/Corporate Index is a mixture of both corporate and
government bonds with maturities of 10 years or longer that are
rated investment grade or higher by Moody's or Standard &
Poor's.
[GRAPH APPEARS HERE]
11
<PAGE>
The following graph shows that $1,000 invested in the Cash
Manage- ment Separate Account at its inception on January 3, 1982
would have grown to about $2,417 as of June 30, 1995. This is
equivalent to a 6.94% return per year. And $1,000 invested at the
same time in IBC/Donoghue First Tier Index securities would have
grown to about $2,399. The IBC/Donoghue First Tier Index is a
composite of taxable money market funds that meet the SEC's
definition of first tier securities.
[GRAPH APPEARS HERE]
Performance for the separate accounts is shown after reduction
for investment management and administrative charges. The
industry indexes shown in the above graphs are used for
comparison purposes only. They are unmanaged indexes that have no
management fees or expense charges, and they are not available
for investment. Performance figures are based on historical
earnings. They are not intended to indicate future
performance.
As you can see, the separate accounts have good long-term
performance records compared with the indexes. Keep in mind the
Premier Funds' performance may differ from the separate accounts'
performance. Some reasons for this difference are timing of
purchases and sales, availability of cash for new investments,
brokerage commissions, and diversification of securities. It's
possible that by using different performance-determining methods
than we've used here, the results could vary. You should not rely
on this performance data when deciding whether to invest in
a
12
<PAGE>
particular Premier Fund. Past performance of the separate
accounts is no guarantee of future results for the Funds.
TRANSAMERICA PREMIER FUNDS IN DETAIL
FUND OBJECTIVES, STRATEGIES AND POLICIES The investment
objectives, strategies, and policies of each Fund are described
below. There is also a section for each Fund giving some points
to consider when investing in that Fund's shares. The "Some
Points to Consider When Investing" section is designed to
suggest circumstances for investing in that Fund, and give you a
better understanding of the Fund.
FUND RISKS The "Investment Procedures and Risk Considerations
for the Funds" section on page ____ details specific risks of the
types of securities in which the Funds invest.
TRANSAMERICA PREMIER EQUITY FUND
INVESTMENT OBJECTIVE We seek to maximize long-term growth for
this Fund.
INVESTMENT STRATEGIES AND POLICIES We invest primarily in common
stocks of growth companies that we consider to be premier
companies that are undervalued in the stock market. We believe
premier companies have: managements that demonstrate their
outstanding capabilities through a combination of superior track
records and well-defined plans for the future; low cost
proprietary products; dominance in market share or specialized
market niches; strong earnings and cash flows to finance future
growth; or shareholder orientation by increasing dividends, stock
repurchases, and strategic acquisitions.
[margin] FOR THE TRANSAMERICA
PREMIER EQUITY FUND, WE GENERALLY
FOCUS ON GROWTH STOCKS OF WHAT WE
CONSIDER TO BE PREMIER COMPANIES.
We also select companies for their potential for growth
based upon trends in the U.S. economy. Some major trends have
included: a) the aging of baby boomers; b) the proliferation of
communication and information technologies; c) the shift toward
financial assets rather than real estate or other tangible
assets; and d) the continuing increase in U.S. productivity.
We focus on growth stocks for this Fund. We will generally
invest at least 65% of the Fund's assets in common stocks. We may
also invest in preferred stocks, warrants, and bonds convertible
into common stocks. When the Investment Adviser determines that
market conditions warrant, the Fund may invest without limit in
cash and cash equivalents for temporary defensive purposes. It is
not
13
<PAGE>
expected to be used routinely. As part of the management of cash
and cash equivalents and to help maintain liquidity, we may
purchase and sell the same kind of money market and other short-
term instruments and debt securities as we do for the
Transamerica Premier Cash Reserve Fund. See "Transamerica Premier
Cash Reserve Fund" on page ____ .
We may buy foreign securities if they meet the same criteria
described above for the Fund's investments in general. We may
invest as much as 20% of its assets in foreign securities. At
times the Fund may have no foreign investments. Foreign
securities we purchase will be those traded on the U.S. exchanges
as American depositary receipts ("ADR's"). ADR's are registered
stocks of foreign companies which trade on U.S. stock exchanges.
SOME POINTS TO CONSIDER WHEN INVESTING Since we invest primarily
in common stocks, our investments are subject to stock market
price volatility. Price volatility means that stock prices can go
up or down due to a variety of economic and market conditions.
[margin] STOCK PRICES GO UP AND
DOWN, ESPECIALLY OVER A SHORT-TERM
HORIZON. SO IF YOU INVEST IN THE
TRANSAMERICA PREMIER EQUITY FUND
YOU SHOULD BE WILLING TO ACCEPT
THESE KINDS OF PRICE SWINGS WHILE
FOCUSING ON THE LONG-TERM
INVESTMENT OBJECTIVE.
However, we attempt to lessen price volatility by focusing
on the potential for each prospective holding (a "bottom up"
approach) rather than the economic and business cycle (a "top
down" approach). The Fund is constructed one stock at a time.
Each company passes through our research process and in our
opinion stands on its own merits as a viable investment. Our
proprietary fundamental research is designed to identify
companies with potential for improvement in profitability and
acceleration of growth. We believe a rising stock market will
tend to provide significant opportunities for these fundamental
improvements to be reflected in stock prices. We believe these
stocks to have stable inherent value under most circumstances and
tend to be better protected in a general declining market.
The Fund is intended for investors who have the perspective,
patience, and financial ability to take on above-average stock
market volatility in a focused pursuit of long-term capital
growth. Because of the uncertainty associated with common stock
investments, the Fund is intended to be a long-term investment.
TRANSAMERICA PREMIER INDEX FUND
INVESTMENT OBJECTIVE We seek to track the performance of the
Standard & Poor's 500 Composite Stock Price Index, also known as
the S&P 500 Index (the "Index"), for this Fund.
INVESTMENT STRATEGIES AND POLICIES To achieve the Fund's
objective, we use a combination of management techniques. We
purchase common stocks, S&P 500 Stock Index futures, S&P 500
Stock Index options, and short-term instruments in varying
proportions. For common stocks, investment
14
<PAGE>
decisions are based solely on the market proportions of
securities which are included in the Index. The only exception is
that Transamerica Corporation common stock will not be purchased.
Our stock purchases reflect the Index, but we make no attempt to
forecast general market movements.
[margin] THE TRANSAMERICA PREMIER
INDEX FUND IS A EASY WAY FOR YOU TO
INVEST IN THE OVERALL STOCK MARKET
SINCE THE FUND WILL TRACK THE 500
STOCKS IN THE S&P 500.
The Index is an unmanaged index which assumes reinvestment
of dividends and is generally considered representative of U.S.
large capitalization stocks. The Index is composed of 500 common
stocks of large-capitalization companies that are chosen by
Standard and Poor's Corporation on a statistical basis. The
inclusion of a stock in the Index in no way implies that Standard
& Poor's Corporation believes the stock to be an attractive
investment. The 500 stocks, most of which trade on the New York
Stock Exchange, represent approximately 70% of the market value
of all U.S. common stocks. Each stock in the Index is weighted by
its market value.
Because of the market value weighting, the 50 largest
companies in the Index currently account for approximately 50% of
the Index. Typically, companies included in the Index are the
largest and most dominant firms in their respective industries.
As of June 30, 1995, the five companies with the largest
weighting in the Index were: General Electric (2.4%), Exxon
Corporation (2.2%), AT&T Corporation (2.1%), Coca Cola (2.0%),
and Royal Dutch Petroleum (1.6%). The Investment Adviser
routinely compares the Fund's composition to the Index and
rebalances the Fund as required.
We may invest in instruments, other than common stocks,
whose return depends on stock market prices. They include S&P 500
Stock Index futures contracts, options on the Index, options on
futures contracts, and debt securities. These are derivative
securities whose returns are linked to the returns of the S&P 500
Index. These investments are made primarily to help the Fund
track the total return of the Index. The use of S&P 500 Index
derivatives allows the Fund to achieve close correlation with the
Index on a cost-effective basis while maintaining liquidity.
Purchase of futures and options requires only a small amount of
cash to cover the Fund's position and approximate the price
movement of the Index. In order to avoid leverage, any cash which
we do not invest in stocks or in futures and options we invest in
short-term debt securities of the same type as the Transamerica
Premier Cash Reserve Fund can invest. These investments allow the
Fund to approximate the dividend yield of the Index, to cover the
Fund's open positions in the S&P 500 Index derivatives, and to
help offset transaction costs and other expenses not incurred by
the unmanaged Index. For more information on derivatives, see the
section on "Options, Futures, and Other Derivatives" on page
______ of the Prospectus, and also in the Statement of Additional
Information.
The Transamerica Premier Index Fund is not sponsored,
endorsed, sold or promoted by Standard & Poor's Corporation.
S&P's only relationship to the Transamerica Premier Index Fund is
the licensing of the S&P marks and the S&P 500 Index.
15
<PAGE>
SOME POINTS TO CONSIDER WHEN INVESTING The performance of the
Transamerica Premier Index Fund will reflect the performance of
the S&P 500 Index although it may not match it precisely.
Generally, when the Index is rising, the value of shares in the
Fund should also rise. When the market is declining, the value of
shares should also decline. The Index's returns are not reduced
by investment or operating expenses. So, our ability to match the
Index will be impeded by such expenses. The Fund's return versus
the Index, and its monthly correlation with the movement of the
Index, will be reviewed by the Fund's management and reported to
the Board.
In attempting to achieve its objective, the Fund will
actively trade its investments. This may result in higher
transaction costs and tax consequences than for a less actively
traded fund, but the Investment Adviser believes that such
turnover will not adversely affect the Fund's performance. The
portfolio turnover rate may be as high as 200%. See page ____ for
more information on turnover.
The Fund is intended for investors who wish to participate
in the overall growth of the economy, as reflected by the
domestic stock market. By owning shares of the Fund, you
indirectly own shares of the largest companies, according to
their proportional representation in the Index. Investors should
have the perspective, patience, and financial ability to take on
average stock market volatility in pursuit of long-term capital
growth. Because of the uncertainty associated with common stock
investments, the Fund is intended to be a long-term investment.
TRANSAMERICA PREMIER BOND FUND
INVESTMENT OBJECTIVE We seek to achieve a high total return
(income plus capital changes) from fixed income securities
consistent with preservation of principal for this Fund.
INVESTMENT STRATEGIES AND POLICIES We invest in a diversified
selection of corporate and government bonds and mortgage-backed
securities. Through our proprietary evaluation and credit
research, we identify bonds whose potential to outperform other
similar bonds, by virtue of underlying credit strength and market
mispricing, is not fully reflected in the current bond market
valuations. By actively managing the Fund, we capitalize on these
opportunities. We seek to accumulate additional return by finding
price advantages as they occur in the market.
We normally invest at least 65% of the Fund's assets in
investment grade bonds. Investment grade bonds are rated Baa or
higher by Moody's Investors Service ("Moody's"). They are rated
BBB or higher by Standard & Poor's Corporation ("S&P").
Maturities are primarily between 10 and 30 years. In addition, we
may invest in lower-rated securities (currently not expected to
exceed 20% of the Fund's assets). Those securities are rated Ba1
or lower (Moody's) and BB+ or lower (S&P). We may also invest in
unrated securities of similar quality, as determined by us. For
more information on lower-rated securities, see "High-Yield
('Junk') Bonds" on page ____ of the Prospectus and see the
Statement of Additional Information. For more information on S&P
and Moody's ratings, see "Summary of Bond Ratings" on page ____.
16
<PAGE>
[margin] WE INVEST PRIMARILY IN
HIGH QUALITY, INVESTMENT GRADE
CORPORATE AND GOVERNMENT BONDS AND
MORTGAGE-BACKED SECURITIES, AND, TO
A LESSER EXTENT, IN BELOW-
INVESTMENT GRADE SECURITIES,
FOREIGN SECURITIES, AND CASH
EQUIVALENTS.
Our investments may include securities issued or guaranteed
by the U.S. Government or its agencies and instrumentalities,
publicly traded corporate securities, as well as municipal
obligations. We also may invest in mortgage-backed securities
issued by various federal agencies and government sponsored
enterprises and in other mortgage-related or asset-backed
securities. The investments in mortgage-related securities can be
subject to the risk of early repayment of principal. For more
information, see "Mortgage-Backed and Asset-Backed Securities" on
page ____ and the Statement of Additional Information.
We may buy foreign securities and other instruments if they
meet the same criteria described above for the Fund's investments
in general. We may invest as much as 20% of the Fund's assets in
foreign securities. At times the Fund may have no foreign
investments. See "Foreign Securities" on page ____.
If a security in the Fund that was originally rated
"investment grade" is downgraded by a ratings service, it may or
may not be sold. This depends on our assessment of the issuer's
prospects. However, we will not purchase below-investment-grade
securities if that would increase their representation in the
Fund to more than 35%. See "Summary of Bond Ratings" on page ____
and "High Yield ('Junk') Bonds" on page ____ for a description of
bond ratings and junk bonds.
As part of the management of cash and cash equivalents and
to help maintain liquidity, we may purchase and sell the same
kind of money market and other short-term instruments and debt
securities as we do for the Transamerica Premier Cash Reserve
Fund. See "Transamerica Premier Cash Reserve Fund" on page ____ .
We may also invest in options and futures contracts on other
securities or groups of securities and preferred stock. See
"Options, Futures and Other Derivatives" on page ___ and in the
Statement of Additional Information. We ordinarily invest in
common stock only as a result of conversion of bonds, exercise of
warrants, or other extraordinary business events.
SOME POINTS TO CONSIDER WHEN INVESTING The Transamerica Premier
Bond Fund is intended for investors who have the perspective,
patience, and financial ability to take on above-average bond
price volatility in pursuit of a high total return produced by
income from longer-term securities and capital changes from
undervalued credit strength. Due to the longer maturity of the
Fund's assets, the price of the Fund's securities can fluctuate
more sharply than shorter-term securities when interest rates go
up or down. An increase in interest rates will cause prices to
fall. A decrease in rates will cause prices to rise. Because of
the uncertainty associated with long-term bond investments, the
Fund is intended to be a long-term investment.
The longer maturity bonds in which we primarily invest tend
to produce higher income than bonds with shorter maturities.
Longer maturity bonds also tend to vary more in price in response
to changes in interest rates.
17
<PAGE>
The basic quality of the bonds, which are primarily investment
grade, tends to provide some safety of principal.
[margin] BOND PRICES AND
INTEREST RATES TEND TO WORK LIKE A
SEE-SAW. LONGER MATURITY BONDS SIT
OUT TOWARDS THE END. SHORTER
MATURITY BONDS SIT IN TOWARDS THE
CENTER. WHEN INTEREST RATES RISE,
BOND PRICES FALL. WHEN INTEREST
RATES FALL, BOND PRICES RISE.
In general, lower-rated bonds, which are a much lesser
component of the Fund, offer higher returns. But they also carry
higher risks. These can include: a) a higher risk of insolvency,
especially during economic downturns; b) a lower degree of
liquidity; and c) the prices of lower-rated bonds can be more
volatile.
TRANSAMERICA PREMIER BALANCED FUND
INVESTMENT OBJECTIVE We seek to achieve long-term capital growth
and current income with a secondary objective of capital
preservation, by balancing investments among stocks, bonds, and
cash (or cash equivalents) for this Fund.
INVESTMENT STRATEGIES AND POLICIES We invest in a diversified
selection of common stocks, bonds, and money market instruments
and other short-term debt securities. We attempt to achieve
reasonable asset appreciation during favorable periods and
conservation of principal in adverse times. This requires
flexibility in managing the Fund's assets. Therefore, we may
shift the portions held in bonds and stocks according to business
and investment conditions. The Fund may hold equity, fixed
income, and cash securities in any proportion, although at all
times it will not hold less than 25% of its assets in non-
convertible debt securities. When the Investment Adviser
determines that market conditions warrant, the Fund may invest
without limit in cash or cash equivalents for temporary
defensive purposes. To the extent that the Fund is so invested,
it is not achieving the investment objectives of the Fund.
[margin] THE NAME OF THE
TRANSAMERICA PREMIER BALANCED FUND
IS VERY DESCRIPTIVE. WE ATTEMPT TO
BALANCE LONG-TERM CAPITAL GROWTH
(STOCKS) WITH CURRENT INCOME (BONDS
AND OTHER FIXED INCOME
SECURITIES).
Under normal circumstances, we expect that common stocks
will represent 60% to 70% of the Fund's total assets. The Fund
holds common stocks primarily to provide long-term growth of
capital and income. We invest the remaining 30% to 40% of the
Fund's assets primarily in investment grade bonds as rated by
either Moody's or S&P.
The stocks in the Transamerica Premier Balanced Fund are
generally growth companies that we consider to be premier
companies of high quality and undervalued in
18
<PAGE>
the stock market. Equity securities may be selected by us based
on growth potential and dividend paying properties since income
is a consideration. We manage the equity portion of the Fund in a
similar manner as we do the Transamerica Premier Equity Fund,
although the selection of securities may differ. See
"Transamerica Premier Equity Fund" on page ___.
[margin] THE STOCKS IN THE PREMIER
BALANCED FUND ARE USUALLY
CONCENTRATED AMONG PREMIER HIGH
QUALITY GROWTH COMPANIES. WE MANAGE
THAT PORTION OF THE FUND MUCH LIKE
WE MANAGE THE TRANSAMERICA PREMIER
EQUITY FUND.
We invest the fixed income portion of the Fund in a
diversified selection of corporate and U.S. Government bonds and
mortgage-backed securities. We manage this portion in a similar
manner as we do the Transamerica Premier Bond Fund, although the
selection of securities may differ. See "Transamerica Premier
Bond Fund" on page ____. The fixed income assets are normally at
least 65% high quality, investment grade bonds with maturities of
between 5 and 30 years. Non-investment grade bonds held in the
fixed income portion of the Fund will be less than 20% of the
Transamerica Premier Balanced Fund's net assets. For more
information on non-investment grade bonds, see "High-Yield
('Junk') Bonds" on page ____ and the Statement of Additional
Information.
[margin] WE MANAGE THE FIXED INCOME
PORTION OF THE TRANSAMERICA PREMIER
BALANCED FUND (MOSTLY BONDS AND
MORTGAGE-BACKED SECURITIES) MUCH
LIKE WE MANAGE THE TRANSAMERICA
PREMIER BOND FUND.
The Fund may also hold certain short-term fixed income
securities as a cash reserve. As part of the management of cash
and cash equivalents and to help maintain liquidity, we may
purchase and sell the same kind of money market and other short-
term instruments and debt securities as we do for the
Transamerica Premier Cash Reserve Fund. See "Transamerica Premier
Cash Reserve Fund" on page ____ .
We may buy foreign securities and other instruments if they
meet the same criteria described above for the Fund's investments
in general. We may invest as much as 20% of the Fund's assets in
foreign securities. At times the Fund may have no foreign
investments. Foreign stock securities purchased by us will be
those traded on the U.S. exchanges as ADR's. We may also invest
in stock and bond index futures and options to a limited extent,
as well as preferred stocks.
[margin] BY INVESTING IN BOTH
STOCKS AND BONDS, WE ATTEMPT TO
LESSEN OVERALL INVESTMENT RISK.
SOME POINTS TO CONSIDER WHEN INVESTING In general, the Fund
holds equities for long-term capital appreciation, and holds
bonds for stability of principal and income as well as a reserve
for investment opportunities. This balance often creates a
situation where some of the market risks offset one
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<PAGE>
another. But investment risks cannot totally be avoided. The
expected performance of such a fund would normally lie somewhere
between the performance of an equity fund (holding the same
stocks) and the performance of a bond fund (holding the same
bonds). But this depends on the actual proportions of stocks and
bonds. Since we have flexibility in changing the balance between
asset classes, we may increase exposure to the current advantages
of one or more of the asset classes. Or we may avoid the current
disadvantages of one or more of the asset classes.
The Transamerica Premier Balanced Fund is intended for
investors who wish to participate in both the equity and debt
markets, but who wish to leave the allocation of the balance
between them to professional management. The Fund is intended for
investors who have the perspective, patience, and financial
ability to take on average market volatility in pursuit of long-
term total return that balances capital growth and current
income. Because of the uncertainties associated with common stock
and bond investments, the Fund is intended to be a long-term
investment.
TRANSAMERICA PREMIER SHORT-INTERMEDIATE GOVERNMENT FUND
INVESTMENT OBJECTIVE We seek to achieve a high level of current
income with the security of investing in government securities
for this Fund.
INVESTMENT STRATEGIES AND POLICIES We generally invest at least
65% of the Fund's assets in securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities, or its
political subdivisions. The Fund will have a dollar-weighted
average maturity of more than two years, but less than five
years. The maturity of individual instruments may range from less
than one to as much as thirty years. Our goal is to offer higher
income than money market funds with greater price stability than
most bond funds. Because of the Fund's emphasis on income,
capital appreciation is not a significant investment
consideration. Our investments will consist primarily of bonds
and mortgage-backed securities.
We may invest in U.S. Treasury bills, notes and bonds. We
may also invest in securities issued by any agency or
instrumentality of the United States. Examples of those
securities include those issued by the Government National
Mortgage Association ("GNMA"), the Federal National Mortgage
Association ("FNMA"), the Federal Housing Administration, the
Federal Farm Credit System, or the Student Loan Marketing
Association. Some agency securities are backed by the full faith
and credit of the U.S. Treasury (such as those issued by GNMA).
Others are supported by a borrowing facility from the Treasury
(such as those issued by FNMA). The remainder are backed by the
credit of the issuing agency or instrumentality. Agency
securities that are mortgage-backed (such as those issued by
GNMA) are also subject to prepayment risk. For more information
on prepayment risk see the section on "Current Income Risk" under
"A Discussion About Risk" on page ____ and the section on
"Mortgage-Backed and Asset-Backed Securities" on page ___.
We may also invest up to 35% of the Fund's assets in
investment grade corporate bonds. Investment grade bonds are
rated Baa or higher by Moody's Investors Service ("Moody's").
They are rated BBB or higher by Standard & Poor's Corporation
("S&P"). For more information on S&P and Moody's
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<PAGE>
ratings, see "Summary of Bond Ratings" on page ____. We may also
invest in instruments derived from (i.e. derivative instruments)
government or government agency securities. For more information
on derivatives see "Options, Futures, and Other Derivatives" on
page ____. As part of the management of cash and cash equivalents
and to help maintain liquidity, we may purchase and sell the same
kind of money market and other short-term instruments and debt
securities as we do for the Transamerica Premier Cash Reserve
Fund. See "Transamerica Premier Cash Reserve Fund" on page ___.
SOME POINTS TO CONSIDER WHEN INVESTING Generally, the
Transamerica Premier Short-Intermediate Government Fund is
subject to relatively low credit risk. This is because we invest
primarily in securities that are issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, or its political
subdivisions or other top-rated securities, although the Fund
itself is not guaranteed. Under normal conditions, the Fund
provides a higher yield than money market funds because of the
somewhat longer maturity of the securities. The high quality and
the limited maturity of the assets tend to provide safety of
principal. Most bonds will fall in price when interest rates
rise. Bonds of higher credit quality tend to better withstand the
changes in the economy. Also, shorter-term bonds will decline
less than longer term bonds.
In attempting to achieve its objective, the Fund will
actively trade its investments. This may result in higher
transaction costs and tax consequences than for a less actively
traded fund, but the Investment Adviser believes that such
turnover will not adversely affect the Fund's performance. The
portfolio turnover rate may be as high as 300%. See page __ for
more information on turnover.
The Transamerica Premier Short-Intermediate Government Fund
is intended for investors who wish to earn higher income than is
available from money market funds. However, this Fund may have
more short-term volatility than a money market fund. Investors
should have the perspective and patience to accept the additional
price fluctuation for the advantage of earning generally higher
returns than is available from money market funds.
TRANSAMERICA PREMIER CASH RESERVE FUND
INVESTMENT OBJECTIVE We seek to maximize current income from
money market securities consistent with liquidity and
preservation of principal for this Fund.
INVESTMENT STRATEGIES AND POLICIES This is a money market fund.
We invest primarily in high quality U.S. dollar-denominated money
market instruments of U.S. and foreign issuers with remaining
maturities of 13 months or less, including:
. Obligations issued or guaranteed by the U.S. and foreign
governments and their agencies or instrumentalities;
. Obligations of U.S. and foreign banks, or their foreign
branches, and U.S. savings banks;
. Short-term corporate obligations, including commercial paper,
notes, and bonds;
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<PAGE>
. Other short-term debt obligations with remaining maturities of
397 days or less; and
. Repurchase agreements involving any of the securities
mentioned above.
[margin] THE TRANSAMERICA PREMIER
CASH RESERVE FUND OFFERS A PLACE TO
KEEP YOUR MONEY WHILE YOU ARE
CONSIDERING IN WHICH FUNDS TO
INVEST, OR FOR YOUR SHORT-TERM
NEEDS.
We may also purchase other marketable, non-convertible
corporate debt securities of U.S. issuers. These investments
include bonds, debentures, floating rate obligations, and issues
with optional maturities. See the Statement of Additional
Information for a description of these securities.
Bank obligations are limited to U.S. or foreign banks having
total assets over $1.5 billion. Investments in savings
association obligations are limited to U.S. savings banks with
total assets over $1.5 billion. Investments in bank obligations
can include instruments issued by foreign branches of U.S. or
foreign banks or domestic branches of foreign banks.
In addition, we may invest in U.S. dollar-denominated
obligations issued or guaranteed by foreign governments or their
political subdivisions, agencies, or instrumentalities. We may
buy these foreign securities and other instruments if they meet
the same criteria described above for the Fund's investments in
general. The Fund can invest up to 25% of its assets in
obligations of Canadian and other foreign issuers. At times the
Fund may have no foreign investments.
The commercial paper and other short-term corporate
obligations are determined by us to present minimal credit risks.
We determine that they are either: a) rated in the highest short-
term rating category by at least two nationally recognized
statistical rating organizations; b) rated in the highest short-
term rating by a single rating organization if it's the only
organization that has assigned the obligations a short-term
rating; or c) unrated, but determined by us to be of comparable
quality (also called "First Tier Securities").
We seek to maintain a stable net asset value of $1.00 per
share by investing in assets which present minimal credit risk as
defined above, and by maintaining an average maturity of 90 days
or less. Securities are valued on an amortized cost basis.
SOME POINTS TO CONSIDER WHEN INVESTING The Fund provides a low
risk, relatively low cost way to maximize current income through
high quality money market securities that offer stability of
principal and liquidity. The rates on short-term investments made
by us and the daily dividend paid to investors will vary, rising
or falling with short-term rates generally. The Fund's yield will
tend to lag behind the changes in interest rates. The speed with
which the Fund's yield reflects current market rates will depend
on how quickly its securities mature and the amount of money
available for new investment.
This Fund may be a suitable investment for temporary or
defensive purposes. It may also be appropriate as part of an
overall long-term investment strategy.
22
<PAGE>
THE TRANSAMERICA PREMIER CASH RESERVE FUND IS NEITHER INSURED NOR
GUARANTEED BY THE UNITED STATES GOVERNMENT, AND THERE CAN BE NO
ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE NET
ASSET VALUE OF $1.00 PER SHARE.
WHAT IS FUNDAMENTAL? The investment objectives given for each
Fund are fundamental. This means they can be changed only with
the approval of the majority of shareholders. We can give you no
assurance that these objectives will be met. Many of the
strategies and policies are not fundamental. This means
strategies and policies can be changed by the Board without your
approval.
If any investment objectives of a Fund change, you should
decide if the Fund still meets your financial needs. More
information about this is in the Statement of Additional
Information.
A GENERAL DISCUSSION ABOUT RISK
It's important for you to understand the risks inherent in
investing in different kinds of funds, such as our Funds. All
investments are subject to risk. Even money you hide in your
mattress is subject to the risk that inflation may erode its
value. Each of the Funds is subject to the following risks:
[margin] HOW YOU FEEL ABOUT RISK IS
PERSONAL. RISK REFLECTS UNCERTAINTY
OR UNEXPECTED CHANGE. TRY TO COME
UP WITH A BALANCE OF INVESTMENTS
THAT ALLOWS YOU TO GO AFTER YOUR
MAIN GOALS WHILE STILL GIVING YOU
PEACE OF MIND.
