PROSPECTUS [ICAP Logo]
April 30, 1999
ICAP FUNDS, INC.
ICAP Discretionary Equity Portfolio
ICAP Equity Portfolio
ICAP Select Equity Portfolio
ICAP Euro Select Equity Portfolio
Like all mutual fund shares, the Securities and
Exchange Commission ("SEC") has not approved or
disapproved of these securities or passed upon the
adequacy of this Prospectus. Any representation to the
contrary is a criminal offense.
___________________
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TABLE OF CONTENTS
Page
THE PORTFOLIOS
Investment Objectives and Principal
Investment Strategies 3
Investment Selection Process 4
Types of Investments and Portfolio Policies 4
Risk Factors 5
Performance History 7
Fees and Expenses 9
Financial Highlights 11
Prior Performance of the Adviser 15
MANAGEMENT OF THE PORTFOLIOS
Investment Adviser 18
Investment Team 18
YOUR ACCOUNT
How to Contact ICAP 19
Minimum Investments 19
How to Open an Account 19
How to Buy Shares 20
How to Sell Shares 21
Signature Guarantees 23
Special Situations 23
Investments Made Through Financial Services Agents 23
Closing of Accounts 24
Valuation of Portfolio Shares 24
Dividends, Capital Gain Distributions and Taxes 24
Shareholder Reports 25
ADDITIONAL INFORMATION
Year 2000 Issues 25
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THE PORTFOLIOS
Investment Objectives and Principal Investment Strategies
Discretionary Equity Portfolio. The investment
objective of the Discretionary Equity Portfolio is to
seek a superior total return with only a moderate
degree of risk. The Discretionary Equity Portfolio
seeks to achieve its investment objective by investing
primarily in U.S. dollar-denominated equity securities
of companies with market capitalizations of at least
$500 million. The Discretionary Equity Portfolio seeks
to achieve a total return greater than the Standard &
Poor's 500 Stock Index (the "S&P 500"). The
Discretionary Equity Portfolio may invest up to 35% of
its total assets in cash and cash equivalents for any
purpose, including pending investment or reinvestment,
and may invest up to 100% of its total assets in such
instruments for temporary defensive purposes when
market conditions warrant. To the extent the
Discretionary Equity Portfolio invests for temporary
defensive purposes, it may not achieve its investment
objective. The Discretionary Equity Portfolio will
typically hold between 40 and 45 securities.
Equity Portfolio. The investment objective of the
Equity Portfolio is to seek a superior total return
with only a moderate degree of risk. The Equity
Portfolio seeks to achieve its investment objective by
investing primarily in U.S. dollar-denominated equity
securities of companies with market capitalizations of
at least $500 million. The Equity Portfolio seeks to
achieve a total return greater than the S&P 500. The
Equity Portfolio may invest in cash and cash
equivalents to meet anticipated redemption requests, to
pay expenses and pending investment or reinvestment.
The Equity Portfolio's investment in such instruments
will generally not exceed 5% of its total assets. The
Equity Portfolio intends to be virtually fully invested
in equity securities at all times. The Equity
Portfolio will typically hold between 40 and 45
securities.
Select Equity Portfolio. The investment objective
of the Select Equity Portfolio is to seek a superior
total return. The Select Equity Portfolio seeks to
achieve its investment objective by investing primarily
in U.S. dollar-denominated equity securities of
companies with market capitalizations of at least $500
million. The Select Equity Portfolio seeks to achieve
a total return greater than the S&P 500. The Select
Equity Portfolio may invest up to 35% of its total
assets in cash and cash equivalents for any purpose,
including pending investment or reinvestment, and may
invest up to 100% of its total assets in such
instruments for temporary defensive purposes when
market conditions warrant. To the extent the Select
Equity Portfolio invests for temporary defensive
purposes, it may not achieve its investment objective.
While the Discretionary Equity, Equity and Select
Equity Portfolios are similar, the Select Equity
Portfolio will concentrate its investments in fewer
securities than the Discretionary Equity and Equity
Portfolios. The Select Equity Portfolio will typically
hold between 15 and 25 securities.
Euro Select Equity Portfolio. The investment
objective of the Euro Select Equity Portfolio is to
seek a superior total return with income as a secondary
objective. The Euro Select Equity Portfolio seeks to
achieve its investment objective by investing primarily
in equity securities, predominantly American Depositary
Receipts ("ADRs"), of established European companies
with market capitalizations of at least $1 billion.
See page 4 for an explanation of ADRs. The Portfolio
seeks to achieve a total return greater than the Morgan
Stanley Capital International - Europe Index (the "MSCI-
Europe Index"). The Euro Select Equity Portfolio may
invest up to 35% of its total assets in cash and cash
equivalents for any purpose, including pending
investment or reinvestment, and may invest up to 100%
of its total assets in such instruments for temporary
defensive purposes when market conditions warrant. To
the extent the Euro Select Equity Portfolio invests for
temporary defensive purposes, it may not achieve its
investment objective. The Euro Select Equity Portfolio
will typically hold between 15 and 25 securities.
Investment Selection Process
Institutional Capital Corporation ("ICAP"), the
investment adviser to the Portfolios, uses a team
approach with a value-oriented investment style. ICAP
believes that a team approach to managing assets helps
ensure that its investment style is consistently
applied over time and that the knowledge, experience
and interaction of its investment professionals greatly
enhance the investment decision-making process. ICAP's
investment process involves three key components:
Valuation, Identification of a Catalyst and Research.
* Valuation
First, ICAP uses its proprietary valuation
models to identify, from a universe of well
established large- and mid-capitalization companies,
those companies which ICAP believes offer the best
relative values. According to the models, the
stocks of these companies sell below the price-to-
earnings ratio warranted by their prospects. From
these undervalued companies, we then eliminate from
consideration those stocks that exhibit
deteriorating earnings trends. By insisting on
companies with stable-to-improving earnings patterns
and by demanding reasonable valuations, ICAP
attempts to lessen investment risk in the search for
superior returns. The universe of companies
reviewed for the Discretionary Equity, Equity and
Select Equity Portfolios will consist of
approximately 450 companies; for the Euro Select
Equity Portfolio, this number is approximately 150.
* Identification of a Catalyst
Next, ICAP looks beyond traditional measures of
value to find companies where a catalyst for
positive change is about to occur. Specifically,
ICAP focuses on companies where this catalyst has
the potential to produce stock appreciation of 15%
or more relative to the market over a nine-to-
fifteen month time period. The catalyst can be
thematic (e.g., consolidation of the banking
industry), something that would benefit a number of
companies, or company specific (e.g., a corporate
restructuring or the introduction of a new product).
