KOBRICK CAPITAL FUND
KOBRICK EMERGING GROWTH FUND
KOBRICK GROWTH FUND
Supplement dated June 20, 2000 to the
Kobrick Funds Class A, B and C Shares Prospectus dated November 1, 1999
as revised February 1, 2000
The following pages replace pages 2, 4 and 6, respectively, of the
prospectus. The pages remain unchanged except for additional text which has been
bolded.
SP106-0600
<PAGE>
GOALS, STRATEGIES & RISKS
-------------------------
KOBRICK CAPITAL FUND
ADVISER: Kobrick Funds LLC (the "Adviser")
MANAGER: Frederick R. Kobrick
CATEGORY: All-Cap Equity
FUND FOCUS
-------------------------------
STABILITY | INCOME | GROWTH
HIGH | | X
--------------------------------
MOD. | |
--------------------------------
LOW X | X |
TICKER SYMBOL: CLASS A CLASS B CLASS C
--------------------------
KFCFX KCFBX pending
INVESTMENT GOAL
The Capital Fund seeks maximum capital appreciation by investing primarily in
equity securities of companies with small, medium and large capitalizations.
INVESTMENT STRATEGIES
Under normal market conditions, the Capital Fund will invest substantially all
of its assets in equity securities of companies with small, medium and large
capitalizations, including those that the Adviser believes are undervalued
special situations and emerging growth companies. This approach provides the
Adviser with flexibility to emphasize in the Fund companies with different
capitalizations as market conditions change. The Adviser considers emerging
growth companies to be those companies that are less mature and have the
potential to grow substantially faster than the economy. The Adviser's bottom-up
approach utilizes fundamental and qualitative analysis to select individual
companies, not sectors, with the greatest potential for growth. In selecting
investments for the Fund, the Adviser generally seeks companies in a wide range
of industries and considers a variety of factors, including any one or more of
the following:
* the strength of a company's management team
* relative financial condition
* entrepreneurial character
* expected growth in earnings
* competitive position and business strategy
* new or innovative products, services or processes
In making investment decisions, the Adviser employs the following four-part
investment approach:
o Screening: The Adviser analyzes thousands of companies in order to find a
select group that has the potential to meet its buy disciplines described
below. Many of the companies within this group are special situation
companies which, because of unique circumstances, such as an ability to
fill a particular niche, are attractive investments.
o Portfolio Construction: The Adviser applies buy disciplines which emphasize
strong management, compelling valuations and high earnings growth. At the
core of this approach is regular contact with a company's management team
to assess its ability to execute the company's strategy. The Adviser
considers potential risks in selecting securities to construct a
diversified portfolio that limits volatility.
o Portfolio Supervision: The Adviser closely monitors each holding in the
Fund's portfolio to determine whether it continues to possess the factors
identified when the original investment was made. This process includes
continuous review of absolute and relative valuations, evaluation of
management's execution of the company's strategy and assessment of the
company's prospects relative to the overall economic, political and
financial environment.
o Portfolio Realignment: The Adviser will generally sell a position when its
target price, which is continuously evaluated, is reached, when there is a
change in a company's management or strategy, or when a company fails to
execute its strategy.
Although it is anticipated that most of the Capital Fund's assets
will be invested in equity securities, the Fund may invest at any time up to 35%
of its total assets in other types of securities (including corporate bonds and
securities of the U.S. government). THE FUND MAY INVEST MORE THAN 35% OF ITS
TOTAL ASSETS IN CASH OR CERTAIN SHORT-TERM SECURITIES FOR TEMPORARY DEFENSIVE
PURPOSES. THE FUND WILL ONLY TAKE SUCH DEFENSIVE ACTION, WHICH IS INCONSISTENT
WITH ITS INVESTMENT GOAL, WHEN, IN THE OPINION OF THE ADVISER, SUCH A POSITION
IS MORE LIKELY TO PROVIDE PROTECTION AGAINST ADVERSE MARKET CONDITIONS THAN
ADHERENCE TO THE FUND'S OTHER INVESTMENT POLICIES. Because the Fund's investment
goal provides flexibility to emphasize companies having different
capitalizations as market conditions change, the Fund may engage in frequent
trading of securities. This may produce higher transaction costs and a higher
level of capital gains, which may lower your return. SINCE THE BEGINNING OF THE
FUND'S FISCAL YEAR ON OCTOBER 1, 1999, MORE FREQUENT TRADING OF SECURITIES
OCCURRED DUE TO SIGNIFICANT MARKET VOLATILITY AND OTHER FACTORS WHICH PRODUCED A
HIGHER-THAN-NORMAL PORTFOLIO TURNOVER RATE FOR THE FUND.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report (see back cover).
