(LOGO) THE YACKTMAN FUNDS
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P R O S P E C T U S
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APRIL 30, 1999
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P R O S P E C T U S
April 30, 1999
THE YACKTMAN FUNDS, INC.
303 West Madison Street, Suite 1925
Chicago, Illinois 60606-3308
1-800-525-8258
The Yacktman Funds are no load mutual funds seeking long-term capital
appreciation and, to a lesser extent, current income. The Yacktman Funds are:
- THE YACKTMAN FUND
- THE YACKTMAN FOCUSED FUND
Please read this Prospectus and keep it for future reference. It contains
important information, including information on how The Yacktman Funds invest
and the services they offer to shareholders.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
Questions Every Investor Should Ask Before
Investing in The Yacktman Funds ............. 3
Fees and Expenses............................... 5
Investment Objective and Strategies............. 6
Management of the Funds......................... 7
The Funds' Share Price ......................... 8
Purchasing Shares............................... 9
Redeeming Shares............................... 11
Exchanging Shares.............................. 14
Dividends, Distributions and Taxes............. 14
Financial Highlights........................... 15
To Learn More about the Funds.................. 17
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QUESTIONS EVERY INVESTOR SHOULD ASK BEFORE INVESTING IN THE YACKTMAN FUNDS
1.WHAT ARE THE FUNDS' GOALS?
Both Funds seek long-term capital appreciation and, to a lesser extent,
current income.
2.WHAT ARE THE FUNDS' PRINCIPAL INVESTMENT STRATEGIES?
The Funds mainly invest in common stocks of United States companies,
some, but not all of which, pay dividends. Our investment adviser employs a
disciplined investment strategy. We buy growth companies of any size at what
we believe to be low prices. We think this conservative approach combines the
best features of "growth" and "value" investing. The Focused Fund differs from
The Yacktman Fund in that it holds fewer securities. The Yacktman Focused Fund
usually holds fewer than 20 securities, other than money market investments.
The Yacktman Fund typically will hold every security held by The Focused Fund.
Both Funds sell companies that no longer meet their investment criteria, or if
better investment opportunities are available.
3.WHAT ARE THE PRINCIPAL RISKS IN INVESTING IN THE FUNDS?
Investors in the Funds may lose money. There are risks associated with
investments in the types of securities in which the Funds invest. These risks
include:
- - MARKET RISK: The prices of the securities in which the Funds invest may
decline for a number of reasons. The price declines of common stocks, in
particular, may be steep, sudden and/or prolonged.
- - VALUE INVESTING RISK: From time to time "value" investing falls out of favor
with investors. When it does, there is the risk that the market will not
recognize a company's improving fundamentals as quickly as it normally would.
During these periods, the Funds' relative performance may suffer.
- - NON-DIVERSIFICATION RISK: The Focused Fund is a non-diversified investment
company. As such it likely will invest in fewer securities than diversified
investment companies and its performance may be more volatile. If the
securities in which The Focused Fund invests perform poorly, The Focused Fund
could incur greater losses than it would have had it invested in a greater
number of securities.
- - SMALLER-CAPITALIZATION COMPANIES RISK: The Funds may invest in smaller-
capitalization companies. Smaller-capitalization companies typically have
relatively lower revenues, limited product lines and lack of management
depth, and may have a smaller share of the market for their products or
services, than larger-capitalization companies. The stocks of smaller-
capitalization companies tend to have less trading volume than stocks of
larger-capitalization companies. Less trading volume may make it more
difficult for our investment adviser to sell securities of smaller-
capitalization companies at quoted market prices. Finally, there are periods
when investing in smaller-capitalization stocks falls out of favor with
investors and the stocks of smaller-capitalization companies underperform.
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Because of these risks the Funds are a suitable investment only for those
investors who have long-term investment goals. Prospective investors who are
uncomfortable with an investment that will increase and decrease in value
should not invest in the Funds.
4.HOW HAVE THE FUNDS PERFORMED?
The bar charts and tables that follow provide some indication of the
risks of investing in The Yacktman Funds by showing changes in each Fund's
performance from year to year and how its average annual returns over various
periods compare to the performance of the Standard & Poor's Composite Index of
500 Stocks ("S&P 500"). Please remember that each Fund's past performance is
not necessarily an indication of its future performance. It may perform better
or worse in the future.
