DG EQUITY FUND
DG OPPORTUNITY FUND
DG LIMITED TERM GOVERNMENT INCOME FUND
DG GOVERNMENT INCOME FUND
DG MUNICIPAL INCOME FUND
DG U.S. GOVERNMENT MONEY MARKET FUND
(PORTFOLIOS OF DG INVESTOR SERIES)
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SUPPLEMENT TO PROSPECTUS DATED JUNE 30, 1996
Effective March 1, 1997, ParkSouth Corporation, a subsidiary of Deposit Guaranty
National Bank became the Investment Adviser of DG Investor Series (the "Trust"),
succeeding Deposit Guaranty National Bank. ParkSouth Corporation is a registered
investment adviser with its principal offices at P.O. Box 1200, Jackson,
Mississippi 39215-1200. Accordingly, references throughout the prospectus to
Deposit Guaranty National Bank should be replaced with references to ParkSouth
Corporation, as appropriate.
Effective March 1, 1997, Commercial National Bank will no longer serve as
Sub-Adviser to the Funds. Accordingly, references throughout the prospectus to
Commercial National Bank should be deleted as appropriate. Additionally, the
sub-section entitled "Sub-Adviser" on pages 23 and 24, should be deleted in its
entirety.
A. Please delete the section entitled "Summary of Fund Expenses" on page 3 in
its entirety and replace it with the following:
SUMMARY OF FUND EXPENSES
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<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
GOVERNMENT MUNICIPAL
EQUITY OPPORTUNITY LIMITED INCOME INCOME MONEY MARKET
FUND FUND TERM FUND FUND FUND FUND
------ ----------- --------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge Imposed on
Purchases (as a percentage of offering
price)................................ 3.50% 3.50% 2.00% 2.00% 2.00% None
Maximum Sales Charge Imposed on
Reinvested Dividends (as a percentage
of offering price).................... None None None None None None
Contingent Deferred Sales Charge (as a
percentage of original purchase price
or redemption proceeds, as
applicable)........................... None None None None None None
Redemption Fee (as a percentage of
amount redeemed, if applicable)....... None None None None None None
Exchange Fee........................... None None None None None None
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver)(1)....... 0.75% 0.75% 0.40% 0.50% 0.25% 0.30%
12b-1 Fees(2).......................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Total Other Expenses................... 0.19% 0.42% 0.29% 0.22% 0.45% 0.21%
Shareholder Services Fees(3)........... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Total Fund Operating Expenses(4).... 0.94% 1.17% 0.69% 0.72% 0.70% 0.51%
</TABLE>
(1)The management fees of Opportunity Fund, Limited Term Fund, Government Income
Fund, Municipal Income Fund and Money Market Fund have been reduced to reflect
the voluntary waivers by the Adviser. The Adviser can terminate these voluntary
waivers at any time at its sole discretion. The maximum management fees for
these Funds are 0.95%, 0.60%, 0.60%, 0.60%, and 0.50%, respectively.
(2) As of the date of this prospectus, the Funds are not paying or accruing
12b-1 fees. The Funds will not accrue or pay 12b-1 fees until a separate class
of shares has been created for certain institutional investors. Equity Fund,
Opportunity Fund, Limited Term Fund, Government Income Fund, and Municipal
Income Fund could each pay 0.35% as a 12b-1 fee to the distributor. Money Market
Fund could pay 0.25% as a 12b-1 fee to the distributor.
(3) As of the date of this prospectus, the Funds are not paying or accruing
shareholder services fees. The Funds can pay up to 0.15% as a shareholder
services fee.
(4) Total Operating Expenses above reflect those for the period ended February
29, 1996. Total Fund Operating Expenses for Opportunity Fund, Limited Term Fund,
Government Income Fund, Municipal Income Fund and Money Market Fund were 1.52%,
0.89%, 0.82%, 1.17%, and 0.71%, respectively, absent the voluntary waivers
described above in note (1).
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUNDS WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "DG INVESTOR SERIES INFORMATION" AND "INVESTING IN THE FUNDS."
Wire-transferred redemptions of less than $5,000 may be subject to additional
fees.
