-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HzXhiU+P9ChEM2HDOZzxm3ggscbB/vnBnVSd9ylaIHy8O+3DxYzyPv8wbbXDM/S5 bPBpsEFbM7RAE5qVJxEBzA== 0000950123-99-007013.txt : 19990809 0000950123-99-007013.hdr.sgml : 19990809 ACCESSION NUMBER: 0000950123-99-007013 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 19990730 EFFECTIVENESS DATE: 19990730 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOGEN FUNDS INC CENTRAL INDEX KEY: 0000906352 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MD FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 033-63560 FILM NUMBER: 99675326 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 811-07762 FILM NUMBER: 99675327 BUSINESS ADDRESS: STREET 1: 1221 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10020 BUSINESS PHONE: 2122785800 MAIL ADDRESS: STREET 1: 1221 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10020 485BPOS 1 SOGEN FUNDS, INC. 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 30, 1999 REGISTRATION NO. 33-63560 811-7762 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-1A ------------------------ REGISTRATION STATEMENT UNDER [X] THE SECURITIES ACT OF 1933 PRE-EFFECTIVE AMENDMENT NO. [ ] POST-EFFECTIVE AMENDMENT NO. 8 [X] AND/OR REGISTRATION STATEMENT UNDER [X] INVESTMENT COMPANY ACT OF 1940 AMENDMENT NO. 10 [X] (CHECK APPROPRIATE BOX OR BOXES.) ------------------------ SOGEN FUNDS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER) ------------------------ 1221 AVENUE OF THE AMERICAS NEW YORK, NY 10020 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (800) 334-2143 ------------------------ JEAN-MARIE EVEILLARD SOGEN FUNDS, INC. 1221 AVENUE OF THE AMERICAS NEW YORK, NY 10020 (NAME AND ADDRESS OF AGENT FOR SERVICE) ------------------------ COPY TO: JACK W. MURPHY, ESQ. DECHERT PRICE & RHOADS 1775 EYE STREET, N.W. WASHINGTON, DC 20006 ------------------------ It is proposed that this filing will become effective (check appropriate box): [ ] Immediately upon filing pursuant to paragraph (b) [X] On August 2, 1999 pursuant to paragraph (b) [ ] 60 days after filing pursuant to paragraph (a)(1) [ ] On (date) pursuant to paragraph (a)(1) [ ] 75 days after filing pursuant to paragraph (a)(2) [ ] on (date) pursuant to paragraph (a)(2) of Rule 485. IF APPROPRIATE, CLICK THE FOLLOWING BOX: [ ] This post-effective amendment designates a new effective date for a previously filed post-effective amendment. Title of Securities Being Registered: SoGen International Fund -- Class A Common Stock SoGen International Fund -- Class I Common Stock SoGen Overseas Fund -- Class A Common Stock SoGen Overseas Fund -- Class I Common Stock SoGen Gold Fund -- Common Stock SoGen Money Fund -- Common Stock - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 - -------------------------------------------------------------------------------- --------------------------------------------------------------------
SoGen International Fund SoGen Overseas Fund SoGen Gold Fund SoGen Money Fund [SoGen LOGO] Prospectus August 1, 1999 -------------------------------------------------------------------- - --------------------------------------------------------------------------------
3 SOGEN INTERNATIONAL FUND SOGEN OVERSEAS FUND SOGEN GOLD FUND SOGEN MONEY FUND ------------------------------------ [SoGen LOGO] 1221 AVENUE OF THE AMERICAS, NEW YORK, NY 10020 (800) 334-2143 ------------------------ Societe Generale Asset Management Corp. Investment Adviser Funds Distributor, Inc. Principal Underwriter ------------------------ The Securities and Exchange Commission has not approved or disapproved of these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense. ------------------------ PROSPECTUS AUGUST 1, 1999 4 TABLE OF CONTENTS
PAGE ---- Overview of the Funds....................................... 1 Investment Objectives, Principal Investment Strategies, and Related Risks............................................ 9 Management of the Company................................... 15 Distribution Arrangements................................... 16 How to Invest............................................... 16 Shareholders' Reference Guide............................... 29 Financial Highlights........................................ 30
------------------------ 5 OVERVIEW OF THE FUNDS Each Fund is a separate, diversified portfolio of SoGen Funds, Inc. (the "Company"), an open-end management investment company, and has its own investment objective which it pursues through separate investment policies. The difference in objectives and policies among the Funds affects the degree of risk and return of each Fund. INVESTMENT OBJECTIVE OF EACH FUND. SoGen International Fund ("International Fund") seeks long-term growth of capital. SoGen Overseas Fund ("Overseas Fund") seeks long-term growth of capital. SoGen Gold Fund ("Gold Fund") seeks growth of capital. SoGen Money Fund ("Money Fund") seeks as high a level of current income as is considered consistent with the preservation of capital and liquidity. PRINCIPAL INVESTMENT STRATEGIES OF EACH FUND. International Fund In seeking to achieve its investment objective, International Fund will normally invest its assets primarily in common stocks (and in securities convertible into common stocks) of United States and foreign companies. International Fund also may invest a portion of its assets in fixed-income securities (including lower-rated securities) of domestic or foreign issuers which, in addition to the income they may provide, appear to offer potential for long-term growth of capital. In selecting investments, International Fund will generally seek companies that have growth potential, financial strength and stability, strong management and fundamental value. Overseas Fund In seeking to achieve its investment objective, Overseas Fund will invest primarily in equity securities of small and medium size non-U.S. companies and may invest in securities traded in mature markets (for example, Japan, Canada and the United Kingdom) and in emerging markets (for example, Mexico and Indonesia). In addition, Overseas Fund may invest a portion of its assets in any other type of security, including debt securities that may be lower-rated securities and certain structured securities. Overseas Fund particularly seeks companies that have growth potential, financial strength and stability, strong management and fundamental value. However, Overseas Fund may invest in companies that do not have all of these characteristics. Gold Fund In seeking to achieve its investment objective, Gold Fund will invest primarily in securities of companies engaged in mining, processing, dealing in or holding gold or other precious metals such as silver, platinum and palladium, both in the United States and in foreign countries. Under normal circumstances, at least 65% of the value of Gold Fund's total assets will be invested in securities (which may include both equity and, to a limited extent, debt securities) consisting of issuers engaged in gold operations, including securities of gold mining finance companies as well as operating companies with long-, medium- or short-life mines. Because of Gold Fund's policy of 1 6 investing primarily in securities of companies engaged in gold mining, processing, dealing in or holding gold and other precious metals, a substantial part of Gold Fund's assets will generally be invested in securities of companies domiciled or operating in one or more foreign countries. Up to 35% of Gold Fund's assets may be invested in equity and, to a limited extent, debt securities unrelated to the precious metals industry where the investment adviser believes such securities are consistent with Gold Fund's investment objective. Money Fund In seeking to achieve its investment objective, Money Fund invests primarily in high-quality, short-term money market instruments, including certificates of deposit, banker's acceptances, commercial paper, U.S. dollar-denominated high quality foreign debt securities and other money market instruments. Money Fund seeks to provide a stable net asset value of $1 per share by investing in securities with a maturity of 397 days or less. To be considered high quality, a security is generally rated in one of the two highest credit-quality categories for short-term securities by a nationally recognized rating service. If unrated, the security must be determined by Money Fund's investment adviser to be of quality equivalent to those in the two highest credit quality categories. PRINCIPAL RISKS OF INVESTING IN THE FUNDS. A Word About Mutual Fund Risks Investment in any mutual fund has inherent risks. There can be no assurance that the investment objectives of a fund will be realized or that a fund's shares will not decline in value. Economic conditions change and stock markets are volatile. If the investment adviser to a fund judges market conditions incorrectly, the fund's portfolio may decline in value. You could lose money by investing in a mutual fund. You should consider your own risk tolerance, investment goals and investment timeline before committing any of your money to an investment in a mutual fund. You should note that an investment in Money Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although Money Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in Money Fund. Main Risks of the Funds Investing in Foreign Securities Foreign securities involve certain inherent risks that are different from those of domestic securities, including political or economic instability of the issuer or the country of issue, changes in foreign currency and exchange rates, and the possibility of adverse changes in investment or exchange control regulations. Currency fluctuations will also affect the net asset value of each Fund irrespective of the performance of the underlying investments in foreign issuers. Typically, there is less publicly available information about a foreign company than about a U.S. company, and foreign companies may be subject to less stringent reserve, auditing and reporting requirements. Many foreign stock markets are not as large or liquid as in the United States; fixed commissions on foreign stock exchanges are generally higher than the negotiated commissions on U.S. exchanges; 2 7 and there is generally less government supervision and regulation of foreign stock exchanges, brokers and companies than in the United States. Foreign governments can also levy confiscatory taxes, expropriate assets and limit repatriations of assets. As a result of these and other factors, foreign securities purchased by a Fund may be subject to greater price fluctuation than securities of U.S. companies. These risks may be more pronounced with respect to investments in emerging markets. Fluctuations in the Price of Gold Gold Fund maintains a policy of concentrating its investments in gold and other precious metal-related issuers. Gold Fund is therefore susceptible to specific political and economic risks affecting the price of gold and other precious metals including changes in U.S. or foreign tax, currency or mining laws, increased environmental costs, international monetary and political policies, economic conditions within an individual country, trade imbalances, and trade or currency restrictions between countries. Interest Rate and Credit Risk The value of Money Fund's investment may fall when interest rates rise. Money market funds like Money Fund are subject to less interest rate risk than other income funds because they invest in debt securities with a remaining maturity not greater than 397 days. The dollar weighted average portfolio maturity of Money Fund will not exceed 90 days. In addition, Money Fund could lose money if the issuer of a debt security is unable to meet its financial obligations or goes bankrupt. Money market funds like Money Fund are subject to less credit risk than other income funds because they invest in short-term debt securities of the highest quality. 3 8 PERFORMANCE HISTORY OF THE FUNDS. The information below provides some indication of the risks of investing in the Funds by showing changes in the Funds' performance from year to year and by showing how the Funds' average annual returns over the periods indicated compare with those of a broad measure of market performance. How each Fund has performed in the past is not necessarily an indication of how it will perform in the future. INTERNATIONAL FUND [CHART] International Fund's total return for the period from January 1, 1999 to June 30, 1999 was 8.55%. Best Quarter: 21.23% (Third Quarter 1998) Worst Quarter: (14.56)% (Fourth Quarter 1997)
AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 1998 --------------------------------- 1 YEAR 5 YEARS 10 YEARS ------ ------- -------- International Fund Class A Shares.............................. (0.26)% 7.76% 10.49% Class I Shares.............................. 3.43%* -- -- MSCI World Index............................... 24.34% 15.68% 10.65%
- --------------- * For period beginning September 8, 1998 (commencement of operations) through December 31, 1998. 4 9 OVERSEAS FUND [CHART] Overseas Fund's total return for the period from January 1, 1999 to June 30, 1999 was 17.07%. Best Quarter: 15.32% (Second Quarter 1999) Worst Quarter: (13.82)% (Third Quarter 1998)
AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 1998 SINCE COMMENCEMENT 1 YEAR 5 YEARS OF OPERATIONS ------- -------- -------------------------- Overseas Fund Class A Shares.................. 2.53% 7.83% 9.11% (since August 31, 1993) Class I Shares.................. -- -- 3.66% (since September 2, 1998) MSCI EAFE Index.................... 20.00% 9.19% 8.30% (since August 31, 1993)
5 10 GOLD FUND [CHART] Gold Fund's total return for the period from January 1, 1999 to June 30, 1999 was (4.84)%. Best Quarter: 14.90% (Third Quarter 1994) Worst Quarter: (22.45)% (Fourth Quarter 1997)
AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 1998 ------------------------------------------ SINCE COMMENCEMENT OF OPERATIONS 1 YEAR 5 YEARS (AUGUST 31, 1993) ------ ------- ----------------- Gold Fund.............................. (18.44)% (10.32)% (7.43)% Financial Times Gold Mines............. (2.73)% (16.41)% (11.87)%
MONEY FUND [CHART] Money Fund's total return for the period from January 1, 1999 to June 30, 1999 was 2.15%. Best Quarter: 1.30% (Second Quarter 1995) Worst Quarter: 0.53% (Fourth Quarter 1993)
AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 1998 ------------------------------------------ SINCE COMMENCEMENT OF OPERATIONS 1 YEAR 5 YEARS (AUGUST 31, 1993) ------ ------- ----------------- Money Fund.............................. 4.86% 4.59% 4.43%
To obtain Money Fund's current 7-day yield, please call 1-800-334-2143. 6 11 FEES AND EXPENSES OF THE FUNDS. This information is designed to help you understand the fees and expenses that you may pay if you buy and hold shares of the Funds.
SOGEN SOGEN SOGEN SOGEN INTERNATIONAL INTERNATIONAL OVERSEAS OVERSEAS SOGEN SOGEN FUND FUND FUND FUND GOLD MONEY CLASS A CLASS I CLASS A CLASS I FUND FUND ------------- ------------- -------- -------- ----- ----- SHAREHOLDER FEES (fees paid directly from your investment) Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of public offering price)............ 3.75% None 3.75% None 3.75% None ==== ==== ==== ==== ==== ==== Redemption Fee*.............. None None None None None None ==== ==== ==== ==== ==== ==== ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets) Management Fees.............. 0.75% 0.75% 0.75% 0.75% 0.75% 0.40% Distribution (12b-1) Fees.... 0.25%** None 0.25%** None 0.25%** None Other Expenses............... 0.23% 0.26% 0.29% 0.28% 0.62% 0.29% ---- ---- ---- ---- ---- ---- Total Fund Operating Expenses................... 1.23% 1.01% 1.29% 1.03% 1.62% 0.69%*** ==== ==== ==== ==== ==== ====
- --------------- * Certain fees may be deducted from proceeds redeemed through a bank wire. ** Some of the Funds have adopted a Rule 12b-1 plan which allows those Funds to pay distribution fees for the sale and distribution of their shares. The maximum level of distribution expenses for those Funds is 0.25% per year of each such Fund's average net assets. Because these fees are paid out of each of those Fund's assets on an on-going basis, the distribution expenses you pay over time will increase the cost of your investment and may total more than the maximum sales charge permissible if imposed entirely as an initial sales charge. *** SGAM Corp., the investment adviser, has voluntarily agreed to limit the total expenses of Money Fund (excluding interest, taxes, brokerage and extraordinary expenses) to an annual rate of 0.75% of the Fund's average net assets until July 31, 2000. After July 31, 2000, the expense limitation may be terminated or revised at any time. 7 12 EXAMPLE This Example is intended to help you compare the cost of investing in the Funds with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in a Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that a Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS ------ ------- ------- -------- International Fund Class A............................... $496 $751 $1,025 $1,808 Class I............................... $103 $322 $ 558 $1,236 Overseas Fund Class A............................... $501 $769 $1,056 $1,873 Class I............................... $105 $328 $ 569 $1,259 Gold Fund................................ $534 $867 $1,223 $2,225 Money Fund............................... $ 70 $221 $ 384 $ 859
8 13 INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES, AND RELATED RISKS INTERNATIONAL FUND INVESTMENT OBJECTIVE AND POLICIES. International Fund's investment objective is to provide long-term growth of capital. In seeking to achieve this objective, International Fund will normally invest its assets primarily in common stocks (and in securities convertible into common stocks) of United States and foreign companies. However, International Fund reserves the right to invest a portion of its assets in fixed-income securities (including lower-rated securities) of domestic or foreign issuers which, in addition to the income they may provide, appear to offer potential for long-term growth of capital. Under normal circumstances, International Fund will invest at least 65% of its assets in securities of foreign companies. When deemed appropriate by International Fund's investment adviser for short-term investment purposes, International Fund may hold a portion of its assets in short-term debt instruments including commercial paper and certificates of deposit. OVERSEAS FUND INVESTMENT OBJECTIVE AND POLICIES. Overseas Fund seeks long-term growth of capital by investing primarily in equity securities of small and medium size non-U.S. companies. Overseas Fund particularly seeks companies that have growth potential, financial strength and stability, strong management and fundamental value. However, Overseas Fund may invest in companies that do not have all of these characteristics. The investment objective of Overseas Fund may be changed by the Company's Board of Directors without shareholder approval. If there were such a change, each shareholder would need to consider whether Overseas Fund would remain an appropriate investment in light of the shareholder's then current financial position and needs. Shareholders will be notified a minimum of sixty days in advance of any change in investment objective. Overseas Fund may invest in securities traded in mature markets (for example, Japan, Canada and the United Kingdom) and in emerging markets (for example, Mexico and Indonesia). A list of the mature and emerging markets in which Overseas Fund may invest is included in the Statement of Additional Information under "Investment Policies, Techniques and Risks -- Foreign Securities." There are no limits on Overseas Fund's geographic asset distribution, but Overseas Fund ordinarily invests in at least three countries outside the United States. The equity securities in which Overseas Fund may invest include common and preferred stocks, warrants or other similar rights, and convertible securities. Overseas Fund may purchase foreign securities in the form of sponsored or unsponsored American Depositary Receipts (ADRs), Global Depositary Receipts (GDRs), and European Depositary Receipts (EDRs) or other securities representing underlying shares of foreign issuers. Overseas Fund may also invest in any other type of security, including up to 20% of its total assets in debt securities. Such debt securities may include lower-rated securities, commonly referred to as "junk bonds" (i.e., securities rated BB or lower by Standard & Poor's Corporation ("S&P") or Ba or lower by Moody's Investors Service, Inc. ("Moody's")), and securities that are not rated. There are no restrictions as to the ratings of debt securities acquired by Overseas Fund or the portion of Overseas Fund's assets that may be invested in debt securities in a particular rating category. Under normal market conditions, 9 14 Overseas Fund invests at least 75% of its total assets, taken at market value, in foreign securities. Overseas Fund may also invest in "structured securities" in which the value is linked to the price of an underlying instrument, such as a currency, commodity, or index. GOLD FUND INVESTMENT OBJECTIVE AND POLICIES. Gold Fund seeks growth of capital by investing primarily in securities of companies engaged in mining, processing, dealing in or holding gold or other precious metals such as silver, platinum and palladium, both in the United States and in foreign countries. The investment objective of Gold Fund may be changed by the Company's Board of Directors without shareholder approval. If there were such a change, each shareholder would need to consider whether Gold Fund would remain an appropriate investment in light of the shareholder's then current financial position and needs. Shareholders will be notified a minimum of sixty days in advance of any change in investment objective. Under normal circumstances, at least 65% of the value of Gold Fund's total assets will be invested in securities (which may include both equity and, to a limited extent, debt securities) consisting of issuers engaged in gold operations, including securities of gold mining finance companies as well as operating companies with long-, medium- or short-life mines. Up to 35% of Gold Fund's assets may be invested in equity and, to a limited extent, debt securities unrelated to the precious metals industry where the investment adviser believes such securities are consistent with Gold Fund's investment objective. Gold Fund's investment adviser is of the belief that a gold-based investment medium will, over the medium term, protect capital from adverse monetary and political developments of a national or international nature and may offer better opportunity for capital growth than many other forms of investment. Investments in gold may provide more of a hedge against currencies with declining buying power, devaluation and inflation than other types of investments. In those periods when investments in gold and gold-related securities appreciate in value relative to the U.S. dollar, Gold Fund's investments may serve to offset erosion in the purchasing power of the U.S. dollar. As indicated, the investment adviser is of the belief that the price of gold and gold-related securities generally are likely to experience significant appreciation in the relatively near future. If, however, this expected bull market in gold-related securities does not develop or if it does but the investment adviser should conclude that any price appreciation that occurs is not likely to continue, the investment adviser expects that it will recommend to the Company's Board of Directors that the Company seek the vote of Gold Fund's shareholders to liquidate Gold Fund. Liquidation would involve the sale of all of Gold Fund's assets, followed by the distribution of the proceeds, less accrued liabilities, to shareholders. The decision to recommend liquidation will not, however, affect the right of Gold Fund shareholders to redeem their shares or to exchange their shares for shares of Money Fund, International Fund or Overseas Fund, in the latter two cases without payment of any additional sales charge. Potential investors should carefully weigh the consequences of investing in, and paying the related sales charge for, a fund that may have a limited term from the date of this Prospectus. 10 15 Gold Fund anticipates that it will normally invest in common stocks and securities convertible into common stocks, such as convertible preferreds, convertible debentures and sponsored or unsponsored American Depositary Receipts (ADRs), Global Depositary Receipts (GDRs) and European Depositary Receipts (EDRs) for those securities, all of which may be traded on a securities exchange or over-the-counter. Gold Fund may invest up to 20% of its total assets in debt securities, including lower-rated securities, commonly referred to as "junk bonds" (i.e., securities rated BB or lower by S&P or Ba or lower by Moody's and securities that are not rated). There are no restrictions as to the ratings of debt securities acquired by Gold Fund or the portion of Gold Fund's assets that may be invested in debt securities in a particular rating category. The market performance of non-convertible debt securities of companies engaged in mining and processing gold can be expected to be comparable to that of other debt obligations of similar quality and generally will not react to fluctuations in the price of gold. An investment in the debt instruments of gold-related companies, therefore, cannot be expected to provide the hedge against inflation that may be provided through investment in equity securities of companies engaged in such activities. Investment in such debt securities can serve to reduce the risk of fluctuation in net asset value of a portfolio composed primarily of gold-related equity investments. Gold Fund may also invest in "structured securities" in which the value is linked to the price of an underlying instrument, such as a currency, commodity, or index. MONEY FUND INVESTMENT OBJECTIVE AND POLICIES. Money Fund seeks as high a level of current income as is considered consistent with the preservation of capital and liquidity. The investment objective of Money Fund may be changed by the Company's Board of Directors without shareholder approval. If there were such a change, each shareholder would need to consider whether Money Fund would remain an appropriate investment in light of the shareholder's then current financial position and needs. Shareholders will be notified a minimum of sixty days in advance of any change in investment objective. In seeking to achieve its investment objective, Money Fund invests exclusively in the following types of U.S. dollar-denominated money market instruments which mature in 397 days or less and which Money Fund's investment adviser has determined to present minimal credit risk: 1. Bank certificates of deposit, time deposits or bankers' acceptances of domestic banks (including their foreign branches) and U.S. and foreign branches of foreign banks having capital surplus and undivided profits in excess of $100 million. 2. Commercial paper rated Prime-1 or Prime-2 by Moody's, A-1 or A-2 by S&P, Duff 2 or higher by Duff & Phelps, Inc. ("Duff"), or F-2 or higher by Fitch Investors Service, Inc. ("Fitch"); commercial paper or notes of issuers with an unsecured debt issue outstanding currently rated Aa or higher by Moody's, AA or higher by S&P, AA or higher by Duff, or AA or higher by Fitch where the obligation is on the same or a higher level of priority and collateralized to the same extent as the rated issue; investments in other corporate obligations such as publicly traded bonds, debentures and notes rated Aa by Moody's, AA by S&P, Duff or Fitch; and other similar securities which, if unrated by Moody's, S&P, Duff or Fitch, are determined by Money Fund's investment adviser, using guidelines approved by the Board of Directors, to be at least equal in quality to one or more of the 11 16 above referenced securities. Notwithstanding the foregoing, Money Fund may invest no more than 5% of its total assets in securities that are accorded the second highest rating by the requisite number of nationally recognized statistical rating organizations. (For a description of the ratings, see "Appendix -- Ratings of Investment Securities" in the Statement of Additional Information.) 3. Obligations of, or guaranteed by, the U.S. or Canadian governments, their agencies or instrumentalities. 4. Repurchase agreements involving obligations that are suitable for investment under the categories set forth above. IMPLEMENTATION OF INVESTMENT STRATEGIES AND RELATED RISKS. In addition to the investment policies described above (and subject to certain restrictions described herein), the Funds may invest in some or all of the following securities and employ some or all of the following investment techniques, some of which may present special risks as described below. A more complete discussion of these securities and investment techniques and their associated risks is contained in the Funds' Statement of Additional Information. Because the Funds' investments will be subject to the market fluctuations and risks inherent in all investments, there can be no assurance that the Funds' stated objectives will be realized. Societe Generale Asset Management Corp. ("SGAM Corp."), the Funds' investment adviser, will seek to minimize these risks through professional management and investment diversification. The value of shares of the International Fund, Overseas Fund and Gold Fund when sold may be higher or lower than when purchased. Although Money Fund is designed to maintain a stable share price of $1.00, there can be no assurance that Money Fund will be able to do so. FOREIGN INVESTMENTS. International Fund, Overseas Fund, and Gold Fund provide investors with an opportunity to place a portion of their assets in a diversified portfolio of foreign securities. In addition, Money Fund may invest in U.S. dollar-denominated high quality foreign debt securities. From time to time, many foreign economies have grown faster than the U.S. economy, and the returns on investments in these countries have exceeded those of similar U.S. investments, although there can be no assurance that these conditions will continue. International investing allows investors to achieve greater diversification and to take advantage of changes in foreign economies and market conditions. Investors should understand and consider carefully the greater risks involved in foreign investing. Investing in foreign securities and other positions which are generally denominated in foreign currencies, and utilization of forward foreign currency exchange contracts (see "Currency Exchange Transactions" below), involve certain risks and opportunities not typically associated with investing in U.S. securities. These include: fluctuations in the rates of exchange between the U.S. dollar and foreign currencies; changes in exchange control regulations or currency restrictions that would prevent cash from being brought back to the United States; less public information with respect to issuers of securities; less governmental supervision of stock exchanges, securities brokers and issuers of securities; different accounting, auditing and financial reporting standards; different settlement periods and trading practices; less liquidity and frequently greater price volatility in 12 17 foreign markets than in the United States; imposition of foreign taxes; and sometimes less advantageous legal, operational and financial protections applicable to foreign sub-custodial arrangements. Investing in countries outside the United States entails political risk. There exists the possibility of restrictions on foreign investors, expropriation of assets, confiscatory taxation, seizure or nationalization of foreign bank deposits or other assets, establishment of exchange controls, or other adverse political or social developments that could affect investment in these nations. Economies in individual markets may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross domestic product, rates of inflation, currency depreciation, capital reinvestment, resource self-sufficiency and balance of payments positions. Many emerging market countries have experienced extremely high rates of inflation for many years. That has had and may continue to have very negative effects on the economies and securities markets of those countries. The securities markets of emerging countries are substantially smaller, less developed, less liquid and more volatile than the securities markets of the United States and other more developed countries. Disclosure and regulatory standards in many respects are less stringent than in the United States. There also may be a lower level of monitoring and regulation in emerging markets of traders, insiders and investors. Enforcement of existing regulations has been extremely limited. Since Money Fund will invest only in U.S. dollar-denominated securities, the return on its shares will not be subject to the risk of adverse changes in the exchange rates between the U.S. dollar and foreign currencies. In addition, Money Fund does not intend to invest in the securities markets of emerging countries. INVESTMENTS IN DEBT SECURITIES. Each of International Fund, Overseas Fund, and Gold Fund may invest up to 20% (up to 100% in the case of International Fund) of its total assets in debt securities that are below investment grade quality. The market value of debt securities generally varies in response to changes in interest rates and the financial condition of each issuer. During periods of declining interest rates, the value of debt securities generally increases. Conversely, during periods of rising interest rates, the value of such securities generally declines. These changes in market value will be reflected in each Fund's net asset value. Securities with the lowest investment grade ratings are considered to be medium grade and to have speculative characteristics. Debt securities that are unrated are considered by the Funds to be equivalent to below investment grade (often referred to as "junk bonds"). On balance, debt securities that are below investment grade are considered predominantly speculative with respect to the issuer's capacity to pay interest and repay principal according to the terms of the obligation and, therefore, carry greater investment risk, including the possibility of default and bankruptcy. They are likely to be less marketable and more adversely affected by economic downturns than higher-quality debt securities. SMALLER COMPANIES. Overseas Fund may invest in smaller companies, which historically have been more volatile in price than larger company securities, especially over the short-term. Among the reasons for the greater price volatility are the less certain growth prospects of smaller companies, the lower degree of liquidity in the markets for such securities and the greater sensitivity of smaller companies to changing economic conditions. In addition, smaller companies 13 18 may lack depth of management, they may be unable to generate funds necessary for growth or development, or they may be developing or marketing new products or services for which markets are not yet established and may never become established. FLUCTUATIONS IN THE PRICE OF GOLD. Due to Gold Fund's policy of concentrating its investments in gold and other precious metal-related issuers, investment in Gold Fund's shares involves special considerations, including changes in U.S. or foreign tax, currency or mining laws and increased environmental costs. The price of gold has been subject to dramatic downward and upward price movements over short periods of time and may be affected by unpredictable international monetary and political policies such as currency devaluations or revaluations, economic conditions within an individual country, trade imbalances, or trade or currency restrictions between countries. The price of gold, in turn, is likely to affect the market prices of securities of companies mining or processing gold, and accordingly, the value of Gold Fund's investments in such securities may also be affected. Gold-related investments as a group have performed less well than the stock market in general during periods when the U.S. dollar is strong, inflation is low and general economic conditions are stable. CURRENCY EXCHANGE TRANSACTIONS. Each Fund may engage in currency exchange transactions to hedge against losses in the U.S. dollar value of its portfolio securities resulting from possible variations in exchange rates and not for speculation. A currency exchange transaction may be conducted either on a spot (i.e., cash) basis at the spot rate for purchasing or selling currency prevailing in the foreign exchange market or through a forward currency exchange contract ("forward contract"). A forward contract is an agreement to purchase or sell a specified currency at a specified future date (or within a specified time period) and price set at the time of the contract. Forward contracts are usually entered into with banks and broker/dealers, are not exchange-traded and are usually for less than one year, but may be renewed. Currency exchange transactions may involve currencies of the different countries in which a Fund may invest. Although forward contracts may be used to protect a Fund from adverse currency movements, the use of such hedges may reduce or eliminate potential profits from currency fluctuations that are otherwise in a Fund's favor. TEMPORARY STRATEGIES; CASH RESERVES. Overseas Fund and Gold Fund each has the flexibility to respond promptly to changes in market and economic conditions. In the interest of preserving shareholders' capital, SGAM Corp. may employ a temporary defensive investment strategy if it determines such a strategy to be warranted. Pursuant to such a defensive strategy, a Fund temporarily may hold cash (U.S. dollars, foreign currencies, multinational currency units) and/or invest up to 100% of its assets in high quality debt securities or money market instruments of U.S. or foreign issuers. Most or all of a Fund's investments may be made in the United States and denominated in U.S. dollars. In such a case, the Funds may not be able to pursue, and may not achieve, their respective investment objectives. It is impossible to predict whether, when or for how long a Fund will employ defensive strategies. In addition, pending investment of proceeds from new sales of shares or to meet ordinary daily cash needs, a Fund temporarily may hold cash (U.S. dollars, foreign currencies or multinational currency units) and may invest any portion of its assets in money market instruments. 