[LOGO]
PROSPECTUS
JUNE 22, 2000
VALUE EQUITY FUND
Institutional Shares
Shares of the Fund are offered to investors
without any sales charge or Rule 12b-1
(distribution) fees.
The Securities and Exchange Commission has not approved or
disapproved the Fund's shares or determined whether this
prospectus is accurate or complete.
Any representation to the contrary is a criminal
offense.
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TABLE OF CONTENTS
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RISK/RETURN SUMMARY 2
PERFORMANCE 3
FEE TABLE 4
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES
AND PRINCIPAL RISKS 4
MANAGEMENT 5
YOUR ACCOUNT 7
How to Contact the Fund 7
General Information 7
Buying Shares 7
Selling Shares 9
Exchange Privileges 10
SUBADVISER PAST PERFORMANCE 11
OTHER INFORMATION 12
FINANCIAL HIGHLIGHTS 13
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RISK/RETURN SUMMARY
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CONCEPTS TO UNDERSTAND INVESTMENT GOAL Long-term capital appreciation.
Value Investing means to
invest in stocks whose PRINCIPAL INVESTMENT STRATEGY Value Equity Fund (the "Fund") uses a "value investing"
prices are low relative to style by investing under normal circumstances at least 65 percent of its total assets
stocks of comparable in the common stock of domestic companies that its subadviser believes are
companies under-priced relative to comparable securities determined by price/earnings ratios,
Common Stock is ownership cash flows or other measures. The Fund only invests in companies that have a minimum
shares in a corporation market capitalization of $250 million at the time of purchase and seeks to maintain a
that are sold initially by minimum average weighted market capitalization of $5 billion.
the corporation and then
traded by investors PRINCIPAL RISKS OF INVESTING IN THE FUND
Price/Earnings Ratio means
the ratio of a company's You could lose money on your investment in the Fund and the Fund could under-perform
current market other investments. The principal risks of investing in the Fund include:
capitalization divided by
annual earnings per share o The stock market goes down
Market capitalization of a o The stock market continues to undervalue the stocks in the Fund's portfolio
company means the value of o The subadviser's judgment as to the value of a stock proves to be wrong
the company's common stock o The Fund's particular investment style falls out of favor with the market
in the stock market
An investment in the Fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
WHO MAY WANT TO INVEST IN THE FUND
You may want to purchase shares of the Fund if:
o You are willing to tolerate significant changes in the value of your
investment
o You are pursuing a long-term goal
o You are willing to accept higher short-term risk
The Fund may not be appropriate for you if:
o You want an investment that pursues market trends or focuses only on
particular sectors or industries
o You need regular income or stability of principal
o You are pursuing a short-term goal or investing emergency reserves
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PERFORMANCE
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The following chart and table provides some indication of the risks of investing
in the Fund by showing performance and how the Fund's returns compare to a broad
measure of market performance. Performance information represents only past
performance and does not necessarily indicate future results.
VALUE EQUITY FUND
The following chart shows the annual total return of the Fund for the full
calendar year the Fund has operated.
[EDGAR Representation of Bar Chart]
1999 -3.96%
During the period shown in the chart, the highest quarterly return was 10.84%
(for the quarter ended June 30, 1999) and the lowest quarterly return was
-11.23% (for the quarter ended September 30, 1999).
The following table compares the Fund's average annual total returns as of
December 31, 1999 to the S&P/Barra Value Index and the Russell 1000 Value Index.
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VALUE S&P/BARRA RUSSELL 1000
YEAR(S) EQUITY FUND VALUE INDEX(1) VALUE INDEX(2)
1 Year -3.96% 12.72% 7.35%
Since Inception (3/30/98) -6.67% 9.22% 6.63%
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(1) The S&P/Barra Value Index tracks stocks in the S&P 500 Index with lower
price-to-book ratios. One cannot invest directly in the index. While both
the S&P/Barra Value Index and the Russell 1000 Value Index are shown, the
subadviser believes that the S&P/Barra Value Index more accurately
represents the Fund's industry diversification, capitalization range and
risk characteristics.
