NORTHSTAR EQUITY TRUST, N-1A, 1998-06-15

NORTHSTAR EQUITY TRUST
N-1A, 1998-06-15

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Securities and Exchange Commission on June 12, 1998

Registration Nos. _____________________

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form N1-A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. __ |_|
Post-Effective Amendment No. __ |_|

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. No. __ |_|

NORTHSTAR EQUITY TRUST
--------------------------------------------------
(Exact name of Registrant as specified in charter)

300 First Stamford Place, Stamford, CT 06902
--------------------------------------------
(Address of Principal Executive Offices)

(203)602-7950
-------------------------------
(Registrant's telephone number)

Mark L. Lipson
c/o Northstar Investment Management Corporation
300 First Stamford Place, Stamford, CT 06902
--------------------------------------------
(Name and address for agent for service)

Copies of all correspondence to:
Jeffrey L. Steele, Esq.
Dechert, Price & Rhoads
1775 Eye Street, N.W.
Washington, D.C. 20006-2401

Approximate Date of Proposed Public Offering: As soon as practicable
after this Registration Statement becomes effective.

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

<PAGE>

CROSS REFERENCE SHEET
PURSUANT TO RULE 404(a)
UNDER THE SECURITIES ACT OF 1933

The enclosed prospectus and Statement of Additional Information ("SAI") for the
Northstar Mid-Cap Growth Fund Class A, B and C shares relate to such shares and
the prospectus and SAI for the Northstar Mid-Cap Growth Fund Class I relate to
Institutional Class shares.

PART A

FORM N-1A PART A ITEM PROSPECTUS CAPTION
1. Cover Page Cover Page

2. Synopsis Cover Page; Objective; Investment
Strategy; Holdings; Risks; The
Risks of Investing in Mutual
Funds; Investment Practices; The
Business of Mutual Funds; Where
to go for More Information

3. Condensed Financial Information N/A

4. General Description of Registrant Cover Page; Objective; Investment
Strategy; Holdings; Risks; The
Risks of Investing in Mutual
Funds; Investment Practices; The
Business of Mutual Funds; Where
to go for More Information

5. Management of the Fund Meet the Portfolio Managers; The
Business of Mutual Funds

6. Capital Stock and Other Securities Buying, Selling and Exchanging;
Choosing a Share Class; Opening a
Northstar Account; Mutual Fund
Earnings and your Taxes; Where to
go for More Information

7. Purchases of Securities Being Offered Buying, Selling and Exchanging;
Choosing a Share Class; Opening a
Northstar Account; How Dealers
are Compensated

8. Redemption or Repurchase Buying, Selling and Exchanging

9. Legal Proceedings N/A
<PAGE>

CROSS REFERENCE SHEET
PART B

FORM N-1A PART B ITEM STATEMENT OF ADDITIONAL
INFORMATION CAPTION

10. Cover Page and Table of Contents Cover Page; Table of Contents

11. General Information & History Cover Page; Other Information

12. Investment Objectives and Policies Cover Page; Investment
Restrictions; Investment
Techniques

13. Management of the Fund Trustees and Officers

14. Control Persons and Principal
Holders of Securities N/A

15. Investment Advisory and Other Services of Northstar and the
Services Administrator

16. Brokerage Allocation and Other Portfolio Transactions and
Practices Brokerage Allocation

17. Capital Stock and Other Purchases and Redemptions
Securities

18. Purchases, Redemptions and Net Asset Value; Purchases and
Pricing Redemptions

19. Tax Status Dividends, Distribution and Taxes

20. Underwriter Underwriter and Distribution
Services

21. Calculation of Performance Data Performance Information

22. Financial Statements Financial Statements

PART C

The information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C in the Registration Statement.
<PAGE>

NORTHSTAR
MID-CAP
GROWTH FUND

PROSPECTUS
September 1, 1998

[Star Graphic]

This prospectus contains important information about investing in the Northstar
Mid-Cap Growth Fund. Please read the prospectus carefully before you invest and
keep it for future reference. Your investment: is not a bank deposit, is not
insured or guaranteed by the FDIC, the Federal Reserve Board or any other
government agency, is affected by market fluctuations -- there is no guarantee
that the fund will achieve its objective. Like all mutual funds, these
securities have not been approved or disapproved by the Securities and Exchange
Commission or any state securities commission nor has the Securities and
Exchange Commission or any state securities commission passed upon the accuracy
or adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
<PAGE>

WHAT'S
INSIDE
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
[LOGO]OBJECTIVE These pages contain a Northstar Mid-Cap Growth Fund 2
description of the fund, including
its objective, investment strategy, Meet the portfolio managers 3
[LOGO]INVESTMENT types of holdings, risks and
STRATEGY portfolio managers. Your guide to buying, selling
and exchanging shares of
Northstar Funds 6

[LOGO]HOLDINGS You'll also find: Mutual fund earnings and
your taxes __

[LOGO]RISKS What you pay to invest. A list
of the fees and expenses you pay - The business of mutual funds __
both directly and indirectly - when
you invest in the fund. The risks of investing in
[LOGO]WHAT mutual funds __
YOU PAY
TO INVEST Where to go for more
information __
</TABLE>
<PAGE>

NORTHSTAR Registrant
MID-CAP GROWTH
FUND Northstar Equity Trust
Portfolio managers

Mary Lisanti,
Jeffrey Bernstein
- --------------------------------------------------------------------------------

OBJECTIVE

This fund's objective is long-term capital appreciation by investing in a
diversified portfolio of equity securities.

INVESTMENT
STRATEGY

The fund invests primarily in mid-sized companies that the portfolio managers
feel have above average prospects for growth. The portfolio managers select
growth companies that are involved in new technologies, new products, foreign
markets and special developments, such as research discoveries, acquisitions,
recapitalizations, liquidations or management changes. The fund also invests in
companies that the portfolio managers determine to be priced below their
long-term value.

HOLDINGS

Under normal market conditions, the fund invests at least 65% of its total
assets in companies with a market capitalization of between $500 million to $2
billion. It may invest up to 25% of its net assets in foreign issuers, but only
10% may be invested in securities that are not listed on a U.S. securities
exchange. The fund may invest up to 20% of its net assets in debt obligations,
including intermediate- to long-term corporate or U.S. Government Securities. It
may also invest in other, higher-risk securities and engage in other investment
practices. These are described in the section beginning on page ___.

RISKS

Because it invests in equities, the fund is affected by changes in the stock
market. This fund is also subject to the risks associated with investing in
mid-sized companies, emerging growth companies, foreign securities and
lower-rated bonds that are speculative in nature. Please refer to the section
beginning on page __, The risks of investing in mutual funds.

FEES YOU PAY DIRECTLY
CLASS A CLASS B CLASS C
------- ------- -------
Maximum sales charge on your
initial investment (as a % of
offering price) % 4.75 none none
Maximum deferred sales charge % none(1) 5.00(2) 1.00(2)

OPERATING EXPENSES PAID EACH YEAR BY THE FUND
(as a % of average net assets)
CLASS A CLASS B CLASS C
------- ------- -------
Management fee % 1.00 1.00 1.00
12b-1 fee(3) % 0.30 1.00 1.00
Other expenses % 0.50 0.50 0.50
TOTAL FUND OPERATING EXPENSES % 1.80 2.50 2.50

EXAMPLE

Here's an example of what you would pay in expenses if you invested $1,000,
reinvested all your dividends, the fund earned an average annual return of 5%,
and annual operating expenses remained at the current level. Keep in mind that
this is only an example -- actual expenses and performance may vary.

YEAR 1 YEAR 3
------ ------
Class A
with redemption $65 101

Class B
with redemption $75 108
without redemption $25 78

Class C
with redemption $35 78
without redemption $25 78

(1) Except for purchases of $1 million or more, when you sell any of the
shares within 18 months of when you bought them. Please see page ___ for
details.
(2) This charge decreases over time. Please see page ___ for details.
(3) Because of the 12b-1 fee, long-term shareholders may pay more than the
maximum permitted front-end sales charge.

2 Northstar Mid-Cap Growth Fund
<PAGE>

MEET THE
PORTFOLIO
MANAGERS
- --------------------------------------------------------------------------------

Jeffrey Bernstein

Jeffrey Bernstein has been the co-manager of the Northstar Mid-Cap Growth Fund
since inception. He joined Northstar in May 1998.

Mr. Bernstein has over 10 years of experience in small and mid-cap investments.
Before joining Northstar, Ms. Bernstein was a Portfolio Manager at Strong
Capital Management where he co-managed the Strong Mid Cap Fund. From 1993 to
1995, Mr. Bernstein was an Assistant Portfolio Manager at Bankers Trust Corp.
Prior to Bankers Trust, Mr. Berstein was an Analyst for Cowen & Co.

Mary Lisanti

Mary Lisanti has been the co-manager of the Northstar Mid-Cap Growth Fund since
inception and manager of the Northstar Special Fund since July 1998. She joined
Northstar in May 1998.

Ms. Lisanti has over 20 years of experience in small and mid-cap investments.
Before joining Northstar, Ms. Lisanti was a Portfolio Manager at Strong Capital
Management where she managed the Strong Small Cap Fund and co-managed the Strong
Mid Cap Fund. From 1993 to 1996, Ms. Lisanti was a Managing Director and Head of
Small and Mid-Capitalization Equity Strategies at Bankers Trust Corp. where she
managed the BT Small Cap Fund and the BT Capital Appreciation Fund. Prior to
Bankers Trust, Ms. Lisanti was a Portfolio Manager with the Evergreen Funds. She
began her career as an analyst specializing in emerging growth stocks with
Donaldson, Lufkin & Jenrette and Shearson Lehman Hutton, was ranked number one
Institutional Investor emerging growth stock analyst in 1989 and was named to
that survey two other times.

Ms. Lisanti earned her BA with honors from Princeton University. She is a
Chartered Financial Analyst, member of the New York Society of Security Analysts
and the Financial Analyst Federation.

[ICON] If you have any questions, please call 1-800-595-7827.

3
<PAGE>

MEET THE
PORTFOLIO
MANAGERS
- --------------------------------------------------------------------------------

PERFORMANCE
PROFILE:

Mary Lisanti
Jeffrey Bernstein

These figures demonstrate the historical track record of Mary Lisanti and
Jeffrey Bernstein. They do not indicate how the Northstar Mid-Cap Growth Fund
will perform in the future.

Before joining Northstar in May 1998, Ms. Lisanti and Mr. Bernstein co-managed
the Strong Mid Cap Fund and had full discretionary authority for the selection
of the fund's investments.

The Strong Mid Cap Fund had investment objectives, policies, techniques and
strategies substantially similar to the Northstar Mid-Cap Growth Fund, which Ms.
Lisanti and Mr. Bernstein now manage.

The charts below show the average annual returns and the cumulative total return
during the period when Ms. Lisanti and Mr. Bernstein managed the fund.

These figures reflect changes in the share prices and reinvestment of dividends
and distributions, and are after deduction of all fees and expenses. Included
for comparison are performance figures of the S&P 400 MidCap Index, an unmanaged
index of 400 widely held common stocks of mid-sized domestic companies. It has
been adjusted to reflect reinvestment of dividends. The results presented below
may not equate with the return experienced by any shareholder as a result of
timing of investments and the effects of taxes on any shareholder.

Strong
Mid Cap S&P 400
Fund (%) Index (%)
One year, ended
May 22, 1998 34.84% 35.17%

Cumulative total
return January 1997 28.15% 44.45%
to May 1998

[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]

Mid Cap
Fund Index
12/31/96 0.00% 0.00%
Jan-97 5.00% 3.64%
Feb-97 -1.10% 2.65%
Mar-97 -10.37% -1.47%
Apr-97 -11.77% 0.97%
May-97 -1.87% 9.65%
Jun-97 1.04% 12.98%
Jul-97 11.24% 24.03%
Aug-97 10.24% 23.76%
Sep-97 21.15% 31.13%
Oct-97 14.24% 25.30%
Nov-97 12.04% 27.03%
Dec-97 13.84% 32.22%
Jan-98 14.55% 29.58%
Feb-98 26.05% 40.16%
Mar-98 31.35% 46.75%
Apr-98 34.25% 49.29%
5/23/98 28.15% 43.41%

4
<PAGE>

MEET THE
PORTFOLIO
MANAGERS
- --------------------------------------------------------------------------------

PERFORMANCE
PROFILE:

Mary Lisanti

These figures demonstrate the historical track record of Mary Lisanti. They do
not indicate how the Northstar Mid-Cap Growth Fund will perform in the future.

From March 9, 1993 through July 31, 1996, Ms. Lisanti managed the BT Capital
Appreciation Fund and had full discretionary authority for the selection of the
fund's investments.

The BT Capital Appreciation Fund had investment objectives, policies, techniques
and strategies substantially similar to the Northstar Mid-Cap Growth Fund, which
Ms. Lisanti now manages.

The charts below show the average annual returns and the cumulative total return
during the period when Ms. Lisanti managed the fund.

These figures reflect changes in the share prices and reinvestment of dividends
and distributions, and are after deduction of all fees and expenses. Included
for comparison are performance figures of the S&P 400 MidCap Index. It has been
adjusted to reflect reinvestment of dividends. The results presented below may
not equate with the return experienced by any shareholder as a result of timing
of investments and the effects of taxes on any shareholder.

BT Capital
Appreciation S&P 400
Fund (%) INDEX (%)

One year, ended
July 31, 1996 2.96% 7.76%

Three years, ended
July 31, 1996 15.42% 11.57%

Cumulative total
return March 1993
to August 1996 64.22% 43.46%

[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]

Capital
Appreciation
Fund Index

03/09/93 0.00% 0.00%
03/31/93 0.10% 0.85%
Apr-93 -2.30% -1.93%
May-93 1.80% 2.32%
Jun-93 5.30% 3.18%
Jul-93 6.80% 2.83%
Aug-93 14.10% 6.86%
Sep-93 18.51% 8.36%
Oct-93 18.41% 8.55%
Nov-93 12.21% 5.95%
Dec-93 17.21% 11.23%
Jan-94 20.72% 13.67%
Feb-94 20.32% 11.81%
Mar-94 14.22% 7.03%
Apr-94 14.52% 7.66%
May-94 12.82% 6.42%
Jun-94 7.12% 3.14%
Jul-94 8.83% 6.46%
Aug-94 17.13% 11.80%
Sep-94 17.43% 10.11%
Oct-94 22.44% 11.15%
Nov-94 17.83% 5.91%
Dec-94 21.04% 7.27%
Jan-95 16.63% 8.24%
Feb-95 23.54% 13.68%
Mar-95 28.74% 16.04%
Apr-95 29.34% 18.24%
May-95 30.55% 20.84%
Jun-95 42.86% 26.14%
Jul-95 59.56% 32.56%
Aug-95 61.15% 34.77%
Sep-95 68.36% 38.43%
Oct-95 69.16% 34.71%
Nov-95 69.27% 40.35%
Dec-95 66.35% 40.39%
Jan-96 64.51% 42.27%
Feb-96 66.79% 46.86%
Mar-96 68.10% 49.01%
Apr-96 82.37% 53.40%
May-96 90.65% 55.22%
Jun-96 80.94% 53.31%
Jul-96 64.28% 42.79%

[ICON] If you have any questions, please call 1-800-595-7827.

5
<PAGE>

YOUR GUIDE TO BUYING,
SELLING AND EXCHANGING SHARES
OF NORTHSTAR FUNDS
- --------------------------------------------------------------------------------

THERE ARE THREE STEPS TO TAKE WHEN YOU WANT TO BUY, SELL OR EXCHANGE SHARES OF
OUR FUNDS:

- - first, choose a share class

- - second, open a Northstar account and make your first investment

- - third, choose one of several ways to buy, sell or exchange shares.

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

CHOOSING A
SHARE CLASS

The chart below summarizes the differences between the share classes -- your
choice of share class will depend on how much you are investing and for how
long. Large investments qualify for a reduced Class A sales charge and avoid the
higher distribution fees of classes B and C. Investments in Class B and Class C
shares don't have a front-end sales charge but there is a restriction on the
amount you can invest at one time. Your financial consultant can help you, or
feel free to call us for more information.

We've listed actual expenses charged to the fund beginning on page 2.

<TABLE>
<S> <C> <C>
Maximum CLASS A no limit
amount you CLASS B $500,000
can buy CLASS C $750,000

Front-end CLASS A yes, varies by size of investment
sales CLASS B none
charge CLASS C none

Deferred CLASS A only on investments of $1 million or more if you sell within 18 months
sales CLASS B yes, if you sell within 5
charge CLASS C yes, if you sell within 1 years

Service CLASS A 0.25% per year
fee CLASS B 0.25% per year
CLASS C 0.25% per year

Distribution CLASS A 0.05% per year
fee CLASS B 0.75% per year
CLASS C 0.75% per year

Conversion CLASS B Class B shares convert to Class A shares after 8 years
</TABLE>

6
<PAGE>

YOUR GUIDE TO BUYING,
SELLING AND EXCHANGING SHARES
OF NORTHSTAR FUNDS
- --------------------------------------------------------------------------------

FRONT-END SALES
CHARGES
(Class A shares only)

<TABLE>
<CAPTION>
Your investment
Front-end sales charge Amount retained by dealers
as a percentage as a percentage as a percentage
of your net investment of offering price of offering price
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
up to $99,999 4.99 4.75 4.00
$100,000 to $249,000 3.90 3.75 3.10
$250,000 to $499,000 2.83 2.75 2.30
$500,000 to $999,000 2.04 2.00 1.70
$1,000,000 and over -- -- --
</TABLE>

WAYS TO REDUCE OR ELIMINATE SALES CHARGES

There are three ways you can reduce your front-end sales charges.

1. Take advantage of purchases you've already made

Rights of accumulation let you combine the value of all the Class A shares
you already own with your current investment to calculate your sales
charge.

2. Take advantage of purchases you intend to make

By signing a non-binding letter of intent, you can combine investments you
plan to make over a 13 month period to calculate the sales charge you'll
pay on each investment.

3. Buy as part of a group of investors

You can combine your investments with others in a recognized group when
calculating your sales charge. The following is a general list of the
groups Northstar recognizes for this benefit:

o you, your spouse and your children under the age of 21

o a trustee or fiduciary for a single trust, estate or fiduciary
account (including qualifying pension, profit sharing and
other employee benefit trusts)

o any other organized group that has been in existence for at
least six months, and wasn't formed solely for the purpose of
investing at a discount.

You may not have to pay front-end sales charges or a CDSC if you are:

o an active or retired trustee, director, officer, partner or
employee (including immediate family) of

o Northstar or of any of its affiliated companies

o any Northstar affiliated investment company - a dealer
that has a sales agreement with the distributor

o a trustee or custodian of any qualified retirement plan
or IRA established for the benefit of anyone in the
point above

o a dealer, broker or registered investment adviser who has
entered into an agreement with the distributor providing for
the use of shares of the fund in particular investment
products such as "wrap accounts" or other similar managed
accounts for the benefit of your clients

o asset allocation and other fee-based programs for the benefit
of clients

o a service provider for Northstar, any Northstar affiliated
company, or any Northstar affiliated investment company

7
<PAGE>

YOUR GUIDE TO BUYING,
SELLING AND EXCHANGING SHARES
OF NORTHSTAR FUNDS
- --------------------------------------------------------------------------------

o a Brandes employee, officer or partner

o an owner, participant or beneficiary of life insurance and/or
annuity contracts with ReliaStar Life Insurance Company
(ReliaStar) or any ReliaStar affiliated life insurance company
to the extent they invest payments made to them under the
contracts in one or more Northstar Funds within sixty days of
payment under the contracts.

You won't pay a sales charge when you buy Class A shares of a Northstar
fund through a dealer by transferring the proceeds of the sale of another
open-end fund, so long as:

o you have held the shares in the fund you're selling for at
least six months, and you paid a sales charge when you bought
them

o you send the proceeds of the sale directly to Northstar or our
agent or hold them in cash or a money market fund

o you buy the shares of the fund within 60 days of the sale, and

o the fund has the same or a similar investment objective.

Pension, profit sharing and other benefit plans created pursuant to a plan
qualified under Section 401 of the Code or plans under Section 456 of the
Code don't pay a front-end sales charge or a CDSC, as long as the shares
are purchased by an employer sponsored plan with at least 50 eligible
employees.

Investment Advisors or Financial Planners who place trades for their own
accounts or the accounts of their clients and who charge a management,
consulting or other fee for their services; and clients of such investment
advisors or financial planners who place trades for their own accounts
don't pay a front-end sales charge or a CDSC if the accounts are linked to
the master account of such investment advisor or financial planner on the
books and records of the broker or agent.

If you think you might be eligible to reduce your sales charges using any
of these methods, please call us or consult the Statement of Additional
Information (SAI).

[ICON] If you have any questions, please call 1-800-595-7827.

8
<PAGE>

YOUR GUIDE TO BUYING,
SELLING AND EXCHANGING SHARES
OF NORTHSTAR FUNDS
- --------------------------------------------------------------------------------

DEFERRED SALES
CHARGES
(Classes A, B & C)

We deduct a contingent deferred sales charge (CDSC) from the proceeds when you
sell shares as indicated below. A CDSC is charged on the current market value of
the shares, or on the price you paid for them, whichever is less. You aren't
charged a CDSC on shares you acquired by reinvesting your dividends, or on
amounts representing appreciation.

When you ask us to sell shares, we will sell those that are exempt from the CDSC
first, and then sell the shares you have held the longest. This helps keep your
CDSC as low as possible.

CLASS A SHARES

There is generally no CDSC on Class A shares, except for purchases of $1 million
or more, when you sell them within 18 months of when you bought them.

Your Investment CDSC on shares being sold

First $1,000,000 to $2,499,999 1.00%
$2,500,000 to $4,999,999 0.50%
$5,000,000 and over 0.25%

CLASS B & C SHARES

Years after you
bought the shares Class B Class C

1st year 5.00% 1.00%
2nd year 4.00% --
3rd year 3.00% --
4th year 2.00% --
5th year 2.00% --
after 5 years -- --

WHEN THE CDSC MIGHT BE WAIVED

We may waive the CDSC for Class B and Class C shares if:

o the shareholder dies or becomes disabled

o you're selling your shares through our systematic withdrawal program

o you're selling shares of a retirement plan and you are over 70 1/2 years
old

o you're exchanging Class B, C or T shares for the same class of shares of
another Northstar fund

o you fall into any of the waiver categories listed on page 32.

If you think you might be eligible for a CDSC waiver, please call us or consult
the SAI.

[ICON] If you have any questions, please call 1-800-595-7827.

9
<PAGE>

YOUR GUIDE TO BUYING,
SELLING AND EXCHANGING SHARES
OF NORTHSTAR FUNDS
- --------------------------------------------------------------------------------

OPENING A
NORTHSTAR
ACCOUNT

Once you've chosen the share class you prefer, you're ready to open an account.

First, determine how much money you want to invest. The minimum initial
investment for Northstar funds is:

o $2,500 for non-retirement accounts (we reserve the right to accept smaller
amounts)

o $250 for retirement accounts

o $25 if you are investing using our automatic investment plan (see page
___).

Next, open an account in one of two ways:

o give a check to your financial consultant, who will open an account for
you, or

o complete the application enclosed with this prospectus and mail it to us,
along with your check made payable to Northstar Funds.

TAX-SHELTERED RETIREMENT PLANS

Call or write to us about opening your Northstar account as any one of the
following retirement plans:

o Roth IRAs,
o IRAs,
o SEP-IRAs,
o Simple IRAs.

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

BUYING, SELLING
AND EXCHANGING

Once you've opened an account and made your first investment, you can choose one
of three ways to buy, sell or exchange shares of Northstar funds:

o through your financial consultant

o directly, by mail or over the telephone

o using one of our automatic plans.

We'll send you a confirmation statement every time you make a transaction that
affects your account balance, except when we pay distributions.

Some broker-dealers or agents might charge you a fee if you buy or sell shares
through them.

Instructions for each option appear in the chart on page ___, but here are a few
things you should know before you begin.

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

HOW SHARES ARE
PRICED

The price you pay or receive when you buy, sell or exchange shares is determined
by the fund's net asset value (NAV) per share and share class. NAV is calculated
each business day at the close of regular trading on the New York Stock Exchange
(usually 4:00 Eastern Time) by dividing the net assets of each fund class by the
number of shares outstanding. To calculate NAV, we determine the fair market
value of the fund's portfolio securities using the method described in the SAI.

When you're buying shares, you'll pay the NAV that is next calculated after we
receive your order in proper form, plus any sales charges that apply. When
you're selling shares, you'll receive the NAV that is next calculated after

10
<PAGE>

we receive your order in proper form, less any deferred sales charges that
apply.

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

SOME RULES FOR
BUYING

o The minimum amount of each investment after your first one is:

o $100 for non-retirement accounts
o $25 for retirement accounts
o $25 if you are investing using our automatic investment plan (see
page ___).

o We record most shares on our books electronically. We will issue a
certificate if you ask us to in writing, however most of our shareholders
prefer not to have their shares in certificate form because certificated
shares can't be sold or exchanged by telephone or using the systematic
withdrawal program.

o We have the right to refuse a request to buy shares.

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

SOME RULES FOR
SELLING

o Selling your shares may result in a deferred sales charge. Please refer to
the table on page ___.

o We'll pay you within three days from the time we receive your request to
sell, unless you're selling shares you recently paid for by check. In that
case, we'll pay you when your check has cleared, which may take up to 15
days.

o If you are a corporation, partnership, executor, administrator, trustee,
custodian, guardian or you are selling shares of a retirement plan, you'll
need to complete special documentation and give us your request in
writing. Please call us for information.

o You can reinvest part or all of the proceeds of any shares you sell
without paying a sales charge. You must let us know in writing 30 days
from the day you sold the shares, and buy the same class of shares you
sold. We will reimburse you for any CDSC you paid. Please see page 36 for
information about how this can affect your taxes.

o If selling shares results in the value of your account falling below $500,
we have the right to close your account, so long as your account has been
open for at least a year. We'll let you know 60 days in advance, and if
you don't bring the account balance above $500, we'll sell your shares,
mail the proceeds to you and close your account. We may also close your
account if you give us an incorrect social security number or taxpayer
identification number.

o In unusual circumstances, we may temporarily suspend the processing of
requests to sell.

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

SOME RULES FOR
EXCHANGING

o When you exchange shares, you are selling shares of one fund and using the
proceeds to buy shares of another fund. Please see page ___ for
information about how this can affect your taxes.

o Before you make an exchange, be sure to request and read the sections of
the prospectus of the fund you are exchanging to that discuss the shares
you're exchanging to.

o You can exchange shares of any fund for the same class of shares of any
other fund, or for shares of the Cash Management Fund of Salomon Brothers
Investment Series (a money market fund that's available through Northstar,
but isn't one of the Northstar funds). You will not pay a sales charge on
the exchange. You will, however, pay a sales charge if you buy shares of
the Cash Management Fund, and then exchange them for Class A shares of any
of the funds.

11
<PAGE>

o For the purposes of calculating CDSC, shares you exchange will continue to
age from the day you first purchased them, even if you're exchanging into
the Cash Management Fund.

o We'll let you know 60 days in advance if we want to make any changes to
these rules.

[ICON] If you have any questions, please call 1-800-595-7827.

---

12
<PAGE>

YOUR GUIDE TO BUYING,
SELLING AND EXCHANGING SHARES
OF NORTHSTAR FUNDS
- --------------------------------------------------------------------------------

WAYS TO BUY, SELL OR EXCHANGE WHEN TO USE THIS OPTION
- ------------------------------------------- ----------------------------

Through your financial consultant - buy
- sell
- exchange
- ------------------------------------------- ----------------------------

By mail
Please call us if you have any questions -- - buy
we can't process your request until we have - sell
all of the documents we need. - exchange

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

By telephone
To sign up for this service, complete - sell
section 9 of the application or call us at - exchange
1-800-595-7827.

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

Automatic investment plan
To sign up for this service, complete - buy
section 7 of the application or call us at
1-800-595-7827.

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

Systematic withdrawal program
To sign up for this service, complete - sell
section 8 of the application or call us at
1-800-595-7827.

13
<PAGE>

YOUR GUIDE TO BUYING,
SELLING AND EXCHANGING SHARES
OF NORTHSTAR FUNDS
- --------------------------------------------------------------------------------

HOW TO USE IT
- --------------------------------------------------------------------------------

If you're buying shares, make your check payable to Northstar Funds and give it
to your financial consultant, who will forward it to us.

When you're selling, give your written request to your financial consultant, who
may charge you a fee for this service.

Send your request to buy, sell or exchange in writing to:

Northstar Funds
c/o First Data Investor Services Group, Inc. P.O. Box 5131
Westborough MA 01581-5131

Your letter should tell us:

o your account number

o your social security number or taxpayer identification number

o the name the account is registered in

o the fund name and share class you're buying or selling, and, for
exchanges, the fund name and share class you're exchanging to

o the dollar value or number of shares you want to buy, sell or exchange.

If you're buying include a check payable to Northstar Funds with your request.

If you're selling or exchanging, your request must be signed by all registered
owners of the account.

We'll ask you to guarantee the signatures if:

o you are selling more than $50,000 worth of shares

o your address of record has changed in the past 30 days

o you want us to send the payment to someone other than the registered
owner, to an address other than the address of record, or in any form
other than by check.

Signatures can be guaranteed by a bank, a member of the national stock exchange
or another eligible institution.

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

You can sell or exchange up to $50,000 of your shares by telephone.

Call us at 1-800-595-7827 between 8:30 a.m. and 4:00 p.m. Eastern Time.

When you're calling with your request, we'll ask you for your name, social
security number, broker of record or other identification. If we don't ask for
these things and process an unauthorized telephone transaction, we are
responsible for any losses to your account. Otherwise you are responsible for
any unauthorized use of the telephone transaction service.

We'll mail the proceeds of the sale to the address of record or wire $1,000 or
more to any commercial bank in the U.S. that is a member of the Federal Reserve
System. Northstar does not charge a fee for this service, but your bank may
charge you a fee for receiving a wire transfer.

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

14
<PAGE>

You can authorize us to automatically withdraw a minimum of $25 each month from
your bank account and use it to buy shares in Northstar funds.

There's no charge for this service, but your bank may charge you a small set-up
or transaction fee. You can cancel the program at any time.

You can ask us to automatically transfer money from your Northstar account into
your bank account.

We will sell shares or share fractions on your behalf monthly, quarterly or
annually and automatically deposit the proceeds into your bank account. There
may be a sales charge on shares we sell on your behalf.

You must have at least $5,000 worth of shares in your account to participate in
this program. The minimum transfer amount is $25.

It isn't to your advantage to buy and sell shares of the same fund at the same
time, so you can't set up a systematic withdrawal program for an account you've
already signed up on an automatic investment plan.

15
<PAGE>

MUTUAL FUND
EARNINGS AND
YOUR TAXES
- --------------------------------------------------------------------------------

HOW THE FUND
PAYS DISTRIBUTIONS

The fund distributes virtually all of its net investment income and net capital
gains to shareholders once a year in the form of dividends.

As a shareholder, you are entitled to a share of the income and capital gains
the fund distributes. The amount you receive is based on the number of shares
you own.

DISTRIBUTION OPTIONS

You can take your distributions as cash or reinvest them in the same class of
shares of any of our funds. You specify your preference when you open your
account. Distribution options vary by share class, as follows.

You can choose to reinvest your distributions in one of three ways:

o reinvest both income dividends and capital gain distributions to buy
additional Class A, B or C shares of any fund you choose

o receive income dividends in cash and reinvest capital gain distributions
to buy additional Class A, B or C shares of any fund you choose

o receive both income dividends and capital gain distributions in cash.

You can change your distribution instructions at any time by notifying us by
phone (if going to the address of record), or in writing.

If you don't specify how you would like to receive your distributions, we'll
automatically reinvest both income dividends and capital gain distributions in
additional shares of the same fund.

[ICON] If you have any questions, please call 1-800-595-7827.

---

16
<PAGE>

MUTUAL FUND
EARNINGS AND
YOUR TAXES
- --------------------------------------------------------------------------------

HOW YOUR
DISTRIBUTIONS
ARE TAXED

The fund intends to meet the requirements for being a tax-qualified regulated
investment company, which means it generally does not pay federal income tax on
the earnings it distributes to shareholders.

As a result, distributions that you receive will generally be considered to be
taxable in your hands. Income distributions, whether you take them as cash or
reinvest them, are taxable as ordinary income. Capital gain distributions are
taxable as long-term capital gains, regardless of how long you've held the
shares.

Distributions may also be subject to state, local or foreign taxes.

If income distributed to you includes dividends paid by U.S. corporations, part
of the dividends the fund pays may be eligible for the corporate
dividends-received deduction.

TIMING YOUR PURCHASE

If you buy shares of a fund just before it makes a distribution, you will pay
the full price but part of your investment will come back to you as a taxable
distribution. Unless you are investing in a tax- deferred account, such as an
IRA, this is not to your advantage because you'll pay tax on the dividend but
will not have shared in the increase in the net asset value of the fund.

WHEN DISTRIBUTIONS ARE DECLARED

For tax purposes, distributions declared by the fund in October, November or
December and paid to you in January are taxable in the calendar year in which
they were declared.

BACKUP WITHHOLDING TAX

We'll notify you each year of the tax status of dividends and distributions. If
we don't have your tax identification number, or if you have been told by the
IRS that you are subject to backup withholding tax, we may be required to
withhold U.S. federal income tax on any distributions at the rate of 31%.

WHEN YOU SELL YOUR SHARES

When you sell or exchange shares you will realize a capital gain or loss,
depending on the difference between what your shares cost you and what you
receive for them. A capital gain or loss will be long-term or short-term,
depending on the length of time you held the shares.

In your federal income tax return you report a capital gain as income and a
capital loss as a deduction.

CONSULT YOUR TAX ADVISER

The information above is general in nature. You should consult your tax adviser
to discuss how investing in Northstar funds affects your personal tax situation.

17
<PAGE>

THE BUSINESS
OF MUTUAL
FUNDS
- --------------------------------------------------------------------------------

HOW THE FUND
IS ORGANIZED
AND MANAGED

The Northstar Mid-Cap Growth Fund is a diversified mutual fund. The fund is a
series of the Northstar Equity Trust, which is registered as an investment
company with the SEC.

The trustees of the trust oversee the business affairs of the fund and are
responsible for major decisions about the fund's investment objective and
policies.

The fund does not hold regular shareholder meetings, but may hold special
meetings. A special meeting is called if investors holding at least 10% of the
outstanding shares of the fund request it. Certain objectives and policies of
the fund may only be changed by shareholder vote. A shareholder vote is required
to change the investment objective of the fund.

The day-to-day management of the fund is handled by the following companies and
advisers appointed by the trustees:

INVESTMENT ADVISER

Oversees the investment management of the fund and provides advice and
recommendations about investments made by the fund. The investment adviser is
paid out of the fund's management fee, which is 1% of average daily net assets.

Northstar Investment Management Corporation
300 First Stamford Place
Stamford, CT 06902

ADMINISTRATOR

Provides administrative, compliance and accounting services to the fund. The
administrator receives an annual administrative services fee from the fund of
0.10% of the fund's average daily net assets, plus $5 per account per year.

Northstar Administrators Corporation
300 First Stamford Place
Stamford, CT 06902

DISTRIBUTOR

Markets the fund and distributes shares through financial consultants and other
financial representatives.

Northstar Distributors, Inc.
300 First Stamford Place
Stamford, CT 06902

CUSTODIAN

Holds all the funds' assets.

Custodian and fund accounting agent:

State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110

TRANSFER AGENT

Handles shareholder record-keeping and statements, distribution of dividends and
processing of orders to buy and sell shares.

First Data Investor Services Group, Inc.
4400 Computer Drive
Westborough, MA 01581-5120

PORTFOLIO MANAGERS

You'll find profiles of the fund's portfolio managers on page 3.

[ICON] If you have any questions, please call 1-800-595-7827.

---

18
<PAGE>

THE BUSINESS
OF MUTUAL
FUNDS
- --------------------------------------------------------------------------------

HOW DEALERS ARE
COMPENSATED

Dealers receive payment for selling shares of the Northstar Mid-Cap Growth Fund
in three ways:

THEY RECEIVE A COMMISSION WHEN
YOU BUY SHARES

The amount of the commission depends on the amount you invest and the share
class you buy. Sales commissions are detailed in the chart below.

o Class A investments
(% of offering price)

Commission Amount
received by dealers paid
out of sales charges by the
you pay distributor

up to $99,999 4.00 --
$100,000 to $249,999 3.10 --
$250,000 to $499,999 2.30 --
$500,000 to $999,999 1.70 --
$1,000,000 to $2,499,999 -- 1.00
$2,500,000 to $4,999,999 -- 0.50
$5,000,000 and over -- 0.25

o Class B investments

Receives 4% of the sale price from the distributor

o Class C investments

Receives 1% of the sale price from the distributor

THEY ARE PAID A FEE BY THE DISTRIBUTOR FOR SERVICING YOUR ACCOUNT

They receive a service fee depending on the average net asset value of the class
of shares their clients hold in the fund. These fees are paid from the 12b -1
fee deducted from each fund class. In addition to covering the cost of
commissions and service fees, the 12b -1 fee is used to pay for other expenses
such as sales literature, prospectus printing and distribution and compensation
to the distributor and its wholesalers. You'll find the 12b -1 fees listed in
the fund information beginning on page 2. Service and distribution fee
percentages appear on page ___.

THEY MAY RECEIVE ADDITIONAL BENEFITS AND REWARDS

Selling shares of the fund may make dealers eligible for awards or to
participate in sales programs sponsored by Northstar. The costs of these
benefits and rewards are not deducted from the assets of the fund -- they are
paid from the distributor's own resources.

The distributor may also pay additional compensation to dealers including out of
its own resources for marketing and other services to shareholders.

- ---

19
<PAGE>

THE RISKS OF
INVESTING IN
MUTUAL FUNDS
- --------------------------------------------------------------------------------

Risk is the potential that your investment will lose money or not earn as much
as you hope. Mutual funds have varying degrees of risk, depending on the
securities they invest in. There is no guarantee that the fund will achieve its
investment objective.

This section provides information about the risks associated with different
kinds of securities. It also lists additional investment practices that may
involve elements of risk.

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

EQUITIES

o Give the buyer ownership rights in the issuer. Common and preferred
stocks, convertible securities, stock purchase rights and interests in
real estate investment trusts are types of equities. Real estate
investment trusts are companies that manage a portfolio of real estate to
earn profits for shareholders.

o The market value of an equity security may go up or down rapidly depending
on market conditions. This affects the value of the shares of a fund, and
the value of your investment.

o Securities of smaller companies may be subject to more abrupt or erratic
market movements because they are traded in lower volume and are subject
to greater changes in earnings and growth prospects. Such securities may
include securities of emerging growth companies. Emerging growth companies
may:

o be in a relatively early stage of development, but will usually have
consistent or accelerating earnings growth

o occupy a profitable market niche

o have products or technologies that are new, unique or proprietary

o be in an industry that has a favorable long-term growth outlook.

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

FOREIGN
INVESTMENTS

o Securities issued by companies or governments of foreign countries. May
include equities and debt securities including sovereign debt obligations,
and also including securities issued to refinance foreign government bank
loans and other debt also known as Brady Bonds.

o Subject to all of the risks associated with equity and debt securities.
There are also other risks that can affect the value of a foreign
investment.

o foreign markets may be less regulated, may have less volume and be
less liquid

o foreign securities may be less liquid and more volatile

o the value of foreign securities may be affected by adverse political
and economic developments, seizure or nationalization of foreign
deposits, and government restrictions

o there is often less information available about foreign companies
and many countries do not have the accounting, auditing and
financial reporting that we have in the United States.

20
<PAGE>

THE RISKS OF
INVESTING IN
MUTUAL FUNDS
- --------------------------------------------------------------------------------

EMERGING MARKETS

o Investment in emerging markets have additional risks: developing countries
have economic structures that are less mature, they have less stable
political systems and may have high inflation, rapidly changing interest
and currency exchange rates, and their securities markets are
substantially less developed.

DEPOSITORY RECEIPTS

o American Depository Receipts (ADRs) are typically issued by U.S. banks or
trust companies. They are based on ownership of securities issued by
foreign companies, and are traded on U.S. exchanges. European Depository
Receipts (EDRs) and Global Depository Receipts (GDRs) are typically issued
by foreign banks or trust companies, although they also may be issued by
U.S. banks or trust companies. They are based on ownership of securities
issued by foreign or U.S. companies, and are traded on stock exchanges
around the world.

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

DEBT SECURITIES

o Obligations to repay borrowed money within a certain time with or without
interest. Zero-coupon securities, pay-in-kind securities, discount
obligations, mortgage-backed securities, convertible securities and
high-yield securities are types of debt securities.

o Debt securities are affected by changes in interest rates. In general,
when interest rates go up, the value of a debt security decreases; when
interest rates go down, the value of a debt security increases.

o There is also the risk that the borrower won't be able to fulfill its
obligation, resulting in loss or a lower price than anticipated.

