EVERGREEN SELECT MONEY MARKET TRUST, 485APOS, 1999-04-29

EVERGREEN SELECT MONEY MARKET TRUST
485APOS, 1999-04-29

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1933 Act No. 333-37727
1940 Act No. 811-08405

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 4 [X]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 5 [X]

EVERGREEN SELECT MONEY MARKET TRUST
(Exact Name of Registrant as Specified in Charter)

200 Berkeley Street, Boston, Massachusetts 02116-5034
(Address of Principal Executive Offices)

(617) 210-3200
(Registrant's Telephone Number)

The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
(Name and Address of Agent for Service)

It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[X] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(11
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)

<PAGE>

EVERGREEN SELECT MONEY MARKET TRUST

CONTENTS OF
POST-EFFECTIVE AMENDMENT NO. 4
to
REGISTRATION STATEMENT

This Post-Effective Amendment No. 4 to Registrant's Registration Statement
No. 333-37227/811-08405 consists of the following pages, items of information
and documents:

The Facing Sheet

The Contents Page

The Cross-Reference Sheet

PART A
------

Prospectus for Evergreen Select Money Market Fund, Evergreen Select
Municipal Money Market Fund, Evergreen Select Treasury Money Market Fund and
Evergreen Select 100% Treasury Money Market Fund is contained herein.

PART B
------

Statement of Additional Information for Evergreen Select Money Market Fund,
Evergreen Select Municipal Money Market Fund, Evergreen Select Treasury Money
Market Fund and Evergreen Select 100% Treasury Money Market Fund are contained
herein.

PART C
------

Exhibits

Indemnification

Business and Other Connections of Investment Adviser

Principal Underwriter

Location of Accounts and Records

Undertakings

Signatures

<PAGE>

EVERGREEN SELECT MONEY MARKET TRUST

PART A

PROSPECTUSES

<PAGE>
EVERGREEN

Select
Money Market
Funds

Evergreen Select Money Market Fund
Evergreen Select Municipal Money Market Fund
Evergreen Select Treasury Money Market Fund
Evergreen Select 100% Treasury Money Market Fund

Institutional
Institutional Service

Prospectus, July 1, 1999

The Securities and Exchange Commission has not determined that the information
in this prospectus is accurate or complete, nor has it approved or disapproved
these securities. Anyone who tells you otherwise is committing a crime.

FUND SUMMARIES:
Evergreen Select Money Market Fund
Evergreen Select Municipal Money Market Fund
Evergreen Select Treasury Money Market Fund
Evergreen Select 100% Treasury
Money Market Fund
GENERAL INFORMATION:
The Funds' Investment Advisors
Calculating the Share Price
How to Choose an Evergreen Fund
How to Choose the Share Class
That Best Suits You
How to Buy Shares
How to Redeem Shares
Other Services
The Tax Consequences of
Investing in the Funds
Fees and Expenses of the Funds
Financial Highlights
Other Fund Practices

In general, Funds included in this prospectus seek to provide investors with
current income consistent with stability of principal and liquidity.

FUND SUMMARIES KEY
Each Fund's summary is organized around the following basic topics and
questions:

INVESTMENT GOAL
What is the Fund's financial objective? You can find clarification on how the
Fund seeks to achieve its objective by looking at the Fund's strategy and
investment policies. The Fund's Board of Trustees can change the investment
objective without a shareholder vote.

INVESTMENT STRATEGY
How does the Fund go about trying to meet its goals? What types of investments
does it contain? What style of investing and investment philosophy does it
follow? Does it have limits on the amount invested in any particular type of
security?

RISK FACTORS
What are the specific risks for an investor in the Fund?

PERFORMANCE
How well has the Fund performed in the past year? The past five years? The past
ten years?

EXPENSES
How much does it cost to invest in the Fund? What is the difference between
sales charges and expenses?

OVERVIEW

Select Money
Market Funds

Typically rely on one or a combination of the following strategies:
investing $1.00 per share net asset value;

investing a portion of their assets in securities issued or guaranteed
by the U.S. government or its agencies or instrumentalities; and

investing in compliance with industry-standard requirements for money
market funds for the quality, maturity and diversification of
investments.

may be appropriate for investors who:

are seeking a conservative investment which invests in

relatively safe securities.

are seeking a Fund for short-term investment.

are seeking current income exempt from federal income taxes (Municipal Money
Market Fund).

Following this overview, you will find information on each Money market Fund's
specific investment strategies and risks. Risk Factors For All Mutual Funds

Please remember that mutual fund shares are:
not guaranteed to achieve their investment goal
not insured, endorsed or guaranteed by the FDIC, a bank or any
government agency
subject to investment risks, including possible loss of
your original investment

Although Select Money Market Funds seek to preserve the value of your investment
at $1.00 per share, it is possible to lose money by investing in the Funds.

Here are the most important factors that may affect the value of your
investment:

Interest Rate Risk
When interest rates go up, the value of debt securities tends to fall. Since
your Fund invests a significant portion of its portfolio in debt securities if
interest rates rise, then the value of and total return earned on your
investment may decline. When interest rates go down, interest earned by your
Fund on its debt securities may also decline, which could cause the Fund to
reduce the dividends it pays.

Credit Risk
The value of a debt security is directly affected by the issuer's ability to
repay principal and pay interest on time. Since your Fund invests in debt
securities, the value of and total return earned on your investment may decline
if an issuer fails to pay an obligation on a timely basis.

Select Money
Market Fund

FUND FACTS:

Goal:
High Current Income
Preservation of Capital
Liquidity

Principal Investment:
Short-term Corporate Debt Securities

Classes of Shares Offered in this Prospectus:
Institutional
Institutional Service

Investment Advisor:
Evergreen Investment Management

NASDAQ Symbol:
EMIXX (Institutional)
EMSXX (Institutional Service)

Dividend Payment Schedule:
Monthly

INVESTMENT GOAL
The Fund seeks as high a level of current income as is consistent with
preserving capital and providing liquidity.

INVESTMENT STRATEGY
The following supplements the investment strategies discussed in the "Overview"
on page 1.

The Fund will invest principally in short-term corporate debt securities. In
addition, the Fund may invest in any security issued or guaranteed by the U.S.
government or its agencies or instrumentalities, including the Interamerican
Development Bank and the International Bank for Reconstruction and Development.
The Fund may also invest in commercial paper and bank obligations.

RISK FACTORS
Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:

Interest Rate Risk
Credit Risk

For further information regarding the Fund's investment strategy and risk
factors see "Other Fund Practices."

PERFORMANCE
The following charts show how the Fund has performed in the past. Past
performance is not an indication of future results.

The chart below shows the percentage gain or loss for Institutional shares of
the Fund in each calendar year since the Institutional shares' inception on
11/19/96. It should give you a general idea of how the Fund's return has varied
from year-to-year. This graph includes the effects of Fund expenses.

Year-by-Year Total Return for Institutional Shares (%)

1997 1998

5.70% 5.63%

Best Quarter: 4th Quarter 1997 +1.43%
Worst Quarter: 4th Quarter 1998 +1.34%

Year to date total return through 3/31/99 is 1.24%.

The next table lists the Fund's average annual total return by class over the
past one year and since inception (through 12/31/98). This table is intended to
provide you with some indication of the risks of investing in the Fund. At the
bottom of the table you can compare this performance with the 91 Day Treasury
Bills Index, which is ____________________________________________; it is not an
actual investment.

Average Annual Total Return
(for the period ended 12/31/98)
Inception Performance
Date Since
Of Class 1 year 5 year 10 year 11/19/96
Institutional 11/19/96 5.63% N/A N/A 5.67%
Institutional
Service 11/26/96 5.36% N/A N/A 5.41%
91 Day Treasury
Bills Index ___% ___% ___% ___%*
* Performance since 11/26/96 is ____%..

To obtain yield information call 1-800-343-2898.

EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.

You pay no shareholder transaction fees.

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)*
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses**
Institutional .15% .00% .07% .22%
Institutional
Service .15% .25% .07% .47%

*Actual for the fiscal year ended 2/28/99.
**After fee waivers, net expense ratios were .21% for Institutional shares and
.46% for Institutional Service shares.

The table below shows the total expenses you would pay on a $10,000 investment
over one-, three-, five- and ten-year periods. The example is intended to help
you compare the cost of investing in this Fund versus other mutual funds and is
for illustration only. The example assumes a 5% average annual return and that
you reinvest all of your dividends. Your actual costs may be higher or lower.

Example of Fund Expenses

Institutional Institutional Service
After 1 year $22 $48
After 3 years $71 $151
After 5 years $124 $263
After 10 years $279 $592

Select Municipal
Money Market
Fund

FUND FACTS:

Goal:
Current Income Exempt from Federal Income Taxes
Preservation of Capital

Principal Investment:
Municipal Obligations

Classes of Shares Offered in this Prospectus:
Institutional
Institutional Service

Investment Advisor:
Evergreen Investment Management

NASDAQ Symbols:
EMMXX (Institutional)
EISXX (Institutional Service)

Dividend Payment Schedule:
Monthly

INVESTMENT GOAL
The Fund seeks as high a level of current income exempt from federal income tax
as is consistent with preserving capital and providing liquidity.

INVESTMENT STRATEGY
The following supplements the investment strategies discussed in the "Overview"
on page 1.

The Fund will invest principally in municipal obligations, including municipal
bonds, notes and commercial paper. Under normal circumstances, at least 80% of
the Fund's annual interest income will be exempt from federal income tax other
than the federal alternative minimum tax. The Fund may temporarily invest up to
20% of its net assets in taxable securities under one or more of the following
circumstances: (a) pending investment of proceeds of sale of Fund shares or of
portfolio securities; (b) pending settlement of purchases of portfolio
securities, and (c) to maintain liquidity for the purpose of meeting anticipated
redemptions; or for defensve purposes. In addition, the Fund may invest in any
security issued or guaranteed by the U.S. government or its agencies or
instrumentalities.

RISK FACTORS
Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:

Interest Rate Risk
Credit Risk

For further information regarding the Fund's investment strategy and risk
factors see "Other Fund Practices."

PERFORMANCE
The following charts show how the Fund has performed in the past. Past
performance is not an indication of future results.

The chart below shows the percentage gains or loss for Institutional shares of
the Fund in each calendar year since the Institutional shares' inception on
11/20/96. It should give you a general idea of how the Fund's return has varied
from year-to-year. This graph includes the effects of Fund expenses.

1997 1998

3.66% 3.61%

Best Quarter: 2nd Quarter 1997 +0.96%
Worst Quarter: 1st Quarter 1997 +0.81%

Year to date total return through 3/31/99 is 0.75%.

Average Annual Total Return
(for the period ended 12/31/98)
Inception Performance
Date Since
Of Class 1 year 5 year 10 year 11/20/96
Institutional 11/20/96 3.61% N/A N/A 3.63%
Institutional
Service 11/25/96 3.35% N/A N/A 3.38%
91 Day Treasury
Bills Index ___% ___% ___% ___%*
* Performance since 11/25/96 is ____%..

To obtain yield information call 1-800-343-2898.

EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.

You pay no shareholder transaction fees.

*Actual for the fiscal year ended 2/28/99.
**After fee waivers, net expense ratios were .18% for Institutional shares and
.42% for Institutional Service shares.

Example of Fund Expenses

Institutional Institutional Service
After 1 year $25 $50
After 3 years $77 $157
After 5 years $135 $274
After 10 years $305 $616

Select Treasury
Money Market
Fund

FUND FACTS:

Goal:
Current Income
Stability of Principal

Principal Investments:
Repurchase Agreements backed by Short-Term Treasury
Obligations
Short-term U.S. Treasury Obligations

Classes of Shares Offered in this Prospectus:
Institutional
Institutional Service

Investment Advisor:
Evergreen Investment Management

NASDAQ Symbols:
EIMXX (Institutional)
EITXX (Institutional Service)

Dividend Payment Schedule:
Monthly

INVESTMENT GOAL
The Fund seeks to maintain stability of principal while earning current income.

INVESTMENT STRATEGY
The following supplements the investment strategies discussed in the "Overview"
on page 1.

The Fund will invest in short-term U.S. Treasury obligations and repurchase
agreements backed by such obligations. The Fund will invest only in U.S.
Treasury securities which are high quality debt securities issued by the U.S.
Treasury, guaranteed as to principal and interest, and supported by the full
faith and credit of the U.S.
government.

RISK FACTORS
Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:

Interest Rate Risk
Credit Risk

For further information regarding the Fund's investment strategy and risk
factors see "Other Fund Practices."

PERFORMANCE
The following charts show how the Fund has performed in the past. Past
performance is not an indication of future results.

The chart below shows the percentage gain or loss for Institutional shares of
the Fund in each calendar year since the Institutional shares' inception on
11/20/96. It should give you a general idea of how the Fund's return has varied
from year-to-year. This graph includes the effects of Fund expenses.

Year-by-Year Total Return for Institutional Shares (%)

1997 1998

5.49% 5.37%

Best Quarter: 4th Quarter 1997 +1.38%
Worst Quarter: 4th Quarter 1998 +1.22%

Year to date total return through 3/31/99 is 1.16%.

Average Annual Total Return
(for the period ended 12/31/98)
Inception Performance
Date Since
Of Class 1 year 5 year 10 year 11/20/96
Institutional 11/20/96 5.37% N/A N/A 5.44%
Institutional
Service 11/27/96 5.11% N/A N/A 5.18%
91 Day Treasury
Bills Index ___% ___% ___% ___%*

* Performance since 11/27/96 is ____%..

To obtain yield information call 1-800-343-2898.

EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.

You pay no shareholder transaction fees.

*Actual for the fiscal year ended 2/28/99.
**After fee waivers, net expense ratios were .21% for Institutional shares or
.45% for Institutional Service shares.

Example of Fund Expenses

Institutional Institutional Service
After 1 year $24 $48
After 3 years $74 $151
After 5 years $130 $263
After 10 years $293 $591

Select 100%
Treasury Money
Market Fund

FUND FACTS:

Goal:
Stability of Principal
High Current Income

Principal Investment:
U.S. Treasury Securities

Classes of Shares Offered in this Prospectus:
Institutional
Institutional Service

Investment Advisor:
Evergreen Investment Management

NASDAQ Symbols:
EIMIX (Institutional)
EIMSX (Institutional Service)

Dividend Payment Schedule:
Monthly

INVESTMENT GOAL
The Fund seeks to maintain stability of principal while earning current income.

INVESTMENT STRATEGY
The following supplements the investment strategies discussed in the "Overview"
on page 1.

The Fund will invest only in U.S. Treasury securities, which are high quality
debt securities issued by the U.S. Treasury, guaranteed as to principal and
interest and supported by the full faith and credit of the U.S.
government.

RISK FACTORS
Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:

Interest Rate Risk
Credit Risk

For further information regarding the Fund's investment strategy and risk
factors see "Other Fund Practices."

PERFORMANCE
The following charts show how the Fund has performed in the past. Past
performance is not an indication of future results.

The chart below shows the percentage gain or loss for Institutional shares of
the Fund in each calendar year since the Institutional shares' inception on
12/08/97. It should give you a general idea of how the Fund's return has varied
from year-to-year. This graph includes the effects of Fund expenses.

Year-by-Year Total Return for Institutional Shares (%)

1998

4.99%

Best Quarter: 1st Quarter 1998 +1.27%
Worst Quarter: 4th Quarter 1998 +1.13%

Year to date total return through 3/31/99 is 1.10%.

Average Annual Total Return
(for the period ended 12/31/98)
Inception Performance
Date Since
Of Class 1 year 5 year 10 year 12/08/97
Institutional 12/08/97 4.99% N/A N/A 5.03%
Institutional
Service 12/22/97 4.73% N/A N/A 4.75%
91 Day Treasury
Bills Index ___% ___% ___% ___%*
* Performance since 12/23/97 is ____%

To obtain yield information call 1-800-343-2898.

EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.

You pay no shareholder transaction fees.

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)*
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses**
Institutional .25% .00% .09% .34%
Institutional
Service .25% .25% .09% .59%

*Restated actuals for the fiscal year ended 2/28/99.
**After fee waivers, restated net expense ratios would be .17% for
Institutional shares and .42% Institutional Service shares.

Example of Fund Expenses

Institutional Institutional Service
After 1 year $35 $60
After 3 years $109 $189
After 5 years $191 $329
After 10 years $430 $738

THE FUNDS' INVESTMENT ADVISOR
An investment advisor manages a Fund's investments and supervises its daily
business affairs. The investment advisor for the Evergreen Select Money Market
Funds is Evergreen Investment Management. All investment advisors for the
Evergreen Funds are subsidiaries of First Union Corporation, the sixth largest
bank holding company in the United States, with over $223 billion in
consolidated assets as of 3/31/99. First Union Corporation is located at 301
South College Street, Charlotte, North Carolina 28288-0013.

Evergreen Investment Management (EIM) (formerly known as Capital Management
Group, or CMG), a division of First Union National Bank (FUNB), has been
managing money for over 50 years and currently manages over $28.8 billion in
assets for 44 of the Evergreen Funds. EIM is located at 201 South College
Street, Charlotte, North Carolina 28288-0630.

Year 2000 Compliance
The investment advisors and other service providers for the Evergreen Funds are
taking steps to address any potential Year 2000-related computer problems.
However, there is some risk that these problems could disrupt the Funds'
operations or financial markets generally.

CALCULATING THE SHARE PRICE
The value of one share of a Fund, also known as the net asset value, or NAV, is
calculated twice daily on each day the New York Stock Exchange is open at 12:00
noon (Eastern time) and as of the time the Exchange closes (normally 4:00 p.m.
Eastern time). We calculate the share price for each share by adding up the
total assets of the Fund, subtracting all liabilities, then dividing the result
by the total number of shares outstanding. Each class of shares is calculated
separately. Each security held by a Fund is valued on an amortized cost basis
according to Rule 2a-7 under the Investment Company Act of 1940. Under this
method of valuation, a security is initially valued at its acquisition cost, and
thereafter a constant straightline amortization of any discount or premium is
assumed each day regardless of the impact of fluctuating interest rates on the
market value of the security.

The price per share you pay for a Fund purchase or the amount you receive for a
Fund redemption is based on the next price calculated after the order is
received and all required information is provided. HOW TO CHOOSE AN EVERGREEN
FUND When choosing an Evergreen Fund, you should: ? Most importantly, read the
prospectus to see if the Fund is suitable for you. ? Consider talking to an
investment professional. He or she is qualified to give you investment advice
based on your investment goals and financial situation and will be able to
answer questions you may have after reading the Fund's prospectus. He or she can
also assist you through all phases of opening your account. ? Request any
additional information you want about the Fund, such as the Statement of
Additional Information, Annual Report or Semi-annual Report by calling
1-800-343-2898.

HOW TO CHOOSE THE SHARE
CLASS THAT BEST SUITS YOU
After choosing a Fund, you select a share class. All of the Funds offer two
different institutional classes. Each institutional class of shares has its own
expenses. Pay particularly close attention to this fee structure so you know how
much you will be paying before you invest. Institutional shares are only offered
to investment advisory clients of an investment advisor of an Evergreen Fund (or
the advisor's affiliates).

Each class of shares is sold without a front-end sales charge or contingent
deferred sales charge. Institutional Service shares pay an ongoing service fee.
Institutional shares do not pay a service fee. The minimum initial investment in
either class of shares is $1 million, which may be waived in certain situations.
There is no minimum amount required for subsequent purchases.

The Institutional Service shares have adopted a distribution plan which provides
for the payment of an annual service fee of up to 0.25% of the average daily net
assets of the class for personal service rendered to shareholders and/or the
maintenance of accounts. As a result, income distributions paid by the Fund with
respect to Institutional Service shares will generally be less than those paid
with respect to Institutional shares.

