.As filed with the Securities and Exchange Commission on April
1, 1996
Securities Act File No. 33-92712
Investment Company Act File No. 811-9050
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
X
Pre-Effective Amendment No.
Post-Effective Amendment No. 4 X
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 8 X
PANORAMA TRUST
(Exact Name of Registrant as Specified in Charter)
One Exchange Place, Boston, MA 02109
Registrant's Telephone Number, including Area Code: (617) 248-3490
Name and Address of Agent for Service: Copies to:
Patricia L. Bickimer, Esq. Joseph P. Barri, Esq.
Panorama Trust Hale and Dorr
One Exchange Place 60 State Street
Boston, MA. 02109 Boston, MA. 02109
It is proposed that the filing will become effective:
X immediately upon filing pursuant to paragraph (b)
on ________ pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)(1)
on pursuant to paragraph (a)(1)
75 days after filing pursuant to paragraph (a)(2)
on __________ pursuant to paragraph (a)(2) of Rule 485.
The Registrant has previously filed a declaration of
indefinite registration of its shares pursuant to Rule 24f-2 under
the Investment Company Act of 1940, as amended. The Registrant's
Rule 24f-2 Notice for the fiscal year ended December 31, 1995 was
filed on February 28, 1996.
Page 1 of Pages
PANORAMA TRUST
PICTET GLOBAL EMERGING MARKETS FUND
FORM N-1A
CROSS REFERENCE SHEET
PURSUANT TO RULE 495 (a)
Part A.
Item No. Prospectus Caption
1. Cover Page Cover Page
2. Synopsis Expenses of the Fund
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Investment Objective and
Policies; Investment Techniques; Risk Factors; General Information
5. Management of the Fund Management of the Fund; Dividends,
Distributions, Taxes and Other Information; General Information
5A. Management's Discussion of Not Applicable
Fund Performance
6. Capital Stock and Other Securities Purchase of Shares;
Redemption of Shares; Exchange of Shares Valuation of Shares;
Dividends, Capital Gains Distribution and Taxes; General
Information
7. Purchase of Securities Being Offered Purchase of Shares
8. Redemption or Repurchase Redemption of Shares; Exchange
of Shares
9. Pending Legal Proceedings Not Applicable
Part B. Statement of Additional
Item No. Information Caption
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Investment Objective and
Policies; General Information
13. Investment Objectives and Policies Investment Objective and
Policies; Investment Limitations
14. Management of the Registrant Management of the Fund;
Investment Advisory and Other Services
15. Control Persons and Principal Holders of Securities
Management of the Fund; Investment Advisory and Other
Services
16. Investment Advisory and Other Services Management of the
Fund; Investment Advisory and Other Services; Distributor
17. Brokerage Allocation Portfolio Transactions
18. Capital Stock and Other Securities Organization of the
Trust
19. Purchase, Redemption and Pricing of Purchase of
Shares; Redemption
Securities Being Offered of Shares; Exchange of Shares;
Net Asset Value Determination
20. Tax Status Additional Information Concerning Taxes
21. Underwriters Distributor
22. Calculation of Performance Data Performance Calculations
23. Financial Statements Financial Statements
EXPLANATORY NOTE
This Post-Effective Amendment relates only to Pictet Global
Emerging Markets Fund, a series of Panorama Trust (the "Trust").
The prospectus and statement of additional information of Pictet
International Small Companies Fund, another series of the Trust,
are not affected by this Post-Effective Amendment.
PICTET GLOBAL EMERGING MARKETS FUND
One Exchange Place Boston, Massachusetts 02109
Prospectus - April 1, 1996
Panorama Trust, a Massachusetts business trust (the
"Trust"), is a no-load, diversified, open-end management
investment company which currently offers shares of two series,
one of which is the Pictet Global Emerging Markets Fund (the
"Fund"). The investment objective of the Fund is to provide long-
term growth of capital. The Fund seeks to achieve this objective
by investing primarily in equity securities of issuers in
countries having emerging markets. The net asset value of the
Fund will fluctuate. Shares of the Fund are subject to investment
risks, including the possible loss of principal.
This Prospectus, which should be retained for future
reference, sets forth certain information that you should know
before you invest. A Statement of Additional Information ("SAI")
containing additional information about the Fund has been filed
with the Securities and Exchange Commission. The SAI, dated April
1, 1996, as amended or supplemented from time to time, is
incorporated by reference into this Prospectus. A copy of the SAI
may be obtained, without charge, by calling the Trust at 514-288-
0253.
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.
EXPENSES OF THE FUND
The following table illustrates the expenses and fees
expected to be incurred by the Fund for the current fiscal year.
Shareholder Transaction Expenses
Sales Load Imposed on Purchases NONE
Sales Load Imposed on Reinvested Dividends NONE
Deferred Sales Load NONE
Redemption Fees NONE
Exchange Fees NONE
Annual Fund Operating Expenses
(as a percentage of average net assets)
Investment Advisory Fees* 1.00%
Other Expenses .70%
Total Operating Expenses 1.70%
* The Investment Adviser has voluntarily agreed to waive its
fees to the extent necessary to assure that the total operating
expenses do not exceed 1.70% of the Fund's average daily net
assets. Without such voluntary waiver, investment advisory fees
and total operating expenses would be 1.25% and 1.95% of the
Fund's average daily net assets, respectively.
The purpose of the above table is to assist an investor in
understanding the various costs and expenses that an investor in
the Fund will bear directly or indirectly. "Other Expenses" is
based on estimated amounts for the current fiscal year. Actual
expenses may be greater or less than such estimates. For further
information concerning the Fund's expenses see "Investment
Adviser" and "Administrative Services."
The following example illustrates the estimated expenses
that an investor in the Fund would pay on a $1,000 investment over
various time periods assuming (i) a 5% annual rate of return and
(ii) redemption at the end of each time period. As noted in the
above table, the Fund charges no redemption fees of any kind.
1 Year 3 Years
$17 $54
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. THE ABOVE FIGURES ARE ESTIMATES
ONLY. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
FINANCIAL HIGHLIGHTS
The following table provides financial highlights of Pictet
Global Emerging Markets Fund for the period presented and should
be read in conjunction with the financial statements and related
notes that also appear in the Trust's Annual Report dated December
31, 1995, which is incorporated by reference into the Statement of
Additional Information. The information contained in the Trust's
Annual Report has been audited by Coopers & Lybrand L.L.P.,
independent accountants, whose report appears in the Annual
Report. Additional information concerning the performance of the
Fund is included in the Annual Report which may be obtained
without charge by writing the Trust at the address on the back
cover of this Prospectus.
Pictet Global Emerging Markets Fund
Period
ended
12/31/95*
Net asset value, beginning of period
$100.00
Income from investment operations:
Net investment income
0.16
Net realized and unrealized loss on investments
(4.88)
Total from investment operations
(4.72)
Distributions to shareholders:
Distributions from net investment income
(0.16)
Distributions in excess of net investment income
(0.05)
Total distributions
(0.21)
Net asset value, end of period
$ 95.07
Total return++
(4.72)%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's)
$9,623
Ratio of net operating expenses to average daily net assets
1.95%+
Ratio of operating expenses to average daily net assets without
waivers
and reimbursements
8.39%+
Ratio of net investment income to average daily net assets
0.68%+
Net investment loss per share without waivers and reimbursements
$ (1.33)
Portfolio turnover rate
5%
Average commission rate (per share of security)
$ .001
* The Fund commenced operations on October 4, 1995.
+ Annualized.
++ Total return represents aggregate total return for the
period.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to provide long-term
growth of capital. The Fund seeks to achieve this objective by
investing primarily in equity securities of issuers in countries
having emerging markets. Many investments in emerging markets can
be considered speculative, and their prices can be much more
volatile than those in the more developed nations of the world.
It is currently expected that under normal conditions at least 85%
of the Fund's total assets will be invested in emerging market
equity securities.
The Fund considers countries having emerging markets to be
all countries that are generally considered to be developing or
emerging countries by the International Bank for Reconstruction
and Development (more commonly referred to as the World Bank) and
the International Finance Corporation, as well as countries that
are classified by the United Nations or otherwise regarded by
their authorities as developing. The countries at present may
include, but are not limited to, the following: Turkey, India,
Indonesia, Brazil, Greece, Malaysia, China, Taiwan, South Korea,
Portugal and Hungary. In addition, as used in this Prospectus,
"emerging market equity securities" means (i) equity securities of
companies in which the principal securities trading market is
considered an emerging market country, as defined above, (ii)
equity securities, traded in any market, of companies that derive
50% or more of their total revenue from either goods or services
produced in such emerging market countries or sales made in such
emerging market countries or (iii) equity securities of companies
organized under the laws of, and with a principal office in, an
emerging market country. "Equity securities," as used in this
Prospectus, refers to common stock, preferred stock, investment
company shares, convertible securities, warrants or rights to
subscribe to or purchase such securities, American Depositary
Receipts ("ADRs"), European Depositary Receipts ("EDRs") and
Global Depositary Receipts ("GDRs") or other similar securities
representing common stock of foreign issuers typically issued by
banks, trust companies or brokers. Determinations as to
eligibility will be made by the Fund's Adviser, Pictet
International Management Limited (the "Adviser"), based on
publicly available information and inquiries made to the
companies. See "Risk Factors" for a discussion of the nature of
information publicly available for non-U.S. companies. The Fund
will normally maintain investments in 15 or more, but in no event
fewer than eight (8), developing market countries, and the Adviser
will limit holdings in any one country to 15% of the Fund's total
assets at the time of investment.
The Fund and its Adviser may, from time to time, use various
methods of selecting securities for the Fund, and may also employ
and rely on independent or affiliated sources of information and
ideas in connection with management of the Fund. The Adviser's
philosophy for investing in emerging markets focuses on stock
selection and significantly diversifying the Fund's investments on
a company and country level. The Adviser uses a proprietary
database which screens for emerging markets that meet the
Adviser's criteria. Generally, in order for a country to be
included by the Adviser as a permissible emerging market
investment it must satisfy certain conditions and criteria. These
criteria include: the country must meet custodial criteria, such
as security of assets and international experience; the country
typically satisfies certain socioeconomic conditions, including
freedom to invest and repatriate capital and deregulation of the
economy; and the country typically satisfies specific cyclical
criteria, including liquidity conditions, industrial production
capacity constraints, direction of real interest rates and the
valuation of the market.
The Fund may invest up to 35% of its total assets in debt
securities (defined as bonds, notes, debentures, commercial paper,
certificates of deposit, time deposits and bankers' acceptances)
which are rated at least Baa by Moody's Investors Services, Inc.'s
("Moody's") or BBB by Standard & Poor's Ratings Service, a
division of McGraw-Hill Companies, Inc. ("S&P") or are unrated
debt securities deemed to be of comparable quality by the Adviser.
Securities with the lowest rating in the investment grade category
(i.e., Baa by Moody's or BBB by S&P) are considered to have some
speculative characteristics and are more sensitive to economic
change than higher rated securities. Certain debt securities can
provide the potential for long-term growth of capital based on
various factors such as changes in interest rates, economic and
market conditions, improvement in an issuer's ability to repay
principal and pay interest, and ratings upgrades. Additionally,
convertible bonds can provide the potential for long-term growth
of capital through the conversion feature, which enables the
holder of the bond to benefit from increases in the market price
of the securities into which they are convertible. However, there
can be no assurances that debt securities or convertible bonds
will provide long-term growth of capital.
When deemed appropriate by the Adviser, the Fund may invest
cash balances in repurchase agreements and other money market
investments to maintain liquidity in an amount to meet expenses or
for day-to-day operating purposes. These investment techniques
are described below and under the heading "Investment Objective
and Policies" in the SAI. When the Adviser believes that market
conditions warrant, the Fund may adopt a temporary defensive
position and may invest without limit in high-quality money market
securities denominated in U.S. dollars or in the currency of any
foreign country. See "Investment Techniques-Temporary
Investments."
In addition, the Fund may enter into forward foreign
currency exchange contracts and reverse repurchase agreements and
may utilize forward foreign currency exchange contracts as a hedge
against changes resulting from market conditions and exchange
rates.
INVESTMENT TECHNIQUES
Temporary Investments. As determined by the Adviser, when
market conditions warrant, the Fund may invest up to 100% of its
total assets in the following high-quality (that is, rated Prime-1
by Moody's or A-1 or better by S&P or, if unrated, of comparable
quality as determined by the Adviser) money market securities,
denominated in U.S. dollars or in the currency of any foreign
country, issued by entities organized in the United States or any
foreign country; short-term (less than twelve months to maturity)
and medium-term (not greater than five years to maturity)
obligations issued or guaranteed by the U.S. Government or the
governments of foreign countries, their agencies or
instrumentalities; finance company and corporate commercial paper,
and other short-term corporate obligations; obligations (including
certificates of deposit, time deposits and bankers' acceptances)
of banks; and repurchase agreements with banks and broker-dealers
with respect to such securities.
Repurchase Agreements. The Fund may enter into repurchase
agreements with qualified brokers, dealers, banks and other
financial institutions deemed creditworthy by its Adviser. In a
repurchase agreement, the Fund purchases a security and
simultaneously commits to resell that security at a future date to
the seller (a qualified bank or securities dealer) at an agreed
upon price plus an agreed upon market rate of interest (itself
unrelated to the coupon rate or date of maturity of the purchased
security). Under normal circumstances, however, the Fund will not
enter into repurchase agreements if entering into such agreements
would cause, at the time of entering into such agreements, more
than 20% of the value of its total assets to be subject to
repurchase agreements. Under the Investment Company Act of 1940,
as amended (the "1940 Act"), repurchase agreements are considered
to be loans collateralized by the underlying securities. The Fund
would generally enter into repurchase transactions to invest cash
reserves and for temporary defensive purposes. Delays or losses
could result if the other party to the agreement defaults or
becomes insolvent.
Reverse Repurchase Agreements. The Fund may enter into
reverse repurchase agreements. In a reverse repurchase agreement
the Fund sells a security and simultaneously commits to repurchase
that security at a future date from the buyer. In effect, the Fund
is temporarily borrowing funds at an agreed upon interest rate
from the purchaser of the security, and the sale of the security
represents collateral for the loan. The use of reverse repurchase
agreements involves certain risks. For example, the other party to
the agreement may default on its obligation or become insolvent
and unable to deliver the securities to the Fund at a time when
the value of the securities has increased. Reverse repurchase
agreements also involve the risk that the Fund may not be able to
establish its right to receive the underlying securities.
"When Issued," "Delayed Settlement," and "Forward Delivery"
Securities. The Fund may purchase and sell securities on a "when
issued," "delayed settlement" or "forward delivery" basis. "When
issued" or "forward delivery" refers to securities whose terms and
indenture are available and for which a market exists, but which
are not available for immediate delivery. When issued or forward
delivery transactions may be expected to occur one month or more
before delivery is due. Delayed settlement is a term used to
describe settlement of a securities transaction in the secondary
market which will occur sometime in the future. No payment or
delivery is made by the Fund in a when issued, delayed settlement
or forward delivery transaction until the Fund receives payment or
delivery from the other party to the transaction. The Fund will
maintain a separate account of cash or liquid high grade debt
obligations at least equal to the value of purchase commitments
until payment is made. Such segregated securities will either
mature or, if necessary, be sold on or before the settlement date.
