TIP FUNDS, 485BPOS, 1999-01-28

TIP FUNDS
485BPOS, 1999-01-28

Previous: FIRST FEDERAL BANCSHARES OF ARKANSAS INC, SC 13G, 1999-01-28

Next: YORK GROUP INC DE, S-8, 1999-01-28

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 28, 1999

File No. 333-00641
File No. 811-07527
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 /X/
POST-EFFECTIVE AMENDMENT NO. 13
-------------------------------

and

REGISTRATION STATEMENT UNDER
INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT NO. 14
----------------

TIP FUNDS
(formerly, Turner Funds)

(Exact Name of Registrant as Specified in Charter)
c/o The CT Corporation System
2 Oliver Street
Boston, Massachusetts 02109
(Address of Principal Executive Offices, Zip Code)

Registrant's Telephone Number, including Area Code (610) 251-0268

(Name and Address of Agent for Service)

STEPHEN KNEELEY
TURNER INVESTMENT PARTNERS, INC.
1235 WESTLAKES DR., SUITE 350
BERWYN, PENNSYLVANIA 19312-2414

Copies to:

JAMES W. JENNINGS, ESQUIRE JOHN H. GRADY, JR., ESQUIRE
MORGAN, LEWIS & BOCKIUS LLP MORGAN, LEWIS & BOCKIUS LLP
1701 MARKET STREET 1701 MARKET STREET
PHILADELPHIA, PENNSYLVANIA 19103 PHILADELPHIA, PENNSYLVANIA 19103

TITLE OF SECURITIES BEING REGISTERED...UNITS OF BENEFICIAL INTEREST.
- --------------------------------------------------------------------------------
It is proposed that this filing become effective (check appropriate box):
____ immediately upon filing pursuant to paragraph (b)
_X__ on January 29, 1999, pursuant to paragraph (b)
____ 60 days after filing pursuant to paragraph (a)
____ on [date] pursuant to paragraph (a) of Rule 485
____ 75 days after filing pursuant to paragraph (a)(2)

- --------------------------------------------------------------------------------

<PAGE>

[LOGO] TIP Funds

PROSPECTUS
JANUARY 31, 1999

INSTITUTIONAL CLASS SHARES
ADVISER CLASS SHARES
----------------------------------------------------------

TURNER FUNDS:
------------

TURNER ULTRA LARGE CAP GROWTH FUND
TURNER GROWTH EQUITY FUND
TURNER MIDCAP GROWTH FUND
TURNER SMALL CAP GROWTH FUND
TURNER MICRO CAP GROWTH FUND
TURNER SHORT DURATION GOVERNMENT
FUNDS - ONE YEAR PORTFOLIO
TURNER SHORT DURATION GOVERNMENT
FUNDS - THREE YEAR PORTFOLIO
TURNER FIXED INCOME FUND
TIP TARGET SELECT EQUITY FUND

----------------------------------------------------------

INVESTMENT ADVISER:
-------------------

TURNER INVESTMENT PARTNERS, INC.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED ANY FUND SHARES OR
DETERMINED WHETHER THIS PROSPECTUS IS ACCURATE OR COMPLETE.
IT IS A CRIME FOR ANYONE TO TELL YOU OTHERWISE.

<PAGE>

[LOGO] TIP Funds

HOW TO READ THIS PROSPECTUS
- --------------------------------------------------------------------------------

TIP Funds is a mutual fund family that offers shares in separate investment
portfolios (Funds). The Funds have individual investment goals and strategies.
This prospectus gives you important information about the Funds that you should
know before investing. Please read this prospectus and keep it for future
reference.

THIS PROSPECTUS HAS BEEN ARRANGED INTO DIFFERENT SECTIONS SO THAT YOU CAN EASILY
REVIEW THIS IMPORTANT INFORMATION. ON THE NEXT PAGE, THERE IS SOME GENERAL
INFORMATION YOU SHOULD KNOW ABOUT THE FUNDS. FOR MORE DETAILED INFORMATION ABOUT
THE FUNDS, PLEASE SEE:

Turner Ultra Large Cap Growth Fund..............................................
Turner Growth Equity Fund.......................................................
Turner Midcap Growth Fund.......................................................
Turner Small Cap Growth Fund....................................................
Turner Micro Cap Growth Fund....................................................
Turner Short Duration Government Funds-One Year Portfolio.......................
Turner Short Duration Government Funds-Three Year Portfolio.....................
Turner Fixed Income Fund........................................................
TIP Target Select Equity Fund...................................................
The Funds' other investments....................................................
Investment Adviser.............................................................
Purchasing, selling and exchanging Fund shares..................................
Dividends, distributions and taxes..............................................
Financial Highlights............................................................
How to obtain more information about TIP Funds........................Back Cover

For information about key terms and concepts, look for our "________________"
explanations.

Closing the Funds to New Investors at Certain Asset Levels

There are limits to the amount an investment adviser can effectively invest in
certain asset classes. Too many advisers try to manage more and more money
regardless of their capacity to find attractive investments. Turner Investment
Partners will not do this. Turner will close a Fund to most new investors once
assets under management reach certain specified levels. For the Small Cap Growth
Fund, that level has been reached, and the Fund is currently closed to new
investors. Similarly, effective when the assets that Turner manages in its Micro
Cap Growth Equity Style, Midcap Growth Equity Style and the Growth Equity Style
(which includes the assets of each Fund) reach $287 million, $2.6 billion and
$8.6 billion, respectively, the Funds will be closed to new investors. Existing
shareholders of the Funds will be notified before the Funds are closed to new
investors.

Shareholders of the Funds as of the effective date for this closing may continue
to make investments and may open additional account with the Funds, provided the
new accounts are registered in the same name or have the same taxpayer
identification or social security number assigned to them. In addition, certain
limited classes of new investors may also purchase shares of the Funds after
they are closed to new investors.

See "Purchase and Redemption of Shares."

[INSERT ICON MAP]

<PAGE>

INTRODUCTION-INFORMATION COMMON TO ALL FUNDS
- --------------------------------------------------------------------------------

Each Fund is a mutual fund. A mutual fund pools shareholders' money and, using
professional investment managers, invests it in securities.

Each Fund has its own investment goal and strategies for reaching that goal.
The Adviser invests Fund assets in a way that it believes will help each Fund
achieve its goal. Still, investing in the Funds involves risks, and there is no
guarantee that a Fund will achieve its goal. The Adviser's judgments about the
markets, the economy or companies may not anticipate actual market movements,
economic conditions or company performance, and these judgements may affect the
return on your investment. In fact, no matter how good a job the Adviser does,
you could lose money on your investment in a Fund, just as you could with other
investments. A Fund share is not a bank deposit, and it is not insured or
guaranteed by the FDIC or any government agency.

The value of your investment in a Fund is based on the market value of the
securities the Fund holds. These prices change daily due to economic and other
events that affect particular companies and other issuers. These price
movements, sometimes called volatility, may be greater or lesser depending on
the types of securities a Fund owns and the markets in which they trade. The
effect on a Fund's share price of a change in the value of a single security
will depend on how widely the Fund diversifies its holdings.

- --------------------------------------------------------------------------------

YEAR 2000 RISKS

Like other mutual funds (and most organizations around the world), the Funds
could be affected by computer problems related to the transition to the year
2000. While no one knows if these problems will have any impact on the Funds or
on the financial markets in general, the Funds are taking steps to protect
investors. These include efforts to ensure that the Funds' own systems are
prepared to make the transition to the year 2000, and to determine that the
problem will not affect the systems used by the Funds' major service providers.
Whether these steps will be effective can only be known for certain in the year
2000. In addition, year 2000 problems may negatively affect the companies and
governments whose securities the Funds purchase, which may ultimately have an
impact on the value of the Funds' shares. There is additional information on
these risks in the Statement of Additional Information.

<PAGE>

TURNER ULTRA LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY

INVESTMENT GOAL Capital appreciation
INVESTMENT FOCUS Very large capitalization U.S.
common stocks
SHARE PRICE VOLATILITY Medium to high
PRINCIPAL INVESTMENT STRATEGY Attempts to identify very large
capitalization U.S. companies with
strong earnings growth potential
INVESTOR PROFILE Investors seeking long-term growth
of capital who can withstand the
share price volatility of equity
investing.

- --------------------------------------------------------------------------------

[ICON] INVESTMENT STRATEGY OF THE TURNER ULTRA LARGE CAP GROWTH FUND

The Turner Ultra Large Cap Growth Fund invests primarily in common stocks and
other equity securities of U.S. companies with very large market capitalizations
(i.e., over $10 billion) that Turner Investment Partners believes have strong
earnings growth potential. The Fund may also purchase securities of smaller
companies that offer growth potential. The Fund will invest in securities of
companies that are diversified across economic sectors, and will attempt to
maintain sector concentrations that approximate those of its current benchmark,
the Russell 200 Growth Index.

Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs (and thus lower performance) and
additional capital gains tax liabilities.

[ICON] WHAT ARE THE RISKS OF INVESTING IN THE FUND?

Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's equity
securities may fluctuate drastically from day-to-day. Individual companies may
report poor results or be negatively affected by industry and/or economic trends
and developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund. In addition, the Fund is subject to the
risk that its principal market segment, large capitalization growth stocks, may
underperform compared to other market segments or to the equity markets as a
whole.

TURNER'S EQUITY INVESTMENT PHILOSOPHY

Turner believes earnings expectations drive stock prices. Turner invests in
companies with strong earnings dynamics, and sells those with deteriorating
earnings prospects. Turner believes forecasts for market timing and sector
rotation are unreliable, and introduce an unacceptable level of risk. As a
result, all portfolios are fully invested and maintain sector weightings that
match those of a benchmark index. Turner believes it is imprudent to be overly
concentrated in any individual security. Therefore, portfolio exposure is
limited to a maximum of 2% in any single issue (except the securities that
comprise more than 2% of the benchmark index, in which case a Fund may hold up
to 120% of an issue's index weighting). These risk control measures allow
Turner's stock selection process to be the primary determinant of performance.

<PAGE>

TURNER ULTRA LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION

The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.

This bar chart shows changes in the performance of the Fund's Institutional
Class Shares from year to year for one year.*

45.22%
1998

[BAR CHART]

* The performance information shown above is based on a calendar
year.

Best Quarter Worst Quarter
29.73% (8.19)%
(12/31/98) (9/30/98)

This table compares the Fund's average annual total returns for the
periods ended December 31, 1998, to those of the Russell Top 200
Growth Index.

1 YEAR SINCE INCEPTION
(2/1/97)
Turner Ultra Large Cap Growth Fund 45.22% 38.58%
Russell Top 200 Growth Index 45.09% 41.32%*

- --------------------------------------------------------------------------------
* The inception date for the Index is January 31, 1997.

WHAT IS AN INDEX?

An index measures the market price of a specific group of securities in a
particular market of securities in a market sector. You cannot invest directly
in an index. An index does not have an investment adviser and does not pay any
commissions or expenses. If an index had expenses, its performance would be
lower. The Russell Top 200 Growth Index is a widely-recognized,
capitalization-weighted (companies with larger market capitalizations have more
influence than those with smaller market capitalization) index of the 200
largest U.S. companies with higher growth rates and price-to-price book ratios.

- --------------------------------------------------------------------------------
[icon] FUND FEES AND EXPENSES

Every mutual fund has operating expenses to pay for professional advisory,
shareholder, distribution, administration and custody services and other costs
of doing business. This table describes the Fund's fees and expenses that you
may pay indirectly if you hold shares of the Fund.

ANNUAL FUND OPERATING EXPENSES
INSTITUTIONAL
CLASS SHARES

Investment Advisory Fees 0.75%
Distribution (12b-1) Fees None
Other Expenses 6.95%
-----
TOTAL ANNUAL FUND OPERATING EXPENSES 7.70%
Fee waivers and expense reimbursements 6.70%
-----
NET TOTAL OPERATING EXPENSES 1.00%*
- --------------------------------------------------------------------------------
* THE FUND'S ADVISER HAS CONTRACTUALLY AGREED TO WAIVE FEES AND TO REIMBURSE
EXPENSES IN ORDER TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING 1.00% FOR A
PERIOD OF ONE YEAR, RENEWABLE AT THE END OF EACH FISCAL YEAR. IN ADDITION, THE
FUND HAS AN ARRANGEMENT WITH CERTAIN BROKER DEALERS WHO HAVE AGREED TO PAY
CERTAIN FUND EXPENSES IN RETURN FOR THE DIRECTION OF A PERCENTAGE OF THE FUND'S
BROKERAGE TRANSACTIONS. AS A RESULT OF THESE ARRANGEMENTS, IT IS ANTICIPATED
THAT THE FUND'S EXPENSES WILL BE REDUCED. For more information about these fees,
see "Investment Adviser" and "Distribution of Fund Shares."
- --------------------------------------------------------------------------------

EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated. The Example also
assumes that each year your investment has a 5% return and Fund expenses remain
the same. Although your actual costs and returns might be different, your
approximate costs of investing $10,000 in the Fund would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Turner Ultra Large Cap Growth Fund $102 $318 $552 $1,225
</TABLE>

<PAGE>

TURNER GROWTH EQUITY FUND
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY

INVESTMENT GOAL Capital appreciation
INVESTMENT FOCUS U.S. common stocks
SHARE PRICE VOLATILITY Medium to high
PRINCIPAL INVESTMENT STRATEGY Attempts to identify reasonably
priced large and mid-cap U.S.
companies with strong earnings
growth potential
INVESTOR PROFILE Investors seeking long-term growth
of capital who can withstand the
share price volatility of equity
investing.

- --------------------------------------------------------------------------------

[ICON] INVESTMENT STRATEGY OF THE TURNER GROWTH EQUITY FUND

The Turner Growth Equity Fund invests primarily in common stocks and other
equity securities of U.S. companies with large and medium capitalizations that
Turner Investment Partners believes have strong earnings growth potential and
that are reasonably valued at the time of purchase. The Fund will invest in
securities of companies that are diversified across economic sectors, and will
attempt to maintain sector concentrations that approximate those of its current
benchmark, the Russell 1000 Growth Index.

Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs (and thus lower performance) and
additional capital gains tax liabilities.

[ICON] WHAT ARE THE RISKS OF INVESTING IN THE FUND?

Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's equity
securities may fluctuate drastically from day-to-day. Individual companies may
report poor results or be negatively affected by industry and/or economic trends
and developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund. In addition, the Fund is subject to the
risk that its principal market segment, large and medium capitalization growth
stocks, may underperform compared to other market segments or to the equity
markets as a whole.

The medium capitalization companies the Fund invests in may be more vulnerable
to adverse business or economic events than larger, more established companies.
In particular, these mid-sized companies may have limited product lines, markets
and financial resources, and may depend upon a relatively small management
group.

TURNER'S EQUITY INVESTMENT PHILOSOPHY

<PAGE>

TURNER GROWTH EQUITY FUND
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION

This bar chart shows changes in the performance of the Fund's Institutional
Class Shares from year to year for six years.*

15.38% -6.73% 29.96% 19.23% 31.36% 38.07%
1993 1994 1995 1996 1997 1998

[BAR CHART]

* The performance information shown above is based on a calendar
year.

Best Quarter Worst Quarter
25.63% -8.85%
(12/31/98) (9/30/98)

This table compares the Fund's average annual total returns for the
periods ended December 31, 1998, to those of the Russell 1000
Growth Index.

1 YEAR 5 YEARS SINCE INCEPTION
(3/11/92)
Turner Growth Equity Fund 38.07% 21.26% 19.81%
Russell 1000 Growth Index 38.71% 25.70% 20.24%*

- --------------------------------------------------------------------------------
* The inception date for the Index is March 1, 1992.

WHAT IS AN INDEX?

An index measures the market price of a specific group of securities in a
particular market of securities in a market sector. You cannot invest directly
in an index. An index does not have an investment adviser and does not pay any
commissions or expenses. If an index had expenses, its performance would be
lower. The Russell 1000 Growth Index is a widely-recognized,
capitalization-weighted (companies with larger market capitalizations have more
influence than those with smaller market capitalization) index of the 1000
largest U.S. companies with higher growth rates and price-to-book ratios.

- --------------------------------------------------------------------------------
[icon] FUND FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES
INSTITUTIONAL
CLASS SHARES

Investment Advisory Fees 0.75%
Distribution (12b-1) Fees None
Other Expenses 0.33%
------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.08%
Fee waivers and expense reimbursements 0.08%
------
NET TOTAL OPERATING EXPENSES 1.00%*
- --------------------------------------------------------------------------------

* THE FUND'S ADVISER HAS CONTRACTUALLY AGREED TO WAIVE FEES AND TO REIMBURSE
EXPENSES IN ORDER TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING 1.00% FOR A
PERIOD OF ONE YEAR, RENEWABLE AT THE END OF EACH FISCAL YEAR. IN ADDITION, THE
FUND HAS AN ARRANGEMENT WITH CERTAIN BROKER DEALERS WHO HAVE AGREED TO PAY
CERTAIN FUND EXPENSES IN RETURN FOR THE DIRECTION OF A PERCENTAGE OF THE FUND'S
BROKERAGE TRANSACTIONS. AS A RESULT OF THESE ARRANGEMENTS, IT IS ANTICIPATED
THAT THE FUND'S EXPENSES WILL BE REDUCED. For more information about these fees,
see "Investment Advisers" and "Distribution of Fund Shares."
- --------------------------------------------------------------------------------

EXAMPLE

1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Turner Growth Equity Fund $102 $318 $552 $1,225
</TABLE>

<PAGE>

TURNER MIDCAP GROWTH FUND
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY

INVESTMENT GOAL Capital appreciation
INVESTMENT FOCUS Mid-cap U.S. common stocks
SHARE PRICE VOLATILITY High
PRINCIPAL INVESTMENT STRATEGY Attempts to identify medium
capitalization U.S. companies with
strong earnings growth potential
INVESTOR PROFILE Investors seeking long-term growth
of capital who can withstand the
share price volatility of equity
investing.

- --------------------------------------------------------------------------------

[ICON] INVESTMENT STRATEGY OF THE TURNER MIDCAP GROWTH FUND

The Turner Midcap Growth Fund invests primarily in common stocks and other
equity securities of U.S. companies with medium market capitalizations (i.e.,
between $1 billion and $8 billion) that Turner Investment Partners believes have
strong earnings growth potential. The Fund will invest in securities of
companies that are diversified across economic sectors, and will attempt to
maintain sector concentrations that approximate those of its current benchmark,
the Russell Midcap Growth Index.

Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs (and thus lower performance) and
additional capital gains tax liabilities.

[ICON] WHAT ARE THE RISKS OF INVESTING IN THE FUND?

Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's equity
securities may fluctuate drastically from day-to-day. Individual companies may
report poor results or be negatively affected by industry and/or economic trends
and developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund. In addition, the Fund is subject to the
risk that its principal market segment, medium capitalization growth stocks, may
underperform compared to other market segments or to the equity markets as a
whole.

The medium capitalization companies the Fund invests in may be more vulnerable
to adverse business or economic events than larger, more established companies.
In particular, these mid-size companies may have limited product lines, markets
and financial resources, and may depend upon a relatively small management
group.

TURNER'S EQUITY INVESTMENT PHILOSOPHY

<PAGE>

TURNER MIDCAP GROWTH FUND
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION

This bar chart shows changes in the performance of the Fund's Institutional
Class Shares from year to year for two years.*

40.56% 26.52%
1997 1998

[BAR CHART]

* The performance information shown above is based on a calendar
year.

Best Quarter Worst Quarter
26.24% -16.65%
(12/31/98) (9/30/98)

This table compares the Fund's average annual total returns for the
periods ended December 31, 1998, to those of the Russell Midcap
Growth Index.

1 YEAR SINCE INCEPTION
(10/1/96)
Turner Midcap Growth Fund 26.52% 31.06%
Russell Midcap Growth Index 17.86% 20.05%*

- --------------------------------------------------------------------------------
* The inception date for the Index is October 31, 1996.

WHAT IS AN INDEX?

An index measures the market price of a specific group of securities in a
particular market of securities in a market sector. You cannot invest directly
in an index. An index does not have an investment adviser and does not pay any
commissions or expenses. If an index had expenses, its performance would be
lower. The Russell Midcap Index is a widely-recognized, capitalization-weighted
(companies with larger market capitalizations have more influence than those
with smaller market capitalizations) index of the 800 smallest U.S. companies
out of the 1,000 largest companies.

- --------------------------------------------------------------------------------
[icon] FUND FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES

INSTITUTIONAL
CLASS SHARES

Investment Advisory Fees 0.75%
Distribution (12b-1) Fees None
Other Expenses 0.89%
-----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.64%
Fee waivers and expense reimbursements 0.39%
-----
NET TOTAL OPERATING EXPENSES 1.25%*
- --------------------------------------------------------------------------------
* THE FUND'S ADVISER HAS CONTRACTUALLY AGREED TO WAIVE FEES AND TO REIMBURSE
EXPENSES IN ORDER TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING 1.25% FOR A
PERIOD OF ONE YEAR, RENEWABLE AT THE END OF EACH FISCAL YEAR. IN ADDITION, THE
FUND HAS AN ARRANGEMENT WITH CERTAIN BROKER DEALERS WHO HAVE AGREED TO PAY
CERTAIN FUND EXPENSES IN RETURN FOR THE DIRECTION OF A PERCENTAGE OF THE FUND'S
BROKERAGE TRANSACTIONS. AS A RESULT OF THESE ARRANGEMENTS, IT IS ANTICIPATED
THAT THE FUND'S EXPENSES WILL BE REDUCED. For more information about these fees,
see "Investment Adviser" and "Distribution of Fund Shares."
- --------------------------------------------------------------------------------
EXAMPLE

1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Turner Midcap Growth Fund $127 $397 $686 $1,511
</TABLE>

<PAGE>

TURNER SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY

INVESTMENT GOAL Capital appreciation
INVESTMENT FOCUS Small cap U.S. common stocks
SHARE PRICE VOLATILITY High
PRINCIPAL INVESTMENT STRATEGY Attempts to identify small cap U.S.
companies with strong earnings
growth potential
INVESTOR PROFILE Investors seeking long-term growth
of capital who can withstand the
share price volatility of small
cap equity investing.

- --------------------------------------------------------------------------------

[ICON] INVESTMENT STRATEGY OF THE TURNER SMALL CAP GROWTH FUND

The Turner Small Cap Growth Fund invests primarily in common stocks and other
equity securities of U.S. companies with small market capitalizations (i.e.,
under $2 billion) that Turner Investment Partners believes have strong earnings
growth potential. The Fund will invest in securities of companies that are
diversified across economic sectors, and will attempt to maintain sector
concentrations that approximate those of its current benchmark, the Russell 2000
Growth Index.

Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs (and thus lower performance) and
additional capital gains tax liabilities.

[ICON] WHAT ARE THE RISKS OF INVESTING IN THE FUND?

Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's equity
securities may fluctuate drastically from day-to-day. Individual companies may
report poor results or be negatively affected by industry and/or economic trends
and developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund. In addition, the Fund is subject to the
risk that its principal market segment, small cap U.S. growth stocks, may
underperform compared to other market segments or to the equity markets as a
whole.

The smaller capitalization companies the Fund invests in may be more vulnerable
to adverse business or economic events than larger, more established companies.
In particular, these small companies may have limited product lines, markets and
financial resources, and may depend upon a relatively small management group.
Therefore, small cap stocks may be more volatile than those of larger companies.
These securities may be traded over-the-counter or listed on an exchange and may
or may not pay dividends.

TURNER'S EQUITY INVESTMENT PHILOSOPHY

Turner believes earnings expectations drive stock prices. Turner invests in
companies with strong earnings dynamics, and sells those with deteriorating
earnings prospects. Turner believes forecasts for market timing and sector
rotation are unreliable, and introduce an unacceptable level of risk. As a
result, all portfolios are fully invested and maintain sector weightings that
match that of a benchmark index. Turner believes it is imprudent to be overly
concentrated in any individual security. Therefore, portfolio exposure is
limited to a maximum of 2% in any single issue (except the securities that
comprise more than 2% of the benchmark index, in which case a Fund may hold up
to 120% of an issue's index weighting). These risk control measures allow
Turner's stock selection process to be the primary determinant of performance.

<PAGE>

TURNER SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION

This bar chart shows changes in the performance of the Fund's Institutional
Class Shares from year to year for four years.*

68.18% 28.85% 14.75% 8.53%
1995 1996 1997 1998

[BAR CHART]

* The performance information shown above is based on a calendar
year.

Best Quarter Worst Quarter
24.34% -24.30%
(12/31/98) (9/30/98)

This table compares the Fund's average annual total returns for the
periods ended December 31, 1998, to those of the Russell 2000
Growth Index.

1 YEAR SINCE INCEPTION
(2/7/94)

Turner Small Cap Growth Fund 8.53% 24.84%
Russell 2000 Growth Index 0.38% 13.91%*
- --------------------------------------------------------------------------------
* The inception date for the Index is February 28, 1994.

WHAT IS AN INDEX?

An index measures the market price of a specific group of securities in a
particular market of securities in a market sector. You cannot invest directly
in an index. An index does not have an investment adviser and does not pay any
commissions or expenses. If an index had expenses, its performance would be
lower. The Russell 2000 Growth Index is a wide-recognized,
capitalization-weighted (companies with larger market capitalizations have more
influence than those with smaller market capitalizations) index of the largest
U.S. companies with higher growth rates and price-to-book ratios.

- --------------------------------------------------------------------------------
[icon] FUND FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES
INSTITUTIONAL
CLASS SHARES

Investment Advisory Fees 1.00%
Distribution (12b-1) Fees None
Other Expenses 0.38%
------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.38%
Fee waivers and expense reimbursements 0.13%
------
NET TOTAL OPERATING EXPENSES 1.25%*
- --------------------------------------------------------------------------------

* THE FUND'S ADVISER HAS CONTRACTUALLY AGREED TO WAIVE FEES AND TO REIMBURSE
EXPENSES IN ORDER TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING 1.25% FOR A
PERIOD OF ONE YEAR, RENEWABLE AT THE END OF EACH FISCAL YEAR. IN ADDITION, THE
FUND HAS AN ARRANGEMENT WITH CERTAIN BROKER DEALERS WHO HAVE AGREED TO PAY
CERTAIN FUND EXPENSES IN RETURN FOR THE DIRECTION OF A PERCENTAGE OF THE FUND'S
BROKERAGE TRANSACTIONS. AS A RESULT OF THESE ARRANGEMENTS, IT IS ANTICIPATED
THAT THE FUND'S EXPENSES WILL BE REDUCED. For more information about these fees,
see "Investment Adviser" and "Distribution of Fund Shares."
- --------------------------------------------------------------------------------
EXAMPLE

1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Turner Small Cap Growth Fund $127 $397 $686 $1,511
</TABLE>

<PAGE>

TURNER MICRO CAP GROWTH FUND
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY

INVESTMENT GOAL Capital appreciation
INVESTMENT FOCUS Micro cap U.S. common stocks
SHARE PRICE VOLATILITY Very high
PRINCIPAL INVESTMENT STRATEGY Attempts to identify micro cap U.S.
companies with strong earnings
growth potential
INVESTOR PROFILE Investors seeking long-term growth
of capital who can withstand the
share price volatility of micro
cap equity investing.
- --------------------------------------------------------------------------------
[ICON] INVESTMENT STRATEGY OF THE TURNER MICRO CAP GROWTH FUND

The Turner Micro Cap Growth Fund invests primarily in common stocks and other
equity securities of U.S. companies with very small market capitalizations
(i.e., under $500 million) that Turner Investment Partners believes have strong
earnings growth potential. The Fund will invest in securities of companies that
are diversified across economic sectors, and will attempt to maintain sector
concentrations that approximate the economic sector weightings of the smallest
1/3 of its current benchmark, the Russell 2000 Growth Index.

Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs (and thus lower performance) and
additional capital gains tax liabilities.

[ICON] WHAT ARE THE RISKS OF INVESTING IN THE FUND?

Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's equity
securities may fluctuate drastically from day-to-day. Individual companies may
report poor results or be negatively affected by industry and/or economic trends
and developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund. In addition, the Fund is subject to the
risk that its principal market segment, U.S. micro capitalization growth stocks,
may underperform compared to other market segments or to the equity markets as a
whole.

The micro capitalization companies the Fund invests in may be extremely
vulnerable to adverse business or economic events than larger, more established
companies. In particular, these very small companies may have limited product
lines, markets and financial resources, and may depend upon a relatively small
management group. Micro cap stocks also tend to be traded only in the
over-the-counter market, and may not be as liquid as larger capitalization
stocks. As a result, the prices of the micro cap stocks owned by the Fund will
be very volatile, and the price movements of the Fund's shares will reflect that
volatility.

TURNER'S EQUITY INVESTMENT PHILOSOPHY

<PAGE>

TURNER MICRO CAP GROWTH FUND
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION

The Fund was launched on March 1, 1998. Since the Fund does not have a full
calendar year of performance, performance results have not been provided.

- --------------------------------------------------------------------------------
[icon] FUND FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES
INSTITUTIONAL
CLASS SHARES

Investment Advisory Fees 1.00%
Distribution (12b-1) Fees None
Other Expenses 7.18%
-----
TOTAL ANNUAL FUND OPERATING EXPENSES 8.18%
Fee waivers and expense reimbursements 6.93%
-----
NET TOTAL OPERATING EXPENSES 1.25%*
- --------------------------------------------------------------------------------
* THE FUND'S ADVISER HAS CONTRACTUALLY AGREED TO WAIVE FEES AND TO REIMBURSE
EXPENSES IN ORDER TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING 1.25% FOR A
PERIOD OF ONE YEAR, RENEWABLE AT THE END OF EACH FISCAL YEAR. For more
information about these fees, see "Investment Adviser" and "Distribution of
Fund Shares."
- --------------------------------------------------------------------------------

EXAMPLE

1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Turner Micro Cap Growth Fund $127 $397 $686 $1,511
</TABLE>

<PAGE>

TURNER SHORT DURATION GOVERNMENT FUNDS - ONE YEAR PORTFOLIO
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY

INVESTMENT GOAL Total return consistent with the
preservation of capital
INVESTMENT FOCUS Fixed income securities issued or
guaranteed by the U.S. Government
SHARE PRICE VOLATILITY Low
PRINCIPAL INVESTMENT STRATEGY Attempts to identify U.S. Government
securities that are attractively
priced
INVESTOR PROFILE Investors seeking current
income with a very limited amount
of share price volatility.

- --------------------------------------------------------------------------------
[ICON] INVESTMENT STRATEGY OF THE TURNER SHORT DURATION GOVERNMENT FUNDS - ONE
YEAR PORTFOLIO

The Turner Short Duration Government Funds-One Year Portfolio invests primarily
in debt securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, including martgage-backed securities issued by agencies such
as Fannie Mae or the Government National Mortgage Association (GNMA). The Fund
may also invest to a limited extent in high grade corporate debt obligations and
cash equivalents. In selecting investments for the Fund, Turner Investment
Partners chooses U.S. Government obligations that are attractively priced
relative to the market or to similar instruments. Turner considers the
"effective duration" of the Fund's entire portfolio when selecting securities.
Effective duration is a measure of a security's price volatility or risk
associated with changes in interest rates. Although Turner manages interest rate
risk by maintaining an effective duration that is comparable to or less than
that of one-year U.S. Treasury bills, the Fund may invest in securities with any
maturity.

[ICON] WHAT ARE THE RISKS OF INVESTING IN THE FUND?

The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk. In addition, the Fund is subject to the risk that its principal
market segment, short duration U.S. Government securities, may underperform
compared to other market segments or to the fixed income markets as a whole.

Although the Fund's U.S. Government securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates. Obligations issued by some U.S. Government agencies are
backed by the U.S. Treasury, while others are backed solely by the ability of
the agency to borrow from the U.S. Treasury or by the agency's own resources,
and are subject to more risk.

Mortgage-backed securities are fixed income securities representing an interest
in a pool of underlying mortgage loans. They are sensitive to changes in
interest rates, but may respond to these changes differently from other fixed
income securities due to the possibility of prepayment of the underlying
mortgage loans. As a result, it may not be possible to determine in advance the
actual maturity date or average life of a mortgage-backed security. Rising
interest rates tend to discourage refinancings, with the result that the average
life and volatility of the security will increase, exacerbating its decrease in
market price. When interest rates fall, however, mortgage-backed securities may
not gain as much in market value because of the expectation of additional
mortgage prepayments that must be reinvested at lower interest rates. Prepayment
risk may make it difficult to calculate the average maturity of the Fund's
mortgage-backed securities and, therefore, to assess the volatility risk of the
Fund.

<PAGE>

TURNER SHORT DURATION GOVERNMENT FUNDS - ONE YEAR PORTFOLIO
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION

This bar chart shows changes in the performance of the Fund's Institutional
Class Shares from year to year for four years.*

7.61% 6.41% 6.30% 5.84%
1995 1996 1997 1998

[BAR CHART]

* The performance information shown above is based on a calendar
year. All performance shown is for the Alpha Select Turner Short
Duration Government Funds-One Year Portfolio, the Fund's
predecessor.

Best Quarter Worst Quarter
2.04% 1.18%
(12/31/95) (12/31/98)

This table compares the Fund's average annual total returns for Institutional
Class Funds for the periods ended December 31, 1998 to those of the Merrill
Lynch Three-Month Treasury Bill Index.

1 YEAR SINCE INCEPTION
(3/1/94)
Turner Short Duration
Government Funds-
One Year Portfolio 5.84% 6.17%
Merrill Lynch Three-Month
Treasury Bill In 5.23% 5.39%**

- --------------------------------------------------------------------------------
* As of December 31, 1998 there were no Adviser Class Shares outstanding.
** The inception date for the Index is February 28, 1994.

WHAT IS AN INDEX?

An index measures the market price of a specific group of securities in a
particular market of securities in a market sector. You cannot invest directly
in an index. An index does not have an investment adviser and does not pay any
commissions or expenses. If an index had expenses, its performance would be
lower. The Merrill Lynch Three-Month Treasury Bill Index is an unmanaged index
of Treasury securities that assumes reinvestment of all dividends.

- --------------------------------------------------------------------------------
[icon] FUND FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES
INSTITUTIONAL ADVISER
CLASS SHARES CLASS SHARES

Investment Advisory Fees 0.25% 0.25%
Distribution (12b-1) Fees None None
Other Expenses 10.58% 10.83%
------ ------
TOTAL ANNUAL FUND OPERATING EXPENSES 10.83% 11.08%
Fee waivers and expense reimbursements 10.47% 10.47%
------ -------
NET TOTAL OPERATING EXPENSES 0.36%* 0.61%*
- --------------------------------------------------------------------------------
* THE FUND'S ADVISER HAS CONTRACTUALLY AGREED TO WAIVE FEES AND TO REIMBURSE
EXPENSES IN ORDER TO KEEP TOTAL OPERATING EXPENSES OF THE INSTITUTIONAL AND
ADVISER CLASS SHARES FROM EXCEEDING 0.36% AND 0.61%, RESPECTIVELY, FOR A PERIOD
OF ONE YEAR, RENEWABLE AT THE END OF EACH FISCAL YEAR. For more information
about these fees, see "Investment Adviser" and "Distribution of Fund Shares."
- --------------------------------------------------------------------------------

EXAMPLE

1 YEAR 3 YEARS 5 YEARS 10 YEARS
Institutional Class Shares $37 $116 $202 $456
Adviser Class Shares $62 $195 $340 $762

<PAGE>

TURNER SHORT DURATION GOVERNMENT FUNDS - THREE YEAR PORTFOLIO
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY

INVESTMENT GOAL Total return consistent with the
preservation of capital
INVESTMENT FOCUS Fixed income securities issued or
guaranteed by the U.S. Government
SHARE PRICE VOLATILITY Low to medium
PRINCIPAL INVESTMENT STRATEGY Attempts to identify U.S. Government
securities that are attractively
priced
INVESTOR PROFILE Investors seeking current income
with a limited amount of share price
volatility.

- --------------------------------------------------------------------------------

[ICON] INVESTMENT STRATEGY OF THE TURNER SHORT DURATION GOVERNMENT FUNDS - THREE
YEAR PORTFOLIO

The Turner Short Duration Government Funds-Three Year Portfolio invests
primarily in debt securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, including mortgage-backed securities issued by
agencies such as Fannie Mae or the Government National Mortgage Association
(GNMA). The Fund may also invest to a limited extent in high grade corporate
debt obligations and cash equivalents. In selecting investments for the Fund,
Turner Investment Partners chooses U.S. Government obligations that are
attractively priced relative to the market or to similar instruments. Turner
considers the "effective duration" of the Fund's entire portfolio when selecting
securities. Effective duration is a measure of a security's price volatility or
risk associated with changes in interest rates. Although Turner manages interest
rate risk by maintaining an effective duration that is comparable to or less
than that of three year U.S. Treasury notes, the Fund may invest in securities
with any maturity.

Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs (and thus lower performance) and
additional capital gains tax liabilities.

[ICON] WHAT ARE THE RISKS OF INVESTING IN THE FUND?

<PAGE>

TURNER SHORT DURATION GOVERNMENT FUNDS - THREE YEAR PORTFOLIO
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION

This bar chart shows changes in the performance of the Fund's Institutional
Class Shares from year to year for four years.*

11.18% 5.26% 6.92% 6.93%
1995 1996 1997 1998

[BAR CHART]

* The performance information shown above is based on a calendar
year. All performance shown is for the Alpha Select Turner Short
Duration Government Funds - Three Year Portfolio, the Fund's
predecessor.

Best Quarter Worst Quarter
3.24% 0.40%
(3/31/95) (3/31/96)

This table compares the Fund's average annual total returns for
Institutional Class Funds for the periods ended December 31, 1998,
to those of the Lehman Brothers 1-3 Year U.S. Government Bond
Index.

1 YEAR SINCE INCEPTION
(3/1/94)
Turner Short Duration
Government Funds-
Three Year Portfolio 6.93% 6.51%
Lehman Brothers 1-3 Year
U.S. Government Bond Ind 6.97% 6.28%**

- --------------------------------------------------------------------------------
* As of December 31, 1998, there were no Adviser Class Shares outstanding.
** The inception date for the Index is March 31, 1994.

WHAT IS AN INDEX?

An index measures the market price of a specific group of securities in a
particular market of securities in a market sector. You cannot invest directly
in an index. An index does not have an investment adviser and does not pay any
commissions or expenses. If an index had expenses, its performance would be
lower. The Lehman Brothers 1-3 Year U.S. Government Bond Index is a widely
recognized index of U.S. government obligations with maturities of at least one
year.

- --------------------------------------------------------------------------------
[icon] FUND FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES
INSTITUTIONAL ADVISER
CLASS SHARES CLASS SHARES

Investment Advisory Fees 0.25% 0.25%
Distribution (12b-1) Fees None None
Other Expenses 1.24% 1.49%
----- -----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.49% 1.74%
Fee waivers and expense reimbursements 1.13% 1.13%
------ -----
NET TOTAL OPERATING EXPENSES 0.36%* 0.61%*
- --------------------------------------------------------------------------------
* THE FUND'S ADVISER HAS CONTRACTUALLY AGREED TO WAIVE FEES AND TO REIMBURSE
EXPENSES IN ORDER TO KEEP TOTAL OPERATING EXPENSES OF THE INSTITUTIONAL AND
ADVISER CLASS SHARES FROM EXCEEDING 0.36% AND 0.61%, RESPECTIVELY, FOR A PERIOD
OF ONE YEAR, RENEWABLE AT THE END OF EACH FISCAL YEAR. For more information
about these fees, see "Investment Adviser" and "Distribution of Fund Shares."
- --------------------------------------------------------------------------------

EXAMPLE

1 YEAR 3 YEARS 5 YEARS 10 YEARS
Institutional Class Shares $37 $116 $202 $456
Adviser Class Shares $62 $195 $340 $762

<PAGE>

TURNER FIXED INCOME FUND
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY

INVESTMENT GOAL Current income and capital appreciation
INVESTMENT FOCUS Investment U.S. grade corporate and
government bonds
SHARE PRICE VOLATILITY Medium
PRINCIPAL INVESTMENT STRATEGY Attempts to identify quality fixed income
securities with intermediate maturities
INVESTOR PROFILE Investors who are seeking
current income and capital
appreciation and who are willing
to accept principal risk.

- --------------------------------------------------------------------------------

[ICON] INVESTMENT STRATEGY OF THE TURNER FIXED INCOME FUND

The Turner Fixed Income Fund invests primarily in investment grade fixed income
securities, including U.S. government securities, corporate debt securities,
mortgage-backed securities, asset-backed securities, and short-term obligations.
In selecting investments for the Fund, Turner Investment Partners chooses
securities with intermediate durations. Typically, the Fund's average
duration will typically be between three and six years (although the Fund may
hold securities with longer or shorter durations). Turner will allocate the
Fund's assets among various market sectors based on its analysis of historical
data, yield trends and credit ratings.

[ICON] WHAT ARE THE RISKS OF INVESTING IN THE FUND?

The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk. In addition, the Fund is subject to the risk that its principal
market segment, U.S. fixed income securities, may underperform compared to other
market segments or to the fixed income markets as a whole.

<PAGE>

TURNER FIXED INCOME FUND
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION

As of January 31, 1999, the Fund had not yet commenced operations, and did not
have a performance history.

- --------------------------------------------------------------------------------
[Icon] FUND FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES

INSTITUTIONAL CLASS SHARES

Investment Advisory Fees 0.50%
Distribution (12b-1) Fees None
Other Expenses* 0.70%
------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.20%
Fee waivers and expense reimbursements 0.75%
------
NET TOTAL OPERATING EXPENSES 0.45%**
- --------------------------------------------------------------------------------
* Other Expenses are estimated for the current year.
** THE FUND'S ADVISER HAS CONTRACTUALLY AGREED TO WAIVE FEES AND TO REIMBURSE
EXPENSES IN ORDER TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING 0.45% FOR A
PERIOD OF ONE YEAR, RENEWABLE AT THE END OF EACH FISCAL YEAR. For more
information about these fees, see "Investment Adviser" and "Distribution of
Fund Shares."
- --------------------------------------------------------------------------------

EXAMPLE

1 YEAR 3 YEARS

Turner Fixed Income Fund $46 $144

<PAGE>

TIP TARGET SELECT EQUITY FUND
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY

INVESTMENT GOAL Long-term capital appreciation
INVESTMENT FOCUS Common stocks of U.S. issuers
SHARE PRICE VOLATILITY High
PRINCIPAL INVESTMENT STRATEGY Utilizing sub-advisers experience in
selecting securities that have growth
potential or that are undervalued, the
Fund invests in U.S. common stocks
INVESTOR PROFILE Investors who want capital
appreciation but who can tolerate
the risks of investing in equity
securities.

- --------------------------------------------------------------------------------
[ICON] INVESTMENT STRATEGY OF THE TIP TARGET SELECT EQUITY FUND

The TIP Target Select Equity Fund invests primarily in common stocks and other
equity securities of companies regardless of their market capitalization. The
Fund uses a multi-manager approach, relying upon a number of sub-advisers with
differing investment philosophies to manage portions of the Fund's portfolio
under the general supervision of Turner. In selecting investments for the Fund,
the Adviser and the Sub-Advisers choose stocks of companies that have
above-average growth potential or that have been undervalued by the market. The
Fund will invest in securities of companies operating in a broad range of
industries based on their growth potential or their relatively attractive price.

Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs (and thus lower performance) and
additional capital gains tax liabilities.

[ICON] WHAT ARE THE RISKS OF INVESTING IN THE FUND?

The Fund's investment approach, with its emphasis on stocks in a variety of
capitalization ranges, is expected to offer potentially higher returns and a
higher level of volatility relative to equity funds that invest solely in large
cap companies. In addition, because the Fund does not employ a specific "growth"
or "value" discipline, the Fund can be expected to perform differently than
funds that employ a specific investment style.

The Fund is non-diversified, which means that it may invest in the securities of
a relatively few issuers. As a result, the Fund may be more susceptible to a
single adverse economic or regulatory occurrence affecting one or more of these
issuers, and may experience increased volatility due to its investments in those
securities.

<PAGE>

TIP TARGET SELECT EQUITY FUND
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION

This bar chart shows changes in the performance of the Fund's Institutional
Class Shares from year to year for one year.*

25.45%
1998

[BAR CHART]

* The performance information shown above is based on a
calendar year.

Best Quarter Worst Quarter
21.22% -17.08%
(12/31/98) (9/30/98)

This table compares the Fund's average annual total returns for the periods
ended December 31, 1998, to those of the Russell 3000 Index.

1 YEAR SINCE INCEPTION
(1/1/98)
TIP Target Select Equity Fu 25.45% 25.45%
Russell 3000 Index 24.14% 26.62%*
- --------------------------------------------------------------------------------

* The inception date for the Index is December 31, 1997.

WHAT IS AN INDEX?

An index measures the market price of a specific group of securities in a
particular market of securities in a market sector. You cannot invest directly
in an index. An index does not have an investment adviser and does not pay any
commissions or expenses. If an index had expenses, its performance would be
lower. The Russell 3000 Index is a widely-recognized, capitalization-weighted
(companies with larger market capitalizations have more influence than those
with smaller market capitalizations) index of the 3,000 largest U.S. companies.

- --------------------------------------------------------------------------------
[icon] FUND FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES
INSTITUTIONAL
CLASS SHARES
Investment Advisory Fees 1.05%
Distribution (12b-1) Fees None
Other Expenses 17.71%
-----
TOTAL ANNUAL FUND OPERATING EXPENSES 18.76%
Fee waivers and expense reimbursements 17.46%
-----
NET TOTAL OPERATING EXPENSES 1.30%*
- --------------------------------------------------------------------------------
* THE FUND'S ADVISER HAS CONTRACTUALLY AGREED TO WAIVE FEES AND TO REIMBURSE
EXPENSES IN ORDER TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING 1.30% FOR A
PERIOD OF ONE YEAR, RENEWABLE AT THE END OF EACH FISCAL YEAR. IN ADDITION, THE
FUND HAS AN ARRANGEMENT WITH CERTAIN BROKER DEALERS WHO HAVE AGREED TO PAY
CERTAIN FUND EXPENSES IN RETURN FOR THE DIRECTION OF A PERCENTAGE OF THE FUND'S
BROKERAGE TRANSACTIONS. AS A RESULT OF THESE ARRANGEMENTS, IT IS ANTICIPATED
THAT THE FUND'S EXPENSES WILL BE REDUCED. For more information about these fees,
see "Investment Adviser" and "Distribution of Fund Shares."
- --------------------------------------------------------------------------------

EXAMPLE

1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
TIP Target Select Equity Fund $132 $412 $713 $1,568
</TABLE>

<PAGE>

[icon] THE FUNDS' OTHER INVESTMENTS
- --------------------------------------------------------------------------------

In addition to the investments and strategies described in this prospectus, each
Fund also may invest in other securities, use other strategies and engage in
other investment practices. These investments and strategies, as well as those
described in this prospectus, are described in detail in our Statement of
Additional Information (SAI). Of course, we cannot guarantee that any Fund will
achieve its investment goal.

The investments and strategies described throughout this prospectus are those
that we use under normal conditions. During unusual economic or market
conditions or for temporary defensive or liquidity purposes, each Fund may
invest up to 100% of its assets in cash, repurchase agreements and short-term
obligations that would not ordinarily be consistent with the Funds' objectives.
A Fund will do so only if the Adviser believes that the risk of loss outweighs
the opportunity for gains.

[icon] INVESTMENT ADVISER
- --------------------------------------------------------------------------------

As the Funds' Adviser, Turner Investment Partners makes investment decisions for
the Funds and continuously reviews, supervises and administers the Funds'
investment programs. The Adviser also ensures compliance with the Funds'
investment policies and guidelines.

Turner Investment Partners, Inc., an SEC-registered adviser, serves as the
Adviser to the Turner Ultra Large Cap Growth, Turner Growth Equity, Turner
Midcap Growth, Turner Small Cap Growth, Turner Micro Cap Growth, Turner Short
Duration Government Funds - One Year Portfolio, Turner Short Duration Government
Funds - Three Year Portfolio, and Turner Fixed Income Funds. Turner also serves
as Adviser to the TIP Target Select Equity Fund and oversees that Fund's
sub-advisers. As of October 31, 1998, Turner had approximately $3 billion in
assets under management.

For the fiscal year ended September 30, 1998, the Funds paid Turner investment
advisory fees (after waivers and reimbursements) of:

Turner Ultra Large Cap Growth Fund..................................(3.86)%
Turner Growth Equity Fund............................................. .67%
Turner Midcap Growth Fund............................................ .51%
Turner Small Cap Growth Fund.......................................... .87%
Turner Micro Cap Growth Fund........................................(3.49)%
Turner Short Duration Government Funds-One Year Portfolio.......... (6.17)%
Turner Short Duration Government Funds-Three Year Portfolio........ (0.59)%
TIP Target Select Equity Fund...................................... (5.65)%**
- ----------
* The Turner Fixed Income Fund was not in operation as of 9/30/98.
** Turner pays a portion of this fee to the Fund's sub-advisers.

<PAGE>

PORTFOLIO MANAGERS

The Ultra Large Cap Growth Fund and Growth Equity Fund are managed by a
committee comprised of Robert Turner, John Hammerschmidt and Mark Turner. The
Midcap Growth Fund is managed by a committee comprised of Chris McHugh, Bill
McVail and Robert Turner. The Small Cap Growth Fund is managed by a committee
comprised of Chris McHugh, Bill McVail, and Frank Sustersic. The Micro Cap
Growth Fund is managed by a committee comprised of Frank Sustersic and Bill
McVail. The background of each committee member is set forth below.

Robert E. Turner is a member of the committees which manage the Ultra Large Cap
Growth, Growth Equity and Midcap Growth Funds, as set forth above. Mr. Turner,
CFA, Chairman and Chief Investment Officer of the Adviser, has been the lead
manager of the Growth Equity Fund since its inception and is a co- manager of
the Ultra Large Cap Growth Fund and Midcap Growth Fund. Mr. Turner founded
Turner Investment Partners, Inc. in 1990. Prior to 1990, he was Senior
Investment Manager with Meridan Investment Company. He has 16 years of
investment experience.

John Hammerschmidt is a member of the committees which manage the Ultra Large
Cap Growth and Growth Equity Funds, as set forth above. Mr. Hammerschmidt,
Senior Equity Portfolio Manager of the Adviser, is lead manager of the Ultra
Large Cap Growth Fund and co-manager of the Growth Equity Fund. Mr.
Hammerschmidt joined the Adviser in 1992. Prior to 1992, he was a Vice President
in Government Securities Trading at S.G. Warburg. He has 14 years of investment
experience.

Mark Turner is a member of the committees which manage the Ultra Large Cap
Growth and Growth Equity Funds, as set forth above. Mr. Turner, President of the
Adviser, is co-manager of the Growth Equity Fund and Ultra Large Cap Growth
Fund. Mr. Turner founded Turner Investment Partners, Inc. in 1990. Prior to
1990, he was Vice President and Senior Portfolio Manager with First Maryland
Asset Management. He has 15 years of investment experience.

Christopher K. McHugh is a member of the committees which manage the Midcap
Growth and Small Cap Growth Funds, as set forth above. Mr. McHugh, Equity
Portfolio Manager of the Adviser, is the lead manager of the Midcap Growth Fund
and co-manager of the Small Cap Growth Fund. Mr. McHugh joined the Adviser in
1990. Prior to 1990, he was a Performance Specialist with Provident Capital
Management. He has 11 years of investment experience.

Bill McVail is a member of the committees which manage the Midcap Growth, Micro
Cap, and Small Cap Growth Funds, as set forth above. Mr. McVail, Senior Equity
Portfolio Manager of the Adviser, is the lead manager of the Small Cap Growth
Fund and co-manager of the Micro and Midcap Growth Funds. Mr. McVail joined the
Adviser in 1998. Prior to 1998, he was Portfolio Manager at PNC Equity Advisers.
He has 11 years of investment experience.

Frank L. Sustersic is a member of the committees which manage the Micro Cap and
Small Cap Growth Funds, as set forth above. Mr. Sustersic, a Senior Security
Analyst and Equity Portfolio Manager at Turner, serves as lead portfolio manager
to the Micro Cap Growth Fund and co-manager of the Small Cap Growth Fund. Mr.
Sustersic joined Turner in 1994. Mr. Sustersic has 8 years of investment
experience.

James L. Midanek, a Fixed Income Portfolio Manager of Turner Investment
Partners, Inc., is the portfolio manager of the Turner Short Duration Government
Funds - One and Three Year Portfolios and of the Turner Fixed Income Fund. Mr.
Midanek joined Turner in 1997. Prior to joining Turner, Mr. Midanek was Chief

<PAGE>

Investment Officer of Solon Asset Management, L.P., which he founded in 1989,
and Portfolio Manager of the Short Duration Government Funds. From 1992 to 1994,
Mr. Midanek was Chief Investment Officer to the Fixed Income Group of Montgomery
Asset Management, L.P., where he managed four institutional fixed income funds.

TIP TARGET SELECT EQUITY FUND:

Chartwell Investment Partners manages a portion of the assets of the TIP Target
Select Equity Fund.

Wynn Jessup, founder of Chartwell Investment Partners, and Chairman and
President of Chartwell Dividend and Income Fund, serves as portfolio manager to
the TIP Target Select Equity Fund. Mr. Jessup has over 30 years of investment
experience.

Penn Capital Management Company, Inc. manages a portion of the assets of the TIP
Target Select Equity Fund.

Richard Hocker, founder of Penn Capital Management, Inc., serves as portfolio
manager to the TIP Target Select Equity Fund. Prior to founding Penn Capital in
1987, Mr. Hocker was a shareholder and Senior Portfolio Manager of Delaware
Investment Advisers, and investment management firm. He has over 35 years of
investment experience.

Clover Capital Management, Inc. manages a portion of the assets of the TIP
Target Select Equity Fund.

Michael Jones, co-founder and Managing Director of Clover Capital, serves as
portfolio manager to the TIP Target Select Equity Fund. Mr. Jones has over 19
years of investment experience.

