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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 has assumed overall responsibility for the 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.
August 8, 1996