Although the Fund receives no income from the above described
securities prior to delivery, the market value of such securities
is still subject to change.
The Fund will engage in when issued transactions to obtain
what is considered to be an advantageous price and yield at the
time of the transaction. When the Fund engages in when issued,
delayed settlement or forward delivery transactions, it will do so
for the purpose of acquiring securities consistent with its
investment objective and policies and not for the purpose of
speculation. The Fund's when issued, delayed settlement and
forward delivery commitments are not expected to exceed 25% of its
total assets absent unusual market circumstances, and the Fund
will only sell securities on such a basis to offset securities
purchased on such a basis.
Borrowing. As a temporary measure for extraordinary or
emergency purposes, the Fund may borrow money from banks.
However, the Fund will not borrow money for speculative purposes.
Depositary Receipts. The Fund may purchase sponsored or
unsponsored ADRs, EDRs and GDRs (collectively, "Depositary
Receipts"). ADRs are typically issued by a U.S. bank or trust
company and evidence ownership of underlying securities issued by
a foreign corporation. EDRs and GDRs are typically issued by
foreign banks or trust companies, although they also may be issued
by U.S. banks or trust companies, and evidence ownership of
underlying securities issued by either a foreign or a United
States corporation. For purposes of the Fund's investment
policies, the Fund's investments in Depositary Receipts will be
deemed to be investments in the underlying securities.
Privatizations. The Fund may invest in privatizations. The
Fund believes that foreign government programs of selling
interests in government-owned or controlled enterprises
("privatizations") may represent opportunities for significant
capital appreciation. The ability of U.S. entities, such as the
Fund, to participate in privatizations may be limited by local
law, or the terms for participation may be less advantageous than
for local investors. There can be no assurance that privatization
programs will be available or successful.
Illiquid Securities. The Fund will not invest more than 15%
of its net assets in securities that are illiquid as determined by
the Adviser under the supervision of the Board of Trustees. An
illiquid security is one which may not be sold or disposed of in
the ordinary course of business within seven days at approximately
the value at which the Fund has valued the security.
Investment Companies. The Fund may invest up to 10% of its
total assets in shares of other investment companies investing in
securities in which it may otherwise invest. Because of
restrictions on direct investment by U.S. entities in certain
countries, other investment companies may provide the most
practical or only way for the Fund to invest in certain markets.
Such investments may involve the payment of substantial premiums
above the net asset value of those investment companies' portfolio
securities and are subject to limitations under the 1940 Act. In
addition to the advisory fees and other expenses that the Fund
bears directly in connection with its own operations, as a
shareholder of another investment company, the Fund would bear its
"pro rata" portion of the other investment company's advisory fees
and other expenses. Therefore, to the extent that the Fund
invests in shares of other investment companies, the Fund's
shareholders will be subject to expenses of such other investment
companies, in addition to expenses of the Fund. The Fund also may
incur a tax liability to the extent it invests in the stock of a
foreign issuer that is a "passive foreign investment company"
regardless of whether such "passive foreign investment company"
makes distributions to the Fund. See the SAI for further
information.
Forward Foreign Currency Exchange Contracts. A forward
foreign currency exchange contract (a "forward contract") is
individually negotiated and privately traded by currency traders
and their customers and creates an obligation to purchase or sell
a specific currency for an agreed-upon price at a future date.
The Fund normally conducts its foreign currency exchange
transaction either on a spot (i.e., cash) basis at the spot rate
in the foreign currency exchange market at the time of the
transaction, or through entering into forward contracts to
purchase or sell foreign currencies at a future date. The Fund
generally does not enter into forward contracts with terms greater
than one year. The Fund will maintain a segregated account
consisting of cash or liquid high grade debt securities in an
amount equal to the value of currency that the Fund is required to
purchase under a forward contract.
The Fund generally enters into forward contracts only under
two circumstances. First, if the Fund enters into a contract for
the purchase or sale of a security denominated in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the
security by entering into a forward contract to buy the amount of
a foreign currency needed to settle the transaction. Second, if
the Adviser believes that the currency of a particular foreign
country will substantially rise or fall against the U.S. dollar,
it may enter into a forward contract to buy or sell the currency
approximating the value of some or all of the Fund's portfolio
securities denominated in such currency. The Fund may engage in
cross-hedging by using forward contracts in one currency to hedge
against fluctuations in the value of securities denominated in a
different currency if the Adviser determines that there is a
pattern of correlation between the two currencies. Although
forward contracts are used primarily to protect the Fund from
adverse currency movements, they involve the risk that currency
movements will not be accurately predicted which could cause a
loss to the Fund.
Except as specified on the preceding pages and as described
under "Investment Limitations" in the SAI, the Fund's investment
objective and policies are not fundamental, and the Board may
change such objective and policies without shareholder approval.
RISK FACTORS
All investments involve risk and there can be no guarantee
against loss resulting from an investment in the Fund, nor can
there be any assurance that the Fund's investment objective will
be attained. As with any investment in securities, the value of,
and income from, an investment in the Fund can decrease as well as
increase, depending on a variety of factors which may affect the
values and income generated by the Fund's securities, including
general economic conditions, market factors and currency exchange
rates. An investment in the Fund is not intended as a complete
investment program.
Foreign Securities. The Fund may purchase securities of
issuers located in any foreign country, consistent with its
investment objective. Investors should consider carefully the
substantial risks involved in investing in securities issued by
companies and governments of foreign nations, which are in
addition to the usual risks inherent in domestic investments.
Investing in the securities of foreign companies involves special
risks and considerations not typically associated with investing
in U.S. companies. These risks and considerations include
differences in accounting, auditing and financial reporting
standards, generally higher commission rates on foreign portfolio
transactions, the possibility of expropriation or confiscatory
taxation, adverse changes in investment or exchange control
regulations, political instability which could affect U.S.
investment in foreign countries and potential restrictions on the
flow of international capital. Also, changes in foreign exchange
rates will affect, favorably or unfavorably, the value of those
securities in the Fund's portfolio which are denominated or quoted
in currencies other than the U.S. dollar. In addition, in many
countries there is less publicly available information about
issuers than is available in reports about companies in the United
States. Moreover, the dividend or interest income or gain from
the Fund's foreign portfolio securities may be subject to foreign
withholding or other foreign taxes, thus reducing the net amount
of income available for distribution to the Fund's shareholders.
Further, foreign securities often trade with less frequency and
volume than domestic securities and, therefore, may exhibit
greater price volatility. Foreign companies are not generally
subject to uniform accounting, auditing and financial reporting
standards, and auditing practices and requirements may not be
comparable to those applicable to U.S. companies. Further, the
Fund may encounter difficulties or be unable to pursue legal
remedies and obtain judgments in foreign courts.
These risks are often heightened for investments in
developing or emerging markets, including certain Eastern European
countries where the risks include the possibility that such
countries may revert to a centrally planned economy. Developing
countries may also impose restrictions on the Fund's ability to
repatriate investment income or capital. Even where there is no
outright restriction on repatriation of investment income or
capital, the mechanics of repatriation may affect certain aspects
of the operations of the Fund. For example, funds may be
withdrawn from the People's Republic of China only in U.S. dollars
or local currency and only at an exchange rate established by the
government once each week.
Some of the currencies in emerging markets have experienced
devaluations relative to the U.S. dollar, and major adjustments
have been made periodically in certain of such currencies.
Certain developing countries face serious exchange constraints.
Governments of some developing countries exercise
substantial influence over many aspects of the private sector. In
some countries, the government owns or controls many companies,
including the largest in the country. As such, government actions
in the future could have a significant effect on economic
conditions in developing countries in these regions, which could
affect private sector companies, the Fund and the value of its
securities. Furthermore, certain developing countries are among
the largest debtors to commercial banks and foreign governments.
Trading in debt obligations issued or guaranteed by such
governments or their agencies and instrumentalities involves a
high degree of risk.
In many emerging markets, there is less government
supervision and regulation of business and industry practices,
stock exchanges, brokers and listed companies than in the United
States. The foreign securities markets of many of the countries
in which the Fund may invest may also be smaller, less liquid, and
subject to greater price volatility than those in the United
States.
Many of the currencies of Latin American countries
(including Mexico) have experienced steady devaluations relative
to the U.S. dollar, and major devaluations have historically
occurred in certain countries. Devaluations in the currencies in
which the Fund's portfolio securities are denominated may have a
detrimental impact on the Fund. Some Latin American countries
also may have managed currencies which are not free floating
against the U.S. dollar. In addition, there is a risk that
certain Latin American countries may restrict the free conversion
of their currencies into other currencies. Further, certain Latin
American currencies may not be internationally traded. Most Latin
American countries have experienced substantial, and in some
periods extremely high, rates of inflation for many years.
Inflation and rapid fluctuations in inflation rates have had and
may continue to have very negative effects on the economies and
securities markets of certain Latin American countries.
Government actions concerning the economy could have a significant
effect on market conditions and prices and/or yields of securities
in which the Fund invests.
There are further risk factors, including possible losses
through the holding of securities in domestic and foreign
custodian banks and depositories, described elsewhere in the
Prospectus under Investment Techniques - Repurchase Agreements,
Reverse Repurchase Agreements, "When Issued", "Delayed Settlement"
and "Forward Delivery" Securities, and Forward Foreign Currency
Exchange Contracts and in the SAI.
PURCHASE OF SHARES
Shares of the Fund are sold without a sales commission on a
continuous basis to the Adviser (or its affiliates) or to other
institutions (the "Institutions") acting on behalf of the
Institution's or an affiliate's clients, at the net asset value
per share next determined after receipt of the purchase order by
the transfer agent. See "Valuation of Shares." The minimum initial
investment for the Fund is $100,000; the minimum for subsequent
investments for the Fund is $10,000. The Fund reserves the right
to reduce or waive the minimum initial and subsequent investment
requirements from time to time. Beneficial ownership of shares
will be reflected on books maintained by the Adviser or the
Institutions. A prospective investor wishing to purchase shares in
the Fund should contact the Adviser or his or her Institution.
Purchase orders for shares are accepted only on days on
which both the Adviser and the Federal Reserve Bank of New York
are open for business. It is the responsibility of the Adviser or
Institution to transmit orders for shares purchased to First Data
Investor Services Group, Inc. ("FDISG"), the Fund's transfer
agent, and deliver required funds to Brown Brothers Harriman &
Co., the Fund's custodian, on a timely basis. Payment in cash for
Fund shares must be made in federal funds immediately available to
Brown Brothers Harriman & Co. by 12:00 noon Eastern time on the
day after the purchase order is received by the transfer agent.
Shareholders should contact the Adviser for appropriate
purchase/wire procedures. Shareholders should also contact the
Adviser for information on an in-kind purchase of Fund shares.
See Purchase of Shares in the SAI.
The Trust and its distributor reserve the right, in their
discretion, to suspend the offering of shares of the Fund or
reject purchase orders when, in the judgment of management, such
suspension or rejection is in the best interests of the Fund.
Purchases of the Fund's shares will be made in full and fractional
shares of the Fund calculated to three decimal places. In the
interest of economy and convenience, certificates for shares will
not be issued.
General. The issuance of shares is recorded on the books of
the Trust. The transfer agent will send to each shareholder of
record a statement of shares of the Fund owned after each purchase
or redemption transaction relating to such shareholder. Neither
the distributor, Adviser nor the Institutions are permitted to
withhold placing orders to benefit themselves by a price change.
Distribution Agreement. The distributor, 440 Financial
Distributors, Inc. (the "Distributor") is the principal
underwriter and distributor of shares of the Fund pursuant to a
distribution agreement with the Trust. The Distributor is located
at 290 Donald Lynch Boulevard, Marlboro, Massachusetts 01752.
REDEMPTION OF SHARES
Shares of the Fund may be redeemed at any time, without
cost, at the net asset value of the Fund next determined after
receipt of the redemption request by the transfer agent. The net
asset value of redeemed shares may be more or less than the
purchase price of the shares depending on the market value of the
investment securities held by the Fund. An investor wishing to
redeem shares should contact the Adviser or his or her
Institution. No charge is made by the Fund for redemptions. It
is the responsibility of the Adviser or Institution to transmit
promptly redemption orders to the transfer agent.
Payment of the redemption proceeds will ordinarily be made
by wire within one business day, but in no event more than three
business days, after receipt of the order in proper form by the
transfer agent. The Fund may suspend the right of redemption or
postpone the date of payment at times when the New York Stock
Exchange (the "Exchange") is closed, or under any emergency
circumstances as determined by the Securities and Exchange
Commission (the "Commission"). See "Valuation of Shares" for the
days on which the Exchange is closed.
If the Board determines that it would be detrimental to the
best interests of the remaining shareholders of the Fund to make
payment wholly or partly in cash, the Fund may pay the redemption
proceeds in whole or in part by a distribution in kind of
securities held by the Fund in lieu of cash in conformity with
applicable rules of the Commission. Investors may incur brokerage
charges on the sale of portfolio securities received as a
redemption in kind.
The Fund reserves the right, upon 30 days' written notice,
to redeem an account in the Fund if the net asset value of the
account's shares falls below $100,000 because of redemptions and
is not increased to at least such amount within such 30-day
period.
EXCHANGE OF SHARES
Shareholders may exchange shares of the Fund for shares of
other series of the Trust based on the relative net asset values
per share of the series at the time the exchange is effected.
Currently, shares of the Fund may be exchanged for shares of
Pictet Global Emerging Markets Fund. No sales charge or other fee
is imposed in connection with exchanges. Before requesting an
exchange, shareholders should obtain and read the prospectus of
the series whose shares will be acquired in the exchange.
Prospectuses can be obtained by calling the Trust at (514) 288-
0253.
All exchanges are subject to applicable minimum initial and
subsequent investment requirements of the series whose shares will
be acquired. In addition, an exchange is permitted only between
accounts that have identical registrations. Shares of a series
may be acquired in an exchange only if the shares are currently
being offered and are legally available for sale in the state of
the shareholder's residence.
An exchange involves the redemption of shares of the Fund
and the purchase of shares of another series. Shares of the Fund
will be redeemed at the net asset value per share of the Fund next
determined after receipt of an exchange request in proper form.
Shareholders that are not exempt from taxation may realize a
taxable gain or loss in an exchange transaction. See "Dividends,
Capital Gains Distributions and Taxes."
A shareholder wishing to exchange shares of the Fund should
contact the Adviser or his or her Institution. The exchange
privilege may be modified or terminated at any time subject to
shareholder notification. The Trust reserves the right to limit
the number of times an investor may exercise the exchange
privilege.
VALUATION OF SHARES
The net asset value of the Fund is determined by dividing
the total market value of its investments and other assets, less
any of its liabilities, by the total outstanding shares of the
Fund. The Fund's net asset value per share is determined as of
the close of regular trading on the Exchange on each day that the
Adviser and Exchange is open for business and the Fund receives an
order to purchase or redeem its shares. Currently the Exchange is
closed on weekends and the customary national business holidays of
New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day
(or the days on which they are observed).
