ROTHSCHILD FIVE ARROWS CURRENCY TRUST, N-1A EL, 1996-08-15

ROTHSCHILD FIVE ARROWS CURRENCY TRUST
N-1A EL, 1996-08-15

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<PAGE> 1

As Filed with the Securities and Exchange
Commission on August 15, 1996

1933 Act File No. ________
1940 Act File No. ________

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /

Pre-Effective Amendment No. / /

Post-Effective Amendment No. / /
and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /

Amendment No. / /
(Check appropriate box or boxes.)

ROTHSCHILD FIVE ARROWS CURRENCY TRUST
(Exact Name of Registrant)

3435 Stelzer Road, Columbus, Ohio 43219
(Address of Principal Executive Offices)

(614) 470-8000
(Registrant's Telephone Number)

George O. Martinez
Rothschild Five Arrows Currency Trust
3435 Stelzer Road
Columbus, Ohio 43219
(Name and Address of Agent for Service of Process)

With a copy to:
Geoffrey R.T. Kenyon, Esq.
Goodwin, Procter & Hoar LLP
Exchange Place, Boston, MA 02109

Approximate date of proposed public offering:

It is proposed that this filing will become effective under Rule 485
(check appropriate box):

/ / Immediately upon filing pursuant to paragraph (b)

/ / On ___, pursuant to paragraph (b)

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

/ / On _____ pursuant to paragraph (a)(1)

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

/ / On _____ pursuant to paragraph (a)(2).

If appropriate check the following box:

<PAGE> 2

/ / This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
- --------------------------------------------------------------------------------
The Registrant, pursuant to Rule 24f-2 promulgated under the Investment
Company Act of 1940, hereby elects to register an indefinite number of shares of
beneficial interest, par value $.001 per share, of the U.S. Dollar Fund, the
Pound Sterling Fund, the Deutschemark Fund and the Canadian Dollar Fund series
of the Registrant.

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 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.

(ii)

<PAGE> 3

CROSS REFERENCE SHEET

PURSUANT TO RULE 481(A)

Form N-1A Item No. Caption or Location
Part A in Prospectuses
------ ---------------

1. Cover Page Same

2. Synopsis Summary; Fund and Allocated Fees and
Expenses

3. Condensed Financial n/a
Information

4. General Description of Description of the Trust and
Registrant Portfolio Trust; Investment
Objectives; Investment Policies
and Restrictions; Special
Considerations and Risk Factors;
Information Concerning the Master-
Feeder Fund Structure.

5. Management of the Fund Management; General Information

5A. Management's Discussion of Fund [To be included in Annual Reports to
Performance Shareholders]

6. Capital Stock and Other General Information; Dividends and
Securities Distributions; Taxation; How to Buy
Shares

7. Purchase of Securities Being How to Buy Shares
Offered

8. Redemption or Repurchase How to Redeem Shares

9. Pending Legal Proceedings Not Applicable

Caption or Location in
Form N-1A Item No. Statement of
Part B Additional Information
------ ----------------------

10. Cover Page Cover Page

11. Table of Contents Table of Contents

12. General Information and History Information About the Trust and
Portfolio Trust.

(i)

<PAGE> 4

Caption or Location in
Form N-1A Item No. Statement of
Part B Additional Information
------ ----------------------

13. Investment Objectives and Additional Investment Policies and
Policies Restrictions; Money Market Instruments
Additional Information Concerning
Certain Investment Techniques for all
Portfolios

14. Management of the Fund Management of the Trust and Portfolio
Trust; Compensation of Trustees and
Officers

15. Control Persons and Principal Management of the Trust and
Holders of Securities Portfolio Trust

16. Investment Advisory and Other Investment Advisory Agreement and
Services Distribution and Administration
Agreements; Custodian, Transfer and
Dividend Distributing Agent, Counsel
and Independent Auditors.

17. Brokerage Allocation and Portfolio Transactions
Other Practices

18. Capital Stock and Other Information About the Trust and Port-
Securities folio Trust

19. Purchase, Redemption and Pricing Redemption of Shares; Calculation of
of Securities Being Offered Net Asset Value

20. Tax Status n/a

21. Underwriters Investment Advisory Agreement and
Distribution and Administration
Agreements.

22. Calculations of Performance Data Performance Information

23. Financial Statements Financial Statements and Independent
Accountants

(ii)

<PAGE> 5

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

ROTHSCHILD FIVE ARROWS CURRENCY TRUST

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

FIVE ARROWS SHARES

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

PROSPECTUS

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

<PAGE> 6

Prospectus

________________, 1996

ROTHSCHILD FIVE ARROWS CURRENCY TRUST

INVESTMENT ADVISER:
Rothschild International Asset Management Limited
Five Arrows House, St. Swithin's Lane
London EC4N 8NR United Kingdom

DISTRIBUTOR:
Rothschild Distributors, Inc.
3435 Stelzer Road
Columbus, OH 43219-3035

ADMINISTRATOR:
BISYS Fund Services Limited Partnership
3435 Stelzer Road
Columbus, OH 43219-3035

TRANSFER AGENT:
BISYS Fund Services, Inc.
100 First Avenue, Suite 300
Pittsburgh, PA 15222

CUSTODIAN:
The Chase Manhattan Bank
4 Chase Metrotech Center
Brooklyn, NY 11245

AUDITORS:
Coopers & Lybrand L.L.P.
1301 Avenue of the Americas
New York, NY 10019-6013

COUNSEL:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109-2881

<PAGE> 7

Rothschild Five Arrows Currency Trust (the "Trust") is an open-end
management investment company designed to offer investors a selection of four
separate funds (the "Funds"): the U.S. Dollar Fund, the Pound Sterling Fund, the
Deutschemark Fund, and the Canadian Dollar Fund.

Each Fund seeks to maintain a high level of liquidity, to preserve
capital and stability of principal expressed in the Fund's designated currency
("Designated Currency") and, consistent with those objectives, to earn current
income. Unlike other mutual funds which acquire and manage their own portfolios
of securities, each Fund seeks to achieve its investment objective by investing
all of its investable assets (the "Investable Assets") in a portfolio which is a
series of The International Currency Fund (the "Portfolio Trust") which invests
in high quality, short-term instruments denominated in the Designated Currency
of the relevant Fund. See "Information Concerning the Master-Feeder Structure"
on page ___. The Portfolio Trust is also an open-end management investment
company which currently consists of four separate portfolios (the "Portfolios"):
the U.S. Dollar Portfolio, the Pound Sterling Portfolio, the Deutschemark
Portfolio and the Canadian Dollar Portfolio.

The Trust seeks to maintain a constant net asset value expressed in the
Designated Currency for each Fund. Accordingly, the Trust invests only in
securities with short remaining maturities and generally values its securities
at their amortized cost. The U.S. Dollar Fund is a "money market fund" under
regulations adopted by the Securities and Exchange Commission (the "SEC"). None
of the other Funds is a "money market fund" under those regulations. The net
asset value of a Fund's shares, when expressed in a currency other than the
Fund's Designated Currency, will fluctuate, primarily in response to changes in
currency exchange rates between the Fund's Designated Currency and other
currencies, including other Designated Currencies.

The Funds are designed primarily for use as a means of investing
short-term cash reserves in the Funds' Designated Currencies. Investors may also
consider purchasing Fund shares for a number of reasons including satisfying
settlement obligations or delivering a Fund's shares as collateral for a
transactional obligation in a Fund's Designated Currency. Each Fund offers two
classes of shares. The shares offered by this Prospectus are the Five Arrows
class, which are available for direct purchase in initial aggregate amounts of
$500,000 or more. In addition, the Fund offers by separate Prospectus the Five
Arrows Service shares, which are available for purchase through certain
broker-dealers and other service organizations.

AN INVESTMENT IN THE TRUST IS NOT A BANK DEPOSIT OR AN OBLIGATION OF
ROTHSCHILD INTERNATIONAL ASSET MANAGEMENT LIMITED OR ANY OF ITS AFFILIATES AND
IS NEITHER GUARANTEED NOR INSURED BY THE UNITED STATES GOVERNMENT, THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE SYSTEM OR ANY OTHER AGENCY OF
THE UNITED STATES GOVERNMENT. THERE CAN BE NO ASSURANCE THAT ANY FUND WILL BE
ABLE TO MAINTAIN A CONSTANT NET ASSET VALUE PER SHARE. INVESTMENT IN THE FUNDS
INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. IN
ADDITION, THE DIVIDENDS PAID BY A FUND WILL GO UP AND DOWN.

This Prospectus sets forth concisely information about the Five Arrows
shares of the Trust and each Fund that an investor should know before investing.
It should be read and retained for future reference.

A Statement of Additional Information dated ___________, 1996, and as it
may be further amended from time to time, which provides further discussion of
certain items in this Prospectus and other matters, has been filed with the SEC
and is incorporated herein by reference. For a free copy, call [1-800-___-____]
or write to the Trust at the address for the Trust's Distributor listed on page
__.

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.

<PAGE> 8

TABLE OF CONTENTS

PAGE
----

FUND (AND ALLOCATED PORTFOLIO) FEES AND EXPENSES ................2

SUMMARY .........................................................3

DESCRIPTION OF THE TRUST AND PORTFOLIO TRUST.....................4

INVESTMENT OBJECTIVES............................................4

INVESTMENT POLICIES AND RESTRICTIONS.............................5
U.S. DOLLAR PORTFOLIO....................................5
POUND STERLING PORTFOLIO.................................5
DEUTSCHEMARK PORTFOLIO...................................6
CANADIAN DOLLAR PORTFOLIO................................7
ALL PORTFOLIOS...........................................7
FUNDAMENTAL POLICIES.....................................8

SPECIAL INVESTMENT CONSIDERATIONS AND RISK FACTORS...............9

INFORMATION CONCERNING THE MASTER-FEEDER FUND STRUCTURE.........10

MANAGEMENT......................................................12

CALCULATION OF NET ASSET VALUE..................................14

HOW TO BUY FIVE ARROWS SHARES...................................15

HOW TO REDEEM FIVE ARROWS SHARES................................17

HOW TO CHANGE FUNDS.............................................19

TAXATION........................................................19

DIVIDENDS AND DISTRIBUTIONS.....................................21

PERFORMANCE.....................................................22

GENERAL INFORMATION.............................................23

<PAGE> 9

FUND (AND ALLOCATED PORTFOLIO) FEES AND EXPENSES

- --------------------------------------------------------------------------------
Five Arrows shares are offered to shareholders on a no-load basis
without any commissions, distribution ("12b-1 plan") or service charges.

All Funds

SHAREHOLDER TRANSACTION EXPENSES
- --------------------------------

Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Redemption fees None
Exchange fees None

ANNUAL OPERATING EXPENSES (AS A PERCENTAGE
- -------------------------------------------
OF AVERAGE NET ASSETS AND NET OF REIMBURSEMENTS)
- ------------------------------------------------
<TABLE>
<CAPTION>

TOTAL FUND
ADVISORY FEES OTHER EXPENSES EXPENSES
------------- -------------- --------
<S> <C> <C> <C>
U.S. Dollar .20% .05% .25%
Pound Sterling .20% .15% .35%
Deutschemark .20% .15% .35%
Canadian Dollar .20% .15% .35%
</TABLE>

EXPENSES PER 1,000 SHARE INVESTMENT
<TABLE>
<CAPTION>
1 YEAR 3 YEAR
------ ------
<S> <C> <C>
U.S. Dollar $3 $8
Pound Sterling (pound)4 (pound)11
Deutschemark DM4 DM11
Canadian Dollar C$4 C$11
</TABLE>

Assuming a hypothetical investment of U.S. $1,000, (pound)1,000,
DM1,000, or C$1,000 with a 5% annual return and redemption at the end of each
time period, an investor in the Trust will have paid transaction and operating
expenses over the time period as indicated above.
- --------------------------------------------------------------------------------

The above table of fees and expenses is provided to assist investors in
understanding the various costs and expenses which may be borne directly or
indirectly by investors in the Funds. The Trust does not charge a sales load in
connection with the purchase or redemption of its shares. The percentages shown
above are based on an annualized estimate of the expenses to be incurred during
the current fiscal year, after expense reimbursements, and should not be
considered a representation of future costs and expenses or performance. Actual
costs and expenses or performance in future periods may be more or less than
those shown above. For the purpose of the example, assume reinvestment of all
dividends and distributions. The Investment Adviser has voluntarily agreed to
reimburse such portion of its advisory fee as is necessary to cause the
annualized total expenses of each class of a Fund not to exceed a specified
percentage of such class' average daily net asset value (.25% in the case of the
Five Arrows Class of the U.S. Dollar Fund and .35% in the case of the Five
Arrows Class of each other Fund). This undertaking shall remain in effect for
the fiscal period ending October 31, 1997, and thereafter in the discretion of
the Investment Adviser. The Investment Adviser has reserved the right to
terminate or revise these limitations with respect to any period after October
31, 1997. The table does not reflect charges for optional services, such as the
fee for remittance of redemption proceeds by wire. For a more complete
discussion of the fees connected with an investment in the Trust and the
services provided to the Trust, see "Management", "How to Buy Five Arrows
Shares" and "How to Redeem Five Arrows Shares."

The Funds invest all of their Investable Assets in the Portfolios. The
Trustees of the Trust believe that, over time, the aggregate per share expenses
of each Fund and its corresponding Portfolio should be approximately equal to,
or less than, the per share expenses the Fund would incur if the Fund were
instead to retain the services of an investment adviser and its assets were
invested directly in the type of securities being held by the Portfolios.

<PAGE> 10

SUMMARY

The investment objectives of each Fund are to seek to maintain a high
level of liquidity, to preserve capital and stability of principal expressed in
the Fund's Designated Currency and, consistent with those objectives, to earn
current income. A Fund's investment objectives are fundamental and may not be
changed without the approval of its shareholders. Each Fund will seek to achieve
its investment objectives by investing all of its Investable Assets in a
Portfolio which has the same investment objectives as such Fund. There can be no
assurance that the investment objectives of either the Funds or the Portfolios
will be achieved. (See "Investment Objectives" and "Investment Policies and
Restrictions.") An investment in shares of any of the Funds involves certain
risks, as discussed below, and may not be appropriate for all investors.

Rothschild International Asset Management Limited (the "Investment
Adviser") manages the Portfolio Trust's Portfolios and receives an advisory fee
from each Portfolio calculated daily and payable monthly at an annual rate of up
to .20% of average daily net assets of such Portfolio.

BISYS Fund Services Limited Partnership (the "Administrator") acts as
the administrator of the Trust and Portfolio Trust. Its affiliates, Rothschild
Distributors, Inc. (the "Distributor") and BISYS Fund Services, Inc. (the
"Transfer Agent"), act as the distributor and transfer/dividend disbursing agent
of the Trust, respectively, and The Chase Manhattan Bank acts as custodian (the
"Custodian") of the Trust and the Portfolio Trust. See "Management."

The Trust and Portfolio Trust bear all operating costs not agreed to be
borne by the Investment Adviser, the Distributor, the Administrator, the
Transfer Agent or the Custodian including, without limitation, legal and
auditing fees and expenses, expenses of investor reports to be provided to
existing shareholders; registration and reporting fees and expenses; and
Trustees' fees and expenses. The Investment Adviser has voluntarily agreed to
reimburse such portion of its advisory fee as is necessary to cause the
annualized total expenses of each class of a Fund not to exceed a specified
percentage of such class' average daily net asset value (.25% in the case of the
Five Arrows Class of the U.S. Dollar Fund and .35% in the case of the Five
Arrows Class of each other Fund). This undertaking shall remain in effect for
the fiscal period ending October 31, 1997, and thereafter in the discretion of
the Investment Adviser. The Investment Adviser has reserved the right to
terminate or revise these limitations at any time after October 31, 1997.

Five Arrows shares will be issued at the net asset value next determined
after receipt by the Trust of an order in proper form and acceptance of that
order by the Trust. The Trust reserves the right to take appropriate action in
the event that Disbursable Funds (as defined below) for the purchase price for
the shares being issued are not received on a timely basis. Disbursable Funds
may only be received by the Trust during the operating times for the wire
transmission systems designated for use in transmitting money to the Funds. See
"How to Buy Five Arrows Shares."

The value of each Fund's shares expressed in its Designated Currency is
expected to remain constant, although no assurances can be given that those per
share values will be maintained. Shares of a Fund may be redeemed by the
shareholder from the Trust at their next-determined net asset value. Each Fund
is open for business on any day on which the New York Stock Exchange (the
"Exchange") is open for trading or banks in New York City are open for business
(a "Trust Business Day") from 7:00 a.m. to 5:00 p.m. U.S. Eastern Time ("Trust
Hours of Operation"). Thus, the Trust will be open for business every day except
for Saturdays, Sundays and holidays which are observed by both the Exchange and
New York City banks (scheduled holidays

<PAGE> 11

for 1996 are New Year's Day, President's Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day) The value of the investments held
by each Fund is determined in its Designated Currency once every 24 hours during
Trust Hours of Operation. See "Calculation of Net Asset Value" and "How to
Redeem Five Arrows Shares."

Dividends of each Fund's net investment income are declared once a day
and paid monthly. Net capital gains, if any, realized by a Fund will be
distributed at least annually. Dividends paid by a Fund will be automatically
reinvested in additional shares of the Fund. See "Dividends and Distributions"
and "Taxation."

DESCRIPTION OF THE TRUST AND PORTFOLIO TRUST

The Trust is a newly-formed open-end management investment company,
registered under the 1940 Act. Under the terms of the Agreement and Declaration
of Trust establishing the Trust, which is governed by the laws of Delaware, the
Trustees of the Trust are ultimately responsible for the management of the
Funds' business and affairs. The Trust is currently authorized to offer four
individual Funds, each of which represents a separate series of the Trust's
shares of beneficial interest. The Trust's Board of Trustees is empowered to
establish additional Funds at any time without shareholder approval. The
Trustees have authorized shares of the Fund to be issued in two classes: Five
Arrows and Five Arrows Service. Because expenses will vary between the classes,
performance will vary with respect to each class. Except for differences related
to such differential expenses, each share of a Fund has equal dividend,
redemption and liquidation rights with other shares of such Fund. Each share is
fully paid and nonassessable.

Each Portfolio is a newly-formed separate investment series of the
Portfolio Trust, a newly-formed business trust organized under the laws of the
State of Delaware, and intends to be treated as a partnership for federal tax
purposes. Under the terms of the Portfolio Trust's Declaration of Trust, the
affairs of the Portfolio are managed under the supervision of the Trustees of
the Portfolio Trust.

The net asset value of a Fund's shares, when expressed in any currency
other than the Fund's Designated Currency, will fluctuate in response to changes
in the exchange rates between the Fund's Designated Currency and other
currencies, including the Designated Currencies of other Funds.

INVESTMENT OBJECTIVES

The investment objectives of each Fund are to seek to maintain a high
level of liquidity, preserve capital and stability of principal expressed in the
Fund's Designated Currency and, consistent with those objectives, to earn
current income. A Fund's investment objectives are fundamental and may not be
changed without the approval of its shareholders.

Each Fund will seek to achieve its investment objectives by investing
all of its Investable Assets in a Portfolio which has the same investment
objectives as such Fund. The investment objectives of the Portfolios are not
fundamental and may be changed upon notice to, but without the approval of, the
Portfolios' investors. There can be no assurance that the investment objectives
of either the Funds or the Portfolios will be achieved.

Since the investment characteristics of the Funds will correspond
directly to those of the Portfolio, the following is a discussion of the various
investments and investment policies of the Portfolios. Except as otherwise
provided below, the Funds' investment policies are not "fundamental policies"
within the meaning of the 1940 Act and may, therefore, be changed by the Trust's
Board of Trustees without a shareholder vote.

<PAGE> 12

INVESTMENT POLICIES AND RESTRICTIONS

U.S. DOLLAR PORTFOLIO

The U.S. Dollar Portfolio's investment objective is to seek to maintain
a high level of liquidity, to preserve capital and stability of principal
expressed in U.S. Dollars and, consistent with those objectives, to earn current
income. The U.S. Dollar Portfolio will invest in securities issued or guaranteed
as to principal and interest by the U.S. Government or its agencies or
instrumentalities or by foreign governments or Supranational Organizations (such
as the World Bank, the Inter-American Development Bank, the Asian Development
Bank and the European Bank for Reconstruction and Development) as well as
high-quality, short-term money market instruments such as bank certificates of
deposit, bankers' acceptances and such short-term corporate debt securities as
commercial paper and master demand notes.

The U.S. Dollar Portfolio invests only in U.S. dollar-denominated high
quality securities as described in this paragraph. All of the U.S. Dollar
Portfolio's assets will consist of government securities and "first tier"
eligible securities as defined in Rule 2a-7 under the 1940 Act, which have been
(i) rated by at least two United States nationally recognized statistical rating
organizations ("NRSRO"s), such as Standard & Poor's Corporation or Moody's
Investors Service, Inc., in the highest rating category for short-term
obligations (or so rated by one such organization if it alone has rated the
security), or (ii) issued by an issuer with comparable short-term obligations
that are rated in the highest rating category. See the Statement of Additional
Information.

All securities in which the U.S. Dollar Portfolio invests have remaining
maturities of thirteen months or less at the date of acquisition. The U.S.
Dollar Portfolio also maintains a dollar-weighted average portfolio maturity of
90 days or less. The U.S. Dollar Portfolio follows these policies in seeking to
maintain a constant net asset value of $1.00 per share, although there is no
assurance it can do so on a continuing basis.

The U.S. Dollar Portfolio may invest in U.S. dollar-denominated high
quality corporate debt securities such as commercial paper and bonds and
long-term unsecured debentures with remaining maturities of thirteen months or
less. These investments may include, for example, obligations issued by foreign
corporations and foreign counterparts of U.S. corporations, Eurodollar bonds
(which are U.S. dollar-denominated obligations of foreign issuers), and Yankee
bonds (which are U.S. dollar-denominated bonds issued by foreign issuers in the
U.S.). Under normal market conditions, the U.S. Dollar Portfolio will have more
than 25% of its total assets invested in the obligations of issuers in the
banking industry. See "Special Investment Considerations and Risk Factors --
Concentration in Obligations of Qualifying Banks." For further information
concerning debt securities ratings and permissible money market investments of
the U.S. Dollar Portfolio, see the Statement of Additional Information.

