As filed with the Securities and Exchange Commission on February 3,
1999
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. 10 X
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 14 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) 573-1557
Name and Address of Agent for Service: Copies to:
Gail A. Hanson, Esq. Joseph P. Barri, Esq.
First Data Investor Services Group, Inc. Hale and Dorr
One Exchange Place 60 State Street
53 State Street Boston, MA 02109
Boston, Massachusetts 02109
It is proposed that the filing will become effective:
____ immediately upon filing pursuant to paragraph (b)
X on February 3, 1999 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
EXPLANATORY NOTE
This Post-Effective Amendment relates only to Pictet European Equity Fund, a
series of Panorama Trust (the "Trust"). The prospectus and statement of
additional information of Pictet Global Emerging Markets Fund, Pictet
International Small Companies Fund and Pictet Eastern European Fund, series
of the Trust, are incorporated by reference to Post-Effective Amendment Nos.
8, 8 and 6, respectively, and are not affected by this Post-Effective
Amendment.
PANORAMA TRUST
FORM N-1A
CROSS REFERENCE SHEET
PURSUANT TO RULE 485 (b)
Part A.
Item No. Prospectus Caption
1. Cover Page Cover Page
2. Synopsis Expenses of the Fund
3. Condensed Financial Information Not Applicable
4. General Description of Registrant Investment Objective; Investment
Policies; Investment Techniques; Risk Factors; General Information
5. Management of the Fund Management of the Fund; Purchase of Shares;
Redemption of Shares; Exchange of Shares; Valuation of Shares
5A. Management's Discussion of Not Applicable
Fund Performance
6. Capital Stock and Other Securities Dividends, Capital Gain
Distributions and Taxes; General Information
7. Purchase of Securities Being Offered Purchase of Shares
8. Redemption or Repurchase Redemption of Shares; Exchange of Shares;
Valuation 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; General Information
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 Additional Information Concerning
Taxes; General Information
19. Purchase, Redemption and Pricing of Purchase of Shares;
Securities Being Offered Redemption
of Shares; General Information
20. Tax Status Additional Information Concerning Taxes
21. Underwriters Distributor
22. Calculation of Performance Data Performance Calculations
23. Financial Statements Not Applicable
PICTET EUROPEAN EQUITY FUND
One Exchange Place Boston, Massachusetts 02109
Prospectus February 3, 1999
Panorama Trust, a Massachusetts business trust (the "Trust"), is a no-
load, diversified, open-end management investment company which currently
offers shares of four series, one of which is Pictet European Equity Fund
(the "Fund"). The investment objective of the Fund is long-term capital
growth. The Fund attempts to achieve this objective by investing in a
diversified portfolio of European equity securities. Shares of the Fund are
subject to investment risks, including the possible loss of principal.
Shareholders redeeming shares held less than six months will be charged a 2%
redemption fee paid to the Fund to offset transaction costs of buying and
selling portfolio securities.
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 February 3, 1999, 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 2%*
Exchange Fees NONE
_________________________
* Shares held six months or more are not subject to the redemption fee.
Annual Fund Operating Expenses
(as a percentage of average net assets)
Investment Advisory Fees* 1.00%
Other Expenses 0.20%
Total Operating Expenses* 1.20%
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.
_________________________
* The investment adviser has undertaken voluntarily to waive its fees or to
reimburse expenses as may be necessary to limit total operating expenses to
1.20% of the Fund's average net assets. 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 $10,000 investment over various time
periods assuming (i) a 5% annual rate of return and (ii) redemption at the
end of each time period.
1 Year 3 Years
$122 $381
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.
INVESTMENT OBJECTIVE
The investment objective of the Fund is long-term capital growth. The
Fund pursues its objective by investing in a diversified portfolio of equity
securities of companies in, or which conduct a significant amount of their
business in, Europe. All investments entail some risks but investments in
foreign markets may involve more risk as compared to U.S. investments (see
"Risk Factors"). There is no assurance that the investment objective of the
Fund can be achieved.
INVESTMENT POLICIES
The Fund is designed for individuals and institutions who wish to
diversify their investment programs in international equities to take
advantage of opportunities in the securities markets of Europe. European
countries include Austria, Belgium, Denmark, Finland, France, Greece,
Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden,
Switzerland and the United Kingdom. The Fund normally will invest its assets
in equity securities of companies located in, or which conduct a significant
portion of their business in, Europe. The Funds portfolio structure will
reflect a strong emphasis on sector positioning and fundamental,
analytically-based stock selection. These equity securities may include
shares of other investment companies that invest primarily in European
stocks. The Fund will focus on equity securities, but may also invest up to
10% of its assets in warrants on these European equities. The Fund may
invest up to 10% of its assets in European companies which are listed on
EASDAQ (the European Association of Securities Dealers Automated Quotation
system).
The Fund will focus on equity securities, but may also invest in debt
securities of companies in Europe. Such securities will have ratings within
the four highest categories established by Moody's Investors Service
("Moody's"), Standard & Poor's Rating Service, a division of McGraw-Hill
Companies, Inc. ("S&P"), or a similar nationally recognized statistical
rating organizations ("NRSROs") or if not rated, will be of comparable
quality as determined by Pictet International Management Limited (the
"Adviser"). The NRSROs' description of these bond ratings are set forth in
the Appendix to the Statement of Additional Information.
The Fund will be managed by a specialist team and will be bench-marked
against the Morgan Stanley Capital International (MSCI) Europe Index. The
portfolio structure may vary from the benchmark, as sector allocation depends
on Europes position within the prevailing macro-economic cycle. The
portolio construction will reflect a preference for stocks offering an
attractive business franchise, strong earnings and cash-flow progression, and
proven management capability. Stock selection will, therefore, be based on
an appreciation of individual company fundamentals, or a bottom-up approach.
The investment management team will undertake primary company analysis to
complement the use of broker research information.
The Fund may hold, on a defensive basis, cash and equivalent short-term
money market instruments which are very liquid and have a residual maturity
not exceeding twelve months. In addition, the Fund may, but is not required
to, use derivative instruments to enhance the performance of the portfolio or
to hedge the portfolio. This may include the use of futures contracts,
options, warrants and other derivative contracts. These investment
techniques are described below and under the heading "Investment Objective
and Policies" in the SAI.
Portfolio Turnover. Since the Fund seeks long-term capital growth, it
will dispose of a security, regardless of the time it has been held, to
realize gains, to avoid anticipated reductions of value, or to reduce or
eliminate a position in a security which is no longer believed to offer the
potential for significant gains. Portfolio turnover is expected not to
exceed an annual rate of 100% under normal circumstances. A turnover rate of
more than 100% may reflect substantial short term trading with corresponding
brokerage costs to and taxable capital gain distributions by the Fund.
INVESTMENT TECHNIQUES
Equity Securities. The Fund invests primarily in equity securities.
Equity securities consist of exchange-traded, over-the-counter ("OTC") and
unlisted common and preferred stocks, warrants, rights, convertible debt
securities, trust certificates, limited partnership interests and equity
participations. The prices of the Fund's equity investments will change in
response to stock market movements.
Warrants and Convertible Securities. Warrants acquired by the Fund
will entitle it to buy common stock from the issuer at a specified price and
time. Warrants are subject to the same market risks as stocks, but may be
more volatile in price. The Fund's investments in warrants will not entitle
it to receive dividends or exercise voting rights and will become worthless
if the warrants cannot be profitably exercised before their expiration dates.
Convertible debt securities and preferred stock acquired by the Fund will
entitle it to acquire the issuer's stock by exchange or purchase.
Convertible securities are subject both to the credit and interest rate risks
associated with fixed income securities and to the stock market risk
associated with equity securities.