THE YACKTMAN FUND
TOTAL RETURN PER CALENDAR YEAR
1993 -6.58%
1994 8.80%
1995 30.42%
1996 26.02%
1997 18.28%
1998 0.64%
Note: During the six year period shown on the bar chart, the Fund's highest
total return for a quarter was 16.09% (quarter ended December 31, 1998) and the
lowest total return for a quarter was -16.39% (quarter ended September 30,
1998).
AVERAGE ANNUAL TOTAL RETURNS
(for the periods ending December 31, 1998)
SINCE THE
INCEPTION DATE
PAST PAST OF THE FUND
YEAR 5 YEARS (JULY 6, 1992)
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The Yacktman Fund 0.64% 16.31% 11.96%
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S&P 500<F1> 28.58% 24.06% 21.04%
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THE YACKTMAN FOCUSED FUND
TOTAL RETURN PER CALENDAR YEAR
1998 4.58%
Note: During the one year period shown on the bar chart, the Fund's highest
total return for a quarter was 15.45% (quarter ended December 31, 1998) and the
lowest total return for a quarter was -16.28% (quarter ended September 30,
1998).
AVERAGE ANNUAL TOTAL RETURNS
(for the periods ending December 31, 1998)
SINCE THE
INCEPTION DATE
PAST OF THE FUND
YEAR (MAY 1, 1997)
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The Yacktman Focused Fund 4.58% 11.90%
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S&P 500<F1> 28.58% 31.28%
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<F1> The S&P 500 is a widely recognized unmanaged index of common stock prices.
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FEES AND EXPENSES
The table below describes the fees and expenses that you may pay if you buy
and hold shares of The Yacktman Funds.
<TABLE>
<CAPTION>
THE YACKTMAN THE YACKTMAN
FUND FOCUSED FUND
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<C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed
on Purchases (as a percentage of
offering price)......................... No Sales Charge No Sales Charge
Maximum Deferred Sales Charge (Load)...... No Deferred Sales Charge No Deferred Sales Charge
Maximum Sales Charge (Load) Imposed
on Reinvested Dividends and Distributions No Sales Charge No Sales Charge
Redemption Fee............................ None<F1> None<F1>
Exchange Fee.............................. None<F2> None<F2>
<F1>Our Transfer Agent charges a fee of $12.00 for each wire redemption.
<F2>Our Transfer Agent charges a fee of $5.00 for each telephone exchange.
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
Management Fees........................... 0.63% 1.00%
Distribution and/or Service (12b-1) Fees.. 0.00%<F1> 0.00%
Other Expenses............................ 0.47% 0.81%
Total Annual Fund Operating Expenses...... 1.10% 1.81%<F2>
</TABLE>
<F1> We have restated "Distribution and/or Service (12b-1) Fees" to reflect the
fact that The Yacktman Fund's 12b-1 Plan terminated November 24, 1998.
<F2> Since inception our Adviser has waived the advisory fee it receives from
The Yacktman Focused Fund to the extent necessary to ensure that its Total
Fund Operating Expenses do not exceed 1.25% of the Fund's average daily net
assets. Our Adviser may discontinue these waivers at any time, but will not
do so prior to December 31, 1999.
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EXAMPLE
This example is intended to help you compare the cost of investing in The
Yacktman Funds with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in a Fund for the time periods
indicated and then redeem all of your shares at the end of these periods. The
example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based
on these assumptions, your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
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The Yacktman Fund $112 $350 $606 $1,340
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The Yacktman
Focused Fund $184 $569 $980 $2,127
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INVESTMENT OBJECTIVE
AND STRATEGIES
Each of the Funds seeks long-term capital appreciation, and, to a lesser
extent, current income. Each Fund may change its investment objective without
obtaining shareholder approval. Please remember that an investment objective is
not a guarantee. An investment in The Yacktman Funds might not appreciate and
investors could lose money.
The Funds mainly invest in common stocks of United States companies, some,
but not all of which, pay dividends. However, each may, in response to adverse
market, economic, political or other conditions, take temporary defensive
positions. This means a Fund will invest some or all of its assets in money
market instruments (like U.S. Treasury Bills, commercial paper or repurchase
agreements). The Funds will not be able to achieve their investment objective of
capital appreciation to the extent that they invest in money market instruments
since these securities earn interest but do not appreciate in value. When a Fund
is not taking a temporary defensive position, it still will hold some cash and
money market instruments so that it can pay its expenses, satisfy redemption
requests or take advantage of investment opportunities.