Equity securities listed on a U.S. securities exchange for
which market quotations are available are valued at the last
quoted sale price as of the close of the Exchange's regular
trading hours on the day the valuation is made. Generally,
securities listed on a foreign exchange and unlisted foreign
securities are valued at the latest quoted sales price available
before the time when assets are valued. Price information on
listed securities is taken from the exchange where the security is
primarily traded. Unlisted U.S. equity securities and listed
securities not traded on the valuation date for which market
quotations are readily available are valued at the mean between
the asked and bid prices. The value of securities for which no
quotations are readily available (including restricted securities)
is determined in good faith at fair value using methods determined
by the Board. Foreign currency amounts are translated into U.S.
dollars at the bid prices of such currencies against U.S. dollars
last quoted by a major bank. One or more pricing services may be
used to provide securities valuations in connection with the
determination of the net asset value of the Fund.
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
The Fund normally will distribute at least annually to
shareholders substantially all of its net investment income and
any net realized capital gain. Undistributed net investment
income is included in the Fund's net assets for the purpose of
calculating net asset value per share. Therefore, on the Fund's
"ex-dividend" date, the net asset value per share excludes the
dividend (i.e., is reduced by the per share amount of the
dividend). Dividends paid shortly after the purchase of shares of
the Fund by an investor, although in effect a return of a portion
of the purchase price, are taxable to the investor. Dividends or
distributions will automatically be reinvested in additional
shares of the Fund at the net asset value next determined after
the dividend is declared.
FEDERAL TAXES
The Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as
amended (the "Code"). Such qualification generally relieves the
Fund of liability for Federal income taxes to the extent its
earnings are distributed in accordance with the Code.
Qualification as a regulated investment company under the
Code for a taxable year requires, among other things, that the
Fund distribute to its shareholders an amount at least equal to
90% of its investment company taxable income and 90% of its net
tax-exempt interest income (if any) for such taxable year. In
general, the Fund's investment company taxable income will be its
net investment income, including interest and dividends, subject
to certain adjustments, certain net foreign currency gains, and
any excess of its net short-term capital gain over its net long-
term capital loss, if any, for such year. The Fund intends to
distribute as dividends substantially all of its investment
company taxable income each year. Such dividends will be taxable
as ordinary income to the Fund's shareholders who are not exempt
from Federal income taxes, whether such income or gain is received
in cash or reinvested in additional shares. Subject to the
limitations prescribed in the Code, the dividends received
deduction for corporations will apply to such ordinary income
distributions only to the extent they are attributable to
qualifying dividends received by the Fund from domestic
corporations for the taxable year. It is anticipated that only a
small part (if any) of the dividends paid by the Fund will be
eligible for the dividends received deduction.
Substantially all of the Fund's net long-term capital gain,
if any, in excess of its net short-term capital loss will be
distributed at least annually to its shareholders. The Fund
generally will have no tax liability with respect to such gains
and the distributions will be taxable to the shareholders who are
not exempt from Federal income taxes as long-term capital gains,
regardless of how long the shareholders have held the shares and
whether such gains are received in cash or reinvested in
additional shares.
The impact of dividends or distributions which are expected
to be declared or have been declared, but not paid, should be
carefully considered prior to purchasing such shares. Any
dividend or distribution paid shortly after a purchase of shares
prior to the record date will have the effect of reducing the per
share net asset value by the per share amount of the dividend or
distribution. All or a portion of such dividend or distribution,
although in effect a return of a portion of the purchase price, is
subject to tax. A taxable gain or loss may be realized by a
shareholder upon redemption or transfer of shares of the Fund,
depending upon the tax basis of such shares and their value at the
time of redemption or transfer.
It is expected that dividends, certain interest income and
possibly certain capital gains earned by the Fund from foreign
securities will be subject to foreign withholding taxes or other
foreign taxes. If more than 50% of the value of the Fund's total
assets at the close of any taxable year consists of equity or debt
securities of foreign corporations, the Fund may elect, for U.S.
Federal income tax purposes, to treat certain foreign taxes paid
by it, including generally any withholding taxes and other foreign
income taxes, as paid by its shareholders. If the Fund makes this
election, the amount of such foreign taxes paid by the Fund will
be included in its shareholders' income pro rata (in addition to
taxable distributions actually received by them), and each
shareholder who is subject to tax will generally, subject to
certain limitations under the Code, be entitled (a) to credit a
proportionate amount of such taxes against U.S. Federal income tax
liabilities, or (b) if deductions are itemized, to deduct such
proportionate amount from U.S. income.
Miscellaneous. Dividends declared in October, November or
December of any year payable to shareholders of record on a
specified date in such a month will be deemed to have been
received by the shareholders and paid by the Fund on December 31,
in the event such dividends are paid during January of the
following year.
A 4% nondeductible excise tax is imposed under the Code on
regulated investment companies that fail to currently distribute
for each calendar year specified percentages of their ordinary
taxable income and capital gain net income (excess of capital
gains over capital losses) earned in specified periods. The Fund
expects that it will generally make sufficient distributions or
deemed distributions of its ordinary taxable income and any
capital gain net income for each calendar year to avoid liability
for this excise tax.
The foregoing summarizes some of the important tax
considerations generally affecting the Fund and its shareholders
and is not intended as a substitute for careful tax planning.
Accordingly, potential investors in the Fund should consult their
tax advisers with specific reference to their own tax situations.
The foregoing discussion of tax consequences is based on tax
laws and regulations in effect on the date of this Prospectus,
which are subject to change.
Shareholders will be advised at least annually as to the
federal income tax consequences of distributions made each year.
The Fund will be required in certain cases to withhold and
remit to the United States Treasury 31% of taxable dividends
(including capital gain distributions) or gross proceeds realized
upon a redemption or other sale of shares paid to shareholders who
are subject to this "backup withholding" because they have failed
to provide a correct, certified tax payer identification number in
the manner required, have received IRS Notice of their failure
properly to include on their return payments of taxable interest
or dividends, or have failed to certify to the Fund that they are
not subject to backup withholding when required to do so or that
they are "exempt recipients."
STATE AND LOCAL TAXES
Shareholders may also be subject to state and local or
foreign taxes on distributions from, or the value of an investment
in, the Fund. A shareholder should consult with a tax adviser
with respect to the tax status of an investment in or
distributions from the Fund in a particular state, locality or
other jurisdiction that may impose tax on the shareholder.
MANAGEMENT OF THE FUND
The Board of Trustees has overall responsibility for the
management of the Fund under the laws of the Commonwealth of
Massachusetts governing the responsibilities of trustees of
business trusts. The SAI identifies and provides information
about the Trustees and officers of the Trust.
INVESTMENT ADVISER
The Trust, on behalf of the Fund, has entered into an
investment advisory agreement with Pictet International Management
Limited. Subject to the control and supervision of the Trust's
Board and in conformance with the stated investment objective and
policies of the Fund, the Adviser manages the investment and
reinvestment of the assets of the Fund. The Adviser's advisory and
portfolio transaction services also include making investment
decisions for the Fund, placing purchase and sale orders for
portfolio transactions and employing professional portfolio
managers and security analysts who provide research services to
the Fund. The Adviser is entitled to receive from the Fund for
its investment services a fee, computed daily and payable monthly,
at the annual rate of 1.25% of the average daily net assets of the
Fund. The aggregate fees paid to the Fund's Adviser are higher
than advisory fees paid by most other U.S. investment companies.
The Fund's Board believes such fees are comparable to those paid
by other similar funds.
The Adviser is an affiliate of Pictet & Cie (the "Bank"), a
Swiss private bank, which was founded in 1805. As of March 31,
1996, the Bank managed in excess of $45 billion for institutional
and private clients. The Bank is owned by seven partners. The
Adviser was established in 1980 and manages institutional
investment funds with a particular emphasis on the investment
needs of U.S. and international institutional clients seeking to
invest in the international fixed income and equity markets.
Registered with the Commission in 1981 and regulated by the
Investment Management Regulatory Organisation, Pictet's London
office has managed international portfolios for U.S. tax-exempt
clients since 1981 and U.K. pension funds since 1984. Pictet
currently manages approximately $4 billion for more than 50
accounts.
The Fund is managed by the following individuals:
Douglas Polunin is a Senior Investment Manager with joint
responsibility for worldwide smaller companies and emerging
markets investment, working with Jonathan Neill. Prior to joining
Pictet in 1989, Mr. Polunin spent two and a half years with the
Union Bank of Switzerland in London, where he was in charge of the
Discretionary Portfolio Management section. Before this, he spent
four years as an Equity Analyst with UBS in Switzerland.
Jonathan Neill is a Senior Investment Manager having joint
responsibility for worldwide smaller companies and emerging
markets investment, with Mr. Polunin. Prior to joining Pictet in
1990, Mr. Neill worked for two years with Mercury Asset Management
as an investment manager with specific responsibility for
specialist international funds. He also spent three years
managing U.K. and International Growth Funds with Oppenheimer Fund
Management.
Richard Yarlott is a Senior Investment Manager within the
small companies and emerging markets team. His main
responsibilities currently include asset allocation in emerging
markets and securities analysis on an international basis. Prior
to joining Pictet in 1994, Mr. Yarlott worked for over ten years
in banking, strategic consulting and private investment. In 1985
he joined JP Morgan where he worked in Structured Finance and M &
A roles until 1990. He spent two years as a principal in a
private investment company, and subsequently worked for Marakon
Associates, a value-based consulting firm.
Yves Kuhn is an Investment Manager within the smaller
companies and emerging markets team. His main focus is on smaller
companies and emerging markets within Eastern Europe. Prior to
joining Pictet in 1994, Mr. Kuhn spent three years in consultancy,
essentially concerned with the restructuring and cost saving
programs of major utility and consumer goods companies.
Richard Ormond is an Investment Manager in the smaller
companies and emerging markets team. After joining Pictet in 1990
he spent two years in Geneva with responsibility for European
Indexed Funds and performance analysis for the Strategic
Investment Committee. He joined the London office in 1992 and is
currently responsible for Pictet's proprietary database, analyzing
smaller companies and emerging markets.
Morid Kamshad is an Investment Manager in the emerging
markets team with responsibility for the Far East as well as the
risk control process. Prior to joining Pictet in 1995 he worked
at HSBC Asset Management as an analyst specializing in the
emerging markets of Europe and the Middle East. He also worked at
Air Products and Chemicals as a business development manager and
for NASA's LASP laboratories as a satellite controller.
ADMINISTRATIVE SERVICES
FDISG serves as the Trust's administrator, accounting agent
and transfer agent and in that capacity supervises the Trust's
day-to-day operations, other than management of the Fund's
investments. FDISG is a wholly owned subsidiary of First Data
Corporation. For its services as accounting agent, FDISG is
entitled to receive a fee from the Trust computed daily and
payable monthly at the annual rate of .04% of the aggregate
average daily net assets of the Trust, subject to a $50,000 annual
minimum from the Fund. For administrative services, the FDISG is
entitled to receive $220,000 per annum from the Trust. In
addition, for its services as transfer agent, FDISG is to be paid
separate compensation.
FDISG is located at One Exchange Place, Boston,
Massachusetts 02109.
EXPENSES
The Fund bears its own operating expenses including: taxes;
interest; miscellaneous fees (including fees paid to Board
members); Commission fees; state Blue Sky qualification fees;
costs of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for
distribution to existing shareholders; amortization of
organizational costs; investment advisory fees; administration
fees; charges of the custodian, any subcustodians and the transfer
and dividend agent; certain insurance premiums; outside auditing,
pricing and legal expenses; costs of shareholders' reports and
meetings; and any extraordinary expenses. The Fund also pays for
brokerage fees and commissions, if any, in connection with the
purchase and sale of its portfolio securities.
As discussed under "Expenses of the Fund," the Adviser has
voluntarily undertaken to waive its fees as may be necessary to
limit total ordinary operating expenses of the Fund to a specified
percentage of the Fund's average daily net assets. The Adviser
may modify or terminate this undertaking at any time.
PERFORMANCE CALCULATIONS
The Fund may advertise or quote total return data from time
to time. Total return will be calculated on an average annual
total return basis, and may also be calculated on an aggregate
total return basis, for various periods. Average annual total
return reflects the average annual percentage change in value of
an investment in the Fund over the measuring period. Aggregate
total return reflects the total percentage change in value over
the measuring period. Both methods of calculating total return
assume that dividends and capital gain distributions made by the
Fund during the period are reinvested in Fund shares.
The Fund may compare its total return to that of other
investment companies with similar investment objectives and to
stock and other relevant indices or to rankings prepared by
independent services or other financial or industry publications
that monitor the performance of mutual funds or investments
similar to the Fund. For example, the total return of the Fund may
be compared to data prepared by Lipper Analytical Services, Inc.,
Micropal, the Morgan Stanley Capital International Emerging
Markets Free Index (also known as the Emerging Markets Index) and
the International Financial Corporation Composite Index. Total
return and other performance data as reported in national
financial publications such as Money Magazine, Forbes, Barron's,
The Wall Street Journal and The New York Times, or in local or
regional publications, may also be used in comparing the
performance of the Fund.
Performance quotations will represent the Fund's past
performance, and should not be considered as representative of
future results. Since performance will fluctuate, performance
data for the Fund should not be used to compare an investment in
the Fund's shares with bank deposits, savings accounts and similar
investment alternatives which often provide an agreed or
guaranteed fixed yield/return for a stated period of time.
Shareholders should remember that performance is generally a
function of the kind and quality of the instruments held in the
Fund, portfolio maturity, operating expenses and market
conditions. Any fees charged by the Adviser or institutions to
their clients will not be included in the Fund's calculations of
total return.
The aggregate total return for the Fund from inception
(October 4, 1995) to December 31, 1995 was (4.72)% and (6.18)%
(without fee waivers).
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Trust was organized as a Massachusetts business trust on
May 23, 1995. The Declaration of Trust authorizes the Trustees to
classify and reclassify any unissued shares into one or more
series and classes of shares. Currently, the Trust has two
series, one of which is the Fund. Each series currently has only
one class of shares. The Trust offers shares of beneficial
interest, $.001 par value, for sale to the public. When matters
are submitted for shareholder vote, shareholders of the Fund will
have one vote for each full share owned and proportionate,
fractional votes for fractional shares held. As of March 22,
1996, State Board of Administration of Florida, 1801 Hermitage
Boulevard, Tallahassee, Florida controlled the Fund by virtue of
owning more than 25% of the outstanding shares of the Fund. Under
Massachusetts law and the Declaration of Trust, the Trust is not
required and does not currently intend to hold annual meetings of
shareholders for the election of Trustees except as required under
the 1940 Act. There will normally be no meetings of shareholders
for the purpose of electing Trustees unless less than a majority
of the Trustees holding office have been elected by shareholders,
at which time the Trustees then in office will call a
shareholders' meeting for the election of Trustees. Any Trustee
may be removed from office upon the vote of shareholders holding
at least two-thirds of the Trust's outstanding shares at a meeting
called for that purpose. The Trustees are required to call a
meeting of shareholders upon the written request of shareholders
holding at least 10% of the Trust's outstanding shares. In
addition, shareholders who meet certain criteria will be assisted
by the Trust in communicating with other shareholders in seeking
the holding of such meeting.
