Payden & Rygel
GROWTH & INCOME FUND
PROSPECTUS
August 14, 1996
[LOGO]
TABLE OF CONTENTS
Prospectus Summary 1
Expense Information 3
Investment Objectives 6
Investment Policies and Risk Factors 6
Management 13
How to Purchase Shares 15
Shareholder Services 17
Redemption of Shares 18
Net Asset Value 18
Dividends, Distributions and Taxes 19
Other Information 20
The Payden & Rygel Investment Group (the "Group") is a professionally
managed, no-load, open-end management investment company. The Group
currently consists of twelve distinct portfolios with separate investment
objectives.
The Growth & Income Fund (the "Fund") seeks to provide growth of capital
and some current income. Under normal market conditions, the Fund invests
at least 45% of its total assets in equity securities, such as common and
preferred stocks and securities which are convertible into common stocks,
and the balance of its total assets in equity-based derivative instruments,
such as Standard & Poor's Depositary Receipts ("SPDRs"), stock index
futures contracts, options on stocks and stock indexes, and equity swap
contracts. The Fund currently anticipates that under normal market
conditions approximately 50% of its total assets will be invested each year
in the ten common stocks included in the Dow Jones Industrial Average which
have the highest dividend rates (as a percentage of their market price),
and that the balance of its assets will be invested primarily in SPDRs or a
substantial number of additional common stocks that the Adviser believes
would closely replicate the performance of the Standard & Poor's 500 Index.
The Fund is designed to provide individuals and institutions with access to
the professional investment management services offered by Payden & Rygel
(the "Adviser"), which serves as investment adviser to the Funds. However,
unlike most equity funds, in which much of an investor's return will
typically come from long-term capital gains, most income expected to be
earned by the Fund will be taxable at ordinary income tax rates. Due to
the tax disadvantage of ordinary income compared to long-term gains,
taxable investors may not deem the Fund to be as advantageous as other
equity funds after consideration of tax effects. Taxable investors are
advised to consult an income tax adviser prior to investing in the Fund.
There can be no assurance that the Fund's investment objectives will be
achieved.
This Prospectus sets forth concisely the information a prospective investor
should know before investing in the Fund. A Statement of Additional
Information, dated August 14, 1996, containing additional information
about the Fund, has been filed with the Securities and Exchange Commission
and is incorporated by reference into this Prospectus. It is available
without charge and may be obtained by writing the Fund at 333 South Grand
Avenue, Los Angeles, California 90071 or by telephone at (213) 625-1900 or
(800) 5-PAYDEN (800/572-9336).
This Prospectus should be read and retained for reference to information
about the Fund.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is August 14, 1996.
PROSPECTUS SUMMARY
THE FUNDThe Fund is a non-diversified series of Payden & Rygel Investment
Group, a no-load, open-end management investment company organized as a
Massachusetts business trust in January, 1992. The Fund is primarily
designed to provide pension and profit sharing plans, employee benefit
trusts, endowments, foundations, other institutions, corporations and
individuals with access to the professional investment management services
offered by Payden & Rygel, which serves as investment adviser to the Fund.
INVESTMENT OBJECTIVES AND POLICIES
The Fund seeks to provide growth of capital and some current income. Under
normal market conditions, the Fund invests at least 45% of its total assets
in equity securities, such as common and preferred stocks and securities
which are convertible into common stocks, and the balance of its total
assets in equity-based derivative instruments, such as Standard & Poor's
Depositary Receipts ("SPDRs"), stock index futures contracts, options on
stocks and stock indexes, and equity swap contracts. The Fund currently
anticipates that under normal market conditions approximately 50% of its
total assets will be invested in the ten common stocks included in the Dow
Jones Industrial Average which have the highest dividend rates (as a
percentage of their market price), and that the balance of its assets will
be invested primarily in SPDRs or a substantial number of additional common
stocks that the Adviser believes would closely replicate the performance of
the Standard & Poor's 500 Index.
INVESTMENT RISKS AND CONSIDERATIONS
Investment risks and other considerations relevant to the securities in
which the Fund invests are described under "Investment Objectives" and
"Investment Policies and Risk Factors." Although equity securities have a
history of long-term growth in value, their prices fluctuate based on
changes in the issuer's financial condition and prospects, and on overall
market and economic conditions. As a "non-diversified" fund for purposes
of the Investment Company Act of 1940, the Fund may invest a greater
percentage of its assets in the securities of one issuer than diversified
funds and may be more susceptible to risks associated with a single
economic, political or regulatory occurrence than diversified funds.
The acquisition of dollar-denominated securities issued by foreign
governments and foreign companies involves investment risks that are
different in some respects from those incurred by a fund that invests only
in debt obligations of U.S. governmental entities and domestic companies,
including differences in reporting standards; adverse changes in investment
or tax regulations; political instability; possible expropriation,
nationalization or confiscatory taxation; greater portfolio volatility;
less liquidity; less governmental regulation of securities issuers;
possible difficulty in obtaining and enforcing judgments in foreign courts;
and imposition of restrictions on foreign investments.
The Fund invests in certain derivative instruments such as SPDRs, put and
call options on securities and securities indexes, stock index futures
contracts, options on such futures contracts, and equity swap contracts.
The Fund's use of derivatives involves certain costs and risks. These
include the risk that the Adviser's forecasts of market values, interest
rates and other factors are not correct; imperfect correlation between
derivatives used as a hedging technique and the asset or liability being
hedged; default by the other party to the transaction; and inability to
close out options or futures positions because of the lack of a liquid
market. Investment in such derivative instruments may not be successful
and may reduce the returns and increase the volatility of the Fund.
The Fund's annual portfolio turnover rate may vary substantially, which
could cause its transaction costs to be higher than those of other mutual
funds with less aggressive trading strategies. To the extent that short-
term trading results in the realization of short-term capital gains,
shareholders will be taxed on such gains at ordinary income tax rates.
See "Dividends, Distributions and Taxes."
INVESTMENT ADVISER
Payden & Rygel serves as Adviser to the Fund. The Adviser is an investment
management firm established in 1983 and currently has over $20 billion of
assets under management. The Adviser receives a monthly fee from the Fund
at an annual rate of 0.50% of the Fund's average daily net assets up to $2
billion and 0.30% of net assets in excess of $2 billion. Expenses of Class
A and Class B shares of the Fund (excluding interest, taxes, portfolio
transaction expenses, blue sky fees, 12b-1 plan fees [if any such plan is
adopted in the future] and extraordinary expenses) will not exceed 0.80%
and 1.00% of average daily net assets, respectively, on an annualized
basis. See "Management of the Funds."
