The Chaconia Income & Growth Fund, Inc.
File No. 33-37426
Supplement dated July 7, 2000 to
Prospectus dated April 28, 2000
The section entitled "WHO MANAGES THE FUNDS?" in the prospectus is amended
and supplemented as follows:
On June 20, 2000, the shareholders voted to approve a new investment
management agreement with Earnest Partners, LLC. Consequently, Earnest Partners,
LLC (the "I&G Manager") is the investment adviser to the Chaconia I&G Fund. The
I&G Manager began managing the Fund's assets on July 5, 2000. The I&G Manager's
address is:
Earnest Partners, LLC
75 Fourteenth Street, Suite 2300
Atlanta, Georgia 30309
The I&G Manager was organized as a Georgia limited liability company
on December 22, 1997 and registered as an investment advisor on January 12,
1999. As the investment adviser to the Chaconia I&G Fund, the I&G Manager
manages the investment portfolio of the Chaconia I&G Fund. As compensation for
its services, the I&G Manager receives a monthly fee at an annual rate of the
greater of $50,000 or 0.75 of 1% on first $10 million, 0.50 of 1% on next $10
million and 0.25 of 1% over $20 million of the Chaconia I&G Fund's average daily
net assets. This compensation is identical to the compensation paid to the prior
investment advisor for the I&G Fund. During the last fiscal year, the Chaconia
I&G Fund would have paid the I&G Manager an annual investment advisory fee equal
to 0.38% of average net assets.
Chaconia Fund Services, Inc. (the "ACS Manager") is the investment
advisor for the Chaconia ACS Fund. The ACS Manger's address is:
Chaconia Fund Services, Inc.
1000 Brickell Avenue, Suite 600
Miami, Florida 33131
The ACS Manager was incorporated as a Delaware corporation on December
8, 1997 and registered as an investment advisor on July 8, 1999. As the
investment advisor to the Chaconia ACS Fund, the ACS Manager will manage the
investment portfolio of the Chaconia ACS Fund when it commences operations. The
ACS Manager is a wholly owned subsidiary of the Trinidad and Tobago Unit Trust
Corporation.
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The Chaconia Income & Growth Fund, Inc.
File No. 33-37426
Supplement dated July 7, 2000 to
Statement of Additional Information dated April 28, 2000
The section entitled "I&G Fund Manager" in the Statement of Additional
Information is amended and supplemented as follows:
Subject to supervision by the Board of Directors, investment
management services are provided to the Chaconia I&G Fund by Earnest Partners,
LLC (the "I&G Fund Manager") pursuant to an investment management agreement
executed by the Chaconia I&G Fund on June 20, 2000 ("I&G Contract"). The I&G
Fund Manager began managing the Fund's assets on July 5, 2000.
Under the I&G Contract, the I&G Fund Manager provides a continuous
investment program for the Chaconia I&G Fund and makes decisions and places
orders to buy, sell or hold particular securities and futures. The I&G Fund
Manager also supervises all matters relating to the operation of the Chaconia
I&G Fund and provides clerical staff, office space, equipment and services. As
compensation for its services, the I&G Fund Manager receives a monthly fee at an
annual rate of the greater of $50,000 or 0.75 of 1% on first $10 million, 0.50
of 1% on next $10 million and 0.25 of 1% over $20 million of the Chaconia I&G
Fund's average daily net assets. During the fiscal years ended December 31,
1999, 1998 and 1997, the Chaconia I&G Fund would have paid the I&G Fund Manager
advisory fees of $216,700, $147,275 and $93,537, respectively. These fees are
the same as those earned by the prior investment advisor.
A Special Meeting of Shareholders was held on June 20, 2000, at which
time the shareholders voted to approve the I&G Contract. The I&G Contract was
also approved by the Board of Directors and by a majority of the directors who
neither are interested persons of the Chaconia I&G Fund nor have any direct or
indirect financial interest in the I&G Contract or any agreement related
thereto.
The I&G Fund Manager, a Georgia limited liability company organized on
December 22, 1997, is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended. The I&G Fund Manager is a wholly owned
subsidiary of Earnest Holdings, LLC, a Delaware limited liability company. The
principal executive office of Earnest Holdings, LLC is located at the same
address as the I&G Fund Manager. As of March 31, 2000, the I&G Fund Manager had
$1,100,000,000 in assets under management. The I&G Fund Manager provides
investment counsel, utilizing investment strategies substantially similar to
that of the Fund, to individuals, banks and thrift institutions, pension and
profit sharing plans, trusts, estates, charitable organizations, and
corporations.
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The I&G Contract shall be specifically approved at least annually (i)
by a majority vote of the Independent Directors cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by the Board of
Directors or by vote of a majority of the outstanding voting securities of the
Chaconia I&G Fund. The I&G Contract will remain in effect until terminated by
either party. The I&G Contract is terminable by vote of the Board of Directors
or by the holders of a majority of the outstanding voting securities of the
Chaconia I&G Fund at any time without penalty, on 30 days' written notice to the
I&G Fund Manager. The I&G Contract also may be terminated by the I&G Fund
Manager on 30 days' written notice to the Chaconia I&G Fund. The I&G Contract
terminates automatically upon its assignment (as defined in the 1940 Act).
Under the I&G Contract, the I&G Fund Manager will not be liable to the
Chaconia I&G Fund for any error of judgment by the I&G Fund Manager or any loss
sustained by the Chaconia I&G Fund except in the case of a breach of fiduciary
duty with respect to the receipt of compensation for services (in which case any
award of damages will be limited as provided in the 1940 Act) or of willful
misfeasance, bad faith, gross negligence or reckless disregard of duty.
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