BJURMAN MICRO-CAP GROWTH FUND
SUPPLEMENT TO PROSPECTUS
The Prospectus, dated July 29, 1998, of the Bjurman Micro-Cap Growth Fund
(the "Fund") is hereby amended to reflect the following new information:
1. ADMINISTRATOR, TRANSFER AGENT AND FUND ACCOUNTING AGENT. The Fund has
retained Countrywide Fund Services, Inc. ("Countrywide"), 312 Walnut Street,
21st Floor, Cincinnati, Ohio, as its new administrator, transfer agent, dividend
disbursing agent, shareholder servicing agent and fund accounting agent.
Countrywide replaces First Data Investor Services Group, Inc. in these
capacities. Countrywide is a wholly-owned indirect subsidiary of Countrywide
Credit Industries Inc., a New York Stock Exchange listed company engaged
principally in the business of residential mortgage lending.
Under the Administration Agreement, Countrywide receives a monthly fee at
an annual rate of .15% of the average value of the Fund's daily net assets up to
$25,000,000, .125% of such assets from $25,000,000 to $50,000,000 and .10% of
such assets in excess of $50,000,000, subject to a minimum fee of $2,000 per
month.
2. UNDERWRITER. The Fund has retained CW Fund Distributors, Inc., 312
Walnut Street, 21st Floor, Cincinnati, Ohio, as the Fund's new principal
underwriter. CW Fund Distributors, Inc. replaces FPS Broker Services, Inc. in
this capacity.
3. CUSTODIAN. The Fund has retained Star Bank, N.A., 425 Walnut Street,
Cincinnati, Ohio, as the Fund's new custodian. Star Bank, N.A. replaces The Bank
of New York in this capacity.
4. ADDRESS AND PHONE NUMBER OF FUND. Inquiries concerning the Fund,
shareholder accounts, and purchases or redemptions of shares in the Fund should
now be addressed to:
Bjurman Micro-Cap Growth Fund
Shareholder Services
P.O. Box 5354
Cincinnati, Ohio 45201-5354
1-800-227-7264
For persons desiring to invest in the Fund by bank wire, you may also open
an account and make an initial investment in the Fund by wire. Please telephone
the transfer agent for instructions (Nationwide call toll-free 800-227-7264)
before wiring funds. Disregard the wire instructions provided on page 11 of the
Prospectus.
For further information concerning purchases or redemptions of Fund shares,
see "How Shares May Be Purchased" and "How Shares May Be Redeemed" in the
Prospectus.
THE DATE OF THIS SUPPLEMENT IS DECEMBER 18, 1998.
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THE BJURMAN FUNDS
STATEMENT OF ADDITIONAL INFORMATION
JULY 29, 1998
REVISED DECEMBER 18, 1998
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This Statement of Additional Information dated July 29, 1998, as revised on
December 18, 1998, is not a prospectus but should be read in conjunction with
the separate Prospectus describing shares of the Bjurman Micro-Cap Growth Fund
(the "Fund") dated July 29, 1998, as revised on December 18, 1998. The
Prospectus may be amended or supplemented from time to time. No investment in
shares should be made without first reading the Prospectus. This Statement of
Additional Information is intended to provide additional information regarding
the activities and operations of the Fund. A copy of the Prospectus may be
obtained without charge from CW Fund Distributors, Inc. (the "Underwriter") or
George D. Bjurman & Associates (the "Adviser") at the address and telephone
numbers below.
Underwriter: Adviser:
CW Fund Distributors, Inc. George D. Bjurman & Associates
312 Walnut Street, 21st Floor 10100 Santa Monica Boulevard
Cincinnati, OH 45202 Suite 1200
(513) 629-2000 Los Angeles, CA 90067-4103
(800) 227-7264 (310) 553-6577
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS STATEMENT OF ADDITIONAL INFORMATION OR IN
THE PROSPECTUS IN CONNECTION WITH THE OFFERING MADE BY THE PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE TRUST OR ITS DISTRIBUTOR. THE PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING BY THE TRUST OR BY THE DISTRIBUTOR IN ANY JURISDICTION IN
WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
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TABLE OF CONTENTS
PAGE
The Trust and the Fund.........................................................3
Investment Policies and Techniques
Bankers' Acceptances........................................................3
Certificates of Deposits....................................................3
Common Stock................................................................3
Preferred Stock.............................................................3
Time Deposits...............................................................3
Loans of Portfolio Securities...............................................3
Illiquid Securities.........................................................4
Repurchase Agreements ......................................................4
Rule 144A Securities........................................................4
Futures.....................................................................4
Other Investments...........................................................5
Investment Restrictions........................................................5
Investment Advisory and Other Services
Investment Adviser .........................................................6
Investment Advisory Agreement...............................................6
Administrator, Transfer Agent and Fund Accountant...........................6
Underwriter ................................................................7
Trustees and Officers..........................................................8
Principal Shareholders........................................................10
Net Asset Value...............................................................10
Taxes.........................................................................11
Portfolio Transactions and Brokerage Commissions..............................12
Performance Information
In General.................................................................12
Total Return Calculation...................................................13
Performance and Advertisements ............................................13
Other Information
Limitations on Trustees' Liability.........................................14
Independent Accountants....................................................14
Reports to Shareholders....................................................14
Financial Statements..........................................................14
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THE TRUST AND THE FUND
This Statement of Additional Information relates to Bjurman Micro-Cap Growth
Fund (the "Fund"), a separate series of The Bjurman Funds (the "Trust"), an
open-end management investment company established on September 26, 1996 under
Delaware law as a Delaware business trust. The Trust Instrument permits the
Trust to offer separate series of shares of beneficial interest.