(2) The Russell 1000 Value Index tracks stocks in the Russell 1000 Index with
lower price-to-book ratios and lower forecasted growth values. One cannot
invest directly in the index.
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FEE TABLE
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The following tables describe the fees and expenses that you will pay if you
invest in the Fund.
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested Distributions None
Redemption Fee None
Exchange Fee None
ANNUAL FUND OPERATING EXPENSES(1)
(expenses that are deducted from Fund assets)
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Advisory Fees 0.35%
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Distribution (12b-1) Fees None
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Other Expenses 0.74%
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Shareholder Services Fees 0.20%
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Miscellaneous 0.54%
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TOTAL ANNUAL FUND OPERATING EXPENSES 1.09%
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Fee Waiver and Expense Reimbursement(2) 0.09%
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Net Expenses 1.00%
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(1) Based on amounts incurred during the Fund's fiscal year ended December 31,
1999 as stated as a percentage of net assets.
(2) Based on certain contractual fee waivers and expense reimbursements
effective through April 30, 2001.
EXAMPLE
The following is a hypothetical example intended to help you compare the cost of
investing in the Fund to the cost of investing in other mutual funds. This
example assumes a $10,000 investment in the Fund, a 5 percent annual return,
that the Fund's operating expenses remain the same as stated in the table above
(before waivers and reimbursements) and reinvestment of all distributions and
redemption at the end of each period. Although your actual costs may be higher
or lower, under these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
$111 $346 $600 $1,326
INVESTMENT OBJECTIVES, PRINCIPAL
INVESTMENT STRATEGIES AND PRINCIPAL RISKS
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INVESTMENT OBJECTIVE
The investment objective of the Fund is long-term capital appreciation. There is
no assurance that the Fund will achieve this objective.
PRINCIPAL INVESTMENT STRATEGIES
The Fund seeks to attain its objective by investing under normal circumstances
at least 65 percent of its total assets in common stocks of domestic companies.
The Fund only invests in companies having a minimum market capitalization of
$250 million at the time of purchase, and seeks to maintain a minimum average
weighted market capitalization of $5 billion.
Using a value approach, the Fund seeks to invest in stocks that are underpriced
relative to other stocks, determined by price/earnings ratios, cash flows or
other measures. The subadviser relies on stock selection to achieve its results,
rather than trying to time market fluctuations. In selecting stocks, the
subadviser establishes valuation parameters, by using relative ratios or target
prices to evaluate companies on several levels.
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The Fund may also invest in preferred stocks and securities convertible into
common stock. The Fund will only purchase convertible securities that, at the
time of purchase, are investment grade or, are unrated and determined by the
subadviser to be of comparable quality.
PRINCIPAL INVESTMENT RISKS
GENERALLY
There is no assurance that the Fund will achieve its investment objective, and
the Fund's net asset value and total return will fluctuate based upon changes in
the value of its portfolio securities. Upon redemption, an investment in a Fund
may be worth more or less than its original value. No Fund, by itself, provides
a complete investment program.
All investments made by the Fund have some risk. Among other things, the market
value of any security in which a Fund may invest is based upon the market's
perception of value and not necessarily the book value of an issuer or other
objective measure of the issuer's worth. Certain investments and investment
techniques have additional risks, such as the potential use of leverage by a
Fund through borrowings, securities lending and other investment techniques.
The Fund may be an appropriate investment if you are seeking long-term growth in
your investment, and are willing to tolerate significant fluctuations in the
value of your investment in response to changes in the market value of the
stocks the Fund holds. This type of market movement may affect the price of the
securities of a single issuer, a segment of the domestic stock market or the
entire market. The investment style for the Fund could fall out of favor with
the market. In other words, if investors lose interest in "value" stocks, then
the net asset value of the Fund could also decrease.
TEMPORARY DEFENSIVE POSITION The Fund may hold cash or cash equivalents such as
high quality money market instruments pending investment and to retain
flexibility in meeting redemptions and paying expenses. In addition, in order to
respond to adverse market, economic or other conditions, the Fund may assume a
temporary defensive position and invest without limit in these instruments. As a
result, the Fund may be unable to achieve its investment objective.