In addition, the Adviser has voluntarily agreed to temporarily reduce its
fees further through at least October 31, 1997. See "Expense Information."
PURCHASE OF SHARES
Two classes of shares of the Fund are offered through Payden & Rygel
Distributors (the "Distributor"), an affiliate of the Adviser, at the net
asset value per share next determined after receipt of a proper purchase
order, with no sales charge for either class. The minimum initial
investment is $5,000, and the minimum subsequent investment is $1,000.
Class B Shares are subject to Shareholder Service Plan (the "Plan") fees of
0.20% of average daily net assets. Class A Shares do not participate in
the Plan. Fund shares may be exchanged for Class A or Class B shares of
any other series of the Group or for the other class of shares of the Fund.
See "How to Purchase Shares" and "Shareholder Services."
REDEMPTIONS
Shares of the Fund may be redeemed without cost at the net asset value per
share of the Fund next determined after receipt of a redemption request in
proper form. The redemption price may be more or less than the purchase
price. See "Redemption of Shares."
DIVIDENDS AND DISTRIBUTIONS
The Fund generally distributes dividends from net investment income
quarterly and any net realized capital gains at least annually. All
dividends and distributions are paid in the form of additional shares at
net asset value unless cash payment is requested. See "Dividends,
Distributions and Taxes."
FUND ADMINISTRATOR AND TRANSFER AGENT
Fund administration is conducted by Treasury Plus, Inc., a wholly owned
subsidiary of the Adviser. Fund portfolio accounting and transfer agency
services are provided by Investors Fiduciary Trust Company.
CUSTODIAN
The Boston Safe Deposit and Trust Company, One Boston Place, Boston,
Massachusetts 02109, (the "Custodian") acts as Fund custodian. Foreign
securities are maintained in the custody of foreign branches of U.S. banks,
foreign banks and foreign trust companies that are members of the Boston
Company's global custody network or foreign depositories used by such
members.
EXPENSE INFORMATION
Two Classes of shares are offered to investors.
Class A Shares
Class A shares of the Fund are offered to investors on a no-load basis
without any sales commissions or distribution ("12b-1 plan") charges.
Shareholder Transaction Expenses - Class A Shares
Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Redemption Fees None
Exchange Fees None
Maximum Annual Fund Operating Expenses - Class A Shares
(as an estimated percentage of average net assets for the fiscal year ended
October 31, 1997, after reimbursement of advisory fees and other expenses)
Advisory Fees 0.30%
Other Expenses (estimated) 0.24%
Total Expenses 0.54%
The Adviser has agreed to guarantee that, for so long as it acts as
investment adviser to the Fund, the expenses of the Fund attributable to
Class A Shares, including advisory fees (but excluding interest, taxes,
portfolio transaction expenses, blue sky fees, 12b-1 plan fees [if any such
plan is adopted in the future] and extraordinary expenses) will not exceed
0.80% of average annual net assets of Class A Shares. In addition, the
Adviser has voluntarily agreed to temporarily reduce its fees through at
least October 31, 1997, so that the Fund expenses will not exceed 0.54% of
average annual net assets. The Adviser has voluntarily agreed to waive
0.20% of its management fee through at least October 31, 1997. The Fund
will reimburse the Adviser for fees foregone or other expenses paid by it
(with the exception of the management fee waiver) in any fiscal year
pursuant to the expense guarantee or voluntary expense cap at a later date,
without interest, so long as such reimbursement will not cause the annual
expense ratio for the year in which it is made to exceed the amount of the
expense guarantee or expense cap (whichever is in effect at the time of
reimbursement). The Fund will not be required to repay any unreimbursed
amounts to the Adviser upon termination of its investment management
contract with respect to the Fund. Actual expenses for Class A Shares of
the Fund for the fiscal year ended October 31, 1997, before reimbursement
by the Adviser, are estimated to be 1.0% of average net assets
(annualized).
The following table illustrates the expenses a Class A shareholder would
pay on a $1,000 investment over various time periods assuming (1) a 5%
annual return and (2) redemption at the end of each time period. As noted
above, the Fund does not charge redemption fees of any kind.
Expenses Per $1,000 Investment
1 Year 3 Years
$6 $19
The information in the previous tables is provided for purposes of
assisting current and prospective shareholders in understanding the various
costs and expenses that an investor in Class A shares will bear, directly
or indirectly. The hypothetical annual return of 5% is used for
illustrative purposes only and should not be interpreted as an estimate of
the Fund's annual returns, as there can be no guarantee of the Fund's
future performance.
Class B Shares
Class B Shares are similar to Class A Shares with the exception that Class
B Shares will be subject to a Shareholder Service Plan.
Shareholder Transaction Expenses - Class B Shares
Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Redemption Fees None
Exchange Fees None
Maximum Annual Fund Operating Expenses - Class B Shares
(as an estimated percentage of average net assets for the fiscal year ended
October 31, 1997, after reimbursement of advisory fees and other expenses)
Advisory Fees 0.30%
Other Expenses* 0.49%
Total Expenses 0.79%
* includes Shareholder Service Plan fee of 0.25%
The Adviser has agreed to guarantee that, for so long as it acts as
investment adviser to the Fund, the expenses of the Fund attributable to
Class B Shares, including advisory fees (but excluding interest, taxes,
portfolio transaction expenses, blue sky fees, 12b-1 plan fees [if any such
plan is adopted in the future] and extraordinary expenses) will not exceed
1.05% of the average annual net assets of Class B Shares. In addition, the
Adviser has voluntarily agreed to temporarily reduce its fees so that such
Fund expenses will not exceed 0.79% of average annual assets. The Adviser
has voluntarily agreed to waive 0.20% of its management fee through at
least October 31, 1997. This fee reduction will be maintained at least
through October 31, 1997. The Fund will reimburse the Adviser for fees
foregone or other expenses paid by it (with the exception of the management
fee waiver) in any fiscal year pursuant to the expense guarantee or
voluntary expense cap at a later date, without interest, so long as such
reimbursement will not cause the annual expense ratio of Class B Shares for
the year in which it is made to exceed the amount of the expense guarantee
or expense cap (whichever is in effect at the time of reimbursement). The
Fund will not be required to repay any unreimbursed amounts to the Adviser
upon termination of its investment management contract with respect to the
Fund. Actual expenses for the Class B Shares for the Fund for the fiscal
year ended October 31, 1997, before reimbursement by the Adviser, are
estimated to be 1.25% of average net assets (annualized).
