<PAGE> 1
PACIFIC HORIZON FUNDS, INC.
AGGRESSIVE GROWTH, ASSET ALLOCATION, BLUE CHIP, CAPITAL INCOME AND INTERNATIONAL
EQUITY FUNDS
SUPPLEMENT DATED NOVEMBER 16, 1998 TO PROSPECTUS DATED JULY 1, 1998
THIS SUPPLEMENT PROVIDES NEW AND ADDITIONAL INFORMATION BEYOND THAT CONTAINED
IN THE PROSPECTUS, AND SHOULD BE READ IN CONJUNCTION WITH SUCH PROSPECTUS.
1. A SHARE CHANGES
The Maximum Sales Load Imposed on Purchases (as a percentage of offering
price) of A Shares (also known as the "front-end sales load") of the Aggressive
Growth, Asset Allocation, Blue Chip, Capital Income and International Equity
Funds is changed to 5.75% effective for all purchases made on or after November
16, 1998. This front-end sales load may decrease as the amount you invest
increases, as shown in the following chart:
<TABLE>
<CAPTION>
DEALER'S
SALES CHARGE (AS A SALES CHARGE (AS A REALLOWANCE (AS A
AGGREGATE INVESTMENT* % OF OFFERING PRICE) % OF NET ASSET VALUE) % OF OFFERING PRICE)***
- --------------------- -------------------- --------------------- -----------------------
<S> <C> <C> <C>
Less than $50,000.................. 5.75% 6.10% 5.00%
$50,000 but less than $100,000..... 4.50% 4.71% 3.75%
$100,000 but less than $250,000.... 3.50% 3.63% 2.75%
$250,000 but less than $500,000.... 2.50% 2.56% 2.00%
$500,000 but less than
$1,000,000....................... 2.00% 2.04% 1.75%
More than $1,000,000**............. 0.00% 0.00% 0.00%
</TABLE>
- ---------------
* When buying A Shares in Pacific Horizon Funds, your aggregate investment
determines the front-end sales load that you pay. Your aggregate investment
is the accumulation of your immediate investment along with shares that you
beneficially own in any class of any Pacific Horizon Fund (except the Prime,
Treasury, Government, Treasury Only, Tax-Exempt Money and California
Tax-Exempt Money Market Funds) and/or any class of any Time Horizon Fund.
** There is no initial sales charge on purchases of A Shares of $1,000,000 or
more. However, unless you participated in the Bank of America Daily
Advantage(R) or Advantage Plus(TM) programs, a contingent deferred sales
charge ("CDSC") will be imposed as follows: 1% on redemptions made within 1
year of purchases made on or after November 16, 1998, declining to .50% in
the second year, and eliminated thereafter, or 1% on redemptions made within
18 months of purchases made before November 16, 1998.
*** Dealer reallowance may be changed periodically. Dealers of record will be
paid commissions on purchases above $1 million in an amount equal to (i)
1.00% on sales up to $3 million; (ii) plus 0.50% on the next $47 million;
(iii) plus 0.25% on sales over $50 million, which amounts may be subject to
reimbursement out of the CDSC if such shares are redeemed within 2 years of
purchase. From time to time, the Funds' distributor will make or allow
additional payments or promotional incentives in the form of cash or other
compensation.
<PAGE> 2
2. B SHARE CHANGES
There is a maximum investment limit of $250,000 in B Shares. B Shares are
subject to a Maximum Contingent Deferred Sales Load (as a percentage of original
purchase price or redemption proceeds, whichever is lower) (also known as the
"contingent deferred sales charge" or "CDSC") of 5.00%. B Shares that are
redeemed within 6 years of purchase are subject to the CDSC at the rates set
forth below:
<TABLE>
<CAPTION>
CDSC (AS A % OF THE DOLLAR
YEAR SINCE PURCHASE* AMOUNT SUBJECT TO THE CDSC)
-------------------- ---------------------------
<S> <C>
First....................................................... 5.00%
Second...................................................... 4.00%
Third....................................................... 3.00%
Fourth...................................................... 3.00%
Fifth....................................................... 2.00%
Sixth....................................................... 1.00%
Seventh and above........................................... 0.00%
</TABLE>
- ---------------
* The time period during which Y Shares of the Pacific Horizon Prime Fund
acquired through an exchange are held is not included in the calculation of
determining the amount of time that has lapsed in calculating a CDSC
liability.
