MEYERS SHEPPARD INVESTMENT TRUST, N-1A EL/A, 1996-06-05

MEYERS SHEPPARD INVESTMENT TRUST
N-1A EL/A, 1996-06-05

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<PAGE> 1

As filed with the Securities and Exchange Commission on June 5, 1996

Securities Act Registration No. 333 - 02111
Investment Company Registration No. 811 - 7581

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No. 2 / X /
----

Post-Effective Amendment No. / /
----
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 2 / X /
----

(Check appropriate box or boxes)

MEYERS SHEPPARD INVESTMENT TRUST
(A DELAWARE BUSINESS TRUST)
(Exact Name of Registrant as Specified in Charter)

9107 WILSHIRE BOULEVARD, SUITE 700
BEVERLY HILLS, CALIFORNIA 90210
(Address of Principal Executive Offices)

(310) 288-3720
(Registrant's Telephone Number, including Area Code)

SHELLY J. MEYERS
9107 WILSHIRE BOULEVARD, SUITE 700
BEVERLY HILLS, CALIFORNIA 90210
(Name and Address of Agent for Service)

With Copies to:

JOHN M. WOODBURY, JR., ESQ. BETH R. KRAMER, ESQ.
ANDREW F. POLLET, ESQ. MAYER BROWN & PLATT
POLLET & WOODBURY 1675 BROADWAY, SUITE 1900
10900 WILSHIRE BOULEVARD, SUITE 500 NEW YORK, NEW YORK 10019
LOS ANGELES, CALIFORNIA 90024

Approximate date of proposed public offering: June 7, 1996

It is proposed that this filing will become effective (check appropriate box)

/ / immediately upon filing pursuant to paragraph (b)

/ / on (date) pursuant to paragraph (b)

/ / 60 days after filing pursuant to paragraph (a)(1)

/ / on (date) pursuant to paragraph (a)(1)

/ / 75 days after filing pursuant to paragraph (a)(2)

/ / on (date) pursuant to paragraph (a)(2) of Rule 485

Pursuant to Rule 24f-2(a)(1) under the Investment Company Act of 1940, the
Registrant hereby declares that an indefinite number of its Shares of
Beneficial Interest (par value $0.00001 per share) is being registered by this
Registration Statement.

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the Registration Statement shall
become effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE> 2
MEYERS SHEPPARD PRIDE FUND
CROSS REFERENCE SHEET
Pursuant to Rule 495

<TABLE>
<CAPTION>
PART A. LOCATION IN PROSPECTUS
<S> <C> <C>

Item 1 Cover Page . . . . . . . . . . . . . . . . . Front Cover Page

Item 2. Synopsis . . . . . . . . . . . . . . . . . . Prospectus Summary; Expense Summary

Item 3. Condensed Financial Information . . . . . . . Not Applicable

Item 4. General Description of Registrant . . . . . . Front Cover Page; Prospectus Summary; Investment And
Social Objectives and Policies

Item 5. Management of the Fund . . . . . . . . . . . Prospectus Summary; Management And Service Providers;
Inside Back Cover Page; Other Information Concerning
Shares of the Fund

Item 5A. Management's Discussion of Fund Performance . Not Applicable

Item 6. Capital Stock and Other Securities . . . . . Other Information Concerning Shares of the Fund; Tax
Matters

Item 7. Purchase of Securities Being Offered . . . . Purchases and Redemptions of Shares; Other Information
Concerning Shares of the Fund;

Item 8. Redemption or Repurchase . . . . . . . . . . Purchases and Redemptions of Shares

Item 9. Pending Legal Proceedings . . . . . . . . . . Not Applicable

PART B LOCATION IN STATEMENT OF ADDITIONAL
INFORMATION

Item 10. Cover Page . . . . . . . . . . . . . . . . . Front Cover Page

Item 11. Table of Contents . . . . . . . . . . . . . . Front Cover Page

Item 12. General Information and History . . . . . . . The Fund

Item 13. Investment Objectives and Policies . . . . . Investment And Social Objectives, Policies And
Restrictions

Item 14. Management of the Fund . . . . . . . . . . . Management Of And Service Providers For The Trust And
The Fund

Item 15. Control Persons and Principal Holders of
Securities . . . . . . . . . . . . . . . . . Management Of And Service Providers For The Trust And
The Fund

Item 16. Investment Advisory and Other Services . . . Management Of And Service Providers For The Trust And
The Fund; Independent Auditors

Item 17. Brokerage Allocation and Other Practices . . Fund Transactions and Brokerage Commissions

Item 18. Capital Stock and Other Securities . . . . . Description of Shares, Voting Rights and Liabilities

Item 19. Purchase, Redemption and Pricing of Securities
Being Offered . . . . . . . . . . . . . . . . Determination of Net Asset Value; Valuation of
Fund Securities

Item 20. Tax Status . . . . . . . . . . . . . . . . . Taxation
</TABLE>

<PAGE> 3
<TABLE>
<S> <C> <C>
Item 21. Underwriter . . . . . . . . . . . . . . . . Management Of And Service Providers For The Trust And
The Fund

Item 22. Calculation of Performance Data . . . . . . . Performance Information

Item 23. Financial Statements . . . . . . . . . . . . Financial Statements*
</TABLE>

PART C.

Information required to be included in Part C is set forth under the
appropriately numbered item in Part C of this registration statement.

* To be supplied by a Post-Effective Amendment to this Registration
Statement containing the audited financial statements required under Item
24(a) hereof, together with consent of independent accountants.

<PAGE> 4

PROSPECTUS DATED JUNE 7, 1996

MEYERS SHEPPARD PRIDE FUND

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The Meyers Sheppard Pride Fund (the "Fund") is organized as a separate
series of the Meyers Sheppard Investment Trust (the "Trust"), a business trust
organized under the laws of the State of Delaware. The Fund is an open-ended
no-load diversified mutual fund whose overall investment objective is to attain
long-term capital appreciation through investing in a diversified portfolio of
equity securities of under-valued but nevertheless fundamentally sound
companies identified as generally having progressive policies towards gays and
lesbians. See "Investment And Social Objectives And Policies" herein. There
can be no assurance that the Fund will achieve its investment objective.

The Investment Manager for the Fund is Meyers, Sheppard & Co., LLC, a
California limited liability company. The Distributor for the Fund is Furman
Selz LLC, a Delaware limited liability company. Furman Selz LLC is also the
Administrator, Fund Accounting Agent and Transfer Agent of the Fund. The
Custodian of the Fund is Wells Fargo Bank, N.A..

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

This Prospectus sets forth concisely the information concerning the Fund
that a prospective investor should know before investing. Investors should
read this Prospectus and retain it for future reference.

The Fund has filed with the Securities and Exchange Commission a Statement
of Additional Information, dated June 7, 1996, as amended from time to time,
which contains more detailed information about the Fund and the Trust and is
incorporated into this Prospectus by reference. An investor may obtain a copy
of the Statement of Additional Information without charge by contacting the
Distributor of the Fund, Furman Selz LLC (see the section of this Prospectus
captioned "Purchases and Redemptions of Shares" for address).

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY BANK OR OTHER DEPOSITORY INSTITUTION, AND THE SHARES ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
FEDERAL, STATE OR OTHER GOVERNMENTAL AGENCY.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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

June 7, 1996

<PAGE> 5
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Expense Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Investment And Social Objectives And Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Management And Service Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Purchases and Redemptions of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Other Information Concerning Shares of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Performance Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>

2
<PAGE> 6
PROSPECTUS SUMMARY

WHAT IS THE FUND

The Meyers Sheppard Pride Fund (the "Fund") is organized as a separate
series of the Meyers Sheppard Investment Trust (the "Trust"), a business trust
organized under the laws of the State of Delaware on March 25, 1996. The Fund
is an open-ended no-load diversified management investment company whose
overall investment objective is to attain long-term capital appreciation
through investing in a diversified portfolio of equity securities of
under-valued but nevertheless fundamentally sound companies identified by the
Investment Manager as generally having progressive policies towards gays and
lesbians, but at a minimum having in place specifically stated policies against
discrimination in hiring and promotion based upon sexual orientation. See
"Investment And Social Objectives And Policies" herein.

The Fund is the first series to be established under the Trust. As a
diversified fund, the Fund is required, by the Investment Company Act of 1940,
as amended (the "Investment Company Act"), with respect to 75% of its assets,
to invest no more than 5% of its assets in the securities of any one issuer,
and not more than 10% of the outstanding voting securities of an issuer may be
owned.

The Fund's investment and social objectives and policies, including
the identification of companies which have progressive policies towards gays
and lesbians, are determined by the Investment Manager of the Fund, subject to
the Board of Trustees providing broad supervision over the affairs of both the
Fund and the Trust. The determination of which companies have progressive
policies toward gays and lesbians is generally based upon criteria determined
from time-to-time by the Investment Manager and approved by the Board of
Trustees. The Investment Manager has, to date, identified over 325
publicly-traded companies meeting this criteria, most of which are listed on
the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500"). For
further information about the Board of Trustees, see "Management And Service
Providers" herein. A majority of the Board of Trustees are not affiliated with
the Investment Manager.

WHO IS THE FUND'S INVESTMENT MANAGER

The Investment Manager of the Fund, Meyers, Sheppard & Co. LLC, a
California limited liability company ("Meyers Sheppard"), serves as the Fund's
manager and investment adviser pursuant to an Investment Management Agreement.
The Investment Manager generally supervises (subject to the overall authority
of the Board of Trustees and officers of the Trust) the overall administration
of the Fund, including its various agents and service providers, including
those providing distribution, fund accounting, dividend disbursement, transfer
agent and custodian services. The Investment Manager also manages the
investments of the Fund on a day to day basis in accordance with the Fund's
investment and social objectives and policies, and determines the composition
of the securities in which the Fund may invest (i.e., those companies
identified as having anti-discrimination policies in place and demonstrating
other progressive policies towards gays and lesbians). For its management and
investment advisory services, the Investment Manager receives from the Fund a
monthly fee equal, on an annual basis, to 1% of the Fund's average daily net
assets. See "Management And Service Providers" herein.

HOW DO YOU PURCHASE AND REDEEM SHARES OF THE FUND

Shares of the Fund are sold continuously by the Distributor of the
Fund, Furman Selz LLC ("Furman Selz"), at the next determined net asset value
per share. The minimum initial investment in the Fund is $1,000, and
subsequent investments are $100. A lower initial investment of $250 is
permitted for Automatic Investment Plans, with subsequent investments allowed
at a minimum of $50.

The Trust, on behalf of the Fund, has adopted a Distribution Plan
which permits reimbursement of certain expenses incurred by the Distributor in
connection with the distribution of shares of the Fund, up to a maximum of
0.25% of net asset value annually. See "Management And Service Providers" and
"Plan Of Distribution," herein.

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<PAGE> 7
The Fund offers to redeem shares of the Fund from its shareholders at
any time at next determined net asset value per share. The redemption price
may be more or less than the purchase price.

No sales load is charged with respect to either the purchase or
redemption of Fund shares. An investor should contact the Distributor
regarding any further information describing the procedures under which Fund
shares may be purchased and redeemed. See "Purchases And Redemptions" herein.

WHEN DOES THE FUND PAY DIVIDENDS AND MAKE DISTRIBUTIONS

The Fund will distribute substantially all of its net investment
income and capital gains annually, generally in December. Dividends or
distributions declared in December but actually paid the following January will
be includable in an investor's income as of the record date (usually in
December) of such dividends or distributions. See "Taxation" herein.

ADMINISTRATIVE SERVICES

Furman Selz is the Administrator, Fund Accounting Agent and Transfer
Agent of the Fund. In its capacity as the Fund's Administrator, Furman Selz
provides certain administrative and managerial support services to the Fund, in
consideration of which Furman Selz is paid an administration fee per year equal
to 0.15% of the first $100 million in aggregate Fund assets, 0.10% for the next
$400 million, 0.07% for the next $500 million, and 0.06% for aggregate Fund
assets in excess of $1 billion. As Fund Accounting Agent, Furman Selz
calculates the Fund's net asset value on a daily basis, in consideration of
which it is paid a fund accounting fee of $35,000 per year plus reimbursement
of out-of-pocket expenses. In its capacity as Transfer Agent for the Fund,
Furman Selz provides dividend disbursing, registrar and transfer agency
services to the Fund and its shareholders, in consideration of which it is paid
a transfer agency fee equal to $15 per year per each shareholder of the Fund,
subject to a $12,000 per year minimum. Furman Selz is entitled to receive a
minimum of $150,000 per year for provision of the aforesaid services. See
"Management And Service Providers" herein.

RISK FACTORS

There can be no assurance that the Fund will be able to achieve its
investment objective. Since the Fund will limit its investments to equity
securities of companies which have anti-discrimination policies in place and
demonstrate other progressive policies towards gays and lesbians, such social
policy will tend to limit the availability of investment opportunities to the
Fund compared to that for other investment companies that have a comparable
investment objective to that of the Fund. See "Investment And Social
Objectives And Policies" herein.

Common stocks, the most familiar type of equity securities, represent
an equity (ownership) interest in a corporation. Although equity securities
have a history of long-term growth in value, their prices fluctuate based on
changes in a company's financial condition and on overall market, economic and
political conditions. Smaller companies are especially sensitive to these
factors.

Investments of the Fund's assets in "illiquid securities," i.e.,
securities that are restricted in their transfer or for which market quotations
are otherwise not readily available or repurchase agreements over seven days,
may restrict the ability of the Fund to dispose of its investments in a timely
fashion and for a favorable price. The risks associated with illiquidity are
particularly acute in situations in which the Fund's operations require cash,
such as when the Fund redeems for shares of beneficial interests or pays
distributions, and may result in the Fund borrowing to meet short-term cash
requirements or incurring capital losses on the sale of such investments.

As a recently created entity, the Trust will be subject to all the
risks incident to the creation of a new business, including the absence of a
history of operation, and there can be no guarantee that the investment
objective of the Fund will be attained. The Investment Manager is a newly
created entity and, as such, prior to the commencement of operations of the
Fund, had no previous experience in providing investment management services to
an investment company; however, the Investment Manager's designated Portfolio
Manager for the Fund has provided analytical and portfolio management services
to investment companies and institutional asset management clients, and the
Operations Manager of the Investment Manager and the Fund's Administrator,
Furman

4
<PAGE> 8

Selz, have provided operations, compliance and administrative services for
investment companies. See "Management And Service Providers" in general, and
"Management and Service Providers - Investment Manager" and "Management And
Service Providers - Portfolio Manager" in particular, below.

There are market risks inherent in any investment, and there is no
assurance that the primary investment objective of the Fund will be achieved or
that any income will be earned. Moreover, the application of the investment
policies is dependent upon the judgment of the Investment Manager. A
prospective purchaser of shares of the Fund should realize there are risks in
any policy dependent upon such judgment and that no representation is made that
the investment objective of the Fund will be accomplished or that there may not
be substantial loses in any particular investment. At any time, the value of
the Fund's shares may be more or less than the cost of such shares to the
investor. See "Investment And Social Objectives And Policies" herein.

Some of the securities included in the Fund may be those of foreign
issuers (provided that the securities are publicly-traded in the United States
in the form of American Depositary Receipts or similar instruments the market
for which is denominated in United States dollars). Securities of foreign
issuers may represent a greater degree of risk (e.g., as a result of exchange
rate fluctuation, tax provisions, war or expropriation) than do securities of
domestic issuers. See "Risk Factors" herein.

EXPENSE SUMMARY

The following table provides a summary of (i) Shareholder Transaction
Expenses relating to purchases and sales of shares of the Fund, and (ii)
estimated Annual Operating Expenses of the Fund for its first year of
investment operations, expressed as a percentage of average daily net assets.
All of the Fund's Annual Operating Expenses will be paid out of the Fund's
assets, and will therefore be indirectly borne by the shareholders of the Fund.

SHAREHOLDER TRANSACTION EXPENSES

<TABLE>
<S> <C>
Maximum Sales Load Imposed on Purchases . . . . . . . . . . . . . . . . . . . . . None
Sales Load Imposed on Reinvested Dividends . . . . . . . . . . . . . . . . . . . None
Deferred Sales Load Imposed on Redemptions . . . . . . . . . . . . . . . . . . . . None
Exchange Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None
----
Total Shareholder Transaction Expenses . . . . . . . . . . . . . . . . . . . None
====

ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)(1)

Investment Management Fee (after waiver)(2) . . . . . . . . . . . . . . . . . . . 0.89%
Distribution 12b-1 Fee(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25%
Other Expenses (estimated)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . 1.11%
-----
Total Annual Operating Expenses (estimated, after waiver)(5) . . . . . . . . 2.25%
=====
</TABLE>

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(1) As of the date of this Prospectus, the Fund has not commenced
investment operations. For the sole purpose of preparing the foregoing table,
the Fund has assumed it will have $30 million in average daily net assets for
its first year of operations, and has also made certain estimates relating to
the Annual Operating Expenses for a Fund of such size. The average daily net
assets of the Fund for its first year of operations could vary significantly
from $30 million.

(2) Under the Investment Management Agreement, the Fund will pay
the Investment Manager, Meyers Sheppard, a monthly investment management fee
equal, on an annual basis, to 1.0% of the Fund's average daily net assets. The
Investment Manager has undertaken to waive the portion of its investment
management fee necessary to maintain Total Annual Operating Expenses at no more
than 2.25% per year of average daily net assets. The Fund estimates that the
Investment Manager will waive, for the first year of the Fund based upon $30
million in average net daily assets, 0.11% of its fee to maintain Total Annual
Operating Expenses at the 2.25% per year level. In addition to the foregoing
mandatory waiver, the Investment Manager reserves the right at anytime to
reduce and/or waive all or part of its investment management fee.

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(3) Pursuant to the terms of the Distribution Plan, the Fund will
pay its Distributor, Furman Selz, per year, up to 0.25% of the Fund's average
daily net assets in reimbursement of, or in anticipation of, expenses incurred
by the Distributor in connection with the sale of shares of the Fund. A
long-term shareholder in the Fund may, as a result of the Distribution Plan,
pay more than the economic equivalent of the maximum distribution charges
permitted by the rules of the National Association of Securities Dealers, Inc.
See "Management And Service Providers" herein.

(4) "Other Expenses" include fees to be paid to Furman Selz in its
capacities as Administrator, Fund Accounting Agent and Transfer Agent for the
Fund, and to Wells Fargo for its services as Custodian for the Fund. See
"Management And Service Providers" herein.

(5) Without the waiver by the Investment Manager of a portion of
its investment management fee as described above, estimated Total Annual
Operating Expenses for the Fund for its first year of operations would be 2.36%
of average daily net assets. The Fund estimates that the Fund would require
average daily net assets of approximately $40 million for Total Annual
Operating Expenses to decline below the level of 2.25% of average daily net
assets per year.

EXAMPLE

A shareholder of the Fund would indirectly pay the following estimated
expenses(1) on a $1,000 investment in the Fund, assuming: (i) a 5% annual
return on such investment, and (ii) the redemption of the investment at the end
of each of the following time periods:

<TABLE>
<S> <C>
1 year . . . . . . . . . . . . . . . . . . . . . . $22.81
3 years . . . . . . . . . . . . . . . . . . . . . . $70.67
</TABLE>

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(1) Based upon the same assumptions, and subject to the same
qualifications, as set forth above in the table captioned "Annual Operating
Expenses."

The Example set forth above is hypothetical and should not be
considered a representation of future expenses of the Fund. Moreover, the
Fund's actual performance will vary and may result in actual returns that are
greater or less than 5%.

The foregoing tables and example have not been audited by the Fund's
independent accountants. For more information with respect to certain
estimated expenses of the Fund, see "Management And Service Providers" herein.

INVESTMENT AND SOCIAL OBJECTIVES AND POLICIES

INVESTMENT OBJECTIVE AND SOCIAL OBJECTIVE

The overall investment objective of the Fund (the "Investment
Objective") is to attain long-term capital appreciation by investing in a
diversified portfolio of equity securities of undervalued but nevertheless
fundamentally sound companies which have been identified as having met the
Social Objective. Companies which meet the "Social Objective" are defined as
companies which, in general, have been identified as having progressive
policies towards gays and lesbians, but at a minimum have in place specifically
stated policies against discrimination in hiring and promotion based upon
sexual orientation (the "Fundamental Social Criteria").

The Fund believes that enterprises which are responsive toward
addressing the concerns of the gay and lesbian community and other progressive
socially-sensitive constituencies will benefit financially from the consumer
loyalty generated by such social awareness and will therefore be more likely to
prosper in the long-term. The Fund also believes such enterprises will be less
likely to incur certain legal liabilities that may arise when an enterprise is
found to discriminate against minorities, such as members of the gay and
lesbian community. The Fund believes such enterprises should also, over the
longer term, be able to generate additional stockholder market-value as an
indirect result of the greater investment in such enterprises, through the
Fund, by the gay and lesbian community (which, per capita, is one of the
wealthiest demographic groups in the United States), as well as supporters of
the gay and lesbian community.

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INVESTMENT STRATEGY

In order to achieve the Investment Objective, the Fund will use a
value-based investment approach focusing on a longer-term market cycle (at
least three to five years), consistent with moderate levels of risk, wherein
the Investment Manager will identify companies exhibiting the following
investment characteristics: (1) low or inexpensive current value relative to
earnings estimates, cash flow, book value and/or break-up value, (2) good
management, (3) strong business fundamentals, and (4) positive earnings
momentum.

