As filed with the Securities and Exchange Commission on November 16, 2001.
File No. 333-71996
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. 1 [X]
Post-Effective Amendment No. _____ [ ]
INVESTEC FUNDS
(Formerly Guinness Flight Investment Funds)
(Exact name of Registrant as Specified in Trust Instrument)
1055 Washington Blvd., 3rd Floor
Stamford, Connecticut 06901
___________________________________________________
(Address of Principal Executive Office) (Zip Code)
(800) 362-5365
(Area Code and Telephone Number)
Susan Penry-Williams, Esq.
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
____________________________________
(Name and Address of Agent for Service)
Copy to
Mr. Royce N. Brennen
Investec Funds
1055 Washington Blvd., 3rd Floor
Stamford, Connecticut 06901
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.
Title of Securities Being Registered: Shares of Beneficial Interest.
No Filing Fee is due because of reliance on Section 24(f) of the Investment
Company Act of 1940, as amended.
Registrant proposes that the filing become effective, pursuant to Rule 488 under
the Securities Act of 1933, as amended.
PRELIMINARY PROXY MATERIALS FOR THE INFORMATION
OF THE SECURITIES AND EXCHANGE COMMISSION
INVESTEC FUNDS
Investec Wireless World FundTM
Investec internet.comTM Index Fund
800-915-6565
NOTICE OF SPECIAL JOINT MEETING OF SHAREHOLDERS
The Investec Funds (the "Trust") will host a special joint meeting of
shareholders of the Investec Wireless World FundTM (the "Wireless World Fund")
and the Investec internet.comTM Index Fund (the "internet.com Fund")(separately
referred to as "a Fund" or "your Fund", and collectively referred to as "the
Funds") on December 27, 2001, at 3:30 p.m. Eastern Time (the "Meeting"). The
Meeting will be held at the Funds' offices, located at 1055 Washington Blvd.,
3rd Floor, Stamford, Connecticut. At the Meeting, we will ask shareholders of
each Fund to vote on the following proposal:
To approve an Agreement and Plan of Reorganization and
Liquidation (the "Plan") which if approved would result in
the reorganization of the Fund into the Investec
Wired(R)Index Fund; and
To transact such other business as may properly come
before the Meeting and any adjournments thereof.
November __, 2001
By Order of the Board of Trustees,
Eric M. Banhazl
Secretary
Investec Funds
1055 Washington Blvd., 3rd Floor
Stamford, Connecticut 06901
Dear Shareholder,
Enclosed is a Proxy Statement seeking approval by the shareholders of your
Fund of a proposed merger of Investec internet.com(TM) Index Fund ("internet.com
Fund") and Investec Wireless World Fund(TM) ("Wireless Fund") (collectively,
"Merging Funds") into Investec Wired(R) Index Fund ("Wired Fund"). Investec
Asset Management U.S. Limited ("Investec") is the investment adviser for the
Investec Funds and will remain the investment adviser of the Wired Fund after
the merger.
We are recommending the merger of the Funds because the investment
objectives of the Merging Funds and the Wired Fund are similar and the Funds
employ similar investment policies to achieve their investment objectives.
Additionally, as discussed in the accompanying document, the Merging Funds'
asset bases are decreasing and the Wired Fund's ratio of expenses to net assets
for the most recently completed fiscal year is lower than those of the Merging
Funds. The combined assets of the Funds should provide a more stable asset base
for management because daily purchases and redemptions of shares should have a
less significant impact on the size of the combined Funds. The accompanying
document describes the proposed transaction and compares the investment
policies, operating expenses and performance history of the Merging Funds and
the Wired Fund. You should review the accompanying materials carefully.
Remember your vote is important. PLEASE TAKE A MOMENT NOW TO SIGN, DATE
AND RETURN YOUR PROXY CARD IN THE ENCLOSED POSTAGE-PAID RETURN ENVELOPE. If we
do not receive your signed proxy card after a reasonable amount of time, you may
receive a telephone call from our proxy solicitor, Georgeson Shareholder
Communications Inc. ("GS"), reminding you to vote your shares. Proxies may be
voted by telephone by calling GS at 888-899-2580 between the hours of 9:00 a.m.
and 11:00 p.m. (EST) Monday-Friday or Saturday between the hours of 12:00 p.m.
and 6:00 p.m. (EST). If you prefer, you can fax the proxy card to GS, Attn:
Proxy Department, at 800-733-1885. We encourage you to vote by telephone or
through the Internet (please refer to your proxy card for the appropriate
website) in order to expedite the process. Whichever voting method you choose,
please read the full text of the Proxy Statement before you vote.
If you have any questions regarding the shareholder meeting, please feel
free to call our proxy solicitors, GS, at 888-889-2580 who will be pleased to
assist you.
IT IS VERY IMPORTANT THAT YOUR VOTING INSTRUCTIONS BE RECEIVED PROMPTLY.
Sincerely,
Royce N. Brennan
President
PRELIMINARY PROXY MATERIALS FOR THE INFORMATION
OF THE SECURITIES AND EXCHANGE COMMISSION
YOUR VOTE IS IMPORTANT!
- --------------------------------------------------------------------------------
YOU CAN VOTE EASILY AND QUICKLY BY MAIL, BY PHONE (Toll-Free), OR BY
FAX. JUST FOLLOW THE SIMPLE INSTRUCTIONS THAT APPEAR ON YOUR
ENCLOSED PROXY CARD.
- --------------------------------------------------------------------------------
INVESTEC FUNDS
Investec Wireless World FundTM
Investec internet.comTM Index Fund
SPECIAL JOINT MEETING OF SHAREHOLDERS
December 27, 2001
____________________________________________________________
INVESTEC FUNDS
1055 Washington Blvd., 3rd Floor
Stamford, Connecticut 06901
COMBINED PROXY STATEMENT AND PROSPECTUS
DATED NOVEMBER __, 2001
INTRODUCTION
------------
This Combined Proxy Statement and Prospectus is being provided for a
special joint meeting of shareholders of the Investec Wireless World FundTM (the
"Wireless World Fund") and the Investec internet.comTM Index Fund (the
"internet.com Fund") (separately referred to as "each Fund" or "your Fund", and
collectively referred to as "the Funds") to be held on December 27, 2001 (the
"Meeting"). We have divided the Combined Proxy Statement and Prospectus into
five parts:
Part 1 -- An Overview
Part 2 -- Proposal to Approve an Agreement and Plan of the
Reorganization and Liquidation on behalf of your Fund
Part 3 -- More on Proxy Voting and Joint Meeting of Shareholders
Part 4 -- Fund Information
Part 5 -- Form of Agreement and Plan of Reorganization and
Liquidation
Please read the entire Proxy Statement before voting. If you have any
questions about the Meeting, please feel free to call Georgeson Shareholder
Communications Inc. at 1-888-889-2580.
This Combined Proxy Statement and Prospectus was first mailed to
shareholders the week of November 26, 2001. It contains information about the
Investec Funds that you should know. Please keep it for future reference. A
Statement of Additional Information and a Prospectus dated April 26, 2001, and
an Annual Report and Semi Annual report dated December 31, 2000 and June 30,
2001, respectively, are incorporated by reference and can be obtained free of
charge by calling us at 800-915-6565.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR
DETERMINED THAT THIS COMBINED PROXY STATEMENT AND PROSPECTUS IS ACCURATE OR
COMPLETE. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
Investec Funds is required by federal law to file reports, proxy
statements and other information with the SEC. The SEC maintains a website that
contains information about the Investec Funds. Any such reports, proxy material
and other information can be inspected and copied at the public reference
facilities of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of
such materials can be obtained from the Public Reference Branch, Office of
Consumer Affairs and Information Services of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, or by electronic request at the following e-mail
address: publicinfo@sec.gov, at prescribed rates. You may call the SEC at (202)
942-8090 for information on the operation of the Public Reference Room.
PART 1 - AN OVERVIEW.........................................................1
PART 2 - PROPOSAL TO APPROVE AN AGREEMENT AND PLAN OF THE REORGANIZATION AND
LIQUIDATION ON BEHALF OF YOUR FUND...................................1
Introduction.......................................................1
How the Reorganization Works.......................................2
How the Fees of your Fund Compare to the Fees of the Wired
Index Fund.........................................................3
Information about the Reorganization...............................4
Why We Want to Reorganize the Funds...............................14
Considerations by the Board of Trustees...........................14
How your Fund compares to the Wired Index Fund.....................4
Comparison of Investment Objectives......................4
Comparison of Principal Investment Risks.................6
Comparison of Potential Risks and Rewards/Performance....8
Comparison of Operations.................................9
Investment Advisory Agreement......................................9
Administration Agreement, Distribution Agreement and
Distribution Plans.................................................9
Transfer Agent and Custodian......................................10
Dividends and Other Distributions.................................10
Purchase, Redemption and Exchange Procedures......................10
Exchange and Redemption Rights....................................10
Trustees..........................................................11
Comparison of Shareholder Rights..................................11
Capitalization of the Funds.......................................11
Required Vote.....................................................11
Board Recommendation..............................................15
PART 3 - MORE ON PROXY VOTING AND JOINT MEETING OF SHAREHOLDERS.............15
PART 4 - FUND INFORMATION...................................................18
PART 5 - FORM OF AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION.......19
PART 1 - AN OVERVIEW
The Board of Trustees of the Investec Funds (the "Trust") has sent you
this Combined Proxy Statement and Prospectus to ask for your vote on a proposal
to approve an Agreement and Plan of the Reorganization and Liquidation on behalf
of your Fund. If this proposal is approved by the shareholders of your Fund,
your Fund will be reorganized into the Investec Wired(R) Index Fund* (the "Wired
Index Fund"). In this Combined Proxy Statement and Prospectus, we refer to the
Agreement and Plan of Reorganization and Liquidation as the "Plan of
Reorganization," and to the transactions described in the Plan of Reorganization
as the "reorganization."
PART 2 - PROPOSAL TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION AND
LIQUIDATION ON BEHALF OF YOUR FUND
Introduction
The Board of Trustees of the Trust, on behalf of each Fund and the Wired
Index Fund, all of which are series of the Trust, has approved an Agreement and
Plan of Reorganization and Liquidation under which your Fund would be
reorganized into the Wired Index Fund.
The primary purpose of the reorganization of your Fund is to provide a
more stable base for management of the Fund because daily purchases and
redemptions of shares should have a less significant impact on the size of the
combined funds. This may grant a wider range of choices among permitted
investments than are currently available to your Fund. In addition, although
expenses are expected to rise immediately after the reorganization, the larger
asset base following the reorganization may help your Fund achieve economies of
scale, thereby reducing its expenses as a percentage of net assets.
- ---------------------
* "WIRED INDEX" is a service mark, and "WIRED" a registered trademark, of
Advance Magazine Publishers Inc. ("Advance"), used with permission of
Advance. Wired Magazine and Advance make no representation or warranty,
express or implied, to Investec or any member of the public regarding the
advisability of investing in securities generally or in the Fund
particularly or the ability of the Wired Index to track any aspect of market
performance. Wired Magazine will continue to determine the composition of
the Index without regard to Investec or the Fund, and Wired Magazine has no
obligation to take the needs of Investec or investors in the Fund into
consideration in determining or composing the Index. Advance does not
guarantee the quality, accuracy, currency, and/or the completeness of the
index or any data included therein. Advance makes no warranty, express or
implied, as to the results to be obtained by Investec, investors in the
fund, or any other person or entity from the use of the wired index or any
data included therein connection with the fund or for any other use. Advance
makes no express or implied warranties, and hereby expressly disclaims all
warranties, or merchantability or fitness for a particular purpose or use
with respect to the wired index or any data included therein. Without
limiting any of the foregoing, in no event shall advance have any liability
for any special, punitive, indirect, or consequential damages (including
lost profits), even if notified of the possibility of such damages.
The reorganization is expected to qualify as a tax-free reorganization under
the Internal Revenue Code (the "Code"). If the reorganization qualifies as such,
you and your Fund will not recognize gain or loss solely as a result of the
reorganization.
Shareholders of each Fund will vote separately to determine whether a Fund
will be reorganized into the Wired Index Fund. For each Fund, a majority vote by
shareholders is needed to adopt the Plan of Reorganization on behalf of that
Fund. If the reorganization of a Fund is not consummated for any reason,
including the failure to obtain the requisite approval of the shareholders of
the Fund, the reorganization may nevertheless proceed with respect to the other
Fund.
The next few pages of this Combined Proxy Statement and Prospectus discuss
some of the details of the proposed reorganization and how it will affect your
Fund and you.
How the Reorganization Works
If you approve the proposal discussed in this Combined Proxy Statement and
Prospectus, your Fund would reorganize into the Wired Index Fund. The
reorganization would work as follows:
o If you approve the Plan of Reorganization, your Fund would transfer
substantially all of its assets and liabilities to the Wired Index Fund,
in exchange for shares of the Wired Index Fund.
o Your Fund would distribute to you the Wired Index Fund shares it receives.
The dollar value of the Wired Index Fund shares would be the same as the
dollar value of your Fund shares.
o You would become a shareholder of the Wired Index Fund. Your Fund would
then cease operations.
The internet.com Fund and the Wired Index Fund are managed by the same
portfolio manager and focus on long-term capital appreciation. The Wireless
World Fund is managed by a different team of portfolio managers than the Wired
Index Fund, but also focuses on long-term capital appreciation. If the proposal
is approved, the portfolio manager of the Wired Index Fund will manage the Fund
and the focus will continue to be long-term capital appreciation.
The investment objective of the Wireless World Fund is long-term capital
appreciation primarily through investments in equity securities of companies
with substantial business interest in, or that will benefit from, a shift toward
wireless communication. The investment objective of the internet.com Fund is
long-term capital appreciation primarily through investments in equity
securities of companies that comprise the internet.com Index. The investment
objective of the Wired Index Fund is long-term capital appreciation primarily
though investments in equity securities of companies that comprise the Wired
Index. Investec Asset Management U.S. Limited (the "Adviser") currently serves
as the investment adviser of each Fund.
2
How the Fees of your Fund Compare to the Fees of the Wired Index
Fund
Both your Fund and the Wired Index Fund, like all mutual funds, incur
certain expenses in their operations. These expenses include management fees, as
well as the costs of maintaining accounts, administration, providing shareholder
liaison and distribution services, and other activities. The following table
describes the fees and expenses you may pay if you invest in your Fund or the
Wired Index Fund. The table also shows the expected expenses of the Wired Index
Fund after the reorganizations. The Funds' annual expenses may be more or less
than the amounts shown below.
Combined Pro Forma
Wireless internet.com Wired (All three Funds)
World Fund Fund Index Fund
Shareholder Transaction
Expenses (paid directly from
your investment)
Maximum Sales Charge Imposed
on Purchases (as a
percentage of offering price) None None None None
Sales Charge Imposed on
Reinvested Dividends None None None None
Deferred Sales Charge None None None None
Redemption Fees/Exchange Fees 1.00%(1) 2.00%(5) 1.00%(1) 1.00%(1)
Maximum Account Fee None None None None
Annual Fund Operating
Expenses (as a percentage o
average daily net assets)
Management Fees 1.00% 0.90%(2) 0.90%(2) 0.90%(2)
Distribution (Rule 12b-1) Fees 0.00% 0.00% 0.00% 0.00%
Other Expenses 0.68%(3) 0.64% 0.34% 0.38%
Total Annual Fund Operating Expenses 1.68%(3) 1.54%(4) 1.24%(4) 1.28%(4)
Expenses Reimbursed to the Fund None 0.19% None None
Net Annual Fund Operating Expensess
(expense actually incurred by the Fund) 1.68% 1.35%(4) 1.24%(4) 1.28%(4)
(1) You will be charged a 1% fee if you redeem or exchange shares of this Fund
within 30 days of purchase. There is a $10 fee for redemptions by wire.
(2) Pursuant to an Advisory Agreement, this Fund will pay an advisory fee of
0.90% on the first $100 in assets, 0.75% on the next $100 to $500 in assets, and
0.60% on assets over $500 million.
(3) These expenses are based on the estimated amount for the current fiscal
year.
3
(4) The Fund's Adviser is contractually obligated to cap the Fund's Total Annual
Fund Operating Expenses at 1.35% through June 30, 2002.
(5) You will be charged a 2% fee if you redeem or exchange shares of this Fund
within 30 days of purchase. There is a $10 fee for redemptions by wire.
Example. This Example is intended to help you compare the cost of
investing in your Fund with the cost of investing in the Wired Index Fund, and
with the cost of investing in the Wired Index Fund if the proposal is approved
by shareholders of each Fund.
The Example assumes that you invest $10,000 in a Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that a
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
- ---------------------------------------- ------------- -------------- -------------- --------------
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------- ------------- -------------- -------------- --------------
Wireless World Fund $171 $530 $913 $1,987
- ---------------------------------------- ------------- -------------- -------------- --------------
internet.com Fund $137 $468 $821 $1,818
- ---------------------------------------- ------------- -------------- -------------- --------------
Wired Index Fund* $126 $393 $681 $1,500
- ---------------------------------------- ------------- -------------- -------------- --------------
Combined Pro Forma (All three Funds)* $130 $406 $702 $1,545
- ---------------------------------------- ------------- -------------- -------------- --------------
* Your costs of investing in the Fund for 1 year reflect the amount you
would pay after the Adviser reimburses the Fund for some or all of the
Other Expenses. Your costs of investing in the Fund for 3, 5 and 10 years
reflect the amount you would pay if the Adviser did not reimburse the Fund
for some or all of the Other Expenses. If the Adviser continues to cap the
Fund's expenses for 3, 5 or 10 years as the Adviser did for the first
year, your actual costs for those periods would be lower than the amounts
shown. The Adviser is currently under no obligation to cap expenses for
any period beyond June 30, 2002.
