EAI SELECT MANAGERS EQUITY FUND
SUPPLEMENT
DATED AS OF NOVEMBER 21, 1996
TO
PROSPECTUS
DATED OCTOBER 1, 1996
1. CONTINUATION OF MANAGER'S FEE WAIVER. The Manager has agreed to continue to
waive a portion of its fees for the second year of the Fund's operation to cap
Fund expenses at 1.15%. As a result, the following changes to the Prospectus are
being made.
A. The following replaces the second footnote ("+") of the table and the
Examples in the section "Fund Expenses" on page 4 of the Prospectus:
+ The Manager has committed to waive a portion of its fees for the first two
years of operation of the Fund (which expires on January 2, 1998) to the
extent necessary to cap overall Fund expenses at 1.15%. Thereafter, the
Manager's fee may not be capped, and, if not, the Manager's fee will be
0.92% per annum of the average daily net asset value of the Fund and the
total Fund operating expenses are expected to be approximately 1.46%,
assuming a constant net asset value for the Fund of at least $75 million.
The table above reflects projected fees after giving effect to the
Manager's fee cap in the first two years of the Fund's operation.
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Example 1 year 3 years
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Assuming a hypothetical $1,000 investment made at
the commencement of the Fund's operations and
assuming (1) a 5% annual rate of return and
(2) redemption at the end of each time period, an
investor would pay the following expenses: $12 $42
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An investor would pay the following expenses on the
same $1,000 investment assuming no redemption at
the end of each time period: $12 $42
B. The following sentence replaces the third sentence of the first
paragraph on page 5 of the Prospectus in the section "Fund Expenses":
The expenses set forth in this table are based on total Fund operating
expenses of 1.15% in the Fund's first two years (as a result of the
Manager's fee cap described above) and total operating expenses of 1.46%
each year thereafter, assuming a constant net asset value for the Fund of
at least $75 million.
C. The following sentence replaces the last paragraph in the section "Fund
Expenses" on page 5, and the last sentence of the first paragraph in the section
"Management of the Fund - Compensation" on page 12, of the Prospectus:
<PAGE>
The Manager has committed to waive a portion of its fees for the first two
years of operation of the Fund (which expires on January 2, 1998) to the
extent necessary to cap overall Fund expenses at 1.15% of the average of
the daily net asset value of the Fund.
2. SUBADVISER. Liberty Investment Management, one of the Fund's Subadvisers,
has announced that it will be purchased by Goldman Sachs Asset Management, a
subsidiary of Goldman Sachs & Co., in January 1997. As a result, the following
change to the Prospectus is being made.
The following sentences are added to the end of the section "Management of
the Fund - The Subadvisers" on page 11 of the Prospectus:
On October 24, 1996, it was announced that Liberty Investment Management
("Liberty") will be purchased by, and will become a division of, Goldman
Sachs Asset Management, itself a subsidiary of Goldman Sachs & Co., on
January 7, 1997. The Manager has been advised that Mr. Herbert Ehlers,
Liberty's primary investment professional, and the other investment
professionals at Liberty will continue to manage the Fund's assets
allocated to Liberty, and that the new entity will keep the Liberty name
and its current location. Since this transaction will change control of
Liberty, it will be an assignment of the Sub-advisory Agreement with the
Fund, which would result in termination of the Agreement effective January
7, 1997. However, at a meeting of the Fund's Board of Trustees held on
October 24, 1996, the Trustees agreed to continue the Sub-advisory
Agreement with Liberty for the period from January 7 through June 30, 1997.
3. MANAGEMENT AND SUB-ADVISORY AGREEMENTS. The Board of Trustees of the Fund
has approved the continuation of the Management and each of the Sub-advisory
Agreements with the Fund, which expire in December 1996. (See also paragraph 2,
above.) As a result, the following change to the Prospectus is being made.
The following sentences are added after the last paragraph on page 12 of
the Prospectus, in the section "Management of the Fund - The Portfolio Manager":
The Management Agreement with the Manager and each of the Sub-advisory
Agreements with the Subadvisers have been approved by the Trustees through,
and will expire on, June 30, 1997. It is expected that those Agreements
will be voted upon by the Trustees on an annual basis thereafter.
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ALL OF THE ABOVE CHANGES, AS APPLICABLE, ARE ALSO INCORPORATED BY REFERENCE
INTO THE FUND'S STATEMENT OF ADDITIONAL INFORMATION DATED OCTOBER 1, 1996.
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