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QUESTIONS?
Call 800-258-9232 or your
investment representative.
[PACIFIC CAPITAL FUNDS LOGO]
Managed by
Pacific Century Trust
a Division of
Bank of Hawaii
December 1, 1998
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International Stock Fund
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Class A and Class B
Retail Shares
The Securities and Exchange Commission has
not approved the shares described in this
prospectus or determined whether this prospectus
is accurate or complete. Anyone who tells you
otherwise is committing a crime.
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PACIFIC CAPITAL FUNDS TABLE OF CONTENTS
<TABLE>
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RISK/RETURN SUMMARY AND FUND EXPENSES
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Carefully review this 3 International Stock Fund
important section, which
summarizes each Fund's
investments, risks, past
performance, and fees.
INVESTMENT OBJECTIVES, POLICIES AND RISKS
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Review this section for 6 International Stock Fund
details on each Fund's 6 Main Risks
investment strategies and
risks.
FUND MANAGEMENT
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Review this section for 9 The Investment Adviser
details on the people and 9 The Sub-Adviser
organizations who oversee 9 Portfolio Managers
the Funds. 9 The Distributor and Administrator
SHAREHOLDER INFORMATION
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Review this section for 10 Pricing of Fund Shares
details on how shares are 11 Purchasing and Adding to Your Shares
valued, how to purchase, 14 Selling Your Shares
sell and exchange shares, 17 Distribution Arrangements/Sales Charges
related charges, and 22 Exchanging Your Shares
payments of dividends and 23 Dividends, Distributions and Taxes
distributions.
</TABLE>
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RISK/RETURN SUMMARY AND FUND EXPENSES INTERNATIONAL STOCK
FUND
RISK/RETURN SUMMARY
<TABLE>
<S> <C>
INVESTMENT OBJECTIVE - Long term capital appreciation
PRINCIPAL The Fund invests primarily in common and preferred stocks of
INVESTMENT STRATEGIES foreign companies and securities that are convertible into
common stocks. The Fund may invest in these securities
directly, or indirectly through other investment companies
or trusts. The Fund does not limit its investments to any
particular type or size of company or to any region of the
world. The Fund focuses on companies whose earnings the Sub
Adviser expects to grow or whose share price it believes is
undervalued.
PRINCIPAL Because the value of the Fund's investments will fluctuate
INVESTMENT RISKS with market conditions, so will the value of your investment
in the Fund. You could lose money on your investment in the
Fund, or the Fund could underperform other investments.
The values of the Fund's investments fluctuate in response
to the activities of individual companies and general stock
market and economic conditions. Stock prices of smaller and
newer companies fluctuate more than larger more established
companies. In addition, the performance of foreign
securities depends on different political and economic
environments and other overall economic conditions in the
countries where the Fund invests. Emerging country markets
involve greater risk and volatility than more developed
markets. The values of the Fund's convertible securities are
also affected by interest rates; if rates rise, the values
of convertible securities may fall.
WHO MAY Consider investing in the Fund if you:
WANT TO INVEST? - want potential capital appreciation and are willing to
accept the higher risks associated with investing in
foreign stocks
- are investing for long-term goals
- want professional portfolio management
This Fund is not appropriate for anyone seeking:
- safety of principal
- a short term investment
- regular income
An investment in the Fund is not a bank deposit and is not
insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
</TABLE>
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RISK/RETURN SUMMARY AND FUND EXPENSES INTERNATIONAL STOCK FUND
FEES AND EXPENSES
<TABLE>
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SHAREHOLDER TRANSACTION EXPENSES
(EXPENSES PAID BY YOU DIRECTLY) A SHARES B SHARES
Maximum sales charge (load) on
purchases (as a % of offering
price) 5.25%(1,4) None(4)
Maximum deferred sales charge
(load) None(2) 5.00%(3)
ANNUAL FUND OPERATING EXPENSES
(FEES PAID FROM FUND ASSETS) A SHARES B SHARES
Management fee(*) 1.10% 1.10%
Distribution (12b-1) fee 0.75%(*) 1.00%
Other expenses(*) 0.97% 0.97%
Total Fund operating expenses(*) 2.82% 3.07%
</TABLE>
* The Adviser is currently limiting the
Management fee to 1.00%, the Distributor is
limiting the 12b-1 fee for Class A shares
to 0.25% and the Administrator is waiving a
portion of the Administration fee so that
Other expenses are expected to be 0.93%.
TOTAL FUND OPERATING EXPENSES AFTER THESE
FEE WAIVERS ARE EXPECTED TO BE 2.18% AND
2.93% FOR CLASS A AND B SHARES,
RESPECTIVELY. In addition, the Adviser has
agreed to limit expenses so that Total Fund
operating expenses will not exceed 2.22%
and 2.97% for A and B shares, respectively.
These expense limitations may be revised or
canceled at any time.
As an investor in the
International Stock Fund,
you will pay the following
fees and expenses.
Shareholder transaction
fees are paid from your
account. Annual Fund
operating expenses are
paid out of Fund assets,
and are reflected in the
share price. If you
purchase shares through a
broker or other investment
representative, including
an affiliate of Pacific
Century, they may charge
you an account-level fee
for additional services
provided to you in
connection with your
investment in the Fund.
CONTINGENT DEFERRED
SALES CHARGE
Class B shares impose a
back end sales charge
(load) if you sell your
shares before a certain
period of time has
elapsed. This is called a
Contingent Deferred Sales
Charge ("CDSC").
(1) Lower sales charges are available depending upon the amount invested.
(2) For investments of $1 million or more, a Contingent Deferred Sales Charge
is applicable to redemptions within one year of purchase.