MANAGEMENT
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The business of Memorial Funds (the "Trust") and the Fund is managed under the
direction of the Board of Trustees (the "Board"). The Board formulates the
general policies of the Fund and all other series of the Trust and meets
periodically to review the Fund's performance, monitor investment activities and
practices and discuss other matters affecting the Fund. Additional information
regarding the Trustees, as well as executive officers, may be found in the
Statement of Additional Information ("SAI").
ADVISER
Forum Investment Advisors, LLC (the "Adviser"), Two Portland Square, Portland,
Maine 04101, serves as investment adviser to the Fund. Subject to the general
control of the Board, the Adviser is responsible for among other things,
developing a continuing investment program for the Fund in accordance with its
investment objective, reviewing the investment strategies and policies of the
Fund and advising the Board on the selection of additional subadvisers. The
Adviser has entered into an investment sub-advisory agreement with the
subadviser to exercise investment discretion over the assets (or a portion of
assets) of the Fund. For its services, the Adviser receives an advisory fee at
an annual rate of 0.35 percent of the average daily net assets of Value Equity
Fund.
INVESTMENT CONSULTANT
To assist it in carrying out its responsibilities, the Adviser has retained
Wellesley Group, Inc., 800 South Street, Waltham, Massachusetts 02154, to
provide data with which the Adviser and the Board can monitor and evaluate the
performance of the Fund and the subadviser.
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SUBADVISER/PORTFOLIO MANAGER
The Adviser has retained the following subadviser to render advisory services
and make daily investment decisions for the Fund. The day-to-day management of
the Fund is performed by a portfolio manager employed by the subadviser to the
Fund. The subadviser is registered or is exempt from registration as an
investment adviser under the Investment Advisers Act of 1940. The subadviser for
the Fund and its portfolio manager's business experience follow:
PPM AMERICA, INC. ("PPM"), 225 West Wacker Drive, Suite 1200, Chicago, Illinois
60606, manages the portfolio of Value Equity Fund. PPM presently manages
approximately $37 billion in assets. PPM's equity team manages approximately
$5.1 billion in large cap value assets for various institutional clients based
in the U.S. and abroad. PPM utilizes a team of investment professionals acting
together to manage the assets of the Fund. The team meets regularly to review
portfolio holdings and to discuss purchase and sale activity. The team adjusts
holdings in the Fund, as they deem appropriate, in the pursuit of the Fund's
objectives.
OTHER SERVICE PROVIDERS
The Forum Financial Group of companies ("Forum") provides various services to
the Fund. As of March 31, 2000, Forum provided administration and distribution
services to investment companies and collective investment funds with assets of
approximately $67 billion.
Forum Fund Services, LLC, a registered broker-dealer and member of the National
Association of Securities Dealers, Inc., is the distributor (principal
underwriter) of the Fund's shares. The distributor acts as the agent of Memorial
Funds in connection with the offering of shares of the Fund. The distributor may
enter into arrangements with banks, broker-dealers or other financial
institutions through which investors may purchase or redeem shares and may, at
its own expense, compensate persons who provide services in connection with the
sale or expected sale of shares of the Fund.
Forum Shareholder Services, LLC (the "Transfer Agent") is the Fund's transfer
agent.
SHAREHOLDER SERVICES PLAN
The Trust has adopted a shareholder services plan permitting the Trust to
compensate financial institutions for acting as shareholder servicing agents for
their customers. Under this plan, the Trust has entered into an agreement with
Memorial Group, Inc., a corporation of which Christopher W. Hamm, the Chairman
of the Board and President of the Trust, is the sole shareholder. Memorial
Group, Inc. performs certain shareholder services not provided by the Transfer
Agent and is paid fees at an annual rate of 0.25 percent of the average daily
net assets of the shares of the Fund owned by investors for which Memorial
Group, Inc. maintains a servicing relationship.
FUND EXPENSES
The Fund pays for all of its expenses. Each Fund's expenses are comprised of
expenses attributable to the particular Fund as well as expenses not
attributable to any particular Fund that are allocated among the Memorial Funds.
The Adviser or other service providers may waive all or any portion of their
fees, which are accrued daily and paid monthly. Any waiver would have the effect
of increasing a Fund's performance for the period during which the waiver was in
effect.
