<PAGE> 1
ERNST WORLD FUNDS
ERNST ASIA FUND
ERNST GLOBAL RESOURCES FUND
SUPPLEMENT DATED JUNE 17, 1997
TO THE PROSPECTUS DATED JUNE 6, 1996
1. The following Fee Table and related footnotes supersede and replace the
Fee Table and related footnotes contained on Page 3 of the attached Prospectus.
The Fee Table has been restated to reflect the current fees for each of the
Funds.
FEE TABLE
<TABLE>
<CAPTION>
GLOBAL
ASIA RESOURCES
FUND FUND
---- ---------
<S> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases (as a percentage of offering
price).................................................................. 4.25% 4.25%
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of
offering price)......................................................... 0% 0%
Deferred Sales Load (as a percentage of original purchase price or
redemption proceeds, as applicable)..................................... 0% 0%
Redemption Fees (as a percentage of amount redeemed, if applicable)(1).... 0% 0%
Exchange Fee.............................................................. $ 0 $ 0
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees........................................................... 1.00% 1.00%
12b-1 Fees(2)............................................................. 0.25% 0.25%
Other Expenses After Fee Waivers(3)....................................... 0.75% 0.75%
---- ----
Total Fund Operating Expenses After Fee Waivers(4)................. 2.00% 2.00%
==== ====
</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:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Asia Fund............................................. $ 62 $ 103 $ 146 $265
Global Resources Fund................................. $ 62 $ 103 $ 146 $265
</TABLE>
- ---------------
(1) The maximum wire redemption charge of $15.00 is deducted from the amount of
a wire redemption payment made at the request of a shareholder.
(2) As a result of expenses payable in connection with the Funds' Distribution
and Shareholder Service Plan, it is possible that long-term shareholders may
pay more than the economic equivalent of the maximum front-end sales charges
permitted by the National Association of Securities Dealers.
(3) The Adviser has voluntarily agreed to limit operating expenses for the
current fiscal year and the Administrator has voluntarily agreed to waive a
portion of its fee for the 3 month period ended August 31, 1997. "Other
Expenses" for the fiscal year ended March 31, 1997 were 2.37% for the Asia
Fund and 1.62% for the Global Resources Fund.
(4) "Total Fund Operating Expenses" for the fiscal year ended March 31, 1997
were 3.62% for the Asia Fund (3.38% after fee waivers) and 2.87% for the
Global Resources Fund (2.61% after fee waivers).
<PAGE> 2
2. The following Financial Highlights are added to the Prospectus
immediately following the section titled "Fee Table."
FINANCIAL HIGHLIGHTS
The table below sets forth certain financial information with respect to
the Ernst Asia Fund for the period from December 6, 1995 (commencement of
operations) through March 31, 1996, and with respect to the Ernst Global
Resources Fund for the period from December 11, 1995 (commencement of
operations) through March 31, 1996. Financial highlights for each Fund have been
derived from financial statements audited by Coopers & Lybrand L.L.P.,
independent certified public accountants, whose report thereon is incorporated
by reference in the Statement of Additional Information.
<TABLE>
<CAPTION>
ERNST GLOBAL
ERNST ASIA FUND RESOURCES FUND
----------------- -----------------
DECEMBER 6, 1995 DECEMBER 11, 1995
TO TO
MARCH 31, 1996(a) MARCH 31, 1996(a)
----------------- -----------------
<S> <C> <C>
Net asset value, beginning of period..................... $ 10.00 $ 10.00
------- -------
Investment Activities:
Net investment loss.................................... (0.08) (0.02)
Net realized and unrealized gains from investments and
foreign currencies.................................. 1.06 0.69
------- -------
Total from Investment Activities............... 0.98 0.67
======= =======
Net Asset Value, End of Period........................... $ 10.98 $ 10.67
======= =======
Total Return (excludes sales charge)..................... 9.80%(b) 6.70%(b)
======= =======
Ratios/Supplementary Data:
Net Assets at end of period (000)...................... $ 5,865 $10,457
Ratio of expenses to average net assets*............... 3.53%(c) 3.54%(c)
Ratio of net investment loss to average net assets*.... (2.49)%(c) (1.11)%(c)
Portfolio Turnover..................................... 45.83% 0.00%
Average Commission Rate Paid........................... $0.0110(d) $0.0128(d)
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced and certain
expenses were reimbursed. If such voluntary fee reductions and expense
reimbursements had not occurred, the ratio of expenses to average net assets
on an annualized basis would have been 5.41% for the Asia Fund and 5.51% for
the Global Resources Fund.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and sold
for which commissions were charged.
<PAGE> 3
3. The following is added to page 2 under the section titled "Prospectus
Summary."
