<PAGE> 1
THE PAYDEN & RYGEL INVESTMENT GROUP
Supplement to Prospectus dated March 1, 1999
On page 16 under the heading entitled "Principal Investment Strategies" for the
Growth & Income Fund, the material under the first bullet point is deleted in
its entirety and the following is substituted in its place:
"The Fund is a large cap value fund. Under normal market conditions, the
Fund invests approximately 50% of its total assets in common stocks
known as the "dogs of the Dow" (the "Dogs Portfolio"), and the balance
in one or more broad market equity-based derivative instruments,
including Standard & Poor's Depositary Receipts with respect to the S&P
500 Index, DIAMONDS Trust, Series 1 with respect to the Dow Jones
Industrial Average and Nasdaq-100 Shares with respect to the Nasdaq-100
Index, and equity index mutual funds."
On page 32 under the section entitled "Additional Investment Strategies and
Related Risks," the material under the heading entitled "Registered Investment
Companies" is deleted in its entirety and the following is substituted in its
place:
"REGISTERED INVESTMENT COMPANIES. The Market Return Fund may invest in
shares of equity index mutual funds, and the Growth & Income Fund may
invest up to 50% of its total assets in a combination of broad market
equity-based derivative instruments, including Standard and Poor's
Depositary Receipts (SPDRs), DIAMONDS Trust, Series 1 (Diamonds) and
Nasdaq-100 Shares (QQQs), and equity index mutual funds. However, under
the Investment Company Act of 1940, the Group and its affiliated
persons, including investors holding 5% or more of the outstanding
shares of the Funds and other clients of the Adviser, may not hold in
the aggregate more than 3% of the outstanding SPDRs, Diamonds or QQQs,
or the shares of any such equity index mutual fund.
SPDRs are shares of a publicly traded unit investment trust which
owns the stocks included in the S&P 500 Index; changes in the prices of
SPDRs track the movement of the Index relatively closely. Diamonds are
shares of a publicly traded unit investment trust which owns the stocks
included in the Dow Jones Industrial Average; changes in the prices of
Diamonds track the movement of the DJIA relatively closely. QQQs are
shares of a publicly traded unit investment trust which owns the stocks
included in the Nasdaq-100 Index; changes in the prices of QQQs track
the movement of the Index relatively closely. SPDRs, Diamonds, and QQQs
are each 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 American Stock Exchange, make trading in them inadvisable.
Equity index mutual funds own the stocks included in the S&P 500
Index, and are intended to closely track the Index. Although such index
mutual funds generally have substantial assets and low operating
expenses, investment in such a fund by a 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 index mutual
fund."
On page 38 under the section entitled "How to Redeem Shares," the following
language is added before the last paragraph:
"The Group has authorized one or more brokers to accept
redemption orders on behalf of the Funds, and such brokers are
authorized to designate intermediaries to accept redemption orders on
behalf of the Funds. A Fund will be deemed to have received a redemption
order when an authorized broker or broker-authorized designee accepts
the order. A Customer's redemption order will be priced at the Fund's
NAV next computed after the order is accepted by an authorized broker or
broker-authorized designee. The authorized broker or broker-authorized
designee may charge the customer a fee for handling the redemption
order."
On page 39 under the section entitled "How to Purchase Shares," the following
language is added after the paragraph entitled "Additional Investments:"
"PURCHASES THROUGH BROKERS
The Group has authorized one or more brokers to accept purchase
orders on behalf of the Funds, and such brokers are authorized to
designate intermediaries to accept purchase orders on behalf of the
Funds. A Fund will be deemed to have received a purchase order when an
authorized broker or broker-authorized designee accepts the order. A
Customer's purchase order will be priced at the Fund's NAV next computed
after the order is accepted by an authorized broker or broker-authorized
designee. The authorized broker or broker-authorized designee may charge
the customer a fee for handling the purchase order."
The date of this Prospectus Supplement is January 19, 2000
<PAGE> 2
THE PAYDEN & RYGEL INVESTMENT GROUP
Supplement to Statement of Additional Information dated March 1, 1999
On page 4 under the section entitled "OPERATING POLICIES," sub-paragraph (3),
"INVESTMENT COMPANIES," is deleted in its entirety and the following is
substituted in its place:
"As a matter of operating policy, no Fund may:
....
(3) INVESTMENT COMPANIES. Purchase securities of open-end or closed-end
investment companies except in compliance with the Investment Company
Act of 1940, as amended. However, pursuant to an Order issued by the SEC
on December 29, 1999, any Fund may purchase shares of the Bunker Hill
Money Market Fund, provided that the investment does not exceed 25% of
the investing Fund's total assets."
On page 11, the section entitled "Money Market Funds" is deleted in its entirety
and the following is substituted in its place:
"Money Market Funds
To maintain liquidity, each Fund may invest in unaffiliated money market
funds. Under normal circumstances, a money market investment made by
either the Short Duration Tax Exempt or Tax Exempt Bond Funds will be in
federal tax-free mutual funds. No investment by any Fund in an
unaffiliated money market fund will be in excess of 3% of the total
assets of the money market fund. None of the Funds anticipates investing
more than 15% of its net assets in unaffiliated money market funds. In
addition, pursuant to an Order issued by the SEC on December 29, 1999,
any Fund may purchase shares of the Bunker Hill Money Market Fund,
provided that the investment does not exceed 25% of the investing Fund's
total assets. An investment in a money market fund by a Fund will
involve payment by the Fund of its pro rata share of advisory and
administrative fees charged by such money market fund."
The date of this Supplement to the Statement of Additional Information is
January 19, 2000.