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YOUR ACCOUNT
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HOW TO CONTACT THE FUND GENERAL INFORMATION
WRITE TO US AT: You pay no sales charge to purchase or sell (redeem) shares of the Fund. You may
Memorial Funds purchase and sell shares at the net asset value of a share or NAV next calculated
P.O. Box 446 after the Transfer Agent receives your request in proper form. If the Transfer
Portland, Maine 04112 Agent receives your request in proper form prior to 4:00 p.m., your transaction
will be priced at that day's NAV. The Fund will not accept orders that request a
OVERNIGHT ADDRESS: particular day or price for the transaction or any other special conditions.
Memorial Funds
Two Portland Square The Fund does not issue share certificates.
Portland, Maine 04101
You will receive quarterly statements and a confirmation of each transaction. You
TELEPHONE US should verify the accuracy of all transactions in your account as soon as you
TOLL-FREE AT: receive your confirmation.
(888) 263-5593
The Fund reserves the right to impose minimum investment amounts and may temporarily
WIRE INVESTMENTS (OR ACH suspend (during unusual market conditions) or discontinue any service or privilege.
PAYMENTS) TO US AT:
BankBoston WHEN AND HOW NAV IS DETERMINED The Fund calculates its NAV as of the close of the
Boston, Massachusetts New York Stock Exchange (normally 4:00 p.m., Eastern time) on each weekday except
ABA #011000390 days when the New York Stock Exchange is closed. The time at which NAV is
FOR CREDIT TO: calculated may change in case of an emergency or if the New York Stock Exchange
Forum Shareholder closes early. The Fund's NAV is determined by taking the market value of all
Services, LLC securities owned by the fund (plus all other assets such as cash), subtracting all
Account # 541-54171 liabilities and then dividing the result (net assets) by the number of shares
Memorial Funds outstanding. The Fund values securities for which market quotations are readily
(Your Name) available at current market value. If market quotations are not readily available,
(Your Account Number) the Fund values securities at fair value, as determined by the Board.
TRANSACTIONS THROUGH THIRD PARTIES If you invest through a broker or other
financial institution, the policies and fees charged by that institution may be
different than those of the Fund. Banks, brokers, retirement plans and financial
advisers may charge transaction fees and may set different minimum investments
or limitations on buying or selling shares. Consult a representative of your
financial institution or retirement plan for further information.
BUYING SHARES
HOW TO MAKE PAYMENTS All investments must be in U.S. dollars and checks must be
drawn on U.S. banks.
CHECKS For individual, sole proprietorship, joint and Uniform Gifts to
Minors Act ("UGMA") or Uniform Transfer to Minors Act ("UTMA") accounts,
the check must be made payable to "Memorial Funds" or to one or more owners
of the account and endorsed to "Memorial Funds." For all other accounts,
the check must be made payable on its face to "Memorial Funds." No other
method of check payment is acceptable (for instance, you may not pay by
travelers check).
PURCHASES BY AUTOMATED CLEARING HOUSE ("ACH") This service allows you to
purchase additional shares through an electronic transfer of money from
your checking or savings account. When you make an additional purchase by
telephone, the Transfer Agent will automatically debit your pre-designated
bank account for the desired amount. You may call (888) 263-5593 to request
an ACH transaction.
WIRES Instruct your financial institution to make a Federal Funds wire
payment to us. Your financial institution may charge you a fee for this
service.
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MINIMUM INVESTMENTS The minimum initial investment for the Fund is $2,000. There
is no minimum additional investment.
Management of the Fund may choose to waive the initial investment minimum.
