Securities Act File No. 33-849
Securities Act File No. 33-847
Securities Act File No. 33-67852
Securities Act File No. 33-56881
Securities Act File No. 02-34552
Securities Act File No. 33-91706
Securities Act File No. 33-56094
Securities Act File No. 02-91302
Securities Act File No. 02-14767
Securities Act File No. 02-48906
Securities Act File No. 33-72226
Securities Act File No. 33-05827
PILGRIM U.S. EQUITY FUNDS
PILGRIM INTERNATIONAL EQUITY FUNDS
PILGRIM INCOME FUNDS
PILGRIM EQUITY & INCOME FUNDS
Supplement dated November 16, 2000 to
the Class Q Prospectus dated November 1, 2000
1. PROPOSED FUND REORGANIZATIONS.
On November 2, 2000, the Board of Directors/Trustees of the Pilgrim Funds
approved proposals to reorganize the following Disappearing Funds into the
following Surviving Funds (the "Reorganizations"):
DISAPPEARING FUND SURVIVING FUND
Pilgrim LargeCap Leaders Fund Pilgrim MagnaCap Fund
Pilgrim MidCap Value Fund Pilgrim MagnaCap Fund
Pilgrim Global Income Fund Pilgrim Strategic Income Fund
Pilgrim Government Securities Income Fund Pilgrim GNMA Income Fund
Each proposed reorganization is subject to approval by shareholders of the
Disappearing Fund. If shareholder approval is obtained, it is expected that the
reorganizations would take place in the first quarter of 2001.
2. CHANGE IN DESCRIPTION OF INVESTMENT STRATEGIES FOR PILGRIM LARGECAP GROWTH
FUND, PILGRIM WORLDWIDE GROWTH FUND, PILGRIM INTERNATIONAL FUND, PILGRIM
INTERNATIONAL CORE GROWTH FUND, AND PILGRIM EMERGING COUNTRIES FUND.
Effective immediately, the following disclosure will replace the disclosure
under "Pilgrim LargeCap Growth Fund -- Investment Strategy" on page 16 of the
Prospectus:
The Fund normally invests at least 65% of its net assets in equity
securities of large U.S. companies that the portfolio managers believe have
above-average prospects for growth. The equity securities in which the Fund
may invest include common and preferred stock, warrants, and convertible
securities. The Fund considers a company to be large if its market
capitalization corresponds at the time of purchase to the upper 90% of the
S&P 500 Index. As of October 19th, 2000, this meant market capitalizations
in the range of $10 billion to $571 billion. Capitalization of companies in
the S&P 500 Index will change with market conditions.
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The portfolio managers emphasize a growth approach by searching for
companies that they believe are managing change advantageously and may be
poised to exceed growth expectations. The portfolio managers focus on both
a "bottom-up" analysis that evaluates the financial condition and
competitiveness of individual companies and a "top-down" thematic approach
and a sell discipline. The portfolio managers seek to identify themes that
reflect the major social, economic and technological trends that they
believe are likely to shape the future of business and commerce over the
next three to five years, and seek to provide a framework for identifying
the industries and companies they believe may benefit most. This "top-down"
approach is combined with rigorous fundamental research (a "bottom-up"
approach) to guide stock selection and portfolio structure.
Effective immediately, the following disclosure will replace the disclosure
under "Pilgrim Worldwide Growth Fund -- Investment Strategy" on page 30 of the
Prospectus:
Under normal conditions, the Fund invests at least 65% of its net assets in
equity securities of issuers located in at least three countries, one of
which may be the U.S. The Fund generally invests at least 75% of its total
assets in common and preferred stocks, warrants and convertible securities.
The Fund may invest in companies located in countries with emerging
securities markets when the portfolio managers believe they present
attractive investment opportunities.
International Component. The portfolio managers primarily use a "bottom-up"
fundamental analysis to identify stocks which they believe offer good value
relative to their peers in the same industry, sector or region. The
portfolio managers will invest at least 65% of the Fund in assets of
companies which, based upon a fundamental analysis of a company's earning
prospects, they believe will experience faster earnings per share growth
than that of other companies located in one or more of the same market,
sector, or industry. In conducting its fundamental analysis, the portfolio
managers focus on various factors, including valuation of the companies,
potential catalysts to stock price appreciation, quality of management, and
financial measures, especially cash flow and the cash flow return on
capital. They also use a "top-down" analysis to identify important themes
or issues which may affect the investment environment in certain regions or
sectors and to estimate regional market risks.
U.S. Component. The Fund normally invests in equity securities of large
U.S. companies that the portfolio managers feel have above-average
prospects for growth. The Fund considers a company to be large if its
market capitalization corresponds at the time of purchase to the upper 90%
of the S&P 500 Index. As of October 19th, 2000, this meant market
capitalizations in the range of $10 billion to $571 billion. Capitalization
of companies in the S&P 500 Index will change with market conditions.
