<PAGE> 1
KENT FUNDS
SUPPLEMENT DATED JUNE 22, 2000
TO THE PROSPECTUS FOR THE KENT FUNDS DATED MAY 1, 2000
The information under the heading "FEES AND EXPENSES" on page 34 of the
prospectus is replaced with the following:
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Money Market Funds.
<TABLE>
<CAPTION>
MONEY GOVERNMENT MONEY MICHIGAN MUNICIPAL MONEY
MARKET FUND MARKET FUND MARKET FUND
Investment Institutional Investment Institutional Investment Institutional
Shares Shares Shares Shares Shares Shares
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your
investment)
Maximum Sales (Load) Charge Imposed on
Purchases None None None None None None
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund
assets)
Management Fees 0.40% 0.40% 0.40% (1) 0.40% (1) 0.40% 0.40%
Distribution (12b-1) Fees None None None None None None
Other Expenses 0.23% (1) 0.23% (1) 0.25% (1) 0.25% (1) 0.23% (1) 0.23% (1)
-------------- -------------- -------------- -------------- -------------- --------------
TOTAL ANNUAL FUND OPERATING EXPENSES
0.63% 0.63% 0.65% 0.65% 0.63% 0.63%
FEE WAIVER 0.08% 0.08% 0.23% 0.23% 0.08% 0.08%
-------------- -------------- -------------- -------------- -------------- --------------
NET ANNUAL FUND OPERATING EXPENSES
0.55% (1) 0.55% (1) 0.42% (1) 0.42% (1) 0.55% (1) 0.55% (1)
============== ============== ============== ============== ============== ==============
</TABLE>
(1) The Investment Adviser has contractually agreed to waive a portion of its
management fees and/or the Fund's administrator and fund accountant have
contractually agreed to waive a portion of the administration and fund
accounting fees payable by the Fund at least until December 31, 2000.
EXAMPLE: This Example is intended to help you compare the cost of investing in
the Funds with the cost of investing in other mutual funds. The Example assumes:
- $10,000 investment
- 5% annual return
- redemption at the end of each period
- no changes in the Fund's operating expenses
Although your actual costs may be higher or lower, based upon these assumptions,
your costs would be:
<TABLE>
<CAPTION>
MONEY GOVERNMENT MONEY MICHIGAN MUNICIPAL MONEY
MARKET FUND MARKET FUND MARKET FUND
Investment Institutional Investment Institutional Investment Institutional
Shares Shares Shares Shares Shares Shares
--------------------------------- --------------- -------------- --------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
ONE YEAR AFTER PURCHASE $ 55 $ 55 $ 43 $ 43 $ 54 $ 54
THREE YEARS AFTER PURCHASE $194 $194 $185 $185 $192 $192
FIVE YEARS AFTER PURCHASE $343 $343 $339 $339 $341 $341
TEN YEARS AFTER PURCHASE $779 $779 $789 $789 $777 $777
</TABLE>
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
KKF-2391 (6/2000)
<PAGE> 2
KENT FUNDS
SUPPLEMENT DATED JUNE 22, 2000
TO THE STATEMENT OF ADDITIONAL INFORMATION FOR THE KENT FUNDS DATED MAY 1, 2000
The following non-fundamental investment restriction, which appears on page 28
of the Statement of Additional Information, is deleted in its entirety:
(3) Invest more than 5% of its total assets in securities of any company having
a record, together with its predecessors, of less than three years of
continuous operation except that each of the Small Company Growth Fund and
the International Growth Fund may invest up to 10% of its total assets in
such companies.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
KKF-0388 (6/2000)
<PAGE> 3
PROSPECTUS
JUNE 1, 1999
as amended and restated June 22, 2000
LYON STREET INSTITUTIONAL
MONEY MARKET FUND
FOR MORE INFORMATION
CALL 1-800-633-KENT (5368)
OR YOUR INVESTMENT REPRESENTATIVE.
