1933 Act Registration No. 33-12
1940 Act File No. 811-4401
Rule 497(e)
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
SUPPLEMENT DATED SEPTEMBER 29, 2000
TO PROSPECTUS DATED MAY 1, 2000
CHANGES TO NAME AND INVESTMENT POLICY OF DIVIDEND ACHIEVERS PORTFOLIO
The Dividend Achievers Portfolio has changed its name to "Achievers
Portfolio." The name change was made in connection with the decision of the
Board of Directors of Principal Preservation Portfolios, Inc. to permit the
Portfolio to invest up to 15% of its total assets in common stocks of companies
that do not pay dividends but meet the Advisor's other investment criteria such
as having market capitalizations in excess of $2 billion, strong balance sheets
and strong potential for long-term growth of earnings which the market has not
fully valued.
EXCHANGES INVOLVING CLASS X SHARES OF CASH RESERVE PORTFOLIO
Management of Principal Preservation Portfolios, Inc. has made it easier to
exchange Class X shares of the Cash Reserve Portfolio for Class B or Class C
shares of any other mutual fund in the Principal Preservation family, and vice
versa. These holders are now able to use a single form (available from the
Distributor or Transfer Agent) to purchase Class B or Class C shares of any
mutual fund in the Principal Preservation family using proceeds from the sale of
their Class X shares of the Cash Reserve Portfolio. Previously, holders of
Class X shares of the Cash Reserve Portfolio could only be exchanged for Class A
shares of other Principal Preservation funds. Investors should bear in mind
that an exchange is treated as a redemption of the shares surrendered in the
exchange and a purchase of the shares received in the exchange and thus subject
to applicable sales charges. In addition, the Class B or Class C shares of a
Principal Preservation mutual fund that are received in an exchange of Class X
shares of the Cash Reserve Portfolio will remain subject to a contingent
deferred sales charge based on the period of time the Class B or Class C shares
are held, not from the time the Class X shares being exchanged were first
acquired.
PORTFOLIO MANAGEMENT CHANGE
Leon Dodge has resigned from B.C. Ziegler and Company and Ziegler Asset
Management, Inc. as of September 22, 2000. As a consequence, Mr. Dodge is no
longer on the investment team for the Government Portfolio, a co-manager of the
S&P 100 Plus Portfolio or the Achievers Portfolio, or the portfolio manager for
the Select Value Portfolio.
NEW INVESTMENT ADVISOR FOR SELECT VALUE PORTFOLIO
Following the resignation of Leon Dodge, the portfolio manager of Select
Value Portfolio, from B.C. Ziegler and Company, as described above, and in
connection with a proposed reorganization under consideration involving the
merger of the Select Value Portfolio into the Nationwide Value Opportunities
Fund, a series of Nationwide Mutual Funds, NorthPointe Capital, LLC has been
engaged as interim investment adviser for the Select Value Portfolio, replacing
B.C. Ziegler and Company. NorthPointe Capital, LLC, formed in 1999, currently
manages the Nationwide Value Opportunities Fund as sub-adviser and other
institutional accounts. Its address is 201 West Big Beaver Road, Columbia
Center One, 10th Floor, Suite 1000, Troy, Michigan 48084.
Under an interim investment advisory agreement approved by the Board of
Directors of Principal Preservation, NorthPointe Capital will manage the assets
of the Select Value Portfolio for a period of up to 150 days under the same fee
structure formerly paid to B.C. Ziegler and Company (including contractual fee
waivers through October 31, 2000), except that the fees will be placed into
escrow until shareholders approve an investment advisory contract with
NorthPointe Capital within the 150 day period. The interim investment advisory
agreement is subject to the requirements of Rule 15a-4 under the Investment
Company Act of 1940 which permits interim advisory contracts without shareholder
approval.
Mr. Jeffrey C. Petherick and Ms. Mary C. Champagne, will serve as co-
portfolio managers of the Select Value Fund. Mr. Petherick and Ms. Champagne
joined NorthPointe Capital in January 2000 and are co-portfolio managers for the
Nationwide Value Opportunities Fund. Since June 1995, Mr. Petherick and Ms.
Champagne have co-managed institutional and retail small cap value equity
investments at Loomis, Sayles & Company, L.P. Mr. Petherick joined Loomis,
Sayles in 1990. Ms. Champagne joined Loomis, Sayles in 1993.
Although the Board of Directors of Principal Preservation has not yet
approved the proposed reorganization of the Select Value Portfolio and no plan
of reorganization has been signed, management has executed a non-binding letter
of intent regarding the transaction. It is expected that a plan of
reorganization for the Select Value Portfolio will be executed and presented to
the Board of Directors for its consideration and approval within the next month
or two. If the proposed reorganization is completed, the shareholders of the
Select Value Portfolio will become shareholders of the Nationwide Value
Opportunities Fund. More information will be provided at the appropriate time.
A05-BCZ SUP3Q00