The following table illustrates the expenses a Class B shareholder would
pay on a $1,000 investment over various time periods assuming (1) a 5%
annual return and (2) redemption at the end of each time period. As noted
above, the Fund charges no redemption fees of any kind.
Expenses Per $1,000 Investment
1 Year 3 Years
$8 $25
The information in the tables above is provided for purposes of assisting
current and prospective shareholders in understanding the various costs and
expenses that an investor in Class B Shares will bear, directly or
indirectly. The hypothetical annual return of 5% is used for illustrative
purposes only and should not be interpreted as an estimate of the Fund's
annual returns, as there can be no guarantee of the Fund's future
performance.
INVESTMENT OBJECTIVES
The Fund seeks to provide growth of capital and some current income. Under
normal market conditions, the Fund invests at least 45% of its total assets
in equity securities, such as common and preferred stocks and securities
which are convertible into common stocks, and the balance of its total
assets in equity-based derivative instruments, such as Standard & Poor's
Depositary Receipts ("SPDRs"), stock index futures contracts, options on
stocks and stock indexes, and equity swap contracts. The portion of the
Fund's total assets invested in equity securities will vary from time to
time, depending upon the Adviser's assessment of the available equity-based
derivative investments. The Fund currently anticipates that under normal
market conditions approximately 50% of its total assets will be invested
each year in the ten common stocks included in the Dow Jones Industrial
Average which have the highest dividend rates (as a percentage of their
market price), and that the balance of its assets will be invested
primarily in SPDRs or a substantial number of additional common stocks that
the Adviser believes would closely replicate the performance of the
Standard & Poor's 500 Index.
Although the Fund's return will vary principally with changes in the equity
market, the Fund is not an index fund, and changes in the Fund's net asset
value per share will not precisely track changes in the general market.
The Fund earns income through investments in dividend paying stocks.
During times when the Adviser believes that a temporary defensive posture
is warranted, the Fund may hold part or all of its assets in cash, U.S.
Government and Government agency securities, money market obligations,
corporate debt securities and money market funds, as described below. When
the assets of the Fund are so invested, the Fund may not be achieving its
investment objective.
Because of its investment policies, the Fund may or may not be suitable or
appropriate for all investors. The Fund is not a money market fund and is
not appropriate for those whose primary objective is stability of
principal. The value of the portfolio securities of the Fund will
fluctuate based upon market conditions.
INVESTMENT POLICIES AND RISK FACTORS
The Fund may purchase the securities and instruments and participate in the
transactions listed below. See "Investment Objectives and Policies" in the
Statement of Additional Information for more detailed discussions of these
matters.
Equity Securities and ADRs. The Fund may invest in equity securities,
including common stocks, convertible securities and warrants. Common
stocks, the most familiar type of equity securities, represent an equity
(ownership) interest in a corporation. The Fund may also purchase dollar-
denominated American Depository Receipts ("ADRs"), which are securities
issued by domestic banks and evidence ownership of underlying foreign
securities. ADRs may be sponsored by the foreign issuer or may be
unsponsored. Unsponsored ADRs are organized independently and without the
cooperation of the foreign issuer of the underlying securities; as a
result, available information regarding the issuer may not be as current as
for sponsored ADRs, and the prices of unsponsored ADRs may be more volatile
than if they were sponsored by the issuers of the underlying securities.
Convertible Securities and Warrants. Convertible securities, such as
convertible preferred stocks and debentures, may be exchanged for or
converted into a predetermined number of shares of the issuer's common
stock at the option of the holder during a specified time period.
Convertible securities generally pay interest or dividends and provide for
participation in the appreciation of the underlying common stock. The
value of a convertible security is a function of a variety of factors,
including its yield in comparison with comparable non-convertible
securities, its value if converted into the underlying common stock, and
the credit standing of the issuer.
Warrants give the holder the right to purchase a specified number of shares
of the underlying stock at any time at a fixed price, but do not pay a
fixed dividend. Investment in warrants involve certain risks, including
the possible lack of a liquid market for resale, potential price
fluctuations as a result of speculation or other factors, and the failure
of the price of the underlying security to reach or have reasonable
prospects of reaching a level at which the warrant can be prudently
exercised (in which event the warrant may expire without being exercised,
resulting in a loss of the Fund's entire investment in the warrant). As a
matter of operating policy, the Fund will not invest more than 5% of its
total assets in warrants.
Standard & Poor's Depositary Receipts. SPDRs are shares of a publicly
traded unit investment trust which owns the stocks included in the Standard
& Poor's 500 Index, and changes in the prices of SPDRs track the movement
of the Index relatively closely. SPDRs are subject to the risks of an
investment in a broadly based portfolio of common stocks, including the
risk of declines in the general level of stock prices. They are also
subject to the risks of trading halts due to market conditions or other
reasons that, in the view of the New York Stock Exchange, make trading in
SPDRs inadvisable.
Under normal market conditions, up to 50% of the total assets of the Fund
may be invested in a combination of SPDRs and equity index mutual funds.
However, under the Investment Company Act of 1940, the Trust and its
affiliated persons, including investors holding 5% or more of the
outstanding shares of the Fund and other clients of the Adviser, may not
hold in the aggregate more than 3% of the outstanding SPDRs.
In addition, the Act provides that (i) neither the unit investment trust
which issues SPDRs, nor any equity index mutual fund in which the Fund
invests, is obligated to redeem SPDRs or shares of such fund in an amount
exceeding 1% of the issuer's total outstanding securities during any period
of less than 30 days, and (ii) the Fund must vote shares of such investment
trust and any such equity index mutual fund in the same proportion as the
vote of all other shareholders of such securities, or must seek voting
instructions from the shareholders of the Fund with regard to the voting of
proxies with respect to such investment trust and such equity index mutual
fund and must vote the proxies in accordance with such instructions. The
Investment Adviser does not believe that these requirements will adversely
impact the Fund.
SPDR shares trade on the American Stock Exchange at approximately one-tenth
the value of the S&P 500 Index. SPDRs are relatively liquid with an
average daily volume during August, 1996 of 708,000 shares per day.
Because SPDRs exactly replicate the Index, any price movement away from the
value of the underlying stocks is generally quickly eliminated by
professional traders. Thus, the Adviser believes that the movement of SPDR
share prices should closely tract the movement of the Index.