HOW TO BUY SHARES
Institutional investors may buy shares through broker-dealers, banks and certain
other financial intermediaries, or directly through the Funds' distributor
Evergreen Distributor, Inc. (EDI).

Method
Opening an Account
Adding to an Account
By Phone

? Call 1-800-343-2898 to set up an account number and get wiring instructions
(call before 12 noon if you want wired funds to be credited that day).
? Instruct your bank to wire or transfer your purchase (they may
charge a wiring fee).
? Complete the account application and mail to:
Evergreen Service Company Overnight Address:
P.O. Box 2121 Evergreen Service Company
Boston, MA 02106-2121 200 Berkeley St.
Boston, MA 02116
? Wires received after 4:00 p.m. Eastern time on market trading days will
receive the next market day's closing price.
? Call the Evergreen Express Line* at 1-800-346-3858 24 hours a day or
1-800-343-2898 between 8 a.m. and 6 p.m. Eastern time, on any business day.
? If your bank account is set up on file, you can request either:
? Federal Funds Wire (offers immediate access to funds) or
? Electronic transfer through the Automated Clearing House which avoids
wiring fees.

By Exchange
? You can make an additional investment by exchange from an existing Evergreen
Fund's account by contacting your investment representative or calling the
Evergreen Express Line* at 1-800-346-3858.**
? You can only exchange shares within the same class.
? There is no sales charge or redemption fee when exchanging funds within the
Evergreen Fund's family.
? Orders placed before 4 p.m. Eastern time on market trading days will receive
that day's closing share price (if not, you will receive the next market day's
closing price).
? Exchanges are limited to three per calendar quarter, and five per calendar
year.
? Exchanges between accounts that do not have identical ownership must be in
writing with a signature guarantee (see below).

HOW TO REDEEM SHARES
We offer you several convenient ways to redeem your shares in any of the
Evergreen Funds:

Methods
Requirements
Call Us
- - Call the Evergreen Express Line* at 1-800-346-3858 24 hours a day or
1-800-343-2898 between 8 a.m. and 6 p.m. Eastern time, on any business day.
- - This service must be authorized ahead of time, and is only available for
regular accounts.**
- - All authorized requests made before 4 p.m. Eastern time on market trading days
will be processed at that day's closing price. Requests after 4 p.m.
will be processed the following business day.
- - We can either:
- - wire the proceeds into your bank account (service charges may apply)
- - electronically transmit the proceeds to your bank account via the Automated
Clearing House service
- - mail you a check.
- - All telephone calls are recorded for your protection. We are not responsible
for acting on telephone orders we believe are genuine.
- - See exceptions list below for requests that must be made in writing.

Write Us
- - You can mail a redemption request to:
Evergreen Service Company Overnight Address:
P.O. Box 2121 Evergreen Service Company
Boston, MA 02106-2121 200 Berkeley St.
Boston, MA 02116
- - Your letter of instructions must:
- - list the Fund name and the account number
- - indicate the number of shares or dollar value you wish to redeem
- - be signed by the registered owner(s)
- - See exceptions list below for requests that must be signature guaranteed.

Redeem Your Shares in Person

- - You may also redeem your shares through participating broker-dealers by
delivering a letter as described above to your broker-dealer.
- - A fee may be charged for this service.

*The Evergreen Exress Line is only available to Institutional Service shares.

** Once you have authorized either the telephone exchange or redemption service,
anyone with a Personal Identification Number (PIN) and the required account
information (including your broker) can request a telephone transaction in your
account. All calls are recorded or monitored for verification, recordkeeping and
quality-assurance purposes. The Evergreen Funds reserve the right to terminate
the exchange privilege of any shareholder who exceeds the listed maximum number
of exchanges, as well as to reject any large dollar exchange if placing it
would, in the judgment of the portfolio manager, adversely affect the price of
the Fund.

Timing of Proceeds

Normally, we will send your redemption proceeds on the next business day after
we receive your request; however, we reserve the right to wait up to seven
business days to redeem any investments made by check and five business days for
investments made by Automated Clearing House transfer. We also reserve the right
to redeem in kind, and to redeem the remaining amount in the account if your
redemption brings the account balance below the initial minimum of $1,000,000.

Exceptions: Redemption Requests That Require A Signature Guarantee To protect
you and Evergreen Funds against fraud, certain redemption requests must be in
writing with your signature guaranteed. A signature guarantee can be obtained at
most banks and securities dealers. A notary public is not authorized to provide
a signature guarantee. The following circumstances require signature guarantees:

- - You want the proceeds transmitted to a bank account not listed on the account
- - You want the proceeds payable to anyone other than the
registered owner(s) of the account
- - Either your address or the address of your bank account has been changed
within 30 days

Who Can Provide A Signature Guarantee:
- - Commercial Bank
- - Trust Company
- - Savings Association
- - Credit Union
- - Member of a U.S. stock exchange

OTHER SERVICES
Evergreen Express Line
(Institutional Service shares only)
Use our automated, 24-hour service to check the value of your investment in a
Fund; purchase, redeem or exchange Fund shares; find a Fund's price, yield or
total return; order a statement or duplicate tax form; or hear market commentary
from Evergreen portfolio managers.

Automatic Reinvestment of Dividends
For the convenience of investors, all dividends and capital gains distributions
are automatically reinvested, unless you request otherwise. Distributions can be
made by check or electronic transfer through the Automated Clearing House to
your bank account. The details of your dividends and other distributions will be
included on your statement.

Telephone Investment Plan
You may make additional investments electronically in an existing Fund account.
Telephone requests received by 4:00 p.m. Eastern time will be invested the day
the request is received.

Reinvestment Privileges
Under certain circumstances, shareholders may, within one year of redemption,
reinstate their accounts at the current price (NAV).

THE TAX CONSEQUENCES OF INVESTING IN THE FUNDS You may be taxed in two ways:
On Fund distributions (capital gains and dividends)
On any profit you make when you sell any or all of
your shares.

Fund Distributions
A mutual fund passes along to all of its shareholders the net income or profits
it receives from its investments. The shareholders of the Fund then pay any
taxes due, whether they receive these distributions in cash or elect to have
them reinvested. The Select Municipal Money Market Fund expects that
substantially all of its regular dividends will be exempt from federal income
tax. Otherwise, the Funds will distribute two types of taxable income to you: ?
Dividends. To the extent the regular dividends are derived from interest that is
not tax exempt, or from short-term capital gains, you will have to include them
in your federal taxable income. Each Fund pays a monthly dividend from the
dividends, interest and other income on the securities in which it invests. ?
Capital Gains. When a mutual fund sells a security it owns for a profit, the
result is a capital gain. Evergreen Select Money Market Funds generally
distribute capital gains at least once a year, near the end of the calendar
year. Short-term capital gains reflect securities held by the Fund for a year or
less and are considered ordinary income just like dividends. Profits on
securities held longer than 12 months are considered long-term capital gains and
are taxed at a special tax rate (20% for most taxpayers, on sales made after
January 1, 1998).

Dividend and Capital Gain Reinvestment Unless you choose otherwise on the
account application, all dividend and capital gain payments will be reinvested
to buy additional shares. Distribution checks that are returned and distribution
checks that are uncashed when the shareholder has failed to respond to mailings
from the shareholder servicing agent will automatically be reinvested to buy
additional shares.

No interest will accrue on amounts represented by uncashed distribution or
redemption checks.

We will send you a statement each January with the federal tax status of
dividends and distributions paid by each Fund during the previous calendar year.

Profits You Realize When You Redeem Shares When you sell shares in a mutual
fund, whether by redeeming or exchanging, you have created a taxable event. You
must report any gain or loss on your tax return unless the transaction was
entered into by a tax-deferred retirement plan or occurred in a money market
fund. It is your responsibility to keep accurate records of your mutual fund
transactions. You will need this information when you file your income tax
return, since you must report any capital gains or losses you incur when you
sell shares. Remember, an exchange is a purchase and a sale for tax purposes.

Tax Reporting
Evergreen Service Company provides you with a tax statement of your dividend and
capital gains distributions for each calendar year on Form 1099 DIV. Proceeds
from a sale are reported on Form 1099B. You must report these on your tax
return. Since the IRS receives a copy as well, you could pay a penalty if you
neglect to report them.

Evergreen Service Company will send you a tax information guide each year during
tax season, which may include a cost basis statement detailing the gain or loss
on taxable transactions you had during the year. Please consult your own tax
advisor for further information regarding the federal, state and local tax
consequences of an investment in the Funds.

FEES AND EXPENSES OF THE FUNDS
Every mutual fund has fees and expenses that are assessed either directly or
indirectly. This section describes each of those fees.

Management Fee
The management fee pays for the normal expenses of managing the Fund, including
portfolio manager salaries, research costs, corporate overhead expenses and
related expenses.

12b-1 Fee
The Trustees of the Evergreen Funds have approved a policy to assess 12b-1 fees
for Institutional Service shares. These fees will increase the cost of your
investment. The purpose of the 12b-1 fee is to promote the sale of more shares
of the Funds to the public. The Fund may use this fee for advertising and
marketing and as a "service fee" to the broker-dealer for additional shareholder
services.

Other Expenses
Other expenses include miscellaneous fees from affiliated and outside service
providers. These may include legal, audit, custodial and safekeeping fees, the
printing and mailing of reports and statements, automatic reinvestment of
distributions and other conveniences for which the shareholder pays no
transaction fees.

Total Fund Operating Expenses
The total cost of running the Fund is called the expense ratio. As a
shareholder, you are not charged these fees directly; instead they are taken out
before the Fund's net asset value is calculated, and are expressed as a
percentage of the Fund's average daily net assets. The effect of these fees is
reflected in the performance results for that share class. Because these fees
are "invisible," investors should examine them closely in the prospectus,
especially when comparing one Fund with another fund in the same investment
category. There are three things to remember about expense ratios: 1) your total
return in the Fund is reduced in direct proportion to the fees; 2) expense
ratios can vary greatly between funds and fund families, from under 0.25% to
over 3.0%; and 3) the Fund's advisor may waive a portion of the Fund's expenses
for a time, reducing its expense ratio.

FINANCIAL HIGHLIGHTS
This section looks in detail at the results for one share in each share class of
the Funds - how much income it earned, how much of this income was passed along
as a distribution and how much the return was reduced by expenses. The tables
for the Funds have been derived from financial statements audited by
PricewaterhouseCoopers LLP, the Funds' independent accountants. For a more
complete picture of the Funds' financial statements, please see the Funds'
Annual Report as well as the Statement of Additional Information.

OTHER FUND PRACTICES
The Funds may purchase securities on a when-issued or delayed delivery basis and
may purchase or sell securities on a forward commitment basis. Settlement of
such transactions normally occurs within a month or more after the purchase or
sale commitment is made. Purchases made under such conditions may involve the
risk that the security may be valued at less than its purchase price, causing an
unrealized loss to the Fund. In addition, when the Fund engages in such
purchases, it relies on the other party to consummate the sale, if the other
party fails to perform its obligations, the Fund may be disadvantaged. The Funds
do not intend to purchase when-issued securities for speculative purposes.

In addition, the Funds may borrow money and lend their securities. Borrowing is
a form of leverage that may magnify a Fund's gain or loss. Lending securities
may cause the Fund to lose the opportunity to sell these securities at the most
desirable price and, therefore, lose money.

Please consult the Statement of Additional Information for more information
regarding these and other investment practices used by the Funds, including
risks.

Notes

Evergreen Select
Funds
Select Money Market
Select Money Market Fund
Select Treasury Money Market Fund
Select Municipal Money Market Fund
Select 100% Treasury Money Market Fund

Select Fixed Income
Select Adjustable Rate Fund
Select Core Bond Fund
Select Fixed Income Fund
Select Income Plus Fund
Select Intermediate Term Municipal Bond Fund
Select International Bond Fund
Select Limited Duration Fund
Select Total Return Bond Fund

Select Equity Trust Select Strategic Value Fund Select Large Cap Blend Fund
Select Strategic Growth Fund Select Social Principles Fund Select Equity Income
Fund Select Small Company Value Fund Select Core Equity Fund Select Small Cap
Growth Fund Select Balanced Fund Select Diversified Value Fund Select Special
Equity Fund Select Equity Index Fund Select Secular Growth Fund

Express Line
(Institutional Service shares only)
800.346.3858

Investor Services
800.343.2898

www.evergreen-funds.com

Evergreen Express Line
(Institutional Service shares only)
Call 1-800-346-3858
24 hours a day to
check your account
order a statement
get a Fund's current price, yield and
total return
buy, redeem or exchange Fund shares

Shareholder Services
Call 1-800-343-2898
Each business day, 8 a.m. to 6 p.m. Eastern time to
buy, redeem or exchange shares
order applications
get assistance with your account

Information Line for Hearing and Speech Impaired
(TTY/TDD)
Call 1-800-343-2888
Each business day, 8 a.m. to 6 p.m. Eastern time

Write us a letter
Evergreen Service Company
P.O. Box 2121
Boston, MA 02106-2121
to buy, redeem or exchange shares
to change the registration on your account
for general correspondence

For express, registered, or certified mail:
Evergreen Service Company
200 Berkeley Street
Boston, MA 02116-5039

Regular communications you will receive: Account Statements - You will receive
quarterly statements for each Fund you own. Confirmation Notices - We send a
confirmation of any transaction you make within five days of the transaction.
Annual and Semiannual reports - You will receive a detailed financial report on
your Fund(s) twice a year. Tax Forms - Each January you will receive any tax
forms you need to file your taxes as well as the Evergreen Tax Information
Guide.

For More Information about the Evergreen Select Money Market Funds, Ask for:
The Funds' most recent Annual or Semi-annual Report, which contains a complete
financial accounting for each Fund and a complete list of portfolio holdings as
of a specific date, as well as commentary from the Fund's manager. This Report
discusses the market conditions and investment strategies that significantly
affected the Fund's performance during the most recent fiscal year or period.

The Statement of Additional Information (SAI), which contains more detailed
information about the policies and procedures of the Funds. The SAI has been
filed with the Securities and Exchange Commission (SEC) and its contents are
legally considered to be part of this prospectus.

For questions, other information, or to request a copy, without charge, of any
of the documents, call 1-800-343-2898 or ask your investment representative. We
will mail material within three business days.

Information about these Funds (including the SAI) is also available on the SEC's
Internet web site at http://www.sec.gov, or, for a duplication fee, by writing
the SEC Public Reference Section, Washington DC 20549-6009. This material can be
reviewed and copied at the SEC's Public Reference Room in Washington, DC. For
more information, call the SEC at 1-800-SEC-0330.

Evergreen Distributor, Inc.
90 Park Avenue
New York, New York 10016
SEC File No. 811-08405

<PAGE>

EVERGREEN SELECT MONEY MARKET TRUST

PART B

STATEMENT OF ADDITIONAL INFORMATION

<PAGE>

EVERGREEN SELECT MONEY MARKET TRUST

200 Berkeley Street
Boston, Massachusetts 02116
(800) 633-2700

STATEMENT OF ADDITIONAL INFORMATION

July 1, 1999

Evergreen Select Money Market Fund
Evergreen Select Municipal Money Market Fund
Evergreen Select Treasury Money Market Fund
Evergreen Select 100% Treasury Money Market Fund

(Each a "Fund"; together, the "Funds")

Each Fund is a series of an open-end management investment company known as
Evergreen Select Money Market Trust (the "Trust")

The Funds offer two classes of shares: Institutional and Institutional Service.
This Statement of Additional Information ("SAI") pertains to each class of
shares of the Funds. It is not a prospectus but should be read in conjunction
with the prospectuses dated July 1, 1999, as supplemented from time to time, for
the Fund in which you are making or contemplating an investment. You may obtain
a prospectus without charge by calling (800)-343-2898.

Certain information may be incorporated by reference to the Funds' Annual Report
dated February 28, 1999. You may obtain a copy of the Annual Report without
charge by calling (800)-343-2898.

TABLE OF CONTENTS

PART 1

TRUST HISTORY
INVESTMENT POLICIES
OTHER SECURITIES AND PRACTICES
PRINCIPAL HOLDERS OF FUND SHARES
EXPENSES
PERFORMANCE
SERVICE PROVIDERS
FINANCIAL STATEMENTS

PART 2

ADDITIONAL INFORMATION ON SECURITIES AND INVESTMENT PRACTICES
PURCHASE, REDEMPTION AND PRICING OF SHARES
SALES CHARGE WAIVERS AND REDUCTIONS
PERFORMANCE CALCULATIONS
PRINCIPAL UNDERWRITER
DISTRIBUTION EXPENSES UNDER RULE 12b-1
TAX INFORMATION
BROKERAGE
ORGANIZATION
INVESTMENT ADVISORY AGREEMENT
MANAGEMENT OF THE TRUST
CORPORATE AND MUNICIPAL BOND RATINGS
ADDITIONAL INFORMATION

PART 1

TRUST HISTORY

The Evergreen Select Money Market Trust is an open-end management investment
company, which was organized as a Delaware business trust on September 18, 1997.
A copy of the Declaration of Trust is on file as an exhibit to the Trust's
Registration Statement, of which this SAI is a part. This summary is qualified
in its entirety by reference to the Declaration of Trust.

INVESTMENT POLICIES

FUNDAMENTAL INVESTMENT RESTRICTIONS

Each Fund has adopted the fundamental investment restrictions set forth
below which may not be changed without the vote of a majority of the Fund's
outstanding shares, as defined in the Investment Company Act of 1940 (the"1940
Act"). Where necessary, an explanation beneath a fundamental policy describes
the Fund's practices with respect to that policy, as allowed by current law. If
the law governing a policy changes, the Fund's practices may change accordingly
without a shareholder vote. Unless otherwise stated, all references to the
assets of the Fund are in terms of current market value.

1. Diversification

Each Fund may not make any investment that is inconsistent with its
classification as a diversified investment company under the 1940 Act.

Further Explanation of Diversification Policy:

To remain classified as a diversified investment company under the 1940 Act,
each Fund must conform with the following: With respect to 75% of its total
assets, a diversified investment company may not invest more than 5% of its
total assets, determined at market or other fair value at the time of purchase,
in the securities of any one issuer, or invest in more than 10% of the
outstanding voting securities of any one issuer, determined at the time of
purchase. These limitations do not apply to investments in securities issued or
guaranteed by the United States (U.S.) government or its agencies or
instrumentalities.

2. Concentration

Each Fund may not concentrate its investments in the securities of issuers
primarily engaged in any particular industry (other than securities that are
issued or guaranteed by the U.S. government or its agencies or
instrumentalities).

Further Explanation of Concentration Policy:

Each Fund may not invest more than 25% of its total assets, taken at market
value, in the securities of issuers primarily engaged in any particular industry
(other than securities issued or guaranteed by the U.S. government or its
agencies or instrumentalities).

3. Issuing Senior Securities

Except as permitted under the 1940 Act, each Fund may not issue senior
securities.

4. Borrowing

Each Fund may not borrow money, except to the extent permitted by applicable
law.

Further Explanation of Borrowing Policy:

Each Fund may borrow from banks and enter into reverse repurchase agreements in
an amount up to 33 1/3% of its total assets, taken at market value. Each Fund
may also borrow up to an additional 5% of its total assets from banks or others.
A Fund may borrow only as a temporary measure for extraordinary or emergency
purposes such as the redemption of Fund shares. A Fund may purchase additional
securities so long as borrowings do not exceed 5% of its total assets. Each Fund
may obtain such short-term credit as may be necessary for the clearance of
purchases and sales of portfolio securities. Each Fund may purchase securities
on margin and engage in short sales to the extent permitted by applicable law.

5. Underwriting

Each Fund may not underwrite securities of other issuers, except insofar
as a Fund may be deemed to be an underwriter in connection with the disposition
of its portfolio securities.