INVESTMENT RISKS
EQUITY SECURITIES: Because the Capital Fund invests primarily in equity
securities, its major risks are those commonly associated with investing in
stocks. This means that you may lose money on your investment due to
unpredictable drops in a stock's value or periods of below-average
performance in a given stock or in the stock market as a whole. Growth
stocks are generally more sensitive to market movements than other types of
stocks, primarily because their stock prices are based heavily on future
expectations. Small capitalization and emerging growth companies may be
subject to more abrupt price movements, limited markets and less liquidity
than larger, more established companies, which could adversely affect the
value of the portfolio. With special situation companies, the primary risk
is that they may not achieve their expected value because events do not
materialize as the Adviser anticipated. Because the Fund invests in, among
other things, undervalued special situations, emerging growth companies and
companies with small capitalizations, an investment in the Fund involves
greater than average risks. Accordingly, the value of the Fund's shares may
fluctuate more widely than the value of shares of a fund that invests in
larger, more established companies.
2
<PAGE>
GOALS, STRATEGIES & RISKS
-------------------------
KOBRICK EMERGING GROWTH FUND
ADVISER: Kobrick Funds LLC (the "Adviser")
MANAGER: Frederick R. Kobrick
CATEGORY: Small-Cap Equity
FUND FOCUS
-------------------------------
STABILITY | INCOME | GROWTH
HIGH | | X
--------------------------------
MOD. | |
--------------------------------
LOW X | X |
TICKER SYMBOL: CLASS A CLASS B CLASS C
---------------------------
KFGRX pending pending
INVESTMENT GOAL
The Emerging Growth Fund seeks to provide growth of capital by investing
primarily in equity securities of emerging growth companies, with an emphasis on
companies with small capitalizations.
INVESTMENT STRATEGIES
Under normal market conditions, the Emerging Growth Fund will invest
substantially all of its assets in equity securities of emerging growth
companies in any industry, with emphasis on companies with small
capitalizations. The Adviser considers emerging growth companies to be those
companies which are less mature and have the potential to grow substantially
faster than the economy. The small capitalization companies in which the Fund
invests are generally comparable to the size of companies included in the
Russell 2000 Index, which is a commonly used index of small stock performance.
The median market capitalization in this index as of September 30, 1999 was
approximately $421 million and the largest market capitalization in this index
as of such date was approximately $3 billion. Levels of capitalization and the
companies constituting the Russell 2000 Index could vary over time because of
market conditions and other factors relating to small capitalization companies
generally and investments in such companies. While a company's market
capitalization may be small at the time the Fund first invests in the company,
the Fund may continue to hold and acquire shares of the company after its market
capitalization increases. Small and emerging growth companies that are
identified as good candidates for the Fund can be found in a variety of
industries. In selecting investments for the Fund, the Adviser may consider a
variety of factors, including any one or more of the following:
* the strength of a company's management team
* relative financial condition
* competitive position and business strategy
* new or innovative products, services or processes
* expected growth in earnings
* cash flow
* overall potential as an enterprise
In making investment decisions, the Adviser employs the following four-part
investment approach:
o Screening: The Adviser analyzes thousands of companies in order to find a
select group that has the potential to meet its buy disciplines described
below. Many of the companies within this group are special situation
companies which, because of unique circumstances, such as an ability to
fill a particular niche, are attractive investments.