The administrator of the SPDR program, the American Stock Exchange,
receives a fee to cover its costs of approximately 0.20% per year. This
fee is deducted from the dividends paid to SPDR investors. Investors in
Fund shares will incur not only the operational costs of the Fund, but will
also incur the expenses deducted by the administrator of the SPDR program.
Futures and Option Contracts. The Fund may enter into equity index futures
contracts for the non-hedging investment purposes described above, as well
as to hedge against declines in the value of equity securities held or
intended to be held by the Fund. An equity index, such as the S&P 500
Index, is a statistical measure designed to reflect specified facets of a
particular financial or securities market.
An index futures contract is an agreement pursuant to which two parties
agree to take or make delivery of an amount of cash equal to the difference
between the value of the index at the close of the last trading day of the
contract and the price at which the index contract was originally written.
An interest rate futures contract provides for the delivery by one party
and the purchase by another party of a specified quantity of a financial
instrument at a specified future date and price. Although the value of a
futures contract may be a function of the value of certain specified
securities, no physical delivery of these securities is made. Such futures
contracts are derivative instruments which may be traded on U.S. exchanges
or with broker-dealers which maintain futures markets. Upon entering into
a futures contract, the Fund will be required to deposit with its custodian
in a segregated account in the name of its futures broker a specified
amount of cash or securities. This amount is known as "initial margin",
and is in the nature of a performance bond or good faith deposit on the
contract which is returned to the Fund upon termination of the contract,
assuming all contractual obligations have been satisfied. Subsequent
payments, called "variation margin" to and from the broker, will be made on
a daily basis as the price of the index fluctuates, making the position in
the futures contract more or less valuable, a process known as "marking to
market".
The Fund may also purchase covered and uncovered put and call options on
securities and securities indexes, write covered put and call options on
securities and securities indexes, and purchase and write put and call
options on futures contracts. Such options are derivative securities which
may be traded on U.S. exchanges or with broker-dealers which maintain
markets for options. The Fund may also employ combinations of put and call
options, including without limitation straddles, spreads, collars and
strangles.
Transactions in options, futures contracts and options on futures contracts
involve a variety of risks, including the inability to close out a position
because of the lack of a liquid market, default by the other party to the
contract and, in the case of futures transactions, lack of correlation
between price movements in the derivative instruments and the equity
markets or the portfolio assets being hedged. In addition, the potential
loss incurred by the Fund in engaging in futures transactions and writing
options on future contracts is unlimited. No more than 5% of the value of
the Fund's total assets will be committed to initial margin deposits on
futures contracts and premiums on option contracts. The Fund covers its
obligations with respect to such futures contracts and options by
maintaining assets sufficient (together with its margin deposits) to meet
such obligations; depending on the nature of the contract or option, this
cover is in the form of liquid assets, put or call options on the
underlying instruments which are the subject of the contract or option, or
a long or short position in the contract which is the subject of an option.
Options and futures transactions can be highly volatile and could result in
reduction of a Fund's total return, and the Fund's attempt to use such
instruments for hedging purposes may not be successful. The aggregate
market value of the Fund's portfolio securities covering put and call
options on securities written by the Fund will not exceed 50% of the value
of its net assets.
Equity Swap Contracts. The Fund may enter into equity swap transactions.
An equity swap is a derivative instrument which involves an agreement
between the Fund and another party to exchange payments calculated as if
they were interest on a fictitious ("notional") principal amount. The Fund
will typically pay a floating rate of interest, such as the three-month
London Interbank Offered Rate, and receive the total return (price change
plus dividends) of a specified equity index (such as the S&P 500 Index).
If the total return on the equity index is negative for the contract
period, the Fund will pay its counterparty the amount of the loss in the
value of the notional amount plus interest at the floating rate. From time
to time, the Fund may wish to cancel an equity swap contract in order to
reduce its equity exposure. Although the swap contract may be sold back to
the Fund's counterparty, it may be more advantageous to enter into a swap
contract in which the Fund would reduce its equity exposure by agreeing to
receive a floating rate of interest and pay the change in the index. This
is sometimes called a "reverse equity swap contract" and would only be
entered into to reduce equity exposure. The Fund will not use reverse swap
contracts to short the equity market.
The Fund usually enters into such transactions on a "net" basis, with the
Fund receiving or paying, as the case may be, only the net amounts of the
two payment streams. The net amount of the excess, if any, of the Fund's
obligations over its entitlements with respect to each swap is accrued on a
daily basis, and an amount of cash or high-quality liquid securities having
an aggregate net asset value at least equal to the accrued excess is
maintained in a segregated account by the Group's Custodian. If the Fund
enters into a swap on other than a net basis, the Fund maintains a
segregated account in the full amount accrued on a daily basis of the
Fund's obligations with respect to the transaction. Such segregated
accounts are maintained in accordance with applicable regulations of the
Securities and Exchange Commission.
The Fund does not enter into any swap transaction unless the unsecured
senior debt or the claims paying ability of the other party to the
transaction (typically a bank, investment banking firm or broker-dealer) is
rated at least A by Standard & Poor's Corporation or Moody's Investor
Services, Inc. Swap transactions do not involve the delivery of securities
or other underlying assets or principal, and the risk of loss with respect
to such transactions is limited to the net amount of payments that the Fund
is contractually obligated to make or receive. However, the staff of the
Securities and Exchange Commission considers equity and reverse equity swap
contracts to be illiquid securities. Consequently, while the staff
maintains this position, the Fund will not enter into an equity swap
transaction at any time that the aggregate amount of its net obligations
under such transactions, together with the value of all other illiquid
securities the Fund owns, exceeds 15% of its net assets.
The use of swaps is a highly specialized activity which involves investment
techniques and risks different from those associated with ordinary
portfolio securities transactions. If the Adviser's forecast of market
values, interest rates, and other applicable factors is incorrect, the
investment performance of the Fund will diminish compared with the
performance that could have been achieved if these investment techniques
were not used. Moreover, even if the Adviser's forecasts are correct, the
Fund's swap position may correlate imperfectly with the markets or the
asset or liability being hedged. In addition, in the event of a default by
the other party to the transaction, the Fund might incur a loss.
Other Equity Investments. The Fund may purchase preferred stocks and
shares of equity index funds. Preferred stock, unlike common stock, offers
a stated dividend rate payable from a corporation's earnings, and also
generally has a preference over common stock on the distribution of a
corporation's assets in the event of liquidation of the corporation.
