THE MASTERS' SELECT INTERNATIONAL FUND
SUPPLEMENT DATED SEPTEMBER 27, 1999
TO PROSPECTUS DATED APRIL 30, 1999
NOTICE TO EXISTING AND PROSPECTIVE SHAREHOLDERS:
EFFECTIVE SEPTEMBER 24, 1999, THE ADVISOR TO MASTERS' SELECT INTERNATIONAL FUND
REPLACED ONE OF THE SUB-ADVISORS TO THE FUND. ALL REFERENCES IN THE FUND'S
PROSPECTUS DATED APRIL 30, 1999 TO MR. BRUCE BEE AND BEE & ASSOCIATES ARE HEREBY
DELETED.
THE FOLLOWING INFORMATION SHOULD BE INSERTED ON PAGE 9 OF THE PROSPECTUS:
THE FOLLOWING TABLE PROVIDES A DESCRIPTION OF THE FIVE INVESTMENT MANAGERS. A
DETAILED DISCUSSION OF THE MANAGEMENT STRUCTURE OF THE FUND BEGINS ON PAGE 20.
<TABLE>
<CAPTION>
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Investment
Initial Allocation Experience/Relevant
Investment Manager of Fund Assets Fund Experience Size of Companies Stock-Picking Style
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<S> <C> <C> <C> <C>
HELEN YOUNG HAYES 22.5% Since 1984, Janus All sizes, but Growth at a
Overseas Fund and mostly large reasonable price
Janus Worldwide Fund companies
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DAVID HERRO 22.5% Since 1986/Oakmark All sizes, but Value
International Fund and mostly large and
Oakmark International mid-sized companies
Small Cap Fund
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DAN JAWORSKI 22.5% Since 1988/STI Classic Mostly large Value
International Fund companies
(2/95-4/97) and
Princor World Fund
(12/88-4/93)
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THEODORE TYSON 10% Since 1981/ All sizes Growth
American Century
International Fund
(6/91-3/97)
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MARK YOCKEY 22.5% Since 1981/ Artisan All sizes, but Growth at a
International Fund mostly large reasonable price.
and United companies
International Growth
Fund (1990-11/96)
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</TABLE>
THE FOLLOWING INFORMATION SHOULD BE INSERTED ON PAGE 12 OF THE PROSPECTUS:
Each 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 before any waivers.
The Advisor, not the Funds, is responsible for payment of the advisory fees to
the investment managers, each of whom is compensated monthly on the basis of the
assets committed to his or her individual discretion. The Advisor pays fees to
the investment managers of the Equity Fund at the approximate aggregate annual
rate of 0.66%. The Advisors pays fees to the investment managers of the
International Fund at the aggregate annual rate of 0.5625%. The Advisor is
waiving a portion of the management fees equal to 0.02% of the total net assets
of the Equity Fund and 0.155% of the total net assets of the International Funds
for as long as the existing sub-advisors are engaged to manage the respective
Funds. The effective advisory fees paid by the Equity and International Funds
after all waivers are reduced to 1.08% and 0.945% respectively. Net fees
retained by Advisor after all waivers are approximately 0.42% and 0.3825%,
respectively from the Equity and International Funds.
<PAGE>
THE FOLLOWING INFORMATION SHOULD BE INSERTED ON PAGE 21 OF THE PROSPECTUS:
MASTERS' SELECT INTERNATIONAL FUND PORTFOLIO MANAGERS
THEODORE J. TYSON
JOSEPH P. JORDAN
DOUGLAS R. ALLEN
Mastholm Asset Management
10500 N.E. 8th Street
Suite 660
Bellevue, WA 98004
Ted Tyson is the Chief Investment Officer and a Portfolio Manager of Mastholm
Asset Management, LLC. Prior to forming Mastholm in 1997, Tyson was the founder
and head of international equity at American Century Investment Management,
which he joined in 1988. He has over 18 years of investment experience in
domestic and international markets. The Mastholm portfolio is managed by a team
of three portfolio managers led by Ted Tyson and including Joe Jordan and Doug
Allen, all of whom worked together at American Century. Mastholm Asset
Management currently has over $700 million under management.
Approximately 10% of the Fund's assets are managed by the Mastholm team.
Mastholm's investment approach is bottom-up all capitalization growth, primarily
in developed markets. Mastholm screens a universe of 28,000 companies on a daily
basis to identify stocks with accelerating earnings or positive news impacting
current or future earnings. Companies that pass their initial screens are
reviewed to identify purchase candidates with the following characteristics:
* clarity of accounting and confirmation of real earnings growth,
* operating results significantly higher than analysts expectations,
* wide divergence of analyst expectations,
* stock price below historical average range, and
* trading liquidity that meets guidelines.
Candidates with these characteristics become the highest priorities for
fundamental analysis by the team. Fundamental research is allocated among the
portfolio managers based on country or industry expertise.
The fundamental analysis process is designed to uncover catalysts that drive
earnings not fully recognized by the market. Industry analysts are interviewed
to understand the assumptions that led to their original earnings forecast,
companies are contacted to discuss how their explanation differs from industry
analysts and to identify trends not recognized or fully discounted by the
market. Competitors, suppliers and vendors are questioned to cross-reference the
information garnered from analysts and companies. The portfolio managers spend a
significant amount of time visiting with companies abroad that are in the
portfolio or under consideration.
Investments are primarily concentrated in developed markets. Mastholm tends to
remain fully invested in stocks at all times, and does not hedge currencies
except under rare circumstances.
<PAGE>
MASTERS' SELECT EQUITY FUND
MASTERS' SELECT INTERNATIONAL FUND
SUPPLEMENT DATED SEPTEMBER 29, 1999
TO PROSPECTUS DATED APRIL 30, 1999
NOTICE TO EXISTING AND PROSPECTIVE SHAREHOLDERS:
FEE IMPOSED ON CERTAIN REDEMPTIONS OF SHARES.
Effective November 1, 1999, each Fund named above will impose a short-term
redemption fee on redemptions of shares purchased after the effective date and
held for less than 180 days. The fee is 2% of the redemption value and is
deducted from the redemption proceeds.
THE FEE IS RETAINED BY THE FUND FOR THE BENEFIT OF ITS LONG-TERM SHAREHOLDERS.
It is enacted to discourage short-term trading of the Fund by market timers or
other investors who do not share the long-term strategy of the Fund, and to
reduce the expenses of long-term shareholders for the trading costs and other
costs associated with short-term investment in the Fund.
The "first in, first out" (FIFO) method is used to determine the holding period;
this means that if you bought shares on different days, the shares purchased
first will be redeemed first for the purpose of determining whether the fee
applies.
Redemption Fees will not be charged on:
* shares acquired by reinvestment of dividends or distributions from a
Fund,
* shares held in an account of a qualified retirement plan, such as a
401(k) plan, or purchased through certain intermediaries.
In addition, the Funds' have a new mailing address for regular deliveries.
THE FOLLOWING ADDRESS SHOULD BE INSERTED ON PAGES 29 AND 31 OF THE PROSPECTUS:
The mailing address for the Funds
For Regular Delivery:
Masters' Select Funds
c/o National Financial Data Services
P.O. Box 219922
Kansas City, MO 64121-9922