6. Real Estate

Each Fund may not purchase or sell real estate, except that, to the extent
permitted by applicable law, a Fund may invest in (a) securities that are
directly or indirectly secured by real estate, or (b) securities issued by
issuers that invest in real estate.

7. Commodities

Each Fund may not purchase or sell commodities or contracts on commodities,
except to the extent that a Fund may engage in financial futures contracts and
related options and currency contracts and related options and may otherwise do
so in accordance with applicable law and without registering as a commodity pool
operator under the Commodity Exchange Act.

8. Lending

Each Fund may not make loans to other persons, except that a Fund may lend its
portfolio securities in accordance with applicable law. The acquisition of
investment securities or other investment instruments shall not be deemed to be
the making of a loan.

Further Explanation of Lending Policy:

To generate income and offset expenses, a Fund may lend portfolio securities to
broker-dealers and other financial institutions in an amount up to 33 1/3% of
its total assets, taken at market value. While securities are on loan, the
borrower will pay the Fund any income accruing on the security. The Fund may
invest any collateral it receives in additional portfolio securities, such as
U.S. Treasury notes, certificates of deposit, other high-grade, short-term
obligations or interest bearing cash equivalents. Gains or losses in the market
value of a security lent will affect the Fund and its shareholders.

When a Fund lends its securities, it will require the borrower to give the Fund
collateral in cash or government securities. The Fund will require collateral in
an amount equal to at least 100% of the current market value of the securities
lent, including accrued interest. The Fund has the right to call a loan and
obtain the securities lent any time on notice of not more than five business
days. The Fund may pay reasonable fees in connection with such loans.

9. Investments in Federally Tax-Exempt Securities

Each Fund will, during periods of normal market conditions, invest its assets in
accordance with applicable guidelines issued by the Securities and Exchange
Commission ("SEC") or its staff concerning investment in tax-exempt securities
for funds with the words tax-exempt, tax free or municipal in their names.

OTHER SECURITIES AND PRACTICES

Each Fund will invest in short-term securities that are determined to
present minimal credit risk and are, at the time of acquisition, eligible
securities pursuant to Rule 2a-7 under the 1940 Act, ("Rule 2a-7"). Short-term
securities are those having remaining maturities of 397 days or less. Each Fund
will also comply with the diversification requirements and other applicable
requirements prescribed by Rule 2a-7.

For information regarding certain securities the Funds may purchase and certain
investment practices the Funds may use, see the following sections under
Additional Information on Securities and Investment Practices in Part 2 of this
SAI:

U.S. Government Securities
When-Issued, Delayed-Delivery and Forward Commitment Transactions
Repurchase Agreements
Reverse Repurchase Agreements
Illiquid and Restricted Securities (Select Money Market Fund, Select
Municipal Money Market Fund)
Investment in Other Investment Companies
Short Sales
Municipal Bonds (Select Municipal Money Market Fund)
Virgin Islands, Guam and Puerto Rico (Select Municipal Money Market
Fund)

PRINCIPAL HOLDERS OF FUND SHARES

As of April 1, 1999 the officers and Trustees of the Trust owned as a
group less than 1% of the outstanding shares of any class of each Fund.

Set forth below is information with respect to each person who, to each Fund's
knowledge, owned beneficially or of record more than 5% of the outstanding
shares of any class of each Fund as of April 1, 1999.

[Information to be provided in 485(b) filing]

Select Money Market Fund
Institutional Class

Money Fund
Institutional Service Class

Municipal Fund
Institutional Class

%
Municipal Fund
Institutional Service Class

%
Treasury Fund
Institutional Class

%
Treasury Fund
Institutional Service Class

%
100% Treasury Fund
Institutional Class

EXPENSES

Advisory Fees

Each Fund has its own investment advisor. (For more information, see Investment
Advisory Agreements in Part 2 of this SAI.)

Evergreen Investment Management (EIM), formerly the Capital Management Group of
First Union National Bank (FUNB), is the investment advisor to the Funds. EIM is
entitled to receive from each of these Funds an annual fee based on a percent of
the Fund's average net assets, as follows:

Money Fund 0.15%
Municipal Fund 0.15%
Treasury Fund 0.15%
100% Treasury Fund 0.25%

EIM has voluntarily agreed to reduce the investment advisory fee for 100%
Treasury Fund by 0.10%.

Advisory Fees Paid

Below are the advisory fees paid by each Fund for the fiscal period ended
February 28, 1999 and when applicable for fiscal periods ended in 1998 and 1997.

Fiscal Period/Fund Advisory Fee Waiver

Year Ended 1999
Money Fund $5,052,624 $360,561
Municipal Fund $1,113,470 $471,568
Treasury Fund $4,657,617 $597,104
100% Treasury Fund $1,134,410 $780,902

Year Ended 1998
Money Fund $2,502,328 $522,139
Municipal Fund $489,951 $515,003
Treasury Fund $2,181,556 $708,945
100% Treasury Fund(1) $111,904 $175,317

Period Ended 1997
Money Fund (2) $337,302 $0
Municipal Fund (3) $77,430 $0
Treasury Fund (3) $199,136 $0

1. Period from December 8, 1997 (commencement of operations) to February
28, 1998. 2. Period from November 19, 1996 (commencement of operations) to
February 28, 1997. 3. Period from November 20, 1996 (commencement of operations)
to February 28, 1997.

12b-1 Fees

Below are the 12b-1 service fees paid by the Institutional Service shares of
each Fund for the fiscal periods ended February 28, 1999 and 1998. The
Institutional shares do not pay 12b-1 fees. For more information, see
"Distribution Expenses Under Rule 12b-1" in Part 2 of this SAI.

Fund/Period Service Fee

Year Ended 1999
Money Fund $4,207,699
Municipal Fund $251,544
Treasury Fund $3,301,223
100% Treasury Fund $100,747

Year Ended 1998
Money Fund $2,025,350
Municipal Fund $62,315
Treasury Fund $1,467,114
100% Treasury Fund(1) $2,203

1. Period from December 8, 1997 (commencement of operations) to February
28, 1998.

Trustee Compensation

Listed below is the Trustee compensation paid by the Trust individually
and by the Trust and the eight other trusts in the Evergreen Fund complex for
the fiscal period ended February 28, 1999. The Trustees do not receive pension
or retirement benefits from the Funds. For more information, see Management of
the Trust in Part 2 of this SAI.

Aggregate Total Compensation
Compensation from from Trust and Fund
Trustee Trust Complex Paid to
Trustees*

Laurence B. Ashkin $10,876 $75,000

Charles A. Austin, III $10,876 $75,000

K. Dun Gifford $10,523 $72,500

James S. Howell $14,476 $98,000

Leroy Keith Jr. $10,523 $72,500

Gerald M. McDonnell $10,876 $75,000

Thomas L. McVerry $12,432 $86,000

William Walt Pettit $9,900 $67,500

David M. Richardson $10,523 $72,500

Russell A. Salton, III $11,648 $78,000

Michael S. Scofield $11,648 $78,000

Richard J. Shima $10,523 $72,500

* Certain Trustees have elected to defer all or part of their total compensation
for the fiscal period ended February 28, 1999. The amounts listed below will be
payable in later years to the respective Trustees:

Austin $10,825
Howell $78,700
McDonnell $75,000
McVerry $86,000
Pettit $67,500
Salton $78,000
Scofield $5,500

PERFORMANCE
Total Return
Below are the annual total returns for each class of shares of the Funds as of
February 28, 1999. For more information, see "Total Return" under Performance
Calculations in Part 2 of this SAI.

Fund/Class One Year Five Years Since Inception Inception Date

Money Fund
Institutional 5.53% N/A 5.63% 11/19/96
Institutional
Service 5.27% N/A 5.37% 11/26/96

Municipal Fund
Institutional 3.52% N/A 3.59% 11/20/96
Institutional
Service 3.27% N/A 3.33% 11/25/96

Treasury Fund
Institutional 5.24% N/A 5.39% 11/20/96
Institutional
Service 4.97% N/A 5.13% 11/27/96

100% Treasury Fund
Institutional 4.88% N/A 4.96% 12/8/97
Institutional
Service 4.62% N/A 4.69% 12/22/97

Current Yield

Below are the current and effective yields for each class of shares of
the Funds for the 7-day period ended February 28, 1999. For more information,
see "7-Day Current and Effective Yield" under Performance Calculation in Part 2
of this SAI.

Fund Current Yield Effective Yield
Money Fund
Institutional 5.02% 5.15%
Institutional Service 4.77% 4.88%

Municipal Fund
Institutional 3.00% 3.05%
Institutional Service 2.75% 2.79%

Treasury Fund
Institutional 4.65% 4.75%
Institutional Service 4.40% 4.49%

100% Treasury Fund
Institutional 4.48% 4.58%
Institutional Service 4.23% 4.32%

Below are the tax equivalent yields for each class of shares of the Municipal
Fund for the 7-day period ended February 28, 1999. The maximum federal tax rate
of 39.6% is assumed. For more information, see "Tax Equivalent Yield" under
Performance Calculations in Part 2 of this SAI.

Tax Equivalent Yield
Municipal Fund
Institutional 4.97%
Institutional Service 4.55%

SERVICE PROVIDERS
Administrator

Evergreen Investment Services, Inc. ("EIS") serves as administrator to
each of the Funds, subject to the supervision and control of the Trust's Board
of Trustees. EIS provides the Funds with facilities, equipment and personnel and
is entitled to receive a fee from the Fund based on the total assets of all
mutual funds for which EIS serves as administrator and a First Union Corporation
subsidiary serves as advisor. The fee paid to EIS is calculated in accordance
with the following schedule:

Assets Fee
first $7 billion 0.050%
next $3 billion 0.035%
next $5 billion 0.030%
next $10 billion 0.020%
next $5 billion 0.015%
over $30 billion 0.010%

Transfer Agent

Evergreen Service Company ("ESC"), a subsidiary of First Union
Corporation, is the Funds' transfer agent. ESC issues and redeems shares, pays
dividends and performs other duties in connection with the maintenance of
shareholder accounts. The transfer agent's address is P.O. Box 2121, Boston,
Massachusetts 02106-2121. The Fund pays ESC annual fees as follows:

Annual Fee Per Annual Fee Per Closed
Fund Type Open Account* Account**

Monthly Dividend Funds $25.50 $9.00
Quarterly Dividend Funds $24.50 $9.00
Semiannual Dividend Funds $23.50 $9.00
Annual Dividend Funds $23.50 $9.00
Money Market Funds $25.50 $9.00

*For shareholder accounts only. The Fund pays ESC cost plus 15% for broker
accounts
** Closed account are maintained on the system in order to facilitate
historical and tax information.

Distributor

Evergreen Distributor, Inc. (the "Distributor") markets the Funds through
broker-dealers and other financial representatives. The Distributor's address is
125 W. 55th Street, New York, NY 10019.

Independent Accountants

PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts, 02110
audits the financial statements of each Fund.

Custodian

State Street Bank and Trust Company is the Funds' custodian. The bank
keeps custody of each Fund's securities and cash and performs other related
duties. The custodian's address is 225 Franklin Street, Boston, Massachusetts
02110.

Legal Counsel

Sullivan & Worcester LLP provides legal advice to the Funds. Its address is
1025 Connecticut Avenue, N.W., Washington, D.C. 20036.

FINANCIAL STATEMENTS

The financial statements for the Funds have been audited by
PricewaterhouseCoopers LLP, independent accountants. A report of
PricewaterhouseCoopers LLP on the financial statements for the Funds appears in
the Funds' Annual Report which is incorporated by reference. Annual Reports may
be obtained without charge by writing to ESC, P.O. Box 2121, Boston,
Massachusetts 02106-2121, or by calling ESC toll-free at 1-800-343-2898.

EVERGREEN FUNDS
Statement of Additional Information ("SAI")

PART 2

ADDITIONAL INFORMATION ON SECURITIES
AND INVESTMENT PRACTICES

The prospectus describes the Fund's investment objective and the securities in
which it primarily invests. The following describes other securities the Fund
may purchase and investment strategies it may use. Some of the information below
will not apply to the Fund in which you are interested. See the list under Other
Securities and Practices in Part 1 of this SAI to determine which of the
sections below are applicable.

Defensive Investments

The Fund may invest up to 100% of its assets in high quality money market
instruments, such as notes, certificates of deposit, commercial paper, banker's
acceptances, bank deposits or U.S. government securities if, in the opinion of
the advisor, market conditions warrant a temporary defensive investment
strategy. Evergreen Fund for Total Return may also invest in debt securities and
high grade preferred stocks for defensive purposes when its investment advisor
determines a temporary defensive strategy is warranted.

U.S. Government Securities

The Fund may invest in securities issued or guaranteed by U.S.
Government agencies or instrumentalities.

These securities are backed by (1) the discretionary authority of the
U.S. Government to purchase certain obligations of agencies or instrumentalities
or (2) the credit of the agency or instrumentality issuing the obligations.

Some government agencies and instrumentalities may not receive financial
support from the U.S. Government. Examples of such agencies are:

(I) Credit System, including the National Bank for Cooperatives,
Farm Credit Banks and Banks for Cooperatives;

(ii) Home Administration;

(iii) Federal Home Loan Banks;

(iv) Federal Home Loan Mortgage Corporation;

(v) Federal National Mortgage Association; and

(vi) Student Loan Marketing Association.

Securities Issued by the Government National Mortgage Association ("GNMA")

The Fund may invest in securities issued by the GNMA, a corporation
wholly-owned by the U.S. Government. GNMA securities or "certificates" represent
ownership in a pool of underlying mortgages. The timely payment of principal and
interest due on these securities is guaranteed.

Unlike conventional bonds, the principal on GNMA certificates is not
paid at maturity but over the life of the security in scheduled monthly
payments. While mortgages pooled in a GNMA certificate may have maturities of up
to 30 years, the certificate itself will have a shorter average maturity and
less principal volatility than a comparable 30-year bond.

The market value and interest yield of GNMA certificates can vary due
not only to market fluctuations, but also to early prepayments of mortgages
within the pool. Since prepayment rates vary widely, it is impossible to
accurately predict the average maturity of a GNMA pool. In addition to the
guaranteed principal payments, GNMA certificates may also make unscheduled
principal payments resulting from prepayments on the underlying mortgages.

Although GNMA certificates may offer yields higher than those available
from other types of U.S. Government securities, they may be less effective as a
means of locking in attractive long-term rates because of the prepayment
feature. For instance, when interest rates decline, prepayments are likely to
increase as the holders of the underlying mortgages seek refinancing. As a
result, the value of a GNMA certificate is not likely to rise as much as the
value of a comparable debt security would in response to same decline. In
addition, these prepayments can cause the price of a GNMA certificate originally
purchased at a premium to decline in price compared to its par value, which may
result in a loss.

When-Issued, Delayed-Delivery and Forward Commitment Transactions

The Fund may purchase securities on a when-issued or delayed delivery basis and
may purchase or sell securities on a forward commitment basis. Settlement of
such transactions normally occurs within a month or more after the purchase or
sale commitment is made.

The Fund may purchase securities under such conditions only with the
intention of actually acquiring them, but may enter into a separate agreement to
sell the securities before the settlement date. Since the value of securities
purchased may fluctuate prior to settlement, the Fund may be required to pay
more at settlement than the security is worth. In addition, the purchaser is not
entitled to any of the interest earned prior to settlement.

Upon making a commitment to purchase a security on a when-issued, delayed
delivery or forward commitment basis the Fund will hold liquid assets worth at
least the equivalent of the amount due. The liquid assets will be monitored on a
daily basis and adjusted as necessary to maintain the necessary value.

Purchases made under such conditions may involve the risk that yields
secured at the time of commitment may be lower than otherwise available by the
time settlement takes place, causing an unrealized loss to the Fund. In
addition, when the Fund engages in such purchases, it relies on the other party
to consummate the sale. If the other party fails to perform its obligations, the
Fund may miss the opportunity to obtain a security at a favorable price or
yield.

Repurchase Agreements

The Fund may enter into repurchase agreements with entities that are
registered as U.S. Government securities dealers, including member banks of the
Federal Reserve System having at least $1 billion in assets, primary dealers in
U.S. government securities or other financial institutions believed by the
investment advisor to be creditworthy. In a repurchase agreement the Fund
obtains a security and simultaneously commits to return the security to the
seller at a set price (including principal and interest) within period of time
usually not exceeding seven days. The resale price reflects the purchase price
plus an agreed upon market rate of interest which is unrelated to the coupon
rate or maturity of the underlying security. A repurchase agreement involves the
obligation of the seller to pay the agreed upon price, which obligation is in
effect secured by the value of the underlying security.

The Fund's custodian or a third party will take possession of the
securities subject to repurchase agreements, and these securities will be marked
to market daily. To the extent that the original seller does not repurchase the
securities from the Fund, the Fund could receive less than the repurchase price
on any sale of such securities. In the event that such a defaulting seller filed
for bankruptcy or became insolvent, disposition of such securities by the Fund
might be delayed pending court action. The Fund's investment advisor believes
that under the regular procedures normally in effect for custody of the Fund's
portfolio securities subject to repurchase agreements, a court of competent
jurisdiction would rule in favor of the Fund and allow retention or disposition
of such securities. The Fund will only enter into repurchase agreements with
banks and other recognized financial institutions, such as broker-dealers, which
are deemed by the investment advisor to be creditworthy pursuant to guidelines
established by the Board of Trustees.

Reverse Repurchase Agreements

As described herein, the Fund may also enter into reverse repurchase
agreements. These transactions are similar to borrowing cash. In a reverse
repurchase agreement, the Fund transfers possession of a portfolio instrument to
another person, such as a financial institution, broker, or dealer, in return
for a percentage of the instrument's market value in cash, and agrees that on a
stipulated date in the future the Fund will repurchase the portfolio instrument
by remitting the original consideration plus interest at an agreed upon rate.

The use of reverse repurchase agreements may enable the Fund to avoid selling
portfolio instruments at a time when a sale may be deemed to be disadvantageous,
but the ability to enter into reverse repurchase agreements does not ensure that
the Fund will be able to avoid selling portfolio instruments at a
disadvantageous time.

When effecting reverse repurchase agreements, liquid assets of the Fund,
in a dollar amount sufficient to make payment for the obligations to be
purchased, are segregated at the trade date. These securities are marked to
market daily and maintained until the transaction is settled.

Options

An option is a right to buy or sell a security for a specified price within a
limited time period. The option buyer pays the option seller (known as the
"writer") for the right to buy, which is a "call" option, or the right to sell,
which is a "put" option. Unless the option is terminated, the option seller must
then buy or sell the security at the agreed-upon price when asked to do so by
the option buyer.

The Fund may buy or sell put and call options on securities it holds or intends
to acquire, and may purchase put and call options for the purpose of offsetting
previously written put and call options of the same series. The Fund may also
buy and sell options on financial futures contracts. The Fund will use options
as a hedge against decreases or increases in the value of securities it holds or
intends to acquire.

The Fund may write only covered options. With regard to a call option,
this means that the Fund will own, for the life of the option, the securities
subject to the call option. The Fund will cover put options by holding, in a
segregated account, liquid assets having a value equal to or greater than the
price of securities subject to the put option. If the Fund is unable to effect a
closing purchase transaction with respect to the covered options it has sold, it
will not be able to sell the underlying securities or dispose of assets held in
a segregated account until the options expire or are exercised.

Futures Transactions

The Fund may enter into financial futures contracts and write options on
such contracts. The Fund intends to enter into such contracts and related
options for hedging purposes. The Fund will enter into futures on securities or
index-based futures contracts in order to hedge against changes in interest or
exchange rates or securities prices. A futures contract on securities is an
agreement to buy or sell securities at a specified price during a designated
month. A futures contract on a securities index does not involve the actual
delivery of securities, but merely requires the payment of a cash settlement
based on changes in the securities index. The Fund does not make payment or
deliver securities upon entering into a futures contract. Instead, it puts down
a margin deposit, which is adjusted to reflect changes in the value of the
contract and which continues until the contract is terminated.