* Research
Research is key to the investment process.
ICAP principally employs internally-generated
research to evaluate the financial condition and
business prospects of every company it considers,
focusing on those companies where a catalyst is
about to occur. Once potential investment
candidates are identified, ICAP communicates with
the top management at each of these companies and
often the customers, competitors and suppliers of
these companies, as well.
Using this highly disciplined process, ICAP's
investment management team typically selects 40 to 45
securities for the Discretionary Equity and Equity
Portfolios and 15 to 25 securities for the Select
Equity and Euro Select Equity Portfolios. Before these
issues are added to the Portfolios, ICAP's investment
management team thoroughly discusses, evaluates and
approves each recommendation.
The process does not end with the purchase of a
security. Rather, ICAP continuously monitors each
security and eliminates those where their target price
is achieved, the catalyst becomes inoperative or
another stock offers greater opportunity for
appreciation.
Types of Investments and Portfolio Policies
In implementing the investment objective of each
Portfolio, ICAP may invest in the following securities
and follow the policies described below. Some of these
securities and portfolio policies involve special
risks, which are described below and in the Statement
of Additional Information.
Common Stocks and Other Equity Securities. The
Portfolios will invest at least 65% of their respective
total assets in common stocks and other equity
securities. Other equity securities may include ADRs,
warrants, Real Estate Investment Trusts ("REITs") and
other securities convertible or exchangeable into
common stock.
American Depositary Receipts. Each Portfolio may
invest in ADRs. ADRs, which are typically issued by a
U.S. financial institution (a "depositary"), evidence
ownership interests in a security or pool of securities
issued by a foreign company which have been deposited
with the depositary. ADRs are denominated in U.S.
dollars and trade in the U.S. securities markets.
Cash and Cash Equivalents; Temporary Strategies.
Cash equivalents are short-term fixed income securities
issued by private and governmental institutions which
are rated Prime-1 or higher by Moody's Investors
Service, A-1 or higher by Standard & Poor's
Corporation, D-2 or higher by Duff & Phelps, Inc., F-2
or higher by Fitch IBCA, Inc. or unrated securities of
comparable quality as determined by ICAP. Such
securities include U.S. government securities,
certificates of deposit (which are issued against funds
deposited in a U.S. or foreign bank or
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a U.S. savings and loan association), bank time deposits
(which are monies kept on deposit with U.S. or foreign
banks or U.S. savings and loan associations), bankers'
acceptances, repurchase agreements and commercial
paper.
Options and Futures Transactions. The Portfolios
may invest up to 30% of their respective net assets in
options and futures transactions which are sometimes
referred to as derivative transactions. The
Portfolios' options and futures transactions may
include instruments such as stock options, stock index
options and futures contracts. If these practices are
used, the intent would be primarily to hedge the
Portfolios. A Portfolio may hold a futures or options
position until its expiration, or it can close out such
a position before then at current value if a liquid
secondary market is available.
Portfolio Turnover. Under normal market
conditions, the Discretionary Equity and Equity
Portfolios anticipate that portfolio turnover rates
will generally not exceed 150%. The Select Equity and
Euro Select Equity Portfolios anticipate that portfolio
turnover rates will be between 100% and 300% and 150%
and 200%, respectively. The portfolio turnover rate
indicates changes in a Portfolio's securities holdings;
generally, if all the securities in a Portfolio at the
beginning of the period are replaced by the end of the
period, the turnover rate would be 100%. You may
realize taxable gains as a result of such trading of a
Portfolio's assets. In addition, the Portfolio will
incur transaction costs in connection with buying and
selling securities which will have a negative impact on
performance.
Risk Factors
Each Portfolio will invest primarily in equity
securities. Equity securities generally increase or
decrease in value based on the earnings of a company
and on general industry and market conditions. Equity
securities markets may be volatile and are affected by
economic growth and market conditions, interest rate
levels and political events. Therefore, especially in
the short term, the share price will fluctuate and may,
at redemption, be worth more, or less, than the initial
purchase priceaccordingly, you may lose money on your
investment.
In addition, the Select Equity and Euro Select
Equity Portfolios are non-diversified. As a result, a
larger percentage of their assets may be invested in a
particular issuer or in fewer companies than is typical
of other mutual funds. The Select Equity and Euro
Select Equity Portfolios will be more susceptible to
adverse economic, political, regulatory or market
developments affecting a single issuer. This, as well
as concentration in a few companies, may increase
volatility.
An investment in the Euro Select Equity Portfolio
also entails the special risks of international
investing, including currency exchange fluctuations,
government regulations and the potential for political
and economic instability. You should expect the Euro
Select Equity Portfolio's share price to be more
volatile than that of a U.S.-only fund.
Other risks of investing in the Portfolios may include:
* Market Risk: The market value of a security will
move up and down, sometimes rapidly and unpredictably
due to economic or market trends.
* Management Risk: A strategy used by ICAP may fail
to produce the intended result.
* ADR Risk: Investments in ADRs may entail the
special risks of international investment, including
currency exchange fluctuations, government regulations
and the potential for political and economic
instability.
* Derivative Risk: The use of options and futures
involves risks and special considerations which
include, among others, correlation risk and liquidity
risk. Correlation risk is the risk that there might be
imperfect correlation, or even no correlation, between
price movements of a derivative instrument and price
movements of investments being hedged. Liquidity risk
is the risk that a derivative instrument cannot be
sold, closed out or replaced quickly at or very close
to its fundamental value. Generally, exchange-traded
contracts are very liquid because the exchange
clearinghouse is the counterparty of every
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contract. Over-the-counter transactions are less liquid
than exchange-traded derivatives since they often can only
be closed out with the other party to the transaction.
* Mid-Cap Risk: An investment in mid-cap
companies may involve greater risks than an investment
in larger, more established companies. Mid-cap
companies may lack the management experience or depth,
financial resources, product diversification and
competitive strength of larger-cap companies. The
market for mid-cap securities is generally less liquid
and subject to greater price volatility than the market
for larger-cap securities.
* Interest Rate Risk: Investments in cash
equivalents are subject to interest rate risk. Cash
equivalents will generally decrease in value when
interest rates increase.
As a result of the foregoing risks, the Portfolios
are suitable for long-term investors only. The
Portfolios are not designed as short-term investment
vehicles. An investment in one or more Portfolios may
be an appropriate investment for you if you:
* seek long-term capital appreciation;
* want to include an equity fund in your investment
portfolio; and
* are willing to accept the risk that your
investment may fluctuate over the short term in
exchange for the potential for superior total returns.