INVESTMENT POLICIES AND TECHNIQUES
The following supplements the information contained in each respective
Prospectus for the Fund regarding the permitted investments and risk factors and
the investment objective and policies of the Fund.
BANKERS' ACCEPTANCES:
Negotiable bills of exchange or time drafts drawn on and accepted by a
commercial bank, meaning, in effect, that the bank unconditionally agrees to pay
the face value of the instrument on maturity. Bankers' Acceptances are used by
corporations to finance the shipment and storage of goods and to furnish dollar
exchanges. Banker's Acceptances generally mature within six months.
CERTIFICATES OF DEPOSIT:
A negotiable interest-bearing instrument with a specific maturity date.
Certificates of deposit are issued by U.S. commercial banks and savings and loan
institutions in exchange for the deposit of funds and normally can be traded in
the secondary market prior to maturity. Certificates of deposit generally carry
penalties for early withdrawal.
COMMON STOCK:
Common stock is defined as shares of a corporation that entitle the holder to a
pro rata share of the profits of the corporation, if any, without a preference
over any other shareholder or class of shareholders, including holders of the
corporation's preferred stock and other senior equity. Common stock usually
carries with it the right to vote, and frequently, an exclusive right to do so.
Holders of common stock also have the right to participate in the remaining
assets of the corporation after all other claims, including those of debt
securities and preferred stock, are paid.
PREFERRED STOCK:
Generally, preferred stock receives dividends prior to distributions on common
stock and usually has a priority of claim over common stockholders if the issuer
of the stock is liquidated. Unlike common stock, preferred stock does not
usually have voting rights; preferred stock, in some instances, is convertible
into common stock. In order to be payable, dividends on preferred stock must be
declared by the issuer's Board of Directors. Dividends on preferred stock
typically are cumulative, causing dividends to accrue even if not declared by
the Board of Directors. There is, however, no assurance that dividends will be
declared by the Board of Directors of issuers of the preferred stocks in which
the Fund invests.
TIME DEPOSITS:
A non-negotiable receipt issued by a bank in exchange for the deposit of funds.
Like a certificate of deposit, it earns a specified rate of interest over a
definite period of time; however, it cannot be traded in the secondary market.
Time deposits in excess of seven days with a withdrawal penalty are considered
to be illiquid securities. The Fund will not invest more than 15% of its net
assets in illiquid securities, including time deposits.
LOANS OF PORTFOLIO SECURITIES:
The Fund may lend portfolio securities to broker-dealers and financial
institutions provided that (1) the loan is secured continuously by collateral
marked-to-market daily and maintained in an amount at least equal to the current
market value of the securities loaned; (2) the Fund may call the loan at any
time and receive the securities loaned; (3) the Fund will receive any interest
or dividends paid on the loaned securities and (4) the aggregate market value of
securities loaned by the Fund will not at any time exceed 33% of the total
assets of the Fund. There may be risks of delay in receiving additional
collateral or in recovering the securities loaned or even a loss of rights in
the collateral should the borrower of the securities fail financially. However,
loans will be made only to borrowers deemed by the Adviser to be of good
standing and when, in its judgment, the income to be earned from the loan
justifies the attendant risks.
Collateral will consist of U.S. government securities, cash equivalents or
irrevocable letters of credit. Loans of securities involve a risk that the
borrower may fail to return the securities or may fail to maintain the proper
amount of collateral. Therefore, the Fund
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will only enter into portfolio loans after a review by the Adviser, under the
supervision of the Board of Trustees, including a review of the creditworthiness
of the borrower. Such reviews will be monitored on an ongoing basis.
ILLIQUID SECURITIES:
The Board of Trustees has delegated the function of making day-to-day
determinations of liquidity to the Adviser pursuant to guidelines reviewed by
the Board of Trustees. The Fund's policy is to limit its investment in illiquid
securities to a maximum of 15% of total assets at the time of purchase. The
Securities and Exchange Commission (the "SEC") has adopted Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act") which permits the Fund
to sell restricted securities to qualified institutional buyers without
limitation. The Adviser, pursuant to procedures adopted by the Trustees of the
Fund, will make a determination as to the liquidity of each restricted security
purchased by the Fund. If a restricted security is determined to be "liquid",
such security will not be included within the category "illiquid securities".
The Adviser will monitor the liquidity of securities held by the Fund, and
report periodically on such determinations to the Board of Trustees.
REPURCHASE AGREEMENTS:
The Fund may enter into repurchase agreements with banks or broker-dealers.
Repurchase agreements are considered under the Investment Company Act of 1940,
as amended (the "1940 Act") to be collateralized loans by the Fund to the
seller, secured by the securities transferred to the Fund. In accordance with
requirements under the 1940 Act, repurchase agreements will be fully
collateralized by securities in which the Fund may directly invest. Such
collateral will be marked-to-market daily. If the seller of the underlying
security under the repurchase agreement should default on its obligation to
repurchase the underlying security, the Fund may experience delay or difficulty
in recovering its cash. To the extent that, in the meantime, the value of the
security purchased has decreased, the Fund could experience a loss. No more than
15% of the Fund's net assets will be invested in illiquid securities, including
repurchase agreements which have a maturity of longer than seven days. The
financial institutions with whom the Fund may enter into repurchase agreements
are banks and non-bank dealers of U.S. Government securities that are listed on
the Federal Reserve Bank of New York's list of reporting dealers and banks, if
such banks and non-bank dealers are deemed creditworthy by the Adviser. The
Adviser will continue to monitor the creditworthiness of the seller under a
repurchase agreement, and will require the seller to maintain during the term of
the agreement the value of the securities subject to the agreement at not less
than the repurchase price. The Fund will only enter into a repurchase agreement
where the market value of the underlying security, including accrued interest,
will at all times be equal to or exceed the value of the repurchase agreement.
