485BPOS 1 d485bpos.htm COHEN & STEERS GLOBAL INFRASTRUCTURE FUND, INC. Cohen & Steers Global Infrastructure Fund, Inc.

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 1, 2008

FILE NOS. 333-111981

811-21488

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM N-1A

 

 

 

  REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933    x
  PRE-EFFECTIVE AMENDMENT NO.    ¨
  POST-EFFECTIVE AMENDMENT NO. 6    x
  AND   
  REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940    x
  AMENDMENT NO. 5    x

 

 

COHEN & STEERS GLOBAL INFRASTRUCTURE FUND, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

 

 

280 PARK AVENUE, 10TH FLOOR, NEW YORK, NY 10017

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)

REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 832-3232

 

 

COPY TO:

 

TINA M. PAYNE   JANNA MANES, ESQ.
COHEN & STEERS GLOBAL INFRASTRUCTURE FUND, INC.   STROOCK & STROOCK & LAVAN LLP
280 PARK AVENUE, 10th FLOOR   180 MAIDEN LANE
NEW YORK, NY 10017   NEW YORK, NY 10038
(NAME AND ADDRESS OF AGENT OF SERVICE OF PROCESS)  

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after the effective date of this registration statement.

 

 

IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX):

 

x IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (B)

 

¨ ON (DATE) PURSUANT TO PARAGRAPH (B)

 

¨ 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(1)

 

¨ ON APRIL 1, 2008 PURSUANT TO PARAGRAPH (A)(1)

 

¨ 75 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(2)

 

¨ ON (DATE) PURSUANT TO PARAGRAPH (A)(2) OF RULE 485

 

 

 


LOGO

280 PARK AVENUE

NEW YORK, NEW YORK 10017

 

 

CLASS A, CLASS B AND CLASS C SHARES

 

 

PROSPECTUS

Advisor

Cohen & Steers Capital Management, Inc.

280 Park Avenue

New York, New York 10017

Telephone: (212) 832-3232

Transfer Agent

Boston Financial Data Services

P.O. Box 8123

Boston, Massachusetts 02266-8123

Telephone: (800) 437-9912

AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED

OR DISAPPROVED OF THE FUND’S SHARES OR DETERMINED WHETHER THIS PROSPECTUS

IS TRUTHFUL OR COMPLETE. ANYONE WHO INDICATES OTHERWISE IS

COMMITTING A CRIME.

APRIL 1, 2008

 

 


 

TABLE OF CONTENTS

 

     Page

RISK/RETURN SUMMARY

   1

Investment Objective and Principal Investment Strategies

   1

Who Should Invest

   1

Principal Risks

   2

Historical Fund Performance

   4

FEES AND EXPENSES OF THE FUND

   6

INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

   7

Objective

   7

Principal Investment Strategies

   7

Additional Investment Information

   9

Principal Risks of Investing in the Fund

   10

MANAGEMENT OF THE FUND

   12

The Advisor and Subadvisors

   12

Portfolio Managers

   13

HOW TO PURCHASE AND SELL FUND SHARES

   14

Pricing of Fund Shares

   14

Purchasing the Class of Fund Shares that is Best for You

   15

Class A Shares

   15

Class B Shares

   17

Class C Shares

   18

A Note on Contingent Deferred Sales Charges

   19

Class I Shares

   19

Purchase Minimums

   19

Form of Payment

   19

Purchases of Fund Shares

   19

Purchases Through Dealers and Intermediaries

   21

Purchases Through the Distributor

   21

Automatic Investment Plan

   21

Exchange Privilege

   22

How to Sell Fund Shares

   22

Frequent Purchases and Redemptions of Fund Shares

   25


 

TABLE OF CONTENTS

 

     Page

ADDITIONAL INFORMATION

   25

Distribution Plan

   25

Shareholder Service Plan

   26

Other Compensation

   26

Dividends and Distributions

   26

Tax Considerations

   26

Privacy Policy

   28

FINANCIAL HIGHLIGHTS

   29

 


COHEN & STEERS GLOBAL INFRASTRUCTURE FUND, INC.

 

 

RISK/RETURN SUMMARY

 

 

INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES

The investment objective of Cohen & Steers Global Infrastructure Fund, Inc. (the Fund) is total return. In pursuing total return, the Fund seeks both capital appreciation and current income. The Fund may change its investment objective without shareholder approval, although it has no current intention to do so. There can be no assurance that the Fund will achieve its investment objective.

Normally, the Fund invests at least 80% of its net assets in U.S. and non-U.S. common stocks and other equity securities issued by infrastructure companies, which consist of utilities, pipelines, toll roads, airports, railroads, ports, telecommunications companies and other infrastructure companies. Under normal market conditions, the Fund invests at least 40%, unless market conditions are not deemed favorable by Cohen & Steers Capital Management, Inc., the Fund’s advisor (the Advisor), in which case the Fund will invest at least 30%, of its net assets in companies organized or located outside the U.S. or doing a substantial amount of business outside of the U.S. The Fund will invest in infrastructure companies primarily in developed countries, but may invest in securities of infrastructure companies domiciled in emerging market countries. Accordingly, the Fund will hold securities and instruments denominated in non-U.S. currencies, or sponsored and unsponsored depositary receipts for such securities.

Infrastructure companies derive at least 50% of their revenues from, or have at least 50% of their assets committed to, the generation, transmission, sale or distribution of electric energy; distribution, purification and treatment of water; production, transmission or distribution of natural resources used to produce energy; provision of communications services, including cable television, satellite, microwave, radio, telephone and other communications media; management, ownership and/or operation of infrastructure assets or construction, development or financing of infrastructure assets, such as pipelines, toll roads, airports, railroads or ports. Infrastructure companies also include energy-related companies organized as master limited partnerships (MLPs) and their affiliates, and the Fund may invest up to 25% of its net assets in these energy-related MLPs and their affiliates.

The Fund may invest up to 20% of its net assets in preferred securities and other fixed-income securities. The Fund may also invest up to 20% of its net assets in securities that at the time of investment are rated below investment grade by a nationally recognized statistical rating agency or that are unrated but judged to be below investment grade by the Advisor.

The Fund has adopted a fundamental policy (which cannot be changed without shareholder approval) to invest at least 25% of its net assets in securities of companies engaged in the utilities industry.

 

 

WHO SHOULD INVEST

The Fund may be suitable for you if you are seeking:

 

·  

to add infrastructure companies to your portfolio

 

·  

a fund that may perform differently than a general stock or bond fund to add to your portfolio

 

·  

a fund offering the potential for both current income and long-term capital appreciation

 

·  

a fund offering the potential for tax-advantaged dividend income

 

1


The Fund is designed for long-term investors. You should not invest in the Fund unless your investment horizon is at least six months. The Fund will take reasonable steps to identify and reject orders from market timers. In addition, the Fund will charge a redemption fee on certain redemptions and exchanges. See How to Purchase and Sell Fund Shares—Frequent Purchases and Redemptions of Fund Shares and—How to Sell Fund Shares.

 

 

PRINCIPAL RISKS

Investment Risk. An investment in the Fund is subject to investment risk, including the possible loss of the entire principal amount that you invest.

Market Risk. Your investment in Fund shares represents an indirect investment in the securities owned by the Fund. The value of these securities, like other investments, may move up or down, sometimes rapidly and unpredictably.

Your Fund shares at any point in time may be worth less than what you invested, even after taking into account the reinvestment of Fund dividends and distributions.

Common Stock Risk. While common stock has historically generated higher average returns than fixed-income securities, common stock has also experienced significantly more volatility in those returns. An adverse event, such as an unfavorable earnings report, may depress the value of common stock held by the Fund. Also, the price of common stock is sensitive to general movements in the stock market. A drop in the stock market may depress the price of common stock held by the Fund.

General Risks of Investing in Infrastructure Companies. Securities and instruments of infrastructure companies are more susceptible to adverse economic or regulatory occurrences affecting their industries. Infrastructure companies may be subject to a variety of factors that may adversely affect their business or operations, including high interest costs in connection with capital construction programs, high leverage, costs associated with environmental and other regulations, the effects of economic slowdown, surplus capacity, increased competition from other providers of services, uncertainties concerning the availability of fuel at reasonable prices, the effects of energy conservation policies and other factors. Infrastructure companies may also be affected by or subject to:

 

·  

regulation by various government authorities;

 

·  

government regulation of rates charged to customers;

 

·  

service interruption due to environmental, operational or other mishaps;

 

·  

the imposition of special tariffs and changes in tax laws, regulatory policies and accounting standards; and

 

·  

general changes in market sentiment towards infrastructure and utilities assets.

Preferred Securities Risks. There are special risks associated with investing in preferred securities, including deferral and omission of distributions, subordination to bonds and other debt securities in a company’s capital structure, limited liquidity, limited voting rights and special redemption rights.

Interest Rate Risks. Interest rate risk is the risk that fixed-income securities such as preferred and debt securities, and to a lesser extent dividend-paying common stocks, will decline in value because of changes in market interest rates. When market interest rates rise, the market value of such securities generally will fall. The Fund’s investment in such securities means that the net asset value and market price of the Fund’s shares may tend to decline if market interest rates rise.

 

2


Foreign (Non-U.S.) Securities Risks. Risks of investing in foreign securities include currency risks, future political and economic developments and possible imposition of foreign withholding taxes on income payable on the securities. In addition, there may be less publicly available information about a foreign issuer than about a domestic issuer, and foreign issuers may not be subject to the same accounting, auditing and financial recordkeeping standards and requirements as domestic issuers.

Emerging Markets Risk. Emerging market countries generally have less developed markets and economies and, in some countries, less mature governments and governmental institutions. A small number of companies representing a limited number of industries may account for a significant percentage of an emerging country’s overall market and trading volume. Emerging market countries may have political and social uncertainties, and their economies may be over-dependent on exports, especially with respect to primary commodities, making these economies vulnerable to changes in commodity prices. Emerging market countries may have overburdened infrastructure and obsolete or unseasoned financial systems, environmental problems, less developed legal systems and less reliable custodial services and settlement practices.

Foreign Currency Risk. The Fund’s net asset value could decline as a result of changes in the exchange rates between foreign currencies and the U.S. dollar. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest to investors located outside the country, due to blockage of foreign currency exchanges or otherwise.

MLP Risk. An investment in MLP units involves some risks that differ from an investment in the common stock of a corporation. Holders of MLP units have limited control on matters affecting the partnership. Investing in MLPs involves certain risks related to investing in the underlying assets of the MLPs and risks associated with pooled investment vehicles. MLPs holding credit-related investments are subject to interest rate risk and the risk of default on payment obligations by debt issuers. MLPs that concentrate in a particular industry or a particular geographic region are subject to risks associated with such industry or region. The benefit derived from the Fund’s investment in MLPs is largely dependent on the MLPs being treated as partnerships for Federal income tax purposes.

Risks of Investment in Lower-Rated Securities. Lower-rated securities, or equivalent unrated securities, generally involve greater volatility of price and risk of loss of income and principal, and may be more susceptible to real or perceived adverse economic and competitive industry conditions than higher grade securities. It is reasonable to expect that any adverse economic conditions could disrupt the market for lower-rated securities, have an adverse impact on the value of those securities and adversely affect the ability of the issuers of those securities to repay principal and for interest on those securities.

Non-Diversification. As a “non-diversified” investment company, the Fund may invest in fewer individual companies than a diversified investment company. Because a non-diversified portfolio is more likely to experience large market price fluctuations, the Fund may be subject to a greater risk of loss than a fund that has a diversified portfolio.

Your investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

 

3


 

HISTORICAL FUND PERFORMANCE

You should review the following information regarding the past performance of the Fund. It shows how the Fund’s investment return can change from year to year and how the Fund’s returns can vary from the performance of selected broad market indexes over various time periods. This information is intended to give you some indication of the risk associated with an investment in the Fund. Past performance (both before and after taxes) is not, however, an indication as to how the Fund may perform in the future.

Prior to April 1, 2008, the Fund’s name was “Cohen & Steers Utility Fund, Inc.,” and normally the Fund invested at least 80% of its assets in common stocks and other equity securities issued by companies engaged in the utilities industry (utility companies); investments in foreign issuers were limited to 20% of its total assets.

This chart shows the annual total return for the Fund’s Class A shares for each full calendar year since Class A shares of the Fund commenced operations, but does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. This chart does not reflect the sales charges imposed on Class A shares; if these amounts were reflected, returns would be less than those shown.

LOGO

Highest quarterly return during this period:    9.26% (quarter ended March 31, 2007)

Lowest quarterly return during this period:    –5.28% (quarter ended December 31, 2005)

 

* The annual returns for the Class B and Class C shares of the Fund are substantially similar to the annual returns of the Class A shares because the assets of all share classes are invested in the same portfolio of securities. The annual returns differ only to the extent that the classes do not have the same expenses.

 

4


This table shows the average annual total returns of the Fund’s Class A, B and C shares for the past year, and the period since the Fund commenced operations, and compares these returns with the performance of three indexes. Index performance does not reflect deduction for fees, expenses or taxes. After-tax returns are shown for Class A shares only. After-tax returns for the other classes will vary. Class B shares are no longer being offered except through dividend reinvestment and permitted exchanges by existing Class B shareholders.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.

Average Annual Total Returns

(for periods ended December 31, 2007)

 

    

1 Year

   

Since
Inception**

 

Class A Shares

    

Return Before Taxes

   18.26 %(a)   19.95 %(a)

Return After Taxes on Distributions

   15.23 %   18.48 %

Return After Taxes on Distributions and Sale of Fund Shares

   15.06 %   17.23 %

Class B Shares

    

Return Before Taxes

   18.14 %(b)   20.14 %(c)

Class C Shares

    

Return Before Taxes

   22.04 %(d)   20.89 %(e)

Macquarie Global Infrastructure Index*

   23.00 %   28.04 %

S&P 1500 Utilities Index*

   16.96 %   20.95 %

S&P 500® Index*

   5.49 %   10.00 %

 

  * The Fund’s Board of Directors, in conjunction with the changes to the investment strategy, approved a change to the Fund’s primary benchmark to the Macquarie Global Infrastructure Index from the S&P 1500 Utilities Index. The Macquarie Global Infrastructure Index, calculated and managed by FTSE, is designed to reflect the stock performance of infrastructure companies, principally those engaged in the management, ownership and or operation of infrastructure and utility assets and consists of 244 infrastructure/utilities stocks in the FTSE Global All-Cap Index, and has a combined market capitalization of approximately $1,926,733 million as of December 31, 2007. The S&P 1500 Utilities Index is an unmanaged market capitalization weighted index of 75 companies whose primary business involves generation, transmission and/or distribution of electricity and/or natural gas. The Standard & Poor’s 500 Index is an unmanaged index of common stocks that is frequently used as a general measure of stock market performance. Performance figures include reinvestment of income dividends and, for the Fund, capital gains distributions. You should note that the Fund is a professionally managed mutual fund while the indexes are unmanaged, do not incur expenses and are not available for investment.

 

** The inception date was May 3, 2004.

 

(a) Returns reflect the imposition of a front end sales load of 4.50%. Without the sales load, the returns would have been 23.84% for the year ended December 31, 2007 and 21.47% since inception.

 

(b) Return includes a deferred sales charge of 5%. Without the deferred sales charge, the returns would have been 23.14% for the year ended December 31, 2007.

 

(c) Return includes a deferred sales charge of 3%. Without the deferred sales charge, the returns would have been 20.66% for the year ended December 31, 2007.

 

(d) Return includes a deferred sales charge of 1%. Without the deferred sales charge, the returns would have been 23.04% for the year ended December 31, 2007.

 

(e) Return does not include a sales charge.

 

5


 

FEES AND EXPENSES OF THE FUND

 

 

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

 

    

Class A

 

Class B*

 

Class C

Shareholder Fees (fees paid directly from your investment):

      

Maximum sales charge (load) imposed on purchases (as a percentage of offering price)

   4.50%(1)   0%   0%

Maximum sales charge (load) imposed on reinvested dividends (and other distributions) (as a percentage of offering price)

   0%   0%   0%

Maximum deferred sales charge (load) (as a percentage of original purchase price or redemption proceeds, whichever is lower)

   0%(2)  

    
    
5% in 1st year

4% in 2nd year

3% in 3rd and 4th years

2% in 5th year

1% in 6th year

None thereafter(3)

  1% in 1st Year

Redemption Fee (as a percentage of redemption proceeds; also imposed on exchanges)

  

    
2.00% during the first 60 days;

0% thereafter(4)

  0%   0%

Annual Fund Operating Expenses (expenses that are deducted from Fund assets):

 

   
    

Class A

   

Class B

   

Class C

 

Management Fee

   0.75 %   0.75 %   0.75 %

Distribution (12b-1) Fees

   0.25 %   0.75 %(5)   0.75 %

Service Fee

   0.10 %   0.25 %(5)   0.25 %

Other Expenses

   0.54 %   0.54 %   0.53 %
                  

Total Annual Fund Operating Expenses

   1.64 %   2.29 %   2.28 %

Fee Waiver/Expense Reimbursement

   (0.14 )%   (0.14 )%   (0.13 )%
                  

Net Annual Fund Operating Expenses(6)

   1.50 %   2.15 %   2.15 %
                  

 

(1) You may be able to reduce or eliminate the sales charge. See How to Purchase and Sell Fund Shares—Class A Shares.

 

(2) A contingent deferred sales charge of 1% applies on certain redemptions made within 12 months following a purchase of $1 million or more made without an initial sales charge.

 

(3) Class B shares of the Fund automatically convert to Class A shares at the end of the month which precedes the eighth anniversary of the purchase date.

 

(4) The redemption and exchange fees are charged only to certain investors that are authorized to purchase Class A shares at net asset value without regard to investment amount. See How to Sell Fund Shares—Payment of Redemption Proceeds for additional information.

 

(5) Until conversion into Class A shares, which occurs automatically at the end of the month which precedes the eighth anniversary of the purchase date.

 

(6) Through December 31, 2008, the Advisor has contractually agreed to waive its fee and/or reimburse the Fund for expenses incurred to the extent necessary to maintain the Fund’s total annual operating expenses at 1.50% for the Class A shares and 2.15% for the Class B shares and Class C shares.

 

* Class B shares are no longer being offered except through dividend reinvestment and permitted exchanges by existing Class B shareholders.

 

6


EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the 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, that the Fund’s operating expenses remain the same and that the Advisor did not reimburse expenses after the first year (for the first year, expenses are based on the net amount pursuant to the contractual arrangement). 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

Class A shares

   $ 596    $ 931    $ 1,289    $ 2,295

Class B shares

           

Assuming redemption at the end of the period

     718      1,002      1,412      2,452

Assuming no redemption at the end of the period

     218      702      1,212      2,452

Class C shares

           

Assuming redemption at the end of the period

     318      700      1,208      2,605

Assuming no redemption at the end of the period

     218      700      1,208      2,605

 

 

INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

 

 

OBJECTIVE

The investment objective of the Fund is total return. In pursuing total return, the Fund seeks both capital appreciation and current income. There can be no assurance that the Fund will achieve its investment objective. The Fund may change its investment objective without shareholder approval, although it has no current intention to do so.

 

 

PRINCIPAL INVESTMENT STRATEGIES

In making investment decisions with respect to common stocks and other equity securities issued by infrastructure companies, the Advisor relies on a fundamental analysis of each company. Securities are evaluated for their potential to provide an attractive total return through a combination of current income and capital appreciation. The Advisor reviews each company’s potential for success in light of general economic and industry trends, as well as the company’s quality of management, financial condition, business plan, industry and sector market position, dividend payout ratio and corporate governance. The Advisor utilizes a value-oriented approach, and evaluates each company’s valuation on the basis of relative price/cash flow and price/earnings multiples, earnings growth rate, dividend yield, and price/book value, among other metrics.

In making investment decisions with respect to preferred securities and other fixed-income securities, the Advisor seeks to select what it believes are undervalued securities on the basis of risk and return profiles. In making these determinations, the Advisor evaluates the fundamental characteristics of an issuer, including an issuer’s creditworthiness, and also takes into account prevailing market factors. In analyzing credit quality, the Advisor considers not only fundamental analysis, but also an issuer’s corporate and capital structure and the placement of the preferred or fixed-income securities within that structure. The Advisor also takes into account other factors, such as call and other structural features, event risk, the likely directions of ratings and relative value versus other income security classes, among others.

 

7


Infrastructure Companies

Under normal circumstances, the Fund will invest at least 80% of its net assets in the equity securities of infrastructure companies. Shareholders will be provided with at least 60 days prior written notice of any change to this investment policy. These equity securities can consist of:

 

·  

common stocks

 

·  

rights or warrants to purchase common stocks

 

·  

securities convertible into common stocks where the conversion feature represents, in the Advisor’s view, a significant element of the securities’ value

 

·  

preferred stocks

 

·  

equity units

For purposes of the Fund’s investment policies, an infrastructure company is one that derives at least 50% of its revenues from, or has at least 50% of its assets committed to, the generation, transmission, sale or distribution of electric energy; distribution, purification and treatment of water; production, transmission or distribution of natural resources used to produce energy; provision of communications services, including cable television, satellite, microwave, radio, telephone and other communications media; management, ownership and/or operation of infrastructure assets; or construction, development or financing of infrastructure assets, such as pipelines, toll roads, airports, railroads or ports. Infrastructure companies also include energy-related companies organized as MLPs and their affiliates.

Preferred and Other Fixed Income Securities

The Fund may invest up to 20% of its net assets in preferred securities and other fixed-income securities, including preferred stock, hybrid-preferred securities, corporate debt obligations and debt securities issued or guaranteed by the U.S. government or its agencies or instrumentalities.

Foreign (Non-U.S.) Securities

The Fund may invest without limit in securities of foreign issuers, or sponsored and unsponsored depositary receipts for such securities. Depositary receipts may take the form of American Depositary Receipts (ADRs), Global Depositary Receipts (GDRs) and European Depositary Receipts (EDRs). These securities may not necessarily be denominated in the same currency as the securities into which they may be converted. ADRs are receipts typically issued by a United States bank or trust company which evidence ownership of underlying securities issued by a foreign corporation. GDRs and EDRs are receipts issued outside the United States, typically by non-United States banks and trust companies, that evidence ownership of either foreign or domestic securities. Generally, ADRs in registered form are dollar denominated securities designed for use in the U.S. securities markets. GDRs, in bearer form, are designated for use outside the United States. EDRs, in bearer form, are designed for use in the European securities markets. Dividend income the Fund receives from foreign securities may not be eligible for the special tax treatment applicable to qualified dividend income.

Master Limited Partnerships

The Fund may invest up to 25% of its net assets in energy-related companies organized as MLPs and their affiliates. An MLP is a publicly traded company organized as a limited partnership or limited liability company and treated as a partnership for Federal income tax purposes. MLPs may derive income and gains from the exploration, development, mining or production, processing, refining, transportation (including pipelines transporting gas, oil, or products thereof), or the marketing of any

 

8


mineral or natural resources. MLPs generally have two classes of owners, the general partner and limited partners. The general partner of an MLP is typically owned by one or more of the following: a major energy company, an investment fund, or the direct management of the MLP. The general partner may be structured as a private or publicly traded corporation or other entity. The general partner typically controls the operations and management of the MLP through an up to 2% equity interest in the MLP plus, in many cases, ownership of common units and subordinated units. Limited partners own the remainder of the partnership, through ownership of common units, and have a limited role in the partnership’s operations and management.

Lower Rated Securities

The Fund may invest up to 20% of its net assets in securities that at the time of investment are rated below investment grade (below Baa or BBB) by Moody’s Investors Service, Inc. (Moody’s), Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc. (S&P), Fitch Ratings (Fitch) or an equivalent rating by a nationally recognized statistical rating agency or that are unrated but judged to be below investment grade by the Advisor. These below investment grade quality securities are sometimes referred to as junk bonds and are regarded as having predominantly speculative characteristics with respect to the payment of interest and repayment of principal.

 

 

ADDITIONAL INVESTMENT INFORMATION

In addition to the principal investment strategies described above, the Fund has other investment practices that are described here and in the statement of additional information (SAI).

Illiquid Securities

The Fund will not invest more than 15% of its net assets in illiquid securities. A security is illiquid if, for legal or market reasons, it cannot be promptly sold (i.e., within seven days) at a price which approximates its fair value.

Defensive Position

When the Advisor believes that market or general economic conditions justify a temporary defensive position, the Fund may deviate from its investment objective and invest all or any portion of its assets in investment grade fixed income securities, without regard to whether the issuer is an infrastructure company. When and to the extent the Fund assumes a temporary defensive position, it may not pursue or achieve its investment objective.

Portfolio Turnover

The Fund may engage in active and frequent portfolio trading when considered appropriate, but short-term trading will not be used as the primary means of achieving its investment objective. However, there are no limits on the rate of portfolio turnover, and investments may be sold without regard to length of time held when, in the opinion of the Advisor, investment considerations warrant such action. A higher turnover rate results in correspondingly greater brokerage commissions and other transactional expenses which are borne by the Fund. High portfolio turnover may result in the realization of net short-term capital gains by the Fund which, when distributed to shareholders, will be taxable as ordinary income. See Additional Information—Tax Considerations.

Portfolio Holdings

A description of the Fund’s policies and procedures with respect to the disclosure of the Fund’s portfolio securities is available in the SAI. The Fund’s annual and semi-annual reports, which are sent

 

9


to shareholders and filed with the Securities and Exchange Commission (SEC), contain information about the Fund’s portfolio holdings, including a complete schedule of holdings. The Fund also files its complete schedule of portfolio holdings with the SEC on Form N-Q as of the end of its first and third fiscal quarters. The Fund’s full portfolio holdings are published semi-annually in reports sent to stockholders and such reports are made available on http://www.cohenandsteers.com in the “Our Funds” section, generally within 60 days after the end of each semi-annual period. The Fund also posts top 10 holdings quarterly on the website, within 30 days after the end of each quarter. The holdings information remains available until the next quarter’s holdings are posted on the website.

 

 

PRINCIPAL RISKS OF INVESTING IN THE FUND

Because prices of equity securities fluctuate from day to day, the value of the Fund’s portfolio and the price per share will vary based upon general market conditions and the value of the securities held in the Fund’s portfolio.

General Risks of Investing in Infrastructure Companies

Securities and instruments of infrastructure companies are more susceptible to adverse economic or regulatory occurrences affecting their industries. Infrastructure companies may be subject to a variety of factors that may adversely affect their business or operations, including high interest costs in connection with capital construction programs, high leverage, costs associated with environmental and other regulations, the effects of economic slowdown, surplus capacity, increased competition from other providers of services, uncertainties concerning the availability of fuel at reasonable prices, the effects of energy conservation policies and other factors. Infrastructure companies may also be affected by or subject to:

 

·  

high interest costs in connection with capital construction and improvement programs;

 

·  

difficulty in raising capital in adequate amounts on reasonable terms in periods of high inflation and unsettled capital markets;

 

·  

inexperience with and potential losses resulting from a developing deregulatory environment;

 

·  

costs associated with compliance with and changes in environmental and other regulations;

 

·  

regulation by various government authorities;

 

·  

government regulation of rates charged to customers;

 

·  

service interruption due to environmental, operational or other mishaps;

 

·  

the imposition of special tariffs and changes in tax laws, regulatory policies and accounting standards;

 

·  

technological innovations that may render existing plants, equipment or products obsolete; and

 

·  

general changes in market sentiment towards infrastructure and utilities assets.

Risks of Investment in Preferred Securities

There are special risks associated with investing in preferred securities, including:

Deferral and Omission. Preferred securities may include provisions that permit the issuer, at its discretion, to defer or omit distributions for a stated period without any adverse consequences to the issuer.

 

10


Subordination. Preferred securities are subordinated to bonds and other debt instruments in a company’s capital structure in terms of priority to corporate income and liquidation payments, and therefore will be subject to greater credit risk than more senior debt instruments.

Liquidity. Preferred securities may be substantially less liquid than many other securities, such as common stocks or U.S. government securities.

Limited Voting Rights. Generally, preferred securities offer no voting rights with respect to the issuing company unless preferred dividends have been in arrears for a specified number of periods, at which time the preferred security holders may elect a number of directors to the issuer’s board.

Special Redemption Rights. In certain varying circumstances, an issuer of preferred securities may redeem the securities prior to a specified date. As with call provisions, a redemption by the issuer may negatively impact the return of the security held by the Fund.

Risks of Investment in Foreign (Non-U.S.) Securities

The Fund may be subject to additional investment risks for foreign securities that are different in some respects from those incurred by investments in securities of domestic issuers. Such risks include currency risks, future political and economic developments, the possible imposition of foreign withholding taxes on income payable on the securities, the possible establishment of exchange controls, the possible seizure or nationalization of foreign deposits, or the adoption of other foreign governmental restrictions which might adversely affect the payments on such securities. In addition, there may be less publicly available information about a foreign issuer than about a domestic issuer, and foreign issuers may not be subject to the same accounting, auditing and financial recordkeeping standards and requirements as domestic issuers. Dividend income the Fund receives from foreign securities may not be eligible for the special tax treatment applicable to qualified dividend income.

In addition, brokerage commissions, custodial services and other costs relating to investment in foreign securities markets generally are more expensive than in the U.S. and foreign securities markets may have substantially less volume than U.S. securities markets, making many foreign issuers less liquid and more volatile than securities of comparable domestic issuers.

Emerging Markets Risk

The Fund is not limited in the extent to which it may invest in securities of companies domiciled in so-called “emerging markets” (or lesser developed countries). Investing in securities of companies in emerging markets may entail special risks relating to potential political and economic instability and the risks of expropriation, nationalization, confiscation or the imposition of restrictions on foreign investment, the lack of hedging instruments, and on repatriation of capital invested. Emerging securities markets are substantially smaller, less developed, less liquid and more volatile than the major securities markets. The limited size of emerging securities markets and limited trading value compared to the volume of trading in U.S. securities could cause prices to be erratic for reasons apart from factors that affect the quality of the securities. For example, limited market size may cause prices to be unduly influenced by traders who control large positions. Adverse publicity and investors’ perceptions, whether or not based on fundamental analysis, may decrease the value and liquidity of portfolio securities, especially in these markets. Many emerging market countries have experienced substantial, and in some periods extremely high, rates of inflation for many years. Inflation and rapid fluctuations in inflation rates and corresponding currency devaluations have had and may continue to have negative effects on the economies and securities markets of certain emerging market countries.

 

11


Foreign Currency Risk and Currency Hedging Risk

Although the Fund will report its net asset value and pay dividends in U.S. dollars, foreign securities often are purchased with and make interest payments in foreign currencies. Therefore, when the Fund invests in foreign securities, it will be subject to foreign currency risk, which means that the Fund’s net asset value could decline as a result of changes in the exchange rates between foreign currencies and the U.S. dollar. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest to investors located outside the country, due to blockage of foreign currency exchanges or otherwise. The Fund may engage in various investments that are designed to hedge the Fund’s foreign currency risks. While these transactions will be entered into to seek to manage these risks, these investments may not prove to be successful or may have the effect of limiting the gains from favorable market movements.

MLP Risk

An investment in MLP units involves some risks that differ from an investment in the common stock of a corporation. Holders of MLP units have limited control on matters affecting the partnership. Investing in MLPs involves certain risks related to investing in the underlying assets of the MLPs and risks associated with pooled investment vehicles. MLPs holding credit-related investments are subject to interest rate risk and the risk of default on payment obligations by debt issuers. MLPs that concentrate in a particular industry or a particular geographic region are subject to risks associated with such industry or region. The benefit derived from the Fund’s investment in MLPs is largely dependent on the MLPs being treated as partnerships for Federal income tax purposes.