MARKET OR PRICE VOLATILITY RISK For stocks, this refers to the
up and down price fluctuations, or volatility, caused by changing
conditions in the financial markets. For bonds and other debt
securities, it is the change in market price caused by interest
rate movements. Longer-maturity bond funds and stock funds are
more subject to this risk than money market and shorter-maturity
bond funds.
FINANCIAL OR CREDIT RISK For stocks and other equity securities,
financial risk comes from the possibility that current earnings
of the stock company will fall or that overall financial
circumstances will decline. Either of these could cause the
security to lose its value. For bonds and other debt securities,
financial risk comes from the possibility that the issuer will
not be able to pay principal and interest on time. Funds with low
quality bonds and speculative stock funds are more subject to
this risk than funds with government or high quality bonds. For
more information, see "High-Yield ('Junk') Bonds" on page ____
and "Summary of Bond Ratings" on page ____.
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<PAGE>
CURRENT INCOME RISK The Funds receive income, either as interest
or dividends, from the securities in which they have invested.
Each Fund pays out substantially all of this income to its
shareholders as dividends. See the footnote for "What About
Taxes" on page ____. The dividends paid out to shareholders are
called current income. Current income risk means how much and how
quickly overall interest rate or dividend rate changes on income
received by the Funds affects our ability to maintain the current
level of income paid to shareholders.
INFLATION OR PURCHASING POWER RISK Inflation risk is the
uncertainty that your invested dollars may not buy as much in the
future as they do today. Longer-maturity bond funds are more
subject to this risk than money market or stock funds.
SOVEREIGN RISK Sovereign risk is the potential loss of assets or
earning power due to government actions, such as taxation,
expropriation, or regulation. Funds with large investments
overseas or funds with tax-advantaged investments are more
subject to this risk.
More in-depth information about risk is provided in the following
section and in the Statement of Additional Information.
INVESTMENT PROCEDURES AND RISK CONSIDERATIONS FOR THE FUNDS
BUYING AND SELLING SECURITIES In general, we purchase and hold
securities for each Fund for capital growth, current income, or a
combination of those purposes. However, we ordinarily buy and
sell securities whenever we think it is appropriate in order to
achieve the Fund's investment objective. Fund changes can result
from liquidity needs, securities reaching a price objective,
anticipated changes in interest rates, a change in the
creditworthiness of an issuer, or from general financial or
market developments. Because investment changes usually are not
tied to the length of time a security has been held, a
significant number of short-term transactions may result.
[margin] WE HAVE THE ABILITY TO BUY
AND SELL SECURITIES AS OFTEN AS WE
WISH IN ORDER TO ACHIEVE A FUND'S
INVESTMENT OBJECTIVE.
We may sell one security and simultaneously purchase another
of comparable quality. We may simultaneously purchase and sell
the same security to take advantage of short-term differentials
and bond yields. Or we may purchase individual securities in
anticipation of relatively short-term price gains. The rate of
portfolio turnover will not be a determining factor in these
decisions. However, certain tax considerations can restrict our
ability to sell securities in some circumstances when the
security has been held for less than three months. Increased
turnover results in higher costs. These costs result from
brokerage commissions, dealer mark-ups and other transaction
costs on
24
<PAGE>
the sale of securities and reinvestment in other securities. This
can result in the acceleration of taxable gains.
Turnover for the insurance company separate accounts (as
described under "Investment Adviser's Performance" on page
_____), also managed by the Investment Adviser, has not been and
will not be a consideration. The Investment Adviser buys and
sells securities for each separate account whenever they believe
it is appropriate to do so. The Transamerica Premier Funds are
and will be managed in a substantially similar manner.
We cannot predict precisely the turnover rates for these new
Funds, but we expect that the annual turnover rates will
generally not exceed: 50% for the Transamerica Premier Equity
Fund; 200% for the Transamerica Premier Index Fund; 100% for the
Transamerica Premier Bond Fund; 50% for the Transamerica Premier
Balanced Fund; and 300% for the Transamerica Premier Short-
Intermediate Government Fund. We expect the turnover rate for the
Transamerica Premier Cash Reserve Fund to be zero for regulatory
purposes. A 100% annual turnover rate would occur if all of a
Fund's securities were replaced one time during a one year
period. Short-term gains realized from turnover are taxable to
shareholders as ordinary income, except for shares held in
special tax-qualified accounts (such as IRA's or employer
sponsored pension plans). In addition, higher turnover rates can
result in corresponding increases in brokerage commissions and
other transaction costs. We generally will not consider turnover
rates in making investment decisions on behalf of any Fund
consistent with the Fund's investment objective and
policies.
For more information, see "What About Taxes?", on page ___,
and the Statement of Additional Information.
FUND LENDING As a way to earn additional income, we may lend
Fund securities to creditworthy persons not affiliated with the
Funds. Such loans must be secured by cash collateral or by
irrevocable letters of credit maintained on a current basis in an
amount at least equal to the market value of the securities
loaned. During the existence of the loan, we must continue to
receive the equivalent of the interest and dividends paid by the
issuer on the securities loaned and interest on the investment of
the collateral. We must have the right to call the loan and
obtain the securities loaned at any time on five days' notice.
This includes the right to call the loan to enable the us to
execute shareholder voting rights. Such loans cannot exceed one-
third of the Fund's net assets taken at market value. Interest on
loaned securities cannot exceed 10% of the annual gross income of
the Fund (without offset for realized capital gains). The lending
policy described in this paragraph is a fundamental policy that
can be changed only by a vote of a majority of shareholders.
Lending securities to broker-dealers and institutions could
result in a loss or a delay in recovering the Fund's securities.
BORROWING POLICIES OF THE FUNDS We can borrow money from banks
or engage in reverse repurchase agreements, for temporary or
emergency purposes. We can borrow up to one-third of a Fund's
total assets. To secure borrowings, we can mortgage or pledge
securities in an amount up to one-third of a Fund's net assets.
If we borrow money, a Fund's share price may be subject to
greater fluctuation until the borrowing is paid off. The Fund
will not make any additional investments, other than through
reverse
25
<PAGE>
repurchase agreements, while the level of borrowing exceeds 5% of
the Fund's total assets. For more information on reverse
repurchase agreements see the "Reverse Repurchase Agreements and
Leverage" section below.
REPURCHASE AGREEMENTS We may enter into repurchase agreements
with Federal Reserve System member banks or U.S. securities
dealers. A repurchase agreement occurs when, at the time we
purchase an interest-bearing debt obligation, the seller agrees
to repurchase the debt obligation on a specified date in the
future at an agreed-upon price. The repurchase price reflects an
agreed-upon interest rate during the time the Fund's money is
invested in the security. Since the security constitutes
collateral for the repurchase obligation, a repurchase agreement
can be considered a collateralized loan. Our risk is the ability
of the seller to pay the agreed-upon price on the delivery date.
If the seller is unable to make a timely repurchase, our expected
proceeds could be delayed, or we could suffer a loss in principal
or current interest, or incur costs in liquidating the
collateral. We have established procedures to evaluate the
creditworthiness of parties making repurchase agreements.
The securities underlying repurchase agreements are not
subject to the restrictions applicable to maturity of the Funds
or their securities.
We will not invest in repurchase agreements maturing in more
than seven days if that would constitute more than 10% of its net
assets when taking into account the remaining days to maturity of
our existing repurchase agreements.
REVERSE REPURCHASE AGREEMENTS AND LEVERAGE We may enter into
reverse repurchase agreements with Federal Reserve member banks
and U.S. securities dealers from time to time. In a reverse
repurchase transaction we sell securities and simultaneously
agree to repurchase them at a price which reflects an agreed-upon
rate of interest. We will use the proceeds of reverse repurchase
agreements to make other investments which either mature or are
under an agreement to resell at a date simultaneous with or prior
to the expiration of the reverse repurchase agreement. The Fund
may utilize reverse repurchase agreements only if the interest
income to be earned from the investment proceeds of the
transaction is greater than the interest expense of the reverse
repurchase transaction.
Reverse repurchase agreements are a form of leverage which
increases the opportunity for gain and the risk of loss for a
given change in market value. In addition the gains or losses
will cause the net asset value of the Funds' shares to rise or
fall faster than would otherwise be the case. There may also be a
risk of delay in the recovery of the underlying securities if the
opposite party has financial difficulties.
A Fund's obligations under all borrowings, including reverse
repurchase agreements, will not exceed one-third of the Fund's
net assets.
WHEN-ISSUED SECURITIES We may sometimes purchase new issues of
securities on a when-issued basis. The price of when-issued
securities is established at the time the commitment to purchase
is made. Delivery of and payment for these securities typically
occur 15 to 45 days after the commitment to purchase. The market
price of the securities at the time of delivery may be higher or
lower than those contracted for on the when-issued security, and
26
<PAGE>
there is some risk the transaction may not be consummated. We
maintain a segregated account for each of the Funds consisting of
cash or high-quality liquid debt securities in an amount at least
equal to the when-issued commitments.
SHORT SALES We may sell securities which we do not own, or
intend to deliver to the buyer if we do own ("sell short") if, at
the time of the short sale, we own or have the right to acquire
an equal amount of the security being sold short at no additional
cost. These transactions allow us to hedge against price
fluctuations by locking in a sale price for securities we do not
wish to sell immediately.
We may make a short sale when we want to sell a security we
own at a current attractive price. This allows us to postpone a
gain or loss for federal income tax purposes and to satisfy
certain tests applicable to regulated investment companies under
the Code. We will make short sales only if the total amount of
all short sales does not exceed 10% of the Fund. This limitation
can be changed at any time.
MUNICIPAL OBLIGATIONS We may invest in municipal obligations for
any Fund, except for the Transamerica Premier Index Fund. This
includes the equity Funds as part of their cash management
techniques. In addition to the usual risks associated with
investing for income, the value of municipal obligations can be
affected by changes in the actual or perceived credit quality.
The credit quality of a municipal obligation can be affected by,
among other factors: a) the financial condition of the issuer or
guarantor; b) the issuer's future borrowing plans and sources of
revenue; c) the economic feasibility of the revenue bond project
or general borrowing purpose; d) political or economic
developments in the region or jurisdiction where the security is
issued; and e) the liquidity of the security. Because municipal
obligations are generally traded over the counter, the liquidity
of a particular issue often depends on the willingness of dealers
to make a market in the security. The liquidity of some municipal
issues can be enhanced by demand features which enable us to
demand payment from the issuer or a financial intermediary on
short notice.
HIGH-YIELD ("JUNK") BONDS High-yield bonds (commonly called
"junk" bonds) are lower-rated bonds that involve higher current
income but are predominantly speculative because they present a
higher degree of credit risk. Credit risk is the risk that the
issuer of the bonds will not be able to make interest or
principal payment on time. If this happens, we would lose some of
our income, and we could expect a decline in the market value of
the securities affected. We need to carefully analyze the
financial condition of companies issuing junk bonds. The prices
of junk bonds tend to be more reflective of prevailing economic
and industry conditions, issuers' unique financial situations,
and the bonds' coupon than to small changes in the level of
interest rates. But during an economic downturn or a period of
rising interest rates, highly leveraged companies can have
trouble making principal and interest payments, meeting projected
business goals, and obtaining additional financing.
We may also invest in unrated debt securities. Unrated debt,
while not necessarily of lower quality than rated securities, may
not have as broad a market. Because of the size and perceived
demand for the issue, among other
27
<PAGE>
factors, certain municipalities may decide not to pay the cost of
getting a rating for their bonds. We analyze the creditworthiness
of the issuer, as well as any financial institution or other
party responsible for payments on the security, to determine
whether to purchase unrated municipal bonds.
Unrated debt securities will be included in the 35% limit on
non-investment grade debt of the applicable Funds, unless we deem
such securities to be the equivalent of investment grade
securities. See "Summary of Bond Ratings" on page _____ and the
Statement of Additional Information for a description of bond
rating categories.
FOREIGN SECURITIES We may invest in foreign securities for each
of the Funds, except the Transamerica Premier Index Fund and the
Transamerica Premier Short-Intermediate Government Fund . Foreign
equity investments for the Transamerica Premier Equity Fund and
the Transamerica Premier Balanced Fund are limited to the
purchase of American depositary receipts ("ADR's") evidencing
ownership of the underlying foreign securities. ADR's are dollar-
denominated and are issued by domestic banks or securities firms
and traded in the U.S.
Investing in securities of foreign issuers involves
different, and sometimes greater, risks than investments in
securities of U.S. issuers. These include an increased risk of
adverse political and economic developments, and, with respect to
certain countries, the possibility of expropriation,
nationalization or confiscatory taxation or limitations on the
removal of the funds or other assets of a Fund. These risks are
discussed under "A Discussion About Risk" on page ____.
OPTIONS, FUTURES, AND OTHER DERIVATIVES We may use options,
futures, forward contracts, and swap transactions ("derivatives")
for each of the Funds. However, we do not currently use, nor
anticipate using, derivatives for the Transamerica Premier Cash
Reserve Fund. We may seek to protect a Fund against potential
unfavorable movements in interest rates or securities' prices by
investing in derivatives. If those markets do not move in the
direction we anticipate, we could suffer investment losses.
We may purchase and write call or put options on securities
or on indexes ("options"). We may also enter into interest rate
or index futures contracts for the purchase or sale of
instruments based on financial indexes ("futures contracts"),
options on futures contracts, forward contracts, and interest
rate swaps and swap-related products. We use these instruments
primarily to adjust a Fund's exposure to changing securities
prices, interest rates, or other factors that affect securities
values. This is an attempt to reduce the overall investment risk.
However, the Transamerica Premier Index Fund will use derivatives
as part of its strategy to match the S&P 500 Index.
Risks in the use of these derivatives include, in addition
to those referred to above: a) the risk that interest rates and
securities prices do not move in the directions being hedged
against, in which case the Fund has incurred the cost of the
derivative (either its purchase price or, by writing an option,
losing the opportunity to profit from increases in the value of
the securities covered) with no tangible benefit; b) imperfect
correlation between the price of derivatives and the movements of
the securities' prices or interest rates being hedged; c) the
possible absence of a liquid secondary market for any particular
derivative at any time; d) the potential loss if the counterparty
to
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<PAGE>
the transaction does not perform as promised; and e) the possible
need to defer closing out certain positions to avoid adverse tax
consequences.
More information on derivatives is contained in the
Statement of Additional Information.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES We may invest in
mortgage-backed and asset-backed securities. The Transamerica
Premier Bond Fund and the Transamerica Premier Short-Intermediate
Government Fund are more likely to invest in such securities than
the other Funds. Mortgage-backed and asset-backed securities are
generally pools of many individual mortgages or other loans. Part
of the cash flow of these securities is from the early payoff of
some of the underlying loans. The specific amount and timing of
such prepayments is difficult to predict, creating "prepayment
risk." For example, prepayments on Government National Mortgage
Association ("GNMA's") are more likely to increase during periods
of declining long-term interest rates because borrowers tend to
refinance when interest rates drop. In the event of very high
prepayments, we may be required to invest these proceeds at a
lower interest rate, causing us to earn less than if the
prepayments had not occurred. Prepayments are more likely to
decrease during periods of rising interest rates, causing the
expected average life to become longer. This variability of
prepayments will tend to limit price gains when interest rates
drop and to exaggerate price declines when interest rates
rise.
ZERO COUPON BONDS We may invest in zero coupon bonds and strips.
Zero coupon bonds do not make regular interest payments. Instead,
they are sold at a discount from face value. A single lump sum
which represents both principal and interest is paid at maturity.
Strips are debt securities whose interest coupons are taken out
and traded separately after the securities are issued, but
otherwise are comparable to zero coupon bonds. The market value
of zero coupon bonds and strips generally is more sensitive to
interest rate fluctuations than interest-paying securities of
comparable term and quality.
ILLIQUID SECURITIES We may invest up to 15% of a Fund's net
assets in securities that are illiquid, except that the
Transamerica Premier Cash Reserve Fund may only invest 10%.
Securities are considered illiquid when there is no readily
available market or when they have legal or contractual
restrictions. Repurchase agreements which mature in more than
seven days are included as illiquid securities. It may be
difficult for us to sell these investments quickly for their fair
market value.
Certain restricted securities that are not registered for
sale to the general public but that can be resold to
institutional investors under Rule 144A may not be considered
illiquid. This is provided that a dealer or institutional trading
market exists. The institutional trading market is relatively
new. Liquidity of the Funds' investments could be impaired if
trading for these securities does not further develop or
declines. The Investment Adviser determines the liquidity of Rule
144A securities under guidelines approved by the Board.
VARIABLE RATE, FLOATING RATE, OR VARIABLE AMOUNT SECURITIES We
may invest in variable rate, floating rate, or variable amount
29
<PAGE>
securities for each Fund, except for the Transamerica Premier
Equity Fund. These are short-term unsecured promissory notes
issued by corporations to finance short-term credit needs. They
are interest-bearing notes on which the interest rate generally
fluctuates on a scheduled basis.
INVESTMENTS IN OTHER INVESTMENT COMPANIES We may invest up to
10% of a Fund's total assets in the shares of other investment
companies, but only up to 5% of its assets in any one other
investment company. In addition, we cannot purchase more than 3%
of the securities of any one investment company for any Fund. We
intend to keep these investments to a minimum.
SHAREHOLDER SERVICES
This section details the various services available to you
as a shareholder. If you are a pension plan sponsor, you may wish
to contact your plan administrator for details about the services
that apply to your plan. If you are an individual IRA or SEP
shareholder or an institutional shareholder, the following
services are available to you unless otherwise noted in the
description.
APPLICATION Your broker may be submitting your application for
you. But if you are completing your own application, one is
provided in this Prospectus. Do not use this application if you
are setting up an IRA or SEP account. If you need help in
completing your application, call 1-800-89-ASK-US. Send the
application to the address listed on the application form.
IRA/SEP ACCOUNTS You can establish an Individual Retirement
Account ("IRA") or Simplified Employee Pension ("SEP") with
Transamerica Premier Funds. Contributions to an IRA or SEP may be
deductible from your taxable income, depending on your personal
tax situation.
[margin] WHEN YOU SET UP AN IRA,
YOU ENJOY TAX-DEFERRED INVESTMENT
EARNINGS. YOU MAY WANT TO
CONSOLIDATE SEVERAL IRAS OR YOU MAY
NEED TO INVEST A DISTRIBUTION FROM
A FORMER EMPLOYER'S PENSION
PLAN.
If you are receiving a distribution from your pension plan,
or you would like to transfer your IRA account from another
financial institution, you can continue to get tax-deferred
growth by transferring these proceeds to your Transamerica
Premier Fund IRA. If you want to rollover distributions from your
pension plan to an IRA in one or more of the Funds, the money
must be paid directly by your pension plan administrator to
Transamerica Investors to avoid a 20% federal withholding tax.
See "What About Taxes?" on page ____.
There is an annual fee of $10 per Fund in which you own
shares for administering your IRA or SEP. This is limited to a
maximum annual fee of $36 per taxpayer identification number.
Alternatively, you can pay a one-time,
30
<PAGE>
non-refundable fee of $100 for all IRA/SEP accounts that are
maintained under the same taxpayer identification number. You may
pay the fee to us, otherwise we will deduct the annual fee
ordinarily during December of each year or at the time you fully
redeem your shares in a Fund, if before then. We will waive this
fee if the value of the shares in your IRA/SEP account is $5,000
or more when the fee is due. The Company reserves the right to
change the fee, but we will notify you at least 30 days in
advance of any change.
HOW TO BUY ADDITIONAL SHARES
YOU MAY BUY SHARES IN ONE OF FOUR WAYS:
1) BY MAIL Fill out an investment coupon from a previous
confirmation statement, or indicate on your check or a separate
piece of paper your name, address and account number, and mail it
to:
Transamerica Investors
PO Box 9232
Boston, MA 02205-9232
2) BY AUTOMATIC INVESTMENT PLAN You can make investments
automatically by electing this service in your application. It
will authorize us to take regular, automatic withdrawals from
your bank account. These periodic investments must be at least
$50 for each Fund in which you are automatically investing. You
can change the date or amount of your monthly investment, or
terminate the Automatic Investment Plan, at any time by letter or
telephone call (with prior authorization). Give us your request
at least 20 business days before the change is to become
effective. You may also be able to have investments automatically
deducted from:
(1) your paycheck at work;
(2) your savings account; or
(3) other sources of your choice.
Call 1-800-89-ASK-US for more information.
3) BY TELEPHONE If you elect the telephone purchasing service on
your application, you can make occasional electronic withdrawals
from your designated bank account by calling 1-800-89-ASK-US.
We take reasonable precautions to make sure that telephone
instructions are genuine. Precautions include requiring you to
positively identify yourself, tape recording the telephone
instructions, and providing written confirmations. We accept all
telephone instructions we reasonably believe to be accurate and
genuine. Any losses arising from communication errors are your
responsibility. If reasonable procedures are not used to confirm
that instructions communicated by telephone are genuine, the
Company may be liable for any losses due to unauthorized or
fraudulent transactions.
[margin] WE TAKE REASONABLE STEPS
TO MAKE SURE YOUR TELEPHONE
INSTRUCTIONS ARE
31
<PAGE>
AUTHORIZED AND ACCURATE. WE RECORD
ALL PHONE CALLS AND SEND YOU
CONFIRMATION OF ALL TELEPHONE
TRANSACTIONS. YOU ARE RESPONSIBLE
FOR THE ACCURACY OF PHONE
INSTRUCTIONS.
4) BY WIRE You can make your initial or subsequent investments
in the Funds by wire. Here's what you need to do:
(1) send us your application form (initial investment
only);
(2) call 1-800-89-ASK-US for a wire number;
(3) instruct your bank to wire money to State Street Bank,
ABA number 011000028, DDA number ___________ ; and
(4) specify on the wire:
a) "Transamerica Investors, Inc.;"
b) your Fund's account number, if you have one;
c) identify the Funds in which you would like to
purchase shares, and the amount to be allocated to each
Fund (e.g. $5,000 in the Transamerica Premier Equity
Fund and $4,000 in the Transamerica Premier Bond Fund);
d) your name, your city and state; and
e) your wire number.
Wired money is considered received by us when we receive the
wire and all the required information listed above. If we receive
your telephone call and wire before the New York Stock Exchange
closes, usually 4:00 p.m. Eastern time, the money is credited
that same day if you have supplied us with all other needed
information.
MINIMUM INVESTMENT AMOUNTS The minimum initial investment in any
of the Funds is $1,000. The minimum is reduced to $250 if the
account is for a Pension or Retirement Savings Program. The
minimum subsequent investment by check or telephone is $100. The
minimum initial and subsequent investments for the Automatic
Investment Plan or a group billing purchase program is $50 per
Fund. There is no minimum subsequent investment if your account
is for a Pension or Retirement Savings Program.
Your investment must be a specified dollar amount. We cannot
accept purchase requests specifying a certain price, date, or
number of shares; these investments will be returned. The price
you pay for your shares will be the next determined net asset
value after your purchase order is received. See "Share Price" on
page ___. The Company reserves the right to reject any
application or investment. There may be circumstances when the
Company will not accept new investments in one or more of the
Funds.
HOW TO SELL SHARES
You can sell your shares to us (called redeeming) at any
time. You'll receive the net asset value next determined after we
receive your redemption request, assuming all requirements have
been met. Before redeeming, please read "When Share Price Is
Determined" on page __, and "Minimum Account Balances" on page
___.
32
<PAGE>
[margin] YOU CAN SELL YOUR SHARES
VIA ANY OF FOUR WAYS: (1) BY MAIL;
(2) BY PHONE; (3) BY CHECK; OR (4)
UNDER AN AUTOMATIC INCOME PLAN.
YOU MAY SELL SHARES IN ONE OF FOUR WAYS:
1) BY MAIL Your written instructions to us to redeem shares can
be in any one of the following forms:
. By redemption form, available by calling 1-800-89-ASK-US;
. By letter; or
. By assignment form or other authorization granting power with
respect to your shares in one of the Funds.
Once mailed to us, your redemption request is irrevocable
and cannot be modified or canceled.
If the amount redeemed is over $50,000, all signatures must
be guaranteed. See "Signature Guarantee" on page ___. The request
must be signed by each registered owner. All owners must sign the
request exactly as their names appear in the registration. For
example, if the owner's name appears in the registration as John
Michael Smith, he must sign that way and not as John M.
Smith.
2) BY TELEPHONE If you have previously authorized telephone
directions in writing (e.g. in your application), you can redeem
your shares by calling 1-800-89-ASK-US. Be careful in calling,
since once made, your telephone request cannot be modified or
canceled.
You have several options for receiving your redemption:
. By check;
. By electronic transfer to your bank; or
. By wire transfer(minimum of $5,000).
If you call us before the close of the New York Stock
Exchange, usually 4:00 p.m. Eastern time, you will receive the
price determined as of the close of that business day. See "Share
Price" on page ____. Before calling, read " Points to Remember
When Redeeming" on page ____.
We take reasonable precautions to make sure that telephone
instructions are genuine. Precautions include requiring you to
positively identify yourself, tape recording the telephone
instructions, and providing written confirmations. We accept all
telephone instructions we reasonably believe to be accurate and
genuine. Any losses arising from communication errors are your
responsibility. If reasonable procedures are not used to confirm
that instructions communicated by telephone are genuine, the
Company may be liable for any losses due to unauthorized or
fraudulent transactions. For detailed information on how
telephone transactions will operate, see the Statement of
Additional Information.
3) BY CHECK (Transamerica Premier Cash Reserve Fund only)
Redemptions can be made from the Transamerica Cash Reserve Fund
by check. To be eligible, you must have applied for the check
writing feature on your account application. The signature(s) you
designated must appear on the check for it to be honored. If you
close your account by check, we will send you any accrued
dividends by check. You can write an unlimited number of checks,
as
33
<PAGE>
long as each check is for $250 or more, and as long as the Fund
account balance does not drop below $500. See "Minimum Account
Balances" on page ____.
This option is not available for Pension or Retirement
Savings Program accounts (including IRA's), or any other account
controlled by a fiduciary.
[margin] IF YOU'RE INVESTED IN THE
TRANSAMERICA PREMIER CASH RESERVE
FUND, GETTING YOUR MONEY CAN BE AS
EASY AS WRITING A CHECK.
4) BY AUTOMATIC INCOME PLAN Under the Automatic Income Plan we
automatically redeem enough shares each month to provide you with
a check or automatic deposit to your bank account. The minimum is
$50 per Fund. Please tell us: a) when you want to be paid each
month; b) how much you want to be paid; and c) from which
Fund(s). To set up an Automatic Income Plan, call us at
1-800-89-ASK-US.
If your monthly income payments exceed the dividends,
interest, and capital appreciation on your shares, the payments
will deplete your investment.
You can specify the Automatic Income Plan when you make your
first investment. If you sign up for the plan later, the request
for the Automatic Income Plan or any increase in payment amount
must be signed by all owners of your account.
[margin] IF YOU WANT TO RECEIVE A
FLAT AMOUNT EACH MONTH, USE THE
AUTOMATIC INCOME PLAN. WE WILL
AUTOMATICALLY SELL ENOUGH SHARES
EVERY MONTH TO PROVIDE YOU WITH AN
INCOME PAYMENT. AMOUNTS PAID TO YOU
BY AUTOMATIC INCOME PLAN ARE NOT A
RETURN ON YOUR INVESTMENT. YOU MUST
REPORT ANY GAINS OR LOSSES ON YOUR
INCOME TAX RETURN. WE WILL PROVIDE
INFORMATION TO YOU CONCERNING ANY
GAIN OR LOSS.
You can request us to send payments to an address other than
the address of record at the time of your first investment. After
that, a request to send payments to an address other than the
address of record must be signed by all owners of your account,
with their signatures guaranteed.
The Automatic Income Plan option can be terminated at any
time. If it is, we will notify you. You can terminate the Plan or
change the amount of the payments by writing or calling us.
Termination or change will become effective within 15 days after
we receive your instructions.
HOW LONG WILL IT TAKE? We will usually send your redemption
payment to you on the second business day after we receive your
request, but not later than seven days afterwards, assuming we
have all the information we need. If the information you provide
us is incomplete, we will contact you, but this may delay the
redemption.
The Company may postpone such payment if: (a) the New York
Stock Exchange is closed for other than usual weekends or
holidays, or trading on the New York Stock Exchange is
restricted; (b) an emergency exists as defined by the U.S.
Securities and Exchange Commission (the "Commission"), or the
34
<PAGE>
Commission requires that trading be restricted; or (c) the
Commission permits a delay for the protection of investors.