14 19 YEAR 2000. Like other investment companies, financial and business organizations and individuals around the world, the Funds could be adversely affected if the computer systems used by SGAM Corp. or other service providers to the Funds do not properly process and calculate date-related information and data from and after January 1, 2000. This is commonly known as the "Year 2000 Problem." SGAM Corp. is taking steps that it believes are reasonably designed to address the Year 2000 Problem with respect to computer systems that it uses and is taking steps to obtain reasonable assurances that comparable steps are being taken by the Funds' other service providers. At this time, however, there can be no assurance that these steps will be sufficient to avoid any adverse impact to the Funds. The Year 2000 Problem is expected to impact corporations, which may include issuers of portfolio securities held by the Funds, to varying degrees based upon various factors, including, but not limited to, the corporation's industry sector and degree of technological sophistication. In this regard, the Funds occasionally invest in issuers located in emerging markets. Such issuers may not be applying the same diligence to the Year 2000 Problem as are issuers in more mature markets. The Funds are unable to predict what impact, if any, the Year 2000 Problem will have on the issuers of securities held in the Funds' portfolios. MANAGEMENT OF THE COMPANY INVESTMENT ADVISER. The Company's portfolios are managed by SGAM Corp., 1221 Avenue of the Americas, New York, New York 10020. SGAM Corp. is a registered investment adviser which is indirectly owned by Societe Generale, one of France's largest banks. Jean-Marie Eveillard, President and Director of the Company, is primarily responsible for the day-to-day management of the Company's investment portfolios, and has acted in such capacity since the inception of each of Overseas Fund, Gold Fund, and Money Fund and, with respect to International Fund, since prior to 1980. Mr. Eveillard has been a Director and President or Executive Vice President of SGAM Corp. since 1990. SGAM Corp. furnishes investment advice to the Funds consistent with each Fund's stated investment objective and policies. SGAM Corp. also furnishes the Company with office space and certain facilities and services required for its business and pays any compensation and expenses of the officers of the Company. Advisory fees are paid monthly, except that the advisory fees for International Fund are paid quarterly. The annual fee rates for International Fund, Overseas Fund and Gold Fund are higher than the rate of fees paid by most United States mutual funds that invest in domestic equity securities. The Company believes, however, that the advisory fee rates are not higher than the rate of fees paid by most other mutual funds that invest significantly in foreign equity securities. For the fiscal year ended March 31, 1999, International Fund paid advisory fees equal to 1% of the first $25 million and 0.75% of in excess of $25 million of its average daily net asset value and Overseas Fund, Gold Fund, and Money Fund paid advisory fees equal to 0.75%, 0.75% and 0.40%, respectively, of their average daily net asset values. 15 20 DISTRIBUTION ARRANGEMENTS The Funds' shares are offered, in states and countries in which such offer is lawful, to investors either through selected securities dealers or directly by the Funds' principal underwriter, Funds Distributor, Inc. ("FDI"), 1221 Avenue of the Americas, 8th Floor, New York, New York 10020. FDI, which replaced SG Cowen Securities Corporation as the Funds' principal underwriter on July 1, 1999, is a registered broker-dealer. Class A shares of International Fund and Overseas Fund and shares of Gold Fund are subject to a sales charge that is described under "How to Invest -- How to Purchase Shares -- Public Offering Price," below. International Fund (on behalf of its Class A shares), Overseas Fund (on behalf of its Class A shares) and Gold Fund have each adopted a Distribution Plan and Agreement (the "Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Plan, each Fund may pay FDI a quarterly distribution related fee at an annual rate not to exceed 0.25% of the average daily net asset value attributable to the participating class of shares. FDI is obligated to use the amounts received under the Plan for payments to qualifying dealers (not to exceed 0.25% of the average daily net asset value of accounts of participating classes originated by such dealers) for their assistance in the distribution of a Fund's shares and the provision of shareholder services and for other expenses such as advertising costs and the payment for the printing and distribution of prospectuses to prospective investors. FDI bears distribution expenses to the extent they are not covered by payments under the Plan. Any distribution expenses incurred by FDI in any fiscal year of a Fund that are not reimbursed from payments under the Plan accrued in such fiscal year will not be carried over for payment under the Plan in any subsequent year. Class I shares and shares of Money Fund do not participate in the Plan and are not charged with any portion of the payments made under the Plan. Because the fees are paid out of Fund assets on an on-going basis, over time these fees will increase the cost of an investment in the Funds and may ultimately cost more than paying other types of sales charges. HOW TO INVEST NET ASSET VALUE. The price at which shares of each Fund are purchased or redeemed is equal to the net asset value per share of a Fund as determined on the effective day of a purchase or redemption. Each Fund's net asset value per share is computed as of the close of trading on the New York Stock Exchange ("NYSE") on each day during which the NYSE is open for trading. The net asset value per share is computed by dividing the total current value of the assets of a Fund, less its liabilities, by the total number of shares outstanding at the time of such computation. Because each Fund may invest in securities that are listed on foreign exchanges that may trade on weekends or other days when those Funds do not price their shares, those Funds' share value may change on days when shareholders will not be able to purchase or redeem those Funds' shares. 16 21 In the case of International Fund, Overseas Fund, and Gold Fund, portfolio securities are valued primarily based on market quotations where available. Short-term investments maturing in sixty days or less are valued at cost plus interest earned, which approximates value. In the case of Money Fund, portfolio securities are valued at their amortized cost, which approximates market value, subject to guidelines and procedures established by the Board of Directors in accordance with applicable SEC regulations. Securities for which current market quotations are not readily available are valued at fair value as determined in good faith by the Board of Directors of the Company. HOW TO PURCHASE SHARES. The minimum initial and subsequent investment amounts generally required for each Fund and each class of shares within a Fund are listed in the table below:
MINIMUM INITIAL INVESTMENT AMOUNT NEEDED TO MINIMUM SUBSEQUENT OPEN AN ACCOUNT INVESTMENT AMOUNT ------------------ ------------------ International Fund Class A...................................... $1,000 $100 Class I*..................................... $1 million $100 Overseas Fund Class A...................................... $1,000 $100 Class I*..................................... $1 million $100 Gold Fund....................................... $1,000 $100 Money Fund...................................... $10,000 $100
- ------------ * The current net asset value of a shareholder's account in any class of any of the SoGen Funds may qualify for purposes of meeting the initial minimum investment amount for International Fund Class I shares and Overseas Fund Class I shares. The Automatic Investment Program and Automatic Exchange Program each require a minimum initial investment of $100 per Fund (see "Shareholder Services") and an account with Money Fund that is opened by an exchange (see "Shareholder Services -- Exchange Privilege") requires a minimum investment of $1,000. "Starter" checks and third-party checks will not be accepted for purposes of opening a new account. The Funds reserve the right to waive the initial minimum investment amounts, at the discretion of the principal underwriter, for certain investors, including Fund employees and directors and officers of SGAM Corp. A Fund's shares may be purchased through authorized dealers or through FDI, the Funds' principal underwriter. A completed and signed application is required for the initial account opened with the Funds. If there is no application accompanying this Prospectus, please call (800) 334-2143 to obtain one. The principal underwriter reserves the right to limit the purchase of a Fund's shares when it is in the best interest of the Fund. PURCHASES THROUGH DEALERS. Investors may purchase a Fund's shares through selected securities dealers with whom FDI has sales agreements. A prospective investor may obtain additional New Account Applications from 17 22 such authorized dealers. For a list of authorized dealers, please contact FDI at (212) 278-5800. Authorized dealers and financial service firms may charge the investor a transaction fee in addition to the applicable sales load. Authorized dealers and financial service firms are responsible for promptly transmitting purchase orders to FDI, the Funds' principal underwriter. PURCHASES THROUGH FDI. Shares of a Fund may be purchased through FDI by mailing a check made payable to The SoGen Funds along with the completed New Account Application to The SoGen Funds, c/o DST, P.O. Box 219324, Kansas City, MO 64121-9258. Shares may also be purchased through FDI by Automated Clearing House ("ACH") transfer or by bank wire. Please call (800) 334-2143 for procedures as to how to establish and administer the ACH purchase option, and please call prior to wiring any funds. See "Shareholders' Reference Guide" on page 29 for wiring instructions. PUBLIC OFFERING PRICE. The public offering price at which transactions will be effected will be equal to the net asset value per share plus, in the case of International Fund Class A shares, Overseas Fund Class A shares and Gold Fund shares, a sales charge as described below. The net asset value per share of Money Fund is expected to remain constant at $1.00 per share. Orders for shares received by DST prior to the close of trading on the NYSE, or orders received by dealers prior to such time and transmitted to FDI prior to the latter's close of business, will be effected based on the net asset value determined as of the close of trading on the NYSE that day. Net asset value per share is calculated as set forth under "Net Asset Value," below. Class I shares and shares of the Money Fund are not subject to sales charges. The sales charges currently in effect are as follows:
SALES CHARGE DEALER SALES CHARGE EXPRESSED AS DISCOUNT AS AS PERCENT OF APPROXIMATE PERCENT OF PUBLIC PERCENT OF NET PUBLIC OFFERING PRICE AMOUNT INVESTED OFFERING PRICE -------------- --------------- -------------- INVESTMENT AMOUNTS Less than $25,000......................... 3.75% 3.90% 3.35% $25,000 or more but less than $50,000..... 3.25% 3.35% 2.85% $50,000 or more but less than $100,000.... 2.75% 2.83% 2.35% $100,000 or more but less than $500,000... 2.00% 2.04% 1.60% $500,000 or more but less than $1,000,000............................. 1.00% 1.01% 0.80% $1,000,000 and over....................... 0.00% 0.00% 0.00%
Sales charges applicable to persons residing in countries outside the United States may vary from those listed above. FDI reallows discounts to selected dealers with whom it has sales agreements and is entitled to retain the balance over the dealer discounts. FDI may from time to time reallow the entire sales load, and may provide additional promotional incentives, to dealers selling a Fund's shares. Such additional promotional incentive may include financial assistance in connection with pre-approved 18 23 conferences or seminars, sales or training programs for invited sales personnel and payment for travel expenses for such seminars or training programs. In some instances the entire reallowance or incentives may be offered only to certain dealers which have sold or may sell significant amounts of a Fund's shares. Authorized dealers to whom substantially the entire sales charge is reallowed may be deemed to be underwriters as that term is defined under the Securities Act of 1933. SGAM Corp. may from time to time pay a concession to a dealer which employs a registered representative whose client invests in a Fund. Such amount will be paid from the resources of SGAM Corp. REDUCING THE SALES CHARGE. As shown in the table above, the size of the total investment in a Fund will affect the sales charge. Described below are several methods to reduce the applicable sales charge. In order to obtain a reduction in the sales charge, an investor must notify, at the time of purchase, his dealer, FDI or DST of the applicability of one of the following: AGGREGATION. The investment schedule above applies to the total amount being invested by any "person," which term includes an individual, his spouse, parents and children; a trustee or other fiduciary purchasing for a single trust, estate or single fiduciary account (including a pension, profit-sharing or other employee benefit trust created pursuant to a plan qualified under the Internal Revenue Code) although more than one beneficiary is involved; or any U.S. bank or investment adviser purchasing shares for its investment advisory clients or customers. Any such person purchasing for several accounts at the same time, may combine these investments into a single transaction in order to reduce the applicable sales charge. Individual accounts and corporate/partnership accounts may not be aggregated for purposes of reducing the sales charge. CONCURRENT PURCHASES. The sales load associated with an investment may be reduced by combining concurrent purchases of International Fund Class A shares, Overseas Fund Class A shares and Gold Fund shares and shares of other funds advised by SGAM Corp., offered subsequent to the date of this Prospectus subject to a sales load ("SoGen Load Funds"), by any "person," as described above in "Aggregation." The concurrent purchase discount does not apply to purchases of International Fund Class I shares, Overseas Fund Class I shares and Money Fund shares. The applicable sales load will be based on the total dollar amount of the investment in shares of two or more SoGen Load Funds that are concurrently purchased. RIGHTS OF ACCUMULATION. A Fund's shares may be purchased at a reduced sales charge by a "person" (as defined above in "Aggregation") who is already a shareholder by taking into account not only the amount then being invested, but also the current net asset value of the shares of any SoGen Load Fund already held by such person. If the current net asset value of the qualifying shares already held plus the net asset value of the current purchase exceeds a point in the schedule of sales charges at which the charge is reduced to a lower percentage, the entire current purchase is eligible for the reduced charge. To be entitled to a reduced sales charge pursuant to the Rights of Accumulation, the investor must notify his dealer, FDI or DST at the time of purchase that he wishes to take advantage of such entitlement, and give the numbers of his accounts, and those accounts held in the name of his spouse, parents or children and the specific relationship of each such other person to the investor. 19 24 LETTER OF INTENTION. A "person" (as defined above in "Aggregation") may also qualify for a reduced sales charge by completing the Letter of Intention (the "Letter") contained in the New Account Application or a form for this purpose which may be obtained by contacting the Funds at (800) 334-2143. This enables the investor to aggregate purchases of shares of any SoGen Load Fund during a thirteen-month period for purposes of calculating the applicable sales charge. Applicable shares of any SoGen Load Fund currently owned by the investor will be credited as purchases toward the completion of the Letter at the greater of their net asset value on the date the Letter is executed or their cost. No retroactive adjustment will be made if purchases exceed the amount indicated in the Letter. For each investment made, the investor must notify his dealer, FDI or DST that a Letter is on file along with all account numbers associated with the Letter. The Letter is not a binding obligation on the investor. However, 5% of the amount specified in the Letter will be held in escrow, and if the investor's purchases are less than the amount specified, the investor will be requested to remit to the appropriate Fund an amount equal to the difference between the sales charge paid and the sales charge applicable to the aggregate purchases actually made. If not remitted within 20 days after written request, an appropriate number of escrowed shares will be redeemed in order to realize the difference. However, the sales charge applicable to the investment will in no event be higher than if the shareholder had not submitted a Letter. Either the shareholder or the Company may cancel the arrangement at will. SALES AT NET ASSET VALUE. International Fund Class A shares, Overseas Fund Class A shares and Gold Fund shares may be sold at net asset value (i.e., without a sales charge) (i) to registered representatives or employees of authorized dealers, the spouse, parents or children of such person, or to any trust, pension, profit-sharing or other benefit plan for only such persons, (ii) to banks or trust companies or their affiliates when the bank, trust company or affiliate is authorized to make investment decisions on behalf of a client, (iii) to investment advisers 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, (iv) to clients of such investment advisers and financial planners who place trades for their own accounts if the accounts are linked to the master account of such investment adviser or financial planner on the books and records of the broker, agent, investment adviser or financial institution, and (v) to retirement and deferred compensation plans and trusts used to fund those plans, including, but not limited to, those defined in Section 401(a), 403(b) or 457 of the Internal Revenue Code and "rabbi trusts." Investors may be charged a fee if they effect transactions in Fund shares through a broker or agent. Shares of the Funds may also be sold at net asset value to current officers, directors and employees of the Company, SGAM Corp., U.S. branches and affiliates of Societe Generale, employees of certain firms providing services to the Funds (such as the custodian and the shareholder servicing agent), and to the spouse, parents and children of any such person, or to any trust, pension, profit-sharing or other benefit plan for only such persons. A Fund may also issue shares at net asset value in connection with the acquisition of, or merger or consolidation with, another investment company. The sales of shares at net asset value described in this section are made upon the written assurance of the purchaser that the purchase is made for investment purposes and that the shares will not be resold except through redemption. Such notice must be given to FDI or DST at the time of purchase on a form for this purpose as available from the Funds. 20 25 REINSTATEMENT PRIVILEGE. In addition, an investor is entitled to a one-time per account privilege to reinvest in any SoGen Load Fund the proceeds of a full or partial redemption of shares from a SoGen Load Fund at the then applicable net asset value without payment of a sales charge. To exercise this privilege the investor must submit to FDI or DST, within 60 calendar days after the redemption, both a written request for reinstatement and a check or bank wire in an amount not exceeding the redemption proceeds. An investor may also transfer an investment in any SoGen Load Fund to an IRA or other tax qualified retirement plan account in any SoGen Load Fund without payment of a sales charge. Such a transfer involves a redemption of a Fund's shares and a reinvestment of the proceeds and, hence, may involve a taxable transaction for income tax purposes. Reinstatement will not prevent recognition of a gain realized on the redemption, but a loss may be disallowed for tax purposes. The amount of gain or loss resulting from the redemption may be affected by exercise of the reinstatement privilege if the shares redeemed were held for 90 days or less, or if a shareholder reinvests in the Funds within 30 days. BOOKSHARE ACCOUNT PLAN. To facilitate the handling of transactions with shareholders, the Funds use a bookshare account plan for shareholder accounts. DST, as the Funds' transfer agent, automatically opens and maintains an account for each of the Funds' shareholders directly registered with a Fund. All interests in shares, full and fractional (rounded to three decimal places), are reflected in a shareholder's book account. After any purchase, a confirmation is mailed to the shareholder indicating the amount of full and fractional shares purchased, the price per share and a statement of his account. Stock certificates will not be issued for the shares of any Fund. CONDITIONS OF PURCHASE. The Company and FDI each reserves the right to refuse any order for purchase of shares and to cancel any purchase due to nonpayment. Share purchases are not binding on the Company or FDI until they are confirmed by DST as paid. All payments must be made in U.S. dollars, and all checks must be drawn on U.S. banks. No cash will be accepted. As a condition of this offering, if an investor's purchase is canceled due to nonpayment or because his check or ACH transfer does not clear, the investor will be responsible for any loss a Fund may incur as a result thereof. HOW TO REDEEM SHARES. Shareholders have the right to redeem all or any part of their shares of a Fund for cash at the net asset value next computed after receipt of the redemption request in proper form as further described below. Neither the Company nor FDI currently charges a fee or commission upon the redemption of a Fund's shares. Shareholders may redeem either through authorized dealers, through FDI or by telephone. Shares held in the dealer's "street name" must be redeemed through the dealer. 21 26 REDEMPTIONS THROUGH DEALERS. Shareholders who have an account with an authorized dealer may submit a redemption request to such dealer. Authorized dealers are responsible for promptly transmitting redemption requests to FDI. Dealers may impose a charge for handling redemption transactions placed through them and may have particular requirements concerning redemptions. Accordingly, shareholders should contact their authorized dealers for more information. REDEMPTIONS THROUGH FDI. Shareholders may redeem their Fund shares through FDI by transmitting written redemption instructions to The SoGen Funds, c/o DST, P.O. Box 219324, Kansas City, MO 64121-9258. REDEMPTIONS BY TELEPHONE. Unless contrary instructions are elected in the New Account Application or Special Options Form, shareholders may redeem a Fund's shares in non-retirement accounts by telephone by calling DST at (800) 334-2143. Telephone redemption requests received prior to the close of business on the NYSE on any Fund business day will be effected on that day. Such requests received after the close of business on the NYSE will be effected on the following business day. Shareholders may not make a redemption request by telephone if the proceeds are to be wired to a bank account number or mailed to an address other than the one previously designated by the shareholder. Such requests must be in writing accompanied by a signature guarantee. Shareholders who would like to change wiring instructions should send written notification, signed by all of the account's registered shareholders and accompanied by a signature guarantee, to DST at the address listed above. (See "Redemption Price" below for acceptable guarantors. See "Receiving Redemption Proceeds" below for change of address procedures.) There is a $100,000 maximum on telephone redemptions by check. There is no limitation on redemptions by ACH transfer or by bank wire; however, a fee will be deducted from proceeds sent by bank wire. Telephone redemption privileges may be difficult to implement and may be modified or suspended without notice during periods of drastic economic or market changes. DST has instituted procedures it believes are reasonably designed to ensure that redemption instructions communicated by telephone are genuine, and could be liable for losses caused by unauthorized or fraudulent instructions in the absence of such procedures. DST will require a form of personal identification prior to acting upon telephone instructions, will provide a written confirmation of such transaction and will record a shareholder's instructions. TELEPHONE REDEMPTION PRIVILEGES MAY BE MODIFIED OR TERMINATED AT ANY TIME BY THE COMPANY UPON WRITTEN NOTICE TO SHAREHOLDERS. REDEMPTION PRICE. Orders to redeem shares received in proper form by DST prior to the close of trading on the NYSE, or redemption orders received by dealers prior to such time and transmitted to FDI prior to the latter's close of business, will be effected at the net asset value determined as of the close of trading on the NYSE that day. 22 27 Redemption requests must meet all the following requirements to be considered in proper form: 1. Written and signed instructions from the registered owner(s) must be received by DST (except for telephone redemptions). 2. A letter or a stock power signed by the registered owner(s) must be signature guaranteed by an acceptable guarantor. A guarantee is required for such redemptions to be paid by check greater than $100,000, or where the redemption proceeds are to be sent to an address other than the address of record, to a person other than the registered shareholder(s) for the account or to a bank account number other than the one previously designated by the shareholder. A signature guarantee is not required for any amount redeemed by ACH transfer or bank wire when a pre-designated bank has been identified by the shareholder. Any one of the following guarantors is normally acceptable: (a) a commercial bank or trust company; (b) a member firm of a domestic stock exchange; (c) a foreign branch of any institution included in paragraph (a) or (b); (d) a national securities exchange; or (e) a savings association. Guarantees from a notary public are not acceptable. 