Credit Risk and Lower-Rated Securities Risk

Credit risk is the risk that a security in the Fund’s portfolio will decline in price or the issuer will fail to make dividend, interest or principal payments when due because the issuer of the security experiences a decline in its financial status. Preferred securities normally are subordinated to bonds and other debt instruments in a company’s capital structure, in terms of priority to corporate income and claim to corporate assets, and therefore will be subject to greater credit risk than debt instruments. The Fund may invest in securities that are rated below investment grade. A security will be considered to be investment grade if, at the time of the investment, such security has a rating of “BBB” or higher by S&P, “Baa” or higher by Moody’s or an equivalent rating by a nationally recognized statistical rating agency or, if unrated, such security is determined by the Advisor to be of comparable quality. Lower-rated securities, or equivalent unrated securities, which are commonly known as “junk bonds,” generally involve greater volatility of price and risk of loss of income and principal, and may be more susceptible to real or perceived adverse economic and competitive industry conditions than higher grade securities. Such securities may face major ongoing uncertainties or exposure to adverse business, financial or economic conditions which could lead to inadequate capacity to meet timely interest and principal payments. It is reasonable to expect that any adverse economic conditions could disrupt the market for lower-rated securities, have an adverse impact on the value of those securities and adversely affect the ability of the issuers of those securities to repay principal and interest on those securities.

 

 

MANAGEMENT OF THE FUND

 

 

THE ADVISOR AND SUBADVISORS

Cohen & Steers Capital Management, Inc., with offices located at 280 Park Avenue, New York, New York 10017, has been retained as the Fund’s investment advisor. The Advisor, a registered investment advisor, was formed in 1986 and its clients include pension plans, endowment funds and

 

12


investment companies, including each of the open-end and closed-end Cohen & Steers funds. As of December 31, 2007, the Advisor managed approximately $29.8 billion in assets. The Advisor is a wholly-owned subsidiary of Cohen & Steers, Inc., a publicly traded company whose common stock is listed on the New York Stock Exchange under the symbol “CNS.”

The Advisor will be responsible for the overall management of the Fund’s portfolio and for the supervision and ongoing monitoring of the Fund’s subadvisors (the Subadvisors). Cohen & Steers Asia Limited (CNS Asia), with offices located at 12/F Citibank Tower, Citibank Plaza, No. 3 Garden Road, Central Hong Kong, provides investment research and advisory services with respect to Asia Pacific real estate securities and provides trade order execution services for the Fund. CNS Asia was formed in 2005. Cohen & Steers Europe S.A. (CNS Europe), with offices located at 166 Chausee de la Hulpe, Brussels, Belgium, provides investment advisory and research services to the Advisor in connection with managing the Fund’s investments in Europe. CNS Europe was formed in February 2000. Cohen & Steers UK Limited (CNS UK), with offices located at 21 Sackville Street, 4th Floor, London, W1S 3DN, U.K., provides investment advisory and research services to the Advisor and CNS Europe in connection with managing the Fund’s investments in Europe. CNS UK was formed in 2006. Each of the Subadvisors is a registered investment advisor and is a direct or indirect wholly-owned subsidiary of CNS. References in this prospectus to activities and responsibilities of the Advisor may be performed by one or more of the Subadvisors.

Under its Advisory Agreement with the Fund, the Advisor furnishes a continuous investment program for the Fund’s portfolio, makes the day-to-day investment decisions for the Fund and generally manages the Fund’s investments in accordance with the stated policies of the Fund, subject to the general supervision of the Board of Directors of the Fund. The Advisor performs certain administrative services for the Fund and provides persons satisfactory to the Board of Directors of the Fund to serve as officers of the Fund. Such officers, as well as certain other employees and Directors of the Fund, may also be directors, officers, or employees of the Advisor. The Advisor also selects brokers and dealers to execute the Fund’s portfolio transactions.

For its services under the Advisory Agreement, and for paying the ordinary operating expenses of the Fund, the Fund pays the Advisor a monthly fee at the annual rate of 0.75% of the average daily net asset value of the Fund up to and including $1.5 billion, and 0.65% of the average daily net asset value of the Fund above $1.5 billion. This fee is allocated among the separate classes based on the classes’ proportionate shares of such average daily net asset value.

Taking into account the investment advisory fees waived by the Advisor, the Fund’s effective investment advisory fee during 2007 was 0.61% of average daily net assets. In addition to this investment advisory fee, the Fund pays other operating expenses, which may include but are not limited to, administrative, transfer agency, custodial, legal and accounting fees.

A discussion regarding the Board of Directors’ basis for approving the Advisory Agreement is available in the Fund’s annual report for the year ended December 31, 2007.

 

 

PORTFOLIO MANAGERS

The Fund’s portfolio managers are:

 

·  

Robert Becker—Mr. Becker is a vice president of the Fund. He joined the Advisor in 2003 and currently serves as senior vice president of the Advisor and CNS. Prior to joining the Advisor, Mr. Becker was a co-portfolio manager of the Franklin Utilities Fund at Franklin Templeton Investments. Mr. Becker has previously held positions in equity research for the utility sector at Salomon Smith Barney and Scudder, Stevens and Clark.

 

13


·  

Ben MortonMr. Morton joined the Advisor in 2003 as a research analyst covering utilities, and currently serves as a vice president of the Advisor and CNS. Prior to joining the Advisor, Mr. Morton was a research associate at Citigroup.

Messrs. Becker and Morton manage the Fund’s investment in infrastructure companies.

The SAI provides additional information about the portfolio managers’ compensation, other accounts they manage, and their ownership of securities in the Fund.

 

 

HOW TO PURCHASE AND SELL FUND SHARES

 

 

PRICING OF FUND SHARES

The price at which you can purchase and redeem each class of the Fund’s shares is the net asset value (NAV) of that class of shares next determined after we receive your order in proper form, less any applicable sales charge or redemption fee. Proper form means that your request includes the Fund name and account number, states the amount of the transaction (in dollars or shares), includes the signatures of all owners exactly as registered on the account, signature guarantees (if necessary), any supporting legal documentation that may be required and any outstanding certificates representing shares to be redeemed.

We calculate our NAV per share as of the close of regular trading on the New York Stock Exchange (NYSE), generally 4:00 p.m. eastern time, on each day the NYSE is open for trading. Thus, purchase and redemption orders must be received in proper form by the close of regular trading on the NYSE in order to receive that day’s NAV; orders received after the close of regular trading on the NYSE will receive the NAV next determined. The Fund has authorized one or more brokers to accept on its behalf purchase (and redemption) orders, and these brokers are authorized to designate other intermediaries on the Fund’s behalf. The Fund will be deemed to have received a purchase (or redemption) order when an authorized broker, or that broker’s designee, accepts the order, and that order will be priced at the next computed NAV after this acceptance. We determine NAV per share for each class by dividing that class’s share of the net assets of the Fund (i.e. its assets less liabilities) by the total number of outstanding shares of that class.

Securities for which market prices are unavailable will be valued at fair value pursuant to procedures approved by the Fund’s Board of Directors. Circumstances in which market prices may be unavailable include, but are not limited to, when trading in a security is suspended, the exchange on which the security is traded is subject to an unscheduled close or disruption or material events occur after the close of the exchange on which the security is principally traded. In these circumstances, the Fund determines fair value in a manner that fairly reflects the market value of the security on the valuation date based on consideration of any information or factors it deems appropriate. These may include recent transactions in comparable securities, information relating to the specific security and developments in the markets. In particular, portfolio securities primarily traded on foreign markets are generally valued at the preceding closing values of such securities on their respective exchanges or if after the close of the foreign markets, but prior to the close of trading on the NYSE on the day the securities are being valued, developments occur that are expected to materially affect the value of such securities, such values may be adjusted to reflect the estimated fair value of such securities as of the close of trading on the NYSE using a pricing service and/or procedures approved by the Fund’s Board of Directors.

The Fund’s use of fair value pricing may cause the net asset value of Fund shares to differ from the net asset value that would be calculated using market quotations. Fair value pricing involves subjective

 

14


judgments, and it is possible that the fair value determined for a security may be materially different than the value that could be realized upon the sale of that security.

Because the Fund may hold securities that are primarily listed on foreign exchanges that trade on weekends or days when the Fund does not price its shares, the value of securities held in the Fund may change on days when you will not be able to purchase or redeem Fund shares.

The Fund reserves the right to reject, cancel or rescind any purchase order and to withdraw or suspend the offering of shares at any time. The Fund may also request additional information from you in order to verify your identity. If you do not provide this information or if such information cannot be verified, we reserve the right to close your account to the extent required or permitted by applicable law or regulations, including those relating to the prevention of money laundering.

 

 

PURCHASING THE CLASS OF FUND SHARES THAT IS BEST FOR YOU

Mutual funds typically incur costs for the distribution and servicing of their shares. Many funds pay for these costs by charging a variety of fees to their shareholders. Some of the most common fees include:

 

·     Initial Sales Loads

  A percentage fee deducted from your initial investment.

·     Contingent Deferred Sales Charges

  A percentage fee deducted from your sales proceeds based on the length of time you own your shares.

·     Distribution (12b-1) Fees

  An annual percentage fee used to pay for distribution expenses.

·     Service Fees

  An annual percentage fee used to pay for the cost of servicing shareholder accounts.

·     Redemption Fee

  A percentage fee deducted from your redemption amount.

This Prospectus offers two separate classes of shares to give you flexibility in choosing a fee structure that is most beneficial to you (Class B shares are no longer being offered except through dividend reinvestment and permitted exchanges by existing Class B shareholders). Each class represents an investment in the same portfolio of securities, but as described below, the classes utilize a combination of the above fees and other features to suit your investment needs. Since each investor’s financial considerations are different, you should speak with your financial advisor to help you decide which share class is best for you.

 

 

CLASS A SHARES

 

·  

Initial Sales Loads—The following initial sales loads apply to Class A shares:

 

    

SALES CHARGE AS
A PERCENTAGE OF

 

INVESTMENT AMOUNT

  

OFFERING
PRICE*

   

NET AMOUNT
INVESTED

 

Less than $100,000

   4.50 %   4.71 %

$100,000 but less than $250,000

   3.75 %   3.90 %

$250,000 but less than $500,000

   2.75 %   2.83 %

$500,000 but less than $1 million

   2.25 %   2.30 %

$1 million or more

   None     None  

 

* “Offering Price” is the amount you actually pay for Fund shares; it includes the initial sales charge.

 

15


·  

Contingent Deferred Sales Charge (CDSC)—None, but if you invest $1,000,000 or more in Class A shares and sell those shares within one year of their purchase, you may pay a charge equal to 1% of the lesser of the current NAV or the original cost of the shares that you sell.

 

·  

Distribution (12b-1) Fees—0.25% of average daily net assets annually.

 

·  

Service Fees—0.10% of average daily net assets annually.

You may want to purchase Class A shares if:

 

·  

you prefer to pay an initial sales load and have the benefit of lower continuing fees

 

·  

you expect to maintain your investment for an extended period of time

 

·  

you qualify for a reduced initial sales load due to the size of your investment

Reducing Your Initial Sales Load. As shown in the table above, the size of your investment in Class A shares will affect the initial sales load that you pay. The Fund offers certain methods, which are described below, that you can use to reduce the initial sales load.

Aggregating Accounts. The size of the total investment applies to the total amount being invested by any person, which includes:

 

·  

you, your spouse and children under the age of 21

 

·  

a trustee or other fiduciary purchasing for a single trust, estate or single fiduciary account although more than one beneficiary is involved

 

·  

any U.S. bank or investment advisor purchasing shares for its investment advisory clients

Rights of Accumulation. A person (defined above) may take into account not only the amount being invested, but also the current net asset value of the shares of the Fund and shares of other Cohen & Steers open-end funds that impose sales charges (eligible funds) already held by such person in order to reduce the sales charge on the new purchase.

Letter of Intention. You may reduce your Class A sales charge by establishing a letter of intention. A letter of intention allows a person (defined above) to aggregate purchases of shares of the Fund and other eligible funds during a 12-month period in order to reduce the sales charge. All shares of the Fund and other eligible funds currently owned will be credited as purchases toward completion of the letter at the greater of their net asset value on the date the letter is executed or their cost. You should retain any records necessary to substantiate cost basis because the Fund, the Transfer Agent or your dealer or financial intermediary may not maintain this information. Capital appreciation and reinvested dividends and capital gains do not count toward the required purchase amount during this 12-month period.

At the time of your purchase, you must inform the Fund, your dealer or other financial intermediary of any other investment in the Fund or in other eligible funds that would count toward reducing your sales load. This includes, for example, investments held in a retirement account, an employee benefit plan, or at a dealer or other financial intermediary other than the one handling your current purchase. In addition, you may be asked to provide supporting account statements or other information to allow us to verify your eligibility for a discount. If you do not let the Fund, your dealer or other financial intermediary know that you are eligible for a discount, you may not receive the discount to which you are otherwise entitled.

You may obtain more information about sales charge reductions and waivers from http://www.cohenandsteers.com, the SAI or your dealer or financial intermediary.

 

16


Sales at Net Asset Value. Class A shares of the Fund may be sold at NAV (i.e., without a sales charge) to certain investors without regard to investment amount, including investment advisors and financial planners who place trades for their own accounts or the accounts of their clients and who charge a management, consulting or other fee for their services (NAV Purchases). See the SAI for additional information on NAV Purchases.

The Fund will charge a redemption fee of 1.00% of the value of such Class A shares redeemed or exchanged within six months of the time of any NAV Purchase (other than those shares acquired through reinvestment of dividends or other distributions) as described below under How to Sell Fund Shares—Payment of Redemption Proceeds.

Dealer Commission. Cohen & Steers Securities, LLC (the Distributor) may pay dealers a commission of up to 1% on investments of $1 million or more in Class A shares.

Higher Dividends. The net income attributable to, and dividends payable on, the shares of each class is reduced by the amount of annual distribution and other expenses of each class. Because Class A shares bear lower annual distribution and other expenses, they will tend to pay higher dividends than Class B and Class C shares.

Reinstatement Privilege. If you redeem your Class A shares and then decide to reinvest in Class A shares, you may, within 120 calendar days of the date of your redemption, use all or any part of the proceeds of the redemption to reinstate, free of an initial sales load, all or any part of your investment in Class A shares of the Fund. If you redeem your Class A shares and your redemption was subject to a contingent deferred sales charge, you may reinstate all or any part of your investment in Class A shares within 120 calendar days of the date of your redemption and receive a credit for the applicable contingent deferred sales charge that you paid. Your investment will be reinstated at the NAV per share next determined after we receive your request. The Transfer Agent must be informed that your new purchase represents a reinstated investment. Reinstated shares must be registered exactly and be of the same class as the shares previously redeemed, and the Fund’s minimum initial investment amount must be met at the time of reinstatement.

The ability of a shareholder to utilize the reinstatement privilege is subject to the Fund’s right to reject any purchase or exchange order if it believes such shareholder is engaged in, or has engaged in, market timing or other abusive trading practices.

 

 

CLASS B SHARES

Class B shares are no longer being offered except through dividend reinvestment and permitted exchanges by existing Class B shareholders.

 

·  

CDSC—If you redeem your Class B shares within six years of their purchase, you will be subject to the following charge which is based on the lesser of the current NAV of your shares or their original cost:

 

YEAR SINCE PURCHASE

  

CDSC

 

Less than 1 year

   5.0 %

1 to 2 years

   4.0 %

2 to 4 years

   3.0 %

4 to 5 years

   2.0 %

5 to 6 years

   1.0 %

6 years or more

   None  

 

17


·  

Distribution (12b-1) Fees—0.75% of average daily net assets annually, until your Class B shares are converted to Class A shares, which will occur automatically at the end of the month which precedes the 8th anniversary of your purchase date.

 

·  

Service Fees—0.25% of average daily net assets annually.

The following is additional information about Class B shares:

Automatic Conversion through Reinvestment. Class B shares that you purchase through reinvestment of dividends and distributions will convert automatically to Class A shares in the same manner (discussed above) as other Class B shares that you may own.

Potentially Higher Costs. Higher continuing distribution fees plus applicable CDSC may cause the total fees you pay to exceed the total fees that would be payable on the same amount of Class A or Class C shares.

Lower Dividends. The net income attributable to, and dividends payable on, the shares of each class is reduced by the amount of annual distribution and other expenses of each class. Because Class B shares bear higher annual distribution and other expenses than Class A shares, they will tend to pay lower dividends than Class A shares.

 

 

CLASS C SHARES

 

·  

Initial Sales Loads—None.

 

·  

CDSC—You may pay a charge equal to 1% of the lesser of the current net asset value of your shares or their original cost if you sell your shares within one year of their purchase.

 

·  

Distribution (12b-1) Fees—0.75% of average daily net assets annually.

 

·  

Service Fees—0.25% of average daily net assets annually.

You may want to purchase Class C shares if:

 

·  

you prefer to have all of your assets invested initially

 

·  

you are uncertain as to the length of time you intend to hold your shares of the Fund

The following is additional information about Class C shares:

Dealer Commission. The Distributor may pay a commission of up to 1% to dealers who sell Class C shares.

No Automatic Conversion Feature. There is no automatic conversion feature as there is for Class B shares, making your investment subject to higher distribution fees for an indefinite period of time, and potentially costing you more than owning Class A or Class B shares.

Lower Dividends. The net income attributable to, and dividends payable on, the shares of each class is reduced by the amount of annual distribution and other expenses of each class. Because Class C shares bear higher annual distribution and other expenses than Class A shares, they will tend to pay lower dividends than Class A shares.

Each class has advantages and disadvantages for different investors. You should choose the class that best suits your circumstances and objectives.

 

18


 

A NOTE ON CONTINGENT DEFERRED SALES CHARGES

For purposes of determining the CDSC, if you sell only some of your shares, shares that are not subject to any CDSC will be sold first (e.g., shares acquired through reinvestment of distributions and shares held longer than the required holding period), followed by shares that you have owned the longest. All CDSCs will be waived on redemptions of shares following the death or disability of a shareholder or to meet the requirements of certain qualified retirement plans. See the SAI for more information.

 

 

CLASS I SHARES

The Fund also offers Class I shares, which are described in a separate prospectus and are available for purchase only by certain investors. The Class I shares do not have a front-end sales load or a CDSC, and are not subject to distribution plan expenses. To obtain the prospectus that describes the Fund’s Class I shares, contact the Fund or the Distributor by writing to the address or by calling the telephone number listed on the back cover of this Prospectus.

 

 

PURCHASE MINIMUMS

You may open an account with the Fund with a minimum investment of $1,000. Additional investments must be at least $250. We are free to reject any purchase order, and we reserve the right to waive or change these minimum investment requirements.

You can purchase the Fund’s shares through authorized dealers, other financial intermediaries or directly through the Distributor. For accounts opened directly through the Distributor, a completed and signed Subscription Agreement is required for the initial account opened with the Fund.

 

 

FORM OF PAYMENT

We will accept payment for shares in two forms:

1. A check drawn on any bank or domestic savings institution. Checks must be payable in U.S. dollars and will be accepted subject to collection at full face value.

2. A bank wire or federal reserve wire of federal funds.

 

 

PURCHASES OF FUND SHARES

Initial Purchase By Wire

1. Telephone toll free from any continental U.S. state: (800) 437-9912. When you contact the Transfer Agent, you will need the following information:

 

·  

name of the Fund

 

·  

class of shares

 

·  

name(s) in which shares are to be registered address social security or tax identification number (where applicable)

 

·  

dividend payment election

 

·  

amount to be wired

 

·  

name of the wiring bank

 

·  

name and telephone number of the person to be contacted in connection with the order

 

19


The Transfer Agent will assign you an account number.

2. Instruct the wiring bank to transmit at least the required minimum amount (see Purchase Minimums above) to the custodian:

State Street Bank and Trust Company

One Lincoln Street

Boston, Massachusetts 02111

ABA # 011000028

Account: DDA # 99055287

Attn: Cohen & Steers Global Infrastructure Fund, Inc.

For further credit to: (account name)

Account Number: (provided by the Transfer Agent)

3. Complete the Subscription Agreement included in the center of this Prospectus. Mail the Subscription Agreement to the Transfer Agent:

Boston Financial Data Services

Attn: Cohen & Steers Funds

P.O. Box 8123

Boston, Massachusetts 02266-8123

Initial Purchase By Mail

1. Complete the Subscription Agreement included in the center of this Prospectus.

2. Mail the Subscription Agreement and a check in at least the required minimum amount per class purchased (see Purchase Minimums above), payable to the Fund, to the Transfer Agent at the above address.

Additional Purchases By Wire

1. Telephone toll free from any continental U.S. state: (800) 437-9912. When you contact the Transfer Agent, you will need the following information:

 

·  

name of the Fund

 

·  

class of shares

 

·  

account number

 

·  

amount to be wired

 

·  

name of the wiring bank

 

·  

name and telephone number of the person to be contacted in connection with the order

2. Instruct the wiring bank to transmit at least the required minimum amount (see Purchase Minimums above) to the custodian:

State Street Bank and Trust Company

One Lincoln Street

Boston, Massachusetts 02111

ABA # 011000028

Account: DDA #99055287

Attn: Cohen & Steers Global Infrastructure Fund, Inc.

 

20


For further credit to: (Account Name)

Account Number: (provided by the Transfer Agent)

Additional Purchases By Mail

1. Make a check payable to the Fund in at least the required minimum amount (see Purchase Minimums above). Write your Fund account number and the class of shares to be purchased on the check.

2. Mail the check and the detachable stub from your account statement (or a letter providing your account number) to the Transfer Agent at the address set forth above.

Purchase by ACH

You may purchase additional shares of the Fund by automated clearing house (ACH). To elect the Auto-Buy option, select it on your Subscription Agreement or call the Transfer Agent and request an optional shareholder services form. ACH is similar to the pre-authorized automatic investment plan, except that you may choose the date on which you want to make the purchase. We will need a voided check or deposit slip before you may purchase by ACH. If you are interested in this option, please call (800) 437-9912.

 

 

PURCHASES THROUGH DEALERS AND INTERMEDIARIES

You may purchase the Fund’s shares through selected authorized dealers and other financial intermediaries. These entities are responsible for promptly transmitting purchase orders to the Distributor and may impose transaction fees that are in addition to the sales charges or any other charges described in this prospectus. Such charges may include processing or service fees, which are typically fixed dollar amounts. You should contact your dealer or intermediary for more information about any additional charges that may apply.

 

 

PURCHASES THROUGH THE DISTRIBUTOR

You may also purchase shares of the Fund directly through the Distributor by mailing a check made payable to Cohen & Steers Global Infrastructure Fund, Inc. along with the completed Subscription Agreement to Cohen & Steers Global Infrastructure Fund, Inc. c/o Boston Financial Data Services, P.O. Box 8123, Boston, Massachusetts 02266-8123. The Distributor will deduct any applicable sales charge from your payment.

 

 

AUTOMATIC INVESTMENT PLAN

The Fund’s automatic investment plan (the Plan) provides a convenient way to invest in the Fund. Under the Plan, you can have money transferred automatically from your checking account to the Fund each month to buy additional shares. If you are interested in this Plan, please refer to the automatic investment plan section of the Subscription Agreement included in this Prospectus or contact your dealer. The market value of the Fund’s shares may fluctuate, and a systematic investment plan such as this will not assure a profit or protect against a loss. You may discontinue the Plan at any time by notifying the Fund by mail or telephone at the address or number on the back cover of this Prospectus.

 

21


 

EXCHANGE PRIVILEGE

You may exchange some or all of your Fund shares for shares of other Cohen & Steers open-end funds provided that you meet applicable investment minimums. If you exchange Fund shares for shares of another multi-class Cohen & Steers fund, you must exchange into shares of the same class of such other fund. In computing the holding period for the purposes of the CDSC, the length of time you have owned your shares will be measured from the date of original purchase and will not be affected by the permitted exchange assuming you exchange into shares of the same class. If you exchange Fund shares for shares of another Cohen & Steers fund that does not impose any sales charges or for shares of SSgA Money Market Fund (described below), then that exchange will be subject to any applicable CDSC. Similarly, if you exchange shares of another Cohen & Steers fund that does not impose any sales charges or exchange shares of SsgA Money Market Fund for shares of the Fund, then that exchange will be subject to applicable initial sales charges.

The Fund will charge a 2.00% redemption fee on certain Class A exchange transactions. See How to Sell Fund Shares—Payment of Redemption Proceeds.

The Fund also makes available for exchange shares of SSgA Money Market Fund, which is advised by State Street Bank and Trust Company. You may request a prospectus and application for the SSgA Money Market Fund by calling (800) 437-9912. Please read the prospectus carefully before you invest.

An exchange of shares may result in your realizing a taxable gain or loss for income tax purposes. See Additional Information—Tax Considerations. The exchange privilege is available to shareholders residing in any state in which the shares being acquired may be legally sold. Before you exercise the exchange privilege, you should read the prospectus of the fund whose shares you are acquiring. Certain dealers may limit or prohibit your right to use the exchange privilege.

We have adopted reasonable procedures that are designed to ensure that any telephonic exchange instructions are genuine. Neither the Fund nor its agents will be liable for any loss or expenses if we act in accordance with these procedures. We may modify or revoke the exchange privilege for all shareholders upon 60 days prior written notice and this privilege may be revoked immediately with respect to any shareholder if the Fund believes that this shareholder is engaged in, or has engaged in, market timing or other abusive trading practices. For additional information concerning exchanges, or to make an exchange, please call the Transfer Agent at (800) 437-9912.

 

 

HOW TO SELL FUND SHARES

You may sell or redeem your shares through your dealer or other financial intermediary or through the Transfer Agent. If your shares are held by your dealer or intermediary in “street name,” you must redeem your shares through that dealer or intermediary.

Redemptions Through Dealers and Other Intermediaries

If you have an account with an authorized dealer or other intermediary, you may submit a redemption request to such dealer or intermediary. They are responsible for promptly transmitting redemption requests to the Distributor. Dealers and intermediaries may impose charges for handling redemption transactions placed through them that are in addition to the sales charges or any other charges described in this Prospectus. Such charges may include processing or service fees, which are typically fixed dollar amounts. You should contact your dealer or intermediary for more information about additional charges that may apply.

 

22


Redemption By Telephone

To redeem shares by telephone, call the Transfer Agent at (800) 437-9912. In order to be honored at that day’s price, we must receive any telephone redemption requests by the close of trading on the NYSE that day, generally 4:00 p.m., Eastern time. Orders received after the close of regular trading on the NYSE will receive the NAV next determined.

If you would like to change your telephone redemption instructions, you must send the Transfer Agent written notification signed by all of the account’s registered owners, accompanied by signature guarantee(s), as described below.

We may modify or suspend telephone redemption privileges without notice during periods of drastic economic or market changes. We have adopted reasonable procedures that are designed to ensure that any telephonic redemption instructions are genuine. Neither the Fund nor its agents will be liable for any loss or expenses if we act in accordance with these procedures. We may modify or terminate the telephone redemption privilege at any time on 30 days notice to shareholders.

Redemption By Mail

You can redeem Fund shares by sending a written request for redemption to the Transfer Agent:

Boston Financial Data Services

P.O. Box 8123

Boston, Massachusetts 02266-8123

Attn: Cohen & Steers Global Infrastructure Fund, Inc.

A written redemption request must:

 

·  

state the number of shares or dollar amount to be redeemed

 

·  

identify your account number and tax identification number

 

·  

be signed by each registered owner exactly as the shares are registered

If the shares to be redeemed were issued in certificate form, the certificate must be endorsed for transfer (or be accompanied by a duly executed stock power) and must be submitted to the Transfer Agent together with a redemption request.

For redemptions made by corporations, executors, administrators or guardians, the Transfer Agent may require additional supporting documents evidencing the authority of the person making the redemption (including evidence of appointment or incumbency). For additional information regarding the specific documentation required, contact the Transfer Agent at (800) 437-9912.

The Transfer Agent will not consider your redemption request to be properly made until it receives all required documents in proper form.

Other Redemption Information

Payment of Redemption Proceeds. The Fund will send you redemption proceeds by check. If you made an election on the Subscription Agreement to receive redemption proceeds by wire, the Fund will send the proceeds by wire to your designated bank account. When proceeds of a redemption are to be paid to someone other than the stockholder, either by wire or check, you must send a letter of instruction and the signature(s) on the letter of instruction must be guaranteed, as described below, regardless of the amount of the redemption. The Transfer Agent will normally mail checks for redemption proceeds within five business days. Redemptions by wire will normally be sent within two business days. The

 

23


Fund will delay the payment of redemption proceeds, however, if your check used to pay for the shares to be redeemed has not cleared, which may take up to 15 days or more.

The Fund will charge a redemption fee of 2.00% of the value of any Class A shares redeemed or exchanged within 60 days of the time of any NAV Purchase (other than those shares acquired through reinvestment of dividends or other distributions). For purposes of calculating the redemption fee, Class A shares that are held longer than 60 days, and Class A shares acquired by reinvestment of dividends or distributions, will be deemed to have been sold first. The redemption fee does not apply in the following circumstances: (i) redemptions of shares held in certain omnibus accounts, including retirement, pension, profit sharing and other qualified plans, as well as bank or trust company accounts, (ii) redemptions of shares held through firm-sponsored, discretionary asset allocation or wrap programs that utilize a regularly scheduled automatic rebalancing of assets and that the Fund determines are not designed to facilitate short-term trading, (iii) redemptions of shares due to the death or disability of a stockholder, (iv) redemptions of shares in connection with required distributions and certain other transactions in an individual retirement account or qualified retirement plan and (v) redemptions of shares by certain other accounts in the absolute discretion of the Fund when a shareholder can demonstrate hardship. The Fund reserves the right to modify or eliminate these waivers at any time.

In addition to the circumstances noted above, the Fund reserves the right to grant additional waivers based on such factors as operational limitations, contractual limitations and further guidance from the SEC or other regulators. Since the Fund is designed to be a long-term investment, this fee is intended to compensate the Fund for the costs imposed when NAV Purchases are redeemed shortly after the purchase.

If your shares are held through a financial intermediary in an omnibus or other group account, the Fund relies on the financial intermediary to assess the redemption fee on underlying shareholder accounts. The application of redemption fees and exemptions may vary and certain intermediaries may not apply the exceptions listed above. If you invest through a financial intermediary, please contact your intermediary for more information regarding when redemption fees will be applied to the redemption of your shares.

Signature Guarantee. You may need to have your signature guaranteed in certain situations, such as:

 

·  

written requests to wire redemption proceeds (if not previously authorized on the Subscription Agreement)

 

·  

sending redemption proceeds to any person, address or bank account not on record

 

·  

transferring redemption proceeds to a Cohen & Steers fund account with a different registration (name/ownership) from yours

 

·  

establishing certain services after the account is opened

You can obtain a signature guarantee from most banks, savings institutions, broker-dealers and other guarantors acceptable to the Fund. The Fund cannot accept guarantees from notaries public or organizations that do not provide reimbursement in the case of fraud.

Redemption of Small Accounts. If your Fund account has a value of $1,000 or less as the result of any voluntary redemption, we may redeem your remaining shares. We will, however, give you 30 days notice of our intention to do so. During this 30-day notice period, you may make additional investments to increase your account value to $1,000 (the minimum purchase amount) or more and avoid having the Fund automatically liquidate your account.

 

24


 

FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES

The Fund is designed for long-term investors with investment horizons of at least six months. Excessive trading, short-term market timing or other abusive trading practices may disrupt portfolio management strategies and harm portfolio performance. For example, in order to handle large flows of cash into and out of a fund, a portfolio manager may need to allocate more assets to cash or other short-term investments or sell securities. Transaction costs, such as brokerage commissions and market spreads, can detract from the Fund’s performance.

Because of potential harm to the Fund and its long-term investors, the Board of Directors of the Fund has adopted policies and procedures to discourage and prevent excessive trading and short-term market timing. As part of these policies and procedures, the Advisor monitors purchase, exchange and redemption activity in Fund shares. The intent is not to inhibit legitimate strategies such as asset allocation, dollar cost averaging or similar activities that may nonetheless result in frequent trading of the Fund’s shares. Therefore, there are no specific restrictions on the volume or number of purchases, exchanges or redemptions of Fund shares a shareholder may make, although the Fund reserves the right to reject or refuse any purchase request that could adversely affect the Fund or its operations. If, based on these procedures, the Advisor believes that a shareholder is engaged in, or has engaged in, market timing or excessive trading, we may place a temporary or permanent block on all further purchases or exchanges of Fund shares.