Our investment adviser employs a disciplined investment strategy. We buy
growth companies at what we believe to be low prices. We think this conservative
approach combines the best features of "growth" and "value" investing. When we
purchase stocks we look for companies with the following three attributes:
GOOD BUSINESS
LOW PURCHASE PRICE
SHAREHOLDER-ORIENTED MANAGEMENT
GOOD BUSINESS
A good business may contain one or more of the following:
- - High market share in principal product and/or service lines;
- - A high cash return on tangible assets;
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- - Relatively low capital requirements allowing a business to generate cash while
growing;
- - Short customer repurchase cycles and long product cycles; and
- - Unique franchise characteristics.
SHAREHOLDER-ORIENTED MANAGEMENT
We believe a shareholder-oriented management does not overcompensate itself
and allocates wisely the cash the company generates. We look for companies that:
- - Reinvest in the business and still have excess cash;
- - Make synergistic acquisitions; and
- - Buy back stock.
LOW PURCHASE PRICE
- - We look for a stock that sells for less than what an investor would pay to
buy the whole company.
- - The stock prices of many companies vary by 50% or more from low to high each
year so we wait for buying opportunities.
We follow many more companies than we actually buy. Since our investment
adviser is a disciplined investor, we will increase our cash position if we
cannot find companies that meet our investment requirements.
Each of the Funds will hold fewer stocks
than the typical stock mutual fund. In fact, The Focused Fund usually holds
fewer than 20 stocks. We do this because we are KNOW SOMETHING investors. We
think it makes sense to invest more in our top choices than in investments we
think are less attractive.
We buy companies of any size market capitalization. If all else is equal, we
prefer larger companies to smaller companies.
We sell companies if they no longer meet our investment criteria, or if
there are better investment opportunities available.
The Focused Fund may purchase put options on specific stocks to hedge
against losses caused by declines in the prices of stocks in its portfolio. The
Focused Fund may also write put options on specific stocks to generate income,
but only if it is willing to purchase the stock at the exercise price.
Purchasing and writing put options are not principal investment strategies of
The Focused Fund.
We are patient investors. We do not attempt to achieve our investment
objectives by active and frequent trading of common stocks.
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MANAGEMENT OF THE FUNDS
YACKTMAN ASSET MANAGEMENT CO.
MANAGES THE FUNDS' INVESTMENTS
Yacktman Asset Management Co. (the "Adviser") is the investment adviser to
each of The Yacktman Funds. The Adviser's address is:
303 West Madison Street, Suite 1925
Chicago, Illinois 60606-3308
As the investment adviser to the Funds, the Adviser manages the investment
portfolio of each Fund. It makes the decisions as to which securities to buy and
which securities to sell. During the last fiscal year, each Fund paid the
Adviser an annual investment advisory fee equal to the following percentages of
average net assets:
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The Yacktman Fund 0.63%
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The Yacktman Focused Fund 1.00%
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The investment advisory fee paid by The Yacktman Fund ranges from 0.65% to 0.50%
depending on asset levels.
Donald A. Yacktman, as portfolio manager, is primarily responsible for the
day-to-day management of the portfolios of the Funds and has been so since their
inception. Mr. Yacktman has been President of the Adviser since its organization
in 1992. He was an officer and portfolio manager from April 1982 through March
11, 1992 with Selected Financial Services, Inc., and a portfolio manager from
1968 to 1982 with Stein Roe & Farnham, where he was also a partner from 1974 to
1982.
YEAR 2000
The Funds are addressing the "Year 2000" issue. The Year 2000 issue stems
from the use of a two-digit format to define the year in certain date-sensitive
computer application systems rather than the use of a four digit format. As a
result, date-sensitive software programs could recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in major systems or
process failures or the generation of erroneous data, which would lead to
disruptions in the Funds' business operations.
The Funds have no application systems of their own and are entirely
dependent on their service providers' systems and software. The Funds are
working with their service providers (including the Adviser, their
administrator, transfer agent and custodian) to identify and remedy any Year
2000 issues. However, the Funds cannot guarantee that all Year 2000 issues will
be identified and remedied, and the failure to successfully identify and remedy
all Year 2000 issues could result in an adverse impact on the Funds. The Year
2000 issue could also have a negative impact on the companies in which the Funds
invest, which could hurt the Funds' investment returns.
