HORACE MANN MUTUAL FUNDS
SUPPLEMENT TO PROSPECTUS
DATED MAY 1, 1999
Information about the Balanced Fund, the Income Fund, the International Equity
Fund and the Socially Responsible Fund is supplemented as follows.
Balanced Fund
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Effective as of January 19, 2000, the Balanced Fund, after having obtained the
necessary regulatory approvals, implemented the "fund of funds" structure
described on page 6 of the Prospectus. Under the "fund of funds" structure, the
Balanced Fund invests substantially all of its assets in shares of the Growth
Fund and Income Fund. In addition, the Balanced Fund may invest directly only in
other portfolios of the Horace Mann Mutual Funds, in U.S. government securities
and in money market instruments.
Income Fund
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On October 28, 1999, the Board of Trustees approved the Adviser's recommendation
to hire a second subadviser for the Income Fund. Effective as of approximately
January 21, 2000, a portion of the assets of the Income Fund will be managed by
Western Asset Management Company ("Western Asset"). A portion of the assets will
continue to be managed by Wellington Management Company ("Wellington"). (See
page 33 of the Prospectus.) Currently, approximately 50% of the Income Fund's
assets are to be managed by Wellington and approximately 50% of the assets are
to be managed by Western Asset. These allocations are expected to deviate
occasionally from these allocation levels, but not significantly.
Wellington will continue to manage its portion of the Income Fund using its
current philosophy and strategy as described in the Prospectus on page 10.
Western Asset, a wholly owned subsidiary of Legg Mason, Inc., acts as investment
adviser to institutional accounts, such as corporate pension plans, mutual
funds, and endowment funds. Total assets under management were approximately
$58.5 billion as of September 30, 1999. Western Asset is located at 117 East
Colorado Blvd., Pasadena, CA 91105. In managing its portion of the Income Fund,
Western Asset employs a Core Plus strategy that seeks to provide investment
results that exceed the performance of the Lehman Brothers Aggregate Index. This
index is a widely recognized measure of the aggregate U.S. bond market. Western
Asset seeks to maximize total return by investing primarily in U.S.
dollar-denominated fixed income securities and other debt instruments of
domestic and foreign entities, including corporate bonds, securities issued or
guaranteed as to principal and interest by the U.S. government, its agencies and
instrumentalities, mortgage-related securities and money market instruments.
Western Asset uses a strategy group to determine the investments for the
portfolio.
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International Equity Fund
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The language on page 34 of the prospectus regarding the International Equity
Fund's portfolio managers is amended to read as follows:
The International Equity Fund is managed by a team of investment
professionals, who individually represent different areas of expertise and
who together develop investment strategies and make buy and sell decisions.
Supporting the fund managers are Scudder Kemper's many economist, research
analyst, traders, and other investment specialists, located in offices
across the United States and around the world.
THE PORTFOLIO MANAGERS
Below are the people who handle the International Equity Fund's day-to-day
management:
Irene T. Cheng Nicholas Bratt
Lead Portfolio Manager - Began investment career in 1974
- Began investment career in 1985 - Joined Scudder in 1976
- Joined Scudder in 1993 - Joined the Fund team in 1976
- Became Lead Manager Effective
August 1, 1997
Carol L. Franklin Marc J. Slendebroek
- Began investment career in 1975 - Began investment career in 1990
- Joined Scudder in 1981 - Joined Scudder in 1994
- Joined the Fund team in 1986 - Joined the Fund team in 1999
Socially Responsible Fund
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The language on pages 34-35 of the prospectus regarding the Socially Responsible
Fund's portfolio managers is amended to read as follows:
The Socially Responsible Fund is managed by a team of investment
professionals, who each play an important role in the Socially
Responsible Fund's management process. Team members work together to
develop investment strategies and selected securities for the Socially
Responsible Fund's portfolio. They are supported by Scudder's large
staff of economists, research analysts, traders and other investment
specialist who work in Scudder offices across the United States and
abroad. The Socially Responsible Fund's sub-adviser believes its team
approach benefits investors by bringing together many disciplines and
leveraging its extensive resources.
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THE PORTFOLIO MANAGERS
Below are the people who handle the Socially Responsible Fund's
day-to-day management:
Lori J. Ensinger Benjamin W. Thorndike
Lead Portfolio Manager - Began investment career in 1980
- Began investment career in 1983 - Joined Scudder in 1983
- Joined Scudder in 1993 - Joined the Fund team in 1996
- Lead Manager since inception
Dated: January 19, 2000