RULE 144A SECURITIES:
The Fund may invest in securities that are exempt from the registration
requirements of the Securities Act pursuant to SEC Rule 144A. Those securities
purchased pursuant to Rule 144A are traded among qualified institutional buyers,
and are subject to the Fund's limitation on illiquid investment.
Investing in securities under Rule 144A could have the effect of increasing the
levels of the Fund's illiquidity to the extent that qualified institutional
buyers become, for a time, uninterested in purchasing these securities. The Fund
will limit its investments in illiquid securities including securities of
issuers which the Fund is restricted from selling to the public without
registration under the Securities Act to no more than 15% of the Fund's net
assets (excluding restricted securities eligible for resale pursuant to Rule
144A that have been determined to be liquid by the Fund's Board of Trustees).
FUTURES:
The Fund may buy and sell futures contracts to manage its exposure to changes in
securities prices, as an efficient means of adjusting its overall exposure to
certain markets, in an effort to enhance income, and to protect the value of
portfolio securities. The Fund will not use futures contracts to leverage its
assets. Futures contracts deposits may not exceed 5% of the Fund's assets
(determined at the time of the transaction) and the Fund's total investment in
futures contracts may not exceed 20% of the Fund's total assets.
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OTHER INVESTMENTS:
Subject to prior disclosure to shareholders, the Board of Trustees may, in the
future, authorize the Fund to invest in securities other than those listed here
and in the prospectus, provided that such investment would be consistent with
the Fund's investment objective, and that it would not violate any fundamental
investment policies or restrictions applicable to the Fund.
INVESTMENT RESTRICTIONS
The investment restrictions set forth below are fundamental restrictions and may
not be changed without the approval of a majority of the outstanding voting
shares (as defined in the 1940 Act) of the Fund. Unless otherwise indicated, all
percentage limitations listed below apply at the time of the transaction only.
Accordingly, if a percentage restriction is adhered to at the time of
investment, a later increase or decrease in the percentage which results from a
relative change in values or from a change in the Fund's total assets will not
be considered a violation.
The Adviser will use "FactSet" computer software to catagorize the industries in
which the Fund invests ("FactSet Codes"). The FactSet Codes that are assigned
may or may not correspond to the Standard Industry Codes ("SIC Codes"); however,
the Adviser feels that the differences are not substantial enough to effect the
percentage of asset restrictions above. In most cases the SIC Codes will match
the FactSet Codes. Except as set forth under "INVESTMENT OBJECTIVE" and
"INVESTMENT POLICIES and STRATEGIES" and "RISK FACTORS" in the Prospectus, the
Fund may not:
1. Purchase securities of any one issuer if, as a result of the purchase,
more than 5% of the Fund's total assets would be invested in securities of that
issuer or the Fund would own or hold more than 10% of the outstanding voting
securities of that issuer, except that up to 15% of the Fund's total assets may
be invested without regard to this limitation, and except that this limit does
not apply to securities issued or guaranteed by the U.S. government, its
agencies and instrumentalities or to securities issued by other investment
companies;
2. Purchase any security if, as a result of the purchase, 15% or more of
the Fund's total assets would be invested in securities of issuers having their
principal business activities in the same industry, except that this limitation
does not apply to securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities;
3. Issue senior securities or borrow money, except as permitted under the
1940 Act and then not in excess of one-third of the Fund's total assets
(including the amount of the senior securities issued but reduced by any
liabilities not constituting senior securities) at the time of the issuance or
borrowing, except that the Fund may borrow up to an additional 5% of its total
assets (not including the amount borrowed) for temporary or emergency purposes.
The Fund will not purchase securities when borrowings exceed 5% of its total
assets;
4. Pledge, hypothecate, mortgage or otherwise encumber its assets, except
in an amount up to one-third of the value of its net assets but only to secure
borrowing for temporary or emergency purposes, such as to effect redemptions;
5. Make loans, except through loans of securities or through repurchase
agreements, provided that, for purposes of this restriction, the acquisition of
bonds, debentures, other debt securities or instruments, or participations or
other interest therein and investments in government obligations, commercial
paper, certificates of deposit, bankers' acceptances or similar instruments will
not be considered the making of a loan;
6. Engage in the business of underwriting the securities of others, except
to the extent that the Fund might be considered an underwriter under the Federal
securities laws in connection with its disposition of securities; or
7. Purchase or sell real estate, except that investments in securities of
issuers that invest in real estate or other instruments supported by interests
in real estate are not subject to this limitation, and except that the Fund may
exercise rights under agreements relating to such securities, including the
right to enforce security interests to hold real estate acquired by reason of
such enforcement until that real estate can be liquidated in an orderly manner.