The Fund may sell or purchase futures contracts. When a futures contract
is sold by the Fund, the value of the contract will tend to rise when the value
of the underlying securities declines and to fall when the value of such
securities increases. Thus, the Fund sells futures contracts in order to offset
a possible decline in the value of its securities. If a futures contract is
purchased by the Fund, the value of the contract will tend to rise when the
value of the underlying securities increases and to fall when the value of such
securities declines. The Fund intends to purchase futures contracts in order to
establish what is believed by the investment advisor to be a favorable price or
rate of return for securities the Fund intends to purchase.

The Fund also intends to purchase put and call options on futures
contracts for hedging purposes. A put option purchased by the Fund would give it
the right to assume a position as the seller of a futures contract. A call
option purchased by the Fund would give it the right to assume a position as the
purchaser of a futures contract. The purchase of an option on a futures contract
requires the Fund to pay a premium. In exchange for the premium, the Fund
becomes entitled to exercise the benefits, if any, provided by the futures
contract, but is not required to take any action under the contract. If the
option cannot be exercised profitably before it expires, the Fund's loss will be
limited to the amount of the premium and any transaction costs.

The Fund may enter into closing purchase and sale transactions in order
to terminate a futures contract and may sell put and call options for the
purpose of closing out its options positions. The Fund's ability to enter into
closing transactions depends on the development and maintenance of a liquid
secondary market. There is no assurance that a liquid secondary market will
exist for any particular contract or at any particular time. As a result, there
can be no assurance
that the Fund will be able to enter into an offsetting transaction with respect
to a particular contract at a particular time. If the Fund is not able to enter
into an offsetting transaction, the Fund will continue to be required to
maintain the margin deposits on the contract and to complete the contract
according to its terms, in which case it would continue to bear market risk on
the transaction.

Although futures and options transactions are intended to enable the
Fund to manage market, interest rate or exchange rate risk, unanticipated
changes in interest rates or market prices could result in poorer performance
than if it had not entered into these transactions. Even if the investment
advisor correctly predicts interest rate movements, a hedge could be
unsuccessful if changes in the value of the Fund's futures position did not
correspond to changes in the value of its investments. This lack of correlation
between the Fund's futures and securities positions may be caused by differences
between the futures and securities markets or by differences between the
securities underlying the Fund's futures position and the securities held by or
to be purchased for the Fund. The Fund's investment advisor will attempt to
minimize these risks through careful selection and monitoring of the Fund's
futures and options positions.

The Fund does not intend to use futures transactions for speculation or
leverage. The Fund has the ability to write options on futures, but currently
intends to write such options only to close out options purchased by the Fund.
The Fund will not change these policies without supplementing the information in
the prospectus and SAI.

The Fund will not maintain open positions in futures contracts it has
sold or call options it has written on futures contracts if, in the aggregate,
the value of the open positions (marked to market) exceeds the current market
value of its securities portfolio plus or minus the unrealized gain or loss on
those open positions, adjusted for the correlation of volatility between the
hedged securities and the futures contracts. If this limitation is exceeded at
any time, the Fund will take prompt action to close out a sufficient number of
open contracts to bring its open futures and options positions within this
limitation.

"Margin" in Futures Transactions

Unlike the purchase or sale of a security, the Fund does not pay or
receive money upon the purchase or sale of a futures contract. Rather the Fund
is required to deposit an amount of "initial margin" in cash or U.S. Treasury
bills with its custodian (or the broker, if legally permitted). The nature of
initial margin in futures transactions is different from that of margin in
securities transactions in that futures contract initial margin does not involve
the borrowing of funds by the Fund to finance the transactions. Initial margin
is in the nature of a performance bond or good faith deposit on the contract
which is returned to the Fund upon termination of the futures contract, assuming
all contractual obligations have been satisfied.

A futures contract held by the Fund is valued daily at the official
settlement price of the exchange on which it is traded. Each day the Fund pays
or receives cash, called "variation margin," equal to the daily change in value
of the futures contract. This process is known as "marking to market". Variation
margin does not represent a borrowing or loan by the Fund but is instead
settlement between the Fund and the broker of the amount one would owe the other
if the futures contract expired. In computing its daily net asset value the Fund
will mark-to-market its open futures positions. The Fund is also required to
deposit and maintain margin when it writes call options on futures contracts.

Foreign Securities

The Fund may invest in foreign securities or U.S. securities traded in
foreign markets. In addition to securities issued by foreign companies,
permissible investments may also consist of obligations of foreign branches of
U.S. banks and of foreign banks, including European certificates of deposit,
European time deposits, Canadian time deposits and Yankee certificates of
deposit. The Fund may also invest in Canadian commercial paper and Europaper.
These instruments may subject the Fund to investment risks that differ in some
respects from those related to investments in obligations of U.S. issuers. Such
risks include the possibility of adverse political and economic developments;
imposition of withholding taxes on interest or other income; seizure,
nationalization, or expropriation of foreign deposits; establishment of exchange
controls or taxation at the source; greater fluctuations in value due to changes
in exchange rates, or the adoption of other foreign governmental restrictions
which might adversely affect the payment of principal and interest on such
obligations. Such investments may also entail higher custodial fees and sales
commissions than domestic investments. Foreign issuers of securities or
obligations are often subject to accounting treatment and engage in business
practices different from those respecting domestic issuers of similar securities
or obligations. Foreign branches of U.S. banks and foreign banks may be subject
to less stringent reserve requirements than those applicable to domestic
branches of U.S. banks.

Foreign Currency Transactions

As one way of managing exchange rate risk, the Fund may enter into
forward currency exchange contracts (agreements to purchase or sell currencies
at a specified price and date). The exchange rate for the transaction (the
amount of currency the Fund will deliver and receive when the contract is
completed) is fixed when the Fund enters into the contract. The Fund usually
will enter into these contracts to stabilize the U.S. dollar value of a security
it has agreed to buy or sell. The Fund intends to use these contracts to hedge
the U.S. dollar value of a security it already owns, particularly if the Fund
expects a decrease in the value of the currency in which the foreign security is
denominated. Although the Fund will attempt to benefit from using forward
contracts, the success of its hedging strategy will depend on the investment
advisor's ability to predict accurately the future exchange rates between
foreign currencies and the U.S. dollar. The value of the Fund's investments
denominated in foreign currencies will depend on the relative strengths of those
currencies and the U.S. dollar, and the Fund may be affected favorably or
unfavorably by changes in the exchange rates or exchange control regulations
between foreign currencies and the U.S. dollar. Changes in foreign currency
exchange rates also may affect the value of dividends and interest earned, gains
and losses realized on the sale of securities and net investment income and
gains, if any, to be distributed to shareholders by the Fund. The Fund may also
purchase and sell options related to foreign currencies in connection with
hedging strategies.

High Yield, High Risk Bonds

The Fund may invest a portion of its assets in lower rated bonds. Bonds rated
below BBB by Standard & Poor's Ratings Services ("S&P") or Fitch IBCA, Inc.
("Fitch") or below Baa by Moody's Investors Service, Inc. ("Moody's"), commonly
known as "junk bonds," offer high yields, but also high risk. While investment
in junk bonds provides opportunities to maximize return over time, they are
considered predominantly speculative with respect to the ability of the issuer
to meet principal and interest payments. Investors should be aware of the
following risks:

(1) The lower ratings of junk bonds reflect a greater possibility that
adverse changes in the financial condition of the issuer or in general economic
conditions, or both, or an unanticipated rise in interest rates may impair the
ability of the issuer to make payments of interest and principal, especially if
the issuer is highly leveraged. Such issuer's ability to meet its debt
obligations may also be adversely affected by the issuer's inability to meet
specific forecasts or the unavailability of additional financing. Also, an
economic downturn or an increase in interest rates may increase the potential
for default by the issuers of these securities.

(2) The value of junk bonds may be more susceptible to real or perceived
adverse economic or political events than is the case for higher quality bonds.

(3) The value of junk bonds, like those of other fixed income
securities, fluctuates in response to changes in interest rates, generally
rising when interest rates decline and falling when interest rates rise. For
example, if interest rates increase after a fixed income security is purchased,
the security, if sold prior to maturity, may return less than its cost. The
prices of junk bonds, however, are generally less sensitive to interest rate
changes than the prices of higher-rated bonds, but are more sensitive to news
about an issuer or the economy which is, or investors perceive as, negative.

(4) The secondary market for junk bonds may be less liquid at certain
times than the secondary market for higher quality bonds, which may adversely
effect (a) the bond's market price, (b) the Fund's ability to sell the bond and
the Fund's ability to obtain accurate market quotations for purposes of valuing
its assets.

For bond ratings descriptions, see "Corporate and Municipal Bond Ratings" below.

Illiquid and Restricted Securities

The Fund may not invest more than 15% of its net assets in securities
that are illiquid. A security is illiquid when the Fund cannot dispose of it in
the ordinary course of business within seven days at approximately the value at
which the Fund has the investment on its books.

The Fund may invest in "restricted" securities, i.e., securities subject
to restrictions on resale under federal securities laws. Rule 144A under the
Securities Act of 1933 ("Rule 144A") allows certain restricted securities to
trade freely among qualified institutional investors. Since Rule 144A securities
may have limited markets, the Board of Trustees will determine whether such
securities should be considered illiquid for the purpose of determining the
Fund's compliance with the limit on illiquid securities indicated above. In
determine the liquidity of Rule 144A securities, the Trustees will consider: (1)
the frequency of trades and quotes for the security; (2) the number of dealers
willing to purchase or sell the security and the number of other potential
buyers; (3) dealer undertakings to make a market in the security; and (4) the
nature of the security and the nature of the marketplace trades.

Investment in Other Investment Companies

The Fund may purchase the shares of other investment companies to the
extent permitted under the 1940 Act. Currently, the Fund may not (1) own more
than 3% of the outstanding voting stocks of another investment company, (2)
invest more than 5% of its assets in any single investment company, and (3)
invest more than 10% of its assets in investment companies. However, the Fund
may invest all of its investable assets in securities of a single open-end
management investment company with substantially the same fundamental investment
objectives, policies and limitations as the Fund.

Short Sales

A short sale is the sale of a security the Fund has borrowed. The Fund expects
to profit from a short sale by selling the borrowed security for more than the
cost of buying it to repay the lender. After a short sale is completed, the
value of the security sold short may rise. If that happens, the cost of buying
it to repay the lender may exceed the amount originally received for the sale by
the Fund.

The Fund may engage in short sales, but it may not make short sales of
securities or maintain a short position unless, at all times when a short
position is open, it owns an equal amount of such securities or of securities
which, without payment of any further consideration, are convertible into or
exchangeable for securities of the same issue as, and equal in amount to, the
securities sold short. The Fund may effect a short sale in connection with an
underwriting in which the Fund is a participant.

Municipal Bonds

The Fund may invest in municipal bonds of any state, territory or possession of
the United States ("U.S."), including the District of Columbia. The Fund may
also invest in municipal bonds of any political subdivision, agency or
instrumentality (e.g., counties, cities, towns, villages, districts,
authorities) of the U.S. or its possessions. Municipal bonds are debt
instruments issued by or for a state or local government to support its general
financial needs or to pay for special projects such as airports, bridges,
highways, public transit, schools, hospitals, housing and water and sewer works.
Municipal bonds may also may be issued to refinance public debt.

Municipal bonds are mainly divided between "general obligation" and
"revenue" bonds. General obligation bonds are backed by the full faith and
credit of governmental issuers with the power to tax. They are repaid from the
issuer's general revenues. Payment, however, may be dependent upon legislative
approval and may be subject to limitations on the issuer's taxing power.
Enforcement of payments due under general obligation bonds varies according to
the law applicable to the issuer. In contrast, revenue bonds are supported only
by the revenues generated by the project or facility.

The Fund may also invest in industrial development bonds. Such bonds are
usually revenue bonds issued to pay for facilities with a public purpose
operated by private corporations. The credit quality of industrial development
bonds is usually directly related to the credit standing of the owner or user of
the facilities. To qualify as a municipal bond, the interest paid on an
industrial development bond must qualify as fully exempt from federal income
tax. However, the interest paid on an industrial development bond may be subject
to the federal alternative minimum tax.

The yields on municipal bonds depend on such factors as market
conditions, the financial condition of the issuer and the issue's size, maturity
date and rating. Municipal bonds are rated by S&P, Moody's and Fitch. Such
ratings, however, are opinions, not absolute standards of quality. Municipal
bonds with the same maturity, interest rates and rating may have different
yields, while municipal bonds with the same maturity and interest rate, but
different ratings, may have the same yield. Once purchased by the Fund, a
municipal bond may cease to be rated or receive a new rating below the minimum
required for purchase by the Fund. Neither event would require the Fund to sell
the bond, but the Fund's investment advisor would consider such events in
determining whether the Fund should continue to hold it.

The ability of the Fund to achieve its investment objective depends upon
the continuing ability of issuers of municipal bonds to pay interest and
principal when due. Municipal bonds are subject to the provisions of bankruptcy,
insolvency and other laws affecting the rights and remedies of creditors. Such
laws extend the time for payment of principal and/or interest, and may otherwise
restrict the Fund's ability to enforce its rights in the event of default. Since
there is generally less information available on the financial condition of
municipal bond issuers compared to other domestic issuers of securities, the
Fund's investment advisor may lack sufficient knowledge of an issue's
weaknesses. Other influences, such as litigation, may also materially affect the
ability of an issuer to pay principal and interest when due. In addition, the
market for municipal bonds is often thin and can be temporarily affected by
large purchases and sales, including those by the Fund.

From time to time, Congress has considered restricting or eliminating
the federal income tax exemption for interest on municipal bonds. Such actions
could materially affect the availability of municipal bonds and the value of
those already owned by the Fund. If such legislation were passed, the Trust's
Board of Trustees may recommend changes in the Fund's investment objectives and
policies or dissolution of the Fund.

Virgin Islands, Guam and Puerto Rico

The Fund may invest in obligations of the governments of the Virgin Islands,
Guam and Puerto Rico to the extent such obligations are exempt from the income
or intangibles taxes, as applicable, of the state for which the Fund is named.
The Fund does not presently intend to invest more than (a) 10% of its net assets
in the obligations of each of the Virgin Islands and Guam or (b) 25% of its net
assets in the obligations of Puerto Rico. Accordingly, the Fund may be adversely
affected by local political and economic conditions and developments within the
Virgin Islands, Guam and Puerto Rico affecting the issuers of such obligations.

Master Demand Notes

The Fund may invest in Master demand notes. These are unsecured obligations that
permit the investment of fluctuating amounts by the Fund at varying rates of
interest pursuant to direct arrangements between the Fund, as lender, and the
issuer, as borrower. Master demand notes may permit daily fluctuations in the
interest rate and daily changes in the amounts borrowed. The Fund has the right
to increase the amount under the note at any time up to the full amount provided
by the note agreement, or to decrease the amount. The borrower may repay up to
the full amount of the note without penalty. Master demand notes permit the Fund
to demand payment of principal and accrued interest at any time (on not more
than seven days' notice). Notes acquired by the Fund may have maturities of more
than one year, provided that (1) the Fund is entitled to payment of principal
and accrued interest upon not more than seven days' notice, and (2) the rate of
interest on such notes is adjusted automatically at periodic intervals, which
normally will not exceed 31 days, but may extend up to one year. The notes are
deemed to have a maturity equal to the longer of the period remaining to the
next interest rate adjustment or the demand notice period. Because these types
of notes are direct lending arrangements between the lender and borrower, such
instruments are not normally traded and there is no secondary market for these
notes, although they are redeemable and thus repayable by the borrower at face
value plus accrued interest at any time. Accordingly, the Fund's right to redeem
is dependent on the ability of the borrower to pay principal and interest on
demand. In connection with master demand note arrangements, the Fund`s
investment advisor considers, under standards established by the Board of
Trustees, earning power, cash flow and other liquidity ratios of the borrower
and will monitor the ability of the borrower to pay principal and interest on
demand. These notes are not typically rated by credit rating agencies.
Unless rated, the Fund may invest in them only if at the time of an investment
the issuer meets the criteria established for commercial paper discussed in this
statement of additional information (which limits such investments to commercial
paper rated A-1 by S&P, Prime-1 by Moody's or F-1 by Fitch.

Obligations of Foreign Branches of United States Banks

The Fund may invest in obligations of foreign branches of U.S. banks. These may
be general obligations of the parent bank in addition to the issuing branch, or
may be limited by the terms of a specific obligation and by government
regulation. Payment of interest and principal upon these obligations may also be
affected by governmental action in the country of domicile of the branch
(generally referred to as sovereign risk). In addition, evidences of ownership
of such securities may be held outside the U.S. and the Fund may be subject to
the risks associated with the holding of such property overseas. Examples of
governmental actions would be the imposition of currency controls, interest
limitations, withholding taxes, seizure of assets or the declaration of a
moratorium. Various provisions of federal law governing domestic branches do not
apply to foreign branches of domestic banks.

Obligations of United States Branches of Foreign Banks

The Fund may invest in obligations of U.S. branches of foreign banks. These may
be general obligations of the parent bank in addition to the issuing branch, or
may be limited by the terms of a specific obligation and by federal and state
regulation as well as by governmental action in the country in which the foreign
bank has its head office. In addition, there may be less publicly available
information about a U.S. branch of a foreign bank than about a domestic bank.

Payment-in-kind Securities

The Fund may invest in Payment-in-kind ("PIK") securities. PIKs pay interest in
either cash or additional securities, at the issuer's option, for a specified
period. The issuer's option to pay in additional securities typically ranges
from one to six years, compared to an average maturity for all PIK securities of
eleven years. Call protection and sinking fund features are comparable to those
offered on traditional debt issues.

PIKs, like zero coupon bonds, are designed to give an issuer flexibility in
managing cash flow. Several PIKs are senior debt. In other cases, where PIKs are
subordinated, most senior lenders view them as equity equivalents.

An advantage of PIKs for the issuer -- as with zero coupon securities -- is that
interest payments are automatically compounded (reinvested) at the stated coupon
rate, which is not the case with cash-paying securities. However, PIKs are
gaining popularity over zeros since interest payments in additional securities
can be monetized and are more tangible than accretion of a discount.

As a group, PIK bonds trade flat (i.e., without accrued interest). Their price
is expected to reflect an amount representing accredit interest since the last
payment. PIKs generally trade at higher yields than comparable cash-paying
securities of the same issuer. Their premium yield is the result of the lesser
desirability of non-cash interest, the more limited audience for non-cash paying
securities, and the fact that many PIKs have been issued to equity investors who
do not normally own or hold such securities.

Calculating the true yield on a PIK security requires a discounted cash flow
analysis if the security (ex interest) is trading at a premium or a discount
because the realizable value of additional payments is equal to the current
market value of the underlying security, not par.

Regardless of whether PIK securities are senior or deeply subordinated, issuers
are highly motivated to retire them because they are usually their most costly
form of capital.

Zero Coupon "Stripped" Bonds

The Fund may invest in zero coupon "stripped" bonds. These represent ownership
in serially maturing interest payments or principal payments on specific
underlying notes and bonds, including coupons relating to such notes and bonds.
The interest and principal payments are direct obligations of the issuer. Zero
coupon bonds of any series mature periodically from the date of issue of such
series through the maturity date of the securities related to such series.
Principal zero coupon bonds mature on the date specified therein, which is the
final maturity date of the related securities. Each zero coupon bond entitles
the holder to receive a single payment at maturity. There are no periodic
interest payments on a zero coupon bond. Zero coupon bonds are offered at
discounts from their face amounts.