Shareholder inquiries should be addressed to the Trust at
the address or telephone number stated on the cover page.
CUSTODIAN
Brown Brothers Harriman & Co., located at 40 Water Street,
Boston, Massachusetts 02109, serves as the custodian of the
Trust's assets.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., located at One Post Office Square,
Boston, Massachusetts 02109, serves as independent accountants for
the Trust and will audit its financial statements annually.
COUNSEL
Hale and Dorr serves as counsel to the Trust.
REPORTS
Shareholders receive unaudited semi-annual financial
statements and audited annual financial statements.
PICTET GLOBAL EMERGING MARKETS FUND
One Exchange Place
Boston, Massachusetts 02109
Prospectus
Dated April 1, 1996
Investment Adviser Administrator and Transfer Agent
Pictet International Management Limited First Data Investor
Services Group, Inc.
Cutlers Garden One Exchange Place
5 Devonshire Square Boston, MA 02109
London, United Kingdom
EC2M 4LD
Distributor
440 Financial Distributors, Inc.
290 Donald Lynch Boulevard
Marlboro, MA 01752
Table of Contents
Page Page
Expenses of the Fund .. 2 Exchange of Shares ..
10
Financial Highlights 3 Valuation of Shares 11
Investment Objective and Policies 4 Dividends, Capital
Gain Distributions and Taxes 11
Investment Techniques 5 Management of the Fund
13
Risk Factors 7 Performance Calculations
15
Purchase of Shares 9 General Information
16
Redemption of Shares .. 10
No person has been authorized to give any information or to make
any representations not contained in this Prospectus, or in the
Trust's Statement of Additional Information, in connection with
the offering made by this Prospectus and, if given or made, such
information or representations must not be relied upon as having
been authorized by the Trust or its Distributor. This Prospectus
does not constitute an offering by the Trust or the Distributor in
any jurisdiction in which such offering may not lawfully be made.
PICTET GLOBAL EMERGING MARKETS FUND
STATEMENT OF ADDITIONAL INFORMATION
April 1, 1996
This Statement of Additional Information is not a prospectus
but should be read in conjunction with Panorama Trust's (the
"Trust") Prospectus for the Pictet Global Emerging Markets Fund
(the "Fund") dated April 1, 1996 (the "Prospectus"). To obtain
the Prospectus, please call the Trust at 514-288-0253.
Capitalized terms used in this Statement of Additional
Information and not otherwise defined have the same meanings given
to them in the Prospectus.
Table of Contents Page
Investment Objective and Policies 2
Purchase of Shares 6
Redemption of Shares 6
Investment Limitations 7
Management of the Fund 8
Investment Advisory and Other Services 11
Distributor 11
Portfolio Transactions 11
Additional Information Concerning Taxes 12
Performance Calculations 15
General Information 15
Financial Statements 17
Appendix - Description of Ratings and U.S. Government
Securities
INVESTMENT OBJECTIVE AND POLICIES
The following policies supplement the investment objective
and policies set forth in the Prospectus:
Repurchase Agreements. The Fund may enter into repurchase
agreements with qualified brokers, dealers, banks and other
financial institutions deemed creditworthy by its Adviser. In a
repurchase agreement, the Fund purchases a security and
simultaneously commits to resell that security at a future date to
the seller (a qualified bank or securities dealer) at an agreed
upon price plus an agreed upon market rate of interest (itself
unrelated to the coupon rate or date of maturity of the purchased
security). Under normal circumstances, however, the Fund will not
enter into repurchase agreements if entering into such agreements
would cause, at the time of entering into such agreements, more
than 20% of the value of its total assets to be subject to
repurchase agreements. The Fund would generally enter into
repurchase transactions to invest cash reserves and for temporary
defensive purposes. Delays or losses could result if the other
party to the agreement defaults or becomes insolvent.
The securities held subject to a repurchase agreement may
have stated maturities exceeding 13 months, but the Adviser
currently expects that repurchase agreements will mature in less
than 13 months. The seller under a repurchase agreement will be
required to maintain the value of the securities subject to the
agreement at not less than 101% of the repurchase price including
accrued interest. The Fund's administrator and the Adviser will
mark to market daily the value of the securities purchased, and
the Adviser will, if necessary, require the seller to deposit
additional securities to ensure that the value is in compliance
with the 101% requirement stated above. The Adviser will consider
the creditworthiness of a seller in determining whether the Fund
should enter into a repurchase agreement, and the Fund will only
enter into repurchase agreements with banks and dealers which are
determined to present minimal credit risk by the Adviser under
procedures adopted by the Board of Trustees.
In effect, by entering into a repurchase agreement, the Fund
is lending its funds to the seller at the agreed upon interest
rate, and receiving securities as collateral for the loan. Such
agreements can be entered into for periods of one day (overnight
repo) or for a fixed term (term repo). Repurchase agreements are a
common way to earn interest income on short-term funds.
The use of repurchase agreements involves certain risks. For
example, if the seller of a repurchase agreement defaults on its
obligation to repurchase the underlying securities at a time when
the value of these securities has declined, the Fund may incur a
loss upon disposition of them. Default by the seller would also
expose the Fund to possible loss because of delays in connection
with the disposition of the underlying obligations. If the seller
of an agreement becomes insolvent and subject to liquidation or
reorganization under the Bankruptcy Code or other laws, a
bankruptcy court may determine that the underlying securities are
collateral not within the control of the Fund and therefore
subject to sale by the trustee in bankruptcy. Further, it is
possible that the Fund may not be able to substantiate its
interest in the underlying securities.
Repurchase agreements that do not provide for payment to the
Fund within seven days after notice without taking a reduced price
are considered illiquid securities.
Reverse Repurchase Agreements. The Fund may enter into
reverse repurchase agreements. In a reverse repurchase agreement
the Fund sells a security and simultaneously commits to repurchase
that security at a future date from the buyer. In effect, the Fund
is temporarily borrowing funds at an agreed upon interest rate
from the purchaser of the security, and the sale of the security
represents collateral for the loan. The Fund retains record
ownership of the security and the right to receive interest and
principal payments on the security. At an agreed upon future date,
the Fund repurchases the security by remitting the proceeds
previously received, plus interest. In certain types of
agreements, there is no agreed upon repurchase date and interest
payments are calculated daily, often based on the prevailing
overnight repurchase rate. These agreements, which are treated as
if reestablished each day, are expected to provide the Fund with a
flexible borrowing tool. Reverse repurchase agreements are
considered to be borrowings by a fund under the Investment Company
Act of 1940, as amended (the "1940 Act").
The Adviser will consider the creditworthiness of the other
party in determining whether the Fund will enter into a reverse
repurchase agreement. Under normal circumstances the Fund will
not enter into reverse repurchase agreements if entering into such
agreements would cause, at the time of entering into such
agreements, more than 33 1/3% of the value of its total assets to
be subject to such agreements.
The use of reverse repurchase agreements involves certain
risks. For example, the other party to the agreement may default
on its obligation or become insolvent and unable to deliver the
securities to the Fund at a time when the value of the securities
has increased. Reverse repurchase agreements also involve the risk
that the Fund may not be able to establish its right to receive
the underlying securities.
Depositary Receipts. The Fund may purchase American
Depositary Receipts ("ADRs"), European Depositary Receipts
("EDRs") and Global Depositary Receipts ("GDRs") (collectively,
"Depositary Receipts"). ADRs are typically issued by a U.S. bank
or trust company to evidence ownership of underlying securities
issued by a foreign corporation. EDRs and GDRs are typically
issued by foreign banks or trust companies, although they also may
be issued by U.S. banks or trust companies, and evidence ownership
of underlying securities issued by either a foreign or a United
States corporation. Generally, Depositary Receipts in registered
form are designed for use in the U.S. securities market and
Depositary Receipts in bearer form are designed for use in
securities markets outside the United States. Depositary Receipts
may not necessarily be denominated in the same currency as the
underlying securities into which they may be converted.
Depositary Receipts may be issued pursuant to sponsored or
unsponsored programs. In sponsored programs, an issuer has made
arrangements to have its securities traded in the form of
Depositary Receipts. In unsponsored programs, the issuer may not
be directly involved in the creation of the program. Although
regulatory requirements with respect to sponsored and unsponsored
programs are generally similar, in some cases it may be easier to
obtain financial information from an issuer that has participated
in the creation of a sponsored program. Accordingly, there may be
less information available regarding issuers of securities
underlying unsponsored programs and there may not be a correlation
between such information and the market value of the Depositary
Receipts. Depositary Receipts also involve the risks of other
investments in foreign securities, as discussed below. For
purposes of the Fund's investment policies, the Fund's investments
in Depositary Receipts will be deemed to be investments in the
underlying securities.
Foreign Investments. Investors should recognize that
investing in foreign companies involves certain special
considerations which are not typically associated with investing
in U.S. companies. Because the stocks of foreign companies are
frequently denominated in foreign currencies, and because the Fund
may temporarily hold uninvested reserves in bank deposits in
foreign currencies, the Fund may be affected favorably or
unfavorably by changes in currency rates and in exchange control
regulations, and may incur costs in connection with conversions
between various currencies. The investment policies of the Fund
permit the Fund to enter into forward foreign currency exchange
contracts in order to hedge its holdings and commitments against
changes in the level of future currency rates. Such contracts
involve an obligation to purchase or sell a specific currency at a
future date at a price set at the time of the contract.
As foreign companies are not generally subject to uniform
accounting, auditing and financial reporting standards and may
have policies that are not comparable to those of domestic
companies, there may be less information available about certain
foreign companies than about domestic companies. Securities of
some foreign companies are generally less liquid and more volatile
than securities of comparable domestic companies. There is
generally less government supervision and regulation of stock
exchanges, brokers and listed companies than in the United States.
In addition, there is the possibility of expropriation or
confiscatory taxation, political or social instability, or
diplomatic developments which could affect U.S. investments in
foreign countries.
Although the Fund will endeavor to achieve most favorable
execution costs in its portfolio transactions, fixed commissions
on many foreign stock exchanges are generally higher than
negotiated commissions on U.S. exchanges. Certain foreign
governments levy withholding taxes on dividend and interest income
and, in some cases, also tax certain capital gains. Although in
some countries a portion of these taxes are reduced under
applicable income tax treaties and/or are recoverable, the non-
recovered portion of foreign taxes will reduce the income received
or returned from foreign companies the stock or securities of
which are held by the Fund.
Brokerage commissions, custodial services, and other costs
relating to investment in foreign securities markets are generally
more expensive than in the United States. Foreign securities
markets also have different clearance and settlement procedures,
and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions.
Delays in settlement could result in temporary periods when assets
of the Fund are uninvested and no return is earned thereon. The
inability of the Fund to make intended security purchases due to
settlement problems could cause the Fund to miss attractive
investment opportunities. Inability to dispose of portfolio
securities due to settlement problems could result either in
losses to the Fund due to subsequent declines in value of the
portfolio security or, if the Fund has entered into a contract to
sell the security, could result in possible liability to the
purchaser.
In addition, excess cash invested with depository
institutions domiciled outside the continental United States, as
with any offshore deposits, may be subject to both sovereign
actions in the jurisdiction of the depository institution and
sovereign actions in the jurisdiction of the currency, including
but not limited to freeze, seizure, and diminution. The risk
associated with the repayment of principal and payment of interest
on such instruments by the institution with whom the deposit is
ultimately placed will be exclusively for the Fund's account.
Other Investment Companies. The Fund may invest up to 10%
of its total assets in securities issued by other investment
companies investing in securities in which the Fund can invest,
provided that such investment companies invest in portfolio
securities in a manner consistent with the Fund's investment
objective and policies. Applicable provisions of the 1940 Act
require that the Fund limit its investments so that, as determined
immediately after a securities purchase is made: (a) not more
than 10% of the value of the Fund's total assets will be invested
in the aggregate in securities of investment companies as a group;
(b) the Fund and companies controlled by the Fund will not own
together more than 3% of the total outstanding shares of any one
investment company at the time of purchase; and (c) the Fund will
not invest more than 5% of its total assets in any one investment
company. As a shareholder of another investment company, the Fund
would bear, along with other shareholders, its pro rata portion of
the other investment company's expenses, including advisory fees.
These expenses would be in addition to the advisory and other
expenses that the Fund bears directly in connection with its own
operations.
Illiquid Securities. The Fund may invest up to 15% of its
net assets in illiquid securities. The term "illiquid securities"
for this purpose means securities that cannot be disposed of
within seven days in the ordinary course of business at
approximately the amount at which the Fund has valued the
securities and includes, among other securities, repurchase
agreements maturing in more than seven days, certain restricted
securities and securities that are otherwise not freely
transferable. Restricted securities may be sold only in privately
negotiated transactions or in public offerings with respect to
which a registration statement is in effect under the Securities
Act of 1933, as amended ("1933 Act"). Illiquid securities
acquired by the Fund may include those that are subject to
restrictions on transferability contained in the securities laws
of other countries. Securities that are freely marketable in the
country where they are principally traded, but that would not be
freely marketable in the United States, will not be considered
illiquid. Where registration is required, a Fund may be obligated
to pay all or part of the registration expenses and a considerable
period may elapse between the time of the decision to sell and the
time the Fund may be permitted to sell a security under an
effective registration statement. If, during such a period,
adverse market conditions were to develop, the Fund might obtain a
less favorable price than prevailed when it decided to sell.
In recent years a large institutional market has developed
for certain securities that are not registered under the 1933 Act,
including securities sold in private placements, repurchase
agreements, commercial paper, foreign securities and corporate
bonds and notes. These instruments often are restricted
securities because the securities are sold in transactions not
requiring registration. Institutional investors generally will
not seek to sell these instruments to the general public, but
instead will often depend either on an efficient institutional
market in which such unregistered securities can be resold readily
or on an issuer's ability to honor a demand for repayment.
Therefore, the fact that there are contractual or legal
restrictions on resale to the general public or certain
institutions is not determinative of the liquidity of such
investments.
Rule 144A under the 1933 Act establishes a safe harbor from
the registration requirements of the 1933 Act for resales of
certain securities to qualified institutional buyers.
Institutional markets for restricted securities sold pursuant to
Rule 144A in many cases provide both readily ascertainable values
for restricted securities and the ability to liquidate an
investment to satisfy share redemption orders. Such markets might
include automated systems for the trading, clearance and
settlement of unregistered securities of domestic and foreign
issuers, such as the PORTAL System sponsored by the National
Association of Securities Dealers, Inc. An insufficient number of
qualified buyers interested in purchasing Rule 144A-eligible
restricted securities, however, could adversely affect the
marketability of such portfolio securities and result in the
Fund's inability to dispose of such securities promptly or at
favorable prices.