The following investment limitations are not fundamental and may be changed
without shareholder approval. The Fund does not currently intend to:
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(i) Engage in uncovered short sales of securities or maintain a short
position;
(ii) Purchase securities on margin, except for short-term credit
necessary for clearance of portfolio transactions;
(iii) Purchase securities of other investment companies except as
permitted by the 1940 Act and the rules and regulations thereunder;
(iv) Invest in companies for the purpose of exercising control or
management;
(v) Invest in oil, gas or mineral exploration or development programs or
leases, except that direct investment in securities of issuers that
invest in such programs or leases and investments in asset-backed
securities supported by receivables generated by such programs or
leases are not subject to this prohibition; and
(vi) Invest more than 5% of its net assets in warrants, including within
that amount no more than 2% in warrants which are not listed on the
New York or American Stock exchanges, except warrants acquired as a
result of its holdings of common stocks.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER
George D. Bjurman & Associates serves as the Fund's investment adviser and is an
investment adviser registered as such under the Investment Advisers Act of 1940,
as amended. The Adviser was founded in 1970 and is wholly-owned by senior
associates and the Bjurman family. G. Andrew Bjurman and O. Thomas Barry, III
own 40% and 20%, respectively, of the Adviser and as a result may be deemed to
be "control persons" of the Adviser. As of June 30, 1998, The Adviser had
approximately $1.5 billion in assets under management.
INVESTMENT ADVISORY AGREEMENT
The Fund and the Adviser have entered into an investment advisory agreement for
a two-year period (the "Investment Advisory Agreement"). The Investment Advisory
Agreement provides that the Adviser shall furnish advice to the Fund with
respect to its investments and shall determine what securities shall be
purchased or sold by the Fund. The Prospectus describes the Adviser's duties,
compensation and the allocation of expenses between the Fund and the Adviser.
The Investment Advisory Agreement provides that the Adviser shall not be
protected against any liability to the Fund or its shareholders by reason of the
Adviser's willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard of its obligations or
duties thereunder.
The continuance of the Investment Advisory Agreement, after the first two years,
must be specifically approved at least annually (i) by the vote of the Trustees
or by a vote of the shareholders of Fund, and (ii) by the vote of a majority of
the Trustees who are not parties to the Investment Advisory Agreement or
"interested persons" (as that term is defined in the 1940 Act) of any party
thereto, cast in person at a meeting called for the purpose of voting on such
approval. The Investment Advisory Agreement will terminate automatically in the
event of its assignment, and is terminable at any time without penalty by the
Trustees of the Fund, or by a majority of the outstanding shares of the Fund on
60-days' written notice to the Adviser.
For providing investment advisory services, the Fund pays the Adviser a monthly
fee of one twelfth of 1.00% of the Fund's average daily net assets. The Adviser
has voluntarily agreed to waive its fee and reimburse expenses to the extent
that the Fund's total operating expenses, inclusive of distribution expenses,
exceed 1.80% of the Fund's average daily net assets. For the fiscal year ended
March 31, 1998, advisory fees of $21,878 were waived by the Adviser and the
Adviser reimbursed the Fund $209,641. Absent such waivers and reimbursements,
the total operating expenses of the Fund would have been 13.35% of the Fund's
average daily net assets.
ADMINISTRATOR, TRANSFER AGENT AND FUND ACCOUNTANT
The Fund has retained Countrywide Fund Services, Inc. ("Countrywide") as the
Fund's Transfer Agent, Administrator and Fund Accountant. Countrywide maintains
the records of each shareholder's account, answers shareholders' inquiries
concerning their accounts, processes purchases and redemptions of the Fund's
shares, acts as dividend and distribution disbursing agent and performs other
shareholder service functions. The Transfer Agent receives for its services as
transfer agent a fee payable monthly at an annual
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rate of $20 per account; provided, however, that the minimum fee is $2,000 per
month. In addition, the Fund pays out-of-pocket expenses, including but not
limited to, postage, envelopes, checks, drafts, forms, reports, record storage
and communication lines.
Countrywide also provides accounting and pricing services to the Fund. For
calculating daily net asset value per share and maintaining such books and
records as are necessary to enable Countrywide to perform its duties, the Fund
pays Countrywide a fee in accordance with the following schedule:
Average Monthly Net Assets Monthly Fee
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$ 0 - $100 million $2,500
$100 million to $200 million $3,500
$200 million to $300 million $4,500
Over $300 million $5,500 + .001%
The .001% on assets over $300 million represents the asset based fee charged by
Countrywide for external pricing services.
In addition, Countrywide is retained to provide administrative services to the
Fund. In this capacity, Countrywide supplies non-investment related statistical
and research data, internal regulatory compliance services and executive and
administrative services. Countrywide supervises the preparation of tax returns,
reports to shareholders of the Fund, reports to and filings with the Securities
and Exchange Commission and state securities commissions, and materials for
meetings of the Board of Trustees. For the performance of these administrative
services, the Fund pays the Countrywide a fee at the annual rate of .15% of the
average value of its daily net assets up to $25,000,000, .125% of such assets
from $25,000,000 to $50,000,000 and .10% of such assets in excess of
$50,000,000; provided, however, that the minimum fee is $2,000 per month.
Prior to December 18, 1998, the Fund retained First Data Investor Services
Group, Inc., 3200 Horizon Drive, King of Prussia, Pennsylvania 19406-0903, for
administration services. For the fiscal year ended March 31, 1998, the Fund paid
First Data Investor Services Group, Inc. $59,145 as compensation for services
performed pursuant to the Administration Agreement.
UNDERWRITER
CW Fund Distributors, Inc. (the "Distributor"), 312 Walnut Street, 21st Floor,
Cincinnati, Ohio 45202, serves as principal underwriter for the Fund pursuant to
an Underwriting Agreement. Shares are sold on a continuous basis by the
Distributor. The Distributor has agreed to use its best efforts to solicit
orders for the sale of Trust shares, but it is not obliged to sell any
particular amount of shares. The Underwriting Agreement provides that, unless
sooner terminated, it will continue in effect until December 18, 2000.
