NORTHSTAR EQUITY TRUST, N-1A/A, 1998-08-14

NORTHSTAR EQUITY TRUST
N-1A/A, 1998-08-14

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As filed with the Securities and Exchange Commission on August 14, 1998

Registration Nos. 33-56881; 811-8817

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. 2
Post-Effective Amendment No. __

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 2

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

<PAGE>

NORTHSTAR
MID-CAP
GROWTH FUND
PROSPECTUS

August 20, 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
- --------------------------------------------------------------------------------

[graphic] OBJECTIVE

[graphic] INVESTMENT
STRATEGY

[graphic] HOLDINGS

[graphic] RISKS

[graphic] WHAT
YOU PAY
TO INVEST

These pages contain a description of the fund, including its objective,
investment strategy, types of holdings, risks and portfolio managers.

You'll also find:

WHAT YOU PAY TO INVEST. A list of the fees and expenses you pay -- both directly
and indirectly -- when you invest in the fund.

<TABLE>
<S> <C>
NORTHSTAR MID-CAP GROWTH FUND 2
MEET THE PORFOLIO MANAGERS 3
YOUR GUIDE TO BUYING, SELLING AND
EXCHANGING SHARES OF NORTHSTAR FUNDS 4
MUTUAL FUND EARNINGS AND YOUR TAXES 11
THE BUSINESS OF MUTUAL FUNDS 13
THE RISKS OF INVESTING IN MUTUAL FUNDS 15
WHERE TO GO FOR MORE INFORMATION 18
</TABLE>

<PAGE>

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

OBJECTIVE [graphic]

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

INVESTMENT [graphic]
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 [graphic]

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 15.

RISKS [graphic]

Because it invests in equities, the fund is affected by changes in the stock
market which could affect your investment in the fund. This fund is also subject
to the risks associated with investing in mid-sized companies. Securities of
mid-sized 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. Please refer to the section beginning on page 15,
THE RISKS OF INVESTING IN MUTUAL FUNDS.

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

WHAT YOU PAY [graphic]
TO INVEST

There are two types of fees and expenses when you invest in mutual funds: fees,
including sales charges, you pay directly when you buy or sell shares, and
operating expenses paid each year by the fund.

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

</TABLE>

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 estimated 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 6 for details.

(2) This charge decreases over time. Please see page 6 for details.

(3) Because of the 12b-1 fee, long-term shareholders may pay more than the
maximum permitted front-end sales charge.

2
<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, Mr. Bernstein was a Portfolio Manager at Strong
Capital Management where he co-managed the Strong Mid Cap Fund. From November
1995 to February 1997, Mr. Bernstein was a Portfolio Manager with Berkeley
Capital. From September 1993 to November 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.

(graphic) If you have any questions, please call 1-800-595-7827.

3
<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:
o first, choose a share class
o second, open a Northstar account and make your first investment
o 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.

In addition to Class A, Class B and Class C, the fund offers Class I shares.
Class I shares are only available to certain defined benefit plans, insurance
companies and foundations investing for their own account. Class I shares may
have different sales charges and other expenses, which may affect performance.
You can obtain additional information concerning Class I shares by calling us
at 1-800-595-7827.

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

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 charge CLASS B none
CLASS C none

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

Service fee CLASS A 0.25% per year
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

4
<PAGE>

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

FRONT-END SALES CHARGES
(Class A shares only)

<TABLE>
<S> <C> <C> <C>
Amount retained by
Your investment Front-end sales charge dealers
- ----------------------- ------------------------------------------------------ --------------------
as a percentage as a percentage as a percentage
of your net investment of offering price of offering price
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
-- Northstar or of any of its affiliated companies
-- any Northstar affiliated investment company -- a dealer that has a
sales agreement with the distributor
-- 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
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).

(graphic) If you have any questions, please call 1-800-595-7827.

5
<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.

<TABLE>
<CAPTION>
Your Investment CDSC on shares being sold
<S> <C>
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%
</TABLE>

CLASS B & C SHARES

<TABLE>
<CAPTION>
Years after you
bought the shares Class B Class C
<S> <C> <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 -- --
</TABLE>

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 5.

If you think you might be eligible for a CDSC waiver, please call us or consult
the SAI. CLASS B & C SHARES

6
<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 9).

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 RETIREMENTS 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 9, 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 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:

- $100 for non-retirement accounts
- $25 for retirement accounts
- $25 if you are investing using our automatic investment plan (see page
9).

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.

(graphic) If you have any questions, please call 1-800-595-7827.

7
<PAGE>

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

SOME RULES FOR
SELLING

o Selling your shares may result in a deferred sales charge. Please refer to
the table on page 6.

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 11 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 11 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.

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.