Securities issued or guaranteed as to principal and interest by the U.S.
Government or its agencies or instrumentalities in which the U.S. Dollar
Portfolio may invest include direct obligations of the U.S. Treasury, including
bills, bonds and notes; and obligations issued or guaranteed as to principal and
interest by U.S. Government agencies or instrumentalities and supported by any
of (i) the full faith and credit of the U.S. Treasury (e.g., Government National
Mortgage Association participation certificates); (ii) the right of the issuer
to borrow a limited amount from the U.S. Treasury (e.g., securities of the
Farmers Home Administration); (iii) the discretionary authority of the U.S.
Government to purchase certain obligations of the agency or instrumentality
(e.g., securities of the Federal National Mortgage Association); or (iv) the
credit of the agency or instrumentality (e.g., securities of a Federal Home Loan
Bank).

POUND STERLING PORTFOLIO

The Pound Sterling Portfolio's investment objective is to seek to
maintain a high level of liquidity, to preserve capital and stability of
principal expressed in Pounds Sterling and, consistent with those objectives,

<PAGE> 13

to earn current income. The Pound Sterling Portfolio will invest in securities
issued or guaranteed as to principal and interest by the United Kingdom ("U.K.")
Government, local authorities, city corporations and county councils or their
agencies or by non-U.K. governments or Supranational Organizations as well as
high-quality, short-term money market instruments such as bank certificates of
deposit, bankers' acceptances and such short-term corporate debt securities as
commercial paper and master demand notes.

The Pound Sterling Portfolio invests only in Pound Sterling-denominated
high quality securities as described in this paragraph. The Pound Sterling
Portfolio assets will consist of government securities and other securities,
which have been (i) rated by at least two NRSROs in the highest rating category
for short-term obligations (or so rated by one such organization if it alone has
rated the security), or (ii) issued by an issuer with comparable short-term
obligations that are rated in the highest rating category. See the Statement of
Additional Information.

All securities in which the Pound Sterling Portfolio invests have
remaining maturities of 60 days or less at the date of acquisition. The Pound
Sterling Portfolio follows these policies in seeking to maintain a constant net
asset value of (pound)1.00 per share, although there is no assurance it can do
so on a continuing basis.

The Pound Sterling Portfolio may invest in Pound Sterling-denominated
high quality corporate debt securities such as commercial paper and bonds and
long-term unsecured debentures with remaining maturities of 60 days or less.
Under normal market conditions, the Pound Sterling Portfolio will have more than
25% of its total assets invested in the obligations of issuers in the banking
industry. See "Special Investment Considerations and Risk Factors --
Concentration in Obligations of Qualifying Banks."

DEUTSCHEMARK PORTFOLIO

The Deutschemark Portfolio's investment objective is to seek to maintain
a high level of liquidity, to preserve capital and stability of principal
expressed in Deutschemarks and, consistent with those objectives, to earn
current income. The Deutschemark Portfolio will invest in securities issued or
guaranteed as to principal and interest by the German Government, by its
sub-divisions or their agencies or by non-German governments or Supranational
Organizations, as well as high-quality, short-term money market instruments such
as bank certificates of deposit, and such short-term corporate debt securities
as commercial paper and master demand notes.

The Deutschemark Portfolio invests only in Deutschemark-denominated high
quality securities as described in this paragraph. The Deutschemark Portfolio's
assets will consist of government securities and other securities, which have
been (i) rated by at least two NRSROs in the highest rating category for
short-term obligations (or so rated by one such organization if it alone has
rated the security), or (ii) issued by an issuer with comparable short-term
obligations that are rated in the highest rating category. See the Statement of
Additional Information.

All securities in which the Deutschemark Portfolio invests have
remaining maturities of 60 days or less at the date of acquisition. The
Deutschemark Portfolio follows these policies in seeking to maintain a constant
net asset value of DM1.00 per share, although there is no assurance it can do so
on a continuing basis.

The Deutschemark Portfolio may invest in Deutschemark-denominated high
quality corporate debt securities such as commercial paper and bonds and
long-term unsecured debentures with remaining maturities of 60 days or less.
Under normal market conditions, the Deutschemark Portfolio will have more than
25% of its total assets invested in the obligations of issuers in the banking
industry. See "Special Investment Considerations and Risk Factors --
Concentration in Obligations of Qualifying Banks."

<PAGE> 14

CANADIAN DOLLAR PORTFOLIO

The Canadian Dollar Portfolio's investment objective is to seek to
maintain a high level of liquidity, to preserve capital and stability of
principal expressed in Canadian Dollars and, consistent with those objectives,
to earn current income. The Canadian Dollar Portfolio will invest in securities
issued or guaranteed as to principal and interest by the Canadian Government,
the Provinces of Canada, or their agencies or by non-Canadian governments or
Supranational Organizations as well as high-quality, short-term money market
instruments such as bank certificates of deposit, and such short-term corporate
debt securities as commercial paper and master demand notes.

The Canadian Dollar Portfolio invests only in Canadian
Dollar-denominated high-quality securities as described in this paragraph. The
Canadian Dollar Portfolio's assets will consist of government securities and
other securities which have been (i) rated by at least two NRSROs in the highest
rating category for short-term obligations (or so rated by one such organization
if it alone has rated the security), or (ii) issued by an issuer with comparable
short-term obligations that are rated in the highest rating category. See the
Statement of Additional Information.

All securities in which the Canadian Dollar Portfolio invests have
remaining maturities of 60 days or less at the date of acquisition. The Canadian
Dollar Portfolio follows these policies in seeking to maintain a constant net
asset value of C$1.00 per share, although there is no assurance it can do so on
a continuing basis.

The Canadian Dollar Portfolio may invest in Canadian Dollar-denominated
high quality corporate debt securities such as commercial paper and bonds and
long-term unsecured debentures with remaining maturities of 60 days or less.
Under normal market conditions, the Canadian Dollar Portfolio will have more
than 25% of its total assets invested in the obligations of issuers in the
banking industry. See "Special Investment Considerations and Risk Factors --
Concentration in Obligations of Qualifying Banks."

ALL PORTFOLIOS

In seeking to obtain its investment objectives, each Portfolio may
invest in the types of securities described below.

VARIABLE AND FLOATING RATE NOTES
--------------------------------

Each Portfolio may purchase variable and floating rate instruments.
These instruments may include variable amount master demand notes, which are
instruments under which the indebtedness, as well as the interest rate, varies.
In addition, these securities must be rated in the highest short-term rating
category by an NRSRO. Unless guaranteed by the U.S. Government or one of its
agencies or instrumentalities, variable or floating rate instruments purchased
by the U.S. Dollar Portfolio must permit such Portfolio to demand payment of the
instrument's principal at least once every thirteen months. Variable or floating
rate instruments purchased by each of the other Portfolios must permit such
Portfolio to demand payment of the instrument's principal at least once every 60
days. Because of the absence of a market in which to resell a variable or
floating rate instrument, a Portfolio might have trouble selling an instrument
should the issuer default or during periods when a Portfolio is not permitted by
agreement to demand payment of the instrument, and for this or other reasons a
loss could occur with respect to the instrument.

REPURCHASE AGREEMENTS
---------------------

Each Portfolio may invest in repurchase agreements. A repurchase
agreement arises when an investor purchases a security and simultaneously agrees
to resell it to the counterparty on the repurchase agreement at an agreed-upon
future date, normally one day or a few days later. The resale price is greater
than the purchase

<PAGE> 15

price, reflecting an agreed-upon rate which is effective for the period of time
the investor's money is invested in the security and which is not related to the
coupon rate on the purchased security. By providing a flexible investment
vehicle, repurchase agreements permit the Portfolios to remain fully invested
pending the purchase of appropriate longer-term investments.

The Portfolios will enter into repurchase agreements only with financial
institutions rated by an NRSRO in the highest rating category for short-term
obligations deemed to be creditworthy by the Investment Adviser, pursuant to
guidelines established by the Portfolio Trust's Board of Trustees. During the
term of any repurchase agreement, the Investment Adviser will monitor the
creditworthiness of the seller, and the seller must maintain the value of the
securities subject to the agreement in an amount that is greater than the
repurchase price. Default or bankruptcy of the seller would, however, expose the
Portfolios to possible loss because of adverse market action or delays in
connection with the disposition of the underlying obligations. Because of the
seller's repurchase obligations, the securities subject to repurchase agreements
do not have maturity limitations.

WHEN-ISSUED SECURITIES
- ----------------------

Each Portfolio may purchase when-issued debt securities, which are
traded on a price or yield basis prior to actual issuance. Such purchases will
be made only to achieve the relevant Portfolio's investment objective and not
for leverage. The when-issued trading period generally lasts only from a few
days up to a month or more; during this period interest will not accrue. Such
transactions may involve a risk of loss if the value of the securities falls
below the price committed to prior to actual issuance. The Custodian will
establish a segregated account for a Portfolio when it purchases securities on a
when-issued basis consisting of cash or liquid securities equal to the amount of
the when-issued commitments.

ILLIQUID SECURITIES
- -------------------

Each Portfolio may invest up to 10% of its net assets in illiquid
securities (i.e. securities which a Portfolio could not reasonably expect to
sell within seven days at approximately the price at which they are valued).
Under the supervision of the Portfolio Trust's Board of Trustees the Investment
Adviser will determine the liquidity of each investment using various factors
such as (1) the frequency of trades and quotations, (2) the number of dealers
and prospective purchasers in the marketplace, (3) dealer undertakings to make a
market, (4) the nature of the security (including any demand or tender features)
and (5) the likelihood of continued marketability and credit quality of the
issuer. If they have a remaining maturity of more than seven days, time deposits
and repurchase agreements will be considered to be illiquid securities.

FUNDAMENTAL POLICIES

Each of the Funds and the Portfolios have adopted certain fundamental
policies which may not be changed without the approval of that Fund's
shareholders or that Portfolios' investors, as the case may be.

The Funds have the same investment restrictions as the Portfolios,
except that each Fund may invest all of its Investable Assets in an open-end
management investment company with substantially the same investment objectives
as that Fund. Therefore, references below to the Portfolios' investment
restrictions also include the Funds' investment restrictions. In addition, as a
fundamental policy, no Portfolio may: (i) borrow money, except from the
Portfolio Trust's Custodian or from other banks in connection with redemptions
or for temporary or emergency purposes (borrowings by a Portfolio may not exceed
20% of that Portfolio's net assets computed immediately after the borrowing; no
additional investments may be made while any borrowings exceed 5% of the
Portfolio's total assets), (ii) pledge, hypothecate, or mortgage any of the
Portfolio's assets other than in connection with permitted borrowings or (iii)
make any investment which would cause more than 25% of the value of such
Portfolio's total assets to be invested in securities of nongovernmental issuers
principally engaged in any one industry, except that under normal market
conditions each Portfolio will invest

<PAGE> 16

more than 25% of its total assets in obligations of Qualifying Banks (as defined
herein) and further provided that in the event that the diversification
requirements of the United States Internal Revenue Code of 1986, as amended,
(the "Internal Revenue Code") are revised so as to permit one or more of the
Portfolios to invest more than 25% of its total assets in government obligations
of the country that issues its corresponding Designated Currency, then each such
Portfolio will under normal market conditions invest more than 25% of its total
assets in such obligations. Additional fundamental policies of the Portfolios
are set forth in the Statement of Additional Information.

If a percentage restriction, including one that is a fundamental policy,
is adhered to at the time of investment, a later increase or decrease in
percentage resulting from a change in values or assets will not constitute a
violation of that restriction.

SPECIAL INVESTMENT CONSIDERATIONS AND RISK FACTORS

POSSIBLE CHANGES IN NET ASSET VALUE AND YIELD
- ---------------------------------------------

Each Portfolio seeks to maintain a constant net asset value and
generally values its investments at amortized cost. However, the value of each
Portfolio may be affected by changes in interest rates and the credit standing
of issuers of the Portfolios' investments. The value of the investments held by
each of the Portfolios in which the Funds invest generally will vary inversely
with changes in prevailing interest rates, although this variance is expected to
be minimal due to the short maturities of the instruments held by the
Portfolios.

Interest rates paid on instruments denominated in a given Designated
Currency may be higher or lower than those paid on instruments denominated in
other Designated Currencies. Investors should recognize that in periods of
declining short-term interest rates the inflow of net new money to a Portfolio
from the continuous sale of its shares will likely be invested in portfolio
instruments producing lower yields than the balance of such Portfolio's
portfolio, thereby reducing the current yield of the Portfolio. In the periods
of rising interest rates, the opposite can be true. The securities in which the
Portfolios invest may not produce as high a level of income as could be obtained
from securities with longer maturities or those having a lesser degree of
safety.

INVESTMENTS IN A SINGLE ISSUER
- ------------------------------

Each Portfolio other than the U.S. Dollar Portfolio is non-diversified
under the 1940 Act. These Portfolios intend to comply, however, with the
diversification requirements applicable to regulated investment companies under
the Internal Revenue Code. Currently, those requirements provide that, as of the
last day of each fiscal quarter, each Portfolio's investments in the securities
of any one issuer must be limited to 25% of its total assets, provided that with
respect to at least 50% of its total assets, a Portfolio may not have invested
more than (a) 5% of its total assets in the securities of any one issuer or (b)
10% of the outstanding voting securities of any one issuer. To the extent a
Portfolio is not diversified under the 1940 Act, it may be more susceptible than
a fully diversified Portfolio to adverse developments affecting a single issuer.

In the event of any change in the diversification requirements of the
Internal Revenue Code that would permit a Portfolio to invest more than 25% of
its total assets in government obligations of the country that issues such
Portfolio's Designated Currency, the Portfolio Trust intends to adopt a policy
with respect to such Portfolio that will permit it to invest in securities that
are direct obligations of or guaranteed by such country to the maximum extent
permitted by the Internal Revenue Code. Accordingly, in the future, each
Portfolio could invest up to 100% of its total assets in securities that are
direct obligations of or guaranteed by a single country.

In addition to the foregoing, each of the Portfolios has adopted a
non-fundamental investment restriction which prevents it from investing (i) more
than 5% of the value of its total assets in the securities of any one

<PAGE> 17

issuer (other than repurchase agreements and securities issued by a sovereign
government, its agencies and instrumentalities), (ii) more than 25% of the value
of its total assets in repurchase agreements with one counterparty or (iii) more
than 25% of the value of its total assets in securities issued by any sovereign
government, its agencies and instrumentalities (other than the federal
government of the United States). Securities held solely as collateral for
outstanding repurchase agreements shall be excluded for purposes of computing
compliance with restriction (iii). These restrictions may be eliminated or
modified at any time by the Trustees of the Portfolio Trust without a
shareholder vote.

CONCENTRATION IN OBLIGATIONS OF QUALIFYING BANKS
- ------------------------------------------------

Under normal market conditions, each Portfolio will have more than 25%
of its total assets invested in obligations of Qualifying Banks. For the
purposes of this Prospectus, Qualifying Banks are defined as U.S. banks
(including savings banks or savings and loan associations) that are members of
the Federal Deposit Insurance Corporation ("FDIC") and "foreign banks," as
defined in Rule 3a-6 under the 1940 Act, provided that any such institution has,
at the date of investment, capital, surplus and undivided profits (as of the
date of its most recently published financial statements) in excess of
U.S.$100,000,000 or the non-U.S. dollar equivalent, as the case may be. This
concentration may result in increased exposure to risks pertaining to the
banking industry. These risks include: a sustained increase in interest rates,
which can adversely affect the availability and cost of funds for a bank's
lending activities; exposure to credit losses during times of economic decline;
concentration of loan portfolios in certain industries; national and local
regulatory developments; and competition within the banking industry as well as
from other financial institutions. In addition, investments in banks located in
foreign countries are subject to risks resulting from the combination in those
banks of banking and securities underwriting and similar activities.

In the event the Portfolio Trust adopts policies in response to a change
in the diversification requirements of the Internal Revenue Code as described
above, the newly adopted policies could cause a Portfolio to cease to have any
of its assets invested in obligations of Qualifying Banks.

INVESTMENTS IN FOREIGN SECURITIES
- ---------------------------------

Investing in securities issued by entities domiciled in a country other
than an investor's country of residence or denominated in a currency other than
the currency of the investor's country of residence may involve considerations
and possible risks and opportunities not typically encountered by the investor
in making investments in its country of residence and in securities denominated
in that country's currency. These considerations include favorable or
unfavorable changes in interest rates, currency exchange rates and exchange
control regulations, and the costs that may be incurred in connection with
conversions between various currencies. In addition, investments in countries
other than the United States could be affected by other factors generally not
thought by investors to be present in the United States, including less liquid
and efficient securities markets, greater price volatility, less publicly
available information about issuers, the imposition of withholding or other
taxes, restrictions on the expatriation of funds or other assets of a Portfolio,
expropriation of assets, adverse diplomatic developments, higher transaction and
custody costs, delays attendant in settlement procedures and difficulties in
enforcing contractual obligations.

INFORMATION CONCERNING THE
MASTER-FEEDER FUND STRUCTURE

Each of the Funds seeks to achieve its investment objectives by
investing all of its Investable Assets in the Portfolio which has the same
investment objectives as such Fund and invests solely in assets denominated in
that Fund's Designated Currency. These Portfolios in turn invest in securities
that are consistent with those objectives. In addition to selling beneficial
interests to the Funds, the Portfolios may sell beneficial interests

<PAGE> 18

to other mutual funds or institutional investors. Such investors will invest in
the Portfolios on the same terms and conditions and will pay a proportionate
share of the Portfolios' expenses. However, the other investors investing in the
Portfolios are not required to sell their shares at the same public offering
price as the Funds due to the imposition of sales commissions and variations in
other operating expenses. Therefore, investors in the Funds should be aware that
these differences may result in differences in returns experienced by investors
in the different funds that invest in the Portfolios. Such differences in
returns are also present in other mutual fund structures. Information concerning
other holders of interests in the Portfolios is available from the Administrator
by calling [1-800-499-3603].

Smaller funds investing in the Portfolios may be materially affected by
the actions of larger funds investing in the Portfolios. For example, if a large
fund withdraws from a Portfolio, the remaining funds investing in that Portfolio
may experience higher pro rata operating expenses, thereby producing lower
returns (however, this possibility exists as well for traditionally structured
funds that have large institutional investors). Additionally, because the
Portfolio would have fewer assets in such a case, it may become less
diversified, resulting in increased portfolio risk. Also, funds with a greater
pro rata ownership in such a Portfolio could have effective voting control of
the operations of that Portfolio. Except as permitted by the SEC, whenever the
Trust is requested to vote on matters pertaining to the Portfolios (other than a
vote by the Funds to continue operations of the Portfolios upon the withdrawal
of another investor in the Portfolios), the Trust will hold a meeting of
shareholders of the Funds and will cast all of its votes in the same proportion
as the votes of the Funds' shareholders. The percentage of the Trust's votes
representing Funds shareholders not voting will be voted by the Trustees or
officers of the Trust in the same proportion as the shareholders of the Funds
who do, in fact, vote. Shareholders of the Funds who do not vote will not affect
the Trust's votes at the Portfolios' meetings.

A Fund may withdraw its investment from a Portfolio at any time, if the
Board of Trustees of the Trust determines that it is in the best interests of
the shareholders of that Fund to do so. Upon any such withdrawal, the Board of
Trustees of the Trust would consider what action might be taken, including
investing all the Investable Assets of that Fund in another pooled investment
entity having the same investment objectives as the Fund or retaining Rothschild
International Asset Management Limited or another investment adviser to manage
the Fund's assets directly in accordance with the investment policies described
above with respect to the relevant Portfolio. Any such withdrawal could result
in distributions to such Fund from the Portfolio "in kind" of portfolio
securities (as opposed to a cash distribution) to the extent permitted by the
1940 Act, or rules adopted thereunder. If securities are distributed, such Fund
could incur brokerage, tax or other charges in converting the securities to
cash. In addition, the distribution in kind may result in a less diversified
portfolio of investments or adversely affect the liquidity of that Fund.
Notwithstanding the above, there are other means for meeting redemption
requests, such as borrowing.

The Funds' investment objectives are fundamental policies and may not be
changed without the approval of the Funds' shareholders. The investment
objectives of the Portfolios are not fundamental policies and may be changed
without the approval of the investors in the Portfolio. Shareholders of a Fund
will receive 30 days prior written notice with respect to any change in the
investment objective of its corresponding Portfolio. See "Investment Objective"
and "Investment Policies and Restrictions" for a description of the fundamental
policies of the Portfolios that cannot be changed without approval of the "vote
of a majority of the outstanding voting securities" (as defined in the 1940 Act)
of the Portfolios.

For descriptions of the investment objectives, policies and restrictions
of the Portfolios, see "Investment Objectives" and "Investment Policies and
Restrictions." For descriptions of the management of the Portfolios, see
"Management" herein and in the Statement of Additional Information. For
descriptions of the expenses of the Portfolios, see "Management" herein.

<PAGE> 19

MANAGEMENT

Each Fund is a separate series of the Trust, a Delaware business trust
under the terms of the Agreement and Declaration of Trust establishing the
Trust, which is governed by the laws of Delaware. The Trustees of the Trust are
ultimately responsible for the management of its business and affairs.

Each Portfolio is a separate investment series of the Portfolio Trust,
which is also a Delaware business trust under the terms of the Agreement and
Declaration of Trust establishing the Portfolio Trust, which is governed by the
laws of Delaware. Under the terms of the Portfolio Trust's Declaration of Trust,
the affairs of the Portfolio are managed under the supervision of the Trustees
of the Portfolio Trust.

The Boards of Trustees of the Portfolio Trust and the Trust establish
their respective policies and supervise and review the operations and management
of the Portfolio Trust and the Trust, respectively. The day-to-day operations of
the Portfolio Trust and the Trust are administered by officers elected by their
respective Board of Trustees.

A majority of the Trustees who are not "interested persons" (as defined
in the 1940 Act) of the Trust and the Portfolio Trust, as the case may be, have
adopted written procedures reasonably appropriate to deal with potential
conflicts of interest arising from the fact that the same individuals are
Trustees of the Trust and of the Portfolio Trust, up to and including creating
separate Boards of Trustees. See "Management of the Trust and Portfolio Trust"
in the Statement of Additional Information for more information about the
Trustees and officers of the Trust and the Portfolio Trust.

Investment Adviser and Investment Advisory Agreement

The Investment Adviser serves pursuant to a Master Investment Advisory
Agreement with the Portfolio Trust. The Investment Adviser is a British
corporation that was formed in 1975 and is registered under the U.S. Investment
Advisers Act of 1940, as amended. It is an indirect subsidiary of Rothschild
Concordia AG of Zug, Switzerland, a holding company whose subsidiaries manage
approximately $27 billion of assets, spread across equities, bonds and
currencies. The Investment Adviser is an affiliate of the merchant bank NM
Rothschild & Sons Limited.