o Portfolio Construction: The Adviser applies buy disciplines which emphasize
strong management, compelling valuations and high earnings growth. At the
core of this approach is regular contact with a company's management team
to assess its ability to execute the company's strategy. The Adviser
considers potential risks in selecting securities to construct a
diversified portfolio that limits volatility.
o Portfolio Supervision: The Adviser closely monitors each holding in the
Fund's portfolio to determine whether it continues to possess the factors
identified when the original investment was made. This process includes
continuous review of absolute and relative valuations, evaluation of
management's execution of the company's strategy and assessment of the
company's prospects relative to the overall economic, political and
financial environment.
o Portfolio Realignment: The Adviser will generally sell a position when its
target price, which is continuously evaluated, is reached, when there is a
change in a company's management or strategy, or when a company fails to
execute its strategy.
Although it is anticipated that most of the Emerging Growth Fund's assets will
be invested in equity securities of emerging growth companies, the Fund may
invest at any time up to 35% of its total assets in other types of securities
(including corporate bonds and securities of the U.S. government) and in
securities issued by larger, more mature companies and undervalued special
situation companies. THE FUND MAY INVEST MORE THAN 35% OF ITS TOTAL ASSETS IN
CASH OR CERTAIN SHORT-TERM SECURITIES FOR TEMPORARY DEFENSIVE PURPOSES. THE FUND
WILL ONLY TAKE SUCH DEFENSIVE ACTION, WHICH IS INCONSISTENT WITH ITS INVESTMENT
GOAL, WHEN, IN THE OPINION OF THE ADVISER, SUCH A POSITION IS MORE LIKELY TO
PROVIDE PROTECTION AGAINST ADVERSE MARKET CONDITIONS THAN ADHERENCE TO THE
FUND'S OTHER INVESTMENT POLICIES. The Fund may engage in frequent trading of
securities, which may produce higher transaction costs and a higher level of
capital gains. This may lower your return. SINCE THE BEGINNING OF THE FUND'S
FISCAL YEAR ON OCTOBER 1, 1999, MORE FREQUENT TRADING OF SECURITIES OCCURRED DUE
TO SIGNIFICANT MARKET VOLATILITY AND OTHER FACTORS WHICH PRODUCED A
HIGHER-THAN-NORMAL PORTFOLIO TURNOVER RATE FOR THE FUND.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report (see back cover).
INVESTMENT RISKS
EQUITY SECURITIES: Because the Emerging Growth Fund invests primarily in equity
securities, its major risks are those commonly associated with investing in
stocks. This means that you may lose money on your investment due to
unpredictable drops in a stock's value or periods of below-average
performance in a given stock or in the stock market as a whole. Growth
stocks are generally more sensitive to market movements than other types of
stocks, primarily because their stock prices are based heavily on future
expectations. Small capitalization and emerging growth companies may be
subject to more abrupt price movements, limited markets and less liquidity
than larger, more established companies, which could adversely affect the
value of the portfolio. With special situation companies, the primary risk
is that they may not achieve their expected value because events do not
materialize as the Adviser anticipated. Because the Fund invests in, among
other things, undervalued special situations, emerging growth companies and
companies with small capitalizations, an investment in the Fund involves
greater than average risks. Accordingly, the value of the Fund's shares may
fluctuate more widely than the value of shares of a fund that invests in
larger, more established companies.
4
<PAGE>
GOALS, STRATEGIES & RISKS
-------------------------
KOBRICK GROWTH FUND
ADVISER: Kobrick Funds LLC (the "Adviser")
MANAGER: Michael E. Nance
CATEGORY: Large-Cap Equity
FUND FOCUS
-------------------------------
STABILITY | INCOME | GROWTH
HIGH | | X
--------------------------------
MOD. X | |
--------------------------------
LOW | X |
TICKER SYMBOL: CLASS A CLASS B CLASS C
---------------------------
KFEGX pending pending
INVESTMENT GOAL
The Growth Fund seeks long-term growth of capital by investing primarily in
equity securities of companies with large capitalizations that the Adviser
believes have better than average long-term growth potential.