In general, owners of zero coupon bonds have substantially all the rights and
privileges of owners of the underlying coupon obligations or principal
obligations. Owners of zero coupon bonds have the right upon default on the
underlying coupon obligations or principal obligations to proceed directly and
individually against the issuer and are not required to act in concert with
other holders of zero coupon bonds.

For federal income tax purposes, a purchaser of principal zero coupon bonds or
coupon zero coupon bonds (either initially or in the secondary market) is
treated as if the buyer had purchased a corporate obligation issued on the
purchase date with an original issue discount equal to the excess of the amount
payable at maturity over the purchase price. The purchaser is required to take
into income each year as ordinary income an allocable portion of such discounts
determined on a "constant yield" method. Any such income increases the holder's
tax basis for the zero coupon bond, and any gain or loss on a sale of the zero
coupon bonds relative to the holder's basis, as so adjusted, is a capital gain
or loss. If the holder owns both principal zero coupon bonds and coupon zero
coupon bonds representing interest in the same underlying issue of securities, a
special basis allocation rule (requiring the aggregate basis to be allocated
among the items sold and retained based on their relative fair market value at
the time of sale) may apply to determine the gain or loss on a sale of any such
zero coupon bonds.

Mortgage-Backed or Asset-Backed Securities

The Fund may invest in mortgage-backed securities and asset-backed securities.
Two principal types of mortgage-backed securities are collateralized mortgage
obligations ("CMOs") and real estate mortgage investment conduits ("REMICs").
CMOs are securities collateralized by mortgages, mortgage pass-throughs,
mortgage pay-through bonds (bonds representing an interest in a pool of
mortgages where the cash flow generated from the mortgage collateral pool is
dedicated to bond repayment), and mortgage-backed bonds (general obligations of
the issuers payable out of the issuers' general funds and additionally secured
by a first lien on a pool of single family detached properties). Many CMOs are
issued with a number of classes or series which have different maturities and
are retired in sequence.

Investors purchasing CMOs in the shortest maturities receive or are credited
with their pro rata portion of the scheduled payments of interest and principal
on the underlying mortgages plus all unscheduled prepayments of principal up to
a predetermined portion of the total CMO obligation. Until that portion of such
CMO obligation is repaid, investors in the longer maturities receive interest
only. Accordingly, the CMOs in the longer maturity series are less likely than
other mortgage pass-throughs to be prepaid prior to their stated maturity.
Although some of the mortgages underlying CMOs may be supported by various types
of insurance, and some CMOs may be backed by GNMA certificates or other mortgage
pass-throughs issued or guaranteed by U.S. government agencies or
instrumentalities, the CMOs themselves are not generally guaranteed.

REMICs, which were authorized under the Tax Reform Act of 1986, are private
entities formed for the purpose of holding a fixed pool of mortgages secured by
an interest in real property. REMICs are similar to CMOs in that they issue
multiple classes of securities.

In addition to mortgage-backed securities, the Fund may invest in securities
secured by other assets including company receivables, truck and auto loans,
leases, and credit card receivables. These issues may be traded over-the-counter
and typically have a short-intermediate maturity structure depending on the pay
down characteristics of the underlying financial assets which are passed through
to the security holder.

Credit card receivables are generally unsecured and the debtors are entitled to
the protection of a number of state and federal consumer credit laws, many of
which give such debtors the right to set off certain amounts owed on the credit
cards, thereby reducing the balance due. Most issuers of asset-backed securities
backed by automobile receivables permit the servicers of such receivables to
retain possession of the underlying obligations. If the services were to sell
these obligations to another party, there is a risk that the purchaser would
acquire an interest superior to that of the holders of the rated asset-backed
securities. In addition, because of the large number of vehicles involved in a
typical issuance and technical requirements under state laws, the trustee for
the holders of asset-backed securities backed by automobile receivables may not
have a proper security interest in all of the obligations backing such
receivables. Therefore, there is the possibility that recoveries on repossessed
collateral may not, in some cases, be available to support payments on these
securities.

In general, issues of asset-backed securities are structured to include
additional collateral and/or additional credit support to protect against the
risk that a portion of the collateral supporting the asset-backed securities may
default and/or may suffer from these defects. In evaluating the strength of
particular issues of asset-backed securities, the investment advisor considers
the financial strength of the guarantor or other provider of credit support, the
type and extent of credit enhancement provided as well as the documentation and
structure of the issue itself and the credit support.

Variable or Floating Rate Instruments

The Fund may invest in variable or floating rate instruments which may involve a
demand feature and may include variable amount master demand notes which may or
may not be backed by bank letters of credit. Variable or floating rate
instruments bear interest at a rate which varies with changes in market rates.
The holder of an instrument with a demand feature may tender the instrument back
to the issuer at par prior to maturity. A variable amount master demand note is
issued pursuant to a written agreement between the issuer and the holder, its
amount may be increased by the holder or decreased by the holder or issuer, it
is payable on demand, and the rate of interest varies based upon an agreed
formula. The quality of the underlying credit must, in the opinion of the
investment advisor, be equivalent to the long-term bond or commercial paper
ratings applicable to permitted investments for the Fund. The investment advisor
will monitor, on an ongoing basis, the earning power, cash flow, and liquidity
ratios of the issuers of such instruments and will similarly monitor the ability
of an issuer of a demand instrument to pay principal and interest on demand.

PURCHASE, REDEMPTION AND PRICING OF SHARES

You may buy shares of the Fund through the Distributor,
broker-dealers that have entered into special agreements with the Distributor or
certain other financial institutions. The Fund offers up to different classes of
shares that differ primarily with respect to sales charges and distribution
fees. Depending upon the class of shares, you will pay an initial sales charge
when you buy the Fund's shares, a contingent deferred sales charge (a "CDSC")
when you redeem the Fund's shares or no sales charges at all.

Class A Shares

With certain exceptions, when you purchase Class A shares you will pay a
maximum sales charge of 4.75%. The prospectus contains a complete table of
applicable sales charges and a discussion of sales charge reductions or waivers
that may apply to purchases. If you purchase Class A shares in the amount of $1
million or more, without an initial sales charge, the Fund will charge a CDSC of
1.00% if you redeem during the month of your purchase or the 12-month period
following the month of your purchase (see "Contingent Deferred Sales Charge"
below).

No front-end sales charges are imposed on Class A shares purchased by
(a) institutional investors, which may include bank trust departments and
registered investment advisors; (b) investment advisors, consultants or
financial planners who place trades for their own accounts or the accounts of
their clients and who charge such clients a management, consulting, advisory or
other fee; (c) clients of investment advisors or financial planners who place
trades for their own accounts if the accounts are linked to the master account
of such investment advisors or financial planners on the books of the
broker-dealer through whom shares are purchased; (d) institutional clients of
broker-dealers, including retirement and deferred compensation plans and the
trusts used to fund these plans, which place trades through an omnibus account
maintained with the Fund by the broker-dealer; (e) shareholders of record on
October 12, 1990 in any series of Evergreen Investment Trust in existence on
that date, and the members of their immediate families; (f) current and retired
employees of FUNB and its affiliates, EDI and any broker-dealer with whom EDI
has entered into an agreement to sell shares of the Fund, and members of the
immediate families of such employees; and (g) upon the initial purchase of an
Evergreen fund by investors reinvesting the proceeds from a redemption within
the preceding 30 days of shares of other mutual funds, provided such shares were
initially purchased with a front-end sales charge or subject to a CDSC.

Class B Shares

The Fund offers Class B shares at net asset value without an initial
sales charge. With certain exceptions, however, the Fund will charge a CDSC on
shares you redeem within 72 months after the month of your purchase, in
accordance with the following schedule:

REDEMPTION TIME CDSC RATE

Month of purchase and the first 12-month
period following the month of purchase. ...................................5.00%
Second 12-month period following the month of purchase.....................4.00%
Third 12-month period following the month of purchase......................3.00%
Fourth 12-month period following the month of purchase.....................3.00%
Fifth 12-month period following the month of purchase......................2.00%
Sixth 12-month period following the month of purchase......................1.00%
Thereafter................................................................0.00%

Class B shares that have been outstanding for seven years after the month of
purchase will automatically convert to Class A shares without imposition of a
front-end sales charge or exchange fee. Conversion of Class B shares represented
by stock certificates will require the return of the stock certificate to ESC.

Class C Shares

Class C shares are available only through broker-dealers who have entered into
special distribution agreements with the Distributor. The Fund offers Class C
shares at net asset value without an initial sales charge. With certain
exceptions, however, the Fund will charge a CDSC of 1.00% on shares you redeem
within 12-months after the month of your purchase. See "Contingent Deferred
Sales Charge" below.

Class Y Shares

No CDSC is imposed on the redemption of Class Y shares. Class Y shares
are not offered to the general public and are available only to (1) persons who
at or prior to December 31, 1994 owned shares in a mutual fund advised by (2)
certain institutional investors and (3) investment advisory clients of EIM,
EAMC, EIMC, MIC, First International Advisors, Ltd., or their affiliates. Class
Y shares are offered at net asset value without a front-end or back-end sales
charge and do not bear any Rule 12b-1 distribution expenses.

INSTITUTIONAL SHARES, INSTITUTIONAL SERVICE SHARES AND CHARITABLE SHARES

Each institutional class of shares is sold without a front-end sales
charge or contingent deferred sales charge. Institutional Service shares pay an
ongoing service fee. The minimum initial investment in any institutional class
of shares is $1 million, which may be waived in certain circumstances. There is
no minimum amount required for subsequent purchases.

Contingent Deferred Sales Charge

The Fund charges a CDSC as reimbursement for certain expenses, such as
commissions or shareholder servicing fees, that it has incurred in connection
with the sale of its shares (see "Distribution Expenses Under Rule 12b-1,"
below). Institutional, Institutional Service and Charitable shares do not charge
a CDSC. If imposed, the Fund deducts the CDSC from the redemption proceeds you
would otherwise receive. The CDSC is a percentage of the lesser of (1) the net
asset
value of the shares at the time of redemption or (2) the shareholder's original
net cost for such shares. Upon request for redemption, to keep the CDSC a
shareholder must pay as low as possible, the Fund will first seek to redeem
shares not subject to the CDSC and/or shares held the longest, in that order.
The CDSC on any redemption is, to the extent permitted by the National
Association of Securities Dealers, Inc. ("NASD"), paid to the Distributor or its
predecessor.

SALES CHARGE WAIVERS AND REDUCTIONS

The following information is not applicable to Institutional,
Institutional Service and Charitable shares.

If you making a large purchase, there are several ways you can combine
multiple purchases of Class A shares in Evergreen Funds and take advantage of
lower sales charges. These are described below.

Combined Purchases

You can reduce your sales charge by combining purchases of Class A
shares of multiple Evergreen Funds. For example, if you invested $75,000 in each
of two different Evergreen Funds, you would pay a sales charge based on a
$150,000 purchase (i.e., 3.75% of the offering price, rather than 4.75%).

Rights of Accumulation

You can reduce your sales charge by adding the value of Class A shares
of Evergreen Funds you already own to the amount of your next Class A
investment. For example, if you hold Class A shares valued at $99,999 and
purchase an additional $5,000, the sales charge for the $5,000 purchase would be
at the next lower sales charge of 3.75%, rather than 4.75%.

Your account, and therefore your rights of accumulation, can be linked to
immediate family members which includes father and mother, brothers and sisters,
and sons and daughters. The same rule applies with respect to individual
retirement plans. Please note, however, that retirement plans involving
employees stand alone and do not pass on rights of accumulation.

Letter of Intent

You can, by completing the "Letter of Intent" section of the
application, purchase Class A shares over a 13-month period and receive the same
sales charge as if you had invested all the money at once. All purchases of
Class A shares of an Evergreen Fund during the period will qualify as Letter of
Intent purchases.

Waiver of Initial Sales Charges

The Fund may sell its shares at net asset value without an initial sales
charge to:

1. purchasers of shares in the amount of $1 million or more;
2. a corporate or certain other qualified retirement plan or a
non-qualified deferred compensation plan or a Title 1 tax-sheltered annuity or
TSA plan sponsored by an organization having 100 or more eligible employees (a
"Qualifying Plan") or a TSA plan sponsored by a public educational entity having
5,000 or more eligible employees (an "Educational TSA Plan");
3. institutional investors, which may include bank trust departments and
registered investment advisors;
4. investment advisors, consultants or financial planners who place
trades for their own accounts or the accounts of their clients and who charge
such clients a management, consulting, advisory or other fee;
5. clients of investment advisors or financial planners who place trades
for their own accounts if the accounts are linked to a master account of such
investment advisors or financial planners on the books of the broker-dealer
through whom shares are purchased;
6. institutional clients of broker-dealers, including retirement and
deferred compensation plans and the trusts used to fund these plans, which place
trades through an omnibus account maintained with the Fund by the broker-dealer;
7. employees of First Union National Bank ("FUNB"), its affiliates, the
Distributor, any broker-dealer with whom the Distributor, has entered into an
agreement to sell shares of the Fund, and members of the immediate families of
such employees;
8. certain Directors, Trustees, officers and employees of the Evergreen
Funds, the Distributor or their affiliates and to the immediate families of such
persons; or
9. a bank or trust company in a single account in the name of such bank
or trust company as Trustee if the initial investment in or any Evergreen fund
made pursuant to this waiver is at least $500,000 and any commission paid at the
time of such purchase is not more than 1% of the amount invested.

With respect to items 8 and 9 above, the Fund will only sell shares to
these parties upon the purchasers written assurance that the purchase is for
their personal investment purposes only. Such purchasers may not resell the
securities except through redemption by the Fund. The Fund will not charge any
CDSC on redemptions by such purchasers.

Waiver of CDSCS

The Fund does not impose a CDSC when the shares you are redeeming
represent:

1. an increase in the share value above the net cost of such shares;
2. certain shares for which the Fund did not pay a commission on
issuance, including shares acquired through reinvestment of dividend income and
capital gains distributions;
3. shares that are in the accounts of a shareholder who has died or
become disabled;
4. a lump-sum distribution from a 401(k) plan or other benefit plan
qualified under the Employee Retirement Income Security Act of 1974 ("ERISA");
5. an automatic withdrawal from the ERISA plan of a shareholder who
is a least 59 years old;
6. shares in an account that we have closed because the account has an
aggregate net asset value of less than $1,000;
7. an automatic withdrawal under an Systematic Income Plan of up to 1.0%
per month of your initial account balance;
8. a withdrawal consisting of loan proceeds to a retirement plan
participant; 9. a financial hardship withdrawal made by a retirement
plan participant; 10. a withdrawal consisting of returns of excess
contributions or excess deferral
amounts made to a retirement plan; or
11. a redemption by an individual participant in a Qualifying Plan that
purchased Class C shares (this waiver is not available in the event a Qualifying
Plan, as a whole, redeems substantially all of its assets).

Exchanges

Investors may exchange shares of the Fund for shares of the same class of any
other Evergreen fund other that the Evergreen Select Funds. Shares of any class
of the Evergreen Select Funds may be exchanged for the same class of shares of
any other Evergreen Select Fund. See "By Exchange" under "How to Buy Shares" in
the prospectus. Before you make an exchange, you should read the prospectus of
the Evergreen fund into which you want to exchange. The Trust's Board of
Trustees reserves the right to discontinue, alter or limit the exchange
privilege at any time.

Automatic Reinvestment

As described in the prospectus, a shareholder may elect to receive
dividends and capital gains distributions in cash instead of shares. However,
ESC will automatically reinvest all dividends and distributions in additional
shares when it learns that the postal or other delivery service is unable to
deliver checks or transaction confirmations to the shareholder's address of
record. When a check is returned, the Fund will hold the check amount in a
no-interest account in the shareholder's name until the shareholder updates his
or her address or automatic reinvestment begins. Uncashed or returned redemption
checks will also be handled in the manner described above.

Calculation of Net Asset Value

The Fund calculates its net asset value ("NAV") once daily on Monday
through Friday, as described in the prospectus. The Fund will not compute its
NAV on the days the New York Stock Exchange is closed: New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day.

The NAV of the Fund is calculated by dividing the value of the Fund's
net assets attributable to that class by all of the shares issued for that
class.

Valuation of Portfolio Securities

Current values for the Fund's portfolio securities are determined as
follows:

1. Securities that are traded on an established securities exchange or
the over-the-counter National Market System ("NMS") are valued on the basis of
the last sales price on the exchange where primarily traded or on the NMS prior
to the time of the valuation, provided that a sale has occurred.
2. Securities traded on an established securities exchange or in the
over-the-counter market for which there has been no sale and other securities
traded in the over-the-counter market are valued at the mean of the bid and
asked prices at the time of valuation.
3. Short-term investments maturing in more than 60 days, for which
market quotations are readily available, are valued at current market value.
4. Short-term investments maturing in sixty days or less are valued at
amortized cost, which approximates market.
5. Securities, including restricted securities, for which market
quotations are not readily available; listed securities or those on NMS if, in
the Fund's opinion, the last sales price does not reflect a current market
value; and other assets are valued at prices deemed in good faith to be fair
under procedures established by the Board of Trustees.

PERFORMANCE CALCULATIONS

Total Return

Total return quotations for a class of shares of the Fund as they may appear
from time to time in advertisements are calculated by finding the average annual
compounded rates of return over one, five and ten year periods, or the time
periods for which such class of shares has been effective, whichever is
relevant, on a hypothetical $1,000 investment that would equate the initial
amount invested in the class to the ending redeemable value. To the initial
investment all dividends and distributions are added, and all recurring fees
charged to all shareholder accounts are deducted. The ending redeemable value
assumes a complete redemption at the end of the relevant periods. The following
is the formula used to calculate average annual total return:

P = initial payment of $1,000 T = average total return N = number of
years
ERV = ending redeemable value of the initial $1,000

Yield

Described below are yield calculations the Fund may use. Yield quotations are
expressed in annualized terms and may be quoted on a compounded basis. Yields
based on these calculations do not represent the Fund's yield for any future
period.

30-Day Yield

If the Fund invests primarily in bonds, it may quote its 30-day yield in
advertisements or in reports or other communications to shareholders. It is
calculated by dividing the net investment income per share earned during the
period by the maximum offering price per share on the last day of the period,
according to the following formula:

Where:
a = Dividends and interest earned during the period b = Expenses accrued for the
period (net of reimbursements) c = The average daily number of shares
outstanding during the period
that were entitled to receive dividends
d = The maximum offering price per share on the last day of the period

7-Day Current and Effective Yield

If the Fund invests primarily in money market instruments, it may quote its
7-day current yield or effective yield in advertisements or in reports or other
communications to shareholders.

The current yield is calculated by determining the net change, excluding capital
changes and income other than investment income, in the value of a hypothetical,
pre-existing account having a balance of one share at the beginning of the 7-day
base period, subtracting a hypothetical charge reflecting deductions from
shareholder accounts, and dividing the difference by the value of the account at
the beginning of the base period to obtain the base period return, and then
multiplying the base period return by (365/7).

The effective yield is based on a compounding of the current yield, according to
the following formula:

Tax Equivalent Yield

If the Fund invests primarily in municipal bonds, it may quote in advertisements
or in reports or other communications to shareholders a tax equivalent yield,
which is what an investor would generally need to earn from a fully taxable
investment in order to realize, after income taxes, a benefit equal to the tax
free yield provided by the Fund. Tax equivalent yield is calculated using the
following formula:

The quotient is then added to that portion, if any, of the
Fund's yield that is not tax exempt. Depending on the Fund's objective, the
income tax rate used in the formula above may be federal or a combination of
federal and state.

