THE NORTHSTAR INTERNATIONAL VALUE FUND
Prospectus Supplement dated
August 1, 1997 to Prospectus dated
April 30, 1997
The following information supplements or replaces the information contained in
section of the Fund's prospectus entitled "Northstar International Value Fund
on pages 4 and 5":
NORTHSTAR Registrant
INTERNATIONAL Northstar Trust
VALUE FUND Portfolio manager
Charles Brandes, Jeff Busby
OBJECTIVE
This fund's investment
objective is long-term
capital appreciation.
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INVESTMENT
STRATEGY
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The fund invests primarily in foreign companies with a market capitalization
of greater than $1 billion, but it may hold up to 25% of its assets in companies
with smaller market capitalization.
The portfolio managers apply the technique of "value investing" by seeking
stocks that their research indicates are priced well below their long-term
value. This gives the fund both a possible margin of safety against price
declines and an opportunity for profit.
HOLDINGS
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The fund holds common stocks, preferred stocks, American, European and Global
depository receipts, as well as convertible securities. It may also invset in
other higher-risk securities and engage in other investment practices. These
are described on page 20.
Under normal circumstances, it will invest 65% of its total assets in securities
of companies located in at least three countries other than the U.S., located
in Western Europe, North and South America, Australia, Asia and other nations.
Up to 25% of its assets may be invested in securities of issuers located in
countries with emerging markets.
RISKS
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Because it invest in equities, the fund is affected by changes in the stock
market. It is also subject to the risks associated with investing in smaller
companies, foreign securities and emerging markets. Please refer to the section
beginning on page 20, THE RISKS OF INVESTING IN MUTUAL FUNDS.
WHAT YOU PAY
TO INVEST
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There are two types of fees and expenses when you invest in mutual funds: fees,
including sales charges, you pay directly when you buy or sell shares, and
operating expenses paid each year by the Fund.
Fees you pay directly
Class A Class B Class C
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Maximum sales charge on your initial
investment (as a % of offering price) % 4.75 none none
Maximum deferred sales charge % none(1) 5.00(2) 1.00(2)
Operating expenses paid each year by the fund
(as a % of average net assets)
Class A Class B Class B
- ---------------------------------------------------------------------
Management fee % 1.00 1.00 1.00
12b-1 fee(3) % 0.30 1.00 1.00
Other expenses(4) % 0.52 0.50 0.50
Total fund operating expenses
after reimbursement % 1.82(5) 2.50 2.50
Example
Here's an example of what you would pay in expenses if you invested $1,000,
reinvested all your dividends, the fund earned an average annual return of
5%, and annual operating expenses remained at the current level. Keep in
mind that this is only an example--actual expenses and performance may vary.
Year 1 Year 3 Year 5 Year 10
- ---------------------------------------------------------------------
Class A
with redemption $ 65 102 141 251
Class B
with redemption $ 75 108 153 267(5)
without redemption $ 25 78 133 267(6)
Class C
with redemption $ 35 78 133 284
without redemption $ 25 78 133 284
(1) Except for purchases of $1 million or more, when you sell any of the shares
within 18 months of when you bought them. Please see page 11 for details.
(2) This charge decreases over time. Please see page 11 for details.
(3) Because of the 12b-1 fee, long-term shareholders may pay more than the
maximum permitted front-end sales charge.
(4)These figures are after the adviser reimbursed certain expenses. Before
reimbursements, other expenses would have been 1.27% for Class A and 1.28% for
Class C. Total fund operating expenses would have been 2.57% for Class A and
3.28% for Class C.
(5) Effective April 18, 1997, the expense limitation is 1.80%.
(6) Class B shares convert to Class A shares after year 8. This figure uses
Class A expenses for years 9 and 10.