The Board of Trustees has delegated the function of making
day-to-day determinations of liquidity to the Adviser pursuant to
guidelines approved by the Board. The Adviser takes into account
a number of factors in reaching liquidity decisions, including,
but not limited to: (i) the frequency of trades for the security,
(ii) the number of dealers that quote prices for the security,
(iii) the number of dealers that have undertaken to make a market
in the security, (iv) the number of other potential purchasers,
and (v) the nature of the security and how trading is effected
(e.g., the time needed to sell the security, how bids are
solicited and the mechanics of transfer). The Adviser monitors
the liquidity of restricted securities in the Fund's portfolio and
reports periodically on such decisions to the Board.
Forward Contracts. The Fund may enter into forward foreign
currency exchange contracts ("forward contracts") to attempt to
minimize the risk from adverse changes in the relationship between
the U.S. dollar and foreign currencies. A forward contract, which
is individually negotiated and privately traded by currency
traders and their customers, involves an obligation to purchase or
sell a specific currency for an agreed-upon price at a future
date.
The Fund may enter into a forward contract, for example,
when it enters into a contract for the purchase or sale of a
security denominated in a foreign currency or is expecting a
dividend or interest payment in order to "lock in" the U.S. dollar
price of a security, dividend or interest payment. When a Fund
believes that a foreign currency may suffer a substantial decline
against the U.S. dollar, it may enter into a forward contract to
sell an amount of that foreign currency approximating the value of
some or all of the Fund's portfolio securities denominated in such
currency, or when the Fund believes that the U.S. dollar may
suffer a substantial decline against a foreign currency, it may
enter into a forward contract to buy that currency for a fixed
dollar amount.
In connection with the Fund's forward contract purchases,
the Fund's custodian will maintain in a segregated account cash or
high grade liquid debt securities with a value equal to the amount
of the Fund's purchase commitments. Segregated assets used to
cover forward contracts will be marked to market on a daily basis.
While these contracts are not presently regulated by the Commodity
Futures Trading Commission ("CFTC"), the CFTC may in the future
regulate them, and limit the ability of the Fund to achieve
potential gains from a positive change in the relationship between
the U.S. dollar and foreign currencies. Unanticipated changes in
currency prices may result in poorer overall performance by the
Fund than if it had not entered into such contracts. The Fund
generally will not enter into a forward foreign currency exchange
contract with a term greater than one year.
While transactions in forward contracts may reduce certain
risks, such transactions themselves entail certain other risks.
Thus, while the Fund may benefit from the use of hedging
positions, unanticipated changes in interest rates, securities
prices or currency exchange rates may result in a poorer overall
performance for the Fund than if it had not entered into any
hedging positions. If the correlation between a hedging position
and portfolio position which is intended to be protected is
imperfect, the desired protection may not be obtained, and the
Fund may be exposed to risk of financial loss.
Perfect correlation between the Fund's hedging positions and
portfolio positions may be difficult to achieve because hedging
instruments in many foreign countries are not yet available. In
addition, it is not possible to hedge fully against currency
fluctuations affecting the value of securities denominated in
foreign currencies because the value of such securities is likely
to fluctuate as a result of independent factors not related to
currency fluctuations.
PURCHASE OF SHARES
The purchase price of shares of the Fund is the net asset
value next determined after receipt of the purchase order by the
transfer agent.
The Fund and its distributor reserve the right in their sole
discretion (i) to suspend the offering of its shares, (ii) to
reject purchase orders when in the judgment of management such
rejection is in the best interest of the Fund, and (iii) to reduce
or waive the minimum for initial and subsequent investments from
time to time.
At the Fund's discretion, shares of Fund may also be
purchased by exchanging securities acceptable to the Fund. The
Fund need not accept any security offered for exchange unless it
is consistent with the Fund's investment objective and
restrictions and is otherwise acceptable to the Fund. Securities
accepted in exchange for shares will be valued in accordance with
the Fund's usual valuation procedures. Investors interested in
making an in-kind purchase of Fund shares must first telephone the
Adviser to advise it of their intended action and obtain
instructions for an in-kind purchase.
REDEMPTION OF SHARES
The Fund may suspend redemption privileges or postpone the
date of payment (i) during any period that the New York Stock
Exchange (the "Exchange") is closed, or trading on the Exchange is
restricted as determined by the Commission, (ii) during any period
when an emergency exists as defined by the rules of the Commission
as a result of which it is not reasonably practicable for the Fund
to dispose of securities owned by it, or fairly to determine the
value of its assets, and (iii) for such other periods as the
Commission may permit.
No charge is made by the Fund for redemptions. Redemption
proceeds may be greater or less than the shareholder's initial
cost depending on the market value of the securities held by the
Fund.
PORTFOLIO TURNOVER
The portfolio turnover rate of the Fund will depend upon
market and other conditions and it will not be a limiting factor
when the Adviser believes that portfolio changes are appropriate.
Although the portfolio turnover rate may vary from year to year,
the Adviser expects, during normal market conditions, that the
Fund's portfolio turnover rate will not exceed 100%.
INVESTMENT LIMITATIONS
The Fund is subject to the following restrictions which are
fundamental policies and may not be changed without the approval
of the lesser of: (1) 67% of the voting securities of the Fund
present at a meeting if the holders of more than 50% of the
outstanding voting securities of the Fund are present or
represented by proxy, or (2) more than 50% of the outstanding
voting securities of the Fund. The Fund will not:
(1) enter into commodities or commodity contracts, other than
forward contracts;
(2) purchase or sell real estate, although it may purchase and
sell securities of companies which deal in real estate and may
purchase and sell securities which are secured by interests in
real estate;
(3) make loans except (i) by purchasing bonds, debentures or
similar obligations (including repurchase agreements and money
market instruments, including bankers acceptances and commercial
paper, and selling securities on a when issued, delayed settlement
or forward delivery basis) which are publicly or privately
distributed, and (ii) by entering into repurchase agreements;
(4) purchase on margin or sell short except as specified above
in investment limitation (1);
(5) purchase more than 10% of any class of the outstanding
voting securities of any issuer;
(6) with respect to 75% of its total assets, invest more than 5%
of its total assets at the time of purchase in the securities of
any single issuer (other than obligations issued or guaranteed by
the U.S. Government, its agencies, enterprises or
instrumentalities);
(7) issue senior securities, except that the Trust or the Fund
may issue shares of more than one series or class, may borrow
money in accordance with investment limitation (8) below, purchase
securities on a when issued, delayed settlement or forward
delivery basis and enter into reverse repurchase agreements;
(8) borrow money, except that the Fund may borrow money as a
temporary measure for extraordinary or emergency purposes and may
enter into reverse repurchase agreements in an amount not
exceeding 331/3% of its total assets at the time of the borrowing,
provided, however, that the Fund will not make additional
investments while borrowings representing more than 5% of the
Fund's total assets are outstanding;
(9) underwrite the securities of other issuers, except to the
extent that the purchase and subsequent disposition of securities
may be deemed underwriting;
(10) invest for the purpose of exercising control over management
of any company; and
(11) acquire any securities of companies within one industry if,
as a result of such acquisition, 25% or more of the value of the
Fund's total assets would be invested in securities of companies
within such industry; provided, however, that there shall be no
limitation on the purchase of obligations issued or guaranteed by
the U.S. Government, its agencies, enterprises or
instrumentalities.
In addition, as non-fundamental policies, the Fund will not
(i) invest more than 15% of the net assets of the Fund, at the
time of purchase, in securities for which there are no readily
available markets, including repurchase agreements which have
maturities of more than seven days; (ii) pledge, mortgage, or
hypothecate any of its assets to an extent greater than 15% of its
total assets at fair market value, except as described in the
Prospectus and this SAI, but the deposit of assets in a segregated
account in connection with the purchase of securities on a when
issued, delayed settlement or forward delivery basis will not be
deemed to be pledges of the Fund's assets for purposes of this
investment policy; (iii) invest its assets in securities of any
investment company, except in connection with mergers,
acquisitions of assets or consolidations and except as may
otherwise be permitted by the 1940 Act; (iv) invest more than 5%
of the value of the Fund's net assets in warrants, valued at the
lower of cost or market, including within that amount up to 2% of
the value of the Fund's net assets warrants which are not listed
on the New York or American Stock Exchange (warrants acquired by
the Fund in units or attached to securities may be deemed to be
without value); and (v) write or acquire options or interests in
oil, gas or other mineral exploration or development programs.
With regard to non-fundamental policy (iii), the 1940 Act
currently prohibits an investment company from acquiring
securities of another investment company if, as a result of the
transaction, the acquiring company and any company or companies
controlled by it would own in the aggregate: (i) more than 3% of
the total outstanding voting stock of the acquired company, (ii)
securities issued by the acquired company having an aggregate
value in excess of 5% of the value of the total assets of the
acquiring company, or (iii) securities issued by the acquired
company and all other investment companies (other than treasury
stock of the acquired company) having an aggregate value in excess
of 10% of the value of the total assets of the acquiring company.
To the extent that the Fund invests in shares of other investment
companies, the Fund's shareholders will be subject to expenses of
such other investment companies, in addition to expenses of the
Fund. With regard to non-fundamental policy (v), the purchase of
securities of a corporation, a subsidiary of which has an interest
in oil, gas or other mineral exploration or development programs,
shall not be prohibited by the limitation.
If a percentage restriction is adhered to at the time an
investment is made, a later increase in percentage resulting from
a change in value of assets will not constitute a violation of
such restriction, except that any borrowings by the Fund that
exceed the limitation set forth in investment limitation 8 above
must be reduced to meet such limitation within the period required
by the 1940 Act (currently three days, not including Sundays and
holidays). In addition, the Fund will limit its aggregate
holdings of illiquid assets to 15% of its net assets.
MANAGEMENT OF THE FUND
Board Members and Officers. The business and affairs of the Trust
are managed under the direction of its Board. The Trust's
officers, under the supervision of the Board, manage the day to
day operations of the Trust. The Board Members set broad policies
for the Trust and choose its officers. The following is a list of
the Board Members and officers of the Trust and a brief statement
of their principal occupations during the past five years. Each
Trustee who is an "interested person" of the Trust, as defined in
the 1940 Act, is indicated by an asterisk.
Name, Address and
Position
A
g
e
Principal Occupation
During Past Five Years
Jean G. Pilloud*,
President and
Chairman
Pictet & Cie
29, Boulevard
Georges-Favon
1204 Geneva
Switzerland
5
1
Senior Vice President of
Pictet & Cie.
Jean-Francois
Demole* , Trustee
Pictet Canada &
Company Ltd.
1800 McGill
College Avenue,
Suite 2900
Montreal, Quebec
H3A3J6
3
4
Chief Executive Officer of
Pictet (Canada) & Company
Ltd., since March 1994;
Vice President of Pictet &
Cie, December 1990 to
March 1994; Associate,
Wertheim Schroder & Co. in
the corporate finance area
from September 1988 to
September 1990.
Jeffrey P.
Somers,* Trustee
Morse, Barnes-
Brown & Pendleton
1601 Trapelo Road
Reservoir Place
Waltham, MA 02154
5
3
Officer, Director and
Stockholder of Morse,
Barnes-Brown & Pendleton
(law firm); Associate
lawyer and Partner, Gadsby
& Hannah, prior to
February 1995.
Bruce W.
Schnitzer, Trustee
Wand Partners,
Inc.
630 Fifth Avenue,
Suite 2435
New York, NY
10111
5
1
Chairman of the Board of
Wand Partners, Inc;
Director, Chartwell Re
Corporation, Life Partners
Group, Inc., PennCorp
Financial Group and
AMRESCO Inc.
David J. Callard,
Trustee
Wand Partners,
Inc.
630 Fifth Avenue,
Suite 2435
New York, NY
10111
5
7
President, Wand Partners,
Inc. since January 1991;
Director, Waverly, Inc.;
Director, Chartwell Re
Corporation. Mr. Callard
was self-employed as a
financial advisor doing
business as Callard &
Company prior to January
1991.
Patricia L.
Bickimer,
Secretary
The Shareholder
Services Group,
Inc.
One Exchange Place
Boston, MA. 02109
4
3
Vice President and
Associate General Counsel,
The Shareholder Services
Group, Inc. Ms. Bickimer
has been employed by The
Shareholder Services
Group, Inc. since May
1994. She was employed as
Associate General Counsel
by The Boston Company
Advisors, Inc. prior to
May 1994.
Michael C. Kardok,
Treasurer
First Data
Investor Services
Group, Inc.
One Exchange Place
Boston, MA 02109
3
9
Vice President, First Data
Investor Services Group,
Inc. Mr. Kardok has been
employed by First Data
Investor Services Group,
Inc. since May 1994. He
was employed by The Boston
Company Advisors, Inc. as
Vice President, Assistant
Treasurer and Financial
Manager prior to May
1994.
Remuneration of Board Members. The Trust pays each Board member
(except those employed by the Adviser or its affiliates) an annual
fee of $5,000 plus $500 for each Board and Committee meeting
attended and out-of-pocket expenses incurred in attending such
meetings.
Compensation Table
The following table sets forth the anticipated compensation
to be paid to the Trustees of the Trust for the year ending
December 31, 1996. No compensation is paid to any officers of the
Trust by the Fund.
<TABLE>
<CAPTION>
NAME OF PERSON AGGREGATE TOTAL COMPENSATION
COMPENSATION FROM FROM THE TRUST AND
FROM THE TRUST COMPLEX PAID TO
TRUSTEES
<S> <C> <C>
David J. Callard $7,500 $7,500
Trustee
$7,500 $7,500
Jean-Francois Demole
Trustee
0 0
Jean G. Pilloud
Trustee
0
Bruce W. Schnizter
Trustee $7,500 $7,500
Jeffrey P. Somers
Trustee $7,500 $7,500
</TABLE>
Control Persons and Principal Holders of Securities
As of March 22, 1996, the following persons owned 5% or more
of the outstanding shares of the Fund:
State Board of Administration of Florida 61.67%
1801 Hermitage Boulevard
Tallahassee, Fl 32308
Mellon Bank, NA Trustee for 19.18%
Dominion Resources Inc. Retirement Plan
One Mellon Bank Center
Pittsburgh, PA 15258
Key Trust Company as directed Trustee for 12.38%
Centerior Service Company
6200 Oak Tree Boulevard
Independence, OH 44131
As of March 22, 1996, the Trustees and officers of the Trust
beneficially owned 0% of the outstanding shares of the Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
As noted in the Prospectus, the Adviser is entitled to
receive a fee from the Fund for its services, calculated daily and
payable monthly, at the annual rate of 1.25% of the Fund's average
daily net assets. The Adviser, located at Cutlers Garden, 5
Devonshire Square, London, England EC2M 4LD, is the wholly-owned
subsidiary of Pictet (Canada) and Company Ltd. ("Pictet Canada").
Pictet Canada is a partnership, whose principal activity is
investment accounting, custody and securities brokerage. Pictet
Canada has two general partners, Pictet Advisory Services Overseas
and FINGEST, and seven limited partners, each of whom is also a
partner of Pictet & Cie, a Swiss private bank founded in 1805.