Thereafter, the Underwriting Agreement will continue from year to year only if
such continuance is approved at least annually (i) by the Board of Trustees or a
vote of a majority of the outstanding shares, and (ii) by a majority of the
Trustees who are not interested persons of the Trust or of the Distributor by
vote cast in person at a meeting called for the purpose of voting on such
approval.
Under the terms of the Underwriting Agreement, and in accordance with a
distribution plan for the Fund (as described under "Distribution Plan" below),
the Fund or the Adviser pays all costs relating to distribution of shares of the
Fund, subject to a limit of 0.25% per annum of the average daily net assets of
the Fund for payments made directly by the Fund or for payments made to the
Adviser by the Fund as reimbursement for distribution expenses incurred by the
Adviser.
The Underwriting Agreement may be terminated by the Fund at any time, without
the payment of any penalty, by vote of a majority of the entire Board of
Trustees of the Trust or by vote of a majority of the outstanding shares of the
Fund on 90 days' written notice to the Distributor, or by the Distributor at any
time, without the payment of any penalty, on 90 days' written notice to the
Trust. The Underwriting Agreement will automatically terminate in the event of
its assignment.
Prior to December 18, 1998, the Fund retained FPS Broker Services, Inc., 3200
Horizon Drive, King of Prussia, Pennsylvania as its principal underwriter. For
the fiscal year ended March 31, 1998, FPS Broker Services, Inc. was paid $25,000
for services provided pursuant to the Underwriting Agreement.
Shares of the Fund are subject to a distribution plan (the "Distribution Plan")
pursuant to Rule 12b-1 under the 1940 Act. As provided in the Distribution Plan,
the Fund will pay an annual fee of 0.25% of the Fund's average daily net assets
to reimburse expenses incurred
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in distributing and promoting sales of the Fund. From these amounts, the
Distributor or the Fund may make payments to financial institutions and
intermediaries such as banks, savings and loan associations, insurance
companies, investment counselors and broker-dealers who assist in the
distribution of shares of the Fund or provide services to the Fund's
shareholders pursuant to service agreements with the Fund. The Fund intends to
operate the Distribution Plan in accordance with its terms and the Conduct Rules
of the National Association of Securities Dealers, Inc. concerning sales
charges. Pursuant to such Rules, the Distributor is required to limit aggregate
initial sales charges and asset-based sales charges to 6.25% of total gross
sales of shares.
The Distribution Plan will continue in effect from year to year, provided that
its continuance is approved at least annually by a vote of the Board of
Trustees, including the Trustees who are not "interested persons" of the Trust
and have no direct or indirect financial interest in the operation of the
Distribution Plan, cast in person at a meeting called for the purpose of voting
on such continuance. The Distribution Plan may be terminated at any time,
without penalty, by vote of those Trustees that are not interested persons of
the Trust or by vote of the holders of a majority of the outstanding shares of
the Fund on not more than 60-days' written notice and shall terminate
automatically in the event of its assignment. The Plan may not be amended to
increase materially the amounts to be spent for the services described herein
without approval by the shareholders of the Fund, and all material amendments
are required to be approved by the Board of Trustees. Pursuant to the Plan, the
Board of Trustees will review at least quarterly a written report of the
distribution expenses incurred on behalf of the Fund. The report will include an
itemization of the distribution expenses and the purpose of such expenditures.
For the fiscal year ended March 31, 1998, the Fund paid $5,470 for
distribution-related expenses pursuant to the Fund's Distribution Plan. Out of
that total amount $2,500 was spent on printing and mailing of prospectuses to
prospective shareholders and $2,369 was spent as compensation to dealers. No
interested person of the Fund or interested Trustee had a direct or indirect
financial interest in the operation of the Fund's Distribution Plan.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the Fund and their principal occupations
for the last five years are set forth below. Each Trustee who is an "interested
person," as that term is defined in the 1940 Act, of the Fund is indicated by an
asterisk.
G. Andrew Bjurman and O. Thomas Barry, III share the office of the presidency of
the Trust. They are jointly vested in full executive authority under the Trust's
By-Laws.
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<TABLE>
<CAPTION>
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NAME AGE POSITION WITH THE PRINCIPAL OCCUPATION
FUND
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<S> <C> <C> <C>
G. Andrew Bjurman* 50 Co-President; Mr. Bjurman joined George D. Bjurman &
George D. Bjurman & Trustee Associates when it was founded in 1970
Associates, as Vice President and Portfolio Manager.
10100 Santa Monica Boulevard, At that time he assumed responsibility
Suite 1200, Los Angeles, CA for the portfolio management of
90067-4103 institutional accounts. From 1974 to
1978 he acted as Executive Vice
President and Senior Portfolio Manager.
In 1978 he assumed his present
responsibilities as President and Chief
Executive Officer of the firm. He is
currently a member of the Adviser's
Investment Policy Committee. In 1977 he
became both a Chartered Financial
Analyst and a Chartered Investment
Counselor.
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O. Thomas Barry, III, * 53 Co-President; Vice President and in 1985 he also
George D. Bjurman & Trustee became Chief Investment Officer. Prior
Associates, to joining the firm, Mr. Barry acted as
10100 Santa Monica Boulevard, Senior Investment Officer and Portfolio
Suite 1200, Los Angeles, CA Manager for Security Pacific National
90067-4103 Bank in Los Angeles and was a member of
the Stock Selection Committee. In 1977
he became a Chartered Financial Analyst
and in 1978 a Chartered Investment
Counselor.
