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Rule 497(e)
Reg. No. 33-11371
File No. 811-4942
HEARTLAND VALUE FUND
HEARTLAND SMALL CAP CONTRARIAN FUND
HEARTLAND VALUE & INCOME FUND
HEARTLAND U.S. GOVERNMENT SECURITIES FUND
SUPPLEMENT DATED AUGUST 9, 1996 TO
PROSPECTUS DATED MAY 1, 1996
Value & Income Fund Adds A Co-Portfolio Manager
Effective immediately, Ronald B. Saba, CFA, will be joining William J.
Nasgovitz as a co-portfolio manager of the Value & Income Fund. Mr. Saba has
been with Heartland Advisors as Vice President/Research and a portfolio manager
for advisory clients since March, 1994. Prior to joining Heartland Advisors,
Mr. Saba was a Portfolio Manager and Senior Analyst with Household Commercial
Financial Services, Inc.
Proposed Changes to the Value & Income Fund's Investment Program
At a meeting of its shareholders, the Value & Income Fund will be seeking
approval of a change to its fundamental investment objective from "capital
growth and current income" to "capital appreciation and current income." The
Fund will also be seeking approval of a change to an investment restriction
that would permit the Fund to invest up to 10% of its total assets in Real
Estate Investment Trusts ("REITs"). For more information on REITs, refer to
page 19 of the Prospectus.
If the above changes are approved by the Fund's shareholders, it is anticipated
that the Fund's name would be changed to the Heartland Value Plus Fund, and
further refinements of the Fund's investment program, as discussed in this
Supplement, would be effective no later than October 11, 1996. Absent
shareholder approval, the Fund will continue to be managed in accordance with
the policies and investment program described in the Prospectus.
Currently, the Value & Income Fund may invest in equity and debt securities,
with the proportion of the Fund's investments in each type of security varying
from time to time in accordance with Heartland Advisors' assessment of economic
conditions and investment opportunities. In an effort to more clearly describe
the investment style of the Fund, Heartland Advisors anticipates that the
Fund's revised investment program would provide that, under normal market
conditions, the Fund would invest at least 65% of its total assets in equity
securities. Primarily, the Fund would invest in income-producing equity
securities of smaller companies, those with market capitalizations of less than
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$750 million. Such equity securities would continue to be selected on a value
basis by Heartland Advisors in accordance with the factors described in the
Prospectus.
Equity securities in which the Fund would be permitted to invest include common
stock, convertible debt, preferred stock, warrants or other securities
exchangeable for shares of common stock, and other equity securities, including
real estate investment trusts. Equity securities of companies with smaller
market capitalizations may involve a higher degree of risk than investments in
the general equity markets in that such securities may be subject to greater
price volatility and may have less market liquidity than equity securities of
companies with larger market capitalizations.
In addition, the Fund would be permitted to invest up to 35% of its total
assets in debt securities. The Fund would continue to be able to invest up to
25% of its assets in non-investment grade debt securities as described in the
Prospectus.