B Shares will automatically convert to A Shares at the end of the month in
which the eighth anniversary of the date of purchase occurs unless the B Shares
have been exchanged for Y Shares of the Pacific Horizon Prime Fund.
3. HYPOTHETICAL EXAMPLE TABLE CHANGES
As a result of the changes discussed above, there are certain changes to
the hypothetical example tables found in the Prospectus on pages 4 through 9.
These changes are described below.
Information related to A Shares and B Shares in the hypothetical example
tables in the Prospectus is deleted and replaced with the following:
<TABLE>
<CAPTION>
AFTER AFTER AFTER AFTER
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Aggressive Growth Fund -- A Shares(1).................... $72 $101 $133 $222
Aggressive Growth Fund -- B Shares, assuming complete
redemption at the end of the period(2)................. $72 $101 $141 $235(3)
Aggressive Growth Fund -- B Shares, assuming no
redemption............................................. $22 $ 69 $118 $235(3)
Asset Allocation Fund -- A Shares(1)..................... $67 $ 88 $111 $176
Asset Allocation Fund -- B Shares, assuming complete
redemption at the end of the period(2)................. $68 $ 89 $119 $190(3)
Asset Allocation Fund -- B Shares, assuming no
redemption............................................. $18 $ 56 $ 96 $190(3)
Blue Chip Fund -- A Shares(1)............................ $69 $ 93 $119 $192
Blue Chip Fund -- B Shares, assuming complete redemption
at the end of the period(2)............................ $70 $ 92 $127 $206(3)
Blue Chip Fund -- B Shares, assuming no redemption....... $20 $ 61 $104 $206(3)
Capital Income Fund -- A Shares (1)...................... $68 $ 91 $116 $186
Capital Income Fund -- B Shares, assuming complete
redemption at the end of the period(2)................. $69 $ 91 $124 $199(3)
</TABLE>
2
<PAGE> 3
<TABLE>
<CAPTION>
AFTER AFTER AFTER AFTER
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Capital Income Fund -- B Shares, assuming no
redemption............................................. $19 $ 59 $101 $199(3)
International Equity Fund -- A Shares(1)................. $69 $ 94 $121 $197
International Equity Fund -- B Shares, assuming complete
redemption at the end of the period(2)................. $70 $ 94 $129 $210(3)
International Equity Fund -- B Shares, assuming no
redemption............................................. $20 $ 62 $106 $210(3)
</TABLE>
- ---------------
(1) Assumes deduction at time of purchase of maximum applicable front-end sales
load.
(2) Assumes deduction at redemption of maximum applicable contingent deferred
sales charge.
(3) Assumes conversion of B Shares to A Shares after 8 years.
Information related to K Shares in the hypothetical example tables in the
Prospectus is not changed.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
PHF2002
3
<PAGE> 4
PACIFIC HORIZON FUNDS, INC.
CALIFORNIA MUNICIPAL BOND, FLEXIBLE INCOME, INTERMEDIATE BOND, NATIONAL
MUNICIPAL BOND, SHORT-TERM GOVERNMENT AND U.S. GOVERNMENT SECURITIES FUNDS
SUPPLEMENT DATED NOVEMBER 16, 1998 TO PROSPECTUS DATED JULY 1, 1998
THIS SUPPLEMENT PROVIDES NEW AND ADDITIONAL INFORMATION BEYOND THAT CONTAINED
IN THE PROSPECTUS, AND SHOULD BE READ IN CONJUNCTION WITH SUCH PROSPECTUS.
1. A SHARE CHANGES -- CALIFORNIA MUNICIPAL BOND, FLEXIBLE INCOME, NATIONAL
MUNICIPAL BOND AND U.S.