How your Fund Compares to the Wired Index Fund
For complete information about your Fund, or the Wired Index Fund, please
refer to your copy of the Investec Funds' combined prospectus dated April 26,
2001. You also can call us at 800-915-6565 for a free copy of the combined
prospectus. The information contained in your Fund's prospectus is incorporated
by reference into this Combined Proxy Statement and Prospectus.
Comparison of Investment Objectives. The following table compares
the investment objective of your Fund with the investment objective of the Wired
Index Fund.
- -----------------------------------------------------------------------------------------
Wireless World Fund internet.com Fund Wired Index Fund
- -----------------------------------------------------------------------------------------
Long-term capital Long-term capital Long-term capital appreciation
appreciation primarily appreciation primarily primarily though investments in
through investments in through investments in equity securities of companies
equity securities of equity securities of that comprise the Wired Index.
companies with companies that comprise the
substantial business internet.com Index.
interest in, or that
will benefit from, a
shift toward wireless
communication.
- -----------------------------------------------------------------------------------------
4
Comparison of Investment Policies and Strategies. Your Fund and the
Wired Index Fund differ primarily in the investment strategies that they employ
to achieve their respective goals. For example, both the internet.com Fund and
the Wired Index Fund are passively managed index funds, whereas the Wireless
World Fund is an actively managed equity fund. In addition, both the Wireless
World Fund and the Wired Index Fund have the ability to employ temporary
defensive positions during unusual economic or business circumstances, whereas
the internet.com Fund does not. The following table highlights in more detail
the differences between the principal investment policies and strategies of your
Fund and the principal investment policies and strategies of the Wired Index
Fund.
- -----------------------------------------------------------------------------------------
Wireless World Fund internet.com Fund Wired Index Fund
- -----------------------------------------------------------------------------------------
The Fund intends to invest at The internet.com(TM)Index The Wired(R)Index Fund
least 85% of its assets in Fund will invest at least will invest at least 85%
companies with substantial 85% ofits total assets in the of its total assets in
interest in, or that may securities that comprise the securities that comprise
benefit from, a shift toward internet.com Index. the Wired(R)Index.
wireless communications. This
would include As an index fund, the As an index fund, the
telecommunications companies, internet.com(TM)Index Fund Wired(R)Index Fund will
hardware manufacturers, will attempt to replicate attempt to replicate the
Internet companies, content the performance of the performance of the Wired(R)
providers and service internet.com Index. The Fund Index. The Fund will
companies that supply will follow a principal follow a principal
equipment, hardware, investment policy of "full investment policy of
information or services via replication," meaning that "full replication",
wireless communications the Fund will attempt to meaning that the Fund
devices. invest in all 50 component will attempt to invest in
issues that comprise the all 40 component issues
The Fund intends to invest in internet.com Index in that comprise the Wired(R)
a portfolio of approximately proportion to their Index in the proportion
40 stocks that the manager weighting in the Index. This they are represented
believes represent the most would include companies that within the Index. This
attractive "wireless are represented in the would include technology
companies." Internet sector. From time and telecommunications
to time, the Fund may also companies. From time to
In evaluating and selecting use a method known as "index time, we may also use a
companies for inclusion in the sampling" to efficiently method known as "index
Fund the manager uses a handle cash inflows and sampling", to efficiently
"bottom up" process. This outflows on a short-term handle cash inflows and
process places a premium on basis. "Index sampling" is outflows on a short-term
examining and selecting an investment technique that basis. "Index sampling"
individual stocks based on seeks to replicate the is an investment
their individual investment performance of the Index by technique that seeks to
merits. The manager will be investing in fewer than the replicate the performance
particularly interested in 50 component stocks. of the Wired(R)Index by
5
- -----------------------------------------------------------------------------------------
Wireless World Fund internet.com Fund Wired Index Fund
- -----------------------------------------------------------------------------------------
growth companies that are investing in fewer than
likely to benefit from new or the 40 component stocks.
innovative products, services
or processes that should Temporary Defensive
enhance such companies' Investing. During unusual
prospects for future growth in economic or business
earnings and revenues. circumstances as
determined by the
The manager will invest mainly manager, the Fund may
in medium to large adopt a temporary
capitalization companies defensive position and
(companies with market invest a portion or all
capitalizations of more than of its portfolio in Money
U.S. $1 billion at the time of Market Instruments. To
purchase) but will from time the extent the Fund is
to time invest in smaller invested in Money Market
capitalization issues Instruments for defensive
(companies with market purposes the Fund's
capitalizations of less than investment objective may
U.S. $1 billion at the time of not be achieved.
purchase).
During unusual economic or
business circumstances as
determined by the manager, the
Fund may adopt a temporary
defensive position and invest
a portion or all of its
portfolio in Money Market
Instruments. To the extent the
Fund is invested in Money
Market Instruments for
defensive purposes the Fund's
investment objective may not
be achieved.
- -----------------------------------------------------------------------------------------
Comparison of Principal Investment Risks. All three of the Funds are
subject to the risks common to all mutual funds that invest in equity
securities. However, each Fund's risks differ based on the types of equity
securities in which it invests. The following table highlights in more detail
the differences between the principal investment risks of investing in your Fund
and the principal investment risks of investing in the Wired Index Fund.
- -----------------------------------------------------------------------------------------
Wireless World Fund internet.com Fund Wired Index Fund
- -----------------------------------------------------------------------------------------
The Fund is subject to the The Fund is subject to the The Fund is subject to
following risks common to all following risks common to the risks common to all
mutual funds that invest in all mutual funds that invest mutual funds that invest
equity securities and that in equity securities and the in equity securities and
invest in companies involved securities that make up the the securities that make
in the telecommunications, internet.com Index. You may up the Wired(R) Index. You
6
- -----------------------------------------------------------------------------------------
Wireless World Fund internet.com Fund Wired Index Fund
- -----------------------------------------------------------------------------------------
internet or technology lose money under any of the may lose money under any
industries. You may lose money following circumstances: of the following
if any of the following occur: circumstances:
o the internet.com Index
o The stock market declines declines in value; o the Wired(R)Index
in value; declines in value;
o Internet stocks fall
o Telecommunications, out of favor with o the Wired(R)Index is
technology or wireless investors (market value more adversely
services stocks decline of an Internet stock affected by a market
in value; goes down); downturn than a
larger, more
o Telecommunications, o the internet.com Index broad-based index
technology or wireless is more adversely due to its
services stocks fall out affected by a market concentration and
of favor with investors; downturn than a larger, focus on specific
more broad-based index sectors;
o Telecommunications, due to its
technology or wireless concentration and focus o technology or
services companies in on Internet stocks or a telecommunication
which the Fund invests specific sub-sector stocks fall out of
lose money due to within the Internet favor with
competitive business sector; investors; or
pressures or failure to
keep pace with the rapid o Internet companies in o technology companies
rate of technological the internet.com Index in the Wired(R)Index
change; or lose money due to lose money due to
intense pricing intense pricing
o The Fund manager's pressure or high pressure or high
investment strategy does capital investment capital investment
not achieve the Fund's costs; costs.
objective or the manager
does not implement the o the Fund manager's The Wired(R)Index Fund
strategy properly. investment strategy currently has a
does not achieve the meaningful minority
You should also be aware that Fund's objective or the percentage of its assets
the share prices of manager does not represented by companies
telecommunications, technology implement the strategy in the technology,
and wireless services properly; or Internet and
companies fluctuate more than communications
other stocks because these o the stock market goes industries. These
industries are subject to more down. industries are extremely
rapid change in technology and competitive and subject
products than stocks of In addition, you should be to rapid rates of change.
companies in most other aware that share prices of The competitive nature of
industries. Further, to the Internet companies will these industries and
extent that the Fund invests fluctuate more than other rapid rate of change
in small companies there may stocks because Internet places a challenge on the
be additional risks associated stocks are subject to more management of these
with such stocks. Stocks of rapid change in technology companies to be
small companies are more and products than other successful.
difficult to sell during stocks and that small cap
market downturns due to lower stocks which comprise the The Wired(R) Index Fund is
liquidity. The Fund may internet.com Index are more non-diversified which
exhibit a greater degree of difficult to sell during a means that, compared to
volatility and fluctuation on down market due to lower other funds, the Fund may
a day-to-day basis than a more liquidity. The Fund may invest a greater
diversified fund. exhibit a greater degree of percentage of its assets
volatility and fluctuation in a particular issuer.
on a day-to day basis than a To the extent that the
larger, broad-based index. Fund invests in a small
number of issuers, there
may be a greater risk of
losing money than in a
diversified investment
company.
- -----------------------------------------------------------------------------------------
7
Comparison of Potential Risks and Rewards/Performance. Your Fund and
the Wired Index Fund have their own risks and potential rewards. The charts and
tables below compare the potential risks and rewards of investing in each Fund.
The bar charts shown below provide an indication of the risks of investing
in each Fund by showing changes in each Fund's performance for various time
periods ending December 31. The figures shown in the bar charts and tables
assume reinvestment of dividends.
Keep in mind that past performance does not indicate future results.
Wireless World Fund
No bar chart is available because the Fund has not been in existence
for a full calendar year.
internet.com Fund
2000: -58.48
During the period shown in the bar chart, the best performance for a
quarter was 11.34% (for the quarter ended 3/31/00). The worst performance was
- -52.20% (for the quarter ended 12/31/00).
Wired Index Fund
1999: 68.68%
2000: -16.78%
During the period shown in the bar chart, the best performance for a
quarter was 40.06% (for the quarter ended 12/31/99). The worst performance was
- -19.55% (for the quarter ended 12/31/00).
The average annual total returns for internet.com Fund and the Wired Index
Fund for the periods ended December 31, 2000 are as follows:
- ------------------------------------ --------------- ------------------------
Average Annual Total Returns Past One Year Since inception
- ------------------------------------ --------------- ------------------------
internet.com -58.48% -17.85%*
- ------------------------------------ --------------- ------------------------
Wired Index Fund -16.78% 24.52%**
- ------------------------------------ --------------- ------------------------
*Average annual total return since inception, July 30, 1999.
**Average annual total return since inception, December 15, 1998.
8
The average annual total returns for the Wireless World Fund is not
available because the Fund has not been in existence for a full calendar year.
Comparison of Operations.
Investment Advisory Agreement
Investec Asset Management U.S. Limited (the "Adviser") is the investment
adviser for the Funds and the Wired Index Fund. The Adviser supervises all
aspects of the Funds' operations and advises the Funds, subject to oversight by
the Fund's Board of Trustees. For providing these services, the each Fund pays
the Adviser an annual advisory fee. The Adviser's primary offices are located in
the U.K., South Africa, Guernsey, Hong Kong, and the U.S. The U.S. office is
located at 1055 Washington Blvd., 3rd Floor Stamford, CT 06901. The Advisers'
main office is located in London, England at 2 Gresham Street, London EC2V 7QP.
The Hong Kong office is located at 2106-2108 Jardine House, One Connaught Place,
Central, Hong Kong. The Advisory Agreement was approved on behalf of each Fund
by the Board of Trustees on June 3, 1998 and by the shareholders of the Funds on
August 25, 1998 at a shareholder meeting called for that purpose.
Administration Agreement, Distribution Agreement and Distribution
Plan
The Trust has entered into separate Administration and Distribution
Agreements with respect to the Funds with Investment Company Administration,
L.L.C. ("Administrator") and Quasar Distributors, LLC ("Distributor"),
respectively.
For its services to the Funds, the Administrator receives a monthly fee
equal to, on an annual basis, 0.05% of each Fund's average daily net assets,
subject to a $20,000 annual minimum per fund.
Under the Distribution Agreement, the Distributor uses all reasonable
efforts, consistent with its other business, to secure purchases for the Funds'
shares and pays the expenses of printing and distributing any prospectuses,
reports and other literature used by the Distributor, advertising, and other
promotional activities in connection with the offering of shares of the Funds
for sale to the public.
The Funds will not make separate payments as a result of the Distribution
Plan to the Adviser, the Administrator, Distributor or any other party, it being
recognized that the Funds presently pay, and will continue to pay, an investment
advisory fee to the Adviser and an administration fee to the Administrator. To
the extent that any payments made by the Funds to the Adviser or the
Administrator, including payment of fees under the Investment Advisory Agreement
or the Administration Agreement, respectively, should be deemed to be indirect
financing of any activity primarily intended to result in the sale of shares of
the Funds within the context of rule 12b-1 under the 1940 Act, then such
payments shall be deemed to be authorized by the Plan. The Distribution Plan and
related agreements were approved by the Board of Trustees including all of the
"Qualified Trustees" (Trustees who are not "interested" persons of the Funds, as
defined in the Investment Company Act of 1940 Act, as amended (the "1940 Act"),
and who have no direct or indirect financial interest in the Plan or any related
agreement).
9
Transfer Agent and Custodian
Transfer Agent. State Street Bank and Trust Company is the Transfer Agent
for the Funds. The Transfer Agent provides record keeping and shareholder
services. State Street is located at P.O. Box 1912, Boston, MA 02105.
Custodian. Investors Bank and Trust Company is the custodian for the
Funds. The custodian holds the securities, cash and other assets of the Funds.
Investors Bank and Trust is located at 200 Claredon Street, Boston, MA 02116.
Dividends and Other Distributions
The dividend and distribution arrangements for both the Funds and the
Wired Index Fund are the same. Both Funds and the Wired Index Fund distribute
all or most of their net investment income and net capital gains to
shareholders. Dividends (investment income) for the Funds are normally declared
and paid semi-annually, in June and December. Net capital gains for the Funds
are normally distributed in June and December. When calculating the amount of
capital gain for a Fund, the Fund can offset any capital gain with net capital
loss (which may be carried forward from a previous year).
Your dividends and/or capital gains distributions will be automatically
reinvested on the ex-dividend date when there is a distribution, unless you
elect otherwise, so that you will be buying more of both full and fractional
shares of the Fund. You will be buying those new shares at the NAV per share on
the ex-dividend date. You may choose to have dividends and capital gains
distributions paid to you in cash. You may also choose to reinvest dividends and
capital gains distributions in shares of another Investec Fund. You may
authorize either of these options by calling the Transfer Agent at (800)
915-6565 and requesting an optional shareholder services form. Dividends and
distributions are treated in the same manner for federal income tax purposes
whether you receive them in the form of cash or additional shares
Purchase, Redemption and Exchange Procedures
The purchase, redemption and exchange procedures for both the Funds and
the Wired Index Fund are the same. The Transfer Agent is open from 8 a.m. to 6
p.m. Eastern Time for purchase, redemption and exchange orders. Shares will be
purchased, exchanged and redeemed at NAV per share. For trades in the Wired
Index Fund, Wireless World Fund and internet.com Index Fund, the transfer agent
must receive your request by the close of the New York Stock Exchange (generally
4:00 p.m. Eastern Time) to receive the NAV of that day. The phone number you
should call for account transaction requests is (800) 915-6565.
Exchange and Redemption Rights
The exchange and redemption rights for both the Funds and the Wired Index
Fund are the same. You may exchange or redeem shares by mail or telephone. When
you exchange shares, you sell shares of one Investec Fund and buy shares of
another Fund. You may realize either a gain or loss on those shares and will be
responsible for paying the appropriate taxes. If you exchange or redeem through
a broker, the broker may charge you a transaction fee. If you
10
purchased your shares by check, you may not receive your redemption proceeds
until the check has cleared, which may take up to 15 calendar days.
Trustees
The Board of Trustees of the Trust is responsible for the management of
both Funds.
Comparison of Shareholder Rights. As series of the Trust, both
Funds' shareholders have the same rights, including, but not limited to, par
value, preemptive rights, preference and appraisal rights.
Capitalization of the Funds. The table below show existing
capitalization as of September 30, 2001, as well as pro forma capitalization as
of the same date, which reflects the impact of any corporate actions, including
accounting adjustments, required to facilitate the reorganization. For these
reasons, the total pro forma combined Total Net Assets may differ from the
combined net assets of the Funds prior to the reorganization.
------------------------------------- ------------ --------------------- ---------------------
Total Net
Assets Shares Outstanding
(000) (000) NAV
------------------------------------- ------------ --------------------- ---------------------
Wireless World $10,283 2,894 $3.55
------------------------------------- ------------ --------------------- ---------------------
internet.com Fund $3,746 1,341 $2.79
------------------------------------- ------------ --------------------- ---------------------
Wired Index Fund $70,693 6,556 $10.78
------------------------------------- ------------ --------------------- ---------------------
Combined Pro Forma (All Three Funds) $73,380 6,807 $10.78
------------------------------------- ------------ --------------------- ---------------------
Information about the Reorganization
This section describes some information you should know about the
reorganization of your Fund.
Description of transaction. The Plan of Reorganization provides that your
Fund will transfer substantially all of its assets to the Wired Index Fund in
exchange for shares of the Wired Index Fund in the same proportion as the shares
of your Fund. The Wired Index Fund will also assume substantially all of your
Fund's liabilities. After this transaction, the Wired Index Fund will give you
shares of the Wired Index Fund (the "Closing"). The dollar value of the shares
you receive will be equal to the dollar value of the Fund shares you owned at
the end of business on the day of the Closing. You will not pay a sales charge
or any other fee as part of this transaction.
Please see the Plan of Reorganization for a more detailed description of
the reorganization. You can find the Plan of Reorganization in Part 5 of this
Combined Proxy Statement and Prospectus.
