<PAGE>
THE PILLAR FUNDS
Prime Obligation Money Market Fund
U.S. Treasury Securities Money Market Fund
Tax-Exempt Money Market Fund
Fixed Income Fund
New Jersey Municipal Securities Fund
Pennsylvania Municipal Securities Fund
Equity Growth Fund
Equity Value Fund
Equity Income Fund
Balanced Fund
International Growth Fund
Class A and Class B Shares
Supplement dated July 28, 1997
to the Prospectus dated April 30, 1997
The Prospectus, dated April 30, 1997, is hereby amended by the addition of the
following unaudited financial information for the Class A Shares and Class B
Shares of the Equity Growth Fund for the respective periods ended June 30, 1997.
Financial Highlights
The following table provides unaudited financial highlights for the Class A
Shares of the Equity Growth Fund for the period February 3, 1997 (commencement
of operations) to June 30, 1997 and Class B Shares of the Equity Growth Fund for
the period May 21, 1997 (commencement of operations) to June 30, 1997.
For a share outstanding throughout the period:
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES(1) SHARES(2)
--------- ---------
<S> <C> <C>
Net Asset Value Beginning of Period $10.00 $10.41
Net Investment Income -- $(0.01)
Realized and Unrealized Gains or Losses on Securities $ 0.86 $ 0.43
Distributions from Net Investment Income -- --
Distribution from Capital Gains -- --
Net Asset Value End of Period $10.86 $10.83
Total Return (+) 8.61% 4.34%
Net Assets End of Period (000) $96 $26
Ratio of Expenses to Average Net Assets 1.05% 1.80%
Ratio of Income to Average Net Assets 0.02% (0.78)%
Ratio of Expenses to Average Net Assets (Excluding Waivers) 1.12% 2.07%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES(1) SHARES(2)
--------- ---------
<S> <C> <C>
Ratio of Net Investment Income to Average Net Assets (0.05)% (1.05)%
(Excluding Waivers)
Portfolio Turnover Rate 52.52% 52.52%
Average Commission Rate(++) $.0636 $.0636
</TABLE>
- ----------
(+) Total Return does not reflect sales loads on Class A and Class B Shares.
(++) Average commission rate paid per share for portfolio security purchases and
sales during the period.
(1) The Equity Growth Fund Class A Shares commenced operations on February 3,
1997. All ratios are through June 30, 1997 and have been annualized.
(2) The Equity Growth Fund Class B Shares commenced operations on May 21, 1997.
All ratios are through June 30, 1997 and have been annualized.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
<PAGE>
THE PILLAR FUNDS
U.S. Treasury Securities Money Market Fund
Prime Obligation Money Market Fund
Tax-Exempt Money Market Fund
Fixed Income Fund
New Jersey Municipal Securities Fund
Pennsylvania Municipal Securities Fund
Intermediate-Term Government Securities Fund
Equity Growth Fund
Equity Value Fund
Equity Income Fund
Mid Cap Fund
International Growth Fund
Balanced Fund
Class I Shares
Supplement dated July 28, 1997
to the Prospectus dated April 30, 1997
The Prospectus, dated April 30, 1997, is hereby amended by the addition of the
following unaudited financial information for the Class I Shares of the Equity
Growth Fund for the respective periods ended June 30, 1997.
Financial Highlights
The following table provides unaudited financial highlights for the Class I
Shares of the Equity Growth Fund for the period February 3, 1997 (commencement
of operations) to June 30, 1997.
For a share outstanding throughout the period:
CLASS I
SHARES(1)
---------
Net Asset Value Beginning of Period $10.00
Net Investment Income $ 0.01
Realized and Unrealized Gains or Losses on Securities $ 0.84
Distributions from Net Investment Income $(0.01)
Distribution from Capital Gains --
Net Asset Value End of Period $10.84
Total Return 8.53%
Net Assets End of Period (000) $189,397
Ratio of Expenses to Average Net Assets 0.80%
Ratio of Income to Average Net Assets 0.29%
Ratio of Expenses to Average Net Assets (Excluding Waivers) 1.04%
<PAGE>
CLASS I
SHARES(1)
---------
Ratio of Net Income to Average Net Assets (Excluding Waivers) 0.05%
Portfolio Turnover Rate 52.52%
Average Commission Rate(+) $.0636
- ----------
(+) Average commission rate paid per share for portfolio security purchases and
sales during the period.