<PAGE>

[icon] PURCHASING, SELLING AND EXCHANGING FUND SHARES
- --------------------------------------------------------------------------------

This section tells you how to buy, sell (sometimes called "redeem") or exchange
shares of the Funds.

CHOOSING ADVISER OR INSTITUTIONAL CLASS SHARES

Adviser and Institutional Class Shares have different expenses and other
characteristics.

Institutional Class Shares are for individual investors and for certain
institutional investors investing for their own or their customers' account. For
information on how to open an account and set up procedures for placing
transactions call 1-800-224-6312.

Adviser Class Shares are for individual investors who purchase shares through
financial institutions or intermediaries. Only the Penn Capital High Yield Bond
Fund and the Turner Short Duration Government Funds - Three Year Portfolio offer
Adviser Class Shares.

ADVISER CLASS SHARES INSTITUTIONAL CLASS SHARES
* No sales charge * No sales charge
* Higher annual expenses * Lower annual expenses
* $10,000 minimum initial investment * $2,500 minimum initial
investment

For some investors the minimum initial investment may be lower. For Adviser
Class Shares, the minimum initial investment for IRAs is $500. As of January 31,
1999, Adviser Class Shares were not yet available to investors.

WHEN CAN YOU PURCHASE SHARES?

You may purchase shares of any Fund (except the Turner Short Duration Government
Funds - One Year and - Three Year Portfolios) on any day that the New York Stock
Exchange is open for business (a Business Day). For the Turner Short Duration
Government Funds-One Year and Three Year Portfolios, a Business Day is any day
the U.S. Bond Markets are open.

HOW TO PURCHASE FUND SHARES

You may purchase shares directly from the Funds by:

o mail
o telephone
o wire, or
o Automated Clearing House (ACH).

To purchase shares directly from us, please call 1-800-224-6312. Make your
check, payable in U.S. dollars, to "TIP Funds" and include the name of the
appropriate Fund(s) on the check. You may mail your check to us at: TIP Funds,
P.O. Box 419805, Kansas City, Missouri 64141-6805. We cannot accept third-party
checks, credit cards, credit card checks or cash.

You may also purchase shares by wiring money to the Funds as follows: United
Missouri Bank of Kansas, N.A.; ABA #10-10-00695; for Account Number
98-7060-116-8; Further Credit: [_________ Fund]. The shareholder's name and
account number must be specified in the wire.

25
<PAGE>

fee for its services, in addition to the fees charged by the Funds. You will
also generally have to address your correspondence or questions regarding the
Funds to your institution.

FOR CUSTOMERS OF FINANCIAL INSTITUTIONS

If you purchase, sell or exchange Fund shares through a financial institution
(rather than directly from us), you may have to transmit your purchase, sale and
exchange requests to your financial institution at an earlier time for your
transaction to become effective that day. This allows the financial institution
time to process your request and transmit it to us. For more information about
how to purchase, sell or exchange Fund shares through your financial
institution, you should contact your financial institution directly.

We may reject any purchase order if we determine that accepting the order would
not be in the best interests of the Funds or their shareholders.

The price per share (the offering price) will be the net asset value per share
(NAV) next determined after the Funds receive your purchase order. The Funds'
NAV is calculated once each Business Day at the regularly-scheduled close of
normal trading on the New York Stock Exchange (normally, 4:00 p.m. Eastern
time). So, for you to want to receive the current Business Day's NAV, generally
we must receive your purchase order before 4:00 p.m. Eastern time.

Who is Eligible to Invest in a Fund Once it is Closed to New Investors?

If you are a shareholder of the Fund when it closes to new investors, you will
be able to make additional investments in the Fund and reinvest your dividends
and capital gain distributions.
Once a Fund is closed, you may open a new account only if:

o your business or other organization is already a shareholder of the Fund
and you are opening an account for an employee benefit plan sponsored by
that organization or an affiliated organization;

o you are a current Fund trustee or officer, or an employee of Turner
Investment Partners, Inc., or a member of the immediate family of any of
those people;

o you are an existing advisory client of Turner Investment Partners, Inc.; or

o you are a client of a financial adviser or planner who has client assets
invested in the TIP Funds as of the date of any proposed new investment in
the Fund.

In addition, an employee benefit plan which is a Fund shareholder may continue
to buy shares in the ordinary course of the plan's operations, even for new plan
participants.

HOW WE CALCULATE NAV

NET ASSET VALUE

NAV for one Fund share is the value of that share's portion of all of the net
assets in the Fund.

In calculating NAV, each Fund generally values its investment portfolio at
market price. If market prices are unavailable or we think that they are
unreliable, fair value prices may be determined in good faith using methods
approved by the Board of Trustees. Some Funds hold portfolio securities that are
listed on foreign exchanges. These securities may trade on weekends or other
days when the Funds do not calculate NAV. As a result, the value of the Funds'
investments may change on days when you cannot purchase or sell Fund shares.

MINIMUM PURCHASES

TELEPHONE TRANSACTIONS

Purchasing, selling and exchanging Fund shares over the telephone is extremely
convenient, but not without risk. Although we have certain safeguards and
procedures to confirm the identity of callers and the authenticity of
instructions, we are not responsible for any losses or costs incurred by
following telephone instructions we reasonably believe to be genuine. If you or
your financial institution transact with us over the telephone, you will
generally bear the risk of any loss.

To purchase Institutional Class Shares for the first time, you must invest at
least $2,500 in any Fund. To purchase Adviser Class Shares for the first time,
you must invest at least $10,000 in any Fund that offers Adviser Class Shares.
Your subsequent investments in the Funds must be made in amounts of at least
$500. We may accept investments of smaller amounts at our discretion.

SYSTEMATIC INVESTMENT PLAN

If you have checking or savings accounts with certain banks, you may purchase
Adviser Class Shares automatically through regular deductions from your account.
Please call 1-800-224-6312 for information regarding participating banks. With
minimum initial purchase amounts and a minimum preauthorized investment amount
of $100, you may begin regularly scheduled investments once a month.

<PAGE>

SELLING FUND SHARES

HOW TO SELL YOUR FUND SHARES

If you own shares directly, you may sell your shares on any Business Day by
contacting us directly by mail or telephone. You may also sell your shares by
contacting your financial institution by mail or telephone.

Holders of Adviser or Institutional Class Shares may sell shares by following
procedures established when they opened their account or accounts. If you have
questions, call 1-800-224-6312. If you own shares through an account with a
broker or other institution, contact that broker or institution to sell your
shares. If you would like to sell $50,000 or more of your shares, please notify
us in writing and include a signature guarantee.

The sale price of each share will be the next NAV determined after we receive
your request.

SIGNATURE GUARANTEES

A signature guarantee is a widely accepted way to protect shareholders by
verifying the signature in certain circumstances including, (1) written requests
for redemptions in excess of $50,000; (2) all written requests to wire
redemption proceeds to a bank other than the bank previously designated on the
account application; and (3) redemption requests that provide that the
redemption proceeds should be sent to an address other than the address of
record or to a person other than the registered shareholder(s) for the account.
Signature guarantees can be obtained from any of the following institutions: a
national or state bank, a trust company, a federal savings and loan association,
or a broker-dealer that is a member of a national securities exchange. A
notarized signature is not sufficient.

SYSTEMATIC WITHDRAWAL PLAN

IF YOU HAVE AT LEAST $2,500 IN YOUR ACCOUNT, YOU MAY USE THE SYSTEMATIC
WITHDRAWAL PLAN. Under the plan you may arrange monthly, quarterly, semi-annual
or annual automatic withdrawals of at least $100 from any Fund. The proceeds of
each withdrawal will be mailed to you by check or, if you have an account with
certain banks, electronically transferred to your account. Please call
1-800-224-6312 for information regarding banks that participate in the
Systematic Withdrawal Plan.

RECEIVING YOUR MONEY

Normally, we will send your sale proceeds within three Business Days after we
receive your request, but it may take up to seven Business Days. Your proceeds
can be wired to your bank account (subject to a $10 wire fee) or sent to you by
check. IF YOU RECENTLY PURCHASED YOUR SHARES BY CHECK OR THROUGH ACH, REDEMPTION
PROCEEDS MAY NOT BE AVAILABLE UNTIL YOUR CHECK HAS CLEARED (WHICH MAY TAKE UP TO
15 BUSINESS DAYS FROM THE DATE OF PURCHASE).

REDEMPTIONS IN KIND

The Funds generally pay sale (redemption) proceeds in cash. However, under
unusual conditions that make the payment of cash unwise (and for the protection
of the Funds' remaining shareholders) the Funds might pay all or part of your
redemption proceeds in liquid securities with a market value equal to the
redemption price (redemption in kind). Although it is highly unlikely that your
shares would ever be redeemed in kind, you would probably have to pay brokerage
costs to sell the securities distributed to you, as well as taxes on any capital
gains from the sale as with any redemption.

SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES

The Funds may suspend your right to sell your shares if the NYSE (or the U.S.
Bond Markets in the case of the Turner Short Duration Government Funds - One
Year and Three Year Portfolios) restricts trading, the SEC declares an emergency
or for other reasons. More information about this is in the Funds' Statement of
Additional Information (SAI).

<PAGE>

INVOLUNTARY SALES OF YOUR SHARES

If your account balance drops below the required minimum of $1,000, you may be
required to sell your shares. You will always be given at least 60 days' written
notice to give you time to add to your account and avoid selling your shares.

EXCHANGING FUND SHARES

HOW TO EXCHANGE YOUR SHARES

EXCHANGES

When you exchange shares, you are really selling your shares and buying other
Fund shares. So, your sale price and purchase price will be based on the NAV
next calculated after we receive your exchange request.

You may exchange your shares on any Business Day by contacting us directly by
mail or telephone. You may also exchange shares through your financial
institution by mail or telephone. IF YOU RECENTLY PURCHASED SHARES BY CHECK OR
THROUGH ACH, YOU MAY NOT BE ABLE TO EXCHANGE YOUR SHARES UNTIL YOUR CHECK HAS
CLEARED (WHICH MAY TAKE UP TO 15 BUSINESS DAYS FROM THE DATE OF PURCHASE). This
exchange privilege may be changed or canceled at any time upon 60 days' notice.

DISTRIBUTION OF FUND SHARES

SEI Investments Distribution Co. (SIDCo.) is the distributor of the shares of
the Funds.

SIDCo. receives no compensation for distributing the Funds' shares.

The Turner Short Duration Government Funds - One Year and - Three Year
Portfolios have adopted a shareholder service plan for their Adviser Class
Shares that allows the Funds to pay service fees for services provided to
shareholders. For Adviser Class Shares, shareholder service fees, as a
percentage of average daily net assets, may be up to .25%.

<PAGE>

DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------

DIVIDENDS AND DISTRIBUTIONS

The Turner Growth Equity, Turner Fixed Income and TIP Target Select Equity
distribute their investment income quarterly as a dividend to shareholders. The
Turner Short Duration Government Funds-One Year and -Three Year Portfolios
distribute their investment income monthly as a dividend to shareholders. The
Turner Ultra Large Cap Growth, Turner Midcap Growth, Turner Small Cap Growth,
Turner Micro Cap Growth Funds distribute their investment income at least once
annually as a dividend to shareholders. The Funds make distributions of capital
gains, if any, at least annually.

THE "RECORD DATE"

If you own Fund shares on a Fund's record date, you will be entitled to receive
the distribution.

You will receive dividends and distributions in the form of additional Fund
shares unless you elect to receive payment in cash. To elect cash payment, you
must notify us in writing prior to the date of the distribution. Your election
will be effective for dividends and distributions paid after the Funds receive
your written notice. To cancel your election, simply send us written notice.

TAXES

PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL,
STATE AND LOCAL INCOME TAXES. Below we have summarized some important tax issues
that affect the Funds and their shareholders. This summary is based on current
tax laws, which may change.

FUND DISTRIBUTIONS

Distributions you receive from a Fund may be taxable whether or not you reinvest
them.

Each Fund will distribute substantially all of its investment income and capital
gains, if any. The dividends and distributions you receive may be subject to
federal, state and local taxation, depending upon your tax situation.
Capital gains distributions may be taxable at different rates depending on the
length of time a Fund holds its portfolio securities. EACH SALE OR EXCHANGE OF
FUND SHARES IS A TAXABLE EVENT.

MORE INFORMATION ABOUT TAXES IS IN THE SAI.

29
<PAGE>

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

Study these tables to see how each Fund performed since it began investment
operations.

The tables that follow present performance information about the Shares of each
Fund. This information is intended to help you understand each Fund's financial
performance for the past five years, or, if shorter, the period of the Fund's
operations. Some of this information reflects financial information for a single
Fund share. The total returns in the tables represent the rate that you would
have earned (or lost) on an investment in a Fund, assuming you reinvested all of
your dividends and distributions. As of September 30, 1998, the Turner Fixed
Income had not commenced operations, and there were no Adviser Class Shares of
any Fund outstanding.

This information has been audited by Ernst & Young LLP, independent auditors.
Their report, along with each Fund's financial statements, appears in our annual
report that accompanies the Statement of Additional Information. You can obtain
the Funds' annual report, which contains more performance information, at no
charge by calling 1-800-224-6312.

TURNER ULTRA LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------

FOR THE PERIODS ENDED SEPTEMBER 30: 1998 1997(2)
---- -------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 12.28 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.01) 0.01
Net Gains or Losses on Securities (both realized and
unrealized) 1.98 2.27
Total From Investment Operations 1.97 2.28
LESS DISTRIBUTIONS
Dividends (from net investment income) (0.01) ---
Distributions (from capital gains) (1.02) ---
Returns of Capital -- ---
Total Distributions (1.02) ---
Net Asset Value, End of Period $ 13.22 $ 12.28
TOTAL RETURN (1) 17.26% 22.80%
*************************************
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 4,328 $ 701
Ratio of Expenses to Average Net Assets 1.00% 1.00%*
Ratio of Net Income (Loss) to Average Net Assets (0.10)% 0.20%*
Ratio of Expenses to Average Net Assets
(excluding waivers) 7.70% 26.45%*
Ratio of Net Investment Income (Loss) to Average Net
Assets (excluding waivers) (7.80)% (25.25)%*
Portfolio Turnover Rate 243.93% 346.47%
</TABLE>

- --------------------------------------
1 Returns are for the period indicated and have not been annualized.
2 The Turner Ultra Large Cap Growth Fund began operations on
February 1, 1997.
* Annualized.
Amounts designated as "--" are either $0 or have been rounded to $0.

<PAGE>

FINANCIAL HIGHLIGHTS TURNER GROWTH EQUITY FUND
- ----------------------------------------------------------------------------------------------------------------------------------

FOR THE PERIODS ENDED SEPTEMBER 30: 1998 1997 1996(2) 1995 1994
---- ---- ------- ---- ----
<S> <C> <C> <C> <C> <C>

Net Asset Value, Beginning of Period $ 16.64 $ 17.03 $ 14.97 $ 12.46 $ 13.12
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.05) (0.03) 0.02 0.10 0.10
Net Gains or Losses on Securities (both realized and
unrealized) 1.10 4.23 2.91 2.52 (0.66)
Total From Investment Operations 1.05 4.20 2.93 2.62 (0.56)
LESS DISTRIBUTIONS
Dividends (from net investment income) --- --- (0.02) (0.11) (0.10)
Distributions (from capital gains) (4.82) (4.59) (0.85) --- ---
Returns of Capital --- --- --- --- ---
Total Distributions (4.82) (4.59) (0.87) (0.11) (0.10)
Net Asset Value, End of Period $ 12.87 $ 16.64 $ 17.03 $ 14.97 $ 12.46
TOTAL RETURN(1) 10.71% 32.61% 20.61% 21.15% (4.28)%
*************************************
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $97,857 $99,590 $96,164 $115,819 $112,959
Ratio of Expenses to Average Net Assets 1.04%+ 1.02%+ 1.06%+* 1.03%+ 0.95%
Ratio of Net Income (Loss) to Average Net Assets (0.42)%+ (0.25)%+ 0.03%+* 0.69%+ 0.86%
Ratio of Expenses to Average Net Assets
(excluding waivers) 1.12%+ 1.05%+ 1.06%+* 1.03%+ 1.08%
Ratio of Net Investment Income (Loss) to Average
Net Assets (excluding waivers) (0.50)%+ (0.28)%+ 0.03%+* 0.69%+ 0.73%
Portfolio Turnover Rate 249.58% 178.21% 147.79% 177.86% 164.81%
</TABLE>

- ---------------------------
1 Returns are for the period indicated and have not been annualized.

2 On April 19, 1996, the Board of Trustees of the Fund voted to approve a
tax-free reorganization of the Fund. In connection with the
reorganization, the Fund changed its fiscal year end from October 31 to
September 30, effective September 30, 1996.

+ The Ratios of Expenses to Average Net Assets and Net Investment Income
to Average Net Assets do not reflect the Adviser's use of arrangements
whereby certain broker-dealers have agreed to pay certain expenses of
the Turner Growth Equity Fund in return for the direction of a
percentage of the Fund's brokerage transactions. For the Turner Growth
Equity Fund, these arrangements reduced the Ratios of Expenses to
Average Net Assets to 1.00% (1.08% excluding waivers) for the year
ended September 30, 1998, 0.96% for the year ended September 30, 1997,
0.94% for the eleven month period ended September 30, 1996 and 0.94%
for the year ended October 31, 1995 and the Ratios of Net Investment
Income (Loss) to Average Net Assets to (0.46%)((0.38% excluding
waivers), (0.19%), 0.15% and 0.78% for the same periods.

* Annualized.

Amounts designated as "--" are either $0 or have been rounded to $0.

<PAGE>

FINANCIAL HIGHLIGHTS TURNER MIDCAP GROWTH FUND
- ------------------------------------------------------------------------------------------------

FOR THE PERIODS ENDED SEPTEMBER 30: 1998 1997(2)
---- -------
<S> <C> <C>

Net Asset Value, Beginning of Period $ 14.22 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.07) (0.03)
Net Gains or Losses on Securities (both realized and
unrealized) 0.22 4.36
Total From Investment Operations 0.15 4.33
LESS DISTRIBUTIONS
Dividends (from net investment income) --- ---
Distributions (from capital gains) (0.50) (0.11)
Returns of Capital --- ---
Total Distributions (0.50) (0.11)
Net Asset Value, End of Period $ 13.87 $ 14.22
TOTAL RETURN(1) 1.24% 43.77%
*************************************
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 24,582 $ 5,145
Ratio of Expenses to Average Net Assets 1.34%+ 1.25%
Ratio of Net Income (Loss) to Average Net Assets (0.79)%+ (0.62)%
Ratio of Expenses to Average Net Assets
(excluding waivers) 1.73%+ 7.96%
Ratio of Net Investment Income (Loss) to Average Net
Assets (excluding waivers) (1.18)%+ (7.33)%
Portfolio Turnover Rate 304.29%+ 348.29%
</TABLE>

1 Returns are for the period indicated and have not been annualized.

2 The Turner Midcap Growth Fund commenced operations on October 1, 1996.

+ The Ratios of Expenses to Average Net Assets and Net Investment Income to
Average Net Assets do not reflect the Adviser's use of arrangements whereby
certain broker-dealers have agreed to pay certain expenses of the Turner
Midcap Growth Fund in return for the direction of a percentage of the
Fund's brokerage transactions. For the Turner Midcap Growth Fund these
arrangements reduced the Ratio of Expenses to Average Net Assets to 1.23%
(1.62% excluding waivers), for the year ended September 30, 1998 and the
Ratio of Net Investment Income (Loss) to Average Net Assets to
(0.69%)((1.08%) excluding waivers), for the same period above.

Amounts designated as "--" are either $0 or have been rounded to $0.

<PAGE>

FINANCIAL HIGHLIGHTS TURNER SMALL CAP GROWTH FUND
- ----------------------------------------------------------------------------------------------------------------------------------

FOR THE PERIODS ENDED SEPTEMBER 30: 1998 1997 1996(2) 1995 1994(3)
---- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C>

Net Asset Value, Beginning of Period $ 26.35 $ 23.13 $ 16.08 $ 10.90 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.23) (0.07) (0.08) (0.06) (0.02)
Net Gains or Losses on Securities (both realized and (4.19) 3.80 8.17 5.24 0.92
unrealized)
Total From Investment Operations (4.42) 3.73 8.09 5.18 0.90
LESS DISTRIBUTIONS
Dividends (from net investment income) --- --- --- --- ---
Distributions (from capital gains) (0.25) (0.51) (1.04) --- ---
Returns of Capital (0.19) --- --- --- ---
Total Distributions (0.44) (0.51) (1.04) --- ---
Net Asset Value, End of Period $ 21.49 $ 26.35 $ 23.13 $ 16.08 $ 10.90
TOTAL RETURN(1) (16.90)% 16.64% 52.90% 47.52% 12.35%
*************************************
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 147,534 $ 153,462 $ 67,425 $ 13,072 $ 4,806
Ratio of Expenses to Average Net Assets 1.28%+ 1.24% 1.25%* 1.25% 1.09%*
Ratio of Net Income (Loss) to Average Net Assets (0.99)%+ (0.84)% (0.88)%* (0.68)% (0.27)%*
Ratio of Expenses to Average Net Assets
(excluding waivers) 1.41%+ 1.33% 1.54%* 2.39% 4.32%*
Ratio of Net Investment Income (Loss) to Average
Net Assets (excluding waivers) (1.12)%+ (0.93)% (1.17)%* (1.82)% (3.50)%*
Portfolio Turnover Rate 167.73% 130.68% 149.00% 183.49% 173.92%
</TABLE>

1 Returns are for the period indicated and have not been annualized.

3 The Turner Small Cap Growth Fund commenced operations on February 7, 1994.

+ The Ratios of Expenses to Average Net Assets and Net Investment Income to
Average Net Assets do not reflect the Adviser's use of arrangements whereby
certain broker-dealers have agreed to pay certain expenses of the Turner
Small Cap Growth Fund in return for the direction of a percentage of the
Fund's brokerage transactions. For the Turner Small Cap Growth Fund, these
arrangements reduced the Ratio of Expenses to Average Net Assets to 1.25%
(1.38% excluding waivers), for the year ended September 30,1998 and the
Ratio of Net Investment Income (Loss) to Average Net Assets to
(0.96%)((10.9%) excluding waivers), for the same period above.

* Annualized.

Amounts designated as "--" are either $0 or have been rounded to $0.

<PAGE>

FINANCIAL HIGHLIGHTS TURNER MICRO CAP GROWTH FUND
- --------------------------------------------------------------------------------

FOR THE PERIODS ENDED SEPTEMBER 30: 1998(1)
----
Net Asset Value, Beginning of Period $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.04)
Net Gains or Losses on Securities (both realized and
unrealized) (0.08)
Total From Investment Operations (0.12)
LESS DISTRIBUTIONS
Dividends (from net investment income) ---
Distributions (from capital gains) ---
Total Distributions ---
Net Asset Value, End of Period $ 9.88
TOTAL RETURN (1.20)%+
*************************************
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 2,843
Ratio of Expenses to Average Net Assets 1.25%*
Ratio of Net Income (Loss) to Average Net Assets (0.64)%*
Ratio of Expenses to Average Net Assets
(excluding waivers) 8.18%*
Ratio of Net Investment Income (Loss) to Average Net
Assets (excluding waivers) (7.57)%*
Portfolio Turnover Rate 128.53%

- ---------------
1 The Turner Micro Cap Growth Fund commenced operations on March 1, 1998.
+ Returns are for the period indicated and have not been annualized
* Annualized.

Amounts designated as "--" are either $0 or have been rounded to $0.

<PAGE>

FINANCIAL HIGHLIGHTS TURNER SHORT DURATION GOVERNMENT FUNDS - ONE YEAR PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------

For the seven month period ended For the years ended
September 30: February 28:

1998(1) 1998(2) 1997 1996 1995(3)
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.08 $ 10.06 $ 10.03 $ 9.99 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.35 0.60 0.60 0.64 0.53
Net Gains or Losses on Securities (both realized and
unrealized) --- 0.02 0.03 0.05 (0.02)
Total From Investment Operations 0.35 0.62 0.63 0.69 0.51
LESS DISTRIBUTIONS
Dividends (from net investment income) (0.33) (0.60) (0.60) (0.65) (0.52)
Distributions (from capital gains) (0.01) --- --- --- ---
Total Distributions (0.34) (0.60) (0.60) (0.65) (0.52)
Net Asset Value, End of Period $ 10.09 $ 10.08 $ 10.06 $ 10.03 $ 9.99
TOTAL RETURN 3.50%+ 6.34% 6.32% 7.09% 5.21%
*************************************
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 991 $ 1,195 $ 864 $ 398 $ 145
Ratio of Expenses to Average Net Assets 0.00%* 0.00% 0.00% 0.00% 0.00%
Ratio of Net Income (Loss) to Average Net Assets 5.88%* 5.97% 5.91% 6.46% 5.74%
Ratio of Expenses to Average Net Assets
(excluding waivers) 10.83%* 8.83% 10.25% 16.47% 27.89%
Ratio of Net Investment Income (Loss) to Average Net
Assets (excluding waivers) (4.95)%* (2.86)% (4.34)% (10.01)% (22.15)%
Portfolio Turnover Rate 96.56% 68.80% 81.82% --- ---
</TABLE>

- ----------------------
1 On November 10, 1997 the Board of Trustees of the Fund approved a change in
the Turner Short Duration Government Funds - One Year Portfolio's year end
from February 28 to September 30, effective March 1, 1998.

2 On January 22, 1998, shareholders of the Fund approved a change in the
adviser from Solon Asset Management, L.P. to Turner Investment Partners,
Inc.

3 The Turner Short Duration Government Funds - One Year Portfolio commenced
operations on March 1, 1994.

+ Returns are for the period and have not been annualized.

* Annualized.

Amounts designated as "--" are either $0 or have been rounded to $0.

<PAGE>

FINANCIAL HIGHLIGHTS TURNER SHORT DURATION GOVERNMENT FUNDS-THREE YEAR PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------------------

For the seven month period ended For the years ended
September 30: February 28:

1998(1) 1998(2) 1997 1996 1995(3)
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>

Net Asset Value, Beginning of Period $ 10.10 $ 10.00 $ 10.04 $ 9.80 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.35 0.59 0.58 0.60 0.61
Net Gains or Losses on Securities (both realized and
unrealized) 0.15 0.10 (0.01) 0.23 (0.22)
Total From Investment Operations 0.50 0.69 0.57 0.83 0.39
LESS DISTRIBUTIONS
Dividends (from net investment income) (0.34) (0.59) (0.59) (0.59) (0.59)
Distributions (from capital gains) (0.01) --- (0.02) --- ---
Total Distributions (0.35) (0.59) (0.61) (0.59) (0.59)
Net Asset Value, End of Period $ 10.25 $ 10.10 $ 10.00 $ 10.04 $ 9.80
TOTAL RETURN 5.09%+ 7.07% 5.45% 8.73% 4.08%
*************************************
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 12,015 $ 15,544 $ 17,809 $ 11,027 $ 7,065
Ratio of Expenses to Average Net Assets 0.24%* 0.24% 0.24% 0.24% 0.15%
Ratio of Net Income (Loss) to Average Net Assets 5.84%* 5.85% 5.80% 6.18% 6.21%
Ratio of Expenses to Average Net Assets
(excluding waivers) 1.49%* 1.21% 1.21% 1.45% 1.18%
Ratio of Net Investment Income (Loss) to Average Net
Assets (excluding waivers) 4.59%* 4.88% 4.83% 4.97% 5.18%
Portfolio Turnover Rate 121.63% 197.03% 279.00% 251.00% 405.00%
</TABLE>

- ------------------------
1 On November 10, 1997 the Board of Trustees of the Fund approved a change in
the Turner Short Duration Government Funds - Three Year Portfolio's year
end from February 28 to September 30, effective March 1, 1998.

2 On January 22, 1998, shareholders of the Fund approved a change in the
adviser from Solon Asset Management, L.P. to Turner Investment Partners,
Inc.

3 The Turner Short Duration Government Funds - Three Year Portfolio commenced
operations on March 1, 1994.

+ Returns are for the period and have not been annualized.

* Annualized.

Amounts designated as "--" are either $0 or have been rounded to $0.

<PAGE>

FINANCIAL HIGHLIGHTS TIP TARGET SELECT EQUITY FUND
- --------------------------------------------------------------------------------

FOR THE PERIOD ENDED SEPTEMBER 30: 1998(2)
-------
Net Asset Value, Beginning of Period $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.01)
Net Gains or Losses on Securities (both realized and
unrealized) 0.35
Total From Investment Operations 0.34
LESS DISTRIBUTIONS
Dividends (from net investment income) ---
Distributions (from capital gains) ---
Total Distributions ---
Net Asset Value, End of Period $ 10.34
TOTAL RETURN(1) 3.50%
*************************************
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 966
Ratio of Expenses to Average Net Assets 1.30%*
Ratio of Net Income (Loss) to Average Net Assets 0.02%*
Ratio of Expenses to Average Net Assets
(excluding waivers) 18.76%*
Ratio of Net Investment Income (Loss) to Average Net
Assets (excluding waivers) (17.44)%*
Portfolio Turnover Rate 803.02%

- -----------------------
1 Returns are for the period indicated and have not been annualized.
2 The TIP Target Select Equity Fund commenced operations on January 1, 1998.
* Annualized.

Amounts designated as "--" are either $0 or have been rounded to $0.

<PAGE>

[LOGO] TIP FUNDS

INVESTMENT ADVISER

Turner Investment Partners, Inc.

DISTRIBUTORS

SEI Investments Distribution Co.

LEGAL COUNSEL

Morgan, Lewis & Bockius LLP

More information about the Funds is available without charge through the
following:

STATEMENT OF ADDITIONAL INFORMATION (SAI)
- --------------------------------------------------------------------------------

The SAI dated January 31, 1999, includes more detailed information about TIP
Funds. The SAI is on file with the SEC and is incorporated by reference into
this prospectus. This means that the SAI, for legal purposes, is a part of this
prospectus.

ANNUAL AND SEMI-ANNUAL REPORTS
- --------------------------------------------------------------------------------

These reports list the Funds' holdings and contain information from the Funds'
managers about fund strategies and recent market conditions and trends. The
reports also contain detailed financial information about the Funds.

TO OBTAIN MORE INFORMATION:

BY TELEPHONE: Call 1-800-224-6312.
BY MAIL: Write to the Funds at:
P.O. Box 419805
Kansas City, MO 64141-6805
BY INTERNET: http://www.___________

FROM THE SEC: You can also obtain the SAI or the Annual or Semi-Annual Reports,
as well as other information about TIP Funds, from the SEC's website
("http://www.sec.gov"). You may review and copy documents at the SEC Public
Reference Room in Washington, DC (for information call 1-800-SEC-0330). You may
request documents by mail from the SEC, upon payment of a duplicating fee, by
writing to: Securities and Exchange Commission, Public Reference Section,
Washington, DC 20549- 6009.

The Funds' Investment Company Act registration number is 811-07527.

<PAGE>

TIP FUNDS

PROSPECTUS
JANUARY 31, 1999

-------------------------------------------------------
CLOVER FUNDS:

CLOVER SMALL CAP VALUE FUND
CLOVER EQUITY VALUE FUND
CLOVER MAX CAP VALUE FUND
CLOVER FIXED INCOME FUND

----------------------------------------------------

INVESTMENT ADVISER:

CLOVER CAPITAL MANAGEMENT, INC.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED ANY
FUND SHARES OR DETERMINED WHETHER THIS PROSPECTUS IS
ACCURATE OR COMPLETE. IT IS A CRIME FOR ANYONE TO TELL YOU OTHERWISE.

<PAGE>

TIP FUNDS

HOW TO READ THIS PROSPECTUS
- --------------------------------------------------------------------------------

Clover Small Cap Value Fund.....................................................
Clover Equity Value Fund........................................................
Clover Max Cap Value Fund.......................................................
Clover Fixed Income Fund........................................................
The Funds' other investments....................................................
Investment Advisers.............................................................
Purchasing, selling and exchanging Fund shares..................................
Dividends, distributions and taxes..............................................
Financial Highlights............................................................
How to obtain more information about TIP Funds........................Back Cover

For information about key terms and concepts, look for our "________________"
explanations.

[INSERT ICON MAP]

<PAGE>

INTRODUCTION-INFORMATION COMMON TO ALL FUNDS
- --------------------------------------------------------------------------------

Each Fund is a mutual fund. A mutual fund pools shareholders' money and, using
professional investment managers, invests it in securities.

- --------------------------------------------------------------------------------

YEAR 2000 RISKS

<PAGE>

CLOVER SMALL CAP VALUE FUND
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY

<TABLE>
<S> <C>
INVESTMENT GOAL Long-term total return
INVESTMENT FOCUS Small cap U.S. common stocks
SHARE PRICE VOLATILITY Medium to high
PRINCIPAL INVESTMENT STRATEGY Attempts to identify small cap U.S. companies that are undervalued
relative to the market or their historical valuation
INVESTOR PROFILE Investors seeking long-term total return who can withstand the share
price volatility of small cap investing.
</TABLE>
- --------------------------------------------------------------------------------

[ICON] INVESTMENT STRATEGY OF THE CLOVER SMALL CAP VALUE FUND

The Clover Small Cap Value Fund invests primarily in common stocks and other
equity securities of U.S. companies with small market capitalizations (i.e.,
under $750 million) that Clover Capital Management believes are undervalued
relative to the market or to their historical valuation. The Fund will invest in
securities of companies operating in a broad range of industries based primarily
on value characteristics such as price-cash flow, price-earnings and price-book
value ratios.

[ICON] WHAT ARE THE RISKS OF INVESTING IN THE FUND?

Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's equity
securities may fluctuate drastically from day-to-day. Individual companies may
report poor results or be negatively affected by industry and/or economic trends
and developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund. In addition, the Fund is subject to the
risk that its principal market segment, small capitalization value stocks, may
underperform compared to other market segments or to the equity markets as a
whole.

The out-of-favor and undervalued companies the Fund invests in may be more
vulnerable to negative investor sentiment, adverse business or economic events
than larger, more growth-oriented companies. In addition, the performance of the
stocks which comprise the portfolio do not necessarily track major market
indices.
4

<PAGE>

CLOVER SMALL CAP VALUE FUND
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION

This bar chart shows changes in the performance of the Fund's Institutional
Class Shares from year to year for two years.*

15.47% 2.01%
1997 1998

[BAR CHART]

* The performance information shown above is based on a calendar year.

Best Quarter Worst Quarter
19.49% -19.03%
(9/30/97) (9/30/98)

This table compares the Fund's average annual total returns for the periods
ended December 31, 1998, to those of the Russell 2000 Index.

1 YEAR SINCE INCEPTION
(2/28/96)
Clover Small Cap Value Fund 2.01% 13.85%
Russell 2000 Index -2.55% 19.00%*

- --------------------------------------------------------------------------------
* The inception date for the Index is February 29, 1996.

- --------------------------------------------------------------------------------
[ICON] FUND FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES
INSTITUTIONAL
CLASS SHARES

Investment Advisory Fees 0.85%
Distribution (12b-1) Fees None
Other Expenses 0.99%
----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.84%
Fee waivers and expense reimbursements 0.44%
----
NET TOTAL OPERATING EXPENSES 1.40%*
- --------------------------------------------------------------------------------
* THE FUND'S ADVISER HAS CONTRACTUALLY AGREED TO WAIVE FEES AND TO REIMBURSE
EXPENSES IN ORDER TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING 1.40% FOR A
PERIOD OF ONE YEAR, RENEWABLE AT THE END OF EACH FISCAL YEAR. For more
information about these fees, see "Investment Adviser" and "Distribution of
Fund Shares."
- --------------------------------------------------------------------------------

EXAMPLE

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS

<S> <C> <C> <C> <C>
Clover Small Cap Value Fund $143 $443 $766 $1,680
</TABLE>

<PAGE>

CLOVER EQUITY VALUE FUND
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY

<TABLE>
<S> <C>
INVESTMENT GOAL Long-term total return
INVESTMENT FOCUS U.S. equity securities
SHARE PRICE VOLATILITY Medium to high
PRINCIPAL INVESTMENT STRATEGY Attempts to identify U.S. equity securities that are undervalued
relative to the market or historic valuations
INVESTOR PROFILE Investors seeking long-term total return who can withstand the
share price volatility of equity investing.
</TABLE>
- --------------------------------------------------------------------------------

[ICON] INVESTMENT STRATEGY OF THE CLOVER EQUITY VALUE FUND

The Clover Equity Value Fund invests primarily in common stocks and other equity
securities of U.S. companies with medium and small market capitalizations (i.e.,
generally $500 million to $5 billion) that Clover Capital Management believes
are undervalued relative to the market or their historic valuation. The Fund
will invest in securities of companies operating in a broad range of industries
based primarily on value characteristics such as price-cash flow, price-earnings
and price-book value ratios.

[ICON] WHAT ARE THE RISKS OF INVESTING IN THE FUND?

The small and medium capitalization companies the Fund invests in may be more
vulnerable to adverse business or economic events than larger, more established
companies. In particular, these small and mid-size companies may have limited
product lines, markets and financial resources, and may depend upon a relatively
small management group. Therefore, small and mid cap stocks may be more volatile
than those of larger companies. These securities may be traded over-the-counter
or listed on an exchange and may or may not pay dividends.

<PAGE>

CLOVER EQUITY VALUE FUND
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION

This bar chart shows changes in the performance of the Fund's Institutional
Class Shares from year to year for seven years.*

7.31% 12.53% 16.03% 21.40% 22.87% 17.54% -1.47%
1992 1993 1994 1995 1996 1997 1998

[BAR CHART]

* The performance information shown above is based on a calendar
year.

Best Quarter Worst Quarter
11.42% -14.28%
(12/31/96) (9/30/98)

This table compares the Fund's average annual total returns for the periods
ended December 31, 1998, to those of the S&P 400 Mid-Cap Index.

1 YEAR 5 YEARS SINCE INCEPTION
(12/6/91)
Clover Equity Value Fund -1.47% 14.92% 14.26%
S&P 400 Mid-Cap Index 19.12% 18.84% 12.35%*

- --------------------------------------------------------------------------------
* The inception date for the Index is December 31, 1991.

WHAT IS AN INDEX?
An index measures the market price of a specific group of securities in a
particular market of securities in a market sector. You cannot invest directly
in an index. An index does not have an investment adviser and does not pay any
commissions or expenses. If an index had expenses, its performance would be
lower. The S&P 400 Mid-Cap Index is a widely-recognized, capitalization-weighted
(companies with larger market capitalizations have more influence than those
with smaller market capitalizations) index of 400 domestic mid-cap stocks chosen
for market size, liquidity, and industry group representation.

- --------------------------------------------------------------------------------
[ICON] FUND FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES
INSTITUTIONAL
CLASS SHARES

Investment Advisory Fees 0.74%
Distribution (12b-1) Fees None
Other Expenses 0.38%
----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.12%
Fee waivers and expense reimbursements 0.02%
----
NET TOTAL OPERATING EXPENSES 1.10%*
- --------------------------------------------------------------------------------
* THE FUND'S ADVISER HAS CONTRACTUALLY AGREED TO WAIVE FEES AND TO REIMBURSE
EXPENSES IN ORDER TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING 1.10% FOR A
PERIOD OF ONE YEAR, RENEWABLE AT THE END OF EACH FISCAL YEAR. For more
information about these fees, see "Investment Adviser" and "Distribution of
Fund Shares."
- --------------------------------------------------------------------------------

EXAMPLE

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Clover Equity Value Fund $112 $350 $606 $1,340
</TABLE>

<PAGE>

CLOVER MAX CAP VALUE FUND
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY

<TABLE>
<S> <C>
INVESTMENT GOAL Long-term total return
INVESTMENT FOCUS Large capitalization U.S.
common stocks
SHARE PRICE VOLATILITY Medium
PRINCIPAL INVESTMENT STRATEGY Attempts to identify large capitalization U.S. companies with
low valuations and attractive dividend yields relative to the
market or to their own trading history
INVESTOR PROFILE Investors seeking long-term total return who can
withstand the share price volatility of equity investing.
</TABLE>
- --------------------------------------------------------------------------------

[ICON] INVESTMENT STRATEGY OF THE CLOVER MAX CAP VALUE FUND

The Clover Max Cap Value Fund invests primarily in common stocks and other
equity securities of U.S. companies with large market capitalizations (i.e.,
generally averaging over $10 billion) that Clover Capital Management believes
have low valuations and attractive dividend yields relative to the market or to
their own trading history. Clover Capital Management will typically screen the
stocks of the 500 largest U.S. companies (based on market capitalization) for
those with the highest dividend yields. The Fund will invest in securities of
companies operating in a broad range of industries based primarily on value
characteristics such as price-cash flow,
dividend yield, price-earnings and price-book value ratios.

[ICON] WHAT ARE THE RISKS OF INVESTING IN THE FUND?

Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's equity
securities may fluctuate drastically from day-to-day. Individual companies may
report poor results or be negatively affected by industry and/or economic trends
and developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund. In addition, the Fund is subject to the
risk that its principal market segment, large capitalization value stocks, may
underperform compared to other market segments or to the equity markets as a
whole.

The out-of-favor and undervalued companies the Fund invests in may be more
vulnerable to negative investor sentiment, adverse business or economic events
than more growth-oriented companies. In addition, the performance of the stocks
which comprise the portfolio do not necessarily track major market indices.

<PAGE>

CLOVER MAX CAP VALUE FUND
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION

This bar chart shows changes in the performance of the Fund's Institutional
Class Shares from year to year for one year.*

13.68%
1998

[BAR CHART]

* The performance information shown above is based on a calendar year.

Best Quarter Worst Quarter
23.03% -12.77%
(12/31/98) (9/30/98)

This table compares the Fund's average annual total returns for the
periods ended December 31, 1998, to those of the S&P 500
Composite Index.

1 YEAR SINCE INCEPTION
(10/31/97)
Clover Max Cap Value Fund 13.68% 12.72%
S&P 500 Composite Index 28.60% 27.10%*

- --------------------------------------------------------------------------------
* The inception date for the Index is October 31, 1997.

WHAT IS AN INDEX?
An index measures the market price of a specific group of securities in a
particular market of securities in a market sector. You cannot invest directly
in an index. An index does not have an investment adviser and does not pay any
commissions or expenses. If an index had expenses, its performance would be
lower. The S&P 500 Composite Index is a widely-recognized, market value-weighted
(higher market value stocks have more influence than lower market value stocks)
index of 500 stocks designed to mimic the overall equity market's industry
weightings. Most, but not all, large capitalization stocks are in the index.
There are also some small capitalization stocks in the index. Stocks included in
the index are mostly NYSE listed companies, with some AMEX and Nasdaq Stock
Market stocks.

- --------------------------------------------------------------------------------
[ICON] FUND FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES

INSTITUTIONAL CLASS SHARES

Investment Advisory Fees 0.74%
Distribution (12b-1) Fees None
Other Expenses 10.66%
-----
TOTAL ANNUAL FUND OPERATING EXPENSES 11.40%
Fee waivers and expense reimbursements 10.45%
-----
NET TOTAL OPERATING EXPENSES 0.95%*
- --------------------------------------------------------------------------------

* THE FUND'S ADVISER HAS CONTRACTUALLY AGREED TO WAIVE FEES AND TO REIMBURSE
EXPENSES IN ORDER TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING 0.95% FOR A
PERIOD OF ONE YEAR, RENEWABLE AT THE END OF EACH FISCAL YEAR. For more
information about these fees, see "Investment Adviser" and "Distribution of
Fund Shares."
- --------------------------------------------------------------------------------

EXAMPLE

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Clover Max Cap Value Fund $97 $303 $525 $1,166
</TABLE>

<PAGE>

CLOVER FIXED INCOME FUND
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY

<TABLE>
<S> <C>
INVESTMENT GOAL High current income
INVESTMENT FOCUS Fixed income obligations of U.S.
issuers
SHARE PRICE VOLATILITY Low to medium
PRINCIPAL INVESTMENT STRATEGY Attempts to identify investment-grade U.S. government and corporate
securities that offer income potential
INVESTOR PROFILE Investors seeking high current income who can withstand some
modest share price volatility.
</TABLE>
- --------------------------------------------------------------------------------

[ICON] INVESTMENT STRATEGY OF THE CLOVER FIXED INCOME FUND

The Clover Fixed Income Fund invests primarily in U.S. government obligations
and investment grade fixed income securities, including corporate debt
obligations and mortgage- and asset-backed securities. In selecting investments
for the Fund, Clover Capital Management chooses fixed income securities of
issuers that they believe will offer attractive income potential with an
acceptable level of risk. Clover Capital Management will invest in fixed income
obligations of different types and maturities depending on its current
assessment of the relative market values of the sectors in which the Fund
invests. Clover Capital Management does not attempt to forecast interest rate
changes. The Fund's average weighted maturity will typically be between seven
and nine years.

[ICON] WHAT ARE THE RISKS OF INVESTING IN THE FUND?

The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk. In addition, the Fund is subject to the risk that its principal
market segment, fixed income securities, may underperform compared to other
market segments or to the fixed income markets as a whole.

Although the Fund's U.S. government securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates. Obligations issued by some U.S. Government agencies are
backed by the U.S. Treasury, while others are backed solely by the ability of
the agency to borrow from the U.S. Treasury or by the agency's own resources,
and are subject to more risk.

Mortgage-backed securities are fixed income securities representing an interest
in a pool of underlying mortgage loans. They are sensitive to changes in
interest rates, but may respond to these changes differently from other fixed
income securities due to the possibility of prepayment of the underlying
mortgage loans. As a result, it may not be possible to determine in advance the
actual maturity date or average life of a mortgage-backed security. Rising
interest rates tend to discourage refinancings, with the result that the average
life and volatility of the security will increase, exacerbating its decrease in
market price. When interest rates fall, however, mortgage-backed securities may
not gain as much in market value because of the exception of additional mortgage
prepayments that must be reinvested at lower interest rates. Prepayment risk may
make it difficult to calculate the average maturity of the Fund's
mortgage-backed securities and, therefore, to assess the volatility risk of the
Fund.

<PAGE>

CLOVER FIXED INCOME FUND
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION

This bar chart shows changes in the performance of the Fund's Institutional
Class Shares from year to year for seven years.*

7.37% 11.45% -2.83% 17.97% 4.41% 9.57% 7.89%
1992 1993 1994 1995 1996 1997 1998

[BAR CHART]

* The performance information shown above is based on a calendar year.

Best Quarter Worst Quarter
5.85% -2.27%
(6/30/95) (3/31/94)

This table compares the Fund's average annual total returns for the periods
ended December 31, 1998, to those of the Merrill Lynch U.S. Domestic Master Bond
Index.

1 YEAR 5 YEARS SINCE INCEPTION
(12/6/91)

Clover Fixed Income Fund 7.89% 7.19% 8.06%
Merrill Lynch U.S.
Domestic Master Bond Index 8.82% 7.32% 8.20%*

- --------------------------------------------------------------------------------
* The inception date for the Index is December 31, 1991.

- --------------------------------------------------------------------------------
[ICON] FUND FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES
INSTITUTIONAL
CLASS SHARES

Investment Advisory Fees 0.45%
Distribution (12b-1) Fees None
Other Expenses 0.54%
----
TOTAL ANNUAL FUND OPERATING EXPENSES 0.99%
Fee waivers and expense reimbursements 0.24%
----
NET TOTAL OPERATING EXPENSES 0.75%*
- --------------------------------------------------------------------------------

* THE FUND'S ADVISER HAS CONTRACTUALLY AGREED TO WAIVE FEES AND TO REIMBURSE
EXPENSES IN ORDER TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING 0.75% FOR A
PERIOD OF ONE YEAR, RENEWABLE AT THE END OF EACH FISCAL YEAR. For more
information about these fees, see "Investment Adviser" and "Distribution of
Fund Shares."
- --------------------------------------------------------------------------------

EXAMPLE

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
Clover Fixed Income Fund $77 $240 $417 $930
</TABLE>

<PAGE>

[ICON] THE FUNDS' OTHER INVESTMENTS
- --------------------------------------------------------------------------------

[ICON] INVESTMENT ADVISER
- --------------------------------------------------------------------------------

As the Funds' Adviser, Clover Capital Management makes investment decisions for
the Funds and continuously reviews, supervises and administers the Funds'
investment programs. The Adviser also ensures compliance with the Funds'
investment policies and guidelines.

Clover Capital Management, Inc., an SEC-registered adviser, serves as the
Adviser to the Clover Small Cap Value, Clover Equity Value, Clover Max Cap
Value, and Clover Fixed Income Funds. As of October 31, 1998, Clover Capital had
approximately $1.9 billion in assets under management.

For the fiscal year ended September 30, 1998, the Funds paid Clover investment
advisory fees (after waivers and reimbursements) of:

Clover Small Cap Value Fund................................ .41%
Clover Equity Value Fund................................... .72%
Clover Max Cap Value Fund.................................. (8.91)%
Clover Fixed Income Fund .................................. .21%

PORTFOLIO MANAGERS

The Small Cap Value Fund is managed by a committee of research professionals led
by Michael E. Jones and Lawrence R. Creatura. The Equity Value Fund is managed
by a committee of research professionals led by Michael E. Jones and Paul W.
Spindler. The Max Cap Value Fund is managed by a committee of research
professionals led by Lawrence R. Creatura amd Paul W. Spindler. The Fixed Income
Fund is managed by a committee of research professionals led by Richard J.
Huxley and Paul W. Spindler. The background of each committee member is set
forth below.

<PAGE>

Michael E. Jones is a member of the committee which manages the Max Cap Value
and Small Cap Value Funds. Mr. Jones, CFA, is a co-founder and Managing Director
of Clover Capital. He has over 19 years of investment experience.

Lawrence R. Creatura is a member of the committee which manages the Max Cap
Value and Small Cap Value Funds, as set forth above. Mr. Creatura, CFA, is a
Vice President of Investments of Clover Capital. Prior to his current position,
he was a Laser Systems Engineer/Researcher for Laser Surge, Inc.

Paul W. Spindler is a member of the committee which manages the Max Cap Value,
Equity Value and Fixed Income Funds. Mr. Spindler, CFA, is a Vice President of
Investments of Clover Capital.

Richard J. Huxley is a member of the committee which manages the Fixed Income
Funds. Mr. Huxley is the Executive Vice President and Fixed Income Manager for
Clover Capital.

<PAGE>

[ICON] PURCHASING, SELLING AND EXCHANGING FUND SHARES
- --------------------------------------------------------------------------------

This section tells you how to buy, sell (sometimes called "redeem") or exchange
shares of the Funds.

WHEN CAN YOU PURCHASE SHARES?
You may purchase shares of any Fund on any day that the New York Stock Exchange
is open for business (a Business Day).

HOW TO PURCHASE FUND SHARES

You may purchase shares directly from the Funds by:

o mail
o telephone
o wire, or
o Automated Clearing House (ACH).

You may also buy shares through accounts with brokers and other institutions
that are authorized to place trades in Fund shares for customers. If you invest
through an authorized institution, you will have to follow its procedures, which
may be different from the procedures for investing directly. Your institution
may charge a fee for its services, in addition to the fees charged by the Funds.
You will also generally have to address your correspondence or questions
regarding the Funds to your institution.

FOR CUSTOMERS OF FINANCIAL INSTITUTIONS
If you purchase, sell or exchange Fund shares through a financial institution
(rather than directly from us), you may have to transmit your purchase, sale and
exchange requests to your financial institution at an earlier time for your
transaction to become effective that day. This allows the financial institution
time to process your request and transmit it to us. For more information about
how to purchase, sell or exchange Fund shares through your financial
institution, you should contact your financial institution directly.

We may reject any purchase order if we determine that accepting the order would
not be in the best interests of the Funds or their shareholders.

The price per share (the offering price) will be the net asset value per share
(NAV) next determined after the Funds receive your purchase order. The Funds'
NAV is calculated once each Business Day at the regularly- scheduled close of
normal trading on the New York Stock Exchange (normally, 4:00 p.m. Eastern
time). So, for you to want to receive the current Business Day's NAV, generally
we must receive your purchase order before 4:00 p.m. Eastern time.

NET ASSET VALUE

NAV for one Fund share is the value of that share's portion of all of the net
assets in the Fund.

HOW WE CALCULATE NAV

<PAGE>

weekends or other days when the Funds do not calculate NAV. As a result, the
value of the Funds' investments may change on days when you cannot purchase or
sell Fund shares.

MINIMUM PURCHASES

To purchase shares for the first time, you must invest at least $2,500 in any
Fund. Your subsequent investments in the Funds must be made in amounts of at
least $500. We may accept investments of smaller amounts at our discretion.

TELEPHONE TRANSACTIONS
Purchasing, selling and exchanging Fund shares over the telephone is extremely
convenient, but not without risk. Although we have certain safeguards and
procedures to confirm the identity of callers and the authenticity of
instructions, we are not responsible for any losses or costs incurred by
following telephone instructions we reasonably believe to be genuine. If you or
your financial institution transact with us over the telephone, you will
generally bear the risk of any loss.

SYSTEMATIC INVESTMENT PLAN

If you have checking or savings accounts with certain banks, you may purchase
shares automatically through regular deductions from your account. Please call
1-800-224-6312 for information regarding participating banks. With minimum
initial purchase amounts and a minimum preauthorized investment amount of $100,
you may begin regularly scheduled investments once a month.

SELLING FUND SHARES

HOW TO SELL YOUR FUND SHARES

You may sell shares by following procedures established when you opened your
account or accounts. If you have questions, call 1-800-224-6312. If you own
shares through an account with a broker or other institution, contact that
broker or institution to sell your shares. If you would like to sell $50,000 or
more of your shares, please notify us in writing and include a signature
guarantee.

The sale price of each share will be the next NAV determined after we receive
your request.

SIGNATURE GUARANTEES
A signature guarantee is a widely accepted way to protect shareholders by
verifying the signature in certain circumstances including, (1) written requests
for redemptions in excess of $50,000; (2) all written requests to wire
redemption proceeds to a bank other than the bank previously designated on the
account application; and (3) redemption requests that provide that the
redemption proceeds should be sent to an address other than the address of
record or to a person other than the registered shareholder(s) for the account.
Signature guarantees can be obtained from any of the following institutions: a
national or state bank, a trust company, a federal savings and loan association,
or a broker-dealer that is a member of a national securities exchange. A
notarized signature is not sufficient.