3. All certificates, if any, to be redeemed must be received by DST in negotiable form. 4. In the case of shares held of record in the name of a corporation, trust, fiduciary or partnership, evidence of authority to sign and a stock power with signature(s) guaranteed must be received by DST. RECEIVING REDEMPTION PROCEEDS. Payment of the redemption price will generally be made within three business days after receipt of the redemption request in proper form, but the Company may suspend the right of redemption and postpone payment during any period when (i) trading on the NYSE is restricted or such exchange is closed, other than customary weekend and holiday closings, (ii) the Securities and Exchange Commission ("SEC") has by order permitted such suspension, or (iii) an emergency, as defined by the rules of the SEC, exists, making disposal of portfolio securities or determination of a Fund's net asset value not reasonably practicable. The Funds will not mail redemption proceeds for any shares until checks or ACH transfers received in payment for such shares have cleared, which may take up to fifteen days. Investors who wish to avoid any such delay should purchase shares by bank wire. In addition, any change of address will require a fifteen-day holding period before the proceeds of any redemption will be released to the new address. Shareholders will have the ability to use the exchange privilege during this holding period. Shareholders can avoid the fifteen-day holding period if either the redemption or change of address request is signed by all registered owners and is accompanied by a signature guarantee for each owner. The fifteen-day holding period can also be avoided by establishing bank wire redemption instructions through the New Account Application or Special Options Form. Redemption proceeds are normally paid in the form of a check. Proceeds can also be sent to a shareholder's bank account by ACH transfer or by bank wire when a pre-designated bank has been 23 28 identified in the New Account Application or Special Options Form. Proceeds sent by ACH transfer should generally be credited to a shareholder's account on the second business day after the redemption. Proceeds sent by bank wire should be credited on the business day following the redemption; however, a fee will be deducted from such proceeds. The amount realized on a redemption may be more or less than the investor's cost, depending on the net asset value of a Fund's shares at the time of such redemption, and a gain or loss may be recognized for tax purposes. MINIMUM ACCOUNT SIZE. Due to the relatively high cost of maintaining smaller accounts, the Company reserves the right to redeem shares in any account if the value of that account drops below $500, except accounts for shareholders currently participating in the Automatic Investment program described below. The Company also reserves the right to redeem shares in any Class I account if the value of that Class I account drops below $100,000. A shareholder will be allowed at least 60 days to make an additional investment to bring his account value to the stated minimum before the redemption is processed. SHAREHOLDER SERVICES. The Company offers the following shareholder services: EXCHANGE PRIVILEGE. Shareholders or authorized parties are entitled to exchange some or all of their International Fund Class A shares, Overseas Fund Class A shares or Gold Fund shares for shares of the Money Fund and shares of other SoGen Load Funds. Shareholders or authorized parties are also entitled to exchange some or all of their International Fund Class I shares or Overseas Fund Class I shares for Class I shares of any other SoGen Fund and shares of the Money Fund. Such shares exchanged will be valued at their respective net asset values computed as of the close of trading on the NYSE on the day the exchange is requested. An exchange of shares pursuant to the exchange privilege may result in a shareholder realizing a taxable gain or loss for income tax purposes. The exchange privilege is available to shareholders residing in any state in which the shares of the Fund being acquired may legally be sold. There is no charge for the exchange privilege. Any exchange, however, must meet the applicable minimum investment amount for the Fund into which the exchange is being made as set forth on page 17. Upon exchanges of shares of Money Fund for shares of any SoGen Load Fund, payment of the applicable sales load must be made, unless a sales load has already been paid on such shares. For additional information concerning exchanges, or to effect exchanges, contact the Funds at (800) 334-2143. Exchanges by telephone may be difficult to implement in times of drastic economic or market changes. The exchange privilege should not be used to take advantage of short-term swings in the securities markets. The Company reserves the right to limit or terminate the exchange privilege as to any shareholder who makes exchanges more than four times a year (other than through the Automatic Exchange Program or a similar periodic investment program). The Company can 24 29 modify or revoke the exchange privilege for all shareholders upon 60 days' prior written notice or without notice in times of drastic economic or market changes. CONVERSION. Class A shares of International Fund or Overseas Fund having an aggregate value not less than $1 million may be converted into Class I shares of the same Fund upon the election of the shareholder. Such conversions shall take place at net asset value, shall not result in the realization of income or gain for Federal income tax purposes and shall be tax free to shareholders. For additional information concerning conversions, or to effect a conversion, contact your dealer, financial intermediary or the Funds at (800) 334-2143. AUTOMATIC EXCHANGE PROGRAM. Shareholders who wish to automatically exchange shares of one Fund for another on a monthly basis can do so by means of the Automatic Exchange Program. The minimum exchange amount is $100. If the balance in the account the shareholder is exchanging from falls below the designated automatic exchange amount, all remaining shares will be exchanged and the program will be discontinued. All conditions with respect to exchange transactions apply as discussed in "Exchange Privilege" above. TELEPHONE PRIVILEGES. Unless contrary instructions are elected in the New Account Application or Special Options Form, the account will be entitled to make telephone purchases, redemptions, exchanges, conversions and account maintenance requests. Neither the Company nor its agents will be liable for following instructions communicated by telephone that are reasonably believed to be genuine. Reasonable procedures will be employed on behalf of each Fund to confirm that the instructions are genuine. Such procedures include, but are not limited to, written confirmation of telephone transactions, tape recording telephone conversations and requiring specific personal information prior to acting upon telephone instructions. Any owner(s), trustee(s) or other fiduciary entity as indicated in the account registration, investment professional of record and/or other parties that can provide specific personal information will be allowed to initiate any of the above referenced telephone transactions. Personal information may include a combination of the following items: (i) the fund and account number, (ii) the account registration, (iii) the social security or tax identification number on the account, (iv) the address of record, (v) designated bank account information and any other information deemed appropriate to allow access to the account. Certain retirement accounts are not eligible for all the telephone privileges referenced above. Please call (800) 334-2143 with all inquiries pertaining to telephone privileges. AUTOMATIC INVESTMENT PROGRAM. Investors may make regular semi-monthly, monthly or quarterly investments of $100 (or more) in shares of any SoGen Load Fund or Money Fund, automatically from a checking or savings account. Upon written authorization, DST will debit the investor's designated bank account as 25 30 indicated and use the proceeds to purchase shares of a Fund for the investor's account. Because approval by the investor's bank is required, establishment of an Automatic Investment Program may require at least thirty days. To establish an Automatic Investment Program, indication must be made on the New Account Application or Special Options Form, and a check (minimum $100 if a new account is being established), savings account deposit slip or savings account statement must be forwarded to DST. Shares purchased through Automatic Investment Program payments are subject to the redemption restrictions for recent purchases described in "How to Redeem Shares." The Company may amend or cease to offer the Automatic Investment Program at any time. DIVIDEND DIRECTION PLAN. Shareholders in a Fund may elect to have income dividends and capital gains distributions on their Fund shares invested without the payment of any sales charge in shares of Money Fund or shares of any SoGen Load Fund in which they have an existing account and maintain a minimum account balance. All dividends and distributions so invested are taxable for U.S. federal income tax purposes as though received in cash. For further information about this privilege, contact DST in writing at the appropriate address listed the Shareholder's Reference Guide or by telephone at (800) 334-2143. SYSTEMATIC WITHDRAWAL PLAN. A shareholder who owns shares of a Fund with a current net asset value of $10,000 or more may use those shares to establish a Systematic Withdrawal Plan to receive a monthly or quarterly check in a stated amount of not less than $50 on or about the 25th day of the month. Dividends and distributions on shares invested under a Systematic Withdrawal Plan may not be taken in cash but must be reinvested, which will be done at net asset value. A Fund's shares will be redeemed as necessary to meet withdrawal payments. Withdrawals in excess of dividends and distributions will reduce and may deplete the invested principal and may result in a gain or loss for tax purposes. Purchases of additional shares made concurrently with withdrawals of shares are undesirable because of sales charges incurred when purchases are made. Accordingly, a shareholder may not maintain a Systematic Withdrawal Plan while simultaneously making regular purchases. New accounts established by check, after the 10th of the month, will not begin distribution until the following month due to the fifteen-day hold on check purchases. The Company may amend or cease to offer the Systematic Withdrawal Plan at any time. RETIREMENT PLANS. The Company offers a variety of retirement plans such as IRA, Roth-IRA, SEP, SIMPLE IRA and Education IRA and 403(b)(7) plans which allow investors to save for retirement and defer taxes on investment income, if any. The tax benefits of these plans may not be available for all persons. Investors should consult their tax advisers regarding their eligibility. Retirement plans may purchase International Fund Class I shares or Overseas Fund Class I shares provided they meet the minimum initial investment amount of $1 million or the plan has or expects to have 100 or more participants and will be domiciled in an omnibus or pooled account within each Fund and will not require a Fund to pay any type of administrative fee or payment per participant account to any third party. 26 31 For appropriate applications, please contact the Funds at (800) 334-2143. SHAREHOLDER STATEMENTS AND REPORTS. A confirmation statement is mailed to shareholders for each transaction in a Fund, and a summary statement and tax reporting are provided at year end. Each Fund also provides shareholders with an annual Prospectus as well as annual and semi-annual reports. ACCOUNT MAINTENANCE. Shareholders will often need to update certain account information during their relationship with the Funds. Please call (800) 334-2143 with any questions concerning the legal requirements necessary to execute your request. INQUIRIES. For information on how to buy shares of a Fund or to request additional literature about any of the Funds, or for account information, shareholder services or information on how to redeem shares, please refer to the Shareholders' Reference Guide, below. DIVIDENDS, DISTRIBUTIONS AND TAXES DIVIDENDS AND DISTRIBUTIONS. Money Fund intends to declare a dividend of its net investment income daily and pays such dividends monthly. Money Fund intends to distribute net realized capital gains, if any, at least annually. It is the policy of International Fund, Overseas Fund, and Gold Fund to make periodic distributions but no less than annual distributions of net investment income and net realized capital gains, if any. Unless a shareholder otherwise elects, income dividends and capital gains distributions will be reinvested in additional shares of the Funds at net asset value per share calculated as of the payment date. The Funds pay both income dividends and capital gains distributions on a per share basis. As a result, on the ex-dividend date of such payment, the net asset value per share of International Fund, Overseas Fund, and Gold Fund will be reduced by the amount of such payment. The net asset value per share of Money Fund is expected, however, to remain constant at $1.00 per share. TAXES GENERALLY. Each Fund intends to qualify and has elected to be treated as a "regulated investment company" under Subchapter M of the Internal Revenue Code of 1986, as amended. To qualify, a Fund must meet certain income, diversification and distribution requirements. As a regulated investment company, a Fund generally will not be subject to federal income or excise taxes on income and capital gains distributed to shareholders within applicable time limits, although foreign source income received by a Fund may be subject to foreign withholding taxes. Shareholders normally will be taxed on the dividends and capital gains distributions they receive from a Fund whether received in additional shares or cash. Dividend payments representing 27 32 taxable net investment income and any net short-term capital gains will be taxable as ordinary income. If any portion of the income of a Fund consists of dividends received from U.S. corporations, a portion of the dividends paid by such Fund may qualify for the dividends-received deduction available to corporate shareholders. Distributions of any net long-term capital gain designated as capital gains distributions will be taxable to individual shareholders at a maximum 20% capital gains rates, regardless of how long they have held their shares. A distribution will be treated as paid on December 31 of the current calendar year if it is declared by a Fund in October, November or December with a record date in such a month and paid by the Fund during January of the following calendar year. Upon the sale or other disposition of shares of a Fund, a shareholder may realize a capital gain or loss which may be eligible for reduced federal tax rates, generally depending upon the shareholder's holding period for the shares. Information regarding the tax status of income dividends and capital gains distributions will be sent to shareholders by January 31 of each year. BACKUP WITHHOLDING. The Funds are generally required by the Internal Revenue Service ("IRS") to withhold 31% of the amount of taxable interest, dividends, and capital gains distributions and (except in the case of the Money Fund) redemption proceeds paid to shareholders who have not complied with IRS regulations. In order to avoid this withholding requirement, a U.S. shareholder must certify on the New Account Application or on a separate Form W-9 that their Social Security or Taxpayer Identification Number is correct and that he is exempt from, or is not currently subject to, backup withholding. A non-U.S. shareholder is generally subject to this 31% withholding on interest, dividends and capital gains distributions and redemption proceeds unless he certifies on the New Account Application or on a separate Form W-8 that he is a non-resident alien and is not engaged in a trade or business in the United States regarding his Fund shares. NON-UNITED STATES SHAREHOLDERS. Under current U.S. law, the Funds will ordinarily be obligated to withhold 30% of any ordinary income dividend payments to non-U.S. shareholders unless a tax treaty exists between the U.S. and the shareholder's country of residence which provides for withholding on a different basis. Non-U.S. shareholders may incur a U.S. estate tax liability if they die owning a Fund's shares. Such shareholders should consult their tax advisers as to the tax liability they may incur to the United States as a result of owning a Fund's shares and as to the availability of any credits against taxes payable to their own countries for taxes paid to the United States. The foregoing information is intended for general information only. Fund distributions also may be subject to state, local and foreign taxes. Shareholders should consult their own tax advisers regarding the particular tax consequences of an investment in a Fund. 28 33 SHAREHOLDERS' REFERENCE GUIDE TELEPHONE NUMBERS: For Fund Information, Account & Shareholder Services: (800) 334-2143 MAIL: Direct Purchases, Redemptions and Account Updates: The SoGen Funds c/o DST Systems, Inc. P.O. Box 219324 Kansas City, MO 64121-9258 OVERNIGHT MAIL: The SoGen Funds c/o DST Systems, Inc. 330 West 9th Street Kansas City, MO 64105-1807 WIRING INSTRUCTIONS: You may wire funds to us at: IFTC, Kansas City, MO ABA Routing #101003621 Account #7534116 Reference: (Your account number and fund name)
To avoid rejection of your wire, you must inform us of your intention to wire funds to us and include the fund name and your SoGen Fund account number in the reference section of the wire. AUTOMATIC INVESTMENT PROGRAM -- Regular investments of at least $100, automatically from your checking or savings account. Because approval by your bank is required, establishment of an Automatic Investment Program may require at least thirty days. See the "Automatic Investment Program" section of the Prospectus for details. SYSTEMATIC WITHDRAWAL PLAN -- With a minimum net asset value of $10,000, you may establish a Systematic Withdrawal Plan to receive not less than $50 on a monthly or quarterly basis. Distributions are made on or about the 25th of the month. New accounts established by check after the 10th of the month will not begin distribution until the following month due to the fifteen-day hold on check purchases. Please see the "Systematic Withdrawal Plan" section of the Prospectus for details. INVESTMENT THROUGH ACH -- A convenient way for you to invest or redeem shares in your SoGen Fund account. Please contact your financial representatives or the Funds directly at (800) 334-2143 for further information. 29 34 FINANCIAL HIGHLIGHTS The Financial Highlights Table is intended to help you understand the Funds' financial performance for the past five years. 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 a Fund (assuming reinvestment of all dividends and distributions). This information has been audited by KPMG LLP, whose report, along with the Funds' financial statements, are incorporated in the Statement of Additional Information, which is available upon request.
SOGEN INTERNATIONAL FUND -------------------------------------------------------- FOR THE YEAR ENDED MARCH 31, -------------------------------------------------------- 1999 1998 1997 1996 1995 ------------------- ------ ------ ------ ------ CLASS A CLASS I(T) ------- --------- SELECTED PER SHARE DATA Net asset value, beginning of year............................ $27.42 $24.59 $26.68 $26.09 $23.20 $23.32 ------ ------ ------ ------ ------ ------ Income (loss) from investment operations: Net investment income........... 0.63 0.30 1.47 1.03 1.06 0.10 Net realized and unrealized gains (losses) on investments.................. (2.73) (1.47) 2.10 1.39 3.37 0.49 ------ ------ ------ ------ ------ ------ Total from investment operations................ (2.10) (1.17) 3.57 2.42 4.43 0.59 ------ ------ ------ ------ ------ ------ Less Distributions: Dividends from net investment income....................... (0.83) -- (1.36) (1.09) (0.81) (0.15) Distributions from capital gains........................ (1.59) (0.52) (1.47) (0.74) (0.73) (0.56) ------ ------ ------ ------ ------ ------ Total distributions.......... (2.42) (0.52) (2.83) (1.83) (1.54) (0.71) ------ ------ ------ ------ ------ ------ Net asset value, end of year...... $22.90 $22.90 $27.42 $26.68 $26.09 $23.20 ====== ====== ====== ====== ====== ====== Total Return*................ (7.95%) (4.72%)# 14.35% 9.48% 19.57% 2.63% RATIOS/SUPPLEMENTAL DATA Net assets, end of year (millions)...................... $2,063 $ 12 $4,035 $3,908 $3,033 $1,922 Ratios of operating expenses to average net assets(P)........... 1.23% 1.01%++ 1.18% 1.21% 1.25% 1.26% Ratios of net investment income to average net assets(P)........... 2.75% 3.04%++ 2.80% 3.08% 3.71% 2.70% Portfolio turnover rate........... 9.89% 9.89% 20.63% 12.85% 9.64% 12.96%
- --------------- (T) July 31, 1998 inception date for Class I shares. # Not annualized. ++ Annualized. * Does not give effect to deduction of the sales load. (P) The ratio of operating expenses to average net assets for the year ended March 31, 1999 would have been 1.24% for Class A shares and 1.63% for Class I shares and for the years ended March 31, 1998, 1997, 1996 and 1995 would have been 1.19%, 1.21%, 1.25% and 1.26% respectively, without the effect of earnings credits. The ratio of net investment income to average net assets for the year ended March 31, 1999 would have been 2.74% for Class A shares and 2.42% for Class I shares and for the years ended March 31, 1998, 1997, 1996 and 1995 would have been 2.80%, 3.08%, 3.71% and 2.70% respectively, without the effect of earnings credits. 30 35
SOGEN OVERSEAS FUND --------------------------------------------------------------- FOR THE YEAR ENDED MARCH 31, --------------------------------------------------------------- 1999 1998 1997 1996 1995 -------------------- ------ ------ ------ ------ Class A Class I(T) ------- --------- SELECTED PER SHARE DATA Net asset value, beginning of year...... $13.52 $12.31 $13.84 $13.26 $11.65 $11.54 ------ ------ ------ ------ ------ ------ Income (loss) from investment operations: Net investment income.............. 0.15 0.41 0.88 0.61 0.48 0.14 Net realized and unrealized gains (losses) on investments......... (0.97) (1.10) 0.31 0.95 1.74 0.04 ------ ------ ------ ------ ------ ------ Total from investment operations....... (0.82) (0.69) 1.19 1.56 2.22 0.18 ------ ------ ------ ------ ------ ------ Less Distributions: Dividends from net investment income... (0.57) -- (0.83) (0.60) (0.44) (0.05) Distributions from capital gains....... (0.77) (0.25) (0.68) (0.38) (0.17) (0.02) ------ ------ ------ ------ ------ ------ Total distributions.... (1.34) (0.25) (1.51) (0.98) (0.61) (0.07) ------ ------ ------ ------ ------ ------ Net asset value, end of year................... $11.36 $11.37 $13.52 $13.84 $13.26 $11.65 ====== ====== ====== ====== ====== ====== Total Return*....... (6.46%) (5.53%)# 10.00% 12.16% 19.47% 1.56% RATIOS/SUPPLEMENTAL DATA Net assets, end of year (millions)............. $ 453 $ 3 $1,007 $ 953 $ 647 $ 439 Ratio of operating expenses to average net assets(P).............. 1.29% 1.03%++ 1.22% 1.27% 1.37% 1.40% Ratio of net investment income to average net assets(P).............. 2.22% 1.97%++ 2.20% 2.28% 3.31% 2.29% Portfolio turnover rate................... 9.31% 9.31% 22.13% 15.18% 9.46% 3.16%
- --------------- (T) July 31, 1998 inception date for Class I shares. # Not annualized ++ Annualized * Does not give effect to deduction of the sales load. (P) The ratio of operating expenses to average net assets for the year ended March 31, 1999 would have been 1.29% for Class A shares and 1.21% for Class I shares and for the years ended March 31, 1998, 1997, 1996 and 1995 for SoGen Overseas Fund would have been 1.22%, 1.27%, 1.38% and 1.40%, respectively, without the effect of earnings credits. The ratio of net investment income to average net assets for the year ended March 31, 1999 would have been 2.22% for Class A shares and 1.79% for Class I shares and for the years ended March 31, 1998, 1997, 1996 and 1995 for SoGen Overseas Fund would have been 2.20%, 2.27%, 3.30% and 2.29%, respectively, without the effect of earnings credits. 31 36
SOGEN GOLD FUND -------------------------------------------------- FOR THE YEAR ENDED MARCH 31, -------------------------------------------------- 1999 1998 1997 1996 1995 ------- ------- ------- ------- ------- SELECTED PER SHARE DATA Net asset value, beginning of year............................. $ 7.31 $ 10.60 $ 12.25 $ 11.28 $ 11.42 ------- ------- ------- ------- ------- Income (loss) from investment operations: Net investment income............ 0.16 0.13 0.26 0.24 0.08 Net realized and unrealized gains (losses) on investments....... (1.82) (3.03) (1.75) 1.35 (0.10) ------- ------- ------- ------- ------- Total from investment operations................. (1.66) (2.90) (1.49) 1.59 (0.02) ------- ------- ------- ------- ------- Less Distributions: Dividends from net investment income........................ (0.21) (0.39) (0.14) (0.35) (0.04) Distributions from capital gains......................... -- -- (0.02) (0.27) (0.08) ------- ------- ------- ------- ------- Total distributions........... (0.21) (0.39) (0.16) (0.62) (0.12) ------- ------- ------- ------- ------- Net asset value, end of year....... $ 5.44 $ 7.31 $ 10.60 $ 12.25 $ 11.28 ======= ======= ======= ======= ======= Total Return++................ (22.77)% (27.23)% (12.21)% 14.81% (0.14)% RATIOS/SUPPLEMENTAL DATA Net assets, end of year (millions)....................... $ 18 $ 31 $ 53 $ 63 $ 51 Ratio of operating expenses to average net assets(P)............ 1.62% 1.55% 1.45% 1.41% 1.46% Ratio of net investment income to average net assets(P)............ 2.01% 1.47% 1.20% 1.29% 0.79% Portfolio turnover rate............ 37.73% 11.20% 16.83% 22.40% 11.56%
- --------------- ++ Does not give effect to deduction of the sales load. (P) The ratios of operating expenses to average net assets for the years ended March 31, 1999, 1998, 1997, 1996 and 1995 for SoGen Gold Fund would have been 1.64%, 1.56%, 1.46%, 1.43% and 1.46%, respectively, without the effect of earnings credits. The ratio of investment income to average net assets for the years ended March 31, 1999, 1998, 1997, 1996 and 1995 for SoGen Gold Fund would have been 1.99%, 1.46%, 1.19%, 1.26% and 0.79%, respectively, without the effect of earnings credits. 32 37
SOGEN MONEY FUND ---------------------------------------------- FOR THE YEAR ENDED MARCH 31, ---------------------------------------------- 1999 1998 1997 1996 1995 ------ ------ ------ ------ ------ SELECTED PER SHARE DATA Net asset value, beginning of year..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ------ ------ ------ ------ ------ Income from investment operations: Net investment income................ 0.05 0.05 0.05 0.05 0.04 ------ ------ ------ ------ ------ Total from investment operations..................... 0.05 0.05 0.05 0.05 0.04 ------ ------ ------ ------ ------ Less Distributions: Dividends from net investment income............................ (0.05) (0.05) (0.05) (0.05) (0.04) ------ ------ ------ ------ ------ Total distributions............... (0.05) (0.05) (0.05) (0.05) (0.04) ------ ------ ------ ------ ------ Net asset value, end of year........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ====== ====== ====== ====== ====== Total Return...................... 4.73% 4.97% 4.61% 5.03% 4.13% RATIOS/SUPPLEMENTAL DATA Net assets, end of year (millions)..... $ 45 $ 19 $ 13 $ 8 $ 10 Ratio of operating expenses to average net assets(P)........................ 0.69% 0.75% 0.75% 0.75% 0.75% Ratio of net investment income to average net assets(P)................ 4.60% 4.92% 4.63% 4.98% 4.14%
- --------------- (P) Without the effect of earnings credits, and the investment advisory fee waiver and expense reimbursement provided by SGAM Corp., the ratio of operating expenses to average net assets for SoGen Money Fund for the years ended March 31, 1999, 1998, 1997, 1996 and 1995 would have been 0.69%, 1.01%, 1.14%, 0.97% and 1.55%, respectively. On the same basis, the ratio of net investment income to average net assets for the years ended March 31, 1999, 1998, 1997, 1996 and 1995 would have been 4.60%, 4.66%, 4.26%, 4.76% and 3.34%, respectively. 33 38 SOGEN INTERNATIONAL FUND SOGEN OVERSEAS FUND SOGEN GOLD FUND SOGEN MONEY FUND WHERE TO GO FOR ADDITIONAL INFORMATION ABOUT THE FUNDS. If you would like additional information about any Fund, the following information documents are available to you: Annual/Semi-Annual Reports -- Additional information about each Fund's investments is available in that 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 each Fund's performance during the most recent fiscal year. Statement of Additional Information -- Additional information about each Fund's structure and operations can be found in the Statement of Additional Information. The information presented in the Statement of Additional Information is incorporated by reference into this Prospectus and is legally considered to be part of this Prospectus. To request a copy of any of the materials described above, or to make any other inquiries, please contact SoGen Funds, Inc. at (800) 334-2143. OBTAINING INFORMATION FROM THE SECURITIES AND EXCHANGE COMMISSION Reports and other information about each Fund (including the Funds' Statement of Additional Information) may also be obtained from the Securities and Exchange Commission: 1. By going to the Commission'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 Commission at (800) SEC-0330. 2. By accessing the Commission's Internet site at http://www.sec.gov where you can view, download, and print the information. 3. By writing to the Public Reference Section of the Securities and Exchange Commission, Washington, D.C. 20549-6009, where, upon payment of a duplicating fee, copies of the information will be sent to you. SEC File Number 811-7762 39 SOGEN FUNDS, INC. 1221 Avenue of the Americas New York, NY 10020 INVESTMENT ADVISER SOCIETE GENERALE ASSET MANAGEMENT CORP. 1221 Avenue of the Americas New York, NY 10020 UNDERWRITER FUNDS DISTRIBUTOR, INC. 1221 Avenue of the Americas New York, NY 10020 LEGAL COUNSEL DECHERT PRICE & RHOADS 1775 Eye Street, N.W. Washington, DC 20006 INDEPENDENT AUDITORS KPMG LLP 757 Third Avenue New York, NY 10017 DOMESTIC CUSTODIAN INVESTORS FIDUCIARY TRUST COMPANY 127 West 10th Street Kansas City, MO 64105 GLOBAL CUSTODIAN THE CHASE MANHATTAN BANK 4 Chase MetroTech Center Brooklyn, NY 11245 SHAREHOLDER SERVICING AGENT DST SYSTEMS, INC. P.O. Box 219324 Kansas City, MO 64121-9258 (800) 334-2143 40 [SoGen LOGO] The SoGen Funds 1221 Avenue of the Americas, New York, NY 10020, (800) 334-2143 SGC1 41 STATEMENT OF ADDITIONAL INFORMATION SOGEN INTERNATIONAL FUND SOGEN OVERSEAS FUND SOGEN GOLD FUND SOGEN MONEY FUND ------------------------ [SoGen Logo] 1221 AVENUE OF THE AMERICAS NEW YORK, NY 10020 (800) 334-2143 ------------------------ SOCIETE GENERALE ASSET MANAGEMENT CORP. 1221 AVENUE OF THE AMERICAS NEW YORK, NY 10020 INVESTMENT ADVISER FUNDS DISTRIBUTOR, INC. 1221 AVENUE OF THE AMERICAS NEW YORK, NY 10020 PRINCIPAL UNDERWRITER ------------------------ This Statement of Additional Information provides information about SoGen International Fund, SoGen Overseas Fund, SoGen Gold Fund and SoGen Money Fund, four separate portfolios of SoGen Funds, Inc. (the "Company"), an open-end management investment company, in addition to the information contained in the Prospectus of the Company dated August 1, 1999. This Statement of Additional Information is not a prospectus. It relates to and should be read in conjunction with the Prospectus of the Company, a copy of which can be obtained by writing or by calling the Company at (800) 334-2143. ------------------------ AUGUST 1, 1999 42 TABLE OF CONTENTS
STATEMENT OF CROSS-REFERENCED ADDITIONAL TO CAPTIONS IN INFORMATION THE PROSPECTUS PAGE PAGE ------------ ---------------- ORGANIZATION OF THE FUNDS........................... 1 -- INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS.... 2 10 MANAGEMENT OF THE COMPANY........................... 9 16 INVESTMENT ADVISER AND OTHER SERVICES............... 22 16 DISTRIBUTION OF THE FUNDS' SHARES................... 25 17 COMPUTATION OF NET ASSET VALUE...................... 27 17 HOW TO PURCHASE SHARES.............................. 28 17 TAX STATUS.......................................... 28 28 BROKERAGE ALLOCATION................................ 33 -- CUSTODY OF PORTFOLIO................................ 36 -- INDEPENDENT AUDITORS................................ 36 -- FINANCIAL STATEMENTS................................ 36 31 APPENDIX............................................ A-1 --
