NICHOLAS APPLEGATE MUTUAL FUNDS, 497, 1998-11-04

NICHOLAS APPLEGATE MUTUAL FUNDS
497, 1998-11-04

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<PAGE>
N I C H O L A S-A P P L E G A T E-Registered
Trademark-
M U T U A L F U N D S P R O S P E C T U S

[PHOTO]

LARGE CAP VALUE FUND
INSTITUTIONAL SHARES

<PAGE>
1

NICHOLAS APPLEGATE-Registered Trademark-
MUTUAL FUNDS

PROSPECTUS

The prospectus contains vital information about the Class I Shares
of this Fund. For your own benefit and protection, please read it
before you invest, and keep it on hand for future reference.

Please note that these Shares

/ / are not bank deposits

/ / are not federally insured

/ / are not endorsed by any bank or government agency

/ / are not guaranteed to achieve their investment objectives

LIKE ALL MUTUAL FUND SHARES, THESE SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

LARGE CAP VALUE FUND

OCTOBER 30, 1998

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2
TABLE OF CONTENTS

<TABLE>
<S> <C> <C>
OVERVIEW 3
A LOOK AT THE FUND'S GOALS, LARGE CAP VALUE FUND
STRATEGIES, RISKS, AND FINAN-
CIAL HISTORY. 4

POLICIES AND INSTRUCTIONS SIMPLIFIED ACCOUNT
FOR OPENING, MAINTAINING INFORMATION
AND CLOSING AN ACCOUNT IN
THE FUND.
6
Opening an Account
6
Buying Shares
7
Selling and Redeeming Shares
8
Signature Guarantees
8
Exchanging Shares

YOUR ACCOUNT
9
Transaction Policies
9
Features and Account Policies

ORGANIZATION AND
MANAGEMENT
11
Investment Adviser Compensation
11
Administrator Compensation
11
Distributor
11
Portfolio Trades
11
Investment Objective
11
Diversification
12
Portfolio Team

DETAILS THAT APPLY TO THE FUND. RISK FACTORS AND 13
SPECIAL CONSIDERATIONS
</TABLE>

<PAGE>
3

OVERVIEW

FUND INFORMATION

A CONCISE DESCRIPTION OF THE LARGE CAP VALUE FUND BEGINS ON THE NEXT PAGE. THE
DESCRIPTION PROVIDES THE FOLLOWING INFORMATION:

[GRAPHIC]
INVESTMENT OBJECTIVE
The Fund's particular investment goal.

[GRAPHIC]
INVESTMENT STRATEGY
The strategy the Fund intends to use in pursuing the investment objective.

[GRAPHIC]
PRINCIPAL INVESTMENTS
The primary types of securities in which the Fund invests. Secondary investments
are described in "Risk Factors and Special Considerations" at the end of the
prospectus.

[GRAPHIC]
PORTFOLIO MANAGEMENT
The individuals who manage the Fund.

[GRAPHIC]
RISK FACTORS
The major risk factors associated with the Fund. Other risk factors are also
described in "Risk Factors and Special Considerations."

[GRAPHIC]
INVESTOR EXPENSES
The overall costs borne by an investor in the Class I Shares, including sales
charges and annual expenses.

GOAL OF THE NICHOLAS-APPLEGATE MUTUAL FUNDS

The Nicholas-Applegate Mutual Funds (the "Trust") are designed to provide
investors with a well-rounded investment program by offering investors various
portfolios each with different investment objectives and policies (each a
"Fund"). The Class I Shares of each Fund represent interests in an open-end
diversified open-end management investment company (a mutual fund).

Each Fund employs its own strategy and has its own risk/reward profile. Because
you could lose money by investing in a Fund, be sure to read all risk
disclosures carefully before investing.

WHO MAY WANT TO INVEST IN THE FUND
/ / those who are investing for retirement or other long term goals

/ / those who want higher potential for gain and are willing to accept higher
risks associated with investing in stocks of U.S. companies

/ / those who want a high level of liquidity
/ / those who want professional portfolio management

WHO MAY NOT WANT TO INVEST IN THE FUND
/ / those who are investing with a shorter time frame
/ / those who are uncomfortable with an investment that will go up and down in
value

THE INVESTMENT ADVISER

Nicholas-Applegate Capital Management (the "Investment Adviser") serves as
investment adviser to the Trust. Arthur E. Nicholas and 22 other partners with a
staff of approximately 480 employees currently manage over $27 billion of
discretionary assets for numerous clients, including employee benefit plans of
corporations, public retirement systems and unions, university endowments,
foundations, and other institutional investors and individuals.

<PAGE>
4

LARGE CAP VALUE FUND

INVESTMENT OBJECTIVE

Long-term capital appreciation.

INVESTMENT STRATEGY

The Fund's Investment Adviser employs a disciplined, "bottom-up" approach that
evaluates stocks on an individual basis and focuses on company fundamentals.
Using predominantly traditional fundamental research, it uncovers stocks that
meet three investment criteria: attractive valuations, below average risk, and
prospects for business improvement.

The Fund emphasizes equity securities of undervalued, large U.S. companies with
market capitalizations generally above $5 billion.

PRINCIPAL INVESTMENTS

Under normal conditions, the Fund invests at least 80% of its total assets in
equity securities of U.S. companies with large capitalizations. Generally, large
capitalization stocks are those with market capitalizations greater than $3
billion. It invests the remainder primarily in preferred and convertible
securities, debt securities of any maturity which are rated investment grade by
a nationally recognized statistical rating agency, or of comparable quality if
unrated, and securities issued by the U.S. Government and its agencies and
instrumentalities. The Fund may also use options and futures contracts as
hedging techniques.

PORTFOLIO MANAGEMENT

The Investment Adviser emphasizes a team approach to portfolio management to
maximize its overall effectiveness. For a complete list of the portfolio team,
see "Portfolio Teams" on page 12.

RISK FACTORS

As with any equity fund, the value of the Fund's investments varies from day to
day in response to the activities of individual companies and general market and
economic conditions. To the extent that the Fund is overweighted in certain
market sectors, the Fund may be more volatile. For further explanation, see
"Risk Factors and Special Considerations" starting on page 13.

INVESTOR EXPENSES - CLASS I SHARES

Investors pay various expenses, either directly or indirectly. Actual expenses
may be more or less than those shown. The figures below show the expected
expenses for the Fund for its first year of operation. Actual expenses may be
more or less than those shown.

<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES:
<S> <C>
Maximum sales charge on purchases None
- ---------------------------------------------------------
Sales charge on reinvested dividends None
- ---------------------------------------------------------
Deferred sales charge None
- ---------------------------------------------------------
Redemption fee None
- ---------------------------------------------------------
Exchange fee None
ANNUAL FUND OPERATING EXPENSES
AS A PERCENTAGE OF AVERAGE NET ASSETS:
Management fees(1) 0.75%
- ---------------------------------------------------------
12b-1 expenses None
- ---------------------------------------------------------
Other expenses (after expense deferral)(1) 0.25%
- ---------------------------------------------------------
Total operating expenses (after expense
deferral)(1) 1.00%
</TABLE>

1. The Investment Adviser has agreed to waive or defer its management fees and
to pay other operating expenses (excluding interest, taxes, brokerage
commissions and other portfolio transaction expenses, capital expenditures
and extraordinary expenses) otherwise payable by the Fund, subject to
possible later reimbursement during a five year period. Management fees,
total operating expenses and other expenses are expected to be 0.75%, 2.46%
and 1.71% absent the deferral. See "Investment Adviser Compensation."

<PAGE>
5

EXAMPLE:

THE TABLE SHOWS WHAT YOU WOULD PAY IF YOU INVESTED $1,000 OVER THE VARIOUS TIME
FRAMES INDICATED.

THE EXAMPLE ASSUMES YOU REINVEST ALL DIVIDENDS AND THE AVERAGE ANNUAL RETURN IS
5%.

<TABLE>
<CAPTION>
1 Year 3 Years
<S> <C>
$10 $32
</TABLE>

This example is for comparison purposes only and is not a representation of
the Fund's actual expenses and returns, either past or future.

FINANCIAL HIGHLIGHTS

The Large Cap Value Fund is a new fund for which financial highlights are not
available.

