ZURICH YIELDWISE MONEY FUND, 497, 2000-12-06

ZURICH YIELDWISE MONEY FUND
497, 2000-12-06

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[LOGO] ZURICH

Zurich YieldWise Funds

prospectus

December 1, 2000

Zurich YieldWise Money Fund

Zurich YieldWise Government
Money Fund

Zurich YieldWise Municipal
Money Fund

As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.

<PAGE>

table of contents

how the funds work

2 Zurich YieldWise Money Fund

8 Zurich YieldWise Government Money Fund

13 Zurich YieldWise Municipal Money Fund

19 Other Policies And Risks

20 Who Manages the Funds

22 Financial Highlights

how to invest in the funds

26 How to Buy Shares

28 How to Sell Shares

29 Policies You Should Know About

35 Understanding Distributions and Taxes

<PAGE>

how the funds work

These funds are money market funds, meaning that they seek to maintain a stable
$1.00 share price to preserve the value of your investment.

Each fund takes its own approach to money market investing. Zurich YieldWise
Money Fund emphasizes yield through a more diverse universe of investments,
while Zurich YieldWise Government Money Fund emphasizes government securities.
Zurich YieldWise Municipal Money Fund invests for federally tax-free income.

Remember that money funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their $1.00
share prices aren't guaranteed, so be aware that you could lose money.

<PAGE>

TICKER SYMBOL o SYWXX

Zurich YieldWise Money Fund

The fund seeks maximum current income to the extent consistent with stability of
principal.

Investment Approach

The fund pursues its goal by investing exclusively in high quality short-term
securities, as well as repurchase agreements that are backed by these
securities.

The fund may buy securities from many types of issuers, including the U.S.
government and corporations. The fund may invest in obligations of foreign
banks, and may invest more than 25% of total assets in obligations of U.S.
banks. However, everything the fund buys must meet the rules for money market
fund investments (see sidebar). In addition, the fund currently intends to buy
securities that are in the top credit grade for short-term securities.

Working in conjunction with credit analysts, the portfolio managers screen
potential securities and develop a list of those that the fund may buy. The
managers then decide which securities on this list to buy, looking for
attractive yield and weighing considerations such as credit quality, economic
outlook and possible interest rate movements. The managers may adjust the fund's
exposure to interest rate risk, typically seeking to take advantage of possible
rises in interest rates and to preserve yield when interest rates appear likely
to fall.

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS.

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

Money Fund Rules

To be called a money market fund, a mutual fund must operate within strict
federal rules. Designed to help maintain a stable $1.00 share price, these rules
limit money funds to particular types of securities and strategies. Some of the
rules:

o individual securities must have remaining maturities of no more than 397 days

o the dollar-weighted average maturity of the fund's holdings cannot exceed 90
days

o all securities must be in the top two credit grades for short-term securities
and be denominated in U.S. dollars

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

2 Zurich YieldWise Money Fund
<PAGE>

[ICON] | This fund, a broadly diversified money fund with an emphasis on credit
quality, yield and stability, could serve investors who want a
versatile money fund.

Main Risks To Investors

Money market funds are generally considered to have lower risks than other types
of mutual funds. Even so, there are several risk factors that could reduce the
yield you get from the fund or make it perform less well than other investments.
Although the fund seeks to preserve the value of your investment at $1.00 per
share, you could lose money by investing in the fund.

As with most money market funds, the most important factor affecting the fund's
performance is short-term market interest rates. The fund's yield tends to
reflect current interest rates, which means that when these rates fall, the
fund's yield generally falls as well.

A second factor is credit quality. If a portfolio security declines in credit
quality or goes into default, it could hurt the fund's performance. To the
extent that the fund emphasizes certain sectors of the short-term securities
market, the fund increases its exposure to factors affecting these sectors. For
example, banks' repayment abilities could be compromised by broad economic
declines or sharp rises in interest rates. Investments by the fund in Eurodollar
certificates of deposit issued by London branches of U.S. banks, and different
obligations issued by foreign entities, including U.S. branches of foreign
banks, involve additional risks than investments in securities of domestic
branches of U.S. banks. These risks include, but are not limited to, future
unfavorable political and economic developments, possible withholding taxes on
interest payments, seizure of foreign deposits, currency controls, or interest
limitations or other governmental restrictions that might affect payment of
principal or interest. The market for such obligations may be less liquid and,
at times, more volatile than for securities of domestic branches of U.S. banks.
Additionally, there may be less public information available about foreign banks
and their branches.

3 Zurich YieldWise Money Fund
<PAGE>

Other factors that could affect performance include:

o the managers could be incorrect in their analysis of interest rate trends,
credit quality or other matters

o the counterparty to a repurchase agreement or other transaction could default
on its obligations

o over time, the real value of the fund's yield may be eroded by inflation

4 Zurich YieldWise Money Fund
<PAGE>

The Fund's Track Record

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE BAR CHART.

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

The bar chart shows how the total returns for the fund have varied from year to
year, which may give some idea of risk. The table shows how the fund's returns
over different periods average out.

All figures on this page assume reinvestment of dividends and distributions. As
always, past performance is no guarantee of future results.

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

Zurich YieldWise Money Fund

ANNUAL TOTAL RETURNS (%)
-----------------------------------------------------
as of 12/31 each year

THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE

BAR CHART DATA:

5.58 5.09
-----------------------------------------------------
'98 '99
-----------------------------------------------------

Best quarter: 1.42%, Q1 1998

Worst quarter: 1.17%, Q2 1999

YTD total return: 4.65% as of 9/30/2000

AVERAGE ANNUAL TOTAL RETURNS (%)
-----------------------------------------------------
as of 12/31/1999

1 Year Since inception*
----------------------------------------------------
5.09 5.48

* Inception: 4/17/1997

Total returns for inception through 1999 would have been lower if operating
expenses hadn't been capped.

[ICON] | To find out the fund's current seven-day yield, call 1-800-537-6001
or visit the Zurich Funds Web site at www.zurichfunds.com.

5 Zurich YieldWise Money Fund
<PAGE>

How Much Investors Pay

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE TABLE.

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

This is a no-load fund. The fund does have annual operating expenses, and as a
shareholder you pay them indirectly.

The fee table describes the fees and expenses that you may pay if you buy and
hold shares of this fund. This information doesn't include any fees that may be
charged by your financial services firm.

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

Zurich YieldWise Money Fund

FEE TABLE
-----------------------------------------------------

Shareholder Fees
(paid directly from your investment)
----------------------------------------------------
Transaction fee for redemption by check
or EZ-Transfer $2*
----------------------------------------------------
Exchange fee and transaction fee for
redemption by mail, telephone or automatic
exchange or withdrawal plan $5*
----------------------------------------------------
Transaction fee for redemption by wire $10*
----------------------------------------------------

Annual Operating Expenses (%)
(deducted from fund assets)
----------------------------------------------------
Management Fee 0.36
----------------------------------------------------
Distribution (12b-1) Fee None
----------------------------------------------------
Other Expenses** 0.11
----------------------------------------------------
Total Annual Operating Expenses 0.47
----------------------------------------------------
Expense Reimbursement 0.09
----------------------------------------------------
Net Annual Operating Expenses*** 0.38

* These fees are waived for investors with an account balance of $100,000
or more. All fees are paid to the fund to offset expenses.

** Includes costs of shareholder servicing, custody and similar expenses,
which may vary with fund size and other factors.

*** By contract, total operating expenses are capped at 0.38% through
November 30, 2001. Additionally, the advisor will cap expenses
voluntarily at 0.34%. This cap may be terminated at any time at the
option of the advisor.

6 Zurich YieldWise Money Fund
<PAGE>

EXAMPLE
-----------------------------------------------------

Based on the costs in the fee table (including one year of capped expenses in
each period), this example helps you compare the fund's expenses to those of
other mutual funds. The example assumes the expenses remain the same, that you
invested $10,000, earned 5% annual returns, reinvested all dividends and
distributions and sold your shares at the end of each period. This is only an
example; actual expenses will be different.

1 Year 3 Years 5 Years 10 Years
----------------------------------------------------
$39 $142 $254 $583

7 Zurich YieldWise Money Fund
<PAGE>

TICKER SYMBOL o SYGXX

Zurich YieldWise
Government Money Fund

The fund seeks maximum current income to the extent consistent with stability of
principal.

Investment Approach

The fund pursues its goal by investing at least 65% of its total assets in:

o short-term securities that are issued or guaranteed by the U.S. government or
its agencies or instrumentalities

o repurchase agreements backed by these securities

The securities the fund may buy range from U.S. Treasury obligations, which are
backed by the full faith and credit of the U.S. government, to securities of
issuers such as the Federal Home Loan Bank that carry no government guarantees.
Everything the fund buys must meet the rules for money market fund investments
(see sidebar). In addition, the fund currently intends to buy securities that
are in the top credit grade for short-term securities.

Working in conjunction with credit analysts, the portfolio managers screen
potential securities and develop a list of those that the fund may buy. The
managers then decide which securities on this list to buy, looking for
attractive yield and weighing considerations such as economic outlook and
possible interest rate movements. The managers may adjust the fund's exposure to
interest rate risk, typically seeking to take advantage of possible rises in
interest rates and to preserve yield when interest rates appear likely to fall.

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS.

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

Money Fund Rules

o individual securities must have remaining maturities of no more than 397 days

o the dollar-weighted average maturity of the fund's holdings cannot exceed 90
days

o all securities must be in the top two credit grades for short-term securities
and be denominated in U.S. dollars

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

8 Zurich YieldWise Government Money Fund
<PAGE>

[ICON] | Investors whose primary concerns are credit quality and stability
may want to consider this fund.

Main Risks To Investors

A second factor is credit quality. If a portfolio security declines in credit
quality or goes into default, it could hurt the fund's performance. While the
risk of default is generally considered remote for any securities guaranteed by
the U.S. government, not all of the fund's securities carry this guarantee; some
are guaranteed only by the agency or instrumentality that issues them. Also,
bear in mind that any guarantees on securities the fund owns do not extend to
shares of the fund itself.

Because of the fund's high credit standards, its yield may be lower than the
yields of money funds that don't limit their investments to U.S. government and
agency securities.

Other factors that could affect performance include:

o the managers could be incorrect in their analysis of interest rate trends,
credit quality or other matters

o the counterparty to a repurchase agreement or other transaction could default
on its obligations

o over time, the real value of the fund's yield may be eroded by inflation

9 Zurich YieldWise Government Money Fund
<PAGE>

The Fund's Track Record

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE BAR CHART.

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

The bar chart shows the total return for the fund's first complete calendar
year. The table shows how the fund's returns over different periods average out,
which may give some idea of risk.

All figures on this page assume reinvestment of dividends and distributions. As
always, past performance is no guarantee of future results.

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

Zurich YieldWise Government Money Fund

ANNUAL TOTAL RETURN (%)
-----------------------------------------------------
as of 12/31 each year

THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE

BAR CHART DATA:

5.17
-----------------------------------------------------
'99
-----------------------------------------------------

Best quarter: 1.38%, Q4 1999

Worst quarter: 1.20%, Q2 1999

YTD total return: 4.73% as of 9/30/2000

AVERAGE ANNUAL TOTAL RETURNS (%)
-----------------------------------------------------
as of 12/31/1999
-----------------------------------------------------

1 Year Since inception*
----------------------------------------------------
5.17 5.16

* Inception: 12/1/1998

Total returns for inception through 1999 would have been lower if operating
expenses hadn't been capped.

[ICONN | To find out the fund's current seven-day yield, call 1-800-537-6001
or visit the Zurich Funds Web site at www.zurichfunds.com.

10 Zurich YieldWise Government Money Fund
<PAGE>

How Much Investors Pay

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE TABLE.

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

This is a no-load fund. The fund does have annual operating expenses, and as a
shareholder you pay them indirectly.

The fee table describes the fees and expenses that you may pay if you buy and
hold shares of this fund. This information doesn't include any fees that may be
charged by your financial services firm.

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

Zurich YieldWise Government Money Fund

FEE TABLE
-----------------------------------------------------

Annual Operating Expenses (%)
(deducted from fund assets)
----------------------------------------------------
Management Fee 0.48
----------------------------------------------------
Distribution (12b-1) Fee None
----------------------------------------------------
Other Expenses** 0.15
----------------------------------------------------
Total Annual Operating Expenses 0.63
----------------------------------------------------
Expense Reimbursement 0.26
----------------------------------------------------
Net Annual Operating Expenses*** 0.37

* These fees are waived for investors with an account balance of $100,000
or more. All fees are paid to the fund to offset expenses.

** Includes costs of shareholder servicing, custody and similar expenses,
which may vary with fund size and other factors.

*** By contract, total operating expenses are capped at 0.37% through
November 30, 2001. Additionally, the advisor will cap expenses
voluntarily at 0.24%. This cap may be terminated at any time at the
option of the advisor.

11 Zurich YieldWise Government Money Fund
<PAGE>

EXAMPLE
-----------------------------------------------------

1 Year 3 Years 5 Years 10 Years
----------------------------------------------------
$38 $176 $325 $762

12 Zurich YieldWise Government Money Fund
<PAGE>

TICKER SYMBOL o SYUXX
Zurich YieldWise
Municipal Money Fund

The fund seeks maximum current income that is exempt from regular federal income
taxes to the extent consistent with stability of principal.

Investment Approach

The fund pursues its goal by normally investing at least 80% of total assets in
high quality short-term municipal securities. The income from these securities
is free from regular federal income tax and from alternative minimum tax (AMT).
The fund may buy many types of municipal securities, including industrial
development bonds. The fund may invest all or any of its assets in industrial
development bonds. However, everything the fund buys must meet the rules for
money market fund investments (see sidebar). In addition, the fund currently
intends to buy securities that are in the top credit grade for short-term
securities.

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS.

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

Money Fund Rules

o individual securities must have remaining maturities of no more than 397 days

o the dollar-weighted average maturity of the fund's holdings cannot exceed 90
days

o all securities must be in the top two credit grades for short-term securities
and be denominated in U.S. dollars

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

13 Zurich YieldWise Municipal Money Fund
<PAGE>

[ICON] | This fund could make sense for investors looking for federally tax-free
income along with the liquidity and stability a money fund is designed
to offer.

Main Risks To Investors

14 Zurich YieldWise Municipal Money Fund
<PAGE>

Other factors that could affect performance include:

o the managers could be incorrect in their analysis of interest rate trends,
credit quality or other matters

o political or legal actions could change the way the fund's dividends are
taxed

o the municipal securities market is narrower and less liquid, with fewer
investors, issuers and market makers than the taxable securities market

o over time, the real value of the fund's yield may be eroded by inflation

15 Zurich YieldWise Municipal Money Fund
<PAGE>

The Fund's Track Record

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE BAR CHART.

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

The bar chart shows the total return for the fund's first complete calendar
year. The table shows how the fund's returns over different periods average out,
which may give some idea of risk.

All figures on this page assume reinvestment of dividends and distributions. As
always, past performance is no guarantee of future results.

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

Zurich YieldWise Municipal Money Fund

ANNUAL TOTAL RETURN (%)
-----------------------------------------------------
as of 12/31 each year

THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE

BAR CHART DATA:

3.35
-----------------------------------------------------
'99

Best quarter: 0.94%, Q4 1999

Worst quarter: 0.72%, Q1 1999

YTD total return: 3.14% as of 9/30/2000

AVERAGE ANNUAL TOTAL RETURNS (%)
-----------------------------------------------------
as of 12/31/1999

1 Year Since inception*
----------------------------------------------------
3.35 3.33

* Inception: 12/1/1998

Total returns for inception through 1999 would have been lower if operating
expenses hadn't been capped.

[ICON] | To find out the fund's current seven-day yield, call 1-800-537-6001
or visit the Zurich Funds Web site at www.zurichfunds.com.

16 Zurich YieldWise Municipal Money Fund
<PAGE>

How Much Investors Pay

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE TABLE.

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

This is a no-load fund. The fund does have annual operating expenses, and as a
shareholder you pay them indirectly.

The fee table describes the fees and expenses that you may pay if you buy and
hold shares of this fund. This information doesn't include any fees that may be
charged by your financial services firm.