Depositary Receipts. The Fund may purchase American Depositary
Receipts ("ADRs"), American Depositary Shares ("ADSs"), European Depositary
Receipts ("EDRs"), Global Depositary Receipts ("GDRs"), and Global Depositary
Shares ("GDSs") (collectively, "Depositary Receipts"). ADRs and ADSs are
typically issued by a U.S. bank or trust company and evidence ownership of
underlying securities issued by a foreign corporation. EDRs, GDSs 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 U.S. 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. The
Board of Trustees will monitor the liquidity determinations made by the
Adviser. 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 price
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.
Derivative Transactions. The Fund is intended for investors with a
long-term investment horizon and it is the Adviser's view that any short-term
losses due to fluctuations in local currencies or stock market values should
be compensated over the long term by the capital appreciation of the
portfolio securities. Therefore, the Adviser does not intend to regularly
enter into derivative or strategic transactions for the purpose of reducing
currency and market risk. Since financial derivatives in European markets
currently must be tailor-made to the Fund's specifications, they are
extremely costly and illiquid instruments, and as such do not offer a cost-
effective way to reduce currency and market risk. Notwithstanding the
foregoing, the Adviser may, from time to time as circumstances dictate,
engage in strategic transactions as described below.
Currency Transactions. When the Fund needs to convert assets
denominated in one currency to a different currency, it normally conducts
foreign currency exchange transactions on a spot or cash basis at the
prevailing rate in the currency exchange market. In addition, the Fund may
engage in the following strategic currency transactions: (1) entering into
privately traded forward foreign currency exchange contracts, (2) purchasing
and selling exchange traded currency futures contracts and options on futures
and (3) purchasing and writing exchange traded and OTC options on currency.
Forward contracts and futures contracts create an obligation (and
corresponding right) to purchase or sell a specified currency at an agreed
price at a future date. Options on currency futures give the purchaser the
right to assume a position in the underlying futures contract. Call and put
options on currency give the purchaser the right to purchase or sell a
specified currency at a designated exercise price by exercising the option
before it expires.
The Fund will enter into currency contracts for non-speculative
purposes. For example, the Fund may use currency contracts to "lock in" the
U.S. dollar price of a security that the Fund has contracted to purchase or
sell. In addition, the Fund may use contracts involving the sale of currency
to hedge against a decline in the value of portfolio securities denominated
in that currency if the Adviser determines that there is a pattern of
correlation between the two currencies. All forward and futures contracts
involving the purchase of currency and all options written by the Fund will
be covered by maintaining cash or liquid assets in a segregated account.
The Fund's success in using currency contracts will usually depend on
the Adviser's ability to forecast exchange rate movements correctly. If
exchange rates move in an unexpected direction, the Fund may not achieve the
intended benefits of, or may realize losses on, a currency contract.
Options on Securities and Securities Indices. The Fund may purchase
put and call options on securities traded on U.S. exchanges and, to the
extent permitted by law, foreign exchanges. The Fund may purchase call
options on securities which it intends to purchase in order to limit the risk
of a substantial increase in the market price of such securities. The Fund
may purchase put options on particular securities in order to protect against
a decline in the market value of the underlying security below the exercise
price less the premium paid for the option. Put options allow the Fund to
protect unrealized gain in an appreciated security that it owns without
selling that security. Prior to expiration, most options may be sold in a
closing sale transaction. Profit or loss from the sale depends upon whether
the amount received is more or less than the premium paid plus transactions
costs.
The Fund may seek to enhance income or hedge against a decrease in its
portfolio value by writing (i.e., selling) covered call options. A call
option is "covered" if the Fund owns the optioned securities or has the right
to acquire such securities without additional consideration, the Fund
segregates assets having a value sufficient to meet its obligations under the
option, or the Fund owns an offsetting call option or other derivative
contracts.
The Fund may write covered put options in an attempt to realize
enhanced income when it is willing to purchase the underlying security at the
exercise price. A put option is "covered" if the Fund segregates liquid
assets with a value not less than the exercise price of the option or holds a
put option on the underlying security. The Fund also may purchase call
options for the purpose of acquiring the underlying securities for its
portfolio or purchase put options for hedging purposes. The Fund will not
enter into options with respect to more than 25% of its total assets.
Except 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 or policies without shareholder approval.
Temporary Investments. For temporary defensive purposes when market
conditions warrant, the Fund may invest up to 100% of its total assets in the
following: (1) 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 U.S. or
any foreign country; (2) 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; (3) finance company and corporate
commercial paper, and other short-term corporate obligations; obligations of
banks (including certificates of deposit, time deposits and bankers'
acceptances); and (4) repurchase agreements with banks and broker-dealers
with respect to such securities.
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. Investing in the securities of foreign companies
involves special risks and considerations typically not 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 generally are not
subject to uniform accounting, auditing and financial reporting standards,
and auditing practices and requirements may not be comparable with 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.
There are additional risk factors, including possible losses through
the holding of securities in domestic and foreign custodian banks and
depositories. For additional information refer to "Currency Transactions"
under "Investment Techniques" in the Prospectus and under "Foreign
Investments" in the SAI.
Year 2000 Risks. Like other mutual funds, financial and business
organizations and individuals around the world, the Fund could be adversely
affected if the computer systems used by its Adviser and other service
providers do not properly process and calculate date-related information from
and after January 1, 2000. This is commonly known as the "Year 2000
Problem." Pictet International Management Limited is taking steps that it
believes are reasonably designed to address the Year 2000 Problem with
respect to the computer systems that it uses and to obtain satisfactory
assurances that comparable steps are being taken by each of the funds' other
major service providers. At this time, however, there can be no assurance
that these steps will be sufficient to avoid any adverse impact on the funds.
In addition, the companies in which the Fund invests may have Year 2000
computer problems. The value of their securities could go down if they do
not fix their problems in time or if fixing them is very expensive.
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
(individually, the "Institution" or collectively 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 in
the Fund is $100,000; the minimum subsequent investment in 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. ("Investor
Services Group"), the Fund's transfer agent, and deliver required funds to
the Fund's transfer agent, on a timely basis. Payment in cash for Fund
shares must be made in federal funds 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 in-kind
purchases 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, the Adviser nor the
Institutions are permitted to withhold placing orders to benefit themselves
by a price change.
REDEMPTION OF SHARES
Shares of the Fund may be redeemed at any time, without cost (except as
described below), at the net asset value of the Fund next determined after
receipt by the transfer agent of the redemption request in proper order. 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. It is the responsibility of
the Adviser or Institution to transmit redemption orders promptly to the
transfer agent.
If a shareholder redeems shares of the Fund (including shares to be
exchanged), which have been held for less than six months, the Trust will
deduct from the proceeds a redemption charge of 2% of the amount of the
redemption. This amount is retained by the Fund to offset the Fund's costs
of purchasing and selling securities.
Payment of redemption proceeds ordinarily will 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 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 to redeem an account in the Fund, upon 30
days' written notice, if the net asset value of the account's shares falls
below $100,000 due to redemptions and is not increased subsequently to at
least such amount within the 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, less any applicable redemption charges.
Currently, shares of the Fund may be exchanged for shares of Pictet Eastern
European Fund, Pictet Global Emerging Markets Fund or Pictet International
Small Companies Fund. No sales charge or other fee is imposed in connection
with exchanges (except the redemption fee for shares of the Fund held less
than six months). Before requesting an exchange, shareholders should obtain
and read the prospectus of the fund 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 the applicable minimum initial and
subsequent investment requirements of the fund whose shares will be acquired.