(3) A Contingent Deferred Sales Charge applies to your redemption of Class B
shares before the sixth anniversary of your purchase, declining from 5%
within the first year to 0% after the sixth year.
(4) Long-term shareholders may pay indirectly more than the equivalent of the
maximum permitted front-end sales charge due to the recurring nature of 12b-1
fees.
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RISK/RETURN SUMMARY AND FUND EXPENSES INTERNATIONAL STOCK FUND
EXPENSE EXAMPLE
<TABLE>
<S> <C> <C>
1 3
YEAR YEARS
CLASS A SHARES $795 $1,353
CLASS B SHARES
Assuming redemption $810 $1,248
Assuming no redemption $310 $ 948
</TABLE>
After approximately eight years, Class B
shares will automatically convert to Class
A shares.
Use this table to compare
fees and expenses of the Fund
with those of other funds. It
illustrates the amount of
fees and expenses you would
pay assuming the following:
- $10,000 investment in the
Fund
- 5% annual return
- no changes in the Fund's
operating expenses
Because this example is
hypothetical and for
comparison only, your actual
costs will be different.
PERFORMANCE INFORMATION
This is a new Fund for which
performance information is
not yet available.
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INVESTMENT OBJECTIVES, POLICIES AND RISKS
INTERNATIONAL STOCK FUND
The International Stock Fund seeks to make your investment grow over the long
term.
Normally, the Fund invests at least 65% of its total assets in common stocks,
common stock equivalents (such as preferred or debt securities convertible
into common stock), and preferred stocks of foreign companies. The Fund
invests in these securities directly, or indirectly through other investment
companies or trusts that invest the majority of their assets in foreign
companies.
The Fund does not limit its investments to any particular country or type or
size of company. It may invest in companies, large or small, whose earnings
its investment adviser believe have a relatively strong growth trend, or in
companies that it does not anticipate to grow but whose market value per
share it believes is undervalued. In selecting and maintaining a portfolio of
investments in any country, the Fund's investment adviser considers the
investment instruments traded in the country's stock markets and the upside
potential of such markets (including the economic, political and social
factors affecting each country and the prospects for improvements in these
factors in the short, medium and long term). The Fund does not give important
consideration to current income from dividends and interest in selecting
portfolio securities.
The Fund may invest to a lesser degree in investment grade debt securities
and other instruments if Pacific Century or its Sub-Adviser believes they
would help achieve the Fund's objective. The Fund may also invest up to 35%
of its total assets in any combination of equity, investment grade debt and
convertible securities of issuers located in the United States, and can use
futures contracts, options and other investment techniques for the purpose of
cash flow management and/or risk reduction.
selecting preferred stocks, bonds and convertible securities, it also
considers companies' strong earnings and credit records and their ability to
provide current income.
MAIN RISKS
The value of your investment in the Fund will go up and down, which means
that you could lose money. You should consider an investment in the Fund as a
long-term investment.
STOCKS. The values of stocks fluctuate in response to the activities of
individual companies and general stock market and economic conditions, and
stock prices may decline over short or even extended periods. Stocks are more
volatile and riskier than some other forms of investment, such as short-term
high-grade fixed income securities.
SMALL COMPANIES. Securities of smaller and newer companies may present
greater opportunities than larger and more established companies for capital
appreciation because of high potential earnings growth. But they also may
involve greater risk. Such companies may have limited product lines, markets
or financial resources, or may depend on a small group of key managers. Their
securities may trade less frequently or in limited volume, or only in the
over-the-counter market or on a regional stock exchange. As a result, these
securities may fluctuate in value more than those of larger, more established
companies and, as a group, may suffer more severe price declines during
periods of generally declining stock prices.
FOREIGN SECURITIES. Investments in foreign securities involve risks that are
not typically associated with domestic securities. Changes in foreign
currency exchange rates will affect the values of investments quoted or
payable in currencies other than the U.S. dollar. Less information may be
publicly available
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INVESTMENT OBJECTIVES, POLICIES AND RISKS
about foreign issuers. They also are not generally subject to the same
accounting, auditing and financial reporting standards as domestic issuers.
Foreign stock markets have different clearance and settlement procedures, and
higher brokerage commissions and transaction costs, than U.S. markets. In
addition, foreign exchanges, brokers and issuers generally are not supervised
or regulated as closely as in the United States. Furthermore, foreign income
tax laws may require withholding of interest, gains or dividends. Certain
other adverse developments could also occur, such as expropriation or
confiscatory taxation, political or social instability, or diplomatic
developments that could adversely affect investments and the ability to
enforce contracts.
EMERGING MARKETS. The securities markets of developing countries involve
greater risks than more developed markets. These securities markets are not
as large as U.S. markets, have substantially less trading volume, and have a
high concentration of investors and financial intermediaries, resulting in a
lack of liquidity and high price volatility.
Substantial economic uncertainties exist for developing countries. They may
have overburdened infrastructures and obsolete financial systems as well as
environmental problems. Certain economies depend on exports of primary
commodities and are vulnerable to changes in commodity prices, which in turn
may be affected by a variety of factors. In addition, the governments of many
such countries have a heavy role in regulating and supervising their
economies, and their economies are heavily export oriented and dependent on
international trade. Certain developing countries are large debtors to
commercial banks and foreign governments. Some have experienced substantial
and volatile rates of inflation and currency devaluations.
Substantial social and political uncertainties also exist for many developing
countries. These may result from factors such as authoritarian governments;
popular unrest associated with demands for improved political, economic and
social conditions; internal insurgencies and hostile relationships with
neighboring countries. This instability could impair the financial conditions
of issuers or disrupt their financial markets.
A number of Asian countries are currently experiencing economic difficulties
and significant declines in values in their financial markets as a result of
the convergence of a number of these social, political and economic factors.