The equity securities the Fund may invest in include common stocks,
preferred stocks and warrants, and certain debt instruments convertible into
stock, primarily in publicly-traded companies. Publicly-traded companies
refers to companies whose equity securities are traded over a national stock
exchange or over-the-counter through the National Association of Securities
Dealers Automatic Quotation ("NASDAQ") system or the National Association of
Securities Dealers, Inc. ("NASD") Electronic Bulletin Board. The Fund may
invest in companies in all ranges of capitalization. The Investment Manager
expects that no less than 60% of the Fund's net assets will be invested in
equity securities of "large capitalization" companies, which the Investment
Manager defines as companies with total capitalization of at least $2 billion.

Since it is anticipated that most equity securities will be held for
the longer-term using this strategy, the Investment Manager anticipates there
will likely be a low rate of portfolio turnover, and estimates portfolio
turn-over in the first year of the Fund will be approximately 30% to 60%.

The Investment Manager expects that under normal market conditions the
Fund will typically invest up to 95% of its assets (and sometimes virtually all
of its assets) in the types of equity securities described above and, subject
to certain limitations, certain options in these securities for hedging
purposes. Under distressed market conditions, the Fund may maintain its assets
in cash or cash-equivalents, or invest in money-market instruments or
obligations of the United States government or government-sponsored enterprises
and other types of government-backed securities. Such investments would be
temporary defensive in nature and would not be expected to exceed 15% of the
Fund's net assets. Although returns on these assets are historically less than
investment in equity and other non-governmental types of securities, the risk
of loss in investing in such instruments is lower as well.

IDENTIFICATION OF COMPANIES WHICH SATISFY SOCIAL OBJECTIVE

The determination of which companies have satisfied the Social
Objective, and may therefore be considered as appropriate investment vehicles
for the Fund, is based upon recommendations of the Investment Manager and the
approval by the Board of Trustees. As of the date of this Prospectus, over 325
publicly-traded companies, most of which are listed on the S&P 500, have been
identified as having satisfied the Social Objective.

In making its recommendations, the Investment Manager evaluates
companies based upon (1) the Fundamental Social Criteria and (2) such
additional criteria and considerations consistent with the Social Objective as
are determined reasonable by the Investment Manager from time-to-time in its
sole discretion, and approved in general by the Board of Trustees (the
"Non-Fundamental Social Criteria"). Such methodology is, by its nature,
subjective.

As of the date of this Prospectus, the Non-Fundamental Social Criteria
consists of two separate areas of general focus, employee relations and
corporate citizenship.

In evaluating a company's gay and lesbian employee relations, the
Investment Manager evaluates the company's record and policies with respect to
labor matters affecting gay and lesbian employees, such as: (1) the company's
commitment to equal employment opportunity for gays and lesbians, both overall
and in executive positions, and the scope of the company's policies against
discrimination based upon sexual orientation; (2) the breadth, quality and
innovation of the company's employee benefit programs and their positive effect
on gay and lesbian employees (including inclusion of gay and lesbian partners
and families in employee benefit programs); and (3) the company's relationships
with gay and lesbian suppliers, vendors, and customers.

In evaluating a company's corporate citizenship, the Investment
Manager reviews the company's record on gay and lesbian related charitable
giving and other philanthropic activities and its interaction with the gay and
lesbian community, such as advertising in gay and lesbian directed publications
or other media.

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<PAGE> 11
It is not necessary that a company satisfy all of the factors and
considerations described above as part of the Non-Fundamental Social Criteria
in order to be identified as having satisfied the Social Objective. However,
every company must satisfy the Fundamental Social Criteria in order to be
included on the list of approved companies.

The Investment Manager uses publicly available information in
evaluating companies, including information disseminated by the Human Rights
Campaign, the largest national gay and lesbian organization. The Investment
Manager also directly reviews company policies and, in certain cases, discusses
those policies with the company's management.

The Investment Manager intends to vote proxies of companies included
in the Fund's portfolio consistent with the Social Objective. The inclusion of
a company on the Fund's list of approved companies with progressive policies
towards gays and lesbians does not imply that the company has requested it be
included on the list or approved such inclusion, has sought the approval of the
Fund with respect to the development and implementation of the company's
employment or corporate citizenship policies, or is affiliated with the Fund in
any manner.

INVESTMENT POLICIES

The Fund will diversify its holdings to reduce the risks of investing.
As a diversified Fund, the Fund is required, by the Investment Company Act with
respect to 75% of its assets, to invest no more than 5% of its assets into the
securities of any one issuer, and not more than 10% of the outstanding voting
securities of an issuer may be owned. In addition, the Fund may not invest
more than 25% of its total assets in any one industry.

The Fund may invest up to 10% of its total assets in convertible
securities, including bonds, debentures, notes, preferred stocks, warrants or
other securities that may be converted into or exchanged for a prescribed
amount of common stock of the same or a different issuer within a particular
period of time at a specified price or formula. Certain convertible securities
may in addition be callable, in whole or in part, at the option of the issuer.
A convertible security entitles the holder to receive interest paid or accrued
on debt or the dividend paid on preferred stock until the convertible security
matures or is redeemed, converted or exchanged. Before conversion, convertible
securities have characteristics similar to nonconvertible debt securities in
that they ordinarily provide a stable stream of income with generally higher
yields than those of common stocks of the same or similar issuers. Convertible
securities rank senior to common stock in a corporation's capital structure but
are usually subordinated to comparable nonconvertible securities. The
Investment Manager will limit investments in convertible securities to those
generally considered to be "investment grade" debt securities, which the
Investment Manager defines as being rated BBB or higher by Standard & Poors or
Baa or higher by Moodys. The highest rated debt securities (securities rated
AAA by Standard & Poors or Aaa by Moodys) carry, in the opinion of such
investments ratings agencies, the smallest degree of investment risk and the
capacity to pay interest and repay principal is very strong.

The Fund may not invest more than 15% of its net assets in securities
that are illiquid by virtue of the absence of a readily available market or
legal or contractual restrictions on resale (including repurchase agreements
which have a maturity of longer than seven days). Securities that have legal
or contractual restrictions on resale but have a readily available market are
not considered illiquid for purposes of this limitation.

Historically, illiquid securities have included securities subject to
contractual or legal restrictions on resale because they have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
securities which are otherwise not readily marketable, and repurchase
agreements having a maturity of longer than seven days. Securities which have
not been registered under the Securities Act are referred to as privately
placed or restricted securities and are purchased directly from the issuer or
in the secondary market. Mutual funds do not typically hold a significant
amount of these restricted or other illiquid securities because of the
potential for delays on resale and uncertainty in valuation. Limitations on
resale may have an adverse effect on the marketability of portfolio securities
and a mutual fund might be unable to dispose of restricted or other illiquid
securities promptly or at reasonable prices and might thereby experience
difficulty satisfying redemptions within seven days. A mutual fund might also
have to register such restricted securities in order to dispose of them
resulting in additional expense and delay. Adverse market conditions could
impede such a public offering of securities.

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<PAGE> 12
Restricted securities include those that are subject to restrictions
contained in the securities laws of other countries. However, securities that
are freely marketable in the country in which they are principally traded would
not be considered illiquid. The Fund will treat any securities that are held
in countries with restrictions on repatriation of more than seven days, as
illiquid securities for purposes of the 15% limitation.

In recent years, a large institutional market has developed for
certain securities that are not registered under the Securities Act, including
repurchase agreements, commercial paper, foreign securities, municipal
securities and corporate bonds and notes. Institutional investors depend on an
efficient institutional market in which the unregistered security can be
readily resold or on an issuer's ability to honor a demand for repayment. The
fact that there are contractual or legal restrictions on resale to the general
public or to certain institutions may not be indicative of the liquidity of
such investments.

Rule 144A under the Securities Act establishes a "safe harbor" from
the registration requirements of the Securities Act for resales to qualified
institutional buyers of certain securities otherwise subject to restriction on
resale to the general public. The Investment Manager anticipates that the
market for certain restricted securities will expand further under Rule 144A as
a result of the development of automated systems for the trading, clearance and
settlement of unregistered securities of domestic and foreign issuers, such as
the PORTAL System sponsored by the NASD.

The Investment Manager will monitor the liquidity of restricted
securities in the Fund under the supervision of the Board of Trustees. In
reaching liquidity decisions, the Investment Manager may consider, inter alia,
the following factors: (1) the unregistered nature of the security; (2) the
frequency of trades and quotes for the security; (3) the number of dealers
wishing to purchase or sell the security and the number of other potential
purchasers; (4) dealer undertakings to make a market in the security; and (5)
the nature of the security and the nature of the marketplace trades (e.g., the
time needed to dispose of the security, the method of soliciting offers and the
mechanics of the transfer).

The Fund may invest cash reserves in (1) direct obligations and/or
short-term debt securities (i.e., securities having a remaining maturity of one
year or less) issued by agencies or instrumentalities of the United States
Government and/or (2) bankers' acceptances, commercial paper or certificates of
deposit, provided that the issuer satisfies the Social Objective of the Fund.
Although the U.S. government provides financial support to U.S. government
sponsored agencies or instrumentalities, no assurance can be given that it will
always do so. The U.S. government and its agencies and instrumentalities do
not guarantee the market value of their securities; consequently, the value of
such securities will fluctuate. The Fund's policy is to hold its assets in
such securities pending readjustment of its portfolio holdings of stocks in
order to meet anticipated redemption requests.

In accordance with the Investment Company Act, the Fund may invest a
maximum of up to 10% of the value of its total assets in securities of other
investment companies, and the Fund may own up to 3% of the total outstanding
voting stock of any one investment company. In addition, up to 5% of the value
of the Fund's total assets may be invested in the securities of any one
investment company. As an investor in an investment company, the Fund would
bear its ratable share of that investment company's expenses, including its
administrative and advisory fees. At the same time, the Fund would continue to
pay its own investment management fees and other expenses, however, the
Investment Manager has agreed to waive its fees to the extent necessary to
comply with state securities laws.

The Fund will readjust its securities holdings periodically to the
extent the Investment Manager deems it prudent to do so, and subject to the
overall supervision and approval of the Board of Trustees. The timing and
extent of adjustments in the holdings of the Fund will reflect the Investment
Manager's judgment as to (1) the appropriate portfolio mix to achieve the
investment performance objective of the Fund, (2) the appropriate balance
between the goal of correlating the holdings of the Fund with its Social
Objective, (3) the goals of minimizing transaction costs and keeping sufficient
reserves available for anticipated redemptions of shares, and (4) compliance
with certain restrictions of the Fund imposed by the Fund's investment
policies, including those mandated by the Investment Company Act. See
"Fundamental Investment Policies And Restrictions" herein. There can be no
assurance that any portfolio enhancement strategies will be successful, and the
performance of the Fund may as a result be worse than if such strategies were
not undertaken. The Board of Trustees of the Fund will receive and review, at
least quarterly, a report prepared by the Investment Manager evaluating the
performance of the Fund, and will consider what action, if any, should be taken
in the event of a significant change in the performance of the Fund.

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<PAGE> 13
The Fund's primary consideration in placing securities transactions
with broker-dealers for execution is to obtain, and maintain the availability
of, execution at the most favorable prices and in the most effective manner
possible. For further discussion regarding securities trading by the Fund, see
the Statement of Additional Information.

The Fund may make short sales of securities or maintain a short
position in securities provided such investment is otherwise consistent with
the Fund's Investment Objective and Social Objective. Pursuant to the
Investment Company Act, the Fund will maintain government securities and
certain other assets in amounts sufficient to cover the fair market value of
such sales and positions plus margin posted with brokers for such sales and
positions. No more than 25% of the Fund's net assets will be used as
collateral for such short positions at any one time.

FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS

Certain of the Fund's investment policies and restrictions are
"fundamental" and, as such, are subject to change only with shareholder
approval. All policies stated throughout this Prospectus, other than those
identified in this section as fundamental, may be changed without shareholder
approval. The Fund's fundamental policies include its Investment Objective,
certain restrictions on its investments under applicable securities laws, and
its Fundamental Social Criteria. Although adherence to the Fundamental Social
Criteria is a fundamental policy, the other factors and considerations used by
the Investment Manager in making its recommendations consistent with the
overall Social Objective and the Board in approving such recommendations are
discretionary and non-fundamental.

The fundamental policies and restrictions may not be changed without
the approval of the holders of a majority of the Fund's shares (which, as used
in this Prospectus, means the lesser of (1) more than 50% of the outstanding
shares of the Fund, or (2) 67% or more of the outstanding shares of the Fund
present at a meeting at which holders of more than 50% of the Fund's
outstanding shares are represented in person or by proxy). If there were a
change in the Fund's fundamental policies and restrictions, shareholders should
consider whether the Fund remains an appropriate investment in light of their
then-current financial positions and needs.

The Statement of Additional Information includes a complete discussion
of the foregoing matters as well as other investment policies and a listing of
specific investment restrictions which govern the Fund's investment policies.
In order to permit the sale of the Shares in certain states, the Fund reserves
the right to may make commitments more restrictive than the investment policies
and restrictions set forth above. If the Fund determines that any such
commitment is not in its best interests, it may choose not to sell the Shares
in these states or seek a waiver in certain states.

RISK FACTORS

INVESTMENT OBJECTIVE

There can be no assurance that the Fund will be able to achieve its
Investment Objective. It should be noted that the limitation of the Fund's
investments to equity securities of companies identified as meeting the Social
Objective will tend to limit the availability of investment opportunities to
the Fund compared to that for other investment companies that have a comparable
investment objective to that of the Fund.

COMMON STOCKS

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<PAGE> 14
CONVERTIBLE SECURITIES

Investments in convertible securities of a corporation generally
entail less risk than the corporation's common stock, although the extent to
which such risk is reduced depends in large measure upon the degree to which
the convertible security sells above its value as a fixed income security.
Convertible securities have unique investment characteristics in that they
generally (1) have higher yields than common stocks, but lower yields than
comparable non-convertible securities, (2) are less subject to fluctuation in
value than the underlying stock since they have fixed income characteristics,
and (3) provide the potential for capital appreciation if the market price of
the underlying common stock increases. The investment value of a convertible
security is influenced by changes in interest rates, with investment value
declining as interest rates increase and increasing as interest rates decline.
The credit standing of the issuer and other factors also may have an effect on
the convertible security's investment value. The conversion value of a
convertible security is determined by the market price of the underlying common
stock. If the conversion value is low relative to the investment value, the
price of the convertible security is governed principally by its investment
value. Generally, the conversion value decreases as the convertible security
approaches maturity. To the extent the market price of the underlying common
stock approaches or exceeds the conversion price, the price of the convertible
security will be increasingly influenced by its conversion value. A
convertible security generally will sell at a premium over its conversion value
by the extent to which investors place value on the right to acquire the
underlying common stock while holding a fixed income security. The Fund only
intends to invest in convertible securities where the value of the option is
minimal and the convertible security trades on the basis of its coupon.

ILLIQUID AND RESTRICTED SECURITIES

Investments of the Fund's assets in illiquid securities, (i.e.,
securities that are restricted in their transfer or for which market quotations
are otherwise not readily available or repurchase agreements over seven days),
may restrict the ability of the Fund to dispose of its investments in a timely
fashion and for a favorable price. The risks associated with illiquidity are
particularly acute in situations in which the Fund's operations require cash,
such as when the Fund redeems for shares of beneficial interests or pays
distributions, and may result in the Fund borrowing to meet short-term cash
requirements or incurring capital losses on the sale of such investments.

SECURITIES OF FOREIGN ISSUERS

LOANS OF SECURITIES

The Fund has the authority to lend its securities to brokers, dealers
and financial institutions provided, among other things, that the loan is
secured continuously by collateral consisting of U.S. Government securities or
cash or letters of credit, which is marked to the market daily to ensure that
each loan is fully collateralized at all times. Loans of securities involve a
risk that the borrower may fail to return the securities or may fail to provide
additional collateral.

OPTIONS

The Fund may enter into certain transactions involving stock options
for the purpose of hedging against possible increases in the value of
securities which are expected to be purchased by the Fund or possible declines
in the value of securities which are held by the Fund. Were the Fund to
establish an option position for the purpose of hedging against investment
risks, and would do so only if there appears to be a liquid secondary market
therefor, there can be no assurance that such a market will exist for any
particular option contract at any specific time. In that event, it may not be
possible to close out a position held by the Fund, and the Fund could be
required

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<PAGE> 15
to purchase or sell the instrument or instruments underlying an option, make or
receive a cash settlement or meet ongoing variation margin requirements. The
inability to close out option positions also could have an adverse impact on
the Fund's ability effectively to hedge its portfolio.

The Fund will enter only into exchange-traded options. At all times
when an option position is outstanding, the Fund will maintain a segregated
deposit with the Fund's custodian of cash, money market instruments or
high-quality securities sufficient in order to cover the exposure of that
position.

SHORT POSITIONS

Short selling or short positions by the Fund involves the Fund selling
a security that it does not own or it borrows from a broker. When the fund
purchases the security to replace the borrowed security, if the value of the
security declines as anticipated, the Fund will profit to the extent of the
difference between the purchase price and the sales price. If the price of the
security increases, the Fund will suffer a loss. Short selling or short
positions by the Fund involve a risk that the price of the security will not
decrease, as anticipated, and the Fund will suffer a loss.

HISTORY OF OPERATIONS; EXPERIENCE OF INVESTMENT MANAGER

As a recently created entity, the Trust will be subject to all the
risks incident to the creation of a new business, including the absence of a
history of operation, and there can be no guarantee that the Investment
Objective of the Fund will be attained. The Investment Manager is a newly
created entity and, as such, prior to the commencement of operations of the
Fund, had no previous experience in providing investment management services to
an investment company; however, the Investment Manager's designated Portfolio
Manager for the Fund has provided analytical and portfolio management duties to
investment companies and institutional asset management clients, and the
Operations Manager of the Investment Manager and the Fund's Administrator,
Furman Selz, have provided operations, compliance and administrative services
to investment companies. See "Management And Service Providers" in general,
and "Management and Service Providers - Investment Manager" and "Management And
Service Providers - Portfolio Manager" in particular, below.

INVESTMENT RISKS

There are market risks inherent in any investment, and there is no
assurance that the Fund will attain its Investment Objective or that any income
will be earned. Moreover, the application of the investment policies is
dependent upon the judgment of the Investment Manager. A prospective investor
in the Fund should realize there are risks in any policy dependent upon such
judgment and that no representation is made that the Investment Objective of
the Fund will be attained or that there may not be substantial loses in any
particular investment. At any time, the value of the Fund's shares may be more
or less than the cost of such shares to the investor.

MANAGEMENT AND SERVICE PROVIDERS

The Board of Trustees of the Fund provide broad supervision over the
affairs of the Fund. The Fund has engaged Meyers Sheppard to provide
management and investment advisory services to the Fund, Furman Selz to provide
administration, fund accounting, transfer agent and distribution services to
the Fund, and Wells Fargo to provide custodial services to the Fund.

BOARD OF TRUSTEES AND OFFICERS

The Board of Trustees is responsible for the overall management and
supervision of the Fund's business. The Board of Trustees consists of Ms.
Shelly J. Meyers, Mr. Leslie C. Sheppard, Ms. Gwendolyn H. Baba, Mr. Jay W.
Gendron, Mr. Robert E. Gipson, Professor Leonard Greenhalgh, Ms. Loretta
Sanchez and Dr. Duane

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<PAGE> 16

E. McWaine. None of the Trustees, with the exception of Ms. Meyers, Mr.
Sheppard and Ms. Baba, are considered "interested persons" of the Fund as
defined by the Investment Company Act.

The Board of Trustees is responsible for deciding matters of general
policy and reviewing actions of the Fund's contractors and agents, including
the actions of the Investment Manager, the Administrator, the Fund Accounting
Agent, the Transfer Agent, the Distributor, and the Custodian. The officers of
the Trust conduct and supervise the Fund's daily business operations. The
Board of Trustees also has broad supervisory authority over the Investment
Manager's determination of which companies satisfy the Social Objective, and
are therefore eligible to be considered for an investment by the Fund.

Ms. Shelly J. Meyers, the Chairman of the Board of Trustees, is also a
principal owner of and a Manager and the President of the Investment Manager,
Meyers Sheppard. Ms. Meyers has a background as a research analyst and
assistant portfolio manager for The Boston Company Asset Management, Inc., a
registered investment company, and has also been a lead analyst for the Chevron
Corporation and a certified public accountant engaged in private practice. See
"Management and Service Providers - Investment Manager" below. Ms. Meyers
received her Bachelors of Arts degree from the University of Michigan and her
Masters of Business Administration degree from the Amos Tuck School of Business
Administration at Dartmouth College. Ms. Meyers is a member of the Executive
Board of Directors of the Gay and Lesbian Community Services Center located in
Los Angeles, California, and is also a member of the Human Rights Campaign, the
largest national gay and lesbian organization.

Mr. Leslie C. Sheppard, who is also a principal owner of and a Manager
and the Executive Vice President of the Investment Manager, has a background in
real estate marketing and management. From 1993 until he became a principal in
March 1996 with Meyers Sheppard, Mr. Sheppard was Marketing Representative and
Asset Manager for Fannie Mae, where he managed all aspects of a 300 property
real estate inventory worth over $40 million. Prior to his employment with
Fannie Mae, Mr. Sheppard was a principal of and the real estate asset manager
for Takenaka & Co. where he was responsible for real estate acquisitions,
management, marketing and government compliance. Mr. Sheppard received his
Bachelors of Science degree in Business Administration and his Master of
Business Administration degree in Finance from the University of Southern
California.