(1) The Equity Growth Fund Class I Shares commenced operations on February 3,
1997. All ratios are through June 30, 1997 and have been annualized.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
<PAGE>
THE PILLAR FUNDS
(the "Trust")
Supplement dated July 28, 1997 to the Statement of Additional Information
dated April 30, 1997 and amended June 30, 1997
The Statement of Additional Information for the Trust is hereby amended and
supplemented by the following unaudited financial statements for the Equity
Growth Fund of the Trust for the period ending June 30, 1997.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
<PAGE>
- --------------------------------------------------------------------------------
June 30, 1997
Statement of Net Assets (unaudited)
Equity Growth Fund
- --------------------------------------------------------------------------------
Market
Description Shares Value (000)
- --------------------------------------------------------------------------------
Common Stocks--89.1%
Banks 2.6%
First Union 21,600 $ 1,998
Northern Trust 60,200 2,912
-------
4,910
-------
Beauty Products--2.2%
Procter & Gamble 29,200 4,125
-------
Chemicals--1.5%
Monsanto 67,900 2,924
Computers & Services--14.8%
Computer Associates International 71,850 4,001
Computer Sciences* 41,600 3,000
Dell Computer* 24,100 2,830
Electronic Data Systems 89,900 3,686
EMC* 70,200 2,738
Hewlett Packard 69,900 3,914
Microsoft* 30,800 3,892
Sungard Data Systems* 86,500 4,022
-------
28,083
-------
Drugs--7.1%
Merck 63,100 6,531
Pfizer 57,300 6,847
-------
13,378
-------
Entertainment--2.5%
Walt Disney 58,500 4,695
-------
Financial Services--4.0%
FHLMC 63,100 2,169
Franklin Resources 44,300 3,215
MBNA 60,275 2,208
-------
7,592
-------
Food, Beverage & Tobacco--1.8%
Coca Cola 48,500 3,383
-------
Gas/Natural Gas--1.0%
Enron 46,700 1,906
-------
Household Products--2.8%
Illinois Tool Works 104,600 5,223
-------
Insurance--5.4%
American International Group 27,250 4,071
Conseco 50,660 1,874
Sunamerica 40,500 1,974
Travelers 36,966 2,331
-------
10,250
-------
- --------------------------------------------------------------------------------
Market
Description Shares Value (000)
- --------------------------------------------------------------------------------
Leisure Products--2.4%
Mattel 137,300 $ 4,651
-------
Machinery--3.0%
General Electric 88,100 5,760
-------
Marine Transportation--1.6%
Carnival, Class A 74,200 3,061
-------
Medical Products & Services--1.2%
Boston Scientific* 36,900 2,267
-------
Medical Products & Services--1.9%
Healthsouth Rehabilitation* 147,500 3,678
-------
Miscellaneous Business Services--11.8%
3Com* 62,800 2,826
Automatic Data Processing 101,300 4,761
Cisco Systems* 47,800 3,209
First Data 108,100 4,750
Oracle Systems* 101,050 5,090
Parametric Technology* 42,090 1,792
-------
22,428
-------
Miscellaneous Consumer Services--3.9%
Accustaff* 126,200 2,989
Service International 132,600 4,359
-------
7,348
-------
Rubber & Plastic--1.1%
Nike 34,600 2,020
-------
Semi-Conductors/Instruments 5.0%
Intel 21,900 3,106
LSI Logic* 74,200 2,374
Xilinx* 81,500 3,999
-------
9,479
-------
Specialty Construction--2.7%
Ericsson ADR* 129,210 5,088
-------
Steel & Steel Works 1.6%
Engelhard 141,150 2,955
-------
Telephones & Telecommunication--1.7%
Worldcom* 103,630 3,316
-------
Wholesale--5.5%
Gillette 50,200 4,756
Johnson & Johnson 87,200 5,614
-------
10,370
-------
Total Common Stocks
(Cost $136,992) 168,890
-------
- -------------------------------------------------------------------------------
1
<PAGE>
Statement of Net Assets (unaudited) (concluded)
Equity Growth Fund
- -------------------------------------------------------------------------------
Face Amount Market
Description (000)/Shares Value (000)
- -------------------------------------------------------------------------------
Cash Equivalents-- 8.3%
Aim Short-Term Prime Obligation $ 5,320 $ 5,320
Vontobel Europacific Fund 507 10,361
---------
Total Cash Equivalents
(Cost $ 13,334) 15,681
---------
Treasury Bills--0.8%
U.S. Treasury Bills (A)
4.400%, 07/03/97 1,500 1,499
---------
Total Treasury Bills
(Cost $1,500) 1,499
---------
Total Investments--98.2%
(Cost $151,826) 186,070
---------
Other Assets and Liabilities, Net--1.8% 3,449
---------
- -------------------------------------------------------------------------------
Market
Descripiion Value (000)
- -------------------------------------------------------------------------------