The unsettled condition of several Asian financial markets has also affected
emerging markets in other countries and regions. These conditions could
continue or deteriorate further in the future.
A variety of other factors may also adversely impact the Funds' investments
in countries with emerging securities markets. These include matters such as
archaic legal systems; inflation accounting rules that indirectly generate
losses or profits; less developed systems for registration, transfer and
custody of securities; restrictions on foreign investments in capital
markets; limitations on the manner in which the Funds may invest in
securities; and limitations on repatriation of income, capital, or the
proceeds of sales of securities.
CONVERTIBLE SECURITIES. The Fund may purchase convertible securities that are
fixed-income debt securities or preferred stocks, and which may be converted
at a stated price within a specified period of time into a certain quantity
of common stock of the same or other issuers. Convertible securities are
usually subordinated in right of payment to nonconvertible debt securities of
the same issuer, but are senior to common stocks in an issuer's capital
structure. Their prices tend to be influenced by changes in interest rates
(in the same manner as described below for debt securities) as well as
changes in the market value of the common stock into which they can be
converted.
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INVESTMENT OBJECTIVES, POLICIES AND RISKS
DEBT SECURITIES. The values of the debt securities held by the Fund fluctuate
in response to movements in interest rates. When rates rise, the values
generally fall, and when rates decline, the values generally increase. In
addition, the issuers of any of the debt securities held by the Fund may fail
to pay interest or principal when due.
The Fund generally will only acquire bonds that are rated investment grade at
the time of purchase, which means they are rated in one of the top four
categories by a nationally recognized statistical rating organization, or
unrated obligations that Pacific Century or its Sub-Adviser determines are
comparable. However, obligations with the lowest of these ratings have some
speculative characteristics, and changes in economic conditions are more
likely to lead to the issuer's weakened capacity to make principal and
interest payments than higher rated securities. If the rating of a security
decreases after the Fund buys it, or it is no longer rated, Pacific Century
or its Sub-Adviser will decide whether the Fund should continue to hold the
security.
The International Stock Fund may invest up to 10% of its net assets in
securities rated below investment grade or of comparable quality, commonly
referred to as "junk bonds" or "high yield/high risk securities." These
investments are predominantly speculative with respect to the issuer's
capacity to pay interest and repay principal as required, and generally are
less liquid and have greater price volatility than higher rated securities.
The Fund may not purchase debt securities that are in default, except that it
can invest up to 5% of its total assets in sovereign (government) debt that
is in default.
YEAR 2000 AND THE PACIFIC CAPITAL FUNDS. Like other funds and business
organizations around the world, the Fund could be adversely affected if the
computer systems used by Pacific Century and the Fund's other service
providers do not properly process date-related information for the year 2000
and beyond. The Fund understands that key service providers are taking steps
to address this issue. In addition, the problem may adversely affect the
companies and other issuers in which the Fund invests. For example, they may
incur substantial costs to correct the problem and may suffer losses caused
by data processing errors. Management of the Fund and Pacific Century will
continue to monitor developments relating to this issue.
The most recent information about the Fund's portfolio holdings can be found
in its annual or semi-annual report. For information about receiving this
report, see the back cover.
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FUND MANAGEMENT
THE INVESTMENT ADVISER
Pacific Century Trust, ("Pacific Century"), 111 S. King Street, Honolulu,
Hawaii 96813, a division of Bank of Hawaii, is the adviser for the Fund.
Pacific Century has managed the financial assets of corporations and
institutional investors for more than a century. Pacific Century, formerly
known as Hawaiian Trust Company, is among the top 50 trust firms in the
United States based on assets under management and oversees more than $14
billion in client assets. The Pacific Century investment management
team -- including portfolio managers, financial analysts and economists -- is
responsible for over $8 billion of these assets.
THE SUB-ADVISER
Nicholas-Applegate Capital Management, 600 W. Broadway, San Diego, California
92101, is the Sub-Adviser to the International Stock Fund and provides
investment advisory services with respect to the management of the Fund's
portfolio. Its fees are paid by Pacific Century.
PORTFOLIO MANAGERS
Management of the Fund is coordinated by Pacific Century's investment unit,
which is staffed with more than 40 people, including seven Chartered
Financial Analysts and nine M.B.A.'s. All investment decisions of Pacific
Century with respect to the Fund are made by a committee.
INTERNATIONAL STOCK FUND. A team headed by Catherine Somhegyi, Larry Speidell
Loretta Morris, Alexander Muromcew, Melisa Grigolite and John Tribolet is
responsible for the day-to-day management of the Fund. Ms. Somhegyi, a
Partner of Nicholas-Applegate Capital Management, is its Chief Investment
Officer for Global Equity Management and has managed assets for clients of
the firm since 1987. Mr. Speidell, a Partner of Nicholas-Applegate Capital
Management, has been Director of Global/Systematic Portfolio Management and
Research since 1994; he has 23 years prior investment management experience
with Batterymarch Financial Management and Putnam Management Company. Ms.
Morris, a Partner of Nicholas-Applegate Capital Management, focuses on the
management of international and global portfolios. She has managed assets for
clients of the firm since 1990 and has 18 years investment experience. Mr.
Muromcew is a Portfolio Manager on the Global/Systematic International team.
Prior to joining Nicholas-Applegate in 1996, Mr. Muromcew was an analyst with
Teton Partners, L.P., Emerging Markets Investors Corp. and Jardine Fleming
Securities. He has eight years of investment experience. Ms. Grigolite is a
Portfolio Manager responsible for international and global portfolio
management and research. She joined the firm in 1991 and has seven years
investment experience. Mr. Tribolet is a Portfolio Manager responsible for
portfolio management and research for international portfolios. Mr. Tribolet
joined the firm in 1997 and has four years prior investment banking
experience with Paine Webber and Kemper Securities. He has six years of
investment experience.