INVESTMENT STRATEGIES
Under normal market conditions, the Growth Fund will be primarily invested in
equity securities of large capitalization companies that the Adviser expects
will have better than average long-term growth potential. The Adviser's
bottom-up approach utilizes fundamental and qualitative analysis to select
individual companies, not sectors, with the greatest potential for growth. The
Fund invests in a diversified portfolio of securities of larger, more
established companies in a broad range of industries. The Adviser seeks to
invest in companies which offer the greatest potential for profitable expansion
and sustained growth and considers a variety of factors, including any one or
more of the following:
* management that can execute business plans
* expected growth in earnings
* a sound business strategy
* compelling valuations
A company's valuations are based on a variety of measures including
price/earnings to growth rates, price to book value and price to sales.
Potential income is not a major factor in the selection of investments.
In making investment decisions, the Adviser employs the following four-part
investment approach:
o Screening: The Adviser analyzes thousands of companies in order to find a
select group that has the potential to meet its buy disciplines described
below.
o Portfolio Construction: The Adviser applies buy disciplines which emphasize
strong management, compelling valuations and high earnings growth. At the
core of this approach is regular contact with a company's management team
to assess its ability to execute the company's strategy. The Adviser
considers potential risks in selecting securities to construct a
diversified portfolio that limits volatility.
o Portfolio Supervision: The Adviser closely monitors each holding in the
Fund's portfolio to determine whether it continues to possess the factors
identified when the original investment was made. This process includes
continuous review of absolute and relative valuations, evaluation of
management's execution of the company's strategy and assessment of the
company's prospects relative to the overall economic, political and
financial environment.
o Portfolio Realignment: The Adviser will generally sell a position when its
target price, which is continuously evaluated, is reached, when there is a
change in a company's management or strategy, or when a company fails to
execute its strategy.
Although it is anticipated that most of the Growth Fund's assets will be
invested in equity securities of companies with large capitalizations, the Fund
may invest at any time up to 35% of its total assets in other types of
securities (including corporate bonds and securities of the U.S. government) and
in smaller capitalization and emerging growth companies. THE FUND MAY INVEST
MORE THAN 35% OF ITS TOTAL ASSETS IN CASH OR CERTAIN SHORT-TERM SECURITIES FOR
TEMPORARY DEFENSIVE PURPOSES. THE FUND WILL ONLY TAKE SUCH DEFENSIVE ACTION,
WHICH IS INCONSISTENT WITH ITS INVESTMENT GOAL, WHEN, IN THE OPINION OF THE
ADVISER, SUCH A POSITION IS MORE LIKELY TO PROVIDE PROTECTION AGAINST ADVERSE
MARKET CONDITIONS THAN ADHERENCE TO THE FUND'S OTHER INVESTMENT POLICIES. The
Fund may engage in frequent trading of securities, which may produce higher
transaction costs and a higher level of capital gains. This may lower your
return. SINCE THE BEGINNING OF THE FUND'S FISCAL YEAR ON OCTOBER 1, 1999, MORE
FREQUENT TRADING OF SECURITIES OCCURRED DUE TO SIGNIFICANT MARKET VOLATILITY AND
OTHER FACTORS WHICH PRODUCED A HIGHER-THAN-NORMAL PORTFOLIO TURNOVER RATE FOR
THE FUND.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report (see back cover).
INVESTMENT RISKS
EQUITY SECURITIES: Because the Growth Fund invests primarily in equity
securities, its major risks are those commonly associated with investing in
stocks. This means that you may lose money on your investment due to
sudden, unpredictable drops in a stock's value or periods of below-average
performance in a given stock or in the stock market as a whole. Growth
stocks are generally more sensitive to market movements than other types of
stocks, primarily because their stock prices are based heavily on future
expectations. Because of these and other risks, the Fund may underperform
certain other stock funds during periods when large company growth stocks
are generally out of favor.