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

Zurich YieldWise Municipal Money Fund

FEE TABLE
-----------------------------------------------------

Annual Operating Expenses (%)
(deducted from fund assets)
----------------------------------------------------
Management Fee 0.50
----------------------------------------------------
Distribution (12b-1) Fee None
----------------------------------------------------
Other Expenses** 0.19
----------------------------------------------------
Total Annual Operating Expenses 0.69
----------------------------------------------------
Expense Reimbursement 0.39
----------------------------------------------------
Net Annual Operating Expenses*** 0.30

* These fees are waived for investors with an account balance of $100,000 or
more. All fees are paid to the fund to offset expenses.

** Includes costs of shareholder servicing, custody and similar expenses, which
may vary with fund size and other factors.

*** By contract, total operating expenses are capped at 0.30% through November
30, 2001. Additionally, the advisor will cap expenses voluntarily at 0.00%.
This cap may be terminated at any time at the option of the advisor.

17 Zurich YieldWise Municipal Money Fund
<PAGE>

EXAMPLE
-----------------------------------------------------

1 Year 3 Years 5 Years 10 Years
----------------------------------------------------
$31 $181 $346 $822

18 Zurich YieldWise Municipal Money Fund
<PAGE>

other policies and risks

While the fund-by-fund sections on the previous pages describe the main points
of each fund's strategy and risks, there are a few other issues to know about:

o Although major changes tend to be infrequent, each fund's Board could change
that fund's investment goal without seeking shareholder approval. However,
Zurich YieldWise Municipal Money Fund's policy of investing at least 80% of
total assets in municipal securities cannot be changed without shareholder
approval.

o As a temporary defensive measure, Zurich YieldWise Municipal Money Fund could
shift up to 100% of assets into cash or into investments such as taxable
money market securities. This would mean that the fund was not pursuing its
goal.

o The investment advisor establishes a security's credit grade when it buys the
security, using independent ratings or, for unrated securities, its own
credit analysis. If a security's credit quality falls below the minimum
required for purchase by a fund, the security will be sold unless the
investment advisor believes this would not be in the shareholders' best
interests.

For More Information

This prospectus doesn't tell you about every policy or risk of investing in the
funds.

If you want more information on a fund's allowable securities and investment
practices and the characteristics and risks, you may want to request a copy of
the Statement of Additional Information (the back cover has information on how
to do this).

Keep in mind that there is no assurance that any mutual fund will achieve its
goal.

19 other policies and risks
<PAGE>

who manages the funds

The Investment Advisor

The investment advisor for these funds is Scudder Kemper Investments, Inc., 345
Park Avenue, New York, NY. Scudder Kemper has more than 80 years of experience
managing mutual funds, and currently has more than $290 billion in assets under
management.

Scudder Kemper's asset management teams include investment professionals,
economists, research analysts, traders and other investment specialists, located
in offices across the United States and around the world.

As payment for serving as investment advisor, Scudder Kemper receives a
management fee from each fund. Below are the actual rates paid by each fund for
the 12 months through the most recent fiscal year end, as a percentage of
average daily net assets:

Fund Name Fee Paid
---------------------------------------------------------------
Zurich YieldWise Money Fund 0.23%
---------------------------------------------------------------
Zurich YieldWise Government Money Fund 0.00%*
---------------------------------------------------------------
Zurich YieldWise Municipal Money Fund 0.00%*
---------------------------------------------------------------

* For the fiscal year ended July 31, 2000, the Advisor did not impose any of
its management fee, which amounted to 0.48% and 0.50% of average daily net
assets, on an annual basis, of Zurich YieldWise Government Money Fund and
Zurich YieldWise Municipal Money Fund, respectively.

[ICON] | Scudder Kemper, the company with overall responsibility for managing
the funds, takes a team approach to asset management.

20 who manages the funds
<PAGE>

The Portfolio Managers

Zurich YieldWise Zurich YieldWise Municipal
Money Fund Money Fund

Frank J. Rachwalski, Jr. Frank J. Rachwalski, Jr.
Lead Portfolio Manager Lead Portfolio Manager

o Began investment career o Began investment career
in 1973 in 1973

o Joined the advisor in 1973 o Joined the advisor in 1973

o Joined the fund team in 1998 o Joined the fund team in 1998

Jerri I. Cohen Jerri I. Cohen

o Began investment career in 1981 o Began investment career in 1981

o Joined the advisor in 1981 o Joined the advisor in 1981

o Joined the fund team in 1998 o Joined the fund team in 2000

Zurich YieldWise Government
Money Fund

Frank J. Rachwalski, Jr.
Lead Portfolio Manager

o Began investment career in 1973

o Joined the advisor in 1973

o Joined the fund team in 1998

Christopher Proctor

o Began investment career in 1990

o Joined the advisor in 1999

o Joined the fund team in 1999

21 who manages the funds
<PAGE>

financial highlights

These tables are designed to help you understand each fund's financial
performance in recent years. The figures in the first part of each table are for
a single share. The total return figures represent the percentage that an
investor in a particular fund would have earned, assuming all dividends and
distributions were reinvested. This information has been audited by Ernst &
Young LLP, whose report, along with each fund's financial statements, is
included in that fund's annual report (see "Shareholder reports" on the back
cover).

Zurich YieldWise Money Fund

<TABLE>
<CAPTION>
Year ended July 31, 2000 1999 1998 1997(a)
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>

Net asset value, beginning of period $ 1.00 1.00 1.00 1.00
------------------------------------------------------------------------------------
Net investment income 0.06 0.05 0.06 0.02
------------------------------------------------------------------------------------
Less distributions from net investment
income (0.06) (0.05) (0.06) (0.02)
------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 1.00 1.00 1.00
------------------------------------------------------------------------------------
Total Return (%) (b) 5.88 5.03 5.81 1.69**
------------------------------------------------------------------------------------

Ratios to Average Net Assets and Supplemental Data
------------------------------------------------------------------------------------
Net assets, end of period ($ millions) 930 914 1,072 245
------------------------------------------------------------------------------------
Ratio of expenses before expense
reductions (%) 0.47 0.45 0.44 0.60*
------------------------------------------------------------------------------------
Ratio of expenses after expense
reductions (%) 0.34 0.34 0.07 0.00
------------------------------------------------------------------------------------
Ratio of net investment income (%) 5.72 4.92 5.63 5.66*
------------------------------------------------------------------------------------
</TABLE>

(a) For the period April 17, 1997 (commencement of operations) to July 31, 1997.

(b) Total returns would have been lower had certain expenses not been reduced.

* Annualized

** Not annualized

22 financial highlights
<PAGE>

Zurich YieldWise Government Fund

<TABLE>
<CAPTION>
Year ended July 31, 2000 1999(a)
------------------------------------------------------------------------------------
<S> <C> <C>

Net asset value, beginning of period $ 1.00 1.00
------------------------------------------------------------------------------------
Net investment income 0.06 0.03
------------------------------------------------------------------------------------
Less distributions from net investment income (0.06) (0.03)
------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 1.00
------------------------------------------------------------------------------------
Total Return (%) (b) 5.94 3.30**
------------------------------------------------------------------------------------

Ratios to Average Net Assets and Supplemental Data
------------------------------------------------------------------------------------
Net assets, end of period ($ millions) 385 211
------------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%) 0.63 0.61*
------------------------------------------------------------------------------------
Ratio of expenses after expense reductions (%) 0.10 0.05*
------------------------------------------------------------------------------------
Ratio of net investment income (%) 5.87 4.92*
------------------------------------------------------------------------------------
</TABLE>

(a) For the period December 1, 1998 (commencement of operations) to July 31,
1999.

(b) Total returns would have been lower had certain expenses not been reduced.

* Annualized

** Not annualized

23 financial highlights
<PAGE>

Zurich YieldWise Municipal Money Fund

<TABLE>
<CAPTION>
Year ended July 31, 2000 1999(a)
------------------------------------------------------------------------------------

<S> <C> <C>
Net asset value, beginning of period $ 1.00 1.00
------------------------------------------------------------------------------------
Net investment income 0.04 0.02
------------------------------------------------------------------------------------
Less distributions from net investment income (0.04) (0.02)
------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 1.00
------------------------------------------------------------------------------------
Total Return (%) (b) 3.96 2.09**
------------------------------------------------------------------------------------

Ratios to Average Net Assets and Supplemental Data
------------------------------------------------------------------------------------
Net assets, end of period ($ millions) 257 81
------------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%) 0.69 0.88*
------------------------------------------------------------------------------------
Ratio of expenses after expense reductions (%) 0.00 0.00
------------------------------------------------------------------------------------
Ratio of net investment income (%) 3.98 3.25*
------------------------------------------------------------------------------------
</TABLE>

(a) For the period December 1, 1998 (commencement of operations) to July 31,
1999.

(b) Total returns would have been lower had certain expenses not been reduced.

* Annualized

** Not annualized

24 financial highlights
<PAGE>

how to invest in the funds

The following pages tell you how to invest in these funds and what to expect as
a shareholder. If you're investing directly with Zurich, all of this information
applies to you.

If you're investing through a "third party provider" -- for example, a financial
advisor or workplace retirement plan -- your provider may have its own policies
or instructions, and you should follow those.

<PAGE>

how to buy shares

<TABLE>
INITIAL INVESTMENT
------------------------------------------------------------------
<S> <C>
$25,000 or more for regular accounts

$10,000 or more for IRAs

Make out your check to "Zurich YieldWise Funds"
-------------------------------------------------------------------------------------

By mail o Fill out and sign an application

o Send the application and an investment check to:
Kemper Service Company, P.O. Box 219356,
Kansas City, MO 64121-9356
-------------------------------------------------------------------------------------

By wire o Call 1-800-537-6001

o Give your account registration instructions to the
representative, who will give you a new account number

o Have your bank wire your investment to: Zurich YieldWise
Funds, UMB Bank of Kansas City, N.A. ABA# 1010-0069-5

o You will also need to provide your name and account number,
and the name and routing number for the fund of your choice:

o Zurich YieldWise Money Fund: 98-7083-881-8

o Zurich YieldWise Government Money Fund: 98-7096-453-8

o Zurich YieldWise Municipal Money Fund: 98-7096-455-4
-------------------------------------------------------------------------------------

By exchange o To invest in one of these funds by selling shares
in a Kemper fund or another Zurich fund, call 1-888-987-4241
-------------------------------------------------------------------------------------

On the o If you are a current Zurich shareholder see the instructions
Internet at www.zurichfunds.com
-------------------------------------------------------------------------------------

Through o Contact your representative using the method that's most
a financial convenient for you
advisor
</TABLE>

[ICON] | Zurich telephone representatives are available on business days from
7 a.m. to 6 p.m. Central time and on Saturdays from 8 a.m. to 3 p.m.
Call toll-free 1-888-987-4241 (1-888-ZURICH-1).

26 how to buy shares
<PAGE>

<TABLE>
ADDITIONAL INVESTMENT
------------------------------------------------------------------

<S> <C>
$1,000 or more for regular accounts

$1,000 or more for IRAs

$500 or more a month with an Automatic Investment Plan

Make out your check to "Zurich YieldWise Funds"
-------------------------------------------------------------------------------------

By mail o Send a check and a Zurich investment slip to:
Kemper Service Company, P.O. Box 219154,
Kansas City, MO 64121-9154

o No investment slip? Enclose a letter with your name, fund and
account number and your investment instructions
-------------------------------------------------------------------------------------

By wire o Wire your investment using the wire instructions for initial
investments on the previous page
-------------------------------------------------------------------------------------

By EZ-Transfer o Call 1-888-987-4241 to make sure EZ-Transfer is
set up on your account; if it is, you can request a transfer
from your bank account of any amount between $100 and $50,000
-------------------------------------------------------------------------------------

By Zurich InfoLine o Call 1-888-987-8678 and follow the instructions
-------------------------------------------------------------------------------------

With an automatic o For investing directly from your bank account, paycheck or
investment plan government check

o Call 1-888-987-4241 to set up a plan
-------------------------------------------------------------------------------------

On the o See the instructions at www.zurichfunds.com
Internet
o Click on "Account Access"
-------------------------------------------------------------------------------------

Through o Contact your representative using the method that's most
a financial convenient for you
advisor
</TABLE>

[ICON] | Sending an investment by express, registered, or certified mail? Use
this address: Kemper Service Company, 811 Main Street, Kansas City,
MO 64105-2005

27 how to buy shares
<PAGE>

how to sell shares

<TABLE>
SELLING SHARES
------------------------------------------------------------------------

<S> <C> <C>
Some transactions, including most for over
$50,000, can only be ordered in writing; for Fee per
more information, see page 33 Transaction*
-------------------------------------------------------------------------------------

By check o Write a check on your account for at least $1,000 $2**
-------------------------------------------------------------------------------------

By phone o Call 1-888-987-4241 for instructions; a check will $5
be mailed to the address of record
-------------------------------------------------------------------------------------

By wire o Call 1-888-987-4241 to make sure that wire transfer $10
is set up on your account; if it is, you can request
a wire to your bank account
-------------------------------------------------------------------------------------

By EZ-Transfer o Call 1-888-987-4241 to make sure that EZ-Transfer $2
is set up on your account; if it is, you can request
a transfer to your bank account of any amount between
$1,000 and $50,000
-------------------------------------------------------------------------------------

By exchange o To sell shares in a Kemper fund or another Zurich $5
fund and invest in one of these funds, call
1-888-987-4241
-------------------------------------------------------------------------------------

By mail o Write a letter that includes: $5

o the fund and account number from which you want
to sell shares

o the dollar amount you want to sell

o your name(s), signature(s), and address, exactly
as on your account

o Send the letter to: Kemper Service Company,
P.O. Box 219557, Kansas City, MO 64121-9557
-------------------------------------------------------------------------------------

With an o To set up regular exchanges or withdrawals among $5
automatic Kemper or Zurich funds, call 1-888-987-4241
exchange or
withdrawal plan
-------------------------------------------------------------------------------------

On the o Follow the instructions at www.zurichfunds.com Varies;
Internet see above
o Click on "Account Access"
-------------------------------------------------------------------------------------

Through o Contact your representative using the method that's Varies;
a financial most convenient for you see above
advisor
</TABLE>

* These fees are waived for investors with an account
balance of $100,000 or more. All fees are paid to the
fund to offset expenses.

** For each check under $1,000, there is an additional
$10 charge

28 how to sell shares
<PAGE>

policies you should know about

Along with the instructions on the previous pages, the policies below may affect
you as a shareholder. Some of this information, such as the section on dividends
and taxes, applies to all investors, including those investing through
investment providers.

If you are investing through a third party provider, check the materials you
received from them. As a general rule, you should follow the information in
those materials wherever it contradicts the information given here. Please note
that a third party provider may charge its own fees.

In order to reduce the amount of mail you receive and to help reduce fund
expenses, we generally send a single copy of any shareholder report and
prospectus to each household. If you do not want the mailing of these documents
to be combined with those for other members of your household, please call
1-888-987-4241 (1-888-ZURICH-1).

Policies about transactions

The funds charge transaction fees as noted on the previous page. This fee
structure is intended to help the fund lower its annual expenses and, in doing
so, to pursue higher returns. If you have an account balance of $100,000 or
more, you won't be charged these fees.

Please note that there is also a $5 fee for closing an account ($10 if you close
a non-IRA account within one year of opening it). There are also fees for low
balances, which are described under "Other Rights We Reserve."

29 policies you should know about
<PAGE>

The funds are open for business each day the New York Stock Exchange is open.
Zurich YieldWise Money Fund and Zurich YieldWise Government Fund calculate their
share price three times every business day, first at 11 a.m. Central time, then
at 1 p.m. Central time and again as of the close of regular trading on the
Exchange (typically 3 p.m. Central time, but sometimes earlier, as in the case
of scheduled half-day trading or unscheduled suspensions of trading). Zurich
YieldWise Municipal Money Fund calculates its share price at 11 a.m. Central
time and again as of the close of regular trading on the Exchange.

Although shares trade during business hours, you can place orders anytime. Once
an order is received by Kemper Service Company, and they have determined that it
is a "good order," it will be processed at the next share price calculated.

Because orders placed through third party providers must be forwarded to Kemper
Service Company before they can be processed, you'll need to allow extra time. A
representative of your third party provider should be able to tell you when your
order will be processed.

