<PAGE>
Nicholas-Applegate Mutual Funds
Supplement to Prospectuses
Portfolios A, B and C dated July 16, 1997
Advisory Portfolios dated July 21, 1997
Global Institutional Portfolios dated July 22, 1997
U.S. Institutional Portfolios dated July 22, 1997
Fixed Income Institutional Portfolios dated July 22, 1997
December 8, 1997
The Board of Trustees of the Trust has approved the calling of a special meeting
of shareholders to consider reorganization of the Trust from its current
"master-feeder" structure to a "multi-class" structure. As a result of the
proposed reorganization, the Trust would manage its assets directly rather than
through Nicholas-Applegate Investment Trust, and each shareholder of an A, B, C,
Qualified or Institutional Portfolio would receive Class A, B, C, Q or I shares
of a corresponding portfolio of the Trust. The proposed reorganization would
not affect the net asset value of the shares held by any shareholder; the
investment objectives, policies or risks of any Portfolio; or the basic
arrangements for management of the Trust. Legal counsel has advised the Trust
that under the Internal Revenue Code the proposed reorganization would not
result in taxable income to the Portfolios or their shareholders. Management
believes that the proposed reorganization would result in substantial cost
savings to the Trust.
At the same time, shareholders of the Government Income Portfolios of the
Trust will be asked to consider reorganization of those Portfolios into the
Fully Discretionary Fixed Income Fund portfolio of the Trust. Management
believes that at their current sizes, the Government Income Portfolios are too
small to operate in a cost effective manner, and that the reorganization would
permit their shareholders to continue to meet their primary goal of current
income from a portfolio comprised principally of high quality fixed income
securities.
Further details will be set forth in a proxy statement to be mailed in
early January, 1998 to all shareholders as of the record date for the meeting
(currently scheduled for December 19, 1997). Copies of the proxy statement can
be obtained by other shareholders by calling 1-800-551-8045.