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THE FUNDS' SHARE PRICE
The price at which investors purchase shares of each Fund and at which
shareholders redeem shares of each Fund is called its net asset value. Each Fund
calculates its net asset value as of the close of regular trading on the New
York Stock Exchange (normally 4:00 p.m. Eastern Time) on each day the New York
Stock Exchange is open for trading. The New York Stock Exchange is closed on
holidays and weekends. Each Fund calculates its net asset value based on the
market prices of the securities (other than money market instruments) it holds.
Each Fund values most money market instruments it holds at their amortized cost.
Each Fund will process purchase orders that it receives and accepts and
redemption orders that it receives prior to the close of regular trading on a
day that the New York Stock Exchange is open at the net asset value determined
LATER THAT DAY. It will process purchase orders that it receives and accepts and
redemption orders that it receives AFTER the close of regular trading at the net
asset value determined at the close of regular trading on the NEXT DAY the New
York Stock Exchange is open.
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PURCHASING SHARES
HOW TO PURCHASE SHARES FROM THE FUNDS
1. Read this Prospectus carefully.
2. Determine how much you want to invest keeping in mind the following
minimums:
A. NEW ACCOUNTS
- Individual Retirement Accounts and other retirement plans $500
- Automatic Investment Plan $500
- All other accounts $2,500
B. EXISTING ACCOUNTS
- Dividend reinvestment No Minimum
- All Accounts $100
3. Complete the Purchase Application accompanying this Prospectus, carefully
following the instructions. For additional investments, complete the reorder
form attached to your Fund's confirmation statements (the Funds have
additional Purchase Applications and reorder forms if you need them). If you
have any questions, please call 1-800-457-6033.
4. Make your check payable to "The Yacktman Funds, Inc." All checks must be
drawn on U.S. banks. The Funds will not accept cash or third party checks.
FIRSTAR MUTUAL FUND SERVICES, LLC, THE FUNDS' TRANSFER AGENT, WILL CHARGE A
$25 FEE AGAINST A SHAREHOLDER'S ACCOUNT FOR ANY PAYMENT CHECK RETURNED FOR
INSUFFICIENT FUNDS. THE SHAREHOLDER WILL ALSO BE RESPONSIBLE FOR ANY LOSSES
SUFFERED BY A FUND AS A RESULT.
5. Send the application and check to:
BY FIRST CLASS MAIL
The Yacktman Funds, Inc.
Shareholder Services Center
P.O. Box 701
Milwaukee, WI 53201-0701
BY OVERNIGHT DELIVERY SERVICE OR
REGISTERED MAIL
The Yacktman Funds, Inc.
615 East Michigan Street
Milwaukee, WI 53202-5207
PLEASE DO NOT SEND LETTERS BY OVERNIGHT DELIVERY SERVICE OR REGISTERED MAIL
TO THE POST OFFICE BOX ADDRESS.
If you wish to open an account by wire, please call 1-800-457-6033 or 1-414-
765-4124 prior to wiring funds in order to obtain a confirmation number and to
ensure prompt and accurate handling of funds. YOU SHOULD WIRE FUNDS TO:
Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, WI 53202-5207
ABA #075000022
CREDIT:
Firstar Mutual Fund Services, LLC
Account #112-952-137
FURTHER CREDIT:
The Yacktman Funds, Inc.
(name of Fund to be purchased)
(shareholder registration)
(shareholder account number, if known)
You should then send a properly signed Purchase Application marked "FOLLOW-
UP" to either of the addresses listed above. PLEASE REMEMBER THAT FIRSTAR BANK
MILWAUKEE, N.A. MUST
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RECEIVE YOUR WIRED FUNDS PRIOR TO THE CLOSE OF REGULAR TRADING ON THE NEW YORK
STOCK EXCHANGE FOR YOU TO RECEIVE SAME DAY PRICING. THE FUNDS AND FIRSTAR BANK
MILWAUKEE, N.A. ARE NOT RESPONSIBLE FOR THE CONSEQUENCES OF DELAYS RESULTING
FROM THE BANKING OR FEDERAL RESERVE WIRE SYSTEM, OR FROM INCOMPLETE WIRING
INSTRUCTIONS.
PURCHASING SHARES FROM BROKER-DEALERS, FINANCIAL INSTITUTIONS AND OTHERS
Some broker-dealers may sell shares of The Yacktman Funds. These broker-
dealers may charge investors a fee either at the time of purchase or redemption.
The fee, if charged, is retained by the broker-dealer and not remitted to the
Funds or the Adviser.
The Funds may enter into agreements with broker-dealers, financial
institutions or other service providers ("Servicing Agents") that may include
the Funds as investment alternatives in the programs they offer or administer.
