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ING Mutual Funds

ING International Growth Fund ("Fund")

 

Supplement dated June 12, 2013

 

to the Fund's Class I Prospectus dated February 28, 2013; and

 

to the Fund's Class I

Summary Prospectus dated February 28, 2013

 

(each a "Prospectus" and collectively "Prospectuses")

 

On May 23, 2013, the Fund's Board of Trustees ("Board") approved a change with respect to the Fund's sub-advisers adding Lazard Asset Management LLC ("Lazard") and J.P.Morgan Investment Management Inc. ("JPMorgan") as additional sub-advisers to the Fund along with a change to the Fund's name and principal investment strategies effective on or about July 1, 2013. Baillie Gifford Overseas Limited ("Baillie Gifford") currently manages approximately 60% of the Fund's assets and T. Rowe Price Associates, Inc. ("T. Rowe Price") currently manages approximately 40% of the Fund's assets. From the opening of business on June 17, 2013 through the close of business on June 30, 2013, the Fund will be in a "transition period" during which time a transition manager will sell a portion of the Fund's assets currently managed by Baillie Gifford and T. Rowe Price and may hold a large portion of these assets in temporary investments. During this time, the Fund may not be pursuing its investment objective and strategies, and limitation on permissible investments and investment restrictions will not apply. The sales and purchases of securities during the transition period are expected to result in buy and sell transactions. Such transactions may be made at a disadvantageous time and may result in the realization of taxable gains or losses for the Fund resulting in taxable distributions to the Fund's shareholders. In addition, these transactions will also result in transactional costs, which are ultimately borne by shareholders. Beginning on or about July 1, 2013, Baillie Gifford, JPMorgan, Lazard and T. Rowe Price will be the Fund's sub-advisers. Baillie Gifford will manage approximately 30% of the Fund's assets, JPMorgan will manage approximately 20% of the Fund's assets, Lazard will manage approximately 30% of the Fund's assets, and T. Rowe Price will manage approximately 20% of the Fund's assets. In conjunction with the change with respect to the Fund's sub-advisers Gerd Woort-Menker will be added as a portfolio manager for the portion of the Fund's assets allocated to JPMorgan and Michael Bennett, Michael Fry, Kevin Matthews, Michael Powers, and John Reinsberg will be added as portfolio managers for the portion of the Fund's assets allocated to Lazard.

 

Beginning on or about July 1, 2013, the Fund's Prospectuses are hereby revised as follows:

 

1.             All references to "ING International Growth Fund" are hereby deleted and replaced with "ING Multi-Manager International Equity Fund."

 

2.             The subsection entitled "Fees and Expenses of the Fund — Portfolio Turnover" of the Fund's Prospectuses is hereby deleted and replaced with the following:

 

Portfolio Turnover % of average value of portfolio

 

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transactions costs. These costs, which are not reflected in Annual Fund Operating Expenses or in the Expense Example, affect the Fund's performance.

 

During the most recent fiscal year, the Fund's portfolio turnover rate was 42% of the average value of its portfolio.

 

On or about July 1, 2013, J.P.Morgan Investment Management Inc. ("JPMorgan") and Lazard Asset Management LLC ("Lazard") will be added as additional sub-advisers to the Fund. Baillie Gifford Overseas Limited ("Baillie Gifford") currently manages approximately 60% of the Fund's assets and T. Rowe Price Associates, Inc. ("T. Rowe Price") currently manages approximately 40% of the Fund's assets. From the opening of business on June 17, 2013 through the close of business on June 30, 2013, the Fund will be in a "transition period" during which time a transition manager will sell a portion of the Fund's assets currently managed by Baillie Gifford and T. Rowe Price which will result in buy and sell transactions. These transactions will likely cause an increase in the Fund's portfolio turnover rate. These transactions could result in the realization of taxable gains or losses for the Fund. In addition, these transactions will result in transaction costs which will ultimately be borne by shareholders.