The Investment Adviser, subject to the supervision and direction of the
Portfolio Trust's Board of Trustees, professionally manages each Portfolio in
accordance with such Portfolio's investment objectives and policies and makes
all investment decisions for those Portfolios. In consideration of these
services, the Portfolio Trust has agreed to pay the Investment Adviser monthly
an annual advisory fee with respect to each Portfolio. The advisory fee for each
Portfolio is calculated daily and payable monthly at an annual rate of up to
.20% of average daily net assets.

The Investment Adviser and the Administrator may, at their own expense,
provide compensation to certain financial institutions whose customers purchase
significant amounts of shares of a Fund. The amount of such compensation may be
made on a one-time and/or periodic basis, and may be up to 100% of the annual
fees that are earned by the Investment Adviser or the Administrator (after
adjustments) and are attributable to shares held by such customers. Such
compensation will not represent an additional expense to the Funds or their
shareholders, since it will be paid from assets of the Investment Adviser and
the Administrator or their affiliates.

The portfolio manager for all of the Portfolios is Thomas Barman, who
has been employed by the Investment Adviser as its Director for Currency
Management since November 1994. He has been primarily responsible for the
day-to-day management of the Portfolios' portfolios since their commencement of
operations. He has over 25 years experience in fund management. From March 1993
to August 1994, Mr. Barman was

<PAGE> 20

a portfolio manager for Glaxo (Bermuda) Limited. From April 1991 to February
1993, he was a portfolio manager for the U.S. Office of Caisse des Depots et
Consignations. Prior to that time, he served as Foreign Exchange Officer at the
Federal Reserve Bank of New York and was head of the U.S. Treasury investments
at Credit Suisse (New York).

The Investment Adviser has a Code of Ethics governing personal
securities transactions of certain of its employees. See the Statement of
Additional Information.

Distributor

The Distributor is an affiliate of the Administrator. Mutual funds
structured like the Funds sell shares on a continuous basis. The Funds' Shares
are sold through the Distributor. Certain officers of the Trust are also
officers and/or directors of the Distributor.

Administrator

The Administrator, a wholly-owned subsidiary of The BISYS Group, Inc.,
is responsible for coordinating the Funds' efforts and generally assuring the
operation of the Funds' business. It has been providing services to mutual funds
since 1987.

The Administrator provides a wide range of services to the Funds,
including maintaining the Funds' offices, providing statistical and research
data, coordinating the preparation of reports to shareholders, calculating and
providing for the calculation of net asset values of Fund shares, dividends and
capital gains distributions to shareholders, and performing other administrative
functions necessary for the smooth operation of the Funds.

The Administrator provides the Portfolio Trust with office space and
with certain clerical services and facilities. The Administrator is entitled to
an administration fee calculated daily and payable monthly at an annual rate of
.10% of the average daily net assets of all of the Funds.

Payments for Fund shares must normally be in the relevant Fund's
Designated Currency and in order to avoid fees and delays should be made in the
manner described in the section entitled "How to Buy Five Arrows Shares". Please
remember that the Trust retains the right to reject any purchase order.

Transfer and Dividend Disbursing Agent

Under its agreement with the Trust, BISYS Fund Services, Inc., as
Transfer Agent, provides customary transfer and dividend disbursing agent
services, including processing purchase, redemption and transfer transactions,
responding to shareholder inquiries, automatically investing dividends in Fund
shares, transmitting dividends to shareholders, assisting shareholders in
changing account designations and addresses and transmitting to shareholders
proxy statements, annual reports, prospectuses and other Trust communications.
The Transfer Agent may sub-contract any of its duties to another person,
including its affiliates. See "How to Buy Five Arrows Shares" and "How to Change
Funds."

Custodian

The Chase Manhattan Bank is the custodian of the Trust and Portfolio
Trust (the "Custodian") and, in that capacity, maintains custody of the Trust's
and Portfolio Trust's assets, including those located outside the United States.

<PAGE> 21

Expenses

All expenses incurred in the operation of a Fund or a Portfolio are
borne by such Fund or Portfolio except to the extent specifically assumed by the
Investment Adviser, the Distributor, the Administrator, the Custodian, or the
Transfer Agent. Subject to the undertaking of the Investment Adviser to
reimburse the Funds or Portfolios, as the case may be, for certain of their
excess expenses, the Funds or Portfolios, as the case may be, have confirmed
their obligation to pay all their other respective expenses, including: taxes,
brokerage fees and commissions; certain insurance premiums; auditing, legal and
compliance expenses; costs of forming the Trust and Portfolio Trust and
maintaining corporate existence; costs of Trust accounting; costs of preparing
and printing the Trust's prospectuses, statements of additional information and
shareholder reports and delivering them to shareholders; compensation of
Trustees of the Trust or Portfolio Trust who are not employees of the
Distributor or Administrator or their affiliates and costs of other personnel
performing services for the Trust or Portfolio Trust; costs of corporate
meetings; registration fees and related expenses for the Trust's registration
with the SEC and the securities regulatory authorities of other jurisdictions in
which the Funds' shares are sold; state securities law registration fees and
related expenses and other required registrations and related publication fees;
fees payable to the Investment Adviser under the Investment Advisory Agreement;
fees payable to the Administrator, Transfer Agent and Custodian.

The Investment Adviser has voluntarily agreed to reimburse such portion
of its advisory fee as is necessary to cause the annualized total expenses of
each class of a Fund not to exceed a specified percentage of such class's
average daily net asset value (.25% in the case of the Five Arrows Class of the
U.S. Dollar Fund and .35% in the case of the Five Arrows Class of each other
Fund). This undertaking shall remain in effect for the fiscal period ending
October 31, 1997, and thereafter in the discretion of the Investment Adviser.
The Investment Adviser has reserved the right to terminate or revise these
limitations at any time after October 31, 1997.

The Investment Adviser, the Distributor, the Administrator, the Transfer
Agent and the Custodian may also from time to time otherwise voluntarily waive
their respective fees. No fee waivers may be recouped beyond the end of any
fiscal year.

CALCULATION OF NET ASSET VALUE

The net asset value per share of each Fund, expressed in the relevant
Fund's Designated Currency, is determined by dividing the value of the Fund's
net assets (i.e., the value of its investment in its corresponding Portfolio and
other assets, including accrued but undistributed net investment income, less
liabilities) by the total number of shares of the Fund outstanding. Such net
asset values are determined once every Trust Business Day at 2:00 p.m. U.S.
Eastern Time for the U.S. Dollar and Canadian Dollar Funds and 9:00 a.m. U.S.
Eastern Time for the Pound Sterling and Deutschemark Funds.

By investing all of their assets in the relevant Portfolio, each Fund
seeks to maintain the following constant net asset value per share:

U.S. Dollar Fund U.S. $1.00
Pound Sterling Fund (pound)1.00
Deutschemark Fund DM1.00
Canadian Dollar Fund C$1.00

<PAGE> 22

If at any time, however, the market value of any Portfolio's total assets
deviates more than 1/2 of 1% from their value determined on an amortized cost
basis, the Portfolio Trust's Board of Trustees will consider whether any action
should be initiated to prevent any adverse effects on the Portfolios'
shareholders. The Portfolio Trust's Board of Trustees will monitor the use of
the amortized cost method of valuation in order to ensure that this method
continues to be in the best interest of the Portfolios' shareholders. There may
be periods during which the stated value of an instrument determined under the
amortized cost method of valuation is higher or lower than the price the
Portfolio would receive if the instrument were sold, and the accuracy of
amortized cost valuation can be affected by changes in interest rates and the
credit standing of issuers of the Portfolio's investments. There is no assurance
that the Portfolios will maintain a stable net asset value per share.

If in the view of the Portfolio Trust's Board of Trustees it is
inadvisable to continue maintaining a constant net asset value for any
Portfolio, the Board of Trustees may discontinue using the amortized cost method
of valuation for such Portfolio.

HOW TO BUY FIVE ARROWS SHARES

Five Arrows Shares of the Funds are sold on a continuous basis by the
Distributor. Investors making an initial purchase of Five Arrows shares must
complete the Application Agreement accompanying this Prospectus, and forward it
to the Transfer Agent for acceptance by the Trust and establishment of an
account number. Subsequent investments may be made by notifying the Trust of a
purchase by telephoning the Distributor during Trust Hours of Operation and by
wiring Disbursable Funds to the Distributor in accordance with the payment
instructions and bank account details set out in the Application Agreement.

The minimum initial investment (the "Initial Investment Minimum") is
$500,000 for Five Arrows shares (or the equivalent in the relevant Fund's
Designated Currency). The Initial Investment Minimum amount may either be
satisfied by investing such an amount in a single Fund or by aggregating
purchases in several Funds. The minimum subsequent investment ("Subsequent
Investment Minimum") for Five Arrows shares is $5,000 (or the equivalent in the
relevant Fund's Designated Currency). The Trust may, at its discretion, waive
the minimum investment requirements. The purchase of shares of each Fund must be
made in the Designated Currency for such Fund.

Purchases of Five Arrows shares of any of the Funds will be processed in
accordance with the procedures set out below, at the net asset value per share
of the relevant Fund next determined after the purchase order is duly received.
No sales charge will be imposed at the time of purchase or redemption. The full
amount of the investor's purchase payment received by the Distributor will be
invested in the relevant Fund.

Purchases of shares of a Fund will be effected on Trust Business Days in
accordance with the procedures set out below and only when the wire system
designated for use in transmitting money to the relevant Fund permits the timely
transmission of Disbursable Funds. Additionally, on days when the New York Stock
Exchange and/or the Trust's Custodian or Distributor close early due to a
partial holiday or otherwise, the Trust reserves the right to advance the times
at which purchase and redemption orders must be received. Prospective or current
Five Arrows shareholders may transmit purchase orders by telephoning the
Distributor at 1-800-824-3863.

o Purchase orders for shares of the U.S. Dollar Fund received prior
to 11 a.m. U.S. Eastern Time on a Trust Business Day will be
processed on that same day (or the next New York Banking Day (as
defined below) if such Trust Business Day is not a New York
Banking Day).

<PAGE> 23

o Purchase orders for shares of the Canadian Dollar Fund received
prior to 11 a.m. U.S. Eastern Time on a Trust Business Day will
be processed on that same day (or the next Toronto Banking Day
(as defined below) if such Trust Business Day is not a Toronto
Banking Day).

o Purchase orders for shares of the Pound Sterling Fund received
prior to 5 p.m. U.S. Eastern Time on a Trust Business Day will
be processed on the following London Banking Day (as defined
below).

o Purchase orders for shares of the Deutschemark Fund received
prior to 10 a.m. U.S. Eastern Time on a Trust Business Day will
be processed on the following Frankfurt Banking Day (as defined
below).

Before placing a purchase order investors should acquaint themselves
with the minimum amounts and other requirements for using the relevant wire
system for the transfer of Disbursable Funds, and should ascertain whether the
financial institution from which the purchase payment is being sent, has access
to the appropriate system. It is essential that complete information, regarding
the investor's account, accompany all wire instructions in order to facilitate
the prompt and accurate handling of investments. Investors may obtain, from
their financial institution, further information about remitting funds by wire
and any fees that may be imposed for so doing. The Trust does not impose a fee
for receiving payment by wire.

If a purchase order is not received prior to the applicable time listed
above, such purchase order shall be deemed to have been received on the next
following Trust Business Day. Investors will be entitled to any dividends
declared or income earned on the day when their purchase orders are processed,
provided that Disbursable Funds are received in the relevant Fund's Designated
Currency in the appropriate bank account (details of which are set out on the
Application Agreement) by the close of business on that same day. If Disbursable
Funds, with respect to any purchase order, are not received by this time by the
Distributor, the Trust reserves the right, in its sole discretion, (a) to accept
the order and assess interest on the overdue payment, or (b) to cancel the
order, and to hold the purchaser responsible for any loss and other costs
incurred by the Distributor and/or the Trust.

The Trust reserves the right to reject any purchase order in whole or in
part. All of a shareholder's accounts will be subject to the elections and
instructions specified by the shareholder in the Application Agreement covering
the accounts.

United States Federal tax regulations require investors that are United
States persons to provide a certified Taxpayer Identification Number and/or
certain other required certifications within 30 days following the opening or
reopening of an account in order to avoid withholding of taxes on distributions
and proceeds of redemptions.

Ownership of the Trust's shares will be reflected by book-entry, and
certificates for shares will not be issued. Investment in the Trust is not
recommended for any investors who require a stock certificate to evidence their
shares.

All investments must be made in the Designated Currency of the Fund
whose shares are being purchased, as discussed above. Investors may convert
other currencies into the Designated Currency of a Fund through The Chase
Manhattan Bank, in accordance with its customary currency conversion credit and
operational arrangements and at its prevailing rates and fees to customers, or
through other dealers in foreign exchange, in accordance with their customary
credit and operational arrangements and at their prevailing rates and fees.
Currency conversions may result in capital gains or losses to an investor.

<PAGE> 24

genuine, the Trust will use procedures considered reasonable. These procedures
include recording all telephone conversations, sending confirmations to
shareholders within 72 hours of the telephone transaction, verifying the account
name and a shareholder's account number or tax identification number and sending
redemption proceeds only to the address of record or to a previously authorized
bank account. To the extent that the Trust does not use reasonable procedures to
form its belief, it and/or its service contractors may be responsible for
instructions that are fraudulent or unauthorized.

A "New York Banking Day" is every day except Saturdays, Sundays and
holidays observed by New York City banks (scheduled holidays for 1996 are New
Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Memorial Day,
Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and
Christmas Day).

A "London Banking Day" is every day except Saturdays, Sundays and
holidays observed by London banks (scheduled holidays for 1996 are New Year's
Day, Good Friday, Easter Monday, May Holiday, Spring Holiday, Late Summer
Holiday, Christmas Day and Boxing Day).

A "Frankfurt Banking Day" is every day except Saturdays, Sundays and
holidays observed by Frankfurt banks (scheduled holidays for 1996 are New Year's
Day, Epiphany, Good Friday, Easter Monday, Labor Day, Ascension Day, Whit
Monday, Corpus Christii, Assumption Day, German Unity Day, All Saint's Day, Day
of Penance, Christmas Eve Holiday, Christmas Day, Boxing Day and New Year's
Holiday).

A "Toronto Banking Day" is every day except Saturdays, Sundays and
holidays observed by Toronto banks (scheduled holidays for 1996 are New Year's
Day, Good Friday, Easter Monday, Victoria Day, Canada Day, Labour Day,
Thanksgiving, Remembrance Day, Christmas Eve Holiday, Christmas Day and Boxing
Day).

HOW TO REDEEM FIVE ARROWS SHARES

Five Arrows shareholders will redeem their shares by contacting the
Transfer Agent directly in the manner specified in this prospectus. Subject to
the right of a Fund to make redemptions in kind under certain circumstances, all
redemption requests are treated as requests for redemption in the normal course
in the Fund's Designated Currency.

Redemptions of shares of a Fund will be effected on Trust Business Days
in accordance with the procedures set out below, and only when the wire system
designated for use in transmitting money from the relevant Fund permits the
timely transmission of redemption proceeds. Additionally, as for purchases of
shares, the Trust reserves the right to advance the times at which purchase and
redemption orders must be received (see section headed "How to Buy Five Arrows
Shares" above). Five Arrows shareholders will transmit redemption requests by
either telephoning the Transfer Agent at 1-800-824-3863.

o Redemption requests for shares of the U.S. Dollar Fund received
prior to 11 a.m. U.S. Eastern Time on a Trust Business Day will
be paid on that same day (or the next New York Banking Day if
such Trust Business Day is not a New York Banking Day).

o Redemption requests for shares of the Canadian Dollar Fund
received prior to 11 a.m. U.S. Eastern Time on a Trust Business
Day will be paid on that same day (or the next Toronto Banking
Day if such Trust Business Day is not a Toronto Banking Day).

o Redemption requests for shares of the Pound Sterling Fund
received prior to 5 p.m. U.S. Eastern Time on a Trust Business
Day will be paid on the following London Banking Day.

<PAGE> 25

o Redemption requests for shares of the Deutschemark Fund received
prior to 10 a.m. U.S. Eastern Time on a Trust Business Day will
be paid on the following Frankfurt Banking Day.

If a redemption request is not received prior to the applicable time
listed above, such request shall be deemed to have been received on the next
following Trust Business Day. Shareholders shall be entitled to any dividends
declared or income earned up to and including the day before the day on which
the redemption request is scheduled to be paid.

If the Investment Adviser believes that market conditions exist which
preclude the Trust from making prompt payment in a Fund's Designated Currency,
the Trust can elect to take up to seven days to pay redemption proceeds or to
pay redemption proceeds wholly or partly in readily marketable portfolio
securities. The Trust is obligated to effect a redemption in currency without
regard to market conditions if requested by a shareholder redeeming $250,000 or
less (or in the applicable Designated Currency equivalent thereof) or 1% or
less of a Fund's net assets, whichever is less, during any 90-day period.

Except as provided below, all redemptions in currency are made by wire
transfer in the Designated Currency of the Fund whose shares are being redeemed.
The Trust will wire redemption proceeds through Fedwire in the case of the U.S.
Dollar Fund, CHAPS in the case of the Pound Sterling Fund, FLS in the case of
the Deutschemark Fund and IIPS in the case of the Canadian Dollar Fund. A charge
of $20 (or the equivalent in the relevant Fund's Designated Currency) against
the shareholder's account will be imposed for each wire redemption. Banks
receiving redemption proceeds by wire may also impose a charge for doing so.

If a redemption request does not meet the minimum amount and other
requirements for sending currency through the system, redemption proceeds will
be paid by check mailed to the shareholder. Each shareholder may pre-designate
one bank account per Fund to which redemption proceeds can be directed.

When redemption proceeds are paid in portfolio securities, brokerage
costs may be incurred by the investor in converting the securities to currency.
For further information concerning redemptions in portfolio securities,
shareholders should telephone the Administrator. Redemption in portfolio
securities will be made by delivery to the shareholder, or to another party at
the shareholder's direction, of portfolio securities (together with a cash
payment in the Fund's Designated Currency equal to the value and in lieu of any
fractional securities required to be delivered) with a value determined at the
time the redemption is made to equal the aggregate net asset value of the Fund
shares being redeemed next determined following receipt of the redemption
request.

To the extent permitted by applicable law, the right of redemption with
respect to a Fund may be suspended or the date of payment postponed for more
than seven days when trading in the markets in which the Fund's securities are
traded is restricted or for a period during which an emergency exists as a
result of which disposal by the Fund of its securities is not reasonably
practicable or it is not reasonably practicable for the Fund fairly to determine
the value of its assets. In addition, the right of redemption may be suspended
or the date of payment postponed for such other periods as the SEC by order may
permit to protect the Trust's shareholders.

The Trust will maintain a shareholder's account and the information
contained in the shareholder's Application Agreement in effect until the end of
the calendar year in which the redemption of all the shareholder's shares of the
Funds occurs. The Trust may thereafter require a shareholder to complete a new
Application Agreement in connection with a purchase of shares. This practice
permits a former shareholder to invest in shares of the Funds at any time during
the calendar year without completing a new Application Agreement.

<PAGE> 26

The Trust reserves the right to redeem a shareholder's account at the
Trust's option, upon not less than 60 days' written notice to the shareholder,
if for a period of six months or more the account does not have in any Fund
shares with a net asset value equal to or greater than the Fund's Initial
Investment Minimum. During the 60-day period, a shareholder may avoid automatic
redemption by investing in any Fund an amount sufficient to increase the net
asset value of the account's shares of the Fund to the Fund's Initial Investment
Minimum.

Again, you should note that neither the Trust nor its service
contractors will be responsible for any loss or expense for acting upon
telephone instructions that are believed to be genuine. In attempting to confirm
that telephone instructions are genuine, the Trust will use procedures
considered reasonable, as described above.

HOW TO CHANGE FUNDS

A shareholder may change shares of one Fund into shares of another Fund
by redeeming shares of one Fund, converting the redemption proceeds into the
Designated Currency of another Fund and purchasing the shares of the other Fund
with the proceeds of the currency conversion. During the period between the net
asset value determination applicable to the shares being redeemed in one Fund
and the purchase of shares in another Fund, the shareholder will not be the
owner of, or be eligible to receive dividends with respect to, either the shares
which have been redeemed or the shares being acquired.

The length of time for completion of a Fund change will vary depending
on the Funds involved and the time during Trust Hours of Operation when the Fund
change is initiated. In general, the length of time for completion of a Fund
change will depend upon each of the time required to obtain payment of
redemption proceeds from the Fund whose shares are being redeemed and the time
required to effect any foreign exchange transaction which may be necessary for
the shareholder to obtain the currency of the Fund whose shares are being
acquired. The arrangements involved in effecting foreign exchange transactions
will depend, in part, on a shareholder's credit and operating relationships with
the foreign currency exchange dealer the shareholder uses and may shorten the
length of time required for completion of a Fund change. A shareholder is not
required to submit a new Application Agreement for the purchase of shares in
connection with a Fund change.

The Trust does not provide currency exchange services, either directly
or through its agents, and the selection of a foreign exchange dealer in
connection with a change of Funds is within the shareholder's sole discretion.
The Trust has been advised that The Chase Manhattan Bank's foreign exchange
department is available, at its customary currency conversion rates and fees and
subject to its customary credit and other requirements, to provide foreign
exchange services to shareholders changing Funds. Access to that facility can be
made through the Administrator by telephoning 1-800-499-3603.

Fund changes may result in recognition of a taxable gain or loss. See
"Taxation."

TAXATION

The following discussion is only a summary of certain tax issues that
may be of interest to shareholders. All shareholders are urged to consult their
tax advisers for further information concerning the tax consequences of
investing in the Trust.

Taxation of the Trust

<PAGE> 27

of the Internal Revenue Code regarding sources of income, diversification of
assets, and distribution of income to shareholders, although no assurance can be
given in this regard. As regulated investment companies, the Funds will not be
liable for U.S. Federal income taxes on the net investment income and capital
gain distributed to shareholders in accordance with the applicable provisions of
the Internal Revenue Code. Since it is intended that each Fund will distribute
all of its net income and net capital gain each year, each Fund should avoid all
U.S. Federal income taxes.