Ms. Gwendolyn H. Baba, a former investment banker, is general partner
of several real estate management and development partnerships, and holds a
M.A. degree in Management from the University of Redlands and a Bachelors of
Arts degree in Philosophy from Lewis & Clark College. Ms. Baba is a member and
past co-chair of the Board of Directors of the Gay and Lesbian Community
Services Center, and is also on the Board of Directors of ANGLE (Access Now For
Gay And Lesbian Equality), a political fund raising organization, both located
in Los Angeles, California. Ms. Baba also holds appointments to the California
Democratic State Central and Los Angeles County Committees, and has been
nominated to the Board of Directors of the Human Rights Campaign.

Mr. Jay W. Gendron, an entertainment attorney, is Vice President,
Legal Affairs, of Warner Bros. Television Productions (formerly Lorimar
Productions). Mr. Gendron received his Juris Doctor degree from Duke
University School of Law and his Bachelors of Arts degree in Government &
International Studies from the University of Notre Dame. Mr. Gendron in on the
Board of Directors of the Camp Laurel Foundation (which provides camping
opportunities for children with HIV and AIDs) and the Angels On My Shoulder
Foundation (which provides support for care-providers for cancer patients).

Mr. Robert E. Gipson, a business and corporate attorney, is a
shareholder of and an attorney with Gipson Hoffman & Pancione, a Los Angeles
law firm. Mr. Gipson received his Juris Doctor degree from Yale Law School and
his Bachelors of Arts degree in Government from Harvard College. Mr. Gipson is
the founder and initial president of the Los Angeles Venture Association (also
known as LAVA), and is on the Board of Directors of the City Scholars
Foundation (which promotes excellence in inner-city education), the James
Redford Institution (active in organ transplant issues), the Sundance Film
Institute (which promotes independent film development) and the Westwood United
Methodist Church.

Professor Leonard Greenhalgh is Professor of Management at the Amos
Tuck School of Business Administration at Dartmouth College, and has also
taught at Stanford University and Cornell University. In addition to teaching,
Professor Greenhalgh also provides executive education, research and consulting
services to large corporations and organizations. Professor Greenhalgh
received a Ph.D. degree from Cornell University, and

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<PAGE> 17

a Masters in Business Administration degree and a Bachelors of Science degree
in Biology and Chemistry from the University of Rhode Island.

Ms. Loretta Sanchez is the President and a director and principal
shareholder of Amiga Advisors, Inc., an Orange County, California, financial
advisory services business which Ms. Sanchez started in July 1993. From 1990
through March 1993, Ms. Sanchez was an Associate with Booz, Allen & Hamilton,
Inc., a strategic management consulting services firm for which Ms. Sanchez
worked as a financial advisor for CalTrans and BART, and was involved in
opening the Mexican market for the firm's consulting business in government and
transportation. Ms. Sanchez received a Masters in Business Administration
degree in Finance from American University in Washington, D.C., and a Bachelors
of Arts degree in Economics from Chapman University in Orange, California. Ms.
Sanchez sits on the Board of directors of KinderCaminata, a non-profit
organization providing education for low-income children, the Providence Speech
& Hearing Center, also a non-profit organization, and Yaeger Capital Markets, a
for-profit corporation.

Dr. Duane E. McWaine is a psychiatrist who has been in solo
private practice since 1988. Dr. McWaine was recently appointed as Medical
Director of the Didi Hirsch Medical Health Center. Dr. McWaine is on the
Executive Board of Directors of the Los Angeles Gay and Lesbian Community
Services Center, and is a member of Southern California Physicians for Human
Rights. He has also been involved in a variety of AIDS/HIV related health care
programs in the Los Angeles area. Dr. McWaine graduated from Princeton
University in 1980, and received his Medical degree from the University of
Southern California School of Medicine in 1984.

For further information about the Board of Trustees and the officers
of the Fund, including their general business experience, see "Management Of
And Service Providers For The Trust And Fund" in the Statement of Additional
Information.

INVESTMENT MANAGER

As a newly created entity, the Investment Manager did not, prior to
the commencement of operations of the Fund, have previous experience in
providing investment management services to an investment company. However,
Ms. Shelly J. Meyers, the Investment Manager's designated Portfolio Manager for
the Fund, has provided analytical and portfolio management services to
investment companies and institutional asset management clients. Additionally,
Mr. Philip McKinley, the Operations Manager of the Investment Manager, and the
Fund's Administrator, Furman Selz, have provided compliance and administrative
services to investment companies. See "Risk Factors - History Of Operations;
Experience Of Investment Manager" above, "Management And Service Providers -
Portfolio Manager" below, and "Management Of And Service Providers For The
Trust And The Fund" in the Statement of Additional Information.

As part of its management function, the Investment Manager oversees
(subject to the overall authority of the Board of Trustees) the overall
operations and administration of the Fund, including the supervision of
professional services rendered by others, including the Distributor,
Administrator, Transfer Agent, and Custodian, as well as accounting, auditing,
legal and other services.

As part of its investment advisory function, the Investment Manager
implements the investment strategy of the Fund and manages the Fund's
investments subject to the Fund's Investment Objective and Fundamental Social
Criteria and the overall supervision by the Board of Trustees. Specifically,
the Investment Manager determines, from amongst the companies who have been
identified as satisfying the Social Objective, which companies the Fund should
invest in, what the appropriate mix of investments amongst such companies
should be, and the timing and extent of adjustments in the holdings of the Fund
to satisfy the requirements of diversification

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<PAGE> 18
and the need to maintain sufficient reserves for anticipated redemptions of
shares. The Investment Manager also has sole discretion to select brokers for
purchases and sales. Although the Investment Manager's activities are subject
to general oversight by the Trustees and officers of the Fund, neither the
Trustees nor officers of the Fund evaluate the merits of the Investment
Manager's selection of individual securities from amongst approved companies.

The Investment Management Agreement provides that the Investment
Manager shall not be liable and shall be indemnified, for any error of judgment
or mistake of law or for any loss suffered by the Fund in connection with the
matters to which the Investment Management Agreement relates, except liability
resulting from willful misfeasance, bad faith or gross negligence in the
performance of duties specified in the Investment Management Agreement or from
reckless disregard of the Investment Manager's obligations thereunder.

PORTFOLIO MANAGER

Ms. Shelly J. Meyers, a Manager of the Investment Manager and its
President, has been designated by the Investment Manager as its "portfolio
manager" for the Fund, in which capacity she is responsible for providing all
investment advisory services to the Fund on behalf of the Investment Manager.
Ms. Meyers received her Bachelors of Arts degree from the University of
Michigan and her Masters of Business Administration from the Amos Tuck School
of Business Administration at Dartmouth College. From July, 1994 through
February, 1995, Ms. Meyers was Assistant Vice President, Institutional Asset
Management for The Boston Company Asset Management, Inc., in which capacity she
acted as an equity research analyst and assistant portfolio manager for the
institutional investment group and was the lead equity analyst for the
entertainment, communications, apparel, specialty retail, and energy
industries. In that capacity Ms. Meyers was responsible for analyzing
portfolios containing investments valued at up to $1.2 billion. From June,
1993 through September, 1993, Ms. Meyers was an Analyst with The Boston Company
Asset Management, Inc. From June, 1989 through September, 1992, Ms. Meyers was
Lead Analyst, International Audit, with the Chevron Corporation, in which
capacity, she led the analysis and review of various projects and operations
throughout the world and reported her findings to executive management. Ms.
Meyers is a certified public accountant in the State of California.

ADMINISTRATION, FUND ACCOUNTING AND TRANSFER AGENTS

The Fund has entered into agreements with Furman Selz to provide the
Fund with administrative, fund accounting, and dividend disbursing and transfer
agency services, pursuant to an Administration Agreement, Fund Accounting
Agreement, and Transfer Agency Agreement, respectively. The agreements are
each renewable annually. Although each agreement provides for different
methods or rates of compensation to Furman Selz as discussed below, the Fund
has agreed to pay Furman Selz a minimum payment of $150,000 per year for all of
the aforesaid services.

Pursuant to the Administration Agreement, Furman Selz generally
assists the Fund and the Investment Manager in all aspects of the Fund's
administration and operations including the following: maintaining
administrative office facilities on behalf of the Fund; monitoring the
performance and billings of the independent contractors and agents of the Fund
to the extent requested by the Investment Manager; assisting with the
preparation and filing of documents required for compliance by the Fund with
applicable federal and state laws and regulations and stock exchanges,
including financial statements and semi-annual and annual reports to
shareholders and proxy statements; maintaining the books and records of the
Fund as required under the Investment Company Act and other applicable federal
and state laws and regulations; performing secretarial services such as the
preparation of agendas, notices and minutes for meetings of the Fund's Board of
Trustees and its shareholders; and providing advice and assistance in
connection with the preparation of Fund sales literature. Furman Selz also
provides persons satisfactory to the Board of Trustees of the Fund to serve as
officers of the Fund. Such officers, as well as certain other employees and
Trustees of the Fund, may be directors, officers or employees of Furman Selz or
its affiliates.

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<PAGE> 19
As compensation for these services, the Fund pays Furman Selz, per year, an
amount equal to 0.15% of the first $100 million in aggregate Fund assets, 0.10%
for the next $400 million, 0.07% for the next $500 million, and 0.06% for
aggregate Fund assets in excess of $1 billion.

Pursuant to the Fund Accounting Agreement, Furman Selz calculates the
Fund's net value on a daily basis, in consideration of which the Fund pays
Furman Selz the sum of $35,000 per year, plus reimbursement of out-of-pocket
expenses.

Pursuant to the Transfer Agency Agreement, Furman Selz provides
dividend disbursement, registrar and transfer agency services to the Fund, in
consideration of which the Fund pays Furman Selz the sum of $15 per year per
each shareholder, subject to a $12,000 per year minimum.

PLAN OF DISTRIBUTION

The Trustees of the Trust have adopted a Plan of Distribution (the
"Distribution Plan") with respect to the Fund in accordance with Rule 12b-1
under the Investment Company Act after having concluded that there is a
reasonable likelihood that the Distribution Plan will benefit the Fund and its
shareholders. As contemplated by the Distribution Plan, Furman Selz acts as
agent of the Fund in connection with the offering of shares of the Fund
pursuant to the Distribution Agreement. Pursuant to the Distribution
Agreement, Furman Selz also acts as the Fund's Distributor, and is responsible
for facilitating the continuous sale or redemption of Fund shares. Solely for
the purpose of reimbursing Furman Selz for activities primarily intended to
result in the sale of Fund shares, the Trust has, on behalf of the Fund,
adopted the Distribution Plan wherein, pursuant to Rule 12b-1 of the Investment
Company Act, the Fund is authorized to spend up to 0.25% of net asset value
annually for Furman Selz's services in connection with the distribution of
shares of the Fund. The Distribution Plan was approved by the independent
trustees of the Trust as well as the Fund's initial shareholders.

Furman Selz acts as the principal underwriter of shares of the Fund
and bears the compensation of personnel necessary to provide such services and
all costs of travel, office expense (including rent and overhead) and
equipment. Under the Distribution Plan, Furman Selz may receive a fee from the
Fund at an annual rate up to but not to exceed 0.25% of the Fund's average
daily net assets in anticipation of, or as reimbursement for, costs and
expenses incurred in connection with the sale of shares of the Fund, such as
payments to broker-dealers who advise shareholders regarding the purchase, sale
or retention of shares of the Fund, payments to employees of Furman Selz,
advertising expenses and the expenses of printing and distributing prospectuses
and reports used for sales purposes, expenses of preparing and printing sales
literature and other distribution-related expenses. Furman Selz will provide
to the Board of Trustees a quarterly written report of amounts expended by it
under the Distribution Plan and the purposes for which such expenditures were
made.

CUSTODIAN

The Fund has engaged Wells Fargo to act as custodian of the assets of
the Fund, pursuant to a Custodian Agreement. The Custodian's responsibilities
include safeguarding and controlling the Fund's cash and securities, handling
the receipt and delivery of securities, collecting interest on the Fund's
investments, and maintaining books of original entry for fund accounting
purposes. As compensation for its services, the Fund pays Wells Fargo, per
year, an amount equal to 0.10% of the first $20 million in aggregate Fund
assets, and 0.04% for aggregate Fund assets in excess of $20 million, subject
to a $15,000 per year minimum.

PURCHASES AND REDEMPTIONS OF SHARES

PURCHASES

Shares of the Fund may be purchased without a sales load at the net
asset value next determined after an order for shares is received and accepted
by the Fund. The minimum initial investment in the Fund is $1,000

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<PAGE> 20
(except that the minimum initial investment when selecting the Automatic
Investment Plan is $250). The minimum subsequent investment is $100 ($50 for
the Automatic Investment Plan).

INITIAL INVESTMENTS BY MAIL

Subject to acceptance by the Fund, investors desiring to purchase
shares of the Fund by mail should complete an Account Application and mail the
Application to the Fund at the address noted below, together with a check in
U.S. dollars ($1,000 minimum), payable to "Meyers Sheppard Pride Fund":

Meyers Sheppard Pride Fund
c/o Furman Selz LLC
P.O. Box 1694
Scottsdale, Arizona 85252-1694

Subject to acceptance by the Fund, payment for the purchase of shares
received by mail will be credited to a shareholder's account at the net asset
value per share of the Fund next determined after receipt. Such payment need
not be converted into federal funds (monies credited to the bank of the Fund's
Custodian by a Federal Reserve Bank) before acceptance by the Fund.

INITIAL INVESTMENTS BY WIRE

Subject to acceptance by the Fund, shares of the Fund may be purchased
by wiring federal funds ($1,000 minimum generally, $250 minimum for the
Automatic Investment Plan) to Investors Fiduciary Trust Company (see
instructions below). A completed Account Application should be forwarded to
the Fund at the address noted above under "Initial Investments by Mail" in
advance of the wire. Notification must be given to the Fund at 1-800-410-3337
prior to 4:00 p.m., New York time, on the business date prior to the date the
purchase monies will be wired. (Prior notification should also be received from
investors with existing accounts). Funds must be paid in U.S. dollars. Funds
should be wired through the Federal Reserve System to:

Investors Fiduciary Trust Company
Kansas City, MO 64105
ABA # 1010-0362-1
Account # 7512996
F/B/O Meyers Sheppard Pride Fund

Federal funds purchases will be accepted only on days in which the
Fund, the Distributor and Investors Fiduciary Trust Company are open for
business. Currently, days in which the Fund, the Distributor and the Custodian
are not open are those days on which the New York Stock Exchange is closed.

ADDITIONAL INVESTMENTS

Additional investments may be made at any time (minimum investment of
$100 {$50 for the Automatic Investment Plan}) by purchasing shares of the Fund
at net asset value by mailing a check to the Fund at the address noted above
under "Initial Investments by Mail" (payable to the "Meyers Sheppard Pride
Fund" or by wiring monies to Investors Fiduciary Trust Company as outlined
above under "Initial Investments by Wire"). For a wire purchase, notification
must be given to the Fund at 1-800-410-3337 prior to 4:00 p.m., New York time,
on the business day prior to the day the purchase monies will be wired.

INVESTMENTS THROUGH SHAREHOLDER ORGANIZATIONS

Shares may also be purchased through a broker, a bank, or other
institutions or investment professionals ("Shareholder Organizations").
Shareholder Organizations may impose minimum customer account and other
requirements in addition to those of the Fund. Investors purchasing or
redeeming shares may be charged a transaction-based fee and other charges for
the services of the Shareholder Organization. Each Shareholder Organization is
responsible for transmitting to its customers a schedule of its fees and
information regarding any additional or different conditions regarding
purchases or redemptions. Customers of Shareholder Organizations should read
this Prospectus in light of the terms governing accounts with their
organization. If an investor purchases shares through a Shareholder
Organization, the Shareholder Organization must promptly transmit such

17
<PAGE> 21
order to the Fund so that the order receives the net asset value next
determined following receipt of the order. The Fund does not pay to or receive
compensation from Shareholder Organizations for the sale of Fund shares.

INVESTMENTS THROUGH IRAS AND OTHER QUALIFIED RETIREMENT PLANS

The Fund has available special forms which enable an investor to
purchase Fund shares through his or her Individual Retirement Account ("IRA").
The Fund may be used as a qualifying medium for IRAs and other qualified
retirement plans ("Plans"). The minimum initial investment for an IRA or a
Plan is $250. An IRA may be established through a custodial account with
Investors Fiduciary Trust Company. Completion of a special application is
required in order to create such a account. A $5.00 establishment fee and an
annual $12.00 maintenance and custody fee is payable with respect to each IRA;
in addition there will be charged a $10.00 termination fee when the account is
closed. Fund shares may also be purchased for IRAs and Plans established with
other authorized custodians. Contributions to IRAs are subject to prevailing
amount limits set by the Internal Revenue Service. For more information about
IRAs and other Plan accounts, contact the Fund.

Investors may also, in certain circumstances, be able to invest in the
Fund through other types of retirement plans, such as through simplified
employee pension plans ("SEPs"), qualified pension plans, and tax deferred
annuity plans sponsored by their employers. Investors considering investments
through an IRA or other types of retirement plans should write or telephone the
Fund for further information and the appropriate form of application.

INVESTMENTS THROUGH AUTOMATIC INVESTMENT PLAN

The Fund also has available special forms enabling an investor to
regularly invest, through his or her bank, specified dollar amounts in periodic
intervals into the Fund (the "Automatic Investment Plan"). The minimum initial
investment under the Automatic Investment Plan is $250, and minimum subsequent
investments are $50. Payments under the Automatic Investment Plan are
automatic and will continue until such time as the Fund and the investor's bank
are notified to discontinue further investments. Due to the varying procedures
to prepare, process and to forward the bank withdrawal information to the Fund,
there may be a delay between the time of the bank withdrawal and the time the
money reaches the Fund. The investment in the Fund will be made at the
next-determined net asset value per share after receipt of the funds and bank
withdrawal data are received in the form required by the Fund. Investors
regarding investments through the Automatic Investment Plan should write or
telephone the Fund for further information and the appropriate form of
application.

OTHER PURCHASE INFORMATION

The Fund reserves the right, in its sole discretion, to cease offering
its shares for sale at any time or to reject any order for the purchase of its
shares when, in the judgment of the Board of Trustees or officers of the Fund,
such suspension or rejection is in the best interests of the Fund. The Fund
and the Distributor also reserve the right to modify the minimum investment
requirement, the subsequent investment requirement, or the manner in which
shares are offered.

For each shareholder of record, the Fund establishes an open account
to which all shares purchased are credited together with any dividends and
capital gain distributions which are paid in additional shares. See "Other
Information Concerning Shares Of The Fund - Dividends And Capital Gain
Distributions," herein. Purchases of Fund shares will be made in full and
fractional shares of the Fund calculated to three decimal places. In the
interest of economy and convenience, certificates for shares will not be
issued.

REDEMPTIONS

Shares of the Fund may be redeemed by mail, or, if authorized, by
telephone, subject to certain procedures. The value of the shares redeemed may
be more or less than the shareholder's purchase price, depending on the Fund's
performance during the period the shareholder owned its shares. A shareholder
owning $12,000 or more of shares of the Fund may elect to have periodic
redemptions of not less than $100 made from his or her account to be paid on a
monthly, quarterly, semiannual or annual basis. The maximum payment per year
is 12% of the account value at the time of the election. A sufficient number
of shares to make the scheduled redemption will normally be redeemed on the
date selected by the shareholder. Depending on the size of the

18
<PAGE> 22

payment requested and fluctuation in the net asset value, if any, of the shares
redeemed, redemptions for the purpose of making such payments may reduce or
even exhaust the account. A shareholder may request that these payments be
sent to a predesignated bank or other designated party. Capital gains and
dividend distributions paid to the account will automatically be reinvested at
net asset value on the distribution payment date. Redemptions of shares are
taxable events on which the shareholder may recognize a gain or a loss.

BY MAIL

The Fund will redeem the shares at the net asset value per share next
determined after a redemption request is received in "good order." The net
asset value per share of the Fund is determined as of 4:00 p.m., New York time,
on each day that the Fund, the Transfer Agent and the New York Stock Exchange
are open for business. Requests should be addressed to:

Meyers Sheppard Pride Fund
c/o Furman Selz LLC
P.O. Box 1694
Scottsdale, Arizona 85252-1694

Requests in "good order" must include the following documentation:

(1) a letter of instruction, if required, or a stock assignment
specifying the number of shares or dollar amount to be redeemed, signed by all
registered owners of the shares in the exact names in which they are registered
(if the shares are in street name, the investor may be required to sell the
shares through his or her investment professional);

(2) any required signature guarantees (see "Signature Guarantees"
below); and

(3) other supporting legal documents, if required, in the case of
estates, trusts, guardianships, custodianships, corporations, pension and
profit sharing plans and other organizations.

SIGNATURE GUARANTEES

To protect shareholder accounts, the Fund and the Transfer Agent from
fraud, signature guarantees are required to enable the Transfer Agent to verify
the identity of the person who has authorized a redemption from an account.
The signature must be guaranteed by a member firm of the New York, American,
Boston, Midwest, Philadelphia or Pacific Stock Exchange or by a commercial bank
(not a savings bank) which is a member of the Federal Deposit Insurance
Corporation. Notarization by a notary public is not acceptable. Signature
guarantees are required for (1) redemptions where proceeds are to be sent to
someone other than the registered shareholder(s) and the registered address,
and (2) share transfer requests. Signature guarantees may also be provided
through participation in the Securities Transfer Association Medallion Program
("STAMP"), the Stock Exchange Medallion Program ("SEMP"), or the New York Stock
Exchange Medallion Signature Program ("MSP"). Shareholders may contact the
Transfer Agent at 1-800-410-3337 for further details.