SYSTEMATIC WITHDRAWAL PLAN

IF YOU HAVE AT LEAST $2,500 IN YOUR ACCOUNT, YOU MAY USE THE SYSTEMATIC
WITHDRAWAL PLAN. Under the plan you may arrange monthly, quarterly, semi-annual
or annual automatic withdrawals of at least $100 from any Fund. The proceeds of
each withdrawal will be mailed to you by check or, if you have an account with
certain banks, electronically transferred to your account. Please call 1-800-
224-6312 for information regarding banks that participate in the Systematic
Withdrawal Plan.

RECEIVING YOUR MONEY

<PAGE>

or sent to you by check. IF YOU RECENTLY PURCHASED YOUR SHARES BY CHECK OR
THROUGH ACH, REDEMPTION PROCEEDS MAY NOT BE AVAILABLE UNTIL YOUR CHECK HAS
CLEARED (WHICH MAY TAKE UP TO 15 BUSINESS DAYS FROM THE DATE OF PURCHASE).

REDEMPTIONS IN KIND

SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES

The Funds may suspend your right to sell your shares if the NYSE restricts
trading, the SEC declares an emergency or for other reasons. More information
about this is in the Funds' Statement of Additional Information (SAI).

INVOLUNTARY SALES OF YOUR SHARES

EXCHANGING FUND SHARES

HOW TO EXCHANGE YOUR SHARES

EXCHANGES
When you exchange shares, you are really selling your shares and buying other
Fund shares. So, your sale price and purchase price will be based on the NAV
next calculated after we receive your exchange request.

DISTRIBUTION OF FUND SHARES

CCM Securities, Inc. ("CCM Securities") is the distributor of the shares of the
Funds.

CCM Securities receives no compensation for distributing the Funds' shares.

<PAGE>

DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------

DIVIDENDS AND DISTRIBUTIONS

The Clover Small Cap Value, Clover Equity Value and Clover Max Cap Value Funds
distribute their investment income quarterly as a dividend to shareholders.
The Clover Fixed Income Fund distributes its investment income monthly as a
dividend to shareholders.

THE "RECORD DATE"
If you own Fund shares on a Fund's record date, you will be entitled to receive
the distribution.

TAXES

FUND DISTRIBUTIONS
Distributions you receive from a Fund may be taxable whether or not you reinvest
them.

MORE INFORMATION ABOUT TAXES IS IN THE SAI.

<PAGE>

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS
Study these tables to see how each Fund performed since it began investment
operations.

FINANCIAL HIGHLIGHTS CLOVER SMALL CAP VALUE FUND
- -----------------------------------------------------------------------------------------------------------------------

FOR THE PERIODS ENDED SEPTEMBER 30: 1998 1997(1) 1996(2)
---- ---- ----
<S> <C> <C> <C>
Net Asset Value, Beginning of $ 15.94 $ 10.87 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.06) (0.04) 0.02
Net Gains or Losses on Securities (both realized and
unrealized) (3.22) 5.24 0.88
Total From Investment Operations (3.28) 5.20 0.90
LESS DISTRIBUTIONS
Dividends (from net investment income) -- -- (0.03)
Distributions (from capital gains) (1.17) (0.13) --
Total Distributions (1.17) (0.13) (0.03)
Net Asset Value, End of Period $ 11.49 $ 15.94 $ 10.87
TOTAL RETURN (21.25%)+ 48.23%+ 8.97%+
*************************************
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 15,662 $ 15,279 $ 4,495
Ratio of Expenses to Average Net Assets 1.40% 1.40%* 1.40%*
Ratio of Net Income (Loss) to Average Net Assets (0.50)% (0.64)%* (0.03)%*
Ratio of Expenses to Average Net Assets
(excluding waivers) 1.84% 2.43%* 5.29%*
Ratio of Net Investment Income (Loss) to Average Net
Assets (excluding waivers) (0.94)% (1.67)%* (3.92)%*
Portfolio Turnover Rate 70.02% 59.03% 14.17%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

- -------------------
1 On June 25, 1997 the Board of Trustees of the Fund approved a change in the
Fund's fiscal year end from October 31 to September 30, effective September
30, 1997.

2 The Clover Small Cap Value Fund commenced operations on February 28, 1996.

+ Returns are for the periods indicated and have not been annualized.

* Annualized

Amounts designated as "--" are either $0 or have been rounded to $0.

<PAGE>

FINANCIAL HIGHLIGHTS CLOVER EQUITY VALUE FUND
- ------------------------------------------------------------------------------------------------------------------------------------

FOR THE PERIODS ENDED SEPTEMBER 30: 1998 1997(1) 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 18.99 $ 16.20 $ 15.29 $ 13.74 $ 11.94
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.15 0.18 0.19 0.24 0.08
Net Gains or Losses on Securities (both realized and
unrealized) (1.12) 3.54 2.15 2.46 2.01
Total From Investment Operations (0.97) 3.72 2.34 2.70 2.09
LESS DISTRIBUTIONS
Dividends (from net investment income) (0.15) (0.18) (0.22) (0.22) (0.08)
Distributions (from capital gains) (2.02) (0.75) (1.21) (0.93) (0.21)
Total Distributions (2.17) (0.93) (1.43) (1.15) (0.29)
Net Asset Value, End of Period $ 15.85 $ 18.99 $ 16.20 $ 15.29 $ 13.74
TOTAL RETURN (6.00)%+ 23.86%+ 16.47% 21.25% 17.80%

************************************

RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 90,806 $ 117,859 $ 85,050 $ 51,647 $ 25,249
Ratio of Expenses to Average Net Assets 1.10% 1.10%* 1.10% 1.10% 1.14%
Ratio of Net Income (Loss) to Average Net Assets 0.82% 1.18%* 1.32% 1.82% 0.71%
Ratio of Expenses to Average Net Assets
(excluding waivers) 1.12% 1.15%* 1.21% 1.20% 1.30%
Ratio of Net Investment Income (Loss) to Average
Net Assets (excluding waivers) 0.80% 1.13%* 1.21% 1.72% 0.55%
Portfolio Turnover Rate 42.10% 51.64% 51.36% 84.76% 58.44%
</TABLE>

1 On June 25, 1997 the Board of Trustees of the Fund approved a change in the
Fund's fiscal year end from October 31 to September 30, effective September
30, 1997.

+ Returns are for the periods indicated and have not been annualized.

* Annualized

Amounts designated as "--" are either $0 or have been rounded to $0.

<PAGE>

FINANCIAL HIGHLIGHTS CLOVER MAX CAP VALUE FUND
- --------------------------------------------------------------------------------

FOR THE PERIOD ENDED SEPTEMBER 30: 1998(1)
----
Net Asset Value, Beginning of Period $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.15
Net Gains or Losses on Securities (both realized
and unrealized) (0.79)
Total From Investment Operations (0.64)
LESS DISTRIBUTIONS
Dividends (from net investment income) (0.15)
Distributions (from capital gains) --
Total Distributions (0.15)
Net Asset Value, End of Period $ 9.21
TOTAL RETURN (6.52)%+

*************************************

RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 1,776
Ratio of Expenses to Average Net Assets 0.95%*
Ratio of Net Income (Loss) to Average Net Assets 1.82%*
Ratio of Expenses to Average Net Assets
(excluding waivers) 11.40%*
Ratio of Net Investment Income (Loss) to Average
Net Assets (excluding waivers) (8.63)%*
Portfolio Turnover Rate 62.71%

- ----------------

1 The Clover Max Cap Value Fund commenced operations on October 31, 1997.

+ Returns are for the periods indicated and have not been annualized.

* Annualized

Amounts designated as "--" are either $0 or have been rounded to $0.

<PAGE>

FINANCIAL HIGHLIGHTS CLOVER FIXED INCOME FUND
- -----------------------------------------------------------------------------------------------------------------------------------

FOR THE PERIODS ENDED SEPTEMBER 30: 1998 1997(1) 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.92 $ 9.85 $ 9.89 $ 9.14 $ 10.85
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.57 0.54 0.59 0.58 0.57
Net Gains or Losses on Securities (both realized
and unrealized) 0.51 0.16 0.01 0.77 (0.92)
Total From Investment Operations 1.08 0.70 0.60 1.35 (0.35)
LESS DISTRIBUTIONS
Dividends (from net investment income) (0.57) (0.54) (0.59) (0.58) (0.57)
Distributions (from capital gains) (0.02) (0.09) (0.05) (0.02) (0.79)
Total Distributions (0.59) (0.63) (0.64) (0.60) (1.36)
Net Asset Value, End of Period $ 10.41 $ 9.92 $ 9.85 $ 9.89 $ 9.14
TOTAL RETURN 11.32%+ 7.43%+ 6.26% 15.27% (3.54)%
*************************************
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $33,375 $23,677 $19,731 $14,685 $ 9,762
Ratio of Expenses to Average Net Assets 0.75% 0.75%* 0.80% 0.80% 0.80%
Ratio of Net Income (Loss) to Average Net Assets 5.67% 6.03% 6.00% 6.13% 5.88%
Ratio of Expenses to Average Net Assets
(excluding waivers) 0.99% 1.02%* 1.11% 1.40% 1.46%
Ratio of Net Investment Income (Loss) to Average
Net Assets (excluding waivers) 5.43% 5.76% 5.69% 5.53% 5.22%
Portfolio Turnover Rate 27.07% 11.83% 24.52% 35.84% 11.11%
</TABLE>

- --------------
1 On June 25, 1997 the Board of Trustees of the Fund approved a change in the
Fund's fiscal year end from October 31 to September 30, effective September
30, 1997.

+ Returns are for the periods indicated and have not been annualized.

* Annualized

Amounts designated as "--" are either $0 or have been rounded to $0.

<PAGE>

TIP FUNDS

INVESTMENT ADVISER

Clover Capital Management, Inc.

DISTRIBUTORS

CCM Securities, Inc.

LEGAL COUNSEL

Morgan, Lewis & Bockius LLP

More information about the Funds is available without charge through the
following:

STATEMENT OF ADDITIONAL INFORMATION (SAI)
- --------------------------------------------------------------------------------

ANNUAL AND SEMI-ANNUAL REPORTS
- --------------------------------------------------------------------------------

TO OBTAIN MORE INFORMATION:

BY TELEPHONE: Call 1-800-224-6312.

BY MAIL: Write to the Funds at:
P.O. Box 419805
Kansas City, MO 64141-6805

The Funds' Investment Company Act registration number is 811-07527.

<PAGE>

TIP FUNDS

PROSPECTUS
JANUARY 31, 1999

INSTITUTIONAL CLASS SHARES
ADVISER CLASS SHARES

----------------------------------------------------
PENN CAPITAL FUNDS:

PENN CAPITAL STRATEGIC HIGH YIELD BOND FUND
PENN CAPITAL SELECT FINANCIAL SERVICES FUND
PENN CAPITAL VALUE PLUS FUND

----------------------------------------------------

INVESTMENT ADVISER:

PENN CAPITAL MANAGEMENT COMPANY, INC.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED ANY FUND SHARES OR
DETERMINED WHETHER THIS PROSPECTUS IS ACCURATE OR COMPLETE. IT IS A CRIME FOR
ANYONE TO TELL YOU OTHERWISE.

<PAGE>

TIP FUNDS

HOW TO READ THIS PROSPECTUS
- --------------------------------------------------------------------------------

Penn Capital Strategic High Yield Bond Fund....................................
Penn Capital Select Financial Services Fund....................................
Penn Capital Value Plus Fund...................................................
The Funds' other investments...................................................
Investment Adviser ............................................................
Purchasing, selling and exchanging Fund shares.................................
Dividends, distributions and taxes.............................................
Financial Highlights...........................................................
How to obtain more information about TIP Funds.......................Back Cover

For information about key terms and concepts, look for our "________________"
explanations.

[INSERT ICON MAP]

<PAGE>

INTRODUCTION-INFORMATION COMMON TO ALL FUNDS
- --------------------------------------------------------------------------------

Each Fund is a mutual fund. A mutual fund pools shareholders' money and, using
professional investment managers, invests it in securities.

- --------------------------------------------------------------------------------

YEAR 2000 RISKS

<PAGE>

PENN CAPITAL STRATEGIC HIGH YIELD BOND FUND
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY

<TABLE>

<S> <C>
INVESTMENT GOAL High current income and capital appreciation
INVESTMENT FOCUS High yield "junk" bonds and other
high yield securities
SHARE PRICE VOLATILITY High
PRINCIPAL INVESTMENT STRATEGY Attempts to identify high yield
"junk" bonds and other high yield securities with
capital appreciation potential
INVESTOR PROFILE Investors seeking current income and
long-term growth of capital who
can withstand the share price
volatility or risk of high yield
"junk" bond investing.
</TABLE>
- --------------------------------------------------------------------------------

[ICON] INVESTMENT STRATEGY OF THE PENN CAPITAL STRATEGIC HIGH YIELD BOND FUND

The Penn Capital Strategic High Yield Bond Fund invests primarily in fixed
income securities rated below investment grade ("junk" bonds). In selecting
investments for the Fund, Penn Capital Management chooses securities that offer
high current yields as well as capital appreciation potential, including
preferred stocks, convertible securities, zero coupon obligations,
payment-in-kind bonds, and variable rate securities. The Fund's average weighted
maturity may vary, and will generally be ten years or less. The Fund will
typically invest in securities rated BB+/Ba1 or lower, and may purchase unrated
securities and securities rated in the lowest ratings categories.

[ICON] WHAT ARE THE RISKS OF INVESTING IN THE FUND?

The prices of the Fund's fixed income securities respond to economic
developments, including interest rate changes, as well as to perceptions about
the creditworthiness of individual issuers. Since the value of securities with
longer maturities will fluctuate more in response to interest rate changes, this
risk is greater for long-term debt securities than for short-term debt
securities. Fixed income securities, regardless of credit quality, experience
price volatility, especially in reponse to interest rate changes. Generally, the
Fund's fixed income securities will decrease in value if interest rates rise and
vice versa, and the volatility of lower rated securities is even greater than
that of higher rated securities. Also, longer-term securities are generally more
volatile, so the average maturity or duration of these securities affects risk.
However, high yield "junk" bonds generally are less sensitive to interest rate
changes.

"Junk" bonds involve greater risks of default or downgrade and are more volatile
than investment grade securities. Junk bonds involve greater risk of price
declines than investment grade securities due to actual or perceived changes in
an issuer's creditworthiness. In addition, issuers of junk bonds may be more
susceptible than other issuers to economic downturns. Junk bonds are subject to
the risk that the issuer may not be able to pay interest or dividends and
ultimately to repay principal upon maturity. Discontinuation of these payments
could substantially adversely affect the market price of the security.

The Fund is subject to the risk that its particular market segment, high yield
securities, may underperform compared to other market segments or to the fixed
income markets as a whole.

<PAGE>

PENN CAPITAL STRATEGIC HIGH YIELD BOND FUND
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION

The Fund was launched on March 1, 1998. Since the Fund does not have a full
calendar year of performance, performance results have not been provided.

- --------------------------------------------------------------------------------
[ICON] FUND FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS SHARES ADVISER CLASS SHARES

Investment Advisory Fees 0.55% 0.55%
Distribution (12b-1) Fees None None
Other Expenses 1.54% 1.79%
----- -----
TOTAL ANNUAL FUND OPERATING EXPENSES 2.09% 2.34%
Fee waivers and expense reimbursements 1.41% 1.41%
----- ----
NET TOTAL OPERATING EXPENSES 0.68%* 0.93%*
</TABLE>
- --------------------------------------------------------------------------------
* THE FUND'S ADVISER HAS CONTRACTUALLY AGREED TO WAIVE FEES AND TO REIMBURSE
EXPENSES IN ORDER TO KEEP TOTAL OPERATING EXPENSES AT THE INSTITUTIONAL AND
ADVISER CLASS SHARES FROM EXCEEDING 0.68% AND 0.93%, RESPECTIVELY, FOR A PERIOD
OF ONE YEAR, RENEWABLE AT THE END OF EACH FISCAL YEAR. For more information
about these fees, see "Investment Adviser" and "Distribution of Fund Shares."
- --------------------------------------------------------------------------------

EXAMPLE

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS

<S> <C> <C> <C> <C>
Institutional Class Shares $69 $218 $379 $847
Adviser Class Shares $95 $296 $515 $1,143
</TABLE>

<PAGE>

PENN CAPITAL SELECT FINANCIAL SERVICES FUND
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT GOAL Long-term capital appreciation
INVESTMENT FOCUS Common stocks of U.S. financial services firms
SHARE PRICE VOLATILITY High
PRINCIPAL INVESTMENT STRATEGY Attempts to identify quality U.S. financial services firms
INVESTOR PROFILE Investors who want capital appreciation and who can
withstand the risks of equity and financial sector investing.
</TABLE>
- --------------------------------------------------------------------------------

[ICON] INVESTMENT STRATEGY OF THE PENN CAPITAL SELECT FINANCIAL SERVICES FUND

The Penn Capital Select Financial Services Fund invests primarily in common
stocks and other equity securities of U.S. financial services companies,
including banks, brokerage houses, insurance companies and investment advisory
companies, that Penn Capital Management believes have above average growth
potential or that are undervalued. Penn Capital also invests in financial
services companies that it believes to be potential merger or acquisition
targets.

Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs (and thus lower performance) and
additional capital gains tax liabilities.

[ICON] WHAT ARE THE RISKS OF INVESTING IN THE FUND?

Since the Fund's investments are concentrated in the financial services sector,
it is subject to the risk that the financial services sector will underperform
the broader market, as well as the risk that issuers in that sector will be
impacted by market conditions, legislative or regulatory changes, or
competition. The Fund may also be more susceptible to changes in interest rates
and other market and economic factors that affect financial services firms,
including the effect of interest rate changes on the share prices of those
financial service firms. In addition, if Penn Capital incorrectly predicts that
a company will be involved in such a transaction, the Fund may lose any premium
it paid for these stocks, and ultimately may realize a lower return than if the
company is not involved in a merger or acquisition transaction.

<PAGE>

PENN CAPITAL SELECT FINANCIAL SERVICES FUND
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION

The bar chart and the performance table below illustrates the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.

This bar chart shows changes in the performance of the Fund's Institutional
Class Shares from year to year for one year.*

- -5.81%
1998

[BAR CHART]

* The performance information shown above is based on a calendar year.

Best Quarter Worst Quarter
11.87% -19.29%
(12/31/98) (9/30/98)

This table compares the Fund's average annual total returns for the periods
ended December 31, 1998, to those of the NASDAQ Bank Index.

1 YEAR SINCE INCEPTION
(10/20/97)
Penn Capital Select
Financial Services Fund -5.81% 15.91%
NASDAQ Bank Index -10.37% -0.83%*
- --------------------------------------------------------------------------------
* The inception date for the Index is October 31, 1997.

WHAT IS AN INDEX?
An index measures the market price of a specific group of securities in a
particular market of securities in a market sector. You cannot invest directly
in an index. An index does not have an investment adviser and does not pay any
commissions or expenses. If an index had expenses, its performance would be
lower. The NASDAQ Bank Index is a capitalization-weighted index designed to
measure the performance of all NASDAQ stocks in the banking sector, which
consists of 344 stocks. The Index is unmanaged and reflects the reinvestment of
dividends.
- --------------------------------------------------------------------------------
[ICON] FUND FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES
INSTITUTIONAL CLASS SHARES

Investment Advisory Fees 1.00%
Distribution (12b-1) Fees None
Other Expenses 28.22%
-----
TOTAL ANNUAL FUND OPERATING EXPENSES 29.22%
Fee waivers and expense reimbursements 27.82%
-----
NET TOTAL OPERATING EXPENSES 1.40%*
- --------------------------------------------------------------------------------
* THE FUND'S ADVISER HAS CONTRACTUALLY AGREED TO WAIVE FEES AND TO REIMBURSE
EXPENSES IN ORDER TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING 1.40% FOR A
PERIOD OF ONE YEAR, RENEWABLE AT THE END OF EACH FISCAL YEAR. For more
information about these fees, see "Investment Adviser" and "Distribution of
Fund Shares."
- --------------------------------------------------------------------------------

EXAMPLE

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Penn Capital Select
Financial Services Fund $143 $443 $766 $1,680
</TABLE>
7
<PAGE>

PENN CAPITAL VALUE PLUS FUND
- --------------------------------------------------------------------------------
[ICON] FUND SUMMARY

<TABLE>
<S> <C>
INVESTMENT GOAL Capital appreciation and above average income
INVESTMENT FOCUS Large and small cap U.S. common stocks and high yield "junk" bonds
SHARE PRICE VOLATILITY High
PRINCIPAL INVESTMENT STRATEGY Attempts to identify undervalued small cap and large cap U.S. companies
and high yield "junk" bonds with income and capital appreciation
potential
INVESTOR PROFILE Investors seeking long-term growth of capital who can withstand the share
price volatility of equity and high yield "junk" bond investing.
</TABLE>
- --------------------------------------------------------------------------------

[ICON] INVESTMENT STRATEGY OF THE PENN CAPITAL VALUE PLUS FUND

The Penn Capital Value Plus Fund invests primarily in large and small
capitalization common stocks and other equity securities of U.S. companies. The
Fund also invests in fixed income obligations (principally "junk" bonds). In
selecting investments for the Fund, Penn Capital Management chooses stocks of
companies that have low-price earnings ratios relative to the market. The Fund
will invest in high yield "junk" bonds to generate income. The Fund will invest
in a number of industries and issuers, but may invest in a relatively high
percentage of its assets in a single industry.

Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs (and thus lower performance) and
additional capital gains tax liabilities.

[ICON] WHAT ARE THE RISKS OF INVESTING IN THE FUND?

Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Since the value of
securities with longer maturities will fluctuate more in response to interest
rate changes, this risk is greater for long-term debt securities than for
short-term debt securities. Fixed income securities, regardless of credit
quality, experience price volatility, especially in reponse to interest rate
changes. Historically, the equity markets have moved in cycles, and the value of
the Fund's equity securities may fluctuate drastically from day-to-day.
Individual companies may report poor results or be negatively affected by
industry and/or economic trends and developments. The prices of securities
issued by such companies may suffer a decline in response. These factors
contribute to price volatility, which is the principal risk of investing in the
Fund.

The smaller capitalization companies the Fund invests in may be more vulnerable
to adverse business or economic events than larger, more established companies.
In particular, these small companies may have limited product lines, markets and
financial resources, and may depend upon a relatively small management group.
Micro cap stocks also tend to be traded only in the over-the-counter market, and
may not be as liquid as larger capitalization stocks. As a result, the prices of
the micro cap stocks owned by the Fund will be very volatile, and the price
movements of the Fund's shares will reflect that volatility.

The prices of the Fund's fixed income securities respond to economic
developments, including interest rate changes, as well as to perceptions about
the creditworthiness of individual issuers. Generally, the Fund's fixed income
securities will decrease in value if interest rates rise and vice versa, and the
volatility of lower rated securities is even greater than that of higher rated
securities. Also, longer-term securities are generally more volatile, so the
average maturity or duration of these securities affects risk.

"Junk" bonds involve greater risks of default or downgrade, and are more
volatile than investment grade securities. Junk bonds involve greater risk of
default or price declines than investment grade securities due to actual or
perceived changes in an issuer's creditworthiness. In addition, issuers of junk
bonds may be more susceptible than other issuers to economic downturns. Junk
bonds are subject to the risk that the issuer may not be able to pay interest or
dividends and ultimately to repay principal upon maturity. Discontinuation of
these payments could substantially adversely affect the market value of the
security.

The Fund is subject to the risk that its principal market segment, equity
securities, may underperform compared to other market segment or to the
financial markets as a whole.

<PAGE>

PENN CAPITAL VALUE PLUS FUND
- --------------------------------------------------------------------------------
[ICON] PERFORMANCE INFORMATION

As of January 31, 1999, the Fund had not yet commenced operations, and did not
have a performance history.

- --------------------------------------------------------------------------------
[ICON] FUND FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES

INSTITUTIONAL CLASS SHARES

Investment Advisory Fees 1.00%
Distribution (12b-1) Fees None
Other Expenses* 0.40%
----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.40%
Fee waivers and expense reimbursements 0.00%
----
NET TOTAL OPERATING EXPENSES 1.40%**
- --------------------------------------------------------------------------------
* Other Expenses are estimated for the current year.
** THE FUND'S ADVISER HAS CONTRACTUALLY AGREED TO WAIVE FEES AND TO REIMBURSE
EXPENSES IN ORDER TO KEEP TOTAL OPERATING EXPENSES FROM EXCEEDING 1.40% FOR A
PERIOD OF ONE YEAR, RENEWABLE AT THE END OF EACH FISCAL YEAR. For more
information about these fees, see "Investment Adviser" and "Distribution of
Fund Shares."
- --------------------------------------------------------------------------------

EXAMPLE

1 YEAR 3 YEARS

Penn Capital Value Plus Fund $143 $443

<PAGE>

[ICON] THE FUNDS' OTHER INVESTMENTS
- --------------------------------------------------------------------------------

The investments and strategies described throughout this prospectus are those
that we use under normal conditions. During unusual economic or market
conditions or for temporary defensive or liquidity purposes, each Fund may
invest up to 100% of its assets in cash, repurchase agreements and short-term
obligations that would not ordinarily be consistent with the Funds' objectives.
A Fund will do so only if its Adviser believes that the risk of loss outweighs
the opportunity for gains.

[ICON] INVESTMENT ADVISERS
- --------------------------------------------------------------------------------

As the Funds' Adviser, Penn Capital Management Company makes investment
decisions for the Funds and continuously reviews, supervises and administers the
Funds' investment programs. The Adviser also ensures compliance with the Funds'
investment policies and guidelines.

Penn Capital Management Company, Inc., an SEC-registered adviser, serves as the
Adviser to the Penn Capital Strategic High Yield Bond Fund, Penn Capital Select
Financial Services, and Penn Capital Value Plus Funds. As of October 31, 1998,
Penn Capital had approximately $350 million in assets under management.

For the fiscal year ended September 30, 1998, the Funds paid Penn Capital
investment advisory fees (after waivers and reimbursements) of:

Penn Capital Strategic High Yield Bond ...................... (.50)%
Penn Capital Financial Services Fund ...................... (19.84)%
- ----------
*The Penn Capital Value Plus Fund was not in operation as of 9/30/98.

PORTFOLIO MANAGERS

The Penn Capital Strategic High Yield Bond Fund is managed by a team consisting
of certain principals of Penn Capital, including co-managers Richard A. Hocker
and Kathleen A. News. The Penn Capital Select Financial Services and Penn
Capital Value Plus Funds are managed by Richard Hocker and Scott D.
Schumacher.

Prior to founding Penn Capital in 1987, Mr. Hocker was a shareholder and Senior
Portfolio Manager of Delaware Investment Advisers, an investment management
firm. He has over 25 years of investment experience.

<PAGE>

Ms. News, a co-founder of the Penn Capital, serves as the Managing Director of
Penn Capital and co-portfolio manager of the Strategic High Yield Fund. Ms. News
has over 20 years of investment experience at both Penn Capital and Delaware
Investment Advisers, including over 10 years managing high yield portfolios.

Mr. Schumacher, a Senior Analyst who joined Penn Capital in 1987, has 11 years
of investment experience.

<PAGE>

[ICON] PURCHASING, SELLING AND EXCHANGING FUND SHARES
- --------------------------------------------------------------------------------

This section tells you how to buy, sell (sometimes called "redeem") or exchange
shares of the Funds.

CHOOSING ADVISER OR INSTITUTIONAL CLASS SHARES

Adviser and Institutional Class Shares have different expenses and other
characteristics.

Adviser Class Shares are for individual investors who purchase shares through
financial institutions or intermediaries. Only the Penn Capital High Yield Bond
Fund offers Adviser Class Shares.

WHEN CAN YOU PURCHASE SHARES?

You may purchase shares of any Fund (except the Penn Capital Strategic High
Yield Bond Fund) on any day that the New York Stock Exchange is open for
business (a Business Day). For the Penn Capital Strategic High Yield Bond Fun, a
Business Day is any day the U.S. Bond Markets are open.

HOW TO PURCHASE FUND SHARES

You may purchase shares directly from the Funds by:

o mail
o telephone
o wire, or
o Automated Clearing House (ACH).

<PAGE>

We may reject any purchase order if we determine that accepting the order would
not be in the best interests of the Funds or their shareholders.

FOR CUSTOMERS OF FINANCIAL INSTITUTIONS

NET ASSET VALUE

NAV for one Fund share is the value of that share's portion of all of the net
assets in the Fund.

HOW WE CALCULATE NAV

TELEPHONE TRANSACTIONS

MINIMUM PURCHASES

SYSTEMATIC INVESTMENT PLAN

SELLING FUND SHARES

HOW TO SELL YOUR FUND SHARES

<PAGE>

account with a broker or other institution, contact that broker or institution
to sell your shares. If you would like to sell $50,000 or more of your shares,
please notify us in writing and include a signature guarantee.

The sale price of each share will be the next NAV determined after we receive
your request.

SYSTEMATIC WITHDRAWAL PLAN

RECEIVING YOUR MONEY

REDEMPTIONS IN KIND

SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES

The Funds may suspend your right to sell your shares if the NYSE (or the U.S.
Bond Markets in the case of the Penn Capital Strategic High Yield Bond Fund)
restricts trading, the SEC declares an emergency or for other reasons. More
information about this is in the Funds' Statement of Additional Information
(SAI).

INVOLUNTARY SALES OF YOUR SHARES

<PAGE>

EXCHANGING FUND SHARES

HOW TO EXCHANGE YOUR SHARES

DISTRIBUTION OF FUND SHARES

SEI Investments Distribution Co. (SIDCo.) is the distributor of the shares of
the Funds.

SIDCo. receives no compensation for distributing the Funds' shares.

The Penn Capital Strategic High Yield Bond Fund has adopted a shareholder
service plan for their Adviser Class Shares that allows the Fund to pay service
fees for services provided to shareholders. For Adviser Class Shares,
shareholder service fees, as a percentage of average daily net assets, may be up
to .25%.

<PAGE>

DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------

DIVIDENDS AND DISTRIBUTIONS

The Penn Capital Strategic High Yield Bond Fund distributes its investment
income monthly as a dividend to shareholders. The Penn Capital Select Financial
Services and Penn Capital Value Plus Funds distribute their investment income at
least once annually as a dividend to shareholders. The Funds make distributions
of capital gains, if any, at least annually.

THE "RECORD DATE"
If you own Fund shares on a Fund's record date, you will be entitled to receive
the distribution.

TAXES

FUND DISTRIBUTIONS

Distributions you receive from a Fund may be taxable whether or not you reinvest
them.

MORE INFORMATION ABOUT TAXES IS IN THE SAI.

<PAGE>

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS
Study these tables to see how each Fund performed since it began investment
operations.

The tables that follow present performance information about the Shares of each
Fund. This information is intended to help you understand each Fund's financial
performance for the past five years, or, if shorter, the period of the Fund's
operations. Some of this information reflects financial information for a single
Fund share. The total returns in the tables represent the rate that you would
have earned (or lost) on an investment in a Fund, assuming you reinvested all of
your dividends and distributions. As of September 30, 1998, the Penn Capital
Value Plus Funds had not commenced operations, and there were no Adviser Class
Shares of any Fund outstanding.

FINANCIAL HIGHLIGHTS PENN CAPITAL STRATEGIC HIGH YIELD BOND FUND
- --------------------------------------------------------------------------------

FOR THE PERIOD ENDED SEPTEMBER 30: 1998(2)
----
Net Asset Value, Beginning of Period $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.37
Net Gains or Losses on Securities (both
realized and unrealized) (1.09)
Total From Investment Operations (0.72)
LESS DISTRIBUTIONS
Dividends (from net investment income) (0.37)
Distributions (from capital gains) --
Total Distributions (0.37)
Net Asset Value, End of Period $ 8.91
TOTAL RETURN(1) (7.23)%

*************************************

RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 17,842
Ratio of Expenses to Average Net Assets 0.68%*
Ratio of Net Income (Loss) to Average Net 10.04%*
Assets
Ratio of Expenses to Average Net Assets
(excluding waivers) 2.09%*

<PAGE>

Ratio of Net Investment Income (Loss) to
Average Net Assets (excluding waivers) 8.63%*
Portfolio Turnover Rate 29.19%

- -------------

1 Returns are for the period indicated and have not been annualized.

2 The Penn Capital Strategic High Yield Fund commenced operations on October 19,
1997.

* Annualized.

<PAGE>

FINANCIAL HIGHLIGHTS PENN CAPITAL SELECT FINANCIAL SERVICES FUND
- --------------------------------------------------------------------------------

FOR PERIOD ENDED SEPTEMBER 30: 1998(2)
----
Net Asset Value, Beginning of Period $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.07
Net Gains or Losses on Securities (both
realized and unrealized) 0.64
Total From Investment Operations 0.71
LESS DISTRIBUTIONS
Dividends (from net investment income) (0.01)
Distributions (from capital gains) (0.20)
Total Distributions (0.21)
Net Asset Value, End of Period $ 10.50
TOTAL RETURN(1) 6.81%

*************************************

RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 703
Ratio of Expenses to Average Net Assets 1.40%*
Ratio of Net Income (Loss) to Average Net 0.68%*
Assets
Ratio of Expenses to Average Net Assets
(excluding waivers) 29.22%*
Ratio of Net Investment Income (Loss) to
Average Net Assets (excluding waivers) (27.14)%*
Portfolio Turnover Rate 174.75%

- -------------

1 Returns are for the period indicated and have not been annualized.

2 The Penn Capital Select Financial Services Fund commenced operations on
October 20, 1997.

* Annualized.

<PAGE>

FUNDS

INVESTMENT ADVISER

Penn Capital Management Company, Inc.

DISTRIBUTORS

SEI Investments Distribution Co.

LEGAL COUNSEL

Morgan, Lewis & Bockius LLP

More information about the Funds is available without charge through the
following:

STATEMENT OF ADDITIONAL INFORMATION (SAI)
- --------------------------------------------------------------------------------

ANNUAL AND SEMI-ANNUAL REPORTS
- --------------------------------------------------------------------------------

TO OBTAIN MORE INFORMATION:

BY TELEPHONE: Call 1-800-224-6312.

BY MAIL: Write to the Funds at:
P.O. Box 419805
Kansas City, MO 64141-6805

The Funds' Investment Company Act registration number is 811-07527.

<PAGE>

TIP FUNDS

TURNER ULTRA LARGE CAP GROWTH FUND
TURNER GROWTH EQUITY FUND
TURNER MIDCAP GROWTH FUND
TURNER SMALL CAP GROWTH FUND
TURNER MICRO CAP GROWTH FUND
TIP TARGET SELECT EQUITY FUND
TURNER SHORT DURATION GOVERNMENT FUNDS-ONE YEAR PORTFOLIO
TURNER SHORT DURATION GOVERNMENT FUNDS-THREE YEAR PORTFOLIO
TURNER FIXED INCOME FUND

INVESTMENT ADVISER:
TURNER INVESTMENT PARTNERS, INC.

This Statement of Additional Information is not a prospectus and relates only to
the Turner Ultra Large Cap Growth Fund ("Ultra Large Cap Fund"), Turner Growth
Equity Fund ("Growth Equity Fund"), Turner Midcap Growth Fund ("Midcap Fund"),
Turner Small Cap Growth Fund ("Small Cap Fund"), Turner Micro Cap Growth Fund
("Micro Cap Fund"), TIP Target Select Equity Fund ("Target Select Fund"), Turner
Short Duration Government Funds-One Year Portfolio ("One Year Portfolio"),
Turner Short Duration Government Funds-Three Year Portfolio ("Three Year
Portfolio"), and Turner Fixed Income Fund ("Fixed Income Fund") (each a "Fund"
and, together, the "Funds"). It is intended to provide additional information
regarding the activities and operations of the TIP Funds (the "Trust") and
should be read in conjunction with the Funds' Prospectuses dated January 31,
1999. The Prospectuses may be obtained without charge by calling 1-800-224-6312.

TABLE OF CONTENTS

THE TRUST ..................................................................S-2
INVESTMENT OBJECTIVES.......................................................S-2
INVESTMENT POLICIES.........................................................S-3
DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS.......................S-9
INVESTMENT LIMITATIONS.....................................................S-23
THE ADVISER................................................................S-25
THE ADMINISTRATOR..........................................................S-27
DISTRIBUTION AND SHAREHOLDER SERVICES......................................S-29
TRUSTEES AND OFFICERS OF THE TRUST.........................................S-30
COMPUTATION OF YIELD AND TOTAL RETURN......................................S-33
PURCHASE AND REDEMPTION OF SHARES..........................................S-34
DETERMINATION OF NET ASSET VALUE...........................................S-34
TAXES......................................................................S-35
PORTFOLIO TRANSACTIONS.....................................................S-37
DESCRIPTION OF SHARES......................................................S-40
SHAREHOLDER LIABILITY......................................................S-41
LIMITATION OF TRUSTEES' LIABILITY..........................................S-41
5% SHAREHOLDERS............................................................S-41
CUSTODIAN..................................................................S-42
LEGAL COUNSEL..............................................................S-42
FINANCIAL STATEMENTS.......................................................S-42
APPENDIX....................................................................A-1

January 31, 1999

<PAGE>

THE TRUST

This Statement of Additional Information relates only to the Turner Ultra Large
Cap Growth Fund ("Ultra Large Cap Fund"), Turner Growth Equity Fund ("Growth
Equity Fund"), Turner Midcap Growth Fund ("Midcap Fund"), Turner Small Cap
Growth Fund ("Small Cap Fund"), Turner Micro Cap Growth Fund ("Micro Cap Fund"),
TIP Target Select Equity Fund ("Target Select Fund"), Turner Short Duration
Government Funds-One Year Portfolio ("One Year Portfolio"), Turner Short
Duration Government Funds-Three Year Portfolio ("Three Year Portfolio"), and
Turner Fixed Income Fund ("Fixed Income Fund") (each a "Fund" and, together, the
"Funds"). Each Fund is a separate series of the TIP Funds (formerly, Turner
Funds) (the "Trust"), an open-end management investment company established as a
Massachusetts business trust under a Declaration of Trust dated January 26,
1996, and amended on February 21, 1997, which consists of both diversified and
non-diversified Funds. It is anticipated that on or about January 31, 1999, the
Micro Cap Fund and the Three Year Portfolio will acquire all of the assets and
liabilities of the Alpha Select Turner Micro Cap Growth Fund and the Alpha
Select Turner Short Duration Government Funds-Three Year Portfolio,
respectively. Historical information presented for those Funds relates to the
Alpha Select Funds. The Declaration of Trust permits the Trust to offer separate
series ("portfolios") of shares of beneficial interest ("shares"). Each
portfolio is a separate mutual fund, and each share of each portfolio represents
an equal proportionate interest in that portfolio. See "Description of Shares."
The Trust also offers shares in the Clover Max Cap Value Fund, Clover Equity
Value Fund, Clover Small Cap Value Fund, Clover Fixed Income Fund, Penn Capital
Select Financial Services Fund, Penn Capital Strategic High Yield Bond Fund, and
Penn Capital Value Plus Fund. Capitalized terms not defined herein are defined
in the Prospectus offering shares of the Funds.

INVESTMENT OBJECTIVES

TURNER ULTRA LARGE CAP GROWTH FUND -- The Ultra Large Cap Fund seeks capital
appreciation.

TURNER GROWTH EQUITY FUND -- The Growth Equity Fund seeks capital appreciation.

TURNER MIDCAP GROWTH FUND -- The Midcap Fund seeks capital appreciation.

TURNER SMALL CAP GROWTH FUND -- The Small Cap Fund seeks capital appreciation.

TURNER MICRO CAP GROWTH FUND -- The Micro Cap Fund seeks capital appreciation.

TIP TARGET SELECT EQUITY FUND -- The Target Select Fund seeks long term growth
of capital primarily from investment in U.S. equity securities.

TURNER SHORT DURATION GOVERNMENT FUNDS-ONE YEAR PORTFOLIO & TURNER SHORT
DURATION GOVERNMENT FUNDS-THREE YEAR PORTFOLIO -- The investment objective of
each Fund is to provide maximum total return consistent with preservation of
capital and prudent investment management. Under normal circumstances, the Short
Duration One Year Portfolio seeks to maintain an average

S-2

<PAGE>

effective duration comparable to or less than that of one-year U.S. Treasury
bills. The Short Duration Three Year Portfolio seeks to maintain an average
effective duration comparable to or less than that of three-year U.S. Treasury
notes. Effective duration is an indicator of a security's price volatility or
risk associated with changes in interest rates. Because the Adviser seeks to
manage interest rate risk by limiting effective duration, each Fund may invest
in securities of any maturity.

TURNER FIXED INCOME FUND -- The Fixed Income Fund seeks total return through
current income and capital appreciation.

There can be no assurance that any Fund will achieve its investment objective.

INVESTMENT POLICIES

TURNER ULTRA LARGE CAP GROWTH FUND -- The Ultra Large Cap Fund invests primarily
(and, under normal conditions, at least 65% of its total assets) in a
diversified portfolio of common stocks of issuers that, at the time of purchase,
have market capitalizations in excess of $10 billion that Turner Investment
Partners, Inc. (the "Adviser"), believes to have strong earnings growth
potential. The Fund seeks to purchase securities that are well diversified
across economic sectors and to maintain sector concentrations that approximate
the economic sector weightings comprising the Russell 200 Growth Index (or such
other appropriate index selected by the Adviser). Any remaining assets may be
invested in securities issued by smaller capitalization companies, warrants and
rights to purchase common stocks, and they may invest up to 10% of its total
assets in American Depository Receipts ("ADRs"). The Fund only will purchase
securities that are traded on registered exchanges or the over-the-counter
market in the United States. The Fund may purchase shares of other investment
companies and foreign securities.

TURNER GROWTH EQUITY FUND -- The Growth Equity Fund invests as fully as
practicable (and, under normal conditions, at least 65% of its total assets) in
a portfolio of common stocks that the Adviser believes to have potential for
strong growth in earnings and to be reasonably valued at the time of purchase.
The Fund seeks to purchase securities that are well diversified across economic
sectors and to maintain sector concentrations that approximate the economic
sector weightings of the Russell 1000 Growth Index (or such other appropriate
index selected by the Adviser). The Fund may invest in warrants and rights to
purchase common stocks, and may invest up to 10% of its total assets in ADRs.
The Fund only will purchase securities that are traded on registered exchanges
or the over-the-counter market in the United States.

TURNER MIDCAP GROWTH FUND -- The Midcap Fund invests primarily (and, under
normal conditions, at least 65% of its total assets) in a diversified portfolio
of common stocks of issuers that, at the time of purchase, have market
capitalizations between $1 billion and $8 billion that the Adviser believes to
have strong earnings growth potential. The Fund seeks to purchase securities
that are well diversified across economic sectors and to maintain sector
concentrations that approximate the economic sector weightings comprising the
Russell Midcap Growth Index (or such other appropriate index selected by the
Adviser). Any remaining assets may be invested in securities issued by smaller

S-3

<PAGE>

capitalization companies and larger capitalization companies, warrants and
rights to purchase common stocks, and it may invest up to 10% of its total
assets in ADRs. The Fund only will purchase securities that are traded on
registered exchanges or the over-the-counter market in the United States. The
Fund may purchase shares of other investment companies.

TURNER SMALL CAP GROWTH FUND -- The Small Cap Fund invests primarily (and, under
normal conditions, at least 65% of its total assets) in a diversified portfolio
of common stocks of issuers with market capitalizations of not more than $2
billion that the Adviser believes to have strong earnings growth potential.
Under normal market conditions, the Fund will maintain a weighted average market
capitalization of less than $2 billion. The Fund seeks to purchase securities
that are well diversified across economic sectors and to maintain sector
concentrations that approximate the economic sector weightings comprising the
Russell 2000 Growth Index (or such other appropriate index selected by the
Adviser). The Fund may invest in warrants and rights to purchase common stocks,
and may invest up to 10% of its total assets in ADRs. The Fund only will
purchase securities that are traded on registered exchanges or the
over-the-counter market in the United States.

TURNER MICRO CAP GROWTH FUND -- The Micro Cap Fund invests primarily (and, under
normal conditions, at least 65% of its total assets) in a diversified portfolio
of common stocks of issuers with market capitalizations of not more than $500
million at the time of purchase that the Adviser believes to have strong
earnings growth potential. Under normal market conditions, the Fund will
maintain a weighted average market capitalization of less than $350 million. The
Fund will not hold securities with market capitalizations over $1 billion. The
Fund seeks to purchase securities that are well diversified across economic
sectors, and will attempt to maintain sector concentrations that approximate the
economic sector weightings of the smallest 1/3 of its current benchmark, the
Russell 2000 Growth Index. The Micro Cap Fund will typically invest in companies
whose market capitalizations, at the time of purchase, are $350 million or
under. The Fund may invest in warrants and rights to purchase common stocks, and
may invest up to 10% of its total assets in micro cap stocks of foreign issuers
and in ADRs.

The Micro Cap Fund invests in some of the smallest, most dynamic publicly-traded
companies. These emerging growth companies are typically in the early stages of
a long-term development cycle. In many cases, these companies offer unique
products, services or technologies and often serve special or expanding market
niches. Because of their small size, and less frequent trading activity, the
companies represented in the Fund's portfolio may be overlooked or not closely
followed by investors. Accordingly, their prices may rise either as a result of
improved business fundamentals, particularly when earnings grow faster than
general expectations, or as more investors appreciate the full extent of a
company's underlying business potential. Thus in the opinion of the Fund's
Adviser, they offer substantial appreciation potential for meeting retirement
and other long-term goals.

The Fund's share price can move up and down significantly, even over short
periods of time, due to the volatile nature of micro capitalization stocks. To
manage risk and improve liquidity, Turner expects to invest in numerous small,
publicly traded companies, representing a broad cross-section of U.S.
industries.

S-4

<PAGE>

TIP TARGET SELECT EQUITY FUND -- The Adviser and Sub-Advisers of the Fund will
each invest in a maximum of 20 equity securities (hence the Target Select Equity
Fund designation) and as few as 10 that they believe have the greatest return
potential. Such a focused security-selection process permits each manager to act
on only the investment ideas that they think are their strongest ones. The
intent is to avoid diluting performance by owning too many securities, so that
the positive contributions of winning investments will prove substantial.

The Fund is designed to provide an investment that combines the investment
expertise and best investment ideas of four outstanding money-management firms.
The Adviser and Sub-Advisers will manage a portion of the Fund's portfolio on a
day-to-day basis. Assets for investment will be allocated to each manager by the
Fund' Board of Trustees, based on the recommendation of the Adviser. The
expectation is that the allocations will result in a portfolio invested in a
variety of equity securities with differing capitalizations and valuations,
chosen by differing investment strategies.

The Fund intends to invest primarily (and, under normal circumstances, at least
65% of its total assets) in equity securities of companies that are
headquartered in the United States or do business both in the United States and
abroad. Those securities, however, will be traded principally in the United
States equity market. Selection of equity securities will not be restricted by
market capitalization, and the Fund's Adviser and Sub-Advisers will employ their
own proprietary investment processes in managing assets.

Any remaining assets of the Fund may be invested in securities of foreign
issuers, shares of other investment companies, ADRs and REITs. The Fund may also
invest up to 15% of its net assets in illiquid securities, invest up to 25% of
its total assets in convertible securities, including convertible securities
rated below investment grade, purchase unregistered securities that are eligible
for re-sale pursuant to Rule 144A under the Securities Act, and purchase fixed
income securities, including securities rated below investment grade. In
addition, the Fund may effect short sales, purchase securities on a when-issued
basis, and may enter into futures and options transactions. Debt securities
rated below investment grade, i.e., rated lower than BBB by Standard & Poor's
Corporation ("S&P") and/or Baa by Moody's Investor Services, Inc. ("Moody's") or
unrated securities of comparable quality, are also known as "junk bonds." The
maximum percentage of the Fund's assets that may be invested in securities rated
below investment grade is 25%.

Under normal circumstances, the Adviser and each of the Sub-Advisers may invest
a portion of the assets under its management in the Money Market Instruments
described below in order to maintain liquidity, or if securities meeting the
Fund's investment objective and policies are not otherwise reasonably available
for purchase, provided that such Instruments do not exceed 25% of the Fund's
total assets. For temporary defensive purposes during periods when the Adviser
determines that market conditions warrant, the Adviser and each Sub-Adviser may
invest up to 100% of the assets under their management in Money Market
Instruments and in cash.

S-5

<PAGE>

TURNER SHORT DURATION GOVERNMENT FUNDS - ONE YEAR PORTFOLIO & TURNER SHORT
DURATION GOVERNMENT FUNDS - THREE YEAR PORTFOLIO -- Under normal market
conditions, each Fund invests at least 65% of the value of its total assets in
obligations either issued or guaranteed by the U.S. Government, its agencies or
instrumentalities ("U.S. Government securities"). Certain of the obligations,
including U.S. Treasury bills, notes and bonds and mortgage-related securities
of the Government National Mortgage Association ("GNMA"), are issued or
guaranteed by the U.S. Government. Other securities issued by U.S. Government
agencies or instrumentalities are supported only by the credit of the agency or
instrumentality, such as those issued by the Federal Home Loan Bank, while
others, such as those issued by Fannie Mae and the Student Loan Marketing
Association, have an additional line of credit with the U.S. Treasury.

The balance of each Fund's assets may be invested in cash and high grade debt
securities, shares of other investment companies, including privately issued
mortgage-related securities and general obligation bonds and notes of various
states and their political subdivisions, rated within the three highest grades
assigned by S&P (AAA, AA or A), Moody's (Aaa, Aa or A), or Fitch Investor
Services, Inc. ("Fitch") (AAA, AA or A), or, if unrated by S&P, Moody's and/or
Fitch, judged by the Adviser to be of comparable quality. A further description
of S&P's, Moody's and Fitch's ratings is included in the Appendix to the
Statement of Additional Information.

The relative proportions of the Funds' net assets invested in the different
types of permissible investments will vary from time to time depending upon the
Adviser's assessment of the relative market value of the sectors in which the
Funds invest. In addition, the Funds may purchase securities that are trading at
a discount from par when the Adviser believes there is a potential for capital
appreciation.

The Short Duration Funds may enter into forward commitments or purchase
securities on a when issued basis, and may invest in variable or floating rate
obligations.

TURNER FIXED INCOME FUND -- The Fixed Income Fund invests as fully as
practicable (and, under normal conditions, at least 65% of its total assets) in
a portfolio of fixed income securities of varying levels of quality and
maturity, that, in the Adviser's opinion, are undervalued in the market. To
determine a security's fair market value, the Adviser will focus on the yield
and credit quality of particular securities based upon third-party evaluations
of quality as well as the Adviser's own research and analysis of the issuer. The
Adviser will attempt to diversify the Fund's holdings across the yield curve by
holding short, intermediate and long-term securities. Normally, the Fund will
maintain a dollar-weighted average portfolio duration that approximates the
average duration range of the Fund's benchmark index, the Lehman Brothers
Aggregate Bond Index (currently 4.5 years). Duration is a measure of the
expected life of a fixed income security on a cash flow basis.

For example, assuming a portfolio duration of eight years, an increase in
interest rates of 1%, a parallel shift in the yield curve, and no change in the
spread relationships among securities, the value of the portfolio would decline
8%. Using the same assumptions, if interest rates decrease 1%, the value of the
portfolio would increase 8%. The Adviser considers duration an accurate measure

S-6

<PAGE>

of a security's expected life and sensitivity to interest rate changes. The
Adviser may increase or decrease this average weighted duration when, in the
Adviser's opinion, market conditions warrant.

The Fund will purchase the following types of securities if, at the time of
purchase, such securities either have been classified as investment grade by a
nationally recognized statistical rating organization ("NRSRO") or are
determined by the Adviser to be of comparable quality: (i) obligations issued or
guaranteed as to principal and interest by the U.S. Government or its agencies
or instrumentalities ("U.S. Government securities"); (ii) corporate bonds and
debentures of U.S. and foreign issuers rated in one of the four highest rating
categories; (iii) privately issued mortgage-backed securities rated in the
highest rating category; (iv) asset-backed securities rated in the two highest
rating categories; (v) receipts evidencing separately traded interest and
principal component parts of U.S. Government obligations ("Receipts"); (vi)
commercial paper rated in one of the two highest rating categories; (vii)
obligations of U.S. commercial banks and savings and loan institutions that have
net assets of at least $500 million as of the end of their most recent fiscal
year ("bank obligations"); (viii) obligations issued or guaranteed by the
government of Canada; (ix) obligations of supranational entities rated in one of
the four highest rating categories; (x) loan participations; (xi) repurchase
agreements involving any of the foregoing securities; and (xii) shares of other
investment companies. Investment grade bonds include securities rated BBB by S&P
or Baa by Moody's, which may be regarded as having speculative characteristics
as to repayment of principal. If a security is downgraded to below investment
grade, the Adviser will review the situation and take appropriate action.
Securities rated below investment grade will not constitute more than 5% of the
Fund's total assets.

GENERAL INVESTMENT POLICIES

Each Fund may purchase securities on a when-issued basis and borrow money.

Each Fund may enter into futures and options transactions.

Each Fund may invest up to 15% (10% for the Short Duration Funds) of its net
assets in illiquid securities.

Each Fund, except the Ultra Large Cap, Midcap and Short Duration Funds, may
purchase convertible securities.

Each Fund may enter into repurchase agreements.

Each Fund may purchase fixed income securities, including variable and floating
rate instruments.

Each Fund may purchase Rule 144A securities.

Each Fund may, for temporary defensive purposes, invest up to 100% of its total
assets in money market instruments (including U.S. Government securities, bank
obligations, commercial paper rated

S-7

<PAGE>

in the highest rating category by an NRSRO, repurchase agreements involving the
foregoing securities), shares of money market investment companies and cash.

DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS

AMERICAN DEPOSITARY RECEIPTS ("ADRS")

ADRs are securities, typically issued by a U.S. financial institution (a
"depositary"), that evidence ownership interests in a security or a pool of
securities issued by a foreign issuer and deposited with the depositary. ADRs
may be available through "sponsored" or "unsponsored" facilities. A sponsored
facility is established jointly by the issuer of the security underlying the
receipt and a depositary, whereas an unsponsored facility may be established by
a depositary without participation by the issuer of the underlying security.
Holders of unsponsored depositary receipts generally bear all the costs of the
unsponsored facility. The depositary of an unsponsored facility frequently is
under no obligation to distribute shareholder communications received from the
issuer of the deposited security or to pass through, to the holders of the
receipts, voting rights with respect to the deposited securities.

ASSET-BACKED SECURITIES

Asset-backed securities are secured by non-mortgage assets such as company
receivables, truck and auto loans, leases and credit card receivables. Such
securities are generally issued as pass-through certificates, which represent
undivided fractional ownership interests in the underlying pools of assets. Such
securities also may be debt instruments, which are also known as collateralized
obligations and are generally issued as the debt of a special purpose entity,
such as a trust, organized solely for the purpose of owning such assets and
issuing such debt.

BORROWING

The Funds may borrow money equal to 5% of their total assets for temporary
purposes to meet redemptions or to pay dividends. Borrowing may exaggerate
changes in the net asset value of a Fund's shares and in the return on the
Fund's portfolio. Although the principal of any borrowing will be fixed, a
Fund's assets may change in value during the time the borrowing is outstanding.
The Funds may be required to liquidate portfolio securities at a time when it
would be disadvantageous to do so in order to make payments with respect to any
borrowing. The Funds may be required to segregate liquid assets in an amount
sufficient to meet their obligations in connection with such borrowings. In an
interest rate arbitrage transaction, a Fund borrows money at one interest rate
and lends the proceeds at another, higher interest rate. These transactions
involve a number of risks, including the risk that the borrower will fail or
otherwise become insolvent or that there will be a significant change in
prevailing interest rates.

S-8

<PAGE>

CONVERTIBLE SECURITIES

Convertible securities are corporate securities that are exchangeable for a set
number of another security at a prestated price. Convertible securities
typically have characteristics of both fixed income and equity securities.
Because of the conversion feature, the market value of a convertible security
tends to move with the market value of the underlying stock. The value of a
convertible security is also affected by prevailing interest rates, the credit
quality of the issuer and any call provisions.

DERIVATIVES

Derivatives are securities that derive their value from other securities,
financial instruments or indices. The following are considered derivative
securities: options on futures, futures, options (e.g., puts and calls), swap
agreements, mortgage-backed securities (e.g., CMOs, REMICs, IOs and POs), when
issued securities and forward commitments, floating and variable rate
securities, convertible securities, "stripped" U.S. Treasury securities (e.g.,
Receipts and STRIPs), privately issued stripped securities (e.g., TGRs, TRs, and
CATs). See elsewhere in the "Description of Permitted Investments" for
discussions of these various instruments.

EQUITY SECURITIES

Equity securities include common stocks, preferred stocks, warrants, rights to
acquire common or preferred stocks, and securities convertible into or
exchangeable for common stocks. Investments in equity securities in general are
subject to market risks that may cause their prices to fluctuate over time. The
value of securities convertible into equity securities, such as warrants or
convertible debt, is also affected by prevailing interest rates, the credit
quality of the issuer and any call provision. Fluctuations in the value of
equity securities in which an equity Fund invests will cause the net asset value
of the Fund to fluctuate. An investment in an equity Fund may be more suitable
for long-term investors who can bear the risk of short-term principal
fluctuations.

FIXED INCOME SECURITIES

The market value of fixed income investments will change in response to interest
rate changes and other factors. During periods of falling interest rates, the
values of outstanding fixed income securities generally rise. Conversely, during
periods of rising interest rates, the values of such securities generally
decline. Moreover, while securities with longer maturities tend to produce
higher yields, the prices of longer maturity securities are also subject to
greater market fluctuations as a result of changes in interest rates. Changes by
recognized agencies in the rating of any fixed income security and in the
ability of an issuer to make payments of interest and principal also affect the
value of these investments. Changes in the value of these securities will not
necessarily affect cash income derived from these securities, but will affect
the investing Fund's net asset value.

Investment grade bonds include securities rated BBB by S&P or Baa by Moody's,
which may be regarded as having speculative characteristics as to repayment of
principal. If a security is downgraded, the Adviser will review the situation
and take appropriate action.

S-9

<PAGE>

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS

Futures contracts provide for the future sale by one party and purchase by
another party of a specified amount of a specific security at a specified future
time and at a specified price. An option on a futures contract gives the
purchaser the right, in exchange for a premium, to assume a position in a
futures contract at a specified exercise price during the term of the option. A
Fund may use futures contracts and related options for bona fide hedging
purposes, to offset changes in the value of securities held or expected to be
acquired or be disposed of, to minimize fluctuations in foreign currencies, or
to gain exposure to a particular market or instrument. A Fund will minimize the
risk that it will be unable to close out a futures contract by only entering
into futures contracts which are traded on national futures exchanges. In
addition, a Fund will only sell covered futures contracts and options on futures
contracts.

Stock and bond index futures are futures contracts for various stock and bond
indices that are traded on registered securities exchanges. Stock and bond index
futures contracts obligate the seller to deliver (and the purchaser to take) an
amount of cash equal to a specific dollar amount times the difference between
the value of a specific stock or bond index at the close of the last trading day
of the contract and the price at which the agreement is made.

Stock and bond index futures contracts are bilateral agreements pursuant to
which two parties agree to take or make delivery of an amount of cash equal to a
specified dollar amount times the difference between the stock or bond index
value at the close of trading of the contract and the price at which the futures
contract is originally struck. No physical delivery of the stocks or bonds
comprising the Index is made; generally contracts are closed out prior to the
expiration date of the contracts.

No price is paid upon entering into futures contracts. Instead, a Fund would be
required to deposit an amount of cash or U.S. Treasury securities known as
"initial margin." Subsequent payments, called "variation margin," to and from
the broker, would be made on a daily basis as the value of the futures position
varies (a process known as "marking to market"). The margin is in the nature of
a performance bond or good-faith deposit on a futures contract.

There are risks associated with these activities, including the following: (1)
the success of a hedging strategy may depend on an ability to predict movements
in the prices of individual securities, fluctuations in markets and movements in
interest rates; (2) there may be an imperfect or no correlation between the
changes in market value of the securities held by the Fund and the prices of
futures and options on futures; (3) there may not be a liquid secondary market
for a futures contract or option; (4) trading restrictions or limitations may be
imposed by an exchange; and (5) government regulations may restrict trading in
futures contracts and futures options.

S-10

<PAGE>

exceed 5% of a Fund's net assets. A Fund may buy and sell futures contracts and
related options to manage its exposure to changing interest rates and securities
prices. Some strategies reduce a Fund's exposure to price fluctuations, while
others tend to increase its market exposure. Futures and options on futures can
be volatile instruments and involve certain risks that could negatively impact a
Fund's return.

In order to avoid leveraging and related risks, when a Fund purchases futures
contracts, it will collateralize its position by depositing an amount of cash or
liquid securities, equal to the market value of the futures positions held, less
margin deposits, in a segregated account with its custodian. Collateral equal to
the current market value of the futures position will be marked to market on a
daily basis.

ILLIQUID SECURITIES

Illiquid securities are securities that cannot be disposed of within seven
business days at approximately the price at which they are being carried on the
Fund's books. Illiquid securities include demand instruments with demand notice
periods exceeding seven days, securities for which there is no active secondary
market, and repurchase agreements with durations or maturities over seven days
in length.

INVESTMENT COMPANY SHARES

Each Fund may invest in shares of other investment companies, to the extent
permitted by applicable law and subject to certain restrictions. These
investment companies typically incur fees that are separate from those fees
incurred directly by the Fund. A Fund's purchase of such investment company
securities results in the layering of expenses, such that shareholders would
indirectly bear a proportionate share of the operating expenses of such
investment companies, including advisory fees, in addition to paying Fund
expenses. Under applicable regulations, a Fund is prohibited from acquiring the
securities of another investment company if, as a result of such acquisition:
(1) the Fund owns more than 3% of the total voting stock of the other company;
(2) securities issued by any one investment company represent more than 5% of
the Fund's total assets; or (3) securities (other than treasury stock) issued by
all investment companies represent more than 10% of the total assets of the
Fund. See also "Investment Limitations."

LEVERAGING

Leveraging a Fund creates an opportunity for increased net income, but, at the
same time, creates special risk considerations. For example, leveraging may
exaggerate changes in the net asset value of a Fund's shares and in the yield on
the Fund's portfolio. Although the principal of such borrowings will be fixed, a
Fund's assets may change in value during the time the borrowing is outstanding.
Leveraging creates interest expenses for a Fund which could exceed the income
from the assets retained. To the extent the income derived from securities
purchased with borrowed funds exceeds the interest that a Fund will have to pay,
the Fund's net income will be greater than if

S-11

<PAGE>

leveraging were not used. Conversely, if the income from the assets retained
with borrowed funds is not sufficient to cover the cost of leveraging, the net
income of the Fund will be less than if leveraging were not used, and therefore
the amount available for distribution to stockholders as dividends will be
reduced. Because the SEC staff believes both reverse repurchase agreements and
dollar roll transactions are collateralized borrowings, the SEC staff believes
that they create leverage, which is a speculative factor. The requirement that
such transactions be fully collateralized by assets segregated by the Fund's
Custodian does impose a practical limit on the leverage created by such
transactions. The Adviser will not use leverage if as a result the effective
duration of the portfolios of the Short Duration One Year Portfolio and the
Short Duration Three Year Portfolio would not be comparable or less than that of
a one-year U.S. Treasury note and a three-year U.S. Treasury note, respectively.

LOWER-RATED SECURITIES

Lower-rated securities are lower-rated bonds commonly referred to as "junk
bonds" or high-yield securities. These securities are rated lower than "Baa3" by
Moody's and/or lower than BBB- by S&P. The Funds may invest in securities rated
in the lowest ratings categories established by Moody's or by S&P. These ratings
indicate that the obligations are speculative and may be in default. In
addition, the Funds may invest in unrated securities of comparable quality
subject to the restrictions stated in the Funds' Prospectus.

CERTAIN RISK FACTORS RELATING TO HIGH-YIELD, HIGH-RISK SECURITIES

The descriptions below are intended to supplement the discussion in the
Prospectus.

GROWTH OF HIGH-YIELD, HIGH-RISK BOND MARKET

The widespread expansion of government, consumer and corporate debt within the
U.S. economy has made the corporate sector more vulnerable to economic downturns
or increased interest rates. Further, an economic downturn could severely
disrupt the market for lower rated bonds and adversely affect the value of
outstanding bonds and the ability of the issuers to repay principal and
interest. The market for lower-rated securities may be less active, causing
market price volatility and limited liquidity in the secondary market. This may
limit the Funds' ability to sell such securities at their market value. In
addition, the market for these securities may be adversely affected by
legislative and regulatory developments. Credit quality in the junk bond market
can change suddenly and unexpectedly, and even recently issued credit ratings
may not fully reflect the actual risks imposed by a particular security.

SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES

S-12

<PAGE>

their principal and interest payment obligations, to meet projected business
goals, and to obtain additional financing. If the issuer of a bond defaulted on
its obligations to pay interest or principal or entered into bankruptcy
proceedings, the Funds may incur losses or expenses in seeking recovery of
amounts owed to it. In addition, periods of economic uncertainty and change can
be expected to result in increased volatility of market prices of high-yield
bonds and the Funds' net asset values.

PAYMENT EXPECTATIONS

High-yield, high-risk bonds may contain redemption or call provisions. If an
issuer exercised these provisions in a declining interest rate market, the Funds
would have to replace the securities with a lower yielding security, resulting
in a decreased return for investors. Conversely, a high-yield, high-risk bond's
value will decrease in a rising interest rate market, as will the value of the
Funds' assets. If the Funds experience significant unexpected net redemptions,
this may force them to sell high-yield, high-risk bonds without regard to their
investment merits, thereby decreasing the asset base upon which expenses can be
spread and possibly reducing the Funds' rates of return.

LIQUIDITY AND VALUATION

There may be little trading in the secondary market for particular bonds, which
may affect adversely the Funds' ability to value accurately or dispose of such
bonds. Adverse publicity and investor perception, whether or not based on
fundamental analysis, may decrease the values and liquidity of high-yield,
high-risk bonds, especially in a thin market.

TAXES

The Funds may purchase debt securities (such as zero-coupon, pay-in-kind or
other types of securities) that contain original issue discounts. Original issue
discount that accrues in a taxable year is treated as earned by each Fund and
therefore is subject to the distribution requirements of the tax code even
though the such Fund has not received any interest payments on such obligations
during that period. Because the original issue discount earned by the Funds in a
taxable year may not be represented by cash income, the Funds may have to
dispose of other securities and use the proceeds to make distributions to
shareholders.

MONEY MARKET INSTRUMENTS

Money market securities are high-quality, dollar-denominated, short-term debt
instruments. They consist of: (i) bankers' acceptances, certificates of
deposits, notes and time deposits of highly-rated U.S. banks and U.S. branches
of foreign banks; (ii) U.S. Treasury obligations and obligations issued or
guaranteed by the agencies and instrumentalities of the U.S. Government; (iii)
high-quality commercial paper issued by U.S. and foreign corporations; (iv) debt
obligations with a maturity of one year or less issued by corporations with
outstanding high-quality commercial paper ratings; and

S-13

<PAGE>

(v) repurchase agreements involving any of the foregoing obligations entered
into with highly-rated banks and broker-dealers.

MORTGAGE-BACKED SECURITIES

Mortgage-backed securities are instruments that entitle the holder to a share of
all interest and principal payments from mortgages underlying the security. The
mortgages backing these securities include conventional fifteen- and thirty-year
fixed rate mortgages, graduated payment mortgages, adjustable rate mortgages,
and balloon mortgages. During periods of declining interest rates, prepayment of
mortgages underlying mortgage-backed securities can be expected to accelerate.
Prepayment of mortgages which underlie securities purchased at a premium often
results in capital losses, while prepayment of mortgages purchased at a discount
often results in capital gains. Because of these unpredictable prepayment
characteristics, it is often not possible to predict accurately the average life
or realized yield of a particular issue.

PRIVATE PASS-THROUGH SECURITIES: These are mortgage-backed securities issued by
a non-governmental entity, such as a trust. While they are generally structured
with one or more types of credit enhancement, private pass-through securities
typically lack a guarantee by an entity having the credit status of a
governmental agency or instrumentality.

CMOs: CMOs are debt obligations of multiclass pass-through certificates issued
by agencies or instrumentalities of the U.S. Government or by private
originators or investors in mortgage loans. In a CMO, series of bonds or
certificates are usually issued in multiple classes. Principal and interest paid
on the underlying mortgage assets may be allocated among the several classes of
a series of a CMO in a variety of ways. Each class of a CMO is issued with a
specific fixed or floating coupon rate and has a stated maturity or final
distribution date.

REMICs: A REMIC is a CMO that qualifies for special tax treatment under the Code
and invests in certain mortgages principally secured by interests in real
property. Guaranteed REMIC pass-through certificates ("REMIC Certificates")
issued by Fannie Mae or FHLMC represent beneficial ownership interests in a
REMIC trust consisting principally or mortgage loans or Fannie Mae, FHLMC or
GNMA-guaranteed mortgage pass-through certificates.

S-14

<PAGE>

STRIPPED MORTGAGE-BACKED SECURITIES("SMBs"): SMBs are usually structured with
two classes that receive specified proportions of the monthly interest and
principal payments from a pool of mortgage securities. One class may receive all
of the interest payments, while the other class may receive all of the principal
payments. SMBs are extremely sensitive to changes in interest rates because of
the impact thereon of prepayment of principal on the underlying mortgage
securities. The market for SMBs is not as fully developed as other markets; SMBs
therefore may be illiquid.

NON-DIVERSIFICATION

The Target Select Fund is a non-diversified company, as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), which means that a
relatively high percentage of assets of the Fund may be invested in the
obligations of a limited number of issuers. Although the Adviser and the
Sub-Advisers generally do not intend to invest more than 5% of the Fund's assets
in any single issuer (with the exception of securities which are issued or
guaranteed by a national government), the value of the shares of the Fund may be
more susceptible to a single economic, political or regulatory occurrence than
the shares of a diversified investment company would be. The Fund intends to
satisfy the diversification requirements necessary to qualify as a regulated
investment company under the Internal Revenue Code of 1986, as amended (the
"Code"), which requires that the Fund be diversified (i.e., not invest more than
5% of its assets in the securities in any one issuer) as to 50% of its assets.

OBLIGATIONS OF SUPRANATIONAL ENTITIES

Obligations of supranational entities are obligations of entities established
through the joint participation of several governments, such as the Asian
Development Bank, the Inter-American Development Bank, International Bank of
Reconstruction and Development (World Bank), African Development Bank, European
Economic Community, European Investment Bank and the Nordic Investment Bank.

OPTIONS

A put option gives the purchaser of the option the right to sell, and the writer
of the option the obligation to buy, the underlying security at any time during
the option period. A call option gives the purchaser of the option the right to
buy, and the writer of the option the obligation to sell, the underlying
security at any time during the option period. The premium paid to the writer is
the consideration for undertaking the obligations under the option contract. The
initial purchase (sale) of an option contract is an "opening transaction." In
order to close out an option position, a Fund may enter into a "closing
transaction," which is simply the sale (purchase) of an option contract on the
same security with the same exercise price and expiration date as the option
contract originally opened. If a Fund is unable to effect a closing purchase
transaction with respect to an option it has written, it will not be able to
sell the underlying security until the option expires or the Fund delivers the
security upon exercise.

S-15

<PAGE>

A Fund may purchase put and call options to protect against a decline in the
market value of the securities in its portfolio or to anticipate an increase in
the market value of securities that the Fund may seek to purchase in the future.
A Fund purchasing put and call options pays a premium therefor. If price
movements in the underlying securities are such that exercise of the options
would not be profitable for a Fund, loss of the premium paid may be offset by an
increase in the value of the Fund's securities or by a decrease in the cost of
acquisition of securities by the Fund.

A Fund may write covered call options as a means of increasing the yield on its
portfolio and as a means of providing limited protection against decreases in
its market value. When a Fund sells an option, if the underlying securities do
not increase or decrease to a price level that would make the exercise of the
option profitable to the holder thereof, the option generally will expire
without being exercised and the Fund will realized as profit the premium
received for such option. When a call option written by a Fund is exercised, the
Fund will be required to sell the underlying securities to the option holder at
the strike price, and will not participate in any increase in the price of such
securities above the strike price. When a put option written by a Fund is
exercised, the Fund will be required to purchase the underlying securities at
the strike price, which may be in excess of the market value of such securities.

A Fund may purchase and write options on an exchange or over-the-counter.
Over-the-counter options ("OTC options") differ from exchange-traded options in
several respects. They are transacted directly with dealers and not with a
clearing corporation, and therefore entail the risk of non-performance by the
dealer. OTC options are available for a greater variety of securities and for a
wider range of expiration dates and exercise prices than are available for
exchange-traded options. Because OTC options are not traded on an exchange,
pricing is done normally by reference to information from a market maker. It is
the position of the SEC that OTC options are generally illiquid.

A Fund may purchase and write put and call options on foreign currencies (traded
on U.S. and foreign exchanges or over-the-counter markets) to manage its
exposure to exchange rates. Call options on foreign currency written by a Fund
will be "covered," which means that the Fund will own an equal amount of the
underlying foreign currency. With respect to put options on foreign currency
written by a Fund, the Fund will establish a segregated account with its
Custodian consisting of cash or liquid, high grade debt securities in an amount
equal to the amount the Fund would be required to pay upon exercise of the put.

A Fund may purchase and write put and call options on indices and enter into
related closing transactions. Put and call options on indices are similar to
options on securities except that options on an index give the holder the right
to receive, upon exercise of the option, an amount of cash if the closing level
of the underlying index is greater than (or less than, in the case of puts) the
exercise price of the option. This amount of cash is equal to the difference
between the closing price of the index and the exercise price of the option,
expressed in dollars multiplied by a specified number. Thus, unlike options on
individual securities, all settlements are in cash, and gain or loss depends on
price movements in the particular market represented by the index generally,
rather than the price

S-16

<PAGE>

movements in individual securities. A Fund may choose to terminate an option
position by entering into a closing transaction. The ability of a Fund to enter
into closing transactions depends upon the existence of a liquid secondary
market for such transactions.

All options written on indices must be covered. When a Fund writes an option on
an index, it will establish a segregated account containing cash or liquid
securities with its custodian in an amount at least equal to the market value of
the option and will maintain the account while the option is open or will
otherwise cover the transaction.

Each Short Duration Fund will not engage in transactions involving interest rate
futures contracts for speculation but only as a hedge against changes in the
market values of debt securities held or intended to be purchased by the Fund
and where the transactions are appropriate to reduce the Fund's interest rate
risks. There can be no assurance that hedging transactions will be successful. A
Fund also could be exposed to risks if it could not close out its futures or
options positions because of any illiquid secondary market.

Futures and options have effective durations which, in general, are closely
related to the effective duration of the securities which underlie them. Holding
purchased futures or call option positions (backed by segregated cash or other
liquid securities) will lengthen the duration of a Short Duration Fund's
portfolio.

RISK FACTORS: Risks associated with options transactions include: (1) the
success of a hedging strategy may depend on an ability to predict movements in
the prices of individual securities, fluctuations in markets and movements in
interest rates; (2) there may be an imperfect correlation between the movement
in prices of options and the securities underlying them; (3) there may not be a
liquid secondary market for options; and (4) while a Fund will receive a premium
when it writes covered call options, it may not participate fully in a rise in
the market value of the underlying security.

PORTFOLIO TURNOVER

An annual portfolio turnover rate in excess of 100% may result from the
Adviser's investment strategy. Portfolio turnover rates in excess of 100% may
result in higher transaction costs, including increased brokerage commissions,
and higher levels of taxable capital gain.

RECEIPTS

Receipts are sold as zero coupon securities, which means that they are sold at a
substantial discount and redeemed at face value at their maturity date without
interim cash payments of interest or principal. This discount is accreted over
the life of the security, and such accretion will constitute the income earned
on a security for both accounting and tax purposes. Because of these features,
such securities may be subject to greater interest rate volatility than interest
paying investments.

S-17

<PAGE>

REITS

The Funds may invest in real estate investment trusts ("REITs"), which pool
investors' funds for investment in income producing commercial real estate or
real estate related loans or interests.

A REIT is not taxed on income distributed to its shareholders or unitholders if
it complies with regulatory requirements relating to its organization,
ownership, assets and income, and with a regulatory requirement that it
distribute to its shareholders or unitholders at least 95% of its taxable income
for each taxable year. Generally, REITs can be classified as Equity REITs,
Mortgage REITs and Hybrid REITs. Equity REITs invest the majority of their
assets directly in real property and derive their income primarily from rents
and capital gains from appreciation realized through property sales. Mortgage
REITs invest the majority of their assets in real estate mortgages and derive
their income primarily from interest payments. Hybrid REITs combine the
characteristics of both Equity and Mortgage REITs. A shareholder in a Fund
should realize that by investing in REITs indirectly through the Fund, he or she
will bear not only his or her proportionate share of the expenses of the Fund,
but also indirectly, similar expenses of underlying REITs.

A Fund may be subject to certain risks associated with the direct investments of
the REITs. REITs may be affected by changes in the of their underlying
properties and by defaults by borrowers or tenants. Mortgage REITs may be
affected by the quality of the credit extended. Furthermore, REITs are dependent
on specialized management skills. Some REITs may have limited diversification
and may be subject to risks inherent in financing a limited number of
properties. REITs depend generally on their ability to generate cash flow to
make distributions to shareholders or unitholders, and may be subject to
defaults by borrowers and to self-liquidations. In addition, the performance of
a REIT may be affected by its failure to qualify for tax-free pass-through of
income under the Code or its failure to maintain exemption from registration
under the 1940 Act.

REPURCHASE AGREEMENTS

S-18

<PAGE>

than seven) from the date of purchase. The resale price reflects the purchase
price plus an agreed upon market rate of interest which is unrelated to the
coupon rate or maturity of the underlying security. A repurchase agreement
involves the obligation of the seller to pay the agreed upon price, which
obligation is in effect secured by the value of the underlying security.

Repurchase agreements are considered to be loans by a Fund for purposes of its
investment limitations. The repurchase agreements entered into by a Fund will
provide that the underlying security at all times shall have a value at least
equal to 102% of the resale price stated in the agreement (the Adviser monitors
compliance with this requirement). Under all repurchase agreements entered into
by a Fund, the Trust's Custodian or its agent must take possession of the
underlying collateral. However, if the seller defaults, the Fund could realize a
loss on the sale of the underlying security to the extent that the proceeds of
sale, including accrued interest, are less than the resale price provided in the
agreement including interest. In addition, even though the Bankruptcy Code
provides protection for most repurchase agreements, if the seller should be
involved in bankruptcy or insolvency proceedings, a Fund may incur delay and
costs in selling the underlying security or may suffer a loss of principal and
interest if the Fund is treated as an unsecured creditor and is required to
return the underlying security to the seller's estate.

REVERSE DOLLAR ROLL TRANSACTIONS

Each Short Duration Fund may enter into reverse dollar roll transactions, which
involve a purchase by a Fund of an eligible security from a financial
institution concurrently with an agreement by the Fund to resell a similar
security to the institution at a later date at an agreed-upon price. Reverse
dollar roll transactions are fully collateralized in a manner similar to loans
of the Fund's portfolio securities.

REVERSE REPURCHASE AGREEMENT AND DOLLAR ROLL TRANSACTIONS

A reverse repurchase agreement involves a sale by a Fund of securities that it
holds to a bank, broker-dealer or other financial institution concurrently with
an agreement by the Fund to repurchase the same securities at an agreed-upon
price and date. A dollar roll transaction involves a sale by a Fund of an
eligible security to a financial institution concurrently with an agreement by
the Fund to repurchase a similar eligible security from the institution at a
later date at an agreed-upon price. Each Fund will fully collateralize its
reverse repurchase agreements and dollar roll transactions in an amount at least
equal to the Fund's obligations under the reverse repurchase agreement or dollar
roll transaction by cash or other liquid securities that the Fund's custodian
segregates from other Fund assets.

RIGHTS

Rights give existing shareholders of a corporation the right, but not the
obligation, to buy shares of the corporation at a given price, usually below the
offering price, during a specified period.

S-19

<PAGE>

RULE 144A SECURITIES

Rule 144A securities are securities exempt from registration on resale pursuant
to Rule 144A under the 1933 Act. Rule 144A securities are traded in the
institutional market pursuant to this registration exemption, and, as a result,
may not be as liquid as exchange-traded securities since they may only be resold
to certain qualified institutional investors. Due to the relatively limited size
of this institutional market, these securities may affect the Fund's liquidity
to the extent that qualified institutional buyers become, for a time,
uninterested in purchasing such securities. Nevertheless, Rule 144A securities
may be treated as liquid securities pursuant to guidelines adopted by the
Trust's Board of Trustees.

SECURITIES LENDING

In order to generate additional income, a Fund may lend its securities pursuant
to agreements requiring that the loan be continuously secured by collateral
consisting of cash or securities of the U.S. Government or its agencies equal to
at least 100% of the market value of the loaned securities. A Fund continues to
receive interest on the loaned securities while simultaneously earning interest
on the investment of cash collateral. Collateral is marked to market daily.
There may be risks of delay in recovery of the securities or even loss of rights
in the collateral should the borrower of the securities fail financially or
become insolvent.

SECURITIES OF FOREIGN ISSUERS

The Funds may invest in securities of foreign issuers with a strong U.S. trading
presence and in sponsored and unsponsored ADRs. Investments in the securities of
foreign issuers may subject the Funds to investment risks that differ in some
respects from those related to investments in securities of U.S. issuers. Such
risks include future adverse political and economic developments, possible
imposition of withholding taxes on income, possible seizure, nationalization or
expropriation of foreign deposits, possible establishment of exchange controls
or taxation at the source or greater fluctuation in value due to changes in
exchange rates. Foreign issuers of securities often engage in business practices
different from those of domestic issuers of similar securities, and there may be
less information publicly available about foreign issuers. In addition, foreign
issuers are, generally speaking, subject to less government supervision and
regulation than are those in the United States. Investments in securities of
foreign issuers are frequently denominated in foreign currencies and the value
of a Fund's assets measured in U.S. dollars may be affected favorably or
unfavorably by changes in currency rates and in exchange control regulations,
and the Funds may incur costs in connection with conversions between various
currencies. Moreover, investments in emerging market nations may be considered
speculative, and there may be a greater potential for nationalization,
expropriation or adverse diplomatic developments (including war) or other events
which could adversely effect the economies of such countries or investments in
such countries.

S-20

<PAGE>

SHORT SALES

A short sale is "against the box" if at all times during which the short
position is open, a Fund owns at least an equal amount of the securities or
securities convertible into, or exchangeable without further consideration for,
securities of the same issue as the securities that are sold short.

U.S. GOVERNMENT AGENCY OBLIGATIONS

Certain Federal agencies, such as the GNMA, have been established as
instrumentalities of the United States Government to supervise and finance
certain types of activities. Issues of these agencies, while not direct
obligations of the United States Government, are either backed by the full faith
and credit of the United States (e.g., GNMA securities) or supported by the
issuing agencies' right to borrow from the Treasury. The issues of other
agencies are supported by the credit of the instrumentality (e.g., Fannie Mae
securities).

U.S. GOVERNMENT SECURITIES

Bills, notes and bonds issued by the U.S. Government and backed by the full
faith and credit of the United States.

U.S. TREASURY OBLIGATIONS

Bills, notes and bonds issued by the U.S. Treasury, and separately traded
interest and principal component parts of such obligations that are transferable
through the Federal book-entry system known as Separately Traded Registered
Interested and Principal Securities ("STRIPS") and Coupon Under Book Entry
Safekeeping ("CUBES").

VARIABLE AND FLOATING RATE INSTRUMENTS

Certain obligations may carry variable or floating rates of interest, and may
involve a conditional or unconditional demand feature. Such instruments bear
interest at rates which are not fixed, but which vary with changes in specified
market rates or indices. The interest rates on these securities may be reset
daily, weekly, quarterly or some other reset period, and may have a floor or
ceiling on interest rate changes. There is a risk that the current interest rate
on such obligations may not accurately reflect existing market interest rates. A
demand instrument with a demand notice exceeding seven days may be considered
illiquid if there is no secondary market for such security.

WARRANTS

Warrants are instruments giving holders the right, but not the obligation, to
buy equity or fixed income securities of a company at a given price during a
specified period.

S-21

<PAGE>

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES

When-issued or delayed delivery securities are subject to market fluctuations
due to changes in market interest rates and it is possible that the market value
at the time of settlement could be higher or lower than the purchase price if
the general level of interest rates has changed. Although a Fund generally
purchases securities on a when-issued or forward commitment basis with the
intention of actually acquiring securities for its investment portfolio, a Fund
may dispose of a when-issued security or forward commitment prior to settlement
if it deems appropriate.

YEAR 2000

The Trust depends on the smooth functioning of computer systems in almost every
aspect of its business. Like other mutual funds, business and individuals around
the world, the Trust could be adversely affected if the computer systems used by
its service providers do not properly process dates on and after January 1, 2000
and distinguish between the year 2000 and the year 1900. The Trust has asked its
service providers whether they expect to have their computer systems adjusted
for the year 2000 transition, and received assurances from each that its system
is expected to accommodate the year 2000 without material adverse consequences
to the Trust. The Trust and its shareholders may experience losses if these
assurances prove to be incorrect or as a result of year 2000 computer
difficulties experienced by issuers of portfolio securities or third parties,
such as custodians, banks, broker-dealers or others with which the Trust does
business.

ZERO COUPON SECURITIES

Zero coupon obligations are debt securities that do not bear any interest, but
instead are issued at a deep discount from par. The value of a zero coupon
obligation increases over time to reflect the interest accredit. Such
obligations will not result in the payment of interest until maturity, and will
have greater price volatility than similar securities that are issued at par and
pay interest periodically.

INVESTMENT LIMITATIONS

FUNDAMENTAL POLICIES

The following investment limitations are fundamental policies of each Fund which
cannot be changed with respect to a Fund without the consent of the holders of a
majority of that Fund's outstanding shares. The term "majority of the
outstanding shares" means the vote of (i) 67% or more of a Fund's shares present
at a meeting, if more than 50% of the outstanding shares of a Fund are present
or represented by proxy, or (ii) more than 50% of a Fund's outstanding shares,
whichever is less.

No Fund may:

S-22

<PAGE>

in the securities of such issuer; or (ii) acquire more than 10% of the
outstanding voting securities of any one issuer. This restriction applies
to 75% of each Fund's total assets.

2. Purchase any securities which would cause 25% or more of the total assets
of the Fund to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry,
provided that this limitation does not apply to investments in obligations
issued or guaranteed by the U.S. Government or its agencies and
instrumentalities and repurchase agreements involving such securities.

3. Borrow money in an amount exceeding 33 1/3% of the value of its total
assets, provided that, for purposes of this limitation, investment
strategies which either obligate the Fund to purchase securities or require
the Fund to segregate assets are not considered to be borrowings. Asset
coverage of at least 300% is required for all borrowings, except where the
Fund has borrowed money for temporary purposes in amounts not exceeding 5%
of its total assets. Each Fund will not purchase securities while its
borrowings exceed 5% of its total assets.

4. Make loans if, as a result, more than 33 1/3% of its total assets would be
lent to other parties, except that each Fund may (i) purchase or hold debt
instruments in accordance with its investment objective and policies; (ii)
enter into repurchase agreements; and (iii) lend its securities.

5. Purchase or sell real estate, physical commodities, or commodities
contracts, except that each Fund may purchase (i) marketable securities
issued by companies which own or invest in real estate (including real
estate investment trusts), commodities, or commodities contracts; and (ii)
commodities contracts relating to financial instruments, such as financial
futures contracts and options on such contracts.

6. Issue senior securities (as defined in the Investment Company Act of 1940
(the "1940 Act")) except as permitted by rule, regulation or order of the
Securities and Exchange Commission (the "SEC").

7. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.

8. Invest in interests in oil, gas, or other mineral exploration or
development programs and oil, gas or mineral leases.

The foregoing percentages (except with respect to the limitation on borrowing)
will apply at the time of the purchase of a security and shall not be considered
violated unless an excess or deficiency occurs immediately after or as a result
of a purchase of such security.

S-23

<PAGE>

NON-FUNDAMENTAL POLICIES

The following investment limitations are non-fundamental policies of each Fund
and may be changed with respect to a Fund by the Board of Trustees.

No Fund may:

1. Pledge, mortgage or hypothecate assets except to secure borrowings
permitted by the Fund's fundamental limitation on borrowing.

2. Invest in companies for the purpose of exercising control.

3. Purchase securities on margin or effect short sales, except that each Fund
may (i) obtain short-term credits as necessary for the clearance of
security transactions; (ii) provide initial and variation margin payments
in connection with transactions involving futures contracts and options on
such contracts; and (iii) make short sales "against the box" or in
compliance with the SEC's position regarding the asset segregation
requirements imposed by Section 18 of the 1940 Act.

4. Invest its assets in securities of any investment company, except as
permitted by the 1940 Act.

5. Purchase or hold illiquid securities, i.e., securities that cannot be
disposed of for their approximate carrying value in seven days or less
(which term includes repurchase agreements and time deposits maturing in
more than seven days) if, in the aggregate, more than 15% of its net assets
would be invested in illiquid securities.

In addition, each Fund will invest no more than 5% of its net assets in short
sales, unregistered securities, futures contracts, options and investment
company securities. Unregistered securities sold in reliance on the exemption
from registration in Section 4(2) of the 1933 Act and securities exempt from
registration on re-sale pursuant to Rule 144A of the 1933 Act may be treated as
liquid securities under procedures adopted by the Board of Trustees.

THE ADVISER

Turner Investment Partners, Inc.,1235 Westlakes Drive, Suite 350, Berwyn,
Pennsylvania 19312, is a professional investment management firm founded in
March, 1990. Robert E. Turner is the Chairman and controlling shareholder of the
Adviser. As of September 30, 1998, the Adviser had discretionary management
authority with respect to approximately $3.0 billion of assets. The Adviser has
provided investment advisory services to investment companies since 1992.

The Adviser serves as the investment adviser for each Fund under an investment
advisory agreement (the "Advisory Agreement"). Under the Advisory Agreement, the
Adviser makes the investment

S-24

<PAGE>

decisions for the assets of each Fund and continuously reviews, supervises and
administers each Fund's investment program, subject to the supervision of, and
policies established by, the Trustees of the Trust. The Adviser makes
recommendations to the Trustees with respect to the appropriate allocation of
assets to each of the Target Select Fund's Sub-Advisers, and directly manages
assets of the Fund not allocated to the Sub-Advisers.

The Advisory Agreement provides that the Adviser shall not be protected against
any liability to the Trust or its shareholders by reason of willful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or
from reckless disregard of its obligations or duties thereunder.

The Advisory Agreement provides that if, for any fiscal year, the ratio of
expenses of any Fund (including amounts payable to the Adviser but excluding
interest, taxes, brokerage, litigation, and other extraordinary expenses)
exceeds limitations established by any state in which the shares of the Fund are
registered, the Adviser will bear the amount of such excess. The Adviser will
not be required to bear expenses of any Fund to an extent which would result in
the Fund's inability to qualify as a regulated investment company under
provisions of the Internal Revenue Code of 1986, as amended (the "Code").

The continuance of the Advisory Agreement as to any Fund after the first two
years must be specifically approved at least annually (i) by the vote of the
Trustees or by a vote of the shareholders of that Fund, and (ii) by the vote of
a majority of the Trustees who are not parties to the Advisory Agreement or
"interested persons" of any party thereto, cast in person at a meeting called
for the purpose of voting on such approval. The Advisory Agreement will
terminate automatically in the event of its assignment, and is terminable at any
time without penalty by the Trustees of the Trust or, with respect to any Fund,
by a majority of the outstanding shares of that Fund, on not less than 30 days'
nor more than 60 days' written notice to the Adviser, or by the Adviser on 90
days' written notice to the Trust.

S-25

<PAGE>

For the fiscal years ended September 30, 1996, 1997, and 1998, the Funds paid
(had reimbursed) the following advisory fees:

- -------------------------------------------------------------------------------------------------------------------
Advisory Fees Paid Advisory Fees Waived
------------------------------------------------------------------------------------
1996 1997 1998 1996 1997 1998
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ultra Large Cap Fund ** $0 $ (79,930) ** $ 2,281 $ 15,530
- -------------------------------------------------------------------------------------------------------------------
Growth Equity Fund $666,476 $694,046 $ 664,499 $ 0 $24,250 $ 76,793
- -------------------------------------------------------------------------------------------------------------------
Midcap Fund ** $0 $ 92,465 ** $13,244 $ 42,799
- -------------------------------------------------------------------------------------------------------------------
Small Cap Fund $197,634 $762,604 $1,458,689 $82,694 $73,594 $226,626
- -------------------------------------------------------------------------------------------------------------------
Micro Cap Fund ** ** $ (97,006) ** ** $ 16,354
- -------------------------------------------------------------------------------------------------------------------
Fixed Income Fund ** ** ** ** ** **
- -------------------------------------------------------------------------------------------------------------------
Short Duration Fiscal Year Fiscal Year Fiscal Fiscal Year Fiscal Year Fiscal
Government Funds- Ended Ended Period Ended Ended Period
One Year Portfolio 2/28/97 2/28/98 Ended 2/28/97 2/28/98 Ended
$0 $(94,700) 9/30/98 $ 1,671 $ 2,792 9/30/98
$ (67,178) $ 1,596
- -------------------------------------------------------------------------------------------------------------------
Short Duration Fiscal Year Fiscal Year Fiscal Fiscal Year Fiscal Year Fiscal
Government Funds- Ended Ended Period Ended Ended Period
Three Year Portfolio 2/28/97 2/28/98 Ended 2/28/97 2/28/98 Ended
$0 $(117,540) 9/30/98 $ 32,092 $ 41,761 9/30/98
$ (80,828) $ 20,056
- -------------------------------------------------------------------------------------------------------------------
** Not in operation during the period.
</TABLE>

THE SUB-ADVISERS

The Target Select Fund currently has three Sub-Advisers -- Clover Capital
Management, Inc., Penn Capital Management Company, Inc., and Chartwell
Investment Partners (each a "Sub-Adviser" and collectively, the "Sub-Advisers").
Each Sub-Adviser will manage a portion of the Fund's assets, which allocation is
determined by the Trustees upon the recommendation of the Adviser. Each Sub-
Adviser makes the investment decisions for the assets of the Fund allocated to
it, and continuously reviews, supervises and administers a separate investment
program, subject to the supervision of, and policies established by, the
Trustees of the Trust. For its services, each of the Sub-Advisers is entitled to
receive a fee from Turner Investment Partners, which is calculated daily and
paid monthly, at an annual rate of .80% of the average daily net assets of the
Fund allocated to it. Currently, the Adviser and each Sub-Adviser has been
allocated assets in the range of 15-30% of the Fund's total assets.

CLOVER CAPITAL MANAGEMENT, INC. ("Clover Capital"), 11 Tobey Village Office
Park, Pittsford, New York 14354, is a professional investment management firm
founded in 1984 by Michael

S-26

<PAGE>

Edward Jones, CFA, and Geoffrey Harold Rosenberger, CFA, who are Managing
Directors of Clover Capital and who control all of the Clover Capital's
outstanding voting stock. Michael Jones, Managing Director of Clover Capital, is
the portfolio manager of the portion of the Fund's assets managed by Clover
Capital. As of September 30, 1998, the Clover Capital had discretionary
management authority with respect to approximately $1.9 billion of assets. In
addition to sub-advising the Fund and the Clover Funds, separate investment
portfolios of the Trust, Clover provides advisory services to pension plans,
religious and educational endowments, corporations, 401(k) plans, profit sharing
plans, individual investors and trusts and estates.

PENN CAPITAL MANAGEMENT COMPANY, INC. ("Penn Capital"), 52 Haddonfield-Berlin
Road, Suite 1000, Cherry Hill, New Jersey 08034, is a professional investment
management firm founded in 1987 and registered as an investment adviser under
the Investment Advisers Act. Richard A. Hocker is a founding partner and Chief
Investment Officer of Penn Capital and portfolio manager of the portion of the
assets of the Fund managed by Penn Capital, an investment management firm that
manages the investment portfolios of institutions and high net worth
individuals. As of September 30, 1998, Penn Capital had assets under management
of approximately $374 million. Penn Capital employs a staff of 17 and manages
monies in a variety of investment styles through either separate account
management or one of its private investment funds. In addition, Penn Capital
serves as investment adviser to the Penn Capital Funds, three separate
portfolios of the Trust.

CHARTWELL INVESTMENT PARTNERS ("Chartwell"), 1235 Westlakes Drive, Suite 330,
Berwyn, Pennsylvania 19312, is a professional investment management firm founded
in 1997 and registered as an investment adviser under the Investment Advisers
Act. Chartwell was founded by a team of experienced investment professionals who
had been employees of Delaware Management Company of Philadelphia, Pennsylvania.
The portion of the assets of the Fund managed by Chartwell will be managed by a
team of investment professionals with extensive investment experience. The
portion of the assets of the Fund managed by Chartwell will be managed by a team
of investment professionals with extensive investment experience. Chartwell
currently manages approximately $2.7 billion in assets for institutional
clients.

THE ADMINISTRATOR

The Trust and SEI Investments Mutual Funds Services (the "Administrator") have
entered into an administration agreement (the "Administration Agreement"). The
Administration Agreement provides that the Administrator shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Trust in
connection with the matters to which the Administration Agreement relates,
except a loss resulting from willful misfeasance, bad faith or gross negligence
on the part of the Administrator in the performance of its duties or from
reckless disregard by it of its duties and obligations thereunder. The
Administration Agreement shall remain in effect for a period of three (3) years
after the effective date of the agreement and shall continue in effect for
successive periods of one (1) year unless terminated by either party on not less
than 90 days' prior written notice to the other party.

S-27

<PAGE>

The continuance of the Administration Agreement must be specifically approved at
least annually (i) by the vote of a majority of the Trustees or by the vote of a
majority of the outstanding voting securities of the Fund, and (ii) by the vote
of a majority of the Trustees of the Trust who are not parties to the
Administration Agreement or an "interested person" (as that term is defined in
the 1940 Act) of any party thereto, cast in person at a meting called for the
purpose of voting on such approval. The Administration Agreement is terminable
at any time as to any Fund without penalty by the Trustees of the Trust, by a
vote of a majority of the outstanding shares of the Fund or by the Manager on
not less than 30 days' nor more than 60 days' written notice.

The Administrator, a Delaware business trust, has its principal business offices
at Oaks, Pennsylvania 19456. SEI Investments Management Corporation ("SIMC"), a
wholly-owned subsidiary of SEI Investments Company ("SEI Investments"), is the
owner of all beneficial interest in the Administrator. SEI Investments and its
subsidiaries and affiliates, including the Administrator, are leading providers
of funds evaluation services, trust accounting systems, and brokerage and
information services to financial institutions, institutional investors, and
money managers. The Administrator and its affiliates also serve as administrator
or sub-administrator to the following other mutual funds: The Achievement Funds
Trust, The Advisors' Inner Circle Fund, Alpha Select Funds, The Arbor Funds, ARK
Funds, Armada Funds, Bishop Street Funds, Boston 1784 Funds(R), CrestFunds,
Inc., CUFUND, The Expedition Funds, First American Funds, Inc., First American
Investment Funds, Inc., First American Strategy Funds, Inc., HighMark Funds, The
Nevis Funds, Huntington Funds, Oak Associates Funds, The PBHG Funds, Inc., PBHG
Advisor Funds, Inc.,PBHG Insurance Series Fund, Inc., The Pillar Funds, SEI
Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Institutional Investments Trust, SEI Institutional International Trust, SEI
Institutional Managed Trust, SEI Liquid Asset Trust, STI Classic Funds, SEI Tax
Exempt Trust, and STI Classic Variable Trust.

For the fiscal years ended September 30, 1996, 1997, and 1998, the Funds paid
the following administrative fees (net of waivers):

S-28

<PAGE>

- -------------------------------------------------------------------------------------------
Administrative Fees Paid
- -------------------------------------------------------------------------------------------
1996 1997 1998
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>

Ultra Large Cap Fund * $ 3,057 $ 31,129
- -------------------------------------------------------------------------------------------
Growth Equity Fund $136,587 $110,759 $114,049
- -------------------------------------------------------------------------------------------
Midcap Fund * $ 9,404 $ 46,823
- -------------------------------------------------------------------------------------------
Small Cap Fund $ 68,682 $ 98,104 $181,597
- -------------------------------------------------------------------------------------------
Micro Cap Fund * * $ 42,470
- -------------------------------------------------------------------------------------------
Target Select Fund * * $ 0
- -------------------------------------------------------------------------------------------
Short Duration Fiscal Year Fiscal Year Fiscal Period
Government Funds- Ended 2/28/97 Ended 2/28/98 Ended 9/30/98
One Year Portfolio $ $ 802 $ 510
- -------------------------------------------------------------------------------------------
Short Duration Fiscal Year Fiscal Year Fiscal Period
Government Funds- Ended 2/28/97 Ended 2/28/98 Ended 9/30/98
Three Year Portfolio $ $ 11,964 $ 6,418
- -------------------------------------------------------------------------------------------
Fixed Income Fund * * *
- -------------------------------------------------------------------------------------------
* Not in operation during the period.
</TABLE>

DISTRIBUTION AND SHAREHOLDER SERVICES

SEI Investments Distribution Co. (the "Distributor"), a wholly-owned subsidiary
of SEI Investments, and the Trust are parties to a distribution agreement (the
"Distribution Agreement") with respect to shares of the Funds. The Distributor
receives no compensation for distribution of shares of the Funds.

The Distribution Agreement shall remain in effect for a period of two years
after the effective date of the agreement and is renewable annually. The
Distribution Agreement may be terminated by the Distributor, by a majority vote
of the Trustees who are not interested persons and have no financial interest in
the Distribution Agreement or by a majority vote of the outstanding securities
of the Trust upon not more than 60 days' written notice by either party or upon
assignment by the Distributor.

The Short Duration Government Funds have adopted a shareholder service plan for
Adviser Class shares (the "Adviser Class Service Plan") under which firms,
including the Distributor, that provide shareholder and administrative services
may receive compensation therefore. Under the Adviser Class Service Plan, the
Distributor may provide those services itself, or may enter into arrangements
under which third parties provide such services and are compensated by the
Distributor. Under such arrangements, the Distributor may retain as profit any
difference between the fee it receives and the amount it pays such third
parties. In addition, the Funds may enter into such arrangements directly. Under
the Adviser Class Service Plan, the Distributor is entitled to receive a fee at
an annual rate of up to .25% of each Fund's average daily net assets
attributable to Adviser Class shares that are

S-29

<PAGE>

subject to the arrangement in return for provision of a broad range of
shareholder and administrative services, including: maintaining client accounts;
arranging for bank wires; responding to client inquiries concerning services
provided for investments; changing dividend options; account designations and
addresses; providing sub-accounting; providing information on share positions to
clients; forwarding shareholder communications to clients; processing purchase,
exchange and redemption orders; and processing dividend payments.

TRUSTEES AND OFFICERS OF THE TRUST

The management and affairs of the Trust are supervised by the Trustees under the
laws of the Commonwealth of Massachusetts. The Trustees have approved contracts
under which, as described above, certain companies provide essential management
services to the Trust. The Trustees and executive officers of the Trust and
their principal occupations for the last five years are set forth below. Each
may have held other positions with the named companies during that period. The
Trust pays the fees for unaffiliated Trustees.

The Trustees and Executive Officers of the Trust, their respective dates of
birth, and their principal occupations for the last five years are set forth
below. Each may have held other positions with the named companies during that
period. Unless otherwise noted, the business address of each Trustee and each
Executive Officer as it relates to the Trust is SEI Investments Company, Oaks,
Pennsylvania 19456. Certain officers of the Trust also serve as officers of some
or all of the following: The Achievement Funds Trust, The Advisors' Inner Circle
Fund, The Arbor Fund, ARK Funds, Armada Funds, Bishop Street Funds, Boston 1784
Funds(R), CrestFunds, Inc., CUFUND, The Expedition Funds, First American Funds,
Inc., First American Investment Funds, Inc., First American Strategy Funds,
Inc., HighMark Funds, Huntington Funds, The Nevis Fund, Inc., Oak Associates
Funds, The Parkstone Group of Funds, The PBHG Funds, Inc., PBHG Advisor Funds,
Inc., PBHG Insurance Series Fund, Inc., The Pillar Funds, SEI Asset Allocation
Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional International
Trust, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI
Liquid Asset Trust, SEI Tax Exempt Trust, STI Classic Funds, STI Classic
Variable Trust, and Alpha Select Funds, each of which is an open-end management
investment company managed by SEI Investments Mutual Funds Services or its
affiliates and, except for PBHG Advisor Funds, Inc., distributed by SEI
Investments Distribution Co.

ROBERT E. TURNER (DOB 11/26/56) - Trustee* - Chairman and Chief Investment
Officer of Turner Investment Partners, Inc. ("Turner"), since 1990.

RICHARD A. HOCKER (DOB 07/21/46) - Trustee* - CEO and Chairman of the Board of
Covenant Bank, 1988-1997. Director of Bedminister Bioconversion Corporation,
since 1988. Chief Investment Officer and Senior Vice President of Penn Capital
Management Co., Inc., since 1987.

MICHAEL E. JONES (DOB 12/24/54) - Trustee* - Senior Vice President, Investment
Adviser and Portfolio Manager with Clover Capital Management Inc., since 1984.
Principal of CCM Securities Inc.

S-30

<PAGE>

ALFRED C. SALVATO (DOB 01/09/58) - Trustee** - Treasurer, Thomas Jefferson
University Health Care Pension Fund, since 1995, and Assistant Treasurer,
1988-1995.

JANET F. SANSONE (DOB 08/11/45) - Trustee** - Corporate Vice President of Human
Resources of Frontier Corporation (telecommunications company), since 1993.
Director of Education at General Electric Corporation, 1982-1993.

JOHN T. WHOLIHAN (DOB 12/12/37) - Trustee** - Professor, Loyola Marymount
University, since 1984.

STEPHEN J. KNEELEY (DOB 02/09/63) - President and Chief Executive Officer -
Chief Operating Officer of Turner Investment Partners, Inc., since 1990.

JANET RADER ROTE (DOB 08/24/60) - Vice President and Assistant Secretary -
Director of Compliance of Turner Investment Partners, Inc., since 1992.

TODD B. CIPPERMAN (DOB 02/14/66) - Vice President and Assistant Secretary - Vice
President and Assistant Secretary of SEI, the administrator and distributor
since 1995. Associate, Dewey Ballantine, 1994-1995. Associate, Winston and
Strawn, 1991-1994.

SANDRA K. ORLOW (DOB 10/18/53) - Vice President and Assistant Secretary - Vice
President and Assistant Secretary of the Administrator and Distributor since
1988.

KEVIN P. ROBINS (DOB 04/15/61) - Vice President, Assistant Secretary - Senior
Vice President, General Counsel and Assistant Secretary of SEI, Senior Vice
President, General Counsel and Secretary of the Administrator and Distributor
since 1994. Vice President and Assistant Secretary of SEI, the Administrator and
Distributor 1992-1994. Associate, Morgan, Lewis & Bockius LLP, 1988-1992.

ROBERT DELLACROCE (DOB 12/17/63) - Controller and Chief Accounting Officer -
Director, Funds Administration and Accounting of SEI since 1994. Senior Audit
Manager, Arthur Andersen LLP, 1986-1994.

LYDIA A. GAVALIS (DOB 06/05/64) - Vice President and Assistant Secretary - vice
President and Assistant Secretary of the Manager and the Distributor since 1998.
Assistant General Counsel and Director of Arbitration, Philadelphia Stock
Exchange, 19889-1998.