Interest derived by the Funds from sources outside the United States may
be subject to non-U.S. withholding taxes. Such withholding taxes may be reduced
or eliminated under the terms of applicable United States income tax treaties,
and the Trust intends to undertake the procedural steps required to claim the
benefits of such treaties. If any non-U.S. taxes are paid by a Fund and, as is
expected, more than 50% in value of the Fund's total assets at the close of any
taxable year consists of securities of non-U.S. banks or corporations, the Fund
may elect to treat any non-U.S. taxes paid by it as paid by its shareholders
with the consequences described under "U.S. Federal Income Taxation of U.S.
Shareholders" below.

Each Fund will determine its income in terms of its Designated Currency
and, in the case of each Fund other than the U.S. Dollar Fund, will translate
its net income for each year from its Designated Currency into U.S. dollars for
U.S. Federal income tax purposes. Under current Treasury regulations, regulated
investment companies are normally required to recognize for U.S. Federal income
tax purposes income or loss attributable to changes in exchange rates between
the U.S. dollar and the Fund's Designated Currency (i.e., currency gain or loss)
absent a ruling to the contrary from the Internal Revenue Service. Recognition
of currency gain in excess of currency loss in any given year would require the
affected Fund to pay dividends in excess of its interest income in order to pay
out all income as calculated for U.S. Federal income tax purposes. In reliance
upon a ruling from the Internal Revenue Service, the Trust calculates the income
of each Fund without recognizing currency gain or loss.

U.S. Federal Income Taxation of U.S. Shareholders

Dividends paid by each Fund out of its net investment income and net
realized short-term capital gain, if any, are taxable to the U.S. shareholders
of the Fund (i.e., a United States corporation or an individual who is a citizen
or resident of the United States) as ordinary income. Dividends to corporate
shareholders will not be eligible for the dividends-received deduction. To the
extent that the Trust elects to declare certain dividends in October, November
or December and to distribute them to the shareholders the following January,
the dividends would be included in the income of the shareholders as if received
in December.

A shareholder of a Fund, other than the U.S. Dollar Fund, will recognize
gain or loss on a sale or redemption of shares (or on a change of shares into
shares in another Fund) in respect of any appreciation or depreciation in the
U.S. dollar-value of the shares from the time the shares are acquired to the
time of disposition. In general, that gain or loss will be capital gain or loss.
In addition, as discussed above, it may eventually be determined that each Fund,
other than the U.S. Dollar Fund, is required to recognize currency gain or loss.
Recognition by a Fund of currency gain in excess of currency loss in any given
year would result in the shareholders of that Fund recognizing ordinary dividend
income in addition to the daily dividends that are attributable to the Fund's
interest income. Any such additional dividends would increase a shareholder's
basis in the shares and would affect the shareholder's calculation of capital
gain or loss on disposition of the shares.

The Trust is required by U.S. Federal law to withhold 31% of reportable
payments (which may include dividends, capital gains distributions and
redemptions) paid to a non-corporate shareholder unless the shareholder
certifies on its Application Agreement that the social security or tax
identification number provided is correct and that the shareholder is not
subject to 31% backup withholding for prior under-reporting to the Internal
Revenue Service.

<PAGE> 28

Each Fund, other than the U.S. Dollar Fund, may be able to elect to
pass-through to its shareholders non-U.S. taxes paid by the Portfolio but does
not currently anticipate doing so. Shareholders of each Fund that so elects will
be required to include in income (in addition to any dividends the shareholders
receive) their proportionate shares of the amount of non-U.S. taxes paid by the
Portfolio and will be entitled to claim either a credit or a deduction for their
shares of such taxes in computing their U.S. Federal income tax liability.
Availability of such a credit or deduction is subject to certain limitations.
Shareholders will be informed each year in which a Fund makes such an election
regarding the amount and nature of non-U.S. taxes to be included in their
income. Dividends from a Fund will be considered to be from U.S. sources if an
election to pass-through non-U.S. taxes is not made. If such an election is
made, dividends from those Funds will be considered to be from non-U.S. sources
for purposes of computing the limitation of the Federal foreign tax credit.

Reports containing appropriate information with respect to the U.S.
Federal income tax status of dividends and distributions paid during the year by
each Fund will be mailed to shareholders shortly after the close of each year.

U.S. Federal Income Taxation of Non-U.S. Shareholders

Non-U.S. shareholders who are not engaged in a U.S. trade or business or
whose distributions from a Fund are not effectively connected with the conduct
of such a trade or business will be generally subject to U.S. withholding tax at
the rate of 30% (or a lower rate under an applicable U.S. income tax treaty) on
dividends of net investment income received from the Trust (including for this
purpose any dividends deemed resulting from a Fund's election to treat non-U.S.
taxes paid by it as paid by its shareholders and, if the Funds are required to
recognize currency gain or loss, any dividends that a Fund, other than the U.S.
Dollar Fund, declares as a consequence of recognizing currency gain in excess of
currency loss for a particular year). Any gains realized from the redemption,
sale or exchange of shares will generally not be subject to U.S. tax for those
non-U.S. shareholders. In the case of individual shareholders who fail to
furnish the Trust with certain required certifications regarding their foreign
status, the Trust may be required to impose backup withholding of U.S.
tax at the rate of 31% on the proceeds of redemptions and exchanges.

If the dividends received from a Fund or gains realized upon the
redemption, exchange or other taxable disposition of Fund shares are effectively
connected with a U.S. trade or business of the shareholder, then all such
dividends and gains will be subject to U.S. Federal income tax at the graduated
rates applicable to U.S. shareholders, although the tax may be eliminated under
the terms of an applicable U.S. income tax treaty. Non- U.S. corporate
shareholders may also be subject to the U.S. branch profits tax in respect of
those dividends and gains.

Non-U.S. shareholders are advised to consult their tax advisers for
further information concerning the U.S. Federal and foreign tax consequences of
investing in the Trust.

DIVIDENDS AND DISTRIBUTIONS

Dividends for each Fund are derived from the net investment of its
corresponding Portfolio, which flows from the interest that such Portfolio earns
on the money market and other instruments it holds. Dividends for each Fund are
derived from the net investment of its corresponding Portfolio, which flows from
the interest that such Portfolio earns on the money market and other instruments
it holds. Dividends on each share are determined in the same manner and are paid
in the same amount, regardless of class, except for such differences as are
attributable to differential class expenses.

<PAGE> 29

to (but not including) the day upon which their redemption is effective. See
"How to Buy Five Arrows Shares" and "How to Redeem Five Arrows Shares."

Dividends from each Fund are automatically reinvested in additional
shares of that Fund at net asset value.

PERFORMANCE

U.S. Dollar Fund

From time to time, the Trust may publish the "yield" and "effective
yield" for the U.S. Dollar Fund. Both yield figures are based on historical
earnings and are not intended to indicate future performance.

The U.S. Dollar Fund's yield is a way of showing the rate of income the
Fund earns on its investments as a percentage of the Fund's share price. To
calculate yield, the Fund takes the interest income it earned from its Fund of
investments for a 7-day period (net of expenses), divides it by the average
number of shares entitled to receive dividends, and expresses the result as an
annualized percentage rate based on the Fund's share price at the end of that
period.

The "effective yield" is calculated in a similar manner, but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment.

All Other Funds

From time to time, the Trust may publish the "current yield" and "total
return" for the Pound Sterling, Deutschemark and Canadian Dollar Funds. Both
calculations are based upon historical earnings and are not intended to indicate
future performances.

Current yield refers to a Fund's annualized net investment income per
share over a 30-day period, expressed as a percentage of the net asset value per
share at the end of the period. For purposes of calculating current yield, the
amount of net investment income per share during that 30-day period, computed in
accordance with regulatory requirements, is compounded by assuming that it is
reinvested at a constant rate over a six-month period. An identical result is
then assumed to have occurred during a second six-month period which, when added
to the result of the first six months, provides an "annualized" yield for an
entire one-year period. Calculations of current yield may reflect absorbed
expenses pursuant to any undertaking that may be in effect. See "Management."

Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is expressed
as a percentage rate which is calculated by combining the income and principal
changes for a specified period and dividing by the net asset value per share at
the beginning of the period. Advertisements may include the percentage rate of
total return or may include the value of a hypothetical investment at the end of
the period which assumes the application of the percentage rate of total return.

To the extent consistent with applicable law, the Trust may also publish
other measures of the historical investment performance of the Pound Sterling,
Deutschemark and Canadian Dollar Funds, including 7-day yield information,
calculated in the manner described above with respect to the U.S. Dollar Fund.

<PAGE> 30

Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a basis
for comparison with other investments or other investment companies using a
different method of calculating performance.

Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Standard & Poor's, Morningstar, Inc. and other
industry publications.

GENERAL INFORMATION

Organization

The Trust was organized as a Delaware business trust on _________, 1996.
The Trust is authorized to issue an unlimited number of shares of beneficial
interest, par value of $.0001 per share. The Board of Trustees may, without
shareholder approval, divide the authorized stock into an unlimited number of
separate series, and the costs of doing so will be borne by the Trust.
Currently, the Board of Trustees has authorized four Funds.

Shares issued by the Funds have no preemptive, conversion or
subscription rights. Shareholders of a Fund have equal and exclusive rights to
dividends and distributions declared by that Fund and to the net assets of that
Fund upon liquidation or dissolution, except for such differences as are
attributable to differential class expenses. Voting rights are not cumulative,
so that the holders of more than 50% of the shares voting in any election of
Trustees can, if they choose to do so, elect all of the Trustees. All shares
when issued in accordance with the terms of this Prospectus will be fully paid
and nonassessable.

The Trust is not required to hold annual meetings of shareholders.
Special meetings of shareholders may be called from time to time for purposes
such as electing or removing Trustees, changing a fundamental policy or
approving an investment advisory agreement.

If less than two-thirds of the Trustees holding office have been elected
by shareholders, a special meeting of shareholders of the Trust will be called
to elect Trustees. Under the Agreement and Declaration of Trust and the 1940
Act, the record holders of not less than two-thirds of the outstanding shares of
the Trust may remove a Trustee by votes cast in person or by proxy at a meeting
called for that purpose or by a written declaration filed with the Trust's
custodian bank. Except as described above, the Trustees will continue to hold
office and may appoint successor Trustees. Whenever ten or more shareholders of
the Trust who have been such for at least six months, and who hold in the
aggregate shares having a net asset value of at least $25,000 or which represent
at least 1% of the outstanding shares, whichever is less, apply to the Trustees
in writing stating that they wish to communicate with other shareholders with a
view to obtaining signatures to request a meeting, and such application is
accompanied by a form of communication and request which they wish to transmit,
the Trustees shall within five (5) Trust Business Days after receipt of such
application either afford to such applicants access to a list of the names and
addresses of all shareholders as recorded on the books of the Trust; or inform
such applicants as to the approximate number of shareholders of record and the
approximate cost of mailing to them the proposed communication or form of
request.

<PAGE> 31

Declaration of Trust also provides that the Funds and other entities investing
in the Portfolios (e.g., other investment companies, insurance company separate
accounts and common and commingled trust funds) will each be liable for all
obligations of the Portfolios in which they invest. However, the risk of the
Funds incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance existed and the Portfolios
themselves were unable to meet their obligations. Accordingly, the Trustees of
the Trust, believe that neither the Funds nor their shareholders will be
adversely affected by reason of the Funds investing in the Portfolios. No series
of the Portfolio Trust has any preference over any other series.

Investors in other series of the Portfolio Trust will not be involved in
any vote involving only Portfolios in which they do not invest. Investors of all
of the series of the Portfolio Trust will, however, vote together to elect
Trustees of the Portfolio Trust and for certain other matters affecting the
Portfolio Trust. As provided by the 1940 Act, under certain circumstances, the
shareholders of one or more series could control the outcome of these votes.

Inquiries concerning the Funds should be made by contacting the
Administrator at the address stated on the cover of this Prospectus or by
telephoning 1-800-499-3603.

No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus and in the Trust's
official sales literature in connection with the offer of the Fund's shares,
and, if given or made, such other information or representations must not be
relied upon as having been authorized by the Trust. This Prospectus does not
constitute an offer of any Fund's shares in any state in which, or to any person
to whom, such offering may not lawfully be made.

<PAGE> 32

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

Rothschild Five Arrows Currency Trust

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

Five Arrows Service Shares

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

Prospectus

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

<PAGE> 33

Prospectus

________________, 1996

Rothschild Five Arrows Currency Trust

Investment Adviser:
Rothschild International Asset Management Limited
Five Arrows House, St. Swithin's Lane
London EC4N 8NR United Kingdom

Distributor:
Rothschild Distributors, Inc.
3435 Stelzer Road
Columbus, OH 43219-3035

Administrator:
BISYS Fund Services Limited Partnership
3435 Stelzer Road
Columbus, OH 43219-3035

Transfer Agent:
BISYS Fund Services, Inc.
100 First Avenue, Suite 300
Pittsburgh, PA 15222

Custodian:
The Chase Manhattan Bank
4 Chase Metrotech Center
Brooklyn, NY 11245

Auditors:
Coopers & Lybrand L.L.P.
1301 Avenue of the Americas
New York, NY 10019-6013

Counsel:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109-2881

<PAGE> 34

Each Fund seeks to maintain a high level of liquidity, to preserve
capital and stability of principal expressed in the Fund's designated currency
("Designated Currency") and, consistent with those objectives, to earn current
income. Unlike other mutual funds which acquire and manage their own portfolios
of securities, each Fund seeks to achieve its investment objective by investing
all of its investable assets (the "Investable Assets") in a portfolio which is a
series of The International Currency Trust (the "Portfolio Trust") which invests
in high quality, short-term instruments denominated in the Designated Currency
of the relevant Fund. See "Information Concerning the Master-Feeder Structure"
on page ___. The Portfolio Trust is also an open-end management investment
company which currently consists of four separate portfolios (the "Portfolios"):
the U.S. Dollar Portfolio, the Pound Sterling Portfolio, the Deutschemark
Portfolio and the Canadian Dollar Portfolio.

The Funds are designed primarily for use as a means of investing
short-term cash reserves in the Funds' Designated Currencies. Investors may also
consider purchasing Fund shares for a number of reasons including satisfying
settlement obligations or delivering a Fund's shares as collateral for a
transactional obligation in a Fund's Designated Currency. Each Fund offers two
classes of shares. The shares offered by this Prospectus are the Five Arrows
Service class, which are available for purchase through certain broker-dealers
and other service organizations. In addition, the Fund offers by separate
Prospectus the Five Arrows shares, which are available for direct purchase in
initial aggregate amounts of $500,000 or more.

This Prospectus sets forth concisely information about the Five Arrows
Service shares of the Trust and each Fund that an investor should know before
investing. It should be read and retained for future reference.

<PAGE> 35

TABLE OF CONTENTS

Page
----

FUND (AND ALLOCATED PORTFOLIO) FEES AND EXPENSES .................2

SUMMARY ..........................................................4

DESCRIPTION OF THE TRUST AND PORTFOLIO TRUST......................5

INVESTMENT OBJECTIVES.............................................5

INVESTMENT POLICIES AND RESTRICTIONS..............................6
U.S. DOLLAR PORTFOLIO.....................................6
POUND STERLING PORTFOLIO..................................7
DEUTSCHEMARK PORTFOLIO....................................7
CANADIAN DOLLAR PORTFOLIO.................................8
ALL PORTFOLIOS............................................8
FUNDAMENTAL POLICIES......................................9

SPECIAL INVESTMENT CONSIDERATIONS AND RISK FACTORS...............10

INFORMATION CONCERNING THE MASTER-FEEDER FUND STRUCTURE..........11

MANAGEMENT.......................................................13

CALCULATION OF NET ASSET VALUE...................................16

HOW TO BUY FIVE ARROWS SERVICE SHARES............................17

HOW TO REDEEM FIVE ARROWS SERVICE SHARES.........................19

HOW TO CHANGE FUNDS..............................................21

TAXATION.........................................................22

DIVIDENDS AND DISTRIBUTIONS......................................24

PERFORMANCE......................................................24

GENERAL INFORMATION..............................................25

<PAGE> 36

<PAGE> 37

FUND (AND ALLOCATED PORTFOLIO) FEES AND EXPENSES

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

FIVE ARROWS SERVICE SHARES
- --------------------------------------------------------------------------------

Five Arrows Service shares are offered to shareholders on a no-load
basis without any commissions or distribution ("12b-1 plan") charges. However,
Five Arrows Service shares are subject to a service charge of .25% of the
average daily net asset value of such shares.

All Funds

Shareholder Transaction Expenses
- --------------------------------

Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Redemption fees None
Exchange fees None

Annual Operating Expenses (as a percentage
- -------------------------------------------
of average net assets and net of reimbursements)
- ------------------------------------------------
<TABLE>
<CAPTION>

Service Total Fund
Advisory Fees Fee Other Expenses Expenses
------------- --- -------------- --------
<S> <C> <C> <C> <C>
U.S. Dollar .20% .25% .05% .50%
Pound Sterling .20% .25% .15% .60%
Deutschemark .20% .25% .15% .60%
Canadian Dollar .20% .25% .15% .60%
</TABLE>

EXPENSES PER 1,000 SHARE INVESTMENT

1 Year 3 Year
------ ------

U.S. Dollar $5 $16
Pound Sterling (pound)6 (pound)19
Deutschemark DM6 DM19
Canadian Dollar C$6 C$19

The above table of fees and expenses is provided to assist investors in
understanding the various costs and expenses which may be borne directly or
indirectly by investors in the Funds. The Trust does not charge a sales load in
connection with the purchase or redemption of its shares. The percentages shown
above are based on an annualized estimate of the expenses to be incurred during
the current fiscal year, after expense reimbursements, and should not be
considered a representation of future costs and expenses or performance. Actual
costs and expenses or performance in future periods may be more or less than
those shown above. For the purpose of the example, assume reinvestment of all
dividends and distributions. The Investment Adviser has voluntarily agreed to
reimburse such portion of its advisory fee as is necessary to cause the
annualized total expenses of each class of a Fund not to exceed a specified
percentage of such class' average daily net asset value (.50% in the case of
the of the Five Arrows Service Class of the U.S. Dollar Fund and .60% in the
case of the Five Arrows Service Class of each other Fund). This undertaking
shall remain in effect for the fiscal period ending October 31, 1997, and
thereafter in the discretion of the Investment Adviser. The Investment Adviser
has reserved the right to terminate or revise these limitations with respect to
any period after October 31, 1997. The table does not reflect charges for
optional services, such as the fee for remittance of redemption proceeds by
wire. For a more complete discussion of the fees connected with an investment
in the Trust and the services provided to the Trust, see "Management", "How to
Buy Five Arrows Service Shares" and "How to Redeem Five Arrows Service Shares."

<PAGE> 38

SUMMARY

The Trust and Portfolio Trust bear all operating costs not agreed to be
borne by the Investment Adviser, the Distributor, the Administrator, the
Transfer Agent or the Custodian including, without limitation, legal and
auditing fees and expenses, expenses of investor reports to be provided to
existing shareholders; registration and reporting fees and expenses; and
Trustees' fees and expenses. The Investment Adviser has voluntarily agreed to
reimburse such portion of its advisory fee as is necessary to cause the
annualized total expenses of each class of a Fund not to exceed a specified
percentage of such class' average daily net asset value (.50% in the case of the
Five Arrows Service Class of the U.S. Dollar Fund and .60% in the case of the
Five Arrows Service Class of each other Fund). This undertaking shall remain in
effect for the fiscal period ending October 31, 1997, and thereafter in the
discretion of the Investment Adviser. The Investment Adviser has reserved the
right to terminate or revise these limitations at any time after October 31,
1997.

Five Arrows Service shares will be issued at the net asset value next
determined after receipt by the Trust of an order in proper form and acceptance
of that order by the Trust. The Trust reserves the right to take appropriate
action in the event that Disbursable Funds (as defined below) for the purchase
price for the shares being issued are not received on a timely basis.
Disbursable Funds may only be received by the Trust during the operating times
for the wire transmission systems designated for use in transmitting money to
the Funds. Five Arrows Service shares of the Fund are subject to an annual
service fee of .25% of the average daily net asset value of such shares. See
"How to Buy Five Arrows Service Shares."

<PAGE> 39

Sundays and holidays which are observed by both the Exchange and New York City
banks (scheduled holidays for 1996 are New Year's Day, President's Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day) The value
of the investments held by each Fund is determined in its Designated Currency
once every 24 hours during Trust Hours of Operation. See "Calculation of Net
Asset Value" and "How to Redeem Five Arrows Service Shares."

DESCRIPTION OF THE TRUST AND PORTFOLIO TRUST

INVESTMENT OBJECTIVES

<PAGE> 40

INVESTMENT POLICIES AND RESTRICTIONS

U.S. DOLLAR PORTFOLIO

POUND STERLING PORTFOLIO

<PAGE> 41

DEUTSCHEMARK PORTFOLIO

<PAGE> 42

CANADIAN DOLLAR PORTFOLIO

ALL PORTFOLIOS

In seeking to obtain its investment objectives, each Portfolio may
invest in the types of securities described below.

Variable and Floating Rate Notes
--------------------------------

Repurchase Agreements
---------------------

<PAGE> 43

When-Issued Securities
- ----------------------

Illiquid Securities
- -------------------

FUNDAMENTAL POLICIES

<PAGE> 44

SPECIAL INVESTMENT CONSIDERATIONS AND RISK FACTORS

Possible Changes in Net Asset Value and Yield
- ---------------------------------------------

Investments in a Single Issuer
- ------------------------------

<PAGE> 45

Concentration in Obligations of Qualifying Banks
- ------------------------------------------------

Investments in Foreign Securities
- ---------------------------------

INFORMATION CONCERNING THE
MASTER-FEEDER FUND STRUCTURE

<PAGE> 46

<PAGE> 47

MANAGEMENT

Investment Adviser and Investment Advisory Agreement

<PAGE> 48

The Investment Adviser has a Code of Ethics governing personal
securities transactions of certain of its employees. See the Statement of
Additional Information.

Distributor

Administrator

The Administrator provides the Portfolio Trust with office space and
with certain clerical services and facilities.

The Administrator is entitled to an administration fee calculated daily
and payable monthly at an annual rate of .10% of the average daily net assets of
all of the Funds. The Administrator or its affiliates may also act as Service
Organizations (as defined below).