PRINCIPAL UNDERWRITER

The Distributor is the principal underwriter for the Trust and with
respect to each class of shares of the Fund. The Trust has entered into a
Principal Underwriting Agreement ("Underwriting Agreement") with the Distributor
with respect to each class of the Fund. The Distributor is a subsidiary of The
BISYS Group, Inc.

The Distributor, as agent, has agreed to use its best efforts to find
purchasers for the shares. The Distributor may retain and employ representatives
to promote distribution of the shares and may obtain orders from broker-dealers,
and others, acting as principals, for sales of shares to them. The Underwriting
Agreement provides that the Distributor will bear the expense of preparing,
printing, and distributing advertising and sales literature and prospectuses
used by it.

All subscriptions and sales of shares by the Distributor are at the
public offering price of the shares, which is determined in accordance with the
provisions of the Trust's Declaration of Trust, By-Laws, current prospectuses
and SAI. All orders are subject to acceptance by the Fund and the Fund reserves
the right, in its sole discretion, to reject any order received. Under the
Underwriting Agreement, the Fund is not liable to anyone for failure to accept
any order.

The Distributor has agreed that it will, in all respects, duly conform
with all state and federal laws applicable to the sale of the shares. The
Distributor has also agreed that it will indemnify and hold harmless the Trust
and each person who has been, is, or may be a Trustee or officer of the Trust
against expenses reasonably incurred by any of them in connection with any
claim, action, suit, or proceeding to which any of them may be a party that
arises out of or is alleged to arise out of any misrepresentation or omission to
state a material fact on the part of the Distributor or any other person for
whose acts the Distributor is responsible or is alleged to be responsible,
unless such misrepresentation or omission was made in reliance upon written
information furnished by the Trust.

The Underwriting Agreement provides that it will remain in effect as
long as its terms and continuance are approved annually (I) by a vote of a
majority of the Trust's Trustees who are not interested persons of the Fund, as
defined in the 1940 Act (the "Independent Trustees"), and (ii) by vote of a
majority of the Trust's Trustees, in each case, cast in person at a meeting
called for that purpose.

The Underwriting Agreement may be terminated, without penalty, on 60
days' written notice by the Board of Trustees or by a vote of a majority of
outstanding shares subject to such agreement. The Underwriting Agreement will
terminate automatically upon its "assignment," as that term is defined in the
1940 Act.

From time to time, if, in the Distributor's judgment, it could benefit
the sales of shares, the Distributor may provide to selected broker-dealers
promotional materials and selling aids, including, but not limited to, personal
computers, related software, and data files.

DISTRIBUTION EXPENSES UNDER RULE 12b-1

The Fund bears some of the costs of selling its Class A, Class B, and, when
applicable, Class C shares, or Institutional Service shares, including certain
advertising, marketing and shareholder service expenses, pursuant to Rule 12b-1
of the 1940 Act. These "12b-1 fees" or "distribution fees" are indirectly paid
by the shareholder, as shown by the Fund's expense table in the prospectus.

Under the Distribution Plans (each a "Plan," together, the "Plans") that the
Fund has adopted for its, Class A, Class B, and, when applicable, Class C
shares, or Institutional Service shares, the Fund may incur expenses for
distribution costs up to a maximum annual percentage of the average daily net
assets attributable to a class, as follows:

Class A 0.75%*
Class B 1.00%
Class C 1.00%
Institutional Service 0.35%*

*Currently limited to 0.25% or less. See the expense table in the prospectus
of the Fund in which you are interested.

Of the amounts above, each class may pay under its Plan a maximum service fee of
0.25% to compensate organizations, which may include the Fund's investment
advisor or its affiliates, for personal services provided to shareholders and
the maintenance of shareholder accounts. The Fund may not, during any fiscal
period, pay distribution or service fees greater than the amounts above.

Amounts paid under the Plans are used to compensate the Distributor
pursuant to Distribution Agreements (each an "Agreement," together, the
"Agreements") that the Fund has entered into with respect to its Class A, Class
B and, if applicable, Class C shares. The compensation is based on a maximum
annual percentage of the average daily net assets attributable to a class, as
follows:

Class A 0.25%*
Class B 1.00%
Class C 1.00%

*May be lower. See the expense table in the prospectus of the Fund in which
you are interested.

The Agreements provide that the Distributor will use the distribution fees
received from the Fund for the following purposes:

(1) to compensate broker-dealers or other persons for distributing
Fund shares;
(2) to compensate broker-dealers, depository institutions and other financial
intermediaries for providing administrative, accounting and other services with
respect to the Fund's shareholders; and

(3) to otherwise promote the sale of Fund shares.

The Agreements also provide that the Distributor may use distribution fees to
make interest and principal payments in respect of amounts that have been
financed to pay broker-dealers or other persons for distributing Fund shares.
The Distributor may assign its rights to receive compensation under the Plans to
secure such financings. FUNB or its affiliates may finance payments made by the
Distributor to compensate broker-dealers or other persons for distributing
shares of the Fund.

In the event the Fund acquires the assets of another mutual fund, compensation
paid to the Distributor under the Agreements may be paid by the Fund's
Distributor to the acquired fund's distributor or its predecessor.

Since the Distributor's compensation under the Agreements is not directly tied
to the expenses incurred by the Distributor, the compensation received by it
under the Agreements during any fiscal year may be more or less than its actual
expenses and may result in a profit to the Distributor. Distribution expenses
incurred by the Distributor in one fiscal year that exceed the compensation paid
to the Distributor for that year may be paid from distribution fees received
from the Fund in subsequent fiscal years.

Distribution fees are accrued daily and paid at least monthly on Class
A, Class B and Class C shares and are charged as class expenses, as accrued. The
distribution fees attributable to the Class B and Class C shares are designed to
permit an investor to purchase such shares through broker-dealers without the
assessment of a front-end sales charge, while at the same time permitting the
Distributor to compensate broker-dealers in connection with the sale of such
shares. In this regard, the purpose and function of the combined contingent
deferred sales charge and distribution services fee on the Class B shares are
the same as those of the front-end sales charge and distribution fee with
respect to the Class A shares in that in each case the sales charge and/or
distribution fee provide for the financing of the distribution of the Fund's
shares.
Under the Plans, the Treasurer of the Trust reports the amounts expended
under the Plans and the purposes for which such expenditures were made to the
Trustees of the Trust for their review on a quarterly basis. Also, each Plan
provides that the selection and nomination of the Independent Trustees are
committed to the discretion of such Independent Trustees then in office.

The investment advisor may from time to time from its own funds or such
other resources as may be permitted by rules of the Securities and Exchange
Commission ("SEC") make payments for distribution services to the Distributor;
the latter may in turn pay part or all of such compensation to brokers or other
persons for their distribution assistance.

Each Plan and the Agreement will continue in effect for successive
12-month periods provided, however, that such continuance is specifically
approved at least annually by the Trustees of the Trust or by vote of the
holders of a majority of the outstanding voting securities of that class and, in
either case, by a majority of the Independent Trustees of the Trust.

The Plans permit the payment of fees to brokers and others for
distribution and shareholder-related administrative services and to
broker-dealers, depository institutions, financial intermediaries and
administrators for administrative services as to Class A, Class B, Class C and
Institutional Service shares. The Plans are designed to (i) stimulate brokers to
provide distribution and administrative support services to the Fund and holders
of Class A, Class B, Class C and Institutional Service shares and (ii) stimulate
administrators to render administrative support services to the Fund and holders
of Class A, Class B, Class C and Institutional shares. The administrative
services are provided by a representative who has knowledge of the shareholder's
particular circumstances and goals, and include, but are not limited to
providing office space, equipment, telephone facilities, and various personnel
including clerical, supervisory, and computer, as necessary or beneficial to
establish and maintain shareholder accounts and records; processing purchase and
redemption transactions and automatic investments of client account cash
balances; answering routine client inquiries regarding Class A, Class B, Class C
and Institutional Service shares; assisting clients in changing dividend
options, account designations, and addresses; and providing such other services
as the Fund reasonably requests for its Class A, Class B, Class C and
Institutional Service shares.

In the event that the Plan or Distribution Agreement is terminated or
not continued with respect to one or more classes of the Fund, (i) no
distribution fees (other than current amounts accrued but not yet paid) would be
owed by the
Fund to the Distributor with respect to that class or classes, and
(ii) the Fund would not be obligated to pay the Distributor for any amounts
expended under the Distribution Agreement not previously recovered by the
Distributor from distribution services fees in respect of shares of such class
or classes through deferred sales charges.

All material amendments to any Plan or Agreement must be approved by a
vote of the Trustees of the Trust or the holders of the Fund's outstanding
voting securities, voting separately by class, and in either case, by a majority
of the Independent Trustees, cast in person at a meeting called for the purpose
of voting on such approval; and any Plan or Distribution Agreement may not be
amended in order to increase materially the costs that a particular class of
shares of the Fund may bear pursuant to the Plan or Distribution Agreement
without the approval of a majority of the holders of the outstanding voting
shares of the class affected. Any Plan or Distribution Agreement may be
terminated (I) by the Fund without penalty at any time by a majority vote of the
holders of the outstanding voting securities of the Fund, voting separately by
class or by a majority vote of the Independent Trustees, or (ii) by the
Distributor. To terminate any Distribution Agreement, any party must give the
other parties 60 days' written notice; to terminate a Plan only, the Fund need
give no notice to the Distributor. Any Distribution Agreement will terminate
automatically in the event of its assignment. For more information about 12b-1
fees, see "Expenses" in the prospectus and "12b-1 Fees" under "Expenses" in Part
1 of this SAI.

TAX INFORMATION

Requirements for Qualifications as a Regulated Investment Company

The Fund intends to qualify for and elect the tax treatment applicable
to regulated investment companies ("RIC") under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). If the (Such qualification does
not involve supervision of management or investment practices or policies by the
Internal Revenue Service.) In order to qualify as a RIC, the Fund must, among
other things, (I) derive at least 90% of its gross income from dividends,
interest, payments with respect to proceeds from securities loans, gains from
the sale or other disposition of securities or foreign currencies and other
income (including gains from options, futures or forward contracts) derived with
respect to its business of investing in such securities; and (ii) diversify its
holdings so that, at the end of each quarter of its taxable year, (a) at least
50% of the market value of the Fund's total assets is represented by cash, U.S.
government securities and other securities limited in respect of any one issuer,
to an amount not greater than 5% of the Fund's total assets and 10% of the
outstanding voting securities of such issuer, and (b) not more than 25% of the
value of its total assets is invested in the securities of any one issuer (other
than U.S. government securities and securities of other regulated investment
companies). By so qualifying, the Fund is not subject to federal income tax if
it timely distributes its investment company taxable income and any net realized
capital gains. A 4% nondeductible excise tax will be imposed on the Fund to the
extent it does not meet certain distribution requirements by the end of each
calendar year. The Fund anticipates meeting such distribution requirements.

Taxes on Distributions

Unless the Fund is a municipal bond fund, distributions will be
taxable to shareholders whether made in shares or in cash. Shareholders electing
to receive distributions in the form of additional shares will have a cost
basis for federal income tax purposes in each share so received equal to the
net asset value of a share of the Fund on the reinvestment date.

To calculate ordinary income for federal income tax purposes,
shareholders must generally include dividends paid by the Fund from its
investment company taxable income (net taxable investment income plus net
realized short-term capital gains, if any). The Fund will include dividends it
receives from domestic corporations when the Fund calculates its gross
investment income. Unless the Fund is a municipal bond fund or U.S. Treasury
money market fund, it anticipates that all or a portion of the ordinary
dividends which it pays will qualify for the 70% dividends-received deduction
for corporations. The Fund will inform shareholders of the amounts that so
qualify. If the Fund is a municipal bond fund or U.S. Treasury money market
fund, none of its income will consist of corporate dividends; therefore, none of
its distributions will qualify for the 70% dividends-received deduction for
corporations.

From time to time, the Fund will distribute the excess of its net
long-term capital gains over its short-term capital loss to shareholders (i.e.,
capital gain dividends). For federal tax purposes, shareholders must include
such capital gain dividends when calculating their net long-term capital gains.
Capital gain dividends are taxable as net long-term capital gains to a
shareholder, no matter how long the shareholder has held the shares.

Distributions by the Fund reduce its NAV. A distribution that reduces the
Fund's NAV below a shareholder's cost basis is taxable as described above,
although from an investment standpoint, it is a return of capital. In
particular, if a shareholder buys Fund shares just before the Fund makes a
distribution, when the Fund makes the distribution the shareholder will
receive what is in effect a return of capital. Nevertheless, the
shareholder may incur taxes on the distribution. Therefore, shareholders
should carefully consider the tax consequences of buying Fund shares just
before a distribution.

All distributions, whether received in shares or cash, must be reported by
each shareholder on his or her federal income tax return. Each shareholder
should consult a tax advisor to determine the state and local tax implications
of Fund distributions.

If more than 50% of the value of the Fund's total assets at the end of a
fiscal year is represented by securities of foreign corporations and the Fund
elects to make foreign tax credits available to its shareholders, a
shareholder will be required to include in his gross income both cash dividends
and the amount the Fund advises him is his pro rata portion of income taxes
withheld by foreign governments from interest and dividends paid on the Fund's
investments. The shareholder may be entitled, however, to take the amount of
such foreign taxes withheld as a credit against his U.S. income tax, or to treat
the foreign tax withheld as an itemized deduction from his gross income, if
that should be to his advantage. In substance, this policy enables the
shareholder to benefit from the same foreign tax credit or deduction that he
would have received if he had been the individual owner of foreign securities
and had paid foreign income tax on the income therefrom. As in the case of
individuals receiving income directly from foreign sources, the credit or
deduction is subject to a number of limitations.

Special Tax Information for Municipal Bond Fund Shareholders

The Fund expects that substantially all of its dividends will be "exempt
interest dividends," which should be treated as excludable from federal gross
income. In order to pay exempt interest dividends, at least 50% of the value of
the Fund's assets must consist of federally tax-exempt obligations at the close
of each quarter. An exempt interest dividend is any dividend or part thereof
(other than a capital gain dividend) paid by the Fund with respect to its net
federally excludable municipal obligation interest and designated as an exempt
interest dividend in a written notice mailed to each shareholder not later than
60 days after the close of its taxable year. The percentage of the total
dividends paid by the Fund with respect to any taxable year that qualifies as
exempt interest dividends will be the same for all shareholders of the Fund
receiving dividends with respect to such year. If a shareholder receives an
exempt interest dividend with respect to any share and such share has been held
for six months or less, any loss on the sale or exchange of such share will be
disallowed to the extent of the exempt interest dividend amount.

Any shareholder of the Fund who may be a "substantial user" (as defined by the
Code) of a facility financed with an issue of tax-exempt obligations or a
"related person" to such a user should consult his tax advisor concerning his
qualification to receive exempt interest dividends should the Fund hold
obligations financing such facility.

Under regulations to be promulgated, to the extent attributable to
interest paid on certain private activity bonds, the Fund's exempt interest
dividends, while otherwise tax-exempt, will be treated as a tax preference item
for alternative minimum tax purposes. Corporate shareholders should also be
aware that the receipt of exempt interest dividends could subject them to
alternative minimum tax under the provisions of Section 56(g) of the Code
(relating to "adjusted current earnings").

Interest on indebtedness incurred or continued by shareholders to purchase or
carry shares of the Fund will not be deductible for federal income tax purposes
to the extent of the portion of the interest expense relating to exempt interest
dividends. Such portion is determined by multiplying the total amount of
interest paid or accrued on the indebtedness by a fraction, the numerator of
which is the exempt interest dividends received by a shareholder in his taxable
year and the denominator of which is the sum of the exempt interest dividends
and the taxable distributions out of the Fund's investment income and long-term
capital gains received by the shareholder.

Taxes on The Sale or Exchange of Fund Shares

Upon a sale or exchange of Fund shares, a shareholder will realize a
taxable gain or loss depending on his or her basis in the shares. A shareholder
must treat such gains or losses as a capital gain or loss if the shareholder
held the shares as capital assets. Capital gain on assets held for more than 12
months is generally subject to a maximum federal income tax rate of 20% for an
individual. Generally, the Code will not allow a shareholder to realize a loss
on shares he or she has sold or exchanged and replaced within a 61-day period
beginning 30 days before and ending 30 days after he or she sold or exchanged
the shares. The Code will not allow a shareholder to realize a loss on the sale
of Fund shares held by the shareholder for six months or less to the extent the
shareholder received exempt interest dividends on such shares. Moreover, the
Code will treat a shareholder's loss on shares held for six months or less as a
long-term capital loss to the extent the shareholder received distributions of
net capital gains on such shares.

Shareholders who fail to furnish their taxpayer identification numbers
to the Fund and to certify as to its correctness and certain other shareholders
may be subject to a 31% federal income tax backup withholding requirement on
dividends, distributions of capital gains and redemption proceeds paid to them
by the Fund. If the withholding provisions are applicable, any such dividends or
capital gain distributions to these shareholders, whether taken in cash or
reinvested in additional shares, and any redemption proceeds will be reduced by
the amounts required to be withheld. Investors may wish to consult their own tax
advisors about the applicability of the backup withholding provisions.

Other Tax Considerations

The foregoing discussion relates solely to U.S. federal income tax law
as applicable to U.S. persons (i.e., U.S. citizens and residents and U.S.
domestic corporations, partnerships, trusts and estates). It does not reflect
the special tax consequences to certain taxpayers (e.g., banks, insurance
companies, tax exempt organizations and foreign persons). Shareholders are
encouraged to consult their own tax advisors regarding specific questions
relating to federal, state and local tax consequences of investing in shares of
the Fund. Each shareholder who is not a U.S. person should consult his or her
tax advisor regarding the U.S. and foreign tax consequences of ownership
of shares of the Fund, including the possibility that such a shareholder may be
subject to a U.S. withholding tax at a rate of 30% (or at a lower rate under a
tax treaty) on amounts treated as income from U.S. sources under the Code.

BROKERAGE

Brokerage Commissions

If the Fund invests in equity securities, it expects to buy and sell them
through brokerage transactions for which commissions are payable. Purchases from
underwriters will include the underwriting commission or concession, and
purchases from dealers serving as market makers will include a dealer's mark-up
or reflect a dealer's mark-down. Where transactions are made in the
over-the-counter market, the Fund will deal with primary market makers unless
more favorable prices are otherwise obtainable.

If the Fund invests in fixed income securities, it expects to buy and sell them
directly from the issuer or an underwriter or market maker for the securities.
Generally, the Fund will not pay brokerage commissions for such purchases. When
the Fund buys a security from an underwriter, the purchase price will usually
include an underwriting commission or concession. The purchase price for
securities bought from dealers serving as market makers will similarly include
the dealer's mark up or reflect a dealer's mark down. When the Fund executes
transactions in the over-the-counter market, it will deal with primary market
makers unless more favorable prices are otherwise obtainable.

Selection of Brokers

When buying and selling portfolio securities, the advisor seeks brokers who can
provide the most benefit to the Fund. When selecting a broker, the investment
advisor will primarily look for the best price at the lowest commission, but in
the context of the broker's:

1. ability to provide the best net financial result to the Fund;
2. efficiency in handling trades;
3. ability to trade large blocks of securities;
4. readiness to handle difficult trades;
5. financial strength and stability; and
6. provision of "research services," defined as (a) reports and
analyses concerning issuers, industries, securities and economic factors and
(b) other information useful in making investment decisions.

The Fund may pay higher brokerage commissions to a broker providing it with
research services, as defined in item 6, above. Pursuant to Section 28(e) of the
Securities Exchange Act of 1934, this practice is permitted if the commission is
reasonable in relation to the brokerage and research services provided. Research
services provided by a broker to the investment advisor do not replace, but
supplement, the services the investment advisor is required to deliver to the
Fund. It is impracticable for the investment advisor to allocate the cost, value
and specific application of such research services among its clients because
research services intended for one client may indirectly benefit another.