i 43 ORGANIZATION OF THE FUNDS SoGen International Fund, SoGen Overseas Fund, SoGen Gold Fund and SoGen Money Fund, (each individually referred to as a "Fund", collectively, the "Funds" or, alternatively, the "International Fund," the "Overseas Fund," the "Gold Fund," and the "Money Fund," respectively) are four separate portfolios of SoGen Funds, Inc. (the "Company"), an open-end management investment company incorporated under the laws of Maryland in May 1993. Each Fund is a separate, diversified portfolio of assets and has a different investment objective which it pursues through separate investment policies, as described below. The Company's investment adviser is Societe Generale Asset Management Corp. ("SGAM Corp."), a registered investment adviser. The Company's principal underwriter is Funds Distributor, Inc. ("FDI"), a registered broker-dealer. Pursuant to the laws of Maryland, the Company's jurisdiction of incorporation, the Board of Directors of the Company has adopted By-Laws of the Company that do not require annual meetings of the Funds' shareholders. The absence of a requirement that the Company hold annual meetings of the Funds' shareholders reduces its expenses. Meetings of shareholders will continue to be held when required by the Investment Company Act of 1940 or Maryland law or when called by the Chairman of the Board of Directors, the President or shareholders owning 10% of a Fund's outstanding shares. The cost of any such notice and meeting will be borne by each Fund. Under the provisions of the Investment Company Act of 1940, a vacancy in the office of Director of the Company may be filled between meetings of the shareholders of the Company by vote of the Directors then in office if, immediately after filling such vacancy, at least two-thirds of the Directors then holding office have been elected to the office of Director by the shareholders of the Funds. In the event that at any time less than a majority of the Directors of the Company holding office at that time were elected by the shareholders of the Funds, the Board of Directors or the Chairman of the Board shall, within sixty days, cause a meeting of shareholders to be held for the purpose of electing directors to fill any vacancies in the Board of Directors. The staff of the Securities and Exchange Commission has advised the Funds that it interprets Section 16(c) of the Investment Company Act of 1940, which provides a means for dissident shareholders of common-law trusts to communicate with other shareholders of such trusts and to vote upon the removal of trustees upon the request in writing by the record holders of not less than 10 percent of the outstanding shares of the trust, to apply to investment companies, such as the Company, that are incorporated under Maryland law. 1 44 INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS INVESTMENT OBJECTIVES OF THE FUNDS. INTERNATIONAL FUND. The International Fund's investment objective is to provide long-term growth of capital. In seeking to achieve this objective, the Fund will normally invest its assets primarily in common stocks (and in securities convertible into common stocks) of United States and foreign companies. However, the Fund reserves the right to invest a portion of its assets in fixed-income securities of domestic or foreign issuers which, in addition to the income they may provide, appear to offer potential for long-term growth of capital. When deemed appropriate by the Fund's investment adviser for short-term investment or defensive purposes, the Fund may hold up to 100% of its assets in short-term debt instruments including commercial paper and certificates of deposits. Investors should refer to the Fund's Prospectus for further discussion of the Fund's investment objective and policy. There can be no assurance that the Fund's stated objective will be realized. OVERSEAS FUND. The Overseas Fund seeks long-term growth of capital by investing primarily in securities of small and medium size non-U.S. companies. The Fund uses the techniques and invests in the types of securities described below and in the Prospectus. GOLD FUND. The Gold Fund seeks growth of capital by investing primarily in securities of companies engaged in mining, processing, dealing in or holding gold or other precious metals such as silver, platinum and palladium, both in the United States and in foreign countries. Gold-related investments have provided protection against loss of purchasing power during periods of extensive price inflation and/or following periods of extensive credit expansion. Under normal circumstances, at least 65% of the value of the Fund's total assets will be invested in securities (which may include both equity and, to a limited extent, debt securities) consisting of issuers engaged in gold operations, including securities of gold mining finance companies as well as operating companies with long, medium or short-life mines. MONEY FUND. The Money Fund seeks as high a level of current income as is considered consistent with the preservation of capital and liquidity. The Fund pursues its objective by investing exclusively in U.S. dollar-denominated money market instruments which mature in 397 days or less. INVESTMENT POLICIES, TECHNIQUES AND RISKS. INTERNATIONAL FUND. COMMODITY LINKED SECURITIES. The International Fund may invest up to 5% of its assets in structured notes and/or preferred stock, the value of which is linked to the price of a referenced commodity. Structured notes and/or preferred stock differ from other types of securities in which the Fund may invest in several respects. For example, not only the coupon but also the redemption amount at maturity may be increased or decreased depending on the change in the price of the referenced commodity. Investment in commodity linked securities involves certain risks. In addition to the credit risk of the security's issuer and the normal risks of price changes in response to changes in interest 2 45 rates, the redemption amount may decrease as a result of changes in the price of the referenced commodity. Further, in certain cases, the coupon and/or dividend may be reduced to zero, and any further decline in the value of the security may then reduce the redemption amount payable on maturity. Finally, commodity linked securities may be more volatile than the price of the referenced commodity. GOLD FUND. FLUCTUATIONS IN THE PRICE OF GOLD (GOLD FUND). The price of gold has been subject to substantial upward and downward price movements over short periods of time and may be affected by unpredictable international monetary and political policies, such as currency devaluations or revaluations, economic conditions within an individual country, trade imbalances or trade or currency restrictions between countries and world inflation rates and interest rates. The price of gold, in turn, is likely to affect the market prices of securities of companies mining, processing or dealing in gold, and accordingly, the value of the Fund's investments in such securities also may be affected. MONEY FUND. ASSET-BACKED SECURITIES (MONEY FUND). The Money Fund can invest a portion of its assets in debt obligations known as "Asset-Backed Securities" which are Eligible Securities (as that term is hereinafter defined). The credit quality of most Asset-Backed Securities depends primarily on the credit quality of the assets underlying such securities, how well the entity issuing the security is insulated from the credit risk of the originator (or any other affiliated entities), and the amount and quality of any credit support provided to the securities. The rate of principal payments on Asset-Backed Securities generally depends on the rate of principal payments received on the underlying assets, which in turn may be affected by a variety of economic and other factors. As a result, the yield on any Asset-Backed Security is difficult to predict with precision and actual yield to maturity may be more or less than the anticipated yield to maturity. Asset-Backed Securities may be classified as "Pass-Through Certificates" or "Collateralized Obligations." Where deemed appropriate by the Board of Directors, Asset-Backed Securities may be valued using prices provided by a pricing service. The stated maturity of a particular Asset-Backed Security will be treated as the instrument's maturity for purposes of the Fund's portfolio maturity requirements, unless there exists an associated demand feature, enabling the Fund to treat the instrument as having a shorter maturity. "Pass-Through Certificates" are Asset-Backed Securities which represent an undivided fractional ownership interest in the underlying pool of assets. Pass-Through Certificates usually provide for payments of principal and interest received to be passed through to their holders, usually after deduction for certain costs and expenses incurred in administering the pool. Because Pass-Through Certificates represent ownership interests in the underlying assets, the holders thereof bear directly the risk of any defaults by the obligors on the underlying assets not covered by any credit support. Asset-Backed Securities issued in the form of debt instruments, also known as Collateralized Obligations, are generally issued as the debt of a special purpose entity organized solely for the 3 46 purpose of owning such assets and issuing such debt. The assets collateralizing such Asset-Backed Securities are pledged to a trustee or custodian for the benefit of the holders thereof. Such issuers generally hold no assets other than those underlying the Asset-Backed Securities and any credit support provided. As a result, although payments on such Asset-Backed Securities are obligations of the issuers, in the event of default on the underlying assets not covered by any credit support, the issuing entities are unlikely to have sufficient assets to satisfy their obligations on the related Asset-Backed Securities. EURODOLLAR CERTIFICATES. To the extent that the Money Fund purchases Eurodollar certificates of deposit, consideration will be given to their marketability and possible restrictions on international currency transactions and to regulations imposed by the domicile country of the foreign issuer. Eurodollar certificates of deposit may not be subject to the same regulatory requirements as certificates of deposit issued by U.S. banks and associated income may be subject to the imposition of foreign taxes. REPURCHASE AGREEMENTS. The Money Fund may invest in repurchase agreements, which are instruments under which the Money Fund acquires ownership of a security from a broker/dealer or bank that agrees to repurchase the security at a mutually agreed upon time and price (which price is higher than the purchase price), thereby determining the yield during the Money Fund's holding period. Maturity of the securities subject to repurchase may exceed 397 days. In the event of a bankruptcy or other default of a seller of a repurchase agreement, the Money Fund might have expenses in enforcing its rights, and could experience losses, including a decline in the value of the underlying security and loss of income. The Money Fund will only enter into repurchase agreements with banks and other recognized financial institutions such as broker/dealers which are deemed by the Money Fund's investment adviser to be creditworthy. RESTRICTED SECURITIES. The Money Fund may invest in commercial paper issued in reliance on the so-called "private placement" exemption from registration afforded by Section 4(2) of the Securities Act of 1933, and resold to qualified institutional buyers under Securities Act Rule 144A ("Section 4(2) paper"). Section 4(2) paper is restricted as to disposition under the federal securities laws, and generally is sold to institutional investors such as the Money Fund which agree that they are purchasing the paper for investment and not with a view to public distribution. Any resale by the purchaser must be in an exempt transaction and may be accomplished in accordance with Rule 144A. Section 4(2) paper normally is resold to other institutional investors, like the Money Fund, through or with the assistance of the issuer or investment dealers who make a market in the Section 4(2) paper, thus providing liquidity. The investment adviser will carefully monitor the Money Fund's investments in these securities, focusing on such factors, among others, as valuation, liquidity and availability of information. Investment in Section 4(2) paper could have the effect of reducing the Money Fund's liquidity to the extent that qualified institutional buyers become, for a time, uninterested in purchasing these restricted securities. VARIABLE RATE SECURITIES. The Money Fund may invest in instruments having rates of interest that are adjusted periodically or which "float" continuously according to formulae intended to minimize fluctuation in the values of the instruments ("Variable Rate Securities"). The interest rates of Variable Rate Securities ordinarily are determined by reference to, or are a percentage of, an objective standard such as a bank's prime rate, the 90-day U.S. Treasury Bill rate, or the rate of 4 47 return on commercial paper or bank certificates of deposit. Generally, the changes in the interest rates on Variable Rate Securities reduce the fluctuations in the market values of such securities. Accordingly, as interest rates decrease or increase, the potential for capital appreciation or depreciation is less than for fixed-rate obligations. Some Variable Rate Securities ("Variable Rate Demand Securities") have a demand feature entitling the purchaser to resell the securities at an amount approximately equal to amortized cost or the principal amount thereof plus accrued interest. The Money Fund will determine the maturity of Variable Rate Securities in accordance with Securities and Exchange Commission rules which allow the Money Fund to consider certain of such instruments as having maturities shorter than the maturity date on the face of the instrument. Under such rules, the maturity date of Variable Rate Demand Securities may be considered to be the longer of the period remaining until the next readjustment of the interest rate or the period remaining until the principal amount can be recovered through demand. METHODS OF ALLOCATING CASH FLOWS. While many Asset-Backed Securities are issued with only one class of security, many others are issued in more than one class, each with different payment terms. Multiple class Asset-Backed Securities are issued for two main reasons. First, multiple classes may be used as a method of providing credit-support. This is accomplished typically through creation of one or more classes whose right to payments on the Asset-Backed Security is made subordinate to the right to such payments of the remaining class or classes. Second, multiple classes may permit the issuance of securities with payment terms, interest rates or other characteristics differing both from those of each other and from those of the underlying assets. Examples include so-called "multi-tranche CMOs" (collateralized mortgage obligations with serial maturities such that all principal payments received on the mortgages underlying the securities are first paid to the class with the earliest stated maturity, and then sequentially to the class with the next stated maturity), "Strips" (Asset-Backed Securities entitling the holder to disproportionate interests with respect to the allocation of interest and principal of the assets backing the security), and securities with a class or classes having characteristics which mimic the characteristics of non-Asset-Backed Securities, such as floating interest rates (i.e., interest rates which adjust as a specified benchmark changes) or scheduled amortization of principal. TYPES OF CREDIT SUPPORT. Asset-Backed Securities are often backed by a pool of assets representing the obligations of a number of different parties. To lessen the effect of failures by obligors on these underlying assets to make payments, such securities may contain elements of credit support. Such credit support falls into two classes: liquidity protection and protection against ultimate default on the underlying assets. Liquidity protection refers to the provision of advances, generally by the entity administering the pool of assets, to ensure that scheduled payments on the underlying pool are made in a timely fashion. Protection against ultimate default ensures payment on at least a portion of the assets in the pool. Such protection may be provided through guarantees, insurance policies or letters of credit obtained from third parties, through various means of structuring the transaction, or through a combination of such approaches. Examples of Asset-Backed Securities with credit support arising out of the structure of the transaction include "senior-subordinated securities" (multiple class Asset-Backed Securities with certain classes subordinate to other classes as to the payment of principal thereon, with the result that defaults on the underlying assets are borne first by the holders of the subordinated class) and Asset-Backed Securities that have "reserve funds" (where cash or investments, sometimes funded from a portion of the initial 5 48 payments on the underlying assets, are held in reserve against future losses) or that have been "over-collateralized" (where the scheduled payments on, or the principal amount of, the underlying assets substantially exceed that required to make payment on the Asset-Backed Securities and pay any servicing or other fees). The degree of credit support provided on each issue is based generally on historical information respecting the level of credit risk associated with such payments. Delinquency or loss in excess of that anticipated could adversely affect the return on an investment in an Asset-Backed Security. CREDIT CARD RECEIVABLE SECURITIES. The Fund may invest in Asset-Backed Securities backed by receivables from revolving credit card agreements ("Credit Card Receivable Securities"). Most of the Credit Card Receivable Securities issued publicly to date have been Pass-Through Certificates. In order to lengthen the maturity of Credit Card Receivable Securities, most such securities provide for a fixed period during which only interest payments on the underlying accounts are passed through to the security holder and principal payments received on such accounts are used to fund the transfer to the pool of assets supporting the related Credit Card Receivable Securities of additional credit card charges made on an account. The initial fixed period usually may be shortened upon the occurrence of specified events which signal a potential deterioration in the quality of the assets backing the security, such as the imposition of a cap on interest rates. The ability of the issuer to extend the life of an issue of Credit Card Receivable Securities thus depends upon the continued generation of additional principal amounts in the underlying accounts during the initial period and the non-occurrence of specified events. Competitive, regulatory and general economic factors could adversely affect the rate at which new receivables are created in an account and conveyed to an issuer, shortening the expected weighted average life of the related Credit Card Receivable Security and reducing its yield. An acceleration in cardholders' payment rates or any other event which shortens the period during which additional credit card charges on an account may be transferred to the pool of assets supporting the related Credit Card Receivable Security could have a similar effect on the weighted average life and yield. Credit card holders are entitled to the protection of a number of state and federal consumer credit laws, many of which give such holder the right to set off certain amounts against balances owed on the credit card, thereby reducing amounts paid on accounts. In addition, unlike most other Asset-Backed Securities, accounts are unsecured obligations of the cardholder. INVESTMENT POLICIES APPLICABLE TO MORE THAN ONE FUND. POLICIES APPLICABLE TO ALL FUNDS: FOREIGN SECURITIES. Each Fund may (and the International Fund and the Overseas Fund will) invest in foreign securities, which may entail a greater degree of risk (including risks relating to exchange rate fluctuations, tax provisions, or expropriation of assets) than does investment in securities of domestic issuers. The Funds may invest in securities of foreign issuers directly or in the form of American Depository Receipts (ADRs), Global Depository Receipts (GDRs), European Depository Receipts (EDRs), or other securities representing underlying shares of foreign issuers. Positions in these securities are not necessarily denominated in the same currency as the common stocks into which they may be converted. ADRs are receipts typically issued by an American bank or trust company evidencing ownership of the underlying securities. EDRs are European receipts 6 49 evidencing a similar arrangement. GDRs are global offerings where two securities are issued simultaneously in two markets, usually publicly in non-U.S. markets and privately in the U.S. market. Generally ADRs, in registered form, are designed for use in the U.S. securities markets, EDRs, in bearer form, are designed for use in European securities markets. GDR's are designed for use in the U.S. and European securities markets. Each of the Funds (except the Money Fund) may invest in both "sponsored" and "unsponsored" ADRs. In a sponsored ADR, the issuer typically pays some or all of the expenses of the depository and agrees to provide its regular shareholder communications to ADR holders. An unsponsored ADR is created independently of the issuer of the underlying security. The ADR holders generally pay the expenses of the depository and do not have an undertaking from the issuer of the underlying security to furnish shareholder communications. Issuers of unsponsored ADRs are not obligated to disclose material information in the United States and, therefore, there may not be a correlation between such information and the market value of the ADRs. Each Fund does not expect to invest 5% or more of its total assets in unsponsored ADRs. With respect to portfolio securities that are issued by foreign issuers or denominated in foreign currencies, the investment performance of a Fund is affected by the strength or weakness of the U.S. dollar against these currencies. For example, if the dollar falls in value relative to the Japanese yen, the dollar value of a yen-denominated stock held in the portfolio will rise even though the price of the stock remains unchanged. Conversely, if the dollar rises in value relative to the yen, the dollar value of the yen-denominated stock will fall. (See discussion of transaction hedging and portfolio hedging under "Currency Exchange Transactions.") Investors should understand and consider carefully the risks involved in foreign investing. Investing in foreign securities, positions which are generally denominated in foreign currencies, and utilization of forward foreign currency exchange contracts involve certain risks and opportunities not typically associated with investing in U.S. securities. These considerations include: fluctuations in the rates of exchange between the U.S. dollar and foreign currencies; possible imposition of exchange control regulations or currency restrictions that would prevent cash from being brought back to the United States; less public information with respect to issuers of securities; less governmental supervision of stock exchanges, securities brokers, and issuers of securities; different accounting, auditing and financial reporting standards; different settlement periods and trading practices; less liquidity and frequently greater price volatility in foreign markets than in the United States; imposition of foreign taxes; and sometimes less advantageous legal, operational and financial protections applicable to foreign sub-custodial arrangements. Although the Funds seek to invest in companies and governments of countries having stable political environments, there is the possibility of expropriation or confiscatory taxation, seizure or nationalization of foreign bank deposits or other assets, establishment of exchange controls, the adoption of foreign government restrictions, or other adverse political, social or diplomatic developments that could affect investment in these nations. The countries in which the International Fund and the Overseas Fund invest are included in those listed below. The International Fund and the Overseas Fund may not invest in all the countries listed, and they may invest in countries that are not listed, when such investments are 7 50 consistent with the Funds' investment objective and policies. In addition, the Gold Fund may invest in gold-related investments in any countries deemed suitable by the investment adviser.
MATURE MARKETS EMERGING MARKETS -------------- ---------------- Australia Japan Argentina Nigeria Austria Luxembourg Brazil Pakistan Belgium Netherlands Chile People's Republic of China Canada New Zealand Czech Republic Peru Denmark Norway Ecuador Philippines Finland Portugal Greece Poland France Singapore Hungary South Africa Germany Spain India South Korea Hong Kong Sweden Indonesia Sri Lanka Ireland Switzerland Israel Taiwan Italy United Kingdom Jamaica Thailand United States Jordan Turkey Kenya Uruguay Malaysia Venezuela Mexico Vietnam Morocco
It may not be feasible for the International Fund, the Overseas Fund or the Gold Fund currently to invest in all of these countries due to restricted access to their securities markets or inability to implement satisfactory custodial arrangements. Since the Money Fund will invest only in U.S. dollar-denominated securities, the return on its shares will not be subject to the risk of adverse changes in the exchange rates between the U.S. dollar and foreign currencies. In addition, the Money Fund does not intend to invest in the securities markets of emerging countries. The cost of investing in foreign securities is higher than the cost of investing in U.S. securities. Investing in each Fund is an efficient way for an individual to participate in foreign markets, but its expenses, including advisory and custody fees, are higher than the expenses of a typical mutual fund that invests in domestic equities. RESTRICTED AND ILLIQUID SECURITIES. Each Fund may invest up to 15% of its net assets (10% in the case of the Money Fund and the International Fund) in illiquid securities, including certain securities that are subject to legal or contractual restrictions on resale ("restricted securities"). Generally, restricted securities may be sold only in privately negotiated transactions or in a public offering with respect to which a registration statement is in effect under the Securities Act of 1933 (the "1933 Act"). Where registration is required, a Fund may be obligated to pay all or part of the registration expenses and a considerable period may elapse between the time of the decision to sell and the time the Fund may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to develop, the Fund might obtain a less favorable price than that which prevailed when it decided to sell. Restricted securities will be priced at fair value as determined in good faith by the Board of Directors. If, through the 8 51 appreciation of illiquid securities or the depreciation of liquid securities, a Fund should be in a position where more than 15% of the value of its net assets (10% in the case of the Money Fund and the International Fund) is invested in illiquid assets, including restricted securities, the Fund will take appropriate steps to protect liquidity. Notwithstanding the above, a Fund may purchase securities that have been privately placed but that are eligible for purchase and sale under Rule 144A under the 1933 Act. That rule permits certain qualified institutional buyers, such as the Funds, to trade in privately placed securities that have not been registered for sale under the 1933 Act. SGAM Corp., under the supervision of the Board of Directors of the Company, will consider whether securities purchased under Rule 144A are illiquid and thus subject to a Fund's restriction on investing in illiquid securities. A determination as to whether a Rule 144A security is liquid or not is a factual issue requiring an evaluation of a number of factors. In making this determination, SGAM Corp. will consider the trading markets for the specific security, taking into account the unregistered nature of a Rule 144A security. In addition, SGAM Corp. could consider (1) the frequency of trades and quotes, (2) the number of dealers and potential purchasers, (3) the dealer undertakings to make a market, and (4) the nature of the security and of market place trades (e.g., the time needed to dispose of the security, the method of soliciting offers and the mechanics of transfer). The liquidity of Rule 144A securities would be monitored and if, as a result of changed conditions, it is determined that a Rule 144A security is no longer liquid, a Fund's holdings of illiquid securities would be reviewed to determine what steps, if any, are required to assure that the Fund does not invest more than the maximum percentage of its assets in illiquid securities. Investing in Rule 144A securities could have the effect of increasing the amount of a Fund's assets invested in illiquid securities if qualified institutional buyers are unwilling to purchase such securities. BANK OBLIGATIONS. Each Fund may invest in bank obligations, which may include bank certificates of deposit, time deposits or bankers' acceptances. Certificates of deposit and time deposits are negotiable certificates issued against funds deposited in a commercial bank for a definite period of time and earning a specified return. Bankers' acceptances are negotiable drafts or bills of exchange, normally drawn by an importer or exporter to pay for specific merchandise, which are "accepted" by a bank, meaning in effect that the bank unconditionally agrees to pay the face value of the instrument on maturity. Investments in these instruments are limited to obligations of domestic banks (including their foreign branches) and U.S. and foreign branches of foreign banks having capital surplus and undivided profits in excess of $100 million. POLICIES APPLICABLE TO THE INTERNATIONAL FUND, THE OVERSEAS FUND AND THE GOLD FUND: CURRENCY EXCHANGE TRANSACTIONS. A currency exchange transaction may be conducted either on a spot (i.e., cash) basis at the spot rate for purchasing or selling currency prevailing in the foreign exchange market or through a forward currency exchange contract ("Forward Contract"). A Forward Contract is an agreement to purchase or sell a specified currency at a specified future date (or within a specified time period) and price set at the time of the contract. Forward Contracts are usually entered into with banks and broker/dealers, are not exchange traded and are usually for less than one year, but may be renewed. 9 52 Currency exchange transactions may involve currencies of the different countries in which the International Fund, the Overseas Fund and Gold Fund may invest, and serve as hedges against possible variations in the exchange rates between these currencies and the U.S. dollar. A Fund's currency transactions are limited to transaction hedging and portfolio hedging involving either specific transactions or portfolio positions. Transaction hedging is the purchase or sale of a Forward Contract with respect to specific payables or receivables of a Fund accruing in connection with the purchase or sale of portfolio securities. Portfolio hedging is the use of a Forward Contract with respect to a portfolio security position denominated or quoted in a particular currency. A Fund may engage in portfolio hedging with respect to the currency of a particular country in amounts approximating actual or anticipated positions in securities denominated in that currency. If a Fund enters into a Forward Contract, the custodian bank will segregate liquid assets of the Fund having a value equal to the Fund's commitment under such Forward Contract. At the maturity of a Forward Contract to deliver a particular currency, a Fund may either sell the portfolio security related to such contract and make delivery of the currency, or it may retain the security and either acquire the currency on the spot market or terminate its contractual obligation to deliver the currency by purchasing an offsetting contract with the same currency trader obligating it to purchase on the same maturity date the same amount of the currency. It is impossible to forecast with absolute precision the market value of portfolio securities at the expiration of a Forward Contract. Accordingly, it may be necessary for a Fund to purchase additional currency on the spot market (and bear the expense of such purchase) if the market value of the security is less than the amount of currency the Fund is obligated to deliver, and if a decision is made to sell the security and make delivery of the currency. Conversely, it may be necessary to sell on the spot market some of the currency received upon the sale of the portfolio security if its market value exceeds the amount of currency the Fund is obligated to deliver. If a Fund retains the portfolio security and engages in an offsetting transaction, the Fund will incur a gain or a loss to the extent that there has been movement in Forward Contract prices. If a Fund engages in an offsetting transaction, it may subsequently enter into a new Forward Contract to sell the currency. Should forward prices decline during the period between the date a Fund enters into a Forward Contract for the sale of a currency and the date it enters into an offsetting contract for the purchase of the currency, the Fund will realize a gain to the extent the price of the currency it has agreed to sell exceeds the price of the currency it has agreed to purchase. Should forward prices increase, the Fund will suffer a loss to the extent the price of the currency it has agreed to purchase exceeds the price of the currency it has agreed to sell. A default on the contract would deprive the Fund of unrealized profits or force the Fund to cover its commitments for purchase or sale of currency, if any, at the current market price. Hedging against a decline in the value of a currency does not eliminate fluctuations in the prices of portfolio securities or prevent losses if the prices of such securities decline. Such transactions also preclude the opportunity for gain if the value of the hedged currency should rise. Moreover, it may not be possible for a Fund to hedge against a devaluation that is so generally anticipated that the Fund is not able to contract to sell the currency at a price above the devaluation level it anticipates. The cost to a Fund of engaging in currency exchange transactions varies with such factors as the currency involved, the length of the contract period and prevailing 10 53 market conditions. Since currency exchange transactions are usually conducted on a principal basis, no fees or commissions are involved. LOWER-RATED DEBT SECURITIES. Each of the International Fund, the Overseas Fund and the Gold Fund may invest in debt securities, including lower-rated securities (i.e., securities rated BB or lower by Standard & Poor's Corporation ("S&P") or Ba or lower by Moody's Investors Service, Inc. ("Moody's"), commonly called "junk bonds") and securities that are not rated. There are no restrictions as to the ratings of debt securities acquired by a Fund or the portion of a Fund's assets that may be invested in debt securities in a particular rating category, except that the Overseas Fund and the Gold Fund will not invest more than 20% of its assets in securities rated below investment grade or unrated securities considered by the investment adviser to be of comparable credit quality. Securities rated BBB by S&P or Baa by Moody's (the lowest investment grade ratings) are considered to be of medium grade and to have speculative characteristics. Debt securities rated below investment grade are predominantly speculative with respect to the issuer's capacity to pay interest and repay principal. Although lower-rated debt and comparable unrated debt securities may offer higher yields than do higher rated securities, they generally involve greater volatility of price and risk of principal and income, including the possibility of default by, or bankruptcy of, the issuers of the securities. In addition, the markets in which lower-rated and unrated debt securities are traded are more limited than those in which higher rated securities are traded. Adverse publicity and investors' perceptions, whether or not based on fundamental analysis, may decrease the values and liquidity of lower-rated debt securities, especially in a thinly traded market. During periods of thin trading in these markets, the spread between bid and asked prices is likely to increase significantly, and a Fund may have greater difficulty selling its portfolio securities. See "Computation of Net Asset Value." Analyses of the creditworthiness of issuers of lower-rated debt securities may be more complex than for issuers of higher rated securities, and the ability of the Fund to achieve its investment objective may, to the extent of investment in lower-rated debt securities, be more dependent upon such creditworthiness analyses than would be the case if the Fund were investing in higher rated securities. Lower-rated debt securities may be more susceptible to real or perceived adverse economic and competitive industry conditions than investment grade securities. The prices of lower-rated debt securities have been found to be less sensitive to interest rate changes than higher rated investments, but more sensitive to adverse economic downturns or individual corporate developments. A projection of an economic downturn or of a period of rising interest rates, for example, could cause a decline in lower-rated debt securities' prices because the advent of a recession could lessen the ability of a highly-leveraged company to make principal and interest payments on its debt securities. If the issuer of lower-rated debt securities defaults, a Fund may incur additional expenses seeking recovery. A more complete description of the characteristics of bonds in each rating category is included in the appendix to this Statement of Additional Information. 