<PAGE>
6

SIMPLIFIED ACCOUNT INFORMATION

<TABLE>
<CAPTION>
OPENING AN ACCOUNT
<S> <C>
This is the minimum
initial investment $250,000
- -----------------------------------------------------------------------------------------------------------
Use this type of
application New Account Form (Non-Retirement)
- -----------------------------------------------------------------------------------------------------------
The Fund offers a variety of features, which are described in the "Your Account"
Before completing section of this prospectus. Please read this section before completing the
the application application.
- -----------------------------------------------------------------------------------------------------------
Completing the If you need assistance, contact your financial representative, or call us at
application (800) 551-8043.
- -----------------------------------------------------------------------------------------------------------
If you are sending money Mail application and check, payable to: NICHOLAS-APPLEGATE MUTUAL FUNDS, PO BOX
by CHECK 8326, BOSTON, MA 02266-8326. The Trust will not accept third-party checks.
- -----------------------------------------------------------------------------------------------------------
Please read the bank wire or ACH section under the "Buying Shares" section
below. You will need to obtain an account number with the Trust by sending a
If you are sending money completed application to: NICHOLAS-APPLEGATE MUTUAL FUNDS, PO BOX 8326, BOSTON,
by BANK WIRE or ACH MA 02266-8326. To receive your account number, contact your financial
representative or call us at (800) 551-8043.

<CAPTION>
BUYING SHARES
<S> <C>
This is the minimum
subsequent investment $10,000
- -----------------------------------------------------------------------------------------------------------
The Trust is generally open on days that the New York Stock Exchange is open.
The price you will All transactions received in good order before the market closes receive that
receive day's price.
- -----------------------------------------------------------------------------------------------------------
Instruct your bank to wire the amount you wish to invest to:
STATE STREET BANK & TRUST CO.--ABA #011000028
If you are sending money DDA #9904-645-0
by BANK WIRE STATE STREET BOS, ATTN: MUTUAL FUNDS
CREDIT: NICHOLAS-APPLEGATE [FUND NAME][SHARE CLASS], [YOUR NAME], [ACCOUNT NAME
OR NUMBER]
- -----------------------------------------------------------------------------------------------------------
Call your bank to ensure (1) that your bank supports ACH, and (2) this feature
is active on your bank account. To establish this option, either complete the
If you are sending money appropriate sections when opening an account, contact your financial
by ACH representative, or call us at (800) 551-8043 for further information. To
initiate an ACH purchase, call the Trust at (800) 551-8043.
</TABLE>

<PAGE>
7

<TABLE>
<CAPTION>
SELLING OR REDEEMING SHARES
<S> <C> <C>
IN WRITING BY PHONE
--------------------------------------------------------------------------------------------
Selling shares by phone is a service option
which must be established on your account
prior to making a request. See the "Your
Account" section, or contact your financial
Certain requests may require a SIGNATURE representative or the Trust at (800) 551-8043
Things you should know GUARANTEE. See the next section for further for further information. The maximum amount
information. You may sell up to the full which may be requested by phone, regardless
account value. of account size, is $50,000. Amounts greater
than that must be requested in writing. If
you wish to receive your monies by bank wire,
the minimum request is $5,000.
- -----------------------------------------------------------------------------------------------------------------------
If you purchased shares through a financial representative or plan administrator/sponsor,
you should call them regarding the most efficient way to sell shares. If you bought shares
recently by check, payment may be delayed until the check clears, which may take up to 15
calendar days from the date of purchase. Sales by a corporation, trust or fiduciary may have
special requirements. Please contact your financial representative, a plan
administrator/sponsor or us for further information.
- -----------------------------------------------------------------------------------------------------------------------
The price you will The Trust is open on days that the New York Stock Exchange is open. All transactions
receive received in good order before the market closes receive that day's price.
- -----------------------------------------------------------------------------------------------------------------------
Please put your request in writing,
including:
the name of the account owners, account
number and Fund and share Class you are
redeeming from, and the share or dollar Either contact your financial representative
If you want to receive amount you wish to sell, signed by all or call us at (800) 551-8043. The proceeds
your monies by BANK WIRE account owners. Mail this request to: will be sent to the existing bank wire
NICHOLAS-APPLEGATE MUTUAL FUNDS, address listed on the account.
PO BOX 8326, BOSTON, MA 02266-8326.
The check will be sent to the existing bank
wire address listed on the account.
- -----------------------------------------------------------------------------------------------------------------------
Either contact your financial representative
or call us at (800) 551-8043. The proceeds
If you want to receive will be sent in accordance with the existing
your monies by ACH Please call us at (800) 551-8043. ACH instructions on the account and will
generally be received at your bank two
business days after your request is received.
</TABLE>

<PAGE>
8

SIMPLIFIED ACCOUNT INFORMATION

<TABLE>
<CAPTION>
SIGNATURE GUARANTEES
<S> <C>
A signature guarantee of a financial institution is required to verify the
A definition authenticity of an individual's signature. It can usually be obtained from a
broker, commercial or savings bank, or credit union.
- -----------------------------------------------------------------------------------------------------------
A signature guarantee is needed when making a written request for the following
reasons:
1. When selling more than $50,000 worth of shares;
2. When you want a check or bank wire sent to a name or address that is not
When you need one currently listed on the account;
3. To sell shares from an account controlled by a corporation, partnership,
trust or fiduciary; or
4. If your address was changed within the last 60 days.

<CAPTION>
EXCHANGING SHARES
<S> <C>
This is the minimum
exchange
amount to open a new $250,000
account
- -----------------------------------------------------------------------------------------------------------
The Trust is open on days that the New York Stock Exchange is open. All
The price you will transactions received in good order before the market closes receive that day's
receive price.
- -----------------------------------------------------------------------------------------------------------
The exchange must be to the shares of Class I Shares of another Fund or to the
Money Market Fund and to an account with the same registration. If opening an
account as part of an exchange, you must obtain and read the prospectus. If you
Things you should know intend to keep money in the Portfolio or Fund you are exchanging from, make sure
that you leave an amount equal to or greater than the Fund's minimum account
size (see the "Opening an Account" section). To protect other investors, the
Trust may limit the number of exchanges you can make.
- -----------------------------------------------------------------------------------------------------------
Either contact your financial representative, or call the Trust at (800)
How to request an 551-8043. The Trust will accept a request by phone if this feature was
exchange by PHONE previously established on your account. See the "Your Account" section for
further information.
- -----------------------------------------------------------------------------------------------------------
Please put your exchange request in writing, including: the name on the account,
How to request an the name of the Portfolio or Fund and the account number you are exchanging
exchange by MAIL from, the shares or dollar amount you wish to exchange, and the Fund you wish to
exchange to. Mail this request to: PO BOX 8326, BOSTON, MA 02266-8326.
</TABLE>

<PAGE>
9

YOUR ACCOUNT

TRANSACTION POLICIES

PURCHASE OF SHARES. Class I Shares are offered at net asset value without a
sales charge to qualified retirement plans, financial and other institutions and
"wrap accounts." The minimum initial investment is $250,000, and the minimum
subsequent investment is $10,000. The Distributor may waive these minimums from
time to time.

VALUATION OF SHARES. The net asset value per share (NAV) for Class I Shares of
the Fund is determined each business day at the close of regular trading on the
New York Stock Exchange (usually 4 p.m. Eastern Time) by dividing the value of
the Class' net assets by the number of its shares outstanding.

BUY AND SELL PRICES. When you buy shares, you pay the NAV, as described earlier.
When you sell shares, you receive the NAV. Your financial institution may charge
you a fee to execute orders on your behalf.

EXECUTION OF REQUESTS. The Fund is open on the days the New York stock Exchange
is open, usually Monday-Friday. Buy and sell requests are executed at the NAV
next calculated after your request is received in good order by the transfer
agent or another agent designated by the Trust. Investments by participants of
qualified retirement plans are made through the plan sponsor or administrator.

At times of peak activity, it may be difficult to place requests by phone.
During these times, consider sending your request in writing. The Fund reserves
the right to reject any purchase or to suspend or modify the continuous offering
of its shares. Your financial representative is responsible for forwarding
payment promptly to the transfer agent. The Trust reserves the right to cancel
any buy request if payment is not received within three days.

In unusual circumstances, the Fund may temporarily suspend the processing of
sell requests, or may postpone payment of proceeds for up to three business days
or longer, as allowed by federal securities laws.

TELEPHONE TRANSACTIONS. For your protection, telephone requests may be recorded
in order to verify their accuracy. In addition, the Trust will take measures to
verify the identity of the caller, such as asking for name, account number,
Social Security or taxpayer ID number and other relevant information. If these
measures are not taken, your Fund may be responsible for any losses that may
occur in your account due to an unauthorized telephone call.

CERTIFICATED SHARES. Most shares are electronically recorded. If you wish to
have certificates for your shares, please write to the transfer agent.
Certificated shares can only be sold by returning the certificates to the
transfer agent, along with a letter of instruction or a stock power and a
signature guarantee.

SALES IN ADVANCE OF PURCHASE PAYMENTS. When you place a request to sell shares
for which the purchase money has not yet been collected, the request will be
executed in a timely fashion, but the Fund will not release the proceeds to you
until your purchase payment clears. This may take up to fifteen calendar days
after the purchase.

