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. 333-33445
Securities Act File No. 02-14767
PILGRIM FUNDS
Supplement dated September 1, 2000
to the Class A, B, C, M and T
U.S. Equity Funds and Equity & Income Funds Prospectus dated July 31, 2000
(This Supplement supercedes the supplement dated July 31, 2000.)
1. ACQUISITION OF RELIASTAR FINANCIAL CORP. BY ING GROEP N.V.
On September 1, 2000, ING Groep N.V. (NYSE: ING) acquired ReliaStar Financial
Corp. (NYSE: RLR), the indirect parent company of Pilgrim Investments, Inc.
("Pilgrim Investments"), Adviser to the Funds, and Pilgrim Securities, Inc.
("Pilgrim Securities") Distributor to the Funds. ING Group is a global financial
institution active in the fields of insurance, banking, and asset management in
more than 65 countries, with almost 100,000 employees.
Pilgrim Investments and Pilgrim Securities are expected to remain intact after
the acquisition. Pilgrim Investments does not currently anticipate that there
will be any changes in the investment personnel primarily responsible for
management of the Funds as a result of the acquisition.
Under the provisions of the advisory contracts between the Pilgrim Funds and
Pilgrim Investments, those agreements might be deemed to terminate automatically
at the time of the acquisition. As a result, the Board of Directors/Trustees and
the shareholders of the Funds approved new advisory contracts between the
Pilgrim Funds and Pilgrim Investments, which took effect immediately after the
acquisition.
2. TERMINATION OF SUB-ADVISER FOR PILGRIM LARGECAP GROWTH FUND AND PILGRIM
CONVERTIBLE FUND.
Effective October 1, 2000, Nicholas-Applegate Capital Management ("NACM") will
no longer serve as Sub-Adviser of Pilgrim LargeCap Growth Fund ("LargeCap Growth
Fund") and Pilgrim Convertible Fund ("Convertible Fund") (collectively, the
"Funds"). NACM currently serves as a Sub-Adviser to Pilgrim Investments, which
is the Adviser for those Funds. Effective October 1, 2000, Pilgrim Investments
will manage directly these Funds under its existing Investment Management
Agreement. The fees payable to Pilgrim Investments for serving as Adviser will
not change.
Effective October 1, 2000, Mary Lisanti, Executive Vice President and Chief
Investment Officer -- Domestic Equities of Pilgrim Investments, and Thomas J.
Sullivan will share responsibility for the day-to-day management of LargeCap
Growth Fund. The biography for Ms. Lisanti is set forth in the Prospectus.
Thomas J. Sullivan has been a Partner and Equity Trader for First NY Securities,
LLC in New York since April, 2000. From April, 1994 to March, 2000, Mr. Sullivan
was Vice President and portfolio manager at NACM and part of the team that
managed LargeCap Growth Fund. Mr. Sullivan was also the co-manager of the
Pilgrim MidCap Growth Fund during that time and was the lead manager of the
Nicholas-Applegate US Growth Equity Offshore Fund.
<PAGE>
Effective October 1, 2000, Andrew Chow will be primarily responsible for the
day-to-day management of Convertible Fund. Prior to joining Pilgrim, Mr. Chow
was the portfolio manager of the Conseco Convertible Securities Fund since 1998.
He joined Conseco in 1991 where he was also responsible for managing convertible
securities accounts.
Following the assumption of portfolio management duties by Pilgrim Investments,
portfolio turnover may be higher than usual in connection with the potential
restructuring of the holdings of these Funds to reflect the management style of
Pilgrim Investments. Such potential restructuring may result in transactional
costs for the Funds and may result in accelerated capital gain distributions as
a result of the turnover.
3. AMENDMENT TO ADVISORY AGREEMENT FOR PILGRIM GROWTH OPPORTUNITIES FUND AND
PILGRIM SMALLCAP OPPORTUNITIES FUND
At meetings held on August 25, 2000 and August 29, 2000, respectively,
shareholders of Pilgrim Growth Opportunities Fund ("Growth Opportunities Fund")
and Pilgrim SmallCap Opportunities Fund ("SmallCap Opportunities Fund") approved
an amendment to the Advisory Agreements of the Funds with Pilgrim Investments.