For the period October 4, 1995 (commencement of operations)
through December 31, 1995, the Adviser waived its fee of $29,114
and reimbursed expenses in the amount of $120,948.
Administrative services are provided to the Trust by First
Data Investor Services Group, Inc. ("FDISG"), pursuant to an
administration agreement. For the period October 4, 1995
(commencement of operations) through December 31, 1995, the Fund
paid fees to FDISG of $65,323. See "Administrative Services" in
the Prospectus for information concerning the substantive
provisions of the administration agreement.
Custody services are provided to the Fund by Brown Brothers
Harriman & Co.
DISTRIBUTOR
Shares of the Fund are distributed continuously and are
offered without a sales load by 440 Financial Distributors, Inc.
(the "Distributor") pursuant to a distribution agreement between
the Trust and the Distributor. The Distributor is a wholly owned
subsidiary of FDISG.
PORTFOLIO TRANSACTIONS
The investment advisory agreement authorizes the Adviser to
select the brokers or dealers that will execute the purchases and
sales of investment securities for the Fund and directs the
Adviser to use its best efforts to obtain the best available price
and most favorable execution with respect to all transactions for
the Fund. The Adviser, may, however, consistent with the
interests of the Fund, select brokers on the basis of the
research, statistical and pricing services they provide to the
Fund. Information and research received from such brokers will be
in addition to, and not in lieu of, the services required to be
performed by the Adviser under the investment advisory agreement.
A commission paid to such brokers may be higher than that which
another qualified broker would have charged for effecting the same
transaction, provided that such commissions are paid in compliance
with the Securities Exchange Act of 1934, as amended, and that the
Adviser determines in good faith that such commission is
reasonable in terms either of the transaction or the overall
responsibility of the Adviser to the Fund and the Adviser's other
clients. For the period October 4, 1995 (commencement of
operations) through December 31, 1995, the Fund paid $54,923 in
brokerage commissions and no brokerage commissions were paid to
affiliates.
Some securities considered for investment by the Fund may
also be appropriate for other clients of the Adviser. If the
purchase or sale of securities is consistent with the investment
policies of the Fund and one or more of these other clients served
by the Adviser and is considered at or about the same time,
transactions in such securities will be allocated among the Fund
and clients in a manner deemed fair and reasonable by the Adviser.
While in some cases this practice could have a detrimental effect
on the price, value or quantity of the security as far as the Fund
is concerned, in other cases it is believed to be beneficial to
the Fund.
ADDITIONAL INFORMATION CONCERNING TAXES
General. The following summarizes certain additional tax
considerations generally affecting the Fund and its shareholders.
No attempt is made to present a detailed explanation of the tax
treatment of the Fund or its shareholders, and the discussion here
and in the Prospectus is not intended as a substitute for careful
tax planning. Potential investors should consult their tax
advisers with specific reference to their own tax situation.
The Fund is treated as a separate taxable entity under the
Internal Revenue Code of 1986, as amended (the "Code"), and
intends to elect to be treated, and to qualify each year, as a
regulated investment company. Qualification as a regulated
investment company under the Code requires, among other things,
that the Fund distribute to its shareholders an amount equal to at
least the sum of 90% of its investment company taxable income and
90% of its tax-exempt interest income (if any) net of certain
deductions for a taxable year. In addition, the Fund must satisfy
certain requirements with respect to the source of its income for
each taxable year. At least 90% of the gross income of the Fund
for a taxable year must be derived from dividends, interest,
payments with respect to securities loans, gains from the sale or
other disposition of stock, securities or foreign currencies, and
other income (including, but not limited to, gains from forward
contracts) derived with respect to its business of investing in
such stock, securities or currencies. The Treasury Department may
by regulation exclude from qualifying income foreign currency
gains which are not directly related to the Fund's principal
business of investing in stock or securities. Any income derived
by the Fund from a partnership or trust is treated for this
purpose as derived with respect to its business of investing in
stock, securities or currencies only to the extent that such
income is attributable to items of income which would have been
qualifying income if realized by the Fund in the same manner as by
the partnership or trust.
The Fund will not be treated as a regulated investment
company under the Code if 30% or more of its gross income for a
taxable year is derived from gains realized on the sale or other
disposition of the following investments held for less than three
months: (1) stock and securities (as defined in section 2(a)(36)
of the 1940 Act); (2) foreign currencies (and forward contracts on
foreign currencies) that are not directly related to the Fund's
principal business of investing in stock and securities. Interest
(including original issue discount and accrued market discount)
received by the Fund upon maturity or disposition of a security
held for less than three months will not be treated as gross
income derived from the sale or other disposition of such security
within the meaning of this requirement. However, income which is
attributable to realized market appreciation will be treated as
gross income from the sale or other disposition of securities for
this purpose.
In order to qualify as a regulated investment company, the
Fund must also diversify its holdings so that, at the close of
each quarter of its taxable year, (i) at least 50% of the market
value of its total (gross) assets is comprised of cash, cash
items, United States Government securities, securities of other
regulated investment companies and other securities limited in
respect of any one issuer to an amount not greater in value than
5% of the value of the Fund's total assets and to not more than
10% of the outstanding voting securities of such issuer, and (ii)
not more than 25% of the value of its total assets is invested in
the securities of any one issuer (other than United States
Government securities and securities of other regulated investment
companies) or two or more issuers controlled by the Fund and
engaged in the same, similar or related trades or businesses.
Any distribution of the excess of net long-term capital gain
over net short-term capital loss is taxable to shareholders as
long-term capital gain, regardless of how long the shareholder has
held the Fund's shares and whether such distribution is received
in cash or additional Fund shares. The Fund will designate such
distributions as capital gain dividends in a written notice mailed
to shareholders within 60 days after the close of the Fund's
taxable year. Shareholders should note that, upon the sale of Fund
shares, if the shareholder has not held such shares for tax
purposes for more than six months, any loss on the sale of those
shares will be treated as long-term capital loss to the extent of
the capital gain dividends received with respect to the shares.
Losses on a redemption or other sale of shares may also be
disallowed under wash sale rules if other shares of the Fund are
acquired (including dividend reinvestments) within a prescribed
period.
An individual's net long-term capital gains are taxable at a
maximum effective rate of 28%. Ordinary income of individuals is
taxable at a maximum nominal rate of 39.6%, but because of
limitations on itemized deductions otherwise allowable and the
phase-out of personal exemptions, the maximum effective marginal
rate of tax for some taxpayers may be higher. For corporations,
long-term capital gains and ordinary income are both taxable at a
maximum nominal rate of 35% (although surtax provisions apply at
certain income levels to result in higher effective marginal
rates).
If the Fund retains net capital gain for reinvestment, the
Fund may elect to treat such amounts as having been distributed to
shareholders. As a result, the shareholders would be subject to
tax on undistributed net capital gain, would be able to claim
their proportionate share of the Federal income taxes paid by the
Fund on such gain as a credit against their own Federal income tax
liabilities, and would be entitled to an increase in their basis
in their Fund shares.
If for any taxable year the Fund does not qualify for the
special Federal income tax treatment afforded regulated investment
companies, all of its taxable income will be subject to Federal
income tax at regular corporate rates (without any deduction for
distributions to its shareholders). In such event, dividend
distributions would be taxable as ordinary income to shareholders
to the extent of the Fund's current and accumulated earnings and
profits and would be eligible for the dividends received deduction
for corporations.
Foreign Taxes. Income (including, in some cases, capital
gains) received from sources within foreign countries may be
subject to withholding and other income or similar taxes imposed
by such countries. If more than 50% of the value of the Fund's
total assets at the close of its taxable year consists of stock or
securities of foreign corporations, the Fund will be eligible and
may elect to "pass-through" to its shareholders the amount of
foreign income and other qualified foreign taxes paid by it. If
this election is made, each taxable shareholder will be required
to include in gross income (in addition to taxable dividends
actually received) his pro rata share of the qualified foreign
taxes paid by the Fund, and will be entitled either to deduct (as
an itemized deduction) his pro rata share of foreign taxes in
computing his taxable income or to use it as a foreign tax credit
against his U.S. Federal income tax liability, subject to
limitations. No deduction for foreign taxes may be claimed by a
shareholder who does not itemize deductions, but such a
shareholder may be eligible to claim the foreign tax credit (see
below). If the Fund makes this election, each shareholder will be
notified within 60 days after the close of the Fund's taxable
year.
Generally, a credit for foreign taxes is subject to the
limitation that it may not exceed the shareholder's U.S. tax
attributable to his or her foreign source taxable income. For
this purpose, if the pass-through election is made, the source of
the Fund's income flows through to its shareholders. With respect
to the Fund, gains from the sale of securities will be treated as
derived from U.S. sources and certain currency gains, including
currency gains from foreign currency denominated debt securities,
receivables and payables, will be treated as ordinary income
derived from U.S. sources. The limitation on the foreign tax
credit is applied separately to foreign source passive income (as
defined for purposes of the foreign tax credit), including the
foreign source passive income passed through by the Fund.
Shareholders may be unable to claim a credit for the full amount
of their proportionate share of the foreign taxes paid by the
Fund. Foreign taxes may not be deducted in computing alternative
minimum taxable income and the foreign tax credit can be used to
offset only 90% of the alternative minimum tax (as computed under
the Code for purposes of this limitation) imposed on corporations
and individuals. If the Fund is not eligible to or does not make
the election to "pass through" to its shareholders its foreign
taxes, the foreign taxes it pays will reduce investment company
taxable income and the distributions by the Fund will be treated
as United States source income.
The Fund may invest up to 10% of its total assets in the
stock of foreign investment companies. Such companies are likely
to be treated as "passive foreign investment companies" ("PFICs")
under the Code. Certain other foreign corporations, not operated
as investment companies, may also satisfy the PFIC definition. A
portion of the income and gains that the Fund derives from an
equity investment in a PFIC may be subject to a non-deductible
federal income tax (including an interest-equivalent amount) at
the Fund level. In some cases, the Fund may be able to avoid this
tax by electing to be taxed currently on its share of the PFIC's
income, whether or not such income is actually distributed by the
PFIC or by making an election (if available) to mark its PFIC
investments to market or by otherwise managing its PFIC
investments. The Fund will endeavor to limit its exposure to the
PFIC tax by any available techniques or elections. Because it is
not always possible to identify a foreign issuer as a PFIC in
advance of making the investment, the Fund may incur the PFIC tax
in some instances.
Other Tax Matters. Special rules govern the Federal income
tax treatment of certain transactions denominated in terms of a
currency other than the U.S. dollar or determined by reference to
the value of one or more currencies other than the U.S. dollar.
The types of transactions covered by the special rules include the
following: transactions in foreign currency denominated debt
instruments, foreign currency denominated payables and
receivables, foreign currencies and foreign currency forward
contracts. With respect to transactions covered by the special
rules, foreign currency gain or loss is calculated separately from
any other gain or loss on the underlying transaction (subject to
certain netting rules) and is generally, absent an election that
may be available in some cases, taxable as ordinary gain or loss.
Any gain or loss attributable to the foreign currency component of
a transaction engaged in by the Fund which is not subject to the
special currency rules (such as foreign equity investments other
than certain preferred stocks) will be treated as capital gain or
loss and will not be segregated from the gain or loss on the
underlying transaction. Mark to market and other tax rules
applicable to certain currency forward contracts may affect the
amount, timing and character of the Fund's income, gain or loss
and hence of its distributions to shareholders. It is anticipated
that some of the non-U.S. dollar denominated investments and
foreign currency contracts the Fund may make or enter into will be
subject to the special currency rules described above.
The Fund may recognize income currently each taxable year
for Federal income tax purposes under the Code's original issue
discount rules in the amount of the unpaid, accrued interest with
respect to bonds structured as zero coupon or deferred interest
bonds or pay-in-kind securities, even though it receives no cash
interest until the security's maturity or payment date. As
discussed above, in order to qualify for treatment as a regulated
investment company, the Fund must distribute substantially all of
its income to shareholders. Thus, the Fund may have to dispose of
its portfolio securities under disadvantageous circumstances to
generate cash or leverage itself by borrowing cash, so that it may
satisfy the distribution requirement.
Under the current tax law, capital and currency losses
realized after October 31 may be deferred and treated as occurring
on the first day of the following fiscal year. For the fiscal
period ended December 31, 1995, the Fund has elected to defer
capital losses and currency losses occurring between November 1,
1995 and December 31, 1995 of $26,379 and $1,906, respectively,
under these rules. Such losses will be treated as arising on the
first day of the year ending December 31, 1996.
The Fund is not liable for Massachusetts corporate excise
taxes or franchise taxes and, provided that it qualifies as a
regulated investment company, will not be required to pay
Massachusetts income tax.
Exchange control regulations that may restrict repatriation
of investment income, capital, or the proceeds of securities sales
by foreign investors may limit the Fund's ability to make
sufficient distributions to satisfy the 90% and calendar year
distribution requirements described above.
Different tax treatment, including penalties on certain
excess contributions and deferrals, certain pre-retirement and
post-retirement distributions and certain prohibited transactions,
is accorded to accounts maintained as qualified retirement plans.
Shareholders should consult their tax advisers for more
information.
The foregoing discussion related solely to U.S. Federal
income tax law as applicable to U.S. persons (i.e., U.S. citizens
or residents and U.S. domestic corporations, partnerships, trusts
or estates) subject to tax under such law. The discussion does
not address special tax rules applicable to certain classes of
investors, such as tax-exempt entities, insurance companies, and
financial institutions. Dividends, capital gain distributions,
and ownership of or gains realized on the redemption (including an
exchange) of Fund shares may also be subject to state and local
taxes. Shareholders should consult their own tax advisers as to
the Federal, state or local tax consequences of ownership of
shares of, and receipt of distributions from, the Fund in their
particular circumstances.
Non-U.S. investors not engaged in a U.S. trade or business
with which their investment in the Fund is effectively connected
will be subject to U.S. Federal income tax treatment that is
different from that described above. These investors may be
subject to nonresident alien withholding tax at the rate of 30%
(or a lower rate under an applicable tax treaty) on amounts
treated as ordinary dividends from the Fund and, unless an
effective IRS Form W-8 or authorized substitute is on file, to 31%
backup withholding on certain other payments from the Fund. Non-
U.S. investors should consult their ax advisers regarding such
treatment and the application of foreign taxes to an investment in
the Fund.
PERFORMANCE CALCULATIONS
The Fund may advertise its average annual total return. The
Fund computes such return by determining the average annual
compounded rate of return during specified periods that equates
the initial amount invested to the ending redeemable value of such
investment according to the following formula:
T = [( ERV )1/n - 1]
P
Where: T = average annual total return.
ERV = ending redeemable value at the end of the period
covered by the computation of a hypothetical $1,000 payment made
at the beginning of the period.
P = hypothetical initial payment of $1,000.
n = period covered by the computation, expressed in
terms of years.