BY TELEPHONE

Provided the Telephone Redemption Option has been authorized by
initialling the appropriate box in the Account Application, a redemption of
shares may be requested by calling the Transfer Agent at 1-800-410-3337 and
requesting that the redemption proceeds be mailed to the primary registration
address or wired per the authorized instructions. If the Telephone Redemption
Option is authorized, the Fund and the Transfer Agent may act on telephone
instructions from the person representing himself or herself to be a
shareholder and believed by the Fund or the Transfer Agent to be genuine. The
Transfer Agent's records of such instructions are binding and the shareholders,
not the Fund or the Transfer Agent, bear the risk of any loss, liability, cost
or expense for acting upon telephone instructions believed to be genuine. The
Fund will employ reasonable procedures to confirm that instructions
communicated are genuine and, if it does not, it may be liable for any losses
due to unauthorized or fraudulent instructions. The procedures employed by the
Fund in connection with transactions initiated by telephone include tape
recording of telephone instructions and requiring some form of personal
identification prior to acting upon instructions received by telephone. The
following information must be supplied by the shareholder or broker at the time
a request for a telephone redemption is made: (1) the shareholder's account
number, (2) the

19
<PAGE> 23

shareholder's social security number, and (3) the name and account number of
the shareholder's designated securities dealer or bank.

PAYMENT

Redemption proceeds for shares of the Fund recently purchased by check
may not be distributed until payment for the purchase has been collected, which
may take up to 15 business days from the purchase date.

Other than described above, payment of the redemption proceeds will be
made by check mailed within seven days after receipt of an order for a
redemption. Investors may request that payment be made by wire transfer to the
investor's designated account at a commercial bank.

A shareholder owning $12,000 or more of shares of the Fund may elect
to have periodic redemptions of at least $100 be made from his or her account
to be paid on a monthly, quarterly, semiannual or annual basis. The maximum
payment per year is 12% of the account value at the time of the election. A
sufficient number of shares to make the scheduled redemption will normally be
redeemed on the date selected by the shareholder. Depending on the size of the
payment requested and fluctuation in the net asset value, if any, of the shares
redeemed, redemptions for the purpose of making such payments may reduce or
even exhaust the account. A shareholder may request that these payments be
sent to a predesignated bank or other designated party. Capital gains and
dividend distributions paid to the account will automatically be reinvested at
net asset value on the distribution payment date.

The right of any shareholder to receive payment with respect to any
redemption may be suspended or the payment of the redemption proceeds postponed
during any period in which the New York Stock Exchange or the Fund or the
Transfer Agent are closed (in addition to weekends or holidays) or trading on
such Exchange is restricted, or under any emergency circumstances as determined
by the Securities and Exchange Commission.

If the Board of Trustees determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make payment
wholly in cash, the Fund may pay the redemption proceeds in whole or in part by
a distribution in-kind of readily marketable securities held by the Fund in
lieu of cash in conformity with applicable rules of the Securities and Exchange
Commission. Investors generally will incur brokerage charges on the sale of
Fund securities so received in payment of redemptions.

OTHER REDEMPTION INFORMATION

The Fund and the Transfer Agent reserve the right, in their sole
discretion, to suspend the right of telephone redemptions in general or to
reject a telephone redemption with respect to any individual shareholder in
particular, either before, during or after the call, when, in the judgment of
the Board of Trustees or officers of the Fund, such suspension or rejection is
in the best interests of the Fund. The Fund and the Distributor also reserve
the right to modify the redemption procedures from time-to-time including,
without limitation, requiring signature guarantees for all redemption requests.

The Fund reserves the right to redeem involuntary on at least 30 days'
notice the balance in a shareholder's account having a current value of not
less than $250, but not if an account falls below $250 due to a change in the
market value of the Fund's shares.

TAX MATTERS

The Fund intends to qualify and elect to be treated as a "regulated
investment company" under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). To qualify as such, the Fund must satisfy certain
requirements relating to its sources of income, diversification of its assets,
and distribution of its income. As a regulated investment company, the Fund
will not be required to pay any federal income or excise taxes on any net
investment income and net realized capital gains that are distributed to its
shareholders in accordance with certain timing requirements imposed by the
Code.

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<PAGE> 24
Shareholders of the Fund normally will have to pay federal income
taxes, and any state or local taxes, on the dividends and any realized net
capital gain distributions they receive from the Fund. At the end of each
calendar year, each shareholder receives information for tax purposes on the
dividends and any realized net capital gain distributions received during that
calendar year including the portion taxable as ordinary income, the portion
taxable as capital gains, the portion, if any, representing a return of capital
(which generally is free of current taxes but results in a basis reduction) and
the amount of dividends eligible for the dividends-received deduction for
corporations.

Distributions of net long-term capital gains (i.e., the excess of net
long-term capital gains over net short-term capital losses) will cause any
short-term capital loss realized on the disposition by a shareholder of Fund
shares held for six or fewer months to be recharacterized, to the extent of
those distributions, as long-term capital loss. Under the back-up withholding
rules of the Code, certain shareholders may be subject to 31% withholding of
federal income tax on distributions and payments made by the Fund. Generally,
shareholders are subject to back-up withholding if they have not provided the
Fund with a correct taxpayer identification number and certain other
certifications. Individuals, corporations and other shareholders who are not
U.S. persons under the Code are generally subject to withholding at the rate of
30% (or lower rate provided by an applicable tax treaty) on dividends from the
Fund.

In addition to federal taxes, a shareholder may be subject to state,
local or foreign taxes on payments received from the Fund.

Under current law, the Fund is not liable for any income or franchise
tax in the State of Delaware as long as the Fund qualifies as a regulated
investment company under the Code. The Fund's fiscal year-end is May 31.

The foregoing discussion is intended for general information only. A
prospective shareholder should consult with its own tax adviser as to the tax
consequences of an investment in the Fund including the status of distributions
from the Fund under applicable state or local law. See "Taxation" in the
Statement of Additional Information for a more detailed discussion of the
federal, state and local income tax consequences of investing in the Fund
shares.

OTHER INFORMATION CONCERNING SHARES OF THE FUND

DETERMINATION OF NET ASSET VALUE OF SHARES

The Fund determines the net asset value of the shares of the Fund on
each Fund business day. This determination is made once during each such day
as of 4:00 P.M. on regular trading days of the New York Stock Exchange by
deducting the amount of the Fund's liabilities from the value of its assets and
dividing the difference by the number of shares of the Fund outstanding. A
share's net asset value is effective for orders received by the Fund prior to
the close of the business day on which such net asset value is determined.

Equity securities held by the Fund are valued at the last sale price
on the exchange on which they are primarily traded or on the NASDAQ system for
unlisted national market issues, or at the last quoted bid price for securities
in which there were no sales during the day or for unlisted securities not
reported on the NASDAQ system. Short-term obligations with remaining
maturities of less than sixty days are valued at amortized cost, which are
valued at fair value as determined by the Board of Trustees of the Fund. Fund
securities (other than short-term obligations with remaining maturities of less
than sixty days) for which there are no such quotation or valuations are valued
at fair value as determined in good faith by or at the direction of the Fund's
Board of Trustees.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

Substantially all of the Fund's net income from dividends and interest
is paid to the Fund's shareholders annually as a dividend, usually in December.
For this purpose, the Fund's net income from dividends and interest consists of
all income from dividends and interest accrued on the assets of the Fund, less
all actual and accrued expenses of the Fund determined in accordance with
generally accepted accounting principles.

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<PAGE> 25
The Fund also declares a long-term capital gain distribution to its
shareholders on an annual basis, usually in December, if the Fund's profits
during the year from the sale of securities held for longer than the applicable
long-term capital gains holding period exceeds the Fund's losses during such
year from the sale of securities together with the Fund's net capital losses
carried forward from prior years (to the extent not used to offset short-term
capital gains). The Fund's net short-term capital gains realized during each
fiscal year will also be distributed at that time.

The Fund will also make additional distributions to its shareholders
to the extent necessary to avoid application of the 4% non-deductible excise
tax created by the Tax Reform Act of 1986 on certain undistributed income and
net capital gains of mutual funds.

A shareholder of the Fund may receive dividends and capital gain
distributions either in cash or in additional shares of the Fund.

EXPENSES

All expenses incurred in the operation of the Fund will be borne by
the Fund. These expenses include: organizational costs; taxes; the execution,
recording and settlement of security transactions including brokerage fees and
commissions; fees of members of the Board of Trustees who are not officers,
managers, employees or holders of 5% or more of the beneficial interests of the
Fund or its affiliates; expenses relating to the issuance, registration and
qualification of shares of the Fund including Securities and Exchange
Commission fees and state Blue Sky qualification fees and the preparation,
printing and mailing of prospectuses for such purposes; fees to the Investment
Manager for its services as investment adviser and manager; fees to Furman Selz
for its administration, fund accounting, dividend disbursement, registration
and transfer agent services; fees to Well Fargo for its custodial agent
services; reimbursements to Furman Selz for its distribution expenses pursuant
to the Distribution Agreement (subject to the cap set forth in the Distribution
Plan); certain insurance premiums; industry association fees; outside auditing
and legal expenses; costs of maintaining the Fund's existence; costs of
independent pricing services; costs attributable to investor services (other
than those arranged by Furman Selz pursuant to Distribution Agreement); costs
of shareholders reports and meetings; costs of preparing, printing and mailing
certain prospectuses, reports, notices, proxy statements and statements of
additional information to shareholders; and any extraordinary expenses.

DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES

The Trust Instrument permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest (par value $0.00001 per
share) and to divide or combine the shares into a greater or lesser number of
shares without thereby changing the proportionate beneficial interests in the
Fund. To date the Fund is the only series of shares issued under the Trust.
However, the Trust reserves the right to create and issue additional series of
shares, in which case the shares of each series would participate equally in
the dividends and assets of the particular series. The Trust may establish
additional classes of any series of shares. For example, the Trust may offer
another class of shares that has lower annual distribution fees or shareholder
servicing fees. Prior to offering another series of shares, the Trust would
either issue a new Prospectus and Statement of Additional information or amend
this Prospectus and the Statement of Additional Information to reflect such
issuances.

Each share of the Fund represents an equal proportionate interest in
the Fund with each other share. Shares have no preference, preemptive,
conversion or similar rights. Shares when issued are fully paid and
nonassessable, except as set forth below. Shareholders are entitled to one
vote for each share held on matters on which they are entitled to vote. There
is no requirement for the Trust, and the Board of Trustees has no current
intention, of holding annual meetings of shareholders of the Fund, although the
special meetings of Fund shareholders may be held when, in the judgment of the
Board of Trustees, it is necessary or desirable to submit matters for a
shareholder vote. Shares of each series will vote separately to approve
matters specifically concerning such series such as amendments to any plan of
distribution under Section 12b-1 of the Investment Company Act, any changes in
fundamental investment policies or restrictions of such series, and the
approval of any investment management or advisory contract pertaining to such
series (unless any of such matters also affect other series, in which case all
of such affected series shall vote together). In any event, shares of all
series will vote together in the following matters: (1) the removal of
Trustees, (2) the termination of the Trust, (3) certain amendments of the

22
<PAGE> 26
Trust Instrument, and (4) on such additional matters relating to the Trust as
may be required or authorized by law, the Trust Instrument or the By-laws. If
holders of 10% or more of the Fund's outstanding shares so request, a meeting
of the Fund shareholders will be called. The Trust will assist in shareholder
communications as required by Section 16(c) of the Investment Company Act.

The Trust is an entity of the type commonly known as a "Delaware
Business Trust." Under Delaware law, shareholders of such a business trust are
entitled to the same limitation of personal liability extended to stockholders
of a corporation. Under the Trust Instrument, no shareholder shall be
personally liable for the debts, liabilities, obligations and expenses incurred
by, contracted for, or otherwise existing with respect to the Trust or any
series. The Trust Instrument contains an express disclaimer of shareholder
liability for acts or obligations of the Trust and provides for indemnification
and reimbursement of expenses out of Fund property for any shareholder held
personally liable for the obligations of a Fund or the Trust solely by reason
of his or her being or having been a shareholder. The Trust Instrument also
provides for the maintenance, by or on behalf of the Trust and the Fund, of
appropriate insurance (for example, fidelity bond and errors and omissions
insurance) for the protection of the Trust and the Fund, their shareholders,
trustees, officers, employees and agents, covering possible tort and other
liabilities. Thus, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which Delaware
law did not apply, inadequate insurance existed, and the Fund itself was unable
to meet its obligations.

The Fund's Statement of Additional Information contains more detailed
information about the Fund, including information related to (1) investment
policies and restrictions of the Fund, (2) the Trustees, officers, Investment
Manager, Administrator, Fund Accounting Agent, Transfer Agent and Custodian of
the Fund, (3) portfolio transactions, (4) the Fund's shares, including rights
and liabilities of shareholders, (5) additional performance information,
including the method used to calculate yield and total rate of return
quotations of the Fund, (6) determination of the net asset value of shares of
the Fund, and (7) the audited Statement of Assets and Liabilities of the Fund.

PERFORMANCE INFORMATION

Performance information concerning the Fund may from time-to-time be
used in advertisements, shareholder reports or other communications to
shareholders. The Fund may provide period and average annualized "total rates
of return" with respect to the Fund. The "total rate of return" of the Fund
refers to the change in the value of an investment in a Fund over a stated
period based on any change in net asset value per share and includes the value
of any shares purchasable with any dividends or capital gain distributions
declared during such period. Period total rates of return may be annualized.
An annualized total rate of return is a compounded total rate of return which
assumes that the period total rate of return is generated over a 52-week
period, and that all dividends and capital gain distributions are reinvested.
An annualized total rate of return will be slightly higher than a period total
rate of return if the period is shorter than one year, because of the effect of
compounding.

Historical total return information for any period or portion thereof
prior to the establishment of the Fund will be that of the Fund, adjusted to
assume that all charges, expenses and fees of the Fund which are presently in
effect were deducted during such periods.

The Fund may provide "yield" quotations with respect to the Fund. The
"yield" of the Fund refers to the income generated by an investment in the Fund
over a 30-day or one-month period (which period shall be stated in any
advertisement or communications with a shareholder). This income is then
"annualized," that is, the amount of income generated by the investment over
the period is assumed to be generated over a 52-week period and is shown as a
percentage of Investment. A "yield" quotation, unlike a total rate of return
quotation, does not reflect changes in net asset value.

From time-to-time the Fund may also quote fund rankings from various
sources, such as Lipper Analytical Services, Inc., and may compare its
performance to that of unmanaged securities indices, such as the S&P 500
(Standard & Poor's 500 Composite Stock Price Index) and the Dow Jones
Industrial Average. "Standard & Poors," "S&P" and "Standard & Poor's 500" are
trademarks of Standard & Poor's Corporation. See the Statement of Additional
Information for further information concerning the calculation of yield and any
total rate of return

23
<PAGE> 27
quotations. Since the Fund's yield and total rate of return quotations are
based on historical earnings and since such yield and rates of return fluctuate
over time, such quotations should not be considered as an indication or
representation of the future performance of the Fund.

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<PAGE> 28
MEYERS SHEPPARD INVESTMENT TRUST

MEYERS SHEPPARD PRIDE FUND
- ------------------------------------------------------------------------------

<TABLE>
<S> <C>
TRUSTEES AND OFFICERS INVESTMENT MANAGER

Shelly J. Meyers Meyers, Sheppard & Co., LLC
Trustee (Chairman of the Board) and President 9107 Wilshire Boulevard, Suite 700
Beverly Hills, California 90210
Leslie C. Sheppard
Trustee and Executive Vice President
ADMINISTRATOR, FUND ACCOUNTING AGENT
Gwendolyn H. Baba AND TRANSFER AGENT
Trustee
Furman Selz LLC
Jay W. Gendron, Esq. 230 Park Avenue
Trustee New York, New York 10169

Robert E. Gipson, Esq.
Trustee DISTRIBUTOR

Leonard Greenhalgh, M.B.A., Ph.D. Furman Selz LLC
Trustee 230 Park Avenue
New York, New York 10169
Loretta Sanchez
Trustee
CUSTODIAN
Duane E. McWaine, M.D.
Trustee Wells Fargo Bank, N.A.
P.O. Box 63084
John J. Pileggi San Francisco, California 94163
Vice President and Treasurer

Joan V. Fiore LEGAL COUNSEL
Vice President and Secretary
Pollet & Woodbury, a Law Corporation
Gordon M. Forrester 10900 Wilshire Boulevard, Suite 500
Assistant Treasurer Los Angeles, California 90024

Eric Rubin
Assistant Treasurer LEGAL COUNSEL FOR THE INDEPENDENT TRUSTEES

Philip McKinley Mayer, Brown & Platt
Assistant Secretary 1675 Broadway, Suite 1900
New York, New York 10019
Sheryl Hirschfeld
Assistant Secretary
INDEPENDENT ACCOUNTANTS

KPMG Peat Marwick LLP
345 Park Avenue
New York, New York 10154
</TABLE>

<PAGE> 29
PART B
<PAGE> 30

MEYERS SHEPPARD PRIDE FUND
a separate portfolio of the Meyers Sheppard Investment Trust
9107 Wilshire Boulevard, Suite 700
Beverly Hills, California 90210
Telephone Number: (310) 288-3720
Facsimile Number: (310) 288-3726

STATEMENT OF ADDITIONAL INFORMATION

JUNE 7, 1996

The Meyers Sheppard Pride Fund (the "Fund") is organized as a separate
series of the Meyers Sheppard Investment Trust (the "Trust"), a business trust
organized under the laws of the State of Delaware. The Fund is an open-ended
no-load diversified mutual fund whose overall investment objective is to attain
long-term capital appreciation through investing in a diversified portfolio of
equity securities of under-valued but nevertheless fundamentally sound
companies which have been identified as generally having progressive policies
towards gays and lesbians, and at a minimum having in place specifically stated
policies against discrimination in hiring and promotion based upon sexual
orientation. See "Investment And Social Objectives, Policies And Restrictions"
herein.

This Statement of Additional Information sets forth information which
may be of interest to investors but which is not necessarily included in the
Prospectus for the Fund dated June 7, 1996, as amended or supplemented from
time to time. This Statement of Additional Information should be read in
conjunction with the Prospectus dated June 7, 1996, a copy of which may be
obtained by an investor without charge by contacting Furman Selz LLC, the
Fund's Distributor, at 230 Park Avenue, New York, New York 10169, or at (800)
410-3337. This Statement of Additional Information has been incorporated into
the Prospectus.

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY AN EFFECTIVE PROSPECTUS AND SHOULD BE READ ONLY IN CONJUNCTION
WITH SUCH PROSPECTUS.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
The Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2
Investment And Social Objectives, Policies and Restrictions . . . . . . . . . . . B-3
Tax Sheltered Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . B-11
Investment Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-14
Performance Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-14
Determination of Net Asset Value; Valuation of Fund Securities . . . . . . . . . . B-15
Management Of And Service Providers For The Trust And The Fund . . . . . . . . . . B-17
Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-23
Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-23
Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-23
Fund Transactions And Brokerage Commissions . . . . . . . . . . . . . . . . . . . B-24
Description Of Shares, Voting Rights And Liabilities . . . . . . . . . . . . . . . B-26
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-27
</TABLE>

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<PAGE> 31
THE FUND

The Meyers Sheppard Pride Fund (the "Fund") is organized as a separate
series of the Meyers Sheppard Investment Trust (the "Trust"), a business trust
organized under the laws of the State of Delaware on March 25, 1996. The Fund
is an open-ended no-load diversified management investment company whose
overall investment objective is to attain long-term capital appreciation
through investing in a diversified portfolio of equity securities of
under-valued but nevertheless fundamentally sound companies. The Fund will
invest in securities of selected companies which have been identified by
Meyers, Sheppard & Co., LLC ("Meyers Sheppard"), the Investment Manager of the
Fund, as generally having progressive policies towards gays and lesbians, but
at a minimum having in place specifically stated policies against
discrimination in hiring and promotion based upon sexual orientation. See
"Investment And Social Objectives, Policies And Restrictions" herein.

The Fund is the first series to be established under the Trust. As a
diversified fund, the Fund is required, by the Investment Company Act of 1940,
as amended (the "Investment Company Act"), with respect to 75% of its assets,
to invest no more than 5% of its assets in the securities of any one issuer and
not more than 10% of the outstanding voting securities of an issuer may be
owned.

The Fund's investment and social objectives and policies, including
the identification of companies which have progressive policies towards gays
and lesbians, are, with the exception of certain fundamental policies,
determined by the Investment Manager, subject to the Board of Trustees
providing broad supervision over the affairs of both the Fund and the Trust.
The Fund has, to date, identified over 325 publicly-traded companies meeting
this criteria, most of which are listed on the Standard & Poor's 500 Composite
Stock Price Index (the "S&P 500"). A majority of the Board of Trustees are not
affiliated with the Investment Manager.