11 54 POLICIES APPLICABLE TO THE OVERSEAS FUND, THE GOLD FUND AND THE MONEY FUND: WHEN-ISSUED OR DELAYED-DELIVERY SECURITIES. Each Fund may purchase securities on a "when-issued" or "delayed delivery" basis. Although the payment and interest terms of these securities are established at the time a Fund enters into the commitment, the securities may be delivered and paid for a month or more after the date of purchase, when their value may have changed. A Fund makes such commitments only with the intention of actually acquiring the securities, but may sell the securities before settlement date if the investment adviser deems it advisable for investment reasons. At the time a Fund enters into a binding obligation to purchase securities on a when-issued basis, liquid assets of the Fund having a value at least as great as the purchase price of the securities to be purchased will be segregated on the books of the Fund and held by the custodian throughout the period of the obligation. The use of these investment strategies, as well as any borrowing by a Fund, may increase net asset value fluctuation. Securities purchased on a when-issued or delayed delivery basis are recorded as assets on the day following the purchase and are marked-to-market daily. A Fund will not invest more than 25% of its assets in when-issued or delayed delivery securities, does not intend to purchase such securities for speculative purposes and will make commitments to purchase securities on a when- issued or delayed delivery basis with the intention of actually acquiring the securities. However, the Funds reserve the right to sell acquired when-issued or delayed delivery securities before their settlement dates if deemed advisable. POLICIES APPLICABLE TO THE INTERNATIONAL FUND AND THE OVERSEAS FUND: INVESTMENT IN OTHER INVESTMENT COMPANIES. Certain markets are closed in whole or in part to equity investments by foreigners. The International Fund and the Overseas Fund may be able to invest in such markets solely or primarily through governmentally-authorized investment companies. Each Fund generally may invest up to 10% of its assets in shares of other investment companies and up to 5% of its assets in any one investment company (in each case measured at the time of investment), as long as no investment represents more than 3% of the outstanding voting stock of the acquired investment company at the time of investment. These restrictions do not apply to certain investment companies known as private investment companies and "qualified purchaser" investment companies. Investment in another investment company may involve the payment of a premium above the value of the issuer's portfolio securities, and is subject to market availability. In the case of a purchase of shares of such a company in a public offering, the purchase price may include an underwriting spread. The Funds do not intend to invest in such an investment company unless, in the judgment of the Funds' investment adviser, the potential benefits of such investment justify the payment of any applicable premium or sales charge. As a shareholder in an investment company, the Funds would bear its ratable share of that investment company's expenses, including its advisory and administration fees. At the same time, the Funds would continue to pay their own management fees and other expenses. 12 55 POLICIES APPLICABLE TO THE OVERSEAS FUND AND THE GOLD FUND: STRUCTURED SECURITIES. The Overseas Fund may invest in structured notes and/or preferred stock, the value of which is linked to currencies, interest rates, other commodities, indices or other financial indicators, and the Gold Fund may invest in structured notes and/or preferred stock, the value of which is linked to the price of gold or other precious metals. Structured securities differ from other types of securities in which the Funds may invest in several respects. For example, the coupon dividend and/or redemption amount at maturity may be increased or decreased depending on changes in the value of the underlying instrument. Investment in structured securities involves certain risks. In addition to the credit risk of the security's issuer and the normal risks of price changes in response to changes in interest rates, the redemption amount may decrease as a result of changes in the price of the underlying instrument. Further, in the case of certain structured securities, the coupon and/or dividend may be reduced to zero, and any further declines in the value of the underlying instrument may then reduce the redemption amount payable on maturity. Finally, structured securities may be more volatile than the price of the underlying instrument. CHANGE OF OBJECTIVE. The investment objectives of the Overseas Fund, the Gold Fund and the Money Fund are not fundamental policies of the Funds and, accordingly, may be changed by the Board of Directors without shareholder approval. Shareholders will be notified a minimum of sixty days in advance of any change in investment objective. The investment objective of the International Fund, on the other hand, is a fundamental policy of the Fund and may not be changed without shareholder approval. INVESTMENT RESTRICTIONS. In pursuing its investment objective, each Fund will not: 1. With respect to 75% of the value of a Fund's total assets, invest more than 5% of its total assets (valued at time of investment) in securities of any one issuer, except securities issued or guaranteed by the government of the United States, or any of its agencies or instrumentalities, or acquire securities of any one issuer which, at the time of investment, represent more than 10% of the voting securities of the issuer; 2. Borrow money except unsecured borrowings from banks as a temporary measure in exceptional circumstances, and such borrowings may not exceed 10% of a Fund's net assets at the time of the borrowing. A Fund will not purchase securities while borrowings exceed 5% of its total assets; 3. (Overseas Fund, Gold Fund and Money Fund) -- Invest more than 25% of its assets (valued at time of investment) in securities of companies in any one industry other than U.S. Government Securities (except that the Gold Fund will, as a matter of fundamental policy, concentrate its investments in the precious metals industry and the Money Fund may concentrate its investments in U.S. bank obligations); 13 56 4. (International Fund) -- Purchase the securities of any issuer if such purchase would cause more than 25% of the value of its total assets to be invested in securities of any one issuer or industry, with the exception of the securities of the United States government and its corporate instrumentalities and, under the circumstances described below, certificates of deposit and other short-term bank instruments. In fact, the Fund intends to diversify its investments among various issuers and industries and will not purchase certificates of deposit or other short-term bank instruments except to the extent deemed appropriate for the short-term investment of cash or a temporary defensive measure. The Fund will limit its purchases of certificates of deposit and other short-term bank instruments to those issued by United States banks and savings and loan associations, including foreign branches of such banks, and United States branches or agencies of foreign banks, which have total assets (as of the date of their most recently published financial statements) of at least $1 billion. 5. (International Fund) -- Purchase or sell its portfolio securities from or to any of its officers, directors or employees, its investment adviser or its principal underwriter, except to the extent that such purchase or sale may be permitted by an order, rule or regulation of the Securities and Exchange Commission. 6. Make loans, but this restriction shall not prevent a Fund from (a) buying a part of an issue of bonds, debentures, or other obligations that are publicly distributed, or from investing up to an aggregate of 15% of its total assets (taken at market value at the time of each purchase) in parts of issues of bonds, debentures or other obligations of a type privately placed with financial institutions or (b) lending portfolio securities, provided that a Fund may not lend securities if, as a result, the aggregate value of all securities loaned would exceed 33% of its total assets (taken at market value at the time of such loan);* 7. (Overseas Fund, Gold Fund and Money Fund) -- Underwrite the distribution of securities of other issuers; however, a Fund may acquire "restricted" securities which, in the event of a resale, might be required to be registered under the 1933 Act on the grounds that the Fund could be regarded as an underwriter as defined by the 1933 Act with respect to such resale; 8. (International Fund) -- Engage in the underwriting of securities of other issuers, except to the extent it may be deemed to be an underwriter in selling portfolio securities as part of an offering registered under the 1933 Act. 9. (Overseas Fund, Gold Fund and Money Fund) -- Purchase and sell real estate or interests in real estate, although it may invest in marketable securities of enterprises that invest in real estate or interests in real estate; 10. (International Fund) -- Purchase or sell real estate or interests therein, commodities or commodity contracts. The Fund may, however, invest in real estate investment trusts and companies holding real estate and may sell commodities received by it as - --------------- * The Funds have no present intention of lending their portfolio securities. 14 57 distributions on portfolio investments. (To the extent the Fund's portfolio includes a commodity distributed to it, the Fund will be subject to the risk of change in the value of such commodity.) 11. (Overseas Fund, Gold Fund and Money Fund) -- Make margin purchases of securities, except for the use of such short term credits as are needed for clearance of transactions; and 12. Sell securities short or maintain a short position, except, in the case of the Overseas Fund, the Gold Fund and the Money Fund, short sales against-the-box. Restrictions 1 through 12 above (except the portions in parentheses) are "fundamental," which means that they cannot be changed without the vote of a majority of the outstanding voting securities of a Fund (defined by the Investment Company Act of 1940, as amended ("1940 Act"), as the lesser of (i) 67% of a Fund's shares present at a meeting if more than 50% of the shares outstanding are present or (ii) more than 50% of a Fund's outstanding shares). In addition, each Fund is subject to a number of restrictions that may be changed by the Board of Directors without shareholder approval. Under those non-fundamental restrictions, a Fund will not: a. Invest in companies for the purpose of management or the exercise of control; b. (International Fund) -- Purchase Securities on margin; c. (Overseas Fund, Gold Fund and Money Fund) -- Invest in oil, gas or other mineral leases or exploration or development programs, although it may invest in marketable securities of enterprises engaged in oil, gas or mineral exploration; d. (International Fund) -- Purchase interests in oil, gas or other mineral exploration programs or leases; however, this policy will not prohibit the acquisition of securities of companies engaged in the production or transmission of oil, gas or other minerals. e. (Overseas Fund, Gold Fund and Money Fund) -- Invest more than 10% of its net assets (valued at time of investment) in warrants, valued at the lower of cost or market; provided that warrants acquired in units or attached to securities shall be deemed to be without value for purposes of this restriction; f. (International Fund) -- Purchase warrants which are not offered in units or attached to other portfolio securities if, immediately after such purchase, more than 5% of the Fund's net assets would be invested in such unattached warrants, valued at the lower of cost or market. The Fund will not purchase unattached warrants not listed on the New York or American Stock Exchange if, immediately after such purchase, more than 2% of the Fund's net assets would be invested in such unattached, unlisted warrants. g. (Overseas Fund, Gold Fund and Money Fund) -- Pledge, mortgage or hypothecate its assets, except as may be necessary in connection with permitted borrowings or in connection with short sales; h. (Overseas Fund, Gold Fund and Money Fund) -- Purchase or sell commodities or commodity contracts, except that it may enter into forward contracts and may sell commodities received by it as distributions on portfolio investments; and 15 58 i. Purchase or sell put and call options on securities or on futures contracts. j. (International Fund) -- Purchase illiquid securities or securities the proceeds from the sale of which could not readily be repatriated to the United States if, immediately after such purchase, more than 10% of the value of its net assets would be invested in such securities. In addition, under normal circumstances the International Fund will invest in at least three foreign countries. Among the types of fixed income securities in which the International Fund may invest from time to time are United States government obligations. United States government obligations include Treasury Notes, Bonds and Bills which are direct obligations of the United States government backed by the full faith and credit of the United States, and securities issued by agencies and instrumentalities of the United States government, which may be (i) guaranteed by the United States Treasury, such as the securities of the Government National Mortgage Association, or (ii) supported by the issuer's right to borrower from the Treasury and backed by the credit of the federal agency or instrumentality itself, such as securities of the Federal Intermediate Land Banks, Federal Land Banks, Bank of Cooperatives, Federal Home Loan Banks, Tennessee Valley Authority and Farmers Home Administration. The Money Fund will only purchase securities that present minimal credit risks and which are First Tier or Second Tier Securities (otherwise referred to as "Eligible Securities"). An Eligible Security is: (1) a security with a remaining maturity of 397 days or less: (a) that is rated by the requisite nationally recognized statistical rating organizations designated by the Securities and Exchange Commission (currently Moody's, S&P, Duff and Phelps, Inc., Fitch Investors Services, Inc., Thompson Bankwatch, and, with respect to debt issued by banks, bank holding companies, United Kingdom building societies, broker/dealers and broker/ dealers' parent companies, and bank-supported debt, IBCA Limited and its affiliate, IBCA, Inc. -- collectively, the "NRSROs") in one of the two highest rating categories for short-term debt obligations (the requisite NRSROs being any two or, if only rated by one, that one NRSRO), or (b) that itself was unrated by any NRSRO, but was issued by an issuer that has outstanding a class of short-term debt obligations (or any security within that class) meeting the requirements of subparagraph 1(a) above that is of comparable priority and security; (2) a security that at the time of issuance was a long-term security but has a remaining maturity of 397 days or less and: (a) whose issuer received a rating in one of the two highest rating categories for short-term debt obligations from the requisite NRSROs (the requisite NRSROs being any two or, if only rated by one, that one NRSRO) with respect to a class of short-term debt obligations (or any security within that class) that is currently comparable in priority and security with the subject security or (b) which has long-term ratings from the requisite NRSROs (the requisite NRSROs being any two or, if only rated by one, that one NRSRO) which are in one of the two highest categories; or 16 59 (3) a security not rated by an NRSRO but deemed by the investment adviser pursuant to guidelines adopted by the Board of Directors, to be of comparable quality to securities described in (1) and (2) and to present minimal credit risks. A First Tier Security is any Eligible Security which qualifies as such because it carries (or other relevant securities issued by its issuer carry) top NRSRO ratings (a single top rating is sufficient if only one NRSRO rates the security) or has been determined, pursuant to guidelines adopted by the Board of Directors, to be of comparable quality to such a security. A Second Tier Security is any other Eligible Security. The Money Fund will limit its investments in the First Tier Securities of any one issuer to no more than five percent of its assets. (Repurchase agreements collateralized by non-Government securities will be taken into account when making this calculation.) Moreover, the Money Fund's total holdings of Second Tier Securities will not exceed 5% of its assets, with investment in the Second Tier Securities of any one issuer being limited to the greater of 1% of the Fund's assets or $1 million. In addition, the underlying securities involved in repurchase agreements collateralized by non-Government securities will be First Tier Securities at the time the repurchase agreements are executed. Notwithstanding the foregoing investment restrictions, the Overseas Fund and the Gold Fund may purchase securities pursuant to the exercise of subscription rights, provided that such purchase will not result a Fund's ceasing to be a diversified investment company. Japanese and European corporations frequently issue additional capital stock by means of subscription rights offerings to existing shareholders at a price substantially below the market price of the shares. The failure to exercise such rights would result in a Fund's interest in the issuing company being diluted. The market for such rights is not well developed in all cases and, accordingly, a Fund may not always realize full value on the sale of rights. The exception applies in cases where the limits set forth in the investment restrictions would otherwise be exceeded by exercising rights or would have already been exceeded as a result of fluctuations in the market value of a Fund's portfolio securities with the result that a Fund would be forced either to sell securities at a time when it might not otherwise have done so, or to forego exercising the rights. TOTAL RETURN. From time to time the International Fund, the Overseas Fund and the Gold Fund advertise their average annual total return. During the one year period ended March 31, 1999, average annual rates of return were (6.44)%, (3.23)% and (25.45)%, for the International Fund (formerly SoGen International Fund, Inc.) Class A shares, the Overseas Fund Class A shares and the Gold Fund, respectively. Quotations of average annual returns for each Fund will be expressed in terms of the average annual compounded rates of return of a hypothetical investment in each Fund over periods of 1, 5 and 10 years (up to the life of the Fund), calculated pursuant to the following formula: P(1+T)(n)=ERV (where P = a hypothetical initial payment of $1000, T = the average annual return, n = the number of years, and ERV = the ending redeemable value of a hypothetical $1000 payment made at the beginning of the period). This calculation assumes deduction of a proportional share of Fund expenses on an annual basis and deduction of the maximum sales charge of 3.75% on the amount initially invested, and assumes reinvestment of all income dividends and capital gains distributions during the period. 17 60 Under the same assumptions utilized in the preceding calculation, an investment in the International Fund (formerly SoGen International Fund, Inc.) Class A shares over the ten year period from March 31, 1990 to March 31, 1999 would have increased at an average annual compounded rate of return of 10.02%, an investment in the Overseas Fund Class A shares over the five year period from March 31, 1994 to March 31, 1999 would have increased at an average annual compounded rate of return of 7.79%, and an investment in the Gold Fund shares over the one year period from March 31, 1998 to March 31, 1999 would have decreased at an average annual compounded rate of 11.81%. CURRENT YIELD AND EFFECTIVE YIELD. From time to time the Money Fund may advertise its current yield and effective yield. Current yield will be based on income per share received by a hypothetical investment over a given 7-day period (less expenses accrued during the period) and then "annualized" (i.e., assuming that the 7-day yield would be received over 52 weeks, stated in terms of an annual percentage return on the investment). Effective yield is calculated in a manner similar to that used to calculate current yield, but when annualized, the income earned by an investment in the Money Fund is assumed to be reinvested. The effective yield will be slightly higher than the current yield because of this assumed reinvestment. The Money Fund's current and effective 7-day yields for the seven days ended March 31, 1999 were 4.59% and 4.70%, respectively. Current yield and effective yield for the Money Fund will vary based on changes in market conditions, the level of interest rates and the level of the Fund's expenses and no reported yield figures should be considered an indication of the performance that may be expected in the future. COMPARISON OF PORTFOLIO PERFORMANCE. From time to time the Company may discuss in sales literature and advertisements, specific performance grades or rankings or other information as published by recognized grades or rankings or other information as published by recognized mutual fund statistical services, such as Morningstar, Inc. or Lipper Analytical Services, Inc., or by publications of general interest such as Barron's, Business Week, Financial World, Forbes, Fortune, Kiplinger's Personal Finance, Money, Morningstar Mutual Funds, Smart Money, The Wall Street Journal or Worth. PORTFOLIO TURNOVER. Although the International Fund, the Overseas Fund and the Gold Fund will not make a practice of short-term trading, purchases and sales of securities will be made whenever appropriate, in the investment adviser's view, to achieve a Fund's investment objective. The rate of portfolio turnover is calculated by dividing the lesser of the cost of purchases or the proceeds from sales of portfolio securities (excluding short-term U.S. government obligations and other short-term investments) for the particular fiscal year by the monthly average of the value of the portfolio securities (excluding short-term U.S. government obligations and short-term investments) owned by a Fund during the particular fiscal year. The rate of portfolio turnover is not a limiting factor when management deems portfolio changes appropriate to achieve a Fund's stated objective. However, it is possible that, under certain circumstances, a Fund may have to limit its short-term portfolio turnover to permit it to qualify as a "regulated investment company" under the Internal Revenue Code of 1986, as amended (the "Code"). 18 61 MANAGEMENT OF THE COMPANY The business of the Company is managed by its Board of Directors which elects officers responsible for the day to day operations of the Funds and for the execution of the policies formulated by the Board of Directors. Several of the Directors and officers of the Company are Directors or officers of SGAM Corp. or Societe Generale, Paris, France, the indirect owner of one hundred percent (100%) of the outstanding voting securities of SGAM Corp. Jean-Marie Eveillard, the President and a Director of the Company, owns 100% of SGAM Corp.'s non-voting Series B common stock which represents 19.9% of the total capital of SGAM Corp. The following table sets forth the principal occupation or employment of the members of the Board of Directors and principal officers of the Company. Each of the following persons is also a Director and/or officer of SoGen Variable Funds, Inc.
POSITION HELD PRINCIPAL OCCUPATION NAME (AGE) AND ADDRESS WITH THE COMPANY DURING PAST FIVE (5) YEARS ---------------------- ---------------- -------------------------- Philippe Collas,49,*....... Chairman of the Head of Asset Management at 2 Place de la Coupole Board and Societe Generale since 92078 Paris La Defense Director September 1995. Head of Cedex Human Resource France Management at Societe Generale from prior to 1994. Jean-Marie Eveillard, President and Director and President or 59,*(1)................. Director Executive Vice President 1221 Avenue of the of SGAM Corp. from prior Americas to 1994. New York, NY 10020 Fred J. Meyer, 68, (2)..... Director Vice Chairman of Omnicom 437 Madison Avenue Group, Inc. from 1998. New York, NY 10022 Chief Financial Officer of Omnicom Group Inc. from prior to 1994 to 1998. Director of Novartis Corporation, and Zurich-American Insurance Cos. Dominique Raillard, Director President of Act 2 60,(2).................. International (consulting) 15, boulevard Delessert since July 1995. Group 75016 Paris France Executive Vice President of Promodes (consumer products) -- U.S. Companies Division from prior to 1994 to 1995. Nathan Snyder, 64,(1)(2)... Director Independent Consultant from 163 Parish Rd. S. prior to 1994. New Canaan, CT 06840 Philip J. Bafundo, 36,..... Vice President, Secretary and Treasurer, 1221 Avenue of the Secretary and SGAM Corp. from prior to Americas Treasurer 1994. Certified Public New York, NY 10020 Accountant (New York).
19 62
POSITION HELD PRINCIPAL OCCUPATION NAME (AGE) AND ADDRESS WITH THE COMPANY DURING PAST FIVE (5) YEARS ---------------------- ---------------- -------------------------- Edwin S. Olsen, 59,*....... Vice President Vice President, SG Cowen 1221 Avenue of the Securities Corporation Americas from prior to 1994. New York, NY 10020 Elizabeth Tobin, 45,*...... Vice President Senior Vice President, SGAM 1221 Avenue of the Corp. since 1998, Americas Associate Portfolio New York, NY 10020 Manager from December 1996, Securities Analyst, SGAM Corp. from prior to 1994 to 1996. Charles de Vaulx, 37,*..... Vice President Senior Vice President, SGAM 1221 Avenue of the Corp. since 1998, Americas Associate Portfolio New York, NY 10020 Manager from December 1996, Securities Analyst, SGAM Corp. from prior to 1994 to 1996.
- --------------- * An "interested person" of the Company as defined in the 1940 Act. (1) Member of the Executive Committee. When the Board of Directors is not in session, the Executive Committee may generally exercise most of the powers of the Board of Directors. (2) Member of the Audit Committee. The Company makes no payments to any of its officers for services. However, currently each of the Company's Directors who are not officers or employees of SGAM Corp., FDI or Societe Generale are paid by the Company an annual fee of $12,000 and a fee of $2,000 for each meeting of the Company's Board of Directors and for each meeting of any Committee of the Board that they attend (other than those held by telephone conference call). Each Director is reimbursed by the Company for any expenses he may incur by reason of attending such meetings or in connection with services he may perform for the Company. During the fiscal year ended March 31, 1999, an aggregate of $100,000 was paid or accrued for Directors' fees and expenses by the Company. See Note 2 of Notes to the Financial Statements on page 32 of the Company's Annual Report to Shareholders for a description of various transactions during the Company's most recent fiscal year between the Company and its Directors and affiliates of its Directors. COMPENSATION OF DIRECTORS AND CERTAIN OFFICERS. The following table sets forth information regarding compensation of Directors by the Company and by the fund complex of which the Company is a part for the fiscal year ended March 31, 1999. Officers of the Company and Directors who are interested persons of the Company do not receive any compensation from the Company of any other fund in the fund complex which is a U.S. registered investment company. In the column headed "Total Compensation From Registrant and Fund Complex Paid to Directors," the number in parentheses indicates the total number of boards in the fund complex on which the Director served as of March 31, 1999. 20 63 COMPENSATION TABLE FISCAL YEAR ENDED MARCH 31, 1999
TOTAL PENSION OR COMPENSATION RETIREMENT FROM BENEFITS ESTIMATED REGISTRANT AGGREGATE ACCRUED ANNUAL AND FUND COMPENSATION AS PART BENEFITS COMPLEX FROM OF FUND UPON PAID TO NAME OF PERSON, POSITION REGISTRANT EXPENSES RETIREMENT DIRECTORS ------------------------ ------------ ---------- ---------- ------------ Philippe Collas**, Director and Chairman..................... $ -- N/A N/A $ -- Jean-Marie Eveillard**, Director and President................ $ -- N/A N/A $ -- Fred J. Meyer*, Director........ $32,000 N/A N/A $42,000(2) Dominique Raillard*, Director... $22,400 N/A N/A $29,400(2) Nathan Snyder*, Director........ $36,000 N/A N/A $48,000(2)
- --------------- * Member of the Audit Committee. ** "Interested person" of the Company as defined in the 1940 Act because of the affiliation with SGAM Corp., the Fund's investment adviser. As of June 30, 1999, the Directors and officers of the Company, as a group, owned 3.01% and 18.46% of the shares of SoGen Gold Fund and SoGen Money Fund, respectively. As of such date, the Directors and officers of the Company, as a group, owned less than 1% of the outstanding shares of capital stock of each of SoGen International Fund and SoGen Overseas Fund. As of June 30, 1999, the Company knows of no person who owns beneficially more than 5% of the capital stock of any Fund, other than the following: SoGen Money Fund Jean Marie Eveillard & Elizabeth M. Eveillard 3 East 84th Street New York, NY 10028-0407 18.38% As of June 30, 1999, the Company knows of no person who owns of record more than 5% of the capital stock of any Fund, other than the following: SoGen International Fund Charles Schwab & Co., Inc. 101 Montgomery Street San Francisco, CA 94104-4122 8.00% 21 64 SoGen Overseas Fund Charles Schwab & Co., Inc. 101 Montgomery Street San Francisco, CA 94104-4122 24.57% The Northern Trust Company FBO Phycor Savings Plan DV P.O. Box 92956 Chicago, IL 60675-9256 5.12% SoGen Gold Fund Charles Schwab & Co., Inc. 101 Montgomery Street San Francisco, CA 94104-4122 8.43% SoGen Money Fund Bear Stearns Securities Corp. 1 Metrotech Center North Brooklyn, NY 11201-3870 29.15% While the Company is a Maryland corporation, certain of its Directors and officers are non-residents of the United States and may have all, or a substantial part, of their assets located outside the United States. None of the officers or Directors has authorized an agent for service of process in the United States. As a result, it may be difficult for U.S. investors to effect service of process upon non-U.S. Directors or officers within the United States or effectively to enforce judgments of courts of the United States predicated upon civil liabilities of such officers or Directors under the federal securities laws of the United States. INVESTMENT ADVISER AND OTHER SERVICES As described in the Company's Prospectus, SGAM Corp. is the Company's investment adviser and, as such, manages the International Fund, the Overseas Fund, the Gold Fund and the Money Fund. SGAM Corp. was incorporated in Delaware in February 1990, and is indirectly owned by Societe Generale, one of France's largest banks. The persons named below are affiliated with the Company and are also affiliated persons of SGAM Corp. or Societe Generale. The capacity in which such persons are affiliated with the Company and SGAM Corp. or Societe Generale is also indicated. 22 65
OFFICE HELD OFFICE HELD WITH SGAM CORP., NAME WITH THE COMPANY SOCIETE GENERALE - ---- ---------------- ---------------------------- Philippe Collas......... Chairman of the Board Head of Asset Management, and Director Societe Generale. Chairman of the Board and Director, SGAM Corp. Jean-Marie Eveillard.... President and Director President and Director, SGAM Corp. Philip J. Bafundo....... Vice President, Secretary and Treasurer, Secretary and Treasurer SGAM Corp. Charles de Vaulx........ Vice President Senior Vice President and Associate Portfolio Manager, SGAM Corp. Edwin S. Olsen.......... Vice President Vice President, SG Cowen Securities Corporation Elizabeth Tobin......... Vice President Senior Vice President and Associate Portfolio Manager, SGAM Corp.