Multiple accounts under common ownership or control may be considered one account for the purpose of determining a pattern of excessive trading, short-term market timing or other abusive trading practices.

In addition, the Fund charges a 2.00% redemption fee on certain redemptions and this fee is intended to compensate the Fund for the costs that short-term investors impose. The Fund will also utilize fair value pricing in an effort to reduce arbitrage opportunities available to short-term traders.

Due to the complexity and subjectivity involved in identifying excessive trading and market timing activity, there can be no guarantee that the Fund will be able to identify and restrict such activity in all cases. Additionally, it is more difficult for the Fund to monitor the trading activity of beneficial owners of the Fund shares who hold those shares through 401(k) and other group retirement plans and other omnibus arrangements maintained by broker/dealers and other intermediaries. Omnibus account arrangements permit multiple investors to aggregate their respective share ownership positions and purchase, redeem and exchange Fund shares in a single account.

 

 

ADDITIONAL INFORMATION

 

 

DISTRIBUTION PLAN

The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (a Distribution Plan) which allows the Fund to pay distribution fees for the sale and distribution of its shares. Under the Distribution Plan, the Fund may pay the Distributor a quarterly distribution fee at an annual rate of up to 0.25% of average daily value of the Fund’s net assets attributable to the Class A shares and 0.75% of the average daily value of the Fund’s net assets attributable to the Class B and Class C shares. Because these fees are paid out of the Fund’s assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.

 

25


The Distributor is obligated to use the amounts received under the Distribution Plan for payments to qualifying dealers for their assistance in the distribution of the Fund’s shares and for other expenses such as advertising costs and the payment for the printing and distribution of prospectuses to prospective investors. Payments received under the Distribution Plan with respect to Class A and Class C shares will not be used to pay any interest expenses, carrying charges or other financing costs or allocation of overhead of the Distributor. Payments received with respect to Class B shares may be used for these purposes. The Distributor bears distribution expenses to the extent they are not covered by payments under the Distribution Plan. Any distribution expenses incurred by the Distributor in any fiscal year of the Fund, which are not reimbursed from payments under the Distribution Plan accrued in such fiscal year, will not be carried over for payment under the Distribution Plan in any subsequent year.

 

 

SHAREHOLDER SERVICES PLAN

The Fund has adopted a shareholder services plan which provides that the Fund may obtain the services of qualified financial institutions to act as shareholder servicing agents for their customers. For these services, the Fund may pay the shareholder servicing agent a fee at an annual rate of up to 0.10% of the average daily net asset value of the Fund’s Class A shares and up to 0.25% of the average daily net asset value of the Fund’s Class B and Class C shares owned by investors for which the shareholder servicing agent maintains a servicing relationship.

Among the services provided by shareholder servicing agents are: answering customer inquiries regarding account matters; assisting in designating and changing various account options; aggregating and processing purchase and redemption orders and transmitting and receiving funds for shareholder orders; transmitting, on behalf of the Fund, proxy statements, prospectuses and shareholder reports to shareholders and tabulating proxies; processing dividend payments and providing sub-accounting services for Fund shares held beneficially; and providing such other services as the Fund or a shareholder may request.

 

 

OTHER COMPENSATION

The Advisor and the Distributor may make payments from their own resources to dealers and other financial intermediaries for distribution, administrative or other services. Please contact your dealer or intermediary for details about payments it may receive. For further information, please consult the SAI.

 

 

DIVIDENDS AND DISTRIBUTIONS

The Fund intends to declare and pay dividends from its investment income quarterly. The Fund intends to distribute net realized capital gains, if any, at least once each year, normally in December. The Transfer Agent will automatically reinvest your dividends and distributions in additional shares of the Fund unless you elect to have them paid to you in cash.

 

 

TAX CONSIDERATIONS

The following discussion assumes you are a U.S. shareholder. This discussion offers only a brief outline of the federal income tax consequences of investing in the Fund and is based on the federal tax laws in effect on the date hereof. Such tax laws are subject to change by legislative, judicial or administrative action, possibly with retroactive effect. In the SAI we have provided more detailed information regarding the tax consequences of investing in the Fund.

 

26


Dividends paid to you out of the Fund’s “investment company taxable income” as that term is defined in the Code, determined without regard to the deduction for dividends paid, will be taxable to you as ordinary dividend income. If a portion of the Fund’s income consists of dividends paid by U.S. corporations (other than REITs), a portion of the dividends paid by the Fund may be eligible for the corporate dividends received deduction. In addition, for taxable years beginning on or before December 31, 2010, distributions of investment company taxable income designated by the Fund as derived from qualified dividend income will be taxed in the hands of individuals at the rates applicable to long-term capital gain, provided holding period and other requirements are met by both you and the Fund. Dividend income that the Fund receives from U.S. REITs will generally not be treated as qualified dividend income. The Fund does not expect a significant portion of Fund distributions to be eligible for the dividends received deduction or derived from qualified dividend income. Distributions of net capital gain (the excess of net long-term capital gain over net short-term capital loss), if any, designated as capital gain dividends are taxable to you as long-term capital gains, regardless of how long you have held your Fund shares. A distribution of an amount in excess of the Fund’s earnings is treated as a non-taxable return of capital that reduces your tax basis in your shares; any such distribution in excess of your tax basis is treated as gain from a sale of your shares. The tax treatment of your dividends and distributions will be the same regardless of whether they were paid to you in cash or reinvested in additional Fund shares.

A distribution will be treated as paid to you on December 31 of the current calendar year if it is declared by the Fund in October, November or December with a record date in such a month and paid during January of the following year.

Each year, we will notify you of the tax status of dividends and other distributions.

If you sell or otherwise dispose of your Fund shares, or have shares repurchased by the Fund, you may realize a capital gain or loss which will be long-term or short-term, depending generally on your holding period for the shares.

We may be required to withhold U.S. Federal income tax on all taxable distributions and redemption proceeds payable if you

 

·  

fail to provide us with your correct taxpayer identification number;

 

·  

fail to make required certifications; or

 

·  

have been notified by the Internal Revenue Service that you are subject to backup withholding.

Backup withholding is not an additional tax. Any amounts withheld may be credited against your U.S. Federal income tax liability.

The Fund has elected to be treated as, and intends to qualify each year as, a regulated investment company under Federal income tax law. If the Fund so qualifies and distributes each year to its shareholders at least 90% of the sum of its investment company taxable income (as that term is defined in the Internal Revenue Code of 1986, as amended (the Code), but without regard to the deduction for dividends paid) and net tax-exempt interest, the Fund will not be required to pay Federal income taxes on any income it distributes to shareholders. If the Fund distributes less than an amount equal to the sum of 98% of its ordinary income for the calendar year and 98% of its capital gain net income for the one-year period ending on December 31, as elected by the Fund, of such calendar year, plus any ordinary income and capital gain net income from previous years that was not distributed, then the Fund will be subject to a nondeductible 4% excise tax on the undistributed amounts. The Fund intends to make sufficient distributions of its income to satisfy the distribution requirement and prevent

 

27


application of the excise tax. If in any taxable year the Fund fails to qualify as a regulated investment company under the Code, the Fund will be taxed in the same manner as an ordinary corporation and distributions to shareholders will not be deductible by the Fund in computing its taxable income.

Fund distributions also may be subject to state and local taxes. You should consult with your own tax advisor regarding the particular consequences of investing in the Fund.

 

 

PRIVACY POLICY*

In the course of doing business with Cohen & Steers, you may share personal information with us. We are committed to maintaining the privacy of this information and recognize the importance of preventing unauthorized access to it. You may provide personal information (such as your address and social security number) on subscription agreements and requests for forms or other literature and through account transactions with us (such as purchases, sales and requests for account balances). You may also provide us with this information through written, electronic and telephone account inquiries.

We do not sell personal information about current and former customers to anyone, and we do not disclose it unless necessary to process a transaction, service an account or as otherwise required or permitted by law. For example, we may disclose information to companies that perform administrative services for Cohen & Steers, such as transfer agents, or printers that assist us in the distribution of investor materials. These organizations will use this information only for purposes of providing the required services or as otherwise may be required by law. We may also share personal information within the Cohen & Steers family of companies to provide you with additional information about our products and services.

We maintain physical, electronic and procedural safeguards to protect your personal information. Within Cohen & Steers, we restrict access to your personal information to those employees who need it to perform their jobs, such as servicing your account or informing you of new products and services.

The accuracy of your personal information is important. If you need to correct or update your personal or account information, please call us at 800-330-7348. We will be happy to review, correct or update your personal or account information.

 

* This privacy policy applies to the following Cohen & Steers companies: Cohen & Steers Capital Management, Inc., Cohen & Steers Securities, LLC, Cohen & Steers Capital Advisors, LLC and the Cohen & Steers Funds.

 

28


 

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the Fund’s financial performance since its inception. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned or lost on an investment in the Fund (assuming reinvestment of all dividends and distributions). These financial highlights have been derived from financial statements audited by PricewaterhouseCoopers LLP, whose report, along with the Fund’s audited financial statements, are included in the Fund’s current annual report which is available free of charge upon request.

 

     Class A  
     For the Year Ended December 31,    

For the Period
May 3, 2004(a)

through

December 31, 2004

 

Per Share Operating Performance:

  

    2007    

   

    2006    

   

    2005    

   

Net asset value, beginning of period

   $ 16.60     $ 15.25     $ 13.78     $ 11.46  
                                

Income from investment operations:

        

Net investment income

     0.18 (b)     0.39       0.38 (b)     0.29 (b)

Net realized and unrealized gain on investments

     3.75       2.54       1.45       2.20  
                                

Total from investment operations

     3.93       2.93       1.83       2.49  
                                

Less dividends and distributions to shareholders from:

        

Net investment income

     (0.17 )     (0.39 )     (0.34 )     (0.14 )

Net realized gain on investments

     (2.90 )     (1.19 )     (0.00 )(c)     (0.02 )

Tax return of capital

           (0.00 )(c)     (0.02 )     (0.01 )
                                

Total dividends and distributions to shareholders

     (3.07 )     (1.58 )     (0.36 )     (0.17 )
                                

Redemption fees retained by the fund

     0.01       0.00 (c)     0.00 (c)      
                                

Net increase in net asset value

     0.87       1.35       1.47       2.32  
                                

Net asset value, end of period

   $ 17.47     $ 16.60     $ 15.25     $ 13.78  
                                
   

Total investment return(e)

     23.84 %     19.43 %     13.33 %     21.80 %(d)
                                
   

Ratios/Supplemental Data:

        

Net assets, end of period
(in millions)

   $ 43.4     $ 47.0     $ 114.5     $ 26.9  
                                

Ratio of expenses to average daily net assets
(before expense reduction)

     1.64 %     1.54 %     1.58 %     3.55 %(f)
                                

Ratio of expenses to average daily net assets
(net of expense reduction)

     1.50 %     1.50 %     1.49 %     1.50 %(f)
                                

Ratio of net investment income to average daily net assets
(before expense reduction)

     0.85 %     2.05 %     2.44 %     1.26 %(f)
                                

Ratio of net investment income to average daily net assets
(net of expense reduction)

     0.99 %     2.08 %     2.53 %     3.31 %(f)
                                

Portfolio turnover rate

     102 %     56 %     45 %     16 %(d)
                                

 

(a) Commencement of operations.
(b) Calculation based on average shares outstanding.
(c) Amount is less than $0.005.
(d) Not annualized.
(e) Does not reflect sales charges, which would reduce return.
(f) Annualized.

 

29


     Class B  
     For the Year Ended December 31,    

For the Period
May 3, 2004(a)
through
December 31, 2004

 

Per Share Operating Performance:

  

    2007    

   

    2006    

   

    2005    

   

Net asset value, beginning of period

   $ 16.54     $ 15.19     $ 13.74     $ 11.46  
                                

Income from investment operations:

        

Net investment income

     0.06 (b)     0.28       0.28 (b)     0.21 (b)

Net realized and unrealized gain on investments

     3.74       2.54       1.45       2.20  
                                

Total from investment operations

     3.80       2.82       1.73       2.41  
                                

Less dividends and distributions to shareholders from:

        

Net investment income

     (0.06 )     (0.28 )     (0.26 )     (0.10 )

Net realized gain on investments

     (2.90 )     (1.19 )     (0.00 )(c)     (0.02 )

Tax return of capital

           (0.00 )(c)     (0.02 )     (0.01 )
                                

Total dividends and distributions to shareholders

     (2.96 )     (1.47 )     (0.28 )     (0.13 )
                                

Redemption fees retained by the fund

     0.01       0.00 (c)     0.00 (c)      
                                

Net increase in net asset value

     0.85       1.35       1.45       2.28  
                                

Net asset value, end of period

   $ 17.39     $ 16.54     $ 15.19     $ 13.74  
                                
   

Total investment return(e)

     23.14 %     18.66 %     12.59 %     21.08 %(d)
                                
   

Ratios/Supplemental Data:

        

Net assets, end of period
(in millions)

   $ 12.0     $ 8.9     $ 7.7     $ 2.9  
                                

Ratio of expenses to average daily net assets
(before expense reduction)

     2.29 %     2.14 %     2.23 %     4.66 %(f)
                                

Ratio of expenses to average daily net assets
(net of expense reduction)

     2.15 %     2.14 %     2.14 %     2.15 %(f)
                                

Ratio of net investment income (loss) to average daily net assets
(before expense reduction)

     0.21 %     1.35 %     1.76 %     (0.11 )%(f)
                                

Ratio of net investment income to average daily net assets
(net of expense reduction)

     0.34 %     1.35 %     1.85 %     2.39 %(f)
                                

Portfolio turnover rate

     102 %     56 %     45 %     16 %(d)
                                

 

(a) Commencement of operations.
(b) Calculation based on average shares outstanding.
(c) Amount is less than $0.005.
(d) Not annualized.
(e) Does not reflect sales charges, which would reduce return.
(f) Annualized.

 

30


 

     Class C  
     For the Year Ended December 31,    

For the Period
May 3, 2004(a)
through
December 31, 2004

 

Per Share Operating Performance:

  

    2007    

   

    2006    

   

    2005    

   

Net asset value, beginning of period

   $ 16.55     $ 15.20     $ 13.75     $ 11.46  
                                

Income from investment operations:

        

Net investment income

     0.06 (b)     0.28       0.28 (b)     0.22 (b)

Net realized and unrealized gain on investments

     3.74       2.54       1.45       2.20  
                                

Total from investment operations

     3.80       2.82       1.73       2.42  
                                

Less dividends and distributions to shareholders from:

        

Net investment income

     (0.06 )     (0.28 )     (0.26 )     (0.10 )

Net realized gain on investments

     (2.90 )     (1.19 )     (0.00 )(c)     (0.02 )

Tax return of capital

           (0.00 )(c)     (0.02 )     (0.01 )
                                

Total dividends and distributions to shareholders

     (2.96 )     (1.47 )     (0.28 )     (0.13 )
                                

Redemption fees retained by the fund

     0.01       0.00 (c)     0.00 (c)      
                                

Net increase in net asset value

     0.85       1.35       1.45       2.29  
                                

Net asset value, end of period

   $ 17.40     $ 16.55     $ 15.20     $ 13.75  
                                
   

Total investment return(d)

     23.04 %     18.70 %     12.58 %     21.17 %(e)
                                
   

Ratios/Supplemental Data:

        

Net assets, end of period
(in millions)

   $ 36.6     $ 30.8     $ 48.6     $ 14.6  
                                

Ratio of expenses to average daily net assets
(before expense reduction)

     2.28 %     2.19 %     2.23 %     4.49 %(f)
                                

Ratio of expenses to average daily net assets
(net of expense reduction)

     2.15 %     2.15 %     2.14 %     2.15 %(f)
                                

Ratio of net investment income to average daily net assets
(before expense reduction)

     0.20 %     1.35 %     1.79 %     0.15 %(f)
                                

Ratio of net investment income to average daily net assets
(net of expense reduction)

     0.33 %     1.39 %     1.87 %     2.49 %(f)
                                

Portfolio turnover rate

     102 %     56 %     45 %     16 %(e)
                                

 

(a) Commencement of operations.
(b) Calculation based on average shares outstanding.
(c) Amount is less than $0.005.
(d) Does not reflect sales charges, which would reduce return.
(e) Not annualized.
(f) Annualized.

 

31


COHEN & STEERS GLOBAL INFRASTRUCTURE FUND, INC.

 

THE USA PATRIOT ACT

To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.

What this means for you: when you open an account, we will ask you for your name, address, date of birth and other information that will allow us to identify you. This information will be verified to ensure the identity of all individuals opening a mutual fund account.

SUBSCRIPTION AGREEMENT

 

1

  Account Type (Please print; indicate only one registration type)   
¨  

A.   Individual or Joint Account*

     
                                                                                       -       -                                                      
  Name   Social Security Number**    Date of Birth

 

                                                                                       -       -                                                      
  Name of Joint Owner, if any   Social Security Number**    Date of Birth
  Citizenship:  ¨  U.S. Citizen    ¨  Resident Alien       ¨  Nonresident Alien***:                                                                                       

 

  Country of Citizenship                

 

¨  

B.  Uniform Gifts/Transfers to Minors (UGMA/UTMA)

  
                                                                                       -       -                                                      
  Custodian’s name (only one permitted)   Social Security Number**    Date of Birth
                                                                                       -       -                                                      
  Minor’s name (only one permitted)   Social Security Number**    Date of Birth
  under the                                                                           Uniform Gifts/Transfers to Minors Act
                                  (state residence of minor)
  Citizenship of custodian:   ¨   U.S. Citizen   ¨   Resident Alien   ¨   Nonresident Alien***:                                                                        
                Country of Citizenship
  Citizenship of minor:   ¨   U.S. Citizen   ¨   Resident Alien   ¨   Nonresident Alien***:                                                                        
                Country of Citizenship

 

¨  

C.   Trust, Corporation or Other Entity

     

 

                                                                                                                                                                                                                     
  Name of Trust, Corporation or Other Entity    Tax Identification Number**    Date of Trust Agreement

Check the box that describes the entity establishing the account:

 

  ¨ U.S. Financial Institution governed by a federal regulator.

 

  ¨ Bank governed by a U.S. state bank regulator.

 

  ¨ Corporation. Attach a copy of the certified articles of incorporation or business license unless the corporation is publicly traded on the New York Stock Exchange, American Stock Exchange or Nasdaq Stock Market. If so, please provide ticker symbol:                  

 

  ¨ Retirement plan governed by ERISA.

 

  ¨ Trust. Attach a copy of the Trust Agreement.

 

  ¨ Partnership. Attach a copy of Partnership Agreement.

 

  ¨ U.S. Government Agency or Instrumentality.

 

  ¨ Foreign correspondent account, foreign broker dealer or foreign private banking account.

 

  ¨ Other.                                                       Attach copy of document that formed entity or by laws or similar document.

Call (800) 437-9912 to see if additional information is required.

 

 

  *   All joint registrations will be registered as “joint tenants with rights of survivorship” unless otherwise specified.
  **   If applied for, include a copy of application for social security or tax identification number.
  ***   Nonresident aliens must include a copy of a government-issued photo ID with this application.


2

  Authorized Persons      
  If you are establishing an account under 1C above as a (i) Corporation (non-publicly traded), (ii) Partnership, (iii) Trust or (iv) Other, information on each of the individuals authorized to effect transactions must be provided below:

 

                                                                                       -       -                                                      
  Authorized Individual/Trustee   Social Security Number*    Date of Birth

 

                                                                                       -       -                                                      
  Authorized Individual/Trustee   Social Security Number*    Date of Birth
  Citizenship:  ¨  U.S. Citizen    ¨  Resident Alien       ¨  Nonresident Alien**:                                                                                         
  Country of Citizenship                

(If there are more than two authorized persons, provide the information, in the same format, on a separate sheet for each such additional person.)

 

  * If applied for, include a copy of application for social security number.
  ** Nonresident aliens must include a copy of a government-issued photo ID with this application.

 

3

  Address      
 

(If mailing address is a post office box, a street address is also required. APO and FPO addresses will be accepted)

 

Registrant Street Address

 

                                                                                             

(                 )

  Street    Home Telephone Number
                                                                                             

(                 )

  City and State                                                             Zip Code    Business Telephone Number

 

  Mailing Address                                                                             City                                                     State                             Zip                     

Joint Registrant Street Address (required if different than Registrant Address above)

 

  Address                                                                                            City                                                     State                             Zip                     

 

4

  Investment Information      

Class of shares (please check one):    ¨  A     ¨  C

    (Class A purchased if no box checked)

                         Amount to invest ($1,000 minimum investment). Do not send cash. Investment will be paid for by

(please check one):

 

  ¨ Check or draft made payable to “Cohen & Steers Global Infrastructure Fund, Inc.”

 

  ¨ Wire through the Federal Reserve System.*                                                                                   

 

  * Call (800) 437-9912 to notify the Fund of investments by wire and to obtain an account number. See the Purchase of Fund Shares section of the prospectus for wire instructions.

 

5

  Automatic Investment Plan      

 

  A. The automatic investment plan makes possible regularly scheduled monthly purchases of fund shares. The Fund’s Transfer Agent can arrange for an amount of money selected by you ($100 minimum) to be deducted from your checking account and used to purchase shares of the fund.

Please debit $                            from my checking account beginning on                            *.

(Month)

Please debit my account on (check one):  ¨  1st of Month        ¨  15th of Month

 

  B. ¨  Please establish the Auto-Buy option, which allows you to make additional investments on dates you choose by having an amount of money selected by you ($100 minimum) deducted from your checking account.*

 

  * To initiate the automatic investment plan or the Auto-Buy option, section 10 of this subscription agreement must be completed.

Please continue application on reverse side.


6

  Reduced Sales Charge (Class A Only)      

Aggregating Accounts or Rights of Accumulation

 

  ¨ I apply for Aggregating Accounts reduced sales charges based on the following accounts:

 

  ¨ I apply for Rights of Accumulation reduced sales charges based on the following accounts:

 

 

Account Name

   

Social Security Number

 

1.

          -       -        
                         
 

2.

          -       -        
                         
 

3.

          -       -        

Letter of Intention

 

  ¨ I am already investing under an existing Letter of Intention.

 

  ¨ I agree to the Letter of Intention provisions in the Fund’s current prospectus. During a 12 month period, I plan to invest a dollar amount of at least:  ¨  $100,000        ¨  $250,000        ¨  $500,000        ¨  $1,000,000

Net Asset Value Purchase

 

  ¨ I certify that I qualify for an exemption from the sales charge by meeting the conditions set forth in the prospectus.

 

7

  Exchange Privileges      

Exchange privileges will be automatically granted unless you check the box below. Stockholders wishing to exchange into other Cohen & Steers Funds or the SSgA Money Market Fund should consult the Exchange Privilege section of the prospectus. (Note: If shares are being purchased through a dealer, please contact your dealer for availability of this service.)

 

  ¨ I decline the exchange privilege.

 

8

  Redemption Privileges      

Stockholders may select the following redemption privileges by checking the box(es) below. See How to Sell Fund Shares section of the prospectus for further details. Redemption privileges will be automatically declined for boxes not checked.

 

  ¨ I authorize the Transfer Agent to redeem shares in my account(s) by telephone, in accordance with the procedures and conditions set forth in the fund’s current prospectus.

 

  ¨ I wish to have redemption proceeds paid by wire (please complete Section 10).

 

9

  Distribution Options      

Dividends and capital gains may be reinvested or paid by check. If no options are selected below, both dividends and capital gains will be reinvested in additional Fund shares.

 

Dividends   ¨ Reinvest.   ¨ Pay in cash.   
Capital Gains   ¨ Reinvest.   ¨ Pay in cash.   

 

  ¨   I wish to have my distributions paid by wire (please complete Section 10).

 

 

10

 

Bank of Record (for Wire Instructions and/or Automatic Investment Plan)

  

Please attach a voided check from your bank account.

 

Bank Name     Bank ABA Number
   
Street or P.O. Box     Bank Account Number
   
City and State Zip Code                 Account Name


11   Signature and Certifications      

 

(a) By signing this agreement, I represent and warrant that:

 

  (1) I have the full right, power, capacity and authority to invest in the Fund;

 

  (2) I am of legal age in my state of residence or am an emancipated minor;

 

  (3) All of the information on this agreement is true and correct; and

 

  (4) I will notify the Fund immediately if there is any change in this information.

 

(b) I have read the current prospectus of the Fund and this agreement and agree to all their terms. I also agree that any shares purchased now or later are and will be subject to the terms of the Fund’s prospectus as in effect from time to time. Further, I agree that the Fund, its administrators and service providers and any of their directors, trustees, employees and agents will not be liable for any claims, losses or expenses (including legal fees) for acting on any instructions believed to be genuine, provided that reasonable security procedures have been followed. If an account has multiple owners, the Fund may rely on the instructions of any one account owner unless all owners specifically instruct the Fund otherwise.

 

(c) If I am a U.S. citizen, resident alien, or a representative of a U.S. entity, I certify, under penalty of perjury, that:

 

  (1) The taxpayer identification number and tax status shown on this form are correct.

 

  (2) I am not subject to backup withholding because:

 

   

I am exempt from backup withholding, OR

 

   

I have not been notified by the Internal Revenue Service (“IRS”) that I am subject to backup withholding as a result of a failure to report all interest or dividends, OR

 

   

The IRS has notified me that I am no longer subject to backup withholding.

NOTE: If you have been notified by the IRS that you are currently subject to backup withholding because of under-reporting interest or dividends on your tax return, you must cross out this Item 2.

 

  (3) I am a U.S. person (including resident alien).

 

(d) If I am a nonresident alien, I understand that I am required to complete and attach the appropriate Form W-8 to certify my foreign status.

 

  (1) Indicate country of residence for tax purposes                                              
     Under penalty of perjury, I certify that I am not a U.S. citizen or resident alien and I am an exempt foreign person as defined by the IRS.

 

(e) Additional Certification:

 

  (1) Neither I (we), nor any person having a direct or indirect beneficial interest in the shares to be acquired, appears on any U.S. government published list of persons who are known or suspected to engage in money laundering activities, such as the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control of the United States Department of the Treasury. I (we) do not know or have any reason to suspect that (i) the monies used to fund my (our) investment have been or will be derived from or related to any illegal activities and (ii) the proceeds from my (our) investment will be used to finance any illegal activities.

 

  (2) I agree to provide such information and execute and deliver such documents as the Fund may reasonably request from time to time to verify the accuracy of the information provided in connection with the opening of an account or to comply with any law, rule or regulation to which the Fund may be subject, including compliance with anti-money laundering laws.

 

   The IRS does not require your consent to any provision of this document other than the certifications required to avoid backup withholding.

 

x       X    
             

Signature* (Owner, Trustee, Etc.)

  Date   Signature* (Joint Owner, Co-Trustee)   Date

 

              

Name and Title

     

 

 

*   If shares are to be registered in (1) joint names, both persons should sign, (2) a custodian’s name, the custodian should sign, (3) a trust, the trustee(s) should sign, or (4) a corporation or other entity, an officer or other authorized person should sign and print name and title above. Persons signing as representatives or fiduciaries of corporations, partnerships, trusts or other organizations are required to furnish corporate resolutions or similar documents providing evidence that they are authorized to effect securities transactions on behalf of the Investor (alternatively, the secretary or another designated officer of the entity may certify the authority of the persons signing on the space provided above). In addition, signatures of representatives or fiduciaries of corporations and other entities must be accompanied by a signature guarantee by a commercial bank that is a member of the Federal Deposit Insurance Corporation, a trust company or a member of a national securities exchange.

Mail to: Boston Financial Data Services, P.O. Box 8123, Boston, MA 02266-8123


For Authorized Dealer Use Only   
  We hereby authorize the Transfer Agent to act as our agent in connection with the transactions authorized by the subscription agreement and agree to notify the Transfer Agent of any purchases made under a Letter of Intention, Rights of Accumulation or Aggregating Accounts. If the subscription agreement includes a telephone redemption privilege, we guarantee the signature(s) above.
                                                                                                                                                                                                                       
  Dealer’s Name    Dealer Number
                                                                                                                                                                                                                       
  Main Office Address    Branch Number
                                                                                                                                                                                                                       
  Representative’s Name    Rep. Number
     (          )                                                                   
                                                                                                                                                                                                  
  Branch Address    Telephone Number
                                                                                                                                                                                                                       
  Authorized Signature of Dealer    Date


LOGO

TO OBTAIN ADDITIONAL INFORMATION ABOUT THE FUND

If you would like additional information about Cohen & Steers Global Infrastructure Fund, Inc., the following documents are available to you without any charge either upon request or at http://www.cohenandsteers.com:

 

 

Annual/Semi-Annual Reports—Additional information about the Fund’s investments is available in the Fund’s annual and semi-annual reports to shareholders. In these reports, you will find a discussion of the market conditions and investment strategies that significantly affected the Fund’s performance during its most recent fiscal year.

 

 

Statement of Additional Information—Additional information about the Fund’s investments, structure and operations can be found in the SAI. The information presented in the SAI is incorporated by reference into this Prospectus and is legally considered to be part of the Prospectus.

To request a free copy of any of the materials described above, as well as other information, or to make any other inquiries, please contact us:

 

By telephone    (800) 437-9912
By mail    Cohen & Steers Global Infrastructure Fund, Inc.
   c/o Boston Financial Data Services
   P.O. Box 8123
   Boston, Massachusetts 02266-8123
By e-mail    marketing@cohenandsteers.com
On the Internet    http://www.cohenandsteers.com

This information may also be available from your broker or financial advisor. In addition, information about the Fund (including the Fund’s SAI) may be obtained from the SEC:

 

 

By going to the SEC’s Public Reference Room in Washington, D.C., where you can review and copy the information. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-202-551-5850.

 

 

By accessing the SEC’s Internet site at http://www.sec.gov where you can view, download and print the information.

 

 

By electronic request at the following e-mail address: publicinfo@sec.gov, or by writing to the Public Reference Section of the SEC, Washington, D.C. 20549-0102. Upon payment of a duplicating fee, copies of the information will be sent to you.

280 PARK AVENUE, NEW YORK, NEW YORK 10017

SEC File No. 811-21488


LOGO

280 PARK AVENUE

NEW YORK, NEW YORK 10017

 

 

CLASS I SHARES

 

 

PROSPECTUS

Advisor

Cohen & Steers Capital Management, Inc.

280 Park Avenue

New York, New York 10017

Telephone: (212) 832-3232

Transfer Agent

Boston Financial Data Services

P.O. Box 8123

Boston, Massachusetts 02266-8123

Telephone: (800) 437-9912

AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF THE FUND’S SHARES OR DETERMINED WHETHER THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANYONE WHO INDICATES OTHERWISE IS COMMITTING A CRIME.

APRIL 1, 2008

 

 


 

TABLE OF CONTENTS

 

     Page

RISK/RETURN SUMMARY

   1

Investment Objective and Principal Investment Strategies

   1

Who Should Invest

   1

Principal Risks

   2

Historical Fund Performance

   4

FEES AND EXPENSES OF THE FUND

   5

INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

   6

Objective

   6

Principal Investment Strategies

   6

Additional Investment Information

   8

Principal Risks of Investing in the Fund

   9

MANAGEMENT OF THE FUND

   11

The Advisor and Subadvisors

   11

Portfolio Managers

   12

HOW TO PURCHASE AND SELL FUND SHARES

   13

Pricing of Fund Shares

   13

Types of Shareholders Qualified to Purchase Class I Shares

   14

Purchase Minimums

   14

Additional Classes Offered

   15

Form of Payment

   15

Purchases of Fund Shares

   15

Purchases Through Dealers and Intermediaries

   17

Purchases Through the Distributor

   17

Automatic Investment Plan

   17

Exchange Privilege

   17

How to Sell Fund Shares

   18

Frequent Purchases and Redemptions of Fund Shares

   20

ADDITIONAL INFORMATION

   21

Other Compensation

   21

Dividends and Distributions

   21

Tax Considerations

   21

Privacy Policy

   22

FINANCIAL HIGHLIGHTS

   24


COHEN & STEERS GLOBAL INFRASTRUCTURE FUND, INC.