LOWER-RATED OR JUNK BONDS

The fund may invest in high-yield securities (junk bonds). In addition to
general risks listed above that are associated with debt securities, junk bonds
have special risks:

o They fluctuate more in value than higher-rated securities.

o They are more subject to the risk that the borrower won't fulfill its
obligation.

o There may not be a market to sell them at a reasonable price, resulting in
loss or a lower price than anticipated.

o The fund's ability to achieve its investment objective may be more
dependent on Northstar's credit analysis than is the case for higher-rated
securities.

OTHER, HIGHER
RISK SECURITIES

ILLIQUID SECURITIES -- FUND IS LIMITED TO 15% OF NET ASSET VALUE

o Securities that can't be sold quickly at a reasonable price, or that can't
be sold on the open market. Includes restricted securities and private
placements.

o Used to realize higher profits.

o There may be fewer market players which can result in lower prices, and
sales can take longer to complete.

o Following guidelines established by the trustees of the fund, Northstar
may consider a security than can't be sold on the open market to be liquid
if it can be sold to institutional investors (Rule 144A) or on foreign
markets.

21
<PAGE>

THE RISKS OF
INVESTING IN
MUTUAL FUNDS
- --------------------------------------------------------------------------------

DERIVATIVE SECURITIES

o Securities that derive their value from the performance of an underlying
asset. Usually take the form of a contract to buy or sell an asset or
commodity either now or in the future, but mortgage and other asset-backed
securities are also generally considered derivatives. Types of derivative
securities include options, futures contracts, options on futures and
forward contracts.

o Used often to "hedge" or offset market fluctuations or changes in currency
exchange or interest rates. May also be used for speculative purposes to
increase returns.

o In addition to the risks associated with equities and debt securities,
there are several special risks associated with the use of derivatives:

o changes in the value of the derivative may not match changes in the
value of its underlying asset

o hedging may not be successful, and may prevent the fund from making
other gains

o derivatives used for speculative purposes can result in gains or
losses that are substantially greater than the derivative's original
cost.

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

INVESTMENT
PRACTICES

REPURCHASE AGREEMENTS - FUND IS LIMITED TO 15% OF NET ASSET VALUE

o Buying a security from a bank or dealer who must buy it back at a fixed
price on a specified day. Repurchase agreements that mature after more
than seven days are considered to be illiquid investments. Investments in
this type of repurchase agreement can only be 5% of a fund's net asset
value.

o Used for temporary and defensive purposes or to generate income from cash
balances.

o The bank or dealer may not be able to buy back the security.

SHORT-TERM TRADING -- NO LIMIT

o Selling a security soon after you buy it.

o Used when the fund needs to be more liquid, in response to changes in
interest rates and economic or other developments, or when a security has
reached its price or yield objective.

o May result in higher costs for brokerage commissions, dealer mark-ups and
other transactions costs, as well as taxable capital gains.

TEMPORARY INVESTMENTS -- NO LIMIT

o Temporarily maintaining part or all of a fund's assets in cash or in U.S.
Government Securities, commercial paper, banker's acceptances, repurchase
agreements and certificates of deposit.

o Used for temporary and defensive purposes in periods of unusual market
conditions.

o Provides lower returns.

22
<PAGE>

THE RISKS OF
INVESTING IN
MUTUAL FUNDS
- --------------------------------------------------------------------------------

WHEN ISSUED SECURITIES AND FORWARD COMMITMENTS -- NO LIMIT

o A commitment to buy a security on a specific day in the future at a
specified price.

o Used to realize short-term profits.

o If made through a dealer, there is a risk that the dealer won't complete
the sale, and that the fund will lose out on a good yield or price.

o There is also risk that the value of the security will change before the
transaction is settled, resulting in short-term losses instead of gains.

23
<PAGE>

WHERE TO GO
FOR MORE
INFORMATION
- --------------------------------------------------------------------------------

You'll find more information about the Northstar Mid-Cap Growth Fund in our:

ANNUAL REPORT

The Annual report contains information about fund performance, the financial
statements and the auditor's reports. Because this is a new fund, its Annual
Report won't be available until February 1999.

STATEMENT OF ADDITIONAL INFORMATION

The SAI contains complete information about the Northstar Mid-Cap Growth Fund.
The SAI is legally part of this prospectus (it is incorporated by reference). A
copy has been filed with the Securities and Exchange Commission.

Please write or call for a free copy of the Annual report or the current SAI:

The Northstar Funds
300 First Stamford Place
Stamford, CT 06902

1-800-595-7827

24
<PAGE>

NORTHSTAR
MID-CAP
GROWTH FUND
INSTITUTIONAL CLASS SHARES

PROSPECTUS
September 1, 1998

[Star Graphic]

<PAGE>

WHAT'S
INSIDE
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
[LOGO]OBJECTIVE These pages contain a Northstar Mid-Cap Growth Fund 2
description of the fund, including
its objective, investment strategy, Meet the portfolio managers 3
[LOGO]INVESTMENT types of holdings, risks and
STRATEGY portfolio managers. Your guide to buying and selling
Class I shares of the Northstar
Mid-Cap Growth Fund -

[LOGO]HOLDINGS You'll also find: Mutual fund earnings and
your taxes -
[LOGO]RISKS What you pay to invest. A list
of the fees and expenses you pay - The business of mutual funds -
both directly and indirectly - when
you invest in the fund. The risks of investing in
[LOGO]WHAT mutual funds -
YOU PAY
TO INVEST Where to go for more
information -
</TABLE>

<PAGE>

NORTHSTAR Registrant
MID-CAP GROWTH Northstar Equity Trust
FUND Portfolio managers
Mary Lisanti,
Jeffrey Bernstein
- --------------------------------------------------------------------------------

OBJECTIVE

This fund's objective is long-term capital appreciation by investing in a
diversified portfolio of equity securities.

INVESTMENT
STRATEGY

HOLDINGS

RISKS

FEES YOU PAY DIRECTLY
CLASS I
-------
Maximum sales charge on your
initial investment (as a % of
offering price) % none
Maximum deferred sales charge % none

OPERATING EXPENSES PAID EACH YEAR BY THE FUND
(as a % of average net assets)
CLASS I
-------
Management fee % 1.00
12b-1 fee % 0.00
Other expenses % 0.50
TOTAL FUND OPERATING EXPENSES % 1.50

EXAMPLE

YEAR 1 YEAR 3
------ ------
Class I $15 $47

2 Mid-Cap Growth Fund
<PAGE>

MEET THE
PORTFOLIO
MANAGERS
- --------------------------------------------------------------------------------

Jeffrey Bernstein

Jeffrey Bernstein has been the co-manager of the Northstar Mid-Cap Growth Fund
since inception. He joined Northstar in May 1998.

Mary Lisanti

Mary Lisanti has been the co-manager of the Northstar Mid-Cap Growth Fund since
inception and manager of the Northstar Special Fund since July 1998. She joined
Northstar in May 1998.

Ms. Lisanti earned her BA with honors from Princeton University. She is a
Chartered Financial Analyst, member of the New York Society of Security Analysts
and the Financial Analyst Federation.

[ICON] If you have any questions, please call 1-800-595-7827.

3
<PAGE>

MEET THE
PORTFOLIO
MANAGERS
- --------------------------------------------------------------------------------

PERFORMANCE
PROFILE:

Mary Lisanti
Jeffrey Bernstein

These figures demonstrate the historical track record of Mary Lisanti and
Jeffrey Bernstein. They do not indicate how the Northstar Mid-Cap Growth Fund
will perform in the future.

Before joining Northstar in May 1998, Ms. Lisanti and Mr. Bernstein co-managed
the Strong Mid Cap Fund and had full discretionary authority for the selection
of the fund's investments.

The Strong Mid Cap Fund had investment objectives, policies, techniques and
strategies substantially similar to the Northstar Mid-Cap Growth Fund, which Ms.
Lisanti and Mr. Bernstein now manage.

The charts below show the average annual returns and the cumulative total return
during the period when Ms. Lisanti and Mr. Bernstein managed the fund.

Strong
Mid Cap S&P 400
Fund (%) Index (%)

One year, ended
May 22, 1998 34.84% 35.17%

Cumulative total
return January 1997 28.15% 44.45%
to May 1998

[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]

4
<PAGE>

MEET THE
PORTFOLIO
MANAGERS
- --------------------------------------------------------------------------------

PERFORMANCE
PROFILE:

Mary Lisanti

These figures demonstrate the historical track record of Mary Lisanti. They do
not indicate how the Northstar Mid-Cap Growth Fund will perform in the future.

From March 9, 1993 through July 31, 1996, Ms. Lisanti managed the BT Capital
Appreciation Fund and had full discretionary authority for the selection of the
fund's investments.

The BT Capital Appreciation Fund had investment objectives, policies, techniques
and strategies substantially similar to the Northstar Mid-Cap Growth Fund, which
Ms. Lisanti now manages.

The charts below show the average annual returns and the cumulative total return
during the period when Ms. Lisanti managed the fund.

These figures reflect changes in the share prices and reinvestment of dividends
and distributions, and are after deduction of all fees and expenses. Included
for comparison are performance figures of the S&P 400 MidCap Index. It has been
adjusted to reflect reinvestment of dividends. The results presented below may
not equate with the return experienced by any shareholder as a result of timing
of investments and the effects of taxes on any shareholder.

BT Capital
Appreciation S&P 400
Fund (%) INDEX (%)

One year, ended
July 31, 1996 2.96% 7.76%

Three years, ended
July 31, 1996 15.42% 11.57%

Cumulative total
return March 1993
to August 1996 64.22% 43.46%

[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]

Capital
Appreciation
Fund Index

[ICON] If you have any questions, please call 1-800-595-7827.

5
<PAGE>

YOUR GUIDE TO BUYING AND SELLING
CLASS I SHARES OF THE
NORTHSTAR MID-CAP GROWTH FUND
- --------------------------------------------------------------------------------

MINIMUM INVESTMENT

The minimum initial investment for Class I shares is $10,000,000. Class I shares
are only available to certain defined benefit plans, insurance companies and
foundations investing for their own account.

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

BUYING AND SELLING

Once you've opened an account and made your first investment, you can choose one
of two ways to buy or sell shares of the Northstar Mid-Cap Growth Fund

o through your financial consultant or
o directly, by mail or over the telephone.

We'll send you a confirmation statement every time you make a transaction that
affects your account balance, except when we pay distributions.

Some broker-dealers or agents might charge you a fee if you buy or sell shares
through them.

Instructions for each option appear in the chart on page ___, but here are a few
things you should know before you begin.

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

HOW SHARES ARE
PRICED

When you're buying shares, you'll pay the NAV that is next calculated after we
receive your order in proper form. When you're selling shares, you'll receive
the NAV that is next calculated after we receive your order in proper form.

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

SOME RULES FOR
BUYING

o The minimum amount of each Class I investment after your first one is
$1,000,000.

o We have the right to refuse a request to buy shares.

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

SOME RULES FOR
SELLING

6
<PAGE>

YOUR GUIDE TO BUYING AND SELLING
CLASS I SHARES OF THE
NORTHSTAR MID-CAP GROWTH FUND
- --------------------------------------------------------------------------------

o You won't pay a service charge when you sell your shares, but your dealer
may charge you a fee.

o If selling shares results in the value of your account falling below
$10,000, we have the right to close your account, so long as your account
has been open for at least a year. We'll let you know 60 days in advance,
and if you don't bring the account balance above $10,000, we'll sell your
shares, mail the proceeds to you and close your account. We may also close
your account if you give us an incorrect social security number or
taxpayer identification number.

o In unusual circumstances, we may temporarily suspend the processing of
requests to sell.

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

7
<PAGE>

YOUR GUIDE TO BUYING AND SELLING
CLASS I SHARES OF THE
NORTHSTAR MID-CAP GROWTH FUND
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
WAYS TO BUY OR SELL WHEN TO USE THIS OPTION HOW TO USE IT
- -------------------------------------- ---------------------------- --------------------------------
<S> <C> <C>
Through your financial consultant - buy If you're buying shares, make your
- sell check payable to Northstar Funds and
give it to your financial consultant, who
will forward it to us. When you're
selling, give your written request to
your financial consultant, who may
charge you a fee for this service.
- -------------------------------------- ---------------------------- -------------------------------

By mail - buy Send your request to buy or sell in
Please call us if you have any questions -- - sell writing to:
we can't process your request until we have
all of the documents we need. Northstar Funds
c/o First Data Investor Services Group,
Inc.
P.O. Box 5131
Westborough, MA 01581-5131

Your letter should tell us:

o your account number
o your social security number or
taxpayer identification number
o the name the account is registered
in
o the fund name and share class
you're buying or selling
o the dollar value or number of
shares you want to buy or sell.

If you're buying include a check payable
to Northstar Funds with your request. If
you're selling, your request must be
signed by all registered owners of the
account.

We'll ask you to guarantee the
signatures if:

o you are selling more than $50,000
worth of shares
o your address of record has changed
in the past 30 days
o you want us to send the payment to
someone other than the registered
owner, to an address other than
the address of record, or in any
form other than by check.

Signatures can be guaranteed by a bank,
a member of the national stock exchange
or another eligible institution.
</TABLE>

8
<PAGE>

YOUR GUIDE TO BUYING AND SELLING
CLASS I SHARES OF THE
NORTHSTAR MID-CAP GROWTH FUND
- --------------------------------------------------------------------------------

WAYS TO BUY OR SELL WHEN TO USE THIS OPTION HOW TO USE IT
- -------------------------------------- ---------------------------- --------------------------------
<S> <C> <C>
By telephone
To sign up for this service, complete - sell You can sell up to $50,000 of your
section 9 of the application or call us at shares by telephone.
1-800-595-7827.
Call us at 1-800-595-7827 between 8:30
a.m. and 4:00 p.m. Eastern Time.

When you're calling with your request,
we'll ask you for your name, social
security number, broker of record or
other identification. If we don't ask
for these things and process an
unauthorized telephone transaction, we
are responsible for any losses to your
account. Otherwise you are responsible
for any unauthorized use of the
telephone transaction service.

We'll mail the proceeds of the sale to
the address of record or wire $1,000 or
more to any commercial bank in the U.S.
that is a member of the Federal Reserve
System. Northstar does not charge a fee
for this service, but your bank may
charge you a fee for receiving a wire
transfer.
</TABLE>

9
<PAGE>

MUTUAL FUND
EARNINGS AND
YOUR TAXES
- --------------------------------------------------------------------------------

HOW THE FUND
PAYS DISTRIBUTIONS

The fund distributes virtually all of its net investment income and net capital
gains to shareholders once a year in the form of dividends.

As a shareholder, you are entitled to a share of the income and capital gains
the fund distributes. The amount you receive is based on the number of shares
you own.

DISTRIBUTION OPTIONS

You can choose to reinvest your distributions in one of three ways:

o reinvest both income dividends and capital gain distributions to buy
additional Class I shares of either the Northstar Mid-Cap Growth Fund or
the Northstar Growth Fund

o receive income dividends in cash and reinvest capital gain distributions
to buy additional Class I shares of either the Northstar Mid-Cap Growth
Fund or the Northstar Growth Fund

o receive both income dividends and capital gain distributions in cash.

You can change your distribution instructions at any time by notifying us by
phone (if going to the address of record), or in writing.

If you don't specify how you would like to receive your distributions, we'll
automatically reinvest both income dividends and capital gain distributions in
additional Class I shares of the Northstar Mid-Cap Growth Fund.

[ICON] If you have any questions, please call 1-800-595-7827.

---

10
<PAGE>

MUTUAL FUND
EARNINGS AND
YOUR TAXES
- --------------------------------------------------------------------------------

HOW YOUR
DISTRIBUTIONS
ARE TAXED

Distributions may also be subject to state, local or foreign taxes.

If income distributed to you includes dividends paid by U.S. corporations, part
of the dividends the fund pays may be eligible for the corporate
dividends-received deduction.

TIMING YOUR PURCHASE

WHEN DISTRIBUTIONS ARE DECLARED

For tax purposes, distributions declared by the fund in October, November or
December and paid to you in January are taxable in the calendar year in which
they were declared.

BACKUP WITHHOLDING TAX

WHEN YOU SELL YOUR SHARES

In your federal income tax return you report a capital gain as income and a
capital loss as a deduction.

CONSULT YOUR TAX ADVISER

The information above is general in nature. You should consult your tax adviser
to discuss how investing in the Northstar Mid-Cap Growth Fund affects your
personal tax situation.

11
<PAGE>

THE BUSINESS
OF MUTUAL
FUNDS
- --------------------------------------------------------------------------------

HOW THE FUND
IS ORGANIZED
AND MANAGED

The Northstar Mid-Cap Growth Fund is a diversified mutual fund. The fund is a
series of the Northstar Equity Trust, which is registered as an investment
company with the SEC.

The trustees of the trust oversee the business affairs of the fund and are
responsible for major decisions about the fund's investment objective and
policies.

The day-to-day management of the fund is handled by the following companies and
advisers appointed by the trustees:

INVESTMENT ADVISER

Northstar Investment Management Corporation
300 First Stamford Place
Stamford, CT 06902

ADMINISTRATOR

Northstar Administrators Corporation
300 First Stamford Place
Stamford, CT 06902

DISTRIBUTOR

Markets the fund and distributes shares through financial consultants and other
financial representatives.

Northstar Distributors, Inc.
300 First Stamford Place
Stamford, CT 06902

CUSTODIAN

Holds all the funds' assets.

Custodian and fund accounting agent:

State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110

12
<PAGE>

THE BUSINESS
OF MUTUAL
FUNDS
- --------------------------------------------------------------------------------

TRANSFER AGENT

Handles shareholder record-keeping and statements, distribution of dividends and
processing of orders to buy and sell shares.

First Data Investor Services Group, Inc.
4400 Computer Drive
Westborough, MA 01581-5120

PORTFOLIO MANAGERS

You'll find profiles of the fund's portfolio managers on page 3.

[ICON] If you have any questions, please call 1-800-595-7827.

---

13
<PAGE>

THE RISKS OF
INVESTING IN
MUTUAL FUNDS
- --------------------------------------------------------------------------------

This section provides information about the risks associated with different
kinds of securities. It also lists additional investment practices that may
involve elements of risk.

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

EQUITIES

o The market value of an equity security may go up or down rapidly depending
on market conditions. This affects the value of the shares of a fund, and
the value of your investment.

o be in a relatively early stage of development, but will usually have
consistent or accelerating earnings growth

o occupy a profitable market niche

o have products or technologies that are new, unique or proprietary

o be in an industry that has a favorable long-term growth outlook.

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

FOREIGN
INVESTMENTS

o Subject to all of the risks associated with equity and debt securities.
There are also other risks that can affect the value of a foreign
investment.

o foreign markets may be less regulated, may have less volume and be
less liquid

o foreign securities may be less liquid and more volatile

o the value of foreign securities may be affected by adverse political
and economic developments, seizure or nationalization of foreign
deposits, and government restrictions

o there is often less information available about foreign companies
and many countries do not have the accounting, auditing and
financial reporting that we have in the United States.

14
<PAGE>

THE RISKS OF
INVESTING IN
MUTUAL FUNDS
- --------------------------------------------------------------------------------

EMERGING MARKETS

DEPOSITORY RECEIPTS

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

DEBT SECURITIES

o There is also the risk that the borrower won't be able to fulfill its
obligation, resulting in loss or a lower price than anticipated.

LOWER-RATED OR JUNK BONDS

The fund may invest in high-yield securities (junk bonds). In addition to
general risks listed above that are associated with debt securities, junk bonds
have special risks:

o They fluctuate more in value than higher-rated securities.

o They are more subject to the risk that the borrower won't fulfill its
obligation.

o There may not be a market to sell them at a reasonable price, resulting in
loss or a lower price than anticipated.

o The fund's ability to achieve its investment objective may be more
dependent on Northstar's credit analysis than is the case for higher-rated
securities.

OTHER, HIGHER
RISK SECURITIES

ILLIQUID SECURITIES -- FUND IS LIMITED TO 15% OF NET ASSET VALUE

o Securities that can't be sold quickly at a reasonable price, or that can't
be sold on the open market. Includes restricted securities and private
placements.

o Used to realize higher profits.

o There may be fewer market players which can result in lower prices, and
sales can take longer to complete.

15
<PAGE>

THE RISKS OF
INVESTING IN
MUTUAL FUNDS
- --------------------------------------------------------------------------------

DERIVATIVE SECURITIES

o Used often to "hedge" or offset market fluctuations or changes in currency
exchange or interest rates. May also be used for speculative purposes to
increase returns.

o In addition to the risks associated with equities and debt securities,
there are several special risks associated with the use of derivatives:

o changes in the value of the derivative may not match changes in the
value of its underlying asset

o hedging may not be successful, and may prevent the fund from making
other gains

o derivatives used for speculative purposes can result in gains or
losses that are substantially greater than the derivative's original
cost.

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

INVESTMENT
PRACTICES

REPURCHASE AGREEMENTS - FUND IS LIMITED TO 15% OF NET ASSET VALUE

o Used for temporary and defensive purposes or to generate income from cash
balances.

o The bank or dealer may not be able to buy back the security.

SHORT-TERM TRADING -- NO LIMIT

o Selling a security soon after you buy it.

o Used when the fund needs to be more liquid, in response to changes in
interest rates and economic or other developments, or when a security has
reached its price or yield objective.

o May result in higher costs for brokerage commissions, dealer mark-ups and
other transactions costs, as well as taxable capital gains.

TEMPORARY INVESTMENTS -- NO LIMIT

o Temporarily maintaining part or all of a fund's assets in cash or in U.S.
Government Securities, commercial paper, banker's acceptances, repurchase
agreements and certificates of deposit.

o Used for temporary and defensive purposes in periods of unusual market
conditions.

o Provides lower returns.

16
<PAGE>

THE RISKS OF
INVESTING IN
MUTUAL FUNDS
- --------------------------------------------------------------------------------

WHEN ISSUED SECURITIES AND FORWARD COMMITMENTS -- NO LIMIT

o A commitment to buy a security on a specific day in the future at a
specified price.

o Used to realize short-term profits.

o If made through a dealer, there is a risk that the dealer won't complete
the sale, and that the fund will lose out on a good yield or price.

o There is also risk that the value of the security will change before the
transaction is settled, resulting in short-term losses instead of gains.

17
<PAGE>

WHERE TO GO
FOR MORE
INFORMATION
- --------------------------------------------------------------------------------

You'll find more information about the Northstar Mid-Cap Growth Fund in our:

ANNUAL REPORT

STATEMENT OF ADDITIONAL INFORMATION

Please write or call for a free copy of the Annual report or the current SAI:

The Northstar Funds
300 First Stamford Place
Stamford, CT 06902

1-800-595-7827

PROSPECTUS FOR CLASS A, B AND C

Class A, B and C shares of the Northstar Mid-Cap Growth Fund are discussed in a
separate prospectus. Class A, B and C shares have sales charges and other
expenses that may affect performance. You may obtain a prospectus for Class A, B
and C shares of the fund by calling 1-800-595-7827 or writing:

The Northstar Funds
300 First Stamford Place
Stamford, CT 06902

18
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
SEPTEMBER 1, 1998

(star)NORTHSTAR MID-CAP GROWTH FUND

300 FIRST STAMFORD PLACE
STAMFORD, CONNECTICUT 06902
(203) 602-7950
(800) 595-7827

This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of the
Northstar Mid-Cap Growth Fund (the "Fund") dated September 1, 1998, as each may
be revised from time to time. To obtain a copy of the Fund's Prospectus, please
contact Northstar Investment Management Corporation at the address or phone
number listed above.

Northstar Investment Management Corporation ("Northstar" or the "Adviser")
serves as the Fund's investment adviser. Northstar Distributors, Inc. (the
"Underwriter") is the underwriter to the Fund. Northstar Administrators
Corporation (the "Administrator") is the Fund's administrator. The Underwriter
and the Administrator are affiliates of Northstar.

TABLE OF CONTENTS

INVESTMENT RESTRICTIONS.................................................. 2
INVESTMENT TECHNIQUES.................................................... --
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION.......................... --
SERVICES OF NORTHSTAR AND THE ADMINISTRATOR.............................. --
NET ASSET VALUE.......................................................... --
PURCHASES AND REDEMPTIONS................................................ --
DIVIDENDS, DISTRIBUTIONS AND TAXES....................................... --
UNDERWRITER AND DISTRIBUTION SERVICES.................................... --
TRUSTEES AND OFFICERS.................................................... --
OTHER INFORMATION........................................................ --
PERFORMANCE INFORMATION.................................................. --
FINANCIAL STATEMENTS..................................................... --
APPENDIX................................................................. A-1
<PAGE>

INVESTMENT RESTRICTIONS

Northstar Mid-Cap Growth Fund. The Fund has adopted investment
restrictions numbered 1 through 11 as fundamental policies. These restrictions
cannot be changed without approval by the holders of a majority (as defined in
the Investment Company Act of 1940, as amended (the "1940 Act")) of the Fund's
outstanding voting shares. Investment restrictions numbered 12 through 15 are
not fundamental policies and may be changed by vote of a majority of the Trust's
Board members at any time. The Fund may not:

1. Borrow money, issue senior securities, or pledge, mortgage or
hypothecate its assets, except that it may: (a) borrow from banks but only if,
immediately after such borrowing there is asset coverage of 300%, and (b) enter
into transactions in options, futures, and options on futures and other
transactions not deemed to involve the issuance of senior securities;

2. Underwrite the securities of others;

3. Purchase or sell real property, including real estate limited
partnerships (the Fund may purchase marketable securities of companies that deal
in real estate or interests therein, including real estate investment trusts);

4. Deal in commodities or commodity contracts, except in the manner
described in the current Prospectus and SAI of the Fund;

5. Make loans to other persons (but the Fund may, however, lend portfolio
securities, up to 33% of net assets at the time the loan is made, to brokers or
dealers or other financial institutions not affiliated with the Fund or
Northstar, subject to conditions established by Northstar (See "Lending
Portfolio Securities" in this SAI), and may purchase or hold participations in
loans, in accordance with the investment objectives and policies of the Fund, as
described in the current Prospectus and SAI of the Fund;

6. Purchase on margin (except that for purposes of this restriction, the
deposit or payment of initial or variation margin in connection with futures
contracts will not be deemed to be purchases of securities on margin);

7. Sell short, except that the Fund may enter into short sales against the
box;

8. Invest more than 25% of its assets in any one industry or related group
of industries;

9. With respect to 75% of the Fund's assets, purchase a security (other
than U.S. Government obligations) if, as a result, more than 5% of the value of
total assets of the Fund would be invested in securities of a single issuer;

10. Purchase a security if, as a result, more than 10% of any class of
securities, or more than 10% of the outstanding voting securities of an issuer,
would be held by the Fund;

11. Borrow money except to the extent permitted under the 1940 Act;

12. Purchase securities of other investment companies, except in
connection with a merger, consolidation or sale of assets, and except that the
Fund may purchase shares of other investment companies, subject to such
restrictions as may be imposed by the 1940 Act and rules thereunder or by any
state in which shares of the Fund are registered;

13. Make an investment for the purpose of exercising control over
management;

14. Invest more than 15% of its net assets in illiquid securities; or

15. Borrow any amount in excess of 10% of the Fund's assets, other than
for temporary emergency or administrative purposes. In addition, the Fund will
not make additional investments when its borrowings exceed 5% of total assets.

In addition to the restrictions described above, the Fund may, from time
to time, agree to additional investment restrictions for purposes of compliance
with the securities laws of foreign jurisdictions where the Fund intends to
offer or sell its shares.

INVESTMENT TECHNIQUES

Derivative Instruments. The Fund may invest in Derivative Instruments (as
defined in the Fund's Prospectus) for a variety of reasons, including to enhance
return, hedge certain market risks, or provide a substitute for purchasing or
selling particular securities. Derivatives may provide a cheaper, quicker or
more specifically focused way for the Fund to invest than "traditional"
securities would.

Derivatives can be volatile and involve various types and degrees of risk,
depending upon the characteristics of the particular Derivative and the
portfolio as a whole. Derivatives permit a Fund to increase or decrease the
level of risk, or change the character of the risk, to which its portfolio is
exposed in much the same way as the Fund can increase or decrease the level of
risk, or change the character of the risk, of its portfolio by making
investments in specific securities.

Derivatives may be purchased on established exchanges or through privately
negotiated transactions referred to as over-the-counter Derivatives.
Exchange-traded Derivatives generally are guaranteed by the clearing agency
which is the issuer or counterparty to such Derivatives. This guarantee usually
is supported by a daily payment system (i.e., margin requirements) operated by
the clearing agency in order to reduce overall credit risk. As a result, unless
the clearing agency defaults, there is relatively little counterparty credit
risk associated with Derivatives purchased on an exchange. By contrast, no
clearing agency guarantees over-the-counter Derivatives. Therefore, each party
to an over-the-counter Derivative bears the risk that the counterparty will
default. Accordingly, Northstar will consider the creditworthiness of
counterparties to over-the-counter Derivatives in the same manner as it would
review the credit quality of a security to be purchased by a Fund.
Over-the-counter Derivatives are less liquid than exchange-traded Derivatives
since the other party to the transaction may be the only investor with
sufficient understanding of the Derivative to be interested in bidding for it.

Firm Commitments and When-Issued Securities. The Fund may enter into firm
commitment agreements to purchase securities at an agreed-upon price on a
specified future date. An amount of cash or short-term U.S. Government
Securities equal to the Fund's commitment will be deposited in a segregated
account at the Fund's custodian bank to secure the Fund's obligation. Although a
Fund will generally enter into firm commitments to purchase securities with the
intention of actually acquiring the securities for its portfolio (or for
delivery pursuant to options contracts it has entered into), the Fund may
dispose of a security prior to settlement if Northstar deems it advisable to do
so. A Fund entering into the forward commitment may realize short-term gains or
losses in connection with such sales.

The Fund may enter into To Be Announced ("TBA") sale commitments wherein
the unit price and the estimated principal amount are established upon entering
into the contract, with the actual principal amount being within a specified
range of the estimate. A Fund will enter into TBA sale commitments to hedge its
portfolio positions or to sell mortgage-backed securities it owns under delayed
delivery arrangements. Proceeds of TBA sale commitments are not received until
the contractual settlement date. During the time a TBA sale commitment is
outstanding, the Fund will maintain, in a segregated account, cash or high-grade
debt obligations in an amount sufficient to meet the purchase price. Unsettled
TBA sale commitments are valued at current market value of the underlying
securities. If the TBA sale commitment is closed through the acquisition of an
offsetting purchase commitment, the Fund realizes a gain or loss on the
commitment without regard to any unrealized gain or loss on the underlying
security. If the Fund delivers securities under the commitment, the Fund
realizes a gain or loss from the sale of the securities, based upon the unit
price established at the date the commitment was entered into.

The Fund may also purchase securities on a when-issued or delayed delivery
basis. In such transactions, the price is fixed at the time the commitment to
purchase is made, but delivery and payment for the securities take place at a
later date, normally within one month. The value of the security on the
settlement date may be more or less than the price paid as a result of, among
other things, changes in the level of interest rates or other market factors.
Accordingly, there is a risk of loss, which is in addition to the risk of
decline in the value of the Fund's other assets. The Fund will establish a
segregated account with its custodian in which it will maintain cash and
marketable securities equal in value to commitments for when-issued or delayed
delivery securities. While when-issued or delayed delivery securities may be
sold prior to the settlement date, it is intended that a Fund will purchase such
securities with the purpose of actually acquiring them, unless a sale appears
desirable for investment reasons.

Floating or Variable Rate Instruments. The Fund may purchase floating or
variable rate bonds, which normally provide that the holder can demand payment
of the obligation on short notice at par with accrued interest. Such bonds are
frequently secured by letters of credit or other credit support arrangements
provided by banks. Floating or variable rate instruments provide for adjustments
in the interest rate at specified intervals (weekly, monthly, semiannually,
etc.). A Fund would anticipate using these bonds as cash equivalents, pending
longer term investment of its funds. Other longer term fixed-rate bonds, with a
right of the holder to request redemption at certain times (often annually,
after the lapse of an intermediate term), may also be purchased by the Fund.
These bonds are more defensive than conventional long-term bonds (protecting to
some degree against a rise in interest rates), while providing greater
opportunity than comparable intermediate term bonds since the Fund may retain
the bond if interest rates decline. By acquiring these kinds of bonds, a Fund
obtains the contractual right to require the issuer of the security, or some
other person (other than a broker or dealer), to purchase the security at an
agreed upon price, which right is contained in the obligation itself rather than
in a separate agreement with the seller or some other person.

Futures Transactions - In General. The Fund may enter into futures
contracts in U.S. domestic markets, such as the Chicago Board of Trade and the
International Monetary Market of the Chicago Mercantile Exchange, or on
exchanges located outside the

2
<PAGE>

United States, such as the London International Financial Futures Exchange and
the Sydney Futures Exchange Limited. Foreign markets may offer advantages such
as trading opportunities or arbitrage possibilities not available in the United
States. Foreign markets, however, may have greater risk potential than domestic
markets. For example, some foreign exchanges are principal markets so that no
common clearing facility exists and an investor may look only to the broker for
performance of the contract. In addition, any profits that the Fund might
realize in trading could be eliminated by adverse changes in the exchange rate,
or the Fund could incur losses as a result of those changes. Transactions on
foreign exchanges may include both commodities which are traded on domestic
exchanges and those which are not. Unlike trading on domestic commodity
exchanges, trading on foreign commodity exchanges is not regulated by the
Commodity Futures Trading Commission.

Engaging in these transactions involves risk of loss to the Fund which
could adversely affect the value of the Fund's net assets. Although the Fund
intends to purchase or sell futures contracts only if there is an active market
for such contracts, no assurance can be given that a liquid market will exist
for any particular contract at any particular time. Many futures exchanges and
boards of trade limit the amount of fluctuation permitted in futures contract
prices during a single trading day. Once the daily limit has been reached in a
particular contract, no trades may be made that day at a price beyond that limit
or trading may be suspended for specified periods during the trading day.
Futures contract prices could move to the limit for several consecutive trading
days with little or no trading, thereby preventing prompt liquidation of futures
positions and potentially subjecting the Fund to substantial losses.

Successful use of futures by the Fund also is subject to the Manager's
ability to predict correctly movements in the direction of the relevant market,
and, to the extent the transaction is entered into for hedging purposes, to
ascertain the appropriate correlation between the transaction being hedged and
the price movements of the futures contract. For example, if the Fund uses
futures to hedge against the possibility of a decline in the market value of
securities held in its portfolio and the prices of such securities instead
increase, the Fund will lose part or all of the benefit of the increased value
of securities which it has hedged because it will have offsetting losses in its
futures positions. Furthermore, if in such circumstances the Fund has
insufficient cash, it may have to sell securities to meet daily variation margin
requirements. The Fund may have to sell such securities at a time when it may be
disadvantageous to do so.

Pursuant to regulations and/or published positions of the Securities and
Exchange Commission (the "SEC"), the Fund may be required to segregate cash or
high quality money market instruments in connection with its commodities
transactions in an amount generally equal to the value of the underlying
commodity. The segregation of such assets will have the effect of limiting the
Fund's ability otherwise to invest those assets.

Specific Futures Transactions. The Fund may purchase and sell stock index
futures contracts. A stock index future obligates the Fund to pay or receive an
amount of cash equal to a fixed dollar amount specified in the futures contract
multiplied by the difference between the settlement price of the contract on the
contract's last trading day and the value of the index based on the stock prices
of the securities that comprise it at the opening of trading in such securities
on the next business day.

The Fund may purchase and sell interest rate futures contracts. An
interest rate future obligates the Fund to purchase or sell an amount of a
specific debt security at a future date at a specific price.

The Fund may purchase and sell currency futures. A foreign currency future
obligates the Fund to purchase or sell an amount of a specific currency at a
future date at a specific price.

GNMAS. The Fund may invest in U.S. Government Securities, which are
obligations of, or guaranteed by, the U.S. Government, its agencies or
instrumentalities. Obligations of the Government National Mortgage Association
(popularly called GNMAs or Ginnie Maes) are mortgage backed securities
representing part ownership of a pool of mortgage loans, in which the timely
payment of principal and interest is guaranteed by the full faith and credit of
the U.S. Government. GNMA may borrow U.S. Treasury funds to the extent needed to
make payments under the guarantee. The Fund may purchase "modified pass-through"
type GNMA Certificates for which principal and interest are guaranteed, rather
than the "straight pass through" Certificates for which such guarantee is not
available. The Fund also may purchase "variable rate" GNMA Certificates and
other types that may be used with GNMA's guarantee.

When mortgages in the pool underlying a GNMA Certificate are prepaid by
mortgagors or when foreclosure occurs, such principal payments are passed
through to the Certificate holders (such as the Fund). Accordingly, the life of
the GNMA Certificate is likely to be substantially shorter than the stated
maturity of the mortgages in the underlying pool, which will have maturities of
up to 30 years. Because of such variation in prepayment rights, it is not
possible to accurately predict the life of a particular GNMA Certificate.

Payments to holders of GNMA Certificates consist of the monthly
distributions of interest and principal, less the GNMA and issuer's fees. The
portion of the monthly payment that represents a return of principal may be
reinvested by a Fund holding the GNMA in then-available GNMA obligations, which
may bear interest at a rate higher or lower than the obligation from which the
payment was received, or in a differing security. The actual yield to be earned
by the holder of a GNMA Certificate is calculated by

3
<PAGE>

dividing such payments by the purchase price paid for the GNMA Certificate
(which may be at a premium or a discount from the face value of the
Certificate). Unpredictable prepayments of principal, however, can greatly
change realized yields. In a period of declining interest rates it is more
likely that mortgages contained in GNMA pools will be prepaid, thus reducing the
effective yield. Moreover, any premium paid on the purchase of a GNMA
Certificate will be lost if the obligation is prepaid. In periods of falling
interest rates, this potential for prepayment may reduce the general upward
price increase of GNMA Certificates that might otherwise occur. As with other
debt instruments, the price of GNMA Certificates is likely to decrease in times
of rising interest rates. Price changes of the GNMA Certificates held by a Fund
have a direct impact on the net asset value per share of the Fund.

When interest rates rise, the value of a GNMA Certificate will generally
decline. Conversely, when rates fall, the GNMA Certificate value may rise,
although not as much as other debt issues, due to the prepayment feature. As a
result, the price per share the shareholder receives on redemption may be more
or less than the price paid for the shares.

High Yield Securities. The Fund may invest in lower-rated fixed income
securities to the extent described in the Prospectus. The lower ratings of
certain securities held by the Fund reflect a greater possibility that adverse
changes in the financial condition of the issuer or economic conditions in
general, or both, or an unanticipated rise in interest rates, may impair the
ability of the issuer to make payments of interest and principal. The inability
(or perceived inability) of issuers to make timely payment of interest and
principal would likely make the values of securities held by the Fund more
volatile and could limit the Fund's ability to sell its securities at prices
approximating the values the Fund had placed on such securities. In the absence
of a liquid trading market for the securities held by it, the Fund may be unable
at times to establish the fair value of such securities. The rating assigned to
a security by Moody's Investors Service, Inc. or S&P (or by any other nationally
recognized securities rating organization) does not reflect an assessment of the
volatility of the security's market value or the liquidity of an investment in
the security. See the Appendix for a description of a security.

Like those of other fixed income securities, the values of lower-rated
securities fluctuate in response to changes in interest rates. Thus, a decrease
in interest rates will generally result in an increase in the value of a Fund's
assets. Conversely, during periods of rising interest rates, the value of a
Fund's assets will generally decline. In addition, the values of such securities
are also affected by changes in general economic conditions and business
conditions affecting the specific industries of their issuers. Changes by
recognized rating services in their ratings of any fixed income security and in
the ability of an issuer to make payments of interest and principal may also
affect the value of these investments. Changes in the value of portfolio
securities generally will not affect cash income derived from such securities,
but will effect a Fund's net asset value. The Fund will not necessarily dispose
of a security when its rating is reduced below its rating at the time of
purchase, although Northstar will monitor the investment to determine whether
its retention will assist in meeting the Fund's investment objective.

Certain securities held by the Fund may permit the issuer at its option to
call, or redeem, its securities. If an issuer were to redeem securities held by
the Fund during a time of declining interest rates, the Fund may not be able to
reinvest the proceeds in securities providing the same investment return as the
securities redeemed.