The Fund computes its aggregate total return by determining
the aggregate rates of return during specified periods that
likewise equate the initial amount invested to the ending
redeemable value of such investment. The formula for calculating
aggregate total return is as follows:
T = [( ERV ) - 1]
P
The calculations of average annual total return and
aggregate total return assume the reinvestment of all dividends
and capital gain distributions. The ending redeemable value
(variable "ERV" in each formula) is determined by assuming
complete redemption of the hypothetical investment and the
deduction of all nonrecurring charges at the end of the period
covered by the computations. The Fund's average annual total
return and aggregate total return do not reflect any fees charged
by Institutions to their clients.
GENERAL INFORMATION
Dividends and Capital Gain Distributions
The Fund's policy is to distribute substantially all of its
net investment income, if any, together with any net realized
capital gains in the amount and at the times that will generally
avoid both income and the Federal excise tax on undistributed
income and gains (see discussion under "Dividends, Capital Gains
Distributions and Taxes" in the Prospectus). The amounts of any
income dividends or capital gains distributions cannot be
predicted.
Any dividend or distribution paid shortly after the purchase
of shares of the Fund by an investor may have the effect of
reducing the per share net asset value of the Fund by the per
share amount of the dividend or distribution. Furthermore, such
dividends or distributions, although in effect a return of a
portion of the purchase price, are subject to income taxes as set
forth in the Prospectus.
Massachusetts Business Trust
The Trust is an entity of the type commonly known as a
"Massachusetts business trust". Under Massachusetts law,
shareholders of such a business trust may, under certain
circumstances, be held personally liable as partners for its
obligations. However, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to
circumstances in which both inadequate insurance existed and the
Trust itself was unable to meet its obligations.
FINANCIAL STATEMENTS
The Trust's Annual Report for the period ended December 31,
1995 accompanies this Statement of Additional Information and the
Trust's financial statements and related notes and the report of
independent accountants contained therein are incorporated by
reference into this Statement of Additional Information.
APPENDIX -- DESCRIPTION OF RATINGS AND U.S. GOVERNMENT SECURITIES
I. Description of Commercial Paper Ratings
Description of Moody's highest commercial paper rating:
Prime-1 ("P-1") --judged to be of the best quality. Issuers rated
P-1 (or related supporting institutions) are considered to have a
superior capacity for repayment of short-term promissory
obligations.
Description of S&P highest commercial papers ratings: A-1+
- -- this designation indicates the degree of safety regarding
timely payment is overwhelming. A-1 -- this designation indicates
the degree of safety regarding timely payment is either
overwhelming or very strong.
Description of Bond Ratings
The following summarizes the ratings used by S&P for
corporate and municipal debt:
AAA - Debt rated AAA has the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay
interest and repay principal and differs from the highest rated
issues only in a small degree.
A - Debt rated A has 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 - Debt rated BBB is regarded as having 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.
Plus (+) or Minus (-): The ratings from AA to BBB may be
modified by the addition of a plus or minus sign to show relative
standing within the major rating categories.
The following summarizes the ratings used by Moody's for
corporate and municipal long-term debt:
Aaa - Bonds that are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edge." Interest payments are
protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such
issues.
Aa - Bonds that are rated Aa 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 or there may be other
elements present which make the long-term risks appear somewhat
larger than in Aaa securities.
A - Bonds that are rated A possess many favorable
investment attributes and are to be considered 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 that are rated Baa are considered 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.
Moody's applies numerical modifiers (1, 2 and 3) with
respect to corporate bonds rated Aa, A and Baa. The modifier 1
indicates that the bond being rated 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 bond ranks in the
lower end of its generic rating category. Those bonds in the Aa,
A and Baa categories which Moody's believes possess the strongest
investment attributes, within those categories are designated by
the symbols Aa1, A1 and Baa1, respectively.
II. Description of U.S. Government Securities and Certain Other
Securities
The term "U.S. Government securities" refers to a variety of
securities which are issued or guaranteed by the United States
Government, and by various instrumentalities which have been
established or sponsored by the United States Government.
U.S. Treasury securities are backed by the "full faith and
credit" of the United States Government. Securities issued or
guaranteed by Federal agencies and U.S. Government sponsored
enterprises or instrumentalities may or may not be backed by the
full faith and credit of the United States. In the case of
securities not backed by the full faith and credit of the United
States, an investor must look principally to the agency,
enterprise or instrumentality issuing or guaranteeing the
obligation for ultimate repayment, and may not be able to assert a
claim against the United States itself in the event the agency,
enterprise or instrumentality does not meet its commitment.
Agencies which are backed by the full faith and credit of the
United States include the Export Import Bank, Farmers Home
Administration, Federal Financing Bank and others. Certain
agencies, enterprises and instrumentalities, such as the
Government National Mortgage Association are, in effect, backed by
the full faith and credit of the United States through provisions
in their charters that they may make "indefinite and unlimited"
drawings on the Treasury, if needed to service its debt. Debt
from certain other agencies, enterprises and instrumentalities,
including the Federal Home Loan Bank and Federal National Mortgage
Association, are not guaranteed by the United States, but those
institutions are protected by the discretionary authority for the
U.S. Treasury to purchase certain amounts of their securities to
assist the institution in meeting its debt obligations. Finally,
other agencies, enterprises and instrumentalities, such as the
Farm Credit System and the Federal Home Loan Mortgage Corporation,
are federally chartered institutions under Government supervision,
but their debt securities are backed only by the creditworthiness
of those institutions, not the U.S. Government.
Some of the U.S. Government agencies that issue or guarantee
securities include the Export-Import Bank of the United States,
Farmers Home Administration, Federal Housing Administration,
Maritime Administration, Small Business Administration and The
Tennessee Valley Authority.
An instrumentality of the U.S. Government is a Government
agency organized under Federal charter with Government
supervision. Instrumentalities issuing or guaranteeing securities
include, among others, Overseas Private Investment Corporation,
Federal Home Loan Banks, the Federal Land Banks, Central Bank for
Cooperatives, Federal Intermediate Credit Banks and the Federal
National Mortgage Association.
C: OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
List all financial statements and exhibits filed as part of
the Registration Statement.
(a) Financial Statements:
Included in Part A:
Audited Financial Highlights for Pictet Global
Emerging Markets Fund for
the period from October 4, 1995 (commencement of
operations) to December 31, 1995 are filed
herein.
Included in Part B:
The following audited Financial Statements for Pictet
Global Emerging Markets Fund for the period
October 4, 1995 (commencement of operations) to the
fiscal year ended December 31, 1995 are incorporated into the
Statement of Additional Information of the
Registrant's by reference to the Registrant's
Annual Report for the fiscal year ended December 31, 1995:
Portfolio of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
Report of Independent Accountants
Included in Part C:
Consent of Independent Auditors is filed herein.
(b) Exhibits:
(1)(a) Declaration of Trust initially filed on
May 24, 1995 is incorporated by reference to
Post-Effective No. 3 as filed with the SEC January 2,
1996 ("Post-Effective Amendment No. 3").
(1)(b) Amendment to the Declaration of Trust
dated June 8, 1995 initially filed on
September 21, 1995 is incorporated by reference to Post-
Effective Amendment No. 3.
(1)(c) Amendment to the Declaration of Trust
dated December 8,1995 is incorporated by
reference to Post-Effective Amendment No. 3.
(1)(d) Amendment to Declaration of Trust dated
March 1, 1996 is filed herein.
(2) By-Laws initially filed on May 24, 1995 is
incorporated by reference to Post-
Effective Amendment No. 3.
(3) Not Applicable.
(4) Not Applicable.
(5)(a) Investment Advisory Agreement between
Registrant and Pictet International Management Limited is
incorporated by reference to Post-Effective Amendment No. 3.
(5)(b) Supplement dated January 2, 1996 to
Investment Advisory Agreement between Registrant and Pictet
International Management Limited with respect to Pictet
International Small Companies Fund is filed herein.
(6)(a) Distribution Agreement between Registrant
and 440 Financial Distributors,
Inc. is incorporated by reference to Post-
Effective Amendment No. 3.
(6)(b) Supplement dated January 2, 1996 to the
Distribution Agreement dated between Registrant and
First Data Investor Services Group, Inc. with
respect to Pictet International Small Companies Fund is
filed herein.
(7) Not Applicable.
(8)(a) Custodian Agreement between Registrant and
Brown Brothers Harriman & Co. is incorporated by reference to
Post-Effective Amendment No. 3.
(8)(b) Amendment to Custodian Agreement dated
January 10, 1996 to Custodian Agreement between Registrant and
Brown Brothers Harriman & Co. is filed herein.
(9)(a) Transfer Agency Agreement between
Registrant and The Shareholder Services Group, Inc. is
incorporated by reference to Post-Effective Amendment No. 3.
(9)(b) Supplement dated January 2, 1996 to the
Transfer Agency and Services Agreement between Registrant and
First Data Investor Services Group, Inc. with respect to Pictet
Global Emerging Markets
is filed herein.
(9)(c) Administration Agreement between
Registrant and The Shareholder Services Group, Inc. is
incorporated by reference to Post-Effective Amendment No. 3.
(9)(d) Supplement dated January 2, 1996 to the
Administration Agreement between Registrant and First Data
Investor Services Group, Inc.with respect to Pictet International
Small Companies Fund is filed herein.
(10) Not applicable.
(11) Consent of Coopers & Lybrand, L.L.P, Independent
Accountants is filed herein.
(12) Not Applicable.
(13)(a) Purchase Agreement relating to Initial
Capital initially filed
on October 2, 1995 is incorporated by reference
to Post-Effective mendment No. 3.
(13)(b) Purchase Agreement relating to Initial
Capital dated February 1, 1996 with respect
to Pictet International Small Companies is filed
herein.
(14) Not Applicable.
(15) Not Applicable.
(16) Not Applicable.
(17) Financial Data Schedule is filed herein.
Item 25. Persons Controlled by or Under Common Control with
Registrant.
Registrant is not controlled by or under common control with
any person.
Item 26. Number of Holders of Securities.
As of March 12, 1996, there are, with respect to the Pictet
International Small Companies Fund, 3 record holders of the
Registrant's shares of beneficial interest, $.001 par value.
As of March 12, 1996, there are, with respect to the Pictet
Global Emerging Markets Fund, 6 record holders of the Registrant's
shares of beneficial interest, $.001 par value.
Item 27. Indemnification.
Under Section 4.3 of Registrant's Declaration of Trust, any
past or present Trustee or officer of Registrant (hereinafter
referred to as a "Covered Person") is indemnified to the fullest
extent permitted by law against all liability and all expenses
reasonably incurred by him or her in connection with any claim,
action, suit or proceeding to which he or she may be a party or
otherwise involved by reason of his or her being or having been a
Covered Person. This provision does not authorize indemnification
when it is determined, in the manner specified in the Declaration
of Trust, that such Covered Person has not acted in good faith in
the reasonable belief that his or her actions were in or not
opposed to the best interests of Registrant. Moreover, this
provision does not authorize indemnification when it is
determined, in the manner specified in the Declaration of Trust,
that such Covered Person would otherwise be liable to Registrant
or its shareholders by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of his or her duties.
Expenses may be paid by Registrant in advance of the final
disposition of any claim, action, suit or proceeding upon receipt
of an undertaking by or on behalf of such Covered Person to repay
such expenses to Registrant in the event that it is ultimately
determined that indemnification of such expenses is not authorized
under the Declaration of Trust and the Covered Person either
provides security for such undertaking or insures Registrant
against losses from such advances or the disinterested Trustees or
independent legal counsel determines, in the manner specified in
the Declaration of Trust, that there is reason to believe the
Covered Person will be found to be entitled to indemnification.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act"), may be
permitted to Trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant
of expenses incurred or paid by a Trustee, officer, or controlling
person of the Registrant in connection with the successful defense
of any claim, action, suit or proceeding) is asserted against the
Registrant by such Trustee, officer or controlling person in
connection with the shares being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser.
Pictet International Management Limited (the "Adviser") is
an affiliate of Pictet & Cie (the "Bank"), a Swiss private bank,
which was founded in 1805. The Bank manages the accounts for
institutional and private clients and is owned by seven partners.
The Adviser, established in 1980, manages the investment needs of
clients seeking to invest in the international fixed revenue and
equity markets.
The list required by this Item 28 of officers and directors
of Pictet International Management Limited, together with the
information as to any other business, profession, vocation or
employment of substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference
to Schedules A and D of Form ADV filed by Pictet International
Management Limited pursuant to the Investment Advisers Act of 1940
(SEC File No. 801-15143).
Item 29. Principal Underwriters.
(a) 440 Financial Distributors, Inc., the Fund's Distributor,
also acts as principal underwriter and distributor for The Galaxy
Funds, the Armada Funds, the AMBAC Funds and the Kent
Funds.
(b) For information with respect to each Director and officer of
the principal underwriter of the Fund, see the following:
Name and
Principal
Business
Address
Position and
Offices with
440 Financial
Distributors,
Inc.
Pos
iti
on
and
Off
ice
s
wit
h
the
Reg
ist
ran
t
Tammy
Hall
Director,
President and
Chief
Executive
Officer
Non
e
Willam
Small
Director
Non
e
Jack P.
Kutner
Director
Non
e
Scott M.
Hacker
Vice
President,
Treasurer and
Chief
Financial
Officer
Non
e
Stephen
Wyle
Vice President
Non
e
Bernard
Rothman
Vice President
- - Tax
Non
e
Marlys
Jarstfer
Chief
Compliance
Officer
Non
e
Patricia
Bickimer
Chief Legal
Officer
Sec
ret
ary
Bradley
Stearns
Secretary
Non
e
The business address of the above-listed persons is 290
Donald Lynch Boulevard, Marlboro, Massachusetts 01752.
(c) 440 will not be paid any compensation from the
Registrant for its services as principal underwriter.
Item 30. Location of Accounts and Records.
All accounts books and other documents required to be
maintained by Registrant by Section 31(a) of the Investment
Company Act of 1940 and the Rules thereunder will be maintained at
the offices of:
Pictet International Management Limited
Cutlers Garden
5 Devonshire Square
London, England EC2M 4LD
(records relating to its functions as investment adviser)
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
(records relating to its functions as custodian)
First Data Investor Services Group, Inc.
One Exchange Place
Boston, Massachusetts 02109
(records relating to its functions as transfer agent and
administrator)
440 Funds Distributors, Inc.
290 Donald Lynch Boulevard
Marlboro, Massachusetts 01752
(records relating to its functions as distributor)
Item 31. Management Services.
Not Applicable.
Item 32. Undertakings.
(a) Not Applicable.
(b) Not Applicable
(c) The Registrant will furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without
charge.
(d) The undersigned Registrant will afford to shareholders
of the Fund the rights provided by Section 16(c) of the Investment
Company Act of 1940 so long as Registrant does not hold annual
meetings of its shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, and the Investment Company Act of 1940, as amended,
Panorama Trust certifies that it meets all of the requirements for
effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933, and the Registrant has
duly caused this Post-Effective Amendment No.4 to its Registration
Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Boston, and Commonwealth of
Massachusetts, on the 29th day of March.
