FORWARD FUNDS, INC.
The Global Asset Allocation Fund
The U.S. Equity Fund
The Global Bond Fund
The International Equity Fund
The Real Estate Investment Fund
The Small Capitalization Equity Fund
Supplement dated December 10, 1999
to the Statement of Additional Information
dated May 3, 1999
This supplement supersedes and replaces any existing supplements to the
Statement of Additional Information. This supplement provides new and additional
information beyond that contained in the Statement of Additional Information and
should be retained and read in conjunction with the Statement of Additional
Information.
The following information replaces and supplements similar information found
under the heading "Distributor" in the "Management of the Funds" section
beginning on page 2:
As of December 1, 1999, shares of Forward Funds, Inc. (the "Company") are
distributed by Provident Distributors, Inc. (the "Distributor"), which is not a
bank affiliate. Prior to such date First Data Distributors, Inc. acted as the
distributor of the Company's shares.
The Distributor, Four Falls Corporate Center, 6th Floor, West Conshohocken,
Pennsylvania 19428-2961, and the Company are parties to a distribution agreement
(the "Distribution Agreement").
The following information replaces and supplements similar information found
under the heading "Administrator and Transfer Agent " in the "Management of the
Funds" section beginning on page 2:
Effective December 1, 1999, First Data Investor Services Group, Inc. ("Investor
Services Group"), administrator and transfer agent to the Company, became a
majority-owned subsidiary of PNC Bank Corp. As a result of the transaction,
Investor Services Group is now known as PFPC Inc. ("PFPC").
The following information replaces and supplements similar information found
under the heading "Investment Advisers" in the "Management of the Funds" section
beginning on page 2 regarding the change in control of the Adviser to the Global
Bond Fund:
Pacific Investment Management Company ("PIMCO") serves as investment adviser to
the Global Bond Fund (the "Fund") pursuant to an investment advisory contract
("Advisory Contract") between PIMCO and the Fund. PIMCO is responsible for
making investment decisions and placing orders for the purchase and sale of the
Fund's investments directly with the issuers or with brokers or dealers selected
by it in its discretion. See "Portfolio Transactions." PIMCO also furnishes to
the Board of Directors, which has overall responsibility for the business and
affairs of the Fund, periodic reports on the investment performance of the Fund.
PIMCO is a subsidiary partnership of PIMCO Advisors L.P. ("PIMCO Advisors"), a
Delaware limited partnership. The general partners of PIMCO Advisors are PIMCO
Partners, G.P. and PIMCO Advisors Holdings L.P. ("PAH"). PIMCO Partners, G.P. is
a general partnership between PIMCO Holding LLC, a Delaware limited liability
company and an indirect wholly-owned subsidiary of Pacific Life Insurance
Company, and PIMCO Partners LLC, a California limited liability company
controlled by the current Managing Directors and two former Managing Directors
of PIMCO. PIMCO Partners, G.P. is the sole general partner of PAH.
On October 31, 1999, PIMCO Advisors, PAH and Allianz AG ("Allianz") announced
that they had reached a definitive agreement pursuant to which Allianz will
acquire majority ownership of PIMCO Advisors and its subsidiaries, including
PIMCO (the "Allianz Transaction"). Under the terms of the transaction, Allianz
will acquire all of PAH, the publicly traded general partner of PIMCO Advisors.
Pacific Life Insurance Company will retain an approximately 30% interest in
PIMCO Advisors. The Allianz Transaction is currently expected to be completed by
the end of the first quarter of 2000.
Allianz is the world's second largest insurance company and a leading provider
of financial services, particularly in Europe, and is represented in 68
countries worldwide through subsidiaries, branch and representative offices, and
other affiliated entities. Allianz currently has assets under management of more
than $390 billion, and in its last fiscal year wrote approximately $50 billion
in gross insurance premiums. After consummation of the transaction, the combined
firms will have over $650 billion in assets under management.
Affiliates of Allianz currently include Dresdner Bank AG, Deutsche Bank AG,
Munich Re, and HypoVereinsbank. These entities, as well as certain
broker-dealers controlled by or affiliated with these entities, such as Bankers
Trust Company and BT Alex Brown, Inc. are considered the "Affiliated Brokers".
Once the Allianz transaction is consummated, absent a U.S. Securities And
Exchange Commission exemption or other relief, the Fund would generally be
precluded from effecting principal transactions with the Affiliated Brokers, and
its ability to purchase securities being underwritten by an Affiliated Broker or
to utilize the Affiliated Brokers for agency transactions would be subject to
restrictions. PIMCO does not believe that the restrictions on transactions with
the Affiliated Brokers described above will materially adversely affect its
ability, post-closing, to provide services to the Fund, the Fund's ability to
take advantage of market opportunities, or the Fund's overall performance.
The other Funds of the Company for which PIMCO (or an affiliate) does not serve
as investment adviser would not, in general, be subject to these same
restrictions post-closing.
The consummation of the Allianz Transaction is subject to the approval of the
public unitholders of PAH, as well as to certain regulatory and client
approvals, including the approval of the Board of Directors of the Company and
the approval of the shareholders of the Fund, and other conditions customary to
transactions of this kind.
This Statement of Additional Information will be supplemented or revised if the
Allianz Transaction does not occur substantially as set forth above.
FF-1299-01