THE SECURITIES AND EXCHANGE COMMISSION HAS
NOT APPROVED OR DISAPPROVED THE SHARES
DESCRIBED IN THIS PROSPECTUS OR DETERMINED
WHETHER THIS PROSPECTUS IS ACCURATE OR
COMPLETE. ANYONE WHO TELLS YOU OTHERWISE IS
COMMITTING A CRIME.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE> 4
TABLE OF
CONTENTS
<TABLE>
<C> <S> <C>
Carefully review this important
section, which summarizes the Fund's
investments, risks and fees.
RISK/RETURN SUMMARY AND FUND EXPENSES
2
Review this section for information on
investment strategies and their risks.
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
5
Review this section for details on the
people and organizations who oversee
the Fund.
FUND MANAGEMENT
INVESTMENT ADVISER
7
DISTRIBUTOR, ADMINISTRATOR AND SUB-ADMINISTRATOR
7
Review this section for details on how
shares are valued, how to purchase,
sell and exchange shares, related
charges and payments of dividends and
distributions.
SHAREHOLDER INFORMATION
PRICING OF FUND SHARES
8
PURCHASING AND ADDING TO YOUR SHARES
9
SELLING YOUR SHARES
10
GENERAL POLICIES ON SELLING SHARES
11
EXCHANGING YOUR SHARES
12
DIVIDENDS, DISTRIBUTIONS AND TAXES
13
BACK COVER
WHERE TO LEARN MORE ABOUT THIS FUND
</TABLE>
1
<PAGE> 5
RISK/RETURN SUMMARY AND FUND EXPENSES
The following is a summary of certain key information about the Fund. You will
find additional information about the Fund, including a detailed description of
the risks of an investment in the Fund, after this summary.
RISK/RETURN SUMMARY OF THE LYON STREET INSTITUTIONAL MONEY MARKET FUND
INVESTMENT OBJECTIVES The Fund seeks current income from short-term
securities while preserving capital and
maintaining liquidity.
PRINCIPAL INVESTMENT STRATEGIES The Fund is a money market fund that seeks to
maintain a stable net asset value of $1.00 per
share. The Fund invests in a broad range of
short-term instruments including commercial
paper, short-term corporate obligations and
short-term obligations issued or guaranteed by
the United States Government, its agencies or
instrumentalities.
PRINCIPAL INVESTMENT RISKS The Fund's performance per share will change
daily based on many factors, including, the
quality of the instruments in the Fund's
investment portfolio, national and international
economic conditions and general market
conditions. Changes in the interest rate will
affect the yield or value of the Fund's
investments in debt securities.
- An investment in the Fund is not a deposit in
a bank and is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any
other government agency.
- Although the Fund seeks to preserve the value
of your investment at $1.00 per share, it is
possible to lose money by investing in the
Fund.
- If an issuer fails to pay interest or repay
principal, the value of your investment could
decline.
- Because the Fund invests in short-term
securities, a decline in interest rates will
affect the Fund's yield as these securities
mature or are sold and the Fund purchases new
short-term securities with a lower yield.
- Foreign investments may be riskier than U.S.
investments because of unstable international
political and economic conditions, foreign
controls on investment and currency exchange,
withholding taxes, a lack of adequate company
information, and lack of government
regulation.
- There can be no assurance that the investment
objective of the Fund will be achieved.
