<PAGE> 1
HIGHMARK FUNDS
EQUITY FUNDS
FIXED INCOME FUNDS
SUPPLEMENT DATED FEBRUARY 9, 1998 TO
RETAIL SHARES PROSPECTUS DATED NOVEMBER 30, 1997
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
CAPITALIZED TERMS USED HEREIN HAVE THE SAME MEANING AS IN THE PROSPECTUS
This supplement provides new and additional information beyond that
contained in the Prospectus and should be retained and read in conjunction with
such Prospectus.
Effective May 1, 1998, the information under "Class A Fee Table" with
respect to the California Intermediate Tax-Free Bond Fund is amended as follows:
CLASS A FEE TABLE
<TABLE>
<CAPTION>
CALIFORNIA
INCOME VALUE EMERGING INTERMEDIATE- INTERMEDIATE
EQUITY MOMENTUM GROWTH GROWTH TERM BOND BOND BALANCED TAX-FREE
FUND FUND FUND FUND FUND FUND FUND BOND FUND
------- -------- ------- -------- ------------- ------- -------- ------------
CLASS A CLASS A CLASS A CLASS A CLASS A CLASS A CLASS A CLASS A
SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES
------- -------- ------- -------- ------------- ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES(a)
Maximum Sales Load Imposed on
Purchases (as a percentage of
offering price)................... 4.50% 4.50% 4.50% 4.50% 3.00% 3.00% 4.50% 3.00%
Maximum Sales Load Imposed on
Reinvested Dividends (as a
percentage of offering price)..... 0% 0% 0% 0% 0% 0% 0% 0%
Deferred Sales Load (as a percentage
of original purchase price or
redemption proceeds, as
applicable)(b).................... 0% 0% 0% 0% 0% 0% 0% 0%
Redemption Fees (as a percentage of
amount redeemed, if
applicable)(c).................... 0% 0% 0% 0% 0% 0% 0% 0%
Exchange Fee(a)..................... $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
ANNUAL OPERATING EXPENSES (as a
percentage of net assets)
Management Fees (after voluntary
reduction)(d)................... 0.60% 0.60% 0.60% 0.80% 0.50% 0.50% 0.60% 0.20%
12b-1 Fees (after voluntary
reduction)(e)................... 0.25% 0.25% 0.25% 0.25% 0.00% 0.00% 0.25% 0.00%
Other Expenses (after voluntary
reduction)(f)................... 0.31% 0.21% 0.30% 0.23% 0.25% 0.25% 0.30% 0.27%
---- ---- ---- ---- ---- ---- ---- ----
Total Fund Operating
Expenses(g)..................... 1.16% 1.06% 1.15% 1.28% 0.75% 0.75% 1.15% 0.47%
==== ==== ==== ==== ==== ==== ==== ====
</TABLE>
- ---------------
Example: You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period.
<PAGE> 2
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Income Equity Fund Class A Shares........................ $56 $80 $106 $180
Value Momentum Fund Class A Shares....................... $55 $77 $101 $169
Growth Fund Class A Shares............................... $56 $80 $105 $178
Emerging Growth Fund Class A Shares...................... $57 $84 $112 $193
Intermediate-Term Bond Fund Class A Shares............... $37 $53 $ 70 $120
Bond Fund Class A Shares................................. $37 $53 $ 70 $120
Balanced Fund Class A Shares............................. $56 $80 $105 $178
California Intermediate Tax-Free Bond Fund Class A
Shares................................................. $35 $45 $ 56 $ 87
</TABLE>
The purpose of the tables above is to assist an investor in the Funds in
understanding the various costs and expenses that a Shareholder will bear
directly or indirectly. For a more complete discussion of each Fund's annual
operating expenses, see SERVICE ARRANGEMENTS below. THE FOREGOING EXAMPLE SHOULD
NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE SHOWN.
2
<PAGE> 3
Long-term shareholders of Class A Shares may pay more than the economic
equivalent of the maximum front-end sales charges otherwise permitted by rules
of the National Association of Securities Dealers, Inc.
(a) Certain entities (including Union Bank of California and its affiliates)
making investments in the Funds on behalf of their customers may charge
customers fees for services provided in connection with the investment in,
redemption of, and exchange of Shares. (See HOW TO PURCHASE SHARES, EXCHANGE
PRIVILEGES, REDEMPTION OF SHARES, and SERVICE ARRANGEMENTS below.)
(b) A Contingent Deferred Sales Charge of 1.00% will be assessed against the
proceeds of any redemption request relating to Class A Shares of the Funds
that were purchased without a sales charge in reliance upon the waiver
accorded to purchases in the amount of $1 million or more, but only where
such redemption request is made within one year of the date the Shares were
purchased.
(c) A wire redemption charge of $15 is deducted from the amount of a wire
redemption payment made at the request of a Shareholder. (See REDEMPTION OF
SHARES below.)
(d) Absent voluntary fee waivers, MANAGEMENT FEES would be 0.50% for the Class A
Shares of the California Intermediate Tax-Free Bond Fund.