Wire transactions that arrive by 1 p.m. Central time (11 a.m. Central time for
Zurich YieldWise Municipal Money Fund) will receive that day's dividend. Wire
transactions received between 1 p.m. (11 a.m. Central time for Zurich YieldWise
Municipal Money Fund) and 3 p.m. Central time will start to accrue dividends the
next business day. Investments by check will be effective at 3 p.m. Central time
on the business day following receipt and will earn dividends the following
calendar day.

[ICON] | Zurich telephone representatives are available on business days from
7 a.m. to 6 p.m. Central time and on Saturdays from 8 a.m. to 3 p.m.
Call toll-free 1-888-987-4241 (1-888-ZURICH-1).

30 policies you should know about
<PAGE>

[ICON] | If you ever have difficulty placing an order by phone, you can
always send us your order in writing.

When selling shares, you'll generally receive the dividend for the day on which
your shares were sold. If we receive a sell request before 11 a.m. Central time
and the request calls for proceeds to be sent out by wire, we will normally wire
you the proceeds on the same day. However, you won't receive that day's
dividend.

Zurich InfoLine, the Zurich automated telephone service, is available 24 hours a
day by calling 1-888-987-8678. You can use Zurich InfoLine to get information on
Zurich funds generally and on accounts held directly at Zurich. You can also use
it to make exchanges and to buy and sell shares.

EZ-Transfer lets you set up a link between a Zurich account and a bank account.
Once this link is in place, you can move money between the two with a phone call
or on the Internet at www.zurichfunds.com. You'll need to make sure your bank
has Automated Clearing House (ACH) services. Transactions take two to three days
to be completed, and there is a $100 minimum. To set up EZ-Transfer on a new
account, see the account application which can also be downloaded from our web
site; to add it to an existing account, call 1-888-987-4241.

Share certificates are available on written request. However, we don't recommend
them unless you want them for a specific purpose, because your shares can only
be sold by mailing them in, and if they're ever lost they're difficult and
expensive to replace.

31 policies you should know about
<PAGE>

Checkwriting lets you sell fund shares by writing a check. Your investment keeps
earning dividends until your check clears. Please note that you'll be charged a
$10 service fee when you write a check that's larger than your available balance
at the time the check is presented to us, and we will not be able to honor the
check. There is a $2 fee for writing a check on accounts less than $100,000.
Please note that you'll be charged a $10 fee when you write a check for less
than $1,000. We also cannot honor any check for more than $5,000,000, or any
check written on an account on which there is a Power of Attorney. It's not a
good idea to close out an account using a check because the account balance
could change between the time you write the check and the time it is processed.

When you call us to sell or exchange shares, we may record the call, ask you for
certain information, or take other steps designed to prevent fraudulent orders.
It's important to understand that, as long as we take reasonable steps to ensure
that an order appears genuine, we are not responsible for any losses that may
occur.

When you ask us to send or receive a wire, please note that your bank may charge
fees in addition to those charged by the funds. Wire transactions are completed
within 24 hours. The funds can only accept and send wires of $1,000 or more.

Exchanges are a shareholder privilege, not a right: we may reject any exchange
order, particularly when there appears to be a pattern of "market timing" or
other frequent purchases and sales. We may also reject purchase orders, for
these or other reasons.

32 policies you should know about
<PAGE>

When you want to sell more than $50,000 worth of shares, or send the proceeds to
a third party or a new address you'll usually need to place your order in
writing and include a signature guarantee. The only exception is if you want
money wired to a bank account that is already on file with us; in that case, you
don't need a signature guarantee. Also, you don't need a signature guarantee for
an exchange, although we may require one in certain other circumstances.

A signature guarantee is simply a certification of your signature -- a valuable
safeguard against fraud. You can get a signature guarantee from most brokers,
banks, savings institutions and credit unions. Note that you can't get a
signature guarantee from a notary public.

Money from shares you sell is normally sent out within one business day of when
your order is received in good order, although it could be delayed for up to
seven days. There are also two circumstances when it could be longer: when you
are selling shares you bought recently by check or EZ-Transfer, in which case
your check will be held for ten days and you cannot use our telephone, Internet
or checkwriting privileges, or when unusual circumstances prompt the SEC to
allow further delays.

How the funds calculate share price

For each fund in this prospectus, the share price is the net asset value per
share, or NAV. To calculate NAV, the funds use the following equation:

TOTAL ASSETS - TOTAL LIABILITIES
---------------------------------------- = NAV
TOTAL NUMBER OF SHARES OUTSTANDING

As noted earlier, each fund seeks to maintain a stable $1.00 share price.

In valuing securities, we use the amortized cost method (the method used by most
money market funds).

33 policies you should know about
<PAGE>

Other rights we reserve

For each fund in this prospectus, you should be aware that we may do any of the
following:

o withhold 31% of your distributions as federal income tax if you have been
notified by the IRS that you are subject to backup withholding, or if you
fail to provide us with a correct taxpayer ID number or certification that
you are exempt from backup withholding

o charge you $1 a month if your account balance is below $10,000 for the last
30 days

o reject a new account application if you don't provide a correct Social
Security or other tax ID number; if the account has already been opened, we
may give you 30 days' notice to provide the correct number

o pay you for shares you sell by "redeeming in kind," that is, by giving you
marketable securities (which typically will involve brokerage costs for you
to liquidate) rather than cash; in most cases, a fund won't make a redemption
in kind unless your requests over a 90-day period total more than $250,000 or
1% of the fund's assets, whichever is less

o change, add or withdraw various services, fees and account policies (for
example, we may change or terminate the exchange privilege at any time)

o reject or limit purchases of shares for any reason

34 policies you should know about
<PAGE>

understanding distributions
and taxes

By law, a mutual fund is required to pass through to its shareholders virtually
all of its net earnings. A fund can earn money in two ways: by receiving
interest, dividends or other income from securities it holds, and by selling
securities for more than it paid for them. (A fund's earnings are separate from
any gains or losses stemming from your own purchase of shares.) A fund may not
always pay a distribution for a given period.

The funds intend to declare income dividends daily, and pay them monthly. Zurich
YieldWise Municipal Money Fund may make short- or long-term capital gains
distributions in November or December. The taxable money funds may take into
account capital gains and losses (other than net long-term capital gains) in
their daily dividend declarations. The funds may make additional distributions
for tax purposes if necessary.

You can choose how to receive your dividends and distributions. You can have
them automatically reinvested in fund shares or sent to you by check. Tell us
your preference on your application. If you don't indicate a preference, your
dividends and distributions will all be reinvested. For retirement plans,
reinvestment is the only option.

Dividends from Zurich YieldWise Money Fund and Zurich YieldWise Government Money
Fund are generally taxed at ordinary income rates. Any long-term capital gains
distributions are generally taxed at capital gains rates, although the funds
typically don't expect to make long-term capital gains distributions. Also,
because each fund seeks to maintain a stable share price, you are unlikely to
have a capital gain or loss when you sell fund shares. For tax purposes, an
exchange is the same as a sale.

35 understanding distributions and taxes
<PAGE>

Dividends from Zurich YieldWise Municipal Money Fund are generally free from
federal income tax for most shareholders, and a portion of dividends from Zurich
YieldWise Government Money Fund are generally free from state and local income
tax. However, there are a few exceptions:

o a portion of a fund's dividends may be taxable as ordinary income if it came
from investments in taxable securities, tax-exempt market discount bonds, or
as the result of short-term capital gains

o with Zurich YieldWise Municipal Money Fund, because the fund can invest in
securities whose income is subject to the federal alternative minimum tax
(AMT), you may owe taxes on a portion of your dividends if you are among
those investors who must pay AMT

o with Zurich YieldWise Government Money Fund, shareholders who live in certain
states and localities may not be eligible for the tax exemptions that
shareholders in most locations are

Your fund will send you detailed tax information every January. These statements
tell you the amount and the tax category of any dividends or distributions you
received. They also have certain details on your purchases and sales of shares.
The tax status of dividends and distributions is the same whether you reinvest
them or not. Dividends or distributions declared in the last quarter of a given
year are taxed in that year, even though you may not receive the money until the
following January.

36 understanding distributions and taxes
<PAGE>

Notes

<PAGE>

to get more information

Shareholder reports -- These include commentary from each fund's management team
about recent market conditions and the effects of a fund's strategies on its
performance. For each fund, they also have detailed performance figures, a list
of everything the fund owns, and the fund's financial statements. Shareholders
get these reports automatically. For more copies, call 1-888-987-4241
(1-888-ZURICH-1) or visit our Web site at www.zurichfunds.com.

Statement of Additional Information (SAI) -- This tells you more about each
fund's features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).

If you'd like to ask for copies of these documents please contact Zurich or the
SEC (see below). If you're a shareholder and have questions, please contact
Zurich. Materials you get from Zurich are free; those from the SEC involve a
copying fee. If you like, you can look over these materials in person at the
SEC's Public Reference Room in Washington, DC or request them electronically at
[email protected].

SEC 450 Fifth Street, N.W., Washington, DC 20549-0102,

www.sec.gov, 1-202-942-8090

Fund Name SEC File #
------------------------------------------------------------
Zurich YieldWise Money Fund 811-8047
------------------------------------------------------------
Zurich YieldWise Government Money Fund 811-8047
------------------------------------------------------------
Zurich YieldWise Municipal Money Fund 811-8047
------------------------------------------------------------

[LOGO]
ZURICH

Kemper Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606-5808
www.zurichfunds.com
1-800-537-6001

<PAGE>
ZURICH YIELDWISE FUNDS

STATEMENT OF ADDITIONAL INFORMATION
December 1, 2000

Zurich YieldWise Money Fund
Zurich YieldWise Government Fund
Zurich YieldWise Municipal Money Fund

222 South Riverside Plaza, Chicago, Illinois 60606-5808

1-(888) ZURICH-1 (987-4241)

This Statement of Additional Information is not a prospectus and should be read
in conjunction with the prospectus of Zurich YieldWise Funds (the "Trust") dated
December 1, 2000. The prospectus may be obtained without charge by calling or
writing Zurich YieldWise Funds, and is also available along with other related
materials on the Securities and Exchange Commission's internet web site
(http://www.sec.gov).

TABLE OF CONTENTS

INVESTMENT RESTRICTIONS......................................................2

Investment Strategies and Risks..............................................3

Master/Feeder Fund Structure.................................................3

Zurich YieldWise Money Fund ("Money Fund")...................................3

Zurich YieldWise Government Money Fund ("Government Money Fund").............5

Zurich YieldWise Municipal Money Fund ("Muni Money Fund")....................5

Additional Investment Information About the Funds............................9

CAPITAL STRUCTURE...........................................................10

INVESTMENT ADVISOR..........................................................10

PORTFOLIO TRANSACTIONS......................................................13

PURCHASE AND REDEMPTION OF SHARES...........................................14

DIVIDENDS, NET ASSET VALUE AND TAXES........................................17

PERFORMANCE.................................................................19

OFFICERS AND TRUSTEES.......................................................22

SPECIAL FEATURES............................................................24

SHAREHOLDER RIGHTS..........................................................24

APPENDIX -- RATINGS OF INVESTMENTS..........................................26

The financial statements appearing in the Trust's Annual Report to Shareholders
dated July 31, 2000 are incorporated herein by reference. The Trust's Annual
Report accompanies this Statement of Additional Information, and may be obtained
without charge by calling 1-888-987-4241.

<PAGE>

INVESTMENT RESTRICTIONS

Zurich YieldWise Money Fund ("Money Fund"), Zurich YieldWise Government Money
Fund ("Government Money Fund") and Zurich YieldWise Municipal Money Fund ("Muni
Money Fund") have adopted certain investment restrictions which cannot be
changed without approval by holders of a majority of such Fund's outstanding
voting shares. As defined in the Investment Company Act of 1940, as amended (the
"1940 Act"), this means the lesser of the vote of (a) 67% of the shares of the
Fund present at a meeting where more than 50% of the outstanding shares of the
Fund are present in person or by proxy; or (b) more than 50% of the outstanding
shares of the Fund. Each Fund is a diversified open-end management investment
company.

As a matter of fundamental policy, each Fund may not:

(1) Borrow money, except as permitted under 1940 Act, and as interpreted or
modified by regulatory authority having jurisdiction, from time to
time;

(2) Issue senior securities, except as permitted under the 1940 Act, and as
interpreted or modified by regulatory authority having jurisdiction,
from time to time;

(3) Concentrate its investments in a particular industry, as the term is
used in 1940 Act, and as interpreted or modified by regulatory
authority having jurisdiction, from time to time (Money Fund's
concentration in the banking industry is described on page 5);

(4) Engage in the business of underwriting securities issued by others,
except to the extent that the Fund may be deemed to be an underwriter
in connection with the disposition of portfolio securities;

(5) Purchase or sell real estate, which does not include securities of
companies which deal in real estate or mortgages or investments secured
by real estate or interests therein, except that the Fund reserves
freedom of action to hold and to sell real estate acquired as a result
of the Fund's ownership of securities;

(6) Purchase physical commodities or contracts relating to physical
commodities;

(7) Make loans except as permitted under the 1940 Act, and as interpreted
or modified by regulatory authority having jurisdiction, from time to
time.

With regard to restriction (3) for Money Fund, for purposes of determining the
percentage of Money Fund's total assets invested in securities of issuers having
their principal business activities in a particular industry, asset backed
securities will be classified separately, based on the nature of the underlying
assets. Currently, the following categories are used: captive auto, diversified,
retail and consumer loans, captive equipment and business, business trade
receivables, nuclear fuel and capital and mortgage lending.

Government Money Fund and Muni Money Fund have no current intention of making
loans as permitted in investment restriction (7) noted above.

If a Fund adheres to a percentage restriction at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in values or net assets will not be considered a violation.

The Funds have adopted the following non-fundamental restrictions, which may be
changed by the Board of Trustees without shareholder approval. Each Fund may
not:

2
<PAGE>

(1) Borrow money in an amount greater than 5% of its total assets, except for
temporary or emergency purposes;

(2) Lend portfolio securities in an amount greater than 5% of its total assets;

(3) Invest more than 10% of net assets in illiquid securities.

INVESTMENT STRATEGIES AND RISKS
Descriptions in this Statement of Additional Information of a particular
investment practice or technique in which a Fund may engage or a financial
instrument which a Fund may purchase are meant to describe the spectrum of
investments that Scudder Kemper Investments, Inc. (the "Advisor"), in its
discretion, might, but is not required to, use in managing a Fund's assets. The
Advisor may, in its discretion, at any time, employ such practice, technique or
instrument for one or more funds but not for all funds advised by it.
Furthermore, it is possible that certain types of financial instruments or
investment techniques described herein may not be available, permissible,
economically feasible or effective for their intended purposes in all markets.
Certain practices, techniques, or instruments may not be principal activities of
a Fund, but, to the extent employed, could, from time to time, have a material
impact on the Fund's performance.

The Funds described in this Statement of Additional Information seek to maintain
a net asset value of $1.00 per share.

Master/Feeder Fund Structure

The Board of Trustees has the discretion to retain the current distribution
arrangement for the Funds while investing in a master fund in a master/feeder
fund structure as described below.

A master/feeder fund structure is one in which a fund (a "feeder fund"), instead
of investing directly in a portfolio of securities, invests most or all of its
investment assets in a separate registered investment company (the "master
fund") with substantially the same investment objective and policies as the
feeder fund. Such a structure permits the pooling of assets of two or more
feeder funds, preserving separate identities or distribution channels at the
feeder fund level. Based on the premise that certain of the expenses of
operating an investment portfolio are relatively fixed, a larger investment
portfolio may eventually achieve a lower ratio of operating expenses to average
net assets. An existing investment company is able to convert to a feeder fund
by selling all of its investments, which involves brokerage and other
transaction costs and realization of a taxable gain or loss, or by contributing
its assets to the master fund and avoiding transaction costs and, if proper
procedures are followed, the realization of taxable gain or loss.

