MASTERWORKS(R) FUNDS INC.
Supplement dated October 21, 1996
Prospectus dated June 28, 1996
Asset Allocation, Bond Index, Growth Stock, S&P 500 Stock,
Short-Intermediate Term and U.S. Treasury Allocation Funds
The above-identified Prospectus is hereby supplemented by adding the
following:
CO-ADMINISTRATORS
The Company's Board of Directors has adopted a new
administrative services arrangement which supersedes the current
arrangement with Stephens as the sole administrator of the Funds. The
new administrative services arrangement will not increase the level of
fees payable by each Fund. Under the new arrangement, Barclays Global
Investors, N.A. ("BGI") and Stephens have agreed jointly to provide the
Funds the general administrative services currently provided by
Stephens alone and to provide certain other services to the Funds, such
as managing and coordinating third-party service relationships. Under
the new arrangement, BGI and Stephens are entitled to receive for these
services a combined fee (expressed as a percentage of average daily net
assets) from each Fund as follows: 0.40% for the Asset Allocation and
U.S. Treasury Allocation Funds; 0.18% for the Growth Stock and
Short-Intermediate Term Funds; and 0.15% for the Bond Index and S&P 500
Stock Funds. This fee is an "all-in" or "semi-unified" fee and BGI and
Stephens, in consideration thereof, have agreed to bear all of the
Funds' ordinary operating expenses, excluding, generally, advisory fees
and costs related to securities transactions. BGI and Stephens may
delegate certain of their administrative duties to sub-administrators.
CUSTODIAN
The Company's Board of Directors has adopted new custody
agreements pursuant to which IBT has replaced BGI as custodian to each
Fund and its corresponding Master Portfolio. IBT will not be entitled
to receive fees for its custodial services so long as it is entitled to
receive a separate fee from BGI for its services as Sub-Administrator
of the Funds.
CHANGE OF NAME
The Funds' former Custodian and new Co-Administrator has
changed its name from BZW Barclays Global Investors, N.A. to "Barclays
Global Investors, N.A." In addition, the Investment Adviser to the
corresponding Master Portfolios of the Company's Funds has changed its
name from BZW Barclays Global Fund Advisors to "Barclays Global Fund
Advisors."
<PAGE>
The Summary of Expenses tables are hereby replaced with the following:
SUMMARY OF EXPENSES
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Asset
Allocation Bond Index Growth Stock
Fund Fund Fund
Management Fees (After Waivers and
Reimbursements)1..........................0.35%...........0.08%.........0.58%
Co-Administration Fees....................0.40%...........0.15%.........0.18%
TOTAL FUND OPERATING EXPENSES
(After Waivers and Reimbursements)2.......0.75%...........0.23%.........0.76%
Short- U.S.
S&P 500 Intermediate Government
Stock Term Allocation
Fund Fund Fund
Management Fees ........................0.05%..........0.45%..........0.30%
Co-Administration Fees...................0.15%..........0.18%..........0.40%
TOTAL FUND OPERATING EXPENSES ...........0.20%..........0.63%..........0.70%
</TABLE>
1 Before waivers and reimbursements Management Fees would be 0.60% for the
Growth Stock Fund.
2 Before waivers and reimbursements Total Fund Operating Expenses
would be 0.78% for the Growth Stock Fund.
<PAGE>
MASTERWORKS(R) FUNDS INC.
