http://www.sec.gov/Archives/edgar/data/916006/000145079112000024/supplement.htm497 1 supplement.htm SUPPLEMENT TO THE PROSPECTUS AND SAI - UPCOMING REORGANIZATIONS
Bridgeway Funds, Inc.
Aggressive Investors 1 Fund (BRAGX)
Aggressive Investors 2 Fund (BRAIX)
Ultra-Small Company Fund (BRUSX)
Micro-Cap Limited Fund (BRMCX)
Supplement dated February 13, 2012 to the Prospectus
and Statement of Additional Information (“SAI”) dated October 31, 2011
At a meeting of the Board of Directors (the “Board”) of Bridgeway Funds, Inc. ( “Bridgeway Funds”) held on February 10, 2012 (the “Meeting”), the Board unanimously approved a Plan of Reorganization (the “AI2 Plan”), providing for: (i) the conversion of the shares of the Aggressive Investors 2 Fund (the “AI2 Fund”) into shares of the Aggressive Investors 1 Fund (the “AI1 Fund”) and (ii) the resulting transfer to the AI1 Fund of all of the property, assets and goodwill of the AI2 Fund (when completed, the “AI2 Conversion”). The Board determined that the AI2 Plan and AI2 Conversion would be in the best interests of the AI1 Fund, the AI2 Fund, and their respective shareholders. The effect of the AI2 Plan and AI2 Conversion will be that the AI2 Fund shareholders would become shareholders of the AI1 Fund.
At the same Meeting, the Board also unanimously approved a Plan of Reorganization (the “MCL Plan”), providing for: (i) the conversion of the shares of the Micro-Cap Limited Fund (the “MCL Fund”) into shares of the Ultra-Small Company Fund (the “USC Fund") and (ii) the resulting transfer to the USC Fund of all of the property, assets and goodwill of the MCL Fund (when completed, the “MCL Conversion”). The Board determined that the MCL Plan and MCL Conversion would be in the best interests of the MCL Fund, the USC Fund, and their respective shareholders. The effect of the MCL Plan and MCL Conversion will be that the MCL Fund shareholders would become shareholders of the USC Fund.
The AI2 Plan and MCL Plan will require the approval of the shareholders of each of the AI2 Fund and MCL Fund, respectively. Separate special meetings of the shareholders are being called for that purpose. Shareholders of the AI2 Fund will receive proxy solicitation materials providing them with information about the AI1 Fund and AI2 Plan and shareholders of the MCL Fund will receive proxy solicitation materials providing them with information about the USC Fund and MCL Plan. If approved by such Fund’s respective shareholders, the AI2 Conversion and MCL Conversion are expected to take effect in the second quarter of 2012. Investors should check the Bridgeway Funds’ website (www.bridgeway.com) for further information.
Lastly, the Board approved certain modifications to the Management Agreement between Bridgeway Capital Management, Inc. (“Bridgeway”) and Bridgeway Funds, related to the AI1 Fund and USC Fund, effective as of February 13, 2012. Accordingly, the Bridgeway Funds’ Prospectus and SAI are hereby amended as follows:
1. The expense cap for the AI1 Fund in the table on page 70 of the Prospectus is reduced to 1.75%.
2. The expense cap for the AI1 Fund in the table on page 24 of the SAI is reduced to 1.75%.
3. The Base Advisory Fee schedule, which will now include an additional breakpoint providing for lower advisory fees, for the AI1 Fund on page 25 of the SAI is deleted and replaced with the following:
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(1) 0.90% of the value of the Fund’s average daily net assets up to $250,000,000;
(2) 0.875% of the next $250,000,000 of such assets;
(3) 0.85% of the next $500,000,000 of such assets and
(4) 0.80% of such assets over $1,000,000,000.
4. The expense cap for the USC Fund in the table on page 70 of the Prospectus is reduced to 1.85%.
5. The expense cap for the USC Fund in the table on page 24 of the SAI is reduced to 1.85%.
This information supplements the Prospectus and SAI of Bridgeway Funds, Inc. dated October 31, 2011.
Please retain this supplement for future reference.
Ironically, I have Aggressive Investors 1 and Microcap Limited funds.
Comments
So I ignored their plans of turning over BRLVX to American Beacon. And now this. I don't own micro cap limited but do own Aggressive Investors 2. I will be better off selling it and buying shares of Aggressive Investors 1.
Wait a sec...maybe I have to remove the mask of charitable person from my eyes and just look elsewhere accepting it is a badly managed organization?
Everyone wait till I sell off my Bridgeway funds. They'll soar!!! Then you can sell.
Someone please shoot me. No wait. First let me sell.
Will have to wait and see if the survivor funds keep to their original objectives or will they change due to reorganization.
The statement doesn't say anything about tax. I assume it will be a non-taxable reorg but I'm not sure what this does with my cost basis. I will wait for more info, but I plan on selling and completing the move to APPLX before the reorg happens.
One funny note is that there was a long period where we Aggresive "2" investors could gloat about better performance than the Aggressive "1" investors. Guess we don't even get that little perk anymore.
TheShadow: I don't think BRUSX is that big of a deal, it was open and I bought shares in it many years ago, and I recall it being open after the crash for a while. In my opinion, BRSIX was always the more attractive fund and it has never been re-opened.
I have a lot of respect for Bridgeway and their unique fee structure. I hope they survive and thrive even after I leave, because their success can only help the fund industry.
What is not posted will the Aggressive Investors 1 be more like Aggressive Investors 2 once the funds merge, or will Aggressive Investors 1 keep its supposed more aggressive investment philosophy. BRUSX has already had subtle changes made to it probably in preparation so BRMCX could be reorganized into it.
To Claimui: To me, owning BRUSX is like someone clamoring to buy SEQUX, to own the mystique of something you were not able to buy for such a long time. I know this as I also own SEQUX in a non-taxable account once it reopened. There were two funds I always wanted, TMCGX and BRUSX. Now, I own TMCGX once it reopened, and now will own BRUSX. It is a matter of personal preference only, nothing more.
BRSIX, a more nearly passive fund, is open.
David
I did own BRSIX for a short time, but I think IWC is equivalent,
or marginally better considering the expenses. Have any of the Bridgeway funds beaten their benchmarks? I respect their ethics, commitment to investors and unique fee structure, but the primary reason we invest is to make money!
http://www.sec.gov/Archives/edgar/data/916006/000145079112000026/ai2intoai1.htm
http://blogs.barrons.com/focusonfunds/2012/02/17/evening-read-texas-teachers-buy-bridgewater-stake/
http://online.wsj.com/article/SB10001424052970204795304577220971350326782.html?KEYWORDS=texas+teachers#printMode