6
<PAGE>
KOBRICK CAPITAL FUND
KOBRICK EMERGING GROWTH FUND
KOBRICK GROWTH FUND
Supplement dated June 20, 2000 to the
Kobrick Funds Class A and Y Shares Prospectus dated November 1, 1999
as revised February 1, 2000
The following pages replace pages 2, 4 and 6, respectively, of the
prospectus. The pages remain unchanged except for the text which has been
bolded.
SP107-0600
<PAGE>
GOALS, STRATEGIES & RISKS
-------------------------
KOBRICK CAPITAL FUND
ADVISER: Kobrick Funds LLC (the "Adviser")
MANAGER: Frederick R. Kobrick
FUND FOCUS
-------------------------------
STABILITY | INCOME | GROWTH
HIGH | | X
--------------------------------
MOD. | |
--------------------------------
LOW X | X |
TICKER SYMBOL: CLASS A CLASS Y
----------------
KFCFX KCFYX
INVESTMENT GOAL
The Capital Fund seeks maximum capital appreciation by investing primarily in
equity securities of companies with small, medium and large capitalizations.
INVESTMENT STRATEGIES
Under normal market conditions, the Capital Fund will invest substantially all
of its assets in equity securities of companies with small, medium and large
capitalizations, including those that the Adviser believes are undervalued
special situations and emerging growth companies. This approach provides the
Adviser with flexibility to emphasize in the Fund companies with different
capitalizations as market conditions change. The Adviser considers emerging
growth companies to be those companies that are less mature and have the
potential to grow substantially faster than the economy. The Adviser's bottom-up
approach utilizes fundamental and qualitative analysis to select individual
companies, not sectors, with the greatest potential for growth. In selecting
investments for the Fund, the Adviser generally seeks companies in a wide range
of industries and considers a variety of factors, including any one or more of
the following:
* the strength of a company's management team
* relative financial condition
* entrepreneurial character
* expected growth in earnings
* competitive position and business strategy
* new or innovative products, services or processes
In making investment decisions, the Adviser employs the following four-part
investment approach:
o Screening: The Adviser analyzes thousands of companies in order to find a
select group that HAS the potential to meet its buy disciplines described
below. Many of the companies within this group are special situation
companies which, because of unique circumstances, such as an ability to
fill a particular niche, are attractive investments.
o Portfolio Construction: The Adviser applies buy disciplines which emphasize
strong management, compelling valuations and high earnings growth. At the
core of this approach is regular contact with a company's management team
to assess its ability to execute the company's strategy. The Adviser
considers potential risks in selecting securities to construct a
diversified portfolio that limits volatility.
o Portfolio Supervision: The Adviser closely monitors each holding in the
Fund's portfolio to determine whether it continues to possess the factors
identified when the original investment was made. This process includes
continuous review of absolute and relative valuations, evaluation of
management's execution of the company's strategy and assessment of the
company's prospects relative to the overall economic, political and
financial environment.
o Portfolio Realignment: The Adviser will generally sell a position when its
target price, which is continuously evaluated, is reached, when there is a
change in a company's management or strategy, or when a company fails to
execute its strategy.
Although it is anticipated that most of the Capital Fund's assets will be
invested in equity securities, the Fund may invest at any time up to 35% of its
total assets in other types of securities (including corporate bonds and
securities of the U.S. government). THE FUND MAY INVEST MORE THAN 35% OF ITS
TOTAL ASSETS IN CASH OR CERTAIN SHORT-TERM SECURITIES FOR TEMPORARY DEFENSIVE
PURPOSES. THE FUND WILL ONLY TAKE SUCH DEFENSIVE ACTION, WHICH IS INCONSISTENT
WITH ITS INVESTMENT GOAL, WHEN, IN THE OPINION OF THE ADVISER, SUCH A POSITION
IS MORE LIKELY TO PROVIDE PROTECTION AGAINST ADVERSE MARKET CONDITIONS THAN
ADHERENCE TO THE FUND'S OTHER INVESTMENT POLICIES. Because the Fund's investment
goal provides flexibility to emphasize companies having different
capitalizations as market conditions change, the Fund may engage in frequent
trading of securities. This may produce higher transaction costs and a higher
level of capital gains, which may lower your return. SINCE THE BEGINNING OF THE
FUND'S FISCAL YEAR ON OCTOBER 1, 1999, MORE FREQUENT TRADING OF SECURITIES
OCCURRED DUE TO SIGNIFICANT MARKET VOLATILITY AND OTHER FACTORS WHICH PRODUCED A
HIGHER-THAN-NORMAL PORTFOLIO TURNOVER RATE FOR THE FUND.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report (see back cover).
