THE DLB FUND GROUP
Supplement to Prospectus dated September 4, 2000,
(as previously supplemented by the Supplement to Prospectus dated September 5,
2000, as further supplemented by the Supplement to Prospectus dated September
28, 2000) and Supplement to Statement of Additional Information
dated September 4, 2000.
DLB ENTERPRISE III FUND
The Board of Trustees which oversees the DLB Enterprise III Fund (the
"Enterprise III Fund") has decided to terminate the Enterprise III Fund
effective December 29, 2000, or as soon thereafter as is practicable (the
"Termination Date"). In connection with the termination of the Enterprise III
Fund, the Board of Trustees has suspended the sale of the Enterprise III Fund's
shares effective immediately, except that current shareholders as of October 24,
2000 will be permitted to purchase additional shares of the Enterprise III Fund
through December 22, 2000. Consequently, purchase orders for Enterprise III Fund
shares from individuals who are not currently shareholders of the Fund received
on or after October 25, 2000 will be rejected by the Enterprise III Fund, and
all purchase orders for Enterprise III Fund shares received on or after December
22, 2000 will be rejected by the Enterprise III Fund.
Current shareholders of the Enterprise III Fund will receive a formal
Notice of Termination that is designed to answer any questions concerning the
Enterprise III Fund's termination. As described more fully in that Notice, until
the Termination Date, shareholders may choose to redeem their Enterprise III
Fund shares. If a shareholder takes no action, his or her shares will
automatically be redeemed on the Termination Date and the proceeds distributed
to such shareholder promptly thereafter.
DLB DISCIPLINED GROWTH FUND
On October 19, 2000, the Board of Trustees which oversees the DLB
Disciplined Growth Fund (the "Disciplined Growth Fund") approved (1) a change to
the Disciplined Growth Fund's name to "DLB Enhanced Index Core Equity Fund," (2)
an amendment to the Management Contract between the Disciplined Growth Fund and
David L. Babson & Company Inc. and (3) changes to the investment objective and
strategies of the Disciplined Growth Fund. Each of the name change, the
amendment to the Management Contract and the changes to the investment objective
and strategies of the Disciplined Growth Fund are expected to be effective on or
about December 19, 2000, at which time, the Fund will be managed by David L.
Babson & Company Inc.'s quantitative investment team.
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The Management Contract has been amended for the sole purpose of
reducing the management fee from an annual rate of 0.75% to 0.50% of the
Disciplined Growth Fund's average daily net asset value. Otherwise, the
Management Contract remains in full force and effect in its current form.
The new investment objective of the Disciplined Growth Fund will be to
outperform the total return performance of its benchmark index, the S&P 500
Index, while maintaining risk characteristics similar to those of the benchmark.
The new principal investment strategies of the Disciplined Growth Fund will be
as set forth in the following paragraphs:
Under normal market conditions, the Fund will invest substantially all
(but no less than 65%) of its total assets in common stocks of companies
included in the Fund's benchmark index. The Manager believes that a systematic
strategy that exploits market inefficiencies can be used to produce a portfolio
for the Fund that will outperform the Fund's benchmark index while maintaining
risk characteristics similar to the benchmark.
The Manager uses quantitative analysis to identify groups of stocks
included within the Fund's benchmark index that the Manager believes will
outperform OR underperform the index. The Manager identifies these stocks
through a proprietary quantitative model that ranks all stocks within the index
based on several factors relating to a company's valuation, earnings quality,
stock price momentum and earnings improvement. Based on these rankings, the
Manager constructs a broadly diversified portfolio (the Fund will generally hold
approximately 90% of the securities in the index) by (1) overweighting
high-ranking stocks, (2) underweighting low-ranking stocks (or not holding them
at all), and (3) market-weighting those stocks that do not have especially high
or low rankings. Neither market timing nor macro economic forecasting are used
by the Manager in constructing the Fund's portfolio.
In addition to the changes set forth above, on October 19, 2000, the
Board of Trustees also approved the elimination of non-fundamental investment
restrictions (b) through (h) listed in the Statement of Additional Information
of the Disciplined Growth Fund dated September 4, 2000.
THE DATE OF THIS SUPPLEMENT IS OCTOBER 24, 2000