Equity index mutual funds, which own the stocks included in the S&P 500
Index, are intended to closely track the Index; although such funds
generally have substantial assets and low operating expenses, investment in
such a fund by the Fund will involve a duplication of expenses, as it will
require payment by the Fund of its pro rata share of advisory and
administrative fees charged by the fund. The Fund does not anticipate
investing more than 50% of its net assets in a combination of equity index
mutual funds and SPDRs.
U.S. Government and Agency Obligations. The Fund may invest in obligations
issued by the U.S. Treasury and in securities issued or guaranteed by U.S.
Government sponsored enterprises and federal agencies. These securities
include Treasury bills, which mature in one year or less, Treasury notes
and bonds that mature in 2 to 30 years from the date of issue, and agency
issues, which may have maturities from one day to 40 years. Corporate Debt
Securities. The Fund may invest in U.S. dollar denominated corporate
bonds, debentures, notes and other similar non-convertible debt instruments
of domestic and foreign corporations which, at the time of purchase, are
rated investment grade by at least one of the established rating agencies
or, if unrated, are determined to be of comparable quality by the Adviser.
Such obligations may have interest rates which are fixed, variable or
floating. The Fund may also purchase long-term debt obligations that have
been coupled with an option allowing the Fund at specified intervals to
tender (or "put") such debt obligations to the issuer and receive an agreed
upon amount, usually face value plus accrued interest. All debt securities
held by the Fund are rated "investment grade" at the time of purchase by at
least one of the established rating agencies (e.g., AAA, AA, A, or BBB by
Standard & Poor's Corporation) or, if unrated, are determined to be of
comparable quality by the Adviser. Securities rated BBB are considered to
have adequate capacity to pay interest and repay principal, but adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay interest and principal than higher rated bonds.
If the rating of a debt security in which the Fund has made an investment
falls below the investment grade level, the Fund will discontinue making
investments in that issuer and liquidate any current holdings as soon as
the Adviser determines it is in the best interest of the Fund to do so.
In no event will the Fund hold more than 5% of its net assets in
obligations rated below investment grade. No such obligation will be rated
below BB.
Money Market Obligations. The Fund may invest in U.S. dollar denominated
bank certificates of deposit, bankers acceptances, commercial paper and
other short-term debt obligations of U.S. and foreign issuers, including
U.S. Government and agency obligations. All money market obligations will
be required to be high quality, meaning that the security will be rated in
one of the two highest categories for short-term securities by at least two
nationally recognized rating services (or by one if only one rating service
has rated the security) or, if unrated, will be judged to be of equivalent
quality by the Adviser.
Money Market Funds. To maintain liquidity, the Fund may invest in
unaffiliated money market funds. No money market fund investment by the
Fund will be in excess of 3% of the total assets of the money market fund.
The Fund does not anticipate investing more than 15% of its net assets in
money market funds. An investment in a money market mutual fund by the
Fund will involve a duplication of expenses, as it will require payment by
the Fund of its pro rata share of advisory and administrative fees charged
by such money market fund.
Repurchase Agreements. For the purpose of maintaining liquidity, the Fund
may enter into repurchase agreements (agreements to purchase U.S. Treasury
notes and bills, subject to the seller's agreement to repurchase them at a
specified time and price) with well-established registered securities
dealers(primary government dealers as designated by the Federal Reserve
Bank). In the event of a bankruptcy or default of any such dealer, the
Fund could experience costs and delays in liquidating the underlying
securities which are held as collateral, and the Fund might incur a loss if
the value of the collateral held declines during this period.
Certain Risks of Investing in Debt Obligations. Yields on short,
intermediate, and long-term debt obligations depend on a variety of
factors, including the general conditions of the money and bond markets,
the size of a particular offering, the maturity of the obligation and the
rating of the issue. Debt obligations with longer maturities tend to
produce higher yields and are generally subject to potentially greater
capital appreciation and depreciation than obligations with shorter
maturities and lower yields. The market prices of debt obligations usually
vary depending upon available yields. An increase in interest rates will
generally reduce the value of such portfolio investments, and a decline in
interest rates will generally increase the value of such portfolio
investments.
Non-Diversified Status of Fund. As the Adviser may from time to time
invest a large percentage of the Fund's assets in securities of one or more
issuers, the Fund is classified as a "non-diversified" investment company.
Accordingly, the Fund may be more susceptible to risks associated with a
single economic, political or regulatory occurrence than a diversified
investment company might be. However, the Fund intends to qualify as a
"regulated investment company" under the Internal Revenue Code, and
therefore will be subject to diversification limits requiring that, as of
the close of each fiscal quarter, (i) no more than 25% of its total assets
may be invested in the securities of a single issuer (other than U.S.
Government securities), and (ii) with respect to 50% of its total assets,
no more than 5% of such assets may be invested in the securities of a
single issuer (other than U.S. Government securities) or invested in more
than 10% of the outstanding voting securities of a single issuer.
Foreign Investment Risks. Investing in the dollar-denominated securities
of any foreign issuer involves special risks and considerations not
typically associated with investing in U.S. issuers. These include
differences in accounting, auditing and financial reporting standards;
different disclosure laws, which may result in less publicly available
information about foreign issuers than U.S. issuers; the possibility of
nationalization, expropriation or confiscatory taxation; adverse changes in
investment or exchange control regulations (which may include suspension of
the ability to transfer currency from a country); and political
instability. Additionally, foreign securities and dividends payable on
those securities may be subject to foreign taxes, including taxes withheld
from payments on those securities. Foreign securities often trade with
less frequency and volume than domestic securities and, therefore, may
exhibit greater price volatility. Additional costs associated with an
investment in foreign securities may include higher custodial fees than
apply to U.S. custodial arrangements.
OTHER INVESTMENT POLICIES
The investment program and policies for the Fund are subject to further
restrictions and risks which are described in the Statement of Additional
Information. The Fund's investment objective is fundamental and,
therefore, may not be changed without obtaining shareholder approval.
Other investment policies and practices may be changed without shareholder
approval unless otherwise specified as fundamental policies.