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Donald W. Hudson, Jr. 53 Trustee; Mr. Hudson has been a Senior Vice-
CB Commercial Real Estate Chairman of Audit President of CB Commercial Real Estate
21700 Oxnard Street Committee since 1993. Prior to that Mr. Hudson was
Suite 200 Associate Vice President of Cushman
Woodland Hills, CA 91367 Realty, a commercial real estate firm.
- ------------------------------------------------------------------------------------------------------
Joseph E. Maiolo 60 Trustee Mr. Maiolo is an industrial real estate
INCO Commercial Brokerage broker/developer. He is a principal of
14700 Firestone Boulevard, INCO Commercial Brokerage, Joseph E.
#111 Maiolo & Associates, Inc. and Penta
La Mirada, CA 90638 Pacific Properties, Los Angeles.
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William Wallace 51 Trustee Mr. Wallace is involved in residential
Wallace Properties real estate. He is Vice President of
5288 South Franklin Circle Wallace Properties.
Greenwood Village, CO 80121
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</TABLE>
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COMPENSATION TABLE
Trustees and Officers
Aggregate Compensation from Trust for Fiscal Year Ending 3/31/98 1
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Joseph E. Maiolo $4,500
Donald W. Hudson, Jr. $4,500
William Wallace $4,500
G. Andrew Bjurman* $ 0
O. Thomas Barry, III* $ 0
* This Trustee is considered an "Interested Person" of the Trust as defined
under the 1940 Act.
1 This amount represents the aggregate amount of compensation paid to the
Trustees for service on the Board of Trustees. There are no other funds in the
Fund Complex.
No officer or Trustee of the Trust who is also an officer or employee of the
Adviser receives any compensation from the Trust for services to the Trust. The
Trust pays each Trustee who is not affiliated with the Adviser a fee of $4,500
per year, and reimburses each Trustee and officer for out-of-pocket expenses in
connection with travel and attendance at such meetings.
PRINCIPAL SHAREHOLDERS
As of July 1, 1998, the Trustees and officers, as a group, beneficially owned
10,179 shares (2.7%) of the Fund.
As of July 1, 1998, the following persons owned of record or beneficially more
than 5% of the outstanding voting shares of the Fund:
NAME & ADDRESS PERCENTAGE
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Charles Schwab & Co., Inc. * 1 42.0%
FBO Customers San Francisco, CA
Donaldson Lufkin & Jenrette 2 6.9%
Jersey City, NJ
* Person deemed to control the Fund within the meaning of the 1940 Act.
1 Charles Schwab & Co., Inc. is a discount broker-dealer acting as a nominee
for registered investment advisers whose clients have purchased shares of
the Fund and also holds shares for the benefit of its clients.
2 Donaldson Lufkin & Jenrette Securities Corporation is a broker-dealer
holding shares for the benefit of its clients.
NET ASSET VALUE
The net asset value per share is computed by dividing the value of the assets of
the Fund, less its liabilities, by the number of shares outstanding.
Portfolio securities are valued and net asset value per share is determined as
of the close of regular trading on the New York Stock Exchange ("NYSE"), which
currently is 4:00 p.m. (Eastern Time), on each day the NYSE is open for trading.
The NYSE is open for trading every day except Saturdays, Sundays and the
following holidays: New Year's Day, Martin Luther King Jr. Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas Day. Additionally, if any of the aforementioned holidays falls on a
Saturday, the NYSE will not be open for trading on the preceding Friday and when
such holiday
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falls on a Sunday, the NYSE will not be open for trading on the succeeding
Monday, unless unusual business conditions exist, such as the ending of a
monthly or the yearly accounting period.
TAXES
The following is only a summary of certain federal tax considerations generally
affecting the Fund and its shareholders that are not described in the
Prospectus, and is not intended as a substitute for careful tax planning.
Shareholders are urged to consult their tax advisers with specific reference to
their own tax situations, including their state and local tax liabilities. Paul,
Hastings, Janofsky and Walker, LLP, legal counsel to the Fund, has expressed no
opinion in respect thereof. Non-U.S. investors should consult their tax advisers
concerning the tax consequences of ownership of shares of the Fund, including
the possibility that distributions may be subject to a 30% U.S. withholding tax.
FEDERAL INCOME TAX
The following discussion of federal income tax consequences is based on the
Internal Revenue Code of 1986, as amended ("the Code"), court decisions and
published administrative materials from the Internal Revenue Service and as in
effect on the date of this Statement of Additional Information. New legislation,
as well as administrative changes or court decisions, may significantly change
the conclusions expressed herein, and may have a retroactive effect with respect
to the transactions contemplated herein. The Fund has qualified and intends to
continue qualify as a "regulated investment company" ("RIC") as defined under
Subchapter M of the Code. By doing so, the Fund expects to eliminate or reduce
to a nominal amount the federal income taxes to which it may be subject. In
order to qualify for treatment as a RIC under the Code, the Fund generally must
distribute annually to its shareholders at least 90% of its investment company
taxable income (generally, net investment income plus net short-term capital
gain) (the "Distribution Requirement") and must meet several additional
requirements. Among these requirements are the following: (i) at least 90% of
the Fund's gross income each taxable year must be derived from dividends,
interest, payments with respect to securities loans, and gains from the sale or
other disposition of stock or securities, or certain other income; (ii) at the
close of each quarter of the Fund's taxable year, at least 50% of the value of
its total assets must be represented by cash and cash items, U.S. government
securities, securities of other RICs and other securities, with such other
securities limited, in respect to any one issuer, to an amount that does not
exceed 5% of the value of the Fund's assets and that does not represent more
than 10% of the outstanding voting securities of such issuer and (iii) at the
close of each quarter of the Fund's taxable year, not more than 25% of the value
of its assets may be invested in securities (other than U.S. government
securities or the securities of other RICs) of any one issuer or of two or more
issuers which the Fund controls and which are engaged in the same, similar or
related trades or businesses. Notwithstanding the Distribution Requirement
described above, which requires only that the Fund distribute at least 90% of
its annual investment company taxable income and does not require any minimum
distribution of net capital gain (the excess of net long-term capital gain over
net short-term capital loss), the Fund will be subject to a nondeductible 4%
federal excise tax to the extent that it fails to distribute by the end of any
calendar year 98% of its ordinary income for that year and 98% of its capital
gain net income (the excess of short- and long-term capital gains over short-
and long-term capital losses) for the one-year period ending on October 31 of
that year, plus certain other amounts. The Fund intends to make sufficient
distributions of its ordinary income and capital gain net income prior to the
end of each calendar year to avoid liability for federal excise tax.