Zurich YieldWise Money Fund ("Money Fund")

Money Fund seeks maximum current income to the extent consistent with stability
of principal. The Fund pursues its objective by investing exclusively in the
following types of U.S. Dollar denominated money market instruments that mature
in 397 days or less:

o Obligations of, or guaranteed by, the U.S. or Canadian governments,
their agencies or instrumentalities.

o Bank certificates of deposit, time deposits or bankers' acceptances of
U.S. banks (including their foreign branches) and Canadian chartered
banks having total assets in excess of $1 billion.

o Bank certificates of deposit, time deposits or bankers' acceptances of
foreign banks (including their U.S. and foreign branches) having total
assets in excess of $10 billion.

3
<PAGE>

o Commercial paper, notes, bonds, debentures, participation certificates
or other debt obligations that (i) have received a high-quality
short-term rating by Moody's Investors Service, Inc. ("Moody's"),
Standard & Poor's Corporation ("S&P"), Duff & Phelps, Inc. ("Duff"),
Fitch Investors Services, Inc. ("Fitch"), or any other nationally
recognized statistical rating organization as determined by the
Securities and Exchange Commission ("SEC"); or (ii) if unrated, are
determined to be at least equal in quality to one or more of the above
ratings in the discretion of the Fund's investment advisor. Currently,
only obligations in the top two short-term rating categories are
considered to be rated high quality. The two highest short-term rating
categories of Moody's, S&P, Duff and Fitch for commercial paper are
Prime-1 and Prime-2; A-1 and A-2; Duff-1 and Duff-2; and F-1 and F-2,
respectively. For a description of these ratings, see
"Appendix--Ratings of Investments" herein.

o Repurchase agreements of obligations that are suitable for investment
under the categories set forth above. Repurchase agreements are
discussed below.

Investments by Money Fund in Eurodollar certificates of deposit issued by London
branches of U.S. banks, or obligations issued by foreign entities, including
foreign banks, involve risks that are different from investments in securities
of domestic branches of U.S. banks. These risks may include future unfavorable
political and economic developments, possible withholding taxes on interest
payments, seizure of foreign deposits, currency controls, interest limitations
or other governmental restrictions that might affect payment of principal or
interest. The market for such obligations may be less liquid and, at times, more
volatile than for securities of domestic branches of U.S. banks. Additionally,
there may be less public information available about foreign banks and their
branches. The profitability of the banking industry is dependent largely upon
the availability and cost of funds for the purpose of financing lending
operations under prevailing money market conditions. General economic conditions
as well as exposure to credit losses arising from possible financial
difficulties of borrowers play an important part in banking operations. As a
result of federal and state laws and regulations, domestic banks are, among
other things, required to maintain specified levels of reserves, limited in the
amounts they can loan to a single borrower and subject to other regulations
designed to promote financial soundness. However, not all such laws and
regulations apply to the foreign branches of domestic banks. Foreign branches of
foreign banks are not regulated by U.S. banking authorities, and generally are
not bound by accounting, auditing and financial reporting standards comparable
to U.S. banks. Bank obligations held by the Fund do not benefit materially from
insurance from the Federal Deposit Insurance Corporation.

Money Fund may invest in commercial paper which is issued by major corporations
without registration under the Securities Act of 1933 in reliance upon the
exemption from registration afforded by Section 3(a)(3) thereof. Such commercial
paper may be issued only to finance current transactions and must mature in nine
months or less. Trading of such commercial paper is conducted primarily by
institutional investors through investment dealers, and individual investor
participation in the commercial paper market is very limited.

Money Fund may also invest in commercial paper issued in reliance upon the
so-called "private placement" exemption from registration afforded by Section
4(2) of the Securities Act of 1933 ("Section 4(2) paper"). Section 4(2) paper is
restricted as to disposition under the federal securities laws, and generally is
sold to institutional investors such as the Fund who agree that they are
purchasing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction. Section 4(2) paper
normally is resold to other institutional investors like the Fund through or
with the assistance of the issuer or investment dealers who make a market in the
Section 4(2) paper, thus providing liquidity. The Advisor considers the legally
restricted but readily saleable Section 4(2) paper to be liquid; however,
pursuant to procedures approved by the Board of Trustees of the Trust, if a
particular investment in Section 4(2) paper is not determined to be liquid, that
investment will be included within the 10% limitation on illiquid securities
discussed under "Additional Investment Information About the Funds" below. The
Advisor monitors the liquidity of the Fund's investments in Section 4(2) paper
on a continuous basis.

The Fund may invest in high quality participation certificates ("certificates")
representing undivided interests in trusts that hold a portfolio of receivables
from consumer and commercial credit transactions, such as transactions involving
consumer revolving credit card accounts or commercial revolving credit loan

4
<PAGE>

facilities. The receivables would include amounts charged for goods and
services, finance charges, late charges and other related fees and charges.
Interest payable on the certificates may be fixed or may be adjusted
periodically or "float" continuously according to a formula based upon an
objective standard such as the 30-day commercial paper rate. See "Additional
Investment Information About the Funds" below for a discussion of "Variable Rate
Securities." A trust may have the benefit of a letter of credit from a bank at a
level established to satisfy rating agencies as to the credit quality of the
assets supporting the payment of principal and interest on the certificates.
Payments of principal and interest on the certificates would be dependent upon
the underlying receivables in the trust and may be guaranteed under a letter of
credit to the extent of such credit. The quality rating by a rating service of
an issue of certificates is based primarily upon the value of the receivables
held by the trust and the credit rating of the issuer of any letter of credit
and of any other guarantor providing credit support to the trust. The Fund's
investment advisor considers these factors as well as others, such as any
quality ratings issued by the rating services identified above, in reviewing the
credit risk presented by a certificate and in determining whether the
certificate is appropriate for investment by the Fund. Collection of receivables
in the trust may be affected by various social, legal and economic factors
affecting the use of credit and repayment patterns, such as changes in consumer
protection laws, the rate of inflation, unemployment levels and relative
interest rates. It is anticipated that for most publicly offered certificates
there will be a liquid secondary market or there may be demand features enabling
the Fund to readily sell its certificates prior to maturity to the issuer or a
third party. While the Fund may invest without limit in certificates, it is
currently anticipated that such investments will not exceed 25% of the Fund's
assets.

Money Fund may concentrate 25% or more of its assets in bank
certificates of deposit, time deposits or banker's acceptances of U.S. banks and
their domestic branches in accordance with its investment objective and
policies. Accordingly, the Fund may be more adversely affected by changes in
market or economic conditions and other circumstances affecting the banking
industry than it would be if the Fund's assets were not so concentrated. The
Fund will not change this policy without the vote of shareholders.

Zurich YieldWise Government Money Fund ("Government Money
Fund")

Government Money Fund seeks maximum current income to the extent consistent with
stability of principal. The Fund pursues its objective by investing at least 65%
of its total assets in the following securities that mature within 397 days or
less:

o U.S. Treasury bills, notes, bonds and other obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.

o Repurchase agreements backed by the obligations described above.

Some securities issued by U.S. Government agencies or instrumentalities are
supported only by the credit of the agency or instrumentality, such as those
issued by the Federal Home Loan Bank, and others are backed by the full faith
and credit of the U.S. Government. Short-term U.S. Government obligations
generally are considered to be the safest short-term investment. The U.S.
Government guarantee of the securities owned by the Fund, however, does not
guarantee the net asset value of its shares, which the Fund seeks to maintain at
$1.00 per share. Also, with respect to securities supported only by the credit
of the issuing agency or instrumentality , there is no guarantee that the U.S.
Government will provide support to such agencies or instrumentalities and such
securities may involve risk of loss of principal and interest.

Zurich YieldWise Municipal Money Fund ("Muni Money Fund")

Muni Money Fund seeks maximum current income that is exempt from regular federal
income taxes to the extent consistent with stability of principal. The Fund
pursues its objective primarily through a professionally managed, diversified
portfolio of short-term high quality tax-exempt municipal obligations.

Under normal market conditions, at least 80% of the Fund's total assets will be
invested in obligations issued by or on behalf of states, territories and
possessions of the United States and the District of

5
<PAGE>

Columbia and their political subdivisions, agencies and instrumentalities, the
income from which is exempt from federal income tax ("Municipal Securities").

Dividends representing net interest income received by Muni Money Fund on
Municipal Securities will be exempt from regular federal income tax when
distributed to the Fund's shareholders. Such dividend income may be subject to
state and local taxes and the alternative minimum tax. See "Dividends, Net Asset
Value and Taxes -- Taxes." The Fund's assets will generally consist of Municipal
Securities, temporary investments as described below and cash. The Fund
considers short-term Municipal Securities to be those that mature in 397 days or
less.

Muni Money Fund will invest in Municipal Securities which at
the time of purchase:

o are rated within the two highest ratings for Municipal Securities (Aaa
or Aa) assigned by Moody's, (AAA or AA) assigned by S&P, (AAA or AA)
assigned by Fitch, or (AAA or AA) assigned by Duff, or any other
nationally recognized statistical rating organization ("NRSRO") as
determined by the Securities and Exchange Commission;

o are guaranteed or insured by the U.S. Government as to the payment of
principal and interest;

o are fully collateralized by an escrow of U.S. Government securities
acceptable to the investment advisor;

o have at the time of purchase a Moody's short-term municipal securities
rating of MIG-2 or higher or a municipal commercial paper rating of P-2
or higher, or S&P's municipal commercial paper rating of A-2 or higher,
or Fitch's municipal commercial paper rating of F-2 or higher, or
Duff's municipal commercial paper rating of Duff-2 or higher, or a
rating within the two highest categories of any other NRSRO as
determined by the Securities and Exchange Commission;

o are unrated, if longer term Municipal Securities of that issuer are
rated within the two highest rating categories by Moody's, S&P, Fitch,
Duff or any other NRSRO as determined by the Securities and Exchange
Commission; or

o are determined to be at least equal in quality to one or more of the
above ratings in the discretion of the Advisor.

Municipal Securities generally are classified as "general obligation" or
"revenue" issues. General obligation bonds are secured by the issuer's pledge of
its full credit and taxing power for the payment of principal and interest.
Revenue bonds are payable only from the revenues derived from a particular
facility or class of facilities or, in some cases, from the proceeds of a
special excise tax or other specific revenue source such as the user of the
facility being financed. Industrial development bonds held by the Fund are in
most cases revenue bonds and are not payable from the unrestricted revenues of
the issuer. Among other types of instruments, the Fund may purchase tax-exempt
commercial paper, warrants and short-term municipal notes such as tax
anticipation notes, bond anticipation notes, revenue anticipation notes,
construction loan notes and other forms of short-term loans. Such notes are
issued with a short-term maturity in anticipation of the receipt of tax
payments, the proceeds of bond placements or other revenues. As indicated under
"Dividends, Net Asset Value and Taxes -- Taxes," the Fund may invest in "private
activity" bonds.

Muni Money Fund may purchase securities which provide for the right to resell
them to an issuer, bank or dealer at an agreed upon price or yield within a
specified period prior to the maturity date of such securities. Such a right to
resell is referred to as a "Standby Commitment." Securities may cost more with
Standby Commitments than without them. Standby Commitments will be entered into
solely to facilitate portfolio liquidity. A Standby Commitment may be exercised
before the maturity date of the related Municipal Security if the Fund's
investment advisor revises its evaluation of the creditworthiness of the
underlying security or of the entity issuing the Standby Commitment. The Fund's
policy is to enter into Standby Commitments only with issuers, banks or dealers
that are determined by the Fund's investment

6
<PAGE>

advisor to present minimal credit risks. If an issuer, bank or dealer should
default on its obligation to repurchase an underlying security, the Fund might
be unable to recover all or a portion of any loss sustained from having to sell
the security elsewhere. For purposes of valuing the Fund's securities at
amortized cost, the stated maturity of Municipal Securities subject to Standby
Commitments is not changed.

Muni Money Fund may purchase high quality Certificates of Participation in
trusts that hold Municipal Securities. A Certificate of Participation gives the
Fund an undivided interest in the Municipal Security in the proportion that the
Fund's interest bears to the total principal amount of the Municipal Security.
These Certificates of Participation may be variable rate or fixed rate with
remaining maturities of one year or less. A Certificate of Participation may be
backed by an irrevocable letter of credit or guarantee of a financial
institution that satisfies rating agencies as to the credit quality of the
Municipal Security supporting the payment of principal and interest on the
Certificate of Participation. Payments of principal and interest would be
dependent upon the underlying Municipal Security and may be guaranteed under a
letter of credit to the extent of such credit. The quality rating by a rating
service of an issue of Certificates of Participation is based primarily upon the
rating of the Municipal Security held by the trust and the credit rating of the
issuer of any letter of credit and of any other guarantor providing credit
support to the issue. The Fund's investment adviser considers these factors as
well as others, such as any quality ratings issued by the rating services
identified above, in reviewing the credit risk presented by a Certificate of
Participation and in determining whether the Certificate of Participation is
appropriate for investment by the Fund. It is anticipated by the Fund's
investment advisor that, for most publicly offered Certificates of
Participation, there will be a liquid secondary market or there may be demand
features enabling the Fund to readily sell its Certificates of Participation
prior to maturity to the issuer or a third party. As to those instruments with
demand features, the Fund intends to exercise its right to demand payment from
the issuer of the demand feature only upon a default under the terms of the
Municipal Security, as needed to provide liquidity to meet redemptions, or to
maintain a high quality investment portfolio.

In seeking to achieve its investment objective, Muni Money Fund may invest all
or any part of its assets in Municipal Securities that are industrial
development bonds. Moreover, although the Fund does not currently intend to do
so on a regular basis, it may invest more than 25% of its assets in Municipal
Securities that are repayable out of revenue streams generated from economically
related projects or facilities, if such investment is deemed necessary or
appropriate by the Fund's investment advisor. To the extent that the Fund's
assets are concentrated in Municipal Securities payable from revenues on
economically related projects and facilities, the Fund will be subject to the
risks presented by such projects to a greater extent than it would be if the
Fund's assets were not so concentrated.

From time to time, as a defensive measure or when acceptable short-term
Municipal Securities are not available, Muni Money Fund may invest in taxable
"temporary investments" which include:

o obligations of the U.S. Government, its agencies or instrumentalities;

o debt securities rated within the two highest grades by Moody's, S&P,
Fitch, Duff or any other NRSRO as determined by the Securities and
Exchange Commission;

o commercial paper rated in the two highest grades by any of these rating
services;

o certificates of deposit of domestic banks with assets of $1 billion or
more; and

o repurchase agreements of the obligations described above (Repurchase
agreements are discussed below).

Interest income from temporary investments is taxable to shareholders as
ordinary income. Although the Fund is permitted to invest in taxable securities,
it is the Fund's primary intention to generate income dividends that are not
subject to federal income taxes. See "Dividends, Net Asset Value and Taxes." For
a description of the ratings, see "Appendix--Ratings of Investments."

7
<PAGE>

Municipal Securities that the Muni Money Fund may purchase include, without
limitation, debt obligations issued to obtain funds for various public purposes,
including the construction of a wide range of public facilities such as
airports, bridges, highways, housing, hospitals, mass transportation, public
utilities, schools, streets, and water and sewer works. Other public purposes
for which Municipal Securities may be issued include refunding outstanding
obligations, obtaining funds for general operating expenses and obtaining funds
to loan to other public institutions and facilities.

Municipal Securities, such as industrial development bonds, are issued by or on
behalf of public authorities to obtain funds for purposes including privately
operated airports, housing, conventions, trade shows, ports, sports, parking or
pollution control facilities or for facilities for water, gas, electricity or
sewage and solid waste disposal. Such obligations, which may include lease
arrangements, are included within the term Municipal Securities if the interest
paid thereon qualifies as exempt from federal income tax. Other types of
industrial development bonds, the proceeds of which are used for the
construction, equipment, repair or improvement of privately operated industrial
or commercial facilities, may constitute Municipal Securities, although current
federal tax laws place substantial limitations on the size of such issues.

Municipal Securities generally are classified as "general obligation" or
"revenue." General obligation notes are secured by the issuer's pledge of its
full credit and taxing power for the payment of principal and interest. Revenue
notes are payable only from the revenues derived from a particular facility or
class of facilities or, in some cases, from the proceeds of a special excise or
other specific revenue source. Industrial development bonds which are Municipal
Securities are in most cases revenue bonds and generally do not constitute the
pledge of the credit of the issuer of such bonds.

