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COMPASS CAPITAL FUNDS(SM)
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION
DATED MARCH 29, 1997,
AS PREVIOUSLY SUPPLEMENTED JULY 8, 1997
The section "Purchase and Redemption Information" has been amended as follows:
The seventh paragraph of text under the subsection "Computation of Public
Offering Prices for Investor A Shares of the Non-Money Market Portfolios" has
been amended to read in its entirety as follows:
Investor A Shares of the Non-Money Market Portfolios will be made
available to plan participants at net asset value with the waiver of the initial
sales charge on purchases through an eligible 401(k) plan participating in a
Merrill Lynch 401(k) Program (an "ML 401(k) Plan") if:
The ninth paragraph of text under the subsection "Computation of Public
Offering Prices for Investor A Shares of the Non-Money Market Portfolios" has
been amended to read in its entirety as follows:
Investor B Shares of the Non-Money Market Portfolios will be made
available to plan participants at net asset value with the waiver of the
contingent deferred sales charge if the shares were purchased through an ML
401(k) Plan if:
The section "Performance Information" has been amended as follows:
The fifth paragraph of text under the subsection "Miscellaneous" has been
amended to read in its entirety as follows:
The Fund may also from time to time include discussions or
illustrations of the effects of compounding in advertisements. "Compounding"
refers to the fact that, if dividends or other distributions on a Portfolio
investment are reinvested by being paid in additional Portfolio shares, any
future income or capital appreciation of a Portfolio would increase the value,
not only of the original investment in the Portfolio, but also of the additional
Portfolio shares received through reinvestment. The Fund may also include
discussions or illustrations of the potential investment goals of a prospective
investor, (including materials that describe general principles of investing,
such as asset allocation, diversification, risk tolerance, and goal setting,
questionnaires designed to help create a personal financial profile, worksheets
used to project savings needs based
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on assumed rates of inflation and hypothetical rates of return and action plans
offering investment alternatives) investment management techniques, policies or
investment suitability of a Portfolio (such as value investing, market timing,
dollar cost averaging, asset allocation, constant ratio transfer, automatic
account rebalancing, the advantages and disadvantages of investing in tax-
deferred and taxable investments), economic and political conditions and the
relationship between sectors of the economy and the economy as a whole, the
effects of inflation and historical performance of various asset classes,
including but not limited to, stocks, bonds and Treasury bills. From time to
time advertisements, sales literature, communications to shareholders or other
materials may summarize the substance of information contained in shareholder
reports (including the investment composition of a Portfolio), as well as the
views of the Portfolios' adviser and/or sub-advisers as to current market,
economy, trade and interest rate trends, legislative, regulatory and monetary
developments, investment strategies and related matters believed to be of
relevance to a Portfolio. In addition, selected indices may be used to
illustrate historic performance of select asset classes. The Fund may also
include in advertisements, sales literature, communications to shareholders or
other materials, charts, graphs or drawings which illustrate the potential risks
and rewards of investment in various investment vehicles, including but not
limited to, stocks, bonds, Treasury bills and shares of a Portfolio. In
addition, advertisements, sales literature, shareholder communications or other
materials may include a discussion of certain attributes or benefits to be
derived by an investment in a Portfolio and/or other mutual funds, benefits,
characteristics or services associated with a particular class of shares,
shareholder profiles and hypothetical investor scenarios, timely information on
financial management, tax and retirement planning and investment alternative to
certificates of deposit and other financial instruments. Such advertisements or
communicators may include symbols, headlines or other material which highlight
or summarize the information discussed in more detail therein. Materials may
include lists of representative clients of the Portfolios' investment adviser
and sub-advisers. Materials may refer to the CUSIP numbers of the various
classes of the Portfolios and may illustrate how to find the listings of the
Portfolios in newspapers and periodicals. Materials may also include
discussions of other Portfolios, products, and services.
This Supplement is dated July 16, 1997.