KATHY HEILIG (DOB 12/21/58) - Vice President and Assistant Secretary - Treasurer
of SEI Investments Company since 1997; Assistant Controller of Sei Investment
since 1995; Vice President of SEI Investments Company since 1991; Director of
Taxes of SEI Investments Company 1987 to 1991. Tax Manager, Arthur Anderson LLP
prior to 1987.

S-31

<PAGE>

JOSEPH M. O'DONNELL (DOB 11/13/54) - Vice President and Assistant Secretary -
Vice President and Assistant Secretary of Adviser, the Manager and the
Distributor since 1998. Vice President and general Counsel, FPS Services, Inc.,
1993-1997. Staff Counsel and Secretary, Provident Mutual Family of Funds,
1990-1993.

LYNDA J. STRIEGEL (DOB 10/30/48) - Vice President and Assistant Secretary of the
Manager and the Distributor since 1998. Senior Asset Management counsel, Barnett
Banks, Inc. (1997-1998). Partner, Groom and Nordberg, Chartered, 1996-1997.
Associate General Counsel, Riggs Bank N.A., 1991-1995.

JAMES W. JENNINGS (DOB 01/15/37) - Secretary - Partner, Morgan, Lewis & Bockius
LLP, counsel to the Trust, Turner, the Administrator and Distributor.

JOHN H. GRADY, JR. (DOB 06/01/61) - Assistant Secretary - 1701 Market Street,
Philadelphia, Pennsylvania 19103, Partner, Morgan, Lewis & Bockius LLP, Counsel
to the Trust, Turner, the Administrator and the Distributor.

EDWARD B. BAER (DOB 09/27/68) - Assistant Secretary -1701 Market Street,
Philadelphia, Pennsylvania 19103, Associate, Morgan, Lewis & Bockius LLP,
Counsel to the Trust, Turner, the Administrator and the Distributor, since 1995.
Attorney, Aquila Management Corporation, 1994.

-----------------------------

S-32

<PAGE>

The following table exhibits Trustee compensation for the fiscal year ended
September 30, 1998.

- -----------------------------------------------------------------------------------------------------------------------
Aggregate Pension or Estimated Total Compensation From
Compensation From Retirement Annual Registrant and Fund
Name of Person, Registrant for the Benefits Accrued Benefits Complex Paid to Trustees
Position Fiscal Year Ended as Part of Fund Upon for the Fiscal Year Ended
September 30, 1998 Expenses Retirement September 30, 1998
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert Turner* $0 N/A N/A $0 for service on two
Boards
- -----------------------------------------------------------------------------------------------------------------------
Richard A. Hocker* $0 N/A N/A $0 for service on one
Board
- -----------------------------------------------------------------------------------------------------------------------
Michael E. Jones* $0 N/A N/A $0 for service on one
Board
- -----------------------------------------------------------------------------------------------------------------------
Alfred C. Salvato** $8,000 N/A N/A $12,500 for service on
two Boards
- -----------------------------------------------------------------------------------------------------------------------
Janet F. Sansone** $8,000 N/A N/A $8,000 for service on one
Board
- -----------------------------------------------------------------------------------------------------------------------
John T. Wholihan** $10,233.87 N/A N/A $10,233.87 for service on
one Board
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

* Messrs. Robert Turner, Richard Hocker and Michael Jones are Trustees who may
be deemed to be "interested persons" of the Trust as the term is defined in the
1940 Act. The Trust pays fees only to the Trustees who are not interested
persons of the Trust. Compensation of Officers and interested persons of the
Trust is paid by the adviser or the manager.

** Member of the Audit Committee.

The Trustees and Officers of the Trust own less than 1% of the outstanding
shares of the Trust.

COMPUTATION OF YIELD AND TOTAL RETURN

From time to time the Trust may advertise yield and total return of the Funds.
These figures will be based on historical earnings and are not intended to
indicate future performance. No representation can be made concerning actual
future yields or returns. The yield of a Fund refers to the annualized income
generated by an investment in the Fund over a specified 30-day period. The yield
is calculated by assuming that the income generated by the investment during
that 30-day period is generated in each period over one year and is shown as a
percentage of the investment. In particular, yield will be calculated according
to the following formula:

Yield = 2[((a-b)/cd + 1)(6) - 1] where a = dividends and interest earned during
the period; b = expenses accrued for the period (net of reimbursement); c = the
current daily number of shares outstanding during the period that were entitled
to receive dividends; and d = the maximum offering price per share on the last
day of the period.

For the 30-day period ended September 30, 1998, the Ultra Large Cap, Growth
Equity, Midcap and Small Cap, and Target Select Funds' yields were each 0%. For
the 30-day period ended September 30, 1998, the One Year and Three Year
Portfolios' yields were 5.95% and 5.62% respectively. The Fixed Income Fund was
not in operation during this period.

S-33

<PAGE>

average annual total return; n = number of years; and ERV = ending redeemable
value, as of the end of the designated time period, of a hypothetical $1,000
payment made at the beginning of the designated time period.

For the fiscal year ended September 30, 1998, and for the period from January
31, 1997 (commencement of operations of the Turner Ultra Large Cap Growth Fund
of The Advisors' Inner Circle Fund) through September 30, 1998, the total return
for the Ultra Large Cap Growth Fund was 17.26% and 24.52%, respectively. For the
fiscal year ended September 30, 1998, and for the period from March 11, 1992
(commencement of operations of the Turner Growth Equity Fund of The Advisors'
Inner Circle Fund) through September 30, 1998, the total return for the Growth
Equity Fund was 10.71% and 16.52%, respectively. For the fiscal year ended
September 30, 1998, and for the period from October 1, 1996 (commencement of
operations of the Turner Midcap Growth Fund of The Advisors' Inner Circle Fund)
through September 30, 1998, the total return for the Midcap Growth Fund was
1.24% and 20.66%, respectively. For the fiscal year ended September 30, 1998 and
the period from February 7, 1994 (commencement of operations of the Turner Small
Cap Portfolio of The Advisors' Inner Circle Fund) through September 30, 1998,
the total return for the Small Cap Fund was -16.90% and 20.56%, respectively.
For the period from February 27, 1998 (commencement of operations for the Turner
Micro Cap Growth Fund) through September 30, 1998, the total return for the
Micro Cap Fund was (1.20)% (cumulative since inception). For the period from
December 31, 1997 (commencement of operations of the Turner Target Select Equity
Fund) through September 30, 1998, the total return for the Target Select Fund
was 25.45%. For the fiscal year ended September 30, 1998, and for the period
from March 1, 1994 (commencement of operations of the Turner Short Duration
Government Funds - One Year Portfolio) through September 30, 1998, the total
return for the One Year Portfolio was 6.22% and 6.25%, respectively. For the
fiscal year ended September 30, 1998, and for the period from March 1, 1994
(commencement of operations of the Turner Short Duration Government Funds -
Three Year Portfolio) through September 30, 1998, the total return for the
ThreeYear Portfolio was 8.07% and 6.72%, respectively. The Fixed Income Fund was
not in operation during these periods.

PURCHASE AND REDEMPTION OF SHARES

Purchases and redemptions may be made through the Transfer Agent on days when
the New York Stock Exchange is open for business. Currently, the weekdays on
which the Fund is closed for business are: New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. Shares of each Fund are offered on a
continuous basis.

It is currently the Trust's policy to pay all redemptions in cash. The Trust
retains the right, however, to alter this policy to provide for redemptions in
whole or in part by a distribution in-kind of securities held by a Fund in lieu
of cash. Shareholders may incur brokerage charges on the sale of any such
securities so received in payment of redemptions.

S-34

<PAGE>

The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period on which trading on
the New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the SEC by rule or regulation) as a result of which
disposal or valuation of a Fund's securities is not reasonably practicable, or
for such other periods as the SEC has by order permitted. The Trust also
reserves the right to suspend sales of shares of any Fund for any period during
which the New York Stock Exchange, the Adviser, the Administrator, the Transfer
Agent and/or the Custodian are not open for business.

DETERMINATION OF NET ASSET VALUE

The securities of each Fund are valued by the Administrator. The Administrator
may use an independent pricing service to obtain valuations of securities. The
pricing service relies primarily on prices of actual market transactions as well
as on trade quotations obtained from third parties. However, the pricing service
may use a matrix system to determine valuations of fixed income securities. This
system considers such factors as security prices, yields, maturities, call
features, ratings and developments relating to specific securities in arriving
at valuations. The procedures used by the pricing service and its valuation are
reviewed by the officers of the Trust under the general supervision of the
Trustees.

If there is no readily ascertainable market value for a security, the
Administrator will make a good faith determination as to the "fair value" of the
security.

Securities with remaining maturities of 60 days or less will be valued by the
amortized cost method, which involves valuing a security at its cost on the date
of purchase and thereafter (absent unusual circumstances) assuming a constant
amortization of maturity of any discount or premium, regardless of the impact of
fluctuations in general market rates of interest on the value of the instrument.
While this method provides certainty in valuation, it may result in periods
during which value, as determined by this method, is higher or lower than the
price the Trust would receive if it sold the instrument.

TAXES

The following is only a summary of certain tax considerations generally
affecting the Funds and their shareholders, and is not intended as a substitute
for careful tax planning. Shareholders are urged to consult their tax advisors
with specific reference to their own tax situations, including their state and
local tax liabilities.

FEDERAL INCOME TAX

The following is only a summary of certain additional federal tax considerations
generally affecting the Funds and their shareholders that are not discussed in
the Funds' Prospectus. No attempt is made to present a detailed explanation of
the federal, state or local tax treatment of the

S-35

<PAGE>

Funds or their shareholders and the discussion here and in the Funds' Prospectus
is not intended as a substitute for careful tax planning.

The discussion of federal income tax consequences is based on the Internal
Revenue Code of 1986 (the "Code") and the regulations issued thereunder as in
effect on the date of this Statement of Additional Information. New legislation,
as well as administrative changes or court decisions, may significantly change
the conclusions expressed herein, and may have a retroactive effect with respect
to the transactions contemplated herein.

Each Fund intends to qualify as a "regulated investment company" ("RIC") as
defined under Subchapter M of the Code. By following such a policy, each Fund
expects to eliminate or reduce to a nominal amount the federal taxes to which it
may be subject.

In order to qualify for treatment as a RIC under the Code, each Fund must
distribute annually to its shareholders at least the sum of 90% of its net
interest income excludable from gross income plus 90% of its investment company
taxable income (generally, net investment income plus net short-term capital
gain) ("Distribution Requirement") and also must meet several additional
requirements. Among these requirements are the following: (i) at least 90% of
the Fund's gross income each taxable year must be derived from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock or securities, or certain other income (including
gains from options, futures or forward contracts); (ii) at the close of each
quarter of the Fund's taxable year, at least 50% of the value of its total
assets must be represented by cash and cash items, U.S. Government securities,
securities of other RICs and other securities, with such other securities
limited, in respect to any one issuer, to an amount that does not exceed 5% of
the value of the Fund's assets and that does not represent more than 10% of the
outstanding voting securities of such issuer; and (iii) at the close of each
quarter of the Fund's taxable year, not more than 25% of the value of its assets
may be invested in securities (other than U.S. Government securities or the
securities of other RICs) of any one issuer, or of two or more issuers which are
engaged in the same, similar or related trades or business if the Fund owns at
least 20% of the voting power of such issuer.

Notwithstanding the Distribution Requirement described above, which requires
only that the Fund distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital gain
(the excess of net long-term capital gain over net short-term capital loss), the
Funds will be subject to a nondeductible 4% federal excise tax to the extent it
fails to distribute by the end of any calendar year 98% of its ordinary income
for that year and 98% of its capital gain net income (the excess of short- and
long-term capital gains over short-and long-term capital losses) for the
one-year period ending on October 31 of that year, plus certain other amounts.

Each Fund intends to make sufficient distributions to avoid liability for the
federal excise tax. A Fund may in certain circumstances be required to liquidate
Fund investments in order to make sufficient distributions to avoid federal
excise tax liability at a time when the investment advisor

S-36

<PAGE>

might not otherwise have chosen to do so, and liquidation of investments in such
circumstances may affect the ability of a Fund to satisfy the requirements for
qualification as a RIC.

Any gain or loss recognized on a sale, exchange or redemption of shares of a
Fund by a shareholder who is not a dealer in securities will generally, for
individual shareholders, be treated as a long-term capital gain or loss if the
shares have been held for more than twelve months, and otherwise will be treated
as short-term capital gain or loss. However, if shares on which a shareholder
has received a net capital gain distribution are subsequently sold, exchanged or
redeemed and such shares have been held for six months or less, any loss
recognized will be treated as a long-term capital loss to the extent of the net
capital gain distribution. Long-term capital gains are currently taxed at a
maximum rate of 20% and short-term capital gains are currently taxed at ordinary
income tax rates.

In certain cases, a Fund will be required to withhold, and remit to the United
States Treasury, 31% of any distributions paid to a shareholder who (1) has
failed to provide a correct taxpayer identification number, (2) is subject to
backup withholding by the Internal Revenue Service, or (3) has not certified to
that Fund that such shareholder is not subject to backup withholding.

If any Fund fails to qualify as a RIC for any taxable year, it will be taxable
at regular corporate rates. In such an event, all distributions (including
capital gains distributions) will be taxable as ordinary dividends to the extent
of the Fund's current and accumulated earnings and profits, and such
distributions may generally be eligible for the corporate dividends-received
deduction.

Funds may, in certain circumstances involving tax-free reorganizations, accept
securities that are appropriate investments as payment for Fund shares (an
"In-Kind Purchase"). An In-Kind Purchase may result in adverse tax consequences
under certain circumstances to either the investors transferring securities for
shares (an "In-Kind Investors") or to investors who acquire shares of the Fund
after a transfer ("new shareholders"). As a result of an In-Kind Purchase, the
Funds may acquire securities that have appreciated in value or depreciated in
value from the date they were acquired. If appreciated securities were to be
sold after an In-Kind Purchase, the amount of the gain would be taxable to new
shareholders as well as to In-Kind Investors. The effect of this for new
shareholders would be to tax them on a distribution that represents a return of
the purchase price of their shares rather than an increase in the value of their
investment. The effect on In-Kind Investors would be to reduce their potential
liability for tax on capital gains by spreading it over a larger asset base. The
opposite may occur if the Funds acquire securities having an unrealized capital
loss. In that case, In-Kind Investors will be unable to utilize the loss to
offset gains, but, because an In-Kind Purchase will not result in any gains, the
inability of In-Kind Investors to utilize unrealized losses will have no
immediate tax effect. For new shareholders, to the extent that unrealized losses
are realized by the Funds, new shareholders may benefit by any reduction in net
tax liability attributable to the losses. The Adviser cannot predict whether
securities acquired in any In-Kind Purchase will have unrealized gains or losses
on the date of the In-Kind Purchase. Consistent with its duties as investment
adviser, the Adviser will,

S-37

<PAGE>

however, take tax consequences to investors into account when making decisions
to sell portfolio assets, including the impact of realized capital gains on
shareholders of the Funds.

The Funds may use a tax management technique known as "highest in, first out."
Using this technique, the portfolio holdings that have experienced the smallest
gain or largest loss are sold first in an effort to minimize capital gains and
enhance after-tax returns.

STATE TAXES

No Fund is liable for any income or franchise tax in Massachusetts if it
qualifies as a RIC for federal income tax purposes. Distributions by any Fund to
shareholders and the ownership of shares may be subject to state and local
taxes.

PORTFOLIO TRANSACTIONS

The Adviser is authorized to select brokers and dealers to effect securities
transactions for the Funds. The Adviser will seek to obtain the most favorable
net results by taking into account various factors, including price, commission,
if any, size of the transactions and difficulty of executions, the firm's
general execution and operational facilities and the firm's risk in positioning
the securities involved. While the Adviser generally seeks reasonably
competitive spreads or commissions, a Fund will not necessarily be paying the
lowest spread or commission available. The Adviser seeks to select brokers or
dealers that offer a Fund best price and execution or other services which are
of benefit to the Fund.

The Adviser may, consistent with the interests of the Funds, select brokers on
the basis of the research services they provide to the Adviser. Such services
may include analyses of the business or prospects of a company, industry or
economic sector, or statistical and pricing services. Information so received by
the Adviser will be in addition to and not in lieu of the services required to
be performed by the Adviser under the Advisory Agreement. If, in the judgment of
the Adviser, a Fund or other accounts managed by the Adviser will be benefitted
by supplemental research services, the Adviser is authorized to pay brokerage
commissions to a broker furnishing such services which are in excess of
commissions which another broker may have charged for effecting the same
transaction. These research services include advice, either directly or through
publications or writings, as to the value of securities, the advisability of
investing in, purchasing or selling securities, and the availability of
securities or purchasers or sellers of securities; furnishing of analyses and
reports concerning issuers, securities or industries; providing information on
economic factors and trends; assisting in determining portfolio strategy;
providing computer software used in security analyses; and providing portfolio
performance evaluation and technical market analyses. The expenses of the
Adviser will not necessarily be reduced as a result of the receipt of such
supplemental information, such services may not be used exclusively, or at all,
with respect to a Fund or account generating the brokerage, and there can be no
guarantee that the Adviser will find all of such services of value in advising
that Fund.

S-38

<PAGE>

It is expected that the Funds may execute brokerage or other agency transactions
through the Distributor, which is a registered broker-dealer, for a commission
in conformity with the 1940 Act, the Securities Exchange Act of 1934 and rules
promulgated by the SEC. Under these provisions, the Distributor is permitted to
receive and retain compensation for effecting portfolio transactions for a Fund
on an exchange if a written contract is in effect between the Trust and the
Distributor expressly permitting the Distributor to receive and retain such
compensation. These rules further require that commissions paid to the
Distributor by a Fund for exchange transactions not exceed "usual and customary"
brokerage commissions. The rules define "usual and customary" commissions to
include amounts which are "reasonable and fair compared to the commission, fee
or other remuneration received or to be received by other brokers in connection
with comparable transactions involving similar securities being purchased or
sold on a securities exchange during a comparable period of time." The Trustees,
including those who are not "interested persons" of the Trust, have adopted
procedures for evaluating the reasonableness of commissions paid to the
Distributor and will review these procedures periodically.

Because no Fund markets its shares through intermediary brokers or dealers, it
is not the Funds' practice to allocate brokerage or principal business on the
basis of sales of its shares which may be made through such firms. However, the
Adviser may place portfolio orders with qualified broker-dealers who recommend a
Fund's shares to clients, and may, when a number of brokers and dealers can
provide best net results on a particular transaction, consider such
recommendations by a broker or dealer in selecting among broker-dealers.

For the fiscal years ended September 30, 1996, 1997, and 1998, the Fund's
portfolio turnover rates were as follows:

- --------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate
------------------------------------------------------------------------------
1996 1997 1998
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Ultra Large Cap Fund * 346.47% 234.93%
- --------------------------------------------------------------------------------------------------------------------
Growth Equity Fund 147.79% 178.21% 249.58%
- --------------------------------------------------------------------------------------------------------------------
Midcap Fund * 348.29% 304.29%
- --------------------------------------------------------------------------------------------------------------------
Small Cap Fund 149.00% 130.68% 167.73%
- --------------------------------------------------------------------------------------------------------------------
Micro Cap Fund * * 128.53%
- --------------------------------------------------------------------------------------------------------------------
Target Select Fund * * 803.02%
- --------------------------------------------------------------------------------------------------------------------
Short Duration Government For the Fiscal Year For the Fiscal Year For the Fiscal Period
Funds-One Year Portfolio Ended 2/28/97 Ended 2/28/98 Ended 9/30/98
81.82% 68.80% 96.56%
- --------------------------------------------------------------------------------------------------------------------
Short Duration Government For the Fiscal Year For the Fiscal Year For the Fiscal Period
Funds-Three Year Portfolio Ended 2/28/97 Ended 2/28/98 Ended 9/30/98
279.00% 197.03% 121.63%
- --------------------------------------------------------------------------------------------------------------------
Fixed Income Fund * * *
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

* Not in operation during the period.
Amounts designated as "--" are either $0 or have been rounded to $0.

S-39

<PAGE>

The brokerage commissions paid for each Fund for the fiscal years ended
September 30, 1996, 1997, and 1998 were as follows:

- --------------------------------------------------------------------------------
Total Dollar Amount of Brokerage Commissions Paid
-------------------------------------------------
1996 1997 1998
- --------------------------------------------------------------------------------
Ultra Large Cap Fund * $ 2,586 $10,622
- --------------------------------------------------------------------------------
Growth Equity Fund $369,573 $335,291 $464,404
- --------------------------------------------------------------------------------
Midcap Fund * $ 17,029 $123,834
- --------------------------------------------------------------------------------
Small Cap Fund $128,154 $235,029 $465,825
- --------------------------------------------------------------------------------
Micro Cap Fund * * $ 6,974
- --------------------------------------------------------------------------------
Target Select Fund * * $ 13,856
- --------------------------------------------------------------------------------
Short Duration N/A N/A N/A
Government Funds-
One Year Portfolio
- --------------------------------------------------------------------------------
Short Duration N/A N/A N/A
Government Funds-
Three Year Portfolio
- --------------------------------------------------------------------------------
Fixed Income Fund * * *
- --------------------------------------------------------------------------------
*Not in operation during the period.

The total amount of securities of the Broker/Dealer held by each Fund for the
fiscal year ended September 30, 1998 were as follows:

=====================================================================================================
Total Amount of
Securities
Name of Held by Each
Fund Broker/Dealer Fund Type of Security
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Turner Ultra Large Cap Morgan Stanley $ 243,000 Repurchase Agreement
Growth Fund
- -----------------------------------------------------------------------------------------------------
Turner Growth Equity Fund Morgan Stanley $1,411,000 Repurchase Agreement
- -----------------------------------------------------------------------------------------------------
Turner Midcap Growth Fund Morgan Stanley $1,246,000 Repurchase Agreement
- -----------------------------------------------------------------------------------------------------
Turner Small Cap Growth Fund J. P. Morgan $5,612,000 Repurchase Agreement
- -----------------------------------------------------------------------------------------------------
Turner Micro Cap Growth Fund Morgan Stanley $ 114,765 Repurchase Agreement
=====================================================================================================
</TABLE>

S-40

<PAGE>

DESCRIPTION OF SHARES

Each share held entitles the Shareholder of record to one vote for each dollar
invested. In other words, each shareholder of record is entitled to one vote for
each dollar of net asset value of the shares held on the record date for the
meeting. Shares issued by each Fund have no preemptive, conversion, or
subscription rights. Each whole share shall be entitled to one vote and each
fractional share shall be entitled to a proportionate fractional vote. Each
Fund, as a separate series of the Trust, votes separately on matters affecting
only that Fund. Voting rights are not cumulative. Shareholders of each Class of
each Fund will vote separately on matters pertaining solely to that Fund or that
Class. As a Delaware business trust, the Trust is not required to hold annual
meetings of Shareholders, but approval will be sought for certain changes in the
operation of the Trust and for the election of Trustees under certain
circumstances.

In addition, a Trustee may be removed by the remaining Trustees or by
Shareholders at a special meeting called upon written request of Shareholders
owning at least 10% of the outstanding shares of the Trust. In the event that
such a meeting is requested, the Trust will provide appropriate assistance and
information to the Shareholders requesting the meeting.

The Declaration of Trust authorizes the issuance of an unlimited number of
portfolios and shares of each portfolio. Each share of a portfolio represents an
equal proportionate interest in that portfolio with each other share. Shares are
entitled upon liquidation to a pro rata share in the net assets of the
portfolio. Shareholders have no preemptive rights. All consideration received by
the Trust for shares of any portfolio and all assets in which such consideration
is invested would belong to that portfolio and would be subject to the
liabilities related thereto. Share certificates representing shares will not be
issued.

SHAREHOLDER LIABILITY

The Trust is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust could, under
certain circumstances, be held personally liable as partners for the obligations
of the trust. Even if, however, the Trust were held to be a partnership, the
possibility of the shareholders' incurring financial loss for that reason
appears remote because the Trust's Declaration of Trust contains an express
disclaimer of shareholder liability for obligations of the Trust, and requires
that notice of such disclaimer be given in each agreement, obligation or
instrument entered into or executed by or on behalf of the Trust or the
Trustees, and because the Declaration of Trust provides for indemnification out
of the Trust property for any shareholder held personally liable for the
obligations of the Trust.

S-41

<PAGE>

LIMITATION OF TRUSTEES' LIABILITY

The Declaration of Trust provides that a Trustee shall be liable only for his
own willful defaults and, if reasonable care has been exercised in the selection
of officers, agents, employees or investment advisers, shall not be liable for
any neglect or wrongdoing of any such person. The Declaration of Trust also
provides that the Trust will indemnify its Trustees and officers against
liabilities and expenses incurred in connection with actual or threatened
litigation in which they may be involved because of their offices with the Trust
unless it is determined in the manner provided in the Declaration of Trust that
they have not acted in good faith in the reasonable belief that their actions
were in the best interests of the Trust. However, nothing in the Declaration of
Trust shall protect or indemnify a Trustee against any liability for his willful
misfeasance, bad faith, gross negligence or reckless disregard of his duties.

5% SHAREHOLDERS

As of January 5, 1999, the following persons were the only persons who were
record owners (or to the knowledge of the Trust, beneficial owners) of 5% or
more of the shares of the Portfolios. The Trust believes that most of the shares
referred to below were held by the persons indicated in accounts for their
fiduciary, agency, or custodial customers.

NAME AND ADDRESS NUMBER OF PERCENTAGE OF
FUND OF BENEFICIAL OWNER SHARES FUND'S SHARES
---- ------------------- ------------ -------------
<S> <S> <C> <C>
Turner Ultra Large Cap Fund Charles Schwab & Co. Inc. 247,398.5700 67.26%
Attn: Mutual Funds/Team S
4500 Cherry Creek Dr. S Fl 3
Denver, CO 80209

Turner Growth Equity Fund Starr Commonwealth 607,210.1730 7.09%
13725 Starr Commonwealth Rd.
Albion, MI 49224-9580

Saxon & Co. TTEE 498,422.5920 5.82%
FBO C/F
Duane Morrise & Hecke LLP
A/C# 20-35-002-1029077
P.O. Box 7780-1888
Philadelphia, PA 19182-0001

Retirement Plan for Employees of 768,167.7060 8.96%
Bridgeport Hospital
C/O People's Bank Trust Dept.
850 Main Street 13th Fl
Bridgeport, CT 06604-4917

- ----------------------------------------------------------------------------------------------------
</TABLE>

S-42

<PAGE>

<S> <C> <C> <C>
Saul & Co. 2,506,871.7060 29.25%
FBO Sheet Metal Annuity
C/O First Union National Bank
A/C 1546000537
1525 W. WT Harris Blvd. #1151
Charlotte, NC 28262-8522

Charles Schwab & Co. Inc. 493,306.2980 5.76%
Attn: Mutual Funds/Team S
4500 Cherry Creek Dr. S Fl 3
Denver, CO 80209

Citicorp USA Inc. Pledgee 822,376.2690 9.60%
McNeil Children's Trust
Loan Collateral Account
C/O Carole McNeil
P.O. Box 803598
Dallas, TX 75380-3598

Turner Midcap Growth Fund Charles Schwab & Co. Inc. 594,501.3600 30.29%
Attn: Mutual Funds/Team S
4500 Cherry Creek Dr. S Fl. 3
Denver, CO 80209

Sheet Metal Workers Local #19 224,808.6650 11.45%
Supplemental Unemployment
Benefit Fund
1301 S Columbus Blvd.
Philadelphia, PA 19147-5505

Concord Trust Company 166,719.7830 8.49%
1601 Elm St. Ste 1725
Dallas, TX 75201-7254

Turner Small Cap Donaldson Lufkin Jenrette 392,195.2570 5.56%
Growth Fund SECS Corp.
Pershing Division
P.O. Box 2052
Jersey City, NJ 07399

Charles Schwab & Co. Inc. 3,667,318.2940 52.00%
Attn: Mutual Funds/Team S
4500 Cherry Creek Dr. S Fl. 3
Denver, CO 80209
</TABLE>

S-43

<PAGE>

<S> <C> <C>
Turner Micro Cap Growth Charles Schwab & Co. Inc. 79,930.5400 23.20%
Attn: Mutual Funds/Team S
4500 Cherry Creek Dr. S Fl 3
Denver, CO 80209

Robert E. Turner 20,530.3850 5.96%
Carolyn W. Turner JTWROS
9 Horseshoe Ln
Paoli, PA 19301-1909

Carolyn Turner TR 20,000.0000 5.80%
Robert E. Turner Jr. Trust
9 Horseshoe Ln.
Paoli, PA 19301-1909

John C. Weber Jr. TR 50,001.2550 14.51%
John C. Weber Trust
8000 N. MacArthur Blvd.,
Apt. 2024
Irving, TX 75063-4101

Christina Weber TR 50,000.0000 14.51%
Christina Weber Trust
DTD 00/00/00
117 W. 12th St.
New York, NY 10011-8200

Chester C. Weber TR 47,214.3530 13.70%
U/A 7/30/1993
Chester C. Weber Trust
P.O. Box 2108
Ocala, FL 34478-2108

Turner Target Select Charles Schwab & Co. Inc. 12,521.5620 13.68%
Equity Fund Attn: Mutual Funds/Team S
4500 Cherry Creek Dr. S Fl 3
Denver, CO 80209

Boyd L. Newsom 4,826.0050 5.27%
2912 Golfing Green Dr.
Dallas, TX 75234-4938

Carolyn Turner TR 32,999.3990 19.09%
U/A
Robert E. Turner Jr., Trust
9 Horseshoe Ln.
Paoli, PA 19301-1909
- -------------------------------------------------------------------------------------------------
</TABLE>

S-44

<PAGE>

<S> <C> <C> <C>
Robert & Carolyn Turner 17,466.3990 19.09%
Foundation
9 Horseshoe Ln.
Paoli, PA 19302-1909

Turner Short Duration Solon Asset Management Corp. 14,876.8240 25.08%
Government Funds - One 1981 N. Broadway, Ste. 325
Year Portfolio Walnut Creek, CA 95496-3873

James I. Midanek 3,320.4430 5.60%
375 La Casa Via
Walnut Creek, CA 94598-4842

Charles Schwab & Co. Inc. 37,633.3430 63.45%
Attn: Mutual Funds/Team S
4500 Cherry Creek Dr. S Fl. 3
Denver, CO 80209

Turner Short Duration DonaldsonBryn Mawr 814,837.0940 74.07%
Government Funds - Attn: Jerry Berenson
Three Year Portfolio 101 N. Merion Ave.
Bryn Mawr, PA 19010-2899

Charles Schwab & Co. Inc. 200,202,.3260 18.20%
101 Montgomery St.
San Francisco, CA 94104-4122
</TABLE>

CUSTODIAN

First Union National Bank, Broad and Chestnut Streets, P.O. Box 7618,
Philadelphia, Pennsylvania 19101 acts as the custodian (the "Custodian") of the
Trust. The Custodian holds cash, securities and other assets of the Trust as
required by the Investment Company Act of 1940, as amended (the "1940 Act").

LEGAL COUNSEL

Morgan, Lewis & Bockius LLP, serves as counsel to the Trust.

FINANCIAL STATEMENTS

The Trust's financial statements for the fiscal year ended September 30, 1998,
including notes thereto and the report of Ernst & Young LLP thereon, are herein
incorporated by reference. A copy of the 1998 Annual Report must accompany the
delivery of this Statement of Additional Information.

S-45

<PAGE>

APPENDIX

The following descriptions are summaries of published ratings.

DESCRIPTION OF CORPORATE BOND RATINGS

Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay principal and interest.
Bonds rated AA by S&P also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong, and differs from AAA issues only in
small degree. Debt rated A by S&P has a strong capacity to pay interest and
repay principal although it is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than debt in higher rated
categories.

Bonds rated BBB by S&P are considered as medium-grade obligations (i.e., they
are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Bonds rated Aaa by Moody's are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edged". Interest payments are protected by a large, or an exceptionally stable,
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues. Bonds rated Aa by Moody's are
judged by Moody's to be of high quality by all standards. Together with bonds
rated Aaa, they comprise what are generally known as high-grade bonds. They are
rated lower than the best bonds because margins of protection may not be as
large as in Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the
long-term risk appear somewhat larger than in Aaa securities.

Bonds rated A by Moody's possess many favorable investment attributes and are to
be considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future. Debt rated
Baa by Moody's is regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories.

A-1

<PAGE>

quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events. Bonds rated AA by Fitch are considered to be investment grade and of
very high credit quality. The obligor's ability to pay interest and repay
principal is very strong, although not quite as strong as bonds rated AAA.
Because bonds rated in the AAA and AA categories are not significantly
vulnerable to foreseeable future developments, short-term debt of these issuers
is generally rated F-1+. Bonds rated A by Fitch are considered to be investment
grade and of high credit quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be more vulnerable to
adverse changes in economic conditions and circumstances than bonds with higher
ratings. Bonds rated BBB by Fitch are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have adverse impact on these
bonds, and therefore impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings.

Bonds rated AAA by Duff are judged by Duff to be of the highest credit quality,
with negligible risk factors being only slightly more than for risk-free U.S.
Treasury debt. Bonds rated AA by Duff are judged by Duff to be of high credit
quality with strong protection factors and risk that is modest but that may vary
slightly from time to time because of economic conditions. Bonds rated A by Duff
are judged by Duff to have average but adequate protection factors. However,
risk factors are more variable and greater in periods of economic stress. Bonds
rated BBB by Duff are judged by Duff as having below average protection factors
but still considered sufficient for prudent investment, with considerable
variability in risk during economic cycles.

Obligations rated AAA by IBCA have the lowest expectation of investment risk.
Capacity for timely repayment of principal and interest is substantial, such
that adverse changes in business, economic or financial conditions are unlikely
to increase investment risk significantly. Obligations for which there is a very
low expectation of investment risk are rated AA by IBCA. Capacity for timely
repayment of principal and interest is substantial. Adverse changes in business,
economic or financial conditions may increase investment risk albeit not very
significantly. Obligations for which there is a low expectation on investment
risk are rated A by IBCA. Capacity for timely repayment of principal and
interest is strong, although adverse changes in business, economic or financial
conditions may lead to increased investment risk. Obligations for which there is
currently a low expectation of investment risk are rated BBB by IBCA. Capacity
for timely repayment of principal and interest is adequate, although adverse
changes in business, economic or financial conditions are more likely to lead to
increased investment risk than for obligations in higher categories.

DESCRIPTION OF COMMERCIAL PAPER RATINGS

Commercial paper rated A by Standard & Poor's Corporation ("S&P") is regarded by
S&P as having the greatest capacity for timely payment. Issues rated A are
further refined by use of the

A-2

<PAGE>

numbers 1, 1 +, and 2 to indicate the relative degree of safety. Issues rated
A-1+ are those with an "overwhelming degree" of credit protection. Those rated
A-1, the highest rating category, reflect a "very strong" degree of safety
regarding timely payment. Those rated A-2, the second highest rating category,
reflect a satisfactory degree of safety regarding timely payment but not as high
as A-1.

Commercial paper issues rated Prime-1 or Prime-2 by Moody's Investors Service,
Inc. ("Moody's") are judged by Moody's to be of "superior" quality and "strong"
quality respectively on the basis of relative repayment capacity.

F-1+ (Exceptionally Strong) is the highest commercial paper rating Fitch
assigns; paper rated F- 1+ is regarded as having the strongest degree of
assurance for timely payment. Paper rated F-1 (Very Strong) reflects an
assurance of timely payment only slightly less in degree than paper rated F-1+.
The rating F-2 (Good) reflects a satisfactory degree of assurance for timely
payment, but the margin of safety is not as great as for issues rated F-1+ or
F-1.

The rating Duff-1 is the highest commercial paper rating assigned by Duff. Paper
rated Duff-1 is regarded as having very high certainty of timely payment with
excellent liquidity factors which are supported by good fundamental protection
factors. Risk factors are minor. Duff has incorporated gradations of 1+ and 1-
to assist investors in recognizing quality differences within this highest tier.
Paper rated Duff-1+ has the highest certainty of timely payment, with
outstanding short-term liquidity and safety just below risk-free U.S. Treasury
short-term obligations. Paper rated Duff-1- has high certainty of timely payment
with strong liquidity factors which are supported by good fundamental protection
factors. Risk factors are very small. Paper rated Duff-2 is regarded as having
good certainty of timely payment, good access to capital markets (although
ongoing funding may enlarge total financing requirements) and sound liquidity
factors and company fundamentals. Risk factors are small.

The designation A1, the highest rating by IBCA, indicates that the obligation is
supported by a strong capacity for timely repayment. Those obligations rated A1+
are supported by the highest capacity for timely repayment. Obligations rated
A2, the second highest rating, are supported by a satisfactory capacity for
timely repayment, although such capacity may be susceptible to adverse changes
in business, economic or financial conditions.

A-3

<PAGE>

TIP FUNDS

FUNDS:
CLOVER SMALL CAP VALUE FUND
CLOVER EQUITY VALUE FUND
CLOVER MAX CAP VALUE FUND
CLOVER FIXED INCOME FUND

INVESTMENT ADVISER:
CLOVER CAPITAL MANAGEMENT, INC.

This Statement of Additional Information is not a prospectus and relates only to
the Clover Small Cap Value Fund (the "Small Cap Value Fund"), Clover Equity
Value Fund (the "Equity Value Fund"), Clover Max Cap Value Fund (the "Max Cap
Value Fund"), and Clover Fixed Income Fund (the "Fixed Income Fund") (each a
"Fund" and, together, the "Funds"). It is intended to provide additional
information regarding the activities and operations of the TIP Funds (the
"Trust") and should be read in conjunction with the Funds' Prospectus dated
January 31, 1999. The Prospectus may be obtained without charge by calling 1-
800-224-6312.
TABLE OF CONTENTS

THE TRUST ......................................................................
INVESTMENT OBJECTIVES...........................................................
INVESTMENT POLICIES.............................................................
DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS...........................
INVESTMENT LIMITATIONS..........................................................
THE ADVISER.....................................................................
THE ADMINISTRATOR...............................................................
THE DISTRIBUTOR.................................................................
TRUSTEES AND OFFICERS OF THE TRUST..............................................
COMPUTATION OF YIELD AND TOTAL RETURN...........................................
PURCHASE AND REDEMPTION OF SHARES...............................................
DETERMINATION OF NET ASSET VALUE................................................
TAXES...........................................................................
PORTFOLIO TRANSACTIONS..........................................................
DESCRIPTION OF SHARES...........................................................
SHAREHOLDER LIABILITY...........................................................
LIMITATION OF TRUSTEES' LIABILITY...............................................
5% SHAREHOLDERS.................................................................
CUSTODIAN.......................................................................
LEGAL COUNSEL...................................................................
FINANCIAL STATEMENTS............................................................
APPENDIX........................................................................

January 31, 1999

S-1

<PAGE>

THE TRUST

This Statement of Additional Information relates only to the Clover Small Cap
Value Fund (the "Small Cap Value Fund"), Clover Equity Value Fund (the "Equity
Value Fund"), Clover Max Cap Value Fund (the "Max Cap Value Fund"), and Clover
Fixed Income Fund (the "Fixed Income Fund") (each a "Fund" and, together, the
"Funds"). Each Fund is a separate series of the TIP Funds (the "Trust"), a
diversified, open-end management investment company established as a
Massachusetts business trust under a Declaration of Trust dated January 26,
1996, as amended on February 21, 1997. The Declaration of Trust permits the
Trust to offer separate series ("portfolios") of shares of beneficial interest
("shares"). Each portfolio is a separate mutual fund, and each share of each
portfolio represents an equal proportionate interest in that portfolio. On June
25, 1997, the Small Cap Value, Equity Value, and Fixed Income Funds acquired
substantially all of the assets and liabilities of the Clover Capital Small Cap
Value, Clover Capital Equity Value, and Clover Capital Fixed Income Portfolios
(collectively, the "Clover Capital Portfolios") of The Advisors' Inner Circle
Fund. The Trust also offers shares in the Turner Ultra Large Cap Growth Fund,
Turner Growth Equity Fund, Turner Midcap Growth Fund, Turner Small Cap Growth
Fund, Turner Micro Cap Growth Fund, Turner Fixed Income Fund, Turner Short
Duration Government Funds-One Year Portfolio, Turner Short Duration Government
Funds-Three Year Portfolio, TIP Target Select Equity Fund, Penn Capital
Strategic High Yield Bond Fund, Penn Capital Select Financial Services Fund, and
Penn Capital Value Plus Fund. Capitalized terms not defined herein are defined
in the Prospectus offering shares of the Funds.

INVESTMENT OBJECTIVES

SMALL CAP VALUE FUND -- The Small Cap Value Fund seeks long-term total return.

EQUITY VALUE FUND -- The Equity Value Fund seeks long-term total return.

MAX CAP VALUE FUND -- The Max Cap Value Fund seeks long-term total return.

FIXED INCOME FUND -- The Fixed Income Fund seeks a high level of income
consistent with reasonable risk to capital.

There can be no assurance that any Fund will achieve its investment objective.

INVESTMENT POLICIES

SMALL CAP VALUE FUND

Under normal market conditions, the Small Cap Value Fund invests at least 75%
and up to 100% of its total assets in a diversified portfolio of equity
securities of U.S. issuers that have market capitalizations of $750 million or
less at the time of purchase, including

S-2

<PAGE>

common stocks, warrants and rights to subscribe to common stocks, equity
interests issued by REITs, and both debt securities and preferred stocks
convertible into common stocks. The Small Cap Value Fund may invest in such
convertible debt securities without regard to their term or rating and may, from
time to time, invest in corporate debt securities rated below investment grade,
i.e., rated lower than BBB by Standard & Poors Corporation ("S&P"), Baa by
Moody's Investors Service Inc. ("Moody's"), or unrated securities of comparable
quality as determined by Clover Capital Management, Inc. (the "Adviser").

The Adviser employs database screening techniques to search the universe of
domestic public companies for stocks trading in the bottom 20% of valuation
parameters such as stock price-to-book value, price-to-cash flow,
price-to-earnings and price-to-sales. From these stocks the Adviser selects a
diversified group of securities for investment by utilizing additional screening
and selection strategies to identify the companies that the Adviser believes are
more financially stable. In addition, the Fund may include holdings in issuers
that may not have been identified during the initial screening process but that
the Adviser has identified using its value-oriented fundamental research
techniques. In addition, the Fund may invest up to 10% of its net assets in
American Depositary Receipts ("ADRs").

All of the equity securities (including ADRs) in which the Fund invests are
traded on registered exchanges or the over-the-counter market in the United
States.

Any remaining assets may be invested in (i) the equity securities described
above of U.S. issuers that have market capitalizations exceeding $750 million at
the time of purchase, and (ii) Money Market Instruments.

EQUITY VALUE FUND

The Equity Value Fund will invest primarily in equity securities that the
Adviser believes to be undervalued relative to the market or their historic
valuation. The Adviser uses several valuation criteria to determine if a
security is undervalued, including price-to-earnings ratios, price-to-cash flow
ratios, price-to-sales ratios, and price-to-book value ratios. In addition, the
Adviser examines "hidden values" that are not obvious in a company's financial
reports, focusing on finding the current asset values or current transfer values
of assets held by the company.

Under normal market conditions, the Equity Value Fund invests at least 70% and
up to 100% of its net assets in a diversified portfolio of equity securities,
including common stocks, both debt securities and preferred stocks convertible
into common stocks, and ADRs (up to 20% of the Equity Value Fund's net assets).
In addition to these equity securities, the Fund may also invest up to 5% of its
net assets in each of warrants and rights to purchase common stocks, and up to
10% of its net assets in real estate investment trusts ("REITs"). Assets of the
Fund not invested in the equity securities described above may be invested in
non-convertible fixed income securities and Money Market Instruments as
described below.

S-3

<PAGE>

All of the equity securities (including ADRs) in which the Fund invests are
traded on registered exchanges or the over-the-counter market in the United
States.

During periods when, or under circumstances where, the Adviser believes that the
return on such securities may equal or exceed the return on equity securities,
the Fund may invest up to 25% of its net assets in non-convertible fixed income
securities consisting of corporate debt securities and obligations issued or
guaranteed as to principal and interest by the U.S. Government or its agencies
or instrumentalities. The Fund may invest in such securities without regard to
their term or rating and may, from time to time, invest in corporate debt
securities rated below investment grade, i.e., rated lower than BBB by S&P
and/or Baa by Moody's, or unrated securities of comparable quality as determined
by the Adviser.

Under normal circumstances, up to 30% of the Equity Value Fund's assets may be
invested in Money Market Instruments in order to maintain liquidity, or if the
Adviser determines that securities meeting the Fund's investment objective and
policies are not otherwise reasonably available for purchase.

MAX CAP VALUE FUND

The Max Cap Value Fund invests primarily in large-capitalization equities with
low valuations based on measures such as price to book value and price to cash
flow. The Adviser will attempt to acquire securities that have attractive
dividend yields relative to the market average and/or their own trading history.

The Max Cap Value Fund invests at least 75% of its assets in a diversified
portfolio chosen from the 500 largest capitalization equities (generally over
$10 billion) where the stock price is low relative to book value and cash flow
as compared to the average large capitalization stock. The Adviser evaluates
these large- capitalization domestic companies and searches for stocks valued in
the lowest third based on price to book value and price to cash flow. From these
candidates, the companies with adequate financial strength and higher dividend
yields are chosen for investment. The Adviser may also choose stocks whose
primary attractive feature is a current dividend yield which is high relative to
the stocks' historic yield range.

Up to 25% of the Max Cap Value Fund's assets may be invested in
attractively-valued companies whose market capitalizations fall below the top
500 (i.e., below $5 billion). In addition, up to 10% of the Fund may be invested
in ADRs whose market capitalizations fall among the top 100 in available ADRs.

During periods when, or under circumstances where, the Adviser believes that the
return on non-convertible fixed income securities may equal or exceed the return
on equity securities, the Fund may invest up to 25% of its net assets in
non-convertible fixed income securities consisting of corporate debt securities
and obligations issued or guaranteed as

S-4

<PAGE>

to principal and interest by the U.S. Government or its agencies or
instrumentalities. The Fund may invest in such securities without regard to
their term or rating and may, from time to time, invest in corporate debt
securities rated below investment grade, i.e., rated lower than BBB by S&P
and/or Baa by Moody's or in unrated securities of comparable quality as
determined by the Adviser. Such high-yield, high-risk securities are also known
as "junk bonds." The Fund's exposure to junk bonds, including convertible
securities rated below investment grade, will not exceed 25% of its total
assets.

Under normal circumstances, up to 25% of the Max Cap Value Fund's assets may be
invested in the Money Market Instruments described below in order to maintain
liquidity, or if the Adviser determines that securities meeting the Fund's
investment objective and policies are not otherwise reasonably available for
purchase. For temporary defensive purposes during periods when the Adviser
determines that market conditions warrant, the Fund may invest up to 100% of its
assets in Money Market Instruments and in cash.

FIXED INCOME FUND

Under normal market conditions, the Fixed Income Fund invests at least 70% of
its net assets in the following fixed income securities: (i) obligations issued
or guaranteed as to principal and interest by the U.S. Government, its agencies
or instrumentalities ("U.S. Government Securities"); (ii) corporate bonds and
debentures rated in one of the four highest rating categories; and (iii)
mortgage-backed securities that are collateralized mortgage obligations ("CMOs")
or real estate mortgage investment conduits ("REMICs") rated in one of the two
highest rating categories. The Fund will invest in such corporate bonds and
debentures, CMOs or REMICs only if, at the time of purchase, the security either
has the requisite rating from S&P or Moody's or is unrated but of comparable
quality as determined by the Adviser. Governmental private guarantees do not
extend to the securities' value, which is likely to vary inversely with
fluctuations in interest rates.

The Fund may invest its remaining assets in the following securities: (i) Money
Market Instruments, (ii) asset-backed securities rated A or higher by S&P or
Moody's; (iii) debt securities rated below investment grade, but not lower than
B- by S&P or B3 by Moody's, or if unrated, determined by the Adviser to be of
comparable quality at the time of purchase (up to 15% of the Fund's net assets,
including downgraded securities); (iv) debt securities convertible into common
stocks (up to 10% of the Fund's net assets); (v) U.S. dollar denominated fixed
income securities issued by foreign corporations or issued or guaranteed by
foreign governments, their political subdivisions, agencies or
instrumentalities; and (vi) U.S. dollar denominated obligations of supranational
entities traded in the United States. For additional information on corporate
bond ratings, see the Appendix.

S-5

<PAGE>

The relative proportions of the Fund's net assets invested in the different
types of permissible investments will vary from time to time depending upon the
Adviser's assessment of the relative market value of the sectors in which the
Fund invests. In addition, the Fund may purchase securities that are trading at
a discount from par when the Adviser believes there is a potential for capital
appreciation. The Adviser does not seek to achieve the Fund's investment
objective by forecasting changes in the interest rate environment.

In the event any security owned by the Fund is downgraded below the rating
categories set forth above, the Adviser will review the situation and determine
whether to retain or dispose of the security.

The Fund may enter into forward commitments or purchase securities on a
when-issued basis, and may invest in variable or floating rate obligations.

The Fund expects to maintain a dollar-weighted average portfolio maturity of
five to ten years.

ALL FUNDS

Each Fund may purchase securities on a when-issued basis.

Each Fund may enter into futures and options transactions.

Each Fund may invest up to 15% of its net assets in illiquid securities.

Each Fund may purchase convertible securities.

Each Fund may borrow money.

Each Fund may enter into Repurchase Agreements.

For temporary defensive purposes during periods when the Adviser determines that
market conditions warrant, each Fund may invest up to 100% of its assets in
Money Market Instruments and in cash.

DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS

S-6

<PAGE>

AMERICAN DEPOSITARY RECEIPTS ("ADRS")

ASSET-BACKED SECURITIES

Asset-backed securities are not issued or guaranteed by the U.S. Government, its
agencies or instrumentalities; however, the payment of principal and interest on
such obligations may be guaranteed up to certain amounts and for a certain
period by a letter of credit issued by a financial institution (such as a bank
or insurance company) unaffiliated with the issuers of such securities. The
purchase of asset-backed securities raises risk considerations peculiar to the
financing of the instruments underlying such securities. For example, there is a
risk that another party could acquire an interest in the obligations superior to
that of the holders of the asset-backed securities. There also is the
possibility that recoveries on repossessed collateral may not, in some cases, be
available to support payments on those securities. Asset-backed securities
entail prepayment risk, which may vary depending on the type of asset, but is
generally less than the prepayment risk associated with mortgage-backed
securities. In addition, credit card receivables are unsecured obligations of
card holders.

CONVERTIBLE SECURITIES

S-7

<PAGE>

value of a convertible security tends to move with the market value of the
underlying stock particularly when the value of the underlying stock moves
toward the conversion ratio. The value of a convertible security is also
affected by prevailing interest rates, the credit quality of the issuer and any
call provisions.

DERIVATIVES

Derivatives are securities that derive their value from other securities,
financial instruments or indices. The following are considered derivative
securities: options on futures, futures, options (e.g., puts and calls), swap
agreements, mortgage-backed securities (e.g., CMOs, REMICs, IOs and POs),
when-issued securities and forward commitments, floating and variable rate
securities, convertible securities, "stripped" U.S. Treasury securities (e.g.,
Receipts and STRIPs), privately issued stripped securities (e.g., TGRs, TRs, and
CATs). See elsewhere in the "Description of Permitted Investments" for
discussions of these various instruments.

EQUITY SECURITIES

FIXED INCOME SECURITIES

S-8

<PAGE>

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS

There are risks associated with these activities, including the following: (1)
the success of a hedging strategy may depend on an ability to predict movements
in the prices of individual securities, fluctuations in markets and movements in
interest rates; (2) there may be an imperfect or no correlation between the
changes in market value of the securities held by a Fund and the prices of
futures and options on futures; (3) there may not be a liquid secondary market
for a futures contract or option; (4) trading restrictions or limitations may be
imposed by an exchange; and (5) government regulations may restrict trading in
futures contracts and futures options.

S-9

<PAGE>

A Fund may enter into futures contracts and options on futures contracts traded
on an exchange regulated by the Commodities Futures Trading Commission ("CFTC"),
as long as, to the extent that such transactions are not for "bona fide hedging
purposes," the aggregate initial margin and premiums on such positions
(excluding the amount by which such options are in the money) do not exceed 5%
of a Fund's net assets. A Fund may buy and sell futures contracts and related
options to manage its exposure to changing interest rates and securities prices.
Some strategies reduce a Fund's exposure to price fluctuations, while others
tend to increase its market exposure. Futures and options on futures can be
volatile instruments and involve certain risks that could negatively impact a
Fund's return.

In order to avoid leveraging and related risks, when a Fund purchases futures
contracts, it will collateralize its position by depositing an amount of cash or
liquid securities equal to the market value of the futures positions held, less
margin deposits, in a segregated account with its custodian. Collateral equal to
the current market value of the futures position will be marked to market on a
daily basis.

ILLIQUID SECURITIES

JUNK BONDS

Bonds rated below investment grade are often referred to as "junk bonds." Such
securities involve greater risk of default or price declines than investment
grade securities due to changes in the issuer's creditworthiness and the outlook
for economic growth. The market for these securities may be less active, causing
market price volatility and limited liquidity in the secondary market. This may
limit a Fund's ability to sell such securities at their market value. In
addition, the market for these securities may also be adversely affected by
legislative and regulatory developments. Credit quality in the junk bond market
can change suddenly and unexpectedly, and even recently-issued credit ratings
may not fully reflect the actual risks imposed by a particular security.

MONEY MARKET INSTRUMENTS

S-10

<PAGE>

corporations; (iv) debt obligations with a maturity of one year or less issued
by corporations with outstanding high-quality commercial paper ratings; and (v)
repurchase agreements involving any of the foregoing obligations entered into
with highly-rated banks and broker-dealers.