THE DISTRIBUTOR AND ADMINISTRATOR
BISYS Fund Services ("BISYS") is the Fund's distributor and BISYS Fund
Services Ohio, Inc. is the Fund's administrator. The address of each is 3435
Stelzer Road, Columbus, Ohio 43219.
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SHAREHOLDER INFORMATION
PRICING OF FUND SHARES
---------------------------
HOW NAV IS CALCULATED
NAV is calculated by adding
the total value of the
Fund's investments and
other assets attributable
to Class A or B shares,
subtracting its liabilities
attributable to Class A or
B shares, and then dividing
that figure by the number
of outstanding Class A or B
shares of the Fund:
NAV =
Total Assets - Liabilities
--------------------------
Number of Shares
Outstanding
Locate your Fund's NAV
daily in The Wall Street
Journal and other
newspapers or call
800-258-9232 for
information.
---------------------------
The price of the Fund's shares is
based on its per share net asset value
("NAV"). The NAV for Class A and B
shares of the Fund is determined and
its shares are priced at the close of
regular trading on the New York Stock
Exchange (normally at 4 p.m. Eastern
time) on days the Exchange is open.
Your order will be priced at the next
NAV calculated after your order is
accepted by the Fund (plus any
applicable sales charge).
The Fund's securities are valued at
current market prices except for debt
obligations with remaining maturities
of 60 days or less (which are valued
at amortized cost). If market
quotations are not available,
securities will be valued by a method
that the Board of Trustees believes
accurately reflects fair value.
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SHAREHOLDER INFORMATION
PURCHASING AND ADDING TO YOUR SHARES
<TABLE>
<CAPTION>
MINIMUM INVESTMENTS INITIAL INVESTMENT SUBSEQUENT
<S> <C> <C>
Regular
(non-retirement) $1,000 $50
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Retirement (IRA) $250 $50
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Auto Invest Plan $100 $50
</TABLE>
All purchases must be in U.S. dollars. A
fee will be charged for any checks that do
not clear. Third-party checks are not
accepted.
The Fund may waive its minimum purchase
requirement, and the Distributor may reject
a purchase order, if the Distributor
decides this is in the best interest of the
Fund's shareholders. The Fund reserves the
right to suspend or modify the continuous
offering of its shares.
You can purchase the
Fund through the Pacific
Capital Funds'
Distributor or through
brokers and other
investment
representatives,
including an affiliate
of Pacific Century,
which may charge
additional fees and may
require higher minimum
investments or impose
other limitations on
buying and selling
shares. If you purchase
shares through an
investment
representative, it is
responsible for
transmitting orders to
the Distributor by the
Fund's close of business
and may have an earlier
cut-off time for
purchase and sale
requests. Consult your
investment
representative or
institution for specific
information.
-----------------------------------------------------------------------------
AVOID 31% TAX WITHHOLDING
The Fund must withhold 31% of your taxable dividends, capital gains
distributions and redemptions if you have not provided the Fund your taxpayer
identification number in compliance with IRS rules. To avoid this, make sure
you provide your correct tax identification number (social security number
for most investors) on your account application.
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SHAREHOLDER INFORMATION
PURCHASING AND ADDING TO YOUR SHARES
CONTINUED
INSTRUCTIONS FOR OPENING OR
ADDING TO AN ACCOUNT
BY REGULAR MAIL
Initial Investment:
If purchasing through your financial advisor or brokerage account, simply
tell your adviser or broker that you wish to purchase shares of the Fund and
he or she will take care of the necessary documentation. For all other
purchases follow the instructions below.
1. Carefully read, complete and sign the account application. Establishing
your account privileges now saves you the inconvenience of having to add
them later.
2. Make check, bank draft or money order payable to "Pacific Capital Funds"
and include the name of the Fund on the check.
3. Mail to: Pacific Capital Funds, PO Box 182130, Columbus, OH 43218-2130
Subsequent Investments:
1. Use the investment slip attached to your account statement.
Or, if unavailable,
2. Include the following information on a piece of paper:
- Fund name
- Share class
- Amount invested
- Account name
- Account number
Include your account number on your check.
3. Mail investment slip and check to: Pacific Capital Funds,
PO Box 182130, Columbus, OH 43218-2130
BY OVERNIGHT SERVICE
See instructions 1-2 above.
3. Send to: Pacific Capital Funds,
c/o BISYS Fund Services,
Attn: T.A. Operations, 3435 Stelzer Road, Columbus, OH 43219.
BY ELECTRONIC PURCHASE
Your bank must participate in the Automated Clearing House (ACH) and must be
a U.S. bank. Your bank or broker may charge for this service.
Establish the electronic purchase option on your account application or call
800-258-9232. Your account can generally be set up for electronic purchases
within 15 days.
Call 800-258-9232 to arrange a transfer from your bank account.
ELECTRONIC VS. WIRE
TRANSFER
Wire transfers allow
financial institutions to
send funds to each other,
almost instantaneously.
With an electronic
purchase or sale, the
transaction is made
through the Automated
Clearing House (ACH),
which may take up to
eight days to clear.
There is generally no fee
for ACH transactions.
QUESTIONS?
Call 800-258-9232 or
your investment
representative.
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SHAREHOLDER INFORMATION
PURCHASING AND ADDING TO YOUR SHARES
CONTINUED
BY WIRE TRANSFER
Please call 800-258-9232 for a confirmation number and instructions for
returning your completed application. Follow the instructions below after
receiving your confirmation number.