Supplement dated October 21, 1996
to Prospectuses dated June 28, 1996
Money Market Fund
The Fund's Prospectus is hereby supplemented by adding the following:
CO-ADMINISTRATORS
The Company's Board of Directors has adopted a new
administrative services arrangement which supersedes the current
arrangement with Stephens as the sole administrator of the Fund. The
new administrative services arrangement will not increase the level of
fees payable by the Fund. Under the new arrangement, Barclays Global
Investors, N.A. ("BGI") and Stephens have agreed jointly to provide the
Fund the general administrative services currently provided by Stephens
alone and to provide certain other services to the Fund, such as
managing and coordinating third-party service relationships. Under the
new arrangement, BGI and Stephens are entitled to receive for these
services a combined fee of 0.10% of the Fund's average daily net
assets. This fee is an "all-in" or "semi-unified" fee and BGI and
Stephens, in consideration thereof, have agreed to bear all of the
Fund's ordinary operating expenses, excluding, generally, advisory fees
and costs related to securities transactions. BGI and Stephens may
delegate certain of their administrative duties to sub-administrators
CUSTODIAN
The Company's Board of Directors has adopted new custody
agreements pursuant to which IBT has replaced BGI as the Fund's
custodian. IBT will not be entitled to receive fees for its custodial
services so long as it is entitled to receive a separate fee from BGI
for its services as the Fund's custodian.
CHANGE OF NAME
The Fund's former Custodian and new Co-Administrator has
changed its name from BZW Barclays Global Investors, N.A. to "Barclays
Global Investors, N.A." In addition, the Investment Adviser to the Fund
has changed its name from BZW Barclays Global Fund Advisors to
"Barclays Global Fund Advisors."
The Summary of Expenses table is hereby replaced with the following:
SUMMARY OF EXPENSES
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Money Market Fund
Management Fee...................................................0.35%
Co-Administration Fee............................................0.10%
TOTAL FUND OPERATING EXPENSES....................................0.45%
</TABLE>
<PAGE>
MASTERWORKS(R) FUNDS INC.
Supplement dated October 21, 1996
Prospectuses dated June 28, 1996
LifePath 2000, LifePath 2010, LifePath 2020,
LifePath 2030, and LifePath 2040 Funds
The above-identified Prospectus is hereby supplemented by adding the
following:
CO-ADMINISTRATORS
The Company's Board of Directors has adopted a new
administrative services arrangement which supersedes the current
arrangement with Stephens as the sole administrator of the Funds. The
new administrative services arrangement will not increase the level of
fees payable by each Fund. Under the new arrangement, Barclays Global
Investors, N.A. ("BGI") and Stephens have agreed jointly to provide the
Funds the general administrative services currently provided by
Stephens alone and to provide certain other services to the Funds, such
as managing and coordinating third-party service relationships. Under
the new arrangement, BGI and Stephens are entitled to receive for these
administrative services a combined fee (expressed as a percentage of
average daily net assets) of 0.40% from each Fund. This fee is an
"all-in" or "semi-unified" fee and BGI and Stephens, in consideration
thereof, have agreed to bear all of the Funds' ordinary operating
expenses, excluding, generally, advisory fees and costs related to
securities transactions. BGI and Stephens may delegate certain of their
administrative duties to sub-administrators.
CUSTODIAN
The Company's Board of Directors has adopted new custody
agreements pursuant to which IBT has replaced BGI as custodian to each
Fund and its corresponding Master Portfolio. IBT will not be entitled
to receive fees for its custodial services so long as it is entitled to
receive a separate fee from BGI for its services as Sub-Administrator
of the Funds.
CHANGE OF NAME
The Funds' former Custodian and new Co-Administrator has
changed its name from BZW Barclays Global Investors, N.A. to "Barclays
Global Investors, N.A." In addition, the Investment Adviser to the
corresponding Master Portfolios of the Company's Funds has changed its
name from BZW Barclays Global Fund Advisors to "Barclays Global Fund
Advisors."
The Summary of Expenses is hereby replaced with the following:
SUMMARY OF EXPENSES
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
LifePath LifePath LifePath LifePath LifePath
2000 2010 2020 2030 2040
Fund Fund Fund Fund Fund
Management Fees ....................0.55%.......0.55%......0.55%.......0.55%......0.55%
Co-Administration Fees..............0.40%.......0.40%......0.40%.......0.40%......0.40%
TOTAL FUND OPERATING EXPENSES.......0.95%.......0.95%......0.95%.......0.95%......0.95%
</TABLE>