 

3.             The section entitled "Principal Investment Strategies" of the Fund's Prospectuses is hereby deleted in its entirety and replaced with the following:

 

PRINCIPAL INVESTMENT STRATEGIES

 

Under normal market conditions, the Fund invests at least 80% of its net assets (plus borrowings for investment purposes) in equity securities. The Fund will provide shareholders with at least 60 days' prior notice of any change in this investment policy. The Fund invests at least 65% of its assets in equity securities of companies organized under the laws of, or with principal offices located in, a number of different countries outside of the United States, including companies in countries in emerging markets. The Fund does not focus its investments in a particular industry or country. The Fund may invest in companies of any market capitalization. The equity securities in which the Fund may invest include, but are not limited to, common stocks, preferred stocks, depositary receipts, rights and warrants to buy common stocks, and privately placed securities. The Fund may invest in derivative instruments including options, futures, and forward foreign currency exchange contracts. The Fund may typically use derivatives to seek to reduce exposure to other risks, such as interest rate or currency risk, to substitute for taking a position in the underlying assets, for cash management, and/or to seek to enhance returns in the Fund.

 

The Fund invests its assets in foreign investments which are denominated in U.S. dollars, major reserve currencies and currencies of other countries and can be affected by fluctuations in exchange rates. To attempt to protect against adverse changes in currency exchange rates, the Fund may, but will not necessarily use special techniques such as forward foreign currency exchange contracts.

 

The Fund may invest in other investment companies, including exchange traded funds, to the extent permitted under the Investment Company Act of 1940, as amended, and the rules, regulations, and exemptive orders thereunder ("1940 Act").

 

Baillie Gifford Overseas Limited ("Baillie Gifford"), J.P.Morgan Investment Management Inc. ("JPMorgan"), Lazard Asset Management LLC ("Lazard"), and T. Rowe Price Associates, Inc. ("T. Rowe Price") (each a "Sub-Adviser" and collectively "Sub-Advisers") provide day-to-day management of the Fund. The Sub-Advisers act independently of each other and use their own methodologies for selecting investments. ING Investments, LLC, the Fund's investment adviser, will determine the amount of Fund assets allocated to each Sub-Adviser.

 

Each Sub-Adviser may sell securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into opportunities believed to be more promising, among others.

 

The Fund may lend portfolio securities on a short-term or long-term basis, up to 331/3% of its total assets.

 

Baillie Gifford Overseas Limited

 

In selecting investments for the Fund, Baillie Gifford normally takes into account the industry and country allocations in the Morgan Stanley Capital International - Europe, Australasia, and Far East® ("MSCI EAFE®") Index. A significant part of the assets will normally be divided among continental Europe, the United Kingdom, and Asia (including Australia and New Zealand). Country allocation, however, is driven by stock selection. Baillie Gifford invests in companies that it believes are well-managed, quality businesses that enjoy sustainable, competitive advantages in their marketplace. Baillie Gifford's investment style primarily uses a bottom-up, stock-driven approach, with the objective of selecting stocks that it believes can sustain an above-average growth rate, which is not reflected in the share price.

 

Companies are screened for quality first; valuation is a secondary consideration. Baillie Gifford looks for companies that it believes have attractive industry backgrounds, strong competitive positions within those industries, high-quality earnings, and a positive approach toward shareholders. The main fundamental factors that Baillie Gifford considers in this bottom-up analysis include earnings growth, cash flow growth, profitability, capital structure, and valuation.

 

J.P.Morgan Investment Management Inc.

 

In choosing securities, JPMorgan seeks to provide high total return by investing primarily in equity securities from developed countries included in the Morgan Stanley Capital International - Europe, Australasia and Far East ("MSCI EAFE") Value Index while emphasizing securities that are ranked as undervalued according to its proprietary research while underweighting or avoiding those that appear over-valued. JPMorgan employs a process that combines fundamental research for identifying portfolio securities and currency management decisions. Various models are used to quantify JPMorgan's fundamental stock research, producing a ranking of companies in each industry group according to their relative value. JPMorgan then buys and sells securities, using the research and valuation rankings as well as its assessment of other factors, including: (i) value characteristics such as low price-to-book and price-to-earnings ratios; (ii) catalysts that could trigger a change in a stock's price; (iii) potential reward compared to potential risk; and (iv) temporary mispricings caused by market overreactions.