Performance History
The return information provided in the bar charts
and tables below illustrate how each Portfolio's
performance can vary, which is one indication of the
risks of investing in the Portfolios. The information
shows changes in each Portfolio's performance from year
to year and shows how each Portfolio's average annual
returns compare with those of a broad-based measure of
market performance over the life of the Portfolio.
Please keep in mind that past performance is not
necessarily indicative of future returns.
Discretionary Equity Portfolio
(Inception 12/31/94) Best and Worst Quarterly Performance
Calendar Year Total Returns 12/31/94 to 12/31/98
35.21% 25.55% 28.60% 10.17% Best quarter return
1995 1996 1997 1998 16.24%
(2nd quarter, 1997)
Worst quarter return
-16.31%
(3rd quarter, 1998)
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Equity Portfolio (Inception 12/31/94) Best and Worst Quarterly Performance
Calendar Year Total Returns 12/31/94 to 12/31/98
38.85% 26.26% 29.08% 11.42% Best quarter return
1995 1996 1997 1998 17.23%
(2nd quarter, 1997)
Worst quarter return
-17.48%
(3rd quarter, 1998)
Select Equity Portfolio Best and Worst Quarterly
(Inception 12/31/97) Performance
Calendar Year Total Return for year ended 12/31/98
15.33% Best quarter return
1998 18.66%
(4th quarter, 1998)
Worst quarter return
-16.91%
(3rd quarter, 1998)
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Euro Select Equity Portfolio
(Inception 12/31/97) Best and Worst Quarterly Performance
Calendar Year Total Return for year ended 12/31/98
27.40% Best quarter return
1998 24.20%
(4th quarter, 1998)
Worst quarter return
-23.27%
(3rd quarter, 1998)
Average Annualized Total Returns
as of December 31, 1998
Portfolio/Index One Year Since
Inception
(12/31/94)
Discretionary
Equity Portfolio 10.17% 24.53%
Equity Portfolio 11.42% 26.01%
S&P 500 Index(1) 28.58% 30.51%
Portfolio/Index One Year Since
Inception
(12/31/97)
Select Equity
Portfolio 15.33% 15.33%
S&P 500 Index(1) 28.58% 28.58%
Euro Select Equity
Portfolio 27.40% 27.40%
MSCI-Europe 28.53% 28.53%
Index(2)
____________
(1) The S&P 500 is an unmanaged index generally
representative of the U.S. market for large-to-mid-
capitalization stocks.
(2) The MSCI-Europe Index is an unmanaged index
generally representative of the European market for
large-to-mid-capitalization stocks.
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Fees and Expenses
The following table describes the fees and expenses
that you may pay if you buy and hold shares of the Portfolios.
Discretionary Select Euro Select
Equity Equity Equity Equity
Portfolio Portfolio Portfolio Portfolio
Shareholder Fees (fees paid
directly from your investment(1) None None None None
Annual Portfolio Operating Expenses
(expenses that are deducted from
Portfolio assets)(2)
Management fee 0.80% 0.80% 0.80% 1.00%
Distribution and service (12b-1) fees None None None None
Other expenses 0.18% 0.11% 2.54% 0.67%
Total 0.98% 0.91% 3.34% 1.67%
Less: Fee waiver/expense
reimbursement(3) -0.18% -0.11% -2.54% -0.67%
Net expenses 0.80% 0.80% 0.80% 1.00%
____________
(1) If you redeem shares by wire, you will be
charged a $10 service fee. See "Your Account How
to Sell Shares" on page 21.
(2) Operating expenses are deducted from Portfolio
assets before computing the daily share price or
making distributions. As a result, they do not
appear on your account statement, but instead reduce
your total return and distributions. These expenses
are expressed as a percentage of net assets.
(3) Pursuant to an expense cap agreement dated
April 30, 1999 between ICAP and the Portfolios, ICAP
agreed to waive its management fee and/or reimburse
the operating expenses of the Portfolios to the
extent necessary to ensure that each of the
Discretionary Equity, Equity and Select Equity
Portfolio's total operating expenses would not
exceed 0.80% of that Portfolio's average net assets
and that the Euro Select Equity Portfolio's total
operating expenses would not exceed 1.00% of the
Euro Select Equity Portfolio's average net assets.
The term of this expense cap agreement is 12 months.
For more information, see "Management of the
Portfolios" on page 18.
Example
The following Example is intended to help you
compare the cost of investing in one or more of the
Portfolios with the cost of investing in other mutual
funds. The Example assumes that you invest $10,000 in
each Portfolio for the time periods indicated and then
redeem all of your shares at the end of those periods.
The Example also assumes that you have a 5% return each
year and that each Portfolio's total operating expenses
remain the same each year, and that the expense caps
discussed above will not continue beyond their current
term, which expires April 30, 2000. Although your
actual costs may be higher or lower, based on these
assumptions, your costs would be as follows:
1 Year 3 Years 5 Years 10 Years
Discretionary Equity $ 82 $ 294 $ 524 $1,185
Portfolio
Equity Portfolio $ 82 $ 279 $ 493 $1,109
Select Equity Portfolio $ 82 $ 789 $ 1,521 $3,458
Euro Select Equity $ 102 $ 461 $ 844 $1,920
Portfolio
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Financial Highlights
The financial highlights tables are intended to
help you understand the Portfolios' financial
performance for the period from a Portfolio's
commencement of operations to December 31, 1998. The
total returns presented in the table represent the rate
that an investor would have earned or lost on an
investment in the Portfolio for the stated period
(assuming reinvestment of all dividends and
distributions). This information has been audited by
PricewaterhouseCoopers LLP, whose report, along with
the financial statements, is included in the annual
report of the Portfolios, which is available upon
request.
Discretionary Equity Portfolio
Year Ended December 31,
(For a share outstanding throughout 1998 1997 1996 1995(1)
the year)
Net asset value, beginning of year $30.34 $29.55 $25.42 $20.00
Income from investment operations:
Net investment income 0.52 0.48 0.36 0.31
Net realized and unrealized
gain on investments 2.57 7.80 6.09 6.70
Total income from investment
operations 3.09 8.28 6.45 7.01
Less distributions:
From net investment income (0.52) (0.48) (0.36) (0.31)
In excess of book net investment income - (0.01) - -
From net realized gain on investments (0.90) (7.00) (1.80) (1.27)
In excess of book net realized
gain on investments - - (0.16) (0.01)
Total distributions (1.42) (7.49) (2.32) (1.59)
Net asset value, end of year $32.01 $30.34 $29.55 $25.42
Total return 10.17% 28.60% 25.55% 35.21%
Supplemental data and ratios:
Net assets, end of year (in thousands) $205,369 $157,137 $110,280 $37,362
thousands)
Ratio of expenses to average net assets:
Before expense reimbursement 0.98% 1.02% 1.11% 1.56%
After expense reimbursement 0.80% 0.80% 0.80% 0.80%
Ratio of net investment income to
average net assets:
Before expense reimbursement 1.47% 1.15% 1.04% 0.95%
After expense reimbursement 1.65% 1.37% 1.35% 1.71%
Portfolio turnover rate 129% 131% 138% 102%
(1) Commencement of operations after the close of business
on December 31, 1994.