Fundamental Investment Policies. As a matter of fundamental policy, the
Fund will not (1) purchase a security of any issuer if, as a result, more
than 10% of the outstanding voting securities of the issuer would be held
by the Fund; (2) borrow money except for temporary, extraordinary or
emergency purposes or for the clearance of transactions in amounts not
exceeding 30% of its total assets valued at market (for this purpose,
equity and reverse equity swap transactions are not considered to be
borrowings.); (3) in any manner transfer as collateral for indebtedness any
security of the Fund except in connection with permissible borrowings; or
(4) purchase any security which would cause 25% or more of the value of the
Fund's total assets at the time of purchase to be invested in the
securities of any one or more issuers conducting their principal business
activities in the same industry, provided that (a) there is no limitation
with respect to U.S. Government obligations and repurchase obligations
secured by such obligations, (b) wholly owned finance companies will be
considered to be in the industries of their parents, (c) SPDRs will be
divided according to the industries of their underlying common stocks, and
(d) utilities will be divided according to their services. (For example,
gas, gas transmission, electric and telephone will each be considered a
separate industry.)
Other Investment Policies. As a matter of operating policy, the Fund will
not (1) purchase a security of any one issuer if, as a result, more than
15% of the value of its net assets would be invested in illiquid
securities, including repurchase agreements which do not provide for
payment within seven days, or other securities which are not readily
marketable; or (2) purchase additional securities when borrowings exceed 5%
of the Fund's total assets.
Portfolio Turnover. Securities may be sold without regard to the length of
time held. The portfolio turnover of the Fund may be higher than that of
other mutual funds with less aggressive trading strategies, which would, in
turn, increase the Fund's transaction costs. The Fund cannot accurately
predict its annual portfolio turnover rate; however, although it could vary
substantially, it will generally not exceed 100% during any year. To the
extent that short-term trading results in the realization of short-term
capital gains, shareholders will be taxed on such gains at ordinary income
tax rates.
MANAGEMENT OF THE FUND
The business of the Group is managed under the direction of its Board of
Trustees, which establishes the Group's policies and supervises and reviews
the management of the Fund. Information about the Trustees and the Group's
executive officers may be found in the Statement of Additional Information.
INVESTMENT ADVISER
Payden & Rygel serves as investment adviser to the Fund pursuant to an
investment management contract with the Group. The Adviser is an
investment counseling firm founded in 1983 and currently has over $20
billion of assets under management. Payden & Rygel's address is 333 South
Grand Avenue, Los Angeles, California 90071. It is registered as an
investment adviser with the Securities and Exchange Commission and as a
commodity trading adviser with the Commodity Futures Trading Commission.
The Adviser manages the investment and reinvestment of the assets of the
Fund and reviews, supervises and administers all investments. All
investment decisions for the Fund are made by an investment committee of
five investment professionals. In making such decisions, the committee
primarily uses a fundamental analysis approach, supported by extensive
quantitative analysis. The Adviser is also responsible for placing orders
for the purchase and sale of investments directly with brokers or dealers
selected by it in its discretion. See "Portfolio Transactions" in the
Statement of Additional Information.
The Adviser receives a monthly fee from the Fund at an annual rate based on
0.30% for the first $2 billion of the Fund's average daily net assets and
0.10% of the Fund's net assets above $2 billion. The Adviser has
voluntarily agreed to waive 0.20% of its management fee through at least
October 31, 1997. In the absence of waiver, fees would be 0.50% for the
first $2 billion of the Fund's average daily net assets and 0.30% of the
Fund's net assets above $2 billion.
ADMINISTRATOR AND TRANSFER AGENT
Treasury Plus, Inc., a wholly owned subsidiary of the Adviser located at
3200 North Central Avenue, Suite 620, Phoenix, Arizona, 85012, serves as
the Administrator to the Fund pursuant to a management and administration
contract with the Group. The Administrator provides administrative
services to the Fund, including administrative and clerical functions,
certain shareholder servicing functions and supervision of the services
rendered to the Fund by other persons. Investors Fiduciary Trust Company, a
Missouri trust company located at 127 West 10th Street, Kansas City,
Missouri, 64105, provides accounting, dividend disbursing and transfer
agency services to the Fund pursuant to fund accounting and transfer agency
contracts with the Group.
For providing administrative services to the Group, the Administrator
receives a monthly fee at the annual rate of 0.06% of the daily net assets
of the Group. Investors Fiduciary Trust Company receives fees for fund
accounting services and dividend disbursing and transfer agency services.
Certain out-of-pocket expenses are also reimbursed at actual cost.
DISTRIBUTOR
Shares of the Fund are distributed through Payden & Rygel Distributors, a
wholly owned subsidiary of Payden & Rygel located at the same address. The
Distributor is a broker-dealer registered with the Securities and Exchange
Commission and is a member of the National Association of Securities
Dealers.
SHAREHOLDER SERVICE PLAN
The Board of Trustees has adopted a Shareholder Service Plan with respect
to Class B shares of the Fund and of the other portfolios of the Group.
Under the Plan, the Class B shares of the Fund pay the Distributor an
annual fee of up to 0.20% of the average net assets of the Fund
attributable to the Class B shares for services provided by the
Distributor, broker-dealers and other service organizations to the
beneficial owners of Class B shares. Such support services include
establishing and maintaining accounts and records relating to clients;
assisting clients in processing purchase, exchange and redemption requests
and account designations; preparing tax reports and forms; forwarding
shareholder communications from the Fund; and responding to client
inquiries concerning their investments.
Services provided under the Shareholder Service Plan are not primarily
intended to result in the sale or distribution of Class B Shares of the
Fund. The Plan is a "compensation" plan, which means that the fees paid to
the broker-dealers and other service organizations for services rendered
are payable even if the amounts paid exceed their actual expenses. If in
any month the Distributor is due more fees for shareholder services than
are immediately payable because of the expense limitations under the Plan,
the unpaid amount is carried forward from month to month while the Plan is
in effect until such time when it may be paid. However, no carried forward
amount will be payable beyond the fiscal year in which the amount was
incurred, and no interest, carrying or other finance charge is borne by the
Class B Shares with respect to any amount carried forward.
HOW TO PURCHASE SHARES
Shares of the Fund may be purchased at net asset value without a sales
charge. The minimum initial investment is $5,000, and the minimum
subsequent investment is $1,000. The minimum investment may be waived from
time to time by the Group. An account may be opened by calling the
Distributor at (213) 625-1900 or (800) 5-PAYDEN (800/572-9336) and asking
for a Fund Representative. The Representative will answer any questions
and provide a Fund Prospectus. If you wish to open a tax-sheltered
retirement plan such as an IRA, a special application form must be
completed. Please be sure to ask for an IRA information kit.