MORTGAGE- AND ASSET-BACKED SECURITIES

GOVERNMENT PASS-THROUGH SECURITIES: These are securities that are issued or
guaranteed by a U.S. Government agency representing an interest in a pool of
mortgage loans. The primary issuers or guarantors of these mortgage-backed
securities are the Government National Mortgage Association ("GNMA"), Fannie Mae
and the Federal Home Loan Mortgage Corporation ("FHLMC"). Fannie Mae and FHLMC
obligations are not backed by the full faith and credit of the U.S. Government
as GNMA certificates are, but Fannie Mae and FHLMC securities are supported by
the instrumentalities' right to borrow from the U.S. Treasury. GNMA, Fannie Mae
and FHLMC each guarantee timely distributions of interest to certificate
holders. GNMA and Fannie Mae also each guarantee timely distributions of
scheduled principal. FHLMC has in the past guaranteed only the ultimate
collection of principal of the underlying mortgage loan; however, FHLMC now
issues mortgage-backed securities (FHLMC Gold PCS) which also guarantee timely
payment of monthly principal reductions. Government and private guarantees do
not extend to the securities' value, which is likely to vary inversely with
fluctuations in interest rates.

PRIVATE PASS-THROUGH SECURITIES: These are mortgage-backed securities issued by
a non-governmental entity, such as a trust. These securities include CMOs and
REMICs that are rated in one of the top two rating categories. While they are
generally structured with one or more types of credit enhancement, private
pass-through securities typically lack a guarantee by an entity having the
credit status of a governmental agency or instrumentality.

S-11

<PAGE>

classes. Principal and interest paid on the underlying mortgage assets may be
allocated among the several classes of a series of a CMO in a variety of ways.
Each class of a CMO, often referred to as a "tranche," is issued with a specific
fixed or floating coupon rate and has a stated maturity or final distribution
date. Principal payments on the underlying mortgage assets may cause CMOs to be
retired substantially earlier than their stated maturities or final distribution
dates, resulting in a loss of all or part of any premium paid.

REMICs: REMICs, which were authorized under the Tax Reform Act of 1986, are
private entities formed for the purpose of holding a fixed pool of mortgages
secured by an interest in real property. REMICs are similar to CMOs in that they
issue multiple classes of securities. A REMIC is a CMO that qualifies for
special tax treatment under the Code and invests in certain mortgages
principally secured by interests in real property. Investors may purchase
beneficial interests in REMICs, which are known as "regular" interests, or
"residual" interests. Guaranteed REMIC pass-through certificates ("REMIC
Certificates") issued by Fannie Mae or FHLMC represent beneficial ownership
interests in a REMIC trust consisting principally of mortgage loans or Fannie
Mae, FHLMC or GNMA-guaranteed mortgage pass-through certificates. For FHLMC
REMIC Certificates, FHLMC guarantees the timely payment of interest, and also
guarantees the payment of principal as payments are required to be made on the
underlying mortgage participation certificates. Fannie Mae REMIC Certificates
are issued and guaranteed as to timely distribution of principal and interest by
Fannie Mae.

PARALLEL PAY SECURITIES; PAC BONDS: Parallel pay CMOs and REMICs are structured
to provide payments of principal on each payment date to more than one class.
These simultaneous payments are taken into account in calculating the stated
maturity date or final distribution date of each class, which must be retired by
its stated maturity date or final distribution date, but may be retired earlier.
Planned Amortization Class CMOs ("PAC Bonds") generally require payments of a
specified amount of principal on each payment date. PAC Bonds are always
parallel pay CMOs with the required principal payment on such securities having
the highest priority after interest has been paid to all classes.

STRIPPED MORTGAGE-BACKED SECURITIES ("SMBs"): SMBs are usually structured with
two classes that receive specified proportions of the monthly interest and
principal payments from a pool of mortgage securities. One class may receive all
of the interest payments and is thus termed an interest-only class ("IO"), while
the other class may receive all of the principal payments and is thus termed the
principal-only class ("PO"). The value of IOs tends to increase as rates rise
and decrease as rates fall; the opposite is true of POs. SMBs are extremely
sensitive to changes in interest rates because of the impact thereon of
prepayment of principal on the underlying mortgage securities. The market for
SMBs is not as fully developed as other markets; SMBs therefore may be illiquid.

S-12

<PAGE>

ADDITIONAL RISK FACTORS: Due to the possibility of prepayments of the underlying
mortgage instruments, mortgage-backed securities generally do not have a known
maturity. In the absence of a known maturity, market participants generally
refer to an estimated average life. An average life estimate is a function of an
assumption regarding anticipated prepayment patterns, based upon current
interest rates, current conditions in the relevant housing markets and other
factors. The assumption is necessarily subjective, and thus different market
participants can produce different average life estimates with regard to the
same security. There can be no assurance that estimated average life will be a
security's actual average life.

OBLIGATIONS OF SUPRANATIONAL AGENCIES

The Fixed Income Fund may purchase obligations of supranational agencies.
Currently, the Fund only intends to invest in obligations issued or guaranteed
by the Asian Development Bank, Inter-American Development Bank, International
Bank for Reconstruction and Development (World Bank), African Development Bank,
European Coal and Steel Community, European Economic Community, European
Investment Bank and Nordic Investment Bank.

OPTIONS

A put option on a security gives the purchaser of the option the right to sell,
and the writer of the option the obligation to buy, the underlying security at
any time during the option period. A call option on a security gives the
purchaser of the option the right to buy, and the writer of the option the
obligation to sell, the underlying security at any time during the option
period. The premium paid to the writer is the consideration for undertaking the
obligations under the option contract. The initial purchase (sale) of an option
contract is an "opening transaction." In order to close out an option position,
a Fund may enter into a "closing transaction," which is simply the sale
(purchase) of an option contract on the same security with the same exercise
price and expiration date as the option contract originally opened. If a Fund is
unable to effect a closing purchase transaction with respect to an option it has
written, it will not be able to sell the underlying security until the option
expires or the Fund delivers the security upon exercise.

A Fund may purchase put and call options to protect against a decline in the
market of the securities in its portfolio or to anticipate an increase in the
market of securities that the Fund may seek to purchase in the future. A Fund
purchasing put and call options pays a premium therefor. If price movements in
the underlying securities are such that exercise of the options would not be
profitable for a Fund, loss of the premium paid may be offset by an increase in
the value of the Fund's securities or by a decrease in the cost of acquisition
of securities by the Fund.

A Fund may write covered call options as a means of increasing its yield and as
a means of providing limited protection against decreases in its market value.
When a Fund sells

S-13

<PAGE>

an option, if the underlying securities do not increase or decrease to a price
level that would make the exercise of the option profitable to the holder
thereof, the option generally will expire without being exercised and the Fund
will realize as profit the premium received for such option. When a call option
written by a Fund is exercised, the Fund will be required to sell the underlying
securities to the option holder at the strike price, and will not participate in
any increase in the price of such securities above the strike price. When a put
option written by a Fund is exercised, the Fund will be required to purchase the
underlying securities at the strike price, which may be in excess of the market
value of such securities.

A Fund may purchase and write put and call options on foreign currencies (traded
on U.S. and foreign exchanges or over-the-counter markets) to manage its
exposure to exchange rates. Call options on foreign currency written by a Fund
will be "covered," which means that the Fund will own an equal amount of the
underlying foreign currency. With respect to put options on foreign currency
written by a Fund, the Fund will establish a segregated account with its
Custodian consisting of cash or liquid, high-grade debt securities in an amount
equal to the amount the Fund would be required to pay upon exercise of the put.

All options written on securities or indices must be covered. When a Fund writes
an option on an index or a security, it will establish a segregated account
containing cash or liquid securities with its custodian in an amount at least
equal to the market value of the option

S-14

<PAGE>

and will maintain the account while the option is open or will otherwise cover
the transaction.

PORTFOLIO TURNOVER

REITS

The Fixed Income and Small Cap Value Funds may invest in real estate investment
trusts ("REITs"), which pool investors' funds for investment in income-producing
commercial real estate or real-estate related loans or interests.

S-15

<PAGE>

subject to defaults by borrowers and to self-liquidations. In addition, the
performance of a REIT may be affected by its failure to qualify for tax-free
pass-through of income under the Code or its failure to maintain exemption from
registration under the 1940 Act.

REPURCHASE AGREEMENTS

Repurchase agreements are agreements by which a Fund obtains a security and
simultaneously commits to return the security to the seller (a member bank of
the Federal Reserve System or primary securities dealer as recognized by the
Federal Reserve Bank of New York) at an agreed-upon price (including principal
and interest) on an agreed-upon date within a number of days (usually not more
than seven) from the date of purchase. The resale price reflects the purchase
price plus an agreed-upon market rate of interest which is unrelated to the
coupon rate or maturity of the underlying security. A repurchase agreement
involves the obligation of the seller to pay the agreed-upon price, which
obligation is in effect secured by the value of the underlying security.

Repurchase agreements are considered to be loans by a Fund for purposes of its
investment limitations. The repurchase agreements entered into by a Fund will
provide that the underlying security at all times shall have a value at least
equal to 102% of the resale price stated in the agreement (the Adviser monitors
compliance with this requirement). Under all repurchase agreements entered into
by a Fund, the Trust's Custodian or its agent must take possession of the
underlying collateral. However, if the seller defaults, a Fund could realize a
loss on the sale of the underlying security to the extent that the proceeds of
sale, including accrued interest, are less than the resale price provided in the
agreement including interest. In addition, even though the Bankruptcy Code
provides protection for most repurchase agreements, if the seller should be
involved in bankruptcy or insolvency proceedings, a Fund may incur delay and
costs in selling the underlying security or may suffer a loss of principal and
interest if the Fund is treated as an unsecured creditor and is required to
return the underlying security to the seller's estate.

SECURITIES OF FOREIGN ISSUERS

The Fixed Income Fund may invest in U.S. dollar-denominated fixed income
securities of foreign issuers which are traded in the United States. In
addition, the Equity Fund may invest in ADRs. These instruments may subject the
Fund to investment risks that differ in some respects from those related to
investments in obligations of U.S. domestic issuers. Such risks include future
adverse political and economic developments, the possible imposition of
withholding taxes on interest or other income, possible seizure,
nationalization, or expropriation of foreign deposits, the possible
establishment of exchange controls or taxation at the source, greater
fluctuations in value due to changes in exchange rates, or the adoption of other
foreign governmental restrictions which might adversely affect the payment of
principal and interest on such obligations. Foreign issuers of securities or
obligations are often subject to accounting treatment and engage in business
practices different from those respecting domestic issuers of similar securities
or

S-16

<PAGE>

obligations. Foreign branches of U.S. banks and foreign banks may be subject to
less stringent reserve requirements than those applicable to domestic branches
of U.S. banks.

U.S. GOVERNMENT AGENCY OBLIGATIONS

Certain Federal agencies, such as the Government National Mortgage Association
("GNMA"), have been established as instrumentalities of the United States
Government to supervise and finance certain types of activities. Issues of these
agencies, while not direct obligations of the United States Government, are
either backed by the full faith and credit of the United States (e.g., GNMA
securities) or supported by the issuing agencies' right to borrow from the
Treasury. The issues of other agencies are supported by the credit of the
instrumentality (e.g., Fannie Mae securities).

U.S. GOVERNMENT SECURITIES

Bills, notes and bonds issued by the U.S. Government are securities backed by
the full faith and credit of the United States.

U.S. TREASURY OBLIGATIONS

Bills, notes and bonds issued by the U.S. Treasury, and separately-traded
interest and principal component parts of such obligations that are transferable
through the Federal book-entry system known as Separately Traded Registered
Interested and Principal Securities ("STRIPS") and Coupon Under Book Entry
Safekeeping ("CUBES") are some types of U.S. Treasury Securities.

VARIABLE OR FLOATING-RATE INSTRUMENTS

The Fixed Income Fund may invest in variable- or floating- rate instruments
which may involve a demand feature and may include variable-amount master demand
notes which may or may not be backed by bank letters of credit. The holder of an
instrument with a demand feature may tender the instrument back to the issuer at
par prior to maturity. A variable-amount master demand note is issued pursuant
to a written agreement between the issuer and the holder, its amount may be
increased by the holder or decreased by the holder or issuer, it is payable on
demand, and the rate of interest varies based upon an agreed formula. The
quality of the underlying credit must, in the opinion of the Adviser, be
equivalent to the long-term bond or commercial paper ratings applicable to
permitted investments for the Fixed Income Fund. The Adviser will monitor on an
ongoing basis the earnings power, cash flow and liquidity ratios of the issuers
of such instruments and will similarly monitor the ability of an issuer of a
demand instrument to pay principal and interest on demand.

S-17

<PAGE>

WARRANTS

Warrants are instruments giving holders the right, but not the obligation, to
buy equity or fixed income securities of a company at a given price during a
specified period.

WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES

When-issued or delayed delivery securities are subject to market fluctuations
due to changes in market interest rates, and it is possible that the market at
the time of settlement could be higher or lower than the purchase price if the
general level of interest rates has changed. Although a Fund generally purchases
securities on a when-issued or forward commitment basis with the intention of
actually acquiring securities for its investment portfolio, a Fund may dispose
of a when-issued security or forward commitment prior to settlement if it deems
appropriate.

YEAR 2000

The Trust depends on the smooth functioning of computer systems in almost every
aspect of its business. Like other mutual funds, businesses and individuals
around the world, the Trust could be adversely affected if the computer systems
used by its service providers do not properly process dates on and after January
1, 2000 and distinguish between the year 2000 and the year 1900. The Trust has
asked its service providers whether they expect to have their computer systems
adjusted for the year 2000 transition, and has received assurances from each
that its system is expected to accommodate the year 2000 without material
adverse consequences to the Trust. The Trust and its shareholders may experience
losses if these assurances prove to be incorrect or as a result of year 2000
computer difficulties experienced by issuers of portfolio securities or third
parties, such as custodians, banks, broker-dealers or others with which the
Trust does business.

ZERO COUPON SECURITIES

Zero coupon obligations are debt securities that do not bear any interest, but
instead are issued at a deep discount from par. The value of a zero coupon
obligation increases over time to reflect the interest accrued. Such obligations
will not result in the payment of interest until maturity, and will have greater
price volatility than similar securities that are issued at par and pay interest
periodically.

INVESTMENT LIMITATIONS

FUNDAMENTAL POLICIES

The following investment limitations (and those set forth in the Prospectus) are
fundamental policies of each Fund which cannot be changed with respect to a Fund

S-18

<PAGE>

without the consent of the holders of a majority of that Fund's outstanding
shares. The term "majority of the outstanding shares" means the vote of (i) 67%
or more of a Fund's shares present at a meeting, if more than 50% of the
outstanding shares of a Fund are present or represented by proxy, or (ii) more
than 50% of a Fund's outstanding shares, whichever is less.

No Fund may:

1. (i) Purchase securities of any issuer (except securities issued or
guaranteed by the United States Government, its agencies or
instrumentalities and repurchase agreements involving such securities)
if, as a result, more than 5% of the total assets of the Fund would be
invested in the securities of such issuer; or (ii) acquire more than
10% of the outstanding voting securities of any one issuer. This
restriction applies to 75% of each Fund's total assets.

2. Purchase any securities which would cause 25% or more of the total
assets of the Fund to be invested in the securities of one or more
issuers conducting their principal business activities in the same
industry, provided that this limitation does not apply to investments
in obligations issued or guaranteed by the U.S. Government or its
agencies and instrumentalities and repurchase agreements involving such
securities.

3. Borrow money in an amount exceeding 33 1/3% of the value of its total
assets, provided that, for purposes of this limitation, investment
strategies which either obligate the fund to purchase securities or
require a Fund to segregate assets are not considered to be borrowings.
Asset coverage of at least 300% is required for all borrowings, except
where a Fund has borrowed money for temporary purposes in amounts not
exceeding 5% of its total assets. A Fund will not purchase securities
while its borrowings exceed 5% of its total assets.

4. Make loans if, as a result, more than 33 1/3% of its total assets would
be lent to other parties, except that each Fund may (i) purchase or
hold debt instruments in accordance with its investment objective and
policies; (ii) enter into repurchase agreements; and (iii) lend its
securities.

5. Purchase or sell real estate, physical commodities, or commodities
contracts, except that each Fund may purchase (i) marketable securities
issued by companies which own or invest in real estate (including real
estate investment trusts), commodities, or commodities contracts; and
(ii) commodities contracts relating to financial instruments, such as
financial futures contracts and options on such contracts.

S-19

<PAGE>

6. Issue senior securities (as defined in the Investment Company Act of
1940 (the "1940 Act")) except as permitted by rule, regulation or order
of the Securities and Exchange Commission (the "SEC").

7. Act as an underwriter of securities of other issuers except as it may
be deemed an underwriter in selling a portfolio security.

8. Invest in interests in oil, gas, or other mineral exploration or
development programs and oil, gas or mineral leases.

NON-FUNDAMENTAL POLICIES

The following investment limitations are non-fundamental policies of each Fund
and may be changed with respect to a Fund by the Board of Trustees.

No Fund may:

1. Pledge, mortgage or hypothecate assets except to secure borrowings
permitted by the Fund's fundamental limitation on borrowing.

2. Invest in companies for the purpose of exercising control.

3. Purchase securities on margin or effect short sales, except that each
Fund may (i) obtain short-term credits as necessary for the clearance
of security transactions; (ii) provide initial and variation margin
payments in connection with transactions involving futures contracts
and options on such contracts; and (iii) make short sales "against the
box" or in compliance with the SEC's position regarding the asset
segregation requirements imposed by Section 18 of the 1940 Act.

4. Invest its assets in securities of any investment company, except as
permitted by the 1940 Act.

5. Purchase or hold illiquid securities, i.e., securities that cannot be
disposed of for their approximate carrying value in seven days or less
(which term includes repurchase agreements and time deposits maturing
in more than seven days) if, in the aggregate, more than 15% of its net
assets would be invested in illiquid securities.

In addition, each Fund will invest no more than 5% of its net assets in short
sales, unregistered securities, futures contracts, options and investment
company securities.

S-20

<PAGE>

THE ADVISER

Clover Capital Management, Inc. (the "Adviser"), 11 Tobey Village Office Park,
Pittsford, New York 14534, is a professional investment management firm founded
in 1984 by Michael Edward Jones, CFA, and Geoffrey Harold Rosenberger, CFA, who
are Managing Directors of the Adviser and who control all of the Adviser's
outstanding voting stock. As of September 30, 1998 the Adviser had discretionary
management authority with respect to approximately $1.9 billion of assets. In
addition to advising the Funds, the Adviser provides advisory services to
pension plans, religious and educational endowments, corporations, 401(k) plans,
profit sharing plans, individual investors and trusts and estates.

The Adviser serves as each Fund's investment adviser under an investment
advisory agreement (the "Advisory Agreement") with the Fund. Under the Advisory
Agreement, the Adviser makes the investment decisions for the assets of each
Fund and continuously reviews, supervises and administers each Fund's investment
program, subject to the supervision of, and policies established by, the
Trustees of the Fund.

S-21

<PAGE>

60 days' written notice to the Adviser, or by the Adviser on 90 days' written
notice to the Trust.

For the fiscal year ended October 31 1996, for the fiscal period ended September
30, 1997, and for the fiscal year ended September 30, 1998, the Funds paid (had
reimbursed) the following advisory fees:

Advisory Fees Paid Advisory Fees Waived
----------------------------------------- ----------------------------------------
1996 1997*** 1998 1996 1997*** 1998
-------- -------- ---------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Small Cap Value Fund $0 $0 $67,667 $14,442** $66,598** $71,495
Equity Value Fund $437,862 $642,434 $840,958 $73,383 $47,047 $25,280
Max Cap Value Fund * * $(121,203) * * $9,208
Fixed Income Fund $23,932 $35,551 $62,671 $53,322 $55,083 $68,554
</TABLE>

* Not in operation during the period.

**Does not include reimbursement of fees by the Adviser in the amount of $51,578
and $14,145 with respect to the Clover Capital Small Cap Value Portfolio for the
fiscal period of 1996 and 1997, respectively.

***On June 25, 1997, the Small Cap Value Fund, the Equity Value Fund, and the
Fixed Income Fund acquired the assets of the Clover Capital Small Cap Value,
Clover Capital Equity, and Clover Capital Fixed Income Portfolios, respectively,
of The Advisors' Inner Circle Fund.

THE ADMINISTRATOR

The continuance of the Administration Agreement must be specifically approved at
least annually (i) by the vote of a majority of the Trustees or by the vote of a
majority of the outstanding voting securities of the Fund, and (ii) by the vote
of a majority of the Trustees of the Trust who are not parties to the
Administration Agreement or an "interested person" (as that term is defined in
the 1940 Act) of any party thereto, cast in person at a meeting called for the
purpose of voting on such approval. The Administration Agreement is

S-22

<PAGE>

terminable at any time as to any Fund without penalty by the Trustees of the
Trust, by a vote of a majority of the outstanding shares of the Fund or by the
Manager on not less than 30 days' nor more than 60 days' written notice.

The Administrator, a Delaware business trust, has its principal business offices
at Oaks, Pennsylvania 19456. SEI Investments Management Corporation ("SIMC"), a
wholly-owned subsidiary of SEI Investments Company ("SEI Investments"), is the
owner of all beneficial interest in the Administrator. SEI Investments and its
subsidiaries and affiliates, including the Administrator, are leading providers
of funds evaluation services, trust accounting systems, and brokerage and
information services to financial institutions, institutional investors, and
money managers. The Administrator and its affiliates also serve as administrator
or sub-administrator to the following other mutual funds: The Achievement Funds
Trust, The Advisors' Inner Circle Fund, Alpha Select Funds, The Arbor Funds, ARK
Funds, Armada Funds, Bishop Street Funds, Boston 1784 Funds(R), CrestFunds,
Inc., CUFUND, The Expedition Funds, First American Funds, Inc., First American
Investment Funds, Inc., First American Strategy Funds, Inc., First American
Investment Funds, Inc., HighMark Funds, Huntington Funds, The Nevis Funds, Oak
Associates Funds, The PBHG Funds, Inc., PBHG Advisor Funds, Inc., PBHG Insurance
Series Fund, Inc., The Pillar Funds, Santa Barbara Group of Mutual Funds, Inc.,
SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Institutional Investments Trust, SEI Institutional International Trust, SEI
Institutional Managed Trust, SEI Liquid Asset Trust, STI Classic Funds, SEI Tax
Exempt Trust, and STI Classic Variable Trust.

For the fiscal year ended October 31, 1996, for the fiscal period ended
September 30, 1997, and for the fiscal year ended September 30, 1998, the Funds
paid the following administrative fees:

Administrative Fees Paid
-----------------------------------------------
1996 1997 1998
-------- -------- --------
<S> <C> <C> <C>
Small Cap Value Fund $33,606 $52,438 $75,000
Equity Value Fund $138,175 $159,591 $132,060
Max Cap Value Fund * * $68,013
Fixed Income Fund $50,022 $52,438 $75,000
</TABLE>

* Not in operation during the period.

**On June 25, 1997,the Small Cap Value Fund, the Equity Value Fund, and
the Fixed Income Fund acquired the assets of the Clover Capital Small
Cap Value, Clover Capital Equity Value, and Clover Capital Fixed Income
Portfolios, respectively, of The Advisors' Inner Circle Fund.

S-23

<PAGE>

THE DISTRIBUTOR

CCM Securities, Inc. (the "Distributor"), a wholly-owned subsidiary of CCM, and
the Trust are parties to a distribution agreement (the "Distribution
Agreement"). The Distributor receives no compensation for distribution of shares
of the Funds.

The Distribution Agreement shall remain in effect for a period of two years
after the effective date of the agreement and is renewable annually. The
Distribution Agreement may be terminated by the Distributor or by the Trust, by
a majority vote of the Trustees who are not interested persons and have no
financial interest in the Distribution Agreement or by a majority vote of the
outstanding securities of the Trust upon not more than 60 days' written notice
by either party or upon assignment by the Distributor.

TRUSTEES AND OFFICERS OF THE TRUST

The Trustees and Executive Officers of the Trust, their respective dates of
birth, and their principal occupations for the last five years are set forth
below. Each may have held other positions with named companies during that
period. Unless otherwise noted, the business address of each Trustee and each
Executive Officer as it relates to the Trust is SEI Investments Company, Oaks,
Pennsylvania 19456. Certain officers of the Trust also serve as officers of some
or all of the following: The Achievement Funds Trust, The Advisors' Inner Circle
Fund, Alpha Select Funds, The Arbor Fund, ARK Funds, Bishop Street Funds, Boston
1784 Funds(R), CrestFunds, Inc., CUFUND, The Expedition Funds, First American
Funds, Inc., First American Investment Funds, Inc., First American Strategy
Funds, Inc, HighMark Funds, Huntington Funds, The Nevis Fund, Oak Associate
Funds, The PBHG Funds, Inc., PBHG Advisor Funds, Inc., PBHG Insurance Series
Fund, Inc., The Pillar Funds, Santa Barbara Group of Mutual Funds, Inc., SEI
Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Institutional Investments Trust, SEI Institutional Managed Trust, SEI
Institutional International Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust,
STI Classic Funds, and STI Classic Variable Trust, each of which is an open-end
management investment company managed by SEI Investments Mutual Fund Services or
its affiliates and, except for Santa Barbara Group of Mutual Funds, Inc., are
distributed by SEI Investments Distribution Co.

ROBERT E. TURNER (DOB 11/26/56) - Trustee* - Chairman and Chief Investment
Officer of Turner Investment Partners, Inc., since 1990.

RICHARD A. HOCKER (DOB 07/21/46) - Trustee* - CEO and Chairman of the Board of
Covenant Bank, 1988-1997. Director of Bedminister Bioconversion Corporation,
since

S-24

<PAGE>

1988. Chief Investment Officer and Senior Vice President of Penn Capital
Management Co., Inc., since 1987.

MICHAEL E. JONES (DOB 12/24/54) - Trustee* - Senior Vice President, Investment
Adviser and Portfolio Manager with Clover Capital Management, Inc. (the
"Adviser"), since 1984. Principal of CCM Securities Inc.

ALFRED C. SALVATO (DOB 01/09/58) - Trustee** - Treasurer, Thomas Jefferson
University Health Care Pension Fund, since 1995, and Assistant Treasurer,
1988-1995.

JOHN T. WHOLIHAN (DOB 12/12/37) - Trustee** - Professor, Loyola Marymount
University, since 1984.

STEPHEN J. KNEELEY (DOB 02/09/63) - President and Chief Executive Officer -
Chief Operating Officer of Turner Investment Partners, Inc., since 1990.

JANET RADER ROTE (DOB 08/24/60) - Vice President and Assistant Secretary -
Director of Operations and Compliance of Turner Investment Partners, Inc., since
1992.

TODD B. CIPPERMAN (DOB 02/14/66) - Vice President and Assistant Secretary - Vice
President and Assistant Secretary of SEI, the Administrator since 1995.
Associate, Dewey Ballantine (law firm), 1994-1995. Associate, Winston and
Strawn, 1991-1994.

SANDRA K. ORLOW (DOB 10/18/53) - Vice President and Assistant Secretary - Vice
President and Assistant Secretary of the Administrator since 1988.

KEVIN P. ROBINS (DOB 04/15/61) - Vice President, Assistant Secretary - Senior
Vice President, General Counsel and Assistant Secretary of SEI, Senior Vice
President, General Counsel and Secretary of the Administrator since 1994. Vice
President and Assistant Secretary of SEI Investments, the Administrator
1992-1994. Associate, Morgan, Lewis & Bockius LLP, 1988-1992.

ROBERT DELLACROCE (DOB 12/17/63) - Controller and Chief Accounting Officer -
Director, Funds Administration and Accounting - Director, Funds Administration
and Accounting of SEI Investments since 1994. Senior Audit Manager, Arthur
Andersen LLP, 1986-1994.

LYDIA A. GAVALIS (DOB 06/05/64) - Vice President and Assistant Secretary - Vice
President and Assistant Secretary of the Administrator since 1998. Assistant
General Counsel and Director of Arbitration, Philadelphia Stock Exchange,
19889-1998.

S-25

<PAGE>

KATHY HEILIG (DOB 12/21/58) - Vice President and Assistant Secretary - Treasurer
of SEI Investments Company since 1997; Assistant Controller of SEI Investment
since 1995; Vice President of SEI Investments since 1991; Director of Taxes of
SEI Investments Company 1987 to 1991. Tax Manager, Arthur Anderson LLP prior to
1987.

JOSEPH M. O'DONNELL (DOB 11/13/54) - Vice President and Assistant Secretary -
Vice President and Assistant Secretary of the Administrator since 1998. Vice
President and General Counsel, FPS Services, Inc., 1993-1997. Staff Counsel and
Secretary, Provident Mutual Family of Funds, 1990-1993.

LYNDA J. STRIEGEL (DOB 10/30/48) - Vice President and Assistant Secretary of the
Administrator since 1998. Senior Asset Management counsel, Barnett Banks, Inc.
(1997- 1998). Partner, Groom and Nordberg, Chartered, 1996-1997. Associate
General Counsel, Riggs Bank N.A., 1991-1995.

JAMES W. JENNINGS (DOB 01/15/37) - Secretary - Partner, Morgan, Lewis & Bockius
LLP, Counsel to the Trust and the Administrator.

JOHN H. GRADY, JR. (DOB 06/01/61) - Assistant Secretary - 1701 Market Street,
Philadelphia, Pennsylvania 19103, Partner, Morgan, Lewis & Bockius LLP, Counsel
to the Trust and the Administrator.

EDWARD B. BAER (DOB 09/27/68) - Assistant Secretary - 1701 Market Street,
Philadelphia, Pennsylvania 19103, Associate, Morgan, Lewis & Bockius LLP,
Counsel to the Trust and the Administrator since 1995. Attorney, Aquila
Management Corporation, 1994.

--------------------------------------

The following table exhibits Trustee compensation for the fiscal year ended
September 30, 1998.

- ---------------------------------------------------------------------------------------------------------------------
Name of Person, Aggregate Pension or Estimated Total
Position Compensation Retirement Annual Benefits Compensation
From Registrant Benefits Accrued Upon From Registrant
for the Fiscal as Part of Fund Retirement and Fund
Year Ended Expenses Complex Paid to
September 30, Trustees for the
1998 Fiscal Year
Ended
September 30,
1998
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert Turner* $0 N/A N/A $0 for service on
two Boards
- ---------------------------------------------------------------------------------------------------------------------
Richard A. Hocker* $0 N/A N/A $0 for service on
one Board
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>

S-26

<PAGE>

- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Michael E. Jones* $0 N/A N/A $0 for service on
one Board
- ---------------------------------------------------------------------------------------------------------------------
Alfred C. Salvato** $8,000 N/A N/A $12,500 for
service on two
Boards
- ---------------------------------------------------------------------------------------------------------------------
Janet F. Sansone** $8,000 N/A N/A $8,000 for
service on one
Board
- ---------------------------------------------------------------------------------------------------------------------
John T. Wholihan** $10,233.87 N/A N/A $10,233.87 for
service on one
Board
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>

** Member of the Audit Committee.

The Trustees and Officers of the Trust own less than 1% of the outstanding
shares of the Trust.

COMPUTATION OF YIELD AND TOTAL RETURN

Yield = 2[((a-b)/cd + 1)6 - 1] where a = dividends and interest earned during
the period; b = expenses accrued for the period (net of reimbursement); c = the
current daily number of shares outstanding during the period that were entitled
to receive dividends; and d = the maximum offering price per share on the last
day of the period.

For the 30-day period ended September 30, 1998, yields were 0.09% for the Small
Cap Value Fund, 1.08% for the Equity Value Fund, 1.89% for the Max Cap Value
Fund, and 5.01% for the Fixed Income Fund.

S-27

<PAGE>

assuming that the entire investment is redeemed at the end of each period. In
particular, total return will be calculated according to the following formula:
P (1 + T)n = ERV, where P = a hypothetical initial payment of $1,000; T =
average annual total return; n = number of years; and ERV = ending redeemable ,
as of the end of the designated time period, of a hypothetical $1,000 payment
made at the beginning of the designated time period.

For the fiscal year ended September 30, 1998, and for the period from February
28, 1996, (commencement of operations) through September 30, 1998 the total
return of the Small Cap Value Fund was (21.25)%(+) and 9.74%, respectively. For
the fiscal year ended September 30, 1998, and for the period from December 6,
1991 (commencement of operations) through September 30, 1998, the total return
was (6.00)%(+) and 13.44% for the Equity Value Fund and 11.32%(+) and 8.40% for
the Fixed Income Fund, respectively. For the period from October 31, 1997
(commencement of operations) through September 30, 1998, the total return was
(6.52)%(++) for the Max Cap Value Fund.

- -----------------------
+ Returns are for the periods indicated and have not been annualized.
++ Cumulative since inception.

PURCHASE AND REDEMPTION OF SHARES

S-28

<PAGE>

DETERMINATION OF NET ASSET VALUE

The securities of each Fund are valued by the Administrator. The Administrator
may use an independent pricing service to obtain valuations of securities. The
pricing service relies primarily on prices of actual market transactions as well
as on trade quotations obtained from third parties. However, the pricing service
may use a matrix system to determine valuations of fixed income securities. This
system considers such factors as security prices, yields, maturities, call
features, ratings and developments relating to specific securities in arriving
at valuations. The procedures used by the pricing service and its valuations are
reviewed by the officers of the Trust under the general supervision of the
Trustees.

Securities with remaining maturities of 60 days or less will be valued
by the amortized cost method, which involves valuing a security at its cost on
the date of purchase and thereafter (absent unusual circumstances) assuming a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuations in general market rates of interest on the value of the
instrument. While this method provides certainty in valuation, it may result in
periods during which value, as determined by this method, is higher or lower
than the price the Trust would receive if it sold the instrument.

If there is no readily ascertainable market value for a security, the
Administrator will make a good faith determination as to the "fair value" of the
security.

TAXES

FEDERAL INCOME TAX

The following discussion of federal income tax consequences is based on the
Internal Revenue Code of 1986 (the "Code") and the regulations issued thereunder
as in effect on the date of this Statement of Additional Information. New
legislation, as well as administrative changes or court decisions, may
significantly change the conclusions expressed herein, and may have a
retroactive effect with respect to the transactions contemplated herein.

<PAGE>

In order to qualify for treatment as a RIC under the Code, each Fund must
distribute annually to its shareholders at least the sum of 90% of its net
interest income excludable from gross income plus 90% of its investment company
taxable income (generally, net investment income plus net short-term capital
gain) ("Distribution Requirement") and also must meet several additional
requirements. Among these requirements are the following: (i) at least 90% of
the Fund's gross income each taxable year must be derived from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock or securities, or certain other income (including
gains from options, futures or forward contracts); (ii) at the close of each
quarter of the Fund's taxable year, at least 50% of the value of its total
assets must be represented by cash and cash items, U.S. Government securities,
securities of other RICs and other securities, with such other securities
limited, in respect to any one issuer, to an amount that does not exceed 5% of
the of the Fund's assets and that does not represent more than 10% of the
outstanding voting securities of such issuer; and (iii) at the close of each
quarter of the Fund's taxable year, not more than 25% of the of its assets may
be invested in securities (other than U.S. Government securities or the
securities of other RICs) of any one issuer, or of two or more issuers which are
engaged in the same, similar or related trades or business if the Fund owns at
least 20% of the voting power of such issuer.

Notwithstanding the Distribution Requirement described above, which requires
only that the Fund distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital gain
(the excess of net long-term capital gain over net short-term capital loss),
each Fund will be subject to a nondeductible 4% federal excise tax to the extent
it fails to distribute by the end of any calendar year 98% of its ordinary
income for that year and 98% of its capital gain net income (the excess of
short- and long-term capital gains over short-and long-term capital losses) for
the one-year period ending on October 31 of that year, plus certain other
amounts.

Any gain or loss recognized on a sale, exchange or redemption of shares of a
Fund by a shareholder who is not a dealer in securities will generally, for
individual shareholders, be treated as a long-term capital gain or loss if the
shares have been held for more than twelve months, and otherwise will be treated
as short-term capital gain or loss. However, if shares on which a shareholder
has received a net capital gain distribution are subsequently sold, exchanged or
redeemed and such shares have been held for six months or less, any loss
recognized will be treated as a long-term capital loss to the extent of the net
capital gain distribution. Long-term capital gains are currently taxed at a
maximum rate of 20%, and short-term capital gains are currently taxed at
ordinary income tax rates.

S-30

<PAGE>

Internal Revenue Service, or (3) has not certified to that Fund that such
shareholder is not subject to backup withholding.

If any Fund fails to qualify as a RIC for any taxable year, it will be taxable
at regular corporate rates. In such an event, all distributions (including
capital gains distributions) will be taxable as ordinary dividends to the extent
of the Fund's current and accumulated earnings and profits, and such
distributions will generally be eligible for the corporate dividends-received
deduction.

Funds may, in certain circumstances involving tax-free reorganizations, accept
securities that are appropriate investments as payment for Fund shares (an
"In-Kind Purchase"). An In-Kind Purchase may result in adverse tax consequences
under certain circumstances to either the investors transferring securities for
shares (an "In-Kind Investors") or to investors who acquire shares of the Fund
after a transfer (Anew shareholders@). As a result of an In-Kind Purchase, the
Funds may acquire securities that have appreciated in value or depreciated in
value from the date they were acquired. If appreciated securities were to be
sold after an In-Kind Purchase, the amount of the gain would be taxable to new
shareholders as well as to In-Kind Investors. The effect of this for new
shareholders would be to tax them on a distribution that represents a return of
the purchase price of their shares rather than an increase in the value of their
investment. The effect on In-Kind Investors would be to reduce their potential
liability for tax on capital gains by spreading it over a larger asset base. The
opposite may occur if the Funds acquire securities having an unrealized capital
loss. In that case, In-Kind Investors will be unable to utilize the loss to
offset gains, but, because an In-Kind Purchase will not result in any gains, the
inability of In-Kind Investors to utilize unrealized losses will have no
immediate tax effect. For new shareholders, to the extent that unrealized losses
are realized by the Funds, new shareholders may benefit by any reduction in net
tax liability attributable to the losses. The Adviser cannot predict whether
securities acquired in any In-Kind Purchase will have unrealized gains or losses
on the date of the In-Kind Purchase. Consistent with its duties as investment
adviser, the Adviser will, however, take tax consequences to investors into
account when making decisions to sell portfolio assets, including the impact of
realized capital gains on shareholders of the Funds.

STATE TAXES

S-31

<PAGE>

PORTFOLIO TRANSACTIONS

The money market instruments in which the Funds invest are traded primarily in
the over-the-counter market. Bonds and debentures are usually traded
over-the-counter, but may be traded on an exchange. Where possible, the Adviser
will deal directly with the dealers who make a market in the securities involved
except in those circumstances where better prices and execution are available
elsewhere. Such dealers usually are acting as principal for their own account.
On occasion, securities may be purchased directly from the issuer. Money market
instruments are generally traded on a net basis and do not normally involve
either brokerage commissions or transfer taxes. The cost of executing portfolio
securities transactions of the Funds will primarily consist of dealer spreads
and underwriting commissions.

S-32

<PAGE>

Although it is not expected that the Funds will do so, the Funds may execute
brokerage or other agency transactions through the Distributor, which, although
a registered broker-dealer, is limited to the sale of shares of mutual funds,
for a commission in conformity with the 1940 Act, the Securities Exchange Act of
1934 and rules promulgated by the SEC. Under these provisions, an affiliated
distributor is permitted to receive and retain compensation for effecting
portfolio transactions for a Fund on an exchange if a written contract is in
effect between the Trust and an affiliated distributor
expressly permitting the distributor to receive and retain such compensation.
These rules further require that commissions paid to an affiliated distributor
by a Fund for exchange transactions not exceed "usual and customary" brokerage
commissions. The rules define "usual and customary" commissions to include
amounts which are "reasonable and fair compared to the commission, fee or other
remuneration received or to be received by other brokers in connection with
comparable transactions involving similar securities being purchased or sold on
a securities exchange during a comparable period of time." The Trustees,
including those who are not "interested persons" of the Trust, have adopted
procedures for evaluating the reasonableness of commissions paid to an
affiliated distributor, and will review these procedures periodically.

For the fiscal year ended October 31, 1996, the Clover Capital Equity Value
Portfolio paid SEI Investments Distribution Co.("SIDCO"), prior Distributor of
the Portfolios, brokerage commissions in the aggregate amount of $2,339.29. For
the fiscal year ended October 31, 1996, the commissions the Equity Value
Portfolio paid to SIDCO represented 2% of the aggregate brokerage commissions
which were paid on transactions that represented 62% of the aggregate dollar
amount of transactions that incurred commissions paid by that Portfolio during
such period. For the fiscal year ended October 31, 1996, the Clover Capital
Fixed Income Portfolio paid SIDCO brokerage commissions in the aggregate amount
of $225.03. For the fiscal year ended October 31, 1996, the commission the Fixed
Income Portfolio paid to SIDCO represented 100% of the aggregate brokerage
commissions which were paid on transactions that represented 100% of the
aggregate dollar amount of transactions that incurred commissions paid by the
Portfolio during such period.

For the fiscal year ended October 31, 1996, for the fiscal period ended
September 30, 1997, and for the fiscal year ended September 30, 1998, the Funds
paid aggregate brokerage commissions as follows:

S-33

<PAGE>

Fund 1996 1997 1998
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Small Cap Value Fund $22,829 $62,804 $66,282
- -----------------------------------------------------------------------------------------------------------
Equity Value Fund $152,253 $189,818 $212,062
- -----------------------------------------------------------------------------------------------------------
Max Cap Value Fund * * $4,519
- -----------------------------------------------------------------------------------------------------------
Fixed Income Fund $0 $0 $--
===========================================================================================================
</TABLE>

* Not in operation during the period.

Amounts designated as "--" are either $0 or have been rounded to $0.

The total amount of securities of the Broker/Dealer held by each Fund for the
fiscal year ended September 30, 1998, are as follows:

Total Amount of
Name of Securities Held by Each
Fund Broker/Dealer Fund Type of Security
- ---- ------------- ------------- ----------------
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Clover Small Cap Value Fund Morgan Stanley $ 868,000 Repurchase Agreement
- ------------------------------------------------------------------------------------------------------------------
Clover Equity Value Fund Morgan Stanley $ 10,279,000 Repurchase Agreement
- ------------------------------------------------------------------------------------------------------------------
Clover Max Cap Value Fund Morgan Stanley $ 93,000 Repurchase Agreement
- ------------------------------------------------------------------------------------------------------------------
Clover Fixed Income Fund Morgan Stanley $ 1,007,000 Repurchase Agreement
==================================================================================================================
</TABLE>

For the fiscal period ended September 30, 1997, and the fiscal year ended
September 30, 1998, the Funds' portfolio turnover rates were as follows:

Portfolio Turnover Rate
----------------------------------------
FUND 1998 1997
- ----------------------------------------------------------------------------
Small Cap Value Fund 70.02% 59.03%
- ----------------------------------------------------------------------------
Equity Value Fund 42.10% 51.64%
- ----------------------------------------------------------------------------
Max Cap Value Fund 62.71% *
- ----------------------------------------------------------------------------
Fixed Income Fund 27.07% 11.83%
============================================================================

* Not in operation during the period.

DESCRIPTION OF SHARES

Each share held entitles the Shareholder of record to one vote for each dollar
invested. In other words, each shareholder of record is entitled to one vote for
each dollar of net

S-34

<PAGE>

asset value of the shares held on the record date for the meeting. Shares issued
by each Fund have no preemptive, conversion, or subscription rights. Each whole
share shall be entitled to one vote and each fractional share shall be entitled
to a proportionate fractional vote. Each Fund, as a separate series of the
Trust, votes separately on matters affecting only that Fund. Voting rights are
not cumulative. Shareholders of each Class of each Fund will vote separately on
matters pertaining solely to that Fund or that Class. As a Delaware business
trust, the Trust is not required to hold annual meetings of Shareholders, but
approval will be sought for certain changes in the operation of the Trust and
for the election of Trustees under certain circumstances.

The Declaration of Trust authorizes the issuance of an unlimited number of
portfolios and shares of each portfolio. Each share of a portfolio represents an
equal proportion ate interest in that portfolio with each other share. Shares
are entitled upon liquidation to a pro rata share in the net assets of the
portfolio. Shareholders have no preemptive rights. All consideration received by
the Trust for shares of any portfolio and all assets in which such consideration
is invested would belong to that portfolio and would be subject to the
liabilities related thereto. Share certificates representing shares will not be
issued.

SHAREHOLDER LIABILITY

LIMITATION OF TRUSTEES' LIABILITY

The Declaration of Trust provides that a Trustee shall be liable only for his
own willful defaults and, if reasonable care has been exercised in the selection
of officers, agents,

S-35

<PAGE>

employees or investment advisers, shall not be liable for any neglect or
wrongdoing of any such person. The Declaration of Trust also provides that the
Trust will indemnify its Trustees and officers against liabilities and expenses
incurred in connection with actual or threatened litigation in which they may be
involved because of their offices with the Trust unless it is determined in the
manner provided in the Declaration of Trust that they have not acted in good
faith in the reasonable belief that their actions were in the best interests of
the Trust. However, nothing in the Declaration of Trust shall protect or
indemnify a Trustee against any liability for his willful misfeasance, bad
faith, gross negligence or reckless disregard of his duties.

5% SHAREHOLDERS

S-36

<PAGE>

FUND NAME AND ADDRESS OF NUMBER OF PERCENTAGE
BENEFICIAL OWNER SHARES OF FUND'S
SHARES
---- ------------------- ------------ -----------
<S> <C> <C> <C>
Clover Small Cap Clover Capital Management Inc. 107,807.7550 8.17%
Value Fund Employee 401K Savings &
Deferred Profit Sharing Plan
11 Tobey Village Office Park
Pittsford, NY 14534-1755

National Financial Services Corp. 73,611.2610 5.58%
for the Exclusive Benefit of our
Customers
Attn: Mutual Funds 5th Fl
100 Liberty St.
1 World Fin. Center
New York, NY 10281-1003

Clover Equity Value Wentworth-Douglass Hospital 314,771.4940 5.39%
Fund Attn: Rayna Feldman
789 Central Avenue
Dover, NH 03820-2589

Clover Max Cap Value Charles Schwab & Co., Inc. 41,426.9690 18.56%
Fund Attn: Mutual Funds/Team S
4500 Cherry Creek Dr. S Fl 3
Denver, CO 80209

SEI Trust Company Customer 20,168.2590 9.03%
IRA A/C Herbert N. Wright Dec
FBO Kathleen Wright
40 Lynacres Blvd.
Fayetteville, NY 13066-1033

Clover Capital Management Inc. 38,889.2250 17.42%
Employee 401K Savings &
Deferred Profit Sharing Plan
11 Tobey Village Office Park
Pittsford, NY 14534-1755

Joy Wegman 12,238.8690 5.48%
85 Knollwood Dr.
Rochester, NY 14618-3512

SEI Trust Company Customer 12,584.9940 5.64%
IRA R/O Paul D. Mahoney
27 Avon Rd.
Binghamton, NY 13905-4201
</TABLE>

S-37

<PAGE>

<S> <C> <C> <C>
Clover Fixed Income REHO & Co. 383,006.7230 11.29%
Fund C/O Manufacturers & Traders
TR Co.
P.O. Box 1377
Buffalo, NY 14240-1377

Charles Schwab & Co. Inc. 335,367.9790 9.88%
Attn: Mutual Funds/Team S
4500 Cherry Creek Dr. S Fl 3
Denver, CO 80209
</TABLE>

CUSTODIAN

LEGAL COUNSEL

Morgan, Lewis & Bockius LLP, serves as counsel to the Trust.

FINANCIAL STATEMENTS

S-38

<PAGE>

APPENDIX

The following descriptions are summaries of published ratings.

DESCRIPTION OF CORPORATE BOND RATINGS

Debt rated BB, B, CCC, CC and C is regarded as having predominately speculative
characteristics with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the least degree of
speculation and C the highest degree of speculation. While such debt will likely
have some quality and protective characteristics, these are outweighed by large
uncertainties of major risk exposures to adverse conditions.

The rating CI is reserved for income bonds on which no interest is being paid.

Debt rated D is in default, and payment of interest and/or repayment of
principal is in arrears.

A-1

<PAGE>

to lead to a weakened capacity to pay interest and repay principal for debt in
this category than in higher rated categories.

Bonds which are rated Ba are judged to have speculative elements; their future
cannot be considered as well-assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.

Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Bonds which are rated Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.

Bonds which are rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.

Bonds which are rated C are the lowest rated class of bonds and issues so rated
can be regarded as having extremely poor prospects of ever attaining any real
investment standing.

Fitch uses plus and minus signs with a rating symbol to indicate the relative
position of a credit within the rating category. Plus and minus signs, however,
are not used in the AAA category. Bonds rated AAA by Fitch are considered to be
investment grade and of the highest credit quality. The obligor has an
exceptionally strong ability to pay interest and repay principal, which is
unlikely to be affected by reasonably foreseeable events. Bonds rated AA by
Fitch are considered to be investment grade and of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable to foreseeable future developments,
short-term debt of these issuers is generally rated F-1+. Bonds rated A by Fitch
are considered to be investment grade and of high credit quality. The obligor's
ability to pay interest and repay principal is considered to be strong, but may
be more vulnerable to adverse changes in economic conditions and circumstances
than bonds with higher ratings. Bonds rated BBB by Fitch are considered to be
investment grade and of satisfactory credit quality. The obligor's ability to
pay interest and repay principal is considered to be adequate. Adverse changes
in economic conditions and circumstances, however, are more likely to have
adverse impact on these bonds, and therefore impair timely payment. The
likelihood that the ratings of these bonds will fall below investment grade is
higher than for bonds with higher ratings.

A-2

<PAGE>

DESCRIPTION OF COMMERCIAL PAPER RATINGS

Commercial paper rated A by Standard & Poor's Corporation ("S&P") is regarded by
S&P as having the greatest capacity for timely payment. Issues rated A are
further refined by use of the numbers 1, 1 +, and 2 to indicate the relative
degree of safety. Issues rated A-1+ are those with an "overwhelming degree" of
credit protection. Those rated A-1, the highest rating category, reflect a "very
strong" degree of safety regarding timely payment. Those rated A-2, the second
highest rating category, reflect a satisfactory degree of safety regarding
timely payment but not as high as A-1.

F-1+ (Exceptionally Strong) is the highest commercial paper rating Fitch
assigns; paper rated F-1+ is regarded as having the strongest degree of
assurance for timely payment. Paper rated F-1 (Very Strong) reflects an
assurance of timely payment only slightly less in degree than paper rated F-1+.
The rating F-2 (Good) reflects a satisfactory degree of assurance for timely
payment, but the margin of safety is not as great as for issues rated F-1+ or
F-1.

A-3

<PAGE>

A-4

<PAGE>

TIP FUNDS

PENN CAPITAL SELECT FINANCIAL SERVICES FUND
PENN CAPITAL STRATEGIC HIGH YIELD BOND FUND
PENN CAPITAL VALUE PLUS FUND

INVESTMENT ADVISER:
PENN CAPITAL MANAGEMENT COMPANY, INC.

This Statement of Additional Information is not a prospectus and relates only to
the Penn Capital Select Financial Services Fund (the "Select Financial Services
Fund"), Penn Capital Strategic High Yield Bond Fund (the "Strategic High Yield
Fund"), and Penn Capital Value Plus Fund (the "Value Plus Fund") (each a "Fund"
and, together, the "Funds"). It is intended to provide additional information
regarding the activities and operations of the TIP Funds (the "Trust"), and
should be read in conjunction with the Funds' Prospectuses dated January 31,
1999. The Prospectus may be obtained without charge by calling 1-800-224-6312.

TABLE OF CONTENTS

THE TRUST ..............................................................S-2
INVESTMENT OBJECTIVES...................................................S-3
INVESTMENT POLICIES.....................................................S-4
DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS...................S-8
INVESTMENT LIMITATIONS.................................................S-25
THE ADVISER............................................................S-27
THE ADMINISTRATOR......................................................S-28
DISTRIBUTION AND SHAREHOLDER SERVICING.................................S-30
TRUSTEES AND OFFICERS OF THE TRUST.....................................S-30
COMPUTATION OF YIELD AND TOTAL RETURN..................................S-33
PURCHASE AND REDEMPTION OF SHARES......................................S-34
DETERMINATION OF NET ASSET VALUE.......................................S-35
TAXES..................................................................S-35
PORTFOLIO TRANSACTIONS.................................................S-37
DESCRIPTION OF SHARES..................................................S-39
SHAREHOLDER LIABILITY..................................................S-40
LIMITATION OF TRUSTEES' LIABILITY......................................S-40
5% SHAREHOLDERS........................................................S-41
FINANCIAL INFORMATION..................................................S-42
APPENDIX................................................................A-1

January 31, 1999

S-1

<PAGE>

THE TRUST

This Statement of Additional Information relates only to the Penn Capital Select
Financial Services Fund (the "Select Financial Services Fund"), Penn Capital
Strategic High Yield Bond Fund (the "Strategic High Yield Fund") and Penn
Capital Value Plus Fund (the "Value Plus Fund") (each a "Fund" and, together,
the "Funds"). Each Fund is a separate, diversified series of the TIP Funds
(formerly, Turner Funds) (the "Trust"), an open-end management investment
company established as a Massachusetts business trust under a Declaration of
Trust dated January 26, 1996, and amended on February 21, 1997. It is
anticipated that on January 31, 1999, the High Yield Bond Fund will acquire all
of the assets and liabilities of the Alpha Select Penn Capital High Yield Bond
Fund. Historical information presented for those Funds relates to the Alpha
Select Funds. The Declaration of Trust permits the Trust to offer separate
series ("portfolios") of shares of beneficial interest ("shares"). Each
portfolio is a separate mutual fund, and each share of each portfolio represents
an equal proportionate interest in that portfolio. See "Description of Shares."
The Trust also offers shares of the Turner Ultra Large Cap Growth Fund, Turner
Growth Equity Fund, Turner Midcap Growth Fund, Turner Small Cap Growth Fund,
Turner Micro Cap Growth Fund, Turner Fixed Income Fund, Turner Short Duration
Government Funds-One Year, Turner Short Duration Government Funds-Three Year
Portfolio, TIP Target Select Equity Fund, Clover Max Cap Value Fund, Clover
Equity Value Fund, Clover Small Cap Value Fund, and Clover Fixed Income Fund.
Capitalized terms not defined herein are defined in the Prospectus offering
shares of the Funds.