Net Assets:
Portfolio Shares of Class I (unlimited
authorization--no par value) based
on 17,476,951 outstanding shares of
beneficial interest $141,659
Portfolio Shares of Class A (unlimited
authorization--no par value) based
on 8,830 outstanding shares of
beneficial interest 92
Portfolio Shares of Class B (unlimited
authorization--no par value) based
on 2,427 outstanding shares of
beneficial interest 25
Distributions in excess of
net investment income (3)
Accumulated net realized gain
on investments 13,502
Net unrealized appreciation
on investments 34,244
--------
Total Net Assets--100.0% $189,519
========
Net Asset Value, Offering and Redemption
Price Per Share--Class I $ 10.84
========
Net Asset Value, Offering and Redemption
Price Per Share--Class A $ 10.86
========
Net Asset Value, Offering and Redemption
Price Per Share--Class B $ 10.83
========
Maximum Offering Price Per Share--
Class A ($10.86 divided by 94.5%) $ 11.49
========
* Non-income producing security
(A) Zero Coupon Security. The rate reflected on the Statement of Net Assets
represents the security's discount rate at time of purchase.
ADR American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
- -------------------------------------------------------------------------------
2
<PAGE>
- -------------------------------------------------------------------------------
Statement of Operations (000)
For the period ended June 30, 1997 (unaudited)
Equity
Growth
Fund (1)
----------
Investment income:
Dividend income $ 709
Interest income 184
----------
Total income 893
----------
Expenses:
Investment advisory fee 564
Less investment advisory fee waived (183)
Administration fee 151
Custodian fee 19
Professional fees 18
Printing expense 17
Transfer agent fee 15
Insurance and other expenses 7
----------
Total expenses, net of waivers 608
----------
Net investment income 285
Net realized gain
on investments 13,502
Net unrealized appreciation
of investment securities 34,244
----------
Net increase in net assets resulting
from operations $48,031
----------
(1) The Equity Growth Fund commenced operations on February 3, 1997
The accompanying notes are an integral part of the financial statements.
- -------------------------------------------------------------------------------
3
<PAGE>
Statement of Changes in Net Assets (000)
For the period ended June 30, 1997 (unaudited)
--------------
Equity Growth
Fund (1)
--------------
1997
--------------
Investment activities:
Net investment income $ 285
Net realized gain on securities sold 13,502
Net unrealized appreciation
of investment securities 34,244
--------------
Net increase in net assets resulting
from operations 48,031
--------------
Distributions to shareholders:
Net investment income:
Class I (254)
Class A (34)
Class B --
Realized capital gains:
Class I --
Class A --
Class B --
--------------
Total distributions (288)
--------------
Share transactions:
Class I:
Proceeds from shares issued 3,911
Value received in connection with acquisition of
common trust fund assets 188,338
Reinvestment of cash distributions 29
Cost of shares redeemed (50,619)
--------------
Net Class I share transactions 141,659
--------------
Class A:
Proceeds from shares issued 92
Reinvestment of cash distributions --
Cost of shares redeemed --
--------------
Net Class A share transactions 92
--------------
Class B:
Proceeds from shares issued 25
Reinvestment of cash distributions --
Cost of shares redeemed --
--------------
Net Class B share transactions 25
--------------
Increase (decrease) in net assets from
share transactions 141,776
--------------
Total increase (decrease) in net assets 189,519
--------------
Net Assets:
Beginning of period --
--------------
Net Assets:
End of period $ 189,519
--------------
Shares issued and redeemed:
Class I shares:
Issued 398
Shares issued in connection with acquisition of
common trust fund assets 22,103
Issued in lieu of cash distributions 3
Redeemed (5,027)
--------------
Net Class I share transactions 17,477
--------------
Class A shares:
Issued 9
Issued in lieu of cash distributions --
Redeemed --
--------------
Net Class A share transactions 9
--------------
Class B shares:
Issued 2
Issued in lieu of cash distributions --
Redeemed --
--------------
Net Class B share transactions 2
--------------
Net increase (decrease) in shares 17,488
--------------
(1) The Equity Growth Fund commenced operations on February 3, 1997.
