THE MASTERS' SELECT EQUITY FUND
SUPPLEMENT DATED OCTOBER 21, 1998
TO PROSPECTUS DATED NOVEMBER 15, 1997
AS SUPPLEMENTED ON AUGUST 7, 1998
NOTICE TO EXISTING AND PROSPECTIVE SHAREHOLDERS:
EFFECTIVE OCTOBER 21, 1998 THE ADVISOR TO MASTERS' SELECT EQUITY FUND REPLACED
ONE OF THE SUB-ADVISORS TO THE FUND. ALL REFERENCES IN THE FUND'S PROSPECTUS
DATED NOVEMBER 15, 1997 TO MR. JEAN-MARIE EVEILLARD, SOCIETE GENERALE ASSET
MANAGEMENT CORPORATION AND THE SOGEN FUNDS ARE HEREBY DELETED.
THE FOLLOWING INFORMATION SHOULD BE INSERTED ON PAGE 4 OF THE PROSPECTUS:
THE ADVISOR HAS CONTRACTED WITH INVESTMENT MANAGERS TO MANAGE THE DAY-TO-DAY
STOCK PICKING FOR BOTH FUNDS. THE INDIVIDUAL PORTFOLIO MANAGERS ARE AS FOLLOWS:
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MASTERS' SELECT EQUITY MASTERS' SELECT INTERNATIONAL
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SHELBY DAVIS: CEO and Chief Investment Officer BRUCE BEE: President and Chief Investment Officer
of Davis Selected Advisers, L.P., the advisor to of Bee & Associates.
Davis New York Venture Fund.
FOSTER FRIESS (AND TEAM): President of Friess HELEN YOUNG HAYES: Vice President of Janus
Associates and also lead portfolio manager of the Capital Corporation and portfolio manager of the
Brandywine Fund. Janus Overseas and Janus Worldwide Funds.
MASON HAWKINS: Chief Executive Officer of DAVID HERRO: Director of International Equities
Southeastern Asset Management, Inc., and co- and a partner at Harris Associates, L.P., and also
manager of the Longleaf Partners Fund. lead portfolio manager for Oakmark International
and Oakmark International Small Cap Funds.
ROBERT SANBORN: Executive Vice President of DAN JAWORSKI: Founder and Chief Investment
Harris Associates, L.P.and portfolio manager of the Officer of BPI Global Asset Management, LLP.
Oakmark Fund. Formerly the portfolio manager for the STI Classic
International Equity Fund.
SPIROS "SIG" SEGALAS: President and Chief MARK YOCKEY: Partner at Artisan Partners, LP and
Investment Officer of Jennison Associates Capital the portfolio manager of the Artisan International
Corporation and portfolio manager of Harbor Fund.
Capital Appreciation Fund.
DICK WEISS: Member of the Executive Committee
at Strong Capital Management, Inc. and co-manager
of the Strong Common Stock Fund.
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THE FOLLOWING INFORMATION SHOULD BE INSERTED ON PAGE 7 OF THE PROSPECTUS:
MASTERS' SELECT EQUITY FUND PORTFOLIO MANAGERS
ROBERT SANBORN
HARRIS ASSOCIATES, L.P.
Robert Sanborn is the portfolio manager for the segment of the Fund's assets run
by Harris Associates, L.P. (Harris Associates), 2 North LaSalle Street, Chicago,
IL 60602. Sanborn has been in the investment business since 1983 and has been
employed by Harris Associates since 1988, where he is a portfolio manager.
Sanborn has been the portfolio manager of the OAKMARK FUND since its inception
in 1991. Overall, Sanborn is responsible for management of more than $7 billion
at Harris, which manages approximately $16 billion as a firm.
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Approximately 20% of the Fund's assets are managed by Robert Sanborn. He employs
a disciplined, value-oriented approach to investing that he combines with a
long-term outlook and a bias for concentration in his portfolios. Sanborn seeks
to identify and buy the stocks of companies that are out of favor or have been
overlooked by the marketplace, generally seeking a price that is 60% or less of
his estimate of private market value of the company. Under normal circumstances,
he holds those stocks until the stock price converges with at least 90% of his
estimate of the private market value of the company. To determine private market
value, Sanborn and the Harris team of analysts study a company's ability to
generate free cash flow. Sanborn ignores short-term market movements, and
employs a three to five-year time horizon when evaluating the prospects of a
business. He believes it is critical to own companies in which the interests of
management are aligned with those of the shareholders, and also considers
franchise value and barriers to market entry when evaluating the long-term
outlook of a company. The majority of the companies Sanborn will hold in the
Fund are mid- and large- sized, although he will have the flexibility to hold
smaller companies and foreign securities if he finds them to be of compelling
value.
THE FOLLOWING INFORMATION SHOULD BE INSERTED ON PAGE 10 OF THE PROSPECTUS:
MASTERS' SELECT EQUITY FUND MANAGEMENT SUMMARY
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PORTFOLIO MANAGER INITIAL ALLOCATION INVESTMENT SIZE OF STOCK PICKING
OF FUND PORTFOLIO EXPERIENCE/RELEVANT COMPANIES STYLE
FUND EXPERIENCE
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Shelby Davis 20% Over 30 years/Davis Mostly large-cap Growth at a
New York Venture Fund reasonable price
since 1969
Foster Friess and 10% Over 25 years/Brandywine Small- and High earnings growth
team Fund since 1986 mid-cap
Mason Hawkins 20% Over 20 years/Longleaf No market-cap Value and global.
Partners Fund since 1987 restrictions At least 50% invested
in the U.S.
Robert Sanborn 20% 15 years/Oakmark All sizes but mostly Value
Fund since 1991 mid- and large-cap
Spiros "Sig" 20% Over 30 years/Harbor Mostly large-cap High earnings
Segalas Captial Appreciation growth
Fund since 1990
Dick Weiss 10% Over 20 years/Strong Small- and Growth at a
Common Stock Fund mid- cap reasonable price
since 1991
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THE FOLLOWING INFORMATION SHOULD BE INSERTED ON PAGE 19 OF THE PROSPECTUS:
BREAKDOWN OF EXPENSES
The Masters' Select Equity Fund pays an investment advisory fee to the Advisor
each month, at the annual rate of 1.10% of the Fund's average daily net assets.
The Advisor pays fees to the investment managers of the Equity Fund at the
approximate aggregate annual rate of 0.66%. Effective October 21, 1998, the
Advisor will voluntarily waive a portion of the advisory fee equal to
approximately 0.02% of the Fund's average daily net assets for as long as the
existing group of investment managers are employed to sub-advise the Fund.
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