SHAREHOLDER INQUIRIES. Shareholder inquiries should be addressed to the Trust,
c/o the Trust's transfer agent,

State Street Bank and Trust Company
Attention: Nicholas-Applegate Mutual Funds
P.O. Box 8326
Boston, MA 02266-8326

Telephone inquiries can be made by calling 1-800-551-8043 or, from outside the
U.S., 1-617-774-5000 (collect).

FEATURES AND ACCOUNT POLICIES
The services referred to in this section may be terminated or modified at any
time upon 60 days' written notice to shareholders. Shareholders seeking to add
to, change or cancel their selection of available services should contact the
transfer agent at the address and telephone number provided above.

RETIREMENT PLANS. You may invest in the Fund through various retirement plans,
including IRAs, Simplified Employee Plan (SEP) IRAs, 403(b) plans, 457 plans,
and all qualified retirement plans. For further information about any of the
plans, agreements, applications and annual fees, contact the Distributor, your
financial representative or plan sponsor. To determine which retirement plan is
appropriate for you, consult your tax adviser.

ACCOUNT STATEMENTS. In general, you will receive account statements as follows:
/ / After every transaction that affects your account balance.
/ / After any changes of name or address of the registered owner(s).

/ / In all other circumstances, every month.

Every year you will also receive an applicable tax information statement, mailed
by January 31. Participants in qualified retirement plans will receive account
information from their plan sponsor or administrator.
<PAGE>
10

YOUR ACCOUNT

DIVIDENDS. The Fund intends to distribute most or all of its net earnings in the
form of dividends. The Fund will pay dividends of net investment income
annually.

Any net capital gains will be distributed annually.

DIVIDEND REINVESTMENTS. If you choose this option, or if you do not indicate any
choice, your dividends will be reinvested on the ex-dividend date.
Alternatively, you can choose to have a check for your dividends mailed to you.
Interest will not accrue or be paid on uncashed dividend checks.

TAXABILITY OF DIVIDENDS. As long as the Fund meets the requirements for being a
tax-qualified regulated investment company, which the Fund intends to, it will
pay no federal income tax on the earnings it distributes to shareholders.

Dividends you receive from the Fund, whether reinvested or taken as cash, are
generally taxable. Dividends from the Fund's long-term capital gains are taxable
as capital gains; dividends from other sources are generally taxable as ordinary
income.

Some dividends paid in January may be taxable as if they had been paid the
previous December. Corporations may be entitled to take a dividends-received
deduction for a portion of certain dividends they receive.

The tax information statement that is mailed to you details your dividends and
their federal tax category, although you should verify your tax liability with
your tax professional.

TAXABILITY OF TRANSACTIONS. Any time you sell or exchange shares, it is
considered a taxable event for you. Depending on the purchase price and the sale
price of the shares you sell or exchange, you may have a

gain or a loss on the transaction. You are responsible for any tax liabilities
generated by your transactions.

SMALL ACCOUNTS (NON-RETIREMENT ONLY). If you draw down a non-retirement account
so that its total value is less than the Fund minimum, you may be asked to
purchase more shares within 60 days. If you do not take action, the Fund may
close out your account and mail you the proceeds. Your account will not be
closed if its drop in value is due to Fund performance.

AUTOMATIC WITHDRAWALS. You may make automatic withdrawals from the Fund of $250
or more on a monthly or quarterly basis if you have an account of $15,000 or
more in the Fund. Withdrawal proceeds will normally be received prior to the end
of the month or quarter. See the account application for further information.

AUTOMATIC INVESTMENT PLAN. You may make regular monthly or quarterly investments
in Class I Shares of the Fund through automatic withdrawals of specified amounts
from your bank account once an automatic investment plan is established. See the
account application for further details about this service or call the Transfer
Agent at 1-800-551-8043.

CROSS-REINVESTMENT. You may cross-reinvest dividends or dividends and capital
gains distributions paid by the Fund into Class I Shares of another Fund,
subject to conditions outlined in the Statement of Additional Information and
the applicable provisions of the qualified retirement plan.

SHAREHOLDER SERVICES. Nicholas-Applegate Securities may make payments from its
own resources to brokers, consultants, and financial institutions for performing
certain services for shareholders and for the maintenance of shareholder
accounts.

<PAGE>
11

ORGANIZATION AND MANAGEMENT

INVESTMENT ADVISER COMPENSATION

The Fund pays the Investment Adviser a monthly fee pursuant to an investment
advisory agreement. The Large Cap Value Fund pays at the annual rate of 0.75% of
the Fund's average net assets.

The Investment Adviser has agreed to defer its management fees payable by the
Fund (excluding interest, taxes, brokerage commissions and other portfolio
transaction expenses, capital expenditures and extraordinary expenses), and to
absorb other operating expenses of the Fund, subject to later reimbursement, so
that the expenses for the Class I Shares of the Fund will not exceed 1.00% on an
annual basis through March 31, 1999. The Fund will reimburse the Investment
Adviser for fees deferred or other expenses paid pursuant to this Agreement in
later years in which operating expenses for the Fund are less than the
percentage limitation set forth above for any such year. The Investment Adviser
will not recover any fee waivers or expense reimbursements from the Fund more
than five years after the expenses were incurred.

ADMINISTRATOR COMPENSATION

The Fund pays administrative fees for administrative personnel and services
(including certain legal and financial reporting services). The Fund pays
Investment Company Administration Corporation (ICAC) a monthly fee at an annual
rate ranging from 0.05% to 0.01% of average net assets, with a minimum of
$40,000.

DISTRIBUTOR

Nicholas-Applegate Securities
600 West Broadway, 30th Floor
San Diego, California 92101
(800) 551-8045

PORTFOLIO TRADES

The Investment Adviser is responsible for the Fund's portfolio transactions. In
placing portfolio trades, the Investment Adviser may use brokerage firms that
may charge higher brokerage rates in exchange for furnishing research services
to the Fund or that sell shares of the Fund but only when the Investment Adviser
believes no other firm offers a better combination of quality execution (i.e.
timeliness and completeness) and favorable price. Under normal circumstances the
Investment Adviser expects high annual portfolio turnover of 200%. This is
generally higher than other funds and will result in the Fund incurring higher
brokerage costs.

INVESTMENT OBJECTIVE

The Fund's investment objective is fundamental and may only be changed with
shareholder approval. The other fundamental limitations are described in the
Statement of Additional Information. All other changes may be made by the Board
of Trustees without shareholder approval.

DIVERSIFICATION

The Fund is diversified.

<PAGE>
12

ORGANIZATION AND MANAGEMENT

PORTFOLIO TEAM

ARTHUR E. NICHOLAS, MANAGING PARTNER

Chief Investment Officer

Founded firm in 1984; prior investment management experience with Pacific
Century Advisers, Security Pacific Bank and San Diego Trust & Savings Bank

B.S.--San Diego State University

CATHERINE SOMHEGYI, PARTNER

Chief Investment Officer--Global Equity Management

Joined firm in 1987; prior investment management experience with Professional
Asset Securities, Inc. and Pacific Century Advisers

M.B.A. and B.S.--University of Southern California

EDMUND W. KEELEY, JR., CFA

Portfolio Manager, Traditional Value Equities

Joined firm in 1998; 34 years prior investment experience with Smith Barney
Capital Management and F. Eberstadt & Co.

M.B.A.--Columbia University; B.A.--Cornell University

PHILIP J. MILLER

Portfolio Manager, Traditional Value Equities

Joined firm in 1998; 25 years prior investment experience with Smith Barney
Capital Management and Dominick and Dominick

B.A.--Wesleyan University

VICTOR J. RASKIN, CFA

Portfolio Manager, Traditional Value Equities

Joined firm in 1998; 29 years prior investment experience with Smith Barney
Capital Management; Schaenen Wood; Tallasi Management; and Dean Witter

M.B.A.--New York University; B.A.--Washington & Jefferson College

<PAGE>
13

RISK FACTORS AND SPECIAL CONSIDERATIONS

MUTUAL FUND CONSIDERATIONS IN GENERAL

Prospective investors should know that any mutual fund investment is subject to
market fluctuations and other risks inherent in investing in securities. There
can be no assurance that your investment will increase in value. The value of
your investment will go up and down depending upon market forces and you may not
recoup your original investment. You should consider an investment in the Fund
as a long-term investment.

THE FUND'S INVESTMENTS

EQUITY SECURITIES. Equity securities include common stocks, convertible
securities and warrants. Although equity securities have a history of long-term
growth in value, their prices rise and fall as a result of changes in the
company's financial condition as well as movements in the overall securities
markets.