ACCOUNT REQUIREMENTS
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TYPE OF ACCOUNT REQUIREMENT
INDIVIDUAL, SOLE PROPRIETORSHIP AND JOINT ACCOUNTS o Instructions must be signed by all persons
Individual accounts are owned by one person, as are sole required to sign exactly as their names appear on
proprietorship accounts. Joint accounts can have two or the account
more owners (tenants)
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA) o Depending on state laws, you can set up a
These custodial accounts provide a way to give money to a custodial account under the UGMA or the UTMA
child and obtain tax benefits o The custodian must sign instructions in a
manner indicating custodial capacity
BUSINESS ENTITIES o Submit a Corporate/Organization Resolution
form or similar document
TRUSTS o The trust must be established before an
account can be opened
o Provide a certified trust document, or the
pages from the trust document that identify the
trustees
INVESTMENT PROCEDURES
HOW TO OPEN AN ACCOUNT HOW TO ADD TO YOUR ACCOUNT
BY CHECK BY CHECK
o Call or write us for an account application o Fill out an investment slip from a
and/or a Corporate/Organization Resolution form confirmation statement or write us a letter
o Complete the application o Write your account number on your check
o Mail us your application and a check o Mail us the slip (or your letter) and a check
BY WIRE BY WIRE
o Call or write us for an account application o Call to notify us of your incoming wire
and/or a Corporate/Organization Resolution form o Instruct your bank to wire your money to us
o Complete the application
o Call us to fax the completed application and we
will assign you an account number
o Mail us your original application
o Instruct your bank to wire your money to us
BY ACH PAYMENT BY SYSTEMATIC INVESTMENT
o Call or write us for an account application o Complete the Systematic Investment section of
and/or a Corporate/Organization Resolution form the application
o Complete the application o Attach a voided check to your application
o Call us to fax the completed application and we o Mail us the completed application and the
will assign you an account number voided check
o Mail us your original application
o Make an ACH payment
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SYSTEMATIC INVESTMENTS You may invest a specified amount of money in the Fund
once or twice a month on specified dates. These payments are taken from your
bank account by ACH payment. Systematic investments must be for at least $100.
LIMITATIONS ON PURCHASES The Fund reserves the right to refuse any purchase
(including exchange) request, particularly requests that could adversely affect
the Fund or its operations. This includes those from any individual or group
who, in the Fund's view, is likely to engage in excessive trading (usually
defined as more than four exchanges out of a Fund within a calendar year).
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CANCELED OR FAILED PAYMENTS The Fund accepts checks and ACH transfers at full
value subject to collection. If your payment for shares is not received or you
pay with a check or ACH transfer that does not clear, your purchase will be
canceled. You will be responsible for any losses or expenses incurred by a Fund
or the Transfer Agent, and the Fund may redeem shares you own in the account (or
another identically registered account in any Fund) as reimbursement. The Fund
and its agents have the right to reject or cancel any purchase, exchange or
redemption due to nonpayment.
SELLING SHARES
The Fund processes redemption orders promptly and you will generally receive
redemption proceeds within a week. Delays may occur in cases of very large
redemptions, excessive trading or during unusual market conditions. If the Fund
has not yet collected payment for the shares you are selling, however, it may
delay sending redemption proceeds for up to 15 calendar days.
HOW TO SELL SHARES FROM YOUR ACCOUNT
BY MAIL
o Prepare a written request including:
o Your name(s) and signature(s)
o Your account number
o The Fund name
o The dollar amount or number of shares you want to sell
o How and where to send your proceeds
o Obtain a signature guarantee (if required)
o Obtain other documentation (if required)
o Mail us your request and documentation
BY WIRE
o Wire requests are only available if you provided bank account information
on your account application and your request is for $5,000 or more
o Call us with your request (unless you declined telephone redemption
privileges on your account application) (See "By Telephone") OR
o Mail us your request (See "By Mail")
BY TELEPHONE
o Call us with your request (unless you declined telephone redemption
privileges on your account application)
o Provide the following information:
o Your account number
o Exact name(s) in which the account is registered
o Additional form of identification
o Your proceeds will be:
o Mailed to you OR
o Wired to you (unless you did not provide bank account information on
your account application) (See "By Wire")
SYSTEMATICALLY
o Complete the systematic withdrawal section of the application
o Attach a voided check to your application
o Mail us your completed application
TELEPHONE REDEMPTION PRIVILEGES You may redeem your shares by telephone unless
you declined telephone redemption privileges on your account application. You
may be responsible for any fraudulent telephone order as long as the Transfer
Agent takes reasonable measures to verify the order.