Tax Consequences of the Reorganization. The following discussion addresses
certain material United States federal income tax consequences of the
reorganization. It is based on current tax law, which may be changed by
legislative, judicial, or administrative action, possibly with retroactive
effect. No attempt has been made to present a complete discussion of the federal
11
tax consequences to the Funds or their shareholders, and this discussion does
not address any state, local or foreign tax consequences. The discussion relates
to United States persons who hold shares of a Fund as capital assets (as defined
in section 1221 of the Code). Special tax considerations may apply to certain
types of investors subject to special treatment under the tax law. Accordingly,
you are urged to consult your tax adviser with specific reference to your own
tax circumstances.
As a condition to the closing of the reorganization, both your Fund
and the Wired Index Fund must receive an opinion of counsel, on the basis of the
representations set forth or referred to in such opinion, describing the
material federal income tax consequences of the reorganization (the "Tax
Opinion"). The Funds anticipate that the Tax Opinion will provide that, although
the federal income tax consequences of the reorganization are not free from
doubt, the reorganization should constitute a "reorganization" as such term is
defined in section 368(a)(1) of the Code (a "tax-free reorganization"). If the
reorganization qualifies as a tax-free reorganization, then:
o No gain or loss should be recognized by your Fund on the transfer to
the Wired Index Fund of its assets in exchange solely for shares of
the Wired Index Fund and the Wired Index Fund's assumption of your
Fund's liabilities or on the subsequent distribution of shares of
the Wired Index Fund to you in liquidation of your Fund;
o No gain or loss should be recognized by the Wired Index Fund on its
receipt of your Fund's assets in exchange solely for shares of the
Wired Index Fund and the Wired Index Fund's assumption of your
Fund's liabilities;
o The Wired Index Fund's adjusted tax basis in the assets acquired
from your Fund should be equal to the basis thereof in your Fund's
hands immediately before the reorganization, and the Wired Index
Fund's holding period for the assets acquired from your Fund will
include your Fund's holding period therefor;
o You should recognize no gain or loss on the exchange of shares of
your Fund solely for shares of the Wired Index Fund pursuant to the
reorganization; and
o Your aggregate tax basis in shares of the Wired Index Fund received
by you in the reorganization should equal your aggregate tax basis
in the shares of your Fund surrendered in exchange therefor, and
your holding period for shares of the Wired Index Fund received in
the reorganization should include your holding period for the shares
of your Fund surrendered in exchange therefor, provided that you
hold such shares as capital assets at the effective time of the
reorganization.
However, it is possible that the Internal Revenue Service could
successfully challenge the qualification of the reorganization as a tax-free
reorganization. If the reorganization does not qualify as a tax-free
reorganization:
12
o Your Fund would be treated as if it had transferred all of its
assets to the Wired Index Fund in a taxable transaction in
which all built-in gains and losses on the assets transferred
would be recognized;
o You would be deemed to have exchanged your shares of your Fund
for shares of the Wired Index Fund in a taxable transaction in
which you would recognize a capital gain or loss equal to the
difference between your adjusted tax basis in the shares
surrendered and the fair market value of the shares of the
Wired Index Fund received; and
o Your aggregate tax basis in shares of the Wired Index Fund
received by you in the reorganization would be equal to their
fair market value on the date of the reorganization, and your
holding period for shares of the Wired Index Fund received by
you in the reorganization would begin on the day after the day
you receive such shares.
In the event that the reorganization fails to qualify as a tax-free
reorganization, the Adviser believes that your Fund's capital loss carryforwards
would be sufficient to offset any net gain that would be recognized by your
Fund.
As of September 30, 2001, the internet.com Fund and the Wireless
World Fund had capital loss carryforwards of $14,761,661 and $23,649,490,
respectively. If the reorganization qualifies as a tax-free reorganization, the
use of your Fund's capital loss carryforwards after the reorganization will be
limited each year to an amount equal to the net asset value of your Fund
immediately prior to the reorganization multiplied by the long-term tax-exempt
rate in effect for the month in which the reorganization occurs (the rate for
November 2001 is 4.85%). If the reorganization does not qualify as a tax-free
reorganization, the capital loss carryforwards of the internet.com Fund and the
Wireless World Fund will not be available to offset capital gains of the Wired
Index Fund after the reorganization. Regardless of any limitation on the ability
of the Wired Index Fund to utilize the losses of the internet.com Fund or the
Wireless World Fund, the Wired Index Fund had $18,405,642 of its own capital
loss carryforwards as of September 30, 2001 that are available to offset capital
gains realized after the reorganization.
Assuming the reorganization qualifies as a tax-free reorganization,
you will be required to retain in your records and file with your federal income
tax return for the taxable year in which the reorganization takes place a
statement setting forth all relevant facts in respect of the nonrecognition of
gain or loss upon the exchange. The statement is required to include:
o your tax basis in the shares surrendered in the
reorganization; and
o the fair market value of the shares of the Wired Index Fund
received in the reorganization as of the effective time of the
reorganization.
Your Fund may pay a dividend or distribute a taxable gain prior to
the reorganization. You may be liable for taxes on those distributions.
13
The foregoing discussion is intended only as a summary and does not
purport to be a complete analysis or listing of all potential tax effects
relevant to a decision whether to vote in favor of the reorganization.
Conditions of the reorganization. Before the reorganization can occur,
both your Fund and the Wired Index Fund must satisfy certain conditions. For
example:
o Each Fund must receive an opinion of counsel describing the material
federal income tax consequences of the reorganization;
o Each Fund must receive an opinion of counsel certifying to certain matters
concerning the legal existence of each Fund;
o For each Fund, a majority of the shareholders voting at the Meeting in
person or by proxy must approve the reorganization on behalf of that Fund.
Why We Want to Reorganize the Funds
The Adviser believes that the reorganization will benefit all of the
Funds. Among other things, the Adviser believes the reorganization will:
o Result in economies of scale. That is, the increased assets of the
combined Funds could possibly reduce expenses over time by spreading fixed
costs over a larger asset base.
o Going forward, eliminate duplicative efforts that separate funds may
require, such as accounting services, resulting in more efficient
operations of the Wired Index Fund.
o Provides a more stable base for management of your Fund because daily
purchases and redemptions of shares should have a less significant impact
on the size of the combined Funds.
o Provide greater investment opportunities. That is, the increased assets of
the combined Funds will provide the manager with a wider range of choices
among permitted investments than are currently available to the Funds
separately.
Considerations by the Board of Trustees
On September 10, 2001, the Board of Trustees of the Trust, on behalf of
both your Fund and the Wired Index Fund, unanimously approved the proposed Plan
of Reorganization for each Fund. The Trustees concluded that the reorganization:
o Was in the best interests of the shareholders of both your Fund and the
Wired Index Fund; and
o Would not result in any dilution of the value of your investment or the
investment of the shareholders of the Wired Index Fund.
14
In approving the Plan of Reorganization, the Trustees, including a
majority of the Trustees who are not "interested persons" (as defined in the
Investment Company Act of 1940, as amended) (the "Independent Trustees"),
considered that, among other things:
o Both your Fund and the Wired Index Fund seek long-term capital
appreciation; and
o Merging your Fund with the Wired Index Fund would result in the combined
Fund having a larger asset base which, over time, may result in economies
of scale and offer improved services to shareholders.
Required Vote
Approval of the Proposal requires approval of a majority of the
outstanding voting securities of your Fund. Should the Plan of Reorganization
not be approved with respect to your Fund, the Board of Trustees would determine
what, if any, further action should be taken, including continuing to operate
your Fund or liquidating it. If the reorganization of a Fund is not consummated
for any reason, including the failure to obtain the requisite approval of the
shareholders of the Fund, the reorganization may nevertheless proceed with
respect to the other Fund.
Board Recommendation
THE BOARD OF TRUSTEES RECOMMENDS THAT
SHAREHOLDERS OF EACH FUND VOTE "FOR" THE PROPOSAL
PART 3 - MORE ON PROXY VOTING AND JOINT MEETING OF SHAREHOLDER S
Who Can Vote
Only shareholders of record of each Fund at the close of business on the
Record Date, November 5, 2001, may vote for the proposals at the Meeting. As of
the Record Date, the Wireless World Fund had 2,832,880.3 shares of beneficial
interest issued and outstanding, each share being entitled to one vote. As of
the Record Date, the internet.com Fund had 1,305,399.9 shares of beneficial
interest issued and outstanding, each share being entitled to one vote.
15
Information Concerning Outstanding Shares
As of the Record Date, November 5, 2001, principal holders owning 5% or
more of the outstanding shares of the Wireless World Fund are set forth below:
- --------------------------------------------------------------------------------
Shareholder Name & Address % held as of November 5, 2001
Charles Schwab & Co. Inc. 25.70%
Special Custody Account for the
Exclusive Benefit of Customers
Attn: Mutual Funds
101 Monterey Street
San Francisco, CA 94104-4122
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
National Investor Services Corp. 6.14%
Special Custody Account for the
Exclusive Benefit of Customers
55 Water Street 32nd Floor
New York, New York 10041-0028
- --------------------------------------------------------------------------------
As of the Record Date, the Trustees and officers as a group owned
beneficially less than 1% of the outstanding shares of the Wireless World
Fund.
As of the Record Date, November 5, 2001, principal holders owning 5% or
more of the outstanding shares of the internet.com Fund are set forth below:
- --------------------------------------------------------------------------------
Shareholder Name & Address % held as of November 5, 2001
Charles Schwab & Co. Inc. 33.76%
Special Custody Account for the
Exclusive Benefit of Customers
Attn: Mutual Funds
101 Monterey Street
San Francisco, CA 94104-4122
- --------------------------------------------------------------------------------
As of the Record Date, the Trustees and officers as a group owned
beneficially less than 1% of the outstanding shares of the internet.com Fund.
Quorum Requirements
At the Meeting, the presence in person or by proxy of shareholders of
one-third of the outstanding shares entitled to vote at the Meeting shall be
necessary and sufficient to constitute a quorum for the transaction of business.
In the event that a quorum of shareholders is not present at the Meeting, the
persons named as proxies shall have the power to adjourn the Meeting. Such
meeting shall be reconvened without additional notice. In the event a quorum is
present but
16
sufficient votes to approve the proposal are not received, the persons named as
proxies may propose one or more adjournments to permit further solicitation of
proxies. If this should occur, we will vote proxies for or against a motion to
adjourn in the same proportion to the votes received in favor or against the
proposal.
You may cast one vote for the proposal for each whole share that you own
of the Fund. We count your fractional shares as fractional votes. If we receive
your proxy before the Meeting date, we will vote your shares as you instruct the
proxies. If you sign and return your proxy, but do not specify instructions, we
will vote your shares in favor of the proposal. You may revoke your proxy at any
time before the Meeting if you notify us in writing, or if you attend the
Meeting in person and vote in person.
If a proxy represents a broker "non-vote" (that is, a proxy from a broker
or nominee indicating that such person has not received instructions from the
beneficial owner or other person entitled to vote shares on a particular matter
with respect to which the broker or nominee does not have discretionary power)
or is marked with an abstention, the shares represented thereby will be
considered to be present at the Meeting for purposes of determining the
existence of a quorum for the transaction of business but will not be voted. For
this reason, a broker "non-vote" and abstentions will have the affect of a "no"
vote for purposes of obtaining the requisite approval of the proposal.
The Proxy Solicitation Process
The Board of Trustees of the Trust is soliciting your proxy to vote on the
matters described in this Combined Prospectus and Proxy Statement. We expect to
solicit proxies primarily by mail, but representatives of the Fund, the Fund's
investment advisor, their affiliates or others may communicate with you by mail
or by telephone or other electronic means to discuss your vote. Such individuals
will receive no additional compensation from the Fund for soliciting your proxy
vote. The costs of preparing and mailing proxy materials will be borne by the
Adviser and is estimated to be $ 8,240. Proxy solicitations will be made
primarily by mail, but may also be made by telephone, facsimile or personal
interview conducted by certain officers or employees of the Funds or the
Adviser. The Funds have also retained Georgeson Shareholder Communications Inc.
("GS") to assist with proxy solicitations, the cost of which (estimated to be $
20,105) will also be borne by the Adviser. GS is responsible for soliciting
individual shareholders, brokers, custodians, nominees and fiduciaries,
tabulating the returned proxies and performing other proxy solicitation
services.
PLEASE TAKE A MOMENT NOW TO SIGN, DATE AND RETURN YOUR PROXY CARD IN THE
ENCLOSED POSTAGE-PAID RETURN ENVELOPE. If we do not receive your signed proxy
card after a reasonable amount of time, you may receive a telephone call from
our proxy solicitor, GS, reminding you to vote your shares. Proxies may be voted
by telephone by calling GS at 888-899-2580 between the hours of 9:00 a.m. and
11:00 p.m. (EST) Monday-Friday or Saturday between the hours of 12:00 p.m. and
6:00 p.m. (EST). If you prefer, you can fax the proxy card to GS, Attn: Proxy
Department, at 800-733-1885. We encourage you to vote by telephone or through
the Internet (please refer to your proxy card for the appropriate website) in
order to expedite the process. Whichever voting method you choose, please read
the full text of the Proxy Statement before you vote.
17
If you have any questions regarding the shareholder meeting, please feel
free to call our proxy solicitors, GS, at 888-889-2580 who will be pleased to
assist you.
Other business. The Board of Trustees knows of no other business to be
brought before the Meeting. If any other matters properly come before the
Meeting, and on all matters incidental to the conduct of the Meeting, the named
proxies will vote all proxies using their best judgment on such matters unless
instructed to the contrary.
Recommendation of the Board of Trustees. After carefully considering all
of the issues involved, the Board of Trustees of the Trust has unanimously
concluded that the proposals are in the best interests of shareholders. The
Board of Trustees recommends that you vote to approve the Proposals.
PART 4 - FUND INFORMATION
The Trust is a business trust established under Delaware law. The
operations of The Trust is governed by a Trust Instrument dated March 7, 1997.
Each Fund is a separate series of the Trust and, as such, has similar
rights under the Trust Instrument of the Trust and applicable Delaware law. You
should be aware of the following features of the Funds:
o Shares of each Fund participate equally in dividends and other
distributions attributable to that Fund, including any distributions in
the event of a liquidation.
o Each share of the Funds is entitled to one vote for all purposes.
o Shares of all series of the Trust vote for the election of Trustees and on
any other matter that affects all series of the Trust in substantially the
same manner, except as otherwise required by law.
o As to matters that affect each Fund differently, such as approval of an
investment advisory agreement, shares of each series vote as a separate
series.
o Delaware law does not require registered investment companies, such as the
Trust or its series, to hold annual meetings of shareholders and it is
anticipated that shareholder meetings will be held only when specifically
required by federal or state law.
o Shareholders have available certain procedures for the removal of
Trustees.
o The Trust indemnifies trustees and officers to the fullest extent
permitted under federal and Delaware law.
Financial Statements. Ernst & Young LLP, independent auditors of the
Trust, has audited the financial statements for the year ended December 31, 2000
included in the Trust's Annual Report to Shareholders and incorporated by
reference into the Statement of Additional Information dated April 26, 2001.
18
PART 5 - FORM OF AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION
This AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION ("Agreement") is
made as of __________, 2001, between Investec Funds, a Delaware business trust
(the "Trust"), on behalf of Investec Wired(R) Index Fund, a series of the Trust
("Acquiring Fund"), and the Trust, on behalf of [Investec Wireless World
FundTM][Investec internet.com FundTM], a series of the Trust ("Target").
(Acquiring Fund and Target are sometimes referred to herein individually as a
"Fund" and collectively as the "Funds," and the Trust is sometimes referred to
herein as the "Investment Company.")
All agreements, representations, and obligations described herein, made
or to be taken or undertaken by either Fund, are made or shall be taken or
undertaken by the Trust on the Fund's behalf.
In accordance with the terms and conditions set forth in this
Agreement, the parties desire that Target transfer substantially all its
assets to Acquiring Fund in exchange solely for voting shares of beneficial
interest of Acquiring Fund ("Acquiring Fund's Shares") and the assumption by
Acquiring Fund of substantially all of Target's liabilities, and that Target
distribute Acquiring Fund's Shares pro rata to the holders of shares of
beneficial interest in Target ("Target's Shares") in liquidation of Target.
All such transactions with respect to Target and Acquiring Fund are referred
to herein collectively as the "Reorganization."
It is intended by the parties hereto that the Reorganization constitute
a reorganization within the meaning of Section 368(a)(1) of the Internal
Revenue Code of 1986, as amended (the "Code"). The parties hereto hereby
adopt this Agreement as a "plan of reorganization" within the meaning of
Treasury Regulation Sections 1.368-2(g) and 1.368-3(a).
In consideration of the mutual promises herein, the parties covenant
and agree as follows:
1. PLAN OF REORGANIZATION AND LIQUIDATION OF TARGET
1.1. At the Effective Time (as defined in paragraph 3.1), Target agrees
to assign, sell, convey, transfer, and deliver all of its assets
described in paragraph 1.2 ("Assets") to Acquiring Fund. Acquiring
Fund agrees in exchange therefore:
(a) to issue and deliver to Target the number of full and
fractional Acquiring Fund's Shares determined by dividing the
net value of Target (computed as set forth in paragraph 2.1)
by the "NAV" (computed as set forth in paragraph 2.2) of
Acquiring Fund's Shares; and
(b) to assume Target's liabilities described in paragraph 1.3
("Liabilities").
1.2. Assets shall include, without limitation, all cash, cash
equivalents, securities, receivables (including interest and
dividends receivable), claims and rights of action, rights to
register shares under applicable securities laws, books and records,
deferred
19
and prepaid expenses shown as assets on Target's books, and other
property owned by Target at the Effective Time as defined in paragraph
3.1.