 

 

RISK/RETURN SUMMARY

 

 

INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES

The investment objective of Cohen & Steers Global Infrastructure Fund, Inc. (the Fund) is total return. In pursuing total return, the Fund seeks both capital appreciation and current income. The Fund may change its investment objective without shareholder approval, although it has no current intention to do so. There is no assurance that the Fund will achieve its investment objective.

Normally, the Fund invests at least 80% of its net assets in U.S. and non-U.S. common stocks and other equity securities issued by infrastructure companies, which consist of utilities, pipelines, toll roads, airports, railroads, ports, telecommunications companies and other infrastructure companies. Under normal market conditions, the Fund invests at least 40%, unless market conditions are not deemed favorable by Cohen & Steers Capital Management, Inc., the Fund’s advisor (the Advisor), in which case the Fund will invest at least 30%, of its net assets in companies organized or located outside the U.S. or doing a substantial amount of business outside of the U.S. The Fund will invest in infrastructure companies primarily in developed countries, but may invest in securities of infrastructure companies domiciled in emerging market countries. Accordingly, the Fund will hold securities and instruments denominated in non-U.S. currencies, or sponsored and unsponsored depositary receipts for such securities.

Infrastructure companies derive at least 50% of their revenues from, or have at least 50% of their assets committed to, the generation, transmission, sale or distribution of electric energy; distribution, purification and treatment of water; production, transmission or distribution of natural resources used to produce energy; provision of communications services, including cable television, satellite, microwave, radio, telephone and other communications media; management, ownership and/or operation of infrastructure assets or construction, development or financing of infrastructure assets, such as pipelines, toll roads, airports, railroads or ports. Infrastructure companies also include energy-related companies organized as master limited partnerships (MLPs) and their affiliates, and the Fund may invest up to 25% of its net assets in these energy-related MLPs and their affiliates.

The Fund may invest up to 20% of its net assets in preferred securities and other fixed-income securities. The Fund may also invest up to 20% of its net assets in securities that at the time of investment are rated below investment grade by a nationally recognized statistical rating agency or that are unrated but judged to be below investment grade by the Advisor.

The Fund has adopted a fundamental policy (which cannot be changed without shareholder approval) to invest at least 25% of its net assets in securities of companies engaged in the utilities industry.

 

 

WHO SHOULD INVEST

The Fund may be suitable for you if you are seeking:

 

·  

to add infrastructure companies to your portfolio

 

·  

a fund that may perform differently than a general stock or bond fund to add to your portfolio

 

·  

a fund offering the potential for both current income and long-term capital appreciation

 

·  

a fund offering the potential for tax advantaged dividend income

 

1


The Fund is designed for long-term investors. You should not invest in the Fund unless your investment horizon is at least six months. The Fund will take reasonable steps to identify and reject orders from market timers. In addition, the Fund will charge a redemption fee on certain redemptions and exchanges. See How to Purchase and Sell Fund Shares—Frequent Purchases and Redemptions of Fund Shares and—How to Sell Fund Shares.

 

 

PRINCIPAL RISKS

Investment Risk. An investment in the Fund is subject to investment risk, including the possible loss of the entire principal amount that you invest.

Market Risk. Your investment in Fund shares represents an indirect investment in the securities owned by the Fund. The value of these securities, like other investments, may move up or down, sometimes rapidly and unpredictably.

Your Fund shares at any point in time may be worth less than what you invested, even after taking into account the reinvestment of Fund dividends and distributions.

Common Stock Risk. While common stock has historically generated higher average returns than fixed-income securities, common stock has also experienced significantly more volatility in those returns. An adverse event, such as an unfavorable earnings report, may depress the value of common stock held by the Fund. Also, the price of common stock is sensitive to general movements in the stock market. A drop in the stock market may depress the price of common stock held by the Fund.

General Risks of Investing in Infrastructure Companies. Securities and instruments of infrastructure companies are more susceptible to adverse economic or regulatory occurrences affecting their industries. Infrastructure companies may be subject to a variety of factors that may adversely affect their business or operations, including high interest costs in connection with capital construction programs, high leverage, costs associated with environmental and other regulations, the effects of economic slowdown, surplus capacity, increased competition from other providers of services, uncertainties concerning the availability of fuel at reasonable prices, the effects of energy conservation policies and other factors. Infrastructure companies may also be affected by or subject to:

 

·  

regulation by various government authorities;

 

·  

government regulation of rates charged to customers;

 

·  

service interruption due to environmental, operational or other mishaps;

 

·  

the imposition of special tariffs and changes in tax laws, regulatory policies and accounting standards; and

 

·  

general changes in market sentiment towards infrastructure and utilities assets.

Preferred Securities Risks. There are special risks associated with investing in preferred securities, including deferral and omission of distributions, subordination to bonds and other debt securities in a company’s capital structure, limited liquidity, limited voting rights and special redemption rights.

Interest Rate Risks. Interest rate risk is the risk that fixed-income securities such as preferred and debt securities, and to a lesser extent dividend-paying common stocks, will decline in value because of changes in market interest rates. When market interest rates rise, the market value of such securities generally will fall. The Fund’s investment in such securities means that the net asset value and market price of the Fund’s shares may tend to decline if market interest rates rise.

 

2


Foreign (Non-U.S.) Securities Risks. Risks of investing in foreign securities include currency risks, future political and economic developments and possible imposition of foreign withholding taxes on income payable on the securities. In addition, there may be less publicly available information about a foreign issuer than about a domestic issuer, and foreign issuers may not be subject to the same accounting, auditing and financial recordkeeping standards and requirements as domestic issuers.

Emerging Markets Risk. Emerging market countries generally have less developed markets and economies and, in some countries, less mature governments and governmental institutions. A small number of companies representing a limited number of industries may account for a significant percentage of an emerging country’s overall market and trading volume. Emerging market countries may have political and social uncertainties, and their economies may be over-dependent on exports, especially with respect to primary commodities, making these economies vulnerable to changes in commodity prices. Emerging market countries may have overburdened infrastructure and obsolete or unseasoned financial systems, environmental problems, less developed legal systems and less reliable custodial services and settlement practices.

Foreign Currency Risk. The Fund’s net asset value could decline as a result of changes in the exchange rates between foreign currencies and the U.S. dollar. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest to investors located outside the country, due to blockage of foreign currency exchanges or otherwise.

MLP Risk. An investment in MLP units involves some risks that differ from an investment in the common stock of a corporation. Holders of MLP units have limited control on matters affecting the partnership. Investing in MLPs involves certain risks related to investing in the underlying assets of the MLPs and risks associated with pooled investment vehicles. MLPs holding credit-related investments are subject to interest rate risk and the risk of default on payment obligations by debt issuers. MLPs that concentrate in a particular industry or a particular geographic region are subject to risks associated with such industry or region. The benefit derived from the Fund’s investment in MLPs is largely dependent on the MLPs being treated as partnerships for Federal income tax purposes.

Risks of Investment in Lower-Rated Securities. Lower-rated securities, or equivalent unrated securities, generally involve greater volatility of price and risk of loss of income and principal, and may be more susceptible to real or perceived adverse economic and competitive industry conditions than higher grade securities. It is reasonable to expect that any adverse economic conditions could disrupt the market for lower-rated securities, have an adverse impact on the value of those securities and adversely affect the ability of the issuers of those securities to repay principal and for interest on those securities.

Non-Diversification. As a “non-diversified” investment company, the Fund may invest in fewer individual companies than a diversified investment company. Because a non-diversified portfolio is more likely to experience large market price fluctuations, the Fund may be subject to a greater risk of loss than a fund that has a diversified portfolio.

Your investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

 

3


 

HISTORICAL FUND PERFORMANCE

You should review the following information regarding the past performance of the Class I Shares of the Fund. It shows how the Fund’s investment return can change from year to year and how the Fund’s returns can vary from the performance of selected broad market indexes over various time periods. This information is intended to give you some indication of the risk associated with an investment in the Fund. Past performance (both before and after taxes) is not, however, an indication as to how the Fund may perform in the future.

Prior to April 1, 2008, the Fund’s name was “Cohen & Steers Utility Fund, Inc.,” and normally the Fund invested at least 80% of its net assets in common stocks and other equity securities issued by companies engaged in the utilities industry (utility companies); investments in foreign issuers were limited to 20% of its total assets.

This chart shows the Fund’s total return for each full calendar year since Class I Shares of the Fund commenced operations, but does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

LOGO

Highest quarterly return during this period:    9.40% (quarter ended March 31, 2007)

Lowest quarterly return during this period:    –5.19% (quarter ended December 31, 2005)

 

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This table shows the average annual total returns of the Class I shares of the Fund for the past year and the period since Class I Shares of the Fund commenced operations, and compares these returns with the performance of three indexes. Index performance reflects no deduction for fees, expenses or taxes.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.

Average Annual Total Returns

(for periods ended December 31, 2007)

 

    

1 Year

   

Since
Inception**

 

Return Before Taxes

   24.36 %   21.88 %

Return After Taxes on Distributions

   21.07 %   20.32 %

Return After Taxes on Distributions and Sale of Fund Shares

   19.21 %   18.93 %

Macquarie Global Infrastructure Index*

   23.00 %   28.04 %

S&P 1500 Utilities Index*

   16.46 %   20.95 %

S&P 500® Index*

   5.49 %   10.00 %

 

  * The Fund’s Board of Directors, in conjunction with the changes to the investment strategy, approved a change to the Fund’s primary benchmark to the Macquarie Global Infrastructure Index from the S&P 1500 Utilities Index. The Macquarie Global Infrastructure Index, calculated and managed by FTSE, is designed to reflect the stock performance of infrastructure companies, principally those engaged in the management, ownership and or operation of infrastructure and utility assets and consists of 244 infrastructure/ utilities stocks in the FTSE Global All-Cap Index, and has a combined market capitalization of approximately $1,926,733 million as of December 31, 2007. The S&P 1500 Utilities Index is an unmanaged market capitalization weighted index of 75 companies whose primary business involves generation, transmission and/or distribution of electricity and/or natural gas. The Standard & Poor’s 500 Index is an unmanaged index of common stocks that is frequently used as a general measure of stock market performance. Performance figures include reinvestment of income dividends and, for the Fund, capital gains distributions. You should note that the Fund is a professionally managed mutual fund while the indexes are unmanaged, do not incur expenses and are not available for investment.

 

** The inception date for Class I shares was May 3, 2004.

 

 

FEES AND EXPENSES OF THE FUND

 

 

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

 

Shareholder Fees (fees paid directly from your investment):

   None

Redemption Fee (as a percentage of redemption proceeds; also imposed on exchanges)

       
2.00% during the first 60 days;
0% thereafter

Annual Fund Operating Expenses (expenses that are deducted from Fund assets):

  

Management Fee

   0.75 %

Other Expenses

   0.56 %
      

Total Annual Fund Operating Expenses

   1.31 %

Fee Waiver/Expense Reimbursement

   (0.16 )%
      

Net Annual Fund Operating Expenses(1)

   1.15 %
      

 

(1) Through December 31, 2008, the Advisor has contractually agreed to waive its fee and/or reimburse the Fund for expenses incurred to the extent necessary to maintain the Fund’s total operating expenses at 1.15%.

 

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EXAMPLE

This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the 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 the 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

$117

     $ 399      $ 703      $ 1,565

 

 

INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

 

 

OBJECTIVE

The investment objective of the Fund is total return. In pursuing total return, the Fund seeks both capital appreciation and current income. There can be no assurance that the Fund will achieve its investment objective. The Fund may change its investment objective without shareholder approval, although it has no current intention to do so.

 

 

PRINCIPAL INVESTMENT STRATEGIES

In making investment decisions with respect to common stocks and other equity securities issued by infrastructure companies, the Advisor relies on a fundamental analysis of each company. Securities are evaluated for their potential to provide an attractive total return through a combination of current income and capital appreciation. The Advisor reviews each company’s potential for success in light of general economic and industry trends, as well as the company’s quality of management, financial condition, business plan, industry and sector market position, dividend payout ratio and corporate governance. The Advisor utilizes a value-oriented approach, and evaluates each company’s valuation on the basis of relative price/cash flow and price/earnings multiples, earnings growth rate, dividend yield, and price/book value, among other metrics.

In making investment decisions with respect to preferred securities and other fixed-income securities, the Advisor seeks to select what it believes are undervalued securities on the basis of risk and return profiles. In making these determinations, the Advisor evaluates the fundamental characteristics of an issuer, including an issuer’s creditworthiness, and also takes into account prevailing market factors. In analyzing credit quality, the Advisor considers not only fundamental analysis, but also an issuer’s corporate and capital structure and the placement of the preferred or fixed-income securities within that structure. The Advisor also takes into account other factors, such as call and other structural features, event risk, the likely directions of ratings and relative value versus other income security classes, among others.

 

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Infrastructure Companies

Under normal circumstances, the Fund will invest at least 80% of its net assets in the equity securities of infrastructure companies. Shareholders will be provided with at least 60 days prior written notice of any change to this investment policy. These equity securities can consist of:

 

·  

common stocks

 

·  

rights or warrants to purchase common stocks

 

·  

securities convertible into common stocks where the conversion feature represents, in the Advisor’s view, a significant element of the securities’ value

 

·  

preferred stocks

 

·  

equity units

For purposes of the Fund’s investment policies, an infrastructure company is one that derives at least 50% of its revenues from, or has at least 50% of its assets committed to, the generation, transmission, sale or distribution of electric energy; distribution, purification and treatment of water; production, transmission or distribution of natural resources used to produce energy; provision of communications services, including cable television, satellite, microwave, radio, telephone and other communications media; management, ownership and/or operation of infrastructure assets; or construction, development or financing of infrastructure assets, such as pipelines, toll roads, airports, railroads or ports. Infrastructure companies also include energy-related companies organized as MLPs and their affiliates.

Preferred and Other Fixed Income Securities

The Fund may invest up to 20% of its net assets in preferred securities and other fixed-income securities, including preferred stock, hybrid-preferred securities, corporate debt obligations and debt securities issued or guaranteed by the U.S. government or its agencies or instrumentalities.

Foreign (Non-U.S.) Securities

The Fund may invest without limit in securities of foreign issuers, or sponsored and unsponsored depositary receipts for such securities. Depositary receipts may take the form of American Depositary Receipts (ADRs), Global Depositary Receipts (GDRs) and European Depositary Receipts (EDRs). These securities may not necessarily be denominated in the same currency as the securities into which they may be converted. ADRs are receipts typically issued by a United States bank or trust company which evidence ownership of underlying securities issued by a foreign corporation. GDRs and EDRs are receipts issued outside the United States, typically by non-United States banks and trust companies, that evidence ownership of either foreign or domestic securities. Generally, ADRs in registered form are dollar denominated securities designed for use in the U.S. securities markets. GDRs, in bearer form, are designated for use outside the United States. EDRs, in bearer form, are designed for use in the European securities markets. Dividend income the Fund receives from foreign securities may not be eligible for the special tax treatment applicable to qualified dividend income.

Master Limited Partnerships

The Fund may invest up to 25% of its net assets in energy-related companies organized as MLPs and their affiliates. An MLP is a publicly traded company organized as a limited partnership or limited liability company and treated as a partnership for Federal income tax purposes. MLPs may derive income and gains from the exploration, development, mining or production, processing, refining, transportation (including pipelines transporting gas, oil, or products thereof), or the marketing of any

 

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mineral or natural resources. MLPs generally have two classes of owners, the general partner and limited partners. The general partner of an MLP is typically owned by one or more of the following: a major energy company, an investment fund, or the direct management of the MLP. The general partner may be structured as a private or publicly traded corporation or other entity. The general partner typically controls the operations and management of the MLP through an up to 2% equity interest in the MLP plus, in many cases, ownership of common units and subordinated units. Limited partners own the remainder of the partnership, through ownership of common units, and have a limited role in the partnership’s operations and management.

Lower Rated Securities

The Fund may invest up to 20% of its net assets in securities that at the time of investment are rated below investment grade (below Baa or BBB) by Moody’s Investors Service, Inc. (Moody’s), Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc. (S&P), Fitch Ratings (Fitch) or an equivalent rating by a nationally recognized statistical rating agency or that are unrated but judged to be below investment grade by the Advisor. These below investment grade quality securities are sometimes referred to as junk bonds and are regarded as having predominantly speculative characteristics with respect to the payment of interest and repayment of principal.

 

 

ADDITIONAL INVESTMENT INFORMATION

In addition to the principal investment strategies described above, the Fund has other investment practices that are described here and in the statement of additional information (SAI).

Illiquid Securities

The Fund will not invest more than 15% of its net assets in illiquid securities. A security is illiquid if, for legal or market reasons, it cannot be promptly sold (i.e., within seven days) at a price which approximates its fair value.

Defensive Position

When the Advisor believes that market or general economic conditions justify a temporary defensive position, the Fund may deviate from its investment objective and invest all or any portion of its assets in investment grade fixed income securities, without regard to whether the issuer is an infrastructure company. When and to the extent the Fund assumes a temporary defensive position, it may not pursue or achieve its investment objective.

Portfolio Turnover

The Fund may engage in active and frequent portfolio trading when considered appropriate, but short-term trading will not be used as the primary means of achieving its investment objective. However, there are no limits on the rate of portfolio turnover, and investments may be sold without regard to length of time held when, in the opinion of the Advisor, investment considerations warrant such action. A higher turnover rate results in correspondingly greater brokerage commissions and other transactional expenses which are borne by the Fund. High portfolio turnover may result in the realization of net short-term capital gains by the Fund which, when distributed to shareholders, will be taxable as ordinary income. See Additional Information—Tax Considerations.

Portfolio Holdings

A description of the Fund’s policies and procedures with respect to the disclosure of the Fund’s portfolio securities is available in the SAI. The Fund’s annual and semi-annual reports, which are sent

 

8


to shareholders and filed with the Securities and Exchange Commission (SEC), contain information about the Fund’s portfolio holdings, including a complete schedule of holdings. The Fund also files its complete schedule of portfolio holdings with the SEC on Form N-Q as of the end of its first and third fiscal quarters. The Fund’s full portfolio holdings are published semi-annually in reports sent to stockholders and such reports are made available on http://www.cohenandsteers.com in the “Our Funds” section, generally within 60 days after the end of each semi-annual period. The Fund also posts top 10 holdings quarterly on the website, within 30 days after the end of each quarter. The holdings information remains available until the next quarter’s holdings are posted on the website.

 

 

PRINCIPAL RISKS OF INVESTING IN THE FUND

Because prices of equity securities fluctuate from day to day, the value of the Fund’s portfolio and the price per share will vary based upon general market conditions and the value of the securities held in the Fund’s portfolio.

General Risks of Investing in Infrastructure Companies

Securities and instruments of infrastructure companies are more susceptible to adverse economic or regulatory occurrences affecting their industries. Infrastructure companies may be subject to a variety of factors that may adversely affect their business or operations, including high interest costs in connection with capital construction programs, high leverage, costs associated with environmental and other regulations, the effects of economic slowdown, surplus capacity, increased competition from other providers of services, uncertainties concerning the availability of fuel at reasonable prices, the effects of energy conservation policies and other factors. Infrastructure companies may also be affected by or subject to:

 

·  

high interest costs in connection with capital construction and improvement programs;

 

·  

difficulty in raising capital in adequate amounts on reasonable terms in periods of high inflation and unsettled capital markets;

 

·  

inexperience with and potential losses resulting from a developing deregulatory environment;

 

·  

costs associated with compliance with and changes in environmental and other regulations;

 

·  

regulation by various government authorities;

 

·  

government regulation of rates charged to customers;

 

·  

service interruption due to environmental, operational or other mishaps;

 

·  

the imposition of special tariffs and changes in tax laws, regulatory policies and accounting standards;

 

·  

technological innovations that may render existing plants, equipment or products obsolete; and

 

·  

general changes in market sentiment towards infrastructure and utilities assets.

Risks of Investment in Preferred Securities

There are special risks associated with investing in preferred securities, including:

Deferral and Omission. Preferred securities may include provisions that permit the issuer, at its discretion, to defer or omit distributions for a stated period without any adverse consequences to the issuer.

 

9


Subordination. Preferred securities are subordinated to bonds and other debt instruments in a company’s capital structure in terms of priority to corporate income and liquidation payments, and therefore will be subject to greater credit risk than more senior debt instruments.

Liquidity. Preferred securities may be substantially less liquid than many other securities, such as common stocks or U.S. government securities.

Limited Voting Rights. Generally, preferred securities offer no voting rights with respect to the issuing company unless preferred dividends have been in arrears for a specified number of periods, at which time the preferred security holders may elect a number of directors to the issuer’s board.

Special Redemption Rights. In certain varying circumstances, an issuer of preferred securities may redeem the securities prior to a specified date. As with call provisions, a redemption by the issuer may negatively impact the return of the security held by the Fund.

Risks of Investment in Foreign (Non-U.S.) Securities

The Fund may be subject to additional investment risks for foreign securities that are different in some respects from those incurred by investments in securities of domestic issuers. Such risks include currency risks, future political and economic developments, the possible imposition of foreign withholding taxes on income payable on the securities, the possible establishment of exchange controls, the possible seizure or nationalization of foreign deposits, or the adoption of other foreign governmental restrictions which might adversely affect the payments on such securities. In addition, there may be less publicly available information about a foreign issuer than about a domestic issuer, and foreign issuers may not be subject to the same accounting, auditing and financial recordkeeping standards and requirements as domestic issuers. Dividend income the Fund receives from foreign securities may not be eligible for the special tax treatment applicable to qualified dividend income.

In addition, brokerage commissions, custodial services and other costs relating to investment in foreign securities markets generally are more expensive than in the U.S. and foreign securities markets may have substantially less volume than U.S. securities markets, making many foreign issuers less liquid and more volatile than securities of comparable domestic issuers.

Emerging Markets Risk

The Fund is not limited in the extent to which it may invest in securities of companies domiciled in so-called “emerging markets” (or lesser developed countries). Investing in securities of companies in emerging markets may entail special risks relating to potential political and economic instability and the risks of expropriation, nationalization, confiscation or the imposition of restrictions on foreign investment, the lack of hedging instruments, and on repatriation of capital invested. Emerging securities markets are substantially smaller, less developed, less liquid and more volatile than the major securities markets. The limited size of emerging securities markets and limited trading value compared to the volume of trading in U.S. securities could cause prices to be erratic for reasons apart from factors that affect the quality of the securities. For example, limited market size may cause prices to be unduly influenced by traders who control large positions. Adverse publicity and investors’ perceptions, whether or not based on fundamental analysis, may decrease the value and liquidity of portfolio securities, especially in these markets. Many emerging market countries have experienced substantial, and in some periods extremely high, rates of inflation for many years. Inflation and rapid fluctuations in inflation rates and corresponding currency devaluations have had and may continue to have negative effects on the economies and securities markets of certain emerging market countries.

 

10


Foreign Currency Risk and Currency Hedging Risk

Although the Fund will report its net asset value and pay dividends in U.S. dollars, foreign securities often are purchased with and make interest payments in foreign currencies. Therefore, when the Fund invests in foreign securities, it will be subject to foreign currency risk, which means that the Fund’s net asset value could decline as a result of changes in the exchange rates between foreign currencies and the U.S. dollar. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest to investors located outside the country, due to blockage of foreign currency exchanges or otherwise. The Fund may engage in various investments that are designed to hedge the Fund’s foreign currency risks. While these transactions will be entered into to seek to manage these risks, these investments may not prove to be successful or may have the effect of limiting the gains from favorable market movements.

MLP Risk

An investment in MLP units involves some risks that differ from an investment in the common stock of a corporation. Holders of MLP units have limited control on matters affecting the partnership. Investing in MLPs involves certain risks related to investing in the underlying assets of the MLPs and risks associated with pooled investment vehicles. MLPs holding credit-related investments are subject to interest rate risk and the risk of default on payment obligations by debt issuers. MLPs that concentrate in a particular industry or a particular geographic region are subject to risks associated with such industry or region. The benefit derived from the Fund’s investment in MLPs is largely dependent on the MLPs being treated as partnerships for Federal income tax purposes.

Credit Risk and Lower-Rated Securities Risk

Credit risk is the risk that a security in the Fund’s portfolio will decline in price or the issuer will fail to make dividend, interest or principal payments when due because the issuer of the security experiences a decline in its financial status. Preferred securities normally are subordinated to bonds and other debt instruments in a company’s capital structure, in terms of priority to corporate income and claim to corporate assets, and therefore will be subject to greater credit risk than debt instruments. The Fund may invest in securities that are rated below investment grade. A security will be considered to be investment grade if, at the time of the investment, such security has a rating of “BBB” or higher by S&P, “Baa” or higher by Moody’s or an equivalent rating by a nationally recognized statistical rating agency or, if unrated, such security is determined by the Advisor to be of comparable quality. Lower-rated securities, or equivalent unrated securities, which are commonly known as “junk bonds,” generally involve greater volatility of price and risk of loss of income and principal, and may be more susceptible to real or perceived adverse economic and competitive industry conditions than higher grade securities. Such securities may face major ongoing uncertainties or exposure to adverse business, financial or economic conditions which could lead to inadequate capacity to meet timely interest and principal payments. It is reasonable to expect that any adverse economic conditions could disrupt the market for lower-rated securities, have an adverse impact on the value of those securities and adversely affect the ability of the issuers of those securities to repay principal and interest on those securities.

 

 

MANAGEMENT OF THE FUND

 

 

 

THE ADVISOR AND SUBADVISORS

Cohen & Steers Capital Management, Inc., with offices located at 280 Park Avenue, New York, New York 10017, has been retained as the Fund’s investment advisor. The Advisor, a registered

 

11


investment advisor, was formed in 1986 and its clients include pension plans, endowment funds and investment companies, including each of the open-end and closed-end Cohen & Steers funds. As of December 31, 2007, the Advisor managed approximately $29.8 billion in assets. The Advisor is a wholly owned subsidiary of Cohen & Steers, Inc., a publicly traded company whose common stock is listed on the New York Stock Exchange under the symbol “CNS.”

The Advisor will be responsible for the overall management of the Fund’s portfolio and for the supervision and ongoing monitoring of the Fund’s subadvisors (the Subadvisors). Cohen & Steers Asia Limited (CNS Asia), with offices located at 12/F Citibank Tower, Citibank Plaza, No. 3 Garden Road, Central Hong Kong, provides investment research and advisory services with respect to Asia Pacific real estate securities and provides trade order execution services for the Fund. CNS Asia was formed in 2005. Cohen & Steers Europe S.A. (CNS Europe), with offices located at 166 Chausee de la Hulpe, Brussels, Belgium, provides investment advisory and research services to the Advisor in connection with managing the Fund’s investments in Europe. CNS Europe was formed in February 2000. Cohen & Steers UK Limited (CNS UK), with offices located at 21 Sackville Street, 4th Floor, London, W1S 3DN, U.K., provides investment advisory and research services to the Advisor and CNS Europe in connection with managing the Fund’s investments in Europe. CNS UK was formed in 2006. Each of the Subadvisors is a registered investment advisor and is a direct or indirect wholly-owned subsidiary of CNS. References in this prospectus to activities and responsibilities of the Advisor may be performed by one or more of the Subadvisors.

Under its Advisory Agreement with the Fund, the Advisor furnishes a continuous investment program for the Fund’s portfolio, makes the day-to-day investment decisions for the Fund and generally manages the Fund’s investments in accordance with the stated policies of the Fund, subject to the general supervision of the Board of Directors of the Fund. The Advisor performs certain administrative services for the Fund and provides persons satisfactory to the Board of Directors of the Fund to serve as officers of the Fund. Such officers, as well as certain other employees and Directors of the Fund, may also be directors, officers, or employees of the Advisor. The Advisor also selects brokers and dealers to execute the Fund’s portfolio transactions.

For its services under the Advisory Agreement, and for paying the ordinary operating expenses of the Fund, the Fund pays the Advisor a monthly fee at the annual rate of 0.75% of the average daily net asset value of the Fund up to and including $1.5 billion, and 0.65% of the average daily net asset value of the Fund above $1.5 billion. This fee is allocated among the separate classes based on the classes’ proportionate shares of such average daily net asset value.

Taking into account the investment advisory fees waived by the Advisor, the Fund’s effective investment advisory fee during 2007 was 0.61% of average daily net assets. In addition to this investment advisory fee, the Fund pays other operating expenses, which may include but are not limited to, administrative, transfer agency, custodial, legal and accounting fees.

A discussion regarding the Board of Directors’ basis for approving the Advisory Agreement is available in the Fund’s annual report for the year ended December 31, 2007.

 

 

PORTFOLIO MANAGERS

The Fund’s portfolio managers are:

 

·  

Robert Becker—Mr. Becker is a vice president of the Fund. He joined the Advisor in 2003 and currently serves as senior vice president of the Advisor and CNS. Prior to joining the Advisor, Mr. Becker was a co-portfolio manager of the Franklin Utilities Fund at Franklin Templeton

 

12


 

Investments. Mr. Becker has previously held positions in equity research for the utility sector at Salomon Smith Barney and Scudder, Stevens and Clark.

 

·  

Ben MortonMr. Morton joined the Advisor in 2003 as a research analyst covering utilities, and currently serves as vice president of the Advisor and CNS. Prior to joining the Advisor, Mr. Morton was a research associate at Salomon Smith Barney.

Messrs. Becker and Morton manage the Fund’s investment in infrastructure companies.

The SAI provides additional information about the portfolio managers’ compensation, other accounts they manage, and their ownership of securities in the Fund.

 

 

HOW TO PURCHASE AND SELL FUND SHARES

 

 

PRICING OF FUND SHARES

The price at which you can purchase and redeem the Fund’s Class I shares is the net asset value (NAV) of the shares next determined after we receive your order in proper form. Proper form means that your request includes the Fund name and account number, states the amount of the transaction (in dollars or shares), includes the signatures of all owners exactly as registered on the account, signature guarantees (if necessary), any supporting legal documentation that may be required and any outstanding certificates representing shares to be redeemed.

We calculate our NAV per share as of the close of regular trading on the New York Stock Exchange (NYSE), generally 4:00 p.m. eastern time, on each day the NYSE is open for trading. Thus, purchase and redemption orders must be received in proper form by the close of trading on the NYSE in order to receive that day’s NAV; orders received after the close of regular trading on the NYSE will receive the NAV next determined. The Fund has authorized one or more brokers to accept on its behalf purchase (and redemption) orders, and these brokers are authorized to designate other intermediaries on the Fund’s behalf. The Fund will be deemed to have received a purchase (or redemption) order when an authorized broker, or that broker’s designee, accepts the order, and that order will be priced at the next computed NAV after this acceptance. We determine NAV per share for the Class I shares by dividing that class’s share of the net assets of the Fund (i.e. its assets less liabilities) by the total number of Class I shares then outstanding.

Securities for which market prices are unavailable will be valued at fair value pursuant to procedures approved by the Fund’s Board of Directors. Circumstances in which market prices may be unavailable include, but are not limited to, when trading in a security is suspended, the exchange on which the security is traded is subject to an unscheduled close or disruption or material events occur after the close of the exchange on which the security is principally traded. In these circumstances, the Fund determines fair value in a manner that fairly reflects the market value of the security on the valuation date based on consideration of any information or factors it deems appropriate. These may include recent transactions in comparable securities, information relating to the specific security and developments in the markets. In particular, portfolio securities primarily traded on foreign markets are generally valued at the preceding closing values of such securities on their respective exchanges or if after the close of the foreign markets, but prior to the close of trading on the NYSE on the day the securities are being valued, developments occur that are expected to materially affect the value of such securities, such values may be adjusted to reflect the estimated fair value of such securities as of the close of trading on the NYSE using a pricing service and/or procedures approved by the Fund’s Board of Directors.

