UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: November 2, 2004
S&P 500(R) GEARED(SM) Fund Inc.
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(Exact name of registrant as specified in its charter)
Maryland 333-118070 33-1103720
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(State or other jurisdiction Commission (IRS Employer
of incorporation) File Number) Identification No.)
4 World Financial Center 5th, Floor New York, NY 10080
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 212-449-8118
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Item 7.01 - Regulation FD Disclosure
On November 2, 2004, S&P 500(R) GEARED(SM) Fund Inc. has issued the following
press release:
S&P 500(R) GEARED(SM) FUND INC. ANNOUNCES ESTIMATED FIRST YEAR ANNUAL
RETURN CAP TO BE APPROXIMATELY 12.33%
NEW YORK, November 2, 2004, S&P 500(R) GEARED(SM) Fund Inc. (NYSE: GRE)
today announced the Fund's expected Maximum Index Participation level and Annual
Return Cap for the first annual period.
The Fund's investment objective is to provide total returns, exclusive of
fees and expenses of the Fund, linked to the annual performance of the S&P 500
Composite Stock Price Index (the "S&P 500(R) Index" or "Index"). Where the Index
has negative returns for an annual period (approximately one year), the Fund
seeks to provide annual price returns that track the performance of the Index on
a one-for-one basis over the annual period. Where the performance of the Index
is positive for an annual period, the Fund seeks to deliver a "geared" return
equal to approximately three times the annual price returns of the Index up a to
a maximum index participation level (the "Maximum Index Participation"). "Price
returns" means that the performance of the Index reflects only the price
movements of the common stocks included in the Index and does not reflect any
dividends declared or paid on those stocks. Regardless of whether the annual
price returns of the Index are positive or negative, to the extent the Fund
receives dividends on its long S&P 500(R) portfolio, the Fund will distribute
those dividends (exclusive of fees and expenses) to its shareholders. The Fund
will not participate in any Index returns in excess of the Maximum Index
Participation, and as a result the Fund's performance over an annual period will
be subject to a maximum annual return cap (the "Annual Return Cap").
Based on terms available when the S&P 500(R) GEARED(SM) Fund Inc. commenced
operations, the actual Maximum Index Participation and actual Annual Return Cap
are approximately 4.11% and 12.33% accordingly. These figures are subject to
change until December 10, 2004, depending on whether the Fund is required to
issue new shares pursuant to an overallotment option available to members of the
Fund's underwriting syndicate. The overallotment option consists of 1,012,500
shares, at $20 per share. Exercise of all or a portion of the overallotment
option would increase the Fund's assets and could increase or decrease the
Maximum Index Participation and Annual Return Cap, depending on market
conditions.
In instances where the return of the Index exceeds the Annual Return Cap,
the Fund will under-perform the Index. In future years, the Annual Return Cap
could be higher or lower than the Annual Return Cap for the first annual period
and could possibly be less than 1%. There can be no assurance that the Fund will
achieve its investment objective or be able to structure its investments as
anticipated. The Fund is not intended as a complete investment program.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereto duly authorized.
S&P 500(R) GEARED(SM) Fund Inc.
(Registrant)
Date: November 2, 2004 By: /s/ Allan J. Oster
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Name: Allan J. Oster
Title: Vice President, Secretary and
Chief Legal Officer