1.3. Liabilities shall include (except as otherwise provided herein) all
of Target's known liabilities, debts and obligations arising in the
ordinary course of business reflected on the books of Target at the
Effective Time, and any contingent liabilities, if any, as the Board
of Trustees shall reasonably deem exist against Target at the
Effective Time, for which contingent and other appropriate liability
reserves shall be established on Target's books. Notwithstanding
the foregoing, Target agrees to use its best efforts to discharge
all of its known Liabilities prior to the Effective Time.
1.4. At or immediately before the Effective Time, Target shall declare
and pay to its shareholders a dividend and/or other distribution in
an amount large enough so that it will have distributed
substantially all (and in any event not less than 90%) of its
investment company taxable income (computed without regard to any
deduction for dividends paid) and substantially all of its realized
net capital gain, if any, for the current taxable year through the
Effective Time.
1.5. At the Effective Time (or as soon thereafter as is reasonably
practicable), Target shall distribute Acquiring Fund's Shares
received by it pursuant to paragraph 1.1 to Target's shareholders of
record, determined as of the Effective Time (collectively
"Shareholders" and individually a "Shareholder"), in exchange for
Target's Shares and in liquidation of Target. To accomplish this
distribution, Acquiring Fund's transfer agent ("Transfer Agent")
shall open accounts on Acquiring Fund's share transfer books in the
Shareholders' names and transfer Acquiring Fund's Shares thereto.
Each Shareholder's account shall be credited with the pro rata
number of full and fractional (rounded to the third decimal place)
Acquiring Fund's Shares due that Shareholder. All outstanding
Target's Shares, including any represented by certificates, shall
simultaneously be canceled on Target's share transfer books.
Acquiring Fund shall not issue certificates representing Acquiring
Fund's Shares in connection with the Reorganization. However,
certificates representing Target's Shares shall represent Acquiring
Fund's Shares after the Reorganization.
1.6. As soon as reasonably practicable after distribution of Acquiring
Fund's Shares pursuant to paragraph 1.5, Target shall be terminated
and any further actions shall be taken in connection therewith as
required by applicable law. Target shall file such instruments and
shall take all other steps necessary to effect a complete
liquidation and dissolution of Target.
1.7. Any reporting responsibility of Target to a public authority is and
shall remain its responsibility up to and including the date on
which it is terminated.
1.8. Any transfer taxes payable upon issuance of Acquiring Fund's Shares
in a name other than that of the registered holder on Target's books
of Target's Shares exchanged therefor shall be paid by the person to
whom Acquiring Fund's Shares are to be issued, as a condition of
such transfer.
20
2. VALUATION
2.1. For purposes of paragraph 1.1(a), Target's net value shall be (a)
the value of the Assets computed as of the close of regular trading
on the New York Stock Exchange ("NYSE") on the date of the Closing
as defined in paragraph 3.1 ("Valuation Time"), using the valuation
procedures set forth in Target's then current prospectus and
statement of additional information less (b) the amount of the
Liabilities as of the Valuation Time.
2.2. For purposes of paragraph 1.1(a), the NAV of Acquiring Fund's Shares
shall be computed as of the Valuation Time, using the valuation
procedures set forth in Acquiring Fund's then current prospectus and
statement of additional information.
2.3. All computations pursuant to paragraphs 2.1 and 2.2 shall be made by
or under the direction of Investec Asset Management U.S. Limited.
3. CLOSING AND EFFECTIVE TIME
3.1. The Reorganization, together with related acts necessary to
consummate the same ("Closing"), shall occur at the Funds' principal
offices, located at 1055 Washington Blvd., Stamford, CT 06901 on
____________, 2001, or at such other place and/or on such other date
upon which the parties may agree. All acts taking place at the
Closing shall be deemed to take place simultaneously as of the close
of business on the date thereof or at such other time upon which the
parties may agree ("Effective Time"). If, immediately before the
Valuation Time, (a) the NYSE is closed to trading or trading thereon
is restricted or (b) trading or the reporting of trading on the NYSE
or elsewhere is disrupted, so that accurate appraisal of the net
value of Target and the NAV for Acquiring Fund is impracticable, the
Effective Time shall be postponed until the first business day after
the day when such trading shall have been fully resumed and such
reporting shall have been restored.
3.2. Target shall deliver to the Trust at the Closing a schedule of its
Assets as of the Effective Time, which shall set forth for all
portfolio securities included therein their adjusted tax bases and
holding periods by lot. Target's custodian shall deliver at the
Closing a certificate of an authorized officer stating that (a) the
Assets held by the custodian will be transferred to Acquiring Fund
at the Effective Time and (b) all necessary taxes in conjunction
with the delivery of the Assets, including all applicable federal
and state stock transfer stamps, if any, have been paid or provision
for payment has been made.
3.3. The Transfer Agent shall deliver at the Closing a certificate as to
the opening on Acquiring Fund's share transfer books of accounts in
the names of Target's Shareholders. The Trust shall issue and
deliver a confirmation to Target evidencing Acquiring Fund's Shares
to be credited to Target at the Effective Time or provide evidence
satisfactory to Target that Acquiring Fund's Shares have been
credited to Target's account on Acquiring Fund's books. At the
Closing, each party shall deliver
21
to the other such bills of sale, checks, assignments, stock
certificates, receipts, or other documents as the other party or its
counsel may reasonably request.
3.4. The Trust, on behalf of Target and Acquiring Fund, respectively,
shall deliver at the Closing a certificate executed in its name by
its President or a Vice President and dated as of the Effective
Time, to the effect that the representations and warranties it made
in this Agreement are true and correct in all material respects at
the Effective Time, with the same force and effect as if made at and
as of the Effective Time, except as they may be affected by the
transactions contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES
4.1. Target represents and warrants as follows:
4.1.1. At the Closing, Target will have good and marketable title to
its Assets and full right, power, and authority to sell, assign,
transfer, and deliver its Assets free of any liens or other
encumbrances; and upon delivery and payment for the Assets,
Acquiring Fund will acquire good and marketable title thereto;
4.1.2. Acquiring Fund's Shares are not being acquired for the
purpose of making any distribution thereof, other than in
accordance with the terms hereof;
4.1.3. Target's current prospectus and statement of additional
information conform in all material respects to the applicable
requirements of the Securities Act of 1933, as amended (the "1933
Act"), and the Investment Company Act of 1940, as amended (the
"1940 Act"), and the rules and regulations thereunder, and do not
include any untrue statement of a material fact or omit any
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading;
4.1.4. Target is not in violation of, and the execution and
delivery of this Agreement and consummation of the transactions
contemplated hereby will not (a) conflict with or violate
Delaware law or any provision of the Trust's Trust Instrument or
By-laws or of any agreement, instrument, lease, or other
undertaking to which Target is a party or by which it is bound or
(b) result in the acceleration of any obligation, or the
imposition of any penalty, under any agreement, judgment, or
decree to which Target is a party or by which it is bound, except
as previously disclosed in writing to and accepted by the Trust;
4.1.5. Except as otherwise disclosed in writing to and accepted by
the Trust, all material contracts and other commitments of or
applicable to Target (other than this Agreement and investment
contracts, including options and futures) will be terminated, or
provision for discharge of any liabilities of Target thereunder
will be made, at or prior to the Effective Time, without Target
incurring any liability or penalty with respect thereto and
without diminishing or releasing any rights Target may have had
with respect to actions taken or not taken by any other party
thereto prior to the Closing;
22
4.1.6. Except as otherwise disclosed in writing to and accepted by
the Trust on behalf of Acquiring Fund, no litigation,
administrative proceeding, or investigation of or before any
court or governmental body is presently pending or (to Target's
knowledge) threatened against Target or any of its properties or
assets that, if adversely determined, would materially and
adversely affect Target's financial condition or the conduct of
its business; Target knows of no facts that might form the basis
for the institution of any such litigation, proceeding, or
investigation and is not a party to or subject to the provisions
of any order, decree, or judgment of any court or governmental
body that materially or adversely affects its business or its
ability to consummate the transactions contemplated hereby;
4.1.7. The execution, delivery, and performance of this Agreement
has been duly authorized as of the date hereof by all necessary
action on the part of the Trust's Board of Trustees on behalf of
Target, which has made the determinations required by Rule
17a-8(a) under the 1940 Act; and, subject to approval by Target's
shareholders and receipt of any necessary exemptive relief or
no-action assurances requested from the Securities and Exchange
Commission ("SEC") or its staff with respect to Sections 17(a)
and 17(d) of the 1940 Act, this Agreement will constitute a valid
and legally binding obligation of Target, enforceable in
accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, and similar laws relating to or affecting creditors'
rights and by general principles of equity;
4.1.8. At the Effective Time, the performance of this Agreement
shall have been duly authorized by all necessary action by
Target's shareholders;
4.1.9. No governmental consents, approvals, authorizations, or
filings are required under the 1933 Act, the Securities Exchange
Act of 1934, as amended ("1934 Act"), or the 1940 Act for the
execution or performance of this Agreement by Target, except for
(a) a proxy statement ("Proxy Statement"), the information for
which is included in a combined prospectus and proxy statement
filed by Acquiring Fund with the SEC on Form N-14, (b) receipt of
the exemptive relief or no-action assurances referenced in
subparagraph 4.1.7, and (c) such consents, approvals,
authorizations, and filings as have been made or received or as
may be required subsequent to the Effective Time;
4.1.10.On the effective date of the Registration Statement, at the
time of the shareholders' meeting referred to in paragraph 5.2,
and at the Effective Time, the Proxy Statement will (a) comply in
all material respects with the applicable provisions of the 1933
Act, the 1934 Act, and the 1940 Act and the rules and regulations
thereunder and (b) not contain any untrue statement of a material
fact or omit any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which such statements were made, not
misleading. This provision shall not apply to statements in or
omissions from the Proxy Statement made in reliance on and in
conformity with information furnished by the Trust for use
therein.
23
4.2. Acquiring Fund represents and warrants as follows:
4.2.1. Acquiring Fund's Shares to be issued and delivered to
Target hereunder will, at the Effective Time, have been duly
authorized and, when issued and delivered as provided herein,
will be duly and validly issued and outstanding shares of
Acquiring Fund, fully paid and nonassessable by the Trust (except
as disclosed in the Trust's then current prospectus and statement
of additional information). Except as contemplated by this
Agreement, Acquiring Fund does not have outstanding any options,
warrants, or other rights to subscribe for or purchase any of its
shares, nor is there outstanding any security convertible into
any of its shares;
4.2.2. Acquiring Fund's current prospectus and statement of
additional information conform in all material respects to the
applicable requirements of the 1933 Act and the 1940 Act and the
rules and regulations thereunder and do not include any untrue
statement of a material fact or omit any material fact required
to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading;
4.2.3. Acquiring Fund is not in violation of, and the execution
and delivery of this Agreement and consummation of the
transactions contemplated hereby (a) will not conflict with or
violate Delaware law or any provision of the Trust's Trust
Instrument or By-laws or any provision of any agreement,
instrument, lease, or other undertaking to which Acquiring Fund
is a party or by which it is bound or (b) result in the
acceleration of any obligation, or the imposition of any penalty,
under any agreement, judgment, or decree to which Acquiring Fund
is a party or by which it is bound, except as previously
disclosed in writing to and accepted by the Trust;
4.2.4. Except as otherwise disclosed in writing to and accepted by
the Trust on behalf of Target, no litigation, administrative
proceeding, or investigation of or before any court or
governmental body is presently pending or (to Acquiring Fund's
knowledge) threatened against the Trust with respect to Acquiring
Fund or any of its properties or assets that, if adversely
determined, would materially and adversely affect Acquiring
Fund's financial condition or the conduct of its business;
Acquiring Fund knows of no facts that might form the basis for
the institution of any such litigation, proceeding, or
investigation and is not a party to or subject to the provisions
of any order, decree, or judgment of any court or governmental
body that materially or adversely affects its business or its
ability to consummate the transactions contemplated hereby;
4.2.5. The execution, delivery, and performance of this Agreement
has been duly authorized as of the date hereof by all necessary
action on the part of the Trust's Board of Trustees on behalf of
Acquiring Fund, which has made the determinations required by
Rule 17a-8(a) under the 1940 Act; and, subject to receipt of any
necessary exemptive relief or no-action assurances requested from
the SEC or its staff with respect to Sections 17(a) and 17(d) of
the 1940 Act, this
24
Agreement will constitute a valid and legally binding obligation of
Acquiring Fund, enforceable in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium, and similar laws relating to
or affecting creditors' rights and by general principles of equity;
4.2.6. No governmental consents, approvals, authorizations, or
filings are required under the 1933 Act, the 1934 Act, or the
1940 Act for the execution or performance of this Agreement by
the Trust, except for (a) the filing with the SEC of the
Registration Statement and a post-effective amendment to the
Trust's registration statement on Form N-14, (b) receipt of the
exemptive relief or no-action assurances referenced in
subparagraph 4.2.5, and (c) such consents, approvals,
authorizations, and filings as have been made or received or as
may be required subsequent to the Effective Time;
4.3. The Trust, on behalf of each Fund, represents and warrants to the
other as follows:
4.3.1. The Trust is a business trust that is duly organized,
validly existing, and in good standing under the laws of the
State of Delaware; and a copy of its Certificate of Trust is on
file with the Secretary of the State of Delaware;
4.3.2. The Trust is duly registered as an open-end management
investment company under the 1940 Act, and such registration will
be in full force and effect at the Effective Time;
4.3.3. Each Fund is a duly established and designated series of
the Trust.
5. COVENANTS
5.1. Each Fund covenants to operate its respective business in the
ordinary course between the date hereof and the Closing, it being
understood that (a) such ordinary course will include declaring and
paying customary dividends and other distributions and such changes
in operations as are contemplated by each Fund's normal business
activities and (b) each Fund will retain exclusive control of the
composition of its portfolio until the Closing, provided that Target
shall not dispose of more than an insignificant portion of its
historic business assets during such period without Acquiring Fund's
prior consent.
5.2. Target covenants to call a special meeting of shareholders to
consider and act upon this Agreement and to take all other action
necessary to obtain approval of the transactions contemplated hereby.
5.3. Target covenants that Acquiring Fund's Shares to be delivered
hereunder are not being acquired for the purpose of making any
distribution thereof, other than in accordance with the terms hereof.
5.4. Target covenants that it will assist the Trust in obtaining such
information as the Trust reasonably requests concerning the
beneficial ownership of Target's Shares.
25
5.5. Target covenants that its books and records (including all books and
records required to be maintained under the 1940 Act and the rules
and regulations thereunder) will be turned over to the Trust at the
Closing.
5.6. Each Fund covenants to cooperate in preparing the Proxy Statement in
compliance with applicable federal securities laws.
5.7. Each Fund covenants that it will, from time to time, as and when
requested by the other Fund, execute and deliver or cause to be
executed and delivered all such assignments and other instruments,
and will take or cause to be taken such further action, as the other
Fund may deem necessary or desirable in order to vest in, and
confirm to (a) Acquiring Fund, title to and possession of all
Target's Assets, and (b) Target, title to and possession of
Acquiring Fund's Shares to be delivered hereunder, and otherwise to
carry out the intent and purpose hereof.
5.8. Acquiring Fund covenants to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act,
and such state securities laws as it may deem appropriate in order
to continue its operations after the Effective Time.
5.9. Subject to this Agreement, each Fund covenants to take or cause to
be taken all actions, and to do or cause to be done all things,
reasonably necessary, proper, or advisable to consummate and
effectuate the transactions contemplated hereby.
6. CONDITIONS PRECEDENT
6.1. Each Fund's obligations hereunder shall be subject to (a)
performance by the other Fund of all the obligations to be performed
hereunder at or before the Effective Time, (b) all representations
and warranties of the other Fund contained herein being true and
correct in all material respects as of the date hereof and, except
as they may be affected by the transactions contemplated hereby, as
of the Effective Time, with the same force and effect as if made at
and as of the Effective Time, and (c) the following further
conditions that, at or before the Effective Time:
6.1.1. This Agreement and the transactions contemplated hereby
shall have been duly adopted and approved by the Trust's Board of
Trustees on behalf of Target and Acquiring Fund and shall have
been approved by Target's shareholders in accordance with
applicable law.
6.1.2. All necessary filings shall have been made with the SEC and
state securities authorities, and no order or directive shall
have been received that any other or further action is required
to permit the parties to carry out the transactions contemplated
hereby. The Registration Statement shall have become effective
under the 1933 Act, no stop orders suspending the effectiveness
thereof shall have been issued, and the SEC shall not have issued
an unfavorable report with respect to the Reorganization under
Section 25(b) of the 1940 Act nor instituted any proceedings
seeking to enjoin consummation of the transactions contemplated
hereby under Section 25(c) of the 1940 Act. All consents,
orders, and permits of
26
federal, state, and local regulatory authorities (including the SEC
and state securities authorities) deemed necessary by either Fund to
permit consummation, in all material respects, of the transactions
contemplated hereby shall have been obtained, except where failure
to obtain the same would not involve a risk of a material adverse
effect on the assets or properties of the Fund.
6.1.3. At the Effective Time, no action, suit, or other proceeding
shall be pending before any court or governmental agency in which
it is sought to restrain or prohibit, or to obtain damages or
other relief in connection with, the transactions contemplated
hereby.