Under its investment advisory contracts with the Company, which became effective August 17, 1993 (in the case of SoGen Overseas Fund, SoGen Gold Fund and SoGen Money Fund) and July 31, 1998 (in the case of SoGen International Fund), SGAM Corp. furnishes the Company with investment advice consistent with each Fund's stated investment objective. SGAM Corp. also furnishes the Company with office space and certain facilities required for the business of the Funds, and statistical and research data, and pays any compensation and expenses of the Company's officers. Until July 31, 1998, SGAM Corp. provided substantially similar services for SoGen International Fund, Inc. pursuant to an investment advisory contract which became effective April 26, 1990 and was amended on July 10, 1992. Pursuant to an Agreement and Plan of Merger dated April 27, 1998, SoGen International Fund, Inc. became a portfolio of the Company. The Company adopted a new investment advisory contract, on behalf of SoGen International Fund, with SGAM Corp. on substantially the same terms as the previous investment advisory contract in effect for SoGen International Fund, Inc. In return for the services listed above, each Fund pays SGAM Corp. a fee at the annual rate of the average daily value of the Fund's net assets as follows: International Fund................... 1.00% of the first $25 million and 0.75% of the excess over $25 million Overseas Fund........................ 0.75% Gold Fund............................ 0.75% Money Fund........................... 0.40%
23 66 Advisory fees are paid monthly, except that advisory fees for the International Fund are paid quarterly. The annual fee rates listed above for the International Fund, the Overseas Fund and the Gold Fund, respectively, are higher than the rate of fees paid by most U.S. mutual funds that invest primarily in domestic equity securities. The Company believes, however, that the advisory fee rates are not higher than the rate of fees paid by most other mutual funds that invest significantly in foreign equity securities. For the fiscal year ended March 31, 1999, SoGen International Fund, SoGen Overseas Fund, SoGen Gold Fund and SoGen Money Fund paid investment advisory fees in the amount of $23,196,530, $5,519,451, $201,757 and $122,538, respectively. No advisory fee waiver or expense reimbursement for SoGen Money Fund was required for the year ended March 31, 1999; however, SGAM Corp. voluntarily reimbursed the Class I shares of SoGen International Fund and SoGen Overseas Fund in the amounts of $30,997 and $9,036, respectively. For the fiscal year ended March 31, 1998, SoGen International Fund, SoGen Overseas Fund and SoGen Gold Fund paid investment advisory fees in the amount of $30,954,079, $7,798,589 and $283,300, respectively. For the same period, $37,399 of the investment advisory fee of $60,497 for SoGen Money Fund was waived by SGAM Corp. For the fiscal year ended March 31, 1997, SoGen International Fund, SoGen Overseas Fund and SoGen Gold Fund paid investment advisory fees in the amount of $26,404,805, $5,899,446 and $449,545, respectively. For the same period, $38,752 of the investment advisory fee of $43,519 for SoGen Money Fund was waived by SGAM Corp. Under the investment advisory contracts between the Company and SGAM Corp., the investment adviser is responsible for the management of each of the Funds' portfolios and constantly reviews their holdings in the light of its own research analyses and those of other relevant sources. Reports of portfolio transactions are given regularly to the Directors of the Company, who review each Fund's portfolio at meetings held four times a year. Under the terms of the investment advisory contracts, a Fund will discontinue the use of the term "SoGen" in a Fund's name or the use of any marks or symbols owned by the investment adviser if the investment adviser ceases to act as a Fund's investment adviser or if the investment adviser so requests. As of the date of this Statement of Additional Information, SGAM Corp. did not own any shares of the Company. A Fund may, with the approval of the Company's Board of Directors, from time to time enter into arrangements with institutions to provide sub-transfer agent services and other related services where a number of persons hold Fund shares through one account registered with the Fund's transfer agent, DST Systems, Inc. ("DST") in the name of that institution. Under those arrangements, a Fund may compensate the institution rendering such services on a per sub-account basis. 24 67 DISTRIBUTION OF THE FUNDS' SHARES The Company and FDI have entered into an underwriting contract pursuant to which FDI offers, as agent, shares of each Fund to investors, either directly or through selected securities dealers, in states and countries in which a Fund's shares are qualified and in which FDI is qualified as a dealer or where such qualification is not required. Pursuant to the Distribution Plan and Agreement (the "Plan") between the Company and FDI, adopted by the International Fund (on behalf of its Class A shares), the Overseas Fund (on behalf of its Class A shares) and the Gold Fund in accordance with the provisions of Rule 12b-1 under the Investment Company Act of 1940, each participating class of shares of a Fund may pay FDI a quarterly distribution fee of up to, on an annual basis, 0.25% of the average daily net asset value attributable to that class of shares. Under the Plan, FDI must apply the full amount of fees received from a Fund to the payment of fees to dealers for their assistance in the sale of the shares of the participating class of the Fund and for the provision to shareholder services and for other distribution related expenses such as the payment of advertising costs and the payment for the preparation, printing and distribution of prospectuses to investors. For the fiscal year ended March 31, 1999, the Company paid SG Cowen Securities Corporation ("SG Cowen"), its previous principal underwriter, $9,494,471 pursuant to the predecessor Plan, $2,278,408 of which was paid by SG Cowen to Societe Generale and subsidiaries of Societe Generale. FDI and SGAM Corp. bear the Company's distribution costs to the extent they exceed payments under the Plan. The Class I shares of the International Fund, the Class I shares of the Overseas Fund and the Money Fund do not participate in the Plan. Substantially all of the amounts paid to FDI under the Plan (and the Distribution Plan) are paid to dealers selling shares of the Funds, including Societe Generale and certain of its subsidiaries, for their assistance in selling shares of the Funds. A dealer selling shares normally receives a fee, calculated on a quarterly basis, equal to 0.25% of the average daily net asset value attributable to the participating classes of shares of a Fund held by the dealer's customers. SG Cowen has retained $2,206,097 of the amount paid to it pursuant to the predecessor Plan with respect to the fiscal year ended March 31, 1999, as reimbursement for expenses incurred in promoting the sale of the Company's shares, including printing and distribution of prospectuses and sales literature for advertising. Distribution expenses incurred in any fiscal year which are not reimbursed from payments under the Plan accrued in such fiscal year will not be carried over for payment under the Plan in any subsequent year. The Plan provides that it will continue in effect only so long as its continuance is approved at least annually by the directors of the Company and by the directors who are not interested persons of the Company and who have no direct or indirect financial interest in the operation of the Plan or in any agreements relating to the Plan (the "Independent Directors"). In the case of an agreement relating to the Plan, the Plan provides that such agreement may be terminated, without penalty, by a vote of a majority of the Independent Directors, or, as to a Fund, by a majority of the Fund's outstanding voting securities on 60 days' written notice to FDI, and provides further that such agreement will automatically terminate in the event of its assignment. The Plan also states that it may not be amended to increase the maximum amount of the payments thereunder without the approval of a majority of the outstanding voting securities (as defined on page 15) of a Fund. 25 68 No material amendment to the Plan will, in any event, be effective unless it is approved by a vote of the Directors and the Independent Directors of the Company. When the Company seeks an Independent Director to fill a vacancy on the Board or as an addition to the Board or as a nominee for election by stockholders, the selection or nomination of the Independent Director is, under resolutions adopted by the Directors contemporaneously with their adoption of the Plan, committed to the discretion of the Independent Directors. With respect to fiscal year ended March 31, 1999, SG Cowen, Societe Generale (including subsidiaries) and SGAM Corp. received commissions and other compensation in connection with operation of the Company and as follows: SoGen Funds, Inc.
(1) (2) (3) (4) (5) NET UNDERWRITING DISCOUNTS AND COMMISSIONS ON NAME OF PRINCIPAL DEALER REPURCHASES OR BROKERAGE OTHER UNDERWRITER OR AFFILIATE COMMISSIONS REDEMPTIONS COMMISSIONS COMPENSATION ------------------------ ------------ -------------- ----------- ------------ SG Cowen...................... $411,546 $0 $170,726 $ 9,494,471* Societe Generale (including subsidiaries).............. $ 13,990 $0 $ 61,725 $22,782,408** SGAM Corp..................... $ 0 $0 $ 0 $29,040,276***
- --------------- * For the period reported, the Company's distribution fee paid or payable to SG Cowen pursuant to the Plan. Substantially all of such amount was paid or will be paid to dealers, including Societe Generale and certain subsidiaries, selling shares of the Company. ** Amounts paid to Societe Generale as a dealer of the Company's shares pursuant to the Plan, which amount is included in the $9,494,471 paid to SG Cowen under the Plan. *** The Company's investment advisory fee paid or payable to SGAM Corp. for the fiscal year ended March 31, 1999. During the three years ended March 31, 1997, 1998 and 1999, the aggregate amount of sales charges on sales of the Company's shares was $2,098,953, $1,523,084, and $1,969,898, respectively. Sales charges for the fiscal year ended March 31, 1999 are higher because they reflect sales charges on sales of shares of SoGen International Fund, which became a series of the Company pursuant to an Agreement and Plan of Merger dated April 27, 1998. During the years ended March 31, 1997 and 1998, SG Cowen received net underwriting discounts and dealer commissions of $462,833, and $285,064, respectively, and Societe Generale received dealer commissions of $8,694 and $2,742, respectively. During the two years ended March 31, 1997 and 1998, the aggregate amount of sales charges on sales of SoGen International Fund, Inc.'s shares was $14,480,187 and $7,485,957, respectively. During the years ended March 31, 1997 and 1998, SG Cowen received net underwriting discounts and dealer commissions of $2,670,354 and $1,208,699, respectively, and Societe Generale received dealer discounts of $126,060 and $52,682, respectively. 26 69 The investment advisory and underwriting contracts continue in effect from year to year so long as the continuance of each contract is specifically approved at least annually by the Board of Directors or by a vote of a majority of the outstanding voting securities of each Fund (as defined on page 15). In addition, the terms of each contract and the renewals thereof must be approved annually by the vote of a majority of the directors who are not "interested persons" (as defined in the 1940 Act) of SGAM Corp., FDI or the Company. Each contract will terminate automatically in the event of its assignment (as defined in the 1940 Act) and may be terminated, without penalty, on sixty days' written notice at the option of either party thereto or by a vote of a majority of the outstanding voting securities of a Fund. COMPUTATION OF NET ASSET VALUE Each Fund computes its net asset value once daily as of the close of trading on each day the New York Stock Exchange is open for trading. The Exchange is closed on the following days: New Year's Day, Rev. Dr. Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset value per share is computed by dividing the total current value of the assets of a Fund, less its liabilities, by the total number of shares outstanding at the time of such computation. The Money Fund values its portfolio instruments at amortized cost, which means that they are valued at their acquisition cost, as adjusted for amortization of premium or discount, rather than at current market value. Calculations are made to compare the value of the Fund's investments valued at amortized cost with market values. Market valuations are obtained by using actual quotations provided by market makers, estimates of market value, or values obtained from yield data relating to classes of money market instruments published by reputable sources at the mean between the bid and asked prices for the instruments. The amortized cost method of valuation seeks to maintain a stable $1.00 per share net asset value even where there are fluctuations in interest rates that affect the value of portfolio instruments. Accordingly, this method of valuation can in certain circumstances lead to a dilution of a shareholder's interest. If a deviation of 1/2 of 1% or more were to occur between the net asset value per share calculated by reference to market values and the Money Fund's $1.00 per share net asset value or if there were any other deviation which the Board of Directors believed would result in a material dilution to shareholders or purchasers, the Board of Directors would promptly consider what action, if any, should be initiated. If the Money Fund's net asset value per share (computed using market values) declined, or were expected to decline, below $1.00, the Board of Directors might temporarily reduce or suspend dividend payments in an effort to maintain the net asset value at $1.00 per share. As a result of such reduction or suspension of dividends or other action by the Board of Directors, an investor would receive less income during a given period than if such a reduction or suspension had not taken place. Such action could result in investors receiving no dividend for the period during which they hold their shares and receiving, upon redemption, a price per share lower than that which they paid. On the other hand, if the Money Fund's net asset value per share (computed using market values) were to increase, or were anticipated to increase above $1.00, the Board of Directors might supplement dividends in an effort to maintain the net asset value at $1.00 per share. 27 70 A portfolio security, other than a bond, which is traded on a U.S. national securities exchange or a securities exchange abroad is normally valued at the price of the last sale on the exchange as of the close of business on the date on which assets are valued. If there are no sales on such date, such portfolio securities will be valued at the mean between the closing bid and asked prices. Securities, other than bonds, traded in the over-the-counter market are valued at the mean between the last bid and asked prices prior to the time of valuation, except if such unlisted security is among the NASDAQ designated "Tier 1" securities in which case it is valued at its last sale price. All bonds, whether listed on an exchange or traded in the over-the-counter market, for which market quotations are readily available are valued at the mean between the last bid and asked prices received from dealers in the over-the-counter market in the United States or abroad, except that when no asked price is available, bonds are valued at the last bid price alone. Short-term investments maturing in sixty days or less are valued at cost plus interest earned, which approximates value. Securities for which current market quotations are not readily available are valued at fair value as determined in good faith by the Company's Board of Directors. A make-up sheet showing the computation of the total offering price, using as a basis the value of the Company's portfolio securities and other assets and its outstanding securities as of March 31, 1999, appears as the Statement of Assets and Liabilities for the Company. HOW TO PURCHASE SHARES The methods of buying and selling shares and the sales charges applicable to purchases of shares of a Fund are described in the Company's Prospectus. As stated in the Prospectus, shares of the International Fund, the Overseas Fund and the Gold Fund may be purchased at net asset value by various persons associated with the Company, FDI, SGAM Corp., branches of Societe Generale, certain firms providing services to the Company or affiliates thereof for the purpose of promoting good will with employees and others with whom the Company has business relationships, as well as in other special circumstances. Shares are offered to other persons at net asset value in circumstances where there are economies of selling efforts and sales related expenses with respect to offers to certain investors. TAX STATUS Each Fund intends to qualify annually as a "regulated investment company" under the Code. In order to qualify as a regulated investment company for a taxable year, a Fund must, among other things, (a) derive at least 90% of its gross income from dividends, interest, payments with respect to securities loans, gains from the sale or other disposition of stock, securities or foreign currencies and other income derived with respect to the business of investing in such stock, securities or currencies; (b) diversify its holdings so that, at the end of each fiscal quarter, (i) at least 50% of the market value of its assets is represented by cash, cash items, U.S. government securities, securities of other regulated investment companies and other securities, with such other securities of any one issuer qualifying only if the Fund's investment is limited to an amount not greater than 5% of the Fund's assets or 10% of the voting securities of the issuer, and (ii) not more than 25% of the value of its assets is invested in the securities of any one issuer (other than U.S. government securities or securities of other regulated investment companies); and (c) distribute at least 90% of 28 71 its investment company taxable income (which includes, among other items, dividends, interest and net short-term capital gains in excess of net long-term capital losses) for the year. As a regulated investment company, each Fund generally will not be subject to U.S. federal income tax on its investment company taxable income and net capital gains (the excess of net long-term capital gains over net short-term capital losses), if any, that it distributes to shareholders. Each Fund intends to distribute to its shareholders, at least annually, substantially all of its investment company taxable income and net capital gains. Amounts not distributed on a timely basis in accordance with a calendar year distribution requirement are subject to a non-deductible 4% excise tax. To prevent imposition of the excise tax, each Fund must distribute during each calendar year an amount equal to the sum of (1) at least 98% of its ordinary income (not taking into account any capital gains or losses) for the calendar year, (2) at least 98% of its capital gains in excess of its capital losses (adjusted for certain ordinary losses) for the one-year period ending on October 31 of the calendar year, and (3) any ordinary income and capital gains for previous years that were not distributed during those years. A distribution will be treated as paid on December 31 of the current calendar year if it is declared by a Fund in October, November or December with a record date in such a month and paid by the Fund during January of the following calendar year. Such distributions will be taxable to shareholders in the calendar year in which the distributions are declared, rather than the calendar year in which the distributions are received. To prevent application of the excise tax, each Fund intends to make its distributions in accordance with the calendar year distribution requirement. Different tax treatment, including a penalty on pre-retirement distributions, is accorded accounts maintained as IRAs. Shareholders should consult their tax advisors for more information. Dividends paid out of a Fund's investment company taxable income will be taxable to a U.S. shareholder as ordinary income. To the extent that a portion of a Fund's income consists of dividends paid by U.S. corporations, a portion of the dividends paid by the Fund may be eligible for the corporate dividends-received deduction. It is expected that a small portion of the dividends paid by the International Fund, the Overseas Fund and the Gold Fund will so qualify. Distributions of net capital gains, if any, designated as capital gains distributions are taxable to individual shareholders at a maximum 20% capital gains rate, regardless of how long the shareholder has held the Fund's shares, and are not eligible for the dividends-received deduction. Shareholders receiving distributions in the form of additional shares, rather than cash, generally will have a cost basis in each such share equal to the net asset value of a share of the Fund on the reinvestment date. Shareholders will be notified annually as to the U.S. federal tax status of distributions, and shareholders receiving distributions in the form of additional shares will receive a report as to the net asset value of those shares. Investments by a Fund in zero coupon securities will result in income to the Fund equal to a portion of the excess of the face value of the securities over their issue price (the "original issue discount") each year that the securities are held, even though the Fund receives no interest payments. This income is included in determining the amount of income which the Fund must distribute to maintain its status as a regulated investment company and to avoid the payment of federal income tax and the 4% excise tax. If a Fund invests in certain high yield original issue discount obligations issued by U.S. corporations, a portion of the original issue discount accruing 29 72 on such an obligation may be eligible for the corporate dividends-received deduction. In such event, a portion of the dividends of investment company taxable income received from the Fund by its corporate shareholders may be eligible for this corporate dividends-received deduction if so designated by the Fund in a written notice to shareholders. For the fiscal year ended March 31, 1998, the percentages of net investment income that qualified for the dividends-received deduction for the International Fund, the Overseas Fund, Gold Fund and Money Fund were 6.79%, 0.34%, 28.96% and 0.00%, respectively. Certain foreign currency contracts in which the International Fund, the Overseas Fund and the Gold Fund may invest are "section 1256 contracts." Gains or losses on section 1256 contracts generally are considered 60% long-term and 40% short-term capital gains or losses; however, foreign currency gains or losses (as discussed below) arising from certain section 1256 contracts may be treated as ordinary income or loss. Also, section 1256 contracts held by a Fund at the end of each taxable year (and, generally, for purposes of the 4% excise tax, on October 31 of each year) are "marked-to-market" (that is, treated as sold at fair market value), resulting in unrealized gains or losses being treated as though they were realized. Generally, the hedging transactions undertaken by the International Fund, the Overseas Fund and the Gold Fund may result in "straddles" for U.S. federal income tax purposes. The straddle rules may affect the character of gains (or losses) realized by these Funds. In addition, losses realized by these Funds on positions that are part of a straddle may be deferred under the straddle rules, rather than being taken into account in calculating the taxable income for the taxable year in which the losses are realized. Because only a few regulations implementing the straddle rules have been promulgated, the tax consequences to these Funds of engaging in hedging transactions are not entirely clear. Hedging transactions may increase the amount of short-term capital gains realized by a Fund which is taxed as ordinary income when distributed to shareholders. The International Fund, the Overseas Fund and the Gold Fund may make one or more of the elections available under the Code which are applicable to straddles. If any of these Fund makes any of the elections, the amount, character and timing of the recognition of gains or losses from the affected straddle positions will be determined under rules that vary according to the election(s) made. The rules applicable under certain of the elections may operate to accelerate the recognition of gains or losses from the affected straddle positions. Because the straddle rules may affect the character of gains or losses, defer losses and/or accelerate the recognition of gain or losses from the affected straddle positions, the amount which may be distributed to shareholders, and which will be taxed to them as ordinary income or long-term capital gains, may be increased or decreased as compared to a fund that did not engage in such hedging transactions. Notwithstanding any of the foregoing, a Fund may recognize gain (but not loss) from a constructive sale of certain "appreciated financial positions" if the Fund enters into a short sale, offsetting notional principal contract or forward contract transaction with respect to the appreciated position or substantially identical property. Appreciated financial positions subject to this constructive sale treatment are interests (including options and forward contracts and short sales) in stock, partnership interests, certain actively traded trust instruments and certain debt 30 73 instruments. Constructive sale treatment does not apply to certain transactions closed in the 90-day period ending with the 30th day after the close of the taxable year, if certain conditions are met. If a Fund enters into a short sale of property that becomes substantially worthless, the Fund will recognize gain at that time as though it had closed the short sale. Future Treasury regulations may apply similar treatment to other transactions with respect to property that becomes substantially worthless. Under the Code, gains or losses attributable to fluctuations in exchange rates which occur between the time a Fund accrues receivables or liabilities denominated in a foreign currency and the time the Fund actually collects such receivables, or pays such liabilities, generally are treated as ordinary income or ordinary loss. Similarly, on disposition of debt securities denominated in a foreign currency and on disposition of certain foreign currency contracts, gains or losses attributable to fluctuations in the value of foreign currency between the date of acquisition of the security or contract and the date of disposition also are treated as ordinary gain or loss. These gains or losses, referred to under the Code as "section 988" gains or losses, may increase or decrease the amount of a Fund's investment company taxable income to be distributed to its shareholders as ordinary income. Upon the sale or other disposition of shares of a Fund, a shareholder may realize a capital gain or loss which may be eligible for reduced federal tax rates, generally depending upon the shareholder's holding period for the shares. Any loss realized on a sale or exchange will be disallowed to the extent the shares disposed of are replaced (including shares acquired pursuant to a dividend reinvestment plan) within a period of 61 days beginning 30 days before and ending 30 days after disposition of the shares. In such a case, the basis of the shares acquired will be adjusted to reflect the disallowed loss. Any loss realized by a shareholder on a disposition of Fund shares held by the shareholder for six months or less will be treated as a long-term capital loss to the extent of any distributions of net capital gains received by the shareholder with respect to such shares. Under certain circumstances the sales charge incurred in acquiring shares of a Fund may not be taken into account in determining the gain or loss on the disposition of those shares. This rule applies if shares of a Fund are exchanged within 90 days after the date they were purchased and the new shares are acquired without a sales charge or at a reduced sales charge. In that case, the gain or loss recognized on the exchange will be determined by excluding from the tax basis of the shares exchanged, all or a portion of the amount of the sales charge that was imposed on the acquisition of those shares. This exclusion applies to the extent that the otherwise applicable sales charge with respect to the newly acquired shares is reduced as a result of having incurred the initial sales charge. The portion of the initial sales charge that is excluded from the basis of the exchanged shares is instead treated as an amount paid for the new shares. The International Fund, the Overseas Fund and the Gold Fund may be subject to foreign withholding taxes on income and gains derived from their investments outside the United States. Such taxes would reduce the yield on the Funds' investments. Tax treaties between certain countries and the United States may reduce or eliminate such taxes. If more than 50% of the value of a Fund's total assets at the close of any taxable year consists of stocks or securities of foreign corporations, the Fund may elect, for U.S. federal income tax purposes, to treat any foreign country 31 74 income or withholding taxes paid by the Fund that can be treated as income taxes under U.S. income tax principles, as paid by its shareholders. For any year that either Fund makes such an election, each of its shareholders will be required to include in his income (in addition to taxable dividends actually received) his allocable share of such taxes paid by the Fund, and will be entitled, subject to certain limitations, to credit his portion of these foreign taxes against his U.S. federal income tax due, if any, or to deduct it (as an itemized deduction) from his U.S. taxable income, if any. Generally, a credit for foreign taxes is subject to the limitation that it may not exceed the shareholder's U.S. tax attributable to his foreign source taxable income. With respect to the International Fund, the Overseas Fund and Gold Fund, if the pass through election described above is made, the source of the electing Fund's income flows through to its shareholders. Certain gains from the sale of securities and certain currency fluctuation gains will not be treated as foreign source taxable income. In addition, this foreign tax credit limitation must be applied separately to certain categories of foreign source income, one of which is foreign source "passive income." For this purpose, foreign "passive income" includes dividends, interest, capital gains and certain foreign currency gains. As a consequence, certain shareholders may not be able to claim a foreign tax credit for the full amount of their proportionate share of foreign taxes paid by the Fund. The foreign tax credit limitation rules do not apply to certain electing individual taxpayers who have limited creditable foreign taxes and no foreign source income other than passive investment-type income. The foreign tax credit is eliminated with respect to foreign taxes withheld on dividends if the dividend paying shares are held by the Fund for less than 16 days (46 days in the case of preferred shares) during the 30-day period (90-day period for preferred shares) beginning 15 days (45 days for preferred shares) before the shares become ex-dividend. The foreign tax credit can be used to offset only 90% of the alternative minimum tax (as computed under the Code for purposes of this limitation) imposed on corporations and individuals. If a Fund is not eligible to make the pass-through election described above, the foreign taxes it pays will reduce its income, and distributions by the Fund will be treated as U.S. source income. Each shareholder will be notified within 60 days after the close of the Fund's taxable year whether, pursuant to the election described above, the foreign taxes paid by the Fund will be treated as paid by its shareholders for that year and, if so, such notification will designate (i) such shareholder's portion of the foreign taxes paid to such country and (ii) the portion of the Fund's dividends and distributions that represents income derived from sources within such country. Investments by a Fund in stock of certain foreign corporations which generate largely passive investment-type income, or which hold a significant percentage of assets which generate such income (referred to as "passive foreign investment companies" or "PFICs"), are subject to special tax rules designed to prevent deferral of U.S. taxation of the Fund's share of the PFIC's earnings. In the absence of certain elections to report these earnings on a current basis, regardless of whether the Fund actually receives any distributions from the PFIC, a Fund would be required to report certain "excess distributions" from, and any gain from the disposition of stock of the PFIC, as ordinary income. This ordinary income would be allocated ratably to a Fund's holding period for the stock. Any amounts allocated to prior taxable years would be taxable to the Fund at the highest rate of tax applicable in that year, increased by an interest charge determined as though the amounts were underpayments of tax. Amounts allocated to the year of the distribution or 32 75 disposition would be included in a Fund's net investment income for that year and, to the extent distributed as a dividend to the Fund's shareholders, would not be taxable to the Fund. A Fund may elect to mark to market its foreign investment company stock, resulting in the stock being treated as sold at fair market value on the last business day of each taxable year. Any resulting gain would be reported as ordinary income; any resulting loss and any loss from an actual disposition of the stock would be reported as ordinary loss to the extent of any net gains reported in prior years. Alternatively, the Fund may be able to make an election, in lieu of being taxable in the manner described above, to include annually in income its pro rata share of the ordinary earnings and net capital gain of the foreign investment company, regardless of whether it actually received any distributions from the foreign company. These amounts would be included in the Fund's investment company taxable income and net capital gain which, to the extent distributed by the Fund as ordinary or capital gain dividends, as the case may be, would not be taxable to the Fund. In order to make this election, the Fund would be required to obtain certain annual information from the foreign investment companies in which it invests, which in many cases may be difficult to obtain. Each Fund may be required to withhold U.S. federal income tax at the rate of 31% of all taxable distributions payable to shareholders who fail to provide the Fund with their correct taxpayer identification number or to make required certifications, or who have been notified by the IRS that they are subject to backup withholding. Corporate shareholders and certain shareholders specified in the Code generally are exempt from such backup withholding. Backup withholding is not an additional tax. Any amounts withheld may be credited against the shareholder's U.S. federal income tax liability. Since, at the time of an investor's purchase of a Fund's shares, a portion of the per share net asset value by which the purchase price is determined may be represented by realized or unrealized appreciation in the Fund's portfolio or undistributed income of the Fund, subsequent distributions (or a portion thereof) on such shares may in reality represent a return of his capital. However, such a subsequent distribution would be taxable to such investor even if the net asset value of his shares is, as a result of the distributions, reduced below his cost for such shares. Prior to purchasing shares of the Fund, an investor should carefully consider such tax liability which he might incur by reason of any subsequent distributions of net investment income and capital gains. Fund shareholders may be subject to state, local and foreign taxes on their Fund distributions and redemptions of Fund shares. Also, the tax consequences to a foreign shareholder of an investment in a Fund may be different from those described above. Shareholders are advised to consult their own tax advisers with respect to the particular tax consequences to them of an investment in a Fund. BROKERAGE ALLOCATION SGAM Corp. is responsible for selecting members of securities exchanges, brokers and dealers (such members, brokers and dealers being hereinafter referred to as "brokers") for the execution of a Fund's portfolio transactions and, when applicable, the negotiation of commissions in connection therewith. 