FOUNDERS FUNDS INC, 497, 1999-11-12

FOUNDERS FUNDS INC
497, 1999-11-12

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Founders Funds, Inc.

PROSPECTUS

MAY 1, 1999
AS SUPPLEMENTED THROUGH SEPTEMBER 20, 1999

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AGGRESSIVE GROWTH FUNDS
Founders Passport Fund
Founders Discovery Fund
Founders Mid-Cap Growth Fund

GROWTH FUNDS
Founders International Equity Fund
Founders Worldwide Growth Fund
Founders Growth Fund

GROWTH-AND-INCOME FUNDS
Founders Growth and Income Fund
Founders Balanced Fund

FIXED-INCOME FUND
Founders Government Securities Fund

MONEY MARKET FUND
Founders Money Market Fund
----------------------------------------------

As with other mutual funds, the Securities and Exchange Commission has not
approved or disapproved of these Funds' shares or determined whether the
information in this Prospectus is accurate or complete. Anyone who tells you
otherwise is committing a crime.

FOUNDERS FUNDS (LOGO)
<PAGE>
TABLE OF CONTENTS
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A SUMMARY OF THE FOUNDERS FUNDS.... 1

FEES AND EXPENSES OF THE FUNDS..... 23

MORE INFORMATION ABOUT INVESTMENT
OBJECTIVES, STRATEGIES, AND
RISKS............................ 25

HOW THE FUNDS ARE MANAGED.......... 32

HOW TO BUY AND SELL SHARES......... 35

CONDUCTING BUSINESS WITH
FOUNDERS......................... 39

DIVIDENDS AND DISTRIBUTIONS........ 49

TAXES.............................. 50

DISTRIBUTION (12B-1) PLANS......... 51

SHAREHOLDER AND TRANSFER AGENCY
SERVICES......................... 52

BROKERAGE ALLOCATION............... 52

FINANCIAL HIGHLIGHTS............... 53

The Founders Funds' Board of Directors has approved a multiple class
distribution structure which authorizes the offering of multiple classes of
shares for the Founders equity funds. The equity funds are Balanced, Discovery,
Growth, Growth and Income, International Equity, Mid-Cap Growth, Passport, and
Worldwide Growth Funds.

The multiple class structure will become effective on or about December 31,
1999 (the "Effective Date"). Existing Fund shares (including shares of the two
non-equity funds, Government Securities and Money Market Funds) will be
designated as Class F shares as of the Effective Date. Holders of an existing
account on the day prior to the Effective Date will remain eligible to purchase
Class F shares of any existing or future Founders Fund as long as the
shareholder continuously holds Class F shares of a Fund. As of the Effective
Date, Class F shares will continue to be sold without any sales load and to have
the same privileges as are currently provided. Class F shares generally will not
be open to new investors as of the Effective Date.

The Funds' names will also be changed from "Founders" to "Dreyfus
Founders" on the Effective Date, and the name of the registered investment
company of which the Funds are a series will be changed to "Dreyfus Founders
Funds, Inc."

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A SUMMARY OF THE FOUNDERS FUNDS
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WELCOME

Founders Asset Management LLC ("Founders" ) manages the 10 no-load Founders
Funds. For easier reading, Founders will be referred to as "we," "us," or
"our" throughout this Prospectus.

AN OVERVIEW OF THE FUNDS

We manage the Funds using a "growth style" of investing. We use a bottom-up
approach to build equity portfolios, searching for companies whose fundamental
strengths give them the potential to provide superior earnings growth over time.
When a company's fundamentals are strong, we believe earnings growth will
follow. Using this disciplined approach, we look for companies having some or
all of the following characteristics:

o growth that is faster than a company's peers

o growth that is faster than the market as a whole and sustainable over the
long term

o strong management

o leading market positions and growing brand identities

o financial, marketing, and operating strength

We go beyond Wall Street analysis and perform our own intense in-house
research to determine whether companies meet our growth criteria. We often meet
company management teams and other key staff face-to-face, talk to suppliers,
customers and competitors, and tour corporate facilities and manufacturing
plants to get a complete picture of the company before we invest.

FOUNDERS' AGGRESSIVE GROWTH FUNDS

The aggressive growth funds generally invest in faster-growing and more volatile
stocks. They may be suitable for your investment plan if you have a long time
horizon and are comfortable with short-term volatility.

o Founders Passport Fund
o Founders Discovery Fund
o Founders Mid-Cap Growth Fund

FOUNDERS' GROWTH FUNDS

Investors may use growth funds to form the core of their long-term investment
plan because they may be less volatile over time than aggressive growth funds,
while still maintaining the potential for growth. Growth funds may be suitable
for your investment plan if you have a long time horizon.

o Founders International Equity Fund
o Founders Worldwide Growth Fund
o Founders Growth Fund

FOUNDERS' GROWTH-AND-INCOME FUNDS

These funds invest in growth sectors of the market, in companies that tend to be
larger and more established, and that may pay dividends. For these reasons,
growth-and-income funds present less

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risk than aggressive growth or pure growth funds.

o Founders Growth and Income Fund
o Founders Balanced Fund

FOUNDERS' INCOME FUNDS

These funds are the lowest-risk funds offered by Founders. They may be suitable
for you if you have a short-term investment horizon, desire more safety and
liquidity than may be available with equity funds, seek a modest level of
income, or consider yourself a "saver" rather than an investor.

o Founders Government
Securities Fund
o Founders Money Market Fund

FUND BY FUND SUMMARIES

The following descriptions provide an overview of each Fund's investment
objective and principal investment strategies, list the main risks of investing
in the Funds, and show historical investment performance. More detailed
information about the Funds' investment strategies and associated risks begins
on page 25. Please keep in mind that no Fund can guarantee that it will meet its
investment objective and that, as with any investment, you can lose money by
investing in the Funds.

Below each Fund's description are:

o a bar chart that shows how the investment returns of that Fund have varied
in the past 10 years, or in the years since the Fund began if it is less
than 10 years old

o the highest and lowest quarterly Fund return for the past 10 years or
since the Fund's inception if it is less than 10 years old, to indicate
the Fund's historical short-term volatility

o a table that shows how that Fund's average annual returns compare to
returns of a broad-based index

The comparative indexes included with each Fund's performance are included
to provide a basis for comparing a Fund's performance against a specific
securities market index and/or its peer group. Each index shown accounts for
both change in security price and reinvestment of dividends. The Lipper Balanced
Fund Index reflects the expenses of managing the mutual funds included in the
index. The other indexes are unmanaged groups of securities that do not reflect
the costs of managing a mutual fund. An investor may not invest directly in
these indexes.

An investment in the Funds is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

A Fund's Morningstar category is subject to change.

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FOUNDERS PASSPORT FUND
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TICKER SYMBOL: FPSSX MORNINGSTAR CATEGORY: Foreign Stock

INVESTMENT OBJECTIVE
Capital appreciation

PRINCIPAL INVESTMENT STRATEGY
Founders Passport Fund seeks aggressive growth through investments in equity
securities of companies outside the United States with market capitalizations or
annual revenues of $1 billion or less. Passport Fund mainly invests in
securities issued by foreign companies based in both developed and emerging
economies overseas. At least 65% of the Fund's total assets normally will be
invested in foreign securities from a minimum of three countries. The Fund may
invest in larger foreign companies or in U.S.-based companies if, in our
opinion, they represent better prospects for capital appreciation.

MAIN RISKS OF INVESTING
The primary risks of investing in this Fund are small company risk, foreign
investment risk, including foreign currency exchange rate fluctuations, and
emerging markets risk.
o SMALL COMPANY RISK. While small companies may offer greater opportunity for
capital appreciation than larger and more established companies, they also
involve substantially greater risks of loss and price fluctuations. Small
companies may be in the early stages of development; have limited product
lines, markets or

- -------------------------------------------------------------------------------
The following information provides some indication of the risks of investing in
the Fund by showing changes in the Fund's performance from year to year and by
showing how the Fund's average annual returns compare with those of a broad
measure of market performance. Past performance is no guarantee of future
results.
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financial resources; and may lack management depth. These companies may be
more impacted by intense competition from larger companies, and the
trading markets for their securities may be less liquid and more volatile.
This means that the Fund could have greater difficulty selling a security
of a small-cap issuer at an acceptable price, especially in periods of
market volatility. As a result, investments in small companies involve
greater risk than large and more established companies. Also, it may take
a substantial period of time before the Fund realizes a gain on an
investment in a small-cap company, if it realizes any gain at all.
o FOREIGN INVESTMENT RISK. Investments in foreign securities involve different
risks than U.S. investments, including fluctuations in currency exchange
rates, potential unstable political and economic structures, reduced
availability of public information, and lack of uniform financial reporting
and regulatory practices similar to those that apply to U.S. issuers.
o CURRENCY EXCHANGE RISK. Since Passport Fund's assets are invested primarily
in foreign securities, and since substantially all of the Fund's revenues
are received in foreign currencies, the Fund's net asset value will be
affected by changes in currency exchange rates to a greater extent than most
of the other Funds. The Fund will pay dividends in dollars and will incur
currency conversion costs.
o EMERGING MARKETS RISK. A country that is in the initial stages of its
industrial cycle is considered to be an emerging markets country. Such
countries are subject to more economic, political, and business risk than
major industrialized nations, and the securities issued by companies located
in such a country may be more volatile, less liquid and more uncertain.

===============================================================================
THE MORGAN STANLEY CAPITAL INTERNATIONAL WORLD EX. U.S. INDEX IS AN AVERAGE OF
THE PERFORMANCE OF SELECTED SECURITIES LISTED ON THE STOCK EXCHANGES OF EUROPE,
CANADA, AUSTRALIA, NEW ZEALAND AND THE FAR EAST. THE LIFE OF FUND PERFORMANCE
DATA FOR THE INDEX IS FROM NOVEMBER 30, 1993 THROUGH DECEMBER 31, 1998.

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FOUNDERS DISCOVERY FUND
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TICKER SYMBOL: FDISX MORNINGSTAR CATEGORY: Small Growth

INVESTMENT OBJECTIVE
Capital appreciation

PRINCIPAL INVESTMENT STRATEGY
Founders Discovery Fund seeks to apply Founders' growth style by targeting small
and relatively unknown companies with high growth potential. Discovery Fund will
normally invest at least 65% of its total assets in common stocks of small,
rapidly growing U.S.-based companies with market capitalizations or annual
revenues between $10 million and $1.5 billion. Typically, these companies are
not listed on a national securities exchange, but trade on the over-the-counter
market. The Fund also may invest in larger companies if, in our opinion, they
represent better prospects for capital appreciation. Although the Fund normally
will invest in common stocks of U.S.-based companies, it may invest up to 30% of
its total assets in foreign securities.

MAIN RISKS OF INVESTING
The primary risks of investing in this Fund are the risks associated with
investing in small companies.

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o SMALL COMPANY RISK. While small companies may offer greater opportunity for
capital appreciation than larger and more established companies, they also
involve substantially greater risks of loss and price fluctuations. Small
companies may be in the early stages of development; have limited product
lines, markets or financial resources; and may lack management depth. These
companies may be more impacted by intense competition from larger companies,
and the trading markets for their securities may be less liquid and more
volatile. This means that the Fund could have greater difficulty selling a
security of a small-cap issuer at an acceptable price, especially in periods
of market volatility. As a result, investments in small companies involve
greater risk than large and more established companies. Also, it may take a
substantial period of time before the Fund realizes a gain on an investment
in a small-cap company, if it realizes any gain at all.

DEFINITION OF TERMS

MARKET CAPITALIZATION is the value of a corporation calculated by multiplying
the number of its outstanding shares of common stock by the current market price
of a share.
Founders considers SMALL-CAP companies to be those companies with market
capitalizations of $1.5 billion or less.

===============================================================================

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THE RUSSELL 2000 INDEX IS A WIDELY RECOGNIZED UNMANAGED SMALL-CAP INDEX
COMPRISING COMMON STOCKS OF THE 2,000 U.S. PUBLIC COMPANIES NEXT IN SIZE AFTER
THE LARGEST 1,000 PUBLICLY TRADED U.S. COMPANIES.

6
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FOUNDERS MID-CAP GROWTH FUND
-------------------------------------------------------------------
TICKER SYMBOL: FRSPX MORNINGSTAR CATEGORY: Mid-Cap
Growth

INVESTMENT OBJECTIVE
Capital appreciation

PRINCIPAL INVESTMENT STRATEGY
Founders Mid-Cap Growth Fund emphasizes investments in equity securities of
medium-sized companies that we believe have favorable growth prospects. Mid-Cap
Growth Fund will normally invest at least 65% of its total assets in equity
securities of companies having a market capitalization within the capitalization
range of companies comprising the Standard & Poor's MidCap 400 Index. The Fund
also may invest in larger or smaller companies if, in our opinion, they
represent better prospects for capital appreciation. The Fund may invest up to
30% of its total assets in foreign securities, with no more than 25% of its
total assets invested in the securities of any one foreign country.
The Fund may use derivative instruments to seek to reduce the risks of
market fluctuations that may affect the value of the securities the Fund holds
or may buy in the future. The Fund may invest in options, futures contracts, and
forward contracts. If these practices are used by the Fund, they would be used
for hedging purposes, rather than for speculative purposes.

MAIN RISKS OF INVESTING
The primary risks of investing in this Fund are the risks of investing in
medium-

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<PAGE>
sized companies, and to a lesser extent small-sized companies, and the risks
associated with using hedging techniques and derivatives.
o SMALL- AND MEDIUM-SIZED COMPANY RISK. While small- and medium-sized
companies may offer greater opportunity for capital appreciation than larger
and more established companies, they also involve greater risks of loss and
price fluctuations. Small companies, and to an extent medium-sized
companies, may be in the early stages of development; have limited product
lines, markets or financial resources; and may lack management depth. These
companies may be more impacted by intense competition from larger companies,
and the trading markets for their securities may be less liquid and more
volatile. This means that the Fund could have greater difficulty selling a
security of a small- or medium-sized issuer at an acceptable price,
especially in periods of market volatility. As a result, investments in
small- and medium-sized companies involve greater risk than large and more
established companies. Also, it may take a substantial period of time before
the Fund realizes a gain on an investment in a small- or medium-sized
company, if it realizes any gain at all.
o HEDGING AND DERIVATIVES. The Fund may use derivatives to try to hedge
investment risk. The Fund has policies and limits on the use of derivatives.
However, using derivatives can cause the Fund to lose money on its
investments and/or increase the volatility of its share price. In addition,
the successful use of derivatives draws upon skills and experience that are
different from those needed to select the other securities in which the Fund
invests. Should interest rates or the prices of securities or financial
indexes move in an unexpected manner, the Fund may not achieve the desired
benefits of these instruments, or may realize losses and be in a worse
position than if the instruments had not been used.