When a redemption occurs shortly after a recent check
purchase, the redemption proceeds may be held beyond seven days
but only until the purchase check clears, which may take up to 15
days. If you anticipate redemptions soon after you purchase your
shares by check, you can avoid this delay by wiring your purchase
payment.
If you request a redemption check within 30 days of your
address change, you must send us your request in writing with a
signature guarantee. Keep your address current by writing or
calling in your new address to us as soon as possible.
POINTS TO REMEMBER WHEN REDEEMING
. All redemptions are made and the price is determined on the
day we receive all necessary documentation. See "When Share
Price Is Determined" on page ___.
. We cannot accept redemptions specifying a certain date or
price. We will return these requests.
. For redemptions greater than $250,000 the Company reserves the
right to give you marketable securities instead of cash. See
the Statement of Additional Information, or call us at 1-800-
89-ASK-US.
. Except for a transfer of redemption proceeds to the custodian
of a tax-qualified plan, we will make all payments to the
registered owner of the shares, unless you tell us otherwise.
We will mail all checks to the address of record, unless you
tell us otherwise.
. If the redemption request is made by a corporation,
partnership, trust, fiduciary, agent, or unincorporated
association, the individual signing the request must be
authorized. If the redemption is from an account under a
qualified pension plan, spousal consent may be required.
. A request to redeem shares in an IRA or 403(b) plan must be
accompanied by an IRS Form W4-P (pension income tax
withholding form, which we will provide) and a reason for
withdrawal. This is required by the IRS.
Please call us at 1-800-89-ASK-US or write to Transamerica
Investors, P.O. Box 9232, Boston, MA 02205-9232 for further
information.
HOW TO EXCHANGE SHARES
BETWEEN FUNDS AND CLASSES If your investment needs change, you
can exchange shares in any Fund for shares of any other Fund
within the same class. Exchanges can be made in writing or by
telephone at any time by shareholders. The procedures relating to
exchanges in writing and by telephone are the same as for
purchases. Exchanges are available to any resident of any state
in which shares of the Fund are legally sold.
Exchanges between different classes of shares will be on the
basis of the relative net asset values of the respective shares
to be exchanged. You may be able to exchange your shares for
shares of a class having a different pricing structure if you are
no longer eligible to purchase shares of the original class
35
<PAGE>
due to a change in your status. You will receive advance notice
if your shares must be exchanged for another class of shares.
[margin] EXCHANGING SHARES AMONG
FUNDS WITH DIFFERENT INVESTMENT
OBJECTIVES GIVES YOU THE
OPPORTUNITY TO KEEP YOUR GOALS IN
SIGHT AS YOUR LIFESTYLE AND NEEDS
CHANGE. FOR EXAMPLE, AS YOU GET
CLOSER TO RETIREMENT AGE, YOU MAY
WANT TO MOVE SOME OF YOUR
INVESTMENT DOLLARS INTO MORE
CONSERVATIVE FUNDS TO BETTER
PROTECT YOUR NEST EGG.
BY AUTOMATIC EXCHANGE PLAN You can make automatic share
exchanges once or twice a month. You can request the service in
writing to us. Your request must be signed by all registered
owners of the account. Call 1-800-89-ASK-US for information.
POINTS TO REMEMBER WHEN MAKING EXCHANGES Make sure you
understand the investment objective of the Fund into which you
are exchanging shares. The exchange service is not designed to
give shareholders the opportunity to "time the market." It gives
you a convenient way to change the balance between the accounts
so that it more closely matches your overall investment
objectives and risk tolerance level.
. You can make an unlimited number of exchanges between the
Funds. However, unless you are using the Automatic Exchange
Plan, further exchanges may be suspended for the remainder of
any calendar year during which you make more than four
exchanges involving a single Fund. This limitation is designed
to keep each Fund's asset base stable and to reduce its
administrative expenses.
. An exchange is treated as a sale of shares from one Fund and
the purchase of shares in another Fund. Exchanges are taxable
events. See "What About Taxes?" on page ____.
. Exchanges into or out of the Funds are made at the next
determined net asset value per share after we receive all
necessary information for the exchange.
. Exchanges are accepted only if the ownership registrations of
both accounts are identical.
. The Company reserves the right to reject any exchange request
and to modify or terminate the exchange option at any time.
[margin] EXCHANGES ARE TREATED THE
SAME AS PURCHASES AND REDEMPTIONS.
THERE ARE TAX CONSIDERATIONS YOU
SHOULD DISCUSS WITH YOUR TAX
ADVISER.
OTHER INVESTOR REQUIREMENTS AND SERVICES
36
<PAGE>
TAX IDENTIFICATION NUMBER You must furnish your taxpayer
identification number and state whether or not you are subject to
back-up withholding for prior under-reporting. If you don't
furnish your tax I.D. number, redemptions or exchanges of shares,
as well as dividends and capital gains distributions, will be
subject to federal withholding tax.
CHANGING YOUR ADDRESS To change the address on your account,
please call us at 1-800-89-ASK-US, or send us a written
notification signed by all registered owners of your account.
Include the name of your Fund(s), the account number(s), the
name(s) on the account and both the old and new addresses. Within
the first 30 days after an address change, telephone redemptions
are permissible only if the redemption proceeds are wired or
electronically transferred. See "How to Sell Shares" on page
____.
SIGNATURE GUARANTEE When a signature guarantee is required, e.g.
when the redemption amount is more than $50,000, the signature of
each owner of record must be guaranteed by a bank or trust
company (or savings bank, savings and loan association, or a
member of a national stock exchange). This is required to comply
with general stock transfer rules. You must obtain a written
guarantee that states "Signature(s) Guaranteed" and is signed in
the name of the guarantor by an authorized person. If you have
any questions, call 1-800-89-ASK-US.
Our policy to waive the signature guarantee for amounts of
$50,000 or less can be amended or discontinued at any time. A
signature guarantee may be required with regard to any particular
redemption transaction.
[margin] THERE IS A LOT OF
ADMINISTRATIVE WORK IN MAINTAINING
YOUR ACCOUNT SO WE REQUIRE THAT YOU
KEEP AT LEAST $500 IN EACH FUND
ACCOUNT. OF COURSE, YOU'RE
INVESTING FOR THE LONG HAUL, SO
IT'S TO YOUR ADVANTAGE TO KEEP
BUILDING UP YOUR ACCOUNTS. THIS
GIVES YOUR MONEY A CHANCE TO REALLY
WORK FOR YOU.
MINIMUM ACCOUNT BALANCES You must maintain a minimum balance of
$500 in each Fund in which you own shares. If a Fund's value
falls below $500 as a result of your action, we will notify you.
You will have 30 days to increase your balance to or above the
minimum. If you do not increase your balance, we will redeem your
shares and pay the value to you.
This minimum does not apply if you are actively contributing
to that Fund through an Automatic Investment Plan. If your Fund
is for a Pension or Retirement Savings Program, we will exchange
the balance to another Fund of your choice.
HOW YOU WILL GET ONGOING INFORMATION ABOUT THE FUNDS We will
send you a consolidated, quarterly statement of your account
showing all transactions since the beginning of the current
quarter. You can request a statement of your account activity at
any time. Also, each time you invest, redeem, transfer or
exchange shares, we will send you a confirmation of the
transaction.
37
<PAGE>
We will send you an annual report that includes audited
financial statements for the fiscal year. It will include a list
of securities in each Fund on that date. We will also send you a
semi-annual report that includes unaudited financial statements
for the previous six months. It will also include a list of
securities in each Fund on that date.
We will send you a new prospectus each year. The Statement
of Additional Information is also revised each year. We will send
this to you only if you request it.
[margin] WE'LL KEEP YOU INFORMED
ABOUT HOW YOUR INVESTMENTS ARE
DOING WITH QUARTERLY STATEMENTS AND
SEMI-ANNUAL AND ANNUAL REPORTS.
HOW TO TRANSFER YOUR SHARES TO ANOTHER PERSON You can transfer
ownership of your shares to another person or organization, or
change the name on an account, by sending us written
instructions. The request must be signed by all registered owners
of your account. To change the name on an account, the shares
must be transferred to a new account. If the amount transferred
exceeds $50,000, the request must include a signature guarantee.
See "Signature Guarantee" on page _____. This option is not
available for Pension or Retirement Savings Programs. Please call
us at 1-800-89-ASK-US for additional information.
DIVIDENDS AND CAPITAL GAINS
We distribute substantially all of the Funds' net investment
income in the form of dividends to you. The following table shows
how often we pay dividends on each Fund.
<TABLE>
<CAPTION>
=======================================================
FUND DIVIDEND PAID
=======================================================
<S> <C>
Transamerica Premier Equity Fund Quarterly
- -------------------------------------------------------
Transamerica Premier Index Fund Quarterly
- -------------------------------------------------------
Transamerica Premier Bond Fund Monthly
- -------------------------------------------------------
Transamerica Premier Balanced Fund Quarterly
- -------------------------------------------------------
Transamerica Premier Short-Intermediate Monthly
Government Fund
- -------------------------------------------------------
Transamerica Premier Cash Reserve Fund Monthly
=======================================================
</TABLE>
Although we pay dividends monthly on the Transamerica
Premier Cash Reserve Fund, dividends are determined daily. You
may purchase shares of the Transamerica Premier Cash Reserve Fund
by wiring federal funds to State Street Bank, the Custodian. If
you notify us by calling 1-800-89-ASK-US by 1:00 p.m. (Eastern
Standard Time "EST") and State Street receives your wired funds
by 4:00 p.m. (EST), your purchase will be effective immediately,
and you will begin to earn dividends on that business day.
Federal funds wires will be accepted only on a day on which the
Federal Reserve is open. To redeem shares of the Transamerica
Premier Cash Reserve Fund by federal funds wire, call 1-800-89-
ASK-US. We will wire funds to you the next business day on
38
<PAGE>
which the Federal Reserve is open. You will earn dividends on the
day you request redemption by telephone.
We distribute net capital gains, if any, on all of the Funds
annually.
[margin] YOU'RE INVESTING IN THE
FUNDS BECAUSE YOU WANT YOUR MONEY
TO GROW. THE INVESTMENT INCOME
GENERATED BY A FUND IS DISTRIBUTED
TO YOU EITHER AS DIVIDENDS OR
CAPITAL GAINS, OR BOTH. YOU CAN
CHOOSE TO REINVEST OR TAKE CASH,
ACCORDING TO THE THREE OPTIONS
DESCRIBED IN THIS SECTION.
You can select from among the following distribution
options:
. REINVESTED You can have all of your dividends and
capital gains distributions reinvested in additional
shares of the same or any other Fund. Unless you choose
one of the other options, we will select this option for
you automatically;
. CASH & REINVESTED You can choose to have either your
dividends or your capital gains paid in cash and the
other will be reinvested in additional shares in the same
or any other Fund; or
. ALL CASH You can choose to have your dividends and
capital gains distributions paid in cash.
We make distributions for each Fund on a per share basis to
the shareholders of record as of the distribution date of that
Fund. We do this regardless of how long the shares have been
held. That means if you buy shares just before or on a record
date, you will pay the full price for the shares and then you may
receive a portion of the price back as a taxable distribution.
WHAT ABOUT TAXES?
FEDERAL TAXES* Dividends paid by a Fund from net investment
income, the excess of net short-term capital gain over net long-
term capital loss, and original issue discount or certain market
discount income will be taxable to shareholders as ordinary
income. Distributions paid by a Fund from the excess of net long-
term capital gain over net short-term capital loss will be
taxable as long-term capital gains regardless of how long the
shareholders have held their shares. These tax consequences will
apply regardless of whether distributions are received in cash or
reinvested in shares. A portion of the dividends paid to
corporate shareholders may qualify for the corporate dividends-
received deduction to the extent the Fund earns qualifying
dividends. We will notify you after each calendar year of the
amount and character of distributions you received from each Fund
for federal tax purposes.
39
<PAGE>
CAPITAL GAINS OR TAKE THEM IN
CASH, THEY ARE CONSIDERED BY THE
IRS TO BE TAXABLE INCOME.
For IRA's and pension plans, dividends and capital gains are
reinvested and not taxed until you receive a qualified
---
distribution from your IRA or pension plan.
You need to consider the tax implications of buying shares
immediately prior to a distribution. Investors who purchase
shares shortly before the record date for a distribution will pay
a per share price that includes the value of the anticipated
distribution. You will be taxed when you receive the distribution
even though the distribution represents a return of a portion of
the purchase price. You may want to call us at 1-800-89-ASK-US
before your purchase. We'll tell you if a distribution is
due.
Redemptions and exchanges of shares are taxable events which
may represent a gain or a loss for the shareholder.
Individuals and certain other classes of shareholders may be
subject to backup withholding of federal income tax on
distributions, redemptions and exchanges if they fail to furnish
their correct taxpayer identification number. Individuals,
corporations and other shareholders that are not U.S. persons
under the Code are subject to different tax rules. They may be
subject to nonresident alien withholding on amounts considered
ordinary dividends from the Fund.
When you sign your account application, you will be asked to
certify that your social security or taxpayer identification
number is correct. You will also be asked to certify that you are
not subject to backup withholding for failure to report income to
the Internal Revenue Service.
PENSION AND RETIREMENT SAVINGS PROGRAMS The tax rules
applicable to participants and beneficiaries in Pension and
Retirement Savings Programs vary according to the type of plan
and the terms and conditions of the plan. In general,
distributions from these plans are taxed as ordinary income.
Special favorable tax treatment may be available for certain
types of contributions and distributions. Adverse tax
consequences may result from contributions in excess of specified
limits:
(1) distributions prior to age 59 1/2 (subject to certain
exceptions);
(2) distributions that do not conform to specified
commencement and minimum distribution rules;
(3) aggregate distributions in excess of a specified annual
amount; and
(4) in other specified circumstances.
You should consult a qualified tax advisor for more information.
[margin] THERE ARE SPECIAL TAX
CONSIDERATIONS IF YOU ARE TAKING A
CASH DISTRIBUTION FROM A PENSION
PLAN AND ROLLING IT OVER TO AN IRA
IN ONE OF THE FUNDS. YOU NEED TO
DISCUSS THIS WITH YOUR TAX
ADVISER.
OTHER TAXES In addition to federal taxes, you may be subject to
state and local taxes on payments received from us. Depending on
the state tax rules pertaining to a shareholder, a portion of the
dividends paid by a Fund that come from direct obligations of the
U.S. Treasury and certain agencies may be
40
<PAGE>
exempt from state and local taxes. Check with your own tax
adviser regarding specific questions as to federal, state and
local taxes.
*For each taxable year, we intend to qualify each Fund as a
regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). Qualifying
regulated investment companies distributing substantially all of
their ordinary income and capital gains are not subject to
federal income or excise tax on any net investment income and net
realized capital gains distributed to shareholders. However, the
shareholders (you) are subject to tax on these distributions.
SHARE PRICE
HOW SHARE PRICE IS DETERMINED We value Fund securities,
primarily traded on a domestic securities exchange or NASDAQ, at
the last sale price on that exchange on the day the valuation is
made. We take price information on listed securities from the
exchange where the security is primarily traded. If no sale is
reported, we use the mean of the latest bid and asked prices. We
generally price securities traded over-the-counter the same way.
When market quotations are not readily available, we value
securities and other assets at fair value as determined in good
faith by the Board.
[margin] THE PRICE OF YOUR SHARES
IS REFERRED TO AS THEIR NET ASSET
VALUE. WE CALCULATE THE NET ASSET
VALUE EACH DAY THE NEW YORK STOCK
EXCHANGE (THE "EXCHANGE") IS
OPEN.
We will value all securities held by the Transamerica
Premier Cash Reserve Fund, and any short-term investments of the
other Funds with maturities of 60 days or less at the time of
purchase, on the basis of amortized cost when the Board
determines that amortized cost is fair value. Amortized cost
involves valuing an investment at its cost and a constant
amortization to maturity of any discount or premium, regardless
of the effect of assuming movements in interest rates. For more
information, see the Statement of Additional Information.
WHEN SHARE PRICE IS DETERMINED The price of your shares is their
net asset value. We determine the net asset value by calculating
the total value of the Fund's assets, deducting total
liabilities, and dividing the result by the number of shares
outstanding. Except for the Transamerica Premier Cash Reserve
Fund, we determine the net asset value only on days that the New
York Stock Exchange (the "Exchange") is open. We determine the
net asset value of the Transamerica Premier Cash Reserve Fund
only on days that the Federal Reserve is open.
[margin] WHEN YOU BUY OR SELL
SHARES, YOU GET THE SHARE PRICE
THAT WE DETERMINE AT THE CLOSE OF
THE EXCHANGE ON THE DAY WE RECEIVE
YOUR REQUEST. IF WE RECEIVE YOUR
REQUEST AFTER THE CLOSE OF THE
EXCHANGE,
41
<PAGE>
YOU GET THE SHARE PRICE AT THE
CLOSE OF THE FOLLOWING DAY.
If we receive your investment or redemption request before
the close of business on the Exchange, usually 4:00 p.m. Eastern
time, your share price for that transaction will be the price we
determine at the close of the Exchange that day. When investment
and redemption requests are received after the Exchange is
closed, we use the share price at the close of the Exchange the
next day the Exchange is open. We consider investment and
redemption requests by telephone to be received at the time of
your telephone call, assuming you've given us all required
information.
We consider purchase payments to be received only when your
check, wire, or automatic investment funds are received by us
along with all required information. We consider wired funds to
be received on the day they are deposited in the Company's bank
account. If you call us with wire instructions before the
Exchange closes, we usually deposit the money that day.
WHERE TO FIND INFORMATION ABOUT SHARE PRICE You can get the
current net asset values of your Funds by calling us at 1-800-89-
ASK-US. The net asset value of each Fund may also be published in
leading newspapers daily, once its net assets reach a certain
amount.
INVESTMENT ADVISER AND ADMINISTRATOR
INVESTMENT ADVISER SERVICES The Investment Adviser is
responsible for making investment decisions for the Funds. The
Investment Adviser is also responsible for the selection of
brokers and dealers to execute transactions for each Fund. Some
of these brokers or dealers may be affiliated persons of the
Company, the Investment Adviser, Administrator, or the
Distributor. Since it is our policy to seek the best price and
execution for each transaction, the Investment Adviser may give
consideration to brokers and dealers who provide us with
statistical information and other services in addition to
transaction services. Additional information about the selection
of brokers and dealers is provided in the Statement of Additional
Information.
Trading decisions for each of the Funds described in this
Prospectus are made by a team of expert managers and analysts
headed by a team leader. The team leader is primarily responsible
for the day-to-day decisions related to their Fund. They are
supported by the entire group of managers and analysts. The team
leader of any one Fund may be on another Fund team. The
transactions and performance of the Funds are reviewed
continuously by the Investment Adviser's senior officers.
Here's a listing and brief biography of the team leaders for
each of the Funds:
. TRANSAMERICA PREMIER EQUITY FUND Glen E. Bickerstaff. Vice
President, Senior Fund Manager and Director of Research,
Transamerica Investment Services. B.S., University of Southern
California, 1980. Vice President,
42
<PAGE>
Fish & Lederer Investment Counsel, 1986-1987. Vice President,
Pacific Century Advisers, 1980-1986.
. TRANSAMERICA PREMIER INDEX FUND Christopher J. Bonavico.
Equity Trader & Analyst, Transamerica Investment Services.
M.B.A., New York University, 1993. B.S., University of
Delaware, 1987. Equity Research Analyst, Salomon Brothers,
1989-1993. Business Analyst, Planning & Financial Management,
Chase Manhattan Bank, 1988-1989.
. TRANSAMERICA PREMIER BOND FUND Sharon K. Kilmer, C.F.A. Vice
President and Senior Fund Manager, Transamerica Investment
Services. Member of the Los Angeles Society of Financial
Analysts. M.B.A., University of Southern California, 1982.
B.A., University of Southern California (Magna Cum Laude, Phi
Beta Kappa), 1980. Joined Transamerica in 1982.
. TRANSAMERICA PREMIER BALANCED FUND BONDS Sharon K. Kilmer,
C.F.A. (see above).
STOCKS Jeffrey S. Van Harte, C.F.A. Vice President and Senior
Fund Manager, Transamerica Investment Services. Member of San
Francisco Society of Financial Analysts. B.A., California
State University at Fullerton, 1980. Securities Analyst and
Trader, Transamerica Investment Services, 1980-1984.
. TRANSAMERICA PREMIER SHORT-INTERMEDIATE GOVERNMENT FUND AND
TRANSAMERICA PREMIER CASH RESERVE FUND Kevin J. Hickam,
C.F.A. Assistant Vice President and Fund Manager, Transamerica
Investment Services. Member of Los Angeles Society of
Financial Analysts. M.B.A. Cornell University, 1989. B.S.,
California State University at Chico, 1984. Senior Accountant,
Santa Clara Savings, 1984-1987.
ADVISER FEE For its services to the Funds, the Investment
Adviser receives an Adviser Fee. This fee is based on an annual
percentage of the average daily net assets of each Fund. It is
accrued daily, and paid monthly.
The annual fee percentages for the Transamerica Premier
Equity Fund are .85% on the first $1 billion of assets. This
reduces to: .82% on the next $1 billion; and finally .80% on
assets over $2 billion. The corresponding fee percentages for the
Transamerica Premier Index Fund are .30%, .30%, and .30%
respectively. The corresponding fee percentages for the
Transamerica Premier Bond Fund are .60%, .57%, and .55%,
respectively. The corresponding fee percentages for the
Transamerica Premier Balanced Fund are .75%, .72%, and .70%,
respectively. The corresponding fee percentages for the
Transamerica Premier Short-Intermediate Government Fund are .55%,
.52%, and .50%, respectively. The corresponding fee percentages
for the Transamerica Premier Cash Reserve Fund are .35%, .35%,
and .35%, respectively.
The Investment Adviser will reduce the Adviser Fee each Fund
must pay if the fee exceeds any state-imposed restrictive expense
limitations. This excludes permissible items, such as brokerage
commissions, Rule 12b-1
43
<PAGE>
payments, interest, taxes and litigation expenses. The Investment
Adviser may waive some or all of these fees from time to time at
its discretion.
The Investment Adviser may from time to time reimburse the
Funds for some or all of their operating expenses, including 12b-
1 fees. Such reimbursements will increase a Fund's return. This
is intended to make the Funds more competitive. This practice may
be terminated at any time.
ADMINISTRATOR SERVICES The Investment Adviser pays part of the
Adviser Fee to the Administrator. The Administrator provides
office space for the Company and pays the salaries, fees and
expenses of all Company officers and those directors affiliated
with Transamerica Corporation and not already paid by the
Investment Adviser. Each Fund pays all of its expenses not
assumed by the Administrator. This includes transfer agent and
custodian fees and expenses, legal and auditing fees, printing
costs of reports to shareholders, registration fees and expenses,
12b-1 fees, and fees and expenses of directors unaffiliated with
Transamerica Corporation.
The Administrator may from time to time reimburse the Funds
for some or all of their operating expenses, including 12b-1
fees. Such reimbursements will increase a Fund's return. This is
intended to make the Funds more competitive. This practice may be
terminated at any time.
GENERAL INFORMATION
TRANSAMERICA INVESTORS, INC. Transamerica Investors, Inc. was
organized as a Maryland corporation on February 22, 1995. The
Company is registered with the Securities and Exchange Commission
under the 1940 Act as an open-end, diversified management
investment company of the series type. Each Fund constitutes a
separate series. Each series has two classes of shares, Investor
Shares and Adviser Shares. The fiscal year-end of each of the
Funds is December 31.
The Company is authorized to issue and sell multiple classes
of shares for each of the Funds. The Company reserves the right
to issue additional classes of shares in the future without the
consent of shareholders, and can allocate any remaining
unclassified shares or reallocate any unissued classified shares.
Except for the differences noted below and elsewhere in this
Prospectus, each share of a Fund has equal dividend, redemption
and liquidation rights with other shares of the Funds and when
issued, is fully paid and nonassessable. Each share of each class
represents an identical legal interest in the same investments of
a Fund, except that Adviser Shares have higher distribution fees.
Each class has certain other expenses related solely to that
class. Each class will have exclusive voting rights under the
12b-1 distribution plan. In the event that a special meeting of
shareholders is called, separate votes are taken by each class
only if a matter affects, or requires the vote of, just that
class. Although the legal rights of holders of each class of
shares are identical, it is likely that the difference in
expenses will result in different net asset values and dividends.
The classes may have different exchange privileges.
As a Maryland corporation, the Company is not required to
hold regular annual meetings of shareholders. Ordinarily there
will be no
44
<PAGE>
shareholder meetings, unless requested by shareholders holding
10% or more of the outstanding shares, or unless required by the
1940 Act or Maryland law. You are entitled to cast one vote for
each share you own of each Fund. At a special shareholders
meeting, if one is called, issues that affect all the Funds in
substantially the same way will be voted on by all shareholders,
without regard to the Funds. Issues that do not affect a Fund
will not be voted on by that Fund. Issues that affect all Funds,
but in which their interests are not substantially the same, will
be voted on separately by each Fund.
CUSTODIAN AND TRANSFER AGENT Under a Custodian Agreement, State
Street Bank and Trust Company ("State Street"), 225 Franklin
Street, Boston, Massachusetts 02110, holds all securities and
cash assets of the Funds, provides recordkeeping services, and
serves as the Funds' custodian. State Street is authorized to
deposit securities in securities depositories or to use services
of sub-custodians.
Under a Transfer Agency Agreement, Boston Financial Data
Services ("BFDS"), Two Heritage Drive, Quincy, Massachusetts
02171, serves as the Funds' transfer agent. The transfer agent is
responsible for: a) opening and maintaining your account; b)
reporting information to you about your account; c) paying you
dividends and capital gains; and d) handling your requests for
exchanges, transfers and redemptions.
[sidebar] BOSTON FINANCIAL DATA
SERVICES, ONE OF THE BIGGEST AND
MOST EXPERIENCED TRANSFER AGENTS IN
THE BUSINESS, HANDLES ALL YOUR
ACCOUNT TRANSACTIONS AND PROVIDES
REPORTS TO YOU ABOUT YOUR ACCOUNT.
FOR INFORMATION ABOUT YOUR ACCOUNT,
CALL THE TRANSAMERICA INVESTORS
TEAM AT 1-800-89-ASK-US.
DISTRIBUTOR Transamerica Securities Sales Corporation ("TSSC")
is the principal underwriter and distributor of the shares of
each of the Funds. TSSC has an agreement with Transamerica
Financial Resources, Inc. ("TFR") to sell Adviser Shares through
its registered representatives. TSSC can also enter into
arrangements where Adviser Shares will be sold by other broker-
dealers, subject to the approval of the Board.
Both TSSC and TFR are wholly-owned subsidiaries of
Transamerica Insurance Corporation of California, which is a
wholly-owned subsidiary of Transamerica Corporation. TSSC and TFR
are registered with the Securities and Exchange Commission as
broker-dealers. They are also members of the National Association
of Securities Dealers, Inc.
DISTRIBUTION PLAN Each Fund makes payments to TSSC according to
a plan adopted to meet the requirements of Rule 12b-1 under the
Investment Company Act of 1940. These fees accrue daily and are
based on an annual percentage of the daily average net value of
the assets represented by each class of shares.
The 12b-1 plan of distribution and related distribution
contracts require the Funds to pay distribution and service fees
to TSSC as compensation for its activities, not as reimbursement
for specific expenses. If TSSC's expenses are more than its fees
for any Fund, the Fund will not have to pay more than those fees.
If TSSC's expenses are less than the fees, it will keep the
excess. The
45
<PAGE>
Company will pay the distribution and service fees to TSSC until
the distribution contracts are terminated or not renewed. In that
event, TSSC's expenses over and above any fees through the
termination date will be TSSC's sole responsibility and not the
obligation of the Company. The Transamerica Investors, Inc. Board
of Directors (the "Board") will annually review the distribution
plan and contracts and TSSC's expenses for each class of shares.
For the Adviser Shares class, there is an annual 12b-1
distribution fee of .75% of the average daily net assets of the
Adviser Shares of each Fund, except the Transamerica Premier Cash
Reserve Fund. There is no distribution fee for the Transamerica
Premier Cash Reserve Fund. There is also an annual 12b-1 service
fee of .25% of the average daily net assets of the Adviser Shares
of each Fund. The distribution fee covers compensation to
registered representatives and other sales personnel involved
with selling Adviser Shares, as well as preparation, printing and
mailing of the Prospectus, Statement of Additional Information,
sales literature, other media advertising, and related expenses.