33 76 Purchase and sale orders are usually placed with brokers who are selected by SGAM Corp. as being able to achieve "best execution" of such orders. "Best execution" means prompt and reliable execution at the most favorable securities price, taking into account the other considerations as here-in-after set forth. The determination of what may constitute best execution of a securities transaction by a broker involves a number of considerations, including, without limitation, the overall direct net economic result to a Fund (involving both price paid or received and any commissions and other costs paid), the efficiency with which the transaction is effected, the ability to effect the transaction at all where a large block is involved, availability of the broker to stand ready to execute possibly difficult transactions in the future, and the financial strength and stability of the broker. Such considerations are judgmental and are weighed by SGAM Corp. in determining the overall reasonableness of brokerage commissions. While there is no commitment or understanding to do so, subject to its policy of obtaining best execution, a Fund may use affiliates of Societe Generale as brokers in the purchase and sale of securities. For the fiscal years ended March 31, 1997, 1998 and 1999, the Company paid SG Cowen and affiliates of Societe Generale $67,054, $69,602, and $232,451, respectively, in such brokerage commissions for transactions effected on various exchanges. Such commissions paid for the fiscal year ended March 31, 1999 represented 6.40% of the aggregate brokerage commissions paid by the Company during such period and was paid in connection with transactions representing 3.68% of the aggregate dollar amount of all transactions effected by the Company (including principal transactions for which no direct brokerage commissions are paid). Brokerage commission for fiscal year ended March 31, 1999 are higher because they reflect commissions paid by SoGen International Fund, which became a series of the Company pursuant to an Agreement and Plan of Merger dated April 27, 1998. For the fiscal years ended March 31, 1997 and 1998, the SoGen International Fund, Inc. paid SG Cowen and affiliates of Societe Generale $124,672 and $103,244, respectively, in such brokerage commissions for transactions effected on various exchanges. FDI may not, acting as principal, sell any security or other property to, or purchase any security or other property from, a Fund, except to the extent that such purchase or sale may be permitted by an order, rule or regulation of the Securities and Exchange Commission. SGAM Corp. is authorized to allocate brokerage and principal business to brokers other than SG Cowen Securities Corporation (but not excluding other affiliates of Societe Generale) who have provided brokerage and research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), for the Company and/or other accounts, if any, for which SGAM Corp. exercises investment discretion (as defined in Section 3(a)(35) of the 1934 Act) and, as to transactions as to which fixed minimum commission rates are not applicable, to cause a Fund to pay a commission for effecting a securities transaction in excess of the amount another broker would have charged for effecting the transaction, if SGAM Corp. in making the selection in question determines in good faith that such amount of commission is reasonable in relation to the value of the brokerage and research services provided by such broker, viewed in terms of either that particular transaction or of SGAM Corp.'s overall responsibilities with respect to a Fund and the other accounts as to which it exercises investment discretion. In reaching such determination, SGAM Corp. is not required to place or attempt to place a specific dollar value on the research or execution services of a broker or on the portion of 34 77 any commission reflecting either of said services. In demonstrating that such determinations were made in good faith, SGAM Corp. must be prepared to show that all commissions were allocated and paid for purposes contemplated by a Fund's brokerage policy; that the research services provide lawful and appropriate assistance to SGAM Corp. in the performance of its investment decision-making responsibilities; and that the commissions paid were within a reasonable range. The determination that commissions were within a reasonable range will be based on any available information as to the level of commissions known to be charged by other brokers on comparable transactions, but there will be taken into account the Company's policies that (i) obtaining a low commission is deemed secondary to obtaining a favorable securities price, since it is recognized that usually it is more beneficial to a Fund to obtain a favorable price than to pay the lowest commission, and (ii) the quality, comprehensiveness and frequency of research studies which are provided for SGAM Corp. are useful to SGAM Corp. in performing its services under the investment advisory contracts with the Company. Research services provided by brokers to SGAM Corp. are considered to be in addition to, and not in lieu of, services required to be performed by SGAM Corp. under such investment advisory contracts. Research services provided by brokers include written reports, responses to specific inquiries and interviews with analysts. These services also include invitations to meetings arranged by such brokers with the management of companies in the Funds' portfolios or in which the Funds may invest. Consistent with the Conduct Rules of the National Association of Securities Dealers, Inc. and subject to obtaining prices at least as favorable as those provided by other qualified brokers, SGAM Corp. may consider sales of shares of a Fund as a factor in the selection of brokers to execute portfolio transactions. Each Fund has been advised by SGAM Corp. that it may combine brokerage orders for the Fund with orders from its other clients (including the other Funds) when placing such orders with brokers for execution. In the event orders are placed for a Fund and one or more other clients for the purchase or sale of the same security, the Fund and each such other client may share in each transaction in the proportion that each customer's order bears to the aggregate of such orders. The Funds' orders are accorded priority over those received from SGAM Corp. for its own account or from any of its officers, directors or employees. While SGAM Corp. is primarily responsible for the allocation of each Fund's portfolio transactions to brokers, its polices and practices in this regard must be consistent with the foregoing and are periodically reviewed by the Company's Board of Directors. In this connection, the directors periodically review and discuss with SGAM Corp. the commissions paid by each Fund and, in transactions where a Fund pays commissions which are in excess of the commissions other brokers would have charged, SGAM Corp.'s determinations that such higher commissions are reasonable in relation to the value of the brokerage and research services. According to the Company's records, the amount of brokerage commissions paid by the Company during the fiscal year ended March 31, 1999, which was attributable to research services was $3,265,441, in connection with transactions amounting to $2,138,310,479. During the fiscal years ended March 31, 1999, 1998 and 1997, the Company paid total brokerage commissions of $3,632,838, $1,335,957, and $1,028,722, respectively. During the fiscal years ended March 31, 1998 and 1997, SoGen International Fund, Inc. paid total brokerage commissions of $2,286,967 and $2,138,878, respectively. 35 78 CUSTODY OF PORTFOLIO Domestic portfolio securities of each Fund are held pursuant to a custodian agreement between the Company and Investors Fiduciary Trust Company, 127 West 10th Street, Kansas City, MO 64105. Certain of such securities may be deposited in the book-entry system operated by the Federal Reserve System or with the Depository Trust Company. The Company's sub-custodian, State Street Bank and Trust, holds domestic securities issued in physical form. Pursuant to a Global Custody Agreement between the Company and The Chase Manhattan Bank ("Chase"), 4 Chase MetroTech Center, Brooklyn, NY 11245, foreign securities may be held by certain foreign sub-custodians which are participants in the Global Investor Services Division of Chase and in certain foreign branches of Chase. INDEPENDENT AUDITORS The Company's independent auditors are KPMG LLP, Certified Public Accountants, 757 Third Avenue, New York, NY 10017. KPMG LLP audits each Fund's annual financial statements and renders its report thereon, which is included in the Annual Report to Shareholders. FINANCIAL STATEMENTS The Company's financial statements and notes thereto appearing in the March 31, 1999 Annual Report to Shareholders and the report thereon of KPMG LLP, Certified Public Accountants, appearing therein, are incorporated by reference in this Statement of Additional Information. The Fund will furnish, without charge, a copy of the Annual Report to Shareholders on request. All such requests should be directed to the Secretary of the Fund, at 1221 Avenue of the Americas, New York, NY 10020. 36 79 APPENDIX RATINGS OF INVESTMENT SECURITIES The rating of a rating service represents the service's opinion as to the credit quality of the security being rated. However, the ratings are general and are not absolute standards of quality or guarantees as to the creditworthiness of an issuer. Consequently, the Funds' investment adviser believes that the quality of debt securities in which a Fund invests should be continuously reviewed. A rating is not a recommendation to purchase, sell or hold a security, because it does not take into account market value or suitability for a particular investor. When a security has received a rating from more than one service, each rating should be evaluated independently. Ratings are based on current information furnished by the issuer or obtained by the ratings services from other sources which they consider reliable. Ratings may be changed, suspended or withdrawn as a result of changes in or unavailability of such information, or for other reasons. The following is a description of the characteristics of ratings used by Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Corporation ("S&P"). MOODY'S RATINGS. Aaa -- Bonds rated Aaa are judged to be the best quality. They carry the smallest degree of investment risk and are generally referred to as "giltedge." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. Although the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such bonds. Aa -- Bonds rated Aa are judged to be high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa bonds or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risk appear somewhat larger than in Aaa bonds. A -- Bonds rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. Baa -- Bonds rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Ba -- Bonds rated Ba are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. A-1 80 B -- Bonds rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Caa -- Bonds rated Caa are of poor standing. Such bonds may be in default or there may be present elements of danger with respect to principal or interest. Ca -- Bonds rated Ca represent obligations which are speculative in a high degree. Such bonds are often in default or have other marked shortcomings. S&P RATINGS. AAA -- Bonds rated AAA have the highest rating. Capacity to pay principal and interest is extremely strong. AA -- Bonds rated AA have a very strong capacity to pay principal and interest and differ from AAA bonds only in small degree. A -- Bonds rated A have a strong capacity to pay principal and interest, although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than bonds in higher rated categories. BBB -- Bonds rated BBB are regarded as having an adequate capacity to pay principal and interest. Whereas they normally exhibit protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay principal and interest for bonds in this capacity than for bonds in higher rated categories. BB -- B -- CCC -- CC -- Bonds A-1 -- A-rated BB, B, CCC and CC are regarded, on balance, as predominantly speculative with respect to the issuer's capacity to pay interest and repay principal in accordance with the terms of the obligation. BB indicates the lowest degree of speculation among such bonds and CC the highest degree of speculation. Although such bonds will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions. A-2 81 PART C OTHER INFORMATION ITEM 23. EXHIBITS
EXHIBIT - ------- (a)(1) -- Articles of Incorporation of the Registrant.* (a)(2) -- Articles of Amendment and Restatement.* (a)(3) -- Articles Supplementary* (b) -- By-Laws of the Registrant as amended through August 17, 1993.* (c) -- Specimen Certificates representing shares of Common Stock($.001 par value).* (d)(1) -- Investment Advisory Contract between the Registrant and Societe Generale Asset Management Corp. ("SGAM Corp.") (Overseas, Gold and Money Funds only)* (d)(2) -- Investment Advisory Contract between the Registrant and Societe Generale Asset Management Corp. (International Fund only)* (e)(1) -- Underwriting Agreement between the Registrant and Fund Distributors, Inc. ("FDI")** (e)(2) -- Form of Selling Group Agreement* (f) -- Not applicable (g)(1) -- Custody Agreement between the Registrant and Investors Fiduciary Trust Company.* (g)(2) -- Transfer Agency and Registrar Agreement between the Registrant and DST Systems, Inc.* (g)(3) -- Global Custody Agreement between the Registrant and The Chase Manhattan Bank, N.A. ("Chase")* (g)(4) -- Amendment to Global Custody Agreement between the Registrant and Chase* (h) -- Not applicable (i) -- Opinion and Consent of Dechert Price & Rhoads* (j) -- Consent of KPMG LLP** (k) -- Not applicable (l) -- Investment Representation letter of SGAM Corp.* (m) -- Rule 12b-1 Distribution Plan and Agreement between the Registrant and FDI** (n) -- Financial Data Schedules** (o) -- Multiple Class Plan pursuant to Rule 18f-3* (p) -- Power of Attorney of Messrs. Collas*, Eveillard*, Meyer*, Raillard*, Snyder*
- --------------- * Previously filed as an exhibit to the Registration Statement. ** Filed herewith. C-1 82 ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT None. ITEM 25. INDEMNIFICATION Registrant is incorporated under the laws of the State of Maryland and is subject to Section 2-418 of the Corporations and Associations Article of the General Corporation Law of the State of Maryland controlling the indemnification of directors and officers. Since Registrant has its executive offices in the State of New York, and is qualified as a foreign corporation doing business in such State, the persons covered by the foregoing statute may also be entitled to and subject to the limitations of the indemnification provisions of Section 721-726 of the New York Business Corporation Law. The general effect of these statutes is to protect directors, officers, employees and agents of the Registrant against legal liability and expenses incurred by reason of their positions with the Registrant. The statutes provide for indemnification for liability for proceedings not brought on behalf of the corporation and for those brought on behalf of the corporation, and in each case place conditions under which indemnification will be permitted, including requirements that the indemnified person acted in good faith. Under certain conditions, payment of expenses in advance of final disposition may be permitted. The By-Laws of the Registrant make the indemnification of its directors, officers, employees and agents mandatory subject only to the conditions and limitations imposed by the above-mentioned Section 2-418 of Maryland Law and by the provisions of Section 17(h) of the Investment Company Act of 1940 as interpreted and required to be implemented by SEC Release No. IC-11330 of September 4, 1980. In referring in its By-Laws to, and making indemnification of directors subject to the conditions and limitations of, both Section 2-418 of the Maryland Law and Section 17(h) of the Investment Company Act of 1940, as amended (the "1940 Act"), the Registrant intends that conditions and limitations on the extent of the indemnification of directors and officers imposed by the provisions of either Section 2-418 or Section 17(h) shall apply and that any inconsistency between the two will be resolved by applying the provisions of said Section 17(h) if the condition or limitation imposed by Section 17(h) is the more stringent. In referring in its By-Laws to SEC Release No. IC-11330 as the source for interpretation and implementation of said Section 17(h), the Registrant understands that it would be required under its By-Laws to use reasonable and fair means in determining whether indemnification of a director or officer should be made and undertakes to use either (1) a final decision on the merits by a court or other body before whom the proceeding was brought that the person to be indemnified ("indemnitee") was not liable to the Registrant or to its security holders by reason of willful malfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office ("disabling conduct") or (2) in the absence of such a decision, a reasonable determination, based upon a review of the facts, that the indemnitee was not liable by reason of such disabling conduct, by (a) the vote of a majority of a quorum of directors who are neither "interested persons" (as defined in the 1940 Act) of the Registrant nor parties to the proceeding, or (b) an independent legal counsel in a written opinion. Also, the Registrant will make advances of attorney's fees or other expenses incurred by a director or officer in his or her defense only if (in addition to his or C-2 83 her undertaking to repay the advance if he or she is not ultimately entitled to indemnification) (1) the indemnitee provides a security for his or her undertaking, (2) the Registrant shall be insured against losses arising by reason of any lawful advances, or (3) a majority of a quorum of the non-interested, non-party directors of the Registrant, or an independent legal counsel in a written opinion, shall determine, based on a review of readily available facts, that there is reason to believe that the indemnitee ultimately will be found entitled to indemnification. In addition, the Registrant will maintain a directors' and officers' errors and omissions liability insurance policy protecting directors and officers against liability for claims made by reason of any acts, errors or omissions committed in their capacity as directors of officers. The policy will contain certain exclusions, among which is exclusion from coverage for active or deliberate dishonest or fraudulent acts and exclusion for fines or penalties imposed by law or other matters deemed uninsurable. ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER SGAM Corp. is the Registrant's investment adviser. In addition to the Registrant, SGAM Corp., acts as investment adviser to SoGen Variable Funds, Inc. and pension funds and sub-adviser to non-affiliated investment funds. Reference is made to "Management of the Fund" in the Statement of Additional Information constituting Part B of this Post-Effective Amendment for a description of the business activities and employment of certain directors and officers of SGAM Corp. within the last two fiscal years of the Registrant. The directors of SGAM Corp. not disclosed in Part B are as follows:
NAME AND ADDRESS PRINCIPAL OCCUPATION ---------------- -------------------- Christian d'Allest................... Director of Foreign Affiliates, 2 Place de la Coupole Societe Generale Asset Management 92078 Paris La Defense Cedex France Jean Roger Huet...................... President, New York Branch, Societe Generale 1221 Avenue of the Americas New York, NY 10020
ITEM 27. PRINCIPAL UNDERWRITERS (a) Funds Distributor, Inc. (the "Distributor") acts as principal underwriter for the following investment companies. American Century California Tax-Free and Municipal Funds American Century Capital Portfolios, Inc. American Century Government Income Trust American Century International Bond Funds American Century Investment Trust American Century Municipal Trust American Century Mutual Funds, Inc. American Century Premium Reserves, Inc. C-3 84 American Century Quantitative Equity Funds American Century Strategic Asset Allocations, Inc. American Century Target Maturities Trust American Century Variable Portfolios, Inc. American Century World Mutual Funds, Inc. The Brinson Funds Dresdner RCM Capital Funds, Inc. Dresdner RCM Equity Funds, Inc. Dresdner RCM Investment Funds, Inc. J.P. Morgan Institutional Funds J.P. Morgan Funds JPM Series Trust JPM Series Trust II LaSalle Partners Funds, Inc. Kobrick Investment Trust Merrimac Series Monetta Fund, Inc. Monetta Trust The Montgomery Funds I The Montgomery Funds II The Munder Framlington Funds Trust The Munder Funds Trust The Munder Funds, Inc. National Investors Cash Management Fund, Inc. Orbitex Group of Funds SG Cowen Funds, Inc. SG Cowen Income + Growth Fund, Inc. SG Cowen Standby Reserve Fund, Inc. SG Cowen Standby Tax-Exempt Reserve Fund, Inc. SG Cowen Series Funds, Inc. St. Clair Funds, Inc. The Skyline Funds Waterhouse Investors Family of Funds, Inc. WEBS Index Fund, Inc. Funds Distributor is registered with the Securities and Exchange Commission as a broker-dealer and is a member of the National Association of Securities Dealers. Funds Distributor is located at 60 State Street, Suite 1300, Boston, Massachusetts 02109. Funds Distributor is an indirect wholly-owned subsidiary of Boston Institutional Group, Inc., a holding company all of whose outstanding shares are owned by key employees. C-4 85 (b) The following is a list of the executive officers, directors and partners of Funds Distributor, Inc. Director, President and Chief -- Marie E. Connolly Executive Officer Executive Vice President -- George A. Rio Executive Vice President -- Donald R. Roberson Executive Vice President -- William S. Nichols Senior Vice President, General -- Margaret W. Chambers Counsel, Chief Compliance Officer, Secretary and Clerk Director, Senior Vice President, -- Joseph F. Tower, III Treasurer and Chief Financial Officer Senior Vice President -- Paula R. David Senior Vice President -- Gary S. MacDonald Senior Vice President -- Judith K. Benson Chairman and Director -- William J. Nutt
(c) Not applicable. ITEM 28. LOCATION OF ACCOUNTS AND RECORDS All accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated thereunder are maintained at the offices of the Registrant, 1221 Avenue of the Americas, New York, NY 10020 with the exception of certain accounts, books and other documents which are kept by the Registrant's custodian, Investors Fiduciary Trust Company, 127 West 10th Street, Kansas City, MO 64105 and registrar and shareholder servicing agent, DST Systems, Inc. ("DST"), P.O. Box 419324, Kansas City, Missouri, 64141-6324. ITEM 29. MANAGEMENT SERVICES Not applicable. ITEM 30. UNDERTAKINGS The Registrant undertakes to call a meeting of shareholders for the purpose of voting upon the question of removal of a director, if requested to do so by the holders of at least 10% of a Fund's outstanding shares, and that it will assist communication with other shareholders as required by Section 16(c) of the Investment Company Act of 1940. C-5 86 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, THE REGISTRANT, SOGEN FUNDS, INC., CERTIFIES THAT THIS POST-EFFECTIVE AMENDMENT NO. 8 TO ITS REGISTRATION STATEMENT MEETS ALL OF THE REQUIREMENTS FOR EFFECTIVENESS PURSUANT TO RULE 485(B) UNDER THE SECURITIES ACT OF 1933 AND HAS DULY CAUSED THIS POST-EFFECTIVE AMENDMENT NO. 8 TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK, ON THE 30TH DAY OF JULY, 1999. SOGEN FUNDS, INC. By: /s/ JEAN-MARIE EVEILLARD ------------------------------------ (Jean-Marie Eveillard, President) PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS POST-EFFECTIVE AMENDMENT NO. 8 HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE --------- ----- ---- /s/ JEAN-MARIE EVEILLARD President and Director July 30, 1999 - --------------------------------------------------- (principal executive Jean-Marie Eveillard officer) /s/ PHILIP J. BAFUNDO Vice President and July 30, 1999 - --------------------------------------------------- Treasurer (principal Philip J. Bafundo financial and accounting officer) * Chairman of the Board July 30, 1999 - --------------------------------------------------- Philippe Collas * Director July 30, 1999 - --------------------------------------------------- Fred J. Meyer * Director July 30, 1999 - --------------------------------------------------- Dominique Raillard * Director July 30, 1999 - --------------------------------------------------- Nathan Snyder *By: /s/ JEAN-MARIE EVEILLARD --------------------------------------------- (Jean-Marie Eveillard, Attorney-in-Fact)
C-6 87 INDEX TO EXHIBITS
EXHIBIT DESCRIPTION - ------- ----------- (e)(1) Underwriting Agreement between SoGen Funds, Inc. and Fund Distributors,Inc. (j) Consent of KPMG LLP (m) Rule 12b-1 Distribution Plan and Agreement between SoGen Funds, Inc. and Funds Distributors, Inc. (n) Financial Data Schedules
EX-99.E.1 2 UNDERWRITING AGREEMENT 1 SOGEN FUNDS, INC. 1221 Avenue of the Americas, 8th Floor New York, New York 10020 July 1, 1999 Funds Distributor, Inc. 60 State Street, Suite 1300 Boston, Massachusetts 02109 Underwriting Agreement Dear Sirs: SoGen Funds, Inc. (the "Company"), a Maryland corporation currently consisting of the portfolios listed on Schedule A, attached hereto, together with all other portfolios subsequently established and made subject to this Agreement, is engaged in the business of an investment company. Its Board of Directors has selected you to act as principal underwriter (as such term is defined in Section 2(a)(29) of the Investment Company Act of 1940, as amended) of the shares of Capital Stock of the Company and you are willing to act as such principal underwriter and to perform the duties and functions of underwriter in the manner and on the conditions hereinafter set forth. Accordingly, the Company hereby agrees with you as follows: 1. Copies of Corporate Documents. The Company will furnish you promptly with copies of any registration statements filed by it with the Securities and Exchange Commission under the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, together with any financial statements and exhibits included therein, and all amendments or supplements thereto hereafter filed. 2. Registration and Sale of Additional Shares. The Company will from time to time use its best efforts to register under the Securities Act of 1933, as amended, such authorized shares of Capital Stock not already so registered as you may reasonably be expected to sell as agent on behalf of the Company. To the end that there will be available for sale such number of shares as you may reasonably be expected to sell, the Company, subject to the necessary approval of its shareholders, will, from time to time as may be necessary, increase the number of authorized shares. This agreement relates to the issue and sale of shares that are duly authorized and registered and available for sale by the Company, including repurchased and redeemed shares if and to the extent that they may be legally sold and if, but only if, the Company sees fit 2 to sell them. You and the Company will cooperate in taking such action as may be necessary from time to time to qualify shares of the Company for sale in New York and in any other states mutually agreeable to you and the Company, and to maintain such qualification, provided that such shares are duly registered under the Securities Act of 1933, as amended. The Company represents to you that all registration statements and prospectuses filed by the Company with the Securities and Exchange Commission under the Securities Act of 1933 and under the Investment Company Act of 1940 with respect to the shares have been prepared in conformity with the requirements of said Acts and rules and regulations of the Securities and Exchange Commission thereunder. As used in this Agreement the terms "registration statement" and "prospectus" shall mean any registration statement and prospectus, including the statement of additional information incorporated by reference therein, filed with the Securities and Exchange Commission and any amendments and supplements thereto which at any time shall have been filed with said Commission. The Company represents and warrants to you that any registration statement and prospectus, when such registration statement becomes effective, will contain all statements required to be stated therein in conformity with said Acts and the rules and regulations of said Commission; that all statements of fact contained in any such registration statement and prospectus will be true and correct when such registration statement becomes effective; and that neither any registration statement nor any prospectus when such registration statement becomes effective will include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Company may, but shall not be obligated to, propose from time to time such amendment or amendments to any registration statement and such supplement or supplements to any prospectus as, in the light of future developments, may, in the opinion of the Company's counsel, be necessary or advisable. If the Company shall not propose such amendment or amendments and/or supplement or supplements within fifteen days after receipt by the Company of a written request from you to do so with respect to a material change, you may, at your option, terminate this Agreement or decline to make offers of the Company's securities until such amendments are made. The Company shall not file any amendment to any registration statement or supplement to any prospectus without giving you reasonable notice thereof in advance; provided, however, that nothing contained in this Agreement shall in any way limit the Company's right to file at any time such amendments to any registration statement and/or - 2 - 3 supplements to any prospectus, of whatever character, as the Company may deem advisable, such right being in all respects absolute and unconditional. 