DEFINITION OF TERMS
We generally consider MEDIUM-SIZED COMPANIES to be companies that have market
capitalizations between $1.5 billion and $8 billion. This range may, however,
fluctuate depending on changes in the value of the stock market as a whole.

FOUNDERS MID-CAP GROWTH FUND WAS FORMERLY KNOWN AS FOUNDERS SPECIAL FUND.
===============================================================================

- -------------------------------------------------------------------------------
THE STANDARD & POOR'S (S&P) MIDCAP 400 INDEX IS AN UNMANAGED GROUP OF 400
DOMESTIC STOCKS CHOSEN FOR THEIR MARKET SIZE, LIQUIDITY, AND INDUSTRY GROUP
REPRESENTATIONS.

8
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FOUNDERS INTERNATIONAL EQUITY FUND
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TICKER SYMBOL: FOIEX MORNINGSTAR CATEGORY: Foreign Stock

INVESTMENT OBJECTIVE
Long-term growth of capital

PRINCIPAL INVESTMENT STRATEGY
Founders International Equity Fund normally invests at least 65% of its total
assets in foreign equity securities from a minimum of three countries outside
the United States, including both established and emerging economies. The Fund
will not invest more than 50% of its assets in the securities of any one foreign
country. Although the Fund intends to invest substantially all of its assets in
issuers located outside the United States, it may at times invest in U.S.-based
companies.

MAIN RISKS OF INVESTING
The primary risks of investing in this Fund are foreign investment risks,
including foreign currency exchange rate fluctuations, and emerging markets
risk.

9
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o FOREIGN INVESTMENT RISK. Investments in foreign securities involve different
risks than U.S. investments, including fluctuations in currency exchange
rates, potential unstable political and economic structures, reduced
availability of public information, and lack of uniform financial reporting
and regulatory practices similar to those that apply to U.S. issuers.
o CURRENCY EXCHANGE RISK.
Since International Equity Fund's assets are invested primarily in foreign
securities, and since substantially all of the Fund's revenues are received
in foreign currencies, the Fund's net asset value will be affected by
changes in currency exchange rates to a greater extent than most of the
other Funds. The Fund will pay dividends in dollars and will incur currency
conversion costs.
o EMERGING MARKETS RISK. A country that is in the initial stages of its
industrial cycle is considered to be an emerging markets country. Such
countries are subject to more economic, political, and business risk than
major industrialized nations, and the securities issued by companies located
there may be more volatile, less liquid and more uncertain.

DEFINITION OF TERMS

FOREIGN SECURITIES refers to securities of issuers, wherever organized, that
have their principal business activities outside of the United States. We
consider whether more than 50% of the issuer's assets are located, or more than
50% of the issuer's gross income is earned, outside of the United States, or
whether the issuer's principal stock exchange listing is outside of the United
States.

===============================================================================

- -------------------------------------------------------------------------------
THE MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX EX. U.S. IS AN AVERAGE OF
THE PERFORMANCE OF SELECTED SECURITIES LISTED ON THE STOCK EXCHANGES OF EUROPE,
CANADA, AUSTRALIA, NEW ZEALAND AND THE FAR EAST. THE LIFE OF FUND PERFORMANCE
DATA FOR THE INDEX IS FROM DECEMBER 31, 1995 THROUGH DECEMBER 31, 1998.

10
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FOUNDERS WORLDWIDE GROWTH FUND
-------------------------------------------------------------------
TICKER SYMBOL: FWWGX MORNINGSTAR CATEGORY: World Stock

INVESTMENT OBJECTIVE
Long-term growth of capital

PRINCIPAL INVESTMENT STRATEGY
Founders Worldwide Growth Fund, a global fund, normally invests at least 65% of
its total assets in equity securities of growth companies in a variety of
markets throughout the world. The Fund may purchase securities in any foreign
country, as well as in the United States, emphasizing common stocks of both
emerging and established growth companies that generally have proven performance
records and strong market positions. The Fund's portfolio will always invest at
least 65% of its total assets in three or more countries. The Fund will not
invest more than 50% of its total assets in the securities of any one foreign
country.

MAIN RISKS OF INVESTING
The primary risks of investing in this Fund are foreign investment risks,
including foreign currency exchange rate fluctuations, and emerging markets
risk.

11
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o FOREIGN INVESTMENT RISK. Investments in foreign securities involve different
risks than U.S. investments, including fluctuations in currency exchange
rates, potential unstable political and economic structures, reduced
availability of public information, and lack of uniform financial reporting
and regulatory practices similar to those that apply to U.S. issuers.
o CURRENCY EXCHANGE RISK. Since Worldwide Growth Fund's assets are invested
primarily in foreign securities, and since substantially all of the Fund's
revenues are received in foreign currencies, the Fund's net asset value
will be affected by changes in currency exchange rates to a greater extent
than most of the other Funds. The Fund will pay dividends in dollars and
will incur currency conversion costs.
o EMERGING MARKETS RISK. A country that is in the initial stages of its
industrial cycle is considered to be an emerging markets country. Such
countries are subject to more economic, political, and business risk than
major industrialized nations, and the securities issued by companies located
there may be more volatile, less liquid and more uncertain.

DEFINITION OF TERMS

A GLOBAL FUND is a type of mutual fund that may invest in securities traded
anywhere in the world, including the United States.

===============================================================================

- -------------------------------------------------------------------------------
THE MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX IS AN AVERAGE OF THE
PERFORMANCE OF SELECTED SECURITIES LISTED ON THE STOCK EXCHANGES OF THE UNITED
STATES, EUROPE, CANADA, AUSTRALIA, NEW ZEALAND AND THE FAR EAST.

12
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FOUNDERS GROWTH FUND
-------------------------------------------------------------------
TICKER SYMBOL: FRGRX MORNINGSTAR CATEGORY: Large Growth

INVESTMENT OBJECTIVE
Long-term growth of capital

PRINCIPAL INVESTMENT STRATEGY
Founders Growth Fund normally invests at least 65% of its total assets in common
stocks of well-established, high-quality growth companies. These companies tend
to have strong performance records, solid market positions, reasonable financial
strength, and continuous operating records of three years or more. The Fund may
also invest up to 30% of its total assets in foreign securities, with no more
than 25% invested in any one foreign country.

MAIN RISKS OF INVESTING
The primary risks of investing in this Fund are stock market risk and investment
style risk.

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o STOCK MARKET RISK. The value of the stocks and other securities owned by
Growth Fund will fluctuate depending on the performance of the companies
that issued them, general market and economic conditions, and investor
confidence. In addition, if our assessment of a company's potential to
increase earnings faster than the rest of the market is not correct, the
securities in the portfolio may not increase in value, and could even
decrease in value.
o INVESTMENT STYLE RISK. Market performance tends to be cyclical, and during
various cycles, certain investment styles may fall in and out of favor. If
the market is not favoring the Fund's growth style of investing, the Fund's
gains may not be as big as, or its losses may be bigger than, other equity
funds using different investment styles.

DEFINITION OF TERMS

We generally consider LARGE COMPANIES to be companies that have market
capitalizations of more than $8 billion. This range may, however, fluctuate
depending on changes in the value of the stock market as a whole.

===============================================================================

- -------------------------------------------------------------------------------
THE STANDARD & POOR'S (S&P) 500 INDEX IS A WIDELY RECOGNIZED UNMANAGED INDEX OF
500 COMMON STOCKS.

14
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FOUNDERS GROWTH AND INCOME FUND
-------------------------------------------------------------------
TICKER SYMBOL: FRMUX MORNINGSTAR CATEGORY: Large Blend

INVESTMENT OBJECTIVE
Long-term growth of capital and income

PRINCIPAL INVESTMENT STRATEGY
Founders Growth and Income Fund, a large-company fund, primarily invests in
common stocks of large, well-established, stable and mature companies of great
financial strength, commonly known as "blue chip" companies. These companies
generally have long records of profitability and dividend payments and a
reputation for high-quality management, products, and services. The Fund
normally invests at least 65% of its total assets in "blue chip" stocks that:
o are included in a widely recognized index of stock market performance, such
as the Dow Jones Industrial Average or the Standard & Poor's 500 Index
o generally pay regular dividends
o have a market capitalization of at least $1 billion
The Fund may invest in non-dividend-paying companies if, in our opinion,
they offer better prospects for capital appreciation. The Fund may also invest
up to 30% of its total assets in foreign securities.

MAIN RISKS OF INVESTING
The primary risks of investing in this Fund are stock market risk and investment
style risk.

- -------------------------------------------------------------------------------

The following information provides some indication of the risks of investing in
the Fund by showing changes in the Fund's performance from year to year and by
showing how the Fund's average annual returns compare with those of a broad
measure of market performance. Past performance is no guarantee of future
results.
- -------------------------------------------------------------------------------

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o STOCK MARKET RISK. The value of the stocks and other securities owned by
Growth and Income Fund will fluctuate depending on the performance of the
companies that issued them, general market and economic conditions, and
investor confidence. In addition, if our assessment of a company's potential
to increase earnings faster than the rest of the market is not correct, the
securities in the portfolio may not increase in value, and could even
decrease in value.
o INVESTMENT STYLE RISK. Market performance tends to be cyclical, and during
various cycles, certain investment styles may fall in and out of favor. If
the market is not favoring the Fund's growth style of investing, the Fund's
gains may not be as big as, or its losses may be bigger than, other equity
funds using different investment styles.

FOUNDERS GROWTH AND INCOME FUND WAS FORMERLY KNOWN AS FOUNDERS BLUE CHIP FUND.

DEFINITION OF TERMS

DIVIDEND is a payment of stock or cash from a company's profits to its
stockholders.

===============================================================================

- -------------------------------------------------------------------------------
THE STANDARD & POOR'S (S&P) 500 INDEX IS A WIDELY RECOGNIZED UNMANAGED INDEX OF
500 COMMON STOCKS.

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FOUNDERS BALANCED FUND
-------------------------------------------------------------------
TICKER SYMBOL: FRINX MORNINGSTAR CATEGORY: Domestic Hybrid

INVESTMENT OBJECTIVE
Current income and capital appreciation

PRINCIPAL INVESTMENT STRATEGY
Founders Balanced Fund normally invests in a balanced portfolio of common
stocks, U.S. and foreign government securities, and a variety of corporate
fixed-income obligations.
o 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 our opinion, they offer better
prospects for capital appreciation. Normally, the Fund will invest a
significant percentage (up to 75%) of its total assets in equity securities.
o The Fund will maintain a minimum of 25% of its total assets in fixed-income,
investment-grade securities rated Baa or higher by Moody's Investors
Service, Inc. ("Moody's") or BBB or higher by Standard & Poor's ("S&P").
There is no maximum limit on the amount of straight debt securities in which
the Fund may invest, and the Fund may invest up to 100% of its assets in
such securities for temporary defensive purposes.
o The Fund also may invest up to 30% of its total assets in foreign
securities, with no more than 25% of its total assets invested in the
securities of any one foreign country.

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MAIN RISKS OF INVESTING
The primary risks of investing in this Fund are stock market risk, interest rate
risk, credit risk, and foreign investment risk.
o STOCK MARKET RISK. The value of the stocks and other securities owned by
Balanced Fund will fluctuate depending on the performance of the companies
that issued them, general market and economic conditions, and investor
confidence. In addition, if our assessment of a company's potential to
increase earnings faster than the rest of the market is not correct, the
securities in the portfolio may not increase in value, and could even
decrease in value.
o INTEREST RATE RISK. When interest rates change, the value of the
fixed-income portion of the Fund will be affected. An increase in interest
rates tends to reduce the market value of debt securities, while a decline
in interest rates tends to increase their values.
o CREDIT RISK. The value of the debt securities held by the Fund fluctuates
with the credit quality of the issuers of those securities. Credit risk
relates to the ability of the issuer to make payments of principal and
interest when due, including default risk.
o FOREIGN INVESTMENT RISK. Investments in foreign securities involve different
risks than U.S. investments, including fluctuations in currency exchange
rates, potential unstable political and economic structures, reduced
availability of public information and lack of uniform financial reporting
and regulatory practices similar to those that apply to U.S. issuers.

DEFINITION OF TERMS
DEBT SECURITY is a security representing money borrowed that must be repaid to
the lender at a future date. Bonds, notes, bills, and money market instruments
are all debt securities.

===============================================================================

- -------------------------------------------------------------------------------
THE STANDARD & POOR'S (S&P) 500 INDEX IS A WIDELY RECOGNIZED UNMANAGED INDEX OF
500 COMMON STOCKS. THE LIPPER BALANCED FUND INDEX IS AN AVERAGE OF THE
PERFORMANCE OF THE 30 LARGEST BALANCED FUNDS TRACKED BY LIPPER ANALYTICAL
SERVICES.

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FOUNDERS GOVERNMENT SECURITIES FUND
-------------------------------------------------------------------
TICKER SYMBOL: FGVSX MORNINGSTAR CATEGORY: Intermediate
Government

INVESTMENT OBJECTIVE
Current income

PRINCIPAL INVESTMENT STRATEGY
Founders Government Securities Fund normally invests at least 65% of its total
assets in obligations of the U.S. government. These include Treasury bills,
notes, and bonds and Government National Mortgage Association (GNMA)
pass-through securities, which are supported by the full faith and credit of the
U.S. Treasury, as well as obligations of other agencies and instrumentalities of
the U.S. government. Additionally, the Fund may invest in securities issued by
foreign governments and/or their agencies. However, the Fund will not invest
more than 25% of its total assets in the securities of any one foreign country.
The maturity of the Fund's investments will be long (10 or more years),
intermediate (three to 10 years), or short (three years or less). The proportion
invested by the Fund in each category can be expected to vary depending upon our
evaluation of market patterns and trends.

19
<PAGE>
MAIN RISKS OF INVESTING
The primary risks of investing in this Fund are interest rate risk, credit risk,
and prepayment risk.
o INTEREST RATE RISK. When interest rates change, the value of the Fund's
holdings will be affected. An increase in interest rates tends to reduce the
market value of debt securities, while a decline in interest rates tends to
increase their values.

o CREDIT RISK. The value of the debt securities held by the Fund fluctuates
with the credit quality of the issuers of those securities. Credit risk
relates to the ability of the issuer to make payments of principal and
interest when due, including default risk.

o PREPAYMENT RISK is present primarily with mortgage-backed securities. During
a period of declining interest rates, home- owners may refinance their
high-rate mortgages and prepay the principal. Cash from these prepayments
flows through to prepay the mortgage-backed securities, necessitating
reinvestment in bonds with lower interest rates, which may lower the return
of the Fund.