INVESTMENT OBJECTIVES

PENN CAPITAL SELECT FINANCIAL SERVICES FUND -- The Select Financial Services
Fund seeks to generate long term capital appreciation.

PENN CAPITAL STRATEGIC HIGH YIELD BOND FUND -- The Strategic High Yield Fund
seeks to maximize income through high current yield and, as a secondary
objective, to produce above average capital appreciation.

PENN CAPITAL VALUE PLUS FUND -- The Value Plus Fund seeks to achieve capital
appreciation and above average income with less risk than the average risk of
the S&P 500 Index.

There can be no assurance that any Fund will achieve its investment objective.

S-2

<PAGE>

INVESTMENT POLICIES

PENN CAPITAL SELECT FINANCIAL SERVICES FUND

The Select Financial Services Fund invests primarily (and, under normal
conditions, at least 65% of its total assets) in the equity securities of
companies principally engaged in the banking industry and the financial services
sector. At least 25% (and up to 100%) of the Fund's total assets will be
invested in issuers in the banking industry. To the extent its investments are
concentrated in the banking industry, the Fund is subject to the risks
associated with that industry, including sensitivity to interest rate changes
and potentially adverse legislative and regulatory changes. Examples of
companies in the banking industry include commercial and industrial banks,
savings and loan associations and their holding companies. Examples of companies
in the financial services sector include investment advisers, brokerage
companies, insurance companies, real estate and leasing companies, and companies
that span across these segments.

Generally speaking, the Fund will hold a diversified portfolio of companies with
strong fundamentals, many of which Penn Capital Management Company, Inc. ("Penn
Capital") believes hold the potential to be acquired at a premium to their
trading prices, measured at the time of their original acquisition by the Fund
(takeover candidates). Any remaining assets may be invested in equity securities
and fixed income securities, warrants and rights to purchase common stocks, and
in ADRs. The Fund may also purchase shares of other investment companies and
foreign securities, and may purchase high yield, high risk securities (otherwise
known as "junk bonds") as a means of seeking to generate current income.

The Fund may invest in non-rated securities or in securities rated in the lowest
ratings categories established by the Standard & Poor's Corporation ("S&P")
and/or Moody's Investors Service, Inc. ("Moody's"). Securities rated below
investment grade will not constitute more than 15% of the Select Financial
Services Fund's total assets.

The Fund may invest in repurchase agreements, participate in a securities
lending program, which entails a risk of loss should a borrower fail
financially, and purchase Rule 144A securities.

The Fund may invest in certain instruments such as certain types of mortgage
securities and when-issued securities, and may, to a limited extent, borrow
money and utilize leveraging techniques. These investments and techniques, along
with certain transactions involving futures, options, forwards and swaps,
require the Fund to segregate some or all of its cash or liquid securities to
cover its obligations pursuant to such instruments or techniques. As asset
segregation reaches certain levels, the Fund may lose flexibility in managing
its investments properly, responding to shareholder redemption request, or
meeting other obligations and may be forced to sell other securities that it
wanted to retain or to realize unintended gains or losses.

S-3

<PAGE>

The Fund may also invest in federal, state and municipal government obligations,
investment grade corporate bonds, foreign securities, including emerging market
securities, zero coupon, pay-in-kind and deferred payment bonds, variable and
floating rate securities, money market instruments, shares of other investment
companies and cash equivalents, and may invest up to 20% of its assets in ADRs.

The Fund may, although it has no present intention to do so, invest a portion of
its assets in derivatives, including futures, options, forwards and swaps.
Futures contracts, options, options on futures contracts, forwards and swaps
entail certain costs and risks, including imperfect correlation between the
value of the securities held by the Fund and the value of the particular
derivative instrument, and the risk that the Fund could not close out a futures
or options position when it would be most advantageous to do so.

The Fund may invest up to 15% of its net assets in illiquid securities, and for
temporary defensive purposes, may invest up to 100% of its total assets in money
market instruments (including U.S. Government securities, bank obligations,
commercial paper rated in the highest rating category by a nationally recognized
statistical rating organization ("NRSRO")) and shares of money market investment
companies and may hold a portion of its assets in cash.

PENN CAPITAL STRATEGIC HIGH YIELD BOND FUND

The Strategic High Yield Fund invests primarily (and, under normal conditions,
at least 65% of its total assets) in a diversified portfolio of high yield
securities (otherwise known as "junk bonds"). Securities and other financial
instruments of issuers that may or may not be paying interest on a current basis
and that are currently experiencing financial difficulties including,
potentially, companies which are undergoing or are likely to undergo financial
restructuring or liquidation, both under and outside of Federal Bankruptcy Code
proceedings, are also included in the high yield universe and may be acquired by
the Fund. The Fund invests primarily in publicly traded securities, and, to a
lesser extent, privately placed restricted securities and other financial
instruments for which there is a more limited trading market.

The Adviser believes that the market for high yield securities is relatively
inefficient compared to other securities due to the limited availability of
information on such securities, the lack of extensive institutional research
coverage of and market making activity with respect to many issuers of such
securities, the complexity and difficulty of evaluation of such securities, and
the limited liquidity, at times, of such securities. The Adviser intends to
exploit these inefficiencies using its knowledge and experience in the high
yield market. The Adviser seeks to reduce risk through diversification, credit
analysis and attention to current developments and trends in both the economy
and financial markets.

The Fund will invest primarily in securities rated BB+ or Ba1 or lower by S&P
and/or Moody's, and may invest in non-rated securities and in securities rated
in the lowest

S-4

<PAGE>

rating category established by S&P and/or Moody's. Securities in the lowest
ratings categories may be in default. See Appendix A for a discussion of these
ratings. Any remaining assets may be invested in equity securities and
investment grade fixed income securities. In addition, the Fund may engage in
short sales against the box.

PENN CAPITAL VALUE PLUS FUND

The Value Plus Fund invests primarily (and, under normal conditions, at least
65% of its total assets) in a diversified portfolio of equity securities that
may or may not pay dividends but whose main contribution to total return is
intended from capital appreciation. The "value" equity securities the Fund will
purchase will tend to have a low price to earnings ratio relative to the
securities' market prices. The Fund will invest any remaining assets in
fixed-income securities, cash and money market instruments, and may invest up to
35% of its assets in high yield securities.

The Fund seeks to provide, through a combination of income and capital
appreciation, a total return consistent with a reasonable level of risk by
investing in value equity securities and in fixed income obligations, including
high yield securities. The Fund strives to secure a current yield appreciably
higher than the average dividend yield of the companies comprising the S&P 500
Index. Typically, portfolios with high current income also exhibit less
volatility and superior returns in down markets. The Fund actively seeks
opportunity and value in all parts of a company's capital structure, including
common and preferred stocks, as well as investment grade and high yield
corporate and convertible bonds. Typically, one-third of the Fund's assets will
be invested in large cap value equity securities (i.e., securities of issuers
with market capitalizations of over $1 billion), one third in small cap value
equity securities (i.e., securities of issuers with market capitalizations of
less than $1 billion) and one third in bonds (primarily high yield securities)
in order to generate interest income. The Fund's exposure to junk bonds will not
exceed 35% of its total assets.

The Fund will invest primarily in publicly-traded securities, yet will maintain
the right to purchase private securities for which there is a more limited
trading market. The Fund generally seeks diversity both in terms of industries
and issuers, but may invest relatively high proportions of its assets in a
single industry or issuer. The Fund will also from time to time invest in the
securities of companies engaged in an initial public offering.

The fixed income investments of the Fund consist primarily, but not exclusively,
of cash paying, high yield corporate bonds. The Fund may invest in non-rated
securities or in securities rated in the lowest ratings categories established
by S&P and/or Moody's. See Appendix A for a discussion of the these ratings.

The Fund may participate in a securities lending program, which entails a risk
of loss should a borrower fail financially. The Fund may purchase Rule 144A
securities. The Fund may invest in certain instruments such as certain types of
mortgage securities and when-issued securities, and may, to a limited extent,
borrow money and utilize leveraging

S-5

<PAGE>

techniques. These investments and techniques, along with certain transactions
involving futures, options, forwards and swaps, require a Fund to segregate some
or all of its cash or liquid securities to cover its obligations pursuant to
such instruments or techniques. As asset segregation reaches certain levels, the
Fund may lose flexibility in managing its investments properly, responding to
shareholder redemption request, or meeting other obligations and may be forced
to sell other securities that it wanted to retain or to realize unintended gains
or losses.

Investments in floating rate securities (floaters) and inverse floating rate
securities (inverse floaters) and mortgage-backed securities (mortgage
securities), including principal-only and interest-only stripped mortgage-backed
securities (SMBs), may be highly sensitive to interest rate changes, and highly
sensitive to the rate of principal payments (including prepayments on underlying
mortgage assets).

DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS

The following is a description of permitted investments for the Funds:

AMERICAN DEPOSITARY RECEIPTS ("ADRS")

S-6

<PAGE>

ASSET-BACKED SECURITIES

S-7

<PAGE>

BORROWING

The Funds may borrow money equal to 5% of their total assets for temporary
purposes to meet redemptions or to pay dividends. Borrowing may exaggerate
changes in the net asset value of a Fund's shares and in the return on the
Fund's portfolio. Although the principal of any borrowing will be fixed, a
Fund's assets may change in value during the time the borrowing is outstanding.
A Fund may be required to liquidate portfolio securities at a time when it would
be disadvantageous to do so in order to make payments with respect to any
borrowing. The Funds may be required to segregate liquid assets in an amount
sufficient to meet their obligations in connection with such borrowings. In
addition, the Strategic High Yield Fund may borrow to leverage its portfolio.
Such borrowings may take the form of a margin account or a conventional bank
borrowings in connection with securities purchases or interest rate arbitrage
transactions. In an interest rate arbitrage transaction, the Fund borrows money
at one interest rate and lends the proceeds at another, higher interest rate.
These transactions involve a number of risks, including the risk that the
borrower will fail or otherwise become insolvent or that there will be a
significant change in prevailing interest rates.

CONVERTIBLE SECURITIES

EQUITY SECURITIES

FIXED INCOME SECURITIES

S-8

<PAGE>

interest rates, the values of such securities generally decline. Moreover, while
securities with longer maturities tend to produce higher yields, the prices of
longer maturity securities are also subject to greater market fluctuations as a
result of changes in interest rates. Changes by recognized agencies in the
rating of any fixed income security and in the ability of an issuer to make
payments of interest and principal also affect the value of these investments.
Changes in the value of these securities will not necessarily affect cash income
derived from these securities, but will affect the investing Fund's net asset
value.

FORWARD FOREIGN CURRENCY CONTRACTS

A forward contract involves an obligation to purchase or sell a specific
currency amount at a future date, agreed upon by the parties, at a price set at
the time of the contract. A Fund may also enter into a contract to sell, for a
fixed amount of U.S. dollars or other appropriate currency, the amount of
foreign currency approximating the value of some or all of a Fund's securities
denominated in such foreign currency.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS

S-9

<PAGE>

of the contract and the price at which the futures contract is originally
struck. No physical delivery of the stocks or bonds comprising the Index is
made; generally contracts are closed out prior to the expiration date of the
contracts.

There are risks associated with these activities, including the following: (1)
the success of a hedging strategy may depend on an ability to predict movements
in the prices of individual securities, fluctuations in markets and movements in
interest rates; (2) there may be an imperfect or no correlation between the
changes in market value of the securities held by a Fund and the prices of
futures and options on futures; (3) there may not be a liquid secondary market
for a futures contract or option; (4) trading restrictions or limitations may be
imposed by an exchange; and (5) government regulations may restrict trading in
futures contracts and futures options.

S-10

<PAGE>

HIGH YIELD FOREIGN SOVEREIGN DEBT SECURITIES

Investing in fixed and floating rate high yield foreign sovereign debt
securities will expose the Strategic High Yield Fund to the direct or indirect
consequences of political, social or economic changes in the countries that
issue the securities. The ability and willingness of sovereign obligers in
developing and emerging market countries or the governmental authorities that
control repayment of their external debt to pay principal and interest on such
debt when due may depend on general economic and political conditions within the
relevant country. Countries such as those in which the Fund may invest have
historically experienced, and may continue to experience, high rates of
inflation, high interest rates, exchange rate or trade difficulties and extreme
poverty and unemployment. Many of these countries are also characterized by
political uncertainty or instability.

ILLIQUID SECURITIES

Illiquid securities are securities that cannot be disposed of within seven
business days at approximately the price at which they are being carried on a
Fund's books. Illiquid securities include demand instruments with demand notice
periods exceeding seven days, securities for which there is no active secondary
market, and repurchase agreements with durations or maturities over seven days
in length.

INVESTMENT COMPANY SHARES

Each Fund may invest in shares of other investment companies, to the extent
permitted by applicable law. These investment companies typically incur fees
that are separate from those fees incurred directly by the Fund. A Fund's
purchase of such investment company securities results in the layering of
expenses, such that shareholders would indirectly bear a proportionate share of
the operating expenses of such investment companies, including advisory fees, in
addition to paying Fund expenses. Under applicable regulations, a Fund is
prohibited from acquiring the securities of another investment company if, as a
result of such acquisition: (1) the Fund owns more than 3% of the total voting
stock of the other company; (2) securities issued by any one investment company
represent more than 5% of the Fund's total assets; or (3) securities (other than
treasury stock) issued by all investment companies represent more than 10% of
the total assets of the Fund. See also "Investment Limitations."

LEVERAGING

S-11

<PAGE>

from securities purchased with borrowed funds exceeds the interest that a Fund
will have to pay, the Fund's net income will be greater than if leveraging were
not used. Conversely, if the income from the assets retained with borrowed funds
is not sufficient to cover the cost of leveraging, the net income of the Fund
will be less than if leveraging were not used, and therefore the amount
available for distribution to stockholders as dividends will be reduced. Because
the SEC staff believes both reverse repurchase agreements and dollar roll
transactions are collateralized borrowings, the SEC staff believes that they
create leverage, which is a speculative factor. The requirement that such
transactions be fully collateralized by assets segregated by the Fund's
Custodian does impose a practical limit on the leverage created by such
transactions.

LOAN PARTICIPATIONS AND ASSIGNMENTS

Loan participations are interests in loans to corporations or governments which
are administered by the lending bank or agent for a syndicate member
("intermediary bank"). In a loan participation, the borrower will be deemed to
be the issuer of the participation interest, except to the extent the Strategic
High Yield Fund derives its rights from the intermediary bank. Because the
intermediary bank does not guarantee a loan participation in any way, a loan
participation is subject to the credit risks generally associated with the
underlying borrower. In the event of the bankruptcy or insolvency of the
borrower, a loan participation may be subject to certain defenses that can be
asserted by such borrower as a result of improper conduct by the intermediary
bank. In addition, in the event the underlying borrower fails to pay principal
and interest when due, the Fund may be subject to delays, expenses and risks
that are greater than those that would have been involved if the Fund had
purchased a direct obligation of such borrower. Under the terms of a loan
participation, the Fund may be regarded as a creditor of the intermediary bank
(rather than of the underlying borrower) so that the Fund may also be subject to
the risk that the intermediary bank may become insolvent.

Loan assignments are investments in assignments of all or a portion of certain
loans from third parties. When a Fund purchases assignments from lenders it will
acquire direct rights against the borrower on the loan. Since assignments are
arranged through private negotiations between potential assignees and assignors,
however, the rights and obligations acquired by the Fund may differ from, and be
more limited than, those held by the assigning lender. Loan participations and
assignments may be considered liquid, as determined by the Fund's adviser based
on criteria approved by the Board of Trustees.

LOWER-RATED SECURITIES

Lower-rated securities are lower-rated bonds commonly referred to as "junk
bonds" or high-yield securities. These securities are rated lower than Baa3 by
Moody's and/or lower than BBB- by S&P. The Funds may invest in securities rated
in the lowest ratings categories established by Moody's or by S&P. These ratings
indicate that the obligations are

S-12

<PAGE>

speculative and may be in default. In addition, the Funds may invest in unrated
securities of comparable quality subject to the restrictions stated in the
Funds' Prospectus.

CERTAIN RISK FACTORS RELATING TO HIGH-YIELD, HIGH-RISK SECURITIES

The descriptions below are intended to supplement the discussion in the
Prospectus.

GROWTH OF HIGH-YIELD, HIGH-RISK BOND MARKET

SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES

Lower rated bonds are somewhat sensitive to adverse economic changes and
corporate developments. During an economic down turn or substantial period of
rising interest rates, highly leveraged issuers may experience financial stress
that would adversely affect their ability to service their principal and
interest payment obligations, to meet projected business goals, and to obtain
additional financing. If the issuer of a bond defaulted on its obligations to
pay interest or principal or entered into bankruptcy proceedings, the Funds may
incur losses or expenses in seeking recovery of amounts owed to it. In addition,
periods of economic uncertainty and change can be expected to result in
increased volatility of market prices of high-yield bonds and the Funds' net
asset values.

PAYMENT EXPECTATIONS

S-13

<PAGE>

LIQUIDITY AND VALUATION

TAXES

MONEY MARKET INSTRUMENTS

MORTGAGE- AND ASSET-BACKED SECURITIES

The Funds may invest in mortgage-backed securities and asset-backed securities.
Two principal types of mortgage-backed securities are collateralized mortgage
obligations ("CMOs") and real estate mortgage investment conduits ("REMICs"),
which are rated in one of the top two categories by S&P or Moody's. CMOs are
securities collateralized by mortgages, mortgage pass-throughs, mortgage
pay-through bonds (bonds representing an interest in a pool of mortgages where
the cash flow generated from the mortgage collateral pool is dedicated to bond
repayment), and mortgage-backed bonds (general obligations of the issuers
payable out of the issuers' general funds and additionally secured by a first
lien on a pool of single family detached properties). CMOs typically are issued
with a number of classes or series which have different maturities and which are
retired using cash flow from underlying collateral according to a specified
plan.

S-14

<PAGE>

Investors purchasing such CMOs in the shortest maturities receive or are
credited with their pro rata portion of the scheduled payments of interest and
principal on the underlying mortgages plus all unscheduled prepayments of
principal up to a predetermined portion of the total CMO obligation. Until that
portion of such CMO obligation is repaid, investors in the longer maturities
receive interest only. Accordingly, the CMOs in the longer maturity series are
less likely than other mortgage pass-throughs to be prepaid prior to their
stated maturity. Although some of the mortgages underlying CMOs may be supported
by various types of insurance, and some CMOs may be backed by GNMA certificates
or other mortgage pass-throughs issued or guaranteed by U.S. Government agencies
or instrumentalities, the CMOs themselves are not generally guaranteed.

REMICs, which were authorized under the Tax Reform Act of 1986, are private
entities formed for the purpose of holding a fixed pool of mortgages secured by
an interest in real property. REMICs are similar to CMOs in that they issue
multiple classes of securities.

In addition to mortgage-backed securities, the Funds may invest in securities
secured by asset-backed securities including company receivables, truck and auto
loans, leases, and credit card receivables. These issues may be traded
over-the-counter and typically have a short-intermediate maturity structure
depending on the paydown characteristics of the underlying financial assets
which are passed through to the security holder.

PORTFOLIO TURNOVER

An annual portfolio turnover rate in excess of 100% may result from the
Adviser's investment strategy or from prevailing market conditions. Portfolio
turnover rates in excess of 100% may result in higher transaction costs,
including increased brokerage commissions, and higher levels of taxable capital
gain.

S-15

<PAGE>

OBLIGATIONS OF SUPRANATIONAL AGENCIES

The Funds may purchase obligations of supranational agencies. Currently, the
Funds only intend to invest in obligations issued or guaranteed by the Asian
Development Bank, Inter-American Development Bank, International Bank for
Reconstruction and Development (World Bank), African Development Bank, European
Coal and Steel Community, European Economic Community, European Investment Bank
and Nordic Investment Bank.

OPTIONS

A Fund may write covered call options as a means of increasing the yield on its
fund and as a means of providing limited protection against decreases in its
market value. When a Fund sells an option, if the underlying securities do not
increase or decrease to a price level that would make the exercise of the option
profitable to the holder thereof, the option generally will expire without being
exercised and the Fund will realized as profit the premium received for such
option. When a call option written by a Fund is exercised, the Fund will be
required to sell the underlying securities to the option holder at the strike
price, and will not participate in any increase in the price of such securities
above the strike price. When a put option written by a Fund is exercised, the
Fund will be required to purchase the underlying securities at the strike price,
which may be in excess of the market value of such securities.

S-16

<PAGE>

entail the risk of non-performance by the dealer. OTC options are available for
a greater variety of securities and for a wider range of expiration dates and
exercise prices than are available for exchange-traded options. Because OTC
options are not traded on an exchange, pricing is done normally by reference to
information from a market maker. It is the position of the SEC that OTC options
are generally illiquid.

A Fund may purchase and write put and call options on foreign currencies (traded
on U.S. and foreign exchanges or over-the-counter markets) to manage its
exposure to exchange rates. Call options on foreign currency written by a Fund
will be "covered," which means that the Fund will own an equal amount of the
underlying foreign currency. With respect to put options on foreign currency
written by a Fund, the Fund will establish a segregated account with its
Custodian consisting of cash or liquid securities in an amount equal to the
amount the Fund would be required to pay upon exercise of the put.

S-17

<PAGE>

REITS

The Funds may invest in real estate investment trusts ("REITs"), which pool
investors' funds for investment in income producing commercial real estate or
real estate related loans or interests.

A REIT is not taxed on income distributed to its shareholders or unitholders if
it complies with regulatory requirements relating to its organization,
ownership, assets and income, and with a regulatory requirement that it
distribute to its shareholders or unitholders at least 95% of its taxable income
for each taxable year. Generally, REITs can be classified as Equity REITs,
Mortgage REITs and Hybrid REITs. Equity REITs invest the majority of their
assets directly in real property and derive their income primarily from rents
and capital gains from appreciation realized through property sales. Mortgage
REITs invest the majority of their assets in real estate mortgages and derive
their income primarily from interest payments. Hybrid REITs combine the
characteristics of both Equity and Mortgage REITs. Shareholders in the Funds
should realize that by investing in REITs indirectly through the Funds, he or
she will bear not only his or her proportionate share of the expenses of the
Fund, but also indirectly, similar expenses of underlying REITs.

A Fund may be subject to certain risks associated with the direct investments of
the REITs. REITs may be affected by changes in the value of their underlying
properties and by defaults by borrowers or tenants. Mortgage REITs may be
affected by the quality of the credit extended. Furthermore, REITs are dependent
on specialized management skills. Some REITs may have limited diversification
and may be subject to risks inherent in financing a limited number of
properties. REITs depend generally on their ability to generate cash flow to
make distributions to shareholders or unitholders, and may be subject to
defaults by borrowers and to self-liquidations. In addition, the performance of
a REIT may be affected by its failure to qualify for tax-free pass-through of
income under the Code or its failure to maintain exemption from registration
under the 1940 Act.

REPURCHASE AGREEMENTS

Repurchase agreements are agreements by which a Fund obtains a security and
simultaneously commits to return the security to the seller (a member bank of
the Federal Reserve System or primary securities dealer as recognized by the
Federal Reserve Bank of New York) at an agreed upon price (including principal
and interest) on an agreed upon date within a number of days (usually not more
than seven) from the date of purchase. The resale price reflects the purchase
price plus an agreed upon market rate of interest which is unrelated to the
coupon rate or maturity of the underlying security. A repurchase agreement
involves the obligation of the seller to pay the agreed upon price, which
obligation is in effect secured by the value of the underlying security.

S-18

<PAGE>

requirement). Under all repurchase agreements entered into by a Fund, the
Trust's Custodian or its agent must take actual or constructive possession of
the underlying collateral. However, if the seller defaults, a Fund could realize
a loss on the sale of the underlying security to the extent that the proceeds of
sale, including accrued interest, are less than the resale price provided in the
agreement including interest. In addition, even though the Bankruptcy Code
provides protection for most repurchase agreements, if the seller should be
involved in bankruptcy or insolvency proceedings, a Fund may incur delay and
costs in selling the underlying security or may suffer a loss of principal and
interest if the Fund is treated as an unsecured creditor and is required to
return the underlying security to the seller's estate.

RULE 144A SECURITIES

Rule 144A securities are securities exempt from registration on resale pursuant
to Rule 144A under the 1933 Act. Rule 144A securities are traded in the
institutional market pursuant to this registration exemption, and, as a result,
may not be as liquid as exchange-traded securities since they may only be resold
to certain qualified institutional investors. Due to the relatively limited size
of this institutional market, these securities may affect a Fund's liquidity to
the extent that qualified institutional buyers become, for a time, uninterested
in purchasing such securities. Nevertheless, Rule 144A securities may be treated
as liquid securities pursuant to guidelines adopted by the Trust's Board of
Trustees.

SECURITIES LENDING

In order to generate additional income, a Fund may lend securities which it owns
pursuant to agreements requiring that the loan be continuously secured by
collateral consisting of cash or securities of the U.S. Government or its
agencies equal to at least 100% of the market value of the loaned securities. A
Fund continues to receive interest on the loaned securities while simultaneously
earning interest on the investment of cash collateral. Collateral is marked to
market daily. There may be risks of delay in recovery of the securities or even
loss of rights in the collateral should the borrower of the securities fail
financially or become insolvent.

SECURITIES OF FOREIGN ISSUERS

The Funds may invest in securities of foreign issuers. In addition, the Funds
may invest in American Depositary Receipts. These instruments may subject a Fund
to investment risks that differ in some respects from those related to
investments in obligations of U.S. domestic issuers. These include risks of
adverse political and economic developments (including possible governmental
seizure or nationalization of assets), the possible imposition of exchange
controls or other governmental restrictions, less uniformity in accounting and
reporting requirements, the possibility that there will be less information on
such securities and their issuers available to the public, the difficulty of
obtaining or enforcing court judgments abroad, restrictions on foreign
investments in other jurisdictions,

S-19

<PAGE>

difficulties in effecting repatriation of capital invested abroad and
difficulties in transaction settlements and the effect of delay on shareholder
equity. Foreign securities may be subject to foreign taxes, and may be less
marketable than comparable U.S. securities. The value of a Fund's investments
denominated in foreign currencies will depend on the relative strengths of those
currencies and the U.S. dollars, and the Fund may be affected favorably or
unfavorably by changes in the exchange rates or exchange control regulations
between foreign currencies and the U.S. dollar. Changes in foreign currency
exchange rates also may affect the value of dividends and interest earned, gains
and losses realized on the sale of securities and net investment income and
gains if any, to be distributed to shareholders by a Fund. Foreign branches of
U.S. banks and foreign banks may be subject to less stringent reserve
requirements than those applicable to domestic branches of U.S. banks.
Furthermore, emerging market countries may have less stable political
environments than more developed countries. Also, it may be more difficult to
obtain a judgment in a court outside the United States.

SHORT SALES

A short sale is "against the box" if at all times during which the short
position is open, the Fund owns at least an equal amount of the securities or
securities convertible into, or exchangeable without further consideration for,
securities of the same issue as the securities that are sold short.

SWAPS, CAPS, FLOORS AND COLLARS

In a typical interest rate swap, one party agrees to make regular payments equal
to a floating interest rate times a "notional principal amount," in return for
payments equal to a fixed rate times the same amount, for a specific period of
time. If a swap agreement provides for payment in different currencies, the
parties might agree to exchange the notional principal amount as well. Swaps may
also depend on other prices or rates, such as the value of an index or mortgage
prepayment rates.

In a typical cap or floor agreement, the buyer of an interest rate cap obtains
the right to receive payments to the extent that a specific interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate falls
below an agreed-upon level. An interest rate collar combines elements of buying
a cap and selling a floor. In swap agreements, if a Fund agrees to exchange
payments in dollars for payments in foreign currency, the swap agreement would
tend to decrease the Fund's exposure to U.S. interest rates and increase its
exposure to foreign currency and interest rates. Caps and floors have an effect
similar to buying or writing options. Depending on how they are used, swap
agreements may increase or decrease the overall volatility of a Fund's
investment and their share price and yield.

S-20

<PAGE>

Swap agreements are sophisticated hedging instruments that typically involve a
small investment of cash relative to the magnitude of risk assumed. As a result,
swaps can be highly volatile and have a considerable impact on a Fund's
performance.

Swap agreements are subject to risks related to the counterparty's ability to
perform, and may decline in value if the counterparty's creditworthiness
deteriorates. A Fund may also suffer losses if it is unable to terminate
outstanding swap agreements or reduce its exposure through offsetting
transactions. Any obligation a Fund may have under these types of arrangements
will be covered by setting aside cash or liquid securities in a segregated
account. A Fund will enter into swaps only with counterparties believed to be
creditworthy.

VARIABLE AND FLOATING RATE INSTRUMENTS

U.S. GOVERNMENT AGENCY OBLIGATIONS

U.S. GOVERNMENT SECURITIES

Bills, notes and bonds issued by the U.S. Government and are securities backed
by the full faith and credit of the United States.

U.S. TREASURY OBLIGATIONS

S-21

<PAGE>

Securities ("STRIPS") and Coupon Under Book Entry Safekeeping ("CUBES") are same
types of U.S. Treasury securities.

U.S. TREASURY RECEIPTS

U.S. Treasury receipts are interests in separately traded interest and principal
component parts of U.S. Treasury obligations that are issued by banks or
brokerage firms and are created by depositing U.S. Treasury obligations into a
special account at a custodian bank. The custodian holds the interest and
principal payments for the benefit of the registered owners of the certificates
of receipts. The custodian arranges for the issuance of the certificates or
receipts evidencing ownership and maintains the register.

VARIABLE OR FLOATING RATE INSTRUMENTS

The Funds may invest in variable or floating rate instruments which may involve
a demand feature and may include variable amount master demand notes which may
or may not be backed by bank letters of credit. Such instruments bear interest
at rates which are not fixed, but which vary with changes in specified market
rates or indices. The interest rates on these securities may be reset daily,
weekly, quarterly or some other reset period, and may have a floor or ceiling on
interest rate changes. There is a risk that the current interest rate on such
obligations may not accurately reflect existing market interest rates. A demand
instrument with a demand notice exceeding seven days may be considered illiquid
if there is no secondary market for such security.

The holder of an instrument with a demand feature may tender the instrument back
to the issuer at par prior to maturity. A variable amount master demand note is
issued pursuant to a written agreement between the issuer and the holder, its
amount may be increased by the holder or decreased by the holder or issuer, it
is payable on demand, and the rate of interest varies based upon an agreed
formula. The quality of the underlying credit must, in the opinion of the
Adviser, be equivalent to the long-term bond or commercial paper ratings
applicable to permitted investments for the Funds. The Adviser will monitor on
an ongoing basis the earnings power, cash flow and liquidity ratios of the
issuers of such instruments and will similarly monitor the ability of an issuer
of a demand instrument to pay principal and interest on demand.

WARRANTS

Warrants are instruments giving holders the right, but not the obligation, to
buy equity or fixed income securities of a company at a given price during a
specified period.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES

When-issued or delayed delivery transactions involve the purchase of an
instrument with payment and delivery taking place in the future. Delivery of and
payment for these

S-22

<PAGE>

securities may occur a month or more after the date of the purchase commitment.
The Fund will maintain with the Custodian a separate account with liquid
securities or cash in an amount at least equal to these commitments. The
interest rate realized on these securities is fixed as of the purchase date, and
no interest accrues to a Fund before settlement.

YEAR 2000

The Trust depends on the smooth functioning of computer systems in almost every
aspect of its business. Like other mutual funds, businesses and individuals
around the world, the Trust could be adversely affected if the computer systems
used by its service providers do not properly process dates on and after January
1, 2000 and distinguish between the year 2000 and the year 1900. The Trust has
asked its service providers whether they expect to have their computer systems
adjusted for the year 2000 transition, and received assurances from each that
its system is expected to accommodate the year 2000 without material adverse
consequences to the Trust. The Trust and its shareholders may experience losses
if these assurances prove to be incorrect or as a result of year 2000 computer
difficulties experienced by issuers of portfolio securities or third parties,
such as custodians, banks, broker-dealers or others with which the Trust does
business.

ZERO COUPON, PAY-IN-KIND AND DEFERRED PAYMENT SECURITIES

Zero coupon obligations are debt securities that do not bear any interest, but
instead are issued at a deep discount from par. The value of a zero coupon
obligation increases over time to reflect the interest accredited. Upon
maturity, the holder is entitled to receive the par value of the security. While
interest payments are not made on such securities, holders of such securities
are deemed to have received "phantom income" annually. Because a Fund will
distribute its "phantom income" to shareholders, to the extent that shareholders
elect to receive dividends in cash rather than reinvesting such dividends in
additional shares, a Fund will have fewer assets with which to purchase income
producing securities. In the event of adverse market conditions, zero coupon,
pay-in-kind and deferred payment securities may be subject to greater
fluctuations in value and may be less liquid than comparably rated securities
paying cash interest at regular interest payment periods.

S-23

<PAGE>

INVESTMENT LIMITATIONS

FUNDAMENTAL POLICIES

The following investment limitations (and those set forth in the Prospectus) are
fundamental policies of each Fund which cannot be changed with respect to a Fund
without the consent of the holders of a majority of that Fund's outstanding
shares. The term "majority of the outstanding shares" means the vote of (i) 67%
or more of a Fund's shares present at a meeting, if more than 50% of the
outstanding shares of the Fund are present or represented by proxy, or (ii) more
than 50% of the Fund's outstanding shares, whichever is less.

No Fund may:

2. Purchase any securities which would cause 25% or more of the total
assets of the Fund to be invested in the securities of one or more
issuers conducting their principal business activities in the same
industry. This limitation does not apply to obligations issued or
guaranteed by the U.S. Government or its agencies and instrumentalities
and repurchase agreements involving such securities.

3. Borrow money in an amount exceeding 33 1/3% of the value of its total
assets, provided that, for purposes of this limitation, investment
strategies which either obligate a Fund to purchase securities or
require the Fund to segregate assets are not considered to be
borrowings. Asset coverage of at least 300% is required for all
borrowings, except where the Fund has borrowed money for temporary
purposes in amounts not exceeding 5% of its total assets. The Fund will
not purchase securities while its borrowings exceed 5% of its total
assets.

4. Make loans if, as a result, more than 33 1/3% of its total assets would
be lent to other parties, except that each Fund may (i) purchase or
hold debt instruments in accordance with its investment objective and
policies; (ii) enter into repurchase agreements; and (iii) lend its
securities.

S-24

<PAGE>

financial instruments, such as financial futures contracts and options
on such contracts.

6. Issue senior securities (as defined in the Investment Company Act of
1940 (the "1940 Act")) except as permitted by rule, regulation or order
of the Securities and Exchange Commission (the "SEC").

7. Act as an underwriter of securities of other issuers except as it may
be deemed an underwriter in selling a portfolio security.

8. Invest in interests in oil, gas, or other mineral exploration or
development programs and oil, gas or mineral leases.

The foregoing percentages will apply at the time of the purchase of a security
and shall not be considered violated unless an excess or deficiency occurs
immediately after or as a result of a purchase of such security.

NON-FUNDAMENTAL POLICIES

The following investment limitations are non-fundamental policies of each Fund
and may be changed with respect to a Fund by the Board of Trustees.

No Fund may:

1. Pledge, mortgage or hypothecate assets except to secure borrowings
permitted by the Fund's fundamental limitation on borrowing.

2. Invest in companies for the purpose of exercising control.

3. Purchase securities on margin or effect short sales, except that each
Fund may (i) obtain short-term credits as necessary for the clearance
of security transactions; (ii) provide initial and variation margin
payments in connection with transactions involving futures contracts
and options on such contracts; and (iii) make short sales "against the
box" or in compliance with the SEC's position regarding the asset
segregation requirements imposed by Section 18 of the 1940 Act.
Notwithstanding the foregoing, the Strategic High Yield Fund may
purchase securities on margin in accordance with the investment
policies in this SAI.

4. Invest its assets in securities of any investment company, except as
permitted by the 1940 Act.

S-25

<PAGE>

the aggregate, more than 15% of its net assets would be invested in
illiquid securities.

Unregistered securities sold in reliance on the exemption from registration in
Section 4(2) of the 1933 Act and securities exempt from registration on re-sale
pursuant to Rule 144A of the 1933 Act may be treated as liquid securities under
procedures adopted by the Board of Trustees. Rule 144A securities are securities
that are traded in the institutional market pursuant to an exemption from
registration. Rule 144A securities may not be as liquid as exchange-traded
securities since they may only be resold to certain qualified institutional
buyers.

THE ADVISER

Penn Capital Management Company, Inc. ("Penn Capital" or the "Adviser"), 52
Haddonfield-Berlin Road, Suite 1000, Cherry Hill, New Jersey 08034, is a
professional investment management firm founded in 1987 and registered as an
investment adviser nder the Investment Advisers Act. Richard A. Hocker is a
founding partner and Chief Investment Officer of the Adviser, an investment
management firm that manages the investment portfolios of institutions and high
net worth individuals and which currently has assets under management of
approximately $374 million. The Adviser employs a staff of 17 and manages monies
in a variety of investment styles through either separate account management or
one of its private investment funds.

The Adviser serves as the investment adviser for the Fund under an investment
advisory agreement (the "Advisory Agreement"). Under the Advisory Agreement, the
Adviser makes the investment decisions for the assets of the Fund and
continuously reviews, supervises and administers the Fund's investment programs,
subject to the supervision of, and policies established by, the Trustees of the
Trust.

The Advisory Agreement provides that the Adviser shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in carrying out its duties, but shall not
be protected against any liability to the Trust or its shareholders by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard of its obligations or
duties thereunder (except as provided under provisions of applicable law).

The Advisory Agreement provides that if, for any fiscal year, the ratio of
expenses of any Fund (including amounts payable to the Adviser but excluding
interest, taxes, brokerage, litigation, and other extraordinary expenses)
exceeds applicable limitations, the Adviser will bear the amount of such excess.
The Adviser will not be required to bear expenses of any Fund to an extent which
would result in the Fund's inability to qualify as a regulated investment
company under provisions of the Internal Revenue Code of 1986, as amended (the
"Code").

S-26

<PAGE>

For the fiscal years ended September 30, 1996, 1997, and 1998, the Funds paid
(had reimbursed) the following advisory fees:

Advisory Fees Paid Advisory Fees Waived
--------------------------------------- ----------------------------------
1996 1997 1998 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Penn Capital ** ** $ 6,305(1) ** ** $(131,214)(1)
Select Financial
Services Fund
Penn Capital ** ** $39,982(2) ** ** $ (61,917)(2)
Strategic High
Yield Bond Fund
Penn Capital ** ** ** ** ** **
Value Plus Fund

</TABLE>

**Not in operation during the period.
(1) Commenced operations on October 20, 1997.
(2) Commenced operations on March 1, 1998.

THE ADMINISTRATOR

The continuance of the Administration Agreement must be specifically approved at
least annually (i) by the vote of a majority of the Trustees or by the vote of a
majority of the

S-27

<PAGE>

outstanding voting securities of the Fund, and (ii) by the vote of a majority of
the Trustees of the Trust who are not parties to the Administration Agreement or
an "interested person" (as that term is defined in the 1940 Act) of any party
thereto, cast in person at a meeting called for the purpose of voting on such
approval. The Administration Agreement is terminable at any time as to any Fund
without penalty by the Trustees of the Trust, by a vote of a majority of the
outstanding shares of the Fund or by the Manager on not less than 30 days' nor
more than 60 days' written notice.

For the fiscal years ended September 30, 1996, 1997, and 1998, the Funds paid
(had reimbursed) the following administration fees:

Administration Fees Paid
-----------------------------------------------------
1996 1997 1998
---- ---- ----
<S> <C>
Select Financial Services Fund * * $35,209(1)
Strategic High Yield Fund * * $42,740(2)
Value Plus Fund * * *

</TABLE>

(1) Commenced operations on October 20, 1997.
(2) Commenced operations on March 1, 1998.
* Not in operation during this period.

The Administrator, a Delaware business trust, has its principal business offices
at Oaks, Pennsylvania 19456. SEI Investments Management Corporation ("SIMC"), a
wholly-owned subsidiary of SEI Investments Company ("SEI Investments"), is the
owner of all beneficial interest in the Administrator. SEI Investments and its
subsidiaries and affiliates, including the Administrator, are leading providers
of funds evaluation services, trust accounting systems, and brokerage and
information services to financial institutions, institutional investors, and
money managers. The Administrator and its affiliates also serve as administrator
or sub-administrator to the following other mutual funds: The Achievement Funds
Trust, The Advisors' Inner Circle Fund, Alpha Select Funds, The Arbor Funds, ARK
Funds, Armada Funds, Bishop Street Funds, Boston 1784 Funds(R), CrestFunds,
Inc., CUFUND, The Expedition Funds, First American Funds, Inc., First American
Investment Funds, Inc., First American Strategy Funds, Inc., HighMark Funds, The
Nevis Funds, Highmark Funds, Oak Associates Funds, The PBHG Funds, Inc., PBHG
Advisor Funds, Inc., PBHG Insurance Series Fund, Inc., The Pillar Funds, Santa
Barbara Group of Mutual Funds, Inc., SEI Asset Allocation Trust, SEI Daily
Income Trust, SEI Index Funds, SEI Institutional Investments Trust, SEI
Institutional International Trust, SEI Institutional Managed Trust, SEI Liquid
Asset Trust, STI Classic Funds, SEI Tax Exempt Trust, and STI Classic Variable
Trust.

S-28

<PAGE>

DISTRIBUTION AND SHAREHOLDER SERVICING

SEI Investments Distribution Co. (the "Distributor"), a wholly-owned subsidiary
of SEI Investments, and the Trust are parties to a distribution agreement (the
"Distribution Agreement"). The Distributor receives no compensation for
distribution of shares of the Funds.

The Distribution Agreement shall remain in effect for a period of two years
after the effective date of the agreement and must be renewed annually
thereafter. The Distribution Agreement may be terminated by the Distributor or
by the Trust, by a majority vote of the Trustees who are not interested persons
and have no financial interest in the Distribution Agreement or by a majority
vote of the outstanding securities of the Trust upon not more than 60 days'
written notice by either party or upon assignment by the Distributor.

The Strategic High Yield Fund has adopted a shareholder service plan for its
Adviser Class shares (the "Adviser Class Service Plan") under which firms,
including the Distributor, that provide shareholder and administrative services
may receive compensation therefor. Under the Adviser Class Service Plan, the
Distributor may provide those services itself, or may enter into arrangements
under which third parties provide such services and are compensated by the
Distributor. Under such arrangements, the Distributor may retain as profit any
difference between the fee it receives and the amount it pays such third
parties. In addition, the Fund may enter into such arrangements directly. Under
the Adviser Class Service Plan, the Distributor is entitled to receive a fee at
an annual rate of up to .25% of each Fund's average daily net assets
attributable to Adviser Class shares that are subject to the arrangement in
return for provision of a broad range of shareholder and administrative
services, including: maintaining client accounts; arranging for bank wires;
responding to client inquiries concerning services provided for investments;
changing dividend options; account designations and addresses; providing
sub-accounting; providing information on share positions to clients; forwarding
shareholder communications to clients; processing purchase, exchange and
redemption orders; and processing dividend payments.

TRUSTEES AND OFFICERS OF THE TRUST

S-29

<PAGE>

Funds, Boston 1784 Funds(R), CrestFunds, Inc., CUFUND, The Expedition Funds,
First American Funds, Inc., First American Investment Funds, Inc., First
American Strategy Funds, Inc., HighMark Funds, Monitor Funds, The Nevis Fund,
Inc., Oak Associates Funds, The Parkstone Group of Funds, The PBHG Funds, Inc.,
PBHG Advisor Funds, Inc., PBHG Insurance Series Fund, Inc., The Pillar Funds,
SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Institutional International Trust, SEI Institutional Investments Trust, SEI
Institutional Managed Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, STI
Classic Funds, STI Classic Variable Trust, and Alpha Select Funds, each of which
is an open-end management investment company managed by SEI Investments Mutual
Funds Services or its affiliates and, except for PBHG Advisor Funds, Inc.,
distributed by SEI Investments Distribution Co.

ROBERT E. TURNER (DOB 11/26/56) - Trustee* - Chairman and Chief Investment
Officer of Turner Investment Partners, Inc. ("Turner"), since 1990.

MICHAEL E. JONES (DOB 12/24/54) - Trustee* - Senior Vice President, Investment
Adviser and Portfolio Manager with Clover Capital Management Inc., since 1984.
Principal of CCM Securities Inc.

ALFRED C. SALVATO (DOB 01/09/58) - Trustee** - Treasurer, Thomas Jefferson
University Health Care Pension Fund, since 1995, and Assistant Treasurer,
1988-1995.

JOHN T. WHOLIHAN (DOB 12/12/37) - Trustee** - Professor, Loyola Marymount
University, since 1984.

STEPHEN J. KNEELEY (DOB 02/09/63) - President and Chief Executive Officer -
Chief Operating Officer of Turner Investment Partners, Inc., since 1990.

JANET RADER ROTE (DOB 08/24/60) - Vice President and Assistant Secretary -
Director of Compliance of Turner Investment Partners, Inc., since 1992.

TODD B. CIPPERMAN (DOB 02/14/66) - Vice President and Assistant Secretary - Vice
President and Assistant Secretary of SEI, the Administrator and Distributor
since 1995. Associate, Dewey Ballantine, 1994-1995. Associate, Winston and
Strawn, 1991-1994.

S-30

<PAGE>

SANDRA K. ORLOW (DOB 10/18/53) - Vice President and Assistant Secretary - Vice
President and Assistant Secretary of the Administrator and Distributor since
1988.

ROBERT DELLACROCE (DOB 12/17/63) - Controller and Chief Accounting Officer -
Director, Funds Administration and Accounting of SEI since 1994. Senior Audit
Manager, Arthur Andersen LLP, 1986-1994.

JAMES W. JENNINGS (DOB 01/15/37) - Secretary - Partner, Morgan, Lewis & Bockius
LLP, counsel to the Trust, Turner, the Administrator and Distributor.

EDWARD B. BAER (DOB 09/27/68) - Assistant Secretary -1701 Market Street,
Philadelphia, Pennsylvania 19103, Associate, Morgan, Lewis & Bockius LLP,
Counsel to the Trust, Turner, Administrator and Distributor, since 1995.
Attorney, Aquila Management Corporation, 1994.

S-31

<PAGE>

The following table exhibits Trustee compensation for the fiscal year ended
September 30, 1998.

Aggregate Pension or Estimated Total Compensation From
Compensation From Retirement Annual Registrant and Fund
Registrant for the Benefits Benefits Complex Paid to Trustees for
Name of Person, Fiscal Year Ended Accrued as Upon the Fiscal Year Ended
Position September 30, 1998 Part of Fund Retirement September 30, 1998
Expenses

<S> <C> <C> <C> <C>
Robert Turner* $ 0 N/A N/A $0 for service on two Boards
Richard A. Hocker* $ 0 N/A N/A $0 for service on one Board
Michael E. Jones* $ 0 N/A N/A $0 for service on one Board
Alfred C. Salvato** $ 8,000 N/A N/A $12,500 for service on two
Boards
Janet F. Sansone** $ 8,000 N/A N/A $8,000 for service on one
Board
John T. Wholihan** $10,233.87 N/A N/A $10,233.87 for service on
one Board

</TABLE>

** Member of the Audit Committee.

The Trustees and Officers of the Trust own less than 1% of the outstanding
shares of the Trust.

COMPUTATION OF YIELD AND TOTAL RETURN

S-32

<PAGE>

For the 30-day period ended September 30, 1998, the Select Financial Services
and Strategic High Yield Funds' yields were 0.97% and 10.00%, respectively. The
Value Plus Fund was not in operating during this period.

The total return of a Fund refers to the average compounded rate of return to a
hypothetical investment for designated time periods (including but not limited
to, the period from which the Fund commenced operations through the specified
date), assuming that the entire investment is redeemed at the end of each
period. In particular, total return will be calculated according to the
following formula: P (1 + T)n = ERV, where P = a hypothetical initial payment of
$1,000; T = average annual total return; n = number of years; and ERV = ending
redeemable value, as of the end of the designated time period, of a hypothetical
$1,000 payment made at the beginning of the designated time period.

For the period from October 20, 1997 (commencement of operations of the Penn
Capital Select Financial Services Fund) through September 30, 1998, the total
return for the Select Financial Services Fund was 6.81%. For period from March
1, 1998 (commencement of operations of the Penn Capital Strategic High Yield
Bond Fund) through September 30, 1998, the total return for the High Yield Fund
was (7.23)%. The Value Plus Fund was not in operation during these periods.

PURCHASE AND REDEMPTION OF SHARES

S-33

<PAGE>

DETERMINATION OF NET ASSET VALUE

The securities of each Fund are valued by the Administrator. The Administrator
may use an independent pricing service to obtain valuations of securities. The
pricing service relies primarily on prices of actual market transactions as well
as on trade quotations obtained from third parties. However, the pricing service
may use a matrix system to determine valuations of fixed income securities. This
system considers such factors as security prices, yields, maturities, call
features, ratings and developments relating to specific securities in arriving
at valuations. The procedures used by the pricing service and its valuations are
reviewed by the officers of the Trust under the general supervision of the
Trustees.

Securities with remaining maturities of 60 days or less will be valued by the
amortized cost method, which involves valuing a security at its cost on the date
of purchase and thereafter (absent unusual circumstances) assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuations in general market rates of interest on the value of the instrument.
While this method provides certainty in valuation, it may result in periods
during which value, as determined by this method, is higher or lower than the
price the Trust would receive if it sold the instrument.

If there is no readily ascertainable market value for a security, the
Administrator will make a good faith determination as to the "fair value" of the
security.

TAXES

FEDERAL INCOME TAX

The discussion of federal income tax consequences is based on the Internal
Revenue Code of 1986, as amended (the "Code") and the regulations issued
thereunder as in effect on the date of this Statement of Additional Information.
New legislation, as well as administrative changes or court decisions, may
significantly change the conclusions expressed herein, and may have a
retroactive effect with respect to the transactions contemplated herein.

S-34

<PAGE>

In order to qualify for treatment as a RIC under the Code, each Fund must
distribute annually to its shareholders at least the sum of 90% of its net
interest income excludable from gross income plus 90% of its investment company
taxable income (generally, net investment income plus net short-term capital
gain) ("Distribution Requirement") and also must meet several additional
requirements. Among these requirements are the following: (i) at least 90% of a
Fund's gross income each taxable year must be derived from divi dends, interest,
payments with respect to securities loans, gains from the sale or other
disposition of stock or securities, or certain other income (including gains
from options, futures or forward contracts); (ii) at the close of each quarter
of the Fund's taxable year, at least 50% of the value of its total assets must
be represented by cash and cash items, U.S. Government securities, securities of
other RICs and other securities, with such other securities limited, in respect
to any one issuer, to an amount that does not exceed 5% of the value of the
Fund's assets and that does not represent more than 10% of the outstanding
voting securities of such issuer; and (iii) at the close of each quarter of the
Fund's taxable year, not more than 25% of the value of its assets may be
invested in securities (other than U.S. Government securities or the securities
of other RICs) of any one issuer, or of two or more issuers which are engaged in
the same, similar or related trades or business if the Fund owns at least 20% of
the voting power of such issuer.

Notwithstanding the Distribution Requirement described above, which requires
only that a Fund distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital gain
(the excess of net long-term capital gain over net short-term capital loss),
each Fund will be subject to a nondeductible 4% federal excise tax to the extent
it fails to distribute 98% of its ordinary income for that year and 98% of its
capital gain net income (the excess of short- and long-term capital gains over
short-and long-term capital losses) for the one-year period ending on October 31
of that year, plus certain other amounts.

Any gain or loss recognized on a sale, exchange or redemption of shares of a
Fund by a shareholder who is not a dealer in securities will generally, for
individual shareholders, be treated as a long-term capital gain or loss if the
shares have been held for more than twelve months and otherwise will be treated
as short-term capital gain or loss. However, if shares on which a shareholder
has received a net capital gain distribution are subsequently sold, exchanged or
redeemed and such shares have been held for six months or less, any loss
recognized will be treated as a long-term capital loss to the extent of the net
capital gain distribution. Long-term capital gains are currently taxed at a
maximum rate of 20%, and short-term capital gains are currently taxed at
ordinary income tax rates.

In certain cases, a Fund will be required to withhold and remit to the United
States Treasury 31% of any distributions paid to a shareholder who (1) has
failed to provide a correct taxpayer identification number, (2) is subject to
backup withholding by the Internal Revenue Service, or (3) has not certified to
that Fund that such shareholder is not subject to backup withholding.

S-35

<PAGE>

If any Fund fails to qualify as a RIC for any taxable year, it will be taxable
at regular corporate rates. In such an event, all distributions (including
capital gains distributions) will be taxable as ordinary dividends to the extent
of a Fund's current and accumulated earnings and profits, and such distributions
will generally be eligible for the corporate dividends-received deduction.

STATE TAXES

PORTFOLIO TRANSACTIONS

The Adviser is authorized to select brokers and dealers to effect securities
transactions for the Funds. The Adviser will seek to obtain the most favorable
net results by taking into

S-36

<PAGE>

account various factors, including price, commission, if any, size of the
transactions and difficulty of executions, the firm's general execution and
operational facilities and the firm's risk in positioning the securities
involved. While the Adviser generally seeks reasonably competitive spreads or
commissions, a Fund will not necessarily be paying the lowest spread or
commission available. The Adviser seeks to select brokers or dealers that offer
a Fund best price and execution or other services which are of benefit to the
Fund.

The Funds have no obligation to deal with any broker-dealer or group of
broker-dealers in the execution of transactions in portfolio securities. Subject
to policies established by the Trustees of the Funds, the Adviser is responsible
for placing the orders to execute transactions for the Funds. In placing orders,
it is the policy of the Adviser to seek to obtain the best net results taking
into account such factors as price (including the applicable dealer spread), the
size, type and difficulty of the transaction involved, the firm's general
execution and operational facilities and the firm's risk in positioning the
securities involved. While the Adviser generally seeks reasonably competitive
spreads or commissions, the Funds will not necessarily be paying the lowest
spread or commission available.