Index Warrants. The Fund may purchase put warrants and call warrants whose
values vary depending on the change in the value of one or more specified
securities indices ("index warrants"). Index warrants are generally issued by
banks or other financial institutions and give the holder the right, at any time
during the term of the warrant, to receive upon exercise of the warrant a cash
payment from the issuer, based on the value of the underlying index at the time
of exercise. In general, if the value of the underlying index rises above the
exercise price of the index warrant, the holder of a call warrant will be
entitled to receive a cash payment from the issuer upon exercise, based on the
difference between the value of the index and the exercise price of the warrant;
if the value of the underlying index falls, the holder of a put warrant will be
entitled to receive a cash payment from the issuer upon exercise, based on the
difference between the exercise price of the warrant and the value of the index.
The holder of a warrant would not be entitled to any payments from the issuer at
any time when, in the case of a call warrant, the exercise price is greater than
the value of the underlying index, or, in the case of a put warrant, the
exercise price is less than the value of the underlying index. If the Fund were
not to exercise an index warrant prior to its expiration, then the Fund would
lose the amount of the purchase price paid by it for the warrant. The Fund will
normally use index warrants in a manner similar to its use of options on
securities indices. The risks of the Fund's use of index warrants are generally
similar to those relating to its use of index options. Unlike most index
options, however, index warrants are issued in limited amounts and are not
obligations of a regulated clearing agency, but are backed only by the credit of
the bank or other institution that issues the warrant. Also, index warrants
generally have longer terms than index options. Although the Strategic Income
Fund will normally invest only in exchange-listed warrants, index warrants are
not likely to be as liquid as certain index options backed by a recognized
clearing agency. In addition, the terms of index warrants may limit the Fund's
ability to exercise the warrants at such time, or in such quantities, as the
Fund would otherwise wish to do.

International Investing. The Fund may invest up to 25% of its net assets
in foreign securities, of which 10% of its net assets may be invested in foreign
securities that are not listed on a U.S. securities exchange. Investments in
foreign securities involve special risks, including currency fluctuations,
political or economic instability in the country of issue and the possible
imposition of exchange controls or other laws or restrictions. In addition,
securities prices in foreign markets are generally subject to different
economic,

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<PAGE>

financial, political and social factors than are the prices of securities in
U.S. markets. With respect to some foreign countries there may be the
possibility of expropriation or confiscatory taxation, limitations on liquidity
of securities or political or economic developments which could affect the
foreign investments of the Fund. Moreover, securities of foreign issuers
generally will not be registered with the SEC, and such issuers will generally
not be subject to the SEC's reporting requirements. Accordingly, there is likely
to be less publicly available information concerning certain of the foreign
issuers of securities held by the Fund than is available concerning U.S.
companies. Foreign companies are also generally not subject to uniform
accounting, auditing and financial reporting standards or to practices and
requirements comparable to those applicable to U.S. companies. There may also be
less government supervision and regulation of foreign broker-dealers, financial
institutions and listed companies than exists in the U.S. Commission rates in
foreign countries, which are generally fixed rather than subject to negotiation
as in the U.S., are likely to be higher. These factors could make foreign
investments, especially those in developing countries, more volatile. All of the
above issues should be considered before investing in the Fund.

Lending Portfolio Securities. The Fund may lend portfolio securities to
broker-dealers and other financial institutions in an amount up to one-third of
the value of its total assets, provided that such loans are callable at any time
by the Fund and are at all times secured by collateral held by the Fund at least
equal to the market value, determined daily, of the loaned securities. The Fund
will continue to receive any income on the loaned securities, while
simultaneously earning interest on cash collateral (which will be invested in
short-term debt obligations) or a securities lending fee (in the case of
collateral in the form of U.S. Government Securities).

There may be risks of delay in recovery of the loaned securities and, in
some cases, loss of rights in the collateral should the borrower of the
securities fail financially. Loans of portfolio securities will only be made to
firms considered by Northstar to be creditworthy under guidelines adopted by the
Trustees.

Loan Participations and Assignments. The Fund may invest in loan
participations and loan assignments. A Fund's investment in loan participations
typically will result in the Fund having a contractual relationship only with
the Lender and not with the borrower. The Fund will have the right to receive
payments of principal, interest and any fees to which it is entitled only from
the Lender selling the Participations and only upon receipt by the Lender of the
payments from the borrower. In connection with purchasing Participations, the
Fund generally will have no right to enforce compliance by the borrower with the
terms of the loan agreement relating to the Loan, nor any right of set-off
against the borrower, and the Fund may not directly benefit from any collateral
supporting the Loan in which it has purchased the Participation. As a result,
the Fund may be subject to the credit risk of both the borrower and the Lender
that is selling the Participation. In the event of the insolvency of the Lender
selling a Participation, the Fund may be treated as a general creditor of the
Lender and may not benefit from any set-off between the Lender and the borrower.

When a Fund purchases a loan assignment from Lenders, it will acquire
direct rights against the borrowers on the Loan. Because Assignments are
arranged through private negotiations between potential assignees and potential
assignors, however, the rights and obligations acquired by the Fund as the
purchaser of an Assignment may differ from, and be more limited than, those held
by the assigning Lender. Because there is no liquid market for such securities,
the Fund anticipates that such securities could be sold only to a limited number
of institutional investors. The lack of a liquid secondary market may have an
adverse impact on the value of such securities and a Fund's ability to dispose
of particular assignments or participations when necessary to meet redemptions
of Fund shares, to meet the Fund's liquidity needs or when necessary in response
to a specific economic event, such as deterioration in the creditworthiness of
the borrower. The lack of a liquid secondary market for assignments and
participations also may make it more difficult for a Fund to value these
securities for purposes of calculating its net asset value.

Options - In General. The Fund may purchase and write (i.e., sell) call or
put options with respect to specific securities. A call option gives the
purchaser of the option the right to buy, and obligates the writer to sell, the
underlying security or securities at the exercise price at any time during the
option period, or at a specific date. Conversely, a put option gives the
purchaser of the option the right to sell, and obligates the writer to buy, the
underlying security or securities at the exercise price at any time during the
option period.

A covered call option written by a Fund is a call option with respect to
which the Fund owns the underlying security or otherwise covers the transaction
by segregating cash or other securities. A put option written by a Fund is
covered when, among other things, cash or liquid securities having a value equal
to or greater than the exercise price of the option are placed in a segregated
account with the Fund's custodian to fulfill the obligation undertaken. The
principal reason for writing covered call and put options is to realize, through
the receipt of premiums, a greater return than would be realized on the
underlying securities alone. The Fund receives a premium from writing covered
call or put options which it retains whether or not the option is exercised.

There is no assurance that sufficient trading interest to create a liquid
secondary market on a securities exchange will exist for any particular option
or at any particular time, and for some options no such secondary market may
exist. A liquid secondary market in an option may cease to exist for a variety
of reasons. In the past, for example, higher than anticipated trading activity
or order flow, or other unforeseen events, at times have rendered certain of the
clearing facilities inadequate and resulted in the institution of special

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<PAGE>

procedures, such as trading rotations, restrictions on certain types of orders
or trading halts or suspensions in one or more options. There can be no
assurance that similar events, or events that may otherwise interfere with the
timely execution of customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular options. If, as a
covered call option writer, the Fund is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the underlying security upon
exercise or it otherwise covers its position.

Specific Options Transactions. The Fund may purchase and sell call and put
options in respect of specific securities (or groups or "baskets" of specific
securities) or stock indices listed on national securities exchanges or traded
in the over-the-counter market. An option on a stock index is similar to an
option in respect of specific securities, except that settlement does not occur
by delivery of the securities comprising the index. Instead, the option holder
receives an amount of cash if the closing level of the stock index upon which
the option is based is greater than, in the case of a call, or less than, in the
case of a put, the exercise price of the option. Thus, the effectiveness of
purchasing or writing stock index options will depend upon price movements in
the level of the index rather than the price of a particular stock.

The Fund may purchase and sell call and put options on foreign currency.
These options convey the right to buy or sell the underlying currency at a price
which is expected to be lower or higher than the spot price of the currency at
the time the option is exercised or expires.

The Fund may purchase cash-settlement options on interest rate swaps,
interest rate swaps denominated in foreign currency and equity index swaps in
pursuit of its investment objective. Interest rate swaps involve the exchange by
the Fund with another party of their respective commitments to pay or receive
interest (for example, an exchange of floating-rate payments for fixed-rate
payments) denominated in U.S. dollars or foreign currency. Equity index swaps
involve the exchange by the Fund with another party of cash flows based upon the
performance of an index or a portion of an index of securities which usually
includes dividends. A cash-settled option on a swap gives the purchaser the
right, but not the obligation, in return for the premium paid, to receive an
amount of cash equal to the value of the underlying swap as of the exercise
date. These options typically are purchased in privately negotiated transactions
from financial institutions, including securities brokerage firms.

Successful use by the Fund of options will be subject to the ability of
Northstar to predict correctly movements in the prices of individual stocks, the
stock market generally, foreign currencies or interest rates. To the extent the
Manager's predictions are incorrect, the Fund may incur losses.

Privately Issued Collateralized Mortgage-Backed Obligations, Interest
Obligations and Principal Obligations. The Fund may invest up to 5% of its net
assets in Privately Issued Collateralized Mortgage-Backed Obligations ("CMOs"),
Interest Obligations ("IOs") and Principal Obligations ("POs") when Northstar
believes that such investments are consistent with the Fund's investment
objective. Collateralized mortgage obligations or "CMOs" are debt obligations
collateralized by mortgage loans or mortgage pass-through securities. Typically,
privately issued CMOs are collateralized by Ginnie Mae, Fannie Mae or Freddie
Mac Certificates, but also may be collateralized by whole loans or private
pass-throughs (such collateral collectively hereinafter referred to as "Mortgage
Assets"). Privately issued CMOs are per se illiquid. Multi-class pass-through
securities are equity interest in a trust composed of Mortgage Assets. Unless
the context indicates otherwise, all references herein to CMOs include
multi-class pass-through securities. Payments of principal of and interest on
the Mortgage Assets, and any reinvestment income thereon, are the sources of
funds used to pay debt service on the CMOs or make scheduled distributions on
the multi-class pass-through securities.

On a CMO, a series of bonds or certificates is issued in multiple classes.
Each class of CMOs, often referred to as a "tranche", is issued at a specific
fixed or floating coupon rate and has a stated maturity or final distribution
date. Principal prepayments on the Mortgage Assets may cause the CMOs to be
retired substantially earlier than their stated maturities or final distribution
dates. The principal of and interest on the Mortgage Assets may be allocated
among the several classes of a series of a CMO in innumerable ways. The Fund may
also invest in, among others, parallel pay CMOs and Planned Amortization Class
CMOs ("PAC Bonds"). Parallel pay CMOs are structured to provide payments of
principal on each payment date to more than one class. These simultaneous
payments are taken into account in calculating the stated maturity date or final
distribution date of each class, which, as with other CMO structures, must be
retired by its stated maturity date or final distribution date but may be
retired earlier. PAC Bonds generally call for payments of a specified amount of
principal on each payment date.

Stripped mortgage-backed securities ("SMBS") are derivative multi-class
mortgage securities. SMBS may be issued by agencies or instrumentalities of the
U.S. government, or by private originators of, or investors in, mortgage loans,
including savings and loan associations, mortgage banks, commercial banks,
investment banks and special purpose subsidiaries of the foregoing.

SMBS are structured with two or more classes of securities that receive
different proportions of the interest and principal distributions on a pool of
Mortgage Assets. A common type of SMBS will have at least one class receiving
only a small portion of the interest and a larger portion of the principal from
the Mortgage Assets, while the other classes will receive primarily interest and
only a small portion of the principal. In the most extreme case, one class will
receive all of the interest (the interest-only or "IO" class),

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<PAGE>

while the other class will receive all of the principal (the principal-only or
"PO" class). The yield to maturity on an IO class is extremely sensitive to the
rate of principal payments (including prepayments) on the related underlying
Mortgage Assets, and a rapid rate of principal payments may have a material
adverse effect on such security's yield to maturity. If the underlying Mortgage
Assets experience greater than anticipated prepayments of principal, a Fund may
fail to recoup fully its initial investment in these securities. The
determination of whether a particular government-issued IO or PO backed by
fixed-rate mortgage is liquid is made by Northstar under guidelines and
standards established by the Board of Trustees. Such a security may be deemed
liquid if it can be disposed of promptly in the ordinary course of business at a
value reasonably close to that used in the calculation of net asset value per
share.

Repurchase Agreements. Repurchase agreements are agreements under which a
Fund buys a money market instrument and obtains a simultaneous commitment from
the seller to repurchase the instrument at a specified time and at an agreed
upon yield. Northstar will use standards set by the Fund's Trustees in reviewing
the creditworthiness of parties to repurchase agreements with such Fund. In
addition, no more than an aggregate of 15% of the Fund's net assets, at the time
of investment, will be invested in illiquid investments, including repurchase
agreements having maturities longer than seven days. In the event of failure of
the executing bank or broker-dealer, the Fund could experience some delay in
obtaining direct ownership of the underlying collateral and might incur a loss
if the value of the security should decline, as well as costs in disposing of
the security.

As an alternative to using repurchase agreements, the Fund may, from time
to time, invest up to 5% of its assets in money market investment companies
sponsored by a third party for short-term liquidity purposes. Such investments
are subject to the non-fundamental investment limitations described herein.

Reverse Repurchase Agreements and Dollar Roll Agreements. The Fund may
enter into reverse repurchase agreements and dollar roll agreements. Under a
reverse repurchase agreement or a dollar roll agreement, a Fund sells securities
and agrees to repurchase them, or substantially similar securities in the case
of a dollar roll agreement, at a mutually agreed upon date and price. At the
time the Fund enters into a reverse repurchase or dollar roll agreement, it will
establish and maintain a segregated account with its custodian, containing cash,
U.S. Government Securities, or other liquid assets from its portfolio, having a
value not less than the repurchase price (including accrued interest). The Fund
does not account for dollar rolls as a borrowing.

These agreements may involve the risk that the market value of the
securities to be repurchased by the Fund may decline below the price at which
the Fund is obligated to repurchase. Also, in the event the buyer of securities
under a reverse repurchase agreement or a dollar roll agreement files for
bankruptcy or becomes insolvent, such buyer or its trustee or receiver may
receive an extension of time to determine whether to enforce the Fund's
obligation to repurchase the securities, and the Fund's use of the proceeds of
the reverse repurchase agreement or the dollar roll agreement may effectively be
restricted pending such a decision.

Short Sales. The Fund may make short sales "against the box." A short-sale
is a transaction in which a party sells a security it does not own in
anticipation of decline in the market value of that security. A short sale is
"against the box" to the extent that the Fund contemporaneously owns or has the
right to obtain securities identical to those sold short. When the Fund makes a
short sale, it must borrow the security sold short and deliver it to the
broker-dealer through which it made the short sale as collateral for its
obligation to deliver the security upon conclusion of the sale. The Fund may
have to pay a fee to borrow particular securities, and is often obligated to pay
over any accrued interest on such borrowed securities.

Small and Medium Companies. The Fund may invest a substantial portion of
its assets in small and medium companies. While small and medium companies
generally have the potential for rapid growth, investments in small and medium
companies often involve greater risks than investments in larger, more
established companies because small and medium companies may lack the management
experience, financial resources, product diversification, and competitive
strengths of larger companies. In addition, in many instances the securities of
small and medium companies are traded only OTC or on a regional securities
exchange, and the frequency and volume of their trading is substantially less
than is typical of larger companies. Therefore, the securities of small and
medium companies may be subject to greater and more abrupt price fluctuations.
When making large sales, the Fund may have to sell portfolio holdings at
discounts from quoted prices or may have to make a series of small sales over an
extended period of time due to the trading volume of small and medium company
securities. Investors should be aware that, based on the foregoing factors, an
investment in the Fund may be subject to greater price fluctuations than an
investment in a Fund that invests primarily in larger, more established
companies. Northstar's research efforts may also play a greater role in
selecting securities for the Fund than in a Fund that invests in larger, more
established companies.

Zero Coupon Securities. Zero coupon securities are fixed income securities
that have been stripped of their unmatured interest coupons. Zero coupon
securities are sold at a (usually substantial) discount and redeemed at face
value at their maturity date without interim cash payments of interest or
principal. The amount of this discount is accredited over the life of the
security, and the accretion constitutes the income earned on the security for
both accounting and tax purposes. Because of these features, the market prices
of zero coupon securities are generally more volatile than the market prices of
securities that have a similar maturity but that pay interest periodically. Zero
coupon securities are likely to respond to a greater degree to interest rate
changes than are non-zero coupon securities with similar maturity and credit
qualities. The Fund may invest a portion of its total assets in "zero coupon"
Treasury

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<PAGE>

securities, which consist of Treasury bills or stripped interest or principal
components of U.S. Treasury bonds or notes.

Zero coupon Treasury bonds or notes consist of stripped interest or
principal components held in STRIPS form issued through the U.S. Treasury's
STRIPS program, which permits the beneficial ownership of the component to be
recorded directly in the Treasury book-entry system. The Fund may also purchase
custodial receipts evidencing beneficial ownership of direct interests in
component parts of U.S. Treasury bonds or notes held by a bank in a custodian or
trust account.

PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION

Northstar places orders for the purchase and sale of the Fund's
securities, supervises their execution and negotiates brokerage commissions on
behalf of the Fund. It is the practice of Northstar to seek the best prices and
best execution of orders and to negotiate brokerage commissions that in the
Adviser's opinion, are reasonable in relation to the value of the brokerage and
research services provided by the executing broker. Northstar seeks to obtain
fair commission rates from brokers. If the execution is satisfactory and if the
requested rate charged by a broker approximates rates currently being quoted by
the other brokers selected by Northstar, the rate is generally deemed by
Northstar to be reasonable. Some brokers may be paid higher rates of commission
if all or a portion of the securities involved in the transaction are positioned
by the broker, if the broker believes it has brought the Fund an unusually
favorable trading opportunity, or if the broker's research services have special
value and payment of such commissions is authorized by Northstar after the
transaction has been consummated. If Northstar more than occasionally differs
with the broker's appraisal of opportunity or value, the broker would not be
selected to execute trades in the future. Northstar believes that the Fund
benefits with a securities industry comprised of many and diverse firms and that
the long term interest of shareholders of the Fund is best served by its
brokerage policies that include paying a fair commission, rather than seeking to
exploit its leverage to force the lowest possible commission rate.
Over-the-counter purchases and sales are transacted directly with market-makers,
except in those circumstances where, in the opinion of Northstar, better prices
and execution are available elsewhere.

Section 28(e) of the Securities Exchange Act of 1934 ("Section 28(e)")
permits an investment adviser, under certain circumstances to cause an account
to pay a broker or dealer a commission for effecting a transaction in excess of
the amount of commission another broker or dealer would have charged for
effecting the transaction in recognition of the value of the brokerage and
research services provided by the broker or dealer. Brokerage and research
services include (1) furnishing advice as to the value of securities, the
advisability of investing in, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities; (2)
furnishing analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy, and the performance of
accounts; and (3) effecting securities transactions and performing functions
incidental thereto (such as clearance, settlement, and custody).

Northstar has informal arrangements with various brokers whereby, in
consideration for providing research services and subject to Section 28(e),
Northstar allocates brokerage to those firms, provided that the value of any
research and brokerage services was reasonable in relationship to the amount of
commission paid and was subject to best execution. In no case will Northstar
make binding commitments as to the level of brokerage commissions it will
allocate to a broker, nor will it commit to pay cash if any informal targets are
not met.

In general terms, the nature of research services provided by brokers
encompasses statistical and background information, and forecasts and
interpretations with respect to U.S. and foreign economies, U.S. and foreign
money markets, fixed income markets and equity markets, specific industry groups
and individual issues. Research services will vary from firm to firm, with
broadest coverage generally from the large full-line firms. Smaller firms, in
general, tend to provide information and interpretations on a smaller scale,
frequently with a regional emphasis. In addition, several firms monitor federal,
state, local and foreign political developments; many of the brokers also
provide access to outside consultants. The outside research assistance is
particularly useful to the Adviser's staff, since the brokers, as a group, tend
to monitor a broader universe of securities and other matters than the Adviser's
staff can follow. In addition, the outside research provides Northstar with a
diverse perspective on financial markets. Research and investment information is
provided by these and other brokers at no cost to Northstar and is available for
the benefit of other accounts advised by Northstar and its affiliates; and not
all of this information will be used in connection with the Fund. While this
information may be useful in varying degrees and may tend to reduce the
Adviser's expenses, it is not possible to estimate its value, and, in the
opinion of Northstar, it does not reduce the Adviser's expenses by a
determinable amount. The extent to which Northstar makes use of statistical,
research and other services furnished by brokers is considered by Northstar in
the allocation of brokerage business, but there is no formula by which such
business is allocated. Northstar does so in accordance with its judgment of the
best interests of the Fund and its shareholders.

Purchases and sales of fixed income securities will usually be principal
transactions. Such securities often will be purchased or sold from or to dealers
serving as market makers for the securities at a net price. The Fund will also
purchase such securities in underwritten offerings and will, on occasion,
purchase securities directly from the issuer. Generally, fixed income securities
are traded on a net basis and do not involve brokerage commissions. The cost of
executing fixed income securities transactions consists

8
<PAGE>

primarily of dealer spreads and underwriting commissions.

In purchasing and selling fixed income securities, it is the policy of the
Fund to obtain the best results, while taking into account the dealer's general
execution and operational facilities, the type of transaction involved and other
factors, such as the dealer's risk in positioning the securities involved. While
Northstar generally seeks reasonably competitive spreads or commissions, the
Fund will not necessarily pay the lowest spread or commission available.

The Fund may, under circumstances in which two or more dealers are in a
position to offer comparable results, give preference to a dealer that has
provided statistical or other research services to the Fund. By allocating
transactions in this manner, Northstar is able to supplement its research and
analysis with the views and information of other securities firms.

A change in securities held in the portfolio of the Fund is known as
"Portfolio Turnover" and may involve the payment by the Fund of dealer mark-ups
or brokerage or underwriting commissions and other transaction costs on the sale
of securities, as well as on the reinvestment of the proceeds in other
securities. Portfolio turnover rate for a fiscal year is the percentage
determined by dividing the lesser of the cost of purchases or proceeds from
sales of portfolio securities by the average of the value of portfolio
securities during such year, all excluding securities whose maturities at
acquistion were one year or less. A 100% annual turnover rate would occur, for
example, if all the securities in the portfolio were replaced once in a period
of one year. The Fund cannot accurately predict its portfolio turnover rate, but
Northstar anticipates that the Fund's rate will exceed 150% under normal market
conditions. The Fund's portfolio turnover rate may be higher than that described
above if the Fund finds it necessary to significantly change its portfolio to
adopt a temporary defensive position or respond to economic or market events. A
high turnover rate would increase commission expenses and may involve
realization of gains that would be taxable to shareholders.

The placement of portfolio transactions with broker-dealers who sell
shares of the Fund is subject to rules adopted by the National Association of
Securities Dealers, Inc. ("NASD").

SERVICES OF NORTHSTAR AND THE ADMINISTRATOR

Pursuant to an Investment Advisory Agreement with the Fund, Northstar
Investment Management Corporation acts as the Investment Adviser to the Fund. In
this capacity, Northstar, subject to the authority of the Trustees of the
Northstar Equity Trust (the "Trust") is responsible for furnishing continuous
investment supervision to the Fund and is responsible for the management of the
Fund's portfolio.

Northstar is an indirect, wholly-owned subsidiary of ReliaStar Financial
Corp. ("ReliaStar"). ReliaStar is a publicly traded holding company whose
subsidiaries specialize in the life insurance business. Through ReliaStar Life
Insurance Company ("ReliaStar Life") and other subsidiaries, ReliaStar issues
and distributes individual life insurance and annuities, group life and health
insurance and life and health reinsurance, and provides related investment
management services. The address of Northstar is 300 First Stamford Place,
Stamford, Connecticut 06902. The address of ReliaStar is 20 Washington Avenue
South, Minneapolis, Minnesota 55401.

Northstar charges a fee under the Investment Advisory Agreement to the
Fund at an annual rate of 1.00% of the Fund's average daily net assets. This fee
is accrued daily and payable monthly.

The Investment Advisory Agreement for the Fund was originally approved by
the Trustees of the Trust on July 29, 1998, and by the sole Shareholder of the
Northstar Mid-Cap Growth Fund on July 31, 1998. The Investment Advisory
Agreement will continue in effect for a period of two years and annually
thereafter if specifically approved annually by (a) the Trustees, acting
separately on behalf of the Fund, including a majority of the Disinterested
Trustees, or (b) a majority of the outstanding voting securities of the Fund as
defined in the 1940 Act.

The Fund's Investment Advisory Agreement may be terminated, without
penalty and at any time, by a similar vote upon not more than 60 days nor less
than 30 days written notice by Northstar, the Trustees, or a majority of the
outstanding voting securities of the Fund as defined in the 1940 Act. The
agreement will automatically terminate in the event of its assignment, as
defined in Section 2(a)(4) of the 1940 Act.

Northstar Administrators Corporation serves as administrator for the Fund,
pursuant to an Administrative Services Agreement with the Fund. Subject to the
supervision of the Board of Trustees, the Administrator provides the overall
business management and administrative services necessary to the proper conduct
of the Fund's business, except for those services performed by Northstar under
the Investment Advisory Agreement, the custodian for the Fund under the
Custodian Agreement, the transfer agent for the Fund under the Transfer Agency
Agreement, and such other service providers as may be retained by the Fund from
time to time. The Administrator acts as liaison among these service providers to
the Fund. The Administrator is also responsible for ensuring that the Fund
operates in compliance with applicable legal requirements and for monitoring
Northstar for compliance with requirements under applicable law and with the
investment policies and restrictions of the Fund. The Administrator is an
affiliate of Northstar. The

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<PAGE>

address of the Administrator is: 300 First Stamford Place, Stamford,
Connecticut 06902.

The Administrative Services Agreement was approved by the Trustees of the
Trust on behalf of the Fund on July 29, 1998, and will continue in effect for a
period of two years and annually thereafter if such continuance is approved
annually by a majority of the Trustees of the Trust.

The Administrator's fee is accrued daily against the value of the Fund's
net assets and is payable by the Fund monthly at an annual rate of 0.10% of the
Fund's average daily net assets. In addition, the Administrator charges an
annual account fee of $5.00 for each account of beneficial owners of shares of
the Fund for providing certain shareholder services and assisting broker-dealer
shareholder accounts.

NET ASSET VALUE

Equity securities are valued at the last sale price on the exchange or in
the principal OTC market in which such securities are being valued, or lacking
any sales, at the last available bid price. Prices of long-term debt securities
are valued on the basis of last reported sales price, or if no sales are
reported, the value is determined based upon the mean of representative quoted
bid or asked prices for such securities obtained from a quotation reporting
system or from established market makers, or at prices for securities of
comparable maturity, quality and type. Securities (including OTC options) for
which market quotations are not readily available and other assets are valued at
their fair value as determined by or under the direction of the Trustees. Such
fair value may be determined by various methods, including utilizing information
furnished by pricing services that determine calculations for such securities
using methods based, among other things, upon market transactions for comparable
securities and various relationships between securities that are generally
recognized as relevant.

The net asset value of the Fund's shares fluctuates and is determined
separately for each class as of the close of regular trading on the New York
Stock Exchange (usually 4:00 p.m. Eastern Time), on each business day that the
Exchange is open. Net asset value per share is computed by determining the value
of the Fund's assets (securities held plus cash and other assets, including
dividend and interest accrued but not received) less all liabilities of the Fund
(including accrued expenses other than class specific expenses), and dividing
the result by the total number of shares outstanding at such time. The specific
expenses borne by each class of shares will be deducted from that class and will
result in different net asset values and dividends. The net asset value per
share of the Class B and Class C shares of the Fund will generally be lower than
that of the Class A shares because of the higher class specific expenses borne
by each of the Class B and Class C shares.

Under normal market conditions, daily prices for securities are obtained
from independent pricing services, determined by them in accordance with the
registration statement for the Fund. Securities are valued at market value or,
if a market quotation is not readily available, at their fair value, determined
in good faith under procedures established by and under the supervision of the
Trustees. Money market instruments maturing within 60 days are valued using the
amortized cost method of valuation. This involves valuing a security at cost on
the date of acquisition and thereafter assuming a constant accretion of a
discount or amortization of a premium to maturity, regardless of the impact of
fluctuating interest rates on the market value of the instrument. While this
method provides certainty in valuation, it may result in periods during which
value, as determined by amortized cost, is higher or lower than the price the
Fund would receive if it sold the instrument. See "How Net Asset Value is
Determined" in the Prospectus.

PURCHASES AND REDEMPTIONS

Shares issued pursuant to the automatic reinvestment of income dividends
or capital gains distributions are not subject to a front-end or contingent
deferred sales load. There is no sales charge for qualified persons. "Qualified
Persons" are the following (a) active or retired Trustees, Directors, Officers,
Partners or Employees (including immediate family) of (i) Northstar or any of
its affiliated companies, (ii) the Fund or any Northstar affiliated investment
company or (iii) dealers having a sales agreement with the Underwriter, (b)
trustees or custodians of any qualified retirement plan or IRA established for
the benefit of a person in (a) above; (c) dealers, brokers or registered
investment advisers that have entered into an agreement with the Underwriter
providing for the use of shares of the Fund in particular investment products
such as "wrap accounts" or other similar managed accounts for the benefit of the
clients of such brokers, dealers and registered investment advisers, and (d)
pension, profit sharing or other benefit plans created pursuant to a plan
qualified under Section 401 of the Code or plans under Section 457 of the Code,
provided that such shares are purchased by an employer sponsored plan with at
least 50 eligible employees and (e) service providers of (i) Northstar or any of
its affiliated companies or (ii) the Fund or any Northstar affiliated investment
company and (f) Brandes employees, officers and partners. Class A shares of the
Fund may be purchased at net asset value, through a dealer, where the amount
invested represents redemption proceeds from another open-end fund sold with a
sales load and the same or similar investment objective, and provided the
following conditions are met: such redemption occurred no more than 60 days
prior to the purchase of shares of the Fund, the redeemed shares were held for
at least six months prior to redemption, and the proceeds of the redemption are
sent directly to Northstar or its agent, or maintained in cash or a money market
fund. No commissions will be paid to dealers in connection with such

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<PAGE>

purchases. There is also no initial sales charge for "Purchasers" (defined
below) if the initial amount invested in the Fund is at least $1,000,000 or the
Purchaser signs a $1,000,000 Letter of Intent, as hereinafter defined.

Reduced Sales Charges on Class A Shares. Investors choosing the initial
sales alternative may under certain circumstances be entitled to pay reduced
sales charges. The sales charge varies with the size of the purchase and reduced
charges apply to the aggregate of purchases of the Fund made at one time by any
"Purchaser," which term includes (i) an individual and his/her spouse and their
children under the age of 21, (ii) a trustee or fiduciary purchasing for a
single trust, estate or single fiduciary account (including IRAs, pension,
profit-sharing or other employee benefit trusts created pursuant to a plan
qualified under Section 401 of the Code, a Simplified Employee Pension ("SEP"),
Salary Reduction and other Elective Simplified Employee Pension Accounts
("SARSEP")) and 403(b) and 457 plans, although more than one beneficiary or
participant is involved; and (iii) any other organized group of persons, whether
incorporated or not, provided the organization has been in existence for at
least six months and has some purpose other than the purchase at a discount of
redeemable securities of a registered investment company. The circumstances
under which "Purchasers" may pay reduced sales charges are described in the
Prospectus.

Redemptions. The right to redeem shares may be suspended and payment
therefore postponed during periods when the New York Stock Exchange is closed,
other than customary weekend and holiday closings, or, if permitted by rules of
the SEC, during periods when trading on the Exchange is restricted, or during
any emergency that makes it impracticable for the Fund to dispose of its
securities or to determine fairly the value of its net assets or during any
other period permitted by order of the SEC for the protection of investors.
Furthermore, the Transfer Agent will not mail redemption proceeds until checks
received for shares purchased have cleared, but payment will be forwarded
immediately upon the funds becoming available. Class B and Class C shareholders
will be subject to the applicable deferred sales charge, if any, for their
shares at the time of redemption.

Exchanges. The following conditions must be met for all exchanges among
the Fund, other Northstar funds and the Cash Management Fund and the Money
Market Portfolio: (i) the shares that will be acquired in the exchange (the
"Acquired Shares") are available for sale in the shareholder's state of
residence; (ii) the Acquired shares will be registered to the same shareholder
account as the shares to be surrendered (the "Exchanged Shares"); (iii) the
Exchanged Shares must have been held in the shareholder's account for at least
30 days prior to the exchange; (iv) except for exchanges into the Cash
Management Fund, the account value of the Fund whose shares are to be acquired
must equal or exceed the minimum initial investment amount required by that Fund
after the exchange is implemented; and (v) a properly executed exchange request
has been received by the Transfer Agent.

The Fund reserves the right to delay the actual purchase of the Acquired
Shares for up to five business days if it determines that it would be
disadvantaged by an immediate transfer of proceeds from the redemption of
Exchanged Shares. Normally, however, the redemption of Exchanged Shares and the
purchase of Acquired Shares will take place on the day that the exchange request
is received in proper form. The Fund reserves the right to terminate or modify
its exchange privileges at any time upon prominent notice to shareholders. Such
notice will be given at least 60 days in advance. It is the policy of Northstar
to discourage and prevent frequent trading by shareholders among the Funds in
response to market fluctuations. Accordingly, in order to maintain a stable
asset base in each Fund and to reduce administrative expenses borne by each
Fund, Northstar generally restricts shareholders to a maximum of six exchanges
across the Northstar Fund complex each calendar year. If a shareholder exceeds
this limit, future exchange requests may be denied.

Conversion Feature. Class B shares of the Fund will automatically convert
to Class A shares without a sales charge at the relative net asset values of
each of the classes after eight years from the acquisition of the Class B
shares, and as a result, will thereafter be subject to the lower distribution
fee (but same service fee) under the Class A Rule 12b-1 plan for the Fund.

DIVIDENDS, DISTRIBUTIONS AND TAXES

The Fund intends to qualify each year as a regulated investment company
under Subchapter M of the Internal Revenue Code (the "Code"). In order to so
qualify, the Fund must, among other things, (i) derive each taxable year at
least 90% of its gross income from dividends, interest, payments with respect to
certain securities loans, gains from the sale of securities or foreign
currencies, or other income (including but not limited to gains from options,
futures or forward contracts) derived with respect to its business of investing
in stock, securities or currencies; (ii) derive less than 30% of its gross
income each taxable year from the sale or other disposition of certain assets,
including securities, held for less than three months (the "30% Limitation");
and (iii) at the end of each quarter of the taxable year maintain at least 50%
of the value of its total assets in cash, government securities, securities of
other regulated investment companies, and other securities of issuers that
represent, with respect to each issuer, no more than 5% the value of the Fund's
total assets and 10% of the outstanding voting securities of such issuer, and
with no more than 25% of its assets invested in the securities (other than those
of the U.S. Government or other regulated investment companies) of any one
issuer or of two or more issuers that the Fund controls and that are engaged in
the same, similar or related trades and businesses. As a regulated investment
company, the Fund generally will not be subject to federal income tax on its
income and gains that it distributes to shareholders, if at least 90% of its
investment company taxable income (which includes dividends, interest and the
excess of any short-term capital gains

11
<PAGE>

over long-term capital losses) for the taxable year is distributed.

An excise tax at the rate of 4% will be imposed on the excess, if any, of
the Fund's "required distribution" over actual distributions in any calendar
year. Generally, the "required distribution" is 98% of a Fund's ordinary income
for the calendar year plus 98% of its capital gain net income recognized during
the one-year period ending on October 31 plus undistributed amounts from prior
years. The Fund intends to make distributions sufficient to avoid imposition of
the excise tax. A distribution will be treated as paid on December 31 of the
current calendar year if it is declared by the Fund during October, November or
December of the year with a record date in such a month and paid by the Fund
during January of the following year. Such distributions will be taxable as if
received on December 31 in the year they are declared by the Fund, rather than
the year in which they are received.

The taxation of equity options and OTC options on debt securities is
governed by Code section 1234. Pursuant to Code section 1234, the premium
received by a Fund for selling a put or call option is not included in income at
the time of receipt. If the option expires, the premium is a short-term capital
gain to the Fund. If the Fund enters into a closing transaction, the difference
between the amount paid to close out its position and the premium received is a
short-term capital gain or loss. If a call option written by a Fund is
exercised, thereby requiring the Fund to sell the underlying security, the
premium will increase the amount realized upon the sale of such security and any
resulting gain or loss will be a capital gain or loss, and will be long-term or
short-term depending upon the holding period of the security. With respect to a
put or call option that is purchased by a Fund, if the option is sold, any
resulting gain or loss will be a capital gain or loss, and will be long-term or
short-term, depending upon the holding period of the option. If the option
expires, the resulting loss is a capital loss and is long-term or short-term,
depending upon the holding period of the option. If the option is exercised, the
cost of the option, in the case of a call option, is added to the basis of the
purchased security and, in the case of a put option, reduces the amount realized
on the underlying security in determining the gain or loss.

Certain options, futures contracts and forward contracts in which the Fund
may invest are "section 1256 contracts." Gains or losses on section 1256
contracts are generally considered 60% long-term and 40% short-term capital
gains or losses ("60/40 gains or losses"); however, foreign currency gains or
losses (as discussed below) arising from certain section 1256 contracts may be
treated as ordinary income or loss. Also, section 1256 contracts held by a Fund
at the end of each taxable year (and, generally, for purposes of the 4% excise
tax, on October 31 of each year) are treated as sold on such date at fair market
value, resulting in unrealized gains or losses being treated as though they were
realized.

Hedging transactions undertaken by the Fund may result in straddles for
U.S. federal income tax purposes. The straddle rules may accelerate income to a
Fund, defer losses to a Fund, and affect the character of gains (or losses)
realized by a Fund. Hedging transactions may increase the amount of short-term
capital gains realized by a Fund that is taxed as ordinary income when
distributed to shareholders. A Fund may make one or more of the various
elections available under the Code with respect to hedging transactions. If the
Fund makes any of the elections, the amount, character and timing of the
recognition of gains or losses from the affected positions will be determined
under rules that vary according to the elections made.

Under the Code, gains or losses attributable to fluctuations in exchange
rates that occur between the time a Fund accrues interest or other receivables,
or accrues expenses or other liabilities, denominated in a foreign currency and
the time the Fund actually collects such receivables, or pays such liabilities,
generally are treated as ordinary income or ordinary loss. Similarly, on
disposition of debt securities denominated in a foreign currency and certain
options, futures and forward contracts, gains or losses attributable to
fluctuations in the value of foreign currency between the date of acquisition of
the security or contract and the date of disposition also are treated as
ordinary gain or loss. These gains or losses, referred to under the Code as
"section 988" gains or losses, may increase or decrease the amount of a Fund's
investment company taxable income to be distributed to its shareholders as
ordinary income.

A Fund will not realize a gain or loss on a short sale of a security until
it closes the transaction by delivering the borrowed security to the lender. All
or a portion of any gain arising from a short sale may be treated as short-term
capital gain, regardless of the period for which the Fund held the security used
to close the short sale. In addition, the Fund's holding period for any security
that is substantially identical to that which is sold short may be reduced or
eliminated as a result of the short sale.

Investments by the Fund in zero coupon securities will result in income to
the Fund equal to a portion of the excess of the face value of the securities
over their issue price (the "original issue discount") each year that the
securities are held, even though the Fund receives no cash interest payments.
This income is included in determining the amount of income that the Fund must
distribute to maintain its status as a regulated investment company and to avoid
the payment of federal income tax and the 4% excise tax. If the Fund invests in
certain high yield original issue discount obligations issued by corporations, a
portion of the original issue discount accruing on the obligations may be
eligible for the deduction for dividends received by corporations. In such
event, a portion of the dividends of investment company taxable income received
from the Fund by its corporate shareholders may be eligible for this deduction.

Gains derived by the Fund from the disposition of any market discount
bonds (I.E., bonds purchased other than at original issue, where the face value
of the bonds exceeds their purchase price) held by the Fund will be taxed as
ordinary income to the extent of the

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<PAGE>

accrued market discount on the bonds, unless the Fund elects to include the
market discount in income as it accrues.

If the Fund invests in stock of certain foreign corporations that generate
largely passive investment-type income, or which hold a significant percentage
of assets that generate such income (referred to as "passive foreign investment
companies" or "PFICs"), these investments would be subject to special tax rules
designed to prevent deferral of U.S. taxation of the Fund's share of the PFIC's
earnings. In the absence of certain elections to report these earnings on a
current basis, regardless of whether the Fund actually receives any
distributions from the PFIC, investors in the Fund would be required to report
certain "excess distributions" from, and any gains from the disposition of stock
of, the PFIC as ordinary income. This ordinary income would be allocated ratably
to the Fund's holding period for the stock. Any amounts allocated to prior years
would be taxable at the highest rate of tax applicable in that year, increased
by an interest charge determined as though the amounts were underpayments of
tax.