Shareholder Services Plan

The Board of Trustees of the Trust has adopted a shareholder services
plan with respect to the Five Arrows Service shares of each Fund which
authorizes the Fund to compensate service providers such as broker-dealers
("Service Organizations") for providing account administration services to their
clients who are beneficial owners of such shares ("Shareholder Services Plan").
One or more affiliates of the Investment Adviser and the Administrator may act
as a Service Organization. Each Fund will enter into agreements with Service
Organizations which purchase Five Arrows Service shares on behalf of their
clients ("Service Agreements"). The Service Agreements will provide for
compensation to the Service Organizations in an amount up to .25% (on an annual
basis) of the average daily net assets of the Five Arrows Service shares of the
applicable Fund attributable to or held in the name of the Service Organization
for its clients. The services provided by the Service Organization may include,
among other things, acting as a shareholder of record, maintaining account
records for their clients, and processing orders to purchase, redeem and
exchange Five Arrows Service shares for their clients.

Holders of Five Arrows Service shares of a Fund will bear all expenses
and fees paid to Service Organizations for their services with respect to such
shares as well as any other expenses which are directly attributable to such
shares.

<PAGE> 49

Service Organizations may charge other fees to their clients who are the
beneficial owners of Five Arrows Service shares in connection with their client
accounts. These fees would be in addition to any amounts received by the Service
Organizations under a Service Agreement and would be for services other than
those provided under such an Agreement. Under the terms of such Service
Agreements, Service Organizations are required to provide their clients with a
schedule of fees charged to such clients which relate to the investment of
customers' assets in Five Arrows Service shares at the time of any investment
and whenever changes to the schedule are made.

Each Fund will accrue payments made pursuant to a Service Agreement
daily. The service payments which are required to be accrued to the Five Arrows
Service shares on any day will not exceed the distributable income to be accrued
to such shares on that day. All inquiries by beneficial owners of Five Arrows
Service shares must be directed to such owners' Service Organization.

Payments for Fund shares must normally be in the relevant Fund's
Designated Currency and in order to avoid fees and delays should be made in the
manner described in the section entitled "How to Buy Five Arrows Service
Shares". Please remember that the Trust retains the right to reject any purchase
order.

Transfer and Dividend Disbursing Agent

Custodian

Expenses

<PAGE> 50

The Investment Adviser has voluntarily agreed to reimburse such portion
of its advisory fee as is necessary to cause the annualized total expenses of
each class of a Fund not to exceed a specified percentage of such class's
average daily net asset value (.50%, in the case of the Five Arrows Service
Class of the U.S. Dollar Fund and .60% in the case of the Five Arrows Service
Class of each other Fund). This undertaking shall remain in effect for the
fiscal period ending October 31, 1997, and thereafter in the discretion of the
Investment Adviser. The Investment Adviser has reserved the right to terminate
or revise these limitations at any time after October 31, 1997.

CALCULATION OF NET ASSET VALUE

By investing all of their assets in the relevant Portfolio, each Fund
seeks to maintain the following constant net asset value per share:

U.S. Dollar Fund U.S. $1.00
Pound Sterling Fund (pound)1.00
Deutschemark Fund DM1.00
Canadian Dollar Fund C$1.00

It is anticipated that each Portfolio's assets will utilize the
amortized cost method of valuation as a reasonable means of approximating each
Portfolio's market value. This method involves valuing an instrument at its cost
and thereafter assuming a constant amortization or accretion to maturity of any
premium or discount. If at any time, however, the market value of any
Portfolio's total assets deviates more than 1/2 of 1% from their value
determined on an amortized cost basis, the Portfolio Trust's Board of Trustees
will consider whether any action should be initiated to prevent any adverse
effects on the Portfolios' shareholders. The Portfolio Trust's Board of Trustees
will monitor the use of the amortized cost method of valuation in order to
ensure that this method continues to be in the best interest of the Portfolios'
shareholders. There may be periods during which the stated value of an
instrument determined under the amortized cost method of valuation is higher or
lower than the price the Portfolio would receive if the instrument were sold,
and the accuracy of amortized cost valuation can be affected by changes in
interest rates and the credit standing of issuers of the Portfolio's
investments. There is no assurance that the Portfolios will maintain a stable
net asset value per share.

<PAGE> 51

HOW TO BUY FIVE ARROWS SERVICE SHARES

Shares of the Funds are sold on a continuous basis by the Distributor.
Two classes of shares, Five Arrows and Five Arrows Service, are offered to
potential shareholders meeting the criteria set forth below.

Clients of Service Organizations may only purchase Five Arrows Service
shares through their accounts at their Service Organization and should contact
such Service Organization directly for appropriate purchase instructions. When
Five Arrows Service shares are purchased through such Service Organizations, an
account fee may be charged by those Service Organizations for providing services
in connection with your investment which are not related to the services
provided under the Shareholder Services Plan. These fees may include, for
example, account maintenance fees, compensating balance requirements or fees
based upon account transactions, assets or income. Information concerning these
services and any charges should be obtained from these Service Organizations
before a Customer or client authorizes the purchase of Fund shares, and this
Prospectus should be read in conjunction with any information so obtained.

As set forth above, Five Arrows Service shares of the Funds are offered
exclusively through participating Service Organizations. All inquiries of
beneficial owners of Five Arrows Service shares should be directed to the
Service Organization from which such Five Arrows Service shares were purchased.

Purchases of Five Arrows Service shares of any of the Funds will be
processed in accordance with the procedures set out under "Purchase of Shares"
below, at the net asset value per share of the relevant Fund next determined
after the purchase order is duly received. No sales charge is imposed at the
time of purchase or redemption. However, shareholders will bear an annual
service fee which will be used to pay for additional services provided to such
shareholders.

The Board of Trustees of the Trust has adopted a Shareholder Services
Plan with respect to the Five Arrows Service shares of each Fund. Under the
Plan, each Fund is authorized to pay Service Organizations, an annual amount of
up to .25% of the average net assets attributable to the Five Arrows Service
shares of each Fund for providing particular services to the shareholders of
such Five Arrows Service shares and/or maintenance of shareholder accounts.

In return for the shareholder services described below, the Five Arrows
Service shareholders will bear the expense of the Shareholders Services Plan
related to their shares. Because of the costs associated with the Shareholder
Services Plans, the dividends of the Five Arrows Service shares of each Fund
will be lower than the dividends of the Five Arrows shares of that Fund.

Service activities provided by Service Organizations to shareholders of
Five Arrows Service shares of a Fund may include: receiving, aggregating and
processing shareholder or beneficial owner (collectively "shareholder") orders;
furnishing shareholder subaccounting; providing and maintaining retirement plan
records; communicating periodically with shareholders; acting as the sole
shareholder of record and nominee for shareholders; maintaining account records
for shareholders; answering questions and handling correspondence from
shareholders about their accounts; issuing various shareholder reports and
confirmations for transactions by shareholders; performing daily investment
("sweep") functions for shareholders and performing similar account and
administrative services. For a more complete description of the Shareholder
Services Plan and its terms, see the Statement of Additional Information.

<PAGE> 52

reserves the right to advance the times at which purchase and redemption orders
must be received. Prospective or current Five Arrows Service shareholders may
transmit purchase orders through their Service Organizations.

o Purchase orders for shares of the U.S. Dollar Fund received
prior to 11 a.m. U.S. Eastern Time on a Trust Business Day will
be processed on that same day (or the next New York Banking Day
(as defined below) if such Trust Business Day is not a New York
Banking Day).

o Purchase orders for shares of the Pound Sterling Fund received
prior to 5 p.m. U.S. Eastern Time on a Trust Business Day will
be processed on the following London Banking Day (as defined
below).

o Purchase orders for shares of the Deutschemark Fund received
prior to 10 a.m. U.S. Eastern Time on a Trust Business Day will
be processed on the following Frankfurt Banking Day (as defined
below).

It is the responsibility of Service Organizations to transmit orders for
purchases by their Customers promptly to the Funds in accordance with their
agreements with their Customers, and to deliver the required Disbursable Funds
by the time stated above. If Disbursable Funds are not received by the required
time, the order may be cancelled and the Service Organization will be held
responsible for any loss and other costs incurred by the Distributor and/or the
Trust.

<PAGE> 53

Neither the Trust nor its service contractors will be responsible for
any loss or expense for acting upon telephone instructions that are believed to
be genuine. In attempting to confirm that telephone instructions are genuine,
the Trust will use procedures considered reasonable. These procedures include
recording all telephone conversations, sending confirmations to shareholders
within 72 hours of the telephone transaction, verifying the account name and a
shareholder's account number or tax identification number and sending redemption
proceeds only to the address of record or to a previously authorized bank
account. To the extent that the Trust does not use reasonable procedures to form
its belief, it and/or its service contractors may be responsible for
instructions that are fraudulent or unauthorized.

HOW TO REDEEM FIVE ARROWS SERVICE SHARES

Five Arrows Service shareholders will redeem their shares according to
the procedures established, if any, by the Service Organization through which
they purchased those shares. Thereafter, the relevant Service Organization may
request redemption of a Fund's shares at any time in any amount during Trust
Hours of Operation by contacting the Transfer Agent. Subject to the right of a
Fund to make redemptions in kind under certain circumstances, all redemption
requests are treated as requests for redemption in the normal course in the
Fund's Designated Currency.

<PAGE> 54

relevant Fund permits the timely transmission of redemption proceeds.
Additionally, as for purchases of shares, the Trust reserves the right to
advance the times at which purchase and redemption orders must be received (see
section headed "Purchases Of Shares" above). As noted above, Five Arrows Service
shareholders will transmit redemption requests through their respective Service
Organization.

o Redemption requests for shares of the Pound Sterling Fund
received prior to 5 p.m. U.S. Eastern Time on a Trust Business
Day will be paid on the following London Banking Day.

o Redemption requests for shares of the Deutschemark Fund received
prior to 10 a.m. U.S. Eastern Time on a Trust Business Day will
be paid on the following Frankfurt Banking Day.

<PAGE> 55

HOW TO CHANGE FUNDS

<PAGE> 56

Fund changes may result in recognition of a taxable gain or loss. See
"Taxation."

TAXATION

Taxation of the Trust

Under Subchapter M of the Internal Revenue Code, each Fund of the Trust
is to be treated as a separate corporation for U.S. Federal income tax purposes.
It is intended that each Fund will qualify for each fiscal year as a "regulated
investment company" under the Internal Revenue Code by complying with certain
requirements of the Internal Revenue Code regarding sources of income,
diversification of assets, and distribution of income to shareholders, although
no assurance can be given in this regard. As regulated investment companies, the
Funds will not be liable for U.S. Federal income taxes on the net investment
income and capital gain distributed to shareholders in accordance with the
applicable provisions of the Internal Revenue Code. Since it is intended that
each Fund will distribute all of its net income and net capital gain each year,
each Fund should avoid all U.S. Federal income taxes.

U.S. Federal Income Taxation of U.S. Shareholders

<PAGE> 57

depreciation in the U.S. dollar-value of the shares from the time the shares are
acquired to the time of disposition. In general, that gain or loss will be
capital gain or loss. In addition, as discussed above, it may eventually be
determined that each Fund, other than the U.S. Dollar Fund, is required to
recognize currency gain or loss. Recognition by a Fund of currency gain in
excess of currency loss in any given year would result in the shareholders of
that Fund recognizing ordinary dividend income in addition to the daily
dividends that are attributable to the Fund's interest income. Any such
additional dividends would increase a shareholder's basis in the shares and
would affect the shareholder's calculation of capital gain or loss on
disposition of the shares.

Each Fund, other than the U.S. Dollar Fund, may be able to elect to
pass-through to its shareholders non- U.S. taxes paid by the Portfolio but does
not currently anticipate doing so. Shareholders of each Fund that so elects will
be required to include in income (in addition to any dividends the shareholders
receive) their proportionate shares of the amount of non-U.S. taxes paid by the
Portfolio and will be entitled to claim either a credit or a deduction for their
shares of such taxes in computing their U.S. Federal income tax liability.
Availability of such a credit or deduction is subject to certain limitations.
Shareholders will be informed each year in which a Fund makes such an election
regarding the amount and nature of non-U.S. taxes to be included in their
income. Dividends from a Fund will be considered to be from U.S. sources if an
election to pass-through non-U.S. taxes is not made. If such an election is
made, dividends from those Funds will be considered to be from non-U.S. sources
for purposes of computing the limitation of the Federal foreign tax credit.

U.S. Federal Income Taxation of Non-U.S. Shareholders

If the dividends received from a Fund or gains realized upon the
redemption, exchange or other taxable disposition of Fund shares are effectively
connected with a U.S. trade or business of the shareholder, then all such
dividends and gains will be subject to U.S. Federal income tax at the graduated
rates applicable to U.S. shareholders, although the tax may be eliminated under
the terms of an applicable U.S. income tax treaty. Non-U.S. corporate
shareholders may also be subject to the U.S. branch profits tax in respect of
those dividends and gains.

<PAGE> 58

Non-U.S. shareholders are advised to consult their tax advisers for
further information concerning the U.S. Federal and foreign tax consequences of
investing in the Trust.

DIVIDENDS AND DISTRIBUTIONS

Dividends for each Fund are derived from the net investment of its
corresponding Portfolio, which flows from the interest that such Portfolio earns
on the money market and other instruments it holds. Dividends on each share are
determined in the same manner and are paid in the same amount, regardless of
class, except for such differences as are attributable to differential class
expenses.

Dividends will be declared daily and paid monthly with respect to shares
of each Fund. Generally, investors will receive dividends on shares from (and
including) the day upon which their purchase is effective to (but not including)
the day upon which their redemption is effective. See "How to Buy Five Arrows
Service Shares" and "How to Redeem Five Arrows Service Shares."

Dividends from each Fund are automatically reinvested in additional
shares of that Fund at net asset value.

PERFORMANCE

U.S. Dollar Fund

All Other Funds

<PAGE> 59

GENERAL INFORMATION

Organization

Shares issued by the Funds have no preemptive, conversion or
subscription rights. Shareholders of a Fund have equal and exclusive rights to
dividends and distributions declared by that Fund and to the net assets of that
Fund upon liquidation or dissolution, except such differences as are
attributable to differential class expenses. Voting rights are not cumulative,
so that the holders of more than 50% of the shares voting in any election of
Trustees can, if they choose to do so, elect all of the Trustees. All shares
when issued in accordance with the terms of this Prospectus will be fully paid
and nonassessable.

<PAGE> 60

they wish to communicate with other shareholders with a view to obtaining
signatures to request a meeting, and such application is accompanied by a form
of communication and request which they wish to transmit, the Trustees shall
within five (5) Trust Business Days after receipt of such application either
afford to such applicants access to a list of the names and addresses of all
shareholders as recorded on the books of the Trust; or inform such applicants as
to the approximate number of shareholders of record and the approximate cost of
mailing to them the proposed communication or form of request.

The Portfolios, in which all the Investable Assets of the Funds are
invested, are series of the Portfolio Trust, which is an open-end management
investment company. The Portfolio Trust's Declaration of Trust provides that the
Portfolio Trust may establish and designate separate series of the Portfolio
Trust. The Portfolio Trust has established four series and may establish
additional series at any time. The Portfolio Trust's Declaration of Trust also
provides that the Funds and other entities investing in the Portfolios (e.g.,
other investment companies, insurance company separate accounts and common and
commingled trust funds) will each be liable for all obligations of the
Portfolios in which they invest. However, the risk of the Funds incurring
financial loss on account of such liability is limited to circumstances in which
both inadequate insurance existed and the Portfolios themselves were unable to
meet their obligations. Accordingly, the Trustees of the Trust, believe that
neither the Funds nor their shareholders will be adversely affected by reason of
the Funds investing in the Portfolios. No series of the Portfolio Trust has any
preference over any other series.

Inquiries concerning the Funds should be made by contacting the
Administrator at the address stated on the cover of this Prospectus or by
telephoning 1-800-499-3603.

<PAGE> 61

Rothschild Five Arrows Currency Trust
Statement of Additional Information

_____________, 1996

Rothschild Five Arrows Currency Trust (the "Trust") is an open-end
management investment company designed to offer four separate Funds (the
"Funds"): the U.S. Dollar Fund, which is diversified, and the Pound Sterling
Fund, the Deutschemark Fund, and the Canadian Dollar Fund, which are not
diversified. Each Fund is described in the Trust's Prospectus dated ________,
1996. This Statement of Additional Information supplements and should be read in
conjunction with the Prospectus as it may be revised from time to time. To
obtain a copy of the Prospectus, please write to the Trust at 3435 Stelzer Road,
Columbus, Ohio 43219-3035, or call Rothschild Distributors, Inc. (the
"Distributor"), at 1-800-824-3863.

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.

<PAGE> 62

TABLE OF CONTENTS

ADDITIONAL INVESTMENT POLICIES AND RESTRICTIONS............................1

MONEY MARKET INSTRUMENTS...................................................2
U.S. Dollar Portfolio.............................................2

ADDITIONAL INFORMATION CONCERNING
CERTAIN INVESTMENT TECHNIQUES FOR ALL PORTFOLIOS..................5

MANAGEMENT OF THE TRUST AND PORTFOLIO TRUST................................9

COMPENSATION OF TRUSTEES AND OFFICERS.....................................10

INVESTMENT ADVISORY, DISTRIBUTION,
AND ADMINISTRATION AGREEMENTS
AND SHAREHOLDER SERVICE PLANS....................................11

REDEMPTION OF SHARES......................................................14

CALCULATION OF NET ASSET VALUE............................................14

PERFORMANCE INFORMATION...................................................15

PORTFOLIO TRANSACTIONS....................................................18

INFORMATION ABOUT THE TRUST AND
PORTFOLIO TRUST..................................................18

CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING
AGENT, COUNSEL AND INDEPENDENT AUDITORS..........................20

ADDITIONAL INFORMATION....................................................20

INFORMATION ABOUT SECURITIES RATINGS
OF NATIONALLY RECOGNIZED STATISTICAL RATING
ORGANIZATIONS ("NRSROs").........................................21

Financial Statements
Report of Independent Auditors

<PAGE> 63

ADDITIONAL INVESTMENT POLICIES AND RESTRICTIONS

As described in the Prospectus, each Fund seeks to achieve its
investment objectives by investing all of its Investable Assets in a Portfolio
which has the same investment objectives and restrictions as that Fund.

The Trust's Prospectus describes the investment objectives of the Funds
and the Portfolios and summarizes the investment policies they will follow.
Since the investment characteristics of the Funds will correspond directly with
those of the Portfolios, the following is a discussion of the various investment
policies and restrictions of the Portfolios and should be read in conjunction
with the sections in the Trust's Prospectus entitled "Description of the Trust
and Portfolio Trust," "Investment Objectives" and "Investment Policies and
Restrictions."

All of the Portfolios' fundamental investment restrictions are set
forth below. These fundamental investment restrictions may not be changed except
by the affirmative vote of a majority of the Portfolios outstanding voting
securities as defined in the Investment Company Act of 1940, as amended (the
"1940 Act"). Under the 1940 Act, a "vote of the majority of the outstanding
voting securities" means the vote, at the annual or a special meeting of
security holders duly called, (i) of 67% or more of the voting securities
present at the meeting if the holders of more than 50% of the outstanding voting
securities are present or represented by proxy or (ii) of more than 50% of the
outstanding voting securities, whichever is less. Under these restrictions, it
is the policy of each Portfolio:

(1) not to invest in a security if the transaction would result in
the Portfolio owning more than 10% of any class of voting
securities of an issuer;

(2) not to issue senior securities, except that the Portfolio may
borrow money in accordance with Restriction 10 below;

(3) not to underwrite or participate in the marketing of securities
of other issuers;

(4) not to purchase or sell real estate in fee simple;

(5) not to invest in commodities or commodity contracts;

(6) not to make loans except that the Portfolio may purchase bonds,
debentures, notes and similar debt obligations, including money
market instruments, directly from the issuer thereof or in the
open market and may engage in repurchase transactions;

(7) not to conduct arbitrage transactions;

(8) not to invest in interests in oil, gas or other mineral
exploration or development programs (provided that the Portfolio
may invest in securities which are based, directly or
indirectly, on the credit of companies which invest in or
sponsor such programs);

(9) not to make any investment which would cause more than 25% of
the value of such Portfolio's total assets to be invested in
securities of nongovernmental issuers principally engaged in any
one industry, except that under normal market conditions each
Portfolio will invest more than 25% of its total assets in
obligations of Qualifying Banks (as defined in the Prospectus)
and further provided that in the event that the diversification
requirements of the Internal Revenue Code of 1986, as amended
(the "Internal Revenue Code") are revised so as to permit one or
more of the Portfolios to invest more than 25% of its total
assets in government obligations of the country that issues the
relevant Fund's Designated Currency, then each such Portfolio
will under normal market conditions invest more than 25% of its
total assets in such obligations;

<PAGE> 64

(10) not to borrow money except in connection with redemptions or for
temporary and emergency purposes and then not in an amount in
excess of 20% of the value of its net assets, provided that
additional investments will be suspended during any period when
borrowings exceed 5% of the Portfolio's total assets; and

(11) not to purchase securities on margin, make a short sale of any
securities or purchase or deal in puts, calls, straddles or
spreads with respect to any security, except that the Portfolio
may acquire puts in connection with enhancing the liquidity of
its securities.

The following investment restrictions may be changed by vote of a
majority of the Trustees of the Portfolio Trust. Under these restrictions, it is
the policy of each Portfolio:

(1) not to hypothecate, mortgage or pledge any of its assets except
as may be necessary in connection with permitted borrowings;

(2) not to purchase a security issued by another investment company
if, immediately after such purchase, the Portfolio would own, in
the aggregate, (i) more than 3% of the total outstanding voting
stock of such other investment company; (ii) securities issued
by such other investment company having an aggregate value in
excess of 5% of the value of the Portfolio's total assets; or
(iii) securities issued by such other investment company and all
other investment companies (other than treasury stock of the
Portfolio) having an aggregate value in excess of 10% of the
value of the Portfolio's total assets; provided, however, that
the Portfolio may purchase investment company securities without
limit for the purpose of completing a merger, consolidation or
other acquisition of assets;

(3) not to invest in companies for the purpose of exercising control
over their management;

(4) not invest more than 5% of the value of its total assets in any
issuer (other than repurchase agreements and securities issues
by a sovereign government, its agencies or instrumentalities);

(5) not to invest more than 25% of its total assets in securities
issued by a sovereign government, its agencies or
instrumentalities (other than the U.S. federal government),
provided that securities held solely as collateral for
outstanding repurchase agreements shall be excluded for purposes
of computing compliance with this restriction; and

(6) not to invest more than 25% of its total assets in repurchase
agreements with any one counterparty.

MONEY MARKET INSTRUMENTS

U.S. Dollar Portfolio
---------------------

The following describes further the money market instruments in which
the U.S. Dollar Portfolio will invest and is provided as a supplement to the
discussion appearing in the Prospectus.