For initial and subsequent investments:
Instruct your bank to wire transfer your investment to:
Huntington National Bank
Routing Number: ABA #044000024
DDA #01891797644
Include:
Your name
Your confirmation number, your account number and the name of the Fund.
AFTER INSTRUCTING YOUR BANK TO WIRE THE FUNDS, CALL 800-258-9232 TO TELL US
THE AMOUNT BEING TRANSFERRED AND THE NAME OF YOUR BANK.
AUTO INVEST PLAN
You can make automatic investments in the Fund from your bank account,
through payroll deduction, or from your federal employment, social security
or other regular government checks. Automatic investments can be as little as
$50, once you've invested the $100 minimum required to open the account.
To invest regularly from your bank account:
1) Complete the Auto Invest Plan portion of your Account Application. Make
sure you note:
J your bank name, address, and account number
J the amount you want to invest automatically (minimum $50)
J how often you want to invest (monthly or quarterly)
2) Attach a voided personal check.
To invest regularly from your pay check or government check:
Call 800-258-9232 for an enrollment form.
The Fund reserves the right to change or eliminate these privileges at any
time with 60 days notice. The Fund also reserves the right to reject any
purchase or to suspend or modify the continuous offering of its shares.
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SHAREHOLDER INFORMATION
SELLING YOUR SHARES
INSTRUCTIONS FOR SELLING SHARES
WITHDRAWING MONEY FROM YOUR FUND INVESTMENT
As a mutual fund shareholder, you are
technically selling shares when you request
a withdrawal in cash. This is also known as
redeeming shares or a redemption of shares.
CONTINGENT DEFERRED SALES CHARGE
When you sell Class B shares, you will be
charged a fee for any shares that have not
been held for a sufficient length of time.
(You will also pay a fee for Class A shares
sold within one year of a purchase of $1
million or more.) These fees will be deducted
from the money paid to you. See the section
on "Distribution Arrangements/Sales Charges"
below for details.
You can sell your shares
at any time. Your sales
price will be the next NAV
after your sell order is
received by the Fund or
your investment
representative. Normally
you will receive your
proceeds within a week
after your request is
received.
If selling shares through your financial adviser or broker, ask him or her
for redemption procedures. Your adviser and/or broker may have transaction
minimums and/or transaction times which will affect your redemption. For all
other sales transactions, follow the instructions below.
BY TELEPHONE (UNLESS YOU HAVE DECLINED TELEPHONE SALES PRIVILEGES)
Call 800-258-9232 with instructions as to how you want to receive your funds
(mail, wire, electronic transfer). See "General Policies on Selling Shares"
below.
BY MAIL (SEE "GENERAL POLICIES ON SELLING SHARES -- REDEMPTIONS IN WRITING
REQUIRED" BELOW.)
1. Call 800-258-9232 to request redemption forms, or write a letter of
instruction indicating:
- your Fund and account number
- amount you want to redeem
- address where your check should be sent
- account owner signature
2. Mail to: Pacific Capital Funds, PO Box 182130, Columbus, OH 43218-2130
BY OVERNIGHT SERVICE
1. See instruction 1 above.
2. Send to: Pacific Capital Funds, c/o BISYS Fund Services, Attn: T.A.
Operations, 3435 Stelzer Road, Columbus, OH 43219
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SHAREHOLDER INFORMATION
SELLING YOUR SHARES
CONTINUED
WIRE TRANSFER
You must select this option on your account application
The Fund may charge a wire transfer fee. Note: Your financial institution may
also charge a separate fee.
Call 800-258-9232 to request a wire transfer. If you call by 4 p.m. Eastern
time, your payment will normally be wired to your bank on the next business
day. Otherwise, it will normally be wired on the second business day after
your call.
ELECTRONIC REDEMPTIONS
Your bank must participate in the Automated Clearing House (ACH) and must be
a U.S. bank.
Note: Your bank may charge for this service.
Call 800-258-9232 to request an electronic redemption.
If you call by 4 p.m. Eastern time, the NAV of your shares will normally be
determined on the same day and the proceeds will normally be credited within
8 days. Otherwise, it will normally take up to 9 days.
AUTO WITHDRAWAL PLAN
You can receive automatic payments from your Class A shares account on a
monthly or quarterly basis. The minimum withdrawal is $100. To activate this
feature:
- Make sure you've checked the appropriate box on the account application.
Or call 800-258-9232.
- Include a voided personal check.
- Your account must have a value of $5,000 or more to start withdrawals.
- If the value of your account falls below $1,000, you may be asked to
invest more to bring the account back to $1,000, or we may close your
account and mail the proceeds to you.
QUESTIONS?
Call 800-258-9232 or
your investment
representative.
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SHAREHOLDER INFORMATION
GENERAL POLICIES ON SELLING SHARES
REDEMPTIONS IN
WRITING REQUIRED
You must request redemption in writing in the following situations:
1. All requests for redemptions from individual retirement accounts ("IRAs")
must be in writing.
2. Redemption requests require a signature guarantee when:
- You ask us to make the check payable to someone who is not the owner of
the account
- You ask us to mail the check to an address that is not the address on
your account
- You ask us to wire the proceeds to a commercial bank account that is not
designated on your account application
- The redemption proceeds exceed $50,000
You must obtain a signature guarantee from members of the STAMP (Securities
Transfer Agents Medallion Program), MSP (New York Stock Exchange Medallion
Signature Program) or SEMP (Stock Exchanges Medallion Program). Members are
subject to dollar limitations which must be considered when requesting their
guarantee. The Transfer Agent may reject any signature guarantee if it
believes the transaction would otherwise be improper.
TELEPHONE REDEMPTIONS
The Fund makes every effort to insure that telephone redemptions are only
made by authorized shareholders. All telephone calls are recorded for your
protection and you will be asked for information to verify your identity.