DEFINITION OF TERMS

BOND is an IOU (debt security) issued by a government or corporation that pays a
stated rate of interest and returns the face value on the maturity date.

MATURITY is the length of time until a bond or other debt instrument "matures"
or becomes due and payable.

===============================================================================

- -------------------------------------------------------------------------------
THE LEHMAN BROTHERS U.S. TREASURY COMPOSITE INDEX IS COMPOSED OF ALL PUBLIC
OBLIGATIONS OF THE U.S. TREASURY, EXCLUDING CERTAIN SECURITIES, THAT HAVE AT
LEAST ONE YEAR TO MATURITY AND AN OUTSTANDING PAR VALUE OF AT LEAST $100
MILLION.

20
<PAGE>
FOUNDERS MONEY MARKET FUND
-------------------------------------------------------------------
TICKER SYMBOL: FMMXX

INVESTMENT OBJECTIVE
Maximum current income consistent with the preservation of capital and liquidity

PRINCIPAL INVESTMENT STRATEGY
Founders Money Market Fund invests in high-quality money market instruments with
minimal credit risks and remaining maturities of 397 calendar days or less
including those issued by:
o Corporate issuers
o U.S. government and its agencies and instrumentalities
o U.S. and foreign banks
Money market funds are subject to strict federal requirements and must
maintain an average dollar-weighted portfolio maturity of 90 days or less.

- -------------------------------------------------------------------------------
The following information provides some indication of the risks of investing in
the Fund by showing changes in the Fund's performance from year to year. Past
performance is no guarantee of future results.
- -------------------------------------------------------------------------------

21
<PAGE>
MAIN RISKS OF INVESTING
The primary risks of investing in this Fund are interest rate risk, credit risk,
and inflation risk.
o INTEREST RATE RISK. When interest rates change, the Fund's yield will be
affected. An increase in interest rates tends to increase the Fund's yield,
while a decline in interest rates tends to reduce its yield.
o CREDIT RISK. The value of the debt securities held by the Fund fluctuates
with the credit quality of the issuers of those securities. Credit risk
relates to the ability of the issuer to meet interest or principal payments,
or both, as they become due.
o INFLATION RISK is the risk that your investment will not provide enough
income to keep pace with inflation.

An investment in the Money Market Fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
the Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Fund.

DEFINITION OF TERMS
MONEY MARKET is the economic market that exists to provide very short-term
funding to corporations, municipalities, and the U.S. government.

===============================================================================

- -------------------------------------------------------------------------------
FOUNDERS MONEY MARKET FUND'S MOST CURRENT SEVEN-DAY YIELD IS AVAILABLE BY
CALLING 1-800-232-8088.

22
<PAGE>
FEES AND EXPENSES OF THE FUNDS
- -------------------------------------------------------------------------------
The following table will help you better understand the various costs and
expenses you will incur directly or indirectly as an investor in the Funds. The
Funds are "no-load" which means we don't charge you any fees to buy, sell, or
exchange shares (although a $6 fee will be assessed for wire redemptions). Fund
expenses are paid out of Fund assets and are reflected in each Fund's share
price and dividend. The following figures show actual expenses during the year
ended December 31, 1998, and are calculated as a percentage of average net
assets.

ANNUAL FUND OPERATING EXPENSES

<TABLE>
<CAPTION>
TOTAL
TOTAL ANNUAL
ANNUAL FUND
FUND OPERATING
OPERATING EXPENSES
OTHER EXPENSES (WITH
EXPENSES (WITHOUT REIMBURSE-
DISTRIBUTION (WITHOUT REIMBURSE- MENTS/
(12B-1) FEES REIMBURSE- MENTS/ WAIVERS
MANAGE- WITHOUT MENTS/ WAIVERS OR
FUND NAME MENT FEE WAIVERS1 WAIVERS)2 OR CREDITS) CREDITS)3
- ------------------------------------- -------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balanced Fund 0.57% 0.25% 0.18% 1.00% 0.99%
Discovery Fund 1.00% 0.25% 0.32% 1.57% 1.55%
Government Securities Fund 0.65% 0.25%4 0.59% 1.49% 1.25%
Growth Fund 0.67% 0.25% 0.18% 1.10% 1.08%
Growth and Income Fund 0.62% 0.25% 0.23% 1.10% 1.08%
International Equity Fund 1.00% 0.25% 0.67%5 1.92% 1.80%
Mid-Cap Growth Fund 0.77% 0.25% 0.33% 1.35% 1.33%
Money Market Fund 0.50% N/A 0.37% 0.87% 0.85%
Passport Fund 1.00% 0.25% 0.29% 1.54% 1.52%
Worldwide Growth Fund 0.96% 0.25% 0.28% 1.49% 1.47%
</TABLE>

- ------------

1 LONG-TERM SHAREHOLDERS, MAY, OVER TIME, INDIRECTLY PAY MORE IN 12B-1 FEES THAN
THE ECONOMIC EQUIVALENT OF THE MAXIMUM FRONT-END SALES CHARGE PERMITTED BY THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.

2 THESE EXPENSES INCLUDE CUSTODIAN, TRANSFER AGENCY AND ACCOUNTING AGENT FEES,
AND OTHER CUSTOMARY FUND EXPENSES.

3 EXPENSES AFTER WAIVERS AND CREDITS INCLUDE EXPENSE OFFSETS FROM CREDITS EARNED
ON UNINVESTED CASH HELD OVERNIGHT AT THE CUSTODIAN, AND WAIVERS OF CERTAIN
12B-1 FEES AND OTHER EXPENSES BY FOUNDERS (SEE FOOTNOTES 4 AND 5 BELOW).

4 FOUNDERS HAS WAIVED CERTAIN 12B-1 FEES OF THE GOVERNMENT SECURITIES FUND
PURSUANT TO A CONTRACTUAL COMMITMENT TO THE FUND. AFTER THE WAIVER, 12B-1 FEES
FOR THAT FUND WERE 0.04%. THIS WAIVER WILL EXTEND THROUGH AT LEAST MAY 31,
2000 AND WILL NOT BE TERMINATED WITHOUT THE PRIOR APPROVAL OF THE FUND'S BOARD
OF DIRECTORS.

5 FOUNDERS HAS AGREED TO LIMIT THE TOTAL EXPENSES OF THE INTERNATIONAL EQUITY
FUND PURSUANT TO A CONTRACTUAL COMMITMENT TO THE FUND, SO THAT THE ACTUAL
OTHER EXPENSES PAID BY THE FUND DURING THE YEAR ENDED DECEMBER 31, 1998 WERE
0.58% OF AVERAGE NET ASSETS. THIS LIMIT WILL EXTEND THROUGH AT LEAST MAY 31,
2000, AND WILL NOT BE TERMINATED WITHOUT THE PRIOR APPROVAL OF THE FUNDS'
BOARD OF DIRECTORS.

23
<PAGE>
EXAMPLE
The following example is intended to help you compare the cost of investing in
the Funds with the cost of investing in other mutual funds. The example assumes
that:
o you invest $10,000 in a Fund for the time period indicated and then redeem
all of your shares at the end of those periods.
o your investment earns a 5% return each year and that each Fund's operating
expenses remain the same.

Although your actual costs, and the Fund's performance, may be higher or lower
based on these assumptions, your costs would be:

<TABLE>
<CAPTION>
FUND NAME 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Balanced Fund $103 $ 320 $ 555 $1,229
Discovery Fund $161 $ 499 $ 861 $1,878
Government Securities Fund $153 $ 474 $ 819 $1,789
Growth Fund $112 $ 348 $ 604 $1,334
Growth and Income Fund $113 $ 352 $ 609 $1,346
International Equity Fund $197 $ 608 $1,046 $2,259
Mid-Cap Growth Fund $138 $ 430 $ 744 $1,632
Money Market Fund $ 89 $ 279 $ 484 $1,076
Passport Fund $158 $ 490 $ 845 $1,845
Worldwide Growth Fund $152 $ 471 $ 813 $1,778
</TABLE>

<PAGE>
MORE INFORMATION ABOUT INVESTMENT OBJECTIVES, STRATEGIES, AND RISKS
- -------------------------------------------------------------------------------

Each of the Founders Funds seeks to achieve its investment objective through its
unique investment strategies. The principal investment strategies and risks of
each Fund have been described in the Fund by Fund Summaries. This section of the
Prospectus discusses other investment strategies used by the Funds and provides
in more detail the risks associated with those strategies. Although we might not
always use all of the different techniques and investments described below, some
of these techniques are designed to help reduce investment or market risks. The
Statement of Additional Information contains more detailed information about the
Funds' investment policies and risks.
Founders offers a wide spectrum of mutual funds covering a range of
potential rewards and risks: aggressive growth, growth, international, growth
and income, fixed-income, and money market funds.
The spectrum at right shows our assessment of the potential volatility of
the Founders Funds relative to one another and should not be used to compare the
Funds to other mutual funds or other types of investments. Each Fund has its own
strategy and risk/reward profile, and a Fund's position on the spectrum is
subject to change. It is important to read all risk discussions carefully before
investing.

25
<PAGE>
Higher Risk/
Higher Return Potential

International Small Cap Passport Fund
Small Cap Discovery Fund
Mid Cap Mid-Cap Growth Fund
Core International International Equity Fund
Global Equity Worldwide Growth Fund
Large Cap Growth Fund
Growth and Income Growth and Income Fund
Balanced Balanced Fund
Fixed Income Government Securities Fund
Money Market Money Market Fund

Lower Risk/
Lower Return Potential

26
<PAGE>
OTHER PORTFOLIO INVESTMENTS AND STRATEGIES

Balanced, Discovery, International Equity, Growth, Growth and Income, Mid-Cap
Growth, Passport, and Worldwide Growth are the Equity Funds. The other two
Founders Funds, the Government Securities Fund and the Money Market Fund, are
the Income Funds.

FIXED-INCOME SECURITIES. While the Equity Funds generally emphasize investments
in equity securities, such as common stocks and preferred stocks, they also may
invest in fixed-income securities when we believe that these investments offer
opportunities for capital appreciation. Fixed-income securities in which the
Equity Funds might invest include bonds, debentures, and other corporate or
government obligations. For Balanced Fund, we also consider current income in
the selection of these securities.

ADRS. The Equity Funds may invest without limit in American Depositary Receipts
and American Depositary Shares (collectively, "ADRs"). ADRs are receipts
representing shares of a foreign corporation held by a U.S. bank that entitle
the holder to all dividends and capital gains on the underlying foreign shares.
ADRs are denominated in U.S. dollars and trade in the U.S. securities markets.

ADRs are subject to some of the same risks as direct investments in foreign
securities, including the risk that material information about the issuer may
not be disclosed in the United States and the risk that currency fluctuations
may adversely affect the value of the ADR.

SECURITIES THAT ARE NOT READILY MARKETABLE. A security is not "readily
marketable" if it cannot be disposed of within seven days in the ordinary
course of business for approximately the amount it is valued. We will not invest
more than 15% of any Fund's net assets in securities that are not readily
marketable. For the Money Market Fund, this limit is 10%.

A restricted security is one that has a contractual restriction on its
resale or which cannot be sold publicly until it is registered under the
Securities Act of 1933. Certain restricted securities are eligible for resale to
qualified institutional purchasers (Rule 144A securities) and may be readily
marketable. Rule 144A securities that are readily marketable are not subject to
the 15%/10% limits discussed above. We monitor holdings of securities that are
not readily marketable on an ongoing basis to determine whether to sell any
holdings to maintain adequate liquidity. However, it is possible that the market
for 144A securities can change and it may become difficult to sell these
securities, or to sell them at a reasonable price, if institutional purchasers
lose interest in the investment.

Investments in illiquid securities, which may include restricted securities,
involve certain risks to the extent that a Fund may be unable to dispose of such
a security at the time desired or at a

27
<PAGE>
reasonable price. In addition, in order to sell a restricted security, a Fund
might have to bear the expense and incur the delays associated with registering
the shares under the Securities Act of 1933.

HEDGING AND DERIVATIVE INSTRUMENTS. All of the Funds except the Money Market
Fund can enter into futures contracts and forward contracts, and may purchase
and/or write (sell) put and call options on securities indexes, futures
contracts and foreign currencies. These are sometimes referred to as
"derivative" instruments. The Funds do not use derivative instruments for
speculative purposes. The Funds have limits on their use and are not required to
use them in seeking their investment objectives.

Some of these strategies may hedge a Fund's portfolio against price
fluctuations. Other hedging strategies, such as buying futures and call options,
would tend to increase a Fund's exposure to the securities market. Forward
contracts may be used to try to manage foreign currency risks on a Fund's
foreign investments. Options trading involves the payment of premiums and has
special tax effects on a Fund.

There are special risks in using particular hedging strategies. Using
derivatives can cause a Fund to lose money on its investments and/or increase
the volatility of its share prices. In addition, the successful use of
derivatives draws upon skills and experience that are different from those
needed to select the other securities in which the Funds invest. Should interest
rates or the prices of securities or financial indexes move in an unexpected
manner, a Fund may not achieve the desired benefit of these instruments, or may
realize losses and be in a worse position than if the instruments had not been
used. A Fund could also experience losses if the prices of its derivative
positions were not correlated with its other investments or if it could not
close out a position because of an illiquid market.

The Funds' investments in derivatives are subject to the Funds' internal
Derivatives Policy, which may be changed by the Funds' Board of Directors
without shareholder approval.

TEMPORARY DEFENSIVE INVESTMENTS. In times of unstable or adverse market or
economic conditions, up to 100% of the assets of the Funds can be invested in
temporary defensive instruments in an effort to enhance liquidity or preserve
capital. Temporary defensive investments generally would include cash, cash
equivalents such as commercial paper, money market instruments, short-term debt
securities, U.S. government securities, or repurchase agreements. The Funds
could also hold these types of securities pending the investment of proceeds
from the sale of Fund shares or portfolio securities, or to meet anticipated
redemptions of Fund shares. To the extent a Fund invests defensively in these
securities, it might not achieve its investment objective.

