Rule 497(e)
File Nos. 2-80886
811-3626
SUPPLEMENT DATED JANUARY 4, 2000 TO THE
PROSPECTUS OF CITIZENS FUNDS DATED
NOVEMBER 1, 1999
This Supplement relates to the Citizens Small Cap Index Fund. The fund
started operations on December 28, 1999.
On page 5, under "Citizens Small Cap Index Fund - Principal Investment
Strategies," the second paragraph is deleted in its entirety and the following
is substituted:
During normal market conditions, at least 65% of the companies that make
up the Citizens Small Cap Index will have market capitalizations in the
range of $50 million to $3.5 billion at the time they are selected for the
Index. The fund tries to achieve a 95% correlation, before expenses, with
the performance of the Citizens Small Cap Index. Initially, the fund will
be of a relatively small size so that it will not be practical for the
fund to invest in all of the companies that make up the Citizens Small Cap
Index. Once the fund reaches a size where it is practical to do so, the
fund expects that under normal market conditions it will maintain at least
an 80% match between the fund's equity holdings and the composition of the
Citizens Small Cap Index.
On page 9, the following information is added at the end of the paragraph
entitled "Passive Investing Risk" (which begins on page 8):
For some time after it starts operations, the Citizens Small Cap Index
Fund may have a more difficult time matching the performance of the
Citizens Small Cap Index, because during that period the fund will not be
invested in many of the companies that make up the Index. In addition, the
fund may delay buying some stocks when the fund's managers believe that
their market prices are inflated as a result of temporary market factors
(e.g., where the market prices significantly exceed recent average
prices). This trading approach could hurt the fund's performance if the
prices of those stocks go up and the fund buys them at even higher prices.
<PAGE>
On pages 18 and 20, the following replaces the information relating to the
Citizens Small Cap Index Fund contained in the tables:
Annual Fund Operating Expenses
(expenses that are deducted from assets)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------ ------------- ------------ ----------- -------------- ---------- -----------
Total Annual
Management Distribution Other Operating Fee Net
Fund Fees Fees Expenses Expenses Waiver* Expenses
- ------------------------------ ------------- ------------ ----------- -------------- ---------- -----------
Citizens Small Cap Index Fund
- ------------------------------ ------------- ------------ ----------- -------------- ---------- -----------
Standard shares 0.50% 0.25% 5.93% 6.68% 5.13% 1.55%
- ------------------------------ ------------- ------------ ----------- -------------- ---------- -----------
</TABLE>
Example
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
- ------------------------------ ------------------- ------------------ ----------------- -------------------
Fund One Year Three Years Five Years Ten Years
- ------------------------------ ------------------- ------------------ ----------------- -------------------
Citizens Small Cap Index Fund
- ------------------------------ ------------------- ------------------ ----------------- -------------------
Standard shares $158 $1,954 $3,203 $6,145
- ------------------------------ ------------------- ------------------ ----------------- -------------------
</TABLE>
On page 23, under "Citizens Small Cap Index Fund," the third sentence of
the first paragraph is deleted and the following is substituted:
During normal market conditions, at least 65% of the companies that make
up the Citizens Small Cap Index will have market capitalizations in the
range of $50 million to $3.5 billion at the time they are selected for the
Index.
On page 23, under "Citizens Small Cap Index Fund," the first sentence of
the second paragraph is deleted and the following is substituted:
The fund tries to achieve a 95% correlation, before expenses, with the
performance of the Index.
On page 23 (carrying over to page 24), under "Citizens Small Cap Index
Fund," the following sentence is added immediately prior to the last
sentence of the second paragraph:
Once the fund reaches a size where it is practical to do so, the fund
expects that under normal market conditions it will maintain at least an
80% match between the fund's equity holdings and the composition of the
Citizens Small Cap Index.
On page 24, the last sentence of the first full paragraph is deleted and
the following is substituted:
The fund's turnover rate is not expected to exceed 35% annually.