Income received by the Fund from sources within foreign countries may be
subject to withholding and other taxes imposed by such countries. If more than
50% of the value of the Fund's total assets at the close of its taxable year
consists of securities of foreign corporations, the Fund will be eligible and
may elect to "pass through" to the Fund's shareholders the amount of foreign
taxes paid by the Fund. Pursuant to this election, a shareholder will be
required to include in gross income (in addition to dividends actually received)
its pro rata share of the foreign taxes paid by the Fund, and may be entitled
either to deduct its pro rata share of the foreign taxes in computing its
taxable income or to use the amount as a foreign tax credit against its U.S.
Federal income tax liability, subject to limitations. Each shareholder will be
notified within 60 days after the close of the Fund's taxable year whether the
foreign taxes paid by the Fund will "pass through" for that year. If the Fund is
not eligible to make the election to "pass through" to its shareholders its
foreign taxes, the foreign taxes it pays will reduce its investment company
taxable income and distributions by the Fund will be treated as U.S. source
income.

Generally, a credit for foreign taxes is subject to the limitation that it
may not exceed the shareholder's U.S. tax attributable to its foreign source
taxable income. For this purpose, if the pass-through election is made, the
source of the Fund's income flows through to its shareholders. With respect to
the Fund, gains from the sale of securities will be treated as derived from U.S.
sources and certain currency fluctuation gains, including fluctuation gains from
foreign currency denominated debt securities, receivables and payables, and
options, futures and forward transactions, will be treated as ordinary income
derived from U.S. sources. The limitation on the foreign tax credit is applied
separately to foreign source passive income (as defined for purposes of the
foreign tax credit), including the foreign source passive income passed through
by the Fund.

The current position of the Internal Revenue Service (the "IRS") generally
is to treat a regulated investment company as owning its proportionate share of
the income and assets of any partnership in which it is a partner, in applying
the 90% qualifying income requirement, the 30% Limitation and the asset
diversification requirements that, as described above, the Fund must satisfy to
qualify as a regulated investment company under the Code. These requirements may
limit the extent to which the Fund may invest in limited partnerships,
especially in the case of limited partnerships that do not primarily invest in a
diversified portfolio of stocks and securities.

Dividends paid out of the Fund's investment company taxable income will be
taxable to a U.S. shareholder as ordinary income. If a portion of the Fund's
income consists of dividends paid by U.S. corporations, a portion of the
dividends paid by the Fund may be eligible for the corporate dividends-received
deduction. Distributions of net capital gains (the excess of net long-term
capital gains over net short-term capital losses), if any, designated as capital
gain dividends are taxable as long-term capital gains, regardless of how long
the shareholder has held the Fund's shares, and are not eligible for the
dividends-received deduction. Shareholders receiving distributions in the form
of additional shares, rather than cash, generally will have a cost basis in each
such share equal to the net asset value of a share of the Fund on the
reinvestment date. A distribution of an amount in excess of the Fund's current
and accumulated earnings and profits will be treated by a shareholder as a
return of capital that is applied against and reduces the shareholder's basis in
his or her shares. To the extent that the amount of any such distribution
exceeds the shareholder's basis in his or her shares, the excess will be treated
by the shareholder as a gain from a sale or exchange of the shares. Shareholders
will be notified annually as to the U.S. federal tax status of distributions,
and shareholders receiving distributions in the form of additional shares will
receive a report as to the net asset value of those shares.

Upon the sale or other disposition of shares of the Fund, a shareholder
may realize a capital gain or loss that will be long-term or short-term,
generally depending upon the shareholder's holding period for the shares. Any
loss realized on a sale or exchange will be disallowed to the extent the shares
disposed of are replaced within a period of 61 days beginning 30 days before and
ending 30 days after disposition of the shares. In such a case, the basis of the
shares acquired will be adjusted to reflect the disallowed loss. Any loss
realized by a shareholder on a disposition of Fund shares held by the
shareholder for six months or less will be treated as a long-term capital loss
to the extent of any distributions of net capital gains received by the
shareholder with respect to such shares.

Under certain circumstances, the sales charge incurred in acquiring shares
of a Fund may not be taken into account in determining the gain or loss on the
disposition of those shares. This rule applies where shares of a Fund originally
acquired with a sales charge are disposed of within 90 days after the date on
which they were acquired and new shares of a regulated investment

13
<PAGE>

company are acquired without a sales charge or at a reduced sales charge. In
that case, the gain or loss realized on the disposition will be determined by
excluding from the tax basis of the shares all or a portion of the sales charge
incurred in acquiring those shares. This exclusion applies to the extent that
the otherwise applicable sales charge with respect to the newly acquired shares
is reduced as a result of the shareholder having incurred a sales charge paid
for the new shares. This rule may be applied to successive acquisitions of
shares of stock.

Distributions by a Fund reduce the net asset value of that Fund's shares.
Should a distribution reduce the net asset value of a share below a
shareholder's cost for the share, such a distribution nevertheless generally
would be taxable to the shareholder as ordinary income or long-term capital
gains, even though, from an investment standpoint, it may constitute a partial
return of capital. In particular, investors should be careful to consider the
tax implications of buying shares just prior to a distribution by a Fund. The
price of shares purchased at that time may include the amount of the forthcoming
distribution, but the distribution generally would be taxable to them.

Some shareholders may be subject to withholding of Federal income tax on
dividends and redemption payments from a Fund ("backup withholding") at the rate
of 31%. Corporate shareholders and certain other shareholders specified in the
Code generally are exempt from such backup withholding. Generally, shareholders
subject to backup withholding will be (i) those for whom a certified taxpayer
identification number is not on file with a Fund, (ii) those about whom
notification has been received (either by the shareholder or by a Fund) from the
IRS that they are subject to backup withholding or (iii) those who, to a Fund's
knowledge, have furnished an incorrect taxpayer identification number.
Generally, to avoid backup withholding, an investor must, at the time an account
is opened, certify under penalties of perjury that the taxpayer identification
number furnished is correct and that he or she is not subject to backup
withholding.

The foregoing discussion relates solely to U.S. Federal income tax law.
Dividends and distributions also may be subject to state, local and foreign
taxes. Dividends paid by the Fund from income attributable to interest on
obligations of the U.S. Government and certain of its agencies and
instrumentalities may be exempt from state and local taxes in certain states.
Shareholders should consult their tax advisers regarding the possible exclusion
of this portion of their dividends for state and local tax purposes. Non-U.S.
investors also should consult their tax advisers concerning the tax consequences
of ownership of shares of the Fund, including the possibility that distributions
may be subject to a 30% U.S. withholding tax (or a reduced rate of withholding
provided by treaty).

Shareholders of Class A, Class B and Class C shares may direct that income
dividends and capital gain distributions be paid to them through various options
listed in the "How the Fund Pays Distributions -- Distribution Options" section
of the Fund's current Prospectus. If a shareholder selects either of two such
options (that: (a) income dividends be paid in cash and capital gain
distributions be paid in additional shares of the same class of the Fund at net
asset value; or (b) income dividends and capital gain distributions both be paid
in cash), and the dividend/distribution checks cannot be delivered, or, if such
checks remain uncashed for six months, the Fund reserves the right to reinvest
the dividend or distribution in the shareholder's account at the then-current
net asset value and to convert the shareholder's election to automatic
reinvestment in shares of the Fund from which the distributions were made. The
Fund has received from the IRS, rulings to the effect that (i) the
implementation of the multiple class purchase arrangement will not result in the
Fund's dividends or distributions constituting "preferential dividends" under
the Code, and (ii) that any conversion feature associated with a class of shares
does not constitute a taxable event under federal income tax law.

UNDERWRITER AND DISTRIBUTION SERVICES

Pursuant to an Underwriting Agreement, Northstar Distributors, Inc. is the
Underwriter for the Fund and as such conducts a continuous offering pursuant to
a "best efforts" arrangement requiring it to take and pay for only such
securities as may be sold to the public. The Underwriter is an affiliate of the
Adviser and the Administrator.

The Underwriting Agreement may be terminated at any time on not more than 60
days written notice, without payment of a penalty, by the Underwriter, by vote
of a majority of the outstanding class of voting securities of the Fund, or by
vote of a majority of the Trustees, who are not "interested persons" of the Fund
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements. The Underwriting Agreements will terminate
automatically in the event of their assignment.

In addition to the amount paid to dealers pursuant to the sales charge table in
the Prospectus, the Underwriter from time to time pays, from its own resources
or pursuant to the Plans, a bonus or other incentive to dealers (other than the
Underwriter) that employ a registered representative who sells a minimum dollar
amount of the shares of the Fund during a specific period of time. Dealers may
not use sales of any of the Fund's shares to qualify for or participate in such
programs to the extent such may be prohibited by a dealer's internal procedures
or by the laws of any state or any self-regulatory agency, such as the National
Association of Securities Dealers, Inc. Such bonuses or other incentives take
the form of payment for travel expenses, including lodging, incurred in
connection with trips taken by qualifying registered representatives and members
of their families to places within or outside the United States, or

14
<PAGE>

other bonuses such as certificates for airline tickets, dining establishments or
the cash equivalent of such bonuses. The Underwriter, from time to time,
reallows all or a portion of the sales charge on Class A shares, which it
normally reallows to individual selling dealers. However, such additional
reallowance generally will be made only when the selling dealer commits to
substantial marketing support such as internal wholesaling through dedicated
personnel, internal communications and mass mailings.

Each Fund has adopted separate distribution plans under Rule 12b-1 of the 1940
Act for each class of shares of the Fund (collectively the "Plans"). The Plans
permit each Fund to compensate the Underwriter in connection with activities
intended to promote the sale of shares of each class of shares of each Fund.

Pursuant to the Plan for Class A shares, each Fund may compensate the
Underwriter up to 0.30% of average daily net assets of such Fund's Class A
shares. Under the Plans for Class B and Class C shares, each Fund may compensate
the Underwriter up to 1.00% of the average daily net assets attributable to the
respective class of such Fund. Pursuant to the Plan for Class T shares, each
Fund compensates the Underwriter in an amount equal to 0.95% (in the case of
Growth Fund, Special Fund, and Strategic Income Fund), 0.75% (in the case of
Balance Sheet Opportunities Fund) and 0.65% (in the case of High Yield Fund and
Government Securities Fund) of annual average daily net assets of such Fund's
Class T shares. However, each of the Class T Plans provides for compensation of
up to 1.00% of annual average daily net assets. Expenditures by the Underwriter
under the Plans shall consist of: (i) commissions to sales personnel for selling
shares of the Funds (including underwriting fees and financing expenses incurred
in connection with the sale of Class B and Class C shares); (ii) compensation,
sales incentives and payments to sales, marketing and service personnel; (iii)
payments to broker-dealers and other financial institutions that have entered
into agreements with the Underwriter in the form of a Dealer Agreement for
Northstar Funds for services rendered in connection with the sale and
distribution of shares of the Funds; (iv) payment of expenses incurred in sales
and promotional activities, including advertising expenditures related to the
Funds; (v) the costs of preparing and distributing promotional materials; (vi)
the cost of printing the Funds' Prospectus and SAI for distribution to potential
investors; and (vii) other activities that are reasonably calculated to result
in the sale of shares of the Funds. With respect to each Class T Plan, it is
anticipated that all of the payments received by the Underwriter under the Plan
will be paid to Advest as compensation for its prior distribution related and
current shareholder servicing related activities in connection with the Class T
Shares.

A portion of the fees paid to the Underwriter pursuant to the 12b-1 plans not
exceeding 0.25% annually of the average daily net assets of each Fund's shares
may be paid as compensation for providing services to each Fund's shareholders,
including assistance in connection with inquiries related to shareholder
accounts (the "Service Fee"). In order to receive Service Fees under the Plans,
participants must meet such qualifications as are established in the sole
discretion of the Underwriter, such as services to each Fund's shareholders; or
services providing each Fund with more efficient methods of offering shares to
coherent groups of clients, members or prospects of a participant; or services
permitting purchases or sales of shares, or transmission of such purchases or
sales by computerized tape or other electronic equipment; or other processing.

The Plans are designed to be compensation plans and therefore amounts spent by
the distributor in excess of plan limits are not carried over from year to year
for reimbursement. The Plans do, however, contemplate that amounts paid to the
distributor may compensate it for past distribution efforts without regard to
any particular time period.

If the Plans are terminated in accordance with their terms, the obligations of a
Fund to compensate the Underwriter for distribution related services pursuant to
the Plans will cease; however, subject to approval by the Trustees, including a
majority of the independent Trustees, a Fund may continue to make payments past
the date on which each Plan terminates up to the annual limits set forth in each
Plan for the purpose of compensating the Underwriter for services that were
incurred during the term of the Plan.

The Trustees have concluded that there is a reasonable likelihood that the Plans
will benefit each Fund and its shareholders and that the Plans should result in
greater sales and/or fewer redemptions of Fund shares. On a quarterly basis, the
Trustees will review a report on expenditures under the Plans and the purposes
for which expenditures were made. The Trustees will conduct an additional, more
extensive review annually in determining whether the Plans shall be continued.
By their terms, continuation of the Plans from year to year is contingent on
annual approval by a majority of the Trustees acting separately on behalf of
each Fund and by a majority of the Trustees who are not "interested persons" (as
defined in the 1940 Act) and who have no direct or indirect financial interest
in the operation of the Plans or any related agreements (the "Plan Trustees").
The Plans provide that they may not be amended to increase materially the costs
that a Fund may bear pursuant to the applicable Plan without approval of the
shareholders of the affected Fund and that other material amendments to the
Plans must be approved by a majority of the Plan Trustees acting separately on
behalf of each Fund, by vote cast in person at a meeting called for the purpose
of considering such amendments. The Plans further provide that while each plan
is in effect, the selection and nomination of Trustees who are not "interested
persons" shall be committed to the discretion of the Trustees who are not
"interested persons." A Plan may be terminated at any time by vote of a majority
of the Plan Trustees or a majority of the outstanding class of shares of the
affected Fund to which the Plan relates.

15
<PAGE>

TRUSTEES AND OFFICERS

The Trustees and principal Officers of the Trust and their business
affiliations for the past five years are set forth below. Unless otherwise
noted, the mailing address of the Trustees and Officers is 300 First Stamford
Place, Stamford, Connecticut 06902.

PAUL S. DOHERTY, Trustee. Age: 63. President, Doherty, Wallace, Pillsbury and
Murphy, P.C., Attorneys. Director, Tambrands, Inc. Since October 1993, Trustee
of the Northstar affiliated investment companies.

ROBERT B. GOODE, JR., Trustee. Age: 67. Currently retired. From 1990 to 1991,
Chairman of The First Reinsurance Company of Hartford. From 1987 to 1989,
President and Director of American Skandia Life Assurance Company. Since October
1993, Trustee of the Northstar affiliated investment companies.

ALAN L. GOSULE, Trustee. Age: 57. Partner, Rogers & Wells. Director, F.L. Putnam
Investment Management Co., Inc.

*MARK L. LIPSON, Trustee and President. Age: 48. Director, Chairman and Chief
Executive Officer of Northstar and Northstar, Inc. Director and President of
Northstar Administrators Corporation and Director and Chairman of Northstar
Distributors, Inc., President and Trustee of the Northstar affiliated investment
companies since October 1993. Prior to August, 1993, Director, President and
Chief Executive Officer of National Securities & Research Corporation and
President and Director/Trustee of the National Affiliated Investment Companies
and certain of National's subsidiaries.

WALTER H. MAY, Trustee. Age: 61. Retired. Former Senior Executive for Piper
Jaffrey, Inc.

DAVID W.C. PUTNAM, Trustee. Age: 58. President, Clerk and Director of F.L.
Putnam Securities Company, Incorporated, F.L. Putnam Investment Management
Company, Incorporated, Interstate Power Company, Inc., Trust Realty Corp. and
Bow Ridge Mining Co.; Director of Anchor Investment Management Corporation;
President and Trustee of Anchor Capital Accumulation Trust, Anchor International
Bond Trust, Anchor Gold and Currency Trust, Anchor Resources and Commodities
Trust and Anchor Strategic Assets Trust.

JOHN R. SMITH, Trustee. Age: 74. From 1970-1991, Financial Vice President of
Boston College; President of New England Fiduciary Company (financial planning)
since 1991; Chairman of Massachusetts Educational Financing Authority since
1987; Vice Chairman of Massachusetts Health and Education Authority.

*JOHN G. TURNER, Trustee. Age: 58. Since May 1993, Chairman and CEO of ReliaStar
Financial Corporation and Northwestern NationalLife Insurance Co. and Chairman
of other ReliaStar Affiliated Insurance Companies since 1995. Since October
1993, Director of Northstar and affiliates. Prior to May 1993, President and CEO
of ReliaStar and Northwestern National.

DAVID W. WALLACE, Trustee. Age: 73. Chairman of Putnam Trust Company, Lone Star
Industries and FECO Engineered Systems, Inc. He is also President and Trustee of
Robert R. Young Foundation and Governor of the New York Hospital. Director of
UMC Electronics and Zurn Industries, Inc. Former Chairman and Chief Executive
Officer, Todd Shipyards and Bangor Punta Corporation, and former Chairman and
Chief Executive Officer of National Securities & Research Corporation. Since
October 1993, Trustee of the Northstar affiliated investment companies.

STEPHANIE L. BECKNER, Assistant Vice President and Secretary. Age: 30. Assistant
Vice President, Secretary and Counsel of Northstar. Northstar affiliated
companies and Northstar affiliated investment companies.

THOMAS OLE DIAL, Vice President. Age: 41. Executive Vice President and Chief
Investment Officer-Fixed Income of Northstar and Principal, T.D. & Associates,
Inc. From 1989 to August 1993, Executive Vice President and Chief Investment
Officer-Fixed Income of National Securities and Research Corporation, Vice
President of National Affiliated Investment Companies, and Vice President of NSR
Asset Management Corporation. From 1988 to 1989, President of Dial Capital
Management.

MARY LISANTI, Vice President. Age: 42. Executive Vice President and Chief
Investment Officer-Equities of Northstar. From September 1996 to May 1998,
Portfolio Manager with Strong Capital Management. From March 1993 to August
1996, Managing Director and Portfolio Manager with Bankers Trust Corporation.

AGNES MULLADY, Vice President and Treasurer. Age: 39. Senior Vice President and
Chief Financial Officer of Northstar; Senior Vice President, Treasurer and
President of Northstar Administrators Corporation; and Vice President and
Treasurer of Northstar Distributors, Inc. and Northstar affiliated investment
companies. From 1987 to 1993, Vice President and Treasurer of National
Securities & Research Corporation.

- ----------
*Deemed to be an "interested person" of the Trust, as defined by the 1940 Act.

Northstar and Northstar Administrators Corporation make their personnel
available to serve as Officers and "Interested Trustees" of the Trust. All
Officers and Interested Trustees of the Trust are compensated by Northstar or
Northstar Administrators Corporation. Trustees who are not "interested persons"
of the Adviser are paid an annual retainer fee of $6,000 for their combined
services as Trustees to the Trust and to retail funds sponsored or advised by
the Adviser, and a per meeting fee of $1,500 for attendance at each joint
meeting of the Trusts and the other Northstar retail funds. The Trust also
reimburses Trustees for expenses incurred by them in connection with such
meetings.

COMPENSATION TABLE
PERIOD ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
TOTAL COMPENSATION
PENSION BENEFITS ESTIMATED ANNUAL FROM ALL FUNDS(17)
COMPENSATION ACCRUED AS PART OF BENEFITS UPON IN
FROM TRUST(a) FUND EXPENSES RETIREMENT NORTHSTAR COMPLEX(b)
------------ ------------- ---------- --------------------
<S> <C> <C> <C> <C>
Paul S. Doherty.......... (a)0 0 0 13,750
Robert B. Goode, Jr...... (a)0 0 0 15,000
Alan L. Gosule........... (a)0 0 0 15,500
Mark L. Lipson........... (a)0 0 0 --
Walter H. May............ (a)0 0 0 15,500
David W.C. Putnam........ (a)0 0 0 13,125
John R. Smith............ (a)0 0 0 15,500
John G. Turner........... (a)0 0 0 --
David W. Wallace......... (a)0 0 0 13,750
</TABLE>

(a) The Trust had not commenced operations as of December 31, 1997.

(b) Compensation paid by the Northstar Trust Funds, the Northstar Variable
Trust Funds and the remaining six funds, Northstar Growth, Special,
Balance Sheet Opportunities, High Yield, Strategic Income and Government
Securities Funds formerly advised by BSC.

16
<PAGE>

OTHER INFORMATION

Independent Accountants. Coopers & Lybrand L.L.P. has been selected as the
independent accountants of the Northstar Equity Trust. Coopers & Lybrand L.L.P.
audits the Fund's annual financial statements and expresses an opinion thereon.

Custodian. State Street Bank and Trust Company, 225 Franklin Street,
Boston, MA 02110, acts as custodian, and fund accounting agent for the Trust.

Transfer Agent. Pursuant to a Transfer Agency Agreement with the Fund,
First Data Investor Services Group, Inc., 4400 Computer Drive, Westborough, MA
01581-5120, acts as the transfer agent for the Fund.

Reports to Shareholders. The fiscal year of the Northstar Equity Trust
ends on December 31. The Fund will send financial statements to its shareholders
at least semiannually. An annual report containing financial statements audited
by the independent accountants will be sent to shareholders each year.

Organizational and Related Information. The Northstar Mid-Cap Growth Fund,
a series of the Trust, was organized in 1998.

The shares of the Fund, when issued, will be fully paid and
non-assessable, have no preference, preemptive, or similar rights, and will be
freely transferable. There will normally be no meetings of shareholders for the
purpose of electing Trustees 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. Shareholders may, in accordance with the Declaration of Trust,
cause a meeting of shareholders to be held for the purpose of voting on the
removal of Trustees. Meetings of the shareholders will be called upon written
request of shareholders holding in the aggregate not less than 10% of the
outstanding shares of the Fund or class having voting rights. Except as set
forth above and subject to the 1940 Act, the Trustees will continue to hold
office and appoint successor Trustees.

Under Massachusetts law, there is a remote possibility that shareholders
of a business trust could, under certain circumstances, be held personally
liable as partners for the obligations of such trust. The Declaration of Trust
for the Fund contains provisions intended to limit such liability and to provide
indemnification out of Fund property of any shareholder charged or held
personally liable for obligations or liabilities of the Fund solely by reason of
being or having been a shareholder of the Fund and not because of such
shareholder's acts or omissions or for some other reason. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund itself would be unable to meet its
obligations.

Year 2000 Compliance. The services provided to the Fund by the Adviser,
the Administrator and the Fund's other service providers are dependent on those
service providers' computer systems. Many computer software and hardware systems
in use today cannot distinguish between the year 2000 and the year 1900 because
of the way dates are encoded and calculated (the "Year 2000 Issue"). The failure
to make this distinction could have a negative implication on handling
securities trades, pricing and account services. The Adviser, the Administrator
and the Fund's other service providers are taking steps that each believes are
reasonably designed to address the Year 2000 Issue with respect to the computer
systems that they use. Although there can be no assurances, the Fund believes
these steps will be sufficient to avoid any material adverse impact on the Fund.
The costs or consequences of incomplete or untimely resolution of the Year 2000
Issue are unknown to the Adviser, Administrator and the Fund's other service
providers at this time but could have a material adverse impact on the
operations of the Fund and the Adviser, Administrator and the Fund's other
service providers.

17
<PAGE>

PERFORMANCE INFORMATION

Performance information for the Fund may be compared in reports and
promotional literature to (1) the S&P 500, Dow Jones Industrial Average
("DJIA"), or other unmanaged indices, so that investors may compare the Fund's
results to those of a group of unmanaged securities that are widely regarded by
investors as representative of the securities markets in general; (ii) other
groups of mutual funds tracked by Lipper Analytical Services, Inc., a widely
used independent research firm that ranks mutual funds by overall performance,
investment objectives, and assets, or tracked by other services, companies,
publications or persons who rank mutual funds on overall performance or other
criteria; (iii) the Consumer Price Index (measure for inflation) to assess the
real rate of return from an investment in the Fund; and (iv) well known
monitoring sources of certificates of deposit performance rates, such as Solomon
Brothers, Federal Reserve Bulletin, American Bankers and Tower Data/The Wall
Street Journal. Unmanaged indices may assume the reinvestment of dividends, but
generally do not reflect deductions for administrative and management costs and
expenses. Performance rankings are based on historical information and are not
intended to indicate future performance.

In addition, the Fund may, from time to time, include various measures of
the Fund's performance, including the current yield, the tax equivalent yield
and the average annual total return of shares of the Fund in advertisements,
promotional literature or reports to shareholders or prospective investors. Such
materials may occasionally cite statistics to reflect the Fund's volatility
risk.

Average Annual Total Return. Standardized quotations of average annual
total return ("Standardized Return") for each class of shares will be expressed
in terms of the average annual compounded rate of return for a hypothetical
investment in such class of shares over periods of 1, 5 and 10 years or up to
the life of the class of shares, calculated for each class separately pursuant
to the following formula:

P(1+T) to the power of n = ERV

Where:

P = a hypothetical initial payment of $1,000

T = the average annual total return

n = the number of years, and

ERV = the ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the period.

All total return figures reflect the deduction of a proportional share of
each class's expenses (on an annual basis), the deduction of the maximum initial
sales load (in the case of Class A shares) and the maximum contingent deferred
sales charge applicable to a complete redemption of the investment (in the case
of Class B and Class C shares), and assume that all dividends and distributions
are reinvested when paid.

Yield. Quotations of yield for a specific class of shares of the Fund will
be based on all investment income attributable to that class earned during a
particular 30-day (or one month) period (including dividends and interest), less
expenses accrued during the period ("net investment income"), and will be
computed by dividing the net investment income per share of that class earned
during the period by the maximum offering price per share on the last day of the
month, according to the following formula:

Yield = 2[(a-b + 1) to the power of 6 -1]
-----------------------------------------
cd

Where:

a = dividends and interest earned during the period attributable to a
specific class of shares

b = expenses accrued for the period attributable to that class (net of
reimbursements)

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

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

18
<PAGE>

The maximum offering price includes a maximum contingent deferred sales
load of 5% for Class B shares and 1% for Class C shares.

All accrued expenses are taken into account as follows. Accrued expenses
include all recurring expenses that are charged to all shareholder accounts in
proportion to the length of the base period, including but not limited to
expenses under the Fund's distribution plan. Except as noted, the performance
results take the contingent deferred sales load into account.

Non-Standardized Return. In addition to the performance information
described above, the Fund may provide total return information that is not
calculated according to the formula set forth above ("Non-Standardized Return").
Neither initial nor contingent deferred sales charges are taken into account in
calculating Non-Standardized Return. Excluding the Fund's sales charge from a
total return calculation produces a higher total return figure.

The Fund may quote its performance in various ways, using various types of
comparisons to market indices, other funds or investment alternatives, or to
general increases in the cost of living. All performance information supplied by
the Fund in advertising is historical and is not intended to indicate future
returns. The Fund's share prices and total returns fluctuate in response to
market conditions and other factors, and the value of the Fund's shares when
redeemed may be more or less than their original cost.

Evaluations of Fund performance made by independent sources may also be
used in advertisements concerning the Fund, including reprints of, or selections
from, editorials or articles about the Fund. These editorials or articles may
include quotations of performance from other sources, such as Lipper or
Morningstar. Sources for Fund performance information and articles about the
Fund may include the following: Banxquote, Barron's, Business Week, CDA
Investment Technologies, Inc, Changing Times, Consumer Digest, Financial World,
Forbes, Fortune, IBC/Donoghue's, Money Fund Report, Ibbotson Associates, Inc.,
Investment Company Data, Inc., Investor's Daily, Lipper Analytical Services,
Inc.'s Mutual Fund Performance Analysis, Money, Mutual Fund Values, The New York
Times, Personal Investing News, Personal Investor, Success, USA Today, U.S. News
and World Report, The Wall Street Journal and Wiesenberger Investment Company
Services.

When comparing yield, total return and investment risk of shares of the
Fund with other investments, investors should understand that certain other
investments have different risk characteristics than an investment in shares of
the Fund. For example, certificates of deposit may have fixed rates of return
and may be insured as to principal and interest by the FDIC, while the Fund's
returns will fluctuate and its share values and returns are not guaranteed.
Money market accounts offered by banks also may be insured by the FDIC and may
offer stability of principal. U.S. Treasury securities are guaranteed as to
principal and interest by the full faith and credit of the U.S. Government.
Money market mutual funds may seek to offer a fixed price per share.

The performance of the Fund is not fixed or guaranteed. Performance
quotations should not be considered to be representative of performance of the
Fund for any period in the future. The performance of the Fund is a function of
many factors including its earnings, expenses and number of outstanding shares.
Fluctuating market conditions; purchases, sales and maturities of portfolio
securities; sales and redemptions of shares of beneficial interest, and changes
in operating expenses are all examples of items that can increase or decrease
the Fund's performance.

19
<PAGE>

APPENDIX

DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC. ("MOODY'S") CORPORATE BOND
RATINGS

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

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

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

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 may apply numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

DESCRIPTION OF STANDARD & POOR'S CORPORATION'S ("S&P") CORPORATE DEBT RATINGS

AAA -- Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.

AA -- Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.

A -- Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB -- Debt rated BBB is regarded as having adequate capacity to pay interest
and repay principal. Whereas it normally exhibits protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal for debt in this category
than for debt in higher rated categories.

BB, B, CCC, CC, C -- Debt rated BB, B, CCC, CC and C is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest

A-1
<PAGE>

degree of speculation and C the highest degree of speculation. While such debt
will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to adverse conditions.

CI -- The rating CI is reserved for income bonds on which no interest is being
paid.

D -- Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date 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 if debt service payments 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.

A-2
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
SEPTEMBER 1, 1998

(star)NORTHSTAR MID-CAP GROWTH FUND
Institutional Class Shares

300 FIRST STAMFORD PLACE
STAMFORD, CONNECTICUT 06902
(203) 602-7950
(800) 595-7827

This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of the
Institutional Class Shares of the Fund dated September 1, 1998, as each may be
revised from time to time. To obtain a copy of the Fund's Prospectus, please
contact Northstar Investment Management Corporation at the address or phone
number listed above.

TABLE OF CONTENTS

INVESTMENT RESTRICTIONS

2. Underwrite the securities of others;

4. Deal in commodities or commodity contracts, except in the manner
described in the current Prospectus and SAI of the Fund;

7. Sell short, except that the Fund may enter into short sales against the
box;

8. Invest more than 25% of its assets in any one industry or related group
of industries;

10. Purchase a security if, as a result, more than 10% of any class of
securities, or more than 10% of the outstanding voting securities of an issuer,
would be held by the Fund;

11. Borrow money except to the extent permitted under the 1940 Act;

13. Make an investment for the purpose of exercising control over
management;

14. Invest more than 15% of its net assets in illiquid securities; or

INVESTMENT TECHNIQUES

2
<PAGE>

The Fund may purchase and sell currency futures. A foreign currency future
obligates the Fund to purchase or sell an amount of a specific currency at a
future date at a specific price.

3
<PAGE>

4
<PAGE>

5
<PAGE>

6
<PAGE>

7
<PAGE>

securities, which consist of Treasury bills or stripped interest or principal
components of U.S. Treasury bonds or notes.

PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION

8
<PAGE>

primarily of dealer spreads and underwriting commissions.

The placement of portfolio transactions with broker-dealers who sell
shares of the Fund is subject to rules adopted by the National Association of
Securities Dealers, Inc. ("NASD").

SERVICES OF NORTHSTAR AND THE ADMINISTRATOR

Northstar charges a fee under the Investment Advisory Agreement to the
Fund at an annual rate of 1.00% of the Fund's average daily net assets. This fee
is accrued daily and payable monthly.

9
<PAGE>

address of the Administrator is: 300 First Stamford Place, Stamford,
Connecticut 06902.

NET ASSET VALUE

The net asset value of the Fund's shares fluctuates and is determined
separately for each class as of the close of regular trading on the New York
Stock Exchange (usually 4:00 p.m. Eastern Time), on each business day that the
Exchange is open. Net asset value per share is computed by determining the value
of the Fund's assets (securities held plus cash and other assets, including
dividend and interest accrued but not received) less all liabilities of the Fund
(including accrued expenses other than class specific expenses), and dividing
the result by the total number of shares outstanding at such time. The specific
expenses borne by each class of shares will be deducted from that class and will
result in different net asset values and dividends. The net asset value per
share of the Class B and Class C shares of the Fund will generally be lower than
that of the Class A or Class I shares because of the higher class specific
expenses borne by each of the Class B and Class C shares.

REDEMPTIONS

10
<PAGE>

The right to redeem shares may be suspended and payment therefore
postponed during periods when the New York Stock Exchange is closed, other than
customary weekend and holiday closings, or, if permitted by rules of the SEC,
during periods when trading on the Exchange is restricted, or during any
emergency that makes it impracticable for the Fund to dispose of its securities
or to determine fairly the value of its net assets or during any other period
permitted by order of the SEC for the protection of investors. Furthermore, the
Transfer Agent will not mail redemption proceeds until checks received for
shares purchased have cleared, but payment will be forwarded immediately upon
the funds becoming available.

DIVIDENDS, DISTRIBUTIONS AND TAXES

11
<PAGE>

over long-term capital losses) for the taxable year is distributed.

12
<PAGE>

accrued market discount on the bonds, unless the Fund elects to include the
market discount in income as it accrues.

13
<PAGE>

UNDERWRITER AND DISTRIBUTION SERVICES

Pursuant to Underwriting Agreements, Northstar Distributors, Inc. is the
Underwriter for the Fund and as such conducts a continuous offering pursuant to
a "best efforts" arrangement requiring it to take and pay for only such
securities as may be sold to the public. The Underwriter is an affiliate of the
Adviser and the Administrator.

The Underwriting Agreements may be terminated at any time on not more than 60
days written notice, without payment of a penalty, by the Underwriter, by vote
of a majority of the outstanding class of voting securities of the Fund, or by
vote of a majority of the Trustees, who are not "interested persons" of the Fund
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements. The Underwriting Agreements will terminate
automatically in the event of their assignment.

14
<PAGE>

TRUSTEES AND OFFICERS

ALAN L. GOSULE, Trustee. Age: 57. Partner, Rogers & Wells. Director, F.L. Putnam
Investment Management Co., Inc.

WALTER H. MAY, Trustee. Age: 61. Retired. Former Senior Executive for Piper
Jaffrey, Inc.

MARY LISANTI, Vice President. Age: 42. Executive Vice President and Chief
Investment Officer-Equities of Northstar. From September 1996 to May 1998,
Portfolio Manager with Strong Capital Management from March 1993 to August 1996,
Managing Director and Portfolio Manager with Bankers Trust Corporation.

- ----------
*Deemed to be an "interested person" of the Trust, as defined by the 1940 Act.

COMPENSATION TABLE
PERIOD ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
TOTAL COMPENSATION
PENSION BENEFITS ESTIMATED ANNUAL FROM ALL FUNDS(17)
COMPENSATION ACCRUED AS PART OF BENEFITS UPON IN
FROM TRUST(a) FUND EXPENSES RETIREMENT NORTHSTAR COMPLEX(b)
------------- ------------- ---------- --------------------
<S> <C> <C> <C> <C>
Paul S. Doherty.......... (a)0 0 0 13,750
Robert B. Goode, Jr...... (a)0 0 0 15,000
Alan L. Gosule........... (a)0 0 0 15,500
Mark L. Lipson........... (a)0 0 0 --
Walter H. May............ (a)0 0 0 15,500
David W.C. Putnam........ (a)0 0 0 13,125
John R. Smith............ (a)0 0 0 15,500
John G. Turner........... (a)0 0 0 --
David W. Wallace......... (a)0 0 0 13,750
</TABLE>

(a) The Trust had not commenced operations as of December 31, 1997.

15
<PAGE>

OTHER INFORMATION

Custodian. State Street Bank and Trust Company, 225 Franklin Street,
Boston, MA 02110, acts as custodian, and fund accounting agent for the Trust.

Transfer Agent. Pursuant to a Transfer Agency Agreement with the Fund,
First Data Investor Services Group, Inc., 4400 Computer Drive, Westborough, MA
01581-5120, acts as transfer agent for the Fund.

Organizational and Related Information. The Northstar Mid-Cap Growth Fund,
a series of the Trust, was organized in 1998.

16
<PAGE>

PERFORMANCE INFORMATION

P(1+T) to the power of n = ERV

Where:

P = a hypothetical initial payment of $1,000

T = the average annual total return

n = the number of years, and

ERV = the ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the period.

Yield = 2[(a-b + 1) to the power of 6 -1]
-----------------------------------------
cd

Where:

a = dividends and interest earned during the period attributable to a
specific class of shares

b = expenses accrued for the period attributable to that class (net of
reimbursements)

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

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

17
<PAGE>

18
<PAGE>

APPENDIX

DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC. ("MOODY'S") CORPORATE BOND
RATINGS

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.

DESCRIPTION OF STANDARD & POOR'S CORPORATION'S ("S&P") CORPORATE DEBT RATINGS

AAA -- Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.

AA -- Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.

A-1
<PAGE>

CI -- The rating CI is reserved for income bonds on which no interest is being
paid.

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.

A-2
<PAGE>

PART C
OTHER INFORMATION

Item 23. Exhibits
(a) Declaration of Trust
(b) By-Laws
(c) N/A
(d) Investment Advisory Agreement
(e) Underwriting Agreements
(f) N/A
(g) Custody Agreement*
(h)(1) Transfer Agency Agreement*
(2) Administrative Services Agreement
(i) Opinion of Counsel*
(j) N/A
(k) N/A
(l) Initial Capital Agreement*
(m) Plans of Distribution pursuant to
Rule 12b-1
(n) N/A
(o) Multiple Class Plan Pursuant to
Rule 18f-3*
(p) Power of Attorney*

- ---------------------------
* To be filed by Amendment.

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

There are no persons controlled by or under common control with Registrant.

Item 25. Indemnification

Section 4.3 of Registrant's Declaration of Trust provides the following: (a)
Subject to the exceptions and limitations contained in paragraph (b) below:

(i) every person who is, or has been, a Trustee or officer of the Trust
shall be indemnified by the Trust to the fullest extent permitted by law
against all liability and against all expenses reasonably incurred or paid
by him in connection with any claim, action, suit or proceeding in which
he becomes involved as a party or otherwise by virtue of his being or
having been a Trustee or officer and against amounts paid or

C-1
<PAGE>

incurred by him in the settlement thereof; and

(ii) the word "claim", "action", "suit" or "proceeding" shall apply to all
claims, actions or suits or proceedings (civil, criminal, administrative
or other including appeals), actual or threatened; and the words
"liability" and "expenses" shall include without limitation, attorneys
fees, costs, judgments, amounts paid in settlement, fines, penalties and
other liabilities.

(b) No indemnification shall be provided hereunder to a Trustee or officer:

(i) against any liability to the Trust, a series thereof, or the
Shareholders by reason of a final adjudication by a court or other body
before which a proceeding was brought or that he engaged in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office;

(ii) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in reasonable belief that his
action was in the best interest of the Trust; and

(iii) in the event of a settlement or other disposition not involving a
final adjudication as provided in paragraph (b) (i) or (b) (ii) resulting
in a payment by a Trustee or officer, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office:

(A) by the court or other body approving the settlement or other
disposition; or

(B) based upon the review of readily available facts (as opposed to
full trial-type inquiry) by (x) vote of a majority of the
Disinterested Trustees acting on the matter (provided that a
majority of the Disinterested Trustees then in office act on the
matter) or (y) written opinion of independent legal counsel.

(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not affect any other
rights to which any Trustee or officer may now or hereafter be entitled, shall
continue as to a person who has ceased to be such Trustee or officer and shall
inure to the benefit of the heirs, executors, administrators and assigns of such
a person. Nothing contained herein shall affect any rights to indemnification to
which personnel of the Trust other than Trustees and officers may be entitled by
contract or otherwise under law.

(d) Expenses of preparation and presentation of a defense to any claim, action,
suit or proceeding of the character described in paragraph (a) of this Section
4.3 may be advanced by the Trust prior to final disposition thereof upon receipt
of an undertaking by or on behalf of the recipient to repay such amount if it is
ultimately determined that he is not entitled to indemnification under this
Section 4.3, provided that either:

(i) such undertaking is secured by a surety bond or some other appropriate
security provided by the recipient or the Trust shall be insured against
losses arising out of any such advances; or

(ii) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees act on the matter)
or an independent legal counsel in a written opinion shall determine,
based upon a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the recipient
ultimately will be found entitled to indemnification.

As used in this Section 4.3, a "Disinterested Trustee" is one who is not (i) an
Interested Person of the Trust (including anyone who has been exempted from
being an Interested Person by any rule, regulation or order of the Commission),
or (ii) involved in the claim, action, suit or proceeding.

C-2
<PAGE>

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to Trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a Trustee, officer or controlling person of the Registrant in
connection with the successful defense of any action suit or proceeding) is
asserted by such Trustee, officer or controlling person in connection with the
shares being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy, as expressed in the Act and be governed by final
adjudication of such issue.