S-37

<PAGE>

as a result of the receipt of such supplemental information, such services may
not be used exclusively, or at all, with respect to the Fund or account
generating the brokerage, and there can be no guarantee that the Adviser will
find all of such services of value in advising that Fund.

Although they are not expected to do so, the Funds may execute brokerage or
other agency transactions through the Distributor for commissions in conformity
with the 1940 Act, the Securities Exchange Act of 1934 and rules promulgated by
the SEC. Under these provisions, the Distributor is permitted to receive and
retain compensation for effecting portfolio transactions for a Fund on an
exchange if a written contract is in effect between the Trust and the
Distributor expressly permitting the Distributor to receive and retain such
compensation. These rules further require that commissions paid to the
Distributor by a Fund for exchange transactions not exceed "usual and customary"
brokerage commissions. The rules define "usual and customary" commissions to
include amounts which are "reasonable and fair compared to the commission, fee
or other remuneration received or to be received by other brokers in connection
with comparable transactions involving similar securities being purchased or
sold on a securities exchange during a comparable period of time." The Trustees,
including those who are not "interested persons" of the Trust, have adopted
procedures for evaluating the reasonableness of commissions paid to the
Distributor and will review these procedures periodically.

Total amount of securities of the Broker/Dealer held by each Fund for the fiscal
year ended September 30, 1998 are as follows:

TOTAL AMOUNT OF
NAME OF SECURITIES HELD BY
FUND BROKER/DEALER FUND TYPE OF SECURITY
- ---- ------------- ------------------ ----------------
<S> <C> <C> <C>
Penn Capital Select Scott & Stringfellow $18,000 Equity
Financial Services Fund Financial

Equitable $10,000 Equity

American Express $ 8,000 Equity

Penn Capital Strategic Morgan Stanley $ 3,000 Repurchase
High Yield Bond Fund Agreement
</TABLE>

S-38

<PAGE>

DESCRIPTION OF SHARES

SHAREHOLDER LIABILITY

S-39
<PAGE>

LIMITATION OF TRUSTEES' LIABILITY

5% SHAREHOLDERS

NAME AND ADDRESS OF NUMBER OF PERCENTAGE OF
FUND BENEFICIAL OWNER SHARES FUND'S SHARES
---- ------------------- --------- -------------
<S> <C> <C> <C>
Penn Capital Select Penn Capital Management 10,901.9230 15.01%
Financial Services 52 Haddonfield Berlin Rd.,
Fund Ste 1000
Cherry Hill, NJ 08034-3527

Rafik Gabriel 5,251.4090 7.23%
7266 Franklin Ave., Apt. 205
Los Angeles, CA 90046-3073

Charles Schwab & Co. Inc. 6,765.8970 9.32%
Attn: Mutual Funds/Team S
4500 Cherry Creek Dr. S Fl 3
Denver, CO 80209

Carolyn Turner TR 34,662.4180 47.73%
U/A DTD
Robert E. Turner Jr. Trust
9 Horseshoe Ln.
Paoli, PA 19301-1909

S-40
<PAGE>

Wendel & Co. 4,249.4220 5.85%
FBO #725000
P.O. Box 1066
Wall Street Station
New York, NY 10268-1066

Penn Capital Strategic Batrus & Co. 694,956.1700 15.34%
High Yield -- c/o Bankers Trust Company
Institutional P.O. Box 9005
New York, NY 10087-9005

Central Maine Power 834,153.6760 18.42%
Company Pension Trust
The Bank of New York
c/o Magaly Formoso
1 Wall Street Ct Fl 12
New York, NY 10286

Byrd & Co. 430,088.1740 9.50%
c/o First Union National Bank
Mutual Funds Dividend
Processing PA4905
530 Walnut St.
Philadelphia, PA 19106-3620

First Union National Bank 521,941.1640 11.52%
AC #9 8888 8888 1
1525 W. Wt Harris Blvd.
Charlotte, NC 28262-8522

Connelly Foundation 1,126,497.5200 24.87%
One Tower Bridge, Ste 1450
West Conshohocken, PA 19428

</TABLE>

S-41

<PAGE>

CUSTODIAN

LEGAL COUNSEL

Morgan, Lewis & Bockius LLP, serves as counsel to the Trust.

FINANCIAL INFORMATION

S-42

<PAGE>

APPENDIX

DESCRIPTION OF CORPORATE BOND RATINGS

DESCRIPTION OF MOODY'S LONG-TERM RATINGS

AAA Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

AA Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than the Aaa securities.

A Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.

BAA Bonds which are rated Baa are considered as medium-grade obligations (i.e.,
they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

BA Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

B Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

CAA Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

CA Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

C Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

A-1

<PAGE>

DESCRIPTION OF STANDARD & POOR'S LONG-TERM RATINGS

INVESTMENT GRADE

AAA Debt rated 'AAA' has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.

AA Debt rated 'AA' has a very strong capacity to pay interest and repay
principal and differs from the highest rated debt only in small degree.

A Debt rated 'A' has a strong capacity to pay interest and repay
principal, although it is somewhat more susceptible to adverse effects
of changes in circumstances and economic conditions than debt in
higher-rated categories.

BBB Debt rated 'BBB' is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher
rated categories.

SPECULATIVE GRADE

Debt rated 'BB', 'B', 'CCC', 'CC', and 'C' is regarded as having
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal. 'BB' indicates the least degree of speculation and
'C' the highest degree of speculation. While such debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.

BB Debt rated 'BB' has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions that
could lead to inadequate capacity to meet timely interest and principal
payments. The 'BB' rating category is also used for debt subordinated to
senior debt that is assigned an actual or implied 'BBB-' rating.

B Debt rate 'B' has greater vulnerability to default but presently has the
capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions would likely impair capacity
or willingness to pay interest and repay principal. The 'B' rating
category also is used for debt subordinated to senior debt that is
assigned an actual or implied 'BB' or 'BB-' rating.

CCC Debt rated 'CCC' has a current identifiable vulnerability to default,
and is dependent on favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of
principal. In the event of adverse business, financial, or economic
conditions, it is not likely to have the capacity to pay interest and
repay principal. The 'CCC' rating category also is used for debt
subordinated to senior debt that is assigned an actual or implied 'B' or
'B-' rating.

CC The rating 'CC' is typically applied to debt subordinated to senior debt
which is assigned an actual or implied 'CCC' rating.

A-2

<PAGE>

C The rating 'C' is typically applied to debt subordinated to senior debt
which is assigned an actual or implied 'CCC-' debt rating. The 'C'
rating may be used to cover a situation where a bankruptcy petition has
been filed, but debt service payments are continued.

CI Debt rated 'CI' is reserved for income bonds on which no interest is
beinG paid.

D Debt is rated 'D' when the issue is in payment default, or the obligor
has filed for bankruptcy. The 'D' rating is used when interest or
principal payments are not made on the date due, even if the applicable
grace period has not expired, unless S&P believes that such payments
will be made during such grace period.

DESCRIPTION OF DUFF & PHELPS' LONG-TERM DEBT RATINGS

AAA Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.

AA+ High credit quality. Protection factors are strong. Risk is modest but
AA- may vary slightly from time to time because of economic conditions.

A+ Protection factors are average but adequate. However, risk factors are
A- more variable and greater in periods of economic stress.

BBB+ Below average protection factors but still considered sufficient for
BBB- prudent investment. Considerable variability in risk during
economic cycles.

BB+ Below investment grade but deemed likely to meet obligations when due.
BB Present or prospective financial protection factors fluctuate
BB- according to industry conditions or company fortunes. Overall
quality may move up or down frequently within this category.

B+ Below investment grade and possessing risk that obligations will not be
B met when due. Financial protection factors will fluctuate widely
B- according to economic cycles, industry conditions and/or company
fortunes. Potential exists for frequent changes in the rating within
this category or into a higher or lower rating grade.

CCC Well below investment grade securities. Considerable uncertainty exists
as to timely payment of principal, interest or preferred dividends.
Protection factors are narrow and risk can be substantial with
unfavorable economic/industry conditions, and/or with unfavorable
company developments.

DD Defaulted debt obligations. Issuer failed to meet scheduled principal
and/or interest payments.

DP Preferred stock with dividend arrearages.

A-3

<PAGE>

DESCRIPTION OF FITCH'S LONG-TERM RATINGS

INVESTMENT GRADE BOND

AAA Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.

AA Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated 'AAA'. Because
bonds rated in the 'AAA' and 'AA' categories are not significantly
vulnerable to foreseeable future developments, short-term debt of these
issuers is generally rated 'F- 1+'.

A Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to
be strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.

BBB Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these
bonds, and therefore impair timely payment. The likelihood that the
ratings of these bonds will fall below investment grade is higher than
for bonds with higher ratings.

SPECULATIVE GRADE BOND

BB Bonds are considered speculative. The obligor's ability to pay interest
and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified
which could assist the obligor in satisfying its debt service
requirements.

B Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the
obligor's limited margin of safety and the need for reasonable business
and economic activity throughout the life of the issue.

CCC Bonds have certain identifiable characteristics which, if not remedied,
may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.

CC Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.

C Bonds are in imminent default in payment of interest or principal.

A-4
<PAGE>

DDD, DD, Bonds are in default on interest and/or principal payments. Such bonds
AND D are extremely speculative and should be valued on the basis of their
ultimate recovery value in liquidation or reorganization of the
obligor. 'DDD' represents the highest potential for recovery on these
bonds, and 'D' represents the lowest potential for recovery.

DESCRIPTION OF IBCA'S LONG-TERM RATINGS

AAA Obligations for which there is the lowest expectation of investment
risk. Capacity for timely repayment of principal and interest is
substantial, such that adverse changes in business, economic or
financial conditions are unlikely to increase investment risk
substantially.

AA Obligations for which there is a very low expectation of investment
risk. Capacity for timely repayment of principal and interest is
substantial. Adverse changes in business, economic or financial
conditions may increase investment risk, albeit not very significantly.

A Obligations for which there is a low expectation of investment risk.
Capacity for timely repayment of principal and interest is strong,
although adverse changes in business, economic or financial conditions
may lead to increased investment risk.

BBB Obligations for which there is currently a low expectation of
investment risk. Capacity for timely repayment of principal and
interest is adequate, although adverse changes in business, economic or
financial conditions are more likely to lead to increased investment
risk than for obligations in other categories.

BB Obligations for which there is a possibility of investment risk
developing. Capacity for timely repayment of principal and interest
exists, but is susceptible over time to adverse changes in business,
economic or financial conditions.

B Obligations for which investment risk exists. Timely repayment of
principal and interest is not sufficiently protected against adverse
changes in business, economic or financial conditions.

CCC Obligations for which there is a current perceived possibility of
default. Timely repayment of principal and interest is dependent on
favorable business, economic or financial conditions.

CC Obligations which are highly speculative or which have a high risk of
default.

C Obligations which are currently in default.

DESCRIPTION OF THOMSON BANKWATCH'S LONG-TERM DEBT RATINGS

INVESTMENT GRADE

AAA The highest category; indicates that the ability to repay principal and
interest on a timely basis is very high.

A-5
<PAGE>

AA The second-highest category; indicates a superior ability to repay
principal and interest on a timely basis, with limited incremental risk
compared to issues rated in the highest category.

A The third-highest category; indicates the ability to repay principal
and interest is strong. Issues rated "A" could be more vulnerable to
adverse developments (both internal and external) than obligations with
higher ratings.

BBB The lowest investment-grade category; indicates an acceptable capacity
to repay principal and interest. Issues rated "BBB" are, however, more
vulnerable to adverse developments (both internal and external) than
obligations with higher ratings.

NON-INVESTMENT GRADE

BB While not investment grade, the "BB" rating suggests that the
likelihood of default is considerably less than for lower-rated issues.
However, there are significant uncertainties that could affect the
ability to adequately service debt obligations.

B Issues rated "B" show a higher degree of uncertainty and therefore
greater likelihood of default than higher-rated issues. Adverse
developments could well negatively affect the payment of interest and
principal on a timely basis.

CCC Issues rated "CCC" clearly have a high likelihood of default, with
little capacity to address further adverse changes in financial
circumstances.

CC "CC" is applied to issues that are subordinate to other obligations
rated "CCC" and are afforded less protection in the event of bankruptcy
or reorganization.

D Default

A-6

<PAGE>

PART C: OTHER INFORMATION

Item 23. Exhibits

(a)(1) Agreement and Declaration of Trust of the Registrant,
dated January 26, 1996 is incorporated by reference
to Exhibit 1 of the Registrant's Registration
Statement as filed on February 1, 1996.

(a)(2) Certificate of Amendment of Agreement and Declaration
of Trust dated March 28, 1997, is incorporated by
reference to Exhibit 1(a) of the Registrant's Post-
Effective Amendment No. 5 as filed on April 10, 1997.

(b) By-Laws are incorporated by reference to Exhibit 2 of
the Registrant's Registration Statement as filed on
February 1, 1996.

(d)(1) Investment Advisory Agreement between the Registrant
and Turner Investment Partners, Inc., is incorporated
by reference to Exhibit 5(a) of the Registrant's
Post-Effective Amendment No. 4 as filed on January
28, 1997.

(d)(2) Investment Advisory Agreement between the Registrant
and Clover Capital Management, Inc., is incorporated
by reference to Exhibit 5(b) of the Registrant's
Post-Effective Amendment No. 10 as filed on October
15, 1997.

(d)(3) Investment Advisory Agreement between the Registrant
and Penn Capital Management Company, Inc., is
incorporated by reference to Exhibit d(3) of the
Registrant's Post-Effective Amendment No. 12 as filed
on November 17, 1998.

(d)(4) Investment Advisory Agreement between Registrant and
Turner Investment Partners, Inc., is incorporated by
reference to Exhibit d(4) of the Registrant's
Post-Effective Amendment No. 12 as filed on November
17, 1998.

(d)(5) Investment Sub-Advisory Agreement between Turner
Investment Partners, Inc., and Clover Capital
Management, Inc., is incorporated by reference to
Exhibit d(5) of the Registrant's Post-Effective
Amendment No. 12 as filed on November 17, 1998.

(d)(6) Investment Sub-Advisory Agreement between Turner
Investment Partners, Inc. and Penn Capital
Management, Inc., is incorporated by reference to
Exhibit d(6) of the Registrant's Post-Effective
Amendment No. 12 as filed on November 17, 1998.

(d)(7) Form of Investment Sub-Advisory Agreement between
Turner Investment Partners, Inc. and Chartwell

C-1

<PAGE>

Investment Partners, is incorporated by reference to
Exhibit d(7) of the Registrant's Post-Effective
Amendment No. 12 as filed on November 17, 1998.

(e)(1) Distribution Agreement between the Registrant and
SEI Investments Distribution Co. (formerly, SEI
Financial Services Company), is incorporated by
reference to Exhibit 6(a) of the Registrant's
Post-Effective Amendment No. 4 as filed on January
28, 1997.

(e)(2) Distribution Agreement between the Registrant and CCM
Securities Inc., is incorporated by reference to
Exhibit 6(b) of the Registrant's Registration
Statement as filed on January 23, 1998.

(f) Not applicable.

(g) Custodian Agreement between the Registrant and
CoreStates Bank, N.A., is incorporated by reference
to Exhibit 8(a) of the Registrant's Post-Effective
Amendment No. 4 as filed on January 28, 1997.

(h)(1) Administration Agreement between the Registrant and
SEI Investments Management Corporation (formerly, SEI
Financial Management Corporation), is incorporated by
reference to Exhibit 9(a) of the Registrant's
Post-Effective Amendment No. 4 filed on January 28,
1997.

(h)(2) Transfer Agency Agreement between the Registrant and
DST Systems, Inc. is incorporated by reference to
Exhibit 9(b) of the Registrant's Registration
Statement as filed on January 23, 1998.

(i) Opinion and Consent of Counsel, is incorporated by
reference to Exhibit 10 of the Registrant's
Pre-Effective Amendment No. 1 to Registration
Statement as filed April 19, 1996.

(j) Consent of Independent Auditors, Ernst & Young, LLP,
is filed herewith.

(k) Not applicable.

(l) Not applicable.

(m) Not applicable.

(n) Financial data schedules are filed herewith.

(o) Not applicable.

(p) Powers of Attorney for Robert E. Turner, Richard A.
Hocker, Michael E. Jones, Alfred C. Salvato, John T.
Wholihan, Stephen J. Kneeley, Janet F. Sansone, and

C-2

<PAGE>

Robert DellaCroce, are incorporated by reference to
Exhibit (p) of Registrant's Post-Effective Amendment
No. 12 as filed on November 17, 1998.

Item 24. Persons Controlled by or under Common Control with Registrant:

See the Prospectus and the Statement of Additional Information regarding
the Registrant's control relationships. SEI Investments Management Corporation
(formerly, SEI Financial Management Corporation) is the owner of all beneficial
interest in the Administrator and is a subsidiary of SEI Investments Company,
which also controls the distributor of the Registrant, SEI Investments
Distribution Co. (formerly, SEI Financial Services Company), as well as to other
corporations engaged in providing various financial and record keeping services,
primarily to bank trust departments, pension plan sponsors, and investment
managers.

Item 25. Indemnification:

Article VIII of the Agreement of Declaration of Trust filed as Exhibit 1 to
the Registration Statement is incorporated by reference. Insofar as
indemnification for liability arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the Declaration of Trust or otherwise, the Registrant is aware that
in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Act and, therefore, is
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by trustees, directors, officers or controlling persons of the Registrant
in connection with the successful defense of any act, suit or proceeding) is
asserted by such trustees, directors, officers or controlling persons in
connection with the shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issues.

C-3

<PAGE>

Item 26. Business and Other Connections of Investment Advisers:

ADVISERS

TURNER INVESTMENT PARTNERS, INC.

Turner Investment Partners, Inc. ("Turner") is the investment adviser for the
Turner Ultra Large Cap Growth, Turner Growth Equity, Turner Midcap Growth,
Turner Small Cap Growth, Turner Micro Cap Growth, Turner Fixed Income, Turner
Short Duration Government Funds- One Year Portfolio, Turner Short Duration
Government Funds- Three Year Portfolio, and TIP Target Select Equity Funds. The
principal address of Turner is 1235 Westlakes Drive, Suite 350, Berwyn, PA
19312. Turner is an investment adviser registered under the Advisers Act.

<TABLE>
<CAPTION>
NAME AND POSITION WITH POSITION WITH OTHER
COMPANY OTHER COMPANY COMPANY
- ----------------------------------- ------------------------------- -------------------------
<S> <C> <C>
Stephen J. Kneeley SEI Investments Distribution Co. Registered Representative
Chief Operating Officer, Secretary,
Treasurer

Janet Rader Rote SEI Investments Distribution Co Registered Representative
Director of Compliance

Michael R. Thompson SEI Investments Distribution Co Registered Representative
Marketing Director, Assistant
Secretary

Thomas R. Trala
Director of Finance ---- ----

Mark D. Turner
President, Director of Fixed ---- ----
Income

Robert E. Turner, Jr.
Chairman, CIO ---- ----
</TABLE>

CLOVER CAPITAL MANAGEMENT, INC.

Clover Capital Management, Inc. is the investment adviser for the Clover Max Cap
Value, Clover Equity Value, Clover Fixed Income and Clover Small Cap Value
Funds. Clover Capital Management, Inc. is the sub-adviser for the TIP Target
Select Equity Fund. The principal address of Clover Capital Management, Inc. is
11 Tobey Village Office Park, Pittsford, NY 14534. Clover is an investment
adviser registered under the Advisors Act.

<TABLE>
<CAPTION>
NAME AND POSITION WITH CONNECTION WITH OTHER
COMPANY OTHER COMPANY COMPANY
- ---------------------- ------------- ----------------------
<S> <C> <C>
James G. Gould CCM Securities, Inc. ----
Director & President
</TABLE>

C-4

<PAGE>

<TABLE>
<S> <C> <C>
Richard J. Huxley
executive VP & Fixed Income ---- ----
Director

Michael E. Jones CCM Securities, Inc. ----
Managing Director & Exec. VP

Laura G. Quatela CCM Securities, Inc. ----
VP, Chief Legal Officer &
Secretary

Geoffrey H. Rosenberger CCM Securities, Inc. ----
Managing Director, Exec VP, &
Treasurer

Charles W. Ruff
Director, VP & Fixed Income ---- ----
Director
</TABLE>

PENN CAPITAL MANAGEMENT COMPANY, INC.

Penn Capital Management Company, Inc. is the investment adviser for the Penn
Capital Select Financial Services, Penn Capital Strategic High Yield Bond and
Penn Capital Value Plus Funds. Penn Capital Management Company, Inc. is the
sub-adviser for the TIP Target Select Equity Fund. The principal address of Penn
Capital Management Company, Inc., is 52 Haddonfield-Berlin Road, Suite 1000,
Cherry Hill, NJ 08034. Penn Capital is an investment adviser registered under
the Advisors Act.

NAME AND POSITION WITH CONNECTION WITH OTHER
COMPANY OTHER COMPANY COMPANY
- --------------------------------- ------------------------------ ---------------------
<S> <C> <C>
John J. Gallagher, Jr. Valley Forge Military Academy & Chairman of Board of Trustees
Trustee College

Kimberley Hocker
Trustee ---- ----

Kirsten Hocker
Trustee ---- ----

Marcia Ann Hocker MAH Inc. Secretary/Treasurer
President, COO, Trustee

Richard Alan Hocker
CIO ---- ----

Kathleen Ann News
Managing Director ---- ----

Michael F. Swallow
Secretary, Treasurer ---- ----
</TABLE>

C-5

<PAGE>

CHARTWELL INVESTMENT PARTNERS

Chartwell Investment Partners is the sub-adviser for the TIP Target Select
Equity Fund. The principal address of Chartwell Investment Partners is 1235
Westlakes Drive, Suite 330, Berwyn, PA 19312. Chartwell is an investment advisor
registered under the Advisors Act.

<TABLE>
<CAPTION>
NAME AND POSITION WITH CONNECTION WITH OTHER
COMPANY OTHER COMPANY COMPANY
- ---------------------- ------------- ----------------------
<S> <C> <C>
Edward N. Antoian
Partner/Portfolio Manager ---- ----

Terry F. Bovarnick
Partner/Portfolio Manager ---- ----

Bobcat Partners ---- ----
General Partner of Maverick
Partners

Chartwell G.P., Inc.
General Partner of Maverick ---- ----
Partners

David C. Dalrymple
Partner/Portfolio Manager ---- ----

Winthrop S. Jessup
Partner ---- ----

Michael T. Kennedy Radnor Holdings Corp. President, CEO
Indirect Limited Partner
Trinity Capital Partners President, CEO
Maverick Partners L.P.
Limited Partner ---- ----

Michael J. McCloskey
Partner ---- ----

John P. McNiff CAM Investment Advisors, Inc. Chairman
Indirect Limited Partner
Longwood Investment Advisors, Managing Director
Inc.
Kevin A. Melich
Partner/Portfolio Manager ---- ----

Harold A. Ofstie
Partner/Portfolio Manager ---- ----

Timothy J. Riddle
Compliance Officer ---- ----

Bernard P. Schaffer ---- ----
Partner/Portfolio Manager

Mark A. Sullivan
Vice President Client Services ---- ----

</TABLE>

C-6

<PAGE>

Item 27. Principal Underwriters:

(a) Furnish the name of each investment company (other than the Registrant)
for which each principal underwriter currently distributing the
securities of the Registrant also acts as a principal underwriter,
distributor or investment adviser.

Registrant's distributor, SEI Investments Distribution Co. (the
"Distributor"), acts as distributor for:

SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI Institutional International Trust August 30, 1988
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
Boston 1784 Funds(R) June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Morgan Grenfell Investment Trust January 3, 1994
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
CrestFunds, Inc. March 1, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Huntington Funds January 11, 1996
SEI Asset Allocation Trust April 1, 1996
SEI Institutional Investments Trust June 14, 1996
First American Strategy Funds, Inc. October 1, 1996
HighMark Funds February 15, 1997
Armada Funds March 8, 1997
PBHG Insurance Series Fund, Inc. April 1, 1997
The Expedition Funds June 9, 1997
Alpha Select Funds January 1, 1998
Oak Associates Funds February 27, 1998
The Nevis Fund, Inc. June 29, 1998
The Parkstone Group of Funds September 14, 1998

The Distributor provides numerous financial services to investment
managers, pension plan sponsors, and bank trust departments. These
services include portfolio evaluation, performance measurement and

<PAGE>

consulting services ("Funds Evaluation") and automated execution,
clearing and settlement of securities transactions ("MarketLink").

(b) Furnish the Information required by the following table with respect to
each director, officer or partner of each principal underwriter named
in the answer to Item 21 of Part B. Unless otherwise noted, the
business address of each director or officer is Oaks, PA 19456.

POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ---- ------------------- ---------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman of the Board of Directors --
Henry H. Greer Director --
Carmen V. Romeo Director --
Mark J. Held President & Chief Operating Officer --
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President --
Dennis J. McGonigle Executive Vice President --
Robert M. Silvestri Chief Financial Officer & Treasurer --
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Larry Hutchison Senior Vice President --
Jack May Senior Vice President --
Hartland J. McKeown Senior Vice President --
Barbara J. Moore Senior Vice President --
Kevin P. Robins Senior Vice President & General Counsel --
Patrick K. Walsh Senior Vice President --
Robert Aller Vice President --
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary Vice President & Assistant Secretary
S. Courtney E. Collier Vice President & Assistant Secretary --
Robert Crudup Vice President & Managing Director --
Barbara Doyne Vice President --
Jeff Drennen Vice President --
Vic Galef Vice President & Managing Director --
Lydia A. Gavalis Vice President & Assistant Secretary --
Greg Gettinger Vice President & Assistant Secretary --
Kathy Heilig Vice President Vice President & Assistant Secretary
Jeff Jacobs Vice President --
Samuel King Vice President --
Kim Kirk Vice President & Managing Director --
John Krzeminski Vice President & Managing Director --
Carolyn McLaurin Vice President & Managing Director --
W. Kelso Morrill Vice President --
Mark Nagle Vice President --
Joanne Nelson Vice President --
Joseph M. O'Donnell Vice President & Assistant Secretary Vice President & Assistant Secretary
Sandra K. Orlow Vice President & Secretary Vice President & Assistant Secretary
Cynthia M. Parrish Vice President & Assistant Secretary --
Kim Rainey Vice President --
Rob Redican Vice President --
Maria Rinehart Vice President --
</TABLE>

C-8
<PAGE>

<TABLE>
<S> <C> <C>
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Secretary Vice President & Assistant Secretary
Lynda J. Striegel Vice President & Assistant Secretary --
Lori L. White Vice President & Assistant Secretary --
Wayne M. Withrow Vice President & Managing Director --
</TABLE>

Item 28. Location of Accounts and Records:

Books or other documents required to be maintained by Section 31(a) of
the Investment Company Act of 1940, and the rules promulgated
thereunder, are maintained as follows:

(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3);
(6); (8); (12); and 31a- 1(d), the required books and records will be
maintained at the offices of Registrant's Custodian:

First Union National Bank
Broad & Chestnut Streets
P.O. Box 7618
Philadelphia, Pennsylvania 19101

(b)/(c) With respect to Rules 31a-1(a); 31a-1(b)(1),(4); (2)(C) and
(D); (4); (5); (6); (8); (9); (10); (11); and 31a-1(f), the required
books and records are maintained at the offices of Registrant's
Administrator:

SEI Investments Mutual Funds Services
Oaks, Pennsylvania 19456

(c) With respect to Rules 31a-1(b)(5), (6), (9) and (10) and 31a-1(f),
the required books and records are maintained at the principal offices
of the Registrant's Advisers:

Turner Investment Partners, Inc.
1235 Westlakes Drive, Suite 350
Berwyn, Pennsylvania 19312

Clover Capital Management, Inc.
11 Tobey Village Office Park
Pittsford, New York 14534

Penn Capital Management Company, Inc.
52 Haddonfield-Berlin Road
Suite 1000
Cherry Hill, New Jersey 08034

C-9
<PAGE>

Chartwell Investment Partners
1235 Westlakes Drive
Suite 330
Berwyn, PA 19312

Item 29. Management Services: None.

Item 30. Undertakings: None

C-10

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, the Registrant certifies that it meets all of
the requirements for the effectiveness of this Registration Statement pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment No. 13 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Oaks, Commonwealth of Pennsylvania on
the 22nd day of January 1999.

TIP FUNDS

By: /s/ Stephen J. Kneeley
-------------------------------
Stephen J. Kneeley
President & Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following person in the capacity on the
dates indicated.

<TABLE>
<S> <C> <C>
* Trustee January 22, 1999
- ---------------------------
Robert E. Turner

* Trustee January 22, 1999
- ---------------------------
Richard A. Hocker

* Trustee January 22, 1999
- ---------------------------
Michael E. Jones

* Trustee January 22, 1999
- ---------------------------
Janet F. Sansone

* Trustee January 22, 1999
- ---------------------------
Alfred C. Salvato

* Trustee January 22, 1999
- ---------------------------
John T. Wholihan

/s/ Stephen J. Kneeley President and Chief January 22, 1999
- ------------------------- Executive Officer
Stephen J. Kneeley

/s/ Robert DellaCroce Controller and January 22, 1999
- -------------------------- Chief Financial
Robert DellaCroce Officer

By: /s/ Stephen J. Kneeley January 22, 1999
----------------------
Stephen J. Kneeley
Attorney-in-Fact

</TABLE>

C-11

<PAGE>

EXHIBIT INDEX

NAME EXHIBIT
- ---- -------

Agreement and Declaration of Trust of the Ex-99.a(1)
Registrant, dated January 26, 1996, (incorporated herein by
reference to Exhibit 1 of the Registration Statement filed on
February 1, 1996).

Amendment dated March 28, 1997, to the Agreement Ex-99.a(2)
and Declaration of Trust of the Registrant, dated January 26,
1996, (incorporated herein in by reference to Exhibit 1(a) of
the Post-Effective Amendment No. 5 filed on April 10, 1997).

By-Laws of the Registrant, (incorporated herein by Ex-99.b
reference to Exhibit 2 of the Registration Statement filed on
February 1, 1996).

Investment Advisory Agreement between Ex-99.d(1)
the Registrant and Turner Investment Partners, Inc.,
(incorporated herein by reference to Exhibit 5(a) of
the Post-Effective Amendment No. 4 filed on
January 28, 1997).

Investment Advisory Agreement between the Ex-99.d(2)
Registrant and Clover Capital Management, Inc., (incorporated
herein by reference to Exhibit 5(b) of the Post-Effective
Amendment No. 10 filed on October 15, 1997).

Investment Advisory Agreement between Ex-99.d(3)
the Registrant and Penn Capital Management
Company, Inc. (incorporated herein by reference
to Exhibit d(3) of the Post-Effective Amendment
No. 12 filed on November 17, 1998).

Investment Advisory Agreement between the Ex-99.d(4)
Registrant and Turner Investment Partners, Inc., (incorporated
herein by reference to Exhibit d(4) of the Post- Effective
Amendment No. 12 filed on November 17, 1998).

Investment Sub-Advisory Agreement between Ex-99.d(5)
Turner Investment Partners, Inc. and Clover Capital
Management, Inc., (incorporated herein by reference
to Exhibit d(5) of the Post-Effective Amendment
No. 12 filed on November 17, 1998).

Investment Sub-Advisory Agreement between Turner Ex-99.d(6)
Investment Partners, Inc. and Penn Capital Management,
Inc., (incorporated herein by reference to Exhibit d(5) of the
Post-Effective Amendment No. 12 filed on November 17, 1998).

C-12

<PAGE>

Investment Sub-Advisory Agreement between Turner Ex-99.d(7)
Investment Partners, Inc. and Chartwell Investment Partners,
(incorporated herein by reference to Exhibit d(7) of the Post-
Effective Amendment No. 12 filed on November 17, 1998).

Distribution Agreement between the Ex-99.e(1)
Registrant and SEI Investments Distribution Co.
(formerly, SEI Financial Services Company),
(incorporated herein by reference to Exhibit 6(a)
Post-Effective Amendment No. 4 filed on January 28, 1997).

Distribution Agreement between the Registrant and Ex-99.e(2)
CCM Securities, Inc., (incorporated herein by reference to
Exhibit 6(b) of the Registration Statement filed January 23,
1998).

Custodian Agreement between the Registrant Ex-99.g
and CoreStates Bank, N.A., (incorporated herein
by reference to Exhibit 8(a) of the Post-Effective
Amendment No. 4 filed on January 28, 1997).

Administration Agreement between the Ex-99.h(1)
Registrant and SEI Investments Management Corporation
(formerly, SEI Financial Management Corporation),
(incorporated herein by reference to Exhibit 9(a)
of the Post-Effective Amendment No. 4 filed on
January 28, 1997).

Transfer Agency Agreement between the Registrant and Ex-99.h(2)
DST Systems, Inc., (incorporated by reference to Exhibit
9(b) of the Registration Statement filed January 23, 1998).

Opinion and Consent of Counsel, Ex-99.i
(incorporated herein by reference to Exhibit 10 of
the Pre-Effective Amendment No. 1 to Registration
Statement filed April 19,1996).

C-13

<PAGE>

Consent of Independent Auditors, Ernst & Young, LLP, Ex-99.j
is filed herewith.

Financial data schedule for Turner Ultra Large Cap Growth Ex-99.n(1)
Fund is filed herewith.

Financial data schedule for Turner Growth Equity Fund Ex-99.n(2)
is filed herewith.

Financial data schedule for Turner Mid Cap Growth Fund Ex-99.n(3)
is filed herewith.

Financial data schedule for Turner Small Cap Growth Fund Ex-99.n(4)
is filed herewith.

Financial data schedule for Turner Micro Cap Growth Fund Ex-99.n(5)
is filed herewith.

Financial data schedule for Turner Short Duration Government Ex-99.n(6)
Funds-One Year Portfolio Institutional Class is
filed herewith.

Financial data schedule for Turner Short Duration Government Ex-99.n(7)
Funds-Three Year Portfolio Institutional Class is
filed herewith.

Financial data schedule for TIP Target Select Equity Fund Ex-99.n(8)
is filed herewith.

Financial data schedule for Clover Small Cap Value Fund Ex-99.n(9)
is filed herewith.

Financial data schedule for Clover Equity Value Fund is filed Ex-99.n(10)
herewith.

Financial data schedule for Clover Max Cap Value Fund is Ex-99.n(11)
filed herewith.

Financial data schedule for Clover Fixed Income Fund is Ex-99.n(12)
filed herewith.

Financial data schedule for Penn Capital Strategic High Yield Ex-99.n(13)
Bond Fund - Institutional Class is filed herewith.

Financial data schedule for Penn Capital Select Financial Ex-99.n(14)
Services Fund is filed herewith.

C-14
<PAGE>

Powers of Attorney for Robert E. Turner, Ex-99.p
Richard A. Hocker, Michael E. Jones, Alfred C. Salvato,
John T. Wholihan, Stephen J. Kneeley, Janet F. Sansone
and Robert DellaCroce, (incorporated herein by reference
to Exhibit p of the Post-Effective Amendment
No. 12 filed on November 17, 1998).

C-15

Consent of Ernst & Young LLP, Independent Auditors

We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectus and "Financial Statements" in the Statements
of Additional Information and to the incorporation by reference in Post
Effective Amendment No. 13 to the Registration Statement (Form N-1A
No. 333/00641) of the TIP Funds of our reports dated November 2, 1998 included
in the September 30, 1998 Annual Report to Shareholders of the Turner Funds
Equity Series, the Clover Funds Equity and Fixed Income Series, the Penn
Capital Select Financial Services Series, and the TIP Target Select Equity
Series.

/s/ Ernst & Young LLP
- ----------------------------
Ernst & Young LLP

Philadelphia, Pennsylvania
January 25, 1999

<ARTICLE> 6
<CIK> 0001006783
<NAME> TIP FUNDS
<SERIES>
<NUMBER> 040
<NAME> TURNER ULTRA LARGE CAP FUND

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 4312
<INVESTMENTS-AT-VALUE> 4495
<RECEIVABLES> 364
<ASSETS-OTHER> 18
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1877
<PAYABLE-FOR-SECURITIES> 543
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6
<TOTAL-LIABILITIES> 549
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4313
<SHARES-COMMON-STOCK> 327
<SHARES-COMMON-PRIOR> 57
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (168)
<ACCUM-APPREC-OR-DEPREC> 183
<NET-ASSETS> 4328
<DIVIDEND-INCOME> 16
<INTEREST-INCOME> 3
<OTHER-INCOME> 0
<EXPENSES-NET> (21)
<NET-INVESTMENT-INCOME> (2)
<REALIZED-GAINS-CURRENT> (170)
<APPREC-INCREASE-CURRENT> 169
<NET-CHANGE-FROM-OPS> (3)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1)
<DISTRIBUTIONS-OF-GAINS> (72)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3876
<NUMBER-OF-SHARES-REDEEMED> (246)
<SHARES-REINVESTED> 73
<NET-CHANGE-IN-ASSETS> 3627
<ACCUMULATED-NII-PRIOR> 1
<ACCUMULATED-GAINS-PRIOR> 74
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 16
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 160
<AVERAGE-NET-ASSETS> 2071
<PER-SHARE-NAV-BEGIN> 12.28
<PER-SHARE-NII> (0.10)
<PER-SHARE-GAIN-APPREC> 1.98
<PER-SHARE-DIVIDEND> (0.10)
<PER-SHARE-DISTRIBUTIONS> (1.020)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.22
<EXPENSE-RATIO> 1.0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 000106783
<NAME> TIP INSTITUTIONAL FUNDS
<SERIES>
<NUMBER> 010
<NAME> TURNER GROWTH EQUITY FUND

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 86682
<INVESTMENTS-AT-VALUE> 98847
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 98847
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 990
<TOTAL-LIABILITIES> 990
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 73761
<SHARES-COMMON-STOCK> 7605
<SHARES-COMMON-PRIOR> 5986
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 11931
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 12165
<NET-ASSETS> 97857
<DIVIDEND-INCOME> 537
<INTEREST-INCOME> 75
<OTHER-INCOME> 0
<EXPENSES-NET> (990)
<NET-INVESTMENT-INCOME> (378)
<REALIZED-GAINS-CURRENT> 17188
<APPREC-INCREASE-CURRENT> (7481)
<NET-CHANGE-FROM-OPS> 9329
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (26503)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1638
<NUMBER-OF-SHARES-REDEEMED> (2339)
<SHARES-REINVESTED> 2320
<NET-CHANGE-IN-ASSETS> (1733)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 21624
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 743
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1106
<AVERAGE-NET-ASSETS> 99108
<PER-SHARE-NAV-BEGIN> 16.64
<PER-SHARE-NII> (.050)
<PER-SHARE-GAIN-APPREC> 110
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (4.820)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.87
<EXPENSE-RATIO> 1.04
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 000106783
<NAME> TIP FUNDS
<SERIES>
<NUMBER> 030
<NAME> TURNER MIDCAP GROWTH FUND

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 24563
<INVESTMENTS-AT-VALUE> 25421
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 25421
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 839
<TOTAL-LIABILITIES> 839
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 25273
<SHARES-COMMON-STOCK> 1772
<SHARES-COMMON-PRIOR> 362
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (3)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (1546)
<ACCUM-APPREC-OR-DEPREC> 858
<NET-ASSETS> 24582
<DIVIDEND-INCOME> 53
<INTEREST-INCOME> 45
<OTHER-INCOME> 0
<EXPENSES-NET> (222)
<NET-INVESTMENT-INCOME> (124)
<REALIZED-GAINS-CURRENT> (1546)
<APPREC-INCREASE-CURRENT> 524
<NET-CHANGE-FROM-OPS> (1146)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (358)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 28977
<NUMBER-OF-SHARES-REDEEMED> (8356)
<SHARES-REINVESTED> 320
<NET-CHANGE-IN-ASSETS> 19437
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 358
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 135
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 132
<AVERAGE-NET-ASSETS> 18088
<PER-SHARE-NAV-BEGIN> 14.22
<PER-SHARE-NII> (0.70)
<PER-SHARE-GAIN-APPREC> .220
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.50)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.87
<EXPENSE-RATIO> 1.34
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0001006783
<NAME> TIP FUNDS
<SERIES>
<NUMBER> 020
<NAME> TURNER SMALL CAP GROWTH FUND

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 145397
<INVESTMENTS-AT-VALUE> 149583
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 149583
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2049
<TOTAL-LIABILITIES> 2049
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 151695
<SHARES-COMMON-STOCK> 6865
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (8347)
<ACCUM-APPREC-OR-DEPREC> 4186
<NET-ASSETS> 147534
<DIVIDEND-INCOME> 250
<INTEREST-INCOME> 246
<OTHER-INCOME> 0
<EXPENSES-NET> (2105)
<NET-INVESTMENT-INCOME> (1609)
<REALIZED-GAINS-CURRENT> (6168)
<APPREC-INCREASE-CURRENT> (22875)
<NET-CHANGE-FROM-OPS> (30652)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (1521)
<NUMBER-OF-SHARES-SOLD> 96936
<NUMBER-OF-SHARES-REDEEMED> (71832)
<SHARES-REINVESTED> 2289
<NET-CHANGE-IN-ASSETS> (5928)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 748
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1685
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2379
<AVERAGE-NET-ASSETS> 168530
<PER-SHARE-NAV-BEGIN> 26.35
<PER-SHARE-NII> (0.23)
<PER-SHARE-GAIN-APPREC> (4.190)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> (0.44)
<PER-SHARE-NAV-END> 21.49
<EXPENSE-RATIO> 1.28
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000914243
<NAME> TIP INSTITUTIONAL FUND
<SERIES>
<NUMBER> 040
<NAME> TURNER MICRO CAP GROWTH FUND

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 11887
<INVESTMENTS-AT-VALUE> 12123
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12123
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 108
<TOTAL-LIABILITIES> 108
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11693
<SHARES-COMMON-STOCK> 1172
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 10
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 76
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 236
<NET-ASSETS> 12015
<DIVIDEND-INCOME> 5
<INTEREST-INCOME> 5
<OTHER-INCOME> 0
<EXPENSES-NET> (21)
<NET-INVESTMENT-INCOME> (11)
<REALIZED-GAINS-CURRENT> (47)
<APPREC-INCREASE-CURRENT> (57)
<NET-CHANGE-FROM-OPS> (115)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3087
<NUMBER-OF-SHARES-REDEEMED> (129)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 16
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 92
<AVERAGE-NET-ASSETS> 2829
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (0.040)
<PER-SHARE-GAIN-APPREC> (0.080)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.88
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000914243
<NAME> TIP INSTITUTIONAL FUNDS
<SERIES>
<NUMBER> 010
<NAME> TURNER SHORT DURATION -- ONE YEAR PORTFOLIO

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 1021
<INVESTMENTS-AT-VALUE> 1023
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1023
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 32
<TOTAL-LIABILITIES> 32
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 984
<SHARES-COMMON-STOCK> 98
<SHARES-COMMON-PRIOR> 119
<ACCUMULATED-NII-CURRENT> 2
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2
<NET-ASSETS> 991
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 37
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 37
<REALIZED-GAINS-CURRENT> 1
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 38
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (35)
<DISTRIBUTIONS-OF-GAINS> (1)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5
<NUMBER-OF-SHARES-REDEEMED> (247)
<SHARES-REINVESTED> 36
<NET-CHANGE-IN-ASSETS> (204)
<ACCUMULATED-NII-PRIOR> 2
<ACCUMULATED-GAINS-PRIOR> 3
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 78
<AVERAGE-NET-ASSETS> 1089
<PER-SHARE-NAV-BEGIN> 10.08
<PER-SHARE-NII> .350
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.33)
<PER-SHARE-DISTRIBUTIONS> (0.10)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.09
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000914243
<NAME> TIP INSTITUTIONAL FUNDS
<SERIES>
<NUMBER> 020
<NAME> TURNER SHORT DURATION - THREE YEAR PORTFOLIO

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 11887
<INVESTMENTS-AT-VALUE> 12123
<RECEIVABLES> 0
<ASSETS-OTHER> 108
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12231
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11693
<SHARES-COMMON-STOCK> 1172
<SHARES-COMMON-PRIOR> 1540
<ACCUMULATED-NII-CURRENT> 10
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 76
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 236
<NET-ASSETS> 12231
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 488
<OTHER-INCOME> 0
<EXPENSES-NET> (19)
<NET-INVESTMENT-INCOME> 469
<REALIZED-GAINS-CURRENT> 74
<APPREC-INCREASE-CURRENT> 119
<NET-CHANGE-FROM-OPS> 662
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (461)
<DISTRIBUTIONS-OF-GAINS> (10)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 666
<NUMBER-OF-SHARES-REDEEMED> (4862)
<SHARES-REINVESTED> 476
<NET-CHANGE-IN-ASSETS> 12015
<ACCUMULATED-NII-PRIOR> 967
<ACCUMULATED-GAINS-PRIOR> 54
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 20
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 19
<AVERAGE-NET-ASSETS> 13683
<PER-SHARE-NAV-BEGIN> 10.10
<PER-SHARE-NII> .350
<PER-SHARE-GAIN-APPREC> .15
<PER-SHARE-DIVIDEND> (.34)
<PER-SHARE-DISTRIBUTIONS> (.010)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.25
<EXPENSE-RATIO> .24
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0001006783
<NAME> TIP FUNDS
<SERIES>
<NUMBER> 090
<NAME> TARGET SELECT EQUITY FUND

<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 1095
<INVESTMENTS-AT-VALUE> 993
<RECEIVABLES> 221
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1215
<PAYABLE-FOR-SECURITIES> 203
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 46
<TOTAL-LIABILITIES> 249
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 999
<SHARES-COMMON-STOCK> 93439
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (1)
<ACCUMULATED-NET-GAINS> 70
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (102)
<NET-ASSETS> 966
<DIVIDEND-INCOME> 6
<INTEREST-INCOME> 2
<OTHER-INCOME> 0
<EXPENSES-NET> (8)
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 70
<APPREC-INCREASE-CURRENT> (102)
<NET-CHANGE-FROM-OPS> (32)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1272
<NUMBER-OF-SHARES-REDEEMED> (274)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 966
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 82
<AVERAGE-NET-ASSETS> 863
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> .350
<PER-SHARE-DIVIDEND> (0.010)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.34
<EXPENSE-RATIO> 1.300
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0001006783
<NAME> TIP FUNDS
<SERIES>
<NUMBER> 060
<NAME> CLOVER SMALL CAP FUND

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 16792
<INVESTMENTS-AT-VALUE> 15699
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 15699
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 37
<TOTAL-LIABILITIES> 37
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 16857
<SHARES-COMMON-STOCK> 1363
<SHARES-COMMON-PRIOR> 958
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (102)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1093)
<NET-ASSETS> 15662
<DIVIDEND-INCOME> 121
<INTEREST-INCOME> 26
<OTHER-INCOME> 0
<EXPENSES-NET> (229)
<NET-INVESTMENT-INCOME> (82)
<REALIZED-GAINS-CURRENT> 175
<APPREC-INCREASE-CURRENT> (4059)
<NET-CHANGE-FROM-OPS> (3966)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (1235)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7247
<NUMBER-OF-SHARES-REDEEMED> (2882)
<SHARES-REINVESTED> 1219
<NET-CHANGE-IN-ASSETS> 383
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 1014
<OVERDISTRIB-NII-PRIOR> (50)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 139
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 300
<AVERAGE-NET-ASSETS> 16372
<PER-SHARE-NAV-BEGIN> 15.94
<PER-SHARE-NII> (0.60)
<PER-SHARE-GAIN-APPREC> (3.22)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (1.17)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.49
<EXPENSE-RATIO> 1.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0001006783
<NAME> TIP FUNDS
<SERIES>
<NUMBER> 050
<NAME> CLOVER EQUITY VALUE FUND

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 79375
<INVESTMENTS-AT-VALUE> 91828
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 91828
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1022
<TOTAL-LIABILITIES> 1022
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 78080
<SHARES-COMMON-STOCK> 5728
<SHARES-COMMON-PRIOR> 6207
<ACCUMULATED-NII-CURRENT> 41
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 232
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 12453
<NET-ASSETS> 90806
<DIVIDEND-INCOME> 1575
<INTEREST-INCOME> 664
<OTHER-INCOME> 0
<EXPENSES-NET> (1282)
<NET-INVESTMENT-INCOME> 957
<REALIZED-GAINS-CURRENT> 195
<APPREC-INCREASE-CURRENT> (5217)
<NET-CHANGE-FROM-OPS> (4065)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (954)
<DISTRIBUTIONS-OF-GAINS> (12613)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 27976
<NUMBER-OF-SHARES-REDEEMED> (50655)
<SHARES-REINVESTED> 13258
<NET-CHANGE-IN-ASSETS> (27053)
<ACCUMULATED-NII-PRIOR> 1100
<ACCUMULATED-GAINS-PRIOR> 12612
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 866
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1307
<AVERAGE-NET-ASSETS> 117058
<PER-SHARE-NAV-BEGIN> 18.99
<PER-SHARE-NII> .150
<PER-SHARE-GAIN-APPREC> (1.12)
<PER-SHARE-DIVIDEND> (0.150)
<PER-SHARE-DISTRIBUTIONS> (2.02)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.85
<EXPENSE-RATIO> 1.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0001006783
<NAME> TIP INSTITUTIONAL FUNDS
<SERIES>
<NUMBER> 080
<NAME> CLOVER MAX CAP FUND

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 2024
<INVESTMENTS-AT-VALUE> 1815
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1815
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (39)
<TOTAL-LIABILITIES> (39)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1985
<SHARES-COMMON-STOCK> 193
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (209)
<NET-ASSETS> 1854
<DIVIDEND-INCOME> 30
<INTEREST-INCOME> 5
<OTHER-INCOME> 0
<EXPENSES-NET> (12)
<NET-INVESTMENT-INCOME> 23
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (209)
<NET-CHANGE-FROM-OPS> (186)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (23)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1986
<NUMBER-OF-SHARES-REDEEMED> (23)
<SHARES-REINVESTED> 22
<NET-CHANGE-IN-ASSETS> 1776
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 9
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 142
<AVERAGE-NET-ASSETS> 1372
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .150
<PER-SHARE-GAIN-APPREC> (0.79)
<PER-SHARE-DIVIDEND> (0.15)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.21
<EXPENSE-RATIO> .95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0001006783
<NAME> TIP FUNDS
<SERIES>
<NUMBER> 070
<NAME> CLOVER FIXED INCOME FUND

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 32007
<INVESTMENTS-AT-VALUE> 33383
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 33383
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8
<TOTAL-LIABILITIES> 8
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 31364
<SHARES-COMMON-STOCK> 3207
<SHARES-COMMON-PRIOR> 2387
<ACCUMULATED-NII-CURRENT> 12
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 623
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1376
<NET-ASSETS> 33375
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1873
<OTHER-INCOME> 0
<EXPENSES-NET> (218)
<NET-INVESTMENT-INCOME> 1655
<REALIZED-GAINS-CURRENT> 634
<APPREC-INCREASE-CURRENT> 861
<NET-CHANGE-FROM-OPS> 3150
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1661)
<DISTRIBUTIONS-OF-GAINS> (53)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14420
<NUMBER-OF-SHARES-REDEEMED> (7783)
<SHARES-REINVESTED> 1625
<NET-CHANGE-IN-ASSETS> 9898
<ACCUMULATED-NII-PRIOR> 1216
<ACCUMULATED-GAINS-PRIOR> 50
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 131
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 287
<AVERAGE-NET-ASSETS> 29162
<PER-SHARE-NAV-BEGIN> 9.92
<PER-SHARE-NII> .570
<PER-SHARE-GAIN-APPREC> .510
<PER-SHARE-DIVIDEND> (0.570)
<PER-SHARE-DISTRIBUTIONS> (0.020)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.41
<EXPENSE-RATIO> .75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000914243
<NAME> TIP INSTITUTIONAL FUNDS
<SERIES>
<NUMBER> 030
<NAME> PENN CAPITAL HIGH YIELD BOND FUND

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 19701
<INVESTMENTS-AT-VALUE> 17424
<RECEIVABLES> 0
<ASSETS-OTHER> 418
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 17842
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 20869
<SHARES-COMMON-STOCK> 2001
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 7
<OVERDISTRIBUTION-NII> (757)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2277)
<NET-ASSETS> 17842
<DIVIDEND-INCOME> 20
<INTEREST-INCOME> 758
<OTHER-INCOME> 0
<EXPENSES-NET> (50)
<NET-INVESTMENT-INCOME> 728
<REALIZED-GAINS-CURRENT> (757)
<APPREC-INCREASE-CURRENT> (2277)
<NET-CHANGE-FROM-OPS> (2306)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (721)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 20615
<NUMBER-OF-SHARES-REDEEMED> (141)
<SHARES-REINVESTED> 395
<NET-CHANGE-IN-ASSETS> 17842
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 40
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 152
<AVERAGE-NET-ASSETS> 12598
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .37
<PER-SHARE-GAIN-APPREC> (1.090)
<PER-SHARE-DIVIDEND> (.37)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.91
<EXPENSE-RATIO> .68
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0001006783
<NAME> TIP FUNDS
<SERIES>
<NUMBER> 100
<NAME> PENN CAPITAL SELECT FINANCIAL SERVICES FUND

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 861
<INVESTMENTS-AT-VALUE> 739
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 739
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 36
<TOTAL-LIABILITIES> 36
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 774
<SHARES-COMMON-STOCK> 67
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 4
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 47
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (122)
<NET-ASSETS> 703
<DIVIDEND-INCOME> 12
<INTEREST-INCOME> 2
<OTHER-INCOME> 0
<EXPENSES-NET> (10)
<NET-INVESTMENT-INCOME> 4
<REALIZED-GAINS-CURRENT> 53
<APPREC-INCREASE-CURRENT> (122)
<NET-CHANGE-FROM-OPS> (65)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (6)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 870
<NUMBER-OF-SHARES-REDEEMED> (102)
<SHARES-REINVESTED> 6
<NET-CHANGE-IN-ASSETS> 703
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 6
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 184
<AVERAGE-NET-ASSETS> 661
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .07
<PER-SHARE-GAIN-APPREC> .64
<PER-SHARE-DIVIDEND> (0.10)
<PER-SHARE-DISTRIBUTIONS> (0.20)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.50
<EXPENSE-RATIO> 1.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>