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<CAPTION>
<S> <C> <C>
The following chart shows the The fund's performance is also
HOW THE (Drawing of fund's financial performance by reported in national newspapers <C>
FUND HAS money appears share class.(1) These figures are under these trading symbols: NORTHSTAR
PERFORMED here.) unaudited. IntValA or IntValC. INTERNATIONAL
VALUE FUND
</TABLE>
<TABLE>
<CAPTION>
Class A Class C
Six months Year Ended Class B Six months Year Ended
ended October 31, April 18-30, ended October 31,
April 30,1997 1996 1995(1) 1997(3) April 30, 1997 1996 1995(1)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating performance(2)
Net asset value at the beginning of the period $ 9.05 8.10 7.64 10.00 8.93 8.05 7.61
Net investment income (loss) $ (0.10) 0.14 0.09 0.01 (0.05) 0.05 0.06
Net realized and unrealized gain on investments $ 1.47 0.84 0.37 0.06 1.39 0.86 0.38
Total from investment operations $ 1.37 0.98 0.46 0.07 1.34 0.91 0.44
Dividends from net investment income $ (0.14) (0.03) -- -- (0.04) (0.03) --
Dividends from net realized gain on investments sold $ (0.22) -- -- -- (0.17) -- --
Total distributions $ (0.36) (0.03) -- -- (0.21) (0.03) --
Net asset value at the end of the period $ 10.06 9.05 8.10 10.07 10.06 8.93 8.05
Total investment return (4) % 15.70 12.15 6.08 0.70 14.82 12.79 5.76
Ratios and supplemental data(2)
Net assets at the end of the period ($000s) $20,918 16,777 5,188 760 22,319 14,530 5,749
Ratio of expenses to average net assets % 1.82(5) 1.85 1.85(5) 2.50(5) 2.50(5) 2.50 2.50(5)
Ratio of expense reimbursement to average net assets % 0.75(5) 0.97 6.08(5) -- 0.78(5) 1.21 6.08(5)
Ratio of net investment income to average net assets % 1.27(5) 1.52 1.67(5) 13.46(5) (0.33)(5) 0.62 1.13(5)
Average commissions per share $0.0191 0.0314 -- 0.0191 0.0191 0.0314 --
Portfolio turnover rate % 10 74 -- 10 10 74 --
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(1) The mutual fund commenced operations on March 6, 1995 as the Brandes
International Fund, a series of the Brandes Investment Trust. At the close
of business on April 18, 1997 (the "Closing"), the Northstar International
Value Fund ("International Value Fund") acquired the net assets of the
Brandes International Fund, pursuant to an Agreement of Reorganization dated
February 4, 1997. In accordance with the agreement, the International Value
Fund, at the closing, issued 4,152,725 shares of the International Value
Fund having an aggregate value of $41,569,860 which included unrealized
appreciation on investments of $4,321,823 as a result, the International
Value Fund issued 1.637 shares for each Brandes International Fund Class A
share and 1.643 shares for each Brandes International Fund Class C share.
The transaction was structured for tax purposes to qualify as a tax-free
reorganization under the Internal Revenue Code. Directly after the merger
the combined net assets in the International Value Fund were $41,569,860
with a net asset value of $10.00 for Class A and Class C shares. On
April 21, 1997, the Brandes International Fund was reorganized as the
Northstar International Value Fund.
(2) Unaudited.
(3) Class B commenced operations on April 18, 1997.
(4) Assumes dividends have been reinvested and does not reflect the effect of
sales charges.
(5) Annualized.
(Telephone appears here)
If you have any questions, please call 1-800-595-7827.
International Value Fund 5
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The following information supplements or replaces the information contained
in the section of the Fund's prospectus entitled "Meet the portfolio managers:
Performance profile: Brandes Investment Partners" on pages 7 and 8:
MEET THE
PORTFOLIO
MANAGERS
PERFORMANCE
PROFILE:
Brandes
Investment Partners
The charts below illustrate the average annual return and the cumulative total
return since inception for the Northstar International Value Fund. The fund
commenced operations on March 6, 1995 as the Brandes International Fund, a
series of the Brandes Investment Trust. It was reorganized on April 21, 1997 as
the Northstar International Value Fund, a series of the Northstar Trust.
These figures reflect changes in the share prices and reinvestment of dividends
and distributions, and are after deduction of all fees and expenses. Included
for comparison are performance figures of the Morgan Stanley Capital
International ("MSCI") EAFE Index, an unmanaged index of securities listed on
exchanges in markets in Europe, Australia and the Far East. It has been adjusted
to reflect reinvestment of dividends. The results presented below may not equate
with the return experienced by any shareholder as a result of timing of
investments and the effects of taxes on any shareholder.