<TABLE>
<CAPTION>
EXAMPLE 1 Year 3 Years 5 Years 10 Years
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<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment, assuming (1) 5% annual
return, (2) redemption at the end of each time period, and (3) payment of the
maximum sales charge. The Funds charge no contingent deferred sales charges.
Equity Fund......................................................................... $ 44 $64 $85 $146
Opportunity Fund.................................................................... $ 47 $71 $97 $172
Limited Term Fund................................................................... $ 27 $42 $58 $104
Government Income Fund.............................................................. $ 27 $43 $59 $108
Municipal Income Fund............................................................... $ 27 $42 $58 $105
Money Market Fund................................................................... $ 5 $16 $29 $ 64
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
B. Please delete the sub-section entitled "Adviser's Background" on page 23 in
its entirety and replace it with the following:
"ADVISER'S BACKGROUND. ParkSouth Corporation ("ParkSouth") is a registered
investment adviser providing investment management services to individuals and
institutional clients. ParkSouth is a subsidiary of Deposit Guaranty National
Bank (the "Bank"), a national banking association founded in 1925 which, in
turn, is a subsidiary of Deposit Guaranty Corp. ("DGC"). Through its
subsidiaries and affiliates, DGC offers a full range of financial services to
the public, including commercial lending, depository services, cash management,
brokerage services, retail banking, mortgage banking, investment advisory
services and trust services. DGC is listed on the New York Stock Exchange under
the symbol "DEP."
ParkSouth (which succeeded to the investment advisory business of the Bank in
1997), or the Bank, have served as the adviser to the Trust since May 5, 1992.
As part of its regular banking operations, the Bank may make loans to public
companies. Thus, it may be possible, from time to time, for the Funds to hold or
acquire the securities of issuers which are also lending clients of the Bank.
The lending relationships will not be a factor in the selection of securities.
John Mark McKenzie has been with the Bank since 1984 and is a Senior Vice
President with ParkSouth. Previously, Mr. McKenzie was associated with a Jackson
bank as a trust officer. He received a B.B.A. in Banking and Finance and a J.D.
from the University of Mississippi. He is a member of the Mississippi Chapter of
the Memphis Society of Financial Analysts, and is a member of the Mississippi
State and Hinds County Bar Associations. Mr. McKenzie has managed Limited Term
Fund and Government Income Fund since their inception on August 1, 1992, and has
managed the Municipal Income Fund since January, 1997.
Gerald L. White has been with the Bank, since 1978 and is a Senior Vice
President and Senior Investment Officer. He received a B.A. from the University
of Mississippi, and a J.D. from Mississippi College and is a graduate of the
National Graduate Trust School and Northwestern University. He is a member of
the Mississippi State and Hinds County Bar Associations and a Certified
Financial Service Counselor. Mr. White has managed the Opportunity Fund since
February, 1997.
Ronald E. Lindquist has been with the Bank since 1978 and is a Senior Vice
President with ParkSouth. Mr. Lindquist's primary area of responsibility is the
management of the Equity Fund. He received his B.S. in Finance from Florida
State University and a M.S.M. in Finance from Florida International University.
Mr. Lindquist has managed the Equity Fund since its inception on August 1,
1992."
C. Please delete the subsection entitled "Shareholder Services Plan" on page 25
in its entirety and replace it with the following:
"SHAREHOLDER SERVICES PLAN. Each Fund has adopted a Shareholder Services Plan
(the "Services Plan") with respect to its shares. Under the Services Plan,
financial institutions will enter into shareholder service agreements with the
Funds to provide administrative support services to their customers who from
time to time may be owners of record or beneficial owners of the shares. In
return for providing these support services, a financial institution may receive
payments from each Fund at a rate not exceeding 0.15% of the average daily net
assets of the shares beneficially owned by the financial institution's customers
for whom it is holder of record or with whom it has a servicing relationship.
These administrative services may include, but are not limited to, the provision
of personal services and maintenance of shareholder accounts. The Funds will not
accrue or pay shareholder services fees until a separate class of shares has
been added for certain institutional investors."
March 31, 1997
LOGO
Cusip 23321N301
Cusip 23321N400
Cusip 23321N103
Cusip 23321N509
Cusip 23321N202
Cusip 23321N608
G01258-06 (3/97)