The service fee compensates sales people for ongoing shareholder
information and advice, and office expenses such as rent,
communications equipment, employee salaries, and other overhead
costs.
From time to time, and for one or more Funds within each
class of Shares, the Distributor may waive all or any portion of
these fees at its discretion. All or any portion of these fees
may be paid by the Administrator for the Company, at the
discretion of the Administrator.
DEALER CONCESSION Pursuant to a selling agreement between TSSC
and TFR, a dealer concession is paid to TFR equal to 1.00% on all
Adviser Shares purchased within the first year of the date of the
initial purchase by each shareholder, and commencing on the 13th
month after the date of the initial purchase, payments of 0.25%
on an annual basis on all Adviser Share assets. The 0.25% trailer
will be paid quarterly at a rate of 0.0625% of the quarter-end
asset balance.
PERFORMANCE INFORMATION The Company may publish performance
information about the Funds. Fund performance usually will be
shown either as cumulative total return or average periodic total
return compared with other mutual funds by public ranking
services, such as Lipper Analytical Services, Inc. Cumulative
total return is the actual performance over a stated period of
time. Average annual total return is the hypothetical return,
compounded annually, that would have produced the same cumulative
return if the Fund's performance had been constant over the
entire period. Each Fund's total return shows its overall dollar
or percentage change in value. This includes changes in the share
price and reinvestment of dividends and capital gains.
The performance of a Fund can also be measured in terms of
yield. Each Fund's yield shows the rate of income the Fund earns
on its investments as a percentage of the Fund's share price.
A Fund can also separate its cumulative and average annual
total returns into income results and capital gains or losses.
Each Fund can quote its total returns on a before-tax or after-
tax basis.
The performance information which may be published for the
Funds is historical. It is not intended to represent or guarantee
future results. The value of your Fund shares can be more or less
than their original cost when they are redeemed. For more
information, see the Statement of Additional Information.
46
<PAGE>
MATERIAL LEGAL PROCEEDINGS There are no material legal
proceedings to which the Company is subject, or to which the
Investment Adviser, the Administrator, or the Distributor are
subject which are likely to have a material adverse effect on
their ability to perform their obligations to the Company, or on
the Company itself.
SUMMARY OF BOND RATINGS Following is a summary of the grade
indicators used by two of the most prominent, independent rating
agencies (Moody's Investors Service, Inc. and Standard & Poor's
Corporation) to rate the quality of bonds. The first four
categories are generally considered investment quality bonds.
Those below that level are of lower quality, commonly referred to
as "junk bonds."
<TABLE>
<CAPTION>
STANDARD &
----------
INVESTMENT GRADE MOODY'S POOR'S
---------------- ------- ------
<S> <C> <C>
Highest quality Aaa AAA
High quality Aa AA
Upper medium A A
Medium, speculative features Baa BBB
LOWER QUALITY
-------------
Moderately speculative Ba BB
Speculative B B
Very speculative Caa CCC
Very high risk Ca CC
Highest risk, may not be
paying interest C C
In arrears or default C D
</TABLE>
For more detailed information on bond ratings, including
gradations within each category of quality, see the Statement of
Additional Information.
PENSION AND RETIREMENT SAVINGS PROGRAMS Following is a listing
of Pension and Retirement Savings Programs.
. 401(a), 401(k), profit sharing, or money purchase pension
plans (including KEOGH/HR 10 Plans) designed to benefit
employees of corporations, partnerships, and sole proprietors.
. Section 403(b)(7) (Tax-Sheltered Annuity) Plans for employees
of educational organizations or other qualifying, tax exempt
organizations.
. Individual Retirement Account ("IRA"), or comparable program,
for individuals and Simplified Employee Pension ("SEP") Plans
for employers (including sole proprietors) and their
employees.
. Section 457 deferred compensation plans for employees of state
governments and tax exempt organizations.
. Employers' non-qualified plans or savings programs, that do
not qualify for federal tax advantages.
47
<PAGE>
. Other retirement plans or savings programs allowed by the
Board.
[sidebar] TRANSAMERICA PREMIER
FUNDS PROVIDE A GOOD SELECTION OF
FUNDS FOR YOUR RETIREMENT OR
SAVINGS NEEDS.
48
<PAGE>
TRANSAMERICA
PREMIER FUNDS
ADVISER SHARES
NEW INVESTORS
For information on Transamerica Premier Funds
call toll-free:
1-800-89-ASK-US
and
Mail your application to:
Transamerica Investors
P.O. Box 9232
Boston, MA 02205-9232
CURRENT SHAREHOLDERS
For information on net asset values, make telephone
transactions, etc. call toll-free:
1-800-89-ASK-US
or
Send your purchase, redemption and other requests to:
Transamerica Investors
P.O. Box 9232
Boston, MA 02205-9232
49
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION:
SEPTEMBER 22, 1995
--
TRANSAMERICA
PREMIER FUNDS
YOUR GUIDE This Statement of Additional Information will provide
you with details beyond what is available in the Prospectus.
Please refer to the Prospectus first, then to this document.
Please read it carefully. Save it for future reference.
THE PREMIER FUNDS
TRANSAMERICA PREMIER EQUITY FUND The Fund seeks to maximize long-
term capital appreciation.
TRANSAMERICA PREMIER INDEX FUND The Fund seeks to track the
performance of the Standard & Poor's 500 Composite Stock Price
Index, also known as the S&P 500 Index (the "Index").
TRANSAMERICA PREMIER BOND FUND The Fund seeks to achieve a high
total return (income plus capital changes) consistent with
preservation of principal.
TRANSAMERICA PREMIER BALANCED FUND The Fund seeks to achieve
long-term capital growth and current income with a secondary
objective of capital preservation, by balancing its investments
among stocks, bonds, and cash.
TRANSAMERICA PREMIER SHORT-INTERMEDIATE GOVERNMENT FUND The Fund
seeks to achieve a high level of current income with the security
of investing in government securities.
TRANSAMERICA PREMIER CASH RESERVE FUND This is a money market
fund that seeks to maximize current income consistent with
liquidity and preservation of principal.
ABOUT THE PROSPECTUS This Statement of Additional Information is
not a prospectus. It should be read in connection with the
current Prospectus dated September, 1995. The Prospectus is
available without charge upon written request to: Transamerica
Investors, Inc., [insert fulfillment address] or telephone
request to 1-800-89-ASK-US.
Terms used in the Prospectus are incorporated in this Statement
of Additional Information.
1
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
------- ----
<S> <C>
INVESTMENT RESTRICTIONS.................................
DESCRIPTION OF CORPORATE BOND RATINGS...................
DESCRIPTION OF FIXED-INCOME INSTRUMENTS.................
INVESTMENT PROCEDURES AND RISK
CONSIDERATIONS FOR THE FUNDS...........
High Yield ("Junk") Bonds..........................
Restricted and Illiquid Securities.................
Derivatives........................................
Options on Securities and Securities Indexes.......
Risks Associated with Options Transactions.........
Futures Contracts and Options on Futures Contracts.
Swap Transactions..................................
Foreign Securities.................................
Segregated Accounts................................
Purchase of "When Issued" Securities...............
Lending of Securities..............................
Borrowing Policies of the Funds....................
Repurchase Agreements..............................
Reverse Repurchase Agreements and Leverage.........
Other Investment Techniques And Opportunities......
FUND TURNOVER....................................
MANAGEMENT OF THE COMPANY...............................
INVESTMENT ADVISORY AND OTHER SERVICES..................
REDEMPTION OF SHARES....................................
EXCHANGE PRIVILEGE......................................
TELEPHONE TRANSACTIONS..................................
BROKERAGE ALLOCATION....................................
DETERMINATION OF NET ASSET VALUE........................
PERFORMANCE INFORMATION.................................
TAXES...................................................
OTHER INFORMATION ......................................
</TABLE>
2
<PAGE>
FINANCIAL STATEMENTS....................................
3
<PAGE>
INVESTMENT RESTRICTIONS
Investment restrictions numbered 1 through 10 below have
been adopted by the Company as fundamental policies of the Funds.
Under the Investment Company Act of 1940, as amended (the "1940
Act"), a fundamental policy may not be changed with respect to a
Fund without the vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of the Fund. Each Fund
will operate as a "diversified company" within the meaning of the
1940 Act. Investment restrictions 11 through 16 may be changed by
a vote of the Board of Directors of the Company (the "Board") at
any time.
1. BORROWING Each Fund may borrow from banks for temporary
or emergency (not leveraging) purposes, including the meeting of
redemption requests and cash payments of dividends and
distributions that might otherwise require the untimely
disposition of securities, in an amount not to exceed 33-1/3% of
the value of the Fund's total assets (including the amount
borrowed) valued at market less liabilities (not including the
amount borrowed) at the time the borrowing is made. Whenever
borrowings, not including reverse repurchase agreements, of 5% or
more of a Fund's total assets are outstanding, the Fund will not
make any additional investments.
2. LENDING No Fund may lend its assets or money to other
persons, except through (a) purchasing debt obligations, (b)
lending securities in an amount not to exceed 33-1/3% of the
Fund's assets taken at market value, (c) entering into repurchase
agreements (d) trading in financial futures contracts, index
futures contracts, securities indexes and options on financial
futures contracts, options on index futures contracts, options on
securities and options on securities indexes and (e) entering
into variable rate demand notes.
3. 5% FUND RULE No Fund may purchase securities (other
than Government Securities) of any issuer if, as a result of the
purchase, more than 5% of the Fund's total assets would be
invested in the securities of the issuer, except that up to 25%
of the value of the total assets of each Fund, other than the
Transamerica Premier Cash Reserve Fund, may be invested without
regard to this limitation. All securities of a foreign government
and its agencies will be treated as a single issuer for purposes
of this restriction. Transamerica Premier Cash Reserve Fund may
invest more than 5%, but not more than 25%, in the securities of
one issuer for a period not to exceed three business days.
4. 10% ISSUER RULE No Fund may purchase more than 10% of
the voting securities of any one issuer, or more than 10% of the
outstanding securities of any class of issuer, except that (a)
this limitation is not applicable to a Fund's investments in
Government Securities and (b) up to 25% of the value of the
assets of a Fund may be invested without regard to these 10%
limitations. All securities of a foreign government and its
agencies will be treated as a single issuer for purposes of this
restriction.
4
<PAGE>
5. 25% INDUSTRY RULE No Fund may invest more than 25% of
the value of its total assets in securities issued by companies
engaged in any one industry, including non-domestic banks or any
foreign government. This limitation does not apply to securities
issued or guaranteed by the United States Government, its
agencies or instrumentalities. For the Transamerica Premier Cash
Reserve Fund, investments in the following are not subject to the
25% limitation: repurchase agreements and securities loans
collateralized by United States government securities,
certificates of deposit, bankers' acceptances, and obligations
(other than commercial paper) issued or guaranteed by United
States banks and United States branches of foreign banks.
6. UNDERWRITING No Fund may underwrite any issue of
securities, except to the extent that the sale of securities in
accordance with the Fund's investment objective, policies and
limitations may be deemed to be an underwriting, and except that
the Fund may acquire securities under circumstances in which, if
the securities were sold, the Fund might be deemed to be an
underwriter for purposes of the Securities Act of 1933, as
amended.
7. REAL ESTATE No Fund may purchase or sell real estate or
real estate limited partnership interests, or invest in oil, gas
or mineral leases, or mineral exploration or development
programs, except that a Fund may (a) invest in securities secured
by real estate, mortgages or interests in real estate or
mortgages, (b) purchase securities issued by companies that
invest or deal in real estate, mortgages or interests in real
estate or mortgages, (c) engage in the purchase and sale of real
estate as necessary to provide it with an office for the
transaction of business or (d) acquire real estate or interests
in real estate securing an issuer's obligations, in the event of
a default by that issuer.
8. SHORT SALES No Fund may make short sales of securities
or maintain a short position, unless at all times when a short
position is open, the Fund owns an equal amount of the securities
or securities convertible into or exchangeable for, without
payment of any further consideration, securities of the same
issue as, and equal in amount to, the securities sold short.
9. MARGIN PURCHASES No Fund may purchase securities on
margin, except that a Fund may obtain any short-term credits
necessary for the clearance of purchases and sales of securities.
For purposes of this restriction, the deposit or payment of
initial or variation margin in connection with futures contracts,
financial futures contracts or related options, and options on
securities, and options on securities indexes will not be deemed
to be a purchase of securities on margin by a Fund.
10. COMMODITIES No Fund may invest in commodities, except
that each Fund (other than the Transamerica Premier Cash Reserve
Fund) may invest in futures contracts (including financial
futures contracts or securities index futures contracts) and
related options and other similar contracts as described in this
Statement of Additional Information and in the Prospectus.
5
<PAGE>
11. SECURITIES OF OTHER INVESTMENT COMPANIES No Fund may
purchase securities of other investment companies, other than a
security acquired in connection with a merger, consolidation,
acquisition, reorganization or offer of exchange and except as
permitted under the 1940 Act, if as a result of the purchase: (a)
more than 10% of the value of the Fund's total assets would be
invested in the securities of investment companies; (b) more than
5% of the value of the Fund's total assets would be invested in
the securities of any one investment company; or (c) the Fund
would own more than 3% of the total securities of any investment
company.
12. INVEST FOR CONTROL No Fund may invest in companies for
the purposes of exercising control or management.
13. 3-YEAR RULE No Fund may purchase securities (other
than Government Securities) if, as a result of the purchase, the
Fund would then have more than 5% of its total assets invested in
securities of companies (including predecessors) that have been
in continuous operation for fewer than three years. This
restriction will apply to the entity supplying the revenues from
which the issue is to be paid.
14. AFFILIATED PARTIES No Fund may purchase or retain
securities of any company if any of the Company's officers or
directors or any officer or director of the Investment Adviser
who individually own 1/2 of 1% of the company, together own more
than 5% of the company.
15. WARRANTS No Fund may purchase warrants (other than
warrants acquired by the Fund as part of a unit or attached to
securities at the time of purchase) if, as a result, the
investments (valued at the lower of cost or market) would exceed
5% of the value of the Fund's net assets of which not more than
2% of the value of the Fund's net assets may be invested in
warrants not listed on the New York Stock Exchange, Inc. (the
"NYSE") or the American Stock Exchange. For purposes of this
restriction, warrants acquired by a Fund in units or attached to
securities may be deemed to be without value. The Transamerica
Premier Cash Reserve Fund may not invest in any form of
warrants.
6
<PAGE>
16. RESTRICTED AND ILLIQUID SECURITIES The Funds will each
not invest more than 10% of their total assets in securities that
are not registered or are offered in an exempt, non-public
offering ("restricted securities") under the Securities Act of
1933 ("1933 Act"). However, such restriction will not apply to
restricted securities offered and sold to "qualified
institutional buyers" under Rule 144A of the 1933 Act or to
foreign securities which are offered or sold outside the United
States in accordance with Regulation S of the 1933 Act. In
addition, no Fund will invest more than 15% (10% for the
Transamerica Premier Cash Reserve Fund) of its net assets in
illiquid investments, which includes most repurchase agreements
maturing in more than seven days, currency and interest rate
swaps, time deposits with a notice or demand period of more than
seven days, certain over-the-counter option contracts,
participation interests in loans, securities that are not readily
marketable, and restricted securities, unless the Investment
Adviser determines, based upon a continuing review of the trading
markets and available reliable price information for the specific
security, that such restricted securities are eligible under Rule
144A and are liquid. For purposes of this restriction, illiquid
securities are securities that cannot be disposed of by a Fund
within seven days in the ordinary course of business at
approximately the amount at which the Fund has valued the
securities. In no event, will any Fund's investment in illiquid
restricted securities, in the aggregate, exceed 15% of its
assets. If through a change in values, net assets, or other
circumstances, any Fund were in a position where more than 15% of
its assets were invested in illiquid securities, it would take
appropriate steps to protect liquidity.
The Board has adopted guidelines and delegated to the
Investment Adviser the daily function of determining and
monitoring the liquidity of restricted securities. The Board,
however, will retain sufficient oversight and be ultimately
responsible for the determinations. When no market, dealer, or
matrix quotations are available for a security, illiquid
investments are priced at fair value as determined in good faith
by a committee appointed by the Board. Since it is not possible
to predict with assurance exactly how the market for restricted
securities sold and offered under Rule 144A will develop, the
Board will carefully monitor each Fund's investments in these
securities, focusing on such important factors, among others, as
valuation, liquidity, and availability of information. To the
extent that qualified institutional buyers become for a time
uninterested in purchasing these restricted securities, this
investment practice could have the effect of decreasing the level
of liquidity in a Fund.
The purchase price and subsequent valuation of restricted
securities normally reflect a discount from the price at which
such securities would trade if they were not restricted, since
the restriction makes them less liquid. The amount of the
discount from the prevailing market prices is expected to vary
depending upon the type of security, the character of the issuer,
the party who will hear the expenses of registering the
restricted securities, and prevailing supply and demand
conditions.
The Company may make commitments more restrictive than the
restrictions listed above with respect to a Fund to permit the
sale of shares of the Fund in certain states. If the Company
determines that any such commitment is no longer in the best
interests of a Fund and its shareholders, the Company will revoke
the commitment by terminating the sale of shares of the Fund in
the state involved or may otherwise modify its commitment based
on a change in the state's restrictions. The percentage
limitations in the restrictions listed above apply at the time of
purchases of securities.
7
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DESCRIPTION OF CORPORATE BOND RATINGS
Moody's Investors Service, Inc. and Standard and Poor's
Corporation are two prominent independent rating agencies, who
rate the quality of bonds. Following are expanded explanations of
the ratings shown in the Prospectus.
MOODY'S INVESTORS SERVICE, INC.
Aaa: Bonds with this rating are judged to be of the best
quality. They carry the smallest degree of investment risk.
Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure.
Aa: Bonds with this rating are judged to be of high
quality by all standards. Together with the Aaa group they
comprise what are generally known as high grade bonds. They are
rated lower than the best bonds because margins of protection may
not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude.
A: Bonds with this rating possess many favorable
investment attributes and are to be considered as upper medium
grade obligations. Factors giving security to principal and
interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the
future.
Baa: Bonds with this rating are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate
for the present but certain protective elements may be lacking or
may be characteristically unreliable over any great length of
time. Such bonds lack outstanding investment characteristics and
in fact have speculative characteristics as well.
Ba: Bonds with this rating are judged to have speculative
elements; their future cannot be considered as well assured.
Often the protection of interest and principal payments may be
very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds with this rating generally lack characteristics
of desirable investments. Assurance of interest and principal
payments or of maintenance of other terms of the contract over
any long period of time may be small.
Caa: Bonds with this rating are of poor standing. Such
issues may be in default or there may be present elements of
danger with respect to principal or interest.
Ca: Bonds with this rating represent obligations which are
speculative in a high degree. Such issues are often in default or
have other marked shortcomings.
8
<PAGE>
C: Bonds with this rating are the lowest rated class of
bonds and issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment standing.
Moody's applies numerical modifiers 1, 2 and 3 in each
generic rating classification from Aa through B in its corporate
bond rating system. The modifier 1 indicates that the security
ranks in the higher end of its generic rating category; the
modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic
rating category.
Generally, investment-grade debt securities are those rated
Baa3 or better by Moody's.
STANDARD & POOR'S CORPORATION
AAA: This rating is the highest rating assigned by Standard
& Poor's. Capacity to pay interest and repay principal is very
strong.
AA: This rating indicates a very strong capacity to pay
interest and repay principal and differs from the higher rated
issues only in small degree.
A: This rating indicates a strong capacity to pay
interest and repay principal, although it is somewhat more
susceptible to the adverse effects of changes in circumstances
and economic conditions than debt in higher rated categories.
BBB: This rating indicates an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal for debt in this
category than in higher rated categories.
BB, B, CCC, CC: These ratings indicate, on balance, a
predominantly speculative capacity of the issuer to pay interest
and repay principal in accordance with the terms of the
obligation. BB indicates the lowest degree of speculation and CC
the highest degree of speculation. While such debt will likely
have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to
adverse conditions.
C: This rating is reserved for income bonds on which no
interest is being paid.
D: This rating indicates debt in default, and payment of
interest and/or repayment of principal is in arrears.
The ratings from "AA" to "B" may be modified by the addition
of a plus or minus sign to show relative standing within the
major rating categories, for example A- or B+.
Generally, investment-grade debt securities are those rated
BBB- or better by Standard & Poor's.
<PAGE>
DESCRIPTION OF FIXED-INCOME INSTRUMENTS
U.S. GOVERNMENT OBLIGATIONS Securities issued or guaranteed as to
principal and interest by the United States Government include a
variety of Treasury securities, which differ in their interest
rates, maturities and times of issuance. Treasury bills have a
maturity of one year or less; Treasury notes have maturities of
one to ten years; and Treasury bonds can be issued with any
maturity period but generally have a maturity of greater than ten
years. Agencies of the United States Government which issue or
guarantee obligations include, among others, the Export-Import
Bank of the United States, Farmers Home Administration, Federal
Housing Administration, Government National Mortgage Association,
Maritime Administration, Small Business Administration and The
Tennessee Valley Authority. Obligations of instrumentalities of
the United States Government include securities issued or
guaranteed by, among others, banks of the Farm Credit System, the
Federal National Mortgage Association, Federal Home Loan Banks,
Federal Home Loan Mortgage Corporation, Student Loan Marketing
Association, Federal Intermediate Credit Banks, Federal Land
Banks, Banks for Cooperatives, and the U.S. Postal Service. Some
of these securities are supported by the full faith and credit of
the U.S. Treasury; others are supported by the right of the
issuer to borrow from the Treasury, while still others are
supported only by the credit of the instrumentality.
CERTIFICATES OF DEPOSIT Certificates of deposit are generally
short-term, interest-bearing negotiable certificates issued by
banks or savings and loan associations and savings banks against
funds deposited in the issuing institution.
TIME DEPOSITS Time deposits are deposits in a bank or other
financial institution for a specified period of time at a fixed
interest rate for which a negotiable certificate is not received.
Certain time deposits may be considered illiquid.
BANKERS' ACCEPTANCE A bankers' acceptance is a draft drawn on a
commercial bank by a borrower usually in connection with an
international commercial transaction (to finance the import,
export, transfer or storage of goods). The borrower is liable for
payment as well as the bank, which unconditionally guarantees to
pay the draft at its face amount on the maturity date. Most
acceptances have maturities of six months or less and are traded
in secondary markets prior to maturity.
COMMERCIAL PAPER Commercial paper refers to short-term, unsecured
promissory notes issued by corporations to finance short-term
credit needs. Commercial paper is usually sold on a discount
basis and has a maturity at the time of issuance not exceeding
270 days.
VARIABLE RATE, FLOATING RATE, OR VARIABLE AMOUNT SECURITIES
Variable rate, floating rate, or variable amount securities are
short-term unsecured promissory notes issued by corporations to
finance short-term credit needs. These are interest-bearing notes
on which the interest rate generally fluctuates on a scheduled
basis.
<PAGE>
CORPORATE DEBT SECURITIES Debt issued by a corporation that pays
interest and principal to the holders at specified times.
ASSET-BACKED SECURITIES Asset-backed securities are securities
which represent an undivided fractional interest in a trust whose
assets generally consist of mortgages, motor vehicle retail
installment sales contracts, or other consumer-based loans.
PARTICIPATION INTERESTS IN LOANS A participation interest in a
loan entitles the purchaser to receive a portion of principal and
interest payments due on a commercial loan extended by a bank to
a specified company. The purchaser of such an interest has no
recourse against the bank if payments of principal and interest
are not made by the borrower and generally relies on the bank to
administer and enforce the loan's terms.
INTERNATIONAL ORGANIZATION OBLIGATIONS International
organization obligations include obligations of those
organizations designated or supported by U.S. or foreign
government agencies to promote economic reconstruction and
development or international banking, and related government
agencies. Examples include the International Bank for
Reconstruction and Development (the World Bank), the European
Coal and Steel Community, the Asian Development Bank, and the
InterAmerican Development Bank.
CUSTODY RECEIPTS A Fund may acquire custody receipts in
connection with securities issued or guaranteed as to principal
and interest by the U.S. Government, its agencies, authorities or
instrumentalities. Such custody receipts evidence ownership of
future interest payments, principal payments or both on certain
notes or bonds issued by the U.S. Government, its agencies,
authorities or instrumentalities. These custody receipts are
known by various names, including "Treasury Receipts," "Treasury
Investors Growth Receipts" ("TIGRs"), and "Certificates of
Accrual on Treasury Securities" ("CATS"). For certain securities
law purposes, custody receipts are not considered U.S. Government
securities.
PASS-THROUGH SECURITIES The Funds may invest in mortgage pass-
through securities such as Government National Mortgage
Association ("GNMA") certificates or Federal National Mortgage
Association ("FNMA") and other mortgage-backed obligations, or
modified pass-through securities such as collateralized mortgage
obligations issued by various financial institutions. In
connection with these investments, early repayment of investment
principal arising from prepayments of principal on the underlying
mortgage loans due to the sale of the underlying property, the
refinancing of the loan, or foreclosure may expose the Fund to a
lower rate of return upon reinvestment of the principal.
Prepayment rates vary widely and may be affected by changes in
market interest rates. In periods of falling interest rates, the
rate of prepayment tends to increase, thereby shortening the
actual average life of the mortgage-related security. Conversely,
when interest rates are rising, the rate of prepayment tends to
decrease, thereby lengthening the actual average life of the
mortgage-related security. Accordingly, it is not possible to
accurately predict the average life of a particular pool of pass-
through securities. Reinvestment of prepayments may occur at
higher or lower rates than the original yield on the
certificates. Therefore, the actual maturity and realized yield
on pass-through or modified pass-through mortgage-related
securities will vary based upon the prepayment
<PAGE>
experience of the underlying pool of mortgages. For purposes of
calculating the average life of the assets of the relevant Fund,
the maturity of each of these securities will be the average life
of such securities based on the most recent or estimated annual
prepayment rate.
INVESTMENT PROCEDURES AND RISK CONSIDERATIONS FOR THE FUNDS
HIGH YIELD ("JUNK") BONDS High-yield bonds (commonly called
"junk" bonds) are lower rated bonds that involve a higher degree
of credit risk. Credit risk is the risk that the issuer of the
bonds will not be able to make interest or principal payment on
time. If this happened to a bond in a Fund, the Fund would lose
some of its income, and could expect a decline in the market
value of the securities affected. So the Investment Adviser needs
to carefully analyze the financial condition of companies issuing
junk bonds. The prices of junk bonds tend to be more reflective
of prevailing economic and industry conditions, issuers' unique
financial situations, and the bonds' coupon than to small changes
in the level of interest rates. But during an economic downturn
or a period of rising interest rates, highly leveraged companies
may have trouble making principal and interest payments, meeting
projected business goals, and obtaining additional financing.
Junk bonds' values will generally decrease in a rising interest
rate market.
Junk bonds may contain "call" provisions, which enable the
issuers of the bond to redeem the bond at will. If the issuer
exercises this privilege during a declining interest rate market,
the Fund would replace the bond most likely with a lower yield
bond, resulting in a lower return for investors.
Periods of economic or political uncertainty and change can
create some volatility for junk bonds. Since the last major
economic recession, there has been a substantial increase in the
use of high-yield debt securities to fund highly leveraged
corporate acquisitions and restructurings. Past experience with
high-yield securities in a prolonged economic downturn may not
provide an accurate indication of future performance during such
periods. Lower rated securities may also be harder to sell than
higher rate securities because of bad publicity and investor
perceptions of this market, as well as new or proposed laws
dealing with high yield securities. For many junk bonds there is
no established retail secondary market. As a result, it may be
difficult for the Investment Adviser to accurately value the
bonds because they cannot rely on available, objective data.
Each Fund may also invest in unrated debt securities.
Unrated debt, while not necessarily of lower quality than rated
securities, may not have as broad a market. Since these ratings
do not consider factors relevant to each issue, and may not be
updated regularly, the Investment Adviser may treat high yield
securities as unrated debt.
Because of the size and perceived demand of the issue, among
other factors, certain municipalities may decide not to pay the
cost of getting a rating for their bonds. The Investment Adviser
will analyze the creditworthiness of the issuer, as well as any
financial institution or other party responsible for payments on
the security, to determine whether to purchase unrated municipal
bonds.
<PAGE>
RESTRICTED AND ILLIQUID SECURITIES A Fund may purchase certain
restricted securities of U.S. issuers (those that are not
registered under the Securities Act of 1933 (the "1933 Act") but
can be offered and sold to "qualified institutional buyers" under
Rule 144A of that Act) and limited amounts of illiquid
investments, including illiquid restricted securities.