 

13


The Fund’s use of fair value pricing may cause the net asset value of Fund shares to differ from the net asset value that would be calculated using market quotations. Fair value pricing involves subjective judgments and it is possible that the fair value determined for a security may be materially different than the value that could be realized upon the sale of that security.

Because the Fund may hold securities that are primarily listed on foreign exchanges that trade on weekends or days when the Fund does not price its shares, the value of the securities held in the Fund may change on days when you will not be able to purchase or redeem Fund shares.

The Fund reserves the right to reject, cancel or rescind any purchase order and to withdraw or suspend the offering of shares at any time. The Fund may also request additional information from you in order to verify your identity. If you do not provide this information or if such information cannot be verified, we reserve the right to close your account to the extent required or permitted by applicable law or regulations, including those relating to the prevention of money laundering.

 

 

TYPES OF SHAREHOLDERS QUALIFIED TO PURCHASE CLASS I SHARES

Class I shares are available for purchase only by:

 

·  

retirement plans introduced by persons not associated with brokers or dealers that are primarily engaged in the retail securities business and rollover individual retirement accounts (IRA) from such plans

 

·  

tax-exempt employee benefit plans of the Advisor or its affiliates and securities dealer firms with a selling agreement with Cohen & Steers Securities LLC, the Fund’s distributor (the Distributor)

 

·  

institutional advisory accounts of the Advisor or its affiliates and related employee benefit plans and rollover IRAs

 

·  

a bank, trust company or similar financial institution investing for its own account or for the account of its trust customers for whom such financial institution is exercising investment discretion in purchasing Class I shares, except where the investment is part of a program that requires payment to the financial institution of a Rule 12b-1 Plan fee

 

·  

registered advisors investing on behalf of clients that consist solely of institutions and high net-worth individuals having at least $1,000,000 entrusted to the advisor for investment purposes, but only if the advisor is not affiliated or associated with a broker or dealer and derives compensation for its services exclusively from its clients for such advisory services

 

·  

such other investors that qualify for the minimum purchase amount and are approved by the Distributor

 

 

PURCHASE MINIMUMS

If you are an individual, you may open a Class I account with the Fund with a minimum investment of $1,000,000. If you are an advisor, you may open a Class I account with the Fund with an aggregate minimum investment of $1,000,000. Additional Class I investments must be at least $500. We are free to reject any purchase order, and we reserve the right to change these minimum investment requirements.

You can purchase the Fund’s Class I shares through authorized dealers, other intermediaries or directly through the Distributor. For accounts opened directly through the Distributor, a completed and signed Subscription Agreement is required for the initial account opened with the Fund.

 

14


 

ADDITIONAL CLASSES OFFERED

In addition to offering Class I shares, the Fund also offers Class A and Class C shares, which are described in a separate prospectus. To obtain a prospectus for these classes, contact the Transfer Agent by writing to the address or by calling the telephone number listed on the back cover of this prospectus.

 

 

FORM OF PAYMENT

We will accept payment for shares in two forms:

1. A check drawn on any bank or domestic savings institution. Checks must be payable in U.S. dollars and will be accepted subject to collection at full face value.

2. A bank wire or federal reserve wire of federal funds.

 

 

PURCHASES OF FUND SHARES

Initial Purchase By Wire

1. Telephone toll free from any continental U.S. state: (800) 437-9912. When you contact the Transfer Agent, you will need the following information:

 

·  

name of the Fund

 

·  

class of shares

 

·  

name(s) in which shares are to be registered

 

·  

address

 

·  

social security or tax identification number (where applicable)

 

·  

dividend payment election

 

·  

amount to be wired

 

·  

name of the wiring bank

 

·  

name and telephone number of the person to be contacted in connection with the order

 

·  

The Transfer Agent will assign you an account number

2. Instruct the wiring bank to transmit at least the required minimum amount (see Purchase Minimums above) to the custodian:

State Street Bank and Trust Company

One Lincoln Street

Boston, Massachusetts 02111

ABA # 011000028

Account: DDA #99055287

Attn: Cohen & Steers Global Infrastructure Fund, Inc.

For further credit to: (account name)

Account Number: (provided by the Transfer Agent)

 

15


3. Complete the Subscription Agreement attached to this Prospectus. Mail the Subscription Agreement to the Transfer Agent:

Boston Financial Data Services

Attn: Cohen & Steers Funds

P.O. Box 8123

Boston, Massachusetts 02266-8123

Initial Purchase By Mail

1. Complete the Subscription Agreement attached to this Prospectus.

2. Mail the Subscription Agreement and a check in at least the required minimum amount (see Purchase Minimums above), payable to the Fund, to the Transfer Agent at the above address.

Additional Purchases By Wire

1. Telephone toll free from any continental U.S. state: (800) 437-9912. When you contact the Transfer Agent, you will need the following information:

 

·  

name of the Fund

 

·  

class of shares

 

·  

account number

 

·  

amount to be wired

 

·  

name of the wiring bank

 

·  

name and telephone number of the person to be contacted in connection with the order

2. Instruct the wiring bank to transmit at least the required minimum amount (see Purchase Minimums above) to the custodian:

State Street Bank and Trust Company

One Lincoln Street

Boston, Massachusetts 02111

ABA # 011000028

Account: DDA #99055287

Attn: Cohen & Steers Global Infrastructure Fund, Inc.

For further credit to: (Account Name)

Account Number: (provided by the Transfer Agent)

Additional Purchases By Mail

1. Make a check payable to the Fund in at least the required minimum amount (see Purchase Minimums above). Write your Fund account number and the class of shares to be purchased on the check.

2. Mail the check and the detachable stub from your account statement (or a letter providing your account number) to the Transfer Agent at the address set forth above.

Purchases by ACH

You may purchase additional shares of the Fund you own by automated clearing house (ACH). To elect the Auto-Buy option, select it on your Subscription Agreement or call the Transfer Agent and request an optional shareholder services form. ACH is similar to the pre-authorized automatic investment

 

16


plan, except that you may choose the date on which you want to make the purchase. We will need a voided check or deposit slip before you may purchase by ACH. If you are interested in this option, please call (800) 437-9912.

 

 

PURCHASES THROUGH DEALERS AND INTERMEDIARIES

You may purchase the Fund’s shares through selected authorized dealers and other financial intermediaries. These entities are responsible for promptly transmitting purchase orders to the Distributor and may impose transaction fees that are in addition to any other fees described in this Prospectus. Such fees may include processing or service fees, which are typically fixed dollar amounts. You should contact your dealer or intermediary for more information about any additional fees that may apply.

 

 

PURCHASES THROUGH THE DISTRIBUTOR

You may also purchase shares of the Fund directly through the Distributor by mailing a check made payable to Cohen & Steers Global Infrastructure Fund, Inc. along with the completed Subscription Agreement to Cohen & Steers Global Infrastructure Fund, Inc. c/o Boston Financial Data Services, P.O. Box 8123, Boston, Massachusetts 02266-8123.

 

 

AUTOMATIC INVESTMENT PLAN

The Fund’s automatic investment plan (the Plan) provides a convenient way to invest in the Fund. Under the Plan, you can have money transferred automatically from your checking account to the Fund each month to buy additional shares. If you are interested in this Plan, please refer to the automatic investment plan section of the Subscription Agreement included with this Prospectus or contact your dealer. The market value of the Fund’s shares may fluctuate, and a systematic investment plan such as this will not assure a profit or protect against a loss. You may discontinue the Plan at any time by notifying the Fund by mail or telephone at the address or number on the back cover of this Prospectus.

 

 

EXCHANGE PRIVILEGE

You may exchange some or all of your Fund shares for shares of the other Cohen & Steers open-end funds. If you exchange Fund shares for shares of another multi-class Cohen & Steers fund, you must exchange into shares of the same class of such other fund. The Fund will charge you a redemption fee of 2.00% of the value of shares redeemed or exchanged within 60 days of the time you purchased them (other than those shares acquired through reinvestment of dividends or other distributions) as described below under How to Sell Fund Shares—Payments of Redemption Proceeds.

Cohen & Steers also makes available for exchange shares of SSgA Money Market Fund, which is advised by State Street Bank and Trust Company. You may request a prospectus and application for the SSgA Money Market Fund by calling (800) 437-9912. Please read the prospectus carefully before you invest.

An exchange of shares may result in your realizing a taxable gain or loss for income tax purposes. See Additional Information—Tax Considerations. The exchange privilege is available to shareholders residing in any state in which the shares being acquired may be legally sold. Before you exercise the exchange privilege, you should read the prospectus of the fund whose shares you are acquiring. Certain dealers may limit or prohibit your right to use the exchange privilege and may charge you a fee for exchange transactions placed through them.

 

17


We have adopted reasonable procedures that are designed to ensure that any telephonic exchange instructions are genuine. Neither the Fund nor its agents will be liable for any loss or expenses if we act in accordance with these procedures. We may modify or revoke the exchange privilege for all shareholders upon 60 days prior written notice and this privilege may be revoked immediately with respect to any shareholder if the Fund believes that the shareholder is engaged in, or has been engaged in, market timing or other abusive trading practices. For additional information concerning exchanges, or to make an exchange, please call the Transfer Agent at (800) 437-9912.

 

 

HOW TO SELL FUND SHARES

You may sell or redeem your shares through your dealer or other financial intermediary or through the Transfer Agent. If your shares are held by your dealer or intermediary in “street name,” you must redeem your shares through that dealer or intermediary.

Redemptions Through Dealers and Other Intermediaries

If you have an account with an authorized dealer or other intermediary, you may submit a redemption request to such dealer or intermediary. They are responsible for promptly transmitting redemption requests to the Distributor. Dealers and intermediaries may impose charges for handling redemption transactions placed through them that are in addition to any other charges described in this Prospectus. Such charges may include processing or service fees, which are typically fixed dollar amounts. You should contact your dealer or intermediary for more information about additional charges that may apply.

Redemption By Telephone

To redeem shares by telephone, call the Fund’s Transfer Agent at (800) 437-9912. In order to be honored at that day’s price, we must receive any telephone redemption requests by the close of trading on the NYSE that day, generally 4:00 p.m., Eastern time. Orders received after the close of regular trading on the NYSE will receive the NAV next determined.

If you would like to change your telephone redemption instructions, you must send the Transfer Agent written notification signed by all of the account’s registered owners, accompanied by signature guarantee(s), as described below.

We may modify or suspend telephone redemption and exchange privileges without notice during periods of drastic economic or market changes. We have adopted reasonable procedures that are designed to ensure that any telephonic exchange instructions are genuine. Neither the Fund nor its agents will be liable for any loss or expenses if we act in accordance with these procedures. We may modify or terminate the telephone redemption privilege at any time on 30 days notice to shareholders.

Redemption By Mail

You can redeem Fund shares by sending a written request for redemption to the Transfer Agent:

Boston Financial Data Services

P.O. Box 8123

Boston, Massachusetts 02266-8123

Attn: Cohen & Steers Global Infrastructure Fund, Inc.

 

18


A written redemption request must:

 

·  

state the number of shares or dollar amount to be redeemed

 

·  

identify your account number and tax identification number

 

·  

be signed by each registered owner exactly as the shares are registered

If the shares to be redeemed were issued in certificate form, the certificate must be endorsed for transfer (or be accompanied by a duly executed stock power) and must be submitted to the Transfer Agent together with a redemption request.

For redemptions made by corporations, executors, administrators or guardians, the Transfer Agent may require additional supporting documents evidencing the authority of the person making the redemption (including evidence of appointment or incumbency). For additional information regarding the specific documentation required, contact the Transfer Agent at (800) 437-9912.

The Transfer Agent will not consider your redemption request to be properly made until it receives all required documents in proper form.

Other Redemption Information

Payment of Redemption Proceeds. The Fund will send you redemption proceeds by check. If you made an election on the Subscription Agreement to receive redemption proceeds by wire, the Fund will send the proceeds by wire to your designated bank account. When proceeds of a redemption are to be paid to someone other than the shareholder, either by wire or check, you must send a letter of instruction and the signature(s) on the letter of instruction must be guaranteed, as described below, regardless of the amount of the redemption. The Transfer Agent will normally mail checks for redemption proceeds within five business days. Redemptions by wire will normally be sent within two business days. The Fund will delay the payment of redemption proceeds, however, if your check used to pay for the shares to be redeemed has not cleared, which may take up to 15 days or more.

The Fund will charge a redemption fee of 2.00% of the value of shares redeemed or exchanged within 60 days of the time of any NAV purchase (other than those shares acquired through reinvestment of dividends or other distributions). For purposes of calculating the redemption fee, shares that are held longer than 60 days, and shares acquired by reinvestment of dividends or distributions, will be deemed to have been sold first. The redemption fee does not apply in the following circumstances: (i) redemptions of shares held in certain omnibus accounts, including retirement, pension, profit sharing and other qualified plans, as well as bank or trust company accounts, (ii) redemptions of shares held through firm-sponsored, discretionary asset allocation or wrap programs that utilize a regularly scheduled automatic rebalancing of assets and that the Fund determines are not designed to facilitate short-term trading, (iii) redemptions of shares due to the death or disability of a stockholder, (iv) redemptions of shares in connection with required distributions and certain other transactions in an individual retirement account or qualified retirement plan and (v) redemptions of shares by certain other accounts in the absolute discretion of the Fund when a shareholder can demonstrate hardship. The Fund reserves the right to modify or eliminate these waivers at any time.

In addition to the circumstances noted above, the Fund reserves the right to grant additional waivers based on such factors as operational limitations, contractual limitations and further guidance from the SEC or other regulators. Since the Fund is designed to be a long-term investment, this fee is intended to compensate the Fund for the costs imposed when shares are redeemed shortly after purchase.

If your shares are held through a financial intermediary in an omnibus or other group account, the Fund relies on the financial intermediary to assess the redemption fee on underlying shareholder

 

19


accounts. The application of redemption fees and exemptions may vary and certain intermediaries may not apply the exceptions listed above. If you invest through a financial intermediary, please contact your intermediary for more information regarding when redemption fees will be applied to the redemption of your shares.

Signature Guarantee. You may need to have your signature guaranteed in certain situations, such as:

 

·  

written requests to wire redemption proceeds (if not previously authorized on the Subscription Agreement)

 

·  

sending redemption proceeds to any person, address or bank account not on record

 

·  

transferring redemption proceeds to a Cohen & Steers Fund account with a different registration (name/ownership) from yours

 

·  

establishing certain services after the account is opened

You can obtain a signature guarantee from most banks, savings institutions, broker-dealers and other guarantors acceptable to the Fund. The Fund cannot accept guarantees from notaries public or organizations that do not provide reimbursement in the case of fraud.

Redemption of Small Accounts. If your Fund account has a value of $100,000 or less as the result of any voluntary redemption, we may redeem your remaining shares. We will, however, give you 30 days notice of our intention to do so. During this 30-day notice period, you may make additional investments to increase your account value to $100,000 (the minimum purchase amount) or more and avoid having the Fund automatically liquidate your account.

 

 

FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES

The Fund is designed for long-term investors with investment horizons of at least six months. Excessive trading, short-term market timing or other abusive trading practices may disrupt portfolio management strategies and harm portfolio performance. For example, in order to handle large flows of cash into and out of a fund, a portfolio manager may need to allocate more assets to cash or other short-term investments or sell securities. Transaction costs, such as brokerage commissions and market spreads, can detract from the Fund’s performance.

Because of potential harm to the Fund and its long-term investors, the Board of Directors of the Fund has adopted policies and procedures to discourage and prevent excessive trading and short-term market timing. As part of these policies and procedures, the Advisor monitors purchase, exchange and redemption activity in Fund shares. The intent is not to inhibit legitimate strategies such as asset allocation, dollar cost averaging or similar activities that may nonetheless result in frequent trading of the Fund’s shares. Therefore, there are no specific restrictions on the volume or number of purchases, exchanges or redemptions of Fund shares a shareholder may make, although the Fund reserves the right to reject or refuse any purchase request that could adversely affect the Fund or its operations. If, based on these procedures, the Advisor believes that a shareholder is engaged in, or has engaged in, market timing or excessive trading, we may place a temporary or permanent block on all further purchases or exchanges of Fund shares.

Multiple accounts under common ownership or control may be considered one account for the purpose of determining a pattern of excessive trading, short-term market timing or other abusive trading practices.

 

20


In addition, the Fund charges a 2.00% redemption fee on certain redemptions and this fee is intended to compensate the Fund for the costs that short-term investors impose. The Fund will also utilize fair value pricing in an effort to reduce arbitrage opportunities available to short-term traders.

Due to the complexity and subjectivity involved in identifying excessive trading and market timing activity, there can be no guarantee that the Fund will be able to identify and restrict such activity in all cases. Additionally, it is more difficult for the Fund to monitor the trading activity of beneficial owners of the Fund shares who hold those shares through 401(k) and other group retirement plans and other omnibus arrangements maintained by broker/dealers and other intermediaries. Omnibus account arrangements permit multiple investors to aggregate their respective share ownership positions and purchase, redeem and exchange Fund shares in a single account.

 

 

ADDITIONAL INFORMATION

 

 

OTHER COMPENSATION

The Advisor and the Distributor may make payments from their own resources to dealers and other financial intermediaries for distribution, administrative or other services. Please contact your dealer or intermediary for details about payments it may receive. For further information, please consult the SAI.

 

 

DIVIDENDS AND DISTRIBUTIONS

The Fund intends to declare and pay dividends from its investment income quarterly. The Fund intends to distribute net realized capital gains, if any, at least once each year, normally in December. The Transfer Agent will automatically reinvest your dividends and distributions in additional shares of the Fund unless you elect to have them paid to you in cash.

 

 

TAX CONSIDERATIONS

The following brief tax discussion assumes you are a U.S. shareholder. This discussion offers only a brief outline of the federal income tax consequences of investing in the Fund and is based on the federal tax laws in effect on the date hereof. Such tax laws are subject to change by legislative, judicial or administrative action, possibly with retroactive effect. In the SAI we have provided more detailed information regarding the tax consequences of investing in the Fund.

Dividends paid to you out of the Fund’s ‘‘investment company taxable income’’ as that term is defined in the Code, determined without regard to the deduction for dividends paid, will be taxable to you as ordinary dividend income. If a portion of the Fund’s income consists of dividends paid by U.S. corporations (other than REITs), a portion of the dividends paid by the Fund may be eligible for the corporate dividends received deduction. In addition, for taxable years beginning on or before December 31, 2010, distributions of investment company taxable income designated by the Fund as derived from qualified dividend income will be taxed in the hands of individuals at the rates applicable to long-term capital gain, provided holding period and other requirements are met by both you and the Fund. Dividend income that the Fund receives from U.S. REITs will generally not be treated as qualified dividend income. The Fund does not expect a significant portion of Fund distributions to be eligible for the dividends received deduction or derived from qualified dividend income. Distributions of net capital gain (the excess of net long-term capital gain over net short-term capital loss), if any, designated as capital gain dividends are taxable to you as long-term capital gains, regardless of how long you have held your Fund shares. A distribution of an amount in excess of the Fund’s earnings is treated

 

21


as a non-taxable return of capital that reduces your tax basis in your Fund shares; any such distributions in excess of your basis are treated as gain from a sale of your shares. The tax treatment of your dividends and distributions will be the same regardless of whether they were paid to you in cash or reinvested in additional Fund shares.

A distribution will be treated as paid to you on December 31 of the current calendar year if it is declared by the Fund in October, November or December with a record date in such a month and paid during January of the following year.

Each year, we will notify you of the tax status of dividends and other distributions.

If you sell or redeem your Fund shares, or exchange them for shares of another Cohen & Steers open-end fund, you may realize a capital gain or loss (provided the shares are held as a capital asset) which will be long-term or short-term, depending on your holding period for the shares.

We may be required to withhold U.S. federal income tax from all taxable distributions payable if you:

 

·  

fail to provide us with your correct taxpayer identification number;

 

·  

fail to make required certifications; or

 

·  

have been notified by the IRS that you are subject to backup withholding.

Backup withholding is not an additional tax. Any amounts withheld may be credited against your U.S. federal income tax liability.

The Fund has elected to be treated as, and intends to qualify each year as, a regulated investment company under U.S. federal income tax law. If the Fund so qualifies and distributes each year to its shareholders at least 90% of the sum of its investment company taxable income (as that term is defined in the Code, but without regard to the deductions for dividends paid) and net tax-exempt interest, the Fund will not be required to pay U.S. federal income taxes on any income it distributes to shareholders. If the Fund distributes less than an amount equal to the sum of 98% of its ordinary income for the calendar year and 98% of its capital gain net income for the one-year period ending on December 31, as elected by the Fund, of such calendar year, plus any ordinary income and capital gain net income from previous years that was not distributed, then the Fund will be subject to a nondeductible 4% excise tax on the undistributed amounts. The Fund intends to make sufficient distributions of its income to satisfy the distribution requirement and prevent application of the excise tax. If in any taxable year the Fund fails to qualify as a regulated investment company under the Code, the Fund will be taxed in the same manner as an ordinary corporation and distributions to shareholders will not be deductible by the Fund in computing its taxable income.

Fund distributions also may be subject to state and local taxes. You should consult with your own tax advisor regarding the particular consequences of investing in the Fund.

 

 

PRIVACY POLICY*

In the course of doing business with Cohen & Steers, you may share personal information with us. We are committed to maintaining the privacy of this information and recognize the importance of preventing unauthorized access to it. You may provide personal information (such as your address and social security number) on subscription agreements and requests for forms or other literature and through account transactions with us (such as purchases, sales and requests for account balances). You may also provide us with this information through written, electronic and telephone account inquiries.

 

22


We do not sell personal information about current and former customers to anyone, and we do not disclose it unless necessary to process a transaction, service an account or as otherwise required or permitted by law. For example, we may disclose information to companies that perform administrative services for Cohen & Steers, such as transfer agents, or printers that assist us in the distribution of investor materials. These organizations will use this information only for purposes of providing the required services or as otherwise may be required by law. We may also share personal information within the Cohen & Steers family of companies to provide you with additional information about our products and services.

We maintain physical, electronic and procedural safeguards to protect your personal information. Within Cohen & Steers, we restrict access to your personal information to those employees who need it to perform their jobs, such as servicing your account or informing you of new products and services.

The accuracy of your personal information is important. If you need to correct or update your personal or account information, please call us at 800-330-7348. We will be happy to review, correct or update your personal or account information.

 

* This privacy policy applies to the following Cohen & Steers companies: Cohen & Steers Capital Management, Inc., Cohen & Steers Securities, LLC, Cohen & Steers Capital Advisors, LLC and the Cohen & Steers Funds.

 

23


 

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the Fund’s financial performance since its inception. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned or lost on an investment in the Fund (assuming reinvestment of all dividends and distributions). These financial highlights have been derived from financial statements audited by PricewaterhouseCoopers LLP, whose report, along with the Fund’s audited financial statements, are included in the Fund’s current annual report, which is available free of charge upon request.

 

     Class I  
     For the Year Ended December 31,    

For the Period
May 3, 2004(a)
through
December 31, 2004

 

Per Share Operating Performance:

  

    2007    

   

    2006    

   

    2005    

   

Net asset value, beginning of period

   $ 16.63     $ 15.26     $ 13.78     $ 11.46  
                                

Income from investment operations:

        

Net investment income

     0.25 (b)     0.43       0.43 (b)     0.27 (b)

Net realized and unrealized gain on investments

     3.76       2.56       1.45       2.24  
                                

Total from investment operations

     4.01       2.99       1.88       2.51  
                                

Less dividends and distributions to shareholders from:

        

Net investment income

     (0.24 )     (0.43 )     (0.38 )     (0.17 )

Net realized gain on investments

     (2.90 )     (1.19 )     (0.00 )(c)     (0.01 )

Tax return of capital

           (0.00 )(c)     (0.02 )     (0.01 )
                                

Total dividends and distributions to shareholders

     (3.14 )     (1.62 )     (0.40 )     (0.19 )
                                

Redemption fees retained by the fund

     0.01       0.00 (c)     0.00 (c)      
                                

Net increase in net asset value

     0.88       1.37       1.48       2.32  
                                

Net asset value, end of period

   $ 17.51     $ 16.63     $ 15.26     $ 13.78  
                                
   

Total investment return

     24.36 %     19.81 %     13.73 %     21.98 %(d)
                                
   

Ratios/Supplemental Data:

        

Net assets, end of period
(in millions)

   $ 1.5     $ 2.9     $ 2.7     $ 1.3  
                                

Ratio of expenses to average daily net assets
(before expense reduction)

     1.31 %     1.14 %     1.24 %     9.33 %(e)
                                

Ratio of expenses to average daily net assets
(net of expense reduction)

     1.15 %     1.14 %     1.14 %     1.15 %(e)
                                

Ratio of net investment income (loss) to average daily net assets
(before expense reduction)

     1.20 %     2.36 %     2.80 %     (4.92 )%(e)
                                

Ratio of net investment income to average daily net assets
(net of expense reduction)

     1.36 %     2.36 %     2.89 %     3.26 %(e)
                                

Portfolio turnover rate

     102 %     56 %     45 %     16 %(d)
                                

 

(a) Commencement of operations.
(b) Calculation based on average shares outstanding.
(c) Amount is less than $0.005.
(d) Not annualized.
(e) Annualized.

 

24


COHEN & STEERS GLOBAL INFRASTRUCTURE FUND, INC. — CLASS I SHARES ONLY

 

THE USA PATRIOT ACT

To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.

What this means for you: when you open an account, we will ask you for your name, address, date of birth and other information that will allow us to identify you. This information will be verified to ensure the identity of all individuals opening a mutual fund account.

SUBSCRIPTION AGREEMENT

 

1

  Account Type (Please print; indicate only one registration type)   
¨  

A.   Individual or Joint Account*

     
                                                                                       -       -                                                      
  Name   Social Security Number**    Date of Birth

 

                                                                                       -       -                                                      
  Name of Joint Owner, if any   Social Security Number**    Date of Birth
  Citizenship:  ¨  U.S. Citizen    ¨  Resident Alien    ¨  Nonresident Alien***:                                                                                          
  Country of Citizenship                

 

¨  

B.  Uniform Gifts/Transfers to Minors (UGMA/UTMA)

  
                                                                                       -       -                                                      
  Custodian’s name (only one permitted)   Social Security Number**    Date of Birth
                                                                                       -       -                                                      
  Minor’s name (only one permitted)   Social Security Number**    Date of Birth
  under the                                                                           Uniform Gifts/Transfers to Minors Act
                                  (state residence of minor)
  Citizenship of custodian:   ¨   U.S. Citizen   ¨   Resident Alien   ¨   Nonresident Alien***:                                                                        
                Country of Citizenship
  Citizenship of minor:   ¨   U.S. Citizen   ¨   Resident Alien   ¨   Nonresident Alien***:                                                                        
                Country of Citizenship

 

¨  

C.   Trust, Corporation or Other Entity

     

 

                                                                                                                                                                                                                     
  Name of Trust, Corporation or Other Entity    Tax Identification Number**    Date of Trust Agreement

Check the box that describes the entity establishing the account:

 

  ¨ U.S. Financial Institution governed by a federal regulator.

 

  ¨ Bank governed by a U.S. state bank regulator.

 

  ¨ Corporation. Attach a copy of the certified articles of incorporation or business license unless the corporation is publicly traded on the New York Stock Exchange, American Stock Exchange or Nasdaq Stock Market. If so, please provide ticker symbol:                  

 

  ¨ Retirement plan governed by ERISA.

 

  ¨ Trust. Attach a copy of the Trust Agreement.

 

  ¨ Partnership. Attach a copy of Partnership Agreement.

 

  ¨ U.S. Government Agency or Instrumentality.

 

  ¨ Foreign correspondent account, foreign broker dealer or foreign private banking account.

 

  ¨ Other.                                                       Attach copy of document that formed entity or by laws or similar document.

Call (800) 437-9912 to see if additional information is required.

 

 

  *   All joint registrations will be registered as “joint tenants with rights of survivorship” unless otherwise specified.
  **   If applied for, include a copy of application for social security or tax identification number.
  ***   Nonresident aliens must include a copy of a government-issued photo ID with this application.


2

  Authorized Persons      
  If you are establishing an account under 1C above as a (i) Corporation (non-publicly traded), (ii) Partnership, (iii) Trust or (iv) Other, information on each of the individuals authorized to effect transactions must be provided below:

 

                                                                                       -       -                                                      
  Authorized Individual/Trustee   Social Security Number*    Date of Birth

 

                                                                                       -       -                                                      
  Authorized Individual/Trustee   Social Security Number*    Date of Birth
  Citizenship:  ¨  U.S. Citizen    ¨  Resident Alien       ¨  Nonresident Alien**:                                                                                         
  Country of Citizenship                

(If there are more than two authorized persons, provide the information, in the same format, on a separate sheet for each such additional person.)

 

  * If applied for, include a copy of application for social security number.
  ** Nonresident aliens must include a copy of a government-issued photo ID with this application.

 

3

  Address      
 

(If mailing address is a post office box, a street address is also required. APO and FPO addresses will be accepted)

 

Registrant Street Address

 

                                                                                             

(                 )

  Street    Home Telephone Number
                                                                                             

(                 )

  City and State                                                             Zip Code    Business Telephone Number

 

  Mailing Address                                                                             City                                                     State                             Zip                     

Joint Registrant Street Address (required if different than Registrant Address above)

 

  Address                                                                                            City                                                     State                             Zip                     

 

4

  Investment Information      

                         Amount to invest ($1,000,000 minimum investment for individual, or $250,000 minimum investment for advisor). Do not send cash. Investment will be paid for by

(please check one):

 

  ¨ Check or draft made payable to “Cohen & Steers Global Infrastructure Fund, Inc.”

 

  ¨ Wire through the Federal Reserve System.*                                                                                   

 

  * Call (800) 437-9912 to notify the Fund of investments by wire and to obtain an account number. See the Purchase of Fund Shares section of the prospectus for wire instructions.

 

5

  Automatic Investment Plan      

 

  A. The automatic investment plan makes possible regularly scheduled monthly purchases of Fund shares. The Fund’s Transfer Agent can arrange for an amount of money selected by you ($500 minimum) to be deducted from your checking account and used to purchase shares of the Fund.

Please debit $                            from my checking account beginning on                            *.

(Month)

Please debit my account on (check one):  ¨  1st of Month        ¨  15th of Month

 

  B. ¨  Please establish the Auto-Buy option, which allows you to make additional investments on dates you choose by having an amount of money selected by you ($500 minimum) deducted from your checking account.*

 

  * To initiate the automatic investment plan or the Auto-Buy option, Section 9 of this subscription agreement must be completed.


6

  Exchange Privileges      

Exchange privileges will be automatically granted unless you check the box below. Shareholders wishing to exchange into other Cohen & Steers Funds or the SSgA Money Market Fund should consult the Exchange Privilege section of the prospectus. (Note: If shares are being purchased through a dealer, please contact your dealer for availability of this service.)

 

  ¨ I decline the exchange privilege.

 

7

  Redemption Privileges      

Shareholders may select the following redemption privileges by checking the box(es) below. See How to Sell Fund Shares section of the prospectus for further details. Redemption privileges will be automatically declined for boxes not checked.

 

  ¨ I authorize the Transfer Agent to redeem shares in my account(s) by telephone, in accordance with the procedures and conditions set forth in the fund’s current prospectus.

 

  ¨ I wish to have redemption proceeds paid by wire (please complete Section 9).

 

8

  Distribution Options      

Dividends and capital gains may be reinvested or paid by check. If no options are selected below, both dividends and capital gains will be reinvested in additional Fund shares.

 

Dividends   ¨ Reinvest.   ¨ Pay in cash.   
Capital Gains   ¨ Reinvest.   ¨ Pay in cash.   

 

  ¨ I wish to have my distributions paid by wire (please complete Section 9).

 

 

9

  Bank of Record (for Wire Instructions and/or Automatic Investment Plan)   

Please attach a voided check from your bank account.

