HORACE MANN MUTUAL FUNDS
SUPPLEMENT TO PROSPECTUS
DATED MAY 1, 1999
Information about the Growth Fund, the Income Fund, and the Balanced Fund is
supplemented as follows:
Growth Fund
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As of March 15, 2000, Sanford C. Bernstein & Co., Inc. ("Bernstein"), Mellon
Equity Associates, LLP and Wellington Management Company ("Wellington") manage
approximately 40%, 30% and 30% of the assets of the Growth Fund, respectively.
The allocations above are expected to deviate occasionally from these levels,
but not significantly.
In managing its portion of the Growth Fund, Bernstein uses traditional methods
of stock selection--research and analysis--to identify undervalued stocks. In
addition, Bernstein employs quantitative valuation tools to identify attractive
stocks and the most opportune time to purchase them.
Bernstein, 767 Fifth Avenue, New York, New York 10153, is an investment advisory
firm founded in 1967. As of October 31, 1999, Bernstein managed about $85.6
billion in assets. Two managers are primarily responsible for overseeing
Bernstein's portion of the Growth Fund. Marilyn G. Fedak, Chief Investment
Officer and Chairman of the U.S. Equity Investment Policy Group at Bernstein
since 1993; has worked in investment management since 1972; has managed
portfolio investments since 1976; joined Bernstein in 1984; B.A., Smith College;
M.B.A., Harvard Business School. Steven Pisarkiewicz, with Bernstein since 1989;
Senior Portfolio Manager since 1997; B.S., University of Missouri; M.B.A.,
University of California at Berkeley.
Income Fund
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As of March 24, 2000, Western Asset Management Company Limited ("WAML"), a
foreign affiliate of Western Asset Management Company ("Western Asset"), was
engaged to invest a portion of the Income Fund's assets in non-U.S. dollar
denominated securities. Currently, approximately 50% of the assets are to be
managed by Western Asset and WAML, with WAML managing up to 15% of Western
Asset's portion of the Income Fund.
Under this arrangement, Western Asset will determine the relative portion of the
Fund's assets to be invested in non-U.S. dollar denominated securities, which
assets will be invested at the discretion of WAML. In managing its portion of
the Income Fund, WAML will select the foreign country and currency composition
based upon its evaluation of relative interest rates, inflation rates, exchange
rates, monetary and fiscal policies, trade and current account balances, and any
other specific factors WAML believes relevant. WAML uses a strategy group
comprised of professionals who are experts in various investment disciplines to
determine the investments for its portion of the Income Fund.
WAML, 155 Bishopgate, London, EC2M 3XG, is a registered investment adviser
founded in 1984 by the American Express organization. In 1992, the firm became a
wholly-owned indirect subsidiary of Lehman Brothers Holdings, Inc. In 1996, the
firm was acquired by Legg Mason, Inc., the parent of Western Asset. WAML is
responsible for the management of global and international fixed income mandates
including the non-U.S. portion of Western Asset's U.S. domestic clients'
portfolios. WAML has approximately $3 billion under management as of December
31, 1999.
Dated: March 27, 2000
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