FOUNDERS FUNDS, INC.
Supplement to Prospectus dated August 12, 1996
(as previously supplemented through September 20, 1996)
Founders Special Fund
The section of the Funds' prospectus entitled "Investment Objectives of the
Funds" is hereby amended on page 21 by replacing the second paragraph concerning
Special Fund with the following:
To achieve its objective, the Fund normally will invest its assets in the
common stocks of three categories of companies: small- to medium-sized
companies, large companies, and foreign companies. Founders may vary the
amount of the Fund's assets invested in each category from time to time
depending on its evaluation of market, economic, and monetary conditions.
However, no more than 30% of the Fund's total assets will be invested in
foreign securities, with no more than 25% of its total assets invested in
any one foreign country. For a further explanation of this Fund's
investment policies, see the sections entitled "Investment Policies
Involving Special Risks" and "Other Investment Policies."
Founders Balanced Fund
The section of the Funds' prospectus entitled "Investment Objectives of the
Funds" is hereby amended on page 23 by replacing the first two sentences of the
second paragraph concerning Balanced Fund with the following:
To achieve its objective, the Fund invests in a balanced portfolio of
common stocks, U.S. and foreign government obligations and a variety of
corporate fixed-income securities. For the equity portion of its portfolio,
the Fund emphasizes investments in common stocks with the potential for
capital appreciation. These stocks generally pay regular dividends,
although the Fund also may invest in non-dividend-paying companies if, in
Founders' opinion, they offer better prospects for capital appreciation.
The section of the Funds' prospectus entitled "Investment Objectives of the
Funds" is hereby amended on page 24 by replacing the fifth through seventh
sentences of the third paragraph concerning Balanced Fund with the following:
The Fund may also invest in convertible corporate obligations and preferred
stocks, and may invest up to 30% of its total assets in foreign securities.
The Fund will not invest more than 25% of its total assets in the
securities of any one foreign country. Normally, the Fund will invest a
significant percentage (up to 75%) of its total assets in common stocks,
convertible corporate obligations, and preferred stocks.
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Portfolio Management
The section of the Funds' prospectus entitled "Investment Management of the
Funds - Portfolio Management" is hereby amended on page 28 by replacing the
paragraph concerning Douglas A. Loeffler with the following:
Douglas A. Loeffler, Portfolio Manager
Mr. Loeffler is a chartered financial analyst who has been co-lead
portfolio manager for Founders International Equity and Special Funds
since 1997. Mr. Loeffler joined Founders in 1995 as a senior international
equities analyst and previously served as assistant portfolio manager for
Founders International Equity Fund. Prior to joining Founders, he served
for seven years with Scudder, Stevens & Clark as an international equities
analyst and as a quantitative analyst. A graduate of Washington State
University, Mr. Loeffler received an MBA in finance from the University of
Chicago.
The section of the Funds' prospectus entitled "Investment Management of the
Funds - Portfolio Management" is hereby amended to add the following two new
paragraphs on page 28 after the paragraph concerning Douglas A. Loeffler:
Robert T. Ammann, Portfolio Manager
Mr. Ammann is a chartered financial analyst who has been co-lead portfolio
manager for Founders Special Fund since 1997. Mr. Ammann joined Founders in
1993 as a research analyst, and became a senior research analyst in 1996.
Prior to joining Founders, he was a financial statistician for Standard &
Poor's CompuStat Services, Inc. A graduate of Colorado State University,
Mr. Ammann holds a bachelors degree in finance.
John B. Jares, Portfolio Manager
Mr. Jares is a chartered financial analyst who has been co-lead portfolio
manager for Founders Special Fund since 1997. Mr. Jares joined Founders in
1994 as a research analyst. Prior to joining Founders, he worked with
Lipper Analytical Services, Inc., a provider of mutual fund information. A
graduate of Colorado State University, Mr. Jares received a masters degree
in finance from the University of Colorado at Denver.
The section of the Funds' prospectus entitled "Investment Management of the
Funds - Portfolio Management" is hereby amended on page 27 to indicate that
Michael K. Haines, Michael W. Gerding and Edward F. Keely no longer are serving
as co-lead portfolio managers for Founders Special Fund, and that, since 1997,
Michael W. Gerding has served as co-lead portfolio manager for Founders
International Equity Fund.
The date of this Supplement is January 6, 1997.
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FOUNDERS FUNDS, INC.
Supplement to Statement of Additional Information
dated August 12, 1996
The section of the Funds' Statement of Additional Information entitled
"Directors and Officers" is hereby amended on page 34 by adding the following
additional information to that section:
TRYGVE E. MYHREN
355 Clayton Street
Denver, CO 80206
Director
President, Myhren Media, Inc., a firm that invests in and advises
media and communications companies. Director, The Providence Journal
Company, Providence, Rhode Island; Director, Advanced Marketing
Services, LaJolla, California; Director, Peapod, Ltd., Evanston,
Illinois; Director, CableLabs, Boulder, Colorado; Director, J.D.
Edwards, Denver, Colorado, and general partner, Saguaro Cable
Investors, L.P. Formerly, President of The Providence Journal
Company, a diversified media and communications company, Providence,
Rhode Island, from 1990 to 1996, Chairman and Chief Executive
Officer of American Television and Communications Corporation, a
cable television company, Denver, Colorado, from 1981 to 1988, and
Chairman, National Cable Television Association, from 1986 to 1987.
Mr. Myhren also serves on the boards of the Rhode Island Hospital,
Providence, Rhode Island, and Lifespan Corp., a health services
consortium in Southeastern New England. Born:
January 3, 1937.
ROBERTO GALINDO, JR.
Assistant Treasurer
Assistant Vice President of Founders. Born: November 11, 1960.
The first paragraph of the section of the Funds' Statement of Additional
Information entitled "Additional Information - Capital Stock" is hereby amended
to read as follows:
The Company has 2,000,000,000 shares of capital stock authorized, with a
par value per share of $0.01. Of these shares, 100,000,000 shares have been
allocated to Discovery Fund, 100,000,000 to Frontier Fund, 100,000,000 to
Passport Fund, 180,000,000 to Special Fund, 100,000,000 to International
Equity Fund, 100,000,000 to Worldwide Growth Fund, 200,000,000 to Growth
Fund, 200,000,000 to Blue Chip Fund, 100,000,000 to Balanced Fund,
20,000,000 to Government Securities Fund, and 800,000,000 to Money Market
Fund. The Board of Directors is authorized to create additional series or
classes of shares, each with its own investment objectives and policies.
The date of this Supplement is January 6, 1997.