6.1.4. Target shall have received an opinion of Kramer Levin
Naftalis & Frankel LLP, counsel to the Trust ("Counsel"),
substantially to the effect that:
6.1.4.1. Acquiring Fund is a validly existing series of the Trust, a
business trust duly formed and validly existing and in good
standing under the laws of the State of Delaware with the
power under its Trust Instrument to carry on its business
and to own all of its properties and assets;
6.1.4.2. This Agreement (a) has been duly authorized and executed by
the Trust on behalf of Acquiring Fund and (b) assuming due
authorization, execution, and delivery of this Agreement by
Target, is a legal, valid and binding obligation of
Acquiring Fund, enforceable against Acquiring Fund in
accordance with its terms, except as such enforceability
may be limited by (i) bankruptcy, insolvency,
reorganization, receivership, fraudulent conveyance,
moratorium or other laws of general application relating to
or affecting the enforcement of creditors' rights and
remedies, as from time to time in effect, (ii) application
of equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or
at law) and (iii) principles of course of dealing or course
of performance and standards of good faith, fair dealing,
materiality and reasonableness that may be applied by a
court to the exercise of rights and remedies;
6.1.4.3. Acquiring Fund's Shares to be issued and delivered to the
Shareholders under this Agreement, assuming their due
delivery as contemplated by this Agreement, will be duly
authorized and validly issued and outstanding and fully
paid and nonassessable (except as disclosed in the Trust's
then current prospectus and statement of additional
information);
6.1.4.4. The execution and delivery of this Agreement did not, and
the consummation of the transactions contemplated hereby
will not (a) materially violate the Trust's Trust
Instrument or By-laws or any provision of any agreement to
which the Trust (with respect to Acquiring Fund) is a party
or by which it is bound or (b) to the knowledge of Counsel,
result in the acceleration of any obligation, or the
imposition of any penalty, under any agreement, judgment,
or decree known to Counsel to which the Trust (with respect
to Acquiring Fund) is a party or by which it (with respect
to
27
Acquiring Fund) is bound, except as set forth in such
opinion or as previously disclosed in writing to and
accepted by the Trust;
6.1.4.5. To the knowledge of Counsel, no consent, approval,
authorization or order of any Delaware or Federal Court or
governmental authority of the State of Delaware or the
United States of America is required for the consummation
by the Trust on behalf of Acquiring Fund, of the
transactions contemplated by the Agreement, except such as
may be required under the 1933 Act, the 1934 Act and the
1940 Act and under securities laws of states other than the
State of Delaware;
6.1.4.6. The Trust is registered with the SEC as an investment
company, and to the knowledge of Counsel no order has been
issued or proceeding instituted to suspend such
registration; and
6.1.4.7. To the knowledge of Counsel, (a) no litigation,
administrative proceeding, or investigation of or before
any court or governmental body is pending or threatened as
to the Trust (with respect to Acquiring Fund) or any of its
properties or assets attributable or allocable to Acquiring
Fund and (b) the Trust (with respect to Acquiring Fund) is
not a party to or subject to the provisions of any order,
decree, or judgment of any court or governmental body that
materially and adversely affects Acquiring Fund's business,
except as set forth in such opinion or as otherwise
disclosed in writing to and accepted by the Trust.
In rendering such opinion, Counsel may (i) rely, as to matters
governed by the laws of the State of Delaware, on an opinion of
competent Delaware counsel, (ii) make assumptions regarding the
authenticity, genuineness, and/or conformity of documents and
copies thereof without independent verification thereof, and other
customary assumptions as the parties may agree, (iii) limit such
opinion to applicable federal and state law, (iv) define the word
"knowledge" and related terms to mean the knowledge of attorneys
then with such firm who have devoted substantive attention to
matters directly related to this Agreement and the Reorganization;
and (v) rely on certificates of officers or trustees of the Trust,
in each case reasonably acceptable to the Trust.
6.1.5. Acquiring Fund shall have received an opinion of Counsel,
substantially to the effect that:
6.1.5.1. Target is a validly existing series of the Trust, a
business trust duly organized and validly existing and in
good standing under the laws of the State of Delaware with
power under its Trust Instrument to own all of its
properties and assets and, to the knowledge of Counsel, to
carry on its business as presently conducted;
6.1.5.2. This Agreement (a) has been duly authorized and executed by
the Trust on behalf of Target and (b) assuming due
authorization, execution, and
28
delivery of this Agreement by the Trust on behalf of Acquiring
Fund, is a legal, valid and binding obligation of Target,
enforceable against Target in accordance with its terms,
except as such enforceability may be limited by (i)
bankruptcy, insolvency, reorganization, receivership,
fraudulent conveyance, moratorium or other laws of general
application relating to or affecting the enforcement of
creditors' rights and remedies, as from time to time in
effect, (ii) application of equitable principles (regardless
of whether such enforceability is considered in a proceeding
in equity or at law) and (iii) principles of course of dealing
or course of performance and standards of good faith, fair
dealing, materiality and reasonableness that may be applied by
a court to the exercise of rights and remedies;
6.1.5.3. The execution and delivery of this Agreement did not, and
the consummation of the transactions contemplated hereby
will not, (a) materially violate the Trust's Trust
Instrument or By-laws or any provision of any agreement
known to Counsel, to which the Trust (with respect to
Target) is a party or by which it is bound or (b) to the
knowledge of such counsel, result in the acceleration of
any obligation, or the imposition of any penalty, under any
agreement, judgment, or decree known to Counsel to which
the Trust (with respect to Target) is a party or by which
it (with respect to Target) is bound, except as set forth
in such opinion or as previously disclosed in writing to
and accepted by the Trust;
6.1.5.4. To the knowledge of Counsel, no consent, approval,
authorization or order of any Delaware or Federal Court or
governmental authority of the State of Delaware or the
United States of America is required for the consummation
by the Trust on behalf of Target, of the transactions
contemplated by the Agreement, except such as may be
required under the 1933 Act, the 1934 Act and the 1940 Act
and under securities laws of states other than the State of
Delaware;
6.1.5.5. The Trust is registered with the SEC as an investment
company, and to the knowledge of Counsel no order has been
issued or proceeding instituted to suspend such
registration; and
6.1.5.6. To the knowledge of Counsel, (a) no litigation,
administrative proceeding, or investigation of or before
any court or governmental body is pending or threatened as
to the Trust (with respect to Target) or any of its
properties or assets attributable or allocable to Target
and (b) the Trust (with respect to Target) is not a party
to or subject to the provisions of any order, decree, or
judgment of any court or governmental body that materially
and adversely affects Target's business, except as set
forth in such opinion or as otherwise disclosed in writing
to and accepted by the Trust.
In rendering such opinion, Counsel may (i) rely, as to matters
governed by the laws of the State of Delaware, on an opinion of
competent Delaware counsel, (ii) make assumptions regarding the
authenticity, genuineness, and/or conformity of
29
documents and copies thereof without independent verification
thereof, and other customary assumptions as the parties may agree,
(iii) limit such opinion to applicable federal and state law, (iv)
define the word "knowledge" and related terms to mean the knowledge
of attorneys then with such firm who have devoted substantive
attention to matters directly related to this Agreement and the
Reorganization, and (v) rely on certificates of officers or trustees
of Target; in each case reasonably acceptable to the Trust.
6.1.6. The Trust, on behalf of Target and Acquiring Fund, shall
have received an opinion of Counsel addressed to and in
form and substance reasonably satisfactory to it, as to the
federal income tax consequences of the Reorganization ("Tax
Opinion"). In rendering the Tax Opinion, Counsel may rely
as to factual matters, exclusively and without independent
verification, on the representations made in this Agreement
(and/or in separate letters addressed to Counsel) and each
Fund's separate covenants. Each Fund agrees to make
reasonable covenants and representations as to factual
matters as of the Effective Time in connection with the
rendering of such opinion.
6.2. At any time before the Closing, either Fund may waive any of the
foregoing conditions if, in the judgment of the Trust's Board of
Trustees, such waiver will not have a material adverse effect on its
shareholders' interests.
7. BROKERAGE FEES AND EXPENSES
7.1. The Trust, on behalf of each Fund, represents and warrants that
there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
7.2. Investec Asset Management U.S. Limited will be responsible for paying
all expenses incurred in connection with the Reorganization.
8. ENTIRE AGREEMENT; SURVIVAL
8.1. Neither party has made any representation, warranty, or covenant not
set forth herein, and this Agreement constitutes the entire
agreement between the parties. The representations, warranties, and
covenants contained herein or in any document delivered pursuant
hereto or in connection herewith shall survive the Closing.
9. TERMINATION OF AGREEMENT
9.1. This Agreement may be terminated at any time at or prior to the
Effective Time, whether before or after approval by Target's
Shareholders:
9.1.1. By either Fund (a) in the event of a material breach of any
representation, warranty, or covenant contained herein to be
performed at or prior to the Effective Time, (b) if a condition
to its obligations has not been met and it reasonably
30
appears that such condition will not or cannot be met, or (c) if the
Closing has not occurred on or before _____________, 2002; or
9.1.2. By the parties' mutual agreement.
9.2. In the event of termination under paragraphs 9.1.1(a), (b) or (c) or
9.1.2, there shall be no liability for damages on the part of either
Fund affected by the termination, or the trustees or officers of the
Trust, to the other Fund.
10. AMENDMENT
10.1. This Agreement may be amended, modified, or supplemented at any
time, notwithstanding approval thereof by Target's Shareholders, in
such manner as may be mutually agreed upon in writing by the
parties; provided that following such approval no such amendment
shall have a material adverse effect on such Shareholders' interests.
11. MISCELLANEOUS
11.1. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware; provided that, in the
case of any conflict between such laws and the federal securities
laws, the latter shall govern.
11.2. Nothing expressed or implied herein is intended or shall be
construed to confer upon or give any person, firm, trust, or
corporation other than the parties and their respective successors
and assigns any rights or remedies under or by reason of this
Agreement.
11.3. The parties acknowledge that the Trust is a business trust. Notice
is hereby given that this instrument is executed on behalf of the
Trust's Trustees solely in their capacity as trustees, and not
individually, and that the Trust's obligations under this instrument
on behalf of each Fund are not binding on or enforceable against any
of its trustees, officers, or shareholders, but are only binding on
and enforceable against the respective Funds' assets and property.
Each Fund agrees that, in asserting any rights or claims under this
Agreement, it shall look only to the corresponding Fund's assets and
property in settlement of such rights or claims and not to such
Trustees or shareholders or to the assets of any other series of the
Trust.
11.4. The Trust agrees to indemnify and hold harmless each Trustee of the
Trust at the time of the execution of this Agreement against
expenses, including reasonable attorneys' fees, judgments, fines and
amounts paid in settlement, actually and reasonably incurred by such
Trustee in connection with any claim that is asserted against such
trustee arising out of such person's service as a Trustee of the
Trust, provided that such indemnification shall be limited to the
full extent of the indemnification that is available to the Trustees
of the Trust pursuant to the provisions of the Trust's Trust
Instrument and applicable law.
31
11.5 The Trust, on behalf of each Fund, hereby waives any conflict
arising out of the representation of each Fund by Counsel.
IN WITNESS WHEREOF, each party has caused this Agreement to be executed
by its duly authorized officer.
ATTEST: INVESTEC FUNDS, on behalf of the
[Investec Wireless World FundTM]
[Investec internet.com FundTM]
By: _________________________________ By: ________________________________
Eric M. Banhazl Royce N. Brennan
Secretary President
ATTEST: INVESTEC FUNDS, on behalf of the
Investec Wired(R)Index Fund
By: _________________________________ By: ________________________________
Eric M. Banhazl Royce N. Brennan
Secretary President
Part B
STATEMENT OF ADDITIONAL INFORMATION
_______, 2001
Acquisition of the Assets of
INVESTEC FUNDS
Wireless World FundTM
internet.comTM Index Fund
by and in exchange for all the shares of
INVESTEC FUNDS
Wired(R) Index Fund
This Statement of Additional Information dated __________, 2001, is not a
prospectus, but should be read in conjunction with the Combined Proxy Statement
and Prospectus dated ___________, 2001. This Statement of Additional Information
is incorporated by reference in its entirety into the Combined Proxy Statement
and Prospectus. Copies of the Combined Proxy Statement and Prospectus may be
obtained by writing Investec Funds at 1055 Washington Blvd., 3rd Floor,
Stamford, CT 06901 or by calling toll free 1-800-915-6565.
TABLE OF CONTENTS
Page
Statement of Additional Information of the Investec Wired(R) Index
Fund, the Investec Wireless World FundTM, and the Investec
internet.comTM Index Fund, all of which are series of the Investec
Funds, dated April 26, 2001. 2
Financial Statements of the Investec Wired(R) Index Fund , the
Investec Wireless World FundTM, and the Investec internet.comTM
Index Fund, dated December 31, 2000 and June 30, 2001. 2
STATEMENT OF ADDITIONAL INFORMATION OF THE REGISTRANT AND OF
EACH COMPANY BEING ACQUIRED
The Statement of Additional Information of the Investec Wired(R) Index
Fund (the "Registrant"), the Investec Wireless World FundTM, and the Investec
internet.comTM Index Fund (each a "Company Being Acquired"), all of which are
series of the Investec Funds, dated April 26, 2001, as filed with the Securities
and Exchange Commission on April 26, 2001, pursuant to Rule 485(b) (File No.
33-75340) hereby is incorporated by reference. You may obtain a copy at no cost
by writing Investec Funds at 1055 Washington Blvd., 3rd Floor, Stamford, CT
06901 or by calling toll free 1-800-915-6565.
FINANCIAL STATEMENTS OF THE REGISTRANT AND OF EACH COMPANY BEING ACQUIRED
The audited and unaudited Financial Statements of the Investec Wired(R)
Index Fund (the "Registrant"), the Investec Wireless World FundTM, and the
Investec internet.comTM Index Fund (each a "Company Being Acquired"), all of
which are series of the Investec Funds, are incorporated by reference to the
Annual Report and Semi-Annual Report of the Investec Funds (File No. 33-75340)
dated December 31, 2000 and June 30, 2001, respectively. You may obtain copies
at no cost by writing Investec Funds at 1055 Washington Blvd., 3rd Floor,
Stamford, CT 06901 or by calling toll free 1-800-915-6565.
The following unaudited pro forma financial information combines the
Schedules of Portfolio Investments, the Statements of Assets and Liabilities,
and the Statements of Operations, as of September 30, 2001, of the Investec
Wireless World Fund(TM), Investec Internet.com(TM) Index Fund and the Investec
Wired(R) Index Fund to reflect the reorganization of the Investec Wireless World
Fund(TM) and the Investec Internet.com(TM) Index Fund into the Investec Wired(R)
Index Fund. The pro forma financial information shows the expected effect of the
reorganization transaction on the Investec Wired(R) Index Fund.