Illiquid investments include many restricted securities,
repurchase agreements that mature in more than seven days, fixed
time deposits that mature in more than seven days and
participation interests in loans.
Certain repurchase agreements which provide for settlement
in more than seven days, however, can be liquidated before the
nominal fixed term of seven days or less notice. The Investment
Adviser will consider such repurchase agreements as liquid.
Likewise, restricted securities (including commercial paper
issued pursuant to Section 4(2) of the 1933 Act) that the Board
or the Investment Adviser have determined to be liquid will be
treated as such.
The SEC staff has taken the position that fixed time
deposits maturing in more than seven days that cannot be traded
on a secondary market and participation interests in loans are
illiquid and not readily marketable. A considerable amount of
time may elapse between a Fund's decision to dispose of
restricted or illiquid securities and the time which such Fund is
able to dispose of them, during which time the value of such
securities (and therefore the value of the Fund's shares held by
an account) could decline.
DERIVATIVES Each Fund, except for Transamerica Premier Cash
Reserve Fund and Transamerica Premier Equity Fund, may use
options, futures, forward contracts, and swap transactions
("derivatives"). The Funds may purchase and write call or put
options on securities or on indexes ("options") and may enter
into interest rate or index futures contracts for the purchase or
sale of instruments based on financial indexes ("futures
contracts"), options on futures contracts, forward contracts, and
interest rate swaps and swap-related products.
By investing in derivatives, the Investment Adviser may seek
to protect a Fund against potential unfavorable movements in
interest rates or securities' prices, or attempt to adjust a
Fund's exposure to changing securities prices, interest rates, or
other factors that affect securities values. This is done in an
attempt to reduce a Fund's overall investment risk. Although it
will not generally be a significant part of a Fund's strategies,
the Adviser may also use derivatives to enhance returns.
Opportunities to enhance returns arise when the derivative does
not reflect the fair value of the underlying securities. None of
the Funds will use derivatives for leverage.
Risks in the use of derivatives include, in addition to
those referred to above: (1) the risk that interest rates and
securities prices do not move in the directions being hedged
against, in which case the Fund has incurred the cost of the
derivative (either its purchase price or, by writing an option,
losing the opportunity to profit from increases in the value of
the securities covered) with no tangible benefit; (2) imperfect
correlation between the price of derivatives and the movements of
the securities' prices or interest rates being hedged; (3) the
possible absence of a liquid secondary market for any particular
derivative at any time (some derivatives are not actively traded
but are custom designed to meet the investment needs of a narrow
group of institutional investors and can become illiquid if the
needs of that group of investors change); (4)
<PAGE>
the potential loss if the counterparty to the transaction does
not perform as promised; and (5) the possible need to defer
closing out certain positions to avoid adverse tax consequences.
The Transamerica Premier Bond Fund, Transamerica Premier
Short-Intermediate Government Fund, and Transamerica Premier
Balanced Fund may invest in derivatives with respect to less than
20% of each Fund's assets; Transamerica Premier Index Fund may
invest with respect to no more than 35% of its assets. The Board
will closely monitor the Investment Adviser's use of derivatives
in each of the Funds to assure they are used in accordance with
the investment objectives of each Fund.
OPTIONS ON SECURITIES AND SECURITIES INDEXES A Fund may write
(sell) covered call and put options on any securities in which it
may invest. A call option written by a Fund obligates the Fund to
sell specified securities to the holder of the option at a
specified price if the option is exercised at any time before the
expiration date. All call options written by a Fund are covered,
which means that the Fund will own the securities subject to the
option so long as the option is outstanding. A Fund's purpose in
writing covered call options is to realize greater income than
would be realized on securities transactions alone. However, by
writing the call option a Fund might forgo the opportunity to
profit from an increase in the market price of the underlying
security.
A put option written by a Fund would obligate the Fund to
purchase specified securities from the option holder at a
specified price if the option is exercised at any time before the
expiration date. All put options written by a Fund would be
covered, which means that such Fund would have deposited with its
custodian cash or liquid high grade debt securities with a value
at least equal to the exercise price of the put option. The
purpose of writing such options is to generate additional income
for the Fund. However, in return for the option premium, a Fund
accepts the risk that it might be required to purchase the
underlying securities at a price in excess of the securities'
market value at the time of purchase.
In addition, a written call option or put option may be
covered by maintaining cash or liquid high grade debt securities
in a segregated account with its custodian or by purchasing an
offsetting option or any other option which, by virtue of its
exercise price or otherwise, reduces a Fund's net exposure on its
written option position.
A Fund may also write (sell) covered call and put options on
any securities index composed of securities in which it may
invest. Options on securities indexes are similar to options on
securities, except that the exercise of securities index options
requires cash payments and does not involve the actual purchase
or sale of securities. In addition, securities index options are
designed to reflect price fluctuations in a group of securities
or segment of the securities market rather than price
fluctuations in a single security.
A Fund may cover call options on a securities index by
owning securities whose price changes are expected to be similar
to those of the underlying index, or by having an absolute and
immediate right to acquire such securities without additional
cash consideration (or for additional cash consideration held in
a segregated account by its custodian) upon conversion or
exchange of other securities in the Fund. A Fund may cover call
and put options on a securities index by maintaining cash or
liquid high grade debt securities with a value equal to the
exercise price in a segregated account with its custodian.
A Fund may terminate its obligations under an exchange
traded call or put
<PAGE>
option by purchasing an option identical to the one it has
written. Obligations under over-the-counter options may be
terminated only by entering into an offsetting transaction with
the counterparty to such option. Such purchases are referred to
as "closing purchase" transactions.
A Fund may purchase put and call options on any securities
in which it may invest or options on any securities index based
on securities in which it may invest. A Fund would also be able
to enter into closing sale transactions in order to realize gains
or minimize losses on options it had purchased.
A Fund would normally purchase call options in anticipation
of an increase in the market value of securities of the type in
which it may invest. The purchase of a call option would entitle
a Fund, in return for the premium paid, to purchase specified
securities at a specified price during the option period. A Fund
would ordinarily realize a gain if, during the option period, the
value of such securities exceeded the sum of the exercise price,
the premium paid and transaction costs; otherwise the Fund would
realize a loss on the purchase of the call option.
A Fund would normally purchase put options in anticipation
of a decline in the market value of its securities ("protective
puts") or in securities in which it may invest. The purchase of a
put option would entitle a Fund, in exchange for the premium
paid, to sell specified securities at a specified price during
the option period. The purchase of protective puts is designed to
offset or hedge against a decline in the market value of a Fund's
securities. Put options may also be purchased by a Fund for the
purpose of affirmatively benefiting from a decline in the price
of securities which it does not own. A Fund would ordinarily
realize a gain if, during the option period, the value of the
underlying securities decreased below the exercise price
sufficiently to cover the premium and transaction costs;
otherwise such a Fund would realize a loss on the purchase of the
put option.
A Fund would purchase put and call options on securities
indexes for the same purposes as it would purchase options on
individual securities.
RISKS ASSOCIATED WITH OPTIONS TRANSACTIONS There is no assurance
that a liquid secondary market on an options exchange will exist
for any particular exchange-traded option or at any particular
time. If a Fund is unable to effect a closing purchase
transaction with respect to covered options it has written, the
Fund will not be able to sell the underlying securities or
dispose of assets held in a segregated account until the options
expire or are exercised. Similarly, if a Fund is unable to effect
a closing sale transaction with respect to options it has
purchased, it would have to exercise the options in order to
realize any profit and will incur transaction costs upon the
purchase or sale of underlying securities.
Reasons for the absence of a liquid secondary market on an
exchange include the following: -(i) there may be insufficient
trading interest in certain options; (ii) restrictions may be
imposed by an exchange on opening transactions or closing
tranactions or both; (iii) trading halts, suspensions or other
restricitons may be imposed with respect to particular classes or
series of options; (iv) unusual or unforseen circumstances may
interrup normal operations on an exchange; (v) the facilities of
an exchange or the Options Clearing Corporation may not all times
be adequate to handle current trading volume; (vi) one or more
exchanges could, for economic or other reasons, decide or be
compelled at some future date to discontinue the trading of
options (or a particular class or series of options), in which
event the secondary market on that exchange (or in that class or
series of options) would cease to exist, although outstanding
options on that exchange that had been issued by the
<PAGE>
Options Clearing Corporation as a result of trades on that
exchange would continue to be exercisable in accordance with
their terms.
A Fund may purchase and sell both options that are traded on
U.S., United Kingdom, and other exchanges and options traded
over-the-counter with broker-dealers who make markets in these
options. The ability to terminate over-the-counter options is
more limited than with exchange-traded options and may involve
the risk that broker-dealers participating in such transactions
will not fulfill their obligations. Until such time as the staff
of the SEC changes its position, a Fund will treat purchased
over-the-counter options and all assets used to cover written
over-the-counter options as illiquid securities, except that with
respect to options written with primary dealers in U.S.
Government securities pursuant to an agreement requiring a
closing purchase transaction at a formula price, the amount of
illiquid securities may be calculated with reference to the
formula.
Transactions by a Fund in options on securities and
securities indexes will be subject to limitations established by
each of the exchanges, boards of trade or other trading
facilities governing the maximum number of options in each class
which may be written or purchased by a single investor or group
of investors acting in concert. Thus, the number of options which
a Fund may write or purchase may be affected by options written
or purchased by other investment advisory clients of the
Investment Adviser of the Funds. An exchange, board of trade or
other trading facility may order the liquidations of positions
found to be in excess of these limits, and it may impose certain
other sanctions.
The writing and purchase of options is a highly specialized
activity which involves investment techniques and risks different
from those associated with ordinary securities transactions. The
successful use of protective puts for hedging purposes depends in
part on an ability to anticipate future price fluctuations and
the degree of correlation between the options and securities
markets.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS A Fund may
purchase and sell futures contracts and may also purchase and
write options on futures contracts. A Fund may purchase and sell
futures contracts based on various securities (such as U.S.
Government Securities), securities indexes, and other financial
instruments and indexes. A Fund will engage in futures or related
options transactions only for bona fide hedging purposes as
defined below or to increase total returns to the extent
permitted by regulations of the Commodity Futures Trading
Commission ("CFTC"). All futures contracts entered into by a Fund
are traded on U.S. exchanges or boards of trade that are licensed
and regulated by the CFTC.
FUTURES CONTRACTS A futures contract may generally be
described as an agreement between two parties to buy or sell
particular financial instruments for an agreed price during a
designated month (or to deliver the final cash settlement price,
in the case of a contract relating to an index or otherwise not
calling for physical delivery at the end of trading in the
contract).
When interest rates are rising or securities prices are
falling, a Fund can seek through the sale of futures contracts to
offset a decline in the value of its current securities. When
rates are falling or prices are rising, a Fund, through the
purchase of futures contracts, can attempt to secure better rates
or prices than might later be available in the market when it
effects anticipated purchases. The Transamerica Premier Index
Fund will use options and futures contracts only to achieve its
performance objective of matching the return on the S&P 500.
Positions taken in the futures markets are not normally held
to maturity, but
16
<PAGE>
are instead liquidated through offsetting transactions which may
result in a profit or a loss. While a Fund's futures contracts on
securities will usually be liquidated in this manner, it may
instead make or take delivery of the underlying securities
whenever it appears economically advantageous for a Fund to do
so. A clearing corporation associated with the exchange on which
futures on securities are traded guarantees that, if still open,
the sale or purchase will be performed on the settlement
date.
HEDGING STRATEGIES Hedging by use of futures contracts
seeks to establish more certainty than would otherwise be
possible in the effective price or rate of return on securities
that a Fund owns or proposes to acquire. A Fund may, for example,
take a "short" position in the futures market by selling futures
contracts in order to hedge against an anticipated rise in
interest rates or a decline in market prices that would adversely
affect the value of the Fund's securities. Such futures contracts
may include contracts for the future delivery of securities held
by the Fund or securities with characteristics similar to those
of a Fund's securities.
If, in the opinion of the Investment Adviser, there is a
sufficient degree of correlation between price trends for a
Fund's securities and futures contracts based on other financial
instruments, securities indexes or other indexes, the Fund may
also enter into such futures contracts as part of its hedging
strategy. Although under some circumstances prices of a Fund's
securities may be more or less volatile than prices of such
futures contracts, the Investment Adviser will attempt to
estimate the extent of this difference in volatility based on
historical patterns and to compensate for it by having a Fund
enter into a greater or lesser number of futures contracts or by
attempting to achieve only a partial hedge against price changes
affecting the Fund's securities. When hedging of this character
is successful, any depreciation in the value of the Fund's
securities will be substantially offset by appreciation in the
value of the futures position. On the other hand, any
unanticipated appreciation in the value of the Fund's securities
would be substantially offset by a decline in the value of the
futures position.
On other occasions, a Fund may take a "long" position by
purchasing such futures contracts. This would be done, for
example, when a Fund anticipates the subsequent purchase of
particular securities when it has the necessary cash, but expects
the prices or interest rates then available in the applicable
market to be less favorable than prices or rates that are
currently available.
OPTIONS ON FUTURES CONTRACTS The acquisition of put and
call options on futures contracts will give a Fund the right (but
not the obligation), for a specified price, to sell or to
purchase, respectively, the underlying futures contract at any
time during the option period. As the purchaser of an option on a
futures contract, a Fund obtains the benefit of the futures
position if prices move in a favorable direction but limits its
risk of loss in the event of an unfavorable price movement to the
loss of the option premium and transaction costs.
The writing of a call option on a futures contract generates
a premium which may partially offset a decline in the value of a
Fund's assets. By writing a call option, a Fund becomes
obligated, in exchange for the premium, to sell a futures
contract, which may have a value higher than the exercise price.
Conversely, the writing of a put option on a futures contract
generates a premium, which may partially offset an increase in
the price of securities that a Fund intends to purchase. However,
a Fund becomes obligated to purchase a futures contract, which
may have a value lower than the exercise price. Thus, the loss
incurred by a Fund in writing options on futures is potentially
unlimited and may exceed the amount of the premium received. A
Fund will increase transaction costs in connection with the
writing of options on futures.
The holder or writer of an option on a futures contract may
terminate its
17
<PAGE>
position by selling or purchasing an offsetting option on the
same series. There is no guarantee that such closing transactions
can be effected. A Fund's ability to establish and close out
positions on such options will be subject to the development and
maintenance of a liquid market.
OTHER CONSIDERATIONS Where permitted, a Fund will engage in
futures transactions and in related options transactions only for
bona fide hedging or to increase total return to the extent
permitted by CFTC regulations. A Fund will determine that the
price fluctuations in the futures contracts and options on
futures used for hedging purposes are substantially related to
price fluctuations in securities held by the Fund or which it
expects to purchase. Except as stated below, each Fund's futures
transactions will be entered into for traditional hedging
purposes -- i.e., futures contracts will be sold to
----
protect against a decline in the price of securities that the
Fund owns, or futures contracts will be purchased to protect the
Fund against an increase in the price of securities it intends to
purchase. As evidence of this hedging intent, a Fund expects that
on 75% or more of the occasions on which they take a long futures
or option position (involving the purchase of futures contracts),
that Fund will have purchased, or will be in the process of
purchasing, equivalent amounts of related securities in the cash
market at the time when the futures or option position is closed
out. However, in particular cases, when it is economically
advantageous for a Fund to do so, a long futures position may be
terminated or an option may expire without the corresponding
purchase of securities or other assets.
As an alternative to literal compliance with the bona fide
hedging definition, a CFTC regulation permits a Fund to elect to
comply with a different test, under which the aggregate initial
margin and premiums required to establish positions in futures
contracts and options on futures for the purpose of increasing
total return, will not exceed 5 percent of the Fund's net asset
value, after taking into account unrealized profits and losses on
any such positions and excluding the amount by which such options
were in-the-money at the time of purchase. As permitted, each
Fund will engage in transactions in futures contracts and in
related options transactions only to the extent such transactions
are consistent with the requirements of the Internal Revenue Code
of 1986, as amended (the "Code") for maintaining its
qualification as a regulated investment company for federal
income tax purposes.
Transactions in futures contracts and options on futures
involve brokerage costs, require margin deposits and, in the case
of contracts and options obligating a Fund to purchase securities
or currencies, require the Fund to segregate with its custodian
liquid high grade debt securities in an amount equal to the
underlying value of such contracts and options.
While transactions in futures contracts and options on
futures may reduce certain risks, such transactions themselves
entail certain other risks. Thus, unanticipated changes in
interest rates or securities prices may result in a poorer
overall performance for a Fund than if it had not entered into
any futures contracts or options transactions. In the event of an
imperfect correlation between a futures position and the position
which is intended to be protected, the desired protection may not
be obtained and a Fund may be exposed to risk of loss.
Perfect correlation between a Fund's futures positions and
current positions may be difficult to achieve because no futures
contracts based on individual equity securities are currently
available. The only futures contracts available to these Funds
for hedging purposes are various futures on U.S. Government
securities and securities indexes.
INTEREST RATE SWAPS A Fund may enter into interest rate
swaps for hedging purposes and non-hedging purposes. Since swaps
are entered into for good faith
18
<PAGE>
hedging purposes or are offset by a segregated account as
described below, the Investment Adviser believes that swaps do
not constitute senior securities as defined in the 1940 Act and,
accordingly, will not treat them as being subject to the Fund's
borrowing restrictions. The net amount of the excess, if any, of
a Fund's obligations over its "entitlement" with respect to each
interest rate swap will be accrued on a daily basis and an amount
of cash or liquid high grade debt securities (i.e. securities
rated in one of the top three ratings categories by Moody's or
S&P, or, if unrated, deemed by the Investment Adviser to be of
comparable credit quality) having an aggregate net asset value at
least equal to such accrued excess will be maintained in a
segregated account by the Fund's custodian. A Fund will not enter
into any interest rate swap unless the credit quality of the
unsecured senior debt or the claims-paying ability of the other
party thereto is considered to be investment grade by the
Investment Adviser. If there is a default by the other party to
such a transaction, a Fund will have contractual remedies
pursuant to the agreement. The swap market has grown
substantially in recent years with a large number of banks and
investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, the swap
market has become relatively liquid in comparison with the
markets for other similar instruments which are traded in the
interbank market.
SWAP TRANSACTIONS The Funds may, to the extent permitted by the
SEC, enter into privately negotiated "swap" transactions with
other financial institutions in order to take advantage of
investment opportunities generally not available in public
markets. In general, these transactions involve "swapping" a
return based on certain securities, instruments, or financial
indexes with another party, such as a commercial bank, in
exchange for a return based on different securities, instruments,
or financial indexes.
By entering into swap transactions, a Fund may be able to
protect the value of a portion of its securities against declines
in market value. A Fund may also enter into swap transactions to
facilitate implementation of allocation strategies between
different market segments or to take advantage of market
opportunities which may arise from time to time. A Fund may be
able to enhance its overall performance if the return offered by
the other party to the swap transaction exceeds the return
swapped by the Fund. However, there can be no assurance that the
return a Fund receives from the counterparty to the swap
transaction will exceed the return it swaps to that party.
While a Fund will only enter into swap transactions with
counterparties it considers creditworthy (and will monitor the
creditworthiness of parties with which it enters into swap
transactions), a risk inherent in swap transactions is that the
other party to the transaction may default on its obligations
under the swap agreement. If the other party to the swap
transaction defaults on its obligations, a Fund would be limited
to contractual remedies under the swap agreement. There can be no
assurance that a Fund will succeed when pursuing its contractual
remedies. To minimize a Fund's exposure in the event of default,
the Funds will usually enter into swap transactions on a net
basis (i.e., the parties to the transaction will net the payments
payable to each other before such payments are made). When a Fund
enters into swap transactions on a net basis, the net amount of
the excess, if any, of the Fund's obligations over its
entitlements with respect to each such swap agreement will be
accrued on a daily basis and an amount of liquid assets having an
aggregate market value at least equal to the accrued excess will
be segregated by the Fund's custodian. To the extent a Fund
enters into swap transactions other than on a net basis, the
amount segregated will be the full amount of the Fund's
obligations, if any, with respect to each such swap agreement,
accrued on a daily basis. See "Segregated Funds" below.
19
<PAGE>
Swap agreements are considered to be illiquid by the SEC
staff and will be subject to the limitations on illiquid
investments described above. See page ____.
To the extent that there is an imperfect correlation between
the return a Fund is obligated to swap and the securities or
instruments representing such return, the value of the swap
transaction may be adversely affected. A Fund therefore will not
enter into a swap transaction unless it owns or has the right to
acquire the securities or instruments representative of the
return it is obligated to swap with the counterparty to the swap
transaction. It is not the intention of the Funds to engage in
swap transactions in a speculative manner, but rather primarily
to hedge or manage the risks associated with assets held in, or
to facilitate the implementation of strategies of purchasing and
selling assets for, a Fund.
FOREIGN SECURITIES All Funds, except the Transamerica Premier
Index Fund and the Transamerica Premier Short-Intermediate
Government Fund, can invest in foreign securities. The foreign
equity investments for the Transamerica Premier Equity Fund and
the Transamerica Premier Balanced Fund will be limited to the
purchase of American depositary receipts ("ADR's"). Foreign
securities, other than ADR's, will be held in custody by State
Street London Limited, who will handle transactions with the
transnational depositories Euroclear and Cedel.
SEGREGATED ACCOUNTS In connection with when-issued securities,
firm commitment agreements, futures, the writing of options, and
certain other transactions in which a Fund incurs an obligation
to make payments in the future, a Fund may be required to
segregate assets with its custodian in amounts sufficient to
settle the transaction. To the extent required, such segregated
assets will consist of liquid assets such as cash, United States
Government securities or other appropriate high grade, short-term
debt obligations as may be permitted by law.
PURCHASE OF "WHEN ISSUED" SECURITIES The Funds may enter into
firm commitment agreements for the purchase of securities on a
specified future date. Thus, the Funds may purchase, for example,
new issues of fixed-income instruments on a "when issued" basis,
whereby the payment obligation, or yield to maturity, or coupon
rate on the instruments may not be fixed at the time of the
transaction. In addition, the Funds may invest in asset-backed
securities on a delayed delivery basis. This reduces the Funds'
risk of early repayment of principal, but exposes the Funds to
some additional risk that the transaction will not be
consummated.
When the Funds enter into firm commitment agreements,
liability for the purchase price and the rights and risks of
ownership of the securities accrue to the Funds at the time they
become obligated to purchase such securities, although delivery
and payment occur at a later date. Accordingly, if the market
price of the security should decline, the effect of the agreement
would be to obligate the Funds to purchase the security at a
price above the current market price on the date of delivery and
payment. During the time the Funds are obligated to purchase such
securities they will be required to segregate assets. See
"Segregated Accounts," above. A Fund will not purchase securities
on a "when issued" as is if, as a result, more than 15% of the
Fund's net assets would be so invested.
LENDING OF SECURITIES Subject to investment restriction number 2
on page ____ (relating to loans of securities), a Fund may lend
its securities to brokers and dealers
20
<PAGE>
that are not affiliated with the Investment Adviser, are
registered with the Commission and are members of the NASD, and
also to certain other financial institutions. All loans will be
fully collateralized. In connection with the lending of its
securities, a Fund will receive as collateral cash, securities
issued or guaranteed by the United States Government (i.e.,
Treasury securities), or other collateral permitted by applicable
law, which at all times while the loan is outstanding will be
maintained in amounts equal to at least 102% of the current
market value of the loaned securities, or such lesser percentage
as may be permitted by applicable law, as reviewed daily. The
Fund lending its securities will receive amounts equal to the
interest or dividends paid on the securities loaned and in
addition will expect to receive a portion of the income generated
by the short-term investment of cash received as collateral or,
alternatively, where securities or a letter of credit are used as
collateral, a lending fee paid directly to the Fund by the
borrower of the securities. Such loans will be terminable by the
Fund at any time and will not be made to affiliates of the
Investment Adviser. A Fund may terminate a loan of securities in
order to regain record ownership of, and to exercise beneficial
rights related to, the loaned securities, including but not
necessarily limited to voting or subscription rights, and may, in
the exercise of its fiduciary duties, terminate a loan in the
event that a vote of holders of those securities is required on a
material matter. The Fund may pay reasonable fees to persons
unaffiliated with the Fund for services or for arranging such
loans. Loans of securities will be made only to firms deemed
creditworthy. As with any extension of credit, however, there are
risks of delay in recovering the loaned securities, should the
borrower of securities default, become the subject of bankruptcy
proceedings, or otherwise be unable to fulfill its obligations or
fail financially.
BORROWING POLICIES OF THE FUNDS We can borrow money from banks
or engage in reverse repurchase agreements, for temporary or
emergency purposes. We can borrow up to one-third of a Fund's
total assets. To secure borrowings, we can mortgage or pledge
securities in an amount up to one-third of a Fund's net assets.
If we borrow money, a Fund's share price may be subject to
greater fluctuation until the borrowing is paid off. The Fund
will not make any additional investments, other than the case of
reverse repurchase agreements, while the level of the borrowing
exceeds 5% of the Fund's total assets.
Short-term corporate obligations may also include variable
amount master demand notes. Variable amount master notes are
obligations that permit the investment of fluctuating amounts by
the Fund at varying rates of interest pursuant to direct
arrangements between the Fund, as lender, and the borrower. These
notes permit daily changes in the amounts borrowed. The Fund has
the right to increase the amount under the note at any time up to
the full amount provided by the note agreement, or to decrease
the amount, and the borrower may repay up to the full amount of
the note without penalty. The borrower is typically a large
industrial or finance company which also issues commercial paper.
Typically these notes provide that the interest rate is set daily
by the borrower. The rate is usually the same or similar to the
interest rate on commercial paper being issued by the borrower.
Because variable amount master notes are direct lending
arrangements between the lender and borrower, it is not generally
contemplated that such instruments will be traded, and there is
no secondary market for these notes, although they are redeemable
(and thus immediately repayable by the borrower) at the face
value, plus accrued interest, at any time. Accordingly, the
Fund's right to redeem is dependent on the ability of the
borrower to pay principal and interest on demand. in connection
with master demand note arrangements, the Fund considers
<PAGE>
earning power, cash flow, and other liquidity ratios of the
issuer. The Fund will only invest in master demand notes of U.S.
issuers. While master demand notes, as such, are not typically
rated by credit rating agencies, if not so rated the Fund may
invest in them only if at the time of an investment the issuer
meets the criteria set forth in the prospectus for all other
commercial paper issuers. The Fund will not invest more than 25%
of its assets in master demand notes.
REPURCHASE AGREEMENTS Repurchase agreements have the
characteristics of loans by a Fund, and will be fully
collateralized (either with physical securities or evidence of
book entry transfer to the account of the custodian bank) at all
times. During the term of the repurchase agreement the Fund
retains the security subject to the repurchase agreement as
collateral securing the seller's repurchase obligation,
continually monitors the market value of the security subject to
the agreement, and requires the Fund's seller to deposit with the
Fund additional collateral equal to any amount by which the
market value of the security subject to the repurchase agreement
falls below the resale amount provided under the repurchase
agreement. The Funds will enter into repurchase agreements only
with member banks of the Federal Reserve System, and with primary
dealers in United States Government securities or their wholly-
owned subsidiaries whose creditworthiness has been reviewed and
found satisfactory by the Investment Adviser and who have,
therefore, been determined to present minimal credit risk.
Securities underlying repurchase agreements will be limited
to certificates of deposit, commercial paper, bankers'
acceptances, or obligations issued or guaranteed by the United
States Government or its agencies or instrumentalities, in which
the Fund may otherwise invest.
If a seller of a repurchase agreement defaults and does not
repurchase the security subject to the agreement, the Fund would
look to the collateral security underlying the seller's
repurchase agreement, including the securities subject to the
repurchase agreement, for satisfaction of the seller's obligation
to the Fund; in such event the Fund might incur disposition costs
in liquidating the collateral and might suffer a loss if the
value of the collateral declines. In addition, if bankruptcy
proceedings are instituted against a seller of a repurchase
agreement, realization upon the collateral may be delayed or
limited.
REVERSE REPURCHASE AGREEMENTS AND LEVERAGE We may enter into
reverse repurchase agreements with Federal Reserve member banks
and U.S. securities dealers from time to time. In a reverse
repurchase transaction we sell securities and simultaneously
agree to repurchase them at a price which reflects an agreed-upon
rate of interest. We will use the proceeds of reverse repurchase
agreements to make other investments which either mature or are
under an agreement to resell at a date simultaneous with or prior
to the expiration of the reverse repurchase agreement. The Fund
may utilize reverse repurchase agreements only if the interest
income to be earned from the investment proceeds of the
transaction is greater than the interest expense of the reverse
repurchase transaction.