The portfolio managers emphasize a growth approach by searching for
companies that they believe are managing change advantageously and may be
poised to exceed growth expectations. The portfolio managers focus on both
a "bottom-up" analysis that evaluates the financial condition and
competitiveness of individual companies and a "top-down" thematic approach
<PAGE>
and a sell discipline. The portfolio managers seek to identify themes that
reflect the major social, economic and technological trends that they
believe are likely to shape the future of business and commerce over the
next three to five years, and seek to provide a framework for identifying
the industries and companies they believe may benefit most. This "top-down"
approach is combined with rigorous fundamental research (a "bottom-up"
approach) to guide stock selection and portfolio structure.
From time to time, the Adviser reviews the allocation between U.S. stocks
and non-U.S. stocks in the portfolio, and may rebalance the portfolio using
factors that the Adviser deems appropriate.
Effective immediately, the following disclosure will replace the disclosure
under "Pilgrim International Fund -- Investment Strategy" on page 34 of the
Prospectus:
Under normal conditions, the Fund invests at least 65% of its net assets in
equity securities of issuers located in countries outside the U.S. The Fund
generally invests at least 75% of its total assets in common and preferred
stocks, warrants and convertible securities. The Fund may invest in
companies located in countries with emerging securities markets when the
portfolio managers believe they present attractive investment
opportunities. The Fund also may invest up to 35% of its assets in
securities of U.S. issuers, including investment-grade debt securities.
The portfolio managers primarily use "bottom-up" fundamental analysis to
identify stocks which they believe offer good value relative to their peers
in the same industry, sector or region. They also use "top-down" analysis
to identify important themes or issues which may affect the investment
environment in certain regions or sectors and to estimate regional market
risks. In conducting its fundamental analysis, the portfolio managers focus
on various factors, including valuation of the companies, catalysts to
stock price appreciation, quality of management and financial measures,
especially cash flow and the cash flow return on capital.
Effective immediately, the following disclosure will replace the disclosure
under "Pilgrim International Core Growth Fund -- Investment Strategy" on page 36
of the Prospectus:
Under normal conditions, the Fund invests at least 65% of its net assets in
equity securities of issuers located in countries outside the U.S. The Fund
generally invests at least 75% of its total assets in common and preferred
stocks, warrants and convertible securities. The Fund may invest in
companies located in countries with emerging securities markets when the
portfolio managers believe they present attractive investment
opportunities. The Fund also may invest up to 35% of its assets in
securities of U.S. issuers, including investment-grade debt securities.
In pursuing the Fund's investment strategy, the portfolio managers
primarily use a "bottom-up" fundamental analysis to identify stocks which
they believe offer good value relative to their peers in the same industry,
sector or region. The portfolio managers will invest at least 65% of the
Fund in assets of companies which, based upon a fundamental analysis of a
company's earning prospects, they believe will experience faster earnings
per share growth than that of other companies located in one or more of the
same market, sector, or industry. In conducting its fundamental analysis,
<PAGE>
the portfolio managers focus on various factors, including valuation of the
companies, potential catalysts to stock price appreciation, quality of
management, and financial measures, especially cash flow and the cash flow
return on capital. They also use a "top-down" analysis to identify
important themes or issues which may affect the investment environment in
certain regions or sectors and to estimate regional market risks.
Effective immediately, the following disclosure will replace the disclosure
under "Pilgrim Emerging Countries Fund -- Investment Strategy" on page 40 of the
Prospectus:
The Fund invests at least 65% of its net assets in securities of issuers
located in at least three countries with emerging securities markets.
Countries with emerging securities markets are those countries which
generally are considered to be emerging market countries by the
international financial community.
The Fund may invest up to 35% of its total assets in securities of U.S. and
other developed market issuers, including investment-grade debt securities
of U.S. issuers. Under normal conditions, the Fund invests at least 75% of
its total assets in common and preferred stocks, warrants and convertible
securities.
In selecting securities of issuers located in emerging market countries,
the Adviser uses a "bottom-up" fundamental analysis to identify companies
which it believes have good earnings growth prospects and that can be
bought at a price which seems reasonable. To help in this process, the
Adviser scores the emerging markets stocks on a wide range of quantitative
and qualitative measures, with particular attention paid to long-term and
short-term earnings growth prospects and valuation measures. The Adviser
seeks securities of emerging market issuers which are relatively liquid and
covered by professional securities analysts.
In selecting stocks in developed markets, the portfolio managers seek the
most attractive opportunities in such markets. For such securities, the
portfolio managers use "bottom-up" analysis to choose companies which offer
good value relative to their peers in the same industry, sector or region.
They also use "top-down" analysis to identify important themes or issues
which may affect the investment environment in certain regions or sectors
and to estimate regional market risks. In their conducting their
fundamental analysis, the portfolio managers focus on various matters,
including valuation of the companies, potential catalysts to stock price
appreciation, quality of management, and financial measures, especially
cash flow and cash flow return on capital.
The Fund may also lend portfolio securities on a short-term or long-term
basis, up to 30% of its total assets.
3. EXCHANGES
Effective November 6, 2000, the following disclosure supplements the
disclosure under "Shareholder Guide -- Transaction Policies -- Exchanges" on
page 62 of the Prospectus:
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You may also exchange shares of a Fund for shares of the same class of any
ING Fund, without paying any additional sales charge. Shares subject to a
CDSC will continue to age from the date that the original shares were
purchased.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