(e) As indicated under SERVICE ARRANGEMENTS -- the Distribution Plan below, the
Distributor may voluntarily reduce the 12b-1 fee. Absent voluntary fee
waivers, 12b-1 fees would 0.25% for the Intermediate-Term Bond Fund, Bond
Fund and California Intermediate Tax-Free Bond Fund. The Distributor
reserves the right to terminate its waiver at any time in its sole
discretion.
(f) Absent voluntary fee waivers, OTHER EXPENSES would be: 0.47% for the Class A
Shares of the Growth Fund and the Balanced Fund, 0.48% for the Class A
Shares of the Income Equity Fund and the Value Momentum Fund, 0.50% for the
Class A Shares of the Emerging Growth Fund, 0.49% for the Class A Shares of
the Intermediate-Term Bond Fund, 0.51% for the Class A Shares of the Bond
Fund, and 0.52% for the Class A Shares of the California Intermediate
Tax-Free Bond Fund.
(g) Absent voluntary fee waivers, TOTAL FUND OPERATING EXPENSES would be: 1.32%
for the Class A Shares of the Growth Fund and the Balanced Fund, 1.33% for
the Class A Shares of the Income Equity Fund and the Value Momentum Fund,
and 1.55% for the Class A Shares of the Emerging Growth Fund, 1.24% for the
Class A Shares of the Intermediate-Term Bond Fund, 1.26% for the Class A
Shares of the Bond Fund and 1.27% for the Class A Shares of the California
Intermediate Tax-Free Bond Fund.
3
HM-R-298
<PAGE> 4
HIGHMARK FUNDS
EQUITY FUNDS
FIXED INCOME FUNDS
SUPPLEMENT DATED FEBRUARY 9, 1998 TO
FIDUCIARY SHARES PROSPECTUS DATED NOVEMBER 30, 1997
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
CAPITALIZED TERMS USED HEREIN HAVE THE SAME MEANING AS IN THE PROSPECTUS
This supplement provides new and additional information beyond that
contained in the Prospectus and should be retained and read in conjunction with
such Prospectus.
Effective May 1, 1998, the information under "Fee Table" with respect to
the California Intermediate Tax-Free Bond Fund is amended as follows:
FEE TABLE
<TABLE>
<CAPTION>
VALUE CONVERTIBLE
INCOME MOMENTUM BLUE CHIP GROWTH EMERGING INTERNATIONAL SECURITIES
EQUITY FUND FUND GROWTH FUND FUND GROWTH FUND EQUITY FUND FUND
FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY
SHARES SHARES SHARES SHARES SHARES SHARES SHARES
----------- --------- ----------- --------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER
TRANSACTION
EXPENSES(a)
Maximum Sales Load
Imposed on
Purchases (as a
percentage of
offering price)... 0% 0% 0% 0% 0% 0% 0%
Maximum Sales Load
Imposed on
Reinvested
Dividends (as a
percentage of
offering price)... 0% 0% 0% 0% 0% 0% 0%
Deferred Sales Load
(as a percentage
of original
purchase price or
redemption
proceeds, as
applicable)....... 0% 0% 0% 0% 0% 0% 0%
Redemption Fees (as
a percentage of
amount redeemed,
if
applicable)(b).... 0% 0% 0% 0% 0% 0% 0%
Exchange Fee(a)..... $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
<CAPTION>
CALIFORNIA
INTERMEDIATE- GOVERNMENT INTERMEDIATE
TERM BOND BOND SECURITIES BALANCED TAX-FREE
FUND FUND FUND FUND BOND FUND
FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY
SHARES SHARES SHARES SHARES SHARES
------------- --------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C>
SHAREHOLDER
TRANSACTION
EXPENSES(a)
Maximum Sales Load
Imposed on
Purchases (as a
percentage of
offering price)... 0% 0% 0% 0% 0%
Maximum Sales Load
Imposed on
Reinvested
Dividends (as a
percentage of
offering price)... 0% 0% 0% 0% 0%
Deferred Sales Load
(as a percentage
of original
purchase price or
redemption
proceeds, as
applicable)....... 0% 0% 0% 0% 0%
Redemption Fees (as
a percentage of
amount redeemed,
if
applicable)(b).... 0% 0% 0% 0% 0%
Exchange Fee(a)..... $ 0 $ 0 $ 0 $ 0 $ 0
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
VALUE CONVERTIBLE
INCOME MOMENTUM BLUE CHIP GROWTH EMERGING INTERNATIONAL SECURITIES
EQUITY FUND FUND GROWTH FUND FUND GROWTH FUND EQUITY FUND FUND
FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY
SHARES SHARES SHARES SHARES SHARES SHARES SHARES
----------- --------- ----------- --------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ANNUAL OPERATING
EXPENSES (as a
percentage of net
assets)
Management Fees
(after voluntary
reduction)(c)..... 0.60% 0.60% 0.60% 0.60% 0.80% 0.95% 0.60%
12b-1 Fees.......... 0% 0% 0% 0% 0% 0% 0%
Other Expenses
(after voluntary
reduction)(d)..... 0.31% 0.21% 0.22% 0.30% 0.23% 0.41% 0.25%
---- ---- ---- ---- ---- ---- ----
Total Fund Operating