PANORAMA TRUST
By /s/ Jean G. Pilloud
Jean G. Pilloud
Chairman, President and
Trustee
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Post-Effective Amendment No. 4 to the
Registration Statement of Panorama Trust has been signed by the
following persons in the capacities and on the dates indicated:
Signature Title Date
/s/ Jean G. Pilloud Chairman, President
March 29, 1996
(Jean G. Pilloud) and Trustee
(principal executive officer)
/s/ Michael C. Kardok Treasuer
March 29, 1996
(Michael C. Kardok) (principal financial and
accounting officer)
/s/ Jean-Francois Demole Trustee
March 29, 1996
(Jean-Francois Demole)
/s/ Jeffrey P. Somers, Esq. Trustee
March 29, 1996
(Jeffrey P. Somers, Esq.)
/s/ Bruce W. Schnitzer Trustee March
29, 1996
(Bruce W. Schnitzer)
/s/ David J. Callard Trustee
March 29, 1996
(David J. Callard)
<R/>
EXHIBIT INDEX
Exhibit
Page
Number Description Number
1(d) Amendment to the Declaration of Trust dated March 1, 1996
5(b) Supplement dated January 2, 1996 to Investment Advisory
Agreement
between Registrant and Pictet International Management
Limited with
respect to Pictet International Small Companies Fund
6(b) Supplement dated January 2, 1996 to Distribution Agreement
between Registrant and 440 Financial Distributors, Inc. with
respect to Pictet International Small Companies Fund
8(b) Amendment dated January 10, 1996 to Custodian Agreement
between Registrant and Brown Brothers Harriman & Co.
9(b) Supplement dated January 2, 1996 to the Transfer Agency and
Services
Agreement between Registrant and First Data Investor
Services Group, Inc.
with respect to Pictet International Small Companies Fund
9(d) Supplement dated January 2, 1996 to Administrative Agreement
between Registrant and First Data Investor Services Group,
Inc. with
respect to Pictet International Small Companies Fund
11 Consent of Coopers & Lybrand, L.L.P., Independent
Accountants
13 Purchase Agreement relating to Initial Capital with respect
to
Pictet International Small Companies Fund dated February 1,
1996
17 Financial Data Schedule
<R/>
* Board Members Pilloud, Demole and Somers are "interested persons" of the Trust
as defined in the 1940 Act.
3
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17
G:\SHARED\3RDPARTY\PANORAMA\PARTB\EMERG96.DOC
G:\SHARED\3RDPARTY\PANORAMA\PARTB\EMERG96DOC
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PANORAMA TRUST
AMENDMENT NO. 2 TO AGREEMENT AND
DECLARATION OF TRUST
The undersigned, Assistant Secretary of Endeavor Series
Trust (the "Trust"), does hereby certify that pursuant to Article
II, Section 2.8 and Article VIII, Section 8.3 of the Trust's
Declaration of Trust (the "Declaration of Trust") dated May 23,
1995, as amended, the following votes were duly adopted by
unanimous written consent of the Trustees dated as of March 1,
1996.
VOTED: That Article II, Section 2.2(f) is amended to read as
follows: "To borrow money and in this connection issue notes or
other evidence of indebtedness; to secure borrowings by
mortgaging, pledging or otherwise subjecting as security the Trust
Property; and to lend Trust Property."; and further
VOTED: That Article II, Section 2.2(g) is amended to read as
follows: "To aid by further investment any corporation, company,
trust, association or firm, any obligation of or interest in which
is included in the Trust Property and to do all acts and things
designed to protect, preserve, improve or enhance the value of
such obligation or interest."; and further
VOTED: That the following sections are deleted from Article
II, Section 2.9: "(e)
establish pension, profit-sharing, share purchase and
other retirement,
incentive and benefit plans for any Trustees,
officers, employees and
agents of the Trust;" and "(g) guarantee indebtedness
or contractual obligations of others;"... ; and that the remaining
sections are relettered to reflect such deletions; and further
VOTED: That the appropriate officers of the Trust are each
hereby authorized
and empowered to execute all instruments and documents and
to take any and all actions, including the filing of an amendment
to the Declaration of Trust with the Secretary of State of the
Commonwealth of Massachusetts and the Clerk of the City of Boston,
Massachusetts, as they or anyone of them in his or her sole
discretion deems necessary or appropriate to carry out the intent
and purposes of the foregoing votes.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand this
8th day of March, 1996.
/s/ Gail A. Hanson
Gail A. Hanson
Assistant Secretary
G:\SHARED\3RDPARTY\PANORAMA\AGRMTS\AMEND2.DOC
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SUPPLEMENT TO INVESTMENT ADVISORY AGREEMENT
PANORAMA TRUST
January 2, 1996
Pictet International Management Limited
Cutlers Garden
5 Devonshire Square
London, England EC2M 4LD
Dear Sirs:
This letter is to confirm that the undersigned, Panorama
Trust, a Massachusetts business trust (the "Trust"), and Pictet
International Management Limited (the "Adviser") have agreed that
that the Investment Advisory Agreement between the Trust and the
Adviser dated October 3, 1995 (the "Agreement"), is herewith
amended to provide that the Adviser shall additionally act as
investment adviser to the Pictet International Small Companies
Fund (the "Fund") on the terms and conditions contained in the
Agreement and this Supplement. The investment advisory fee for
such services to the Fund shall be at the annual rate of 1.00% of
the average daily net assets of the Fund, computed at the end of
each month and payable within five (5) business days thereafter.
If the foregoing is in accordance with your understanding,
please so indicate by signing and returning to us the enclosed
copy of this letter.
Very truly yours,
PANORAMA TRUST
By: /s/ Jean G. Pilloud
Authorized Signature
Accepted:
PICTET INTERNATIONAL MANAGEMENT LIMITED
By: /s/ signature illegible
Authorized Signature
SUPPLEMENT TO DISTRIBUTION AGREEMENT
PANORAMA TRUST
January 2, 1996
440 Funds Distributors, Inc.
290 Donald Lynch Boulevard
Marlboro, Massachusetts 01752
Dear Sirs:
This letter is to confirm that the undersigned, Panorama
Trust, a Massachusetts business trust (the "Trust"), and 440
Financial Distributors, Inc., a Massachusetts corporation (the
"Distributor") have agreed that that the Distribution Agreement
between the Trust and the Distributor dated October 3, 1995 (the
"Agreement"), is herewith amended to provide that the Distributor
shall also be the Distributor for the Pictet International Small
Companies Fund on the terms and conditions contained in the
Agreement. Schedule A to the Agreement is revised in the form
attached hereto.
If the foregoing is in accordance with your understanding,
will you so indicate by signing and returning to us the enclosed
copy hereof.
Very truly yours,
PANORAMA TRUST
By: /s/ Jean G. Pilloud
Authorized Signature
Accepted:
440 FINANCIAL DISTRIBUTORS, INC.
By: /s/ Tammy Hall
Authorized Signature
AMENDMENT TO THE
CUSTODIAN AGREEMENT
Amendment made as of January 10, 1996 (the
"Amendment"), among Panorama Trust, each of the Funds listed on
Appendix B (collectively the "Funds," individually a "Fund") and
Brown Brothers Harriman & Co. (the "Custodian") to the Custodian
Agreement dated September 15, 1995 among the Funds and the
Custodian (as heretofore amended, the "Custodian Agreement").
In consideration of the mutual covenants and agreements
herein contained, each Fund and the Custodian agree that the
Custodian Agreement is hereby amended as follows:
1. The sixth paragraph of Section 3 is replaced in its
entirety with the following paragraph:
"The Custodian shall be liable to a Fund for any loss or
damage to the Fund caused by or resulting from the acts or
omissions of any Subcustodian to the extent that, under the terms
set forth in the subcustodian agreement bet-veen the Custodian and
the Subcustodian (or in the subcustodian agreement between a
Subcustodian and any secondary Subcustodian), the Subcustodian (or
secondary Subcustodian) has failed to perform in accordance with
the standard of conduct imposed under such subcustodian agreement
as determined in accordance with the law which is adjudicated to
govern such agreement and in accordance with any determination of
any court as to the duties of said Subcustodian pursuant to said
agreement. The Custodian shall also be liable to a Fund for its
own negligence in transmitting any instructions received by it
from the Fund and for its own negligence in connection with the
delivery of any securities or funds held by it to any
Subcustodian."
Except as amended above, all the provisions of the Custodian
Agreement as heretofore in effect shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the date first set forth above.
PANORAMA TRUST BROWN BROTHERS HARRIMAN & CO.
/s/ Jean G. Pilloud /s/ Robert G. Bergman
Name: Jean Pilloud Name Robert G. Bergman
Title: Chairman of the Board Title: Manager
SUPPLEMENT TO TRANSFER AGENCY AND SERVICES AGREEMENT
January 2, 1996
Panorama Trust
One Exchange Place
Boston, Massachusetts 02109
Panorama Trust, a Massachusett business trust (the "Trust"),
hereby supplements its Transfer Agency and Services Agreement
dated October 3, 1995 (the "Transfer Agency Agreement") with The
Shareholder Services Group, Inc., a Massachusetts corporation (the
"Transfer Agent"), to provide the services as described under the
Transfer Agency Agreement for Pictet International Small Companies
Fund (the "New Fund"). Exhibit I to the Transfer Agency Agreement
is revised in the form attached hereto.
Fees to be paid by the Company to the Transfer Agent with
respect to the New Fund will be made in accordance with the Letter
Fee Agreement dated October 3, 1995, among the Trust, 440
Distributors, Inc. and the Transfer Agent. Such Letter Fee
Agreement is included as an exhibit to the Transfer Agency
Agreement.
If the foregoing is in accordance with your understanding,
kindly indicate your acceptance of this Supplement by signing and
returning the enclosed copy of this Supplement.
Very truly yours,
PANORAMA TRUST
By: /s/ Jean G. Pilloud
Authorized Signature
Accepted and Agreed to:
FIRST DATA INVESTOR SERVICES GROUP, INC.
(formerly, The Shareholder Services Group, Inc.)
By: /s/Jack P. Kutner
Authorized Signature
SUPPLEMENT TO ADMINISTRATION AGREEMENT
January 2, 1996
Panorama Trust, a Massachusett business trust (the "Trust"),
hereby supplements its Administration Agreement dated October 3,
1995 (the "Administration Agreement") with The Shareholder
Services Group, Inc., a Massachusetts business trust (the
"Administrator"), to provide the services as described under the
Administration Agreement for Pictet International Small Companies
Fund (the "New Fund"). Schedule A to the Administration Agreement
is revised in the form attached hereto.
Fees to be paid by the Trust to the Administrator with
respect to the New Fund will be made in accordance with the Fee
Letter Agreement dated October 3, 1995 among the Trust, the
Administrator and 440 Financial Distributors, Inc. Such Fee
Letter Agreement is referenced in the Administration Agreement.
If the foregoing is in accordance with your understanding,
kindly indicate your acceptance of this Supplement by signing and
returning the enclosed copy of this Supplement.
Very truly yours,
PANORAMA TRUST
By: /s/ Jean G. Pilloud
Authorized Signature
Accepted and Agreed to:
FIRST DATA INVESTOR SERVICES GROUP, INC.
(formerly known as The Shareholder Services Group, Inc.)
By: /s/ Jack P. Kutner
Authorized Signature
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of Panorama Trust:
We consent to the incorporation by reference in Post-
Effective Amendment No. 4 to the Registration Statement of
Panorama Trust
on Form N-1A of our report dated February 28, 1996, on our audit
of the financial statements and financial highlights of Pictet
Global Emerging Markets Fund, which report is included in the
Annual Report to Shareholders for the period from October 4, 1995
(commencement of operations) to December 31, 1995 which is
incorporated by reference in the Registration Statement. We also
consent to the reference to our Firm under the captions "Financial
Highlights" in the Prospectus and "Independent Accountants" in the
Statement of Additional Information.
Boston, Massachusetts COOPERS &
LYBRAND L.L.P. April 1, 1996
PURCHASE AGREEMENT
Panorama Trust (the "Trust"), a Massachusetts business
trust, and Pictet International Limited (the "Purchaser") hereby
agree as follows:
1. The Trust hereby offers the Purchaser and the Purchaser
hereby purchases one (1) share (the "Share") at $100 per share of
the Trust's Pictet International Small Companies Fund (the
"Fund"), with par value of $.001 per share. The Share is the
"initial share" of the Fund. The Purchaser hereby acknowledges
receipt of a purchase confirmation reflecting the purchase of the
Share, and the Trust hereby acknowledges receipt from the
Purchaser of funds in the amount of $100 in full payment for the
Share.
2. The Purchaser represents and warrants to the Trust that
the Share purchased by the Purchaser is being acquired for
investment purposes and not for the purpose of distribution.
3. The Trust represents that a copy of its Declaration of
Trust, dated May 23, 1995, is on file in the Office of the
Secretary of the Commonwealth of Massachusetts.
4. This Agreement has been executed on behalf of the Trust
by the undersigned officer of the Trust in her capacity as an
officer of the Trust. The obligations of this Agreement shall be
binding only upon the assets and property of the Fund and not
upon the assets and property of any other fund of the Trust.
5. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the 1st day of February, 1996.
PANORAMA TRUST
Attest:
/s/ signature illegible By: /s/ Jean G. Pilloud
Jean G. Pilloud
Attest: PICTET INTERNATIONAL
LIMITED
/s/ signature illegible By: /s/ signature illegible
G:\SHARED\3RDPARTY\PANORAMA\AGRMTS\PURCHAS2.DOC 1
G:\SHARED\3RDPARTY\PANORAMA\AGRMTS\PURCHAS2.DOC
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> Pictet Global Emerging Markets Fund
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 9,677,427
<INVESTMENTS-AT-VALUE> 9,209,280
<RECEIVABLES> 145,355
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 754,469
<TOTAL-ASSETS> 10,109,104
<PAYABLE-FOR-SECURITIES> 326,985
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 159,042
<TOTAL-LIABILITIES> 486,027
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 10,119,748
<SHARES-COMMON-STOCK> 101,223
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (2,020)
<ACCUMULATED-NET-GAINS> (26,379)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (468,272)
<NET-ASSETS> 9,623,077
<DIVIDEND-INCOME> 26,269
<INTEREST-INCOME> 34,925
<OTHER-INCOME> 0
<EXPENSES-NET> 45,416
<NET-INVESTMENT-INCOME> 15,778
<REALIZED-GAINS-CURRENT> (24,365)
<APPREC-INCREASE-CURRENT> (468,272)
<NET-CHANGE-FROM-OPS> (476,859)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (21,261)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 101,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 223
<NET-CHANGE-IN-ASSETS> 9,623,077
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 29,114
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 195,805
<AVERAGE-NET-ASSETS> 9,660,518
<PER-SHARE-NAV-BEGIN> 100.00
<PER-SHARE-NII> 0.16
<PER-SHARE-GAIN-APPREC> (4.88)
<PER-SHARE-DIVIDEND> (0.21)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 95.07
<EXPENSE-RATIO> 1.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