Reverse repurchase agreements are a form of leverage which
increases the opportunity for gain and the risk of loss for a
given change in market value. In addition, the gains or losses
will cause the net asset value of the Funds' shares to rise or
fall faster than would otherwise be the case. There may also be a
risk of delay in the recovery of the underlying securities if the
opposite party has financial difficulties.
<PAGE>
A Fund's obligations under all borrowings, including reverse
repurchase agreements, will not exceed one-third of the Fund's
net assets.
The use of reverse repurchase agreements is included in the
Fund's borrowing policy and is subject to the limit of Section
18(f)(1) of the Investment Company Act of 1940. During the time a
reverse repurchase agreement is outstanding, each Fund that has
entered into such an agreement maintains a segregated account
with its Custodian containing cash, U.S. Government or other
liquid high-grade debt securities having a value at least equal
to the repurchase price under the reverse repurchase agreement.
OTHER INVESTMENT TECHNIQUES AND OPPORTUNITIES The Funds may take
certain actions with respect to merger proposals, tender offers,
conversion of equity-related securities and other investment
opportunities with the objective of enhancing overall return,
irrespective of how these actions may affect the weight of the
particular securities in a Fund. It is not the policy of any of
the Funds to select investments based primarily on the
possibility of one or more of these investment techniques and
opportunities being presented.
FUND TURNOVER
The transactions engaged in by the Funds are reflected in
the Funds' turnover rates. The rate of turnover for each Fund is
calculated by dividing the lesser of the amount of purchases or
sales of securities during the fiscal year by the monthly average
of the value of the Fund's securities (excluding from the
computation all securities, including options, with maturities at
the time of acquisition of one year or less). A high rate of
turnover generally involves correspondingly greater brokerage
commission expenses, which must be borne directly by the Fund and
ultimately by the Fund's shareholder. However, because turnover
is not a limiting factor in determining whether or not to sell
securities, a particular investment may be sold at any time, if
investment judgment or account operations make a sale
advisable.
Turnover for the insurance company separate accounts, also
managed by the Investment Adviser, has not been and will not be a
consideration. The Investment Adviser buys and sells securities
for each separate account whenever it believes it is appropriate
to do so. The Transamerica Premier Funds are and will be managed
in a substantially similar manner.
The Investment Adviser cannot predict precisely the turnover
rates for these new Funds, but expects that the annual turnover
rates will generally not exceed 50% for the Transamerica Premier
Equity Fund; 200% for the Transamerica Premier Index Fund; 100%
for the Transamerica Premier Bond Fund; 50% for the Transamerica
Premier Balanced Fund; and 300% for the Transamerica Premier
Short-Intermediate Government Fund. The turnover rate for the
Transamerica Premier Cash Reserve Fund is expected to be zero for
regulatory purposes. A 100% annual turnover rate would occur if
all of a Fund's securities were replaced one time during a one
year period. Short-term gains realized from turnover are taxable
to shareholders as ordinary income, except for shares held in
special tax-qualified accounts ( such as IRA's or employer
sponsored pension plans). In addition, higher turnover rates can
result in corresponding increases in brokerage commissions and
other transaction costs. The Investment Adviser generally will
not consider turnover rates in making investment decisions on
behalf of any Fund consistent with the Fund's
<PAGE>
investment objective and policies.
MANAGEMENT OF THE COMPANY
The names of the directors and executive officers of the
Company, their business addresses and their principal occupations
and certain other affiliations during the past five years are
listed below. Each of the persons listed below is an employee of
an entity that provides services to the Funds. An asterisk
appears before the name of each director who is an "interested
person" of the Company, as defined in the 1940 Act.
<TABLE>
<CAPTION>
NAME, ADDRESS & AGE POSITION HELD WITH COMPANY PRINCIPAL OCCUPATIONS DURING PAST 5
------------------- -------------------------- -----------------------------------
YEARS AND OTHER AFFILIATIONS
----------------------------
<S> <C> <C>
Nicki Bair President, Chief Financial Vice President, Transamerica
Transamerica Center Officer, and Chief Accounting Investment Services ("TIS") since
1150 South Olive Officer April, 1995; and Vice President,
Los Angeles, CA 90015 Transamerica Life Insurance and
Age 39 Annuity Company ("TALIAC")
since 1991; and Vice President,
Transamerica Occidental Life
Insurance Company ("TOLIC")
since 1992; formerly Division
Manager, Pension Pricing and
Asset Liability Management,
TALIAC and TOLIC.
Reid A. Evers Secretary Second Vice President & Assistant
Transamerica Center General Counsel, TOLIC
1150 South Olive and TALIAC.
Los Angeles, CA 90015
Age 44
Christopher W. Shaw Assistant Vice President Second Vice President & Compliance
Transamerica Center Officer, Transamerica Securities Sales
1150 South Olive Corporation since March, 1995.
Los Angeles, CA 90015 Formerly Manager,
Age 49 Group Pension Implementation,
TALIAC since 1984.
*Nooruddin S. Veerjee Chief Executive Officer President, TALIAC and President,
Transamerica Center and Chairman of the Board Group Pension Division, TOLIC,
1150 South Olive since December 1993. Formerly, Los
Angeles, CA 90015 Senior Vice President, Group Pension
Age 36 Line, TOLIC, April 1992-December
1993; Vice President - Office of the
Chairman, TOLIC, April 1990-April
1992; Vice President & Subline
Manager, Pension Financial &
Products, TALIAC, March 1985 -
April 1990.
*Gary U. Rolle Director Executive Vice President & Chief
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Transamerica Center Investment Officer, TIS; Chairman
1150 South Olive & President, Transamerica Income
Los Angeles, CA 90015 Shares investment company; Chief
Age 54 Investment Officer, TOLIC &
TALIAC.
Donald Radisich Vice President Vice President, Administration,
Transamerica Center TALIAC.
1150 South Olive
Los Angeles, CA 90015
Age 52
Howell Margolit Assistant Vice President Assistant Vice President, TIS
Transamerica Center since April, 1995; formerly manager,
1150 South Olive Pricing and Product Development,
Los Angeles, CA 90015 TALIAC.
Age 43
J. Richard Atwood Treasurer and Compliance Vice President and Chief Financial
Transamerica Center Officer Officer, TIS since 1995; formerly
1150 South Olive Vice President and Controller, First
Los Angeles, CA 90015 Pacific Advisors, Inc. since 1988.
Age 35
Sidney E. Harris Director Dean of the Drucker Center,
The Drucker Center Claremont Graduate School;
Claremont Graduate School Director for The ServiceMaster
Claremont, CA 91711 Company and Family Savings
Age 46 Bank; Trustee of Menlo College,
Atherton, California.
Charles C. Reed Director Executive Vice President,
Alexander & Alexander Alexander & Alexander of
55 S. Lake Ave, Suite 500 California, Inc.; Chairman of
Pasadena, CA 91101 L.A. Chamber of Commerce;
Age 62 Director for Los Angeles YMCA,
LA 2000 Partnership, and the
California Museum Foundation.
Carl R. Terzian Director Chairman of Carl Terzian
Carl Terzian Associates Associates; Vice President of
12400 Wilshire Blvd, Suite 200 Project Concern; Trustee of
Los Angeles, CA 90025 Woodbury University; Director
Age 60 for Armenian Film Foundation,
Arthritis Foundation, Boy Scouts
of America, California Higher
Education Loan Authority, Hugh
O'Brian Youth Foundation, St.
Vincent Medical Center Found-
dation, The Wellness Community,
The Educational Resource and
Services Center, Inc., and Senior
Health and Peer Counseling.
</TABLE>
No officer, director or employee of Transamerica Investment
Services, Inc. or Transamerica Occidental Life Insurance Company
or any of their affiliates receives any compensation from the
Company for acting as a director or officer of the Company. Each
director of the Company who is not an "interested person" of the
Company receives an annual fee of $10,000, and $ 1,000 for each
meeting of the Company's
<PAGE>
Board attended, and $500 for each Board committee meeting
attended, and is reimbursed for expenses incurred in connection
with such attendance.
Following is a table of the compensation expected to be paid
to all directors and to all officers and affiliated persons of
the Company receiving more than $60,000 from the Company during
the next fiscal year.
<TABLE>
<CAPTION>
Compensa- Pension Estimated Annual Total Compensation
Name tion Paid Benefits Benefits at Retirement All Related Funds
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sidney E. Harris $15,000 $0 $0 $15,000
Charles C. Reed $15,000 $0 $0 $15,000
Carl R. Terzian $15,000 $0 $0 $15,000
Gary U. Rolle $0 $0 $0 $0
Nooruddin S. Veerjee $0 $0 $0 $0
</TABLE>
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER AND ADMINISTRATOR Responsibility for the
management and supervision of the Company and its Funds rests
with the Board of Directors of Transamerica Investors, Inc. (the
"Board"). The Investment Adviser and the Administrator are
subject to the direction of the Board.
The Funds' Investment Adviser is Transamerica Investment
Services, Inc. (the "Investment Adviser"), 550 N. Brand,
Glendale, California 91203. The Investment Adviser will: (1)
supervise and manage the investments of each Fund and direct the
purchase and sale of its investment securities; and (2) see that
investments follow the investment objectives and comply with
government regulations. The Investment Adviser is also
responsible for the selection of brokers and dealers to execute
transactions for each Fund. Some of these brokers or dealers may
be affiliated persons of the Company, the Investment Adviser,
Administrator, or the Distributor. Since it is our policy to seek
the best price and execution for each transaction, the Investment
Adviser may give consideration to brokers and dealers who provide
us with statistical information and other services in addition to
transaction services. For its services to the Funds, the
Investment Adviser receives an Adviser Fee. This fee is based on
an annual percentage of the average daily net assets of each
Fund. It is accrued daily, and paid monthly.
The Adviser Fee for any Fund may be reduced in any year if
the Fund's expenses exceed the limits on investment company
expenses imposed by any statute or regulatory authority of any
jurisdiction in which shares of the Fund are qualified to offer
for sale. The term "expenses" is defined in the statutes or
regulations of such jurisdictions, but it generally excludes
brokerage commissions, taxes, interest, and extraordinary
expenses. The only such limitation currently known is imposed by
the State of California. California's maximum Fund expenses
before the Adviser Fee must be reduced are 2.5% of the first $30
million of average net assets, 2% of the next $70 million, and
1.5% of any excess over $100 million.
The Funds' Administrator is Transamerica Occidental Life
Insurance Company (the "Administrator"), 1150 S. Olive Street,
Los Angeles, California 90015. The
<PAGE>
Administrator will: (1) provide the Funds with administrative and
clerical services, including the maintenance of the Funds' books
and records; (2) arrange periodic updating of the Funds'
prospectus and any supplements; (3) provide proxy materials and
reports to Fund shareholders and the Securities and Exchange
Commission; and (4) provide the Funds with adequate office space
and all necessary office equipment and services. The
Administrator also provides services for the registration of Fund
shares with those states and other jurisdictions where its shares
are offered or sold.
Transamerica Occidental Life Insurance Company is a wholly
owned subsidiary of Transamerica Insurance Corporation of
California. Both Transamerica Insurance Corporation of California
and Transamerica Investment Services, Inc. are wholly owned
subsidiaries of Transamerica Corporation, 600 Montgomery Street,
San Francisco, California 94111, one of the nation's largest
financial services companies.
CUSTODIAN AND TRANSFER AGENT State Street Bank and Trust Company
("State Street"), located at 225 Franklin Street, Boston,
Massachusetts 02101, serves as custodian of the Funds'
investments. Under its custodian contract with the Company, State
Street is authorized to appoint one or more banking institutions
as subcustodians of assets owned by each Fund. For its custody
services, State Street receives monthly fees charged to the Funds
based upon the month-end, aggregate net asset value of the Funds,
plus certain charges for securities transactions. The assets of
the Company are held under bank custodianship in accordance with
the 1940 Act.
Under a Foreign Subcustodian Agreement with State Street,
State Street London Limited is responsible for foreign assets and
transactions with the transnational depositories of Euroclear and
Cedel.
Under a Transfer Agency Agreement, Boston Financial Data
Services ("BFDS"), Two Heritage Drive, Quincy, Massachusetts
02171, is responsible for processing redemption requests and
crediting dividends to the accounts of shareholders of the Funds.
DISTRIBUTION OF SHARES OF THE FUNDS Transamerica Securities
Sales Corporation ("TSSC") serves as the principal underwriter of
shares of the Funds, which are continuously distributed.
Transamerica Financial Resources, Inc. ("TFR") will also
distribute shares of the Funds pursuant to a selling agreement
with TSSC. Both TSSC and TFR are wholly-owned subsidiaries of
Transamerica Insurance Corporation of California, which is a
wholly-owned subsidiary of Transamerica Corporation, are
registered with the Securities and Exchange Commission as
broker/dealers, and are members of the National Association of
Securities Dealers, Inc. TSSC may also enter into arrangements
whereby Fund shares may be sold by other broker/dealers, which
may or may not be affiliated with TFR or TSSC.
The Company has adopted a plan of distribution pursuant to
Rule 12b-1 (the "Plan") under the Investment Company Act of 1940,
as amended (the "1940 Act"). Under the Plan, each Fund makes
payments daily to TSSC based on an annual percentage of the
average net value of the assets represented by each class of
shares.
For the Investor Shares class, there is an annual 12b-1
distribution fee of .25% of the average daily net assets of the
Investor shares of each Fund, except the Transamerica Premier
Index and Cash Reserve Funds. The distribution fee for the Index
and Cash Reserve Funds is .10%. This fee covers such expenses as
preparation, printing and mailing of the Prospectus and Statement
of Additional Information, as well as sales literature and other
media advertising, and related expenses. It can also be used to
compensate sales personnel involved with selling the Funds.
<PAGE>
For the Adviser Shares class, there is an annual 12b-1
distribution fee of .75% of the average daily net assets of the
Adviser Shares of each Fund, except the Transamerica Premier Cash
Reserve Fund. There is no 12b-1 distribution fee for the
Transamerica Premier Cash Reserve Fund. There is also an annual
12b-1 service fee of .25% of the average daily net assets of the
Adviser Shares of each Fund.
The 12b-1 fees for Adviser Shares are higher than Investor
Shares because the distribution fee for the Adviser Shares covers
compensation to registered representatives and other sales
personnel involved with selling Adviser Shares, as well as
preparation, printing and mailing of the Prospectus, Statement of
Additional Information, sales literature, other media
advertising, and related expenses. Also, a service fee is charged
on Adviser Shares. The service fee compensates sales people for
ongoing shareholder information and advice, and office expenses
such as rent, communications equipment, employee salaries, and
other overhead costs.
From time to time, and for one or more Funds within each
class of Shares, the Distributor may waive any or all of these
fees at its discretion. All or any portion of these fees may be
paid by the Administrator for the Company, at the discretion of
the Administrator.
DEALER CONCESSION Pursuant to a selling agreement between TSSC
and TFR, a dealer concession is paid to TFR equal to 1.00% on all
Adviser Shares purchased within the first year of the date of the
initial purchase by each shareholder, and commencing on the 13th
month after the date of the initial purchase, payments of 0.25%
on an annual basis on all Adviser Share assets. The 0.25% trailer
will be paid quarterly at a rate of 0.0625% of the quarter-end
asset balance.
CAPITALIZATION Transamerica Corporation has provided $100,000 in
initial capitalization for the Company which amount has been
allocated among the Funds. Transamerica Corporation acquired its
shares for investment and can only dispose of its shares by
redemption. Within three months of this registration statement,
Transamerica Corporation and certain of its wholly-owned
subsidiaries intend to invest an additional $30 million in shares
of the Funds. As of the date of this registration statement,
Transamerica Corporation was the only record or beneficial holder
of the shares of the Funds.
REDEMPTION OF SHARES
Detailed information on how to redeem shares of a Fund is
included in the Prospectus. The right of redemption of shares of
a Fund may be suspended or the date of payment postponed (1) for
any periods during which the New York Stock Exchange is closed
(other than for customary weekend and holiday closings), (2) when
trading in the markets the Fund normally utilizes is restricted,
or an emergency, as defined by the rules and regulations of the
SEC, exists, making disposal of a Fund's investments or
determination of its net asset value not reasonably practicable,
or (3) for such other periods as the Securities and Exchange
Commission by order may permit for the protection of the Fund's
shareholders. A shareholder who pays for Fund shares by personal
check will receive the proceeds of a redemption of those shares
when the purchase check has been collected, which may take up to
10 days or more.
<PAGE>
Shareholders who anticipate the need for more immediate access to
their investment should purchase shares with Federal funds or
bank wire or by a certified or cashier's check.
REDEMPTIONS IN EXCESS OF $250,000 If you request a redemption
of up to $250,000, the amount will be paid in cash. If you redeem
more than $250,000 from any one account in any one Fund in a 90-
day period, the entire redemption will be paid in cash if you
provide Transamerica with an unconditional instruction to redeem
at least 30 days prior to the date on which the redemption
transaction is to occur. The instruction must specify the dollar
amount or number of shares to be redeemed and the date of the
transaction. The date must be a minimum of 30 days after receipt
of the instruction by Transamerica. If you have authorized
Transamerica to accept such instructions, your instruction may be
by telephone or in writing without a signature guarantee. If you
have not done so, the instruction must be in writing with all
signatures guaranteed. Your shares will be redeemed at the price
determined on the date you specify in your instruction and the
proceeds will be sent by mail, wire or electronic funds transfer
in accordance with the procedures under "Redemption Proceeds,"
page __.
Receipt of your instruction to redeem 30 days prior to the
transaction provides the Fund with sufficient time to raise the
cash in an orderly manner to pay the redemption and thereby
minimizes the effect of the redemption on the Fund and its
shareholders.
You may cancel your redemption instruction prior to the
transaction date. However, if you do so, Transamerica may not
accept an instruction from you to redeem in accordance with this
alternative for a period of 90 days from the date of
cancellation.
If you do not provide your instruction to redeem 30 days
prior to the transaction, Transamerica offers you two
alternatives:
(1) You may redeem up to $250,000 in cash the first day,
and the remainder over the next 20 business days at the
rate of not less than $50,000 or more than $500,000 per
day (and such lesser amount on the last day to redeem
all the shares remaining), but not more than $10
million total. The redemption each day will be at the
price determined that day. For example, a request to
redeem $525,000, or a number of shares worth $525,000,
will be effective at $250,000 on the first day, and
$50,000 per day for the next five business days, and
$25,000 on the last day. A request to redeem $11
million would be effective at $250,000 the first day
and $500,000 per day for the next 20 business days
($10.25 million total) and the remaining $750,000 to be
redeemed by the delivery of securities (see page
__).
Since the price is determined not on the date the
redemption request is received, but instead on
succeeding business days when the redemption is
effected, the number of shares redeemed will vary from
day to day. The total you will receive over the entire
period may be more or less than the amount that you
would have received had the redemption been effected on
the day your redemption request was received. In the
first example above, falling per-share prices could
cause the value of the shares on the last day to be
less than $25,000, and the redemption on
<PAGE>
the last day would be only of the shares left in the
account.
(2) In lieu of receiving cash as described earlier, you may
elect to receive securities from Transamerica's fund.
The securities delivered will be selected at the sole
discretion of Transamerica. They will be readily
marketable with an active and substantial secondary
market given the type of companies involved and the
characteristics of the markets in which they trade, but
will not necessarily be representative of the entire
fund, and will be securities that Transamerica may
regard as least desirable. You may incur brokerage
costs in converting the securities to cash.
The method of valuing securities used to make the
redemptions will be the same as the method of valuing
securities described under "How Share Price is
Determined," page __, and such valuation will be made
as of the same time the redemption price is determined.
These alternatives are designed to lessen the adverse effect
of large redemptions on the Fund and its non-redeeming
shareholders. For example, assume that a shareholder redeems $1
million on a given day and that the Fund pays him $250,000 in
cash and is required to sell securities for $750,000 to raise the
remainder of the cash to pay him. The securities valued at
$750,000 on the day of the redemption may bring a lower price
when sold thereafter, so that more securities may be sold to
realize $750,000. In that case, the redeeming shareholder's
proceeds would be fixed at $750,000 and the market risk would be
imposed on the Fund and its remaining shareholders, who would
suffer the loss. By delivering securities instead of cash or
staggering the payment of cash, the market risk is imposed on the
redeeming shareholder. If securities are delivered, the redeeming
shareholder (and not the Fund) bears the brokerage cost of
selling them.
EXCHANGE PRIVILEGE
The exchange privilege described in the Prospectus enables a
shareholder of a Fund to acquire the same class of shares in a
Fund having a different investment objective and policies when
the shareholder believes that a shift between Funds is an
appropriate investment decision. Upon receipt of proper
instructions and all necessary supporting documents, shares
submitted for exchange are redeemed at the then-current net asset
value and the proceeds are immediately invested in shares of the
Fund being acquired. The Company reserves the right to reject any
exchange request.
TELEPHONE TRANSACTIONS
The Company and its Transfer Agent will employ reasonable
procedures such as requiring certain identifying information from
the caller, tape recording the telephone instructions, and
providing written confirmation of the transaction to confirm
<PAGE>
that the instructions communicated by telephone are genuine. All
telephone instructions reasonably believed by the Transfer Agent
to be genuine will be the shareholder's responsibility, including
losses arising from any errors in the communication of
instructions. As a result of this policy, the shareholder will
bear the risk of loss. If the Company or its Transfer Agent do
not employ reasonable procedures to confirm that instructions
communicated by telephone are genuine, they may be liable for any
losses due to unauthorized or fraudulent transactions.
BROKERAGE ALLOCATION
Subject to the direction of the Board, the Investment
Adviser has responsibility for making a Fund's investment
decisions, for effecting the execution of trades for a Fund and
for negotiating any brokerage commissions thereon. It is the
Investment Adviser's policy to obtain the best price and
execution available, giving attention to net price (including
commissions where applicable), execution capability (including
the adequacy of a firm's capital position), and other services
related to execution; the relative priority given to these
factors will depend on all of the circumstances regarding a
specific trade.
The Investment Adviser receives a variety of brokerage and
research services from brokerage firms in return for the
execution by such brokerage firms of trades on behalf of the
Funds. These brokerage and research services include, but are not
limited to, quantitative and qualitative research information and
purchase and sale recommendations regarding securities and
industries, analyses and reports covering a broad range of
economic factors and trends, statistical data relating to the
strategy and performance of the Funds and other investment
companies, services related to the execution of trades in a
Fund's securities and advice as to the valuation of securities.
The Investment Adviser considers the quantity and quality of such
brokerage and research services provided by a brokerage firm
along with the nature and difficulty of the specific transaction
in negotiating commissions for trades in a Fund's securities and
may pay higher commission rates than the lowest available when it
is reasonable to do so in light of the value of the brokerage and
research services received generally or in connection with a
particular transaction.
Consistent with federal legislation, the Investment Adviser
may obtain such brokerage and research services regardless of
whether they are paid for (1) by means of commissions, or (2) by
means of separate, non-commission payments. The Investment
Adviser's judgment as to whether and how it will obtain the
specific brokerage and research services will be based upon its
analysis of the quality of such services and the cost (depending
upon the various methods of payment which may be offered by
brokerage firms) and will reflect the Investment Adviser's
opinion as to which services and which means of payment are in
the long-term best interests of the Funds. The Investment Adviser
will not effect any brokerage transactions in the Funds'
securities with any affiliate of the Company, the Investment
Adviser, or the Administrator except in accordance with
applicable SEC rules.
Certain executive officers of the Investment Adviser also
have supervisory responsibility with respect to the securities of
the Investment Adviser's own accounts. In placing orders for the
purchase and sale of debt securities for a Fund, the Investment
Adviser will normally use its own facilities. A Fund and another
fund or another advisory client of the Investment Adviser, or the
Investment Adviser itself, may desire
<PAGE>
to buy or sell the name publicly traded security at or about the
same time. In such a case, the purchases or sales will normally
be allocated as nearly as practicable on a pro rata basis in
proportion to the amounts to be purchased or sold by each. In
determining the amounts to be purchased and sold, the main
factors to be considered are the respective investment objectives
of a Fund and the other funds, the relative size of holdings of
the same or comparable securities, availability of cash for
investment by a Fund and the other funds, and the size of their
respective investment commitments.
DETERMINATION OF NET ASSET VALUE
Under the 1940 Act, the Board is responsible for determining
in good faith the fair value of securities of each Fund, and each
class of each Fund. In accordance with procedures adopted by the
Board, the net asset value per share is calculated by determining
the net worth of each Fund (assets, including securities at
market value, minus liabilities) divided by the number of that
Fund's outstanding shares. All securities are valued as of the
close of regular trading on the New York Stock Exchange (normally
4:00 p.m. New York time). Except for the Transamerica Premier
Cash Reserve Fund, each Fund will compute its net asset value
once daily at the close of such trading on each day that the New
York Stock Exchange is open for business (as described in the
Prospectus). The Transamerica Premier Cash Reserve Fund will
determine its net asset value only on days that the Federal
Reserve is open.
In the event that the New York Stock Exchange, the Federal
Reserve, or the national securities exchange on which stock
options are traded adopt different trading hours on either a
permanent or temporary basis, the Board will reconsider the time
at which net asset value is computed. In addition, the Funds may
compute their net asset value as of any time permitted pursuant
to any exemption, order or statement of the SEC or its staff.
Assets of the Funds (other than the Transamerica Premier
Cash Reserve Fund) are valued as follows:
(a) equity securities and other similar investments
("Equities") listed on any U.S. or foreign stock
exchange or the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") are
valued at the last sale price on that exchange or
NASDAQ on the valuation day; if no sale occurs,
Equities traded on a U.S. exchange or NASDAQ are valued
at the mean between the closing bid and closing asked
prices. Equities traded on a foreign exchange will be
valued at the official bid price;
(b) over-the-counter securities not quoted on NASDAQ are
valued at the last sale price on the valuation day or,
if no sale occurs, at the mean between the last bid and
asked prices;
(c) debt securities purchased with a remaining maturity of
61 days or more are valued on the basis of dealer-
supplied quotations or by a pricing service selected by
the Investment Adviser and approved by the Board;
(d) options and futures contracts are valued at the last
sale price on the market where any such option or
futures contracts is principally traded;
(e) over-the-counter options are valued based upon prices
provided by market makers in such securities or dealers
in such currencies.
(f) forward foreign currency exchange contracts are valued
based upon
<PAGE>
quotations supplied by dealers in such contracts;
(g) all other securities and other assets, including those
for which a pricing service supplies no quotations or
quotations are not deemed by the Investment Adviser to
be representative of market values, but excluding debt
securities with remaining maturities of 60 days or
less, are valued at fair value as determined in good
faith pursuant to procedures established by the Board;
and
(h) debt securities with a remaining maturity of 60 days or
less will be valued at their amortized cost, which
approximates market value.
Equities traded on more than one U.S. national securities
exchange or foreign securities exchange are valued at the last
sale price on each business day at the close of the exchange
representing the principal market for such securities. The value
of all assets and liabilities expressed in foreign currencies
will be converted into U.S. dollar values at the noon (Eastern
Standard Time) Reuters spot rate. If such quotations are not
available, the rate of exchange will be determined in good faith
by or under procedures established by the Board.
All of the assets of the Transamerica Premier Cash Reserve
Fund are valued on the basis of amortized cost in an effort to
maintain a constant net asset value of per share $1.00. The Board
has determined that to be in the best interests of the
Transamerica Premier Cash Reserve Fund and its shareholders.
Under the amortized cost method of valuation, securities are
valued at cost on the date of their acquisition, and thereafter a
constant accretion of any discount or amortization of any premium
to maturity is assumed, regardless of the impact of fluctuating
interest rates on the market value of the security. While this
method provides certainty in valuation, it may result in periods
in which value as determined by amortized cost is higher or lower
than the price the Fund would receive if it sold the security.
During such periods, the quoted yield to investors may differ
somewhat from that obtained by a similar fund which uses
available market quotations to value all of its securities.