Servicing Agents may:
- - Become shareholders of record of the Funds. This means all requests to
purchase additional shares and all redemption requests must be sent through
the Servicing Agent. This also means that purchases made through Servicing
Agents are not subject to the Funds' minimum purchase requirements.
- - Use procedures and impose restrictions that may be in addition to, or
different from, those applicable to investors purchasing shares directly from
the Funds.
- - Charge fees to their customers for the services they provide them. Also, the
Funds and/or the Adviser may pay fees to Servicing Agents to compensate them
for the services they provide their customers.
- - Be allowed to purchase shares by telephone with payment to follow the next
day. If the telephone purchase is made prior to the close of regular trading
on the New York Stock Exchange, it will receive same day pricing.
- - Be authorized to accept purchase orders on behalf of the Funds. This means
that a Fund will process the purchase order at the net asset value which is
determined following the Servicing Agent's acceptance of the customer's
order.
If you decide to purchase shares through Servicing Agents, please carefully
review the program materials provided to you by the Servicing Agent. When you
purchase shares of the Funds through a Servicing Agent, it is the responsibility
of the Servicing Agent to place your order with the Fund on a timely basis. If
the Servicing Agent does not, or if it does not pay the purchase price to the
Funds within the period specified in its agreement with the Funds, it may be
held liable for any resulting fees or losses.
OTHER INFORMATION ABOUT PURCHASING SHARES OF THE FUNDS
The Funds may reject any purchase applications for any reason. The Funds
will not accept initial purchase orders made by telephone unless they are from a
Servicing Agent which has an agreement with the Fund.
The Funds will issue certificates evidencing shares purchased only upon
request. The Funds will send investors a written confirmation for all purchases
of shares.
The Funds offer an Automatic Investment Plan allowing shareholders to make
purchases on a regular and convenient basis. The Funds also offer a telephone
purchase option permitting shareholders to make additional purchases by
telephone.
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The Funds offer the following retirement plans:
- Traditional IRA
- Roth IRA
- SEP-IRA
- SIMPLE IRA
- 401(k) Plan
- 403 (b)(7) Custodial Accounts
Investors can obtain further information about the Automatic Investment
Plan, the telephone purchase plan and the retirement plans by calling the Funds
at 1-800-525-8258. The Funds recommend that investors consult with a competent
financial and tax adviser regarding the retirement plans before investing.
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REDEEMING SHARES
HOW TO REDEEM (SELL) SHARES BY MAIL
1. Prepare a letter of instruction containing:
- the name of the Fund(s)
- account number(s)
- the amount of money or number of shares being redeemed
- the name(s) on the account
- daytime phone number
- additional information that the Funds may require for redemptions by
corporations, executors, administrators, trustees, guardians, or others
who hold shares in a fiduciary or representative capacity. Please
contact the Funds' Transfer Agent, Firstar Mutual Fund Services, LLC, in
advance, at 1-800-457-6033 if you have any questions.
2. Sign the letter of instruction exactly as the shares are registered. Joint
ownership accounts must be signed by all owners.
3. If there are certificates representing your shares, endorse the certificates
or execute a stock power exactly as your shares are registered.
4. Have the signatures guaranteed by a commercial bank or trust company in the
United States, a member firm of the New York Stock Exchange
or other eligible guarantor institution in the
following situations:
- The redemption request exceeds $25,000.
- The redemption proceeds are to be sent to a person other than the person
in whose name the shares are registered.
- The redemption proceeds are to be sent to an address other than the
address of record.
- The Funds receive the redemption request within ten business days of an
address change.
A NOTARIZED SIGNATURE IS NOT AN ACCEPTABLE SUBSTITUTE FOR A SIGNATURE
GUARANTEE.
5. Send the letter of instruction and certificates, if any, to:
BY FIRST CLASS MAIL
The Yacktman Funds, Inc.
Shareholder Services Center
P. O. Box 701
Milwaukee, WI 53201-0701
BY OVERNIGHT DELIVERY SERVICE OR
REGISTERED MAIL
The Yacktman Funds, Inc.
Shareholder Services Center
615 East Michigan Street
Milwaukee, WI 53202-5207
PLEASE DO NOT SEND LETTERS OF INSTRUCTION BY OVERNIGHT DELIVERY SERVICE OR
REGISTERED MAILED TO THE POST OFFICE BOX ADDRESS.