<PAGE> 65

Short-Term Corporate Debt Instruments

Short-term corporate debt instruments include commercial paper (i.e.,
short-term, unsecured promissory notes) issued by corporations (including bank
holding companies) to finance short-term credit needs. Commercial paper is
usually sold on a discounted basis and has a maturity at the time of issuance
not exceeding nine months.

Short-term corporate debt instruments also include master demand notes.
Master demand notes are obligations of companies that permit an investor to
invest fluctuating amounts at varying rates of interest pursuant to arrangements
between the investor, as lender, and the companies, as borrowers. The U.S.
Dollar Portfolio will have the right, at any time, to increase the amount lent
up to the full amount provided by a note. Because the U.S. Dollar Portfolio may
also decrease the amount lent at any time, such instruments are highly liquid
and in effect have a maturity of one business day. The borrower will have the
right, at any time, to prepay up to the full amount of the amount borrowed
without penalty. Because the notes are direct lending obligations between the
U.S. Dollar Portfolio and the borrowers, they are generally not traded and there
is no secondary market. Consequently, the U.S. Dollar Portfolio's ability to
receive repayment will depend upon the borrower's ability to pay principal and
interest on the U.S. Dollar Portfolio's demand. The U.S. Dollar Portfolio will
invest only in notes that either have the ratings described below for commercial
paper or (because notes are not typically rated by credit rating agencies)
unrated notes that are issued by companies having the ratings described below
for issuers of commercial paper. The Fund does not expect that the notes will be
backed by bank letters of credit. The Investment Adviser will monitor the value
of the U.S. Dollar Portfolio's investments in commercial paper and master demand
notes, taking into account such factors as the issuer's earning power, cash flow
and other liquidity ratios.

Commercial paper investments at the time of purchase will be rated in
the highest rating category by an NRSRO, such as A-1 by Standard & Poor's
Corporation ("S&P") or Prime-1 by Moody's Investors Service, Inc. ("Moody's"),
or, if not rated, issued by companies having an outstanding debt issue rated at
least AA by S&P or Aa by Moody's or equivalent or determined to be of comparable
quality. See "Information about Securities Ratings of NRSROs" below for further
information.

Under certain limited circumstances, the U.S. Dollar Portfolio may
invest in nonconvertible corporate debt securities (e.g., bonds and debentures
which may be issued by U.S. or non-U.S. corporations) with no more than thirteen
months remaining either to the date of maturity or the date on which, under the
indenture governing the security, it may be sold back to the issuer thereof for
payment of principal and accrued interest. Corporate debt securities with a
remaining maturity of thirteen months or less are liquid (and tend to become
more liquid as their maturities lessen) and are traded as money market
securities. Such securities also tend to have considerably less market value
fluctuation than longer term issues.

Corporate debt and other securities in which the U.S. Dollar Portfolio
invests must be U.S. dollar-denominated Eligible Securities (as defined in Rule
2a-7 under the 1940 Act) that are determined to present minimal credit risks. In
general, the term "Eligible Securities" is limited to:

(i) securities with remaining maturities of 13 months or less that
are rated (or have been issued by an issuer that is rated with
respect to a class of short-term debt obligations, or any
securities within that class, that are comparable in priority
and security with the relevant security) by the requisite number
(i.e., two, if two organizations have issued ratings and one if
only one has issued a rating) of NRSROs in one of the two
highest rating categories for short-term debt obligations
(within which there may be sub-categories or gradations
indicating relative standing), or

<PAGE> 66

(ii) securities that at the time of issuance were long-term
securities (i.e., that had remaining maturities greater than 397
calendar days) but that now have remaining maturities of 397
calendar days or less and which were issued by an issuer that
has received from the requisite NRSROs a rating, with respect to
a class of short-term debt obligations (or any security within
that class) that is comparable in priority and security with the
relevant security, in one of the two highest rating categories
for short-term debt obligations (within which there may be
sub-categories or gradations indicating relative standing), or

(iii) securities which are "unrated" (as defined in Rule 2a-7) but
determined to be of comparable quality to the foregoing by the
Portfolio Trust's Board of Trustees or the Investment Adviser
under their supervision (provided that a security that at the
time of issuance was a long-term security but that has a
remaining maturity of 397 calendar days less and that is an
"unrated" security is not an "Eligible Security" if the security
has a long-term rating from any NRSRO that is not within the
NRSRO's three highest categories (within which there may be
sub-categories or gradations indicating relative standing)).

As indicated in the Prospectus, the U.S. Dollar Portfolio will further
limit its investments to Eligible Securities that are government securities and
"first tier" Eligible Securities as defined in Rule 2a-7 under the 1940 Act.

Bank Money Investments

Bank money investments include but are not limited to certificates of
deposit, bankers' acceptances and time deposits. Certificates of deposit are
generally short-term (i.e., less than one year), interest-bearing negotiable
certificates issued by commercial banks or savings and loan associations against
funds deposited in the issuing institution. A banker's acceptance is a time
draft drawn on a commercial bank by a borrower, usually in connection with an
international commercial transaction (to finance the import, export, transfer or
storage of goods). A banker's acceptance may be obtained from a domestic or
foreign bank including a U.S. branch or agency of a foreign bank. The borrower
is liable for payment as well as the bank, which unconditionally guarantees to
pay the draft at its face amount on the maturity date. Most acceptances have
maturities of six months or less and are traded in secondary markets prior to
maturity. Time deposits are nontransferable deposits made for a fixed period of
time at a stated interest rate. The U.S. Dollar Portfolio will not invest in any
bank money investment unless the investment is issued by a U.S. bank that is a
member of the Federal Deposit Insurance Corporation ("FDIC"), including any
foreign branch thereof, a U.S. branch or agency of a "foreign bank", as defined
under Rule 3a-6 of the 1940 Act, a foreign branch of a foreign bank, or a
savings bank or savings and loan association that is a member of the FDIC and
which at the date of investment has capital, surplus and undivided profits (as
of the date of its most recently published financial statements) in excess of
$100 million (a "Qualifying Bank").

U.S. branches and agencies of foreign banks are offices of foreign banks
and are not separately incorporated entities. They are chartered and regulated
either federally or under state law. U.S. federal branches or agencies of
foreign banks are chartered and regulated by the Comptroller of the Currency,
while state branches and agencies are chartered and regulated by authorities of
the respective states or the District of Columbia. U.S. branches of foreign
banks may accept deposits and thus are eligible for FDIC insurance; however, not
all such branches elect to obtain FDIC insurance. Unlike U.S. branches of
foreign banks, U.S. agencies of foreign banks may not accept deposits and thus
are not eligible for FDIC insurance. Both branches and agencies can maintain
credit balances, which are funds received by the office incidental to or arising
out of the exercise of their banking powers and can exercise other commercial
functions, such as lending activities.

U.S. Government Securities

<PAGE> 67

U.S. Government securities consist of various types of marketable
securities issued by the U.S. Treasury, i.e., bills, notes and bonds. Such
securities are direct obligations of the U.S. Government and differ mainly in
the lengths of their maturities. Treasury bills, the most frequently issued
marketable government security, have a maturity of up to one year and are issued
on a discount basis.

Government Agency Securities

Government agency securities consist of fixed income securities issued
or guaranteed by agencies and instrumentalities of the U.S. Government,
including the various types of instruments currently outstanding or which may be
offered in the future. Agencies and instrumentalities include, among others, the
Federal Housing Administration, Government National Mortgage Association
("GNMA"), Federal National Mortgage Association, Farmers Home Administration,
Export-Import Bank of the U.S., Federal Maritime Administration, General
Services Administration and Tennessee Valley Authority. Instrumentalities
include, for example, the Central Bank for Cooperatives, Federal Home Loan
Banks, Federal Farm Credit Banks, Student Loan Marketing Association, Federal
Home Loan Mortgage Corporation, Federal Intermediate Credit Banks, Federal Land
Banks and the U.S. Postal Service. The U.S. Dollar Portfolio will purchase such
securities only so long as they are backed by any of (i) the full faith and
credit of the U.S. Treasury (e.g., U.S. Treasury bills, bonds and notes and GNMA
participation certificates), (ii) the right of the issuer to borrow a limited
amount from the U.S. Treasury (e.g., securities of the Farmers Home
Administration), (iii) the discretionary authority of the U.S. Government to
purchase certain obligations of the agency or instrumentality (e.g., securities
of the Federal National Mortgage Association) or (iv) the credit of the agency
or instrumentality (e.g., securities of a Federal Home Loan Bank).

Custodial Receipts

The U.S. Portfolio may acquire, subject to the limitations described
herein, custodial receipts that evidence ownership of future interest payments,
principal payments or both on certain U.S. Treasury notes or bonds in connection
with programs sponsored by banks and brokerage firms. Such notes and bonds are
held in custody by a bank on behalf of the owners of the receipts. These
custodial receipts are known by various names, including "Treasury Receipts"
("TRs"), "Treasury Investment Growth Receipts" ("TIGRs") and "Certificates of
Accrual on Treasury Securities" (CATS"), and may not be treated as U.S.
Government securities.

ADDITIONAL INFORMATION CONCERNING
CERTAIN INVESTMENT TECHNIQUES FOR ALL PORTFOLIOS

Each Portfolio may invest in the securities or utilize the investment
techniques listed in this section:

Repurchase Agreements

A repurchase agreement is an agreement under which a Portfolio acquires
money market instruments (generally government securities, bankers' acceptances
or certificates of deposit) from a commercial bank, broker or dealer, subject to
resale to the seller at an agreed-upon price and date (normally the next
business day). The resale price reflects an agreed-upon interest rate effective
for the period the instruments are held by a Portfolio and is unrelated to the
interest rate on the instruments. The instruments acquired by a Portfolio
(including accrued interest) must have an aggregate market value in excess of
the resale price and will be held by the Custodian for such Portfolio until they
are repurchased. The Trustees of the Portfolio Trust will monitor the standards
which the Investment Adviser will use in reviewing the creditworthiness of any
party to a repurchase agreement with any of the Portfolios.

<PAGE> 68

The use of repurchase agreements involves certain risks. For example,
if the seller defaults on its obligation to repurchase the instruments acquired
by a Portfolio at a time when their market value has declined, such Portfolio
may incur a loss. If the seller becomes insolvent or subject to liquidation or
reorganization under bankruptcy or other laws, a court may determine that the
instruments acquired by such Portfolio are collateral for a loan by such
Portfolio and therefore are subject to sale by the trustee in bankruptcy.
Finally, it is possible that a Portfolio may not be able to substantiate its
interest in the instruments it acquires. While the Trustees of the Portfolio
Trust acknowledge these risks, it is expected that they can be controlled
through careful documentation and monitoring.

Illiquid Securities

No Portfolio may invest more than 10% of the value of its net assets in
securities that at the time of purchase have legal or contractual restrictions
on resale or are otherwise "illiquid". The Investment Adviser will monitor the
amount of illiquid securities in each Portfolio's portfolio, to ensure
compliance with such Portfolio's investment restrictions.

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 "1933 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 1933 Act are referred to as private placement 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 the Portfolio might be
unable to dispose of restricted or other illiquid securities promptly or at
reasonable prices and might thereby experience difficulty in satisfying
redemption requests within seven days. The Portfolio 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.

In recent years, however, a large institutional market has developed
for certain securities that are not registered under the 1933 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.

All of the Portfolios may buy or sell restricted securities in
accordance with Rule 144A under the 1933 Act ("Rule 144A Securities").
Securities may be resold pursuant to Rule 144A under certain circumstances only
to qualified institutional buyers as defined in the rule, and the markets and
trading practices for such securities are relatively new and still developing;
depending on the development of such markets, such Rule 144A Securities may be
deemed to be liquid as determined by or in accordance with methods adopted by
the Trustees of the Portfolio Trust. In all other cases, however, securities
subject to restrictions on resale will be deemed illiquid. Under such methods
the following factors are considered, among others: the frequency of trades and
quotes for the security, the number of dealers and potential purchasers in the
market, marketmaking activity, and the nature of the security and marketplace
trades. Investments in Rule 144A Securities could have the effect of increasing
the level of the relevant Portfolio's illiquidity to the extent that qualified
institutional buyers become, for a time, disinterested in purchasing such
securities. Also, the relevant Portfolio may be adversely impacted by the
possible illiquidity and subjective valuation of such securities in the absence
of a market for them.

<PAGE> 69

Concentration in Obligations of Qualifying Banks

Under normal market conditions, more than 25% of the total assets of
each Portfolio may be invested in obligations of Qualifying Banks as set forth
in the Prospectus.

Obligations of non-U.S. branches of U.S. banks and of non-U.S. banks,
such as certificates of deposit and time deposits, may be general obligations of
the parent banks in addition to the issuing branch, or may be limited by the
terms of a specific obligation and governmental regulation. Such obligations are
subject to different risks than are those of domestic U.S. banks or U.S.
branches of non-U.S. banks. These risks include foreign economic and political
developments, foreign governmental restrictions that may adversely affect
payment of principal and interest on the obligations, foreign exchange controls
and foreign withholding and other taxes on interest income. Non-U.S. branches of
U.S. banks are not necessarily subject to the same or similar regulatory
requirements that apply to U.S. banks such as mandatory reserve requirements,
loan limitations, and accounting, auditing and financial recordkeeping
requirements. In addition, less information may be publicly available about a
non-U.S. branch of a U.S. bank or about a non-U.S. bank than about a U.S. bank.

Investing in Non-U.S. Securities

Each of the Portfolios may invest in non-U.S. securities. Non-U.S.
securities markets generally are not as developed or as efficient as those in
the United States. Securities of some foreign issuers are less liquid and more
volatile than securities of comparable U.S. issuers. Similarly, volume and
liquidity in most foreign securities markets are less than in the United States
and, at times, volatility of prices can be greater than in the United States. In
addition, there may be less publicly available information about a non-U.S.
issuer, and non-U.S. issuers are not generally subject to uniform accounting and
financial reporting standards, practices and requirements comparable to those
applicable to U.S. issuers.

The value of securities purchased with and payable in one Designated
Currency will be affected favorably or unfavorably relative to other currencies
by changes in currency exchange rates and exchange control regulations.
Furthermore, some of the securities may be subject to foreign transaction taxes
which could have the effect of increasing the cost of such investments and which
would reduce the realized gain or increase the realized loss on such securities
at the time of sale. Transaction costs and custodial expenses for a portfolio of
non-U.S. securities generally are higher than for a portfolio of U.S.
securities. Interest payments from certain foreign securities may be subject to
foreign withholding taxes on interest income payable on the securities.

U.S. Government policies have in the past, through taxation and other
restrictions, discouraged certain investments abroad by U.S. investors. While no
material restrictions of that type are currently in effect, they could be
reinstituted. In an extreme case, restrictions of that type could require the
liquidation of a Portfolio (other than the U.S. Dollar Portfolio).

Floating Rate and Variable Rate Demand Notes

Each Portfolio may purchase floating rate and variable rate demand
notes and bonds. These securities may have a stated maturity in excess of one
year, but permit a holder to demand payment of principal plus accrued interest
upon a specified number of days notice. Frequently, such obligations are secured
by letters of credit or other credit support arrangements provided by banks. The
issuer has a corresponding right, after a given period, to prepay in its
discretion the outstanding principal of the obligation plus accrued interest
upon a specific number of days notice to the holders. The interest rate of a
floating rate instrument may be based on a known lending rate, such as a bank's
prime rate, and is reset whenever such rate is adjusted. The interest rate on a
variable rate demand note is reset at specified intervals at a market rate.

<PAGE> 70

Investing in Supranational Organizations

The supranational organizations in which each Portfolio may invest
include, without limitation, the organizations listed below:

The International Bank for Reconstruction and Development (the "World
Bank"), which was established in 1945, is an international institution having as
members a large portion of the world's sovereign governments. The principal
purposes of the World Bank are: (i) to assist in the reconstruction and
development of its member countries by facilitating the investment of capital
for productive purposes, thereby promoting the long-range growth of
international trade and the improvement of standards of living; (ii) to promote
private foreign investment by guarantees of and participation in loans and other
investments made by private investors; and (iii) when private capital is not
available on reasonable terms, to make loans for productive purposes out of its
own resources or funds borrowed by it.

The Inter-American Development Bank, which became effective in 1959,
has a membership comprised primarily of sovereign governments located in the
western hemisphere as well as a number of countries from outside that region.
The principal purposes of the Bank are: (i) to promote the investment of public
and private capital for development purposes in the Americas; (ii) to utilize
its own capital, funds raised by it in financial markets, and other available
resources, for financing development of member countries, giving priority to
those loans and guarantees that will contribute most effectively to their
economic growth; (iii) to encourage private investment in projects, enterprises,
and activities contributing to economic development and to supplement private
investment when private capital is not available on reasonable terms and
conditions; (iv) to cooperate with member countries to orient their development
policies toward a better utilization of their resources, in a manner consistent
with objectives of making their economics more complimentary, and of fostering
orderly growth of their foreign trade; and (v) to provide technical assistance
for preparation, financing and implementation of development plans and projects,
including the study of priorities and the formulation of specific project
proposals.

The Asian Development Bank was established in 1965 and has a membership
comprised primarily of sovereign governments located in Asia, as well as a
number of nations outside the region. The purposes of the Bank are: (i) to
encourage regional economic cooperation in the Asian and Pacific region and (ii)
to encourage economic growth of its developing members by lending funds,
promoting investment and providing technical assistance with special regard to
the needs of smaller or less developed countries.

The European Bank for Reconstruction and Development was established in
1991 and has a membership comprised primarily of sovereign governments, the
European Union and the European Investment Bank. The purpose of the Bank is to
provide project specific direct financing to foster the economic and democratic
transition process and to promote private and entrepreneurial initiatives in
those countries through the provision of loans, equity investments, guarantees
and technical cooperation.

<PAGE> 71

MANAGEMENT OF THE TRUST AND PORTFOLIO TRUST

The Trustees and executive officers of the Trust are listed below. The
Trustees of the Portfolio Trust are identical to the Trustees of the Trust. The
officers of the Portfolio Trust hold the same offices with the Portfolio Trust
as with the Trust. All executive officers of the Trust and the Portfolio Trust
are affiliated persons of Rothschild International Asset Management Limited,
(the "Investment Adviser").

The Trustees and executive officers of the Trust and Portfolio Trust,
together with information as to their principal business occupations during the
last five years, are shown below. Each Trustee who is an "interested person" (as
defined in the 1940 Act) of the Trust or Portfolio Trust is indicated by an
asterisk.

PRINCIPAL
OCCUPATION
NAME, ADDRESS AND POSITION HELD DURING PAST
DATE OF BIRTH WITH TRUST 5 YEARS
- ------------- ---------- -------

Peter B. Collacott* President and Trustee Managing Director,
Five Arrows House Rothschild, Asset
St. Swithin's Lane Management Limited;
London EC4N 8NR U.K. Director, International
Born June 19, 1944 Biotechnology Trust

Paul R. Freeman* Senior Vice President Director, Rothschild Asset
Five Arrows House and Trustee Management Limited
St. Swithin's Lane (July 1994 to date).
London EC4N 8NR U.K. Director,
Born September 30, 1955 Henderson Touche
Remnant Unit Trust
Management Limited
(Oct. 1993 - July 1994)
Prior to October 1993,
Company Secretary and
Head of Product
Development for GT
Management PLC
(Dec. 1988 - Oct. 1993)

Alan T. Jeffers Trustee Private Investor;
51 Clearwater Cove Consultant
Old Dunleary Road to Rothschild Asset
Dan Laoghaire, Management Limited from
County Dublin, Ireland [dates to come]
Born August 17, 1938 [Various non-executive
directorships -- Public
company directorships
to be listed]

Bryan J. Walsh Trustee President and Managing
11 Lower Tuckahoe Road West Directory of Salisbury
Richmond, Virginia Research 1991-date
23233-6129 U.S.A.
Born _______________

Roger M. Kubarych Trustee General Manager - Henry
65 East 55th Street Kaufman & Company Inc.
New York, NY 10022 overseeing the firm's
Born ______________ international money
management activities and
financial and economic
consulting services

<PAGE> 72

COMPENSATION OF TRUSTEES AND OFFICERS

Each of the Trust and the Portfolio Trust pays no compensation to the
Trustees of the Trust or Portfolio Trust affiliated with the Administrator, the
Distributor or the Investment Adviser, respectively, or the Trust's and
Portfolio Trust's officers.

The following sets forth an estimate of the compensation to be paid to
the Trust's Trustees for the period ending October 31, 1997.

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

Aggregate Aggregate Aggregate Aggregate Total
Compensation Compensation Compensation Compensation Compensation
Name of from U.S. from British Pound from Deutschemark from Canadian from Fund
Trustee Dollar Portfolio Sterling Portfolio Portfolio Dollar Portfolio Complex (a)(b)
------- ---------------- ------------------ --------- ---------------- --------------

<S> <C> <C> <C> <C> <C>
Bryan J. Walsh $12,000 $12,000 $3,000 $3,000 $30,000

Roger M. Kubarych $10,000 $10,000 $2,500 $2,500 $25,000

Alan T. Jeffers $10,000 $10,000 $2,500 $2,500 $25,000

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

<FN>

(a) Currently the U.S. Dollar Fund, the Pound Sterling Fund, the
Deutschemark Fund and the Canadian Dollar Fund and their corresponding
Portfolios are the only funds in the fund complex. No other
compensation, including pension or other retirement benefits, is paid to
the Trustees by the fund complex. The Trustees receive no compensation
for their service as Trustees of the Trust.

(b) Trustees fees will be allocated among the Portfolios in proportion to
their respective net asset values. The allocation shown reflects an
estimate of the relative net asset values of the Portfolios for the
period ending October 31, 1997.
</TABLE>

As of the approximate time of this Statement of Additional Information,
an affiliated person of the Investment Adviser was the beneficial owner of all
or a substantial amount of the outstanding Five Arrows and Five Arrows Service
shares of the Funds and may be deemed to be in control of the Funds as control
is defined in the 1940 Act. Such owner may acquire additional shares of the
Funds. Although sales of the Funds' shares to other investors will reduce its
percentage ownership, so long as 25% of a class of shares is so owned, the owner
will be presumed to be in control of such class of shares for purposes of voting
on certain matters submitted to a vote of shareholders.

INVESTMENT ADVISORY, DISTRIBUTION,
AND ADMINISTRATION AGREEMENTS
AND SHAREHOLDER SERVICE PLANS

The following information supplements and should be read in conjunction
with the section in the Trust's Prospectus entitled "Management."