Risks and Special
Considerations............ Each of the Funds invest substantial
amounts of its assets in securities of
issuers located outside of the United
States. The risks of such investments
include, among others, currency
fluctuations, possible price volatility
and reduced liquidity, different
financial, accounting and regulatory
standards, possible withholding taxes and
expropriation. (See "INVESTMENT
TECHNIQUES -- Risk Factors and Special
Considerations"). In addition, the Asia
Fund invests primarily in securities of
companies in Asia. Such securities may
exhibit additional risks because some
Asian countries are considered emerging
markets and the Asian securities markets
typically exhibit more volatility than
U.S. markets. (See "INVESTMENT
TECHNIQUES -- Risk Factors and Special
Considerations -- Asian
Economies and Securities Markets")
4. On Page 14, under the heading "National Mutual Funds Management
(Global), Ltd., Melbourne, Australia ("NMFM")," the following biographical
information is added with respect to Mr. Paul Willis, who serves as one of the
portfolio managers of the Global Resources Fund:
Mr. Willis has been with NMFM since August 1995, and is responsible for
all of NMFM's resources investments. From January 1992 to July 1995, Mr.
Willis served with the ANZ Funds, Melbourne, Australia, where he
specialized in portfolio management of Australian equity securities,
including resources equities.
5. On Page 20, under the heading "Sales Charge Waivers," the fourth
paragraph is replaced and superseded with the following:
(4) investors for whom an investment dealer or one of their affiliates
acts in a fiduciary, advisory, custodial, agency or similar capacity including
for broker/dealer managed account programs and for whom purchases are made
through such accounts or with proceeds from liquidations of such accounts;
6. As of May 31, 1997, Ernst & Company owned a controlling interest (as
that term is used under the Investment Company Act of 1940) in each of the
Funds.
7. The effective date of the attached Prospectus is deemed to be June 6,
1996.
This supplement, which should be retained by shareholders, supersedes all
previous supplements.
<PAGE> 4
ERNST WORLD FUNDS
ERNST GLOBAL ASSET ALLOCATION FUND
SUPPLEMENT DATED JUNE 17, 1997
TO THE PROSPECTUS DATED MARCH 19, 1996
1. The following Fee Table and related footnotes supersede and replace the
Fee Table and related footnotes contained on Page 3 of the attached Prospectus.
The Fee Table has been restated to reflect the current fees for the Fund.
FEE TABLE
<TABLE>
<S> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases (as a percentage of offering
price)................................................................... 5.50%
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of
offering price).......................................................... 0%
Deferred Sales Load (as a percentage of original purchase price or
redemption proceeds, as applicable)...................................... 0%
Redemption Fees (as a percentage of amount redeemed, if applicable)(1)...... 0%
Exchange Fee................................................................ $ 0
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees............................................................. 1.10%
12b-1 Fees(2)............................................................... 0.25%
Other Expenses After Fee Waivers(3)......................................... 0.65%
----
Total Fund Operating Expenses After Fee Waivers(4).................. 2.00%
====
</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:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------ ------- ------- --------
<S> <C> <C> <C>
$ 74 $ 114 $ 157 $275
</TABLE>
- ---------------
(1) The maximum wire redemption charge of $15.00 is deducted from the amount of
a wire redemption payment made at the request of a shareholder.
(2) As a result of expenses payable in connection with the Fund's Distribution
and Shareholder Service Plan, it is possible that long-term shareholders may
pay more than the economic equivalent of the maximum front-end sales charges
permitted by the National Association of Securities Dealers.
(3) The Adviser has voluntarily agreed to limit operating expenses for the
current fiscal year and the Administrator has voluntarily agreed to waive a
portion of its fee for the 3 month period ended August 31, 1997. "Other
Expenses" for the fiscal year ended March 31, 1997 were 3.64%.
(4) "Total Fund Operating Expenses" for the fiscal year ended March 31, 1997
were 4.99%.
<PAGE> 5
2. The following Financial Highlights are added to the Prospectus
immediately following the section titled "Fee Table."
FINANCIAL HIGHLIGHTS
The table below sets forth certain financial information (which is
unaudited) with respect to the Fund for the period from July 2, 1996
(commencement of operations) through September 30, 1996.
<TABLE>
<CAPTION>
JULY 2, 1996 TO
SEPTEMBER 30, 1996(a)
---------------------
<S> <C>
Net asset value, beginning of period.................................... $ 10.00
------
Investment Activities:
Net investment loss................................................... (0.01)
Net realized and unrealized gains from investments and foreign
currencies......................................................... 0.15
------
Total from Investment Activities.............................. 0.14
======
Net Asset Value, End of Period.......................................... $ 10.14
======
Total Return (excludes sales charge).................................... 1.40%(b)
======
Ratios/Supplementary Data:
Net Assets at end of period (000)..................................... $ 5,157
Ratio of expenses to average net assets*.............................. 2.58%(c)
Ratio of net investment loss to average net assets*................... (0.17)%(c)
Portfolio Turnover.................................................... 0.00%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio of expenses to average net assets
would have been 3.26% on an annualized basis, and the ratio of net
investment loss to average net assets would have been (0.85%) on an
annualized basis.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
3. As of May 31, 1997, Ernst & Company owned a controlling interest (as
that term is used under the Investment Company Act of 1940) in the Fund.
4. On Page 16, under the heading "Sales Charge Waivers," the fourth
paragraph is replaced and superseded with the following:
(4) investors for whom an investment dealer or one of their affiliates
acts in a fiduciary, advisory, custodial, agency or similar capacity
including for broker/dealer managed account programs and for whom purchases
are made through such accounts or with proceeds from liquidations of such
accounts;
This supplement, which should be retained by shareholders, supersedes all
previous supplements.