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Equity Portfolio
Year Ended December 31,
(For a share outstanding 1998 1997 1996 1995(1)
throughout the year)
Net asset value, beginning of year $35.12 $31.16 $26.03 $20.00
Income from investment operations:
Net investment income 0.50 0.37 0.31 0.28
Net realized and unrealized
gain on investments 3.51 8.57 6.49 7.45
Total income from investment
operations 4.01 8.94 6.80 7.73
Less distributions:
From net investment income (0.50) (0.37) (0.30) (0.28)
In excess of book net
investment income - (0.01) - -
From net realized gain on investments - (4.59) (1.30) (1.41)
In excess of book net realized
gain on investments - (0.01) (0.07) (0.01)
Total distributions (0.50) (4.98) (1.67) (1.70)
Net asset value, end of year $38.63 $35.12 $31.16 $26.03
Total return 11.42% 29.08% 26.26% 38.85%
Supplemental data and ratios:
Net assets, end of year (in thousands) $717,267 $371,402 $149,125 $46,788
Ratio of expenses to average net assets:
Before expense reimbursement 0.91% 0.97% 1.12% 1.44%
After expense reimbursement 0.80% 0.80% 0.80% 0.80%
Ratio of net investment income to
average net assets:
Before expense reimbursement 1.28% 0.89% 0.83% 0.85%
After expense reimbursement 1.39% 1.06% 1.15% 1.49%
Portfolio turnover rate 133% 121% 125% 105%
(1) Commencement of operations after the close of business
on December 31, 1994.
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Select Equity Portfolio
Year Ended
(For a share outstanding throughout the year) December 31, 1998(1)
Net asset value, beginning of year $20.00
Income from investment operations:
Net investment income 0.28
Net realized and unrealized
gain on investments 2.78
Total income from investment operations 3.06
Less distributions:
From net investment income (0.29)
Total distributions (0.29)
Net asset value, end of year $22.77
Total return 15.33%
Supplemental data and ratios:
Net assets, end of year (in thousands) $9,581
Ratio of expenses to average net assets:
Before expense reimbursement 3.34%
After expense reimbursement 0.80%
Ratio of net investment income to average net assets:
Before expense reimbursement (0.72)%
After expense reimbursement 1.82%
Portfolio turnover rate 250%
(1) Commencement of operations after the close of
business on December 31, 1997.
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Euro Select Equity Portfolio
Year Ended
(For a share outstanding throughout the year) December 31, 1998(1)
Net asset value, beginning of year $20.00
Income from investment operations:
Net investment income 0.35
Net realized and unrealized
gain on investments 5.07
Total income from investment operations 5.42
Less distributions:
From net investment income (0.37)
From net realized gain on investments (0.73)
Total distributions (1.10)
Net asset value, end of year $24.32
Total return 27.40%
Supplemental data and ratios:
Net assets, end of year (in thousands) $28,034
Ratio of expenses to average net assets:
Before expense reimbursement 1.67%
After expense reimbursement 1.00%
Ratio of net investment income to average net assets:
Before expense reimbursement 1.02%
After expense reimbursement 1.69%
Portfolio turnover rate 272%
(1) Commencement of operations after the close of
business on December 31, 1997.
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Prior Performance of the Adviser
The performance information set forth below for
the private accounts of ICAP has been calculated in
accordance with recommended standards of the
Association of Investment Management and Research
("AIMR"), retroactively applied to all time periods.
All returns presented were calculated on a total return
basis and include, if any, all dividends, interest,
accrued income and realized and unrealized gains and
losses. Total return is calculated quarterly in
accordance with the "time-weighted" rate of return
method provided for by AIMR standards, accounted for on
a trade-date and accrual basis. AIMR standards for the
calculation of total return differ from the standards
required by the SEC for the calculation of average
annual total return. Principal additions and
withdrawals are weighted in computing the quarterly
returns based on the timing of these transactions.
Annual returns are derived from quarterly returns.
Since 1970, ICAP has managed separate private
accounts (the "Private Accounts") which pursue
substantially the same investment objective, policies
and strategies, and which are managed in the same
manner, as the Discretionary Equity Portfolio, and
since 1991, ICAP has managed Private Accounts which
pursue substantially the same investment objective,
policies and strategies, and which are managed in the
same manner, as the Equity Portfolio. ICAP believes
that it has produced outstanding investment results
over time for its Private Accounts. The Private
Accounts are not subject to the same types of expenses
to which the Discretionary Equity and Equity Portfolios
are subject nor to the specific tax restrictions and
investment limitations imposed on the Portfolios by the
federal tax and securities laws. The following chart
illustrates how the performance of ICAP's Discretionary
Equity Composite (a composite including all of ICAP's
discretionary equity Private Accounts) and its Equity
Composite (a composite including all of ICAP's equity
Private Accounts) compares, where applicable, to the
average performance of the S&P 500 for the periods
shown. Also included in the chart is the performance
of the Discretionary Equity and Equity Portfolios. The
performance results of the composites described below
could have been adversely affected if the Private
Accounts had been regulated as investment companies
under the federal tax and securities laws.