 

Lazard Asset Management LLC

 

In choosing securities, Lazard normally invests in large non-U.S. companies with market capitalizations in the range of companies included in the Morgan Stanley Capital International ("MSCI") Europe, Australasia and Far East ("EAFE") that Lazard believes are undervalued based on their earnings, cash flow or asset values. Lazard looks for established companies in economically developed countries and may invest in securities of companies whose principal business activities are located in emerging market countries.

 

T. Rowe Price Associates, Inc.

 

While T. Rowe Price invests with an awareness of the global economic backdrop and the outlook for industry sectors and individual countries, bottom-up stock selection is the focus of T. Rowe Price's decision making. Country allocation is driven largely by stock selection, though we may limit investments in markets that appear to have poor overall prospects. Stock selection reflects a growth style. T. Rowe Price relies on a global team of investment analysts dedicated to in-depth fundamental research in an effort to identify companies it believes are capable of achieving and sustaining above-average, long-term earnings growth. T. Rowe Price seeks to purchase stocks of such companies at reasonable prices in relation to present or anticipated earnings, cash flow, or book value.

 

In selecting investments, T. Rowe Price generally favors companies that it believes have one or more of the following characteristics: leading or improving market position; attractive business niche; attractive or improving franchise or industry position; seasoned management; stable or improving earnings and/or cash flow; and sound or improving balance sheet. T. Rowe Price typically focuses investments in large-sized, and to a lesser extent, medium-sized, companies.

 

4.             The section entitled "Principal Risks" of the summary section of the Fund's Prospectuses is hereby deleted and replaced with the following:

 

PRINCIPAL RISKS

 

You could lose money on an investment in the Fund. Any of the following risks, among others, could affect Fund performance or cause the Fund to lose money or to underperform market averages of other funds.

 

Company. The price of a given company's stock could decline or underperform for many reasons including, among others, poor management, financial problems, or business challenges. If a company declares bankruptcy or becomes insolvent, its stock could become worthless.

 

Convertible Securities. Convertible securities are securities that are convertible into or exercisable for common stocks at a stated price or rate. Convertible securities are subject to the usual risks associated with debt securities, such as interest rate and credit risk. In addition, because convertible securities react to changes in the value of the stocks into which they convert, they are subject to market risk.

 

Credit. Prices of bonds and other debt instruments can fall if the issuer's actual or perceived financial health deteriorates, whether because of broad economic or issuer-specific reasons. In certain cases, the issuer could be late in paying interest or principal, or could fail to pay altogether.

 

Currency. To the extent that the Fund invests directly in foreign (non-U.S.) currencies or in securities denominated in, or that trade in, foreign (non-U.S.) currencies, it is subject to the risk that those (non-U.S.) currencies will decline in value relative to the U.S. dollar or, in the case of hedging positions, that the U.S. dollar will decline in value relative to the currency being hedged.

 

Derivative Instruments. Derivative instruments are subject to a number of risks, including the risk of changes in the market price of the underlying securities, credit risk with respect to the counterparty, risk of loss due to changes in interest rates and liquidity risk. The use of certain derivatives may also have a leveraging effect which may increase the volatility of the Fund and reduce its returns. Derivatives may not perform as expected, so the Fund may not realize the intended benefits. When used for hedging, the change in value of a derivative may not correlate as expected with the currency, security or other risk being hedged. In addition, given their complexity, derivatives expose the Fund to the risk of improper valuation.

 

Foreign Investments/Developing and Emerging Markets. Investing in foreign (non-U.S.) securities may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies due to: smaller markets; differing reporting, accounting, and auditing standards; nationalization, expropriation, or confiscatory taxation; foreign currency fluctuations, currency blockage, or replacement; potential for default on sovereign debt; or political changes or diplomatic developments. Markets and economies throughout the world are becoming increasingly interconnected, and conditions or events in one market, country or region may adversely impact investments or issuers in another market, country or region. Foreign investment risks may be greater in developing and emerging markets than in developed markets.

 

Growth Investing. Prices of growth stocks typically reflect high expectations for future company growth, and may fall quickly and significantly if investors suspect that actual growth may be less than expected. Growth companies typically lack any dividends that might cushion price declines. Growth stocks tend to be more volatile than value stocks, and may underperform the market as a whole over any given time period.

