http://www.sec.gov/Archives/edgar/data/916006/000119312515307686/d50199d497.htm497 1 d50199d497.htm BRIDGEWAY FUNDS INC.
Bridgeway Funds, Inc.
Large-Cap Growth Fund (BRLGX)
Supplement dated August 31, 2015 to the Prospectus dated October 31, 2014
and to the Statement of Additional Information (“SAI”)
dated October 31, 2014, as supplemented May 29, 2015
At a meeting of the Board of Directors (the “Board”) of Bridgeway Funds, Inc. (the “Company”) held on August 27, 2015, the Board approved the reorganization (the “Reorganization”) of the Large-Cap Growth Fund (the “Bridgeway Fund”) into the American Beacon Bridgeway Large Cap Growth Fund (the “New Fund”), a newly created series of American Beacon Funds (the “Trust”). The Board determined that the Reorganization is in the best interests of the Bridgeway Fund and its shareholders. The Board also approved a form of Agreement and Plan of Reorganization and Termination (the “Plan”) between the Company, on behalf of the Bridgeway Fund, and the Trust, on behalf of the New Fund, under which the Reorganization will take effect. The Plan provides for the Bridgeway Fund to transfer of all of its assets to the New Fund in exchange for Institutional Class shares of the New Fund, which would be distributed pro rata by the Bridgeway Fund to the holders of its shares in complete liquidation of the Bridgeway Fund, and the assumption by the New Fund of all the liabilities of the Bridgeway Fund. The Plan is subject to shareholder approval as described below.
The effect of the Reorganization is that the Bridgeway Fund’s shareholders will become shareholders of the New Fund. Bridgeway Fund shareholders will receive shares of the New Fund equal in number and value to their shares of the Bridgeway Fund on the closing date of the Reorganization. The Reorganization is expected to be tax-free to the Bridgeway Fund and its shareholders.
The New Fund is designed to be substantially identical from an investment perspective to the Bridgeway Fund. American Beacon Advisors, Inc. will serve as the New Fund’s investment manager and Bridgeway Capital Management, Inc. (“Bridgeway”), the Bridgeway Fund’s investment adviser, will serve as the New Fund’s investment sub-adviser. After the Reorganization, the New Fund will be managed by the same investment management team that is currently responsible for the day-to-day portfolio management of the Bridgeway Fund.
The Plan requires the approval of the shareholders of the Bridgeway Fund. A special shareholder meeting is being called for that purpose and shareholders of the Bridgeway Fund will receive proxy solicitation materials providing them with information about the New Fund (including, among other things, its investment objective, strategies, policies, risks, fees and expenses, and management), the terms of the Plan, and the factors the Board considered in deciding to approve the Plan. If Bridgeway Fund’s shareholders approve the Plan, the Reorganization is expected to take effect in the fourth quarter of 2015. Shareholders should be on the lookout for the proxy solicitation materials, which will arrive by mail. Your vote is very important; please review the materials when they arrive and submit your vote by the deadline.
Please retain this supplement for future reference.
Comments
Apparently my speculation in that thread - that the first fund move was a one-off - was wrong. Still, it's just the large cap Bridgeway funds moving to American Beacon, and as I wrote there, one can see a certain logic in these moves (marketing large cap funds more widely).
But how does this fit in with American Beacon recent shutdown of a bevy of smaller funds? American Beacon Funds to liquidate several funds (MFO thread)? Hard to figure out AB's game plan.
Sorry, for the repeat posting. I should look at some my older postings, but it is hard to keep track of old postings as some occur months ago.
Sorry about the phrasing. I meant that we've seen this pattern (Bridgeway -> AB) before.
"If Bridgeway Fund’s shareholders approve the Plan, the Reorganization is expected to take effect in the fourth quarter of 2015" (see above).
Having said that, Bridgeway could close the fund at any time (either before, but probably after, the vote) to facilitate the transition to AB. As to the date of that vote:
" A special shareholder meeting is being called for that purpose and shareholders of the Bridgeway Fund will receive proxy solicitation materials". It seems the board still has to set the meeting time/place.
(Not available at Schwab, $250K min at Fidelity taxable, Vanguard, E*Trade, TDA. Add more usual suspects as appropriate.)
Regards,
Ted
Ted
http://www.mfwire.com/common/artprint2007.asp?storyID=52540&wireid=2
Disregard what I'm suggesting if you're saving up to meet the $100K min for the Y class shares. At 0.84% ER they're still not as cheap as the Institutional class shares BRVLX (0.79%), but close, and I'm guessing you have access to them since you've got access to A shares load-waived.
Thanks msf for your comment. I'll give it consideration. My portfolio was born and grown, for the most part except for my 401k, profit sharing and health savings account, with A share development through the past forty years, or so; and, as such, I can now buy a good number of A shares funds at nav or at a discounted price.
One of the crafty ways I found, years ago, was to buy A shares in a family's fixed income funds that usualy had a lower sales load, hold them for the required period of time (usually 90 days), and then do a nav exhange to the equity fund product that most often had a higher sales load. In some cases, this created a tax loss for me if done in a taxable account. In this way, some or most of the commisions paid became tax deductable if a loss took place as the nav exchange is considered a taxable event if done within a taxable account.
Thus far this form of buying has worked out well for me. I am sure if this method of purchase becomes too widely used then steps will be taken to slow or discourage this type of purchase. However, these purchases, at the time made, conformed to the rules found within the fund's perspectus and current tax laws.
This is one of the "many things" I learned from my late father as how he went about opening his special investment position with a fixed income fund, usually holding it through the summer months, and then, come fall, did a nav exchange into an equity fund for his traditional fall stock market special investment (spiff). Any losses he had incurred thus far which would usually include the commission paid became a tax loss for him when he made the nav exchange. Kinda clever? Yes.
Thanks again for making comment. It is indeed appreciated.