SMALLER ISSUERS. Smaller and medium sized issuers may be less seasoned, have
more limited product lines, markets, financial resources and management depth,
and be more susceptible to adverse market conditions than larger issuers. As a
result, the securities of such smaller issuers may be less actively traded than
those of larger issuers and may also experience greater market volatility.

CONVERTIBLE SECURITIES. A convertible security is a fixed income equity security
that may be converted into a prescribed amount of common stock at a specified
formula. A convertible security entitles the owner to receive interest until the
security matures or is converted. Convertibles have several unique investment
characteristics such as: (a) higher yields than common stocks but lower yields
than straight debt securities; (b) lesser degree of fluctuation in value than
the underlying stock since they have fixed income characteristics; and (c)
potential for capital appreciation if the market price of the underlying
security increases.

CORPORATE DEBT SECURITIES. Corporate debt securities are subject to the risk of
an issuer's inability to meet principal and interest payments on the obligation
(credit risk) and may also be subject to price volatility due to such factors as
interest rate sensitivity, market perception of the credit-worthiness of the
issuer and general market liquidity (market risk). When interest rates decline,
the value of the Fund's debt securities can be expected to rise, and when
interest rates rise, the value of those securities can be expected to decline.
Debt Securities with longer maturities tend to be more sensitive to interest
rate movements than those with shorter maturities.

Debt obligations that carry a rating of at least Baa from Moody's or BBB from
Standard and Poor's, or a comparable rating from another rating agency or, if
not rated by an agency, are determined by the Investment Adviser to be of
comparable quality. Bonds rated BBB or Baa have speculative characteristics and
changes in economic circumstances are more likely to lead to a weakened capacity
to make interest and principal payments than higher rated bonds. For a further
explanation of these ratings, see "Corporate Bond Ratings" beginning on page 16.

U.S. GOVERNMENT SECURITIES. U.S. Government securities are obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities. Some U.S.
Government securities such as U.S. Treasury bills, notes, bonds, and
certificates issued by the Government National Mortgage Association (GNMA) are
supported by the full faith and credit of the United States. Other U.S.
Government securities, such as securities issued by the Federal National
Mortgage Association (FNMA) and the Federal Home Loan Bank Board, are supported
by the right of the issuer to borrow from the U.S. Treasury. Still others, such
as securities of the Student Loan Marketing Association, are supported only by
the credit of the issuer. U.S. Government securities may include zero coupon
securities that are issued or purchased at a significant discount from face
value.

ASSET BACKED SECURITIES. Non-mortgage related asset-backed securities include,
but are not limited to, interests in pools of receivables, such as credit card
and accounts receivables and motor vehicle and other installment purchase
obligations and leases. Interests in these pools are not backed by the U.S.
Government and may or may not be secured.

The credit characteristics of asset-backed securities differs in a number of
respects from those of traditional debt securities. Asset-backed securities
generally do not have the benefit of a security interest in collateral that is
comparable to other debt obligations, and there is a possibility that recoveries
on repossessed collateral may not be available to support payment on these
securities.

FOREIGN SECURITIES. To the extent the Fund invests in foreign securities, the
risks and volatility are magnified since the performance of foreign stocks
depends upon changes in foreign currency values,

<PAGE>
14

RISK FACTORS AND SPECIAL CONSIDERATIONS

different political and regulatory environments, and the overall political and
economic conditions in countries where the Fund invests.

INVESTMENT COMPANY SECURITIES. The Fund may invest up to 10% of its total assets
in the shares of other investment companies. The Fund may invest in money market
mutual funds in connection with the management of its daily cash positions. The
Fund may also make indirect foreign investments through other investment
companies that have comparable investment objectives and policies as the Fund.
In addition to the advisory and operational fees the Fund bears directly in
connection with its own operation, the Fund would also bear its pro rata
portions of each other investment company's advisory and operational expenses.

ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities that are considered illiquid. An illiquid investment is generally an
investment that is not registered under U.S. securities laws, or cannot be
disposed of within seven days in the normal course of business at approximately
the amount at which the Fund values it. Limitations on resale may adversely
affect the marketability of illiquid securities and the Fund may not be able to
dispose of these securities at the desired time and price. The Fund may bear
additional expenses if it has to register these securities under U.S. securities
laws before being resold. The Board of Trustees has determined that Rule 144A
securities are not illiquid securities.

TEMPORARY INVESTMENTS. The Fund may from time to time on a temporary basis
invest all of its assets in short term instruments to maintain liquidity or when
the Investment Adviser determines that the market conditions call for a
temporary defensive posture. These temporary investments include: notes issued
or guaranteed by the U.S. government, its agencies or instrumentalities;
commercial paper rated in the highest two rating categories; certificates of
deposit; repurchase agreements and other high grade corporate debt securities.

THE FUND'S INVESTMENT TECHNIQUES

REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements, that is,
the purchase by the Fund of security that seller has agreed to buy back, usually
within one to seven days. The seller's promise to repurchase the security is
fully collateralized by securities equal in value to 102% of the purchase price,
including accrued interest. If the seller defaults and the collateral value
declines, the Fund might incur a loss. If the seller declares bankruptcy, the
Fund may not be able to sell the collateral at the desired time. The Fund enters
into these agreements only with brokers, dealers, or banks that meet credit
quality standards established by the Board of Trustees.

SECURITIES SWAPS. A securities swap is a technique primarily used to indirectly
participate in the securities market of a country from which the Fund would
otherwise be precluded for lack of an established securities custody and
safekeeping system. The Fund deposits an amount of cash with its custodian (or
the broker, if legally permitted) in an amount equal to the selling price of the
underlying security. Thereafter, the Fund pays or receives cash from the broker
equal to the change in the value of the underlying security.

SHORT SALES. A "short sale" is the sale by the Fund of a security which has been
borrowed from a third party on the expectation that the market price will drop.
If the price of the security drops, the Fund will make a profit by purchasing
the security in the open market at a lower price than at which it sold the
security. If the price of the security rises, the Fund may have to cover its
short position at a higher price than the short sale price, resulting in a loss.
A short sale can be covered or uncovered. In a covered short sale, the Fund
either (1) borrows and sells securities it already owns (also known as a short
sale "against the box"), or (2) deposits in a segregated account cash, U.S.
government securities, or other liquid securities in an amount equal to the
difference between the market value of the securities and the short sale price.
Use of uncovered short sales is a speculative investment technique and has
potentially unlimited risk of loss. Accordingly, the Fund will not make
uncovered short sales in an amount exceeding the lesser of 2% of the Fund's net
assets or 2% of the securities of such class of the issuer. The Board of
Trustees has determined that the Fund will not make short sales if to do so
would create liabilities or require collateral deposits of more than 25% of the
Fund's total assets.

WHEN ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase or sell
securities for delivery at a future date, generally 15 to 45 days after the
commitment is made. The other party's failure to complete the transaction may
cause the Fund to miss a price or yield considered to be advantageous. The Fund
may not purchase when-issued securities or enter into firm commitments if, as a
result, more than 15% of the Fund's net assets would be segregated to cover such
securities.

BORROWING. The Fund may borrow up to 20% of its total assets for temporary,
extraordinary or emergency purposes, such as to provide cash for redemption
<PAGE>
15

requests without having to sell portfolio securities at an inopportune time. The
Fund may also borrow money through reverse repurchase agreements, uncovered
short sales, and other techniques. All borrowings by the Fund cannot exceed
one-third of the Fund's total assets.

As a consequence of borrowing, the Fund will incur obligations to pay interest,
resulting in an increase in expenses.

SECURITIES LENDING. The Fund may lend securities to financial institutions such
as banks, broker/dealers and other recognized institutional investors in amounts
up to 30% of the Fund's total assets. These loans earn income for the Fund and
are collateralized by cash, securities, letters of credit or any combination
thereof. The Fund might experience a loss if the financial institution defaults
on the loan.

OPTIONS. The Fund may deal in options on securities, securities indices and
foreign currencies. The Fund may use options to manage stock prices, interest
rate and currency risks. The Fund may not purchase or sell options if more than
25% of its net assets would be hedged. The Fund may also write covered call
options and secured put options to seek to generate income or lock in gains on
up to 25% of their net assets.

FUTURES AND OPTIONS ON FUTURES. The Fund may enter into futures contracts, or
options thereon, involving foreign currency, interest rates, securities, and
securities indices, for hedging purposes only. A stock index futures contract is
a bilateral agreement pursuant to which two parties agree to take or make
delivery of an amount of cash equal to a specified dollar amount times the
difference between the stock index value at the close of the last trading day of
the contract and the price at which the futures contract is

originally struck. No physical delivery of the underlying stocks in the index is
made.

As a general rule, the Fund will not purchase or sell futures if, immediately
thereafter, more than 25% of its net assets would be hedged.