WIRE REDEMPTIONS You may have your redemption proceeds wired to you if you
provided bank account information on your account application. The minimum
amount you may redeem by wire is $5,000. If you wish to make your wire request
by telephone, you must also have telephone redemption privileges.
SYSTEMATIC WITHDRAWAL If you own shares of the Fund with an aggregate value of
at least $10,000, you may request a specified amount of money from your account
once a month or once a quarter on a specified date. These payments can be sent
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to your address of record by check or to a designated bank account by ACH
payment. Systematic requests must be for at least $100.
SIGNATURE GUARANTEE REQUIREMENTS To protect you and the Fund against fraud,
signatures on certain requests must have a "signature guarantee." A signature
guarantee verifies the authenticity of your signature. You can obtain one from
most banking institutions or securities brokers, but not from a notary public.
For requests made in writing, a signature guarantee is required for any of the
following:
o Sales of over $50,000 worth of shares
o Changes to a shareholder's record name
o Redemption from an account for which the address or account registration
has changed within the last 30 days
o Sending redemption proceeds to any person, address, brokerage firm or bank
account not on record
o Sending redemption proceeds to an account with a different registration
(name or ownership) from yours
o Changes to systematic investment or withdrawal, distribution, telephone
redemption or exchange option or any other election in connection with your
account
SMALL ACCOUNTS If the value of your account falls below $2,000, the Fund may ask
you to increase your balance. If the account value is still below $2,000 after
60 days, the Fund may close your account and send you the proceeds. The Fund
will not close your account if it falls below this amount solely as a result of
a reduction in your account's market value.
REDEMPTIONS IN KIND The Fund reserves the right to pay redemption proceeds in
portfolio securities rather than cash. These redemptions "in kind" usually occur
if the amount requested is large enough to affect the Fund's operations (for
example, if it represents more than 1 percent of the Fund's assets).
LOST ACCOUNTS The Transfer Agent will consider your account "lost" if
correspondence to your address of record is returned as undeliverable, unless
the Transfer Agent determines your new address. When an account is "lost," all
distributions on the account will be reinvested in additional shares of the
Fund. In addition, the amount of any outstanding (unpaid for six months or more)
checks for distributions that have been returned to the Transfer Agent will be
reinvested and the checks will be canceled.
EXCHANGE PRIVILEGES
You may sell your Fund shares and buy shares of any other series of the Memorial
Funds, also known as an exchange, by telephone or in writing. You may also
exchange Fund shares for Institutional Service Shares of Daily Assets Government
Fund (a series of the Forum Funds). Because exchanges are treated as a sale and
purchase, they may have tax consequences.
REQUIREMENTS You may exchange only between identically registered accounts
(name(s), address and taxpayer ID number). There is currently no limit on
exchanges, but each Fund reserves the right to limit exchanges. You may exchange
your shares by mail or telephone, unless you declined telephone exchange
privileges on your account application. You may be responsible for any
fraudulent telephone order as long as the Transfer Agent takes reasonable
measures to verify the order.
HOW TO EXCHANGE
BY MAIL
o Prepare a written request including:
o Your name(s) and signature(s)
o Your account number
o The names of the funds you are exchanging
o The dollar amount or number of shares you want to sell (and exchange)
o If opening a new account, complete an account application if you are
requesting different shareholder privileges
o Mail us your request and documentation
BY TELEPHONE
o Call us with your request (unless you declined telephone redemption
privileges on your account application)
o Provide the following information:
o Your account number
o Exact name(s) in which account is registered
o Additional form of identification
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SUBADVISER PAST PERFORMANCE
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The following table sets forth the combined performance data relating to the
historical performance of the PPM Diversified Large Capitalization Equity
Composite. As of December 31, 1999, the composite includes all private account
clients (i.e., non-mutual funds) as well as one mutual fund, PPM America Value
Equity Fund ("PPM Fund"), that PPM manages in the same style as the Fund. In
aggregate, this composite is valued at $1.6 billion. Both the private accounts
and the PPM Fund have investment objectives and investment policies, strategies
and risks substantially similar to those of the Fund. While PPM is primarily
responsible for the Fund's performance, the information presented does not
represent the past performance of the Fund. You should not consider this
performance data as an indication of future performance of the Fund.
