FINANCIAL INVESTORS TRUST
Aristata Equity Fund
Aristata Quality Bond Fund
Aristata Colorado Quality Tax-Exempt Fund
SUPPLEMENT DATED NOVEMBER 6, 2000
TO THE AUGUST 28, 2000
STATEMENT OF ADDITIONAL INFORMATION
This supplement provides new information beyond that contained in
the Statement of Additional Information ("SAI"), and should be
read in conjunction with such SAI.
The following language shall be deleted from the section entitled
"Investment Policies and Risks":
Interest Rate Futures Contracts (Bond Fund). The Fund may
purchase and sell interest rate futures contracts ("futures
contracts") as a hedge against changes in interest rates. A
futures contract is an agreement between two parties to buy and
sell a security for a set price on a future date. Future
contracts are traded on designated "contracts markets" which,
through their clearing corporations, guarantee performance of the
contracts. Currently, there are futures contracts based on
securities such as long-term U.S. Treasury bonds, U.S. Treasury
notes, GNMA certificates and three month U.S. Treasury bills.
Generally, if market interest rates increase, the value of
outstanding debt securities declines (and vice versa). Entering
into a futures contract for the sale of securities has an effect
similar to the actual sale of securities, although sale of the
futures contract might be accomplished more easily and quickly.
For example, if a Fund holds long-term U.S. Government securities
and the adviser anticipates a rise in long-term interest rates,
it could, in lieu of disposing of its portfolio securities, enter
into futures contracts for the sale of similar long-term
securities. If rates increased and the value of the Fund's
portfolio securities declined, the value of the Fund's futures
contracts would increase, thereby protecting the Fund by
preventing its net asset value from declining as much as it
otherwise would have. Similarly, entering into futures contracts
for the purchase of securities has an effect similar to actual
purchase of the underlying securities, but permits the continued
holding of securities other than the underlying securities. For
example, if the adviser expects long-term interest rates to
decline, the Fund might enter into futures contracts for the
purchase of long-term securities, so that it could gain rapid
market exposure that may offset anticipated increases in the cost
of securities it intends to purchase, while continuing to hold
higher-yielding short-term securities or waiting for the long-
term market to stabilize. Futures transactions may fail as
hedging techniques where price movements of the underlying
securities do not follow price movements of the portfolio
securities subject to the hedge. The loss with respect to futures
transactions is potentially unlimited. Also, the Fund may be
unable to control losses by closing its position if a liquid
secondary market does not exist.
Stock Index Futures Contracts (Equity Fund). A stock index
futures contract is an agreement in which one party agrees to
deliver to the other an amount of cash equal to a specific dollar
amount times the difference between the value of a specific stock
index at the close of the last trading day of the contract and
the price at which the agreement is made. As the aggregate market
value of the stocks in the index changes, the value of the index
also will change. In the event that the index level rises above
the level at which the stock index futures contract was sold, the
seller of the stock index futures contract will realize a loss
determined by the difference between the two index levels at the
time of expiration of the stock index futures contract, and the
purchaser will realize a gain in that amount. In the event the
index level falls below the level at which the stock index
futures contract was sold, the seller will recognize a gain
determined by the difference between the two index levels at the
expiration of the stock index futures contract, and the purchaser
will realize a loss. Stock index futures contracts expire on a
fixed date, currently one to seven months from the date of the
contract, and are settled upon expiration of the contract.
The Fund intends to utilize stock index futures contracts
primarily for the purpose of attempting to protect the value of
its common stock portfolio in the event of a decline in stock
prices. The Fund, therefore, usually will be the seller of stock
index futures contracts. This risk management strategy is an
alternative to selling securities in the portfolio and investing
in money market instruments. Also, stock index futures contracts
may be purchased to protect a Fund against an increase in prices
of stocks which the Fund intends to purchase. If the Fund is
unable to invest its cash (or cash equivalents) in stock in an
orderly fashion, the Fund could purchase a stock index futures
contract which may be used to offset any increase in the price of
the stock. However, it is possible that the market may decline
instead, resulting in a loss on the stock index futures contract.
If the Fund then concludes not to invest in stock at that time,
or if the price of the securities to be purchased remains
constant or increases, the Fund will realize a loss on the stock
index futures contract that is not offset by a reduction in the
price of securities purchased. The Fund also may buy or sell
stock index futures contracts to close out existing futures
positions. See "Interest Rate Futures Contracts" above for more
information on the risks of stock index futures contracts.
Put Options on Stock Index Futures Contracts (Equity Fund). The
Fund may also purchase put options on stock index futures
contracts. Sales of such options may also be made to close out an
open option position. The Fund may, for example, purchase a put
option on a particular stock index futures contract or stock
index to protect against a decline in the value of the common
stocks it holds. If the stocks in the index decline in value, the
put should become more valuable and the Fund could sell it to
offset losses in the value of the common stocks. In this way, put
options may be used to achieve the same goals the Funds seek in
selling futures contracts. A put option on a stock index future
gives the purchaser the right, in return for a premium paid, to
assume a short (i.e., the right to sell stock index futures)
position in a stock index futures contract at a specified
exercise price ("strike price") at any time during the period of
the option. If the option is exercised by the holder before the
last trading date during the option period, the holder receives
the futures position, as well as any balance in the futures
margin account. If an option is exercised on the last trading day
prior to the expiration date of the option, the settlement will
be made entirely in cash in an amount equal to the difference
between the strike price and the closing level of the relevant
index on the expiration date.
The adviser expects that an increase or decrease in the index in
relation to the strike price level would normally correlate to an
increase or decrease (but not necessarily to the same extent) in
the value of the Fund's common stock portfolio against which the
option was written. Thus, any loss in the option transaction may
be offset by an increase in the value of the common stock
portfolio to the extent changes in the index correlate to changes
in the value of that portfolio. The Fund may liquidate the put
options it has purchased by effecting a "closing sale
transaction," rather than exercising the option. This is
accomplished by selling an option of the same series as the
option previously purchased. There is no guarantee that the Fund
will be able to effect the closing sale transaction. The Fund
will realize a gain from a closing sale transaction if the price
at which the transaction is effected exceeds the premium paid to
purchase the option and, if less, the Fund will realize a loss.