GOVERNMENT SECURITIES FUNDS
The Maximum Sales Load Imposed on Purchases (as a percentage of offering
price) of A Shares (also known as the "front-end sales load") of the California
Municipal Bond, Flexible Income, National Municipal Bond and U.S. Government
Securities Funds is changed to 4.75% effective for all purchases made on or
after November 16, 1998. This front-end sales load may decrease as the amount
you invest increases, as shown in the following chart:
<TABLE>
<CAPTION>
DEALER'S
SALES CHARGE (AS A SALES CHARGE (AS A REALLOWANCE (AS A
AGGREGATE INVESTMENT * % OF OFFERING PRICE) % OF NET ASSET VALUE) % OF OFFERING PRICE)***
- ---------------------- -------------------- --------------------- -----------------------
<S> <C> <C> <C>
Less than $50,000..................... 4.75% 5.00% 4.25%
$50,000 but less than $100,000........ 4.50% 4.71% 4.00%
$100,000 but less than $250,000....... 3.50% 3.63% 3.00%
$250,000 but less than $500,000....... 2.50% 2.56% 2.25%
$500,000 but less than $1,000,000..... 2.00% 2.04% 1.75%
More than $1,000,000**................ 0.00% 0.00% 0.00%
</TABLE>
- ---------------
* When buying A Shares in Pacific Horizon Funds, your aggregate investment
determines the front-end sales load that you pay. Your aggregate investment
is the accumulation of your immediate investment along with shares that you
beneficially own in any class of any Pacific Horizon Fund (except the Prime,
Treasury, Government, Treasury Only, Tax-Exempt Money and California
Tax-Exempt Money Market Funds) and/or any class of any Time Horizon Fund.
** There is no initial sales charge on purchases of A Shares of $1,000,000 or
more. However, unless you participated in the Bank of America Daily
Advantage(R) or Advantage Plus(TM) programs, a contingent deferred sales
charge ("CDSC") will be imposed as follows: 1% on redemptions made within 1
year of purchases made on or after November 16, 1998, declining to .50% in
the second year, and eliminated thereafter, or 1% on redemptions made within
18 months of purchases made before November 16, 1998.
*** Dealer reallowance may be changed periodically. Dealers of record will be
paid commissions on purchases above $1 million in an amount equal to (i)
1.00% on sales up to $3 million; (ii) plus 0.50% on the next $47 million;
(iii) plus 0.25% on sales over $50 million, which amounts may be subject to
reimbursement out of the CDSC if such shares are redeemed within 2 years of
purchase. From time to time, the Funds' distributor will make or allow
additional payments or promotional incentives in the form of cash or other
compensation.
<PAGE> 5
2. A SHARE CHANGES -- INTERMEDIATE BOND AND SHORT-TERM GOVERNMENT FUNDS
The Maximum Sales Load Imposed on Purchases (as a percentage of offering
price) of A Shares (also known as the "front-end sales load") of the
Intermediate Bond Fund is changed to 3.25%, effective for all purchases made on
or after November 16, 1998. In addition, a front-end sales load will be added to
the Short-Term Government Fund at 3.25%, effective for all purchases made on or
after November 16, 1998. The front-end sales load may decrease as the amount you
invest increases, as shown in the following chart:
<TABLE>
<CAPTION>
DEALER'S
SALES CHARGE (AS A SALES CHARGE (AS A REALLOWANCE (AS A
AGGREGATE INVESTMENT * % OF OFFERING PRICE) % OF NET ASSET VALUE) % OF OFFERING PRICE)***
- ---------------------- -------------------- --------------------- -----------------------
<S> <C> <C> <C>
Less than $100,000.................... 3.25% 3.36% 3.00%
$100,000 but less than $250,000....... 2.50% 2.56% 2.25%
$250,000 but less than $500,000....... 2.00% 2.04% 1.75%
$500,000 but less than $1,000,000..... 1.50% 1.53% 1.25%
More than $1,000,000**................ 0.00% 0.00% 0.00%
</TABLE>
- ---------------
* When buying A Shares in Pacific Horizon Funds, your aggregate investment
determines the front-end sales load that you pay. Your aggregate investment
is the accumulation of your immediate investment along with shares that you
beneficially own in any class of any Pacific Horizon Fund (except the Prime,
Treasury, Government, Treasury Only, Tax-Exempt Money and California
Tax-Exempt Money Market Funds) and/or any class of any Time Horizon Fund.
** There is no initial sales charge on purchases of A Shares of $1,000,000 or
more. However, unless you participated in the Bank of America Daily
Advantage(R) or Advantage Plus(TM) programs, a contingent deferred sales
charge ("CDSC") will be imposed as follows: 1% on redemptions made within 1
year of purchases made on or after November 16, 1998, declining to .50% in
the second year, and eliminated thereafter, or 1% on redemptions made within
18 months of purchases made before November 16, 1998.