3. Solicitation of Orders. You will use your best efforts (but only in states in which you may lawfully do so) to obtain from investors orders for shares of the Capital Stock of the Company authorized for issue by the Company and registered under the Securities Act of 1933, as amended, provided that you may in your discretion refuse to accept orders for shares from any particular applicant. You may, as agent for the Company, solicit dealers for orders to purchase shares of the Capital Stock of the Company and may enter into selling agreements with any such dealers, the form of such agreements to be as mutually agreed upon, from time to time, by you and the Company. Each dealer must be a member of the National Association of Securities Dealers, Inc. or a foreign dealer not eligible for membership in such Association who has agreed in acting under the selling agreement to abide by the rules and regulations of such Association and not to use the United States mails or any means of interstate commerce in connection with the sales of such shares unless such foreign dealer is registered under the Securities Exchange Act of 1934 or such registration is not required. 4. Sale of Shares. Subject to the provisions of paragraph 5 hereof and to such minimum purchase requirements as may from time to time be currently indicated in the Company's prospectus, you are authorized to sell as agent on behalf of the Company authorized and unissued shares of the Capital Stock of the Company registered under the Securities Act of 1933, as amended. Such sales may be made by you on behalf of the Company by transmitting promptly any orders received by you for the purchase and redemption of shares to the Company's transfer agent. The sales price to the public of such shares shall be the public offering price as defined in paragraph 6 hereof. Whenever in their judgment such action is warranted by unusual market, economic or political conditions, or by abnormal circumstances of any kind deemed by the parties hereto to render sales of the Company's shares not in the best interest of the Company, the parties hereto may decline to accept any orders for, or make any sales of, any shares until such time as those parties deem it advisable to accept such orders and to make such sales and both parties shall mutually agree to any such determination. 5. Sale of Shares to Investors by the Company. Any right granted to you to accept orders for shares or make sales on behalf of the Company will not apply to shares issued in - 3 - 4 connection with the merger or consolidation of any other investment company with the Company or its acquisition, by purchase or otherwise, of all or substantially all the assets of any investment company or substantially all the outstanding shares of any such company, and such right shall not apply to shares that may be offered by the Company to shareholders by virtue of their being shareholders of the Company, including shares issued in payment of any dividend or distribution by the Company. 6. Public Offering Price. All shares of the Company sold to investors by you as agent for the Company will be sold at the public offering price. The public offering price for all accepted orders will be the net asset value per share next computed after receipt of such an order, plus any applicable sales charge adjusted to the nearest full cent, as may from time to time be currently indicated in the Company's prospectus with respect to such order. Net asset value per share shall be computed in the manner provided in the Company's Articles of Incorporation, as now in effect or as it may be amended. The time of receipt of such an order shall be the time of its receipt by you or by a dealer selected by you as provided in paragraph 3 if transmitted on the day of receipt by such dealer to you prior to the close of your business on that day. The Company will not, without notifying you in advance, change the sales charges or dealer discounts applicable to the sales of its shares from those set forth in its then-current prospectus. You may also purchase as principal shares of the Company's Capital Stock at net asset value and sell such shares at the public offering price. 7. Underwriting Discount. The Company shall receive from you the applicable net asset value on all orders for sales of shares of Capital Stock accepted by you as agent of the Company if the net sale price thereof has been deemed, in accordance with the Company's Articles of Incorporation, to be an asset of the Company in connection with a computation of net asset value for the sale of any other shares or the purchase or redemption of any shares. You shall be entitled to retain so much of the difference between the public offering price and the applicable net asset value as is not reallowed by you as a discount to dealers. Such reallowance shall be the same for all dealers and shall conform to such dealer discounts, if any, as may from time to time be currently indicated in the Company's prospectus. You will reimburse the Company for any increase in any issue tax paid by it which is attributable to such sales charge. 8. Notice of Sale; Delivery of Payments. You will promptly notify the Company's transfer agent or shareholders' servicing agent of any orders for sales of shares of Capital Stock - 4 - 5 accepted by you, and you will deliver to the Company's shareholders' servicing agent all payments pursuant to orders for sales accepted by you no later than the first business day following the receipt by you in your home office of such payments, and, unless payment is not required under paragraph 7, in no event later than seven days after the receipt by you of such order, or, in case an extension of time is granted by the National Association of Securities Dealers, Inc., to the dealer submitting the order, in no event later than the expiration of such extension of time. 9. Purchase of Shares. You are authorized to purchase as agent on behalf of the Company shares of the Capital Stock of the Company from record holders thereof. Such purchases may be made by you on behalf of the Company by accepting orders placed with you by such holders. The purchase price per share for all accepted orders will be the net asset value per share next computed after receipt of such an order, in the manner provided in the Company's Articles of Incorporation, as now in effect or as it may be amended. The time of receipt of such an order shall be the time of its receipt by you or by a dealer selected by you as provided in paragraph 3 if transmitted on the day of receipt by such dealer to you prior to the close of your business on that day. You will promptly notify the Company's transfer agent or shareholders' servicing agent of any such order accepted by you and will, if the shares subject to such order have been deemed to be no longer outstanding in connection with a computation of net asset value for the sale of any shares by the Company or the purchase or redemption of any shares by it deliver to such agent a proper request for purchase of such shares by the Company and any stock certificates for such shares not later than the first business day following the receipt by you in your home office of such request and certificates, and in no event later than seven days after the receipt by you of such order. 10. Suspension of Sales and Purchases. If and whenever the determination of asset value is suspended pursuant to the Company's Articles of Incorporation, and such suspension has become effective, until such suspension is terminated no further orders for the sale or purchase of shares shall be accepted by you except such orders placed with you before you had knowledge of the suspension. In addition, the Company reserves the right to suspend sales and purchases and your authority to accept orders for sales and purchases of shares on behalf of the Company if, in the judgment of a majority of its Board of Directors or a majority of the Executive Committee of its Board of Directors, if such Committee exists, it is in the best interests of the Company to do - 5 - 6 so, such suspension to continue for such period as may be determined by such majority; and in that event, no shares will be sold or purchased by the Company or by you on behalf of the Company while such suspension remains in effect except for shares necessary to cover orders accepted by you before you had knowledge of the suspension. The Company will notify you promptly of any such suspension of the determination of net asset value or of any such suspension of sales and purchases of shares. The Company agrees to advise you immediately in writing: (a) of any request by the Securities and Exchange Commission for amendments to the registration statement or prospectus then in effect or for additional information; (b) in the event of the issuance by the Securities and Exchange Commission of any stop order suspending the effectiveness of the registration statement or prospectus then in effect or the initiation of any proceeding for that purpose; (c) of the happening of any event, to the best of its knowledge, which makes untrue any statement of a material fact made in the registration statement or prospectus then in effect or which requires the making of a change in such registration statement or prospectus in order to make the statements therein not misleading; and (d) of all actions of the Securities and Exchange Commission with respect to any amendments to any registration statement or prospectus which may from time to time be filed with the Securities and Exchange Commission that materially affect the performance of your services under this Agreement. 11. Expenses. The Company will pay all fees and expenses in connection with the preparation and filing of any registration statement and prospectus or amendments thereto under the Securities Act of 1933, as amended, covering the issue and sale of its shares and in connection with the qualification of shares for sale in the various states and countries in which the Company shall determine it advisable to qualify such shares for sale, the costs of all stock certificates and the fees and expenses of its transfer agent or shareholders' servicing agent or registrar. It will also pay any issue taxes (subject to partial reimbursement under paragraph 7 hereof). You will pay all expenses of printing prospectuses and other sales literature (except copies of prospectuses and other sales literature which may from time to time be sent to existing shareholders of the Fund), all fees and expenses in connection with your qualification as a dealer in the various states and countries, and all other expenses in connection with the sale and - 6 - 7 offering for sale of the shares of the Company which are not payable by the Company pursuant to the provisions of this paragraph 11. 12. Conformity with Law. You agree that in selling and purchasing the shares of the Company you will duly conform in all respects with the laws of the United States and any state or country in which such shares may be offered for sale by you pursuant to this agreement. 13. Indemnification. You agree to indemnify and hold harmless the Company and each of its directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act of 1933, as amended, against any and all losses, claims, damages, liabilities or litigation expenses (including legal and other expenses) to which the Company or such directors, officers or controlling person may become subject under such Act, under any other statute, at common law or otherwise, arising out of the acquisition of any shares by any person or the sale of any shares by any person to the Company through you which (i) may be based upon any wrongful act by you or any of your employees or representatives, or (ii) may be based upon any untrue statement or alleged untrue statement of a material fact contained in a registration statement or prospectus covering shares of the Company or any amendment thereof or supplement thereto or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading if such statement or omission was made in reliance upon information furnished or confirmed in writing to the Company by you, provided, however, that in no case is your indemnity in favor of a director or officer or any other person deemed to protect such director or officer or other person against any liability to which any such person would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of his duties or by reason of his reckless disregard of obligations and duties under this Agreement. The Company agrees to indemnify and hold harmless you and each of your directors and officers and each person, if any, who controls you within the meaning of Section 15 of the Securities Act of 1933, as amended, against any and all losses, claims, damages, liabilities or litigation expenses (including legal and other expenses) to which you or such directors, officers or controlling person may become subject under such Act, under any other statute, at common law or otherwise, arising out of the acquisition of any shares by any person or the sale of any shares by any person to the Company through you which (i) may be based upon any wrongful act by the Company or any of its employees or representatives, or (ii) except as described in clause - 7 - 8 (ii) of the preceding paragraph, may be based upon any untrue statement or alleged untrue statement or a material fact contained in a registration statement or prospectus covering shares of the Company or any amendment thereof or supplement thereto or omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided, however, that in no case is the Company's indemnity in favor of a director or officer or any other person deemed to protect such director or officer or other person against any liability to which any such person would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of his duties or by reason of his reckless disregard of obligations and duties under this Agreement. You hereby waive any rights to indemnification concerning your obligations and duties hereunder to which you might be entitled under the Company's By-Laws. You are not authorized to give any information or to make any representations on behalf of the Company in connection with the sale or purchase of shares of the Company other than the information and representations contained in a registration statement or prospectus covering shares of the Company, as such registration statement and prospectus may be amended or supplemented from time to time. No person other than you is authorized to act as agent for the Company in connection with the offering or sale of shares of the Company to the public or otherwise. 14. Duration and Termination of This Agreement. This Agreement shall become effective as of the date hereof and will continue for an initial two-year term and will continue from year to year thereafter, but only so long as such continuance is specifically approved at least annually by the Board of Directors of the Company or by vote of a majority of the outstanding voting securities of the Company. In addition, the Company may not renew or perform this Agreement unless the terms thereof and any renewal thereof have been approved by the vote of a majority of directors of the Company who are not interested persons of you or of the Company cast in person at a meeting called for the purpose of voting on such approval. This Agreement may, on 60 days' written notice, be terminated at any time without the payment of any penalty, by the Board of Directors of the Company, by vote of a majority of the outstanding voting securities of the Company, or by you. This Agreement shall automatically terminate in the event of its assignment. In interpreting the provisions of this paragraph 14, the definitions contained in Section 2(a) of the Investment Company Act of 1940, as amended, and Rules - 8 - 9 thereunder (particularly the definitions of "interested person", "assignment", "voting security" and "vote of a majority of the outstanding voting securities") shall be applied. 15. Amendment of This Agreement. No provision of this agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver discharge or termination is sought. If the Company should at any time deem it necessary or advisable in the best interests of the Company that any amendment of this agreement be made in order to comply with the recommendations or requirements of the Securities and Exchange Commission or other governmental authority or to obtain any advantage under state or federal tax laws and should notify you of the form of such amendment, and the reasons therefor, and if you should decline to assent to such amendment, the Company may terminate this agreement forthwith. If you should at any time request that a change be made in the Company's Articles of Incorporation or By-Laws, or in its methods of doing business, in order to comply with any requirements of federal law or regulations of the Securities and Exchange Commission or of a national securities association of which you are or may be a member, relating to the sale of the shares of the Company, and the Company should not make such necessary change within a reasonable time, you may terminate this agreement forthwith. 16. Miscellaneous. (a) The captions in this agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. (b) The Company recognizes that, except to the extent otherwise agreed to by the parties hereto, your directors, officers and employees may from time to time serve as directors, trustees, officers and employees of corporations and business trusts (including other investment companies), and that you or your affiliates may enter into distribution or other agreements with other corporations and trusts. (c) In the event that the Board of Directors of any additional portfolios indicate by vote that such portfolios are to be made parties to this Agreement, whether such portfolios were in existence at the time of the effective date of this Agreement or subsequently formed, Schedule A - 9 - 10 hereto shall be amended to reflect the addition of such new portfolios and such new portfolios shall thereafter become parties hereto. In the event that any of the portfolios on Schedule A terminates its registration as a management investment company, or otherwise ceases operations, Schedule A shall be amended to reflect the deletion of such portfolio and its various classes. (d) This Agreement shall be governed by the internal laws of The Commonwealth of Massachusetts without giving effect to principles of conflicts of laws. (e) If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule, or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors. (f) You hereby represent, warrant and covenant that your computer software and hardware used in the performance of Underwriting Services ("Services") and the provision of the services itself for the Company are Year 2000 Compliant. For the purposes of this Agreement, "Year 2000 compliant" means that the equipment/software: (a) will manage, manipulate, input, accept, process, store and output data involving 4-digit year dates, including single century formulas and multi-century formulas, and will not malfunction or generate incorrect values or invalid results involving such dates; and (b) shall accurately process date/time data from, into and between the 20th and 21st centuries and the years 1999 and 2000 and leap year calculations; and (c) provides that all date-related user and data interface functionalities and data fields include the indication of century; and (d) when used in combination with other information technology shall accurately process date/time data if the other information technology properly exchanges date/time data with it; and (e) will not cause any other item that is otherwise Year 2000 Compliant to fail to be Year 2000 Compliant. In the event of any breach of this warranty, you shall, as expeditiously as possible, replace or repair non-compliant products or systems so as to minimize interruption to the Company's ongoing business operations, time being of the essence, at your sole cost and expense. You also agree that if, as a result of your breach of this Warranty, the Company is subjected to any fine, penalty, or other regulatory sanction or damages, you will reimburse the Company for such fine, penalty or damages and any related costs and expenses, including but not limited to attorney fees and expenses. - 10 - 11 If you are in agreement with the foregoing, please sign the form of acceptance an the accompanying counterpart of this letter and return such counterpart to the Company, whereupon this letter shall become a binding contract. Yours very truly, SOGEN FUNDS, INC. By ________________________________ Vice President The foregoing Agreement is hereby accepted as of the date thereof. FUNDS DISTRIBUTOR, INC. By ___________________________ Name: ________________________ Title: _______________________ - 11 - 12 SCHEDULE A SOGEN FUNDS, INC. SoGen International Fund SoGen Overseas Fund SoGen Gold Fund SoGen Money Fund - 12 - EX-99.J 3 CONSENT OF KPMG LLP 1 INDEPENDENT AUDITORS' CONSENT To the Board of Directors and Shareholders of SoGen Funds, Inc.: We consent to the use of our report dated May 17, 1999, for SoGen Funds, Inc., and to the references to our Firm under the headings "Financial Highlights" in the Prospectus and "Independent Auditors" and "Financial Statements" in the Statement of Additional Information. /s/ KPMG LLP KPMG LLP New York, New York July 29, 1999 EX-99.M 4 RULE 12B-1 DISTRIBUTION PLAN AND AGREEMENT 1 SOGEN FUNDS, INC. RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated July 1, 1999 between SOGEN FUNDS, INC., a Maryland corporation (the "Company"), and FUNDS DISTRIBUTOR, INC., a Massachusetts corporation ("FDI"). The Company is an open-end management investment company and is registered as such under the Investment Company Act of 1940, as amended (the "Act"). The Company currently offers shares of four separate portfolios: SoGen International Fund, SoGen Overseas Fund, SoGen Gold Fund and SoGen Money Fund. FDI acts as the principal underwriter of the Company pursuant to an Underwriting Agreement dated as of July 1, 1999. As permitted by Rule 12b-1 (the "Rule") under the Act, the Company desires to adopt a Distribution Plan and Agreement (the "Plan") pursuant to which SoGen International Fund, SoGen Overseas Fund and SoGen Gold Fund (referred to herein as "International Fund," "Overseas Fund" and "Gold Fund" or "the Fund(s)") may make certain payments to FDI for expenses incurred in connection with the distribution of the Class A shares of each of the Funds. The Company's Board of Directors has determined that there is a reasonable likelihood that the Plan will benefit each of the Funds and its shareholders. Accordingly, the Company hereby adopts this Plan, and the parties hereto enter into this Plan, on the following terms and conditions: 1. Each of the Funds shall pay FDI a quarterly distribution-related fee on the first business day of each quarter in such an amount as FDI may request, provided that each such payment shall be based upon the average daily value of each Fund's net assets attributable to each Fund's Class A shares (as determined on each business day at the time set forth in each Fund's currently effective Prospectus for determining net asset value per share) during the preceding month and shall be calculated at an annual rate not in excess of 0.25%. For purposes of calculating each such monthly fee, the value of a Fund's net assets attributable to Class A shares shall be computed in the manner specified in that Fund's currently effective Prospectus, Statement of Additional Information and Articles of Incorporation for the computation of the value of the Fund's net assets in connection with the determination of the net asset value of shares of the Fund, but shall, with respect to International Fund, exclude from such calculation that portion of International Fund's net assets attributable to shares of International Fund sold before the effective date of the Rule 12b-1 Distribution Plan and Agreement relating to SoGen International Fund, Inc. dated November 14, 1985 as amended and restated as of February 4, 1994 or any stock dividends on such shares whether payable 1 2 after or before such effective date. For purposes of this Plan, a "business day" is any day the New York Stock Exchange is open for trading. 2. FDI shall be obligated to use all amounts received from each Fund under this Plan for (i) payments to broker-dealers and other financial intermediaries for their assistance in the distribution of the Fund's Class A shares and (ii) otherwise promoting the sale of the Fund's Class A shares, such as by paying for the printing and distribution of Prospectuses sent to prospective investors, the preparation, printing and distribution of sales literature and the expenses associated with media advertisements and telephone correspondence. No broker-dealer shall receive payments under the Plan which, on an annualized basis, exceed 0.25% of net asset value of Fund Class A accounts originated by the broker-dealer. All other agreements relating to the implementation of this Plan (the "related agreements") shall be in writing, and such agreements shall be subject to termination, without penalty, on not more than sixty days' written notice to any other party to the agreement, in accordance with the provisions of clauses (a) and (b) of paragraph 6 hereof. 3. This Plan shall become effective only after approval by (a) a majority of the Board of Directors of each Fund, including a majority of the Directors who are not "interested persons" (as defined in the Act) of the Fund and who have no direct or indirect financial interest in the operation of the Plan or in any related agreements (the "Independent Directors"), pursuant to a vote cast in person at a meeting called for the purpose of voting on the Plan, and (b) the holders of a majority of the outstanding voting securities of each class of shares of that Fund (as defined in the Act). Related agreements shall be subject to approval by the Company's Directors in the manner provided in clause (a) of the preceding sentence. 4. This Plan and any related agreements shall continue in effect with respect to a Fund for a period of more than one year from the date of their adoption or execution only so long as such continuance is approved at least annually by a majority of the Board of Directors of the Company, including a majority of Independent Directors, pursuant to a vote cast in person at a meeting called for the purpose of voting on the continuance of this Plan and any related agreements. 5. This Plan may be amended at any time with respect to a Fund with the approval of a majority of the Board of Directors of the Company, provided that (a) any material amendment of this Plan must be approved by the Company's Directors in accordance with procedures set forth in paragraph 4 hereof, and (b) any amendment to increase materially the amount to be expended by a Fund pursuant to this Plan must also be approved by the vote of the holders of a majority of the outstanding voting securities of each affected class of shares of that Fund (as defined in the Act). 2 3 6. This Plan may be terminated with respect to a class or a Fund at any time, without the payment of any penalty, by (a) the vote of a majority of the Board of Directors of the Company, (b) the vote of a majority of the Independent Directors or (c) the vote of the holders of a majority of the outstanding voting securities of each affected class of shares of that Fund (as defined in the Act). 7. While this Plan is in effect, the selection and nomination of the Directors who are not "interested persons" of the Company (as defined in the Act) shall be committed to the discretion of the Directors then in office who are not "interested persons" of the Company. 8. To the extent that this Plan constitutes a plan of distribution adopted pursuant to the Rule, it shall remain in effect as such so as to authorize the use of a Fund's assets in the amounts and for the purposes set forth herein, notwithstanding the occurrence of the Plan's assignment (as defined in the Act). To the extent this Plan concurrently constitutes an agreement relating to the implementation of the plan of distribution, it shall terminate automatically in the event if its assignment, and a Fund may continue to make payments pursuant to this Plan only (a) upon the approval of the Board of Directors in accordance with the procedures set forth in paragraph 4 hereof, and (b) if the obligations of FDI under this Plan are to be performed by any organization other than FDI, upon such organization's adoption and assumption in writing of all provisions of this Plan as a party hereto. 9. FDI shall give the Company the benefit of FDI's best judgment and efforts in rendering services under this Plan. As an inducement to FDI's undertaking to render these services, the Company agrees that FDI shall not be liable under this Plan for any mistakes in judgment or in any other event whatsoever except for lack of good faith, provided that nothing in this Plan shall be deemed to protect or purport to protect FDI against any liability to the Company or its stockholders to which FDI would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of FDI's duties under this Plan or by reason of FDI's reckless disregard of its obligation and duties hereunder. 10. FDI may also make payments out of its own funds for costs and expenses associated with the distribution and sale of a Fund's Class A shares, including payments to the persons and for the purposes set forth in Section 2 hereof. 11. FDI shall prepare and furnish to the Company's Board of Directors, and the Company's Board of Directors shall review at least quarterly, a written report setting forth all amounts expended pursuant to this Plan and any 3 4 related agreements and the purposes for which such expenditures were made. 12. The Company shall preserve copies of this Plan, any related agreements and any reports made pursuant to this Plan for a period of not less than six years from the date of this Plan or any such related agreement or report. For the first two years, copies of such documents shall be preserved in an easily accessible place. 13. The provisions of this Plan are severable for each class of shares and each Fund and if provisions of the Plan applicable to a particular class or Fund are terminated, the remainder of the Plan provisions applicable to the other remaining classes or Funds shall not be invalidated thereby and shall be given full force and effect. IN WITNESS WHEREOF, each of the parties has caused this instrument to be executed in its name and on its behalf by its duly authorized representatives as of the date first above written. SOGEN FUNDS, INC. By:______________________________ Title: Vice President FUNDS DISTRIBUTOR, INC. By:_______________________________ Title: 4 EX-27.1 5 FINANCIAL DATA SCHEDULE
6 0000906352 SOGEN FUNDS INC 001 SOGEN INTERNATIONAL FUND - CLASS A YEAR MAR-31-1999 APR-01-1998 MAR-31-1999 2,086,884,655 2,053,714,305 50,782,626 3,299,058 0 2,107,795,989 1,683,278 0 31,324,977 33,008,225 0 2,008,525,603 90,605 147,176 17,114,763 0 70,915,205 0 (21,888,442) 2,074,787,734 46,610,292 76,373,645 0 38,030,823 84,953,114 154,530,025 (551,941,439) (312,458,300) 0 (110,081,179) (202,559,669) 0 9,518,460 (78,431,205) 12,341,631 (1,960,666,504) 53,248,050 107,472,676 0 0 23,196,530 0 38,226,216 3,090,339,570 27.42 0.63 (2.73) (0.83) (1.59) 0 22.90 1.23
EX-27.2 6 FINANCIAL DATA SCHEDULE
6 0000906352 SOGEN FUNDS INC 002 SOGEN INTERNATIONAL FUND - CLASS I YEAR MAR-31-1999 APR-01-1998 MAR-31-1999 2,086,884,655 2,053,714,305 50,782,626 3,299,058 0 2,107,795,989 1,683,278 0 31,324,977 33,008,255 0 2,008,525,603 90,605 147,176 17,144,763 0 70,915,205 0 (21,888,442) 2,074,787,734 46,610,292 76,373,645 0 38,030,823 84,953,114 154,530,025 (551,941,439) (312,458,300) 0 (110,081,179) (202,559,669) 0 9,518,460 (78,431,205) 12,341,631 (1,960,666,504) 53,248,050 107,472,676 0 0 23,196,530 0 38,226,216 3,090,339,570 24.59 0.30 (1.47) 0 (0.52) 0 22.90 1.01
EX-27.3 7 FINANCIAL DATA SCHEDULE
6 0000906352 SOGEN FUNDS INC 003 SOGEN OVERSEAS FUND - CLASS A YEAR MAR-31-1999 APR-01-1998 MAR-31-1999 517,822,580 446,956,785 14,932,428 2,015,518 0 463,904,731 841,380 0 7,059,928 7,901,308 0 518,888,383 40,127 74,482 0 (4,831,658) 9,369,652 0 (67,463,081) 456,003,423 14,773,855 11,059,225 0 9,483,274 16,349,806 36,094,404 (119,285,337) (66,841,127) 0 (36,599,856) (47,483,829) 0 17,331,533 (58,385,826) 6,699,590 (551,100,211) 15,129,045 20,957,339 0 0 5,519,451 0 9,523,169 737,624,341 13.52 .15 (.97) (.57) (.77) 0 11.36 1.29
EX-27.4 8 FINANCIAL DATA SCHEDULE
6 0000906352 SOGEN FUNDS INC 004 SOGEN OVERSEAS FUND - CLASS I YEAR MAR-31-1999 APR-01-1998 MAR-31-1999 517,822,580 446,956,785 14,932,428 2,015,518 0 463,904,731 841,380 0 7,059,928 7,901,308 0 518,888,383 40,127 74,482 0 (4,831,658) 9,369,652 0 (67,463,081) 456,003,423 14,773,855 11,059,225 0 9,483,274 16,349,806 36,094,404 (119,285,337) (66,841,127) 0 (36,599,856) (47,483,829) 0 17,331,533 (58,385,826) 6,699,590 (551,100,211) 15,129,045 20,957,339 0 0 5,519,451 0 9,523,169 737,624,341 12.31 .41 (1.10) 0 (.25) 0 11.37 1.03
EX-27.5 9 FINANCIAL DATA SCHEDULE
6 0000906352 SOGEN FUNDS INC 005 SOGEN GOLD FUND YEAR MAR-31-1999 APR-01-1998 MAR-31-1999 29,376,540 18,212,319 3,215,038 1,059 0 21,428,316 0 0 3,246,838 3,246,838 0 47,261,145 3,343 4,307 236,382 0 (18,153,439) 0 (11,165,853) 18,181,478 929,405 48,691 0 437,595 540,501 (11,673,931) 3,980,773 (7,152,657) 0 721,767 0 0 3,021,250 (4,107,084) 121,893 (13,313,772) (882,267) (5,122,132) 0 0 201,757 0 441,933 26,931,460 731 .16 (1.82) (.21) 0 0 5.44 1.62
EX-27.6 10 FINANCIAL DATA SCHEDULE
6 0000906352 SOGEN FUNDS INC 006 SOGEN MONEY FUND YEAR MAR-31-1999 APR-01-1998 MAR-31-1999 44,902,920 44,902,920 16,723 41,099 0 44,960,742 0 0 382,751 382,751 0 44,533,413 44,578 19,043 0 0 0 0 0 44,577,991 0 1,609,085 0 208,863 1,400,222 0 0 1,400,222 0 0 0 0 120,259,724 95,946,703 1,222,356 25,535,377 0 0 0 0 122,538 0 209,872 30,444,638 1.00 0 0 .05 (.05) 0 1.00 .69
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