INVESTEC INTERNET.COMTM INDEX FUND, INVESTEC WIRED(R) INDEX AND
INVESTEC WIRELESS WORLD FUNDTM
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2001
(UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
internet.comTM Wired(R) Wireless internet.comTM Wired(R)
Index Fund Index Fund World FundTM Pro Forma Index Fund Index Fund
(Historical) (Historical) (Historical) Combined (Historical) (Historical)
- -------------- ------------ ------------ --------- ------------- --------------
Automobile
- 78,175 - 78,175 DaimlerChrysler AG $ - $ 2,343,687.00
------------ --------------
Banking
- 41,854 - 41,854 State Street Corp. - 1,904,357
------------ --------------
Biological Research
- 8,148 - 8,148 Affymetrix, Inc.* - 130,775
- 50,190 - 50,190 Aventis S.A. - 3,768,767
- 9,400 - 9,400 INCYTE Pharmaceuticals, Inc.* - 128,404
------------- --------------
- 4,027,946
------------- --------------
Biopharmaceuticals
- 28,400 - 28,400 Millennium Pharmaceuticals, Inc.* - 504,384
------------- --------------
Business & Information Services
- - 30,820 30,820 Accenture Ltd. - -
------------- --------------
Communication Services
- 29,200 - 29,200 WPP Group Plc - 1,076,677
------------- --------------
Computer Equipment
- - 94,250 94,250 Asustek Computer, Inc. - -
15,490 227,010 - 242,500 Cisco Systems, Inc.* 188,668 2,764,982
- - 44,700 44,700 M-Systems Flash Disk Pioneers, Ltd. - -
- - 236,679 236,679 Parthus Technologies Plc - -
------------- --------------
188,668 2,764,982
------------- --------------
Computer Services
- - 6,500 6,500 Electronic Data Systems Corp. - -
- - 21,300 21,300 Logica Plc - -
------------- --------------
- -
------------- --------------
Computer Storage Devices
- 96,366 - 96,366 Emc Corp./Mass* - 1,132,301
------------- --------------
Computers
- - 2,700 2,700 International Business Machines Corp. - -
17,910 225,180 - 243,090 Sun Microsystems, Inc.* 148,116 1,862,239
------------- --------------
148,116 1,862,239
------------- --------------
Consumer Electronics
- 50,338 - 50,338 Sony Corp. - 1,671,222
------------- --------------
- ---------------------------------------------------------------------------------------------
Value
- ---------------------------------------------------------------------------------------------
Wireless
World FundTM Pro Forma Pro Forma
(Historical) Adjust Combined
------------ ------------ ---------------
Automobile
DaimlerChrysler AG $ - $ - $ 2,343,687.00
------------ ------------ --------------
Banking
State Street Corp. - - 1,904,357
------------ ------------ --------------
Biological Research
Affymetrix, Inc.* - - 130,775
Aventis S.A. - - 3,768,767
INCYTE Pharmaceuticals, Inc.* - - 128,404
------------ ------------ --------------
- - 4,027,946
------------ ------------ --------------
Biopharmaceuticals
Millennium Pharmaceuticals, Inc.* - - 504,384
------------ ------------ --------------
Business & Information Services
Accenture Ltd. 392,955 (392,955) -
------------ ------------ --------------
Communication Services
WPP Group Plc - - 1,076,677
------------ ------------ --------------
Computer Equipment
Asustek Computer, Inc. 282,665 (282,665) -
Cisco Systems, Inc.* - - 2,953,650
M-Systems Flash Disk Pioneers, Ltd. 189,081 (189,081) -
Parthus Technologies Plc 70,454 (70,454) -
------------ ------------ --------------
542,200 (542,200) 2,953,650
------------ ------------ --------------
Computer Services
Electronic Data Systems Corp. 374,270 (374,270) -
Logica Plc 211,349 (211,349) -
------------ ------------ --------------
585,619 (585,619) -
------------ ------------ --------------
Computer Storage Devices
Emc Corp./Mass* - - 1,132,301
------------ ------------ --------------
Computers
International Business Machines Corp. 249,210 (249,210) -
Sun Microsystems, Inc.* - - 2,010,355
------------ ------------ --------------
249,210 (249,210) 2,010,355
------------ ------------ --------------
Consumer Electronics
Sony Corp. - - 1,671,222
------------ ------------ --------------
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
internet.comTM Wired(R) Wireless internet.comTM Wired(R)
Index Fund Index Fund World FundTM Pro Forma Index Fund Index Fund
(Historical) (Historical) (Historical) Combined (Historical) (Historical)
- -------------- ------------ ------------ --------- -------------- --------------
Consulting Services
9,140 - - 9,140 Sapient Corp. 35,189 -
3,330 - - 3,330 Wireless Facilities, Inc. 14,885 -
------------- --------------
50,074 -
------------- --------------
Electronics Manufacturing
- - 8,700 8,700 ASM International, N.V. - -
- 60,530 - 60,530 Flextronics International Ltd.* - 1,001,166
- - 15,300 15,300 Intersil Holding Corp. - -
- - 14,900 14,900 Philips Electronics N.V. - -
- - 10,010 10,010 Samsung Electronics - -
------------- --------------
- 1,001,166
------------- --------------
Energy / Petroleum
- 61,410 - 61,410 Enron Corp. - 1,672,194
------------- --------------
Entertainment
- 126,945 - 126,945 Walt Disney Co. - 2,363,716
------------- --------------
E-Tailers and E-Commerce
20,120 - - 20,120 Amazon.com, Inc. 120,116 -
------------- --------------
Financial Services
- 177,163 - 177,163 Charles Schwab & Co., Inc. - 2,037,375
- 50,682 6,300 56,982 First Data Corp. - 2,952,733
------------- --------------
- 4,990,108
------------- --------------
Holding Offices
- - 76,860 76,860 Nordic Baltic Holding (NBH) AB - -
------------- --------------
Hotel Management - -
- 31,353 - 31,353 Marriott International, Inc. - Class A - 1,047,190
------------- --------------
- 1,047,190
------------- --------------
Industry Machinery
- 70,682 - 70,682 Applied Materials, Inc.* - 2,010,196
------------- --------------
Insurance
- 47,115 - 47,115 American International Group, Inc. - 3,674,970
------------- --------------
Internet Content
26,070 - - 26,070 CMGI, Inc. 26,070 -
10,260 - - 10,260 CNET, Inc. 44,118 -
9,900 - - 9,900 Doubleclick, Inc. 56,430 -
8,140 - - 8,140 HomeStore.com, Inc. 62,271 -
24,620 - - 24,620 InfoSpace, Inc. 36,438 -
9,560 - - 9,560 Inktomi Corp. 26,194 -
2,250 - - 2,250 Multex.com, Inc. 4,658 -
4,450 - - 4,450 S1 Corp. 37,647 -
------------- --------------
293,826 -
------------- --------------
- -----------------------------------------------------------------------------------------
Value
- -----------------------------------------------------------------------------------------
Wireless
World FundTM Pro Forma Pro Forma
(Historical) Adjust Combined
----------- ------------ -----------
Consulting Services
Sapient Corp. - (35,189) -
Wireless Facilities, Inc. - (14,885) -
----------- ------------ -----------
- (50,074) -
----------- ------------ -----------
Electronics Manufacturing
ASM International, N.V. 100,050 (100,050) -
Flextronics International Ltd.* - - 1,001,166
Intersil Holding Corp. 427,176 (427,176) -
Philips Electronics N.V. 288,854 (288,854) -
Samsung Electronics 589,589 (589,589) -
----------- ------------ -----------
1,405,669 (1,405,669) 1,001,166
----------- ------------ -----------
Energy / Petroleum
Enron Corp. - - 1,672,194
----------- ------------ -----------
Entertainment
Walt Disney Co. - - 2,363,716
----------- ------------ -----------
E-Tailers and E-Commerce
Amazon.com, Inc. - (120,116) -
----------- ------------ -----------
Financial Services
Charles Schwab & Co., Inc. - - 2,037,375
First Data Corp. 367,038 - 3,319,771
----------- ------------ -----------
367,038 - 5,357,146
----------- ------------ -----------
Holding Offices
Nordic Baltic Holding (NBH) AB 374,340 (374,340) -
----------- ------------ -----------
Hotel Management - -
Marriott International, Inc. - Class A - - 1,047,190
----------- ------------ -----------
- - 1,047,190
----------- ------------ -----------
Industry Machinery
Applied Materials, Inc.* - - 2,010,196
----------- ------------ -----------
Insurance
American International Group, Inc. - - 3,674,970
----------- ------------ -----------
Internet Content
CMGI, Inc. - (26,070) -
CNET, Inc. - (44,118) -
Doubleclick, Inc. - (56,430) -
HomeStore.com, Inc. - (62,271) -
InfoSpace, Inc. - (36,438) -
Inktomi Corp. - (26,194) -
Multex.com, Inc. - (4,658) -
S1 Corp. - (37,647) -
----------- ------------ -----------
- (293,826) -
----------- ------------ -----------
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
internet.comTM Wired(R) Wireless internet.comTM Wired(R)
Index Fund Index Fund World FundTM Pro Forma Index Fund Index Fund
(Historical) (Historical) (Historical) Combined (Historical) (Historical)
- -------------- ------------ ------------ --------- -------------- --------------
Internet Enablers
19,150 - - 19,150 Ariba, Inc. 35,619 -
6,600 - - 6,600 Broadcom Corp. 133,980 -
15,090 - - 15,090 Commerce One, Inc. 37,121 -
9,040 - - 9,040 Juniper Networks, Inc. 87,688 -
4,700 - - 4,700 net2Phone, Inc. 14,241 -
------------- --------------
308,649 -
------------- --------------
Internet / New Media
14,150 - - 14,150 Ameritrade Holding Corp. - Class A 56,741 -
5,320 76,594 - 81,914 AOL Time Warner, Inc.* 176,092 2,535,261
23,940 - - 23,940 E*trade Group, Inc. 144,837 -
4,110 34,400 - 38,510 eBay, Inc.* 188,032 1,573,800
4,290 - - 4,290 GOTO.com, Inc. 53,196 -
4,240 - - 4,240 Hotel Reservations Network, Inc. 96,418 -
10,600 - - 10,600 Ticketmaster Online - CitySearch, Inc. 109,710 -
14,070 71,578 - 85,648 Yahoo!, Inc.* 123,957 630,602
------------- --------------
948,983 4,739,663
------------- --------------
Internet Search/Portals
37,050 - - 37,050 Terra Networks S.A., ADR 188,585 -
------------- --------------
Internet Security
5,560 - 10,300 15,860 Check Point Software Technologies Ltd. 122,431 -
3,520 - - 3,520 Internet Security Systems, Inc. 32,067 -
12,160 - - 12,160 RealNetworks, Inc. 59,098 -
4,690 - - 4,690 VeriSign, Inc. 196,511 -
------------- --------------
410,107 -
------------- -------------
Internet Services
41,580 - - 41,580 Asia Global Crossing Ltd. 93,555 -
------------- -------------
Media - -
- 66,612 - 66,612 News Corp. Cayman ADR - 1,605,349
- 30,541 - 30,541 Reuters Group - Sponsored ADR - 1,595,767
------------- --------------
- 3,201,116
------------- --------------
Oil & Gas Services
- 58,386 - 58,386 Schlumberger Ltd. - 2,668,240
------------- --------------
Pharmaceuticals
- 72,286 - 72,286 GlaxoSmithKline Plc* - 4,056,690
------------- --------------
Retail
- 74,560 - 74,560 Wal-Mart Stores, Inc. - 3,690,720
------------- --------------
Semiconductors
- - 14,850 14,850 Infineon Technologies AG - -
- 124,580 - 124,580 Intel Corp. - 2,540,186
- - 2,500 2,500 Kla-Tencor Corp. - -
- - 20,802 20,802 Perlos Oyj - -
- - 145,000 145,000 Taiwan Semiconductor Manufacturing Co. Ltd. - -
------------- --------------
- 2,540,186
------------- --------------
- ---------------------------------------------------------------------------------------------
Value
- ---------------------------------------------------------------------------------------------
Wireless
World FundTM Pro Forma Pro Forma
(Historical) Adjust Combined
----------- ------------ -------------
Internet Enablers
Ariba, Inc. - (35,619) -
Broadcom Corp. - (133,980) -
Commerce One, Inc. - (37,121) -
Juniper Networks, Inc. - (87,688) -
net2Phone, Inc. - (14,241) -
---------- ------------ -------------
- (308,649) -
---------- ------------ -------------
Internet / New Media
Ameritrade Holding Corp. - Class A - (56,741) -
AOL Time Warner, Inc.* - - 2,711,353
E*trade Group, Inc. - (144,837) -
eBay, Inc.* - - 1,761,832
GOTO.com, Inc. - (53,196) -
Hotel Reservations Network, Inc. - (96,418) -
Ticketmaster Online - CitySearch, Inc. - (109,710) -
Yahoo!, Inc.* - - 754,559
---------- ------------ -------------
- (460,902) 5,227,744
---------- ------------ -------------
Internet Search/Portals
Terra Networks S.A., ADR - (188,585) -
---------- ------------ -------------
Internet Security
Check Point Software Technologies Ltd. 226,806 (349,237) -
Internet Security Systems, Inc. - (32,067) -
RealNetworks, Inc. - (59,098) -
VeriSign, Inc. - (196,511) -
---------- ------------ -------------
226,806 (636,913) -
---------- ------------ -------------
Internet Services
Asia Global Crossing Ltd. (93,555) -
---------- ------------ -------------
Media - - -
News Corp. Cayman ADR - - 1,605,349
Reuters Group - Sponsored ADR - - 1,595,767
---------- ------------ -------------
- - 3,201,116
---------- ------------ -------------
Oil & Gas Services
Schlumberger Ltd. - - 2,668,240
---------- ------------ -------------
Pharmaceuticals
GlaxoSmithKline Plc* - - 4,056,690
---------- ------------ -------------
Retail
Wal-Mart Stores, Inc. - - 3,690,720
---------- ------------ -------------
Semiconductors
Infineon Technologies AG 181,381 (181,381) -
Intel Corp. - - 2,540,186
Kla-Tencor Corp. 78,950 (78,950) -
Perlos Oyj 159,037 (159,037) -
Taiwan Semiconductor Manufacturing Co. Ltd. 196,219 (196,219) -
---------- ------------ -------------
615,587 (615,587) 2,540,186
---------- ------------ -------------
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
internet.comTM Wired(R) Wireless internet.comTM Wired(R)
Index Fund Index Fund World FundTM Pro Forma Index Fund Index Fund
(Historical) (Historical) (Historical) Combined (Historical) (Historical)
- -------------- ------------ ------------ --------- -------------- --------------
Software
- - 8,900 8,900 Amdocs, Ltd. - -
4,760 - - 4,760 Art Technology Group, Inc. 3,332 -
26,670 - - 26,670 At Home Corp. 4,001 -
- - 8,600 8,600 BEA Systems, Inc. - -
20,840 31,200 - 52,040 BroadVision, Inc.* 18,964 28,392
9,810 - - 9,810 EarthLink, Inc. 149,406 -
40,380 - - 40,380 Exodus Communications, Inc. 7,067 -
14,430 51,800 - 66,230 i2 Technologies, Inc.* 49,639 178,192
7,790 - - 7,790 Liberate Technologies, Inc. 77,588 -
- 57,044 - 57,044 Microsoft Corp.* - 2,918,941
2,290 - - 2,290 Netegrity, Inc. 19,625 -
- - 5,000 5,000 Nvidia Corp - -
8,110 - - 8,11O penwave Systems, Inc. 103,403 -
- 238,870 - 238,870 Oracle Corp.* - 3,004,985
- 33,905 - 33,905 Parametric Technology Corp.* - 175,967
- - 8,100 8,100 Peoplesoft, Inc. - -
13,220 - - 13,220 Portal Software, Inc. 19,698 -
12,660 - - 12,660 Red Hat, Inc. 44,310 -
5,850 - - 5,850 Research In Motion Ltd. 94,068 -
4,290 - - 4,290 RSA Security, Inc. 57,743 -
20,460 - - 20,460 Sycamore Networks, Inc. 71,201 -
- - 5,400 5,400 THQ, Inc. - -
14,880 - - 14,880 TIBCO Software, Inc. 109,219 -
31,000 - - 31,000 Ulticom, Inc. 25,048 -
18,610 - - 18,610 Vignette Corp. 65,879 -
------------- --------------
920,191 6,306,477
------------- --------------
Specialty Steel
- 10,141 - 10,141 Nucor Corp. - 402,598
------------- --------------
Telecommunications
- - 21,700 21,700 AT&T Wireless Services, Inc. - -
- - 17,300 17,300 Motorola, Inc. - -
- - 35 NTT DoCoMo, Inc. - -
- 94,618 - 94,618 Qwest Communications International* - 1,580,121
- - 9,100 9,100 SBC Communications, Inc. - -
- - 39,760 39,760 TTI Team Telecom International Ltd. - -
- - 20,400 20,400 Utstarcom, Inc. - -
------------- --------------
- 1,580,121
------------- --------------
Telecommunications - Equipment
- 164,690 - 164,690 JDS Uniphase Corp.* - 1,040,841
------------- -------------
Transportation
- 38,144 - 38,144 FedEx Corp.* - 1,401,792
- 16,810 - 16,810 Sabre Holdings Corp.* - 449,499
------------- --------------
- 1,851,291
------------- --------------
- ------------------------------------------------------------------------------------------------------
Value
- ------------------------------------------------------------------------------------------------------
Wireless
World FundTM Pro Forma Pro Forma
(Historical) Adjust Combined
----------- ------------ -------------
Software
Amdocs, Ltd. 237,185 (237,185) -
Art Technology Group, Inc. - (3,332) -
At Home Corp. - (4,001) -
BEA Systems, Inc. 82,474 (82,474) -
BroadVision, Inc.* - (18,964) 28,392
EarthLink, Inc. - (149,406) -
Exodus Communications, Inc. - (7,067) -
i2 Technologies, Inc.* - - 227,831
Liberate Technologies, Inc. - (77,588) -
Microsoft Corp.* - - 2,918,941
Netegrity, Inc. - (19,625) -
Nvidia Corp 137,350 (137,350) -
penwave Systems, Inc. - (103,403) -
Oracle Corp.* - - 3,004,985
Parametric Technology Corp.* - - 175,967
Peoplesoft, Inc. 146,124 (146,124) -
Portal Software, Inc. - (19,698) -
Red Hat, Inc. - (44,310) -
Research In Motion Ltd. - (94,068) -
RSA Security, Inc. - (57,743) -
Sycamore Networks, Inc. - (71,201) -
THQ, Inc. 233,010 (233,010) -
TIBCO Software, Inc. - (109,219) -
Ulticom, Inc. - (25,048) -
Vignette Corp. - (65,879) -
----------- ----------- -----------
836,143 (1,706,695) 6,356,116
----------- ----------- -----------
Specialty Steel
Nucor Corp. - - 402,598
----------- ----------- -----------
Telecommunications
AT&T Wireless Services, Inc. 324,198 (324,198) -
Motorola, Inc. 269,880 (269,880) -
NTT DoCoMo, Inc. 473,052 (473,052) -
Qwest Communications International* - - 1,580,121
SBC Communications, Inc. 428,792 (428,792) -
TTI Team Telecom International Ltd. 475,132 (475,132) -
Utstarcom, Inc. 331,500 (331,500) -
----------- ----------- -----------
2,302,554 (2,302,554) 1,580,121
----------- ----------- -----------
Telecommunications - Equipment
JDS Uniphase Corp.* - - 1,040,841
----------- ----------- -----------
Transportation
FedEx Corp.* - - 1,401,792
Sabre Holdings Corp.* - - 449,499
----------- ----------- -----------
- - 1,851,291
----------- ----------- -----------
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
internet.comTM Wired(R) Wireless internet.comTM Wired(R)
Index Fund Index Fund World FundTM Pro Forma Index Fund Index Fund
(Historical) (Historical) (Historical) Combined (Historical) (Historical)
- -------------- ------------ ------------ --------- -------------- --------------
Wireless Communication Equipment
- 112,762 31,080 143,842 Nokia OYJ - 1,764,725
- - 5,100 5,100 QUALCOM, Inc. - -
43,010 - - 43,010 Palm, Inc. 62,795 -
- - 10,800 10,800 Sprint Corp. (PCS Group) - -
- - 5,900 5,900 Tekelec - -
- - 9,910 9,910 Verizon Communications - -
- 127,680 175,480 303,160 Vodafone AirTouch Public Ltd. - 2,803,853
------------- --------------
62,795 4,568,578
------------- --------------
Total Common Stocks
(cost $11,531,779, $99,911,189
and $15,364,473, respectively) 3,733,665 70,693,856
------------- --------------
Total Investments in Securities
(cost $11,531,779, $99,911,189
and $15,364,473, respectively+) 3,733,665 70,693,856
Other Assets less Liabilities 12,711 (765
------------- --------------
Net Assets $ 3,746,376 $ 70,693,091
============= =============
+ Cost for Federal income tax purposes
is the same.