Investment Adviser of the Portfolio Trust

The Investment Adviser serves as the investment adviser to the
Portfolio pursuant to a written investment advisory agreement with the Portfolio
Trust (the "Master Investment Advisory Agreement"). The Investment Adviser is a
British corporation organized in 1975 and is registered under the U.S.
Investment Advisers Act of 1940.

<PAGE> 73

The Investment Adviser is an indirect, wholly-owned subsidiary of
Rothschild Continuation Holdings AG, a Swiss corporation. Twenty percent (20%)
of the equity of such entity is held by Sun Alliance Group Limited, a British
insurance company. The remainder of the equity is held by Rothschild Concordia
A.G., a holding company controlled by members of the Rothschild family.

Certain services provided by the Investment Adviser under the Master
Investment Advisory Agreement are described in the Prospectus. These services
are provided without reimbursement by the Portfolios for any costs incurred.
Under the Master Investment Advisory Agreement, the Investment Adviser is paid a
fee based upon a percentage of the Portfolios' average daily net asset value
computed as described in the Prospectus. The rate and time at which the fee is
paid is described in the Prospectus.

Pursuant to the Master Investment Advisory Agreement, the Portfolios
bear expenses of their operations other than those incurred by the Investment
Adviser pursuant to the Master Investment Advisory Agreement. Among other
expenses, the Portfolios will pay share pricing expenses; custodian fees and
expenses; administration fees; legal and auditing fees and expenses, expenses of
investor reports to be provided to existing shareholders; registration and
reporting fees and expenses; and Trustees' fees and expenses.

Unless terminated as provided below, the Master Investment Advisory
Agreement continues in full force and effect until ______________, 1998 and for
successive periods of one year thereafter, but only so long as each such
continuance is approved annually (i) by either the Trustees of the Portfolio
Trust or by the "vote of a majority of the outstanding voting securities" of
each Portfolio, and, in either event (ii) by vote of a majority of the Trustees
of the Portfolio Trust who are not parties to the Master Investment Advisory
Agreement or "interested persons" (as defined int he 1940 Act) of any such
party, cast in person at a meeting called for the purpose of voting on such
approval. The Master Investment Advisory Agreement may be terminated at any time
without the payment of any penalty by vote of the Trustees of the Portfolio
Trust or by the "vote of a majority of the outstanding voting securities" of the
Portfolio or by the Investment Adviser, on sixty days' written notice to the
other parties. The Master Investment Advisory Agreement terminates in the event
of its assignment as defined in the 1940 Act.

In an attempt to avoid any potential conflict with portfolio
transactions for the Portfolios, the Investment Adviser, the Trust and the
Portfolio Trust have each adopted extensive restrictions on personal securities
trading by personnel of the Investment Adviser and its affiliates. These
restrictions are a continuation of the basic principle that the interests of the
Fund and its shareholders, and the Portfolio and its investors, come before
those of the Investment Adviser and its employees.

The Master Investment Advisory Agreement also provides that, with
respect to the Portfolio to which it pertains, the Investment Adviser shall not
be liable for any mistake of judgment or in any event whatsoever in the
performance of its duties to the Portfolio Trust, except for liability resulting
from willful misfeasance, bad faith or gross negligence in the performance of
the Investment Adviser's duties or by reason of reckless disregard of its
obligations and duties under the Master Investment Advisory Agreement.

The Master Investment Advisory Agreement provides that the Investment
Adviser may render advisory services to others.

In addition to receiving its advisory fee, the Investment Adviser may
also act and be compensated as investment manager for its clients with respect
to assets which are invested in a Portfolio. In some instances the Investment
Adviser may elect to credit against any investment management fee received from
a client who is also a shareholder in the Portfolio Trust an amount equal to all
or a portion of the fees received by the Investment Adviser or any affiliate of
the Investment Adviser from a Portfolio with respect to the client's assets
invested in the Portfolio.

<PAGE> 74

Distributor of the Trust

Rothschild Distributors, Inc. (the "Distributor"), an affiliate of the
Administrator serves as the Trust's exclusive principal underwriter and holds
itself available to receive purchase orders for the Funds' shares. In that
capacity, the Distributor has been granted the right, as agent of the Trust, to
solicit and accept orders for the purchase of the Funds' shares in accordance
with the terms of the Distribution Agreement between the Trust and the
Distributor. The Distribution Agreement shall continue in effect with respect to
each Fund until two years after its execution and for successive periods of one
year thereafter only if it is approved at least annually thereafter (i) by a
vote of the holders of a majority of the relevant Fund's outstanding shares or
by the Trustees of the Trust or (ii) by a vote of a majority of the Trustees of
the Trust who are not "interested persons" (as defined by the 1940 Act) of the
parties to the Distribution Agreement, cast in person at a meeting called for
the purpose of voting on such approval. The Distribution Agreement will
terminate automatically if assigned by either party thereto and is terminable at
any time without penalty by a vote of a majority of the Trustees of the Trust, a
vote of a majority of the Trustees who are not "interested persons" of the
Trust, or by a vote of the holders of a majority of the relevant Fund's
outstanding shares, in any case without payment of any penalty on not more than
60 days' written notice to the other party.

Administrator

BISYS Fund Services Limited Partnership, 3435 Stelzer Road, Columbus,
OH 43219-3035 serves as the administrator to the Funds and the Portfolios (the
"Administrator") pursuant to written administration agreements with the Trust on
behalf of the Funds and the Portfolio Trust on behalf of the Portfolios. Certain
services provided by the Administrator under these administration agreements are
described in the Prospectus. For the services provided to the Funds, each Fund
pays its pro-rata share of an annual fee to the Administrator, computed daily
and payable monthly, of .10% of the Fund's average net assets.

The administration agreement relating to the Funds provides that if the
total expenses of the Funds in any fiscal year exceed the most restrictive
expense limitation applicable to the Funds in any state in which shares of the
Funds are then qualified for sale, the compensation due the Administrator shall
be reduced by the amount of the excess, by a reduction or refund thereof at the
time such compensation is payable after the end of each calendar month during
the fiscal year, subject to readjustment during the year. Currently, the most
restrictive state expense limitation provision limits the Fund's expenses to
2 1/2% of the first $30 million of average net assets, 2% of the next $70
million of such net assets and 1 1/2% of such net assets in excess of $100
million.

The Administrator provides the Portfolio Trust with office space for
managing its affairs and with certain clerical services and facilities. The
Administrator currently does not receive a fee for these services.

Shareholder Service Plan

Each Fund has adopted a shareholder service plan (the "Shareholder
Service Plan") with respect to its Five Arrows Service shares which will
authorize the Funds to compensate certain institutions ("Service Organizations")
for providing certain account administration services to their customers who are
beneficial owners of such shares. Pursuant to the Shareholder Service Plan, each
Fund will enter into agreements with Service Organizations which purchase Five
Arrows Service shares on behalf of their customers ("Service Agreements"). Under
such Service Agreements the Service Organizations may: (a) aggregate and process
purchase, exchange and redemption requests from customers and place net
purchase, exchange and redemption orders with the Distributor; (b) provide
clients with a service that invests the assets of their accounts in Five Arrows
Service shares pursuant to specific or pre-authorized instructions; (c) process
dividend payments from the Funds on behalf of clients and assist clients in
changing dividend options, account designations and addresses; (d) provide and
maintain elective services such as check writing and wire transfer services; (e)
act as sole shareholder of record and nominee for clients; (f) maintain account
records for clients; (g) issue

<PAGE> 75

confirmations of transactions; (h) provide subaccounting with respect to Five
Arrows Service shares beneficially owned by clients or the information to the
Funds necessary for subaccounting; (i) if required by law, forward shareholder
communications from the Funds (such as proxies, shareholder reports, annual and
semi-annual financial statements and dividend, distribution and tax notices) to
clients; and (j) provide other similar administrative services.

As compensation for such services, each Fund will pay each Service
Organization a service fee at an annual rate of up to .25% of the average daily
net asset value of the Five Arrows Service shares of each Fund attributable to
or held in the name of such Service Organization.

Conflict of interest restrictions (including the Employee Retirement
Income Security Act of 1974) may apply to a Service Organization's receipt of
compensation paid by the Funds in connection with the investment of fiduciary
funds in Five Arrows Service shares. Service Organizations, including banks
regulated by the Comptroller of the Currency, the Federal Reserve Board or the
Federal Deposit Insurance Corporation, and investment advisers and other money
managers subject to the jurisdiction of the Securities and Exchange Commission,
the Department of Labor or State Securities Commissions, are urged to consult
legal advisers before investing fiduciary assets in Five Arrows Service shares.
In addition, under some state securities laws, banks and other financial
institutions purchasing Five Arrows Service shares on behalf of their customers
may be required to register as dealers.

The Trustees of the Trust, including a majority of the Trustees who are
not interested persons of the Trust and who have no direct or indirect financial
interest in the operation of such Plan or the related Service Agreements, voted
to adopt the Shareholder Service Plan and Service Agreements at a meeting called
for the purpose of voting on such Shareholder Service Plan and Service
Agreements on ________, 1996. The Shareholder Service Plan and Service
Agreements will remain in effect until ______, 1998 and will continue in effect
thereafter only if such continuance is specifically approved annually by a vote
of the Trustees in the manner described above. All material amendments of the
Shareholder Service Plan must also be approved by the Trustees in the manner
described above. The Shareholder Service Plan may be terminated at any time by a
majority of the Trustees as described above or by vote of a majority of the
outstanding Five Arrows Service shares of the affected Fund. The Service
Agreements may be terminated at any time, without payment of any penalty, by
vote of a majority of the Trustees as described above or by a vote of a majority
of the outstanding Five Arrows Service shares of the affected Fund on not more
than 60 days' written notice to any other party to the Service Agreements. The
Service Agreements shall terminate automatically if assigned. So long as the
Shareholder Service Plan is in effect, the selection and nomination of those
Trustees who are not interested persons shall be committed to the discretion of
the non-interested members of the Board of Trustees. The Trustees have
determined that, in their judgment, there is a reasonable likelihood that the
Shareholder Service Plan will benefit the Funds and holders of Five Arrows
Service shares of such Funds. In the Trustees' quarterly review of the
Shareholder Service Plan and Service Agreements, they will consider their
continued appropriateness and the level of compensation provided therein.

REDEMPTION OF SHARES

Detailed information on redemption of shares is included in the
Prospectus in the section entitled "How to Redeem Shares."

The Trust intends to pay in cash in the Designated Currency of the Fund
from which shares are redeemed for all Fund shares redeemed, but under certain
conditions, the Trust may make payment wholly or partly in portfolio securities
from the Portfolio, in conformity to the applicable rule of the SEC. Portfolio
securities paid upon redemption of Fund shares will be valued at their then
current market value. The Trust, on behalf of each of its series, has elected to
be governed by the provisions of Rule 18f-1 under the 1940 Act

<PAGE> 76

which contains a formula for determining the minimum amount of cash which may be
paid as part of any redemption, limiting cash payments to any shareholder during
any 90-day period to the lesser of $250,000 or 1% of the Fund's net asset value
at the beginning of such period.

An investor may incur brokerage costs in converting portfolio
securities received upon redemption to cash. The Portfolio Trust has advised the
Trust that the Portfolio Trust will not redeem in-kind except in circumstances
in which the Fund is permitted to redeem in-kind or except in the event the Fund
completely withdraws its interest from the Portfolio.

CALCULATION OF NET ASSET VALUE

The net asset value of the Portfolios and of shares of the Funds is
determined by the Administrator (as agent for the Funds and the Portfolios). The
Funds and the Portfolios will only price their respective shares or interests on
Trust Business Days. A Trust Business Day is any day on which the New York Stock
Exchange (the "Exchange") is open for trading which are Mondays through Fridays
except for holidays (scheduled Exchange holidays for 1996 are New Year's Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day).

It is anticipated that each Portfolio will utilize the amortized cost
method of valuation as a reasonable means of approximating the market value of
each Portfolio's assets. With respect to the U.S. Dollar Fund, which is a "money
market fund," as defined in the 1940 Act, and its corresponding Portfolio, the
valuation of the instruments held by the U.S. Dollar Portfolio at amortized
costs is permitted in accordance with Rule 2a-7 and certain procedures
established by the Trustees of the Trust and the Portfolio thereunder. With
respect to all other Funds, which are not money market funds, and their
corresponding Portfolios, the valuation of the instruments held by those
Portfolios is consistent with a long-standing practice of many U.S. registered
investment companies to value "high-quality" debt securities with maturities of
60 days or less at amortized cost.

The amortized cost of an instrument is determined by valuing it at cost
originally and thereafter accreting any discount or amortizing any premium from
its face value at a constant rate until maturity, regardless of the effect of
fluctuating interest rates on the market value of the instrument. Although the
amortized cost method provides certainty in valuation, it may result at times in
determinations of value that are higher or lower than the price the Portfolios
would receive if the instruments were sold. Consequently, changes in the market
value of instruments held by the Portfolios during periods of rising or falling
interest rates will not be reflected either in the computation of net asset
value of the Portfolios or in the daily computation of its net investment
income.

The procedures of the Funds and the Portfolios are designed to
facilitate, to the extent reasonably possible, the maintenance of the Funds'
price per share, as computed for the purpose of the distribution and redemption
of shares, at $1.00 in the case of the U.S. Dollar Fund, at (pound)1.00 in the
case of the Pound Sterling Fund, at DM 1.00 in the case of the Deutschemark Fund
and at C$1.00 in the case of the Canadian Dollar Fund (the "Stabilized Prices").
These procedures include review of the Portfolios' holdings by the Trustees of
the Portfolio Trust and Trust, at such intervals as they may deem appropriate,
to determine whether the Portfolios' net asset values calculated by using
readily available market quotations deviates from the valuation based on
amortized cost, and, if so, whether such deviation may result in material
dilution or is otherwise unfair to existing shareholders. In the event that the
Trustees of the Portfolio Trust and Trust determine that such a deviation
exists, they will take such corrective action as they consider to be necessary
or appropriate, which action could include the sale of instruments held by the
Portfolios prior to maturity (to realize capital gains or losses); the
shortening of average portfolio maturity; withholding dividends; redemption of
shares in kind; or establishing a net asset value per share by using readily
available market quotations.

<PAGE> 77

Since the net investment income of each Fund is declared as a dividend
each time such income is determined, the net asset value per share of each Fund
remains at its respective Stabilized Price immediately after such determination
and dividend declaration. It is expected that each Fund's net investment income
will be positive each time it is determined. However, if because of realized
losses on sales of portfolio investments, a sudden rise in interest rates,
default by an issuer of a portfolio security, or for any other reason the net
investment income of each Portfolio determined at any time is a negative amount,
such Portfolio will offset such amount allocable to each then shareholder's
account from dividends accrued with respect to such account. If at the time of
payment of a dividend (either at the regular dividend payment date, or, in the
case of an interest holder who is withdrawing all or substantially all of such
shareholder's interest in an account, at the time of redemption), such negative
amount exceeds a shareholder's accrued dividends, the relevant Portfolio will
reduce the interest by treating the shareholder as having contributed to the
capital of that Portfolio that amount of its interest which represents the
amount of the excess. Each shareholder is deemed to have agreed to such
contribution in these circumstances by his or her investment in the relevant
Fund.

Should the Portfolios incur or anticipate any unusual or unexpected
significant expense, loss or depreciation which would affect disproportionately
the Funds' net investment income for a particular period, the Trustees of the
Portfolio Trust and Trust would at that time consider whether to adhere to its
daily dividend policy or to revise it in the light of the then prevailing
circumstances. Such expenses, losses or depreciation may nevertheless result in
a shareholder receiving no dividends for the period during which the shares are
held and in receiving upon redemption a price per share lower than the purchase
price of such shares.

PERFORMANCE INFORMATION

Performance will vary from time to time and past results are not
necessarily representative of future results. Investors should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described below, may not provide a basis
for comparison with other investments or other investment companies using a
different method of calculating performance.

The U.S. Dollar Fund

The U.S. Dollar Fund may provide current annualized and effective
annualized yield quotations based on its daily dividends. These quotations may
from time to time be used in advertisements, shareholder reports or other
communications to shareholders.

Any current yield quotation of the U.S. Dollar Fund which is used in
such a manner as to be subject to the provisions of Rule 482(d) under the
Securities Act of 1933, as amended, shall consist of an annualized historical
yield, carried at least to the nearest hundredth of one percent on a specific
seven calendar day period and shall be calculated by dividing the net change
during the seven day period in the value of an account having a balance of one
share at the beginning of the period by the value of the account at the
beginning of the period, and multiplying the quotient by 365/7. For this
purpose, the net change in account value would reflect the value of additional
shares purchased with dividends declared on the original share and dividends
declared on both the original share and any such additional shares, but would
not reflect any realized gains or losses from the sale of securities or any
unrealized appreciation or depreciation on portfolio securities. In addition,
any effective annualized yield quotation used by the Trust shall be calculated
by compounding the current yield quotation for such period by adding 1 to the
product, raising the sum to a power equal to 365/7, and subtracting 1 from the
result. A one day yield quotation is determined by taking one-seventh of the
most recent calculated seven day yield.

<PAGE> 78

Although published yield information is useful to investors in
reviewing the U.S. Dollar Fund's performance, investors should be aware that the
U.S. Dollar Fund's yield fluctuates from day to day and that a Fund's yield for
any given period is not an indication or representation by the Trust of future
yields or rates of return on the U.S. Dollar Fund's shares. The yield of the
U.S. Dollar Fund is not fixed or guaranteed. Accordingly, the U.S. Dollar Fund's
yield information may not necessarily be used to compare its shares with
investment alternatives which, like money market instruments or bank accounts,
may provide a fixed rate of interest. In addition, investments in the Trust are
not insured or guaranteed, so the U.S. Dollar Fund's yield information may not
necessarily be used to compare the U.S. Dollar Fund with investment alternatives
which are insured or guaranteed.

All Other Funds

Each Fund, other than the U.S. Dollar Fund, may provide Total Return
and Current Yield quotations, as described below.

A Fund's "Total Return," as referred to in the Prospectus (see
Performance") is calculated as follows: Total Return ("T") is computed by using
the value at the end of the period ("V") of a hypothetical initial investment of
$1,000 ("P") over a period of years ("n") according to the following formula as
required by the SEC: P(1+T)n=EV (the ending redeemable value of initial
investment). The following assumptions will be reflected in computations made in
accordance with this formula: (1) a deduction of the maximum front-end sales
charge, if any, from the initial investment of $1,000; (2) reinvestment of
dividends and distributions at net asset value on the reinvestment date
determined by the Trust's Board of Trustees; (3) a complete redemption at the
end of any period illustrated, and (4) deduction of any applicable CDSC.

Current yield ("YIELD") is computed by dividing the difference between
dividends and interest earned during a one-month period ("a") and expenses
accrued for the period (net of reimbursements) ("b") by the product of the
average daily number of shares outstanding during the period that were entitled
to receive dividends ("c") and the maximum offering price per share on the last
day of the period ("d") according to the following formula as required by the
SEC:

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

To the extent consistent with applicable law, each Fund may provide
quotations of other measures of historical investment performance, including
seven day yield information calculated in the manner described above with
respect to the U.S. Dollar Fund.

Each Fund's investment results will vary from time to time depending
upon market conditions, the composition of the Fund's Corresponding Portfolio's
portfolio and operating expenses of the Fund, so that current or past yield or
total return should not be considered representations of what an investment in a
Fund may earn in any future period. These factors and possible differences in
the methods used in calculating investment results should be considered when
comparing a Fund's investment results with those published for other investment
companies and other investment vehicles. A Fund's results also should be
considered relative to the risks associated with such Fund's investment
objectives and policies. Each Fund and the Distributor may from time to time
compare the Funds with the following:

(1) Various Salomon Brothers World Bond Indices, which measure the total
return performance of high-quality securities in major sections of the worldwide
bond markets.

(2) The Shearson Lehman Government Corporate Bond Index, which is a
comprehensive measure of all

16
<PAGE> 79

public obligations of the U.S. Treasury (excluding flower bonds and foreign
targeted issues), all publicly issued debt of agencies of the U.S. government
(excluding mortgage backed securities), and all public, fixed rate,
non-convertible investment grade domestic corporate debt rated at least Aa by
Moody's or AA by S&P, or, in the case of bonds not rated by Moody's or S&P, BBB
by Fitch Investors Service (excluding Collateralized Mortgage Obligations).

(3) Average of Savings Accounts, which is a measure of all kinds of
savings deposits, including longer-term certificates (based on figures supplied
by the U.S. League of Savings Institutions). Savings accounts offer a guaranteed
rate of return on principal, but no opportunity for capital growth. During a
portion of the period, the maximum rates on some savings deposits were fixed by
law.

(4) The Consumer Price Index, which is a measure of the average change
in prices over time in a fixed market basket of goods and services (e.g., food,
clothing, shelter, fuels, transportation fares, charges for doctors' and
dentists' services, prescription medicines, and other goods and services that
people buy for day-to-day living).

(5) Data and mutual fund rankings and comparisons published and prepared
by Lipper Analytical Data Services, Inc. ("Lipper"), Morningstar Inc.
("Morningstar"), Micropal, Inc. ("Micropal"), CDA Investment Technologies, Inc.
("CDA"), Wiesenberger Investment Company Services ("Wiesenberger") and/or other
companies that rank or compare mutual funds by overall performance, investment
objectives, assets, expense levels, periods of existence and/or other factors.
In this regard, each Fund may be compared to its "peer group" as defined by
Lipper, Morningstar, Micropal, CDA, Wiesenberger and/or other firms, as
applicable or to specific funds or groups of funds within or without such peer
group.

(6) Bear Stearns Foreign Bond Index, which provides simple average
returns for individual countries and a GNP-weighted index, beginning in 1975.
The returns are broken down by local market and currency.

(7) Ibbottson Associates International Bond Index, which provides a
detailed breakdown of local market and currency returns since 1960.

Indices prepared by the research departments of such financial
organizations as Salomon Brothers, Inc.; Merrill Lynch, Pierce, Fenner & Smith,
Inc.; Bear Stearns & Co., Inc.; Morgan Stanley; and Ibbottson Associates may be
used, as well as information provided by the Federal Reserve Board. In addition,
performance rankings and ratings reported periodically in national financial
publications, including but not limited to Money Magazine, Forbes, Business
Week, The Wall Street Journal and Barrons's may also be used.

PORTFOLIO TRANSACTIONS

Portfolio securities are ordinarily purchased directly from the issuer
or from an underwriter or a market maker for the securities. Usually no
brokerage commissions are paid by any Portfolio for such purchases. Purchases
from underwriters of Portfolio securities include a concession paid by the
issuer to the underwriter and the purchase price paid to market makers for the
securities may include the spread between the bid and asked price.