The Board has established procedures reasonably designed,
taking into account current market conditions and the
Transamerica Premier Cash Reserve Fund's investment objective, to
stabilize the net asset value per share for purposes of sales and
redemptions at $1.00. These procedures include review by the
Board, at such intervals as it deems appropriate, to determine
the extent, if any, to which the net asset value per share
calculated by using available market quotations deviates from
$1.00 per share. In the event such deviation should exceed one
half of one percent, the Board will promptly consider initiating
corrective action. If the Board believes that the extent of any
deviation from a $1.00 amortized cost price per share may result
in material dilution or other unfair results to new or existing
shareholders, it will take such steps as it considers appropriate
to eliminate or reduce these consequences to the extent
reasonably practicable. Such steps may include: (1) selling
securities prior to maturity; (2) shortening the average maturity
of the fund; (3) withholding or reducing dividends; or (4)
utilizing a net asset value per share determined from available
market quotations. Even if these steps were taken, the
Transamerica Premier Cash Reserve Fund's net asset value might
still decline.
<PAGE>
PERFORMANCE INFORMATION
Performance information for the Funds including the yield
and effective yield of the Transamerica Premier Cash Reserve
Fund, the yield of the remaining Funds, and the total return of
all Funds, may appear in reports or promotional literature to
current or prospective shareholders.
MONEY MARKET FUND YIELDS Current yield for the Transamerica
Premier Cash Reserve Fund will be computed by determining the net
change, exclusive of capital changes at the beginning of a seven-
day period in the value of a hypothetical investment, subtracting
any deductions from shareholder accounts, and dividing the
difference by the value of the hypothetical investment at the
beginning of the base period to obtain the base period return.
This base period return is then multiplied by (365/7) with the
resulting yield figure carried to at least the nearest hundredth
of one percent.
Calculation of "effective yield" begins with the same "base
period return" used in the calculation of yield, which is then
annualized to reflect weekly compounding pursuant to the
following formula:
Effective Yield = [(Base Period Return + 1) /365/7/] - 1
30-DAY YIELD FOR NON-MONEY MARKET FUNDS Quotations of yield for
the remaining Funds will be based on all investment income per
share earned during a particular 30-day period, less expenses
accrued during the period ("net investment income"), and will be
computed by dividing net investment income by the value of a
share on the last day of the period, according to the following
formula:
Yield = 2[({[a-b]/cd} + 1) /6/ - 1]
Where:
a = dividends and interest earned during the period
b = the expenses accrued for the period (net of
reimbursements)
c = the average daily number of shares outstanding during
the period
d = the maximum offering price per share on the last day of
the period
AVERAGE ANNUAL TOTAL RETURN FOR NON-MONEY MARKET FUNDS Quotations
of average annual total return for any Fund will be expressed in
terms of the average annual compounded rate of return of a
hypothetical investment in a Fund over a period of one, five and
ten years (or, if less, up to the life of the Fund), calculated
pursuant to the formula:
P(1 + T) /n/ = ERV
Where:
P = a hypothetical initial payment of $1,000
T = an average annual total return
<PAGE>
n = the number years
ERV= the ending redeemable value of a hypothetical $1,000
payment made at the beginning of the 1, 5, or 10 year
period at the end of the 1, 5, 10 year period (or
fractional portion thereof)
Any performance data quoted for a Fund will represent
historical performance and the investment return and principal
value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than original
cost.
PUBLISHED PERFORMANCE From time to time the Company may publish,
or provide telephonically, an indication of the Funds' past
performance as measured by independent sources such as (but not
limited to) Lipper Analytical Services, Incorporated,
Weisenberger Investment Companies Service, Donoghue's Money Fund
Report, Barron's, Business Week, Changing Times, Financial World,
Forbes, Fortune, Money, Personal Investor, Sylvia Porter's
Personal Finance and The Wall Street Journal. The Company may
also advertise information which has been provided to the NASD
for publication in regional and local newspapers.
In addition, the Company may from time to time advertise its
performance relative to certain indexes and benchmark
investments, including:
. the Lipper Analytical Services, Inc. Mutual Fund
Performance Analysis, Fixed-Income Analysis and Mutual
Fund Indexes (which measure total return and average
current yield for the mutual fund industry and rank
mutual fund performance);
. the CDA Mutual Fund Report published by CDA Investment
Technologies, Inc. (which analyzes price, risk and
various measures of return for the mutual fund
industry);
. the Consumer Price Index published by the U.S. Bureau
of Labor Statistics (which measures changes in the
price of goods and services);
. Stocks, Bonds, Bills and Inflation published by
Ibbotson Associates (which provides historical
performance figures for stocks, government securities
and inflation);
. the Hambrecht & Quist Growth Stock Index;
. the NASDAQ OTC Composite Prime Return;
. the Russell Midcap Index;
. the Russell 2000 Index;
. the ValueLine Composite;
. the Wilshire 4500 Index;
. the Salomon Brothers World Bond Index (which measures
the total return in U.S. dollar terms of government
bonds, Eurobonds and foreign bonds of ten countries,
with all such bonds having a minimum maturity of five
years);
. the Shearson Lehman Brothers Aggregate Bond Index or
its component indexes (the Aggregate Bond Index
measures the performance of Treasury, U.S. Government
agencies, mortgage and Yankee bonds);
. the S&P Bond indexes (which measure yield and price of
corporate, municipal and U.S. Government bonds);
. the J.P. Morgan Global Government Bond Index;
<PAGE>
. Donoghue's Money Market Fund Report (which provides
industry averages of 7-day annualized and compounded
yields of taxable, tax-free and U.S. Government money
market funds);
. historical investment data supplied by the research
departments of Goldman Sachs, Lehman Brothers, First
Boston Corporation, Morgan Stanley (including EAFE),
Salomon Brothers, Merrill Lynch, Donaldson Lufkin and
Jenrette or other providers of such data;
. the FT-Actuaries Europe and Pacific Index;
. mutual fund performance indexes published by
Morningstar, Inc., Variable Annuity Research & Data
Service, the Investment Company Institute, the
Investment Company Data, Inc., Media General Financial,
and Value Line Mutual Fund Survey; and
. financial industry analytical surveys, such as Piper
Universe.
The composition of the investments in such indexes and the
characteristics of such benchmark investments are not identical
to, and in some cases are very different from, those of a Fund.
These indexes and averages are generally unmanaged and the items
included in the calculations of such indexes and averages may be
different from those of the equations used by the Company to
calculate a Fund's performance figures.
The Funds may also from time to time include in such
advertising a total return figure that is not calculated
according to the formula set forth above in order to compare more
accurately the performance of a Fund with other measures of
investment return. For example, unmanaged indexes may assume the
reinvestment of dividends but generally do not reflect deductions
for administrative and management costs and expenses.
The Company may from time to time summarize the substance of
discussions contained in shareholder reports in advertisements
and publish the Investment Adviser's views as to markets, the
rationale for a Fund's investments, and discussions of the Fund's
current asset allocation.
From time to time, advertisements or information may include
a discussion of certain attributes or benefits to be derived by
an investment in a particular Fund. Such advertisements or
information may include symbols, headlines or other material
which highlight or summarize the information discussed in more
detail in the communication.
Such performance data will be based on historical results
and will not be intended to indicate future performance. The
total return or yield of a Fund will vary based on market
conditions, expenses, investments, and other factors. The value
of a Fund's shares will fluctuate and an investor's shares may be
worth more or less than their original cost upon redemption. The
Company may also, at its discretion, from time to time make a
list of a Fund's holdings available to investors upon
request.
<PAGE>
TAXES
Each Fund intends to qualify and to continue to qualify as a
regulated investment company ("RIC") under the Internal Revenue
Code of 1986, as amended (the "Code"). The "Distribution
Requirement," in order to qualify for that treatment, is that
each Fund must distribute to its shareholders for each taxable
year at least 90% of its investment company taxable income,
consisting generally of net investment income, net short-term
capital gain, and net gains from certain foreign currency
transactions. The Company must also meet the following additional
requirements: (1) The Fund must derive at least 90% of its gross
income each taxable year from dividends, interest, payments with
respect to securities loans, and gains from the sale or other
disposition of securities or foreign currencies, or other income
(including gains from options, futures, or forward contracts)
derived with respect to its business of investing in securities
or those currencies ("Income Requirement"); (2) The Fund must
derive less than 30% of its gross income each taxable year from
gains (without including losses) on the sales or other
disposition of securities, or any of the following, that were
held for less than three months - options, futures, or forward
contracts (other than those on foreign currencies), or foreign
currencies (or options, futures, or forwards thereon) that are
not directly related to the Fund's principal business of
investing in securities (or options and futures with respect
thereto) ("Short-Short Limitation"); (3) At the close of each
quarter of the Fund's taxable year, at least 50% of the value of
its total assets must be represented by cash and cash items, U.S.
Government securities, securities of other RIC's, and other
securities that, with respect to any one issuer, do not exceed 5%
of the value of the Fund's total assets and that do not represent
more than 10% of the outstanding voting securities of the issuer;
and (4) At the close of each quarter of the Fund's taxable year,
not more than 25% of the value of its total assets may be
invested in securities (other than U.S. Government securities or
the securities of other RIC's) of any one issuer.
Each Fund will subject to a nondeductible 4% excise tax on
amounts not distributed to shareholders on a timely basis. The
Fund intends to make sufficient distributions to avoid this 4%
excise tax.
Dividends and interest received by each Fund may be subject
to income, withholding, or other taxes imposed by foreign
countries and U.S. possessions that would reduce the yield on its
securities. Tax conventions between certain countries and the
United States may reduce or eliminate these foreign taxes,
however, and foreign countries generally do not impose taxes on
capital gains in respect to investments by foreign
investors.
<PAGE>
Certain of the Funds may invest in the stock of "passive
foreign investment companies" ("PFIC's"). A PFIC is a foreign
corporation that, in general, meets either of the following
tests: (1) At least 75% of its gross income is passive; or (2) An
average of at least 50% of its assets produce, or are held for
the production of, passive income. Under certain circumstances,
the Fund would be subject to Federal income tax on a portion of
any "excess distribution" received on the stock of a PFIC or of
any gain on disposition of that stock (collectively "PFIC
income"), plus interest thereon, even if the Fund distributes the
PFIC income as a taxable dividend to its shareholders. The
balance of the PFIC income would be included in the Fund's
investment company taxable income, and accordingly, will not be
taxable to it to the extent that income is distributed to its
shareholders. If the Fund invests in a PFIC and elects to treat
the PFIC as a "qualified electing fund," then in lieu of the
foregoing tax and interest obligation, that Fund will be required
to include income each year to its pro rata share of the
qualified electing fund's annual ordinary earnings and net
capital gain (the excess of net long-term capital gain over net
short-term capital loss), even if they are not distributed to the
Fund; those amounts would be subject to the Distribution
Requirement. The ability of a Fund to make this election may be
limited.
The use of hedging strategies, such as writing (selling) and
purchasing options and futures contracts and entering into
forward contracts, involves complex rules that will determine for
income tax purposes the character and timing of recognition of
the income received in connection therewith by a Fund. Income
from the disposition of foreign currencies (except certain gains
therefrom that may be excluded by future regulations), and income
from transactions in options, futures, and forward contracts
derived by a Fund with respect to its business of investing in
securities or foreign currencies, will qualify as permissible
income under the Income Requirement. However, income from the
disposition of options and futures contract (other than those on
foreign currencies) will be subject to the Short-Short Limitation
if they are held for less than three months. Income from the
disposition of foreign currencies, and options, futures, and
forward contracts on foreign currencies, that are not directly
related to a Fund's principal business of investing in securities
(or options and futures with respect thereto) also will be
subject to the Short-Short Limitation if they are held for less
than three months.
If a Fund satisfies certain requirements, any increase in
value on a position that is part of a "designated hedge" will be
offset by any decrease in value (whether realized or not) of the
offsetting hedging position during the period of the hedge for
purposes of determining whether that Fund satisfies the Short-
Short Limitation. Thus, only the net gain (if any) from the
designated hedge will be included in gross income for purposes of
that limitation. Each Fund intends that, when it engages in
hedging transactions, it will qualify for this treatment, but it
is not clear whether this treatment will be available for all of
the Fund's hedging transactions. To the extent this treatment is
not available, a Fund may be forced to defer the closing out of
certain options and futures contracts beyond the time when it
otherwise would be advantageous to do so, in order for the Fund
to qualify as a RIC.
We have sought a ruling from the Internal Revenue Service to
the effect that the payment of different amounts as dividends
with respect to the Investor and Adviser shares by reason of
differences in their respective distribution expenses does not
result in the treatment of dividends or distributions of the Fund
as "preferential dividends" under the Internal Revenue Code of
1986, as amended, and thus will not adversely affect the Fund's
tax status as a regulated investment company. There can be no
assurance that such a ruling will be obtained.
<PAGE>
The foregoing is only a general summary of some of the
important Federal income tax considerations generally affecting
the Funds and their shareholders. No attempt is made to present a
complete explanation of the Federal tax treatment of the Funds'
activities. Potential investors are urged to consult their own
tax advisers for more detailed information and for information
regarding any applicable state, local, or foreign taxes.
OTHER INFORMATION
LEGAL MATTERS Legal advice relating to certain matters under the
federal and state securities laws applicable to the issue and
sale of shares of the Funds has been provided by Sutherland,
Asbill & Brennan, Washington, D.C.
INDEPENDENT AUDITORS Ernst & Young LLP, 200 Clarendon Street,
Boston, Massachusetts 02116, performs audits of the Funds'
financial statements.
OTHER INFORMATION A Registration Statement has been filed with
the Securities and Exchange Commission, under the Securities Act
of 1933 as amended, with respect to the Company and the shares of
the Funds discussed in this Statement of Additional Information.
Not all of the information set forth in the Registration
Statement, amendments and exhibits thereto has been included in
the Prospectus or this Statement of Additional Information.
Statements contained herein concerning the contents of certain
other legal instruments are intended to be summaries. For a
complete statement of the terms of these documents, reference
should be made to the instruments filed with the Commission.
FINANCIAL STATEMENTS
The statement of assets and liabilities of the Funds dated
September 7, 1995 is attached hereto.
39
<PAGE>
[LETTERHEAD OF ERNST & YOUNG LLP APPEARS HERE]
Report of Independent Auditors
Board of Directors
Transamerica Investors, Inc.
We have audited the accompanying statement of assets and liabilities of
Transamerica Investors, Inc. (comprised of the following Transamerica Premier
Funds: Equity Fund, Index Fund, Bond Fund, Balanced Fund, Short-Intermediate
Government Fund and Cash Reserve Fund) as of September 7, 1995. The statement of
assets and liabilities is the responsibility of the Company's management. Our
responsibility is to express an opinion on this statement of assets and
liabilities based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of assets and liabilities is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of assets and
liabilities. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of each of the
six funds of Transamerica Investors, Inc. as of September 7, 1995, in conformity
with generally accepted accounting principles.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
September 14, 1995
<PAGE>
Transamerica Investors, Inc.
Statement of Assets and Liabilities
September 7, 1995
<TABLE>
<CAPTION>
TRANSAMERICA
PREMIER
TRANSAMERICA SHORT- TRANSAMERICA
TRANSAMERICA TRANSAMERICA TRANSAMERICA PREMIER INTERMEDIATE PREMIER
PREMIER PREMIER PREMIER BALANCED GOVERNMENT CASH RESERVE
EQUITY FUND INDEX FUND BOND FUND FUND FUND FUND
----------- ---------- --------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash $16,670 $16,670 $16,670 $16,670 $16,670 $16,650
------- ------- ------- ------- ------- -------
NET ASSETS $16,670 $16,670 $16,670 $16,670 $16,670 $16,650
======= ======= ======= ======= ======= =======
Shares issued
and outstanding:
Adviser class 1 1 1 1 1 1
Investor class 1,666 1,666 1,666 1,666 1,666 1,649
Net asset value,
offering price
and redemption
price per share:
Adviser class $10.00 $10.00 $10.00 $10.00 $10.00 $1.00
Investor class $10.00 $10.00 $10.00 $10.00 $10.00 $1.00
</TABLE>
See accompanying note.
<PAGE>
Transamerica Investors, Inc.
Note to Statement of Assets and Liabilities
September 7, 1995
1. ORGANIZATION
Transamerica Investors, Inc. (Company), has filed a registration statement with
the Securities and Exchange Commission to organize and operate as an open-end
management investment company, but the registration has not yet become
effective. The Company, upon commencement of operations, will offer a mutual
fund series called Transamerica Premier Funds, comprising the Equity, Index,
Bond, Balanced, Short-Intermediate Government, and Cash Reserve Funds. Each Fund
is a separate investment portfolio of the Company with a distinct investment
objective, investment program policies, and registrations. The assets of each
Fund are segregated and a shareholder's interest is limited to the Fund in which
shares are owned. Each Fund has two classes of shares, Adviser and Investor. One
billion shares have been authorized for issue for each class.
On August 3, 1995, the Company sold the following Fund shares to Transamerica
Corporation:
<TABLE>
<CAPTION>
ADVISER CLASS INVESTOR CLASS
NUMBER OF PRICE PER NUMBER OF PRICE PER
SHARES SHARE SHARES SHARE
------ ----- ------ -----
<S> <C> <C> <C> <C>
Equity 1 $10.00 1,666 $10.00
Index 1 10.00 1,666 10.00
Bond 1 10.00 1,666 10.00
Balanced 1 10.00 1,666 10.00
Short-Intermediate
Government 1 10.00 1,666 10.00
Cash Reserve 1 1.00 16,649 1.00
</TABLE>
The Administrator, Transamerica Occidental Life Insurance Company, will pay the
organizational and other initial expenses of the Company incurred prior to the
initial offering of the Fund's shares.
<PAGE>
PART C
OTHER INFORMATION
C-1
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
All required financial statements will be included in a second pre-
effective amendment to this Registration Statement.
(b) Exhibits
(1) Articles of Incorporation of Transamerica Investors, Inc. /1/
-
(2) Amended Bylaws of Transamerica Investors, Inc. /2/
-
(3) Not Applicable.
(4) Not Applicable.
(5) Form of Investment Advisory and Administrative Services Agreement
between Transamerica Investors, Inc. and Transamerica Investment
Services, Inc. /2/
-
(6) (a) Form of Distribution Agreement between Transamerica
Investors, Inc. and Transamerica Securities Sales
Corporation ("TSSC"). /2/
-
(b) Form of Selling Agreement between TSSC and
Transamerica Financial Resources, Inc. /2/
-
(c) Form of Operating Agreement between Transamerica
Investors, Inc. and Charles Schwab & Co. /2/
-
(d) Form of Retail Services Agreement among Transamerica
Investors, Inc., Transamerica Occidental Life
Insurance Company and Charles Schwab & Co., Inc. /3/
-
(7) Not Applicable.
(8) (a) Form of Custodian Agreement between Transamerica
Investors, Inc. and State Street Bank and Trust
Company. /2/
-
C-1
<PAGE>
(b) Form of Sub-Custodian Agreement between State Street
Bank and Trust Company and State Street London
Limited. /2/
-
(9) Transfer Agency Agreement between Transamerica Investors, Inc. and
Boston Financial Data Services. /2/
-
(10) Opinion and Consent of Counsel. /2/
-
(11) (a) Consent of Sutherland, Asbill & Brennan. /3/
-
(b) Consent of Ernst & Young LLP. /3/
-
(12) No financial statements are omitted from Item 23.
(13) Subscription agreement. /2/
-
(14) Form of Disclosure Statement and Custodial Account Agreement for
Transamerica Investors IRA. /2/
-
(15) Form of Plan of Distribution Pursuant to Rule 12b-1. /2/
-
(a) Investor Shares.
(1) Transamerica Premier Equity Fund
(2) Transamerica Premier Index Fund
(3) Transamerica Premier Bond Fund
(4) Transamerica Premier Balanced Fund
(5) Transamerica Premier Short-Term Government Fund
(6) Transamerica Premier Cash Reserve Fund
(b) Adviser Shares.
(1) Transamerica Premier Equity Fund
(2) Transamerica Premier Index Fund
(3) Transamerica Premier Bond Fund
(4) Transamerica Premier Balanced Fund
(5) Transamerica Premier Short-Term Government Fund
(6) Transamerica Premier Cash Reserve Fund
(16) Not Applicable.
(17) Not Applicable.
(18) Form of Multi-Class Plan Pursuant to Rule 18f-3. /2/
-
(19) Powers of Attorney. /2/
-
C-2
<PAGE>
__________________
/1/ Filed with initial registration statement on April 3, 1995.
-
/2/ Filed with Pre-Effective Amendment No. 1 to this registration statement
-
on August 29, 1995.
/3/ Filed herewith.
-
ITEM 25. PERSON CONTROLLED BY OR UNDER COMMON CONTROL WITH THE REGISTRANT.
The Registrant, Transamerica Investors, Inc., is controlled by
Transamerica Occidental Life Insurance Company ("Transamerica Occidental"), a
wholly-owned subsidiary of Transamerica Insurance Corporation of California,
which, in turn is a wholly-owned subsidiary of Transamerica Corporation.
The following chart indicates the persons controlled by or under common
control with Transamerica Corporation:
TRANSAMERICA CORPORATION AND SUBSIDIARIES
-----------------------------------------
WITH STATE OR COUNTRY OF INCORPORATION
--------------------------------------
Transamerica Corporation
- ------------------------
ARC Reinsurance Corporation - Hawaii
*Coast Service Company - California
*Inter-America Corporation - California
*Mortgage Corporation of America - California
Pyramid Insurance Company, Ltd. - Hawaii
Pacific Cable Ltd. - Bermuda
TC Cable, Inc. (25% ownership) - Delaware
River Thames Insurance Company Ltd. (51% ownership) - United Kingdom
RTI Holdings, Inc. - Delaware
*TCS Inc. - Delaware
Trans International Entities Inc. - Delaware
C-3
<PAGE>
Transamerica Airlines, Inc. - Delaware
Transamerica Asset Management Group, Inc. - Delaware
Criterion Investment Management Company - Texas
Criterion Rogge Global Advisers, Inc. (50% ownership) - Texas
*Transamerica Corporation (Oregon) - Oregon
(S)Transamerica Delaware, L.P. - Delaware
Transamerica Finance Group, Inc. - Delaware
BWAC Twelve, Inc. - Delaware
Transamerica Insurance Finance Corporation - Maryland
Transamerica Insurance Finance Corporation, California -
California
Transamerica Insurance Finance Corporation, Canada - Canada
Transamerica Insurance Finance Company (U.K.) - Maryland
Transamerica Financial Services Finance Company - Delaware
(TFG owns 100% of common stock; TFC owns 100% of preferred stock)
Transamerica HomeFirst, Inc. - California
Transamerica Finance Corporation - Delaware
Arcadia General Insurance Company - Arizona
Arcadia National Life Insurance Company - Arizona
First Credit Corporation - Delaware
*Pacific Agency, Inc. - Indiana
Pacific Finance Loans - California
Pacific Service Escrow Inc. - Delaware
Transamerica Acceptance Corporation - Delaware
Transamerica Credit Corporation - Nevada
Transamerica Credit Corporation - Washington
Transamerica Financial Consumer Discount Company - Pennsylvania
Transamerica Financial Corporation - Nevada
Transamerica Financial Professional Services, Inc. - California
Transamerica Financial Services, Inc. - British Columbia
Transamerica Financial Services - California
NAB Services, Inc. - California
Transamerica Financial Services - Wyoming
Transamerica Financial Services Company - Ohio
Transamerica Financial Services, Inc. - Alabama
Transamerica Financial Services, Inc. - Arizona
Transamerica Financial Services, Inc. - Kansas
C-4
<PAGE>
Transamerica Financial Services Inc. - Minnesota
Transamerica Financial Services, Inc. - New Jersey
Transamerica Financial Services, Inc. - Texas
Transamerica Financial Services (Inc.) - Oklahoma
Transamerica Financial Services of Dover, Inc. - Delaware
Transamerica Insurance Administrators, Inc. - Delaware
TELCO Holding Co., Inc. - Delaware
Transamerica Commercial Finance Corporation, I - Delaware
BWAC Credit Corporation - Delaware
BWAC International Corporation - Delaware
MRTO Holdings, Inc. - Delaware
Transamerica Business Credit Corporation - Delaware
Transamerica Inventory Finance Corporation - Delaware
Transamerica Commercial Finance Corporation - Delaware
TCF Asset Management Corporation - Colorado
BWAC Seventeen, Inc. - Delaware
Transamerica Commercial Finance Corporation, Canada -
Canada
TCF Asset Management Corporation, Canada - Canada
Macey (North) Limited - Ontario
TCF Commercial Leasing Corporation, Canada - Ontario
Transamerica Commercial Finance Canada, Limited - Ontario
Transamerica Insurance Administrators, Inc. - Delaware
Arcadia National Life Insurance Company - Arizona
BWAC Twenty, Inc. - Delaware
Arcadia General Insurance Company - Arizona
Transamerica Commercial Finance France S.A. - France
BWAC Twenty-One, Inc. - Delaware
Transamerica Commercial Holdings Limited - United Kingdom
Transamerica Trailer Leasing Limited -
United Kingdom (51%)
Transamerica Commercial Finance Limited - United Kingdom
Transamerica GmbH Inc. - Delaware
Transamerica Financieringsmattschappij B.V. - Netherlands
*Transamerica Finanzierungs GmbH - Germany
(BWAC) Twenty-One, Inc./Transamerica GmbH Inc.)
Transamerica Finanzierungs GmbH - Germany
Transamerica Rental Finance Corporation - Delaware
TA Leasing Holdings Co., Inc. - Delaware
Transamerica Leasing Inc. - Delaware
Transamerica Leasing Holdings, Inc. - Delaware
Intermodal Equipment, Inc. - Delaware
Transamerica Leasing N.V. - Belgium
C-5
<PAGE>
Transamerica Leasing Sri. - Italy
Transamerica Container Acquisition Corporation -
Delaware
Transamerica Container Acquisition II
Corporation - Delaware
Transamerica Distribution Services Inc. - Delaware
Transamerica Leasing Coordination Center - Belgium
Transamerica Leasing do Brasil S/C Ltda. - Brazil
Transamerica Leasing GmbH - Germany
Transamerica Leasing (HK) Ltd. - Hong Kong
Transamerica Leasing Limited - United Kingdom
ICS Terminals (U.K.) Limited - United Kingdom
Transamerica Leasing Pty. Ltd. - Australia
Transamerica Leasing (Canada) Inc. - Canada
Transamerica Tank Container Leasing Pty. Limited -
Australia
Transamerica Trailer Holdings I Inc. - Delaware
Transamerica Trailer Holdings II Inc. - Delaware
Transamerica Trailer Holdings III - Delaware
Transamerica Trailer Leasing AB - Sweden
Transamerica Trailer Leasing (Belgium) N.V. -
Belgium
Transamerica Trailer Leasing (Netherlands) B.V. -
Netherlands
Transamerica Trailer Leasing A/S - Denmark
Transamerica Trailer Leasing GmbH - Germany
Transamerica Trailer Leasing S.A. - France
Transamerica Trailer Leasing S.p.A. - Italy
Transamerica Trailer Spain, S.A. - Spain
Transamerica Transport Inc. - New Jersey
*Transamerica Homes, Inc. - Delaware
Transamerica Information Management Services, Inc. - Delaware
Transamerica Insurance Corporation of California - California
Arbor Life Insurance Company - Arizona
Plaza Insurance Sales, Inc. - California
*Transamerica Advisors, Inc. - California
Transamerica Annuity Service Corporation - New Mexico
Transamerica Financial Resources, Inc. - Delaware
Financial Resources Insurance Agency of Texas, Inc. - Texas
C-6
<PAGE>
TBK Insurance Agency of Ohio - Ohio
Transamerica Financial Resources Insurance Agency of Alabama,
Inc. - Alabama
Transamerica Financial Resources Insurance Agency of
Massachusetts, Inc. - Massachusetts
Transamerica Securities Sales Corporation - Maryland
Transamerica International Insurance Services, Inc. - Delaware
Home Loans & Finance Limited - United Kingdom
Transamerica Occidental Life Insurance Company - California
First Transamerica Life Insurance Company - New York
*NEF Investment Company - Delaware
Transamerica Life Insurance and Annuity Company - California
Transamerica Assurance Company - Colorado
Transamerica Occidental Life Insurance Company of Illinois
- Illinois
Transamerica Life Insurance Company of Canada - Canada
USA Administration Services, Inc. - Kansas
Transamerica Products, Inc. - California
Transamerica Leasing Ventures, Inc. - California
Transamerica Products I, Inc. - California
Transamerica Products II, Inc. - California
Transamerica Products IV, Inc. - California
Transamerica Service Company - Delaware
Transamerica International Holdings, Inc. - Delaware
TC Cable, Inc. (75% ownership)
*Transamerica International Limited - Canada
Transamerica Investment Services, Inc. - Delaware
*Transamerica Land Capital, Inc. - California
*Bankers Mortgage Company of California - California
Transamerica Overseas Finance Corporation N.V. - Netherlands Antilles
.Transamerica Real Estate Tax Service
Transamerica Flood Hazard Certification - New Jersey
Transamerica Realty Services, Inc. - Delaware
*The Gilwell Company - California
Pyramid Investment Corporation - Delaware
Transamerica Minerals Company - California
Transamerica Oakmont Corporation - California
Transamerica Properties, Inc. - Delaware
C-7
<PAGE>
Transamerica Real Estate Management Co. - California
Transamerica Retirement Management Corporation - Delaware
Ventana Inn, Inc. - California
*Transamerica Systems Corporation - Delaware
Transamerica Telecommunications Corporation - Delaware
*Designates INACTIVE COMPANIES
.A Division of Transamerica Corporation
(S)Limited Partner, Transamerica Corporation is General Partner
ITEM 26. NUMBERS OF HOLDERS OF SECURITIES
As of the date of this registration statement, each class of each Fund
had one shareholder, Transamerica Corporation, that had contributed the initial
seed money for the Corporation.