Net unrealized appreciation (depreciation)
consists of:
Gross unrealized appreciation $ 169,760 $ 4,292,313
Gross unrealized depreciation (7,967,873) (33,509,646
------------ --------------
Net unrealized depreciation $ (7,798,113) $ (29,217,333
============ ==============
- ------------------------------------------------------------------------------------------------------
Value
- ------------------------------------------------------------------------------------------------------
Wireless
World FundTM Pro Forma Pro Forma
(Historical) Adjust Combined
------------ ------------- ------------
Wireless Communication Equipment
Nokia OYJ 507,760 - 2,272,485
QUALCOM, Inc. 242,454 (242,454) -
Palm, Inc. - (62,795) -
Sprint Corp. (PCS Group) 283,932 (283,932) -
Tekelec 77,703 (77,703) -
Verizon Communications 536,230 (536,230) -
Vodafone AirTouch Public Ltd. 386,934 - 3,190,787
------------ ------------- ------------
2,035,013 (1,203,114) 5,463,272
------------ ------------- ------------
Total Common Stocks
(cost $11,531,779, $99,911,189
and $15,364,473, respectively) 9,933,134 (11,530,563) 72,830,092
------------ ------------- ------------
Total Investments in Securities
(cost $11,531,779, $99,911,189
and $15,364,473, respectively+) 9,933,134 (11,530,563) 72,830,092
Other Assets less Liabilities 350,264 187,626 549,836
------------ ------------- ------------
Net Assets $ 10,283,398 $ (11,342,937) $ 73,379,928
============ ============= ============
+ Cost for Federal income tax purposes
is the same.
Net unrealized appreciation (depreciation)
consists of:
Gross unrealized appreciation $ 84,525 $ (206,654) $ 4,339,944
Gross unrealized depreciation (5,515,864) 10,680,997 (36,312,386)
------------ ------------- ------------
Net unrealized depreciation $ (5,431,339) $ 10,474,343 $ (31,972,442)
============ ============= ============
* Non-income producing security.
Adjustments represent securities to be sold in connection with the
reorganization.
See accompanying Notes to Pro Forma Combining Financial Statements.
INVESTEC INTERNET.COMTM INDEX FUND,
INVESTEC WIRED(R) INDEX FUND AND
INVESTEC WIRELESS WORLD FUNDTM
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2001
(UNAUDITED)
internet.com(TM) Wired(R) Wireless
Index Fund Index Fund World Fund(TM) Pro Forma Pro Forma
(Historical (Historical) (Historical) Adjust Combined
----------- ------------ ------------ ------ --------
ASSETS
Investments in securities, at cost (Note 2) $11,531,779 $99,911,189 $15,364,473 ($22,004,906) $104,802,535
========== ========== ========== =========== ===========
Investments in securities, at value (Note 2) $3,733,665 $70,693,856 $9,933,134 ($11,530,563) $72,830,092
Cash 38,985 40,290 438,999 - 518,274
Receivables:
Securities sold - - - - -
Fund shares sold 6,400 1,732 7,500 - 15,632
Dividends and interest 36 55,313 1,886 - 57,235
Due from advisor (Note 2) 1,253 - - 98,442 99,695
Prepaid expenses and other assets 8,179 4,711 15,860 - 28,750
--------- --------- ---------- ---------- ----------
Total assets 3,788,518 70,795,902 10,397,379 (11,432,121) 73,549,678
--------- --------- ---------- ---------- ----------
LIABILITIES
Cash overdraft - - - - -
Payables:
Securities purchased - - 53,310 - 53,310
Fund shares redeemed - - 1,130 - 1,130
Due to advisor (Note 2) - 1,702 550 (550) 1,702
Accrued expenses (Note 2) 40,216 95,322 57,699 (88,634) 104,603
Deferred trustees' compensation 1,926 5,787 1,292 - 9,005
--------- --------- ---------- ---------- ----------
Total liabilities 42,142 102,811 113,981 (89,184) 169,750
--------- --------- ---------- ---------- ----------
NET ASSETS $3,746,376 $70,693,091 $10,283,398 ($11,342,937) $73,379,928
========= ========== ========== ========== ==========
Number of shares issued and outstanding
(unlimited shares authorized no par value) 1,340,976 6,556,164 2,893,789 (3,983,886) 6,807,043
========= ========== ========== ========== ==========
Net asset value per share $2.79 $10.78 $3.55 $10.78
========= ========== ========== ==========
COMPONENTS OF NET ASSETS
Paid-in capital $29,070,766 $122,298,803 $40,107,883 $0 $191,477,452
Accumulated net investment income (loss) (96,130) (669,645) (285,212) 187,626 (863,361)
Accumulated net realized loss on investments (17,430,147) (21,718,734) (24,108,209) (22,004,906) (85,261,996)
Net unrealized appreciation (depreciation) on:
Investments (7,798,113) (29,217,333) (5,431,339) 10,474,343 (31,972,442)
---------- ---------- ---------- ---------- ----------
Foreign currency - - 275 - 275
---------- ---------- ---------- ---------- ----------
Net assets $3,746,376 $70,693,091 $10,283,398 ($11,342,937) $73,379,928
========= ========== ========== ========== ==========
See accompanying Notes to Pro Forma Combining Financial Statements.
INVESTEC INTERNET.COMTM INDEX FUND,
INVESTEC WIRED(R) INDEX FUND AND
INVESTEC WIRELESS WORLD FUNDTM
PRO FORMA COMBINING STATEMENT OF OPERATIONS
SEPTEMBER 30, 2001
(UNAUDITED)
internet.com(TM) Wired(R) Wireless
Index Fund Index Fund World Fund(TM) Pro Forma Pro Forma
(Historical (Historical) (Historical) Adjust Combined
----------- ------------ ------------ ------ --------
INVESTMENT INCOME
Income
Dividends + $0 $543,167 $64,916 $0 $608,083
Interest 677 3,140 15,550 - 19,367
--------- ----------- ---------- ---------- ----------
Total income 677 546,307 80,466 - 627,450
--------- ----------- ---------- ---------- ----------
Expenses
Advisory fees (Note 2) 64,379 785,848 131,887 (12,679) 969,435
Fund accounting fees (Note 2) 32,794 38,547 31,496 (64,290) 38,547
Transfer agent fees 47,094 152,232 81,180 - 280,506
Custody fees 21,411 63,257 14,563 - 99,231
Administration fees 14,850 45,127 14,845 - 74,822
Audit fees (Note 2) 11,505 18,640 12,839 (24,344) 18,640
Registration expense 16,977 19,693 25,187 - 61,857
Reports to shareholders 16,337 47,748 31,953 - 96,038
Legal fees 13,634 47,060 8,704 - 69,398
Trustee fees 6,944 16,597 6,759 - 30,300
Insurance expense 1,231 8,690 1,636 - 11,557
Interest expense 2,046 12,915 466 - 15,427
Miscellaneous 2,712 19,518 4,163 - 26,393
--------- ----------- ---------- ---------- ----------
Total expenses 251,914 1,275,872 365,678 (101,313) 1,792,151
Less: fees waived and expenses absorbed
(Note 2) (155,107) (59,920) - (86,313) (301,340)
--------- ----------- ---------- ---------- ----------
Net expenses 96,807 1,215,952 365,678 (187,626) 1,490,811
--------- ----------- ---------- ---------- ----------
Net investment income (loss) (96,130) (669,645) (285,212) 187,626 (863,361)
--------- ---------- ---------- ---------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investments (Note 2) (10,370,210) (18,405,642) (16,773,503) (22,004,906) (67,554,261)
Net realized loss on foreign currency - - (23,012) - (23,012)
Net unrealized appreciation (depreciation) on:
Investments (Note 2) 673,234 (37,937,284) 3,946,896 10,474,343 (22,842,811)
Foreign currency - - (3,072) - (3,072)
---------- ----------- ----------- ---------- ----------
Net realized and unrealized loss on
investments (9,696,976) (56,342,926) (12,852,691) (11,530,563) (90,423,156)
---------- ----------- ----------- ---------- ----------
Net increase (decrease) in net assets __________ ___________ ___________ ___________ ___________
resulting from operations ($9,793,106) ($57,012,571) ($13,137,903) ($11,342,937) ($91,286,517)
========== =========== =========== =========== ===========
+ Net of foreign tax withheld of $30,135 for the Wired(R) Index Fund and $6,129
for the Wireless World FundTM.
See accompanying Notes to Pro Forma Combining Financial Statements.
INVESTEC FUNDS
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENT
NOTE 1 - BASIS OF PRO FORMA PRESENTATION
The pro forma combining financial statements and the accompanying pro forma
schedules of investments give effect to the proposed Agreements and Plans of
Reorganization pursuant to which the Investec internet.comTM Index Fund and the
Investec Wireless World FundTM (each a series of the Investec Funds,
collectively referred to as the "Acquired Funds") will transfer all of their
assets and liabilities to the Investec Wired(R) Index Fund (the "Acquiring
Fund"), respectively, in exchange for shares of the corresponding Acquiring
Fund. The Investec Wired(R) Index Fund will be the legal and accounting survivor
of the reorganizations. The pro forma statements should be read in conjunction
with the historical financial statements of the Investec internet.comTM Index
Fund, the Investec Wired(R) Index Fund and the Investec Wireless World FundTM
included in the Statement of Additional Information.
The costs of the reorganization will be borne by Investec Asset Management U.S.,
Limited (the "Adviser") and is estimated to be $28,345.
It is contemplated that the reorganizations will be accounted for as a tax-free
reorganization of investment companies.
NOTE 2 - PRO FORMA ADJUSTMENTS
Pro forma adjustments have been made to give effect to each of the following as
if the reorganizations had occurred as of the beginning of each period
presented:
A - Adjust investment advisory fees to conform with the contractual rates of
the Acquiring Fund.
B - Adjust expense waiver/reimbursements to conform with the Acquiring Fund
contractual arrangements. The Adviser currently does not reimburse
expenses for the Investec Wireless World FundTM. The Adviser is
contractually obligated to cap the Investec Wired(R) Index Fund's total
annual operating expenses at 1.35% through June 30, 2002.
C - To eliminate Fund Accounting expenses for the Investec internet.comTM
Index Fund and the Investec Wireless World FundTM.
D - To eliminate Audit expenses for the Investec internet.comTM Index Fund
and the Investec Wireless World FundTM.
E - Adjust for securities to be sold in connection with reorganization.
INVESTEC WIRED(R) INDEX AND
INVESTEC WIRELESS WORLD FUNDTM
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2001
(UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
Wired(R) Wireless Wired(R) Wireless
Index Fund World FundTM Pro Forma Index Fund World FundTM Pro Forma Pro Forma
(Historical) (Historical) Combined (Historical) (Historical) Adjust Combined
- ----------- ------------ --------- ------------ ------------ ----------- -------------
Automobile
78,175 - 78,175 DaimlerChrysler AG $ 2,343,687 $ - $ - $ 2,343,687
------------ ------------ ----------- -------------
Banking
41,854 - 41,854 State Street Corp. 1,904,357 - - 1,904,357
------------ ------------ ----------- -------------
Biological Research
8,148 - 8,148 Affymetrix, Inc.* 130,775 - - 130,775
50,190 - 50,190 Aventis S.A. 3,768,767 - - 3,768,767
9,400 - 9,400 INCYTE Pharmaceuticals, Inc.* 128,404 - - 128,404
------------ ------------ ----------- -------------
4,027,946 - - 4,027,946
------------ ------------ ----------- -------------
Biopharmaceuticals
28,400 - 28,400 Millennium Pharmaceuticals, Inc.* 504,384 - - 504,384
------------ ------------ ----------- -------------
Business & Information Services
- 30,820 30,820 Accenture Ltd. - 392,955 (392,955) -
------------ ------------ ----------- -------------
Communication Services
29,200 - 29,200 WPP Group Plc 1,076,677 - - 1,076,677
------------ ------------ ----------- -------------
Computer Equipment
- 94,250 94,250 Asustek Computer, Inc. - 282,665 (282,665) -
227,010 - 227,010 Cisco Systems, Inc.* 2,764,982 - - 2,764,982
- 44,700 44,700 M-Systems Flash Disk Pioneers, Ltd. - 189,081 (189,081) -
- 236,679 236,679 Parthus Technologies Plc - 70,454 (70,454) -
------------ ------------ ----------- -------------
2,764,982 542,200 (542,200) 2,764,982
------------ ------------ ----------- -------------
Computer Services
- 6,500 6,500 Electronic Data Systems Corp. - 374,270 (374,270) -
- 21,300 21,300 Logica Plc - 211,349 (211,349) -
------------ ------------ ----------- -------------
- 585,619 (585,619) -
------------ ------------ ----------- -------------
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
Wired(R) Wireless Wired(R) Wireless
Index Fund World FundTM Pro Forma Index Fund World FundTM Pro Forma Pro Forma
(Historical) (Historical) Combined (Historical) (Historical) Adjust Combined
- ----------- ------------ --------- ------------ ------------ ----------- -------------
Computer Storage Devices
96,366 - 96,366 Emc Corp./Mass* 1,132,301 - - 1,132,301
------------ ------------ ----------- -------------
Computers
- 2,700 2,700 International Business Machines Corp. - 249,210 (249,210) -
225,180 - 225,180 Sun Microsystems, Inc.* 1,862,239 - - 1,862,239
------------ ------------ ----------- -------------
1,862,239 249,210 (249,210) 1,862,239
------------ ------------ ----------- -------------
Consumer Electronics
50,338 - 50,338 Sony Corp. 1,671,222 - - 1,671,222
------------ ------------ ----------- -------------
Electronics Manufacturing
- 8,700 8,700 ASM International, N.V. - 100,050 (100,050) -
60,530 - 60,530 Flextronics International Ltd.* 1,001,166 - - 1,001,166
- 15,300 15,300 Intersil Holding Corp. - 427,176 (427,176) -
- 14,900 14,900 Philips Electronics N.V. - 288,854 (288,854) -
- 10,010 10,010 Samsung Electronics - 589,589 (589,589) -
------------ ------------ ----------- -------------
1,001,166 1,405,669 (1,405,669) 1,001,166
------------ ------------ ----------- -------------
Energy / Petroleum
61,410 - 61,410 Enron Corp. 1,672,194 - - 1,672,194
------------ ------------ ----------- -------------
Entertainment
126,945 - 126,945 Walt Disney Co. 2,363,716 - - 2,363,716
------------ ------------ ----------- -------------
Financial Services
177,163 - 177,163 Charles Schwab & Co., Inc. 2,037,375 - - 2,037,375
50,682 6,300 56,982 First Data Corp. 2,952,733 367,038 - 3,319,771
------------ ------------ ----------- -------------
4,990,108 367,038 - 5,357,146
------------ ------------ ----------- -------------
Holding Offices
- 76,860 76,860 Nordic Baltic Holding (NBH) AB - 374,340 (374,340) -
------------ ------------ ----------- -------------
Hotel Management - - -
31,353 - 31,353 Marriott International, Inc. -
Class A 1,047,190 - - 1,047,190
------------ ------------ ----------- -------------
1,047,190 - - 1,047,190
------------ ------------ ----------- -------------
Industry Machinery
70,682 - 70,682 Applied Materials, Inc.* 2,010,196 - - 2,010,196
------------ ------------ ----------- -------------
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
Wired(R) Wireless Wired(R) Wireless
Index Fund World FundTM Pro Forma Index Fund World FundTM Pro Forma Pro Forma
(Historical) (Historical) Combined (Historical) (Historical) Adjust Combined
- ----------- ------------ --------- ------------ ------------ ----------- -------------
Insurance
47,115 - 47,115 American International Group, Inc. 3,674,970 - - 3,674,970
------------ ------------ ----------- -------------
Internet / New Media
76,594 - 76,594 AOL Time Warner, Inc.* 2,535,261 - - 2,535,261
34,400 - 34,400 eBay, Inc.* 1,573,800 - - 1,573,800
71,578 - 71,578 Yahoo!, Inc.* 630,602 - - 630,602
------------ ------------ ----------- -------------
4,739,663 - - 4,739,663
------------ ------------ ----------- -------------
Internet Security
- 10,300 10,300 Check Point Software Technologies Ltd. - 226,806 (226,806) -
------------ ------------ ----------- -------------
Media - - - -
66,612 - 66,612 News Corp. Cayman ADR 1,605,349 - - 1,605,349
30,541 - 30,541 Reuters Group - Sponsored ADR 1,595,767 - - 1,595,767
------------ ------------ ----------- -------------
3,201,116 - - 3,201,116
------------ ------------ ----------- -------------
Oil & Gas Services
58,386 - 58,386 Schlumberger Ltd. 2,668,240 - - 2,668,240
------------ ------------ ----------- -------------
Pharmaceuticals
72,286 - 72,286 GlaxoSmithKline Plc* 4,056,690 - - 4,056,690
------------ ------------ ----------- -------------
Retail
74,560 - 74,560 Wal-Mart Stores, Inc. 3,690,720 - - 3,690,720
------------ ------------ ----------- -------------
Semiconductors
- 14,850 14,850 Infineon Technologies AG - 181,381 (181,381) -
124,580 - 124,580 Intel Corp. 2,540,186 - - 2,540,186
- 2,500 2,500 Kla-Tencor Corp. - 78,950 (78,950) -
- 20,802 20,802 Perlos Oyj - 159,037 (159,037) -
- 145,000 145,000 Taiwan Semiconductor Manufacturing
Co. Ltd. - 196,219 (196,219) -
------------ ------------ ----------- -------------
2,540,186 615,587 (615,587) 2,540,186
------------ ------------ ----------- -------------
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
Wired(R) Wireless Wired(R) Wireless
Index Fund World FundTM Pro Forma Index Fund World FundTM Pro Forma Pro Forma
(Historical) (Historical) Combined (Historical) (Historical) Adjust Combined
- ----------- ------------ --------- ------------ ------------ ----------- -------------
Software
- 8,900 8,900 Amdocs, Ltd. - 237,185 (237,185) -
- 8,600 8,600 BEA Systems, Inc. - 82,474 (82,474) -
31,200 - 31,200 BroadVision, Inc.* 28,392 - - 28,392
51,800 - 51,800 i2 Technologies, Inc.* 178,192 - - 178,192
57,044 - 57,044 Microsoft Corp.* 2,918,941 - - 2,918,941
- 5,000 5,000 Nvidia Corp - 137,350 (137,350) -
238,870 - 238,870 Oracle Corp.* 3,004,985 - - 3,004,985
33,905 - 33,905 Parametric Technology Corp.* 175,967 - - 175,967
- 8,100 8,100 Peoplesoft, Inc. - 146,124 (146,124) -
- 5,400 5,400 THQ, Inc. - 233,010 (233,010) -
------------ ------------ ----------- -------------
6,306,477 836,143 (836,143) 6,306,477
------------ ------------ ----------- -------------
Specialty Steel
10,141 - 10,141 Nucor Corp. 402,598 - - 402,598
------------ ------------ ----------- -------------
Telecommunications
- 21,700 21,700 AT&T Wireless Services, Inc. - 324,198 (324,198) -
- 17,300 17,300 Motorola, Inc. - 269,880 (269,880) -
- 35 35 NTT DoCoMo, Inc. - 473,052 (473,052) -
94,618 - 94,618 Qwest Communications International* 1,580,121 - - 1,580,121
- 9,100 9,100 SBC Communications, Inc. - 428,792 (428,792) -
- 39,760 39,760 TTI Team Telecom International Ltd. - 475,132 (475,132) -
- 20,400 20,400 Utstarcom, Inc. - 331,500 (331,500) -
------------ ------------ ----------- -------------
1,580,121 2,302,554 (2,302,554) 1,580,121
------------ ------------ ----------- -------------
Telecommunications - Equipment
164,690 - 164,690 JDS Uniphase Corp.* 1,040,841 - - 1,040,841
------------ ------------ ----------- -------------
Transportation
38,144 - 38,144 FedEx Corp.* 1,401,792 - - 1,401,792
16,810 - 16,810 Sabre Holdings Corp.* 449,499 - - 449,499
------------ ------------ ----------- -------------
1,851,291 - - 1,851,291
------------ ------------ ----------- -------------
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
Wired(R) Wireless Wired(R) Wireless
Index Fund World FundTM Pro Forma Index Fund World FundTM Pro Forma Pro Forma
(Historical) (Historical) Combined (Historical) (Historical) Adjust Combined
- ----------- ------------ --------- ------------ ------------ ----------- -------------
Wireless Communication Equipment
112,762 31,080 143,842 Nokia OYJ 1,764,725 507,760 - 2,272,485
- 5,100 5,100 QUALCOM, Inc. - 242,454 (242,454) -
- 10,800 10,800 Sprint Corp. (PCS Group) - 283,932 (283,932) -
- 5,900 5,900 Tekelec - 77,703 (77,703) -
- 9,910 9,910 Verizon Communications - 536,230 (536,230) -
127,680 175,480 303,160 Vodafone AirTouch Public Ltd. 2,803,853 386,934 - 3,190,787
------------ ------------ ----------- -------------
4,568,578 2,035,013 (1,140,319) 5,463,272
------------ ------------ ----------- -------------
Total Common Stocks
(cost $99,911,189
and $15,364,473, respectively) 70,693,856 9,933,134 (8,671,402) 71,955,588
------------ ------------ ----------- -------------
Total Investments in Securities
(cost $99,911,189
and $15,364,473, respectively+) 70,693,856 9,933,134 (8,671,402) 71,955,588
Other Assets less Liabilities (765) 350,264 187,626 537,125
------------ ------------ ----------- -------------
Net Assets $ 70,693,091 $ 10,283,398 (8,483,776) $ 72,492,713
============ ============ =========== =============
+ Cost for Federal income tax
purposes is the same.