Expenses (after
voluntary
reduction)(e)..... 0.91% 0.81% 0.82% 0.90% 1.03% 1.36% 0.85%
==== ==== ==== ==== ==== ==== ====
<CAPTION>
CALIFORNIA
INTERMEDIATE- GOVERNMENT INTERMEDIATE
TERM BOND BOND SECURITIES BALANCED TAX-FREE
FUND FUND FUND FUND BOND FUND
FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY
SHARES SHARES SHARES SHARES SHARES
------------- --------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C>
ANNUAL OPERATING
EXPENSES (as a
percentage of net
assets)
Management Fees
(after voluntary
reduction)(c)..... 0.50% 0.50% 0.50% 0.60% 0.20%
12b-1 Fees.......... 0% 0% 0% 0% 0%
Other Expenses
(after voluntary
reduction)(d)..... 0.25% 0.25% 0.25% 0.30% 0.27%
---- ---- ---- ---- ----
Total Fund Operating
Expenses (after
voluntary
reduction)(e)..... 0.75% 0.75% 0.75% 0.90% 0.47%
==== ==== ==== ==== ====
</TABLE>
2
<PAGE> 6
EXAMPLE: You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Income Equity Fund Fiduciary Shares......................... $ 9 $29 $50 $112
Value Momentum Fund Fiduciary Shares........................ $ 8 $26 $45 $100
Blue Chip Growth Fund Fiduciary Shares...................... $ 8 $26 $46 $101
Growth Fund Fiduciary Shares................................ $ 9 $29 $50 $111
Emerging Growth Fund Fiduciary Shares....................... $11 $33 $57 $126
International Equity Fund Fiduciary Shares.................. $14 $43 $74 $164
Convertible Securities Fund Fiduciary Shares................ $ 9 $27 $47 $105
Intermediate-Term Bond Fund Fiduciary Shares................ $ 8 $24 $42 $ 93
Bond Fund Fiduciary Shares.................................. $ 8 $24 $42 $ 93
Government Securities Fund Fiduciary Shares................. $ 8 $24 $42 $ 93
Balanced Fund Fiduciary Shares.............................. $ 9 $29 $50 $111
California Intermediate Tax-Free Bond Fund Fiduciary
Shares.................................................... $ 5 $15 $26 $ 59
</TABLE>
The purpose of the tables above is to assist an investor in the Funds in
understanding the various costs and expenses that a Shareholder will bear
directly or indirectly. For a more complete discussion of each Fund's annual
operating expenses, see SERVICE ARRANGEMENTS below. THE FOREGOING EXAMPLE SHOULD
NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE SHOWN.
- ---------------
(a) Certain entities (including Union Bank of California and its affiliates)
making investments in the Funds on behalf of their customers may charge
customers fees for services provided in connection with the investment in,
redemption of, and exchange of Shares. (See PURCHASE AND REDEMPTION OF
SHARES, EXCHANGE PRIVILEGES, and SERVICE ARRANGEMENTS below.)
(b) A wire redemption charge of $15 is deducted from the amount of a wire
redemption payment made at the request of a Shareholder. (See REDEMPTION OF
SHARES below.)
(c) Absent voluntary fee waivers, MANAGEMENT FEES would be, 0.50% for the
Fiduciary Shares of the California Intermediate Tax-Free Bond Fund.
(d) Absent voluntary fee waivers, OTHER EXPENSES would be 0.47% for the
Fiduciary Shares of the Growth and Balanced Funds, 0.48% for the Fiduciary
Shares of the Income Equity and Value Momentum Funds, 0.49% for the
Fiduciary Shares of the Blue Chip Growth and Intermediate-Term Bond Funds,
0.50% for the Fiduciary Shares of the Emerging Growth Fund, 0.68% for the
Fiduciary Shares of the International Equity Fund, 0.52% for the Fiduciary
Shares of the Convertible Securities Fund, 0.51% for the Fiduciary Shares of
the Bond Fund, 0.52% for the Fiduciary Shares of the Government Securities
Fund and 0.52% for the Fiduciary Shares of the California Intermediate
Tax-Free Bond Fund.
(e) Absent voluntary fee waivers, TOTAL FUND OPERATING EXPENSES would be: 1.07%
for the Fiduciary Shares of the Growth and Balanced Funds, 1.08% for the
Fiduciary Shares of the Income Equity and Value Momentum Funds, 1.09% for
the Fiduciary Shares of the Blue Chip Growth Fund, 1.30% for the Fiduciary
Shares of the Emerging Growth Fund, 1.63% for the Fiduciary Shares of the
International Equity Fund, 1.12% for the Fiduciary Shares of the Convertible
Securities Fund, 0.99% for the Fiduciary Shares of the Intermediate-Term
Bond Fund, 1.01% for the Fiduciary Shares of the Bond Fund, 1.02% for the
Fiduciary Shares of the Government Securities Fund and 1.02% for the
Fiduciary Shares of the California Intermediate Tax-Free Bond Fund.
HMF 298-A
3
