Rule 497(c)
Registration No. 33-84842
THE BEAR STEARNS FUNDS
PRIME MONEY MARKET PORTFOLIO
Supplement Dated January 14, 1998
to the Prospectus Dated June 2, 1997, as Previously Supplemented
The Bear Stearns Prime Money Market Portfolio Prospectus is supplemented as
follows:
THE DATE OF THE PROSPECTUS IS JANUARY 14, 1998
The following replaces the third and fourth paragraphs on page 1 of the
Prospectus in their entirety:
"BEAR STEARNS ASSET MANAGEMENT INC. ("BSAM" or the "Adviser"), a
wholly owned subsidiary of The Bear Stearns Companies, Inc., serves as
the Portfolio's investment adviser. As of December 3, 1997, Bear
Stearns Funds Management Inc., the registered investment adviser of
the Portfolio has changed its name to Bear Stearns Asset Management
Inc.
BEAR STEARNS FUNDS MANAGEMENT INC. ("BSFM"), a wholly owned
subsidiary of The Bear Stearns Companies, Inc., is the administrator
of the Portfolio. As of December 4, 1997, Bear Stearns Funds
Management Inc. formed a new corporate entity under the laws of
Delaware to conduct mutual fund administrative work for The Bear
Stearns Funds and other affiliated and non-affiliated investment
companies.
BEAR STEARNS & CO. INC. ("Bear Stearns"), an affiliate of BSAM,
serves as the Portfolio's distributor."
The following 3 paragraphs replace the biographical information contained in the
Prospectus Supplement dated December 12, 1997.
"The Portfolio is managed by a team consisting of Jeffrey Bagaglio and
Scott Pavlak.
Mr. Bagaglio joined Bear Stearns Asset Management in 1994 and
specializes in portfolio management of short-term fixed income and
separate account products. Prior to this, he was a Senior Business
Analyst at Dresdner Bank where he was responsible for foreign exchange
and interest rate derivative systems. Mr. Bagaglio's corporate
treasury experience includes managing money market investments,
revolving credit lines, and purchasing and selling currencies in the
foreign exchange markets. Mr. Bagaglio holds a B.A. in Economics from
Miami University, and an M.B.A. in Finance from the University of New
Haven.
Mr. Pavlak joined Bear Stearns Asset Management in 1991 as a portfolio
manager and specializes in short-term and intermediate fixed income
products. From 1987 to 1990, he was an officer at Beechwood
Securities, where he managed private portfolios for high-net-worth
individuals. Mr. Pavlak received his B.S. in Finance from Fairleigh
Dickinson University and M.B.A. in Economics and Finance from New York
University. He is a member of the Fixed Income Analysts Society."
The following replaces the sixth paragraph on page 1 of the Prospectus in its
entirety:
"Part B (also known as the Statement of Additional Information), dated
January 14, 1998, which may be revised from time to time, provides a
further discussion of certain areas in this Prospectus and other
matters which may be of interest to some investors."
<PAGE>
The following table is added to the Prospectus after page 3 immediately
following the section titled "Background and Expense Information."
FINANCIAL HIGHLIGHTS
PRIME MONEY MARKET PORTFOLIO
Contained below is per share operating performance data for each share
outstanding, total investment return, ratios to average net assets and other
supplemental data for the period. This information has been derived from
information provided in the financial statements.
July 14, 1997*
through
September 30, 1997
------------------
(unaudited)
---------
Class Y
-------
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period $1.00
------
Net investment income(1) 0.0121
Net increase in assets resulting from operations 0.0121
------
Dividends to shareholders from
Net investment income (0.0121)
------
Net asset value, end of period $1.00
------
Total investment return(2)(3) 5.72%
------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $63,904
Ratio of expenses to average net assets(1)(3)(4) 0.14%
Ratio of net investment income to average net
assets(1)(3) 5.57%
Decrease reflected in above expense ratios and net
investment income due to waivers and
reimbursements(3) 0.57%
*Commencement of investment operations.
(1) Reflects waivers and reimbursements.
(2) Total investment return is calculated assuming a purchase of shares on the
first day and a sale of shares on the last day of each period reported and
includes reinvestment of dividends and distributors.
(3) Annualized.
(4) Without the waiver of advisory fee and reimbursement of certain operating
expenses, the ratio of expenses to average net assets for Prime Money Market
Portfolio would have been 0.71% annualized for the period July 14, 1997 through
September 30, 1997.