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HOW TO REDEEM (SELL) SHARES BY TELEPHONE
- - Instruct Firstar Mutual Fund Services, LLC that you want the option of
redeeming shares by telephone. This can be done by completing the appropriate
section on the Purchase Application. If you have already opened an account,
you may write to Firstar Mutual Fund Services, LLC requesting this option.
When you do so, please sign the request exactly as your account is registered
and have the signatures guaranteed. Shares held in retirement plans and
shares represented by certificates cannot be redeemed by telephone.
- - Assemble the same information that you would include in the letter of
instruction for a written redemption request.
- - Call Firstar Mutual Fund Services, LLC at 1-800-457-6033. PLEASE DO NOT CALL
THE FUNDS OR THE ADVISER.
- - Telephone redemptions must be in amounts of $1,000 or more.
- - You may not make a telephone redemption within 10 business days of an address
change.
HOW TO REDEEM (SELL) SHARES THROUGH SERVICING AGENTS
If your shares are held by a Servicing Agent, you must redeem your shares
through the Servicing Agent. Contact the Servicing Agent for instructions on how
to do so.
REDEMPTION PRICE
The redemption price per share you receive for redemption requests is the
next determined net asset value after:
- - Firstar Mutual Fund Services, LLC receives your written request in proper
form with all required information; or
- - Firstar Mutual Fund Services, LLC receives your authorized telephone request
with all required information; or
- - A Servicing Agent that has been authorized to accept redemption requests on
behalf of the Funds receives your request in accordance with its procedures.
PAYMENT OF REDEMPTION PROCEEDS
- - For those shareholders who redeem shares by mail or by telephone, Firstar
Mutual Fund Services, LLC will mail a check in the amount of the redemption
proceeds no later than the seventh day after it receives the redemption
request in proper form with all required information.
- - For those shareholders who redeem by telephone, Firstar Mutual Fund Services,
LLC normally will transfer the redemption proceeds to your designated bank
account if you have elected to receive redemption proceeds by either
Electronic Funds Transfer or Wire. An Electronic Funds Transfer generally
takes up to three business days to reach the shareholder's account whereas
Firstar Mutual Fund Services, LLC generally wires redemption proceeds on the
business day following the calculation of the redemption price. However, the
Funds may direct Firstar Mutual Fund Services, LLC to pay the proceeds of a
telephone redemption on a date no later than the seventh day after the
redemption request.
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- - For those shareholders who redeem shares through Servicing Agents, the
Servicing Agent will transmit the redemption proceeds in accordance with its
redemption procedures.
OTHER REDEMPTION CONSIDERATIONS
When redeeming shares of the Funds, shareholders should consider the
following:
- - The redemption may result in a taxable gain.
- - Shareholders who redeem shares held in an IRA must indicate on their
redemption request whether or not to withhold federal income taxes. If not,
these redemptions, as well as redemptions of other retirement plans not
involving a direct rollover to an eligible plan, will be subject to federal
income tax withholding.
- - The Funds may delay the payment of redemption proceeds for up to seven days
in all cases.
- - If you purchased shares by check, the Funds may delay the payment of
redemption proceeds until they are reasonably satisfied the check has cleared
(which may take up to 15 days from the date of purchase).
- - Firstar Mutual Fund Services, LLC will send the proceeds of telephone
redemptions to an address or account other than that shown on its records
only if the shareholder has sent in a written request with signatures
guaranteed.
- - The Funds reserve the right to refuse a telephone redemption request if they
believe it is advisable to do so. The Funds and Firstar Mutual Fund Services,
LLC may modify or terminate their procedures for telephone redemptions at any
time. Neither the Funds nor Firstar Mutual Fund Services, LLC will be liable
for following instructions for telephone redemption transactions that they
reasonably believe to be genuine, provided they use reasonable procedures to
confirm the genuineness of the telephone instructions. They may be liable for
unauthorized transactions if they fail to follow such procedures. These
procedures include requiring some form of personal identification prior to
acting upon the telephone instructions and recording all telephone calls.
During periods of substantial economic or market change, you may find
telephone redemptions difficult to implement. If a shareholder cannot contact
Firstar Mutual Fund Services, LLC by telephone, he or she should make a
redemption request in writing in the manner described earlier.
- - Firstar Mutual Fund Services, LLC currently charges $12 for each wire
redemption but does not charge a fee for Electronic Funds Transfers.
- - If your account balance falls below $1,000 because you redeem shares, you
will be given 60 days to make additional investments so that your account
balance is $1,000 or more. If you do not, the Funds may close your account
and mail the redemption proceeds to you.