Examples of Municipal Securities that mature in or have remaining maturities of
397 days or less are short-term tax anticipation notes, bond anticipation notes,
revenue anticipation notes, construction loan notes, pre-refunded municipal
bonds, warrants and tax-free commercial paper.

Tax anticipation notes typically are sold to finance working capital needs of
municipalities in anticipation of receiving property taxes on a future date.
Bond anticipation notes are sold on an interim basis in anticipation of a
municipality issuing a longer term bond in the future. Revenue anticipation
notes are issued in expectation of receipt of other types of revenue such as
those available under the Federal Revenue Sharing Program. Construction loan
notes are instruments insured by the Federal Housing Administration with
permanent financing by "Fannie Mae" (the Federal National Mortgage Association)
or "Ginnie Mae" (the Government National Mortgage Association) at the end of the
project construction period. Pre-refunded municipal bonds are bonds which are
not yet refundable, but for which securities have been placed in escrow to
refund an original municipal bond issue when it becomes refundable. Tax-free
commercial paper is an unsecured promissory obligation issued or guaranteed by a
municipal issuer. Muni Money Fund may purchase other Municipal Securities
similar to the foregoing, which are or may become available, including
securities issued to pre-refund other outstanding obligations of municipal
issuers.

The federal bankruptcy statutes relating to the adjustments of debts of
political subdivisions and authorities of states of the United States provide
that, in certain circumstances, such subdivisions or authorities may be
authorized to initiate bankruptcy proceedings without prior notice to or consent
of creditors, which proceedings could result in material adverse changes in the
rights of holders of obligations issued by such subdivisions or authorities.

Litigation challenging the validity under state constitutions of present systems
of financing public education has been initiated or adjudicated in a number of
states, and legislation has been introduced to effect changes in public school
finances in some states. In other instances there has been litigation
challenging the issuance of pollution control revenue bonds or the validity of
their issuance under state or federal law which ultimately could affect the
validity of those Municipal Securities or the tax-free nature of the interest
thereon.

8
<PAGE>

Additional Investment Information About the Funds

In addition to the specific investment objective and policies listed above, each
Fund limits its investments to securities that meet the requirements of Rule
2a-7 under the 1940 Act. See "Dividends, Net Asset Value and Taxes -- Net Asset
Value."

Each Fund may purchase and sell securities on a when-issued or delayed delivery
basis. A when-issued or delayed delivery transaction arises when securities are
bought or sold for future payment and delivery to secure what is considered to
be an advantageous price and yield to the Fund at the time it enters into the
transaction. In determining the maturity of portfolio securities purchased on a
when-issued or delayed delivery basis, the Funds will consider them to have been
purchased on the date when it committed itself to the purchase.

A security purchased on a when-issued basis, like all securities held by the
Funds, is subject to changes in market value based upon changes in the level of
interest rates and investors' perceptions of the creditworthiness of the issuer.
Generally such securities will appreciate in value when interest rates decline
and decrease in value when interest rates rise. Therefore if, in order to
achieve higher interest income, a Fund remains substantially fully invested at
the same time that it has purchased securities on a when-issued basis, there
will be a greater possibility that the market value of the Fund's assets will
vary from $1.00 per share, since the value of a when-issued security is subject
to market fluctuation and no interest accrues to the purchaser prior to
settlement of the transaction. See "Determining Share Price."

The Funds will only make commitments to purchase securities on a when-issued or
delayed delivery basis with the intention of actually acquiring the securities,
but the Funds reserve the right to sell these securities before the settlement
date if deemed advisable. The sale of these securities may result in the
realization of gains that are not exempt from federal income tax.

Each Fund may invest in instruments that have interest rates that adjust
periodically or that "float" continuously according to formulae intended to
minimize fluctuation in values of the instruments ("Variable Rate Securities").
The interest rate on a Variable Rate Security is ordinarily determined by
reference to or is a percentage of an objective standard such as a bank's prime
rate, the 90-day U.S. Treasury bill rate, or the rate of return on commercial
paper or bank certificates of deposit. Generally, the changes in the interest
rate on Variable Rate Securities reduce the fluctuation in the market value of
such securities. Accordingly, as interest rates decrease or increase, the
potential for capital appreciation or depreciation is less than for fixed-rate
obligations. Some Variable Rate Securities ("Variable Rate Demand Securities")
have a demand feature entitling the purchaser to resell the securities at an
amount approximately equal to amortized cost or the principal amount thereof
plus accrued interest. As is the case for other Variable Rate Securities, the
interest rate on Variable Rate Demand Securities varies according to some
objective standard intended to minimize fluctuation in the values of the
instruments. Each Fund determines the maturity of Variable Rate Securities in
accordance with Securities and Exchange Commission rules which allow the Fund to
consider certain of such instruments as having maturities shorter than the
maturity date on the face of the instrument.

Each Fund may invest in repurchase agreements, which are instruments under which
a Fund acquires ownership of a security from a broker-dealer or bank that agrees
to repurchase the security at a mutually agreed upon time and price (which price
is higher than the purchase price), thereby determining the yield during the
Fund's holding period. Maturity of the securities subject to repurchase may
exceed 397 days. In the event of a bankruptcy or other default of a seller of a
repurchase agreement, a Fund might incur expenses in enforcing its rights, and
could experience losses, including a decline in the value of the underlying
securities and loss of income.

A Fund will not purchase illiquid securities if, as a result thereof, more than
10% of such Fund's net assets valued at the time of the transaction would be
invested in such securities. If a Fund holds a material percentage of its assets
in illiquid securities, there may be a question concerning the ability of such
Fund to make payment within seven days of the date its shares are tendered for
redemption. Securities and Exchange Commission guidelines provide that the usual
limit on aggregate holdings by a money market

9
<PAGE>

fund of illiquid assets is 10% of its net assets. Each Fund's investment advisor
monitors holdings of illiquid securities on an ongoing basis and will take such
action as it deems appropriate to help maintain adequate liquidity.

Interfund Borrowing and Lending Program. The Fund has received exemptive relief
from the SEC which permits the Fund to participate in an interfund lending
program among certain investment companies advised by the Advisor. The interfund
lending program allows the participating funds to borrow money from and loan
money to each other for temporary or emergency purposes. The program is subject
to a number of conditions designed to ensure fair and equitable treatment of all
participating funds, including the following: (1) no fund may borrow money
through the program unless it receives a more favorable interest rate than a
rate approximating the lowest interest rate at which bank loans would be
available to any of the participating funds under a loan agreement; and (2) no
fund may lend money through the program unless it receives a more favorable
return than that available from an investment in repurchase agreements and, to
the extent applicable, money market cash sweep arrangements. In addition, a fund
may participate in the program only if and to the extent that such participation
is consistent with the fund's investment objectives and policies (for instance,
money market funds would normally participate only as lenders and tax exempt
funds only as borrowers). Interfund loans and borrowings may extend overnight,
but could have a maximum duration of seven days. Loans may be called on one
day's notice. A fund may have to borrow from a bank at a higher interest rate if
an interfund loan is called or not renewed. Any delay in repayment to a lending
fund could result in a lost investment opportunity or additional costs. The
program is subject to the oversight and periodic review of the Boards of the
participating funds. To the extent the Fund is actually engaged in borrowing
through the interfund lending program, the Fund, as a matter of non-fundamental
policy, may not borrow for other than temporary or emergency purposes (and not
for leveraging).

CAPITAL STRUCTURE

Each Fund is a diversified series of the Trust, an open-end management
investment company, organized as a business trust under the laws of
Massachusetts on June 12, 1995. Effective November 17, 1998, the name of the
Trust was changed from Zurich YieldWise Money Fund to Zurich YieldWise Funds.
The Trust may issue an unlimited number of shares of beneficial interest, all
having no par value which may be divided by the Board of Trustees into classes
of shares, subject to compliance with the Securities and Exchange Commission
regulations permitting the creation of separate classes of shares. The Trust's
shares are not currently divided into classes. While only shares of Money Fund,
Government Money Fund and the Muni Money Fund are presently being offered, the
Board of Trustees may authorize the issuance of additional series if deemed
desirable, each with its own investment objective, policies and restrictions.
Since the Trust may offer multiple series, it is known as a "series company."
Shares of a Fund have equal noncumulative voting rights and equal rights with
respect to dividends, assets and liquidation of such Fund subject to any
preferences, rights or privileges of any classes of shares within the Fund.
Generally, each class of shares issued by a particular Fund would differ as to
the allocation of certain expenses of the Fund, such as distribution and
administrative expenses, permitting, among other things, different levels of
services or methods of distribution among various classes. Shares are fully paid
and nonassessable when issued, are transferable without restriction and have no
preemptive or conversion rights. The Trust is not required to hold annual
shareholders' meetings and does not intend to do so. However, it will hold
special meetings as required or deemed desirable for such purposes as electing
trustees, changing fundamental policies or approving an investment management
agreement. Subject to the Agreement and Declaration of Trust of the Trust,
shareholders may remove trustees. Shareholders will vote by Fund and not in the
aggregate or by class except when voting in the aggregate is required under the
1940 Act, such as for the election of trustees or when the Board of Trustees
determines that such a vote is appropriate.

INVESTMENT ADVISOR

Investment Advisor. Scudder Kemper Investments, Inc. (the "Advisor") 345 Park
Avenue, New York, New York, 10154-0010, is the Funds' investment advisor. The
Advisor is approximately 70% owned by Zurich Financial Services, Inc., a newly
formed global insurance and financial services company. The

10
<PAGE>

balance of the Advisor is owned by the Advisor's officers and employees.
Pursuant to an investment management agreement for each Fund, the Advisor acts
as each Fund's investment advisor manages its investments, administers its
business affairs, furnishes office facilities and equipment, provides clerical
and administrative services and permits any of its officers or employees to
serve without compensation as trustees or officers of the Trust if elected to
such positions. The Trust pays the expenses of its operations, including the
fees and expenses of independent auditors, counsel, custodian and transfer agent
and the cost of share certificates, reports and notices to shareholders, costs
of calculating net asset value and maintaining all accounting records related
thereto, brokerage commissions or transaction costs, taxes, registration fees,
the fees and expenses of qualifying a Fund and its shares for distribution under
federal and state securities laws and membership dues in the Investment Company
Institute or any similar organization. Trust expenses generally are allocated
among the Funds on the basis of relative net assets at the time of allocation,
except that expenses directly attributable to a particular Fund are charged to
that Fund.

Each investment management agreement provides that the Advisor shall not be
liable for any error of judgment or of law, or for any loss suffered by the
Funds in connection with the matters to which the agreement relates, except a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Advisor in the performance of its obligations and duties, or by
reason of its reckless disregard of its obligations and duties under the
agreement.

Each investment management agreement continues in effect from year to year for
each Fund so long as its continuation is approved at least annually by (a) a
majority vote of the trustees who are not parties to such agreement or
interested persons of any such party except in their capacity as trustees of the
Trust, cast in person at a meeting called for such purpose, and (b) by the
shareholders of the Trust or the Board of Trustees. Each agreement may be
terminated at any time upon 60 days notice by either party, or by a majority
vote of the outstanding shares, and will terminate automatically upon
assignment. Additional Funds may be subject to a different agreement.

On September 7, 1998, Zurich Insurance Company ("Zurich") the majority owner of
the Advisor, entered into an agreement with B.A.T. Industries p.l.c. ("B.A.T."),
pursuant to which the financial services business of B.A.T. were combined with
Zurich's businesses to form a new global insurance and financial services
company known as Zurich Financial Services. On October 17, 2000, the dual
holding company structure of Zurich Financial Services Group, comprised of
Allied Zurich p.l.c. in the United Kingdom and Zurich Allied A.G. in
Switzerland, was unified into a single Swiss holding company, Zurich Financial
Services.

For the services and facilities furnished, each Fund pays a monthly investment
management fee on a graduated basis of 1/12 of the annual rate of:

0.50% of the first $215 million of average daily net assets of
the Fund,

0.375% of the next $335 million,

0.30% of the next $250 million and

0.25% of the average daily net assets thereafter.

As a result of the fee waivers and expense absorption then in effect for the
fiscal years ended July 31, 2000, July 31, 1999 and July 31, 1998, Money Fund
paid investment management fees of $2,142,078, $2,616,000, and $332,000,
respectively.

For the fiscal year ended July 31, 2000 and the period November 30, 1998
(commencement of operations) to July 31, 1999, Government Money Fund paid
investment management fees of $0 and $0, respectively.

For the fiscal year ended July 31, 2000 and the period November 30, 1998
(commencement of operations) to July 31, 1999, the Muni Money Fund paid
investment management fees of $0 and $0, respectively.

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<PAGE>

If expense limits had not been in effect the Advisor would have received
investment management fees from Money Fund of $3,335,656, $3,811,363, and
$3,252,000 for the fiscal years ended July 31, 2000, July 31, 1999 and July 31,
1998 respectively.

If the expense limits had not been in effect for Government Fund and Muni Money
Fund the Advisor would have received investment management fees in the amount of
$1,288,103 and $857,334 for the fiscal period ended July 31, 2000.

The Advisor absorbed operating expenses for Money Fund, $1,193,578, $1,195,000,
and $3,133,000 for the fiscal years ended July 31, 2000, July 31, 1999 and July
31, 1998 respectively.

For Government Fund, the Advisor absorbed operating expenses of $1,288,103 and
$437,000 respectively for the fiscal periods ended July 31, 2000 and July 31,
1999.

For Muni Money Fund, the Advisor absorbed operating expenses of $857,334 and
$185,000 respectively for the fiscal periods ended July 31, 2000 and July 31,
1999.

Fund Accounting Agent. Scudder Fund Accounting Corporation ("SFAC"), Two
International Place, Boston, Massachusetts 02110, a subsidiary of the Advisor,
is responsible for determining the daily net asset value per share of the Funds
and maintaining all accounting records related thereto. Currently, SFAC receives
no fee for its services to Money Fund; however, subject to Board approval, at
some time in the future, SFAC may seek payment for its services to Money Fund
under this agreement. Government Money Fund and the Muni Money Fund pay SFAC an
annual fee equal to 0.0200% of the first $150 million of average daily net
assets, 0.0060% of such assets in excess of $150 million and 0.0035% of such
assets in excess of $1 billion, plus holding and transaction charges for this
service.

For the fiscal year ended July 31, 2000, Government Money Fund and Muni Money
Fund paid accounting fees of $0 and $0, respectively.

For the period November 30, 1998 to July 31, 1999, Government Money Fund and
Muni Money Fund paid accounting fees of $0 and $0, respectively.

Principal Underwriter. Kemper Distributors, Inc. ("KDI"), 222 South Riverside
Plaza, Chicago, Illinois 60606, an affiliate of the Advisor, is the principal
underwriter for shares of the Funds and acts as agent of the Funds in the sale
of their shares. The Funds pay the cost for the prospectus and shareholder
reports to be set in type and printed for existing shareholders, and KDI pays
for the printing and distribution of copies thereof used in connection with the
offering of shares to prospective investors. KDI also pays for supplementary
sales literature and advertising costs. Terms of continuation, termination and
assignment under the underwriting agreement are identical to those described
above with regard to the investment management agreements, except that
termination other than upon assignment requires six months notice. KDI receives
no compensation from the Funds as principal underwriter for the Funds' shares
and pays all expenses of distribution of the Funds' shares.

Certain officers or trustees of the Trust are also directors or officers of the
Advisor and KDI as indicated under "Officers and Trustees."

Custodian, Transfer Agent and Shareholder Service Agent. State Street Bank and
Trust Company ("State Street"), 225 Franklin Street, Boston, Massachusetts
02110, as custodian, has custody of all securities and cash of the Money Funds.
State Street, as custodian, has custody of all securities and cash of Government
Money Fund and the Muni Money Fund. State Street attends to the collection of
principal and income, and payment for and collection of proceeds bought and sold
by the Funds. State Street also acts as transfer agent for the Funds. Pursuant
to a services agreement with State Street and Kemper Service Company ("KSvC"),
an affiliate of the Advisor, serves as "Shareholder Service Agent." State Street
receives, as transfer agent, annual account fees of a maximum of $8 per account
plus out-of-pocket expense reimbursement. Effective January 1, 1999, this
schedule was amended to include a $10 annual

12
<PAGE>

account fee, a $5 new account set up fee, an annual asset based fee of 0.06% of
average daily net assets and out-of-pocket expense reimbursement

Prior to August 31, 2000, Investors Fiduciary Trust Company ("IFTC"), acted as
Transfer Agent for the funds.