*** Dealer reallowance may be changed periodically. Dealers of record will be
paid commissions on purchases above $1 million in an amount equal to (i)
1.00% on sales up to $3 million; (ii) plus 0.50% on the next $47 million;
(iii) plus 0.25% on sales over $50 million, which amounts may be subject to
reimbursement out of the CDSC if such shares are redeemed within 2 years of
purchase. From time to time, the Funds' distributor will make or allow
additional payments or promotional incentives in the form of cash or other
compensation.
3. B SHARE CHANGES -- CALIFORNIA MUNICIPAL BOND FUND
There is a maximum investment limit of $250,000 in B Shares. B Shares are
subject to a Maximum Contingent Deferred Sales Load (as a percentage of original
purchase price or redemption proceeds, whichever is lower) (also known as the
"contingent deferred sales charge" or "CDSC") of 5.00%. B Shares that are
redeemed within 6 years of purchase are subject to the CDSC at the rates set
forth below:
<TABLE>
<CAPTION>
CDSC (AS A % OF THE DOLLAR
YEAR SINCE PURCHASE* AMOUNT SUBJECT TO THE CDSC)
-------------------- ---------------------------
<S> <C>
First....................................................... 5.00%
Second...................................................... 4.00%
Third....................................................... 3.00%
Fourth...................................................... 3.00%
Fifth....................................................... 2.00%
Sixth....................................................... 1.00%
Seventh and above........................................... 0.00%
</TABLE>
2
<PAGE> 6
- ---------------
* The time period during which Y Shares of the Pacific Horizon Prime Fund
acquired through an exchange are held is not included in the calculation of
determining the amount of time that has lapsed in calculating a CDSC
liability.
B Shares automatically convert to A Shares at the end of the month in which
the eighth anniversary of the date of purchase occurs unless the B Shares have
been exchanged for Y Shares of the Pacific Horizon Prime Fund.
In the sixth line of the first full paragraph on page 51 of the Prospectus
"preceding 5 years" is replaced with "preceding 6 years." In the eighth line of
the next paragraph on the same page "2.00%" is replaced with "3.00%."
4. HYPOTHETICAL EXAMPLE TABLE CHANGES
As a result of the changes discussed above, there are certain changes to
the hypothetical example tables found in the Prospectus on pages 4 through 10.
These changes are described below.
Information related to A Shares and B Shares in the hypothetical example
tables in the Prospectus is deleted and replaced with the following:
<TABLE>
<CAPTION>
AFTER AFTER AFTER AFTER
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
California Municipal Bond Fund -- A Shares(1)............ $56 $75 $ 95 $153
California Municipal Bond Fund -- B Shares, assuming
complete redemption at the end of the period(2)........ $67 $84 $113 $175(3)
California Municipal Bond Fund -- B Shares, assuming no
redemption............................................. $17 $52 $ 90 $175(3)
Flexible Income Fund -- A Shares(1)...................... $56 $73 $ 92 $147
Intermediate Bond Fund -- A Shares(1).................... $41 $60 $ 80 $140
National Municipal Bond Fund -- A Shares(1).............. $52 $63 $ 74 $107
Short-Term Government Fund -- A Shares(1)................ $35 $40 $ 46 $ 63
U.S. Government Securities -- A Shares(1)................ $55 $70 $ 87 $136
</TABLE>
- ---------------
(1) Assumes deduction at time of purchase of maximum applicable front-end sales
load.
(2) Assumes deduction at redemption of maximum applicable contingent deferred
sales charge.
(3) Assumes conversion of B Shares to A Shares after 8 years.
Information related to K Shares in the hypothetical example tables in the
Prospectus is not changed.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
PHF2001
3
<PAGE> 7
PACIFIC HORIZON FUNDS, INC.
CALIFORNIA MUNICIPAL BOND AND NATIONAL MUNICIPAL BOND FUNDS
SUPPLEMENT DATED NOVEMBER 16, 1998 TO PROSPECTUS DATED JULY 1, 1998
THIS SUPPLEMENT PROVIDES NEW AND ADDITIONAL INFORMATION BEYOND THAT CONTAINED IN
THE PROSPECTUS,
AND SHOULD BE READ IN CONJUNCTION WITH SUCH PROSPECTUS.
K SHARE CHANGES -- CALIFORNIA MUNICIPAL BOND AND NATIONAL MUNICIPAL BOND FUNDS
K Shares of the California Municipal Bond and National Municipal Bond Funds
are no longer offered.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
PHF2004