Net unrealized appreciation
(depreciation) consists of:
Gross unrealized appreciation $ 4,292,313 $ 84,525 $ (84,524) $ 4,292,314
Gross unrealized depreciation (33,509,646) (5,515,864) 4,168,496 (34,857,014)
------------ ------------ ----------- -------------
Net unrealized depreciation (29,217,333) $ (5,431,339) $ 4,083,972 $(30,564,700)
============ ============ =========== =============
* Non-income producing security.
Adjustments represent securities to be sd in connection with the
reorganization.
See accompanying Notes to Pro Forma Combining Financial Statements.
INVESTEC WIRED(R) INDEX FUND AND
INVESTEC WIRELESS WORLD FUNDTM
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2001
(UNAUDITED)
Wired(R) Wireless
Index Fund World FundTM Pro Forma Pro Forma
(Historical) (Historical) Adjust Combined
------------ ------------ ------------- ------------
ASSETS
Investments in securities, at cost (Note 2) $ 99,911,189 $ 15,364,473 $ (12,755,374) $ 102,520,288
============ ============ ============= =============
Investments in securities, at value (Note 2) $ 70,693,856 $ 9,933,134 $ (8,671,402) $ 71,955,588
Cash 40,290 438,999 - 479,289
Receivables:
Securities sold - - - -
Fund shares sold 1,732 7,500 - 9,232
Dividends and interest 55,313 1,886 - 57,199
Due from advisor (Note 2) - - 142,741 142,741
Prepaid expenses and other assets 4,711 15,860 - 20,571
------------ ----------- ------------- ------------
Total assets 70,795,902 10,397,379 (8,528,661) 72,664,620
------------ ----------- ------------- ------------
LIABILITIES
Cash overdraft - - - -
Payables:
Securities purchased - 53,310 - 53,310
Fund shares redeemed - 1,130 - 1,130
Due to advisor (Note 2) 1,702 550 (550) 1,702
Accrued expenses 95,322 57,699 (44,335) 108,686
Deferred trustees' compensation 5,787 1,292 - 7,079
------------ ----------- ------------- ------------
Total liabilities 102,811 113,981 (44,885) 171,907
------------ ----------- ------------- ------------
NET ASSETS $ 70,693,091 $ 10,283,398 $ (8,483,776) $ 72,492,713
============ ============ ============= =============
Number of shares issued and outstanding
(unlimited shares authorized no par value) 6,556,164 2,893,789 (2,725,212) 6,724,741
============ ============ ============= =============
Net asset value per share $10.78 $3.55 10.78
============ ============ =============
COMPONENTS OF NET ASSETS
Paid-in capital $122,298,803 $40,107,883 $ 0 $ 162,406,686
Accumulated net investment income (loss) (669,645) (285,212) 187,626 (767,231)
Accumulated net realized loss on investments (21,718,734) (24,108,209) $ (12,755,374) (58,582,317)
Net unrealized appreciation (depreciation) on:
Investments (29,217,333) (5,431,339) 4,083,972 (30,564,700)
Foreign currency - 275 - 275
------------ ----------- ------------- ------------
Net assets $70,693,091 $10,283,398 $ (8,483,776) $ 72,492,713
============ ============ ============= =============
See accompanying Notes to Pro Forma Combining Financial Statements.
INVESTEC WIRED(R) INDEX FUND AND
INVESTEC WIRELESS WORLD FUNDTM
PRO FORMA COMBINING STATEMENT OF OPERATIONS
SEPTEMBER 30, 2001
(UNAUDITED)
Wired(R) Wireless
Index Fund World FundTM Pro Forma Pro Forma
(Historical) (Historical) Adjust Combined
-------------- -------------- ------------ ------------
INVESTMENT INCOME
Income
Dividends + $ 543,167 $ 64,916 $ 0 $ $608,083
Interest 3,140 15,550 - 18,690
-------------- -------------- ------------ ------------
Total income 546,307 80,466 - 626,773
-------------- -------------- ------------ ------------
Expenses
Advisory fees (Note 2) 785,848 131,887 (12,679) 905,056
Fund accounting fees (Note 2) 38,547 31,496 (31,496) 38,547
Transfer agent fees 152,232 81,180 - 233,412
Custody fees 63,257 14,563 - 77,820
Administration fees 45,127 14,845 - 59,972
Audit fees (Note 2) 18,640 12,839 (12,839) 18,640
Registration expense 19,693 25,187 - 44,880
Reports to shareholders 47,748 31,953 - 79,701
Legal fees 47,060 8,704 - 55,764
Trustee fees 16,597 6,759 - 23,356
Insurance expense 8,690 1,636 - 10,326
Interest expense 12,915 466 - 13,381
Miscellaneous 19,518 4,163 - 23,681
-------------- -------------- ------------ ------------
Total expenses 1,275,872 365,678 (57,014) 1,584,536
Less: fees waived and expenses absorbed (Note 2) (59,920) - (130,612) (190,532)
-------------- -------------- ------------ ------------
Net expenses 1,215,952 365,678 (187,626) 1,394,004
-------------- -------------- ------------ ------------
Net investment income (loss) (669,645) (285,212) 187,626 (767,231)
-------------- -------------- ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investments (Note 2) (18,405,642) (16,773,503) (12,755,374) (47,934,519)
Net realized loss on foreign currency - (23,012) - (23,012)
Net unrealized appreciation (depreciation) on:
Investments (Note 2) (37,937,284) 3,946,896 4,083,972 (29,906,416)
Foreign currency - (3,072) - (3,072)
-------------- -------------- ------------ ------------
Net realized and unrealized loss on investments (56,342,926) (12,852,691) (8,671,402) (77,867,019)
-------------- -------------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations $ (57,012,571) $ (13,137,903) $ (8,483,776) $(78,634,250)
============== ============== ============ ============
+ Net of foreign tax withheld of $30,135 for the Wired(R) Index Fund and $6,129
for the Wireless World FundTM.
See accompanying Notes to Pro Forma Combining Financial Statements.
INVESTEC FUNDS
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENT
NOTE 1 - BASIS OF PRO FORMA PRESENTATION
The pro forma combining financial statements and the accompanying pro forma
schedules of investments give effect to the proposed Agreements and Plans of
Reorganization pursuant to which the Investec Wireless World FundTM (the
"Acquired Fund") will transfer all of their assets and liabilities to the
Investec Wired(R) Index Fund (the "Acquiring Fund"), respectively, in exchange
for shares of the corresponding Acquiring Fund. The Investec Wired(R) Index Fund
will be the legal and accounting survivor of the reorganizations. The pro forma
statements should be read in conjunction with the historical financial
statements of the Investec Wired(R) Index Fund and the Investec Wireless World
FundTM included in the Statement of Additional Information.
The costs of the reorganization will be borne by Investec Asset Management U.S.,
Limited (the Adviser") and is estimated to be $28,345.
It is contemplated that the reorganizations will be accounted for as a tax-free
reorganization of investment companies.
NOTE 2 - PRO FORMA ADJUSTMENTS
Pro forma adjustments have been made to give effect to each of the following as
if the reorganizations had occurred as of the beginning of each period
presented:
A - Adjust investment advisory fees to conform with the contractual rates of
the Acquiring Fund
B - Adjust expense waiver/reimbursements to conform with the Acquiring Fund
contractual arrangements. The Adviser currently does not reimburse
expenses for the Investec Wireless World FundTM. The Adviser is
contractually obligated to cap the Investec Wired(R) Index Fund's total
annual operating expenses at 1.35% through June 30, 2002.
C - To eliminate Fund Accounting expenses for the Investec Wireless World
FundTM.
D - To eliminate Audit expenses for the Investec Wireless World FundTM.
E - Adjust for securities to be sold in connection with reorganization.
INVESTEC FUNDS
PART C
ITEM 15. INDEMNIFICATION.
The response to this item is incorporated by reference to Item 25 of Part C of
Post-Effective Amendment No. 29 to the Registrant's Registration Statement on
Form N-1A as filed April 26, 2001, accession number 0000922423-01-500074.
Item 16. Exhibits:
(1)(a) Certificate of Trust. (1)
(1)(b) Amendment to Certificate of Trust dated September 8, 2000. (2)
(2) Bylaws. (1)
(3) Not Applicable.
(4) Form of Agreement and Plan of Reorganization and Liquidation.
(5)(a) Trust Instrument. (1)
(5)(b) Amendment to Trust Instrument. (2)
(5)(c) Schedule A to Trust Instrument as of June 28, 2000. (2)
(6) Investment Advisory Agreement between Registrant and Investec Asset
Management U.S. Limited (formerly Guinness Flight Investment
Management Limited). (3)
(7) General Distribution Agreement between Registrant and First Fund
Distributors, Inc. (3)
(8) Not Applicable.
(9) Amended Custodian Agreement between Registrant and Investors Bank &
Trust Company. (3)
(10)(a) Distribution and Service Plan. (3)
(10)(b) Form of Distribution Plan for a class of the Guinness Flight Wired(R)
Index Fund. (4)
- ---------------
(1) Filed as an Exhibit to Post-Effective Amendment No. 7 to Registrant's
Registration Statement on Form N-1A filed electronically on March 20,
1997, accession number 0000922423-96-000220 and incorporated herein by
reference.
(2) Filed as an Exhibit to Post-Effective Amendment No. 28 to Registrant's
Registration Statement on Form N-1A filed electronically on October 13,
2000, accession number 0000922423-96-500010 and incorporated herein by
reference.
(3) Filed as an Exhibit to Post-Effective Amendment No. 12 to Registrant's
Registration Statement on Form N-1A filed electronically on August 28,
1998, accession number 0000922423-98-000948 and incorporated herein by
reference.
(4) Filed as an Exhibit to Post-Effective Amendment No. 24 to Registrant's
Registration Statement on Form N-1A filed electronically on December 23,
1999, accession number 0000922423-99-001476 and incorporated herein by
reference.
C-1
(10)(c) Form of Rule 18f-3 Multi-Class Plan. (5)
(11)(a) Consent of Counsel.
(11)(b) Opinion of Counsel.
(11)(c) Opinion of Delaware counsel.
(12) Form of Tax Opinions.
(13) Not Applicable.
(14) Consent of Ernst & Young LLP, Independent Auditors for the
Registrant.
(15) Not Applicable.
(16) Powers of Attorney. (6)
(17) Form of Proxy Cards.
ITEM 17. Undertakings
(1) The undersigned registrant agrees that prior to any public reoffering of
the securities registered through the use of a prospectus which is a part
of this registration statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) under the Securities Act
of 1933, as amended (the "Securities Act"), the reoffering prospectus will
contain the information called for by the applicable registration form for
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
(2) The undersigned registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to the
registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the Securities
Act, each post-effective amendment shall be deemed to be a new
registration statement for the securities offered therein, and the
offering of the securities at that time shall be deemed to be the initial
bona fide offering of them
(3) The undersigned registrant agrees that the opinion of counsel concerning
the tax consequences of the transaction will be filed as part of a
post-effective amendment to the registration statement.
- ---------------
(5) Filed as an Exhibit to Post-Effective Amendment No. 26 to Registrant's
Registration Statement on Form N-1A filed electronically on June 30, 2000,
accession number 0000922423-00-000903 and incorporated herein by
reference.
(6) Filed as an Exhibit to Registrant's Registration Statement on Form N-14
filed electronically on October 22, 2001, accession number
0000922423-01-500921 and incorporated herein by reference.
C-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Pre-Effective Amendment No. 1 to the Registration Statement
on Form N-14 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York and State of New York, on the 16th day of
November, 2001.
INVESTEC FUNDS
By: /s/ Royce N. Brennan
---------------------------------------
Royce N. Brennan
President
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the Registration Statement on Form N-14 has
been signed below by the following persons in the capacities indicated on the
16th day of November, 2001.
Signature Title Date
/s/ Eric Banhazl Treasurer November 16, 2001
- ------------------------
Eric Banhazl
/s/ Dr. Gunter Dufey Trustee November 16, 2001
- ------------------------
*Dr. Gunter Dufey
/s/ J. I. Fordwood Trustee November 16, 2001
- ------------------------
*J. I. Fordwood
/s/ Timothy Guinness Trustee November 16, 2001
- ------------------------
*Timothy Guinness
/s/ Bret A. Herscher Trustee November 16, 2001
- ------------------------
*Bret A. Herscher
/s/ J. Brooks Reece, Jr. Trustee November 16, 2001
- ------------------------
*J. Brooks Reece, Jr.
*By: /s/ Susan Penry-Williams
-----------------------------
Susan Penry-Williams
Attorney-in-Fact
EXHIBIT INDEX
EX-99.4 Form of Agreement and Plan of Reorganization and Liquidation.
EX-99.11(a) Consent of Counsel.
EX-99.11(b) Opinion of Counsel.
EX-99.12 Form of Tax Opinions.
EX-99.14 Consent of Ernst & Young LLP, Independent Auditors for the
Registrant.
EX-99.17 Form of Proxy Cards.