During the fiscal year ended July 31, 2000, IFTC remitted shareholder service
fees for Money Fund in the amount of $554,339, of which $158,277 is unpaid at
July 31, 2000, for Government Money Fund of $102,130, of which $34,105 is unpaid
at July 31, 2000, and for Muni Money Fund of $137,988, of which $36,316 is
unpaid at July 31, 2000 to KSvC as Shareholder Service Agent.

During the fiscal year ended July 31, 1999, IFTC remitted shareholder service
fees for Money Fund in the amount of $455,000, for Government Money Fund of $0,
and for Muni Money Fund of $0 to KSvC as Shareholder Service Agent.

Independent Auditors and Reports To Shareholders. The Funds' independent
auditors, Ernst & Young LLP, 233 South Wacker Drive, Chicago, Illinois 60606,
audit and report on the Funds' annual financial statements, review certain
regulatory reports and the Funds' federal income tax return, and perform other
professional accounting, auditing, tax and advisory services when engaged to do
so by the Funds. Shareholders will receive annual audited financial statements
and semi-annual unaudited financial statements.

Legal Counsel. Vedder, Price, Kaufman & Kammholz, 222 North LaSalle Street,
Chicago, Illinois 60601, serves as legal counsel to the Funds.

PORTFOLIO TRANSACTIONS

Brokerage

Allocation of brokerage is supervised by the Advisor.

Portfolio transactions are undertaken principally to pursue the objective of
each Fund in relation to movements in the general level of interest rates, to
invest money obtained from the sale of Fund shares, to reinvest proceeds from
maturing portfolio securities and to meet redemptions of Fund shares. This may
increase or decrease the yield of a Fund depending upon the Advisor's ability to
correctly time and execute such transactions. Since a Fund's assets are invested
in securities with short maturities, its portfolio will turn over several times
a year. Securities with maturities of less than one year are excluded from
required portfolio turnover rate calculations, so each Fund's portfolio turnover
rate for reporting purposes should generally be zero.

The primary objective of the Advisor in placing orders for the purchase and sale
of securities for a Fund's portfolio is to obtain the most favorable net results
taking into account such factors as price, commission where applicable, size of
order, difficulty of execution and skill required of the executing
broker/dealer. The Advisor seeks to evaluate the overall reasonableness of
brokerage commissions paid (to the extent applicable) through its familiarity
with commissions charged on comparable transactions, as well as by comparing
commissions paid by a Fund to reported commissions paid by others. The Advisor
reviews on a routine basis commission rates, execution and settlement services
performed, making internal and external comparisons.

When it can be done consistently with the policy of obtaining the most favorable
net results, it is the Advisor's practice to place such orders with
broker/dealers who supply research, market and statistical information to a
Fund. The term "research, market and statistical information" includes advice as
to the value of securities: the advisability of investing in, purchasing or
selling securities; the availability of securities or purchasers or sellers of
securities; and analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy and the performance of accounts.
The Advisor is

13
<PAGE>

authorized when placing portfolio transactions for a Fund to pay a brokerage
commission in excess of that which another broker might charge for executing the
same transaction solely on account of the receipt of research, market or
statistical information. In effecting transactions in over-the-counter
securities, orders are placed with the principal market makers for the security
being traded unless, after exercising care, it appears that more favorable
results are available elsewhere.

In selecting among firms believed to meet the criteria for handling a particular
transaction, the Advisor may give consideration to those firms that have sold or
are selling shares of a fund managed by the Advisor.

To the maximum extent feasible, it is expected that the Advisor will place
orders for portfolio transactions through Scudder Investor Services, Inc.
("SIS"), a corporation registered as a broker-dealer and a subsidiary of the
Advisor. SIS will place orders on behalf of a Fund with issuers, underwriters or
other brokers and dealers. SIS will not receive any commission, fee or other
remuneration from a Fund for this service.

Although certain research, market and statistical information from
broker/dealers may be useful to a Fund and to the Advisor, it is the opinion of
the Advisor that such information only supplements its own research effort since
the information must still be analyzed, weighed and reviewed by the Advisor's
staff. Such information may be useful to the Advisor in providing services to
clients other than the Fund and not all such information is used by the Advisor
in connection with the fund. Conversely, such information provided to the
Advisor by broker/dealers through whom other clients of the Advisor effect
securities transactions may be useful to the Advisor in providing services to a
Fund.

The trustees review from time to time whether the recapture for the benefit of a
Fund of some portion of the brokerage commissions or similar fees paid by a Fund
on portfolio transactions is legally permissible and advisable.

Money market instruments are normally purchased in principal transactions
directly from the issuer or from an underwriter or market maker. There usually
are no brokerage commissions paid by the Funds for such purchases. Purchases
from underwriters will include a commission or concession paid by the issuer to
the underwriter, and purchases from dealers serving as market makers will
include the spread between the bid and asked prices.

There are normally no brokerage commissions paid by the Funds for such purchases
and none were paid by Money Fund, Government Money Fund or Muni Money Fund since
they commenced operations.

PURCHASE AND REDEMPTION OF SHARES

Purchase of Shares

Shares of each Fund are sold at their net asset value next determined after an
order and payment are received in the form described in the Funds' prospectus.
There is no sales charge. The minimum initial investment in any Fund is $25,000
($10,000 for IRAs) and the minimum subsequent investment is $1,000 but such
minimum amounts may be changed at any time. See the prospectus for certain
exceptions to these minimums. The Funds may waive the minimum for purchases by
trustees, directors, officers or employees of the Funds or the Advisor and its
affiliates. An investor wishing to open an account should use the account
application form available from the Funds and choose one of the methods of
purchase described in the Funds' prospectus. Since each Fund will be investing
in instruments that normally require immediate payment in Federal Funds (monies
credited to a bank's account with its regional Federal Reserve Bank), each Fund
has adopted procedures for the convenience of its shareholders and to ensure
that each Fund receives investable funds. An order for the purchase of shares
that is accompanied by a check drawn on a foreign bank (other than a check drawn
on a Canadian bank in U.S. Dollars) will not be considered in proper form and
will not be processed unless and until the Fund determines that it has received
payment of the proceeds of the check. The time required for such a determination
will vary and cannot be determined in advance.

14
<PAGE>

If shares of a Fund to be redeemed were purchased by check or through certain
Automated Clearing House ("ACH") transactions, the Fund may delay transmittal of
redemption proceeds until it has determined that collected funds have been
received for the purchase of such shares, which will be up to 10 days from
receipt by the Fund of the purchase amount. Shareholders may not use expedited
redemption procedures (wire transfer or Redemption Check) until the shares being
redeemed have been owned for at least 10 days, and shareholders may not use such
procedures to redeem shares held in certificated form. There is no delay when
shares being redeemed were purchased by wiring Federal Funds.

Orders for purchase of shares of a Fund received by wire transfer in the form of
Federal Funds will be effected at the next determined net asset value. Shares
purchased by wire will receive (i) that day's dividend if effected at or prior
to the 1:00 p.m. Central time net asset value determination for Money Fund and
Government Money Fund and at or prior to the 11:00 a.m. Central time net asset
value determination for the Muni Money Fund otherwise the dividend for the next
calendar day if effected at the 3:00 p.m. Central time net asset value
determination.

Orders for purchase accompanied by a check or other negotiable bank draft will
be accepted and effected as of 3:00 p.m. Central time on the next business day
following receipt and such shares will receive the dividend for the next
calendar day following the day the purchase is effected. If an order is
accompanied by a check drawn on a foreign bank, funds must normally be collected
on such check before shares will be purchased.

If payment is wired in Federal Funds, the payment should be directed to Zurich
YieldWise Funds: United Missouri Bank of Kansas City, N.A. (ABA #1010-0069-5)
Zurich YieldWise Money Fund: 98-7083-881-8, or Zurich YieldWise Government Money
Fund: 98-7096-453-8 or, Zurich YieldWise Municipal Money Fund: 98-7096-4535-4.

Redemption of Shares.

Upon receipt by the Shareholder Service Agent of a request for redemption in
proper form, shares will be redeemed by a Fund at the applicable net asset value
as described in the Funds' prospectus. If processed at 3:00 p.m. Central time,
the shareholders will receive that day's dividend. A shareholder may elect to
use either the regular or expedited redemption procedures. Shareholders who
redeem shares of a Fund will receive the net asset value of such shares and all
declared but unpaid dividends on such shares.

The Funds may suspend the right of redemption or delay payment more than seven
days (a) during any period when the New York Stock Exchange ("Exchange") is
closed other than customary weekend and holiday closings or during any period in
which trading on the Exchange is restricted, (b) during any period when an
emergency exists as a result of which (i) disposal of a Fund's investments is
not reasonably practicable, or (ii) it is not reasonably practicable for a Fund
to determine the value of its net assets, or (c) for such other periods as the
Securities and Exchange Commission may by order permit for the protection of the
Funds' shareholders.

Although it is each Fund's present policy to redeem in cash, if the Board of
Trustees determines that a material adverse effect would be experienced by the
remaining shareholders if payment were made wholly in cash, a Fund will pay the
redemption price in part by a distribution of portfolio securities in lieu of
cash, in conformity with the applicable rules of the Securities and Exchange
Commission, taking such securities at the same value used to determine net asset
value, and selecting the securities in such manner as the Board of Trustees may
deem fair and equitable. If such a distribution occurs, shareholders receiving
securities and selling them could receive less than the redemption value of such
securities and in addition could incur certain transaction costs. Such a
redemption would not be as liquid as a redemption entirely in cash. The Trust
has elected to be governed by Rule 18f-1 under the 1940 Act pursuant to which
the Trust is obligated to redeem shares of a Fund solely in cash up to the
lesser of $250,000 or 1% of the net assets of the Fund during any 90-day period
for any one shareholder of record.

15
<PAGE>

Regular Redemptions. When shares are held for the account of a shareholder by
the Trust's transfer agent, the shareholder may redeem them by sending a written
request with signatures guaranteed to Kemper Service Company, P.O. Box 219557,
Kansas City, Missouri 64121-9557. When certificates for shares have been issued,
they must be mailed to or deposited with the Shareholder Service Agent, along
with a duly endorsed stock power and accompanied by a written request for
redemption. Redemption requests and a stock power must be endorsed by the
account holder with signatures guaranteed by a commercial bank, trust company,
savings and loan association, federal savings bank, member firm of a national
securities exchange or other eligible financial institution. The redemption
request and stock power must be signed exactly as the account is registered
including any special capacity of the registered owner. Additional documentation
may be requested, and a signature guarantee is normally required, from
institutional and fiduciary account holders, such as corporations, custodians
(e.g., under the Uniform Transfers to Minors Act), executors, administrators,
trustees or guardians.

Telephone Redemptions. If the proceeds of the redemption are $50,000 or less and
the proceeds are payable to the shareholder of record at the address of record,
normally a telephone request or a written request by any one account holder
without a signature guarantee is sufficient for redemptions by individual or
joint account holders, and trust, executor, guardian and custodian account
holders, provided the trustee, executor guardian or custodian is named in the
account registration. Other institutional account holders may exercise this
special privilege of redeeming shares by telephone request or written request
without signature guarantee subject to the same conditions as individual account
holders and subject to the limitations on liability, provided that this
privilege has been pre-authorized by the institutional account holder or
guardian account holder by written instruction to the Shareholder Service Agent
with signatures guaranteed. Shares purchased by check or through certain ACH
transactions may not be redeemed under this privilege of redeeming shares by
telephone request until such shares have been owned for at least 10 days. This
privilege of redeeming shares by telephone request or by written request without
a signature guarantee may not be used to redeem shares held in certificate form
and may not be used if the shareholder's account has had an address change
within 30 days of the redemption request. During periods when it is difficult to
contact the Shareholder Service Agent by telephone, it may be difficult to use
the telephone redemption privilege, although investors can still redeem by mail.
Each Portfolio reserves the right to terminate or modify this privilege at any
time.

Expedited Wire Transfer Redemptions. If the account holder has given
authorization for expedited wire redemption to the account holder's brokerage or
bank account, shares can be redeemed and proceeds sent by a federal wire
transfer to a single previously designated account. Requests received by the
Shareholder Service Agent prior to 11:00 a.m. Central time will result in shares
being redeemed that day and normally the proceeds will be sent to the designated
account that day. Once authorization is on file, the Shareholder Service Agent
will honor requests by telephone at 1-800-621-1048 or in writing, subject to the
limitations on liability. A Fund is not responsible for the efficiency of the
federal wire system or the account holder's financial services firm or bank.
Each Fund currently does not charge the account holder for wire transfers. The
account holder is responsible for any charges imposed by the account holder's
firm or bank. There is a $1,000 wire redemption minimum. To change the
designated account to receive wire redemption proceeds, send a written request
to the Shareholder Service Agent with signatures guaranteed as described above,
or contact the firm through which shares of a Portfolio were purchased. Shares
purchased by check or through certain ACH transactions may not be redeemed by
wire transfer until the shares have been owned for at least 10 days. Account
holders may not use this procedure to redeem shares held in certificate form.
During periods when it is difficult to contact the Shareholder Service Agent by
telephone, it may be difficult to use the expedited wire transfer redemption
privilege. Each Fund reserves the right to terminate or modify this privilege at
any time.

Redemptions By Draft. Upon request, shareholders will be provided with drafts to
be drawn on a Fund ("Redemption Checks"). These Redemption Checks may be made
payable to the order of any person for not more than $5 million. Shareholders
should not write Redemption Checks in an amount less than $500 since a $10
service fee will be charged as described below. There is also a $2 fee for
writing a check on accounts less than $100,000. When a Redemption Check is
presented for payment, a sufficient number of full and fractional shares in the
shareholder's account will be redeemed as of the next determined net asset value
to cover the amount of the Redemption Check. This will enable the shareholder to
continue earning

16
<PAGE>

dividends until a Fund receives the Redemption Check. A shareholder wishing to
use this method of redemption must complete and file an Account Application
which is available from each Fund or firms through which shares were purchased.
Redemption Checks should not be used to close an account since the account
normally includes accrued but unpaid dividends. Each Fund reserves the right to
terminate or modify this privilege at any time. This privilege may not be
available through some firms that distribute shares of each Fund. In addition,
firms may impose minimum balance requirements in order to offer this feature.
Firms may also impose fees to investors for this privilege or establish
variations of minimum check amounts if approved by each Fund.

Unless one signer is authorized on the Account Application, Redemption Checks
must be signed by all account holders. Any change in the signature authorization
must be made by written notice to the Shareholder Service Agent. Shares
purchased by check or through certain ACH transactions may not be redeemed by
Redemption Check until the shares have been on a Portfolio's books for at least
10 days. Shareholders may not use this procedure to redeem shares held in
certificate form. Each Fund reserves the right to terminate or modify this
privilege at any time.

A Fund may refuse to honor Redemption Checks whenever the right of redemption
has been suspended or postponed, or whenever the account is otherwise impaired.
A $10 service fee will be charged when a Redemption Check is presented to redeem
Fund shares in excess of the value of a Fund account or in an amount less than
$500; when a Redemption Check is presented that would require redemption of
shares that were purchased by check or certain ACH transactions within 10 days;
or when "stop payment" of a Redemption Check is requested.

Special Features. Certain firms that offer Shares of a Fund also provide special
redemption features through charge or debit cards and checks that redeem Fund
Shares. Various firms have different charges for their services. Shareholders
should obtain information from their firm with respect to any special redemption
features, applicable charges, minimum balance requirements and special rules of
the cash management program being offered.

DIVIDENDS, NET ASSET VALUE AND TAXES

Dividends. Dividends are declared daily and paid monthly. Shareholders will
receive dividends in additional shares of the same Fund unless they elect to
receive cash. Dividends will be reinvested monthly at the net asset value
normally on the 25th of each month if a business day, otherwise on the prior
business day. The Funds will pay shareholders who redeem their entire accounts
all unpaid dividends at the time of redemption not later than the next dividend
payment date.