WHO MAY WANT TO INVEST? Consider investing in the Fund if you:
- ARE SEEKING PRESERVATION OF CAPITAL
- HAVE A LOW RISK TOLERANCE
- ARE WILLING TO ACCEPT LOWER POTENTIAL RETURNS
IN EXCHANGE FOR A HIGHER DEGREE OF SAFETY
- ARE INVESTING SHORT-TERM RESERVES
This Fund will not be appropriate for anyone:
- SEEKING HIGH TOTAL RETURNS
- PURSUING A LONG-TERM GOAL OR INVESTING FOR
RETIREMENT
2
<PAGE> 6
RISK/RETURN SUMMARY AND FUND EXPENSES
<TABLE>
<S> <C> <C>
This table describes the fees and expenses that you FEES AND EXPENSES
may pay if you buy and hold shares of the Lyon Street
Institutional Money Market Fund. SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases None
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
Management Fees 0.40%
---------------------------------------------------------
Distribution and Service (12b-1) Fees None
---------------------------------------------------------
Other Expenses 0.27%
---------------------------------------------------------
Total Annual Fund Operating Expenses 0.67%
---------------------------------------------------------
Fee Waiver 0.45%
---------------------------------------------------------
Net Annual Fund Operating Expenses 0.22%*
---------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
* This is the actual total fund operating expense you will pay as an investor in
this Fund. That's because the Adviser has contractually agreed to waive a
portion of the annual management fees, and the Administrator has contractually
agreed to waive a portion of the administration fee, payable by the Fund. The
Fund's total annual fund operating expenses and net annual fund operating
expenses are estimated based on expenses expected to be incurred in the current
fiscal year.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes:
- $10,000 investment
- 5% annual return
- redemption at the end of each period
- no changes in the Fund's operating expenses, except for the expiration of the
current contractual fee waivers on December 31, 2000
Although your actual costs may be higher or lower, based upon these assumptions,
your costs would be:
<TABLE>
<S> <C> <C>
1 3
LYON STREET INSTITUTIONAL MONEY MARKET FUND Year Years
$22 $168
</TABLE>
3
<PAGE> 7
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
INVESTMENT OBJECTIVES, POLICIES AND STRATEGIES
The Fund's investment objective is to seek current income
from short-term securities while preserving capital and
maintaining liquidity. As a money market fund, the Fund
must meet the requirements of the Securities and Exchange
Commission's Rule 2a-7. This rule imposes strict
requirements on the investment quality, maturity, and
diversification of the Fund's investments. Under Rule
2a-7, the Fund's investments must have a remaining
maturity of no more than 397 days, and its investments
must maintain an average weighted maturity that does not
exceed 90 days.
With respect to substantially all of its securities, the
Fund will only buy a security if it has the highest
short-term rating from at least two nationally recognized
statistical rating organizations, such as Standard &
Poor's Ratings Group or Moody's Investors Service, Inc.,
or only one such rating if only one organization has rated
the instrument. If the money market instrument is not
rated, the Adviser must determine that it is of comparable
quality to eligible rated instruments. In addition, the
Fund considers an investment's projected rate of return
and whether the investment meets the requirements of Rule
2a-7.
The Statement of Additional Information has more detailed
information about the investment policies and strategies
of the Fund.
INVESTMENT RISKS
The Fund's primary risks are INTEREST RATE RISK and credit
risk. Because the Fund invests in short-term securities, a
decline in interest rates will affect the Fund's yield as
these securities mature or are sold and the Fund purchases
new short-term securities with a lower yield. Generally,
an increase in interest rates causes the value of a debt
instrument to decrease. The change in value for
shorter-term securities is usually smaller than for
securities with longer maturities. Because the Fund
invests in securities with short maturities and seeks to
maintain a stable net asset value of $1.00 per share, it
is possible, though unlikely, that an increase in interest
rates would change the value of your investment.
CREDIT RISK is the possibility that a security's credit
rating will be downgraded or that the issuer of the
security will default (fail to make scheduled interest and
principal payments). The Fund invests in highly-rated
securities to minimize credit risk. Under Rule 2a-7, 95%
of a money market fund's holdings must be rated in the
highest credit category (e.g., A-1 or A-1+) and the
remaining 5% must be rated no lower than the second
highest credit category.
The Fund's investments in U.S. dollar-denominated
obligations of foreign branches of U.S. banks and U.S.
branches of foreign banks may be subject to FOREIGN RISK.
Foreign investments subject the Fund to investment risks
different from those associated with domestic investments.