The amendment has the effect of increasing the current management fee that each
Fund pays of 0.75% per annum of each Fund's average daily net assets to 0.95%
for Growth Opportunities Fund, and 1.00% for SmallCap Opportunities Fund.
The disclosure for Growth Opportunities Fund and SmallCap Opportunities Fund in
the Prospectus section entitled "What You Pay to Invest" is revised to reflect
the following:
OPERATING EXPENSES PAID EACH YEAR BY THE FUNDS (AS A % OF AVERAGE NET ASSETS)(1)
Growth
Opportunities Management Other Operating
Fund Fee 12b-1 Fee Expenses Expenses
---- --- --------- -------- --------
Class A 0.95% 0.30% 0.34% 1.59%
Class B 0.95% 1.00% 0.35% 2.30%
Class C 0.95% 1.00% 0.35% 2.30%
Class M N/A N/A N/A N/A
Class T 0.95% 0.95% 0.33% 2.23%
SmallCap
Opportunities Management Other Operating
Fund Fee 12b-1 Fee Expenses Expenses
---- --- --------- -------- --------
Class A 1.00% 0.30% 0.38% 1.68%
Class B 1.00% 1.00% 0.40% 2.40%
Class C 1.00% 1.00% 0.43% 2.43%
Class M N/A N/A N/A N/A
Class T 1.00% 0.95% 0.36% 2.31%
EXAMPLES
The following examples are intended to help compare the cost of investing in the
Pilgrim Funds with the cost of investing in other mutual funds. Each example
assumes that you invested $10,000, reinvested all your dividends, the Fund
(1) These tables show the estimated operating expenses for each Fund by class
as a ratio of expenses to average daily net assets. These expenses are
based on each Fund's actual operating expenses for its most recent complete
fiscal year, revised to reflect the new advisory fees of the Funds.
-2-
<PAGE>
earned an average annual return of 5%, and annual operating expenses remained at
the current level. Keep in mind this is only an estimate -- actual expenses and
performance may vary.
GROWTH OPPORTUNITIES FUND
<TABLE>
<CAPTION>
If you sell your shares If you don't sell your shares
-------------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
------ ------- ------- -------- ------ ------- ------- --------
Class A $ 727 $ 1,048 $ 1,391 $ 2,356 $ 727 $ 1,048 $ 1,391 $ 2,356
Class B $ 733 $ 1,018 $ 1,430 $ 2,458 $ 233 $ 718 $ 1,230 $ 2,458
Class C $ 333 $ 718 $ 1,230 $ 2,636 $ 333 $ 718 $ 1,230 $ 2,636
Class T $ 626 $ 897 $ 1,195 $ 2,403 $ 226 $ 697 $ 1,195 $ 2,403
SMALLCAP OPPORTUNITIES FUND
If you sell your shares If you don't sell your shares
-------------------------------------------- ------------------------------------------
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
------ ------- ------- -------- ------ ------- ------- --------
Class A $ 736 $ 1,074 $ 1,435 $ 2,448 $ 736 $ 1,074 $ 1,435 $ 2,448
Class B $ 743 $ 1,048 $ 1,480 $ 2,558 $ 243 $ 748 $ 1,280 $ 2,558
Class C $ 346 $ 758 $ 1,296 $ 2,766 $ 246 $ 758 $ 1,296 $ 2,766
Class T $ 634 $ 921 $ 1,235 $ 2,488 $ 234 $ 721 $ 1,235 $ 2,488
</TABLE>
* * *
Please be advised of the new address of the Pilgrim Funds, effective
immediately:
ING Pilgrim Funds
7337 E. Doubletree Ranch Road
Scottsdale, Arizona 85258
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