INVESTMENT RISKS
EQUITY SECURITIES: Because the Capital Fund invests primarily in equity
securities, its major risks are those commonly associated with investing in
stocks. This means that you may lose money on your investment due to
unpredictable drops in a stock's value or periods of below-average
performance in a given stock or in the stock market as a whole. Growth
stocks are generally more sensitive to market movements than other types of
stocks, primarily because their stock prices are based heavily on future
expectations. Small capitalization and emerging growth companies may be
subject to more abrupt price movements, limited markets and less liquidity
than larger, more established companies, which could adversely affect the
value of the portfolio. With special situation companies, the primary risk
is that they may not achieve their expected value because events do not
materialize as the Adviser anticipated. Because the Fund invests in, among
other things, undervalued special situations, emerging growth companies and
companies with small capitalizations, an investment in the Fund involves
greater than average risks. Accordingly, the value of the Fund's shares may
fluctuate more widely than the value of shares of a fund that invests in
larger, more established companies.
2
<PAGE>
GOALS, STRATEGIES & RISKS
-------------------------
KOBRICK EMERGING GROWTH FUND
ADVISER: Kobrick Funds LLC (the "Adviser")
MANAGER: Frederick R. Kobrick
FUND FOCUS
-------------------------------
STABILITY | INCOME | GROWTH
HIGH | | X
--------------------------------
MOD. | |
--------------------------------
LOW X | X |
TICKER SYMBOL: CLASS A CLASS Y
-----------------
KFGRX pending
INVESTMENT GOAL
The Emerging Growth Fund seeks to provide growth of capital by investing
primarily in equity securities of emerging growth companies, with an emphasis on
companies with small capitalizations.
INVESTMENT STRATEGIES
Under normal market conditions, the Emerging Growth Fund will invest
substantially all of its assets in equity securities of emerging growth
companies in any industry, with emphasis on companies with small
capitalizations. The Adviser considers emerging growth companies to be those
companies which are less mature and have the potential to grow substantially
faster than the economy. The small capitalization companies in which the Fund
invests are generally comparable to the size of companies included in the
Russell 2000 Index, which is a commonly used index of small stock performance.
The median market capitalization in this index as of September 30, 1999 was
approximately $421 million and the largest market capitalization in this index
as of such date was approximately $3 billion. Levels of capitalization and the
companies constituting the Russell 2000 Index could vary over time because of
market conditions and other factors relating to small capitalization companies
generally and investments in such companies. While a company's market
capitalization may be small at the time the Fund first invests in the company,
the Fund may continue to hold and acquire shares of the company after its market
capitalization increases. Small and emerging growth companies that are
identified as good candidates for the Fund can be found in a variety of
industries. In selecting investments for the Fund, the Adviser may consider a
variety of factors, including any one or more of the following:
* the strength of a company's management team
* relative financial condition
* competitive position and business strategy
* new or innovative products, services or processes
* expected growth in earnings
* cash flow
* overall potential as an enterprise
In making investment decisions, the Adviser employs the following four-part
investment approach:
o Screening: The Adviser analyzes thousands of companies in order to find a
select group that HAS the potential to meet its buy disciplines described
below. Many of the companies within this group are special situation
companies which, because of unique circumstances, such as an ability to
fill a particular niche, are attractive investments.