ICAP's Discretionary Equity and Equity Composites
and Discretionary Equity and Equity Portfolios
Calendar Year Performance vs. S&P 500 Performance
Calendar Year Total Return
ICAP Discretionary Discretionary ICAP Equity Equity
Time Period Equity Composite Equity Portfolio Composite Portfolio S&P 500
1998 10.22% 10.17% 11.53% 11.42% 28.58%
1997 28.43% 28.60% 29.17% 29.08% 33.34%
1996 25.27% 25.55% 26.47% 26.26% 22.99%
1995 36.91% 35.21% 39.72% 38.85% 37.54%
1994 0.96% N/A 0.53% N/A 1.28%
1993 15.49% N/A 19.34% N/A 10.06%
1992 6.35% N/A 10.80% N/A 7.62%
1991 32.42% N/A N/A N/A 30.41%
1990 0.48% N/A N/A N/A -3.10%
1989 32.32% N/A N/A N/A 31.68%
The ICAP composite performance presented above
reflects the performance of the Private Accounts
included in the Discretionary Equity and Equity
Composites reduced by the total operating expenses
(before waivers and/or reimbursements) for the
Discretionary Equity and Equity Portfolios,
respectively, as set forth under "Fees and Expenses" on
page 9. The performance of the Discretionary Equity
and Equity Portfolios has been reduced by the total
operating expenses actually incurred by each Portfolio
for the periods indicated. The S&P 500 returns assume
reinvestment of all dividends paid by the stocks
included in the index, but do not include brokerage
commissions or other fees an investor would incur by
investing in the portfolio of stocks comprising the
index. The Discretionary Equity and Equity Composites
represent ICAP's past performance in managing private
accounts and
<PAGE>
should not be interpreted as indicative of
the past or future performance of the Discretionary
Equity or Equity Portfolios.
In addition to the Private Accounts, from January
through December 1997, ICAP funded and managed a single
separate account (the "Euro Account") which pursued
substantially the same investment objective, policies
and strategies, and employed the same management style,
as that of the Euro Select Equity Portfolio. After the
close of business on December 31, 1997, all of the
assets in the Euro Account were contributed to the Euro
Select Equity Portfolio in exchange for shares in the
Portfolio. Like the Private Accounts, the Euro Account
was not subject to the same types of expenses to which
the Euro Select Equity Portfolio is subject nor to the
specific tax restrictions and investment limitations
imposed on the Portfolio by the federal tax and
securities laws. The following chart compares the
performance of the Euro Account to the average
performance of the MSCI-Europe Index for the period
from January 1, 1997 to December 31, 1997. The
performance results of the Euro Account described below
could have been adversely affected if the Euro Account
had been regulated as an investment company under the
federal tax and securities laws.
ICAP's Euro Account Performance vs. MSCI-Europe Index
Performance through December 31, 1997
Total Return
Time Period Euro Account MSCI-Europe Index
1st Quarter, 1997 6.5% 4.9%
2nd Quarter, 1997 13.5% 8.9%
3rd Quarter, 1997 10.4% 8.3%
4th Quarter, 1997 -3.3% 0.1%
1997 29.1% 23.8%
The ICAP performance presented above reflects the
performance of the Euro Account reduced by the total
operating expenses (before waivers and/or
reimbursements) for the Euro Select Equity Portfolio as
set forth under "Fees and Expenses" on page 9. The
MSCI-Europe Index returns assume reinvestment of all
dividends paid by the stocks included in the index net
of foreign withholding taxes, but do not include
brokerage commissions or other fees an investor would
incur by investing in the portfolio of stocks
comprising the index. The Euro Account performance
represents ICAP's past performance in managing a
private account and should not be interpreted as
indicative of the past or future performance of the
Euro Select Equity Portfolio.
The performance of the Euro Select Equity
Portfolio for the period from January 1, 1998 through
December 31, 1998 and for the quarter ended March 31,
1999, as compared to the performance of the MSCI-Europe
Index for the same periods is as follows:
Total Return
Euro Select
Time Period Equity Portofolio MSCI-Europe Index
1st Quarter, 1998 21.20% 20.30%
2nd Quarter, 1998 10.30% 5.14%
3rd Quarter, 1998 -23.27% -14.42%
4th Quarter, 1998 24.20% 18.72%
1998 27.40% 28.53%
1st Quarter, 1999 2.60% -2.11%
The Euro Select Equity Portfolio commenced
operations after the close of business on December 31,
1997. The performance of the Euro Select Equity
Portfolio has been reduced by the total operating
expenses actually incurred by the Portfolio for the
periods indicated.
<PAGE>
MANAGEMENT OF THE PORTFOLIOS
Investment Adviser
Institutional Capital ("ICAP") has been in the
investment management business since 1970, managing
money for some of the world's largest and most
respected corporations and institutions. As of March
31, 1999, ICAP had approximately $12 billion in assets
under management. ICAP's principal business address is
225 West Wacker Drive, Suite 2400, Chicago, Illinois
60606-1229.
The Discretionary Equity, Equity and Select Equity
Portfolio each pay ICAP an annual management fee of
0.80% of the Portfolio's average net assets. The
advisory fee is accrued daily and paid monthly.
Pursuant to an expense cap agreement dated April 30,
1999 between ICAP and the Portfolios, ICAP agreed to
waive its management fee and/or reimburse each
Portfolio's operating expenses to the extent necessary
to ensure that each Portfolio's total operating
expenses would not exceed 0.80% of its average net
assets. The term of this expense cap agreement is 12
months. Since inception of the Portfolios, ICAP has
voluntarily reimbursed each Portfolio's operating
expenses to the extent necessary to ensure that each
Portfolio's total operating expenses would not exceed
0.80% of its average net assets.
The Euro Select Equity Portfolio pays ICAP an
annual management fee of 1.00% of the Portfolio's
average net assets. The advisory fee is accrued daily
and paid monthly. Pursuant to the expense cap
agreement, ICAP agreed to waive its management fee
and/or reimburse the Portfolio's operating expenses to
the extent necessary to ensure that the Portfolio's
total operating expenses would not exceed 1.00% of its
average net assets. The term of this expense cap
agreement is 12 months. Since inception of the
Portfolio, ICAP has voluntarily reimbursed the
Portfolio's operating expenses to the extent necessary
to ensure that the Portfolio's total operating expenses
would not exceed 1.00% of its average net assets.
The expense cap agreement has the effect of
lowering the overall expense ratio for the applicable
Portfolio and increasing the overall return to
investors during the term of the agreement.
Investment Team
The investment decisions for each Portfolio are
made through a team approach, with all of the ICAP
investment professionals contributing to the process.
The senior members of the investment management team
average more than 20 years of experience in the
investment industry, including more than 16 years with
ICAP. Each investment professional has developed an
expertise in at least one functional investment area,
including equity research, strategy, fixed-income
analysis, quantitative research, technical research and
trading. Moreover, each of the senior members of the
investment management team is responsible for
monitoring one or more economic sectors, which has
enabled ICAP to develop expertise across all
industries. The other investment professionals on the
investment management team provide analytical support,
research and expertise to the entire team. Formal
investment management team meetings are generally held
several times each week. At these meetings, a
comprehensive review of ICAP's investment positions is
undertaken. Pertinent information from outside sources
is shared and incorporated into the investment outlook.
The investment strategy, each asset sector and each
individual security holding are reviewed to verify
their continued appropriateness, and investment
recommendations are presented to the entire team for
decisions.
