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HOTCHKIS AND WILEY FUNDS
SUPPLEMENT TO PROSPECTUS
DATED OCTOBER 31, 1995
ORGANIZATION AND MANAGEMENT
In June 1996, Hotchkis and Wiley, a limited partnership that is the
advisor to the Hotchkis and Wiley Funds (the "Funds"), entered into a Purchase
Agreement with Merrill Lynch & Co., Inc., a Delaware corporation ("ML"),
pursuant to which ML will acquire the partnership interests in Hotchkis and
Wiley. The purchase is subject to a number of contingencies, including approval
by the Funds' Board of Trustees (which has occurred) and shareholders of new
investment advisory agreements relating to each Fund. If the transaction occurs,
it is anticipated that the Funds will be operated in the same manner as they are
currently.
Dr. Roger DeBard and Michael Sanchez of Hotchkis and Wiley, have assumed
overall responsibility for the day-to-day management of the portfolios of the
Total Return Bond Fund, the Low Duration Fund, the Short-Term Investment Fund
and the fixed-income portion of the Balanced Income Fund. Dr. DeBard will
continue as portfolio manager of the equity portion of the Balanced Income Fund.
Dr. DeBard, a managing director of Hotchkis and Wiley, has been a portfolio
manager with Hotchkis and Wiley since 1985. Prior to joining Hotchkis and Wiley,
Mr. Sanchez was with Provident Investment Counsel as Senior Vice President and
portfolio manager from 1991 to 1995 and with ARCO Investment Management Company
as Director of Fixed Income Investments from 1988 to 1991.
August 22, 1996