o Portfolio Construction: The Adviser applies buy disciplines which emphasize
strong management, compelling valuations and high earnings growth. At the
core of this approach is regular contact with a company's management team
to assess its ability to execute the company's strategy. The Adviser
considers potential risks in selecting securities to construct a
diversified portfolio that limits volatility.
o Portfolio Supervision: The Adviser closely monitors each holding in the
Fund's portfolio to determine whether it continues to possess the factors
identified when the original investment was made. This process includes
continuous review of absolute and relative valuations, evaluation of
management's execution of the company's strategy and assessment of the
company's prospects relative to the overall economic, political and
financial environment.
o Portfolio Realignment: The Adviser will generally sell a position when its
target price, which is continuously evaluated, is reached, when there is a
change in a company's management or strategy, or when a company fails to
execute its strategy.
Although it is anticipated that most of the Emerging Growth Fund's assets will
be invested in equity securities of emerging growth companies, the Fund may
invest at any time up to 35% of its total assets in other types of securities
(including corporate bonds and securities of the U.S. government) and in
securities issued by larger, more mature companies and undervalued special
situation companies. THE FUND MAY INVEST MORE THAN 35% OF ITS TOTAL ASSETS IN
CASH OR CERTAIN SHORT-TERM SECURITIES FOR TEMPORARY DEFENSIVE PURPOSES. THE FUND
WILL ONLY TAKE SUCH DEFENSIVE ACTION, WHICH IS INCONSISTENT WITH ITS INVESTMENT
GOAL, WHEN, IN THE OPINION OF THE ADVISER, SUCH A POSITION IS MORE LIKELY TO
PROVIDE PROTECTION AGAINST ADVERSE MARKET CONDITIONS THAN ADHERENCE TO THE
FUND'S OTHER INVESTMENT POLICIES. The Fund may engage in frequent trading of
securities, which may produce higher transaction costs and a higher level of
capital gains. This may lower your return. SINCE THE BEGINNING OF THE FUND'S
FISCAL YEAR ON OCTOBER 1, 1999, MORE FREQUENT TRADING OF SECURITIES OCCURRED DUE
TO SIGNIFICANT MARKET VOLATILITY AND OTHER FACTORS WHICH PRODUCED A
HIGHER-THAN-NORMAL PORTFOLIO TURNOVER RATE FOR THE FUND.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report (see back cover).
INVESTMENT RISKS
EQUITY SECURITIES: Because the Emerging Growth Fund invests primarily in equity
securities, its major risks are those commonly associated with investing in
stocks. This means that you may lose money on your investment due to
unpredictable drops in a stock's value or periods of below-average
performance in a given stock or in the stock market as a whole. Growth
stocks are generally more sensitive to market movements than other types of
stocks, primarily because their stock prices are based heavily on future
expectations. Small capitalization and emerging growth companies may be
subject to more abrupt price movements, limited markets and less liquidity
than larger, more established companies, which could adversely affect the
value of the portfolio. With special situation companies, the primary risk
is that they may not achieve their expected value because events do not
materialize as the Adviser anticipated. Because the Fund invests in, among
other things, undervalued special situations, emerging growth companies and
companies with small capitalizations, an investment in the Fund involves
greater than average risks. Accordingly, the value of the Fund's shares may
fluctuate more widely than the value of shares of a fund that invests in
larger, more established companies.
4
<PAGE>
GOALS, STRATEGIES & RISKS
-------------------------
KOBRICK GROWTH FUND
ADVISER: Kobrick Funds LLC (the "Adviser")
MANAGER: Michael E. Nance
FUND FOCUS
-------------------------------
STABILITY | INCOME | GROWTH
HIGH | | X
--------------------------------
MOD. X | |
--------------------------------
LOW | X |
TICKER SYMBOL: CLASS A CLASS Y
-----------------
KFEGX pending
INVESTMENT GOAL
The Growth Fund seeks long-term growth of capital by investing primarily in
equity securities of companies with large capitalizations that the Adviser
believes have better than average long-term growth potential.