The Financial Highlights are not audited. This information should be read in
conjunction with the Prime Money Market Portfolio's financial statements, which
are incorporated by reference in the Statement of Additional Information.
Please insert this Supplement in the front of your Prospectus. If you would like
to obtain more information, please call Bear Stearns at 800-766-4111.
<PAGE>
Rule 497(c)
Registration No. 33-84842
THE BEAR STEARNS FUNDS
PRIME MONEY MARKET PORTFOLIO
Supplement Dated January 14, 1998
to the Statement of Additional Information
Dated June 2, 1997, as Previously Supplemented
The Bear Stearns Prime Money Market Portfolio Statement of Additional
Information is supplemented as follows:
THE DATE OF THE STATEMENT OF ADDITIONAL INFORMATION IS JANUARY 14, 1998
The following replaces the second and third paragraphs on page 1 of the
Statement of Additional Information in their entirety:
"Bear Stearns Asset Management Inc. ("BSAM" or the "Adviser"), a
wholly-owned subsidiary of The Bear Stearns Companies Inc., serves as
the Portfolio's investment adviser. As of December 3, 1997, Bear
Stearns Funds Management Inc., the registered investment adviser of
the Portfolio has changed its name to Bear Stearns Asset Management
Inc.
Bear Stearns Funds Management Inc. ("BSFM"), a wholly-owned
subsidiary of The Bear Stearns Companies Inc., is the administrator of
the Portfolio. As of December 4, 1997, Bear Stearns Funds Management
Inc. formed a new corporate entity under the laws of Delaware to
conduct mutual fund administrative work for The Bear Stearns Funds and
other affiliated and non-affiliated investment companies.
Bear Stearns, an affiliate of BSAM, serves as distributor of the
Portfolio's shares."
With respect to the section entitled, "MANAGEMENT OF THE FUND," Eileen M. Coyle,
listed as Assistant Secretary on page 13 of the Statement of Additional
Information has been replaced in its entirety by:
"Christina LaMastro (27) Assistant Secretary Legal Assistant of Bear
575 Lexington Avenue Stearns since May 1997;
New York, NY 10022 Assistant Secretary of
Assistant Secretary BSAM since December
1997; Compliance
Assistant at Reich &
Tang L.P. from April
1996 through April 1997;
Legal Assistant at
Fulbright & Jaworski
L.P. from April 1993
through April 1996;
student at Drexel
University prior
thereto."
<PAGE>
The following language is added after the last paragraph of the section entitled
"INFORMATION ABOUT THE FUND" on page 20 of the Statement of Additional
Information:
"As of January 8, 1998 the following shareholders owned, directly or
indirectly, 5% or more of the indicated class of the Portfolio's
outstanding shares.
Percent of Class Y
Name and Address Shares Outstanding
- ----------------- ------------------
Bear Stearns Securities Corp. 47.5%
FBO 001-00269-20
1 Metrotech Center North
Brooklyn, New York 11201-3859
Custodial Trust Company 12.4%
FBO Bear Stearns Pension Plan
CTC Carnegie Center
Princeton, New Jersey 08540
Bear Stearns Securities Corp. 10.3%
FBO 925-97218-10
1 Metrotech Center North
Brooklyn, New York 11201-3859
Bear Stearns Securities Corp. 6.5%
FBO 025-07745-01
1 Metrotech Center North
Brooklyn, New York 11201-3859
Bear Stearns Securities Corp. 5.3%
FBO 520-55776-11
1 Metrotech Center North
Brooklyn, New York 11201-3859
A shareholder who beneficially owns, directly or indirectly, more than
25% of a Portfolio's voting securities may be deemed a "control person"
(as defined in the 1940 Act) of the Portfolio."
<PAGE>
The following is added after the last paragraph of the section entitled
"CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, COUNSEL AND INDEPENDENT
AUDITORS" on page 21 creating a new section entitled "FINANCIAL STATEMENTS" in
the Statement of Additional Information:
FINANCIAL STATEMENTS
"The Portfolio's Semi-Annual Report to Shareholders for the period ended
September 30, 1997 is a separate document supplied with this Statement of
Additional Information, and the financial statements and accompanying
notes appearing therein are incorporated by reference into this Statement
of Additional Information."
Please keep this Supplement with your Statement of Additional Information. If
you would like to obtain more information, please call Bear Stearns at
800-766-4111.