INITIAL INVESTMENT
By Check
- - Complete Application
- - Make check payable to the Fund and mail with application to:
Payden & Rygel Investment Group
333 South Grand Avenue
Los Angeles, CA 90071
By Federal Funds Wire
- - Complete application and mail to:
Payden & Rygel Investment Group
333 South Grand Avenue
Los Angeles, CA 90071
- - For Growth & Income Fund
Wire funds to The Boston Safe Deposit and Trust Company
ABA #011001234
A/C #115762
Mutual Funds #6630
Credit to Payden & Rygel Growth & Income Fund
For Benefit of (insert account name here)
Note: Third party checks will not be accepted without the prior consent of
the Distributor. Shares cannot be purchased until a properly completed
application is received by the Group.
Shares of the Fund are purchased at the net asset value per share next
determined after receipt by the Distributor of an order to purchase shares
in proper form. Purchase orders will be accepted only on days on which the
Fund and the Custodian are open for business, as defined below.
The Fund is "open for business" on each day the New York Stock Exchange is
open for trading, which excludes the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
ADDITIONAL INVESTMENTS
Additional investments may be made at any time (minimum additional
investment $1,000) at net asset value by check or by calling the
Distributor and wiring Federal funds to the Custodian as described above.
TAX-SHELTERED RETIREMENT PLANS
The Funds accept purchases of shares by tax-sheltered retirement plans such
as IRAs, rollover IRAs, Keogh or corporate profit sharing plans, Simplified
Employee Pension plans and 401(k) plans. Please call a Fund Representative
to receive a retirement package which includes a special application for
tax-sheltered accounts. Investors should consult a tax adviser for
information specific to their particular investment situation. Fees paid
to the trustee of any such plan for account set up and annual maintenance
will be charged to the plan's account.
OTHER PURCHASE INFORMATION
Purchases of shares will be made in full and fractional shares.
Certificates for shares will not be issued. The Fund reserves the right,
in its sole discretion, to suspend the offering of shares or to reject
purchase orders when, in the judgment of its management, such suspension or
rejection is in the best interest of the Fund; to waive the minimum initial
investment for certain investors; and to redeem shares if information
provided in the client application proves to be incorrect in any material
manner.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
The Group currently consists of twelve investment portfolios with varying
investment objectives and policies, and other investment portfolios may be
created by the Board of Trustees in the future. If a shareholder's
investment objective or outlook for the securities markets changes, Fund
shares may be exchanged for Class A or Class B shares of any of the other
investment portfolios of the Group which are eligible for sale to the
shareholder by the Distributor or for the other class of shares of the
Fund. Exchanges are made on the basis of the net asset values of the
portfolios involved.
Because an exchange is considered a redemption and purchase of shares, the
shareholder may realize a gain or loss for federal income tax purposes.
Information regarding the possible tax consequences of an exchange is
included in the "Dividends, Distributions and Taxes" section of this
Prospectus and in the Statement of Additional Information.
Before making an exchange into another investment portfolio, a shareholder
should obtain and review a current prospectus of the investment portfolio
into which the shareholder wishes to transfer. When exchanging shares into
another investment portfolio, shareholders should be aware that, among
other significant differences, the portfolios may have different dividend
payment dates, minimum initial investments and minimum additional
investments. Exchanges will be effected upon receipt of written
instructions signed by all account owners. In addition, shareholders who
complete the telephone privilege authorization portion of the Account
Registration Form may effect exchanges from the Fund into or an identically
registered account in one of the other available portfolios by a telephone
call to the Distributor at (213) 625-1900 or (800) 5-PAYDEN (800/572-9336).
The Exchange Privilege may be modified or discontinued by the Group at any
time upon 60 days' notice to shareholders. The Group also reserves the
right to limit the number of exchanges a shareholder may make in any year
to avoid excessive Fund expenses. The Exchange Privilege is only available
in states where the exchange may be legally made.
TELEPHONE PRIVILEGE
Shareholders may exchange or redeem shares by telephone if they have
elected the telephone privilege authorization portion of the Account
Registration Form. During periods of drastic economic or market changes,
it is possible that the telephone exchange privilege may be difficult to
implement. In this event, shareholders should follow the other exchange
and redemption procedures discussed in this Prospectus.
Shareholders should realize that, by electing the telephone privilege, they
may be giving up a measure of security that they may have if they were to
exchange or redeem their shares in writing. The Group will employ
procedures designed to provide reasonable assurance that instructions
communicated by telephone, telegraph or wire communication are genuine and,
if it does not do so, it may be liable for any losses due to unauthorized
or fraudulent instructions. The procedures employed by the Group include
requiring personal identification by account number and social security or
tax identification number, tape recording telephone instructions and
providing written confirmation of transactions. The Group reserves the
right to refuse a telephone, telegraph or wire communication exchange or
redemption request if it believes, for example, that the person making the
request is neither the record owner of the shares being exchanged or
redeemed nor otherwise authorized by the investor to request the exchange
or redemption. Shareholders will be promptly notified of any refused
request for a telephone, telegraph, or wire communication exchange or
redemption. Neither the Group nor its agents will be liable for any loss,
liability or cost which results from acting upon instructions of a person
reasonably believed to be a shareholder with respect to the telephone,
telegraph or wire communication privilege.
REDEMPTION OF SHARES
Fund shares will be redeemed at the net asset value next determined
following receipt of the request in proper form. Redemptions may be made
in writing, by calling the Distributor at (213) 625-1900 or (800) 5-PAYDEN
(800/572-9336), by telegraph or by other wire communication. No charge is
made for redemptions. Shares redeemed may be worth more or less than the
purchase price of the shares, depending on the market value of the
investment securities held by the Fund at the time of redemption.
Redemption requests in writing or by telegraph or other wire communications
should be directed to the Payden & Rygel Investment Group, Attn.: Fund
Distributor, at 333 South Grand Avenue, Los Angeles, California 90071. If
the proceeds of a written request are to be paid to a person other than the
record owner of the shares, or are to be sent to an address other than the
address of record, the signature on the request must be guaranteed by a
commercial bank, a trust company or another eligible guarantor institution.
A signature guarantee may be rejected if it is believed to be not genuine
or if there is any reason to believe that the transaction is improper.
Telephone redemptions may be difficult to implement during periods of
drastic economic or market changes, which may result in an unusually high
volume of telephone calls. See "Shareholder Services _ Telephone
Privilege."
Payment of the redemption price will ordinarily be wired to the
shareholder's bank or mailed to the shareholder's address of record one
business day after receipt of the request. The Fund may suspend the right
of redemption or postpone the payment date at times when the New York Stock
Exchange is closed or during certain other periods as permitted under the
federal securities laws.