Because of these precautions, unless you have specifically indicated on your
application that you do not want the telephone redemption feature, you may be
responsible for any fraudulent telephone orders. If appropriate precautions
have not been taken, the Fund, the Transfer Agent, Pacific Century and/or the
Distributor may be liable for losses due to unauthorized transactions.
At times of peak activity, it may be difficult to place requests by phone.
During these times, consider sending your request in writing.
REDEMPTIONS WITHIN 15 DAYS OF INITIAL INVESTMENT
When you have made an investment by check, you cannot receive any portion of
the redemption proceeds on the same investment until the Transfer Agent is
satisfied that the check has cleared (which may require up to 15 business
days). You can avoid this delay by purchasing shares with a certified check.
REFUSAL OF REDEMPTION REQUEST
Payment for shares may be delayed under extraordinary circumstances or as
permitted by the Securities and Exchange Commission ("SEC") in order to
protect remaining shareholders.
REDEMPTION IN KIND
We reserve the right to make your redemption payment in securities rather
than cash, known as "redemption in kind." This could occur under
extraordinary circumstances, such as a very large redemption that could
affect the Fund's operations (for example, more than 1% of the Fund's net
assets). If we deem it advisable for the benefit of all shareholders, you
will receive securities equal in market value to your redemption price, net
of any CDSC. When you convert these securities to cash, you will pay
brokerage charges.
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<PAGE> 17
SHAREHOLDER INFORMATION
GENERAL POLICIES ON SELLING SHARES
CONTINUED
CLOSING OF SMALL ACCOUNTS
If your account falls below $250, we may ask you to increase your balance to
the minimum investment amount. If it is still below $250 after 60 days, we
may close your account and send you the proceeds at the current NAV.
UNDELIVERABLE REDEMPTION CHECKS
If you choose to receive distributions in cash and distribution checks are
returned and marked as "undeliverable" or remain uncashed for six months,
your account will be changed automatically so that all future distributions
are reinvested in your account. Checks that remain uncashed for six months
will be canceled and the money reinvested in the Fund. No interest is paid
during the time the check is outstanding.
DISTRIBUTION ARRANGEMENTS/SALES CHARGES
This section describes the sales charges and fees you will pay as an investor
in different share classes offered by the Fund and ways to qualify for
reduced sales charges. Certain qualified institutional buyers are eligible to
purchase Class Y shares of the Fund. Class Y shares are offered by another
prospectus which is available by calling 800-258-9232.
<TABLE>
<S> <C> <C>
TYPES OF CHARGES CLASS A CLASS B
Sales Charge (Load) Front-end sales charge (at the No front-end sales charge. You may
time of your purchase); reduced incur a contingent deferred sales
sales charges are available.(1) charge on shares redeemed within
six years after purchase; shares
automatically convert to Class A
shares after 8 years.
Distribution (12b-1) Fees Subject to annual distribution Subject to annual distribution
fees of up to .75% of the Fund's fees of up to 1.00% of the Fund's
net assets. net assets.
Fund Expenses Lower annual expenses then Class B Higher annual expenses than Class
shares. A shares.
</TABLE>
(1) You may incur a contingent deferred sales charge on shares sold within
one year of a purchase of $1 million or more.
QUESTIONS?
Call 800-258-9232 or
your investment
representative.
17
<PAGE> 18
SHAREHOLDER INFORMATION
DISTRIBUTION ARRANGEMENTS/SALES CHARGES
CONTINUED
CALCULATION OF SALES CHARGE
CLASS A SHARES
The Distributor sells Class A shares at their public offering price. This
price includes the initial sales charge. Therefore, part of the money you pay
for shares will be used to pay the sales charge. The remainder is invested in
Fund shares. The sales charge decreases with larger purchases. There is no
sales charge on reinvested dividends and distributions.
The current sales charge rates and commissions paid to investment
representatives are as follows:
FOR THE INTERNATIONAL STOCK FUND
<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE DEALER PAYMENT
YOUR AS A % OF AS A % OF AS A % OF
INVESTMENT OFFERING PRICE YOUR INVESTMENT OFFERING PRICE
<S> <C> <C> <C>
Up to $25,000 5.25% 5.54% 4.73%
----------------------------------------------------------------------------------
$25,000 up to $50,000 4.75% 4.99% 4.28%
----------------------------------------------------------------------------------
$50,000 up to $100,000 4.25% 4.44% 3.83%
----------------------------------------------------------------------------------
$100,000 up to $250,000 3.75% 3.90% 3.38%
----------------------------------------------------------------------------------
$250,000 up to $500,000 3.25% 3.36% 2.93%
----------------------------------------------------------------------------------
$500,000 up to $1,000,000 2.75% 2.83% 2.48%
----------------------------------------------------------------------------------
$1,000,000 and above(1) 0.00% 0.00% 0.00%
</TABLE>
(1) You will pay a contingent deferred sales charge (CDSC) on these shares of
up to 1.00% of the purchase price if you redeem them in the first year after
purchase. The Distributor will base this charge on the lower of your cost for
the shares or their NAV at the time of sale. The CDSC does not apply to
reinvested distributions.
The Distributor pays securities dealers from its own resources up to 1.00% of
the offering price of Class A shares of the Fund for individual sales of $1
million to $5 million and 0.50% of the offering price of Class A shares of
the Fund for individual sales over $5 million.
The Distributor reserves the right to pay the entire sales charge to dealers.