RISKS OF FUTURES AND OPTIONS TRANSACTIONS. When the Fund uses options, futures
and options on futures as hedging devices, there is a risk that the prices of
the hedging vehicles may not correlate perfectly with the prices of the
securities in the portfolio. This may cause the futures contract and any related
options to react differently than the Fund's portfolio securities to market
changes. In addition, the Investment Adviser could be incorrect in its
expectations about the direction or the extent of market movements. In these
events, the Fund could lose money on the futures contracts or option.

It is not certain that a secondary market for positions in futures contracts or
for options will exist at all times. Although the Investment Adviser will
consider liquidity before entering into these transactions, there is no
assurance that a liquid secondary market will exist for these instruments.

THE YEAR 2000. The Investment Adviser has taken steps that it believes are
reasonably designed to address the potential failure of computer programs used
by the Investment Adviser and the Trust's service providers to address the Year
2000 issue. There can be no assurance that these steps will be sufficient to
avoid any adverse impact.

In addition, the Year 2000 problem may adversely affect the Funds' investments.
For example, portfolio companies may incur substantial costs to address the
problem. They may also suffer losses caused by corporate and governmental data
processing errors.

<PAGE>
N I C H O L A S-A P P L E G A T E-REGISTERED TRADEMARK-
M U T U A L F U N D S
NEW ACCOUNT FORM (NON-IRA)

- ----------------------------------------------------
CLASS I SHARES
MAIL TO:
Nicholas-Applegate Mutual Funds
PO Box 8326
Boston, MA 02266-8326
800 - 551-8043
FOR AN IRA ACCOUNT APPLICATION, CALL 800 - 551-8043.

1. YOUR ACCOUNT REGISTRATION
- --------------------------------------------------------------------------------
PLEASE PRINT. COMPLETE ONE SECTION ONLY. Joint account owners will be registered
joint tenants with the right of survivorship unless otherwise indicated. It is
the shareholder(s) responsibility to specify ownership designations which comply
with applicable state law.

<TABLE>
<S> <C> <C> <C> <C>
/ / INDIVIDUAL OR JOINT ACCOUNT
- -
--------------------------------------------------------------------------------------------------------------------------
First Name Middle Initial Last Name Social Security
Number
- -
--------------------------------------------------------------------------------------------------------------------------
Joint Tenant (IF ANY) Middle Initial Last Name Social Security
Number
/ / GIFT OR TRANSFER TO MINOR (UGMA/UTMA)

--------------------------------------------------------------------------------------------------------------------------
Custodian's First Name (ONLY ONE) Middle Initial Last Name

--------------------------------------------------------------------------------------------------------------------------
Minor's First Name (ONLY ONE) Middle Initial Last Name
- - - -
--------------------------------------------------------------------------------------------------------------------------
Minor's State of Residence Minor's Date of Birth Minor's Social
Security Number
</TABLE>

<TABLE>
<S> <C> <C>
/ / TRUST, CORPORATION, PARTNERSHIP OR OTHER ENTITY (CORPORATE
RESOLUTION REQUIRED)

----------------------------------------------------------------------------------------------------------------------------
Name of Trust, Corporation or Other Entity
- -
- ---------------------------------------------------------------------------------------------------------------------------------
Trustee Name(s) or Type of Entity Date of Trust Agreement

- ---------------------------------------------------------------------------------------------------------------------------------
Name of Beneficiary (OPTIONAL) Taxpayer Identification Number
</TABLE>

2. YOUR ADDRESS
- --------------------------------------------------------------------------------
Do you have any other identically registered Nicholas-Applegate accounts?
/ / Yes / / No

- --------------------------------------------------------------------------------
Street Address or PO Box Number Apartment Number

- --------------------------------------------------------------------------------
City State Zip

- -
- --------------------------------------------------------------------------------
Area Code Home Phone

- -
- --------------------------------------------------------------------------------
Area Code Business Phone
CITIZENSHIP:
/ / U.S.
/ / Resident Alien
/ / Non-resident Alien
------------------------------------------------
Specify Country (if not U.S.)

3. YOUR INVESTMENT
- --------------------------------------------------------------------------------
Please select your fund choices and appropriate share class. See prospectus for
investment minimums.

<TABLE>
<CAPTION>
CLASS AMOUNT
<S> <C> <C>
- -------------------------------------------------------------------
Large Cap Value I(750) / / $
- -------------------------------------------------------------------
Other $
- -------------------------------------------------------------------
TOTAL $
- -------------------------------------------------------------------

</TABLE>

4. YOUR METHOD OF PAYMENT
- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
/ / BY CHECK: Payable to NICHOLAS-APPLEGATE
MUTUAL FUNDS (Third party checks will NOT be / / BY EXCHANGE: Fund name from which
accepted.) you are exchanging --------------------------
/ / BY WIRE: Please call 1-800-551-8043 for
your account number / / BY CONFIRM TRADE ORDER: Trade Order #
--------------------------
</TABLE>

<PAGE>
5. YOUR DIVIDEND AND CAPITAL GAIN PAYMENT OPTIONS
- --------------------------------------------------------------------------------

Distributions will automatically be reinvested in additional shares of your
Fund(s) unless you check the box(es) below.

DIVIDENDS (CHECK ONE) / / Reinvest / / Cash
CAPITAL GAINS (CHECK ONE) / / Reinvest / / Cash

/ / CROSS FUND REINVESTMENT+ (OPTIONAL)--Reinvest all dividends and capital
gains into an existing account in another Nicholas-Applegate Fund.

+MUST BE SAME ACCOUNT TYPE AND CLASS OF SHARES. MUST BE A $5,000 MINIMUM ACCOUNT
VALUE FOR THIS SERVICE.

SERVICE OPTIONS
- --------------------------------------------------------------------------------

6. TELEPHONE REDEMPTIONS AND EXCHANGES
- --------------------------------------------------------------------------------

This allows you to use the telephone to redeem or exchange shares, unless you
check the box below. Redemptions will be made payable to the registered owner(s)
and mailed to the address of record. Maximum redemption by telephone is $50,000.

/ / I do not want telephone redemption privilege.
/ / I do not want telephone exchange privilege.

7. SYSTEMATIC INVESTMENT--to my mutual fund account via ACH
- --------------------------------------------------------------------------------

/ / Check this box to invest on a regular basis from your bank account. Please
complete "Checking Account Information" (SECTION 10).

<TABLE>
<S> <C> <C> <C> <C> <C>
------------------------------ $ -- -- , -- -- -- . -- -- -- -- / / / /
Fund Name Amount ($50 MINIMUM) Day* Quarterly
Monthly (JAN/APRIL/JULY/OCT)

------------------------------ $ -- -- , -- -- -- . -- -- -- -- / / / /
Fund Name Amount ($50 MINIMUM) Day* Quarterly
Monthly (JAN/APRIL/JULY/OCT)
</TABLE>

*IF YOU DO NOT PROVIDE A DATE, THEN IT WILL DEFAULT TO THE 15TH OF THE MONTH.

8. SYSTEMATIC EXCHANGES--from one Nicholas-Applegate mutual fund account to
another
- --------------------------------------------------------------------------------

/ / Check this box to exchange on a regular basis from one Nicholas-Applegate
account to another. (MUST BE SAME SHARE CLASS AND REGISTRATION.)

<TABLE>
<S> <C> <C> <C> <C> <C>
FROM:

------------------------------ $ -- -- , -- -- -- . -- -- -- -- / / / /
Fund Name Day* Quarterly
Monthly (JAN/APRIL/JULY/OCT)
Amount ($50 MINIMUM, $5,000 MINIMUM ACCOUNT VALUE)

-- -- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- -- --
Account Number (IF KNOWN)

TO:

------------------------------ $ -- -- , -- -- -- . -- -- -- -- / / / /
Fund Name Day* Quarterly
Monthly (JAN/APRIL/JULY/OCT)
Amount ($50 MINIMUM, $5,000 MINIMUM ACCOUNT VALUE)

-- -- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- -- --
Account Number (IF KNOWN)
</TABLE>

*IF YOU DO NOT PROVIDE A DATE, THEN IT WILL DEFAULT TO THE 15TH OF THE MONTH.
<PAGE>
9. SYSTEMATIC WITHDRAWAL--from my mutual fund account via ACH or check
- --------------------------------------------------------------------------------

/ / Check this box to withdraw on a regular basis from my mutual fund account.
Please complete "Checking Account Information" below (SECTION 10):

<TABLE>
<S> <C> <C> <C> <C> <C>
BY ACH TO MY BANK ACCOUNT

------------------------------ $ -- -- , -- -- -- . -- -- -- -- / / / /
Fund Name Day* Quarterly
Monthly (JAN/APRIL/JULY/OCT)
Amount ($50 MINIMUM, $5,000 MIN. ACCOUNT VALUE)

BY CHECK (DO NOT NEED TO
COMPLETE SECTION 11)

------------------------------ $ -- -- , -- -- -- . -- -- 15 / / / /
----
Fund Name Day* Quarterly
Monthly (JAN/APRIL/JULY/OCT)
Amount ($50 MINIMUM, $5,000 MIN. ACCOUNT VALUE)
</TABLE>

SEND PROCEEDS TO:

/ / Address of record

/ / Special Payee (LIST BELOW)

<TABLE>
<S> <C> <C> <C> <C>
------------------------------ ---------- ------------------------------
First Name Middle Last Name
Initial
</TABLE>

<TABLE>
<S> <C> <C> <C>
- -------------------- -------------------- -- -- -- -- -- -- -- - -- -- -- --
Address City State Zip
</TABLE>

*IF YOU DO NOT PROVIDE A DATE, THEN IT WILL DEFAULT TO THE 15TH OF THE MONTH.