NET ASSET VALUE
For each class of shares, the net asset value per share of the Fund is
determined as of the close of regular trading on the New York Stock
Exchange (currently 4:00 p.m. New York Time) by dividing the difference
between the value of the assets and liabilities of the class by the number
of shares of that class outstanding. The net asset value per share of each
class will vary due to differences in expenses charged to each class and
will generally be lower for Class B shares than for Class A shares. Net
asset value will not be determined on days on which the New York Stock
Exchange is closed.
Portfolio securities and other assets for which market quotations are
readily available (other than obligations with remaining maturities of 60
days or less) are valued at market value. Fixed income securities (other
than obligations with remaining maturities of 60 days or less) are normally
valued on the basis of quotes obtained from brokers and dealers or pricing
services, which take into account appropriate factors such as institutional-
sized trading in similar groups of securities, yield, quality, coupon rate,
maturity, type of issue, trading characteristics and other market data.
Certain fixed income securities for which daily market quotations are not
available may be valued, pursuant to guidelines established by the Board of
Trustees, with reference to fixed income securities the prices of which are
more readily obtainable and the durations of which are comparable to the
securities being valued. The Board of Trustees has determined that debt
securities with remaining maturities of 60 days or less will be valued on
an amortized cost basis unless the Adviser determines that such basis does
not represent fair value at the time.
The Fund invests in securities that are traded in certain markets on days
or at times the Fund is not open for business. Accordingly, the Fund's net
asset value may be significantly affected on days or at times when
investors cannot purchase or redeem shares.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Dividends are generally declared and distributed to shareholders quarterly.
Class B dividends will normally be lower than Class A dividends. Any net
realized capital gains from the sale of portfolio securities will be
distributed no less frequently than once a year. Dividend and capital gain
distributions of the Fund will be paid in the form of additional shares of
the Fund at the net asset value on the ex-dividend date unless the
shareholder elects to have them paid in cash by completing an appropriate
request form.
The Fund has elected and intends to qualify annually to be treated as a
regulated investment company under the Internal Revenue Code of 1986, as
amended (the "Code"). As a regulated investment company, the Fund will not
be subject to federal income tax on its investment company taxable income
(which includes taxable interest and net short-term capital gains in excess
of any net long-term capital losses) and net capital gain (net long-term
capital gains in excess of the sum of net short-term capital losses and
unexpired capital loss carryovers), if any, that it distributes to
shareholders, provided it distributes each taxable year at least 90% of its
investment company taxable income, including its net interest income
excludable from gross income under section 103(a) of the Code. The Fund
intends to distribute to its shareholders, at least annually, substantially
all such amounts.
Any dividends or distributions paid shortly after a purchase by an investor
will have the effect of reducing the per share net asset value of the
investor's shares by the per share amount of the dividends or
distributions. Accordingly, prior to purchasing shares of the Fund, an
investor should carefully consider the impact of the dividends or capital
gains distributions which are expected to be or have been announced.
Distributions may be subject to additional state and local taxes, depending
on each shareholder's particular situation. Shareholders should consult
their own tax advisers with respect to the particular tax consequences to
them of an investment in the Fund. For further discussion of these
matters, please see the Statement of Additional Information.
OTHER INFORMATION
CAPITALIZATION
The Group was organized as a Massachusetts business trust on January 22,
1992. Its Declaration of Trust authorizes the Board of Trustees to issue
an unlimited number of shares of beneficial interest in the Group, and to
classify or reclassify any unissued shares into one or more series or
classes of shares. Pursuant to such authority, the Board of Trustees has
authorized the issuance of nine series of shares, which are sold through
separate prospectuses. Each series of shares has two classes, Class A and
Class B. The Board of Trustees may establish additional series or classes
of shares in the future.
VOTING
Shareholders have the right to vote in the election of Trustees and on any
and all matters on which they may be entitled to vote by law or the
provisions of the Declaration of Trust. Shares entitle their holders to
one vote per share (with proportionate voting for fractional shares).
Shareholders will vote in the aggregate and not by series or class except
as otherwise required by law or when the Board of Trustees of the Group
determines that a matter to be voted on affects only the interest of a
particular series or class. Voting rights are not cumulative, and
accordingly the holders of more than 50% of the shares of the Group may
elect all of the Trustees. The Group is not required to hold regular
annual meetings of shareholders and does not intend to do so except when
required by law. The Declaration of Trust provides that the holders of not
less than two-thirds of the outstanding shares of the Group may remove a
person serving as Trustee at a shareholder meeting called by written
request of the holders of not less than 10% of the outstanding shares of
any series.
PERFORMANCE INFORMATION
The Group may, from time to time, include the yield and total return for
shares in advertisements or reports to shareholders or prospective
investors. Yield and total return are calculated separately for Class A
and Class B shares. Quotations of yield will be based on annualizing the
net investment income per share during a particular 30-day (or one month)
period. Quotations of average annual total return will be expressed in
terms of the average annual compounded rate of return of a hypothetical
investment in the Fund over specified periods.
Any performance information, whether related to the Fund or to the Adviser,
should be considered in light of the Fund's investment objective and
policies, the characteristics and quality of its portfolio and the market
conditions during the time period indicated and should not be considered to
be representative of future results. For a description of the methods used
to determine yield and total return for the Fund, please see the Statement
of Additional Information.
OFFERING
No dealer, sales representative or other person has been authorized to give
any information or to make any representations, other than those contained
in this Prospectus, in connection with the offer contained herein, and, if
given or made, such other information or representations may not be relied
upon as having been authorized by the Group or the Distributor. This
Prospectus does not constitute an offer by the Group or the Distributor to
sell, or a solicitation of an offer to buy, any of the securities offered
hereby in any jurisdiction to any person to whom it is unlawful to make
such offer in such jurisdiction.
Investment Adviser
Payden & Rygel
333 South Grand Avenue
Los Angeles, California 90071
Distributor
Payden & Rygel Distributors
333 South Grand Avenue
Los Angeles, California 90071
Administrator
Treasury Plus, Inc.
3200 North Central Avenue, Suite 620
Phoenix, AZ 85012
Custodian
Boston Safe Deposit and Trust Company
One Boston Place
Boston, MA 02109
Transfer Agent
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
Auditors
Deloitte & Touche LLP
1700 Courthouse Plaza Northeast
Dayton, Ohio 45402
Counsel
Paul, Hastings, Janofsky and Walker
555 South Flower Street
Los Angeles, California 90071
August 14, 1996
