FREMONT MUTUAL FUNDS
THE FOLLOWING SUPPLEMENTS the Fremont Global Fund description ON PAGES 2 AND 3.
Fremont Investment Advisors, Inc. ("the Advisor") has allocated a portion of the
Fremont Global Fund's (the "Fund") assets to each of three new sub-advisors. The
Advisor selected these sub-advisors based on its own analyses and experience in
determining which sub-advisors will most likely make specific portfolio
securities selection which, in the aggregate, will achieve the desired and
defined objectives of the Fund. The Advisor will continue to have asset
allocation responsibility and management over the current portfolio managers to
the Fund, as well as oversight over the new sub-advisors. The portion of Fund
assets allocated by the Advisor to the sub-advisors may be reallocated (or new
sub-advisors introduced in response to changing market conditions or sub-advisor
performance), in an attempt to improve the Fund's overall performance.
Effective April 19, 1999, Mellon Capital Management Corporation and Pacific
Investment Management Company were engaged by the Advisor to manage certain
sectors of the Fund. The Advisor and its team of portfolio managers will
continue to oversee the Fund as a whole.
Mellon Capital Management Corporation ("Mellon Capital"), 595 Market Street,
Suite 3000, San Francisco, California, 94105, was founded in 1983 and is a
leading innovator in the investment industry with over $74 billion in assets
under management as of December 31, 1998. Mellon Capital uses global,
quantitatively based investment strategies in managing assets for both
institutional and private investors. Mellon Capital's mutual fund business
includes The Dreyfus Corporation, Founders Asset Management and, in the
European community, Newton Management Limited.
Mellon Capital utilizes a global tactical asset allocation strategy ("GTAA").
This asset allocation model first actively allocates assets across equity,
fixed-income and money market securities and then across the markets of the
United States, United Kingdom, Japan, France, Germany, The Netherlands,
Switzerland, Austria and Canada. Each of these three asset categories is
represented in Mellon Capital's portion of Fund assets by a broad holding of
marketable securities, generally reflecting components of broad market
indices.
Lex C. Huberts will manage Mellon Capital's portion of Fund assets, using the
GTAA strategy. Mr. Huberts is Director of Asset Allocation Strategies at
Mellon Capital, and is responsible for its U.S. and global asset allocation
strategies (totaling $24 billion). He also manages the applicable investment
departments. Mr. Huberts has 14 years of investment experience, which
includes developing and implementing value-added investment strategies. Prior
to joining Mellon Capital, eight years of Mr. Huberts' experience in the
investment industry consists of the following positions: with Concord Capital
in San Mateo, California as a Quantitative Analyst and Investment Advisor;
with Zacks Investment Research in Chicago as a Consultant; with Amro Bank in
Amsterdam, The Netherlands as Strategist, and with the Dutch Ministry of
Finance as a Policy Advisor. Mr. Huberts is a Chartered Financial Analyst.
Pacific Investment Management Company ("PIMCO"), 840 Newport Center Drive,
Newport Beach, California, 92660, is a leading institutional money manager
with over $158 billion assets under management as of December 31, 1998. PIMCO
was established in 1971 to offer separate account management services
primarily for employee benefit plans, endowments and foundations.
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In managing its portion of Fund assets, PIMCO will invest in a portfolio of
fixed-income securities denominated in major foreign currencies, baskets of
foreign currencies and the U.S. dollar. Under normal circumstances, at least
65% of the portfolio's assets will be invested in fixed-income securities of
issuers located in at least three countries (one of which may be the United
States). Depending on PIMCO's outlook for interest rates and currency trends,
investments in the securities of issuers located outside the United States
will normally vary between 25% and 75% of the portfolio's assets. PIMCO may
also invest up to 10% of its assets in corporate debt securities rated below
investment grade; however, these securities must be rated B or higher by
Moody's or S&P. Based on PIMCO's forecast for interest rates, the average
duration of the securities in the portfolio will generally be vary between
three to six years.
Lee R. Thomas III, Managing Director of PIMCO, will manage PIMCO's portion of
Fund assets. Mr. Thomas, who joined PIMCO in 1995, was previously associated
with Investcorp, an international investment bank, as a member of its
management committee and was responsible for global securities and foreign
exchange trading. Prior to Investcorp, he was associated with Goldman Sachs,
where he was an executive director in the fixed-income division in its London
office.
On June 11, 1999, Fremont Global Fund shareholders voted to approve a new
sub-advisory arrangement in which Kern Capital Management LLC will provide
investment sub-advisory services to the Fund.
Kern Capital Management LLC ("KCM"), 114 W. 47th Street, Suite 1926, New
York, New York, 10036, was founded in 1997 and is partially owned by the
Advisor. KCM is an investment management firm specializing in small cap and
micro-cap companies, and had approximately $405 million in assets under
management as of December 31, 1998.
KCM manages its portion of Fund assets in two market sectors, a small cap
account and a micro-cap account. These accounts invest in equity securities
of U.S. companies with relatively small capitalization. The small cap account
will consist of companies with market capitalizations ranging from $10
million to $2 billion. The micro-cap account will consist of companies with
market capitalizations of less than $550 million.
