NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000
NOTE 1.
ACCOUNTING POLICIES: Hotchkis and Wiley Funds (the "Trust") is registered under the Investment
Company Act of 1940 as a diversified, open-end, management investment company. The Trust was organized as
a Massachusetts business trust on August 22, 1984 and consists of ten series of shares comprising the Balanced
Fund, the Small Cap Fund, the Equity Income Fund, the International Fund, the Total Return Bond Fund, the
Low Duration Fund, the Short-Term Investment Fund, the Mid-Cap Fund, the Global Equity Fund and the
Equity Fund for Insurance Companies (collectively, the "Funds"), the assets of which are invested in separate,
independently managed portfolios. The accompanying financial statements include financial information for the
Low Duration Fund (the "Fund"); financial statements for the other Funds are reported on separately. Investment
operations of the Fund began on May 18, 1993. The Fund seeks to maximize total return, consistent with
preservation of capital.
Effective April 1, 1999, the Fund issued two classes of shares: Investor Class and Distributor Class. Distributor
Class shares are subject to an annual Rule 12b-1 fee of 0.25% of average net assets. Investor Class shares do
not pay a 12b-1 fee. Each class of shares for the Fund has identical rights and privileges except with respect to
Rule 12b-1 fees paid by the Distributor Class, voting rights on matters pertaining to a single class of shares and
the exchange privileges of each class of shares. Sales of Distributor Class shares commenced September 24,
1999. The following is a summary of significant accounting policies followed by the Fund in the preparation of the
financial statements.
SECURITY VALUATION: Portfolio securities that are listed on a securities exchange (whether domestic or
foreign) or The Nasdaq Stock Market ("NSM") are valued at the last sale price as of 4:00 p.m., Eastern Time,
or, in the absence of recorded sales, at the average of readily available clo