In the case of corporate shareholders, distributions from the Fund may qualify
for the corporate dividends-received deduction to the extent the Fund designates
the amount distributed as a qualifying dividend. Availability of the
dividends-received deduction is subject to certain holding period and
debt-financing limitations.
Distributions of net capital gains (i.e, the excess of net long-term capital
gains over net short-term capital losses) by the Fund are taxable to the
recipient shareholders as a long-term capital gain, without regard to the length
of time a shareholder has held Fund shares. Capital gain distributions are not
eligible for the dividends-received deduction referred to in the preceding
paragraph.
Any gain or loss recognized on a sale, redemption or exchange of shares of the
Fund by a non-exempt shareholder who is not a dealer in securities generally
will be treated as a long-term capital gain or loss if the shares have been held
for more than one year and otherwise generally will be treated as a short-term
capital gain or loss. If shares of the Fund on which a net capital gain
distribution has been received are subsequently sold, redeemed or exchanged and
such shares have been held for six months or less, any loss recognized will be
treated as a long-term capital loss to the extent of the long-term capital gain
distribution received with respect to such shares.
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In certain cases, the Fund will be required to withhold, and remit to the U.S.
Treasury, 31% of any distributions paid to a shareholder who (1) has failed to
provide a correct taxpayer identification number, (2) is subject to backup
withholding by the Internal Revenue Service or (3) has not certified to the Fund
that such shareholder is not subject to backup withholding.
If the Fund fails to qualify as a RIC for any taxable year, it will be subject
to tax on its taxable income at regular corporate rates. In such an event,
distributions from the Fund (to the extent of its current and accumulated
"earnings and profits") generally would be eligible for the corporate
dividends-received deduction for corporate shareholders.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
The Fund does not have an obligation to place orders with any broker-dealer or
group of broker-dealers in the execution of transactions in portfolio
securities. Subject to policies established by the Trustees, the Adviser is
responsible for placing the orders to execute transactions for the Fund. In
placing orders, it is the policy of the Fund to seek to obtain the best
execution taking into account such factors as price (including the applicable
dealer spread), the size, type and difficulty of the transaction involved, the
firm's general execution and operational facilities, the firm's risk in
positioning the securities involved, the Adviser's past experience in placing
orders through the firm, and the firm's research capabilities. While the Adviser
generally seeks reasonably competitive spreads, the Fund will not necessarily be
paying the lowest spread available for a particular transaction.
For the fiscal year ended March 31, 1998, the Fund incurred total brokerage
commissions of $15,069.
The Fund and the Adviser may direct portfolio transactions to persons or firms
because of research and investment services provided by such persons or firms if
the commissions or spreads on the transactions are reasonable in relation to the
value of the investment information provided. Among such research and investment
services are those that brokerage houses customarily provide to institutional
investors and include statistical and economic data and research reports on
companies and industries. Such research provides lawful and appropriate
assistance to the Adviser in the performance of its investment decision-making
responsibilities. The Adviser may use these services in connection with all of
its investment activities, and some services obtained in connection with the
Fund's transactions may be used in connection with other investment advisory
clients of the Adviser, including other mutual funds and other series of the
Trust, if any.
The Fund may invest in securities that are traded exclusively in the
over-the-counter market. The Fund may also purchase securities listed on a
national securities exchange through the "third market" (i.e., through markets
other than the exchanges on which the securities are listed). When executing
transactions in the over-the-counter market or the third market, the Adviser
will seek to execute transactions through brokers or dealers that, in the
Adviser's opinion, will provide the best overall price and execution so that the
resultant price to the Fund is as favorable as possible under prevailing market
conditions.
It is not the Fund's practice to allocate brokerage or principal business on the
basis of sales of its shares which may be made through brokers or dealers.
However, the Adviser may place portfolio orders with qualified broker-dealers
who recommend the Fund to clients, and may, when a number of brokers and dealers
can provide best net results on a particular transaction, consider such
recommendations by a broker or dealer in selecting among broker-dealers.
It is possible that purchases or sales of securities for the Fund also may be
considered for other clients of the Adviser or its affiliates, including the
other series of the Trust, if any. Any transactions in such securities at or
about the same time will be allocated among the Fund and such other clients in a
manner deemed equitable to all by the Adviser, taking into account the
respective sizes of the Fund and the other clients' accounts, and the amount of
securities to be purchased or sold. It is recognized that it is possible that in
some cases this procedure could have a detrimental effect on the price or volume
of the security so far as the Fund is concerned. However, in other cases, it is
possible that the ability to participate in volume transactions and to negotiate
lower commissions will be beneficial to the Fund.