Item 26. Business and Other Connections of Investment Adviser

See "MANAGEMENT OF THE FUNDS" in the Prospectus and "Services of Northstar and
the Administrator" and "Trustees and Officers" in the Statement of Additional
Information, each of which is included in the Registration Statement. Set forth
is a list of each officer and director of the Adviser indicating each business,
profession, vocation or employment of a substantial nature in which each such
person has been engaged since January 31, 1994.

<TABLE>
<CAPTION>
POSITION WITH OTHER SUBSTANTIAL
INVESTMENT BUSINESS, PROFESSION
NAME ADVISER VOCATION OR EMPLOYMENT
- ---- ------- ----------------------
<S> <C> <C>
John Turner Director Chairman and CEO, ReliaStar
Financial Corp. and affiliates;
Director of Northstar Affiliates;
Trustee and Chairman, Northstar
Affiliated Investment Companies.

John Flittie Director President, ReliaStar Financial Corp.
and affiliates; Director, Northstar
Affiliates.

Mark L. Lipson Chairman/CEO Director and Officer of Northstar
Director Distributors, Inc., Northstar
Administrators Corp. and Northstar,
Inc. Trustee and President, Northstar
Affiliated Investment Companies.

Robert J. Adler Executive President, Northstar Distributors, Inc.
Vice
President,
Sales &
Marketing

</TABLE>

C-3
<PAGE>

<TABLE>
<S> <C> <C>
Jeffrey Aurigemma Vice Vice President - Northstar Affiliated
President - Investment Companies
Investments and Portfolio Manager

Stephanie L. Beckner Assistant Vice President, Assistant Vice President & Secretary of
Secretary and Counsel Northstar Affiliates and the Northstar
Affiliated Investment Companies

Jeffrey Bernstein Vice President - Vice President, Northstar
Investments Affiliated Investment Companies
and Portfolio Manager, Former
Portfolio Manager with Strong Capital
Management, Former Assistant Portfolio Manager
with Bankers Trust Corporation

Thomas Ole Dial Executive Vice President, Northstar Affiliated
Vice President Investment Companies, and
Chief Investment Officer - Principal, TD Associates Inc.
Fixed Income

Michael Graves Vice Vice President - Northstar Affiliated
President Investment Companies
Investments

Mary Lisanti Executive Vice President, Northstar Affiliated
Vice President Investment Companies, Former
Chief Investment Officer - Portfolio Manager with Strong Capital
Equities Management, Former Managing Director and
Portfolio Manager with Bankers Trust Corporation

Agnes Mullady Sr. Vice President, Northstar Administrators Corporation,
President Vice President & Treasurer of
and CFO Northstar Affiliates and the Northstar
Affiliated Investment Companies

Mark Sfarra Vice Vice President - Northstar
President - Distributors, Inc.
Marketing

Stephen Vondrak Vice Vice President - Northstar
President - Distributors, Inc., Former Regional
Sales & Marketing Marketing Manager with Roger
Engemann and Associates from
1991-1994.

Geoffrey Wadsworth Vice President- Vice President - Northstar Affiliated
Investments Investment Companies and Portfolio
Manager

</TABLE>

Item 27. Principal Underwriter

C-4
<PAGE>

(a) See "HOW THE FUNDS ARE ORGANIZED AND MANAGED", "MEET THE PORTFOLIO MANAGERS"
and "YOUR GUIDE TO BUYING, SELLING AND EXCHANGING SHARES OF NORTHSTAR FUNDS" in
the Prospectus and "Underwriter and Distribution Services" in the Statement of
Additional Information, both of which are included in this Post-Effective
Amendment to the Registration Statement. Unless otherwise indicated, the
principal business address for each person is c/o Northstar, 300 First Stamford
Place, Stamford,CT 06902.

(b) (1) (2) (3)
Name and Principal Position and Offices Position and Offices
Address with Underwriter with Registrant
- ------- ---------------- ---------------

John Turner Director Trustee, Chairman
20 Washington Ave. South
Minneapolis, MN

John Flittie Director None
20 Washington Ave. South
Minneapolis, MN

Mark L. Lipson Chairman & Director Trustee and President

Robert J. Adler President None

Mark Blinder Reg. Vice President None

Mike Brescia Reg. Vice President None

Jennifer Byrne Reg. Vice President None

Eugene Carlin Reg. Vice President None

Charles Dolce Reg. Vice President None

Chris Erbeck Reg. Vice President None

Rick Galloway Reg. Vice President None

Neil Gargiulo Reg. Vice President None

Justin Gross Reg. Vice President None

Edward Ittner Reg. Vice President None

Nancy Lavin Reg. Vice President None

Daniel Leonard Reg. Vice President None

David Linton Senior Vice President &
National Sales Manager None

Stephen O'Brien Reg. Vice President None

Greg Ratto Reg. Vice President None

C-5
<PAGE>

Don Rhodes Reg. Vice President None

Gregg Smyth Reg. Vice President None

Rich Westlund Reg. Vice President None

Mark Sfarra Vice President None

Stephen Vondrak Vice President None

Stephanie L. Beckner Assistant Vice President, Assistant Vice
Secretary & Counsel President & Secretary

Agnes Mullady Vice President Vice President
& Treasurer & Treasurer

Item 28. Location of Accounts and Records

State Street Bank and Trust Co. maintains such records at 1776 Heritage Drive,
North Quinicy, MA 02171 as Custodian and Fund Accounting Agent for the Northstar
Equity Trust:

(1) Receipts and delivery of securities including certificate numbers;

(2) Receipts and disbursement of cash;

(3) Records of securities in transfer, securities in physical
possession, securities owned and securities loaned; and

(4) Fund Accounting Records.

First Data Investor Services Group, ("First Data") maintains the following
records at One Exchange Place, 11th Floor, Boston, MA 02109, as Transfer Agent
and Blue Sky Administrator for the Northstar Equity Trust.

(1) Shareholder Records;

(2) Share accumulation accounts: Details as to dates, number of shares
and share prices of each account;

(3) Fund Accounting Records; and

(4) State Securities Registration Records.

All other records required by item 30(a) are maintained at the office of the
Administrator, 300 First Stamford Place, Stamford, CT 06902.

Item 29. Management Services

Not Applicable.

Item 32. Undertakings

(a) Registrant hereby undertakes to call a meeting of shareholders for the
purpose of voting upon the question of removal of a Trustee or Trustees
when requested in writing to do so by the holders of at least 10% of the
Trusts' outstanding shares of beneficial interest and in connection with
such meeting to comply with the provisions of Section 16(c) of the
Investment Company Act of 1940 relating to shareholder communications.

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

C-6
<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, thereunto duly authorized, in the
City of Stamford and the State of Connecticut on the 12th day of June, 1998.

Northstar Equity Trust

By: /s/ Mark L. Lipson
----------------------
Mark L. Lipson, 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 and
on the date indicated.

SIGNATURES TITLE DATE

/s/ Mark L. Lipson Trustee June 12, 1998
Mark L. Lipson

/s/ Agnes Mullady Principal Financial June 12, 1998
Agnes Mullady and Accounting Officer

C-7
<PAGE>

Index to Exhibits
Northstar Equity Trust

Exhibit No. Under
Part C of Form N1-A Name of Exhibit Page Number Herein
- ------------------- --------------- ------------------

(a) Declaration of Trust
(b) By-Laws
(d) Investment Advisory Agreement
(e) Underwriting Agreements
(h)(2) Administrative Services Agreement
(m) Distribution and Service Plan

C-8

Exhibit (a)
DECLARATION OF TRUST

NORTHSTAR EQUITY TRUST

DATED: JUNE 12, 1998
<PAGE>

TABLE OF CONTENTS

PAGE

ARTICLE I -- NAME AND DEFINITIONS.......................................... 1

Section 1.1 Name................................................... 1
Section 1.2 Definitions............................................ 1

ARTICLE II -- TRUSTEES..................................................... 3
Section 2.1 General Powers......................................... 3
Section 2.2 Investments............................................ 3
Section 2.3 Legal Title............................................ 5
Section 2.4 Issuance and Repurchase of Shares...................... 5
Section 2.5 Delegation; Committees................................. 5
Section 2.6 Collection and Payment................................. 6
Section 2.7 Expenses............................................... 6
Section 2.8 Manner of Acting; By-Laws.............................. 6
Section 2.9 Miscellaneous Powers................................... 6
Section 2.10 Principal Transactions................................. 7
Section 2.11 Number of Trustees..................................... 7
Section 2.12 Election and Term...................................... 7
Section 2.13 Resignation and Removal................................ 7
Section 2.14 Vacancies.............................................. 8
Section 2.15 Delegation of Power to Other Trustees.................. 8

ARTICLE III -- CONTRACTS................................................... 8

Section 3.1 Distribution Contract.................................. 8
Section 3.2 Advisory or Management Contract........................ 9
Section 3.3 Administrator.......................................... 9
Section 3.4 Transfer Agent and Shareholder Servicing Agents........ 9
Section 3.5 Affiliations of Trustees or Officers, Etc.............. 10
Section 3.6 Compliance with 1940 Act............................... 10

ARTICLE IV -- LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS.......................................... 10

Section 4.1 No Personal Liability of Shareholders,
Trustees, Etc. .................................... 10
Section 4.2 Non-Liability of Trustees, Etc......................... 11
Section 4.3 Mandatory Indemnification.............................. 11
Section 4.4 No Bond Required of Trustees........................... 13
Section 4.5 No Duty of Investigation; Notice in Trust
Instruments, Etc. ................................. 13
<PAGE>

Section 4.6 Reliance on Experts, Etc............................... 13

ARTICLE V -- SHARES OF BENEFICIAL INTEREST................................. 13

Section 5.1 Beneficial Interest.................................... 13
Section 5.2 Rights of Shareholders................................. 14
Section 5.3 Trust Only............................................. 14
Section 5.4 Issuance of Shares..................................... 14
Section 5.5 Register of Shares..................................... 14
Section 5.6 Transfer of Shares..................................... 14
Section 5.7 Notices, Reports....................................... 15
Section 5.8 Treasury Shares........................................ 15
Section 5.9 Voting Powers.......................................... 15
Section 5.10 Meetings of Shareholders............................... 16
Section 5.11 Series Designation..................................... 16
Section 5.12 Assent to Declaration of Trust......................... 18
Section 5.13 Class Designation ..................................... 18

ARTICLE VI -- REDEMPTION AND REPURCHASE OF SHARES.......................... 19

Section 6.1 Redemption of Shares................................... 19
Section 6.2 Price.................................................. 19
Section 6.3 Payment................................................ 20
Section 6.4 Effect of Suspension of Determination of Net
Asset Value ....................................... 20
Section 6.5 Repurchase by Agreement................................ 20
Section 6.6 Redemption of Sub-Minimum Accounts..................... 20
Section 6.7 Redemption of Shares in Order to Qualify as
Regulated Investment Company; Disclosure
of Holding ........................................ 20
Section 6.8 Reductions in Number of Outstanding Shares
Pursuant to Net Asset Value Formula................ 21
Section 6.9 Suspension of Right of Redemption...................... 21

ARTICLE VII -- DETERMINATION OF NET ASSET VALUE, NET INCOME
AND DISTRIBUTIONS........................................... 21

Section 7.1 Net Asset Value........................................ 21
Section 7.2 Distributions to Shareholders.......................... 22
Section 7.3 Determination of Net Income; Constant Net Asset
Value; Reduction of Outstanding Shares............. 23
Section 7.4 Allocation Between Principal and Income................ 23
Section 7.5 Power to Modify Foregoing Procedures................... 24

ii
<PAGE>

ARTICLE VIII -- DURATION; TERMINATION OF TRUST; AMENDMENT; MERGERS, ETC.... 24

Section 8.1 Duration............................................... 24
Section 8.2 Termination of Trust................................... 24
Section 8.3 Amendment Procedures................................... 25
Section 8.4 Merger, Consolidation and Sale of Assets............... 25
Section 8.5 Incorporation.......................................... 25

ARTICLE IX -- REPORTS TO SHAREHOLDERS...................................... 26

ARTICLE X -- MISCELLANEOUS ............................................... 26

Section 10.1 Filing................................................. 26
Section 10.2 Governing Law.......................................... 27
Section 10.3 Counterparts........................................... 27
Section 10.4 Reliance by Third Parties.............................. 27
Section 10.5 Provisions in Conflict with Law or Regulations......... 27
Section 10.6 Principal Place of Business............................ 27
Section 10.7 Resident Agent......................................... 27

iii
<PAGE>

DECLARATION OF TRUST
NORTHSTAR EQUITY TRUST

DATED: JUNE 12, 1998

DECLARATION OF TRUST, made this 12th day of June, 1998 by the undersigned
Trustees (Together with all other persons from time to time duly elected,
qualified and serving as Trustees.) in accordance with the provisions of Article
II hereof, (the "Trustees");

WHEREAS, the Trustees desire to establish a trust for the investment and
reinvestment of funds contributed thereto; and

WHEREAS, the Trustees desire that the beneficial interest in the trust
assets be divided into transferable shares of beneficial interest, as
hereinafter provided; and

NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust established hereunder shall be held and managed in
trust for the benefit of the holders, from time to time, of the shares of
beneficial interest issued hereunder, and subject to the provisions hereof.

ARTICLE I

NAME AND DEFINITIONS

Section 1.1. Name. The name of the Trust created hereby is "Northstar
Equity Trust".

Section 1.2. Definitions. Wherever they are used herein the following
terms have the following respective meanings:

(a) "Administrator" means a party furnishing services to the Trust
pursuant to any contract described in Section 3.3 hereof.

(b) "By-Laws" means the By-laws referred to in Section 2.8 hereof, as from
time to time amended.

(c) "Class" means the two or more classes as may be established and
designated from time to time by the Trustees pursuant to Section 5.13 hereof.

(d) "Commission" has the meaning given it in the 1940 Act. The term
"Interested Person" has the meaning given it in the 1940 Act, as modified by any
applicable order or orders of the Commission. Except as otherwise defined by the
Trustees in conjunction with the establishment of any series of Shares, the term
"vote of a majority of the Shares outstanding and entitled to vote" shall have
the same meaning as the term "vote of a majority of the outstanding
<PAGE>

voting securities" given it in the 1940 Act.

(e) "Custodian" means any Person other than the Trust who has custody of
any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).

(f) "Declaration" means this Declaration of Trust as further amended from
time to time. Reference in this Declaration of Trust to "Declaration," "hereof,"
"herein," and "hereunder" shall be deemed to refer to this Declaration rather
than exclusively to the article or section in which such words appear.

(g) "Distributor" means the party, other than the Trust, to the contract
described in Section 3.1 hereof.

(h) "His" shall include the feminine and neuter, as well as the masculine
genders.

(i) "Investment Adviser" means the party, other than the Trust, to the
contract described in Section 3.2 hereof.

(j) "Municipal Bonds" means obligations issued by or on behalf of states,
territories of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, the interest from which
is exempt from regular Federal income tax.

(k) The "1940 Act" means the Investment Company Act of 1940, as amended
from time to time.

(l) "Person" means and includes individuals, corporations, partnerships,
trusts, associations, joint ventures and other entities, whether or not legal
entities, and governments and agencies and political subdivisions thereof.

(m) "Series" individually or collectively means the two or more Series as
may be established and designated from time to time by the Trustees pursuant to
Section 5.11 hereof. Unless the context otherwise requires, the term "Series"
shall include Classes into which shares of the Trust, or of a Series, may be
divided from time to time.

(n) "Shareholder" means a record owner of Outstanding Shares.

(o) "Shareholder Servicing Agent" means a party furnishing services to the
Trust pursuant to any shareholder servicing contract described in Section 3.4
hereof.

(p) "Shares" means the equal proportionate units of interest into which
the beneficial interest in the Trust shall be divided from time to time,
including the Shares of any and all Series and Classes which may be established
by the Trustees, and includes fractions of Shares as well as whole Shares.
"Outstanding Shares" means those Shares shown from time to time on the books of
the Trust or its Transfer Agent as then issued and outstanding, but shall not
include Shares

2
<PAGE>

which have been redeemed or repurchased by the Trust and which are at the time
held in the treasury of the Trust.

(q) "Transfer Agent" means any one or more Persons other than the Trust
who maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.

(r) "Trust" means the Trust referred to in Section 1.1.

(s) "Trust Property" means any and all property, real or personal,
tangible or in tangible, which is owned or held by or for the account of the
Trust or the Trustees.

(t) "Trustees" means the person or person who has or have signed this
Declaration, so long as he or they shall continue in office in accordance with
the terms hereof, and all other persons who may from time to time be duly
qualified and serving as Trustees in accordance with the provisions of Article
II hereof, and reference herein to a Trustee or the Trustees shall refer to such
person or person in this capacity or their capacities as trustees hereunder.

ARTICLE II

TRUSTEES

Section 2.1. General Powers. The Trustees shall have exclusive and
absolute control over the Trust Property and over the business of the Trust to
the same extent as if the Trustees were the sole owners of the Trust Property
and business in their own right, but with such powers of delegation as may be
permitted by this Declaration. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the Commonwealth of Massachusetts,
in any and all states of the United States of American, in the District of
Columbia, and in any and all commonwealths, territories, dependencies, colonies,
possessions, agencies or instrumentalities of the United States of America and
of foreign governments, and to do all such other things and execute all such
instruments as they deem necessary, proper or desirable in order to promote the
interests of the Trust although such things are not herein specifically
mentioned. Any determination as to what is in the interests of the Trust made by
the Trustees in good faith shall be conclusive. In construing the provisions of
this Declaration, the presumption shall be in favor of a grant of power to the
Trustees.

The enumeration of any specific power herein shall not be construed as
limiting the aforesaid power. Such powers of the Trustees may be exercised
without order of or resort to any court.

Section 2.2. Investments. The Trustees shall have the power:

3
<PAGE>

(a) To operate as and carry on the business of an investment company, and
exercise all the powers necessary and appropriate to the conduct of such
operations.

(b) To invest in, hold for investment, or reinvest in, securities,
including common and preferred stocks; warrants; bonds, debentures, bills, time
notes and all other evidences of indebtedness; negotiable or non-negotiable
instruments; any form of gold or other precious metal; commodity contracts;
shares of, or any other interest in, any investment company as defined in the
1940 Act; government securities, including securities of any state, municipality
or other political subdivision thereof, or any governmental or
quasi-governmental agency or instrumentality; and money market instruments
including bank certificates of deposit, finance paper, commercial paper, bankers
acceptances and all kinds of repurchase agreements, of any corporation, company,
trust, association, firm or other business organization however established, and
of any country, state, municipality or other political subdivision, or any
governmental or quasi-governmental agency or instrumentality; "when issued"
contracts for any such securities, contracts or interests; to retain Trust
assets in cash and from time to time to change the securities contracts or
interest in which the assets of the Trust are invested.

(c) To acquire (by purchase, subscription or otherwise), to hold, to trade
in and deal in, to acquire any rights or options to purchase or sell, to sell or
otherwise dispose of, to lend, and to pledge any such securities, contracts or
interests, and to enter into repurchase agreements and forward foreign currency
exchange contracts, to purchase and sell futures contracts on securities,
securities indices and foreign currencies, to purchase or sell options on such
contracts, foreign currency contracts, and foreign currencies and to engage in
all types of hedging and risk management transactions.

(d) To exercise all rights, powers and privileges of ownership or interest
in all securities, repurchase agreements, futures contracts and options and
other assets included in the Trust Property, including the right to vote thereon
and otherwise act with respect thereto and to do all acts for the preservation,
protection, improvement and enhancement in value of all such assets.

(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real or
personal, including cash, and any interest therein.

(f) To borrow money and in this connection issue notes or other evidence
of indebtedness; to secure borrowings by mortgaging, pledging or otherwise
subjecting as security the Trust Property; to endorse, guarantee, or undertake
the performance of any obligation or engagement of any other Person and to lend
Trust property.

(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest, and to guarantee or
become surety on any or all of the contracts, stocks, bonds, notes, debentures
and other obligations of any

4
<PAGE>

such corporation, company, trust, association or firm.

(h) To enter into a plan of distribution and any related agreements
whereby the Trust may finance directly or indirectly any activity which is
primarily intended to result in the sale of Shares.

(i) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or Proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either along or in
association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connection with the aforesaid business or
purposes, objects or powers.

The foregoing clauses shall be construed both as objects and powers, and
the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees.

The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust, nor shall the Trustees be limited
by any law limiting the investment which may be made by fiduciaries.

Section 2.3. Legal Title. Legal title to all the Trust Property, including
the property of any Series of the Trust, shall be vested in the Trustees as
joint tenants except that the Trustees shall have power to cause legal title to
any Trust Property to be held by or in the name of one or more of the Trustees,
or in the name of the Trust, or in the name of any other person as nominee, on
such terms as the Trustees may determine, provided that the interest of the
Trust therein is deemed appropriately protected. The right, title and interest
of the Trustees in the Trust Property and the property of each Series of the
Trust shall vest automatically in each Person who may hereafter become a
Trustee. Upon the termination of the term of office, resignation, removal or
death of a Trustee he shall automatically cease to have any right, title or
interest in any of the Trust Property or the property of any Series of the
Trust, and the right, title and interest of such Trustee in the Trust Property
shall vest automatically in the remaining Trustees. Such vesting and cessation
of title shall be effective whether or not conveyancing documents have been
executed and delivered.

Section 2.4. Issuance and Repurchase of Shares. The Trustees shall have
the power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal in Shares and, subject
to the provisions set forth in Articles VI and VII and Section 5.11 hereof, to
apply to any such repurchase, redemption, retirement, cancellation or
acquisition of Shares any funds or property of the particular series of the
Trust with respect to which such Shares are issued, whether capital or surplus
or otherwise, to the full extent now or hereafter permitted by the laws of the
Commonwealth of Massachusetts governing business corporation.

Section 2.5. Delegation; Committees. the Trustees shall have power to
delegate from

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time to time to such of their number or to officers, employees or agents of the
Trust the doing of such things and the execution of such instruments either in
the name of the Trust or the names of the Trustees or otherwise as the Trustees
may deem expedient, to the same extent as such delegations permitted by the 1940
Act.

Section 2.6. Collection and Payment. The Trustees shall have the power to
collect all property due to the Trust; to pay all claims, including taxes,
against the Trust Property; to prosecute, defend, compromise or abandon any
claims relating to the Trust Property; to foreclose any security interest
securing any obligations, by virtue of which any property is owed to the Trust;
and to enter into releases, agreements and other instruments.

Section 2.7 Expenses. The Trustees shall have the power to incur and pay
any expenses which in the opinion of the Trustees are necessary or incidental to
carry out any of the purposes of this Declaration, and to pay reasonable
compensation from the funds of the Trust to themselves as Trustees. The Trustees
shall fix the compensation of all officers, employees and Trustees.

Section 2.8. Manner of Acting; By-laws. Except as otherwise provided
herein or in the By-laws, any action to be taken by the Trustee may be taken by
a majority of the Trustees present at a meeting of Trustees (a quorum being
present), including any meeting held by means of a conference telephone circuit
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, or by written consents of the entire number
of Trustees then in office. The Trustees may adopt By-laws not inconsistent with
this Declaration to provide for the conduct of the business of the Trust and may
amend or repeal such By-laws to the extent such power is not reserved to the
Shareholders.

Notwithstanding the foregoing provisions of this Section 2.8 and in
addition to such provisions or any other provision of this Declaration or of the
By-laws, the Trustees may by resolution appoint a committee consisting of less
than the whole number of Trustees then in office, which committee may be
empowered to act for and bind the Trustees and the Trust, as if the acts of such
committee were the acts of all the Trustees then in office, with respect to the
institution, prosecution, dismissal, settlement, review or investigation of any
action, suit or proceeding which shall be pending or threatened to be brought
before any court, administrative agency or other adjudicatory body.

Section 2.9. Miscellaneous Powers. Subject to Section 5.11 hereof, the
Trustees shall have the power to: (a) employ or contract with such Persons as
the Trustees may deem desirable for the transaction of the business of the
Trust; (b) enter into joint ventures, partnerships and any other combinations or
associations; (c) remove Trustees or fill vacancies in or add to their number,
elect and remove such officers and appoint and terminate such agents or
employees as they consider appropriate, and appoint from their own number, and
terminate, any one or more committees which may exercise some or all of the
power and authority of the Trustees as the Trustees may determine; (d) purchase,
and pay for out of Trust Property, insurance policies insuring the Shareholders,
the Administrator, Trustees, officers, employees, agents, investment advisers,
distributors, selected dealers or independent contractors of the Trust against
all claims

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arising by reason of holding any such position or by reason of any action taken
or omitted by any such Person in such capacity, whether or not constituting
negligence, or whether or not the Trust would have the power to indemnify such
Person against such liability; (e) establish pension, profit-sharing, share
purchase, and other retirement, incentive and benefit plans for any Trustees,
officers, employees and agents of the Trust; (f) to the extent permitted by law,
indemnify any person with whom the Trust has dealings, including the Investment
Adviser, Distributor, Transfer Agent and selected dealers, to such extent as the
Trustees shall determine; (g) guarantee indebtedness or contractual obligations
of others; (h) determine and change the fiscal year of the Trust and the method
by which its accounts shall be kept; and (i) adopt a seal for the Trust, but the
absence of such seal shall not impair the validity of any instrument executed on
behalf of the Trust.

Section 2.10. Principal Transactions. Except in transactions not permitted
by the 1940 Act or rules and regulations adopted by the Commission, the Trustees
may, on behalf of the Trust, buy any securities from or sell any securities to,
or lend any assets of the Trust to, any Trustee or officer of the Trust or any
firm of which any such Trustee or officer is a member acting as principal, or
have any such dealings with the Investment Adviser, Distributor or transfer
agent or with any interested Person of such Person; and the Trust may employ any
such person, or firm or company in which such Person is an Interested Person, as
broker, legal counsel, registrar, transfer agent, dividend disbursing agent or
Custodian upon customary terms.

Section 2.11. Number of Trustees. The number of Trustees shall initially
be two (2), and thereafter shall be such number as shall be fixed from time to
time by a written instrument signed by a majority of the Trustees, provided,
however, that the number of Trustees shall in no event be more than fifteen
(15).

Section 2.12. Election and Term. Except for the Trustees named herein or
appointed to fill vacancies pursuant to Section 2.14 hereof, the Trustees shall
be elected by the Shareholders owning of record a plurality of the Shares voting
at a meeting of Shareholders. Such a meeting shall be held on a date fixed by
the Trustees. Except in the event of resignation or removals pursuant to Section
2.13 hereof, each Trustee shall hold office until such time as less than a
majority of the Trustees holding office have been elected by Shareholders. In
such event the Trustees then in office will call a Shareholders' meeting for the
election of Trustees. Except for the foregoing circumstances, the Trustees shall
continue to hold office and may appoint successor Trustees.

Section 2.13. Resignation and Removal. Any Trustee may resign his trust
(without the need for any prior or subsequent accounting) by an instrument in
writing signed by him and delivered to the other Trustees and such resignation
shall be effective upon such delivery, or at a later date according to the terms
of the instrument. Any of the Trustees may be removed (provided the aggregate
number of Trustees after such removal shall not be less than one) with cause, by
the action of two-thirds of the remaining Trustees. Any Trustee may be removed
at any meeting of Shareholders by vote of two-thirds of the Outstanding Shares.
The Trustees shall promptly call a meeting of the Shareholders for the purpose
of voting upon the question of removal of any such Trustee or Trustees when
requested in writing so to do by the holders of not

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<PAGE>

less than ten percent of the Outstanding Shares and, in that connection, the
Trustees will assist shareholder communications to the extent provided for in
Section 16(c) under the 1940 Act. Upon the resignation or removal of a Trustee,
or his otherwise ceasing to be a Trustee, he shall execute and deliver such
documents as the remaining Trustees shall require for the purpose of conveying
to the Trust or the remaining Trustees any Trust Property or property of any
series of the Trust held in the name of the resigning or removed Trustee. Upon
the incapacity or death of any Trustee, his legal representative shall execute
and deliver on his behalf such documents as the remaining Trustees shall require
as provided in the preceding sentence.

Section 2.14. Vacancies. The term of office of a Trustee shall terminate
and a vacancy shall occur in the event of the death, resignation, removal,
bankruptcy, adjudicated incompetence or other incapacity to perform the duties
of the office of a Trustee. No such vacancy shall operate to annul the
Declaration or to revoke any existing agency created pursuant to the terms of
the Declaration. In the case of an existing vacancy, including a vacancy
existing by reason of an increase in the number of Trustees, subject to the
provisions of Section 16(a) of the 1940 Act, the remaining Trustees shall fill
such vacancy by the appointment of such other person as they in their discretion
shall see fit, made by a written instrument signed by a majority of the Trustees
then in office. Any such appointment shall not become effective, however, until
the person named in the written instrument of appointment shall have accepted in
writing such appointment and agreed in writing to be bound by the terms of the
Declaration. An appointment of a Trustee may be made in anticipation of a
vacancy to occur at a later date by reason of retirement, resignation or
increase in the number of Trustees, provided that such appointment shall not
become effective prior to such retirement, resignation or increase in the number
of Trustees. Whenever a vacancy in the number of Trustees shall occur, until
such vacancy is filled as provided in this Section 2.14, the Trustees in office,
regardless of their number, shall have all the powers granted to the Trustees
and shall discharge all the duties imposed upon the Trustees by the Declaration.
A written instrument certifying the existence of such vacancy signed by a
majority of the Trustees in office shall be conclusive evidence of the existence
of such vacancy.

Section 2.15. Delegation of Power to Other Trustees. Any Trustee may, by
power of attorney, delegate his power for a period not to exceed six (6) months
at any one time to any other Trustee or Trustees; provided that in no case shall
less than two (2) Trustees personally exercise the powers granted to the
Trustees under this Declaration except as herein otherwise expressly provided.

ARTICLE III

CONTRACTS

Section 3.1. Distribution Contract. The Trustees may in their discretion
from time to time enter into an exclusive or non-exclusive underwriting contract
or contracts providing for the sale of the Shares at a price based on the net
asset value of a Share, whereby the Trustees may either agree to sell the Shares
to the other party to the contract or appoint such other party their sales agent
for the Shares, and in either case on such terms and conditions, if any, as may
be

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prescribed in the By-Laws, and such further terms and conditions as the Trustees
may in their discretion determine not inconsistent with the provisions of this
Article III or of the By-Laws; and such contract may also provide for the
repurchase of the Shares by such other party as agent of the Trustees. Such
contract may also further provide that such other party may enter into selected
dealer agreements with registered securities dealers to further the purpose of
the distribution or repurchase of the Shares. The foregoing services may be
provided by one or more persons.

Section 3.2. Advisory or Management Contract. The Trustees may in their
discretion from time to time enter into an investment advisory or management
contract or separate advisory contracts with respect to one or more Series
whereby the other party to such contract shall undertake to furnish to the Trust
such management, investment advisory, statistical and research facilities and
services and such other facilities and services, if any, and all upon such terms
and conditions as the Trustees may in their discretion determine, including the
grant of authority to such other party to determine what securities shall be
purchased or sold by the Trust and what portion of its assets shall be
uninvested, which authority shall include the power to make changes in the
investments of the Trust or any Series.

The Trustees may also employ, or authorize the Investment Adviser to
employ, one or more sub-advisers from time to time to perform such of the acts
and services of the Investment Adviser and upon such terms and conditions as may
be agreed upon between the Investment Adviser and such sub-advisers and approved
by the Trustees. Any reference in this Declaration to the Investment Adviser
shall be deemed to include such sub-advisers unless the context otherwise
requires.

Section 3.3. Administrator. The Trustees may in their discretion from time
to time enter into one or more administrative services contracts whereby the
other party to each such contract shall undertake to furnish such administrative
services to the Trust as the Trustees shall from time to time consider desirable
and all upon such terms and conditions as the Trustees may in their discretion
determine, provided that such terms and conditions are not inconsistent with the
provisions of this Declaration or the By-Laws. Such services may be provided by
one or more persons.

Section 3.4. Transfer Agent and Shareholder Servicing Agents. The Trustees
may in their discretion from time to time enter into one or more transfer agency
contracts and one or more shareholder servicing contracts whereby the other
party to each such contract shall undertake to furnish such transfer agency
and/or shareholder services to the Trust as the Trustees shall from time to time
consider desirable and all upon such terms and conditions as the Trustees may in
their discretion determine, provided that such terms and conditions are not
inconsistent with the provisions of this Declaration or the By-Laws. Such
services may be provided by one or more Persons.

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<PAGE>

Section 3.5. Affiliations of Trustees or Officers, Etc.

The fact that:

(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholders, director, officer, partner, trustee, employee, manager,
adviser or distributor of or for any partnership, corporation, trust,
association or other organization or of or for any parent or affiliate of
any organization, with which a contract of the character described in
Sections 3.1, 3.2, 3.3 or 3.4 above or any Custodian contract as described
in Article X of the By-Laws, or for related services may have been or may
hereafter be made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder of or has an interest in the Trust, or
that

(ii) any partnership, corporation, trust, association or other
organization with which a contract of the character described in Sections
3.1, 3.2, 3.3 or 3.4 above or for services as Custodian or for related
services may have been or may hereafter be made also has any one or more
of such contracts with one or more other partnerships, corporations,
trusts, associations, or other organizations, or has other business or
interests, shall not affect the validity of any such contract or
disqualify any Shareholder, Trustee or officer of the Trust from voting
upon or executing the same or create any liability or accountability to
the Trust or its Shareholders.

Section 3.6. Compliance with 1940 Act. Any contract entered into pursuant
to Sections 3.1 or 3.2, shall be consistent with and subject to the requirements
of Section 15 of the 1940 Act (including any amendment thereof or other
applicable act of Congress hereafter enacted), as modified by any applicable
order or orders of the Commission, with respect to its continuance in effect,
its termination and the method of authorization and approval of such contract or
renewal thereof.

ARTICLE IV

LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OFFICERS

Section 4.1. No Personal Liability of Shareholders, Trustees, Etc. No
Shareholder shall be subject to any personal liability whatsoever to any Person
in connection with Trust property or the acts, obligations or affairs of the
Trust. No Trustee, officer, employee or agent of the Trust shall be subject to
any personal liability whatsoever to any Person, other than to the Trust or its
Shareholders, in connection with Trust property or the affairs of the Trust,
save only that arising from bad faith, willful misfeasance, gross negligence or
reckless disregard of his duties with respect to such Person; and all such
Persons shall look solely to the Trust Property for satisfaction of claims of
any nature arising in connection with the affairs of the Trust. If any
Shareholder, Trustee, officer, employee, or agent, as such, of the Trust, is
made a party to any

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<PAGE>

suit or proceeding to enforce any such liability of the Trust, he shall not, on
account thereof, be held to any personal liability. The Trust shall indemnify
and hold each Shareholder harmless from and against all claims and liabilities,
to which such Shareholder may become subject by reason of his being or having
been a Shareholder, and shall reimburse such Shareholder for all legal and other
expenses reasonably incurred by him in connection with any such claim or
liability. The indemnification and reimbursement required by the preceding
sentence shall be made only out of the assets of the one or more Series of which
the Shareholder who is entitled to indemnification or reimbursement was a
Shareholder at the time the act or event occurred which gave rise to the claim
against or liability of said Shareholder. The rights accruing to a Shareholder
under this Section 4.1 shall not impair any other right to which such
Shareholder may be lawfully entitled, nor shall anything herein contained
restrict the right of the Trust to indemnify or reimburse a Shareholder in any
appropriate situation even though not specifically provided herein.

Section 4.2. Non-Liability of Trustees, Etc. No Trustee, officer, employee
or agent of the Trust shall be liable to the Trust, its Shareholders, or to any
Shareholder, Trustee, officer, employee, or agent thereof for any action or
failure to act (including without limitation the failure to compel in any way
any former or acting Trustee to redress any breach of trust) except for his own
bad faith, willful misfeasance, gross negligence or reckless disregard of the
duties involved in the conduct of his office.

Section 4.3. Mandatory Indemnification. (a) Subject to the exceptions and
limitations contained in paragraph (b) below:

(ii) the words "claim," "action," "suit," or "proceeding" shall apply to
all claims, actions, suits or proceedings (civil, criminal, administrative
or other, including appeals), actual or threatened; and the words
"liability" and "expenses" shall include, without limitation, attorneys
fees, costs, judgments, amounts paid in settlement, fines, penalties and
other liabilities.

(b) No indemnification shall be provided hereunder to a Trustee or
officer:

(i) against any liability to the Trust, a Series thereof, or the
Shareholders by reason of a final adjudication by a court or other
body before which a proceeding was brought that he engaged in
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office;

(ii) with respect to any matter as to which he shall have been
finally adjudicated

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<PAGE>

not to have acted in good faith in the reasonable belief that his
action was in the best interest of the Trust; or

(iii) in the event of a settlement or other disposition not
involving a final adjudication as provided in paragraph (b)(i) or
(b)(ii) resulting in a payment by a Trustee or officer, unless there
has been a determination that such Trustee or officer did not engage
in willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office:

(A) by the court or other body approving the settlement or
other disposition; or

(B) based upon a review of readily available facts (as opposed
to a full trial-type inquiry) by (x) vote of a majority of the
Disinterested Trustees acting on the matter (provided that a
majority of the Disinterested Trustees then in office act on
the matter) or (y) written opinion of independent legal
counsel.

(c) The rights of indemnification herein provided may be insured against
by policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Trustee or officer may now or hereafter be entitled,
shall continue as to a person who has ceased to be such Trustee or officer and
shall inure to the benefit of the heirs, executors, administrators and assigns
of such a person. Nothing contained herein shall affect any rights to
indemnification to which personnel of the Trust other than Trustees and officers
may be entitled by contract or otherwise under law.

(d) Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in paragraph (a) of this
Section 4.3 may be advanced by the Trust prior to final disposition thereof upon
receipt of an undertaking by or on behalf of the recipient to repay such amount
if it is ultimately determined that he is not entitled to indemnification under
this Section 4.3, provided that either:

(i) such undertaking is secured by a surety bond or some other appropriate
security provided by the recipient, or the Trust shall be insured against
losses arising out of any such advances; or

As used in this Section 4.3, a "Disinterested Trustee" is one who is not
(i) an Interested Person of the Trust (including anyone who has been exempted
from being an Interested Person by any rule, regulation or order of the
Commission), or (ii) involved in the

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<PAGE>

claim, action, suit or proceeding.

Section 4.4. No Bond Required of Trustees. No Trustee shall be obligated
to give any bond or other security for the Performance of any of his duties
hereunder.

Section 4.5. No Duty of Investigation; Notice in Trust Instruments, Etc.
No purchaser, lender, transfer agent or other Person dealing with the Trustees
or any officer, employee or agent of the Trust shall be bound to make any
inquiry concerning the validity of any transaction purporting to be made by the
Trustees or by said officer, employee or agent or be liable for the application
of money or property paid, loaned, or delivered to or on the order of the
Trustees or of said officer, employee or agent. Every obligation, contract,
instrument, certificate, Share, other security of the Trust or undertaking, and
every other act or thing whatsoever executed in connection with the Trust shall
be conclusively presumed to have been executed or done by the executors thereof
only in their capacity as Trustees under this Declaration or in thier capacity
as officers, employees or agents of the Trust. Every written obligation,
contract, instrument, certificate, share, other security of the Trust or
undertaking made or issued by the Trustees may recite that the same is executed
or made by them not individually, but as Trustees under the Declaration, and
that the obligations of the Trust under any such instrument are not binding upon
any of the Trustees or Shareholders individually, but bind only the trust
estate, and may contain any further recital which they or he may deem
appropriate, but the omission of such recital shall not operate to bind the
Trustees individually. The Trustees shall at all times maintain insurance for
the protection of the Trust Property, its Shareholders, Trustees, officers,
employees and agents in such amount as the Trustees shall deem adequate to cover
possible tort liability, and such other insurance as the Trustees in their sole
judgment shall deem advisable.

Section 4.6. Reliance on Experts, Etc. Each Trustee and officer or
employee of the Trust shall, in the performance of his duties, be fully and
completely justified and protected with regard to any act or any failure to act
resulting from reliance in good faith upon the books of account or other records
of the Trust, upon an opinion of counsel, or upon reports made to the Trust by
any of its officers or employees or by the Investment Adviser, the Distributor,
Transfer Agent, selected dealers, accountants, appraisers or other experts or
consultants selected with reasonable care by the Trustees, officers or employees
of the Trust, regardless of whether such counsel or expert may also be a
Trustee.

ARTICLE V

SHARE OF BENEFICIAL INTEREST

Section 5.1. Beneficial Interest. The interest of the beneficiaries
hereunder shall be divided into transferable Shares of beneficial interest, all
of one class, except as provided in Section 5.11 and Section 5.13 hereof, par
value $.01 per share. The number of Shares of beneficial interest authorized
hereunder is unlimited. All Shares issued hereunder including, without
limitation, Shares issued in connection with a dividend in Shares or a split of
shares, shall be fully paid and non-assessable.

