<PAGE> 1
ARK FUNDS -- EQUITY INDEX PORTFOLIO
- --------------------------------------------------------------------------------
SUPPLEMENT DATED SEPTEMBER 21, 1998 CLASS A AND CLASS B PROSPECTUS DATED JULY
27, 1998
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This supplement revises information contained in the Prospectus and should
be retained and read in conjunction with such Prospectus.
Effective October 1, 1998, the information for the Equity Index Portfolio
under "Fees and Expenses" is amended as follows:
<TABLE>
<CAPTION>
CLASS A
---------
EQUITY
INDEX
SHAREHOLDER TRANSACTION EXPENSES PORTFOLIO
- -----------------------------------------------------------------------
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of
offering price)........................................... 4.75%*
Exchange Fee................................................ None
Redemption Fee.............................................. None
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
Advisory Fees (after waiver)(1)............................. 0.05%
12b-1 Fees (after waiver)(2)................................ 0.25%
Shareholder Services Fees (after waivers)(3)................ 0.00%
Other Expenses(after waivers)(4)............................ 0.20%
- -----------------------------------------------------------------------
Total Operating Expenses (after waivers)(5)................. 0.50%
- -----------------------------------------------------------------------
</TABLE>
* A portion of the 4.75% sales load is currently being waived so that share
purchases will be subject to a maximum sales load of 3.00%. This waiver may
be discontinued at any time.
(1) AIA has agreed to waive, on a voluntary basis, a portion of its fees for the
portfolio and the advisory fees shown reflect this voluntary waiver. AIA
reserves the right to terminate its fee waiver at any time in its sole
discretion. Absent such waiver, the advisory fees for the Equity Index
Portfolio would be 0.20%.
(2) The Distributor has agreed to waive, on a voluntary basis, a portion of its
distribution fees for the portfolio. Absent such waiver, the distribution
fees would be 0.40% for the Equity Index Portfolio.
(3) All of the shareholder service fees are being waived for the portfolio.
Absent such waiver, the shareholder services fees would be 0.15%.
(4) Other expenses are estimated based on amounts incurred during the previous
fiscal year and include all expenses except nonrecurring account fees,
brokerage commissions and other capital items, and advisory, 12b-1 and
shareholder services fees. The Administrator has agreed to waive, on a
voluntary basis, 0.08% of its fee for the Equity Index Portfolio. Absent
such waiver, other expenses for the Equity Index Portfolio would be 0.28%.
(5) Absent the voluntary fee waivers described above, total operating expenses
for Class A shares of the Equity Index Portfolio would be 1.03%.
EXAMPLE
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An investor in Class A shares would pay the following expenses on a $1,000
investment assuming (1) 5% annual return, (2) redemption at the end of each time
period and (3) imposition of a 4.75% sales charge:
<TABLE>
<CAPTION>
1 YR 3 YRS 5 YRS 10 YRS
---- ----- ----- ------
<S> <C> <C> <C> <C>
Equity Index Portfolio...................................... 52 63 74 107
</TABLE>
The example assumes that all dividends and distributions are reinvested and that
the amounts listed under "Total Operating Expenses" remain the same in the years
shown. The example should not be considered a representation of past or future
expenses and actual expenses may be greater or less than shown.
AK1111-9/98
<PAGE> 2
ARK FUNDS -- EQUITY INDEX PORTFOLIO
- --------------------------------------------------------------------------------
SUPPLEMENT DATED SEPTEMBER 21, 1998 TO INSTITUTIONAL CLASS PROSPECTUS DATED JULY
27, 1998
- --------------------------------------------------------------------------------
This supplement revises information contained in the Prospectus and should
be retained and read in conjunction with such Prospectus.
Effective October 1, 1998, the information for the Equity Index Portfolio
under "Fees and Expenses" is amended as follows:
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS
-------------------
EQUITY
INDEX
PORTFOLIO
-------------------
<S> <C>
Advisory Fees (after waiver)(1)............................. 0.05%
Shareholder Services Fees (after waiver)(2)................. 0.00%
Other Expenses (after waiver)(3)............................ 0.20%
-----
Total Operating Expenses (after waivers)(4)................. 0.25%
=====
</TABLE>
(1) AIA has agreed to waive, on a voluntary basis, a portion of its fees for the
Equity Index Portfolio and the advisory fees shown reflect this voluntary
waiver. AIA reserves the right to terminate its fee waiver at any time in
its sole discretion. Absent such waiver, the advisory fees for the Equity
Index Portfolio would be 0.20%.
(2) All of the shareholder services fees are being waived for the portfolio.
Absent such waiver, the shareholder services fees would be 0.15%.
(3) Other expenses are estimated based on amounts incurred during the previous
fiscal year and include all expenses except nonrecurring account fees,
brokerage commissions and other capital items, and advisory and shareholder
services fees. The Fund's administrator has agreed to waive, on a voluntary
basis, 0.08% of its fee for the Equity Index Portfolio. Absent such waiver,
other expenses for the Equity Index Portfolio would be 0.28%.
(4) Absent the voluntary fee waivers described above, total operating expenses
for Institutional Class shares of the Equity Index Portfolio would be 0.63%.
EXAMPLE
- --------------------------------------------------------------------------------
An investor in Institutional Class shares would pay the following expenses
on a $1,000 investment assuming (1) 5% annual return and (2) redemption at the
end of each time period:
<TABLE>
<CAPTION>
1 YR 3 YRS 5 YRS 10 YRS
---- ----- ----- ------
<S> <C> <C> <C> <C>
Equity Index Portfolio...................................... 3 8 14 32
</TABLE>
The example assumes that all dividends and distributions are reinvested and that
the amounts listed under "Total Operating Expenses" remain the same in the years
shown. The example should not be considered a representation of past or future
expenses and actual expenses may be greater or less than shown.
AK2222-9/98