YOUR ACCOUNT
How to Contact ICAP
For overnight deliveries, use:
ICAP Funds, Inc.
c/o Sunstone Financial Group, Inc.
207 East Buffalo Street
Suite 315
Milwaukee, Wisconsin 53202-5712
<PAGE>
For regular mail deliveries, use:
ICAP Funds, Inc.
c/o Sunstone Financial Group, Inc.
P.O. Box 2160
Milwaukee, Wisconsin 53201-2160
By telephone:
888-221-ICAP (4227)
Sunstone Financial Group, Inc. serves as the
Portfolios' transfer agent (the "Transfer Agent").
Minimum Investments
The minimum investment requirements for each Portfolio are as follows:
* Initial investment: $10,000
* Subsequent investments: $ 1,000
* Automatic Investment Plan ("AIP"):$ 5,000
(to maintain the plan, you must invest
at least $250 per transaction)
The Portfolios may change or waive these minimums
at any time; you will be given at least 30 days
notice of any increase in the minimum dollar
amount of purchases.
How to Open an Account
* Read this Prospectus carefully.
* Complete the appropriate parts of the Purchase
Application, carefully following the instructions. If
you have questions, please contact your investment
professional or call us at 888-221-ICAP (4227).
* Make your initial investment, and any subsequent
investments, following the instructions set forth
below. Send all items to one of the addresses
referenced in "How to Contact ICAP".
* All applications to purchase shares are subject to
acceptance by the Portfolios and are not binding until
so accepted. The Portfolios reserve the right to
decline a purchase application in whole or in part.
On the application, you will be asked to certify
that your Social Security or Taxpayer
Identification Number is correct and that you are
not subject to backup withholding. In order to do
this, an original signed Purchase Application must
be on file with the Transfer Agent. If you are
subject to the 31% backup withholding or you did
not certify your Taxpayer Identification Number,
the IRS requires the Portfolios to withhold 31% of
any dividends paid and redemption or exchange
proceeds.
How to Buy Shares
You may pay for your shares by check or wire. You
may also use the AIP or the Exchange privilege. The
share price you receive will be the Portfolio's net
asset value next computed after the time the Transfer
Agent receives your purchase order in proper form. The
Transfer Agent must receive your purchase order by 4:00
p.m., Eastern Time (or by the close of the New York
Stock Exchange (the "NYSE")) for your purchase to be
effected on that day. See "Valuation of Portfolio
Shares" on page 24. A confirmation indicating the
details of each purchase transaction will be sent to
you promptly.
By Check
* To establish a new account, see "How to Open an
Account" on page 19.
<PAGE>
* Make out a check (or money order) for the
investment amount, payable to "ICAP Funds." All checks
must be in U.S. dollars and drawn on U.S. banks. Cash,
credit cards, third-party checks and credit card checks
will not be accepted.
* If you wish to make additional purchases, complete
the investment slip that is included with your account
statement, or, if this is not convenient, reference
your name, account number and address on your check.
* Checks are considered received and accepted when
received in good order by the Transfer Agent.
If your check does not clear, you will be charged a $20
service fee. You will also be responsible for any
losses suffered by the Portfolios as a result.
By Wire
* To establish a new account by wire transfer,
please call the Transfer Agent at 888-221-ICAP (4227).
The Transfer Agent must assign an account number to you
prior to wiring funds.
* Instruct your bank to use the following
instructions when wiring funds:
Wire to: UMB Bank, n.a.
ABA Number 101000695
Credit: ICAP Funds, Inc.
Account Number 987-0609665
Further credit: ICAP Funds, Inc.
(name of Portfolio being purchased)
(your Account Number)
(your name or account registration)
(your Social Security or Taxpayer
Identification Number)
* The Transfer Agent must receive your wire by 4:00
p.m., Eastern Time (or by the close of the NYSE) for
your purchase to be effected on that day.
* The Portfolios are not responsible for the
consequences of delays resulting from the banking or
Federal Reserve wire system.
By Automatic Investment Plan ("AIP")
* The AIP allows you to make regular, systematic
investments in one or more Portfolios from your bank
account.
* Applications to establish the AIP on an existing
account are available from the Transfer Agent. Please
call 888-221-ICAP (4227) to obtain an Application.
* Under the AIP, you may choose to make additional
investments on the 5th, 10th, 15th, 20th, 25th and/or
last day of the month (or the following business day if
one of these days falls on a weekend or holiday) in
amounts of $250 or more.
* A service fee of $20 will be deducted from your
account for any AIP purchase that does not clear due to
insufficient funds or if you prevent withdrawal of
funds from the designated account, and your purchase
will be cancelled. You will also be responsible for
any losses suffered by the Portfolios as a result.
* Upon a full redemption, any AIP established on
your account will automatically be terminated, unless
otherwise instructed in writing.
<PAGE>
By Exchange
* You may exchange your shares in one ICAP Portfolio
for shares in any other ICAP Portfolio at any time by
written or telephone request.
* The value of the shares to be exchanged and the
price of the shares being purchased will be the net
asset value next determined after receipt of
instructions in proper form for exchange. Exchange
requests received in proper form by 4:00 p.m., Eastern
Time (or by the close of the NYSE) will be effected on
that day. Please note that an exchange is not a tax-
free transaction.
* Send written exchange requests to one of the
addresses referenced in "How to Contact ICAP" on
page 19.
* Telephone exchange requests may be subject to
limitations, including those relating to frequency,
that may be established from time to time.
* Accounts opened by exchange will have the same
registration and privileges as the existing account.
How to Sell Shares
You may sell (redeem) all or a portion of your
shares at any time. The share price you receive will
be the Portfolio's net asset value next computed after
the time the Transfer Agent receives your redemption
request in proper form. The Transfer Agent must
receive your redemption request by 4:00 p.m., Eastern
Time (or by the close of the NYSE) for your redemption
request to be effected on that day. See "Valuation of
Portfolio Shares" on page 21. The Portfolios normally
will mail or wire your redemption proceeds per your
instructions the next business day and, in any event,
no later than seven business days after receipt by the
Transfer Agent of a redemption request in good order.
Redemptions may be made by written or telephone request
as described below. You may also redeem shares using
the Systematic Withdrawal Plan ("SWP") or the Exchange
privilege. A confirmation indicating the details of
each redemption transaction will be sent to you
promptly.
By Written Request
* Write a letter of instruction or complete a
Redemption Request Form indicating the Portfolio name,
your account number, the name(s) in which the account
is registered and the dollar value or number of shares
you wish to sell.