 

Bank Name     Bank ABA Number
   
Street or P.O. Box     Bank Account Number
   
City and State Zip Code                 Account Name

 

10   Signature and Certifications      

 

(a) By signing this agreement, I represent and warrant that:

 

  (1) I have the full right, power, capacity and authority to invest in the Fund;

 

  (2) I am of legal age in my state of residence or am an emancipated minor;

 

  (3) All of the information on this agreement is true and correct; and

 

  (4) I will notify the Fund immediately if there is any change in this information.

 

(b) I have read the current prospectus of the Fund and this agreement and agree to all their terms. I also agree that any shares purchased now or later are and will be subject to the terms of the Fund’s prospectus as in effect from time to time. Further, I agree that the Fund, its administrators and service providers and any of their directors, trustees, employees and agents will not be liable for any claims, losses or expenses (including legal fees) for acting on any instructions believed to be genuine, provided that reasonable security procedures have been followed. If an account has multiple owners, the Fund may rely on the instructions of any one account owner unless all owners specifically instruct the Fund otherwise.

 

(c) If I am a U.S. citizen, resident alien, or a representative of a U.S. entity, I certify, under penalty of perjury, that:

 

  (1) The taxpayer identification number and tax status shown on this form are correct.

 

  (2) I am not subject to backup withholding because:

 

   

I am exempt from backup withholding, OR

 

   

I have not been notified by the Internal Revenue Service (“IRS”) that I am subject to backup withholding as a result of a failure to report all interest or dividends, OR

 

   

The IRS has notified me that I am no longer subject to backup withholding.

NOTE: If you have been notified by the IRS that you are currently subject to backup withholding because of under-reporting interest or dividends on your tax return, you must cross out this Item 2.

 

  (3) I am a U.S. person (including resident alien).


(d) If I am a nonresident alien, I understand that I am required to complete and attach the appropriate Form W-8 to certify my foreign status.

 

  (1) Indicate country of residence for tax purposes                                              
     Under penalty of perjury, I certify that I am not a U.S. citizen or resident alien and I am an exempt foreign person as defined by the IRS.

 

(e) Additional Certification:

 

  (1) Neither I (we), nor any person having a direct or indirect beneficial interest in the shares to be acquired, appears on any U.S. government published list of persons who are known or suspected to engage in money laundering activities, such as the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control of the United States Department of the Treasury. I (we) do not know or have any reason to suspect that (i) the monies used to fund my (our) investment have been or will be derived from or related to any illegal activities and (ii) the proceeds from my (our) investment will be used to finance any illegal activities.

 

  (2) I agree to provide such information and execute and deliver such documents as the Fund may reasonably request from time to time to verify the accuracy of the information provided in connection with the opening of an account or to comply with any law, rule or regulation to which the Fund may be subject, including compliance with anti-money laundering laws.

 

   The IRS does not require your consent to any provision of this document other than the certifications required to avoid backup withholding.

 

x       x    
             

Signature* (Owner, Trustee, Etc.)

  Date   Signature* (Joint Owner, Co-Trustee)   Date

 

              

Name and Title

     

 

 

*   If shares are to be registered in (1) joint names, both persons should sign, (2) a custodian’s name, the custodian should sign, (3) a trust, the trustee(s) should sign, or (4) a corporation or other entity, an officer or other authorized person should sign and print name and title above. Persons signing as representatives or fiduciaries of corporations, partnerships, trusts or other organizations are required to furnish corporate resolutions or similar documents providing evidence that they are authorized to effect securities transactions on behalf of the Investor (alternatively, the secretary or another designated officer of the entity may certify the authority of the persons signing on the space provided above). In addition, signatures of representatives or fiduciaries of corporations and other entities must be accompanied by a signature guarantee by a commercial bank that is a member of the Federal Deposit Insurance Corporation, a trust company or a member of a national securities exchange.

Mail to: Boston Financial Data Services, P.O. Box 8123, Boston, MA 02266-8123


LOGO

TO OBTAIN ADDITIONAL INFORMATION ABOUT THE FUND

If you would like additional information about Cohen & Steers Global Infrastructure Fund, Inc., the following documents are available to you without any charge either upon request or at http://www.cohenandsteers.com:

 

 

Annual/Semi-Annual Reports—Additional information about the Fund’s investments is available in the Fund’s annual and semi-annual reports to shareholders. In these reports, you will find a discussion of the market conditions and investment strategies that significantly affected the Fund’s performance during its most recent fiscal year.

 

 

Statement of Additional Information—Additional information about the Fund’s investments, structure and operations can be found in the SAI. The information presented in the SAI is incorporated by reference into this Prospectus and is legally considered to be part of the Prospectus.

To request a free copy of any of the materials described above, as well as other information, or to make any other inquiries or requests for information, please contact us:

 

By telephone    (800) 437-9912
By mail    Cohen & Steers Global Infrastructure Fund, Inc.
   c/o Boston Financial Data Services
   P.O. Box 8123
   Boston, Massachusetts 02266-8123
By e-mail    marketing@cohenandsteers.com
On the Internet    http://www.cohenandsteers.com

This information may also be available from your broker or financial advisor. In addition, information about the Fund (including the Fund’s SAI) may also be obtained from the SEC:

 

 

By going to the SEC’s Public Reference Room in Washington, D.C., where you can review and copy the information. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-202-551-5850.

 

 

By accessing the SEC’s Internet site at http://www.sec.gov where you can view, download and print the information.

 

 

By electronic request at the following e-mail address: publicinfo@sec.gov, or by writing to the Public Reference Section of the SEC, Washington, D.C. 20549-0102. Upon payment of a duplicating fee, copies of the information will be sent to you.

280 PARK AVENUE, NEW YORK, NEW YORK 10017

SEC File No. 811-21488


LOGO

280 PARK AVENUE

NEW YORK, NEW YORK 10017

(800) 437-9912

 

 

STATEMENT OF ADDITIONAL INFORMATION

APRIL 1, 2008

This Statement of Additional Information (SAI) is not a Prospectus, but should be read in conjunction with the Prospectus for the Class A, Class B and Class C shares of Cohen & Steers Global Infrastructure Fund, Inc. and the Prospectus for the Class I shares of Cohen & Steers Global Infrastructure Fund, Inc., each dated the same date as this SAI, as supplemented from time to time (together, the Prospectus). Class B shares are no longer being offered except through dividend reinvestment and permitted exchanges by existing Class B shareholders. This SAI is incorporated by reference in its entirety into the Prospectus. Copies of the SAI, Prospectus and Annual and Semi-Annual Reports (when available) may be obtained free of charge by writing or calling the address or phone number shown above.

 

 


 

TABLE OF CONTENTS

 

     Page

Investment Policies

   3

Investment Restrictions

   14

Management of the Fund

   16

Compensation of Directors and Certain Officers

   20

Principal Holders of Securities

   21

Investment Advisory and Other Services

   21

Portfolio Transactions and Brokerage

   33

Organization and Description of Capital Stock

   34

Dealer Reallowances

   35

Distribution Plan

   35

Determination of Net Asset Value

   36

Reducing the Initial Sales Load on Class A Shares

   37

Contingent Deferred Sales Charges

   39

Other Information

   41

Taxation

   41

Counsel and Independent Registered Public Accounting Firm

   50

Financial Statements

   50

 

2


 

STATEMENT OF ADDITIONAL INFORMATION

 

 

Cohen & Steers Global Infrastructure Fund, Inc. (the Fund) is a non-diversified, open-end management investment company organized as a Maryland corporation on January 13, 2004.

Much of the information contained in this SAI expands on subjects discussed in the Prospectus. No investment in the shares of the Fund should be made without first reading the Prospectus.

 

 

INVESTMENT POLICIES

 

 

ADDITIONAL INFORMATION REGARDING FUND INVESTMENTS

The following descriptions supplement the information set forth in the prospectus relating to the Fund’s investments and risks. Except as otherwise provided below, the Fund’s investment objective, strategies and policies are not fundamental and may be changed by the Board of Directors of the Fund without the approval of the shareholders; however, the Fund will not change its investment objective or policies without written notice to shareholders. In addition, shareholders will be provided with at least 60 days’ prior written notice of any change to the Fund’s investment policy of investing at least 80% of its net assets in the equity securities of infrastructure companies, as described in the Prospectus.

 

 

CASH RESERVES

The Fund’s cash reserves, held to provide sufficient flexibility to take advantage of new opportunities for investments and for other cash needs, will be invested in money market instruments and generally will not exceed 15% of total assets.

Money market instruments in which the Fund may invest its cash reserves will generally consist of obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities and such obligations which are subject to repurchase agreements. A repurchase agreement is an instrument under which an investor, such as the Fund, purchases a U.S. Government security from a counterparty, with an agreement by the counterparty to repurchase the security at the same price, plus interest at a specified rate. In such a case, the security is held by the Fund, in effect, as collateral for the repurchase obligation. Repurchase agreements may be entered into with member banks of the Federal Reserve System or primary dealers (as designated by the Federal Reserve Bank of New York) in U.S. Government securities. Other acceptable money market instruments include commercial paper rated by any nationally recognized rating agency, such as Moody’s Investors Service, Inc. (Moody’s) or Standard & Poor’s Ratings Services (S&P), certificates of deposit, bankers’ acceptances issued by domestic banks having total assets in excess of one billion dollars and money market mutual funds.

In entering into any repurchase agreement for the Fund, Cohen & Steers Capital Management, Inc., the Fund’s investment advisor (the Advisor), will evaluate and monitor the creditworthiness of the counterparty. In the event that a counterparty should default on its repurchase obligation, the Fund might suffer a loss to the extent that the proceeds from the sale of the collateral were less than the repurchase price. If the counterparty becomes bankrupt, the Fund might be delayed, or may incur costs or possible losses of principal or income, in selling the collateral.

 

 

ILLIQUID SECURITIES

The Fund will not invest in illiquid securities if immediately after such investment more than 15% of the Fund’s net assets (taken at market value) would be invested in such securities. For this purpose,

 

3


illiquid securities include, among others, securities that are illiquid by virtue of the absence of a readily available market or legal or contractual restrictions on resale. Securities that have legal or contractual restrictions on resale but have a readily available market are not deemed illiquid for purposes of this limitation.

Historically, illiquid securities have included securities subject to contractual or legal restrictions on resale because they have not been registered under the Securities Act of 1933, as amended (the Securities Act), and securities which are otherwise not readily marketable. Securities which have not been registered under the Securities Act are referred to as private placements or restricted securities and are purchased directly from the issuer or in the secondary market. Mutual funds do not typically hold a significant amount of these restricted or other illiquid securities because of the potential for delays on resale and uncertainty in valuation. Limitations on resale may have an adverse effect on the marketability of portfolio securities, and a mutual fund might be unable to dispose of restricted or other illiquid securities promptly or at reasonable prices and might thereby experience difficulty satisfying redemptions within seven days. A mutual fund might also have to register such restricted securities in order to dispose of them, resulting in additional expense and delay. Adverse market conditions could impede such a public offering of securities.

In recent years, however, a large institutional market has developed for certain securities that are not registered under the Securities Act, including repurchase agreements, commercial paper, foreign securities, municipal securities and corporate bonds and notes. Institutional investors depend on an efficient institutional market in which the unregistered security can be readily resold or on an issuer’s ability to honor a demand for repayment. The fact that there are contractual or legal restrictions on resale to the general public or to certain institutions may not be indicative of the liquidity of such investments.

Rule 144A under the Securities Act, adopted by the Securities and Exchange Commission (the SEC) allows a broader institutional trading market for securities otherwise subject to restriction on resale to the general public. Rule 144A establishes a safe harbor from the registration requirements of the Securities Act of resales of certain securities to qualified institutional buyers, which generally creates a more liquid market for securities eligible for resale under Rule 144A than other types of restricted securities.

The Advisor will monitor the liquidity of restricted securities in the Fund’s portfolio under the supervision of the Board of Directors. In reaching liquidity decisions, the Advisor will consider, among other things, the following factors: (1) the frequency of trades and quotes for the security; (2) the number of dealers wishing to purchase or sell the security and the number of other potential purchasers; (3) dealer undertakings to make a market in the security; and (4) the nature of the security and the nature of the marketplace trades (e.g., the time needed to dispose of the security, the method of soliciting offers and the mechanics of the transfer).

 

 

CONVERTIBLE SECURITIES

The Fund may invest in convertible securities. Convertible securities are preferred stocks or debt obligations that are convertible into common stock. They generally offer lower interest or dividend yields than non-convertible securities of similar quality. Convertible securities have both equity and fixed-income risk characteristics. Like all fixed-income securities, the value of convertible securities is susceptible to the risk of market losses attributable to changes in interest rates. Generally, the market value of convertible securities tends to decline as interest rates increase and, conversely, to increase as interest rates decline. However, when the market price of the common stock underlying a convertible security approaches or exceeds the conversion price of the convertible security, the convertible security

 

4


tends to reflect the market price of the underlying common stock. As the market price of the underlying common stock declines, the convertible security, like a fixed-income security, tends to trade increasingly on a yield basis, and thus, may not decline in price to the same extent as the underlying common stock. The markets for convertible securities may be less liquid than markets for common stocks or bonds.

 

 

DEBT SECURITIES

The Fund may invest in debt securities, such as bonds, debentures, government obligations, commercial paper and pass-through instruments. The value of debt securities may fluctuate based on changes in interest rates and the issuer’s financial condition. When interest rates rise or the issuer’s financial condition worsens or is perceived by the market to be at greater risk, the value of debt securities tends to decline.

 

 

DEPOSITARY RECEIPTS

The Fund may invest in sponsored and unsponsored American Depositary Receipts (ADRs) and similar depositary receipts. ADRs, typically issued by a financial institution (a depositary), evidence ownership interests in a security or a pool of securities issued by a foreign company and deposited with the depositary. Prices of ADRs are quoted in U.S. dollars, and ADRs are traded in the U.S. Ownership of ADRs entails similar investment risks to direct ownership of foreign securities traded outside the U.S., including increased market liquidity, currency, political, information and other risks.

 

 

FOREIGN (NON-U.S.) SECURITIES

The Fund may invest in securities of foreign issuers, or sponsored and unsponsored depositary receipts for such securities.

The Fund may be subject to additional investment risks for foreign securities that are different in some respects than those incurred by investments in securities of domestic issuers. Such risks include currency risks, future political and economic developments, the possible imposition of foreign withholding taxes on income payable on the securities, the possible establishment of exchange controls, the possible seizure or nationalization of foreign deposits, or the adoption of other foreign governmental restrictions which might adversely affect the payments on such securities. There can be no assurance that such laws will not become applicable to certain of the Fund’s investments. In addition, there may be less publicly available information about a foreign issuer than about a domestic issuer; brokerage commissions, custodial services and other costs relating to investment in foreign securities markets generally are more expensive than in the U.S.; foreign securities markets may have substantially less volume than U.S. securities’ markets, making many foreign issuers less liquid and more volatile than securities of comparable domestic issuers; and foreign issuers may not be subject to the same accounting, auditing and financial recordkeeping standards and requirements as domestic issuers. Dividend income the Fund receives from foreign securities may not be eligible for the special tax treatment reserved for qualified dividend income. See Taxation.

 

 

MASTER LIMITED PARTNERSHIPS

The Fund may invest in equity securities of master limited partnerships (MLPs), and their affiliates. An MLP generally has two classes of partners, the general partner and the limited partners. The general partner normally controls the MLP through an equity interest plus units that are subordinated to the

 

5


common (publicly traded) units for an initial period and then only converting to common if certain financial tests are met. As a motivation for the general partner to successfully manage the MLP and increase cash flows, the terms of most MLPs typically provide that the general partner receives a larger portion of the net income as distributions reach higher target levels. As cash flow grows, the general partner receives a greater interest in the incremental income compared to the interest of limited partners. The general partner’s incentive compensation typically increases to up to 50% of incremental income. Nevertheless, the aggregate amount distributed to limited partners will increase as MLP distributions reach higher target levels. Given this incentive structure, the general partner has an incentive to streamline operations and undertake acquisitions and growth projects in order to increase distributions to all partners.

MLP common units represent an equity ownership interest in a partnership, providing limited voting rights and entitling the holder to a share of the company’s success through distributions and/or capital appreciation. Unlike stockholders of a corporation, common unit holders do not elect directors annually and generally have the right to vote only on certain significant events, such as mergers, a sale of substantially all of the assets, removal of the general partner or material amendments to the partnership agreement. MLPs are required by their partnership agreements to distribute a large percentage of their current operating earnings. Common unit holders generally have first right to a minimum quarterly distribution prior to distributions to the convertible subordinated unit holders or the general partner (including incentive distributions). Common unit holders typically have arrearage rights if the minimum quarterly distribution is not met. In the event of liquidation, MLP common unit holders have first right to the partnership’s remaining assets after bondholders, other debt holders, and preferred unit holders have been paid in full. MLP common units trade on a national securities exchange or over-the-counter. Some limited liability companies (LLCs) may be treated as MLPs for federal income tax purposes. Similar to MLPs, LLCs typically do not pay federal income tax at the entity level and are required by their operating agreements to distribute a large percentage of their current operating earnings. In contrast to MLPs, LLCs have no general partner and there are no incentives that entitle management or other unit holders to increased percentages of cash distributions as distributions reach higher target levels. In addition, LLC common unit holders typically have voting rights with respect to the LLC, whereas MLP common units have limited voting rights. MLP common units and other equity securities can be affected by macro economic and other factors affecting the stock market in general, expectations of interest rates, investor sentiment towards MLPs or a MLP’s business sector, changes in a particular issuer’s financial condition, or unfavorable or unanticipated poor performance of a particular issuer (in the case of MLPs, generally measured in terms of distributable cash flow). Prices of common units of individual MLPs and other equity securities can also be affected by fundamentals unique to the partnership or company, including earnings power and coverage ratios.

MLP convertible subordinated units are typically issued by MLPs to founders, corporate general partners of MLPs, entities that sell assets to the MLP, and institutional investors, and may be purchased in direct placements from such persons. The purpose of the convertible subordinated units is to increase the likelihood that during the subordination period there will be available cash to be distributed to common unit holders. Convertible subordinated units generally are not entitled to distributions until holders of common units have received specified minimum quarterly distributions, plus any arrearages, and may receive less in distributions upon liquidation. Convertible subordinated unit holders generally are entitled to a minimum quarterly distribution prior to the payment of incentive distributions to the general partner, but are not entitled to arrearage rights. Therefore, they generally entail greater risk than MLP common units. They are generally convertible automatically into

 

6


the senior common units of the same issuer at a one-to-one ratio upon the passage of time or the satisfaction of certain financial tests. These units do not trade on a national exchange or over-the-counter, and there is no active market for convertible subordinated units. The value of a convertible security is a function of its worth if converted into the underlying common units. Convertible subordinated units generally have similar voting rights to MLP common units. Because convertible subordinated units generally convert to common units on a one-to-one ratio, the price that the Fund could be expected to pay upon purchase or to realize upon resale is generally tied to the common unit price less a discount. The size of the discount varies depending on a variety of factors including the likelihood of conversion, and the length of time remaining to conversion, and the size of the block purchased.

MLP I-Shares represent an indirect investment in MLP I-units. I-units are equity securities issued to affiliates of MLPs, typically a limited liability company, that own an interest in and manage the MLP. The issuer has management rights but is not entitled to incentive distributions. The I-Share issuer’s assets consist exclusively of MLP I-units. Distributions by MLPs to I-unit holders are made in the form of additional I-units, generally equal in amount to the cash received by common unit holders of MLPs. Distributions to I-Share holders are made in the form of additional I-Shares, generally equal in amount to the I-units received by the I-Share issuer. The issuer of the I-Share is taxed as a corporation for federal income tax purposes; however, the MLP does not allocate income or loss to the I-Share issuer. Accordingly, investors receive a Form 1099, are not allocated their proportionate share of income of the MLPs and are not subject to state income tax filing obligations. The price of I-Shares and their volatility tend to be correlated to the price of common units, although the price correlation is not precise.

 

 

CANADIAN ROYALTY TRUSTS

The Fund may invest in Canadian royalty trusts. A Canadian royalty trust is a trust whose securities are listed on a Canadian stock exchange and which controls an underlying company whose business is the acquisition, exploitation, production and sale of oil and natural gas. These trusts generally pay out to unitholders the majority of the cash flow that they receive from the production and sale of underlying oil and natural gas reserves. The amount of distributions paid on a Canadian royalty trust’s units will vary from time to time based on production levels, commodity prices, royalty rates and certain expenses, deductions and costs, as well as on the distribution payout ratio policy adopted. As a result of distributing the bulk of their cash flow to unitholders, the ability of a Canadian royalty trust to finance internal growth through exploration is limited. Therefore, Canadian royalty trusts typically grow through acquisition of additional oil and gas properties or producing companies with proven reserves of oil and gas, funded through the issuance of additional equity or, where the trust is able, additional debt.

 

 

SECURITIES LENDING

The Fund may lend portfolio securities to broker/dealers or other institutions. The borrower must maintain with the Fund cash or equivalent collateral equal to at least 100% of the market value of the securities loaned. During the time portfolio securities are on loan, the borrower pays the Fund any dividends or interest paid on the securities. The Fund may invest the collateral and earn additional income or receive an agreed upon amount of interest income from the borrower. Loans are subject to termination at the option of the Fund or the borrower. The Fund may pay reasonable administrative and custodial fees in connection with a loan. The Fund does not have the right to vote securities on loan, but would terminate the loan and regain the right to vote if that were considered important with respect to the investment. The Fund may lose money if a borrower defaults on its obligation to return

 

7


securities and the value of the collateral held by the Fund is insufficient to replace the loaned securities. In addition, the Fund is responsible for any loss that might result from its investment of the borrower’s collateral.

 

 

PREFERRED STOCK, WARRANTS AND RIGHTS

The Fund may invest in preferred stock, warrants and rights. Preferred stocks are securities that represent an ownership interest providing the holder with claims on the issuer’s earnings and assets before common stockholders, but after bond holders and other creditors. Unlike debt securities, the obligations of an issuer of preferred stock, including dividend and other payment obligations, may not typically be accelerated by the holders of such preferred stock on the occurrence of an event of default or other non-compliance by the issuer of the preferred stock. Investments in preferred stock present market and liquidity risks. The value of a preferred stock may be highly sensitive to the economic condition of the issuer, and markets for preferred stock may be less liquid than the market for the issuer’s common stock.

Warrants are options to buy a stated number of shares of common stock at a specified price at any time during the life of the warrant. Rights represent a privilege offered to holders of record of issued securities to subscribe (usually on a pro rata basis) for additional securities of the same class, of a different class or of a different issuer. The holders of warrants and rights have no voting rights, receive no dividends and have no rights with respect to the assets of the issuer. The value of a warrant or right may not necessarily change with the value of the underlying securities. Warrants and rights cease to have value if they are not exercised prior to their expiration date. Investments in warrants and rights are thus speculative and may result in a total loss of the money invested.

 

 

PREFERRED SECURITIES

The Fund may invest in preferred securities issued by utility companies and other types of companies. There are two basic types of preferred securities. The first, sometimes referred to as traditional preferred securities, consists of preferred stock issued by an entity taxable as a corporation. Preferred stocks are considered equity securities. The second is referred to as hybrid-preferred securities. Hybrid-preferred securities are usually issued by a trust or limited partnership and often represent preferred interests in subordinated debt instruments issued by a corporation for whose benefit the trust or partnership was established. Preferred securities pay fixed or floating dividends to investors and have “preference” over common stock in the payment of dividends and the liquidation of a company’s assets. This means that a company must pay dividends on preferred stock before paying dividends on its common stock. Preferred shareholders usually have no right to vote for corporate directors or on other matters.

The hybrid preferred securities in which the Fund intends to invest do not qualify for the dividends received deduction (DRD) under Section 243 of the Internal Revenue Code of 1986, as amended (the Code), and are not expected to provide significant benefits under the rules relating to qualified dividend income. The DRD generally allows corporations to deduct from their income 70% of dividends received. Pursuant to recently enacted legislation, individuals will generally be taxed at long-term capital gain rates on qualified dividend income. Distributions received from the Fund attributable to traditional preferred securities would qualify for the DRD as to any corporate shareholder and would qualify to be taxed at long-term capital gains rates as to any individual shareholder. However, any corporate shareholder who otherwise would qualify for the DRD, and any individual shareholder who otherwise would qualify to be taxed at long-term capital gain rates on qualified dividend income,

 

8


should assume that none of the distributions the shareholder receives from the Fund attributable to hybrid-preferred securities will qualify for the DRD or provide significant benefits under the rules relating to qualified dividend income. Distributions received from the Fund attributable to traditional preferred securities, such as the preferred securities of utility companies, generally would qualify to be taxed at long-term capital gains rates as to any individual shareholder.

 

 

FUTURES CONTRACTS

The Fund may purchase and sell financial futures contracts and options on such contracts. A financial futures contract is an agreement to buy or sell a specific security or financial instrument at a particular price on a stipulated future date. Although some financial futures contracts call for making or taking delivery of the underlying securities or instrument, in most cases these obligations are closed out before the settlement date. The closing of a contractual obligation may be accomplished by purchasing or selling an identical offsetting futures contract. Other financial futures contracts by their terms call for cash settlements.

The Fund may also buy and sell index futures contracts with respect to any stock or bond index traded on a recognized stock exchange or board of trade. An index futures contract is a contract to buy or sell units of an index on a specified future date at a price agreed upon when the contract is made. The stock index futures contract specifies that no delivery of the actual stocks making up the index will take place. Instead, settlement in cash must occur upon the termination of the contract, with the settlement being the difference between the contract price and the actual level of the stock index at the expiration of the contract. In addition, the Fund may enter into foreign currency futures contracts as described below under Foreign Currency Contracts and Currency Hedging Transactions.

At the time the Fund purchases a futures contract, an amount of cash or liquid portfolio securities generally equal to the settlement price less any margin deposit will be designated as segregated at the Fund’s custodian. When writing a futures contract, the Fund will maintain with its custodian similar liquid assets that, when added to the amounts deposited with a futures commission merchant or broker as margin, are equal to the market value of the instruments underlying the contract. Alternatively, the Fund may “cover” its position by owning the instruments underlying the contract (or, in the case of an index futures contract, a portfolio with a volatility substantially similar to that of the index on which the futures contract is based), or holding a call option permitting the Fund to purchase the same futures contract at a price no higher than the price of the contract written by the Fund (or at a higher price if the difference is maintained in liquid assets with the Fund’s custodian).

The Fund will be authorized to use financial futures contracts and related options for hedging and non-hedging purposes, for example to enhance total return or provide market exposure pending the investment of cash balances. The Fund may lose the expected benefit of transactions in financial futures contracts if currency exchange rates or securities prices change in an unanticipated manner. Such unanticipated changes in currency exchange rates or securities prices may also result in poorer overall performance than if the Fund had not entered into any futures transactions.

 

 

OPTIONS ON SECURITIES AND STOCK INDICES

The Fund may write covered call and put options and purchase call and put options on securities or stock indices that are traded on U.S. exchanges.

An option on a security is a contract that gives the purchaser of the option, in return for the premium paid, the right to buy a specified security (in the case of a call option) or to sell a specified security (in

 

9


the case of a put option) from or to the writer of the option at a designated price during the term of the option. An option on a securities index gives the purchaser of the option, in return for the premium paid, the right to receive from the seller cash equal to the difference between the closing price of the index and the exercise price of the option.

The Fund may write a call or put option only if the option is “covered.” A call option on a security written by the Fund is covered if the Fund owns the underlying security covered by the call or has an absolute and immediate right to acquire that security without additional cash consideration (or for additional cash consideration held in a segregated account by its custodian) upon conversion or exchange of other securities held in its portfolio. A call option on a security is also covered if the Fund owns a call option on the same security and in the same principal amount as the call option written where the exercise price of the call option held (a) is equal to or less than the exercise price of the call option written or (b) is greater than the exercise price of the call option written if the difference is maintained by the Fund in cash or liquid portfolio securities in a segregated account with its custodian. A put option on a security written by the Fund is “covered” if the Fund maintains similar liquid assets with a value equal to the exercise price designated as segregated at its custodian, or else owns a put option on the same security and in the same principal amount as the put option written where the exercise price of the put option held is equal to or greater than the exercise price of the put option written. The value of the underlying securities on which options may be written at any one time will not exceed 25% of the total assets of the Fund. The Fund will not purchase put or call options if the aggregate premium paid for such options would exceed 5% of its total assets at the time of purchase.

The Fund will cover call options on stock indices by owning securities whose price changes, in the opinion of the Advisor are expected to be similar to those of the index, or in such other manner as may be in accordance with the rules of the exchange on which the option is traded and applicable laws and regulations. Nevertheless, where the Fund covers a call option on a stock index through ownership of securities, such securities may not match the composition of the index. In that event, the Fund will not be fully covered and could be subject to risk of loss in the event of adverse changes in the value of the index. The Fund will cover put options on stock indices by segregating assets equal to the option’s exercise price, or in such other manner as may be in accordance with the rules of the exchange on which the option is traded and applicable laws and regulations.

The Fund will receive a premium for writing a put or call option, which will increase the Fund’s gross income in the event the option expires unexercised or is closed out at a profit. If the value of a security or an index on which the Fund has written a call option falls or remains the same, the Fund will realize a profit in the form of the premium received (less transaction costs) that could offset all or a portion of any decline in the value of the portfolio securities being hedged. A rise in the value of the underlying security or index, however, exposes the Fund to possible loss or loss of opportunity to realize appreciation in the value of the underlying index or security. By writing a put option, the Fund assumes the risk of a decline in the underlying security or index. To the extent that the price changes of the portfolio securities being hedged correlate with changes in the value of the underlying security or index, writing covered put options on securities or indices will increase the Fund’s losses in the event of a market decline, although such losses will be offset in part by the premium received for writing the option.

The Fund may also purchase put options to hedge its investments against a decline in value. By purchasing a put option, the Fund will seek to offset a decline in the value of the portfolio securities being hedged. If the value of the Fund’s investments does not decline as anticipated, the Fund’s loss will be limited to the premium paid for the option plus related transaction costs. The success of this strategy

 

10


will depend, in part, on the accuracy of the correlation between the changes in value of the underlying security or index and the changes in value of the Fund’s security holdings being hedged.

The Fund may purchase call options on individual securities to hedge against an increase in the price of securities that the Fund anticipates purchasing in the future. Similarly, the Fund may purchase call options to attempt to reduce the risk of missing a broad market advance, or an advance in an industry or market segment, at a time when the Fund holds uninvested cash or short-term debt securities awaiting investment. When purchasing call options, the Fund will bear the risk of losing all or a portion of the premium paid if the value of the underlying security or index does not rise.

There can be no assurance that a liquid market will exist when the Fund seeks to close out an option position. Trading could be interrupted, for example, because of supply and demand imbalances arising from a lack of either buyers or sellers, or the options exchange could suspend trading after the price has risen or fallen more than the maximum specified by the exchange. Although the Fund may be able to offset to some extent any adverse effects of being unable to liquidate an option position, the Fund may experience losses in some cases as a result of such inability.

 

 

FOREIGN CURRENCY CONTRACTS AND CURRENCY HEDGING TRANSACTIONS

In order to hedge against foreign currency exchange rate risks, the Fund may enter into forward foreign currency exchange contracts (forward contracts) and foreign currency futures contracts (foreign currency futures), as well as purchase put or call options on foreign currencies, as described below. The Fund may also conduct its foreign currency exchange transactions on a spot (i.e., cash) basis at the spot rate prevailing in the foreign currency exchange market.