All returns presented were calculated on a total return basis, include the
reinvestment of all dividends and interest, and takes into account accrued
income and realized and unrealized gains and losses. All returns reflect the
deduction of the actual investment advisory fees or highest investment advisory
fees charged, brokerage commissions and execution costs paid by the accounts
included in the composite, without provision for federal or state income taxes.
Custodial fees, if any, were not included in the calculations.
You should be aware that the use of a methodology different from that used below
to calculate performance could result in different performance data. The Fund's
performance is calculated using the method required by the U.S. Securities and
Exchange Commission, which differs from the method used to calculate the
performance of the private accounts included in the composite. The private
accounts are not subject to the same types of expenses to which the Fund is
subject nor to the diversification requirements, specific tax restrictions and
investment limitations imposed by the Investment Company Act of 1940 or
Subchapter M of the Internal Revenue Code of 1986, as amended. The performance
results for the private accounts would have been adversely affected (i.e.,
lower) if the private accounts included in the composite had been regulated as
an investment company under the federal securities laws. The performance results
for the PPM Fund would also have been adversely affected (i.e., lower) if the
actual expenses to which the Fund is subject as a regulated investment company
had been reflected in the composite.
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PPM'S COMPOSITE FOR THE RUSSELL 1000 VALUE S&P/BARRA VALUE
YEAR(S) VALUE EQUITY STYLE (1) INDEX(2) INDEX(3)
Since Inception (12/1/1992)(4) 17.18% 15.29% 18.71%
5 Years (1995-1999)(4) 20.86% 23.07% 22.94%
3 Years (1997-1999)(4) 13.02% 18.83% 18.89%
1 Year (1999) -0.45% 7.35% 12.73%
1995 43.88% 33.69% 37.00%
1996 24.14% 21.64% 21.99%
1997 28.59% 35.18% 29.99%
1998 12.78% 15.63% 14.68%
1999 -0.45% 7.35% 12.73%
Year-to-date through 5/31/00 2.65% 0.36% -0.13%
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(1) Includes all value equity accounts(s) managed by PPM with similar
investment objectives, policies and strategies.
(2) The Russell 1000 Value Index tracks stocks in the Russell 1000 Index with
lower price-to-book ratios and lower forecasted growth values. One cannot
invest directly in the index.
(3) The S&P/BARRA Value Index is constructed by ranking the securities in the
S&P 500 Index by price-to-book ratio and including the securities with the
lowest price-to-book ratios that represent approximately half of the market
capitalization of the S&P 500 Index. Other characteristics of securities in
the S&P/BARRA Value Index include high dividend yields, and high P/E
ratios. The S&P/BARRA Value Index is a market-weighted index, with each
stock affecting it in proportion to its market value. One cannot invest
directly in the index. While both the Russell 1000 Value Index and
S&P/BARRA Value Index are shown, PPM believes that the S&P/BARRA Value
Index more closely represents the private accounts' industry
diversification, capitalization range and risk characteristics.
(4) Average annual returns through December 31, 1999.
11
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OTHER INFORMATION
--------------------------------------------------------------------------------
DISTRIBUTIONS
The Fund declares and pays distributions from net investment income quarterly.
Any net capital gain realized by the Fund will be distributed at least annually.
All distributions are reinvested in additional shares, unless you elect to
receive distributions in cash. For Federal income tax purposes, distributions
are treated the same whether they are received in cash or reinvested. Shares
become entitled to receive distributions on the day after the shares are issued.
TAXES
The Fund intends to operate in a manner such that it will not be liable for
Federal income or excise tax.
The Fund's distribution of net investment income (including short-term capital
gain) is taxable to you as ordinary income. A portion of the dividends paid by
the Fund may be eligible for the dividends-received deduction for corporate
shareholders. The Fund's distribution of long-term capital gain, if any, may be
taxable to you as long-term capital gain regardless of how long you have held
your shares of the Fund. This determination is based upon how long the Fund
holds its investment. Distributions may also be subject to state and local
taxes.