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<PAGE>

Section 5.2. Rights of Shareholders. The ownership of the Trust Property
and the property of each Series of the Trust of every description and the right
to conduct any business hereinbefore described are vested exclusively in the
Trustees, and the Shareholders shall have no interest therein other than the
beneficial interest conferred by their Shares, and they shall have no right to
call for any partition or division of any property, profits, rights or interests
of the Trust nor can they be called upon to share or assume any losses of the
Trust nor can they suffer an assessment of any kind by virtue of their ownership
of Shares. The Shares shall be personal property giving only the rights
specifically set forth in this Declaration. The Shares shall not entitle the
holder to preference, preemptive, appraisal, conversion or exchange rights,
except as the Trustees may determine with respect to any Series of Shares.

Section 5.3. Trust Only. It is the intention of the Trustees to create
only the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in this Declaration of Trust shall be construed to make the
Shareholders, either by themselves or with the Trustees, partners or member of a
joint stock association.

Section 5.4. Issuance of Shares. The Trustees in their discretion may,
from time to time without vote of the Shareholders, issue Shares, in addition to
the then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, including cash
or property, at such time or times and on such terms as the Trustees may deem
best, and may in such manner acquire other assets (including the acquisition of
assets subject to, and in connection with the assumption of liabilities) and
businesses. In connection with any issuance of Shares, the Trustees may issue
fractional Shares and Shares held in the treasury. The Trustees may from time to
time divide or combine the Shares into a greater or lesser number without
thereby changing the proportionate beneficial interests in the Trust.
Contributions to the Trust may be accepted for, and Shares shall be redeemed as,
whole Shares and/or 1/1,000ths of a Share or integral multiples thereof.

Section 5.5. Register of Shares. A register shall be kept at the principal
office of the Trust or an office of the Transfer Agent which shall contain the
names and addresses of the Shareholders and the number of Shares held by them
respectively and a record of all transfers thereof. Such register shall be
conclusive as to who are the holders of the Shares and who shall be entitled to
receive dividends or distributions or otherwise to exercise or enjoy the rights
of Shareholders. No Shareholder shall be entitled to receive payment of any
dividend or distribution, nor to have notice given to him as herein or in the
By-Laws provided, until he has given his address to the Transfer Agent or such
other officer or agent of the Trustees as shall keep the said register for entry
thereon. It is not contemplated that certificates will be issued for the Shares;
however, the Trustees, in their discretion, may authorize the issuance of share
certificates and promulgate appropriate rules and regulations as to their use.

Section 5.6. Transfer of Shares. Except as otherwise provided by the
Trustees, shares shall be transferable on the records of the Trust only by the
record holder thereof or by his

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<PAGE>

agent thereunto duly authorized in writing, upon delivery to the Trustees or the
Transfer Agent of a duly executed instrument of transfer, together with such
evidence of the genuineness of each such execution and authorization and of
other matter as may reasonably be required. Upon such delivery the transfer
shall be recorded on the register of the Trust. Until such record is made, the
Shareholder of record shall be deemed to be the holder of such Shares for all
purposes hereunder and neither the Trustees nor any transfer agent or registrar
nor any officer, employee or agent of the Trust shall be affected by any notice
of the proposed transfer.

Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent, but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law.

Section 5.7. Notices, Reports. Any and all notices to which any
Shareholder may be entitled and any and all communications shall be deemed duly
served or given if mailed, postage prepaid, addressed to any Shareholder of
record at his last known address as recorded on the register of the Trust. A
notice of a meeting, an annual report and any other communication to
Shareholders need not be sent to a Shareholder (i) if an annual report and a
proxy statement for two consecutive shareholder meetings have been mailed to
such Shareholders address and have been returned as undeliverable, (ii) if all,
and at least two, checks (if sent by first class mail) in payment of dividends
on Shares during a twelve-month period have been mailed to such Shareholder's
address and have been returned as undeliverable or (iii) in any other case in
which a proxy statement concerning a meeting of security holders is not required
to be given pursuant to the Commission's proxy rules as from time to time in
effect under the Securities Exchange Act of 1934. However, delivery of such
proxy statements, annual reports and other communications shall resume if and
when such Shareholder delivers or cause to be delivered to the Trust written
notice setting forth such Shareholder's then current address.

Section 5.8. Treasury Shares. Shares held in the treasury shall, until
reissued pursuant to Section 5.4, not confer any voting rights on the Trustees,
nor shall such Shares be entitled to any dividends or other distributions
declared with respect to the Shares.

Section 5.9. Voting Powers. The Shareholders shall have power to vote only
(i) for the election of Trustees as provided in Section 2.12; (ii) for the
removal of Trustees as provided in Section 2.13; (iii) with respect to any
investment advisory or management contract entered into pursuant to Section 3.2;
(iv) with respect to termination of the Trust as provided in Section 8.2; (v)
with respect to any amendment of this Declaration to the extent and as provided
in Section 8.3; (vi) with respect to any merger, consolidation or sale of assets
as provided in Section 8.4; (vii) with respect to incorporation of the Trust or
any Series to the extent and as provided in Section 8.5; (viii) to the same
extent as the stockholders of a Massachusetts business corporation as to whether
or not a court action, proceeding or claim should or should not be

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<PAGE>

bought or maintained derivitavely or as a class action on behalf of the Trust or
any Series or Class thereof or the Shareholders (provided, however, that a
Shareholder of a particular Series or Class shall not be entitled to a
derivative or class action on behalf of any other Series or Class (or
Shareholder of any other Series or Class) of the Trust); (ix) with respect to
any plan adopted pursuant to Rule 12b-1 (or any successor rule) under the 1940
Act; and (x) with respect to such additional matters relating to the Trust as
may be required by this Declaration, the By-Laws or any registration of the
Trust as an investment company under the 1940 Act with the Commission (or any
successor agency) or as the Trustees may consider necessary or desirable. Each
whole Share shall be entitled to one vote as to any matter on which it is
entitled to vote and each fractional Share shall be entitled to a proportionate
fractional vote, except that the Trustees may, in conjunction with the
establishment of any Series or Class of Shares, establish or reserve the right
to establish conditions under which the several Series or Classes shall have
separate voting rights or, if a Series or Class would not, in the sole judgment
of the Trustees, be materially affected by a proposal, no voting rights. There
shall be no cumulative voting in the election of Trustees. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take any
action required by law, this Declaration or the By-laws to be taken by
Shareholders. The By-laws may include further provisions for Shareholders votes
and meetings and related matters.

Section 5.10. Meetings of Shareholders. Meetings of Shareholders may be
called at any time by the President, and shall be called by the President and
Secretary at the request in writing or by resolution, of a majority of Trustees,
or at the written request of the holder or holders of ten percent (10%) or more
of the total number of Shares then issued and outstanding of the Trust entitled
to vote at such meeting. Any such request shall state the purpose of the
proposed meeting. At any meeting of Shareholders of the Trust or of any series
of the Trust, a Shareholder Servicing Agent may vote any shares as to which such
Shareholder Servicing Agent is the Agent of record and which are not otherwise
represented in person or by proxy at the meeting, proportionately in accordance
with the votes cast by holders of all shares otherwise represented at the
meeting in person or by proxy as to which such Shareholder Servicing Agent is
the agent of record. Any shares so voted by a Shareholder Servicing Agent will
be deemed represented at the meeting for quorum purposes.

Section 5.11. Series Designation. The Trustees, in their discretion, may
authorize the division of Shares into two or more Series, and the different
Series shall be established and designated, and the variations in the relative
rights and preferences as between the different Series shall be fixed and
determined, by the Trustees; provided, that all Shares shall be identical except
that there may be variations so fixed and determined between different Series as
to investment objective, purchase price, allocation of expenses, right of
redemption, special and relative rights as to dividends and on liquidation,
conversion rights, and conditions under which the several Series shall have
separate voting rights. All references to Shares in this Declaration shall be
deemed to be Shares of any or all series as the context may require.

If the Trustees shall divide the Shares of the Trust into two or more
Series, the following provisions shall be applicable:

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(a) All provisions herein relating to the Trust shall apply equally to
each Series of the Trust except as the context requires otherwise.

(b) The number of authorized Shares and the number of Shares of each
Series that may be issued shall be unlimited. The Trustees may classify or
reclassify any unissued Shares or any Shares previously issued and reacquired of
any Series into one or more Series that may be established and designated from
time to time. The Trustees may hold as treasury Shares (of the same or some
other Series), reissue for such consideration and on such terms as they may
determine, or cancel any Shares of any Series reacquired by the Trust at their
discretion from time to time.

(c) All consideration received by the Trust for the issue or sale of
Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the rights
of creditors of such Series and except as may otherwise be required by
applicable laws, and shall be so recorded upon the books of account of the
Trust. In the event that there are any assets, income, earnings, profits, and
proceeds thereof, funds, or payments which are not readily identifiable as
belonging to any particular Series, the Trustees shall allocate them among any
one or more of the Series established and designated from time to time in such
manner and on such basis as they, in their sole discretion, deem fair and
equitable. Each such allocation by the Trustees shall be conclusive and binding
upon the shareholders of all Series for all purposes.

(d) The assets belonging to each particular Series shall be charged with
the liabilities of the Trust in respect of that Series and all expenses, costs,
charges and reserves attributable to that Series, and any general liabilities,
expenses, costs charges or reserves of the Trust which are not readily
identifiable as belonging to any particular Series shall be allocated and
charged by the Trustees to and among any one or more of the Series established
and designated from time to time in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders of all Series for all purposes. The
Trustees shall have full discretion, to the extent not inconsistent with the
1940 Act, to determine which items are capital; and each such determination and
allocation shall be conclusive and binding upon the Shareholders. The assets of
a particular Series of the Trust shall, under no circumstances, be charged with
liabilities attributable to any other Series of the Trust. All persons extending
credit to, or contracting with or having any claim against a particular Series
of the Trust shall look only to the assets of that particular Series for payment
of such credit, contract or claim. No Shareholder or former Shareholder of any
Series shall have any claim on or right to any assets allocated or belonging to
any other series.

(e) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a Series
shall be entitled to receive his pro rata share of distributions of income and
capital gains made with respect to such Series. Upon

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redemption of his Shares or indemnification for liabilities incurred by reason
of his being or having been a Shareholder of a Series, such shareholder shall be
paid solely out of the funds and property of such Series of the Trust. Upon
liquidation or termination of a Series of the Trust, Shareholders of such Series
shall be entitled to receive a pro rata share of the net assets of such Series.
A Shareholder of a particular Series of the Trust shall not be entitled to
participate in a derivative or class action on behalf of any other Series or the
Shareholders of any other Series of the Trust.

(f) The establishment and designation of any Series of Shares shall be
effective upon the execution by a majority of the then Trustees of an instrument
setting forth such establishment and designation and the relative rights and
preferences of such Series, or as otherwise provided in such instrument. The
Trustees may by an instrument executed by a majority of their number abolish any
Series and the establishment and designation thereof. Except as otherwise
provided in this Article V, the Trustees shall have the power to determine the
designations, preferences, privileges, limitations and rights, of each class and
Series of Shares. Each instrument referred to in this paragraph shall have the
status of an amendment to this Declaration.

Section 5.12. Assent to Declaration of Trust. Every Shareholder, by virtue
of having become a shareholder, shall be held to have expressly assented and
agreed to the terms hereof and to have become a party hereto.

Section 5.13. Class Designation. The Trustees, in their discretion, may
authorize the division of the Shares of the Trust, or, if any Series be
established, the Shares of any Series, into two or more Classes, and the
different Classes shall be established and designated, and the variations in the
relative rights and preferences as between the different Classes shall be fixed
and determined, by the Trustees; provided, that all Shares of the Trust or of
any Series shall be identical to all other Shares of the Trust or the same
Series, as the case may be, except that there may be variations between
different classes as to allocation of expenses, right of redemption, special and
relative rights as to dividends and on liquidation, conversion rights, and
conditions under which the several Classes shall have separate voting rights.
All references to Shares in this Declaration shall be deemed to be Shares of any
or all Classes as the context may require.

If the Trustees shall divide the Shares of the Trust or any Series into
two or more Classes, the following provisions shall be applicable:

(a) All provisions herein relating to the Trust, or any Series of the
Trust, shall apply equally to each class of Shares of the Trust or of any Series
of the Trust, except as the context requires otherwise.

(b) The number of Shares of each Class that may be issued shall be
unlimited. The Trustees may classify or reclassify any unissued Shares of the
Trust or any Series or any Shares previously issued and reacquired of any Class
of the Trust or of any Series into one or more Classes that may be established
and designated from time to time. The Trustees may hold as treasury Shares (of
the same or some other class), reissue for such consideration and on such

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terms as they may determine, or cancel any Shares of any Class reacquired by the
Trust at their discretion from time to time.

(c) Liabilities, expenses, costs, charges and reserves related to the
distribution of, and other identified expenses that should properly be allocated
to, the Shares of a particular Class may be charged to and borne solely by such
Class and the bearing of expenses solely by a Class of Shares may be
appropriately reflected (in a manner determined by the Trustees) and cause
differences in the net asset value attributable to, and the dividend, redemption
and liquidation rights of, the Shares of different Classes. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders of all Classes for all purposes.

(d) The establishment and designation of any Class of Shares shall be
effective upon the execution of a majority of the then Trustees of an instrument
setting forth such establishment and designation and the relative rights and
preferences of such Class, or as otherwise provided in such instrument. The
Trustees may, by an instrument executed by a majority of their number, abolish
any Class and the establishment and designation thereof. Each instrument
referred to in this paragraph shall have the status of an amendment to this
Declaration.

ARTICLE VI

REDEMPTION AND REPURCHASE OF SHARES

Section 6.1. Redemption of Shares. All Shares of the Trust shall be
redeemable, at the redemption price determined in the manner set out in this
Declaration. Redeemed or repurchased Shares may be resold by the Trust.

The Trust shall redeem the Shares upon the appropriately verified written
application of the record holder thereof (or upon such other form of request as
the Trustees may determine) at the office of the Transfer Agent, the Shareholder
Servicing Agent, which is the agent of record for such Shareholder, or at the
office of any bank or trust company, either in or outside the office of any bank
or trust company, either in or outside the Commonwealth of Massachusetts, which
is a member of the Federal Reserve System and which the said Transfer Agent or
the said Shareholder Servicing Agent has designated for that purpose, or at such
office or agency as may be designated from time to time in the Trust's then
effective registration statement under the Securities Act of 1933. The Trustees
may from time to time specify additional conditions, not inconsistent with the
1940 Act, regarding the redemption of Shares in the Trust's then effective
registration statement under the Securities Act of 1933.

Section 6.2. Price. Shares shall be redeemed at their net asset value
determined as set forth in Section 7.1 hereof as of such time as the Trustees
shall have theretofore prescribed by resolution. In the absence of such
resolution, the redemption price of Shares deposited shall be the net asset
value of such Shares next determined as set forth in Section 7.1 hereof after
receipt of such application.

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Section 6.3. Payment. Payment for such Shares shall be made in cash or in
property out of the assets of the relevant series of the Trust to the
Shareholder of record at such time and in the manner, not inconsistent with the
1940 Act or other applicable laws, as may be specified from time to time in the
Trust's then effective registration statement under the Securities Act of 1933,
subject to the provisions of Section 6.4 hereof.

Section 6.4. Effect of Suspension of Determination of Net Asset Value. If,
pursuant to Section 6.9 hereof, the Trustees shall declare a suspension of the
determination of net asset value, the rights of Shareholders (including those
who shall have applied for redemption pursuant to Section 6.1 hereof but who
shall not yet have received payment) to have Shares redeemed and paid for by the
Trust shall be suspended until the termination of such suspension is declared.
Any record holder who shall have his redemption right so suspended may, during
the period of such suspension, by appropriate written notice of revocation at
the office or agency where application was made, revoke any application for
redemption not honored and withdraw any certificates on deposit. The redemption
price of Shares for which redemption applications have not been revoked shall be
the net asset value of such Shares next determined as set forth in Section 7.1
after the termination of such suspension, and payment shall be made within seven
(7) days after the date upon which the application was made plus the period
after such application during which the determination of net asset value was
suspended.

Section 6.5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the purpose
by agreement with the owner thereof at a price not exceeding the net asset value
per share determined as of the time when the purchase or contract of purchase is
made or the net asset value as of any time which may be later determined
pursuant to Section 7.1 hereof, provided payment is not made for the Shares
prior to the time as of which such net asset value is determined.

Section 6.6 Redemption of Sub-Minimum Accounts. The Trust shall have the
right at any time without prior notice to the shareholder to redeem shares of
any shareholder for their then current net asset value per share if at such time
the shareholder own Shares having an aggregate net asset value of less than an
amount set forth from time to time by the Trustees, subject to such terms and
conditions as the Trustees may approve, and subject to the Trust's giving
general notice to all shareholders of its intention to avail itself of such
right, either by publication in the Trust's registration statement, if any, or
by such other means as the Trustees may determine.

Section 6.7. Redemption of Shares in Order to Qualify as Regulated
Investment Company; Disclosure of Holding. If the Trustees shall, at any time
and in good faith, be of the opinion that direct or indirect ownership of Shares
or other securities of the Trust has or may become concentrated in any Person to
an extent which would disqualify any Series of the Trust as a regulated
investment company under the Internal Revenue Code, then the Trustees shall have
the power by lot or other means deemed equitable by them (i) to call for
redemption by any such Person a number, or principal amount, of Shares or other
securities of the Trust sufficient to maintain or bring the direct or indirect
ownership of Shares or other securities of the Trust into

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conformity with the requirements for such qualification, and (ii) to refuse to
transfer or issue Shares or other securities of the Trust to any Person whose
acquisition of the Shares or other securities of the Trust in question would
result in such disqualification. The redemption shall be effected at the
redemption price and in the manner provided in Section 6.1.

The holders of Shares or other securities of the Trust shall upon demand
disclose to the Trustees in writing such information with respect to direct and
indirect ownership of Shares or other securities of the Trust as the Trustees
deem necessary to comply with the provisions of the Internal Revenue Code, or to
comply with the requirements of any other taxing authority.

Section 6.8. Reductions in Number of Outstanding Shares Pursuant to Net
Asset Value Formula. The Trust may also reduce the number of Outstanding Shares
pursuant to the provisions of Section 7.3.

Section 6.9. Suspension of Right of Redemption. The Trust may declare a
suspension of the right of redemption or postpone the date of payment or
redemption for the whole or any part of any period (i) during which the New York
Stock Exchange is closed other than customary week-end and holiday closings,
(ii) during which trading on the New York Stock Exchange is restricted, (iii)
during which an emergency exists as a result of which disposal by the Trust of
securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Trust fairly to determine the value of its net assets, or
(iv) during any other period when the Commission may for the protection of
Shareholders of the Trust by order permit suspension of the right of redemption
or postponement of the date of payment or redemption; provided that applicable
rules and regulations of the Commission shall govern as to whether the
conditions prescribed in (ii), (iii), or (iv) exist. Such suspension shall take
effect at such time as the Trust shall specify but not later than the close of
business on the business day next following the declaration of suspension, and
thereafter there shall be no right of redemption or payment on redemption until
the Trust shall declare the suspension at an end, except that the suspension
shall terminate in any event on the first day on which said stock exchange shall
have reopened or the Period specified in (ii) or (iii) shall have expired (as to
which in the absence of an official ruling by the Commission, the determination
of the Trust shall be conclusive). In the case of a suspension of the right of
redemption, a Shareholder may either withdraw his request for redemption or
receive payment based on the net asset value existing after the termination of
the suspension.

ARTICLE VII

DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS

Section 7.1. Net Asset Value. The value of the assets of the Trust or any
Series of the Trust shall be determined by appraisal of the securities of the
Trust or allocated to such Series, such appraisal to be on the basis of the
amortized cost of such securities in the case of money market securities, market
value in the case of other securities, or by such other method as

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shall be deemed to reflect the fair value thereof, determined in good faith by
or under the direction of the Trustees. From the total value of said assets,
there shall be deducted all indebtedness, interest, taxes, payable or accrued,
including estimated taxes on unrealized book profits, expenses and management
charges accrued to the appraisal date, net income determined and declared as a
distribution and all other items in the nature of liabilities attributable to
the Trust or such Series or Class thereof which shall be deemed appropriate. The
net asset value of a Share shall be determined by dividing the net asset value
of the Class, or, if no Class has been established, of the Series, or if no
Series has been established, of the Trust, by the number of Shares of that
Class, or Series, of the Trust as applicable, outstanding. The net asset value
of Shares of the Trust or any Class or Series of the Trust shall be determined
pursuant to the procedure and methods prescribed or approved by the Trustees in
their discretion and as set forth in the most recent Registration Statement of
the Trust as filed with the Securities and Exchange Commission pursuant to the
requirements of the Securities Act of 1933, as amended, the Investment Company
Act of 1940, as amended, and the Rules thereunder. The net asset value of the
Shares shall be determined at least once on each business day, as of the close
of trading on the New York Stock Exchange or as of such other time or times as
the Trustees shall determine. The power and duty to make the daily calculations
may be delegated by the Trustees to the Investment Adviser, the custodian, the
Transfer Agent or such other person as the Trustees may determine by resolution
or by approving a contract which delegates such duty to another Person. The
Trustees may suspend the daily determination of net asset value to the extent
permitted by the 1940 Act.

Section 7.2. Distributions to Shareholders. The Trustees shall from time
to time distribute ratably among the Shareholders of the Trust or a Series such
proportion of the net profits, surplus (including paid-in surplus), capital, or
assets of the Trust or such Series held by the Trustees as they may deem proper.
Such distributions may be made in cash or property (including without limitation
any type of obligations of the Trust or such Series or any assets thereof), and
the Trustees may distribute ratably among the Shareholders additional Shares of
the Trust or such Series issuable hereunder in such manner, at such times, and
on such terms as the Trustees may deem proper. Such distributions may be among
the Shareholders of record at the time of declaring a distribution or among the
Shareholders of record at such other date or time or dates or times as the
Trustees shall determine. To the extent the Trustees deem it appropriate as a
matter of administrative convenience, distributions to Shareholders may be
effected on different dates to different Shareholders, provided that such
distributions shall be made at regularly occurring intervals of approximately
the same length with respect to each Shareholder of the Trust. The Trustees may
in their discretion determine that, solely for the purposes of such
distributions, Outstanding Shares shall exclude Shares for which orders have
been placed subsequent to a specified time on the date the distribution is
declared or on the preceding day if the distribution is declared as of a day on
which Boston banks are not open for business, all as described in the
registration statement under the Securities Act of 1933. The Trustees may always
retain from the net profits such amount as they may deem necessary to pay the
debts or expenses of the Trust or the Series or to meet obligations of the Trust
or the Series, or as they may deem desirable to use in the conduct of its
affairs or to retain for future requirements or extensions of the business. The
Trustees may adopt and offer to Shareholders such dividend reinvestment plans,
cash dividend payout plans or related plans as the Trustees shall deem

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appropriate.

Inasmuch as the computation of net income and gains for Federal income tax
purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust or the Series to avoid or reduce liability for taxes.

Section 7.3. Determination of Net Income; Constant Net Asset Value;
Reduction of Outstanding Shares. Subject to Section 5.11 hereof, the net income
of the Trust or any Series shall be determined in such manner as the Trustees
shall provide by resolution. Expenses of the Trust or a Series, including the
advisory or management fee and service fees, shall be accrued each day. Such net
income may be determined by or under the direction of the Trustees as of the
close of trading on the New York Stock Exchange on each day on which such
Exchange is open or as of such other time or times as the Trustees shall
determine, and, except as provided therein, all the net income of the Trust or
any Series, as so determined, may be declared as a dividend on the Outstanding
Shares of the Trust or such Series. If for any reason, the net income of the
Trust or any Series, determined at any time is a negative amount, the Trustees
shall have the power with respect to the Trust or such Series (i) to offset each
Shareholder's pro rata shares of such negative amount from the accrued dividend
account of such Shareholder, or (ii) to reduce the number of Outstanding Shares
of the Trust or such Series by reducing the number of Shares in the account of
such Shareholder by that number of full and fractional Shares which represents
the amount of such excess negative net income, or (iii) to cause to be recorded
on the books of the Trust or such Series an asset account in the amount of such
negative net income, which account may be reduced by the amount, provided that
the same shall thereupon become the property of the Trust or such Series with
respect to the Trust or such Series and shall not be paid to any Shareholder, of
dividends declared thereafter upon the Outstanding Shares of the Trust or such
Series on the day such negative net income is experienced, until such asset
account is reduced to zero, or (iv) to combine the methods described in clauses
(i) and (ii) and (iii) of this sentence, in order to cause the net asset value
per Share of the Trust or such Series to remain at a constant amount per
Outstanding Share immediately after each such determination and declaration. The
Trustees shall also have the power to fail to declare a dividend out of net
income for the purpose of causing the net asset value per share to be increased
to a constant amount. The Trustees shall not be required to adopt, but may at
any time adopt, discontinue or amend the practice of maintaining the net asset
value per Share of the Trust or a Series at a constant amount.

Section 7.4. Allocation Between Principal and Income. The Trustees shall
have full discretion to determine whether any cash or property received shall be
treated as income or as principal and whether any item of expense shall be
charged to the income or the principal account, and their determination made in
good faith shall be conclusive upon the Shareholders. In the case of stock
dividends received, the Trustees shall have full discretion to determine, in the
light of the particular circumstances, how much if any of the value thereof
shall be treated as income, the balance, if any, to be treated as principal.

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Section 7.5. Power to Modify Foregoing Procedures. Notwithstanding any of
the foregoing provisions of this Article VII, the Trustees may prescribe, in
their absolute discretion, such other bases and times for determining the per
Share net asset value or net income, or the declaration and payment of dividends
and distributions as they may deem necessary or desirable.

ARTICLE VIII

DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC.

Section 8.1. Duration. The Trust shall continue without limitation of time
but subject to the provisions of this Article VIII.

Section 8.2. Termination of Trust. (a) The Trust or any Series of the
Trust may be terminated by an instrument in writing signed by a majority of the
Trustees, or by the affirmative vote of the holders a majority of the Shares of
the Trust or Series outstanding and entitled to vote, at any meeting of
Shareholders. Upon the termination of the Trust or any Series,

(i) the Trust or any Series shall carry on no business except for the
purpose of winding up its affairs;

(ii) the Trustees shall proceed to wind up the affairs of the Trust or
Series and all of the powers of the Trustees under this Declaration shall
continue until the affairs of the Trust or Series shall have been wound up,
including the power to fulfill or discharge the contracts of the Trust or
Series, collect its assets, sell, convey, assign, exchange, transfer or
otherwise dispose of all or any part of the remaining Trust Property or property
of the Series to one or more persons at public or private sale for consideration
which may consist in whole or in part of cash, securities or other property of
any kind, discharge or pay its liabilities, and do all other acts appropriate to
liquidate its business; and

(iii) after paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property or property of the Series, in cash or in
kind or partly each, among the Shareholders of the Trust or Series according to
their respective rights.

(b) After termination of the Trust or any Series and distribution to the
Shareholders as herein provided, a majority of the Trustees shall execute and
lodge among the records of the Trust an instrument in writing setting forth the
fact of such termination, and the Trustees shall thereupon be discharged from
all further liabilities and duties hereunder, and the rights and interests of
all Shareholders of the Trust or Series shall thereupon cease.

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Section 8.3. Amendment Procedure. (a) This Declaration may be amended by a
vote of the holders of a majority of the Shares outstanding and entitled to
vote. Amendments shall be effective upon the taking of action as provided in
this section or at such later time as shall be specified in the applicable vote
or instrument. The Trustees may also amend this Declaration without the vote or
consent of Shareholders if they deem it necessary to conform this Declaration to
the requirements of applicable federal or state laws or regulations or the
requirements of the regulated investment company provisions of the Internal
Revenue Code (including those provisions of such Code relating to the retention
of the exemption from federal income tax with respect to dividends paid by the
Trust out of interest income received on Municipal Bonds), but the Trustees
shall not be liable for failing so to do. The Trustees may also amend this
Declaration without the vote or consent of Shareholders if they deem it
necessary or desirable to change the name of the Trust or to make any other
changes in the Declaration which do not materially adversely affect the rights
of Shareholders hereunder.

(b) No amendment may be made under this Section 8.3 which would change any
rights with respect to any Shares of the Trust or Series by reducing the amount
payable thereon upon liquidation of the Trust or Series or by diminishing or
eliminating any voting rights pertaining thereto, except with the vote or
consent of the holders of two-thirds of the Shares of the Trust or Series
outstanding and entitled to vote. Noting contained in this Declaration shall
permit the amendment of this Declaration to impair the exemption from personal
liability of the Shareholders, Trustees, officers, employees and agents of the
Trust or to permit assessments upon Shareholders.

(c) A certificate signed by a majority of the Trustees setting forth an
amendment and reciting that it was duly adopted by the Shareholders or by the
Trustees as aforesaid or a copy of the Declaration, as amended, and executed by
a majority of the Trustees, shall be conclusive evidence of such amendment when
lodged among the records of the Trust.

Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall have become
effective, this Declaration may be terminated or amended in any respect by the
affirmative vote of a majority of the Trustees or by an instrument signed by a
majority of the Trustees.

Section 8.4. Merger, Consolidation and Sale of Assets. The Trust or any
Series thereof may merge or consolidate with any other corporation, association,
trust or other organization or may sell, lease or exchange all or substantially
all of the Trust Property or the property of any Series, including its good
will, upon such terms and conditions and for such consideration when and as
authorized at any meeting of Shareholders of the Trust or Series called for the
purpose by the affirmative vote of the holders of a majority of the Shares of
the Trust or Series.

Section 8.5. Incorporation. With the approval of the holders of a majority
of the Shares of the Trust or any Series outstanding and entitled to vote, the
Trustees may cause to

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be organized or assist in organizing a corporation or corporations under the
laws of any jurisdiction or any other trust, partnership, association or other
organization to take over all of the Trust Property or the property of any
Series or to carry on any business in which the Trust or the Series shall
directly or indirectly have any interest, and to sell, convey and transfer the
Trust Property or the property of any Series to any such corporation,
partnership, trust, association or organization in exchange for the Shares or
securities thereof or otherwise, and to lend money to, subscribe for the Shares
or securities of, and enter into any contracts with any such corporation,
partnership, trust, association or organization, or any corporation,
partnership, trust, association or organization in which the Trust or the Series
holds or is about to acquire Shares or any other interest. The Trustees may also
cause a merger or consolidation between the Trust or any Series or any successor
thereto and any such corporation, partnership, trust, association or other
organization if and to the extent permitted by law, as provided under the law
then in effect. Nothing contained herein shall be construed as requiring
approval of Shareholders for the Trustees to organize or assist in organizing
one or more corporations, partnerships, trusts, associations or other
organizations and selling, conveying or transferring a portion of the Trust
Property to such organization or entities.

ARTICLE IX

REPORTS TO SHAREHOLDERS

The Trustees shall at least semi-annually submit to the Shareholders
a written financial report, which may be included in the Trust's prospectus or
statement of additional information, of the transactions of the Trust, including
financial statements which shall at least annually be certified by independent
public accountants.

ARTICLE X

MISCELLANEOUS

Section 10.1. Filing. This Declaration and any amendment hereto shall be
filed in the office of the Secretary of the Commonwealth of Massachusetts and in
such other places as may be required under the laws of Massachusetts and may
also be filed or recorded in such other places as the Trustees deem appropriate.
Unless the amendment is embodied in an instrument signed by a majority of the
Trustees, each amendment filed shall be accompanied by a certificate signed and
acknowledged by a Trustee stating that such action was duly taken in a manner
provided herein. A restated Declaration, integrating into a single instrument
all of the provisions of the Declaration which are then in effect and operative,
may be executed from time to time by a majority of the Trustees and shall, upon
filing with the Secretary of the Commonwealth of Massachusetts, be conclusive
evidence of all amendments contained therein and may hereafter be referred to in
lieu of the original Declaration and the various amendments thereto. The
restated Declaration may include any amendment which the Trustees are empowered
to adopt, whether or

26
<PAGE>

not such amendment has been adopted prior to the execution of the restated
Declaration.

Section 10.2. Governing Law. This Declaration is executed by the Trustees
and delivered in the Commonwealth of Massachusetts and with reference to the
internal laws thereof, and the rights of all parties and the validity and
construction of very provision hereof shall be subject to and construed
according to the internal laws of said State without regard to the choice of law
rules thereof.

Section 10.3. Counterparts. This Declaration may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.

Section 10.4. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust appears to be a Trustee
hereunder, certifying to: (a) the number or identity of Trustees or
Shareholders, (b) the due authorization of the execution of any instrument or
writing, (c) the form of any vote passed at a meeting of Trustees or
Shareholders, (d) the fact that the number of Trustees or Shareholders present
at any meeting or executing any written instrument satisfies the requirements of
this Declaration, (e) the form of any By-laws adopted by or the identity of any
officers elected by the Trustees, or (f) the existence of any fact or facts
which in any manner relate to the affairs of the Trust, shall be conclusive
evidence as to the matters so certified in favor of any person dealing with the
Trustees and their successors.

Section 10.5. Provisions in Conflict with law or Regulations. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of this
Declaration; provided, however, that such determination shall not affect any of
the remaining provisions of this Declaration or render invalid or improper any
action taken or omitted prior to such determination.

(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provisions in any other jurisdiction or any other provision of this
Declaration or jurisdiction.

Section 10.6. Principal Place of Business. The principal place of business
of the Trust is 300 First Stamford Place, Stamford, CT 06902. The principal
place of business may be changed by resolution of a majority of the Trustees.

Section 10.7. Resident Agent. The Trust shall maintain a resident agent in
the Commonwealth of Massachusetts, which agent shall initially be CT Corporation
System, 2 Oliver Street, Boston, MA 02109. The Trustees may designate a
successor resident agent,

27
<PAGE>

provided, however, that such appointment shall not become effective until
written notice thereof is delivered to the office of the Secretary of the
Commonwealth.

IN WITNESS WHEREOF, the undersigned has executed this instrument this 12th
day of June.

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

(as Trustee and not individually)
Ten Post Office Square, Suite 1230
Boston, MA 02109

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

(as Trustee and not individually)
Ten Post Office Square, Suite 1230
Boston, MA 02109

COMMONWEALTH OF MASSACHUSETTS

SS. June 12, 1998

There personally appeared the above named ____________________ and
____________________ who acknowledge the foregoing instrument to be their free
act and deed.

Before me,

-------------------------------
Notary Public

My commission expires:

Exhibit (b)
BY-LAWS

NORTHSTAR EQUITY TRUST

JUNE 12, 1998
<PAGE>

TABLE OF CONTENTS

PAGE

ARTICLE I - DEFINITIONS...................................................... 1

ARTICLE II - OFFICES......................................................... 1

Section 1. Resident Agent......................................... 1
Section 2. Offices................................................ 1

ARTICLE III - SHAREHOLDERS .................................................. 1

Section 1. Meetings............................................... 1
Section 2. Notice of Meetings..................................... 2
Section 3. Record Date for Meetings and Other Purposes............ 2
Section 4. Proxies................................................ 2
Section 5. Inspection of Records.................................. 2
Section 6. Action without Meeting................................. 2

ARTICLE IV - TRUSTEES........................................................ 3

Section 1. Meetings of the Trustees............................... 3
Section 2. Quorum and Manner of Acting............................ 3

ARTICLE V - COMMITTEES....................................................... 4

Section 1. Executive and Other Committees......................... 4
Section 2. Meetings, Quorum and Manner of Acting.................. 4
Section 3. Chairman............................................... 4

ARTICLE VI - OFFICERS........................................................ 4

Section 1. General Provisions..................................... 4
Section 2. Term of Office and Qualifications...................... 5
Section 3. Removal................................................ 5
Section 4. Powers and Duties of the President..................... 5
Section 5. Powers and Duties of Vice Presidents................... 5
Section 6. Powers and Duties of the Treasurer..................... 5
Section 7. Powers and Duties of the Secretary..................... 5
Section 8. Powers and Duties of Assistant Treasurers.............. 6
Section 9. Powers and Duties of Assistant Secretaries............. 6
Section 10. Compensation of Officers and Trustees.................. 6

ARTICLE VII - FISCAL YEAR.................................................... 6

i
<PAGE>

ARTICLE VIII - SEAL.......................................................... 6

ARTICLE IX - WAIVERS OF NOTICE .............................................. 7

ARTICLE X - CUSTODY OF SECURITIES ........................................... 7

Section 1. Employment of a Custodian.............................. 7
Section 2. Action Upon Termination of Custodian Agreement......... 7
Section 3. Central Certificate System............................. 7
Section 4. Acceptance of Receipts in Lieu of Certificate.......... 7

ARTICLE XI - AMENDMENTS...................................................... 8

ARTICLE XII - MISCELLANEOUS ................................................. 8

ii
<PAGE>

BY-LAWS OF
NORTHSTAR EQUITY TRUST

ARTICLE I

DEFINITIONS

The terms "Administrator", "Class", "Commission", "Custodian",
"Declaration", "Distributor", "His", "Interested Person", "Investment Adviser",
"Municipal Bonds", "1940 Act", "Person", "Series", "Shareholder", "Shareholder
Servicing Agent", "Shares", "Transfer Agent", "Trust", "Trust Property",
"Trustees", and "vote of a majority of the shares outstanding and entitled to
vote", have the respective meanings given them in the Declaration of Trust --
Northstar Equity Trust dated June 10, 1998, as amended from time to time.

ARTICLE II

RESIDENT AGENT/OFFICES

Section 1. Resident Agent. The Trust shall maintain a resident agent in
the Commonwealth of Massachusetts, which agent shall initially be CT Corporation
System, 2 Oliver Street, Boston, Massachusetts 02109. The Trustees may designate
a successor resident agent, provided, however, that such appointment shall not
become effective until written notice thereof is delivered to the office of the
Secretary of the Commonwealth.

Section 2. Offices. The Trust may have its principal office and other
offices in such places without as well as within the Commonwealth of
Massachusetts as the Trustees may from time to time determine.

ARTICLE III

SHAREHOLDERS

Section 1. Meetings. A meeting of Shareholder may be called at any time by
a majority of the Trustees and shall be called by any Trustee upon written
request, which shall specify the purpose or purposes for which such meeting is
to be called, of Shareholders holding in the aggregate not less than 10% of the
outstanding shares entitled to vote on the matters specified in such written
request. Any such meeting shall be held as provided in the Declaration at such
place within or without the Commonwealth of Massachusetts as the Trustees shall
designate. The holders of a majority of outstanding shares present in person or
by proxy shall constitute a quorum at any meeting of the Shareholders. In the
absence of a quorum, a majority of outstanding shares entitled to vote present
in person or by proxy may adjourn the meeting from time to time until a quorum
shall be present.
<PAGE>

Section 2. Notice of Meetings. Notice of all meetings of the Shareholders,
stating the time, place and purposes of the meeting, shall be given by the
Trustees by mail to each Shareholder at his address as recorded on the register
of the Trust mailed at least (10) days and not more than sixty (60) days before
the meeting. Only the business stated in the notice of the meeting shall be
considered at such meeting. Any adjourned meeting may be held as adjourned
without further notice. No notice need be given any Shareholder who shall have
failed to inform the Trust of his current address or if a written waiver of
notice, executed before or after the meeting by the Shareholder or his attorney
thereunto authorized, is filed with the records of the meeting.

Section 3. Record Date for Meetings and Other Purposes. For the purpose of
determining the Shareholders who are entitled to notice of and to vote at any
meeting, or to participate in any distribution, or for the purpose of any other
action, the Trustees may from time to time close the transfer books for such
period, not exceeding thirty (30) days, as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date not more than
sixty (60) days prior to the date of any meeting of Shareholders or distribution
or other action as a record date for the determinations of the persons to be
treated as Shareholders of record for such purposes, except for dividend
payments which shall be governed by the Declaration.

Section 4. Proxies. At any meeting of Shareholders, any holder of Shares
entitled to vote there at may vote by proxy, provided that no proxy shall be
voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent for the Trust as the Secretary
may direct, for verification prior to the time at which such vote shall be
taken. Proxies may be solicited in the name of one or more Trustees or one or
more of the officers of the Trust. Only Shareholders of record shall be entitled
to vote. Each whole Share shall be entitled to one vote as to any matter on
which it is entitled by the Declaration to vote, and each fractional Share shall
be entitled to a proportionate fractional vote. When any Share is held jointly
by several persons, any one of them may vote at any meeting in person or by
proxy in respect of such Share, but if more than one of them shall be present at
such meeting in person or by proxy, and such joint owners or their proxies so
present disagree as to any vote to be cast, such vote shall not be received in
respect of such Share. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise,
and the burden of proving invalidity shall rest on the challenger. If the holder
of any such Share is a minor or a person of unsound mind, and subject to
guardianship or the legal control of any other person as regards the charge or
management of such Share, he may vote by his guardian or such other person
appointed or having such control, and such vote may be given in person or by
proxy. For purposes of this Section, a proxy granted by telephone, telegram,
telecopy, internet computer interface or other electronic method of document
transfer shall be deemed ?executed by or on behalf of a Shareholder."