The Investment Manager serves as the Fund's manager and investment
adviser pursuant to an Investment Management Agreement. As part of its
management function, the Investment Manager generally supervises (subject to
the overall authority of the Board of Trustees and officers of the Trust) the
overall administration of the Fund, including its various agents and service
providers, including those providing distribution, fund accounting, dividend
disbursement, transfer agent and custodian services. As part of its investment
advisory function, the Investment Manager manages the investments of the Fund
day-to-day in accordance with the Fund's investment and social objectives and
policies, and determines the composition of the securities which the Fund may
invest (i.e., which companies designated by the Investment Manager as having
anti-discrimination policies in place and otherwise demonstrating progressive
policies towards gays and lesbians). For its management and investment
advisory services, the Investment Manager receives from the Fund a monthly fee
equal, on an annual basis, to 1% of the Fund's average daily net assets. See
"Management Of And Service Providers For The Trust And Fund" herein.

Shares of the Fund are sold continuously by the Distributor of the
Fund, Furman Selz LLC, a Delaware limited liability company ("Furman Selz"), at
the next determined net asset value per share. The minimum initial investment
in the Fund is generally $1,000, and subsequent investments are generally $100.
A lower initial investment of $250 is permitted for Automatic Investment Plans
with subsequent investments allowed at a minimum of $50. The Trust, on behalf
of the Fund, has adopted a Distribution Plan which permits reimbursement of
certain expenses incurred by the Distributor in connection with the
distribution of shares of the Fund, up to a maximum of 0.25% of net asset value
annually.

The Fund offers to redeem shares of the Fund from its shareholders at
any time at next determined net asset value per share. The redemption price
may be more or less than the purchase price.

B - 2
<PAGE> 32
INVESTMENT AND SOCIAL OBJECTIVES, POLICIES AND RESTRICTIONS

INVESTMENT OBJECTIVE AND SOCIAL OBJECTIVE

INVESTMENT STRATEGY

The Investment Manager expects that under normal market conditions the
Fund will typically invest up to 95% of its assets (and sometimes virtually all
of its assets) in the equity securities described above and, subject to certain
limitations, certain options in these securities for hedging purposes. Under
distressed market conditions the Fund may maintain its assets in cash or
cash-equivalents, or invest in money-market instruments or obligations of the
United States government or government-sponsored enterprises and other types of
government-backed securities. Such investments would be temporary defensive in
nature and would not be expected to exceed 15% of the Fund's net assets.
Although returns on these assets are historically less than investment in
equity and other non-governmental types of securities, the risk of loss in
investing in such instruments is lower as well.

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<PAGE> 33
IDENTIFICATION OF COMPANIES WHICH SATISFY SOCIAL OBJECTIVE

As of the date of this Prospectus, the Non-Fundamental Social Criteria
consists of two separate areas of general focus, employee relations and
corporate citizenship.

It is not necessary that a company satisfy all of the factors and
considerations described above in the Non-Fundamental Social Criteria in order
to be identified as having satisfied the Social Objective. However, every
company must satisfy the Fundamental Social Criteria in order to be included on
the list of approved companies.

The Investment Manager intends to vote proxies of companies included
in the Fund consistent with the Social Objective. The inclusion of a company
on the Fund's list of approved companies with progressive policies towards gays
and lesbians does not imply that the company has requested it be included on
the list or approved such inclusion, has sought the approval of the Fund with
respect to the development and implementation of the company's employment or
corporate citizenship policies, or is affiliated with the Fund in any manner.

INVESTMENT POLICIES

The Fund will diversify its holdings to reduce the risks of investing.
See "Fundamental Investment Restrictions" and "Non-Fundamental State And
Federal Restrictions" below relative to the Fund's threshold diversification
requirements. If the Fund were to concentrate its investments in a single
industry, the Fund would be more susceptible to any single economic, political
or regulatory occurrence than would be another investment company which was not
so concentrated. See "Risk Factors" below,

B - 4
<PAGE> 34

issuer. A convertible security entitles the holder to receive interest paid or
accrued on debt or the dividend paid on preferred stock until the convertible
security matures or is redeemed, converted or exchanged. Before conversion,
convertible securities have characteristics similar to nonconvertible debt
securities in that they ordinarily provide a stable stream of income with
generally higher yields than those of common stocks of the same or similar
issuers. Convertible securities rank senior to common stock in a corporation's
capital structure but are usually subordinated to comparable nonconvertible
securities. The Investment Manager will limit investments in convertible
securities to those generally considered to be "investment grade" debt
securities, which the Investment Manager defines as being rated BBB or higher
by Standard & Poors or Baa or higher by Moodys. The highest rated debt
securities (securities rated AAA by Standard & Poors or Aaa by Moodys) carry,
in the opinion of such investment ratings agencies, the smallest degree of
investment risk and the capacity to pay interest and repay principal is very
strong. See "Fundamental Investment Restrictions" and "Non-Fundamental State
And Federal Restrictions" below relative to the maximum percentage of Fund
assets which can be invested in convertible securities. Also see "Risk
Factors" below.

The Fund may purchase a publicly-traded company's "restricted
securities." These securities are not registered for sale to the general
public or are offered in an exempt non-public offering under the Securities Act
of 1933, as amended (the "Securities Act"), including securities offered and
sold to "qualified institutional buyers" under Rule 144A under the Securities
Act. See "Fundamental Investment Restrictions" and "Non-Fundamental State And
Federal Restrictions" below relative to the maximum percentage of Fund assets
which can be invested in restricted securities. Also see "Risk Factors" below.

The Fund may invest cash reserves in (1) direct obligations and/or
short-term debt securities (ie., securities having a remaining maturity of one
year or less) issued or guaranteed by agencies or instrumentalities of the
United States Government and/or (2) bankers' acceptances, commercial paper or
certificates of deposit, provided that the issuer satisfies the Social Criteria
of the Fund. The Fund's policy is to hold its assets in such securities
pending readjustment of its portfolio holdings of stocks in order to meet
anticipated redemption requests. Although the U.S. government provides
financial support to U.S. government sponsored agencies or instrumentalities,
no assurance can be given that it will always do so. The U.S. government and
its agencies and instrumentalities do not guarantee the market value of their
securities; consequently, the value of such securities will fluctuate.

The Fund may lend its securities to brokers, dealers and financial
institutions, provided that (1) the loan is secured continuously by collateral
consisting of U.S. Government securities or cash or letters of credit, which is
marked to the market daily to ensure that each loan is fully collateralized at
all times, (2) the Fund may at any time call the loan and obtain the return of
the securities loaned within five business days, (3) the Fund will receive any
interest or dividends paid on the securities loaned, and (4) the aggregate
market value of securities loaned will not at any time exceed 30% of the total
assets of the Fund. The Fund will earn income for lending its securities
because cash collateral pursuant to these loans will be invested in short-term
money market instruments. In connection with lending securities, the Fund may
pay reasonable finders, administrative and custodial fees. No such fees will
be paid to any person if it or any of its affiliates is affiliated with the
Fund or the Investment Manager. See "Risk Factors" below.

The Fund may enter into certain transactions in stock options for the
purpose of hedging against possible increases in the value of securities which
are expected to be purchased by the Fund or possible declines in the value of
securities which are held by the Fund. Generally, the Fund would only enter
into such transactions on a short-term basis pending readjustment of its
holdings of underlying stocks. The purchase of an option on an equity security
provides the holder with the right, but not the obligation, to purchase the
underlying security, in the case of a call option, or to sell the underlying
security, in the case of a put option, for a fixed price at any time up to a
stated expiration date. The holder is required to pay a non-refundable
premium, which represents the purchase price of the option. The holder of an
option can lose the entire amount of the premium, plus related transaction
costs, but not more. Upon exercise of the option, the holder is required to
pay the purchase price of the underlying security in the case of a call option,
or deliver the security in return for the purchase price in the case of a put
option. Prior to exercise or expiration, an option position may be terminated
only by entering into a closing purchase or sale transaction. This requires a
secondary market on the exchange on which the position was originally
established. Each exchange on which option contracts are traded has
established a number of limitations governing the maximum number of positions
which may be held by a trader, whether acting alone or in concert

B - 5
<PAGE> 35

with others. The Investment Manager does not believe that these trading and
position limits would have an adverse impact on the possible use of hedging
strategies by the Fund. See "Risk Factors" below.

To the extent practicable, the Fund will attempt to be fully invested.
The ability of the Fund to meet its performance goals will depend to some
extent on the size and timing of cash flows into and out of the Fund as well as
the Fund's expenses. Adjustments in the securities holdings of the Fund to
accommodate cash flows will result in brokerage expenses. There can, of
course, be no assurance that the Fund will attain the Investment Objective.
The investment strategies used by the Fund to attain the Investment Objective
may be changed without approval by the shareholders of the Fund.

The Fund will readjust its securities holdings periodically to the
extent the Investment Manager deems it prudent to do so. The timing and extent
of adjustments in the holdings of the Fund will reflect the Investment
Manager's judgment as to (1) the appropriate portfolio mix to achieve the
Investment Objective of the Fund, (2) the appropriate balance between the goal
of correlating the holdings of the Fund with the Social Criteria of the Fund,
(3) the goals of minimizing transaction costs and keeping sufficient reserves
available for anticipated redemptions of shares, and (4) compliance with
certain restrictions of the Fund imposed by the Fund's investment policies,
including those mandated by the Investment Company Act. See "Fundamental
Investment Restrictions" below. There can be no assurance that any portfolio
enhancement strategies will be successful, and the performance of the Fund may
as a result be worse than if such strategies were not undertaken. The Board of
Trustees of the Fund will receive and review, at least quarterly, a report
prepared by the Investment Manager's evaluating the performance of the Fund,
and will consider what action, if any, should be taken in the event of a
significant change in the performance of the Fund.

The Fund may make short sales of securities or maintain short
positions in securities provided an investment in the subject securities is
otherwise consistent with the Fund's Investment Objective and Social Objective.
Pursuant to the Investment Company Act, the Fund will maintain government
securities and certain other assets in amounts sufficient to cover the fair
market value of such sales and positions and margin posted with brokers for
such sales and positions. No more than 25% of the Fund's net assets will be
used as collateral for such short positions at any one time.

FUNDAMENTAL INVESTMENT RESTRICTIONS

The Fund has adopted the following fundamental investment policies
which may not be changed without approval by holders of a majority of the
outstanding shares of the Fund, which as used in this Statement of Additional
Information means the vote of the lesser of (1) 67% or more of the outstanding
"voting securities" of the Fund (as such term is defined in the Investment
Company Act), present at a meeting, if the holders of more than 50% of the
outstanding "voting securities" of the Fund are present or represented by
proxy, or (2) more than 50% of the outstanding "voting securities" of the Fund.
The Fund will not as a matter of operating policy:

(1) borrow money, except from banks, and except that as a
temporary measure for extraordinary or emergency purposes the Fund may borrow
an amount not to exceed one-third of the current value of the net assets of the
Fund including the amount borrowed, moreover, the Fund may not purchase any
securities at any time at which borrowings exceed 5% of the total assets of the
Fund, taken in each case at market value (it is intended that the Fund would
borrow money only from banks and only to accommodate requests for the
withdrawal of all or a portion of a beneficial interest in the Fund while
effecting an orderly liquidation of securities) (for additional related
restrictions, see clause (i) under the caption "Non-Fundamental State and
Federal Restrictions" below); In the

B - 6
<PAGE> 36
event that the asset coverage for the Fund's borrowings falls below 300%, the
Fund will reduce within three days the amount of its borrowings in order to
provide for 300% asset coverage;

(2) purchase any security or evidence of interest therein on
margin, except that the Fund may obtain such short-term credit as may be
necessary for the clearance of purchases and sales of securities and except
that the Fund may make deposits of initial deposit and variation margin in
connection with the purchase, ownership, holding or sale of options;

(3) write any put or call option or any combination thereof,
provided that this shall not prevent (i) the purchase, ownership, holding or
sale of warrants where the grantor of the warrants is the issuer of the
underlying securities, or (ii) the purchase, ownership, holding or sale of
options on securities;

(4) underwrite securities issued by other persons, except insofar
as the Fund may technically be deemed an underwriter in selling a security;

(5) make loans to other persons except (i) through the lending of
securities held by the Fund and provided that any such loans not exceed 30% of
its total assets (taken in each case at market value), or (ii) through the use
of repurchase agreements or the purchase of short-term obligations and provided
that not more than 10% of the Fund's net assets will be invested in repurchase
agreements maturing in more than seven days (for additional related
restrictions, see paragraph (6) immediately following);

(6) invest in securities which are subject to legal or contractual
restrictions on resale (other than repurchase agreements maturing in not more
than seven days and other than securities which may be resold pursuant to Rule
144 and/or Rule 144A under the Securities Act of 1933 if the Investment
Manager, determines that a liquid market exists for such securities) if, as a
result thereof, more than 15% of its net assets (taken at market value) would
be so invested (including repurchase agreements maturing in more than seven
days);

(7) purchase or sell real estate (including limited partnership
interests but excluding securities secured by real estate or interests
therein), interests in oil, gas or mineral leases, commodities or commodity
contracts in the ordinary course of business (the Fund reserves the freedom of
action to hold and to sell real estate acquired as a result of the ownership of
securities by the Fund);

(8) make short sales of securities or maintain a short position
unless (i) at all times when a short position is open the Fund owns an equal
amount to such securities or securities convertible into or exchangeable,
without payment of any further consideration, for securities of the same issue
as, and equal in amount to, the securities sold short, and (ii) the Fund
complies with the collateral requirements of the Investment Company Act and not
more than 25% of the Fund's net assets (taken in each case at market value) is
held as collateral for such sales at any one time;

(9) issue any senior security (as that term is defined in Section
18(f) of the Investment Company Act) if such issuance is specifically
prohibited by the Investment Company Act or the rules and regulations
promulgated thereunder, except as appropriate to evidence a debt incurred
without violating paragraph (1) above;

(10) as to 75% of the Fund's assets, purchase securities of any
issuer if such purchase at the time thereof would cause more than 5% of the
Fund's assets (taken at market value) to be invested in the securities of such
issuer (other than securities or obligations issued or guaranteed by the United
States or any agency or instrumentality of the United States), except that for
purposes of this restriction the issuer of an option shall not be deemed to be
the issuer of the security or securities underlying such contract; or

(11) invest more than 25% of the Fund's assets in any one industry.

The Fund's fundamental policies also include its Investment Objective
and adherence to the Fundamental Social Criteria. Although adherence to the
Fundamental Social Criteria is a fundamental policy, the other factors and
considerations used by the Investment Manager in making its recommendations
consistent with the overall Social Objective and the Board in approving such
recommendations are discretionary and non-fundamental.

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<PAGE> 37
Whenever the Fund is requested to vote on a change in the investment
restrictions of the Fund, or the Investment Objective, the Fund will hold a
meeting of the shareholders of the Fund and will cast its vote as instructed by
the Fund's shareholders.

NON-FUNDAMENTAL STATE AND FEDERAL RESTRICTIONS

In order to comply with certain state and federal statutes and
regulatory policies, the Fund will not as a matter of operating policy:

(1) borrow money for any purpose in excess of 10% of the total
assets of the Fund (taken in each case at cost) (moreover, the Fund will not
purchase any securities at any time at which borrowings exceed 5% of its total
assets {taken at market value});

(2) pledge, mortgage or hypothecate for any purpose in excess of
10% of the net assets of the Fund (taken in each case at market value),
provided that collateral arrangements with respect to options, including
deposits of initial deposit and variation margin, are not considered a pledge
of assets for purposes of this restriction;

(3) sell any security which the Fund does not own unless by virtue
of its ownership of other securities it has at the time of sale a right to
obtain securities, without payment of further consideration, equivalent in kind
and amount to the securities sold, and provided that if such right is
conditional the sale is made upon the same conditions;

(4) invest for the purpose of exercising control or management;

(5) purchase securities issued by any registered investment
company, except by purchase in the open market where no commission or profit to
a sponsor or dealer results from such purchase other than the customary
broker's commission, or except when such purchase, though not made in the open
market, is part of a plan of merger or consolidation; provided, however, the
Fund will not purchase the securities of any registered investment company if
such purchase at the time thereof would cause more than 10% of the total assets
of the Fund (taken at the greater of cost or market value) to be invested in
the securities of such issuers or would cause more than 3% of the outstanding
voting securities of any such issuer to be held by the Fund; and provided,
further, that the Fund may also purchase securities issued by any open-end
investment company provided, however, that the Fund will not purchase the
securities of any registered investment company if such purchase at the time
thereof would cause more than 10% of the total assets of the Fund (taken at the
greater of cost or market value) to be invested in the securities of such
issuers or would cause more than 3% of the outstanding voting securities of any
such issuer to be held by the Fund; and provided, further, that the Fund shall
not purchase securities issued by any open-end investment company;

(6) invest more than 15% of the net assets of the Fund (taken at
the greater of cost or market value) in securities that are illiquid or not
readily marketable (defined as a security that cannot be sold in the ordinary
course of business within seven days at approximately the value at which the
Fund has valued the security);

(7) invest more than 10% of the net assets of the Fund (taken at
the greater of cost or market value) in securities that are restricted as to
resale by the Securities Act of 1933, as amended (including Rule 144 and Rule
144A securities);

(8) invest more than 10% of the net assets of the Fund (taken at
the greater of cost or market value) in securities that are issued by issuers
which (including the period of operation of any predecessor company or
unconditional guarantor of such issuer) have been in operation less than three
years (including predecessors);

(9) purchase securities of any issuer if such purchase at the time
thereof would cause it to hold more than 10% of any class of securities of such
issuer, for which purposes all indebtedness of an issuer shall be deemed a
single class and all preferred stock of an issuer shall be deemed a single
class, except that option contracts shall not be subject to this restriction;

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<PAGE> 38

(10) purchase or retain any securities issued by an issuer any of
whose officers, directors, trustees or security holders is an officer or
Trustee of the Fund, or is an officer or director of the Investment Manager
(the investment adviser and manager of the Fund), if after the purchase of the
securities of such issuer by the Fund one or more of such persons owns
beneficially more than 1/2 of 1% of the shares or securities, or both, all
taken at market value, of such issuer, and such persons owning more than 1/2
of 1% of such shares or securities together own beneficially more than 5% of
such shares or securities, or both, all taken at market value;

(11) invest more than 5% of the Fund's net assets in warrants
(valued at the lower of cost or market), but not more than 2% of the Fund's net
assets may be invested in warrants not listed on the New York Stock Exchange or
the American Stock Exchange (notwithstanding the foregoing, warrants attached
to other securities are not subject to this limitation;

(12) make short sales of securities or maintain a short position,
unless (i) at all times when a short position is open, the Fund owns an equal
amount of such securities or securities convertible into or exchangeable,
without payment of any further consideration, for securities of the same issue
and equal in amount to the securities sold short, and (ii) not more than 25% of
the Fund's net assets (taken at market value) is represented by such
securities, or securities convertible into or exchangeable for such securities,
at any one time;

(13) enter into options transactions unless (i) each such option is
traded on an exchange, (ii) the aggregate premiums paid on all such options
which are held at any time by the Fund do not exceed 20% of the Fund's total
net assets, and (iii) the aggregate margin deposits required on all such
futures or options held at any time do not exceed 5% of the Fund's total
assets; or

(14) purchase securities of "unseasoned issuers" if such
investments will exceed 5% of the Fund's total assets (an unseasoned issuer is
an issuer {including its predecessors} that has been in operation for less than
three years).

Restrictions (1) through (14) are not fundamental and may be changed
with respect to the Fund by the Board of Trustees without approval by the
Fund's shareholders or its other investors. The Fund will comply with the
state securities laws and regulations of all states in which it is registered.

In order to permit the sale of the Shares in certain states, the Fund
reserves the right to may make commitments more restrictive than the investment
policies and restrictions set forth above. If the Fund determines that any
such commitment is not in its best interests, it may choose not to sell the
Shares in these states or seek a waiver in certain states.

PERCENTAGE RESTRICTIONS

If a percentage restriction on investment or utilization of assets set
forth above or referred to in the Prospectus is adhered to at the time an
investment is made or assets are so utilized, a later change in percentage
resulting from changes in the value of the securities held by the Fund will not
be considered a violation of policy; provided that if at any time the ratio of
borrowings of the Fund to the net asset value of the Fund exceeds the ratio
permitted by Section 18(f) of the Investment Company Act, the Fund will take
the corrective action required by Section 18(f).

RISK FACTORS

INVESTMENT OBJECTIVE

There can be no assurance that the Fund will be able to attain its
Investment Objective. It should be noted that the limitation of the Fund's
investments to equity securities of companies with progressive policies towards
gays and lesbians will tend to limit the availability of investment
opportunities to the Fund compared to that for other investment companies that
have a comparable investment objective to that of the Fund.

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<PAGE> 39
COMMON STOCKS

CONVERTIBLE SECURITIES

While no securities investment is completely without risk, investments
in convertible securities of a corporation generally entail less risk than the
corporation's common stock, although the extent to which such risk is reduced
depends in large measure upon the degree to which the convertible security
sells above its value as a fixed income security. Convertible securities have
unique investment characteristics in that they generally (1) have higher yields
than common stocks, but lower yields than comparable non-convertible
securities, (2) are less subject to fluctuation in value than the underlying
stock since they have fixed income characteristics, and (3) provide the
potential for capital appreciation if the market price of the underlying common
stock increases. The investment value of a convertible security is influenced
by changes in interest rates, with investment value declining as interest rates
increase and increasing as interest rates decline. The credit standing of the
issuer and other factors also may have an effect on the convertible security's
investment value. The conversion value of a convertible security is determined
by the market price of the underlying common stock. If the conversion value is
low relative to the investment value, the price of the convertible security is
governed principally by its investment value. Generally, the conversion value
decreases as the convertible security approaches maturity. To the extent the
market price of the underlying common stock approaches or exceeds the
conversion price, the price of the convertible security will be increasingly
influenced by its conversion value. A convertible security generally will sell
at a premium over its conversion value by the extent to which investors place
value on the right to acquire the underlying common stock while holding a fixed
income security. The Fund only intends to invest in convertible securities
where the value of the option is minimal and the convertible security trades on
the basis of its coupon.

