Supplement dated September 8, 1999 to the
Annual Report for the Pilgrim Funds
Dated June 30, 1999
Classes: A, B, C and M
The Financial Highlights for a Pilgrim Convertible Fund Class A Share
Outstanding Throughout the Three Months Ended June 30, 1999 appearing on page 98
of the Annual Report is revised as follows:
Gross expenses prior to expense reimbursement are 1.45%.
NOTE 8 -- EXPENSE WAIVERS in the Notes to Financial Statements as of June 30,
1999 appearing on page 106 of the Annual Report is replaced with the following:
NOTE 8 -- EXPENSE WAIVERS
For the following Funds, the Investment Manager has voluntarily agreed to limit
expenses, excluding interest, taxes, brokerage and extraordinary expenses to the
levels listed below:
Class A Class B Class C Class M
------- ------- ------- -------
LargeCap Leaders 1.75% 2.50% 2.50% 2.25%
LargeCap Growth 1.60% 2.25% 2.25% --
MidCap Value 1.75% 2.50% 2.50% 2.25%
MidCap Growth 1.60% 2.25% 2.25% --
SmallCap Growth 1.95% 2.60% 2.60% --
Worldwide Growth 1.85% 2.50% 2.50% --
International Core Growth 1.95% 2.60% 2.60% --
International SmallCap Growth 1.95% 2.60% 2.60% --
Emerging Countries 2.25% 2.90% 2.90% --
Asia-Pacific Equity 2.00% 2.75% -- 2.50%
Government Securities Income (1) (1) (1) (1)
Strategic Income 0.95% 1.35% 1.35% --
High Yield(2) 1.00% 1.75% 1.75% 1.50%
High Yield II 1.10% 1.75% 1.75% --
Balanced 1.60% 2.25% 2.25% --
Convertible 1.60% 2.25% 2.25% --
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(1) The Investment Manager has agreed to reimburse the Government Securities
Income Fund for all gross operating expenses and costs of the Fund, excluding
any interest, taxes, brokerage commissions, amortization of organizational
expenses, extraordinary expenses, and certain distribution fees which exceed
1.50% of the Fund's daily average net assets on the first $40 million of net
assets and 1.00% of average daily net assets in excess of $40 million for any
one fiscal year. The expense limitations cannot be changed without shareholder
approval.
(2) The current limits will continue through December 31, 1999, at which time
they will change to 1.10% for Class A, 1.85% for Class B and C and 1.60% for
Class M through at least June 30, 2001.
