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HOTCHKIS AND WILEY FUNDS
SUPPLEMENT TO PROSPECTUS
DATED AUGUST 28, 1998
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FEE TABLE
Effective March 1, 1999, the expense limits for some of the Hotchkis and Wiley
Funds (the "Funds") will be changed. Although not required to do so, Hotchkis
and Wiley (the "Advisor") has agreed to limit the annual operating expenses of
the following Funds:
<TABLE>
<CAPTION>
Expense Limits Expense Limits
Effective March 1, 1999 Prior to March 1, 1999
(as a percentage of (as a percentage of
FUND average net assets) average net assets)
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<S> <C> <C>
Equity Income.......................................... .95% 1.00%
Mid-Cap................................................ 1.15 1.00
Global Equity.......................................... 1.25 1.00
Balanced............................................... .95 1.00
Total Return Bond...................................... .65 .65
Low Duration........................................... .58 .58
Short-Term Investment.................................. .48 .48
</TABLE>
The 1.00% expense limits for the Small Cap Fund and the International Fund will
end.
In addition, effective March 1, 1999, the Funds will begin paying intermediary
transfer agency expenses as described below. The Annual Fund Operating Expenses
and the Example on page 3 of the Prospectus have been restated to reflect the
revised expense limits and estimated intermediary transfer agency expenses as if
they had been in effect during the Funds' fiscal year ended June 30, 1998, as
follows:
<TABLE>
<CAPTION>
ANNUAL FUND Equity Mid- Small Inter- Global Total Low Short-Term
OPERATING EXPENSES Income Cap Cap national Equity Balanced Return Duration Investment
(as a percentage of average net assets) Fund Fund Fund Fund Fund Fund Bond Fund Fund Fund
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees.......... .75% .75% .75% .75% .75% .75% .55% .46% .40%
Other expenses after expense
reimbursement............ .17% .40% .31% .25% .50% .20% .10% .12% .08%
--- ---- ---- ---- ---- --- ---- --- ---
Total Fund operating expenses
after expense reimbursement... .92% 1.15% 1.06% 1.00% 1.25% .95% .65% .58% .48%
=== ==== ==== ==== ==== === ==== === ===
</TABLE>
If the Advisor hadn't limited the Funds' expenses, other expenses of the Funds
and total Fund operating expenses, each as including the estimated intermediary
transfer agency expenses described below, would have been as follows (as a
percentage of average net assets):
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<TABLE>
<CAPTION>
Total Fund
FUND Other Expenses Operating Expenses
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<S> <C> <C>
Mid-Cap................................................ 2.02% 2.77%
Global Equity.......................................... 2.15 2.90
Balanced............................................... .23 .98
Total Return Bond...................................... .53 1.08
Low Duration........................................... .26 .72
Short-Term Investment.................................. .54 .94
</TABLE>
The Advisor has agreed to keep these expense limits in place for the next year
and will give shareholders at least 30 days' notice of any decision to change
this reimbursement policy.
<TABLE>
<CAPTION>
EXAMPLE
You would pay the following expenses Total
on a $1,000 investment, assuming: Equity Mid- Small Inter- Global Return Low
(1) 5% annual return, and Income Cap Cap national Equity Balanced Bond Duration
(2) redemption at the end of each time period: Fund Fund Fund Fund Fund Fund Fund Fund
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
One Year... $ 9 $ 12 $ 11 $ 10 $ 13 $ 10 $ 7 $ 6
Three Years... $ 29 $ 37 $ 34 $ 32 $ 40 $ 30 $21 $19
Five Years... $ 51 $ 63 $ 58 $ 55 $ 69 $ 53 $36 $32
Ten Years... $113 $140 $129 $122 $151 $117 $81 $73
<CAPTION>
EXAMPLE
You would pay the following expenses
on a $1,000 investment, assuming: Short-Term
(1) 5% annual return, and Investment
(2) redemption at the end of each time period: Fund
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<S> <C>
One Year... $ 5
Three Years... $15
Five Years... $27
Ten Years... $60
</TABLE>
The Example should not be considered a representation of past or future
expenses; actual Fund expenses may be greater or less than those shown. The
assumption in the Example of a 5% annual return is required by regulations of
the Securities and Exchange Commission applicable to all mutual funds. The
assumed 5% annual return is not a prediction of, and does not represent, the
projected or actual performance of any Fund.
INTERMEDIARY TRANSFER AGENCY EXPENSES
You can purchase shares of the Funds directly from the Funds via the transfer
agent, Firstar Mutual Fund Services, LLC. You can also purchase shares through
intermediaries such as the various fund supermarket programs, or you may be able
to invest through your employer's 401(k) plan. When you purchase directly,
shareholder accounts are maintained by the Funds' transfer agent, and the Funds
pay the transfer agency expenses. When you purchase through an intermediary,
shareholder accounts are maintained by the intermediary, and the Funds will pay
for intermediary transfer agency expenses beginning March 1, 1999. The Funds
continue to pay for certain other transfer agency expenses relating directly to
intermediary accounts such as wires, clearing agency processing charges and
next-day transaction processing.
MID-CAP FUND PORTFOLIO MANAGER
In January 1999, Stan Majcher replaced Michael Baxter as a portfolio manager of
the Mid-Cap Fund. Mr. Majcher joined the Advisor in August 1996 as a domestic
equity analyst. From 1994 to 1996, he was an investment banking analyst at
Merrill Lynch & Co., Inc. In 1993, he was a corporate finance analyst at
Nagelvoort & Company.
Dated: January 29, 1999
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