The Fund may enter into forward contracts to attempt to minimize the risk to the Fund from adverse changes in the relationship between the U.S. dollar and foreign currencies. A forward contract is an obligation to purchase or sell a specific currency for an agreed price on a future date which is individually negotiated and privately traded by currency traders and their customers. The Fund may enter into a forward contract, for example, when it enters into a contract for the purchase or sale of a security denominated in a foreign currency or expects to receive a dividend or interest payment on a portfolio holding, in order to “lock in” the U.S. dollar value of the security or payment. In addition, for example, when the Fund believes that a foreign currency may suffer or enjoy a substantial movement against another currency, it may enter into a forward contract to sell an amount of the former foreign currency (or another currency which acts as a proxy for that currency) approximating the value of some or all of the Fund’s portfolio securities denominated in such foreign currency. This second investment practice is generally referred to as “cross-hedging.” Because in connection with the Fund’s foreign currency forward transactions an amount of the Fund’s assets equal to the amount of the Fund’s current commitment under the forward contract will be segregated to be used to pay for the commitment, the Fund will always have cash or other liquid assets available that is sufficient to cover any commitments under these contracts or to limit any potential risk. The segregated assets will be marked-to-market on a daily basis. In addition, the Fund will not enter into such forward contracts if, as a result, the Fund will have more than 15% of the value of its total assets committed to such contracts. To the extent such contracts would be deemed to be illiquid, they will be included in the maximum limitation of 15% of net assets invested in restricted or illiquid securities. Forward contracts may limit potential gain from a positive change in the relationship between the U.S. dollar and foreign currencies. Unanticipated changes in currency prices may result in poorer overall performance for the Fund than if it had not engaged in such contracts.

 

11


The Fund may enter into exchange-traded foreign currency futures for the purchase or sale for future delivery of foreign currencies. U.S. exchange-traded futures are regulated by the Commodity Futures Trading Commission. This investment technique will be used only to hedge against anticipated future changes in exchange rates which otherwise might adversely affect the value of the Fund’s portfolio securities or adversely affect the prices of securities that the Fund intends to purchase at a later date.

The Fund may purchase and write put and call options on foreign currencies for the purpose of protecting against declines in the U.S. dollar value of foreign portfolio securities and against increases in the U.S. dollar cost of foreign securities to be acquired. As is the case with other kinds of options, however, the writing of an option on foreign currency will constitute only a partial hedge, up to the amount of the premium received, and the Fund could be required to purchase or sell foreign currencies at disadvantageous exchange rates, thereby incurring losses. The purchase of an option on foreign currency may constitute an effective hedge against fluctuation in exchange rates although, in the event of rate movements adverse to the Fund’s position, the Fund may forfeit the entire amount of the premium plus related transaction costs.

The successful use of forward contracts and foreign currency futures will usually depend on the Advisor’s ability to forecast currency exchange rate movements correctly. Should exchange rates move in an unexpected manner, the Fund may not achieve the anticipated benefits of forward contracts or foreign currency futures or may realize losses.

 

 

RISKS OF OPTIONS, FUTURES AND FORWARD CONTRACTS

Options, futures and forward contracts are forms of derivatives. The use of options, futures and forward contracts as hedging techniques may not succeed where the price movements of the securities underlying the options, futures and forward contracts do not follow the price movements of the portfolio securities subject to the hedge. Gains on investments in options, futures and forward contracts depend on the portfolio manager’s ability to predict correctly the direction of stock prices, interest rates, currencies and other economic factors, and unanticipated changes may cause poorer overall performance for the Fund than if it had not engaged in such transactions. Where a liquid secondary market for options, futures or forward contracts does not exist, the Fund may not be able to close its position and, in such an event would be unable to control its losses. The loss from investing in certain options, futures and forward contracts is potentially unlimited. The use of forward contracts may limit gains from a positive change in the relationship between the U.S. dollar and foreign currencies.

The Fund’s futures transactions will ordinarily be entered into for traditional hedging purposes. There is, however, no limit on the amount of the Fund’s assets that can be put at risk through the use of futures contracts and the value of the Fund’s futures contracts and options thereon may equal or exceed 100% of the Fund’s total assets. The Fund has no current intention of entering into futures transactions other than for traditional hedging purposes.

The Fund has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act and, therefore, is not subject to registration or regulation as a commodity pool operator under the Act.

 

 

SHORT SALES

The Fund may enter into short sales, provided the dollar amount of short sales at any one time would not exceed 25% of the net assets of the Fund, and the value of securities of any one issuer in which the Fund is short would not exceed the lesser of 2% of the value of the Fund’s net assets or 2% of the

 

12


securities of any class of any issuer. The Fund must designate collateral consisting of cash or liquid portfolio securities with a value equal to the current market value of the shorted securities, which is marked-to-market daily. If the Fund owns an equal amount of such securities or securities convertible into or exchangeable for, without payment of any further consideration, securities of the same issuer as, and equal in amount to, the securities sold short (which sales are commonly referred to as “short sales against the box”), the above requirements are not applicable.

 

 

DISCLOSURE OF PORTFOLIO HOLDINGS

The Fund has adopted policies and procedures with respect to the disclosure of the Fund’s portfolio holdings and ongoing arrangements to make available such information to the general public and to certain persons on a selective basis. Except as noted below, the Fund does not provide portfolio holdings to any third party until they are made available on the Cohen & Steers website at http://www.cohenandsteers.com or through some other means of public dissemination. The Fund’s full portfolio holdings are published semi-annually in reports sent to shareholders and such reports are made available on the Cohen & Steers website, within 60 days after the end of each semi-annual period. These semi-annual holding reports are also filed with the SEC within 60 days of the end of each semi-annual period, as part of Form N-CSR. Quarterly holdings reports are filed with the SEC within 60 days of the end of the first and third quarters, as part of Form N-Q. In addition, the Fund publishes its top 10 holdings quarterly on the Cohen & Steers website, within 30 days after the end of each quarter. One day after the full holdings and top 10 holdings have been published, employees of the Advisor may freely distribute them to third parties. This information remains available until the next quarter’s holdings are posted on the website.

The following are exceptions to the general rule that holdings are not disclosed to third parties until posted to the website:

1. The Fund’s portfolio holdings may be disclosed prior to public release to certain third parties (e.g. rating and ranking organizations, financial printers, pricing information vendors and research firms for legitimate business purposes. Disclosure is conditioned on receipt of a written confidentiality agreement, including a duty not to trade on the basis of the information disclosed. The portfolio holdings may be disclosed to such third parties on an as-needed basis and such disclosure must be authorized by an officer of the Fund. Under these circumstances, the Fund’s portfolio holdings may be disclosed to the following third parties: Automatic Data Processing, Inc., Charles River Systems, Inc., RR Donnelley Financial, Merrill Corporation, Lipper, RiskMetrics Group, Princeton Financial Systems, Inc., Moody’s and S&P.

2. The Fund’s portfolio holdings may also be disclosed between and among the Advisor, Subadvisors, Distributor, sub-administrator, custodian, independent registered public accounting firm and outside legal counsel for legitimate business purposes within the scope of their official duties and responsibilities, subject to their continuing duty of confidentiality and duty not to trade on the basis of any material nonpublic information, as such duties are imposed under the Code of Ethics and the Inside Information Policies and Procedures applicable to the Advisor, Subadvisors, Distributor and administrator, and as imposed on the other parties by agreement or under applicable laws, rules and regulations.

3. The Advisor, Subadvisors, sub-administrator or custodian may, for legitimate business purposes within the scope of their official duties and responsibilities, disclose portfolio holdings to one or more broker-dealers during the course of, or in connection with, normal day-to-day securities transactions with such broker-dealers, subject to the broker-dealer’s legal obligation not to use or disclose material nonpublic information concerning the Fund’s portfolio holdings.

 

13


4. Fund portfolio holdings may also be disclosed to any person as required by applicable laws, rules and regulations. Examples of such required disclosure include, but are not limited to, disclosure (1) in a filing or submission with the SEC or another regulatory body, (2) in connection with a lawsuit or (3) as required by court order.

Neither the Fund, the Advisor nor any other party receives any compensation in connection with the disclosure of the Fund’s portfolio holdings.

The Board of Directors of the Fund exercises continuing oversight of the disclosure of Fund portfolio holdings by (1) having the chief compliance officer of the Fund oversee the implementation and enforcement of the portfolio holdings disclosure policies and procedures, (2) considering reports and recommendations by the chief compliance officer concerning any material compliance matters that may arise in connection with any material portfolio holdings disclosure, and (3) considering whether to approve or ratify any amendment to the portfolio holdings disclosure policies.

The Board of Directors believes that the limited disclosure of the Fund’s portfolio holdings as described above for legitimate business purposes is in the best interest of Fund shareholders.

 

 

INVESTMENT RESTRICTIONS

 

 

The investment objective and the principal investment strategies and investment techniques of the Fund are described in the Prospectus. The Fund has also adopted certain investment restrictions limiting the following activities except as specifically authorized:

The Fund may not:

1. Borrow money, or pledge its assets, except that the Fund may borrow money from banks for temporary or emergency purposes, including the meeting of redemption requests which might require the untimely disposition of securities. Borrowing in the aggregate may not exceed 15%, and borrowing for purposes other than meeting redemptions may not exceed 5%, of the value of the Fund’s total assets (including the amount borrowed) less liabilities (not including the amount borrowed) at the time the borrowing is made. Outstanding borrowings in excess of 5% of the value of the Fund’s total assets will be repaid before any subsequent investments are made;

2. Issue any senior securities, except that collateral arrangements with respect to transactions such as forward contracts, futures contracts, short sales or options, including deposits of initial and variation margin, shall not be considered to be the issuance of a senior security for purposes of this restriction;

3. Act as an underwriter of securities issued by other persons, except insofar as the Fund may be deemed an underwriter in connection with the disposition of securities;

4. Purchase or sell real estate or mortgages on real estate, except that the Fund may invest in securities of companies that deal in real estate or are engaged in the real estate business, including real estate investment trusts, and securities secured by real estate or interests therein and the Fund may hold and sell real estate or mortgages acquired on real estate acquired through default, liquidation or other distributions of an interest in real estate as a result of the Fund’s ownership of such securities;

5. Purchase or sell commodities or commodity futures contracts, except that the Fund may invest in financial futures contracts, options thereon and similar instruments;

 

14


6. Make loans to other persons except through the lending of securities held by it (but not to exceed a value of one-third of total assets), through the use of repurchase agreements, and by the purchase of debt securities, all in accordance with its investment policies;

7. Invest 25% or more of its net assets in securities of issuers in any particular industry, except that the Fund will invest at least 25% of the value of its net assets in securities of companies engaged in the utilities industry and provided that this limitation shall exclude securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities;

8. Purchase restricted or “illiquid” securities, including repurchase agreements maturing in more than seven days, if as a result, more than 15% of the Fund’s net assets would then be invested in such securities (excluding securities which are eligible for resale pursuant to Rule 144A under the Securities Act and determined to be liquid);

9. Acquire or retain securities of any investment company, except that the Fund may (a) acquire securities of investment companies up to the limits permitted by Section 12(d)(1) of the Investment Company Act of 1940, as amended (the 1940 Act), and (b) acquire securities of any investment company as part of a merger, consolidation or similar transaction;

10. Make short sales whereby the dollar amount of short sales at any one time would exceed 25% of the net assets of the Fund; provided the Fund maintains collateral in a segregated account consisting of cash or liquid portfolio securities with a value equal to the current market value of the shorted securities, which is marked-to-market daily. If the Fund owns an equal amount of such securities or securities convertible into or exchangeable for, without payment of any further consideration, securities of the same issuer as, and equal in amount to, the securities sold short (which sales are commonly referred to as “short sales against the box”), such restrictions shall not apply;

11. Invest in puts, calls, straddles, spreads or any combination thereof, except that the Fund may (a) purchase put and call options on securities and securities indexes, and (b) write covered put and call options on securities and securities indexes, provided that (i) the securities underlying such options are within the investment policies of the Fund; (ii) at the time of such investment, the value of the aggregate premiums paid for such securities does not exceed 5% of the Fund’s total assets; and (iii) the value of the underlying securities on which options may be written at any one time does not exceed 25% of total assets;

12. Invest in oil, gas or other mineral exploration programs, development programs or leases, except that the Fund may purchase securities of companies engaging in whole or in part in such activities;

13. Pledge, mortgage or hypothecate its assets except in connection with permitted borrowings; or

14. Purchase securities on margin, except short-term credits as are necessary for the purchase and sale of securities, provided that the deposit or payment of initial or variation margin in connection with futures contracts or related options will not be deemed to be a purchase on margin.

The investment restrictions numbered 1 through 7 in this SAI have been adopted as fundamental policies of the Fund. Under the 1940 Act, a fundamental policy may not be changed without the vote of “a majority of the outstanding voting securities” of the Fund, as defined under the 1940 Act to mean the lesser of (1) 67% or more of the shares present at a meeting of shareholders of the Fund, if the holders of more than 50% of the outstanding shares of the Fund are present or represented by proxy, or (2) more than 50% of the outstanding shares of the Fund. Investment restrictions numbered 8 through 14 above are non-fundamental and may be changed at any time by vote of a majority of the Board of Directors.

 

15


 

 

MANAGEMENT OF THE FUND

 

 

The business and affairs of the Fund are managed under the direction of the Board of Directors. The Directors approve all significant agreements between the Fund and persons or companies furnishing services to it, including the Fund’s agreements with its Advisor and administrator, sub-advisors (“Subadvisors”), sub-administrator, custodian and Transfer Agent. The management of the Fund’s day-to-day operations is delegated to its officers, the Advisor and the Subadvisors, subject always to the investment objective and policies of the Fund and to the general supervision of the Directors.

The Directors and officers of the Fund and their principal occupations during the past five years are set forth below. Each such Director and officer is also a director or officer of each of the other twenty-one funds in the Cohen & Steers Fund Complex.

 

Name, Address and Age*

 

Position(s) Held

with Fund

 

Term of

Office

 

Principal Occupation

During Past 5 Years

(Including Other Directorships Held)

 

Number of Funds

Within Fund Complex

Overseen by Director

(Including the Fund)

 

Length of

Time Served**

Interested Directors***

       

Robert H. Steers

Age: 54

 

Director and

Co-Chairman

 

Until Next

Election of

Directors

  Co-Chairman and Co-Chief Executive Officer of the Advisor since 2003 and its parent, Cohen & Steers, Inc., since 2004. Prior to that, Chairman of the Advisor, President of Cohen & Steers Securities, LLC, the Fund’s Distributor.   22   Since

1991

Martin Cohen†

Age: 58

 

Director and

Co-Chairman

 

Until Next

Election of

Directors

  Co-Chairman and Co-Chief Executive Officer of the Advisor since 2003 and Cohen & Steers, Inc., since 2004. Prior to that, President of the Advisor, Vice President of Cohen & Steers Securities, LLC.   22   Since

1991

Independent Directors

       

Bonnie Cohen†

Age: 64

  Director  

Until Next

Election of

Directors

  Private Consultant. Prior thereto, Undersecretary of State, United States Department of State. Director of Wellsford Real Properties, Inc.   22   Since

2001

George Grossman

Age: 53

  Director  

Until Next

Election of

Directors

  Attorney-at-law.   22   Since

1993

 

16


Name, Address and Age*

 

Position(s) Held

with Fund

 

Term of

Office

 

Principal Occupation

During Past 5 Years

(Including Other Directorships Held)

 

Number of Funds

Within Fund Complex

Overseen by Director

(Including the Fund)

 

Length of

Time Served**

Richard E. Kroon

Age: 64

  Director  

Until Next

Election of

Directors

  Member of Investment Subcommittee, Monmouth University. Retired Chairman and Managing Partner of Sprout Group venture capital funds, then an affiliate of Donaldson, Lufkin and Jenrette Securities Corporation; and former chairman of the National Venture Capital Association.   22   Since

2004

Richard J. Norman

Age: 63

  Director  

Until Next

Election of

Directors

  Private Investor. Executive Board of Directors of Maryland Public Television, Board Member of The Salvation Army. Prior thereto, Investment Representative of Morgan Stanley Dean Witter.   22   Since

2001

Frank K. Ross

Age: 63

  Director  

Until Next

Election of

Directors

  Professor of Accounting, Howard University; Board member of Pepco Holdings, Inc. (electric utility). Formerly, Midatlantic Area Managing Partner for Audit and Risk Advisory Services at KPMG LLP and Managing Partner of its Washington, DC office.   22   Since

2004

Willard H. Smith, Jr

Age: 70

  Director  

Until Next

Election of

Directors

  Board member of Essex Property Trust, Inc., Realty Income Corporation and Crest Net Lease, Inc. Managing Director at Merrill Lynch & Co., Equity Capital Markets Division from 1983 to 1995.   22   Since

1996

C. Edward Ward, Jr.

Age: 60

  Director  

Until Next

Election of

Directors

  Member of the Board of Trustees of Manhattan College, Riverdale, New York. Formerly head of closed-end fund listings for the New York Stock Exchange.   22   Since

2004

 

    * The address for all Directors is 280 Park Avenue, New York, NY 10017.
  ** The length of time served represents the year in which the Director was first elected or appointed to any fund in the Cohen & Steers Fund Complex.
*** “Interested persons,” within the meaning of the 1940 Act, of the Fund on the basis of their affiliation with the Advisor (Interested Directors).
    † Martin Cohen and Bonnie Cohen are unrelated.

 

17


The officers of the Fund (other than Messrs. Cohen and Steers, whose biographies are provided above), their addresses, their ages and their principal occupations for at least the past five years are set forth below.

 

Name, Address and Age*†

  

Position(s) Held

with Fund

  

Principal Occupation During Past Five Years

Joseph M. Harvey

Age: 44

   Vice President since 2004    President of the Advisor since 2003 and Cohen & Steers Inc. since August 2004. Prior to that, Senior Vice President and director of investment research.

Robert Becker

Age: 38

   Vice President
since inception
   Senior Vice President of the Advisor since December 2003, and prior thereto, co-portfolio manager of the Franklin Utilities Fund at Franklin Templeton Investments. He has previously held positions in equity research for the utility sector at Salomon Smith Barney and Scudder, Stevens and Clark.

William F. Scapell

Age: 40

   Vice President
since inception
   Senior Vice President of the Advisor since February 2003. Prior thereto, he was the chief strategist for preferred securities at Merrill Lynch & Co.

Adam M. Derechin

Age: 42

   President and Chief Executive Officer since 2005    Chief Operating Officer of the Advisor since 2003 and Cohen & Steers, Inc. since 2004. Prior to that, Senior Vice President of the Advisor.

Francis C. Poli

Age: 46

   Secretary since 2007    Executive Vice President, Secretary and General Counsel of CSCM and CNS since March 2007. Prior thereto, General Counsel of Allianz Global Investors of America LP.

James Giallanza

Age: 41

   Treasurer since 2006    Senior Vice President of the Advisor since 2006. Prior thereto, Deputy Head of the US Funds Administration and Treasurer & CFO of various mutual funds within the Legg Mason Partners (formerly Citigroup Asset Management) fund complex from August 2004 to September 2006; Director/Controller of the US wholesale business at UBS Global Asset Management (U.S.) from September 2001 to July 2004.

Tina M. Payne

Age: 33

   Assistant Secretary
since 2007
   Vice President and Associate General Counsel of the Advisor since 2007 and prior to that, Vice President and Counsel of PFPC Inc. (mutual fund service provider) from March 2003 to June 2007. Prior thereto, associate of Stradley, Ronon, Stevens & Young LLP (law firm) from September 2001 to March 2003.

Lisa Phelan

Age: 39

   Chief Compliance Officer since 2006    Senior Vice President of the Advisor since 2006. Prior to joining the Advisor in 2004, she was Chief Compliance Officer of Avatar Associates and Overture Asset Managers from 2003 to 2004. Prior to that, she served as First Vice President, Risk Management, for Prudential Securities.

 

* The address for all officers is 280 Park Avenue, New York, NY 10017.
The officers serve until their resignation, removal or retirement.

All of the officers of the Fund listed above are officers or employees of the Advisor and its affiliates. Their affiliations with the Fund and with the Advisor are provided under their principal business occupations.

 

18


The following table provides information concerning the dollar range of the Fund’s securities owned by each Director and the aggregate dollar range of securities owned in the Cohen & Steers Fund Complex.

 

   

Dollar Range of

Securities in the Fund as

of December 31, 2007

 

Aggregate
Dollar Range of
Securities in the
Cohen & Steers

Fund Complex as of

December 31, 2007

Robert H. Steers

  $50,000 - $100,000   over $100,000

Martin Cohen

  None   over $100,000

Bonnie Cohen

  $1 - 10,000   over $100,000

George Grossman

  None   over $100,000

Richard E. Kroon

  None   $50,001 - $100,000

Richard Norman

  None   over $100,000

Frank K. Ross

  None   over $100,000

Willard H. Smith Jr

  None   over $100,000

C. Edward Ward, Jr.

  None   $50,001 - $100,000

Conflicts of Interest. No Director who is not an “interested person” of the Fund (Independent Director) as defined in the 1940 Act, and no immediate family members, own any securities issued by the Advisor, or any person or entity (other than the Fund and other funds in the Cohen & Steers Fund Complex) directly or indirectly controlling, controlled by, or under common control with the Advisor.

 

 

BOARD’S ROLE IN FUND GOVERNANCE

Committees. The Fund’s Board of Directors has four standing committees of the Board, the Audit Committee, the Nominating Committee, the Contract Review Committee and the Governance Committee. Each Committee is composed solely of Independent Directors. The members of the Nominating and Contract Review Committees are Ms. Cohen and Messrs. Kroon, Grossman, Norman, Ross, Smith and Ward. The members of the Governance Committee are Messrs. Norman, Ward and Smith. The members of the Audit Committee are Ms. Cohen and Messrs. Ross, Kroon and Grossman.

The Audit, Nominating, Contract Review and Governance Committees met [four, zero, one and one times], respectively, during the fiscal year ended December 31, 2007.

The function of the Audit Committee is to assist the Board of Directors in its oversight of the Fund’s financial reporting process. The functions of the Nominating Committee are to identify individuals qualified to become members of the Board of Directors in the event that a position is vacated or created, to select the Director nominees for any future meeting of stockholders and to set any necessary standards or qualifications for service on the Board of Directors. The Nominating Committee will consider nominees properly recommended by the Funds’ shareholders. Shareholders who wish

to recommend a nominee should send nominations that include, among other things, biographical data and the qualifications of the proposed nominee to the Fund’s Secretary. The main functions of the Contract Review Committee are to make recommendations to the Board of Directors after reviewing advisory and other contracts that the Fund has with the Advisor and to select third parties to provide evaluative reports and other information regarding the services provided by the Advisor to the Board. The main function of the Governance Committee is to assist the Board in the oversight of appropriate and effective governance of the Fund. The Governance Committee will oversee, among other things, the structure and composition of the Board committees, the size of the Board and the compensation of Independent Directors for service on the Board and any Board committee.

 

19


 

COMPENSATION OF DIRECTORS AND CERTAIN OFFICERS

 

 

The following table sets forth information regarding compensation of the Directors by the Fund for the fiscal year ended December 31, 2007 and the aggregate compensation paid by the Cohen & Steers Fund Complex for the calendar year ended December 31, 2007. Officers of the Fund and Interested Directors do not receive any compensation from the Fund or any other fund in the Cohen & Steers Fund Complex. Each Independent Director is paid an annual retainer of $4,500 per fund, and a fee of $500 per fund for each meeting attended and is reimbursed for the expenses of attendance at such meetings. In addition, the Cohen & Steers Fund Complex pays the chair of the Governance Committee and the Contract Review Committee each an annual fee of $10,000, the Audit Committee chair an annual fee of $15,000, and the lead Independent Director an annual fee of $50,000. In the column headed “Total Compensation From Fund and Cohen & Steers Fund Complex Paid to Directors,” the compensation paid to each Director represents the twenty-one other funds that each Director served in the Cohen & Steers Fund Complex during the fiscal year ended December 31, 2007. The Directors do not receive any pension or retirement benefits from the Cohen & Steers Fund Complex.

 

Name of Person, Position

  

Aggregate
Compensation
From Fund

  

Total
Compensation
From Fund and
Cohen & Steers
Fund Complex
Paid to Directors

Bonnie Cohen, Director

   $ 6,500    $ 138,125

Martin Cohen(2), Director and President

   $ 0    $ 0

George Grossman, Director

   $ 6,972    $ 148,125

Richard E. Kroon(1), Director

   $ 8,856    $ 188,125

Richard J. Norman, Director

   $ 6,972    $ 148,125

Frank K. Ross, Director

   $ 7,206    $ 153,125

Willard H. Smith, Jr., Director

   $ 6,500    $ 138,125

Robert H. Steers(2), Director and Chairman

   $ 0    $ 0

C. Edward Ward, Jr., Director

   $ 6,500    $ 138,125

 

 

(1) Lead Independent Director.
(2) Interested Director.

 

20


 

PRINCIPAL HOLDERS OF SECURITIES

 

 

PRINCIPAL HOLDERS

As of March 14, 2008, the following principal holders owned 5% or more of a Class of shares of the then outstanding shares of capital stock of the Fund as follows:

 

Name and Address

  

Fund

Classes

  

Percentage
of Total
Shares Held

 

Citigroup Global Markets

   A    9.05 %

House Account

   B    7.08 %

700 Red Brook Blvd

   C    11.08 %

Ownings Mills, MD 21117-5184

     
     

Charles Schwab & Co Inc

   A    12.38 %

Reinvest Account

   I    29.99 %

Attn. Mutual Funds

     

101 Montgomery St

     

San Francisco, CA 94104-4151

     
     

Merrill Lynch

   A    48.74 %

For exclusive benefit of our customers

   B    58.07 %

4800 Deer Lake Dr East - 2nd Flr

   C    61.63 %

Jacksonville, FL 32246-6484

     
     

Prudential Investment Management

   I    9.62 %

Services for the benefit of mutual fund clients

     

Attn. PruChoice Unit

     

100 Mulberry St

     

Gateway Center 3 - 11th floor

     

Newark, NJ 07102-4056

     
     

Brown Brothers Harriman & Co. Cust

   I    52.06 %

Attn Inv FDS Global Dist Ctr

     

525 Washington Blvd

     

Jersey City, NJ 07310-1606

     

 

 

MANAGEMENT OWNERSHIP

As of March 14, 2008, Directors and officers of the Fund as a group owned less than 1% of the Fund’s outstanding shares.

 

 

INVESTMENT ADVISORY AND OTHER SERVICES

 

 

THE INVESTMENT ADVISER

Cohen & Steers Capital Management, Inc., located at 280 Park Avenue, New York, New York 10017 is the investment advisor to the Fund. The Advisor is a wholly-owned subsidiary of Cohen & Steers, Inc. (CNS), a publicly traded company whose common stock is listed on the New York Stock Exchange under the symbol “CNS.”

 

21


The Advisor, a registered investment advisor, was formed in 1986 and its current clients include pension plans of leading corporations, endowment funds and investment companies, including each of the open-end and closed-end Cohen & Steers Funds. Martin Cohen and Robert Steers are deemed controlling persons of the Advisor on the basis of their ownership of the stock in CNS.

Pursuant to an advisory agreement (the “Advisory Agreement”), the Advisor furnishes a continuous investment program for the Fund’s portfolio, makes the day-to-day investment decisions for the Fund, executes the purchase and sale orders for the portfolio transactions of the Fund and generally manages the Fund’s investments in accordance with the stated policies of the Fund, subject to the general supervision of the Board of Directors of the Fund.

For its services under the Advisory Agreement, and for paying the ordinary operating expenses of the Fund, the Fund pays the Advisor a monthly management fee at the annual rate of 0.75% of the average daily net asset value of the Fund up to and including $1.5 billion, and 0.65% of the average daily net asset value above $1.5 billion. This fee is allocated among the separate classes based on the classes’ proportionate shares of such average daily net asset value. For the fiscal years ended December 31, 2007, December 31, 2006 and December 31, 2005, the Advisor received $650,044, $895,431, and $981,692, respectively in advisory fees. The Advisor reimbursed the Fund $117,705, $39,731, and $110,788, respectively in expenses for the fiscal years ended December 31, 2007, December 31, 2006 and December 31, 2005, as per the contractual agreement between the Fund and the Advisor. Therefore the net advisory fee paid by the Fund in the fiscal years 2007, 2006, and 2005, amounted to $532,339, $855,700, and $870,904, respectively.

The Advisor also provides the Fund with such personnel as the Fund may from time to time request for the performance of clerical, accounting and other office services, such as coordinating matters with the sub-administrator, the Transfer Agent and the custodian which the Advisor is not required to furnish under the Advisory Agreement. The personnel rendering these services, who may act as officers of the Fund, may be employees of the Advisor or its affiliates. The cost to the Fund of these services must be agreed to by the Fund and is intended to be no higher than the actual cost to the Advisor or its affiliates of providing the services. The Fund may from time to time hire its own employees or contract to have services performed by third parties, and the management of the Fund intends to do so whenever it appears advantageous to the Fund.

In addition, through December 31, 2008, the Advisor has contractually agreed to waive its fee and/or reimburse the Fund for expenses incurred to the extent necessary to maintain the Fund’s total annual operating expenses at 1.50% for the Class A shares and 2.15% for the Class B shares and Class C shares.

 

 

THE SUBADVISORS

The Advisor has entered into Subadvisory Agreements with three of its affiliated registered investment advisors, Cohen & Steers Europe S.A. (CNS Europe), Cohen & Steers Asia Limited (CNS Asia) and Cohen & Steers UK Limited (CNS UK), all of which also are direct or indirect wholly-owned subsidiaries of CNS. References in this SAI to activities and responsibilities of the Advisor may be performed by one or more of the Subadvisors pursuant to the Subadvisory Agreements with the Advisor.

Each of the Subadvisors provides investment advisory and research services in connection with managing the Fund’s investments. CNS Europe is located at 166 Chaussee de la Hulpe, 1170 Brussels, Belgium, CNS UK is located at 21 Sackville Street, 4th floor, London, U.K., and CNS Asia is located at 1202, Citibank Tower, Citibank Plaza, 3 Garden Road, Central, Hong Kong.

 

22


For their services under the Subadvisory Agreement between the Advisor and each Subadvisor, the Advisor (not the Fund) pays CNS Europe, CNS UK and CNS Asia a monthly fee at the annual rate of 6.3%, 6.3% and 16.3%, respectively, of the advisory fees received by the Advisor from the Fund.

 

 

PORTFOLIO MANAGERS

Accounts Managed. The Fund’s portfolio managers (each referred to as a “portfolio manager”) are listed below. Each portfolio manager manages other investment companies and/or investment vehicles and accounts in addition to the Fund. The following tables show, as of December 31, 2007, the number of accounts each portfolio manager managed in each of the listed categories and the total assets in the accounts managed within each category. The portfolio managers do not receive performance-based fees with respect to any of the registered investment companies, other pooled investment vehicles or other accounts that they manage.

Robert Becker

 

    

Number of

Accounts

  

Total Assets

Registered Investment Companies

   4    $ 4,698,016,000

Other Pooled Investment Vehicles

   0    $ 0

Other Accounts

   0    $ 0

Ben Morton

 

    

Number of

Accounts

  

Total Assets

Registered Investment Companies

   1    $ 93,536,000

Other Pooled Investment Vehicles

   0    $ 0

Other Accounts

   0    $ 0

Share Ownership. The following table indicates the dollar range of securities of the Fund owned by the Fund’s portfolio managers as of March 14, 2008:

 

    

Dollar Range of

Securities Owned

Robert Becker

     $1 - $10,000

Ben Morton

   $ 10,001 - $50,000

Conflicts of Interest. It is possible that conflicts of interest may arise in connection with the portfolio managers’ management of the Fund’s investments on the one hand and the investments of other accounts or vehicles for which the portfolio managers are responsible on the other. For example, a portfolio manager may have conflicts of interest in allocating management time, resources and investment opportunities among the Fund and the other accounts or vehicles he advises. In addition, due to differences in the investment strategies or restrictions among the Fund and the other accounts, a portfolio manager may take action with respect to another account that differs from the action taken with respect to the Fund. In some cases, another account managed by a portfolio manager may provide more revenue to the Advisor. While this may appear to create additional conflicts of interest for the portfolio manager in the allocation of management time, resources and investment opportunities, the Advisor strives to ensure that portfolio managers endeavor to exercise their discretion in a manner that is equitable to all interested persons. In this regard, in the absence of specific account-related impediments (such as client-imposed restrictions or lack of available cash), it is the policy of the Advisor to allocate investment ideas pro rata to all accounts with the same primary investment objective.