ITEM 27. INDEMNIFICATION
Transamerica Investors' Bylaws provide in Article VII as follows:
Section 1. OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND OTHERS. The
Corporation shall indemnify its Officers, Directors, employees and agents and
any person who serves at the request of the Corporation as a Director, Officer
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise as follows:
(a) Every person who is or has been a Director, Officer, employee or
agent of the Corporation and persons who serve at the Corporation's
request as Director, Officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise shall be
indemnified by the Corporation to the fullest extent permitted by law
against liability and against all expenses reasonably incurred or paid by
him or her in connection with any debt, claim, action, demand, suit,
proceeding, judgment, decree, liability or obligation of any kind in
which he or she becomes involved as a party or otherwise by virtue of his
or her being or having been a Director, Officer, employee or agent of the
Corporation or of another employee or agent of the Corporation or of
another corporation, partnership, joint venture, trust or other
enterprise at the request of
C-8
<PAGE>
the Corporation and against amounts paid or incurred by him or her in the
settlement thereof.
(b) The words "claim," "action," "suit" or "proceeding" shall apply to
all claims, actions, suits or proceedings (civil, criminal,
administrative, legislative, investigative or other, including appeals),
actual or threatened, and the words "liability" and "expenses" shall
include, without limitation, attorneys' fees, costs, judgments, amounts
paid in settlement, fines, penalties and other liabilities.
(c) No indemnification shall be provided hereunder to a Director,
Officer, employee or agent against any liability to the Corporation or
its shareholders by reason of willful misfeasance, active and deliberate
dishonesty, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
(d) The rights of indemnification herein provided may be insured
against by policies maintained by the Corporation, shall be severable,
shall not affect any other rights to which any Director, Officer,
employee or agent may now or hereafter be entitled, shall continue as to
a person who has ceased to be such Director, Officer, employee or agent
and shall insure to the benefit of the heirs, executors and
administrators of such a person.
(e) In the absence of a final decision on the merits by a court or
other body before which such proceeding was brought, an indemnification
payment will not be made, except as provided in paragraph (f) of this
Section 1, unless in the absence of such a decision, a reasonable
determination based upon a factual review has been made: (1) by a
majority vote of a quorum of non-party Directors who are not "interested
persons" of the Corporation as defined in Section 2(a)(19) of the
Investment Company Act of 1940; (2) by independent legal counsel approved
by the Board of Directors in a written opinion that the indemnitee was
not liable for an act of willful misfeasance, bad faith, gross negligence
or reckless disregard of duties; or (3) by the shareholders.
(f) The Corporation further undertakes that advancement of expenses
incurred in the defense of a proceeding by an Officer, Director, or
controlling person of the Corporation in advance of the final disposition
of the proceeding (upon receipt by the Corporation of: (a) a written
affirmation by the Officer, Director, or controlling person of the
Corporation of that person's good faith belief that the standard of
conduct necessary for idemnification by the Corporation as authorized in
the Maryland General Corporation Law has been met; and (b) a written
undertaking by or on behalf of such person to repay the amount if it
shall ultimately be determined that the standard of conduct as stated
above has not been met) will not be made absent the fulfillment of at
least one of the following conditions: (1) the Corporation is insured
against losses arising by reason of any lawful advances; or (2) a
majority of a quorum of disinterested, non-party Directors or
C-9
<PAGE>
independent legal counsel in a written opinion makes a factual
determination that there is a reason to believe the indemnitee will be
entitled to indemnification.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling person of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by the director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
The directors and officers of Transamerica Investors, Inc. are covered
under a Directors and Officers liability program which includes direct coverage
to directors and officers and corporate reimbursement to reimburse the Company
for indemnification of its directors and officers. Such directors and officers
are indemnified for loss arising from any covered claim by reason of any
Wrongful Act in their capacities as directors or officers. In general, the term
"loss" means any amount which the insureds are legally obligated to pay for a
claim for Wrongful Acts. In general, the term "Wrongful Acts" means any breach
of duty, neglect, error, misstatement, misleading statement or omission caused,
committed or attempted by a director of officer while acting individually or
collectively in their capacity as such, claimed against them solely by reason of
their being directors and officers. The limit of liability under the program is
$5,000,000 for the period from the date of effectiveness of this registration
statement to 2/1/96. The primary policy under the program is with ICI Mutual
Insurance Company.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER:
Transamerica Investment Services, Inc. (the "Adviser") is a registered adviser.
The Adviser is a direct wholly-owned subsidiary of Transamerica Corporation.
Information as to the officers and directors of the Adviser is included in its
Form ADV last filed in March 1995 with the Securities and Exchange Commission
(registration number 801-7740) and is incorporated herein by reference.
ITEM 29. PRINCIPAL UNDERWRITER
C-10
<PAGE>
(a) Transamerica Securities Sales Corporation ("TSSC") serves as the
principal underwriter of shares of the Funds.
(b) TSSC is the principal underwriter for the Registrant. Transamerica
Financial Resources, Inc. ("TFR") will also distribute shares of the funds. Set
forth below is a list of the directors and officers of TSSC and TFR and their
positions with the Registrant.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICE POSITIONS
BUSINESS ADDRESS* WITH TSSC WITH REGISTRANT
- ----------------- ---------------------- ---------------
<S> <C> <C>
Barbara A. Kelley President and Director None
Regina M. Fink Secretary and Director None
Benjamin Tang Treasurer None
Nooruddin Veerjee Director Director & CEO
Arlene Falk Withers Director None
James B. Roszak Director None
Dan S. Trivers Senior Vice President None
Grace F. Carpenter Vice President None
Nicki Bair Vice President President, CA & CFO
Christopher W. Shaw Second Vice President Assistant Vice President
</TABLE>
* The principal business address for each officer and director is 1150
South Olive Street, Los Angeles, CA 90015.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS
BUSINESS ADDRESS* WITH TFR WITH REGISTRANT
- ----------------- ---------------- ---------------
<S> <C> <C>
Barbara A. Kelley President and Director None
Regina M. Fink Secretary None
Benjamin Tang Treasurer None
Gilbert Cronin Director None
James W. Dederer Director None
James B. Roszak Director None
Ronald F. Wagley Director None
</TABLE>
* The principal business address for each officer and director is 1150
South Olive Street, Los Angeles, CA 90015.
C-11
<PAGE>
ITEM 30. LOCATION AND ACCOUNTS AND RECORDS
All accounts and records required to be maintained by Section 31(a) of
the 1940 Act and the rules promulgated thereunder are maintained at the offices
of:
Registrant, located at 1150 South Olive, Los Angeles, California
90015-2211;
State Street Bank and Trust Company, Registrant's custodian, located at
225 Franklin Street, Boston, Massachusetts 02110; and
Boston Financial Data Services, Inc., a subsidiary of State Street,
located at 2 Heritage Drive, Quincy, Massachusetts 02171.
ITEM 31. MANAGEMENT SERVICES
All management contracts are discussed in Parts A or B.
C-12
<PAGE>
ITEMS 32. UNDERTAKINGS
(a) Not Applicable.
(b) Registrant undertakes that it will file a post-effective amendment, using
financial statements of a reasonably current date which need not be certified,
within four to six months from the commencement of operations of the Funds.
(c) Registrant hereby undertakes to furnish each person to whom a prospectus
is delivered with a copy of its most recent annual report to shareholders, upon
request and without charge.
(d) Registrant hereby undertakes to call for a meeting of shareholders for
the purpose of voting upon the question of removal of one or more of the
directors if requested to do so by the holders of at least 10% of a Fund's
outstanding shares, and to assist in communication with other shareholders as
required by Section 16(c).
C-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, Transamerica Investors, Inc. has duly caused
this Pre-Effective Amendment No. 2 to the Registration Statement to be signed on
its behalf by the undersigned in the City of Los Angeles, State of California on
this 15th day of September, 1995.
TRANSAMERICA INVESTORS, INC.
By: /s/ Nicki Blair
---------------------------------
Nicki Blair
Director, Chief Financial Officer and
Chief Accounting Officer
As required by the Securities Act of 1933, this Pre-Effective Amendment
No. 2 to the Registration Statement has been signed by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signatures Titles Date
- ---------- ------ ----
<S> <C> <C>
_________________________* Director and Chief September 15, 1995
Nooruddin Veerjee Executive Officer
_________________________* President, Chief September 15, 1995
Nicki Blair Financial Officer and
Chief Accounting Officer
_________________________* Director September 15, 1995
Sidney E. Harris
_________________________* Director September 15, 1995
Charles C. Reed
</TABLE>
C-14
<PAGE>
<TABLE>
<S> <C> <C>
_________________________* Director September 15, 1995
Gary U. Rolle
_________________________* Director September 15, 1995
Carl R. Terzian
</TABLE>
/s/ Nicki Bair On September 15, 1995 as Attorney-in-Fact pursuant
_________________________ to powers of attorney previously filed and in her
*By: Nicki Bair own capacity as President, Chief Financial Officer
and Chief Accounting Officer
C-15
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit Description Page
No. of Exhibit No.
- ------- ---------- ----
<S> <C> <C>
(6)(d) Form of Retail Services Agreement among Transamerica
Investors, Inc., Transamerica Occidental Life
Insurance Company and Charles Schwab & Co., Inc..................
(11)(a) Consent of Sutherland, Asbill & Brennan..........................
(11)(b) Consent of Ernst & Young LLP.....................................
</TABLE>
______________________
* Page numbers included only in manually executed original, in compliance with
Rule 403(d).
<PAGE>
EXHIBIT (6)(d)
--------------
Form of Retail Services Agreement among Transamerica
Investors, Inc., Transamerica Occidental Life Insurance
Company and Charles Schwab & Co., Inc.
<PAGE>
CHARLES SCHWAB
MUTUAL FUND MARKETPLACE(R)
- --------------------------------------------------------------------------------
RETAIL
SERVICES AGREEMENT
This Agreement is made as of _______________ 199___ between Charles
Schwab & Co., Inc. ("Schwab"), a California corporation, each registered
investment company ("Fund Company") executing this Agreement, on its own behalf
and on behalf of each of the series or classes of shares, if any, listed on
Schedule I, as amended from time to time (such series or classes being referred
to as the "Fund(s)"), and Fund Affiliate (defined below) that has executed this
Agreement. Fund Company and Fund Affiliate are collectively referred to herein
as "Fund Parties." In the event that there are no series or classes of shares
listed on Schedule I, the term "Funds(s)" shall mean "Fund Company".
WHEREAS Fund Affiliate is either (i) an investment adviser to or
administrator for the Funds or (ii) the principal underwriter or distributor for
the Funds.
WHEREAS Fund Parties wish to have Schwab perform certain recordkeeping,
shareholder communication, and other services for each Fund; and
WHEREAS Schwab is willing to perform such services on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
set forth below, the parties agree as follows:
1. Services
--------
a. During the term of this Agreement, Schwab shall perform the
services set forth on Exhibit A hereto, as such exhibit may be amended from time
to time by mutual consent of the parties (the"Services").
b. In processing purchase, redemption, transfer and exchange
orders placed by Schwab on behalf of its customers, and in order to facilitate
Schwabs's performance of Services, the parties agree that the Operating
Agreement, dated as of _______________ 199___ between Schwab and Fund Company,
as amended from time to time ("Operating Agreement"), is incorporated herein by
this reference. All terms and conditions of the Operating Agreement shall be
binding as between Schwab and Fund Parties, and the references to Fund Company
therein shall be as deemed to mean Fund Parties for the purposes of this
Agreement. In the event of any inconsistency between the Operating Agreement and
this Agreement, this Agreement shall control.
2. Fees
----
For the Services, Schwab shall receive a fee (the "Fee") which
shall be calculated and paid in accordance with Exhibit B hereto. Schedule II
reflects the amount of the Fee that each Fund Party has agreed, as between them,
to pay. Should Exhibit A be amended to revise the Services, the parties shall
also amend Exhibit B and Schedule II, if necessary, in order to reflect any
changes in the Fee.
3. Transaction Charges
-------------------
Schwab shall not, during the term of this Agreement, assess against
or collect from its customers any transaction fee upon the purchase or
redemption of any Fund's shares that are considered in calculating the Fee. The
parties acknowledge and agree that Schwab may collect such transaction fees from
certain customers (including "Active Traders," as Schwab may define that term)
for certain special trading services and from other customers upon such other
customers' redemption of certain shares. The value of shares as to which such
transaction fees are charged will not be included in the calculation of the Fee.
- --------------------------------------------------------------------------------
1
<PAGE>
- --------------------------------------------------------------------------------
4. Indemnification
---------------
a. Schwab shall indemnify and hold harmless Fund Parties and
their directors, officers, employees, and agents ("Indemnified Parties") from
and against any and all losses, claims, liabilities and expenses (including
reasonable attorney's fees ) ("Losses") incurred by any of them arising out of
(i) Schwab's dissemination of information regarding Fund Parties or a Fund that
is materially incorrect and that was not provided to Schwab, or approved, by a
Fund Party, its affiliated persons ("Affiliates") as defined under the
Investment Company Act of 1940, as amended (the "1940 Act"), or agents or (ii)
Schwab's willful misconduct or negligence in the performance of, or failure to
perform, its obligations under this Agreement, except to the extent such Losses
result from the negligence, willful misconduct or breach of this Agreement by an
Indemnified Party.
b. In any event, no party shall be liable for any special,
consequential or incidental damages.
5. Role and Relationship of Schwab
-------------------------------
The parties acknowledge and agree that the Services under this
Agreement are recordkeeping, shareholder communication and related services only
and are not the services of an underwriter or a principal underwriter of any
Fund within the meaning of the Securities Act of 1933, as amended, or the 1940
Act. This Agreement does not grant Schwab any right to purchase shares from any
Fund (although it does not preclude Schwab from purchasing any such shares), nor
does it constitute Schwab an agent of Fund Parties or any Fund for purposes of
selling shares of any Fund to any dealer or the public. To the extent Schwab is
involved in the purchase of shares of any Fund by Schwab's customers, such
involvement will be as agent of such customer only.
6. Information to be Provided
--------------------------
Fund Parties shall provide to Schwab prior to the effectiveness of
this Agreement or as soon thereafter as practicable:
a. Certified resolutions of the board of directors of each Fund
Party authorizing the Fund Party to enter into this Agreement and indicating the
officers authorized to execute this Agreement on behalf of the Fund Party; and
b. Two (2) copies of the then-current prospectus and statement of
additional information of each Fund. Fund Party shall provide Schwab with
written copies of any amendments to or changes in the Fund's prospectus or
statement of additional information as soon as practicable after such amendments
or changes become available.
7. Notices
-------
All notices required by this Agreement (excluding the Operating
Agreement) shall be in writing and delivered personally or sent by first class
mail. Such notices will be deemed to have been received as of the earlier of
actual physical receipt or three (3) days after deposit, first class postage
prepaid, in the United States mail. All such notices shall be made:
if to Schwab, to: Charles Schwab & Co., Inc.
101 Montgomery Street
San Francisco, CA 94104
Attention: John McGonigle
Senior Vice President/Mutual
Funds
with a copy to: General Counsel, at the same address;
if to Fund Party, to the address given below in the signature
block.
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
8. Nonexclusivity
--------------
Each Party acknowledges that the other may enter into agreements
similar to this Agreement with other parties for the performance of services
similar to those to be provided under this Agreement, unless otherwise agreed to
in writing by the parties.
9. Assignability
-------------
This Agreement is not assignable by any party without the other
parties' prior written consents and any attempted assignment in contravention
hereof shall be null and void; provided, however, that Schwab may, without the
consent of Fund Parties, assign its rights and obligations under this Agreement
to any Affiliate.
10. Exhibits and Schedules
----------------------
All Exhibits and Schedules attached to this Agreement, as they may
be amended from time to time, are by this reference incorporated into and made a
part of this Agreement.
11. Entire Agreement: Amendment
---------------------------
This Agreement (including the Exhibits and Schedules hereto),
together with the Operating Agreement, constitute the entire agreement between
the parties as to the subject matter hereof and supersede any and all
agreements, representations and warranties, written or oral, regarding such
subject matter made prior to the time at which this Agreement has been executed
and delivered by Schwab and Fund Parties. This Agreement and the Exhibits and
Schedules hereto may be amended only by a writing executed by each party hereto
that is to be bound by such amendment.
12. Governing Law
-------------
This Agreement will be governed by and interpreted under the laws
of the State of California as applied to contracts entered into and to be
performed entirely within that state.
13. Counterparts
------------
This Agreement may be executed in one or more counterparts, each of
which will be deemed an original, but all of which together shall constitute one
and the same instrument.
14. Effectiveness of Agreement: Termination
---------------------------------------
a. This Agreement will become effective as to a Fund as of the
later of (i) the date set forth on Schedule I opposite the name of the Fund or
(ii) such later date as Schwab may, in its discretion, designate.
b. This Agreement may be terminated as to a Fund by any party
(i) upon ninety (90) days' written notice to the other parties or (ii) upon such
shorter notice as is required by law, order, or instruction by a court of
competent jurisdiction or a regulatory body or self-regulatory organization with
jurisdiction over the terminating party or (iii) automatically, effective on the
day following the termination of any plan of distribution ("Rule 12b-1 Plan")
adopted and maintained pursuant to Rule 12b-1 under the 1940 Act by any Fund
that has a Rule 12b-1 Plan in effect as of the effective date of this Agreement,
provided that a portion of the Fee is paid pursuant to the Rule 12b-1 Plan.
c. After the date of termination as to a Fund, Fund Parties
will not be obligated to pay the Fee with respect to any shares of the Fund that
are first held in Schwab customer accounts after the date of such termination.
However, notwithstanding any such termination, Fund Parties will remain
obligated to pay Schwab the Fee as to each share of the Fund that was considered
in the calculation of the Fee as of the date of termination (a "Pre-Termination
Share"), for so long as such Pre-Termination Share is held in any Schwab
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
brokerage account and Schwab continues to perform substantially all of the
Services as to such Pre-Termination Share. Further, for so long as Schwab
continues to perform the Services as to any Pre-Termination Shares, this
Agreement will otherwise remain in full force and effect as to such
Pre-Termination Shares. Fund Parties shall reimburse Schwab promptly for any
reasonable expenses Schwab incurs in effecting any termination of this
Agreement, including delivery to a Fund Party of any records, instruments, or
documents reasonably requested by the Fund Party.
IN WITNESS WHEREOF, the parties have executed this Agreement by a duly
authorized representative of the parties hereto.
Charles Schwab & Co., Inc.
By: ___________________________________
John McGonigle
Senior Vice President/Mutual Funds
Date: ________________________________
_______________________________________ ____________________________________
Name of Fund Affiliate Name of Fund Company
By:____________________________________ By:_________________________________
Name:__________________________________ Name:_______________________________
Title:_________________________________ Title:______________________________
Address:_______________________________ Address:____________________________
_______________________________________ ____________________________________
Attn: ________________________________ Attn: _____________________________
Date: ________________________________ Date: _____________________________
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
EXHIBIT A
SERVICES
1. Record Maintenance
------------------
Schwab shall maintain the following records with respect to a Fund
for each customer who holds Fund shares in a Schwab brokerage account:
a. Number of shares;
b. Date, price and amount of purchases and redemptions (including
dividend reinvestments) and dates and amounts of dividends paid for at least the
current year to date;
c. Name and address of the customer, including zip codes and
social security numbers or taxpayers indentification numbers;
d. Records of distributions and dividend payments;
e. Any transfers of shares; and
f. Overall control records.
2. Shareholder Communications
--------------------------
Schwab shall:
a. Provide to a shareholder mailing agent employed by each Fund
for the purpose of mailing certain Fund-related materials the names and
addresses of all Schwab customers who hold shares of such Fund in their Schwab
brokerage accounts. Such shareholder mailing agent shall be a person or entity
engaged by such Fund in accordance with the Operating Agreement and the
Fund-related materials to be sent by such agent shall consist of updated
prospectuses and any supplements and amendments thereto, annual and other
periodic reports, proxy or information statements and other appropriate
shareholder communications.
b. Mail current Fund prospectuses and statements of additional
information and annual and other periodic reports upon customer request and, as
applicable, with confirmation statements;
c. Mail statements to customers on a monthly basis (or, as to
accounts in which there has been no activity in a particular month, no less
frequently than quarterly) showing, among other things, the number of shares of
each Fund owned by such customer and the net asset value of such Fund as of a
recent date;
d. Produce and mail to customers confirmation statements
reflecting purchases and redemptions of shares of each Fund in Schwab brokerage
accounts;
e. Respond to customer inquiries regarding, among other things,
share prices, account balances, dividend amounts and dividend payment dates; and
f. With respect to Fund shares purchased by customers after the
effective date of this Agreement, provide average cost basis reporting to the
customers to assist them in preparation of income tax returns.
3. Transactional Services
----------------------
Schwab shall communicate, as to shares of each Fund, purchase,
redemption and exchange orders reflecting the orders it receives from its
customers. Schwab shall also communicate, as to shares of each Fund, mergers,
splits and other reorganization activities.
- --------------------------------------------------------------------------------
A-1
<PAGE>
- --------------------------------------------------------------------------------
4. Tax Information Returns and Reports
-----------------------------------
Schwab shall prepare and file with the appropriate governmental
agencies, such information, returns and reports as are required to be so filed
for reporting (i) dividends and other distributions made, (ii) amounts withheld
on dividends and other distributions and payments under applicable federal and
state laws, rules and regulations, and (iii) gross proceeds of sales
transactions as required.
5. Fund Communications
-------------------
Schwab shall, on a daily basis and for each Fund, report the number
of shares on which the Fee is to be paid pursuant to this Agreement and the
number of shares on which no such Fee is to be paid. Schwab shall also provide
each Fund with monthly summaries of reports. Such summaries shall be expressed
in both shares and dollar amounts.
A-2
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
EXHIBIT B
CALCULATION OF FEE
1. The Fee shall be calculated by multiplying the Daily Value of
Qualifying Shares (defined below) times the appropriate Fee Rate (indicated
below). The Fee shall be computed daily and paid monthly in arrears.
2. The Daily Value of Qualifying Shares is the aggregate daily value of
all shares of the Fund held in Schwab brokerage accounts, subject to the
following exclusions ("Qualifying Shares"). There shall be excluded from the
shares (i) shares as to which a brokerage customer paid Schwab a transaction fee
upon the purchase of such shares, (ii) shares held in a Schwab brokerage account
prior to the effective date of this Agreement as to the Fund and (iii) shares
first held in a Schwab brokerage account after the termination of this Agreement
as to the Fund.
3. The Fee Rate is determined based on the aggregate value of the
Qualifying Shares of all Funds listed on all Schedule I's, as amended from time
to time, as of the prior review date. The review dates are December 31 and June
30. The Fee Rate is effective from the next business day following the review
date up to and including the next review date. The Fee Rates are as follows:
<TABLE>
<CAPTION>
Aggregate Value of
Qualifying Shares Fee Rate
----------------- --------
<S> <C>
Up to and including $500 million 35 basis points per annum
Over $500 million and up to and 30 basis points per annum
including $1.5 billion
Over $1.5 billion 25 basis points per annum
</TABLE>
The rate scale is not intended to produce a "blended rate". Rather, once a
threshold is reached, the rate applicable to the total amount of assets will be
used for all assets. Thus, if the aggregate value of Qualifying Shares of all
such Funds is $501 million as of a review date, the Fee Rate will be 30 basis
points (to be applied to the Daily Value of Qualifying Shares) until the next
review date.
4. For purposes of this Exhibit, the daily value of the shares of each
Fund will be the net asset value reported by such Fund to the National
Association of Securities Dealers, Inc. Automated Quotation System. No
adjustments will be made to the net asset values to correct errors in the net
asset values so reported for any day unless such error is corrected and the
corrected net asset value per share is reported to Schwab before 5 o'clock,
p.m., San Francisco time, on the first business day after the day to which the
error relates.
5. At the request of Fund Parties, Schwab shall provide, on each
business day, a statement detailing the calculation for each Fund, the aggregate
value of the Qualifying Shares of each Fund and the amount of the Fee for each
Fund. As soon as practicable after the end of the month, Schwab shall also
provide to Fund Parties an invoice for the amount of the Fee due for each Fund.
In the calculation of such Fee, Schwab's records shall govern unless an error
can be shown in the number of shares used in such calculation.
6. Fund Parties shall pay Schwab the Fee within thirty (30) days after
Fund Parties' receipt of such statement. Such payment shall be by wire transfer,
unless the amount thereof is less than $250. Such wire transfers shall be
separate from wire transfers of redemption proceeds or distributions under the
Operating Agreement. Amounts less than $250 may, at Fund Parties' discretion, be
paid by check.
- --------------------------------------------------------------------------------
B
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE I
Fund Effective Date
---- --------------
* Indicates that Fund is a "no load" or "no sales charge" Fund as defined in
Section 26 of the NASD's Rules of Fair Practice.
_____________________________________
Name of Fund Company
By: _________________________________
Name:________________________________
Title: ____________________________
Date: ______________________________
Acknowledged by
_________________________________ Accepted by Charles Schwab & Co. Inc.
Name of Fund Affiliate
By: _____________________________ By: _______________________________
John McGonigle
Name: ___________________________ Senior Vice President/Mutual Funds
Title: __________________________ Date: _____________________________
Date: ___________________________
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE II
Aggregate Value of Qualifying Shares
------------------------------------
<TABLE>
<CAPTION>
Up to and including Over$500M and Above
$500Million up to $1.5Billion $1.5Billion
----------- ----------------- -----------
<S> <C> <C> <C>
Fund Company
__________________ _______% _______% _______%
(name)
Fund Affiliate
__________________ _______% _______% _______%
(name)
Fee Rate 0.35% 0.30% 0.25%
Percentage Per Annum of
Average Daily Value of
Fund Shares
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT(11)(a)
--------------
Consent of Sutherland, Asbill & Brennan
<PAGE>
[LETTERHEAD OF SUTHERLAND, ASBILL & BRENNAN]
September 18, 1995
Transamerica Investors, Inc.
1150 South Olive Street
Los Angeles, CA 90015
Re: Transamerica Investors, Inc.
File No. 33-90888
--------------------------
Ladies and Gentlemen:
We hereby consent to the reference of our name under the caption
"Legal Matters" in the Statement of Additional Information filed as part of Pre-
Effective Amendment No. 2 to the above-captioned registration statement on Form
N-1A for Transamerica Investors, Inc. In giving this consent, we do not admit
that we are in the category of persons whose consent is required under Section 7
of the Securities Act of 1933.
Very truly yours,
SUTHERLAND, ASBILL & BRENNAN
By: /s/Steven B. Boehm
-----------------------
Steven B. Boehm
<PAGE>
EXHIBIT (11)(b)
---------------
Consent of Ernst & Young LLP
<PAGE>
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Independent Auditors"
in the Statement of Additional Information and to the use of our report dated
September 14, 1995 with respect to the statement of assets and liabilities in
Pre-Effective Amendment Number 2 to the Registration Statement (Form N-1A No.
33-90888) of Transamerica Investors, Inc. (comprised of the following
Transamerica Premeir Funds: Equity Fund, Index Fund, Bond Fund, Balanced Fund,
Short-Intermediate Government Fund and Cash Reserve Fund).
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Boston, Massachusetts
September 14, 1995
