HODGES FUND
SUPPLEMENT DATED APRIL 20, 1999 TO PROSPECTUS DATED AUGUST 1, 1998
Effective April 20, 1999, the Fund's shares will be sold without any front-end
sales charge. First Dallas Securities, the Fund's Distributor, has agreed to
waive a portion of the Fund's distribution (Rule 12b-1) fee, which permits a
payment to the Distributor of up to 0.50% of the Fund's average daily net assets
on an annual basis, so that the fee will not exceed 0.25% of this amount.
The following information revises and supplements the prospectus
EXPENSE TABLE (Prospectus page 2)
Expenses are one of several factors to consider when investing in a Fund. The
purpose of the following fee table is to provide an understanding of the various
costs and expenses which may be borne directly or indirectly by an investment in
the Funds. Actual expenses may be more or less than those shown.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases............................... None
Maximum Sales Load Imposed on Reinvested Dividends.................... None
Deferred Sales Load................................................... None
Redemption Fees....................................................... None
Exchange Fee.......................................................... None
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Investment Advisory Fees 0.85%
12b-1 Fees 0.25%
Other expenses 0.57%
Total Operating Expenses 1.67%
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EXAMPLE
This table illustrates the net transaction and operating expenses that would be
incurred by an investment in the Funds over different time periods assuming a
$10,000 investment, a 5% annual return, and redemption at the end of each time
period.
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$170 $526 $907 $1976
THE EXAMPLE SHOWN ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. IN
ADDITION, FEDERAL REGULATIONS REQUIRE THE EXAMPLE TO ASSUME A 5% ANNUAL RETURN,
BUT THE FUNDS' ACTUAL RETURN MAY BE HIGHER OR LOWER.
MANAGEMENT OF THE FUND (Prospectus page 7)
Don W. Hodges and Craig D. Hodges are co-managers of the Fund's investment
portfolio. Don Hodges has over 39 years of experience in the securities
brokerage industry and previously served as President of a large regional
brokerage firm. Craig Hodges was a founder and has been a senior officer of
First Dallas Securities, the broker-dealer affiliate of the Advisor, and the
Fund's distributor, since 1989, where he has managed individual and
institutional investment portfolios.
HOW TO INVEST IN THE FUND (Prospectus page 8)
The Fund's shares are offered continuously for purchase at the public offering
price, which is equal to the net asset value per share, without any front-end
sales charge. The minimum initial investment is $250 for regular and Individual
Retirement accounts ("IRAs"), with subsequent investments of at least $50.
Broker dealers and investment advisers may place orders for shares of the Fund
on behalf of clients by contacting the Distributor at 800-388-8512. If such
orders are placed by the client with the broker-dealer or adviser by 4:00 PM
Eastern time any day that the New York Stock Exchange is open for trading, it
will be confirmed at the applicable public offering price on that day.
Broker-dealers and advisers are responsible for placing orders promptly with the
Transfer Agent and for forwarding payment promptly.
Investors may be charged a fee if they effect transactions in fund shares
through a broker or agent. The Fund has authorized certain brokers to accept on
its behalf purchase and redemption orders. Such brokers are authorized to
designate intermediaries to accept orders on the Fund's behalf. The Fund will be
deemed to have received an order when an authorized broker or the broker's
authorized designee accept the order. Such customer orders will be priced at the
Fund's net asset value next computed after they are accepted by an authorized
broker or the broker's authorized designee.
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DISTRIBUTION AND SHAREHOLDER SERVICING PLAN (Prospectus page 12)
The Fund has adopted a Distribution and Shareholder Servicing Plan pursuant to
Rule 12b-1 under the Investment Company Act of 1940. Under that Plan, the Fund
is authorized to pay the Distributor a fee for the sale and distribution of the
Fund's shares and services it provides to shareholders. The maximum amount of
the fee authorized is 0.50% of the Fund's average daily net assets annually.
However, the Distributor is waiving a portion of the fee so that the fee will
not exceed 0.25% of such assets annually. Because these fees are paid out of the
Fund's assets on an ongoing basis, over time these fees increase the cost of
your investment and could cost more than paying other types of sales charges.
CHECK-A-MATIC PLAN (Prospectus page 12)
The minimum required automatic monthly investment is $50. This amount may be
revised or the Plan discontinued upon further notice to shareholders.
PERFORMANCE INFORMATION (Prospectus page 14)
In addition to total return, the performance of the Fund may be compared in
publications to (1) performance of various indices and investments for which
reliable performance data is available, and (2) to averages, performance
rankings, or other information prepared by recognized mutual fund statistical
services.
SHAREHOLDER INQUIRIES (Prospectus page 15)
Shareholder inquiries should be directed to the Fund at (800) 282-2340. You may
also contact the Fund at its website: http://www.hodgesfund.com.