In addition, an exchange is permitted only between accounts with identical
registrations. Shares of a fund may be acquired in an exchange only if the
shares are being offered currently and are available legally for sale in the
state of the shareholder's legal residence.
An exchange involves the redemption of shares of the Fund and the
purchase of shares of another fund. 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 Exchange is open for business and the Fund
receives an order to purchase, exchange or redeem its shares. Currently the
Exchange is closed on weekends and New Year's Day, Martin Luther King, Jr.'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. The Fund may also use fair value to price securities whose value has
changed after the closing of a foreign securities market. 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. Short term investments
that mature in 60 days or less are valued at amortized cost.
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 be reinvested
automatically in additional shares of the Fund at the net asset value next
determined after the dividend is declared unless a shareholder has requested
that the cash value of the dividend be paid in accordance with instructions
furnished by the shareholder.
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 considered carefully
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, exchange or transfer of shares of the Fund, depending upon the
tax basis of such shares and their value at the time of redemption, exchange
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 its 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 any dividends and distributions
actually received by them), and each shareholder who is subject to U.S. tax
generally will be entitled, subject to certain limitations under the Code,
(a) to credit a proportionate amount of such taxes against U.S. Federal
income tax liabilities, or (b) to deduct such proportionate amount from U.S.
income if deductions are itemized.
Miscellaneous. Dividends declared in October, November or December
payable to shareholders of record on a specified date in such a month will be
deemed to have been received by the shareholders 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 generally will 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 the Fund's distributions.
The Fund will be required in certain cases to withhold and remit to the
United States 31% of taxable dividends (including capital gain distributions)
or gross proceeds realized upon a redemption, exchange or other sale of
shares paid to shareholders who are subject to "backup withholding" because
they have failed to provide a correct, certified taxpayer identification
number in the manner required, have received IRS notice of their failure to
report payments of taxable interest or dividends properly in their tax
returns or have failed to certify to the Fund that they are not subject to
backup withholding or that they are "exempt recipients" when required to do
so.
STATE AND LOCAL TAXES
Shareholders also may 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 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 1.00% of the average daily net assets of the Fund. The
Adviser has undertaken voluntarily to waive its fees or to reimburse expenses
as may be necessary to limit total operating expenses to 1.20% of the Fund's
average net assets.
The Adviser is an affiliate of Pictet & Cie (the "Bank"), a Swiss
private bank, which was founded in 1805. As of September 30, 1998, the Bank
managed in excess of $56 billion for institutional and private clients. The
Bank is owned by eight 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 $6 billion for more than 100 institutional
clients.
The Fund is managed by a team comprised of the following individuals:
Scott Jaffray is a Director with specific responsibility for the
European team and their investments, focusing on France and the UK. Prior to
joining Pictet in 1996, Scott spent six years heading the European equity
team at Norwich Union Investment Management. Before this, he spent five
years working at Royal Insurance Asset Management where he became portfolio
manager of European equities.
Matthew Tee is a Senior Investment Manager on the European team, with a
particular focus on Holland, Germany and Italy. Prior to joining Pictet in
1996, Matthew worked at Norwich Union Investment Management for eight years,
first as a currency analyst and then for over five years with Scott on the
European team.
Stephen Burrows is a Senior Investment Manager on the European team,
with a particular focus on Spain, Belgium and Switzerland. Prior to joining
Pictet in 1997, Stephen worked as an Investment Manager on the European
equity team at Norwich Union Investment Management for two years, working
alongside Scott and Matthew. Before this, he worked for eight years at
Rothschild Asset Management where he became an Investment Manager for
European equities and a member of the Global Asset Allocation Committee.
ADMINISTRATIVE SERVICES
Investor Services Group serves as the Trust's administrator, accounting
agent and transfer agent and in these capacities supervises the Trust's day-
to-day operations, other than management of the Fund's investments. Investor
Services Group is a wholly owned subsidiary of First Data Corporation. For
its services as accounting agent, Investor Services Group 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
Investor Services Group is entitled to receive $220,000 per annum from the
Trust allocated among the Fund and other series of the Trust based on average
daily net assets. In addition, Investor Services Group is paid separate
compensation for its services as transfer agent.
Investor Services Group is located at One Exchange Place, Boston,
Massachusetts 02109.
OTHER SERVICES
Distributor. First Data 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 4400
Computer Drive, Westborough, Massachusetts 01581.
Custodian. Brown Brothers Harriman & Co., located at 40 Water Street,
Boston, Massachusetts 02109, serves as the custodian of the Trust's assets.
Independent Accountants. PricewaterhouseCoopers LLP, located at One
Post Office Square, Boston, Massachusetts 02109, serves as independent
accountant for the Trust and audits the Trust's financial statements
annually.
Counsel. Hale and Dorr LLP serves as counsel to the Trust.
EXPENSES
The Fund bears its own operating expenses including: taxes; interest;
miscellaneous fees (including fees paid to Board members); Commission fees;
state Blue Sky fees; costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and for
distribution to existing shareholders; investment advisory fees;
administration fees; charges of the custodian, any sub-custodians 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.
The Adviser has undertaken voluntarily not to impose its fees or a
portion thereof or to make any other arrangements necessary to limit total
ordinary operating expenses of the Fund to 1.20% 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 with 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 with data prepared by Lipper Analytical Services, Inc.,
Morningstar, Micropal 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. 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.
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 four 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. Shares of each series are entitled to vote
separately to approve investment advisory agreements or changes in
fundamental investment policies, but vote together on the election of
Trustees or selection of independent accountants. Under Massachusetts law
and the Declaration of Trust, the Trust is not required and currently does
not intend to hold annual meetings of shareholders for the election of
Trustees except as required under the 1940 Act. Meetings of shareholders for
the purpose of electing Trustees normally will not be held unless less than a
majority of the Trustees holding office has 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, the
Trust will assist shareholders who meet certain criteria 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.
REPORTS
Shareholders receive unaudited semi-annual financial statements and
audited annual financial statements.
PICTET EUROPEAN EQUITY FUND
One Exchange Place
Boston, Massachusetts 02109
Prospectus
Dated February 3, 1999
Investment Adviser Administrator and Transfer Agent
Pictet International Management Limited First Data Investor Services Group,
Inc.
Cutlers Gardens One Exchange Place
5 Devonshire Square 53 State Street
London, United Kingdom Boston, MA 02109
EC2M 4WB
Distributor
First Data Distributors, Inc.
4400 Computer Drive
Westborough, MA 01581
Table of Contents
Page Page
Expenses of the Fund 2 Exchange of Shares .. 8
Investment Objective 3 Valuation of Shares 9
Investment Policies 3 Dividends, Capital Gain Distributions and
Taxes 9
Investment Techniques 4 Management of the Fund 11
Risk Factors 6 Performance Calculations 13
Purchase of Shares 7 General Information 13
Redemption of Shares 8
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 EUROPEAN EQUITY FUND
STATEMENT OF ADDITIONAL INFORMATION
February 3, 1999
This Statement of Additional Information is not a prospectus but should
be read in conjunction with Panorama Trust's (the "Trust") Prospectus for
Pictet European Equity Fund (the "Fund") dated February 3, 1999 (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 10
Redemption of Shares 11
Investment Limitations 11
Management of the Fund 13
Investment Advisory and Other Services 15
Distributor 15
Portfolio Transactions 15
Additional Information Concerning Taxes 16
Performance Calculations 19
General Information 20
Appendix - Description of Ratings and U.S. Government Securities A-1
INVESTMENT OBJECTIVE AND POLICIES
The following policies supplement the investment objective and policies
set forth in the Prospectus:
Depositary Receipts. The Fund may purchase American Depositary
Receipts ("ADRs"), American Depositary Shares ("ADSs"), European Depositary
Receipts ("EDRs"), Global Depositary Receipts ("GDRs") and Global Depositary
Shares ("GDSs"), (collectively, "Depositary Receipts"). ADRs and ADSs
typically are issued by a U.S. bank or trust company to evidence ownership of
underlying securities issued by a foreign corporation. EDRs and GDRs
typically are 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 involved directly in the creation of the program. Although
regulatory requirements with respect to sponsored and unsponsored programs
generally are 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.