Foreign securities issuers are usually subject to less
regulation than U.S. issuers. Reporting, accounting, and
auditing standards of foreign countries are less
stringent, in some cases significantly, than U.S.
standards. Foreign risk includes nationalization,
expropriation or confiscatory taxation, currency blockage,
political changes or diplomatic developments that could
adversely affect the Fund's investments.
The Fund also is subject to MANAGEMENT RISK because it is
an actively managed portfolio. The Fund's Adviser uses its
investment techniques and risk analyses in making
investment decisions for the Fund, but there is no
guarantee that its techniques will produce the intended
result.
There can be no assurance that the investment objective of
the Fund will be achieved. In addition, the Fund's
investment policies, as well as the relatively short
maturity of obligations purchased by the Fund, may result
in frequent changes in the Fund's portfolio, which may
give rise to taxable gains.
4
<PAGE> 8
FUND MANAGEMENT
INVESTMENT ADVISER
--------------------------------------------------------------------------------
The Fund is advised by Lyon Street Asset Management
Company, a wholly-owned subsidiary of Old Kent Bank. Lyon
Street maintains offices at 111 Lyon Street, NW, Grand
Rapids, Michigan 49503. Old Kent Bank is a wholly-owned
subsidiary of Old Kent Financial Corporation, which is a
financial services company with total assets as of
December 31, 1999 of approximately $18 billion. The
Investment Management Group ("IMG") at Lyon Street has
managed the Kent Funds since their inception. The Lyon
Street Institutional Money Market Fund is an investment
portfolio of the Kent Funds. Prior to 1998, IMG managed
the Kent Funds as a division of Old Kent Bank. Old Kent
Bank has managed the financial assets of individual and
institutional investors for over 100 years. Lyon Street
employs an experienced staff of professional investment
analysts, portfolio managers and traders, and uses several
proprietary computer-based systems in conjunction with
fundamental analysis to identify investment opportunities.
Lyon Street is entitled to receive management fees in the
amount of 0.40% of the average daily net assets of the
Fund. However, Lyon Street has contractually agreed to
waive until December 31, 2000, a portion of its management
fees so that the total annual operating expenses of the
Fund will not exceed 0.22%.
DISTRIBUTOR, ADMINISTRATOR AND SUB-ADMINISTRATOR
--------------------------------------------------------------------------------
Kent Funds Distributors, Inc. ("Distributor") is the
distributor of the Fund's shares. The Distributor is
located at 3435 Stelzer Road, Columbus, Ohio 43219.
Old Kent Securities Corporation ("OKSC") provides
management and administrative services to the Fund,
including providing office space, equipment and clerical
personnel to the Fund and supervising custodial, auditing,
valuation, bookkeeping and legal services. OKSC also acts
as the fund accountant, transfer agent and dividend paying
agent of the Fund. OKSC is located at 111 Lyon Street NW,
Grand Rapids, Michigan 49503.
BISYS Fund Services Ohio, Inc. ("BISYS") provides certain
administrative, fund accounting, transfer agent and
dividend paying agent services to the Fund pursuant to
agreements between OKSC and BISYS. As compensation for its
services, BISYS receives fees from OKSC. The fees paid to
BISYS by OKSC for such services come out of OKSC's fees
and are not an additional charge to the Funds. BISYS is
located at 3435 Stelzer Road, Columbus, Ohio 43219.
The Statement of Additional Information has more detailed
information about the Adviser and other service providers.