ILLIQUID AND RESTRICTED SECURITIES

The Fund may purchase a publicly-traded company's "restricted
securities." Restricted securities may not be traded on the public market
except in accordance with Rule 144 under the Securities Act, which mandates
certain holding periods, information dissemination requirements, and certain
other conditions, or Rule 144A to qualified institutional investors. Investing
in restricted securities will impair the liquidity of the Fund's portfolio to
the extent they cannot be publicly traded under Rule 144 or, if applicable,
qualified institutional investors become, for a time, uninterested in
purchasing these securities.

SECURITIES OF FOREIGN ISSUERS

Some of the securities included in the Fund may be those of foreign
issuers (provided that the securities are publicly-traded in the United States
in the form of American Depositary Receipts or similar instruments the market
for which is denominated in United States dollars). Securities of foreign
issuers may present a greater degree of risk (e.g., as a result of exchange
rate fluctuation, tax provisions, war or expropriation) than do securities of
domestic issuers.

LOANS OF SECURITIES

The Fund may lend its securities to brokers, dealers and financial
institutions provided, among other things, that the loan is secured
continuously by collateral consisting of U.S. Government securities or cash or
letters of credit, which is marked to the market daily to ensure that each loan
is fully collateralized at all times. Loans of securities involve a risk that
the borrower may fail to return the securities or may fail to provide
additional collateral.

B - 10
<PAGE> 40
OPTIONS

The Fund may enter into certain transactions involving stock options
for the purpose of hedging against possible increases in the value of
securities which are expected to be purchased by the Fund or possible declines
in the value of securities which are held by the Fund. Were the Fund to
establish an option position for the purpose of hedging against investment
risks, it would do so only if there appears to be a liquid secondary market
therefor, there can be no assurance that such a market will exist for any
particular option contract at any specific time. In that event, it may not be
possible to close out a position held by the Fund, and the Fund could be
required to purchase or sell the instrument or instruments underlying an
option, make or receive a cash settlement or meet ongoing variation margin
requirements. The inability to close out option positions also could have an
adverse impact on the Fund's ability to effectively hedge its portfolio.

SHORT POSITIONS

HISTORY OF OPERATIONS; EXPERIENCE OF INVESTMENT MANAGER

As a recently created entity, the Trust will be subject to all the
risks incident to the creation of a new business, including the absence of a
history of operation, and there can be no guarantee that the Investment
Objective of the Fund will be attained. The Investment Manager is a newly
created entity and, as such, prior to the commencement of operations of the
Fund, had no previous experience in providing investment management services to
an investment company; however, the Investment Manager's designated Portfolio
Manager for the Fund has provided analytical and portfolio management services
to investment companies and institutional asset management clients, and the
Operations Manager of the Investment Manager and the Fund's Administrator,
Furman Selz, have provided operations, compliance and administrative services
to investment companies. See "Management Of And Service Providers For The
Trust And The Fund" below.

INVESTMENT RISKS

There are market risks inherent in any investment, and there is no
assurance that the Fund will attain its Investment Objective or that any income
will be earned. Moreover, the application of the investment policies is
basically dependent upon the judgment of the Investment Manager. A prospective
purchaser of shares of the Fund should realize there are risks in any policy
dependent upon such judgment and that no representation is made that the
Investment Objective of the Fund will be attained or that there may not be
substantial loses in any particular investment. At any time, the value of the
Fund's shares may be more or less than the cost of such shares to the investor.

TAX-SHELTERED RETIREMENT PLANS

The Trust does not offer a prototype tax-sheltered retirement plan.
However, banks, broker-dealers and other financial intermediaries may offer
such plans through which shares of the Fund may be purchased. These plans are
more fully described below. Persons who wish to establish a tax-sheltered
retirement plan should consult their financial institutions as to availability
of such plans and their own tax advisers or attorneys regarding their
eligibility to do so and the laws applicable thereto, such as the fiduciary
responsibility provisions and diversification

B - 11
<PAGE> 41
requirements and the reporting and disclosure obligations under the Employee
Retirement Income Security Act of 1974. The Trust is not responsible for
compliance with such laws. Further information regarding the retirement plans,
including applications and fee schedules, may be obtained upon request to the
Fund.

INDIVIDUAL RETIREMENT ACCOUNT AND SPOUSAL INDIVIDUAL RETIREMENT ACCOUNT

The IRA is available to all individuals, including self-employed
individuals, who receive compensation for services rendered and wish to
purchase shares of the Fund. An IRA may also be established pursuant to a
simplified employee pension plan ("SEP"). Spousal Individual Retirement
Accounts ("SPIRA") are available to individuals who are otherwise eligible to
establish an IRA for themselves and whose spouses are treated as having no
compensation of their own.

In general, the maximum deductible contribution to an IRA which may be
made for any one year is $2,000 or 100% of annual compensation includable in
gross income, whichever is less. If an individual establishes a SPIRA, the
maximum deductible amount that the individual may contribute annually is the
lesser of $2,250 or 100% of such individuals compensation includable in his or
her gross income for such year; provided, however, that no more than $2,000 per
year for either individual may be contributed to either the IRA or SPIRA.
Contributions to a SEP (discussed below) are excluded from an employee's gross
income and are subject to different limitations.

All taxpayers, including those who are active participants in
employer-sponsored retirement plans, will be able to make fully deductible IRA
contributions at the same levels discussed above, if their adjusted gross
income is less than the following levels: $25,000 for single taxpayers and
$40,000 for married taxpayers who file joint returns.

Married taxpayers who file joint tax returns will generally be deemed
to be active participants if either spouse is an active participant under an
employer-sponsored retirement plan. In the case of taxpayers who are active
participants in employer-sponsored retirement plans and who have adjusted gross
income which exceeds the specified levels, deductible IRA contributions will be
phased out on the basis of adjusted gross income between $25,000 and $35,000
for single taxpayers adjusted gross income of $10,000 and under for married
taxpayers who file separate returns, and combined adjusted gross income between
$40,000 and $50,000 for married taxpayers who file joint returns. The $2,000
IRA deduction is reduced by $200 for each $1,000 of adjusted gross income in
excess of the following levels: $25,000 for single taxpayers, $40,000 for
married taxpayers who file joint returns, and $0 for married taxpayers who file
separate returns. In the case of a taxpayer who contributes to an IRA and a
SPIRA, the $2,250 IRA deduction is reduced by $225 for each $1,000 of adjusted
gross income in excess of $40,000.

Individuals who are ineligible to make fully deductible contributions
may make nondeductible contributions up to an aggregate of $2,000 in the case
of contributions (deductible and nondeductible) to an IRA and up to an
aggregate of $2,250 in the case of contributions (deductible and nondeductible)
to an IRA and SPIRA and the income upon all such contributions will accumulate
tax free until distribution.

In addition, a separate IRA may be established by a "rollover"
contribution, which may permit the tax-free transfer of assets from qualified
retirement plans under specified circumstances. A "rollover contribution"
includes a lump sum distribution received by an individual, because of
severance of employment, from a qualified plan and paid into an individual
retirement account within 60 days after receipt.

Dividends and capital gains earned on amounts invested in either an
IRA or SPIRA are automatically reinvested by the Trustee in shares of the Fund
and accumulate tax-free until distribution. Distributions from either an IRA
or SPIRA prior to age 59 1/2, unless made as a result of disability or death,
may result in adverse tax consequences and penalties. In addition, there is a
penalty on contributions in excess of the contribution limits and other
penalties are imposed on insufficient payouts after age 70 1/2.

B - 12
<PAGE> 42
SIMPLIFIED EMPLOYEE PENSION PLAN

A SEP may be utilized by employers to provide retirement income to
employees by making contributions to employees SEP IRAs. Owners and partners
may qualify as employees. The employee is always 100% vested in contributions
made under a SEP. The maximum contribution to a SEP-IRA (an IRA established to
receive SEP contributions) is the lesser of $30,000 or 150% of compensation,
excluding contributions made pursuant to a salary reduction arrangement.
Subject to certain limitations, an employer may also make contributions to a
SEP-IRA under a salary reduction arrangement by which the employee elects
contributions to a SEP-IRA in lieu of immediate cash compensation. The maximum
amount which may be contributed to a SEP-IRA (for 1995) under a salary
reduction agreement is the lesser of $30,000 (as adjusted for cost of living
increases) or 15% of compensation up to a current annual compensation limit of
$150,000.

Contributions by employers under a SEP arrangement up to the maximum
permissible amounts are deductible for federal income tax purposes.
Contributions up to the maximum permissible amounts are not includable in the
gross income of the employee. Dividends and capital gains on amounts invested
in SEP-IRAs are automatically reinvested in shares of the Fund and accumulate
tax-free until distribution. Contributions in excess of the maximum
permissible amounts may be withdrawn by the employee from the SEP-IRA no later
than April 15 of the calendar year following the year in which the contribution
is made without tax penalties. Such amounts will, however, be included in the
employee's gross income. Withdrawals of such amounts after April 15 of the
year next following the year in which the excess contributions is made and
withdrawals of any other amounts prior to age 59 1/2, unless made as a result
of disability or death, may result in adverse tax consequences.

QUALIFIED PENSION PLANS

The Qualified Pension Plan can be utilized by self-employed
individuals, partnerships and corporations and their employees who wish to
purchase shares of a Fund under a retirement program.

The maximum contribution which may be made to a Qualified Pension Plan
in any one year on behalf of a participant is, depending on the benefit formula
selected by the Employer, up to the lesser of $30,000 or 25% of compensation
(net earned income in the case of a self-employed individual). Contributions
by Employers to Qualified Pension Plans up to the maximum permissible amounts
are deductible for Federal income tax purposes. Contributions in excess of
permissible amounts will result in adverse tax consequences and penalties to
the Employer. Dividends and capital gains earned on amounts invested in
Qualified Pension-Plans are automatically reinvested in shares of the Fund and
accumulate tax-free until distribution. Withdrawals of contributions prior to
age 59 1/2, unless made as a result of disability, death or early retirement,
may result in adverse tax consequences and penalties.

403(b)(7) PROGRAM

The Tax-Deferred Annuity Program and Custodial Account offered by the
Fund (the "403(b)(7) Program") allows employees of certain tax exempt
organizations and schools to have a portion of their compensation set aside for
their retirement years in shares held in an investment company custodial
account.

In general, the maximum limit on annual contributions for each
employee is the lesser of $30,000 per year (as adjusted by the IRS for
cost-of-living increases), 25% of the employee's compensation or the employee's
exclusion allowance specified in Section 403(b) of the Code. However, an
employee's salary reduction contributions to a 403(b)(7) Program may not exceed
$9,500 a year (1995) (as adjusted for cost of living expenses and may be
further adjusted if the employee participates in another plan). Contributions
in excess of permissible amounts may result in adverse tax consequences and
penalties. Dividends and capital gains on amounts invested in the 403(b)(7)
Program are automatically reinvested in shares of the Fund. It is intended
that dividends and capital gains on amounts invested in the 403(b)(7) Program
will accumulate tax-free until distribution.

Employees will receive distributions from their accounts under the
403(b)(7) Program following termination of employment by retirement or at such
other time as the employer shall designate, but in no case later than an

B - 13
<PAGE> 43
employee's reaching age 65. Withdrawals of contributions prior to age 59 1/2,
unless made as a result of disability, death or early retirement, may result in
adverse tax consequences and penalties. Employees will also receive
distributions from their accounts under the 403(b)(7) Program in the event they
become disabled.

INVESTMENT PROGRAMS

AUTOMATIC INVESTMENT PLAN

Investors may periodically invest, through banks, broker-dealers and
other financial intermediaries offering automatic payment services, a specified
dollar amounts in periodic intervals into the Fund (the "Automatic Investment
Plan"). The minimum initial investment under the Automatic Investment Plan is
$250, with subsequent minimum investments of $50. Payments under the Automatic
Investment Plan are automatic and will continue until such time as the Fund and
the investor's financial institution are notified to discontinue further
investments. See "Purchases And Redemptions Of Shares" in the Prospectus.

PERFORMANCE INFORMATION

The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Performance
Information."

TOTAL RETURN

For purposes of quoting and comparing the performance of the Fund to
that of other mutual funds and to stock or other relevant indices in
advertisements or in reports to shareholders, performance may be stated in
terms of total return. Under the rules of the Securities and Exchange
Commission, a fund's advertising performance must include total return quotes
calculated according to the following formula:

n
P(1 + T) = ERV

Where: P = a hypothetical initial payment of
$1,000

T = average annual total return

n = number of years (1, 5 or 10)

ERV = ending redeemable value at the end
of the 1, 5 or 10 year periods
(or fractional portion thereof)
of a hypothetical $1,000 payment
made at the beginning of the 1, 5
or 10 year periods.

Under the foregoing formula, the time periods used in advertising will
be based on rolling calendar quarters, updated to the last day of the most
recent quarter prior to submission of the advertisement for publication, and
will cover one, five and ten year periods or a shorter period dating from the
effectiveness of the Fund's registration statement. Total return, or "T" in
the formula above, is computed by finding the average annual compounded rates
of return over the 1, 5 and 10 year periods (or fractional portion thereof)
that would equate the initial amount invested to the ending redeemable value.
The Fund may also from time to time include in such advertising an aggregate
total return figure or a total return figure that is not calculated according
to the formula set forth above in order to compare more accurately the Fund's
performance with other measures of investment return. For example, in
comparing the Fund's total return with data published by Lipper Analytical
Services, Inc., CDA Investment Technologies, Inc. or Weisenberger Investment
Company Service, or with the performance of the Standard & Poor's 500 Stock
Index or the Dow Jones Industrial Average, as appropriate, the Fund may
calculate its aggregate and/or average annual total return for the specified
periods of time by assuming the

B - 14
<PAGE> 44
investment of $1,000 in Fund shares and assuming the reinvestment of each
dividend or other distribution at net asset value on the reinvestment date.
Such alternative total return information will be given no greater prominence
in such advertising than the information prescribed under the rules of the
Securities and Exchange Commission, and all advertisements containing
performance data will include a legend disclosing that such performance data
represent past performance and that the investment return and principal value
of an investment will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost.

YIELD

The Fund may also advertise its yield. Under the rules of the
Securities and Exchange Commission, the Fund's advertised yield must be
calculated using the following formula:

6
YIELD = 2[(a-b +1) - 1]
---
cd

Where: a = dividends and interest earned during the
period.

b = expenses accrued for the period (net of
reimbursement).

c = the average daily number of shares
outstanding during the period that were
entitled to receive dividends.

d = the maximum offering price per share on the
last day of the period.

Under the foregoing formula, yield is computed by compounding
semi-annually, the net investment income per share earned during a 30 day
period divided by the maximum offering price per share on the last day of the
period. For the purpose of determining the interest earned (variable "a" in
the formula) on debt obligations that were purchased by the Fund, the formula
generally calls for amortization of the discount or premium; the amortization
schedule will be adjusted monthly to reflect changes in the market values of
the debt obligations.

Yield may fluctuate daily and does not provide a basis for determining
future yields. Because the yields will fluctuate, they cannot be compared with
yields on savings account or other investment alternatives that provide an
agreed to or guaranteed fixed yield for a stated period of time. However,
yield information may be useful to an investor considering temporary
investments in money market instruments. In comparing the yield of one money
market fund to another, consideration should be given to each fund's investment
policies, including the types of investments made, lengths of maturities of the
Fund securities (the method used by the Fund to compute the yield methods may
differ) and whether there are any special account charges which may reduce the
effective yield.

The yields on certain obligations are dependent on a variety of
factors, including general money market conditions, conditions in the
particular market for the obligation, the financial condition of the issuer,
the size of the offering, the maturity of the obligation and the ratings of the
issue. The ratings of Moody's and Standard & Poor represent their respective
opinions as to the quality of the absolute standards of quality. Consequently,
obligations with the same rating, maturity and interest rate may have different
market prices. In addition, subsequent to its purchase by the Fund, an issue
may cease to be rated or may have its rating reduced below the minimum required
for purchase. In such an event, the Investment Manager will consider whether
the Fund should continue to hold the obligation.

DETERMINATION OF NET ASSET VALUE;
VALUATION OF FUND SECURITIES

The net asset value of each share of the Fund is determined each day
on which the New York Stock Exchange is open for trading (a "Fund Business
Day"). (As of the date of this Statement of Additional Information, the New
York Stock Exchange is open for trading every weekday except for the following
holidays: New Year's

B - 15
<PAGE> 45
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day). This determination of net asset value of
shares of the Fund is made once during each such day at 4:00 p.m. New York time
by dividing the value of the Fund's net assets (i.e., the value of its
investment in the Fund and any other assets less its liabilities, including
expenses payable or accrued) by the number of shares outstanding at the time
the determination is made. Purchases and redemptions will be effected at the
time of determination of net asset value next following the receipt of any
purchase or redemption order deemed to be in good order. See "Purchases And
Redemptions Of Shares" in the Prospectus.

Equity securities held by the Fund are valued at the last sale price
on the exchange on which they are primarily traded or on the NASDAQ system for
unlisted national market issues, or at the last quoted bid price for securities
in which there were no sales during the day or for unlisted securities not
reported on the NASDAQ system. If the Fund purchases option contracts, such
option contracts which are traded on commodities or securities exchanges are
normally valued at the settlement price on the exchange on which they are
traded. Short-term obligations with remaining maturities of less than sixty
days are valued at amortized cost, which constitutes fair value as determined
by the Board of Trustees of the Fund. Fund securities (other than short-term
obligations with remaining maturities of less than sixty days) for which there
are no such quotations or valuations are valued at fair value as determined in
good faith by or at the direction of the Fund's Board of Trustees.

A determination of value used in calculating net asset value must be a
fair value determination made in good faith utilizing procedures approved by
the Fund's Board of Trustees. While no single standard for determining fair
value exists, as a general rule, the current fair value of a security would
appear to be the amount which the Fund could expect to receive upon its current
sale. Some, but not necessarily all, of the general factors which may be
considered in determining fair value include: (1) the fundamental analytical
data relating to the investment; (2) the nature and duration of restrictions on
disposition of the securities; and (3) an evaluation of the forces which
influence the market in which these securities are purchased and sold. Without
limiting or including all of the specific factors which may be considered in
determining fair value, some of the specific factors include: type of security,
financial statements of the issuer, cost at date of purchase, size of holding,
discount from market value, value of unrestricted securities of the same class
at the time of purchase, special reports prepared by analysts, information as
to any transactions or offers with respect to the security, existence of merger
proposals or tender offers affecting the security, price and extent of public
trading in similar securities of the issuer or comparable companies, and other
relevant matters.

Interest income on short-term obligations held by the Fund is
determined on the basis of interest accrued less amortization of premium.

B - 16
<PAGE> 46
MANAGEMENT OF AND SERVICE PROVIDERS FOR THE TRUST AND THE FUND

TRUSTEES AND OFFICERS OF THE FUND

The Trustees and officers of the Fund and their ages and principal
occupations during the past five years are set forth below. Asterisks indicate
that those Trustees and officers are "interested persons" (as defined by the
Investment Company Act) of the Fund. Unless otherwise indicated below, the
address of each Trustee and officer is 9107 Wilshire Boulevard, Suite 700,
Beverly Hills, California 90210.

<TABLE>
<CAPTION>
POSITIONS(S) HELD
NAME AND ADDRESS AGE WITH REGISTRANT OCCUPATION(S) DURING PAST 5 YEARS
- ----------------- --- ------------------ ---------------------------------
<S> <C> <C> <C>

Shelly J. Meyers* 36 Trustee (Chairman Manager and President of Meyers,
of the Board) and Sheppard & Co., LLC, since February
President 1996; Assistant Vice President,
Institutional Asset Management for The
Boston Company Asset Management, Inc.,
from July 1994 through February 1995;
Associate, The Boston Company Asset
Management, Inc., June 1993 to
September 1993; Lead Analyst,
International Audit, Chevron
Corporation, from June, 1989 through
September, 1992.

Leslie C. Sheppard* 42 Trustee and Manager and Executive Vice President
Executive Vice of Meyers, Sheppard & Co., LLC, since
President February 1996; Marketing
Representative/Asset Manager - Real
Estate, Fannie Mae, from 1993 through
February 1996; Investment Banking
Principal and Asset Manager - Real
Estate, Takenaka & Co., from 1989
through 1992.

Gwendolyn H. Baba 39 Trustee General Partner of Baba-Malouf
4470 Sunset Blvd., #187 Properties, Community Storage Company,
Los Angeles, CA 90027 and Droubie Properties, since 1981.

Jay W. Gendron, Esq. 39 Trustee Vice President, Legal Affairs, and
Warner Bros. Television attorney, Warner Bros. Television
300 Television Plaza Production (formerly Lorimar
Burbank, CA 91505 Television), since 1987.