28
<PAGE>
PORTFOLIO TURNOVER. The Funds do not have any limitations regarding portfolio
turnover. A Fund may engage in short-term trading to try to achieve its
objective and may have portfolio turnover rates in excess of 100%. A portfolio
turnover rate of 100% is equivalent to a Fund buying and selling all of the
securities in its portfolio once during the course of a year. The portfolio
turnover rates of the Funds may be higher than some other mutual funds with the
same investment objectives. Higher portfolio turnover rates increase the
brokerage costs a Fund pays and may adversely affect its performance. If a Fund
realizes capital gains when it sells portfolio investments, it generally must
pay those gains out to shareholders, increasing their taxable distributions.
This may adversely affect the after-tax performance of the Funds for
shareholders with taxable accounts. The portfolio turnover rates of all the
Funds (other than the Money Market Fund) for prior years are found under
"Financial Highlights." The Funds' current and future portfolio turnover rates
may differ significantly from their historical portfolio turnover rates.

INVESTMENT RESTRICTIONS. The investment objective of each Fund is fundamental
and may not be changed without a vote of the Fund's shareholders. In addition,
certain restrictions set forth in the Statement of Additional Information may
not be changed without the approval of the Fund's shareholders. Except for those
fundamental restrictions, the strategies and policies used by the Funds in
pursuing their objectives may be changed by the Funds' Board of Directors
without shareholder approval.

THE INCOME FUNDS' FOREIGN INVESTMENTS. Money Market Fund's foreign investments
are limited to dollar-denominated obligations of foreign depository institutions
or their U.S. branches, or foreign branches of U.S. depository institutions. The
Government Securities Fund's foreign investments are limited to securities
issued by foreign governments and/or their agencies. Foreign investments of
Money Market and Government Securities Funds will be limited primarily to
securities of issuers from the major industrialized nations.

29
<PAGE>
MORE ABOUT RISK

Like all investments in securities, you risk losing money by investing in the
Funds. The Funds' investments are subject to changes in their value from a
number of factors.

o STOCK MARKET RISK. The value of the stocks and other securities owned by
the Funds will fluctuate depending on the performance of the companies that
issued them, general market and economic conditions, and investor
confidence.

o COMPANY RISK. The stocks in the Funds' portfolios may not perform as
expected. Other factors can affect a particular stock's price, such as poor
earnings reports by the issuer, loss of major customers or management team
members, major litigation against the issuer, or changes in government
regulations affecting the issuer or its industry.

o OPPORTUNITY RISK. There is the risk of missing out on an investment
opportunity because the assets necessary to take advantage of the
opportunity are tied up in less advantageous investments.

o INVESTMENT STYLE RISK. Market performance tends to be cyclical, and during
various cycles, certain investment styles may fall in and out of favor. If
the market is not favoring the Funds' growth style of investing, a Fund's
gains may not be as big as, or its losses may be bigger than, other funds
using different investment styles.

o FOREIGN INVESTMENT RISK. Investments in foreign securities involve
different risks than U.S. investments. These risks include:

o CURRENCY RISK. Fluctuations in exchange rates of foreign currencies
affect the value of a Fund's assets as measured in U.S. dollars and
the costs of converting between various currencies.

o REGULATORY RISK. There may be less governmental supervision of
foreign stock exchanges, security brokers, and issuers of
securities, and less public information about foreign companies.
Also, accounting, auditing and financial reporting standards are
less uniform than in the United States. Exchange control
regulations or currency restrictions could prevent cash from being
brought back to the United States. The Funds may be subject to
withholding taxes and could experience difficulties in pursuing
legal remedies and collecting judgments.

o MARKET RISK. Foreign markets have substantially less volume than
U.S. markets, and are not generally as liquid as, and may be more
volatile than, those in the United States. Brokerage commissions
and other transaction costs are generally higher than in the United
States, and settlement periods are longer.

30
<PAGE>
o POLITICAL RISK. Foreign investments may be subject to the
possibility of expropriation or confiscatory taxation; limitations
on the removal of funds or other assets of the Fund; and political,
economic or social instability.

o RISK OF FIXED-INCOME INVESTMENTS. The Funds' investments in fixed-income
securities are subject to interest rate risk and credit risk.

o INTEREST RATE RISK. When interest rates change, the value of the
fixed-income portion of a Fund will be affected. An increase in
interest rates tends to reduce the market value of debt securities,
while a decline in interest rates tends to increase their values.

o CREDIT RISK. The value of the debt securities held by a Fund
fluctuates with the credit quality of the issuers of those
securities. Credit risk relates to the ability of the issuer to
make payments of principal and interest when due, including default
risk.

o YEAR 2000 RISK. The Funds could be adversely affected if the computer
systems used by Founders and the Funds' other service providers do not
properly process and calculate date-related information on or after January
1, 2000. We are working to avoid Year 2000-related problems in our systems
and to obtain assurances from other service providers that they are taking
similar steps. In addition, issuers of securities in which the Funds invest
may be adversely affected by Year 2000-related problems. This could have an
impact on the value of the Funds' investments and the Funds' share prices.

31
<PAGE>
HOW THE FUNDS ARE MANAGED
- -------------------------------------------------------------------------------

THE MANAGER. Founders serves as investment adviser to each of the Funds and is
responsible for selecting the Funds' investments and handling their day-to-day
business. Founders' corporate offices are located at 2930 East Third Avenue,
Denver, Colorado 80206.
Founders and its predecessor companies have operated as investment advisers
since 1938. Founders also serves as investment adviser or sub-adviser to a
number of other investment companies and private accounts. Founders is a
subsidiary of Mellon Bank, N.A. and a member of Dreyfus Investment Services.
In addition to managing each Fund's investments, Founders also provides
certain related administrative services to each Fund. For these investment and
administrative services, each Fund pays Founders a management fee. Each Fund's
management fee for the last fiscal year was the following percentage of the
respective Fund's average daily net assets:

Balanced Fund 0.57%
Discovery Fund 1.00%
Government Securities Fund 0.65%
Growth Fund 0.67%
Growth and Income Fund 0.62%
International Equity Fund 1.00%
Mid-Cap Growth Fund 0.77%
Money Market Fund 0.50%
Passport Fund 1.00%
Worldwide Growth Fund 0.96%

FOUNDERS' INVESTMENT MANAGEMENT TEAM. To facilitate day-to-day Fund management,
we use a unique lead manager and team system for our Funds. There are three
teams, each targeted toward a particular area of the market: small- to
mid-capitalization, large-capitalization, and international investments. Each
team is composed of several members of our Investment Department, including lead
portfolio managers, portfolio traders, and research analysts.
Each of these individuals brings ideas, information, knowledge, and
expertise to the table to help in the management of the Funds. Daily decisions
on security selection for each Fund rest with a lead portfolio manager assigned
to the Fund. Through participation in the team process, the manager uses the
input, research, and advice of the rest of the management team in making
purchase and sale decisions.

ROBERT T. AMMANN, VICE PRESIDENT OF INVESTMENTS. Mr. Ammann is a Chartered
Financial Analyst who has been lead portfolio manager for Founders Discovery
Fund since 1997. Mr. Ammann also served as portfolio manager for Founders
Frontier Fund from February 1999 until its merger with Discovery Fund in August
1999. 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

32
<PAGE>
CompuStat Services, Inc. A graduate of Colorado State University, Mr. Ammann
holds a bachelor's degree in finance.

THOMAS M. ARRINGTON, VICE PRESIDENT OF INVESTMENTS. Mr. Arrington is a Chartered
Financial Analyst who has been co-portfolio manager, along with Scott Chapman,
of Founders Growth Fund since December 1998, and the domestic portion of
Founders Worldwide Growth Fund since July 1999. Mr. Arrington has also been the
lead portfolio manager of Founders Growth and Income Fund since February 1999.
Mr. Arrington has also served as a portfolio manager for The Dreyfus Corporation
since March 1999. Prior to joining Founders, he was vice president and director
of income equity strategy at HighMark Capital Management, Inc., a subsidiary of
Union BanCal Corporation. He received a bachelor's degree in economics from the
University of California, Los Angeles and an MBA from San Francisco State
University.

SCOTT A. CHAPMAN, VICE PRESIDENT OF INVESTMENTS AND DIRECTOR OF RESEARCH. Mr.
Chapman is a Chartered Financial Analyst who has been the co-portfolio manager,
along with Thomas Arrington, of Founders Growth Fund since December 1998, and
the domestic portion of Founders Worldwide Growth Fund since July 1999. Mr.
Chapman has also served as a portfolio manager for The Dreyfus Corporation since
February 1999. Before joining Founders, Mr. Chapman was vice president and
director of growth strategy for HighMark Capital Management, Inc., a subsidiary
of Union BanCal Corporation. He has more than 10 years' experience in equity
investment management, including security analysis positions with McCullough,
Andrews & Cappiello and Cooper Development Co. Mr. Chapman received a bachelor
of science degree in accounting from Santa Clara University and an MBA in
finance from Golden Gate University.

MARGARET R. DANUSER, FIXED-INCOME MANAGER. Ms. Danuser has been the lead
portfolio manager for Founders Government Securities and Money Market Funds
since 1996, and has served as Founders' fixed-income specialist since 1995.
Previously, she was an investment officer with LaSalle Street Capital Management
from 1989 to 1994. Ms. Danuser received a bachelor of arts degree in
international affairs from the University of Colorado, and pursued MBA studies
at Loyola University, Chicago.

BRIAN F. KELLY, VICE PRESIDENT OF INVESTMENTS. Mr. Kelly joined Founders in 1996
as the lead portfolio manager of Founders Balanced Fund. He also served as
portfolio manager of Founders Growth and Income Fund from 1996 through January
1999. Prior to joining Founders, Mr. Kelly served as a portfolio manager for
INVESCO Trust Company from 1993 to 1996, and as a senior equity investment
analyst for Sears Investment Management Company from 1986 to 1993. A graduate of
the University of Notre Dame, Mr. Kelly received an MBA and JD from the
University of Iowa. He is also a Certified Public Accountant.

33
<PAGE>
PAUL A. LAROCCO, VICE PRESIDENT OF INVESTMENTS. Mr. LaRocco is a Chartered
Financial Analyst who became lead portfolio manager for Founders Mid-Cap Growth
Fund in March 1998. Before joining Founders, Mr. LaRocco was a vice president
and portfolio manager with OppenheimerFunds, Inc. from 1993 to 1998 and a
securities analyst with Columbus Circle Investors from 1990 to 1993. Since April
1998, Mr. LaRocco has also served as a portfolio manager for The Dreyfus
Corporation. A graduate of the University of California at Santa Barbara, Mr.
LaRocco received an MBA with a concentration in finance from the University of
Chicago.

DOUGLAS A. LOEFFLER, VICE PRESIDENT OF INVESTMENTS. Mr. Loeffler is a Chartered
Financial Analyst who has been lead portfolio manager for Founders International
Equity Fund since 1997 and portfolio manager of the foreign portion of Founders
Worldwide Growth Fund since July 1999. Mr. Loeffler also served as co-lead
portfolio manager for Founders Mid-Cap Growth Fund from 1997 until March 1998.
He joined Founders in 1995 as a senior international equities analyst and
previously served as assistant portfolio manager for Founders International
Equity Fund. Mr. Loeffler has also served as a portfolio manager for The Dreyfus
Corporation since February 1999. Before joining Founders, he spent seven years
with Scudder, Stevens & Clark as an international equities analyst and
quantitative analyst. A graduate of Washington State University, Mr. Loeffler
received an MBA in finance from the University of Chicago.

TRACY P. STOUFFER, VICE PRESIDENT OF INVESTMENTS. Ms. Stouffer is a Chartered
Financial Analyst who has been portfolio manager of Founders Passport Fund since
July 1999. Before joining Founders, Ms. Stouffer was a vice president and
portfolio manager with Federated Global, Inc. from 1995 to July 1999, and a vice
president and portfolio manager with Clariden Asset Management from 1988 to
1995. Prior to 1988, Ms. Stouffer held various portfolio management and
securities analyst positions. A graduate of Cornell University, Ms. Stouffer
received an MBA with a concentration in marketing from the University of Western
Ontario, Canada.

34
<PAGE>
HOW TO BUY AND SELL SHARES
- -------------------------------------------------------------------------------

CALCULATING SHARE PRICE. The price you pay for a share of a Fund, and the price
you receive upon selling or redeeming a share of a Fund, is called the Fund's
net asset value (NAV). We calculate NAV by dividing the current market value of
a Fund's total assets, less all liabilities, by the total number of shares
outstanding. We determine each Fund's NAV as of the close of regular trading on
the New York Stock Exchange (normally 4 p.m. Eastern time) on each day that the
Exchange is open. The Funds use pricing services to determine the market value
of the securities in the Funds' portfolios. If market quotations are not readily
available, we value the Funds' securities or other assets at fair value as
determined in good faith by the Funds' Board of Directors, or pursuant to
procedures approved by the directors. The NAV of your shares when you redeem
them may be more or less than the price you originally paid, depending primarily
upon the Fund's investment performance.
We will price your purchase, exchange, or redemption of Fund shares at the
next NAV calculated after your order is received in good order by us or by
certain other agents of the Funds or their distributor.

35
<PAGE>
INVESTING IN THE FOUNDERS FUNDS
- -------------------------------------------------------------------------------

OPENING YOUR ACCOUNT
You may establish the following types of accounts by completing a Founders New
Account Application:

o INDIVIDUAL OR JOINT TENANT. Individual accounts have a single owner. Joint
accounts have two or more owners. Unless specified otherwise, we set up
joint accounts with rights of survivorship, which means that upon the death
of one account holder, ownership passes to the remaining account holders.

o TRANSFER ON DEATH. A way to designate beneficiaries on an Individual or
Joint Tenant account. We will provide the rules governing this type of
account when the account is established.

o UGMA OR UTMA. (Uniform Gifts to Minors Act or Uniform Transfers to Minors
Act) These accounts are a way to give money to a child or to help a child
invest on his/her own. Depending on state laws, we will set the account up
as a UGMA or UTMA.

o TRUST. The trust needs to be effective before we can establish this kind of
account.

o CORPORATION OR OTHER ENTITY. A corporation or entity owns this account.
Please attach a certified copy of your corporate resolution showing the
person(s) authorized to act on this account.