5
<PAGE> 9
SHAREHOLDER INFORMATION
PRICING OF FUND SHARES
--------------------------------------------------------------------------------
HOW NAV IS CALCULATED
The NAV is calculated by adding
the total value of a Fund's
investments and other assets,
subtracting its liabilities and
then dividing that figure by the
number of outstanding shares of
the Fund:
NAV =
TOTAL ASSETS - LIABILITIES
----------------------------
NUMBER OF SHARES
OUTSTANDING
The Fund's net asset value, or NAV, is expected
to be constant at $1.00 per share, although this
value is not guaranteed. The NAV is determined
at 2 p.m. Eastern time on days the New York
Stock Exchange is open. Your order for purchase,
sale or exchange of shares is priced at the next
NAV calculated after your order is received in
good order by the Fund on any day that the New
York Stock Exchange is open for business. For
example, if you place a purchase order to buy
shares of the Fund, it must be received in good
order by 2:00 p.m. Eastern time in order to
receive the NAV calculated at 2:00 p.m. that
day. If your order is received in good order
after 2:00 p.m., you will receive the NAV
calculated at 2:00 p.m. Eastern Time the next
day. The Fund values its securities at amortized
cost. The amortized cost method involves valuing
a portfolio security at its cost and thereafter
applying a constant amortization to maturity of
the difference between the principal amount due
at maturity and initial cost.
6
<PAGE> 10
SHAREHOLDER INFORMATION
PURCHASING AND ADDING TO YOUR SHARES
--------------------------------------------------------------------------------
MINIMUM INITIAL INVESTMENT $500,000
Subsequent investments may be made in any amount.
--------------------------------------------------------------------------------
The Fund may waive its minimum investment requirements and may reject a purchase
order if it considers it in the best interest of the Fund and its shareholders.
HOW CAN I PURCHASE SHARES?
You can purchase shares by taking the following steps:
1. To open an account, call 1-800-633-KENT (5368) to obtain an account or
wire identification number and to place a purchase order.
2. Wire federal funds, which must be received by the Fund no later than
the close of business the day the purchase order is placed. You must
establish an account with the Fund prior to sending the wire. The wire
must include your Fund account number.
You should note that (i) a purchase of shares will not be completed until the
Fund receives the purchase proceeds and (ii) banks may charge for wiring federal
funds to the Fund. You may obtain information on how to wire funds from any
national bank and certain state banks.
DIVIDENDS AND DISTRIBUTIONS
All dividends and distributions will be automatically reinvested unless you
request otherwise.
If you wish to receive distributions in cash, notify the Fund at 1-800-633-KENT
(5368) and your distributions will be sent by electronic funds transfer directly
to your designated bank account.
--------------------------------------------------------------------------------
AVOID 31% TAX WITHHOLDING
The Fund is required to withhold 31% of taxable dividends, capital gains
distributions and redemptions paid to shareholders who have not provided the
Fund with their certified taxpayer identification number in compliance with IRS
rules. To avoid this, make sure you provide your correct Tax Identification
Number (Social Security Number for most investors) on your account application.
--------------------------------------------------------------------------------
7
<PAGE> 11
SHAREHOLDER INFORMATION
SELLING YOUR SHARES
--------------------------------------------------------------------------------
INSTRUCTIONS FOR SELLING SHARES
You may sell your shares at any time. Your sales price will be the next NAV
after your sell order is received in good order by the Fund.
You can redeem shares on any day that the New York Stock Exchange is open for
business. Shares will not be redeemed by the Fund unless all required documents
have been received by the Fund.
As a mutual fund shareholder, you are technically selling
shares when you request a withdrawal in cash. This is also
known as redeeming shares or a redemption of shares.
The Fund may temporarily stop redeeming shares when the New York Stock Exchange
is closed or trading on the New York Stock Exchange is restricted, when an
emergency exists and the Fund cannot sell its assets or accurately determine the
value of its assets or if the Securities and Exchange Commission orders the Fund
to stop redemptions.
If you intend to redeem shares worth more than $1,000,000, you should notify the
Fund at least one business day in advance.
Redemption proceeds will be wired in federal funds only to the commercial bank
and account number listed on your account application. To change the bank
account, you should call the Fund at 1-800-633-KENT (5368) and request the
appropriate form.
--------------------------------------------------------------------------------
BY TELEPHONE Call 1-800-633-KENT (5368) with redemption
instructions.
Redemption orders received prior to 2:00 p.m.
eastern standard time will be settled on the
same day.