Section 5. Inspection of Records. The records of the Trust shall be open
to inspection by Shareholders to the same extent as is permitted shareholders of
a Massachusetts business corporation.

Section 6. Action without Meeting. Any action which may be taken by
Shareholders

2
<PAGE>

may be taken without a meeting if a majority of Shareholders entitled to vote on
the matter (or such larger proportion thereof as shall be required by law, the
Declaration or these By-Laws for approval of such matter) consent to the action
in writing and the written consents are filed with the records of the meetings
of Shareholders. Such consents shall be treated for all purposes as a vote taken
at a meeting of Shareholders.

ARTICLE IV

TRUSTEES

Section 1. Meetings of the Trustees. The Trustees may in their discretion
provide for regular or stated meetings of the Trustees. Notice of regular or
stated meetings need not be given. Meetings of the Trustees other than regular
or stated meetings shall be held whenever called by the President, or by any one
of the Trustees, at the time being in office. Notice of the time and place of
each meeting other than regular or stated meetings shall be given by the
Secretary or an Assistant Secretary or by the officer or Trustee calling the
meeting and shall be mailed to each Trustee at least two days before the
meeting, or shall be telegraphed, cabled, or wirelessed to each Trustee at his
business address, or personally delivered to him at least one day before the
meeting. Such notice may, however, be waived by any Trustee. Notice of a meeting
need not be given to any Trustee if a written waiver of notice, executed by him
before or after the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him. A notice or waiver of notice need not
specify the purpose of any meeting. The Trustees may meet by means of a
telephone conference circuit or similar communications equipment by means of
which all persons participating in the meeting shall be deemed to have been held
at a place designated by the Trustees at the meeting. Participation in a
telephone conference meeting shall constitute presence in person at such
meeting. Any action required or permitted to be taken at any meeting of the
Trustees may be taken by the Trustees without a meeting if all the Trustees
consent to the action in writing and the written consents are filed with the
records of the Trustees meetings. Such consents shall be treated as a vote for
all purposes.

Section 2. Quorum and Manner of Acting. A majority of the Trustees shall
be present in person at any regular or special meeting of the Trustees in order
to constitute a quorum for the transaction of business at such meeting and
(except as otherwise required by law, the Declaration or these By-Laws) the act
of a majority of the Trustees present at any such meeting, at which a quorum is
present, shall be the act of the Trustees. In the absence of a quorum, a
majority of the Trustees present may adjourn the meeting from time to time until
a quorum shall be present. Notice of an adjourned meeting need not be given.

3
<PAGE>

ARTICLE V

COMMITTEES

Section 1. Executive and Other Committees. The Trustees by vote of a
majority of all the Trustees may elect from their own number an Executive
Committee to consist of not less than three (3) to hold office at the pleasure
of the Trustees, which shall have the power to conduct the current and ordinary
business of the Trust while the Trustees are not in session, including the
purchase and sale of securities and the designation of securities to be
delivered upon redemption of Shares of the Trust, and such other powers of the
Trustees as the Trustees may, from time to time, delegate to them, except those
powers which by law, the Declaration or these By-Laws they are prohibited from
delegating. The Trustees may also elect from their own number other Committees
from time to time, the number composing such Committees, the powers conferred
upon the same (subject to the same limitations as with respect to the Executive
Committee) and the term of membership on such Committees to be determined by the
Trustees. The Trustees may designate a chairman of any such Committee. In the
absence of such designation the Committee may elect its own Chairman.

Section 2. Meetings, Quorum and Manner of Acting. The Trustees may (1)
provide for stated meetings of any Committee, (2) specify the manner of calling
and notice required for special meetings of any Committee, (3) specify the
number of members of a Committee required to constitute a quorum and the number
of members of a Committee required to exercise specified powers delegated to
such Committee, (4) authorize the making of decisions to exercise specified
powers by written assent of the requisite number of members of a Committee
without a meeting, and (5) authorize the members of a Committee to meet by means
of a telephone conference circuit.

The Executive Committee shall keep regular minutes of its meetings and
records of decisions taken without a meeting and cause them to be recorded in a
book designated for that purpose and kept in the office of the Trust.

Section 3. Chairman. The Trustees may, by a majority vote of all the
Trustees, elect from their own number a Chairman, to hold office until his
successors shall have been duly elected and qualified. The Chairman shall not
hold any other office. The Chairman may be, but need not be, a Shareholder. The
Chairman shall preside at all meetings of the Trustees and shall have such other
duties as from time to time may be assigned to him by the Trustees.

ARTICLE VI

OFFICERS

Section 1. General Provisions. The officers of the Trust shall be a
President, a Treasurer and a Secretary, each of whom shall be elected by the
Trustees. The Trustees may elect or appoint such other officers or agents as the
business of the Trust may require, including

4
<PAGE>

one or more Vice Presidents, one or more Assistant Secretaries, and one or more
Assistant Treasurers. The Trustees may delegate to any officer or committee the
power to appoint any subordinate officers or agents.

Section 2. Term of Office and Qualifications. Except as otherwise provided
by law, the Declaration or these By-Laws, the President, the Treasurer and the
Secretary shall each hold office until his successor shall have been duly
elected and qualified, and all other officers shall hold office at the pleasure
of the Trustees. The offices of the Secretary and the Treasurer shall not be
held by the same person. The President shall hold no other office. Except as
above provided, any two offices may be held by the same person. Any officer may
be but none need be a Trustee or Shareholder.

Section 3. Removal. The Trustees, at any regular or special meeting of the
Trustees, may remove any officer without cause, by a vote of a majority of the
Trustees then in office. Any officer or agent appointed by an officer or
committee may be removed with or without cause by such appointing officer or
committee.

Section 4. Powers and Duties of the President. The President may call
meetings of the Trustees and of any Committee thereof when he deems it necessary
and shall preside at all meetings of the Shareholders. Subject to the control of
the Trustees and to the control of any Committees of the Trustees, within their
respective spheres, as provided by the Trustees, he shall at all times exercise
a general supervision and direction over the affairs of the Trust. He shall have
the power to employ attorneys and counsel for the Trust and to employ such
subordinate officers, agents, clerks and employees as he may find necessary to
transact the business of the Trust. He shall also have the power to grant,
issue, execute or sign such powers of attorney, proxies or other documents as
may be deemed advisable or necessary in furtherance of the interest of the
Trust. The President shall have such other powers and duties, as from time to
time may be conferred upon or assigned to him by the Trustees.

Section 5. Powers and Duties of Vice Presidents. In the absence or
disability of the President, the Vice President or, if there be more than one
Vice President, any Vice President designated by the Trustees shall perform all
the duties and may exercise any of the powers of the President, subject to the
control of the Trustees. Each Vice President shall perform such other duties as
may be assigned to him from time to time by the Trustees and the President.

Section 6. Powers and Duties of the Treasurer. The Treasurer shall be the
principal financial and accounting officer of the Trust. He shall deliver all
funds of the Trust which may come into his hands to such Custodian as the
Trustees may employ pursuant to Article X of these By-Laws. He shall render a
statement of condition of the finances of the Trust to the Trustees as often as
they shall require the same and he shall in general perform all the duties
incident to the office of Treasurer and such other duties as from time to time
may be assigned to him by the Trustees. The Treasurer shall give a bond for the
faithful discharge of his duties, if required so to do by the Trustees, in such
sum and with such surety or sureties as the Trustees shall require.

Section 7. Powers and Duties of the Secretary. The Secretary shall keep
the minutes

5
<PAGE>

of all meetings of the Trustees and of the Shareholders in proper books provided
for that purpose; he shall have custody of the seal of the Trust, he shall have
charge of the Share transfer books, lists and records unless the same are in the
charge of the Transfer Agent. He shall attend to the giving and serving of all
notices by the Trust in accordance with the provisions of these By-Laws and as
required by law; and subject to these By-Laws, he shall in general perform all
duties incident to the office of Secretary and such other duties as from time to
time may be assigned to him by the Trustees.

Section 8. Powers and Duties of Assistant Treasurers. In the absence or
disability of the Treasurer, any Assistant Treasurer designated by the Trustees
shall perform all the duties, and may exercise any of the powers, of the
Treasurer. Each Assistant Treasurer shall perform such other duties as from time
to time may be assigned to him by the Trustees. Each Assistant Treasurer shall
give a bond for the faithful discharge of his duties, if required so to do by
the Trustees, in such sum and with such surety or sureties as the Trustees shall
require.

Section 9. Powers and Duties of Assistant Secretaries. In the absence or
disability of the Secretary, an Assistant Secretary designated by the Trustees
shall perform all the duties, and may exercise any of the powers, of the
Secretary. Each Assistant Secretary shall perform such other duties as from time
to time may be assigned to him by the Trustees

Section 10. Compensation of Officers and Trustees. Subject to any
applicable provisions of the Declaration, the compensation of the officers and
Trustees shall be fixed from time to time by the Trustees or, in the case of
officers, by any Committee or officer upon whom such power may be conferred by
the Trustees. No officer shall be prevented from receiving such compensation as
such officer by reason of the fact that he is also a Trustee.

ARTICLE VII

FISCAL YEAR

The fiscal year of the Trust shall begin on the first day of January in
each year and shall end on the thirty-first day of December in each year,
provided, however, that the Trustees may from time to time change the fiscal
year.

ARTICLE VIII

SEAL

The Trustees may adopt a seal which shall be in such form and shall have
such inscription thereon as the Trustees may from time to time be prescribed.

6
<PAGE>

ARTICLE IX

WAIVERS OF NOTICE

Whenever any notice whatsoever is required to be given by law, the
Declaration or these By-Laws, a waiver thereof in writing, signed by the person
or persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto. A notice shall be deemed to have
been telegraphed, cabled or wirelessed for the purposes of these By-Laws when it
has been delivered to a representative of any telegraph, cable or wireless
company with instructions that it be telegraphed, cabled or wirelessed.

ARTICLE X

CUSTODY OF SECURITIES

Section 1. Employment of a Custodian,. The Trust shall place and at all
times maintain in the custody of a Custodian (including any sub-custodian for
the Custodian) all funds, securities and similar investments included in the
Trust Property. The Custodian (and any sub-custodian) shall be a bank having not
less that $2,000,000 aggregate capital, surplus and undivided profits and shall
be appointed from time to time by the Trustees, who shall fix its remuneration.

Section 2. Actions Upon Termination of Custodian Agreement. Upon
termination of a Custodian Agreement or inability of the Custodian to continue
to serve, the Trustees shall promptly appoint a successor custodian, but in the
event that no successor custodian can be found who has the required
qualifications and is willing to serve, the Trustees shall call as promptly as
possible a special meeting of the Shareholders to determine whether the Trust
shall function without a custodian or shall be liquidated. If so directed by
vote of the holders of a majority of the outstanding voting securities, the
Custodian shall deliver and pay over all Trust Property held by it as specified
in such vote.

Section 3. Central Certificate System. Subject to such results,
regulations and orders as the Commission may adopt, the Trustees may direct the
Custodian to deposit all or any part of the securities owned by the Trust in a
system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such other person as
may be permitted by the Commission, or otherwise in accordance with the 1940
Act, pursuant to which system all securities of any particular class or series
of any issuer deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to withdrawal only
upon the order of the Trust or its custodian.

Section 4. Acceptance of Receipts in Lieu of Certificates. Subject to such
rules, regulations and orders as the Commission may adopt, the Trustees may
direct the Custodian to

7
<PAGE>

accept written receipts or other written evidences indicating purchases of
securities held in book-entry form in the Federal Reserve System in accordance
with regulations promulgated by the Board of Governors of the Federal Reserve
System and the local Federal Reserve Banks in lieu of receipt of certificates
representing such securities.

ARTICLE XI

AMENDMENTS

These By-Laws, or any of them, may be altered, amended or repealed, or new
By-Laws may be adopted by (a) vote of the majority of the Shares outstanding and
entitled to vote or (b) by the Trustees, provided, however, that no By-Law may
be amended, adopted or repealed by the Trustees if such amendment, adoption or
repeal requires, pursuant to law, the Declaration or these By-Laws, a vote of
the Shareholders.

ARTICLE XII

MISCELLANEOUS

(A) Except as hereinafter provided, no officer or Trustees of the Trust
and no partner, officer, director or shareholder of the Investment Adviser of
the Trust (as that term is defined in the Investment Company Act of 1940) or of
the underwriter of the Trust, and no Investment Adviser or underwriter of the
Trust, shall take long or short positions in the securities issued by the Trust.

(1) The foregoing provisions shall not prevent the underwriter from
purchasing Shares from the Trust if such purchases are limited (except for
reasonable allowances for clerical errors, delays and errors of
transmission and cancellation of orders) to purchase for the purpose of
filling orders for such Shares received by the underwriter, and provided
that orders to purchase from the Trust are entered with the Trust or the
Custodian promptly upon receipt by the underwriter of purchase orders for
such Shares, unless the underwriter is otherwise instructed by its
customers.

(2) The foregoing provision shall not prevent the underwriter from
purchasing Shares of the Trust as agent for the account of the Trust.

(3) The foregoing provisions shall not prevent the purchase from the
Trust or from the underwriter of Shares issued by the Trust, by any
officer or Trustee of the Trust or by any partner, officer, director or
shareholder of the Investment Adviser of the Trust or of the underwriter
of the Trust at the price available to the public generally at the moment
of such purchase, or as described in the then currently effective
Prospectus of the Trust.

(4) The foregoing shall not prevent the Investment Adviser, or any
affiliate

8
<PAGE>

thereof, of the Trust from purchasing Shares prior to the effectiveness of
the first registration statement relating to the Shares under the
Securities Act of 1933.

(B) The Trust shall not lend assets of the Trust to any officer or Trustee
of the Trust, or to any partner, officer, director or shareholder of, or person
financially interested in, the Investment Adviser of the Trust or the
underwriter of the Trust, or to the Investment Adviser of the Trust or to the
underwriter of the Trust.

(C) The Trust shall not impose any restrictions upon the transfer of the
Shares of the Trust except as provided in the Declaration, but this requirement
shall not prevent the charging of customary transfer agent fees.

(D) The Trust shall not permit any officer or Trustee of the Trust, or any
partner, officer or director of the Investment Adviser or underwriter of the
Trust to deal from or on behalf of the Trust with himself as principal or agent,
or with any partnership, association or corporation in which he has a financial
interest; provided that the foregoing provisions shall not prevent (a) officers
and Trustees of the Trust or partners, officers or directors of the Investment
Adviser or underwriter of the Trust from buying, holding or selling shares in
the Trust, or from being partners, officers or directors or otherwise
financially interested in the Investment Adviser or underwriter of the Trust;
(b) purchases or sales of securities or other property by the Trust from or to
an affiliated person or to the Investment Adviser or underwriter of the Trust if
such transaction is exempt from the applicable provisions of the 1940 Act; (c)
purchases of investments for the portfolio of the Trust or sales of investments
owned by the Trust through a security dealer who is, or one or more of whose
partners, shareholders, officers or directors is, an officer or Trustee of the
Trust, or a partner, officer or director of the Investment Adviser or
underwriter of the Trust, if such transactions are handled in the capacity of
broker only and commissions charged do not exceed customary brokerage charges
for such services; (d) employment of legal counsel, registrar, Transfer Agent,
dividend disbursing agent or Custodian who is, or has a partner, shareholder,
officer, or director who is, an officer or Trustee of the Trust, or a partner,
officer or director of the Investment Adviser or underwriter of the Trust, if
only customary fees are charged for services to the Trust; (e) sharing
statistical research, legal and management expenses and office hire and expenses
with any other investment company in which an officer or Trustee of the Trust,
or a partner, officer or director of the Investment Adviser or underwriter of
the Trust, is an officer or director or otherwise financially interested.

END OF BY-LAWS

Exhibit (d)

NORTHSTAR TRUST
INVESTMENT ADVISORY AGREEMENT

AGREEMENT made this 1st day of August 1998 by and between NORTHSTAR TRUST,
a Massachusetts business trust, (the "Trust") and NORTHSTAR INVESTMENT
MANAGEMENT CORPORATION., a Delaware business corporation (the "Adviser").

The Trust is an open-end management investment company registered under
the Investment Company Act of 1940, as amended (the "Investment Company Act"),
consisting of the series named on schedule 1 hereto (each "Fund" and
collectively the "Funds"), as such schedule may be revised from time to time.

The Trust desires to retain the Adviser to render investment advisory
services to the Funds, and the Adviser is willing to render such investment
advisory on the terms set forth below.

The parties agree as follows:

1. The Trust hereby appoints the Adviser to act as investment adviser to
the Trust and the Funds for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to render the
services described, for the compensation provided, in this Agreement.

2. Subject to the supervision of the Trustees, the Adviser shall manage
the investment operations of the Funds and the composition of each Fund's
portfolio, including the purchase and retention and disposition of portfolio
securities, in accordance with each Fund's investment objectives, policies and
restrictions as stated in the Trust's Prospectus and Statement of Additional
Information (as defined below) subject to the following understandings:

(a) The Adviser shall provide supervision of each Fund's investments and
determine from time to time what investments will be made, held or disposed of
or what securities will be purchased and retained, sold or loaned by each Fund,
and what portion of the assets will be invested or held uninvested as cash.

(b) The Adviser shall use its best judgment in the performance of its
duties under this Agreement.

(c) The Adviser, in the performance of its duties and obligations under
this Agreement, shall (i) act in conformity with the Declaration of Trust, By-
Laws, Prospectus and Statement of Additional Information of the Trust, with the
instructions and directions of the Trustees and (ii) conform to and comply with
the requirements of the Investment Company Act and all other applicable federal
and state laws and regulations.

(d) (i) The Adviser shall determine the securities to be purchased or sold
by each Fund and will place orders pursuant to its determinations with or
through such persons, brokers or dealers to carry out the policy with respect to
brokerage as set forth in the Trust's Prospectus and Statement of Additional
Information or as the Trustees may direct from time to time. In providing each
Fund with investment supervision, the Adviser will give primary consideration to
securing the most favorable price and efficient execution. The Adviser may also
consider the financial responsibility, research and investment information and
other services and research related products provided by brokers or dealers who
may effect or be a party to any such transactions or other transactions to which
other clients of the Adviser may be a party. The Funds recognize that the
services and research related products provided by such brokers may be useful to
the Adviser in connection with its services to other clients.
<PAGE>

(ii) When the Adviser deems the purchase or sale of a security to be in
the best interest of a Fund as well as other clients, the Adviser, to the extent
permitted by applicable laws and regulations, may aggregate the securities to be
sold or purchased in order to obtain the most favorable price or lower brokerage
commissions and efficient execution. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the transactions, will
be made by the Adviser in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to each Fund and to such other
clients.

(e) The Adviser shall maintain, or cause to be maintained, all books and
records required under the Investment Company Act to the extent not maintained
by the custodian of the Trust. The Adviser shall render to the Trustees such
periodic and special reports as the Trustees may reasonably request.

(f) The Adviser shall provide the Trust's custodian on each business day
information relating to all transactions concerning each Fund's assets.

(g) The investment management services of the Adviser to the Trust and to
each Fund under this Agreement are not to be deemed exclusive, and the Adviser
shall be free to render similar services to others.

3. The Trust has delivered to the Adviser copies of each of the following
documents and will deliver to it all future amendments and supplements, if any:

(a) Declaration of Trust, as amended, as filed with the Secretary of the
Commonwealth of Massachusetts (such Declaration of Trust, as in effect on the
date hereof and as further amended from time to time, are herein called the
"Declaration of Trust");

(b) By-Laws of the Trust (such By-Laws, as in effect on the date hereof
and as amended from time to time, are herein called the "By-Laws");

(c) Certified resolutions of the Trustees authorizing the appointment of
the Adviser and approving this Agreement on behalf of the Trust and each Fund;

(d) Registration Statement on Form N-lA under the Investment Company Act
and the Securities Act of 1933, as amended from time to time (the "Registration
Statement"), as filed with the Securities and Exchange Commission (the
"Commission"), relating to the Trust and shares of beneficial interest of each
Fund and all amendments thereto.

(e) Notification of Registration of the Trust under the Investment Company
Act on Form N-8A as filed with the Commission and all amendments thereto;

(f) Prospectus and Statement of Additional Information included in the
Registration Statement, as amended from time to time. All references to this
Agreement, the Prospectus and the Statement of Additional Information shall be
to such documents as most recently amended or supplemented and in effect.

4. The Adviser shall authorize and permit any of its directors, officers
and employees who may be elected as trustees or officers of the Trust and/ or
the Funds to serve in the capacities in which they are elected. All services to
be furnished by the Adviser under this Agreement may be furnished through such
directors, officers or employees of the Adviser.
<PAGE>

5. The Adviser agrees that all records which it maintains for the Trust
and/or the Funds are property of the Trust and/or the Funds. The Adviser will
surrender promptly to the Trust and/or the Funds any such records upon either
the Trust's or the Fund's request. The Adviser further agrees to preserve such
records for the periods prescribed in Rule 3la-2 of the Commission under the
Investment Company Act.

6. (i) In connection with the services rendered by the Adviser under this
Agreement, the Adviser will pay all of the following expenses:

(a) the salaries and expenses of all personnel of the Trust, the Funds
and the Adviser required to perform the services to be provided
pursuant to this Agreement, except the fees of the trustees who are
not affiliated persons of the Adviser, and

(b) all expenses incurred by the Adviser, the Trust or by the Funds in
connection the performance of the Adviser's responsibilities
hereunder, other than brokers' commissions and any issue or transfer
taxes chargeable to each respective Fund in connection with its
securities transactions.

7. In the event the expenses of each Fund for any fiscal year (including
the fees payable to the Adviser but excluding interest, taxes, brokerage
commissions, distribution fees and litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the Fund's
business) exceed the lowest applicable annual expense limitation established
pursuant to the statutes or regulations of any jurisdictions in which shares of
each respective Fund are then qualified for offer and sale, the compensation due
the Adviser will be reduced by the amount of such excess, or, if such reduction
exceeds the compensation payable to the Adviser, the Adviser will pay each Fund,
whose expenses exceed such expense limitation, the amount of such reduction
which exceeds the amount of such compensation.

8. For the services provided and the expenses assumed pursuant to this
Agreement, each Fund will pay to the Adviser as compensation a at the rate set
forth opposite each Funds' name on Schedule 1 hereto, such fee to be accrued
daily and paid monthly..

9. The Adviser may rely on information reasonably believed by it to be
accurate and reliable. Neither the Adviser nor its officers, directors,
employees or agents or controlling persons shall be liable for any error or
judgment or mistake of law, or for any loss suffered by the Trust and/or a Fund
in connection with or arising out of the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.

10. As to each Fund, this Agreement shall continue until the date set
forth opposite such Fund's name on Schedule 1 hereto (the "Reapproval Date") and
shall continue automatically for successive annual periods ending on the day of
each year set forth opposite the Fund's name on Schedule 1 hereto (the
"Reapproval Day"), provided that such continuance is specifically approved at
least annually by the affirmative vote of (i) a majority of the Trustees of the
Trust acting separately on behalf of each Fund, who are not interested persons
of the Trust, cast in person at a meeting called for the purpose of voting on
such approval, and (ii) a majority of the Trustees of the Trust or the holders
of a majority of the outstanding voting securities of each respective Fund;
provided however, that this Agreement may be terminated by the Trust, on behalf
of a Fund at any time, without the payment of any penalty, by the Trustees
acting on behalf of a Fund or by vote of a majority of the outstanding voting
securities (as defined in the Investment Company Act) of a Fund, or by the
Adviser at any time, without the payment of any penalty, on not more than 60
days' nor less than 30 days' written notice to the
<PAGE>

other party. This Agreement shall terminate automatically in the event of its
assignment provided that a transaction which does not, under the Investment
Company Act, result in a change of actual control or management of the Adviser's
business shall not be deemed to be an assignment for the purposes of this
Agreement.

11. This agreement shall terminate automatically in the event of its
assignment; the term "assignment" for this purpose shall have the meaning
defined in Section 2(a)(4) of the Investment Company Act of 1940.

12. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of the Adviser who may also be a trustee, officer
or employee of the Trust and/or the Funds to engage in any other business or to
devote his time and attention in part to the management or other aspect of any
business, whether of a similar or dissimilar nature, nor limit or restrict the
right of the Adviser to engage in any other business or to render services of
any kind to any other person or entity.

13. During the term of this Agreement, the Trust and each Fund agrees to
furnish the Adviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature, or other material prepared for
distribution to shareholders of each Fund or the public, which refer in any way
to the Adviser, prior to use thereof and not to use such material if the Adviser
reasonably objects in writing within five business days (or such other time as
may be mutually agreed) after receipt. In the event of termination of the
Agreement, the Trust and/or each Fund will continue to furnish to the Adviser
such other information relating to the business affairs of the Trust and/or each
Fund as the Adviser at any time, or from time to time, reasonably requests in
order to discharge its obligations hereunder.

14. This Agreement may be amended by mutual agreement, but only after
authorization of such amendments by the affirmative vote of (i) the holders of
the majority of the outstanding voting securities of each Fund and ( ii) a
majority of the members of the Trustees who are not interested persons of the
Trust or the Adviser, cast in person at a meeting called for the purpose of
voting on such approval.

15. The Adviser, the Trust and the Funds each agree that the name
"Northstar" is proprietary to, and a property right of, the Adviser. The Trusts
and the Funds agree and consent that (i) each will only use the name "Northstar"
as part of its name and for no other purpose, (ii) each will not purport to
grant any third party the right to use the name "Northstar" and (iii) upon the
termination of this Agreement, the Trust and the Funds shall, upon the request
of the Adviser, cease to use the name "Northstar", and shall use its best
efforts to cause its officers, trustees and shareholders to take any and all
actions which the Adviser may request to effect the foregoing.

16. Any notice or other communications required to be given pursuant to
this Agreement shall be deemed to be given if delivered or mailed by registered
mail, postage paid, (1) to the Adviser at 300 First Stamford Place, Stamford, CT
06902, Attention: Secretary; or (2) to the Trust and/or the Funds, 300 First
Stamford Place, Stamford, CT 06902, Attention: Secretary.

17. This Agreement shall be governed by and construed in accordance with
the laws of the State of Connecticut. The terms "interested person",
"assignment", and "vote of the majority of the outstanding securities" shall
have the meaning set forth in the Investment Company Act.

18. The Declaration of Trust, establishing the Trust, dated June 12, 1998,
a copy of which, together with all amendments thereto (the "Declaration"), is on
file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name "Northstar Series Trust" refers to the Trustees under the
Declaration collectively as trustees, but not individually or personally; and no
Trustee, shareholder, officer, employee or
<PAGE>

agent of the Trust and/or the Funds may be held to any personal liability, nor
may resort be had to their private property for the satisfaction of any
obligation or claim or otherwise in connection with the affairs of the Trust,
but the Trust property only shall be liable.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first written
above.

NORTHSTAR EQUITY TRUST

By: __________________________________
President

NORTHSTAR INVESTMENT MANAGEMENT
CORPORATION

By: __________________________________
Assistant Vice President
<PAGE>

SCHEDULE 1

- --------------------------------------------------------------------------------
Annual Fee as a
Percentage of Avg.
Daily Net Assets
Name of Fund Reapproval Date Reapproval Day
- --------------------------------------------------------------------------------
Northstar Mid-Cap 1% November 8, 2000 November 8th
Growth Fund
- --------------------------------------------------------------------------------

Exhibit (e)

UNDERWRITING AGREEMENT FOR
CLASS A SHARES OF
NORTHSTAR EQUITY TRUST

NORTHSTAR MID-CAP GROWTH FUND

AGREEMENT made and entered into by and between NORTHSTAR MID-CAP GROWTH FUND (a
"Fund"), a series of the NORTHSTAR EQUITY TRUST, a Massachusetts business trust
(the "Trust"), and NORTHSTAR DISTRIBUTORS, INC., a Minnesota corporation (the
"Underwriter") on August 1, 1998.

1. Each Fund hereby appoints the Underwriter as its exclusive agent to promote
the sale and to arrange for the sale of Class A shares of beneficial interest of
each Fund, including both unissued shares and treasury shares, through
broker-dealers of otherwise, in all parts of the United States and elsewhere
throughout the world. Each Fund agrees to sell and deliver its Class A shares,
upon the terms hereinafter set forth, as long as it has unissued and/or treasury
Class A shares available for sale.

(a) Each Fund hereby authorizes the Underwriter, subject to law and the
Declaration of Trust, to accept, for the respective account of each Fund, orders
for the purchase of its Class A shares, satisfactory to the Underwriter, as of
the time of receipt of such orders by the dealer-- or as otherwise described in
the Prospectus of the Trust.

(b) The public offering price of Class A shares shall be the net asset value per
share (as determined by each Fund) of the outstanding Class A shares of each
Fund. The net asset value shall be regularly determined on every business day as
of the time of the regular closing of the New York Stock Exchange and the public
offering price based upon such net asset value shall become effective as set
forth from time to time in the Trust's Prospectus; such net asset value shall
also be regularly determined, and the public offering price based thereon shall
become effective, as of such other times for the regular determination of net
asset value as may be required or permitted by rules of the National Association
of Securities Dealers, Inc. or of the Securities and Exchange Commission. Each
Fund shall furnish daily to the Underwriter, with all possible promptness, a
detailed computation of net asset value of its Class A shares.

The public offering price of such shares shall be equal to the net asset value,
as described above, plus a commission to be fixed from time to time by the
Underwriter not to exceed 6% of the public offering price, except that such
price per share may be adjusted to the nearest cent. The Underwriter may fix
quantity discounts and other similar terms not inconsistent with the provisions
of the Investment Company Act of 1940. The Underwriter shall not impose any
commission, permit any quantity discounts or impose any other similar terms in
connection with the sale of Class A shares of each Fund except as disclosed in
the Prospectus of the Trust.

(c) The Underwriter shall be entitled to deduct a commission on all Class A
shares sold equal to the difference between the public offering price and the
net asset value on which such price is based. If any such commission is received
by a Fund, it will pay the commission to the Underwriter. Out of such
commission, the Underwriter may allow to dealers such concessions as the
Underwriter may determine from time to time. Notwithstanding anything in the
Agreement, sales may be made at net asset value as provided in the Trust's
prospectus.
<PAGE>

2. The Underwriter agrees to devote reasonable time and effort to enlist
investment dealers to sell Class A shares of each Fund and otherwise promote the
sale and distribution and act as Underwriter for the sale and distribution of
the Class A shares of each Fund as such arrangements may profitably be made; but
so long as its does so, nothing herein contained shall prevent the Underwriter
from entering into similar arrangements with other funds and to engage in other
activities. Each Fund reserves the right to issue Class A shares in connection
with any merger or consolidation of a Fund with any other investment company or
any personal holding company or in connection with offers of exchange exempted
from Section 22(d) of the Investment Company Act 1940.

3. To the extent a Fund shall offer (as set forth in the Trust's Prospectus) to
provide physical certificates evidencing ownership of Class A shares, upon
receipt by a Fund at its principal place of business of a written order from the
Underwriter, together with delivery instructions, the Fund shall, as promptly as
practicable, cause certificates for the Class A shares called for in such order
to be delivered or credited in such amounts and in such names as shall be
specified by the Underwriter, against payment therefor in such manner as may be
acceptable to the Fund.

4. All sales literature and advertisements used by the Underwriter in connection
with sales of the Class A shares of each Fund shall be subject to the approval
of the respective Fund to which such literature relates. Each Fund authorizes
the Underwriter in connection with the sale or arranging for the sale of its
Class A shares to give only such information and to make only such statements or
representations as are contained in the Prospectus or in sales literature or
advertisements approved by each respective Fund or in such financial statements
and reports as are furnished to the Underwriter pursuant to paragraph 6 below.
The Funds shall not be responsible in any way for any information, statements or
representations given or made by the Underwriter or its representatives or
agents other than such information, statements and representations.

5. The Underwriter, as agent of each Fund, is authorized, subject to the
direction of each Fund, to accept Class A shares for redemption at prices not in
excess of their net asset value, determined as prescribed in the Prospectus of
the Trust. Each respective Fund shall reimburse the Underwriter monthly for its
out-of-pocket expenses reasonably incurred on behalf of each Fund in carrying
out the foregoing authorization, but the Underwriter shall not be entitled to
any commissions or other compensation in respect to such redemptions. The
Underwriter shall report all redemptions promptly to the respective Funds.

6. Each Fund shall keep the Underwriter fully informed with regard to its
affairs, shall furnish the Underwriter with a certified copy of all financial
statements, and a signed copy of each report, prepared by independent public
accountants and with such reasonable number of printed copies of each annual and
other periodic report of each Fund as the Underwriter may request, and shall
cooperate fully in the efforts of the Underwriter to sell and arrange for the
sale of its Class A shares and in the performance by the Underwriter of all its
duties under this Agreement.

7. Each Fund will pay or cause to be paid expenses (including counsel fees and
disbursements) of any registration of its Class A shares of beneficial interest
under, but not limited to, Federal, state or other regulatory authority, fees of
filing periodic reports with regulatory bodies and of preparing, setting in type
and printing the Prospectus and any amendments thereto prepared for use in
connection with the offering of Class A shares of each Fund, for fees and
expenses incident to the issuance of Class A shares of beneficial interest, such
as the cost of stock certificates (if offered), issuance taxes, fees of the
transfer agent, including the cost of preparing and mailing notices to
shareholders pertaining to transactions with
<PAGE>

respect to shareholders' accounts, dividend disbursing agent's costs, including
the cost for preparing and mailing notices confirming shares acquired by
shareholders pursuant to the reinvestment of dividends and distributions, and
the mailing to shareholders of prospectuses, and notices and reports as may be
required from time to time by regulatory bodies or for such other purposes,
except for purposes of sales by the Underwriter as outlined in paragraph 8
hereof.

8. The Underwriter shall pay all of its own costs and expenses (other than
expenses and costs heretofore deemed payable by the Funds and other than
expenses which one or more dealers may bear pursuant to any agreement with the
Underwriter) incident to the sale and distribution of the shares issued or sold
hereunder including (a) expenses of printing copies of the Prospectus to be used
in connection with the sale of Class A shares of each Fund at printer's overrun
costs; (b) expenses of printing and distributing or disseminating any other
literature, advertising or selling aids in connection with the offering of Class
A shares for sale (however, the expenses referred to in (a) and (b) do not
include expenses incurred in connection with the preparation, printing and
distribution of the Prospectus or any report or other communication to
shareholders, to the extent that such expenses are necessarily incurred to
effect compliance by each Fund with any Federal or state law or other regulatory
bodies); and (c) expenses of advertising in connection with such offering;
provided, however, that the Underwriter shall not be required to pay for any
such expenses to the extent that they are paid pursuant to a Fund's distribution
plan adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940.

9. Each Fund agrees to register, from time to time as necessary, additional
Class A shares with the Securities & Exchange Commission, State and other
regulatory bodies and to pay the related filing fees therefor and to file such
amendments, reports and other documents as may be necessary in order that there
may be no untrue statement of a material fact in the Registration Statement or
Prospectus or that their may be no omission to state a material fact therein
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. As used in this Agreement, the term
" Registration Statement" shall mean the Registration Statement most recently
filed by the Trust with the Securities & Exchange Commission and effective under
the Securities Act of 1933, as amended, as such Registration Statement is
amended from time to time, and the term "Prospectus" shall mean the most recent
form of prospectus authorized by the Trust for use by the Underwriter and by
dealers.

10. This Agreement may be terminated at any time on not more than 60 days
written notice, without payment of a penalty, by the Underwriter, by vote of a
majority of the class of outstanding voting securities of each respective Fund
or by vote of a majority of the Trustees, acting separately on behalf of each
Fund, who are not "interested persons" of the Funds and who have not direct or
indirect financial interest in the operation of the Plan or in any agreements.

11. This Agreement shall terminate automatically in the event of its assignment.
The term "assignment" for this purpose shall have the meaning defined in Section
2(a) (4) of the Investment Company Act of 1940.

12. This Agreement has been approved by the Trustees of the Trust on behalf of
the Funds and shall continue in effect for two years from its effective date.
Thereafter, this Agreement shall continue for successive annual periods,
provided that such continuance is specifically approved annually by a majority
of the Trustees who are not interested persons of the parties hereto as defined
in the Investment Company Act of 1940 and either (a) by vote of the Trustees of
the Trust or (b) by vote of a majority or the outstanding voting securities of
each Fund, as defined in the Investment Company Act of 1940.
<PAGE>

13. The Declaration of Trust, establishing the Trust, dated June 12, 1998, a
copy of which together with all amendments thereto (the "Declaration") is on
file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name of the Trust refers to the Trustees under the Declaration
collectively as trustees, but not individually or personally; and no Trustee,
shareholder officer, employee or agent of the Trust and/or the Funds may be held
to any personal liability, nor may resort be had to their private property for
the satisfaction of any obligation or claim or otherwise in connection with
affairs of the Trust, but the Trust property only shall be liable.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their officers thereunto duly authorized and to become effective as of the
day and year set forth above.

NORTHSTAR EQUITY TRUST

By: ________________________________________
President

NORTHSTAR DISTRIBUTORS, INC.

By: ________________________________________
President
<PAGE>

UNDERWRITING AGREEMENT FOR
CLASS B SHARES OF
NORTHSTAR EQUITY TRUST

NORTHSTAR MID-CAP GROWTH FUND

AGREEMENT made and entered into by and between NORTHSTAR MID-CAP GROWTH FUND (a
"Fund"), a series of NORTHSTAR EQUITY TRUST, a Massachusetts business trust (the
"Trust"), and NORTHSTAR DISTRIBUTORS, INC., a Minnesota corporation (the
"Underwriter").

1. Each Fund hereby appoints the Underwriter as its exclusive agent to promote
the sale and to arrange for the sale of Class B shares of beneficial interest of
each Fund, including both unissued shares and treasury shares, through
broker-dealers of otherwise, in all parts of the United States and elsewhere
throughout the world. Each Fund agrees to sell and deliver its Class B shares,
upon the terms hereinafter set forth, as long as it has unissued and/or treasury
Class B shares available for sale.

(a) Each Fund hereby authorizes the Underwriter, subject to law and the
Declaration of Trust, to accept, for the respective account of each Fund, orders
for the purchase of its Class B shares, satisfactory to the Underwriter, as of
the time of receipt of such orders by the dealer--or as otherwise described in
the Prospectus of the Trust.

(b) The public offering price of Class B shares shall be the net asset value per
share (as determined by or on behalf of each Fund) of the outstanding Class B
shares of each Fund. The net asset value shall be regularly determined on every
business day as of the time of the regular closing of the New York Stock
Exchange and the public offering price shall become effective as set forth from
time to time in the Prospectus; such net asset value shall also be regularly
determined, and the public offering price shall become effective, as of such
other times for the regular determination of net asset value as may be required
or permitted by rules of the National Association of Securities Dealers, Inc.
("NASD") or of the Securities and Exchange Commission ("SEC"). Each Fund shall
furnish, or cause to be furnished, daily to the Underwriter, with all possible
promptness, a detailed computation of net asset value of its Class B shares.

(c) (i) In consideration of the Underwriter's services as principal distributor
of each Fund's Class B shares pursuant to this Agreement and in accordance with
the provisions of the Trust's Amended and Restated Distribution and Service Plan
(the "Plan") in respect of such shares each Fund agrees: (I) to pay to the
Underwriter or, at the Underwriter's direction, to a third party, monthly in
arrears on or prior to the 5th business day of the following calendar month (A)
a service fee (the "Service Fee") equal to 0.25 of 1% per annum of the average
daily net asset value of the Class B shares of the Fund outstanding from time to
time, and (B) the Underwriter's "Allocable Portion" (as hereinafter defined) of
a fee (the "Distribution Fee") equal to 0.75 of 1% per annum of the average
daily net asset value of the Class B shares of the Fund outstanding from

1
<PAGE>

time to time, and (II) to withhold from redemption proceeds in respect of Class
B shares of the Fund the Underwriter's Allocable Portion of the Contingent
Deferred Sales Charges ("CDSCs") payable in respect of such redemption as
provided in the Prospectus of the Fund and to pay the same over to the
Underwriter or, at the Underwriter's direction, to a third party, at the time
the redemption proceeds in respect of such redemption are payable to the holder
of the Class B shares redeemed.

(ii) The Underwriter will be deemed to have performed all services
required to be performed in order to be entitled to receive its Allocable
Portion of the Distribution Fee payable in respect of the Class B shares of each
Fund upon the settlement date of each sale of a "Commission Share" (as defined
in the Allocation Schedule attached hereto as Schedule B) of the Fund taken into
account in determining the Underwriter's Allocable Portion of such Distribution
Fees.

