OCTOBER 10, 2000
THE JAMES ADVANTAGE FUNDS
SUPPLEMENT TO PROSPECTUS DATED NOVEMBER 1, 1999
Effective October 10, 2000, the maximum front-end sales load imposed on
purchases of The Golden Rainbow Fund is lowered from 5.75% to 2.00%. The
Prospectus is hereby revised as follows:
EXPENSE INFORMATION (p. 6)
The existing section titled "SHAREHOLDER FEES" is deleted and replaced by the
following:
SHAREHOLDER FEES (fees paid directly from your investment):
THE GOLDEN RAINBOW FUND
<TABLE>
<CAPTION>
Class A Shares Class C Shares(a) Class R Shares(a)
-------------- -------------- --------------
<S> <C> <C> <C>
Maximum Sales Load Imposed on Purchases 2.00% None None
Maximum Deferred Sales Load Imposed
on Purchases None(b) 1.00%(c) None
</TABLE>
THE JAMES SMALL CAP FUND, THE JAMES LARGE CAP PLUS FUND,
THE JAMES MARKET NEUTRAL FUND
<TABLE>
<CAPTION>
Class A Shares Class C Shares(a) Class R Shares(a)
-------------- -------------- --------------
<S> <C> <C> <C>
Maximum Sales Load Imposed on Purchases 5.75% None None
Maximum Deferred Sales Load Imposed
on Purchases None(b) 1.00%(c) None
</TABLE>
(a) As of the date of this Prospectus, these classes have not yet commenced
operations.
(b) Purchases at net asset value of amounts totaling $1 million or more may be
subject to a contingent deferred sales load of 1% if a redemption occurs
within 18 months of purchase and a commission was paid to a participating
unaffiliated dealer.
(c) This sales load applies if you redeem your shares within 1 year of
purchase.
EXAMPLE (p.8)
The existing section for The Golden Rainbow Fund is deleted and replaced by the
following:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
THE GOLDEN RAINBOW FUND
Class A Shares $309 $561 $832 $1,606
Class C Shares 337 730
Class R Shares 152 471
<PAGE>
HOW TO PURCHASE SHARES
The existing section titled "CLASS A SHARES" (p. 12) is deleted and replaced by
the following:
Class A shares of each Fund are purchased at the public offering price. The
public offering price is the next determined NAV per share plus a sales load as
shown in the table below. Class A shares are subject to a continuing .25% annual
distribution fee.
The following table illustrates the initial sales load breakpoints for the
purchase of shares of The Golden Rainbow Fund for accounts opened after October
9, 2000:
================================================================================
Sales Load as of % of:
Public Net
Offering Amount Dealer Reallowance as % of
Amount of Investment Price Invested Public Offering Price
================================================================================
Less than $1,000,000 2.00% 2.00% 1.50%
$1,000,000 or more None None None
================================================================================
The following table illustrates the initial sales load breakpoints for the
purchase of shares of The James Small Cap Fund, The James Large Cap Plus Fund
and The James Market Neutral Fund after October 31, 1999:
================================================================================
Sales Load as of % of:
Public Net
Offering Amount Dealer Reallowance as % of
Amount of Investment Price Invested Public Offering Price
================================================================================
Less than $50,000 5.75% 6.10% 5.25%
$50,000 but less than $100,000 4.00% 4.18% 3.50%
$100,000 but less than $250,000 3.50% 3.65% 3.00%
$250,000 but less than $500,000 2.50% 2.61% 2.00%
$500,000 but less than $1,000,000 2.00% 2.09% 1.50%
$1,000,000 or more None None None
================================================================================
For initial purchases of Class A shares of the Funds of $1 million or more and
subsequent purchases further increasing the size of the account, a dealer's
commission of 1% of such purchases may be paid by the Distributor to
participating unaffiliated dealers through whom such purchases are effected. A
contingent deferred sales load is imposed upon redemptions of such Class A
shares if the dealer's commission described above was paid by the Distributor
and the shares are redeemed within 18 months from the date of purchase. The
contingent deferred sales load paid to the Distributor will be 1% of the NAV at
the time of purchase of the Class A shares being redeemed. If a purchase of
Class A shares is subject to the contingent deferred sales load, you will be so
notified on the confirmation you receive for such purchase. Redemptions of such
Class A shares of a Fund held for 18 months or more will not be subject to the
contingent deferred sales load.