RETIREMENT ACCOUNTS
You may set up the following retirement accounts by completing a Founders IRA
Application:

o TRADITIONAL IRA. Any adult under age 70 1/2 who has earned income may
contribute up to $2,000 (or 100% of compensation, whichever is less) to an
IRA per tax year. If your spouse is not employed, you can contribute up to
$4,000 annually to two IRAs, as long as no more than $2,000 is contributed
to a single account.

o ROLLOVER IRA. Distributions from qualified employer-sponsored retirement
plans (and, in most cases, from any IRA) retain their tax advantages when
rolled over to an IRA within 60 days of receipt. You also need to complete
a Founders Transfer, Direct Rollover and Conversion Form.

o ROTH IRA. Allows for two types of purchases:

o CONTRIBUTIONS. Any adult who has earned income below certain income
limits may contribute up to $2,000 (or 100% of compensation,
whichever is less) to a Roth IRA per tax year. If your spouse is
not employed, you can contribute up to $4,000 annually to two Roth
IRAs, as long as no more than $2,000 is contributed to a single
account.

36
<PAGE>
Contributions to a Roth IRA are NOT tax-deductible, but
distributions, including earnings, may be withdrawn tax-free after
five years for qualified events such as retirement. You may elect
to have both traditional IRAs and Roth IRAs, provided that your
combined contributions do not exceed the $2,000 (or 100% of compen-
sation, whichever is less) annual limitation.

o CONVERSIONS. Conversions/ distributions from traditional IRAs to
Roth IRAs are taxable at the time of their conversion, but after
five years may then be distributed tax-free for qualified events
such as retirement. Only individuals with incomes below certain
thresholds may convert their traditional IRAs to Roth IRAs.

o SEP-IRA. Allows self-employed persons or small business owners to make
direct contributions to employees' IRAs with minimal reporting and
disclosure requirements.

Each year you will be charged a single $10.00 custodial fee for all IRA
accounts maintained under your Social Security number. This fee will be waived
if the aggregate value of your IRA accounts is $5,000 or more. This fee may be
changed upon 30 days' notice.

o PROFIT-SHARING AND MONEY PURCHASE PENSION PLAN. A retirement plan that
allows self-employed persons or small business owners and their employees
to make tax-deductible contributions for themselves and any eligible
employees.

o 401(K) PLAN. A retirement plan that allows employees of corporations of any
size to contribute a percentage of their wages on a tax-deferred basis.

Call 1-800-934-GOLD (4653) for additional information about Founders'
retirement accounts.
WE RECOMMEND THAT YOU CONSULT YOUR TAX ADVISER REGARDING THE PARTICULAR TAX
CONSEQUENCES OF THESE RETIREMENT PLAN OPTIONS.

37
<PAGE>
MINIMUM INITIAL INVESTMENTS
To open a Founders account, please enclose a check payable to "Founders Funds,
Inc." for one of the following amounts:
o $1,000 minimum for most regular accounts
o $500 minimum for IRA and UGMA/UTMA accounts
o No minimum if you begin an Automatic Investment Plan or payroll deduction
of $50 or more per month or per pay period

MINIMUM ADDITIONAL INVESTMENTS
o $100 for payments made by mail, TeleTransfer, wire and online
o $50 for Automatic Investment Plan payments
o $50 for payroll deduction

<PAGE>
CONDUCTING BUSINESS WITH FOUNDERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
HOW TO HOW TO HOW TO
BY PHONE OPEN AN ACCOUNT ADD TO AN ACCOUNT SELL SHARES
- -------------------------------------------------------------------------------------------------------------------
1-800-525-2440 If you already have an TeleTransfer allows you to We can send proceeds only
account with us and have make electronic purchases to the address or bank of
exchange privileges, you directly from a checking record. Minimum
can call to open an account or savings account at your redemption - $100; $1,000
in another Fund by request. You may establish minimum for a redemption
exchange. The names and TeleTransfer when your by wire. Phone redemption
registrations need to be account is opened, or add is not available on
identical on both accounts. it later by completing an retirement accounts and
Otherwise, you must Account Changes Form. We certain other accounts.
complete a New Account charge no fee for You may add phone
Application and send it in TeleTransfer transactions. redemption privileges by
with your investment check. completing an Account
Changes Form.
BY MAIL
- -------------------------------------------------------------------------------------------------------------------
Founders Funds Complete the proper Make your check payable to In a letter, please tell
P.O. Box 173655 application. Make your "Founders Funds, Inc." us the number of shares or
Denver, CO 80217-3655 check payable to "Founders Enclose the purchase stub dollars you wish to
Funds, Inc." We cannot (from your most recent redeem, the name(s) of the
If you are using certified or establish new accounts with confirmation or quarterly account owner(s), the Fund
registered mail or an third-party checks. statement); if you do not and account number, and
overnight delivery service, have one, write the Fund your Social Security or
send your correspondence to: name and your account tax iden-
Founders Funds number on the check. For tification number. All
2930 East Third Avenue IRAs, please state the account owners need to
Denver, CO 80206-5002 contribution year. sign the request exactly
Founders Funds does not as their names appear on
normally accept the account. We can send
third-party checks. proceeds only to the
address or bank of record.
IN PERSON
- -------------------------------------------------------------------------------------------------------------------
Founders Investor Center Visit the Founders Investor Visit the Founders Visit the Founders
Founders Financial Center Center. Hours are 8 a.m. to Investors Center. Hours Investor Center, 8 a.m. to
2930 East Third Avenue 5 p.m. Mountain time, are 8 a.m. to 5 p.m. 5 p.m., Mountain time,
(at Milwaukee) Monday through Friday. Call Mountain time, Monday Monday through Friday.
Denver, CO us at 1-800-525-2440 to through Friday. Call us at Call us at
make an appointment or for 1-800-525-2440 to make an 1-800-525-2440 to make an
directions. appointment or for appointment, for
directions. directions, and to ask
whether all account owners
need to be present.
</TABLE>

39
<PAGE>
CONDUCTING BUSINESS WITH FOUNDERS
- --------------------------------------------------------------------------------
HOW TO
BY PHONE EXCHANGE SHARES
- --------------------------------------------------------------------------------
1-800-525-2440 If you have telephone
exchange privileges, you
may exchange from one fund
to another. The names and
registrations need to be
identical on both
accounts.
BY MAIL
- --------------------------------------------------------------------------------
Founders Funds In a letter, include the
P.O. Box 173655 name(s) of the account
Denver, CO 80217-3655 owner(s), the Fund and
account number you wish to
If you are using certified or exchange from, your Social
registered mail or an Security or tax
overnight delivery service, identification number, the
send your correspondence to: dollar or share amount,
Founders Funds and the account you wish
2930 East Third Avenue to exchange into. All
Denver, CO 80206-5002 account owners need to
sign the request exactly
as their names appear on
the account. Exchange
requests may be faxed to
us at (303) 394-4021.
IN PERSON
- --------------------------------------------------------------------------------
Founders Investor Center Visit the Founders
Founders Financial Center Investor Center, 8 a.m. to
2930 East Third Avenue 5 p.m., Mountain time,
(at Milwaukee) Monday through Friday.
Denver, CO Call us at 1-800-525-2440
to make an appointment,
for directions, and to ask
whether all account owners
need to be present.

40
<PAGE>
CONDUCTING BUSINESS WITH FOUNDERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
HOW TO HOW TO HOW TO
BY WIRE OPEN AN ACCOUNT ADD TO AN ACCOUNT SELL SHARES
- -------------------------------------------------------------------------------------------------------------------
Complete and mail the Wire funds to: $6 fee; $1,000 minimum.
proper application. Wire Investors Fiduciary Trust Monies are usually
funds to: Company received the business day
Investors Fiduciary Trust ABA # 101003621 after the date you sell.
Company For Credit to Account # Unless otherwise
ABA # 101003621 890751-842-0 specified, we will deduct
For Credit to Account Please indicate the Fund the fee from your
# 890751-842-0 name, your account number, redemption proceeds.
Please indicate the Fund and the name(s) of the
name, your account number, account owner(s).
and the name(s) of the
account owner(s).
THROUGH OUR WEBSITE
- -------------------------------------------------------------------------------------------------------------------
www.founders.com Download, complete and mail You may purchase shares You may redeem shares
a signed copy of the proper using our website if you using our website if you
application. have TeleTransfer. have TeleTransfer. We can
only send proceeds to your
bank of record.
Online redemptions are not
available on retirement
accounts and certain other
accounts.
THROUGH AUTOMATIC
TRANSACTION PLANS
- -------------------------------------------------------------------------------------------------------------------
Automatic Investment Plan Automatic Investment Plan Systematic Withdrawal Plan
(AIP) allows you to make (AIP) allows you to make permits you to receive a
electronic purchases electronic purchases fixed sum on a monthly,
directly from a checking or directly from a checking quarterly or annual basis
savings account. The or savings account. The from accounts with a value
minimum to open an account minimum to open an account of $5,000 or more.
is $50 per month. is $50 per month. Payments may be sent
Once established, AIP Once established, AIP electronically to your
purchases take place purchases take place bank or to you in check
automatically on automatically on form.
approximately the 5th approximately the 5th
and/or 20th of the month. and/or 20th of the month.
We charge no fee for AIP. We charge no fee for AIP.
FASTLINE (TM)
- -------------------------------------------------------------------------------------------------------------------
1-800-947-FAST (3278) Follow instructions Follow instructions We can send proceeds only
Automated telephone provided when you call to provided when you call to to the bank of record.
account access service open an account in a new add to your account via Minimum redemption - $100.
Fund by exchange. TeleTransfer. Phone redemption is not
available on retirement
accounts and certain other
accounts. You may add
phone redemption
privileges by completing
an Account Changes Form.
</TABLE>

41
<PAGE>
CONDUCTING BUSINESS WITH FOUNDERS
- --------------------------------------------------------------------------------
HOW TO
BY WIRE EXCHANGE SHARES
- --------------------------------------------------------------------------------
Not applicable.
THROUGH OUR WEBSITE
- --------------------------------------------------------------------------------
www.founders.com You may exchange shares
using our website if you
have telephone exchange
privileges.
THROUGH AUTOMATIC
TRANSACTION PLANS
- --------------------------------------------------------------------------------
Fund-to-Fund Investment
Plan allows you to
automatically exchange a
fixed dollar amount from
one Fund to purchase
shares in another Fund.
FASTLINE (TM)
- --------------------------------------------------------------------------------
1-800-947-FAST (3278) Follow instructions
Automated telephone provided when you call.
account access service $100 minimum.

42
<PAGE>
SELLING SHARES OF FOUNDERS FUNDS

o SHARES RECENTLY PURCHASED BY CHECK OR TELETRANSFER. Redemptions of shares
purchased by check (other than purchases by cashier's check) or
TeleTransfer will be placed on hold until your check has cleared (which may
take up to 15 days). During this time, you may make exchanges to another
Fund but may not receive the proceeds of redemption. Although payment may
be delayed, the price you receive for your redeemed shares will not be
affected.

o INDIVIDUAL, JOINT TENANT, TRANSFER ON DEATH, AND UGMA/UTMA ACCOUNTS. If
requesting a redemption in writing, a letter of instruction needs to be
signed by all account owners as their names appear on the account.

o RETIREMENT ACCOUNTS. Please call 1-800-525-2440 for the appropriate form.

o TRUST ACCOUNTS. The trustee needs to sign a letter indicating his/her
capacity as trustee. If the trustee's name is not in the account
registration, you will need to provide a certificate of incumbency dated
within the past 60 days.

o CORPORATION OR OTHER ENTITY. A certified corporate resolution complete with
a corporate seal or signature guarantee needs to be provided. At least one
person authorized to act on the account needs to sign the letter.

BUYING OR SELLING SHARES THROUGH A BROKER. Be sure to read the broker's program
materials for disclosures on fees and service features that may differ from
those in this Prospectus. A broker may charge a commission or transaction fee,
or have different account minimums.

SIGNATURE GUARANTEE. For your protection, we require a guaranteed signature if
you request:

o a redemption check made payable to anyone other than the shareholder(s)
of record

o a redemption check mailed to an address other than the address of record

o a redemption check or wire sent to a bank other than the bank we have on
file

o a redemption check mailed to an address that has been changed within 30
days of your request

o a redemption for $50,000 or more from an account that does not have
telephone redemption privileges (excluding accounts held by a
corporation)

You can have your signature guaranteed at a:

o bank

o broker/dealer

o credit union (if authorized under state law)

o securities exchange/association

o clearing agency

o savings association

43
<PAGE>
Please note that a notary public cannot provide a signature guarantee.

REDEMPTION PROCEEDS. We can deliver redemption proceeds to you:

o BY CHECK. Checks are sent to the address of record. If you request that a
check be sent to another address, we require a signature guarantee. (See
"Signature Guarantee.") If you don't specify, we will deliver proceeds
via check. No interest will accrue on amounts represented by uncashed
redemption checks.

o BY WIRE. $6 fee; $1,000 minimum. Monies are usually received the business
day after the date you sell. Unless otherwise specified, we will deduct the
fee from your redemption proceeds.

o BY TELETRANSFER. No fee. Monies are usually transferred to your bank two
business days after you sell. Call your bank to find out when monies are
accessible.

OVERALL POLICIES REGARDING TRANSACTIONS. We can execute transaction requests
only if they are in good order. You will be contacted in writing if we encounter
processing problems. Call 1-800-525-2440 if you have any questions about these
procedures.

We cannot accept conditional transactions requesting that a transaction
occur on a specific date or at a specific share price. However, we reserve the
right to allow shareholders to exchange from the Money Market Fund to another
fund of their choice on a predetermined date, such as the day after
distributions are paid.

TRANSACTIONS CONDUCTED BY PHONE, FAX, FASTLINE(TM), OR THROUGH FOUNDERS'
WEBSITE. The Funds, Founders, and their agents are not responsible for the
authenticity of purchase, exchange, or redemption instructions received by
phone, fax, FASTLINE, or through Founders' website.

By signing a New Account Application or an IRA Application (unless
specifically declined on the Application), by providing other written (for
redemptions), verbal (for exchanges), or electronic authorization, or by
requesting Automatic Investment Plan or payroll deduction privileges, you agree
to release the Funds, Founders, and their agents from any and all liability for
acts or omissions done in good faith under the authorizations contained in the
application or provided through Founders' website, including their possibly
effecting unauthorized or fraudulent transactions.