Robert E. Gipson, Esq. 49 Trustee Attorney, Gipson, Hoffman & Pancione,
Gipson Hoffman & Pancione a Professional Corporation, since
1900 Avenue of the Stars 1982.
Suite 1100
Los Angeles, CA 90067

Leonard Greenhalgh, Ph.D. 51 Trustee Professor of Management, Amos Tuck
Amos Tuck School of School of Business Administration,
Business Administration at Dartmouth College, since 1978.
Dartmouth College
Hanover, NH 03755

Loretta Sanchez 36 Trustee President and a director of Amiga
Amiga Advisors, Inc. Advisors, Inc., since July 1993;
1624 Via Arriba Associate with Booz, Allen & Hamilton,
Palos Verdes, CA 90274 Inc., from 1990 through March 1993.
</TABLE>

B - 17
<PAGE> 47

<TABLE>
<S> <C> <C> <C>
Duane E. McWaine, M.D. 37 Trustee Psychiatrist in solo private practice
1314 Westwood Boulevard since 1988.
Suite 101-D
Los Angeles, CA 90024

John J. Pileggi* 37 Vice President and Director of Furman Selz LLC since
Furman Selz LLC Treasurer 1994; Senior Managing Director of
230 Park Avenue Furman Selz since 1992; Managing
New York, N.Y. 10169 Director of Furman Selz from 1984
through 1992.

Joan V. Fiore* 39 Vice President and Managing Director and Counsel of
Furman Selz LLC Secretary Furman Selz LLC since 1991; Attorney
230 Park Avenue with the U.S. Securities and Exchange
New York, N.Y. 10169 Commission, Division of Investment
Management, from 1986 to 1991.

Gordon M. Forrester* 35 Assistant Managing Director of Furman Selz LLC
Furman Selz LLC Treasurer since 1995; Director of Furman Selz
230 Park Avenue LLC from 1994 to 1995; Associate
New York, N.Y. 10169 Director of Furman Selz from 1991 to
1994.

Eric Rubin* 29 Assistant Managing Director of Furman Selz LLC
Furman Selz LLC Treasurer since June 1995; Vice President and
230 Park Avenue Managing Director of Banc One Investment
New York, N.Y. 10169 Advisors from November 1993 to June 1995;
Associate Director of Furman Setz LLC from
January 1989 to November 1993.

Philip McKinley* 37 Assistant Operations Manager of Meyers, Sheppard
Secretary & Co., LLC, since April, 1996; Vice
President, Compliance, of Griffen
Financial Services and The Griffen
Funds from September 1994 to March
1996; Vice President, Investments, of
Mercantile National Bank, March 1991
to September 1994.

Sheryl Hirschfeld* 35 Assistant Director of Corporate Secretary
Furman Selz LLC Secretary Services of Furman Selz LLC since
230 Park Avenue 1994; Assistant to the General
New York, N.Y. 10169 Corporate Secretary and General
Counsel at The Dreyfus Corporation
from 1982 to 1994.
</TABLE>

For further information about the Board of Trustees, see "Management
And Service Providers - Board Of Trustees And Officers" in the Prospectus.

B - 18
<PAGE> 48
COMPENSATION TABLE

The following table shows the compensation expected to be paid by the
Trust to the Trustees for the Fund's first full fiscal year of operations:

<TABLE>
<CAPTION>
PENSION OR RETIREMENT TOTAL COMPENSATION
AGGREGATE BENEFITS ACCRUED AS ESTIMATED ANNUAL FROM TRUST AND FUND
COMPENSATION FROM PART OF FUND BENEFITS UPON COMPLEX PAID TO
NAME OF TRUSTEE THE FUND EXPENSES RETIREMENT TRUSTEES
- --------------- ------------------ --------------------- ---------------- -------------------
<S> <C> <C> <C> <C>

Shelly J. Meyers None None None None
Leslie C. Sheppard None None None None
Gwendolyn H. Baba $3,000 None None $3,000
Jay W. Gendron $3,000 None None $3,000
Robert E. Gipson $3,000 None None $3,000
Leonard Greenhalgh $3,000 None None $3,000
Loretta Sanchez $3,000 None None $3,000
Duane E. McWaine $3,000 None None $3,000
</TABLE>

The Trust will pay $2,000 in fees per annum to each Trustee who is not
a manager, officer, employee or holder of 5% or more of the Investment Manager,
its affiliates, or any Fund service provider, plus $250 per meeting attended by
such Trustee, together with such Trustees' out-of-pocket expenses related to
attendance at meetings of the Board of Trustees. Executive officers of the
Trust will receive no compensation from the Trust for their services as such.
The Trust does not have a pension or retirement plan applicable to Trustees or
officers of the Trust.

INVESTMENT MANAGER

The Fund has engaged the Investment Manager, Meyers Sheppard, to serve
as both the manager and the investment adviser for the Fund pursuant to an
Investment Management Agreement approved by the Board of Trustees. The
Investment Manager is a California limited liability company organized on
January 23, 1996. The managers and principal owners of the Investment Manager
are Ms. Shelly J. Meyers and Mr. Leslie C. Sheppard. The officers of the
Investment Manager are Ms. Meyers, President, Mr. Sheppard, Senior Vice
President, and Mr. Philip McKinley, Operations Manager. As a newly created
entity, the Investment Manager did not, prior to the commencement of the
operations of the Fund, have previous experience in providing investment
management services to an investment company. However, Ms. Shelly J. Meyers,
the Investment Manager's designated Portfolio Manager for the Fund, has
provided analytical and portfolio management services to investment companies
and institutional asset management clients. Additionally, Mr. Philip McKinley,
the Operations Manager of the Investment Manager, as well as the Fund's
Administrator, Furman Selz, have provided operations, compliance and
administrative services to investment companies. See "Investment And Social
Objectives, Policies Restrictions - Risk Factors - History Of Operations;
Experience Of Investment Manager" in the Prospectus.

The Investment Manager provides its services as the Fund's manager and
investment adviser pursuant to an Investment Management Agreement approved by
the Board of Trustees.

As the Fund's manager, the Investment Manager oversees (subject to the
overall authority of the Board of Trustees) the overall operations and
administration of the Fund, including the supervision of professional services
rendered by others, including the Distributor, Administrator, Transfer Agent,
and Custodian, as well as accounting, auditing and other services.

As the Fund's investment adviser, the Investment Manager implements
the Investment Strategy of the Fund and manages the Fund's investments subject
to the Fund's Investment Objective and Fundamental Social Criteria and the
overall supervision and approval by the Board of Trustees. Specifically, the
Investment Manager determines, from amongst the universe of companies
identified as satisfying the Social Objective, which companies the Fund should
invest in, what the appropriate mix of investments amongst such companies
should be, and the timing and extent of adjustments in the holdings of the Fund
to satisfy the requirements of diversification and the

B - 19
<PAGE> 49
need to maintain sufficient reserves for anticipated redemptions of shares.
The Investment Manager also has sole discretion to select brokers for purchases
and sales. Although the Investment Manager's investment advisory activities
are subject to general oversight by the Trustees and officers of the Fund,
neither the Trustees nor officers of the Fund evaluate the merits of the
Investment Manager's selection of individual securities from amongst designated
companies with progressive policies towards gays and lesbians.

The Investment Manager furnishes at its own expense all facilities and
personnel necessary in connection with providing these services.

The Investment Management Agreement will continue in effect if such
continuance is specifically approved at least annually by the Fund's Board of
Trustees or by a majority vote of the shareholders of the Fund at a meeting
called for the purpose of voting on the Investment Management Agreement (with
the vote of each being in proportion to the amount of their investment), and,
in either case, by a majority of the Fund's Trustees who are not parties to the
Investment Management Agreement or interested persons of any such party at a
meeting called for the purpose of voting on the Investment Management
Agreement.

The Investment Management Agreement provides that the Investment
Manager may render both management and investment advisory services to others.
The Investment Management Agreement is terminable without penalty on not more
than 60 days written notice by the Fund when authorized either by majority vote
of the shareholders in the Fund (with the vote of each being in proportion to
the amount of their investment) or by a vote of a majority of its Board of
Trustees, or by the Investment Manager, and will automatically terminate in the
event of its assignment. The Investment Management Agreement provides that
neither the Investment Manager nor its personnel shall 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 its services to the Fund, except for willful
misfeasance, bad faith or gross negligence or reckless disregard of its or
their obligations and duties under the Investment Management Agreement.

Pursuant to the terms of the Investment Management Agreement, the Fund
pays the Investment Manager for its management and investment advisory
services, a monthly fee equal, on an annual basis, to 1% of the Fund's average
daily net assets. The Investment Advisor reserves the right of any time to
reduce and/or waive all or part of its fees. The Investment Manager has
undertaken to waive the portion of its investment management fee necessary to
maintain Total Annual Operating Expenses of no more than 2.25% per year of
average daily net assets. The Investment Manager has also undertaken to
reimburse the Fund or make other arrangements to limit Fund expenses to the
extent required by expense limitations imposed by certain states. The most
restrictive expense limitation imposed by states provide that annual expenses
(as defined) may not exceed 2 1/2% of the first $30 million dollars of the
average value of the Fund's net assets, plus 2% of the next $70 million, plus 1
1/2% of such assets in excess of $100 million. Whether expense limitations
apply to the Fund and in what amounts depends upon the particular regulations
of such states.

ADMINISTRATOR, FUND ACCOUNTING AGENT AND TRANSFER AGENT

The Fund has entered into agreements with Furman Selz to provide the
Fund with administrative, fund accounting, and registrar, dividend disbursing
and transfer agency services, pursuant to an Administration Agreement, Fund
Accounting Agreement, and Transfer Agency Agreement, respectively. Although
each agreement provides for different methods or rates of compensation to
Furman Selz, as hereinbelow discussed, the Fund has agreed to pay Furman Selz a
minimum payment of $150,000 per year for all of the aforesaid services. Furman
Selz reserves the right at any time to reduce and/or waive all or part of its
fees. These fees are separate from any fees paid to Furman Selz in its
capacity as the Fund's Distributor.

ADMINISTRATOR

As the Fund's Administrator pursuant to the Administration Agreement,
Furman Selz generally assists the Fund and the Investment Manager in all
aspects of the Fund's administration and operations including the following:
maintaining administrative office facilities on behalf of the Fund; monitoring
the performance and billings of the independent contractors and agents of the
Fund to the extent requested by the Investment Manager; preparing or

B - 20
<PAGE> 50
assisting in the preparation of, and filing of, documents required for
compliance by the Fund with applicable federal and state laws and regulations
and stock exchanges, including financial statements and semi-annual and annual
reports to shareholders and proxy statements; maintaining the books and records
of the Fund as required under the Investment Company Act and other applicable
federal and state laws and regulations; performing secretarial services such as
the preparation of agendas, notices and minutes for meetings of the Fund's
Board of Trustees and its shareholders; and providing advice and assistance in
connection with the preparation of Fund sales literature.

As compensation for administration services, the Fund pays Furman
Selz, per year, an amount equal to 0.15% of the first $100 million in aggregate
Fund assets, 0.10% for the next $400 million, 0.07% for the next $500 million,
and 0.06% for aggregate Fund assets in excess of $1 billion.

Furman Selz will not be liable for any error of judgment or mistake of
law or for any loss suffered by the Fund in connection with the matters
relating to the Administration Agreement, except a loss from willful
misfeasance, bad faith, or gross negligence on its part in the performance of
its duties or from reckless disregard by Furman Selz of its obligations and
duties. Any person, even though also an officer, director, partner, employee
or agent of Furman Selz, shall be deemed, when rendering services to the Fund,
or acting on any Fund (other than services or business in connection with
Furman Selz' duties as Administrator) to be acting solely for the Fund and not
as an officer, director, partner, employee, or agent of Furman Selz or under
its control or discretion.

The Administration Agreement shall continue until terminated by the
Fund or Furman Selz on sixty days written notice.

FUND ACCOUNTING AGENT

As the Fund Accounting Agent pursuant to the Fund Accounting
Agreement, Furman Selz maintains in accordance with Rule 31a-1 under the
Investment Company Act, the following accounts and records relating to the
business of the Fund: cash receipts journal; cash disbursements journal;
dividends paid record; purchase and sale journal-portfolio securities;
subscription and redemption journals; security ledger; broker-dealer ledger;
general ledger; daily expense accruals; daily interest accruals; securities and
monies borrowed or loaned and collateral therefor; daily trial balances; and
investment income journal. Furman Selz shall promptly supply the Fund with
daily and periodic reports as agreed to by the Fund and Furman Selz.

Furman Selz is also obligated under the Fund Accounting Agreement to
perform the ministerial calculations necessary to calculate the Fund's net
asset value on a daily basis, and shall perform such calculations in accordance
with the Fund's then current prospectus except where the Fund has given other
instructions to utilize a different method of calculation. If quotes are not
available, Furman Selz shall give such portfolio securities values as the Fund
provides to Furman Selz by instruction. The Fund will indemnify Furman Selz
for any inaccurate or incomplete information provided to Furman Selz by the
Fund or its agents, and Furman Selz shall not be liable for any such
inaccuracies.

Furman Selz shall incur no liability for, reasonable actions of Furman
Selz taken or omitted to be taken in good faith, and Furman Selz shall be
indemnified and held harmless by the Fund for any loss, liability or expense
arising out of its performance of this agreement except a loss which results
from the gross negligence or willful misconduct of its officers, agents and
employees in such performance.

The Fund Accounting Agreement may be terminated by either Furman Selz
or the Fund on sixty days written notice.

In consideration of its services under the Fund Accounting Agreement,
the Fund will pay Furman Selz the sum of $35,000 per year, plus reimbursement
of its out-of-pocket expenses.

TRANSFER AGENT

As the Transfer Agent of the Fund pursuant to the Transfer Agency
Agreement, Furman Selz provides dividend disbursement, registrar and transfer
agency services to the Fund, in consideration of which the Fund pays

B - 21
<PAGE> 51
Furman Selz the sum of $15 per year per each shareholder, subject to a $12,000
per year minimum. Furman Selz shall also be reimbursed by the Fund for all
costs of any forms, including bank checks and proxies, used to communicate with
shareholders of the Trust or its services under the Transfer Agency Agreement,
as well as costs of postage, telephone, and telegraph.

The Transfer Agency Agreement may be terminated by Furman Selz or the
Fund on sixty days written notice.

DISTRIBUTOR

The Fund has entered into a Distribution Agreement with Furman Selz as
the Fund's Distributor. Under the Distribution Agreement, Furman Selz is
responsible for facilitating the continuous sale or redemption of Fund shares.

Solely for the purpose of reimbursing Furman Selz for activities
primarily intended to result in the sale of Fund shares, the Trust has, on
behalf of the Fund and with the approval of the Board of Trustees, adopted a
Plan of Distribution (the "Distribution Plan") pursuant to Rule 12b-1 of
Investment Company Act. Under the Distribution Plan, the Fund is authorized to
spend up to 0.25% of net asset value annually for Furman Selz's services in
anticipation of, or as reimbursement for, expenses incurred in connection with
the sale of shares of the Fund, such as payments to broker-dealers who advise
shareholders regarding the purchase, sale or retention of shares of the Fund,
payments to employees of the Distributor, advertising expenses and the expenses
of printing and distributing prospectuses and reports used for sales purposes,
expenses of preparing and printing sales literature and other
distribution-related expenses. If the fee received by the Distributor exceeds
its expenses, it may realize a profit from these arrangements.

The Distribution Plan will continue in effect indefinitely if such
continuance is specifically approved at least annually by a vote of both a
majority of the Fund's Trustees and a majority of the Fund's Trustees who are
not "interested persons of the Fund" and who have no direct or indirect
financial interest in the operation of the Distribution Plan or in any
agreement related to such Plan (the "Qualified Trustees"). The Distributor
will provide to the Trustees of the Fund a quarterly written report of amounts
expended by it under the Distribution Plan and the purposes for which such
expenditures were made. The Distribution Plan further provides that the
selection and nomination of the Fund's Qualified Trustees shall be committed to
the discretion of the disinterested Trustees of the Fund. The Distribution
Plan may be terminated upon sixty days written notice by a vote of a majority
of the Fund's Qualified Trustees or by a vote of the shareholders of the Fund
on the one hand, or by sixty days written notice by Furman Selz on the other
hand. The Distribution Plan may not be amended to increase materially the
amount of permitted expenses thereunder without the approval of shareholders
and may not be materially amended in any case without a vote of the majority of
both the Fund's Trustees and the Fund's independent Trustees. The Distributor
will preserve copies of any plan, agreement or report made pursuant to the
Distribution Plan for a period of not less than six years from the date of the
Distribution Plan, and for the first two years the Distributor will preserve
such copies in an easily accessible place.

CUSTODIAN

The Fund has entered into a Custodian Agreement with Wells Fargo Bank,
N.A. ("Wells Fargo") pursuant to which Wells Fargo acts as custodian for the
Fund. The Custodian's responsibilities include safeguarding and controlling
the Fund's cash and securities, handling the receipt and delivery of
securities, collecting interest on the Fund's investments, and maintaining
books of original entry for fund accounting purposes. As compensation for its
services, the Fund pays Wells Fargo, per year, an amount equal to 0.10% of the
first $20 million in aggregate Fund assets, and 0.04% for aggregate Fund assets
in excess of $20 million, subject to a minimum of $15,000 per year.

B - 22
<PAGE> 52
INDEPENDENT AUDITORS

KPMG Peat Marwick LLP is the independent auditor for the Fund
providing audit services, tax return preparation, and assistance and
consultation with respect to the preparation of filings with the Securities and
Exchange Commission.

CODE OF ETHICS

The Trust, on behalf of the Fund, adopted a Code of Ethics (the "Code
of Ethics"), which establishes standards by which certain access persons of the
Trust must abide relating to personal securities trading conduct. The Code of
Ethics provides that access persons shall place the interests of the
shareholders of the Fund first, shall avoid potential or actual conflicts of
interest with the Fund, and shall not take unfair advantage of their
relationship with the Fund. Access persons will be required by the Code of
Ethics to file quarterly reports of personal securities investment
transactions. The Code of Ethics provides that certain designated supervisory
person(s) will be appointed by the Trust, and shall supervise implementation
and enforcement of the Code of Ethics and shall, at their sole discretion,
grant or deny approval of transactions required by the Code of Ethics.

TAXATION

Each year the Fund intends to qualify the Fund and elect to be treated
as a "regulated investment company" under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"), by meeting all applicable requirements
of Subchapter M, as to the nature of the Fund's gross income, the amount of
Fund distributions and the composition and holding period of the Fund's assets.
Because the Fund intends to distribute all of its net investment income and net
realized capital gains to shareholders in accordance with the timing
requirements imposed by the Code, it is not expected that the Fund will be
required to pay any federal income or excise taxes. If the Fund should fail to
qualify as a "regulated investment company" in any year, the Fund would incur a
regular corporate federal income tax upon its taxable income and Fund
distributions would generally be taxable as ordinary dividend income to the
shareholders.

Shareholders of the Fund will have to pay federal income taxes and any
state or local income taxes on the dividends and capital gain distributions
they receive from the Fund. Dividends from ordinary income and any
distributions from net short-term capital gains are taxable to shareholders as
ordinary income for federal income tax purposes, whether the distributions are
made in cash or in additional shares. A portion of the Fund's ordinary income
dividends is normally eligible for the dividends received deduction for
corporations if the recipient otherwise qualifies for that deduction with
respect to its holding of Fund shares. Availability of the deduction for a
particular shareholder is subject to certain limitations, and deducted amounts
may be subject to the alternative minimum tax and result in certain basis
adjustments. Distributions of net capital gains (i.e., the excess of net
long-term capital gains over net short term capital losses), whether made in
cash or in additional shares, are taxable to shareholders as long-term capital
gains without regard to the length of time the shareholders have held their
shares.

Amounts not distributed on a timely basis in accordance with the
calendar year distribution requirement are subject to a nondeductible 4% excise
tax. To prevent imposition of the excise tax, the Fund must, and intends to,
distribute during each calendar year substantially all of its ordinary income
for that year and substantially all of its capital gain in excess of its
capital losses for that year, plus any undistributed ordinary income and
capital gains from previous years. Any Fund dividend that is declared in
October, November or December of any calendar year, that is payable to
shareholders of record in such a month, and that is paid the following January
will be treated as if received by the shareholders on December 31 of the year
in which the dividend is declared. The Fund will notify shareholders regarding
the federal tax status of its distributions after the end of each calendar
year.

B - 23
<PAGE> 53
Any Fund distribution will have the effect of reducing the per share
net asset value of shares in the Fund by the amount of the distribution.
Shareholders purchasing shares shortly before the record date of any
distribution may thus pay the full price for the shares and then effectively
receive a portion of the purchase price back as a taxable distribution.

In general, any gain or loss realized upon a taxable disposition of
shares of the Fund by a shareholder that holds-such shares as a capital asset
will be treated as long-term capital gain or loss if the shares have been held
for more than twelve months and otherwise as a short-term capital gain or loss.
However, any loss realized upon a disposition of shares in the Fund held for
six months or less will be treated as a long-term capital loss to the extent of
any distributions of net capital gain made with respect to those shares. Any
loss realized upon a disposition of shares may also be disallowed under rules
relating to wash sales.

The Fund is organized as a Delaware business trust and, under current
law, is not liable for any income or franchise tax in the State of Delaware as
long as the Fund qualifies as a regulated investment company under the Code.
The Fund's fiscal year-end is May 31.

Fund shareholders may be subject to state and local taxes on Fund
distributions to them. Shareholders are advised to consult with their tax
advisers with respect to the particular tax consequences to them of an
investment in the Fund.