Convertible Securities. The Fund may purchase convertible
securities. Convertible securities are fixed-income securities that may
be converted at either a stated price or stated rate into underlying shares
of common stock. Convertible securities have general characteristics similar
to both fixed-income and equity securities. Although to a lesser extent than
with fixed-income securities generally, the market value of convertible
securities tends to decline as interest rates increase and, conversely, tends
to increase as interest rates decline. In addition, because of the
conversion feature, the market value of convertible securities tends to vary
with fluctuations in the market value of the underlying common stocks and,
therefore, also will react to variations in the general market for equity
securities. A unique feature of convertible securities is that as the market
price of the underlying common stock declines, convertible securities tend to
trade increasingly on a yield basis, and so may not experience market value
declines to the same extent as the underlying common stock. When the market
price of the underlying common stock increases, the prices of the convertible
securities tend to rise as a reflection of the value of the underlying common
stock. While no securities investments are without risk, investments in
convertible securities generally entail less risk than investments in common
stock of the same issuer.
As fixed-income securities, convertible securities are investments that
provide for a stable stream of income with generally higher yields than
common stocks. Of course, like all fixed-income securities, there can be no
assurance of current income because the issuers of the convertible securities
may default on their obligations. Convertible securities, however, generally
offer lower interest or dividend yields than non-convertible securities of
similar quality because of the potential for capital appreciation. A
convertible security, in addition to providing fixed income, offers the
potential for capital appreciation through the conversion feature, which
enables the holder to benefit from increases in the market price of the
underlying common stock. There can be no assurance of capital appreciation,
however, because securities prices fluctuate.
Convertible securities generally are subordinated to other similar but
non-convertible securities of the same issuer, although convertible bonds, as
corporate debt obligations, enjoy seniority in the right of payment to all
equity securities, and convertible preferred stock is senior to common stock,
of the same issuer. Because of the subordination feature, however,
convertible securities typically have lower ratings than similar non-
convertible securities.
When-Issued and Forward Commitment Transactions. The Fund may purchase
when-issued securities and enter into other forward commitments to purchase
or sell securities. The value of securities purchased on a when-issued or
forward commitment basis may decline between the purchase date and the
settlement date.
Warrants. The Fund may purchase warrants. Because a warrant
does not carry with it the right to dividends or voting rights with respect
to the securities that the warrant holder is entitled to purchase, and
because it does not represent any rights to the assets of the issuer, a
warrant may be considered more speculative than certain other types of
investments. In addition, the value of a warrant does not necessarily change
with the value of the underlying securities and a warrant ceases to have
value if it is not exercised prior to its expiration date.
Preferred Stock. The Fund may purchase preferred stocks, which,
like debt obligations, are generally fixed-income securities.
Shareholders of preferred stocks normally have the right to receive dividends
at a fixed rate when and as declared by the issuer's board of directors, but
do not participate in other amounts available for distribution by the issuing
corporation. Dividends on the preferred stock may be cumulative, and all
cumulative dividends usually must be paid prior to common shareholders
receiving any dividends. Preferred stock dividends must be paid before
common stock dividends and, for that reason, preferred stocks generally
entail less risk than common stocks. Upon liquidation, preferred stocks are
entitled to a specified liquidation preference, which is generally the same
as the par or stated value, and are senior in right of payment to common
stock. Preferred stocks are, however, equity securities in the sense that
they do not represent a liability of the issuer and, therefore, do not offer
as great a degree of protection of capital or assurance of continued income
as investments in corporate debt securities. In addition, preferred stocks
are subordinated in right of payment to all debt obligations and creditors of
the issuer, and convertible preferred stocks may be subordinated to other
preferred stock of the same issuer.
Foreign Investments. The Fund may purchase international
investments, which are subject to a variety of risks of loss beyond the risks
ordinarily associated with investing in the U.S. and other mature securities
markets. The discussion of risks set forth below refers to the better
understood risks of investing in less developed markets but is not intended,
and should not be assumed, to be a complete list of all possible risks.
Although the Board of Trustees, the Adviser, and the Custodian and sub-
custodians each review and attempt to minimize the risks of which they are
aware, and even if neither the Trustees nor any service provider to the Fund
has failed to fulfill its duties to the Fund, it is entirely possible that
the Fund may lose some or all of its investment in one or more securities in
an emerging or politically unstable market. An example of such a loss may
involve a fraud in a foreign market not reasonably preventable by the service
providers, notwithstanding oversight by the Trustees and procedures of each
service provider generally considered to be adequate to prevent such a fraud.
In any such case, it is likely that the Fund would not be reimbursed for its
loss.
Investing in foreign companies involves certain special considerations
which typically are not associated with investing in U.S. companies. Because
the stocks of foreign companies frequently are denominated in foreign
currencies, and because the Fund may hold uninvested reserves in bank
deposits in foreign currencies temporarily, 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.
Because foreign companies generally are not subject to uniform
accounting, auditing and financial reporting standards and may have policies
that are not comparable with those of domestic companies, there may be less
information available about certain foreign companies than about domestic
companies. Securities of some foreign companies generally are less liquid and
more volatile than securities of comparable domestic companies. There
generally is 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 generally are 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 services relating
to investment in foreign securities markets generally are 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 borne exclusively by the Fund.
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 any company
or 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 its pro rata portion, along with other
shareholders, 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 price 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.
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 does not necessarily
mean that such investments are illiquid.
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 affect adversely 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. The Board
monitors the liquidity determinations made by the Adviser. In addition, the
value of securities for which no market quotations are readily available
(including restricted securities) is determined by the Adviser, under the
Boards supervision, after considering all relevant information. All
liquidity and valuation procedures are reviewed periodically to ensure their
continued appropriateness and adequacy in light of changing circumstances.
Hedging and Risk Management Practices. In order to hedge against
foreign currency exchange rate risks, the Fund may enter into forward foreign
currency exchange contracts ("forward contracts") and foreign currency
futures contracts, as well as purchase put or call options on foreign
currencies, as described below. The Fund also may conduct its foreign
currency exchange transactions on a spot (i.e., cash) basis at the spot rate
prevailing in the foreign currency exchange market.
The Fund also may purchase other types of options and futures and may,
in the future, write covered options, as described below and in the
Prospectus.
Forward Contracts. The Fund may enter into 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 will
maintain in a segregated account cash or liquid assets 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 presently are not regulated by the Commodity Futures Trading
Commission ("CFTC"), the CFTC may regulate them in the future, 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.
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 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.
Futures Contracts and Options on Futures Contracts. To hedge against
movements in interest rates, securities prices or currency exchange rates,
the Fund may purchase and sell various kinds of futures contracts and options
on futures contracts. The Fund also may enter into closing purchase and sale
transactions with respect to any such contracts and options. Futures
contracts may be based on various securities (such as U.S. Government
securities), securities indices, foreign currencies and other financial
instruments and indices.