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
- -------------------------------------------------------------------------------
4
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Financial Highlights (unaudited)
Net Asset Realized and Distributions Distributions
Value Net Unrealized from Net from Net Asset Net Assets
Beginning Investment Gains or Losses Investment Capital Value End Total End of
of Period Income on Securities Income Gains of Period Return(+) Period (000)
- -------------------------------------------------------------------------------------------------------------------------
Equity Growth Fund
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS I
1997 (1) $10.00 $0.01 $0.84 $(0.01) -- $10.84 8.53% $189,397
CLASS A
1997(1) $10.00 -- $0.86 -- -- $10.86 8.61% $ 96
CLASS B
1997(2) $10.41 $(0.01) $0.43 -- -- $10.83 4.34% $ 26
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Financial Highlights (unaudited) (Continued)
Ratio of Ratio of
Expenses Net Income
Ratio of Ratio of to Average to Average
Expenses Income Net Assets Net Assets Portfolio Average
to Average to Average (Excluding (Excluding Turnover Commission
Net Assets Net Assets Waivers) Waivers) Rate Rate(++)
- ---------------------------------------------------------------------------------------------------
Equity Growth Fund
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS I
1997(1) 0.80% 0.29% 1.04% 0.05% 52.52% $.0636
CLASS A
1997(1) 1.05% 0.02% 1.12% (0.05)% 52.52% $.0636
CLASS B
1997(2) 1.80% (0.78)% 2.07% (1.05)% 52.52% $.0636
- ---------------------------------------------------------------------------------------------------
</TABLE>
(+) Total Rrturn does not reflect sales loads on Class A and Class B shares.
(++) Average commission rate paid per share for securiy purchases and sales
during the period.
(1) The Equity Growth Fund Class A and Class I shares commenced operations on
February 3, 1997. All ratios are through June 30, 1997 and have been
annualized.
(2) The Equity Growth Fund Class B shares commenced operations on May 21,
1997. All ratios are through June 30, 1997 and have been annualized.
The accompanying notes are an integral part of the financial statements.
- -------------------------------------------------------------------------------
5
<PAGE>
June 30, 1997
Notes to Financial Statements (unaudited)
1. Organization
The Pillar Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end investment company with
seventeen funds: the U.S. Treasury Securities Money Market Fund, the Prime
Obligation Money Market Fund, the Tax-Exempt Money Market Fund, the U.S.
Treasury Securities Plus Money Market Fund, the Institutional Money Market Fund,
(the "Money Market Funds") the Short-Term Investment Fund, the Fixed Income
Fund, the New Jersey Municipal Securities Fund, the Intermediate-Term Government
Securities Fund, the Pennsylvania Municipal Securities Fund, the GNMA Fund, (the
"Fixed Income Funds") the Equity Growth Fund, the Equity Value Fund, the Equity
Income Fund, the Mid Cap Fund, the International Growth Fund (the "Equity
Funds") and the Balanced Fund. Each of the Funds is "diversified" for purposes
of the 1940 Act except for the New Jersey Municipal Securities Fund, the
Pennsylvania Municipal Securities Fund and the International Growth Fund, each
of which is a nondiversified Fund. Shares of the U.S. Treasury Securities Plus
Money Market Fund are offered exclusively to customers of the Money Desk of the
Bank Investment Division of Summit Bank. The minimum investment for this Fund is
$100,000. The financial statements included herein present information that
relates only to the Equity Growth Fund. The assets of each Fund are segregated
and a shareholder's interest is limited to the Fund in which shares are held.
The Funds' prospectus provides a description of each fund's investment
objectives, policies and strategies.
2. Significant Accounting Policies
The following is a summary of the Significant accounting policies followed by
the Fund.
Security Valuation--Investment in equity securities that are traded on a
national securities exchange (or reported on the NASDAQ national market system)
are stated at the last quoted sales price if readily available for such equity
securities on each business day; other equity securities traded in the
over-the-counter market and listed equity securities for which no sale was
reported on that date are stated at the last quoted bid price. Debt obligations
exceeding sixty days to maturity for which market quotations are readily
available are valued at the most recently quoted bid price. Debt obligations
with sixty days or less remaining until maturity may be valued at their
amortized cost. Restricted securities for which quotations are not readily
available are valued at fair value using methods determined in good faith under
general trustee supervision.
Federal Income Taxes--It is the Fund's intention to qualify as a regulated
investment company for Federal income tax purposes and to distribute all of its
taxable income and net capital gains. Accordingly, no provisions for Federal
income taxes are required.