When selecting a broker for portfolio trades, the investment advisor may also
consider the amount of Fund shares a broker has sold, subject to the other
requirements described above.

If the Fund is advised by EAMC, Lieber & Company, an affiliate of EAMC and a
member of the New York and American Stock Exchanges, will to the extent
practicable effect substantially all of the portfolio transactions effected on
those exchanges for the Fund.

Simultaneous Transactions

The investment advisor makes investment decisions for the Fund independently of
decisions made for its other clients. When a security is suitable for the
investment objective of more than one client, it may be prudent for the
investment advisor to engage in a simultaneous transaction, that is, buy or sell
the same security for more than one client. The investment advisor strives for
an equitable result in such transactions by using an allocation formula. The
high volume involved in some simultaneous transactions can result in greater
value to the Fund, but the ideal price or trading volume may not always be
achieved for the Fund.

ORGANIZATION

Description of Shares

The Declaration of Trust authorizes the issuance of an unlimited number
of shares of beneficial interest of series and classes of shares. Each share of
the Fund represents an equal proportionate interest with each other share of
that series and/or class. Upon liquidation, shares are entitled to a pro rata
share of the Trust based on the relative net assets of each series and/or class.
Shareholders have no preemptive or conversion rights. Shares are redeemable and
transferable.

Voting Rights

Under the terms of the Declaration of Trust, the Trust is not required
to hold annual meetings. At meetings called for the initial election of Trustees
or to consider other matters, each share is entitled to one vote for each dollar
of "NAV"applicable to such share. Shares generally vote together as one class on
all matters. Classes of shares of the Fund have equal voting rights. No
amendment may be made to the Declaration of Trust that adversely affects any
class of shares without the approval of a majority of the votes applicable to
the shares of that class. Shares have non-cumulative voting rights, which means
that the holders of more than 50% of the votes applicable to shares voting for
the election of Trustees can elect 100% of the Trustees to be elected at a
meeting and, in such event, the holders of the remaining shares voting will not
be able to elect any Trustees.

After the initial meeting as described above, no further meetings of
shareholders for the purpose of electing Trustees will be held, unless required
by law (for such reasons as electing or removing Trustees, changing fundamental
policies, and approving advisory agreements or 12b-1 plans), unless and until
such time as less than a majority of the Trustees holding office have been
elected by shareholders, at which time, the Trustees then in office will call a
shareholders' meeting for the election of Trustees.

Limitation of Trustees' Liability

The Declaration of Trust provides that a Trustee will not be liable for
errors of judgment or mistakes of fact or law, but nothing in the Declaration of
Trust protects a Trustee against any liability to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of his duties involved in the conduct of his office.

Banking Laws

The Glass-Steagall Act and other banking laws and regulations presently prohibit
member banks of the Federal Reserve System ("Member Banks") or their non-bank
affiliates from sponsoring, organizing, controlling, or distributing the shares
of registered, open-end investment companies such as the Trust. Such laws and
regulations also prohibit banks from issuing, underwriting or distributing
securities in general. However, under the Glass-Steagall Act and such other laws
and regulations, a Member Bank or an affiliate thereof may act as investment
advisor, transfer agent or custodian to a registered open-end investment company
and may also act as agent in connection with the purchase of shares of such an
investment company upon the order of its customer, FUNB and its affiliates are
subject to, and in compliance with, the aforementioned laws and regulations.

Changes to applicable laws and regulations or future judicial or administrative
decisions could result in FUNB and its affiliates being prevented from
continuing to perform the services required under the investment advisory
contract or from acting as agent in connection with the purchase of shares of
the Fund by its customers. If FUNB and its affiliates were prevented from
continuing to provide for services called for under the investment advisory
agreement, it is expected that the Trustees would identify, and call upon the
Fund's shareholders to approve a new investment advisor. If this were to occur,
it is not anticipated that the shareholders of the Fund would suffer any adverse
financial consequences.

INVESTMENT ADVISORY AGREEMENT

On behalf of the Fund, the Trust has entered into an investment advisory
agreement with the Fund's investment advisor (the "Advisory Agreement"). Under
the Advisory Agreement, and subject to the supervision of the Trust's Board of
Trustees, the investment advisor furnishes to the Fund (unless the Fund is
Masters ) investment advisory, management and administrative services, office
facilities, and equipment in connection with its services for managing the
investment and reinvestment of the Fund's assets. The investment advisor pays
for all of the expenses incurred in connection with the provision of its
services.

If the Fund is Masters, the Advisory Agreement is similar to the above
except that the investment advisor selects sub-advisors (hereinafter referred to
as "Managers") for the Fund and monitors each Manager's investment program and
results. The investment advisor has primary responsibility under the
multi-manager strategy to oversee the Managers, including making recommendations
to the Trust regarding the hiring, termination and replacement of Managers.

The Fund pays for all charges and expenses, other than those
specifically referred to as being borne by the investment advisor, including,
but not limited to, (1) custodian charges and expenses; (2) bookkeeping and
auditors' charges and expenses; (3) transfer agent charges and expenses; (4)
fees and expenses of Independent Trustees; (5) brokerage commissions, brokers'
fees and expenses; (6) issue and transfer taxes; (7) applicable costs and
expenses under the Distribution Plan (as described above) (8) taxes and trust
fees payable to governmental agencies; (9) the cost of share certificates; (10)
fees and expenses of the registration and qualification of the Fund and its
shares with the SEC or under state or other securities laws; (11) expenses of
preparing, printing and mailing prospectuses, SAIs, notices, reports and proxy
materials to shareholders of the Fund; (12) expenses of shareholders' and
Trustees' meetings; (13) charges and expenses of legal counsel for the Fund and
for the Independent Trustees on matters relating to the Fund; (14) charges and
expenses of filing annual and other reports with the SEC and other authorities;
and (15) all extraordinary charges and expenses of the Fund. For information on
advisory fees paid by the Fund, see "Expenses" in Part 1 of this SAI.

The Advisory Agreement continues in effect for two years from its
effective date and, thereafter, from year to year only if approved at least
annually by the Board of Trustees of the Trust or by a vote of a majority of the
Fund's outstanding shares. In either case, the terms of the Advisory Agreement
and continuance thereof must be approved by the vote of a majority of the
Independent Trustees cast in person at a meeting called for the purpose of
voting on such approval. The Advisory Agreement may be terminated, without
penalty, on 60 days' written notice by the Trust's Board of Trustees or by a
vote of a majority of outstanding shares. The Advisory Agreement will terminate
automatically upon its "assignment" as that term is defined in the 1940 Act.

Managers (Masters only)

Masters' investment program is based upon the investment advisor's multi-manager
concept. The investment advisor allocates the Fund's portfolio assets on an
equal basis among a number of investment management organizations - currently
four in number - each of which employs a different investment style, and
periodically rebalances the Fund's portfolio among the Managers so as to
maintain an approximate equal allocation of the portfolio among them throughout
all market cycles. Each Manager provides these services under a Portfolio
Management Agreement. Each Manager has discretion, subject to oversight by the
Trustees and the investment advisor, to purchase and sell portfolio assets
consistent with the Fund's investment objectives, policies and restrictions and
specific investment strategies developed by the investment advisor. The Fund's
current Managers are Evergreen Asset Management Corp., MFS Institutional
Advisors, Inc. ("MFS"), OppenheimerFunds, Inc. ("Oppenheimer") and Putnam
Investment Management, Inc.
("Putnam").

The Trust and FUNB have filed an exemptive application with, and expect in the
near future to receive an order from, the SEC that will permit the investment
advisor to employ a "manager of managers" strategy in connection with its
management of the Fund. The exemptive order will permit the investment advisor,
subject to certain conditions, and without shareholder approval, to: (a) select
new Managers who are unaffiliated with the investment advisor with the approval
of the Trust's Board of Trustees; (b) change the material terms of the Portfolio
Management Agreements with the Managers; and (c) continue the employment of a
Manager after an event which would otherwise cause the automatic termination of
a Portfolio Management Agreement. Shareholders

would be notified of any Manager changes. Shareholders have the right to
terminate arrangements with a Manager by vote of a majority of the outstanding
shares of the Fund. The order also will permit the Fund to disclose the
Managers' fees only in the aggregate.

Transactions Among Advisory Affiliates

The Trust has adopted procedures pursuant to Rule 17a-7 of the 1940 Act
("Rule 17a-7 Procedures"). The Rule 17a-7 Procedures permit the Fund to buy or
sell securities from another investment company for which a subsidiary of First
Union Corporation is an investment advisor. The Rule 17a-7 Procedures also allow
the Fund to buy or sell securities from other advisory clients for whom a
subsidiary of First Union Corporation is an investment advisor. The Fund may
engage in such transaction if it is equitable to each participant and consistent
with each participant's investment objective.

MANAGEMENT OF THE TRUST

The Trust is supervised by a Board of Trustees that is responsible for
representing the interest of the shareholders. The Trustees meet periodically
throughout the year to oversee the Fund's activities, reviewing, among other
things, the Fund's performance and its contractual arrangements with various
service providers. Each Trustee is paid a fee for his or her services. See
"Expenses-Trustee Compensation" in Part 1 of this SAI.

The Trust has an Executive Committee which consists of the Chairman of the
Board, James Howell, and Messrs. Scofield and Salton, each of whom is an
Independent Trustee. The Executive Committee recommends Trustees to fill
vacancies, prepares the agenda for Board meetings and acts on routine matters
between scheduled Board meetings.

Set forth below are the Trustees and officers of the Trust and their
principal occupations and affiliations over the last five years. Unless
otherwise indicated, the address for each Trustee and officer is 200 Berkeley
Street, Boston, Massachusetts 02116. Each Trustee is also a Trustee of each of
the other Trusts in the Evergreen Fund complex, other than Evergreen Variable
Trust of which Messrs. Howell, Salton and Scofield are the only Trustees.

Principal Occupations
Name Position with Trust for Last Five Years
Laurence B. Ashkin Trustee
(DOB: 2/2/28) Real estate developer and
construction consultant; and
President of Centrum
Equities and Centrum
Properties, Inc.

Charles A. Austin III Trustee Investment Counselor to
DOB: (10/23/34) Appleton Partners, Inc.;former
Director, Executive Vice
President and Treasurer,
State Street Research &
Management Company (investment
advice); Director, The
Andover Companies (Insurance);
and Trustee, Arthritis
Foundation of New England

K. Dun Gifford Trustee Trustee, Treasurer and
(DOB: 10/12/38) Chairman of the Finance
Committee, Cambridge College;
Chairman Emeritus and Director,
American Institute of Food and
Wine; Chairman and President,
Oldways Preservation and
Exchange Trust (education);
former Chairman of the Board,
Director, and Executive Vice
President, The London
Harness Company; former
Managing Partner, Roscommon
Capital Corp.; former Chief
Executive Officer, Gifford
Gifts of Fine Foods; former
Chairman, Gifford, Drescher
& Associates (environmental
consulting)

James S. Howell Chairman of the Former Chairman of the
(DOB: 8/13/24) Board of Trustees Distrubution Foundation for
the Carolinas; and former Vice
President of Lance Inc.
(food manufacturing)

Leroy Keith, Jr. Trustee Chairman of the Board and
(DOB: 2/14/39) Chief Executive Officer,
Carson Products Company;
Director of Phoenix Total
Return Fund and Equifax,
Inc.; Trustee of Phoenix
Series Fund, Phoenix Multi-
Portfolio Fund, and The
Phoenix Big Edge Series Fund;
and former President,
Morehouse College.

Gerald M. McDonnell Trustee Sales Representative with
(DOB: 7/14/39) Nucor-Yamoto, Inc.
(steel producer).

Thomas L. McVerry Trustee Former Vice President and
(DOB: 8/2/39) Director of Rexham Corporation
(manufacturing); and former
Director of Carolina
Cooperative Federal Credit Union.

William Walt Pettit Trustee Partner in the law firm of
(DOB: 8/26/55) William Walt Pettit, P.A.

David M. Richardson Trustee Vice Chair and former Executive
(DOB: 9/14/41) Vice President, DHR International,
Inc. (executive recruitment);
former Senior Vice President,
Boyden International Inc.
(executive recruitment); and
Director, Commerce and Industry
Association of New Jersey,
411 International, Inc., and J&M
Cumming Paper Co.

Russell A.Salton, III MD Trustee Medical Director, U.S. Health Care/
(DOB: 6/2/47) Aetna Health Services; former
Managed Health Care Consultant;
and former President, Primary
Physician Care.

Michael S. Scofield Trustee Attorney, Law Offices of Michael
DOB: 2/20/43) S. Scofield.

Richard J. Shima Trustee Former Chairman, Environmental
(DOB: 8/11/39) Warranty, Inc. (insurance
agency); Executive Consultant,
Drake Beam Morin, Inc.
(executive outplacement);
Director of Connecticut
Natural Gas Corporation,
Hartford Hospital, Old State
House Association, Middlesex
Mutual Assurance Company,
and Enhance Financial Services,
Inc.; Chairman,Board of Trustees,
Hartford Graduate Center;
Trustee, Greater Hartford YMCA;
former Director, Vice Chairman
and Chief Investment Officer,The
Travelers Corporation; former
Trustee, Kingswood Oxford School
and former Managing Director
and Consultant, Russell Miller,
Inc.

William J. Tomko* President and Executive Vice President/
(DOB:8/30/58) Treasurer Operations, BISYS Fund Services.

Nimish S. Bhatt* Vice President and Vice President, Tax, BISYS
(DOB: 6/6/63) Assistant Treasurer Fund Services; former
Assistant Vice President,
EAMC/First Union Bank;
former Senior Tax
Consulting/Acting Manager,
Investment Companies Group,
PricewaterhouseCoopers LLP,
New York

Bryan Haft* Vice President Team Leader, Fund Administration
(DOB: 1/23/65) BISYS Fund Services.

Michael H. Koonce Secretary Senior Vice President and
(DOB: 4/20/60) Assistant General Counsel,
First Union Corporation;
former Senior Vice President
and General Counsel, Colonial
Management Associates, Inc.

*Address: BISYS, 3435 Stelzer Road, Columbus, Ohio 43219-8001

CORPORATE AND MUNICIPAL BOND RATINGS

The Fund relies on ratings provided by independent rating services to help
determine the credit quality of bonds and other obligations the Fund intends to
purchase or already owns. A rating is an opinion of an issuer's ability to pay
interest and/or principal when due. Ratings reflect an issuer's overall
financial strength and whether it can meet its financial commitments under
various economic conditions.

If a security held by the Fund loses its rating or has its rating reduced after
the Fund has purchased it, the Fund is not required to sell or otherwise dispose
of the security, but may consider doing so.

The principal rating services, commonly used by the Fund and investors
generally, are S&P and Moody's. The Fund may also rely on ratings provided by
Fitch. Rating systems are similar among the different services. As an example,
the chart below compares basic ratings for long-term bonds. The "Credit Quality"
terms in the chart are for quick reference only. Following the chart are the
specific definitions each service provides for its ratings.

COMPARISON OF LONG-TERM BOND RATINGS

MOODY'S S&P FITCH Credit Quality
Aaa Aaa Aaa Excellent Quality (lowest risk)
Aa AA AA Almost Excellent Quality (very low risk)
A A A Good Quality (low risk)
Baa BBB BBB Satisfactory Quality (some risk)
Ba BB BB Questionable Quality (definite risk)
B B B Low Quality (high risk)
Caa/Ca/C CCC/CC/C CCC/CC/C In or Near Default
D DDD/DD/D In Default

CORPORATE BONDS

LONG-TERM RATINGS

Moody's Corporate Long-Term 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
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

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

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

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

Ba Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

B Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

C Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range raking and the modifier 3 indicates that the company ranks in the
lower end of its generic rating category.

S&P Corporate Long-Term Bond Ratings

AAA An obligation rated AAA has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong.

AA An obligation rated AA differs from the highest-rated obligations only in
small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.

A An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

BBB An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.

BB, B, CCC, CC and C: As described below, obligations rated BB, B, CCC, CC, and
C are regarded as having significant speculative characteristics. BB indicates
the least degree of speculation and C the highest. While such obligations will
likely have some quality and protective characteristics, these may be outweighed
by large uncertainties or major exposures to adverse conditions.

BB An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions, which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.

B An obligation rated B is more vulnerable to nonpayment than obligations rated
BB, but the obligor currently has the capacity to meet its financial commitment
on the obligation. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet it financial
commitment on the obligation.

CCC An obligation rated CCC is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.

CC An obligation rated CC is currently highly vulnerable to nonpayment.

C The C rating may be used to cover a situation where a bankruptcy petition has
been filed or similar action has been taken, but payments on this obligation are
being continued.

D The D rating, unlike other ratings, is not prospective; rather, it is used
only where a default has actually occurred--and not where a default is only
expected. S&P changes ratings to D either:

On the day an interest and/or principal payment is due and is not paid. An
exception is made if there is a grace period and S&P believes that a payment
will be made, in which case the rating can be maintained; or upon voluntary
bankruptcy filing or similar action. An exception is made if S&P expects that
debt service payments will continue to be made on a specific issue. In the
absence of a payment default or bankruptcy filing, a technical default (i.e.,
covenant violation) is not sufficient for assigning a D rating.

Plus (+) or minus (-) The ratings from AA to CCC may be modified by the addition
of a plus or minus sign to show relative standing within the major rating
categories.

Fitch Corporate Long-Term Bond Ratings

Investment Grade

AAA Highest credit quality. AAA ratings denote the lowest expectation of credit
risk. They are assigned only in case of exceptionally strong capacity for timely
payment of financial commitments. This capacity is highly unlikely to be
adversely affected by foreseeable events.

AA Very high credit quality. AA ratings denote a very low expectation of credit
risk. They indicate very strong capacity for timely payment of financial
commitments. This capacity is not significantly vulnerable to foreseeable
events.

A High credit quality. A ratings denote a lower expectation of credit risk. The
capacity for timely payment of financial commitments is considered strong. This
capacity may, nevertheless, be more vulnerable to changes in circumstances or in
economic conditions than is the case for higher ratings.

BBB Good credit quality. BBB ratings indicate that there is currently a low
expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity. This is the lowest
investment-grade category.

Speculative Grade

BB Speculative. BB ratings indicate that there is a possibility of credit risk
developing, particularly as the result of adverse economic change over time;
however, business or financial alternatives may be available to allow financial
commitments to be met. Securities rated in this category are not investment
grade.

B Highly speculative. B ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met; however, capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.

CCC, CC, C High default risk. Default is a real possibility. Capacity for
meeting financial commitment is solely reliant upon sustained, favorable
business or economic developments. A CC rating indicates that default of some
kind appears probable. C ratings signal imminent default.

DDD, DD, D Default. Securities are not meeting current obligations and are
extremely speculative. DDD designates the highest potential for recovery of
amounts outstanding on any securities involved. For U.S. corporates, for
example, DD indicates expected recovery of 50%-90% of such outstandings, and D
the lowest recovery potential, i.e. below 50%.

+ or - may be appended to a rating to denote relative status within major rating
categories. Such suffixes are not added to the AAA rating category or to
categories below CCC.

CORPORATE SHORT-TERM RATINGS

Moody's Corporate Short-Term Issuer Ratings

Prime-1 Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics.

- -- Leading market positions in well-established industries.
- -- High rates of return on funds employed.
- -- Conservative capitalization structure with moderate reliance on debt and
ample asset protection. -- Broad margins in earnings coverage of fixed financial
changes and high internal cash generation. -- Well-established access to a range
of financial markets and assured sources of alternate liquidity.

Prime-2 Issuers rated Prime-2 (or supporting institutions) have a strong ability
for repayment of senior short-term debt obligations. This will normally be
evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

Prime-3 Issuers rated Prime-3 (or supporting institutions) have an acceptable
ability for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the level of debt protection
measurements and may require relatively high financial leverage. Adequate
alternate liquidity is maintained.