The Fund will rely on the exclusion from the definition of the term
"commodity pool operator" provided by CFTC Rule 4.5. The Fund may use
futures contracts and related options for bona fide hedging purposes within
the meaning of the CFTC regulations or may enter into non-hedging
transactions if the aggregate initial margin and premiums required to
establish such positions do not exceed 5% of the Fund's net assets (after
taking into account unrealized profits and unrealized losses on any such
positions). For an option that is in-the-money at the time of purchase, the
in-the-money amount might be excluded from such 5%.
The Fund may attempt to determine whether the price fluctuations in the
futures contracts and options on futures used for hedging purposes are
substantially related to price fluctuations in securities held by the Fund or
which it expects to purchase. All futures contracts entered into by the Fund
are traded on U.S. exchanges or boards of trade licensed and regulated by the
CFTC or on foreign exchanges.
Positions taken in the futures markets are not normally held to
maturity but are instead liquidated through offsetting or "closing" purchase
or sale transactions, which may result in a profit or a loss. While the
Fund's futures contracts on securities or currencies will usually be
liquidated in this manner, the Fund may make or take delivery of the
underlying securities or currencies whenever it appears economically
advantageous. A clearing corporation associated with the exchange on which
futures on securities or currencies are traded guarantees that, if still
open, the sale or purchase will be performed on the settlement date.
By using futures contracts to hedge its positions, the Fund would seek
to establish with more certainty then would otherwise be possible the
effective price, rate of return or currency exchange rate on portfolio
securities or securities that the Fund proposes to acquire. For example,
when interest rates are rising or securities prices are falling, the Fund
could seek, through the sale of futures contracts, to offset a decline in the
value of its current portfolio securities. When rates are falling or prices
are rising, the Fund, through the purchase of futures contracts, could
attempt to secure better rates or prices than might later be available in the
market with respect to anticipated purchases. Similarly, the Fund could sell
futures contracts on a specified currency to protect against a decline in the
value of such currency and its portfolio securities which are denominated in
such currency. The Fund could purchase futures contracts on a foreign
currency to fix the price in U.S. dollars of a security denominated in such
currency that the Fund has acquired or expects to acquire. Loss from
investing in futures transactions by the Fund is potentially unlimited.
As part of its hedging strategy, the Fund also may enter into other
types of financial futures contracts if, in the opinion of the Adviser, there
is a sufficient degree of correlation between price trends for the Fund's
portfolio securities and such futures contracts. Although under some
circumstances prices of securities in the Fund's portfolio may be more or
less volatile than prices of such futures contracts, the Adviser may attempt
to estimate the extent of this difference in volatility based on historical
patterns and to compensate for it by having the Fund enter into a greater or
lesser number of futures contracts or by attempting to achieve only a partial
hedge against price changes affecting the Fund's securities portfolio. When
hedging of this character is successful, any depreciation in the value of
portfolio securities can be substantially offset by appreciation in the value
of the futures position. However, any unanticipated appreciation in the
value of the Fund's portfolio securities could be offset substantially by a
decline in the value of the futures position.
The acquisition of put and call options on futures contracts would give
the Fund the right (but not the obligation), for a specified price, to sell
or purchase the underlying futures contract at any time during the option
period. Purchasing an option on a futures contract would give the Fund the
benefit of the futures position if prices move in a favorable direction, and
limits its risk of loss, in the event of an unfavorable price movement, to
the loss of the premium and transaction costs.
The Fund may terminate its position in an option contract by selling an
offsetting option on the same series. There is no guarantee that such a
closing transaction can be effected. The Fund's ability to establish and
close out positions on such options is dependent upon a liquid market.
The Fund would engage in transactions in futures contracts and related
options only to the extent such transactions are consistent with the
requirements of the Internal Revenue Code of 1986, as amended, for
maintaining their qualification as a regulated investment company for Federal
income tax purposes.
Options on Securities, Securities Indices and Currencies. The Fund may
purchase put and call options on securities in which it has invested, on
foreign currencies represented in its portfolio and on any securities index
based in whole or in part on securities in which the Fund may invest. The
Fund also may enter into closing sales transactions in order to realize gains
or minimize losses on options it has purchased.
The Fund normally could purchase call options in anticipation of an
increase in the market value of securities of the type in which it may invest
or a positive change in the currency in which such securities are
denominated. The purchase of a call option would entitle the Fund, in return
for the premium paid, to purchase specified securities or a specified amount
of a foreign currency at a specified price during the option period.
The Fund may purchase and sell options traded on U.S. and foreign
exchanges. Although the Fund would generally purchase only those options for
which there appears to be an active secondary market, there can be no
assurance that a liquid secondary market on an exchange will exist for any
particular option or at any particular time. For some options, no secondary
market on an exchange may exist. In such event, it might not be possible to
effect closing transactions in particular options, with the result that the
Fund would have to exercise its options in order to realize any profit and
would incur transaction costs upon the purchase or sale of the underlying
securities.
Secondary markets on an exchange may not exist or may not be liquid for
a variety of reasons including: (i) insufficient trading interest in certain
options; (ii) restrictions on opening transactions or closing transactions
imposed by an exchange; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options; (iv) unusual or unforeseen circumstances which interrupt normal
operations on an exchange; (v) inadequate facilities of an exchange or the
Options Clearing Corporation to handle current trading volume at all times;
or (vi) discontinuance in the future by one or more exchanges for economic or
other reasons, of trading of options (or of a particular class or series of
options), in which event the secondary market on that exchange (or in that
class or series of options) would cease to exist, although outstanding
options on that exchange that had been issued by the Options Clearing
Corporation as a result of trades on that exchange would continue to be
exercisable in accordance with their terms.
The Fund may write (i.e., sell) covered put and call options on
securities, securities indices and currencies in which it may invest. A
covered call option would involve the Fund's giving another party, in return
for a premium, the right to buy specified securities owned by the Fund at a
specified future date and price set at the time of the contract. A covered
call option serves as a partial hedge against the price decline of the
underlying security. However, by writing a covered call option, the Fund
would give up the opportunity, while the option is in effect, to realize gain
from any price increase (above the option exercise price) in the underlying
security. In addition, the Fund's ability to sell the underlying security
would be limited while the option was in effect unless the Fund effected a
closing purchase transaction.
The Fund also may write covered put options that give the holder of the
option the right to sell the underlying security to the Fund at the stated
exercise price. The Fund would receive a premium for writing a put option
but would be obligated for as long as the option was outstanding to purchase
the underlying security at a price that may be higher than the market value
of that security at the time of exercise. In order to "cover" put options it
has written, the Fund would segregate liquid assets with at least the value
of the exercise price of the put options. The Fund would not write put
options if the aggregate value of the obligations underlying the put options
exceeds 25% of the Fund's total assets.
There is no assurance that higher than anticipated trading activity or
other unforeseen events might not, at times, render certain of the facilities
of the Options Clearing Corporation inadequate, and result in the institution
by an exchange of special procedures that may interfere with the timely
execution of the Fund's orders.
Correlation Risk. While transactions in forward contracts, options,
futures contracts and options on futures (i.e., "hedging positions") 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.
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). The Fund generally
would 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 enter into repurchase agreements only 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 also would 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 borrowing funds temporarily 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 an amount equal to 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.
PURCHASE OF SHARES
The purchase price of shares of the Fund is the net asset value next
determined after receipt of the purchase order in proper 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 the Fund also may 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 acceptable otherwise 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 Securities and Exchange Commission (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.