8
<PAGE>

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

<TABLE>
<CAPTION>
WAYS TO BUY, SELL OR EXCHANGE WHEN TO USE THIS OPTION
- ------------------------------------------ ---------------------------------
<S> <C>
THROUGH YOUR FINANCIAL CONSULTANT o buy
o sell
o exchange

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

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

- ------------------------------------------ ---------------------------------
AUTOMATIC INVESTMENT PLAN
To sign up for this service, complete o buy
section 7 of the application or call us at
1-800-595-7827.

- ------------------------------------------ ---------------------------------
SYSTEMATIC WITHDRAWAL PROGRAM
To sign up for this service, complete o sell
section 8 of the application or call us at
1-800-595-7827.
</TABLE>

(graphic) If you have any questions, please call 1-800-595-7827.

9
<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.
- --------------------------------------------------------------------

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.

10
<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.

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.

(graphic) If you have any questions, please call 1-800-595-7827.

11
<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.

12
<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.

(graphic) If you have any questions, please call 1-800-595-7827.

13
<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
received by dealers Amount
out of sales charges paid 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 4.

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.

14
<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:

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

- occupy a profitable market niche

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

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

- --------------------------------------------------------------------------------
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). Junk bonds are
high-yield securities with a credit rating of BB or lower. The fund may invest
in junk bonds that are rated as low as C by S&P or unrated debt securities
Northstar determines to be of equivalent quality. 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.

(graphic) If you have any questions, please call 1-800-595-7827.

15
<PAGE>

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

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.

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

- foreign securities may be less liquid and more volatile

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

- 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.

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.

- --------------------------------------------------------------------------------
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.

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:

16
<PAGE>

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

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

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

- 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 defensive purposes in periods of unusual market
conditions.

o Provides lower returns.

WHEN ISSUED SECURITIES AND FORWARDING 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.

(graphic) If you have any questions, please call 1-800-595-7827.

17
<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

<PAGE>

NORTHSTAR
MID-CAP
GROWTH FUND
INSTITUTIONAL CLASS SHARES
PROSPECTUS

August 20, 1998

Star Graphic

WHAT'S
INSIDE
- --------------------------------------------------------------------------------

<TABLE>

<S> <C>

[graphic] OBJECTIVE

[graphic] INVESTMENT
STRATEGY

[graphic] HOLDINGS

[graphic] RISKS

[graphic] WHAT
YOU PAY
TO INVEST
</TABLE>

These pages contain a description of the fund, including its objective,
investment strategy, types of holdings, risks and portfolio managers.

You'll also find:

WHAT YOU PAY TO INVEST. A list of the fees and expenses you pay -- both directly
and indirectly -- when you invest in the fund.

<TABLE>
<S> <C>
NORTHSTAR MID-CAP GROWTH FUND 2
MEET THE PORTFOLIO MANAGERS 3
YOUR GUIDE TO BUYING AND SELLING
CLASS I SHARES OF THE NORTHSTAR MID-CAP GROWTH FUND 4
MUTUAL FUND EARNINGS AND YOUR TAXES 7
THE BUSINESS OF MUTUAL FUNDS 9
THE RISKS OF INVESTING IN MUTUAL FUNDS 10
WHERE TO GO FOR MORE INFORMATION 13
</TABLE>

<PAGE>

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

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

INVESTMENT [graphic]
STRATEGY

HOLDINGS [graphic]

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 10.

RISKS [graphic]

Because it invests in equities, the fund is affected by changes in the stock
market which could affect your investment in the fund. This fund is also subject
to the risks associated with investing in mid-sized companies. Securities of
mid-sized companies may be subject to more abrupt or erractic market movements
because they are traded in lower volume and are subject to greater changes in
earnings and growth prospects. Please refer to the section beginning on page 10,
THE RISKS OF INVESTING IN MUTUAL FUNDS.

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

WHAT YOU PAY
TO INVEST [graphic]

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

Year 1 Year 3
-------- -------
Class I $ 15 47
...........................................................

2
<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.

(graphic) If you have any questions, please call 1-800-595-7827.

3
<PAGE>

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

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 5, 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 initial investment for Class I Shares is $1,000,000. Class I
Shares are only available to certain defined benefit plans, insurance
companies and foundations investing for their own account.

o The minimum amount of each Class I investment after your first one is
$100,000.

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

- --------------------------------------------------------------------------------
SOME RULES FOR
SELLING

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.

4
<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
- ----------------------------------------------------- ------------------------
<S> <C>
THROUGH YOUR FINANCIAL CONSULTANT o buy
o sell
- ----------------------------------------------------- ------------------------
BY MAIL
Please call us if you have any questions -- we can't o buy
process your request until we have all of the o sell
documents we need.
- ----------------------------------------------------- ------------------------
BY TELEPHONE o sell
To sign up for this service, complete section 9 of
the application or call us at 1-800-595-7827.
</TABLE>

(graphic) If you have any questions, please call 1-800-595-7827.

5
<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 or sell 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

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.

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

You can SELL 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.

6
<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.

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.

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

7
<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.

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.

8
<PAGE>
THE BUSINESS
OF MUTUAL
FUNDS
- --------------------------------------------------------------------------------