FUND TRANSACTIONS AND BROKERAGE COMMISSIONS

Specific decisions to purchase or sell securities for the Fund are
made by a portfolio manager who is an employee of the Investment Manager and
who is appointed and supervised by its senior officers. Changes in the Fund's
investments are reviewed by its Board of Trustees. The portfolio manager
serving the Fund on behalf of the Investment Manager, may serve other clients
of the Investment Manager in a similar capacity.

The Fund's primary consideration in placing securities transactions
with the broker-dealer for execution is to obtain and maintain the availability
of execution at the most favorable prices and in the most effective manner
possible. The Investment Manager attempts to achieve this result by selecting
a broker-dealer to execute transactions on behalf of the Fund and other clients
of the Investment Manager based upon various relevant factors, including but
not limited to, the size and type of transaction, execution efficiency, the
basis of their professional capability, the value and quality of their
brokerage services, and the reasonableness of their brokerage commissions. In
the case of securities traded in the over-the-counter market (where no stated
commissions are paid but the prices include a dealer's markup or markdown), the
Investment Manager normally seeks to deal directly with the primary market
makers, unless in its opinion, best execution is available elsewhere. In the
case of securities purchased from underwriters, the cost of such securities
generally includes a fixed underwriting commission or concession. From
time-to-time, soliciting dealer fees are available to the Investment Manager on
the tender of the Fund's securities in so-called tender or exchange offers.
Such soliciting dealer fees are in effect recaptured for the Fund by the
Investment Manager. At present no other recapture arrangements are in effect.
Consistent with the foregoing primary consideration, the Rules of Fair Practice
of the National Association of Securities Dealers, Inc. and such other policies
as the Trustees of the Fund may determine, the Investment Manager may consider
sales of shares of the Fund and of securities of other investors as a factor in
the selection of broker-dealers to execute the Fund's securities transactions.

Under the Investment Management Agreement with the Investment Manager,
and as permitted by Section 28(e) of the Securities Exchange Act of 1934, as
amended, Meyers Sheppard may cause the Fund to pay a broker-dealer acting on an
agency basis which provides brokerage and research services to the Investment
Manager an amount of commission for effecting a securities transaction for the
Fund in excess of the amount other broker-dealers would have charged for the
transaction if the Investment Manager determines in good faith that the greater
commission is reasonable in relation to the value of the brokerage and research
services provided by the executing broker-dealer viewed in terms of either a
particular transaction or the Investment Manager's overall responsibilities to
the Fund or to its other clients. Not all of such services are useful or of
value in advising the Fund.

B - 24
<PAGE> 54
The term "brokerage and research services" includes advice as to the
value of securities, the advisability of investing in, purchasing, or selling
securities, and the availability of securities or of purchasers or sellers of
securities; furnishing analyses and reports concerning issues, industries,
securities, economic factors and trends, portfolio strategy and the performance
of accounts; and effecting securities transactions and performing functions
incidental thereto such as clearance and settlement.

Although commissions paid on every transaction will, in the judgment
of the Investment Manager, be reasonable in relation to the value of the
brokerage services provided, commissions exceeding those which another broker
might charge may be paid to broker-dealers who were selected to execute
transactions on behalf of the Fund and the Investment Manager's other clients,
in part for providing advice as to the availability of securities or of
purchasers or sellers of securities and services in effecting securities
transactions and performing functions incidental thereto such as clearance and
settlement. Certain broker-dealers may be willing to furnish statistical,
research and other factual information or services to the Investment Manager
for no consideration other than brokerage or underwriting commissions.

The Investment Manager attempts to evaluate the quality of research
provided by brokers. The Investment Manager sometimes uses evaluations
resulting from this effort as a consideration in the selection of brokers to
execute portfolio transactions. However, the Investment Manager is able to
quantify the amount of commissions which are paid as a result of such research
because a substantial number of transactions are effected through brokers which
provide research but which are selected principally because of their execution
capabilities.

The fees that the Fund pays to the Investment Manager will not be
reduced as a consequence of the Fund's receipt of brokerage and research
services. To the extent the Fund's securities transactions are used to obtain
brokerage and research services, the brokerage commissions paid by the Fund
will exceed those that might otherwise be paid for such portfolio transactions
and research, by an amount which cannot be presently determined. Such services
may be useful and of value to the Investment Manager in serving both the Fund
and other clients and, conversely, such services obtained by the placement of
brokerage business of other clients may be useful to the Investment Manager in
carrying out its obligations to the Fund. While such services are not expected
to reduce the expenses of the Investment Manager, the Investment Manager would,
through use of the services, avoid the additional expenses which would be
incurred if it should attempt to develop comparable information through its own
staff.

The Fund will not engage in brokerage transactions with the Investment
Manager (Meyers Sheppard) or the Administrator (Furman Selz) or any of their
respective affiliates or any affiliate of the Fund except to the extent, within
the meaning of Rule 17e-1 of the Investment Company Act, any commissions, fees
or other remunerations payable in connection with such transactions do not
exceed the usual and customary commission or fee of such broker and are
reasonable and fair compared to those which could be obtained by other brokers
in comparable transactions.

In certain instances there may be securities which are suitable for
the Fund as well as for one or more of the Investment Manager's other clients.
Investment decisions for the Fund and for the Investment Manager's other
clients are made with a view to achieving their respective investment
objectives. It may develop that a particular security is bought or sold for
only one client even though it might be held by, or bought or sold for, other
clients. Likewise, a particular security may be bought for one or more clients
when one or more clients are selling that same security. Some simultaneous
transactions are inevitable when several clients receive investment advice from
the same investment adviser, particularly when the same security is suitable
for the investment objectives of more than one client. When two or more
clients are simultaneously engaged in the purchase or sale of the same
security, the securities are allocated among clients in a manner believed to be
equitable to each. It is recognized that in some cases this system could have
a detrimental effect on the price or volume of the security as far as the Fund
is concerned. However, it is believed that the ability of the Fund to
participate in volume transactions will produce better executions for the Fund.

B - 25
<PAGE> 55
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES

The Fund is a Delaware Business Trust established under a Certificate
of Trust dated March 20, 1996 and filed with the Delaware Secretary of State on
March 25, 1996, and governed by a Trust Instrument dated March 26, 1996. Its
authorized capital consists of an unlimited number of shares of beneficial
interest of $0.00001 par value, issued in separate series. Each share of each
series represents an equal proportionate interest in that series with each
other share of that series.

The assets of the Fund received for the issue or sale of the shares of
each fund and all income, earnings, profits and proceeds thereof, subject only
to the rights of creditors, are specifically allocated to such series and
constitute the underlying assets of such series. The underlying assets of each
series are segregated on the books of account, and are to be charged with the
liabilities in respect to such series and with such a share of the general
liabilities of the Fund. If a series was unable to meet its obligations, the
assets of only that series, and no other series, will be available to creditors
for that purpose. General liabilities, expenses, costs, charges or reserves
which are not readily identifiable as belonging to any particular series shall
be allocated and charged by the Trustees between or among any one or more of
the series in such manner as the Trustees deem fair and equitable. In the
event of the dissolution or liquidation of the Fund or any series, the holders
of the shares of any series are entitled to ratably receive, as a class, the
value of the underlying assets of such shares available for distribution to
shareholders. However, the payment to the holders may be reduced by any fees,
expenses or charges allocated to that series.

Shares of the Fund entitle their holder to one vote per share;
however, separate votes are taken by each series on matters affecting an
individual series. For example, a change in investment policy for a series
would be voted upon only by shareholders of the series involved.

The Trustees of the Fund have the authority to designate additional
series and to designate the relative rights and preferences as between the
different series. There is presently one series so designated. All shares
issued and outstanding will be fully paid and nonassessable by the Fund, and
redeemable as described in this Statement of Additional Information and in the
Prospectus.

The Trust Instrument provides that obligations of the Fund are not
binding upon the Trustees individually but only upon the property of the Fund,
that the Trustees and officers will not be liable for errors of judgment or
mistakes of fact or law, and that the Fund will indemnify its Trustees and
officers against liabilities and expenses incurred in connection with
litigation in which they may be involved because of their offices with the Fund
unless, as to liability to Fund or Fund shareholders, it is finally adjudicated
that they engaged in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in their offices, or unless with
respect to any other matter it is finally adjudicated that they did not act in
good faith in the reasonable belief that their actions were in the best
interests of the Fund. In the case of settlement, such indemnification will be
provided unless it has been determined by a court or other body approving the
settlement or other disposition, or by a reasonable determination, based upon a
review of readily available facts, by vote of a majority of disinterested
Trustees or in a written opinion of independent counsel, that such officers or
Trustees have engaged in willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties.

The Trust Instrument contains an express disclaimer of shareholder
liability for acts or obligations of the Trust and provides for indemnification
and reimbursement of expenses out of Fund property for any shareholder held
personally liable for the obligations of a Fund solely by reason of his or her
being or having been a shareholder. The Trust Instrument also provides for the
maintenance, by or on behalf of the Trust and the Fund, of appropriate
insurance (for example, fidelity bond and errors and omissions insurance) for
the protection of the Trust and the Fund, their shareholders, trustees,
officers, employees and agents, covering possible tort and other liabilities.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which Delaware law did not
apply, inadequate insurance existed and the Fund itself was unable to meet its
obligations.

B - 26
<PAGE> 56
FINANCIAL STATEMENTS

The Statement of Assets and Liabilities of the Fund, as of a date no
later than August 20, 1996, will be included herein upon the filing of a
Post-Effective Amendment to this Registration Statement no later than August
20, 1996. The Statement of Assets and Liabilities will be included herein in
reliance upon the report of KPMG Peat Marwick LLP, independent auditors, as
experts in accounting and auditing.

B - 27
<PAGE> 57
PART C.

OTHER INFORMATION

MEYERS SHEPPARD PRIDE FUND

<TABLE>
<S> <C>
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements:
--------------------

* Statement of Assets and Liabilities

* Report of Independent Accountants

(b) Exhibits:
--------
</TABLE>

<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------ ----------------------
<S> <C> <C>

1 Certificate of Trust dated March 20, 1996, and filed by the Delaware
Secretary of State on March 25, 1996(1)

2 By-Laws adopted on March 26, 1996(1)

3 None

4 Trust Instrument dated March 26, 1996(1)

5 Investment Management Agreement dated May 9, 1996 Between the Registrant
and Meyers, Sheppard & Co., LLC(1)

6 Distribution Agreement dated May 9, 1996 between the Registrant
and Furman Selz LLC(1)

7 None

8 Custodian Agreement dated May 9, 1996 between the Registrant and Wells
Fargo Bank, N.A.(1)

9(a) Administration Agreement dated May 9, 1996 between the Registrant and
Furman Selz LLC(1)

9(b) Fund Accounting Agreement dated May 9, 1996 between the Registrant
and Furman Selz LLC(1)

9(c) Transfer Agency Agreement dated May 9, 1996 between the Registrant
and Furman Selz LLC(1)

10 Opinion and Consent of Pollet & Woodbury, a Law Corporation(1)

* 11 Consent of independent accountants

12 None
</TABLE>

C - 1
<PAGE> 58

<TABLE>
<S> <C> <C>
13 (a) Form of Subscription Letter for $100,000 Seed Capital (1)

13 (b) Form of Subscription Response Letter

14 None

15 Form of Plan of Distribution adopted by the Registrant on May 9, 1996(1)

16 None

* 17 Electronic Data Schedules

18 None

19 None
</TABLE>

* To be provided by subsequent amendment pursuant to undertaking
described in item 32(d) of this Registration Statement.

(1) Previously provided as exhibit to Pre-Effective Amendment to
Form N-1A filed by the Registrant on May 3, 1996.

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

None

ITEM 26. NUMBER OF HOLDERS OF SECURITIES.

<TABLE>
<CAPTION>
TITLE OF CLASS:
SHARES OF BENEFICIAL INTEREST NUMBER OF RECORD HOLDERS
(PAR VALUE $0.00001) AT JUNE 5, 1996
---------------------------------------- -------------------------
<S> <C>

Series 1: Meyers Sheppard Pride Fund NONE
-----------------------
</TABLE>

ITEM 27. INDEMNIFICATION.

Reference is made to Article IX of Registrant's Trust
Instrument.

Registrant, its Trustees and officers are insured against
certain expenses in connection with the defense of claims, demands, actions,
suits, or proceedings, and certain liabilities that might be imposed as a
result of such actions, suits or proceedings.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act"), may be permitted to
directors, trustees, officers and controlling persons of the Registrant and the
principal underwriter pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, 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 a director, trustee, officer, or
controlling person of the Registrant and the principal underwriter in
connection with the successful defense of any action, suite or proceeding) is
asserted against the Registrant by such director, trustee, officer or
controlling person or principal underwriter 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 Securities Act and will be governed
by the final adjudication of such issue.

C - 2
<PAGE> 59
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.

The list required by this Item 28 of the managers and officers
of Meyers, Sheppard & Co., LLC, together with information as to any other
business, profession, vocation or employment of a substantial nature engaged in
by such managers and officers during the past two years, is incorporated by
reference to Schedules A and D of Form ADV filed by Meyers, Sheppard & Co.,
LLC, pursuant to the Advisers Act (SEC File No. 801-51437).

ITEM 29. PRINCIPAL UNDERWRITERS.

(a) Furman Selz LLC, a Delaware limited liability
company, is the distributor (the "Distributor") for the shares of the
Registrant. The Distributor also serves as the principal underwriter or
placement agent for the Minerva Funds, Inc., a registered open-ended investment
company.

(b) The following are the directors and officers of the
Distributor. The principal business address of these individuals is 230 Park
Avenue, New York, New York 10169, unless otherwise noted. None of these
persons are an officer or trustee of the Fund.

<TABLE>
<S> <C>
Edmund A. Hajim Chairman & CEO
Roy L. Furman President
Bernard T. Selz Executive Vice President
Steven D. Blecher Executive Vice President/Secretary
Elizabeth Q. Solazzo Executive Vice President/Assistant Secretary
Michael C. Petrycki Executive Vice President
William Schutzer Executive Vice President
Brian P. Friedman Executive Vice President
Fred Fraenkel Executive Vice President
Michael Weisberg Executive Vice President
William P. Collins Executive Vice President
Thalia Cody Assistant Secretary
Robert J. Miller Treasurer

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.

All accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940, as amended
(the "Investment Company Act"), and the Rules thereunder will be maintained at
the offices of:

(1) Records relating to management and investment
advisement functions:

Meyers Sheppard Pride Fund
c/o Meyers Sheppard Investment Trust
9107 Wilshire Boulevard, Suite 700
Beverly Hills, California 90210

(2) Records relating to administration, fund accounting,
distribution and registrar/Transfer agency functions:

Furman Selz LLC
237 Park Avenue
New York, New York 10017

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<PAGE> 60
(3) Records relating to custodial functions:

Wells Fargo Bank, N.A.
P.O. Box 63084
San Francisco, California 94163

ITEM 31. MANAGEMENT SERVICES.

The Registrant is not a party to any management related
service contract not discussed in Part A or Part B of this Registration
Statement.

ITEM 32. UNDERTAKINGS.

(a) The Registrant undertakes to file a post-effective
amendment, using financial statements which need not be certified, within four
to six months following the effective date of this registration statement. The
financial statements included in such amendment will be as of and for the time
period ended on a date reasonably close or as soon as practicable to the date
of the filing of the amendment.

(b) The Registrant undertakes to comply with Section
16(c) of the Investment Company Act as though such provisions of the Investment
Company Act were applicable to the Registrant, except that the request referred
to in the third full paragraph thereof may only be made by shareholders who
hold in the aggregate at least 10% of the outstanding shares of the Registrant,
regardless of the net asset value of shares held by such requesting
shareholders.

(c) If the information called for by Item 5A is contained
in the latest annual report to shareholders, an undertaking to furnish each
person to whom a prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders upon request and without change.

(d) The Registrant undertakes to comply with Section
14(a)(3) of the Investment Company Act before it makes a public offering of its
securities. As part of such undertaking, the Registrant agrees as follows: (i)
the Registrant shall not issue shares of beneficial interest of the Fund to the
public or receive any of the proceeds of any subscriptions from the public
until subscriptions identical in form to the subscription agreement attached as
Exhibit 13 to this Registration Statement have been made by not more than 25
persons (the "Seed Capital Subscribers") to purchase from the Registrant shares
of beneficial interest in the Fund for an aggregate net amount which, when
added to the Fund's then net worth, will cause the Fund to have a net worth
equal to at least $100,000; (ii) in the event such aggregate net amount is not
paid to the Registrant with respect to the Fund, and the Fund does not have
$100,000 of net worth within the earlier of (1) August 20, 1996 or (2) 90 days
after the date on which this Registration Statement becomes effective, the
subscriptions of the Seed Capital Subscribers shall become null and void and
the full amount paid in by the Seed Capital Subscribers will be refunded to
such subscribers on demand without any deduction; (iii) the Registrant shall
not issue shares of beneficial interest of the Fund to the public or receive
any of the proceeds of any subscriptions from the public until the Registrant
files with the Commission a Post-Effective Amendment to this Registration
Statement containing the audited financial statements required under Item 24(a)
hereof, together with consent of independent accountants, and (iv) the
Registrant shall obtain the consent of the Seed Capital Subscribers to the
exhibits set forth in Item 24(b) as required by the Investment Company Act.

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<PAGE> 61
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, the Registrant has
duly caused this Amendment No. 2 to Registration Statement on Form N-1A to be
signed on its behalf by the undersigned, thereto duly authorized, in the City
of Beverly HIlls, State of California, on June 5, 1996.

MEYERS SHEPPARD INVESTMENT TRUST
(Registrant)

By: /s/ Shelly J. Meyers
----------------------------
Name: Shelly J. Meyers
Title: Chairman, Trustee and
President

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<PAGE> 62

Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment No. 2 to Registration Statement on Form N-1A has been
signed below by the following persons in the capacities indicated on June 5,
1996.

<TABLE>
<CAPTION>
Signatures Title
- ---------- -----
<S> <C>
By: /s/ Shelly J. Meyers Chairman, Trustee and President
------------------------------
Shelly J. Meyers

By: /s/ Leslie C. Sheppard Trustee and Executive Vice President
------------------------------
Leslie C. Sheppard

By: /s/ Gwendolyn H. Baba Trustee
-----------------------------
Gwendolyn H. Baba

By: /s/ Jay W. Gendron Trustee
-----------------------------
Jay W. Gendron

By: /s/ Robert E. Gipson Trustee
-----------------------------
Robert E. Gipson

By: /s/ Leonard Greenhalgh Trustee
-----------------------------
Leonard Greenhalgh

By: /s/ Loretta Sanchez Trustee
-----------------------------
Loretta Sanchez

By: /s/ David E. McWaine Trustee
-----------------------------
David E. McWaine

By: /s/ John J. Pileggi Vice President and Treasurer
------------------------------
John J. Pileggi

</TABLE>

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<PAGE> 63

VOLUME II

EXHIBITS FILED ELECTRONICALLY VIA EDGAR ON JUNE 5, 1996 UNDER:

- Pre-Effective Amendment No. 2 to Registration Statement under
the Securities Act of 1933 (Securities Act Registration No.
333 - 02111); and

- Pre-Effective Amendment No. 2 To Registration Statement under
the Investment Company Act of 1940 (Investment Company
Registration No. 811 - 7581)

<PAGE> 64
FILED EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------ ----------------------------------------------------------
<S> <C>

13 (b) Form of Subscription Response Letter
</TABLE>

<PAGE> 1

Meyers Sheppard Investment Trust
9107 Wilshire Boulevard, Suite 700
Beverly Hills, California 90210
Telephone Number: (310) 288-3720

[Date]

RE: CAPITAL CONTRIBUTION TO MEYERS SHEPPARD PRIDE FUND

Ladies and Gentlemen:

With respect to your investment in the Meyers Sheppard Investment
Trust, a Delaware Business Trust (the "Trust"), of __________________ shares of
beneficial interest (the "Shares") of the Meyers Sheppard Pride Fund (the
"Fund"), currently the sole series of the Trust, for the aggregate sum of
$______ (the "Purchase Price"), or $0.00001 per Share, the Trust hereby confirms
to you as follows:

The Trust will not issue shares of beneficial interest of the Fund to
the general public or receive any of the proceeds of any subscriptions from the
general public until subscriptions identical in form to yours have been made
by not more than 25 persons to purchase from the Trust shares of beneficial
interest in the Fund for an aggregate net amount which, when added to the
Fund's then net worth, will cause the Fund to have a net worth equal to at
least $100,000. It is understood that such aggregate net amount is paid to the
Trust with respect to the Fund before any subscriptions for shares of
beneficial interest in the Fund will be accepted from any persons in excess of
25.

In the event such aggregate net amount is not paid to the Trust with
respect to the Fund, and the Fund does not have $100,000 of net worth within
the earlier of (i) August 20, 1996 or (ii) 90 days after the date on which the
Registration Statement on Form N-1A filed under the Securities Act of 1933 (and
the Investment Company Act of 1940), as amended, with respect to the shares of
beneficial interest in the Fund (the "Registration Statement") becomes
effective, then your subscription shall become null and void and the full
amount paid by you will be refunded on demand without any deduction.

In the event such aggregate net amount is paid to the Trust with
respect to the Fund, and the Fund then has $100,000 of net worth by no later
than (i) August 20, 1996 or (ii) 90 days after the date on which the
Registration Statement becomes effective, then your subscription shall be in
full force and effect, and the Fund may retain all funds tendered to it by
you.

Very Truly Yours:

By:________________________
Shelly J. Meyers, Trustee