If a shareholder redeems shares of the Fund which have been held less
than six months (including shares to be exchanged), the Fund will deduct from
the proceeds a redemption charge of 2% of the amount of the redemption. This
amount is retained by the Fund to offset the Fund's costs of purchasing and
selling securities. 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:
enter into commodities or commodity contracts, other than financial and
currency futures contracts, options on futures contracts, options on
securities, indices and currency, forward contracts, swaps and other
financial or currency derivative contracts;
(2) purchase or sell real estate (including real estate limited partnership
interests), 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,
such as bankers acceptances and commercial paper, and selling securities on a
when issued, delayed settlement or forward delivery basis) which are publicly
or privately distributed, (ii) by entering into repurchase agreements and
(iii) through the lending of its portfolio securities;
(4) purchase on margin or sell short except as permitted by the 1940 Act;
(5) 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;
(6) underwrite the securities of other issuers, except to the extent that
the purchase and subsequent disposition of securities may be deemed
underwriting;
(7) 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; other than
obligations issued or guaranteed by the U.S. Government, its agencies,
enterprises or instrumentalities.
In addition, as non-fundamental policies, the Fund will not invest more
than 15% of its net assets, at the time of purchase, in illiquid securities,
including repurchase agreements which have maturities of more than seven
days; the Fund will not make additional investments while borrowings
representing more than 5% of the Fund's total assets are outstanding; and the
Fund will not invest for the purpose of exercising control over management of
any company.
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 5 above must be reduced to meet such limitation within the period
required by the 1940 Act (currently three days, not including Sundays and
holidays).
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.
Name, Address and Position
Age
Principal Occupation During Past Five
Years
Jean G. Pilloud*, President
and Chairman
Pictet & Cie
29, Boulevard Georges-Favon
1204 Geneva
Switzerland
54
Senior Manager of Pictet & Cie.
Jean-Franois Demole* ,
Trustee
Pictet & Cie
29, Boulevard Georges-Favon
1204 Geneva
Switzerland
36
Partner of Pictet & Cie
Jeffrey P. Somers,* Trustee
Morse, Barnes-Brown &
Pendleton
1601 Trapelo Road
Reservoir Place
Waltham, MA 02154
55
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
4
Chairman of the Board of Wand
Partners, Inc.; Director, PennCorp
Financial Group, AMRESCO Inc., and
Nestor, Inc.
David J. Callard, Trustee
Wand Partners, Inc.
630 Fifth Avenue, Suite 2435
New York, NY 10111
6
0
President, Wand Partners, Inc.;
Director, Chartwell Re Corporation,
and Information Management Associates,
Inc.
Gail A. Hanson, Secretary
First Data Investor Services
Group, Inc.
One Exchange Place
Boston, MA 02109
56
Counsel, First Data Investor Services
Group, Inc. Ms. Hanson has been
employed by First Data Investor
Services Group, Inc. since September
1994. Previously, she was employed as
an Associate at Bingham, Dana & Gould
prior to 1994.
William J. Baltrus, Treasurer
31
Director Client Services at First Data
Investor Services Group, Inc.
(financial services) from September
1998 to present. Manager Corporate &
Blue Sky Compliance at First Data
Investor Services Group, Inc.,
formerly FPS Services, Inc. (financial
services) from August 1994 to
September 1998. Corporate Compliance
Administrator at FPS Services, Inc.
(financial services) from April 1994
to August 1994. Account Manager at
FPS Services, Inc. (financial
services) from July 1991 to April
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 compensation paid to the Trustees
for the Trust for the fiscal year ended December 31, 1998. Compensation is
not paid to any officers of the Trust by the Fund. Further, the Trust does
not provide any pension or retirement benefits to its Trustees and officers.
NAME OF PERSON AND
POSITION
AGGREGATE
COMPENSATION
FROM THE TRUST
TOTAL
COMPENSATION
FROM THE TRUST
AND COMPLEX PAID
TO TRUSTEES
David J. Callard
Trustee
$10,500
$10,500
Jean-Franois Demole
Trustee
$0
$0
Jean G. Pilloud
Trustee
$0
$0
Bruce W. Schnizter
Trustee
$7,500
$7,500
Jeffrey P. Somers
Trustee
$9,500
$9,500
INVESTMENT ADVISORY AND OTHER SERVICES
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.
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 1.00% of the Fund's average daily net assets. Currently, the
Adviser voluntarily has agreed not to impose its fees and to reimburse
expenses as may be necessary to assure that the net operating expenses of the
Fund will not exceed 1.20% of the Fund's average daily net assets. The
Adviser, located at Cutlers Garden, 5 Devonshire Square, London, England EC2M
4WB, is a 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
eight limited partners, each of whom is also a partner of Pictet & Cie, a
Swiss private bank founded in 1805.
Administrative services are provided to the Trust by First Data
Investor Services Group, Inc. ("Investor Services Group") pursuant to an
administration agreement. See "Administrative Services" in the Prospectus
for information concerning the substantive provisions of the administration
agreement.
Brown Brothers Harriman & Co., located at 40 Water Street, Boston,
Massachusetts 02109, serves as the custodian of the Trust's assets.
PricewaterhouseCoopers LLP, located at One Post Office Square, Boston,
Massachusetts 02109, serves as independent accountants for the Trust and
audits its financial statements annually.
DISTRIBUTOR
Shares of the Fund are distributed continuously and are offered without
a sales charge by First Data Distributors, Inc. (the "Distributor") pursuant
to a distribution agreement between the Trust and the Distributor. The
Distributor is a wholly owned subsidiary of Investor Services Group.
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 Adviser. 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.
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 by regulation may exclude from
qualifying income foreign currency gains which are not related directly 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) and (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 and appropriately designated by the Fund 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 distributions 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 redemption or other 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 distributions
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 and short-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 dividends and distributions 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 operating as investment companies, also may
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 actually is 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 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, absent an election that
may be available in some cases, generally is 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.
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 relates 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 also may 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 tax
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 generally will avoid both income and the
Federal excise tax on undistributed income and gains (see discussion under
"Dividends, Capital Gain Distributions and Taxes" in the Prospectus). The
amounts of any income dividends or capital gain 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 be held personally liable as partners for its obligations under
certain circumstances. However, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to
circumstances in which both inadequate insurance exists and the Trust itself
is unable to meet its obligations.
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:
None
(b) Exhibits:
(1)(a) Declaration of Trust dated May 23, 1995 is incorporated by
reference to Post-Effective No. 3 as filed with the Securities and
Exchange Commission January 2, 1996 ("Post-Effective Amendment No. 3").
(1)(b) Amendment to the Declaration of Trust dated June 8, 1995 is
incorporated by reference to Post-Effective Amendment No. 3.
(1)(c) Amendment to the Declaration of Trust dated December 28, 1995
is incorporated by reference to Post-Effective Amendment No. 3.
(1)(d) Amendment to the Declaration of Trust dated March 1, 1996 is
incorporated by reference to Post-Effective Amendment No. 4 as filed with
the Securities and Exchange Commission April 1, 1996 ("Post-Effective
Amendment No. 4").
(1)(e) Amendment to the Declaration of Trust dated April 17, 1997 is
incorporated by reference to Post-Effective Amendment No. 8 as filed with
the Securities and Exchange Commission April 30, 1998 (Post-Effective
Amendment No. 8).
(1)(f) Amendment to the Declaration of Trust dated April 17, 1997 is
filed herein as Exhibit 1(f).
(2) By-Laws dated May 23, 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 dated October 3, 1995 with respect to
Pictet Global Emerging Markets Fund is incorporated by reference to Post-
Effective Amendment No. 3
(5)(b) Supplement dated January 2, 1996 to the Investment Advisory
Agreement with respect to Pictet International Small Companies Fund is
incorporated by reference to Post-Effective Amendment No. 4.
(5)(c) Supplement dated March 12, 1997 to the Investment Advisory
Agreement with respect to Pictet Eastern European Fund is incorporated by
reference to Post-Effective Amendment No. 8.