10. CHECKING ACCOUNT INFORMATION--for ACH or redemptions by wire
- --------------------------------------------------------------------------------

Must be completed for Sections 7 and 9. PLEASE ATTACH A VOIDED CHECK OR DEPOSIT
SLIP.

- --------------------------------------------------------------------------------
Name of Institution

<TABLE>
<S> <C> <C> <C>
- --------------- --------------- --- --- --- --- --- --- --- - -- -- -- --
Address City State Zip
</TABLE>

- --------------------------------------------------------------------------------
Bank ABA Routing Number Bank Account Number

- --------------------------------------------------------------------------------

Any joint owner of your bank account who is not a joint owner of your mutual
fund account(s) must sign above.

11. DUPLICATE STATEMENTS
- --------------------------------------------------------------------------------

/ / I wish to have a duplicate statement sent to the interested party listed
below.

- --------------------------------------------------------------------------------
Name of Interested Party

<TABLE>
<S> <C> <C> <C>
- --------------- --------------- --- --- --- --- --- --- --- - -- -- -- --
Address City State Zip
</TABLE>

(SEE REVERSE)
<PAGE>
12. DEALER INFORMATION
- --------------------------------------------------------------------------------

HOME OFFICE INFORMATION (TO BE COMPLETED BY INVESTMENT REPRESENTATIVE)

<TABLE>
<S> <C>
- --------------------------------------------- -- -- -- - -- -- -- - -- -- -- --
Dealer Name and Number (IF KNOWN) Area Code Phone
</TABLE>

<TABLE>
<S> <C> <C> <C>
- ---------------------- ------------------ --- --- --- --- --- --- --- - -- -- -- --
Home Office Address City State Zip
</TABLE>

BRANCH OFFICE INFORMATION

<TABLE>
<S> <C>
- ------------------------------ -- -- -- - -- -- -- - -- -- -- --
Branch Office Number Area Code Phone
</TABLE>

<TABLE>
<S> <C> <C> <C>
- ---------------------- ------------------ --- --- --- --- --- --- --- - -- -- -- --
Branch Office Address City State Zip
</TABLE>

REPRESENTATIVE INFORMATION

<TABLE>
<S> <C>
- ------------------------------------------------------------------ ---------------------------------------------------------------
Representative's Name Representative's Number
</TABLE>

13. SIGNATURES
- --------------------------------------------------------------------------------

BY SIGNING THIS NEW ACCOUNT FORM BELOW, I ASSURE THAT:

- - I have received and read the prospectus for each of the Funds in which I am
investing, and I believe each investment is suitable for me. I understand that
the prospectus terms are incorporated into this New Account Form by reference.

- - I authorize the Nicholas-Applegate Funds, their affiliates and agents to act
on any instructions believed to be genuine for any service authorized on this
form. I agree they will not be liable for any resulting loss or expense.

- - I am of legal age in my state and have the authority and legal capacity to
purchase mutual fund shares.

- - I understand that neither the fund(s) nor the distributor, Nicholas-Applegate
Securities, is a bank and that fund shares are not obligations of or
guaranteed by any bank or insured by the FDIC.

- - I understand that mutual funds involve risks, including possible loss of
principal.

I CERTIFY, UNDER PENALTIES OF PERJURY, THAT:

1. The Social Security or Taxpayer Identification Number shown on this form is
correct. (If I fail to give the correct number or to sign this form, the
Nicholas-Applegate Funds may reject or redeem my investment. I may also be
subject to any applicable IRS Backup Withholding for all distributions and
redemptions.)

2. / / I am NOT currently subject to IRS Backup Withholding because (a) I have
not been notified of it or (b) notification has been revoked.

/ / I am currently subject to IRS Backup Withholding.

I agree that neither Nicholas-Applegate Securities, the Funds, nor any of their
affiliates will be responsible for the authenticity of any instructions given
and shall be fully indemnified as to and held harmless from any and all direct
and indirect liabilities, losses, or costs resulting from acting upon such
transactions.

<TABLE>
<S> <C>
- ------------------------------------------------------------ -- -- - -- -- - -- -- -- --
Shareowner, Custodian, Trustee or Authorized Officer Date

- ------------------------------------------------------------ --- --- - -- -- - -- -- -- --
Joint Owner, Custodian, Trustee or Authorized Officer Date
</TABLE>
<PAGE>
FOR MORE INFORMATION

Two documents are available that
offer further
information on the
Nicholas-Applegate Mutual
Funds:

ANNUAL OR SEMI-ANNUAL REPORTS
TO SHAREHOLDERS

Include financial statements,
detailed performance
information, portfolio holdings,
a statement from portfolio
management, and the
auditor's report.

STATEMENT OF ADDITIONAL
INFORMATION (SAI)

The SAI contains more detailed
information on all aspects of
the Funds.

A current SAI has been filed
with the Securities
and Exchange Commission and is
incorporated
by reference into this
prospectus.

To request a free copy of the
current annual or
semi-annual report or SAI,
please call or write:

Nicholas-Applegate Mutual Funds
600 West Broadway
San Diego, California 92101
Telephone: (800) 551-8643

N I C H O L A S-A P P L E G A T E-REGISTERED
TRADEMARK-

600 West Broadway
San Diego, California 92101
800-551-8643
Nicholas-Applegate Securities, Distributor
www.nacm.com

MFLCVPROI1098

<PAGE>

NICHOLAS | APPLEGATE-Registered Trademark- MUTUAL FUNDS

SUPPLEMENT TO PROSPECTUSES & STATEMENT OF ADDITIONAL INFORMATION

Institutional Shares dated July 24, 1998

NOVEMBER 4, 1998

THE FOLLOWING INFORMATION REPLACES INFORMATION CONTAINED UNDER THE PACIFIC RIM
FUND'S "PRINCIPAL INVESTMENTS" ON PAGE 20 OF THE PROSPECTUS.

Under normal circumstances, the Fund invests no more than 50% of its total
assets in issuers of any one country.

THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER THE VALUE
FUND'S "INVESTMENT STRATEGY" AND "PRINCIPAL INVESTMENTS" SECTIONS ON PAGE 30 OF
THE PROSPECTUS.

INVESTMENT STRATEGY

The Fund's Investment Adviser employs a disciplined, "bottom-up" approach
that evaluates stocks on an individual basis and focuses on company
fundamentals. It uses a blend of computer-intensive systematic disciplines
and traditional fundamental research to uncover stocks that meet three
investment criteria: attractive valuations, underlying financial strength,
and prospects for business improvement.

The Fund emphasizes equity securities of undervalued, large U.S. companies
with market capitalizations generally above $5 billion.

PRINCIPAL INVESTMENTS

Under normal conditions, the Fund invests at least 80% of its total assets
in equity securities of U.S. companies with large capitalizations.
Generally, large capitalization stocks are those with market
capitalizations greater than $3 billion. It invests the remainder primarily
in preferred and convertible securities, debt securities of any maturity
which are rated investment grade by a nationally recognized statistical
rating agency, or of comparable quality if unrated, and securities issued
by the U.S. Government and its agencies and instrumentalities. The Fund may
also use options and futures contracts as hedging techniques.

THE FOLLOWING INFORMATION REPLACES INFORMATION UNDER THE HIGH QUALITY BOND
FUND'S "PRINCIPAL INVESTMENTS" ON PAGE 42 OF THE PROSPECTUS.

Under normal conditions, the Fund invests at least 65% of its total assets
in debt securities issued by U.S. and foreign corporations, U.S. and
foreign governments, and their agencies and instrumentalities which are
rated in the top two investment grades by a nationally recognized
statistical rating agency, or of comparable quality if unrated.

THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION UNDER "SELLING AND
REDEEMING SHARES" SECTION ON PAGE 49 OF THE PROSPECTUS.