As a result of your executing such a release, you bear the risk of loss from
an unauthorized or fraudulent transaction. However, if the Fund fails to employ
reasonable procedures to attempt to confirm that telephone or Internet
instructions are genuine, the Fund may be liable for any resulting losses. These
procedures include, but are not necessarily limited to, one or more of the
following:

o requiring personal identification prior to acting upon instructions

44
<PAGE>
o providing written confirmation of such transactions

o tape-recording telephone instructions

o EXCESSIVE TRADING. To maintain competitive expense ratios and to avoid
disrupting the management of each Fund's portfolio, we reserve the right to
suspend or terminate the exchange privilege for any shareholder (including
a shareholder whose account is managed by an adviser) when the total
exchanges out of any one of the Funds exceed four in any 12-month period.
We will provide written notification to any investor whose exchange
privilege is being revoked and will provide an effective date of
revocation, which will not be less than 15 calendar days after the
notification date.

o EFFECTIVE DATE OF TRANSACTIONS. Transaction requests received in good order
prior to the close of the New York Stock Exchange on a given date will be
effective that date. We consider investments to be received in good order
when all required documents and your check or wired funds are received by
us or by certain other agents of the Funds or their distributor. Under
certain circumstances, payment of redemption proceeds may be delayed for up
to seven calendar days to allow for the orderly liquidation of securities.
Also, when the New York Stock Exchange is closed (or when trading is
restricted) for any reason other than its customary weekend or holiday
closings, or under any emergency circumstances, as determined by the
Securities and Exchange Commission, we may suspend redemptions or postpone
payments. If you are unable to reach us by phone, consider sending your
order by overnight delivery service.

o FAX TRANSMISSIONS. Exchange instructions may be faxed, but we cannot
process redemption requests received by fax.

o CERTIFICATES. The Funds do not issue share certificates. If you are selling
shares previously issued in certificate form, you need to include the
certificates along with your redemption/exchange request. If you have lost
your certificates, please call us.

o U.S. DOLLARS. Purchases need to be made in U.S. dollars, and checks need to
be drawn on U.S. banks. We cannot accept cash.

o RETURNED CHECKS. If your check is returned due to insufficient funds, we
will cancel your purchase, and you will be liable for any losses or fees
incurred by the Fund or its agents. If you are a current shareholder,
shares will be redeemed from other accounts, if needed, to reimburse the
Fund.

o CONFIRMATION STATEMENTS. We will send you a confirmation after each
transaction, except in certain retirement accounts and where the only
transaction is a dividend or capital gain reinvestment or an

45
<PAGE>
Automatic Investment Plan purchase. In those cases, your quarterly account
statement serves as your confirmation.

o TAX IDENTIFICATION NUMBER. If you do not provide your Social Security or
tax identification number when you open your account, federal law requires
the Fund to withhold 31% of all dividends, capital gain distributions,
redemption and exchange proceeds. We also may refuse to sell shares to
anyone not furnishing these numbers, or may take such other action as
deemed necessary, including redeeming some or all of the shareholder's
shares. In addition, a shareholder's account may be reduced by $50 to
reimburse the Fund for the penalty imposed by the Internal Revenue Service
for failure to report the investor's taxpayer identification number on
information reports.

o ACCOUNT MINIMUMS. The Funds require you to maintain a minimum of $1,000 per
account ($500 for IRAs and UGMAs/UTMAs), unless you are investing under an
Automatic Investment Plan or payroll deduction. If at any time, due to
redemptions or exchanges, or upon the discontinuance of an Automatic
Investment Plan or payroll deduction, the total value of your account falls
below this minimum, we may either charge a fee of $10, which will be
automatically deducted from your account, or close your account and mail
the proceeds to the address of record.

We will base the decision to levy the fee or close the account on our
determination of what is best for the Fund. We will give you at least 60
days' written notice informing you that your account will be closed or that
the $10 fee will be charged, so that you may make an additional investment
to bring the account up to the required minimum balance.

WE RESERVE THE RIGHT TO:

o reject any investment or application

o cancel any purchase due to nonpayment

o modify the conditions of purchase at any time

o waive or lower investment minimums

o limit the amount that may be purchased

o perform a credit check on shareholders establishing a new account or
requesting checkwriting privileges

46
<PAGE>
FOR MORE INFORMATION ON YOUR ACCOUNT

INVESTOR SERVICES. Our Investor Services Representatives are available to assist
you. For your protection, we record calls to Investor Services. Call
1-800-525-2440.

24-HOUR ACCOUNT INFORMATION

o BY PHONE: 1-800-947-FAST (3278) FASTLINE, our automated telephone service,
enables you to access account information, conduct exchanges and purchases
and request duplicate statements and tax forms 24 hours a day with a Touch-
tone phone.

o BY ONLINE COMPUTER SERVICES: By visiting Founders InvestorSITET on the
World Wide Web, you can access the latest Fund performance returns, daily
prices, portfolio manager commentaries, news articles about the Funds, and
much more. Shareholders may access account transaction histories and
account balances, and conduct purchase, exchange, and redemption
transactions. Our address is www.founders.com.

DAILY CLOSING PRICES. Founders QUOTELINE features the latest closing prices for
the Funds, updated each business day. Call 1-800-232-8088 24 hours a day, or
reach us on the Internet at www.founders.com.

Fund prices for the prior business day are listed in the business section of
most major daily newspapers. Look in the Mutual Funds section under
"Founders."

FUND AND MARKET NEWS UPDATES. For the latest news on each of the Funds and
commentary on market conditions, call Founders INSIGHT. Recorded by our
portfolio managers, it is available 24 hours a day. Call 1-800-525-2440, or
access MANAGER INSIGHTS on the Internet at www.founders.com.

ESTABLISHING ADDITIONAL SERVICES

Many convenient service options are available for Founders Funds accounts. You
may call 1-800-525-2440 to request a form to establish the following services:

o AUTOMATIC INVESTMENT PLAN (AIP). Allows you to make automatic purchases of
at least $50 from a bank account once or twice a month. See "How to Add to
an Account Through Automatic Transaction Plans" on page 42.

o TELETRANSFER PROGRAM. Allows you to purchase or redeem Fund shares with a
phone call or on our website at any time. Purchase or redemption amounts
are automatically transferred to/from your bank account. If you select an
Automatic Investment Plan, you are automatically authorized to participate
in the TeleTransfer program.

o TELEPHONE/ONLINE REDEMPTIONS. Available for regular (non-retirement)
accounts only.

47
<PAGE>
o TELEPHONE/ONLINE EXCHANGES. Allows you to exchange money between
identically registered accounts.

o CHECKWRITING

o Available on Government Securities and Money Market Funds

o May be established with a minimum account balance of $1,000

o No fee for this service

o Minimum amount per check: $500

o Maximum amount per check: $250,000

o DIVIDEND AND LONG-TERM CAPITAL GAIN DISTRIBUTION OPTIONS. Either or both
may be paid in cash or reinvested. The payment method for short-term
capital gain distributions is the same as for dividends.

o SYSTEMATIC WITHDRAWAL PLAN. Permits you to receive a fixed sum on a
monthly, quarterly or annual basis from accounts with a value of $5,000 or
more. Payments may be sent electronically to your bank or to you in check
form.

o FUND-TO-FUND INVESTMENT PLAN. Allows you to automatically exchange a fixed
dollar amount each month from one Fund to purchase shares in another Fund.

o DISTRIBUTION PURCHASE PROGRAM. Permits you to have capital gain
distributions and/or dividends from one Fund automatically reinvested in
another Fund account having a balance of at least $1,000 ($500 for IRAs or
UGMA/UTMAs).

o PAYROLL DEDUCTION. Allows you to make automatic purchases of at least $50
per pay period through payroll deduction.

48
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
- -------------------------------------------------------------------------------

Discovery, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Passport and Worldwide Growth Funds intend to distribute net realized investment
income on an annual basis each December. Balanced Fund intends to distribute net
realized investment income on a quarterly basis every March, June, September,
and December. Government Securities Fund intends to declare dividends daily and
distribute net realized investment income on the last business day of every
month. Money Market Fund declares dividends daily, which are paid on the last
business day of every month. Shares of Government Securities and Money Market
Funds begin receiving dividends no later than the next business day following
the day when funds are received by us.
All Funds intend to distribute any net realized capital gains each December.
The Government Securities and Money Market Funds are not likely to distribute
capital gains. From time to time, the Funds may make distributions in addition
to those described above.
You have the option of reinvesting income dividends and capital gain
distributions in shares of the Funds or receiving these distributions in cash.
Dividends and any distributions from the Funds are automatically reinvested in
additional shares unless you elect to receive these distributions in cash. If
you have elected to receive your dividends or capital gains in cash and the
Postal Service cannot deliver your checks, or if your checks remain uncashed for
six months, we reserve the right to reinvest your distribution checks in your
account at the then-current net asset value and to reinvest all the account's
subsequent distributions in shares of that Fund. No interest will accrue on
amounts represented by uncashed distribution checks.

49
<PAGE>
TAXES
- -------------------------------------------------------------------------------

The Funds distribute to their shareholders any net investment income and net
realized capital gains they receive. You must include all dividends and capital
gain distributions in your taxable income for federal, state, and local income
tax purposes, unless your account is not subject to income taxes. Dividends and
other distributions are taxable whether they are received in cash or reinvested
in the same or another Fund.
All dividends of net investment income from the Funds, such as dividends and
interest on their investments, will be taxable to you as ordinary income. A
portion of such dividends may qualify for the dividends-received deduction for
corporations, although distributions from Government Securities and Money Market
Funds generally are not expected to qualify.
In addition, the Funds realize capital gains and losses when they sell
securities for more or less than they paid. If total gains on sales exceed total
losses (including losses carried forward from prior years), the Fund has a net
realized capital gain. Net realized capital gains are divided into short-term
and long-term capital gains depending on how long the Fund held the security
that gave rise to the gains. The Funds' capital gain distributions consist of
long-term capital gains that are taxable at the applicable capital gains rates.
All distributions of short-term capital gains will be taxable to you as ordinary
income and included in your dividends.
You also may realize capital gains or losses when you sell Fund shares at
more or less than the price you originally paid. Likewise, exchanges from one
Fund to another represent a sale from one Fund and a purchase of another, and
may result in a gain or loss that you will need to recognize on your tax return.
Foreign shareholders may be subject to federal income tax rules that differ from
those described above.
We advise you to consult your own tax adviser regarding the particular tax
consequences of an investment in a Fund.

50
<PAGE>
DISTRIBUTION (12B-1) PLANS
- -------------------------------------------------------------------------------

All of the Funds except the Money Market Fund have adopted Distribution (12b-1)
Plans. These Plans permit each of these Funds to pay distribution and other fees
for the sale of its shares and for services provided to shareholders. Each Plan
provides that the Fund may pay distribution and service-related expenses of up
to 0.25% each year of its average daily net assets. Because these fees are paid
out of a Fund's assets on an ongoing basis, over time these fees will increase
the cost of your investment and may cost you more than paying other types of
sales charges.
These fees pay for a variety of promotional, marketing, sales, and servicing
activities associated with the distribution of Fund shares. These activities
include, but are not limited to:
o preparing, printing, and mailing prospectuses, sales literature, and
other promotional materials to prospective investors
o direct-mail solicitations
o advertising
o public relations
o compensation of sales personnel, brokers, financial planners, or others
for their assistance in selling and distributing the Funds' shares
(including personnel of Founders or of affiliates of Founders)
o payments to financial intermediaries for shareholder support services

51
<PAGE>
SHAREHOLDER AND TRANSFER AGENCY SERVICES
- -------------------------------------------------------------------------------

The Funds have entered into shareholder services agreements with Founders
pursuant to which Founders provides certain shareholder-related and transfer
agency services to the Funds. The Funds pay Founders a monthly fee for these
services. Out of this fee, Founders pays the fees charged by the Funds' transfer
agent, Investors Fiduciary Trust Company (IFTC).
Registered broker/dealers, third-party administrators of tax-qualified
retirement plans, and other entities which establish omnibus accounts with the
Funds may provide sub-transfer agency, recordkeeping, or similar services to
participants in the omnibus accounts based on the number of participants in the
entity's omnibus account. This reduces or eliminates the need for those services
to be provided by Founders and/or IFTC. In such cases, Founders is authorized to
pay the entity a sub-transfer agency or recordkeeping fee, and to be reimbursed
for such payments by the Fund. Entities receiving such fees may also receive
12b-1 fees.
In addition, Founders may from time to time make additional payments from
its revenues to securities dealers and other financial institutions that provide
shareholder services, recordkeeping, and/or other administrative services to the
Funds.

BROKERAGE ALLOCATION
- -------------------------------------------------------------------------------

Subject to the policy of seeking the best execution of orders at the most
favorable prices, sales of Fund shares may be considered as a factor in the
selection of brokerage firms to execute Fund portfolio transactions. The
Statement of Additional Information further explains the selection of brokerage
firms.

<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The Financial Highlights tables are intended to help you understand each Fund's
financial performance for the past five years (or, for the period of a Fund's
operations, if less than five years.) Certain information reflects financial
results for a single Fund share. The total returns in the table represent the
rate that an investor would have earned (or lost) on an investment in the Fund,
assuming reinvestment of all dividends and distributions.

FOUNDERS BALANCED FUND

-------------
1998
-------------
<S> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $ 11.35
-------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) ..... 0.30
Net Gains or Losses on Securities
(Both Realized and Unrealized) .... 1.27
-------------
TOTAL FROM INVESTMENT OPERATIONS .... 1.57
-------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income # ........ (0.30)
From Net Realized Gains ............. (0.43)
-------------
TOTAL DISTRIBUTIONS ................. (0.73)
-------------
Net Asset Value - End of Period ..... $ 12.19
=============
TOTAL RETURN ........................ 13.96%
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) .......................... $ 1,244,221
Net Expenses to Average Net Assets .. 0.99%
Gross Expenses to Average Net Assets 1.00%
Ratio of Net Investment Income to
Average Net Assets ................ 2.51%
Portfolio Turnover Rate ............. 211%
</TABLE>

# DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME FOR THE YEAR ENDED DECEMBER
31, 1998 AGGREGATED LESS THAN $0.01 ON A PER SHARE BASIS.