- - The Funds may pay redemption requests "in kind." This means that the Funds
may pay redemption requests entirely or partially with securities rather than
with cash.
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EXCHANGING SHARES
ELIGIBLE FUNDS
Shares of The Yacktman Funds may be exchanged for shares of:
- The Yacktman Fund
- The Yacktman Focused Fund
- Or the following Firstar Money Market Funds:
- Firstar Money Market Fund
- Firstar U.S. Government Money Market Fund
- Firstar Tax-Exempt Money Market Fund
at their relative net asset values. (An affiliate of Firstar Mutual Fund
Services, LLC advises the Firstar Money Market Funds. Please call 1-800-457-6033
for a prospectus describing the Firstar Money Market Funds.) You may have a
taxable gain or loss as a result of an exchange because the Internal Revenue
Code treats an exchange as a sale of shares.
HOW TO EXCHANGE SHARES
- - Read this Prospectus and, if applicable, the prospectus for the Firstar Money
Market Funds.
- - Determine the number of shares you want to exchange keeping in mind that
exchanges are subject to a $1,000 minimum.
- - Call Firstar Mutual Fund Services, LLC at 1-800-457-6033. You may also make
an exchange by writing to The Yacktman Funds, Inc., Shareholder Services
Center, P. O. Box 701, Milwaukee, Wisconsin 53201-0701. Firstar Mutual Fund
Services, LLC charges a fee of $5.00 for each telephone exchange. There is no
charge for a written exchange.
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DIVIDENDS, DISTRIBUTIONS
AND TAXES
Each Fund distributes substantially all of its net investment income
quarterly and substantially all of its capital gains annually. You have two
distribution options:
- AUTOMATIC REINVESTMENT OPTION - Both dividend and capital gains
distributions will be reinvested in additional Fund shares.
- ALL CASH OPTION - Both dividend and capital gains distributions will be
paid in cash.
You may make this election on the Purchase Application. You may change your
election by writing to Firstar Mutual Fund Services, LLC or by calling 1-800-
457-6033.
Each Fund's distributions, whether received in cash or additional shares of
the Fund, may be subject to federal and state income tax. These distributions
may be taxed as ordinary income and capital gains (which may be taxed at
different rates depending on the length of time the Fund holds the assets
generating the capital gains). In managing the Funds, our Adviser considers the
tax effects of its investment decisions to be of secondary importance.
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<PAGE>
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FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand a Fund's
financial performance for the past five years of The Yacktman Fund's operations
and for the period of The Yacktman Focused Fund's operations. Certain
information reflects financial results for a single Fund share. The total
returns in the tables represent the rate that an investor would have earned on
an investment in a Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with the Funds' financial statements, are included in the
Annual Report which is available upon request.
<TABLE>
<CAPTION>
THE YACKTMAN FUND
FOR THE YEARS ENDED DECEMBER 31,
1998 1997 1996 1995 1994
- ------------------------------------------------ ------------ ------------ ------------ ------------ ------------
<C> <C> <C> <C> <C> <C>
Net asset value, beginning of period........... $ 14.05 $ 13.34 $ 12.09 $ 10.05 $ 9.56
Income from investment operations:
Net investment income ...................... 0.11 0.22 0.24 0.22 0.22
Net realized and unrealized gain (loss)
on investments........................... (0.04) 2.21 2.90 2.81 0.61
---------- ---------- ---------- ---------- ----------
Total from investment operations............ 0.07 2.43 3.14 3.03 0.83
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income........ (0.11) (0.22) (0.24) (0.22) (0.22)
Distributions from net realized gains....... (2.40) (1.50) (1.65) (0.77) (0.12)
---------- ---------- ---------- ---------- ----------
Total distributions......................... (2.51) (1.72) (1.89) (0.99) (0.34)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period................. $ 11.61 $ 14.05 $ 13.34 $ 12.09 $ 10.05
========== ========== ========== ========== ==========
Total return................................... 0.64% 18.28% 26.02% 30.42% 8.80%
========== ========== ========== ========== ==========
Supplemental data and ratios:
Net assets, end of period (000s)............ $307,430 $1,082,139 $755,617 $566,723 $295,133
========== ========== ========== ========== ==========
Ratio of expenses before expense
reductions to average net assets<F1>..... 1.16% 0.90% 0.96% 0.99% 1.07%
========== ========== ========== ========== ==========
Ratio of net expenses to average net assets. 1.14% 0.86% 0.90% 0.91% 1.07%
========== ========== ========== ========== ==========
Ratio of net investment income to average
net assets............................... 0.87% 1.54% 1.80% 2.02% 2.49%
========== ========== ========== ========== ==========
Portfolio turnover rate..................... 14.32% 69.13% 58.54% 55.37% 49.44%
========== ========== ========== ========== ==========
</TABLE>
<F1> The Adviser has directed certain portfolio trades of The Yacktman Fund to
brokers at best price and execution and has generated directed brokerage
credits to be used against sub-transfer agency fees. Shareholders benefited
under this arrangement as the net expenses of The Yacktman Fund do not
include such sub-transfer agency fees.