Each Fund calculates its dividends based on its daily net investment income. For
this purpose, the net investment income of a Fund consists of (a) accrued
interest income plus or minus amortized discount or premium (excluding market
discount for the Muni Money Fund), (b) plus or minus all short-term realized
gains and losses on portfolio assets and (c) minus accrued expenses allocated to
the Fund. Expenses of the Funds are accrued each day. While each Fund's
investments are valued at amortized cost, there will be no unrealized gains or
losses on portfolio securities. However, should the net asset value of a Fund
deviate significantly from market value, the Board of Trustees could decide to
value the portfolio securities at market value and then unrealized gains and
losses would be included in net investment income above.

Net Asset Value. As described in the prospectus, each Fund values its portfolio
instruments at amortized cost, which does not take into account unrealized
capital gains or losses. This involves initially valuing an instrument at its
cost and thereafter assuming a constant amortization to maturity of any discount
or premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument. While this method provides certainty in valuation, it
may result in periods during which value, as determined by amortized cost, is
higher or lower than the price the Fund would receive if it sold the instrument.
Calculations are made to compare the value of a Fund's investments valued at
amortized cost with market values. Market valuations are obtained by using
actual quotations provided by market makers, estimates of market value, or
values obtained from yield data relating to classes of money market instruments
published by reputable sources at the mean between the bid and asked prices for
the instruments. If a deviation of 1/2

17
<PAGE>

of 1% or more were to occur between the net asset value per share calculated by
reference to market values and a Fund's $1.00 per share net asset value, or if
there were any other deviation that the Board of Trustees of the Trust believed
would result in a material dilution to shareholders or purchasers, the Board of
Trustees would promptly consider what action, if any, should be initiated. If a
Fund's net asset value per share (computed using market values) declined, or
were expected to decline, below $1.00 (computed using amortized cost), the Board
of Trustees of the Trust might temporarily reduce or suspend dividend payments
in an effort to maintain the net asset value at $1.00 per share. As a result of
such reduction or suspension of dividends or other action by the Board of
Trustees, an investor would receive less income during a given period than if
such a reduction or suspension had not taken place. Such action could result in
investors receiving no dividends for the period during which they held shares
and receiving, upon redemption, a price per share lower than that which they
paid. On the other hand, if a Fund's net asset value per share (computed using
market values) were to increase, or were anticipated to increase, above $1.00
(computed using amortized cost), the Board of Trustees of the Trust might
supplement dividends in an effort to maintain the net asset value at $1.00 per
share.

Taxes. The Funds intend to continue to qualify under the Code as a regulated
investment company and, if so qualified, will not be liable for Federal income
taxes to the extent their earnings are distributed. The Funds also intend to
meet the requirements of the Code applicable to regulated investment companies
distributing tax-exempt interest dividends and, accordingly, dividends
representing net interest received on Municipal Securities will not be included
by shareholders in their gross income for Federal income tax purposes, except to
the extent such interest is subject to the alternative minimum tax as discussed
below. Dividends representing taxable net investment income (such as net
interest income from temporary investments in obligations of the U.S.
Government) and net short-term capital gains, if any, are taxable to
shareholders as ordinary income. Net interest on certain "private activity
bonds" issued on or after August 8,1986 is treated as an item of tax preference
and may, therefore, be subject to both the individual and corporate alternative
minimum tax. To the extent provided by regulations to be issued by the Secretary
of the Treasury, exempt-interest dividends from the Funds are to be treated as
interest on private activity bonds in proportion to the interest income the
Funds receive from private activity bonds, reduced by allowable deductions.

Exempt-interest dividends, except to the extent of interest from "private
activity bonds," are not treated as a tax-preference item. For a corporate
shareholder, however, such dividends will be included in determining such
corporate shareholder's "adjusted current earnings." Seventy-five percent of the
excess, if any, of "adjusted current earnings" over the corporate shareholder's
other alternative minimum taxable income with certain adjustments will be a
tax-preference item. Corporate shareholders are advised to consult their tax
advisers with respect to alternative minimum tax consequences.

Shareholders will be required to disclose on their Federal income tax returns
the amount of tax-exempt interest earned during the year, including
exempt-interest dividends received from the Funds.

Individuals whose modified income exceeds a base amount will be subject to
Federal income tax on up to 85% of their Social Security benefits. Modified
income includes adjusted gross income, tax-exempt interest, including
exempt-interest dividends from the Funds, and 50% of Social Security benefits.

The tax exemption of dividends from the Funds for Federal income tax purposes
does not necessarily result in exemption under the income or other tax laws of
any state or local taxing authority. The laws of the several states and local
taxing authorities vary with respect to the taxation of such income and
shareholders of the Funds are advised to consult their own tax advisers as to
the status of their accounts under state and local tax laws.

The Funds are required by law to withhold 31% of taxable dividends paid to
certain shareholders who do not furnish a correct taxpayer identification number
(in the case of individuals, a social security number) and in certain other
circumstances. Trustees of qualified retirement plans and 403(b)(7) accounts are
required by law to withhold 20% of the taxable portion of any distribution that
is eligible to be "rolled over." The 20% withholding requirement does not apply
to distributions from IRAs or any part of a

18
<PAGE>

distribution that is transferred directly to another qualified retirement plan,
403(b)(7) account, or IRA. Shareholders should consult their tax advisers
regarding the 20% withholding requirement.

Interest on indebtedness which is incurred to purchase or carry shares of a
mutual fund portfolio which distributes exempt-interest dividends during the
year is not deductible for federal income tax purposes. Further, the Muni Money
Fund may not be an appropriate investment for persons who are `substantial
users' of facilities financed by industrial development bonds held by the Muni
Money Fund or are `related persons' to such users; such persons should consult
their tax advisers before investing in the Muni Money Fund.

Shareholders normally will receive monthly confirmations of dividends and of
purchase and redemption transactions except that confirmations of dividend
reinvestment for IRAs and other fiduciary accounts for which Investors Fiduciary
Trust Company serves as trustee will be sent quarterly. Firms may provide
varying arrangements with their clients with respect to confirmations. Tax
information will be provided annually. Shareholders are encouraged to retain
copies of their account confirmation statements or year-end statements for tax
reporting purposes. However, those who have incomplete records may obtain
historical account transaction information at a reasonable fee.

PERFORMANCE

From time to time, the Trust may advertise several types of performance
information for a Fund, including "yield", "effective yield" and, for Muni Money
Fund only, "tax equivalent yield." Each of these figures is based upon
historical earnings and is not representative of the future performance of the
Fund. The yield of the Fund refers to the net investment income generated by a
hypothetical investment in the Fund over a specific seven-day period. This net
investment income is then annualized, which means that the net investment income
generated during the seven-day period is assumed to be generated each week over
an annual period and is shown as a percentage of the investment. The effective
yield is calculated similarly, but the net investment income earned by the
investment is assumed to be compounded when annualized. The effective yield will
be slightly higher than the yield due to this compounding effect.

Each Fund's seven-day yield is computed in accordance with a standardized method
prescribed by rules of the Securities and Exchange Commission. Under that
method, the yield quotation is based on a seven-day period and is computed for
the Fund as follows. The first calculation is net investment income per share,
which is accrued interest on portfolio securities, plus or minus amortized
discount or premium, less accrued expenses. This number is then divided by the
price per share (expected to remain constant at $1.00) at the beginning of the
period ("base period return"). The result is then divided by 7 and multiplied by
365 and the resulting yield figure is carried to the nearest one-hundredth of
one percent. Realized capital gains or losses and unrealized appreciation or
depreciation of investments are not included in the calculations. Each Fund's
effective yield is determined by taking the base period return (computed as
described above) and calculating the effect of assumed compounding. The formula
for the effective yield is: (base period return + 1)^365/7-1.

Each Fund's seven-day effective yield is determined by taking the base period
return (computed as described above) and calculating the effect of assumed
compounding. The formula for the seven-day effective yield is: (seven-day base
period return +1)365/7 - 1. Each Fund may also advertise a thirty-day effective
yield in which case the formula is (thirty-day base period return +1)365/30 - 1.

The tax equivalent yield of Muni Money Fund is computed by dividing that portion
of the Portfolio's yield (computed as described above) which is tax-exempt by
(one minus the stated Federal income tax rate) and adding the product to that
portion, if any, of the yield of the Fund that is not tax-exempt. For additional
information concerning tax-exempt yields, see "Tax- Free versus Taxable Yield"
below.

Average annual total return ("AATR") is found for a specific period by first
taking a hypothetical $1,000 investment ("initial investment") on the first day
of the period and computing the "redeemable value" of

19
<PAGE>

that investment at the end of the period. The redeemable value is then divided
by the initial investment, and this quotient is taken to the Nth root (N
representing the number of years in the period) and 1 is subtracted from the
result, which is then expressed as a percentage. The calculation assumes that
all dividends have been reinvested at net asset value on the reinvestment dates.

Total return is not calculated according to a standard formula, except when
calculated for the "Financial Highlights" table in the financial statements.
Total return is calculated similarly to AATR but is not annualized. It may be
shown as a percentage or the increased dollar value of the hypothetical
investment over the period.

All performance information shown below is for periods ended July 31,
2000.

<TABLE>
<CAPTION>
*Tax-
Effective Equivalent Total
Yield Yield Yield AATR AATR Since Return Total Return
Fund 7 days 7 days 7 days 1 yr. Inception* 1 yr. Since Inception*
---- ------ ------ ------ ----- ---------- ----- ----------------

<S> <C> <C> <C> <C> <C> <C> <C>
Money Fund** 6.42% 6.62% N/A 5.88% 5.60% 5.88% 19.64%

Government Fund** 6.50% 6.72% N/A 5.94% 5.54% 5.94% 9.42%

Muni Money Fund** 4.37% 4.41% 6.86% 3.96% 3.62% 3.96% 6.12%

</TABLE>

* Money Fund commenced operations on April 17, 1997. Government Money Fund
and the Muni Money Fund commenced operations on November 30, 1998.

** The Total Return and AATR would have been lower without the effect of the
fee waiver and expense absorption for Money Fund, Government Money Fund and
Muni Money Fund.

Each Fund's yield fluctuates, and the publication of an annualized yield
quotation is not a representation as to what an investment in a Fund will
actually yield for any given future period. Actual yields will depend not only
on changes in interest rates on money market instruments during the period in
which the investment in a Fund is held, but also on such matters as Fund
expenses.

The performance of the Funds may be compared to that of other mutual funds
tracked by Lipper Analytical Services, Inc. ("Lipper"). Lipper performance
calculations include the reinvestment of all capital gain and income dividends
for the periods covered by the calculations. A Fund's performance also may be
compared to other money market funds reported by IBC Financial Data, Inc.'s
Money Fund Report(R) or Money Market Insight(R), reporting services on money
market funds. As reported by IBC, all investment results represent total return
(annualized results for the period net of management fees and expenses) and one
year investment results are effective annual yields assuming reinvestment of
dividends.

A Fund's performance also may be compared to various bank products, including
the average rate of bank and thrift institution money market deposit accounts,
interest bearing checking accounts and certificates of deposit as reported in
the BANK RATE MONITOR National Index(TM) of 100 leading bank and thrift
institutions as published by the BANK RATE MONITOR(TM), N. Palm Beach, Florida
33408. The rates published by the BANK RATE MONITOR National Index(TM) are
averages of the personal account rates offered on the Wednesday prior to the
date of publication by 100 large banks and thrifts in the top ten Consolidated
Standard Metropolitan Statistical Areas.

20
<PAGE>

With respect to money market deposit accounts and interest bearing checking
accounts, account minimums range upward from $2,000 in each institution and
compounding methods vary. Interest bearing checking accounts generally offer
unlimited check writing while money market deposit accounts generally restrict
the number of checks that may be written. If more than one rate is offered, the
lowest rate is used. Rates are determined by the financial institution and are
subject to change at any time specified by the institution. Generally, the rates
offered for these products take market conditions and competitive product yields
into consideration when set. Bank products represent a taxable alternative
income producing product. Bank and thrift institution deposit accounts may be
insured. Shareholder accounts in the Fund are not insured. Bank passbook savings
accounts compete with money market mutual fund products with respect to certain
liquidity features but may not offer all of the features available from a money
market mutual fund, such as check writing. Bank passbook savings accounts
normally offer a fixed rate of interest while the yield of the Funds fluctuates.
Bank checking accounts normally do not pay interest but compete with money
market mutual fund products with respect to certain liquidity features (e.g.,
the ability to write checks against the account). Bank certificates of deposit
may offer fixed or variable rates for a set term. (Normally, a variety of terms
are available.) Withdrawal of these deposits prior to maturity will normally be
subject to a penalty. In contrast, shares of the Funds are redeemable at the net
asset value (normally, $1.00 per share) next determined after a request is
received.

Investors may also want to compare a Fund's performance to that of U.S. Treasury
bills or notes because such instruments represent alternative income producing
products. Treasury obligations are issued in selected denominations. Rates of
U.S. Treasury obligations are fixed at the time of issuance and payment of
principal and interest is backed by the full faith and credit of the U.S.
Treasury. The market value of such instruments will generally fluctuate
inversely with interest rates prior to maturity and will equal par value at
maturity. Generally, the values of obligations with shorter maturities will
fluctuate less than those with longer maturities. Each Fund's yield will
fluctuate. Also, while each Fund seeks to maintain a net asset value per share
of $1.00, there is no assurance that it will be able to do so.

Tax-Free versus Taxable Yield. You may want to determine which
investment--tax-free or taxable--will provide you with a higher after-tax
return. To determine the taxable equivalent yield, simply divide the yield from
the tax-free investment by the sum of [1 minus your marginal tax rate]. The
tables below are provided for your convenience in making this calculation for
selected tax-free yields and taxable income levels. These yields are presented
for purposes of illustration only and are not representative of any yield that
the Muni Money Fund may generate. Both tables are based upon current law as to
the 1999 federal tax rate schedules.

Taxable Equivalent Yield Table for Persons Whose Adjusted Gross Income is Under
$126,600

<TABLE>
<CAPTION>
Your
Marginal A Tax-Exempt Yield of:
Taxable Income Federal Tax 2% 3% 4% 5% 6% 7%
Single Joint Rate Is Equivalent to a Taxable Yield of:
------------------------ -------------------- --------------- ------- ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$25,750-$62,450 $43,051-$104,050 28.0% 2.78% 4.17% 5.56% 6.94% 8.33% 9.72%
------------------------ -------------------- --------------- ------- ------- ------- ------- ------- ---------
Over $62,450 Over $104,050 31.0 2.90% 4.35% 5.80% 7.25% 8.70% 10.14%
------------------------ -------------------- --------------- ------- ------- ------- ------- ------- ---------
</TABLE>

Taxable Equivalent Yield Table for Persons Whose Adjusted
Gross Income is Over $126,600*

<TABLE>
<CAPTION>
Your
Marginal A Tax-Exempt Yield of:
Taxable Income Federal Tax 2% 3% 4% 5% 6% 7%
Single Joint Rate Is Equivalent to a Taxable Yield of:
------------------------ -------------------- --------------- ------- ------- ------- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$62,450-$130,250 $104,050-$158,550 31.9% 2.94% 4.41% 5.87% 7.34% 8.81% 10.28%
------------------------ -------------------- --------------- ------- ------- ------- ------- --------- --------
$130,250-$283,150 $158,550-$283,150 37.1 3.18% 4.77% 6.36% 7.95% 9.54% 11.13%
------------------------ -------------------- --------------- ------- ------- ------- ------- --------- --------
Over $283,150 Over $283,150 40.8 3.38% 5.07% 6.76% 8.45% 10.14% 11.82%
------------------------ -------------------- --------------- ------- ------- ------- ------- --------- --------
</TABLE>

* This table assumes a decrease of $3.00 of itemized deductions for each
$100 of adjusted gross income over $126,600. For a married couple with
adjusted gross income between $186,800 and $309,300 (single between
$126,600 and $247,000), add 0.7% to the above Marginal Federal Tax Rate
for each personal and dependency exemption. The taxable equivalent
yield is the tax-exempt yield divided by:

21
<PAGE>

100% minus the adjusted tax rate. For example, if the table tax rate is
37.1% and you are married with no dependents, the adjusted tax rate is
38.5% (37.1% + 0.7% + 0.7%). For a tax-exempt yield of 6%, the taxable
equivalent yield is about 9.8% (6% / (100% - 38.5%)).