The portfolio management team for the small cap and micro-cap sectors of the
Fund consists of Robert E. Kern Jr., David G. Kern, and Judy R. Finger, whose
investment experience is as follows:
Robert E. Kern, president and CEO of KCM, has over 30 years of investment
management experience. Prior to co-founding KCM, Bob Kern was employed as a
portfolio manager by Morgan Grenfell Asset Management, Inc. from 1986 to
1997, where he was the head of its small capitalization equities team.
David G. Kern, executive vice president and co-founder of KCM, was a vice
president at Founders Asset Management, Inc. from 1995 to 1997, where he was
the portfolio manager for the Founders Discovery Fund, a mutual fund
dedicated to investing in small cap and micro-cap stocks. David Kern also
served as vice president and assistant portfolio manager for the Delaware
Management Company of Philadelphia, Pennsylvania from 1990 through 1994. He
received his Chartered Financial Analyst designation in 1993.
Judy R. Finger, senior vice president of KCM, joined KCM in 1997. From 1995
to 1997, she was vice president and assistant portfolio manager for the
Delaware Management Company of Philadelphia, Pennsylvania, and was
responsible for more than $500 million in micro-, small and mid-cap stock
investments. She was also employed as a senior analyst at Fred Alger
<PAGE>
Management located in New York from 1992 to 1995. She received her Chartered
Financial Analyst designation in 1994.
Effect on Aggregate Fees: As compensation for their services, the Advisor (not
the Fund) pays each sub-advisor an annual fee calculated as a percentage of the
average daily net assets of the portion of Fund assets that is managed by the
sub-advisor (see table below). The Advisor reserves the authority to increase or
decrease the amount of Fund assets managed by each sub-advisor.
Mellon Capital Management Corporation 0.50% on the first $100 million;
0.40% on the next $100 million;
0.30% on the next $100 million;
0.20% on the remaining balance
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Pacific Investment Management Company 0.30%
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Kern Capital Management LLC 0.50%
<PAGE>
THE FOLLOWING SUPPLEMENTS the Fremont Emerging Markets Fund description ON PAGES
8 AND 9.
Effective May 3, 1999, Nicholas-Applegate Capital Management (Hong Kong) LLC
("NACM"), the sub-advisor to the Fremont Emerging Markets Fund was acquired by,
and became a member, of the Colonial Limited group of companies. The acquired
NACM entity now operates under the name CMG First State (Hong Kong) LLC ("CMG"),
3/F-30 Cannon Street, London, EC4M6YQ, United Kingdom. Henry Thornton and his
entire team in Asia and the U.K. will continue with the new organization under
the Colonial Limited ownership and will continue to be the portfolio manager
responsible for the day-to-day management of the Fremont Emerging Markets Fund.
Colonial Limited is a diverse international financial services group. Founded in
Australia in 1873, Colonial Limited has operated in New Zealand, the United
Kingdom and the Fiji Islands for more than 100 years. During the past decade, it
has expanded into Hong Kong, Indonesia, Malaysia, Thailand, the Philippines,
mainland China, Vietnam and, more recently, Singapore. Colonial operates core
businesses in life insurance, pensions, banking and fund management. Colonial
was ranked the top funds management group in Australia in 1998 and at December
31, 1998 had client funds under discretionary management of over US$ 17.5
billion.
Currently, the Advisor's management fee is 1.00% per annum, based on the Fund's
average daily net assets and is paid monthly. CMG's fees of are paid by the
Advisor and not by the Fund. There will be no increase in advis ory fees to the
Fund and its shareholders. The Advisor will pay CMG a fee computed at the annual
rate of 0.50% (50 basis points) of the average daily net assets of the portion
of Fund assets allocated to CMG. The Advisor or the Fund upon 30 days' written
notice may terminate the portfolio management agreement with CMG. The Advisor
has day-to-day authority to increase or decrease the amount of Fund assets under
management by CMG.
THE FOLLOWING INFORMATION SUPPLEMENTS "MONITORING YOUR INVESTMENT," ON PAGE 32.
Managing Your Account Online at www.fremontfunds.com
Fremont offers Online Account Access 24 hours a day, seven days a week, at our
secure Web site www.fremontfunds.com. As a shareholder, you can:
+ Check your current Fremont Funds account balance.
+ View your entire portfolio of Fremont Funds accounts.
+ Buy, exchange*, or sell shares.
+ View up to 80 previous transactions.
+ Order duplicate confirmation statements.
+ Order duplicate tax forms.
+ Reorder checkbooks. (Available only for the Fremont Money Market, Fremont
Bond Fund, and Fremont California Intermediate Tax-Free Fund.)
*Some restrictions may apply.
The Fremont Funds Web site also provides in-depth information to help
shareholders track their mutual fund investments, including:
+ Daily fund prices and performance
+ Fund portfolio data and prospectuses
+ Portfolio manager biographies and commentaries
+ Fund distribution schedules
+ Account applications and forms
+ Feature articles