Security Transactions and Investment Income--Security transactions are
accounted for on the date the security is purchased or sold (trade date). Costs
used in determining realized gains and losses on the sale of investment
securities are those of the specific securities sold adjusted for the accretion
and amortization of purchase discounts and premiums during the respective
holding periods. Interest income is recorded on the accrual basis; dividend
income is recorded on the ex-dividend date.
Distributions to Shareholders--Distributions from net investment income for
the Fund are declared and paid quarterly.
Expenses--Expenses that are directly related to the Fund are charged
directly to the Fund. Other operating expenses of the Trust are prorated to the
Funds on the basis of relative net asset value. Class specific expenses, such as
the 12b-1 fees, are borne by that class. Income, other expenses and realized and
unrealized gains and losses of the Fund are allocated to the respective classes
on the basis of the relative net assets each day.
Use of Estimates--The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that effect the reported amount of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements, and reported amounts of revenues and expenses during the
reporting period. Actual amounts could differ from these estimates.
3. Organization Costs and Transactions with Affiliates
Organizational costs have been capitalized by the Fund and are being
amortized over sixty months commencing with operations. In the event any of the
initial shares of the Fund are redeemed by any holder thereof during the period
that the Fund is amortizing its organizational costs, the redemption proceeds
payable to the holder thereof will be reduced by the unamortized organizational
costs in the same ratio as the number of initial shares being redeemed bears to
the number of
- -------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
June 30, 1997
initial shares outstanding at the time of redemption.
Certain officers and/or Trustees of the Fund are also officers and/or
directors of SEI Fund Resources (the "Administrator"). Such officers are paid no
fees by the Fund for serving as officers of the Fund. The Fund pays each
unaffiliated Trustee an annual fee for attendance at quarterly, interim and
committee meetings.
4. Administration and Distribution Agreements
The Fund and the Administrator are parties to an administration agreement (the
"Agreement"), under which the Administrator provides the Fund with
administrative services for an annual fee that is calculated daily and paid
monthly at an annual rate of 0.20% of the average daily net assets.
SEI Investments Distribution Co. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund has adopted a distribution plan for
Class A shares (the "Class A Plan") pursuant to rule 12b-1 under the 1940 Act.
Under the Class A Plan, the Distributor is entitled to receive from the Fund an
annual distribution fee of 0.25% of the Fund's Class A average daily net assets.
The Fund has also adopted a distribution plan for Class B shares (the "Class B
Plan") pursuant to Rule 12b-1 under the 1940 Act. Under the Class B Plan, the
Distributor is entitled to receive from the Fund an annual distribution fee of
0.75% of the Fund's Class B average daily net assets. Additionally, the Class B
Plan provides that Class B shares are subject to a service fee at an annual rate
of 0.25% of the Fund's Class B average daily net assets. The Distributor
receives no fees for its distribution services for Class I shares of the Fund.
5. Investment Advisory and Custodian Agreements
The Fund and Summit Bank Investment Management Division, a division of Summit
Bank, (the "Adviser") are parties to an advisory agreement. Under the terms of
the agreement, the Adviser will receive a fee, that is calculated daily and paid
monthly, at an annual rate of 0.75% of the average daily net assets of the Fund.
Summit Bank also acts as Custodian of securities for the Fund. The
Custodian plays no role in determining the investment policies of the Fund or
which securities are to be purchased or sold. For its services, the Custodian
receives a fee, that is calculated daily and paid monthly, at an annual rate of
0.025% of the average daily net assets of the Fund.
6. Investment Transactions
The cost of security purchases and the proceeds from the sale of securities
other than short term investments, during the period ended June 30, 1997
is as follows:
Equity
Growth
------
(000)
Purchases
U.S. Gov't 7,568
Other 104,802
Sales
U.S. Gov't --
Other 93,181
At June 30, 1997, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes was not materially
different from amounts reported for financial reporting purposes. The aggregate
gross unrealized gain or loss on securities at June 30, 1997, for the Fund is as
follows:
Equity
Growth
------
(000)
Aggregate gross
unrealized gain 36,769
Aggregate gross
unrealized loss (2,525)
-------
Net unrealized
gain (loss) 34,244
=======
8. Common Trust Fund Conversion
On February 1, 1997, fourteen common trust funds merged into the Trust in a
tax-free conversion (with the exception of the Summit Bank Employee Benefit Bond
Fund which did not qualify for tax-free treatment). As a result, assets of six
existing Funds increased and one new fund, the Equity Growth Fund, was created.
Total assets of the Trust increased by approximately $673 million.
- -------------------------------------------------------------------------------
7
<PAGE>