OFFICERS AND TRUSTEES

The officers and trustees of the Trust, their birthdates, their principal
occupations and their affiliations, if any, with the Advisor and KDI, the
principal underwriter, or their affiliates, are as follows:

JOHN W. BALLANTINE (2/16/46), Trustee, 1500 North Lake Shore Drive, Chicago,
Illinois; First Chicago NBD Corporation/The First National Bank of Chicago:
1996-1998 Executive Vice President and Chief Risk Management Officer; 1995-1996
Executive Vice President and Head of International Banking; 1992-1995 Executive
Vice President, Chief Credit and Market Risk Officer.

LEWIS A. BURNHAM (1/8/33), Trustee, 16410 Avila Boulevard, Tampa, Florida;
Retired; formerly, Partner, Business Resources Group; formerly, Executive Vice
President, Anchor Glass Container Corporation.

LINDA C. COUGHLIN (1/1/52), Trustee*, Two International Place, Boston,
Massachusetts; Managing Director, Scudder Kemper.

DONALD L. DUNAWAY (3/8/37), Trustee, 7011 Green Tree Drive, Naples, Florida;
Retired; formerly, Executive Vice President, A.O. Smith Corporation (diversified
manufacturer).

ROBERT B. HOFFMAN (12/11/36), Trustee, 1530 North State Parkway, Chicago,
Illinois; Chairman, Harnischfeger Industries, Inc. (machinery for the mining and
paper industries); formerly, Vice Chairman and Chief Financial Officer, Monsanto
Company (agricultural, pharmaceutical and nutritional/food products); formerly,
Vice President, Head of International Operations, FMC Corporation (manufacturer
of machinery and chemicals).

DONALD R. JONES (1/17/30), Trustee, 182 Old Wick Lane, Inverness, Illinois;
Retired; Director, Motorola, Inc. (manufacturer of electronic equipment and
components); formerly, Executive Vice President and Chief Financial Officer,
Motorola, Inc.

THOMAS W. LITTAUER (4/26/55), Chairman, Trustee and Vice President*, Two
International Place, Boston, Massachusetts; Managing Director, Advisor;
formerly, Head of Broker Dealer Division of an unaffiliated investment
management firm during 1997; prior thereto, President of Client Management
Services of an unaffiliated investment management firm from 1991 to 1996.

SHIRLEY D. PETERSON (9/3/41), Trustee, 401 Rosemont Avenue, Frederick, Maryland;
President, Hood College; formerly, Partner, Steptoe & Johnson (attorneys); prior
thereto, Commissioner, Internal Revenue Service; prior thereto, Assistant
Attorney General (Tax), U.S. Department of Justice; Director, Bethlehem Steel
Corp.

WILLIAM P. SOMMERS (7/22/33), Trustee, 24717 Harbour View Drive, Ponte Vedra
Beach, Florida; Consultant and Director, SRI Consulting; prior thereto,
President and Chief Executive Officer, SRI International (research and
development); prior thereto, Executive Vice President, Iameter (medical
information and educational service provider); prior thereto, Senior Vice
President and Director, Booz, Allen & Hamilton Inc. (management consulting
firm); Director, PSI Inc., Evergreen Solar, Inc. and Litton Industries.

MARK S. CASADY (9/21/60), President*, 345 Park Avenue, New York, New York;
Managing Director, Advisor; formerly, Institutional Sales Manager of an
unaffiliated mutual fund distributor.

PHILIP J. COLLORA (11/15/45), Vice President and Secretary*, 222 South Riverside
Plaza, Chicago, Illinois; Senior Vice President, Advisor.

KATHRYN L. QUIRK (12/3/52), Vice President*, 345 Park Avenue, New York, New
York; Managing Director, Advisor.

22
<PAGE>

FRANK J. RACHWALSKI, JR. (3/26/45), Vice President*, 222 South Riverside Plaza,
Chicago, Illinois; Managing Director, Advisor.

LINDA J. WONDRACK (9/12/64), Vice President*, Two International Place, Boston,
Massachusetts; Senior Vice President, Advisor.

JOHN R. HEBBLE (6/27/58), Treasurer*, Two International Place, Boston,
Massachusetts; Senior Vice President, Advisor.

BRENDA LYONS (2/21/63), Assistant Treasurer*, Two International Place, Boston,
Massachusetts; Senior Vice President, Advisor.

CAROLINE PEARSON (4/1/62), Assistant Secretary*, Two International Place,
Boston, Massachusetts; Senior Vice President, Advisor; formerly, Associate,
Dechert Price & Rhoads (law firm) 1989 to 1997.

MAUREEN E. KANE (2/14/62), Assistant Secretary*, Two International Place,
Boston, Massachusetts; Vice President, Advisor; formerly, Assistant Vice
President of an unaffiliated investment management firm; prior thereto,
Associate Staff Attorney of an unaffiliated investment management firm;
Associate, Peabody & Arnold (law firm).

* Interested persons of the Funds as defined in the 1940 Act.

The trustees and officers who are "interested persons" as designated above
receive no compensation from the Funds. The table below shows amounts paid or
accrued to those trustees who are not designated "interested persons" during the
Trust's 2000 fiscal year.

<TABLE>
<CAPTION>
Aggregate Compensation Total Compensation
Advisor-Managed Funds Paid
Name of Trustee From Trust to Trustees*
--------------------------------------------------- --------------------------- -----------------------------

<S> <C> <C>
John W. Ballantine**............................. $4,200 $57,200
Lewis A. Burnham................................. 4,300 89,300
Donald L. Dunaway................................ 4,900 97,000
Robert B. Hoffman................................ 4,600 87,800
Donald R. Jones.................................. 4,600 87,800
Shirley D. Peterson.............................. 4,200 82,800
William P. Sommers............................... 4,200 82,800

</TABLE>

* Includes compensation for service on the Boards of 25 Kemper Funds with 43
fund portfolios. Each trustee currently serves as a trustee of 26 Kemper
Funds and 48 fund portfolios.

** Mr. Ballantine was elected to the Board on May 18, 1999

As of October 31, 2000, the Trustees and Officers as a group owned less than 1%
of the then outstanding shares of any Fund.

As of October 31, 2000, 5.76% of the outstanding shares of Zurich YieldWise
Government Money Fund were held in the name of Minnesota Valley National
Wildlife Refugee Trust, 11790 Highway 284, Cologne, MN 55322.

Except as stated above, as of October 31, 2000, no person owned of record more
than 5% of the outstanding shares of any Fund.

Code of Ethics. The Funds, the Advisor and principal underwriter have each
adopted codes of ethics under rule 17j-1 of the Investment Company Act. Board
members, officers of the Funds and employees of the Advisor and principal
underwriter are permitted to make personal securities transactions, including
transactions in securities that may be purchased or held by the Funds, subject
to requirements and

23
<PAGE>

restrictions set forth in the applicable Code of Ethics. The Advisor's Code of
Ethics contains provisions and requirements designed to identify and address
certain conflicts of interest between personal investment activities and the
interests of the Funds. Among other things, the Advisor's Code of Ethics
prohibits certain types of transactions absent prior approval, imposes time
periods during which personal transactions may not be made in certain
securities, and requires the submission of duplicate broker confirmations and
quarterly reporting of securities transactions. Additional restrictions apply to
portfolio managers, traders, research analysts and others involved in the
investment advisory process. Exceptions to these and other provisions of the
Advisor's Code of Ethics may be granted in particular circumstances after review
by appropriate personnel.

SPECIAL FEATURES

Automatic Withdrawal Plan. If you own $10,000 or more of a Fund's shares you may
provide for the payment from your account of any requested dollar amount to be
paid to you or your designated payee monthly, quarterly, semi-annually or
annually. Dividend distributions will be automatically reinvested at net asset
value. A sufficient number of full and fractional shares will be redeemed to
make the designated payment. Depending upon the size of the payments requested,
redemptions for the purpose of making such payments may reduce or even exhaust
the account. Additionally, there is a $1/month small account fee for account
balances under $10,000. The program may be amended on thirty days notice by the
Fund and may be terminated at any time by the shareholder or the Funds. The
minimum automatic withdrawal amount is $1,000 and the shareholder will be
charged a $5.00 fee for each withdrawal.

Tax-Sheltered Retirement Programs. The Shareholder Service Agent provides
retirement plan services and documents and can establish your account in any of
the following types of retirement plans:

o Traditional, Roth and Education Individual Retirement Accounts (IRAs)
with IFTC as custodian. This includes Savings Incentive Match Plan for
Employees of Small Employers ("SIMPLE"), IRA accounts and Simplified
Employee Pension Plan (SEP) IRA accounts and prototype documents.

o 403(b) Custodial Accounts also with IFTC as custodian. This type of
plan is available to employees of most non-profit organizations.

o Prototype money purchase pension and profit-sharing plans may be
adopted by employers. The maximum contribution per participant is the
lesser of 25% of compensation or $30,000.

Brochures describing the above plans, as well as providing model defined benefit
plans, target benefit plans, 457 plans, 401(k) plans, SIMPLE 401(k) plans and
materials for establishing them are available from the Shareholder Service Agent
upon request. The brochures for plans with State Street Bank and Trust as
custodian describe the current fees payable to State Street Bank and Trust for
its services as custodian. Investors should consult with their own tax advisers
before establishing a retirement plan.

SHAREHOLDER RIGHTS

The Trust generally is not required to hold meetings of its shareholders. Under
the Agreement and Declaration of Trust of the Trust ("Declaration of Trust"),
however, shareholder meetings will be held in connection with the following
matters: (a) the election or removal of trustees, if a meeting is called for
such purpose; (b) the adoption of any contract for which shareholder approval is
required by the 1940 Act; (c) any termination of the Trust or a Fund or a class
to the extent and as provided in the Declaration of Trust; (d) any amendment of
the Declaration of Trust (other than amendments changing the name of the Trust,
supplying any omission, curing any ambiguity or curing, correcting or
supplementing any defective or inconsistent provision thereof); and (e) such
additional matters as may be required by law, the Declaration of Trust, the
By-laws of the Trust, or any registration of the Trust with the Securities and
Exchange Commission or any state, or as the trustees may consider necessary or
desirable. The shareholders also would vote upon changes in fundamental
investment objectives, policies or restrictions.

24
<PAGE>

Each trustee serves until the next meeting of shareholders, if any, called for
the purpose of electing trustees and until the election and qualification of his
successor or until such trustee sooner dies, resigns, retires or is removed by a
majority vote of the shares entitled to vote (as described below) or a majority
of the trustees. In accordance with the 1940 Act (a) the Trust will hold a
shareholder meeting for the election of trustees at such time as less than a
majority of the trustees have been elected by shareholders, and (b) if, as a
result of a vacancy in the Board of Trustees, less than two-thirds of the
trustees have been elected by the shareholders, that vacancy will be filled only
by a vote of the shareholders.

Trustees may be removed from office by a vote of the holders of a majority of
the outstanding shares at a meeting called for that purpose, which meeting shall
be held upon the written request of the holders of not less than 10% of the
outstanding shares. Upon the written request of ten or more shareholders who
have been such for at least six months and who hold shares constituting at least
1% of the outstanding shares of the Trust stating that such shareholders wish to
communicate with the other shareholders for the purpose of obtaining the
signatures necessary to demand a meeting to consider removal of a trustee, the
Trust has undertaken to disseminate appropriate materials at the expense of the
requesting shareholders.

The Declaration of Trust provides that the presence at a shareholder meeting in
person or by proxy of at least 30% of the shares entitled to vote on a matter
shall constitute a quorum. Thus, a meeting of shareholders of the Trust could
take place even if less than a majority of the shareholders were represented on
its scheduled date. Shareholders would in such a case be permitted to take
action which does not require a larger vote than a majority of a quorum, such as
the election of trustees and ratification of the selection of auditors. Some
matters requiring a larger vote under the Declaration of Trust, such as
termination or reorganization of the Trust and certain amendments of the
Declaration of Trust, would not be affected by this provision; nor would matters
which under the 1940 Act require the vote of a "majority of the outstanding
voting securities" as defined in the 1940 Act.

The Declaration of Trust specifically authorizes the Board of Trustees to
terminate the Trust or any Fund or class by notice to the shareholders without
shareholder approval.

Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for obligations of the
Trust. The Declaration of Trust, however, disclaims shareholder liability for
acts or obligations of the Trust and requires that notice of such disclaimer be
given in each agreement, obligation, or instrument entered into or executed by
the Trust or the trustees. Moreover, the Declaration of Trust provides for
indemnification out of Trust property for all losses and expenses of any
shareholder held personally liable for the obligations of the Trust and the
Trust will be covered by insurance which the trustees consider adequate to cover
foreseeable tort claims. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is considered by the Advisor remote and
not material since it is limited to circumstances in which a disclaimer is
inoperative and the Trust itself is unable to meet its obligations.

25
<PAGE>

APPENDIX -- RATINGS OF INVESTMENTS

COMMERCIAL PAPER RATINGS

A-1, A-2; Prime-1, Prime-2, Duff-1, Duff-2; And F-1, F-2
Commercial Paper Ratings

Commercial paper rated by Standard & Poor's Corporation has the following
characteristics: Liquidity ratios are adequate to meet cash requirements.
Long-term senior debt is rated "A" or better. The issuer has access to at least
two additional channels of borrowing. Basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances. Typically, the
issuer's industry is well established and the issuer has a strong position
within the industry. The reliability and quality of management are unquestioned.
Relative strength or weakness of the above factors determine whether the
issuer's commercial paper is rated A-1, A-2 or A-3.

The ratings Prime-1 and Prime-2 are the two highest commercial paper ratings
assigned by Moody's Investors Service, Inc. Among the factors considered by it
in assigning ratings are the following: (1) evaluation of the management of the
issuer; (2) economic evaluation of the issuer's industry or industries and an
appraisal of speculative-type risks which may be inherent in certain areas; (3)
evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength of a parent
company and the relationships which exist with the issuer; and (8) recognition
by the management of obligations which may be present or may arise as a result
of public interest questions and preparations to meet such obligations. Relative
strength or weakness of the above factors determines whether the issuer's
commercial paper is rated Prime-1, 2 or 3.

The rating Duff-1 is the highest commercial paper rating assigned by Duff &
Phelps Inc. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors that are supported by ample
asset protection. Risk factors are minor. Paper rated Duff-2 is regarded as
having good certainty of timely payment, good access to capital markets and
sound liquidity factors and company fundamentals. Risk factors are small.

The ratings F-1 and F-2 are the highest commercial paper ratings assigned by
Fitch Investors Services, Inc. Issues assigned a rating of F-1 are regarded as
having the strongest degree of assurance for timely payment. Issues assigned a
rating of F-2 have a satisfactory degree of assurance for timely payment, but
the margin of safety is not as great as for issues assigned an F-1 rating.

MIG-1 and MIG-2 Municipal Notes

Moody's ratings for state and municipal notes and other short-term loans 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 bond risk
are of lesser importance in the short run. Loans designated MIG-1 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. Loans designated MIG-2 are of high quality, with margins
of protection ample although not so large as in the preceding group.

STANDARD & POOR'S CORPORATION BOND RATINGS

AAA. This is the highest rating assigned by Standard & Poor's Corporation to a
debt obligation and indicates an extremely strong capacity to pay principal and
interest.

AA. Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.

26
<PAGE>

A. Bonds rated A have a strong capacity to pay principal and interest, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.

MOODY'S INVESTORS SERVICE, INC. BOND RATINGS

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

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

DUFF & PHELP'S INC. BOND RATINGS

AAA. Highest credit quality. The risk factors are negligible,
being only slightly more than for risk-free U.S. Treasury debt.

AA. High credit quality. Protection factors are strong. Risk
is modest but may vary slightly from time to time because of
economic conditions.

FITCH INVESTORS SERVICE, INC. BOND RATINGS

AAA. Highest credit quality. This rating denotes the lowest
degree of credit risk.

AA. Very high credit quality. This rating denotes a very low
expectation of credit risk.