* Include the signatures of all registered account
holders and any additional documents that may be
required. See "Special Situations" on page 21.
* Send your request to one of the addresses
referenced in "How to Contact ICAP" on page 19. If
your redemption request is inadvertently sent to ICAP,
the investment adviser, whose offices are located in
Chicago, it will be forwarded to the Transfer Agent,
but the effective date of redemption will be delayed
until the request is received by the Transfer Agent.
* Redemption proceeds will be mailed or wired per
your request to the name(s) and address in which the
account is registered or bank of record as shown on the
records of the Transfer Agent, or otherwise according
to your letter of instruction if the request is
received in good order. Please note that a $10 fee
will be deducted from your account if you redeem by
wire.
By Telephone
* Telephone redemption privileges must have been
previously established for your account to use this option.
* To place your redemption request, please call the
Transfer Agent at 888-221-ICAP (4227). Redemption
requests received by 4:00 p.m., Eastern Time (or by the
close of the NYSE) will be effected on that day.
* Redemption requests by telephone are limited to a
minimum of $500 and a maximum of $50,000 per account per day.
* Proceeds redeemed by telephone will be mailed or
wired per your request only to your address or bank of
record as shown on the records of the Transfer Agent.
Please note that a $10 fee will be deducted from your
account if you redeem by wire.
* In order to arrange for telephone redemptions
after an account has been opened or to change the bank
account or address designated to receive redemption
proceeds, a written request must be sent to the
<PAGE>
Transfer Agent. The request must be signed by each
shareholder of the account, with the signatures
guaranteed. Further documentation may be requested
from corporations, executors, administrators, trustees
and guardians. See "Special Situations" on page 21.
* The Portfolios reserve the right to refuse any
request made by telephone and may limit the amount
involved or the number of telephone redemptions.
* Once you place a telephone redemption request, it
cannot be canceled or modified.
* Neither the Portfolios nor the Transfer Agent will
be responsible for the authenticity of redemption
instructions received by telephone. Accordingly, you
bear the risk of loss. However, the Portfolios will
use reasonable procedures to ensure that instructions
received by telephone are genuine, including recording
telephone transactions and sending written confirmation
of such transactions to the investor of record.
* You may experience difficulty in implementing a
telephone redemption during periods of drastic economic
or market changes. If you are unable to contact the
Transfer Agent by telephone, you may also redeem shares
by written request, as noted above.
By Systematic Withdrawal Plan ("SWP")
* The SWP allows you to set up automatic withdrawals
from your account at regular intervals.
* Applications to establish the SWP are available
from the Transfer Agent. Please call 888-221-ICAP
(4227) to obtain an Application.
* To begin withdrawals, you must have an initial
balance of $10,000 in your account and withdraw at
least $1,000 per payment.
* Withdrawals will take place on the 5th, 10th,
15th, 20th, 25th and/or last day of the month (or the
following business day if one of these days falls on a
weekend or holiday), as indicated on your Application.
* Depending upon the size of the account and the
withdrawals requested (and fluctuations in the net
asset value of the shares redeemed), redemptions for
the purpose of satisfying such withdrawals may reduce
or even deplete your account. If the amount remaining
in your account is not sufficient to meet a plan
payment, the remaining amount will be redeemed and the
plan will be terminated.
By Exchange
* You may exchange your shares in one ICAP Portfolio
for shares in any other ICAP Portfolio at any time by
written or telephone request.
* The value of the shares to be exchanged and the
price of the shares being purchased will be the net
asset value next determined after receipt of
instructions in proper form for exchange. Exchange
requests received in proper form by 4:00 p.m., Eastern
Time (or by the close of the NYSE) will be effected on
that day. Please note that an exchange is not a tax-
free transaction.
* Send written exchange requests to one of the
addresses referenced in "How to Contact ICAP" on
page 19.
* Telephone exchange requests may be subject to
limitations, including those relating to frequency,
that may be established from time to time.
* Accounts opened by exchange will have the same
registration and privileges as the existing account.
Signature Guarantees
As a protection to both you and the Portfolios,
the Portfolios require a signature guarantee for all
authorized owners of an account: (i) if you request
that redemption proceeds be mailed or wired to a person
other than the registered owner(s) of the shares, (ii)
if you request that redemption proceeds be mailed or
wired to other than the address or bank account of
record or (iii) if you submit a redemption request
within 30 days of an address change. A signature
guarantee may be obtained from any eligible guarantor
institution. These institutions include banks, savings
and loan associations, credit unions, brokerage firms
and others. A notary public stamp or seal is not
acceptable.
<PAGE>
Special Situations
Redemption requests from corporate, trust, and
institutional accounts, and executors, administrators,
and guardians, require documents in addition to those
described above, evidencing the authority of the
officers, trustees or others. In order to avoid delays
in processing redemption requests for these accounts,
please call the Transfer Agent at 888-221-ICAP (4227)
before making the redemption request to determine what
additional documents are required.
Investments Made Through Financial Services Agents
If you invest through a financial services agent
(rather than directly with the Portfolios through the
Transfer Agent), the policies and fees may be different
than those described. Financial advisers, financial
supermarkets and other financial services agents may
charge transaction and other fees and may set different
minimum investments or limitations on buying and
selling shares. Consult a representative of your
financial services agent if you have any questions.
Your financial services agent is responsible for
transmitting your orders in a timely manner.
Closing of Accounts
Your account may be closed on not less than 30
days notice if, at the time of any redemption of shares
in your account, the value of the remaining shares in
your account falls below $1,000. If the value of your
account does not reach $1,000 within the 30 days, your
entire account will be redeemed and the proceeds sent
to your address of record. In addition, if you attempt
to redeem more than the current market value remaining
in your account after instructions are received by the
Transfer Agent, your account will be redeemed in full
and the proceeds sent to your address of record.
Valuation of Portfolio Shares
The price of Portfolio shares is based on each
Portfolio's net asset value, and is determined as of
the close of trading (generally 4:00 p.m. Eastern Time)
on each day the NYSE is open for business. Net asset
value is calculated by taking the market value of the
Portfolio's total assets, including interest and
dividends accrued but not yet collected, less all
liabilities and dividing by the total number of shares
outstanding. The result, rounded to the nearest cent,
is the net asset value per share. The Portfolios do
not determine net asset value on days the NYSE is
closed. The NYSE is currently closed on New Year's
Day, Martin Luther King, Jr. Day, President's Day, Good
Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. In addition, if
any of these holidays falls on a Saturday, the NYSE
will not be open for trading on the preceding Friday,
and when such holiday falls on a Sunday, the NYSE will
not be open for trading on the succeeding Monday,
unless unusual business conditions exist, such as the
ending of a monthly or yearly accounting period. The
price at which a purchase order or redemption request
is effected is based on the next calculation of net
asset value after the order is placed or the request is
received in proper form. Because the Portfolios may
invest in securities that are primarily listed on
foreign exchanges, and therefore may trade on weekends
or other days when the Portfolios do not price their
shares, the net asset value of a Portfolio's shares may
change on days when shareholders will not be able to
purchase or redeem such shares.
