BENHAM CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS
Supplement Dated March 31, 1996
to the Prospectus and Statement of
Additional Information Dated October 27, 1995
1. The name of the "Benham California Tax-Free Short-Term Fund" has been
changed to the "Benham California Tax-Free Limited-Term Fund." The Fund
has not changed its investments; the name change is designed to better
reflect the Fund's weighted average maturity categorization.
2. The following individual has been appointed to the Board of Trustees of the
Funds in addition to those listed in the current Prospectus:
ALBERT A. EISENSTAT, independent trustee (1995). Mr. Eisenstat is an
independent director of each of Commercial Metals co. (1982), Sungard Data
Systems (1991) and Business Objects S/A (1994). Previously, he served as
vice president of corporate development and corporate secretary of Apple
Computer and served on its Board of Directors (1985 to 1993).
3. On page 28 of the Prospectus, the fourth paragraph under the heading "SHARE
PRICE" is deleted. All remaining references in the Prospectus and
Statement of Additional Information to the net asset value being calculated
at "12 p.m. Pacific Time for Benham Target Maturities Trust and 1 p.m.
Pacific Time for all other Benham funds" are hereby changed to "the close
of the Exchange, usually 12 p.m. Pacific Time for Benham Target Maturities
Trust and 1 p.m. Pacific Time for all other Benham Funds."
4. On page 32 of the Prospectus, the following sentence is to be inserted
under the sub-heading "TELEPHONE TRANSACTIONS" after the last sentence of
the first paragraph:
Once your telephone order has been placed, it may not be modified or
cancelled.
5. On page 32 of the Prospectus, the following sentence is to be inserted
under the subheading "CONFIRMATION AND QUARTERLY STATEMENTS" after the
second sentence:
However, beginning September of 1996, Automatic Investment Services
transactions will not be confirmed immediately but rather will be
confirmed on your next consolidated quarterly statement.
6. On page 34 of the Prospectus, the following replaces the last two
sentences of the last paragraph under the subheading "OPEN ORDER SERVICE":
All orders and cancellation of orders received by one hour prior to the
close of the Exchange, usually by 12 p.m. Pacific Time, will be
considered to be effective the same day. All orders and cancellation of
orders not received one hour prior to the close of the Exchange, usually
12 p.m. Pacific Time, will be considered effective the following business
day.
7. On page 34, under the subheading "BROKER-DEALER TRANSACTIONS," the first
paragraph is hereby amended to read as follows:
The Benham Group charges no sales commissions, or "loads," of any kind.
However, investors may purchase and sell Fund shares through registered
broker-dealers and other qualified service providers, who may charge
investors fees for their services. In addition, BMC and its affiliates
have entered into agreements with some of these broker-dealers and service
providers to provide certain shareholder, administrative and/or
accounting services. Fees for such services are borne normally by the
Funds. Any distribution expenses associated with these arrangements are
borne by BMC.