--------------------------------------------------------------------------------
BY MAIL 1. Call 1-800-633-KENT (5368) to request
redemption forms or write a letter of
instruction indicating:
- your account name and number
- amount or number of shares you wish to
redeem
- address where your check should be sent
- account owner signature
- if a stock certificate has been issued, you
must sign the back of the certificate and
submit it together with the redemption
request.
2. Mail to:
LYON STREET INSTITUTIONAL MONEY MARKET FUND
P.O. BOX 182201
COLUMBUS, OHIO 43218-2201
--------------------------------------------------------------------------------
8
<PAGE> 12
SHAREHOLDER INFORMATION
GENERAL POLICIES ON SELLING SHARES
--------------------------------------------------------------------------------
GENERAL REDEMPTION INFORMATION During periods of unusual market activity it may
be difficult to reach the Fund by telephone. In
such cases, shareholders should follow the
procedures for redeeming by mail or through a
broker. Neither the Fund nor any of its service
providers will be liable for following telephone
instructions reasonably believed to be genuine
unless it acts with willful misfeasance, bad
faith or gross negligence. In this regard, the
Fund and its transfer agent will employ
procedures designed to provide reasonable
assurance that instructions by telephone are
genuine. Such procedures will include the
requirement that personal identification be
provided before accepting a telephone
redemption.
The Fund reserves the right to redeem an account
if its value falls below $100,000 as a result of
redemptions or exchanges (but not as a result of
a decline in net asset value). A shareholder
will be notified in writing and allowed 60 days
to increase the value of the account to the
minimum investment level.
PAYMENT OF REDEMPTION
PROCEEDS You can generally expect to receive redemption
proceeds within seven days of receipt of a
request. Payment for shares may be delayed under
extraordinary circumstances or as permitted by
the SEC in order to protect remaining
shareholders.
REDEMPTION IN KIND The Fund reserves the right to make payment in
securities rather than cash, known as a
"redemption in kind." This could occur under
extraordinary circumstances, such as a very
large redemption that could affect Fund
operations (for example, more than 1% of the
Fund's net assets). If the Fund deems it
advisable for the benefit of all shareholders, a
redemption in kind will consist of securities
equal in market value to your shares. When you
convert these securities to cash, you will pay
brokerage charges.
IMPORTANT INFORMATION REGARDING STOCK
CERTIFICATES AND REDEMPTION NOTICES. SIGNATURES
ON REDEMPTION NOTICES AND STOCK CERTIFICATES
MUST BE GUARANTEED BY A U.S. STOCK EXCHANGE
MEMBER, A U.S. COMMERCIAL BANK OR TRUST COMPANY
OR OTHER ENTITY APPROVED BY THE FUND, IF THE
AMOUNT REDEEMED IS GREATER THAN $50,000, IF THE
PROCEEDS ARE TO BE MAILED TO AN ADDRESS OTHER
THAN THE ADDRESS OF RECORD, OR THE PROCEEDS ARE
TO BE MADE PAYABLE TO A PARTY OTHER THAN THE
OWNER OF THE ACCOUNT. THE FUND CAN CHANGE THE
ABOVE REQUIREMENTS OR REQUIRE ADDITIONAL
DOCUMENTS AT ANY TIME.
9
<PAGE> 13
SHAREHOLDER INFORMATION
EXCHANGING YOUR SHARES
--------------------------------------------------------------------------------
INSTRUCTIONS FOR EXCHANGING SHARES
Exchanges may be made by sending a written request to:
KENT FUNDS
P.O. BOX 182201
COLUMBUS, OHIO 43218-2201
or by calling 1-800-633-KENT (5368)
Please provide the following information:
- Your name and telephone number
- The exact name on your account and account number
- Taxpayer identification number (or Social Security Number, if you are an
individual)
- Dollar value or number of shares to be exchanged
- The name of the Fund from which the exchange is to be made and the account
number
- The name of the Fund into which the exchange is being made, and if this is
an existing account, please provide the account number
You may acquire Institutional Shares of any other investment portfolio of the
Kent Funds by exchanging shares of the Fund for shares of the new fund. In
effect, you would be redeeming (reselling to the Fund) shares of the old fund
and purchasing shares of the new fund. Exchanges are effected at the net asset
value next determined after the exchange request is received in good order by
the Fund. Be sure to read carefully the prospectus of any fund into which you
wish to exchange shares.