(iii) Notwithstanding anything to the contrary set forth in this Agreement
or (to the extent waiver thereof is permitted thereby) applicable law, each
Fund's obligation to pay the Underwriter's Allocable Portion of the Distribution
Fees payable in respect of the Class B shares of the Fund shall not be
terminated or modified for any reason (including a termination of this
Agreement) except to the extent required by a change in the Investment Company
Act of 1940 (the "Act"), the rules thereunder or the Conduct Rules of the NASD,
in each case enacted or promulgated after August 1, 1998, or in connection with
a "Complete Termination" (as hereinafter defined) of the Plan.

(iv) Each Fund will not take any action to waive or change any CDSC in
respect of the Class B shares of the Fund, except as provided in the Fund's
Prospectus or statement of additional information as in effect as of the date
hereof, without the consent of the Underwriter and the permitted assigns of all
or any portion of its rights to its Allocable Portion of the CDSCs.

(v) Notwithstanding anything to the contrary in this Agreement, neither
the termination of the Underwriter's role as principal distributor of the Class
B shares of any Fund, nor the termination of this Agreement nor the termination
of the Plan will terminate the Underwriter's right to its Allocable Portion of
the CDSCs in respect of the Class B shares of the Fund.

(vi) Notwithstanding anything to the contrary in this Agreement, the
Underwriter may assign, sell or pledge (collectively, "Transfer") its rights to
the Service Fees and its Allocable Portion of the Distribution Fees and CDSCs
(but not its obligations to any Fund under this Agreement) to raise funds to
make the expenditures related to the distribution of Class B shares of the Fund
and in connection therewith, upon receipt of notice of such Transfer, the Fund
shall pay, or cause to be paid, to the assignee, purchaser or pledgee
(collectively with their subsequent transferees, "Transferees") such portion of
the Underwriter's Service Fees, Allocable Portion of the Distribution Fees and
CDSCs in respect of the Class B shares of the Fund so Transferred. Except as
provided in (iii) above and notwithstanding anything to the contrary set forth
elsewhere

2
<PAGE>

in this Agreement, to the extent the Underwriter has Transferred its rights
thereto to raise funds as aforesaid, each Fund's obligation to pay the
Underwriter's Allocable Portion of the Distribution Fees and CDSCs payable in
respect of the Class B shares of the Fund shall be absolute and unconditional
and shall not be subject to dispute, offset, counterclaim or any defense
whatsoever, at law or equity, including, without limitation, any of the
foregoing based on the insolvency or bankruptcy of the Underwriter (it being
understood that such provision is not a waiver of the Fund's right to pursue the
Underwriter and enforce such claims against the assets of the Underwriter other
than the Underwriter's right to the Distribution Fees and CDSCs in respect of
the Class B shares of the Fund, which have been so transferred in connection
with such Transfer). Each Fund agrees that each such Transferee is a third party
beneficiary of the provisions of this clause (vi) but only insofar as those
provisions relate to Distribution Fees and CDSCs transferred to such Transferee.

(vii) For purposes of this Agreement, the term Allocable Portion of
Distribution Fees and CDSCs payable in respect of the Class B shares of any Fund
shall mean the portion of such Distribution Fees and CDSCs allocated to the
Underwriter in accordance with the Allocation Schedule attached hereto as
Schedule B.

(viii) For purposes of this Agreement, the term "Complete Termination" of
the Plan in respect of any Fund means a termination of the Plan involving the
complete cessation of the payment of Distribution Fees in respect of all Class B
shares of the Fund, and the termination of the distribution plans and the
complete cessation of the payment of distribution fees pursuant to every other
Distribution Plan pursuant to Rule 12b-1 under the Act in respect of the Class B
shares of the Fund and any successor fund or any fund acquiring a substantial
portion of the assets of the Fund and for every future class of shares which has
substantially similar characteristics to the Class B shares of the Fund taking
into account the manner of payment and amount of sales charge, contingent
deferred sales charge or other similar charges borne directly or indirectly by
the holders of such shares.

(d) The Underwriter may reallow any or all of the Distribution and Services Fees
and CDSCs which it is paid under the Agreement to such dealers as the
Underwriter may from time to time determine.

(e) The Underwriter may fix quantity discounts and other similar variances or
waivers of the CDSCs not inconsistent with the provisions of the Act; provided
however, that the Underwriter shall not impose any commission, permit any
quantity discount, or impose any other similar waiver or variance in connection
with the sale of Class B shares except as disclosed in the Prospectus of the
Trust.

2. The Underwriter agrees to devote reasonable time and effort to enlist
investment dealers to sell Class B shares of each Fund and otherwise promote the
sale and distribution and act as Underwriter for the sale and distribution of
the Class B shares of each Fund as such arrangements may profitably be made; but
so long as its does so, nothing herein contained shall prevent the

3
<PAGE>

Underwriter from entering into similar arrangements with other funds and to
engage in other activities. Each Fund reserves the right to issue Class B shares
in connection with any merger or consolidation of a Fund with any other
investment company or any personal holding company or in connection with offers
of exchange exempted from Section 22(d) of the Act.

3. To the extent a Fund shall offer (as set forth in the Trust's Prospectus) to
provide physical certificates evidencing ownership of Class B shares, upon
receipt by a Fund at its principal place of business of a written order from the
Underwriter, together with delivery instructions, the Fund shall, as promptly as
practicable, cause certificates for the Class B shares called for in such order
to be delivered or credited in such amounts and in such names as shall be
specified by the Underwriter, against payment therefor in such manner as may be
acceptable to the Fund.

4. All sales literature and advertisements used by the Underwriter in connection
with sales of the Class B shares of each Fund shall be subject to the approval
of the respective Fund to which such literature relates. Each Fund authorizes
the Underwriter in connection with the sale or arranging for the sale of its
Class B shares to give only such information and to make only such statements or
representations as are contained in the Prospectus or in sales literature or
advertisements approved by each respective Fund or in such financial statements
and reports as are furnished to the Underwriter pursuant to paragraph 6 below.
The Funds shall not be responsible in any way for any information, statements or
representations given or made by the Underwriter or its representatives or
agents other than such information, statements and representations.

5. The Underwriter, as agent of each Fund, is authorized, subject to the
direction of each Fund, to accept Class B shares for redemption at prices
determined as prescribed in the Prospectus of the Trust. Such price shall
reflect the subtraction of the applicable CDSC, if any, computed in accordance
with and in the manner set forth in the Trust's Prospectus. Each respective Fund
shall reimburse the Underwriter monthly for its out-of-pocket expenses
reasonably incurred on behalf of each Fund in carrying out the foregoing
authorization. The Underwriter shall report all redemptions promptly to the
respective Funds.

6. Each Fund shall keep the Underwriter fully informed with regard to its
affairs, shall furnish the Underwriter with a certified copy of all financial
statements, and a signed copy of each report, prepared by independent public
accountants and with such reasonable number of printed copies of each annual and
other periodic report of each Fund as the Underwriter may request, and shall
cooperate fully in the efforts of the Underwriter to sell and arrange for the
sale of its Class B shares and in the performance by the Underwriter of all its
duties under this Agreement.

7. Each Fund will pay or cause to be paid expenses (including counsel fees and
disbursements) of any registration of its Class B shares of beneficial interest
under, but not limited to, Federal, state or other regulatory authority, fees of
filing periodic reports with regulatory bodies and of preparing, setting in type
and printing the Prospectus and any amendments thereto prepared for use in
connection with the offering of Class B shares of each Fund, for fees and
expenses incident to the issuance of Class B shares of beneficial interest, such
as the cost of stock

4
<PAGE>

certificates (if offered), issuance taxes, fees of the transfer agent, including
the cost of preparing and mailing notices to shareholders pertaining to
transactions with respect to shareholders' accounts, dividend disbursing agent's
costs, including the cost for preparing and mailing notices confirming shares
acquired by shareholders pursuant to the reinvestment of dividends and
distributions, and the mailing to shareholders of prospectuses, and notices and
reports as may be required from time to time by regulatory bodies or for such
other purposes, except for purposes of sales by the Underwriter as outlined in
paragraph 8 hereof.

8. The Underwriter shall pay all of its own costs and expenses (other than
expenses and costs heretofore deemed payable by the Funds and other than
expenses which one or more dealers may bear pursuant to any agreement with the
Underwriter) incident to the sale and distribution of the shares issued or sold
hereunder including (a) expenses of printing copies of the Prospectus to be used
in connection with the sale of Class B shares of each Fund at printer's overrun
costs; (b) expenses of printing and distributing or disseminating any other
literature, advertising or selling aids in connection with the offering of Class
B shares for sale (however, the expenses referred to in (a) and (b) do not
include expenses incurred in connection with the preparation, printing and
distribution of the Prospectus or any report or other communication to
shareholders, to the extent that such expenses are necessarily incurred to
effect compliance by each Fund with any Federal or state law or other regulatory
bodies); and (c) expenses of advertising in connection with such offering;
provided, however, that the Underwriter shall not be required to pay for any
such expenses to the extent that they are paid pursuant to a Fund's distribution
plan adopted pursuant to Rule 12b-1 under the Act.

9. Each Fund agrees to register, from time to time as necessary, additional
Class B shares with the SEC, State and other regulatory bodies and to pay the
related filing fees therefor and to file such amendments, reports and other
documents as may be necessary in order that there may be no untrue statement of
a material fact in the Registration Statement or Prospectus or that their may be
no omission to state a material fact therein necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. As used in this Agreement, the term "Registration Statement"
shall mean the Registration Statement most recently filed by the Trust with the
SEC and effective under the Securities Act of 1933, as amended, as such
Registration Statement is amended from time to time, and the term "Prospectus"
shall mean the most recent form of prospectus authorized by the Trust for use by
the Underwriter and by dealers.

10. This Agreement may be terminated at any time on not more than 60 days'
written notice, without payment of a penalty, by the Underwriter, by vote of a
majority of the class of outstanding voting securities of each respective Fund
or by vote of a majority of the Trustees, acting separately on behalf of each
Fund, who are not "interested persons" of the Funds and who have not direct or
indirect financial interest in the operation of the Plan or in any agreements.

11. This Agreement shall terminate automatically in the event of its assignment.
The term "assignment" for this purpose shall have the meaning defined in Section
2(a)(4) of the Act.

5
<PAGE>

12. This Agreement has been approved by the Trustees of the Trust on behalf of
the Funds and shall continue in effect for two years from its effective date.
Thereafter, this Agreement shall continue for successive annual periods,
provided that such continuance is specifically approved annually by a majority
of the Trustees who are not interested persons of the parties hereto as defined
in the Act and either (a) by vote of the Trustees of the Trust or (b) by vote of
a majority or the outstanding voting securities of each Fund, as defined in the
Act.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their officers thereunto duly authorized and to become effective as of this
1st day of August 1998.

Attest: NORTHSTAR EQUITY TRUST

By: ______________________________ By: __________________________________

Attest: NORTHSTAR DISTRIBUTORS, INC.

By: ______________________________ By: __________________________________

6
<PAGE>

UNDERWRITING AGREEMENT FOR
CLASS C SHARES OF
NORTHSTAR EQUITY TRUST

NORTHSTAR MID-CAP GROWTH FUND

1. Each Fund hereby appoints the Underwriter as its exclusive agent to promote
the sale and to arrange for the sale of Class C shares of beneficial interest of
each Fund, including both unissued shares and treasury shares, through
broker-dealers of otherwise, in all parts of the United States and elsewhere
throughout the world. Each Fund agrees to sell and deliver its Class C shares,
upon the terms hereinafter set forth, as long as it has unissued and/or treasury
Class C shares available for sale.

(a) Each Fund hereby authorizes the Underwriter, subject to law and the
Declaration of Trust, to accept, for the respective account of each Fund, orders
for the purchase of its Class C shares, satisfactory to the Underwriter, as of
the time of receipt of such orders by the dealer-- or as otherwise described in
the Prospectus of the Trust.

(b) The public offering price of Class C shares shall be the net asset value per
share (as determined by each Fund) of the outstanding Class C shares of each
Fund. The net asset value shall be regularly determined on every business day as
of the time of the regular closing of the New York Stock Exchange and the public
offering price shall become effective as set forth from time to time in the
Prospectus; such net asset value shall also be regularly determined, and the
public offering price shall become effective, as of such other times for the
regular determination of net asset value as may be required or permitted by
rules of the National Association of Securities Dealers, Inc. or of the
Securities and Exchange Commission. Each Fund shall furnish daily to the
Underwriter, with all possible promptness, a detailed computation of net asset
value of its Class C shares.

(c) As compensation for providing services under this Agreement, (i) the
Underwriter shall receive from each Fund distribution and service fees under the
terms and conditions set forth in the Class C Distribution Plan for each Fund
adopted under Rule 12b-1 under the Investment Company Act of 1940, as amended,
as that Plan may be amended from time to time and subject to any further
limitations on such fees as the Trustees may impose, and (ii) the Underwriter
shall receive from each Fund all contingent deferred sales charges applied on
redemption of Class C shares of such Fund. Whether and to what extent a
contingent deferred sales charge will be imposed with respect to a redemption
shall be determined in accordance with, and in a manner set forth in, the
Trust's Prospectus.

(d) The Underwriter may reallow any or all of the distribution and services fees
and contingent deferred sales charges which it is paid under the Agreement to
such dealers as the Underwriter may from time to time determine.

(e) The Underwriter may fix quantity discounts and other similar variances or
waivers of the contingent deferred sales charge not inconsistent with the
provisions of the Investment Company Act of 1940; provided however, that the
Underwriter shall not impose any commission, permit any quantity discount,
<PAGE>

or impose any other similar waiver or variance in connection with the sale of
Class C shares except as disclosed in the Prospectus of the Trust.

2. The Underwriter agrees to devote reasonable time and effort to enlist
investment dealers to sell Class C shares of each Fund and otherwise promote the
sale and distribution and act as Underwriter for the sale and distribution of
the Class B shares of each Fund as such arrangements may profitably be made; but
so long as its does so, nothing herein contained shall prevent the Underwriter
from entering into similar arrangements with other funds and to engage in other
activities. Each Fund reserves the right to issue Class C shares in connection
with any merger or consolidation of a Fund with any other investment company or
any personal holding company or in connection with offers of exchange exempted
from Section 22(d) of the Investment Company Act 1940.

3. To the extent a Fund shall offer (as set forth in the Trust's Prospectus) to
provide physical certificates evidencing ownership of Class C shares, upon
receipt by a Fund at its principal place of business of a written order from the
Underwriter, together with delivery instructions, the Fund shall, as promptly as
practicable, cause certificates for the Class C shares called for in such order
to be delivered or credited in such amounts and in such names as shall be
specified by the Underwriter, against payment therefor in such manner as may be
acceptable to the Fund.

4. All sales literature and advertisements used by the Underwriter in connection
with sales of the Class C shares of each Fund shall be subject to the approval
of the respective Fund to which such literature relates. Each Fund authorizes
the Underwriter in connection with the sale or arranging for the sale of its
Class C shares to give only such information and to make only such statements or
representations as are contained in the Prospectus or in sales literature or
advertisements approved by each respective Fund or in such financial statements
and reports as are furnished to the Underwriter pursuant to paragraph 6 below.
The Funds shall not be responsible in any way for any information, statements or
representations given or made by the Underwriter or its representatives or
agents other than such information, statements and representations.

5. The Underwriter, as agent of each Fund, is authorized, subject to the
direction of each Fund, to accept Class C shares for redemption at prices
determined as prescribed in the Prospectus of the Trust. Such price shall
reflect the subtraction of the applicable contingent deferred sales charge, if
any, computed in accordance with and in the manner set forth in the Trust's
Prospectus. Each respective Fund shall reimburse the Underwriter monthly for its
out-of-pocket expenses reasonably incurred on behalf of each Fund in carrying
out the foregoing authorization. The Underwriter shall report all redemptions
promptly to the respective Funds.

6. Each Fund shall keep the Underwriter fully informed with regard to its
affairs, shall furnish the Underwriter with a certified copy of all financial
statements, and a signed copy of each report, prepared by independent public
accountants and with such reasonable number of printed copies of each annual and
other periodic report of each Fund as the Underwriter may request, and shall
cooperate fully in the efforts of the Underwriter to sell and arrange for the
sale of its Class C shares and in the performance by the Underwriter of all its
duties under this Agreement.

7. Each Fund will pay or cause to be paid expenses (including counsel fees and
disbursements) of any registration of its Class C shares of beneficial interest
under, but not limited to, Federal, state or other regulatory authority, fees of
filing periodic reports with regulatory bodies and of preparing, setting in type
and printing the Prospectus and any amendments thereto prepared for use in
connection with the offering of Class C shares of each Fund, for fees and
expenses incident to the issuance of Class C shares
<PAGE>

of beneficial interest, such as the cost of stock certificates (if offered),
issuance taxes, fees of the transfer agent, including the cost of preparing and
mailing notices to shareholders pertaining to transactions with respect to
shareholders' accounts, dividend disbursing agent's costs, including the cost
for preparing and mailing notices confirming shares acquired by shareholders
pursuant to the reinvestment of dividends and distributions, and the mailing to
shareholders of prospectuses, and notices and reports as may be required from
time to time by regulatory bodies or for such other purposes, except for
purposes of sales by the Underwriter as outlined in paragraph 8 hereof.

8. The Underwriter shall pay all of its own costs and expenses (other than
expenses and costs heretofore deemed payable by the Funds and other than
expenses which one or more dealers may bear pursuant to any agreement with the
Underwriter) incident to the sale and distribution of the shares issued or sold
hereunder including (a) expenses of printing copies of the Prospectus to be used
in connection with the sale of Class C shares of each Fund at printer's overrun
costs; (b) expenses of printing and distributing or disseminating any other
literature, advertising or selling aids in connection with the offering of Class
C shares for sale (however, the expenses referred to in (a) and (b) do not
include expenses incurred in connection with the preparation, printing and
distribution of the Prospectus or any report or other communication to
shareholders, to the extent that such expenses are necessarily incurred to
effect compliance by each Fund with any Federal or state law or other regulatory
bodies); and (c) expenses of advertising in connection with such offering;
provided, however, that the Underwriter shall not be required to pay for any
such expenses to the extent that they are paid pursuant to a Fund's distribution
plan adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940.

9. Each Fund agrees to register, from time to time as necessary, additional
Class C shares with the Securities & Exchange Commission, State and other
regulatory bodies and to pay the related filing fees therefor and to file such
amendments, reports and other documents as may be necessary in order that there
may be no untrue statement of a material fact in the Registration Statement or
Prospectus or that their may be no omission to state a material fact therein
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. As used in this Agreement, the term
" Registration Statement" shall mean the Registration Statement

most recently filed by the Trust with the Securities & Exchange Commission and
effective under the Securities Act of 1933, as amended, as such Registration
Statement is amended from time to time, and the term "Prospectus" shall mean the
most recent form of prospectus authorized by the Trust for use by the
Underwriter and by dealers.

Company Act of 1940 and either (a) by vote of the Trustees of the Trust or (b)
by vote of a majority or the outstanding voting securities of each Fund, as
defined in the Investment Company Act of 1940.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their officers thereunto duly authorized and to become effective as of the
day and year set forth above.

NORTHSTAR EQUITY TRUST

By: ________________________________________
President

NORTHSTAR DISTRIBUTORS, INC.

By: ________________________________________
President

Exhibit (h)(2)

NORTHSTAR EQUITY TRUST
ADMINISTRATIVE SERVICES AGREEMENT

Agreement made this 1st day of August, 1998 between Northstar Equity Trust
(the "Trust") on behalf of Northstar Mid-Cap Growth Fund (a "Fund"), and
Northstar Administrators Corporation (the "Administrator").

WHEREAS, the Trust is a Massachusetts business trust authorized to issue
shares in series and is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act") and the
Funds are series of the Trust; and

WHEREAS, Northstar Investment Management Corporation (the "Adviser")
serves as investment adviser to the Funds, and the Trust wishes to retain the
Administrator to render administrative and other services to the Funds, and the
Administrator is willing to render such services to the Funds; in consideration
of the premises, promises and mutual covenants herein contained, it is agreed
between the parties as follows:

1. Appointment

The Trust hereby appoints the Administrator to serve as administrator to
the Funds for the periods and on the terms set forth herein. The Administrator
accepts this appointment and agrees to furnish the services set forth herein for
the compensation provided herein.

2. Services as Administrator

A. General Services

Subject to the supervision and direction of the Board of Trustees of
the Trust, the Administrator will (a) assist in supervising all aspects of the
Funds' operations except those performed by the Funds' Adviser under its
investment advisory agreement; (b) furnish such statistical or other factual
information, advice regarding economic factors and trends and advice and
guidelines as to transactions in specific securities (but without generally
furnishing advice or making recommendations regarding the purchase or sale of
securities); (c) maintain or supervise, as the case may be, the maintenance by
the Adviser or third parties approved by the Trust of such books and records of
the Funds as may be required by applicable federal or state law; (d) perform all
corporate secretarial functions on behalf of the Funds; (e) provide the Funds
with office facilities, assemble and provide statistical and research data,
provide data processing, clerical, internal legal, internal executive,
administrative and bookkeeping services, and provide stationary and office
supplies; (f) supervise the performance by third parties of Fund accounting and
portfolio pricing services, internal audits and audits by independent
accountants for the Funds; (g) prepare and arrange for the printing, filing and
distribution of prospectuses, proxy materials, and periodic reports to the
shareholders of the Funds as required by applicable law; (h) prepare or
supervise the preparation by third parties approved by the Trust of all federal,
state, and local tax returns and reports of the Funds required by applicable
law; (i) prepare, update, and arrange the filing of the Funds' registration
statement and amendments thereto and other documents as the Securities and
Exchange Commission (the "Commission") and other federal regulatory authorities
may require by applicable law, and oversee compliance under all state regulatory
requirements to which the Funds are subject; (j) render to the Board of Trustees
of the Trust such periodic and special reports respecting the Funds as the Board
may reasonably request; (k) arrange, assemble information and reports for, and
attend meetings of the Trustees and the shareholders of the Funds; (l) maintain
a fidelity bond as required under the 1940 Act for the Trust and liability
insurance for the Trustees and officers of the Trust; and (m) make available its
officers and
<PAGE>

employees to the Board of Trustees and officers of the Trust for consultation
and discussions regarding the administration of the Funds.

B. Shareholder Servicing

Subject to the supervision and direction of the Board of Trustees,
the Administrator will (a) provide customer service to all shareholder accounts,
including responding to all telephone inquiries and written correspondence; and
(b) maintain records of all broker-dealers holding shareholder accounts in the
Funds; and (c) assist broker-dealers in servicing shareholder accounts,
including processing broker wire orders for purchases of shares of the Funds.

C. Performance of Duties

The Administrator, at its discretion, may enter into contracts with
third parties for the performance of the services to be provided by the
Administrator under this Agreement.

The Administrator, in the performance of its duties and obligations
under this Agreement, shall act in conformity wit the Registration Statement, as
amended, of the Funds and with the instructions and directions of the Board of
Trustees of the Trust and will conform to, and comply with, the requirements of
the 1940 Act and all other applicable federal and state laws and regulations. In
performing its shareholder servicing duties listed in subparagraph B herein, the
Administrator shall not engage in any activities that would require it to
register as a transfer agent under the Securities Exchange Act of 1934.

3. Documents

The Trust has delivered to the Administrator copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:

(a) Declaration of Trust, as amended, as filed with the
Secretary of the Commonwealth of Massachusetts;

(b) By-laws of the Trust;

(c) Certified resolutions of the Trustees authorizing the
appointment of the Administrator and approving this
Agreement on behalf of the Trust and each Fund;

(d) Registration Statement on Form N-1A under the 1940 Act
and the Securities Act of 1933, as amended from time to
time (the "Registration Statement"), as filed with the
Commission, relating to the Trust and shares of
beneficial interest of each Fund and all amendments
thereto;

(e) Notification of Registration of the Trust under the 1940
Act on Form N-8A as filed with the Commission and all
amendments thereto;

(f) Prospectus and Statement of Additional Information
included in the Registration Statement, as amended from
time to time. All references to this Agreement, the
Prospectus and Statement of Additional Information shall
be to such documents as most recently amended or
supplemented and in effect.
<PAGE>

4. Directors, Officers and Employees

The Administrator shall authorize and permit any of its directors,
officers and employees who may be elected as trustees or officers of the Trust
and/or the Funds to serve in the capacities in which they are elected. All
services to be furnished by the Administrator under this Agreement may be
furnished through such directors, officers or employees of the Administrator.

5. Records

The Administrator agrees that all records which it maintains for the
Trust and/or the Funds are property of the Trust and/or the Funds. The
Administrator will surrender promptly to the Trust and/or the Funds any such
records upon either the Trust's or the Fund's request. The Administrator further
agrees to preserve such records for the periods prescribed in Rule 31a-2 of the
Commission under the 1940 Act.

6. Compensation

In consideration of the services rendered pursuant to Section 2.A.
of this Agreement, the Funds will pay the Administrator a fee, computed and
accrued daily and payable monthly, at an annual rate of 0.10% of each Fund's
average daily net assets. For the purpose of determining fees payable to the
Administrator, the value of a Fund's average daily net assets shall be computed
at the times and in the manner specified in the Prospectus and Statement of
Additional Information of the Fund as from time to time in effect.

In consideration of the services rendered pursuant to Section 2.B.
of this Agreement, the Administrator shall receive a fee of $5.00 per year per
account of each beneficial holder of shares in a Fund, which shall be payable no
later than January 31 of the following year.

7. Expenses

The Administrator will bear all expenses in connection with the
performance of its services under this Agreement, except that the Administrator
will be reimbursed by the Funds for the out-of-pocket costs incurred in
connection with this Agreement or by third parties who are performing services
as permitted by paragraph 2. The Funds will bear certain other expenses to be
incurred in their operation, including: taxes, interest, brokerage fees and
commissions, if any; charges of custodians and transfer and dividend disbursing
agents; certain insurance premiums; outside auditing and legal expenses; cost of
maintenance of the Funds' existence; cost attributable to investor services,
including without limitation, telephone and personnel expenses; charges of
accounting, internal auditing, and pricing of portfolio securities for the
Funds, including the charges of an independent pricing service; costs of
preparing and printing prospectuses and statement of additional information for
regulatory purposes and for distribution to existing shareholders; costs of
shareholders' reports and meeting of the shareholders of the Funds and of the
officers or the Board of Trustees of the Trust; and any extraordinary expenses.

8. Standard of Care

The Administrator shall exercise its best judgment in rendering the
services under this Agreement. The Administrator shall not be liable for any
error or judgment or mistake of law or for any loss suffered by the Funds or the
Funds' shareholders in connection with the matter to which this Agreement
relates, provided that nothing herein shall be deemed to protect or purport to
protect the Administrator against liability to the Funds or to their
shareholders to which the Administrator would otherwise be subject by reason of
willful
<PAGE>

misfeasance, bad faith or gross negligence on its part in the performance of its
duties or by reason of the Administrator's reckless disregard of its obligations
and duties under this Agreement. As used in this Section 8, the term
"Administrator" shall include any officers, directors, employees, or other
affiliates of the Administrator performing services with respect to the Funds.

9. Duration and Termination

This Agreement shall continue in effect unless sooner terminated as
provided herein, for two years from the date hereof and shall continue from year
to year thereafter, provided each continuance is specifically approved at least
annually by a majority of the Board of Trustees of the Trust, including a
majority of the Board of Trustees who are not "interested persons" (as defined
in the 1940 Act) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting such approval. This Agreement is
terminable, without penalty, on 60 days' written notice by the Board of Trustees
of the Trust or by vote of holders of a majority of the Funds' shares, or upon
90 days' written notice by the Administrator.

10. Service to Other Companies or Accounts

The administrative services of the Administrator to the Funds under
this Agreement are not to be deemed exclusive, and the Administrator, or any
affiliate thereof, shall be free to render similar services to other investment
companies and other clients (whether or not their investment objective and
policies are similar to those of the Funds) and to engage in other activities,
so long as its services hereunder are not impaired thereby.

11. Assignment

This Agreement may be assigned by either party only upon the prior
written consent of the other party.

12. Miscellaneous

(a) This Agreement constitutes the full and complete agreement of
the parties hereto with respect to the subject matter hereof.

(b) Titles or captions of Sections contained in this Agreement are
inserted only as a matter of convenience and for reference, and in no way
defined, limit extend or describe the scope of this Agreement or the intent of
any provisions thereof.

(c) This Agreement may be executed in several counterparts, all of
which together shall for all purposes constitute one Agreement, binding on all
parties.

(d) This Agreement and the rights and obligations of the parties
hereunder shall be governed by, and interpreted, construed and enforced in
accordance with the laws of the State of Connecticut.

(e) If any provisions of this Agreement or the application thereof
to any party or circumstances shall be determined by any court of competent
jurisdiction to be valid or unenforceable to any extent, the remainder of this
Agreement or the application of such provision to such person or circumstance,
other than those as to which it is so determined to be invalid or unenforceable,
shall not be affected thereby, and each provision hereof shall be valid and
shall be enforced to the fullest extent permitted by law.
<PAGE>

(f) Notices of any kind to be given to the Administrator by the
Trust shall be in writing and shall duly given if mailed or delivered to the
Administrator at 300 First Stamford Place, Stamford, CT 06902, or at such other
address or to such individual as shall be specified by the Administrator to the
Trust.

(g) The Administrator, the Trust and the Funds each agree that the
name "Northstar" is proprietary to, and a property right of, the Administrator.
The Trust and the Funds agree and consent that (i) each will only use the name
"Northstar" as part of its name and for no other purpose, (ii) each will not
purport to grant any third party the right to use the name "Northstar" and (iii)
upon the termination of this Agreement, the Trust and the Funds shall, upon the
request of the Administrator, cease to use the name "Northstar," and shall use
its best efforts to cause its officers, trustees and shareholders to take any
and all actions which the Administrator may request to effect the foregoing.

(h) The Declaration of Trust, establishing the Trust, dated June 12,
1998, a copy of which, together with all amendments thereto (the "Declaration"),
is on file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name "Northstar Trust" refers to the Trustees under the
Declaration collectively as trustees, but not individually or personally; and no
Trustee, shareholder, officer, employee or agent of the Trust and/or the Funds
may be held to any personal liability, nor may resort be had to their private
property for the satisfaction of any obligation or claim or otherwise in
connection with the affairs of the Trust, but the Trust property only shall be
liable.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year set forth
above.

NORTHSTAR EQUITY TRUST

By: ________________________________________
President

NORTHSTAR ADMINISTRATORS
CORPORATION

By: ________________________________________
Secretary

Exhibit (m)

NORTHSTAR EQUITY TRUST
DISTRIBUTION AND SERVICE PLAN

The following is the Distribution and Service Plan (the "Plan") for Northstar
Equity Trust (the "Trust") consisting of the series named on Schedule 1 hereto,
as such schedule may be revised from time to time (each, a "Fund").

1. (a). Service Fee. Each Fund will pay to NORTHSTAR DISTRIBUTORS, INC., a
Minnesota corporation, and each successor principal distributor of such Fund's
shares pursuant to this Plan (each thereof, a "Distributor"), so long as it
shall be providing shareholder services, as compensation for providing, or
arranging for the provision of, shareholder services in respect of the Fund, a
monthly service fee (the "Service Fee") at the annual rate of 0.25 of 1% of the
average net asset value of the Fund, as determined at the close of each business
day during the month. The Distributor may pay all or any portion of the Service
Fee to securities dealers as service fees pursuant to agreements with such
dealers for providing personal services to investors in shares of the Fund
and/or the maintenance of shareholder accounts, or may use all or any portion of
the Service Fee to pay for expenses of the Distributor (including overhead
expenses) incurred in connection with the provision of personal services
provided to investors in shares of the Fund and/or the maintenance of
shareholder accounts, including without limitation, expenses of personnel and
communications equipment used in servicing shareholder accounts. All payments of
Service Fees under this plan are intended to qualify as "service fees" within
the meaning of the Conduct Rules of the National Association of Securities
Dealers, Inc. ("NASD"), as in effect from time to time.

(b). Distribution Fee. In addition to the Service Fee, each Fund will pay
to each Distributor, as compensation for acting as principal distributor in
respect of each class of the Fund's shares and as reimbursement of the
distribution expenditures incurred in connection therewith, including those
listed below, its "Allocable Portion" (as hereinafter defined) of a fee (the
"Distribution Fee") computed in respect of such class of shares as follows: (i)
at the annual rate of 0.75 of 1% of the average net asset value of the Fund
attributable to Class B and Class C shares; and (ii) at the annual rate of 0.05
of 1% of the average net asset value of the Fund attributable to Class A shares,
as determined at the close of each business day during the month. Such
expenditures may consist of: (i) commissions to sales personnel for selling
shares of the Fund (including interest and other financing costs in the case of
Class B and Class C shares); (ii) compensation, sales incentives and payments to
sales, marketing and service personnel; (iii) payments to broker-dealers and
other financial institutions which have entered into agreements with the
Distributor in the form of the Dealer Agreement for Northstar Affiliated
Investment Companies for distribution services rendered in connection with the
sale and distribution of shares of the Fund; (iv) payment of expenses incurred
in sales and promotional activities, including advertising expenditures related
to each class of shares of the Funds; (v) the costs of

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preparing and distributing promotional materials; (vi) the cost of printing the
Fund's Prospectus and Statement of Additional Information for distribution to
potential investors; and (vii) such other similar services that the Trustees
determine are reasonably calculated to result in sales of shares of the Fund.

Any payment of Distribution Fees under this Plan is intended to constitute an
"asset-based sales charge" within the meaning of the Conduct Rules of the NASD.

The underwriting agreement or distribution contract with respect to each Fund
and each Distributor relating to the Class B shares of the Fund (the
"Distributor's Contract") shall provide that: (I) the Distributor will be deemed
to have performed all services required to be performed in order to be entitled
to receive its Allocable Portion of the Distribution Fee payable in respect of
the Class B shares of the Fund upon the settlement date of each sale of a
"Commission Share" (as defined below) of such class taken into account in
determining such Distributor's Allocable Portion of such Distribution Fee in
respect of such class; (II) the Fund's obligation to pay such Distributor its
Allocable Portion of the Distribution Fee payable in respect of such class shall
not be terminated or modified for any reason (including a termination of the
Distributor's Contract between such Distributor and the Fund) except to the
extent required by a change in the Investment Company Act of 1940 (the "Act"),
the rules thereunder or the Conduct Rules of the NASD, in each case enacted or
promulgated after August 1, 1998, or in connection with a "Complete Termination"
(as hereinafter defined) of this Plan in respect of the Class B shares of the
Fund; (III) the Fund will not take any action to waive or change any contingent
deferred sales charge ("CDSC") in respect of the Class B shares of the Fund,
except as provided in the Fund's Prospectus or Statement of Additional
Information, without the consent of such Distributor or its assigns; (IV)
neither the termination of such Distributor's role as principal distributor of
the Class B shares of the Fund, nor the termination of such Distributor's
Contract nor the termination of this Plan will terminate such Distributor's
right to its Allocable Portion of the CDSCs; and (V) such Distributor may
assign, sell or pledge (collectively, "Transfer") its rights to the Service Fees
and its Allocable Portion of the Distribution Fees and CDSCs (but not such
Distributor's obligations to the Fund under the Distributor's Contract) to raise
funds to make the expenditures related to the distribution of Class B shares of
the Fund and in connection therewith, upon receipt of notice of such Transfer,
the Fund shall pay to the assignee, purchaser or pledgee (collectively with
their subsequent transferees, "Transferees"), as third party beneficiaries, such
portion of such Distributor's Service Fees, Allocable Portion of the
Distribution Fees or CDSCs in respect of the Class B shares of such Fund so
Transferred and except as provided in (II) above notwithstanding anything to the
contrary set forth in this Plan or in the Distributor's Contract, to the extent
such Distributor has Transferred its rights to its Allocable Portion of the
Distribution Fees and CDSCs, the Fund's obligation to pay such Distributor's
Allocable Portion of the Distribution Fees and CDSCs payable in respect of the
Class B shares of such Fund shall be absolute and unconditional and shall not be
subject to dispute, offset, counterclaim or any defense whatsoever, at law or
equity, including, without limitation, any of the foregoing based on the
insolvency or bankruptcy of such Distributor (it being understood that such
provision is not a waiver of the Fund's right to pursue such Distributor and
enforce such claims against the assets

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of such Distributor other than its right to the Distribution Fees and CDSCs in
respect of the Class B shares of the Fund transferred in connection with such
Transfer). For purposes of this Plan, the term "Allocable Portion" of
Distribution Fees or CDSCs payable in respect of the Class B shares of any Fund
as applied to any Distributor shall mean the portion of Distribution Fees or
CDSCs payable in respect of such Fund allocated to such Distributor in
accordance with the Allocation Schedule (as defined in the Distributor's
Contract as it relates to the Class B shares of the Fund). For purposes of this
Plan, the term "Complete Termination" of this Plan in respect of any Class B
shares of any Fund means a termination of this Plan involving the complete
cessation of the payment of Distribution Fees in respect of all Class B shares
of the Fund, and the termination of the distribution plans and the complete
cessation of the payment of distribution fees pursuant to every other
Distribution Plan pursuant to Rule 12b-1 in respect of the Class B shares of the
Fund and any successor fund or any fund acquiring a substantial portion of the
assets of the Fund and for every future class of shares which has substantially
similar characteristics to the Class B shares of the Fund taking into account
the manner of payment and amount of sales charge, contingent deferred sales
charge or other similar charges borne directly or indirectly by the holders of
such shares.

2. At least quarterly in each year that this Plan remains in effect, each Fund's
Principal Accounting Officer or Treasurer, or such other person authorized to
direct the disposition of monies paid or payable by each Fund, shall prepare and
furnish to the Trustees for their review, and the Trustees shall review, a
written report complying with the requirements of Rule 12b-l under the Act
regarding the amounts expended by each Fund under the Plan and the purposes for
which such expenditures were made.

3. This Plan shall not take effect until it, together with any related
agreements, have been approved (a) by a vote of at least the majority of the
Trustees, acting separately on behalf of each Fund, as well as a vote of at
least a majority of the Trustees, acting separately on behalf of each Fund, who
are not interested persons (as defined in the Act) of each Fund and who have no
direct or indirect financial interest in the operation of the Plan or in any
related agreements (the "Disinterested Trustees"), cast in person at a meeting
called for the purpose of voting on the Plan or any related agreements, and if
required under the Act (b) by a vote of at least a majority (as defined in the
Act) of the outstanding Class A shares of each Fund.

4. This Plan shall remain in effect for one year from the date of its execution
and may be continued thereafter if specifically approved at least annually by
vote of at least a majority of the Trustees, acting separately on behalf of each
Fund, as well as a majority of the Disinterested Trustees. As to each Class,
this Plan may be amended at any time, provided that (a) the Plan may not be
amended to increase materially the amount of the Distribution Fees or Service
Fees payable hereunder pursuant to Paragraph 1 hereof without the approval of at
least a majority (as defined in the Act) of the outstanding shares of the
applicable Class and (b) all material amendments to this Plan must be approved
by a vote of the Trustees, acting separately on behalf of each Fund, and of the
Disinterested Trustees.

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5. While this Plan is in effect, the selection and nomination of Trustees who
are not interested persons (as defined in the Act) shall be committed to the
discretion of the Disinterested Trustees then in office.

6. With respect to each Class, any related agreements shall be in writing and
each shall provide that (a) such agreement shall be subject to termination,
without penalty, by vote of a majority (as defined in the Act.) of the
outstanding voting shares of the applicable Class on not more than 60 days'
written notice to any other party to the agreement; and (b) such agreement shall
terminate automatically in the event of its assignment.

7. With respect to each Class, this Plan may be terminated at any time by a vote
of a majority of the Disinterested Trustees, acting separately on behalf of each
respective Fund, or by vote of a majority (as defined in the Act) of the
outstanding voting shares of the applicable Class of each Fund.

8. The Funds shall preserve copies of this Plan and any related agreements and
all reports made pursuant to paragraph 2 hereof, and any information, estimates,
projections and other materials that serve as a basis therefor, considered by
the Trustees, for a period of not less than six years from the date of this
Plan, or the agreements or reports, as the case may be, the first two years in
an easily accessible place.

9. The Declaration of Trust, establishing the Trust, dated June 12, 1998, a copy
of which together with all amendments thereto (the "Declaration") is on file in
the office of the Secretary of the Commonwealth of Massachusetts, provides that
the name "Northstar Trust" refers to the Trustees under the Declaration
collectively as trustees, but not individually or personally; and no Trustee,
shareholder, officer, employee or agent of the Trust and/or the Funds may be
held to any personal liability, nor may resort be had to their private property
for the satisfaction of any obligation or claim or otherwise in connection with
the affairs of the Trust, but the Trust property only shall be liable.

Dated: August 1, 1998

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SCHEDULE 1

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Name of Fund Maximum Class A Maximum Class B Maximum Class C
Combined Combined Combined
Distribution and Distribution and Distribution and
Service Fees Service Fees Service Fees
- --------------------------------------------------------------------------------
Northstar Mid-Cap 0.30 of 1% 1.00% 1.00%
Growth Fund
- --------------------------------------------------------------------------------