If you bought shares recently by check, payment may be delayed until the
check clears, which may take up to 15 calendar days from the date of
purchase.

<PAGE>

THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE "PORTFOLIO
TRADES" SECTION ON PAGE 53 OF THE PROSPECTUS.

The Investment Adviser is responsible for the Funds' portfolio
transactions. In placing portfolio trades, the Investment Adviser may use
brokerage firms that may charge higher brokerage rates in exchange for
furnishing research services to the Fund, or that sell shares of the Fund
but only when the Investment Adviser believes no other firm offers a better
combination of quality execution (i.e. timeliness and completeness) and
favorable price. Under normal circumstances the Investment Adviser expects
high annual portfolio turnover of 200%. This is generally higher than other
funds and will result in the Funds incurring higher brokerage costs.

THE "PORTFOLIO TEAMS" SECTION BEGINNING ON PAGE 55 OF THE PROSPECTUS HAS BEEN
REVISED AS FOLLOWS:

ARTHUR E. NICHOLAS, MANAGING PARTNER
Chief Investment Officer
Founded firm in 1984; prior investment management experience with Pacific
Century Advisers, Security Pacific Bank and San Diego Trust & Savings Bank.
B.S. San Diego State University

LARRY SPEIDELL, PARTNER, CFA
Director of Global/Systematic Portfolio Management and Research
Joined firm in 1994; 23 years prior investment management experience with
Batterymarch Financial Management and Putnam Management Company. M.B.A.
Harvard University; B.E. Yale University
WORLDWIDE GROWTH, INTERNATIONAL CORE GROWTH, INTERNATIONAL SMALL CAP
GROWTH, EMERGING COUNTRIES, GLOBAL BLUE CHIP, LATIN AMERICA, PACIFIC RIM
AND GREATER CHINA

PEDRO V. MARCAL, PARTNER
Portfolio Manager
Joined firm in 1994; 5 years prior investment management experience with
A.B. Laffer, V.A. Canto & Associates, and A-Mark Precious Metals. B.A.
University of California, San Diego
EMERGING COUNTRIES, GLOBAL BLUE CHIP AND GLOBAL GROWTH & INCOME

ESWAR MENON
Portfolio Manager
Joined firm in 1995; 5 years prior investment management experience with
Koeneman Capital Management and Integrated Device Company. M.B.A., summa
cum laude, University of Chicago; M.S. University of California, Santa
Barbara; B.S. Indian Institute of Technology, Madras
EMERGING COUNTRIES

ALEX MUROMCEW
Portfolio Manager
Joined firm in 1996; 6 years prior investment management experience with
Jardine Fleming Securities (Japan); Emerging Markets Investors Corporation;
Teton Partners LP. M.B.A. Stanford University; B.A. Dartmouth College
WORLDWIDE GROWTH, INTERNATIONAL CORE GROWTH, INTERNATIONAL SMALL CAP
GROWTH, GLOBAL BLUE CHIP AND GLOBAL GROWTH & INCOME

ERNESTO RAMOS, PH.D.
Portfolio Manager
Joined firm in 1994; 14 years prior investment management and quantitative
research experience with Batterymarch Financial Management; Bolt Beranek &
Newman, Inc.; and Harvard University. Ph.D. Harvard University; B.S.
Massachusetts Institute of Technology
EMERGING COUNTRIES, GLOBAL BLUE CHIP, GLOBAL GROWTH & INCOME AND LATIN
AMERICA

<PAGE>

MELISA A. GRIGOLITE
Portfolio Manager
Joined firm in 1991; prior experience with SGPA Architecture and Planning.
M.S. San Diego State University; B.S. Southwest Missouri State University
WORLDWIDE GROWTH, INTERNATIONAL CORE GROWTH, INTERNATIONAL SMALL CAP
GROWTH, GLOBAL BLUE CHIP, AND GLOBAL GROWTH AND INCOME

JOHN TRIBOLET
Portfolio Manager
Joined firm in 1997; 5 years prior experience with Kemper Securities, Inc.
and PaineWebber; M.B.A. University of Chicago; B.A. Columbia University
WORLDWIDE GROWTH, INTERNATIONAL CORE GROWTH, INTERNATIONAL SMALL CAP
GROWTH, GLOBAL BLUE CHIP AND GLOBAL GROWTH & INCOME

JESSICA HILINSKI
Portfolio Manager
Joined firm in 1996; 3 years prior experience with Eaton Vance Management
and Union Capital Advisors. Attended University of Pennsylvania
EMERGING COUNTRIES

AYLIN UCKUNKAYA
Portfolio Manager
Joined firm in 1997; 4 years prior investment management experience with
Global Securities. B.A. Istanbul University
EMERGING COUNTRIES

JOHN BORCHARDT
Portfolio Manager
Joined firm in 1994; 5 years prior investment management experience with
Union Bank. B.S. University of San Francisco
EMERGING COUNTRIES AND LATIN AMERICA

TIMOTHY GREATON
Portfolio Manager
Joined firm in 1997; 5 years prior investment management experience with
Credit Lyonnais International Asset Management. B.A. Middlebury College;
also attended graduate programs at Taiwan University and Nanjing University
GLOBAL TECHNOLOGY AND GREATER CHINA

THOMAS BLEAKLEY, PARTNER
Portfolio Manager
Joined Firm in 1995; 3 years prior investment management experience with
Twentieth Century Investors and Dell Computer Corporation. M.B.A.
University of Texas. B.A. Boston University
SMALL CAP GROWTH AND MINI CAP GROWTH

WILLIAM H. CHENOWETH, CFA
Portfolio Manager
Joined firm in 1998; 12 years prior investment management experience with
Turner Investment Partners, Inc., and Jefferson-Pilot Corporation. M.B.A.
and B.B. A. Emory University
MID CAP GROWTH AND LARGE CAP GROWTH

<PAGE>

EMMY SOBIESKI, CFA
Portfolio Manager
Joined firm in 1998; 4 years prior investment experience with Farmers
Insurance Investment Division and EEN Business Network. M.B.A. University
of Southern California; B.A. University of San Diego
MID CAP GROWTH AND GLOBAL TECHNOLOGY

AARON HARRIS
Portfolio Manager
Joined firm in 1995; 1 year prior investment management experience at
Chemical Bank. B.A. Princeton University
SMALL CAP GROWTH, MINI CAP GROWTH AND GLOBAL TECHNOLOGY

PAUL E. CLUSKEY
Investment Analyst
Joined firm in 1998; 4 years prior investment experience at SEI Investments
and Piper Jaffray, Inc. B.S. New York University
MINI CAP GROWTH AND SMALL CAP GROWTH

SANDRA DURN
Portfolio Manager
Joined firm in 1994; prior experience at Science Solutions, Inc. and San
Diego State University Economics Department (instructor). M.A. San Diego
State University; B.A. University of Maryland
CONVERTIBLE, HIGH YIELD BOND AND GLOBAL GROWTH AND INCOME

JOHN C. MCCRAW
Portfolio Manager
Joined firm in 1992; prior investment management experience with Nations
Bank. M.B.A. University of California, Irvine; B.A. Flagler College
MINI CAP GROWTH AND SMALL CAP GROWTH

MARK STUCKELMAN
Portfolio Manager
Joined firm in 1995; 5 years experience with Wells Fargo Bank Investment
Management Group; Fidelity Management Trust Co.; and BARRA
M.B.A. University of Pennsylvania/Wharton School; B.A. University of
California, Berkeley
VALUE

THOMAS J. SULLIVAN
Portfolio Manager
Joined firm in 1994; 2 years prior investment experience with Donaldson,
Lufkin & Jenrette Securities Corp. B.S. Rochester Institute of Technology
MID CAP GROWTH AND LARGE CAP GROWTH

JAMES E. KELLERMAN, PARTNER
Portfolio Manager
Joined Firm in 1995; 20 years prior investment management experience with
Criterion Investment Management Company, Brown Brothers Harriman and
Equitable Life Insurance Company. M.B.A. St. John's University; B.B.A.
Susquehanna University
HIGH QUALITY BOND, HIGH YIELD BOND AND SHORT-INTERMEDIATE

<PAGE>

MALCOM S. DAY, CFA
Portfolio Manager
Joined Firm in 1995; 3 years prior investment management experience with
Payden & Rygel. M.B.A. University of California, Los Angeles; B.S. Northern
State University
HIGH QUALITY BOND, EMERGING MARKETS BOND AND GLOBAL GROWTH & INCOME

SUSAN MALONE
Portfolio Manager
Joined firm in 1996; 7 years prior investment management experience with
BEA Associates. M.B.A. New York University; B.S. Carnegie Mellon University
BALANCED GROWTH

RICHARD J. KING, CFA
Portfolio Manager
Joined firm in 1988; 8 years additional investment experience with Bear
Stearns Asset Management; The Public Employees Retirement System of Ohio;
and Touche Ross & Co. B.S. Ohio State University
HIGH QUALITY BOND FUND

Please omit references to John J. Kane, Global Technology; Robert Brewis,
Global Technology, Greater China and Pacific Rim; Yeo Boon Hong, Pacific
Rim and Global Technology; Reginald Tan, Pacific Rim and Global Technology;
Thomas J. Smith, Large Cap Growth; Alan J. Brochstein, Strategic Income.

THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION UNDER "PRIOR PERFORMANCE
OF CERTAIN FUNDS AND THEIR PREDECESSORS" ON PAGE 66 OF THE PROSPECTUS.

The Investment Adviser has advised the Trust that such partnerships were
operated with materially equivalent investment objectives, policies,
strategies and restrictions, as such Institutional Portfolios, and their
assets were transferred to such Portfolios prior to the effective date of
the Portfolios' registration statement.

THE FOLLOWING INFORMATION IS STRUCK UNDER "FOREIGN INVESTMENTS" ON PAGE 43 OF
THE STATEMENT OF ADDITIONAL INFORMATION.

Although the Global Blue Chip, Emerging Markets, Pacific Rim, Greater China
and Latin America Funds are authorized to invest more than 25% of their
total assets in securities of issuers located in any one country (other
than the U.S.) no Fund, except the Greater China Fund, currently intends to
do so.

PLEASE ADD THE FOLLOWING TO "ILLIQUID SECURITIES" ON PAGE 43 OF THE STATEMENT OF
ADDITIONAL INFORMATION.

The Fund's will limit their investment in 144A securities to 5% of net
assets.

<PAGE>

NICHOLAS | APPLEGATE-Registered Trademark- MUTUAL FUNDS

SUPPLEMENT TO PROSPECTUSES & STATEMENT OF ADDITIONAL INFORMATION

Class A, B and C Shares dated September 18, 1998

NOVEMBER 4, 1998

THE FOLLOWING INFORMATION IS ADDED TO "DISTRIBUTION PLAN AND SHAREHOLDER
SERVICES" SECTION ON PAGE 31 OF THE PROSPECTUS.

Class A shares may pay the Distributor a fee equal to 0.25% of the average
daily net assets, the Money Market Fund may pay up to 0.15% of average
daily net assets and the High Quality Bond Fund may pay up to .50% of
average daily net assets.

THE FOLLOWING INFORMATION REPLACE SIMILAR INFORMATION FOUND UNDER "PORTFOLIO
TRADES" ON PAGE 38 OF THE PROSPECTUS.

THE "PORTFOLIO TEAMS" SECTION BEGINNING ON PAGE 39 OF THE PROSPECTUS HAS BEEN
REVISED AS FOLLOWS:

<PAGE>

WILLIAM H. CHENOWETH, CFA
Portfolio Manager
Joined firm in 1998; 12 years prior investment experience with Turner
Investment Partners, Inc., and Jefferson-Pilot Corporation. M.B.A. and
B.B. A. Emory University
MID CAP GROWTH AND LARGE CAP GROWTH

PAUL E. CLUSKEY
Portfolio Manager
Joined firm in 1998; 4 years prior investment experience at SEI Investments
and Piper Jaffray, Inc. B.S. New York University
SMALL CAP GROWTH

EMMY SOBIESKI, CFA
Portfolio Manager
Joined Firm in 1998; 4 years prior investment experience with Farmers
Insurance Investment Division and EEN Business Network. M.B.A. University
of Southern California; B.A. University of San Diego
MID CAP GROWTH

SUSAN MALONE
Portfolio Manager
Joined firm in 1996; 7 years prior investment management experience with
BEA Associates. M.B.A. New York University; B.S. Carnegie Mellon University
BALANCED GROWTH

Please omit references to Michael P. Carroll, Convertible Fund; Claudia
Bengston, Money Market Fund; and Jan Friedli, High Yield Bond Fund.

PLEASE ADD THE FOLLOWING TO "ILLIQUID SECURITIES" SECTION ON PAGE 29 OF THE
STATEMENT OF ADDITIONAL INFORMATION.

The Fund's will limit their investment in 144A securities to 5% of net
assets.

<PAGE>
NICHOLAS | APPLEGATE-Registered Trademark- MUTUAL FUNDS

SUPPLEMENT TO PROSPECTUSES & STATEMENT OF ADDITIONAL INFORMATION

Advisory Shares dated July 24, 1998

NOVEMBER 4, 1998

THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION UNDER THE VALUE FUND'S
"INVESTMENT STRATEGY" AND "PRINCIPAL INVESTMENTS" SECTIONS ON PAGE 16 OF THE
PROSPECTUS.

INVESTMENT STRATEGY

The Fund emphasizes equity securities of undervalued, large U.S. companies
with market capitalizations generally above $5 billion.

PRINCIPAL INVESTMENTS

Under normal conditions, the Fund invests at least 80% of its total assets
in equity securities of U.S. companies with large capitalizations.
Generally, large capitalization stocks are those with market
capitalizations greater than $3 billion. It invests the remainder primarily
in preferred and convertible securities, debt securities of any maturity
which are rated investment grade by a nationally recognized statistical
rating agency, or of comparable quality if unrated, and securities issued
by the U.S. Government and its agencies and instrumentalities. The Fund may
also use options and futures contracts as hedging techniques.

THE FOLLOWING INFORMATION REPLACES INFORMATION UNDER THE HIGH QUALITY BOND
FUND'S "PRINCIPAL INVESTMENTS" ON PAGE 26 OF THE PROSPECTUS.

THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION UNDER "SELLING AND
REDEEMING SHARES" ON PAGE 31 OF THE PROSPECTUS.

If you bought shares recently by check, payment may be delayed until the
check clears, which may take up to 15 calendar days from the date of
purchase.

THE FOLLOWING INFORMATION IS ADDED TO "SHAREHOLDER SERVICES" ON PAGE 34 OF THE
PROSPECTUS.

Each Fund (except the Mini Cap Fund) has adopted a shareholder services
plan under which it will reimburse the Distributor up to .25% of the
average daily assets to pay financial institutions for personal services
for shareholders and maintenance of shareholder accounts. The Distributor
may pay from its own resources up to .25% to financial institutions that
provide the same type of services to shareholders of the Mini Cap Fund.

<PAGE>

THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION UNDER "PORTFOLIO TRADES"
ON PAGE 34 OF THE PROSPECTUS.

THE "PORTFOLIO TEAMS" SECTION BEGINNING ON PAGE 35 OF THE PROSPECTUS HAS BEEN
REVISED AS FOLLOWS:

CATHERINE SOMHEGYI, PARTNER
Chief Investment Officer--Global Equity Management
Joined firm in 1987; prior investment management experience with
Professional Asset Securities, Inc. and Pacific Century Advisers. M.B.A.
and B.S. University of Southern California
SMALL CAP GROWTH, MINI CAP GROWTH, BALANCED GROWTH, MID CAP GROWTH, VALUE
AND CONVERTIBLE

<PAGE>

PAUL E. CLUSKEY
Portfolio Manager
Joined firm in 1998; 4 years prior investment experience at SEI Investments
and Piper Jaffray, Inc. B.S. New York University
SMALL CAP GROWTH

SANDRA DURN
Portfolio Manager
Joined Firm in 1994; prior experience at Science Solutions, Inc. and San
Diego State University Economics Department (instructor). M.A. San Diego
State University; B.A. University of Maryland
CONVERTIBLE AND HIGH YIELD BOND

SUSAN MALONE
Portfolio Manager
Joined firm in 1996; 7 years prior investment management experience with
BEA Associates. M.B.A. New York University; B.S. Carnegie Mellon University
BALANCED GROWTH

Please omit references to Thomas J. Smith, Large Cap Growth Fund; Aaron
Harris, Emerging Countries Fund; and Jan Friedli, High Yield Bond Fund.

THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION UNDER "PRIOR PERFORMANCE
OF CERTAIN FUNDS AND THEIR PREDECESSORS" ON PAGE 45 OF THE PROSPECTUS.

The Investment Adviser has advised the Trust that such partnerships were
operated with materially equivalent investment objectives, policies,
strategies and restrictions, as such

<PAGE>

Institutional Portfolios, and their assets were transferred to such
Portfolios prior to the effective date of the Portfolios' registration
statement.

PLEASE ADD THE FOLLOWING INFORMATION TO "ILLIQUID SECURITIES" SECTION ON PAGE 25
OF THE STATEMENT OF ADDITIONAL INFORMATION.

The Fund's will limit their investment in 144A securities to 5% of net
assets.