 

Interest Rate. With bonds and other fixed rate debt instruments, a rise in interest rates generally causes values to fall; conversely, values generally rise as interest rates fall. The higher the credit quality of the instrument, and the longer its maturity or duration, the more sensitive it is likely to be to interest rate risk. In the case of inverse securities, the interest rate generally will decrease when the market rate of interest to which the inverse security is indexed decreases. As of the date of this Prospectus, interest rates in the United States are at or near historic lows, which may increase the Fund's exposure to risks associated with rising interest rates.

 

Investment Model. The manager's proprietary model may not adequately allow for existing or unforeseen market factors or the interplay between such factors.

 

Liquidity. If a security is illiquid, the Fund might be unable to sell the security at a time when the Fund's manager might wish to sell, and the security could have the effect of decreasing the overall level of the Fund's liquidity. Further, the lack of an established secondary market may make it more difficult to value illiquid securities, which could vary from the amount the Fund could realize upon disposition. The Fund may make investments that become less liquid in response to market developments or adverse investor perception. The Fund could lose money if it cannot sell a security at the time and price that would be most beneficial to the Fund.

 

Market. Stock prices may be volatile and are affected by the real or perceived impacts of such factors as economic conditions and political events. The stock market tends to be cyclical, with periods when stock prices generally rise and periods when stock prices generally decline. Any given stock market segment may time, and stocks as an asset class may underperform bonds or other asset classes during some periods.

 

Market Capitalization. Stocks fall into three broad market capitalization categories - large, mid, and small. Investing primarily in one category carries the risk that, due to current market conditions, that category may be out of favor with investors. If valuations of large-capitalization companies appear to be greatly out of proportion to the valuations of mid- or small-capitalization companies, investors may migrate to the stocks of mid- and small-sized companies causing the Fund that invests in these companies to increase in value more rapidly than a fund that invests in larger, fully-valued companies. Investing in mid- and small-capitalization companies may be subject to special risks associated with narrower product lines, more limited financial resources, smaller management groups, and a more limited trading market for their stocks as compared with larger companies. As a result, stocks of mid- and small-capitalization companies may decline significantly in market downturns.

 

Other Investment Companies. The main risk of investing in other investment companies, including exchange-traded funds, is the risk that the value of the securities underlying an investment company might decrease. Because the Fund may invest in other investment companies, you will pay a proportionate share of the expenses of those other investment companies (including management fees, administration fees, and custodial fees) in addition to the expenses of the Fund.

 

Securities Lending. Securities lending involves two primary risks: "investment risk" and "borrower default risk." Investment risk is the risk that the Fund will lose money from the investment of the cash collateral received from the borrower. Borrower default risk is the risk that the Fund will lose money due to the failure of a borrower to return a borrowed security in a timely manner.

 

Value Investing. Securities that appear to be undervalued may never appreciate to the extent expected. Further, because the prices of value-oriented securities tend to correlate more closely with economic cycles than growth-oriented securities, they generally are more sensitive to changing economic conditions, such as changes in interest rates, corporate earnings and industrial production.

 

An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency.

 

5.             The section entitled "Performance Information — Average Annual Total Returns" of the Fund's Prospectuses is hereby deleted in its entirety and replaced with the following:

 

 

Average Annual Total Returns % (1)

(for the periods ended December 31, 2012)

 

 

 

 

 

1 Yr

 

5 Yrs
(or since
inception)

 

10 Yrs

 

Inception
Date

 

Class I before taxes

 

%

 

20.37

 

2.76

 

N/A

 

01/06/11

 

After tax on distributions

 

%

 

20.18

 

2.56

 

N/A

 

 

After tax on distributions with sale

 

%

 

13.73

 

2.41

 

N/A

 

 

MSCI EAFE® Index (2)

 

%

 

17.32

 

1.83

 

N/A

 

 

MSCI ACW IndexSM Ex-U.S. (2)

 

%

 

16.83

 

0.62

 

N/A

 

 

 

(1)         On or about July 1, 2013, Lazard Asset Management LLC and J.P.Morgan Investment Management Inc. were added as additional sub-advisers to the Fund along with changes to the Fund's name and principal investment strategies.

(2)         The index returns include the reinvestment of dividends and distributions net of withholding taxes, but do not reflect fees, brokerage commissions, or other expenses.