53
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

The Financial Highlights information for the three years ended December 31, 1998
has been audited by PricewaterhouseCoopers LLP, independent accountants. Another
independent accounting firm audited the prior years' information.
PricewaterhouseCoopers LLP's report, along with the Funds' financial statements,
are included in the Funds' 1998 Annual Report to Shareholders, which is
available upon request.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-------------------------------------------------------------------
1997 1996 1995 1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $ 10.61 $ 9.58 $ 8.56 $ 8.93
------------- ------------- ------------- -------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) ..... 0.29 0.28 0.28 0.20
Net Gains or Losses on Securities
(Both Realized and Unrealized) .... 1.48 1.50 2.21 (0.37)
------------- ------------- ------------- -------------
TOTAL FROM INVESTMENT OPERATIONS .... 1.77 1.78 2.49 (0.17)
------------- ------------- ------------- -------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income # ........ (0.30) (0.27) (0.28) (0.20)
From Net Realized Gains ............. (0.73) (0.48) (1.19) 0.00
------------- ------------- ------------- -------------
TOTAL DISTRIBUTIONS ................. (1.03) (0.75) (1.47) (0.20)
------------- ------------- ------------- -------------
Net Asset Value - End of Period ..... $ 11.35 $ 10.61 $ 9.58 $ 8.56
============= ============= ============= =============
TOTAL RETURN ........................ 16.90% 18.76% 29.40% (1.90%)
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) .......................... $ 942,690 $ 394,896 $ 130,346 $ 95,226
Net Expenses to Average Net Assets .. 0.99% 1.10% 1.19% 1.26%
Gross Expenses to Average Net Assets 1.01% 1.12% 1.23% --
Ratio of Net Investment Income to
Average Net Assets ................ 2.77% 3.09% 2.92% 2.37%
Portfolio Turnover Rate ............. 203% 146% 286% 258%
</TABLE>
# DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME FOR THE YEAR ENDED DECEMBER
31, 1998 AGGREGATED LESS THAN $0.01 ON A PER SHARE BASIS.

54
<PAGE>
FOUNDERS DISCOVERY FUND

<TABLE>
<CAPTION>
-----------
1998
-----------
<S> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period ....................................... $ 23.45
-----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) ............................................. (0.07)
Net Gains or Losses on Securities
(Both Realized and Unrealized) ............................................ 3.15
-----------
TOTAL FROM INVESTMENT OPERATIONS ............................................ 3.08
-----------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income .................................................. 0.00
From Net Realized Gains ..................................................... (2.16)
-----------
TOTAL DISTRIBUTIONS ......................................................... (2.16)
-----------
Net Asset Value - End of Period ............................................. $ 24.37
===========
TOTAL RETURN ................................................................ 14.19%
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) .................................................................. $ 241,124
Net Expenses to Average Net Assets .......................................... 1.55%
Gross Expenses to Average Net Assets ........................................ 1.57%
Ratio of Net Investment Income to
Average Net Assets ........................................................ (0.91%)
Portfolio Turnover Rate ..................................................... 121%
</TABLE>

FOUNDERS GOVERNMENT SECURITIES FUND

<TABLE>
<CAPTION>
----------
1998
----------
<S> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period ....................................... $ 9.28
----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) ............................................. 0.43
Net Gains or Losses on Securities
(Both Realized and Unrealized) ............................................ 0.46
----------
TOTAL FROM INVESTMENT OPERATIONS ............................................ 0.89
----------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income .................................................. (0.43)
From Net Realized Gains ..................................................... 0.00
----------
TOTAL DISTRIBUTIONS ......................................................... (0.43)
----------
Net Asset Value - End of Period ............................................. $ 9.74
==========
TOTAL RETURN ................................................................ 9.76%
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) .................................................................. $ 15,220
Net Expenses to Average Net Assets * ........................................ 1.25%
Gross Expenses to Average Net Assets
* ......................................................................... 1.28%
Ratio of Net Investment Income to
Average Net Assets * ...................................................... 4.46%
Portfolio Turnover Rate ..................................................... 90%

</TABLE>

* IN THE ABSENCE OF VOLUNTARY EXPENSE WAIVERS FROM FOUNDERS, THE RATIOS OF NET
EXPENSES TO AVERAGE NET ASSETS WOULD HAVE BEEN 1.46% (1998), 1.44% (1997), AND
1.46% (1996), THE RATIOS OF GROSS EXPENSES TO AVERAGE NET ASSETS WOULD HAVE BEEN
1.49% (1998), 1.49% (1997), AND 1.49% (1996), AND THE RATIOS OF NET INVESTMENT
INCOME TO AVERAGE NET ASSETS WOULD HAVE BEEN 4.25% (1998), 4.81% (1997) AND
4.86% (1996).

55
<PAGE>
FOUNDERS DISCOVERY FUND

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-----------------------------------------------------------
1997 1996 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period ............................ $ 24.22 $ 21.70 $ 19.88 $ 21.55
----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) .................................. 0.07 (0.20) (0.12) (0.12)
Net Gains or Losses on Securities
(Both Realized and Unrealized) ................................. 2.69 4.72 6.29 (1.55)
----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS ................................. 2.76 4.52 6.17 (1.67)
----------- ----------- ----------- -----------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income ....................................... 0.00 0.00 0.00 0.00
From Net Realized Gains .......................................... (3.53) (2.00) (4.35) 0.00
----------- ----------- ----------- -----------
TOTAL DISTRIBUTIONS .............................................. (3.53) (2.00) (4.35) 0.00
----------- ----------- ----------- -----------
Net Asset Value - End of Period .................................. $ 23.45 $ 24.22 $ 21.70 $ 19.88
=========== =========== =========== ===========
TOTAL RETURN ..................................................... 12.00% 21.20% 31.30% (7.80%)
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) ....................................................... $ 246,281 $ 247,494 $ 216,623 $ 185,310
Net Expenses to Average Net Assets ............................... 1.52% 1.58% 1.58% 1.67%
Gross Expenses to Average Net Assets ............................. 1.54% 1.59% 1.63% --
Ratio of Net Investment Income to
Average Net Assets ............................................. (0.55%) (0.85%) (0.60%) (0.62%)
Portfolio Turnover Rate .......................................... 90% 106% 118% 72%
</TABLE>

FOUNDERS GOVERNMENT SECURITIES FUND

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
--------------------------------------------------------
1997 1996 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period ............................. $ 9.04 $ 9.29 $ 8.78 $ 10.02
---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) ................................... 0.45 0.46 0.45 0.52
Net Gains or Losses on Securities
(Both Realized and Unrealized) .................................. 0.24 (0.25) 0.51 (1.26)
---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS .................................. 0.69 0.21 0.96 (0.74)
---------- ---------- ---------- ----------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income ........................................ (0.45) (0.46) (0.45) (0.50)
From Net Realized Gains ........................................... 0.00 0.00 0.00 0.00
---------- ---------- ---------- ----------
TOTAL DISTRIBUTIONS ............................................... (0.45) (0.46) (0.45) (0.50)
---------- ---------- ---------- ----------
Net Asset Value - End of Period ................................... $ 9.28 $ 9.04 $ 9.29 $ 8.78
========== ========== ========== ==========
TOTAL RETURN ...................................................... 7.90% 2.34% 11.10% (7.50%)
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) ........................................................ $ 13,259 $ 15,190 $ 20,263 $ 21,323
Net Expenses to Average Net Assets * .............................. 1.26% 1.26% 1.30% 1.34%
Gross Expenses to Average Net Assets
* ............................................................... 1.31% 1.29% 1.30% --
Ratio of Net Investment Income to
Average Net Assets * ............................................ 4.99% 5.06% 4.92% 5.52%
Portfolio Turnover Rate ........................................... 147% 166% 141% 379%

</TABLE>

56
<PAGE>
FOUNDERS GROWTH FUND

-------------
1998
-------------
<S> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $ 17.28
-------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) ..... 0.01
Net Gains or Losses on Securities
(Both Realized and Unrealized) .... 4.26
-------------
TOTAL FROM INVESTMENT OPERATIONS .... 4.27
-------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income # ........ (0.01)
From Net Realized Gains ............. (1.13)
-------------
TOTAL DISTRIBUTIONS ................. (1.14)
-------------
Net Asset Value - End of Period ..... $ 20.41
=============
TOTAL RETURN ........................ 25.04%
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) .......................... $ 2,360,180
Net Expenses to Average Net Assets .. 1.08%
Gross Expenses to Average Net Assets 1.10%
Ratio of Net Investment Income to
Average Net Assets ................ 0.05%
Portfolio Turnover Rate ............. 143%
</TABLE>

# DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME FOR THE YEAR ENDED DECEMBER
31, 1998 AGGREGATED LESS THAN $0.01 ON A PER SHARE BASIS.

FOUNDERS GROWTH AND INCOME FUND

1998
-----------
PER SHARE DATA
Net Asset Value - Beginning of Period $ 6.92
-----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) ..... 0.71
Net Gains or Losses on Securities
(Both Realized and Unrealized) .... 0.51
-----------
TOTAL FROM INVESTMENT OPERATIONS .... 1.22
-----------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income # ........ (0.11)
From Net Realized Gains ............. (0.71)
-----------
TOTAL DISTRIBUTIONS ................. (0.82)
-----------
Net Asset Value - End of Period ..... $ 7.32
===========
TOTAL RETURN ........................ 17.78%
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) .......................... $ 542,307
Net Expenses to Average Net Assets .. 1.08%
Gross Expenses to Average Net Assets 1.10%
Ratio of Net Investment Income to
Average Net Assets ................ 1.38%
Portfolio Turnover Rate ............. 259%

# DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME FOR THE YEAR ENDED DECEMBER
31, 1998 AGGREGATED LESS THAN $0.01 ON A PER SHARE BASIS.

57
<PAGE>
FOUNDERS GROWTH FUND

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-------------------------------------------------------------------
1997 1996 1995 1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $ 15.87 $ 14.77 $ 11.63 $ 12.38
------------- ------------- ------------- -------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) ..... 0.07 0.02 0.02 (0.02)
Net Gains or Losses on Securities
(Both Realized and Unrealized) .... 4.09 2.40 5.27 (0.39)
------------- ------------- ------------- -------------
TOTAL FROM INVESTMENT OPERATIONS .... 4.16 2.42 5.29 (0.41)
------------- ------------- ------------- -------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income # ........ (0.07) (0.02) (0.02) 0.00
From Net Realized Gains ............. (2.68) (1.30) (2.13) (0.34)
------------- ------------- ------------- -------------
TOTAL DISTRIBUTIONS ................. (2.75) (1.32) (2.15) (0.34)
------------- ------------- ------------- -------------
Net Asset Value - End of Period ..... $ 17.28 $ 15.87 $ 14.77 $ 11.63
============= ============= ============= =============
TOTAL RETURN ........................ 26.60% 16.57% 45.59% (3.40%)
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) .......................... $ 1,757,449 $ 1,118,323 $ 655,927 $ 307,988
Net Expenses to Average Net Assets .. 1.10% 1.19% 1.24% 1.33%
Gross Expenses to Average Net Assets 1.12% 1.20% 1.28% --
Ratio of Net Investment Income to
Average Net Assets ................ 0.48% 0.15% 0.12% (0.17%)
Portfolio Turnover Rate ............. 189% 134% 130% 172%
</TABLE>

# DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME FOR THE YEAR ENDED DECEMBER
31, 1998 AGGREGATED LESS THAN $0.01 ON A PER SHARE BASIS.

FOUNDERS GROWTH AND INCOME FUND

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-----------------------------------------------------------
1997 1996 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $ 7.23 $ 6.69 $ 6.16 $ 6.49
----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) ..... 0.13 0.09 0.09 0.06
Net Gains or Losses on Securities
(Both Realized and Unrealized) .... 1.25 1.52 1.70 (0.02)
----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS .... 1.38 1.61 1.79 0.04
----------- ----------- ----------- -----------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income # ........ (0.13) (0.09) (0.09) (0.06)
From Net Realized Gains ............. (1.56) (0.98) (1.17) (0.31)
----------- ----------- ----------- -----------
TOTAL DISTRIBUTIONS ................. (1.69) (1.07) (1.26) (0.37)
----------- ----------- ----------- -----------
Net Asset Value - End of Period ..... $ 6.92 $ 7.23 $ 6.69 $ 6.16
=========== =========== =========== ===========
TOTAL RETURN ........................ 19.40% 24.37% 29.06% 0.50%
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) .......................... $ 543,168 $ 535,866 $ 375,200 $ 311,051
Net Expenses to Average Net Assets .. 1.09% 1.15% 1.17% 1.21%
Gross Expenses to Average Net Assets 1.11% 1.16% 1.22% --
Ratio of Net Investment Income to
Average Net Assets ................ 1.84% 1.40% 1.19% 0.88%
Portfolio Turnover Rate ............. 256% 195% 235% 239%
</TABLE>

# DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME FOR THE YEAR ENDED DECEMBER
31, 1998 AGGREGATED LESS THAN $0.01 ON A PER SHARE BASIS.

58
<PAGE>
FOUNDERS INTERNATIONAL EQUITY FUND

1998
----------
PER SHARE DATA
Net Asset Value - Beginning of Period $ 12.05
----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) ..... 0.03
Net Gains or Losses on Securities
(Both Realized and Unrealized) .... 2.02
----------
TOTAL FROM INVESTMENT OPERATIONS .... 2.05
----------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income .......... 0.00
From Net Realized Gains ............. (0.07)
----------
TOTAL DISTRIBUTIONS ................. (0.07)
----------
Net Asset Value - End of Period ..... $ 14.03
==========
TOTAL RETURN ........................ 17.01%
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) .......................... $ 18,938
Net Expenses to Average Net Assets .. 1.80%
Gross Expenses to Average Net Assets 1.83%
Ratio of Net Investment Income to
Average Net Assets * .............. 0.02%
Portfolio Turnover Rate ............. 148%

* IN THE ABSENCE OF VOLUNTARY EXPENSE REIMBURSEMENTS FROM FOUNDERS, THE RATIOS
OF NET EXPENSES TO AVERAGE NET ASSETS WOULD HAVE BEEN 1.89% (1998), 2.01% (1997)
AND 2.46% (1996), THE RATIOS OF GROSS EXPENSES TO AVERAGE NET ASSETS WOULD HAVE
BEEN 1.92% (1998), 2.05% (1997) AND 2.52% (1996), AND THE RATIOS OF NET
INVESTMENT INCOME TO AVERAGE NET ASSETS WOULD HAVE BEEN (0.07%) (1998), (0.37%)
(1997) AND (0.67%) (1996).

