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[PACIFIC ADVISORS FUND INC. LETTERHEAD]
January 16, 2001
Dear Shareholder,
Enclosed please find a Proxy Statement for shareholders of the Balanced Fund
and Income and Equity Fund dated January 16, 2001. As the Proxy statement
indicates, Stephen K. Bache, CFA, has left his position as Chief Investment
Officer of Hamilton & Bache, Inc. to form his own firm, Bache Capital
Management, Inc. Subsequently, Hamilton & Bache, Inc. has resigned as
Sub-Adviser of the Balanced Fund and Co-Manager of the Income and Equity Fund.
The Proxy Statement describes actions taken by the Board of Directors to
replace Hamilton & Bache, Inc. with Bache Capital Management, Inc. as interim
Sub-Adviser of the Balanced Fund and interim Co-Manager of the Income and
Equity Fund. The Board's action was taken to provide continuity of management
by allowing Mr. Bache to continue in his role as manager of the Balanced Fund
and co-manager of the Income and Equity Fund.
A Special Meeting for Shareholders of the Balanced Fund and Income and Equity
Fund has been set for February 28, 2001, so that shareholders may vote to
approve or disapprove of Bache Capital Management, Inc. as Sub-Adviser of the
Balanced Fund and Co-Manager of the Income and Equity Fund. Please read the
Proxy materials carefully, and, if voting by proxy, return your ballot in the
enclosed envelope by February 28, 2001.
Sincerely,
/s/ George A. Henning
George A. Henning
Chairman
Enc.
