MEMORIAL FUNDS
GOVERNMENT BOND FUND
CORPORATE BOND FUND
GROWTH EQUITY FUND
VALUE EQUITY FUND
INSTITUTIONAL SHARES
Supplement Dated December 16, 1998 to
Prospectus Dated March 15, 1998
1. Page 5 of the Prospectus is amended by deleting the "Annual Fund Operating
Expenses" table and replacing it with the following:
ANNUAL FUND OPERATING EXPENSES(1)
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
Government Corporate Growth Value
Bond Bond Equity Equity
Fund Fund Fund Fund
---- ---- ---- ----
Investment Advisory Fees 0.23% 0.23% 0.35% 0.35%
Rule 12b-1 Fees None None None None
Other Expenses
Shareholder Service Fees 0.17% 0.17% 0.15% 0.15%
Miscellaneous 0.35% 0.35% 0.50% 0.50%
----- ----- ----- -----
Total Operating Expenses 0.75% 0.75% 1.00% 1.00%
(1) Annual Fund Operating Expenses are calculated as a percentage of each
Fund's average net assets assuming average net assets of at least $50 million.
If the average net assets of a Fund are lower in any given year, the expenses
will be a higher percentage of the Fund's assets.
2. Page 9 of the Prospectus is amended by deleting the third paragraph and
accompanying table and replacing them with the following:
For its services under the Investment Advisory Agreement, the Adviser
receives the following fees with respect to the following funds:
ADVISORY FEE
(as a percentage of
average daily net assets)
Government Bond Fund 0.23%
Corporate Bond Fund 0.23%
Growth Equity Fund 0.35%
Value Equity Fund 0.35%
3. The Prospectus is amended by deleting the Section "Shareholder Services" on
pages l6-l7 of the Prospectus and replacing it with the following:
SHAREHOLDER SERVICES
The Trust has adopted a shareholder services plan providing that the Trust
may obtain the services of qualified financial institutions to act as
shareholder servicing agents for their customers. Under this plan, the Trust has
entered into an agreement whereby Memorial Group, Inc., a corporation of which
Christopher W. Hamm, the Chairman of the Board of Trustees and President of the
Trust, is the sole shareholder, performs certain shareholder services not
otherwise provided by the Funds' transfer agent. For these services, the Trust
pays Memorial Group, Inc. fees of 0.15% annually of the average daily net assets
of the Institutional Shares of Growth Equity Fund and Value Equity Fund and
0.17% annually of the average daily net assets of the Institutional Shares of
Government Bond Fund and Corporate Bond Fund owned by investors for which the
Memorial Group, Inc. maintains a servicing relationship. The Memorial Group,
Inc. has received or expects to receive from FAdS and its affiliates payments of
approximately 10 basis points on $43,027,468.37 and 12 basis points on
$138,981,438.22 of the Funds' average net assets for providing administrative
and shareholder servicing support during the period of the Funds operation
prior to the inception of the current shareholder services agreement.
4. The Prospectus is amended by deleting the Section "Custody" on page l7 of the
Prospectus and replacing it with the following:
CUSTODY
Investors Bank & Trust Company serves as each Fund's custodian and may appoint
subcustodians for the foreign securities and other assets held in foreign
countries.
<PAGE>
MEMORIAL FUNDS
GOVERNMENT BOND FUND
CORPORATE BOND FUND
GROWTH EQUITY FUND
VALUE EQUITY FUND
TRUST SHARES
Supplement Dated December 16, 1998 to
Prospectus Dated March 15, 1998
1. Page 5 of the Prospectus is amended by deleting the "Annual Fund Operating
Expenses" table and "Example" and replacing them with the following:
ANNUAL FUND OPERATING EXPENSES(1)
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
Government Corporate Growth Value
Bond Bond Equity Equity
Fund Fund Fund Fund
---- ---- ---- ----
Investment Advisory Fees 0.23% 0.23% 0.35% 0.35%
Rule 12b-1 Fees 0.25% 0.25% 0.25% 0.25%
Other Expenses 0.65% 0.65% 0.85% 0.85%
------ ----- ----- -----
Total Operating Expenses 1.13% 1.13% 1.45% 1.45%
Annual Fund Operating Expenses are calculated as a percentage of each
Fund's average net assets assuming average net assets of at least $7.5 million.
If the average net assets of a Fund are lower in any given year, the expenses
will be a higher percentage of the Fund's assets.
EXAMPLE
The following hypothetical example indicates the dollar amount of expenses
that you would pay if you invested $1,000 in a Fund's Shares, assuming that (1)
the Fund's expenses are as listed above, (2) the Fund has a 5% annual return and
(3) you reinvest all dividends and distributions paid by the Fund. The example
does not represent past or future expenses or return; actual expenses and return
may be more or less than indicated.
1 Year 3 Years
------ -------
Government Bond Fund $11 $36
Corporate Bond Fund $11 $36
Growth Equity Fund $15 $46
Value Equity Fund $15 $46
2. Page 9 of the Prospectus is amended by deleting the second paragraph and
accompanying table and replacing them with the following:
For its services under the Investment Advisory Agreement, the Adviser
receives the following fees with respect to the following funds:
ADVISORY FEE
(as a percentage of
average daily net assets)
Government Bond Fund 0.23%
Corporate Bond Fund 0.23%
Growth Equity Fund 0.35%
Value Equity Fund 0.35%
3. Pages 16-17 of the Prospectus are amended by deleting the Section
"Distribution Expenses" and replacing it with the following:
DISTRIBUTION EXPENSES
Under a distribution plan (the "Plan") adopted by the Board, the Funds
may reimburse FFSI for the distribution expenses incurred by FFSI on behalf of a
Fund. These expenses may include the cost of advertising and promotional
materials, providing prospective shareholders with a Fund's prospectus,
statement of additional information and shareholder reports, reimbursing the
Distributor for its distribution expenses and compensating others who may
provide assistance in distributing Shares of a Fund. These expenses may include
costs of FFSI's offices such as rent, communications equipment, employee
salaries and overhead costs. The Trust will not reimburse FFSI for any
distribution expenses in any fiscal year of a Fund in excess of 0.25% of the
Fund's average daily net assets. During the period in which the Plan and the
related Distribution Agreement are in effect, the Board will from time to time
determine the amount of distribution expense reimbursement to be paid.
Unreimbursed expenses of the distributor incurred during a fiscal year of the
Trust may not be reimbursed by the Trust in future years or after the
termination of the Plan or the Distribution Agreement. To the extent that the
Funds engage in joint distribution activities, distribution costs will be
allocated among the participating Funds pro rata according to their net assets.
FFSI has entered into an agreement under the Plan whereby Memorial Group, Inc.,
a corporation of which Christopher W. Hamm, the Chairman of the Board of
Trustees and President of the Trust, is the sole shareholder, receives 0.25% for
performing certain distribution-related activities.
4. The Prospectus is amended by deleting the Section "Custody" on page l7 of the
Prospectus and replacing it with the following:
CUSTODY
Investors Bank & Trust Company serves as each Fund's custodian and may appoint
subcustodians for the foreign securities and other assets held in foreign
countries.
