1933 Act Registration No. 33-12
1940 Act File No. 811-4401
Rule 497(e)
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
CASH RESERVE PORTFOLIO
SUPPLEMENT DATED DECEMBER 31, 2000
TO PROSPECTUS DATED MAY 1, 2000
MERGER OF ADVISOR WITH B.C. ZIEGLER AND COMPANY
As disclosed in the Prospectus, the Cash Reserve Portfolio presently is
managed by Ziegler Asset Management, Inc. ("ZAMI") pursuant to the terms of an
Investment Advisory Agreement (the "Existing Advisory Agreement"). The Ziegler
Companies, Inc., the parent company of ZAMI, is engaging in a corporate
restructuring designed to bring some operational and managerial efficiencies
that it believes will better serve its business plan. It is anticipated that
this restructuring will be completed effective January 1, 2001. In connection
with this restructuring, ZAMI will merge with and into B.C. Ziegler and Company
("B.C. Ziegler"), another wholly-owned subsidiary of The Ziegler Companies,
Inc., which presently serves as distributor, administrator and fund accounting
and pricing agent for the Cash Reserve Portfolio. B.C. Ziegler is a registered
broker/dealer and a registered investment advisor. B.C. Ziegler serves as
investment advisor to the other mutual fund portfolios within the Principal
Preservation family.
As a result of this merger, B.C. Ziegler will assume ZAMI's
responsibilities as investment advisor for the Cash Reserve Portfolio pursuant
to the terms of a restated advisory contract which will have terms substantively
identical to the Existing Advisory Contract, including the scope of investment
management services to be provided to the Cash Reserve Portfolio and the
advisory fees to be paid by the Cash Reserve Portfolio for those services. The
portfolio managers and the other investment personnel who presently manage the
Cash Reserve Portfolio's assets will continue to manage the assets of the
Portfolio under the same investment objectives, policies and programs as
presently are in effect. Except that the name of the Cash Reserve Portfolio's
investment advisor will be B.C. Ziegler instead of ZAMI, the merger will have no
perceivable effect in the investment management services provided to the Cash
Reserve Portfolio, the contractual terms and fees applicable to those services,
or the investment management and managerial personnel responsible for providing
those services.