In addition, certain of the portfolio managers may from time to time manage one or more accounts on behalf of the Advisor and its affiliated companies (the CNS Accounts). Certain securities held and

 

23


traded in the CNS Accounts also may be held and traded in one or more client accounts. It is the policy of the Advisor however not to put the interests of the CNS Accounts ahead of the interests of client accounts. The Advisor may aggregate orders of client accounts with those of the CNS Accounts; however, under no circumstances will preferential treatment be given to the CNS Accounts. For all orders involving the CNS Accounts, purchases or sales will be allocated prior to trade placement, and orders that are only partially filled will be allocated across all accounts in proportion to the shares each account, including the CNS Accounts, was designated to receive prior to trading. As a result, it is expected that the CNS Accounts will receive the same average price as other accounts included in the aggregated order. Shares will not be allocated or re-allocated to the CNS Accounts after trade execution or after the average price is known. In the event so few shares of an order are executed that a pro-rata allocation is not practical, a rotational system of allocation may be used; however, the CNS Accounts will never be part of that rotation or receive shares of a partially filled order other than on a pro-rata basis.

Because certain CNS Accounts are managed with a cash management objective, it is possible that a security will be sold out of the CNS Accounts but continue to be held for one or more client accounts. In situations when this occurs, such security will remain in a client account only if the Applicant, acting in its reasonable judgment and consistent with its fiduciary duties, believes this is appropriate for, and consistent with the objectives and profile of, the client account.

Advisor and Subadvisors’ Compensation Structure. Compensation of the Advisor’s and Subadvisors’ portfolio managers and other investment professionals has three primary components: (1) a base salary, (2) an annual cash bonus and (3) annual stock-based compensation consisting generally of restricted stock units of the Advisor’s parent, CNS. The Advisor’s and Subadvisors’ investment professionals, including the portfolio managers, also receive certain retirement, insurance and other benefits that are broadly available to all of its employees. Compensation of the Advisor’s and Subadvisors’ investment professionals is reviewed primarily on an annual basis.

Method to Determine Compensation. The Advisor and Subadvisors compensate their portfolio managers based primarily on the total return performance of funds and accounts managed by the portfolio manager versus appropriate peer groups or benchmarks. In evaluating the performance of a portfolio manager, primary emphasis is normally placed on one-and three-year performance, with secondary consideration of performance over longer periods of time. Performance is evaluated on a pre-tax and pre-expense basis. In addition to rankings within peer groups of funds on the basis of absolute performance, consideration may also be given to risk-adjusted performance. For portfolio managers responsible for multiple funds and accounts, investment performance is evaluated on an aggregate basis. The Advisor and Subadvisors do not have any funds or accounts with performance-based advisory fees. Portfolio managers are also evaluated on the basis of their success in managing their dedicated team of analysts. Base compensation for portfolio managers of the Advisor and Subadvisors vary in line with the portfolio manager’s seniority and position with the firm.

Salaries, bonuses and stock-based compensation are also influenced by the operating performance of the Advisor, the Subadvisors and CNS. While the annual salaries of the Advisor’s and Subadvisors’ portfolio managers are fixed, cash bonuses and stock based compensation may fluctuate significantly from year to year, based on changes in manager performance and other factors.

 

24


 

ADMINISTRATOR AND SUB-ADMINISTRATOR

The Advisor has also entered into an administration agreement with the Fund (the Administration Agreement) under which the Advisor performs certain administrative functions for the Fund, including (i) providing office space, telephones, office equipment and supplies for the Fund; (ii) paying the compensation of the Fund’s officers for services rendered as such; (iii) authorizing expenditures and approving bills for payment on behalf of the Fund; (iv) supervising preparation of the periodic updating of the Fund’s registration statement, including the Prospectus and SAI, for the purpose of filings with the SEC and state securities administrators and monitoring and maintaining the effectiveness of such filings, as appropriate; (v) supervising preparation of quarterly reports to the Fund’s shareholders, notices of dividends, capital gains distributions and tax credits, and attending to routine correspondence and other communications with individual shareholders; (vi) supervising the daily pricing of the Fund’s investment portfolio and the publication of the net asset value of the Fund’s shares, earnings reports and other financial data; (vii) monitoring relationships with organizations providing services to the Fund, including the custodian, Transfer Agent and printers; (viii) providing trading desk facilities for the Fund; (ix) supervising compliance by the Fund with recordkeeping requirements under the 1940 Act and regulations thereunder, maintaining books and records for the Fund (other than those maintained by the custodian and Transfer Agent) and preparing and filing of tax reports other than the Fund’s income tax returns; and (x) providing executive, clerical and secretarial help needed to carry out these responsibilities. For its services under the Administration Agreement, the Advisor receives a monthly fee from the Fund at the annual rate of .02% of the Fund’s average daily net assets.

In accordance with the terms of the Administration Agreement and with the approval of the Fund’s Board of Directors, the Advisor has caused the Fund to retain State Street Bank and Trust Company (State Street) as sub-administrator under a fund accounting and administration agreement (the Sub-Administration Agreement). Under the Sub-Administration Agreement, State Street has assumed responsibility for performing certain of the foregoing administrative functions, including (i) determining the Fund’s net asset value and preparing these figures for publication; (ii) maintaining certain of the Fund’s books and records that are not maintained by the Advisor, Custodian or Transfer Agent; (iii) preparing financial information for the Fund’s income tax returns, proxy statements, shareholders reports, and SEC filings; and (iv) responding to shareholder inquiries. Under the Administration Agreement, the Advisor remains responsible for monitoring and overseeing the performance by State Street of its obligations to the Fund under its Subadministration Agreement with the Fund, subject to the overall authority of the Fund’s Board of Directors.

Under the terms of the Sub-Administration Agreement, the Fund pays State Street a monthly administration fee, computed on the basis of the aggregate net assets of all the funds in the Cohen & Steers Fund Complex at an annual rate equal to 0.03% of the first $2.2 billion in assets, 0.02% of the next $2.2 billion, and 0.01% of assets in excess of $4.4 billion, with a minimum fee per fund of $120,000. The aggregate fee paid by each of the Fund and the other funds in the Cohen & Steers Fund Complex to State Street is computed by calculating the effective rate for all the funds and multiplying the monthly average net assets of each respective fund in the complex by that effective rate. For those funds with preferred shares outstanding, the monthly average net assets will be adjusted by the monthly average liquidation value of the preferred shares. The Fund is then responsible for its pro rata amount of the aggregate administration fee. State Street also serves as the Fund’s custodian and Transfer Agent. See Custodian and Transfer and Dividend Disbursing Agent, below.

For the fiscal periods ended December 31, 2007, 2006, and 2005, the Advisor received an administration fee from the Fund in the amount of $17,335, $23,878, and $26,178, respectively.

 

25


 

DISTRIBUTOR

Cohen & Steers Securities, LLC, located at 280 Park Avenue, New York, NY 10017 (the Distributor) serves as the distributor of shares of the Fund. For Class A, Class B and Class C, the Distributor receives compensation as described below under Distribution Plan. The Distributor is not obligated to sell any specific amount of shares and will sell shares, as agent for the Fund, on a continuous basis only against orders to purchase shares.

The Distributor is an “affiliated person” of the Advisor, which is itself an affiliated person of the Fund. Those individuals identified above under “Management of the Fund” as Directors or officers of both the Fund and the Distributor are affiliated persons of both entities.

The Distributor receives a portion of the sales charge imposed on the sale, in the case of Class A and Class B shares, respectively or redemption in the case of Class C shares (and in certain cases Class A and Class B shares) of Fund shares. For the last three fiscal years, the Distributor received the following combined commissions on sales of Class A, Class B and Class C shares during the following periods:

 

2007

 

2006

 

2005

$33,410   $49,096   $50,546

 

 

CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT

State Street, which has its principal business at One Lincoln Street, Boston, Massachusetts 02111 has been retained to act as custodian of the Fund’s investments and as the Fund’s transfer and dividend disbursing agent. State Street has retained its wholly-owned subsidiary, Boston Financial Data Services, Inc. (the Transfer Agent), to provide transfer and dividend disbursing agency services to the Fund. Neither State Street nor Boston Financial has any part in deciding the Fund’s investment policies or which securities are to be purchased or sold for the Fund’s portfolio.

 

 

CODE OF ETHICS

The Fund, the Advisor, the Subadvisors and the Distributor have adopted a joint code of ethics pursuant to Rule 17j-1 under the 1940 Act and, with respect to the Advisor and the Subadvisors, Rule 204A-1 of the Investment Advisers Act of 1940, as amended that is designed to ensure that the interests of Fund shareholders come before the interests of those involved in managing the Fund. The code of ethics, among other things, prohibits personnel of the Advisor and the Distributor from investing in REITs and real estate securities, preferred securities and initial public offerings; requires pre-approval for transactions in private placements, and most other securities transactions (including transactions in Cohen & Steers closed-end funds); and requires pre-approval for sales of Cohen & Steers open-end funds. The Fund’s Independent Directors are prohibited from purchasing or selling any security if they know or reasonably should know at the time of the transaction that the security is being considered for purchase or sale by the Fund or is being purchased or sold by the Fund.

 

 

PROXY VOTING

The Fund’s Board of Directors has delegated to the Advisor and Subadvisors the responsibility for voting proxies on behalf of the Fund, and has determined that the Advisor and each of the Subadvisors will vote proxies with respect to those portfolio securities for which they have investment responsibility. The following is a summary of the Proxy Voting Policies and Procedures.

 

26


Voting rights are an important component of corporate governance. The Advisor and each Subadvisor have three overall objectives in exercising voting rights:

A. Responsibility. The Advisor and each Subadvisor shall seek to ensure that there is an effective means in place to hold companies accountable for their actions. While management must be accountable to its board, the board must be accountable to a company’s shareholders. Although accountability can be promoted in a variety of ways, protecting shareholder voting rights may be among our most important tools.

B. Rationalizing Management and Shareholder Concerns. The Advisor and each Subadvisor seeks to ensure that the interests of a company’s management and board are aligned with those of the company’s shareholders. In this respect, compensation must be structured to reward the creation of shareholder value.

C. Shareholder Communication. Since companies are owned by their shareholders, the Advisor and each Subadvisor seeks to ensure that management effectively communicates with its owners about the company’s business operations and financial performance. It is only with effective communication that shareholders will be able to assess the performance of management and to make informed decisions on when to buy, sell or hold a company’s securities.

In exercising voting rights, the Advisor and each Subadvisor follow the general principles set forth below.

1. The ability to exercise a voting right with respect to a security is a valuable right and, therefore, must be viewed as part of the asset itself.

2. In exercising voting rights, the Advisor and each Subadvisor shall engage in a careful evaluation of issues that may materially affect the rights of shareholders and the value of the security.

3. Consistent with general fiduciary principles, the exercise of voting rights shall always be conducted with reasonable care, prudence and diligence.

4. In exercising voting rights on behalf of clients, the Advisor and each Subadvisor shall conduct themselves in the same manner as if they were the constructive owner of the securities.

5. To the extent reasonably possible, the Advisor and each Subadvisor shall participate in each shareholder voting opportunity.

6. Voting rights shall not automatically be exercised in favor of management-supported proposals.

7. The Advisor and each Subadvisor, and its officers and employees shall never accept any item of value in consideration of a favorable proxy voting decision.

Set forth below are general guidelines followed in exercising proxy voting rights:

Prudence. In making a proxy voting decision, appropriate consideration shall be given to all relevant facts and circumstances, including the value of the securities to be voted and the likely effect any vote may have on that value. Since voting rights must be exercised on the basis of an informed judgment, investigation shall be a critical initial step.

Third Party Views. While the Advisor and each Subadvisor may consider the views of third parties, they shall never base a proxy voting decision solely on the opinion of a third party. Rather, decisions shall be based on a reasonable and good faith determination as to how best to maximize shareholder value.

Shareholder Value. Just as the decision whether to purchase or sell a security is a matter of judgment, determining whether a specific proxy resolution will increase the market value of a security is a matter

 

27


of judgment as to which informed parties may differ. In determining how a proxy vote may affect the economic value of a security, the Advisor and each Subadvisor shall consider both short-term and long-term views about a company’s business and prospects, especially in light of the projected holding period on the stock (e.g., the Advisor and each Subadvisor may discount long-term views on a short-term holding).

Set forth below are guidelines as to how specific proxy voting issues shall be analyzed and assessed. While these guidelines will provide a framework for the Advisor and each Subadvisor decision making process, the mechanical application of these guidelines can never address all proxy voting decisions. When new issues arise or old issues present nuances not encountered before, the Advisor and each Subadvisor must be guided by their reasonable judgment to vote in a manner that the Advisor and each Subadvisor deem to be in the best interests of the Fund and its shareholders.

Stock-Based Compensation

Approval of Plans or Plan Amendments. By their nature, compensation plans must be evaluated on a case-by-case basis. As a general matter, compensation plans that align the interests of management and shareholders are always favored. The Advisor and each Subadvisor generally approve compensation plans under the following conditions:

10% Rule. The dilution effect of the newly authorized shares, plus the shares reserved for issuance in connection with all other stock related plans, generally should not exceed 10%.

Exercise Price. The minimum exercise price of stock options should be at least equal to the market price of the stock on the date of grant.

Plan Amendments. Compensation plans should not be materially amended without shareholder approval.

Non-Employee Directors. Awards to non-employee directors should not be subject to management discretion, but rather should be made under non-discretionary grants specified by the terms of the plan.

Repricing/Replacement of Underwater Options. Stock options generally should not be repriced, and never should be re-priced without shareholder approval. In addition, companies should not issue new options, with a lower strike price, to make up for previously issued options that are substantially underwater. The Advisor and each Subadvisor will vote against the election of any slate of directors that, to its knowledge, has authorized a company to re-price or replace underwater options during the most recent year without shareholder approval.

Reload/Evergreen Features. The Advisor and each Subadvisor will generally vote against plans that enable the issuance of reload options and that provide an automatic share replenishment (evergreen) feature.

Measures to Increase Executive Long-Term Stock Ownership. The Advisor and each Subadvisor support measures to increase the long-term stock ownership by a company’s executives. These include requiring senior executives to hold a minimum amount of stock in a company (often expressed as a percentage of annual compensation), requiring stock acquired through option exercise to be held for a certain minimum amount of time and issuing restricted stock awards instead of options. In this respect, the Advisor supports the expensing of option grants because it removes the incentive of a company to issue options in lieu of restricted stock. The Advisor and Subadvisor also support employee stock purchase plans, although the Advisor and Subadvisor generally believe the discounted purchase price should be at least 85% of the current market price.

 

28


Vesting. Restricted stock awards normally should vest over at least a two-year period.

Other Stock Awards. Stock awards other than stock options and restricted stock awards should be granted in lieu of salary or a cash bonus, and the number of shares awarded should be reasonable.

Change of Control Issues

While a takeover attempt can be a significant distraction for the board and management to deal with, the simple fact is that the possibility of a corporate takeover keeps management focused on maximizing shareholder value. As a result, the measures that are designed to prevent or obstruct corporate takeovers are opposed because they can entrench current management. The following are guidelines on change of control issues:

Shareholder Rights Plans. There are arguments for and against shareholder rights plans, also known as “poison pills.” Companies should put their case for rights plans to shareholders. The Advisor and each Subadvisor generally vote against any directors who, to its knowledge, without shareholder approval, have instituted a new poison pill plan, extended an existing plan, or adopted a new plan upon the expiration of an existing plan during the past year.

Golden Parachutes. The Advisor and each Subadvisor oppose the use of accelerated employment contracts that result in cash grants of greater than three times annual compensation (salary and bonus) in the event of termination of employment following a change in control of a company. In general, the guidelines call for voting against “golden parachute” plans because they impede potential takeovers that shareholders should be free to consider. The Advisor and each Subadvisor generally withhold votes at the next shareholder meeting for directors who to its knowledge approved golden parachutes.

Approval of Mergers. The Advisor and each Subadvisor vote against proposals that require a super-majority of shareholders to approve a merger or other significant business combination. The Advisor and each Subadvisor support proposals that seek to lower super-majority voting requirements.

Routine Issues

Director Nominees in a Non-Contested Election. Management proposals on director nominees generally are voted in favor of approval.

Director Nominees in a Contested Election. By definition, this type of board candidate or slate runs for the purpose of seeking a significant change in corporate policy or control. Therefore, the economic impact of the vote in favor of or in opposition to that director or slate must be analyzed using a higher standard normally applied to changes in control. Criteria for evaluating director nominees as a group or individually should include: performance; compensation, corporate governance provisions and takeover activity; criminal activity; attendance at meetings; investment in the company; interlocking directorships; inside, outside and independent directors; whether the chairman and CEO titles are held by the same person; number of other board seats; and other experience. It is impossible to have a general policy regarding director nominees in a contested election.

Board Composition. The Advisor and each Subadvisor support the election of a board that consists of at least a majority of independent directors. The Advisor and each Subadvisor generally withhold support for non-independent directors who serve on a company’s audit, compensation and/or nominating committees. The Advisor and each Subadvisor also generally withhold support for director candidates who have not attended a sufficient number of board or committee meetings to effectively discharge their duties as directors.

Classified Boards. Because a classified board structure prevents shareholders from electing a full slate of directors at annual meetings, the Advisor and each Subadvisor generally votes against classified boards.

 

29


The Advisor and each Subadvisor vote in favor of shareholder proposals to declassify a board of directors unless a company’s charter or governing corporate law allows shareholders, by written consent, to remove a majority of directors at any time, with or without cause.

Barriers to Shareholder Action. The Advisor and each Subadvisor vote to support proposals that lower the barriers to shareholder action. This includes the right of shareholders to call a meeting and the right of shareholders to act by written consent.

Cumulative Voting. Having the ability to cumulate votes for the election of directors—that is, cast more than one vote for a director about whom they feel strongly—generally increases shareholders’ rights to effect change in the management of a corporation. Proposals to adopt cumulative voting therefore are generally supported.

Ratification of Auditors. Votes generally are cast in favor of proposals to ratify an independent auditor, unless there is a reason to believe the auditing firm is no longer performing its required duties or there are exigent circumstances requiring us to vote against the approval of the recommended auditor. For example, the general policy is to vote against an independent auditor that receives more than 50% of its total fees from a company for non-audit services.

Stock Related Items

Increase Additional Common Stock. The guidelines generally call for approval of increases in authorized shares, provided that the increase is not greater than three times the number of shares outstanding and reserved for issuance (including shares reserved for stock-related plans and securities convertible into common stock, but not shares reserved for any poison pill plan).

Votes generally are cast in favor of proposals to authorize additional shares of stock except where the proposal:

1. creates blank check preferred stock; or

2. establishes classes of stock with superior voting rights.

Blank Check Preferred Stock. Votes generally are cast in opposition to management proposals authorizing the creation of new classes of preferred stock with unspecific voting, conversion, distribution and other rights, and management proposals to increase the number of authorized blank check preferred shares. This type of proposal may be approved when assurances are received that (i) the preferred stock was authorized by the board for the use of legitimate capital formation purposes and not for anti-takeover purposes, and (ii) no preferred stock will be issued with voting power that is disproportionate to the economic interests of the preferred stock. These representations should be made either in the proxy statement or in a separate letter from the company.

Preemptive Rights. Votes are cast in favor of shareholder proposals restoring limited preemptive rights.

Dual Class Capitalizations. Because classes of common stock with unequal voting rights limit the rights of certain shareholders, the Advisor and each Subadvisor votes against adoption of a dual or multiple class capitalization structure.

Social Issues

The Advisor and each Subadvisor believe that it is the responsibility of the board and management to run a company on a daily basis. With this in mind, in the absence of unusual circumstances, the Advisor and each Subadvisor do not believe that shareholders should be involved in determining how a company should address broad social and policy issues. As a result, the Advisor and each Subadvisor

 

30


generally vote against these types of proposals, which are generally initiated by shareholders, unless the Advisor and each Subadvisor believe the proposal has significant economic implications.

Other Situations

No set of guidelines can anticipate all situations that may arise. The Advisor and each Subadvisor will be expected to analyze proxy proposals in an effort to gauge the impact of a proposal on the financial prospects of a company, and vote accordingly. These policies are intended to provide guidelines for voting. They are not, however, hard and fast rules because corporate governance issues are so varied.

Proxy Voting Procedures

The Advisor and Subadvisors maintain a record of all voting decisions for the period required by applicable laws. In each case in which the Advisor and Subadvisor vote contrary to the stated policies set forth in these guidelines, the record shall indicate the reason for such a vote.

The Investment Committee of the Advisor and Subadvisors shall have responsibility for voting proxies, under the supervision of the Director of Research and the Chief Information Officer, respectively. The Director of Research’s or the Chief Information Officer’s designee (the Designee) shall be responsible for ensuring that the Investment Committee is aware of all upcoming proxy voting opportunities. The Designee shall ensure that proxy votes are properly recorded and that the requisite information regarding each proxy voting opportunity is maintained. The Advisor’s and each Subadvisor’s General Counsel and Compliance Officer of Human Resources (“Compliance Officer”), respectively, shall have overall responsibility for ensuring that the Advisor and Subadvisors comply with all proxy voting requirements and procedures.

Recordkeeping

The Designee shall be responsible for recording and maintaining the following information with respect to each proxy voted by the Advisor and Subadvisors:

 

·  

Name of the company;

 

·  

Ticker symbol;

 

·  

CUSIP number;

 

·  

Shareholder meeting date;

 

·  

Brief identification of each matter voted upon;

 

·  

Whether the matter was proposed by management or a shareholder;

 

·  

Whether the Advisor or a Subadvisor voted on the matter;

 

·  

If the Advisor or a Subadvisor voted, then how the Advisor or a Subadvisor voted; and

 

·  

Whether the Advisor or a Subadvisor voted with or against management.

The Advisor’s and each Subadvisor’s General Counsel and Compliance Officer, respectively, shall be responsible for maintaining and updating the Policies and Procedures, and for maintaining any records of written client requests for proxy voting information and documents that were prepared by the Advisor or a Subadvisor and were deemed material to making a voting decision or that memorialized the basis for the decision.

The Advisor and Subadvisors shall rely on the SEC’s EDGAR filing system with respect to the requirement to maintain proxy materials regarding client securities.

 

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Conflicts of Interest

There may be situations in which the Advisor and each Subadvisor may face a conflict between its interests and those of its clients or Fund shareholders. Potential conflicts are most likely to fall into three general categories:

Business Relationships. This type of conflict would occur if the Advisor or a Subadvisor or an affiliate has a substantial business relationship with the company or a proponent of a proxy proposal relating to the company (such as an employee group) such that failure to vote in favor of management (or the proponent) could harm the relationship of the Advisor or Subadvisor or its affiliate with the company or proponent. In the context of the Advisor or a Subadvisor, this could occur if an affiliate of the Advisor has a material business relationship with a company that the Advisor or Subadvisor has invested in on behalf of the Fund, and the Advisor or Subadvisor is encouraged to vote in favor of management as an inducement to acquire or maintain the affiliate’s relationship.

Personal Relationships. The Advisor and each Subadvisor or an affiliate could have a personal relationship with other proponents of proxy proposals, participants in proxy contests, corporate directors or director nominees.

Familial Relationships. The Advisor and each Subadvisor or an affiliate could have a familial relationship relating to a company (e.g., spouse or other relative who serves as a director or nominee of a public company).

The next step is to determine whether a conflict is material. A material matter is one that is reasonably likely to be viewed as important by the average shareholder. Materiality will be judged under a two-step approach:

Financial Based Materiality. The Advisor and each Subadvisor presume a conflict to be nonmaterial unless it involves at least $500,000.

Non-Financial Based Materiality. Non-financial based materiality would impact the members of the Advisor and each Subadvisor’s Investment Committee, who are responsible for making proxy voting decisions.

Finally, if a material conflict exists, the Advisor and each Subadvisor shall vote in accordance with the advice of a proxy voting service.

The Advisor and each Subadvisor shall supervise and monitor conflicts of interest in the proxy voting process according to the following process:

Identifying Conflicts. The Advisor and each Subadvisor are responsible for monitoring the relationships of the Advisor’s and Subadvisors’ affiliates for purposes of the Advisor’s and Subadvisor’s Inside Information Policy and Procedures. The General Counsel (or his designee) and Compliance Officer (or his designee) maintain a watch list and a restricted list. The Investment Committee is unaware of the content of the watch list and therefore it is only those companies on the restricted list, which is made known to everyone at the Advisor or a Subadvisor, for which potential concerns might arise. When a company is placed on the restricted list, the General Counsel (or his designee) and Compliance Officer (or his designee) shall promptly inquire of the Designee as to whether there is a pending proxy voting opportunity with respect to that company, and continue to inquire on a weekly basis until such time as the company is no longer included on the restricted list. When there is a proxy voting opportunity with respect to a company that has been placed on the restricted list, the General Counsel and Compliance Officer, as applicable shall inform the Investment Committee that no proxy vote is to be submitted for that company until the general counsel and compliance officer, as applicable complete the conflicts analysis.

 

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For purposes of monitoring personal or familial relationships, the General Counsel (or his designee) and Compliance Officer (or his designee), as applicable shall receive on at least an annual basis from each member of the Investment Committee written disclosure of any personal or familial relationships with public company directors that could raise potential conflict of interest concerns. Investment Committee members also shall agree in writing to advise if (i) there are material changes to any previously furnished information, (ii) a person with whom a personal or familial relationship exists is subsequently nominated as a director or (iii) a personal or familial relationship exists with any proponent of a proxy proposal or a participant in a proxy contest.

Identifying Materiality. The General Counsel and Compliance Officer, as applicable (or their designees) shall be responsible for determining whether a conflict is material. They shall evaluate financial based materiality in terms of both actual and potential fees to be received. Non-financial based items impacting a member of the Investment Committee shall be presumed to be material.

Communication with Investment Committee; Voting of Proxy. If the General Counsel and Compliance Officer determine that the relationship between the Advisor’s or a Subadvisor’s affiliate and a company is financially material, he shall communicate that information to the members of the Investment Committee and instruct them, and the Designee, that the Advisor and Subadvisor will vote its proxy based on the advice of a consulting firm engaged by the Advisor and Subadvisor. Any personal or familial relationship, or any other business relationship, that exists between a company and any member of the Investment Committee shall be presumed to be material, in which case the Advisor or Subadvisor again will vote its proxy based on the advice of a consulting firm engaged by the Advisor or Subadvisor. The fact that a member of the Investment Committee personally owns securities issued by a company will not disqualify the Advisor or Subadvisor from voting common stock issued by that company, since the member’s personal and professional interests will be aligned.

In cases in which the Advisor and Subadvisors will vote a proxy based on the advice of a consulting firm, the General Counsel (or his designee) or Compliance Officer (or his designee) shall be responsible for ensuring that the Designee votes proxies in this manner. The General Counsel or Compliance Officer will maintain a written record of each instance when a conflict arises and how the conflict is resolved (e.g., whether the conflict is judged to be material, the basis on which the materiality is decision is made and how the proxy is voted).

The Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund’s Form N-PX filings are available (i) without charge, upon request, by calling the Fund toll-free at (800) 437-9912 and (ii) on the SEC’s website (http://www.sec.gov).

 

 

PORTFOLIO TRANSACTIONS AND BROKERAGE

 

 

Subject to the supervision of the Directors, decisions to buy and sell securities for the Fund and negotiation of its brokerage commission rates are made by the Advisor. Transactions on U.S. stock exchanges involve the payment by the Fund of negotiated brokerage commissions. There is generally no stated commission in the case of securities traded in the over-the-counter market but the price paid by the Fund usually includes an undisclosed dealer commission or mark-up. In certain instances, the Fund may make purchases of underwritten or agency placed issues at prices that reflect underwriting or placement fees. In accordance with procedures approved by the Board, and subject to their supervision, the Fund may purchase securities in offerings for which an affiliate of the Advisor receives a fee for

 

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serving as placement agent to the issuer. The Advisor will only cause the Fund to engage in these transactions if the Advisor deems such participation to be in the best interests of the Fund. In certain circumstances, regulatory restrictions may prevent the Fund from purchasing securities in an offering in which the Advisor’s affiliate serves as placement agent of the issuer, and the Fund’s inability to participate could be deemed to be to the detriment of the Fund.

In selecting a broker to execute each particular transaction, the Advisor will take the following into consideration: the best net price available; the reliability, integrity and financial condition of the broker; the size and difficulty in executing the order; and the value of the expected contribution of the broker to the investment performance of the Fund on a continuing basis. Accordingly, the cost of the brokerage commissions to the Fund in any transaction may be greater than that available from other brokers if the difference is reasonably justified by other aspects of the portfolio execution services offered.

In addition, the Advisor may receive research services from a broker in connection with initiating portfolio transactions for the Fund. Research services include pricing and market data services. The Advisor shall not be deemed to have acted unlawfully or to have breached any duty solely by reason of its having caused the Fund to pay a broker an amount of commission for effecting a portfolio investment transaction in excess of the amount of commission another broker would have charged solely for execution services for that transaction if the Advisor determines in good faith that the commission was reasonable in relation to the value of the research service provided. Research and investment information is provided by brokers at no cost to the Advisor and is available for the benefit of other accounts advised by the Advisor and its affiliates, and not all of the information will be used in connection with the Fund. While this information may be useful in varying degrees and may tend to reduce the Advisor’s expenses, it is not possible to estimate its value and in the opinion of the Advisor it does not reduce the Advisor’s expenses in a determinable amount. The extent to which the Advisor makes use of statistical, research and other services furnished by brokers is considered by the Advisor in the allocation of brokerage business but there is no formula by which such business is allocated. The Advisor does so in accordance with its judgment of the best interests of the Fund and its shareholders. The Advisor may also take into account payments made by brokers effecting transactions for the Fund to other persons on behalf of the Fund for services provided to it for which it would be obligated to pay (such as custodial and professional fees).

For the fiscal years ended December 31, 2007, December 31, 2006, and December 31, 2005, the Fund paid a total of $243,343, $306,302, and $238,431, respectively, in brokerage commissions. Of such amount, $79,156, $252,796, and $68,733, respectively in brokerage commissions was placed with brokers or dealers who provide research and investment information. The Fund’s portfolio turnover rate for the fiscal year ended December 31, 2007 was 102%.

 

 

ORGANIZATION AND DESCRIPTION OF CAPITAL STOCK

 

 

The Fund was incorporated on January 13, 2004, as a Maryland corporation and is authorized to issue 200,000,000 shares of Common Stock, $.001 par value. The authorized shares of the Fund are currently divided into four classes designated Class A Common Stock, Class B Common Stock, Class C Common Stock and Class I Common Stock. The Fund shall, to the extent permitted by applicable law, have the right, at its option, at any time to redeem shares owned by any shareholder of any class if the Board of Directors has determined that it is in the best interests of the Fund to redeem the shares. The Fund’s shares have no preemptive or conversion rights. Each class of shares represents an interest in the same

 

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assets of the Fund and is identical in all respects except that (i) each class is subject to different sales charges and distribution and service fees, which may affect performance, and (ii) each class has exclusive voting rights on any matter submitted to shareholders that affects only that class, including any matter that relates to that class’ Distribution Plan and has separate voting rights on any matter submitted to shareholders in which the interests of one class differ from the interests of any other class. With the exceptions noted above, each share has equal voting, dividend, distribution and liquidation rights. All shares of the Fund, when duly issued, will be fully paid and non-assessable. Shareholders are entitled to one vote per share. All voting rights for the election of directors are non-cumulative, which means that the holders of more than 50% of the shares can elect 100% of the Directors then nominated for election if they choose to do so and, in such event, the holders of the remaining shares will not be able to elect any Directors. The foregoing description is subject to the provisions contained in the Fund’s Articles of Incorporation and By-Laws.