Global Strategy fund mergers to simplify international line-up

TORONTO, July 10 /CNW/ - Global Strategy Financial Inc. announced today a proposal to merge, pending unitholder and regulatory approval, several specialty funds into existing core international funds, effective after the close of business September 30, 1998. The proposal to merge the funds reflects the goals of improving the cost-efficiency of the international investment funds and consolidating small funds that have decreasing investor interest.

"The costs associated with administering these types of specialty funds are quite high,'' said Richard Wernham, Global Strategy's founder and chief executive officer. "Each of the funds to be merged is small - we simply have not seen sufficient investor demand to support their continuation.''

The merging funds are small and may continue to decline in size and so run the risk of being unable to achieve investors' performance objectives over the long term. The average size of the funds to be discontinued is less than $10 million in net assets. In total, these funds represent approximately 1 per cent of the assets currently managed by Global Strategy.

"Our firm has demonstrated an ongoing commitment to controlling the management expense ratios for all of our investment funds,'' continued Wernham. "These mergers would eliminate approximately $700,000 in annual direct expenses. The larger continuing funds would have the potential to achieve further MER reductions through increased operating efficiencies.''

Global Strategy will be amending its fund prospectus to reduce the management fee rate on each of the continuing equity funds by 25 basis points, a 10% reduction for each of the World Companies Fund and Diversified World Equity Fund, effective October 1, 1998.

Effective after close of business today, units of the merging funds are no longer available for purchase, while units of the continuing funds continue to be offered for sale. Over the next few months, each merging fund will propose to its unitholders that the fund be merged into the continuing fund indicated below, subject to regulatory approval as required. For each merger approved, unitholders of the merging fund will become unitholders of the continuing fund.

    Merging Fund          to merge into        Continuing Fund
    Asia Fund                                  World Companies Fund
    Japan Fund
    Latin America Fund

    Diversified Asia Fund                      Diversified World Equity Fund
    Diversified Japan Plus Fund
    Diversified Latin America Fund

    Diversified Foreign Bond Fund              Diversified Bond Fund

All costs specifically related to effecting the mergers will be borne by Global Strategy - no commissions or other fee will be charged by Global Strategy to unitholders in connection with these mergers.

The completion of the proposed mergers would reduce the number of advisers for the firm's international portfolios as Jardine Fleming, Platinum Asset Management and Prospect Asset Management would no longer be advising the discontinued funds for Global Strategy. In addition, by mutual agreement, A I M Capital Management and Perpetual Asset Management will no longer advise Global Strategy on U.S. Equity Fund and World Companies Fund, respectively. As a result of all these actions, Global Strategy achieves a strengthened and simplified line-up of nine international funds advised by six pre-eminent external portfolio advisers, including Rothschild Asset Management (all nine funds), Schroder Capital Management International (four funds), Gartmore Capital Management, Montgomery Asset Management, Capital International and Guinness Flight Asset Management (each advising one fund).

About Global Strategy

Global Strategy is an independent, Canadian-based investment management firm that manages approximately $6.5 billion in assets for more than 400,000 investors. The company was founded in 1983 and is associated with the N. M. Rothschild group of companies.

Important information about Global Strategy funds is contained in their simplified prospectus. Obtain a copy from your broker, investment fund dealer or Global Strategy and read it carefully before investing. The indicated rates of return are historical compound annual total returns and do not take into account sales, redemption, distribution or optional charges payable by any unitholder, which would have reduced returns. Past returns are not necessarily indicative of future returns. Investment returns and unit values will fluctuate. Mutual funds are not CDIC-insured. This information is not, and should not be construed as, investment advice to any party. Investment advice should be obtained from a broker or dealer.

(x) Global Strategy is a registered trademark of Global Strategy Financial Inc.

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For further information: David D'Agostino, National Sales Manager with Global Strategy Financial Inc. at (416) 966-8058 or 1-800-387-1229

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