PERFORMANCE INFORMATION
IN GENERAL
From time to time, the Fund may include general comparative information, such as
statistical data regarding inflation, securities indices
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or the features or performance of alternative investments, in advertisements,
sales literature and reports to shareholders. The Fund may also include
calculations, such as hypothetical compounding examples or tax-free compounding
examples, which describe hypothetical investment results in such communications.
Such performance examples will be based on an express set of assumptions and are
not indicative of the performance of the Fund.
From time to time, the total return of the Fund may be quoted in advertisements,
shareholder reports or other communications to shareholders.
TOTAL RETURN CALCULATION
The Fund computes average annual total return by determining the average annual
compounded rate of return during specified periods that equate the initial
amount invested to the ending redeemable value of such investment. This is done
by dividing the ending redeemable value of a hypothetical $1,000 initial payment
by $1,000 and raising the quotient to a power equal to one divided by the number
of years (or fractional portion thereof) covered by the computation and
subtracting one from the result. This calculation can be expressed as follows:
n
Average Annual Total Return = P (1 + T) = ERV
Where: ERV = ending redeemable value at the end of the period covered by the
computation of a hypothetical $1,000 payment made at the
beginning of the period.
P = hypothetical initial payment of $1,000.
n = period covered by the computation, expressed in terms of years.
T = average annual total return.
The Fund computes the aggregate total return by determining the aggregate
compounded rate of return during specified periods that likewise equate the
initial amount invested to the ending redeemable value of such investment. The
formula for calculating aggregate total return is as follows:
Aggregate Total Return = [ (ERV) - 1 ]
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P
Where: ERV = ending redeemable value at the end of the period covered by the
computation of a hypothetical $1,000 payment made at the
beginning of the period.
P = hypothetical initial payment of $1,000.
The calculations of average annual total return and aggregate total return
assume the reinvestment of all dividends and capital gain distributions on the
reinvestment dates during the period. The ending redeemable value (variable
"ERV" in each formula) is determined by assuming complete redemption of the
hypothetical investment and the deduction of all nonrecurring charges at the end
of the period covered by the computations. Since performance will fluctuate,
performance data for the Fund should not be used to compare an investment in the
Fund's shares with bank deposits, savings accounts and similar investment
alternatives which often provide an agreed-upon or guaranteed fixed yield for a
stated period of time. Shareholders should remember that performance is
generally a function of the kind and quality of the instruments held in a
portfolio, portfolio maturity, operating expenses and market conditions.
Based upon the foregoing calculations, the average annual total return for the
Bjurman Micro-Cap Growth Fund for the fiscal year ended March 31, 1998 was
70.17%.
PERFORMANCE AND ADVERTISEMENTS
From time to time, in marketing and other fund literature, the Fund's
performance may be compared to the performance of other mutual
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funds in general or to the performance of particular types of mutual funds with
similar investment goals, as tracked by independent organizations. Among these
organizations, Lipper Analytical Services, Inc. ("Lipper"), a widely used
independent research firm which ranks mutual funds by overall performance,
investment objectives and assets, may be cited. Lipper performance figures are
based on changes in net asset value, with all income and capital gains dividends
reinvested. Such calculations do not include the effect of any sales charges
imposed by other funds. The Fund will be compared to Lipper's appropriate fund
category, that is, by fund objective and portfolio holdings. The Fund's
performance may also be compared to the average performance of its Lipper
category. The Fund's performance may also be compared to the performance of
other mutual funds by Morningstar, Inc. ("Morningstar"), which ranks funds on
the basis of historical risk and total return. Morningstar's rankings range from
five stars (highest) to one star (lowest) and represent Morningstar's assessment
of the historical risk level and total return of a fund as a weighted average
for three, five and ten year periods. Ranks are not absolute or necessarily
predictive of future performance.
In assessing such comparisons of yield, return or volatility, an investor should
keep in mind that the composition of the investments in the reported indices and
averages is not identical to those of the Fund, that the averages are generally
unmanaged, and that the items included in the calculations of such averages may
not be identical to the formula used by the Fund to calculate its figures.
OTHER INFORMATION
LIMITATION OF TRUSTEES' LIABILITY
The Trust Instrument provides that a Trustee shall be personally liable only to
the Trust for any act, omission or obligation of the Trust or Trustee. A Trustee
will not be liable for any act or omission of any officer, employee, agent or
investment adviser of the Trust. The Trust Instrument also provides that the
Trust will indemnify its Trustees and officers against liabilities and expenses
incurred in connection with actual or threatened litigation in which they may be
involved because of their offices with the Trust unless it is determined in the
manner provided in the Trust Instrument that they have not acted in good faith
in the reasonable belief that their actions were in the best interests of the
Trust. However, nothing in the Trust Instrument shall protect or indemnify a
Trustee against any liability for his or her willful misfeasance, bad faith,
gross negligence or reckless disregard of his or her duties. All Trustee's
liability is further subject to the limitations imposed by the 1940 Act.
INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP, 1000 Wilshire Boulevard, Los Angeles, California,
90017-2472, has been selected as the independent accountants for the Fund.
Deloitte & Touche LLP provides audit and tax services. The books of the Fund
will be audited at least once a year by Deloitte & Touche LLP.
REPORTS TO SHAREHOLDERS
Shareholders will receive unaudited semi-annual reports describing the Fund's
investment operations and annual financial statements audited by the Fund's
independent accountants. Inquiries regarding the Fund may be directed to
Countrywide Fund Services, Inc. at (800) 227-7264.
FINANCIAL STATEMENTS
The Fund's audited annual financial statements, including the notes thereto,
dated March 31, 1998, are incorporated by reference from the Fund's March 31,
1998 Annual Report to Shareholders.
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