Wall Street is full of bull and bears. But there may soon be one less.

The board of directors of the Bull & Bear U.S. Government Securities Fund has asked shareholders to approve changing the name of the closed-end fund to the Bexil Corporation. The proposed name change was precipitated by the fund's announcement this past August that it would abandon its all-bond focus and change its investment strategy, shifting 35 percent of its assets into equity securities, according to a recently filed proxy statement. The fund is managed by Bull & Bear Advisers, a wholly-owned subsidiary of Bull & Bear Group in New York.

This is not the first time the manager has chosen to shed its Bull & Bear name in favor of a more corporate title, said Gregg Wolper, closed-end funds analyst at Morningstar. This past July the board sought shareholder approval to change the name of a sister closed-end fund, the Bull & Bear Government Income Fund, to the Tuxis Corporation and to change the fund's investment mandate.

The former municipal bond fund sought approval to invest up to 50 percent of fund assets in a variety of U.S. and non-U.S. equities, including common and preferred stocks, convertible securities, REITs, inverse floaters, and commodities.

The shift to a balanced philosophy has caused one shareholder activist, Karpus Investment Management of Pittsford, New York, to step up its dispute with management. Karpus, which currently owns approximately a 16 percent stake for its clients in the Bull & Bear U.S. Government Fund, has been challenging the fund manager since last year.

In the Fall of 1997, Karpus sought but failed to elect its own members to the closed-end fund's board. Karpus alleged that the adviser covertly changed the shareholder proxy meeting time and place at the last minute. George Karpus, president of the suburban Rochester, New York firm charges that the fund adviser is only looking after its own self-interest, not the shareholders'. Bull & Bear did not return repeated calls.

In October of 1996, the adviser took the unusual step of converting the Bull & Bear U.S. Government Fund, which had been an open-ended fund for 10 years, to a closed-end fund. A year later, the adviser tried to shift the fund's focus to the balanced sector, a move opposed by Karpus who, under contractual agreements with clients, can only invest in fixed-income funds. According to Karpus, Bull & Bear Advisers withdrew the 1997 proposal at Karpus' insistence. The identical 1998 proposal, however, is apparently non-negotiable, he said.

In recent months, the battle between fund adviser and activist shareholder has heated up once more. Earlier this year, in a bold move, Karpus sought to rally shareholder support to oust Bull & Bear as the fund adviser, and suggested his firm as the fund's new investment manager. But Karpus dropped his bid when he was challenged over efforts to gain access to the names and addresses of shareholders.

Karpus had pointed to the fund's dismal performance and persistent discount as reasons for making a change. According to Morningstar, Bull & Bear U.S. Government Fund's three-year average return based on net asset value was 5.25 percent, placing it in the 98th percentile. Its five-year average return of 4.15 percent put it in the 95th percentile. Moreover, as recently as October 16, the fund was trading at a discount of more than nine percent, said Karpus.

Investors would be even more poorly served if Bull & Bear were allowed to manage any fund with an equity component, Karpus says. Bull & Bear also manages a handful of open-ended equity funds, including funds under the Bull & Bear, Rockwood Funds and Midas Fund names. Karpus charges that the performance of at least three equity funds has suffered at the hands of the same adviser. According to CDA/Wiesenberger, the three-year return for the open-ended Bull & Bear U.S. and Overseas Fund is .89 percent, ranking it 197th out of 210 global equity funds.

The Bull & Bear Special Equities Fund, with a three-year return of -1.67 percent puts it 116 within its peer group of 125 aggressive growth funds. And the Bull & Bear Gold Investors Fund, with a three-year return of -27.68 percent ranks 35th out of 36 funds in its peer group. But Bull & Bear is clawing back. This past February, the fund filed suit against Karpus in the Southern District of New York alleging securities violations. And, the fund on October 28, filed an amended complaint asking the court to require Karpus to divest its clients' holdings in Bull & Bear U.S. Government Fund, according to the filings.

Bull & Bear is trying to permanently silence him, Karpus says. The newest filing also demands that Karpus return short-term profits he allegedly wrongly realized for his clients. It also asks the court to prohibit Karpus from voting his clients' shares and distributing his own proxy materials for the upcoming shareholder vote. A date for the vote has not been announced.

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