In addition to the compensation paid to investment representatives, the
Distributor may provide promotional incentives in the form of travel
expenses, lodging and bonuses to licensed individuals who sell shares of the
Fund, as well as vacation trips (including lodging at luxury resorts),
tickets to entertainment events and merchandise. In some instances, the
Distributor will make this compensation available only to certain dealers
whose representatives have sold a significant amount of such shares. Neither
the Fund nor its shareholders pay this promotional compensation.
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<PAGE> 19
SHAREHOLDER INFORMATION
DISTRIBUTION ARRANGEMENTS/SALES CHARGES
CONTINUED
<TABLE>
<CAPTION>
YEARS CDSC AS A % OF
SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
<S> <C>
0-1 5.00%
1-2 4.00%
2-3 3.00%
3-4 3.00%
4-5 2.00%
5-6 1.00%
more than 6 None
</TABLE>
CALCULATION OF SALES CHARGES
CLASS B SHARES
The Distributor sells Class B
shares at NAV, without any
up-front sales charge.
Therefore, all the money you
invest is used to purchase
Fund shares. However, if you
sell your Class B shares of
the Fund before the sixth
anniversary of purchase, you
will have to pay a contingent
deferred sales charge at the
time of sale. The CDSC will be
based on the lower of the NAV
at the time of purchase or the
NAV at the time of sale
according to the schedule to
the right. There is no CDSC on
reinvested dividends or
distributions. Imposition of
the CDSC and the distribution
fee on Class B shares is
limited by the NASD
asset-based sales charge rule.
If you sell some but not all of your Class B shares, we will first redeem
certain shares not subject to the CDSC (i.e., shares purchased with
reinvested dividends) followed by shares subject to the lowest CDSC
(typically shares you have held for the longest time).
CONVERSION FEATURE -- CLASS B SHARES
- Your Class B shares automatically convert to Class A shares of the Fund
eight years after the end of the month of purchase. The dollar value of
Class A shares you receive will equal the dollar value of the B shares
converted.
- After conversion, your shares will be subject to the lower distribution
fees charged on Class A shares, which will increase your investment
return.
- You will not pay any sales charge, fees or taxes when your shares convert.
- If you purchased Class B shares of the Fund which you exchanged for Class
B shares of another Pacific Capital Fund, or vice versa, we will calculate
your holding period from the time of your original purchase of Class B
shares.
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<PAGE> 20
SHAREHOLDER INFORMATION
DISTRIBUTION ARRANGEMENTS/SALES CHARGES
CONTINUED
SALES CHARGE
REDUCTIONS
You may qualify for reduced sales charges under the following circumstances.
- LETTER OF INTENT. You inform the Fund in writing that you intend to
purchase enough shares over a 13-month period to qualify for a reduced
sales charge. You must include a minimum of 3% of the total amount you
intend to purchase with your letter of intent.
- RIGHTS OF ACCUMULATION. When the value of shares you already own plus the
amount you intend to invest reaches the amount needed to qualify for
reduced sales charges, your added investment will qualify for the reduced
sales charge.
- COMBINATION PRIVILEGE. You can combine accounts of multiple Pacific
Capital Funds or accounts of immediate family household members (spouse
and children under 21) to reduce sales charges. Reduced prices are also
available for investors who are members of certain qualified groups.
SALES CHARGE WAIVERS
CLASS A SHARES
The following qualify for waivers of sales charges:
- Current and retired trustees, directors, employees, and family members of
the Trust, Pacific Century and its affiliates or any other organization
that provides services to the Trust.
- Investors for whom Pacific Century or one of its affiliates acts in a
fiduciary, advisory, custodial, agency or similar capacity (except those
investors for whom Pacific Century Investment Services provides custodial
services).
- Investors who purchase shares of the Fund through a retirement related
payroll deduction plan, a 401(k) plan, a 403(b) plan, or a similar plan
which by its terms permits purchases of shares.
- Other investment companies distributed by the Distributor.
- Investors who purchase shares with the proceeds from the recent redemption
of shares of any non-money market mutual fund with a front-end or back-end
sales charge of equal or greater value.
REINSTATEMENT PRIVILEGE
If you have sold Class A or B shares of the Fund and decide to reinvest
in the Fund within a 120 day period, you will not be charged the
applicable sales load on amounts up to the value of the shares you sold.
You must provide a written reinstatement request and payment within 120
days of the date your instructions to sell were processed.
20
<PAGE> 21
SHAREHOLDER INFORMATION
DISTRIBUTION ARRANGEMENTS/SALES CHARGES
CONTINUED
CLASS B SHARES
The Distributor will waive the CDSC under certain circumstances, including
the following:
- If the redemption follows the death or disability of a shareholder (or
both shareholders in the case of joint accounts).
- If the redemption is made under an automatic withdrawal plan after the
participant reaches age 59 1/2, as long as the payments are no more than
10% of the account value annually (measured from the date the Transfer
Agent receives the request).
- If the redemption represents the minimum required distribution from a
retirement plan.
- If the shares being redeemed were purchased with reinvested dividends and
distributions.
DISTRIBUTION (12B-1) FEES
12b-1 fees compensate the Distributor and other dealers and investment
representatives for services and expenses relating to the sale and
distribution of the Fund's shares and for providing shareholder services.
12b-1 fees are paid from Fund assets on an ongoing basis, and over time will
increase the cost of your investment and may cost you more than paying other
types of sales charges.
- The 12b-1 fees paid by the Fund vary by share class as follows:
1. Class A shares pay a 12b-1 fee of up to .75% of the average daily net
assets of the Fund.
2. Class B shares pay a 12b-1 fee of up to 1.00% of the average daily net
assets of the Fund. This will cause expenses for Class B shares to be
higher and dividends to be lower than for Class A shares.
- The higher 12b-1 fee on Class B shares, together with the CDSC, help the
Distributor sell Class B shares without an "up-front" sales charge. In
particular, these fees help the Distributor cover the cost of advancing
brokerage commissions to investment representatives.