(5)(d) Supplement to the Investment Advisory Agreement with respect
to Pictet European Equity Fund is filed herein as Exhibit 5(d).
(6)(a) Distribution Agreement between Registrant and 440 Financial
Distributors, Inc. (now known as First Data Distributors, Inc.) dated
October 3, 1995 with respect to Pictet Global Emerging Markets Fund is
incorporated by reference to Post-Effective Amendment No. 3.
(6)(b) Supplement dated January 2, 1996 to the Distribution Agreement
with respect to Pictet International Small Companies Fund is incorporated
by reference to Post-Effective Amendment No. 4.
(6)(c) Supplement dated March 12, 1997 to the Distribution Agreement
with respect to Pictet Eastern European Fund is incorporated by reference
to Post-Effective Amendment No. 8.
(6)(d) Supplement to the Distribution Agreement with respect to
Pictet European Equity Fund is filed herein as Exhibit 6(d).
(7) Not Applicable.
(8)(a) Custodian Agreement between Registrant and Brown Brothers
Harriman & Co. dated September 15, 1995 with respect to Pictet Global
Emerging Markets Fund is incorporated by reference to Post-Effective
Amendment No. 3.
(8)(b) Amendment to Custodian Agreement dated January 10, 1996 with
respect to Pictet International Small Companies Fund is incorporated by
reference to Post-Effective Amendment No. 4
(8)(c) Amendment to Custodian Agreement dated September 13, 1996 is
incorporated by reference to Post-Effective Amendment No. 6 filed with the
Securities and Exchange Commission February 17, 1997.
(8)(d) Amendment to Custodian Agreement dated September 16, 1997 with
respect to Pictet Eastern European Fund is incorporated by reference to
Post-Effective Amendment No. 8.
(8)(e) Form of Amendment to Custodian Agreement with respect to
Pictet European Equity Fund is filed herein as Exhibit 8(e).
(9)(a) Transfer Agency and Services Agreement between Registrant and
The Shareholder Services Group, Inc. (now known as First Data Investor
Services Group, Inc.) dated October 3, 1995 with respect to Pictet Global
Emerging Markets Fund is incorporated by reference to Post-Effective
Amendment No. 3.
(9)(b) Supplement dated January 2, 1996 to the Transfer Agency and
Services Agreement with respect to Pictet International Small Companies
Fund is incorporated by reference to Post-Effective Amendment No. 4.
(9)(c) Supplement dated March 12, 1997 to the Transfer Agency and
Services Agreement with respect to Pictet Eastern European Fund is
incorporated by reference to Post-Effective Amendment No. 8.
(9)(d) Supplement to the Transfer Agency and Services Agreement with
respect to Pictet European Equity Fund is filed herein as Exhibit
9(d).
(9)(e) Administration Agreement dated October 3, 1995 between
Registrant and The Shareholder Services Group, Inc. (now known as First
Data Investors Services Group, Inc.) with respect to Pictet Global
Emerging Markets Fund is incorporated by reference to Post-Effective
Amendment No. 3.
(9)(f) Supplement dated January 2, 1996 to the Administration
Agreement dated October 3, 1995 with respect to Pictet International Small
Companies Fund is incorporated by reference to Post-Effective Amendment
No. 4.
(9)(g) Supplement dated March 12, 1997 to the Administration
Agreement with respect to Pictet Eastern European Fund is incorporated by
reference to Post-Effective Amendment No. 8.
(9)(h) Supplement to the Administration Agreement with respect to
Pictet European Equity Fund is filed herein as Exhibit 9(h).
(10) Not Applicable.
(11) Not Applicable.
(12) Not Applicable.
(13)(a) Purchase Agreement dated October 2, 1995 with respect to
Pictet Global Emerging Markets Fund is incorporated by reference to
Post-Effective Amendment No. 3.
(13)(b) Purchase Agreement dated February 1, 1996 with respect
to Pictet International Small Companies is incorporated by
reference to Post-Effective Amendment No. 4.
(13)(c) Purchase Agreement dated March 12, 1997 with respect to
Pictet Eastern European Fund is incorporated by reference to Post-
Effective Amendment No. 8.
(14) Not Applicable.
(15) Not Applicable.
(16) Not Applicable.
(17) Not Applicable.
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
Title of Series
Record Holders as of December 31,
1998
Pictet International Small Companies
Fund
7
Pictet Global Emerging Markets Fund
33
Pictet Eastern European Fund
20
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, as amended, 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, as amended, 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, as amended, 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, as amended, 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 therefore, is 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 eight 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, as amended (SEC File No. 801-15143).
Item 29. Principal Underwriters
(a) In addition to Panorama Trust, First Data Distributors, Inc. (the
Distributor) currently acts as distributor for BT Insurance Funds Trust,
The Galaxy Fund, The Galaxy VIP Fund, Galaxy Fund II, First Choice Funds
Trust, Wilshire Target Funds, Inc., Potomac Funds, Undiscovered Managers
Funds, LKCM Funds, ABN-AMRO Funds (f/k/a Rembrandt Funds), IBJ Funds
Trust, the ICM Series Trust, Alleghany Funds, Forward Funds, Light Index
Funds, Inc., WorldWide Index Funds, Weiss, Peck & Greer Funds Trust,
Weiss, Peck & Greer International Fund, WPG Growth Fund, WPG Growth and
Income Fund, WPG Tudor Fund, RWB/WPG U.S. Large Stock Fund and Tomorrow
Funds Retirement Trust. The Distributor is registered with the Securities
and Exchange Commission as a broker-dealer and is a member of the National
Association of Securities Dealers. The Distributor is a wholly-owned
subsidiary of First Data Corporation and is located at 4400 Computer
Drive, Westborough, MA 01581.
(b) The information required by this Item 29 (b) with respect to each
director, officer, or partner of First Data Distributors, Inc. is
incorporated by reference to Schedule A of Form BD filed by First Data
Distributors, Inc. with the Securities and Exchange Commission pursuant to
the Securities Act of 1934, as amended (File No. 8-45467).
(c) Not Applicable.
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, as
amended, and the rules thereunder will be maintained at the offices of:
Pictet International Management Limited
Cutlers Gardens
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
53 State Street
Boston, Massachusetts 02109
(records relating to its functions as administrator)
First Data Investor Services Group, Inc.
4400 Computer Drive
Westboro, Massachusetts 01581-5120
(records relating to its functions as transfer agent)
First Data Distributors, Inc.
4400 Computer Drive
Westboro, Massachusetts 01581-5120
(records relating to its functions as distributor)
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
(a) Not Applicable
(b) Not Applicable due to Rule changes.
(c) The Registrant will furnish each person to whom a prospectus is
delivered with a copy of the Registrants latest annual report to
shareholders, upon request and without charge.
(d) Registrant hereby undertakes to call a meeting of its shareholders
for the purpose of voting upon the question of removal of a trustee or
trustees of Registrant when requested in writing to do so by the holders
of at least 10% of Registrants outstanding shares. Registrant undertakes
further, in connection with the meeting, to comply with the provisions of
Section 16(c) of the 1940 Act, as amended, relating to communications with
the shareholders of certain common-law trusts.
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.10 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 3rd day of February 1999.
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. 10 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 February 3,
1999
(Jean G. Pilloud) and Trustee
(principal executive officer)
/s/William J. Baltrus Treasurer February 3, 1999
(William J. Baltrus) (principal financial and
accounting officer)
/s/Jean- Franois Demole Trustee February 3, 1999
(Jean-Franois Demole)
/s/Jeffrey P. Somers, Esq. Trustee February 3,
1999
(Jeffrey P. Somers, Esq.)