A Portfolio may not always pay the lowest commission or spread
available. Rather, in determining the amount of commission paid in connection
with Portfolio transactions, the Investment Adviser takes into account such
factors as size of the order, difficulty of execution, efficiency of the
executing broker's facilities (including the services described below) and any
risk assumed by the executing broker. The Investment Adviser may also take into
account payments made by brokers effecting transactions with or for a Portfolio
(i) to the Portfolio or (ii) to other persons on behalf of the Portfolio for
services provided to it for which it would be obligated to pay.

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<PAGE> 80

Investment decisions for the Portfolios will be made independently from
those for any other account or investment company that is or may in the future
become managed by the Investment Adviser or its affiliates. If, however, a
Portfolio and other investment companies or accounts managed by the Investment
Adviser are contemporaneously engaged in the purchase or sale of the same
security, the transactions may be averaged as to price and allocated equitably
to each account. In some cases, this policy might adversely affect the price
paid or received by a Portfolio or the size of the position obtainable for the
Portfolio. In addition, when purchases or sales of the same security for a
Portfolio and for other investment companies and accounts managed by the
Investment Adviser occur contemporaneously, the purchase or sale orders may be
aggregated in order to obtain any price advantages available to large
denomination purchases or sales.

No portfolio transactions are executed with the Investment Adviser or
any of its affiliates.

INFORMATION ABOUT THE TRUST AND
PORTFOLIO TRUST

The Funds and Their Shares

The Funds are investment series of the Trust, a newly-formed
unincorporated business trust organized under the laws of the State of Delaware
pursuant to an Agreement and Declaration of Trust dated _____________, 1996.
Under the Agreement and Declaration of Trust of the Trust, the Trustees of the
Trust have authority to issue an unlimited number of shares of beneficial
interest, par value $.0001 per share, of the Funds. Each share represents an
equal proportionate interest in the relevant Fund with each other share and is
entitled to such dividends and distributions as are declared by the Trustees.
Upon any liquidation of the Funds, shareholders are entitled to share pro rata
in the net assets available for distribution.

All Fund shares have equal rights with regard to voting, and
shareholders of the Fund have the right to vote as a separate class with respect
to matters as to which their interests are not identical to those of
shareholders of other classes of the Trust, including any change of investment
policy requiring the approval of shareholders.

Except as described below, whenever the Trust is requested to vote on a
fundamental policy of or matters pertaining to the Portfolios, the Trust will
hold a meeting of the Funds' shareholders and will cast its vote proportionately
as instructed by the Funds' shareholders. Fund shareholders who do not vote will
not affect the Trust's votes at the Portfolios meeting. The percentage of the
Trust's votes representing Fund shareholders not voting will be voted by the
Trustees of the Trust in the same proportion as the Fund shareholders who do, in
fact, vote. Subject to applicable statutory and regulatory requirements, the
Funds would not request a vote of their shareholders with respect to (a) any
proposal relating to the Portfolios, which proposal, if made with respect to the
Funds, would not require the vote of the shareholders of the Funds, or (b) any
proposal with respect to the Portfolios that is identical in all material
respects to a proposal that has previously been approved by shareholders of the
Funds. Any proposal submitted to holders in the Portfolios, and that is not
required to be voted on by shareholders of the Funds, would nonetheless be voted
on by the Trustees of the Trust.

The assets received by the Trust from the issue and sale of shares of
each Fund, and all income, earnings, profits and proceeds thereof, subject only
to the rights of creditors, are especially allocated to that Fund and constitute
the underlying assets of such Fund. The underlying assets of each Fund are
required to be segregated on the books of account and are to be charged with the
expenses of the Trust. Any general expenses of the Trust not readily
identifiable as belonging to a particular Fund shall be allocated by or under
the direction of the Trustees in such a manner as the Trustees determine to be
fair and equitable, taking into consideration, among other things, the nature
and the type of expense and the relative size of the Funds.

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<PAGE> 81

Each share of a Fund has equal dividend, redemption and liquidation
rights with other shares of that Fund and when issued is fully paid and
non-assessable. Under the Trust's Agreement and Declaration of Trust
("Declaration of Trust"), no annual or regular meeting of shareholders is
required. Thus, there will ordinarily be no annual shareholders meeting unless
otherwise required by the 1940 Act. The initial shareholder elected the initial
Board of Trustees on _____, 1996. Thereafter, the Board will be a
self-perpetuating body until fewer than 50% of the Trustees serving as such are
Trustees who were elected by shareholders. At that time, another meeting of
shareholders will be called to elect Trustees. Under the Declaration of Trust,
any Trustee may be removed by votes of two-thirds of the outstanding Trust
shares, and holders of ten percent or more of the outstanding shares of the
Trust can require the Trustees to call a meeting of shareholders for the purpose
of the removal of one or more Trustees. Whenever ten or more shareholders of the
Trust who have been such for at least six months, and who hold in the aggregate
shares having a net asset value of at least $25,000 or which represent at least
1% of the outstanding shares, whichever is less, apply to the Trustees in
writing stating that they wish to communicate with other shareholders with a
view to obtaining signatures to request a meeting, and such application is
accompanied by a form of communication and request which they wish to transmit,
the Trustees shall within five (5) Trust Business Days after receipt of such
application either (1) afford to such applicants access to a list of the names
and addresses of all shareholders as recorded on the books of the Trust; or (2)
inform such applicants as to the approximate number of shareholders of record
and the approximate cost of mailing to them the proposed communication or form
of request.

Shares do not have cumulative voting rights, which means that in
situations in which shareholders elect Trustees, holders of more than 50% of the
shares voting for the election of Trustees can elect 100% of the Trust's
Trustees, and the holders of less than 50% of the shares voting for the election
of Trustees will not be able to elect any person as a Trustee.

The Portfolio and its Investors

The Portfolios are series of the International Currency Fund (the
"Portfolio Trust"), which is a newly-formed business trust and, like the Trust,
an open-end management investment company under the 1940 Act. The Portfolio
Trust was organized as a Delaware business trust under the laws of the State of
Delaware on __________________, 1996.

Interests in the Portfolios have no preemptive or conversion rights, and
are fully paid and non-assessable, except as set forth below. The Portfolios
normally will not hold meetings of holders of such interests except as required
under the 1940 Act. The Portfolios would be required to hold a meeting of
holders in the event that at any time less than a majority of its Trustees
holding office had been elected by holders. The Trustees of the Portfolio Trust
continue to hold office until their successors are elected and have qualified. A
Trustee of the Portfolio Trust may be removed upon a majority vote of the
interests held by holders in the Portfolios Trust qualified to vote in the
election. The 1940 Act requires the Portfolios to assist their holders in
calling such a meeting. Upon liquidation of the Portfolios, holders in the
Portfolios would be entitled to share pro rata in the net assets of the
Portfolio Trust available for distribution to holders.

Each holder in a Portfolio is entitled to vote in proportion to its
percentage interest in such Portfolio.

CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING
AGENT, COUNSEL AND INDEPENDENT AUDITORS

The Chase Manhattan Bank, 4 Chase Metrotech Center, Brooklyn, NY 11245,
acts as the Trust's and Portfolio Trust's Custodian. Rules adopted under the
1940 Act permit the Funds and Portfolios to maintain their foreign securities
and cash in the custody of certain eligible foreign banks. Sub-custodians
holding any foreign securities and cash on behalf of the Funds and Portfolios
will be approved by the Board of Trustees of

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<PAGE> 82

the Trust or Portfolio Trust, as the case may be, in accordance with the
regulations of the Securities and Exchange Commission.

BISYS Fund Services, Inc., 100 First Avenue, Suite 300, Pittsburgh, PA
15222, provides customary transfer, dividend disbursing and shareholder
servicing agent services.

Goodwin, Procter & Hoar LLP, Exchange Place, Boston, MA 02019-2881, is
legal counsel for the Trust and the Portfolio Trust.

Coopers & Lybrand L.L.P., 1301 Avenue of the Americas, New York, NY
10019-6013, independent auditors, have been selected to examine the annual
financial statements of the Trust and Portfolio Trust. The Trust and the
Portfolio Trust will send audited annual and unaudited semiannual financial
statements to all its shareholders of record.

ADDITIONAL INFORMATION

A Registration Statement, of which this Statement of Additional
Information is a part, in respect of the Fund's shares has been filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933, as amended.

This Statement of Additional Information omits certain information
contained in the Registration Statement. Items which are thus omitted, including
contracts and other documents referred to or summarized herein and therein, may
be inspected at the offices of the Securities and Exchange Commission or
obtained from the Securities and Exchange Commission upon payment of the
prescribed fees.

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<PAGE> 83

INFORMATION ABOUT SECURITIES RATINGS
OF NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATIONS ("NRSROs")

Debt Security Ratings, Including Municipal Bonds
- ------------------------------------------------

MOODY'S INVESTORS SERVICE, INC. Aaa--the "best quality." Aa--"high
quality by all standards", but margins of protection or other elements make
long-term risks appear somewhat larger than Aaa rated municipal bonds.

STANDARD & POOR'S CORPORATION. AAA--"obligations of the highest
quality." AA--issues with investment characteristics "only slightly less marked
than those of the prime quality issues."

Municipal Bonds
- ---------------

MOODY'S INVESTORS SERVICE, INC. ("Moody's")

Aaa: Municipal bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.

Aa: Municipal bonds which are rated Aa are judged to be of high quality
by all standards. Together with the Aaa group, they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large, fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.

A: Municipal bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment sometime in the
future.

Baa: Bonds which are rated Baa are considered as medium grade
obligations; i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.

Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond ratings. The modifier 1
indicates that the security ranks in the higher end of its generic rating
category. The modifier 2 indicates a mid-range ranking; and modifier 3 indicates
that the issue ranks in the lower end of its generic rating category.

STANDARD & POOR'S CORPORATION ("S&P")

AAA: Municipal bonds rated AAA are highest grade obligations. They
possess the ultimate degree of protection as to principal and interest. In the
market they move with interest rates and hence provide the maximum safety on all
counts.

AA: Municipal bonds rated AA also qualify as high-grade obligations,
and in the majority of instances differ from AAA issues only in small degree.
Here, too, prices move with the long-term money market.

21
<PAGE> 84

A: Municipal bonds rated A are regarded as upper medium grade. They
have considerable investment strength but are not entirely free from adverse
effects of changes in economic and trade conditions. Interest and principal are
regarded as safe. They predominantly reflect money rates in their market
behavior, but also to some extent, economic conditions.

BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.

Municipal Notes
- ---------------

MOODY's

Moody's ratings for state and municipal and other short-term
obligations will be designated Moody's Investment Grade ("MIG"). This
distinction is in recognition of the differences between short-term credit risk
and long-term risk. Factors affecting the liquidity of the borrower are
uppermost in importance in short-term borrowing, while various factors of the
first importance in long-term borrowing risk are of lesser importance in the
short run. Symbols used will be as follows:

MIG-1 - Notes are of the best quality enjoying strong protection from
established cash flows of funds for their servicing or from established and
broad-based access to the market for refinancing, or both.

MIG-2 - Notes are of high quality, with margins of protection ample, although
not so large as in the preceding group.

MIG-3 - Notes are of favorable quality, with all security elements accounted
for, but lacking the undeniable strength of the preceding grades. Market access
for refinancing, in particular, is likely to be less well established.

MIG-4 - Notes are of adequate quality, carrying specific risk but having
protection commonly regarded as required of an investment security and not
distinctly or predominantly speculative.

S&P's

SP-1 - Issues carrying this designation have a very strong or strong capacity to
pay principal and interest. Issues determined to possess overwhelming safety
characteristics will be given a "plus" (+) designation.

SP-2 - Issues carrying this designation have a satisfactory capacity to pay
principal and interest.

Commercial Paper
- ----------------

MOODY's

Moody's Commercial Paper ratings, which are also applicable to
municipal paper investments permitted to be made by the Fund, are opinions of
the ability of issuers to repay punctually their promissory obligations not
having an original maturity in excess of nine months. Moody's employs the
following designations, all judged to be investment grade, to indicate the
relative repayment capacity of rated issuers:

P-1 (Prime-1): Superior capacity for repayment.

22
<PAGE> 85

P-2 (Prime-2): Strong capacity for repayment.

S&P's

S&P's ratings are a current assessment of the likelihood of timely
payment of debt having an original maturity of no more than 365 days. Ratings
are graded into four categories, ranging from "A" for the highest quality
obligations to "D" for the lowest. Issues within the "A" category are delineated
with the numbers 1, 2, and 3 to indicate the relative degree of safety, as
follows:

A-1: This designation indicates the degree of safety regarding timely payment is
very strong. A "plus" (+) designation indicates an even stronger likelihood of
timely payment.

A-2: Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as overwhelming as for issues
designated A-1.

A-3: Issues carrying this designation have a satisfactory capacity for timely
payment. They are, however, somewhat more vulnerable to the adverse effects of
changes in circumstances than obligations carrying the higher designations.

IBCA LIMITED/IBCA INC.

Short-term obligations, including commercial paper, rated A-1+ by IBCA
Limited or its affiliate IBCA Inc. are obligations supported by the highest
capacity for timely repayment. Obligations rated A-1 have a very strong capacity
for timely repayment. Obligations rated A-2 have a strong capacity for timely
repayment, although such capacity may be susceptible to adverse changes in
business, economic or financial conditions.

FITCH INVESTORS SERVICES, INC.

Fitch Investors Services, Inc. employs the rating F-1+ to indicate
issues regarded as having the strongest degree of assurance for timely payment.
The rating F-1 reflects an assurance of timely payment only slightly less in
degree than issues rated F-1+, while the rating F-2 indicates a satisfactory
degree of assurance for timely payment, although the margin of safety is not as
great as indicated by the F-1+ and F-1 categories.

DUFF & PHELPS INC.

Duff & Phelps Inc. employs the designation of Duff 1 with respect to
top grade commercial paper and bank money instruments. Duff 1+ indicates the
highest certainty of timely payment: Short-term liquidity is clearly
outstanding, and safety is just below risk-free U.S. Treasury short-term
obligations. Duff 1- indicates high certainty of time payment. Duff 2 indicates
good certainty of timely payment: liquidity factors and company fundamentals are
sound.

THOMSON BANKWATCH, INC. ("BANKWATCH")

BankWatch will assign both short-term debt ratings and issuer ratings
to the issuers it rates. BankWatch will assign a short-term rating ("TBW-1,"
"TBW-2," "TBW-3," or "TBW-4") to each class of debt (e.g., commercial paper or
non-convertible debt), having a maturity of one year or less, issued by a
holding company structure or an entity within the holding company structure that
is rated by BankWatch. Additionally, BankWatch will assign an issuer rating
("A," A/B," "B," "B/C, "C," "C/D," "D," "D/E," and "E") to each issuer that it
rates.

23
<PAGE> 86

Note: Certain NRSROs utilize rankings within rating categories
indicated by a + or -. The Fund, in accordance with industry practice,
recognizes such rankings with categories as graduations, viewing for example
S&P's rating of A-1+ and A-1 as being in S&P's highest rating category.

24
<PAGE> 87

PART C
------

To the Registration Statement of Rothschild Five Arrows
Currency Trust (the "Trust")

Item 24. Financial Statements and Exhibits.
- -------- ----------------------------------

(a) Financial Statements:

(1) Financial Statements included in PART A of this
Registration Statement:

[None]

(2) Financial Statements included in PART B of this
Registration Statement:

Financial Statements for the U.S. Dollar Fund,
Pound Sterling Fund, Deutschemark Fund and
Canadian Dollar Fund (collectively, the "Funds")
as of _______, 1996.*

Report of Independent Accountants
Statement of Assets and Liabilities

(b) Exhibits:

Exhibit No. Description
----------- -----------

1 Agreement and Declaration of Trust of the Trust.*

2 By-Laws of the Trust.*

3 Not Applicable.

4 Not applicable.

5 Investment Advisory Contract between the International
Currency Fund and Rothschild International Asset
Management Limited.*

6 Distribution Agreement between the Trust and
Rothschild Distributors, Inc.*

* To be filed by amendment.

<PAGE> 88

Exhibit No. Description
----------- -----------

7 Not applicable.

8 Custody Agreement between the Trust and The Chase Manhattan
Bank.*

9 (a) Transfer Agency and Service Agreement between the Trust
and BISYS Fund Services, Inc.*

(b) Administration Agreement between the Trust and BISYS
Fund Services Limited Partnership.*

10 Legal opinion and consent of Goodwin, Procter & Hoar LLP
with respect to the Funds.*

11 Consent of Coopers & Lybrand L.L. P. with respect to the
Funds.*

12 Not applicable.

13 Purchase agreements with respect to initial capital.*

14 Not applicable.

15 Not applicable.

16 Not applicable.

17 Financial Data Schedules for the Funds.*

18 Plan for the issuance and distribution of multiple classes
of shares pursuant to Rule 18f-3.*

19 Powers of Attorney.*

* To be filed by amendment.

Item 25. Persons Controlled by or Under Common Control with Trust.
- -------- ---------------------------------------------------------

As of the close of business on ________, the U.S. Dollar Fund, the
Pound Sterling Fund, the Deutschemark Fund and the Canadian Dollar Fund (the
"Funds"), series of shares of the Trust, owned approximately __% of the value of
the outstanding interests in Portfolios of the International Currency Fund which
invest in securities denominated in the Designated Currencies of the Funds.
Because each Fund controls its corresponding Portfolio, it may take actions
without the approval of any other investor in such Portfolio.

Since, as of the approximate time of this Prospectus, an affiliated
person of the Investment Adviser was the beneficial owner of all or a
substantial amount of the outstanding shares of the Funds it may also be deemed
to be in control of the Portfolios as control is defined in the 1940 Act. Such
owners may acquire additional shares of the Funds. Although sales of the Funds'
shares to other investors will reduce its

<PAGE> 89

percentage ownership in the Funds and the Portfolios, so long as 25% of a class
of shares of either a Funds or a Portfolio is so owned, the owner will be
presumed to be in control of such class of shares for purposes of voting on
certain matters submitted to a vote of shareholders.

Item 26. Number of Holders of Securities.
- -------- --------------------------------

As of ___________, 1996, the record holders of each class of Trust's
securities were as follows:

Title of Class Number of Record Holders
-------------- ------------------------

U.S. Dollar Fund ________

Pound Sterling Fund ________

Deutschemark Fund ________

Canadian Dollar Fund ________

Item 27. Indemnification.
- -------- ----------------

Under Article VI of the Trust's Agreement and Declaration of
Trust, any present or former Trustee, Officer, agent or employee or person
serving in such capacity with another entity at the request of the Trust
("Covered Person") shall be indemnified against all liabilities, including, but
not limited to, amounts paid in satisfaction of judgments, in compromises or as
fines or penalties, and expenses, including reasonable legal and accounting
fees, in connection with the defense or disposition of any proceeding by or in
the name of the Trust or any shareholder in his capacity as such if: (i) a
favorable final decision on the merits is made by a court or administrative
body; or (ii) a reasonable determination is made by a vote of the majority of a
quorum of disinterested Trustees or by independent legal counsel that the
Covered Person was not liable by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in his office
("Disabling Conduct"); or (iii) a determination is made to indemnify the Covered
Person under procedures approved by the Board of Trustees which in the opinion
of independent legal counsel are not inconsistent with the Investment Company
Act of 1940. Said Article VI further provides that the Trust shall indemnify any
Covered Person against any such liabilities and expenses incurred in connection
with the defense or disposition of any other type of proceeding except with
respect to any matter as to which the Covered Person shall have engaged in
Disabling Conduct or shall have been finally adjudicated not to have acted in
good faith and in the reasonable belief that such Covered Person's action was in
or not opposed to the best interests of the Trust.

Item 28. Business and Other Connections of Investment Adviser.
- -------- -----------------------------------------------------

Rothschild International Asset Management Limited (the
"Investment Adviser") is a registered investment adviser. The Investment
Adviser's offices are located at Five Arrows House, St. Swithin's Lane, London
EC4N 8NR England. The Investment Adviser is a British corporation that was
formed in 1975. It is an indirect subsidiary of Rothschild Concordia AG of Zug,
Switzerland, a holding company whose subsidiaries manage approximately $27
billion of assets, spread across equities, bonds and currencies. The Investment
Adviser is an affiliate of the merchant bank NM Rothschild & Sons Limited. The
Investment Adviser offers a wide range of investment advisory services to both
individuals and institutions.

<PAGE> 90

The business and other connections of the officers and directors of
Rothschild International Asset Management Limited , the Investment Adviser to
all series of the Trust, are listed on the Form ADV of the Investment Adviser as
currently on file with the Commission (File no. 801-15132), the text of which is
hereby incorporated by reference.

Item 29. Principal Underwriters.
- -------- -----------------------

(a) Rothschild Distributors, Inc. acts as the distributor and principal
underwriter for each of the Funds. It does not act as principal underwriter,
depositor or investment adviser to any investment companies.

(b)(1) The following information relates to the directors, officers and
partners of Rothschild Distributors, Inc.:*

Name and Principal Positions and Offices Positions and Offices
------------------ --------------------- ---------------------
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------

Item 30. Location of Accounts and Records.
- -------- ---------------------------------

The accounts and records of the Trust are maintained at the
offices of the Trust at 3435 Stelzer Road, Columbus, OH 43219-3035.

Item 31. Management Services.
- -------- --------------------

Not applicable.

Item 32. Undertakings.
- -------- -------------

(a) Not applicable.

(b) The Trust hereby undertakes to file a post-effective amendment,
using financial statements which do not have to be certified, within four to six
months from the effective date of the Trust's 1933 Act registration statement.

(c) Trust hereby undertakes to furnish each person, upon request and
without charge, to whom a Prospectus with respect to a series of the Trust is
delivered with a copy of the latest annual report to shareholders with respect
to that series.

* To be filed by amendment.

<PAGE> 91

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in this City of London in England on the 14th day of August,
1996.

ROTHSCHILD FIVE ARROWS CURRENCY TRUST

By: /s/ Paul R. Freeman
-----------------------------
Paul R. Freeman, Sole Trustee

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

/s/ Paul R. Freeman Sole Trustee and August 14, 1996
- ------------------- President
Paul R. Freeman ----------------
(principal
executive
officer)

/s/ George O. Martinez Treasurer August 14, 1996
- ---------------------- ----------------
George O. Martinez (principal financial
accounting officer)