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<PAGE>
THE YACKTMAN FOCUSED FUND
YEAR MAY 1, 1997<F1>
ENDED THROUGH
DEC. 31, 1998 DEC. 31, 1997
- --------------------------------------------------------------------------------
Net asset value, beginning of period.............. $ 11.21 $ 10.00
---------- ----------
Income from investment operations:
Net investment income ......................... 0.05 0.07
Net realized and unrealized gain on investments 0.46 1.47
---------- ----------
Total from investment operations............... 0.51 1.54
---------- ----------
Less distributions:
Dividends from net investment income........... (0.05) (0.07)
Distributions from net realized gains.......... (0.05) (0.26)
---------- ----------
Total distributions............................ (0.10) (0.33)
---------- ----------
Net asset value, end of period ................... $ 11.62 $ 11.21
========== ==========
Total return...................................... 4.58% 15.38%<F2>
========== ==========
Supplemental data and ratios:
Net assets, end of period (000s)............... $27,407 $58,446
========== ==========
Ratio of net expenses to average net assets.... 1.25%<F4> 1.25%<F3><F4>
========== ==========
Ratio of net investment income to
average net assets ............................ 0.48%<F4> 1.02%<F3><F4>
========== ==========
Portfolio turnover rate........................ 49.26% 60.43%
========== ==========
<F1> Commencement of operations.
<F2> Not annualized.
<F3> Annualized.
<F4> Net of reimbursements. Without fee waivers, the ratio of expenses to
average net assets would have been 1.81% and 1.71% and the ratio of net
investment income to average net assets would have been (0.08)% and 0.56%
for the periods ended December 31, 1998 and 1997, respectively.
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<PAGE>
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TO LEARN MORE
ABOUT THE FUNDS
To learn more about The Yacktman Funds you may want to read The Yacktman
Funds' Statement of Additional Information ("SAI") which contains additional
information about the Funds. The Yacktman Funds have incorporated by reference
the SAI into the Prospectus. This means that you should consider the contents of
the SAI to be part of the Prospectus.
You may also learn more about The Yacktman Funds' investments by reading The
Yacktman Funds' Annual and Semi-Annual Reports to shareholders. The Annual
Report includes a discussion of the market conditions and investment strategies
that significantly affected the performance of the Funds during their last
fiscal year.
The SAI and the Annual and Semi-Annual Reports are all available to
shareholders and prospective investors without charge, simply by calling 1-800-
525-8258.
Prospective investors and shareholders who have questions about The Yacktman
Funds may also call the above number or write to the following address:
The Yacktman Funds, Inc.
303 West Madison Street, Suite 1925
Chicago, IL 60606-3308
The general public can review and copy information about The Yacktman Funds
(including the SAI) at the Securities and Exchange Commission's Public Reference
Room in Washington, D.C. (Please call 1-800-SEC-0330 for information on the
operations of the Public Reference Room.) Reports and other information about
The Yacktman Funds are also available at the Securities and Exchange
Commission's Internet site at http://www.sec.gov and copies of this information
may be obtained, upon payment of a duplicating fee, by writing to:
Public Reference Section
Securities and Exchange Commission
Washington, D.C. 20549-6009
Please refer to The Yacktman Funds' Investment Company Act File No. 811-
6628, when seeking information about The Yacktman Funds from the Securities and
Exchange Commission.
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<PAGE>
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<PAGE>
FOR FUND INFORMATION,
CALL 1-800-525-8258
FOR SHAREHOLDER SERVICES,
CALL 1-800-457-6033
WEB SITE: WWW.YACKTMAN.COM
THE YACKTMAN FUNDS, INC.
Shareholder Services Center
615 East Michigan Street, 3rd Floor
Milwaukee, Wisconsin 53202
YA-402-0499