- The Distributor may use up to .25% of the 12b-1 fee for shareholder
servicing and up to .75% for distribution.
Until further notice, the Distributor voluntarily intends to waive a portion
of its 12b-1 fee, so that the fee payable by the Fund will not exceed .25% of
the average daily net asset value attributable to the Fund's Class A shares
on an annual basis.
21
<PAGE> 22
SHAREHOLDER INFORMATION
EXCHANGING YOUR SHARES
You can exchange your
shares in the Fund for
shares of the same class of
another Pacific Capital
Fund, usually without
paying additional sales
charges (see "Notes"
below). Class A
shareholders may also
exchange their shares for
service class shares of
other investment companies
for which Pacific Century
serves as investment
adviser. These are the
Pacific Capital Cash Assets
Trust, the Pacific Capital
Tax-Free Cash Assets Trust
and the Pacific Capital
U.S. Government Securities
Cash Assets Trust. No
transaction fees are
charged for exchanges.
You must meet the minimum
investment requirements for
the fund into which you are
exchanging.
Exchanges from one Pacific Capital
Fund to another are taxable. You can
make exchanges by sending a written
request to Pacific Capital Funds, PO
Box 182130, Columbus OH 43218-2130,
or by calling 800-258-9232. Please
provide the following information:
- Your name and telephone number
- The exact name on your account
and account number
- Taxpayer identification number
(usually your social security
number)
- Dollar value or number of shares
you are exchanging
- The name of the Pacific Capital
Fund from which the exchange is
to be made
- The name of the Pacific Capital
Fund into which the exchange is
being made
See "Selling Your Shares" for
important information about
telephone transactions.
To prevent disruption in the
management of the Fund due to market
timing strategies, exchange activity
may be limited to four substantive
exchanges within one calendar year
period. The Fund may also refuse any
exchange order.
NOTES ON EXCHANGES
- When exchanging from a Fund
that has no sales charge or a
lower sales charge to a fund
with a higher sales charge,
you will pay the difference.
- The registration and tax
identification numbers of the
two accounts must be
identical.
- The Exchange Privilege may be
changed or eliminated at any
time after a 60-day notice to
shareholders.
- Be sure to read carefully the
Prospectus of any Fund or
other investment company into
which you wish to exchange
shares.
22
<PAGE> 23
SHAREHOLDER INFORMATION
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
The Fund's net investment income is paid to its shareholders quarterly. Its
net capital gains are distributed to shareholders annually. Dividends payable
on Class A shares of the Fund are more than on Class B shares because Class B
shares have higher distribution expenses.
We automatically reinvest all income dividends and capital gains
distributions on Fund shares in additional shares of the same Fund and Class
on the ex-dividend date unless you request otherwise in writing to the
Transfer Agent (at least 15 days prior to the distribution). The Distributor
does not charge any fees or sales charges on reinvestments. You may elect to
receive your dividends/distributions in cash either by check sent to your
address or by wire to your bank account.
The value of your shares will be reduced by the amount of dividends and
distributions. If you purchase shares shortly before the record date for a
dividend or the distribution of capital gains, you will pay the full price
for the shares and receive some portion of the price back as a taxable
dividend or distribution.
TAXES
Dividends are taxable as ordinary income. Taxes on capital gains distributed
by the Fund vary with the length of time the Fund has held the
security -- not how long you have been invested in the Fund.
Dividends generally are taxable in the year in which they are paid, even if
they appear on your account statement the following year. Dividends and
distributions are treated the same for federal income tax purposes whether
you receive them in cash or in additional shares.
You will be notified in January each year about the federal tax status of
distributions made by the Fund. Depending on your residence for tax purposes,
distributions also may be subject to state and local taxes, including
withholding taxes.
An exchange of shares is considered a sale, and any related gains may be
subject to federal and state taxes.
Foreign shareholders may be subject to special withholding requirements. A
penalty is charged on certain pre-retirement distributions from retirement
accounts. Consult your tax adviser about the federal, state and local tax
consequences in your particular circumstances.
The Fund may incur foreign income taxes in connection with some of its
foreign investments. Certain of these taxes may be credited to shareholders.
HAWAII TAX INFORMATION
Dividends and distributions made by the Fund to Hawaii residents will
generally be treated for Hawaii income tax purposes in the same manner as
they are treated for federal income tax purposes.
If you are not a Hawaii resident you should not be subject to Hawaii income
taxation on dividends and distributions made by the Fund, but you will be
subject to taxes of other states and localities.
23
<PAGE> 24
For more information about the Pacific Capital Funds, the following documents
are available free upon request:
ANNUAL/SEMIANNUAL REPORTS:
The Fund's annual and semi-annual reports to shareholders contain detailed
information on the Fund's investments. The annual report includes a discussion
of the market conditions and investment strategies that significantly affected
the Fund's performance during its last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI):
The SAI provides more detailed information about the Pacific Capital Funds,
including operations and investment policies. It is incorporated by reference
and is legally considered a part of this prospectus.
You can get free copies of Reports and the SAI, or request other information and
discuss your questions about the Funds, by contacting the Bank of Hawaii or a
broker that sells the Funds. Or contact us at:
PACIFIC CAPITAL FUNDS
3435 STELZER ROAD
COLUMBUS, OHIO 43219
TELEPHONE: 1-800-258-9232
You can review the Fund's reports and SAI at the Public Reference Room of the
Securities and Exchange Commission. You can also get copies:
- - For a fee, by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009 or calling 1-800-SEC-0330.
- - Free from the Commission's Website at http://www.sec.gov.
Investment Company Act file no. 811-7454.
PCP 0029