Not Prime Issuers rated Not Prime do not fall within any of the Prime rating
categories.

S&P Corporate Short-Term Obligation Ratings

A-1 A short-term obligation rated A-1 is rated in the highest category by S&P.
The obligor's capacity to meet its financial commitment on the obligation is
strong. Within this category certain obligations are designated with a plus sign
(+). This indicates that the obligor's capacity to meet its financial commitment
on these obligations is extremely strong.

A-2 A short-term obligation rated A-2 is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.

A-3 A short-term obligation rated A-3 exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.

B A short-term obligation rated B is regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.

C A short-term obligation rated C is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.

D The D rating, unlike other ratings, is not prospective; rather, it is used
only where a default has actually occurred--and not where a default is only
expected. S&P changes ratings to D either:

On the day an interest and/or principal payment is due and is not paid. An
exception is made if there is a grace period and S&P believes that a payment
will be made, in which case the rating can be maintained; or upon voluntary
bankruptcy filing or similar action, An exception is made if S&P expects that
debt service payments will continue to be made on a specific issue. In the
absence of a payment default or bankruptcy filing, a technical default (i.e.,
covenant violation) is not sufficient for assigning a D rating.

Fitch Corporate Short-Term Obligation Ratings

F1 Highest credit quality. Indicates the strongest capacity for timely payment
of financial commitments; may have an added "+" to denote any exceptionally
strong credit feature. F2 Good credit quality. A satisfactory capacity for
timely payment of financial commitments, but the margin of safety is not as
great as in the case of the higher ratings.

F3 Fair credit quality. The capacity for timely payment of financial commitments
is adequate; however, near-term adverse changes could result in a reduction to
non-investment grade.

B Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.

C High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

D Default. Denotes actual or imminent payment default.

MUNICIPAL BONDS

LONG-TERM RATINGS

Moody's Municipal Long-Term Bond Ratings

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

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

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

Ba Bonds rated Ba are judged to have speculative elements; their future cannot
be considered as well-assured. Often the protection of interest and principal
payments may be very moderate, and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position characterizes bonds in
this class.

B Bonds rated B generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.

Caa Bonds rated Caa are of poor standing. Such issues may be in default or there
may be present elements of danger with respect to principal or interest.

Ca Bonds rated Ca represent obligations which are speculative in a high degree.
Such issues are often in default or have other marked shortcomings.

C Bonds rated C are the lowest rated class of bonds, and issues so rated can be
regarded as having extremely poor prospects of ever attaining any real
investment standing.

Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa to B. The modifier 1 indicates that the company ranks in
the higher end of its generic rating category; the modifier 2 indicates a
mid-range raking and the modifier 3 indicates that the company ranks in the
lower end of its generic rating category.

S&P Municipal Long-Term Bond Ratings

AAA An obligation rated AAA has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong.

AA An obligation rated AA differs from the highest-rated obligations only in
small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.

CC An obligation rated CC is currently highly vulnerable to nonpayment.

C The C rating may be used to cover a situation where a bankruptcy petition has
been filed or similar action has been taken, but payments on this obligation are
being continued.

D An obligation rated D is in payment default. The D rating category is used
when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating also will be used upon the
filing of a bankruptcy petition or the taking of a similar action if payments on
an obligation are jeopardized.

Plus (+) or minus (-) The ratings from AA to CCC may be modified by the addition
of a plus or minus sign to show relative standing within the major rating
categories.

Fitch Municipal Long-Term Bond Ratings

Investment Grade

Speculative Grade

CCC, CC, C High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A CC rating indicates that default of some
kind appears probable. C ratings signal imminent default.

DDD, DD, D Default. Securities are not meeting current obligations and are
extremely speculative. DDD designates the highest potential for recovery of
amounts outstanding on any securities involved. DD designates lower recovery
potential and D the lowest.

+ or - may be appended to a rating to denote relative status within major rating
categories. Such suffixes are not added to the AAA rating category or to
categories below CCC.

SHORT-TERM MUNICIPAL RATINGS

Moody's Municipal Short-Term Issuer Ratings

Not Prime Issuers rated Not Prime do not fall within any of the Prime rating
categories.

Moody's Municipal Short-Term Loan Ratings

MIG 1 This designation denotes best quality. There is strong protection by
established cash flows, superior liquidity support, or demonstrated broad-based
access to the market for refinancing.

MIG 2 This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.

MIG 3 This designation denotes favorable quality. Liquidity and cash-flow
protection may be narrow and market access for refinancing is likely to be less
well established.

SG This designation denotes speculative quality. Debt instruments in this
category may lack margins of protection.

S&P Commercial Paper Ratings

A-1 This designation indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation.

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

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

B Issues rated B are regarded as having only speculative capacity for timely
payment.

C This rating is assigned to short-term debt obligations with a doubtful
capacity for payment.

D Debt rated D is in payment default. The D rating category is used when
interest payments of principal payments are not made on the date due, even if
the applicable grace period has not expired, unless S&P believes such payments
will be made during such grace period.

S&P Municipal Short-Term Obligation Ratings

SP-1 Strong capacity to pay principal and interest. An issue determined to
possess a very strong capacity to pay debt service is given a plus (+)
designation.

SP-2 Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of the
notes.

SP-3 Speculative capacity to pay principal and interest.

Fitch Municipal Short-Term Obligation Ratings

F1 Highest credit quality. Indicates the strongest capacity for timely payment
of financial commitments; may have an added "+" to denote any exceptionally
strong credit feature.

F2 Good credit quality. A satisfactory capacity for timely payment of financial
commitments, but the margin of safety is not as great as in the case of the
higher ratings.

F3 Fair credit quality. The capacity for timely payment of financial commitments
is adequate; however, near-term adverse changes could result in a reduction to
non-investment grade.

B Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.

C High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

D Default. Denotes actual or imminent payment default.

ADDITIONAL INFORMATION

Except as otherwise stated in its prospectus or required by law, the
Fund reserves the right to change the terms of the offer stated in its
prospectus without shareholder approval, including the right to impose or change
fees for services provided.

No dealer, salesman or other person is authorized to give any
information or to make any representation not contained in the Fund's
prospectus, SAI or in supplemental sales literature issued by the Fund or the
Distributor, and no person is entitled to rely on any information or
representation not contained therein.

The Fund's prospectus and SAI omit certain information contained in the
Trust's registration statement, which you may obtain for a fee from the SEC in
Washington, D.C.

EVERGREEN SELECT MONEY MARKET TRUST

PART C

OTHER INFORMATION

Item 23 Exhibits

<TABLE>
<CAPTION>
Exhibit
Number Description Location
- ------- ----------- -----------
<S> <C> <C>
(a) Declaration of Trust Incorporated by reference to
Registrant's Pre-Effective Amendment No. 1
Filed on October 8, 1997

(b) By-laws Incorporated by reference to
Registrant's Pre-Effective Amendment No. 1
Filed on October 8, 1997

(c) Provisions of instruments defining the rights Included as part of Exhibits 1 and 2 of
of holders of the securities being registered Registrant's Pre-Effective Amendment No. 1
are contained in the Declaration of Trust filed on November 17, 1997
Articles II, III.(6)(c), VI.(3), IV.(8), V, VI,
VII, VIII and By-laws Articles II, III and VIII

(d) Investment Advisory and Management Incorporated by reference to
Agreement between the Registrant and First Registrant's Post-Effective Amendment No. 2
Union National Bank Filed on May 29, 1998

(e) Principal Underwriting Agreement between the Incorporated by reference to
Registrant and Evergreen Distributor, Inc. Registrant's Post-Effective Amendment No. 2
Filed on May 29, 1998

(f) Deferred Compensation Plan Incorporated by reference to
Registrant's Pre-Effective Amendment No. 1
Filed on November 20, 1997

(g) Custodian Agreement between the Registrant Incorporated by reference to
and State Street Bank and Trust Company Registrant's Post-Effective Amendment No. 2
Filed on May 29, 1998

(h)(1) Administrative Services Agreement between Evergreen Incorporated by reference to
Investment Services, Inc. and the Registrant Registrant's Post-Effective Amendment No. 2
Filed on May 29, 1998

(h)(2) Transfer Agent Agreement between the Incorporated by reference to
Registrant and Evergreen Service Company Registrant's Post-Effective Amendment No. 2
Filed on May 29, 1998

(i) Opinion and Consent of Sullivan & Worcester LLP Incorporated by reference to
Registrant's Post-Effective Amendment No. 1
Filed on December 12, 1997

(j) Consent of PricewaterhouseCoopers LLP To be filed as part of Registrant's Post-
Effective Amendment No. 5, to be filed
on or about June 28, 1999

(k) Not applicable

(l) Not applicable

(m) 12b-1 Distribution Plan for Incorporated by reference to
Institutional Service Shares Registrant's Post-Effective Amendment No. 2
Filed on May 29, 1998

(n) Financial Data Schedules To be filed as part of Registrant's Post-
Effective Amendment No. 5, to be filed
on or about June 28, 1999

(o) Multiple Class Plan Contained herein

</TABLE>

Item 24. Persons Controlled by or Under Common Control with Registrant.

None

Item 25. Indemnification.

Registrant has obtained from a major insurance carrier a trustees and
officers liability policy covering certain types of errors and omissions.
Provisions for the indemnification of the Registrant's Trustees and officers are
contained the Registrant's Declaration of Trust.

Provisions for the indemnification of Registrant's Investment Advisor are
contained in their Investment Advisory and Management Agreement.

Provisions for the indemnification of Evergreen Distributor, Inc., the
Registrant's principal underwriter, are contained in the Principal Underwriting
Agreement between Evergreen Distributor, Inc. and the Registrant.

Provisions for the indemnification of Evergreen Service Company, the
Registrant's transfer agent, are contained in the Master Transfer and Record
keeping Agreement between Evergreen Service Company and the Registrant.

Provision for the indemnification of State Street Bank & Trust Co., the
Registrant's custodian, are contained in the Custodian Agreement between State
Street Bank & Trust Co. and the Registrant.

Item 26. Business or Other Connections of Investment Adviser.

The Directors and principal executive officers of First Union National Bank
are:

Edward E. Crutchfield, Jr. Chairman and Chief Executive Officer,
First Union Corporation; Chief Executive
Officer and Chairman, First Union National
Bank

Anthony Terracciano President, First Union Corporation;
President, First Union National Bank

John R. Georgius Vice Chairman, First Union Corporation; Vice
Chairman, First Union National Bank

Marion A. Cowell, Jr. Executive Vice President, Secretary &
General Counsel, First Union Corporation;
Secretary and Executive Vice President,
First Union National Bank

Robert T. Atwood Executive Vice President and Chief Financial
Officer, First Union Corporation; Chief
Financial Officer and Executive Vice
President, First Union National Bank

All of the above persons are located at the following address: First Union
National Bank, One First Union Center, Charlotte, NC 28288.

Item 27. Principal Underwriters.

Evergreen Distributor, Inc. acts as principal underwriter for each
registered investment company or series thereof that is a part of the Evergreen
"fund complex" as such term is defined in Item 22(a) of Schedule 14A
under the Securities Exchange Act of 1934.

The Directors and principal executive officers of Evergreen Distributor,
Inc. are:

Lynn C. Mangum Director, Chairman and Chief Executive
Officer

Dennis Sheehan Director, Chief Financial Officer

J. David Huber President

Kevin J. Dell Vice President, General Counsel and Secretary

All of the above persons are located at the following address: Evergreen
Distributor, Inc., 90 Park Avenue, New York, New York 10016. The Registrant has
not paid, directly or indirectly, any commissions or other compensation to the
principal underwriter in the last fiscal year.

Item 28. Location of Accounts and Records.

All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:

Evergreen Investment Services, Inc., Evergreen Service Company and
Evergreen Investment Management Company (formerly known as Keystone Investment
Management Company), all located at 200 Berkeley Street, Boston, Massachusetts
02110

First Union National Bank, One First Union Center, 301 S. College Street,
Charlotte, North Carolina 28288

Evergreen Asset Management Corp., 2500 Westchester Avenue, Purchase, New
York 10577

Iron Mountain, 3431 Sharp Slot Road, Swansea, Massachusetts 02777

State Street Bank and Trust Company, 2 Heritage Drive, North Quincy,
Massachusetts 02171

Item 29. Management Services.

Not Applicable

Item 30. Undertakings.

The Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual
report to shareholders, upon request and without charge.

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Columbus, and State of Ohio, on the 28th day of
April, 1999.

EVERGREEN SELECT MONEY MARKET TRUST

By: /s/ William J. Tomko
-----------------------------
Name: William J. Tomko
Title: President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 28th day of April, 1999.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/William J. Tomko /s/ Laurence B. Ashkin /s/ Charles A. Austin, III
- ------------------------- ----------------------------- --------------------------------
William J. Tomko Laurence B. Ashkin* Charles A. Austin III*
President and Treasurer (Principal Trustee Trustee
Financial and Accounting Officer)

/s/ K. Dun Gifford /s/ James S. Howell /s/ William Walt Pettit
- ---------------------------- ---------------------------- --------------------------------
K. Dun Gifford* James S. Howell* William Walt Pettit*
Trustee Trustee Trustee

/s/Gerald M. McDonnell /s/ Thomas L. McVerry /s/ Michael S. Scofield
- ------------------------------- ----------------------------- --------------------------------
Gerald M. McDonell* Thomas L. McVerry* Michael S. Scofield*
Trustee Chairman of the Board Trustee
and Trustee

/s/ David M. Richardson /s/ Russell A. Salton, III MD /s/ Leroy Keith, Jr.
- ------------------------------ ------------------------------- --------------------------------
David M. Richardson* Russell A. Salton, III MD* Leroy Keith, Jr.*
Trustee Trustee Trustee

/s/ Richard J. Shima
- ------------------------------
Richard J. Shima*
Trustee
</TABLE>

*By: /s/ Catherine E. Foley
- -------------------------------
Catherine E. Foley
Attorney-in-Fact

*Catherine E. Foley, by signing her name hereto, does hereby sign this
document on behalf of each of the above-named individuals pursuant to powers of
attorney duly executed by such persons and incorporated by reference to Exhibit
19 to the Registrant's Post-Effective Amendment No. 2 filed on May 29, 1998.

<PAGE>

INDEX TO EXHIBITS

Exhibit
Number Exhibit
- -------------- -------
(o) Multiple Class Plan

MULTIPLE CLASS PLAN
FOR THE
EVERGREEN FUNDS
As of March 12, 1998

Each Fund in the Evergreen group of mutual funds currently offers one or more of
the following nine classes of shares with the following class provisions and
current offering and exchange characteristics. Additional classes of shares
(such classes being shares having characteristics referred to in Rule 18f-3
under the Investment Company Act of 1940, as amended (the "1940 Act")), when
created, may have characteristics that differ from those described.

I. CLASSES

A. Class A Shares

1. Class A Shares have a distribution plan adopted pursuant to
Rule 12b-1 under the 1940 Act (a "12b-1 Distribution Plan") and/or a shareholder
services plan. The plans provide for annual payments of distribution and/or
shareholder service fees that are based on a percentage of average daily net
assets of Class A shares, as described in a Fund's current prospectus.

2. Class A Shares are offered with a front-end sales load,
except that purchases of Class A Shares made under certain circumstances are not
subject to the front-end load or may be subject to a contingent deferred sales
charge ("CDSC"), as described in a Fund's current prospectus.

3. Shareholders may exchange Class A Shares of a Fund for Class
A Shares of any other fund named in a Fund's prospectus.

B. Class B Shares

1. Class B Shares have adopted a 12b-1 Distribution Plan and/or
a shareholder services plan. The plans provide for annual payments of
distribution and/or shareholder services fees that are based on a percentage of
average daily net assets of Class B shares, as described in a Fund's current
prospectus.

2. Class B Shares are offered at net asset value without a
front-end sales load, but may be subject to a CDSC as described in a Fund's
current prospectus.

3. Class B Shares automatically convert to Class A Shares
without a sales load or exchange fee after designated periods.

4. Shareholders may exchange Class B Shares of a Fund for Class
B Shares of any other fund described in a Fund's prospectus.

C. Class C Shares

1. Class C Shares have adopted a 12b-1 Distribution Plan and/or
a shareholder services plan. The plans provide for annual payments of
distribution and/or shareholder services fees that are based on a percentage of
average daily net assets of Class C shares, as described in a Fund's current
prospectus.

2. Class C Shares are offered at net asset value without a
front-end sales load, but may be subject to a CDSC as described in a Fund's
current prospectus.

3. Shareholders may exchange Class C Shares of a Fund for Class
C Shares of any other fund named in a Fund's prospectus.

D. Class J Shares

1. Class J Shares have adopted a 12b-1 Distribution Plan and/or
a shareholder services plan. The plans provide for annual payments of
distribution and/or shareholder service fees that are based on a percentage of
average daily net assets of Class J shares, as described in a Fund's current
prospectus.

2. Class J Shares are offered with a front-end sales load,
except that purchases of Class J Shares made under certain circumstances are not
subject to the front-end load or may be subject to a CDSC, as described in a
Fund's current prospectus.

3. Shareholders may exchange Class J Shares of a Fund for Class
J Shares of any other fund named in a Fund's prospectus.

E. Class Y Shares

1. Class Y Shares have no distribution or shareholder services
plans.

2. Class Y Shares are offered at net asset value without a
front-end sales load or CDSC.

3. Shareholders may exchange Class Y Shares of a Fund for Class
Y Shares of any other fund described in a Fund's prospectus.

F. Institutional Service Shares

1. Institutional Service Shares have adopted a 12b-1
Distribution Plan and/or shareholder services plan. .The plans provide for
annual payments of distribution and/or shareholder services fees that are based
on a percentage of average daily net assets of Institutional Service Shares, as
described in a Fund's current prospectus.

2. Institutional Service Shares are offered at net asset value
without a front-end sales load or CDSC.

3. Shareholders may exchange Institutional Service Shares
of a Fund for Institutional Service Shares of any other fund named in a Fund's
prospectus, to the extent they are offered by a Fund.

G. Institutional Shares

1. Institutional Shares have no distribution or shareholder
services plans.

2. Institutional Shares are offered at net asset value without a
front-end sales load or CDSC.

3. Shareholders may exchange Institutional Shares of a Fund for
Institutional Shares of any other fund described in a Fund's prospectus, to the
extent they are offered by a Fund.

H. Charitable Shares

1. Charitable Shares have no distribution or shareholder
services plans.

2. Charitable Shares are offered at net asset value without a
front-end sales load or CDSC.

3. Shareholders may exchange Charitable Shares of a Fund for
Charitable Shares of any other fund described in a Fund's prospectus, to the
extent they are offered by a Fund.

II. CLASS EXPENSES

Each class bears the expenses of its 12b-1 Distribution Plan and/or shareholder
services plan. Class J Shares shall also bear that portion of the Transfer
Agency fees and other expenses allowed by Rule 18f-3 that are attributable to
them due to distribution outside of the United States. There currently are no
other class specific expenses.

III. EXPENSE ALLOCATION METHOD

All income, realized and unrealized capital gains and losses and expenses not
assigned to a class will be allocated to each class based on the relative net
asset value of each class.

IV. VOTING RIGHTS

A. Each class will have exclusive voting rights on any matter
submitted to its shareholders that relates solely to its class
arrangement.

B. Each class will have separate voting rights on any matter
submitted to shareholders where the interests of one class
differ from the interests of any other class.

C. In all other respects, each class has the same rights and
obligations as each other class.

V. EXPENSE WAIVERS OR REIMBURSEMENTS

Any expense waivers or reimbursements will be in compliance with Rule
18f-3 issued under the 1940 Act.