You must meet the minimum investment requirements for the Fund into which you
are exchanging. Exchanges from one fund to another are taxable.
--------------------------------------------------------------------------------
IMPORTANT INFORMATION ABOUT EXCHANGES
Kent Funds may disallow exchanges of shares if a shareholder has made more than
five exchanges between investment portfolios offered by the Kent Funds in a
year, or more than three exchanges in a calendar quarter. The Kent Funds may
reject any exchanges or change or terminate rights to exchange shares. The
exchange privilege is available only in states where shares of the new fund may
be sold.
10
<PAGE> 14
SHAREHOLDER INFORMATION
DIVIDENDS, DISTRIBUTIONS AND TAXES
--------------------------------------------------------------------------------
Any income the Fund receives is paid out, less expenses, in the form of
dividends to its shareholders. The Fund declares dividends from net investment
income on every business day. Dividends on the Fund are paid monthly. Capital
gains, if any, for the Fund are distributed at least annually.
The Fund contemplates declaring as dividends each year all or substantially all
of its taxable income, including its net capital gain (the excess of long-term
capital gain over short-term capital loss). You will be subject to income tax on
these distributions regardless of whether they are paid in cash or reinvested in
additional shares. Distributions attributable to the net capital gain of the
Fund will be taxable to you as long-term capital gain, regardless of how long
you have held your shares. Other Fund distributions will generally be taxable as
ordinary income.
The Fund expects the dividends will primarily consist of ordinary income or, if
any, short-term capital gains as opposed to long-term capital gains.
You should note that if you purchase shares just prior to a capital gain
distribution, the purchase price will reflect the amount of the upcoming
distribution, but you will be taxable on the entire amount of the distribution
received, even though, as an economic matter, the distribution simply
constitutes a return of capital. This is known as "buying into a dividend."
The one major exception to these tax principles is that distributions on, and
sales, exchanges and redemptions of, shares held in an IRA (or other
tax-qualified plan) will not be currently taxable.
Taxable dividends paid in January may be taxable as if they had been paid the
previous December. Each year you will receive in the mail federal tax
information on distributions paid by the Fund.
Generally, shareholders may also be subject to state and local taxes on
distributions and redemptions. State income taxes may not apply, however, to the
portions of the Fund's distributions, if any, that are attributable to interest
on U.S. Government securities or on securities of a particular state.
11
<PAGE> 15
The following additional information about the Fund is available to you free
upon request:
Annual/Semi-Annual Reports:
The Fund's annual and semi-annual reports to shareholders contain detailed
information on the Fund's investments. In the annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected the Fund's performance during its last fiscal year.
Statement of Additional Information (SAI):
The SAI provides more detailed information about the Fund, including their
operations and investment policies. It is incorporated by reference, and is
legally considered a part of this prospectus.
You can get free copies of Annual and Semi-Annual Reports and the SAI, request
other information and discuss your questions about the Kent Funds by contacting
a broker or other financial institution that sells the Kent Funds. In addition,
you may contact the Kent Funds at: KENT FUNDS, P.O. BOX 102201, COLUMBUS, OHIO
43218-2201 or:
TELEPHONE: 1-800-633-KENT (5368)
INTERNET: HTTP://WWW.KENTFUNDS.COM*
You can review the Fund's reports and SAI at the Public Reference Room of the
Securities and Exchange Commission. You can get copies:
- For a fee, by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009 or calling 1-800-SEC-0330.
- At no charge from the Commission's Website at http://www.sec.gov
* The Fund's website is not part of this Prospectus.
Investment Company Act file No. 811-4824
KKF-0391 (6/00)
