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Brazos Mutual Funds
Supplement dated June 30, 1999 to the Prospectus dated February 12, 1999
On June 30, 1999, John McStay Investment Counsel, L.P. ("JMIC"), which acts
as the investment adviser to each portfolio of Brazos Mutual Funds (the
"Trust"), reorganized as a Delaware limited liability company ("New JMIC") and
completed the sale of an 80% managing membership interest in New JMIC to
American International Group, Inc. ("AIG") resulting in New JMIC becoming a
majority owned indirect subsidiary of AIG and minority owned by the employees of
New JMIC (the "Transaction"). In connection therewith, on June 25, 1999,
shareholders of each Portfolio of the Trust approved new investment advisory and
management agreements with New JMIC and also approved changing the fundamental
investment restrictions relating to the ability to engage in borrowing and
lending transactions with respect to each Portfolio. Although the investment
advisory fee waivers will no longer be in place, the fees will not exceed the
expense caps currently in place for each Portfolio due to a voluntary expense
reimbursement by New JMIC or its affiliates.
The following language is added to "Purchase of Shares" on page 20 of the
Prospectus:
Initial investments in the shares of the Portfolios offered in this
Prospectus must be at least $1,000,000, and subsequent minimum investments must
be at least $1,000. Shares may be purchased and subsequent investments may be
made without being subject to the minimum or subsequent investment limitations
at the discretion of the officers of the Trust.
Shares may be purchased and subsequent investments may be made by
principals, officers, associates and employees of the Trust and its affiliates,
their relatives and their business or personal associates, either directly or
through their individual retirement accounts, and by any New JMIC pension or
profit-sharing plan, without being subject to the minimum or subsequent
investment limitations.
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Brazos Mutual Funds
(the "Trust")
Supplement dated June 30, 1999 to the Statement of Additional Information
dated February 12, 1999
On June 25, 1999, a special meeting of shareholders was held at which the
Trust's shareholders approved changes to certain fundamental investment
restrictions. Investment limitations 3 and 7 in the section entitled
"Investment Limitations" on page 10 of the Statement of Additional Information
are revised to read in their entirety as follows:
(3) borrow money, except as a temporary measure for extraordinary or
emergency purposes and then, in no event, in excess of 331/3 % of the
Portfolio's gross assets valued at the lower of market or cost, and
the Portfolio may not purchase additional securities when borrowings
exceed 5% of total gross assets;
(7) make loans except (i) by purchasing debt securities in accordance
with its investment objectives; (ii) by lending its portfolio
securities to banks, brokers, dealers and other financial institutions
so long as such loans are not inconsistent with the 1940 Act or the
rules and regulations or interpretations of the Commission thereunder;
and (iii) as otherwise permitted by exemptive order of the Commission;