/s/Bruce W. Schnitzer Trustee February 3,
1999
(Bruce W. Schnitzer)
/s/David J. Callard Trustee February 3,
1999
(David J. Callard)
EXHIBIT INDEX
Exhibit
Number Description
1(f) Amendment to the Declaration of Trust dated January 27, 1999.
5(d) Supplement dated February 3, 1999 to the Investment Advisory
Agreement with respect to Pictet European Equity Fund.
6(d) Supplement dated February 3, 1999 to the Distribution Agreement with
respect to Pictet European Equity Fund.
8(e) Form of Amendment to Custodian Agreement dated September 16, 1997
with respect to Pictet European Equity Fund.
9(d) Supplement dated February 3, 1999 to the Transfer Agency and
Services Agreement with respect to Pictet European Equity Fund.
9(h) Supplement dated February 3, 1999 to the Administration Agreement
with respect to Pictet European Equity Fund.
Exhibit 1(f)
PANORAMA TRUST
ESTABLISHMENT AND DESIGNATION OF ADDITIONAL SERIES
The undersigned, being all the Trustees of Panorama
Trust (the Trust), hereby certify that pursuant to Article
V, Section 5.11 of the Trusts Declaration of Trust (the
Declaration of Trust) dated May 23, 1995, the following
votes were duly adopted by the majority of the Trustees of
the Trust at a Board meeting held on December 15, 1998:
VOTED: That the Declaration of Trust dated May 23, 1995,
as amended to date, is hereby further amended so as to
establish and designate a new series of the Trust, such
series to be known as Pictet European Equity Fund, and that
the number of shares of such series which the Trust is
authorized to issue is an unlimited number of shares of
beneficial interest, par value $.001 per share, with the
shares of such series having such relative rights and
preferences as set forth in the Declaration of Trust for
separate series; and further
VOTED: That the appropriate officers of the Trust be, and
each hereby is, authorized and empowered to execute all
instruments and documents and to take all actions, including
the filing of an Amendment to the Trusts 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 any one of them in his or her sole
discretion deems necessary or appropriate to carry out the
intents and purposes of the foregoing vote.
IN WITNESS WHEREOF, the undersigned have executed this
amendment as of this 27th day of January, 1999.
/s/Jean G. Pilloud /s/Bruce W. Schnitzer
Jean G. Pilloud Bruce W. Schnitzer
/s/Jean-Franois Demole /s/David J. Callard
Jean-Franois Demole David J. Callard
/s/Jeffrey P. Somers, Esq.
Jeffrey P. Somers, Esq.
Exhibit 5(d)
SUPPLEMENT TO INVESTMENT ADVISORY AGREEMENT
PANORAMA TRUST
February 3, 1999
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 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 European Equity 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/Rod Hearn
Authorized Signature
Exhibit 6(d)
SUPPLEMENT TO DISTRIBUTION AGREEMENT
PANORAMA TRUST
February 3, 1999
First Data Distributors, Inc.
4400 Computer Drive
Westboro, Massachusetts 01581
Dear Sirs:
This letter is to confirm that the undersigned, Panorama Trust, a
Massachusetts business trust (the Trust), and First Data Distributors,
Inc., a Massachusetts corporation (the Distributor), have agreed 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 European Equity
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:
FIRST DATA DISTRIBUTORS, INC.
By: /s/Scott M. Hacker
Authorized Signature
SCHEDULE A (as revised February 3, 1999)
to the Distribution Agreement
between Panorama Trust and
First Data Distributors, Inc.
Name of Series
Pictet Global Emerging Markets Fund
Pictet International Small Companies Fund
Pictet Eastern European Fund
Pictet European Equity Fund
PANORAMA TRUST FIRST DATA DISTRIBUTORS, INC.
By: /s/Jean G. Pilloud By: /s/Scott M. Hacker
Title: President and Chairman Title:Vice President and
Treasurer
Exhibit 8(e)
FORM OF
SUPPLEMENT TO CUSTODIAN AGREEMENT
PANORAMA TRUST
February __, 1999
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Dear Sirs:
This letter is to confirm that the undersigned, Panorama Trust, a
Massachusetts business trust (the Trust), and Brown Brothers Harriman &
Co., a Massachusetts corporation (the Custodian), have agreed that the
Custodian Agreement between the Trust and the Custodian dated September
15, 1995 (the Agreement), is herewith amended to provide that the
Custodian shall also be the Custodian for the Pictet European Equity Fund
on the terms and conditions contained in the Agreement and any Amendments
to the Agreement. Appendix B 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: ________________
Authorized Signature
Accepted:
BROWN BROTHERS HARRIMAN & CO.
By:
Authorized Signature
APPENDIX B
(as revised February __, 1999)
TO
CUSTODIAN AGREEMENT
BETWEEN
PANORAMA TRUST and BROWN BROTHERS HARRIMAN & CO.
The following is the list of Funds for which the Custodian
shall serve under the Custodian Agreement dated September 15,
1995:
PICTET EASTERN EUROPEAN FUND
PICTET GLOBAL EMERGING MARKETS FUND
PICTET INTERNATIONAL SMALL COMPANIES FUND
PICTET EUROPEAN EQUITY FUND
IN WITNESS WHEREOF, each of the parties hereto has caused
this appendix to be executed in its name and on behalf of
each such Fund.
PANORAMA TRUST: BROWN BROTHERS HARRIMAN &
CO.:
____________ ________________________
Name: _____________ Name: ________________________
Title: _____________ Title:
________________________
Exhibit 9(d)
SUPPLEMENT TO TRANSFER AGENCY AND SERVICES AGREEMENT
February 3, 1999
Panorama Trust
One Exchange Place
Boston, Massachusetts 02109
Panorama Trust, a Massachusetts business trust (the Trust), hereby
supplements its Transfer Agency and Services Agreement dated October 3,
1995 (the Transfer Agency Agreement) with First Data Investor Services
Group, Inc., a Massachusetts corporation (the Transfer Agent), to
provide the services as described under the Transfer Agency Agreement for
Pictet European Equity Fund (the New Fund). Exhibit I to the Transfer
Agency Agreement is revised in the form attached hereto.
Fees to be paid by the Trust 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, First Data 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.
By: /s/Barbara L. Worthen
Authorized Signature
Exhibit 1 (as revised February 3, 1999)
LIST OF PORTFOLIOS AND CLASSES
Pictet Global Emerging Markets Fund (with one class of shares)
Pictet International Small Companies Fund (with one class of shares)
Pictet Eastern European Fund (with one class of shares)
Pictet European Equity Fund (with one class of shares)
Exhibit 9(h)
SUPPLEMENT TO ADMINISTRATION AGREEMENT
February 3, 1999
Panorama Trust, a Massachusetts business trust (the Trust), hereby
supplements its Administration Agreement dated October 3, 1995 (the
Administration Agreement) with First Data Investor Services Group, Inc.,
a Massachusetts corporation (the Administrator), to provide the services
as described under the Administration Agreement for Pictet European Equity
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 First Data
Distributors, Inc., as amended to date. 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.
By: /s/Barbara L. Worthen
Authorized Signature
SCHEDULE A (as revised February 3, 1999)
SERIES AND CLASSES OF THE TRUST
PICTET GLOBAL EMERGING MARKETS FUND
(with one class of shares)
PICTET INTERNATIONAL SMALL COMPANIES FUND
(with one class of shares)
PICTET EASTERN EUROPEAN FUND
(with one class of shares)
PICTET EUROPEAN EQUITY FUND
(with one class of shares)
* Board Members Pilloud, Demole and Somers are "interested persons" of the
Trust as defined in the 1940 Act.
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