FOUNDERS MID-CAP GROWTH FUND
1998
-----------
PER SHARE DATA
Net Asset Value - Beginning of Period $ 7.72
-----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) ..... (0.03)
Net Gains or Losses on Securities
(Both Realized and Unrealized) .... (0.11)
-----------
TOTAL FROM INVESTMENT OPERATIONS .... (0.14)
-----------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income .......... 0.00
From Net Realized Gains ............. (0.14)
-----------
TOTAL DISTRIBUTIONS ................. (0.14)
-----------
Net Asset Value - End of Period ..... $ 7.44
===========
TOTAL RETURN ........................ (1.73%)
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) .......................... $ 252,855
Net Expenses to Average Net Assets .. 1.33%
Gross Expenses to Average Net Assets 1.35%
Ratio of Net Investment Income to
Average Net Assets ................ (0.39%)
Portfolio Turnover Rate ............. 152%

59
<PAGE>
FOUNDERS INTERNATIONAL EQUITY FUND

PERIOD OF
YEARS ENDED DECEMBER 31 12/29/95
------------------------- (INCEPTION)
1997 1996 - 12/31/95
---------- ---------- ----------
PER SHARE DATA
Net Asset Value - Beginning of Period $ 11.86 $ 10.00 $ 10.00
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) ..... (0.01) (0.01) 0.00
Net Gains or Losses on Securities
(Both Realized and Unrealized) .... 1.89 1.87 0.00
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS .... 1.88 1.86 0.00
---------- ---------- ----------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income .......... 0.00 0.00 0.00
From Net Realized Gains ............. (1.69) 0.00 0.00
---------- ---------- ----------
TOTAL DISTRIBUTIONS ................. (1.69) 0.00 0.00
---------- ---------- ----------
Net Asset Value - End of Period ..... $ 12.05 $ 11.86 $ 10.00
========== ========== ==========
TOTAL RETURN ........................ 16.10% 18.60% 0.00%
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) .......................... $ 15,740 $ 10,119 $ 767
Net Expenses to Average Net Assets .. 1.85% 1.94% n/a
Gross Expenses to Average Net Assets 1.89% 2.00% n/a
Ratio of Net Investment Income to
Average Net Assets * .............. (0.21%) (0.15%) n/a
Portfolio Turnover Rate ............. 164% 71% n/a

FOUNDERS MID-CAP GROWTH FUND

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-----------------------------------------------------------
1997 1996 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $ 7.66 $ 7.05 $ 7.01 $ 7.67
----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) ..... 0.01 (0.02) 0.00 (0.02)
Net Gains or Losses on Securities
(Both Realized and Unrealized) .... 1.21 1.09 1.79 (0.36)
----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS .... 1.22 1.07 1.79 (0.38)
----------- ----------- ----------- -----------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income .......... 0.00 0.00 0.00 0.00
From Net Realized Gains ............. (1.16) (0.46) (1.75) (0.28)
----------- ----------- ----------- -----------
TOTAL DISTRIBUTIONS ................. (1.16) (0.46) (1.75) (0.28)
----------- ----------- ----------- -----------
Net Asset Value - End of Period ..... $ 7.72 $ 7.66 $ 7.05 $ 7.01
=========== =========== =========== ===========
TOTAL RETURN ........................ 16.40% 15.33% 25.70% (4.90%)
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) .......................... $ 320,186 $ 363,835 $ 388,754 $ 299,190
Net Expenses to Average Net Assets .. 1.30% 1.34% 1.29% 1.36%
Gross Expenses to Average Net Assets 1.32% 1.36% 1.35% --
Ratio of Net Investment Income to
Average Net Assets ................ (0.05%) (0.28%) 0.00% (0.27%)
Portfolio Turnover Rate ............. 110% 186% 263% 272%
</TABLE>

60
<PAGE>
FOUNDERS MONEY MARKET FUND

1998
-----------
PER SHARE DATA
Net Asset Value - Beginning of Period .............. $ 1.00
-----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) .................... 0.05
Net Gains or Losses on Securities
(Both Realized and Unrealized) ................... 0.00
-----------
TOTAL FROM INVESTMENT OPERATIONS ................... 0.05
-----------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income ......................... (0.05)
From Net Realized Gains ............................ 0.00
-----------
TOTAL DISTRIBUTIONS ................................ (0.05)
-----------
Net Asset Value - End of Period .................... $ 1.00
===========
TOTAL RETURN ....................................... 4.67%
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) ......................................... $ 91,415
Net Expenses to Average Net Assets ................. 0.85%
Gross Expenses to Average Net Assets ............... 0.87%
Ratio of Net Investment Income to
Average Net Assets ............................... 4.67%

FOUNDERS PASSPORT FUND

1998
-----------
PER SHARE DATA
Net Asset Value - Beginning of Period .............. $ 13.64
-----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) .................... 0.00
Net Gains or Losses on Securities
(Both Realized and Unrealized) ................... 1.68
-----------
TOTAL FROM INVESTMENT OPERATIONS ................... 1.68
-----------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income ......................... (0.01)
From Net Realized Gains ............................ (0.38)
-----------
TOTAL DISTRIBUTIONS ................................ (0.39)
-----------
Net Asset Value - End of Period .................... $ 14.93
===========
TOTAL RETURN ....................................... 12.50%
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) ......................................... $ 124,572
Net Expenses to Average Net Assets ................. 1.52%
Gross Expenses to Average Net Assets ............... 1.54%
Ratio of Net Investment Income to
Average Net Assets ............................... 0.09%
Portfolio Turnover Rate ............................ 34%

61
<PAGE>
FOUNDERS MONEY MARKET FUND

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-----------------------------------------------------------
1997 1996 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) .................... 0.05 0.05 0.05 0.03
Net Gains or Losses on Securities
(Both Realized and Unrealized) ................... 0.00 0.00 0.00 0.00
----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS ................... 0.05 0.05 0.05 0.03
----------- ----------- ----------- -----------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income ......................... (0.05) (0.05) (0.05) (0.03)
From Net Realized Gains ............................ 0.00 0.00 0.00 0.00
----------- ----------- ----------- -----------
TOTAL DISTRIBUTIONS ................................ (0.05) (0.05) (0.05) (0.03)
----------- ----------- ----------- -----------
Net Asset Value - End of Period .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== =========== =========== ===========
TOTAL RETURN ....................................... 4.70% 4.51% 5.10% 3.40%
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) ......................................... $ 106,073 $ 109,866 $ 125,646 $ 201,342
Net Expenses to Average Net Assets ................. 0.82% 0.86% 0.89% 0.91%
Gross Expenses to Average Net Assets ............... 0.84% 0.88% 0.89% --
Ratio of Net Investment Income to
Average Net Assets ............................... 4.77% 4.58% 5.11% 3.49%
</TABLE>

FOUNDERS PASSPORT FUND

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-----------------------------------------------------------
1997 1996 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period .............. $ 13.91 $ 11.68 $ 9.42 $ 10.53
----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) .................... 0.02 0.04 0.04 0.02
Net Gains or Losses on Securities
(Both Realized and Unrealized) ................... 0.22 2.30 2.26 (1.11)
----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS ................... 0.24 2.34 2.30 (1.09)
----------- ----------- ----------- -----------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income ......................... (0.03) (0.02) (0.04) (0.02)
From Net Realized Gains ............................ (0.48) (0.09) 0.00 0.00
----------- ----------- ----------- -----------
TOTAL DISTRIBUTIONS ................................ (0.51) (0.11) (0.04) (0.02)
----------- ----------- ----------- -----------
Net Asset Value - End of Period .................... $ 13.64 $ 13.91 $ 11.68 $ 9.42
=========== =========== =========== ===========
TOTAL RETURN ....................................... 1.70% 20.05% 24.39% (10.40%)
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) ......................................... $ 122,646 $ 177,921 $ 49,922 $ 16,443
Net Expenses to Average Net Assets ................. 1.53% 1.57% 1.76% 1.88%
Gross Expenses to Average Net Assets ............... 1.55% 1.59% 1.84% --
Ratio of Net Investment Income to
Average Net Assets ............................... 0.20% 0.40% 0.60% 0.12%
Portfolio Turnover Rate ............................ 51% 58% 37% 78%
</TABLE>

62
<PAGE>
FOUNDERS WORLDWIDE GROWTH FUND

<TABLE>
<CAPTION>
1998
-----------
<S> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period .............. $ 21.11
-----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) .................... 0.08
Net Gains or Losses on Securities
(Both Realized and Unrealized) ................... 1.90
-----------
TOTAL FROM INVESTMENT OPERATIONS ................... 1.98
-----------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income # ....................... (0.09)
From Net Realized Gains ............................ (0.94)
-----------
TOTAL DISTRIBUTIONS ................................ (1.03)
-----------
Net Asset Value - End of Period .................... $ 22.06
===========
TOTAL RETURN ....................................... 9.63%
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) ......................................... $ 272,053
Net Expenses to Average Net Assets ................. 1.47%
Gross Expenses to Average Net Assets ............... 1.49%
Ratio of Net Investment Income to
Average Net Assets ............................... 0.33%
Portfolio Turnover Rate ............................ 86%
</TABLE>

# DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME FOR THE YEAR ENDED DECEMBER
31, 1998 AGGREGATED LESS THAN $0.01 ON A PER SHARE BASIS.

63
<PAGE>
FOUNDERS WORLDWIDE GROWTH FUND

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-----------------------------------------------------------
1997 1996 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period .............. $ 21.79 $ 19.87 $ 17.09 $ 17.94
----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income or (Loss) .................... 0.02 0.10 0.09 (0.02)
Net Gains or Losses on Securities
(Both Realized and Unrealized) ................... 2.22 2.64 3.43 (0.37)
----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS ................... 2.24 2.74 3.52 (0.39)
----------- ----------- ----------- -----------
LESS DIVIDENDS AND DISTRIBUTIONS
From Net Investment Income # ....................... (0.04) (0.07) (0.09) 0.00
From Net Realized Gains ............................ (2.88) (0.75) (0.65) (0.46)
----------- ----------- ----------- -----------
TOTAL DISTRIBUTIONS ................................ (2.92) (0.82) (0.74) (0.46)
----------- ----------- ----------- -----------
Net Asset Value - End of Period .................... $ 21.11 $ 21.79 $ 19.87 $ 17.09
=========== =========== =========== ===========
TOTAL RETURN ....................................... 10.60% 13.95% 20.63% (2.20%)
RATIOS/SUPPLEMENTAL DATA
Net Assets - End of Period (000s
Omitted) ......................................... $ 308,877 $ 342,079 $ 228,595 $ 104,044
Net Expenses to Average Net Assets ................. 1.45% 1.53% 1.56% 1.66%
Gross Expenses to Average Net Assets ............... 1.47% 1.55% 1.65% --
Ratio of Net Investment Income to
Average Net Assets ............................... 0.18% 0.50% 0.61% (0.14%)
Portfolio Turnover Rate ............................ 82% 72% 54% 87%
</TABLE>

# DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME FOR THE YEAR ENDED DECEMBER
31, 1998 AGGREGATED LESS THAN $0.01 ON A PER SHARE BASIS.

64
<PAGE>
UNDERSTANDING FINANCIAL HIGHLIGHTS

The Financial Highlights tables appearing on pgs. 53-64 list financial
information for each Fund. Below are definitions of the items in the tables.

1. NET ASSET VALUE (NAV). The net asset value reflects the daily price of one
share of a Fund. We calculate this by dividing the net assets of the Fund
(assets minus liabilities) by the number of outstanding Fund shares.

2. NET INVESTMENT INCOME OR (LOSS). The total per-share income received by the
Fund from dividends and interest on securities, taking into account the
undistributed net investment income from the prior year, minus Fund
expenses. In cases where expenses exceed such income, this amount is shown
as a loss.

o DIVIDENDS AND DISTRIBUTIONS -- FROM NET INVESTMENT INCOME. The net
income per share paid by the Fund.

3. NET GAINS (OR LOSSES) ON SECURITIES, BOTH REALIZED AND UNREALIZED. The
per-share increase (or decrease) in the value of the securities held by a
Fund. A Fund realizes a gain (or loss) when it sells securities that have
appreciated (or depreciated). A gain (or loss) is UNREALIZED when the value
of the securities increases (or decreases) but the security is not sold.

o DIVIDENDS AND DISTRIBUTIONS -- FROM NET REALIZED GAINS. The per-share
amount the Fund paid to shareholders from REALIZED gains.

65
<PAGE>
4. NET ASSET VALUE -- END OF PERIOD. The value of one share of the Fund at the
end of the year.

5. NET ASSETS -- END OF PERIOD.
The value of the Fund's assets, minus liabilities, at the end of the year.

6. TOTAL RETURN. The increase or decrease in the value of an investment in the
Fund over the course of the year, expressed as a percentage. This figure
includes changes in the NAV plus dividends and capital gain distributions.
When calculating the total return, we assume that dividends and
distributions are reinvested when distributed.

7. NET EXPENSES TO AVERAGE NET ASSETS. Reflects reductions in a Fund's
expenses through the use of brokerage commissions and custodial and
transfer agent credits.

8. GROSS EXPENSES TO AVERAGE NET ASSETS. The total of a Fund's operating
expenses before expense offset arrangements and earnings credits, divided
by its average net assets for the stated period.

9. RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS. This figure,
expressed as a percentage, reflects the Fund's net investment income
divided by its average net assets for the year.

10. PORTFOLIO TURNOVER RATE. This figure is a measure of the Fund's buying and
selling activity. It is computed by dividing the Fund's total security
purchases or sales (excluding short-term securities), whichever is less, by
the average monthly market value of the Fund's securities portfolio.

66
<PAGE>
[LOGO]

FOUNDERS FUNDS

FOR FURTHER INFORMATION

More information about the Funds is available to you free of charge. The Funds'
Annual and Semiannual Reports contain the Funds' financial statements, portfolio
holdings, and historical performance. You will also find a discussion of the
market conditions and investment strategies that significantly affected the
Funds' performance in these reports. In addition, a current Statement of
Additional Information (SAI) containing more detailed information about the
Funds and their policies has been filed with the Securities and Exchange
Commission and is incorporated by reference as part of this Prospectus. You can
request copies of the Annual and Semiannual Reports and the SAI:

BY TELEPHONE Call 1-800-525-2440

IN PERSON 2930 East Third Avenue
Denver, Colorado 80206

BY MAIL P.O. Box 173655
Denver, Colorado 80217-3655

BY E-MAIL Send your request to
[email protected]

ON THE INTERNET www.founders.com or text-only
versions of fund documents can be
viewed or downloaded from the
Securities and Exchange Commission's
internet site at www.sec.gov

BY MAIL OR IN PERSON FROM THE Visit or write:
SECURITIES AND EXCHANGE COMMISSION SEC's Public Reference Section
(YOU WILL PAY A COPYING FEE) Washington, D.C. 20549-6009
1-800-SEC-0330

Founders Funds is a registered trademark and the logo is a trademark of Founders
Asset Management LLC. "Dreyfus" is the umbrella designation for the investment
products and services available from affiliates of Mellon Financial Corporation,
including Founders Asset Management LLC.
A-236-PRS (11/99)
Founders Funds' SEC File No. 811-01018