Distributions of capital gain reduce the net asset value of the Fund's shares by
the amount of the distribution. If you purchase shares prior to these
distributions, you are taxed on the distribution even though the distribution
represents a return of your investment. The sale or exchange of Fund shares is a
taxable transaction for Federal income tax purposes.
The Fund may be required to withhold U.S. federal income tax at the rate of 31%
of all taxable distributions payable to you if you fail to provide the Fund with
your correct taxpayer identification number or to make required certifications,
or if you have been notified by the IRS that you are subject to backup
withholding. Backup withholding is not an additional tax. Any amounts withheld
may be credited against your U.S. federal income tax liability.
The Fund will mail you reports containing information about the income tax
status of distributions paid during the year after December 31 of each year. For
further information about the tax effects of investing in the Fund, including
state and local tax matters, please see the SAI and consult your tax adviser.
CORE AND GATEWAY(R)
The Fund may seek to achieve its investment objective by investing all of its
assets in shares of another diversified, open-end management investment company
that has corresponding investment objectives and investment policies to those of
the Fund.
12
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FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
The following table is intended to help you understand the Fund's financial
performance. Total return in the table represents the rate an investor would
have earned (or lost) on an investment in the Fund (assuming the reinvestment of
all distributions). This information has been audited by KPMG LLP. The Fund's
financial statements and the auditor's report are included in the Annual Report,
which is available upon request, without charge.
Year Ended
<TABLE>
<S> <C> <C>
12/31/99 12/31/98(1)
SELECTED DATA FOR A SINGLE SHARE
Beginning Net Asset Value $ 9.19 $10.00
Income From Investment Operations
Net investment income 0.08 0.03
Net gain (loss) on securities (realized and -0.44 -0.81
unrealized)
Total From Investment Operations -0.36 -0.78
Less Distributions
From net investment income -0.08 -0.03
From capital gain - -
Total Distributions -0.08 -0.03
Ending Net Asset Value $ 8.75 $9.19
OTHER INFORMATION
Ratios to Average Net Assets
Expenses 1.00% 1.00%(2)
Expenses (gross) (3) 1.09% 1.25%(2)
Net investment income 0.90% 0.59%(2)
Total Return -3.96% -7.76%
Portfolio Turnover Rate 60% 37%
Net Assets at End of Period (in thousands) $37,068 $30,670
</TABLE>
(1) Institutional Shares of the Fund commenced operations on March 29, 1998.
(2) Annualized.
(3) Reflects expense ratio in absence of expense reimbursements and fee
waivers.
13
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<TABLE>
<S> <C>
FOR MORE INFORMATION
[LOGO]
The following documents are available free upon request:
GOVERNMENT BOND FUND
CORPORATE BOND FUND
ANNUAL/SEMI-ANNUAL REPORTS
Each Fund will provide annual and semi-annual reports to shareholders that will GROWTH EQUITY FUND
provide additional information about the Fund's investments. In each Fund's
annual report, you will find a discussion of the market conditions and VALUE EQUITY FUND
investment strategies that significantly affected the Fund's
performances during their last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
The SAI provides more detailed information about each Fund and is
incorporated by reference into this Prospectus.
CONTACTING THE FUNDS
You can get free copies of both reports and the SAI, request other information
and discuss your questions about each Fund by contacting your broker or the
Funds at:
FORUM SHAREHOLDER SERVICES, LLC
P.O. Box 446
Portland, Maine 04112
(888) 263-5593
SECURITIES AND EXCHANGE COMMISSION INFORMATION
You can also review each Fund's reports and SAI at the Public Reference
Room of the Securities and Exchange Commission ("SEC"). The scheduled hours
of operation of the Public Reference Room may be obtained by calling the
SEC at (202) 942-8090. You can get copies of this information, for a fee,
by e-mail or by writing to:
Public Reference Room
Securities and Exchange Commission
Washington, D.C. 20549-0102
E-mail address: public [email protected]
Memorial Funds
Free copies of the reports and SAI are available from the SEC's Internet Web Site Two Portland Square
at http://www.sec.gov. Portland, ME 04101
(888) 263-5593
</TABLE>
Investment Company Act File No. 811-8529