INVESTMENT STRATEGIES
Under normal market conditions, the Growth Fund will be primarily invested in
equity securities of large capitalization companies that the Adviser expects
will have better than average long-term growth potential. The Adviser's
bottom-up approach utilizes fundamental and qualitative analysis to select
individual companies, not sectors, with the greatest potential for growth. The
Fund invests in a diversified portfolio of securities of larger, more
established companies in a broad range of industries. The Adviser seeks to
invest in companies which offer the greatest potential for profitable expansion
and sustained growth and considers a variety of factors, including any one or
more of the following:
* management that can execute business plans
* expected growth in earnings
* a sound business strategy
* compelling valuations
A company's valuations are based on a variety of measures including
price/earnings to growth rates, price to book value and price to sales.
Potential income is not a major factor in the selection of investments.
In making investment decisions, the Adviser employs the following four-part
investment approach:
o Screening: The Adviser analyzes thousands of companies in order to find a
select group that HAS the potential to meet its buy disciplines described
below.
o Portfolio Construction: The Adviser applies buy disciplines which emphasize
strong management, compelling valuations and high earnings growth. At the
core of this approach is regular contact with a company's management team
to assess its ability to execute the company's strategy. The Adviser
considers potential risks in selecting securities to construct a
diversified portfolio that limits volatility.
o Portfolio Supervision: The Adviser closely monitors each holding in the
Fund's portfolio to determine whether it continues to possess the factors
identified when the original investment was made. This process includes
continuous review of absolute and relative valuations, evaluation of
management's execution of the company's strategy and assessment of the
company's prospects relative to the overall economic, political and
financial environment.
o Portfolio Realignment: The Adviser will generally sell a position when its
target price, which is continuously evaluated, is reached, when there is a
change in a company's management or strategy, or when a company fails to
execute its strategy.
Although it is anticipated that most of the Growth Fund's assets will be
invested in equity securities of companies with large capitalizations, the Fund
may invest at any time up to 35% of its total assets in other types of
securities (including corporate bonds and securities of the U.S. government) and
in smaller capitalization and emerging growth companies. THE FUND MAY INVEST
MORE THAN 35% OF ITS TOTAL ASSETS IN CASH OR CERTAIN SHORT-TERM SECURITIES FOR
TEMPORARY DEFENSIVE PURPOSES. THE FUND WILL ONLY TAKE SUCH DEFENSIVE ACTION,
WHICH IS INCONSISTENT WITH ITS INVESTMENT GOAL, WHEN, IN THE OPINION OF THE
ADVISER, SUCH A POSITION IS MORE LIKELY TO PROVIDE PROTECTION AGAINST ADVERSE
MARKET CONDITIONS THAN ADHERENCE TO THE FUND'S OTHER INVESTMENT POLICIES. The
Fund may engage in frequent trading of securities, which may produce higher
transaction costs and a higher level of capital gains. This may lower your
return. SINCE THE BEGINNING OF THE FUND'S FISCAL YEAR ON OCTOBER 1, 1999, MORE
FREQUENT TRADING OF SECURITIES OCCURRED DUE TO SIGNIFICANT MARKET VOLATILITY AND
OTHER FACTORS WHICH PRODUCED A HIGHER-THAN-NORMAL PORTFOLIO TURNOVER RATE FOR
THE FUND.
A "snapshot" of the Fund's investments may be found in the current
annual or semiannual report (see back cover).
INVESTMENT RISKS
EQUITY SECURITIES: Because the Growth Fund invests primarily in equity
securities, its major risks are those commonly associated with investing in
stocks. This means that you may lose money on your investment due to
sudden, unpredictable drops in a stock's value or periods of below-average
performance in a given stock or in the stock market as a whole. Growth
stocks are generally more sensitive to market movements than other types of
stocks, primarily because their stock prices are based heavily on future
expectations. Because of these and other risks, the Fund may underperform
certain other stock funds during periods when large company growth stocks
are generally out of favor.
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