Northstar MSCI
International EAFE
Value Fund (%) Index (%)
One year, ended June 30, 1997 29.62 12.84
Cumulative total return since March 6, 1995 53.27 32.71
graph appears here with the following plot points:
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<CAPTION>
UNIT VALUE
1995 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Northstar International Value Fund 1.00 1.02 1.05 1.06 1.06 1.10 1.09 1.09 1.06 1.09 1.12 1.15 1.14 1.13
MSCI EAFE Index 1.00 1.03 1.07 1.06 1.04 1.10 1.06 1.08 1.05 1.08 1.13 1.13 1.13 1.16
Northstar International Value Fund 1.17 1.18 1.14 1.16 1.19 1.19 1.27 1.29 1.33 1.33 1.38 1.37 1.44 1.53
MSCI EAFE Index 1.17 1.18 1.14 1.14 1.17 1.16 1.21 1.19 1.15 1.17 1.17 1.18 1.26 1.33
</TABLE>
7
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MEET THE
PORTFOLIO
MANAGERS
PERFORMANCE
PROFILE:
Brandes
Investment Partners
These figures demonstrate the historical tract record of Brandes Investment
Partners, L.P. The figures have been provided by Brandes Investment Partners,
L.P. and have not been verified or audited. They do not indicate how the
Northstar International Value Fund or Brandes Investment Partners, L.P. will
perform in the future.
(a) The first annual returns presented (right) were calculated on a
time-weighed, total return basis, including reinvestments of all dividends,
interest and income on a cash basis, realized and unrealized gain or losses
and are net of applicable investment advisory fees, brokerage commissions,
custodial fees and execution costs and any applicable foreign withholding
taxes, without provision for federal and state income taxes, if any. The
Brandes composite results include all actual, fee-paying, fully discretionary
international equity accounts under management for at least one month beginning
July 1, 1990 having substantially similar investment objectives, policies,
techniques and restrictions to those of the Northstar International Value
Fund. The weighed-average management fee during the period from July 1, 1990
through December 31, 1996 was 0.96% per year. Securities transactions are
accounted for on the trade date and cash accounting is utilized. Cash and
equivalents are included in performance results. Starting with calendar
year 1992 through calendar year 1995, the net annual total returns for the
Brandes composite have been examined by a Big Six accounting firm in
accordance with AIMR Level II verification standards. The examination
of net annual total returns for calendar year 1996 has not yet been
completed. Copies of their reports and a complete list and description
of Brandes' composites are available on request. Brandes has prepared
the performance data in compliance with the Performance Presentation
Standards of the Association for Investment Management and Research
(AIMR-PPS(TM)). AIMR did not prepare or review this data.
The charts below show the past performance of Brandes Investment Partners,
L.P. in managing accounts with investment objectives, policies, techniques
and restrictions substantially similar, though not identical to those of
the Northstar International Value Fund. The charts show average annual
returns for a composite of the actual performance of all international
equity accounts managed by Brandes Investment Partners from 1990 until
the present.
The accounts were not subject to the same types of expenses as the fund
or the requirements of the Investment Company Act of 1940 or the Internal
Revenue Code, the limitations of which may have adversely affected
performance results. Included for comparison purposes are performance
figures of the MSCI EAFE Index. The results presented below may not
equate with the return experienced by any particular account as a result
of timing of investments and the effect of taxes on any client.
Brandes International MSCI
Equity Composite EAFE
(%)(a) Index(%)
One year, ended June 30, 1997 30.50 12.84
Three years, ended June 30, 1997 17.07 9.12
Five years, ended June 30, 1997 15.63 12.83
Average annual return
since July 1, 1990 17.79 7.01
graph appears here with the following plot points:
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<CAPTION>
UNIT VALUE
1990 1991 1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Brandes International Equity Composite 0.98 0.99 1.10 1.13 1.26 1.38 1.43 1.52 1.47 1.47 1.58 1.65 1.8
MSCI EAFE Index 0.79 0.87 0.94 0.88 0.96 0.98 0.86 0.88 0.89 0.93 1.04 1.14 1.2
Brandes International Equity Composite 2.01 2.13 2.20 2.29 2.31 2.41 2.44 2.65 2.81 3.15
MSCI EAFE Index 1.35 1.36 1.41 1.47 1.51 1.54 1.54 1.56 1.54 1.74
</TABLE>
(telephone graphic) If you have any questions, please call 1-800-595-7627
8
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The following information supplements the information contained in the section
of the Fund's prospectus entitled "Your guide to buying, selling and exchanging
shares of Northstar funds: Front end sales charges: Ways to reduce front-end
sales charges" on page 10:
4. You may not have to pay front-end sales charges or a CDSC if you are:
o beneficiares of life insurance contracts with ReliaStar Life Insurance
Company (ReliaStar) or any ReliaStar affiliated life insurance company
to the extent they invest payments made to them under the contracts in one
or more Northstar Funds within sixty days of payment under the contracts.
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THIS SUPPLEMENT SUPERSEDES ALL PRECEDING SUPPLEMENTS.
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