Dividends, Capital Gain Distributions and Taxes
For federal income tax purposes, all dividends and
distributions of net realized short-term capital gains
you receive from the Portfolios are taxable as ordinary
income, whether reinvested in additional shares or
received in cash. Distributions of net realized long-
term capital gains you receive from the Portfolios,
whether reinvested in additional shares or received in
cash, are taxable as a capital gain. The capital gain
holding period (and applicable tax rate) is determined
by the length of time the Portfolios have held the
security and not the length of time you have held
shares in the Portfolios. You will be informed
annually as to the amount and nature of all dividends
and capital gains paid during the prior year. Such
capital gains and dividends may also be subject to
state or local taxes. If you are not required to pay
taxes on your income, you are generally not required to
pay federal income taxes on the amounts distributed to
you.
Dividends are usually distributed quarterly and
capital gains, if any, are usually distributed annually
in December. Please note, however, that the investment
focus of each Portfolio is capital appreciation, not
the production
<PAGE>
of distributions. You should measure
the success of your investment by the value of your
investment at any given time and not by the
distributions you receive.
All dividends and capital gain distributions will
automatically be reinvested in additional shares at the
then prevailing net asset value unless you specifically
request that dividends or capital gains or both be paid
in cash. The election to receive dividends and capital
gain distributions in cash or to reinvest them in
shares may be changed by writing to one of the
addresses referenced in "How to Contact ICAP" on page
19. Such notice must be received at least five days
prior to the record date of any dividend or capital
gain distribution.
If you have elected to receive distribution checks
and the postal or other delivery service is unable to
deliver checks to your address of record, your
distribution option will automatically be converted to
having all distributions reinvested in additional
shares. No interest will accrue on amounts represented
by uncashed distribution or redemption checks.
Shareholder Reports
Financial reports of the Portfolios will be sent
to you at least semi-annually. Annual reports will
include audited financial statements. In addition, an
account statement will be sent to you by the Transfer
Agent at least quarterly.
ADDITIONAL INFORMATION
Year 2000 Issues
The Portfolios' operations depend on the seamless
functioning of computer systems in the financial
service industry. Many computer software systems in
use today cannot properly process date-related
information after December 31, 1999 because of the
method by which dates are encoded and calculated. This
failure, commonly referred to as the "Year 2000 Issue,"
could adversely affect the handling of security trades,
pricing and account servicing for the Portfolios.
The Portfolios have made compliance with the Year
2000 Issue a high priority. Accordingly, the
Portfolios are taking steps that they believe are
reasonably designed to address the Year 2000 Issue,
focusing primarily on the computer software systems of
the Transfer Agent and the Portfolios' Custodian. In
this regard, these service providers have represented
to the Portfolios that they do not currently anticipate
that the Year 2000 Issue will have a material impact on
their ability to continue to fulfill their duties as
service providers to the Portfolios.
With respect to the companies in which the
Portfolios invest and the markets on which their
securities trade, the Portfolios cannot make any
assurances as to their Year 2000 compliance efforts.
In the event that one or more of these companies and/or
financial markets is not Year 2000 compliant, the
Portfolios may be adversely affected.
<PAGE>
Directors Investment Adviser
Pamela H. Conroy Institutional Capital Corporation
Senior Vice President, 225 West Wacker Drive, Suite 2400
Secretary and Director, Chicago, Illinois 60606-1229
Institutional Capital Corporation
Custodian
Dr. James A. Gentry
Professor of Finance, UMB Bank, n.a.
University of Illinois 928 Grand Boulevard
Kansas City, Missouri 64141-6226
Joseph A. Hays
Retired Vice President/ Dividend-Disbursing and Transfer Agent
Corporate Relations,
Tribune Company Sunstone Financial Group, Inc.
P.O. Box 2160
Robert H. Lyon Milwaukee, Wisconsin 53201-2160
President, Chief Investment Officer
and Director, Administrator and Fund Accountant
Institutional Capital Corporation
Sunstone Financial Group, Inc.
Gary S. Maurer 207 East Buffalo Street
Executive Vice President and Director, Suite 400
Institutional Capital Corporation Milwaukee, Wisconsin 53202-5715
Harold W. Nations Auditor
Partner, Holleb & Coff
PricewaterhouseCoopers LLP
Donald D. Niemann 100 East Wisconsin Avenue
Executive Vice President and Director, Suite 1500
Institutional Capital Corporation Milwaukee, Wisconsin 53202-9845
Barbara C. Schanmier Legal Counsel
Senior Vice President and Director,
Institutional Capital Corporation Godfrey & Kahn
780 North Water Street
Officers Milwaukee, Wisconsin 53202-3590
Robert H. Lyon
President
Pamela H. Conroy
Vice President and Treasurer
Donald D. Niemann
Vice President and Secretary
<PAGE>
The Statement of Additional Information for the
Portfolios contains additional information about each
Portfolio and is incorporated into this Prospectus by
reference. Additional information about the
Portfolios' investments is contained in the Portfolios'
annual and semi-annual reports to shareholders. The
Portfolios' annual reports provide a discussion of the
market conditions and investment strategies that
significantly affected each Portfolio's performance
during its last fiscal year. You may receive the
Statement of Additional Information, annual reports and
semi-annual reports without charge, request other
information about the Portfolios and make shareholder
inquiries by contacting the Portfolios at the address,
toll-free telephone number or Website noted in this
Prospectus. These documents may also be obtained from
certain financial intermediaries.
Information about the Portfolios (including the
Statement of Additional Information) can be reviewed
and copied at the SEC's Public Reference Room in
Washington, D.C. Please call the SEC at 800-SEC-0330
for information relating to the operation of the Public
Reference Room. Reports and other information about
the Portfolios are also available on the SEC's Internet
Web site located at http://www.sec.gov. Alternatively,
copies of this information may be obtained, upon
payment of a duplicating fee, by writing the Public
Reference Section of the SEC, Washington, D.C. 20549-
6009.
The Portfolios' 1940 Act File Number is 811-8850.
cCopyright 1999 Institutional Capital Corporation
